<PAGE>
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 13, 1999
LoanRates Online.com, Inc.
(Exact name of Registrant as specified in charter)
Indiana 0-27155 35-2082961
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
11350 Random Hills Road, Suite 800, Fairfax, Virginia 22030
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (703) 934-6111
MAS Acquisition XIII Corp.
1710 E. Division St.
Evansville, Indiana 47711
(Former name or former address, if changed, since last report)
<PAGE>
ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
A change in control of the registrant occurred on December 13, 1999
pursuant to the terms and conditions of a Plan and Agreement of
Reorganization (the "Agreement") dated December 13, 1999 between MAS
Acquisition XIII Corp., an Indiana corporation ("MAS") and LoanRates
Online, Inc., a Virginia corporation ("LoanRates"), which provided for the
acquisition from all of the shareholders of LoanRates all of the issued and
outstanding shares of LoanRates in return for 8,627,000 shares of the
authorized but unissued shares of MAS. LoanRates then became and operates
as a wholly owned subsidiary of MAS.
The Plan or Reorganization is within the meaning of Section 368 (a)(1)(b)
of the Internal Revenue Code of 1986, as amended.
LoanRates Online, Inc. ("LoanRates") was incorporated in the state of
Virginia in March 1997. LoanRates is a business to business Internet
service company that was formed to replace paper product data with an
economical end to end online database system for wholesale mortgage lenders
and mortgage brokers/correspondents. LoanRates has developed a system which
enables wholesale mortgage lenders to electronically transmit loan product
data via the Internet and allow registered mortgage brokers/correspondents
to find loan products quickly, lock in rates, and securely register loans
electronically. The system, which is currently operating on the Internet at
wwww.loanratesonline.com, will improve operations for lenders, brokers and
correspondents by reducing cost, time and effort, and increase productivity.
LoanRates automates the process of updating product information from lender
spreadsheets into its proprietary software, then electronically transmits
that data via the Internet. The electronic speed and computer software
accuracy of the system is far more advanced and cost effective than the
current method. With no manual data entry required after the initial set-up,
the system makes available current rates, points, caps, margins, adjustments,
terms and conditions to brokers/correspondents, who may access the data and
electronically register the loan product with the selected lender.
ITEM 2. ACQUISITION AND DISPOSITION OF ASSETS.
MAS entered into the Agreement with LoanRates on December 13, 1999,
whereby MAS has acquired from the shareholders of LoanRates all of the issued
and outstanding shares of LoanRates in return for 8,627,000 shares of the
authorized but not issued shares of MAS. MAS has subsequently changed its
name to LoanRates Online.com, Inc. (the "Company").
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 June 30 to December 31
because of the reorgization. The Company will file 10K-SB for the
fiscal year ended on December 31, 2000.
The Company has authorized and effected a ten for one forward split of
shares of Common Stock on December 13, 1999 for shareholders of the record
prior to the issuance of 8,627,000 shares in connection with the acquisition
of LoanRates.
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 December 13, 1999,
and appointed Frederick T. Dykes as Chief Executive Officer and Chairman of
the Board of Directors and Richard J. Heiston as President, Chief Operations
Officer and Director.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements.
(i) Audited financial statements of LoanRates Online, Inc. for the years
ended December 31, 1997 and 1998, for the nine months ended
September 30, 1999 and for the period from April 3, 1997 (date of
inception) to September 30, 1999.
(ii) Unaudited combined financial statement of MAS Acquisition XIII Corp.
and LoanRates Online, Inc. for the year ended December 31, 1998 and
for the nine months ended September 30, 1999.
<PAGE>
LOANRATES ONLINE, INC.
(A Development Stage Company)
FINANCIAL REPORT
DECEMBER 1997 - SEPTEMBER 1999
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
INDEPENDENT AUDITOR'S REPORT
ON THE FINANCIAL STATEMENTS 1
FINANCIAL STATEMENTS
Balance sheets 2
Statements of operations 3
Statements of stockholders' deficit 4
Statements of cash flows 5
Notes to financial statements 6-8
</TABLE>
<PAGE>
------- 1
HOMES
-------
LOWRY
-------
HORN &
-------
JOHNSON
-------
L T D
A professional corporation * Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
LoanRates Online, Inc.
(A Development Stage Company)
Fairfax, VA
We have audited the accompanying balance sheets of LoanRates Online, Inc. (a
development stage company) as of December 31, 1997, 1998 and September 30,
1999, and the related statements of operations, stockholders' deficit and
cash flows for the periods then ended and for the period from April 3, 1997
(date of inception) to September 30, 1999. These financial statements are
the responsibility of the company's management. Our responsibility is to
express an opinion on these financial statements based on our 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.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of LoanRates Online, Inc. (A
Development Stage Company) as of December 31, 1997, 1998 and September 30,
1999, and the results of its operations and its cash flows for the periods
then ended and for the period from April 13, 1997 (date of inception) to
September 30, 1999, in conformity with generally accepted accounting
principles.
/s/ Homes, Lowry, Horn & Johnson, Ltd.
Homes, Lowry, Horn & Johnson, Ltd.
