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 BUILDING MATERIAL HOLDINGS, LTD.
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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 XVIII CORP.
1710 E. Division St.
Evansville, IN 47711
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(Former Name and Former Address)
Utah 000-27167 59-2729321
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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 Building Material Holdings, Ltd., a Utah corporation
("Tianrong Building Material Holdings, Ltd.," "TNRG" or, the "Company"),
acquired 8,250,000 outstanding shares of MAS XVIII Corp ("MAS XVIII") from MAS
Capital, Inc., a shareholders thereof, for Two Hundred Thousand ($200,000)
Dollars. As a result, MAS XVIII became a majority-owned subsidiary of TNRG.
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The Stock Purchase Agreement was approved by the unanimous consent of
the Board of Directors of TNRG on March 6, 2000.
Prior to the Agreement, TNRG had 86,554,854 shares of common stock
issued and outstanding. Following the Agreement, TNRG had 86,554,854 shares of
common stock outstanding. TNRG was incorporated in the State of Utah on
September 19, 1983.
Upon effectiveness of the Stock Purchase Agreement, pursuant to Rule
12g-3(a) of the General Rules and Regulations of the Securities and Exchange
Commission, TNRG became the successor issuer to MAS Acquisition XVIII Corp 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 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 11,257,801(2) 13%
President,
Director
All directors and 11,257,801(2)(3) 13%
executive officers
as a group
DIZON Investments 10,000,000(4) 12%
International, Inc.
8 West 38th Street
9th Floor
New York, NY 10018
(1) Based upon 86,554,854 outstanding shares of common stock.
(2)(3) Includes 10,000,00 shares owned by Dizon Investments International, Inc.,
a company of which James Tilton is an officer and director.
(4) A company of which James Tilton is an officer and director.
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COMPANY'S BUSINESS AND SUBSIDIARIES
Tianrong Building Material Holdings, Ltd. (OTCBB:TNRG) is a business
development company that intends to engage in the acquisition of businesses of
various sectors through the application of its management expertise and
shareholder value.
Presently, TNRG has an ownership interest in the following subsidiaries:
- TNRG has 80% interest in Chongqing Dazheng Market Co., Ltd., which
owns a 200,000 square foot shopping center with over100 retail and wholesale
stores located in the Province of Szechuan, People's Republic of China. Pursuant
to the acquisition, the Company incurred an obligation in the form of a
Promissory Note in the amount of $21,000,000 in favor of the former owners of
Chongqing Dazheng Market Co., Ltd.
- TNRG's Medical Group, Inc., which includes and FDA approved personal
computer- based electrocardiogram monitor and a soon to be launched health and
medical e-commerce web site.
- Tianrong Internet Products and Services, Inc. (OTCBB:TIPS), which 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.
- The "New Hampshire Thunderloons", a basketball franchise of the United
States Basketball League. The company is presently listed on the Over The
Counter Bulletin Board stock exchange (OTC BB: USBL).
- Nighthawk Entertainment Corporation, a holding company with interests
in the "Cavalcade of Boxing" film library CD ROM game development and such
technologies relating to exploration of seas and oceans.
However, TNRG presently operates at a loss and has not received revenues
from operations sufficient to maintain its operations. TNRG has raised funds for
operations through the sale of its securities and may continue to do so. See
"RISK FACTORS".
PROPERTY
TNRG 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.
DESCRIPTION OF SECURITIES
The Company has an authorized capitalization of 200,000,000 shares of
common stock, no par value per share and no authorized preferred stock. Upon
execution of this Agreement, the Company had issued and outstanding, 86,554,854
shares of common stock.
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MARKET FOR TNRG' SECURITIES
TNRG is a non-reporting publicly traded company with certain of its
securities exempt from registration under the Securities Act of 1933, as
amended, pursuant to Rule 504 of Regulation D of the General Rules and
Regulations of the Securities and Exchange Commission. TNRG's common stock is
traded on the NASD OTC Bulletin Board under the symbol "TNRG." 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. TNRG acquired 96.8% the outstanding shares of MAS
XVIII 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
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 XVIII. Mr. Tilton was appointed President, Chief
Executive Officer and a director of the Company in July 1995. Since July 1998,
Mr. Tilton is also been President and a director of Tianrong Internet Products &
Services, Inc., an OTC Bulletin Board listed holding company (trading symbol
"TIPS") 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
November 1995. Since July 1998, Ms. Zheng has also been secretary, treasurer and
a director of Tianrong Products & Services, Inc. Since November 1995, Ms. Zheng
has also been secretary, treasurer and a director of China Food and Beverage
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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
TNRG IS CURRENTLY OPERATING AT A LOSS. If losses continue, TNRG 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.
