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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 5, 1999
Airtrax, Inc.
(Exact name of Registrant as specified in charter)
New Jersey 0-25791 22-3506376
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
1616 Pennsylvania Avenue, #122, Vineland 08361
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (856) 327-8112
MAS Acquisition IX Corp.
1710 E. Division St.
Evansville, Indiana 47711
(Former name or former address, if changed, since last report)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
(a) Pursuant to an Agreement and Plan of Merger ("Merger Agreement")
dated November 5, 1999 between MAS Acquisition IX Corp. ("MAS"), an
Indiana corporation, and AirTrax, Inc., a New Jersey corporation
("AirTrax" or "Company"), all of the issued and outstanding shares of
capital stock of MAS were exchanged for 114,867 shares of AirTrax.
AirTrax shall be the surviving company in the merger. The effective
date of the merger was November 19, 1999.
The Merger Agreement was adopted by the unanimous consent of the Board
of Directors of MAS and approved by the majority of shareholders of MAS
on November 5, 1999. The Merger Agreement was adopted by the unanimous
consent of the Board of Directors of AirTrax and by consent of a
majority of shareholders of AirTrax on November 5, 1999.
Prior to the merger, MAS had 8,519,800 shares of common stock issued and
outstanding that were exchanged for 114,867 shares of common stock of
AirTrax. Pursuant to the merger, AirTrax acquired all of the issued and
outstanding shares of capital stock of MAS.
Prior to the merger, AirTrax had 4,196,311 shares of common stock issued
and outstanding, and 275,000 shares of a series of preferred stock
("Preferred Stock") issued and outstanding, no par value. Each share of
Preferred Stock is entitled to 10 voting rights on all matters on which
shareholders are entitled to vote. The Preferred Stock has a stated
value per share of $5.00 and an annual dividend per share equal to 5% of
the stated value. Dividends are cumulative and the holder has a right to
waive any cash dividend and receive the dividend in the form of common
stock at a price per share equal to 30% of the last offering or trading
price of the common stock. The Preferred Stock has a preference over
common stockholders upon liquidation equal to the stated value per
share. The Preferred Stock is not convertible to common stock.
Upon effectiveness of the merger, AirTrax will have 4,311,178 shares of
common stock outstanding.
The officers of AirTrax will continue as the officers of the successor
issuer (see "Management" below). The officers, directors, by-laws and
certificate of incorporation, as amended, of AirTrax will continue
without change as the officers, directors, by-laws and certificate of
incorporation, as amended, of the successor issuer.
A copy of Merger Agreement is included herein as exhibit to this Form 8-
K and such exhibit modifies the foregoing description.
(b) The following table contains information regarding the shareholders
of AirTrax, its current directors and executive officers and those
persons or entities who beneficially own more than 5% of its common
stock and Preferred Stock:
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<TABLE>
<CAPTION>
Preferred Percentage of Percentage of
Common Stock Stock Common Stock Preferred Stock
Stock Beneficially Voting Beneficially Beneficially
Name Owned(1) Rights(2) Owned Owned
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Peter Amico
President and
Chairman 1,695,737 2,750,000(3) 40.41% 100%
D. Barney Harris 62,500 -0- 1.49% -0-
Vice President and
Director
Frank Basile 190,000 -0- 4.53% -0-
Director
James Hudson 71,000(4) -0- 1.69% -0-
Director
John Watt Jr. 103,000 -0- 2.45% -0-
Secretary and
Director
All directors 2,122,237 2,750,000 50.57% 100%
and executive
officers as a
group (5 persons)
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</TABLE>
(1). Based on 4,196,311 outstanding shares of common stock (prior to the
effectiveness of the merger), excluding, however shares of common stock
issuable to the holder of the Preferred Stock (see "Item 2 - Executive
Compensation").
(2). Based upon 275,000 outstanding shares of Preferred Stock after
giving effect to the 10 for 1 voting rights.
(3). Represents 275,000 shares of Preferred Stock held by Arcon Corp., a
corporation wholly owned by Mr. Amico.
(4). Includes shares held by an affiliate of Mr. Hudson.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) The consideration exchanged pursuant to the Merger Agreement was
negotiated in an arms length transaction between the parties. In
evaluating AirTrax as a candidate for the merger, MAS considered the
omni-directional technology of AirTrax and the products to be introduced
by AirTrax. Both parties determined the considerations reasonable.
(b). The plan of operations of AirTrax provides for the further
development and commercial sale of the omni-directional wheel technology
(see "Business" below).
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BUSINESS
Background
AirTrax is a development stage company that has developed an omni-
directional wheel technology for various applications. AirTrax was
incorporated in the State of New Jersey on April 17, 1997. On May 19,
1997, the Company entered into a merger agreement with a predecessor
company and became the surviving company in the merger.
An early stage omni-directional wheel was patented by a Swedish inventor
and was purchased by the United States Navy and the technology was
advanced at the Naval Surface Warfare Center. The Navy held the patent
until its expiration in 1990. In January 1996, the Company's predecessor
entered into a Cooperative Research and Development Agreement ("CRADA")
with the United States Navy to transfer the omni-directional wheel
technology to the predecessor. Since CRADA, the Company has advanced the
development of the technology for its various applications including use
on forklifts and other material handling equipment.
Although the original patent for the omni-directional wheel expired, the
Company has filed a patent with the United States Patent and Trademark
Office encompassing certain other aspects of the technology.
Description of Technology.
An omni-directional vehicle employing the Company's patent pending
technology is capable of traveling in any direction. On a four-wheel
omni-directional vehicle, each omni-directional wheel has its own
independent electric or hydraulic motor and the motion of the vehicle is
controlled by coordinating all four wheels through a microprocessor that
receives imput from an operator-controlled joystick. Unlike most
vehicles, there is no conventional drive train, axle, or steering rack.
The basis of the Company's omni-directional technology consists
primarily of a mobile platform with four omni-directional wheels. Each
wheel has its own electric or hydraulic motor that turns a wheel hub.
However, the wheel hub is not covered by a conventional rubber tire.
Rather, each wheel hub is encircled with multiple elliptical (keg-
shaped) rollers that are offset 45 degrees. The elliptical rollers,
fabricated from urethane, are extremely durable. By independently
controlling the rotation of each wheel, the vehicle has the capability
of traveling in any direction. The joystick controls the direction of
the vehicle. The technology allows the vehicle to move forward,
laterally, diagonally, or completely rotate within its own footprint,
thereby allowing it to move into confined spaces without difficulty. The
navigational options of an omni-directional vehicle are virtually
limitless. The omni-directional wheel can be manufactured in almost any
size, depending upon the application. For instance, the wheel can be
used on miniature vehicles or massive load-carrying vehicles. Omni-
directional technology has been incorporated into prototype vehicles
that perform the following functions: carrying hazardous materials,
remote fire fighting, weapons loading, and general forklift uses. The
technology can be employed in any type of vehicle that requires superior
navigational capabilities.
