SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _)
Home Financing Centers, Inc.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
43708R 10 5
(CUSIP Number)
Gary J. Kovner
Home Financing Centers, Inc.
112-114 Burrill Street
Swampscott, MA01907-1808781-586-1992
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 31, 2000
(Date of Event which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ ].
CUSIP No. 43708R 10 5
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS [ENTITIES ONLY]
Gary J. Kovner
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e)
[ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S. Citizen
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NUMBER OF SHARES
BENEFICIALLY OWNED
BY EACH REPORTING
PERSON WITH
7 SOLE VOTING POWER
13,079,700
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8 SHARED VOTING POWER
-0-
------- ---------------------------------------------
9 SOLE DISPOSITIVE POWER
13,079,700
------- ---------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
13,079,700
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
69.4%
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14 TYPE OF REPORTING PERSON
IN
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Page 2 of 7
CUSIP No. 43708R 10 5
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Item 1. Security and Issuer.
The class of securities to which this statement on Schedule 13D relates is the
common stock, par value $0.001 per share, of Home Financing Centers, Inc., a
Nevada corporation (the "Company"), with its principal business address at
112-114 Burrill Street, Swampscott, MA01907.
Item 2. Identity and Background.
(a) This statement is filed by Gary J. Kovner ("Kovner").
(b) Kovner's business address is 112-114 Burrill Street, Swampscott,
MA01907.
(c) Kovner is President and Chairman of the Board of the Company.
(d) Kovner has not been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) during the
last five years.
(e) Kovner has not been a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction during the last five
years as a result of which any such person was or is subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws.
(f) Kovner is a U.S. citizen.
Page 3 of 7
CUSIP No. 43708R 10 5
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Item 3. Source and Amount of Funds or Other Consideration.
Upon incorporation on May 18, 1993, Home Financing Centers, Inc., a
Massachusetts corporation, sold 100 shares of its restricted common stock having
no par value to Kovner, President and Chairman of the Board, for $100.
On February 3, 2000, the Company acquired all 100 shares of the outstanding
equity of Home Financing Centers, Inc., a privately-held Massachusetts
corporation, from Kovner in exchange for 13,000,000 shares of the Company.
As a result of the transactions, Kovner became the controlling shareholder
of the Company.
In April 2000, the Company entered into transactions by which the Company
acquired approximately 97% of the outstanding capital of MAS Acquisition X Corp.
MAS Acquisition X Corp. was incorporated on October 7, 1996 in the State of
Indiana. MAS Acquisition X Corp. became a reporting company in June 1999 on
voluntary basis because its primary attraction as a merger partner or
acquisition vehicle will be its status as a reporting public company. MAS
Acquisition X Corp. had no material operations through February 2000. As a
result of the transactions, the Company became the parent company of MAS
Acquisition X Corp., and the sole director and officer of MAS Acquisition X
Corp. resigned and appointed Kovner to serve in those positions. The Company
elected to report as a successor to MAS Acquisition X Corp. under the Exchange
Act of 1934.
Kovner made certain purchases of the common stock of the Company in the
open market, as described below:
- On January 31, 2000, he bought 500 shares at $3.00 per share.
- On February 3, 2000, he bought 500 shares at $3.00 per share.
- On February 23, 2000, he bought 500 shares at $3.00 per share.
- On March 2, 2000, he bought 500 shares at $3.00 per share.
- On March 7, 2000, he bought 200 shares at $3.00 per share.
- On March 13, 2000, he bought 100 shares at $3.00 per share.
- On March 14, 2000, he bought 200 shares at $3.00 per share.
- On April 6, 2000, he bought 2,000 shares at $1.25 per share.
- On April 13, 2000, he bought 5,000 shares at $1.25 per share.
- On April 18, 2000, he bought 2,000 shares at $1.00 per share.
- On April 19, 2000, he bought 3,000 shares at $0.80 per share.
- On April 20, 2000, he bought 500 shares at $1.00 per share.
- On May 5, 2000, he bought 500 shares at $0.625 per share.
