SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 29,
1999
AUDIOGENESIS SYSTEMS, INC.
(Exact name of registrant as specified in charter)
New Jersey 000-24991 22-3487471
(State or other (Commission (IRS Employer
jurisdiction File Number) Identification No.)
of incorporation)
7 Doig Road, Suite 3
Wayne, New Jersey 07470
(Address of principal executive offices)
Registrant's telephone number, including area code (973) 696-9400
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On June 29, 1999, Audiogenesis, the VCU Intellectual Property
Foundation and Virginia Commonwealth University (VCU-IPF/VCU)
mutually agreed to the termination of the Echolocation License
between VCU-IPF/VCU and Audiogenesis. Audiogenesis agreed to pay to
VCU-IPF $10,000 pursuant to the Agreement in consideration for the
termination of its obligations under the license.
ITEM 5. OTHER EVENTS.
On June 30, 1999, Audiogenesis Systems, Inc. entered into a Stock
Purchase Agreement and Plan of Reorganization with Allstates Air
Cargo, Inc. and its sole shareholder whereby Audiogenesis shall
acquire 100% of Allstates Air Cargo, Inc. The consideration to be
paid to Allstates' sole shareholder is 18,000,000 shares of common
stock of Audiogenesis, plus the assumption by Audiogenesis of the
obligation of the sole shareholder of Allstates to pay, in
installments, $2,560,000 to the estate of a former stockholder of
Allstates pursuant to a certain Buy-Sell Agreement. The Stock
Purchase Agreement is subject to the approval of a majority of
Audiogenesis shareholders.
Audiogenesis initially was comprised of two main segments of
business; a safety products sales division and a safety training
division. In recent years, Audiogenesis had focused its business on
the development of two devices; a device for the treatment of
tinnitus (ringing in the ears) and an ultrasonic echolocation device
which is intended to provide information to the visually impaired
and to sighted persons in situations of low visibility concerning
their immediate surroundings. In view of the refocus of the
Company's business pursuant to the Allstates agreement, the Company
has determined to discontinue development of the echolocation
device, and as set forth in Item 2 above, has terminated the
Echolocation License between VCU-IPF/VCU and Audiogenesis.
Allstates Air Cargo, Inc. is in the business of providing freight
forwarding services. Allstates provides domestic and international
freight forwarding services to over 1,300 customers utilizing ground
transportation, commercial air carriers, and ocean carriers.
Allstates operates 20 branch offices throughout the United States,
including Hawaii. Its corporate office is located in Forked River,
New Jersey. In addition, Allstates has 2 European branch offices
located in London, England and Brussels, Belgium that do business as
Allstates Allcargo (UK), Ltd. and Allstates Allcargo Belgium N.V.
respectively. The London, England operation is a wholly owned
subsidiary of Allstates Air Cargo, Inc. The operation in Brussels,
Belgium is a strategic alliance. Allstates employs approximately
100 people.
Certain statements made in this Form 8-K are "forward looking
statements". Without limiting the generality of the foregoing, such
information can be identified by the use of forward-looking
terminology such as "anticipate", "will", "would", "expect",
"intend", "plans to" or "believes", or other variations thereon, or
comparable terminology. Actual results, performance or developments
may differ materially from those expressed or implied by such
forward-looking statements as a result of market uncertainties or
industry factors. Some important factors that may cause actual
results that differ materially from those in any forward-looking
statements may include the availability of future financing when
needed, market acceptance of Allstates products and services ,
competitive pressures, and the ability to attract and retain key
executive sales and management personnel. Audiogenesis disclaims
any obligation or responsibility to update any such forward-looking
statements.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired.
As of the date of filing this Report on Form 8-K, it is
impracticable for the Registrant to provide the financial statements
required by this item 7(a). The financial statements required by
this item 7(a), shall be filed by amendment to this Form 8-K not
later than sixty days after the date of this initial report on Form
8-K.
(b) Pro Forma Financial Information
As of the date of filing this Report on Form 8-K, it is
impracticable for the Registrant to provide the pro forma financial
information required by this item 7(b). The pro forma financial
information required by this item 7(b), shall be filed by amendment
to this Form 8-K not later than sixty days after the date of this
initial report on Form 8-K.
(c) Exhibits
10.05 Stock Purchase Agreement and Plan of
Reorganization
dated June 30, 1999
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.
Audiogenesis Systems, Inc.
/s/ Sam DiGiralomo
DATED: July 9, 1999
By: Sam DiGiralomo
President
EXHIBIT 10.05
STOCK PURCHASE AGREEMENT
AND
PLAN OF REORGANIZATION
BETWEEN
ALLSTATES AIR CARGO, INC.
AND
AUDIOGENESIS SYSTEMS, INC.