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Current Operations.
The Company has completed the development of a commercial omni-
directional forklift. The forklift has been extensively tested
internally by the Company and is awaiting further testing by
Underwriters Laboratory and to meet the standards of the American
National Standards Institute. Following this testing period which is
anticipated to be completed in December 1999, the Company will commence
the commercial production and sale of this product (see "Risk Factors").
The forklift will be available in the ATX, ATX-E and ATX-ER series with
3000 through 6000 pound capacities. Each series is briefly described
below.
ATX Series. This series will feature the revolutionary omni-directional
technology. This forklift will deliver unequaled maneuverability
providing significantly improved operating efficiencies in the materials
handling industry. This model is expected to retail at prices
competitive with existing forklifts.
ATX-E Series. In addition to the omni-directional technology, this
series permits the upper section of the forklift to extend and retract.
This feature effectively reduces the overall dimensions of the machine
while carrying a load to approximately 6 feet 6 inches enabling it to
traverse a seven-foot aisle sideways.
ATX-ER Series. In addition to the omni-directional technology and the
extend/retract feature, the upper section of this series can rotate
allowing loads to be transferred from one side to the other while the
forklift remains stationary.
The Company intends to develop other applications of its omni-
directional technology. These applications include an omni-directional
wheel chair and an omni-directional device for military equipment
handling (see "Risk Factors").
Recently, the Company was awarded a Phase I research contract under the
Department of Defense's Small Business Innovation Research Program to
develop an omni directional Multiple Purpose Mobility Platform (MP2).
The Phase I contract studied the application of an omni-directional
material handling device proposed to be developed by the Company for the
installation of jet engines and munitions on military aircrafts and was
supervised by the Naval Air Warfare Center Aircraft Division (NAWC) in
Lakehurst, New Jersey. The Company recently completed the Phase I
contract, and subsequently was advised that NAWC has recommended it for
a Phase I continuation contract and a Phase II research contract. The
total amount of a contract, if awarded to the Company, will not exceed
$780,000. The Phase II contract, if any, will further study the
feasibility of an omni-directional device for military purposes, and
likely will include the construction of a proto-type device. Although
management believes the underlying omni directional technology for the
proposed MP2 has significant potential for both commercial and military
applications, no assurances can be given.
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The Company has conducted a preliminary design of an omni-directional
wheel for wheelchair applications. It will require additional funds to
complete a structural and ergonomic design of a proto-type wheelchair,
as well as the construction of the proto-type for test purposes.
Although management recognizes the potential utilitarian benefit and
corresponding market size of an omni-directional wheelchair, no
assurances can be given that the product can be developed by the
Company.
Suppliers.
The Company has entered into an arrangement with a manufacturer to
produce the forklift and other omni-directional products. However, the
Company may establish its own manufacturing facility in the future if
economically advantageous. The components of the Company's forklifts
consist of over the counter products and products that have been
specially designed and manufactured by various suppliers in
collaboration with the Company. The Company considers these specially
designed and manufactured products proprietary and has entered into
exclusive contractual agreements with such suppliers. In addition, while
the Company maintains single sources for the over the counter
components, it believes that other sources are available if necessary.
Marketing.
The Company will establish an exclusive dealer network nationally and
internationally for its forklift product line. Each dealer likely will
be an existing equipment distributor, and will be granted an exclusive
territory. In addition, each dealer will be required to purchase a
number of forklifts commensurate with the size of its territory. To
date, the Company has conducted limited dealer solicitation. The Company
will initiate its dealer solicitation following the successful testing
of its forklift. In addition, the Company is in negotiations with a
lending source to provide a financing alternative for distributors (see
"Risk Factors").
Markets.
The Company believes the commercial version of the omni-directional
forklift will revolutionize the materials handling and warehousing
industries creating sales markets globally (see "Risk Factors"). The
market for the ATX series is anticipated to be significant based on the
sale and use of forklifts worldwide. In the United States alone, it is
estimated that 1,000,000 forklifts are in commercial use today, and in
1998 over 174,000 were sold domestically. The US market represents
approximately 35% of the worldwide market. In addition, the Company
believes the United States military represents a significant market for
omni-directional forklifts and other materials handling equipment.
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Competition.
Although the Company will not confront direct competition for its omni-
directional technology, it anticipates that it may face competition from
competing technologies in the future. In the immediate future, however,
the Company will confront competition from conventional products in the
materials handling and warehousing industry (ie. other forklift
companies). Many of these companies are subsidiaries of major national
and international equipment companies, and have significantly greater
financial, engineering, marketing and other resources than the Company.
In addition, the patent on omni-directional technology expired in 1990.
Although the Company has sought patent protection for certain other
aspects of its technology, no assurances can be given that such patent
protection will effectively thwart competition.
Patents and Proprietary Rights.
In December 1997, the Company received a patent for a omni-directional
helicopter ground-handling device. In March 1998, the Company filed a
patent encompassing certain other aspects of the technology applicable
to omni-directional forklift (see "Risk Factors").
The Company also seeks to protect its proprietary technology through
exclusive supply contracts with manufacturers for specially designed and
manufactured components.
PROPERTY
The Company maintains its administrative offices at 1616 Pennsylvania
Avenue, #122, Vineland, New Jersey 08361 on premises owned by the
president of the Company. To date, the arrangement between the parties
has been rent-free.
MARKET FOR AIRTRAX'S SECURITIES
Prior to the merger, the Company has been a non-reporting company with
certain of its securities exempt from registration under Regulation D
promulgated under the Securities Act of 1993, as amended. The Company's
common stock has traded on the National Quotation Bureau's "Pink
Sheets". There is an absence of an established trading market for the
Company's common stock, as the market is limited, sporadic and highly
volatile.
As a result of the merger, the Company has elected to become a successor
issuer and successor reporting company to MAS and intends to immediately
file for listing of its common stock on the NASDAQ OTC Bulletin Board.
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<TABLE>
<CAPTION>
OFFICERS AND DIRECTORS
Name Age Title
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<S> <C> <C>
Peter Amico 55 President and Chairman
D. Barney Harris 37 Vice President and Director
John Watt Jr. 62 Secretary and Director
Frank Basile, Esq. 63 Director
James Hudson 55 Director
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Peter Amico - Mr. Amico is the founder of the Company and has been
President and Chairman of the Company and its predecessor since its
inception in April 1995. Prior to 1995, Mr. Amico was president and
majority shareholder of Titan Aviation and Helicopter Services, Inc.
("Titan"). He has an extensive background in sales and in structural
design. His career in sales has spanned over thirty years and he has
held sales positions at Firestone Tire & Rubber and Union Steel
Products, Inc. In 1996 and in connection with operations of Titan, Mr.
Amico filed for bankruptcy protection.
