<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) OCTOBER 4, 1999
MAS Acquisition VIII Corp.
(Exact name of Registrant as specified in charter)
Indiana 0-25881 35-2065470
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
168 South Park Street, San Francisco, California 94107
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (415) 908-1000
(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 September 15, 1999
pursuant to the terms and conditions of a Stock Exchange Agreement (the
"Agreement") dated September 15, 1999 between MAS Acquisition VIII Corp.,
an Indiana corporation (the "Company") and NetStaff, Inc., a Delaware
corporation ("NTSF"), which provided for the merger of NTSF 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 NTSF on September 15, 1999,
whereby NTSF agreed to merge into the Company and the Company is changing
its name to NetStaff, Inc. Pursuant to the terms of the Agreement, each
common share of NTSF is converted into 5.0943 common shares of the
Company. A total of 1,669,505 shares of common share of NTSF was converted
into 8,505,000 common shares of the Company. The common shares of the Company
issued in connection with the conversion have not been registered under the
Securities Act of 1933, as amended. In addition the Company has accepted the
return of, and cancelled, 88,722,800 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.
The Company's Articles of Amendment of the Articles of Incorporation has
been approved and filed on September 1, 1999 increasing the number of
authorized shares of common stock from 80,000,000 to 100,000,000 shares.
The Company has effected a 11 for 1 forward split on September 9, 1999. In
addition the Company has accepted the return of, and cancelled, 88,722,800
shares of Common Stock of the Company issued to Aaron Tsai. After issuing
1,669,505 shares of common stock to NTSF, the Company has a total of
13,500,000 shares of common stock issued and outstanding.
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 September 15, 1999,
and appointed Patrick Rylee as Director, President and Chief Executive Officer
and Colin Childerley as Director,
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements.
(i) Audited financial statements of NetStaff, Inc. for the year ended
December 31, 1997 and 1998.
(ii) Unaudited financial statements of NetStaff, Inc. for the six month
ended June 30, 1999.
(iii) Unaudited combined financial statement of MAS Acquisition VIII Corp.
and NetStaff, Inc. for the year ended December 31, 1997 and 1998.
(To be filed by amendment)
<PAGE>
NETSTAFF, INC.
(A Development Stage Company)
FINANCIAL REPORTS
DECEMBER 31, 1998
<PAGE>
NETSTAFF, INC.
(A Development Stage Company)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
CONTENTS
PAGE
<S> <C>
Independent auditors' report 1
Financial statements:
Balance sheet 2
Statements of operations 3
Statements of shareholders' equity (deficiency) 4
Statements of cash flows 5
Notes to financial statements 6-9
</TABLE>
<PAGE>
ARTHUR YORKES & COMPANY
Certified Public Accountants
15 West 39 Street . New York, New York 10018
212-764-8888
FAX NUMBER 212-819-1465
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
NetStaff, Inc.
We have audited the accompanying balance sheet of NetStaff, Inc. (a
development stage company) as of December 31, 1998, and the related
statements of operations, stockholders' equity, and cash flows for
the two years then ended. 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
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
As discussed in Note 5 to the financial statements, the Company is
actively engaged in obtaining outside sources of additional financing.
In our opinion, the financial statements referred to above present
fairly, in all material aspects, the financial position of NetStaff, Inc.
as of December 31, 1998, and the results of its operations and
its cash flows for the two years then ended, in conformity with
generally accepted accounting principles.
The June 21, 1996 (inception) to December 31, 1998 financial statements
were compiled by us in accordance with Statements on Standards for
Accounting and Review Services issued by the American Institute
of Certified Public Accountants. A compilation is limited to
presenting in the form of financial statements information that is the
representation of management. We have not audited or reviewed the
financial statements and, accordingly, do not express an opinion or
any other form of assurance on them.
/s/ Arthur Yorkes & Company
May 27, 1999
<PAGE>
NETSTAFF, INC.
(A Development Stage Company)
BALANCE SHEET
DECEMBER 31, 1998
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current assets:
Cash $ 330
Prepaid expenses 9,000
--------
Total current assets 9,330
--------
Fixed assets (at cost):
Computer equipment 41,275
Proprietary software 132,609
Furniture and equipment 15,141
Leasehold improvements 7,774
--------
196,799
Accumulated depreciation 9,170
--------
187,629
Trademarks, net of amortization 5,850
--------
193,480
--------
$202,809
========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and other liabilities $189,445
Notes payable 161,000
--------
Total liabilities 350,445
--------
Shareholders' equity (deficiency):
Preferred stock $.001 par value,
5,000,000 shares authorized: Series A
35,000 shares issued and outstanding 35,000
Common stock $.001 par value,
authorized 15,000,000 shares,
1,449,745 issued and outstanding 1,449
Additional paid-in-capital - common stock 558,807
Deficit accumulated during the development
stage (742,892)
--------
(147,636)
--------
$202,809
========
See notes to financial statements. 2
</TABLE>
<PAGE>
NETSTAFF, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
June 21, 1996
(Inception) to
December 31,
1998 1997 1998
-------- -------- --------------
(Compiled)
<S> <C> <C> <C>
Income $ 10,600 $ 5,000 $ 15,600
-------- -------- ----------
Expenses:
Payroll and payroll taxes 83,650 160,910 280,506
Advertising and promotional 2,388 26,713 58,026
Communications 21,375 31,429 58,807
Consulting/advisors 30,172 250 32,422
Corporate taxes 60 1,475 1,535
Depreciation and amortization 9,588 - 9,588
Equipment 10,149 14,239 26,175
Insurance 796 1,025 2,816
Interest expense 12,576 - 12,576
Office and other expenses 10,147 34,306 49,303
Professional fee 17,563 58,992 84,077
Rent 54,209 53,523 127,889
Repairs and maintenance 337 6,100 6,437
Travel and entertainment 7,061 16,072 25,621
Utilities 1,200 3,197 4,397
-------- -------- ----------
Total expenses 261,271 408,231 780,175
-------- -------- ----------
Loss before other income and
expenses (250,671) (403,231) (764,575)
Office sub-lease income 21,683 - 21,683
-------- -------- ----------
Net loss $(228,988) $(403,231) $(742,892)
========= ========= =========
See notes to financial statements. 3
</TABLE>
<PAGE>
NETSTAFF, INC.
