SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (D)
of the
SECURITIES EXCHANGE ACT OF 1934
Date of Report: October 9, 1998
GENERAL AMERICAN ROYALTY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
1-12835 75-2468002
(Commission File Number) (IRS Employer Identification Number)
C/O JAMES F. SMITH
ASSISTANT SECRETARY
GENERAL AMERICAN ROYALTY, INC.
5646 MILTON STREET, SUITE 731
DALLAS, TEXAS 75206
(Address of principal executive offices)
(214) 361-8535
(Registrant's telephone number, including area code)
4925 GREENVILLE AVENUE, SUITE 1005
DALLAS, TEXAS 75206
(Former name or former address, if changed since last report)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
- -------- ------------------------------------
(a) On October 9, 1998 the registrant acquired 100% of the common stock
of privately-held, UK based, World Wide Communications (Holdings) Ltd. ("WWCH"),
for 5,500,000 shares of its common stock. Prior to the acquisition, WWCH had 22
shareholders. The registrant's shareholders of record on October 9, 1998 will
receive 400,000 additional shares (equal to 33.3% of the shares owned),as a 1
1/3:1 increase in the outstanding shares. As a result of the acquisition and 1
1/3:1 increase, the WWCH shareholders own 75% of the registrant's issued and
outstanding common stock.
Effective as of the closing date, the registrant's officers and two of its
directors resigned. James F. Smith remained as a director. Paul
Goodman-Simpson, Aaron Goodman-Simpson and Keith Goodyer were appointed as new
directors. Paul Goodman-Simpson was elected President and CEO, Aaron
Goodman-Simpson was elected Vice President and Secretary, and Keith Goodyer was
elected Vice President and Treasurer.
(b) Security ownership of Certain Beneficial Owners and Management
immediately after the closing date:
Title of Name and Address Amount and Nature
Percent
Class of Beneficial Owner of Ownership
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of Class
- ---------
Common James F. Smith 182,667 (1)
2.5%
Common Paul Goodman-Simpson 385,000
5.3%
Common Aaron Goodman-Simpson 165,000
2.3%
Common Keith Goodyer 137,500 1.9%
Common All officers and directors 870,167
11.9%
as a group (4 Persons)
(1) Mr. Smith owns 22,667 shares of record. 20,000 shares are held by
a trust which benefits Mr. Smith's children; Mr. Smith is the trustee. 140,000
shares are owned by Sammie S. Smith, Mr. Smith's spouse. Mr. Smith disclaims
any beneficial ownership of the 160,000 shares.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
- -------- ----------------------------------------
(a) As a result of the acquisition, WWCH became a wholly-owned
subsidiary of the registrant on October 9, 1998. Based on the stock ownership
that resulted from the acquisition, the transaction will be accounted or as a
purchase in which WWCH is assumed to have acquired the registrant. The combined
company will engage in the business of telecommunications, electronics design
and licensing in the United Kingdom and Europe. The company's goal is to
generate profits from low-cost email integration into television sets and from
re-selling local and premium rate telephone calls on its ISP Internet service
products.
(b) All of the assets owned by WWCH were used in business activities as
described in the previous paragraph. The registrant was formerly involved in
the business of acquiring royalty interests in oil and gas wells, but will no
longer engage in any such operations.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
- -------- -------------------------------------
(a) Financial statements of business acquired.
At the date of filing this report, the required financial statements of
WWCH had not been completed and were not available for filing herein. The
registrant has undertaken to file a report on Form 10-KSB as of September 30,
1998 that shall include the required financial statements of WWCH and the pro
forma financial information required by paragraph (b) of this item.
(b) Pro forma financial information.
See paragraph (a) of this item above.
(c) Exhibits.
Exhibit A - Agreement and Plan of Reorganization (without schedules
and exhibits - except Exhibit A)
ITEM 8. CHANGE IN FISCAL YEAR.
- -------- -------------------------
Effective as of the closing date, the registrant has elected to change its
fiscal year from October 31 to September 30. The registrant will file a
transitional report on Form 10-KSB for the eleven months ended September 30,
1998
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GENERAL AMERICAN ROYALTY, INC.
By:/s/Paul Goodman-Simpson
------------------------
Paul Goodman-Simpson, President and CEO
Date: October 23, 1998
<PAGE>
ExhibitA - Page 1
EXHIBIT A
AGREEMENT AND PLAN
OF REORGANIZATION
by and among
GENERAL AMERICAN ROYALTY, INC.
JAMES F. SMITH
and the
STOCKHOLDERS OF WORLD WIDE
COMMUNICATIONS (HOLDINGS), LTD.
