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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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) January 24, 1997
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Dawcin International Corp.
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(Exact Name of Registrant as Specified in Charter)
New York 0-18270 11-2857523
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
100 Garden City Plaza, Garden City, New York 11530
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(Address of principal executive offices)
Registrant's telephone number, including area code (516) 739-8800
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Command Credit Corporation
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(Former Name or Former Address, if Change Since Last report)
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ITEM 2. Acquisition or Disposition of Assets.
(a) (i) On January 24, 1997, the Registrant and Century Financial Services,
Inc. ("Century") executed and delivered a stock purchase agreement (the
"Agreement") pursuant to which the Registrant agreed to sell 100% of the issued
and outstanding shares of capital stock of Berwyn Holdings, Inc. ("Berwyn"), a
wholly owned subsidiary of the Registrant. As consideration for the sale of
stock, Century agrees to pay to the Registrant a sum equal to fifty (50%)
percent of the net profits as defined in the attached Agreement, from all
currently existing accounts for as long as such accounts continue to contract
with Berwyn or any successor entity to Berwyn. As additional compensation,
Century will pay to the Registrant a sum equal to fifty (50%) percent of the net
profits as defined in the attached Agreement from each new account originating
from an existing client contract. Said compensation shall continue for so long
as the originating account and/or new account continues in its contract. In
addition, it is agreed to by Century that $668,320.00 is due to the Registrant
by Berwyn and Century as the new owner of Berwyn shall assume responsibility of
such debt. Such debt is evidenced by a Note executed by Berwyn. A copy of such
Note is attached hereto. In addition, the Registrant and Century agree that as
further consideration for this transaction, Century shall give the Registrant an
agreement whereby the Registrant will act as an independent new account agent
for Berwyn and the Registrant will be compensated for new business generated.
The Registrant and Century agree that the amount of compensation shall be
mutually agreed to by such separate agreement for each new account presented and
each agreement shall be executed subsequent to the attached Agreement. No cash
consideration was exchanged in connection with the transaction.
(ii) The principle followed in determining the amount of such consideration
was based upon negotiation of the parties.
(b) The assets disposed by the Registrant were 100% of the issued and
outstanding capital stock of Berwyn. The business of Berwyn is the servicing of
secured bank credit cards.
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ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(b) Pro forma financial information:
The filing of Pro forma financial information is impractical at this
time. An amended 8-K will be filed within sixty (60) days.
(c) Exhibits.
Index of Exhibits:
(2) Stock Purchase Agreement between Registrant and Century Financial
Services, Inc. dated January 24, 1997.
(23) Consent of Independent Auditors.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dawcin International Corp.
Date: February 7, 1997 By: /s/ William G. Lucas
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William G. Lucas
President
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EXHIBIT 2
STOCK PURCHASE AGREEMENT
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STOCK PURCHASE AGREEMENT
STOCK OF BERWYN HOLDINGS, INC.
DAWCIN INTERNATIONAL CORPORATION
TO
CENTURY FINANCIAL SERVICES, INC.
JANUARY 24, 1997
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AGREEMENT
THIS STOCK PURCHASE AGREEMENT, is entered into this day of January, 1997,
by and between Dawcin International Corporation, a New York Corporation
("Dawcin"), and Century Financial Services, Inc., a Delaware Corporation, or its
assigns ("Century"), and
WHEREAS, Berwyn Holdings, Inc. ("Berwyn"), is a Delaware Corporation whose
stock is wholly owned by Dawcin, a public corporation, and
WHEREAS, Dawcin desires to sell and Century desires to purchase the
entirety of the stock of Berwyn,
THEREFORE, for valuable consideration in hand paid, the parties agree to
the following terms, conditions and covenants:
W I T N E S S E T H
In consideration of the mutual representations, warranties and covenants
and subject to the conditions herein contained, the parties hereto agree as
follows:
1.0 Purchase and Sale of Stock
1.1 Century agrees to purchase and Dawcin agrees to sell and transfer One
Hundred (100%) percent of its stock in Berwyn
2.0 Purchase Price; Assumption of Liabilities
2.1 Purchase Price. As consideration for the sale of stock, Century agrees
to pay to Dawcin a sum equal to fifty (50%) percent of the "net
profits" as hereinafter defined, from all currently existing accounts
for as long as such accounts continue to contract with Berwyn or any
successor entity to Berwyn. A list of the existing accounts is
identified on Schedule 2.1 attached hereto and incorporated herein by
reference.