D. Barney Harris - Mr. Harris has been a Director of the Company since
December 1998 and a Vice President since July 1999. From 1997 to July
1999, Mr. Harris was employed by UTD, Inc. Prior to 1997, Mr. Harris was
employed by EG&G as a Senior Engineer and Manager of the Ocean Systems
Department where he was responsible for the activities of 45 scientists,
engineers and technicians. During this period while performing contract
services for the US Navy, he was principally responsible for the design
of the omni-directional wheel presently used by the Company. Mr. Harris
received his B.S.M.E. from the United States Merchants Marine Academy in
1982, and is presently completing his M.S.M.E. from the University of
Maryland.
Mr. John Watt Jr. - Mr. Watt has been Secretary and a Director of the
Company since August 1998. From 1990 to the present, he has been the
President of Watt-Bollard Associates, Inc., a manufacturers'
representative sales agency located in Fort Washington, Pennsylvania.
From 1970 to 1990, he served as President of John C. Watt Associates,
Inc.
Mr. James Hudson - Mr. Hudson has been a Director of the Company since
May 1998. From 1980 to present, he has been President of Grammer, Dempsy
& Hudson, Inc., a steel service center headquartered in Newark, New
Jersey.
Frank A. Basile, Esq. - Mr. Basile has been a Director of the Company
since April 1999. Mr. Basile has been a practicing attorney since 1963
and is president of the law firm Basile & Testa located in Vineland, New
Jersey. The firm was one of seven selected by the State of New Jersey to
represent the State against the tobacco industry.
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EXECUTIVE COMPENSATION
The Company and Peter Amico, as President, have entered into a written
employment agreement for a period of five years. Pursuant to the
agreement, Mr. Amico receives a salary of $75,000 per year. In addition,
Mr. Amico will receive annual stock options not to exceed 50,000 shares
of common stock at a price of per share to be determined by the board of
directors. Arcon Corp., a corporation wholly owned by Mr. Amico, receives
an annual dividend on 275,000 shares of Preferred Stock. The annual
dividend equals $68,750, however, the holder may elect to be paid in the
form of common stock at a discount to the market price (see the description
of the Preferred Stock in Item 1. Changes in Control of Registrant).
Although not elected by the holder as of this date, Arcon is entitled to
receive 305,737 shares of common stock as a dividend on the Preferred Stock
for the period May 1997 to December 31, 1998.
The Company and D. Barney Harris, as Vice President, have entered into a
written employment agreement for period of five years. Pursuant to the
agreement, Mr. Harris receives an annual salary of $75,000, subject to
annual review by the Company. In addition, Mr. Harris will be entitled
to receive stock grants and stock options not exceeding 25,000 shares of
common stock per annum at a share price discounted to the market.
The Board of Directors generally hold office until a successor is
elected. Each board member receives $250 for each meeting attended, plus
reasonable travel expenses. For 1998, each board member was granted stock
options for not more than 5,000 shares of common stock at price of $0.50
per share.
RISK FACTORS.
LACK OF COMMERCIAL PRODUCT. The Company has developed the commercial
version of its unique, omni-directional forklift. The commercial
introduction of the product is subject, however, to additional testing
for rating purposes by independent third parties (see "Business"). Due
to the unique performance attributes of the forklift, the forklift will
undergo a series of unprecedented tests relating to these attributes.
Although management is confident in the performance capabilities of the
forklift, management has not performed these tests separately. If the
forklift cannot perform these tests successfully, many of the
competitive advantages of the forklift may be lessened and the Company
may have to redesign certain aspects of the forklift. Such event may
have a negative impact upon the operations of the Company.
LIMITED OPERATING HISTORY. The Company is a development stage company,
and, together with its predecessor, has been in operation since 1995.
However, since 1995, the Company's operations have been limited to the
development of its omni-directional products, and limited revenue has
been generated during this period. Consequently, its business may be
subject to the many risks and pitfalls commonly experienced by
development stage companies. There can be no assurances that future
operations will be profitable.
LACK OF INDICATIONS OF PRODUCT ACCEPTABILITY. The success of the Company
will be dependent upon its ability to sell omni-directional products in
quantities sufficient to yield profitable results. To date, the Company
has received limited indications of the commercial acceptability of
certain of its omni-directional products. Accordingly, no assurances can
be given that the Company's omni-directional products can be marketed
and sold in a commercial manner.
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LACK OF ESTABLISHED DISTRIBUTION CHANNELS. The Company does not have an
established channel of distribution for its forklift product line. It
intends on establishing a network of exclusive dealers throughout the
United States. Although the Company has received indications of interest
from a number of equipment distributors, to date, the Company has
conducted limited dealer solicitation and has not finalized arrangements
with any dealer. No assurances can be given that the Company will be
successful in establishing its intended dealer network.
NEED FOR ADDITIONAL CAPITAL. The Company will require additional capital
in the immediate future to meet its operating needs. The Company intends
on raising the capital through a private or public financing of debt or
equity. Presently, the Company has no commitment for any such funding.
No assurances can be given that the Company will be successful in
obtaining such financing on terms acceptable to the Company. The
Company's inability to obtain such financing could have a material
adverse affect on the Company. In addition to its present need for
capital, in the future the Company may require additional capital to
develop additional products or to meet its operating needs. No
assurances can be given that such capital will be available in the
future at terms acceptable to the Company or at all.
FEATURES OF PREFERRED STOCK. The Company has 275,000 shares of preferred
stock outstanding that are held by an affiliate of the President. The
stock carries a 10 for 1 voting right and a stated value of $5.00 per
share. The preferred stock carries a liquidation preference equal to the
stated value and an annual, cumulative dividend preference of five
percent, all to the detriment of common shareholders. In addition, the
holder may elect to receive the dividend in the form of common stock at
a discount to the market price. Although not elected by the holder as of
this date, it is entitled to receive 305,707 shares of common stock of
the Company for the period ended December 31, 1998.
MANAGEMENT. The ability of the Company to successfully conduct its
business affairs will be dependent upon the capabilities and business
acumen of current management including Peter Amico, the Company's
President. Accordingly, shareholders must be willing to entrust all
aspects of the business affairs of the Company to its current
management. Further, the loss of any one of the Company's management
team could have a material adverse impact on its continued operation.
CONTROL EXERCISED BY MANAGEMENT. The existing officers and directors
will control approximately 70% of the shareholder votes. This control by
management is in the form of common stock and preferred stock that has
10 for 1 voting rights. Consequently, management will control the vote
on all matters brought before shareholders, and holders of common stock
may have no power in corporate decisions usually brought before
shareholders.
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NATURE OF BUSINESS/INSURANCE. The manufacture, sale and use of omni-
directional forklifts and other material handling equipment is generally
considered to be an industry of a high risk with a high incidence of
serious personal injury or property loss. Although the Company intends
to maintain sufficient liability insurance for the manufacture and use
of its products, one or more incidents of personal injury or property
loss resulting from the operation of its products could have a material
adverse impact on the business of the Company.