- On May 31, 2000, he bought 9,000 shares at $0.875 per sharet.
- On July 3, 2000, he bought 5,000 shares at $0.70 per share.
- On July 14, 2000, he bought 1,000 shares at $0.60 per share.
- On July 31, 2000, he bought 1,000 shares at $0.55 per share.
- On October 2, 2000, he bought 4,000 shares at $0.55 per share.
- On October 31, 2000, he bought 3,500 shares at $0.57 per share.
- On December 19, 2000, he bought 12,900 shares at $0.375 per share.
- On December 29, 2000, he bought 2,500 shares at $0.43 per share.
- On January 3, 2001, he bought 2,000 shares at $0.43 per share.
- On January 5, 2001, he bought 500 shares at $0.43 per share.
- On January 10, 2001, he bought 1,000 shares at $0.43 per share.
- On January 22, 2001, he bought 1,000 shares at $0.49 per share.
- On January 24, 2001, he bought 1,000 shares at $0.625 per share.
- On January 30, 2001, he bought 1,000 shares at $0.625 per share.
- On March 7, 2001, he bought 1,000 shares at $0.30 per share.
- On March 26, 2001, he bought 3,000 shares at $0.33 per share.
- On April 12, 2001, he bought 15,000 shares at $0.31 per share.
As of April 25, 2001, Kovner owned 13,079,700 shares of common stock of
the Company.
Page 4 of 7
CUSIP No. 43708R 10 5
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Item 4. Purpose of Transaction.
On February 2000, Kovner exchanged his 100 shares of Home Financing
Centers, Inc., a privately-held operating Massachusetts corporation, for
13,000,000 shares of the Company, a nonoperating Nevada corporation. The purpose
of Kovner's acquisition of the common stock of the Company was to acquire
control of the publicly-held entity.
In April 2000, the Company entered into transactions by which the Company
acquired approximately 97% of the outstanding capital of MAS Acquisition X
Corp., an Indiana corporation. The purpose of the transaction was to acquire
control of a publicly-held reporting entity. MAS Acquisition X Corp. became a
reporting company in June 1999 on voluntary basis. As a result of the
transactions, the Company became the parent company of MAS Acquisition X Corp.,
and the sole director and officer of MAS Acquisition X Corp. resigned and
appointed Kovner to serve in those positions. Following the transaction, the
Company elected to report as a successor to MAS Acquisition X Corp. under the
Exchange Act of 1934.
From January 2000 to April 2001, Kovner made purchases in the open market of an
aggregate of 79,700 shares of common stock, which represents less than one
percent of the Company's outstanding capital as of April 25, 2001. The purpose
of these purchases, which totals less than one percent of the Company's
outstanding capital, was for investment purposes.
Kovner may make further purchases of common stock from time to time, and he may
dispose of any or all of the shares of the common stock held by him at any time.
Except as set forth above in this Item 4, Kovner does not have any present plans
or proposals, which would relate to or result in any of the events or actions
described in clauses (a) through (j) of Item 4 of Schedule 13D. Nothing set
forth above should be interpreted to preclude Kovner from making any plans or
proposals which would related or result in any of the events or actions
described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) Kovner is the beneficial owner of 13,079,700 shares of common
stock of the Company, which represents 69.4% of the outstanding
common stock of the Company as of April 25, 2001.
(b) Kovner has the sole power to vote or direct the vote of and the
sole power to dispose or to direct the disposition of 13,079,700
shares of common stock Kovner does not have the shared power to
vote or to direct the vote of nor the shared power to dispose or to
direct the disposition of any other shares of common stock.
(c) Except as described above under Item 4, Kovner did not effect any
transactions in the common stock of the Company during the past 60
days.
(d) Not applicable.
(e) Not applicable.
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Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
The responses to Item 3 and Item 4 of this statement and the exhibits to this
statement are incorporated herein by reference.
Item 7. Material to Be Filed as Exhibits.
The following exhibits are filed with this statement:
Ex. 1 Plan and Agreement of Reorganization between Home Financing Centers,
Inc., a Nevada corporation and Home Financing Centers, Inc. a
Massachusetts corporation.
