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
March 6, 2000
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Date of Report
(Date of Earliest Event Reported)
TIANRONG INTERNET PRODUCTS AND SERVICES, INC.
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(Exact Name of Registrant as Specified in its Charter)
8 West 38th Street
9th Floor
New York, New York 10018
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(Address of Principal Executive Offices)
212/398-7833
212/398-8695 (fax)
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(Registrant's Telephone Number)
MAS ACQUISITION XVII CORP.
1710 E. Division St.
Evansville, IN 47711
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(Former Name and Former Address)
New Jersey 000-27165 22-1644111
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(State or other (Commission (IRS Employer
jurisdiction of incorporation) File Number) Identification No.)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) Pursuant to a Stock Purchase Agreement (the "Agreement") effective
March 6, 2000, Tianrong Internet Products and Services, Inc., a New Jersey
corporation ("TIPS" or, the "Company"), acquired 8,250,000 outstanding shares of
MAS XVII Corp ("MAS XVII") from MAS Capital, Inc., a shareholder thereof, for
Two Hundred Thousand ($200,000) Dollars. As a result, MAS XVII became a
majority-owned subsidiary of TIPS.
The Stock Purchase Agreement was approved by the unanimous consent of
the Board of Directors of TIPS on March 6, 2000.
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Prior to the Agreement, TIPS had 75,540,472 shares of common stock
issued and outstanding and, 75,540,472 shares issued and outstanding following
the Agreement. TIPS was incorporated in the State of New Jersey on January 29,
1959.
Upon effectiveness of the Agreement, pursuant to Rule 12g-3(a) of the
General Rules and Regulations of the Securities and Exchange Commission, TIPS
became the successor issuer to MAS XVII for reporting purposes under the
Securities Exchange Act of 1934 and elects to report under the Act effective
March 6, 2000.
A copy of the Stock Purchase Agreement is filed as an exhibit to this
Form 8-K and is incorporated in its entirety herein. The foregoing description
is modified by such reference.
(b) The following table contains information regarding the shareholdings
of the Company's current directors and executive officers and those persons or
entities who beneficially own more than 5% of the Company's common stock:
NAME AMOUNT OF COMMON STOCK PERCENT OF COMMON STOCK
BENEFICIALLY OWNED(1) BENEFICIALLY OWNED
James A. Tilton 52,828,339(2) 70%
President,
Director
All directors and 52,828,339(2)(3) 70%
executive officers
as a group
(2 persons)
DIZON Investments
International, Inc. 2,500,000(4) 03%
8 West 38th St.
New York, NY 10018
Tianrong Building 50,000,000(5) 66%
Material Holdings, Ltd.
8 West 38th St.
New York, NY 10018
Xiang Gao 920,000 01%
11859 NE 162 Land
Bothell, WA 98011
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(1) Based upon 75,540,472 outstanding shares of common stock.
(2)(3) Includes 2,500,00 shares owned Dizon Investments International, Inc., a
company of which James Tilton is an officer and director and 50,000,000 of
Tianrong Building Material Holdings, Ltd., a company of which Tilton is an
officer and director, and, which is also the parent of TIPS.
(4) A company of which James Tilton is an officer and director.
(5) Is a company of which James Tilton is an officer and director and is the
parent company of TIPS.
COMPANY'S BUSINESS AND SUBSIDIARIES
Tianrong Internet Products and Services, Inc. (OTCBB:TIPS) is a U.S.
holding company whose strategy is the acquisition of domestic and international
Internet Service Providers and related companies. TIPS owns five development
stage, Internet related companies.
A-Web Internet Services (http://www.aweb.com), established in 1995, is
an Internet service provider in the city of New York. A-Web provides a wide
range of Internet access and services, for its on-line consumers.
AAAMall.net ("http://www.aaamall.net), is an electronic commerce
outsourcing and direct marketing company dedicated to making e-Commerce a
reality for all businesses. The technology, innovative merchant services, and
extensive distribution channels have been designed to help companies effectively
conduct business online.
On July 20th, 1999, the company acquired of ChinaMalls, Inc.
("http://www.chinamalls.com"), which is an E-Commerce company dedicated to
helping merchants, resellers, shoppers, and partners of the global Chinese
market sell and buy products online. The site has over 2700 items for sale in 16
different categories. The company offers complete bilingual turnkey solutions
for commerce enabled storefronts through our merchant, reseller, affiliate,
consultant and partner programs. ChinaMalls provides thousands of products,
including VCDs, CDs, books, electronics, jewelry, health products, art, home and
garden.