COMPETITION. Although management believes its product will have
significant competitive advantages to conventional forklifts, the
Company will be competing in an industry populated by some of the
foremost equipment and vehicle manufacturers in the world. Substantially
all of these companies have greater financial, engineering and other
resources than the Company. No assurances can be given that any advances
or development made by such companies will not supersede the competitive
advantages of the Company's omni-directional forklift. In addition, many
of the Company's competitors have long-standing arrangements with
equipment distributors and carry one or more of the competitor's
products in addition to forklifts. These distributors are prospective
dealers for the Company. Consequently, these distributors may be loath
to enter into any relationship with the Company for fear of jeopardizing
their existing relationship with the competitors.
PENNY STOCK REGULATION. The Company's common stock may be deemed a
"penny stock" under federal securities laws. The Securities and Exchange
Commission has adopted regulations that define a "penny stock" generally
to be any equity security that has a market price of less than $5.00 per
share, subject to certain exceptions. These regulations impose
additional sales practice requirements on any broker/dealer who sell
such securities to other than established investors and accredited
investors. For transactions covered by this rule, the broker/dealer must
make certain suitability determinations and must receive the purchaser's
written consent prior to purchase. Additionally, any transaction may
require the delivery prior to sale of a disclosure schedule prescribed
by the Commission. Disclosure also is required to be made of commissions
payable to the broker/dealer and the registered representative, as well
as current quotations for the securities. Finally, monthly statements
are required to be sent disclosing recent price information for the
penny stock held in the account of the customers and information on the
limited market in penny stocks. These requirements generally are
considered restrictive to the purchase of such stocks, and may limit the
market liquidity for such securities.
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FORWARD LOOKING STATEMENTS.
Certain of the statements contained in this Form 8-K includes "forward
looking statements" within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended ("Exchange Act"). All statements other
than statements of historical facts included in this Form 8-K regarding
the Company's financial position, business strategy, and plans and
objectives of management for future operations and capital expenditures,
and other matters, are forward looking statements. These forward looking
statements are based upon management's expectations of future events.
Although the Company believes the expectations reflected in such forward
looking statements are reasonable, there can be no assurances that such
expectations will prove to be correct. Additional statements concerning
important factors that could cause actual results to differ materially
from the Company's expectations ("Cautionary Statements") are disclosed
in the Risk Factor section above and elsewhere in this Form 8-K. All
written and oral forward looking statements attributable to the Company
or persons acting on behalf of the Company subsequent to the date of
this Form 8-K are expressly qualified in their entirety by the
Cautionary Statements.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not applicable.
ITEM 5. OTHER EVENTS.
Successor Issuer Election.
Pursuant to Rule 12g-3(a) of the General Rules and Regulations of the
Securities Exchange Commission, AirTrax elects to be the successor
issuer to MAS Acquisition IX Corp. for purposes under the Securities
Exchange Act of 1934 ("Exchange Act") and elected to report under the
Exchange Act effective November 5, 1999.
ITEM 6. RESIGNATION OF REGISTRANT'S DIRECTORS.
Not applicable.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
No financial statements are filed herewith. The registrant will file
financial statements by amendment hereto not later than 60 days from the
date that this Form 8-K is required to filed.
<PAGE>
EXHIBITS.
3(i)a. Certificate of Incorporation of AirTrax, Inc. dated April 11, 1997.
3(i)b. Certificate of Amendment to Certificate of Incorporation of
AirTrax, Inc. dated November 11, 1999.
3(ii)(a) Amended and Restated By-Laws of the Company.
10 (i) Agreement and Plan of Merger by and between MAS Acquisition IX Corp.
and AirTrax, Inc. dated November 5, 1999.
99(i) Consulting Agreement by and between MAS Financial Corp. and
AirTrax, Inc. dated October 26, 1999.
<PAGE>
ITEM 8. CHANGE IN FISCAL YEAR.
The successor issuer elects December 31 as its fiscal year end. The
Company will file transitional reports as required.
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 thereunto duly authorized.
AIRTRAX, INC.
Date: November 19, 1999 /s/ Peter Amico
- ----------------------- _________________
Peter Amico
President
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EXHIBIT 3(i)a.
April 11, 1997
CERTIFICATE OF INCORPORATION
OF
AirTrax, Inc.
This is to certify that, thereby is hereby organized a corporation
under and by virtue of N.J.S.A. 14A:1 et seq., the "New Jersey Business
Corporation Act."
1. The name of the corporation is AirTrax, Inc.
2. The address and zip code of the operation's initial registered
office is 144 North Beverwyk Road, Box # 188, Lake Hiawatha, New Jersey
07034-1909
3. The name of the corporation's initial registered agent is Louis
Perosi, Jr.
4. The purposes for which this corporation is organized are: To engage
in any activity within the purpose for which the corporation may be organized
under the "New Jersey Business Corporation Act", N.J.S.A. 14A:1-1 et seq. and
to conduct and engage in the business at which are necessary, convenient
appropriate, useful, customary or incidental to the forgoing purpose.
5. The aggregate number of shares which the corporation shall have to
issue is five million five hundred thousand (5,500,000), itemized by classes,
par value of shares, shares without par vallue, and series, if any, within a
class, is:
<TABLE>
<CAPTION>
Par Value per Share or
Series statement that Shares
Class (if any) Number of Shares have no par value
- ------- -------- ---------------- ----------------------
<S> <C> <C>
Common 5,000,000 No Par
Preferred 500,000 No Par
</TABLE>
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The relative rights, preferences and limitations of the shares of each class
and series (if any), are as follows:
The Board of Directors shall have the authority by vote of the
majority of the Shareholders hereof, to assign certain
charactistics to all or any part of the Class A Preferred Stock
which may be used to acquire capital, restructure the
capitalization, maintain voting control, reduce dilution and
any other purpose which would be deemed in the best interest of
the Shareholders.
6. The first Board of Directors of this corporation shall consist of
two (2) directors. The names and addresses of each person who is to serve as
Director are:
Louis Perosi, Jr. 10 Randazzo Lane
West Paterson, New Jersey 07424
Albert A. Walla PO Box 3571
Stamford, CT 06905
7. The name and address of the incorporator is:
Imagine America, Inc. PO Box 4676
Wayne, NJ 07470
IN WITNESS WHEREOF, each individual incorporation, each being over the
age of eighteen years, has signed this certificate; or if the incorporation
be a corporation, has caused this Certificate to be signed by its authorized
officers, this 11th day of April, 1997.
/s/ Louis Perosi Jr
-------------------
Louis Perosi, Jr.
President
EXHIBIT 3(i)b.
AIRTRAX, INC.