<PAGE>
ExhibitA - Page
ExhibitA - Page i
TABLE OF CONTENTS
PAGE
1. Exchange of Shares 4
2. Delivery of Shares 4
3. Representations and Warranties of WWC Holdings and Stockholders 4
3(a) Securities Holders 4
3(b) Financial Statements 4
3(c) Undisclosed Liabilities 5
3(d) Absence of Changes 5
3(e) Litigation, Etc. 5
3(f) Compliance; Governmental Authorizations 5
3(g) Due Organization, Etc. 5
3(h) Tax Matters 5
3(i) Agreements, Etc. 5
3(j) Title to Property and Related Matters 6
3(k) Corporate Records 6
3(l) Licenses; Trademarks; Trade Names, Etc. 6
3(m) Authorization by WWC Holdings 6
3(n) Capitalization 6
3(o) Full Disclosure 6
3(p) Brokerage or Finder's Fees 7
3(q) Share Ownership 7
3(r) Approvals Required 7
4. Representations and Warranties of GAR and Smith 7
4(a) Shares of Common Stock 7
4(b) Due Authorization, Etc. 7
4(c) Financial Statements 7
4(d) Undisclosed Liabilities 7
4(e) Material Adverse Change 7
4(f) Litigation, Etc. 8
4(g) Due Organization, Etc. 8
4(h) Tax Matters 8
4(i) Agreements, Etc. 8
4(j) Capitalization 8
4(k) Disclosure of Material Facts 8
4(l) Corporate Records 8
4(m) Stockholders List 8
4(n) Title to Assets 9
4(o) Compliance; Governmental Authorizations 9
4(p) Brokerage Fees 9
4(q) SEC Filings 9
5. Affirmative Covenants of GAR, WWC Holdings and Stockholders 9
5(a) Filing of Form 8-K 9
5(b) Preparation of Disclosure Statement 9
5(c) Application to NASDAQ 9
5(d) Delivery of Disclosure Statement 9
5(e) Delivery of Documents 9
5(f) Future Stock Distributions 9
5(g) Change of Corporation Name 10
5(h) Acquisition of Interest in CallNet PLC 10
5(i) Anti-Dilution 10
5(j) Waiver of Preemptive Rights 10
6. Closing 10
7. Conditions Precedent to Obligations of WWC Holdings and Stockholders 10
7(a) Truth of Representations and Warranties 10
7(b) Compliance with Covenants 10
7(d) Approval by Legal Counsel 10
7(e) Opinion of Counsel 10
7(f) Officers' Certificate 11
8. Conditions Precedent to Obligations of GAR 11
8(a) Truth of Representations and Warranties 11
8(b) Compliance with Covenants 11
8(c) Delivery of Investment Letter 11
8(d) Delivery of Exhibits and Schedules 11
8(e) Opinion of Counsel 11
9. Indemnification 12
10. Representations, Warranties and Limitations on Liability 12
10(a) Nature of Representations and Warranties 12
10(b) Limitations on Liability 12
11. Documents at Closing 14
11(a) Documents Delivered by the Stockholders 14
11(b) Documents Delivered by GAR 14
12. Miscellaneous 15
12(a) Further Assurances 15
12(b) Waivers 15
12(c) Notices 15
12(d) Headings 15
(e) Counterparts 15
12(f) Governing Law 15
12(g) Binding Effect 16
12(h) Entire Agreement 16
12(i) Time 16
12(j) Severability 16
12(k) Default Costs 16
<PAGE>
EXHIBITS
A. Holders of GAR Common Stock after Closing
B. WWC Holdings's financial statements at September 30, 1998
C. Certificate and Bylaws of GAR
D. GAR's Stockholders' List
E. GAR Financial Statements at October 31, 1997 and July 31, 1998
F. Form 10-K and Form 10-Q
G. Form of Investment Letter
H. WWC Holdings Material Contracts
I. GAR Material Contracts
J. Undertaking to EPH
SCHEDULES
I. As to WWC Holdings:
1. Liabilities of WWC Holdings Not Disclosed in Financial Statements
2. Adverse Changes since the date of the Financial Statements
3. Litigation
4. Exceptions to Compliance with Laws and Regulations
5. Material Agreements
6. Exceptions to Title to Properties and List of Real Property
7. Licenses, Trademarks, Tradenames, Etc.
8. WWC Holdings's Capitalization
II. As to GAR:
9. Liabilities of GAR Not Disclosed in Financial Statements
10. Adverse Changes Since the Date of the Financial Statements and Form
10-Q
11. Litigation
12. Material Agreements
13. Exceptions to Title to Properties
14. Exceptions to Compliance with Laws and Regulations
III. Covenants:
15. CallNet PLC
16. Anti-Dilution
<PAGE>
Exhibit A - Page 22
ExhibitA - Page 13
ExhibitA - Page 4
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is made and
entered into this 9th day of October, 1998, by and among General American
Royalty, Inc., a Delaware corporation (hereinafter referred to as "GAR"), James
F. Smith, individually ("Smith"), and the undersigned stockholders
("Stockholders") of World Wide Communications (Holdings), Ltd., a company
incorporated in England and Wales (hereinafter referred to as "WWC Holdings").
R E C I T A L S:
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The Stockholders own all of the issued and outstanding shares of WWC
Holdings's common stock. GAR desires to acquire all of the issued and
outstanding common stock of WWC Holdings, making WWC Holdings a wholly-owned
subsidiary of GAR, and Stockholders desire to exchange all of the shares of WWC
Holdings's common stock, for designated shares of GAR's common stock to be
issued. It is the intention of the parties hereto that: (i) GAR shall acquire
all of the issued and outstanding common stock of WWC Holdings in exchange
solely for the number of designated shares of GAR's authorized but unissued
common stock set forth below (the "Exchange"); (ii) the Exchange shall qualify
as a tax-free reorganization under Section 368(a)(1)(B) of the Internal Revenue
Code of 1986, as amended, and related sections thereunder; and (iii) the
Exchange shall qualify as a transaction in securities exempt from registration
or qualification under the Securities Act of 1933, as amended, and under the
applicable securities laws of each state or jurisdiction where Stockholders
reside.
NOW, THEREFORE, for the mutual consideration set out herein, the parties
hereto agree as follows:
1. EXCHANGE OF SHARES1. Exchange of Shares. GAR, and Stockholders
agree that on the Closing Date (as hereinafter defined) Stockholders will
exchange all of the issued and outstanding shares of the common stock of WWC
Holdings (1,000 shares presently outstanding) for 5,500,000 shares (the
"Shares") of GAR's common stock, $.001 par value per share (the "Common Stock")
as then issued.
2. DELIVERY OF SHARES2. Delivery of Shares. On the Closing Date,
Stockholders will deliver to GAR the certificates representing all of the
outstanding shares of WWC Holdings's common stock, duly endorsed (or with duly
executed stock powers) so as to make GAR the sole owner thereof free and clear
of all claims and encumbrances except as specifically assumed by GAR.
Simultaneously, on the Closing Date, GAR will deliver the certificates
representing the Shares to Trustees of the Stockholders. After delivery to GAR
of certificates representing all outstanding shares of WWCS Holding and delivery
of the Shares, the issued and outstanding shares of GAR's Common Stock will be
held of record by the persons and in the amounts described in Exhibit "A."
3. REPRESENTATIONS AND WARRANTIES OF WWC HOLDINGS AND STOCKHOLDERS3.
Representations and Warranties of WWC Holdings and Stockholders. Subject as set
out in Section 10, the Stockholders, jointly and severally, as a material
inducement to GAR to enter into this Agreement and consummate the transactions
contemplated hereby, make the following representations and warranties to GAR,
which representations and warranties are true and correct in all material
respects on the Closing Date:
3(a) Securities Holders3(a) Securities Holders. The Stockholders
------------------
are the only owner, of record, of all of the issued and outstanding shares of
WWC Holdings's common stock.
3(b) Financial Statements3(b) Financial Statements. Exhibit "B"
---------------------
is a copy of the balance sheets of WWC Holdings at September 30, 1998 (the
"Financial Statements").
The Financial Statements fairly present the consolidated financial
condition of WWC Holdings as of the date thereof and the results of operations
for the period covered. The Financial Statements have been prepared in
accordance with generally accepted accounting principles, consistently applied,
except as otherwise stated therein.
3(c) Undisclosed Liabilities3(c) Undisclosed Liabilities. Except
-----------------------
as set forth in Schedule 1, at the Closing Date, WWC Holdings: (i) will have no
liabilities or obligations of any nature, fixed or contingent, matured or
unmatured, which are not shown or otherwise provided for in the Financial
Statements except for liabilities and obligations specifically assumed by GAR or
arising in the ordinary course of business, none of which is materially adverse;
and (ii) all reserves established by WWC Holdings and set forth in the Financial
Statements will be adequate and there will be no material loss contingencies (as
such term is used in Statement of Financial Accounting Standard No. 5 of the
Financial Accounting Standards Board) which are not adequately provided for.
