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Exhibit 2.1
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") made and
entered into as of the 6th day of October, 1995, is by and among Golden Ark,
Inc., a Nevada corporation (hereinafter referred to as the "Company"), Long
Distance Direct, Inc., a New York corporation (hereinafter referred to as
"LDDI") and each of the holders of shares of Common Stock of LDDI listed on
Exhibit A hereto (sometimes hereinafter collectively referred to as the "LDDI
Stockholders").
RECITALS
WHEREAS, prior to the date hereof, LDDI has acted as the general partner
of Long Distance Direct L.P. (the "Partnership"), a limited partnership formed
under the laws of the State of New York;
WHEREAS, on the date hereof, all of the limited partners of the
Partnership transferred and assigned all of their respective interests in the
Partnership to LDDI in exchange for shares of LDDI Common Stock (unless
otherwise indicated, references hereinafter to LDDI include the Partnership).
WHEREAS, the LDDI Stockholders own a total of 3,293,334 shares of LDDI
Common Stock (the "LDDI Shares") which constitutes all of the issued and
outstanding Common Stock of LDDI; and
WHEREAS, the Company desires to acquire all of the LDDI Shares and the
LDDI Stockholders desire to exchange all of the LDDI Shares for shares of Common
Stock of the Company in a transaction intended to qualify under Section
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the "Code").
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and in reliance upon the representations and warranties
hereinafter set forth, the parties agree as follows:
1. EXCHANGE OF THE SHARES AND CONSIDERATION
1.1 Shares Being Exchanged. Subject to the terms and conditions
of this Agreement, at the closing provided for in Section 2 hereof (the
"Closing"), each of the LDDI Stockholders shall sell, assign, transfer and
deliver to the Company all of the LDDI Shares which each of them respectively
own.
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1.2 Consideration. Subject to the terms and conditions of this
Agreement and in consideration of the sale, assignment, transfer and delivery of
the LDDI Shares to the Company, at the Closing the Company shall issue and
deliver to the LDDI Stockholders a total of Three Million (3,000,000) shares of
Common Stock of the Company (hereinafter referred to as the "Company Shares"),
each LDDI Stockholder to receive as full consideration for the LDDI Shares held
by such LDDI Stockholder the number of Company shares set forth opposite each
such LDDI Stockholder's name on Exhibit C attached hereto.
2. THE CLOSING
2.1 Time and Place. The closing of the transactions contemplated
by this Agreement shall be held at the offices of Day & Xxxxxxxx, 0000 Xxxxxxx
Xxxxxx, Xxxxx 000, Xxxxx Xxxx, Xxxxxxxxxx 00000, at 10:00 a.m. on the date first
above written, or at such other time and place as the parties may agree upon in
writing (the "Closing").
2.2 Deliveries by the LDDI Stockholders. At the Closing, each
LDDI Stockholder shall deliver to the Company the following: (a) stock
certificates representing the number of LDDI Shares set forth opposite the name
of such LDDI Stockholder on Exhibit A hereto, duly endorsed or accompanied by
stock powers duly executed in blank and otherwise in form acceptable for
transfer on the books of LDDI, and (b) an investment letter in the form attached
hereto as Exhibit B executed by such LDDI Stockholder.
2.3 Deliveries by LDDI. At the Closing, in addition to the
documents referred to in Section 9.1 hereof, LDDI shall deliver to the Company
the following: (a) certified resolutions of the LDDI Board of Directors
authorizing the execution and delivery of this Agreement and the performance by
LDDI of its obligations hereunder, and (b) a certificate of good standing of
LDDI from the Secretary of State of New York dated as of the most recent
practicable date.
2.4 Deliveries by the Company. At the Closing, in addition to
the documents referred to in Section 9.2 hereof, the Company shall deliver to
the LDDI Stockholders the following: (a) a stock certificate issued in the name
of each LDDI Stockholder representing the number of Company Shares each such
LDDI Stockholder is entitled to receive; (b) certified resolutions of the
Company's Board of Directors authorizing the execution and delivery of this
Agreement and the performance by the Company of its obligations hereunder; (c) a
certificate of good standing of the Company from the Secretary of State of
Nevada dated as of the most recent practicable date; (d) the written resignation
of all of the officers and directors of the Company effective as of the date of
Closing; and (e) the Company's minute book, corporate seal and copies of all
corporate and financial books and records.
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3. INDIVIDUAL REPRESENTATIONS AND WARRANTIES BY THE LDDI
STOCKHOLDERS
Each of the LDDI Stockholders, severally but not jointly,
represents and warrants to the Company as follows:
3.1 Title. Such LDDI Stockholder owns the number of LDDI Shares
set forth opposite such LDDI Stockholder's name on Exhibit A hereto, and shall
transfer to the Company at the Closing good and valid title to the LDDI Shares,
free and clear of all liens, claims, options, charges, and encumbrances of every
kind, character or description.
3.2 Authority. Such LDDI Stockholder has full power and
authority to execute this Agreement and consummate the transactions contemplated
hereby, and this Agreement is binding on such LDDI Stockholder and enforceable
in accordance with its terms. The execution and delivery of this Agreement and
consummation of the transactions contemplated hereby do not violate or conflict
with or constitute a default under any contract, commitment, agreement,
understanding, arrangement or restriction of any kind to which such LDDI
Stockholder is a party or by which such LDDI Stockholder or such LDDI
Stockholder's property is bound, or to such LDDI Stockholder's knowledge any
existing applicable law, rule, regulation, judgment, order or decree of any
government, governmental instrumentality or court, domestic or foreign, having
jurisdiction over such LDDI Stockholder or any of such LDDI Stockholder's
property.
