<PAGE>
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 18, 1999
Dimgroup.com Inc.
(Exact name of Registrant as specified in charter)
Indiana 0-25879 35-2065469
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
555 Burnhamthorpe Road, Suite 304, Toronto, Ontario, Canada M9C-2Y3
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (416) 626-5346
MAS Acquisition VII Corp.
1710 E. Division St.
Evansville, Indiana 47711
(Former name or former address, if changed, since last report)
<PAGE>
ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
A change in control of the registrant occurred on August 16, 1999
pursuant to the terms and conditions of a Stock Exchange Agreement (the
"Agreement") dated August 11, 1999 between MAS Acquisition VII Corp., a
Indiana corporation (the "Company") and Dimgroup, Inc., a Nevada
corporation ("DGI"), which provided for the merger of DGI with and into
the Company as the surviving entity, pursuant to a tax-free reorganization
in accordance with Section 354 and 368 of the Internal Revenue Code of
1986, as amended.
ITEM 2. ACQUISITION AND DISPOSITION OF ASSETS.
The Company entered into the Agreement with DGI on August 11, 1999,
whereby DGI has merged into the Company and the Company has changed its
name to Dimgroup.com Inc. Pursuant to the terms of the Agreement, each
common share of DGI was converted into 1703.96 common shares of the
Company. A total of 4,500 shares of common share of DGI was converted
into 7,667,820 restricted common shares of the Company. In addition the
Company has accepted the return of, and cancelled, 7,667,820 shares of
Common Stock of the Company issued to Aaron Tsai.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not applicable.
ITEM 5. OTHER EVENT.
The Company has changed its fiscal year end from March 31 to December 31
because of the merger transaction. The Company will file 10K-SB for the
fiscal year ended on December 31, 1999.
ITEM 6. RESIGNATION OF REGISTRANT'S DIRECTORS.
As a result of the Agreement, the Company has accepted the resignation of
Aaron Tsai, the Company's sole Director and Officer, as of August 16, 1999,
and appointed Marc Cianfarani as Chief Executive Officer and Chairman of the
Board of Directors, Nick Montesano as Chief Operating Officer and Director
and Berto Napoleone as Executive Vice-President of Personnel and Director.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements.
(i) Audited financial statements of Dimgroup, Inc. for the period from
inception (April 23, 1999) to July 31, 1999.
(ii) Unaudited pro-forma financial statement of MAS Acquisition VII Corp.
and Dimgroup, Inc. for the period from inception of Dimgroup, Inc.
(April 23, 1999) to July 31, 1999.
<PAGE>
TUBBS & BARTNICK, P.A.
- ----------------------
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT
----------------------------
To the Board of Directors and Shareholders:
Dimgroup, Inc.
We have audited the balance sheet of Dimgroup, Inc. (A Development Stage
Company) as of July 31, 1999 and the related statements of operations,
stockholders' equity and cash flows for the period from inception (April 23,
1999) to July 31, 1999. 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 audits 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
reasonble basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Dimgroup, Inc. (A
Development Stage Company) as of July 31, 1999, and the results of its
operations and its cash flows for the period from inception (April 23, 1999)
to July 31, 1999, 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 6 the Company
has been in the development stage since inception. Realization of the
Company's assets is dependent upon the Company's ability to meet its future
financing requirements, and the success of future operations. These factors
raise substantial doubt about the Company's ability to continue as a going
concern. The financial statements do not include any adjustments relating to
the recoverability and classification of recorded assets, or the amounts and
classifications of liabilities that might be necessary in the event that the
Company cannot continue in existence.
/s/ Tubbs & Bartnick, P.A.
TUBBS & BARTNICK, P.A.
Certified Public Accountants
Boca Raton, Florida
August 17, 1999
2300 GLADES ROAD, SUITE 415E, BOCA RATON, FL 33431, TEL (561) 361-0330,
FAX (561) 368-7720
(Member - AICPA Division for CPA Firms)
<PAGE>
DIMGROUP, INC
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF JULY 31, 1999
-------------------
<TABLE>
<CAPTION>
ASSETS
------
<S> <C>
CURRENT ASSETS
Cash $2,494
------
Total current assets 2,494
------
PROPERTY AND EQUIPMENT, NET 2,322
------
TOTAL ASSETS $4,816
- ------------ ======
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accounts payable $68
------
Total current liabilities 68
------
STOCKHOLDERS EQUITY
Common stock, $.001 par value, 5,000,000
shares authorized, 4500 shares
issued and outstanding 5
Additional paid-in capital 6,369
Deficit accumulated during the development stage (1,537)
Accumulated other comprehensive income:
Currency translation adjustment (89)
-----
Total stockholders' equity 4,748
-----
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $4,816
- ------------------------------------------ ======
</TABLE>
Read the accompanying notes to the Financial statements.
<PAGE>
DIMGROUP, INC
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
PERIOD FROM INCEPTION (APRIL 23, 1999) TO JULY 31, 1999
-------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
OPERATING COSTS AND EXPENSES
General and administrative $1,537
-------
NET (LOSS) (1,537)
- ----------
Other comprehensive income:
Foreign currency translation adjustment (89)
-------
COMPREHENSIVE (LOSS) $(1,626)
- -------------------- =======
PER SHARE INFORMATION:
Weighted average common shares outstanding 4,500
=======
Basic income (loss) per share $(0.34)
=======
</TABLE>
Read the accompanying notes to the financial statements.
<PAGE>
DIMGROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES OF STOCKHOLDERS' EQUITY
PERIOD FROM INCEPTION (APRIL 23, 1999) TO JULY 31, 1999
-------------------------------------------------------
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional During the Currency
------------ Paid in Development Translation
Shares Amount Capital Stage Adjustment Total
------ ------ ---------- ----------- ----------- ------
<S> <C> <C> <C> <C> <C> <C>
Shares issued at
inception for cash
at $.02 per share 4,500 $ 5 $ 95 $ - $ - $ 100
Cash capital
contributions by
shareholders 2,500 2,500
Non cash capital
contributions by
shareholders 3,774 3,774
Currency translation
adjustment (89) (89)
Net (loss) for
the period - - - (1,537) - (1,537)
------ ------ --------- -------- ------- -----
BALANCE -
JULY 31, 1999 4,500 $5 $6,369 $(1,537) $(89) $4,748
====== ====== ========= ======== ======= ======
</TABLE>
Read the accompanying notes to the financial statements.
<PAGE>
DIMGROUP, INC
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
PERIOD FROM INCEPTION (APRIL 23, 1999) TO JULY 31, 1999
-------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Net (loss) $(1,537)
Adjustments to reconcile net (loss) to net
cash (used in) operating activities:
Depreciation and amortization 199
Operating expenses contributed to capital 1,253
Exchange rate fluctuations (89)
Changes in assets and liabilities:
Increase (decrease) in accounts payable 68
-------
Total adjustments 1,431
-------
Net cash (used in)
operating activities (106)
-------
Cash flows from investing activities:
Net cash (used in)
investing activities -
-------
Cash flows from financing activities:
Common stock issued for cash 100
Capital contributions 2,500
-------
Net cash provided by
financing activities 2,600
-------
Increase (decrease) in cash 2,494
Cash - beginning of period -
-------
CASH - END OF PERIOD $ 2,494
- -------------------- =======
Supplemental cash flow information:
Cash paid for interest $ -
Cash paid for income taxes $ -
Non cash investing and financing activities:
Furniture and equipment contributed to capital $ 2,521
</TABLE>
Read the accompanying notes to the financial statements.
<PAGE>
DIMGROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF JULY 31, 1999
-------------------
NOTE 1 - ACCOUNTING POLICIES
A. Organization
The Company was incorporated under the laws of the State of Nevada on April
23, 1999 and is in the development stage. The Company intends to operate as a
web-based provider of financial information.
B. Property and equipment
Property and equipment are recorded at cost. Depreciation is provided over
estimated useful lives of the respective assets on a straight-line basis.
Depreciation is calculated using the expected useful lives of the assets as
follows:
Furniture and office equipment 3 - 5 years
Expenditures for repairs and maintenance are charged to expense when
incurred. Expenditures for major renewals and betterments, which extend the
useful lives of existing equipment, are capitalized and depreciated. Upon
retirement or disposition of property and equipment, the costs and related
accumulated depreciation are removed from the accounts and any resulting gain
or loss is recognized in the statement of income.
C. Cash and cash equivalents
The Company considers all highly liquid investments purchased with a maturity
of three months or less at the date of purchase to be cash equivalents.
D. Use of Estimates
Preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
E. Fair value of financial instruments
Fair value estimates discussed herein are based upon certain market
assumptions and pertinent information available to management as of July 31,
1999. The respective carrying value of certain on-balance-sheet financial
instruments approximated their fair values. These financial instruments
include cash, accounts receivable, accounts payable and accrued expenses and
notes payable to shareholders. Fair values were assumed to approximate
carrying values for these financial instruments because they are short term in
nature and their carrying amounts approximate fair values or they are
receivable or payable on demand.
<PAGE>
DIMGROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF JULY 31, 1999
-------------------
F. Impairment of long lived assets
Long lived assets and certain identifiable intangibles held and used by the
Company are reviewed for possible impairment whenever events or circumstances
indicate the carrying amount of an asset may not be recoverable or is
impaired.
G. Earnings per share
The Company follows Statement of Financial Accounting Standards No. 128,
"Earnings Per Share" ("SFAS No. 128"). Basic earnings per common share
("EPS") calculations are determined by dividing net income by the weighted
average number of shares of common stock outstanding during the year. Diluted
earnings per common share calculations are determined by dividing net income
by the weighted average number of common shares and dilutive common share
equivalents outstanding. During the periods presented no dilutiv
H. Comprehensive income
The Company follows Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income" ("SFAS No. 130"). SFAS No. 130 establishes
standards for reporting and display of comprehensive income and its
components in the financial statements. For all periods presented, there were
no differences between reported net income and comprehensive income.