3(d) Absence of Changes3(d) Absence of Changes. Except as set
--------------------
forth in Schedule 2, since the date of the Financial Statements, WWC Holdings's
business has been operated in the ordinary course and there has not been:
(i) Any material adverse change in the condition (financial
or otherwise), assets, liabilities, earnings, net worth, business or prospects
of WWC Holdings for such period, in the aggregate, or at any time during such
period;
(ii) Any damage, destruction or loss (whether or not covered
by insurance) materially adversely affecting WWC Holdings, or its businesses;
(iii) Any declaration, setting aside, or payment of any
dividend or other distribution in respect of any shares of capital stock of WWC
Holdings, or any direct or indirect redemption, purchase or other acquisition of
any such stock;
(iv) Any issuance or sale by WWC Holdings or agreement to
sell any of its securities; or
(v) Any statute, rule, regulation or order adopted (including
orders of regulatory authorities with jurisdiction over WWC Holdings or its
business) which materially adversely affects WWC Holdings or its business.
3(e) Litigation, Etc3(e) Litigation, Etc.. Except as set forth
----------------
in Schedule 3, or in the Financial Statements; there are no actions, suits,
claims, investigations or legal or administrative or arbitration proceedings
current or so far as the stockholders are aware threatened against WWC Holdings,
its assets or business, whether at law or in equity, or before or by any
Federal, state, municipal, local, foreign or other governmental department,
commission, board, bureau, agency or instrumentality.
3(f) Compliance; Governmental Authorizations3(f) Compliance;
-----------------------------------------
Governmental Authorizations. Except as set forth in Schedule 4, WWC Holdings
has complied with all Federal, state, local or foreign laws, ordinances,
regulations and orders applicable to its business, including without limitation,
federal and state securities laws which, if not complied with, would materially
and adversely affect the business of WWC Holdings. WWC Holdings has all
Federal, state, local and foreign governmental licenses and permits necessary in
the conduct of its business, and such licenses and permits are in full force and
effect.
3(g) Due Organization, Etc3(g) Due Organization, Etc.. WWC
-----------------------
Holdings is a corporation duly organized, validly existing and in good standing
under the laws of England and Wales. WWC Holdings has the power to own its
properties and assets and to carry on its business as now presently conducted.
3(h) Tax Matters3(h) Tax Matters. WWC Holdings has filed all
------------
federal, state and local tax or related returns and reports due or required to
be filed, which reports accurately reflect in all material respects the amount
of taxes due. WWC Holdings has paid all amounts of taxes or assessments which
would be delinquent if not paid as of the date of this Agreement, other than
taxes or charges being contested in good faith or not yet finally determined.
3(i) Agreements, Etc3(i) Agreements, Etc.. Schedule 5 contains a
---------------
true and complete list and brief description of all written or oral contracts,
agreements, mortgages, obligations, understandings, arrangements, restrictions,
and other instruments to which WWC Holdings is a party or by which WWC Holdings
or its assets may be bound. True and correct copies of all written agreements
set forth on Schedule 5 are appended in Exhibit "H." No event has occurred
which (whether with or without notice, lapse of time or the happening or
occurrence of any other event) would constitute a default under any of the
agreements set forth in Schedule 5.
3(j) Title to Property and Related Matters3(j) Title to Property
--------------------------------------
and Related Matters. WWC Holdings has good and marketable title to all the
properties, interests in properties and assets, real and personal, reflected as
being owned by it on the Financial Statements or acquired by it after the date
of the Financial Statements, of any kind or character, free and clear of any
liens or encumbrances, except (i) those referred to in the notes to the
Financial Statements, (ii) those set forth in Schedule 6, and (iii) liens for
current taxes not yet delinquent. Schedule 6 contains a general description of
all real property of WWC Holdings. Except as set forth in said Schedule 6 and
except for matters which may arise in the ordinary course of business, WWC
Holdings's assets are in good operating condition and repair. To the best of
knowledge of Stockholders, there does not exist any condition which materially
interferes with the use thereof in the ordinary course of WWC Holdings's
business.
3(k) Corporate Records3(k) Corporate Records. The corporate
------------------
records, minute books, and other documents and records of WWC Holdings are
complete and correct. GAR shall have the right to review all corporate records
of WWC Holdings prior to the Closing Date.
3(l) Licenses; Trademarks; Trade Names; Etc. 3(l) Licenses;
------------------------------------------
Trademarks; Trade Names, Etc. Schedule 7 contains a true and complete list of
all licenses and all trademarks, trade names, service marks, copyrights,
know-how, patents and applications for any of the foregoing owned by or
registered in the name of WWC Holdings. There is no current or so far as the
stockholders threatened claim or litigation against WWC Holdings contesting the
right to use any of the trademarks, trade names and know-how or the validity of
any of the licenses, copyrights and patents listed on Schedule 7, or asserting
the misuse of any thereof, nor has there ever been any such claim or litigation.
3(m) Authorization by WWC Holdings3(m) Authorization by WWC
--------------------------------
Holdings. This Agreement constitutes a valid and binding agreement of
Stockholders, enforceable in accordance with its terms except as such
enforcement may be limited by applicable bankruptcy, insolvency, moratorium, and
other similar laws relating to, limiting or affecting the enforcement of
creditors rights generally; and neither the execution and delivery of this
Agreement nor the consummation by Stockholders of the transactions contemplated
hereby, nor compliance with any of the provisions hereof, will violate any
statute, law, rule or regulation or any order, writ, injunction or decree of any
court or governmental authority enforceable against Stockholders, or violate or
conflict with or constitute a default under (or give rise to any right of
termination, cancellation or acceleration under) the terms or conditions or
provisions of any note, bond, lease, mortgage, obligation, agreement,
understanding, arrangement or restriction of any kind to which WWC Holdings or
Stockholders is a party or by which WWC Holdings, Stockholders or their
respective properties may be bound. No consent or approval by any governmental
authority is required in connection with the consummation of the transactions
contemplated hereby.
3(n) Capitalization3(n) Capitalization. The authorized
--------------
capitalization of WWC Holdings is as set forth in Schedule 8. Except as set
forth in said Schedule 8, there are no outstanding or presently authorized
securities, warrants, preemptive rights, subscription rights, options or related
commitments of any nature to issue any of WWC Holdings's securities which are
not reflected in the Financial Statements or in Schedule 8.
3(o) Full Disclosure3(o) Full Disclosure. The Stockholders have,
---------------
and at the Closing Date will have, disclosed to GAR all events, conditions and
facts materially affecting the business and prospects of WWC Holdings; and that
Stockholders have not and will not have, at the Closing Date, withheld
disclosure of any events, conditions, and facts which it may have knowledge of,
or have reasonable grounds to know, may materially, adversely affect the
business and prospects of WWC Holdings.
3(p) Brokerage or Finder's Fees3(p) Brokerage or Finder's Fees.
----------------------------
WWC Holdings has not incurred, nor will it incur, any liability for brokerage or
finder's fees or similar charges in connection with this Agreement or any of the
transactions contemplated hereby.
3(q) Share Ownership3(q) Share Ownership. The shares of WWC
----------------
Holdings's common stock to be exchanged for the Shares in the Exchange are
owned, of record, by Stockholders, free and clear of all liens and encumbrances
of any kind and nature.