December 16, 1999
309 Maple Avenue West*Vienna, Virginia 22180-4363*Phone (703) 281-4880
Fax (703) 281-4522
Norman P. Horn*Robert J. Neuland*Richard J. Leonard*Walter C. Burger
Rebecca S. Tiblin*Lynne I. Hoffman*Mark C. Vogel*Roger W. Overton
<PAGE>
LOANRATES ONLINE, INC. 2
(A Development Stage Company)
BALANCE SHEETS
December 31, 1997, 1998 and September 30, 1999
<TABLE>
<CAPTION>
ASSETS 12/31/97 12/31/98 9/30/99
---------- ---------- ----------
<S> <C> <C> <C>
CURRENT ASSETS
Cash $ 1,108 $ 49 $ -
Prepaid expenses - - 9,907
Receivable - - 3,683
Deferred financing fees - - 8,500
---------- ---------- ----------
Total current assets $ 1,108 $ 49 $ 22,090
---------- ---------- ----------
PREPAID EXPENSES $ - $ - $ 7,430
---------- ---------- ----------
PROPERTY AND EQUIPMENT $ 3,222 $ 10,145 $ 10,771
Less accumulated depreciation 615 1,928 4,403
---------- ---------- ----------
$ 2,607 $ 8,217 $ 6,368
---------- ---------- ----------
INTANGIBLE ASSETS
Patents $ - $ 5,500 $ 14,786
Software development costs 12,438 18,312 48,200
---------- ---------- ----------
$ 12,438 $ 23,812 $ 62,986
---------- ---------- ----------
Total assets $ 16,153 $ 32,078 $ 98,874
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Convertible notes payable $ - $ - $ 85,000
Accounts payable 11,875 34,323 135,128
Cash overdraft - - 3,662
Accrued salaries and payroll taxes - - 167,620
Advances from stockholders 40,103 26,937 12,453
---------- ---------- ----------
Total current liabilities $ 51,978 $ 61,260 $ 403,863
---------- ---------- ----------
STOCKHOLDERS' DEFICIT
Common stock $ 1,000 $ 1,000 $ 1,000
Additional paid-in capital - 59,000 59,000
Deficit accumulated during the
development stage (36,825) (89,182) (364,989)
---------- ---------- ----------
Total stockholders' deficit $ (35,825) $ (29,182) $ (304,989)
---------- ---------- ----------
Total liabilities and
stockholders' deficit $ 16,153 $ 32,078 $ 98,874
========== ========== ==========
</TABLE>
See Notes to Financial Statements.
<PAGE>
LOANRATES ONLINE, INC. 3
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the Period From April 3, 1997, Date of Inception, to December 31, 1997,
For the Year Ended December 31, 1998,
For the Nine Months Ended September 30, 1999,
and For the Period From April 3, 1997, Date of Inception,
to September 30, 1999
<TABLE>
<CAPTION>
4/3/97 1/1/98 1/1/99 4/3/97
to to to to
12/31/97 12/31/98 9/30/99 9/30/99
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenue $ - $ - $ - $ -
--------- --------- --------- ---------
Operating Expenses:
Administrative support $ 10,941 $ 11,540 $ - $ 22,481
Commissions - - 31,000 31,000
Depreciation 615 1,313 2,475 4,403
Office expenses 2,129 2,842 805 5,776
Office rent 1,888 2,629 1,475 5,992
Payroll taxes - - 11,620 11,620
Promotion 12,653 1,889 586 15,128
Professional fees - - 10,800 10,800
Printing and reproduction 1,169 871 16 2,056
Salaries - - 156,000 156,000
Software development
and maintenance 1,073 23,468 18,256 42,797
Telephone 1,316 1,482 755 3,553
Travel 4,041 521 2,554 7,116
Website hosting 1,000 5,802 2,065 8,867
--------- --------- --------- ---------
Total operating expense $ 36,825 $ 52,357 $ 238,407 $ 327,589
--------- --------- --------- ---------
Financing expenses:
Financing fees $ - $ - $ 34,000 $ 34,000
Interest expense - - 3,400 3,400
--------- --------- --------- ---------
$ - $ - $ 37,400 $ 37,400
--------- --------- --------- ---------
Net loss $ 36,825 $ 52,357 $ 275,807 $ 364,989
========= ========= ========= =========
</TABLE>
See notes to Financial Statements.
<PAGE>
LOANRATES ONLINE, INC. 4
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' DEFICIT
For the Period From April 3, 1997, Date of Inception, to December 31, 1997,
For the Year Ended December 31, 1998
and For the Nine Months Ended September 30,1999
<TABLE>
<CAPTION>
Additional
Common Paid-in Accumulated
Stock Capital Deficit Total
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Balance, at inception,
April 3, 1997 $ - $ - $ - $ -
Issuance of stock 1,000 - - 1,000
Net loss - - (36,825) (36,825)
--------- --------- --------- ---------
Balance on December 31, 1997 $ 1,000 $ - $ (36,825) $ (35,825)
Conversion of stockholders'
advances to contributed
capital - 59,000 - 59,000
Net loss - - (52,357) (52,357)
--------- --------- --------- ---------
Balance on December 31, 1998 $ 1,000 $ 59,000 $ (89,182) $ (29,182)
Net loss - - (275,807) (275,807)
--------- --------- --------- ---------
Balance on September 30, 1999 $ 1,000 $ 59,000 $(364,989) $(304,989)
========= ========= ========= =========
</TABLE>
See Notes to Financial Statements
<PAGE>
LOANRATES ONLINE, INC. 5
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
For the Period From April 3, 1997, Date of Inception, to December 31, 1997,
For the Year Ended December 31, 1998,
For the Nine Months Ended September 30, 1999,
and For the Period From April 3, 1997, Date of Inception,
to September 30, 1999
<TABLE>
<CAPTION>
4/3/97 1/1/98 1/1/99 4/3/97
to to to to
12/31/97 12/31/98 9/30/99 9/30/99
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Cash paid for expenses $ (24,335) $ (28,596) $ (54,944) $(107,875)
--------- --------- --------- ---------
CASH FLOWS FROM
INVESTING ACTIVITIES
Purchase of Equipment $ (3,222) $ (6,923) $ (626) $ (10,771)
Patent costs paid - (5,500) (539) (6,039)
Software development costs paid (12,438) (5,874) (14,435) (32,747)
Receivable - - (3,683) (3,683)
--------- --------- --------- ---------
Net cash used in
investing activities $ (15,660) $ (18,297) $ (19,283) $ (53,240)
--------- --------- --------- ---------
CASH FLOWS FROM
FINANCING ACTIVITIES
Proceeds from sale
of common stock $ 1,000 $ - $ - $ 1,000
Advances (repayments)
from stockholders 40,103 45,834 (14,484) 71,453
Proceeds from notes payable - - 85,000 85,000
--------- --------- --------- ---------
Net cash provided
by financing activities $ 41,103 $ 45,834 $ 70,516 $ 157,453
--------- --------- --------- ---------
Net increase (decrease) in cash $ 1,108 $ (1,059) $ (3,711) $ (3,662)
Cash, beginning - 1,108 49 -
--------- --------- --------- ---------
Cash (overdraft), ending $ 1,108 $ 49 $ (3,662) $ (3,662)
========= ========= ========= =========
RECONCILIATION OF NET LOSS TO
NET CASH USED IN OPERATING
ACTIVITIES
Net loss $ (36,825) $ (52,357) $(275,807) $(364,989)
Noncash (income) expenses
included in net loss:
Depreciation 615 1,313 2,475 4,403
Change in assets and
liabilities:
Increase in deferred
financing fees - - (8,500) (8,500)
Increase in prepaid
expenses - - (17,337) (17,337)
Increase in accrued
expenses and accounts
payable 11,875 22,448 244,225 278,548
--------- --------- --------- ---------
Net cash used in
operating activities $ (24,335) $ (28,596) $ (54,944) $(107,875)
========= ========= ========= =========
</TABLE>
See Notes to Financial Statements
<PAGE>
LOANRATES ONLINE, INC. 6
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
Note 1. Nature of Business and Significant Accounting Policies
Nature of business:
LoanRates Online, Inc. was incorporated under the laws of the
Commonwealth of Virginia in March 1997. The company commenced
operations in April 1997. The company is a business-to-business
Internet service company serving wholesale lenders and mortgage
brokers/correspondents.