(A Development Stage Company)
STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
Preferred Stock Common Stock
------------------ -------------------------------
Additional
Shares Shares Par Paid-in-
Issued Amount Issued Value Capital Deficit
------- --------- ------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balance, January
1, 1997 35,000 $ 35,000 890,379 $ 890 $ - $(110,674)
Net loss for the
year ended
December 31, 1997 - - - - - (403,230)
------- --------- ------- --------- --------- ---------
Balance, December
31, 1997 35,000 35,000 890,379 890 - (513,904)
Net loss for the
year ended
December 31, 1998 - - - - - (228,988)
Common stock
subscribed for - - - - - -
Common stock
issued - - 559,366 559 558,807 -
------- --------- --------- --------- --------- ---------
Balance, December
31, 1998 35,000 $ 35,000 1,449,745 $ 1,449 $558,807 $(742,892)
======= ========= ========= ========= ======== ==========
See notes to financial statements. 4
</TABLE>
<PAGE>
NETSTAFF, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
June 21, 1996
(Inception) to
December 31,
1998 1997 1998
(Compiled)
----------- ----------- ------------
<S> <C> <C> <C>
Cash flows from operating
activities:
Net loss $ (228,988) $ (403,229) $ (742,892)
----------- ----------- ------------
Adjustments to reconcile net
loss to net cash used in
operating activities:
Depreciation and amortization 9,588 - 9,588
(Increase) decrease in prepaid
expenses 540 (8,240) (9,000)
Increase in accounts payable 111,303 36,507 189,446
----------- ----------- ------------
Total adjustments 121,431 28,267 190,034
----------- ----------- ------------
Net cash used in operating
activities (107,557) (374,962) (552,858)
----------- ----------- ------------
Cash flows from investing activities:
Acquisition of fixed assets (238) (144,874) (196,799)
Acquisition of trade marks - (6,269) (6,269)
----------- ----------- ------------
Net cash used in investing
activities (238) (151,143) (203,068)
----------- ----------- ------------
Cash flows from financial activities:
Increase (decrease) in notes and
loans payable (451,286) 528,198 161,000
Issuance of preferred stock - - 35,000
Issuance of common stock 559 - 1,449
Paid-in-capital, common 558,807 - 558,807
----------- ----------- ------------
Net cash provided by
financing activities 108,080 528,198 756,256
----------- ----------- ------------
Net increase in cash and cash
equivalents 285 2,093 330
Cash and cash equivalents at
beginning of year 45 (2,048) -
----------- ----------- ------------
Cash and cash equivalents at
end of year $ 330 $ 45 $ 330
=========== =========== ============
See notes to financial statements. 5
</TABLE>
<PAGE>
NETSTAFF, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
1. Summary of significant accounting policies:
Business activity:
NetStaff, Inc. (the Company) is engaged in the business of providing an
Internet-based multiple listing service for the professional staffing industry.
Equipment and improvements:
Equipment and improvements are carried at cost. Depreciation is computed
under straight-line methods principally over seven years. Expenditures for
major improvements that extend the useful lives of property and equipment
are capitalized. Expenditures for maintenance and repairs are charged to
expense as incurred.
Cash and cash equivalents:
For purposes of the statements of cash flows, the Company considers all
highly liquid debt instruments with an original maturity of three months or
less to be cash equivalents.
Estimates:
The 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 financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
2. Income taxes:
The Company has available net operating loss carryforwards of approximately
$743,000 for tax purposes to off-set future taxable income. Estimated deferred
tax assets relating to these net operating losses have been fully reserved by
valuation allowances because of the uncertainty of realization through future
income and the possibility of future changes in ownership which, under the
Internal Revenue Service Code, could limit these carryforwards.
6
<PAGE>
NETSTAFF, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
3. Commitment:
The Company is obligated under a net lease for its office location. The lease
expires May 31, 2002.
The minimum lease payments under the above lease are as follows:
<TABLE>
<CAPTION>
Year Ended
December 31, Amount
------------ -----------
<S> <C>
1999 $ 49,400
2000 51,800
2001 54,200
2002 23,000
-----------
$ 178,400
===========
</TABLE>
Rent and related expenses amounted to $54,209 and $53,093 for the years
ended December 31, 1998 and 1997.
The Company has sublet a portion of the premises to an outside non-related
company. The lease expires October 31, 1999. The annual rental approximates
$97,200. An amount of $24,300 of rental income for 1999 has been received
and is recorded as a liability in the financial statements. The sub-rental
income for 1998 amount to $21,683.
4. Legal proceedings:
The Company has been named as a defendant in a breach of contract action,
seeking $21,000 plus punitive damages. The Company has answered the compliant
and made cross-claims against the plaintiff. The action has not proceeded
further with respect to the Company. The Company has not accrued any amounts
in its financial statements at December 31, 1998, relating to the action.
7
<PAGE>
NETSTAFF, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
4. Legal proceedings: (continued)
The Company was a defendant in a trademark action, which was settled in August
1998. As part of the settlement agreement, inter alia, the Company will issue
a promissory note in the principal amount of $10,000, and will be declared the
owner of all right, title and interest in the trademark "NetStaff". With
respect to its financial statements at December 31, 1998 the Company has not
accrued any amount respecting this promissory note.
5. Acquiring outside financing:
The Company is actively engaged in negotiations to obtain additional financing
of its activities and expects to conclude an agreement on such financing
shortly.
6. Long-term debt:
The Company is obligated under various notes payable for $161,000 at various
interest rates of between 6% and 10%. These notes all are due January 1, 2003.
Interest has been accrued through December 31, 1998. The notes may be
convertible into securities of the Company in the event of a qualifying
financing (an equity investment in the Company, excluding convertible notes,
warrants, options or other instruments convertible into equity, of at least
$500,000) at a price equal to sixty percent (60%) of the purchase price paid
by other investors in the qualifying financing.
7. Software development cost:
The Company has capitalized software development costs totaling $196,000. The
Company will start to depreciate these costs once operation have commenced.
8
<PAGE>
NETSTAFF, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
8. Stockholders' equity:
The components of stockholders' equity are as follows:
Preferred stock, Series A, consists of 7-1/2% non-cumulative preferred stock
of $.001 par value with a liquidation value at $1.00. There are 35,000 shares
authorized issued and outstanding.
The Series A preferred shares are convertible into common stock, par value
$0.001 per share, of the Company at a ratio of 1:1.
The Series A, preferred shareholders are entitled to one vote for each share
of common stock into which such Series A preferred stock could be converted.
9
<PAGE>
NETSTAFF, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM JANUARY 1, 1999 TO JUNE 30, 1999
<TABLE>
<CAPTION>
<S> <C>
Income
Rent Income from Sub-lease $ 14,190
--------
Total Income 14,190
--------
Expenses:
Professional fees 18,866
Consulting/Advisors 12,500
Office and other expenses 3,742
Equipment and related 1,510
Communications 6,440
Facilities 14,393
--------
Total Expense 57,451
--------
Loss before other income and expenses (43,261)
Interest Expense 1,046
--------
Net loss $(44,307)
========
</TABLE>
<PAGE>
NETSTAFF, INC.
