U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: November 14, 1996
SDT HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
COLORADO
(State or other jurisdiction of incorporation)
0-24590 84-1275559
(Commission File No.) (IRS Employer
Identification No.)
1 Stoke Road
Guildford
Surrey, England GU1 4HW
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:
011-44-1483-458-300
<PAGE>
Item 1(a). Change in Control of Registrant.
Effective October 30, 1996, pursuant to a definitive agreement
(attached hereto and incorporated herein as Exhibit 2.0) (the
"Agreement") SDT Holding Corporation (the "Company") acquired all
of the issued and outstanding securities of European Business Group
(UK), Plc., ("EBG"), an English corporation with its principal
place of business located in Surrey, England. The terms of the
transaction involved the Company undertaking a forward split of its
issued and outstanding common shares whereby 8 shares of common
stock were issued in exchange for every one (1) share of common
stock and thereafter, the Company issued an aggregate of 18,000,000
shares of its "restricted" common stock (post forward split) to
the former shareholders of EBG in exchange for all of the issued
and outstanding stock of EBG. EBG remains in existence as a
wholly-owned foreign subsidiary of the Company.
Pursuant to the terms of the Agreement the Company's officers
and directors, Andrew I. Telsey, R. Michel Perlmutter, Brad Weiman
and Darlene D. Kell, resigned their respective positions in the
Company and the following persons were appointed as new officers
and/or directors of the Company:
<TABLE>
<CAPTION>
NAME OFFICE
<S> <C>
Carsten Iversen Chairman of the Board &
President
Haakon S. Walvik Secretary
Christopher John Emms Chief Executive Officer &
Director
</TABLE>
The percentage of voting securities of the Company now
beneficially owned directly or indirectly by the entity who
acquired control and the identity of the entities who acquired
control are as follows:
<TABLE>
<CAPTION>
Percent
Name of Amount and Nature of of
Beneficial Owner Beneficial Ownership Class
<S> <C> <C>
Northbridge Finance Limited 9,000,000 40.9%
Roseworth Financial Services,
Limited 9,000,000 40.9%
</TABLE>
Item 2. Acquisition or Disposition of Assets.
Effective October 30, 1996, the Company acquired all of the
issued and outstanding securities of EBG, consisting of 59,050,000
shares of common stock, par value Pounds 1 per share. The nature and
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amount of consideration given in connection with the agreement was
the issuance of 18,000,000 shares of "restricted" common stock of
the Company to the former EBG shareholders. The consideration
given and received was determined by arms-length negotiations
between the principals of the Company and principals of EBG. No
material relationship existed or presently exists between
management of the companies.
EBG is a leasing company doing business through 16 wholly
owned subsidiary companies. For purposes herein, all references to
EBG shall include EBG and its subsidiaries. EBG's business is
centered around two specific segments of the leasing industry,
including (i) marine containers; and (ii) the sale of licensing
rights to city information billboards worldwide (primarily in the
U.S.). EBG has 10 employees and retains consultants and
independent contractors on an as needed basis. Following is a
description of EBG's businesses:
Marine Containers
EBG's marine container leasing business takes advantage of a
25% capital allowance (similar to an investment tax credit) allowed
by Inland Revenue (United Kingdom taxing authority). EBG, through
a wholly owned subsidiary, Lupa Marine, acquires marine container
hire purchase agreements and rehires the containers at a 30% mark-
up to its clients. The containers are then leased to a succession
of other companies. The clients generate positive cash flow from
the turn-key leasing transaction and they receive a 25% capital
allowance to use against their income taxes. EBG derives its
income from the difference of the purchase price and sales price of
the containers and from the residual value of the contracts at
expiration.
The average markup over the cost of the asset and the sales
price is 30%. The profit is booked over the term of the contracts
(generally five years). Based on the 30% average markup of the
sales price, EBG (through Lupa Marine) earns 5.22% of the sales
price of the asset each year of the contract as its profit. If the
client does not pay EBG as agreed, EBG can take the containers back
and the client incurs sever tax liabilities.
To date, EBG has completed 64 marine container contracts
representing approximately 74,000 TEU's (TEU is the equivalent of
one 20 foot marine container unit) of marine containers. The
contracts expire between July 7, 1999, and September 23, 2001. The
residual values of the aforementioned contracts are approximately
$160.9 million. All of EBG's clients are rated "A" by Dun &
Bradstreet and they all had a net income of over Pounds 2 million in the
past year.
City Information Boards
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EBG's primary future business area is the licensing rights of
City Info Billboards. City Info Billboards are advertising boards
in busy central locations that carry maps for the public to obtain
information on shopping, restaurants, and other local facilities.
EBG has developed different structures using the City Info
Billboards. The concept has been used by other companies owned by
the principals of the company, but EBG has not had activity in this
area as of the date of this report. The Company plans to initiate
its City Info Billboard business during fiscal 1997.
In one structure ("PTS"), EBG, through a subsidiary, will sell
the licensing rights to City Info Billboards in all U.S. states.
EBG will receive 20% of the purchase price of the billboards as its
profit (5% up front and 15% when the investor's tax return is
approved).
In another structure ("EIS"), EBG is a wholesaler of billboard
license rights in the UK to financial institutions. The sale of
the license rights in the UK are under negotiation and the
estimated sales price is Pounds 19,200,000 ($31.6 million). It should be
noted that Inland Revenue approved this structure on November 11,
1996.
EBG's products are tailored for specific markets, but all of
the products are designed to be tax efficient for UK companies or
individuals that have certain levels of taxable income. The marine
container products are intended for companies and the billboard
products are for individuals.
EBG currently has no direct competitors in the UK. EBG's
structure allows the client to acquire assets or underlying
businesses that have complementary tax structures. The group has
an extensive network of contacts that enable EBG to develop
products in accordance with local and national laws. EBG's
indirect competition comes from other products that offer
advantageous tax treatment.
Item 4. Changes in Registrant's Certifying Accountant.
On November 14, 1996, Kish, Leake & Associates, P.C., the
Registrant's independent accountant for the Registrant's two most
recent fiscal years, resigned. The Registrant's financial
statements for the last two years prepared by Kish, Leake &
Associates, P.C., contained no adverse opinion or disclaimer of
opinion, or was qualified as to uncertainty, audit scope, or
accounting principles.
Also on November 15, 1996, the Registrant engaged the
accounting firm of BDO Seidman as the independent public
accountants to audit the Registrant's fiscal year ended June 30,
1997, as well as future financial statements, to replace the firm
of Kish, Leake & Associates, P.C., which was the principal
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independent public accountant as reported in the Registrant's Form
10-KSB as filed with the Securities & Exchange Commission. This
change in independent accountants was approved by the Board of
Directors of the Registrant.
There were no disagreements within the last two fiscal years
and subsequent periods with Kish, Leake & Associates, P.C., on any
matter of accounting principles or practices, financial statement
disclosure, or auditing scope of procedure, which disagreement(s),
if not resolved to the satisfaction of Kish, Leake & Associates,
P.C., would have caused that firm to make reference in connection
with its reports to the subject matter of the disagreement(s) or
any reportable events.
The Registrant has requested that Kish, Leake & Associates,
P.C., furnish it with a letter addressed to the Commission stating
whether it agrees with the above statements. A copy of such
letter, dated November 14, 1996, is filed as Exhibit 16 to this
Form 8-K.
Item 6. Resignation of Registrant's Directors.
Andrew I. Telsey, Darlene D. Kell, Brad Weiman and R. Michel
Perlmutter resigned as officers and directors of the Company, as
applicable, on October 30, 1996, all of whom constituted the
complete Board of Directors of the Company as of said date.
Item 7(a) and 7(b). Financial Statements and Pro Forma Financial
Statements
The Registrant hereby undertakes to file with the Commission
an amendment to this Form 8-K wherein the Registrant shall provide
the audited financial statements of EBG and the Company's pro forma
financial statements within sixty (60) days after the filing of
this Form 8-K.
Item 7(c). Exhibits.
Number Exhibit
2.0 Agreement and Plan of Reorganization between
the Company and European Business Group, Plc.
dated October 30, 1996.
16.0 Letter of Resignation of Registrant's
independent certified accountant, Kish, Leake
& Associates, P.C.
17.1 Letter of Resignation of Andrew I. Telsey as
President and a director of the Company.
17.2 Letter of Resignation of Darlene D. Kell as
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Secretary of the Company.
17.3 Letter of Resignation of Brad Weiman as a
director of the Company.
17.4 Letter of Resignation of R. Michel Perlmutter
as a director of the Company.
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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.
SDT HOLDING CORPORATION
By:/s/ Carsten Iversen
Carsten Iversen,
President
Dated: November 14, 1996
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SDT HOLDING CORPORATION
EXHIBIT 2.0 TO FORM 8-K
AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN THE COMPANY AND
EUROPEAN BUSINESS GROUP PLC.