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
The undersigned corporation, organized under the laws of the State of New
Jersey, to amend its Certificate of Incorporation in accordance with Chapter 9
of the New Jersey Business Corporation Act, hereby certifies:
FIRST: The name of the Corporation is AIRTRAX, INC.
SECOND: The Board of Directors on April 20, 1997 adopted the following
resolution:
RESOLVED, that, pursuant to the authority vested in the Board of Directors of
AirTrax, Inc. ("Corporation") by its Certificate of Incorporation, the Board of
Directors by resolution does hereby create, authorize and provide for the
issuance of the "5% Voting Preferred Stock - $5.00 Stated Value", consisting
initially of 275,000 shares, having the voting powers, preferences and relative
participating rights, and the qualifications, limitations or restrictions that
are set forth as follows:
Section I. Designation and Amount.
There is hereby created out of the authorized and unissued shares of preferred
stock of the Corporation a class of preferred stock designated as the "5%
Voting Preferred Stock - $5.00 Stated Value" ("5% Voting Preferred Stock")
and the number of shares constituting such class shall be 275,000.
Section II. Rank.
The 5% Voting Preferred Stock, in respect of dividends and distributions upon
the liquidation, winding-up, and dissolution of the Corporation, shall rank
senior to all classes of common stock of the Corporation, and each other class
of Capital Stock or series of Preferred Stock hereafter created that does not
expressly provide that it ranks senior to, or on a parity with, the 5% Voting
Preferred Stock as to dividends and distributions upon the liquidation,
winding-up, and dissolution of the Corporation ("Junior Stock"). The 5% Voting
Preferred Stock shall, in respect of dividends and distributions upon the
liquidation, winding-up, and dissolution of the Corporation, rank on a parity
with any class of Capital Stock or series of Preferred Stock hereafter created
that expressly provides that it ranks on a parity with the 5% Voting Preferred
Stock as to dividends and distributions upon the liquidation, winding-up, and
dissolution of the Corporation ("Parity Stock"); provided, however, that any
such Parity Stock that was not approved in writing by the majority of the
Holders shall be deemed to be Junior Stock and not Parity Stock. The 5% Voting
Preferred Stock shall, in respect of dividends and distributions upon the
liquidation, winding-up, and dissolution of the Corporation, rank junior to
each class of Capital Stock or series of Preferred Stock hereafter created that
has been approved in writing by the majority of the Holders and that expressly
provides that it ranks senior to the 5% Voting Preferred Stock as to dividends
or distributions upon the liquidation, winding-up, and dissolution of the
Corporation ("Senior Stock").
<PAGE>
Section III. Dividends.
(i) Beginning on the Issue Date and for each Dividend Period, the Holders of
the outstanding shares of 5% Voting Preferred Stock being issued on such Issue
Date shall be entitled to receive, when, as, and if declared by the Board of
Directors, out of funds legally available therefore except however as otherwise
provided herein, distributions in the form of cash dividends on each share of
5% Voting Preferred Stock, at the rate (the "Dividend Rate") of 5% per annum,
multiplied by the stated value ($5.00) per share of the 5% Voting Preferred
Stock. Dividends shall accrue at the Dividend Rate, and shall be cumulative,
whether or not earned or declared, however, shall not compound. Dividends shall
be payable in arrears on each Dividend Payment Date, commencing on the first
Dividend Payment Date after the applicable Issue Date. Each dividend shall be
payable to Holders of record as they appear on the stock books of the
Corporation on the Dividend Record Date immediately preceding the related
Dividend Payment Date.
(ii) All dividends paid in respect of shares of the 5% Voting Preferred Stock
pursuant to Section III(c)(i) shall be paid pro rata to the Holders entitled
thereto.
(iii) No full dividends shall be declared by the Board of Directors or paid
or set apart for payment by the Corporation on any Parity Stock for any
period unless full cumulative dividends have been or contemporaneously are
declared and paid in full, or declared and, if payable in cash, a sum in cash
set apart sufficient for such payment on the 5% Voting Preferred Stock for all
Dividend Periods terminating on or prior to the date of payment of such full
dividends on such Parity Stock. If any dividends are not so paid, all
dividends declared upon shares of the 5% Voting Preferred Stock and any Parity
Stock shall be declared pro rata so that the amount of dividends declared per
share on the 5% Voting Preferred Stock and such Parity Stock shall in all cases
bear to each other the same ratio that accrued dividends per share on the 5%
Voting Preferred Stock and such Parity Stock bear to each other. (iv)(A)
Holders of shares of the 5% Voting Preferred Stock shall be entitled to receive
the dividends provided for in paragraph (i) hereof in preference to and in
priority over any dividends upon any Junior Stock. (B) So long as any share of
the 5% Voting Preferred Stock is outstanding, the Corporation shall not declare,
pay, or set apart for payment any dividend on any of the Junior Stock or make
any payment on account of, or set apart for payment money for a sinking or other
similar fund for, the purchase, redemption, conversion, or other retirement of,
any Junior Stock or any warrants, rights, calls, or options exercisable for or
convertible into any Junior Stock whether in cash, obligations, or shares of
the Corporation or other property (other than dividends paid in Junior Stock to
the holders of Junior Stock),
<PAGE>
and shall not permit any corporation or other entity directly or indirectly
controlled by the Corporation to purchase or redeem any of the Junior Stock or
any such warrants, rights, calls, or options, unless full cumulative dividends
determined in accordance herewith on the 5% Voting Preferred Stock have been
paid in full. (C) So long as any share of the 5% Voting Preferred Stock is
outstanding, the Corporation shall not make any payment on account of, or set
apart for payment money for a sinking or other similar fund for, the purchase,
redemption, conversion, or other retirement of, any of the Parity Stock or any
warrants, rights, calls, or options exercisable for or convertible into any of
the Parity Stock, and shall not permit any corporation or other entity directly
or indirectly controlled by the Corporation to purchase or redeem any of the
Parity Stock or any such warrants, rights, calls, or options, unless full
cumulative dividends determined in accordance herewith on the 5% Voting
Preferred Stock have been paid in full. (v) Dividends payable on the 5% Voting
Preferred Stock for any period less than a year shall be computed on the basis
of a 360-day year of twelve 30-day months and the actual number of days elapsed
in the period for which payable. (vi) Notwithstanding anything contained herein
to the contrary, (a) if funds are not legally available for the payment of any
dividend during any Dividend Period, such dividend must be declared and paid in
the form of Common Stock as provided hereinbelow, and (b) if funds are legally
available for the payment of any dividend during any Dividend Period, Holder
nonetheless at its sole discretion may elect prior to any Dividend Payment
Date for a respective Dividend Period to receive all or part of dividend in
the form of Common Stock as provided hereinbelow. In any case, a dividend
either in the form of cash or Common Stock will be paid to each Holder on
the Dividend Payment Date for the applicable Dividend Period. The number of
shares of Common Stock to be received as a dividend ("Dividend Shares") by a
Holder for each Dividend Period shall equal the Dividend Rate multiplied by
$5.00 multiplied by the number of shares of $5.00 Voting Preferred Stock held
by the Holder (less any shares for which a dividend in cash has been paid to
the holder for such Dividend Period) multiplied by thirty percent (30%) and
divided by the "Market Value" (as defined in the following sentence) per share
of the Common Stock. Market Value per share of the Common Stock shall equal the
closing price per share of the Common Stock of the Corporation on the last
trading day of each Dividend Period as quoted on any regulated securities
market, electronic bulletin board, "pink sheet" market, or other third party
market. No fractional shares shall be issued in connection with the Dividend
Shares, and the number of shares of Common Stock to be issued shall be rounded
up or down to the nearest whole share. The effective date of ownership of the
Dividend Shares shall be the Dividend Payment Date and holder shall be deemed
a shareholder of record of the Corporation for the Dividend Shares as of such
date. The Corporation at all times shall reserve and keep available out of its
authorized but unissued shares of its Common Stock, solely for the purpose of
effecting the dividend, such number of its shares of Common Stock as from time
to time shall be sufficient to effect the dividend; and if at any time the
number of authorized but unissued shares of Common Stock shall be insufficient
to effect the dividend, the Corporation shall take such corporate action
necessary to increase the number of its authorized but unissued shares of its
Common Stock to effect such dividend, including without limitation employing
its best efforts to obtain requisite shareholder approval. All Dividend Shares
will be "restricted securities" as that term is defined under the federal
securities laws.