(A Development Stage Company)
BALANCE SHEET
JUNE 30, 1999
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current assets:
Cash $ (458)
Prepaid Expenses 9,000
--------
Total Current Assets 8,542
--------
Fixed assets (at cost):
Fixed Assets 187,629
Trademarks, net of amortization 5,851
--------
Total assets $202,022
========
LIABILITIES & EQUITY
Current liabilities
Trade payables $182,298
Accruals 8,700
Other liabilities 24,300
--------
Total current liabilities 215,298
--------
Long term liabilities
Notes payable 178,668
--------
Total long term liabilities 178,668
--------
Total liabilities 393,966
--------
Shareholders' equity (deficiency):
Preferred stock $.001 par value,
5,000,000 shares authorized:
Series A 35,000 shares issued and
outstanding 35,000
Common stock, $.001 par value,
authorized 15,000,000 shares,
1,449,745 issued and outstanding 1,449
Additional paid-in-capital -
common stock 558,807
Retained Earnings (742,892)
Net Income (44,307)
Total Equity (191,943)
--------
Total liabilities & shareholders'
equity $202,023
========
</TABLE>
<PAGE>
NETSTAFF, INC.
PROFORMA CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
The following unaudited proforma condensed balance sheet at December 31, 1998
and the unaudited proforma condensed statement of operations for the year ended
December 31, 1998 are presented to reflect the effects of the agreement between
MAS Acquisition VIII Corp. ("MAS") and NetStaff, Inc. ("NTSF") on September 15,
1999 whereby:
(A) NTSF agreed to merge into MAS, with MAS as the surviving company.
(B) MAS affected an 11 for 1 forward split of its outstanding shares.
(C) MAS accepted the return and cancelled 88,722,800 shares of its common stock.
(D) A total of 1,669,505 shares of NTSF were converted into 8,505,000 shares
of MAS.
(E) MAS is to change its name to NetStaff, Inc.
The proforma financial statements include the statements of NTSF as of December
31, 1998 and for the year then ended and the statements of MAS as of March 31,
1999 and for the year then ended.
The unaudited proforma condensed balance sheet assumes all of the above
transactions occurred as of December 31, 1998. The unaudited proforma
condensed statement of operations assumes all of the above transactions had
occurred January 1, 1998.
These proforma condensed financial statements should be read in conjunction with
its notes to proforma unaudited condensed financial statements, and the
financial statements of MAS and NTFS and the related notes thereto. The
proforma information should be read in conjunction with the other financial
information included in the Form 8K.
The proforma condensed financial statements are not necessarily indicative of
what the actual financial position and results of operations would have been had
the transactions occurred on January 1, 1998 nor does it purport to represent
the future financial position or future operations of NTSF.
<PAGE>
NETSTAFF, INC.
NOTES TO PROFORMA CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1998
(A) To record the conversion of preferred stock of NTSF into common shares
at 1 to 1.
(B) To record the conversion of MAS shares outstanding pursuant to a 11 for 1
forward split and the subsequent cancellation of shares:
Shares: Outstanding prior to forward split 8,519,800
-----------
Shares converted at 11 to 1 93,717,800
Shares cancelled 88,722,800
-----------
Remaining outstanding shares 4,995,000
===========
Par value $ 4,995
Previously recorded 111
-----------
$ 4,884
===========
(C) To record conversion of notes payable of $161,000 into 134,167 common
shares of NTSF.
(D) To record issuance of 50,593 shares of common stock of NTSF issued in April
1999 to June 1999 for services and cash.
(E) To record conversion of 1,669,505 NTSF common shares into 8,505,000 common
shares of MAS.
Common shares received 8,505,000
Common shares converted (1,669,505)
-----------
6,835,495
Par value $ 6,835
==========
<PAGE>
NETSTAFF, INC.
PROFORMA CONDENSED BALANCE SHEET
(UNAUDITED)
December 31, 1998
<TABLE>
<CAPTION>
MAS ACQUISITION NETSTAFF, INC. PROFORMA TOTAL
VIII CORP ADJUSTMENTS
--------------- ---------------- ----------- ----------
<S> <C> <C> <C> <C>
ASSETS
Cash and cash $ - $ 330 D $ 35,000 $ 35,330
equivalents
Prepaid expenses - 9,000 - 9,000
Property and - 187,629 - 187,629
equipment, net
Intangible 45 5,850 - 5,850
assets,net of
amortization
----------- ----------- ---------- ----------
$ 45 $ 202,809 $ 35,000 $ 237,854
=========== =========== ========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts payable $ - $ 189,445 $ - $ 189,445
and other
liabilities
Notes payable - 161,000 C (161,000) -
----------- ----------- ---------- ----------
- 350,445 (161,000) 189,445
Stockholders' equity
Preferred stock - 35,000 A (35,000) -
B
Common Stock 111 1,449 A 35 13,499
B 4,884
C 134
D 51
E 6,835
Additional 558,807 A 34,965 817,868
paid-in capital B (4,884)
C 160,866
D 74,949
E (6,835)
Defict accumulated (66) (742,892) D (40,000) (782,958)
during development
stage
----------- ----------- ---------- ----------
45 (147,636) 196,000 48,409
----------- ----------- ---------- ----------
$ 45 $ 202,809 $ 35,000 $ 237,854
=========== =========== ========== ==========
</TABLE>
<PAGE>
NETSTAFF, INC.
PROFORMA CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
MAS ACQUISITION NETSTAFF, INC. PROFORMA
VIII CORP ADJUSTMENTS TOTAL
(March 31, 1999)
---------------- ------------- ----------- ----------
<S> <C> <C> <C> <C>
Revenues $ - $ 10,600 - $ 10,600
Sublet income - 21,683 - 21,683
----------- ---------- -------- ----------
- 32,283 - 32,283
General and 30 261,271 D 40,000 301,301
administrative
expenses
----------- ---------- -------- ----------
Net loss $ (30) $ (228,988) $(40,000) $ (269,018)
=========== ========== ======== ==========
Net loss per share (0.00) - - (0.02)
Weighted average 8,514,025 - - 13,500,000
shares ----------- ---------- -------- ----------
outstanding
</TABLE>
<PAGE>
(b) Exhibits
<TABLE>
<CAPTION>
Exhibit Number Description
<S> <C>
2.0 Stock Exchange Agreement
3.0 Articles of Amendment
3.1 Articles of Merger
99.0 Consent of Independent Auditors
<PAGE>
Date: October 4, 1999
NetStaff, Inc.
By: /s/ Patrick Rylee
--------------------------------
Patrick Rylee, President, CEO
and Director
<PAGE>
EXHIBIT 2.0
STOCK EXCHANGE AGREEMENT
THIS AGREEMENT is made this 15 day of September, 1999, by and between
MAS Acquisition VIII Corp., a Indiana corporation ("MAS") and NetStaff, Inc., a
Delaware corporation ("NETS").