DATED OCTOBER 30, 1996
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
by and among
SDT HOLDING CORPORATION
a Colorado corporation
and
EUROPEAN BUSINESS GROUP (UK), PLC.
an English corporation
Effective as of October 30, 1996
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION, made and entered
into this 30th day of October 1996, by and between SDT HOLDING
CORPORATION, a Colorado corporation with its principal place of
business located at 2851 S. Parker Road, Suite 720, Aurora,
Colorado 80014 ("SDT"), EUROPEAN BUSINESS GROUP (UK), PLC., an
English corporation with its principal place of business located at
1 Stoke Road, Guildford, Surrey GU1 4HW, England ("EBG") and the
individuals listed on Exhibit "A" attached hereto and specifically
incorporated herein by this reference (the "EBG Shareholders"),
(EBG and the EBG Shareholders hereinafter jointly referred to as
the "EBG Parties").
Premises
A. This Agreement provides for the reorganization of EBG
with and into SDT, with EBG becoming a wholly-owned subsidiary of
SDT, and in connection therewith, the conversion of the outstanding
common stock of EBG into shares of common voting stock of SDT, all
for the purpose of effecting a tax-free reorganization pursuant to
sections 354 and 368(a) of the Internal Revenue Code of 1986, as
amended.
B. The boards of directors of EBG and SDT have determined,
subject to the terms and conditions set forth in this Agreement,
that the exchange contemplated hereby, as a result of which EBG
would become a wholly owned subsidiary of SDT is desirable and in
the best interests of their stockholders. This Agreement is being
entered into for the purpose of setting forth the terms and
conditions of the proposed exchange.
Agreement
NOW, THEREFORE, on the stated premises and for and in
consideration of the mutual covenants and agreements hereinafter
set forth and the mutual benefits to the parties to be derived
herefrom, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS AND WARRANTIES OF
EBG
As an inducement to and to obtain the reliance of SDT, EBG
represents and warrants as follows:
Section 1.1 Organization. EBG is a corporation duly
organized, validly existing, and in good standing under the laws of
England and has the corporate power and is duly authorized,
qualified, franchised and licensed under all applicable laws,
regulations, ordinances and orders of public authorities to own all
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of its properties and assets and to carry on its business in all
material respects as it is now being conducted, including
qualification to do business as a foreign corporation in the
jurisdiction in which the character and location of the assets
owned by it or the nature of the business transacted by it requires
qualification. Included in the EBG Schedules (as hereinafter
defined) are complete and correct copies of the articles of
incorporation, bylaws and amendments thereto of EBG as in effect on
the date hereof. The execution and delivery of this Agreement does
not and the consummation of the transactions contemplated by this
Agreement in accordance with the terms hereof will not violate any
provision of EBG's articles of incorporation or bylaws. EBG has
full power, authority and legal right and has taken all action
required by law, its articles of incorporation, its bylaws or
otherwise to authorize the execution and delivery of this
Agreement.
Section 1.2 Capitalization. The authorized capitalization of
EBG consists of 70,000,000 Common Shares, par value Pounds 1 per share.
As of the Closing Date, there will be 59,050,000 shares of EBG's
Common Stock issued and outstanding (the "EBG Common Shares"). All
issued and outstanding shares are legally issued, fully paid and
nonassessable and are not issued in violation of the preemptive or
other rights of any person. EBG has no other securities, warrants
or options authorized or issued.
Section 1.3 Subsidiaries and Predecessor Corporations. Except
as otherwise set forth in the EBG Schedules, EBG does not have any
other subsidiaries and does not own, beneficially or of record, any
shares of any other corporation.
Section 1.4 Financial Statements. Included in the EBG
Schedules is an audited financial statement, including a balance
sheet, statement of operations, shareholder equity and cash flows
and notes thereto, dated as of August 31, 1996. Relevant thereto:
(a) the EBG balance sheet presents fairly as of its
date the financial condition of EBG. EBG does not have,
as of the date of such balance sheet, except as noted and
to the extent reflected or reserved against therein, any
liabilities or obligations (absolute or contingent) which
should be reflected in a balance sheet or the notes
thereto and all assets reflected therein are properly
reported and present fairly the value of the assets of
EBG, in accordance with generally accepted accounting
principles;
(b) EBG has no liabilities with respect to the
payment of any non-U.S., or federal, state, county, local
or other taxes (including any deficiencies, interest or
penalties), except for taxes accrued but not yet due and
payable;
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(c) EBG has filed all income tax returns in those
jurisdictions where the same are required to be filed by
it from inception to the date hereof;
(d) The books and records, financial and others, of
EBG are in all material respects complete and correct and
have been maintained in accordance with good business
accounting practices; and
(e) except as and to the extent disclosed in the
most recent EBG balance sheet and the EBG Schedules, EBG
has no material contingent liabilities, direct or
indirect, matured or unmatured.
Section 1.5 Information. The information concerning EBG set
forth in this Agreement and in the EBG Schedules is complete and
accurate in all material respects and does not contain any untrue
statement of a material fact or omit to state a material fact
required to make the statements made, in light of the circumstances
under which they were made, not misleading.
Section 1.6 Options and Warrants. There are no existing
options, warrants, calls or commitments of any character to which
EBG is a party and by which it is bound.
Section 1.7 Absence of Certain Changes or Events. Except as
set forth in this Agreement, the EBG Schedules, or as otherwise
disclosed to SDT, since August 31, 1996:
(a) there has not been: (i) any material adverse
change in the business, operations, properties, assets or
condition of EBG; or (ii) any damage, destruction or loss
to EBG (whether or not covered by insurance) materially
and adversely affecting the business, operations,
properties, assets or condition of EBG;
(b) EBG has not: (i) amended its articles of
incorporation or bylaws; (ii) declared or made, or agreed
to declare or make, any payment of dividends or
distributions of any assets of any kind whatsoever to
stockholders or purchased or redeemed or agreed to
purchase or redeem any of its capital stock; (iii) waived
any rights of value which in the aggregate are
extraordinary or material considering the business of
EBG; (iv) made any material change in its method of
management, operation or accounting; (v) entered into any
other material transaction; (vi) made any accrual or
arrangement for or payment of bonuses or special
compensation of any kind or any severance or termination
pay to any present or former officer or employee; (vii)
increased the rate of compensation payable or to become
payable by it to any of its officers or directors or any
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of its employees whose monthly compensation exceeds
$5,000; or (viii) made any increase in any profit
sharing, bonus, deferred compensation, insurance,
pension, retirement or other employee benefit plan,
payment or arrangement made to, for, or with its
officers, directors or employees.
(c) EBG has not: (i) granted or agreed to grant any
options, warrants or other rights for its stocks, bonds
or other corporate securities calling for the issuance
thereof; (ii) borrowed or agreed to borrow any funds or
incurred or become subject to, any material obligation or
liability (absolute or contingent) except liabilities
incurred in the ordinary course of business; (iii) paid
any material obligation or liability (absolute or
contingent) other than current liabilities reflected in
or shown on the most recent EBG balance sheet and current
liabilities incurred since that date in the ordinary
course of business; (iv) sold or transferred, or agreed
to sell or transfer, any of its assets, properties or
rights (except assets, properties or rights not used or
useful in its business which, in the aggregate have a
value of less than $10,000); (v) made or permitted any
amendment or termination of any contract, agreement or
license to which it is a party if such amendment or
termination is material, considering the business of EBG;
or (vi) issued, delivered or agreed to issue or deliver
any stock, bonds or other corporate securities, including
debentures (whether authorized and unissued or held as
treasury stock); and
(d) to the best knowledge of EBG, it has not become
subject to any law or regulation which materially and
adversely affects, or in the future may adversely affect,
the business, operations, properties, assets or condition
of EBG.
Section 1.8 Title and Related Matters. EBG has good and
marketable title to and is the sole and exclusive owner of all of
its properties, inventory, interests in properties and assets, real
and personal (collectively, the "Assets") which are reflected in
the most recent EBG unaudited balance sheet and the EBG Schedules
or acquired after that date (except properties, interests in
properties and assets sold or otherwise disposed of since such date
in the ordinary course of business), free and clear of all liens,
pledges, charges or encumbrances except: (a) statutory liens or
claims not yet delinquent; (b) such imperfections of title and
easements as do not and will not, materially detract from or
interfere with the present or proposed use of the properties
subject thereto or affected thereby or otherwise materially impair
present business operations on such properties; and (c) as
described in the EBG Schedules. Except as set forth in the EBG
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Schedules, EBG owns free and clear of any liens, claims,
encumbrances, royalty interests or other restrictions or
limitations of any nature whatsoever and all procedures,
techniques, marketing plans, business plans, methods of management
or other information utilized in connection with EBG's business.
