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: February 19, 1999
MERCHANTONLINE.COM, INC.
------------------------
(Exact name of registrant as specified in its charter)
TARCYN CORPORATION
------------------
(Former Name of Registrant)
COLORADO
--------
(Former State or other jurisdiction of incorporation)
FLORIDA
-------
(Current state of incorporation)
0-22607 84-1233073
------- ----------
(Commission File No.) (IRS Employer
Identification No.)
1600 S. Dixie Highway
Boca Raton, FL 33432
- ---------------------------------------- ---------
(Address of principal executive offices) (Zip code)
2851 S. Parker Road
Suite 720
Aurora, Colorado 80014
--------------------------
(Former principal address)
Registrant's telephone number, including area code: (561) 395-3585
<PAGE>
Item 1(a). Change in Control of Registrant.
Effective February 16, 1999, pursuant to a definitive
agreement (attached hereto and incorporated herein as Exhibit 2.4)
(the "Agreement"), Tarcyn Corporation (the "Company") acquired all
of the issued and outstanding securities of CreditCo, Inc.
("Creditco"), a Delaware corporation. The terms of the transaction
involved the Company undertaking a forward split of its issued and
outstanding common stock whereby 3.5 shares of common stock were
issued in exchange for every share of common stock outstanding
immediately prior to the closing of the transaction in order to
establish the number of issued and outstanding common shares of the
Company at closing to be 1,750,000. Thereafter, the Company issued
an aggregate of 15,750,000 shares of its "restricted" common stock
to the former shareholders of Creditco in exchange for all of their
stock in Creditco. Creditco did not survive the transaction. The
Company also changed its name to "MerchantOnline.com, Inc."
Pursuant to the terms of the Agreement the Company's
officers and directors, Andrew I. Telsey and Darlene D. Kell,
resigned their respective positions in the Company and the
following person was appointed as the new officer and/or director
of the Company:
NAME OFFICE
----------------- -------------------------------
Tarek S. Kirschen Chairman of Board, President
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:
Percent
Name and Address of Amount and Nature of of
Beneficial Owner Beneficial Ownership Class
- ------------------- -------------------- -----
Tarek S. Kirschen 9,450,000 54%
5390 214th Court South
Boca Raton, FL 33486
Steven E. Landau 4,725,000 27%
2 Winston Court
Dix Hills, NY 11746
All Directors 9,450,000 54%
and Officers as a
Group (1 person)
___________________
Mr. Kirschen is Mr. Landau's son-in-law.
2
<PAGE>
Item 2. Acquisition or Disposition of Assets.
Effective February 16, 1999, the Company acquired all of
the issued and outstanding securities of Creditco, consisting of
100 shares of common stock, par value $.001 per share. The nature
and amount of consideration given in connection with the agreement
was the issuance of 15,750,000 shares of "restricted" common stock
of the Company to the former Creditco shareholders. The
consideration given and received was determined by arms-length
negotiations between the principals of the Company and principals
of Creditco. No material relationship existed or presently exists
between management of the companies.
As part of the material terms of the Agreement, the
Company changed its name to "MerchantOnline.com, Inc." ("MOL" or
the "Company") and changed its jurisdiction of incorporation from
Colorado to Florida. The Company's principal business is to
provide a diverse selection of services which it has developed to
allow Internet merchants to quickly and easily establish a method
of conducting business on the Internet with a minimal initial
investment and with low transaction costs. MOL intends to attempt
to take advantage of the anticipated enormous growth of the
Internet by providing an electronic payment solution for merchants
that market and sell their products and services on the Internet.
The electronic commerce services ("E-commerce") provided by MOL
include allowing merchants to accept credit cards, debit cards and
online checks from customers in a secure, technologically advanced
environment. MOL is currently a single source of customer service
which offers a variety of Internet services including electronic
shopping carts, web site development and hosting, merchant accounts
and real-time credit card processing in a single package for one
installation fee and only one, combined monthly billing. To date,
most of MOL's revenues have been generated from credit card
transactions. It charges an installation fee of $495, as well as
a transaction fee, depending upon the nature of the product and/or
service provided.
MOL has developed proprietary real-time credit card
processing programs which it calls MOLcharge, which management
believes meets or exceeds the capabilities of all currently
available software. It intends to provide small and medium sized
merchants with a single vendor that furnishes everything needed to
begin participating in E-commerce. Its proposed client base
includes merchants that already have merchant bankcard accounts
that require real-time processing only.
CreditCo commenced marketing its business in February
1998 and in September 1998, it began offering complete services to
allow merchants to become active on the Internet. It is currently
processing approximately 25,000 transactions per month and while no
assurances can be provided, it has targeted 100,000 processed
transactions per month by June, 1999. In its initial fiscal year
3
<PAGE>
of operations, it generated gross revenues of approximately
$507,000.
In addition, as part of the terms of the Agreement, the
Company has changed its fiscal year end from March 31, to October
31, in order to coincide with the fiscal year end of CreditCo.
Item 4. Changes in Registrant's Certifying Accountant.
On February 17, 1999, 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 a going concern opinion.
Also on February 18, 1999, the Registrant engaged the
accounting firm of Millward & Co., independent public accountants,
to audit the Registrant's fiscal year ended October 31, 1999, as
well as future financial statements, to replace the firm of Kish,
Leake & Associates, P.C., which was the principal independent
public accountant as reported in the Registrant's Form 10-KSB for
the fiscal year ended March 31, 1998, 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 February 19, 1999, is filed as Exhibit
16.1 to this Form 8-K.
Item 7(a) and 7(b). Financial Statements and Pro Forma Financial
Statements
The audited financial statements of Creditco for the
fiscal year ended October 31, 1998 and the pro forma financial
statements of the consolidated entities dated October 31, 1998,
1999 are attached hereto.
4
<PAGE>
Item 7(c). Exhibits.
Number Exhibit
------ -------
2.4 Agreement and Plan of Reorganization between
the Company and Creditco, Inc.
3.3 Articles of Incorporation reincorporating
the Company in the State of Florida
16.1 Letter of Resignation of Registrant's
independent certified accountant, Kish, Leake
& Associates, P.C.
27.0 Financial Data Schedule
5
<PAGE>
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.
MERCHANTONLINE.COM, INC.
By:s/ Tarek S. Kirschen
---------------------------
Tarek S. Kirschen,
President
Dated: February 19, 1999
<PAGE>
CREDITCO, INC
d/b/a/ MERCHANT ONLINE
FINANCIAL STATEMENTS
From Inception (November 20, 1977) to October 31, 1998
<PAGE>
CREDITCO, INC
d/b/a/MERCHANT ONLINE
FINANCIAL STATEMENTS
From Inception (November 20, 1977) to October 31, 1998
CONTENTS
Page
Independent Auditor's Report 2
Financial Statements:
Balance Sheet 3
Statement of Operations and Accumulated Deficit 4
Statement of Cash Flows 5
Notes to Financial Statements 6-8
-1-
<PAGE>
To the Stockholder
Creditco, Inc. d/b/a Merchant Online
Boca Raton, Florida
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheet of Creditco, Inc. d/b/a
Merchant Online as of October 31, 1998 and the related statements of
operation, and accumulated deficit, and cash flows for the period from
inception (November 20, 1997) to October 31, 1998. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Creditco, Inc. d/b/a Merchant
Online as of October 31, 1998 and the results of its operations and its cash
flows for the initial period then ended in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company has incurred a net loss from operations of
$225,332, and has a net capital deficiency of $175,332, and a working capital
deficiency of $162,732 as of October 31, 1998, which raise substantial doubt
about its ability to continue as a going concern. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty. Management's plans as to these matters are included in Note 3.