RECITALS
WHEREAS, MAS and NETS propose to merge pursuant to this Agreement,
which provides for the exchange and conversion of all the outstanding capital
stock of NETS into shares of MAS and the merger of NETS with and into MAS
with MAS as the surviving corporation, pursuant to the applicable laws of
Delaware and Indiana;
NOW, THEREFORE, in consideration of the foregoing and in reliance
on the representations, warranties, agreements, 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. NETS shall assign,
transfer and convey unto MAS, and MAS shall acquire all of the NETS Shares in a
tax free reorganization. Pursuant to this plan of merger and stock exchange
agreement hereinafter agreed upon between the parties, NETS shall be merged
with and into MAS and the separate corporate existence of NETS shall thereupon
cease to exist, pursuant to Articles of Merger meeting the requirements of
Section 252 of the Delaware General Corporation Law, as amended, and the
applicable Indiana corporate law, as appropriate, which shall be properly
executed and filed promptly after the Closing Date. MAS shall be the
surviving corporation in the merger. The Articles of Merger shall provide
for a change of MAS' name to "NetStaff, Inc." or such other name as the
parties may determine. In addition, the parties shall name Patrick Rylee as
CEO and President of the surviving corporation. The parties agree that the
Board of Directors of the surviving corporation, immediately after the
Closing shall be a maximum of four (4) directors and that of those directors,
the now existing shareholders of NETS shall have the right to elect two (2)
directors and MAS shall have the right to elect two (2).
Section 1.2 PURCHASE PRICE. The aggregate purchase price for the NETS
Shares (the "Purchase Price") shall be 8,505,000 MAS Shares.
At the Closing, there shall be 1,669,505 shares of the common stock of NETS
issued and outstanding and 13,500,000 shares of the common stock of MAS issued
and outstanding. At the Closing, the issued and outstanding shares of the
common stock of NETS shall be converted into and exchanged for 8,505,000 shares
of common stock of MAS so that each issued and outstanding share of NETS shall
be converted into 5.0943 shares of MAS' common stock. The shares of common
stock to be issued to holders of NETS common stock shall be restricted shares
within
<PAGE>
the meaning of the Securities and Exchange Commission Rule 144 promulgated
under the Securities Act of 1933, as amended (the "Act"), and, accordingly,
the certificate or certificates representing such shares shall bear a
restrictive legend in accordance with the requirements of Rule 144.
Section 1.3 CLOSING. The closing of the transaction contemplated in
this Agreement (the "Closing") shall take place at the offices of MAS, 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, NETS shall deliver to MAS certificates
representing 1,669,505 shares of NETS, duly endorsed for transfer.
(b) At the Closing, MAS shall deliver to NETS MAS' certificate
or certificates for shares of MAS' common stock issued in the names of NETS
shareholders individually, allocated in proportion to their respective holdings
NETS Shares, calculated as set forth hereinabove, and bearing an appropriate
legend restricting transfer except as permitted under Rule 144 of the
Securities and Exchange Commission, promulgated under the Securities Act of
1933, as amended.
(c) From time to time and at any time, at MAS' request,
whether on or after the Closing Date, and without further consideration, NETS
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 NETS Shares, free and clear of any
lien or adverse claim.
(d) From time to time and at any time, at NETS' 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 NETS, to transfer and convey to NETS, 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' ACCESS AND INSPECTION. NETS has allowed and shall
allow MAS and its authorized representatives full access during NETS' normal
business hours from and after the date hereof and prior to the Closing Date to
all of NETS' properties, books, contracts, commitments and records for the
purpose of making such investigation as MAS may desire, and NETS shall
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furnish MAS such information concerning NETS' affairs as MAS may
request. NETS has caused and shall cause NETS' personnel to assist MAS in
making such investigation and shall cause the counsel, accountants, engineers
and other non-employee representatives of NETS to be reasonably available to
MAS for such purposes.
Section 2.2 NETS' ACCESS AND INSPECTION. MAS shall allow NETS and its
authorized representatives access during MAS' normal business hours from and
after the date hereof and prior to the Closing Date to such of MAS' properties,
books, contracts, commitments and records as NETS may reasonably request for the
purpose of determining the financial condition of MAS. MAS shall cause
MAS' personnel to assist NETS in making such investigation and shall cause
the counsel, accountants, engineers and other non-employee representatives of
MAS to be reasonably available to NETS 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 NETS 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 NETS.
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 or finder claiming to have been employed by or on behalf of such party.
Section 2.6 REGISTRATION RIGHTS..
(a) If MAS shall determine to register any of its securities for
the account of a securityholder or holders other than in a registration
relating solely to employee benefit plans, a registration relating solely to a
Rule 145
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transaction, or a registration on any registration form that does not permit
secondary sales, MAS will (i) promptly give to each person who is a holder of
its common stock at the effective date notice and (ii) use its best efforts to
include in such registration (and any related qualification under blue sky laws
or other compliance), and in any underwriting involved therein, all the
Registerable Securities of such securityholder as requested, such request to be
made in writing and received by MAS within twenty (20) days after MAS delivers
its notice of the proposed registration. Such request may specify all or part
of the holder's Registerable Securities. As used herein, the term
"Registerable Securities" means shares of MAS's common stock issued or issuable
to a holder as of the Closing and any common stock issued as a dividend or
other distribution with respect to or in exchange for or in replacement of the
shares referenced in this section, except that Registerable Securities shall
not include any shares of common stock previously registered or which have been
sold to the public pursuant to a registration statement or an offering under
Section 3(b) of the Act, or which may be sold under Rule 144(k).
(b) At the time of the registration, MAS and a registering
securities holder shall enter into mutual indemnification agreements of the
kind normally provided in an underwriting.
(c) If any securities held by selling shareholders cannot be
included in a registration as a result of limitations of the aggregate number
of shares of Registerable Securities that may be so included, the number of
shares of Registerable Securities that may be included shall be allocated
among the holders requesting inclusion of shares pro rata on the basis of the
number of shares of Registerable Securities, provided that such allocation
shall not operate to reduce the aggregate number of Registerable Securities
that may be included in such registration if any holder does not request
inclusion of the maximum number of shares of Registerable Securities allocated
to him pursuant to the procedure described in this section, and the remaining
portion of his allocation shall be reallocated among those requesting holders
whose allocation did not satisfy the request pro rata on the basis of the
number of shares of Registerable Securities which will be held by such holders
and selling shareholders.
