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
August 24, 1996
Date of Report
(Date of Earliest Event Reported)
NET TELECOMMUNICATIONS, INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
Nevada 33-2279-D 87-0297202
(State or other (Commission File No.) (IRS Employer I.D. No.)
Jurisdiction)
101 Convention Center Drive, #P125
Las Vegas, Nevada 89129
(Principal Executive Office Address)
Registrant's Telephone Number,
Including Area Code: (702) 256-9956
Registrant's Facsimile Number,
Including Area Code: (702) 256-9233
8170 West Sahara Avenue, Suite 203
Las Vegas, Nevada 89117
(Former Name or Former Address if Changed Since Last Report)
<PAGE>
Item 1. Changes in Control of Registrant.
None; not applicable.
Item 2. Acquisition or Disposition of Assets.
(a)(i) Sierra Internet, Inc. dba Tahoe On-Line
Pursuant to an Agreement and Plan of Merger (the "Tahoe
On-Line Plan") dated August 24, 1996, between Net
Telecommunications, Incorporated, a Nevada corporation (the
"Company"); Sierra Net, Inc., a Nevada corporation (the Net Tel
Subsidiary ); Sierra Internet, Inc., a Nevada corporation dba
"Tahoe On-Line ( Tahoe On-Line ); and all of the stockholders of
Tahoe On-Line (the Tahoe On-Line Stockholders ), Tahoe On-Line
merged with and into the Net Tel Subsidiary, with the Net Tel
Subsidiary being the surviving corporation, and each issued,
outstanding or subscribed share of common stock of Tahoe On-Line
was exchanged for 118.181818 shares of common stock of the
Company, amounting to an aggregate total of 130,000 shares of the
Company's "unregistered" and "restricted" common stock. The
Tahoe On-Line Plan was treated as a "purchase" for accounting
purposes.
Following the completion of the Tahoe On-Line Plan,
Tahoe On-Line became a wholly-owned subsidiary of the Company by
virtue of its merger into the Net Tel Subsidiary.
Immediately prior to the completion of the Tahoe On-
Line Plan, there were approximately 8,600,000 outstanding shares
of common stock of the Company, and with its completion, there
were approximately 8,730,000 outstanding shares.
The source of the consideration used by the Tahoe On-
Line Stockholders to acquire the respective interests in the
Company was the exchange of shares of common voting stock of
Tahoe On-Line, and the number of shares received by the Tahoe On-
Line Stockholders in the merger was the result of "arms length"
negotiations, as there were no prior material relationships
between any of the Tahoe On-Line Stockholders and the Company or
any of the Company's directors, executive officers or
"affiliates."
Copies of the Tahoe On-Line Plan and related exhibits,
the News Release issued by the Company and the Articles of Merger
accompany this Report and are incorporated herein by reference.
See Item 7 of this Report.
(a)(ii) Global Tours, Inc.
Pursuant to an Agreement and Plan of Merger (the
"Global Plan") dated August 26, 1996, between Net
Telecommunications, Incorporated, a Nevada corporation (the
"Company"); Second Net Telecommunications Subsidiary,
Incorporated, a Nevada corporation and recently formed wholly-
owned subsidiary of the Company (the Net Tel Subsidiary );
Global Tours, Inc., a Nevada corporation ( Global ); and all of
the stockholders of Global (the Global Stockholders ), Global
merged with and into the Net Tel Subsidiary, with the Net Tel
Subsidiary being the surviving corporation, and each issued,
outstanding or subscribed share of common stock of Global was
exchanged for 322.580645 shares of common stock of the Company,
amounting to an aggregate total of 500,000 shares of the
Company's "unregistered" and "restricted" common stock. The
Global Plan was treated as a "purchase" for accounting purposes.
Following the completion of the Global Plan, Global
became a wholly-owned subsidiary of the Company by virtue of its
merger into the Net Tel Subsidiary, which was formed solely for
the purpose of this merger.
Immediately prior to the completion of the Global Plan,
there were approximately 8,730,000 outstanding shares of common
stock of the Company, and with its completion, there were
approximately 9,230,000 outstanding shares.
The source of the consideration used by the Global
Stockholders to acquire the respective interests in the Company
was the exchange of shares of common voting stock of Global, and
the number of shares received by the Global Stockholders in the
merger was the result of "arms length" negotiations, as there
were no prior material relationships between any of the Global
Stockholders and the Company or any of the Company's directors,
executive officers or "affiliates."
Copies of the Global Plan and related exhibits, the
News Release issued by the Company and the Articles of Merger
accompany this Report and are incorporated herein by reference.
See Item 7 of this Report.
(b)(i) No material assets of Tahoe On-Line were
succeeded to by the Company in the merger of Tahoe On-Line into
the Net Tel Subsidiary which constituted plant, equipment or
other physical property.
(b)(ii) No material assets of Global were succeeded
to by the Company in the merger of Global into the Net Tel
Subsidiary which constituted plant, equipment or other physical
property.
Item 3. Bankruptcy or Receivership.
None; not applicable.
Item 4. Changes in Registrant's Certifying Accountant.
None; not applicable.
Item 5. Other Events.
None; not applicable.
Item 6. Resignations of Directors and Executive Officers.
None; not applicable.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
The financial statements of Tahoe On-Line will be
available and filed with the Securities and Exchange Commission
within 75 days of the date of filing of this Report.
The financial statements of Global will be available
and filed with the Securities and Exchange Commission within 75
days of the date of filing of this Report.
(b) Pro Forma Financial Information.
Consolidated Pro Forma Financial Statements of the
Company taking into account the Tahoe On-Line Plan will be
available and filed with the Securities and Exchange Commission
within 75 days of the date of filing of this Report.
Consolidated Pro Forma Financial Statements of the
Company taking into account the Global Plan will be available and
filed with the Securities and Exchange Commission within 75 days
of the date of filing of this Report.
(c) Exhibits.
Exhibit
Description of Exhibit (1) Number
Agreement and Plan of Merger 2.1
between the Company, Sierra-Net, Inc. and
Sierra Internet, Inc. dba Tahoe On-Line
Exhibit A - Stockholders of Tahoe On-Line
Exhibit B - Net Telecommunications,
Incorporated Financial Statements
for the periods ended December 31,
1995, and March 31, 1996 (2)
Exhibit B-1 Net Telecommunications,
Incorporated Unaudited Financial
Statements for the period ended
June 30, 1996 (3)
Exhibit C - Exceptions to the Net
Telecommunications, Incorporated
Financial Statements
Exhibit D - Sierra Internet, Inc. DBA "Tahoe On-Line"
Balance Sheet for period ended June 30, 1996,
and Profit and Loss Statement
For the period January through June 30, 1996
Exhibit E - Exceptions to Sierra Internet Balance
Sheet and Profit and Loss Statement
Exhibit F - Investment Letter
Exhibit G - Compliance Certificate of
Net Telecommunications,
Incorporated
Exhibit H - Compliance Certificate of
Sierra Internet, Inc.
Exhibit I - Finders
Agreement and Plan of Merger 2.2
between the Company, Second Net
Telecommunications Subsidiary,
Incorporated, and Global Tours, Inc.
Exhibit A - Stockholders of Global
Exhibit B - Articles of Incorporation
Second Net Telecommunications
Subsidiary, Incorporated
Exhibit C - Net Telecommunications,
Incorporated Financial Statements
for the periods ended December 31,
1995, and March 31, 1996 (2)
Exhibit C-1 Net Telecommunications,
Incorporated Unaudited Financial
Statements for the period ended
June 30, 1996 (3)
Exhibit D - Exceptions to the Net
Telecommunications, Incorporated
Financial Statements
Exhibit E - Global Tours, Inc. Balance Sheet
and Profit and Loss Statement
For the period ended December 31,
1995
Exhibit F - Exceptions to Global Balance Sheet
and Profit and Loss Statement
Exhibit G - Investment Letter
Exhibit H - Compliance Certificate of
Net Telecommunications,
Incorporated
Exhibit I - Compliance Certificate of
Global Tours, Inc.
Exhibit J - Finders
Articles of Merger and Plan of Merger regarding 3.1
Tahoe On-Line Merger
Articles of Merger and Plan of Merger regarding 3.2
Global Merger
News Release regarding Tahoe On-Line Merger 19.1
News Release regarding Tahoe Global Merger 19.2
(1) Summaries of any exhibit are modified in their entirety by
this reference to each exhibit.
DOCUMENTS INCORPORATED BY REFERENCE
(2) The Company's financial statements for the periods ended
December 31, 1995, and March 31, 1996, which were filed as
an Exhibit to the 8-K Current Report of the Company dated
July 5, 1996, and which were Exhibit E to the Agreement and
Plan of Merger between the Company and Net
Telecommunications, Incorporated, a Nevada corporation,
reported therein.
(3) The Company's financial statements for the period ended June
30, 1996, which were filed with the Company's 10-QSB
Quarterly Report for the quarter ended June 30, 1996.
Item 8. Change in Fiscal Year.
None; not applicable.
SIGNATURES
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.
NET TELECOMMUNICATIONS,
INCORPORATED
Date: 9-12-96 /s/ Michael W. Gorts
--------------------
President
<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Plan") is made
this 24th day of August, 1996, by and between Net
Telecommunications, Incorporated, a Nevada corporation ("Net
Tel"); Sierra-Net, Inc., a Nevada corporation and wholly-owned
subsidiary of Net Tel (the "Net Tel Subsidiary"); Sierra
Internet, Inc., a Nevada corporation, dba "Tahoe On-Line ("Tahoe
On-Line"); and the persons listed in Exhibit A hereof, who are
the owners of record of all of the outstanding securities of
Tahoe On-Line (the "Tahoe On-Line Stockholders");
W I T N E S S E T H :
WHEREAS, the respective Boards of Directors of Net Tel
and Tahoe On-Line have adopted certain resolutions whereby the
Net Tel Subsidiary and Tahoe On-Line will merge in a "forward
triangular merger" pursuant to the provisions of Sections
368(a)(1) and 368(a)(2)(D) of the Internal Revenue Code and the
applicable provisions of the Nevada Revised Statutes, and whereby
the Tahoe On-Line Stockholders will receive shares of common
stock of Net Tel in consideration of such merger; and
WHEREAS, the Net Tel Subsidiary shall be the surviving
corporation under the merger, as contemplated by this Plan;
NOW, THEREFORE, in consideration of the premises and
the mutual representations, covenants and agreements herein, the
parties hereto do hereby agree as follows, to-wit:
Section 1
Plan of Merger
1.1 Merger and Surviving Corporation. Tahoe On-Line
will merge into the Net Tel Subsidiary, with the Net Tel
Subsidiary being the "Surviving Corporation"; the separate
existence of Tahoe On-Line shall cease, and the name of the
Surviving Corporation shall remain "Sierra-Net, Inc," and the
Surviving Corporation shall maintain the dba of "Tahoe On-Line."
Until amended, modified or otherwise altered, the Articles of
Incorporation of the Net Tel Subsidiary shall continue to be the
Articles of Incorporation of the Surviving Corporation; and the
Bylaws of the Net Tel Subsidiary shall continue to be the Bylaws
of the Surviving Corporation.
1.2 Share Conversion. Each outstanding or subscribed
share of common stock of Tahoe On-Line (the "Tahoe On-Line
Shares") shall, upon the effective date of the Plan, be converted
into 118.181818 shares of common stock of Net Tel, amounting to
130,000 shares in the aggregate, as outlined in Exhibit A; all
fractional shares shall be rounded to the nearest whole share.
1.3 Survivor's Succession to Corporate Rights. The
Surviving Corporation shall thereupon and thereafter possess all
rights, privileges, powers and franchises of a public as well of
a private nature, and be subject to all of the restrictions,
disabilities and duties of Tahoe On-Line; and all and singular,
the rights, privileges, powers and franchises of Tahoe On-Line,
and all property, real, personal and mixed, and all debts due to
Tahoe On-Line on whatever account, as well for stock
subscriptions as all other things in action or belonging to Tahoe
On-Line shall be vested in the Surviving Corporation; and all
property, rights, privileges, powers and franchises, and all and
every other interest shall be thereafter as effectually the
property of the Surviving Corporation as they were of Tahoe On-
Line, and the title to any real estate vested by deed or
otherwise in Tahoe On-Line shall not revert or be in any way
impaired by reason of the Plan; but all rights of creditors and
all liens upon any property of Tahoe On-Line shall be preserved
unimpaired, and all debts, liabilities and duties of Tahoe On-
Line shall thenceforth attach to the Surviving Corporation and
may be enforced against it to the same extent as if said debts,
liabilities and duties had been incurred or contracted by it.
1.4 Survivor's Succession to Corporate Acts, Plans,
Contracts, etc. All corporate acts, plans, policies, contracts,
approvals and authorizations of Tahoe On-Line and its
stockholders, its Board of Directors, committees elected or
appointed by the Board of Directors, officers and agents, which
were valid and effective immediately prior to the effective time
of the Plan, shall be taken for all purposes as the acts, plans,
policies, contracts, approvals and authorizations of the
Surviving Corporation and shall be as effective and binding
thereon as the same were with respect to Tahoe On-Line. The
employees of Tahoe On-Line shall become the employees of the
Surviving Corporation and continue to be entitled to the same
rights and benefits which they enjoyed as employees of Tahoe On-
Line.
1.5 Survivor's Rights to Assets, Liabilities,
Reserves, etc. The assets, liabilities, reserves and accounts of
Tahoe On-Line shall be recorded on the books of the Surviving
Corporation at the amounts at which they, respectively, shall
then be carried on the books of Tahoe On-Line, subject to such
adjustments or eliminations of intercompany items as may be
appropriate in giving effect to the Plan.
1.6 Resignations of Present Directors and Executive
Officers of the Surviving Corporation and Designation of New
Directors and Executive Officers. On Closing, with the exception
of Michael W. Gorts, the present directors and executive officers
of the Net Tel Subsidiary shall retain their present positions,
and designate the directors of Tahoe On-Line to also serve on the
Board of Directors of the Net Tel Subsidiary, until the next
respective annual meetings of the stockholders and Board of
Directors of Net Tel and the Surviving Corporation, and until
their respective successors shall be elected and qualified or
until their respective prior resignations or terminations.
Executive officers of Tahoe On-Line may also be designated
officers of a new division of business operations previously
comprising the operations of Tahoe On-Line, prior to the
completion of the Plan. Not less than one member of the Board of
Directors of Net Tel shall serve on the Board of Directors of the
Surviving Corporation at all times.
1.7 Principal Office. The principal executive office
of the Surviving Corporation shall be located at 917 Tahoe Blvd.,
Suite 200, Incline Village, Nevada 89450-3709. The Surviving
Corporation shall also maintain a registered office in the State
of Nevada at the same address. The Surviving Corporation may
also maintain an address at P.O. Box 6887, Stateline, Nevada
89449.
1.8 Adoption. The Plan shall be adopted by the Board
of Directors of Net Tel as the sole stockholder of the Net Tel
Subsidiary, and by all of the Tahoe On-Line Stockholders.
1.9 Dissenters' Rights and Notification. As the Plan
requires the affirmative vote of all of the outstanding voting
securities of the Net Tel Subsidiary and Tahoe On-Line, and the
Nevada Revised Statutes do not require a vote of Net Tel
stockholders, dissenters' rights are not applicable under the
Plan;
1.10 Delivery of Certificates by the Tahoe On-Line
Stockholders. The transfer of the Tahoe On-Line Shares by the
Tahoe On-Line Stockholders shall be effected by the delivery to
Net Tel or its transfer agent of certificates representing the
Tahoe On-Line Shares endorsed in blank or accompanied by stock
powers executed in blank, with all signatures witnessed or
guaranteed to the satisfaction of Net Tel and the Net Tel
Subsidiary and with any necessary transfer taxes and other
revenue stamps affixed and acquired at the expense of the Tahoe
On-Line Stockholders, and on receipt thereof to the satisfaction
of the Surviving Corporation, stock certificates representing
shares in Net Tel as outlined in Exhibit A shall be issued and
delivered to the Tahoe On-Line Stockholders; as a condition to
the exchange of the Tahoe On-Line Shares, Net Tel and the
Surviving Corporation shall require the Tahoe On-Line
Stockholders to execute and deliver and Investment Letter as
outlined in Section 4.12 hereof, acknowledging, among other
things, that the shares of Net Tel to be received in exchange for
the Tahoe On-Line Shares are "unregistered" and "restricted"
securities which have not been registered with the Securities and
Exchange Commission or any state regulatory agency, and which
must be so registered prior to public sale by the Tahoe On-Line
Stockholders, unless an exemption from such registration is
available for any such sale.