<PAGE>
TABLE OF CONTENTS
1. Recitals. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Sale and Purchase of Stock. . . . . . . . . . . . . . . . . . . 1
3. Consideration.. . . . . . . . . . . . . . . . . . . . . . . . . 1
4. Exchange of Shares. . . . . . . . . . . . . . . . . . . . . . . 2
5. Representations and Warranties of Audiogenesis. . . . . . . . . 2
a. Organization and Qualification.. . . . . . . . . . . . . . 2
b. Capitalization.. . . . . . . . . . . . . . . . . . . . . . 2
c. Authority Relative to this Agreement.. . . . . . . . . . . 2
d. Validity of Shares.. . . . . . . . . . . . . . . . . . . . 3
e. Financial. . . . . . . . . . . . . . . . . . . . . . . . . 3
f. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
g. Lawsuits and Claims. . . . . . . . . . . . . . . . . . . . 5
h. Agreements, Contracts and Commitments. . . . . . . . . . . 5
i. No Breach of Statute or Contract; Governmental
Authorizations.. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
j. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
l. Resignations.. . . . . . . . . . . . . . . . . . . . . . . 7
m. Change of Name.. . . . . . . . . . . . . . . . . . . . . . 7
6. Representations and Warranties of Guido and Allstates.. . . . . 7
a. Organization and Qualification.. . . . . . . . . . . . . . 7
b. Capitalization.. . . . . . . . . . . . . . . . . . . . . . 7
c. Authority Relative to this Agreement.. . . . . . . . . . . 8
d. Financial. . . . . . . . . . . . . . . . . . . . . . . . . 8
e. Lawsuits and Claims. . . . . . . . . . . . . . . . . . . . 9
f. Taxes.. . . . . . . . . . . . . . . . . . . . . . . . . .10
g. Assets of Allstates. . . . . . . . . . . . . . . . . . . .10
h. Agreements, Contracts and Commitments. . . . . . . . . . .10
i. No Breach of Statute or Contract; Governmental
Authorizations.. . . . . . . . . . . . . . . . . . . . . . . . . . .11
j. Brokers' Fees. . . . . . . . . . . . . . . . . . . . . . .12
k. Investment Representation. . . . . . . . . . . . . . . . .12
7. Conduct and Transactions Prior to Closing.. . . . . . . . . . .12
a. Investigations; Operation of Business of Allstates.. . . .12
b. General. . . . . . . . . . . . . . . . . . . . . . . . . .14
c. Notices and Consents.. . . . . . . . . . . . . . . . . . .14
d. Regulatory Matters and Approvals.. . . . . . . . . . . . .15
e. Stockholder Approval.. . . . . . . . . . . . . . . . . . .15
8. Conditions to Obligation to Close.. . . . . . . . . . . . . . .15
a. Conditions to Obligation of Audiogenesis.. . . . . . . . .15
b. Conditions to Obligation of Allstates. . . . . . . . . . .16
9. Deliveries. . . . . . . . . . . . . . . . . . . . . . . . . . .16
10. Miscellaneous.. . . . . . . . . . . . . . . . . . . . . . . . .17
a. Reciprocal Indemnifications. . . . . . . . . . . . . . . .17
b. Assignment.. . . . . . . . . . . . . . . . . . . . . . . .17
c. Press Releases and Public Announcements. . . . . . . . . .17
d. Governing Law - Jurisdiction.. . . . . . . . . . . . . . .17
e. Notice.. . . . . . . . . . . . . . . . . . . . . . . . . .17
f. Severability.. . . . . . . . . . . . . . . . . . . . . . .18
g. Expenses.. . . . . . . . . . . . . . . . . . . . . . . . .18
h. Construction.. . . . . . . . . . . . . . . . . . . . . . .18
i. Incorporation of Exhibits and Schedules. . . . . . . . . .19
j. Section Heading. . . . . . . . . . . . . . . . . . . . . .19
k. Entire Agreement.. . . . . . . . . . . . . . . . . . . . .19
l. Waivers - Amendments. . . . . . . . . . . . . . . . . . .19
m. Counterparts. . . . . . . . . . . . . . . . . . . . . . .19
o. Venue. . . . . . . . . . . . . . . . . . . . . . . . . . .19
11. Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . .21
<PAGE>
STOCK PURCHASE AGREEMENT
AND
PLAN OF REORGANIZATION
THIS AGREEMENT, being made this 30th day of June
,
1999 by and between AUDIOGENESIS SYSTEMS, INC., a New Jersey
corporation,
whose main address is 7 Doig Road, Suite 3, Wayne, New Jersey, 07470
(hereinafter referred to as "Audiogenesis"); and ALLSTATES AIR
CARGO, INC.,
a New Jersey corporation whose main address is 4 Lakeside Drive
South, PO
Box 959, Forked River, New Jersey 08731 (hereinafter referred to as
"Allstates"); and JOSEPH GUIDO, sole shareholder of ALLSTATES AIR
CARGO,<PAGE>
INC. (hereinafter referred to as "Guido").
1. Recitals. Guido is the owner of all of the issued and
outstanding
shares of the capital stock of Allstates ("the Allstates Shares").
Audiogenesis wishes to purchase from Guido, and Guido wishes to sell to
Audiogenesis, the Allstates Shares upon the terms and conditions
hereinafter
set forth. Accordingly, in consideration of the mutual covenants
contained
herein and intending to be legally bound hereby, the parties hereto
agree as
hereinafter set forth.
2. Sale and Purchase of Stock.
a. Guido hereby agrees to sell, assign, transfer and
deliver
and does hereby sell, assign, transfer and deliver to Audiogenesis, and
Audiogenesis agrees to purchase, acquire and accept from Guido, and
does
hereby purchase, acquire and accept from Guido, upon the terms and
conditions set forth in this Agreement, complete, absolute and
unencumbered
right, title and interest in and to the Allstates Shares.
b. Provided, however, that ____101_______ shares of
Allstates
owned by Guido are held in escrow pursuant to a certain Stock Escrow
Agreement dated April 23, 1996. Guido assigns to Audiogenesis and
Audiogenesis accepts all Guido's rights and obligations pursuant to
such
agreement and to the underlying shares pursuant to such agreement.
3. Consideration.
The consideration to be paid to Guido in exchange for the sale,
transfer, assignment and delivery of the Allstates Shares as set
forth in
Section 2 above is 18,000,000 common shares of the common stock of
Audiogenesis, plus the assumption by Audiogenesis of the obligation
of Guido
to pay $2,560,000 to the Estate of Albert G. Hoffman, Jr. pursuant
to a
certain Buy-Sell Agreement dated December 30, 1975 ("Purchase Price").
4. Exchange of Shares.
At Closing as hereafter defined, Audiogenesis shall deliver to
Guido, in accordance with written instructions from Guido,
18,000,000 shares
of the common stock of Audiogenesis.