3(r) Approvals Required3(r) Approvals Required. No approval,
-------------------
authorization, consent, order or other action of, or filing with, any person,
firm or corporation or any court, administrative agency or other governmental
authority is required in connection with the execution and delivery by
Stockholders of this Agreement or the consummation of the transactions described
herein, except as disclosed herein and, except to the extent that the parties
are required to file reports in accordance with relevant regulations under
Federal and state securities laws.
4. REPRESENTATIONS AND WARRANTIES OF GAR AND SMITH4. Representations
and Warranties of GAR and Smith. Subject as set out in Section 10(b)(ix) GAR
and Smith, jointly and severally, but so that Smith shall have no right of
contribution against or from GAR in the event of any claim made against Smith
for breach of any of the warranties or representations in this Agreement, as a
material inducement to Stockholders to enter into this Agreement and consummate
the transactions contemplated hereby, make the following representations and
warranties to Stockholders, which representations are true and correct at this
date, and will be true and correct on the Closing Date as though made on and as
of such date:
4(a) Shares of Common Stock4(a) Shares of Common Stock. The
-------------------------
Shares to be delivered to Stockholders at Closing will be valid and legally
issued shares of Common Stock, free and clear of all liens, encumbrances, and
preemptive rights, and will be fully-paid and non-assessable shares.
4(b) Due Authorization, Etc4(b) Due Authorization, Etc.. This
------------------------
Agreement has been duly authorized, executed, and delivered by GAR, and
constitutes a legal, valid, and binding obligation of GAR, enforceable in
accordance with its terms; no consent of any federal, state, municipal or other
governmental authority is required by GAR for the execution, delivery or
performance of this Agreement by GAR; no consent of any party to any contract or
agreement to which GAR is a party or by which any of its property or assets are
subject is required for the execution, delivery or performance of this Agreement
by GAR.
4(c) Financial Statements4(c) Financial Statements. Exhibit "E"
---------------------
is a copy of GAR's audited financial statements at November 20, 1997, including
balance sheets, income statements and changes in financial position and its
audited financial statements at September 30, 1998 (collectively the
"Statements"). The Statements fairly and accurately reflect the financial
condition of GAR as of the dates thereof and the results of operations for the
periods reflected therein. The Statements have been prepared in accordance with
generally accepted accounting principles, consistently applied, except as
otherwise stated therein; and the books and records, financial and others, of
GAR are in all material respects complete and correct and have been maintained
in accordance with good business and accounting practices.
4(d) Undisclosed Liabilities4(d) Undisclosed Liabilities. Except
-----------------------
as set forth in Schedule 9, GAR: (i) has no material liabilities or obligations
of any nature, fixed or contingent, matured or unmatured, which are not shown or
otherwise provided for in the Statements; and (ii) all reserves established by
GAR and set forth in the Statements are adequate and there are no material loss
contingencies (as such term is used in Statement of Financial Accounting
Standard No. 5 of the Financial Accounting Standards Board) which are not
adequately provided for.
4(e) Material Adverse Change4(e) Material Adverse Change. Except
-----------------------
as set forth in Schedule 10, since the date of the Statements, there has not
been, and as of the Closing Date there shall not have been, any material changes
in GAR's condition (financial or otherwise), or liabilities (absolute,
contingent or otherwise), whether or not arising from transactions in the
ordinary course of business; provided, however, that the parties have agreed
that the financial position of GAR will change to the extent that GAR incurs
costs in connection with the transactions contemplated by this Agreement not
exceeding cash at GAR's bank as at the date of this Agreement.
4(f) Litigation, Etc4(f) Litigation, Etc.. Except as set forth
----------------
in Schedule 11, or in the Statements; there are no actions, suits, claims,
investigations or legal or administrative or arbitration proceedings pending or
threatened against GAR, its assets or business, whether at law or in equity, or
before or by any Federal, state, municipal, local, foreign or other governmental
department, commission, board, bureau, agency or instrumentality; nor does GAR
know or have any reason to know of a threat of such litigation or any basis for
any such action, suit, claim, investigation or proceeding.
4(g) Due Organization, Etc4(g) Due Organization, Etc.. GAR is a
----------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, is qualified to business and in good standing in each
state where it is required to be qualified and such qualification is material
and has the corporate power to own its property and to carry on its business as
now being conducted. The Certificate of Incorporation and By-Laws of GAR, as
will be in effect on the Closing Date, are attached hereto as Exhibit "C" and
are made a part hereof.
4(h) Tax Matters4(h) Tax Matters. By closing, GAR will have
------------
filed all Federal, state and local, tax or related returns and reports due or
required to be filed, which reports accurately reflect in all material respects
the amount of taxes due. By closing, GAR will have paid all taxes or
assessments which have become due, other than taxes or charges being contested
in good faith or not finally determined.
4(i) Agreements, Etc4(i) Agreements, Etc.. GAR has not breached,
---------------
nor is there any pending or threatened claims or any legal basis for a claim
that GAR has breached, nor has an event occurred which with the passing of time
would constitute a breach of any of the terms or conditions of any agreements,
contracts or commitments to which GAR is a party or by which GAR or its assets
are bound. A list of all of GAR's material contracts, agreements or commitments
(whether oral or written) is set forth on Schedule 12 and true and correct
copies of all such contracts and agreements are appended as Exhibit "I." The
execution, delivery and performance of this Agreement by GAR will not be in
conflict with or constitute a default under any provisions of applicable law,
GAR's Certificate of Incorporation or By-Laws, or any agreement or instrument to
which GAR is a party or by which it or its assets are bound.
4(j) Capitalization4(j) Capitalization. The capitalization of
--------------
GAR consists of authorized common stock of 20,000,000 shares, $.01 par value per
share, of which 1,850,000 will be outstanding on the Closing Date. All
outstanding shares of the Common Stock have been duly authorized, validly
issued, and are fully-paid and non-assessable, and all such shares were issued
in compliance with all applicable federal and state securities laws. Except for
the issuances of securities referred to in this Agreement, there are no
outstanding or presently authorized securities, warrants, preemptive rights,
subscription rights, options or related commitments of any nature to issue any
of GAR's securities.
4(k) Disclosure of Material Facts4(k) Disclosure of Material
-------------------------------
Facts. GAR has, and at the Closing Date will have, disclosed to WWC Holdings
all events, conditions and facts materially affecting the business and prospects
of GAR; and GAR has not and will not have, at the Closing Date, withheld
disclosure of any events, conditions, and facts which it may have knowledge of,
or have reasonable grounds to know may materially, adversely affect the business
and prospects of GAR.
4(l) Corporate Records4(l) Corporate Records. The corporate
------------------
financial records, minute books, and other documents and records of GAR are to
be available to WWC Holdings at the time of the Closing Date and turned over to
new management in their entirety at Closing. Such records are complete and
correct and have been maintained in accordance with good business and accounting
practices.