Except as set forth in the EBG Schedules, no third party has any
right to, and EBG has not received any notice of infringement of or
conflict with asserted rights of others with respect to any
product, technology, data, trade secrets, know-how, proprietary
techniques, trademarks, service marks, trade names or copyrights
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a materially adverse affect
on the business, operations, financial conditions or income of EBG
or any material portion of its properties, assets or rights.
Section 1.9 Litigation and Proceedings. To the best of EBG's
knowledge and belief, there are no actions, suits, proceedings or
investigations pending or threatened by or against EBG or affecting
EBG or its properties, at law or in equity, before any court or
other governmental agency or instrumentality, domestic or foreign
or before any arbitrator of any kind that would have a material
adverse affect on the business, operations, financial condition or
income of EBG. EBG does not have any knowledge of any default on
its part with respect to any judgment, order, writ, injunction,
decree, award, rule or regulation of any court, arbitrator or
governmental agency or instrumentality or of any circumstances
which, after reasonable investigation, would result in the
discovery of such a default.
Section 1.10 Contracts.
(a) Except as included or described in the EBG
Schedules, there are no material contracts, agreements,
franchises, license agreements or other commitments to
which EBG is a party or by which it or any of its assets,
products, technology or properties are bound;
(b) Except as included or described in the EBG
Schedules or reflected in the most recent EBG balance
sheet, EBG is not a party to any oral or written: (i)
contract for the employment of any officer or employee
which is not terminable on thirty (30) days or less
notice; (ii) profit sharing, bonus, deferred
compensation, stock option, severance pay, pension
benefit or retirement plan, agreement or arrangement
covered by Title IV of the Employee Retirement Income
Security Act, as amended; (iii) agreement, contract or
indenture relating to the borrowing of money; (iv)
guaranty of any obligation, other than one on which EBG
is a primary obligor, for collection and other guaranties
of obligations, which, in the aggregate do not exceed
more than one year or providing for payments in excess of
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$10,000 in the aggregate; (v) consulting or other similar
contracts with an unexpired term of more than one year or
providing for payments in excess of $10,000 in the
aggregate; (vi) collective bargaining agreements; (vii)
agreement with any present or former officer or director
of EBG; or (viii) contract, agreement or other commitment
involving payments by it of more than $10,000 in the
aggregate; and
(c) To EBG's knowledge, all contracts, agreements,
franchises, license agreements and other commitments to
which EBG is a party or by which its properties are bound
and which are material to the operations of EBG taken as
a whole, are valid and enforceable by EBG in all
respects, except as limited by bankruptcy and insolvency
laws and by other laws affecting the rights of creditors
generally.
Section 1.11 Material Contract Defaults. To the best of EBG's
knowledge and belief, EBG is not in default in any material respect
under the terms of any outstanding contract, agreement, lease or
other commitment which is material to the business, operations,
properties, assets or condition of EBG, and there is no event of
default in any material respect under any such contract, agreement,
lease or other commitment in respect of which EBG has not taken
adequate steps to prevent such a default from occurring.
Section 1.12 No Conflict With Other Instruments. The
execution of this Agreement and the consummation of the
transactions contemplated by this Agreement will not result in the
breach of any term or provision of, or constitute an event of
default under, any material indenture, mortgage, deed of trust or
other material contract, agreement or instrument to which EBG is a
party or to which any of its properties or operations are subject.
Section 1.13 Governmental Authorizations. To the best of
EBG's knowledge, EBG has all licenses, franchises, permits or other
governmental authorizations legally required to enable EBG to
conduct its business in all material respects as conducted on the
date hereof. Except for compliance with U.S. securities and
English corporation laws, as hereinafter provided, no
authorization, approval, consent or order of, or registration,
declaration or filing with, any court or other governmental body is
required in connection with the execution and delivery by EBG of
this Agreement and the consummation by EBG of the transactions
contemplated hereby.
Section 1.14 Compliance With Laws and Regulations. To the
best of EBG's knowledge, except as disclosed in the EBG Schedules,
EBG has complied with all applicable statutes and regulations of
any governmental entity or agency.
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Section 1.15 Insurance. All of the insurable properties of
EBG are insured for EBG's benefit in accordance with the insurance
policies disclosed in the EBG Schedules under valid and enforceable
policies issued by insurers of recognized responsibility. Such
policy or policies containing substantially equivalent coverage
will be outstanding and in full force at the Closing Date.
Section 1.16 Approval of Agreement. The board of directors
of EBG has authorized the execution and delivery of this Agreement
by EBG, has approved the transactions contemplated hereby and
approved the submission of this Agreement and the transactions
contemplated hereby to the stockholders of EBG for their unanimous
approval with the recommendation that the reorganization be
accepted.
Section 1.17 Material Transactions or Affiliations. Except
as disclosed herein and in the EBG Schedules, there exists no
material contract, agreement or arrangement between EBG and any
predecessor and any person who was at the time of such contract,
agreement or arrangement an officer, director or person owning of
record, or known by EBG to own beneficially, ten percent (10%) or
more of the issued and outstanding EBG Common Shares and which is
to be performed in whole or in part after the date hereof. In all
of such transactions, the amount paid or received, whether in cash,
in services or in kind, has been during the full term thereof, and
is required to be during the unexpired portion of the term thereof,
no less favorable to EBG than terms available from otherwise
unrelated parties in arms length transactions. There are no
commitments by EBG, whether written or oral, to lend any funds to,
borrow any money from or enter into any other material transactions
with, any such affiliated person.
Section 1.18 Labor Relations. EBG has never had a work
stoppage resulting from labor problems. To the best knowledge of
EBG, no union or other collective bargaining organization is
organizing or attempting to organize any employee of EBG.
Section 1.19 Previous Sales of Securities. Since inception,
EBG has sold EBG Common Shares to investors in reliance upon
applicable exemptions from the registration requirements under the
laws of the jurisdiction of England. All such sales were made in
accordance with the laws of England and no sales were made to any
resident of the United States.
Section 1.20 EBG Schedules. Upon execution hereof, EBG will
deliver to SDT the following schedules if applicable to the
business or organization of EBG, which are collectively referred to
as the "EBG Schedules" and which consist of separate schedules
dated as of the date of this Agreement and instruments and data as
of such date, all certified by the chief executive officer of EBG
as complete, true and correct in all material respects:
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(a) copies of the articles of incorporation, bylaws
and all minutes of shareholders' and directors' meetings
of EBG, or such other corporate documentation and records
required to maintain EBG in good standing in England;
(b) the financial statements of EBG referenced
hereinabove in Section 1.4;
(c) a list indicating the name and address of the
stockholders of EBG, together with the number of shares
owned by them;
(d) copies of all licenses, permits and other
governmental authorizations, requests or applications
therefor, pursuant to which EBG carries on or proposes to
carry on its business (except those which in the
aggregate, are immaterial to the present or proposed
business of EBG);
(e) a list of every debt, mortgage, security
interest, pledge, lien, encumbrance or claim of any
nature whatsoever in excess of $10,000 as may affect EBG,
its properties or assets;
(f) a list of all executive employees of EBG,
including current compensation, with notation as to job
description and whether or not such employee is subject
to a written contract;
(g) a description of all real and personal property
owned by EBG, together with a description of every
mortgage, deed of trust, pledge, lien, agreement,
encumbrance, claim or equity interest of any nature
whatsoever in such real and personal property;
(h) copies of all material contracts, leases,
agreements or other instruments to which EBG is a party
or by which it or its properties are bound;
(i) the name and location of each bank or other
institution with which EBG has an account or safety
deposit box and the names of all persons authorized to
draw thereon or having access thereto;
(j) a list of all patent applications, copyrights,
trademarks, service marks and trade names that are
pertinent in any manner whatsoever to the development,
testing, registration, assembly, manufacture, use or sale
of any products or services used in the business of EBG
and in which either EBG or EBG's stockholders has or
previously had any direct or indirect, equitable or legal
right or interest;
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(k) a copy of all material documentation relating
to the sale of EBG Common Shares by EBG to its present
stockholders;
(l) a list of insurance policies referred to in
Section 1.15;
(m) a description of any material adverse change in
the business operations, property, inventory, assets or
condition of EBG since the most recent EBG balance sheet
required to be provided pursuant to Section 1.7;
(n) any other information, together with any
required copies of documents required to be disclosed in
the EBG Schedules by Sections 1.1 through 1.19.