The Company incurred an obligation in the form of a Promissory Note in
the amount of $21,000,000, 8% interest per annum, in favor of the former owners
of Chongqing Dazheng Market Co., Ltd., payable on or before December 9, 2004.
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 TNRG 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 TNRG. The issuance of the Company's shares for future services or
acquisitions or other corporate actions may have the effect of diluting the
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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.
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 the Agreement, the
Company became the successor issuer to MAS XVIII for reporting purposes under
the Securities Exchange Act of 1934 and elects to report under the Act effective
March 6, 2000.
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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
TNRG has a December 31 fiscal year end. The fiscal year of MAS XVIII 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 TNRG, dated March 6, 2000.
*3.1 Articles of Incorporation of TNRG,
as amended
*3.2 By-Laws of TNRG
*24.1 Consent of accountants
*27.1 Financial Data Schedule
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*To be filed by amendment
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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
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James A. Tilton, President
Date: March 6, 2000
STOCK PURCHASE AGREEMENT
Agreement dated as of March 5, 2000 between Tianrong Building Material
Holdings, Ltd., a Utah corporation ("TNRG"), 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
XVIII Shares (defined below) to TNRG, free and clear of all Encumbrances other
than restrictions imposed by Federal and State securities laws.
1.2 Purchase Price. TNRG will pay $200,000 cash to MASC for 8,250,000 shares
of MAS Acquisition XVIII Corp. ("MAS XVIII"), representing approximately 96.8%
of the issued and outstanding common shares of MAS XVIII (the "MAS XVIII
Shares").
2. THE CLOSING.
2.1 Place and Time. The closing of the sale the MAS XVIII Shares (the
"Closing") shall take place at the office of MAS Acquisition XVIII 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 TNRG:
1. Certificates representing the MAS XVIII Shares, duly endorsed for
transfer to TNRG and accompanied by appropriate guaranteed stock powers; MASC
shall immediately change those certificates for, and to deliver to TNRG at the
Closing, a certificate representing the MAS XVIII Shares registered in the name
of TNRG (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 XVIII's business reasonably requested by TNRG in
connection with this Agreement.
2.3 Deliveries by TNRG. At the Closing, TNRG 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 TNRG at the Closing.
3. CONDITIONS TO TNRG'S OBLIGATIONS.
The obligations of TNRG 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 TNRG:
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 TNRG's
acquisition of the MAS XVIII Shares or that will require any divestiture as a
result of TNRG's acquisition of the MAS XVIII Shares or that will require all or
any part of the business of TNRG 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 TNRG or MAS XVIII 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
TNRG's acquisition of the MAS XVIII 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
XVIII.
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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 TNRG's
acquisition of the MAS XVIII Shares or that will require any divestiture as a
result of TNRG's acquisition of the MAS XVIII Shares or that will require all or
any part of the business of TNRG or MAS XVIII 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 TNRG or MAS XVIII if this
Agreement is consummated shall be pending.
4.2 Representations, Warranties and Agreements. (a) The representations and
warranties of TNRG 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)
TNRG 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
TNRG's acquisition of the MAS XVIII Shares shall have been obtained and shall be
in full force and effect.
5. REPRESENTATIONS AND WARRANTIES OF MASC.
MASC represents and warrants to TNRG that, to the knowledge of MASC, and
except as set forth in an MAS XVIII 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 XVIII 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 XVIII obligating MAS
XVIII 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 XVIII Shares. The delivery of certificates to TNRG
provided in Section 2.2 will result in TNRG's immediate acquisition of record
and beneficial ownership of the MAS XVIII 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 XVIII or TNRG or any of its
Subsidiaries in connection with the execution, delivery and performance of this
Agreement by MAS XVIII or the consummation of the sale of the MAS XVIII Shares
to TNRG.