<PAGE>
Section IV. Liquidation Preference.
(i) In the event of any voluntary or involuntary liquidation, dissolution,
or winding up of the affairs of the Corporation, the Holders of shares of 5%
Voting Preferred Stock then outstanding shall be entitled to be paid out of
the assets of the Corporation available for distribution to its stockholders
an amount in cash equal to the Liquidation Preference for each share of the 5%
Voting Preferred Stock held by such Holder, plus, without duplication, an
amount in cash equal to accumulated and unpaid dividends thereon to the date
fixed for liquidation, dissolution, or winding up (including an amount equal
to a prorated dividend for the period from the last Dividend Payment Date to
the date fixed for liquidation, dissolution, or winding up) before any payment
shall be made or any assets distributed to the holders of any of the Junior
Stock including, without limitation, the Common Stock. Except as provided in
the preceding sentence, Holders of 5% Voting Preferred Stock shall not be
entitled to any distribution in the event of any liquidation, dissolution, or
winding up of the affairs of the Corporation. If the assets of the Corporation
are not sufficient to pay in full the liquidation payments payable to the
Holders of outstanding shares of the 5% Voting Preferred Stock and all Parity
Stock, then the holders of all such shares shall share equally and ratably in
such distribution of assets in proportion to the full Liquidation Preference,
including, without duplication, all accrued and unpaid dividends to which
each is entitled.
(ii) For the purposes of this Section IV, neither the sale, conveyance,
exchange, or transfer (for cash, shares of stock, securities, or other
consideration) of all or substantially all of the property or assets of the
Corporation nor the consolidation or merger of the Corporation with or into
one or more entities shall be deemed to be a liquidation, dissolution, or
winding up of the affairs of the Corporation.
Section V. Voting Rights.
Holders of $5.00 Preferred Stock shall be entitled to cast ten (10) votes for
each share held of the 5% Voting Preferred Stock on all matters presented to
the shareholders of the Company for shareholder vote.
<PAGE>
Section VII. Definitions.
As used in herein, the following terms shall have the following meanings (with
terms defined in the singular having comparable meanings when used in the
plural and vice versa), unless the context otherwise requires:
"Capital Stock" means any and all shares, interests, participations, or other
equivalents (however designated) of capital stock of the Corporation.
"Common Stock" means any and all shares of the Corporation no par value common
stock.
"Corporation" means AirTrax, Inc., a New Jersey corporation, and its successors.
"Dividend Payment Date" means each April 15, July 15, October 15, and January
15 of the relevant Dividend Period commencing with the first to occur after the
initial Issue Date.
"Dividend Period" means each respective calendar quarter ending March 31,
June 30, September 30, and December 31, pro-rated for any partial calendar
year.
"Dividend Rate" has the meaning ascribed to such term in Section III (i) hereof.
"Dividend Record Date" means December 31 of the relevant Dividend Period.
"5% Voting Preferred Stock" has the meaning ascribed to it in Section I hereof.
"Holder" means a holder of a share or shares of 8% Senior Convertible Preferred
Stock as reflected in the stock books of the Corporation.
"Issue Date" means the date of original issuance of the applicable shares of 5%
Voting Preferred Stock.
"Junior Stock" has the meaning ascribed to it in Section II hereof.
"Liquidation Preference" means $5.00 per share of the 5% Voting Preferred Stock.
"Parity Stock" has the meaning ascribed to it in Section II hereof.
"Preferred Stock" means any Capital Stock of the Corporation that has
preferential rights over any other Capital Stock of the Corporation in respect
of dividends, conversions, or redemptions or upon liquidation.
"Senior Stock" has the meaning ascribed to it in Section II hereof.
THIRD: The Certificate of Incorporation is amended so that the designation
and number of shares of the class of the Company's preferred stock acted upon
in the board of director's resolution stated above, and the relative rights,
preferences and limitations of such class, are as stated in above resolution.
<PAGE>
IN WITNESS WHEREOF, AIRTRAX, INC. has caused its duly authorized officer
to execute this Certificate on this the 11th day of November, 1999.
AirTrax, Inc.
/s/ Peter Amico
_______________
Peter Amico
President
EXHIBIT 3(ii)(a)
BY-LAWS
OF
AIRTRAX, INC.
(A New Jersey Corporation)
PREAMBLE
These Amended and Restated Bylaws (these "Bylaws") are subject
to, and governed by, the New Jersey Business Corporation Act (the
"NJBCA") and the certificate of incorporation (as amended from time to
time, the "Certificate of Incorporation") of AirTrax, Inc., a New
Jersey corporation (the "Corporation"). In the event of a direct
conflict between the provisions of these Bylaws and the mandatory
provisions of the NJBCA or the provisions of the Certificate of
Incorporation, such provisions of the NJBCA or the Certificate of
Incorporation, as the case may be, will be controlling.
ARTICLE I.
OFFICES
1.01 Registered Office. The registered office of the corporation in
the State of New Jersey shall be 1616 Pennsylvania Avenue, #122,
Vineland, New Jersey 08361.
1.02 Principal Office. The principal office of the corporation shall
be 1616 Pennsylvania Avenue, #122, Vineland, New Jersey 08361.
1.03 Other Offices. The corporation may also have offices at such
other places, both within and without the State of New Jersey as the
board of directors may from time to time determine or the business of
the corporation may require.