I. Segment Reporting
The Company follows Statement of Financial Accounting Standards No. 130,
"Disclosures About Segments of an Enterprise and Related Information." The
Company operates as a single segment and will evaluate additional segment
disclosure requirements as it expands its operations.
J. Foreign currency translation
The local currency (Canadian Dollar) is the functional currency for the
Company's operations. Assets and liabilities are translated using the
exchange rate in effect at the balance sheet date. Income and expenses are
translated at the average exchange rate for the year. Translation adjustments
are reported as a separate component of stockholders' equity.
K. Income taxes
The Company follows Statement of Financial Accounting Standard No. 109,
"Accounting for Income Taxes" ("SFAS No. 109") for recording the provision
for income taxes. Deferred tax assets and liabilities are computed based upon
the difference between the financial statement and income tax basis of assets
and liabilities using the enacted marginal tax rate applicable when the
related asset or liability is expected to be realized or settled. Deferred
income tax expenses or benefits are based on the changes in the asset or
liability each period. If available evidence suggestd that it is more likely
than not that some portion or all of the deferred tax assets will not be
realized, a valuation allowance is required to reduce the deferred tax assets
to the amount that is more likely than not to be realized. Future changes in
such valuation allowance are included in the provision for deferred income tax
in the period of change.
<PAGE>
DIMGROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF JULY 31, 1999
-------------------
L. Recent pronouncement
In June, 1998 the Financial Accounting Standards Board issued SFAS 133,
"Accounting for Derivatives and Hedging Activities", which establishes
accounting and reporting standards for derivative instruments and hedging
activities. SFAS is effective for all fiscal quarters of fiscal years
beginning after June 15, 1999. The Company does not expect that SFAS 133 will
have a material impact on its financial statements or disclosures.
NOTE 2 - PROPERTY AND EQUIPMENT
- -------------------------------
Property and equipment consists of the following:
Furniture and office equipment $ 2,521
Less: accumulated depreciation 199
---------
PROPERTY AND EQUIPMENT - NET $ 2,322
---------------------------- =========
Depreciation expense was $199 for the period ended July 31, 1999.
NOTE 3 - STOCKHOLDERS' EQUITY
- -----------------------------
At inception the Company issued 4,500 shares of its $.001 par value stock to
officers and directors for cash aggregating $100.
NOTE 4 - RELATED PARTY TRANSACTIONS
- -----------------------------------
The Company utilizes office facilities and support staff which is provided by
its shareholders. The fair value of the rent and services aggregated $1,020
($340 per month) and has been contributed by these shareholders to the
capital of the Company.
In addition, the shareholders of the Company contributed the following to the
capital of the Company.
Furniture and office equipment $ 2,521
Payment of operating expenses 233
Cash 2,500
---------
$ 5,254
=========
NOTE 5 - INCOME TAXES
- ---------------------
Deferred income taxes may arise from temporary differences resulting from
income and expense items reported for financial accounting and tax purposes
in different periods. Deferred taxes are classified as current or
non-current, depending on the classification of assets and liabilities to
which they relate. Deferred taxes arising from temporary differences that are
not related to an asset or liability are classified as current or
non-current depending on the periods in which the temporary differences are
expected to reverse.
The Company currently has net operating loss carryforwards aggregating
approximately $1,500 which expire in 2014. The deferred tax asset related to
this carryforward has been fully reserved.
<PAGE>
DIMGROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF JULY 31, 1999
-------------------
NOTE 6. GOING CONCERN CONSIDERATION
- -----------------------------------
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplates the continuation
of the Company as a going concern. As discussed in Note 1 the Company is in
the development stage and the realization of its assets is dependent upon its
ability to meet its future financing requirements, and the success of its
future operations. In addition, the Company has incurred a net loss since
inception. Management plans include obtaining additional debt and equity
financing to provide the opportunity for the Company to continue as a going
concern.
The financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts and
classifications of liabilities that might be necessary in the event that the
Company cannot continue in existence.
NOTE 7 - SUBSEQUENT EVENT
- -------------------------
During August, 1999 the Company completed a stock exchange agreement with MAS
Acquisition VII Corp. ("MAS VII") a development stage company with no
operations or significant assets. Pursuant to the terms of the agreement
4,500 shares of the Company's common stock were converted into 7,667,820
shares of MAS VII representing 90% of the issued and outstanding shares of
MAS VII. This combination will be accounted for as a reverse acquisition.
The Company also paid MAS Financial Corp. ("MFC") an entity related to
MAS VII, a consulting fee consisting of cash of $5,000 and issued a
non-interest bearing note to MFC in the amount of $100,000 due on August 10,
2001. In addition, the Company will pay to MFC an additional $30,000 upon the
occurrence of certain future specified events.
<PAGE>
MAS ACQUISITION VII CORP.
PRO FORMA FINANCIAL STATEMENTS
------------------------------
(UNAUDITED)
SUMMARY
- -------
The accompanying unaudited pro forma financial statements give effect to the
combination of MAS Acquisition VII Corp. ("MAS") and Dimgroup, Inc.
("Dimgroup") effective on August 10, 1999.
The statements presented include the pro forma balance sheet as of July 31,
1999 and the pro forma income statement for the period from the inception of
Dimgroup (April 23, 1999) to July 31, 1999. The pro forma financial
statements were derived from the unaudited interim financial statements for
MAS as of and for the three months ended June 30, 1999 and for Dimgroup as of
July 31, 1999 and for the period from inception (April 23, 1999) to July 31,
1999. The pro forma statements of operations assume that the combination took
place at the beginning of the period presented.
The pro forma financial statements give effect to the combination as a
recapitalization of Dimgroup. The pro forma assumptions and adjustments are
set forth in the accompanying notes to the pro forma financial statements.
The results of operations are not necessarily indicative of those which have
been attained had the transaction occurred at the beginning of the periods
presented. The pro forma financial statements should be read in conjunction
with the historical financial statements of MAS and Dimgroup.
<PAGE>
MAS ACQUISITION VII CORP.
PRO-FORMA BALANCE SHEET
AS OF JULY 31, 1999
-------------------
(UNAUDITED)
<TABLE>
<CAPTION>
MAS
Acquisition Dimgroup,
VII Corp. Inc. Adjustments Pro-forma
----------- ----------- ----------- -----------
ASSETS
------
<S> <C> <C> <C> <C>
Current Assets:
Cash and cash
equivalents $ - $ 2,494 $ - $ 2,494
Furniture and
equipment, net - 2,322 - 2,322
Other assets 40 - - 40
---------- ---------- ---------- ----------
TOTAL ASSETS $ 40 $ 4,816 $ - $ 4,856
- ------------ ========== ========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES
Current Liabilities:
Accounts payable - 68 - 68
---------- ---------- ---------- ----------
STOCKHOLDERS' EQUITY
Preferred stock, $.001
par value, 20,000,000
shares authorized,
none issued and
outstanding - - - -
Common stock, $.001
par value, 80,000,000
shares authorized,
8,519,800 shares issued
and outstanding 111 5 1 6,298 6,414
Additional paid in
capital - 6,369 2 (71) -
1 (6,298)
Deficit accumulated
during the development
stage (71) (1,537) 2 71 (1,537)
Accumulated other
comprehensive income:
Currency translation
adjustment - (89) - (89)
---------- ---------- ---------- ----------
Total stockholders'
equity 40 4,748 - 4,788
---------- ---------- ---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 40 $ 4,816 $ - $ 4,856
========== ========== ========== ==========
</TABLE>
Read the accompanying notes to the pro-forma financial statements.
<PAGE>
MAS ACQUISITION VII CORP.
PRO-FORMA STATEMENT OF OPERATIONS
FOR THE PERIOD FROM INCEPTION (April 23, 1999) TO JULY 31, 1999
---------------------------------------------------------------
(UNAUDITED)
<TABLE>
<CAPTION>
MAS
Acquisition VII Dimgroup
Corp. Inc. Adjustments Pro-forma
----- ---- ----------- ---------
<S> <C> <C> <C> <C>
REVENUE $ - $ - $ - $ -
---------- ---------- ---------- ----------
OPERATING COSTS
AND EXPENSES
Selling, general and
administrative 5 1,537 - 1,542
---------- ---------- ---------- ----------
NET INCOME (LOSS) $ (5) $ (1,537) $ - $ (1,542)
========== ========== ========== ==========
Basic (loss) per share $ (0.00)
==========
Weighted average shares
outstanding 8,519,800
==========
</TABLE>
Read the accompanying notes to the pro-forma financial statements.
<PAGE>
MAS ACQUISITION VII CORP.
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
-------------------------------------------------
(UNAUDITED)
The accompanying pro forma financial statements give effect to the
combination of MAS and Dimgroup effective on August 10, 1999. The acquisition
was effected by the exchange of all of the issued and outstanding common
shares of Dimgroup for 7,667,820 common shares of MAS (90% of the issued and
outstanding common stock of MAS).
The statements presented include the pro forma balance sheet as of July 31,
1999 and the pro forma income statement for the period from the inception
Dimgroup (April 23, 1999) to July 31, 1999.
Pro forma basic earnings (loss) per share is computed using the weighted
average number of common shares of MAS outstanding for the periods presented.
<PAGE>
MAS ACQUISITION VII CORP.
EXPLANATION OF ADJUSTMENTS
PRO FORMA FINANCIAL STATEMENTS
------------------------------
(UNAUDITED)
1. To reclassify paid in capital to common stock
2. To reclassify the accumulated deficit of MAS to paid in capital
<PAGE>
(b) Exhibits
<TABLE>
<CAPTION>
Exhibit Number Description
<S> <C>
2.0 Stock Exchange Agreement
3.1 Articles of Merger
99.0 Consulting Agreement
<PAGE>
Date: November 3, 1999
Dimgroup.com Inc.
By: /s/ Marc Cianfarani
--------------------------------
Marc Cianfarani, President, CEO
and Chairman of Board Directors
<PAGE>
EXHIBIT 2.0
STOCK EXCHANGE AGREEMENT
THIS AGREEMENT is made this 11th day of August, 1999, by and between
MAS Acquisition VII Corp., a Indiana corporation ("MAS") and Dimgroup, Inc.,
a Nevada corporation ("DGI").