3.3 Investment Representation. Such LDDI Stockholder intends to
acquire the Company Shares for investment and not with a view to the public
distribution or resale thereof, and such LDDI Stockholder shall confirm such
intention to the Company by delivering to the Company at the Closing an
investment letter in the form attached as Exhibit B hereto. Such LDDI
Stockholder agrees that the Company may endorse on any stock certificate for the
Company Shares to be delivered pursuant to this Agreement an appropriate legend
referring to the provisions of the investment letter attached as Exhibit B
hereto, and that the Company may instruct its transfer agent not to transfer any
Company Shares unless advised by the Company that such provisions have been
complied with.
4. REPRESENTATIONS AND WARRANTIES OF LDDI
LDDI represents and warrants to the Company as follows:
4.1 Authority. LDDI has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated herein. The execution and delivery of this Agreement and the
consummation of the transactions contemplated herein have been duly authorized
and approved by all necessary corporate action on the part of LDDI This
Agreement has been duly executed and delivered by LDDI and constitutes the valid
and binding obligation of LDDI, enforceable in accordance with its terms.
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4.2 Organization.
(a) LDDI is a corporation duly organized, validly existing
and in good standing under the laws of the State of New York. LDDI has the
corporate power and authority to carry on its business as presently conducted,
possesses all licenses, franchises, rights and privileges material to the
conduct of its business, and is qualified to do business in all jurisdictions
where the failure to be so qualified would have a material adverse effect on its
business or financial condition.
(b) The copies of the Articles of Incorporation and all
amendments thereto of LDDI, as certified by the Secretary of State of New York,
and the Bylaws and all amendments thereto, as certified by the Secretary of
LDDI, which have heretofore been delivered to the Company, are complete and
correct copies of the Articles of Incorporation and Bylaws of LDDI as amended
and in effect on the date hereof. All minutes of meetings and actions in writing
without a meeting of the Board of Directors and stockholders of LDDI are
contained in the minute book of LDDI heretofore delivered to the Company for
examination, and no minutes or actions in writing without a meeting have been
included in such minute book since such delivery to the Company that have not
also been delivered to the Company.
4.3 Capitalization.
(a) The authorized capital stock of LDDI consists of
20,000,000 shares of Common Stock, $.01 par value, of which 3,293,334 shares are
issued and outstanding, and 1,000,000 shares of Preferred Stock, none of which
are issued and outstanding. All of the issued and outstanding shares of Common
Stock of LDDI were issued in compliance with applicable state and Federal
securities laws, are duly authorized, validly issued, fully paid and
nonassessable, and are not subject to preemptive rights created by statute,
LDDI's Articles of Incorporation or Bylaws or any agreement to which LDDI is a
party or is bound.
(b) There are no options, warrants, calls, rights,
commitments or agreements of any character to which LDDI is a party or by which
it is bound obligating LDDI to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock of LDDI or obligating LDDI
to grant, extend or enter into any such option, warrant, call, right, commitment
or agreement.
4.4 Acquisition of Partnership. LDDI has entered into an
agreement (the "Partnership Acquisition Agreement") with all of the limited
partners (the "Limited Partners") of Long Distance Direct L.P., a limited
partnership formed under the laws of the State of New York (the "Partnership"),
a fully executed copy of which has been delivered to the Company, pursuant to
which the Limited Partners transferred and assigned all of their respective
interests in the Partnership to LDDI in exchange for shares of LDDI Common
Stock.
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4.5 Financial Statements. LDDI has delivered to the Company
copies of its audited combined balance sheets for the fiscal years ended
December 31, 1993 and 1994 and the related combined statements of operations,
stockholders' equity and cash flows for the periods then ended together with
appropriate notes to such financial statements, and copies of its unaudited
combined balance sheet as of March 31, 1995 and the related combined statement
of operations, stockholders' equity and cash flows for the three month period
then ended (the "LDDI Combined Financial Statements"), copies of which are
attached hereto as Schedule 4.5. The LDDI Combined Financial Statements consist
of the accounts of the Company and the Partnership. All significant intercompany
balances and transactions have been eliminated. The LDDI Combined Financial
Statements have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved, and
present fairly the financial condition of LDDI and the results of its operations
as of the dates and for the periods indicated thereon, subject in the case of
the unaudited portion of the LDDI Combined Financial Statements to normal
year-end audit adjustments, which will not be material, and the absence of
certain footnote disclosures.
4.6 Absence of Undisclosed Liabilities. At the date of the most
recent balance sheet of LDDI included in the LDDI Combined Financial Statements
and as of the Closing Date, LDDI had and will have no liability or obligation of
any nature, whether accrued, absolute, contingent, or otherwise, and whether
due, or to become due, other than liabilities or obligations individually or in
the aggregate less than $5,000, that is not reflected or reserved against in the
most recent balance sheet of LDDI or the accompanying notes thereto included in
the LDDI Combined Financial Statements, or set forth in Schedule 4.6 hereto,
except for those that may have been incurred after the date of such balance
sheet and those that are not required by generally accepted accounting
principles to be included in such balance sheet or the accompanying notes
thereto. All liabilities and obligations incurred after the date of such balance
sheet were incurred in the ordinary course of business and are usual and normal
in amount both individually and in the aggregate.
4.7 Business Changes. Since the date of the most recent balance
sheet of LDDI included in the LDDI Combined Financial Statements, except as
otherwise contemplated by this Agreement or set forth on Schedule 4.7 hereto,
LDDI has conducted its business only in the ordinary and usual course and,
without limiting the generality of the foregoing, there have been no changes in
the condition (financial or otherwise), business, net worth, assets, prospects,
properties, employees, operations, obligations or liabilities of LDDI which, in
the aggregate, have had or may be reasonably expected to have a materially
adverse effect on the condition, business, net worth, assets, prospects,
properties or operations of LDDI
4.8 Properties. The most recent LDDI combined balance sheet
included in the LDDI Combined Financial Statements reflects all of the real and
personal property used by LDDI in its business or otherwise held by LDDI except
for (i) property acquired or disposed of in the ordinary and usual course of the
business of LDDI since the date of the most recent LDDI combined balance sheet
included in the LDDI Combined Financial Statements, and (ii) property
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not required under generally accepted accounting principles to be reflected
thereon. Except as set forth on Schedule 4.8 attached hereto, LDDI has good and
marketable title to all assets and properties listed on the most recent LDDI
combined balance sheet included in the LDDI Combined Financial Statements and
thereafter acquired, free and clear of any imperfections of title, lien, claim,
encumbrance, restriction, charge or equity of any nature whatsoever, except for
the lien of current taxes not yet delinquent. All of the fixed assets and
properties listed on the most recent LDDI combined balance sheet included in the
LDDI Combined Financial Statements or thereafter acquired are in satisfactory
condition and repair for the requirements of the business as presently conducted
by LDDI.