EBG shall cause the EBG Schedules and the instruments and data
delivered to SDT hereunder to be updated after the date hereof up
to and including the Closing Date, as hereinafter defined.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
OF SDT
As an inducement to, and to obtain the reliance of EBG, SDT
represents and warrants as follows:
Section 2.1 Organization. SDT is a corporation duly
organized, validly existing and in good standing under the laws of
the state of Colorado and has the corporate power and is duly
authorized, qualified, franchised and licensed under all applicable
laws, regulations, ordinances and orders of public authorities to
own all of its properties and assets and to carry on its business
in all material respects as it are now being conducted, including
qualification to do business as a foreign corporation in the states
in which the character and location of the assets owned by it or
the nature of the business transacted by it requires qualification.
Included in the SDT Schedules (as hereinafter defined) are complete
and correct copies of the articles of incorporation, amended
articles of incorporation (collectively, hereinafter referred to as
the "articles of incorporation") and bylaws of SDT as in effect on
the date hereof. The execution and delivery of this Agreement does
not and the consummation of the transactions contemplated by this
Agreement in accordance with the terms hereof will not, violate any
provision of SDT's articles of incorporation or bylaws. SDT has
taken all action required by law, its articles of incorporation,
its bylaws or otherwise to authorize the execution and delivery of
this Agreement. SDT has full power, authority and legal right and
has taken all action required by law, its articles of
incorporation, bylaws or otherwise to consummate the transactions
herein contemplate.
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Section 2.2 Capitalization. The authorized capitalization of
SDT consists of 100,000,000 shares of Common Stock, no par value
per share and 2,000,000 shares of Preferred Stock, no par value per
share. As of the date hereof there are 500,000 Common Shares of
SDT issued and outstanding. There are no Preferred Shares issued
or outstanding.. Prior to the Closing Date, as defined
hereinbelow, the Board of Directors of SDT shall undertake a
forward split of the SDT issued and outstanding Common Stock,
whereby 8 shares of Common Stock shall be issued in exchange for
every 1 share of Common Stock presently issued and outstanding, in
order to establish the number of issued and outstanding common
shares to be 4,000,000. As of the Closing Date, as defined herein,
there will be no more than 4,000,000 common shares issued and
outstanding and reserved for issuance (the "SDT Common Shares")
held by the then existing securities holders of SDT. All issued
and outstanding SDT Common Shares have been legally issued, fully
paid and are nonassessable.
Section 2.3 Subsidiaries. SDT has no subsidiary companies.
Section 2.4 Financial Statements.
(a) Included in the SDT Schedules are the audited
consolidated balance sheet of SDT for the years ended
June 30, 1996 and 1995 and the related statements of
operations, stockholders' equity and cash flows for the
year then ended, which are included in the schedules
identified in Section 2.18(c).
(b) All such financial statements have been
prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods
involved. The SDT balance sheets presents fairly as of
their respective dates the financial condition of SDT.
SDT did not have as of the date of any of such SDT
balance sheets, any liabilities or obligations (absolute
or contingent) which should be reflected in a balance
sheet or the notes thereto prepared in accordance with
generally accepted accounting principles, and all assets
reflected therein are properly reported and present
fairly the value of the assets of SDT, in accordance with
generally accepted accounting principles. The statements
of operations, stockholders' equity and changes in
financial position reflect fairly the information
required to be set forth therein by generally accepted
accounting principles;
(c) The books and records, financial and others, of
SDT are in all material respects complete and correct and
have been maintained in accordance with good business
accounting practices;
(d) SDT has no liabilities with respect to the
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payment of any federal, state, county, local or other
taxes (including any deficiencies, interest or
penalties);
(e) As of the Closing Date, as defined herein the
SDT balance sheet and the notes thereto, shall reflect
that SDT has: (i) no receivables; (ii) no accounts
payable; and (iii) no contingent liabilities, direct or
indirect, matured or unmatured.
Section 2.5 Information. The information concerning SDT as
set forth in this Agreement and in the SDT Schedules is complete
and accurate in all material respects and does not contain any
untrue statement of a material fact or omit to state a material
fact required to make the statements made, in light of the
circumstances under which they were made, not misleading.
Section 2.6 Absence of Certain Changes or Events. Except as
described herein or in the SDT Schedules, since June 30, 1996:
(a) SDT has not: (i) amended its articles of
incorporation or bylaws; (ii) waived any rights of value
which in the aggregate are extraordinary or material
considering the business of SDT; (iii) made any material
change in its method of management, operation or
accounting; or (iv) made any accrual or arrangement for
or payment of bonuses or special compensation of any kind
or any severance or termination pay to any present or
former officer or employee;
(b) SDT has not: (i) granted or agreed to grant any
options, warrants or other rights for its stocks, bonds
or other corporate securities calling for the issuance
thereof, which option, warrant or other right has not
been cancelled as of the Closing Date; (ii) borrowed or
agreed to borrow any funds or incurred or become subject
to, any material obligation or liability (absolute or
contingent) except liabilities incurred in the ordinary
course of business; and
(c) to the best knowledge of SDT, it has not become
subject to any law or regulation which materially and
adversely affects, or in the future may adversely affect,
the business, operations, properties, assets or condition
of SDT.
Section 2.7 Title and Related Matters. As of the Closing
Date, SDT will own no real, personal or intangible property.
Section 2.8 Litigation and Proceedings. There are no
actions, suits or proceedings pending or, to the best of SDT's
knowledge and belief, threatened by or against or affecting SDT, at
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law or in equity, before any court or other governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of
any kind that would have a material adverse effect on the business,
operations, financial condition, income or business prospects of
SDT. SDT does not have any knowledge of any default on its part
with respect to any judgment, order, writ, injunction, decree,
award, rule or regulation of any court, arbitrator or governmental
agency or instrumentality.
Section 2.9 Contracts. On the Closing Date and except as
previously disclosed to EBG by SDT or as included in the SDT
Schedules herein:
(a) There will be no material contracts,
agreements, franchises, license agreements, or other
commitments to which SDT is a party or by which it or any
of its properties are bound;
(b) SDT will not be a party to any contract,
agreement, commitment or instrument or subject to any
charter or other corporate restriction or any judgment,
order, writ, injunction, decree or award which materially
and adversely affects, or in the future may (as far as
SDT can now foresee) materially and adversely affect, the
business, operations, properties, assets or conditions of
SDT; and
(c) SDT will not be a party to any material oral or
written: (i) contract for the employment of any officer
or employee; (ii) profit sharing, bonus, deferred
compensation, stock option, severance pay, pension,
benefit or retirement plan, agreement or arrangement
covered by Title IV of the Employee Retirement Income
Security Act, as amended; (iii) agreement, contract or
indenture relating to the borrowing of money; (iv)
guaranty of any obligation for the borrowing of money or
otherwise, excluding endorsements made for collection and
other guaranties of obligations, which, in the aggregate
exceeds $1,000; (v) consulting or other similar contract
with an unexpired term of more than one year or providing
for payments in excess of $10,000 in the aggregate; (vi)
collective bargaining agreement; (vii) agreement with any
present or former officer or director of SDT; or (viii)
contract, agreement, or other commitment involving
payments by it of more than $10,000 in the aggregate.
Section 2.10 No Conflict With Other Instruments. The
execution of this Agreement and the consummation of the
transactions contemplated by this Agreement will not result in the
breach of any term or provision of, or constitute an event of
default under, any material indenture, mortgage, deed of trust or
other material contract, agreement or instrument to which SDT is a
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party or to which any of its properties or operations are subject.
Section 2.11 Material Contract Defaults. To the best of SDT's
knowledge and belief, SDT is not in default in any material respect
under the terms of any outstanding contract, agreement, lease or
other commitment which is material to the business, operations,
properties, assets or condition of SDT, and there is no event of
default in any material respect under any such contract, agreement,
lease or other commitment in respect of which SDT has not taken
adequate steps to prevent such a default from occurring.
Section 2.12 Governmental Authorizations. To the best of
SDT's knowledge, SDT has all licenses, franchises, permits and
other governmental authorizations that are legally required to
enable it to conduct its business operations in all material
respects as conducted on the date hereof. Except for compliance
with federal and state securities or corporation laws, no
authorization, approval, consent or order of, or registration,
declaration or filing with, any court or other governmental body
is required in connection with the execution and delivery by SDT of
the transactions contemplated hereby.
Section 2.13 Compliance With Laws and Regulations. To the
best of SDT's knowledge and belief, SDT has complied with all
applicable statutes and regulations of any federal, state or other
governmental entity or agency thereof, except to the extent that
noncompliance would not materially and adversely affect the
business, operations, properties, assets or condition of SDT or
would not result in SDT's incurring any material liability.
Section 2.14 Insurance. SDT has no insurable properties and
no insurance policies will be in effect at the Closing Date, as
hereinafter defined.
Section 2.15 Approval of Agreement. The board of directors
of SDT has authorized the execution and delivery of this Agreement
by SDT and has approved the transactions contemplated hereby. The
approval of this Agreement by SDT's shareholders is not required.