WITNESSETH:
WHEREAS, the total authorized capital stock of DGI consists of
5,000,000 shares of common stock, par value $0.001 per share, of which
4,500 shares are issued and outstanding (Common Stock hereinafter
referred to as the "DGI Shares"); and
WHEREAS, MAS desires to acquire all of the issued and outstanding
capital stock of DGI, or 4,500 shares of Common Stock ("DGI Shares") for
7,667,820 shares of common stock of MAS ("MAS Shares") by exchanging
1703.96 MAS Share for each DGI Shares; and
WHEREAS, DGI agrees to pay MAS Financial Corp. a consulting fee in
connection with this merger transaction, which is detailed in the Consulting
Agreement dated August 10, 1999.
WHEREAS, in reliance on and subject to the terms and conditions,
representations, warranties, covenants and agreements herein contained, DGI
desires to sell the DGI Shares to MAS, and MAS desires to purchase the
DGI Shares in a stock for stock exchange.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and for other good and value consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. PURCHASE AND SALE.
Section 1.1 AGREEMENT TO PURCHASE AND EXCHANGE. In reliance on and
subject to the terms, conditions, representations, warranties, covenants and
agreements herein contained, DGI shall assign, transfer and convey unto MAS,
and MAS shall purchase all of the DGI Shares in a tax free reorganization.
Section 1.2 PURCHASE PRICE. The aggregate purchase price for the DGI
Shares (the "Purchase Price") shall be 7,667,820 MAS Shares.
Section 1.3 CLOSING. The closing of the transaction contemplated in
this Agreement (the "Closing") shall take place at the offices of MAS Acquisition
III Corp., 1710 E. Division St., Evansville, Indiana 47711 on or around the date
first written above or at such other date, time or place as shall be mutually
acceptable to the parties (the "Closing Date").
Section 1.4 TRANSACTIONS AND DOCUMENTS AT AND AFTER CLOSING.
(a) At the Closing, DGI shall deliver to MAS certificates
representing 4,500 shares of DGI, duly endorsed for transfer and a fee based
on a separate agreement with MAS Financial Corp., of which DGI shall
deliver to MAS Financial Corp. US$5,000 and a US$100,000 non-interest
bearing note due on August 10, 2001.
(b) At the Closing, MAS shall deliver to DGI the 7,667,820
MAS Shares representing the Purchase Price for the DGI Shares,
calculated as set forth hereinabove, and bearing an appropriate legend
restricting transfer except as permitted under Rule 144 of the Securities Act of
1933, as amended. Of the 7,667,820 MAS Shares, 1,150,173 shares shall
be escrowed at the MAS' transfer agent to be appointed by MAS to be issued
in the names of the respective officers/directors guaranteeing the US$100,000
non-interest bearing note due on August 10, 2001 issued by MAS to MAS
Financial Corp..
(c) From time to time and at any time, at MAS's request,
whether on or after the Closing Date, and without further consideration, DGI
shall, at its own expense except as otherwise provided in this Agreement,
execute and deliver such further documents and instruments of conveyance
and transfer and shall take such further actions as may be necessary or
convenient, in the reasonable opinion of MAS, to transfer and convey to
MAS, all of its right, title and interest in and to the DGI Shares, free and
clear of any lien or adverse claim.
(d) From time to time and at any time, at DGI's request, whether
on or after the Closing Date, and without further consideration, MAS shall, at its
own expense except as otherwise provided in this Agreement, execute and deliver
such further documents and instruments of conveyance and transfer and shall take
such further actions as may be necessary or convenient in the reasonable opinion
of DGI, to transfer and convey to DGI, all of its right, title and interest in
and to the MAS Shares free and clear of any lien or adverse claim.
2. ADDITIONAL AGREEMENTS.
Section 2.1 MAS'S ACCESS AND INSPECTION. DGI has allowed and shall
allow MAS and its authorized representatives full access during normal
business hours from and after the date hereof and prior to the Closing Date to
all of DGI's properties, books, contracts, commitments and records for the
purpose of making such investigation as MAS may desire, and DGI shall
furnish MAS such information concerning DGI's affairs as MAS may
request. DGI has caused and shall cause DGI's personnel to assist MAS in
making such investigation and shall cause the counsel, accountants, engineers
and other non-employee representatives of DGI to be reasonably available to
MAS for such purposes.
Section 2.2 DGI'S ACCESS AND INSPECTION. MAS shall allow DGI and its
authorized representatives access during normal business hours from and after
the date hereof and prior to the Closing Date to such of MAS's properties,
books, contracts, commitments and records as DGI may reasonably request for the
purpose of determining the financial condition of MAS. MAS shall cause
MAS's personnel to assist DGI in making such investigation and shall cause
the counsel, accountants, engineers and other non-employee representatives of
MAS to be reasonably available to DGI for such purposes.
Section 2.3 COOPERATION. The parties shall cooperate fully with each other
and with their representatives, counsel and accountants in connection with any
steps required to be taken as part of their respective obligations under this
Agreement, and will use their best efforts to consummate the transactions
contemplated hereby and fulfill their obligations hereunder.
Section 2.4 EXPENSES. All of the expenses incurred by MAS in
connection with the authorization, preparation, execution and performance of
this Agreement by MAS, including without limitation all fees and expenses of
agents, representatives, counsel and accountants for MAS, shall be paid by
MAS. All expenses incurred by DGI in connection with the authorization,
preparation, execution and performance of this Agreement, including without
limitation all fees and expenses of agents, representatives, counsel and
accountants, shall be paid by DGI.
Section 2.5 BROKERS. Each party hereto jointly and severally represents
and warrants that no broker or finder other than MAS Financial Corp. has acted on
its behalf in connection with this Agreement or the transactions contemplated herein
and each party shall indemnify the other and save it harmless from any claim or
demand for commission or other compensation by any broker, finder or similar agent
claiming to have been employed by or on behalf of such party.
3. REPRESENTATIONS AND WARRANTIES OF DGI.
DGI represents, covenants and warrants to MAS as follows:
Section 3.1 CORPORATE EXISTENCE/STANDING/AUTHORITY. DGI is a
corporation duly organized, validly existing and in good standing under the laws of
Nevada and has the corporate power and authority to own, operate and lease its
respective properties, to carry on its business as now being conducted, and to
enter into this Agreement and to carry out the transactions contemplated hereby.
DGI is duly qualified to do business and is in good standing in each
jurisdiction where the failure to qualify would have a material adverse affect
on it. DGI has delivered to MAS or its counsel true and correct copies of
the articles of incorporation and by-laws of DGI, together with any amendments
thereto.
Section 3.2 SHARES OF STOCK. All issued and outstanding shares of capital
stock of DGI have been duly authorized and validly issued and are fully paid and
nonassessable. Dimgroup, Inc. has 5 million shares of common stock authorized
and 4,500 shares of common stock issued and outstanding. There is no other class
of capital stock, subscription, option, warrant, call, right, contract, commitment,
understanding or arrangement relating to the issuance, sale or transfer by DGI of
any shares of its capital stock, including any right of conversion or exchange under
any outstanding security or other instrument.
Section 3.3 AUTHORITY. DGI has the full right and authority to enter into
and fully perform this Agreement and all other agreements and documents to be
delivered to MAS in connection herewith. All actions required to be taken by
DGI to authorize the execution, delivery and performance of this Agreement and
all other agreements and documents to be delivered in connection herewith have
been or will by the Closing Date be properly taken. This Agreement constitutes
the valid and binding obligation of DGI. Neither the execution and delivery of
this Agreement and all other agreements and documents executed in connection
herewith nor the consummation of the transactions contemplated hereby nor the
performance of this Agreement and all other agreements and documents executed in
connection herewith will (1) conflict with or result in a breach of any
provision of the certificate of incorporation or by-laws of DGI, (2) violate,
conflict with, or result in a breach of any provision of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination or in a right of
termination or cancellation of, or accelerate the performance or the payment of
money required by, or result in the creation of any lien, security interest,
charge or encumbrance upon any of DGI's properties under any of the terms,
conditions or provisions of any loan agreement, note, bond, mortgage, indenture,
lease, agreement or other instrument or commitment to which DGI is a party, or
by which DGI or its properties may be bound or affected or (3) violate any
order, writ, injunction, decree, judgment, or ruling of any court or
governmental authority specifically applicable to DGI or any of its properties.
Section 3.4 NO VIOLATION. Except as set forth on Schedule 3.4, to the best
knowledge of DGI, DGI has complied with all rules, regulations, codes and laws
affecting its business and operations and is not in default under, or in
violation of, any provision of any federal, state or local rule, regulation,
code or law nor has DGI been given notice of any such default or violation.
Section 3.5 LICENSES AND RIGHTS. DGI possesses all franchises, easements,
licenses, permits and other authorizations from governmental or regulatory
authorities and from all other persons or entities that are necessary to permit
it to engage in its business as presently conducted in and at all locations and
places where it is presently operating. Such franchises, licenses, permits and
other authorizations are set forth on Schedule 3.5.
Section 3.6 CONSENTS. Except as set forth on Schedule 3.6 hereto, no
approval or consent of any person, firm or other entity or body is required to
be obtained by DGI for the authorization of this Agreement or the consummation
by DGI of the transactions contemplated hereby.
Section 3.7 NO DEFAULTS. Except as set forth on Schedule 3.7, to the best
knowledge of DGI, no default (or event which with the passage of time or the
giving of notice or both would become a default) exists or is alleged to exist
with respect to the performance of any material obligation of DGI under the terms
of any material indenture, license, mortgage, deed of trust, lease, note, guaranty or
other contract or instrument, including, but not limited to, any contract set forth on
Schedule 3.17, to which DGI is a party or to which its assets are subject, or by
which it is otherwise bound, and no such default or event exists or is alleged
to exist with respect to the performance of any obligation of any other party
thereto.