4.9 Taxes. Except as described on Schedule 4.9 hereto, within
the times and in the manner prescribed by law, LDDI has filed all federal,
state, and local tax returns and reports required by law and has paid in full
all taxes, assessments, known penalties and interest (all such items are
collectively referred to as "Taxes") due to, or claimed to be due by, any
governmental authority. The most recent combined balance sheet of LDDI included
in the LDDI Combined Financial Statements fully accrues all current and deferred
Taxes. Except as described on Schedule 4.9 hereto, LDDI is not a party to any
pending action or proceeding, nor, to the actual knowledge of LDDI, is any such
action or proceeding threatened by any governmental authority for the assessment
or collection of Taxes, and there are no liens for Taxes except for liens for
property taxes not yet delinquent.
4.10 Litigation. Except as described on Schedule 4.10 hereto,
there is no claim, action, suit or proceeding, at law or in equity, pending
against LDDI, or involving any of its assets or properties, before any court,
agency, authority, arbitration panel or other tribunal (other than those, if
any, with respect to which service of process or similar notice has not been
made on LDDI), and, to the knowledge of LDDI, none have been threatened. LDDI is
not subject to any order, writ, injunction or decree of any court, agency,
authority, arbitration panel or other tribunal, nor is it in default with
respect to any notice, order, writ, injunction or decree.
4.11 No Conflict. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby do not and will not
conflict with, or result in a breach of any term or provision of, or constitute
a default under or result in a violation of, the Articles of Incorporation or
Bylaws of LDDI, any agreement, contract, lease, license or instrument to which
LDDI is a party or by which it or any of its properties or assets are bound, or
any judgment, decree, order, or writ by which LDDI is bound or to which it or
any of its properties or assets are subject.
4.12 Consent. No consent, approval, order or authorization of,
or registration, declaration or filing with, any court, administrative agency or
commission or other governmental authority or instrumentality is required by or
with respect to LDDI in connection with the execution and delivery of this
Agreement or the consummation by LDDI of the transactions contemplated herein.
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4.13 Brokers or Finders. LDDI has not dealt with any broker or
finder in connection with the transactions contemplated by this Agreement. LDDI
has not incurred, and shall not incur, directly or indirectly, any liability for
any brokerage or finders' fees or agents commissions or any similar charges in
connection with this Agreement or any transaction contemplated herein.
4.14 Underlying Documents. Copies of any underlying documents
listed or described as having been disclosed to the Company pursuant to this
Agreement, if requested by the Company, have been furnished to the Company. All
such documents furnished to the Company are true and correct copies, and there
are no amendments or modifications thereto that have not been disclosed to the
Company.
4.15 Full Disclosure. Any information furnished to the Company
by or on behalf of LDDI in writing pursuant to this Agreement at any time prior
to the Closing, does not and will not contain any untrue statement of a material
fact and does not and will not omit to state any material fact necessary to make
any statement, in light of the circumstances under which such statement is made,
not misleading.
4.16 LDDI Schedules. The Schedules attached hereto by LDDI
pursuant to Article 4 of this Agreement are sometimes hereinafter referred to as
the LDDI Schedules.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to LDDI and the LDDI
Stockholders as follows:
5.1 Authority. The Company has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated herein. The execution and delivery of this Agreement, the
consummation of the transactions contemplated herein, and the issuance of the
Company Shares in accordance with the terms hereof, have been duly authorized by
all necessary corporate action on the part of the Company. This Agreement has
been duly executed and delivered by the Company and constitutes the valid and
binding obligation of the Company, enforceable in accordance with its terms.
5.2 Organization.
(a) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Nevada. The
Company has the corporate power and authority to carry on its business as
presently conducted, and is qualified to do business in all jurisdictions where
the failure to be so qualified would have a material adverse effect on its
business or financial condition.
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(b) The copies of the Articles of Incorporation and all
amendments thereto of the Company, as certified by the Secretary of State of
Nevada, and the Bylaws of the Company and all amendments thereto, as certified
by the Secretary of the Company, which have heretofore been delivered to LDDI
and made available to the LDDI Stockholders, are complete and correct copies of
the Articles of Incorporation and Bylaws of the Company as amended and in effect
on the date hereof. All minutes of meetings and actions in writing without a
meeting of the Board of Directors and stockholders of the Company are contained
in the minute book of the Company heretofore delivered to LDDI and made
available to the LDDI Stockholders, and no minutes or actions in writing without
a meeting have been included in such minute book since such delivery to LDDI
that have not also been delivered to LDDI and made available to the LDDI
Stockholders.
5.3 Capitalization.
(a) The authorized capital stock of the Company consists of
100,000,000 shares of Common Stock, $.001 par value, of which 400,000 shares
(plus up to an additional 50 shares to be issued by the Company in connection
with rounding up fractional shares resulting from a recent 1.4700477 for one
stock split) are issued and outstanding. All of the issued and outstanding
shares of Common Stock of the Company were issued in compliance with applicable
state and Federal securities laws, are duly authorized, validly issued, fully
paid and non-assessable, and are not subject to preemptive rights created by
statute, the Company's Articles of Incorporation or Bylaws or any agreement to
which the Company is a party or is bound.