2.2 .Additional Compensation As additional compensation, Century will pay
Dawcin a sum equal to fifty (50%) percent of the "net profits" from
each new account originating from an existing client contract, from
the clients listed in Schedule 2.1, said compensation shall continue
for so long as the originating account and/or new account continues in
its contract.
2.3 Frequency of Payments. Dawcin shall receive payment on a quarterly
basis commencing March 31, 1997.
2.4 Collateral Compensation. Dawcin and Century agree that as further
consideration
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for this transaction, Century shall give Dawcin an agreement whereby
Dawcin will act as an independent new account agent for Berwyn and
Dawcin will be compensated for new business generated. Century and
Dawcin agree that the amount of compensation shall be mutually agreed
to by such separate agreement for each new account presented and each
agreement shall be executed subsequent to this agreement.
2.5 Assumption of Liabilities. As part of the purchase price, the parties
agree that Century will assume all of the liabilities of Berwyn as
identified on Schedule 2.5 attached hereto and incorporated herein by
reference. The parties hereto agree that such schedule is supplied by
Berwyn and is not a representation of Dawcin. Century has sought its
own financial due diligence to confirm such liabilities.
2.6 Indemnification. Century shall further hold Dawcin harmless and
indemnify Dawcin for any liabilities and or claims made upon Dawcin
resulting from Century's failure to timely pay any liabilities as
listed on the attached Schedule 2.5. Such reimbursement and
indemnification shall include Dawcin's costs and legal fees associated
with defending such third party claim. Attached hereto as Schedule 2.6
is a list of those liabilities which Dawcin has either guaranteed or
entered into on behalf of Berwyn. Schedule 2.6 is incorporated herein
by reference.
2.7 Assumption of Leases. Century shall assume all leases and contracts of
Berwyn with no further liability to Dawcin.
3.0 Debt to Dawcin, Manner of Payment
3.1 Amount. It is agreed to by Century that $668,320.00 is due to Dawcin
by Berwyn (the "Dawcin Note") and Century as the new owner of Berwyn
shall assume responsibility of such debt. Such debt is evidenced by a
Note to be executed by Berwyn simultaneous with the signing of this
Agreement. A copy of such Note is attached hereto as Schedule 3.1 as
incorporated herein reference.
3.2 Payment. The debt to Dawcin will bear interest at three (3%) percent
for the first twelve (12) months from the date herein and the lesser
of six (6%) percent per annum or prime thereafter. Interest on the
debt will be calculated on the outstanding principal only and will not
be compounded. The interest shall be paid to Dawcin quarterly
commencing April 1, 1997 and principal shall be paid annually within
thirty (30) days after the end of each calendar year to the extent of
fifty (50%) percent of any and all net profits that Berwyn has before
taxes and as defined hereinafter. Notwithstanding anything herein, the
payments of principal shall commence the earlier the close of the
calendar year 2001 or once all payables as outlined in Schedule 2.5
attached hereto are paid in full provided such payables remain as the
numbers fixed in the attached Schedule 2.5 and are not to be increased
once paid down subsequent
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to the execution of this agreement.
4.0 Post closing Adjustments
4.1 The parties hereto agree that there shall be no post closing
adjustments and Century, as part of its Assumption of Liabilities as
outlined supra, shall also assume without pro-ration all the standard
overhead operating costs of Berwyn including, but not limited to
payroll, taxes, vacation pay, insurance.