5. Representations and Warranties of Audiogenesis.
Audiogenesis represents and warrants to Allstates as follows:
a. Organization and Qualification. Audiogenesis is a
corporation duly organized, validly existing and in good standing
under the
laws of the State of New Jersey, and has the requisite corporate
power to
carry on its business as it is now being conducted. Audiogenesis is
not
qualified as a foreign corporation to do business in any other
state, and
the character of its properties owned or leased or the nature of its
activities makes such qualification unnecessary.
b. Capitalization. The authorized capital stock of
Audiogenesis consists of 50,000,000 Shares, par value per share. As
of the
execution of this Agreement, there are 14,109,872 Shares validly
issued,
fully paid and nonassessable. Additionally, Audiogenesis has reserved
448,000 shares of its common stock for possible issuance to the
holders of
options granted by Genesis Safety Systems, Inc. which remained
outstanding
after the acquisition of Oil Baltija Group, Ltd. by that company.
Pursuant
to the anti-dilution provisions of such options, such shares will be
issued
to the option holders at no additional cost, and with no additional
consideration to Audiogenesis, but only in the event that such option
holders exercise their options in Oil Baltija Group, Ltd. at
exercise prices
ranging from $5 to $12.50 per share. Except as provided on Exhibit
5.b and
the obligation of Audiogenesis to issue Shares hereunder, there will
be no
other options, warrants or other rights, agreements or commitments
(contingent or otherwise) obligating Audiogenesis to issue shares of
its
capital stock.
c. Authority Relative to this Agreement. Audiogenesis
has the
requisite corporate power and authority to enter into this Agreement
and to
carry out its obligations hereunder. The execution and delivery of
this
Agreement and the consummation of the transactions contemplated
hereby have
been duly authorized by the Board of Directors of Audiogenesis and,
other
than approval by the Shareholders at a meeting to be duly called for
such
purposes, no other corporate proceedings on the part of Audiogenesis
are
necessary to authorize this transaction and the transactions
contemplated
hereby. This Agreement has been duly and validly executed and
delivered by
Audiogenesis and, assuming this Agreement constitutes a valid and
binding
obligation of Guido and Allstates, this Agreement constitutes a
valid and
binding agreement of Audiogenesis, enforceable against Audiogenesis in
accordance with its terms. Audiogenesis is not subject to or obligated
under any charter, by-law or contract provision or any license,
franchise or
permit, or any order or decree, which would be breached or<PAGE>
violated or in respect of which a right of acceleration would be
created by
its executing and carrying out this Agreement, other than any such
breach,
violation or right which will not have a material adverse effect on
Audiogenesis.
d. Validity of Shares. At Closing, the issuance and
delivery
by Audiogenesis of the Audiogenesis Common Stock in connection with
this
Agreement will have been duly and validly authorized by all necessary
corporate action on the part of Audiogenesis. The shares of
Audiogenesis
Common Stock to be issued to Guido will, when issued, be validly
issued,
fully paid and nonassessable.
e. Financial.
i. Audiogenesis has previously furnished Allstates
with a Form
10SB, which includes the audited financial statements of
Audiogenesis as of
September 30, 1998, and with a Form 10-QSB for the period ending
March 31,
1999, which contains unaudited financial statements of Audiogenesis
as of
March 31, 1999 (the "Financial Statements"). The Financial
Statements have
been prepared in conformity with generally accepted accounting
principles
applied on a basis consistent during the period. The Financial
Statements
present fairly the financial position of Audiogenesis. For the
purposes of
this Agreement, all financial statements of Audiogenesis shall be
deemed to
include any notes to such financial statements.
ii. Audiogenesis has no liabilities or obligations, either
accrued, absolute, contingent, or otherwise, which are material to
Audiogenesis and which have not been:
(1) reflected in the Financial Statements; or
(2) specifically described in any of the
schedules
furnished by Audiogenesis pursuant to this Agreement; or
(3) incurred, consistent with past practices,
in or as
a result of the ordinary course of business since September 30, 1998.
iii. There are no pending or threatened claims (including,
without limitation, product liability claims) against or liabilities or
obligations of Audiogenesis and there is no legal basis for any of such
claims, except as expressly disclosed by this Agreement or the
schedules
submitted by Audiogenesis pursuant hereto.
iv. Except as set forth in Exhibit 5.e.iv hereto between
September 30, 1998 and the date of this Agreement Audiogenesis has not
engaged in any material transaction not in the ordinary course of its
business and, except as set forth in such Exhibit 5.e.iv hereto,
there has
not been, occurred or arisen:
(1) any material adverse change in the
business or
financial conditions of Audiogenesis from that shown on the Balance
Sheet; or
(2) any damage or destruction in the nature of a
casualty loss, whether covered by insurance or not, materially and
adversely
affecting the properties or business of Audiogenesis; or
(3) any waiver by Audiogenesis of any rights of
substantial value which singly or in the aggregate are material to
Audiogenesis; or
(4) any borrowing of money or any commitment
to borrow
money by Audiogenesis; or
(5) any other event, conditions or state of
facts of
any character which materially and adversely affects, or, to the
best of the
knowledge of Audiogenesis, threatens to materially and adversely
affect, the
business or results of operations or financial condition of
Audiogenesis.
v. Set forth on Exhibit 5.e.v. hereto, is the
compensation
payable or to become payable by Audiogenesis to officers, directors of
Audiogenesis or salaried employees of or consultants to
Audiogenesis, if any.
f. Filings with the SEC. Audiogenesis has made all
filings
with the SEC that it has been required to make under the Securities
Act and
the Securities Exchange Act of 1934 (the "Exchange Act")
(collectively, the
"Public Reports"). Each of the Public Reports has complied with the
Securities Act and the Exchange Act in all material respects. None
of the
Public Reports, as of their respective dates, contained any untrue
statement
of a material fact or omitted to state a material fact necessary in
order to
make the statements made therein, in light of the circumstances
under which
they were made, false or misleading. Audiogenesis has delivered to
Allstates a correct and complete copy of each Public Report
(together with
all claims and schedules thereto and as amended to date).
g. Lawsuits and Claims. There is no action, at law or in
equity, arbitration, proceeding, claim,<PAGE>
governmental proceeding or investigation pending or, to the best of
Audiogenesis's knowledge after reasonable investigation, threatened
against
Audiogenesis or against any business or assets of Audiogenesis.