(b) There are no options, warrants, calls, rights,
commitments or agreements of any character to which the Company is a party or by
which it is bound obligating the Company to issue, deliver or sell, or cause to
be issued, delivered or sold, additional shares of capital stock of the Company
or obligating the Company to grant, extend or enter into any such option,
warrant, call, right, commitment or agreement.
5.4 Equity Investments. Company does not own any equity interest
in any corporation, partnership, or other form of business entity.
5.5 Financial Statements. Company has delivered to LDDI and made
available to the LDDI Stockholders copies of its audited balance sheets for the
years ended December 31, 1993 and 1994 and the related statements of
operations, stockholders' equity and cash flows for the periods then ended
together with appropriate notes to such financial statements, and copies of its
unaudited balance sheet as of June 30, 1995 and the related statement of
operations, stockholders' equity and cash flows for the six month period then
ended (the "Company Financial Statements"), a copy of which is attached hereto
as Schedule 5.5. The Company Financial Statements have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis during the periods involved, and present fairly the financial condition of
the Company and the results of operations as of the dates and for the periods
indicated therein, subject
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in the case of the unaudited portion of the Company Financial Statements to
normal year-end audit adjustments, which will not be material, and the absence
of certain footnote disclosures.
5.6 Absence of Undisclosed Liabilities. At the date of the most
recent balance sheet of the Company included in the Company Financial Statements
and as of the Closing Date, the Company had and will have no liability or
obligation of any nature, whether accrued, absolute, contingent or otherwise,
and whether due or to become due, that is not reflected or reserved against in
the most recent balance sheet of the Company included in the Company Financial
Statements, or set forth in Schedule 5.6 hereto, except for those that are not
required by generally accepted accounting principles to be included in such
balance sheet or the accompanying notes thereto and except for fees (including
legal and accounting fees), costs and expenses incurred in connection with the
activities and transactions contemplated by this Agreement.
5.7 Business Changes. The Company has not been actively engaged
in business or any activities other than seeking to acquire an operating
business since 1991.
5.8 Taxes. Within the times and in the manner prescribed by law,
the Company has filed all federal, state, and local tax returns required by law
and has paid all taxes, assessments, penalties and interest (all such items are
collectively referred to as "Taxes") due to, or claimed to be due by, any
governmental authority. The most recent balance sheet of the Company included in
the Company Financial Statements fully accrues all current and deferred Taxes.
5.9 Litigation. There is no claim, action, suit or proceeding,
at law or in equity, pending against the Company, or involving any of its assets
or properties, before any court, agency, authority, arbitration panel or other
tribunal (other than those, if any, with respect to which service of process or
similar notice has not been made on the Company), and, to the actual knowledge
of the Company, none have been threatened. The Company is not subject to any
order, writ, injunction or decree of any court, agency, authority, arbitration
panel or other tribunal, nor is it in default with respect to any notice, order,
writ, injunction or decree.
5.10 Contracts and Undertakings. The Company is not a party to
or bound by nor are any of its properties and assets subject to any contract,
instrument, lease, license, agreement, commitment or undertaking.
5.11 No Conflict. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby do not and will not
conflict with, or result in a breach of any term or provision of, or constitute
a default under or result in a violation of, the Articles of Incorporation or
Bylaws of the Company, any agreement, contract, lease, license, or instrument to
which the Company is a party or by which it or any of its assets are bound, or
any judgment, decree, order or writ by which the Company is bound or to which it
or any of its assets are subject.
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5.12 Consent. No consent, approval, order or authorization of,
or registration, declaration or filing with, any court, administrative agency or
commission or other governmental authority or instrumentality is required by or
with respect to the Company in connection with the execution and delivery of
this Agreement or the consummation by the Company of the transactions
contemplated herein, except for (a) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable state law and (b) such other consents, approvals, orders,
authorizations, registrations, declarations and filings which if not obtained or
made would not have a material adverse effect on the Company.
5.13 Brokers or Finders. The Company has not dealt with any
broker or finder in connection with the transactions contemplated by this
Agreement. The Company has not incurred, and shall not incur, directly or
indirectly, any liability for any brokerage or finders' fees or agents
commissions or any similar charges in connection with this Agreement or any
transaction contemplated herein.
5.14 Compliance with Securities Laws.
(a) The Company has delivered to LDDI and the LDDI
Stockholders, true and complete copies of the Company's Registration Statement
on Form S-18, Registration No. 33-26019-LA, (the "Registration Statement") which
was declared effective by the Securities and Exchange Commission ("SEC") on
February 14, 1991.
(b) The Company has delivered to LDDI and the LDDI
Stockholders true and complete copies, including exhibits and, as applicable,
amendments thereto, of the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1994 and all Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K filed since December 31, 1994. All reports required to be
filed by the Company with the Securities and Exchange Commission (collectively,
the "Reports") have been properly filed and comply in all material respects with
the requirements of the Securities Exchange Act of 1934 and the rules and
regulations promulgated thereunder with respect to such Reports. The Reports and
the Registration Statement do not contain any untrue statements of a material
fact, or fail to state any material fact required to be stated therein or
necessary to make the statements made therein not misleading.
(c) No formal or informal investigation or examination by
the Securities and Exchange Commission ("SEC") or by the securities
administrator of any state is pending or, to the knowledge of the Company,
threatened against the Company, any officer or director of the Company or any of
the Company's stockholders.
(d) Neither the Company nor any of its officers, directors,
promoters or beneficial owners of more than 10% of its Common Stock have been
convicted of any felony or misdemeanor in connection with the purchase and sale
of any security or involving the making of any false filing with the SEC.
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(e) Neither the Company nor any of its officers, directors,
promoters or beneficial owners of more than 10% of its Common Stock are subject
to any order, judgement or decree of any court of competent jurisdiction,
temporarily or preliminarily restraining or enjoining, or subject to any order,
judgment or decree of any court of competent jurisdiction, permanently
restraining or enjoining, such person from engaging in or continuing any conduct
or practice in connection with the purchase or sale of any security or involving
the making of any false filing with the SEC.