4(m) Stockholders List4(m) Stockholders List. Exhibit "D" is a
------------------
true, correct and complete statement, dated not more than 10 days prior to the
Closing Date, setting forth the names and addresses of GAR's stockholders and
their respective shareholdings.
4(n) Title to Assets4(n) Title to Assets. Except as set forth in
---------------
Schedule 13, GAR has good and marketable title to all of its assets, free of any
liens and encumbrances.
4(o) Compliance; Governmental Authorizations4(o) Compliance;
-----------------------------------------
Governmental Authorizations. Except as set forth in Schedule 14, GAR has
complied in all respects with all Federal, state, local, or foreign laws,
ordinances, regulations, and orders applicable to its business, including
without limitation federal and state securities laws applicable to all offerings
prior to the Closing Date. GAR has all Federal, state, local and foreign
governmental licenses and permits material to and necessary in the conduct of
its business, and such licenses and permits are in full force and effect, and no
violations are or have been recorded in respect of any such licenses of permits,
and no proceedings are pending or threatened to revoke or limit the use of such
permits.
4(p) Brokerage Fees4(p) Brokerage Fees. GAR has not incurred,
---------------
nor will it incur, any liability for brokerage or finder's fees or similar
charges in connection with this Agreement or any of the transactions
contemplated hereby except the previous issue of 28,500 shares of GAR Common
Stock to Forte Communications, Inc.
4(q) SEC Filings4(q) SEC Filings. Exhibit "F" contains true,
------------
correct and complete copies of Form 10-K and Form 10-Q filed by GAR in respect
of the fiscal years ended October 31, 1997 and all subsequent periods, such
forms were true and accurate when filed and remain true and accurate except as
set out in later filings and Schedule 10 contains a brief summary of all
material changes in GAR's financial position and prospectus since the date of
the last filing of Form 10-Q.
5. AFFIRMATIVE COVENANTS OF GAR, WWC HOLDINGS AND STOCKHOLDERS5.
Affirmative Covenants of GAR, WWC Holdings and Stockholders. GAR covenants
Stockholders and Stockholders, jointly and severally, covenant to GAR that:
5(a) Filing of Form 8-K. 5(a) Filing of Form 8-K Immediately
---------------------
after the Closing Date, Stockholders will procure the prompt preparation and
file with the Securities and Exchange Commission appropriate notice describing
this transaction on Form 8-K or other applicable form, and otherwise comply with
the provisions of the Securities Exchange Act of 1934.
5(b) Preparation of Disclosure Statement. 5(b) Preparation of
--------------------------------------
Disclosure Statement Immediately after the Closing Date, the Stockholders will
procure the preparation of a disclosure statement containing the necessary
information to comply with Rule 15(c)2(11) promulgated by the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934 and file
such forms with one or more firms who are members of the National Association of
Securities Dealers, Inc. ("NASD") and with NASD as are necessary to effect the
quotation of GAR's securities in the NASD Electronic Bulletin Board System.
5(c) Application to NASDAQ. 5(c) Application to NASDAQ After GAR
----------------------
meets the requirements for initial inclusion, Stockholders will procure the
prompt preparation and filing of an application with NASD to qualify the common
stock of GAR for inclusion in the Regular NASDAQ system and quotation by the
NASDAQ Stock Market.
5(d) Delivery of Disclosure Statement. 5(d) Delivery of
-----------------------------------
Disclosure Statement The Stockholders will procure the delivery to GAR's former
management of the disclosure statement which includes a description of this
transaction so that GAR's former management can review the descriptions
contained therein of GAR and the terms of the transactions contemplated by this
Agreement.
5(e) Delivery of Documents. 5(e) Delivery of Documents The
-----------------------
Stockholders will procure the delivery to GAR's former management, with a copy
to its counsel (at the addresses set forth herein), all reports, registration
statements and other documents, other than exhibits, as filed with the SEC and
the NASD during the one year period commencing on the Closing Date.
5(f) Future Stock Distributions. 5(f) Future Stock Distributions
---------------------------
After the Closing Date, Stockholders will procure the that any further
distribution of GAR's stock to WWC Holdings's shareholders or otherwise will be
completed in conformity with federal and state securities laws and regulations
pertaining to registration; or, pursuant to an exemption from such registration
requirements.
5(g) Change of Corporate Name. 5(g) Change of Corporation Name
---------------------------
Management of WWC Holdings will promptly take the appropriate corporate action
to change the name of General American Royalty, Inc. to World Wide
Communications (Holdings), Ltd. or another appropriate name selected by
management of WWC Holdings.
5(h) Acquisition of Interest in CallNet PLC. 5(h) Acquisition of
----------------------------------------
Interest in CallNet PLC Within thirty (30) days of the Closing Date,
Stockholders shall cause CallNet PLC to issue to GAR twenty percent (20%) of the
outstanding capital shares of CallNet PLC in exchange for 500,000 shares of
common stock, $.001 par value, of GAR, as more particularly described in
Schedule 15.
5(i) Anti-Dilution. 5(i) Anti-Dilution They will comply with the
-------------
provisions of Schedule 16.
5(j) Waiver of Preemptive Rights. 5(j) Waiver of Preemptive
------------------------------
Rights The Stockholders waive any rights of preemption they may have in respect
of the transfer of the ordinary shares of WWC Holdings whether arising under the
articles of association of WWC Holdings or otherwise.
6. CLOSING 6. Closing. The Closing (the "Closing") shall take
place upon such date (the "Closing Date") as the parties hereto may mutually
agree upon, but shall be no later than October 31, 1998. The Closing shall take
place at such place as may be mutually agreed upon by the parties.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF WWC HOLDINGS AND
STOCKHOLDERS7. Conditions Precedent to Obligations of WWC Holdings and
Stockholders. All obligations of Stockholders under this Agreement are subject
to the fulfillment, prior to or on the Closing Date, of each of the following
conditions:
7(a) Truth of Representations and Warranties. 7(a) Truth of
--------- --------------------------------
Representations and Warranties The representations and warranties by or on
behalf of GAR contained in this Agreement or in any certificate or document
delivered to Stockholders pursuant to the provisions hereof shall be true in all
material respects at and as of the time of Closing as though such
representations and warranties were made at and as of such time.
7(b) Compliance with Covenants. 7(b) Compliance with
---------------------------
CovenantsGAR shall have performed and complied with all covenants, agreements,
and conditions required by this Agreement to be performed or complied with by it
prior to or at the Closing.
7(c) Election of New Directors. The present Directors of GAR
----------------------------
shall have caused the appointment of Paul Goodman-Simpson, Aaron Goodman-Simpson
and Keith Goodyer to the Board of Directors of GAR as directed by WWC Holdings
and will have arranged for the resignation of Sam E. Nicholson.
7(d) Approval by Legal Counsel. 7(d) Approval by Legal Counsel
----------------------------
All instruments and documents delivered to WWC Holdings and Stockholders
pursuant to the provisions hereof shall be reasonably satisfactory to legal
counsel for WWC Holdings and Stockholders.