1.11 Further Assurances. At the Closing and from time
to time thereafter, the parties shall execute such additional
instruments and take such other action as may be reasonably
required or necessary to carry out the terms and provisions
hereof.
1.12 Effective Date. The Effective Date of the Plan
shall be the date when the Articles of Merger are filed and
accepted by the Secretary of State of the State of Nevada and at
such time as all applicable provisions of the Nevada Revised
Statutes have been met.
Section 2
Closing
The Closing contemplated by Section 1.1 shall be held
at the principal executive offices of the Surviving Corporation
as outlined in Section 1.7 hereof, not later than ten days
following the date of this Plan, unless another place or time is
agreed upon in writing by the parties. The Closing may be
accomplished by wire, express mail or other courier service,
conference telephone communications or as otherwise agreed by the
respective parties or their duly authorized representatives.
Section 3
Representations and Warranties of Net Tel
and the Net Tel Subsidiary
Net Tel and the Net Tel Subsidiary represent and
warrant to, and covenant with, the Tahoe On-Line Stockholders and
Tahoe On-Line as follows:
3.1 Corporate Status. Net Tel is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Nevada and is licensed or qualified as a foreign
corporation in all states in which the nature of its business or
the character or ownership of its properties makes such licensing
or qualification necessary. Net Tel is a publicly held company,
having lawfully offered and sold a portion of its securities to
residents of the State of Utah pursuant to an Application of
Registration of Securities filed with the Utah Securities
Division, and an S-18 Registration Statement filed with the
Securities and Exchange Commission under the Securities Act of
1933, as amended; Net Tel is "current" in the filing of all
reports required to be filed by it with the Securities and
Exchange Commission, copies of which have been delivered to the
Tahoe On-Line Stockholders and Tahoe On-Line, and which such
reports are true and correct in every material respect; and the
securities of Net Tel are currently listed on the OTC Bulletin
Board of the National Association of Securities Dealers, Inc.
(the "NASD"), under the Symbol "NETQ."
3.2 Capitalization. The authorized capital stock of
Net Tel consists of 50,000,000 shares of common voting stock,
having a par value of $0.001 per share, of which approximately
8,600,000 shares are outstanding, all fully paid and non-
assessable; except as may be provided herein (see Exhibit C),
there are no outstanding options, warrants or calls pursuant to
which any person has the right to purchase any authorized and
unissued capital stock of Net Tel.
The capitalization of the Net Tel Subsidiary consists
of 25,000 shares of common voting stock with a par value of $1
per share, divided into two classes, A and B, with each class
having 12,500 shares, of which 6,000 Class A shares are issued
and outstanding, all fully paid and non-assessable, and all of
which are owned by Net Tel; there are no outstanding options,
warrants or calls pursuant to which any person has the right to
purchase any authorized and unissued capital stock of the Net Tel
Subsidiary.
3.3 Financial Statements. The audited financial
statements of Net Tel furnished to the Tahoe On-Line Stockholders
and Tahoe On-Line, consisting of a balance sheet dated December
31, 1995, and a related statement of income for the period then
ended, attached hereto as Exhibit B and incorporated herein by
reference, and an unaudited consolidated balance sheet and income
statement for the period ended June 30, 1996, attached hereto as
Exhibit B-1 and incorporated herein by reference, are correct and
fairly present the financial condition of Net Tel at such dates
and for the periods involved; such statements were prepared in
accordance with generally accepted accounting principles
consistently applied, and no material change has occurred in the
matters disclosed therein, except as indicated in Exhibit C,
which is attached hereto and incorporated herein by reference.
Such financial statements do not contain any untrue statement of
a material fact or omit to state a material fact necessary to
make the statements therein not misleading.
3.4 Undisclosed Liabilities. Net Tel has no
liabilities of any nature except to the extent reflected or
reserved against in its balance sheets, whether accrued,
absolute, contingent or otherwise, including, without limitation,
tax liabilities and interest due or to become due, except as set
forth in Exhibit C.
3.5 Interim Changes. Since the date of its balance
sheets, except as set forth in Exhibit C, there have been no (1)
changes in financial condition, assets, liabilities or business
of Net Tel which, in the aggregate, have been materially adverse;
(2) damages, destruction or losses of or to property of Net Tel,
payments of any dividend or other distribution in respect of any
class of stock of Net Tel, or any direct or indirect redemption,
purchase or other acquisition of any class of any such stock; or
(3) increases paid or agreed to in the compensation, retirement
benefits or other commitments to employees.
3.6 Title to Property. Net Tel has good and
marketable title to all properties and assets, real and personal,
reflected in its balance sheets, and the properties and assets of
Net Tel are subject to no mortgage, pledge, lien or encumbrance,
except for liens shown therein or in Exhibit C, with respect to
which no default exists.
3.7 Litigation. There is no litigation or proceeding
pending, or to the knowledge of Net Tel, threatened, against or
relating to Net Tel, its properties or business, except as set
forth in Exhibit C. Further, no officer, director or person who
may be deemed to be an affiliate of Net Tel is party to any
material legal proceeding which could have an adverse effect on
the Company (financial or otherwise), and none is party to any
action or proceeding wherein any has an interest adverse to Net
Tel.
3.8 Books and Records. From the date of this Plan to
the Closing, Net Tel will (1) give to the Tahoe On-Line
Stockholders and Tahoe On-Line or their respective
representatives full access during normal business hours to all
of its offices, books, records, contracts and other corporate
documents and properties so that the Tahoe On-Line Stockholders
and Tahoe On-Line or their respective representatives may inspect
and audit them; and (2) furnish such information concerning the
properties and affairs of Net Tel as the Tahoe On-Line
Stockholders and Tahoe On-Line or their respective
representatives may reasonably request.
3.9 Tax Returns. Net Tel has filed all federal and
state income or franchise tax returns required to be filed or has
received currently effective extensions of the required filing
dates.
3.10 Confidentiality. Until the Closing (and
thereafter if there is no Closing), Net Tel and its
representatives will keep confidential any information which they
obtain from the Tahoe On-Line Stockholders or from Tahoe On-Line
concerning the properties, assets and business of Tahoe On-Line.
If the transactions contemplated by this Plan are not consummated
by August 30, 1996, Net Tel will return to Tahoe On-Line all
written matter with respect to Tahoe On-Line obtained by Net Tel
in connection with the negotiation or consummation of this Plan.
3.11 Corporate Authority. Net Tel has full corporate
power and authority to enter into this Plan and to carry out its
obligations hereunder and will deliver to the Tahoe On-Line
Stockholders and Tahoe On-Line or their respective
representatives at the Closing a certified copy of resolutions of
its Board of Directors authorizing execution of this Plan by its
officers and performance thereunder.
3.12 Due Authorization. The execution of this Plan
and performance by Net Tel hereunder has been duly authorized by
all requisite corporate action on the part of Net Tel, and this
Plan constitutes a valid and binding obligation of Net Tel and
performance hereunder will not violate any provision of the
Articles of Incorporation, Bylaws, agreements, mortgages or other
commitments of Net Tel.
3.13 Environmental Matters. Net Tel has no knowledge
of any assertion by any governmental agency or other regulatory
authority of any environmental lien or action, or of any cause
for any such lien or action.
3.14 Access to Information Regarding Tahoe On-Line.
Net Tel and the Net Tel Subsidiary acknowledge that they have
been delivered copies of what has been represented to be
documentation containing all material information respecting
Tahoe On-Line and its present and contemplated business
operations, potential acquisitions, management and other factors;
that they have had a reasonable opportunity to review such
documentation and discuss it, to the extent desired, with their
legal counsel, directors and executive officers; that they have
had, to the extent desired, the opportunity to ask questions of
and receive responses from the directors and executive officers
of Tahoe On-Line, and with the legal and accounting firms of
Tahoe On-Line, with respect to such documentation; and that to
the extent requested, all questions raised have been answered to
their complete satisfaction.
Section 4
Representations, Warranties and Covenants of Tahoe On-Line
and the Tahoe On-Line Stockholders
Tahoe On-Line and the Tahoe On-Line Stockholders
represent and warrant to, and covenant with, Net Tel and the Net
Tel Subsidiary as follows:
4.1 Tahoe On-Line Shares. The Tahoe On-Line
Stockholders are the record and beneficial owners of the Tahoe
On-Line Shares, free and clear of adverse claims of third
parties; and Exhibit A correctly sets forth the name, address and
number of Tahoe On-Line Shares owned by the Tahoe On-Line
Stockholders.
4.2 Corporate Status. Tahoe On-Line is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Nevada and is licensed or qualified as a
foreign corporation in all states in which the nature of its
business or the character or ownership of its properties makes
such licensing or qualification necessary.
4.3 Capitalization. The authorized capital stock of
Tahoe On-Line consists of 25,000 shares of common voting stock
with no par value per share, of which 1,100 shares are issued and
outstanding, all fully paid and non-assessable; there are no
outstanding options, warrants or calls pursuant to which any
person has the right to purchase any authorized and unissued
capital stock of Tahoe On-Line.
4.4 Financial Statements. The unaudited financial
statements of Tahoe On-Line furnished to Net Tel, consisting of
a balance sheet as of June 30, 1996, and a profit and loss
statement for the period from January through December 31, 1995,
attached hereto as Exhibit D and incorporated herein by
reference, are correct and fairly present the financial condition
of Tahoe On-Line at such date and for the period involved; such
statements were prepared in accordance with generally accepted
accounting principles consistently applied, and no material
change has occurred in the matters disclosed therein, except as
indicated in Exhibit E, which is attached hereto and incorporated
herein by reference. Such financial statements do not contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein not misleading.
4.5 Undisclosed Liabilities. Tahoe On-Line has no
material liabilities of any nature except to the extent reflected
or reserved against in the balance sheet, whether accrued,
absolute, contingent or otherwise, including, without limitation,
tax liabilities and interest due or to become due, except as set
forth in Exhibit E.
4.6 Interim Changes. Since the date of its balance
sheet, except as set forth in Exhibit E, there have been no (1)
changes in the financial condition, assets, liabilities or
business of Tahoe On-Line which, in the aggregate, have been
materially adverse; (2) damages, destruction or loss of or to the
property of Tahoe On-Line, payment of any dividend or other
distribution in respect of the capital stock of Tahoe On-Line, or
any direct or indirect redemption, purchase or other acquisition
of any such stock; or (3) increases paid or agreed to in the
compensation, retirement benefits or other commitments to
employees.
4.7 Title to Property. Tahoe On-Line has good and
marketable title to all properties and assets, real and personal,
proprietary or otherwise, reflected in its balance sheet, and the
properties and assets of Tahoe On-Line are subject to no
mortgage, pledge, lien or encumbrance, except for liens shown
therein or in Exhibit E, with respect to which no default exists.
4.8 Litigation. There is no litigation or proceeding
pending, or to the knowledge of Tahoe On-Line, threatened,
against or relating to Tahoe On-Line, its properties or business,
except as set forth in Exhibit E. Further, no officer, director
or person who may be deemed to be an affiliate of Tahoe On-Line
is party to any material legal proceeding which could have an
adverse effect on Tahoe On-Line (financial or otherwise), and
none is party to any action or proceeding wherein any has an
interest adverse to Tahoe On-Line.
4.9 Books and Records. From the date of this Plan to
the Closing, the Tahoe On-Line Stockholders will cause Tahoe On-
Line to (1) give to Net Tel and its representatives full access
during normal business hours to all of its offices, books,
records, contracts and other corporate documents and properties
so that Net Tel may inspect and audit them; and (2) furnish such
information concerning the properties and affairs of Tahoe On-
Line as Net Tel may reasonably request.
4.10 Tax Returns. Tahoe On-Line has filed all federal
and state income or franchise tax returns required to be filed or
has received currently effective extensions of the required
filing dates.
4.11 Confidentiality. Until the Closing (and
continuously if there is no Closing), the Tahoe On-Line
Stockholders and Tahoe On-Line and their respective
representatives will keep confidential any information which they
obtain from Net Tel concerning its properties, assets and
business. If the transactions contemplated by this Plan are not
consummated by August 30, 1996, the Tahoe On-Line Stockholders
and Tahoe On-Line will return to Net Tel all written matter with
respect to Net Tel obtained by them in connection with the
negotiation or consummation of this Plan.
4.12 Investment Intent. The Tahoe On-Line Stockholders
are acquiring the shares to be delivered to them under this Plan
for investment and not with a view to the sale or distribution
thereof, and the Tahoe On-Line Stockholders have no commitment or
present intention to dispose of the Net Tel common stock being
received under the Plan. The Tahoe On-Line Stockholders shall
execute and deliver to Net Tel, as a condition to the Closing, an
Investment Letter attached hereto as Exhibit F and incorporated
herein by reference.
4.13 Corporate Authority. Tahoe On-Line has full
corporate power and authority to enter into this Plan and to
carry out its obligations hereunder and will deliver to Net Tel
or its representatives at the Closing a certified copy of
resolutions of its Board of Directors authorizing execution of
this Plan by its officers and performance thereunder.
4.14 Due Authorization. The execution of this Plan and
performance by Tahoe On-Line hereunder have been duly authorized
by all requisite corporate action on the part of Tahoe On-Line,
and this Plan constitutes a valid and binding obligation of Tahoe
On-Line and performance hereunder will not violate any provision
of the Articles of Incorporation, Bylaws, agreements, mortgages
or other commitments of Tahoe On-Line.
4.15 Environmental Matters. Tahoe On-Line has no
knowledge of any assertion by any governmental agency or other
regulatory authority of any environmental lien or action, or of
any cause for any such lien or action.
4.16 Access to Information Regarding Net Tel. The
Tahoe On-Line Stockholders and Tahoe On-Line acknowledge that
they have been delivered copies of what has been represented to
be documentation containing all material information respecting
Net Tel and its present and contemplated business operations,
management and other factors, all in the form of annual and
quarterly reports filed by Net Tel with the Securities and
Exchange Commission; that they have had a reasonable opportunity
to review such documentation and discuss it, to the extent
desired, with their legal counsel, directors and executive
officers; that they have had, to the extent desired, the
opportunity to ask questions of and receive responses from the
directors and executive officers of Net Tel, and with the legal
and accounting firms of Net Tel, with respect to such
documentation; and that to the extent requested, all questions
raised have been answered to their complete satisfaction.
Section 5
Conduct of Tahoe On-Line Pending the Closing
Except as otherwise provided herein, Tahoe On-Line and
the Tahoe On-Line Stockholders agree that Tahoe On-Line will
conduct itself in the following manner pending the Closing:
5.1 Certificate of Incorporation and Bylaws. No
change will be made in the Certificate of Incorporation or Bylaws
of Tahoe On-Line.
5.2 Capitalization, etc. Tahoe On-Line will not make
any change in its authorized or issued shares of any class,
declare or pay any dividend or other distribution, or issue,
encumber, purchase or otherwise acquire any of its shares of any
class.
5.3 Conduct of Business. Tahoe On-Line will use its
best efforts to maintain and preserve its business organization,
employee relationships and good will intact, and will not,
without the written consent of Net Tel, enter into any material
commitments except in the ordinary course of business.
Section 6
Conduct of Net Tel Pending the Closing
Except as otherwise provided herein, Net Tel and the
Net Tel Subsidiary agree that Net Tel will conduct itself in the
following manner pending the Closing:
6.1 Certificate of Incorporation and Bylaws. No
change will be made in the Certificate of Incorporation or Bylaws
of Net Tel.
6.2 Capitalization, etc. Net Tel will not make any
change in its authorized or issued shares, declare or pay any
dividend or other distribution, or issue, encumber, purchase or
otherwise acquire any of its shares of any class.
6.3 Conduct of Business. Net Tel will use its best
efforts to maintain and preserve its business organization,
employee relationships and good will intact, and will not,
without the written consent of Tahoe On-Line, enter into any
material commitments except in the ordinary course of business.
Section 7
Conditions Precedent to Obligations of the Tahoe On-Line
Stockholders and Tahoe On-Line
All obligations of the Tahoe On-Line Stockholders and
Tahoe On-Line under this Plan are subject, at their option, to
the fulfillment, before or at the Closing, of each of the
following conditions:
7.1 Representations and Warranties True at Closing.
The representations and warranties of Net Tel and the Net Tel
Subsidiary contained in this Plan shall be deemed to have been
made again at and as of the Closing and shall then be true in all
material respects and shall survive the Closing.