5.0 Right of Audit
5.1 Dawcin shall have the absolute right upon fourteen (14) days notice to
perform an audit of the books and records of Berwyn to determine if
Dawcin is being paid the correct amount as outlined in Articles 2 and
3 of this Agreement. In the event an audit results in a determination
that there was an error in payment to Dawcin of more than ten (10%)
percent then the reasonable cost of such audit and any reasonable
legal costs to Dawcin shall be paid by Century.
6.0 Taxes
6.1 Any sales tax and/or bulk sales due as a result of this transaction
shall be the responsibility of Century.
7.0 Closing
7.1 Time and place of the closing. The closing of the sale of stock to
Century from Dawcin shall take place at the office of Berwyn Holdings,
Inc., 1001 Jefferson Plaza, Wilmington, Delaware 19801 at a.m. local
time on January , 1997. Closing may take place by facsimile
transmission and in counterparts provided originals are sent via U.S.
mail or overnight mail following the closing.
7.2 Procedure at Closing. At the closing, the parties agree to take the
following steps in the order listed below (provided, however, that
upon their completion all such steps shall be deemed to have occurred
simultaneously):
7.2.1 The Purchaser, Century shall deliver to the Seller, Dawcin,
resolutions authorizing the purchaser of the stock in Berwyn
under the conditions set forth in this Agreement.
7.2.2. The Seller, Dawcin, shall deliver to the Purchaser, Century,
resolutions authorizing the sale of stock in Berwyn under the
conditions set forth in this Agreement.
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7.2.3. Purchaser shall deliver an executed promissory note as set
forth in Article 3.1
7.2.4. Seller shall deliver the stock in Berwyn along with stock
powers duly executed.
7.2.5. Purchaser and Seller shall execute and deliver a cross receipt
acknowledging receipt from the other respectively of the stock
and purchase price.
8.0. Representations of Seller
In order to induce Century to enter into this Agreement and to contemplate
the transactions contemplated hereunder, the Seller, Dawcin makes the following
representations:
8.1 Organization, Power and Authority of the Seller. The Seller is a
corporation duly organized and legally existing in good standing under
the laws of its state of incorporation and has full corporate power
and authority (i) to enter into this Agreement and to sell, convey,
transfer, assign and deliver the stock of Berwyn as provided herein;
and (ii) to carry out the other transactions and agreements
contemplated hereby. Without limiting the generality of the foregoing,
the board of directors of Seller have duly authorized the execution,
delivery and performance of this Agreement by Seller.
8.2 Stock of Berwyn. Seller is the holder of record (and beneficial owner)
of all the shares of capital stock of Berwyn. There are no outstanding
warrants, options, rights, contracts, or agreements of any kind to
acquire from any such record holder or beneficial owner any such
shares of capital stock.
8.3 Financial Statements of Berwyn. Seller makes no representations as to
the financial condition of Berwyn and Purchaser, Century is relying
solely upon their own audit procedure and due diligence investigation.
9.0 Representations of the Purchaser
In order to induce the Seller to enter into this Agreement and to
consummate this transactions contemplated hereunder, Century makes the following
representations and warranties:
9.1 Organization, Power and Authority of Century. Century is a corporation
duly organized and validly existing under the laws of the State of
Delaware, with full corporate power and authority (i) to enter into
this Agreement and to purchase the stock of Berwyn as provided herein;
and (ii) to carry out the other transactions and agreements
contemplated hereby. Without limiting the generality of the foregoing,
the board of directors of Seller have duly authorized the execution,
delivery and performance of this Agreement by Seller.
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9.2 Century's Indemnification Obligation. Century hereby agrees to
indemnify and hold harmless the Seller in respect of, and defined with
counsel of Seller's choice, any cost, charge, expense, fee or claim
arising out of the failure of Century to pay or discharge in full any
of the Assumed Liabilities.
9.3 Due Diligence. Purchaser has conducted its own financial and legal due
diligence investigation and is not relying upon any representations of
Seller in completing this transaction.
10.0 Litigation.
10.1 Dawcin represents to Century that Berwyn is currently in litigation or
have completed litigation with liability on the matters set forth on
Schedule 10.1 attached hereto and incorporated by reference.