Section 3.8 FINANCIAL STATEMENTS. MAS has been or will be furnished
with the audited financial statements of DGI (the "Financial Statements"). The
Financial Statements were prepared in accordance with generally accepted
accounting principles and present fairly and accurately the information set
forth therein.
Section 3.9 ABSENCE OF CERTAIN CHANGES. Except as set forth on Schedule
3.9 hereto, since December 31, 1998, DGI has actively conducted its business in
the ordinary and regular course. Since that date, there has not been any
material adverse change in the condition (financial or otherwise), results of
operations, assets, liabilities, properties, business or prospects of DGI nor
is any event threatened which would cause such an adverse change, nor has there
occurred any event or governmental regulation or order restricting the business
of DGI.
Section 3.10 FACILITIES AND EQUIPMENT. The personal property owned or
leased by DGI at its facility for the operation of, or used in, its business is
in its possession or under its control and is adequate for the operation of
such business as presently conducted.
Section 3.11 TITLE TO ASSETS. Except as set forth on Schedule 3.11 or in
the Financial Statements, DGI has good, valid and marketable title to all of
its real property and leasehold estates and good and valid title to all of its
other assets (tangible and intangible), including, but not limited to, all
leasehold improvements and equipment and all other properties and assets
reflected or required to be reflected in the Financial Statements and all
properties and assets purchased or leased by it since the dates of such
Financial Statements (except for properties and assets so reflected or required
to be reflected which have been sold or otherwise disposed of in the ordinary
course of business), subject to no liens, pledges, encumbrances, mortgages,
security interests, charges or other similar restrictions of any nature
whatsoever. Except as set forth on Schedule 3.11, DGI enjoys peaceful and quiet
possession of its properties and assets pursuant to or by all of the deeds,
bills of sale, leases, licenses and other agreements under which it is
operating its business.
Section 3.12 ABSENCE OF UNDISCLOSED LIABILITIES. DGI does not have any
material liabilities or obligations, either accrued or unaccrued, fixed or
contingent, which have not been reflected in the Financial Statements or set
forth on Schedule 3.12 hereof.
Section 3.13 LITIGATION. Schedule 3.13 hereof sets forth a list of all
administrative or judicial proceedings to which DGI is a party. Except as set
forth on Schedule 3.13, there is no action, suit, claim, demand, arbitration or
other proceeding, administrative or judicial, pending or, to the best knowledge
of DGI, threatened against or relating to DGI which, if adversely determined or
resolved, would materially and adversely affect the financial condition,
results of operations, business or prospects of DGI.
Section 3.14 PATENTS AND TRADEMARKS.
(a) Except as set forth on Schedule 3.14(a), DGI does not own, or operate
under, any patent, trademark or service mark or any applications therefor. All
trade names (including those whose use is limited to one or more states of the
United States) owned or used by DGI are listed on Schedule 3.14 hereof and, to
the extent indicated therein, have been duly registered with the states of
the United States or the corresponding offices of other countries. Except as set
forth on Schedule 3.14, DGI is the sole and exclusive owner of, or has the sole
and exclusive power with respect to, or has the sole and exclusive right to use,
the trade names specified on Schedule 3.14.
(b) Except as set forth on Schedule 3.14(b) hereof, DGI has not ever
been charged with infringement or violation of any adversely held trademark,
trade name or copyright.
(c) Except as set forth on Schedules 3.14(a) and 3.14(b), there no
claims or demands of any other person, firm or corporation pertaining to the
trade names, copyright registrations or pending copyright registration
applications, as the case may be, listed on such schedules, and no proceedings
have been instituted which challenge the right of DGI in respect thereof.
Section 3.15 EMPLOYEE BENEFITS.
(a) Schedule 3.15 hereof contains a list of (i) each pension,
profit sharing, bonus, deferred compensation, or other retirement plan or
arrangement for the benefit of any employee or group of employees of DGI or any
independent contractors or group of independent contractor of DGI, (ii) each
medical, health, disability, insurance or other plan or arrangement of DGI, and
(iii) each employee stock option plan or other plan providing for the purchase
of shares of capital stock of DGI. All of such plans and arrangements of DGI are
referred to herein as the "employee benefit plans".
(b) The amounts reflected in the Financial Statements as liabilities or
contingent liabilities with respect to employee benefit plans have been
calculated In accordance and compliance with applicable law, including
accounting principles relating thereto.
(c) All of the employee benefit plans maintained by DGI (and each
funding medium which may be attendant thereto) are in compliance with applicable
law and all reporting and disclosure requirements under applicable laws and
regulations, and have been administered and operated in accordance with their
respective provisions and applicable law. There are no actions, suits or claims
(other than routine claims for benefits) pending with respect to the employee
benefit plans.
(d) DGI has filed, published and disseminated all reports, documents,
statements and communications which are required to be filed, published or
disseminated under applicable law and the rules and regulations promulgated
thereunder relating to, and have timely made all modifications and amendments
to, the employee benefit plans.
Section 3,16 TAXES AND TAX RETURNS. DGI has duly filed all income,
franchises and other tax returns and reports required to be filed by it and has
duly paid or made provisions for the payment of all taxes (including any
interest or penalties) which are due and payable pursuant to such returns. DGI
has withheld proper and accurate amounts from their employees' compensation in
substantial compliance with all withholding and similar provisions of applicable
law. There are and will hereafter be no tax deficiencies (including penalties
and interest) of any kind assessed against DGI with respect to any period ending
on or before the Closing Date.
Section 3.17 CONTRACTS. DGI has heretofore furnished to MAS or its
counsel true and complete copies of each document, and a written description of
each oral contact, set forth on Schedule 3.17 hereof. Schedule 3.17 is a true
and complete list of all contracts, understandings, commitments, arrangements
and agreements of the following types, including all amendments thereto to which
DGI is a party:
(a) Contracts relating to equipment purchases, or series of similar
equipment purchases from the same supplier, involving an expenditure of, or if
in a series, expenditures in the aggregate of, more than twenty-five thousand
dollars ($25,000);
(b) Bonus, incentive, pension, profit-sharing, hospitalization,
insurance, deferred compensation, retirement, stock option or stock purchase
plans or similar plans providing employee benefits;
(c) Factoring, loan, note, financing or similar contracts with any
lenders or guarantees of undertakings to answer for the debts or defaults of
another, or any contracts encumbering title to any properties, involving in each
case, or if in a series involving the same lender, guarantor or property, as the
case may be, In the aggregate, at least twenty-five thousand dollars ($25,000);
(d) contracts for the acquisition or disposition of a business or
substantially all of the property, assets or capital stock or other securities
of a business or company under which there are continuing or unperformed
obligations on the part of any of the parties hereto, which contracts in each
case involve at least twenty-five thousand dollars ($25,000);
(e) Conditional sales contracts, leases of personal property or
contracts for the purchase or sale of real or personal property, involving in
each case at least twenty-five thousand dollars ($25,000);
(f) Management or consulting contracts, involving in each case, or
with respect to any individual in the aggregate, at least twenty-five thousand
dollars ($25,000);
(g) Contracts for the furnishing of services or products to or by DGI,
involving an expenditure in each case of at least twenty-five thousand dollars
($25,000);
(h) Royalty or licensing contracts or contracts requiring similar
payments to unrelated parties individually, or with respect to any unrelated
party in the aggregate, involving or which reasonably may in the future involve
an amount in excess of twenty-five thousand dollars ($25,000) annually;
(i) All employment agreements between DGI and any of its employees; and
(j) All agreements, contracts and commitments not listed on any other
schedule hereto which individually involve the payment of twenty-five thousand
dollars ($25,000) or more.
Except as set forth on Schedule 3.17, all such contracts,
understandings, commitments, arrangements and agreements are in full force and
effect.
Section 3.18 COLLECTIVE BARGAINING AGREEMENTS. Schedule 3.18 hereof is
a list of all collective bargaining agreements with any labor organization to
which DGI is a party. The relations of DGI with its employees are good and there
are no impending labor difficulties.
Section 3.19 INSURANCE. DGI is insured by insurers unaffiliated with
DGI or DGI with respect to its properties and the conduct of its business in
such amounts and against such risks as are generally and prudently maintained
for comparable businesses and consistent with its past practice
Section 3.20 REAL PROPERTY.
(a) Schedule 3.20 hereof sets forth a true and complete list of (i) all
real property owned by DGI and (ii) all real property leases to which DGI is a
party. DGI has heretofore furnished to MAS or its counsel true and complete
copies of each written contract and a written description of each oral contract
relating to the list set forth on Schedule 3.20.
(b) With respect to the leases described on Schedule 3.20, except as
setforth on Schedule 3.20;
(i) "All such leases are in writing and duly executed, and, where
required, witnessed, acknowledged and recorded to make them valid and binding
and in full force and effect for the full term thereof, and none have been
modified;
(ii) The rental set forth in each such lease is the actual rental
being paid, and there are no separate agreements or understandings with respect
to the same not set forth in Schedule 3.20;
(iii) The lessee under each such lease has the full right to
exercise any renewal option contained therein and upon due exercise will be
entitled to enjoy the use of the premises for the full term of such renewal
option;
(iv) Upon performance by the lessee of the terms of each such
lease, the lessee has the full right to enjoy the use of the premises demised
thereunder for the full term thereof; and
(v) Except as set forth on Schedule 3.20, all security deposits
required by such leases have been made and no forfeiture with respect thereto
claimed in whole or in part, by any of the lessors.
Section 3.21 MATERIAL MISSTATEMENTS OR OMISSIONS. No representations or
warranties made by DGI under this Agreement or in any certificate, schedule or
other document furnished to be furnished to MAS or its counsel pursuant
hereto, or in connection with the transactions contemplated by this Agreement,
contains or will contain any untrue statement of a material fact, or omits or
will omit to state a material fact necessary to make the statements of fact
contained therein not misleading.