On October 25, 1999, Tianrong Internet Products and Services, Inc,
acquired Chongqing Word Technology Co., Ltd., a mainland China based Internet
service provider and e-commerce developer.
On January 19, 2000, Tianrong Internet Products and Services, Inc.
announced its plans to launch a new Internet Telephony company, Phonecalls.com,
Inc. The new company will be a wholly owned subsidiary of TIPS and conduct
business on the Internet as: http://www.phonecalls.com. Phonecalls.com will
offer to consumers the opportunity to purchase on-line, prepaid phonecards with
instant PIN #s. This will allow customers to use the prepaid phonecards at the
time of purchase. The Company will offer low priced and quality service
throughout the World by using both Internet and telecommunication technology.
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(Additional information can be obtained from our web site,
http://www.tipsstock.com.)
However, TIPS presently operates at a loss and has not received revenues
from operations sufficient to maintain its operations. TIPS has raised funds for
operations through the sale of its securities. See "RISK FACTORS".
PROPERTY
TIPS maintains its administrative offices at 8 West 38th Street, 9th
Floor, New York, N.Y. 10018. The Company does not lease its own space and pays
no rent. The offices are leased by other companies affiliated with the Company's
president and the office space and all office services are shared.
LITIGATION
There is no outstanding litigation in which the Company is involved and
the Company is unaware of any pending actions or claims against it.
DESCRIPTION OF SECURITIES
The Company has an authorized capitalization of 200,000,000 shares of
common stock, $.001 par value per share and no authorized preferred stock.
MARKET FOR TIPS' SECURITIES
TIPS is a non-reporting publicly traded company with certain of its
securities exempt from registration under the Securities Act of 1933 pursuant to
Rule 504 of Regulation D of the General Rules and Regulations of the Securities
and Exchange Commission. TIPS's common stock is traded on the NASD OTC Bulletin
Board under the symbol TIPS. The NASDAQ Stock Market has implemented a change in
its rules requiring all companies trading securities on the NASD OTC Bulletin
Board to become reporting companies under the Securities Exchange Act of 1934.
The Company was required to become a reporting company by the close of
business on April 8, 2000. TIPS acquired 96.8% the outstanding shares of MAS
XVII to become successor issuer to it pursuant to Rule 12g-3 in order to comply
with the reporting company requirements implemented by the NASDAQ Stock Market.
MANAGEMENT
Name Age Title
---- --- -----
James A. Tilton 38 President, Chief
Executive Officer and Director
Jane Zheng 37 Secretary, Treasurer and Director
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James A. Tilton serves as President, Chief Executive Officer and a
director of the Company and is also the president and sole director of its
majority-owned subsidiary, MAS XVII Corporation. Mr. Tilton was appointed
President, Chief Executive Officer and a director of the Company in July 1998.
Since July 1995, Mr. Tilton has also been President and a director of Tianrong
Building Material Holdings, Ltd., an OTC Bulletin Board listed holding company
(trading symbol "TNRG") with business in China and southeast Asia. Since
November 1995, Mr. Tilton has also been the President and a director of China
Food and Beverage Company, an OTC Bulletin Board listed holding company (trading
symbol "CHIF") primarily for a beer production company in China. Mr. Tilton is
also sole shareholder, sole officer and sole director of International Beverage
Development Corp., a shareholder of the Company. Mr. Tilton is expected to
continue in such positions. Mr. Tilton is the husband of Jane Zheng, secretary,
treasurer and a director of the Company.
Jane Zheng serves as Secretary, Treasurer and a director of the Company.
Ms. Zheng was appointed as Secretary, Treasurer and Director of the Company in
July 1998. Since July 1995, Ms. Zheng has also been secretary, treasurer and a
director of Tianrong Building Material Holdings, Ltd. Since November 1995, Ms.
Zheng has also been secretary, treasurer and a director of China Food and
Beverage Company. Ms. Zheng is expected to continue in such positions. In 1986,
Ms. Zheng received her degree in engineering from Shanghai University, Shanghai,
China. In 1994, Ms. Zheng received a Masters of Business Administration degree
in Finance from Adelphi University, Garden City, New York. Ms. Zheng is the wife
of James A. Tilton.
EXECUTIVE COMPENSATION
Ms. Zheng is not currently receiving any salary or other remuneration
from the Company. Mr. Tilton is not currently receiving any salary or other
remuneration from the Company.