7.2 Due Performance. Net Tel and the Net Tel
Subsidiary shall have performed and complied with all the terms
and conditions required by this Plan to be performed or complied
with by them before the Closing.
7.3 Officers' Certificate. Tahoe On-Line and the
Tahoe On-Line Stockholders shall have been furnished with a
certificate signed by the President Net Tel, attached hereto as
Exhibit G and incorporated herein by reference, dated as of the
Closing, certifying (1) to the effects set out in Sections 6.1
and 6.2; and (2) that since the date of the financial statements
(Exhibits B and B-1 hereto), there has been no material adverse
change in the financial condition, business or properties of Net
Tel, taken as a whole.
7.4 Opinion of Counsel of Net Tel. The Tahoe On-Line
Stockholders and Tahoe On-Line shall have received an opinion of
counsel for Net Tel, dated as of the Closing, to the effect that
(1) the representations of Sections 3.1, 3.2 and 3.12 are
correct; (2) except as specified in the opinion, counsel knows of
no inaccuracy in the representations in 3.5, 3.6 or 3.7; and (3)
the shares of Net Tel to be issued to the Tahoe On-Line
Stockholders under this Plan will, when so issued, be validly
issued, fully paid and non-assessable.
Section 8
Conditions Precedent to Obligations of Net Tel
All obligations of Net Tel and the Net Tel Subsidiary
under this Plan are subject, at their option, to the fulfillment,
before or at the Closing, of each of the following conditions:
8.1 Representations and Warranties True at Closing.
The representations and warranties of Tahoe On-Line and the Tahoe
On-Line Stockholders contained in this Plan shall be deemed to
have been made again at and as of the Closing and shall then be
true in all material respects and shall survive the Closing.
8.2 Due Performance. The Tahoe On-Line Stockholders
and Tahoe On-Line shall have performed and complied with all the
terms and conditions required by this Plan to be performed or
complied with by them before the Closing.
8.3 Officers' and Stockholders' Certificate. Net Tel
shall have been furnished with a certificate signed by the
President of Tahoe On-Line and the Tahoe On-Line Stockholders,
attached hereto as Exhibit H and incorporated herein by
reference, dated as of the Closing, certifying (1) to the effects
set out in Sections 5.1 and 5.2; and (2) that since the date of
the financial statements (Exhibit D), there has been no material
adverse change in the financial condition, business or properties
of Tahoe On-Line taken as a whole.
8.4 Opinion of Counsel of Tahoe On-Line. Net Tel
shall have received an opinion of counsel for Tahoe On-Line,
dated as of the Closing, to the effect that (1) the
representations of Sections 4.2, 4.3 and 4.14 are correct; (2)
except as specified in the opinion, counsel knows of no
inaccuracy in the representations in 4.6, 4.7 or 4.8; and (3) the
Tahoe On-Line Shares to be delivered to Net Tel under this Plan
will, when so delivered, have been validly issued, fully paid and
non-assessable, and will be free and clear of any liens or
encumbrances.
8.5 Books and Records. The Tahoe On-Line Stockholders
or the Board of Directors of Tahoe On-Line shall have caused
Tahoe On-Line to make available all books and records of Tahoe
On-Line, including minute books and stock transfer records;
provided, however, only to the extent requested in writing by Net
Tel at Closing.
8.6 Acceptance by Stockholders. The terms of this
Plan shall have been approved by the Tahoe On-Line Stockholders
as evidenced by their signatures on Exhibit F and on the
signature page hereof.
Section 9
Termination
Prior to Closing, this Plan may be terminated (1) by
mutual consent in writing; (2) by either the Directors of Net Tel
or the Tahoe On-Line Stockholders and Tahoe On-Line if there has
been a material misrepresentation or material breach of any
warranty or covenant by the other party; or (3) by either the
Directors of Net Tel or the Tahoe On-Line Stockholders and Tahoe
On-Line if the Closing shall not have taken place, unless
adjourned to a later date by mutual consent in writing, by the
date fixed in Section 2.
Section 10
Survival and Indemnity
10.1 Survival of Representations, Warranties, Covenants
and Agreements. The representations, warranties, covenants and
agreements contained herein shall survive the Closing without
regard to any action taken pursuant to this Plan, including
without limitation, any investigation made by the party asserting
any breach thereof, and shall continue in full force and effect
for three years after the Closing.
10.2 Indemnity from Net Tel and the Net Tel Subsidiary.
Net Tel and the Net Tel Subsidiary agree to indemnify and hold
Tahoe On-Line and the Tahoe On-Line Stockholders harmless against
and in respect of:
(a) Any damage, liability, deficiency, loss, cost,
expense or claim arising out of or resulting from
(i) any defect in title, (ii) any
misrepresentation or omission by Net Tel or the
Net Tel Subsidiary herein or in any exhibit
hereto, (iii) any materially misleading
information furnished by Net Tel or the Net Tel
Subsidiary herein or in any exhibit hereto, (iv)
any breach by Net Tel or the Net Tel Subsidiary of
any representation, warranty or covenant herein or
in any exhibit hereto, or (v) any debt or other
obligation of Net Tel or the Net Tel Subsidiary
existing at or prior to the Closing or arising
thereafter in connection with events occurring
prior to the Closing (to the extent only that such
debt or obligation is attributable to such events
prior to the Closing); and
(b) All reasonable costs and expenses (including
reasonable attorneys' fees) incurred by Tahoe On-
Line or the Tahoe On-Line Stockholders in
connection with any action, suit, proceeding,
demand, assessment or judgment incident to any of
the matters indemnified against in this Section
10.2.
10.3 Indemnity from Tahoe On-Line and Tahoe On-Line
Stockholders. Tahoe On-Line the Tahoe On-Line Stockholders agree
to indemnify and hold Net Tel and the Net Tel Subsidiary harmless
from and against and in respect of:
(a) Any damage, liability, deficiency, loss, cost,
expense or claim arising out of or resulting from
(i) the breach of any representation, warranty or
covenant by Tahoe On-Line or the Tahoe On-Line
Stockholders herein or in any exhibit hereto (ii)
any misrepresentation or omission by Tahoe On-Line
or the Tahoe On-Line Stockholders herein or in any
exhibit hereto or (iii) any materially misleading
information furnished by Tahoe On-Line or the
Tahoe On-Line Stockholders herein or in any
exhibit hereto; and
(b) All reasonable costs and expenses (including
reasonable attorneys' fees) incurred by Net Tel
and the Net Tel Subsidiary in connection with any
action, suit, proceeding, demand, assessment, or
judgment incident to any of the matters
indemnified against in this Section 10.3.
10.4 Not Exclusive Remedy. Any right of indemnity of
any party pursuant to this Section 10 shall be in addition to and
shall not operate as a limitation on any other right to indemnity
of such party pursuant to this Plan, any other document or
instrument executed in connection with the consummation of the
transaction contemplated hereby, or otherwise.
Section 11
General Provisions
11.1 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 Plan.
11.2 Waiver. Any failure on the part of any party
hereto to comply with any of their respective obligations,
agreements or conditions hereunder may be waived in writing by
the party to whom such compliance is owed.
11.3 Brokers. Except as otherwise shown in Exhibit I,
each party represents to the other parties hereunder that no
broker or finder has acted for them in connection with this Plan,
and agrees to indemnify and hold harmless the other parties
against any fee, loss or expense arising out of claims by brokers
or finders employed or alleged to have been employed by either
of them.
11.4 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, as
follows:
If to Net Tel: Michael W. Gorts
8170 West Sahara Avenue, Suite 203
Las Vegas, Nevada 89117
With a copy to: Leonard W. Burningham, Esq.
455 East 500 South, Suite 205
Salt Lake City, Utah 84111
If to Tahoe On-Line P.O. Box 6887
or its Stateline, Nevada 89449
Stockholders:
11.5 Entire Agreement. This Plan constitutes the
entire agreement between the parties and supersedes and cancels
any other agreement, representation, or communication, whether
oral or written, between the parties hereto relating to the
transactions contemplated herein or the subject matter hereof.
11.6 Headings. The section and subsection headings in
this Plan are inserted for convenience only and shall not affect
in any way the meaning or interpretation of this Plan.
11.7 Governing Law. This Plan shall be governed by and
construed and enforced in accordance with the laws of the State
of Nevada, except to the extent pre-empted by federal law, in
which event (and to that extent only), federal law shall govern.
11.8 Assignment. This Plan shall inure to the benefit
of, and be binding upon, the parties hereto and their successors
and assigns; provided however, that any assignment by any party
of any rights under this Plan without the prior written consent
of the other parties shall be void.
11.9 Counterparts. This Plan 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.
11.10 Default. In the event of default hereunder,
the defaulting party shall be liable to the non-defaulting party
for all costs and reasonable attorney's fees incurred in the
enforcement of any of the provisions hereof.
11.11 Registration Rights of Tahoe On-Line
Stockholders. Unless the Securities and Exchange Commission's
proposal to reduce the two year holding period of Rule 144 to one
year is effective within one year from the date of the Plan, that
Net Tel agree to register the securities being issued under the
Plan with the Securities and Exchange Commission, or, at its
option, to find an interested party to purchase these securities
or to offer to buy this amount of such securities at the then bid
price for such shares on the OTC Bulletin Board.
IN WITNESS WHEREOF, the parties have executed this
Agreement and Plan of Merger effective the day and year first
above written.
NET TELECOMMUNICATIONS,
INCORPORATED
/s/ Michael W. Gorts, President
TAHOE ON-LINE, INC.
/s/ Anthony Prestigiacomo, President
TAHOE ON-LINE STOCKHOLDERS
/s/ Anthony Prestigiacomo
/s/ Marilyn Prestigiacomo
/s/ Anthony F. Prestigiacomo
EXHIBIT A
Number of Shares
Number of Shares of Stock of
Owned of Net Tel to be
Name and Address Tahoe On-Line Received in Exchange
Anthony & Marilyn 1,000 118,182
Prestigiacomo
P.O. Box 314
Genoa, Nevada 89411
Anthony F. Prestigiacomo 100 11,818
P.O. Box 314
Genoa, Nevada 89411 _______
Total: 130,000
EXHIBIT B
NET TELECOMMUNICATIONS, INCORPORATED
FINANCIAL STATEMENTS
December 31, 1995, and March 31, 1996
See Documents Incorporated by Reference
EXHIBIT B-1
NET TELECOMMUNICATIONS, INCORPORATED
FINANCIAL STATEMENTS
(Unaudited)
June 30, 1996
See Documents Incorporated by Reference
EXHIBIT C
EXCEPTIONS TO NET TEL FINANCIAL STATEMENTS
The financial statements of Net Tel for the period
ended December 31, 1995, and March 31, 1996, do not reflect the
recent Agreement and Plan of Merger (the "Net Tel Nevada Merger")
between Net Tel and Net Telecommunications, Incorporated, a
Nevada corporation, formerly known as "Long Distance
International, Inc." ("Net Tel Nevada" [see the 10-KSB Annual
Report of Net Tel for the year ended December 31, 1995, when Net
Tel was then named "Silver Ledge, Incorporated"]); however, the
unaudited financial statements of Net Tel for the period ended
June 30, 1996, do take into account the completion of the Net Tel
Nevada Merger. None of the financial statements of Net Tel take
into account the completion of the Agreement and Plan of Merger
("Sierra Merger") between Net Tel and Sierra-Net, Inc., a Nevada
corporation, pursuant to which an additional 600,000 shares of
the "unregistered" and "restricted" common stock of Net Tel were
issued to the stockholders of Sierra. Copies of the Net Tel
Nevada Merger and the Sierra Merger have been provided to Tahoe
On-Line and the Tahoe On-Line Stockholders prior to the Closing
of this Plan.
Further, 500,000 and 450,000 (the 450,000 share amount
is presently being negotiated to be reduced to 200,000 shares)
"unregistered" and "restricted" shares, respectively, shall be
issued to Global Tours, Inc., a Nevada corporation ("Global
Tours"), and Las Vegas Reservations, Inc., a Nevada corporation
("Las Vegas Reservations"), pursuant to the Letters of Intent
between these respective entities and Net Tel, whereby these
entities will become wholly-owned subsidiaries of Net Tel, and
all of which were subject to the completion of the merger
involving Net Tel Nevada, and are further subject to the
execution and delivery of definitive agreements between the
respective parties. Copies of these Letters of Intent and all
material documentation respecting these entities have been
provided to Tahoe On-Line and the Tahoe On-Line Stockholders
prior to the Closing under this Plan, together with a copy of the
executed Agreement and Plan of Merger between Net Tel and Global
Tours, which is set to be completed on or about August 22, 1996;
however, no assurance can be given that the Las Vegas
Reservations transaction will be completed.
EXHIBIT D
SIERRA INTERNET, INC.
DBA "TAHOE ON-LINE"
BALANCE SHEET FOR PERIOD ENDED JUNE 30, 1996,
AND PROFIT AND LOSS STATEMENT
FOR JANUARY THROUGH JUNE 30, 1996
BALANCE SHEET
June 30, 1996
ASSETS
Current Assets
Checking/Savings
Checking $10,353.14
Petty Cash 661.06
Total Checking/savings $11,014.20
Accounts Receivable 5,759.11
Total Current Assets $16,773.31
TOTAL ASSETS $16,773.31
LIABILITIES & EQUITY
Equity
Owners Equity $ 8,000.00
Retained Earnings $ 3,099.82
Net Income $ 5,673.49
Total Equity $16,773.31
TOTAL LIABILITIES & EQUITY $16,773.31
PROFIT AND LOSS
January through June 30, 1996
ORDINARY INCOME/EXPENSES
INCOME
Sales $90,396.00
TOTAL INCOME $90,396.00
GROSS PROFIT $90,396.00
Expenses
Acct/Mngt $11,329.77
Advertising 493.92
Automobile Expenses 328.37
Bank Service Charges 1,419.44
Commission 1,639.00
Consulting Fees 2,722.55
Contributions 95.00
Customer Returns 1,580.00
Data Port 8,700.00
Dues and Subscriptions 145.40
Equipment Purchase 21,582.33
Freight Expenses 11.25
Insurance
Medical 2411.74
Other 788.00
Total Insurance 3,199.74
Office Supplies 2,922.56
Owner Draw 18,000.00
Postage and Delivery 122.44
Professional Fees-accounting 681.00
Rent 875.00
Supplies-Office 301.00
Taxes-property 51.91
Telephone 7,542.14
Travel & Entertainment
Entertainment 493.16
Meals 33.81
Travel 532.66
Total Travel & Entertainment 1,059.63
TOTAL EXPENSES $84,802.45
NET ORDINARY INCOME $5,593.55
OTHER INCOME
Interest Income $ 79.94
TOTAL OTHER INCOME $ 79.94
NET INCOME $5,673.49
EXHIBIT E
None.
EXHIBIT F
Net Telecommunications, Incorporated
8170 West Sahara Avenue, Suite 203
Las Vegas, Nevada 89117
Fidelity Stock Transfer Company
1800 South West Temple, Suite 301
Salt Lake City, Utah 84115
Re: Exchange of shares of Sierra
Internet, Inc., a Nevada
corporation dba "Tahoe On-Line"
("Tahoe On-Line"), for shares of
Net Telecommunications,
Incorporated, a Nevada corporation
("Net Tel or the "Company")
Gentlemen:
Pursuant to that certain Agreement and Plan of Merger
(the "Plan") between the undersigned, Tahoe On-line, Net Tel, and
the Net Tel Subsidiary, I acknowledge that I have approved this
exchange; that I am aware of all of the terms and conditions of
the Plan; that I have received and personally reviewed a copy of
the Plan; the Annual Report on Form 10-KSB of Net Tel for the
year ended December 31, 1995, and its Form 10-QSB for the quarter
ended June 30, 1996; the 8-K Current Reports respecting the Net
Tel Merger and the Sierra Merger; the Agreement and Plan of
Merger and related exhibits involving Global Tours, Inc., and all
information regarding certain proposed acquisitions or mergers of
Net Tel; and I represent and warrant that no director or
executive officer of the Company or any associate of either has
solicited this exchange; that I am an "accredited investor" as
that term is known under the Rules and Regulations of the
Securities and Exchange Commission (see Exhibit "A" hereto);
and/or I represent and warrant that I have sufficient knowledge
and experience to understand the nature of the exchange, and I am
fully capable of bearing the economic risk of the loss of my
entire cost basis in the shares of Tahoe On-Line being exchanged.