7(e) Opinion of Counsel. 7(e) Opinion of Counsel GAR shall have
--------------------
delivered to Stockholders an opinion of GAR's counsel, dated the Closing Date,
to the effect that:
(i) GAR is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware;
(ii) GAR has the corporate power to carry on its business as
now being conducted;
(iii) This Agreement has been duly authorized, executed and
delivered by GAR and is a valid and binding obligation of GAR, enforceable in
accordance with its terms, except to the extent that enforcement is limited by
applicable bankruptcy, reorganization, insolvency, moratorium, or similar laws
affecting creditors' rights and remedies generally or by general equity
principles (and excepting specific performance as a remedy);
(iv) GAR has taken all corporate action necessary for its due
performance under this Agreement;
(v) The execution and delivery by GAR of this Agreement and
the consummation of the transactions contemplated hereby will not conflict with
or result in a breach of any provisions of, GAR's Certificate of Incorporation
or By-Laws or, to the best of such counsel's knowledge after inquiry and based
upon information provided by GAR, constitute a default under or give rise to a
right of termination, acceleration, or cancellation under any agreement under
which GAR or any of its properties are bound or violate any court order, writ or
decree of injunction applicable to GAR;
(vi) Such counsel does not know, after inquiry, of (a) any
actions, suits or other legal proceedings or investigations pending or
threatened against or relating to or materially adversely affecting GAR; and (b)
any unsatisfied judgments against GAR.
(vii) The authorized and, to such counsel's best knowledge
after inquiry, outstanding capitalization of GAR is as set forth in Section
4(j), all of the outstanding shares of GAR's common stock are validly issued,
fully-paid and non-assessable, without preemptive rights, and to the best of
counsel's knowledge after inquiry, there are no outstanding subscriptions,
options, rights, warrants or other transfer agreements (whether oral or
written), other than as set forth in Section 4(j) of this Agreement.
7(f) Officers' Certificate7(f) Officers' Certificate. There
----------------------
shall be delivered to Stockholders an officers' certificate, signed by James F.
Smith, President to the effect that all of the representations and warranties of
GAR set forth herein are true and complete in all material respects as of the
Closing Date, and that GAR has complied in all material respects with its
covenants and agreements set forth herein required to be complied with by the
closing.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF GAR8. Conditions Precedent
to Obligations of GAR. All obligations of GAR under this Agreement are subject
to the fulfillment, prior to or on the Closing Date, of each of the following
conditions:
8(a) Truth of Representations and Warranties. 8(a) Truth of
--------- --------------------------------
Representations and WarrantiesThe representations and warranties by Stockholders
contained in Section 3 this Agreement or in any certificate or document
delivered to GAR pursuant to the provisions hereof shall be true in all material
respects at and as of the time of Closing as though such representations and
warranties were made at and as of such time.
8(b) Compliance with Covenants. 8(b) Compliance with
---------------------------
CovenantsThe Stockholders shall have performed and complied with all Covenants,
agreements, and conditions required by this Agreement to be performed or
complied with by it prior to or at the Closing.
8(c) Delivery of Investment Letter.8(c) Delivery of Investment
--------------------------------
Letter Each of Stockholders shall have delivered to GAR an "investment letter"
in the form attached as Exhibit "G," setting out that the shares being acquired
are restricted shares and are being acquired for investment purposes only, and
not with a view to public resale or distribution.
8(d) Delivery of Exhibits and Schedules. 8(d) Delivery of
--------------------------------------
Exhibits and SchedulesThe Stockholders shall have delivered all of the exhibits
and schedules required herein to GAR and such exhibits, schedules and Financial
Statements shall have been acceptable to GAR, in its sole and absolute
discretion.
8(e) Opinion of Counsel. 8(e) Opinion of CounselWWC Holdings
--------------------
shall have delivered to GAR an opinion of counsel, dated the Closing Date, to
the effect that:
(i) WWC Holdings is a corporation duly organized, validly
existing and in good standing under the laws of England and Wales;
(ii) WWC Holdings has the corporate power to carry on its
business as now being conducted;
(iii) Except as referred to herein, such counsel knows, after
inquiry, of (a) no actions, suit or other legal proceedings or investigations
pending or threatened against or relating to or materially adversely affecting
WWC Holdings; and (b) no unsatisfied judgments against WWC Holdings;
(iv) The authorized capitalization of WWC Holdings is as set
forth in Section 3(o), all of the outstanding shares of common stock of WWC
Holdings are validly issued, fully-paid and non-assessable, without preemptive
rights, and to the best of counsel's knowledge, after inquiry, there are no
outstanding subscriptions, options, rights, warrants or other transfer
agreements (whether oral or written) obligating WWC Holdings to issue or
transfer from treasury any of its securities except as set forth in Section 3(o)
of this Agreement. When duly transferred to GAR as provided herein, to the best
of such counsel's knowledge after inquiry, GAR will own all of the issued and
outstanding common stock of WWC Holdings subject to registration of the transfer
of such shares by the directors of WWC Holdings and due stamping of the share
transfer.
9. INDEMNIFICATION9. Indemnification. Subject as set out in Section
10, each party to this Agreement shall indemnify and hold harmless each other
party to this Agreement at all times after the date of this Agreement against
and in respect of any liability, damage or deficiency, all actions, suits,
proceedings, demands, assessments, judgments, costs and expenses including
attorney's fees (through all appeals) incident to any of the foregoing,
resulting from any misrepresentation or breach of warranty contained in Section
3 or 4 as appropriate on the part of such party under this Agreement. Subject
to the terms of this Agreement, the defaulting party shall reimburse the other
party or parties, on demand, for any reasonable payment made by said parties at
any time after Closing, in respect of any liability or claim to which the
foregoing indemnity relates, if such payment is made after reasonable notice to
the other party to defend or satisfy the same and such party failed to defend or
satisfy same.
10. REPRESENTATIONS, WARRANTIES AND LIMITATIONS ON LIABILITY10.
Representations, Warranties and Limitations on Liability. All of the parties
hereto are executing and carrying out the provisions of this Agreement in
reliance on the representations and warranties in Section 3 and 4 and the
covenants and agreements contained in this Agreement or at the Closing of the
transactions herein provided.
10(a) Nature of Representations and Warranties. 10(a) Nature of
--------------------------------------------
Representations and Warranties Any investigation which the parties might have
made or any other representations, warranties, agreements promises or
information, written or oral, made by the other party other than as set out in
this Agreement or any other person shall not be deemed a waiver of any breach of
any such representation, warranty, covenant or agreement in this Agreement. GAR
represents and agrees that its chief executive officer is a sophisticated
investor and that the business in which WWC Holdings is engaged is subject to a
high degree of competition from other companies, many of which have greater
financial and other resources than WWC Holdings. For these and other reasons an
investment in WWC Holdings's capital stock is subject to substantial risks and
speculative.