4. REPRESENTATIONS AND WARRANTIES OF MAS.
MAS represents, covenants and warrants to DGI as follows:
Section 4.1 CORPORATE EXISTENCE/STANDING/AUTHORITY. MAS is a
corporation duly organized, validly existing and in good standing under the laws
of Indiana and has the corporate power and authority to own, operate and lease
its respective properties, to carry on its business as now being conducted, and
to enter into this Agreement and to carry out the transactions contemplated
hereby. MAS is duly qualified to do business and is in good standing in each
jurisdiction were the failure to qualify would have a material adverse affect on
it. MAS has delivered to DGI or its counsel true and correct copies of the
articles of incorporation and by-laws of MAS, together with any amendments
thereto.
Section 4.2 SHARES OF STOCK. MAS has authorized 80,000,000 shares of
common stock of which there are presently issued and outstanding 8,519,800
shares of common stock. MAS agrees to acquire all of the issued and outstanding
capital stock of DGI, or 4,500 shares of Common Stock ("DGI Shares") for
7,667,820 shares of common stock of MAS ("MAS Shares") by exchanging
1703.96 MAS Share for each DGI Shares. MAS has authorized 20,000,000 shares
of preferred stock. None of the 20,000,000 shares of preferred stock is issued and
outstanding. All issued and outstanding shares of capital stock of MAS have been
duly authorized and validly issued and are fully paid and nonassessable. There is
no subscription, option, warrant, call, right, contract commitment, understanding
or arrangement relating to the issuance, sale or transfer by MAS of any shares of
its capital stock, including any right of conversion or exchange under any outstanding
security or other instrument.
Section 4.3 - AUTHORITY. MAS has the full right and authority to enter into
and fully perform this Agreement and all other agreements and documents to be
delivered to DGI in connection herewith. All actions required to be taken by
MAS to authorize the execution, delivery and performance of this Agreement
and all other agreements and documents to be delivered in connection herewith
have been or will by the Closing Date be properly taken. This Agreement
constitutes the valid and binding obligation of MAS. Neither the execution
and delivery of this Agreement and all other agreements and documents executed
in connection herewith nor the consummation of the transactions contemplated
hereby nor the performance of this Agreement and all other agreements and
documents executed in connection herewith will (1) conflict with or result in a
breach of any provision of the certificate of incorporation or by-laws of
MAS, (2) violate, conflict with, or result in a breach of any provision of,
or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the termination or in a
right of termination or cancellation of, or accelerate the performance or the
payment of money required by, or result in the creation of any lien, security
interest, charge or encumbrance upon any of MAS's properties under any of
the terms, conditions or provisions of any loan agreement, note, bond, mortgage,
indenture, lease, agreement or other instrument or commitment to which MAS
is a party, or by which MAS or its properties may be bound or affected or
(3) violate any order,' writ, injunction, decree, judgment, or ruling of any
court or governmental authority specifically applicable to MAS or any of its
properties.
Section 4.4 NO VIOLATION. Except as set forth on Schedule 4.4, to the best
knowledge of MAS, MAS has complied with all rules, regulations, codes
and laws affecting its business and operations and is not in default under, or
in violation of, any provision of any federal state or local rule, regulation,
code or law nor has MAS been given notice of any such default or violation.
Section 4.5 LICENSES AND RIGHTS. MAS possesses all franchises,
easements, licenses, permits and other authorizations from governmental or
regulatory authorities and from all other persons or entities that are necessary
to permit it to engage in its business as presently conducted in and at all
locations and places where it is presently operating. Such franchises, licenses,
permits and other authorizations are set forth on Schedule 4.5.
Section 4.6 CONSENTS. Except as set forth on Schedule 4.8 hereto, no
approval or consent of any person, firm or other entity or body is required to
be obtained by MAS for the authorization of this Agreement or the
consummation by MAS of the transactions contemplated hereby.
Section 4.7 NO DEFAULTS. Except as set forth on Schedule 4.7, to the best
knowledge of MAS, no default (or event which with the passage of time or the
giving of notice or both would become a default) exists or is alleged to exist
with respect to the performance of any obligation of MAS under the terms of
any indenture, license, mortgage, deed of trust, lease, note, guaranty or other
contract or instrument, including, but not limited to, any contract set forth on
Schedule 4.17, to which MAS is a party or to which its assets are subject,
or by which it is otherwise bound, and no such default or event exists or is
alleged to exist with respect to the performance of any obligation of any other
party thereto.
Section 4.8 FINANCIAL STATEMENTS. DGI has been or will be furnished with
audited financial statements of MAS for the year ended December 31, 1998,
(the "Financial Statements"). The Financial Statements were prepared in accordance
with generally accepted accounting principles applied on a basis consistent with
prior periods and as of their date of issuance were or will be true, correct and
complete all material respects and present fairly and accurately the information
set forth therein.
Section 4.9 ABSENCE OF CERTAIN CHANGES. Except as set forth on Schedule
4.9 hereto, since December 31. 1998, MAS has actively conducted its business
in the ordinary and regular course. Since that date, there has not been any
material adverse change in the condition (financial or otherwise), results of
operations, assets, liabilities, properties, business or prospects of MAS nor is
any event threatened which would cause such an adverse change, nor has there
occurred any event or governmental regulation or order restricting the business
of MAS.
Section 4.10 FACILITIES AND EQUIPMENT. MAS does not own any personal
property owned or leased any facility for its operation.
Section 4.11 TITLE TO ASSETS. MAS does not own any tangible property.
Section 4.12 ABSENCE OF UNDISCLOSED LIABILITIES. MAS does not have
any material liabilities or obligations, either accrued or unaccrued, fixed or
contingent, which have not been reflected in the Financial Statements or set
forth on Schedule 4.12 hereof, or which exceed in the aggregate $5,000.
Section 4.13 LITIGATION. Schedule 4.13 hereof sets forth a list of all
administrative or judicial proceedings to which MAS is a party. Except as
set forth on Schedule 4.13, there is no action, suit, claim, demand, arbitration
or other proceeding, administrative or judicial, pending or, to the best
knowledge of MAS, threatened against or relating to MAS which, if adversely
determined or resolved, would materially and adversely affect the financial
condition, results of operations, business or prospects of MAS.
Section 4.14 PATENTS AND TRADEMARKS.
(a) Except as set forth on Schedule 4.14(a), MAS does not own, or
operate under, any patent, trademark or service mark or any applications
therefor. All trade names (including those whose use is limited to one or more
states of the United States) owned or used by MAS are listed on Schedule
4.14 hereof and, to the extent indicated therein, have been duly registered with
the states of the United States or the corresponding offices of other countries.
Except as set forth on Schedule 4.14, MAS is the sole and exclusive owner
of, or has the sole and exclusive power with respect to, or has the sole and
exclusive right to use, the trade names specified on Schedule 4.14.
(b) Except as set forth on Schedule 4.14(b) hereof, MAS has not
ever been charged with infringement or violation of any adversely held
trademark, trade name or copyright.
(c) Except as set forth on Schedules 4.14(a) and 4.14(b), there are no
claims or demands of any other person, firm or corporation pertaining to the
trade names, copyright registrations or pending copyright registration
applications, as the case may be, listed on such schedules, and no proceedings
have been instituted which challenge the right of MAS in respect thereof.
Section 4.15 EMPLOYEE BENEFITS.
(a) Schedule 4.15 hereof contains a list of (i) each pension, profit
sharing, bonus, deferred compensation, or other retirement plan or arrangement
for the benefit of any employee or group of employees of MAS or any
independent contractors or group of independent contractor of MAS, (ii) each
medical, health, disability, insurance or other plan or arrangement of MAS,
and (iii) each employee stock option plan or other plan providing for the
purchase of shares of capital stock of MAS. All of such plans and
arrangements of MAS are referred to herein as the "employee benefit plans".
(b) The amounts reflected in the Financial Statements as liabilities or
contingent liabilities with respect to employee benefit plans have been
calculated in accordance and compliance with applicable law, including
accounting principles relating thereto.
(c) All of the employee benefit plans maintained by MAS (and each
funding medium which may be attendant thereto) are in compliance with applicable
law and all reporting and disclosure requirements under applicable laws and
regulations, and have been administered and operated in accordance with their
respective provisions and applicable law. There are no actions, suits or claims
(other than routine claims for benefits) pending with respect to the employee
benefit plans.
(d) MAS has filed, published and disseminated all reports,
documents, statements and communications which are required to be filed,
published or disseminated under applicable law and the rules and regulations
promulgated thereunder relating to, and have timely made all modifications and
amendments to, the employee benefit plans.
Section 4.16 TAXES AND TAX RETURNS. MAS has duly filed all income,
franchise and other tax returns and reports required to be filed by it and has
duly paid or made provision for the payment of all taxes (including any interest
or penalties) which are due and payable pursuant to such returns. MAS has
withheld proper and accurate amounts from their employees' compensation in
substantial compliance with all withholding and similar provisions of applicable
law. There are and will hereafter be no tax deficiencies (including penalties
and interest) of any kind assessed against MAS with respect to any period
ending on or before the Closing Date.
Section 4.17 CONTRACTS. MAS has heretofore furnished to DGI or its
counsel true and complete copies of each document, and a written description of
each oral contact, set forth on Schedule 4.17 hereof. Schedule 4.17 is a true
and complete list of all contracts, understandings, commitments, arrangements
and agreements of the following types, including all amendments thereto to which
MAS is a party:
(a) Contracts relating to equipment purchases, or series of similar
equipment purchases from the same supplier, involving an expenditure of, or if
in a series, expenditures in the aggregate of, more than $25,000;
(b) Bonus, incentive, pension, profit-sharing, hospitalization,
insurance, deferred compensation, retirement, stock option or stock purchase
plans or similar plans providing employee benefits;
(c) Factoring, loan, note, financing or similar contracts with any
lenders or guarantees of undertakings to answer for the debts or defaults of
another, or any contracts encumbering title to any properties, involving in each
case, or if in a series involving the same lender, guarantor or property, as the
case may be, in the aggregate, at least $25,000;
(d) Contracts for the acquisition or disposition of a business or
substantially all of the property, assets or capital stock or other securities
of a business or company under which there are continuing or unperformed
obligations on the part of any of the parties hereto, which contracts in each
case involve at least $25,000;
(e) Conditional sales contracts, leases of personal property or
contracts for the purchase or sale of real or personal property, involving in
each case at least twenty-five thousand dollars ($25,000);
(f) Management or consulting contracts, involving in each case, or with
respect to any individual in the aggregate, at least twenty-five thousand
dollars ($25,000);
(g) Contracts for the furnishing of services or products to or by
MAS, involving an expenditure in each case of at least twenty-five thousand
dollars ($25,000);
(h) Royalty or licensing contracts or contracts requiring similar
payments to unrelated parties individually, or with respect to any unrelated
party in the aggregate, involving or which reasonably may in the future involve
an amount in excess of twenty-five thousand dollars ($25,000) annually;
(i) All employment agreements between MAS and any of its employees;
and
(j) All agreements, contracts and commitments not listed on any other
schedule hereto which individually involve the payment of twenty-five thousand
dollars ($25,000) or more.