Ex. 2 Agreement between Home Financing Centers, Inc., a Nevada corporation,
and MAS Capital Inc.
Page 6 of 7
CUSIP No. 43708R 10 5
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
May 1, 2001
-------------------------------
Date
/s/ Gary J. Kovner
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Signature
Gary J. Kovner, Individually
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Name/Title
Page 7 of 7
INDEX TO EXHIBITS
Ex. 1 Plan and Agreement of Reorganization between Home Financing Centers,
Inc., a Nevada corporation and Home Financing Centers, Inc. a
Massachusetts corporation.
Ex. 2 Agreement between Home Financing Centers, Inc., a Nevada corporation,
and MAS Capital Inc.
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EX. 1
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PLAN AND AGREEMENT OF REORGANIZATION
BETWEEN
Home Financing Centers, Inc.
(a Nevada corporation)
AND
Home Financing Centers, Inc.
(a Massachusetts corporation)
This Plan and Agreement of Reorganization is entered into this 4th day of
January 5, 2000, by and between Home Financing Centers Corporation, a Nevada
corporation, hereafter referred to as "HFCI", and Home Financing Centers, Inc.,
a Massachusetts corporation and its shareholders, hereinafter referred to as
"HFC."
This Plan or Reorganization is within the meaning of Section 368 (a)(1)(B) of
the Internal Revenue Code of 1986, as amended, HFCI will acquire from the
shareholders of HFC, all of the issued end outstanding shares of HFC in return
for 13,000,000 shares of the authorized but unissued shares of HFCI. HFC will
then become and operate as a wholly owned subsidiary of HFCI.
AGREEMENT
In order to consummate such plan of reorganization, the parties hereto, in
consideration of the mutual agreements and on the basis of the representations
and warranties hereafter set forth, do hereby agree, as follows:
ARTICLE I
1.01. Transfer of HFC capital stock and consideration for transfer: Subject to
the terms and conditions of this Agreement, each HFC shareholder shall have
endorsed and delivered his or her certificate to Matthew Markin, Secretary of
HFCI, as Trustee, at the closing date, in exchange for the stated number of
shares of HFCI (subject to the provisions of Section 3(a)(9) of the Securities
Act of 1933, as amended) as set forth in 1.02 below.
1.02. Consideration for transfer to HFCI: On this the closing date, subject to
the terms and conditions of this Agreement, end in full consideration for the
transfer and delivery to HFCI of all the issued and outstanding shares of HFC.
HFCI shall cause to be delivered by its transfer agent, 13,000,000 shares of the
authorized but unissued capital stock of HFCI. Said HFCI shares shall be broken
down into individual names and amounts as requested in writing by Gary J.
Kovner, authorized agent for the HFC shareholders, and when issued, such shares
to be fully paid and nonassessable. Such shares shall not be free trading as
they are not at this time registered or covered by any exemption. Said shares
will be restricted in nature and said restriction shall be reflected on the face
of all certificates included in the HFCI shares.
ARTICLE II
2.01. Closing: The time of delivery by HFC stockholders of their respective
shares as provided in Paragraph 1.01 of this Agreement having already taken
place, said shares being held by Matthew Markin, as authorized agent, and the
certificate for 13,000,000 shares as authorized by the Board of Directors of
HFCI being in hand for delivery to Gary J. Kovner as authorized agent, closing
shall be effective with the signing of this Agreement. For purposes of record,
closing shall be effective as of the 4th day of January, 2000, l0 a.m. Eastern
Time.
ARTICLE III
3.01. Representations and Warranties by HFC:
(1) HFC is a corporation duly organized and validly existing and in good
standing under the laws of the State of Massachusetts. It has all requisite
corporate power and authority to carry on its business as now being conducted,
to enter into this Agreement and to carry out and perform the terms and
provisions of this Agreement. HFC is duly qualified, licensed, or domesticated
and in good standing as a foreign corporation authorized to do business in each
jurisdiction wherein the nature of its activities conducted or the character of
its properties make such qualification, licensing, or domestication necessary.