(f) All of the outstanding securities of the Company,
including, without limitation, the securities issued pursuant to the
Registration Statement, have been issued in compliance with all applicable
Federal and state securities laws.
(g) No individual, corporation, partnership, joint venture
or other business enterprise or entity has demand or other rights to cause the
Company to file any registration statement under the Securities Act of 1933
relating to any securities of the Company or any rights to participate in any
such registration statement.
5.15 Underlying Documents. Copies of any underlying documents
listed or described as having been disclosed to LDDI and made available to the
LDDI Stockholders pursuant to this Agreement, if requested by LDDI or the LDDI
Stockholders, have been furnished to LDDI and made available to the LDDI
Stockholders. All such documents furnished to LDDI and made available to the
LDDI Stockholders are true and correct copies, and there are no amendments or
modifications thereto that have not been disclosed to LDDI and made available to
the LDDI Stockholders.
5.16 Full Disclosure. Any information furnished by or on behalf
of the Company in writing pursuant to this Agreement, at any time prior to the
Closing does not and will not contain any untrue statement of a material fact
and does not and will not omit to state any material fact necessary to make any
statement, in light of the circumstances under which such statement is made, not
misleading.
5.17 Company Schedules. The Schedules attached hereto by the
Company pursuant to Article 5 of this Agreement are sometimes hereinafter
referred to as the Company Schedules.
6. COVENANTS RELATING TO CONDUCT OF BUSINESS OF LDDI
During the period from the date of this Agreement and continuing
until the Closing, LDDI and the LDDI Stockholders agree (except as expressly
contemplated by this Agreement or to the extent that the Company shall otherwise
consent in writing) that:
6.1 Ordinary Course. LDDI shall carry on its business in the
usual and ordinary course, in substantially the same manner as heretofore
conducted and, to the extent consistent with
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such business, use all reasonable efforts consistent with past practice and
policies to preserve intact its present business organization, keep available
the services of its present officers and key employees and preserve its
relationship with customers, providers and others having business dealings with
it to the end that its goodwill and ongoing business shall be unimpaired at the
Closing.
6.2 Dividends; Changes in Stock. LDDI shall not and shall not
propose to (i) declare or pay any dividends on or make other distributions in
respect of any of its capital stock, (ii) split, combine or reclassify any of
its capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of capital stock of LDDI,
or (iii) repurchase or otherwise acquire any shares of its capital stock or
rights to acquire any shares of its capital stock.
6.3 Issuance of Securities. LDDI shall not issue, deliver or
sell or authorize or propose the issuance, delivery or sale of, or purchase or
propose the purchase of, any shares of its capital stock of any class or
securities convertible into, or rights, warrants or options to acquire, any such
shares or other convertible securities.
6.4 Governing Documents. LDDI shall not amend its Articles of
Incorporation or Bylaws.
7. COVENANTS RELATING TO CONDUCT OF BUSINESS OF THE COMPANY
During the period from the date of this Agreement and continuing
until the Closing, the Company agrees (except as expressly contemplated by this
Agreement or to the extent that LDDI and the LDDI Stockholders shall otherwise
consent in writing) that:
7.1 Ordinary Course. The Company shall carry on its business in
the usual and ordinary course in substantially the same manner as heretofore
conducted.
7.2 Dividends; Changes in Stock. The Company shall not and shall
not propose to (i) declare or pay any dividends on or make other distributions
in respect of any of its capital stock, (ii) split, combine or reclassify any of
its capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of capital stock of the
Company, or (iii) repurchase or otherwise acquire any shares of its capital
stock or rights to acquire any shares of its capital stock.
7.3 Governing Documents. The Company shall not amend its
Articles of Incorporation or Bylaws.
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8. ADDITIONAL AGREEMENTS
8.1 Access to Information.
(a) LDDI and the LDDI Stockholders shall afford to the
Company and shall cause its independent accountants to afford to the Company,
and its accountants, counsel and other representatives, reasonable access during
normal business hours during the period prior to the Closing to all information
concerning LDDI, as the Company may reasonably request, provided that LDDI and
the LDDI Stockholders shall not be required to disclose any information which
either of them is legally required to keep confidential. The Company will not
use such information for purposes other than this Agreement and will otherwise
hold such information in confidence (and the Company will cause its consultants
and advisors also to hold such information in confidence) until such time as
such information otherwise becomes publicly available, and in the event of
termination of this Agreement for any reason the Company shall promptly return,
or cause to be returned, to the disclosing party all documents obtained from
LDDI and the LDDI Stockholders, and any copies made of such documents, extracts
and copies thereof.
(b) The Company shall afford to LDDI and the LDDI
Stockholders and shall cause its independent accountants to afford to LDDI and
the LDDI Stockholders, and their accountants, counsel and other representatives,
reasonable access during normal business hours during the period prior to the
Closing to all of the Company's properties, books, contracts, commitments and
records and to the audit work papers and other records of the Company's
independent accountants. During such period, the Company shall use reasonable
efforts to furnish promptly to LDDI and the LDDI Stockholders such information
concerning the Company as LDDI and the LDDI Stockholders may reasonably request,
provided that the Company shall not be required to disclose any information
which it is legally required to keep confidential. LDDI and the LDDI
Stockholders will not use such information for purposes other than this
Agreement and will otherwise hold such information in confidence (and LDDI and
the LDDI Stockholders will cause their respective consultants and advisors also
to hold such information in confidence) until such time as such information
otherwise becomes publicly available, and in the event of termination of this
Agreement for any reason LDDI and the LDDI Stockholders shall promptly return,
or cause to be returned, to the disclosing party all documents obtained from the
Company, and any copies made of such documents, extracts and copies thereof.