Except as set forth on Schedule 4.17, all such contracts,
understandings, commitments, arrangements and agreements are in full force and
effect.
Section 4.18 COLLECTIVE BARGAINING AGREEMENTS Schedule 4.18 hereof is a
list of all collective bargaining agreements with any labor organization to
which MAS is a party. The relations of MAS with its employees are good
and there are no impending labor difficulties.
Section 4.19 INSURANCE. MAS has no insurance policy.
Section 4.20 REAL PROPERTY.
(a) MAS does not own nor lease any real property.
Section 4.20 MATERIAL MISSTATEMENTS OR OMISSIONS. No
representations or warranties made by MAS under this Agreement or in any
certificate, schedule or other document furnished or to be furnished to DGI or
its counsel pursuant hereto, or in connection with the transactions contemplated
by this Agreement, contains or will contain any untrue statement of a material
fact, or omits or will omit to state a material fact necessary to make the
statements of fact contained therein not misleading.
5. COVENANTS AND TRANSACTIONS PRIOR TO CLOSING
Section 5.1 CONDUCT AND TRANSACTIONS OF DGI PRIOR TO THE CLOSING.
Between the date of this Agreement and the Closing, the executive officers and board of
directors of DGI shall retain full control of the management and business
thereof. In order to assure protection and preservation of DGI's business as
well as DGI's performance of its obligations under and related to this
Agreement, DGI agrees that from the date of this Agreement up to and including
the Closing;
(a) DGI shall give MAS, its counsel, accountants, appraisers
and other representatives or experts retained by MAS full access on
reasonable notice to all the premises and books, records and personnel of DGI
during normal business hours and cause DGI to furnish to MAS such financial
and operating data and other information with respect to the business and
properties of DGI as MAS may from time to time reasonably request. In the
event of termination of this Agreement for any reason, MAS will return all
documents, work papers and other materials obtained from DGI or DGI and will not
further disclose to third parties any confidential information obtained by it
pursuant hereto.
(b) DGI shall use all reasonable efforts to (i) preserve intact
the present business organization and personnel of DGI, (ii) preserve the
present goodwill and advantageous relationships of DGI with all persons having
business dealings with DGI, and (iii) preserve and maintain in force all
licenses, certificates, leases, contracts, permits, registrations, franchises,
confidential trade names and copyrights, and applications for any of same,
bonds and other similar rights of DGI. Except as otherwise provided in this
Agreement, DGI shall refrain from entering into any new employment or consulting
agreements with any of its present officers, management personnel or
consultants, or any other employment or consulting agreement with any other
person, not terminable by DGI on less than thirty (30) days' notice. DGI shall
maintain in force all property, casualty, crime, life, directors, officers and
other forms of insurance and bonds which it presently carries and, except with
the written consent of MAS, no cancellation or assignment of existing
insurance coverage will be effected by DGI.
(c) DGI shall operate its business only in the usual, regular
and ordinary course and manner, and, except with the written consent of DGI,
shall refrain from (i) selling or agreeing to sell any capital stock, or (ii)
except in the ordinary course of business, encumbering or mortgaging any property
or assets or terminating or modifying any lease or incurring any obligation
(contingent or otherwise).
(d) DGI shall not discuss or negotiate with any third party a
possible sale of all or any part of the capital shares or assets of DGI,
nor provide any information to any third party with respect thereto, other than
such Information which is provided in the ordinary course of the business
operation of DGI to third parties, provided DGI has no reason to believe that
such information may be utilized to evaluate a possible sale of the capital
shares or assets of DGI.
(e) DGI will exert its best efforts to fulfill in a timely manner
all objectives and conditions to permit consummation of the transactions as
contemplated by this Agreement and execute and deliver to MAS any and all
documents necessary, in the reasonable opinion of its counsel, to consummate the
transactions contemplated by this Agreement.
Section 5.2 CONDUCT BY MAS PRIOR TO CLOSING. Between the date
of this Agreement and the Closing Date, MAS shall use its best efforts to
fulfill in a timely manner all objectives and conditions to permit consummation
of the transactions as contemplated by this Agreement and execute and deliver to
DGI any and all documents necessary, in the reasonable opinion of its counsel,
to consummate the transactions contemplated by this Agreement.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF MAS
The obligations of MAS under this Agreement are, at its option,
subject to satisfaction of the following conditions at or prior to the Closing:
Section 6.1 REPRESENTATIONS OF DGI. The representations and
warranties of DGI set forth in this Agreement shall be true and complete in all
material respects on and as of the Closing to the same extent and with the same
force and effect as if made on such date, except as expressly provided to the
contrary in this Agreement.
Section 6.2 CONSENTS. All necessary approvals or consents shall have been
obtained from any and all federal departments and agencies and from all other
commissions, boards, agencies and from any other person, firm or entity whose
approval or consent is necessary to the consummation of the transactions
contemplated by this Agreement.
Section 6.3 PERFORMANCE BY DGI. DGI shall have duly performed all
obligations, covenants and agreements undertaken by them herein and complied
with all terms and conditions applicable to them hereunder to be performed and
complied with prior to the Closing.
Section 6.4 DOCUMENTS TO BE DELIVERED TO MAS. MAS shall have
received:
(a) A certificate, dated as of the Closing and executed by DGI
certifying as to the fulfillment of the matters contained in Sections 6.1, 6.2
and 6.3;
(b) True and complete copy of the certificates of incorporation
of DGI, certified by the Secretary of State of Nevada or similar office of
competent jurisdiction, and of the by-laws of DGI, together with all amendments
thereto, certified by the Secretary of DGI;
(c) Good standing certificate for DGI, certified by the Secretary
of State of Nevada;
(d) Certificates representing 4,500 of the DGI Shares, duly
endorsed for transfer, and DGI shall have received the 7,667,820 MAS Shares,
duly endorsed for transfer. All such shares shall be subject to Rule 144 legend.
Section 6.5 SUITS. No suit, action or other proceeding shall be threatened
or pending before any court or governmental agency in which it will be or it is
sought to restrain or prohibit or to obtain damages or other relief in
connection with this Agreement or the consummation of the transactions
contemplated by this Agreement or which is likely to materially and adversely
affect the financial condition, results of operations, business or prospects of DGI.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF DGI
The obligations of DGI under this Agreement are, at its option, subject to
satisfaction of the following conditions at or prior to the initial Closing:
Section 7.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of MAS set forth in this Agreement shall be true and complete in
all material respects on and as of the Closing to the same extent and with the
same force and effect as if made on such date, except as affected by the
transactions contemplated by this Agreement.
Section 7.2 CONSENTS. All necessary approvals or consents shall have been
obtained from any and all federal departments and agencies and from all other
commissions, boards, agencies and from any other person, firm or entity whose
approval or consent is necessary to the consummation of the transactions
contemplated by this Agreement.
Section 7.3 PERFORMANCE BY MAS. MAS shall have duly performed all
obligations, covenants and agreements undertaken by it herein and complied with
all the terms and conditions applicable to them hereunder to be performed or
complied with prior to the Closing.
Section 7.4 DOCUMENTS TO BE DELIVERED TO DGI. DGI shall have received:
(a) certificate dated as of the Closing, and executed by an
officer of MAS, certifying as to the fulfillment of the matters contained in
Sections 7.1, 7.2 and 7.3;
(b) Certificates representing 7,667,820 MAS Shares, duly endorsed
for transfer, and MAS shall have received 4,500 DGI Shares, duly
endorsed for transfer.
(c) True and complete copies of the certificate of incorporation
of MAS and of the by-laws of MAS, together with all amendments thereto,
certified by the Secretary of MAS;
(d) True and correct copies of Minutes of the Board of Directors
authorizing the officers and the Company to consummate the transaction.
Section 7.5 SUITS. No suit, action or other proceeding shall be threatened
or pending before any court or governmental agency in which it will be or it is
sought to restrain or prohibit or to obtain damages or other relief in
connection with this Agreement or the consummation of the transactions
contemplated by this Agreement.
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND INDEMNIFICATION
Section 8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Notwithstanding
the closing of the transactions contemplated by this Agreement, or any
investigation made by or on behalf of DGI or MAS, the representations
and warranties of DGI or MAS contained in this Agreement or in any
certificate, schedule, chart, list, letter, compilation or other document
delivered pursuant hereto, shall survive the Closing for a period of one (1)
year; provided, however, that as to any breach of, or misstatement in, any such
representation or warranty as to which one party has given notice to the other
on or prior to the expiration of such one (1) year period, the same shall
continue to survive beyond said period, but only as to the matters contained in
such notice.
Section 8.2 DGI's INDEMNIFICATION. DGI covenants and agrees to indemnify
and save harmless MAS and its directors, officers, employees and agents from
any and all costs, expenses, losses, damages and liabilities incurred or
suffered directly or directly by any of them (including reasonable legal fees
and costs) proximately resulting from or attributable to the breach of, or
misstatement in, any one or more of the representations or warranties of DGI
made in or pursuant to this Agreement.
Section 8.3 MAS'S INDEMNIFICATION. MAS covenants and agrees to
indemnify and save harmless DGI and its directors, officers, employees and
agents from any and all costs, expenses, losses, damages and liabilities
incurred or suffered by any of them (including reasonable legal fees and costs)
proximately resulting from or attributable to the breach of, or misstatement in,
any one or more of the representations or warranties of MAS made in or
pursuant to this Agreement.