Significant accounting policies:
Method of accounting:
The financial statements are presented on the accrual basis of
accounting.
Use of 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 disclosures of contingent assets
and liabilities at the date of the financial statements and
reported amounts of revenues and expenses during the reporting
period. Due to their prospective nature, actual results could
differ from those estimates.
Property and equipment:
Property and equipment is carried at cost. Depreciation is
computed using the straight-line method over three to five years.
Maintenance and repairs of property and equipment are charged to
operations and major improvements are capitalized. Upon
retirement, sale or other disposition of property and equipment,
the cost and accumulated depreciation are eliminated from the
accounts and gain or loss is included in operations.
Financing fees:
Financing fees are being amortized over the term of the loans on
the straight-line method.
Patents:
The company has filed a Provisional Patent and Utility Patent
Application with the U.S. Patent Office. The company has incurred
patent costs of $14,786 as of September 30, 1999. There is no
amortization expense as of September 30, 1999, since the
application process is not yet complete.
<PAGE>
NOTES TO FINANCIAL STATEMENTS 7
(A Development Stage Company)
Note 2. Development Stage Operations
The company has been developing its software products and website
since inception. In March 1999, the system went live on the
Internet and is currently being used by a highly recognized
wholesale mortgage lender, Chevy Chase Bank. No revenue has been
recognized as of September 30. 1999. The Company is continuing in
its strategy to obtain additional financing/investments to both
improve its product/service and extend its marketing capabilities.
Note 3. Software Development Costs
During the period from April 3, 1997, date of inception, to
September 30, 1999, the company incurred total software development
costs of $90,997. Of this amount $42,797 has been expensed because
it is believed that those costs will not contribute to the final
service or products. The company incurred software development
costs of $13,511, $29,342 and $48,144, during the periods ended
December 31, 1997, 1998, and 1999, respectively. Of these amounts,
$1,073, $23,468 and $18,256, respectively, were expensed during
those periods. $12,438, $18,312 and $48,200 has been capitalized
as software development costs as of December 31, 1997, December 31,
1998, and September 30, 1999, respectively. There has been no
amortization expense since no revenue has yet been generated. The
company intends to enhance its systems via reprogramming under the
Oracle database management system.
Note 4. Income Taxes
The company, with the consent of its stockholders, has elected to be
taxed as an S corporation under the sections of the federal and
state income tax laws which provide that, in lieu of corporate
income tax, the stockholders separately account for the company's
items of income, deductions, losses, and credits. Therefore, the
financial statements do not include any provision for corporate
income tax.
Note 5. Convertible Notes Payable
The company received loans from three individuals totaling $85,000.
The notes bear interest at 12 percent and were due in full on
November 7, 1999. The note holders have the option to convert the
unpaid principal amount into shares of voting common stock in the
ratio of one dollar of principal for each share of stock. The
notes had not been repaid as of December 16, 1999.
<PAGE>
NOTES TO FINANCIAL STATEMENTS 8
(A Development Stage Company)
Note 6. Noncash Financing and Investing Activities
In October 1998, the stockholders converted $59,000 of their
previous loan advances into additional paid-in capital
Note 7. Common Stock
The company has 25,000 authorized no par value shares of common
stock. The company has three classes of common stock at September
30, 1999. Series A, NVR stock is non-voting. Series A, LTVR stock
has voting rights for the original owner, but not for any
transferees. Series B stock has full voting rights and no
restrictions. Shares issued by class are as follows:
Series A, NVR 20
Series A, LTVR 50
Series B 956
-----
Total stock shares issued and outstanding 1,026
=====
Note 8. Subsequent Financing and Investing Agreements
Investing Agreement
-------------------
The company has an agreement with Castle Capital Partners, LLC (CCP),
a management consulting firm, in order to assist the company in its
efforts to obtain $3 million in capital and become a publicly traded
company. In exchange for its services, CCP would receive the
following: 1) 600,000 free trading shares; 2) 99,000 restricted
shares; 3) 400,000 free-trading shares; 4) $500,000 cash less
warrants; 5) 100,000 warrants for $1.00 per warrant, and 6) $450,000
for $3 million in capital raised. The agreement would be in effect
for three years. There may be a $250,000 termination fee due upon
early termination.
Convertible Notes Payable
-------------------------
Subsequent to September 30, 1999, the company accepted additional
convertible loans from other parties with loan terms similar to
those disclosed in note 5 of the financial statements. Loan terms
are 180 days and include stock conversion options. The total amount
subsequently borrowed was $169,200, including the conversion of an
existing account payable of $15,000 into a note payable.
<PAGE>
LOANRATES ONLINE, INC.
(A Development Stage Company)
BALANCE SHEET - Proforma Combined Statement
December 31, 1998
<TABLE>
<CAPTION>
12/31/98
------------
<S> <C>
ASSETS
Current Assets
Cash $ 49
Prepaid Expenses -
Receivable -
Deferred Financing Fees -
----------
Total Current Assets $ 49
----------
Prepaid Expenses $ -
Property and Equipment $ 10,145
Less: accumulated depreciation 1,928
----------
$ 8,217
----------
Intangible Assets
Patents $ 5,500
Software Development Costs 18,312
----------
$ 23,812
----------
Other Assets $ 40
----------
Total Assets $ 32,118
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Convertible Notes Payable $ -
Accounts Payable 34,323
Cash Overdraft -
Accrued Salaries and Payroll Taxes -
Advances From Stockholders 26,937
----------
Total Current Liabilities $ 61,260
----------
Stockholders' Deficit
Preferred Stock $ -
(20,000,000 authorized)
(none issued or outstanding)
Common Stock $ 1,111
(80,000,000 authorized)
(8,519,800 issued and outstanding)
Additional Paid-In Capital 59,000
Deficit Accumulated During the
Development Stage (89,253)
----------
Total Stockholders' Deficit $ (29,142)
----------
Total Liabilities and Stockholders' Deficit $ 32,118
==========
</TABLE>
<PAGE>
LOANRATES ONLINE, INC.