10(b) Limitations on Liability. 10(b) Limitations on Liability The
--------------------------
liability of the Stockholders is subject to the following limitations:
(i) The Stockholders will not be liable in respect of any
claim for breach of the representations and warranties in this agreement
("Warranties") unless the aggregate amount of all such claims exceeds US$2,500
in which case they will be liable for the whole of the aggregate amount and not
just the excess.
(ii) The total aggregate amount of the liability of all Stockholders in
respect of claims for breach of the Warranties will be limited to US$500,000.
(iii) Except in the case of fraud or wilful non-disclosure on
Stockholders' part, Stockholders will be under no liability in respect of any
claim for breach of the Warranties unless:
(a) Smith has given to Stockholders written particulars
of the breach on or before one year after the date of Closing setting out in
detail the amount claimed and the reasons for the claim; and
(b) the claim has been settled or proceedings have been issued and
served within six months of Stockholders receiving the written particulars
referred to in 10(b)(iii)(a).
(iv) The Stockholders will have no liability in respect of any claim
for breach of the Warranties to the extent that:
(a) the liability arises or is increased as a result of the passing of
any legislation or the making of any subordinate legislation, with retrospective
effect; or
(b) the liability is attributable to any negligent act or omission by
Smith after the date of Closing.
(v) Where any of Stockholders is a trustee and is selling his shares in
WWC Holdings in that capacity the liability of that Stockholder in respect of
claims for breach of the Warranties is further limited to the net value for the
time being of the capital of the trust after deductions of all money due to the
Inland Revenue or other relevant taxation authority on account of any taxation
arising in connection with the transactions contemplated by this agreement and
costs and fees properly chargeable against the capital of the trust in
connection with such transactions.
(vi) The Warranties are given subject to and are qualified by:
(a) the contents of this agreement and in particular Schedules 1 though
8 inclusive and all transactions referred to in this agreement;
(b) any matters which would be disclosed as a result of a search,
whether or not made, of the microfiche file at the Companies Registry in respect
of WWC Holdings;
(c) the memorandum and articles of association of WWC Holdings on the
working day before Closing;
(d) the contents of the minute books and other statutory books of WWC
Holdings;
(e) any matter which would be disclosed as a result of an inspection or
search, whether or not made, of any document, register or record which may be
inspected by the public and maintained by, or information which is available on
enquiry, whether or not made, of or from the Office of Fair Trading, the
Trademarks Registry, the Patent Office or the European Patents Office or any
other appropriate registers or offices in any overseas territory;
(f) the contents of and matters referred to in the documents in
Exhibits "B" and "F" to this letter, copies of which have been initialled on
behalf of Smith and Stockholders for the purposes of identification.
(vii) Nothing in this agreement will derogate from Smith's common law
obligation to mitigate any loss which he suffers in consequence of a breach of
the Warranties.
(viii) Nothing in this agreement prohibits Stockholders from disposing
of any Shares to the extent that the proceeds of disposal, less the incidental
costs of it, are required to settle either wholly or partly:
(a) any amount of damages or any claim for indemnity for which any of
Stockholders are liable under this agreement; or
(b) any amount of taxation arising in connection with the disposal of
the Shares.
(ix) The provisions of 10(b)(i)-10(b)(viii) inclusive will apply to
limit the liability of Smith as if all references to Stockholders were to Smith
and all references to Smith were to Stockholders.
11. DOCUMENTS AT CLOSING11. Documents at Closing. At the Closing, the
following transactions shall occur, all of such transactions being deemed to
occur simultaneously:
11(a) Documents Delivered by the Stockholders. 11(a) Documents
-----------------------------------------
Delivered by the StockholdersStockholders will deliver, or cause to be
delivered, to GAR the following:
(i) stock certificates for the shares of common stock of WWC
Holdings being exchanged hereunder, duly endorsed or with stock powers attached
in blank but subject to a customary restrictive stock legend.
(ii) the opinion of counsel for WWC Holdings as set forth
herein;
(iii) a certificate from the registrar of companies dated
October 5, 1998 to the effect that WWC Holdings is in good standing under the
laws of the said state; and
(iv) such other instruments, documents and certificates, if
any, as are required to be delivered pursuant to the provisions of this
Agreement or which may be reasonably requested in furtherance of the provisions
of this Agreement;
11(b) Documents Delivered by GAR. 11(b) Documents Delivered by
----------------------------
GARGAR will deliver or cause to be delivered to Stockholders and WWC Holdings:
(i) stock certificates for the Shares subject to a customary
restrictive stock legend;
(ii) all corporate records of GAR, including without
limitation corporate minute books (which shall contain copies of the Certificate
of Incorporation and By-Laws, as amended to the Closing), stock books, stock
transfer books, corporate seals, and such other corporate books and records as
may reasonably requested by the Stockholders and their counsel;
(iii) a certificate of GAR's officers to the effect that all
representations and warranties of GAR made under this Agreement are reaffirmed
on the Closing Date, as though originally given to Stockholders and WWC Holdings
on said date;
(iv) the opinions of GAR's counsel set forth herein;
(v) a Certificate from the Secretary of State of Delaware
dated at or about the date of Closing that GAR is in good standing under the
laws of said state; and
(vi) such other instruments and documents, if any, as are
required to be delivered pursuant to the provisions of this Agreement, or which
may be reasonably requested in furtherance of the provisions of this Agreement.
12. MISCELLANEOUS12. Miscellaneous.
12(a) Further Assurances12(a) Further Assurances. At any time,
-------------------
and from time to time, after the Closing, each party will execute such
additional instruments and take such action as may be reasonably requested by
the other party to confirm or perfect title to any property transferred
hereunder or otherwise to carry out the intent and purposes of this Agreement;
12(b) Waivers12(b) Waivers. Any failure on the part of any party
-------
hereto to comply with any of its obligations, agreements or conditions hereunder
may be waived in writing by the party to whom such compliance is owed.
12(c) Notices12(c) Notices. All notices and other communications
-------
hereunder shall be in writing and shall be deemed to have been given if
delivered in person or sent by prepaid first class registered or certified mail,
return receipt requested to the following addresses, or such other addresses as
are given to other parties in the manner set forth herein.
GAR: General American Royalty, Inc.
One Energy Square, Suite 1005
4925 Greenville AvenueDallas, Texas75206Attn: James F. Smith, President
Tel: (214) 361-8535
With a copy to: Robert L. Sonfield, Jr., Esq.
Sonfield & Sonfield
770 South Post Oak Lane, Suite 435
Houston, Texas 77056-1913
Tel: (713) 877-83333
WWC Holdings World Wide Communications (Holdings), Ltd.
Stockholders: Brecon House, Meridian Gate
207 Marsh Wall
London E14 9YT
Attn: Paul Goodman-Simpson
With a copy to: Fladgate Fielder
Heron Place, 3 George Street
London, W1H 6AD
DX West End 9057
Attn: David Robinson, Esq.
12(d) Headings12(d) Headings. The section and subsection headings in
--------
this Agreement are inserted for convenience and shall not affect in any way the
meaning or interpretation of this Agreement.