(2)(a) HFC is duly and lawfully authorized by its Articles of Incorporation, to
issue the shares of capital stock required by this Agreement; further, HFC has
no other authorized series or class of stock. All of the outstanding shares of
HFC's capital stock have been duly issued.
(b) HFC is not presently liable on account of any indebtedness for borrowed
monies, except as reflected on the Balance Sheet described in Subparagraph (4),
below.
(c) There are no outstanding subscriptions, options, warrants, calls, contracts,
demands, commitments, convertible securities, or other agreements or
arrangements of any character or nature whatsoever under which HFC is or may be
obligated to issue or purchase shares of its capital stock.
(3) Each HFC stockholder severally and for himself at the time of the Closing on
the Closing Date will be the lawful owner of the shares of the capital stock of
HFC held in his name, free and clear of all liens, claims and encumbrances of
every kind. Each stockholder has full legal right, power, and authority to sell,
assign, and transfer his shares of capital stock of HFC; and the delivery of
such shares to any person pursuant to the provisions of this Agreement will
transfer valid title thereto, free and clear of all liens, encumbrances and
claims of every kind.
(4) HFC has furnished HFCI with an unaudited Balance Sheet of HFC as of November30, 1999, hereinafter referred to as the Balance Sheet. Such financial statement
presents fairly the financial condition of HFC at such date. Specifically, but
not by way of limitation, the Balance Sheet discloses all of the debts,
liabilities, and obligations of any nature (whether absolute, accrued,
contingent, or otherwise, and whether due or to become due) of HFC at the date
thereof.
(5) HFC has not, since November 30, 1999:
(a) Incurred any obligations or liabilities, absolute, accrued, contingent, or
otherwise and whether due or to become due, except current liabilities incurred
in the ordinary course of business, none of which adversely affects the business
or prospects of HFC;
(b) Discharged or satisfied any liens or encumbrances, or paid any obligation or
liability, absolute, accrued, contingent or otherwise and whether due or to
become due, other than current liabilities shown on the Balance Sheet and
current liabilities incurred since the closing of business on the date of the
Balance Sheet, in each case, in the ordinary course of business;
(c) Decided or made any payment or distribution to its Stockholders or purchased
or redeemed, or obligated itself to purchase or redeem, any of its shares of
Capital Stock or other securities;
(d) Mortgaged, pledged, or subjected to lien, or other encumbrances or changes,
of its assets, tangible or intangible;
(e) Sold or transferred any of its assets except for inventory sold in the
ordinary course of business or canceled debt or claim;
(f) Suffered any damage, destruction, or loss (whether or not covered by
insurance) affecting the properties, business, or prospects of HFC, or waived
any rights of substantial value;
(g) Entered into any transaction other than in the ordinary course of business.
(6) There are no legal actions, suits, arbitrations, or other legal or
administrative proceedings pending against HFC which would affect it, its
properties, assets, or business. HFC is not in default with respect to any
judgment, order or decree of any government agency or instrumentality.
(7) HFC has good and marketable title to all of its properties and assets,
including without limitation those reflected in the Balance Sheet and those used
or located on property controlled by HFC in its business on the date of the
Balance Sheet and acquired thereafter (except assets sold in the ordinary course
of business), subject to no mortgage, pledge, lien, charge, security interest,
encumbrance, or restriction except those which (a) are disclosed on the Balance
Sheet as securing specified liabilities; (b) are disclosed in the Schedule of
Assets retorted to in Subparagraph 3.01 (8) hereof; or (c) do not materially
adversely affect the use thereof. The building and equipment of HFC are in good
condition and repair, reassemble wear and tear excepted. HFC has not been, to
the knowledge of any officer of HFC, threatened with any action or proceeding
under any building or zoning ordinance, regulation or law.
(8) Prior to Closing Date, HFC will have delivered to HFCI a separate Schedule
of Assets, specifically referring to this paragraph, containing:
(a) A true and complete aged list of accounts receivable (if any) as of a date
no earlier than the Closing Date.