I understand that you have and will make books and
records of your Company available to me for my inspection in
connection with the contemplated exchange of my shares, and that
I have been encouraged to review the information and ask any
questions I may have concerning the information of any director
or executive officer of the Company whose addresses are listed in
the aforesaid Annual Report, or of the legal and accounting firms
for the Company. I understand that the accounting firm for Net
Tel is Jones, Jensen & Co., Certified Public Accountants, 349
South 200 East, Salt Lake City, Utah 84111; Telephone #801-328-
4408; or Dave Thomson, CPA, 1980 South 300 West, Salt Lake City,
Utah 84101, Telephone #801-328-3900; and that legal counsel for
Net Tel is Leonard W. Burningham, Esq., Suite 205, Hermes
Building, 455 East 500 South, Salt Lake City, Utah 84111,
Telephone #801-363-7411.
I further understand that I must bear the economic risk
of ownership of any of the Net Tel shares for a long period of
time, the minimum of which will be two (2) years, as these shares
are "unregistered" shares and may not be sold unless any
subsequent offer or sale is registered with the United States
Securities and Exchange Commission or is otherwise exempt from
the registration requirements of the Securities Act of 1933, as
amended (the "Act"), or other applicable securities laws, rules
and regulations.
I intend that you rely on all of my representations
made herein and those in the personal questionnaire (if
applicable) I provided to Net Tel for use by Net Tel as they are
being made to induce you to issue me the shares of Net Tel under
the Plan, and I further represent (of my personal knowledge or by
virtue of my reliance on one or more personal representatives),
and agree as follows, to-wit:
1. That the shares being acquired are being received
for investment purposes and not with a view toward further
distribution;
2. That I have a full and complete understanding of
the phrase "for investment purposes and not with a view toward
further distribution";
3. That I understand the meaning of "unregistered
shares" and know that they are not freely tradeable;
4. That any stock certificate issued by you to me in
connection with the shares being acquired shall be imprinted with
a legend restricting the sale, assignment, hypothecation or other
disposition unless it can be made in accordance with applicable
laws, rules and regulations;
5. I agree that the stock transfer records of your
Company shall reflect that I have requested the Company not to
effect any transfer of any stock certificate representing any of
the shares being acquired unless I shall first have obtained an
opinion of legal counsel to the effect that the shares may be
sold in accordance with applicable laws, rules and regulations,
and I understand that any opinion must be from legal counsel
satisfactory to the Company and, regardless of any opinion, I
understand that the exemption covered by any opinion must in fact
be applicable to the shares;
6. That I shall not sell, offer to sell, transfer,
assign, hypothecate or make any other disposition of any interest
in the shares being acquired except as may be pursuant to any
applicable laws, rules and regulations;
7. I fully understand that my shares which are being
exchanged for shares of the Company are "risk capital," and I am
fully capable of bearing the economic risks attendant to this
investment, without qualification; and
8. I also understand that without approval of counsel
for Net Tel, all shares of Net Tel to be issued and delivered to
me in exchange for my shares of Sierra Internet, Inc. shall be
represented by one stock certificate only and which such stock
certificate shall be imprinted with the following legend or a
reasonable facsimile thereof on the front and reverse sides
thereof:
The shares of stock represented by this
certificate have not been registered under
the Securities Act of 1933, as amended, and
may not be sold or otherwise transferred
unless compliance with the registration
provisions of such Act has been made or
unless availability of an exemption from such
registration provisions has been established,
or unless sold pursuant to Rule 144 under the
Act.
Any request for more than one stock certificate must be
accompanied by a letter signed by the requesting stockholder
setting forth all relevant facts relating to the request. Net
Tel will attempt to accommodate any stockholders' request where
Net Tel views the request is made for valid business or personal
reasons so long as in the sole discretion of Net Tel, the
granting of the request will not facilitate a "public"
distribution of unregistered shares of common voting stock of Net
Tel.
You are requested and instructed to issue a stock
certificate as follows, to-wit:
118,182 Shares
Anthony Prestigiacomo and Marilyn Presitgiacomo JTRS
P. O. Box 314
Genoa, Nevada 89411
11,818 shares
Anthony F. Prestigiacomo
P. O. Box 314
Genoa, Nevada 89411
Dated August 24, 1996
by:/ss/Anthony Prestigiacomo
------------------------------
/ss/Marilyn Prestigiacomo
------------------------------
by:/ss/Anthony F. Prestigiacomo
-------------------------------
EXHIBIT G
CERTIFICATE OF OFFICER PURSUANT TO
AGREEMENT AND PLAN OF MERGER
The undersigned, the President of Net
Telecommunications, Incorporated, a Nevada corporation ("Net
Tel"), represents and warrants the following as required by the
Agreement and Plan of Merger (the "Plan") between Net Tel, the
Net Tel Subsidiary, Sierra Internet, Inc., a Nevada corporation
dba "Tahoe On-Line" ("Tahoe On-Line"), and the stockholders of
Tahoe On-line (the "Tahoe On-Line Stockholders"):
1. That he is the President of Net Tel and has been
authorized and empowered by its Board of Directors to execute and
deliver this Certificate to Tahoe On-Line and the Tahoe On-Line
Stockholders.
2. Based on his personal knowledge, information,
belief and opinions of counsel for Net Tel regarding the Plan:
(i) All representations and warranties of Net Tel
contained within the Plan are true and
correct;
(ii) Net Tel has complied with all terms and
provisions required of it pursuant to the
Plan; and
(iii) There have been no material adverse changes
in the financial position of Net Tel as set
forth in its financial statements for the
periods ended December 31, 1995, March 31,
1996, and June 30, 1996, except as set forth
in Exhibit C to the Plan.
NET TELECOMMUNICATIONS, INCORPORATED
By:/ss/Michael W. Gorts
-------------------------
President
EXHIBIT H
CERTIFICATE OF OFFICER PURSUANT TO
AGREEMENT AND PLAN OF MERGER
The undersigned, the President of Sierra Internet,
Inc., a Nevada corporation dba "Tahoe On-Line" ("Tahoe On-Line"),
represents and warrants the following as required by the
Agreement and Plan of Merger (the "Plan") between Tahoe On-Line,
the stockholders of Tahoe On-Line (the "Tahoe On-Line
Stockholders") and Net Telecommunications, Incorporated, a Nevada
corporation ("Net Tel"), and the Net Tel Subsidiary:
1. That he is the President of Tahoe On-Line and has
been authorized and empowered by its Board of Directors to
execute and deliver this Certificate to Net Tel.
2. Based on his personal knowledge, information,
belief:
(i) All representations and warranties of Tahoe
On-Line contained within the Plan are true
and correct;
(ii) Tahoe On-Line has complied with all terms and
provisions required of it pursuant to the
Plan; and
(iii) There have been no material adverse changes
in the financial position of Tahoe On-Line as
set forth in its profit and loss statement
for the period beginning January and ended
December 31, 1995, except as set forth in
Exhibit E to the Plan.
SIERRA INTERNET, INC.
By:/ss/Anthony Prestigiacomo
------------------------------
President
By:/ss/Anthony Prestigiacomo
------------------------------
Individually
EXHIBIT I
Finders
None.
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Plan") is made
this 26th day of August, 1996, by and between Net
Telecommunications, Incorporated, a Nevada corporation ("Net Tel");
a wholly-owned subsidiary to be formed by Net Tel (the "Net Tel
Subsidiary"); Global Tours, Inc., a Nevada corporation ("Global
Tours"); and the persons listed in Exhibit A hereof, who are the
owners of record of all of the outstanding securities of Global
Tours (the "Global Tours Stockholders");
W I T N E S S E T H :
WHEREAS, the respective Boards of Directors of Net Tel
and Global Tours have adopted certain resolutions whereby the Net
Tel Subsidiary and Global Tours will merge in a "forward triangular
merger" pursuant to the provisions of Sections 368(a)(1) and
368(a)(2)(D) of the Internal Revenue Code and the applicable
provisions of the Nevada Revised Statutes, and whereby the Global
Tours Stockholders will receive shares of common stock of Net Tel
in consideration of such merger; and
WHEREAS, the Net Tel Subsidiary shall be the surviving
corporation under the merger, as contemplated by this Plan;
NOW, THEREFORE, in consideration of the premises and the
mutual representations, covenants and agreements herein, the
parties hereto do hereby agree as follows, to-wit:
Section 1
Plan of Merger
1.1 Merger and Surviving Corporation. Global Tours
will merge into the Net Tel Subsidiary, with the Net Tel Subsidiary
being the "Surviving Corporation"; the separate existence of Global
Tours shall cease, and the name of the Surviving Corporation shall
become "Global Tours, Inc." Until amended, modified or otherwise
altered, the Articles of Incorporation of the Net Tel Subsidiary
shall continue to be the Articles of Incorporation of the Surviving
Corporation; and the Bylaws of the Net Tel Subsidiary shall
continue to be the Bylaws of the Surviving Corporation.
1.2 Share Conversion. Each outstanding or subscribed
share of common stock of Global Tours (the "Global Tours Shares")
shall, upon the effective date of the Plan, be converted into
322.580645 shares of common stock of Net Tel, amounting to 500,000
shares in the aggregate, as outlined in Exhibit A; all fractional
shares shall be rounded to the nearest whole share.
1.3 Survivor's Succession to Corporate Rights. The
Surviving Corporation shall thereupon and thereafter possess all
rights, privileges, powers and franchises of a public as well of a
private nature, and be subject to all of the restrictions,
disabilities and duties of Global Tours; and all and singular, the
rights, privileges, powers and franchises of Global Tours, and all
property, real, personal and mixed, and all debts due to Global
Tours on whatever account, as well for stock subscriptions as all
other things in action or belonging to Global Tours shall be vested
in the Surviving Corporation; and all property, rights, privileges,
powers and franchises, and all and every other interest shall be
thereafter as effectually the property of the Surviving Corporation
as they were of Global Tours, and the title to any real estate
vested by deed or otherwise in Global Tours shall not revert or be
in any way impaired by reason of the Plan; but all rights of
creditors and all liens upon any property of Global Tours shall be
preserved unimpaired, and all debts, liabilities and duties of
Global Tours shall thenceforth attach to the Surviving Corporation
and may be enforced against it to the same extent as if said debts,
liabilities and duties had been incurred or contracted by it.
1.4 Survivor's Succession to Corporate Acts, Plans,
Contracts, etc. All corporate acts, plans, policies, contracts,
approvals and authorizations of Global Tours and its stockholders,
its Board of Directors, committees elected or appointed by the
Board of Directors, officers and agents, which were valid and
effective immediately prior to the effective time of the Plan,
shall be taken for all purposes as the acts, plans, policies,
contracts, approvals and authorizations of the Surviving
Corporation and shall be as effective and binding thereon as the
same were with respect to Global Tours. The employees of Global
Tours shall become the employees of the Surviving Corporation and
continue to be entitled to the same rights and benefits which they
enjoyed as employees of Global Tours.
1.5 Survivor's Rights to Assets, Liabilities, Reserves,
etc. The assets, liabilities, reserves and accounts of Global
Tours shall be recorded on the books of the Surviving Corporation
at the amounts at which they, respectively, shall then be carried
on the books of Global Tours, subject to such adjustments or
eliminations of intercompany items as may be appropriate in giving
effect to the Plan.
1.6 Resignations of Present Directors and Executive
Officers of the Surviving Corporation and Designation of New
Directors and Executive Officers. On Closing, with the exception
of Michael W. Gorts, the present directors and executive officers
of the Net Tel Subsidiary shall resign, in seriatim, and designate
the directors and executive officers of Global Tours to serve in
their place and stead, until the next respective annual meetings of
the stockholders and Board of Directors of Net Tel and the
Surviving Corporation, and until their respective successors shall
be elected and qualified or until their respective prior
resignations or terminations. Not less than one member of the
Board of Directors of Net Tel shall serve on the Board of Directors
of the Surviving Corporation at all times.
1.7 Principal Office. The principal executive office of
the Surviving Corporation shall be located at 8170 West Sahara
Avenue, Suite 203, Las Vegas, Nevada 89117. The Surviving
Corporation shall also maintain a registered office in the State of
Nevada at the same address. The Surviving Corporation shall also
maintain an executive office at 3595 South Polaris, Suite 102, Las
Vegas, Nevada 89103.
1.8 Adoption. The Plan shall be adopted by the Board of
Directors of Net Tel as the sole stockholder of the Net Tel
Subsidiary, and by all of the Global Tours Stockholders.
1.9 Dissenters' Rights and Notification. As the Plan
requires the affirmative vote of all of the outstanding voting
securities of the Net Tel Subsidiary and Global Tours, and the
Nevada Revised Statutes do not require a vote of Net Tel
stockholders, dissenters' rights are not applicable under the Plan;
1.10 Delivery of Certificates by the Global Tours
Stockholders. The transfer of the Global Tours Shares by the
Global Tours Stockholders shall be effected by the delivery to Net
Tel or its transfer agent of certificates representing the Global
Tours Shares endorsed in blank or accompanied by stock powers
executed in blank, with all signatures witnessed or guaranteed to
the satisfaction of Net Tel and the Net Tel Subsidiary and with any
necessary transfer taxes and other revenue stamps affixed and
acquired at the expense of the Global Tours Stockholders, and on
receipt thereof to the satisfaction of the Surviving Corporation,
stock certificates representing shares in Net Tel as outlined in
Exhibit A shall be issued and delivered to the Global Tours
Stockholders; as a condition to the exchange of the Global Tours
Shares, Net Tel and the Surviving Corporation shall require the
Global Tours Stockholders to execute and deliver and Investment
Letter as outlined in Section 4.12 hereof, acknowledging, among
other things, that the shares of Net Tel to be received in exchange
for the Global Tours Shares are "unregistered" and "restricted"
securities which have not been registered with the Securities and
Exchange Commission or any state regulatory agency, and which must
be so registered prior to public sale by the Global Tours
Stockholders, unless an exemption from such registration is
available for any such sale.
1.11 Further Assurances. At the Closing and from time to
time thereafter, the parties shall execute such additional
instruments and take such other action as may be reasonably
required or necessary to carry out the terms and provisions hereof.
1.12 Effective Date. The Effective Date of the Plan
shall be the date when the Articles of Merger are filed and
accepted by the Secretary of State of the State of Nevada and at
such time as all applicable provisions of the Nevada Revised
Statutes have been met.
Section 2
Closing
The Closing contemplated by Section 1.1 shall be held at
the principal executive offices of the Surviving Corporation as
outlined in Section 1.7 hereof, not later than ten days following
the date of this Plan, unless another place or time is agreed upon
in writing by the parties. The Closing may be accomplished by
wire, express mail or other courier service, conference telephone
communications or as otherwise agreed by the respective parties or
their duly authorized representatives.
Section 3
Representations and Warranties of Net Tel and the Net Tel
Subsidiary
Net Tel and the Net Tel Subsidiary represent and warrant
to, and covenant with, the Global Tours Stockholders and Global
Tours as follows:
3.1 Corporate Status. Net Tel is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Nevada and is licensed or qualified as a foreign
corporation in all states in which the nature of its business or
the character or ownership of its properties makes such licensing
or qualification necessary. Net Tel is a publicly held company,
having lawfully offered and sold a portion of its securities to
residents of the State of Utah pursuant to an Application of
Registration of Securities filed with the Utah Securities Division,
and an S-18 Registration Statement filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended;
Net Tel is "current" in the filing of all reports required to be
filed by it with the Securities and Exchange Commission, copies of
which have been delivered to the Global Tours Stockholders and
Global Tours, and which such reports are true and correct in every
material respect; and the securities of Net Tel are currently
listed on the OTC Bulletin Board of the National Association of
Securities Dealers, Inc. (the "NASD").
The Net Tel Subsidiary will be organized under the laws
of the State of Nevada immediately following the execution and
delivery of this Plan, by the filing of the Articles of
Incorporation attached hereto as Exhibit B.
3.2 Capitalization. The authorized capital stock of Net
Tel consists of 50,000,000 shares of common voting stock, having a
par value of $0.001 per share, of which approximately 8,600,000
shares are outstanding, all fully paid and non-assessable; except
as may be provided herein, there are no outstanding options,
warrants or calls pursuant to which any person has the right to
purchase any authorized and unissued capital stock of Net Tel.