Section 8.4 DEFENSE AGAINST ASSERTED CLAIMS. If any claim or
assertion of liability is made or asserted by a third party against a party indemnified
pursuant to this Article 8 ("Indemnified Party") based on any liability or
absence of right which, if established, would constitute a matter for which the
Indemnified Party would be entitled to indemnification by another party hereto
("the Indemnifying Party") the Indemnified Party shall with reasonable
promptness give to the Indemnifying Party written notice of the claim or
asserting of liability and request the Indemnifying Party to defend the same.
Failure to so notify the Indemnifying Party shall not relieve the Indemnifying
Party of any liability which the Indemnifying Party might have to the
Indemnified Party unless such failure materially prejudices the Indemnifying
Party's position. The Indemnifying Party shall have the right to defend against
such liability or assertion, in which event the Indemnifying Party shall give
written notice to the Indemnified Party of the acceptance of defense of such
claim and the identity of counsel selected by the Indemnifying Party with
respect to such matters. The Indemnified Party shall be entitled to participate
with the Indemnifying Party in such defense and also shall be entitled at its
option to employ separate counsel for such defense at the expense of the
Indemnified Party. In the event the Indemnifying Party does not accept the
defense of the matter as provided above or in the event that the Indemnifying
Party or its counsel fails to use reasonable care in maintaining such defense,
the Indemnified Party shall have the full right at its option to defend against
the liability or assertion and to employ counsel for such defense at the expense
of the Indemnifying Party. All parties hereto will cooperate with each other in
the defense of any such action and the relevant records of each shall be
available to the others with respect to such defense.
9. POST-CLOSING MATTERS
9.1 PERFORMANCE PONDS. DGI shall maintain in force at its expense, until
their maturity or expiration in accordance with their terms, all performance
bonds issued by DGI prior to the Closing Date.
10. ASSIGNMENT, THIRD PARTIES, BINDING EFFECT
The rights under this Agreement shall not be assignable nor the duties
delegable by any party without the written consent of all parties hereto having
been obtained thereto. Nothing contained in this Agreement, express or implied,
is intended to confer upon any person or entity, other than the parties hereto,
and their successors in interest, any rights or remedies under or by reason of
this Agreement unless so stated expressly to the Contrary. All covenants,
agreements, representations and warranties of the parties contained herein shall
be binding upon and inure to the benefit of MAS and DGI and their respective
successors and permitted assigns.
11. ABANDONMENT
In the event the transactions contemplated hereby are terminated or
abandoned by mutual agreement of the parties hereto, there shall be no
liability on the part of any of the parties by reason of such termination or
abandonment.
12. NOTICES
All notices, requests, demands and other communications hereunder shall be
writing and shall, be deemed to have been duly given when personally delivered
or deposited in the United States mail, certified or registered, return
receipt requested, postage prepaid, addressed to the parties at the following
addresses (or at such other address as shall be given in writing by any party to
the other) as follows:
To MAS: Mr. Aaron Tsai
MAS Acquisition VII Corp.
1710 East Division Street
Evansville, Indiana 47711
Telephone: (812) 479-7266
Facsimile: (812) 479-7267
To DGI: Mr. Marc Cianfarani
Dimgroup, Inc.
450 Jevlan Drive, Suite 106
Woodbridge, Ontario L4L-8E2
Canada
Telephone: 1-905-851-2602
Facsimile: 1-905-856-4907
13. REMEDIES NOT EXCLUSIVE
No remedy conferred by any of the provisions of this Agreement is intended
to be exclusive of any other remedy, and each and every remedy shall be
cumulative and shall be in addition to every remedy given hereunder or now or
hereafter existing, at law or in equity by statute or otherwise. The election of
any one or more remedies by MAS or DGI shall not constitute a waiver of the
right to pursue other available remedies.
14. COUNTERPARTS
This Agreement may be executed in one or more counterparts each of which
shall be deemed to be an original but all of which together shall constitute one
and the same instrument.
15. CAPTIONS AND SECTION HEADINGS
Captions and section headings used herein are for convenience only and are
not a part of this Agreement and shall not be used in construing it.
16. WAIVERS
Any failure by any of the parties hereto to comply with all of the
obligations, agreements or conditions set forth herein may be waived by the
other party or parties, provided, however that any such waiver shall not be
deemed a waiver of any other obligation, agreement or condition contained
herein.
17. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties. There
are not and shall not be any verbal statements, representations, warranties,
undertakings or agreements between the parties, and this Agreement may not be
amended or modified in any respect except by a written instrument signed by the
parties hereto.
18. APPLICABLE LAW
This Agreement shall be governed and construed in accordance with the laws
of the State of Indiana.
* * *
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
MAS Acquisition VII Corp.
By /s/ Aaron Tsai
-----------------------------------------
Aaron Tsai, President
Dimgroup, Inc.
By /s/ Marc Cianfarani
-----------------------------------------
Marc Cianfarani, President
<PAGE>
EXHIBIT 3.1
[ LOGO ] ARTICLES OF MERGER SUE ANNE GILROY
[ State of ] State Form 38333 (R4 / 6-95) SECERTARY OF STATE
[ Indiana ] State Board of Accounts CORPORATIONS DIVISION
Approved 1995 302 W. Washington St. Rm. E018
Indianapolis, IN 46204
Telephone: (317) 232-6576
Indiana Code 23-1-40-1 et seq.
INSTRUCTIONS: Use 8 1/2" x 11' white FILING FEE:$90.00
paper for inserts.
Present original and two (2) copies to address in upper
right corner of this form.
Please TYPE or PRINT
- --------------------------------------------------------------------------
ARTICLES OF MERGER / SHARE EXCHANGE
OF
Dimgroup.com Inc.
----------------------------------------------------------------------
(Hereinafter "the nonsurviving corporation(s)")
- --------------------------------------------------------------------------
INTO
MAS Acquisition VII corp.
----------------------------------------------------------------------
(Hereinafter "the surviving corporation(s)")
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
ARTICLE I - SURVIVING CORPORATION
- --------------------------------------------------------------------------
SECTION 1:
The name of the Corporation surviving the merger is: Dimgroup.com Inc.
and such name X has _ has not (designate which) been changed as a
result of the merger.
- --------------------------------------------------------------------------
ARTICLE II - NONSURVIVING CORPORATION (S)
- --------------------------------------------------------------------------
SECTION 2:
a. The surviving corporation is a domestic corporation existing pursuant
to the provisions of the Indiana Business Corporation Law incorporated on
October 7, 1996.
----------------
b. The surviving corporation is a foreign corporation incorporated under
the laws of the State of ______________________ and _ qualified _ not
qualified (designate which) to do business in Indiana.
If the surviving corporation is qualified to do business in Indiana, state
the date of qualification:________________________.
(If Application for Certificate of Authority is filed concurrently
herewith state "Upon approval of Application for Certificate of Authority".)
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
ARTICLE III - PLAN OF MERGER OR SHARE EXCHANGE
- --------------------------------------------------------------------------
The Plan of Merger or Share Exchange, containing such information as
required by Indiana Code 23-1-40-1(b), is set forth in "Exhibit A",
attached hereto and made a part hereof.
- --------------------------------------------------------------------------
ARTICLE IV - MANNER OF ADOPTION AND VOTE OF SURVIVING CORPORATION
(Must complete Section 1 or 2)
- --------------------------------------------------------------------------
SECTION 1: _ Shareholder vote not required.
The merger / share exchange was adopted by the incorporators or board
of directors without shareholder action and shareholder action was not
required.
- --------------------------------------------------------------------------
SECTION 2: X Vote of shareholders.
The designation (i.e., common, preferred or any classification where
different classes of stock exist), number of outstanding shares, number
of votes entitled to be cast by each voting group entitled to vote
separately on the merger / share exchange and the number of votes of
each voting group represented at the meeting is set forth below:
- --------------------------------------------------------------------------
TOTAL A B C
DESIGNATION OF EACH VOTING GROUP (i.e. preferred and common) ALL Common
- --------------------------------------------------------------------------
NUMBER OF OUTSTANDING SHARES 8,519,800
- --------------------------------------------------------------------------
NUMBER OF VOTES ENTITLED TO BE CAST 8,519,800
- --------------------------------------------------------------------------
NUMBER OF VOTES REPRESENTED AT MEETING 8,250,000
- --------------------------------------------------------------------------
SHARES VOTED IN FAVOR 8,250,000
- --------------------------------------------------------------------------
SHARES VOTED AGAINST 0
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
ARTICLE V - MANNER OF ADOPTION AND VOTE OF NONSURVIVING CORPORATION
(Must complete Section 1 or 2)
- --------------------------------------------------------------------------
SECTION 1: _ Shareholder vote not required.
The merger / share exchange was adopted by the incorporators or board
of directors without shareholder action and shareholder action was not
required.
- --------------------------------------------------------------------------
SECTION 2: X Vote of shareholders.
The designation (i.e., common, preferred or any classification where
different classes of stock exist), number of outstanding shares, number
of votes entitled to be cast by each voting group entitled to vote
separately on the merger / share exchange and the number of votes of
each voting group represented at the meeting is set forth below:
- --------------------------------------------------------------------------
TOTAL A B C
DESIGNATION OF EACH VOTING GROUP (i.e. preferred and common) ALL Common
- --------------------------------------------------------------------------
NUMBER OF OUTSTANDING SHARES 4,500
- --------------------------------------------------------------------------
NUMBER OF VOTES ENTITLED TO BE CAST 4,500
- --------------------------------------------------------------------------
NUMBER OF VOTES REPRESENTED AT MEETING 4,500
- --------------------------------------------------------------------------
SHARES VOTED IN FAVOR 4,500
- --------------------------------------------------------------------------
SHARES VOTED AGAINST 0
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
In Witness Whereof, the undersigned being the President of the
surviving corporation executes these Articles of Merger / Share
Exchange and verifies, subject to penalities of perjury that the
statements contained herein are true, this 11th day of August, 1999.