(b) A true and complete list of all capitalized machinery, tools, equipment, and
rolling stock owned by HFC, setting forth all liens, claims, encumbrances,
charges, restrictions, covenants, and conditions.
(c) A complete schedule of all fire and other casualty and liability policies of
HFC in effect at the time of delivery of said schedule.
(9) HFC is not a party to, or otherwise bound by, any written or oral:
(a) Contract or agreement not made in the ordinary course of business;
(b) Lease with respect to any property, real or personal, whether as lessor or
lessee, except as reflected in the Balance Sheet,
(c) Contract or other commitment continuing for a period of more than thirty
days and which is not terminable without cost or other liability to HFC or its
successor except as shown on the Balance Sheet.
HFC has in all respects performed all obligations required to be performed by it
to date and is not in material default under any of the contracts, agreements,
leases, documents, or other arrangement to which it is a party or by which it is
otherwise bound.
(10) The books of account, minute books, stock certificate books, and stock
transfer ledgers of HFC are complete at Closing and also correct, and there have
been no transactions involving the business of HFC which properly should have
been set forth in said respective books, other then those set forth therein.
(11) Since the Balance Sheet there has not been any material adverse change in,
or event or condition materially and adversely affecting the condition
(financial or otherwise) of the properties, assets or liabilities of HFC,
3.02 HFCI represents and warrants to HFC and its stockholders as follows:
(1) HFCI is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Nevada.
(2) HFCI's authorized capital stock consists of 50,000,000 shares of common
stock and 5,000,000 shares of preferred stock, par value $.01. At the close of
this Agreement no more than 4,000,000 shares of common stock shall be validly
issued and outstanding which have been issued. This figure does not reflect the
shares beneficially issued to the shareholders of HFC under Rule 3(e)(9) of the
Securities Act of 1933 but does reflect the reverse stock dividend to be
announced by the Board of Directors of the corporation.
(3) The execution, delivery, and performance of this Agreement has been duly
authorized by all requisite corporate action. This Agreement constitutes a valid
and binding obligation of HFCI in accordance with its terms. No provision of the
Articles of Incorporation and any amendments thereto, by-laws and any amendments
thereto, or of any contract to which HFCI is a party or otherwise bound, which
prevents HFCI from delivering good title to its shares of such capital stock in
the manner contemplated hereunder.
(4) HFCI has furnished HFC and its shareholders with a statement of management,
and previous management, that there are no current assets and no liabilities,
and that the corporation, and its predecessor have had no activities in which it
could have incurred any liabilities since November 30, 1999.
(5) All of the 13,000,000 common shares to be issued to HFC shareholders will,
when so issued, be validly issued and outstanding, fully paid and nonassessable.
(6) Since the financial condition statement, there has not been any material or
adverse change in, or event or condition materially and adversely affecting the
condition of HFCI.
ARTICLE IV
4.01. HFC covenants that all statements made herein and hereto are true and
correct and may be relied upon by HFCI.
4.02. HFC covenants and warrants that all books, records and financial
statements employed or used in connection with this Agreement are true and
correct and that the right to examine same has been extended to HFCI and its
representatives.
4.03. Federal Securities Act--Unregistered Stock:
(1) Each HFC stockholder acknowledges that the shares of HFCI common stock to be
delivered to him pursuant to this Agreement have not and are not registered
under the 1933 Act, as amended, and that accordingly such stock is not fully
transferable except as permitted under various exemptions contained in the 1933
Act, and the rules of the Securities and Exchange Commission interpreting said
Act, The provisions contained in this paragraph are intended to ensure
compliance with the 1933 Act, as amended.
(2) Each HFC stockholder agrees that the certificates evidencing the shares he
will receive shall contain substantially the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND MAY NOT BE SOLD OR TRANSFERRED UNLESS THE SAME ARE REGISTERED UNDER THE
SECURITY ACT OF 1933, OR THE COMPANY RECEIVES AN OPINION FROM COUNSEL.