The capitalization of the Net Tel Subsidiary shall be as
set forth in Exhibit B, and except as provided in this Plan, there
are no outstanding options, warrants or calls pursuant to which any
person has the right to purchase any authorized and unissued
capital stock of the Net Tel Subsidiary.
3.3 Financial Statements. The audited financial
statements of Net Tel furnished to the Global Tours Stockholders
and Global Tours, consisting of a balance sheet dated December 31,
1995, and a related statement of income for the period then ended,
attached hereto as Exhibit C and incorporated herein by reference,
and an unaudited balance sheet and income statement for the period
ended June 30, 1996, attached hereto as Exhibit C-1 and
incorporated herein by reference, are correct and fairly present
the financial condition of Net Tel at such dates and for the
periods involved; such statements were prepared in accordance with
generally accepted accounting principles consistently applied, and
no material change has occurred in the matters disclosed therein,
except as indicated in Exhibit D, which is attached hereto and
incorporated herein by reference. Such financial statements do not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein not
misleading.
3.4 Undisclosed Liabilities. Net Tel has no liabilities
of any nature except to the extent reflected or reserved against in
its balance sheets, whether accrued, absolute, contingent or
otherwise, including, without limitation, tax liabilities and
interest due or to become due, except as set forth in Exhibit D.
3.5 Interim Changes. Since the date of its balance
sheets, except as set forth in Exhibit D, there have been no (1)
changes in financial condition, assets, liabilities or business of
Net Tel which, in the aggregate, have been materially adverse; (2)
damages, destruction or losses of or to property of Net Tel,
payments of any dividend or other distribution in respect of any
class of stock of Net Tel, or any direct or indirect redemption,
purchase or other acquisition of any class of any such stock; or
(3) increases paid or agreed to in the compensation, retirement
benefits or other commitments to employees.
3.6 Title to Property. Net Tel has good and marketable
title to all properties and assets, real and personal, reflected in
its balance sheets, and the properties and assets of Net Tel are
subject to no mortgage, pledge, lien or encumbrance, except for
liens shown therein or in Exhibit D, with respect to which no
default exists.
3.7 Litigation. There is no litigation or proceeding
pending, or to the knowledge of Net Tel, threatened, against or
relating to Net Tel, its properties or business, except as set
forth in Exhibit D. Further, no officer, director or person who
may be deemed to be an affiliate of Net Tel is party to any
material legal proceeding which could have an adverse effect on the
Company (financial or otherwise), and none is party to any action
or proceeding wherein any has an interest adverse to Net Tel.
3.8 Books and Records. From the date of this Plan to
the Closing, Net Tel will (1) give to the Global Tours Stockholders
and Global Tours or their respective representatives full access
during normal business hours to all of its offices, books, records,
contracts and other corporate documents and properties so that the
Global Tours Stockholders and Global Tours or their respective
representatives may inspect and audit them; and (2) furnish such
information concerning the properties and affairs of Net Tel as the
Global Tours Stockholders and Global Tours or their respective
representatives may reasonably request.
3.9 Tax Returns. Net Tel has filed all federal and
state income or franchise tax returns required to be filed or has
received currently effective extensions of the required filing
dates.
3.10 Confidentiality. Until the Closing (and thereafter
if there is no Closing), Net Tel and its representatives will keep
confidential any information which they obtain from the Global
Tours Stockholders or from Global Tours concerning the properties,
assets and business of Global Tours . If the transactions
contemplated by this Plan are not consummated by August 23, 1996,
Net Tel will return to Global Tours all written matter with respect
to Global Tours obtained by Net Tel in connection with the
negotiation or consummation of this Plan.
3.11 Corporate Authority. Net Tel has full corporate
power and authority to enter into this Plan and to carry out its
obligations hereunder and will deliver to the Global Tours
Stockholders and Global Tours or their respective representatives
at the Closing a certified copy of resolutions of its Board of
Directors authorizing execution of this Plan by its officers and
performance thereunder.
3.12 Due Authorization. The execution of this Plan and
performance by Net Tel hereunder has been duly authorized by all
requisite corporate action on the part of Net Tel, and this Plan
constitutes a valid and binding obligation of Net Tel and
performance hereunder will not violate any provision of the
Articles of Incorporation, Bylaws, agreements, mortgages or other
commitments of Net Tel.
3.13 Environmental Matters. Net Tel has no knowledge of
any assertion by any governmental agency or other regulatory
authority of any environmental lien or action, or of any cause for
any such lien or action.
3.14 Access to Information Regarding Global Tours.
Net Tel and the Net Tel Subsidiary acknowledge that they
have been delivered copies of what has been represented to be
documentation containing all material information respecting Global
Tours and its present and contemplated business operations,
potential acquisitions, management and other factors; that they
have had a reasonable opportunity to review such documentation and
discuss it, to the extent desired, with their legal counsel,
directors and executive officers; that they have had, to the extent
desired, the opportunity to ask questions of and receive responses
from the directors and executive officers of Global Tours, and with
the legal and accounting firms of Global Tours, with respect to
such documentation; and that to the extent requested, all questions
raised have been answered to their complete satisfaction.
Section 4
Representations, Warranties and Covenants of Global Tours and the
Global Tours Stockholders
Global Tours and the Global Tours Stockholders represent
and warrant to, and covenant with, Net Tel and the Net Tel
Subsidiary as follows:
4.1 Global Tours Shares. The Global Tours Stockholders
are the record and beneficial owners of the Global Tours Shares,
free and clear of adverse claims of third parties; and Exhibit A
correctly sets forth the name, address and number of Global Tours
Shares owned by the Global Tours Stockholders.
4.2 Corporate Status. Global Tours is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Nevada and is licensed or qualified as a
foreign corporation in all states in which the nature of its
business or the character or ownership of its properties makes such
licensing or qualification necessary.
4.3 Capitalization. The authorized capital stock of
Global Tours consists of 25,000 shares of common voting stock with
no par value per share, of which 1,550 shares are issued and
outstanding, all fully paid and non-assessable; except as may be
provided herein, there are no outstanding options, warrants or
calls pursuant to which any person has the right to purchase any
authorized and unissued capital stock of Global Tours.
4.4 Financial Statements. The unaudited financial
statements of Global Tours furnished to Net Tel, consisting of a
balance sheet for the year ended December 31, 1995, and a profit
and loss statement for the period then ended, attached hereto as
Exhibit E and incorporated herein by reference, are correct and
fairly present the financial condition of Global Tours at such
dates and for the periods involved; such statements were prepared
in accordance with generally accepted accounting principles
consistently applied, and no material change has occurred in the
matters disclosed therein, except as indicated in Exhibit F, which
is attached hereto and incorporated herein by reference. Such
financial statements do not contain any untrue statement of a
material fact or omit to state a material fact necessary to make
the statements therein not misleading.
4.5 Undisclosed Liabilities. Global Tours has no
material liabilities of any nature except to the extent reflected
or reserved against in the balance sheet, whether accrued,
absolute, contingent or otherwise, including, without limitation,
tax liabilities and interest due or to become due, except as set
forth in Exhibit F.
4.6 Interim Changes. Since the date of its balance
sheet, except as set forth in Exhibit F, there have been no (1)
changes in the financial condition, assets, liabilities or business
of Global Tours which, in the aggregate, have been materially
adverse; (2) damages, destruction or loss of or to the property of
Global Tours, payment of any dividend or other distribution in
respect of the capital stock of Global Tours, or any direct or
indirect redemption, purchase or other acquisition of any such
stock; or (3) increases paid or agreed to in the compensation,
retirement benefits or other commitments to employees.
4.7 Title to Property. Global Tours has good and
marketable title to all properties and assets, real and personal,
proprietary or otherwise, reflected in its balance sheet, and the
properties and assets of Global Tours are subject to no mortgage,
pledge, lien or encumbrance, except for liens shown therein or in
Exhibit F, with respect to which no default exists.
4.8 Litigation. There is no litigation or proceeding
pending, or to the knowledge of Global Tours, threatened, against
or relating to Global Tours, its properties or business, except as
set forth in Exhibit F. Further, no officer, director or person
who may be deemed to be an affiliate of Global Tours is party to
any material legal proceeding which could have an adverse effect on
Global Tours (financial or otherwise), and none is party to any
action or proceeding wherein any has an interest adverse to Global
Tours.
4.9 Books and Records. From the date of this Plan to
the Closing, the Global Tours Stockholders will cause Global Tours
to (1) give to Net Tel and its representatives full access during
normal business hours to all of its offices, books, records,
contracts and other corporate documents and properties so that Net
Tel may inspect and audit them; and (2) furnish such information
concerning the properties and affairs of Global Tours as Net Tel
may reasonably request.
4.10 Tax Returns. Global Tours has filed all federal and
state income or franchise tax returns required to be filed or has
received currently effective extensions of the required filing
dates.
4.11 Confidentiality. Until the Closing (and
continuously if there is no Closing), the Global Tours Stockholders
and Global Tours and their respective representatives will keep
confidential any information which they obtain from Net Tel
concerning its properties, assets and business. If the
transactions contemplated by this Plan are not consummated by
August 23, 1996, the Global Tours Stockholders and Global Tours
will return to Net Tel all written matter with respect to Net Tel
obtained by them in connection with the negotiation or consummation
of this Plan.
4.12 Investment Intent. The Global Tours Stockholders
are acquiring the shares to be delivered to them under this Plan
for investment and not with a view to the sale or distribution
thereof, and the Global Tours Stockholders have no commitment or
present intention to dispose of the Net Tel common stock being
received under the Plan. The Global Tours Stockholders shall
execute and deliver to Net Tel, as a condition to the Closing, an
Investment Letter attached hereto as Exhibit G and incorporated
herein by reference.
4.13 Corporate Authority. Global Tours has full
corporate power and authority to enter into this Plan and to carry
out its obligations hereunder and will deliver to Net Tel or its
representatives at the Closing a certified copy of resolutions of
its Board of Directors authorizing execution of this Plan by its
officers and performance thereunder.
4.14 Due Authorization. The execution of this Plan and
performance by Global Tours hereunder have been duly authorized by
all requisite corporate action on the part of Global Tours, and
this Plan constitutes a valid and binding obligation of Global
Tours and performance hereunder will not violate any provision of
the Articles of Incorporation, Bylaws, agreements, mortgages or
other commitments of Global Tours.
4.15 Environmental Matters. Global Tours has no
knowledge of any assertion by any governmental agency or other
regulatory authority of any environmental lien or action, or of any
cause for any such lien or action.
4.16 Access to Information Regarding Net Tel. The Global
Tours Stockholders and Global Tours acknowledge that they have been
delivered copies of what has been represented to be documentation
containing all material information respecting Net Tel and its
present and contemplated business operations, management and other
factors, all in the form of annual and quarterly reports filed by
Net Tel with the Securities and Exchange Commission; that they have
had a reasonable opportunity to review such documentation and
discuss it, to the extent desired, with their legal counsel,
directors and executive officers; that they have had, to the extent
desired, the opportunity to ask questions of and receive responses
from the directors and executive officers of Net Tel, and with the
legal and accounting firms of Net Tel, with respect to such
documentation; and that to the extent requested, all questions
raised have been answered to their complete satisfaction.
Section 5
Conduct of Global Tours Pending the Closing
Except as otherwise provided herein, Global Tours and the
Global Tours Stockholders agree that Global Tours will conduct
itself in the following manner pending the Closing:
5.1 Certificate of Incorporation and Bylaws. No change
will be made in the Certificate of Incorporation or Bylaws of
Global Tours.
5.2 Capitalization, etc. Global Tours will not make any
change in its authorized or issued shares of any class, declare or
pay any dividend or other distribution, or issue, encumber,
purchase or otherwise acquire any of its shares of any class.
5.3 Conduct of Business. Global Tours will use its best
efforts to maintain and preserve its business organization,
employee relationships and good will intact, and will not, without
the written consent of Net Tel, enter into any material commitments
except in the ordinary course of business.
Section 6
Conduct of Net Tel Pending the Closing
Except as otherwise provided herein, Net Tel and the Net
Tel Subsidiary agree that Net Tel will conduct itself in the
following manner pending the Closing:
6.1 Certificate of Incorporation and Bylaws. No change
will be made in the Certificate of Incorporation or Bylaws of Net
Tel.
6.2 Capitalization, etc. Net Tel will not make any
change in its authorized or issued shares, declare or pay any
dividend or other distribution, or issue, encumber, purchase or
otherwise acquire any of its shares of any class.
6.3 Conduct of Business. Net Tel will use its best
efforts to maintain and preserve its business organization,
employee relationships and good will intact, and will not, without
the written consent of Global Tours, enter into any material
commitments except in the ordinary course of business.
Section 7
Conditions Precedent to Obligations of the Global Tours
Stockholders and Global Tours
All obligations of the Global Tours Stockholders and
Global Tours under this Plan are subject, at their option, to the
fulfillment, before or at the Closing, of each of the following
conditions:
7.1 Representations and Warranties True at Closing. The
representations and warranties of Net Tel and the Net Tel
Subsidiary contained in this Plan shall be deemed to have been made
again at and as of the Closing and shall then be true in all
material respects and shall survive the Closing.
7.2 Due Performance. Net Tel and the Net Tel Subsidiary
shall have performed and complied with all the terms and conditions
required by this Plan to be performed or complied with by them
before the Closing.
7.3 Officers' Certificate. Global Tours and the Global
Tours Stockholders shall have been furnished with a certificate
signed by the President Net Tel, attached hereto as Exhibit H and
incorporated herein by reference, dated as of the Closing,
certifying (1) to the effects set out in Sections 6.1 and 6.2; and
(2) that since the date of the financial statements (Exhibits C and
C-1 hereto), there has been no material adverse change in the
financial condition, business or properties of Net Tel, taken as a
whole.
7.4 Opinion of Counsel of Net Tel. The Global Tours
Stockholders and Global Tours shall have received an opinion of
counsel for Net Tel, dated as of the Closing, to the effect that
(1) the representations of Sections 3.1, 3.2 and 3.12 are correct;
(2) except as specified in the opinion, counsel knows of no
inaccuracy in the representations in 3.5, 3.6 or 3.7; and (3) the
shares of Net Tel to be issued to the Global Tours Stockholders
under this Plan will, when so issued, be validly issued, fully paid
and non-assessable.
Section 8
Conditions Precedent to Obligations of Net Tel
All obligations of Net Tel and the Net Tel Subsidiary
under this Plan are subject, at their option, to the fulfillment,
before or at the Closing, of each of the following conditions:
8.1 Representations and Warranties True at Closing. The
representations and warranties of Global Tours and the Global Tours
Stockholders contained in this Plan shall be deemed to have been
made again at and as of the Closing and shall then be true in all
material respects and shall survive the Closing.
8.2 Due Performance. The Global Tours Stockholders and
Global Tours shall have performed and complied with all the terms
and conditions required by this Plan to be performed or complied
with by them before the Closing.
8.3 Officers' and Stockholders' Certificate. Net Tel
shall have been furnished with a certificate signed by the
President of Global Tours and the Global Tours Stockholders,
attached hereto as Exhibit I and incorporated herein by reference,
dated as of the Closing, certifying (1) to the effects set out in
Sections 5.1 and 5.2; and (2) that since the date of the financial
statements (Exhibit E), there has been no material adverse change
in the financial condition, business or properties of Global Tours
taken as a whole.
8.4 Opinion of Counsel of Global Tours. Net Tel shall
have received an opinion of counsel for Global Tours, dated as of
the Closing, to the effect that (1) the representations of Sections
4.2, 4.3 and 4.14 are correct; (2) except as specified in the
opinion, counsel knows of no inaccuracy in the representations in
4.6, 4.7 or 4.8; and (3) the Global Tours Shares to be delivered
to Net Tel under this Plan will, when so delivered, have been
validly issued, fully paid and non-assessable, and will be free and
clear of any liens or encumbrances.
8.5 Books and Records. The Global Tours Stockholders or
the Board of Directors of Global Tours shall have caused Global
Tours to make available all books and records of Global Tours,
including minute books and stock transfer records; provided,
however, only to the extent requested in writing by Net Tel at
Closing.
8.6 Acceptance by Stockholders. The terms of this Plan
shall have been approved by the Global Tours Stockholders as
evidenced by their signatures on Exhibit G and on the signature
page hereof.