(d) Notwithstanding the obligations of MAS to register shares, MAS
shall have no such obligation to any shareholder in the event that it is
advised by its underwriter or other selling agent that the underwriter is
not willing to register shares held by any proposed selling shareholder by
reason of market conditions or any other reason relating to the primary
obligation of such underwriter or agent to sell the shares of MAS, its being
the intention of the parties that MAS's ability to sell all of the shares that
it wishes to sell pursuant to any registration statement shall be paramount to,
and shall supersede, the rights of any shareholder provided in this Section
2.6.
3. REPRESENTATIONS AND WARRANTIES OF NETS.
NETS represents, covenants and warrants to MAS as follows:
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Section 3.1 CORPORATE EXISTENCE/STANDING/AUTHORITY. NETS is a
corporation duly organized, validly existing and in good standing under the
laws of Delaware 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. NETS 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. NETS has delivered to MAS or its counsel true
and correct copies of the articles of incorporation and by-laws of NETS,
together with any amendments thereto.
Section 3.2 SHARES OF STOCK. All issued and outstanding shares of capital
stock of NETS have been duly authorized and validly issued and are fully paid
and nonassessable. NETS has twenty (20) million shares of stock authorized,
fifteen (15) million of which is designated as common stock, par value $0.001
per share, and five (5) million of which is designated as preferred stock, par
value $0.001 per share, out of which 35,000 shares were been designated and
issued as Series A Preferred Stock, par value $0.001 per share. The Series A
Preferred Stock has been converted into shares of common stock. Thus, there
are presently 1,669,505 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 NETS 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. NETS 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
NETS 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 NETS. 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 NETS, (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 NETS' 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 NETS
is a party, or by which NETS or its properties may be bound or affected or
(3) violate any order, writ, injunction, decree, judgment,
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or ruling of any court or governmental authority specifically applicable to
NETS or any of its properties.
Section 3.4 NO VIOLATION. To the best knowledge of NETS, NETS 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, the failure to
comply with which could reasonably be expected to affect materially and
adversely, the business operations of NETS. Except as set forth on Schedule
3.4, NETS has not received any notice of any such default or violation.
Section 3.5 LICENSES AND RIGHTS. NETS 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 NETS for the authorization of this Agreement or the consummation
by NETS of the transactions contemplated hereby.
Section 3.7 NO DEFAULTS. Except as referred to in this Section, to the
best knowledge of NETS, 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 NETS
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 referred to in Section 3.17, to which NETS 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 which could
reasonably be expected to affect, materially and adversely, the business
operations of NETS.
Section 3.8 FINANCIAL STATEMENTS. MAS has been furnished
with audited financial statements of NETS for the period ended December 31,
1998 and unaudited statements for the period January 1, 1999 - June 30, 1999
(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, NETS 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
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operations, assets, liabilities, properties, business or prospects of NETS 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 NETS.
Section 3.10 FACILITIES AND EQUIPMENT. The personal property owned or
leased by NETS 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, NETS 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, NETS 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. NETS 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 which could reasonably be expected to affect,
materially and adversely, the business operations of NETS.
Section 3.13 LITIGATION. Schedule 3.13 hereof sets forth a list of all
administrative or judicial proceedings to which NETS 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 NETS, threatened against or relating to NETS which, if adversely determined
or resolved, would materially and adversely affect the financial condition,
results of operations, business or prospects of NETS.
Section 3.14 PATENTS AND TRADEMARKS.
(a) Except as set forth on Schedule 3.14(a), NETS 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 NETS are listed on Schedule 3.14
hereof and, to the extent indicated therein, have been duly registered with the
states of
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the United States or the corresponding offices of other countries. Except as set
forth on Schedule 3.14, NETS 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, NETS 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 NETS in respect thereof.
Section 3.15 EMPLOYEE BENEFITS.
(a) All of the employee benefit plans maintained by NETS (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.
Section 3.16 TAXES AND TAX RETURNS. As of the Closing, NETS will have
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. NETS 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
NETS with respect to any period ending on or before the Closing Date for which
NETS has not made adequate provisions.
Section 3.17 CONTRACTS. NETS has heretofore furnished to MAS or its
counsel true and complete copies of all contracts and agreements and NETS has
complied with the obligations pertaining to it contained in such Contracts, is
not in default thereunder and nor will the consummation of the transactions
contemplated by this Agreement result in such a default. All such contracts,
understandings, commitments, arrangements and agreements are in full force and
effect.
Section 3.18 COLLECTIVE BARGAINING AGREEMENTS. There are no collective
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bargaining agreements with any labor organization to which NETS is a party. The
relations of NETS with its employees are good and there are no impending labor
difficulties.
Section 3.19 INSURANCE. NETS has no insurance policies currently in place.
Section 3.20 REAL PROPERTY. Schedule 3.20 hereof sets forth a true and
complete list of the real property leases to which NETS is a party. NETS has
heretofore furnished to MAS or its counsel true and complete copies of such
real estate leases which are in good standing and in full force and effect
for the leased term thereof.
Section 3.21 MATERIAL MISSTATEMENTS OR OMISSIONS. No representations or
warranties made by NETS 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 NETS 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 a reporting company under the Securities Exchange Act of 1934,
as amended and is, duly qualified to do business and is in good standing in
each jurisdiction where the failure to qualify would have a material adverse
effect on it. MAS has delivered to NETS 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 100,000,000 shares of
common stock of which there are presently issued and outstanding 13,500,000
shares of common stock. After the Closing, MAS will have 13,500,000 shares of
common stock issued and outstanding . MAS agrees to acquire all of the issued
and outstanding stock of NETS, or 1,669,505 shares of Common Stock ("NETS
Shares") for 8,505,000 shares of common stock of MAS ("MAS Shares") by
exchanging 5.09432 MAS Share for each NETS 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
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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. By the Closing, the MAS shares to be
issued to NETS and its shareholders on the consummation of the transactions
contemplated hereunder will be exempt from registration under the Act pursuant
to Section 4(2) thereof, and shall have been exempt or registered or qualified
under the applicable state securities or blue sky laws for issuance. Such
shares, when issued in accordance with the terms of this Agreement, will be
fully paid and non-assessable.
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 NETS 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' 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
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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. NETS has been 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 $1,000.
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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) 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.
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
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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 NETS or its
counsel true and complete copies of all contracts and agreements and MAS has
complied with the obligations pertaining to it contained in such Contracts, is
not in default thereunder and nor will the consummation of the transactions
contemplated by this Agreement result in such a default. All such contracts,
understandings, commitments, arrangements and agreements are in full force and
effect.