8.2 Communications. Between the date hereof and the Closing
Date, neither LDDI nor the Company will, without the prior written approval of
the other party, furnish any communication to its shareholders or to the public
generally if the subject matter thereof relates to the other party or to the
transactions contemplated by this Agreement, except as may be necessary, in the
opinion of their respective counsel, to comply with the requirements of any law,
governmental order or regulation.
8.3 Blue Sky Laws. The Company shall take such steps as may be
necessary to comply with the securities and Blue Sky laws of all jurisdictions
which are applicable in
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connection with the issuance of the Company Shares to the LDDI Stockholders
pursuant to this Agreement. LDDI shall use its best efforts to assist the
Company as may be necessary to comply with such laws.
8.4 Update to Disclosures. Without limiting the Company's right
to rely on the representations and warranties as of the date of this Agreement,
LDDI shall provide the Company with updates to the disclosures provided or made
available to the Company as to material facts which arise between the date of
this Agreement and the Closing and which, if they had occurred and been known
prior to the date of this Agreement, would have been required to have been
disclosed in order to make the representations and warranties contained in
Article 4 true and correct as of the date of this Agreement.
8.5 Securities Law Matters. The Company Shares issued to the
LDDI Stockholders shall be issued without registration under the Securities Act
of 1933, as amended, (the "Act"), in reliance upon certain exemptions from the
registration requirements of the Act, including Regulation D adopted thereunder.
Accordingly, the Company Shares may not be resold by the holders thereof without
registration under the Act unless a further exemption from the registration
requirements of the Act is available for such resale. All certificates
representing the Company Shares shall bear the following legend or a legend of
similar import:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR UNDER CERTAIN STATE SECURITIES LAWS. NO SALE OR
TRANSFER OF THESE SHARES MAY BE MADE IN THE ABSENCE OF (1) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (2) AN OPINION
OF COUNSEL THAT REGISTRATION UNDER THE ACT OR UNDER APPLICABLE
STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH
PROPOSED SALE OR TRANSFER."
9. CONDITIONS PRECEDENT
9.1 Conditions to Obligations of the Company. The obligations of
the Company to consummate the transactions contemplated by this Agreement are
subject to the satisfaction on or before the Closing of the following
conditions, unless waived by the Company:
(a) Representations and Warranties of the LDDI Stockholders.
The representations and warranties of the LDDI Stockholders set forth in this
Agreement shall be true and correct in all material respects as of the date of
this Agreement and as if made at and as of the Closing.
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(b) Representations and Warranties of LDDI. The
representations and warranties of LDDI set forth in this Agreement shall be true
and correct in all material respects as of the date of this Agreement and as if
made at and as of the Closing, and the Company shall have received a certificate
or certificates to such effect signed by the chief executive officer and chief
financial officer of LDDI
(c) Acquisition of Interests in the Partnership. LDDI shall
have acquired all of the Limited Partners' interests in the Partnership from the
Limited Partners in accordance with the terms of the Partnership Acquisition
Agreement, and such Partnership Acquisition Agreement shall not have been
rescinded, terminated or amended in any manner prior to the Closing.
(d) Additional Closing Documents. The Company shall have
received the following documents and instruments:
(1) Certified resolutions of the LDDI Board of Directors
authorizing the execution and delivery of this Agreement and the performance by
LDDI of its obligations hereunder;
(2) A certificate of good standing of LDDI from the
Secretary of State of New York dated as of the most recent practicable date;
(3) Such other documents and instruments as are required
to be delivered pursuant to the provisions of this Agreement or otherwise
reasonably requested by the Company.
9.2 Conditions to Obligations of LDDI and the LDDI Stockholders.
The obligations of LDDI and the LDDI Stockholders to consummate the transactions
contemplated by this Agreement are subject to the satisfaction on or before the
Closing of the following conditions unless waived by LDDI and the LDDI
Stockholders:
(a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement shall be true and correct
in all material respects as of the date of this Agreement and as if made at and
as of the Closing, and LDDI and the LDDI Stockholders shall have received a
certificate signed by the chief executive officer of the Company to such effect.
(b) Performance of Obligations of the Company. The Company
shall have performed in all material respects all obligations required to be
performed by it under this Agreement prior to the Closing, and LDDI and the LDDI
Stockholders shall have received a certificate signed by the chief executive
officer of the Company to such effect.
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(c) No Material Adverse Change. Since the date of the most
recent balance sheet included in the Company Financial Statements, except as
expressly contemplated by this Agreement and except for fees (including legal
and accounting fees), costs and expenses paid or incurred by the Company in
connection with the activities and transactions contemplated by this Agreement,
there shall have been no changes in the condition (financial or otherwise),
business, obligations or liabilities of the Company which, in the aggregate,
have had or may be reasonably expected to have a materially adverse effect on
the financial condition, business or operations of the Company.
(d) Resignations. The Company shall have received and
accepted the written resignations of all of the Company's officers and directors
as of the Closing, and shall have delivered such resignations to LDDI.
(e) Election of Directors and Officers. The Board of
Directors of the Company shall have elected the following persons to serve as
directors and officers of the Company effective as of the date of Closing:
Name Position
Xxxxxx Xxxxxxx Director and President
Xxxxxxx Xxxxxxx Director, Vice President and Chief
Financial Officer
9.3 Additional Closing Documents. LDDI and the LDDI Stockholders
shall have received the following documents and instruments:
(1) Certified resolutions of the Company's Board of
Directors authorizing the execution and delivery of this Agreement and the
performance by the Company of its obligations hereunder;
(2) A certificate of good standing of the Company from the
Secretary of State of Nevada dated as of the most recent practicable date;
(3) A list of the Company's stockholders as of a date within
ten (10) days prior to the Closing certified by the Company's stock transfer
agent;
(4) Such other documents and instruments as are required to
be delivered pursuant to the provisions of this Agreement or otherwise
reasonably requested by LDDI and the LDDI Stockholders.