11.0 Execution of Further Documents
11.1 From and after the Closing, upon the reasonable request of Century or
Dawcin, the Seller and Purchaser shall execute, acknowledge and
deliver all such further acts, deeds, bills of sale, assignments,
transfers, conveyances, powers of attorney, and assurances as may be
required to convey and transfer to vest and vest in Century and
protects its right, title and interest in all of the stock and as may
be appropriate otherwise to carry out the transactions contemplated by
this Agreement.
12.0 Definitions
12.1.1 Net Profit. Net profits shall be calculated by taking the gross
income of all Berwyn accounts and deducting the direct costs
associated with servicing Berwyn accounts. Gross income and direct
costs will be allocated on a percentage of total account basis. There
shall be no "non cash" charges such as depreciation. There shall be no
corporate or parent company charge backs from Century or any
affiliate, subsidiary or other entity in Century's control associated
with these particular accounts and there shall be no charges for
income taxes or payment of past or overdue debts showing on the Berwyn
books at the time of this transaction.
12.1.2 Interest. There shall be no cost charge to these accounts of interest
expense on the Dawcin debt until the principal amount due Dawcin is
paid down by $50,000.00.
13.0 Brokers Commissions
13.1 Purchaser represents that they have not dealt with any broker in
connection with this transaction and shall indemnify Seller for any
commissions claimed and due as a result of any Broker dealing by
Purchaser.
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14.0 Amendment and Modification
14.1 The parties hereto may amend, modify and supplement this Agreement in
such manner as may be agreed upon them in writing.
15.0 Binding Effect
15.1 This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, assigns, heirs and
legal representatives. The Seller may assign their rights under this
Agreement without the prior written consent of Century, Century may
assign any or all of its rights under this Agreement at any time
without the consent of any other party hereto.
16.0 Entire Agreement
16.1 This instrument and the exhibits and schedules attached hereto contain
the entire agreement of the parties hereto with respect to the
purchase of the stock and the other transactions contemplated herein,
and supersede all prior understandings and agreements of the parties
with respect to the subject matter hereof, except that the
post-termination and indemnification provisions will survive in
accordance with their terms. Any reference herein to this Agreement
shall be deemed to include the schedules and exhibits attached hereto.
17.0 Headings
17.1 The descriptive headings in this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.
18.0 Notices
18.1 Any notices, request, information or other document to be given
hereunder to any of the parties by any other party shall be in writing
and shall be sent by Federal Express or other reliable carrier,
transmitted by fax, personally delivered or mailed by certified or
registered mail.
19.0 Schedules
19.1 It is agreed that all schedules are supplied by Berwyn and Century is
not relying upon any representations of Dawcin as to these schedules.
20.0 Miscellaneous
20.1 Prior Name. The parties understand that the Seller, Dawcin was
previously known
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as Command Credit Corporation.
20.2 Venue. The parties hereto agree that in the event of a dispute between
Purchaser and Seller, the court of jurisdiction shall be the Supreme
Court of the State of New York, County of Nassau.
SIGNED, SEALED AND AGREED on the date first set forth above, by:
DAWCIN INTERNATIONAL CORPORATION CENTURY FINANCIAL SERVICES, INC.
/s/ William Lucas /s/ Douglas Baetz
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By: William Lucas, President By: Douglas Baetz, President
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State of Florida )
) ss.:
County of Broward )
On the day of January 24, 1997, before me personally appeared Douglas
Baetz, to me known and known to me to be the person who executed the above
instrument; who being duly sworn by me, did for himself depose and say that his
the President of Century Financial Services, Inc. and that he executed the
foregoing instrument; and that he had the authority to sign the same, and he did
duly acknowledge to me that he executed the same as the act and deed of said
form for the uses and purposes mentioned therein.
/s/ Michael Mansuelo
[SEAL] -----------------------------
Notary Public
State of New York )
) ss.:
County of Nassau )
On the day of January __, 1997, before me personally appeared William
Lucas, to me known and known to me to be the person who executed the above
instrument; who being duly sworn by me, did for himself depose and say that his
the President of Dawcin International Corp. and that he executed the foregoing
instrument; and that he had the authority to sign the same, and he did duly
acknowledge to me that he executed the same as the act and deed of said form for
the uses and purposes mentioned therein.