Millward & Co. CPAs
Fort Lauderdale, Florida
December 22, 1997
(Except for Note 5 as to which
the date is February 3, 1999)
-2-
<PAGE>
<TABLE>
CREDITCO, INC.
d/b/a MERCHANT ONLINE
BALANCE SHEET
October 31, 1998
<CAPTION>
ASSETS
<S> <C>
CURRENT ASSETS
Cash $ 2,499
Accounts Receivable 12,362
---------
Total Current Assets 14,861
---------
Furniture and Equipment:
Computer Equipment and Software 71,826
Furniture and Fixtures 5,915
Telephone Equipment 5,052
---------
Total Furniture and Equipment 82,793
Less Accumulated Depreciation (11,958)
---------
Net Furniture and Fixtures 70,835
---------
Other Assets - Security Deposits 6,565
Total Assets $ 92,261
=========
LIABILITIES AND STOCKHOLDER'S DEFICIT
CURRENT LIABILITIES
Loan Payable to Stockholder $ 34,026
Accounts Payable 128,044
Accrued Commission Payable 15,523
Note Payable - Demand- Non-interest bearing 90,000
---------
Total Current Liabilities 267,593
---------
Total Liabilities 267,593
---------
Stockholders' (Deficit):
Common Stock $.001 par value,
1,000 Shares Authorized;
100 Shares Issued and Outstanding -
Additional Paid in Capital 50,000
Accumulated (Deficit) (225,332)
---------
Total Stockholders' (Deficit) (175,332)
---------
Total Liabilities and Stockholders' Deficit $ 92,261
=========
</TABLE>
-3-
<PAGE>
<TABLE>
CREDITCO, INC.
d/b/a MERCHANT ONLINE
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
From Inception (November 20, 1997) to October 31, 1998
<S> <C>
Revenues $ 506,989
Cost of Revenues 381,464
----------
Gross Profit 125,525
Less Expenses:
Advertising 9,432
Contractors 85,394
Depreciation 11,958
Other General and Administrative 66,832
Rent 18,618
Telephone and Fax 21,903
Wages 133,763
----------
Total Operating Expenses 347,900
----------
(Loss) from Operations (222,375)
Other Income (Expense)
Interest Expense (3,106)
Interest Income 149
----------
Total Other (Expenses) (2,957)
Net (Loss) (225,332)
Retained Earnings - January 1, 1998 -
----------
Accumulated Deficit - October 31, 1998 $ (225,332)
==========
</TABLE>
-4-
<PAGE>
<TABLE>
CREDITCO, INC.
d/b/a MERCHANT ONLINE
STATEMENT OF CASH FLOWS
From Inception (November 20, 1997) to October 31, 1998
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Loss) $ (225,332)
Adjustments to Reconcile Net (Loss) to Net Cash
Provided by Operating Activities:
Depreciation 11,958
Increase in Accounts Receivable (12,362)
Increase in Other Assets (6,565)
Increase in Accounts Payable 128,044
Increase in Accrued Commission 15,523
----------
Net Cash (Used in) Operating Activities (88,734)
----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Furniture and Equipment (82,793)
----------
Net Cash (Used in) Investing Activities (82,793)
----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds of Loan Payable -Stockholder 34,026
Proceeds from Issuance of Stock 50,000
Proceeds of Note Payable 90,000
----------
Net Cash Provided by Financing Activities 174,026
----------
Net Increase in Cash 2,499
Cash at Beginning of Period -
----------
Cash at end of period $ 2,499
==========
Supplemental Disclosure of Cash Flow Information:
Cash Paid for Interest $ 3,106
==========
</TABLE>
-5-
<PAGE>
CREDITCO, INC
d/b/a MERCHANT ONLINE
NOTES TO FINANCIAL STATEMENTS
October 31, 1998
NOTE 1 - NATURE OF OPERATIONS
--------------------
Nature of Operations
- --------------------
Creditco, Inc. d/b/a Merchant Online (the "Company") was incorporated in the
State of Delaware on November 20, 1997. The Company provides real time credit
card processing, merchant services and shopping carts for companies doing
business on the web.
The Company's fiscal year ends October 31.
Income Recognition
- ------------------
Revenues consist of sales recorded through the Company's merchant account and
fees earned on the processing of credit card transactions.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
This summary of significant accounting policies is presented to assist in
understanding these financial statements. The financial statements and notes
are representations of management, who is responsible for their integrity and
objectivity. The accounting policies used, unless otherwise noted, conform
to generally accepted accounting principles and have been consistently
applied in the preparation of financial statements.
Cash and Cash Equivalents
- -------------------------
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with an original maturity of three months or
less to be cash equivalents. As of December 31, 1998, the Company had no cash
equivalents.
Financial Instruments and Concentration of Credit Risk
- ------------------------------------------------------
Financial instruments which potentially subject the Company to concentrations
of credit risk, are primarily cash and accounts receivable. The Company has
not experienced any losses in such accounts. The Company believes it is not
exposed to any significant credit risk on cash and cash equivalents or
accounts receivable.
-6-
<PAGE>
CREDITCO, INC
d/b/a MERCHANT ONLINE
NOTES TO FINANCIAL STATEMENTS
October 31, 1998
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
------------------------------------------------------
Furniture and Equipment
- -----------------------
Furniture and equipment is carried at cost, net of accumulated depreciation.
Depreciation is computed using the straight-line method over the useful lives
of the assets. Estimated depreciable lives range from 5 to 7 years. The cost
of maintenance and repairs is charged to expenses as incurred. Depreciation
for the year amounted to $11,958.
Income Taxes
- ------------
The Company is a C Corporation for income tax purposes. The Company incurred
a net loss of $225,332 in the initial period of operations. This loss can be
used to offset future taxable income and will expire in 2018.
Use of Estimates
- ----------------
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, and
disclosure of contingent assets and liabilities, at the date of the financial
statements and the reported amount of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
New Accounting Pronouncement
- ----------------------------
SFAS No. 130, "Reporting Comprehensive Income," is effective for fiscal years
beginning after December 15, 1997. This statement establishes standards for
reporting and display of comprehensive income and its components in a full set
of general-purpose financial statements. Management has not evaluated the
impact this statement will have on the Company's financial position and
results of operations.
NOTE 3 - GOING CONCERN
-------------
As shown in the accompanying financial statements, the Company incurred a net
loss of $225,332 during the period of inception January 1, 1998 to October 31,
1998, and as of that date, the Company's current liabilities exceeded its
current assets by $162,732. The ability of the Company to continue as a going
concern is dependent on increasing sales and obtaining additional capital and
financing. The financial statements do not include any adjustments that might
be necessary if the Company is unable to continue as a going concern.
The Company plans, after the proposed merger disclosed in Note 4, to raise
money through an offer of debt or equity. In addition, a related party has
advanced funds of $25,000 subsequent to year end. To provide additional
revenues, the Company has developed a web hosting service. There can be no
assurance that these efforts will be successful.