- --------------------------------------------------------------------------
Signature Printed name
/s/ Marc Cianfarani Marc Cianfarani
- --------------------------------------------------------------------------
<PAGE>
EXHIBIT 99.0
MAS FINANCIAL CORP.
1710 E. Division St. Tel: (812) 479-7266
Evansville, IN 47711 Fax: (812) 479-7267
- --------------------------------------------------------------------------
CONSULTING AGREEMENT
This agreement is entered into on this 10th day of August, 1999 by and
between MAS Financial Corp. (hereinafter referred to as "MAS"), and Dimgroup.
com, their heirs, designees or assignees, (hereinafter referred to as
"Client"), and is made with reference to the following recitations:
Whereas, MAS has skills and expertise in the fields of business consulting,
due diligence, mergers and acquisitions, and public and private offering
structuring and transactions, and,
Whereas, for the purpose of advancing the business plans of Client, Client
wishes to contract for the control stock of an acquisition company from MAS,
and,
Whereas MAS owns or controls the control stock of a public shell
corporation (hereinafter referred to as "Acquisition" company, a corporation
organized under the laws of the State of Indiana, having those classes and
numbers of shares as more fully set forth on the company information sheet
attached hereto and made a part hereof by reference. MAS has control of
Acquisition company and is prepared to transfer the control block. Now,
therefore, the parties hereto hereby agree and covenant as follows:
(1) MAS agrees to take certain actions, and undertake certain obligations
for the orderly transfer of the control block of stock of Acquisition
company (90% of the shares issued and outstanding - See Exhibit A) to Client.
MAS agrees as well to do all of the following acts:
* Name Change and New Stock Certificates
* Unaudited financial statements brought forward to most recent period.
* Change of officers and directors and resignation of present board
* 15C211 prepared and filed with NASD.
* Deliver control block shares.
* Obtain CUSIP number.
* Obtain a stock symbol for trading on the OTC Bulletin Board.
* Furnish Market Maker.
* Any other document or act needed to make an orderly transfer of control.
All expenses incurred by the Acquisition company, after the transfer of
control by MAS to the Client, shall be the responsibility of the Acquisition
company.
(2) The Client agrees to pay MAS a consulting fee of $135,000 as follows:
* $5,000 is due and payable upon signing of this agreement and an additional
$5,000 is due and payable upon a market maker sent out Form 211 application
to NASD Regulation.
* An additional $25,000 is due and payable upon Client raising additional
$50,000 in capital through financial intermediaries introduced by MAS.
* a $100,000 non-interest bearing note due on August 10, 2001 guaranteed by
15% of the total post-merger shares outstanding of the Acquisition company
owned by officers/directors.
(3) At closing, which shall take place at a time and place mutually agreeable
to the parties hereto, MAS shall deliver to Client or its designee the
following:
(a) Certificates representing the shares being sold hereunder; containing
the following legend:
"The securities represented by this Certificate have not been registered
under the Securities Act of 1933 (the "Act") and are "Restricted Securities"
<PAGE>
as the term is defined in Rule 144 under the Act. The Common Shares may not
be offered for sale, sold or otherwise transferred except pursuant to an
effective registration statement under the Act or exemption, the availability
of which is to be established to the satisfaction of the Corporation."
(b) Necessary consents, if any, from the state of domicile of the Acquisition
company;
(c) All corporate books, records, and documents, stock books, ledgers,
minute books, articles and by-laws of the Acquisition company;
(d) Shareholder list of the Acquisition company;
(e) Resignations of all present officers and directors, effective as of the
closing date;
(f) Copy of two years of audited year-end financial statements;
(4) MAS represents and warrants the following:
(a) that the Acquisition company is a corporation duly organized and existing
under the laws of the State of Indiana, unless otherwise noted;
(b) that the Acquisition company will use its best efforts to preserve its
business organization intact.
(c) that the Acquisition company will not enter into any contract, commitment
or transaction, or declare, set aside or pay any dividend, or make any
distribution in respect of its capital stock, or waive any obligation or
liability, or compromise any claim, or cancel any note, loan or other
obligation owed to it, without the consent of Client.
(5) MAS represents and warrants the following prior to closing:
(a) That MAS will not cause any amendment to be made in the Articles of
Incorporation or By-Laws of the Acquisition company, nor issue or cause to
be issued any additional shares of capital stock; nor issue or cause to be
issued any warrants, obligations, subscriptions, options, convertible
securities, or other commitments under which any additional shares of its
capital stock may be directly or indirectly authorized, issued or
transferred nor will either agree to do any of the acts listed above.
(6) Client represents and warrants the following prior to closing:
(a) That Client is solely responsibly for the decision to by acquired by
the Acquisition company,
(b) That the Client firm to be acquired by the Acquisition company which
is the subject of this agreement shall be suitable in all respects for such
merger,
(c) That Client agrees not to effect any reverse split of the shares of
common stock for a period of three (3) years after the date of the merger.
(7) The parties shall at all times keep each other's information, sources,
trade secrets, processes, and confidential information strictly confidential.
(8) MAS is not rendering legal advise to Client. Each party is responsible
for all of it's own professional, legal, accounting, Broker-Dealer, and
consulting fees as they may apply to each party.
(9) Should Client terminate this transaction for any reason other than the
malfeasance or nonperformance of MAS prior to the acquisition of the
Acquisition company, all monies paid to MAS up until that point shall be
retained by MAS as liquidated damages. The parties agree to the
reasonableness of these liquidated damages. All documents and work product
prepared for or on behalf of Client by MAS up until that point shall become
the property of Client.
(10) MAS warrants that the Acquisition company being transferred shall be
transferred with no liabilities and little or no assets, and shall defend
and hold Client and the Acquisition company harmless against any action by
any third party against either of them arising out of, or as a consequence
of, any act or omission of MAS or the Acquisition company prior to, or
<PAGE>
during the closing contemplated by this contract of sale. MAS reserves the
right, if necessary, to substitute another Acquisition company acceptable
to Client of like worth.
(11) All of the representations and warranties contained within this
contract of sale, whether made by Client, MAS, or MAS on behalf of the
Acquisition company, will be true and correct on the closing date as if
made on that date.
(12) At any time prior to the closing, Client and their counsel, accountants
and other agents shall have full access during normal business hours to all
properties, books, accounts, records, contracts and documents relating to
the Acquisition company.
(13) This agreement shall be governed by the laws of the State of Indiana.
The parties agree to the jurisdiction of the Courts of the State of Indiana
and the United States District Court for the Southern District of Indiana as
the forums for the resolution of any legal disputes between the parties.
Client agrees to pay court costs, attorney fees in a reasonable amount, and
interest on any unpaid balances at the judgment rate then in effect in the
State of Indiana should it become necessary for MAS to engage in legal
action to recover any portion of the purchase price or any other fees from
Client.
(14) If any bona fide action or proceeding shall be pending against any
party on the closing date that could result in an unfavorable judgment,
decree or order that would prevent or make unlawful the performance of this
agreement, or if any agency of the federal or of any state government shall
have objected to it on or before the closing date to this transaction, or
if any prospectus contemplated with respect to the issuance and sale of
shares by Buyers shall have been disapproved by any federal or state
regulatory agency, either party may cancel and terminate this agreement
without liability to the other. All representations and warranties of the
parties shall expire and terminate and be extinguished by the closing, and
consummation of the closing shall be conclusive proof that each party is
fully satisfied with the facts constituting the basis of the representations
and warranties of the other party and with the performance of their
obligations hereunder. This paragraph shall not affect any obligation of
any party under this contract that is permitted to be performed in whole or
in part after the closing.
(15) Neither party may assign this agreement without the prior written
consent of the other party, which consent shall not be unreasonably withheld.
However, MAS may requires up to 180 days to perform due diligence on any
assignee of Client, and may reject any assignee not qualified by MAS.
(16) This documents contains the entire agreement between the parties hereto.
No oral or other representation or warranty has been given to Client by MAS,
and this agreement controls over any and all oral representations made by any
party to this transaction. This agreement may only be modified by a writing,
signed by the parties.
(17) Each party agrees to execute all of the documents and do all of the
things necessary to effectuate the purpose of this agreement, without delay or
limitations.
Accepted and Agreed: Accepted and Agreed:
/s/ Aaron Tsai /s/ Nick Montesano
__________________________ ____________________________________
MAS Financial Corp. Dimgroup.com
By: Mr. Aaron Tsai, President By: Nick Montesano, Director
Mailing Address:
MAS Financial Corp. Dimgroup.com
1710 E. Division St. 450 Jevlan Drive
Evansville, IN 47711 Woodbridge, Ontario L4L-8E2
Canada
<PAGE>
Exhibit A
MAS FINANCIAL CORP.
- ---------------------------------------------------------------------------
1710 E. Division St., Evansville, IN 47711 Tel: 812-479-7266
Fax: 812-479-7267
Company Information Company Code: MAS-7
GENERAL CORPORATE INFORMATION: Description
LEGAL NAME OF COMPANY AND SUBSIDIARIES: MAS Acquisition VII Corp.
FEDERAL I.D. AND STATE CHARTER NUMBER: will furnish at contract
TYPE OF ENTITY: Corporation
STATE OF INCORPORATION, DATE OF FORMATION: Indiana 1996
NET EQUITY: $1,000 or less
UNDERWRITER: Self
STOCK INFORMATION: Description
CLASSES OF STOCK
A. COMMON ; Par value $.001
1. Number of common shares authorized 80,000,000
2. Number of shares issued and outstanding 8,519,800
i. Number of "control shares" available 90 %
ii. Number of shares in treasury none
iii. Number of shareholders 150
3. Warrants and options outstanding none
B. PREFERRED ; Par value $.001
1. Number of preferred shares authorized 20,000,000
2. Number of shares issued and outstanding none
3. Number of shares in treasury none
MARKET INFORMATION: Description
1. Trading Symbol n/a
2. Market Makers n/a
3. Transfer Agent To be appointed
<PAGE>
</TABLE>