Section 4.18 COLLECTIVE BARGAINING AGREEMENTS There are no
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 NETS 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 NETS PRIOR TO THE CLOSING. Between
the date of this Agreement and the Closing, the executive officers and board
of directors of NETS shall retain full control of the management and business
thereof. In order to assure protection and preservation of NETS' business as
well as NETS' performance of its obligations under and related to this
Agreement, NETS agrees that from the date of this Agreement up to and
including the Closing;
(a) NETS shall give MAS, its counsel, accountants, appraisers
and other representatives or experts retained by MAS full access on reasonable
prior notice to all the premises and books, records and personnel of NETS
during NETS'normal business hours and cause NETS to furnish to MAS such
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financial and operating data and other information with respect to the business
and properties of NETS 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 NETS or NETS and will
not further disclose to third parties any confidential information obtained by
it pursuant hereto.
(b) NETS shall use all reasonable efforts to (i) preserve intact
the present business organization and personnel of NETS, (ii) preserve the
present goodwill and advantageous relationships of NETS with all persons having
business dealings with NETS, 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 NETS.
(c) NETS shall operate its business in the usual, regular and
ordinary course and manner, and refrain from encumbering or mortgaging any
property or assets or terminating or modifying any lease or incurring any
obligation (contingent or otherwise), except in the ordinary course of business.
(d) NETS 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
NETS 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 the Closing:
Section 6.1 REPRESENTATIONS OF NETS. The representations and
warranties of NETS 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 or as affected by the transactions contemplated by
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
14
<PAGE>
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 NETS. NETS 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 an
officer of NETS 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 NETS, certified by the Secretary of State of Delaware or similar office of
competent jurisdiction, and of the by-laws of NETS, together with all
amendments thereto, certified by the Secretary of NETS;
(c) A certificate of good standing of NETS in the State of California;
(d) Certificates representing 1,669,505 of the NETS Shares, duly
endorsed for transfer as provided for hereinabove.
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
NETS.
Section 6.6 ABSENCE OF DEFAULT. No condition or event which constitutes
an event of default hereunder by NETS or which, after notice and lapse of time,
or both, would constitute an event of default hereunder by NETS shall have
occurred and be continuing.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF NETS
The obligations of NETS under this Agreement are, at its option, subject
to satisfaction of the following conditions at or prior to the Closing:
Section 7.1 REPRESENTATIONS AND WARRANTIES. The representations and
15
<PAGE>
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 expressly provided to
the contrary in this Agreement or 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 NETS. NETS 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) Original certificate of incorporation of MAS, together with
all amendments thereto, and of the by-laws of MAS, together with all amendments
thereto, certified by the Secretary of MAS;
(c) True and correct copies of Minutes of the Board of
Directors, certified by the Secretary of MAS, authorizing the officers and the
Company to consummate the transaction;
(d) Certificates representing 8,505,000 MAS Shares as provided
for hereinabove with appropriate restrictive legends in accordance with Rule
144 to be received from the transfer agent delivering such on behalf of MAS.
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.
Section 7.6 ABSENCE OF DEFAULT. No condition or event which constitutes
an event of default hereunder by NETS or which, after notice and lapse of time,
or both, would constitute an event of default hereunder by NETS shall have
occurred and be continuing.
16
<PAGE>
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 NETS or MAS, unless otherwise
specifically noted herein, the representations and warranties of NETS 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. Thereafter, neither party shall have
any liability to the other based upon any of the representations or warranties
or any certificate, schedule, chart, list, letter, compilation or other
document delivered pursuant hereto.
Section 8.2 NETS' INDEMNIFICATION. NETS 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 indirectly 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 NETS made in or pursuant to this Agreement.
Section 8.3 MAS' INDEMNIFICATION. MAS covenants and agrees to
indemnify and save harmless NETS and its directors, officers, employees and
agents from any and all costs, expenses, losses, damages and liabilities
incurred or suffered directly or indirectly 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
17
<PAGE>
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.
SECTION 8.5 LIMITATIONS ON INDEMNIFICATION. Indemnification shall only be
due to the extent of the loss or damage actually suffered (i.e., reduced by
any offsetting or related asset or service received and by any recovery from
any third party, such as an insurer), net after the amount equal to any
reduction in federal, state or local income, franchise or other taxes
occasioned by such loss or damage (even though the tax return by which such
reduction would have been realized is not yet due), but including an amount
equal to any increase in federal, state and local income, franchise or other
taxes occasioned in the indemnification payment and then only to the extent
of the excess over the Agreed De Minimis Amount (hereinafter defined). The
Indemnitor shall be subrogated to all rights of the Indemnified Party for
any individual misrepresentation, breach of warranty or violation of covenant
where the otherwise indemnifiable amount does not exceed $10,000 and, as
regards all such indemnifiable misrepresentations or breaches of warranty
that do not exceed $10,000, the Indemnitor shall not be liable except to
the extent that the aggregate amount thereof exceeds $10,000 (such sum being
referred to as the "Agreed De Minimis Amount").
9. 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 NETS and their respective
successors and permitted assigns.
10. 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 mutual
termination or
18
<PAGE>
abandonment.
11. NOTICES
All notices, requests, demands and other communications hereunder shall be
in writing and shall, be deemed to have been duly given when personally
delivered, transmitted by facsimile machine, or sent by overnight courier
service, 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 VIII Corp.
1710 East Division Street
Evansville, Indiana 47711
To NETS: Mr. Patrick Rylee
NetStaff, Inc.
168 South Park Street
San Francisco, California 94107
Notice shall be deemed to be given as of the date of actual receipt of the
communication by the recipient.
12. CERTAIN BREACHES. Neither party shall have any liability to the
other party with respect to a breach by a party of which the other party
has received written notice at or prior to the Closing.
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 NETS 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 and by
facscimile, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
19
<PAGE>
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. Whenever
the context so requires, words used in the singular shall be construed to mean
or include the plural and vice versa, and pronouns of any gender shall be
construed to mean or include any other gender or genders.
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. THIRD PARTIES
Nothing in this Agreement, whether expressed or implied, is intended to (I)
confer any rights or remedies on any person other than the parties and their
respective successors and assigns, (II) relieve or discharge the obligation
or liability of any third party, or (iii) give any third party any right of
subrogation or action against any party hereto.
20
<PAGE>
19. APPLICABLE LAW
This Agreement shall be governed and construed in accordance with the laws
of the State of Delaware.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
MAS Acquisition VIII Corp.
By /s/ Aaron Tsai
-----------------------------------------
Aaron Tsai, President
NetStaff, Inc.
By /s/ Patrick Rylee
-----------------------------------------
Patrick Rylee, President
21
<PAGE>
SCHEDULE 3.4
None.
<PAGE>
SCHEDULE 3.5
NETS is incorporated in the State of Delaware.
NETS is qualified to do business in the State of California.
NETS is licensed by the City and County of San Francisco.