-7-
<PAGE>
CREDITCO, INC
d/b/a MERCHANT ONLINE
NOTES TO FINANCIAL STATEMENTS
October 31, 1998
NOTE 4 - COMMITMENTS
-----------
The company is a party to a lease for office space providing for monthly
rental of $4,770 (including sales tax) through August 31, 1999.
NOTE 5 - SUBSEQUENT EVENT
----------------
On or about February 3, 1999, the Company entered into a letter of intent with
Tarcyn Corporation (Tarcyn), a publicly held corporation, whereby Tarcyn has
agreed in principle to acquire all of the issued and outstanding shares of the
Company, in exchange for 90% of Tarcyn's common shares outstanding after the
proposed merger. Tarcyn is inactive and has no assets, and the transaction is
expected to be accounted for as a "reverse" merger and recapitalization
transaction.
-8-
<PAGE>
UNAUDITED PROFORMA FINANCIAL STATEMENTS
On February 16, 1999, Tarcyn Corporation (Tarcyn) entered into a transaction
whereby Tarcyn will acquire all of the issued and outstanding shares of
Creditco, Inc. (Creditco) in exchange for 15,750,000 common shares of Tarcyn
stock. Tarcyn had 500,000 shares outstanding prior to the acquisition. In
connection with and prior to this transaction, Tarcyn authorized a "forward
split" whereby three and one-half shares of common stock were issued for each
share outstanding or an aggregate of 1,750,000 common shares. Accordingly,
the shareholders of Creditco will own 90% of the Tarcyn issued and outstanding
shares after the acquisition.
The unaudited proforma information is presented for illustrative purposes only
and is not indicative of the operating results or financial position of future
operating results or financial position.
Tarcyn had no assets or operating activity, accordingly the transaction is
hereby accounted for as a reverse merger and recapitalization on February 16,
1999, for an additional 1,750,000 shares (the outstanding Tarcyn shares) in
exchange for no assets. As a result the shares issued (15,750,000) for
Creditco have been treated as if they were issued since Creditco's inception
(November 20, 1997). Fees of $10,000 for this transaction are being charged
to operations for accounting purposes.
The proforma information has been applied to the October 31, 1998, Creditco
financial statements and should be read in conjunction with the separate
financial statements of Creditco on Tarcyn which appear elsewhere herein.
<PAGE>
<TABLE>
CREDITCO, INC.
d/b/a MERCHANT ONLINE
CONDENSED PROFORMA BALANCE SHEET
October 31, 1998
<CAPTION>
Pro Forma
Historical (Unaudited)
---------- -----------
<S> <C> <C>
ASSETS
Current assets $ 14,861 $ 14,861
Furniture and equipment 70,835 70,835
Other assets 6,565 6,565
---------- ----------
Total Assets $ 92,261 $ 92,261
========== ==========
LIABILITIES AND STOCKHOLDER'S DEFICIT
CURRENT LIABILITIES
Accounts payable $ 128,044 $ 138,044
Loan payable to shareholder 34,026 34,026
Other liabilities 15,523 15,523
Note payable - demand 90,000 90,000
---------- -----------
Total Liabilities 277,593 277,593
---------- -----------
Shareholders' (Deficit):
Common Stock - 50,500
Preferred stock - -
Additional paid in capital 50,000 -
Accumulated deficit (225,332) (235,832)
---------- -----------
Total Shareholders' (Deficit) (175,332) (185,332)
---------- -----------
Total Liabilities and Shareholders' Deficit $ 92,261 $ 92,261
========== ===========
</TABLE>
<PAGE>
<TABLE>
CREDITCO, INC.
d/b/a MERCHANT ONLINE
CONDENSED STATEMENT OF OPERATIONS
Inception (November 20, 1997) to October 31, 1998
<CAPTION>
Pro Forma
Historical (Unaudited)
---------- -----------
<S> <C> <C>
Revenues $ 506,989 $ 506,989
Costs and expenses 732,321 732,321
---------- ----------
Net loss (225,332) (235,332)
========== ==========
Weighted shares outstanding 15,750,000
Net loss per share - basic and diluted $ (.01)
==========
</TABLE>
<PAGE>
CREDITCO, INC
d/b/a MERCHANT ONLINE
NOTES TO UNAUDITED PROFORMA FINANCIAL STATEMENTS
October 31, 1998
1. The unaudited proforma gives effect to the issuance of 17,570,000 Tarcyn
common shares, no par value; 15,750,000 shares since inception and
1,750,000 as of October 31, 1998 to reflect the reverse merger.
2. Accounts payable, the accumulated deficit and costs and expenses give
proforma effect for a $10,000 fee to consummate the transaction.
3. The proforma net loss per share for basic and diluted assume 15,750,000
shares outstanding during the entire period.
<PAGE>
MERCHANTONLINE.COM, INC.
_________________________
EXHIBIT 2.4 TO FORM 8-K
_________________________
AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN THE COMPANY AND
CREDITCO, INC.
_________________________
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
by and between
TARCYN CORPORATION,
a Colorado corporation
and
CREDITCO, INC.,
a Delaware corporation
effective as of February 16, 1999
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION, made and entered
into this 16th day of February 1999, by and between Tarcyn
Corporation, a Colorado corporation ("Tarcyn") with its principal
place of business located at 2851 S. Parker Road, Suite 720,
Aurora, Colorado 80014 and CreditCo, Inc., a Delaware corporation
("Creditco"), with its principal place of business located at 1600
S. Dixie Highway, Boca Raton, FL 33432 ("Creditco").
Premises
WHEREAS, this Agreement provides for the merger of Creditco
into Tarcyn, and in connection therewith, the conversion of the
outstanding common stock of Creditco into shares of common voting
stock of Tarcyn, 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; and
WHEREAS, the boards of directors and shareholders of Creditco
and Tarcyn have determined, subject to the terms and conditions set
forth in this Agreement, that the merger contemplated hereby is
desirable and in the best interests of their respective
corporations. This Agreement is being entered into for the purpose
of setting forth the terms and conditions of the proposed merger.
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
CREDITCO
As an inducement to and to obtain the reliance of Tarcyn,
Creditco represents and warrants as follows:
Section 1.1 Organization. Creditco is a corporation duly
organized, validly existing, and in good standing under the laws of
the State of Delaware 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 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 Creditco Schedules (as hereinafter
1
<PAGE>
defined) are complete and correct copies of the articles of
incorporation, bylaws and amendments thereto of Creditco 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 Creditco's articles of
incorporation or bylaws. Creditco 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. Creditco's total authorized
capital consists of 1,000 Common Shares, par value $.001 per share.
As of the date of Closing, as defined hereinbelow, there will be
100 Common Shares issued and outstanding. 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. Creditco has no other securities, warrants or
options authorized or issued.
Section 1.3 Subsidiaries and Predecessor Corporations. Except
as otherwise set forth in the Creditco Schedules, Creditco does not
have any subsidiaries and does not own, beneficially or of record,
any shares of any other corporation.
Section 1.4 Financial Statements. Included in the Creditco
Schedules is an audited financial statement, including a balance
sheet, statement of operations, shareholder equity and cash flows
and notes thereto, dated as of October 31, 1998. Relevant thereto:
(a) the Creditco balance sheets present fairly as
of their date the financial condition of Creditco.