Audiogenesis is not in default with respect to any decree,
injunction or
other order of any court or governmental authority.
h. Agreements, Contracts and Commitments.
i. Except as set forth in Exhibit 5.h.i hereto,
Audiogenesis
is not a party to:
(1) any collective bargaining agreement,
(2) any bonus, deferred compensation, pension,
profit-sharing, or retirement plan or other arrangement,
(3) any employment or other agreement,
contract, or
commitment requiring Audiogenesis to pay any employee more than
$10,000 a
year or severance pay in excess of four weeks' salary,
(4) any agreement of guarantee or indemnification
(except as provided in the articles of incorporation and by-laws of
Audiogenesis) which involves, singly or together with other such
agreements,
a potential material liability,
(5) any agreement, contract, or commitment
which, to
the best of the knowledge of Audiogenesis, might reasonably be
expected to
have a potential material adverse impact on the business, financial
condition or earnings of Audiogenesis,
(6) any agreement, contract or commitment
containing
any covenant limiting the freedom of Audiogenesis to engage in any
line of
business in any area of the world or to compete with any person,
(7) any agreement, contract, or commitment
relating to
capital expenditures and involving future payments,
(8) any agreement, contract, or commitment
(other than
leases of real property) relating to the acquisition of assets or
capital
stock of any business enterprise,
(9) any transaction, understanding, agreement or
contract with an officer, director, employee, or shareholder, or any
affiliate thereof,
(10) any agreement, contract, or commitment which
involves $50,000 or more, or
(11) any other agreement or contract which
Audiogenesis
would be required to file with the Securities and Exchange Commission
("SEC") as an exhibit were Audiogenesis to file with the SEC on the
date
hereof a registration statement on Form S-1 covering securities to be
offered by Audiogenesis to the public.
ii. To the best of the knowledge of Audiogenesis,
Audiogenesis
has not in any material respect breached, nor to the best of the
knowledge
of Audiogenesis is there any pending or threatened claim or any
legal basis
for a claim that Audiogenesis has breached, any of the terms or
conditions
of
(1) any agreement contract or commitment set
forth in
any of the schedules hereto, or
(2) any other agreement, contract or
commitment, the
breach or breaches of which singly or in the aggregate could result
in the
imposition of damages in an amount material to Audiogenesis.
i. No Breach of Statute or Contract; Governmental
Authorizations. Except as otherwise provided for or contemplated in
this
Agreement, neither the execution and delivery of this Agreement nor
the Plan
of Reorganization by Audiogenesis, will breach any statute or
regulation of
any governmental authority, domestic or foreign, or will conflict
with or
result in a breach of any of the terms, conditions or provisions of any
judgment, order, injunction, decree or ruling of any court or
governmental
authority, domestic or foreign, to which Audiogenesis is subject or
of any
agreement or instrument to which Audiogenesis is a party or by which
it is
bound, or constitute a material default thereunder, or give to
others any
interest or rights, including rights of termination or cancellation,
in or
with respect to any of the properties, assets, agreements, contracts or
business of Audiogenesis.
j. Taxes. Audiogenesis has filed all United States
income tax
and information returns and all state and local tax returns
(collectively
referred to herein as "Tax Returns") which are required to be filed
and has
paid, or made provision for the payment of, all taxes (including,
without
limitation, all federal, state or local income, property, sales, use,
excise, franchise, employment, withholding or similar taxes and all
interest, additions and penalties thereon or with respect thereto
("taxes")
which have or may have become due pursuant to said returns, pursuant
to any
assessment received by Audiogenesis, or otherwise payable pursuant to
applicable law.
k. Brokers' Fees. Audiogenesis does not have any
liability or
obligation to pay any fees or commissions to any broker, finder, or
agent
with respect to the transactions contemplated by this Agreement for
which
any of Allstates and its subsidiaries could become liable or obligated.
l. Resignations. Simultaneously with the Closing,
Robert R.
Guinta will resign as an officer and a director of Audiogenesis, and
Joseph
Guido, Barton Theile and Craig Stratton will be added to the board of
directors of Audiogenesis.
m. Change of Name. Prior to Closing, Audiogenesis
agrees to
submit to the Shareholders approval of an Amendment to the
Certificate of
Incorporation to change its name to ALLSTATES WORLD CARGO, INC., or
such
other name as Allstates shall deem appropriate.
6. Representations and Warranties of Guido and Allstates.
Guido and Allstates, jointly and severally, represent and
warrant as
follows:
a. Organization and Qualification. Allstates is a
corporation
duly organized, validly existing and in good standing under the laws
of the
State of New Jersey and has the requisite corporate power to carry
on its
business as it is now being conducted. Allstates is duly qualified
as a
foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or leased
or the
nature of its activities makes such qualification necessary.
b. Capitalization. The authorized capital stock of
Allstates
consists of 1,000 shares of common stock, no par value, of which
210 shares
have been or will be issued and outstanding and or reserved prior to
Closing. There are no Options, Warrants or other rights, agreements or
commitments (contingent or otherwise) obligating Allstates to issue
additional shares of its capital stock.