Section 9
Termination
Prior to Closing, this Plan may be terminated (1) by
mutual consent in writing; (2) by either the Directors of Net Tel
or the Global Tours Stockholders and Global Tours if there has been
a material misrepresentation or material breach of any warranty or
covenant by the other party; or (3) by either the Directors of Net
Tel or the Global Tours Stockholders and Global Tours if the
Closing shall not have taken place, unless adjourned to a later
date by mutual consent in writing, by the date fixed in Section 2.
Section 10
Survival and Indemnity
10.1 Survival of Representations, Warranties, Covenants
and Agreements. The representations, warranties, covenants and
agreements contained herein shall survive the Closing without
regard to any action taken pursuant to this Plan, including without
limitation, any investigation made by the party asserting any
breach thereof, and shall continue in full force and effect for
three years after the Closing.
10.2 Indemnity from Net Tel and the Net Tel Subsidiary.
Net Tel and the Net Tel Subsidiary agree to indemnify and hold
Global Tours and the Global Tours Stockholders harmless against and
in respect of:
(a) Any damage, liability, deficiency, loss, cost,
expense or claim arising out of or resulting from
(i) any defect in title, (ii) any misrepresentation
or omission by Net Tel or the Net Tel Subsidiary
herein or in any exhibit hereto, (iii) any
materially misleading information furnished by Net
Tel or the Net Tel Subsidiary herein or in any
exhibit hereto, (iv) any breach by Net Tel or the
Net Tel Subsidiary of any representation, warranty
or covenant herein or in any exhibit hereto, or (v)
any debt or other obligation of Net Tel or the Net
Tel Subsidiary existing at or prior to the Closing
or arising thereafter in connection with events
occurring prior to the Closing (to the extent only
that such debt or obligation is attributable to
such events prior to the Closing); and
(b) All reasonable costs and expenses (including
reasonable attorneys' fees) incurred by Global
Tours or the Global Tours Stockholders in
connection with any action, suit, proceeding,
demand, assessment or judgment incident to any of
the matters indemnified against in this Section
10.2.
10.3 Indemnity from Global Tours and Global Tours
Stockholders. Global Tours the Global Tours Stockholders agree to
indemnify and hold Net Tel and the Net Tel Subsidiary harmless from
and against and in respect of:
(a) Any damage, liability, deficiency, loss, cost,
expense or claim arising out of or resulting from
(i) the breach of any representation, warranty or
covenant by Global Tours or the Global Tours
Stockholders herein or in any exhibit hereto (ii)
any misrepresentation or omission by Global Tours
or the Global Tours Stockholders herein or in any
exhibit hereto or (iii) any materially misleading
information furnished by Global Tours or the Global
Tours Stockholders herein or in any exhibit hereto;
and
(b) All reasonable costs and expenses (including
reasonable attorneys' fees) incurred by Net Tel and
the Net Tel Subsidiary in connection with any
action, suit, proceeding, demand, assessment, or
judgment incident to any of the matters indemnified
against in this Section 10.3.
10.4 Not Exclusive Remedy. Any right of indemnity of any
party pursuant to this Section 10 shall be in addition to and shall
not operate as a limitation on any other right to indemnity of such
party pursuant to this Plan, any other document or instrument
executed in connection with the consummation of the transaction
contemplated hereby, or otherwise.
Section 11
General Provisions
11.1 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 Plan.
11.2 Waiver. Any failure on the part of any party hereto
to comply with any of their respective obligations, agreements or
conditions hereunder may be waived in writing by the party to whom
such compliance is owed.
11.3 Brokers. Except as otherwise shown in Exhibit J,
each party represents to the other parties hereunder that no broker
or finder has acted for them in connection with this Plan, and
agrees to indemnify and hold harmless the other parties against any
fee, loss or expense arising out of claims by brokers or finders
employed or alleged to have been employed by either of them.
11.4 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, as follows:
If to Net Tel: Michael W. Gorts
8170 West Sahara Avenue, Suite 203
Las Vegas, Nevada 89117
With a copy to: Leonard W. Burningham, Esq.
455 East 500 South, Suite 205
Salt Lake City, Utah 84111
If to Global Tours 3595 South Polaris, Suite 102
or the Global Tours Las Vegas, Nevada 89103
Stockholders:
11.5 Entire Agreement. This Plan constitutes the entire
agreement between the parties and supersedes and cancels any other
agreement, representation, or communication, whether oral or
written, between the parties hereto relating to the transactions
contemplated herein or the subject matter hereof.
11.6 Headings. The section and subsection headings in
this Plan are inserted for convenience only and shall not affect in
any way the meaning or interpretation of this Plan.
11.7 Governing Law. This Plan shall be governed by and
construed and enforced in accordance with the laws of the State of
Nevada, except to the extent pre-empted by federal law, in which
event (and to that extent only), federal law shall govern.
11.8 Assignment. This Plan shall inure to the benefit
of, and be binding upon, the parties hereto and their successors
and assigns; provided however, that any assignment by any party of
any rights under this Plan without the prior written consent of the
other parties shall be void.
11.9 Counterparts. This Plan 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.
11.10 Default. In the event of default hereunder,
the defaulting party shall be liable to the non-defaulting party
for all costs and reasonable attorney's fees incurred in the
enforcement of any of the provisions hereof.
11.11 Registration Rights of Global Tours
Stockholders. Unless the Securities and Exchange Commission's
proposal to reduce the two year holding period of Rule 144 to one
year is effective within one year from the date of the Plan, that
Net Tel agree to register up to one-half of the securities being
issued under the Plan with the Securities and Exchange Commission,
or, at its option, to find an interested party to purchase these
securities or to offer to buy this amount of such securities at the
then bid price for such shares on the OTC Bulletin Board.
IN WITNESS WHEREOF, the parties have executed this
Agreement and Plan of Merger effective the day and year first above
written.
NET TELECOMMUNICATIONS, INCORPORATED
By:/ss/Michael W. Gorts
---------------------------
President
GLOBAL TOURS, INC.
By:/ss/Chris Fanelli
---------------------------
President
GLOBAL TOURS STOCKHOLDERS
/ss/Chris Fanelli
/ss/Art Lurie
EXHIBIT A
Number of Shares
Number of Shares of Stock of
Owned of Net Tel to be
Name and Address Global On-Line Received in Exchange
Chris Fanelli 1,500 483,871
3595 South Polaris,
Suite #102
Las Vegas, Nevada 89103
Art Lurie 50 16,129
3595 South Polaris,
Suite #102
Las Vegas, Nevada 89103
Total: 500,000
EXHIBIT B
ARTICLES OF INCORPORATION
OF
SECOND NET TELECOMMUNICATIONS SUBSIDIARY, INCORPORATED
The undersigned natural person, acting as incorporator of the
corporation under the Nevada Revised Statutes, adopts the following
Articles of Incorporation for such corporation.
ARTICLE I
Name. The name of the corporation is "Second Net
Telecommunications Subsidiary, Incorporated" (hereinafter, the
"Corporation").
ARTICLE II
Period of Duration. The period of duration of the Corporation
is perpetual.
ARTICLE III
Purposes and Powers. The purpose for which the Corporation is
organized is to engage in any and all lawful business.
ARTICLE IV
Capitalization. The Corporation shall have the authority to
issue 1000 shares of common voting stock having a par value of $1
per share. All stock of the Corporation shall be of the same class
and shall have the same rights and preferences. Fully paid stock
of the Corporation shall not be liable for further call or
assessment. The authorized shares shall be issued at the
discretion of the Board of Directors of the Corporation.
ARTICLE V
Initial Resident Agent. The initial resident agent of the
Corporation shall be Michael W. Gorts, and the street address and
mailing address of the initial resident agent are: 8170 West Sahara
Avenue, Suite 203, Las Vegas, Nevada 89117.
ARTICLE VI
Directors. The Corporation shall be governed by a Board of
Directors consisting of no less than two directors. The number of
directors constituting the initial Board of Directors is two and
the name and street address of the persons who shall serve as
directors until their successors are elected and qualified are, to-
wit:
Michael W. Gorts
9301 Leaping Lily Lane
Las Vegas, Nevada 89129
Robert Briare
6736 Waterville Circle
Las Vegas, Nevada 89107
ARTICLE VII
Incorporator. The name and street address of the incorporator
is:
Michael W. Gorts
9301 Leaping Lily Lane
Las Vegas, Nevada 89129
ARTICLE VIII
Control Share Acquisitions. The provisions of NRS 78.378 to
78.3793, inclusive, are not applicable to the Corporation.
ARTICLE IX
Indemnification of Directors and Executive Officers. To the
fullest extent allowed by law, the directors and executive officers
of the Corporation shall be entitled to indemnification from the
Corporation for acts and omissions taking place in connection with
their activities in such capacities.
/SS/Michael W. Gorts
------------------------
STATE OF NEVADA )
:ss
COUNTY OF CLARK )
On the _____ day of August, 1996, personally appeared before
me Michael W. Gorts, who duly acknowledged to me that he is the
person who signed the foregoing instrument as incorporator; that he
has read the foregoing instrument and knows the contents thereof;
and that the contents thereof are true of his personal knowledge.
/SS/Robert T. Briare
-----------------------
Notary Public
EXHIBIT C
NET TELECOMMUNICATIONS, INCORPORATED
FINANCIAL STATEMENTS
December 31, 1995, and March 31, 1996
See Documents Incorporated by Reference
EXHIBIT C-1
NET TELECOMMUNICATIONS, INCORPORATED
FINANCIAL STATEMENTS
(Unaudited)
June 30, 1996
See Documents Incorporated by Reference
EXHIBIT D
EXCEPTIONS TO NET TEL FINANCIAL STATEMENTS
The financial statements of Net Tel for the period ended
December 31, 1995, and March 31, 1996, do not reflect the recent
Agreement and Plan of Merger (the "Net Tel Nevada Merger") between
Net Tel and Net Telecommunications, Incorporated, a Nevada
corporation, formerly known as "Long Distance International, Inc."
("Net Tel Nevada"); however, the unaudited financial statements of
Net Tel for the period ended June 30, 1996, do take into account
the completion of the Net Tel Nevada Merger. None of the financial
statements of Net Tel take into account the completion of the
Agreement and Plan of Merger ("Sierra Merger") between Net Tel and
Sierra-Net, Inc., a Nevada corporation, pursuant to which an
additional 600,000 shares of the "unregistered" and "restricted"
common stock of Net Tel were issued to the stockholders of Sierra.
Copies of the Net Tel Nevada Merger and the Sierra Merger have been
provided to Global Tours and the Global Tours Stockholders prior to
the Closing of this Plan.
Further, 500,000 and 450,000 (the 450,000 share amount is
presently being negotiated to be reduced to 200,000 shares)
"unregistered" and "restricted" shares, respectively, shall be
issued to Global Tours, Inc., a Nevada corporation ("Global
Tours"), and Las Vegas Reservations, Inc., a Nevada corporation
("Las Vegas Reservations"), pursuant to the Letters of Intent
between these respective entities and Net Tel, whereby these
entities will become wholly-owned subsidiaries of Net Tel, and all
of which were subject to the completion of the merger involving Net
Tel Nevada, and are further subject to the execution and delivery
of definitive agreements between the respective parties. Copies
of these Letters of Intent and all material documentation
respecting these entities have been provided to Global Tours and
the Global Tours Stockholders prior to the Closing under this Plan;
however, no assurance can be given that these transactions will be
completed.
Also, 130,000 "unregistered" and "restricted" shares
shall be issued to Sierra Internet, Inc., a Nevada corporation dba
Tahoe-Online ("Tahoe-Online"), pursuant to the Letter of Intent
between Tahoe-Online and Net Tel, whereby Tahoe-Online will become
a wholly-owned subsidiary of Net Tel, and which was subject to the
completion of the merger involving Net Tel Nevada, and is further
subject to the execution and delivery of a definitive agreement
between the respective parties. Copies of this Letter of Intent
and all material documentation respecting these entities have been
provided to Global Tours and the Global Tours Stockholders prior to
the Closing under this Plan; however, no assurance can be given
that this transaction will be completed.
EXHIBIT E
GLOBAL TOURS, INC.
BALANCE SHEET AND PROFIT AND LOSS STATEMENT
December 31, 1995
TEMPLETON AND TEMPLETON
{letterhead}
To the Board of Directors
Global Tours, Inc.
Las Vegas, Nevada
We have complied the accompanying statement of assets, liabilities
and stockholders' equity-income tax basis of Global Tours, Inc., (a
Corporation) as of December 31, 1995, and the related statement of
revenue, expenses and retained earnings--income tax basis for the
year ended, in accordance with Statements on Standards for
Accounting and Review Services issued by the American Institute of
Certified Public Accountants. The financial statements have been
prepared on the basis of accounting used by the Company for income
tax purposes, which is a comprehensive basis of accounting other
than generally accepted accounting principles.
A compilation is limited to presenting in the form of financial
statements information that is the representation of management.
We have not audited or reviewed the accompanying financial
statements and, accordingly, do not express an opinion or any other
form of assurance on them.
Management has elected to omit substantially all of the disclosures
ordinarily included in financial statements prepared on the income
tax basis of accounting. If the omitted disclosures were included
in the financial statements, they might influence the user's
conclusions about the Company's assets, liabilities, equity, and
the results of its operations. Accordingly, these financial
statements are not designed for those who are not informed about
such matters.
For the current year, 1996, the Company, with the consent of its
shareholders, has elected under the Internal Revenue Code to be an
S Corporation. In lieu of corporation income taxes, the
shareholders of an S corporation are taxed on their proportionate
share of the Company's taxable income. Therefore, no provision or
liability for federal income taxes has been included in these
financial statements.
/ss/Templeton & Templeton, P.C.
GLOBAL TOURS, INC.
STATEMENT OF ASSETS, LIABILITIES, AND STOCKHOLDERS' EQUITY
INCOME TAX BASIS
DECEMBER 31, 1995
(See Accompanying Accountants' Compilation Report)
ASSETS
CURRENT ASSETS
Cash in banks $11,019
PROPERTY AND EQUIPMENT
Furniture and equipment 21,068
Less: accumulated depreciation 16,700
Net property and equipment 4,368
Total Assets 15,387
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
LONG-TERM DEBT, less current portion
Total liabilities ---0---
STOCKHOLDERS' EQUITY
Common Stock 2,722
Retained Earnings 12,665
Total stockholders' equity 15,387
Total liabilities and stockholder's equity 15,387
GLOBAL TOURS, INC.
STATEMENT OF REVENUE, EXPENSES, AND RETAINED EARNINGS
INCOME TAX BASIS
FOR THE YEAR ENDED DECEMBER 31, 1995
(See Accompanying Accountants' Compilation Report)
SALES $700,870
COST OF SALES 236,687
GROSS PROFIT 464,183
OPERATING EXPENSES
Salaries and wages 310,303
Telephone and utilities 36,408
Payroll Taxes 21,812
Rent 15,408
Office supplies and Expenses 11,081
Advertising and printing 12,528
Insurance 3,814
Professional Fees 3,657
Postage and shipping 10,335
Other operating expenses 9,472
Total operating expenses 434,818
INCOME FROM OPERATIONS 29,365
OTHER EXPENSES
Depreciation 16,700
NET INCOME 12,665
Retained earnings at January 1, 1995 --0--
Retained earnings at December 31, 1995 12,665
EXHIBIT F
None.
EXHIBIT G
Net Telecommunications, Incorporated
8170 West Sahara Avenue, Suite 203
Las Vegas, Nevada 89117
Fidelity Stock Transfer Company
1800 South West Temple, Suite 301
Salt Lake City, Utah 84115
Re: Exchange of shares of Global Tours,
Inc., a Nevada corporation ("Global
Tours"), for shares of Net
Telecommunications, Incorporated, a
Nevada corporation ("Net Tel or the
"Company")
Gentlemen:
Pursuant to that certain Agreement and Plan of Merger
(the "Plan") between the undersigned, Global Tours, Net Tel, and
the Net Tel Subsidiary, I acknowledge that I have approved this
exchange; that I am aware of all of the terms and conditions of the
Plan; that I have received and personally reviewed a copy of the
Plan; the Annual Report on Form 10-KSB of Net Tel for the year
ended December 31, 1995, and the unaudited financial statements of
Net Tel for the period ended June 30, 1996 , to be included with
the Quarterly Report on Form 10-QSB for the quarter ended June 30,
1996 (to be filed with the Securities and Exchange Commission
within a few days of the date hereof); the 8-K Current Reports
respecting the Net Tel Merger and the Sierra Merger; and all
information regarding certain proposed acquisitions or mergers of
Net Tel; and I represent and warrant that no director or executive
officer of the Company or any associate of either has solicited
this exchange; that I am an "accredited investor" as that term is
known under the Rules and Regulations of the Securities and
Exchange Commission (see Exhibit "A" hereto); and/or I represent
and warrant that I have sufficient knowledge and experience to
understand the nature of the exchange, and I am fully capable of
bearing the economic risk of the loss of my entire cost basis in
the shares of Global Tours being exchanged.