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Notary Public
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CORPORATE RESOLUTION
At a meeting of the Board of Directors of Century Financial Services, Inc.,
conducted by telephonic communication, a quorum thereof having been present, and
thereat a motion having been made, seconded and caused, the following resolution
was adopted by an affirmative vote of the Directors therein present:
RESOLVED, that Douglas R. Baetz as Chief Executive Officer of Century Financial
Services, Inc., be authorized to approve, authorize and cause the sale of Berwyn
Holdings, a one hundred percent owned subsidiary of Dawcin. Mr. Baetz was
granted the authority to sign the documentation necessary to conclude this
transaction.
Dated: January 20, 1997
/s/ [ILLEGIBLE]
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Corporate Secretary
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SCHEDULE 2.1 - PURCHASE PRICE; ASSUMPTION OF LIABILITIES
Existing Clients of Berwyn Holdings, Inc.
1. European American Bank
2. Wawel Savings Bank, SLA
3. CorTrust Bank
4. Fleet Bank
5. Student Finance Corporation
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SCHEDULE 2.5 - ASSUMPTION OF LIABILITIES
The attached is a list of account payables as aged. To this must be added
various other corporate obligations including, but not limited to the
Baker/Politzer Note, the Dawcin Note, the Beneficial Bank and any unpaid taxes.
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SCHEDULE 3.1 - DEBT TO DAWCIN; MANNER OF PAYMENT
See attached note to be executed simultaneous with the signing of this
Agreement.
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SCHEDULE 10.1 - LITIGATION
Baker/Politzer v. Berwyn:
This matter involves a claim by Plaintiffs against Berwyn and settled by
continued payments to Plaintiffs in the amount of $5,000.00/monthly through
August 1997. Judgment was confessed in the full amount in event of default. At
this time, there is a default.
Beneficial Bank v. Berwyn - Default judgment - Court appearance February 7,
1997
This is an action on a note and has gone into default judgment.
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SCHEDULE 2.6 - INDEMNIFICATION
Beneficial Bank Note - currently in default - court appearance on February
7, 1997
Baker/Politzer Note
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CORPORATE RESOLUTION
At a meeting of the Board of Directors of Command Credit Corporation conducted
by telephonic communication, a quorum thereof having been present, and thereat a
motion having been made, seconded and caused, the following resolution was
adopted by an affirmative vote of the Directors therein present:
RESOLVED, that William G. Lucas as Chairman and Chief Executive Officer of
Dawcin International Corp. (formerly known as Command Credit Corporation) be
authorized to approve, authorize and cause the sale of Berwyn Holdings, a one
hundred percent owned subsidiary of Dawcin, to Century Financial Services, Inc.
Mr. Lucas was granted the authority to sign the documentation necessary to
conclude this transaction.
Dated: January 20, 1997
/s/ Lisa J. Vota
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Corporate Secretary
(Corporate Seal)
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$668,320.00 January 24, 1997
PROMISSORY NOTE
FOR VALUE RECEIVED, Berwyn Holdings, Inc.("Maker") at 1001 Jefferson Plaza,
Wilmington, Delaware 19801 promises to pay to the order of Dawcin International
Corp. or its assignees ("Payee") at 100 Garden City Plaza, Garden City, New York
11530 the principal sum of Six Hundred Sixty-Eight Thousand Three Hundred Twenty
($668,320.00) Dollars as follows:
Interest only payable quarterly at three (3%) percent per annum on the
original principal amount commencing from the date herein with the first
interest payment due three (3) months subsequent to this date; thereafter
commencing twelve (12) months from this date interest only at the lesser of six
(6%) percent per annum or prime rate as published by CitiBank New York payable
quarterly with the first payment due fifteen (15) months from this date at such
six (6%) percent or prime rate as the case may be; principal to be paid annually
within thirty (30) days of the close of the calendar year in an amount equal to
fifty (50%) percent of all net profits reported by the Maker in accordance with
the terms and defined by the terms of a certain stock purchase agreement dated
on or about January 23, 1997 between Dawcin International Corporation and
Century Financial Services, Inc.