c. Authority Relative to this Agreement. Allstates
has the
requisite corporate power and authority to enter into this Agreement
and to
carry out its obligations hereunder. The execution and delivery of
this
Agreement and the consummation of the Agreements contemplated hereby
have
been duly authorized by the Board of Directors of Allstates and
Guido and,
no other corporate proceedings on the part of Allstates are
necessary to
authorize this Agreement and the Agreements contemplated hereby. This
Agreement has been duly and validly executed and delivered by
Allstates and,
assuming this Agreement constitutes a valid and binding obligation of
Audiogenesis, this Agreement constitutes a valid and binding
agreement of
Allstates and Guido, enforceable against them, respectively in
accordance
with its terms. Allstates is not subject to or obligated under any
charter,
by-law or contract provision or any license, franchise or permit, or
any
order or decree, which would be breached or violated or in respect
of which
a right of acceleration would be created by its executing and
carrying out
this Agreement, other than any such breach, violation or right which
will
not have a material adverse effect on Allstates.
d. Financial.
i. Allstates has previously furnished Audiogenesis
true and
complete copies of the audited balance sheet and income statements of
Allstates as of 9/30/98 and 9/30/98. All such financial
statements
have been prepared in conformity with generally accepted accounting
principles applied on a basis consistent during the period. Such
financial
statements present fairly the financial position of Allstates. For the
purposes of this Agreement, all financial statements of Allstates
shall be
deemed to include any notes to such financial statements.
ii. Allstates has no liabilities or obligations, either
accrued, absolute, contingent, or otherwise, which are material to
Allstates
and which have not been:
(1) reflected in the balance sheet of
Allstates as of
{date} ; or
(2) specifically described in any of the
schedules
furnished to Audiogenesis pursuant to this Agreement; or
(3) incurred, consistent with past practices,
in or as
a result of the ordinary course of business since 9/30/98 .
iii. There are no pending or threatened claims (including,
without limitation, product liability claims or environmental claims
[either
as owner or tenant]) against or liabilities or obligations of
Allstates and
there is no legal basis for any of such claims, except as expressly
disclosed by this Agreement or the schedules submitted by Allstates
pursuant
hereto.
iv. Between 9/30/98 and the date of this Agreement
Allstates has not engaged in any material transaction not in the
ordinary
course of its business and, except as set forth in such Exhibit 6.e.iv.
hereto, there has not been, occurred or arisen:
(1) any material adverse change in the
business or
financial conditions of Allstates from that shown on the Balance
Sheet; or
(2) any damage or destruction in the nature of a
casualty loss, whether covered by insurance or not, materially and
adversely
affecting the properties or business of Allstates; or
(3) any waiver by Allstates of any rights of
substantial value which singly or in the aggregate are material to
Allstates; or
(4) any borrowing of money or many commitment to
borrow money by Allstates; or
(5) any other event, conditions or state of
facts of
any character which materially and adversely affects, or, to the
best of the
knowledge of Allstates, threatens to materially and adversely
affect, the
business or results of operations or financial condition of Allstates.
v. Set forth on Exhibit 6.e.v. hereto, is the
compensation
payable or to become payable by Allstates to officers, directors of
Allstates or salaried employees of or consultants to Allstates.
e. Lawsuits and Claims. There is no action, at law or in
equity, arbitration, proceeding, claim, governmental proceeding or
investigation pending or, to the best of Allstates's knowledge after
reasonable investigation, threatened against Allstates or against any
business or assets of Allstates. Allstates is not in default with
respect
to any decree, injunction or other order of any court or
governmental
authority.
f. Taxes. Allstates has filed all United States
income tax
and information returns and all state and local tax returns
(collectively
referred to herein as "Tax Returns") which are required to be filed
and has
paid, or made provision for the payment of, all taxes (including,
without
limitation, all federal, state or local income, property, sales, use,
excise, franchise, employment, withholding or similar taxes and all
interest, additions and penalties thereon or with respect thereto
("taxes")
which have or may have become due pursuant to said returns, pursuant
to any
assessment received by Allstates, or otherwise payable pursuant to
applicable law.
g. Assets of Allstates. Allstates and Guido represent
and
warrant that at the time of Closing Allstates will have full right,
title
and ownership to the assets set forth on the balance sheet and
financial
statements as of 9/30/98 , all of which assets will remain the
property
of Allstates at the time of Closing.
h. Agreements, Contracts and Commitments.
i. Except as set forth in Exhibit 6.i.i hereto,
Allstates is
not a party to:
(1) any collective bargaining agreement,
(2) any bonus, deferred compensation, pension,
profit-sharing, or retirement plan or other arrangement,
(3) any employment or other agreement,
contract, or
commitment requiring Allstates to pay any employee more than $10,000
a year
or any severance pay in excess of four weeks' salary,
(4) any agreement of guarantee or indemnification
which involves, singly or together with other such agreements, a
potential
material liability,
(5) any agreement, contract, or commitment
which, to
the best of the knowledge of Allstates, might reasonably be expected
to have
a potential material adverse impact on the business, financial
condition or
earnings of Allstates,
(6) any agreement, contract or commitment
containing
any covenant limiting the freedom of Allstates to engage in any line of
business in any area of the world or to compete with any person,
(7) any agreement, contract, or commitment
relating to
capital expenditures and involving future payments,
(8) any agreement, contract, or commitment
(other than
leases of real property) relating to the acquisition of assets or
capital
stock of any business enterprise,
(9) any transaction, understanding, agreement or
contract with an officer, director, employee, or shareholder, or any
affiliate thereof,
(10) any agreement, contract, or commitment which
involves $500,000 or more, or
(11) any other agreement or contract which
Allstates
would be required to file with the Securities and Exchange Commission
("SEC") as an exhibit were Allstates to file with the SEC on the
date hereof
a registration statement on Form S-1 covering securities to be
offered by
Allstates to the public.