Creditco does not have, as of the date of such balance
sheets, 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 Creditco, in accordance
with generally accepted accounting principles;
(b) Creditco has no liabilities with respect to the
payment of any federal, state, county, local or other
taxes (including any deficiencies, interest or
penalties), except for taxes accrued but not yet due and
payable;
(c) Creditco has filed all state, federal and local
income tax returns required to be filed by it from
inception to the date hereof, if any;
2
<PAGE>
(d) The books and records, financial and others, of
Creditco 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 Creditco balance sheet and the Creditco
Schedules, Creditco has no material contingent
liabilities, direct or indirect, matured or unmatured.
Section 1.5 Information. The information concerning Creditco
set forth in this Agreement and in the Creditco 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
Creditco 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 Creditco Schedules, or as
otherwise disclosed to Tarcyn, since October 31, 1998:
(a) there has not been: (i) any material adverse
change in the business, operations, properties, assets or
condition of Creditco; or (ii) any damage, destruction or
loss to Creditco (whether or not covered by insurance)
materially and adversely affecting the business,
operations, properties, assets or condition of Creditco;
(b) Creditco 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
Creditco; (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
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,
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payment or arrangement made to, for, or with its
officers, directors or employees;
(c) Creditco 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 Creditco 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
Creditco; 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 Creditco, 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 Creditco.
Section 1.8 Title and Related Matters. Creditco 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 Creditco audited balance sheet and the Creditco
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 Creditco Schedules. Except as set forth in the
Creditco Schedules, Creditco 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
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or other information utilized in connection with Creditco's
business. Except as set forth in the Creditco Schedules, no third
party has any right to, and Creditco 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 Creditco or any material portion of its properties,
assets or rights.
Section 1.9 Litigation and Proceedings. To the best of
Creditco's knowledge and belief, there are no actions, suits,
proceedings or investigations pending or threatened by or against
Creditco or affecting Creditco 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 Creditco. Creditco
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 Creditco
Schedules, there are no material contracts, agreements,
franchises, license agreements or other commitments to
which Creditco 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 Creditco
Schedules or reflected in the most recent Creditco
balance sheet, Creditco 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
Creditco 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 $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
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$10,000 in the aggregate; (vi) collective bargaining
agreements; (vii) agreement with any present or former
officer or director of Creditco; or (viii) contract,
agreement or other commitment involving payments by it
of more than $10,000 in the aggregate; and
(c) To Creditco's knowledge, all contracts,
agreements, franchises, license agreements and other
commitments to which Creditco is a party or by which its
properties are bound and which are material to the
operations of Creditco taken as a whole, are valid and
enforceable by Creditco 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. Except as set forth
in the Creditco Schedules, to the best of Creditco's knowledge and
belief, Creditco 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 Creditco, and there is no event
of default in any material respect under any such contract,
agreement, lease or other commitment in respect of which Creditco
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 Creditco
is a party or to which any of its properties or operations are
subject.
Section 1.13 Governmental Authorizations. To the best of
Creditco's knowledge, Creditco has all licenses, franchises,
permits or other governmental authorizations legally required to
enable Creditco to conduct its business in all material respects as
conducted on the date hereof. Except for compliance with federal
and state securities and 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 Creditco
of this Agreement and the consummation by Creditco of the
transactions contemplated hereby.
Section 1.14 Compliance With Laws and Regulations. To the
best of Creditco's knowledge, except as disclosed in the Creditco
Schedules, Creditco 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
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materially and adversely affect the business, operations,
properties, assets or condition of Creditco or would not result in
Creditco's incurring any material liability.
Section 1.15 Insurance. All of the insurable properties of
Creditco are insured for Creditco's benefit in accordance with the
insurance policies disclosed in the Creditco 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 Creditco has authorized the execution and delivery of this
Agreement by Creditco, has approved the transactions contemplated
hereby and approved the submission of this Agreement and the
transactions contemplated hereby to the stockholders of Creditco
for their unanimous approval with the recommendation that the
merger be accepted.
Section 1.17 Material Transactions or Affiliations. Except
as disclosed herein and in the Creditco Schedules, there exists no
material contract, agreement or arrangement between Creditco 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 Creditco to own beneficially, ten
percent (10%) or more of the issued and outstanding Creditco 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 Creditco than
terms available from otherwise unrelated parties in arms length
transactions. There are no commitments by Creditco, 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. Creditco has never had a work
stoppage resulting from labor problems. To the best knowledge of
Creditco, no union or other collective bargaining organization is
organizing or attempting to organize any employee of Creditco.
Section 1.19 Previous Sales of Securities. Since inception,
Creditco has sold Creditco Common Shares to investors in reliance
upon applicable exemptions from the registration requirements under
the laws of the United States, the state of Florida and such other
states in the United States where such sales have occurred. All
such sales were made in accordance with the laws of the United
States and those states where such securities were sold.
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Section 1.20 Creditco Schedules. Upon execution hereof,
Creditco will deliver to Tarcyn the following schedules, which are
collectively referred to as the "Creditco 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 Creditco as complete, true and
correct in all material respects:
(a) copies of the articles of incorporation, bylaws
and all minutes of shareholders' and directors' meetings
of Creditco;
(b) the financial statements of Creditco referenced
hereinabove in Section 1.4;
(c) a list indicating the name and address of the
stockholders of Creditco, 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 Creditco carries on or
proposes to carry on its business (except those which in
the aggregate, are immaterial to the present or proposed
business of Creditco);
(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
Creditco, its properties or assets;
(f) a list of all executive employees of Creditco,
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 Creditco, 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 Creditco 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 Creditco has an account or safety
deposit box and the names of all persons authorized to
draw thereon or having access thereto;
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(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 Creditco and in which either Creditco or Creditco's
stockholders has or previously had any direct or
indirect, equitable or legal right or interest;
(k) a copy of all material documentation relating
to the sale of Creditco Common Shares by Creditco 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 Creditco since the most recent Creditco
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 Creditco Schedules by Sections 1.1 through 1.19.
Creditco shall cause the Creditco Schedules and the
instruments and data delivered to Tarcyn 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 TARCYN
As an inducement to, and to obtain the reliance of Creditco,
Tarcyn represents and warrants as follows:
Section 2.1 Organization. Tarcyn 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 Tarcyn Schedules (as hereinafter defined) are
complete and correct copies of the articles of incorporation, and
bylaws of Tarcyn as in effect on the date hereof. The execution
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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 Tarcyn's articles
of incorporation or bylaws. Tarcyn has taken all action required
by law, its articles of incorporation, its bylaws or otherwise to
authorize the execution and delivery of this Agreement. Tarcyn 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.
Section 2.2 Capitalization. The authorized capitalization of
Tarcyn consists of 25,000,000 shares of Preferred Stock, par value
$0.01 per share, and 100,000,000 Common Shares, no par value per
share. As of the date hereof there are 500,000 common shares of
Tarcyn issued and outstanding. Simultaneous with the Closing Date,
as defined hereinbelow, the Board of Directors of Tarcyn shall
undertake a forward split of the Tarcyn issued and outstanding
Common Stock, whereby 3.5 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 1,750,000. As of the Closing Date,
as defined herein, there will be no more than 1,750,000 common
shares issued and outstanding and reserved for issuance (the
"Tarcyn Common Shares") held by the then existing securities
holders of Tarcyn. All issued and outstanding Tarcyn Common Shares
have been legally issued, fully paid and are nonassessable. There
are no preferred shares issued or outstanding. All issued and
outstanding Tarcyn Common Shares have been legally issued, fully
paid and are nonassessable.