SATISFACTORY TO IT THAT SUCH REGISTRATION IS NOT REQUIRED FOR SALE OR TRANSFER
OR THAT THE SHARES HAVE BEEN LEGALLY SOLD IN BROKER TRANSACTIONS PURSUANT TO
RULE 144 OF THE RULES AND REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION
PROMULGATED UNDER SECURITY ACT OF 1933."
ARTICLE V
5.01. Conditions Precedent:
(1) The aggregate number of shares of the corporation's capital stock tendered
by the HFC stockholders at the closing shall constitute 100 percent of all
of the issued and outstanding Capital Stock of HFC.
ARTICLE VI
6.01. Paragraph and other headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
6.02. This Agreement shall be construed under and in accordance with the laws of
the State of Nevada.
6.03. This Agreement shall be binding on and inure to the benefit of and be
enforceable by the HFC shareholders and HFCI, their respective heirs, executors,
administrators, legal representatives, successors, and assigns except as
otherwise expressly provided herein.
6.04. Should there be any litigation arising from this transaction, the
prevailing party shall be entitled to recover reasonable attorney's fees from
the other party, which fees may be set by the court in the trial of such action
or may be enforced in a separate action brought for that purpose. These fees
shall be in addition to any other relief which may be awarded.
IN WITNESS WHEREOF, the parties hereto have executed this Plan and Agreement of
Reorganization on the date first set forth.
Home Financing Centers, Inc., a Nevada
Corporation
by:
--------------------------------
Matthew Markin, President
by:
--------------------------------
Matthew Markin, Secretary
Home Financing Centers, Inc., a
Massachusetts Corporation
by: /s/ Gary Kovner
--------------------------------
Gary Kovner, President
by: /s/ Gary Kovner
--------------------------------
Gary Kovner, Secretary
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EX. 2
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STOCK EXCHANGE AGREEMENT
Agreement dated as of April 26, 2000 between Mr. Edward DeFeudis
("EDDF") on the one hand, and MAS Capital Inc. ("MASC").
1. THE EXCHANGE.
1.1 Exchange Subject to the Terms and Conditions of this Agreement. At the
Closing to be held as provided in Section 2, MASC shall deliver the MAS X Shares
(defined below), free and clear of all Encumbrances other than restrictions
imposed by Federal and State securities laws. EDDF shall deliver HFCI Shares
(defined below) to MASC, free and clear of all Encumbrances without any
restrictions.
1.2 Exchange Ratio. EDDF will deliver 315,000 shares of common stock of Home
Financing Centers, Inc. ("HFCI")("HFCI Shares") to MASC for 8,250,000 shares of
MAS Acquisition X Corp. ("MAS X"), representing approximately 96.8% of the
issued and outstanding common shares of MAS X (the "MAS X Shares").
1.3 Third Party, EDDF has entered into a separate agreement with HFCI in which
HFCI shall acquire 8,250,000 MAS X Shares from EDDF.
2. THE CLOSING.
2.1 Place and Time. The closing of the sale the MAS X Shares (the "Closing")
shall take place at the office of MAS Acquisition X Corp., on later than the
close of business (Central time) on or before May 15, 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
HFCI for the benefit of EDDF:
1. Certificates representing the MAS X Shares, duly endorsed for transfer to
HFCI and accompanied by appropriate guaranteed stock powers; MASC shall deliver
to HFCI at the Closing, a certificate representing the MAS X Shares registered
in the name of HFCI (without any legend or other reference to any Encumbrance
other than appropriate federal securities law limitations).
2. 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 X's business reasonably requested by EDDF in connection with this
Agreement.
2.3 Deliveries by EDDF. At the Closing, EDDF shall deliver the following to
MASC:
1. Certificates representing the HFCI Shares, duly endorsed for transfer to MASC
and accompanied by appropriate guaranteed stock powers; EDDF shall deliver to
MASC at the Closing, a certificate representing the HFCI Shares registered in
the name of MASC (without any legend or other reference to any Encumbrance).