ii. To the best of the knowledge of Allstates,
Allstates has
not in any material respect breached, nor to the best of the
knowledge of
Allstates is there any pending or threatened claim or any legal
basis for a
claim that Allstates has breached, any of the terms or conditions of
(1) any agreement contract or commitment set
forth in
any of the schedules hereto, or
(2) any other agreement, contract or
commitment, the
breach or breaches of which singly or in the aggregate could result
in the
imposition of damages in an amount material to Allstates.
i. No Breach of Statute or Contract; Governmental
Authorizations.
i. Except as otherwise provided for or contemplated in
this
Agreement, neither the execution and delivery of this Agreement or the
Certificate and Plan of Merger by Allstates, nor compliance by
Allstates
with the terms and provisions of this Agreement or the Certificate of
Merger, will breach any statue or regulation of any governmental
authority,
domestic or foreign, or will at the time of filing or the Effective
Time
conflict with or result in a breach of any of the terms, conditions or
provisions of any judgment, order, injunction, decree or ruling of
any court
or governmental authority, domestic or foreign, to which Allstates is
subject or of any agreement or instrument to which Allstates is a
party or
by which it is bound, or constitute a material default thereunder,
or give
to others any interest or rights, including rights of termination or
cancellation, in or with respect to any of the properties, assets,
agreements, contracts or business of Allstates.
ii. To the best of Allstates's knowledge, Allstates
has not
violated, and is not in violation of, any law, statue, rule,
governmental
regulation, or order, which violation might have a material adverse
effect
on the business, financial condition or earnings of Allstates.
j. Brokers' Fees. Allstates does not have any
liability or
obligation to pay any fees or commissions to any broker, finder or
agent
with respect to the transactions contemplated by this Agreement.
k. Investment Representation. The Shares being
acquired by
Guido hereunder are being acquired for investment purposes only and
not with
a view towards resale or redistribution and that no person or entity
has any
beneficial interests in such shares except Guido. The Shares being
acquired
have not been registered under the Securities Act of 1933 as amended
and
Guido acknowledges and agrees that he may not sell, offer, transfer,
hypothecate or convey such shares except pursuant to a registration
statement pursuant to the Act or an exemption therefrom. Such
shares shall
be issued with the following legend and shall be subject to a stock
transfer
order delivered by the Company to the transfer agent, such legend to
be as
follows:
The shares represented by this certificate have not been
registered
with the Securities and Exchange Commission under the
Securities Act
of 1933, as amended. The shares have been acquired for
investment
and may not be sold, transferred, assigned, pledged or
hypothecated
in the absence of an effective registration for these shares
under
such Act or an opinion of the Company's counsel that such
registration is not required under said Act.
7. Conduct and Transactions Prior to Closing.
a. Investigations; Operation of Business of Allstates.
Between the date of this Agreement and the Closing Date:
i. Audiogenesis and Allstates each agrees to give to
the other
and the authorized representatives of the other full access to all the
premises and books and records of it and to furnish the other with such
financial and operating data and other information with respect to the
business and properties of it as the other shall from time-to-time
request;
provided, however, that any such investigation shall not affect any
of the
representations and warranties hereunder; and provided further, that
any
such investigation shall be conducted in such manner as not to
interfere
unreasonably with the operation of the business of the other. In
the event
of termination of this Agreement, Audiogenesis and Allstates will each
return to the other all documents, work papers and other material
obtained
from the other in connection with the transactions contemplated
hereby and
will use all reasonable efforts to keep confidential any information
obtained pursuant to this Agreement unless such information is readily
ascertainable from public or published information or trade sources.
ii. Allstates will use its best efforts to preserve
intact the
business organization of Allstates, to keep available to it the
services of
its present officers and employees, to preserve its present
relationships
with persons having significant business relations with it, to
maintain all
of its properties in customary repair and condition and to maintain
insurance policies in respect of its business and properties
consistent with
current practice.
iii. The Parties shall conduct their business only in the
ordinary course and, by way of amplification and not limitation,
except as
disclosed will not without the prior written consent of the other
parties to
this Agreement:
(1) issue any capital stock (except pursuant
to the
exercise of stock options granted under Employee Incentive Stock Option
Plans or other options previously granted), or any options,
warrants, or
other rights to subscribe for or purchase any capital stock or any
securities convertible into or exchangeable for capital stock, or
(2) declare, set aside, or pay any dividend or
distribution with respect to their capital stock, or
(3) directly or indirectly redeem, purchase, or
otherwise acquire any capital stock or
(4) effect a split, reclassification, or other
change
in or of any capital stock, or
(5) change the Certificate of Incorporation or
Bylaws,
or
(6) grant any material increase (except increases
given in accordance with prior practice) in the compensation payable
or to
become payable to officers or salaried employees or in any bonus,
insurance,
pension or other benefit plan, payment or arrangement made to, for
or with
any such officers or employees, or
(7) borrow or agree to borrow any funds except
in the
ordinary course of business or directly or indirectly guarantee or
agree to
guarantee the obligations of others, or
(8) enter into any agreement, contract or
commitment
which, if entered into prior to the date of this Agreement, would be
required to be listed in a schedule pursuant to the terms of this
Agreement
except as contemplated in such schedules, or
(9) except in the ordinary course of business,
place
or suffer to exist on any of its assets or properties any mortgage,
pledge,
lien, charge, or other encumbrance, or
(10) except in the ordinary course of business,
cancel
any indebtedness owing or any claims which they may have possessed
or waive
any rights of substantial value, or
(11) sell, assign, or transfer any patents,
trademarks,
trade names, copyrights, formulae, or other intangible assets, or
(12) sell or otherwise dispose of any interest in
property, or
(13) commit any act or omit to do any act which
will
cause a material breach of any agreement, contract or commitment
which is
listed in a schedule pursuant to the terms of this Agreement, or is
entered
into subsequent to the date hereof with the prior written consent of
the
other party which will have a material adverse effect on their
business,
financial condition, or earnings, or
(14) violate any law, statue, rule, governmental
regulation, or order, which violation might have a material adverse
effect
on their business, financial condition, or earnings.