(A Development Stage Company)
INCOME STATEMENT - Proforma Combined Statement
December 31, 1998
<TABLE>
<CAPTION>
1/1/98-12/31/98
---------------
<S> <C>
REVENUE $ -
----------
OPERATING EXPENSES
Administrative Support $ 11,558
Commissions -
Depreciation 1,313
Office Expense 2,842
Office Rent 2,629
Payroll Taxes -
Promotion 1,889
Professional Fees -
Printing and Reproduction 871
Salaries -
Software Development 23,468
Telephone 1,482
Travel 521
Website Hosting 5,802
----------
Total Operating Expense $ 52,375
FINANCING EXPENSES
Financing Fees -
Interest Expense -
----------
$ -
----------
NET LOSS $ 52,357
==========
</TABLE>
<PAGE>
LOANRATES ONLINE, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' DEFICIT - Proforma Combined Statement
December 31,1998
<TABLE>
<CAPTION>
Additional
Common Paid-In Accumulated
Stock Capital Deficit Total
---------------------------------------------
<S> <C> <C> <C> <C>
Balance As Of 12/31/97 $ 1,111 $ - $ (36,825) $ (35,714)
Contributed Capital 59,000
Net Loss - - (52,428) (52,357)
--------- --------- --------- ---------
Balance As Of 12/31/98 $ 1,111 $ 59,000 $ (89,253) $ (29,142)
========= ========= ========= =========
</TABLE>
<PAGE>
LOANRATES ONLINE, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS - Proforma Combined Statement
December 31, 1998
<TABLE>
<CAPTION>
12/31/98
----------
<S> <C>
Cash Flow From Operating Activites
Cash Paid For Expenses $ (28,596)
----------
Cash Flow From Investing Activities
Purchase Of Equipment $ (6,923)
Patent Costs Paid (5,500)
Software Development Costs Paid (5,874)
Receivable -
Net Cash Used In Investing Activities $ (18,297)
----------
Cash Flow From Financing Activities
Proceeds From Sale Of Common Stock $ -
Advances (repayments) From Stockholders 45,834
Proceeds From Notes Payable -
----------
Net Cash Provided By Financing Activities 45,834
----------
Net Increase (Decrease) In Cash $ (1,059)
Cash, Beginning $ 1,108
Cash (Overdraft), Ending $49
=========
Reconciliation Of Net Loss To Net Cash
Used In Operating Activities
Net Loss $(52,357)
----------
Noncash (Income) Expenses Included In Net Loss
Depreciation 1,313
Change In Assets And Liabilities:
Increase In Deferred Financing Fees -
Increase In Prepaid Expenses -
Increase In Accrued Expenses/Accounts Payable 22,448
--------
Net Cash Used In Operating Activities $(28,958)
========
</TABLE>
<PAGE>
LOANRATES ONLINE, INC.
(A Development Stage Company)
BALANCE SHEET - Proforma Combined Statement
September 30, 1999
<TABLE>
<CAPTION>
9/30/99
ASSETS
<S> <C>
Current Assets
Cash $ -
Prepaid Expenses 9,907
Receivable 3,683
Deferred Financing Fees 8,500
-----------
Total Current Assets $ 22,090
-----------
Prepaid Expenses $ 7,430
Property and Equipment $ 10,771
Less: accumulated depreciation 4,403
-----------
$ 6,368
-----------
Intangible Assets
Patents $ 14,786
Software Development Costs 48,200
-----------
$ 62,986
Other Assets $ 40
-----------
Total Assets $ 98,914
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Convertible Notes Payable $ 85,000
Accounts Payable 135,128
Cash Overdraft 3,662
Accrued Salaries and Payroll Taxes 167,620
Advances From Stockholders 12,453
-----------
Total Current Liabilities $ 403,863
-----------
Stockholders' Deficit
Preferred Stock $ -
(20,000,000 authorized)
(none issued or outstanding)
Common Stock $ 1,111
(80,000,000 authorized)
(8,519,800 issued and outstanding)
Additional Paid-In Capital 59,000
Deficit Accumulated During the
Development Stage (365,060)
-----------
Total Stockholders' Deficit $ (304,949)
-----------
Total Liabilities and Stockholders' Deficit $ 98,914
===========
</TABLE>
<PAGE>
LOANRATES ONLINE, INC.