2. All other documents, instruments and writings required by this
Agreement to be delivered by EDDF at the Closing.
3. CONDITIONS TO EDDF'S OBLIGATIONS.
The obligations of EDDF 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 EDDF:
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 HFCI's acquisition
of the MAS X Shares or that will require any divestiture as a result of HFCI's
acquisition of the MAS X Shares or that will require all or any part of the
business of HFCI 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 HFCI or MAS X if this Agreement is consummated shall be
pending.
3.2 Representations, Warranties and Agreement. (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
HFCI's acquisition of the MAS X 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 X.
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 HFCI's acquisition
of the MAS X Shares or that will require any divestiture as a result of EDDF's
acquisition of the MAS X Shares or that will require all or any part of the
business of HFCI or MAS X 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 HFCI or MAS X if this Agreement is consummated shall be
pending.
4.2 Representations, Warranties and Agreements. (a) The representations and
warranties of EDDF 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)
EDDF 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
HFCI's acquisition of the MAS X Shares shall have been obtained and shall be in
full force and effect.
5. REPRESENTATIONS AND WARRANTIES OF MASC.
MASC represents and warrants to EDDF that, to the knowledge of MASC,
and except as set forth in an MAS X 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 X consists of 80,000,000
authorized shares of stock, par value $.001, and 20,000,000 preferred shares,
par value $.001, of which 8,519,800 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 any outstanding warrants, options
or other agreements on the part of MAS X obligating MAS X to issue any
additional shares of common or preferred stock or any of its securities of any
kind.
5.3 Ownership of MAS X Shares. The delivery of certificates to HFCI provided in
Section 2.2 will result in HFCI's immediate acquisition of record and beneficial
ownership of the MAS X 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 Government
Body is required to be made or obtained by MAS X or HFCI or any of its
Subsidiaries in connection with the execution, delivery and performance of this
Agreement by MAS X or the consummation of the sale of the MAS X Shares to HFCI.
5.5 Financial Statements. MAS X has delivered to EDDF the balance sheet of MAS X
as at March 31, 1999 and December 31, 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 X's
independent accountant (the "MAS X Financial Statements"). The MAS X Financial
Statements are accurate and complete in accordance with generally accepted
accounting principles. The independent accountants for MAS X will furnish any
and all work papers required by HFCI and will sign any and all consent required
to be signed to include the financial statements of HFCI in any subsequent
filing by HFCI.
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 X which is likely to have a material adverse effect on
the business or financial condition of MAS X.
5.7 Absence of Certain Changes. Since the date of the MAS X Financial
Statements, MAS X 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 X 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;
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;
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 X.
5.8 No Material Adverse Change. Since the date of the MAS X Financial
Statements, there has not been any material adverse change in the business or
financial condition of MAS X.
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 X Shares to EDDF.
6. REPRESENTATIONS AND WARRANTIES OF EDDF.
EDDF represents and warrants to MASC that, to the Knowledge of EDDF
(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 HFCI; Authorization. HFCI is a corporation duly organized,
validly existing and in good standing under the laws of Nevada with full
corporate power and authority to execute and deliver the 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
EDDF and this Agreement constitutes a valid and binding obligation of EDDF;
enforceable against it in accordance with its terms.
6.2 Capitalization. The authorized capital stock of HFCI consists of 50,000,000
authorized shares of common stock of which 17,030,000 shares are presently
issued and outstanding.
6.3 Ownership of HFCI shares. The delivery of certificates to MASC provided in
Section 2.2 will result MASC's immediate acquisition of record and beneficial
ownership of the HFCI Shares, free and clear of all Encumbrances.
6.2 No Conflict as to HFCI 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 HFCI 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 HFCI or any of its Subsidiaries under, any material
agreement or commitment to which HFCI 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 HFCI 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 HFCI 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 HFCI and its Subsidiaries,
taken as a whole.
6.4 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 HFCI or any of either of their
Subsidiaries in connection with the execution, delivery and performance of this
Agreement by HFCI.