I understand that you have and will make books and
records of your Company available to me for my inspection in
connection with the contemplated exchange of my shares, and that I
have been encouraged to review the information and ask any
questions I may have concerning the information of any director or
executive officer of the Company whose addresses are listed in the
aforesaid Annual Report, or of the legal and accounting firms for
the Company. I understand that the accounting firm for Net Tel is
Jones, Jensen & Co., Certified Public Accountants, 349 South 200
East, Salt Lake City, Utah 84111; Telephone #801-328-4408; or Dave
Thomson, CPA, 1980 South 300 West, Salt Lake City, Utah 84101,
Telephone #801-328-3900; and that legal counsel for Net Tel is
Leonard W. Burningham, Esq., Suite 205, Hermes Building, 455 East
500 South, Salt Lake City, Utah 84111, Telephone #801-363-7411.
I further understand that I must bear the economic risk
of ownership of any of the Net Tel shares for a long period of
time, the minimum of which will be two (2) years, as these shares
are "unregistered" shares and may not be sold unless any subsequent
offer or sale is registered with the United States Securities and
Exchange Commission or is otherwise exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Act"),
or other applicable securities laws, rules and regulations.
I intend that you rely on all of my representations made
herein and those in the personal questionnaire (if applicable) I
provided to Net Tel for use by Net Tel as they are being made to
induce you to issue me the shares of Net Tel under the Plan, and I
further represent (of my personal knowledge or by virtue of my
reliance on one or more personal representatives), and agree as
follows, to-wit:
1. That the shares being acquired are being received
for investment purposes and not with a view toward further
distribution;
2. That I have a full and complete understanding of the
phrase "for investment purposes and not with a view toward further
distribution";
3. That I understand the meaning of "unregistered
shares" and know that they are not freely tradeable;
4. That any stock certificate issued by you to me in
connection with the shares being acquired shall be imprinted with
a legend restricting the sale, assignment, hypothecation or other
disposition unless it can be made in accordance with applicable
laws, rules and regulations;
5. I agree that the stock transfer records of your
Company shall reflect that I have requested the Company not to
effect any transfer of any stock certificate representing any of
the shares being acquired unless I shall first have obtained an
opinion of legal counsel to the effect that the shares may be sold
in accordance with applicable laws, rules and regulations, and I
understand that any opinion must be from legal counsel satisfactory
to the Company and, regardless of any opinion, I understand that
the exemption covered by any opinion must in fact be applicable to
the shares;
6. That I shall not sell, offer to sell, transfer,
assign, hypothecate or make any other disposition of any interest
in the shares being acquired except as may be pursuant to any
applicable laws, rules and regulations;
7. I fully understand that my shares which are being
exchanged for shares of the Company are "risk capital," and I am
fully capable of bearing the economic risks attendant to this
investment, without qualification; and
8. I also understand that without approval of counsel
for Net Tel, all shares of Net Tel to be issued and delivered to me
in exchange for my shares of Global Tours shall be represented by
one stock certificate only and which such stock certificate shall
be imprinted with the following legend or a reasonable facsimile
thereof on the front and reverse sides thereof:
The shares of stock represented by this
certificate have not been registered under the
Securities Act of 1933, as amended, and may
not be sold or otherwise transferred unless
compliance with the registration provisions of
such Act has been made or unless availability
of an exemption from such registration
provisions has been established, or unless
sold pursuant to Rule 144 under the Act.
Any request for more than one stock certificate must be
accompanied by a letter signed by the requesting stockholder
setting forth all relevant facts relating to the request. Net Tel
will attempt to accommodate any stockholders' request where Net Tel
views the request is made for valid business or personal reasons so
long as in the sole discretion of Net Tel, the granting of the
request will not facilitate a "public" distribution of unregistered
shares of common voting stock of Net Tel.
You are requested and instructed to issue a stock
certificate as follows, to-wit:
483,871 shares
Chris Fanelli
3595 South Polaris, Suite #102
Las Vegas, Nevada 89103
Dated August 21, 1996
16,129 shares
Art Lurie
557 Bonita Ave.
Las Vegas, Nevada 89104
Dated August 28, 1996
/ss/Chris Fanelli
----------------------
/ss/Art Lurie
----------------------
EXHIBIT H
CERTIFICATE OF OFFICER PURSUANT TO
AGREEMENT AND PLAN OF MERGER
The undersigned, the President of Net Telecommunications,
Incorporated, a Nevada corporation ("Net Tel"), represents and
warrants the following as required by the Agreement and Plan of
Merger (the "Plan") between Net Tel, the Net Tel Subsidiary, Global
Tours, Inc., a Nevada corporation ("Global Tours"), and the
stockholders of Global Tours (the "Global Tours Stockholders"):
1. That he is the President of Net Tel and has been
authorized and empowered by its Board of Directors to execute and
deliver this Certificate to Global Tours and the Global Tours
Stockholders.
2. Based on his personal knowledge, information, belief
and opinions of counsel for Net Tel regarding the Plan:
(i) All representations and warranties of Net Tel
contained within the Plan are true and
correct;
(ii) Net Tel has complied with all terms and
provisions required of it pursuant to the
Plan; and
(iii) There have been no material adverse changes in
the financial position of Net Tel as set forth
in its financial statements for the periods
ended December 31, 1995, March 31, 1996, and
June 30, 1996, except as set forth in Exhibit
D to the Plan.
NET TELECOMMUNICATIONS, INCORPORATED
By:/ss/Michael W. Gorts
-------------------------
President
EXHIBIT I
CERTIFICATE OF OFFICER PURSUANT TO
AGREEMENT AND PLAN OF MERGER
The undersigned, the President of Global Tours, Inc., a
Nevada corporation ("Global Tours"), represents and warrants the
following as required by the Agreement and Plan of Merger (the
"Plan") between Global Tours, the stockholders of Global Tours
(the "Global Tours Stockholders") and Net Telecommunications,
Incorporated, a Nevada corporation ("Net Tel"), and the Net Tel
Subsidiary:
1. That he is the President of Global Tours and has
been authorized and empowered by its Board of Directors to execute
and deliver this Certificate to Net Tel.
2. Based on his personal knowledge, information,
belief:
(i) All representations and warranties of Global
Tours contained within the Plan are true and
correct;
(ii) Global Tours has complied with all terms and
provisions required of it pursuant to the
Plan; and
(iii) There have been no material adverse changes in
the financial position of Global Tours as set
forth in its balance sheet for the period
ended December 31, 1995, except as set forth
in Exhibit F to the Plan.
GLOBAL TOURS, INC.
By:/ss/Chris Fanelli
------------------------
President
/ss/Chris Fanelli
------------------------
Individually
EXHIBIT J
Finders
None.
ARTICLES OF MERGER
OF
SIERRA INTERNET, INC.
(a Nevada corporation)
AND
SIERRA-NET, INC.
(a Nevada corporation)
To the Secretary of
State of Nevada
Pursuant to the provisions of Section 92A.190 of the Nevada
Revised Statutes, it is hereby certified that:
1. The names and addresses of the merging corporations are
Sierra Internet, Inc., dba Tahoe On-Line, P. O. Box 6887,
Stateline, Nevada 89449, which is a business corporation organized
under the laws of the State of Nevada ("Sierra Internet" or "Tahoe
On-Line"), and Sierra-Net, Inc., 917 Tahoe Blvd., Suite 200,
Incline Village, Nevada 89450-3709, which is a business corporation
organized under the laws of the State of Nevada ("Sierra" or the
"Net Tel Subsidiary"), a wholly-owned subsidiary of Net
Telecommunications, Incorporated, a Nevada corporation ("Net Tel"
or "Parent Net Tel").
2. The following is the Plan of Merger (the "Plan") for
merging Sierra Internet with and into Sierra as approved by the
Board of Directors and stockholders of each of said corporations
(with the stockholders of Sierra Internet being sometimes called
the "Sierra Internet Stockholders"), pursuant to which Sierra will
be the surviving corporation:
Plan of Merger
1.1 Merger and Surviving Corporation. Tahoe On-
line will merge into the Net Tel Subsidiary, with the Net Tel
Subsidiary being the "Surviving Corporation"; the separate
existence of Tahoe On-Line shall cease, and the name of the
Surviving Corporation shall remain "Sierra-Net, Inc," and the
Surviving Corporation shall maintain the dba of "Tahoe On-
Line." Until amended, modified or otherwise altered, the
Articles of Incorporation of the Net Tel Subsidiary shall
continue to be the Articles of Incorporation of the Surviving
Corporation; and the Bylaws of the Net Tel Subsidiary shall
continue to be the Bylaws of the Surviving Corporation.
1.2 Share Conversion. Each outstanding or
subscribed share of common stock of Tahoe On-Line (the "Tahoe
On-Line Shares") shall, upon the effective date of the Plan,
be converted into 118.181818 shares of common stock of Net
Tel, amounting to 130,000 shares in the aggregate, as outlined
in Exhibit A; all fractional shares shall be rounded to the
nearest whole share.
1.3 Survivor's Succession to Corporate Rights. The
Surviving Corporation shall thereupon and thereafter possess
all rights, privileges, powers and franchises of a public as
well of a private nature, and be subject to all of the
restrictions, disabilities and duties of Tahoe On-Line; and
all and singular, the rights, privileges, powers and
franchises of Tahoe On-Line, and all property, real, personal
and mixed, and all debts due to Tahoe On-Line on whatever
account, as well for stock subscriptions as all other things
in action or belonging to Tahoe On-Line shall be vested in the
Surviving Corporation; and all property, rights, privileges,
powers and franchises, and all and every other interest shall
be thereafter as effectually the property of the Surviving
Corporation as they were of Tahoe On-Line, and the title to
any real estate vested by deed or otherwise in Tahoe On-Line
shall not revert or be in any way impaired by reason of the
Plan; but all rights of creditors and all liens upon any
property of Tahoe On-Line shall be preserved unimpaired, and
all debts, liabilities and duties of Tahoe On-Line shall
thenceforth attach to the Surviving Corporation and may be
enforced against it to the same extent as if said debts,
liabilities and duties had been incurred or contracted by it.
1.4 Survivor's Succession to Corporate Acts, Plans,
Contracts, etc. All corporate acts, plans, policies,
contracts, approvals and authorizations of Tahoe On-Line and
its stockholders, its Board of Directors, committees elected
or appointed by the Board of Directors, officers and agents,
which were valid and effective immediately prior to the
effective time of the Plan, shall be taken for all purposes as
the acts, plans, policies, contracts, approvals and
authorizations of the Surviving Corporation and shall be as
effective and binding thereon as the same were with respect to
Tahoe On-Line. The employees of Tahoe On-Line shall become
the employees of the Surviving Corporation and continue to be
entitled to the same rights and benefits which they enjoyed as
employees of Tahoe On-Line.
1.5 Survivor's Rights to Assets, Liabilities,
Reserves, etc. The assets, liabilities, reserves and accounts
of Tahoe On-Line shall be recorded on the books of the
Surviving Corporation at the amounts at which they,
respectively, shall then be carried on the books of Tahoe On-
Line, subject to such adjustments or eliminations of
intercompany items as may be appropriate in giving effect to
the Plan.
1.6 Resignations of Present Directors and Executive
Officers of the Surviving Corporation and Designation of New
Directors and Executive Officers. On Closing, with the
exception of Michael W. Gorts, the present directors and
executive officers of the Net Tel Subsidiary shall retain
their present positions, and designate the directors of Tahoe
On-Line to also serve on the Board of Directors of the Net Tel
Subsidiary, until the next respective annual meetings of the
stockholders and Board of Directors of Net Tel and the
Surviving Corporation, and until their respective successors
shall be elected and qualified or until their respective prior
resignations or terminations. Executive officers of Tahoe On-
Line may also be designated officers of a new division of
business operations previously comprising the operations of
Tahoe On-Line, prior to the completion of the Plan. Not less
than one member of the Board of Directors of Net Tel shall
serve on the Board of Directors of the Surviving Corporation
at all times.
1.7 Principal Office. The principal executive
office of the Surviving Corporation shall be located at 917
Tahoe Blvd., Suite 200, Incline Village, Nevada 89450-3709.
The Surviving Corporation shall also maintain a registered
office in the State of Nevada at the same address. The
Surviving Corporation may also maintain an address at P.O. Box
6887, Stateline, Nevada 89449.
1.8 Adoption. The Plan shall be adopted by the
Board of Directors of Net Tel as the sole stockholder of the
Net Tel Subsidiary, and by all of the Tahoe On-line
Stockholders.
1.9 Dissenters' Rights and Notification. As the
Plan requires the affirmative vote of all of the outstanding
voting securities of the Net Tel Subsidiary and Tahoe On-Line,
and the Nevada Revised Statutes do not require a vote of Net
Tel stockholders, dissenters' rights are not applicable under
the Plan;
1.10 Delivery of Certificates by the Tahoe On-line
Stockholders. The transfer of the Tahoe On-Line Shares by the
Tahoe On-line Stockholders shall be effected by the delivery
to Net Tel or its transfer agent of certificates representing
the Tahoe On-Line Shares endorsed in blank or accompanied by
stock powers executed in blank, with all signatures witnessed
or guaranteed to the satisfaction of Net Tel and the Net Tel
Subsidiary and with any necessary transfer taxes and other
revenue stamps affixed and acquired at the expense of the
Tahoe On-line Stockholders, and on receipt thereof to the
satisfaction of the Surviving Corporation, stock certificates
representing shares in Net Tel as outlined in Exhibit A shall
be issued and delivered to the Tahoe On-line Stockholders; as
a condition to the exchange of the Tahoe On-Line Shares, Net
Tel and the Surviving Corporation shall require the Tahoe On-
line Stockholders to execute and deliver and Investment Letter
as outlined in Section 4.12 hereof, acknowledging, among other
things, that the shares of Net Tel to be received in exchange
for the Tahoe On-Line Shares are "unregistered" and
"restricted" securities which have not been registered with
the Securities and Exchange Commission or any state regulatory
agency, and which must be so registered prior to public sale
by the Tahoe On-line Stockholders, unless an exemption from
such registration is available for any such sale.
1.11 Further Assurances. At the Closing and from
time to time thereafter, the parties shall execute such
additional instruments and take such other action as may be
reasonably required or necessary to carry out the terms and
provisions hereof.
1.12 Effective Date. The Effective Date of the Plan
shall be the date when the Articles of Merger are filed and
accepted by the Secretary of State of the State of Nevada and
at such time as all applicable provisions of the Nevada
Revised Statutes have been met.
3. The Plan has been approved by the respective Boards of
Directors of Parent Net Tel, Sierra and Sierra Internet and the
stockholders of Sierra and the Sierra Internet Stockholders, in
accordance with the provisions of Section 92A.120 of the Nevada
Revised Statutes; no approval of Parent Net Tel stockholders is
required under the Nevada Revised Statutes. Sierra Internet has
one class of outstanding securities, common; the Sierra Internet
Stockholders owning 100% of such securities have adopted, ratified
and approved the Plan in accordance with Section 78.320 of the
Nevada Revised Statutes; and Sierra has one class of outstanding
securities, such class being common voting stock, and Parent Net
Tel, which owns all 6,000 shares of such securities, has adopted,
ratified and approved the Plan in accordance with Section 78.320 of
the Nevada Revised Statutes.
4. The applicable provisions of the Nevada Revised Statutes
relating to the merger of Sierra Internet with and into Sierra will
have been complied with upon compliance with any of the filing and
recording requirements thereof.
5. The merger herein provided for shall become effective in
the State of Nevada on the date of filing hereof.
SIERRA INTERNET, INC.