Interest shall accrue and actually be paid quarterly on the declining
principal balance at the rate of six (6%) percent at all times subsequent to
twelve (12) months from the date herein.
Maker defaults in the payment of this Note, Payee may declare this Note due
and payable without further notice. In the event of a default by Maker, interest
shall accrue on the unpaid principal balance of this Note until repayment in
full of the Note at the maximum rate permitted under New York State Law.
Payee shall not be deemed, by any act or omission or commission, to have
waived any of its rights or remedies hereunder unless such waiver is in writing
and signed by Payee, and then only to the extent specifically set forth in
writing. A waiver on one event shall not be construed as continuing or as a bar
to or waiver of any right or remedy to a subsequent event.
This instrument shall be governed by and construed according to the laws of
the State of New York.
Whenever used, the singular shall include the plural, the plural the
singular, the use of any gender shall be applicable to all genders, and the
words "Payee" and "Maker" shall
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be deemed to include the respective heirs, personal representatives, successors
and assigns of Payees and Maker.
If any part of this NOTE is determined to be invalid or unenforceable under
New York law, then such part shall specifically NOT create any invalidity for
the remaining portion of this NOTE and such remaining portions shall be
considered and remain in full force and effect.
It is intended by the parties hereto that the rate of interest set forth
herein does not exceed the maximum rate of interest permitted by the laws of the
State of New York pursuant to the general obligations law, Section 5-501 as
amended as of this date and the rate as set forth in this document is not
intended to be more than the legal rate, anything to the contrary in this loan
document notwithstanding. If the rate of interest specified herein exceeds the
legal rate of 16% then the interest rate shall be amended to the maximum legal
rate, permitted under the law.
Maker waives grace, notice, demand, presentment for payment, protest,
notice of protest and all other notice, filing of suit and diligence in
collection of this Note. In the event this Note is not paid when due and is
placed in the hands of an attorney for collection, Maker promises to pay all
reasonable amounts actually incurred by Payee for court costs and attorneys'
fees in connection therewith.
Dated: January 24, 1997 MAKER
/s/ Harold Hendrickson
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Berwyn Holdings, Inc.
By: Harold Hendrickson
Its: President
Page 2 of 2
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CORPORATE RESOLUTION
At a meeting of the Board of Directors of Century Financial Services, Inc.,
conducted by telephonic communication, a quorum thereof having been present, and
thereat a motion having been made, seconded and caused, the following resolution
was adopted by an affirmative vote of the Directors therein present:
RESOLVED, that Douglas R. Baetz as Chief Executive Officer of Century Financial
Services, Inc., be authorized to approve, authorize and cause the sale of Berwyn
Holdings, a one hundred percent owned subsidiary of Dawcin. Mr. Baetz was
granted the authority to sign the documentation necessary to conclude this
transaction.
Dated: January 20, 1997
/s/ [ILLEGIBLE]
------------------------------
Corporate Secretary
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EXHIBIT 23
CONSENT OF INDEPENDENT AUDITOR
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GULIAN & COMPANY
Certified Public Accountants
62 West 47th Street
Suite 912
New York, New York 10036
(212) 730-5798
February 7, 1997
The Securities and Exchange Commission
450 Fifth Street NW
Washington, D.C. 20549
Consent of Certified Public Accountant
We have issued our reports dated September 25, 1996, relating to the
consolidated statements of financial position of Command Credit Corporation and
subsidiaries, currently known as Dawcin International Corp. pursuant to a name
change on October 16, 1996, at June 30, 1996 and 1995 and the related statements
of operations, changes in shareholders' equity, cash flows and supporting
schedules for the years ended June 30, 1996 and 1995. We consent to their use in
the Company's Form 8-K.
/s/ Gulian & Company
- --------------------------
Gulian & Company
New York, New York
February 7, 1997