6.5 Other Consents. No consent of any Person is required to be obtained by MAS X
or HFCI 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 X or HFCI.
6.6 Financial Statements. After closing, EDDF ackwledge and agrees that within
15 days from the effective date of this agreement, EDDF shall have caused HFCI
to file on Form 8-K which includes two years of audited and unaudited
consolidated financial statements of HFCI. Such HFCI Financial Statements and
notes shall fairly present the financial condition and results of operations of
HFCI 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.
6.7 Brokers or Finders. EDDF 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 X Shares.
7. CONDUCT OF MAS X'S BUSINESS PRIOR TO THE CLOSING. MASC shall use its best
efforts to ensure the following:
7.1 Operation in Ordinary Course. Between the date of this Agreement and the
Closing Date, MAS X shall cause conduct its business in all material respects in
the ordinary course.
7.2 Business Organization. Between the date of this Agreement and the Closing
Date, MAS X shall (a) preserve substantially intact the business organization of
MAS X; and (b) preserve in all material respects the present business
relationships and good will of MAS X.
7.3 Corporate Organization. Between the date of this Agreement and the Closing
Date, MAS X 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;
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 X 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.
7.4 Other Restrictions. Between the date of this Agreement and the Closing Date,
MAS X 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 material 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 EDDF, MAS X 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 liabilities or obligations
reflected in the MAS X Financial Statements or incurred in the ordinary course
of business and consistent with past practice since the date of the MAS X
Financial Statements; or
8. cancel any material debts or waive any material claims or rights.
8. DEFINITIONS.
As used in this Agreement, the following terms have the meanings
specified or referred to in this Section 9.
8.1 "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.
8.2 "Code" = The Internal Revenue Code of 1986, as amended.
8.3 "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.
8.4 "Equity Securities" = See Rule 3aB11B1 under the Securities Exchange Act of
1934.
8.5 "ERISA" = The Employee Retirement Income Security Act of 1974, as amended.
8.6 "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.
8.7 "Knowledge" = Actual knowledge, after reasonable investigation.
8.8 "Person" = Any individual, corporation, partnership, joint venture, trust,
association, unincorporated organization, other entity, or Governmental Body.
8.9 "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.
9. TERMINATION
9.1 Termination. This Agreement may be terminated before the Closing occurs only
as follows:
1. By MASC at any time on or before May 5, 2000, if 315,000 HFCI Shares is not
received by MASC at MASC's brokerage account.
2. By EDDF, 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 EDDF 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.
9.2 Effect of Termination. If this Agreement is terminated pursuant to Section
9.1, this Agreement shall terminate without any liability or further obligation
of any party to another.
10. 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 EDDF:
c/o Mr. Edward DeFeudis
Home Financing Centers, Inc.
112-114 Burrill Street
Swampscott, MA01907
Phone: (781) 596-1992
Facsimile No.: (781) 598-5981
(b) If to MASC:
1710 E. Division St.
Evansville, IN47711
Facsimile No.: (812) 479-7266
Attention: Aaron Tsai, President
11. MISCELLANEOUS.
11.1 Expenses. Each party shall bear its own expenses incident to the
preparation, negotiation, execution and delivery of this Agreement and the
performance of its bligations hereunder.
11.2 Captions. The captions in this Agreement are for the convenience of
reference only and shall not be given any effect in the interpretation of this
agreement.
11.3 No Waiver. The failure of a party to insist upon strict adherence to any
term of his 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.
11.4 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.
11.5 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.
11.6 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.
11.7 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 X or the MASC shall
be needed in connection with any merger or consolidation of MAS X with or into
HFCI.
IN WITNESS WHEREOF, the corporate parties hereto have caused this
Agreement to be executed by themselves or by their respective officers, hereunto
duly authorized, and entered into as of the date first above written.
/s/ Mr. Edward DeFeudis
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By: Edward DeFeudis, Personally
MAS CAPITAL, INC.
/s/ Aaron Tsai
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By: Aaron Tsai, President
Dates Referenced Herein and Documents Incorporated by Reference