All directors of the Company hold office until the next annual meeting
of shareholders or until their successors are elected and qualified. Currently,
there are two directors of the Company. The by-laws permit the Board of Director
to fill any vacancy and such director may serve until the next annual meeting of
shareholders or until his successor is elected and qualified. Officers serve at
the discretion of the Board of Directors.
RISK FACTORS
TIPS IS CURRENTLY OPERATING AT A LOSS. If losses continue, TIPS may need
to raise additional capital through the placement of its securities or from
other debt or equity financing. If the Company is not able to raise such
financing or obtain alternative sources of funding, management may be required
to curtail operations. There is no assurance that the Company will be able to
continue to operate if additional sales of its securities cannot be generated or
other sources of financing located.
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MANAGEMENT AND AFFILIATES OWN ENOUGH SHARES TO CONTROL SHAREHOLDER VOTE.
THE COMPANY HAS NOT BEEN AUDITED BY INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS. Although the Company is required to file audited financial
statements no later than 60 days from the date that this report is required to
be filed, no such audited financial statements have been prepared or are
available for inspection as of the date hereof. Consequently, there can be no
assurance that any representations as to the financial condition or assets of
the Company are as stated herein.
COMPETITION FROM LARGER AND MORE ESTABLISHED COMPANIES MAY HAMPER
MARKETABILITY.
ISSUANCE OF FUTURE SHARES MAY DILUTE INVESTORS' SHARE VALUE. The
Company's Articles of Incorporation, as amended, of TIPS authorizes the issuance
of 200,000,000 shares of common stock. The future issuance of all or part of the
remaining authorized common stock may result in substantial dilution in the
percentage of the Company's common stock held by its then existing shareholders.
Moreover, any common stock issued in the future may be valued on an arbitrary
basis by TIPS. The issuance of the Company's shares for future services or
acquisitions or other corporate actions may have the effect of diluting the
value of the shares held by investors, and might have an adverse effect on any
trading market, should a trading market develop for the Company's common stock.
PENNY STOCK REGULATION. Penny stocks generally are equity securities
with a price of less than $5.00 per share other than securities registered on
certain national securities exchanges or quoted on the NASDAQ Stock Market,
provided that current price and volume information with respect to transactions
in such securities is provided by the exchange or system. The Company's
securities may be subject to "penny stock rules" that impose additional sales
practice requirements on broker-dealers who sell such securities to persons
other than established customers and accredited investors (generally those with
assets in excess of $1,000,000 or annual income exceeding $200,000 or $300,000
together with their spouse). For transactions covered by these rules, the
broker-dealer must make a special suitability determination for the purchase of
such securities and have received the purchaser's written consent to the
transaction prior to the purchase. Additionally, for any transaction involving a
penny stock, unless exempt, the "penny stock rules" require the delivery, prior
to the transaction, of a disclosure schedule prescribed by the Commission
relating to the penny stock market. The broker-dealer also must disclose the
commissions payable to both the broker-dealer and the registered representative
and current quotations for the securities. Finally, monthly statements must be
sent disclosing recent price information on the limited market in penny stocks.
Consequently, the "penny stock rules" may restrict the ability of broker-dealers
to sell the Company's securities. The foregoing required penny stock
restrictions will not apply to the Company's securities if such securities
maintain a market price of $5.00 or greater. There can be no assurance that the
price of the Company's securities will reach or maintain such a level.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Not Applicable.
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ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable
ITEM 5. OTHER EVENTS
Successor Issuer Election.
Pursuant to Rule 12g-3(a) of the General Rules and Regulations of the
Securities and Exchange Commission, upon effectiveness of said Agreement, the
Company became the successor issuer to MAS XVII for reporting purposes under the
Securities Exchange Act of 1934 and elects to report under the Act effective
March 6, 2000.
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
Pursuant to the terms of the aforementioned Agreement, the Registrant
has accepted the resignation of Aaron Tsai, the Registrant's sole Director and
Officer as of March 6, 2000, and appointed James Tilton as President and
Director of the Registrant.
ITEM 7. FINANCIAL STATEMENTS
No financial statements are filed herewith. The Registrant is required
to file financial statements by amendment hereto not later than 60 days after
the date that this Current Report on Form 8-K must be filed.
ITEM 8. CHANGE IN FISCAL YEAR
TIPS has a December 31 fiscal year end. The fiscal year of MAS XVII is
December 31. The Company will file a Transitional Report on Form 10-QSB, if
required.
EXHIBITS
2.1 Stock Purchase Agreement
between MAS Acquisition XVII Corp.
and TIPS, dated
March 6, 2000.