Section 2.3 Subsidiaries. Tarcyn has no subsidiary
companies.
Section 2.4 Financial Statements.
(a) Included in the Tarcyn Schedules are the
audited financial statements of Tarcyn for the years
ended March 31, 1997 and 1996 and the unaudited financial
statements of Tarcyn for the nine month period ended
December 31, 1998 and the related statements of
operations, stockholders' equity and cash flows for the
periods 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 Tarcyn balance sheets presents fairly as
of their respective dates the financial condition of
Tarcyn. Tarcyn did not have as of the date of any of
such Tarcyn balance sheets, any liabilities or
obligations (absolute or contingent) which should be
reflected in a balance sheet or the notes thereto
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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
Tarcyn, 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
Tarcyn are in all material respects complete and correct
and have been maintained in accordance with good business
accounting practices.
(d) Tarcyn has no liabilities with respect to the
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
Tarcyn balance sheet and the notes thereto, shall reflect
that Tarcyn 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 Tarcyn
as set forth in this Agreement and in the Tarcyn 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 Tarcyn Schedules, since December 31,
1998:
(a) Tarcyn 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 Tarcyn; (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) Tarcyn 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; or (ii)
borrowed or agreed to borrow any funds or incurred or
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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 Tarcyn, 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 Tarcyn.
Section 2.7 Title and Related Matters. As of the Closing
Date, Tarcyn 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 Tarcyn's
knowledge and belief, threatened by or against or affecting Tarcyn,
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 effect on the
business, operations, financial condition, income or business
prospects of Tarcyn. Tarcyn 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:
(a) There are no material contracts, agreements,
franchises, license agreements, or other commitments to
which Tarcyn is a party or by which it or any of its
properties are bound;
(b) Tarcyn is not 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
Tarcyn can now foresee) materially and adversely affect,
the business, operations, properties, assets or
conditions of Tarcyn; and
(c) Tarcyn is not 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
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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 Tarcyn; 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 Tarcyn is
a party or to which any of its properties or operations are
subject.
Section 2.11 Material Contract Defaults. To the best of
Tarcyn's knowledge and belief, Tarcyn 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 Tarcyn,
and there is no event of default in any material respect under any
such contract, agreement, lease or other commitment in respect of
which Tarcyn has not taken adequate steps to prevent such a default
from occurring.
Section 2.12 Governmental Authorizations. To the best of
Tarcyn's knowledge, Tarcyn 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 Tarcyn
of the transactions contemplated hereby.
Section 2.13 Compliance With Laws and Regulations. To the
best of Tarcyn's knowledge and belief, Tarcyn 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 Tarcyn or
would not result in Tarcyn's incurring any material liability.
Section 2.14 Insurance. Tarcyn 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
and shareholders of Tarcyn has authorized the execution and
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delivery of this Agreement by Tarcyn and have approved the
transactions contemplated hereby.
Section 2.16 Material Transactions or Affiliations. As of
the Closing Date there will exist no material contract, agreement
or arrangement between Tarcyn 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 Tarcyn to own beneficially,
ten percent (10%) or more of the issued and outstanding common
stock of Tarcyn and which is to be performed in whole or in part
after the date hereof. Tarcyn 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.
Section 2.17 Labor Relations. Tarcyn has never had a work
stoppage resulting from labor problems. Tarcyn has no employees
other than its officers and directors.
Section 2.18. 34 Act Filings. As of the Closing Date, Tarcyn
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. Said filings contain all of the information required
pursuant to the Securities Exchange Act of 1934, as amended and, to
the best knowledge of Tarcyn, do not fail to state any material
facts which were required to be so stated.
Section 2.19 Tarcyn Schedules. Upon execution hereof, Tarcyn
shall deliver to Creditco the following schedules, which are
collectively referred to as the "Tarcyn Schedules" which are dated
the date of this Agreement, all certified by an officer of Tarcyn
to be complete, true and accurate:
(a) complete and correct copies of the articles of
incorporation and bylaws of Tarcyn as in effect as of the
date of this Agreement;
(b) copies of all financial statements of Tarcyn
identified in Section 2.4(a);
(c) the description of any material adverse change
in the business, operations, property, assets, or
condition of Tarcyn since December 31, 1998 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 Tarcyn Schedules by Sections 2.1 through 2.17.
Tarcyn shall cause the Tarcyn Schedules and the
instruments to be delivered to Creditco hereunder to be updated
after the date hereof up to and including the Closing Date.
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ARTICLE III.
MERGER
Section 3.1 Delivery of Creditco Securities. On the Closing
Date, the holders of the Creditco Common Shares shall deliver to
Tarcyn (i) certificates or other documents evidencing all of the
issued and outstanding Creditco 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 "A".
Section 3.2 Issuance of Tarcyn Common Shares. (a) In
exchange for all of the Creditco Common Shares tendered pursuant to
Section 3.1, Tarcyn shall issue an aggregate of 15,750,000
"restricted" Tarcyn Common Shares to the Creditco shareholders on
a pro rata basis, so that the Creditco shareholders will own 90% of
the surviving company's issued and outstanding common stock.
(b) No fractional Tarcyn 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.
Section 3.3 Events Prior to Closing. Upon execution hereof
or as soon thereafter as practical, management of Tarcyn and
Creditco 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" or the "Closing
Date") of the transaction contemplated by this Agreement shall be
as of the date in which all of the conditions included in Sections
3.1 and 3.2 hereinabove and those additional conditions contained
in Article V hereinbelow have been satisfied by the respective
party 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 Tarcyn or Creditco at any time prior to
the Closing Date if:
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(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 merger 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
Tarcyn if Creditco 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 Creditco 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
Creditco. 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.
(c) This Agreement may be terminated at any time prior
to the Closing Date by action of the board of directors of
Creditco if Tarcyn 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 Tarcyn 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 Tarcyn. 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 Tarcyn. Upon the Closing, the
present members of Tarcyn's Board of Directors shall tender their
resignations seriatim so that the following persons are appointed
16
<PAGE>
directors of Tarcyn in accordance with procedures set forth in the
Tarcyn bylaws: Tarek S. Kirschen (who shall be appointed Chairman
of the Board of Directors). 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 Tarcyn. Upon the Closing, the present
officers of Tarcyn shall tender their resignations and simultaneous
therewith, the following person shall be elected as officer of
Tarcyn in accordance with procedures set forth in the Tarcyn
bylaws:
NAME OFFICE
Tarek S. Kirschen CEO/President
ARTICLE IV.