Section 2.16 Material Transactions or Affiliations. Except
for the retainer agreement between SDT and Andrew I. Telsey, P.C.,
for the providing of legal services, as of the Closing Date there
will exist no material contract, agreement or arrangement between
SDT and any person who was at the time of such contract, agreement
or arrangement an officer, director or person owning of record, or
known by SDT to own beneficially, ten percent (10%) or more of the
issued and outstanding common stock of SDT and which is to be
performed in whole or in part after the date hereof. SDT has no
commitment, whether written or oral, to lend any funds to, borrow
any money from or enter into any other material transactions with,
any such affiliated person.
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Section 2.17 Labor Relations. SDT has never had a work
stoppage resulting from labor problems. SDT has no employees other
than its officers and directors.
Section 2.18 SDT Schedules. Upon execution hereof, SDT shall
deliver to EBG the following schedules, which are collectively
referred to as the "SDT Schedules" which are dated the date of this
Agreement, all certified by an officer of SDT to be complete, true
and accurate:
(a) complete and correct copies of the articles of
incorporation and bylaws of SDT as in effect as of the
date of this Agreement;
(b) copies of all financial statements of SDT
identified in Section 2.4(a);
(c) the description of any material adverse change
in the business, operations, property, assets, or
condition of SDT since June 30, 1996 required to be
provided pursuant to Section 2.6; and
(d) any other information, together with any
required copies of documents, required to be disclosed in
the SDT Schedules by Sections 2.1 through 2.17.
SDT shall cause the SDT Schedules and the instruments to
be delivered to EBG hereunder to be updated after the date hereof
up to and including the Closing Date.
ARTICLE III
EXCHANGE PROCEDURE
Section 3.1 Delivery of EBG Securities. On the Closing Date,
the holders of the EBG Common Shares shall deliver to SDT (i)
certificates or other documents evidencing all of the issued and
outstanding EBG Common Shares, duly endorsed in blank or with
executed stock power attached thereto in transferrable form and
(ii) investment letters, the form of which is attached hereto as
Exhibit "B".
Section 3.2 Issuance of SDT Common Shares. (a) In exchange
for all of the EBG Common Share tendered pursuant to Section 3.1,
SDT shall issue an aggregate of 18,000,000 "restricted" SDT Common
Shares to the EBG shareholders on a pro rata basis.
(b) No fractional SDT Common Shares shall be issued pursuant
to this Section 3.2. In lieu of such fractional shares, all shares
to be issued shall be rounded up or down to the nearest whole
share.
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Section 3.3 Events Prior to Closing. Upon execution hereof
or as soon thereafter as practical, management of SDT and EBG shall
execute, acknowledge and deliver (or shall cause to be executed,
acknowledged and delivered) any and all certificates, opinions,
financial statements, schedules, agreements, resolutions, rulings
or other instruments required by this Agreement to be so delivered,
together with such other items as may be reasonably requested by
the parties hereto and their respective legal counsel in order to
effectuate or evidence the transactions contemplated hereby,
subject only to the conditions to Closing referenced hereinbelow.
Section 3.4 Closing. The closing ("Closing") of the
transactions contemplated by this Agreement shall be as of the date
in which all of the shareholders of EBG have approved the terms of
this Agreement ("Closing Date"), and all documentation referenced
herein is delivered to the respective party herein, unless a
different date is mutually agreed to in writing by the parties
hereto.
Section 3.5 Termination.
(a) This Agreement may be terminated by the board of
directors of either SDT or EBG at any time prior to the
Closing Date if:
(i) there shall be any action or proceeding before
any court or any governmental body which shall seek to
restrain, prohibit or invalidate the transactions
contemplated by this Agreement and which, in the judgment
of such board of directors, made in good faith and based
on the advice of its legal counsel, makes it inadvisable
to proceed with the exchange contemplated by this
Agreement; or
(ii) any of the transactions contemplated hereby are
disapproved by any regulatory authority whose approval is
required to consummate such transactions; or
(iii) the conditions described in Section 6.6 below
have not been satisfied in full.
In the event of termination pursuant to this paragraph (a) of
this Section 3.5, no obligation, right, or liability shall
arise hereunder and each party shall bear all of the expenses
incurred by it in connection with the negotiation, drafting
and execution of this Agreement and the transactions herein
contemplated;
(b) This Agreement may be terminated at any time prior
to the Closing Date by action of the board of directors of SDT
if EBG shall fail to comply in any material respect with any
of its covenants or agreements contained in this Agreement or
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if any of the representations or warranties of EBG contained
herein shall be inaccurate in any material respect, which
noncompliance or inaccuracy is not cured after 20 days'
written notice thereof is given to EBG. If this Agreement is
terminated pursuant to this paragraph (b) of this Section 3.5,
this Agreement shall be of no further force or effect and no
obligation, right or liability shall arise hereunder; and
(c) This Agreement may be terminated at any time prior
to the Closing Date by action of the board of directors of EBG
if SDT shall fail to comply in any material respect with any
of its covenants or agreements contained in this Agreement or
if any of the representations or warranties of SDT contained
herein shall be inaccurate in any material respect, which
noncompliance or inaccuracy is not cured after 20 days written
notice thereof is given to SDT. If this Agreement is
terminated pursuant to this paragraph (c) of Section 3.5, this
Agreement shall be of no further force or effect and no
obligation, right or liability shall arise hereunder.
Section 3.6 Directors of SDT. Upon the Closing, the present
members of SDT's Board of Directors shall tender their resignations
seriatim so that the following persons are appointed directors of
SDT in accordance with procedures set forth in the SDT bylaws:
Carsten Iversen (who shall be appointed Chairman of the Board of
Directors) and Christopher John Emms. Each director shall hold
office until his successor shall have been duly elected and shall
have qualified or until his earlier death, resignation or removal.
Section 3.7 Officers of SDT. Upon the Closing, the present
officers of SDT shall tender their resignations and simultaneous
therewith, the following persons shall be elected as officers of
SDT in accordance with procedures set forth in the SDT bylaws:
NAME OFFICE
Carsten Iversen Chairman of the Board,
President
Christopher John Emms Chief Executive Officer
Haakon S. Walvik Secretary
ARTICLE IV
SPECIAL COVENANTS
Section 4.1 Access to Properties and Records. SDT and EBG
will each afford to the officers and authorized representatives of
the other full access to the properties, books and records of SDT
and EBG, as the case may be, in order that each may have full
opportunity to make such reasonable investigation as it shall
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desire to make of the affairs of the other and each will furnish
the other with such additional financial and operating data and
other information as to the business and properties of SDT and EBG,
as the case may be, as the other shall from time to time reasonably
request.
Section 4.2 Availability of Rule 144. Each of the parties
acknowledge that the stock of SDT to be issued pursuant to this
Agreement will be "restricted securities," as that term is defined
in Rule 144 promulgated pursuant to the Securities Act. SDT is
under no obligation to register such shares under the Securities
Act, or otherwise. Notwithstanding the foregoing, however,
following the Closing Date, SDT will use its best efforts to: (a)
make publicly available on a regular basis not less than semi-
annually, business and financial information regarding SDT so as to
make available to the shareholders of SDT the provisions of Rule
144 pursuant to subparagraph (c)(2) thereof; and (b) within ten
(10) days of any written request of any stockholder of SDT, SDT
will provide to such stockholder written confirmation of compliance
with such of the foregoing subparagraph as may then be applicable.
The stockholders of SDT holding restricted securities of SDT as of
the date of this Agreement and their respective heirs,
administrators, personal representatives, successors and assigns,
are intended third party beneficiaries of the provisions set forth
herein. The covenants set forth in this Section 4.2 shall survive
the Closing and the consummation of the transactions herein
contemplated.
Section 4.3 Information for SDT Public Reports. EBG will
furnish SDT with all information concerning EBG and the EBG
Stockholders, including all financial statements, required for
inclusion in any registration statement or public report intended
to be filed by SDT pursuant to the Securities Act, the Exchange
Act, or any other applicable federal or state law. EBG covenants
that all information so furnished for either such registration
statement or other public release by SDT, including the financial
statements described in Section 1.4, shall be true and correct in
all material respects without omission of any material fact
required to make the information stated not misleading.
Section 4.4 Special Covenants and Representations Regarding
the SDT Common Shares to be Issued in the Exchange. The
consummation of this Agreement, including the issuance of the SDT
Common Shares to the stockholders of EBG as contemplated hereby,
constitutes the offer and sale of securities under the Securities
Act, and applicable state statutes. Such transaction shall be
consummated in reliance on exemptions from the registration and
prospectus delivery requirements of such statutes which depend,
inter alia, upon the circumstances under which the EBG stockholders
acquire such securities. In connection with reliance upon
exemptions from the registration and prospectus delivery
requirements for such transactions, at the Closing, EBG shall cause
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to be delivered, and the EBG stockholders shall deliver to SDT, the
investment letter referenced in Section 3.1.