*3.1 Articles of Incorporation of TIPS,
as amended
*3.2 By-Laws of TIPS
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*24.1 Consent of accountants
*27.1 Financial Data Schedule
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*To be filed by amendment
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
By /s/ James A. Tilton
James A. Tilton, President
Date: March 6, 2000
STOCK PURCHASE AGREEMENT
Agreement dated as of March 5, 2000 between Tianrong Internet Products
and Services, Inc., a New Jersey corporation ("TIPS"), on the one hand, and MAS
Capital Inc. ("MASC").
1. THE ACQUISITION.
1.1 Purchase and Sale Subject to the Terms and Conditions of this Agreement.
At the Closing to be held as provided in Section 2, MASC shall sell the MAS XVII
Shares (defined below) to TIPS, free and clear of all Encumbrances other than
restrictions imposed by Federal and State securities laws.
1.2 Purchase Price. TIPS will pay $200,000 cash to MASC for 8,250,000 shares
of MAS Acquisition XVII Corp. ("MAS XVII"), representing approximately 96.8% of
the issued and outstanding common shares of MAS XVII (the "MAS XVII Shares").
2. THE CLOSING.
2.1 Place and Time. The closing of the sale the MAS XVII Shares (the
"Closing") shall take place at the office of MAS Acquisition XVII Corp., 1710 E.
Division St., Evansville, IN 47711 no later than the close of business (Central
time) on or before March 6, 2000 or at such other place, date and time as the
parties may agree in writing.
2.2 Deliveries by MASC. At the Closing, the MASC shall deliver the following
to TIPS:
1. Certificates representing the MAS XVII Shares, duly endorsed for
transfer to TIPS and accompanied by appropriate guaranteed stock powers; MASC
shall immediately change those certificates for, and to deliver to TIPS at the
Closing, a certificate representing the MAS XVII Shares registered in the name
of TIPS (without any legend or other reference to any Encumbrance other than
appropriate federal securities law limitations).
2. The documents contemplated by Section 3.
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3. All other documents, instruments and writings required by this
Agreement to be delivered by MASC at the Closing and any other documents or
records relating to MAS XVII's business reasonably requested by TIPS in
connection with this Agreement.
2.3 Deliveries by TIPS. At the Closing, TIPS shall deliver the following to
MASC:
a. $200,000 cash by wire transfer to the account of MASC contemplated by
section 1.
2. The documents contemplated by Section 4.
3. All other documents, instruments and writings required by this
Agreement to be delivered by TIPS at the Closing.
3. CONDITIONS TO TIPS'S OBLIGATIONS.
The obligations of TIPS to effect the Closing shall be subject to the
satisfaction at or prior to the Closing of the following conditions, any one or
more of which may be waived by TIPS:
3.1 No Injunction. There shall not be in effect any injunction, order or
decree of a court of competent jurisdiction that prevents the consummation of
the transactions contemplated by this Agreement, that prohibits TIPS's
acquisition of the MAS XVII Shares or that will require any divestiture as a
result of TIPS's acquisition of the MAS XVII Shares or that will require all or
any part of the business of TIPS to be held separate and no litigation or
proceedings seeking the issuance of such an injunction, order or decree or
seeking to impose substantial penalties on TIPS or MAS XVII if this Agreement is
consummated shall be pending.
3.2 Representations, Warranties and Agreements. (a) The representations and
warranties of MASC set forth in this Agreement shall be true and complete in all
material respects as of the Closing Date as though made at such time, and (b)
MASC shall have performed and complied in all material respects with the
agreements contained in this Agreement required to be performed and complied
with by it at or prior to the Closing.
3.3 Regulatory Approvals. All licenses, authorizations, consents, orders and
regulatory approvals of Governmental Bodies necessary for the consummation of
TIPS's acquisition of the MAS XVII Shares shall have been obtained and shall be
in full force and effect.
3.4 Resignations of Director. Effective on the Closing Date, all of officers
and directors shall have resigned as an officer, director and employee of MAS
XVII.
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4. CONDITIONS TO MASC'S OBLIGATIONS.
The obligations of MASC to effect the Closing shall be subject to the
satisfaction at or prior to the Closing of the following conditions, any one or
more of which may be waived by MASC:
4.1 No Injunction. There shall not be in effect any injunction, order or
decree of a court of competent jurisdiction that prevents the consummation of
the transactions contemplated by this Agreement, that prohibits TIPS's
acquisition of the MAS XVII Shares or that will require any divestiture as a
result of TIPS's acquisition of the MAS XVII Shares or that will require all or
any part of the business of TIPS or MAS XVII to be held separate and no
litigation or proceedings seeking the issuance of such an injunction, order or
decree or seeking to impose substantial penalties on TIPS or MAS XVII if this
Agreement is consummated shall be pending.