Date: 8/24/96 By:/ss/Anthony Prestigiacomo
------------------------------
President
Date: 8/24/96 By:/ss/Marilyn Prestigiacomo
------------------------------
Secretary
STATE OF NEVADA )
) ss
COUNTY OF DOUGLAS )
Personally appeared before me this 24th day of August, 1996,
Anthony Prestigiacomo and Marilyn Prestigiacomo, who duly
acknowledged to me that they are the President and Secretary,
respectively, of Sierra Internet, Inc., and that they are
authorized to and did execute the foregoing Articles of Merger.
By:/ss/Julia A. Blair
NOTARY PUBLIC
SIERRA-NET, INC.
Date: 8/19/96 By:/ss/Michael W. Gorts
------------------------
President
Date: 8/19/96 By:/ss/Robert Briare
------------------------
Secretary
STATE OF NEVADA )
) ss
COUNTY OF CLARK )
Personally appeared before me this 19th day of August, 1996,
Michael Gorts and Robert Briare, who duly acknowledged to me that
they are the President and Secretary, respectively, of Sierra-Net,
Inc., and that they are authorized to and did execute the foregoing
Articles of Merger.
By:/ss/Lin-Belle Addington
NOTARY PUBLIC
ARTICLES OF MERGER
OF
GLOBAL TOURS, INC.
(a Nevada corporation)
AND
SECOND NET TELECOMMUNICATIONS SUBSIDIARY, INCORPORATED
(a Nevada corporation)
To the Secretary of
State of Nevada
Pursuant to the provisions of Section 92A.190 of the Nevada
Revised Statutes, it is hereby certified that:
1. The names and addresses of the merging corporations are
Global Tours, Inc., 3595 South Polaris, Suite 102, Las Vegas,
Nevada 89103, which is a business corporation organized under the
laws of the State of Nevada ("Global"), and Second Net
Telecommunications Subsidiary, Incorporated, 8170 West Sahara
Avenue, Suite 203, Las Vegas, Nevada 89117, which is a business
corporation organized under the laws of the State of Nevada
("Second Net Tel"), a wholly-owned subsidiary of Net
Telecommunications, Incorporated, a Nevada corporation ("Net Tel"
or "Parent Net Tel").
2. The following is the Plan of Merger (the "Plan") for
merging Global Tours with and into Second Net Tel as approved by
the Board of Directors and stockholders of each of said
corporations (with the stockholders of Global Tours being sometimes
called the "Global Stockholders"), pursuant to which Second Net Tel
will be the surviving corporation:
Plan of Merger
1.1 Merger and Surviving Corporation. Global Tours
will merge into Second Net Tel, with Second Net Tel being the
"Surviving Corporation"; the separate existence of Global
Tours shall cease, and the name of the Surviving Corporation
shall become "Global Tours, Inc." Until amended, modified or
otherwise altered, the Articles of Incorporation of Second Net
Tel shall continue to be the Articles of Incorporation of the
Surviving Corporation; and the Bylaws of Second Net Tel shall
continue to be the Bylaws of the Surviving Corporation.
1.2 Share Conversion. Each outstanding or
subscribed share of common stock of Global Tours (the "Global
Tours Shares") shall, upon the effective date of the Plan, be
converted into 322.580645 shares of common stock of Net Tel,
amounting to 500,000 shares in the aggregate, as outlined in
Exhibit A; all fractional shares shall be rounded to the
nearest whole share.
1.3 Survivor's Succession to Corporate Rights. The
Surviving Corporation shall thereupon and thereafter possess
all rights, privileges, powers and franchises of a public as
well of a private nature, and be subject to all of the
restrictions, disabilities and duties of Global Tours; and all
and singular, the rights, privileges, powers and franchises of
Global Tours, and all property, real, personal and mixed, and
all debts due to Global Tours on whatever account, as well for
stock subscriptions as all other things in action or belonging
to Global Tours shall be vested in the Surviving Corporation;
and all property, rights, privileges, powers and franchises,
and all and every other interest shall be thereafter as
effectually the property of the Surviving Corporation as they
were of Global Tours, and the title to any real estate vested
by deed or otherwise in Global Tours shall not revert or be in
any way impaired by reason of the Plan; but all rights of
creditors and all liens upon any property of Global Tours
shall be preserved unimpaired, and all debts, liabilities and
duties of Global Tours shall thenceforth attach to the
Surviving Corporation and may be enforced against it to the
same extent as if said debts, liabilities and duties had been
incurred or contracted by it.
1.4 Survivor's Succession to Corporate Acts, Plans,
Contracts, etc. All corporate acts, plans, policies,
contracts, approvals and authorizations of Global Tours and
its stockholders, its Board of Directors, committees elected
or appointed by the Board of Directors, officers and agents,
which were valid and effective immediately prior to the
effective time of the Plan, shall be taken for all purposes as
the acts, plans, policies, contracts, approvals and
authorizations of the Surviving Corporation and shall be as
effective and binding thereon as the same were with respect to
Global Tours. The employees of Global Tours shall become the
employees of the Surviving Corporation and continue to be
entitled to the same rights and benefits which they enjoyed as
employees of Global Tours.
1.5 Survivor's Rights to Assets, Liabilities,
Reserves, etc. The assets, liabilities, reserves and accounts
of Global Tours shall be recorded on the books of the
Surviving Corporation at the amounts at which they,
respectively, shall then be carried on the books of Global
Tours, subject to such adjustments or eliminations of
intercompany items as may be appropriate in giving effect to
the Plan.
1.6 Resignations of Present Directors and Executive
Officers of the Surviving Corporation and Designation of New
Directors and Executive Officers. On Closing, with the
exception of Michael W. Gorts, the present directors and
executive officers of Second Net Tel shall resign, in
seriatim, and designate the directors and executive officers
of Global Tours to serve in their place and stead, until the
next respective annual meetings of the stockholders and Board
of Directors of Net Tel and the Surviving Corporation, and
until their respective successors shall be elected and
qualified or until their respective prior resignations or
terminations. Not less than one member of the Board of
Directors of Net Tel shall serve on the Board of Directors of
the Surviving Corporation at all times.
1.7 Principal Office. The principal executive
office of the Surviving Corporation shall be located at 8170
West Sahara Avenue, Suite 203, Las Vegas, Nevada 89117. The
Surviving Corporation shall also maintain a registered office
in the State of Nevada at the same address. The Surviving
Corporation shall also maintain an executive office at 3595
South Polaris, Suite 102, Las Vegas, Nevada 89103.
1.8 Adoption. The Plan shall be adopted by the
Board of Directors of Net Tel as the sole stockholder of
Second Net Tel, and by all of the Global Tours Stockholders.
1.9 Dissenters' Rights and Notification. As the
Plan requires the affirmative vote of all of the outstanding
voting securities of Second Net Tel and Global Tours, and the
Nevada Revised Statutes do not require a vote of the Net Tel
stockholders, dissenters' rights are not applicable under the
Plan;
1.10 Delivery of Certificates by the Global Tours
Stockholders. The transfer of the Global Tours Shares by the
Global Tours Stockholders shall be effected by the delivery to
Net Tel or its transfer agent of certificates representing the
Global Tours Shares endorsed in blank or accompanied by stock
powers executed in blank, with all signatures witnessed or
guaranteed to the satisfaction of Net Tel and Second Net Tel
and with any necessary transfer taxes and other revenue stamps
affixed and acquired at the expense of the Global Tours
Stockholders, and on receipt thereof to the satisfaction of
the Surviving Corporation, stock certificates representing
shares in Net Tel shall be issued and delivered to the Global
Tours Stockholders; as a condition to the exchange of the
Global Tours Shares, Net Tel and the Surviving Corporation
shall require the Global Tours Stockholders to execute and
deliver an Investment Letter, acknowledging, among other
things, that the shares of Net Tel to be received in exchange
for the Global Tours Shares are "unregistered" and
"restricted" securities which have not been registered with
the Securities and Exchange Commission or any state regulatory
agency, and which must be so registered prior to public sale
by the Global Tours Stockholders, unless an exemption from
such registration is available for any such sale.
1.11 Further Assurances. At the Closing and from
time to time thereafter, the parties shall execute such
additional instruments and take such other action as may be
reasonably required or necessary to carry out the terms and
provisions hereof.
1.12 Effective Date. The Effective Date of the Plan
shall be the date when the Articles of Merger are filed and
accepted by the Secretary of State of the State of Nevada and
at such time as all applicable provisions of the Nevada
Revised Statutes have been met.
3. The Plan has been approved by the respective Boards of
Directors of Parent Net Tel, Second Net Tel and Global Tours and
the stockholders of Second Net Tel and the Global Tours
Stockholders, in accordance with the provisions of Section 92A.120
of the Nevada Revised Statutes; no approval of Parent Net Tel
stockholders is required under the Nevada Revised Statutes. Global
Tours has one class of outstanding securities, common; the Global
Tours Stockholders owning 100% of such securities have adopted,
ratified and approved the Plan in accordance with Section 78.320 of
the Nevada Revised Statutes; and Second Net Tel has one class of
outstanding securities, such class being common voting stock, and
Parent Net Tel, which owns all 1,000 shares of such securities, has
adopted, ratified and approved the Plan in accordance with Section
78.320 of the Nevada Revised Statutes.
4. The applicable provisions of the Nevada Revised Statutes
relating to the merger of Global Tours with and into Second Net Tel
will have been complied with upon compliance with any of the filing
and recording requirements thereof.
5. The merger herein provided for shall become effective in
the State of Nevada on the date of filing hereof.
GLOBAL TOURS, INC.
Date: 8/19/96 By:/ss/Chris Fanelli
---------------------------
President
Date: 8/19/96 By:/ss/Art Lurie
---------------------------
Secretary
STATE OF NEVADA )
) ss
COUNTY OF CLARK )
Personally appeared before me this 19th day of August, 1996,
Chris Fanelli and Art Lurie, who duly acknowledged to me that they
are the President and Secretary, respectively, of Global Tours,
Inc., and that they are authorized to and did execute the foregoing
Articles of Merger.
By:/ss/Lin-Belle Addington
NOTARY PUBLIC
NET TELECOMMUNICATIONS, INCORPORATED
Date: 8/19/96 By:/ss/Michael W. Gorts
---------------------------
President
Date: 8/19/96 By:/ss/Robert Briare
---------------------------
Secretary
STATE OF NEVADA )
) ss
COUNTY OF CLARK )
Personally appeared before me this 19th day of August, 1996,
Michael Gorts and Robert Briare, who duly acknowledged to me that
they are the President and Secretary, respectively, of Net
Telecommunications, Incorporated, and that they are authorized to
and did execute the foregoing Articles of Merger.
by:/ss/Lin-Belle Addington
NOTARY PUBLIC
Net Telecommunications, Inc.
8170 Wet Sahara Avenue, Suite 203
Las Vegas, Nevada 89117
PRESS RELEASE
Contact: George M. Jewett, Director-Investor Relations
702-256-9956 (tel) 702-256-9233 (fax)
E-Mail: Vegasrez @Vegas.infi.net
FOR IMMEDIATE RELEASE
Net Telecommunications Incorporated (OTC Bulletin Board) acquires
Sierra Internet Incorporated Dba Tahoe On-Line
Las Vegas, Nevada, Monday August 26, 1996....Net
Telcommunications, Inc. A Nevada Corporation organized in June
1996, ("Net Tel") is pleased to announce today that it has
entered into a merger agreement with Sierra Internet Inc. Dba
Tahoe On-Line "Sierra Internet" or ("Tahoe On-Line") pursuant
to which Tahoe On-Line will become a wholly owned subsidiary
of Net Tel under terms of the agreement, in which shareholders
of Tahoe On-Line will receive stock from Net Tel. Additional
terms of the transaction were not disclosed.
Net Telecommunications Incorporated is a Nevada based holding
company ("Net Tel") engaged in an aggressive acquisition
program of Telecommunications/Internet-related businesses.
Net Tel trades on the NASDAQ Bulletin Board under the symbol
NETQ.
"We are pleased to welcome this exciting and highly regarded
company to the Net Tel family. With this company, we have
further positioned ourselves to take advantage of the many
opportunities being created by the rapid growth of the
Internet" said Michael Gorts, President and CEO of Net Tel.
Organized in 1994, Sierra Internet is a full service Internet
provider, from dial up modem, to dedicated high speed LAN
access, to Web site hosting and design.
Tahoe On-Line was the first in Nevada to offer dedicated high
speed digital access to the Internet via ISDN. For more
information about Tahoe On-Line, visit their web site at
http://www.sierra.net
Net Telecommunications Incorporated intends to continue to add
to its portfolio of Internet Access providers and value-added
Internet services. By combining technical and creative
expertise for communication and commerce on the Internet with
Net Tel's telecommunications expertise, Net Tel will enhance
the opportunities for these companies to grow and effectively
compete in this dynamic marketplace.
In other news, Robert P. Amira, one of Net Tel's original seven
directors resigned effective Friday, August 23, 1996. In his
letter of resignation Mr. Amira stated the following:
"Since joining the Board of Directors of Net
Telcommunications, Inc. (the "company") at its organization,
I have been unable to take an active role in the Company's
affairs. Upcoming pressing business commitments will continue
to preclude me from future involvement with the Company."
"I feel this situation is not fair to the other directors,
officers and shareholders of Net Telecommunications, Inc. that
I continue in my capacity as a director".
For more information please contact:
COMPANY: Net Telecommunications, Inc.
CONTACT: Michael W. Gorts
702-256-9956
COMPANY: Tahoe On-Line
CONTACT: Anthony Pretigiacomo
702-832-6911
August 26, 1996
cc. Dow Wire Service Fax No. 212-416-4008
cc. Bloomberg Financial Markets Fax No. 609-279-5976
cc. Reuters Fax No. 212-859-1717
cc. Las Vegas Review Journal Fax No. 702-383-4676
cc. Las Vegas Sun Fax No. 702-383-7264
cc. Las Vegas Business Press Fax No. 702-871-3298
NEWS
FOR IMMEDIATE RELEASE
August 12, 1996
CONTACT: George M. Jewett 702-256-9956
Facsimile No. 702-256-9233
COMPANY: Net Telecommunications, Inc.
CONTACT: Michael W. Gorts 702-256-9956
COMPANY: Global Tours, Inc.
CONTACT: Chris Fanelli 1-800-409-4346
Net Telecommunications, Inc. ("Net Tel")
and
Global Tours, Inc. ("Global")
Announce Merger
Las Vegas, Nevada--Net Telecommunications, Inc. (OTC Bulletin Board:
NETQ) announced today that it has entered into a merger agreement
with Global Tours, Inc. Global Tours will become a wholly-owned
subsidiary of Net Tel under terms of the agreement, in which
shareholders of Global Tours, Inc. will receive stock from Net Tel.
Additional terms of the transaction were not disclosed.
Michael Gorts, President and CEO of Net Tel stated, "Both companies
are very excited about the synergy being created as a result of
this merger. Net Tel will benefit immensely from Global Tour's
telemarketing expertise. Global Tours will enjoy increased
profitability as a direct result of low cost long distance services
provided by Net Tel. Cross marketing of services into each others'
data base is an added bonus for each company."
Global Tours is a Las Vegas, Nevada based full service accredited
travel agency which features an exclusive "members only" vacation
club. Global members are provided the deepest available discounts
on virtually all aspects of travel including condominium resorts
throughout the world. These discounts are supported through
contractual agreements with various travel suppliers. Vacation
clubs historically have thrived throughout the United States and
other popular vacation destinations. However, the Las Vegas market
has been virtually untapped.
In response to the merger, Chris Fanelli, President and CEO of
Global, stated that "Global Tours feels it has entered into an
ideal union with Net Tel and Net Tel's recently acquired wholly
owned subsidiary Sierra-Net, Inc." In addition, Mr. Fanelli feels
that the pending acquisition of Las Vegas Reservations, Inc. will
also be a very favorable compliment to Global and Net Tel. Mr.
Fanelli cited three main reasons why he is so positive on the
upcoming mergers; (1) Access to Las Vegas Reservation's tour flow
of approximately 6000 tourists per month; (2) The lowest available
long distance rates; and (3) world wide advertising via the
Internet.
Net Telecommunications, Inc. is an acquisition vehicle for
telecommunication service related providers.
August 12, 1996
cc. Dow Wire Service Fax No. 212-416-4008
cc. Bloomberg Financial Markets Fax No. 609-279-5976
cc. Reuters Fax No. 212-859-1717