Section 4.5 Third Party Consents. SDT and EBG agree to
cooperate with each other in order to obtain any required third
party consents to this Agreement and the transactions herein
contemplated.
Section 4.6 Actions Prior to Closing.
(a) From and after the date of this Agreement until
the Closing Date and except as set forth in the SDT or
EBG Schedules or as permitted or contemplated by this
Agreement, EBG will each use its best efforts to:
(i) carry on its business in substantially
the same manner as it has heretofore;
(ii) maintain and keep its properties in
states of good repair and condition as at present,
except for depreciation due to ordinary wear and
tear and damage due to casualty;
(iii) maintain in full force and effect
insurance comparable in amount and in scope of
coverage to that now maintained by it;
(iv) perform in all material respects all of
its obligations under material contracts, leases
and instruments relating to or affecting its
assets, properties and business;
(v) maintain and preserve its business
organization intact, to retain its key employees
and to maintain its relationship with its material
suppliers and customers; and
(vi) fully comply with and perform in all
material respects all obligations and duties
imposed on it by all federal and state laws and all
rules, regulations and orders imposed by federal or
state governmental authorities.
(b) From and after the date of this Agreement until
the Closing Date, neither SDT nor EBG will, without
the prior consent of the other party:
(i) except as otherwise specifically set
forth herein, make any change in their respective
certificates or articles of incorporation or
bylaws;
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(ii) declare or pay any dividend on its
outstanding shares of capital stock, except as may
otherwise be required by law, or effect any stock
split or otherwise change its capitalization,
except as provided herein;
(iii) enter into or amend any employment,
severance or similar agreements or arrangements
with any directors or officers;
(iv) issue any shares of its capital stock
except pursuant to an offering or offerings of SDT
Common Shares at a per share price of at least
$3.50, provided that the number of shares sold in
such offering or offerings does not cause the total
number of SDT Common Shares to be issued to exceed
142,858 Shares;
(v) grant, confer or award any options,
warrants, conversion rights or other rights not
existing on the date hereof to acquire any shares
of its capital stock; or
(vi) purchase or redeem any shares of its
capital stock, except as disclosed herein.
Section 4.9 Indemnification.
(a) EBG hereby agrees to indemnify SDT and each of
the officers, agents and directors of SDT as of the date
of execution of this Agreement against any loss,
liability, claim, damage or expense (including, but not
limited to, any and all expense whatsoever reasonably
incurred in investigating, preparing or defending against
any litigation, commenced or threatened or any claim
whatsoever), to which it or they may become subject
arising out of or based on any inaccuracy appearing in or
misrepresentation made in this Agreement. The
indemnification provided for in this paragraph shall
survive the Closing and consummation of the transactions
contemplated hereby and termination of this Agreement for
a period of 18 months; and
(b) SDT and its officers and directors hereby
agrees to indemnify EBG and each of the officers, agents,
directors and current shareholders of EBG as of the
Closing Date against any loss, liability, claim, damage
or expense (including, but not limited to, any and all
expense whatsoever reasonably incurred in investigating,
preparing or defending against any litigation, commenced
or threatened or any claim whatsoever), to which it or
they may become subject arising out of or based on any
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inaccuracy appearing in or misrepresentation made in this
Agreement and particularly the representation regarding
no liabilities referred to in Section 2.4(b). The
indemnification provided for in this Section shall
survive the Closing and consummation of the transactions
contemplated hereby and termination of this Agreement for
a period of 18 months.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS
OF SDT
The obligations of SDT under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following
conditions:
Section 5.1 Accuracy of Representations. The representations
and warranties made by EBG in this Agreement were true when made
and shall be true at the Closing Date with the same force and
effect as if such representations and warranties were made at the
Closing Date (except for changes therein permitted by this
Agreement) and EBG shall have performed or complied with all
covenants and conditions required by this Agreement to be performed
or complied with by EBG prior to or at the Closing. SDT shall be
furnished with a certificate, signed by a duly authorized officer
of EBG and dated the Closing Date, to the foregoing effect.
Section 5.2 Stockholder Approval. The stockholders of EBG
shall have unanimously approved this Agreement and the transactions
contemplated thereby.
Section 5.3 Officer's Certificate. On the Closing Date SDT
shall be furnished with a certificate dated the Closing Date and
signed by a duly authorized officer of EBG to the effect that (i)
no litigation, proceeding, investigation or inquiry is pending or,
to the best knowledge of EBG, threatened, which might result in an
action to enjoin or prevent the consummation of the transactions
contemplated by this Agreement or, to the extent not disclosed in
the EBG Schedules, by or against EBG which might result in any
material adverse change in any of the assets, properties, business
or operations of EBG; and (ii) including the disclosure described
in Section 5.1, above herein.
Section 5.4 No Material Adverse Change. Prior to the Closing
Date, there shall not have occurred any material adverse change in
the financial condition, business or operations of nor shall any
event have occurred which, with the lapse of time or the giving of
notice, may cause or create any material adverse change in the
financial condition, business or operations of EBG.
Section 5.5 Opinion of Counsel to EBG. SDT shall receive an
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opinion dated the Closing Date of Grundberg Mocatta, counsel to
EBG, in substantially the following form:
(a) EBG is a corporation duly organized, validly
existing, and in good standing under the laws of England
and has the corporate power and is duly authorized,
qualified, franchised and licensed under all material
applicable laws, regulations, ordinances and orders of
public authorities to own all of its properties and
assets and to conduct its business as now conducted,
including qualification to do business as a foreign
corporation in the states in which the character and
location of the assets owned by it or the nature of the
business transacted by it requires qualification;
(b) To the best knowledge of such legal counsel,
the execution and delivery by EBG of this Agreement and
the consummation of the transactions contemplated by this
Agreement in accordance with the terms hereof will not
conflict with or result in the breach of any term or
provision of EBG's articles of incorporation or bylaws or
violate any court order, writ, injunction or decree
applicable to EBG, or its properties or assets;
(c) The authorized capitalization of EBG consists
of 70,000,000 Common Shares, par value Pounds 1 per share. As
of the Closing Date, all of the authorized common shares
will be issued and outstanding. All issued and
outstanding shares are legally issued, fully paid and
nonassessable and not issued in violation of the preemp-
tive rights of any person. Except as set forth in the
EBG Schedules, to the best knowledge of such legal
counsel, there are no outstanding subscriptions, options,
rights, warrants, convertible securities or other
agreements or commitments obligating EBG to issue any
additional shares of any class of its capital stock.
(d) This Agreement has been duly and validly
authorized, executed and delivered by EBG;
(e) To the best knowledge of such legal counsel,
except as set forth in the EBG Schedules, there are no
actions, suits or proceedings pending or threatened by or
against or affecting EBG or its properties, at law or in
equity, before any court or other governmental agency or
instrumentality, domestic or foreign or before any
arbitrator of any kind;
(f) EBG has taken all actions required by the
applicable laws of England to permit the transfer of the
EBG Common Shares to SDT.
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Section 5.6 Other Items. SDT shall have received such
further documents, certificates or instruments relating to the
transactions contemplated hereby as SDT may reasonably request.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF EBG
The obligations of EBG under this Agreement are subject
to the satisfaction, at or before the Closing Date (unless
otherwise indicated herein), of the following conditions:
Section 6.1 Accuracy of Representations. The representations
and warranties made by SDT in this Agreement were true when made
and shall be true as of the Closing Date (except for changes
therein permitted by this Agreement) with the same force and effect
as if such representations and warranties were made at and as of
the Closing Date, and SDT shall have performed and complied with
all covenants and conditions required by this Agreement to be per-
formed or complied with by SDT prior to or at the Closing. EBG
shall have been furnished with a certificate, signed by a duly
authorized executive officer of SDT and dated the Closing Date, to
the foregoing effect.
Section 6.2 Officer's Certificate. EBG shall be furnished
with a certificate dated the Closing Date and signed by a duly
authorized officer of SDT to the effect that (i) no litigation,
proceeding, investigation or inquiry is pending or, to the best
knowledge of SDT, threatened, which might result in an action to
enjoin or prevent the consummation of the transactions contemplated
by this Agreement or, to the extent not disclosed in the SDT
Schedules, by or against SDT which might result in any material
adverse change in any of the assets, properties, business or
operations of SDT; and (ii) including the disclosure described in
Section 6.1, above herein.
Section 6.3 No Material Adverse Change. Prior to the Closing
Date, there shall not have occurred any material adverse change in
the financial condition, business or operations of nor shall any
event have occurred which, with the lapse of time or the giving of
notice, may cause or create any material adverse change in the
financial condition, business or operations of SDT.