4.2 Representations, Warranties and Agreements. (a) The representations and
warranties of TIPS set forth in this Agreement shall be true and complete in all
material respects as of the Closing Date as though made at such time, and (b)
TIPS shall have performed and complied in all material respects with the
agreements contained in this Agreement required to be performed and complied
with by it at or prior to the Closing.
4.3 Regulatory Approvals. All licenses, authorizations, consents, orders and
regulatory approvals of Governmental Bodies necessary for the consummation of
TIPS's acquisition of the MAS XVII Shares shall have been obtained and shall be
in full force and effect.
5. REPRESENTATIONS AND WARRANTIES OF MASC.
MASC represents and warrants to TIPS that, to the knowledge of MASC, and
except as set forth in an MAS XVII Disclosure Letter:
5.1 Authorization. MASC is a corporation duly organized, validly existing
and in good standing under the laws of the state of Indiana. This Agreement
constitutes a valid and binding obligation of MASC, enforceable against it in
accordance with its terms.
5.2 Capitalization. The authorized capital stock of MAS XVII consists of
80,000,000 authorized shares of stock, par value $.001, and 20,000,000 preferred
shares, par value $.001, of which 8,519,900 common shares are presently issued
and outstanding. No shares have been registered under state or federal
securities laws. As of the Closing Date there will not be outstanding any
warrants, options or other agreements on the part of MAS XVII obligating MAS
XVII to issue any additional shares of common or preferred stock or any of its
securities of any kind.
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5.3 Ownership of MAS XVII Shares. The delivery of certificates to TIPS
provided in Section 2.2 will result in TIPS's immediate acquisition of record
and beneficial ownership of the MAS XVII Shares, free and clear of all
Encumbrances subject to applicable State and Federal securities laws.
5.4 Consents and Approvals of Governmental Authorities. Except with respect
to applicable State and Federal securities laws, no consent, approval or
authorization of, or declaration, filing or registration with, any Governmental
Body is required to be made or obtained by MAS XVII or TIPS or any of its
Subsidiaries in connection with the execution, delivery and performance of this
Agreement by MAS XVII or the consummation of the sale of the MAS XVII Shares to
TIPS.
5.5 Financial Statements. MAS XVII has delivered to TIPS the balance sheet
of MAS XVII as at June 30, 1998 and June 30, 1999, and statements of income and
changes in financial position for the fiscal years then ended and the period
from inception to the period then ended, together with the report thereon of MAS
XVII's independent accountant (the "MAS XVII Financial Statements"). The MAS
XVII Financial Statements are accurate and complete in accordance with generally
accepted accounting principles. The independent accountants for MAS XVII will
furnish any and all work papers required by TIPS and will sign any and all
consent required to be signed to include the financial statements of TIPS in any
subsequent filing by TIPS.
5.6 Litigation. There is no action, suit, inquiry, proceeding or
investigation by or before any court or Governmental Body pending or threatened
in writing against or involving MAS XVII which is likely to have a material
adverse effect on the business or financial condition of MAS XVII.
5.7 Absence of Certain Changes. Since the date of the MAS XVII Financial
Statements, MAS XVII has not:
1. suffered the damage or destruction of any of its properties or assets
(whether or not covered by insurance) which is mth Environmental Laws.
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The Registrant is not engaged in any business which would
presently require compliance with Federal or State environmental
agencies.
P. Markets for Products and Services
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The potential market for the products and services provided by
the Registrant is potentially global and consists of all persons,
wherever situated, who utilize the Internet, as well as those who
desire to set up their own virtual business on the Net.