(A Development Stage Company)
INCOME STATEMENT - Proforma Combined Statement
September 30, 1999
<TABLE>
<CAPTION>
1/1/99-9/30/99
<S> <C>
REVENUE $ -
-----------
OPERATING EXPENSES
Administrative Support $ 30
Commissions 31,000
Depreciation 2,475
Office Expense 805
Office Rent 1,475
Payroll Taxes 11,620
Promotion 586
Professional Fees 10,800
Printing and Reproduction 16
Salaries 156,000
Software Development 18,256
Telephone 755
Travel 2,554
Website Hosting 2,065
-----------
Total Operating Expense $ 238,437
-----------
FINANCING EXPENSES
Financing Fees 34,000
Interest Expense 3,400
-----------
$ 37,400
-----------
NET LOSS $ 275,837
===========
</TABLE>
<PAGE>
LOANRATES ONLINE, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' DEFICIT -Proforma Combined Statement
September 30, 1999
<TABLE>
<CAPTION>
Additional
Common Paid-in Accumulated
Stock Capital Deficit Total
-------------------------------------------------
<S> <C> <C> <C> <C>
Balance As Of 12/31/98 $ 1,111 $ 59,000 $ (89,253) $ (29,142)
Net Loss - - (275,807) (275,807)
---------- ---------- ---------- ----------
Balance As Of 9/30/99 $ 1,111 $ 59,000 $ (365,060) $ (304,949)
========== ========== ========== ==========
</TABLE>
<PAGE>
LOANRATES ONLINE, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS - Proforma Combined Statement
September 30, 1999
<TABLE>
<CAPTION>
9/30/99
-----------
<S> <C>
Cash Flow From Operating Activities
Cash Paid For Expenses $ (54,944)
-----------
Cash Flow From Investing Activities
Purchase Of Equipment $ (626)
Patent Costs Paid (539)
Software Development Costs Paid (14,435)
Receivable (3,683)
-----------
Net Cash Used In Investing Activities $ (19,283)
-----------
Cash Flow From Financing Activities
Proceeds From Sale Of Common Stock $ -
Advances (repayments)
From Stockholders (14,484)
Proceeds From Notes Payable 85,000
-----------
Net Cash Provided By
Financing Activities 70,516
-----------
Net Increase (Decrease) In Cash $ (3,711)
Cash, Beginning $ 49
-----------
Cash (Overdraft), Ending $ (3,662)
===========
Reconcialition Of Net Loss To net Cash
Used In Operating Activities
Net Loss $ (275,807)
Noncash (Income) Expense Included In Net Loss
Depreciation 2,475
Change In Assets And Liabilities:
Increase In Deferred Financing Fees (8,500)
Increase In Prepaid Expenses (17,337)
Increase In Accrued Expenses/
Accounts Payable 244,225
-----------
Net Cash Used in Operating Activities $ (54,944)
===========
</TABLE>
<PAGE>
(b) Exhibits
<TABLE>
<CAPTION>
Exhibit Number Description
<S> <C>
2.0 Plan and Agreement of Reorganization
3.1 Articles of Amendment
99.0 Consulting Agreement
<PAGE>
Date: January 18, 2000
LoanRates Online.com, Inc.
By: /s/ Frederick T. Dykes
--------------------------------
Frederick T. Dykes, Chairman of
the Board of Directors and
Chief Executive Officer
By: /s/ Richard J. Heiston
--------------------------------
Richard J. Heiston, President
Chief Operations Officer and
Director
EXHIBIT 2.0
PLAN AND AGREEMENT OF REORGANIZATION
BETWEEN
MAS Acquisition XIII Corporation
(an Indiana corporation)
AND
LoanRates Online, Inc.
(a Virginia corporation)
This Plan and Agreement of Reorganization is entered into this 13th day of
December, 1999, by and between MAS Acquisition XIII Corporation, an Indiana
corporation, with offices at 1710 E. Division Street, Evansville, Indiana
47711, hereafter referred to as "MAS," and LoanRates Online, Inc., a Virginia
corporation, with offices at 11350 Random Hills Drive, Suite 800, Fairfax,
Virginia 22030, and its shareholders, hereinafter referred to as "LROL.
This Plan or Reorganization is within the meaning of Section 368 (a)(1)(B) of
the Internal Revenue Code of 1986, as amended, MAS will acquire from the
shareholders of LROL all of the issued and outstanding shares of LROL in
return for 8,627,000 shares of the authorized but unissued shares of MAS. LROL
will then become and operate as a wholly owned subsidiary of MAS.
AGREEMENT
In order to consummate such plan of reorganization, the parties hereto, in
consideration of the mutual agreements and on the basis of the representations
and warranties hereafter set forth, do hereby agree, as follows:
ARTICLE I
1.01. Transfer of LROL capital stock and consideration for transfer: Subject to
the terms and conditions of this Agreement, each LROL shareholder shall have
endorsed and delivered his or her certificate to Frederick T. Dykes, Chairman
of LROL, as Trustee, prior to the closing date, who shall, at such closing,
deliver said certificates to Aaron Tsai in exchange for the stated number of
shares of MAS (subject to the provisions of Section 3(a)(9) of the Securities
Act of 1933, as amended) as set forth in 1.02 below.
1.02. Consideration for transfer to MAS: On this the closing date, subject to
the terms and conditions of this Agreement, and in full consideration for the
transfer and delivery to MAS of all the issued and outstanding shares of LROL.
MAS shall cause to be delivered by its transfer agent, Signature Stock
Transfer, of Dallas, Texas, 8,627,000 shares of the authorized but unissued
capital stock of MAS. Said MAS shares shall be broken down into individual
names and amounts as requested in writing by Frederick T. Dykes, authorized
agent for the LROL shareholders, and when issued, such shares to be fully paid
and nonassessable. Such shares shall not be free trading as they are not at
this time registered or covered by any exemption. Said shares will be
<PAGE>
restricted in nature and said restriction shall be reflected on the face of all
certificates included in the MAS shares.
ARTICLE II
2.01. Closing: The time of delivery by LROL stockholders of their respective
shares as provided in Paragraph 1.01 of this Agreement having already taken
place, said shares being held by Frederick T. Dykes, as authorized agent, and
the certificate(s) for MAS shares as authorized by the Board of Directors of
MAS being in hand for delivery to Aaron Tsai, as authorized agent, closing
shall be effective with the signing of this Agreement. For purposes of record,
closing shall be effective as of the 13th day of December, 1999, 5 p.m. Eastern
Time.
ARTICLE III
3.01. Representations and Warranties by LROL:
(1) LROL is a corporation duly organized and validly existing and in good
standing under the laws of the State of Virginia. It has all requisite
corporate power and authority to carry on its business as now being conducted,
to enter into this Agreement and to carry out and perform the terms and
provisions of this Agreement. LROL is duly qualified, licensed, or domesticated
and in good standing as a foreign corporation authorized to do business in each
jurisdiction wherein the nature of its activities conducted or the character of
its properties make such qualification, licensing, or domestication necessary.
(2)(a) LROL is duly and lawfully authorized by its Articles of Incorporation,
to issue the shares of capital stock required by this Agreement; further, LROL
has no other authorized series or class of stock. All of the outstanding shares
of LRO's capital stock have been duly issued.
(b) LROL is not presently liable on account of a any indebtedness for borrowed
monies, except as reflected on the Balance Sheet described in Subparagraph (4),
below.