12(e) Counterparts. (e) Counterparts This Agreement may be
executed simultaneously in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. A facsimile signature by any party on a counterpart of this
Agreement shall be binding and effective for all purposes. Such party shall,
however, subsequently deliver to the other party an original executed copy of
this Agreement.
12(f) Governing Law. 12(f) Governing Law This Agreement shall be
-------------
governed by the laws of Delaware.
12(g) Binding Effect. 12(g) Binding Effect This Agreement shall
---------------
be binding upon the parties hereto and inure to the benefit of the parties,
their respective heirs, administrators, executors, successors and assigns.
12(h) Entire Agreement. 12(h) Entire Agreement This Agreement is
----------------
the entire agreement of the parties covering everything agreed upon or
understood in the transaction. There are no oral promises, conditions,
representations, understandings, interpretations or terms of any kind as
conditions or inducements to the execution hereof.
12(i) Time12(i) Time. Time is of the essence.
----
12(j) Severability12(j) Severability. If any part of this
------------
Agreement is determined by a court of competent jurisdiction to be
unenforceable, the balance of the Agreement shall remain in full force and
effect.
12(k) Default Costs12(k) Default Costs. In the event any party
--------------
hereto has to resort to legal action to enforce any of the terms hereof, such
party shall be entitled to collect attorneys' fees and other costs from the
party in default.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
ATTEST: GENERAL AMERICAN ROYALTY, INC.
By: By:
Sam E. Nicholson, Secretary James F. Smith, President
ATTEST: WORLD WIDE COMMUNICATIONS
(HOLDINGS), LTD.
By: By:
__________________, Secretary ___________________, President
STOCKHOLDERS OF WORLD WIDE COMMUNICATIONS (HOLDINGS), LTD.
Wayne A Maw Ieuan James Mackereth Marshall
Keith C Hall W Stephen Logue
CRAYFORD ASSOCIATES LTD
By:
Name: David Peters
Title:
TOWN INVEST S.A. BATAURUS B.V. (LTD)
By: By:
Name: Name:
Title: Title:
VASAPARKEN AB MIRROR INVESTMENTS
By: By:
Name: Name:
Title: Title:
DANCASTLE HOLDINGS MOAT FINANCIAL SERVICES
By: By:
Name: Name:
Title: Title:
KAZAN CORPORATION REGENT ADMINISTRATION LTD
By: By:
Name: Name:
Title: Title:
Keith Goodyer Jean Taylor
Graham Mark Butt Pamela Brehaut
Gill Ann Gallienne Herbert Konrad Mosser
CASTLE PROPERTY AGENTS LTD BEAUVAIS TRUST COMPANY LTD
By: By:
Name: Name:
Title: Title:
ZALON PROPERTIES LTD AFFARSINVEST AB
By: By:
Name: Name:
Title: Title:
RIKTMARKET AB GRAMOS INVESTMENT HOLDINGS
By: By:
Name: Name:
Title: Title:
Matts Goransson Paul Goodman-Simpson
Bernardina Financial Inc
By:
Aaron Goodman-Simpson Name:
Title:
<PAGE>
EXHIBIT A
HOLDERS OF GAR COMMON STOCK AFTER CLOSING
NUMBER OF SHARES PERCENT
------------------ -------
Entitlement of the Stockholders
to the shares pursuant to the Exchange
(CallNet Plc stockholders shown with " * ")
STOCKHOLDER AND ADDRESS SHARES
Wayne A Maw * 55,000
69 Tunbridge Grove
Kents Hill
Milton Keynes MK7 6JD
Ieuan James Mackereth Marshall * 137,500
16 Gisborne Road
Cambridge CB1 3RZ
Keith C Hall * 165,000
Chateau Perigord
Appt 215, 6 Lacets
St Leon MC98000
Monaco
Crayford Associates Ltd * 247,500
Falcon House
23-25 Bucks Road
Douglas Isle of Man IM1 3DA
David Peters 27,500
34 St Vincent Road
Westciffe
Essex FF0 7PR
Town Invest S.A. 247,500
Bataurus B.V. (Ltd) 247,500
Vasaparken AB 55,000
Mirror Investments 247,500
PO Box 556
Main Street
Charlestown
Nevis
West Indies
Dancastle Holdings 247,500
Palm Chambers
PO Box 3152
Roadtown
Tortola BVI
Moat Financial Services * 220,000
Brittanic House
Providencials
Turks & Caicos Islands BVI
Kazan Corporation * 192,500
Edificio Vallarino
Calle
52Y Elvira Mendez
Appartado Postal 1450
Jean Taylor 192,500
27 Greendale Drive
Middlewich
Cheshire CW10 0PH
Graham Mark Butt * 269,500
Beaumont Cottage
Rue de Tertre
St Andrews
Guernsey C.I.
Pamela Brehaut * 269,500
Evening Shade
Woodlands Park
St Saviours
Guernsey C.I.
Gill Ann Gallienne * 269,500
Homelea
Amherst
St Peter Port
Guernsey C.I.
Herbert Konrad Mosser * 269,500
Mosslyn Le Bourg
Forest
Guernsey C.I.
Regent Administration Ltd 165,000
PO Box 199
Victory House
Le Truchot
St Peter Port
Guernsey GY1 4HX
Castle Property Agents Ltd 220,000
PO Box 226
Victory House
Le Truchot
St Peter Port
Guernsey GY1 4JQ
Beauvais Trust Company Ltd 242,000
PO Box 199
Victory House
Le Truchot
St Peter Port
Guernsey GY1 4HX
Zalon Properties Ltd 192,500
PO Box 226
Victory House
Le Truchot
St Peter Port
Guernsey GY1 4JQ
Affarsinvest AB * 269,500
Box 142
S-691 23 Karlskoga
Riktmarket AB * 269,500
Centralparken 4
S-691 42 Karlskoga
Matts Goransson * 11,000
Gronfeldtsgatan 22
S-691 41 Karlskoga
Mr Paul Goodman-Simpson * 143,000
70D Shooters Hill Road
London SE3 7BG
Mr Aaron Goodman-Simpson * 82,500
84 Tarnwood Park
Nottingham
London SE9 5PD
Gramos Investment Holdings 269,500
PO Box 226
Victory House
Le Truchot
St Peter Port
Guernsey GY1 4JQ
Bernardina Financial Inc 82,500
PO Box 226
Victory House
Le Truchot
St Peter Port C.I.
Keith Goodyer * 137,500
69 Tunbridge Grove
Kents Hill
Milton Keynes
MK7 6JD
W Stephen Logue * 55,000
27 Birchover Road
Walsall
WS2 8TU
Total Stockholders of WWCS Holdings 5,500,000 75%
Forte Communications, Inc. 183,333 2.5%
John J. Garrett, Trustee 50,000 0.7%
Shareholders of GAR Prior to Closing 1,600,000 21.8%
--------- -----
TOTAL 7,333,333 100%
========= ====