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10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNITY
10.1 Survival of Representations and Warranties. The respective
representations and warranties of the parties contained herein shall survive the
Closing, but shall expire on the first anniversary date following the date of
Closing, unless a specific claim in writing with respect to these matters shall
have been made, or any action at law or in equity shall have been commenced or
filed before this anniversary date. The limitation period for the survival of
the representations and warranties of the parties contained herein shall not
apply to any fraudulent breach, representation or warranty or to any breach or
inaccuracy in any representation or warranty known to such party on or before
the date of Closing.
10.2 Indemnification.
(a) LDDI and the LDDI Stockholders agree to indemnify and
hold the Company and its officers, directors, stockholders, agents and
affiliates harmless from and against all damages, claims, losses, liabilities
and expenses (including, without limitation, reasonable attorneys' fees and
expenses) resulting from or arising out of (1) any breach or violation of this
Agreement by LDDI or the LDDI Stockholders; or (2) any breach of any of the
representations, warranties or covenants made in this Agreement by LDDI or the
LDDI Stockholders; or (3) any inaccuracy or misrepresentation in the LDDI
Schedules attached hereto or in any certificate, document or instrument
delivered in accordance with the terms of this Agreement by LDDI or the LDDI
Stockholders.
(b) The Company agrees to indemnify and hold LDDI and the
LDDI Stockholders and their respective officers, directors, stockholders, agents
and affiliates harmless from and against all damages, claims, losses,
liabilities and expenses (including, without limitation, reasonable attorneys'
fees and expenses) resulting from or arising out of (1) any breach or violation
of this Agreement by the Company; or (2) any breach of any of the
representations, warranties or covenants made in this Agreement by the Company;
or (3) any inaccuracy or misrepresentation in the Company Schedules attached
hereto or in any certificate, document or instrument delivered in accordance
with the terms of this Agreement by the Company.
(c) The obligations to indemnify and hold harmless pursuant
to this Section 10.2 shall survive the Closing for a period of one (1) year
after the date of Closing.
11. OBLIGATIONS OF THE COMPANY AFTER THE CLOSING
11.1 SEC Filing. The Company shall file a Form 8-K which
contains the financial and other information required by Form 8-K with the SEC
within the time periods specified in Form 8-K.
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12. PAYMENT OF EXPENSES
The Company, LDDI and the LDDI Stockholders shall each pay their
own fees and expenses incurred incident to the preparation and carrying out of
the transactions herein contemplated (including legal and accounting fees).
13. TERMINATION
13.1 Termination. This Agreement may be terminated at any time
prior to the Closing Date:
(a) by mutual written consent of the Company, LDDI and the
LDDI Stockholders;
(b) by the Company if there has been a material breach of
any representation, warranty, covenant or agreement contained in this Agreement
by LDDI or the LDDI Stockholders;
(c) by LDDI and the LDDI Stockholders if there has been a
material breach of any representation, warranty, covenant or agreement contained
in this Agreement by the Company.
13.2 Effect of Termination. Termination of this Agreement in
accordance with Section 13.1 may be effected by written notice from either the
Company or LDDI and the LDDI Stockholders, as appropriate, specifying the
reasons for termination and shall not subject the terminating party to any
liability for any valid termination.
14. MISCELLANEOUS
14.1 Tax Treatment. The transaction contemplated herein is
intended to qualify as a so-called "tax-free" reorganization under the
provisions of Section 368 of the Internal Revenue Code. LDDI, the LDDI
Stockholders and the Company acknowledge, however, that they each have been
represented by their own tax advisors in connection with this transaction; that
no party hereto has made any representation or warranty to the other with
respect to the treatment of such transaction or the effect thereof under
applicable tax laws, regulations, or interpretations; and that no attorney's
opinion or private revenue ruling has been obtained with respect to the effects
thereof under the Internal Revenue Code of 1986, as amended.
14.2 Further Assurances. From time to time, at the other party's
request and without further consideration, each of the parties will execute and
deliver to the others such documents and take such action as the other party may
reasonably request in order to consummate more effectively the transactions
contemplated hereby.
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14.3 Payment of Fees and Expenses. If any legal action or any
arbitration or other proceeding is brought for the enforcement of this
Agreement, or because of an alleged dispute, breach, default, or
misrepresentation in connection with any of the provisions of this Agreement,
the successful or prevailing party or parties shall be entitled to recover
reasonable attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it or they may be entitled.
14.4 Parties in Interest. Except as otherwise expressly provided
herein, all the terms and provisions of this Agreement shall be binding upon,
shall inure to the benefit of and shall be enforceable by the respective heirs,
beneficiaries, personal and legal representatives, successors and assigns of the
parties hereto.
14.5 Entire Agreement; Amendments. This Agreement, including the
Schedules, Exhibits and other documents and writings referred to herein or
delivered pursuant hereto, which form a part hereof, contains the entire
understanding of the parties with respect to its subject matter. There are no
restrictions, agreements, promises, warranties, covenants or undertakings other
than those expressly set forth herein or therein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to its
subject matter. This Agreement may be amended only by a written instrument duly
executed by the parties or their respective successors or assigns.
14.6 Headings. The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
14.7 Pronouns. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine or neuter, singular or plural, as the
identity of the person, persons, entity or entities may require.
14.8 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
14.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
14.10 Notices. Any and all notices, demands or other
communications required or desired to be given hereunder by any party shall be
in writing and shall be validly given or made to another party if given by
personal delivery, telex, facsimile, telegram or if deposited in the United
States mail, certified or registered, postage prepaid, return receipt requested.