5.5 Financial Statements. MAS XVIII has delivered to TNRG the balance sheet
of MAS XVIII 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
XVIII's independent accountant (the "MAS XVIII Financial Statements"). The MAS
XVIII Financial Statements are accurate and complete in accordance with
generally accepted accounting principles. The independent accountants for MAS
XVIII will furnish any and all work papers required by TNRG and will sign any
and all consent required to be signed to include the financial statements of
TNRG in any subsequent filing by TNRG.
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 XVIII which is likely to have a material
adverse effect on the business or financial condition of MAS XVIII.
5.7 Absence of Certain Changes. Since the date of the MAS XVIII Financial
Statements, MAS XVIII has not:
1. suffered the damage or destruction of any of its properties or assets
(whether or not covered by insurance) which is materially adverse to the
business or financial condition of MAS XVIII or made any disposition of any of
its material properties or assets other than in the ordinary course of business;
2. made any change or amendment in its certificate of incorporation or
by-laws, or other governing instruments;
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3. issued or sold any Equity Securities or other securities, acquired,
directly or indirectly, by redemption or otherwise, any such Equity Securities,
reclassified, split-up or otherwise changed any such Equity Security, or granted
or entered into any options, warrants, calls or commitments of any kind with
respect thereto;
4. organized any new Subsidiary or acquired any Equity Securities of any
Person or any equity or ownership interest in any business;
5. borrowed any funds or incurred, or assumed or become subject to,
whether directly or by way of guarantee or otherwise, any obligation or
liability with respect to any such indebtedness 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 XVIII.
5.8 No Material Adverse Change. Since the date of the MAS XVIII Financial
Statements, there has not been any material adverse change in the business or
financial condition of MAS XVIII.
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 XVIII Shares to TNRG.
6. REPRESENTATIONS AND WARRANTIES OF TNRG.
TNRG represents and warrants to MASC that, to the Knowledge of TNRG
(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 TNRG; Authorization. TNRG is a corporation duly
organized, validly existing and in good standing under the laws of Utah 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
TNRG and this Agreement constitutes a valid and binding obligation of TNRG;
enforceable against it in accordance with its terms.
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6.2 No Conflict as to TNRG 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 TNRG 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 TNRG or any of its Subsidiaries under, any material
agreement or commitment to which TNRG 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 TNRG 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 TNRG 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 TNRG 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 TNRG or any of either of
their Subsidiaries in connection with the execution, delivery and performance of
this Agreement by TNRG.
6.4 Other Consents. No consent of any Person is required to be obtained by
MAS XVIII or TNRG 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 XVIII or TNRG.
6.5 Financial Statements. After closing, TNRG ackwledge and agrees that
within 60 days from the effective date of this agreement, TNRG shall have file
on Form 8-K which includes two years of audited and unaudited consolidated
financial statements of TNRG. Such TNRG Financial Statements and notes shall
fairly present the financial condition and results of operations of TNRG 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. TNRG 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 XVIII Shares.
6.7 Purchase for Investment. TNRG is purchasing the MAS XVIII 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 TNRG shall (a) give to the other and its authorized representatives
reasonable access to all plants, offices, warehouse and other facilities and
properties of MAS XVIII or TNRG, 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 TNRG 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 XVIII'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 XVIII 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 XVIII shall (a) preserve substantially intact the business
organization of MAS XVIII; and (b) preserve in all material respects the present
business relationships and good will of MAS XVIII.
8.3 Corporate Organization. Between the date of this Agreement and the
Closing Date, MAS XVIII 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;
<PAGE>
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 XVIII 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 XVIII 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 TNRG, MAS XVIII 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 XVIII Financial Statements or incurred in the
ordinary course of business and consistent with past practice since the date of
the MAS XVIII 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 TNRG, 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 TNRG 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 TNRG:
Tianrong Building Material Holdings, Ltd.
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.
<PAGE>
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 XVIII or the
MASC shall be needed in connection with any merger or consolidation of TNRG 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 Building Material Holdings, Ltd.
a Utah corporation
By:/s/James A. Tilton
- -----------------------------
James A. Tilton, President
MAS CAPITAL INC.
By:/s/Aaron Tsai
- -------------------------
Aaron Tsai, President