SPECIAL COVENANTS
Section 4.1 Access to Properties and Records. Tarcyn and
Creditco will each afford to the officers and authorized
representatives of the other full access to the properties, books
and records of Tarcyn and Creditco, as the case may be, in order
that each may have full opportunity to make such reasonable
investigation as it shall 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 Tarcyn and Creditco, 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 Tarcyn 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. Tarcyn is
under no obligation to register such shares under the Securities
Act, or otherwise. Notwithstanding the foregoing, however,
following the Closing Date, Tarcyn will use its best efforts to:
(a) make publicly available on a regular basis not less than semi-
annually, business and financial information regarding Tarcyn so as
to make available to the shareholders of Tarcyn 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 Tarcyn,
Tarcyn will provide to such stockholder written confirmation of
compliance with such of the foregoing subparagraph as may then be
applicable. The stockholders of Tarcyn holding restricted
securities of Tarcyn 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.
17
<PAGE>
Section 4.3 Information for Tarcyn Public Reports. Creditco
will furnish Tarcyn with all information concerning Creditco and
the Creditco Stockholders, including all financial statements,
required for inclusion in any registration statement or public
report intended to be filed by Tarcyn pursuant to the Securities
Act, the Exchange Act, or any other applicable federal or state
law. Creditco covenants that all information so furnished for
either such registration statement or other public release by
Tarcyn, 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 therein not misleading.
Section 4.4 Special Covenants and Representations Regarding
the Tarcyn Common Shares to be Issued in the Merger. The
consummation of this Agreement, including the issuance of the
Tarcyn Common Shares to the stockholders of Creditco 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
Creditco stockholders acquire such securities. In connection with
reliance upon exemptions from the registration and prospectus
delivery requirements for such transactions, at the Closing,
Creditco shall cause to be delivered, and the Creditco stockholders
shall deliver to Tarcyn, the investment letter referenced in
Section 3.1.
Section 4.5 Third Party Consents. Tarcyn and Creditco 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 Tarcyn or
Creditco Schedules or as permitted or contemplated by
this Agreement, Tarcyn and Creditco 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;
18
<PAGE>
(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 Tarcyn nor Creditco 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;
(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) 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
(v) purchase or redeem any shares of its
capital stock, except as disclosed herein.
Section 4.7 Indemnification.
(a) Creditco hereby agrees to indemnify Tarcyn and
each of the officers, agents and directors of Tarcyn as
of the date of execution of this Agreement against any
19
<PAGE>
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 24 months.
(b) Tarcyn and its officers and directors hereby
agrees to indemnify Creditco and each of the officers,
agents, directors and current shareholders of Creditco 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 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 24 months.
Section 4.8 Undertakings of Creditco. Management of
Creditco, who will assume the management of Tarcyn upon Closing,
hereby undertakes to Tarcyn and its shareholders as follow:
(a) to exercise good faith in their efforts to file all
reports required to be filed by the surviving company
herein with the Securities and Exchange Commission or any
other governmental agency, in a timely manner; and
(b) to exercise all due diligence in causing the
surviving company to list its common stock for trading on
any national stock exchange for which the surviving
company may then qualify for such listing.
ARTICLE V.
CONDITIONS PRECEDENT TO OBLIGATIONS
OF TARCYN
The obligations of Tarcyn under this Agreement are subject to
the satisfaction, at or before the Closing Date, of the following
conditions:
20
<PAGE>
Section 5.1 Accuracy of Representations. The representations
and warranties made by Creditco 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 Creditco shall have performed or complied with all
covenants and conditions required by this Agreement to be performed
or complied with by Creditco prior to or at the Closing. Tarcyn
shall be furnished with a certificate, signed by a duly authorized
officer of Creditco and dated the Closing Date, to the foregoing
effect.
Section 5.2 Stockholder Approval. The stockholders of
Creditco shall have approved this Agreement and the transactions
contemplated thereby in accordance with the laws of the State of
Delaware.
Section 5.3 Officer's Certificate. Tarcyn shall have been
furnished with a certificate dated the Closing Date and signed by
a duly authorized officer of Creditco to the effect that no
litigation, proceeding, investigation or inquiry is pending or, to
the best knowledge of Creditco, 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 Creditco Schedules, by or against Creditco which might result
in any material adverse change in any of the assets, properties,
business or operations of Creditco.
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 Creditco.
Section 5.5 Opinion of Counsel to Creditco. Tarcyn shall
receive an opinion dated the Closing Date of James L. Pruden, Esq.,
counsel to Creditco, in substantially the following form:
(a) Creditco is a corporation duly organized,
validly existing, and in good standing under the laws of
the State of Delaware 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.
21
<PAGE>
(b) To the best knowledge of such legal counsel,
the execution and delivery by Creditco 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 Creditco's articles of incorporation or
bylaws or violate any court order, writ, injunction or
decree applicable to Creditco, or its properties or
assets.
(c) The authorized capitalization of Creditco
consists of 1,000 Common Shares, par value $.001 per
share. As of the date of Closing, as defined
hereinbelow, there will be 100 Common Shares issued and
outstanding. All issued and outstanding shares are
legally issued, fully paid and nonassessable and not
issued in violation of the preemptive rights of any
person. To the best knowledge of such legal counsel,
there are no outstanding subscriptions, options, rights,
warrants, convertible securities or other agreements or
commitments obligating Creditco to issue any additional
shares of any class of its capital stock prior to closing
of the transactions contemplated herein.
(d) This Agreement has been duly and validly
authorized, executed and delivered by Creditco.
(e) To the best knowledge of such legal counsel,
except as set forth in the Creditco Schedules, there are
no actions, suits or proceedings pending or threatened by
or against or affecting Creditco 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) Creditco has taken all actions required by the
applicable laws of the State of Delaware to permit the
transfer of the Creditco Common Shares to Tarcyn.
Section 5.6 Other Items. Tarcyn shall have received such
further documents, certificates or instruments relating to the
transactions contemplated hereby as Tarcyn may reasonably request.
ARTICLE VI.
CONDITIONS PRECEDENT TO OBLIGATIONS OF Creditco
The obligations of Creditco under this Agreement are
subject to the satisfaction, at or before the Closing Date (unless
otherwise indicated herein), of the following conditions:
22
<PAGE>
Section 6.1 Accuracy of Representations. The representations
and warranties made by Tarcyn 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 Tarcyn shall have performed and complied with
all covenants and conditions required by this Agreement to be per-
formed or complied with by Tarcyn prior to or at the Closing.
Creditco shall have been furnished with a certificate, signed by a
duly authorized executive officer of Tarcyn and dated the Closing
Date, to the foregoing effect.
Section 6.2 Officer's Certificate. Creditco shall be
furnished with a certificate dated the Closing Date and signed by
a duly authorized officer of Tarcyn to the effect that no litiga-
tion, proceeding, investigation or inquiry is pending or, to the
best knowledge of Tarcyn, 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 Tarcyn Schedules, by or against Tarcyn which might result in
any material adverse change in any of the assets, properties,
business or operations of Tarcyn.
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 Tarcyn.
Section 6.4 Opinion of Counsel to Tarcyn. Creditco shall
receive an opinion dated the Closing Date of Andrew I. Telsey,
P.C., counsel to Tarcyn, in substantially the following form:
(a) Tarcyn 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 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 Tarcyn 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
23
<PAGE>
provision of Tarcyn's articles of incorporation or bylaws
or constitute a default or give rise to a right of
termination, 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 Tarcyn or its
properties or assets.