Section 6.5 Opinion of Counsel to SDT. EBG shall receive an
opinion dated the Closing Date of Andrew I. Telsey, P.C., counsel
to SDT, in substantially the following form:
(a) SDT is a corporation duly organized, validly
existing, and in good standing under the laws of the
state of Colorado and has the corporate power and is duly
authorized, qualified, franchised, and licensed under all
applicable laws, regulations, ordinances and orders of
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public authorities to own all of its properties and
assets and to carry on its business in all material
respects as it is now being conducted, including qualifi-
cation to do business as a foreign corporation in the
states in which the character and location of the assets
owned by it or the nature of the business transacted by
it requires qualification;
(b) To the best knowledge of such legal counsel,
the execution and delivery by SDT of this Agreement and
the consummation of the transactions contemplated by this
Agreement in accordance with the terms hereof will not
conflict with or result in the breach of any term or
provision of SDT's articles of incorporation or bylaws or
constitute a default or give rise to a right of termina-
tion, cancellation or acceleration under any material
mortgage, indenture, deed of trust, license agreement or
other obligation or violate any court order, writ,
injunction or decree applicable to SDT or its properties
or assets;
(c) The authorized capitalization of SDT consists
of 100,000,000 shares of Common Stock, no par value per
share and 2,000,000 shares of Preferred Stock, no par
value per share. As of the Closing Date, there will be
no more than 4,000,000 common shares issued and
outstanding and reserved for issuance (post forward
split), held by the then existing securities holders of
SDT. All issued and outstanding shares are legally
issued, fully paid and nonassessable and not issued in
violation of the preemptive rights of any person.
(d) The SDT Common Shares to be issued to the EBG
stockholders pursuant to the terms of this Agreement will
be, when issued in accordance with the terms hereof,
legally issued, fully paid and non-assessable;
(e) This Agreement has been duly and validly
authorized, executed, and delivered and constitutes the
legal and binding obligation of SDT, except as limited by
bankruptcy and insolvency laws and by other laws
affecting the rights of creditors generally;
(f) To the best knowledge of such counsel, except
as set forth in the SDT Schedules, there are no actions,
suits or proceedings pending or threatened by or against
SDT or affecting SDT's properties, at law or in equity,
before any court or other governmental agency or
instrumentality, domestic or foreign or before any
arbitrator of any kind; and
(g) SDT has taken all actions required by the
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<PAGE>
applicable laws of the state of Colorado to permit the
issuance of the SDT Common Shares to the EBG stock-
holders.
Section 6.6 Compliance with Reporting Requirements. As of
the Closing Date, SDT shall be current in, and in compliance with
all requirements of, all filings required to be tendered to the
Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended.
Section 6.7 Other Items. EBG shall have received such
further documents, certificates, or instruments relating to the
transactions contemplated hereby as EBG may reasonably request.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Brokers and Finders. Except as set forth in
Schedule 7.1, each party hereto hereby represents and warrants that
it is under no obligation, express or implied, to pay certain
finders in connection with the bringing of the parties together in
the negotiation, execution, or consummation of this Agreement. The
parties each agree to indemnify the other against any claim by any
third person not listed in Schedule 7.1 for any commission,
brokerage or finder's fee or other payment with respect to this
Agreement or the transactions contemplated hereby based on any
alleged agreement or understanding between the indemnifying party
and such third person, whether express or implied from the actions
of the indemnifying party.
Section 7.2 Law. Forum and Jurisdiction. This Agreement
shall be construed and interpreted in accordance with the laws of
the State of Colorado, except as the corporate law of England
applies to EBG and as US federal law may be applicable.
Section 7.3 Notices. Any notices or other communications
required or permitted hereunder shall be sufficiently given if
personally delivered to it or sent by registered mail or certified
mail, postage prepaid, or by prepaid telegram addressed as follows:
If to SDT: Andrew I. Telsey, Esq.
2851 S. Parker Rd., Su. 720
Aurora, CO 80014
If to EBG: Carsten Iversen, Esq.
Grundberg Mocatta
Connectas House
29 Asingdon Road
Kensington, London W8 6AH
or such other addresses as shall be furnished in writing by any
24
<PAGE>
party in the manner for giving notices hereunder, and any such
notice or communication shall be deemed to have been given as of
the date so delivered, mailed, or telegraphed.
Section 7.4 Attorneys' Fees. In the event that any party
institutes any action or suit to enforce this Agreement or to
secure relief from any default hereunder or breach hereof, the
breaching party or parties shall reimburse the non-breaching party
or parties for all costs, including reasonable attorneys' fees,
incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
Section 7.5 Confidentiality. Each party hereto agrees with
the other parties that, unless and until the reorganization contem-
plated by this Agreement has been consummated, they and their
representatives will hold in strict confidence all data and
information obtained with respect to another party or any
subsidiary thereof from any representative, officer, director or
employee, or from any books or records or from personal inspection,
of such other party, and shall not use such data or information or
disclose the same to others, except: (i) to the extent such data is
a matter of public knowledge or is required by law to be published;
and (ii) to the extent that such data or information must be used
or disclosed in order to consummate the transactions contemplated
by this Agreement.
Section 7.6 Schedules; Knowledge. Each party is presumed to
have full knowledge of all information set forth in the other
party's schedules delivered pursuant to this Agreement.
Section 7.7 Third Party Beneficiaries. This contract is
solely among SDT and the EBG Parties and, except as specifically
provided, no director, officer, stockholder, employee, agent,
independent contractor or any other person or entity shall be
deemed to be a third party beneficiary of this Agreement.
Section 7.8 Entire Agreement. This Agreement represents the
entire agreement between the parties relating to the subject matter
hereof. This Agreement alone fully and completely expresses the
agreement of the parties relating to the subject matter hereof.
There are no other courses of dealing, understandings, agreements,
representations or warranties, written or oral, except as set forth
herein. This Agreement may not be amended or modified, except by
a written agreement signed by all parties hereto.
Section 7.9 Survival; Termination. The representations,
warranties and covenants of the respective parties shall survive
the Closing Date and the consummation of the transactions herein
contemplated for 18 months.
Section 7.10 Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original
25
<PAGE>
and all of which taken together shall be but a single instrument.
Section 7.11 Amendment or Waiver. Every right and remedy
provided herein shall be cumulative with every other right and
remedy, whether conferred herein, at law, or in equity, and may be
enforced concurrently herewith, and no waiver by any party of the
performance of any obligation by the other shall be construed as a
waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing
Date, this Agreement may be amended by a writing signed by all
parties hereto, with respect to any of the terms contained herein,
and any term or condition of this Agreement may be waived or the
time for performance hereof may be extended by a writing signed by
the party or parties for whose benefit the provision is intended.
Section 7.12 Incorporation of Recitals. All of the recitals
hereof are incorporated by this reference and are made a part
hereof as though set forth at length herein.
Section 7.13 Expenses. Each party herein shall bear all of
their respective costs and expenses incurred in connection with the
negotiation of this Agreement and in the consummation of the
transactions provided for herein and the preparation therefor.
Section 7.14 Headings; Context. The headings of the sections
and paragraphs contained in this Agreement are for convenience of
reference only and do not form a part hereof and in no way modify,
interpret or construe the meaning of this Agreement.
Section 7.15 Benefit. This Agreement shall be binding upon
and shall insure only to the benefit of the parties hereto, and
their permitted assigns hereunder. This Agreement shall not be
assigned by any party without the prior written consent of the
other party.
Section 7.16 Public Announcements. Except as may be required
by law, neither party shall make any public announcement or filing
with respect to the transactions provided for herein without the
prior consent of the other party hereto.
Section 7.17 Severability. In the event that any particular
provision or provisions of this Agreement or the other agreements
contained herein shall for any reason hereafter be determined to be
unenforceable, or in violation of any law, governmental order or
regulation, such unenforceability or violation shall not affect the
remaining provisions of such agreements, which shall continue in
full force and effect and be binding upon the respective parties
hereto.
Section 7.18 Failure of Conditions; Termination. In the
event any of the conditions specified in this Agreement shall not
be fulfilled on or before the Closing Date, either of the parties
have the right either to proceed or, upon prompt written notice to
the other, to terminate and rescind this Agreement without
liability to any other party. The election to proceed shall not
26
<PAGE>
affect the right of such electing party reasonably to require the
other party to continue to use its efforts to fulfill the unmet
conditions.
Section 7.19 No Strict Construction. The language of this
Agreement shall be construed as a whole, according to its fair
meaning and intendment, and not strictly for or against either
party hereto, regardless of who drafted or was principally
responsible for drafting the Agreement or terms or conditions
hereof.