<PAGE>
SCHEDULE 3.6
Section 252 of the Delaware General Corporate Law, as amended, governs
the procedure for consents and notifications regarding mergers for Delaware
corporations such as NETS.
The Board of Directors has approved the agreement.
The NETS offices lease states that the landlord has the right to approve
any assumption or assignment of the lease, which shall not be unreasonably
withheld.
<PAGE>
SCHEDULE 3.9
NETS requires financing to continue its business operations and
to expand its business model.
<PAGE>
SCHEDULE 3.11
NETS has no liens against it or against any of its property.
NETS has no UCC filings on it.
<PAGE>
SCHEDULE 3.13
1. NETS has recently settled two related matters arising from its federal
registration of the service mark "NETSTAFF": a Massachusetts federal
district court action entitled Network Support Technologies, Inc. v.
NetStaff, Inc., Case Number 98-11209 (NG); and a proceeding in the United
States Patent and Trademark Office. Counsel are preparing a formal written
settlement agreement. Pursuant to the settlement, among other things, the
matters will be dismissed with prejudice and NETS retains all right, title
and interest in the mark.
2. NETS is a defendant in a breach of contract action seeking $21,000 in
damages entitled J. Boragine & Associates v. NetStaff, Inc., et al., Civil
Case Number No. 992516, filed in the Superior Court of the State of
California, City and County of San Francisco. After NETS served an answer
and cross claims against plaintiff, plaintiff has not proceeded against NETS.
<PAGE>
SCHEDULE 3.14(a)
NETS has registered the service mark "NETSTAFF" with the United States Patent
and Trademark Office.
NETS uses the trade name NetStaff.
NETS owns the following domain names:
netstaff.com
netstaff.org
staffworld.com
millenniumstaffing.com
See Schedules 3.13 and 3.14(b) regarding litigation concerning the service
mark "NETSTAFF," which litigation has been settled and a dormant claim
regarding a domain name.
<PAGE>
SCHEDULE 3.14(b)
Trademark litigation. On June 19, 1998, Network Support Technologies, Inc.
("NST") brought an action in the federal district court in Boston,
Massachusetts, entitled Network Support Technologies, Inc. v. NetStaff, Inc.,
Case Number 98-11209 (NG), alleging unfair and deceptive trade practices,
trademark infringement, and false designation of origin. In the action,
NST sought a permanent injunction enjoining NETS's use of the mark "NETSTAFF,"
cancellation of its United States registration of the mark, and attorneys'
fees and damages pursuant to Massachusetts state law.
On January 25, 1999, NST instituted a proceeding before the Trademark Trial
and Appeal Board ("T.T.A.B.") in the United States Patent and Trademark Office
seeking to cancel NETS's registration of the mark.
On or about August 3, 1999, the parties reached an agreement to settle the
above matters. Counsel for the Company is currently preparing a formal
settlement agreement. Under the terms of the settlement, among other things,
the Company will retain all right title and interest in its registered service
mark.
Claim re Millennium Staffing. NETS has registered the domain name
millenniumstaffing.com. NETS has received a demand by an entity claiming it
has registered the trade mark "Millennium Staffing," and requesting that NETS
not use such as a trade name (a request to which NETS has agreed) and that
NETS relinquish the domain name registration (a request to which NETS has not
agreed). NETS has not heard further from the alleged holder of the trade mark.
<PAGE>
SCHEDULE 3.20
NETS has a 5 year lease for 168 South Park, San Francisco 94107. The lease
is made and executed on May 16, 1997 for a term of 5 years commencing June 1,
1997. The total rent is:
$4,000 per month for the period 11/1/98 - 5/31/99
$4,200 per month for the period 6/1/99 - 5/31/2000
$4,400 per month for the period 6/1/2000 - 5/31/2001
$4,600 per month for the period 6/1/2001 - 5/31/2002
NETS has a right of first refusal to purchase the leased premises within 7
days of notice from the landlord of any intent to sell the leased premises.
NETS is subletting 168 South Park to LookSmart which expires on October 31,
1999.
NETS is leasing 3 offices in 166 South Park, San Francisco 94107. This lease is
for a term of 11 months commencing February 1, 1999 with an option to extend
the lease for up to one year beginning January 1, 2000.
Rent is $600 per month for the first 11 month period and $630 per month for the
second year of the term.
<PAGE>
SCHEDULE 4.5
None.
<PAGE>
SCHEDULE 4.7
None.
<PAGE>
SCHEDULE 4.8
None.
<PAGE>
SCHEDULE 4.9
None.
<PAGE>
SCHEDULE 4.12
None.
<PAGE>
SCHEDULE 4.13
None.
<PAGE>
SCHEDULE 4.14(a)
None.
<PAGE>
SCHEDULE 4.14(b)
None.
<PAGE>
EXHIBIT 3.0
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
ARTICLE OF AMENDMENT
To Whom These Presents Come, Greeting:
WHEREAS, there has been presented to me at this office, Articles of
Amendment for:
MAS ACQUISITION VIII CORP.
and said Articles of Amendment have been prepared and signed in accordance
with the provisions of the Indiana Business Corporation Law, as amended.
NOW, THEREFORE, I, SUE ANNE GILROY, Secretary of State of Indiana, hereby
certify that I have this day filed said articles in this office.
The effective date of these Articles of Amendment is September 01, 1999.
[ LOGO ] In Witness Whereof, I have hereunto set my
hand and affixed the seal of the State of
[Seal of the ] Indiana, at the City of Indianapolis, this
[State of Indiana] First day of September, 1999,
[1816 ]
/s/ Sue Anne Gilroy
SUE ANNE GILROY, Secretary of State
/s/ TC
------
Deputy
<PAGE>
[ LOGO ] ARTICLES OF AMENDMENT OF THE SUE ANNE GILROY
[ State of ] ARTICLES OF INCORPORATION SECRETARY OF STATE
[ Indiana ] State Form 38333 (R8 / 12-96) CORPORATIONS DIVISION
Approved by State Board of Accounts 1995 302 W. Washington St. Rm. E018
Indianapolis, IN 46204
Telephone: (317) 232-6576
INSTRUCTIONS: Use 8 1/2" x 11' white Indiana Code 23-1-38-1 et seq.
paper for inserts.