(c) There are no outstanding subscriptions, options, warrants, calls,
contracts, demands, commitments, convertible securities, or other agreements or
arrangements of any character or nature whatsoever under which LROL is or may
be obligated to issue or purchase shares of its capital stock other than
warrants or obligations previously agreed to with Hopkins Anderson Capital
Corporation and Castle Capital Partners.
(3) Each LROL stockholder severally and for himself at the time of the Closing
on the Closing Date will be the lawful owner of the shares of the capital stock
of LROL held in his name, free and clear of all liens, claims and encumbrances
of every kind. Each stockholder has full legal right, power, and authority to
sell, assign, and transfer his shares of capital stock of LROL; and the
delivery of such shares to any person pursuant to the provisions of this
Agreement will transfer valid title thereto, free and clear of all liens,
encumbrances and claims of every kind.
2
<PAGE>
(4) LROL has furnished MAS with an audited Balance Sheet of LROL as of June
30,1999, hereinafter referred to as the Balance Sheet. Such financial
statement presents fairly the financial condition of LROL at such date.
Specifically, but not by way of limitation, the Balance Sheet discloses all of
the debts, liabilities, and obligations of any nature (whether absolute,
accrued, contingent, or otherwise, and whether due or to become due) of LROL at
the date thereof.
(5) LROL has not, since June 30, 1999:
(a) Incurred any obligations or liabilities, absolute, accrued, contingent, or
otherwise and whether due or to become due, except current liabilities incurred
in the ordinary course of business, none of which adversely affects the business
or prospects of LROL except for approximately One Hundred Fifty Five Thousand
Dollars ($155,000) in loans convertible to shares at Fifty Cents ($.50) a share
and One Hundred Twenty Eight Thousand (128,000) warrants for Hopkins Anderson
Capital Corp;
(b) Discharged or satisfied any liens or encumbrances, or paid any obligation
or liability, absolute, accrued, contingent or otherwise and whether due or to
become due, other than current liabilities shown on the Balance Sheet and
current liabilities incurred since the closing of business on the date of the
Balance Sheet, in each case, in the ordinary course of business;
(c) Declared or made any payment or distribution to its Stockholders or
purchased or redeemed, or obligated itself to purchase or redeem, any of its
shares of Capital Stock or other securities;
(d) Mortgaged, pledged, or subjected to lien, or other encumbrances or charges,
of its assets, tangible or intangible;
(e) Sold or transferred any of its assets except for inventory sold in the
ordinary course of business or canceled debt or claim;
(f) Suffered any damage, destruction, or loss (whether or not covered by
insurance) affecting the properties, business, or prospects of LROL, or waived
any rights of substantial value;
(g) Entered into any transaction other than in the ordinary course of business.
(6) There are no legal actions, suits, arbitration, or other legal or
administrative proceedings pending against LROL which would affect it, its
properties, assets, or business. LROL is not in default with respect to any
judgment, order or decree of any government agency or instrumentality.
(7) LROL has good and marketable title to all of its properties and assets,
including without limitation those reflected in the Balance Sheet and those
used or located on property controlled by LROL in its business on the date of
the Balance Sheet and acquired thereafter (except assets sold in the ordinary
course of business), subject to no mortgage, pledge, lien, charge, security
interest, encumbrance, or restriction except those which (a) are disclosed on
the Balance Sheet as securing specified liabilities; (b) are disclosed in the
Schedule of Assets referred to in Subparagraph 3.01(8) hereof; or (c) do not
materially adversely affect the use thereof. The building and equipment of LROL
3
<PAGE>
are in good condition and repair, reasonable wear and tear excepted. LROL has
not been, to the knowledge of any officer of LROL, threatened with any action
or proceeding under any building or zoning ordinance, regulation or law.
(8) Prior to Closing Date, LROL will have delivered to MAS a separate Schedule
of Assets, specifically referring to this paragraph, containing:
(a) A true and complete aged list of accounts receivable (if any) as of a date
no earlier than the Closing Date.
(b) A true and complete list of all capitalized machinery, tools, equipment,
and rolling stock owned by LROL, setting forth all liens, claims, encumbrances,
charges, restrictions, covenants, and conditions.
(c) A complete schedule of all fire and other casualty and liability policies
of LROL in effect at the time of delivery of said schedule.
(9) LROL is not a party to, or otherwise bound by, any written or oral:
(a) Contract or agreement not made in the ordinary course of business;
(b) Lease with respect to any property, real or personal, whether as lessor or
lessee, except as reflected in the Balance Sheet.
(c) Contract or other commitment continuing for a period of more than thirty
days and which is not terminable without cost or other liability to LROL or its
successor except as shown on the Balance Sheet.
LROL has in all respects performed all obligations required to be performed by
it to date and is not in material default under any of the contracts,
agreements, leases, documents, or other arrangement to which it is a party or
by which it is otherwise bound.
(10) The books of account, minute books, stock certificate books, and stock
transfer ledgers of LROL are complete at Closing and also correct, and there
have been no transactions involving the business of LROL which properly should
have been set forth in said respective books, other then those set forth
therein.
(11) Since the Balance Sheet there has not been any material adverse change in,
or event or condition materially and adversely affecting the condition
(financial or otherwise) of the properties, assets or liabilities of LROL.
3.02 MAS represents and warrants to LROL and its stockholders as follows:
(1) MAS is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Indiana.
(2) MAS is considered a fully-reporting company by the SEC.
4
<PAGE>
(3) MAS's authorized capital stock consists of 80,000,000 shares of common
stock and 20,000,000 shares of preferred stock, par value $.001. After the
completion of this Agreement 11,676,000 shares of common stock will be validly
issued and outstanding. This figure reflects the shares beneficially issued to
the shareholders of LROL under Rule 3(a)(9) of the Securities Act of 1933.
(4) The execution, delivery, and performance of this Agreement has been duly
authorized by all requisite corporate action. This Agreement constitutes a
valid and binding obligation of MAS in accordance with its terms. No provision
of the Articles of Incorporation and the amendments thereto, by-laws and any
amendments thereto, or of any contract to which MAS is a party or otherwise
bound, which prevents MAS from delivering good title to its shares of such
capital stock in the manner contemplated hereunder.
(5) MAS has furnished LROL and its shareholders with a statement of management,
and previous management, that there are little or no assets and no liabilities,
and that the corporation, and its predecessor have had no activities in which
it could have incurred any liabilities since the September 30, 1999 financials.