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III. CONSULTING SERVICES
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RBID holds itself as an independent consultant to advise third parties
on how to design, implement and market e-commerce sites on the Internet, and to
provide software development debtedness for borrowed money;
6. paid, discharged or satisfied any material claim, liability or
obligation (absolute, accrued, contingent or otherwise), other than in the
ordinary course of business;
7. prepaid any material obligation having a maturity of more than 90
days from the date such obligation was issued or incurred;
8. canceled any material debts or waived any material claims or rights,
except in the ordinary course of business;
9. disposed of or permitted to lapse any rights to the use of any
material patent or registered trademark or copyright or other intellectual
property owned or used by it;
10. granted any general increase in the compensation of officers or
employees (including any such increase pursuant to any employee benefit plan);
11. purchased or entered into any contract or commitment to purchase any
material quantity of raw materials or supplies, or sold or entered into any
contract or commitment to sell any material quantity of property or assets,
except (i) normal contracts or commitments for the purchase of, and normal
purchases of, raw materials or supplies, made in the ordinary course business,
(ii) normal contracts or commitments for the sale of, and normal sales of,
inventory in the ordinary course of business, and (iii) other contracts,
commitments, purchases or sales in the ordinary course of business;
12. made any capital expenditures or additions to property, plant or
equipment or acquired any other property or assets (other than raw materials and
supplies) at a cost in excess of $100,000 in the aggregate;
13. written off or been required to write off any notes or accounts
receivable in an aggregate amount in excess of $2,000;
14. written down or been required to write down any inventory in an
aggregate amount in excess of $ 2,000;
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15. entered into any collective bargaining or union contract or
agreement; or
16. other than the ordinary course of business, incurred any liability
required by generally accepted accounting principles to be reflected on a
balance sheet and material to the business or financial condition of MAS XVII.
5.8 No Material Adverse Change. Since the date of the MAS XVII Financial
Statements, there has not been any material adverse change in the business or
financial condition of MAS XVII.
5.9 Brokers or Finders. MASC has not employed any broker or finder or
incurred any liability for any brokerage or finder's fees or commissions or
similar payments in connection with the sale of the MAS XVII Shares to TIPS.
6. REPRESENTATIONS AND WARRANTIES OF TIPS.
TIPS represents and warrants to MASC that, to the Knowledge of TIPS
(which limitation shall not apply to Section 6.3). Such representations and
warranties shall survive the Closing for a period of two years.
6.1 Organization of TIPS; Authorization. TIPS is a corporation duly
organized, validly existing and in good standing under the laws of New Jersey
with full corporate power and authority to execute and deliver this Agreement
and to perform its obligations hereunder. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary
corporate action of TIPS and this Agreement constitutes a valid and binding
obligation of TIPS; enforceable against it in accordance with its terms.
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6.2 No Conflict as to TIPS and Subsidiaries. Neither the execution and
delivery of this Agreement will (a) violate any provision of the certificate of
incorporation or by-laws (or other governing instrument) of TIPS or any of its
Subsidiaries or (b) violate, or be in conflict with, 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 of, or accelerate the performance
required by, or excuse performance by any Person of any of its obligations
under, or cause the acceleration of the maturity of any debt or obligation
pursuant to, or result in the creation or imposition of any Encumbrance upon any
property or assets of TIPS or any of its Subsidiaries under, any material
agreement or commitment to which TIPS or any of its Subsidiaries is a party or
by which any of their respective property or assets is bound, or to which any of
the property or assets of TIPS or any of its Subsidiaries is subject, or (c)
violate any statute or law or any judgment, decree, order, regulation or rule of
any court or other Governmental Body applicable to TIPS or any of its
Subsidiaries except, in the case of violations, conflicts, defaults,
terminations, accelerations or Encumbrances described in clause (b) of this
Section 6.4, for such matters which are not likely to have a material adverse
effect on the business or financial condition of TIPS and its Subsidiaries,
taken as a whole.
6.3 Consents and Approvals of Governmental Authorities. No consent, approval
or authorization of, or declaration, filing or registration with, any
Governmental Body is required to be made or obtained by TIPS or any of either of
their Subsidiaries in connection with the execution, delivery and performance of
this Agreement by TIPS.
6.4 Other Consents. No consent of any Person is required to be obtained by
MAS XVII or TIPS to the execution, delivery and performance of this Agreement
including, but not limited to, consents from parties to leases or other
agreements or commitments, except for any consent which the failure to obtain
would not be likely to have a material adverse effect on the business and
financial condition of MAS XVII or TIPS.
6.5 Financial Statements. After closing, TIPS ackwledge and agrees that
within 60 days from the effective date of this agreement, TIPS shall have file
on Form 8-K which includes two years of audited and unaudited consolidated
financial statements of TIPS. Such TIPS Financial Statements and notes shall
fairly present the financial condition and results of operations of TIPS and its
Subsidiaries as at the respective dates thereof and for the periods therein
referred to, all in accordance with generally accepted United States accounting
principles consistently applied throughout the periods involved, except as set
forth in the notes thereto, and shall be utilizable in any SEC filing in
compliance with Rule 310 of Regulation S-B promulgated under the Securities Act.