Present original and two copies to address in upper right
hand corner of this
Please TYPE or PRINT Filing Fee: $30.00
- --------------------------------------------------------------------------
ARTICLES OF AMENDMENT OF THE
ARTICLES OF INCORPORATION OF:
- --------------------------------------------------------------------------
Name of Corporation Date of incorporation
MAS Acquisition VIII Corp. October 7, 1996
- --------------------------------------------------------------------------
The undersigned officers of the above referenced Corporation (hereinafter
referred to as the "Corporation") existing pursuant to the provisions of:
(indicate appropriate act)
[ x ] Indiana Business Corporation Law [ ] Indiana Professional
Corporation Act of 1983
as amended (hereinafter referred to as the "Act"), desiring to give notice
of corporate action effectuating amendment of certain provisions of its
Articles of Incorporation, certify the following facts:
- --------------------------------------------------------------------------
ARTICLE I Amendment(s)
- --------------------------------------------------------------------------
The exact text of Article(s) ______________III__________________ of the
Articles
(NOTE. If amending the name of corporation, write Article "I" in
space above and write "The name of the Corporation is
________________________," below)
Number of shares the Corporation is authorized to issue:
20 million Preferred shares, par value $0.001
100 million Common shares, par value $0.001
- --------------------------------------------------------------------------
ARTICLE II
- --------------------------------------------------------------------------
Date of each amendments adoption:
September 1, 1999
- --------------------------------------------------------------------------
(Continued on the reverse side)
<PAGE>
- --------------------------------------------------------------------------
ARTICLE III Manner of Adoption and Vote
- --------------------------------------------------------------------------
Mark applicable section: NOTE - Only in limited situations does Indiana
law permit an Amendment without shareholder approval. Because a name change
requires shareholder approval, Section 2 must be marked and either A or B
completed.
- --------------------------------------------------------------------------
[ ] SECTION 1 This amendment was adopted by the Board of Directors or
incorporators and shareholder action was not required.
- --------------------------------------------------------------------------
[ x ] SECTION 2 The shareholders of the Corporation entitled to vote in
respect to the amendment adopted the proposed amendment. The
amendment was adopted by: (Shareholder approval may be by either
A or B.)
A. Vote of such shareholders during a meeting called by the Board of
Directors. The result of such vote is as follows:
---------------------------------------------------------
8,519,800 Shares entitled to vote.
---------------------------------------------------------
8,250,000 Number of shares represented at the meeting.
---------------------------------------------------------
8,250,000 Shares voted in favor.
---------------------------------------------------------
0 Shares voted against.
---------------------------------------------------------
B. Unanimous written consent executed on _________, 19___
and signed by all shareholders entitled to vote
- --------------------------------------------------------------------------
ARTICLE IV Compliance with Legal Requirements
- --------------------------------------------------------------------------
The manner of the adoption of the Articles of Amendment and the vote by
which they were adopted constitute full legal compliance with the
provisions of the Act, the Articles of Incorporation, and the By-Laws of
the Corporation.
- --------------------------------------------------------------------------
I hereby verify, subject to the penalties of perjury, that the statements
contained herein are true, this 31th day of August, 1999.
- --------------------------------------------------------------------------
Signature of current officer Printed name of officer
or chairman of the board or chairman of th board
/s/ Aaron Tsai Aaron Tsai
- --------------------------------------------------------------------------
Signature's title
President
- --------------------------------------------------------------------------
<PAGE>
EXHIBIT 3.1
[ LOGO ] ARTICLES OF MERGER SUE ANNE GILROY
[ State of ] State Form 39036 (R5 / 2-97) SECRETARY OF STATE
[ Indiana ] Approved by State Board CORPORATIONS DIVISION
of Accountants, 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
NetStaff, Inc., a Delaware corporation
----------------------------------------------------------------------
(Hereinafter "the nonsurviving corporation(s)")
- --------------------------------------------------------------------------
INTO
MAS Acquisition VIII Corp., an Indiana corporation
----------------------------------------------------------------------
(Hereinafter "the surviving corporation")
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
ARTICLE I - SURVIVING CORPORATION
- --------------------------------------------------------------------------
SECTION 1:
The name of the Corporation surviving the merger is: NetStaff, Inc.
and such name X has _ has not (designate which) been changed as a
result of the merger.
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 II - NONSURVIVING CORPORATION (S)
- --------------------------------------------------------------------------
The name, state of incorporation, and date of incorporation or qualification
(if applicable) respectively, of each Indiana domestic corporation and
Indiana qualified foreign corporation, other than the survivor, which is
party to the merger are as follows:
- --------------------------------------------------------------------------
Name of Corporation NetStaff, Inc.
- --------------------------------------------------------------------------
State of Domicile Delaware Date of Incorporation or qualification
in Indiana (if applicable)
June 21, 1996 (Delaware)
- --------------------------------------------------------------------------
Name of Corporation
- --------------------------------------------------------------------------
State of Domicile Date of Incorporation or qualification
in Indiana (if applicable)
- --------------------------------------------------------------------------
Name of Corporation
- --------------------------------------------------------------------------
State of Domicile Date of Incorporation or qualification
in Indiana (if applicable)
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------
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 (Select either A or B)
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:
A. Unanimous written consent executed on _________ 19 __ and signed by
all shareholders entitled to vote.
B. Vote of shareholders during a meeting called by the Board of Directors.
- --------------------------------------------------------------------------
TOTAL A B C
DESIGNATION OF EACH VOTING GROUP (i.e. preferred and common) Common
- --------------------------------------------------------------------------
NUMBER OF OUTSTANDING SHARES 13,500,000
- --------------------------------------------------------------------------
NUMBER OF VOTES ENTITLED TO BE CAST 13,500,000
- --------------------------------------------------------------------------
NUMBER OF VOTES REPRESENTED AT MEETING 10,532,200
- --------------------------------------------------------------------------
SHARES VOTED IN FAVOR 10,532,200
- --------------------------------------------------------------------------
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 (Select either A or B)
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:
A. Unanimous written consent executed on _________ 19 __ and signed by
all shareholders entitled to vote.
B. Vote of shareholders during a meeting called by the Board of Directors.
- --------------------------------------------------------------------------
TOTAL A B C
DESIGNATION OF EACH VOTING GROUP (i.e. preferred and common) Common
- --------------------------------------------------------------------------
NUMBER OF OUTSTANDING SHARES 1,669,505
- --------------------------------------------------------------------------
NUMBER OF VOTES ENTITLED TO BE CAST 1,669,505
- --------------------------------------------------------------------------
NUMBER OF VOTES REPRESENTED AT MEETING 1,632,268
- --------------------------------------------------------------------------
SHARES VOTED IN FAVOR 1,632,268
- --------------------------------------------------------------------------
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 penalties of perjury that the
statements contained herein are true, this 16th day of September, 1999.
- --------------------------------------------------------------------------
Signature Printed name
/s/ Patrick Rylee Patrick Rylee
- --------------------------------------------------------------------------
<PAGE>
EXHIBIT 99.0
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to use in the Form 8K of our report dated May 27, 1999
relating to the statements of Netstaff, Inc. and to the reference to our
Firm under the caption "Experts" in the Form 8K.
/s/ Arthur Yorkes & Company
New York, New York
September 17, 1999
</TABLE>