(6) All of the MAS common shares to be issued to LROL shareholders will, when
so issued, be validly issued and outstanding, fully paid and non-assessable.
(7) Since the financial condition statement, there has not been any material or
adverse change in, or event or condition materially and adversely affecting the
condition of MAS.
ARTICLE IV
4.01 LROL covenants that all statements made herein and hereto are true and
correct and may be relied upon by MAS.
4.02. LROL covenants and warrants that all books, records and financial
statements employed or used in connection with this Agreement are true and
correct and that the right to examine same has been extended to MAS and its
representatives.
4.03. Federal Securities Act-Unregistered Stock:
(1) Each LROL stockholder acknowledges that the shares of MAS common stock to
be delivered to him pursuant to this Agreement have not and are not registered
under the 1933 Act, as amended, and that accordingly such stock is not fully
transferable except as permitted under various exemptions contained in the 1933
Act, and the rules of the Securities and Exchange Commission interpreting
said Act. The provisions contained in this paragraph are intended to ensure
compliance with the 1933 Act, as amended.
(2) Each LROL stockholder agrees that the certificates evidencing the shares he
will receive shall contain substantially the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED UNLESS THE
SAME ARE REGISTERED UNDER THE SECURITY ACT OF 1933, OR THE
5
<PAGE>
COMPANY RECEIVES AN OPINION FROM COUNSEL SATISFACTORY TO IT
THAT SUCH REGISTRATION IS NOT REQUIRED FOR SALE OR TRANSFER OR
THAT THE SHARES HAVE BEEN LEGALLY SOLD IN BROKER TRANSACTIONS
PURSUANT TO RULE 144 OF THE RULES AND REGULATIONS OF THE
SECURITIES AND EXCHANGE COMMISSION PROMULGATED UNDER
SECURITY ACT OF 1933."
ARTICLE V
5.01 Conditions Precedent:
(1) The aggregate number of shares of the corporation's capital stock tendered
by the LROL stockholders at the closing shall constitute 100 percent of all of
the issued and outstanding Capital Stock of LROL.
ARTICLE VI
6.01 Paragraph and other headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
6.02. This Agreement shall be construed under and in accordance with the laws
of the State of Indiana.
6.03. This Agreement shall be binding on and inure to the benefit of and be
enforceable by the LROL shareholders and MAS, their respective heirs,
executors, administrators, legal representatives, successors, and assigns
except as otherwise expressly provided herein.
6.04. Should there be any litigation arising from this transaction, the
prevailing party shall be entitled to recover reasonable attorney's fees from
the other party, which fees may be set by the court in the trial of such action
or may be enforced in a separate action brought for that purpose. These fees
shall be in addition to any other relief which may be awarded.
IN WITNESS WHEREOF, the parties hereto have executed this Plan and Agreement
of Reorganization on the date first set forth, at 1800 N. Beauregard Street,
Suite 150, Alexandria, Virginia, 22311.
FOR MAS ACQUISITION XIII CORP.,
an Indiana Corporation
by: /s/ Aaron Tsai
--------------------------------
Aaron Tsai, President
by: /s/ Aaron Tsai
--------------------------------
Aaron Tsai, Secretary
6
<PAGE>
FOR LOANRATES ONLINE, INC.,
a Virginia corporation
by: /s/ Frederick T. Dykes
--------------------------------
Frederick T. Dykes, Chairman
by: /s/ Richard J. Heiston
--------------------------------
Richard J. Heiston, President
7
<PAGE>
EXHIBIT 3.1
[ 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 XIII 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) ________________I__________________ 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)
The name of the Corporation is LoanRates Online.com, Inc.
- --------------------------------------------------------------------------
ARTICLE II
- --------------------------------------------------------------------------
Date of each amendments adoption:
January 7, 2000
- --------------------------------------------------------------------------
(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:
---------------------------------------------------------
11,676,000 Shares entitled to vote.
---------------------------------------------------------
8,627,000 Number of shares represented at the meeting.
---------------------------------------------------------
8,627,000 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 Seventh day of January, 2000.
- --------------------------------------------------------------------------
Signature of current officer Printed name of officer
or chairman of the board or chairman of th board
/s/ Frederick T. Dykes Frederick T. Dykes
- --------------------------------------------------------------------------
Signature's title
Chairman, Secretary
- --------------------------------------------------------------------------
<PAGE>
EXHIBIT 99.0
MAS FINANCIAL CORP.
1710 E. Division St. Tel: (812) 479-7266
Evansville, IN 47711 Fax: (812) 479-7267
- --------------------------------------------------------------------------
CONSULTING AGREEMENT
This agreement is entered into on this 1st day of December, 1999 by and
between MAS Financial Corp. (hereinafter referred to as "MAS"), and Loanrates
Online, Inc., their heirs, designees or assignees, (hereinafter referred to
as "Client"), and is made with reference to the following recitations:
Whereas, MAS has skills and expertise in the fields of business consulting,
due diligence, mergers and acquisitions, and public and private offering
structuring and transactions, and,
Whereas, for the purpose of advancing the business plans of Client, Client
wishes to contract for the control stock of an acquisition company from MAS,
and,
Whereas MAS owns or controls the control stock of a public shell corporation,
MAS Acquisition XIII Corp. (hereinafter referred to as "Acquisition" company,
a corporation organized under the laws of the State of Indiana, having those
classes and numbers of shares as more fully set forth on the company
information sheet attached hereto and made a part hereof by reference. MAS
has control of Acquisition company and is prepared to transfer the control
block. Now, therefore, the parties hereto hereby agree and covenant as
follows:
(1) MAS agrees to take certain actions, and undertake certain obligations for
the orderly transfer of the control block of stock of Acquisition company
(8,628,000 shares of the total 11,676,000 shares issued or to be issued and
outstanding) as directed by Client. Client intends to issue and sell
additional shares to raise capital. MAS agrees as well to do all of the
following acts:
* Name Change and New Stock Certificates
* Unaudited financial statements brought forward to most recent period.
* Change of officers and directors and resignation of present board
* 15C211 prepared and filed with NASD.
* Deliver control block shares.
* Obtain CUSIP number.
* Obtain a stock symbol for trading on the OTC Bulletin Board.
* Furnish Market Maker subject to approval by Client.