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6.6 Brokers or Finders. TIPS has not employed any broker or finder or
incurred any liability for any brokerage or finder's fees or commissions or
similar payments in connection with the purchase of the MAS XVII Shares.
6.7 Purchase for Investment. TIPS is purchasing the MAS XVII Shares solely
for its own account for the purpose of investment and not with a view to, or for
sale in connection with, any distribution of any portion thereof in violation of
any applicable securities law.
7. ACCESS AND REPORTING; FILINGS WITH GOVERNMENTAL AUTHORITIES; OTHER
COVENANTS.
7.1 Access Between the date of this Agreement and the Closing Date. Each of
MASC and TIPS shall (a) give to the other and its authorized representatives
reasonable access to all plants, offices, warehouse and other facilities and
properties of MAS XVII or TIPS, as the case may be, and to its books and
records, (b) permit the other to make inspections thereof, and (c) cause its
officers and its advisors to furnish the other with such financial and operating
data and other information with respect to the business and properties of such
party and its Subsidiaries and to discuss with such and its authorized
representatives its affairs and those of its Subsidiaries, all as the other may
from time to time reasonably request.
7.2 Regulatory Matters. MASC and TIPS shall (a) file with applicable
regulatory authorities any applications and related documents required to be
filed by them in order to consummate the contemplated transaction and (b)
cooperate with each other as they may reasonably request in connection with the
foregoing.
8. CONDUCT OF MAS XVII'S BUSINESS PRIOR TO THE CLOSING. MASC shall use its
best efforts to ensure the following:
8.1 Operation in Ordinary Course. Between the date of this Agreement and the
Closing Date, MAS XVII shall cause conduct its businesses in all material
respects in the ordinary course.
8.2 Business Organization. Between the date of this Agreement and the
Closing Date, MAS XVII shall (a) preserve substantially intact the business
organization of MAS XVII; and (b) preserve in all material respects the present
business relationships and good will of MAS XVII.
8.3 Corporate Organization. Between the date of this Agreement and the
Closing Date, MAS XVII shall not cause or permit any amendment of its
certificate of incorporation or by-laws (or other governing instrument) and
shall not:
1. issue, sell or otherwise dispose of any of its Equity Securities, or
create, sell or otherwise dispose of any options, rights, conversion rights or
other agreements or commitments of any kind relating to the issuance, sale or
disposition of any of its Equity Securities;
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2. create or suffer to be created any Encumbrance thereon, or create,
sell or otherwise dispose of any options, rights, conversion rights or other
agreements or commitments of any kind relating to the sale or disposition of any
Equity Securities;
3. reclassify, split up or otherwise change any of its Equity
Securities; be party to any merger, consolidation or other business combination;
4. sell, lease, license or otherwise dispose of any of its properties or
assets (including, but not limited to rights with respect to patents and
registered trademarks and copyrights or other proprietary rights), in an amount
which is material to the business or financial condition of MAS XVII except in
the ordinary course of business; or
5. organize any new Subsidiary or acquire any Equity Securities of any
Person or any equity or ownership interest in any business.
8.4 Other Restrictions. Between the date of this Agreement and the Closing
Date, MAS XVII shall not:
1. borrow any funds or otherwise become subject to, whether directly or
by way of guarantee or otherwise, any indebtedness for borrowed money;
2. create any material Encumbrance on any of its material properties or
assets;
3. increase in any manner the compensation of any director or officer or
increase in any manner the compensation of any class of employees;
4. create or materially modify any material bonus, deferred
compensation, pension, profit sharing, retirement, insurance, stock purchase,
stock option, or other fringe benefit plan, arrangement or practice or any other
employee benefit plan (as defined in section 3(3) of ERISA);
5. make any capital expenditure or acquire any property or assets;
6. enter into any agreement that materially restricts TIPS, MAS XVII or
any of their Subsidiaries from carrying on business;
7. pay, discharge or satisfy any material claim, liability or
obligation, absolute, accrued, contingent or otherwise, other than the payment,
discharge or satisfaction in the ordinary course of business of liabilities or
obligations reflected in the MAS XVII Financial Statements or incurred in the
ordinary course of business and consistent with past practice since the date of
the MAS XVII Financial Statements; or
8. cancel any material debts or waive any material claims or rights.
9. DEFINITIONS.
As used in this Agreement, the following terms have the meanings
specified or referred to in this Section 9.
9.1 "Business Day" = Any day that is not a Saturday or Sunday or a day on
which banks located in the City of New York are authorized or required to be
closed.