(c) The authorized capitalization of Tarcyn
consists of 25,000,000 shares of Preferred Stock, par
value $0.01 per share, and 100,000,000 Common Shares, no
par value per share. As of the date hereof and as of the
Closing of the transaction proposed herein, there will be
1,750,000 common shares of Tarcyn issued and outstanding
(post forward split). There are no preferred shares
issued or outstanding. 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 Tarcyn Common Shares to be issued to the
Creditco 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 Tarcyn, 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 Tarcyn Schedules, there are no
actions, suits or proceedings pending or threatened by or
against Tarcyn or affecting Tarcyn'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.
(g) Tarcyn has taken all actions required by the
applicable laws of the state of Colorado to permit the
issuance of the Tarcyn Common Shares to the Creditco
stockholders.
Section 6.5 Compliance with Reporting Requirements. As of
the Closing Date, Tarcyn 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. Said filings contain all of the
information required pursuant to the Securities Exchange Act of
24
<PAGE>
1934, as amended and, to the best knowledge of Tarcyn, do not fail
to state any material facts which were required to be so stated.
Section 6.6 Other Items. Creditco shall have received such
further documents, certificates, or instruments relating to the
transactions contemplated hereby as Creditco 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 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 Tarcyn: Mr. Andrew I. Telsey
2851 S. Parker Road
Suite 720
Aurora, Colorado 80014
If to Creditco: Creditco, Inc.
1600 S. Dixie Highway
Boca Raton, FL 33432
Attention: Mr. Tarek Kirschen,
President
With a copy to: James L. Pruden, Esq.
370 W. Camino Gardens Blvd.
Suite 210
Boca Raton, FL 33432
or such other addresses as shall be furnished in writing by any
party in the manner for giving notices hereunder, and any such
25
<PAGE>
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 Tarcyn and Creditco 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
and all of which taken together shall be but a single instrument.
26
<PAGE>
Further, facsimile signatures shall be deemed valid, so long as the
original signature page, duly executed, are delivered to the other
party within seven (7) business days following execution thereof.
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 inure 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.
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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
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.
TARCYN CORPORATION
By: s/Andrew I. Telsey
--------------------------------
Andrew I. Telsey, President
CREDITCO, INC.
By: s/Tarek S. Kirschen
--------------------------------
Tarek S. Kirschen, President
28
<PAGE>
MERCHANTONLINE.COM, INC.
__________________________
EXHIBIT 3.3 TO FORM 8-K
__________________________
ARTICLES OF INCORPORATION
REINCORPORATING THE COMPANY
IN THE STATE OF FLORIDA
__________________________
<PAGE>
Articles of Incorporation
of
MerchantOnline.com, Inc.
Article 1
Corporate Name
--------------
The name of this corporation shall be "MerchantOnline.com, Inc."
Article 2
Principal Office and Mailing Address
------------------------------------
The principal office and mailing address of the Corporation is 1600 South
Dixie Highway, 3rd Floor, Boca Raton, Florida 33432
Article 3
Nature of Corporate Business
----------------------------
The general nature of the business to be transacted by this Corporation
shall be to engage in business for profit and is organized for the following
general purposes:
(a) To engage in any and all lawful business permitted under the laws of
the United States and the State of Florida; and
(b) To make loans to or hold stock in other business entities, and enter
into partnerships, limited partnerships, and joint ventures with
other business entities.
Article 4
Capital Stock
-------------
The aggregate number of shares which the corporation shall have authority
to issue is 125,000,000, of which 25,000,000 shall be Preferred Shares, $.01
par value per share, and 100,000,000 shall be Common Shares, no par value per
share, and the designations, preferences, limitations and relative rights of
the shares of each such class are as follows:
(I) Preferred Shares
The corporation may divide and issue the Preferred Shares into series.
Preferred Shares of each series, when issued, shall be designated to
distinguish it from the shares of all other series of the class of Preferred
Shares. The Board of Directors is hereby expressly vested with authority to
fix and determine the relative rights and preferences of the shares of any
such series so established to the fullest extent permitted by these Articles
of Incorporation and the laws of the State of Florida in respect to the
following:
(a) The number of shares to constitute such series, and the distinctive
designations thereof;
(b) The rate and preference of dividend, if any, the time of payment of
dividend, whether dividends are cumulative, and the date from which
any dividend shall accrue;
(c) whether the shares may be redeemed and, if so, the redemption price
and the terms and conditions of redemption;
(d) The amount payable upon shares in the event of involuntarily
liquidation;
(e) The amount payable upon shares in the event of voluntary liquidation;
<PAGE>
(f) Sinking fund or other provisions, if any, for the redemption or
purchase of shares;
(g) The terms and conditions on which shares may be converted, if the
shares of any series are issued with the privilege of conversion;
(h) Voting powers, if any; and
(i) Any other relative right and preferences of shares of such series,
including, without limitation, any restriction on an increase in the
number of shares of any series theretofore authorized and any
limitation or restriction of rights or powers to which shares of any
further series shall be subject.
(II) Common Shares
Holders of the Common Shares have unlimited voting rights of one vote
per share for the election of directors and with respect to other matters
submitted to a vote of shareholders and shall constitute the sole voting group
of the corporation, except to the extent any additional voting group or groups
may hereafter be established in accordance with the Florida Business
Corporation Act; and further are entitled to receive the net assets of the
Corporation upon dissolution after payment of the Corporation's debts,
liabilities and any liquidation preferences of, and unpaid dividends on, any
class of preferred stock then outstanding.
Article 5
Term of Existence
-----------------
This Corporation shall have perpetual existence.
Article 6
Effective Date of Corporation
-----------------------------
Pursuant to the provisions of Fla. Stat. Sec. 607.1801, the Corporation
shall retain, as its effective date of incorporation, the date on which the
Corporation first came into being of March 18, 1993.
Article 7
Registered Agent
----------------
The Registered Agent and the street address of the Initial Registered
Office of the Corporation in the State of Florida shall be:
James L Pruden, Esq.
370 W. Camino Gardens Blvd., Suite 210
Boca Raton, FL. 33432
Article 8
Management
----------
The corporate powers shall be exercised by or under the authority of, and
the business and affairs of the corporation shall be managed under the
direction of, a board of directors. The number of directors of the corporation
shall be fixed by the bylaws, or if the bylaws fail to fix such a number, then
by resolution adopted from time to time by the board of directors, provided
that the number of directors shall not he more than seven (7) nor less than
one (1).
Article 9
Cumulative Voting
-----------------
Cumulative voting shall not be permitted in the election of directors or
otherwise.
2
<PAGE>
Article 10
Shareholder Voting
------------------
Except as the bylaws adopted by the shareholders may provide for a
greater quorum requirement, a majority of the votes entitled to be cast on
any matter by each voting group entitled to vote on a matter shall constitute
a quorum of that voting group for action on that matter at any meeting of
shareholders. Except as bylaws adopted by the shareholders may provide for a
greater voting requirement and except as is otherwise provided by the Florida
Business Corporation Act, with respect to action on amendment to these
Articles of Incorporation, on a plan of merger or share exchange, on the
disposition of substantially all of the property of the corporation, on the
granting of consent to the disposition of property by an entity controlled by
the corporation, and on the dissolution of the corporation, action on a matter
other than the election of directors is approved if a quorum exists and if the
votes cast favoring the action exceed the votes cast opposing the action. Any
bylaw adding, changing, or deleting a greater quorum or voting requirement for
shareholders shall meet the same quorum requirement and be adopted by the same
vote required to take action under the quorum and voting requirements then in
effect or proposed to be adopted, whichever are greater.