* Any other document or act needed to make an orderly transfer of control.
* Prepare and file 8-K and Schedule 14f-1
All expenses incurred by the Acquisition company, after the transfer of
control by MAS to the Client, shall be the responsibility of the Acquisition
company.
(3) At closing, which shall take place at a time and place mutually agreeable
to the parties hereto, MAS shall deliver to Client or its designee the
following:
(a) Certificates representing the shares being sold hereunder; containing the
following legend:
"The securities represented by this Certificate have not been registered
under the Securities Act of 1933 (the "Act") and are "Restricted Securities"
as the term is defined in Rule 144 under the Act. The Common Shares may not
1
<PAGE>
be offered for sale, sold or otherwise transferred except pursuant to an
effective registration statement under the Act or exemption, the availability
of which is to be established to the satisfaction of the Corporation."
(b) Necessary consents, if any, from the state of domicile of the Acquisition
company;
(c) All corporate books, records, and documents, stock books, ledgers,
minute books, articles and by-laws of the Acquisition company;
(d) Shareholder list of the Acquisition company;
(e) Resignations of all present officers and directors, effective as of the
closing date;
(f) Copy of two years of audited year-end financial statements;
(4) MAS represents and warrants the following:
(a) that the Acquisition company is a corporation duly organized and existing
under the laws of the State of Indiana, unless otherwise noted;
(b) that the Acquisition company will use its best efforts to preserve its
business organization intact.
(c) that the Acquisition company will not enter into any contract, commitment
or transaction, or declare, set aside or pay any dividend, or make any
distribution in respect of its capital stock, or waive any obligation or
liability, or compromise any claim, or cancel any note, loan or other
obligation owed to it, without the consent of Client.
(5) MAS represents and warrants the following prior to closing:
(a) That MAS will not cause any amendment to be made in the Articles of
Incorporation or By-Laws of the Acquisition company, nor issue or cause to be
issued any additional shares of capital stock; nor issue or cause to be
issued any warrants, obligations, subscriptions, options, convertible
securities, or other commitments under which any additional shares of its
capital stock may be directly or indirectly authorized, issued or transferred
nor will either agree to do any of the acts listed above.
(6) Client represents and warrants the following prior to closing:
(a) That Client is solely responsibly for the decision to by acquired by
the Acquisition company,
(b) That the Client to be acquired by the Acquisition company which is the
subject of this agreement shall be suitable in all respects for such merger,
(7) The parties shall at all times keep each other's information, sources,
trade secrets, processes, and confidential information strictly confidential.
(8) MAS is not rendering legal advise to Client. Each party is responsible
for all of it's own professional, legal, accounting, Broker-Dealer, and
consulting fees as they may apply to each party.
(9) Should Client terminate this transaction for any reason other than the
malfeasance or nonperformance of MAS prior to the acquisition of the
Acquisition company, all monies paid to MAS up until that point shall be
retained by MAS as liquidated damages. The parties agree to the
reasonableness of these liquidated damages. All documents and work product
prepared for or on behalf of Client by MAS up until that point shall become
the property of Client.
2
<PAGE>
(10) MAS warrants that the Acquisition company being transferred shall be
transferred with no liabilities and little or no assets, and shall defend and
hold Client and the Acquisition company harmless against any action by any
third party against either of them arising out of, or as a consequence of,
any act or omission of MAS or the Acquisition company prior to, or during the
closing contemplated by this contract of sale. MAS reserves the right, if
necessary, to substitute another Acquisition company acceptable to Client of
like worth.
(11) All of the representations and warranties contained within this contract
of sale, whether made by Client, MAS, or MAS on behalf of the Acquisition
company, will be true and correct on the closing date as if made on that date.
(12) At any time prior to the closing, Client and their counsel, accountants
and other agents shall have full access during normal business hours to all
properties, books, accounts, records, contracts and documents relating to the
Acquisition company.
(13) This agreement shall be governed by the laws of the State of Indiana.
The parties agree to the jurisdiction of the Courts of the State of Indiana
and the United States District Court for the Southern District of Indiana as
the forums for the resolution of any legal disputes between the parties.
Client agrees to pay court costs, attorney fees in a reasonable amount, and
interest on any unpaid balances at the judgment rate then in effect in the
State of Indiana should it become necessary for MAS to engage in legal action
to recover any portion of the purchase price or any other fees from Client.
(14) If any bona fide action or proceeding shall be pending against any party
on the closing date that could result in an unfavorable judgment, decree or
order that would prevent or make unlawful the performance of this agreement,
or if any agency of the federal or of any state government shall have
objected to it on or before the closing date to this transaction, or if any
prospectus contemplated with respect to the issuance and sale of shares by
Buyers shall have been disapproved by any federal or state regulatory agency,
either party may cancel and terminate this agreement without liability to the
other. All representations and warranties of the parties shall expire and
terminate and be extinguished by the closing, and consummation of the closing
shall be conclusive proof that each party is fully satisfied with the facts
constituting the basis of the representations and warranties of the other
party and with the performance of their obligations hereunder. This
paragraph shall not affect any obligation of any party under this contract
that is permitted to be performed in whole or in part after the closing.
(15) Neither party may assign this agreement without the prior written
consent of the other party, which consent shall not be unreasonably withheld.
However, MAS may requires up to 180 days to perform due diligence on any
assignee of Client, and may reject any assignee not qualified by MAS.
(16) This documents contains the entire agreement between the parties hereto.
No oral or other representation or warranty has been given to Client by MAS,
and this agreement controls over any and all oral representations made by any
party to this transaction. This agreement may only be modified by a writing,
signed by the parties.
(17) Each party agrees to execute all of the documents and do all of the
things necessary to effectuate the purpose of this agreement, without delay
or limitations.
3
<PAGE>
Accepted and Agreed: Accepted and Agreed:
/s/ Aaron Tsai /s/ Frederick T. Dykes
__________________________ ____________________________________
MAS Financial Corp. Loanrates Online, Inc.
By: Mr. Aaron Tsai, President By: Frederick T. Dykes, CEO
Mailing Address:
MAS Financial Corp. Loanrates Online, Inc.
1710 E. Division St. 11350 Randon Hills Drive, Suite 800
Evansville, IN 47711 Fairfax, Virginia 22030
4
<PAGE>
</TABLE>