ARTICLE II.
STOCKHOLDERS
2.01 Time and Place of Meetings. All meetings of the stockholders
shall be held at such time and place, within or without the State of New
Jersey, as shall be stated in the notice of meeting or in a duly
executed waiver thereof.
2.02 Annual Meeting - Election of Directors. An annual meeting of the
stockholders, commencing with the year 2000, shall be held each year at
a time on the third Friday during the month of May to be selected by the
board of directors. If such day is a legal holiday, then the meeting
shall be held on the next secular day following. At the meeting, the
stockholders shall elect directors and transact such other business as
may properly be brought before the meeting.
2.03 Special Meetings. Special meetings of the stockholders, for any
purpose or purposes, unless otherwise prescribed by the Act or by the
articles of incorporation, or by these By-Laws, may be called by the
chairman of the board, if any, the president or secretary, and shall be
called by the chairman of the board, the president or secretary at the
request in writing of a majority of the board of directors or the
holders of twenty-five percent (25%) or more of the shares entitled to
vote at such meeting. Such request shall state the purpose or purposes
of the proposed meeting. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice of
the meeting.
2.04 Notices. Written or printed notice of the annual or any special
meeting stating the place, day, and hour of the meeting and, in the case
of a special meeting, the purpose or purposes for which the meeting is
called, shall be delivered to each stockholder of record entitled to
vote not less than ten nor more than fifty days before the date of the
meeting, either personally or by mail, by or at the direction of the
chairman of the board, the president, the secretary or the officer or
person calling the meeting. If mailed, such notice shall be deemed to
be delivered when deposited in the United States mail addressed to the
stockholder at the address as it appears on the stock transfer books of
the corporation, with postage thereon prepaid.
2.05 Voting List. The officer or agent who has charge of the stock
transfer books of the corporation shall make, at least ten days before
every meeting of stockholders, a complete list of the stockholders
entitled to vote at said meeting or any adjournment thereof, arranged in
alphabetical order, with address of and the number of voting shares held
by each. Such list shall be kept on file at the principal office of the
corporation for a period of ten days prior to such meeting and shall be
subject to inspection by any stockholder at any time during usual
business hours. Such list shall also be produced and kept open at the
time and place of the meeting and shall be subject to the inspection of
any stockholder during the whole time of the meeting. The original
stock transfer books shall be prima facie evidence as to who are
stockholders entitled to examine such list or transfer books and to vote
at any meeting of stockholders.
<PAGE>
2.06 Quorum. The holders of a majority of the issued and outstanding
stock entitled to vote thereat, present in person or represented by
proxy, shall be requisite and shall constitute a quorum at all meetings
of the stockholders for the transaction of business except as otherwise
provided by statute, by the certificate of incorporation, or by these
By-Laws. If a quorum is not present or represented at a meeting of the
stockholders, the stockholders entitled to vote thereat, present in
person or represented by proxy, shall have power to adjourn the meeting
from time to time, without notice other than announcement at the
meeting, until a quorum is present or represented. At such adjourned
meeting at which a quorum is present or represented, any business may be
transacted which might have been transacted at the meeting as originally
notified.
2.07 Majority Vote; Withdrawal of Quorum. When a quorum is present at
any meeting, the vote of the holders of a majority of the shares having
voting power, present in person or represented by proxy, shall decide
any question brought before such meeting, unless the question is one
upon which, by express provision of the statutes or of the certificate
of incorporation or of these By-Laws, a different vote is required in
which case such express provision shall govern and control the decision
of such question. The stockholders present at a duly organized meeting
may continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
2.08 Voting. (a) Each outstanding share, regardless of class, shall
be entitled to one vote on each matter submitted to a vote at a meeting
of stockholders, except to the extent that the voting rights of the
shares of any class or classes are limited or denied by the articles of
incorporation. At any meeting of the stockholders, every stockholder
having the right to vote may vote either in person, or by proxy executed
in writing by the stockholder or by his duly authorized attorney in
fact. No proxy shall be valid after eleven months from the date of its
execution, unless otherwise provided in the proxy. Each proxy shall be
revocable unless expressly provided therein to be irrevocable and unless
otherwise made irrevocable by law. Each proxy shall be filed with the
secretary of the corporation prior to or at the time of the meeting.
(b) Treasury shares, shares of stock owned by another
corporation the majority of the voting stock of which is owned or
controlled by this corporation, and shares of stock held by this
corporation in a fiduciary capacity shall not be voted, directly or
indirectly, at any meeting and shall not be counted in determining the
total number of outstanding shares at any given time.
(c) Directors shall be elected by plurality vote.
(d) Shares standing in the name of another corporation,
domestic or foreign, may be voted on by such officer, agent, or proxy as
the By-Laws of such corporation may authorize or, in the absence of such
authorization, as the board of directors of such corporation may
determine.
<PAGE>
(e) Shares held by an administrator, guardian or conservator
may be voted by him so long as such shares forming part of an estate are
in the possession and forming a part of the estate being served by him,
either in person or by proxy, without a transfer of such shares into his
name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote
shares held by him without a transfer to such shares into his name as
trustee.
(f) Shares standing in the name of a receiver may be voted
by such receiver, and shares held by or under the control of a receiver
may be voted by such receiver without the transfer thereof into his name
if authority so to be contained in an appropriate order of the court by
which such receiver was appointed.
(g) A stockholder whose shares are pledged shall be entitled
to vote such shares until the shares have been transferred into the name
of the pledgee, and thereafter the pledgee shall be entitled to vote the
shares so transferred.
(h) Voting on any question or in any election may be by
voice vote or show of hands unless the presiding officer shall order, or
the holders of at least ten percent of the shares entitled to vote shall
demand, that voting be by written ballot.
2.09 Record Date; Closing Transfer Books. The board of directors may
fix in advance a record date for the purpose of determining stockholders
entitled to notice of or to vote at a meeting of the stockholders, the
record date to be not less than ten nor more than fifty days prior to
the meeting; for such purpose for a period of not less than ten nor more
than fifty days prior to such meeting. In the absence of any action by
the board of directors, the date upon which the notice of the meeting is
mailed shall be the record date.
2.10 Action Without Meeting. Whenever the vote of stockholders at a
meeting thereof is required or permitted to be taken for or in
connection with any corporate action, the meeting and vote of
stockholders may be dispensed with and such action may be taken with the
written consent of stockholders having not less than the minimum
percentage of the vote required by statute for the proposed corporate
action, provided that prompt notice shall be given to all stockholders
of the taking of the corporate action without a meeting and by less than
unanimous consent.
<PAGE>
ARTICLE III
DIRECTORS
3.01 Management. The business and affairs of the corporation shall be
managed by the board of directors who may exercise all such powers of
the corporation and do all such lawful acts and things as are not (by
statute or by the articles of incorporation or by these By-Laws)
directed or required to be exercised or done by the stockholders.