b. General. Each of the Parties will use its
reasonable best
efforts to take all action and to do all thin necessary, proper, or
advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not
waiver, of
the closing conditions set forth in Section 9 below).
c. Notices and Consents. Allstates will use its
reasonable
best efforts (and will cause each of its Subsidiaries to use its
reasonable
best efforts) to obtain any third party consents, that Audiogenesis
reasonably may request.
d. Regulatory Matters and Approvals. Each of the
parties will
give any notices to, make any filings with, and use its reasonable best
efforts to obtain any authorizations, consents and approvals of
governments
and governmental agencies in connection with the matters referred to
in this
Agreement.
e. Stockholder Approval. Audiogenesis will call a
special
meeting of its stockholders (the "Special Audiogenesis Meeting") as
soon as
reasonably practicable in order that the stockholders may consider
and vote
upon the adoption of this Agreement and the approval of the
Acquisition in
accordance with New Jersey corporation law. Provided, however, this
Agreement may be adopted and the acquisition approved by the consent of
shareholders owning a majority of its common stock. Audiogenesis
will mail
a disclosure document to its stockholders as soon as reasonably
practicable.
8. Conditions to Obligation to Close.
a. Conditions to Obligation of Audiogenesis. The
obligation
of Audiogenesis to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the following
conditions:
i. this Agreement and the Acquisition shall have
received the
requisite Audiogenesis Stockholder approval;
ii. the representations and warranties set forth in this
Agreement shall be true and correct in all material respects at and
as of
the Closing Date;
iii. Allstates shall have performed and complied with
all of its
covenants hereunder in all material respects through the Closing;
iv. no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative
agency of
any federal, state, local, or foreign jurisdiction or before any
arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling, or
charge would (A) prevent consummation of any of the transactions
contemplated by this Agreement, (B) cause any of the transactions
contemplated by this Agreement to be rescinded following
consummation, and
(C) affect adversely the right of Audiogenesis to own the Acquired
Assets,
to operate the business of Allstates.
v. all actions to be taken by Allstates in connection
with
consummation of the transactions contemplated hereby and all
certificates,
opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in
form and
substance to Audiogenesis.
Audiogenesis may waive any condition specified in this
Section 8a if
it executes a writing so stating at or prior to the Closing.
b. Conditions to Obligation of Allstates. The
obligation of
Allstates to consummate the transactions to be performed by it in
connection
with the Closing is subject to satisfaction of the following
conditions:
i. this Agreement and the Acquisition shall have
received the
requisite Audiogenesis stockholder approval, if necessary;
ii. Audiogenesis shall have performed and complied with
all of
its covenants hereunder in all material respects through the Closing;
iii. all actions to be taken by Audiogenesis in
connection with
consummation of the transactions contemplated hereby and all
certificates,
opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in
form and
substance to Allstates.
Allstates may waive any condition specified in this Section
8b if it
executes a writing so stating at or prior to the Closing.
9. Deliveries.
At Closing:
a. Audiogenesis shall deliver to Guido certificates
representing 18,000,000 shares of its authorized and unissued common
stock
registered in accordance with the written instructions from Guido.
b. Guido shall deliver to Audiogenesis certificates
representing the issued and outstanding capital stock of Allstates
owned by
Guido, with stock powers duly endorsed in blank, subject to the
terms of
that certain Stock Escrow Agreement referenced in Section2 hereof,
and that
certain Buy-Sell Agreement referenced in Section3 hereof.
c. Audiogenesis shall deliver to Guido an opinion of
Audiogenesis' counsel that: (i) at Closing, the issuance and
delivery by
Audiogenesis of Audiogenesis Shares in connection with this
Agreement will
have been duly and validly authorized by all necessary corporate
action on
the part of Audiogenesis; and (ii) the shares of Audiogenesis Shares
to be
issued to Guido will, when issued, be validly issued, fully paid and
nonassessable.
d. At Closing, the issuance and delivery by Allstates of
Allstates Shares in connection with this Agreement will have been
duly and
validly authorized by all necessary corporate action on the part of
Allstates. The Allstates Shares to be issued to Audiogenesis will,
when
issued, be validly issued, fully paid and nonassessable.
10. Miscellaneous.
a. Reciprocal Indemnifications. The parties hereby
agree to
indemnify each other for any damages sustained by the other party
due to any
material breach or misrepresentation involved in this Agreement.
b. Assignment. This Agreement may not be assigned by
either
party without the express written consent of the other party.
c. Press Releases and Public Announcements. No Party
shall
issue any press release or make any public announcement relating to the
subject matter of this Agreement [prior to the Closing] without the
prior
written approval of the other Party; provided, however, that any
Party may
make any public disclosure it believes in good faith is required by
applicable law or any listing or trading agreement concerning its
publicly-traded securities (in which case the disclosing Party will
use its
reasonable best efforts to advise the other Party prior to making
the
disclosure).
d. Governing Law - Jurisdiction. This Agreement shall be
construed and enforced in accordance with the internal laws of the
State of
New Jersey.
e. Notice. Any notice, request, instruction or other
document
or communication required or permitted to be given under this Agreement
shall be in writing and shall be sufficiently given if delivered in
person
or deposited in the United States mail, postage prepaid, for mailing BY
certified or registered mail, return receipt requested, as follows:
If to Audiogenesis delivered or addressed to:
Sam DiGiralomo, President
AUDIOGENESIS SYSTEMS, INC.
7 Doig Road, Suite 3
Wayne, NJ 07470
and with copies to:
Stephen M. Robinson, Esq.