If such notice, demand or other communication is given by personal delivery,
telex, facsimile or telegram, service shall be conclusively deemed made at the
time of receipt. If such notice, demand or other communication is given by mail,
such notice shall be conclusively deemed
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given forty-eight (48) hours after the deposit thereof in the United States mail
addressed to the party to whom such notice, demand or other communication is to
be given as hereinafter set forth:
If to LDDI or the LDDI Stockholders: At the addresses set forth below their
names on the signature page of this
Agreement or on Exhibit A hereto
If to Company: At the address set forth below its name
on the signature page of this Agreement
15. APPOINTMENT OF AGENT
The LDDI Stockholders hereby irrevocably constitute and appoint
Xxxxxxx Xxxxxxx as their true and lawful attorney (the "Agent") with full right
and power in their names and stead to take any and all action by and on behalf
of them necessary or desirable to consummate the transactions contemplated by
this Agreement, including without limitation, the right and power to receive
certificates representing the Company Shares on behalf of each of the LDDI
Stockholders, to deliver to the Company the certificates representing the LDDI
Shares, to waive performance of any of the obligations of the Company or waive
compliance by the Company with any of its covenants hereunder, to deliver
investment letters of the LDDI Stockholders referred to in Section 3.3 hereof,
and to amend or terminate this Agreement as herein provided. Any such action
taken by the Agent on behalf of a LDDI Stockholder shall be binding upon such
LDDI Stockholder. The Company shall not have any responsibility to the LDDI
Stockholders or any of them for the distribution by the Agent of the
certificates representing the Company Shares to be delivered to the LDDI
Stockholders, nor shall the Company be liable in any manner whatsoever to the
LDDI Stockholders or any of them by or on account of any act or omission of the
Agent.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the parties hereto as of the date first above written.
GOLDEN ARK, INC.,
a Nevada corporation
By: /s/
----------------------------------
It: President
------------------------------
Address:
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LONG DISTANCE DIRECT, INC.,
a New York Corporation
By:
-----------------------------------
Its: Vice President
-----------------------
Address: 0 Xxxx Xxxx Xxxxx
Xxxxx Xxxxx
XX 00000
(Signatures of LDDI stockholders commences on the next page)
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LDDI STOCKHOLDERS
SIGNATURE PAGE
/s/
---------------------------------------------------------------------
/s/ Xxxxxxx Xxxxxxx
---------------------------------------------------------------------
/s/ Business Systems Consultants by Xxxxxxx Xxxxxxx, Attorney in Fact
---------------------------------------------------------------------
/s/ Wardley Securities S.A. by Xxxxxxx Xxxxxxx, Attorney in Fact
---------------------------------------------------------------------
/s/ Xxxx Xxxxxxxx by Xxxxxxx Xxxxxxx, Attorney in Fact
---------------------------------------------------------------------
/s/ Xxxxxxx Xxxxxxxxx by Xxxxxxx Xxxxxxx, Attorney in Fact
---------------------------------------------------------------------
/s/ Wingmead Securities Limited by Xxxxxxx Xxxxxxx, Attorney in Fact
---------------------------------------------------------------------
*Xxxxxxx Xxxxxxx, by signing his name hereto, does sign this Agreement
and Plan of Reorganization among Golden Ark, Inc., Long Distance Direct, Inc.,
and the stockholders of Long Distance Direct, Inc. on behalf of each of the
indicated persons on October 6, 1995, pursuant to a power of attorney duly
executed by such person.
/s/ October 6, 1995
-----------------------------------
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NAME AND ADDRESS OF NUMBER OF LDDI
LDDI STOCKHOLDERS SHARES OWNED
----------------- ------------
Xxxxxxx Xxxxx Xxxxxxx 1,194,865
0 Xxx Xxxx Xxxx Xxxx
Xxxxxx XX0 0XX
Xxxxxx Xxxxxxx 1,194,865
0 Xxxxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Xxxx 162,567
00 Xxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
Business Systems Consultants Ltd. 487,700
00 Xxx Xxxxxx, Xx. Xxxxx Xxxx,
Xxxxxxxx, Xxxxxxx Xxxxxxx
Wardley Securities S.A. 162,567
16 Bd des Tranchees, Xxxx Xxxxxxx 000,
0000 Xxxxxx 00, Xxxxxxxxxxx
Xxxx Xxxxxxxx 32,513
Highcroft, 00 Xxxxxxxxxx Xxxx,
Xxxxxxxxx, Xxxx XX00 0XX
Xxxxxxx Xxxxxxxxx 16,257
00 Xxxxx Xxxxxx Xxxxx, Xxxxxx,
Xxxxxx XX00 1 BP
Wingmead Securities Limited 42,000
00 Xxxxxxxxx Xxxxxx,
Xxxxxx X0 0XX
----------
TOTAL 3,293,334
SCHEDULE A
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NAME AND ADDRESS OF NUMBER OF COMPANY
LDDI STOCKHOLDERS SHARES TO BE ISSUED
----------------- -------------------
Xxxxxxx Xxxxx Xxxxxxx 1,087,065
0 Xxx Xxxx Xxxx Xxxx
Xxxxxx XX0 0XX
Xxxxxx Xxxxxxx 1,087,065
0 Xxxxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Xxxx 147,900
00 Xxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
Business Systems Consultants Ltd. 443,700
00 Xxx Xxxxxx, Xx. Xxxxx Xxxx,
Xxxxxxxx, Xxxxxxx Xxxxxxx
Wardley Securities S.A. 147,900
16 Bd des Tranchees, Xxxx Xxxxxxx 000,
0000 Xxxxxx 00, Xxxxxxxxxxx
Xxxx Xxxxxxxx 29,580
Highcroft, 00 Xxxxxxxxxx Xxxx,
Xxxxxxxxx, Xxxx XX00 0XX
Xxxxxxx Xxxxxxxxx 14,790
00 Xxxxx Xxxxxx Xxxxx, Xxxxxx,
Xxxxxx XX00 1 BP
Wingmead Securities Limited 42,000
00 Xxxxxxxxx Xxxxxx,
Xxxxxx X0 0XX
----------
TOTAL 3,000,000
EXHIBIT C