9.2 "Code" = The Internal Revenue Code of 1986, as amended.
9.3 "Encumbrances" = Any security interest, mortgage, lien, charge, adverse
claim or restriction of any kind, including, but not limited to, any restriction
on the use, voting, transfer, receipt of income or other exercise of any
attributes of ownership, other than a restriction on transfer arising under
Federal or state securities laws.
9.4 "Equity Securities" = See Rule 3aB11B1 under the Securities Exchange Act of
1934.
9.5 "ERISA" = The Employee Retirement Income Security Act of 1974, as amended.
9.6 "Governmental Body" = Any domestic or foreign national, state or municipal
or other local government or multi-national body (including, but not limited to,
the European Economic Community), any subdivision, agency, commission or
authority thereof.
9.7 "Knowledge" = Actual knowledge, after reasonable investigation.
9.8 "Person" = Any individual, corporation, partnership, joint venture, trust,
association, unincorporated organization, other entity, or Governmental Body.
9.9 "Subsidiary" = With respect to any Person, any corporation of which
securities having the power to elect a majority of that corporation's Board of
Directors (other than securities having that power only upon the happening of a
contingency that has not occurred) are held by such Person or one or more of its
Subsidiaries.
10. TERMINATION.
10.1 Termination. This Agreement may be terminated before the Closing occurs
only as follows:
1. By MASC at any time on or after March 8, 2000, if $200,000 cash is not
received by MASC at MASC's account.
2. By TIPS, by notice to MASC at any time, if one or more of the conditions
specified in Section 3 is not satisfied at the time at which the Closing (as it
may be deferred pursuant to Section 2.1) would otherwise occur or if
satisfaction of such a condition is or becomes impossible.
3. By MASC, by notice to TIPS at any time, if one or more of the conditions
specified in Section 4 is not satisfied at the time at which the Closing (as it
may be deferred pursuant to Section 2.1), would otherwise occur of if
satisfaction of such a condition is or becomes impossible.
10.2 Effect of Termination. If this Agreement is terminated pursuant to Section
10.1, this Agreement shall terminate without any liability or further obligation
of any party to another.
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13. NOTICES. All notices, consents, assignments and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
when (a) delivered by hand, (b) sent by telex or facsimile (with receipt
confirmed), provided that a copy is mailed by registered mail, return receipt
requested, or (c) received by the delivery service (receipt requested), in each
case to the appropriate addresses, telex numbers and facsimile numbers set forth
below (or to such other addresses, telex numbers and facsimile numbers as a
party may designate as to itself by notice to the other parties).
(a) If to TIPS:
Tianrong Internet Products and Services, Inc.
Eight West 38th, St., 9th Floor
New York, NY 10018
Facsimile No.: (718) 357-0643
Attn: James A. Tilton, President
(b) If to MASC:
MAS Capital Inc.
1710 E. Division St.
Evansville, IN 47711
Facsimile No.: (812) 479-7266
Attention: Aaron Tsai, President
14. MISCELLANEOUS.
14.2 Expenses. Each party shall bear its own expenses incident to the
preparation, negotiation, execution and delivery of this Agreement and the
performance of its obligations hereunder.
14.3 Captions. The captions in this Agreement are for convenience of reference
only and shall not be given any effect in the interpretation of this agreement.
14.4 No Waiver. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing.
14.5 Exclusive Agreement; Amendment. This Agreement supersedes all prior
agreements among the parties with respect to its subject matter with respect
thereto and cannot be changed or terminated orally.
14.6 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be considered an original, but all of which together shall
constitute the same instrument.
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14.7 Governing Law, Venue. This Agreement and (unless otherwise provided) all
amendments hereof and waivers and consents hereunder shall be governed by the
internal law of the State of Indiana, without regard to the conflicts of law
principles thereof. Venue for any cause of action brought to enforce any part of
this Agreement shall be in Indiana.
14.8 Binding Effect. This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns, provided
that neither party may assign its rights hereunder without the consent of the
other, provided that, after the Closing, no consent of MAS XVII or the MASC
shall be needed in connection with any merger or consolidation of TIPS with or
into another entity.
IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement
to be executed by their respective offi-cers, hereunto duly authorized, and
entered into as of the date first above written.
TIANRONG INTERNET PRODUCTS AND SERVICES, INC.
a New Jersey corporation
/s/James A. Tilton
- -----------------------------
By James A. Tilton, President
MAS CAPITAL INC.
/s/Aaron Tsai
- -------------------------
By: Aaron Tsai, President