172 Tuckerton Road
Medford, New Jersey 08055
If to Allstates or Guido delivered or addressed to:
Joseph Guido, President
ALLSTATES AIR CARGO, INC.
4 Lakeside Drive South, PO Box 959
Forked River, New Jersey 08731
and with copies to:
Alexander W. Booth, Esq.
Brownstein, Booth & Barry
512 42nd
Union City, NJ 07087
or to such other address or addresses as may be specified from time
to time
by said party by like notice.
f. Severability. Any term or provision of this
Agreement that
is invalid or unenforceable in any situation in any jurisdiction
shall not
affect the validity or enforceability of the remaining terms and
provisions
hereof or the validity or enforceability of the offending term or
provision
in any other situation or in any other jurisdiction.
g. Expenses. Each of the parties will bear its own
costs and
expenses (including legal fees and expenses) incurred in connection
with
this Agreement and the transactions contemplated hereby.
h. Construction. The Parties have participated jointly
in the
negotiation and drafting of this Agreement. In the event an
ambiguity or
question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the Parties and no presumption or
burden
of proof shall arise favoring or disfavoring any Party by virtue of the
authorship of any of the provisions of this Agreement. Any reference
to any
federal, state, local, or foreign statute or law shall be deemed
also to
refer to all rules and regulations promulgated thereunder, unless the
context requires otherwise. The word "including" shall mean including
without limitation. i. Incorporation of Exhibits and
Schedules.
The Exhibits and Schedules identified in this Agreement are
incorporated
herein by reference and made a part hereof.
j. Section Heading. Section headings as to the
contents of
particular sections and subsections are for convenience only and are
in no
way to be construed as part of this Agreement or as a limitation of the
scope of the particular sections or subsections to which they refer.
k. Entire Agreement. This Agreement and the Exhibits,
Schedules and Attachments hereto and other agreements and documents
referenced herein constitute the entire agreement and understanding
of the
parties hereto with respect to the matters herein set forth, and all
prior
negotiations and understandings relating to the subject matter of this
Agreement are merged herein and are superseded and canceled by this
Agreement.
l. Waivers - Amendments. Any of the terms or
conditions of
this Agreement may be waived in writing at any time by the party
which is
entitled to the benefit thereof or may be amended or modified in
whole or in
part at any time by an agreement in writing, executed in the same
manner as
this Agreement.
m. Counterparts. This Agreement may be executed in
any number
of counterparts, including counterparts transmitted by telecopier or
FAX,
any one of which shall constitute an original of this Agreement. When
counterparts of facsimile copies have been executed by all parties,
they
shall have the same effect as if the signature to each counterpart
or copy
whereupon the document and copies of such documents shall be deemed
valid as
originals. The parties agree that all such signatures may be
transferred to
a single document upon the request of any party.
n. Closing. The Closing shall take place by exchange of
documents effective on the day following the approval of the within
transaction by the Audiogenesis shareholders, which is anticipated
to be on
or about July __30th__, 1999. The "Closing" or "Closing Date" shall
be defined
as the actual date of Closing, as set forth above.
o. Venue. Any action, suit, or proceeding arising out
of, based
on, or in connection with this Agreement may be brought only in the
Superior
Court of New Jersey, Burlington County, or the United States
District Court
for the Southern District of New Jersey, and each party covenants
and agrees
not to assert, by way of motion, as a defense, or otherwise in any such
action, suit, or proceeding, any claim that it or he is not subject
personally to the jurisdiction of such court, that its or his
property is
exempt or immune from attachment or execution, that the action,
suit, or
proceeding is brought in an inconvenient forum, that the venue of the
action, suit, or proceeding is improper, or that this Agreement or the
subject matter hereof may not be enforced in or by such court.<PAGE>
11. Signatures.
IN WITNESS WHEREOF, this instrument has been executed by the
parties
hereto as of the day and year first above written.
AUDIOGENESIS SYSTEMS, INC.
By: /s/ Sam DiGiralomo
Sam DiGiralomo, President
ALLSTATES AIR CARGO, INC.
By: /s/ Joseph Guido
Joseph Guido, President
AGREED AND CONSENTED TO:
/s/ Joseph Guido
Joseph Guido, Individually
as sole shareholder of
Allstates Air Cargo, Inc.
<PAGE>
EXHIBIT 5.B
OPTIONS, WARRANTS OR OTHER RIGHTS, AGREEMENTS OR COMMITMENTS
OF AUDIOGENESIS
None<PAGE>
EXHIBIT 5.E.IV
MATERIAL TRANSACTIONS OF AUDIOGENESIS
NONE<PAGE>
EXHIBIT 5.E.V
COMPENSATION OF OFFICERS & DIRECTORS OF AUDIOGENESIS
Sam DiGiralomo, President and CEO of Audiogenesis, receives $65,000
per year
for services rendered to Audiogenesis on a part-time basis.<PAGE>
EXHIBIT 5.H.I
MATERIAL CONTRACTS OF AUDIOGENESIS
Echolocation Agreement - agreement between Genesis and the Center for
Innovative Technology (CIT), a corporation organized under the laws
of the
Commonwealth of Virginia, dated June 14, 1994, subsequently
assigned by
mutual consent by Virginia Commonwealth University/IPF to Audiogenesis
Systems, Inc.
Purchase Order from Lederle Laboratories Division of American Cyanamid
Company to Audiogenesis, dated April 19, 1999, $200,000
<PAGE>
EXHIBIT 6.E.IV
MATERIAL ADVERSE CHANGES TO ALLSTATES
<PAGE>
EXHIBIT 6.E.V
COMPENSATION OF OFFICERS & DIRECTORS OF ALLSTATES
<PAGE>
EXHIBIT 6.I.I
MATERIAL AGREEMENTS OF ALLSTATES