Section 7.20 Execution Knowing and Voluntary. In executing
this Agreement, the parties severally acknowledge and represent
that each: (a) has fully and carefully read and considered this
Agreement; (b) has been or has had the opportunity to be fully
apprised of its attorneys of the legal effect and meaning of this
document and all terms and conditions hereof; and (c) is executing
this Agreement voluntarily, free from any influence, coercion or
duress of any kind.
IN WITNESS WHEREOF, the corporate parties hereto have caused
this Agreement to be executed by their respective officers,
hereunto duly authorized, and entered into as of the date first
above written.
SDT HOLDING CORPORATION
ATTEST:
s/Darlene D. Kell By: s/Andrew I. Telsey
Secretary or Andrew I. Telsey, President
Assistant Secretary
ATTEST: EUROPEAN BUSINESS GROUP (UK) PLC.
s/Haakon S. Walvik By: s/Carsten Iversen
Secretary or Carsten Iversen, Chairman
Assistant Secretary
EBG SHAREHOLDERS
NORTHBRIDGE FINANCE LIMITED
By: s/Ole R. Jespersen
For and on behalf of Closeby Ltd. and Faraway Ltd.
Its: Directors
ROSEWORTH FINANCIAL SERVICES LIMITED
By: s/Ole R. Jespersen
For and on behalf of Closeby Ltd. and Faraway Ltd.
Its: Directors
27
<PAGE>
EXHIBIT "A"
LIST OF EBG SHAREHOLDERS
28
<PAGE>
Name of Shareholders of EBG:
Northbridge Finance Limited (50%)
Roseworth Financial Services (50%)
29
<PAGE>
EXHIBIT "B"
FORM OF INVESTMENT LETTER
30
<PAGE>
INVESTMENT LETTER
October 30, 1996
SDT Holding Corporation
2851 S. Parker Road, Suite 720
Aurora, Colorado 80014
Gentlemen:
The undersigned herewith deposits certificate(s) for shares of
common stock of European Business Group Plc., an English
corporation, ("EBG"), as described below (endorsed, or having
executed stock powers attached) in acceptance of and subject to the
terms and conditions of that certain Agreement and Plan of
Reorganization (the "Agreement"), between EBG and SDT Holding
Corporation ("SDT" or the "Company"), dated October 30, 1996,
receipt of which is hereby acknowledged, in exchange for shares of
Common Stock of SDT (the "Exchange Shares"). If any condition
precedent to the Agreement is not satisfied within the relevant
time parameters established in the Agreement (or any extension
thereof), the certificate(s) are to be returned to the undersigned.
The undersigned hereby represents, warrants, covenants and agrees
with you that, in connection with the undersigned's acceptance of
the Exchange Shares and as of the date of this letter:
1. The undersigned is aware that its acceptance of the
Exchange Shares is irrevocable, absent an extension of the
Expiration Date of any material change to any of the terms and
conditions of the Agreement.
2. The undersigned warrants full authority to deposit all
shares referred to above and that SDT will acquire a good and
unencumbered title thereto.
3. The undersigned is a corporation in good standing in the
jurisdiction in which it was incorporated and the officer of such
corporation has full power and authority to enter into this
agreement and that this agreement constitutes a valid and legally
binding obligation of the undersigned entity.
4. By execution hereof, the undersigned hereby confirms that
the SDT common stock to be received in exchange for EBG common
stock (the "Securities"), will be acquired for investment for the
undersigned's own account, not as a nominee or agent, and not with
a view to the resale or distribution of any part thereof, and that
the undersigned has no present intention of selling, granting any
participation in, or otherwise distributing the same. By execution
hereof, the undersigned further represents the undersigned does not
have any contract, undertaking, agreement or arrangement with any
31
<PAGE>
third party, with respect to any of the Securities.
5. The undersigned understands that the Securities are being
issued pursuant to available exemption thereto and have not been
registered under the Securities Act of 1933, as amended (the "1933
Act"), or under any state securities laws. The undersigned
understands that no registration statement has been filed with the
United States Securities and Exchange Commission nor with any other
regulatory authority and that, as a result, any benefit which might
normally accrue to a holder such as me by an impartial review of
such a registration statement by the Securities and Exchange
Commission or other regulatory authority will not be forthcoming.
The undersigned understands that he/she/it cannot sell the
Securities unless such sale is registered under the 1933 Act and
applicable state securities laws or exemptions from such
registration become available. In this connection the undersigned
understands that the Company has advised the Transfer Agent for the
Common Shares that the Securities are "restricted securities" under
the 1933 Act and that they may not be transferred by the
undersigned to any person without the prior consent of the Company,
which consent of the Company will require an opinion of my counsel
to the effect that, in the event the Securities are not registered
under the 1933 Act, any transfer as may be proposed by the
undersigned must be entitled to an exemption from the registration
provisions of the 1933 Act. To this end, the undersigned
acknowledges that a legend to the following effect will be placed
upon the certificate representing the Securities and that the
Transfer Agent has been advised of such facts:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE OFFERED
AND SOLD ONLY IF REGISTERED PURSUANT TO HE PROVISIONS OF
THE ACT OR IF AN EXEMPTION FROM REGISTRATION THEREUNDER
IS AVAILABLE, THE AVAILABILITY OF WHICH MUST BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
The undersigned understands that the foregoing legend on the
undersigned's certificate for the Common Shares limits their value,
including their value as collateral.
6. The undersigned represents that it is experienced in
evaluation and investing in securities of companies and
acknowledges that it is able to fend for itself, can bear the
economic risk of this investment and has such knowledge and
experience in financial and business matters that it is capable of
evaluating the merits and risks of the investment in the
Securities.
In Witness Whereof, the undersigned has duly executed this
Investment Letter as of the date indicated hereon.
Dated: October 30, 1996
32
<PAGE>
Very truly yours,
(name of corporation) Attest:
By:
President Secretary
Address to which correspondence
should be sent:
___________________________
(address)
____________________________
(address)
33
<PAGE>
SDT HOLDING CORPORATION
EXHIBIT 16.0 TO FORM 8-K
LETTER OF RESIGNATION
OF REGISTRANT'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
<PAGE>
KISH, LEAKE & ASSOCIATES, P.C.
Certified Public Accountants
J.D. Kish, C.P.A., M.B.A. 7901 E. Belleview Ave., Suite 220
James D. Leake, C.P.A., M.T. Englewood, Colorado 80111
____________________________ Telephone (303) 779-5006
Arleen R. Brogan, C.P.A. Facsimile (303) 779-5724
November 14, 1996
Securities and Exchange Commission
450 5th Street N.W.
Washington, D.C. 20549
We would like to inform you that we have read the disclosures provided by SDT
Holding Corporation in its filing of Form 8-K dated November 14, 1996 and that
there are no disagreements regarding the statements made under Item 4 - Changes
in Registrant's Certifying Accountant.
Sincerely,
Kish, Leake & Associates, P.C.
Kish, Leake & Associates, P.C.
<PAGE>
SDT HOLDING CORPORATION
EXHIBIT 17.1 TO FORM 8-K
LETTER OF RESIGNATION
OF ANDREW I. TELSEY
<PAGE>
TO THE BOARD OF DIRECTORS OF
SDT HOLDING CORPORATION
Gentlemen:
I hereby submit my resignation as President and as a Director
of SDT Holding Corporation effective this date.
s/Andrew I. Telsey
Andrew I. Telsey
Dated: Oct. 30, 1996
<PAGE>
SDT HOLDING CORPORATION
EXHIBIT 17.2 TO FORM 8-K
LETTER OF RESIGNATION
OF DARLENE D. KELL
<PAGE>
October 30, 1996
TO THE BOARD OF DIRECTORS OF
SDT HOLDING CORPORATION
Gentlemen:
I hereby submit my resignation as Secretary of SDT Holding
Corporation effective this date.
s/Darlene D. Kell
Darlene D. Kell
<PAGE>
SDT HOLDING CORPORATION
EXHIBIT 17.3 TO FORM 8-K
LETTER OF RESIGNATION
OF BRAD WEIMAN
<PAGE>
October 30, 1996
TO THE BOARD OF DIRECTORS OF
SDT HOLDING CORPORATION
Gentlemen:
I hereby submit my resignation as a Director of SDT Holding
Corporation effective this date.
s/Brad Weiman
Brad Weiman
<PAGE>
SDT HOLDING CORPORATION
EXHIBIT 17.4 TO FORM 8-K
LETTER OF RESIGNATION
OF R. MICHEL PERLMUTTER
<PAGE>
October 30, 1996
TO THE BOARD OF DIRECTORS OF
SDT HOLDING CORPORATION
Gentlemen:
I hereby submit my resignation as a Director of SDT Holding
Corporation effective this date.
s/R. Michel Perlmutter
R. Michel Perlmutter