Article 11
Management Conduct
------------------
The following provisions are inserted for the management of the business
and for the conduct of the affairs of the corporation, and the same are in
furtherance of, and not in limitation or exclusion of, the powers conferred
by law.
(I) Conflicting Interest Transactions.
As used in this paragraph, "conflicting interest transactions" means any
of the following: (i) a loan or other assistance by the corporation to a
director of the corporation or to an entity in which a director of the
corporation is a director or officer or has a financial interest; (ii) a
guaranty by the corporation of an obligation of a director of the corporation
or of an obligation of an entity in which a director of the corporation is a
director or officer or has a financial interest; or (iii) a contract or
transaction between the corporation and a director of the corporation or
between the corporation and an entity in which a director of the corporation
is a director or officer or has a financial interest. No conflicting interest
transaction shall be void or voidable, be enjoined, be set aside, or give rise
to an award of damages or other sanctions in a proceeding by a shareholder or
by or in the right of the corporation, solely because the conflicting interest
transaction involves a director of the corporation or an entity in which a
director of the corporation is a director or officer or has a financial
interest, or solely because the director is present at or participates in the
meeting of the corporation's board of directors or of the committee of the
board of directors which authorizes, approves or ratifies a conflicting
interest transaction, or solely because the director's vote is counted for
such purpose, if: (a) the material facts as to the director's relationship or
interest and as to the conflicting interest transaction are disclosed or are
known to the board of directors or the committee, and the board of directors'
committee in good faith authorizes, approves or ratifies the conflicting
interest transaction by the affirmative vote of a majority of the
disinterested directors, without counting the votes or consents of such
interested directors; or (b,) the material facts as to the director's
relationship or interest and as to the conflicting interest transaction are
disclosed or are known to the shareholders entitled to vote thereon, and the
conflicting interest transaction is specifically authorized, approved or
ratified in good faith by a vote of the shareholders; or (c) a conflicting
interest transaction is fair as to the corporation as of the time it is
authorized, approved or ratified by the board of directors, a committee
thereof, or the shareholders. If a majority of directors who have no such
relationship or interest in the transaction vote to authorize, approve or
ratify the transaction, a quorum is present for the purpose of taking such
action.
3
<PAGE>
(II) Loans and Guarantees for the Benefit of Directors.
Neither the board of directors nor any committee thereof shall authorize
a loan by the corporation to a director of the corporation or to an entity in
which a director of the corporation is a director or officer or has a
financial interest, or a guaranty by the corporation of an obligation of a
director of the corporation or of an obligation of an entity in which a
director of the corporation is a director or officer or has a financial
interest, until at least ten days written notice of the proposed authorization
of the loan or guaranty has been given to the shareholders who would be
entitled to vote thereon if the issue of the loan or guaranty were submitted
to a vote of the shareholders. The requirements of this subparagraph (II) are
in addition to, and not in substitution for, the provisions of subparagraph
(I) of this Article.
(III) Indemnification.
The corporation shall indemnify, to the maximum extent permitted by law,
any person who is or was a director, officer, agent, fiduciary or employee of
the corporation against any claim, liability or expense arising against or
incurred by such person made party to a proceeding because he is or was a
director, officer, agent, fiduciary or employee of the corporation or because
he is or was serving another entity or employee benefit plan as a director,
officer, partner, trustee, employee, fiduciary or agent at the corporation's
request. The corporation shall further have the authority to the maximum
extend permitted by law to purchase and maintain insurance providing such
indemnification.
(IV) Limitation on Director's Liability.
No director of this corporation shall have any personal liability for
monetary damages to the corporation or its shareholders for beach of his
fiduciary duty as a director, except that this provision shall not eliminate
or limit the personal liability of a director to the corporation or its
shareholders for monetary damages for: (i) any breach of the director's duty
of loyalty to the corporation or its shareholders; (ii) acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation
of law; (iii) voting for or assenting to a distribution in violation of Fla.
Stat. Sec. 607.0834 or the Articles of Incorporation if it is established that
the director did not perform his duties in compliance with Fla. Stat.
Sec. 607.0830, provided that the personal liability of a director in these
circumstances shall be limited to the amount of the distribution which exceeds
what could have been distributed without violation of Fla. Stat. Sec. 607.0830
or the Articles of Incorporation; or (iv) any transaction from which the
director directly or indirectly derives an improper personal benefit. Nothing
contained herein will be construed to deprive any director of his
right to all defenses ordinarily available to a director nor will anything
herein be construed to deprive any director of any right he may have for
contribution from any other director or other person.
(VI) Negation of Equitable Interests in Shares or Rights.
Unless a person is recognized as a shareholder through procedures
established by the corporation pursuant to the Florida Business Corporation
Act, the corporation shall be entitled to treat the registered holder of any
shares of the corporation as the owner thereof for all purposes permitted by
the Florida Business Corporation Act, including without limitation all rights
deriving from such shares, and the corporation shall not be bound to recognize
any equitable or other claim to, or interest in, such shares or rights
deriving from such shares on the part of any other person including without
limitation, a purchaser, assignee or transferee of such shares, unless and
until such other person becomes the registered holder of such shares or is
recognized as such, whether or not the corporation shall have either actual
or constructive notice of the claimed interest of such other person. By way
of example and not of limitation, until such other person has become the
registered holder of such shares or is recognized pursuant to the Florida
Business Corporation Act or any similar applicable law, he shall not be
entitled: (i) to receive notice or the meetings of the shareholders; (ii) to
vote at such meetings; (iii) to examine a list of the shareholders; (iv) to
be paid dividends or other distributions payable to shareholders; or (v) to
own, enjoy
4
<PAGE>
and exercise any other rights deriving from such shares against
the corporation. Nothing contained herein will be construed to deprive any
beneficial shareholder, as defined Florida Business Corporation Act or any
subsequent law, of any right he may have pursuant thereto.
Article 12
Incorporator
------------
The name of the person signing these Articles of Incorporation as the
Incorporator is James L. Pruden, Esq. whose address is 370 W. Camino Gardens
Blvd., Suite 210, Boca Raton, FL. 33432.
IN WITNESS WHEREOF, the undersigned Incorporator has executed the
foregoing Articles of Incorporation on the 23th day of February 1999.
Incorporator
s/James L. Pruden
------------------------------------
James L. Pruden, Esq.
<PAGE>
MERCHANTONLINE.COM, INC.
__________________________
EXHIBIT 16.1 TO FORM 8-K
__________________________
LETTER OF RESIGNATION OF REGISTRANT'S
INDEPENDENT CERTIFIED 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
February 19, 1999
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 Tarcyn
Corporation (Comm. Number 0-22607) in its filing of form 8-K dated February 19,
1999 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>
MERCHANTONLINE.COM, INC.
_________________________
EXHIBIT 27.0 TO FORM 8-K
_________________________
FINANCIAL DATA SCHEDULE
_________________________
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ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
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<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> OCT-31-1999
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<CURRENT-ASSETS> 14,861
<PP&E> 82,793
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<TOTAL-LIABILITY-AND-EQUITY> 92,261
<SALES> 506,989
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<INTEREST-EXPENSE> 2,957
<INCOME-PRETAX> (225,332)
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