3.02 Number; Qualification; Election; Term. The board of directors
shall consist of not fewer than one nor more than eleven directors as
shall be fixed from time to time by resolution of the board of
directors. Directors need not be residents of the State of New Jersey
or stockholders of the corporation. The directors shall be elected at
the annual meeting of the stockholders, except as provided in By-Laws
3.03 and 3.05. Each director shall hold office until his successor
shall be elected and shall qualify.
3.03 Change in Number. The number of directors may be increased or
decreased from time to time by resolution of the board of directors at
any meeting, but no decrease shall have the effect of shortening the
term of any incumbent director.
3.04 Removal. Any director may be removed either for or without cause
at any special or annual meeting of stockholders, by the affirmative
vote of a majority in number of shares of the stockholders present in
person or by proxy at such meeting and entitled to vote for the election
of such director if notice of intention to act upon such matter shall
have been given in the notice calling such meeting.
3.05 Vacancies. Any vacancy occurring in the Board of Directors (by
death, resignation, removal or otherwise) may be filled by an
affirmative vote of a majority of the Directors then in office, although
less than a quorum, or by a sole remaining Director. A Director elected
to fill such a vacancy shall be elected for the unexpired term of his
predecessor in office. Any newly created directorship resulting from
any increase in the authorized number of Directors may be filled by an
affirmative vote of a majority of the Directors then in office, although
less than a quorum, or by a sole remaining Director.
3.06 Compensation. By resolution of the board of directors, the
directors may be paid their expenses, if any, of attendance at each
meeting of the board of directors and may be paid a fixed sum of
attendance at each meeting of the board of directors or a corporation in
any other capacity and receiving compensation therefor. Member of
special or standing committees may, by resolution of the board of
directors, be allowed like compensation for attending committee
meetings.
<PAGE>
3.07 Meetings of the Board of Directors.
(a) Place. Meetings of the board of directors of the
corporation, regular or special, may be held either within or without
the state of New Jersey.
(b) First Meeting. The first meeting of the newly elected
board of directors shall be held without further notice immediately
following the annual meeting of stockholders, at the same place, unless
(by unanimous consent of the directors then elected and serving) such
time or place shall be changed.
(c) Regular Meetings. Regular meetings of the board of
directors may be held without notice at such time and at such place as
shall from time to time by determined by the board by resolution.
(d) Special Meetings. Special meetings of the board of
directors may be called by or at the request of the chairman of the
board, the president or the secretary and shall be called by the
secretary on the written request of two of the incumbent directors. The
person or persons authorized to call special meetings of the board of
directors may fix the place for holding any special meeting of the board
of directors called by them. Notice of any special meeting shall be
given at least twenty-four (24) hours previous thereto if given either
personally (including written notice delivered personally or notice by
telephone) or by telegram, and at least seven-two (72) hours previous
thereto if given by written notice mailed to each director at the
address of his business and residence. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
board of directors need by specified in the notice or waiver of notice
of such meeting. If mailed, the notice shall be deemed to be delivered
when deposited in the United States mail addressed, in the
above-specified manner, with postage thereon prepaid. If notice be
given by telegram, such notice shall be deemed to be delivered when the
telegram is delivered to the telegraph company. Any director may waive
notice of any meeting, as provided in By-Law 4.02.
(e) Quorum; Majority Vote. At all meetings of the board of
directors a majority of the number of directors fixed by these By-Laws
shall constitute a quorum for the transaction of business. The act of a
majority of the directors present at any meeting at which a quorum is
present shall be the act of the board of directors, except as otherwise
specifically provided by statute or by the articles of incorporation or
by these By-Laws. If a quorum is not present at a meeting of the board
of directors, the directors present thereat may adjourn the meeting from
time to time, without notice other than announcement at the meeting,
until a quorum is present.
<PAGE>
(f) Procedure. The board of directors shall keep regular
minutes of its proceedings. The minutes shall be placed in the minute
book of the corporation.
3.08 Action Without Meeting. Any action required or permitted to be
taken at a meeting of the board of directors may be taken without a
meeting if a consent in writing, setting forth the action so taken, is
signed by all the members of the board of directors. Such consent shall
have the same force and effect as a unanimous vote at a meeting. The
signed consent, or a signed copy, shall be placed in the minute book.
3.09 Telephone and Communication Equipment Meetings. Stockholders,
members of the board of directors, and members of any committee of the
board of directors may participate in meetings by means of conference
telephone or other communications equipment to the full extent
permissible by the NJBCA.
ARTICLE IV
NOTICES
4.01 Method. Whenever by statute or the certificate of incorporation
or these By-Laws, notice is required to be given to director or
stockholder, and no provision is made as to how the notice shall be
given, it shall not be construed to mean personal notice, but any such
notice may be given (a) in writing, by mail, postage prepaid, addressed
to the director or stockholder at the address appearing on the books of
the corporation, or (b) in any other method permitted by law. Any
notice required or permitted to be given by mail shall be deemed given
at the time when the same is this deposited in the United States mail.
<PAGE>
4.02 Waiver. Whenever, by statute or the articles of incorporation or
these By-Laws, notice is required to be given to a stockholder or
director, a waiver thereof in writing signed by the person or persons
entitled to such notice, whether before or after the time stated in such
notice, shall be equivalent to the giving of such notice. Attendance of
a director at a meeting shall constitute a waiver of notice of such
meeting, except where a director attends for the express purpose of
objecting to the transaction of any business on the ground that the
meeting is not lawfully called or convened.
ARTICLE V.
COMMITTEES OF THE BOARD OF DIRECTORS
5.01 Designation. The board of directors may by resolution of a
majority of the whole board, designate an executive committee, and one
or more other committees including an audit committee, a compensation
committee, and any such other special committees as the board shall deem
advisable.
5.02 Number; Qualification; Term. Each committee shall consist of one
or more directors who will serve at the pleasure of the board of
directors. The executive committee shall include the president. The
other committees may include any members of the board except as provided
below with respect to the audit and compensation committees.
(a) Audit Committee. The audit committee if any shall
consist of directors who are not officers or full-time employees of the
corporation.
(b) Compensation Committee. The compensation committee, if
any, may include the chief accounting and financial officer of the
corporation provided a majority of the committee are not officers or
full-time employees of the corporation.
<PAGE>
5.03 Authority of Committees.
(a) The Executive Committee. The executive committee, to
the extent provided in such resolution, shall have and may exercise all
of the authority of the board of directors in the management of the
business and affairs of the corporation, certificate of incorporation,
and shall have power to authorize the seal of the corporation to be
affixed to all papers which may require it. Without limiting the
general authority of the executive committee, it shall have the power:
(1) to appoint officers and agents of the corporation
and determine their salaries (subject to recommendation of the
compensation committee, if any).
(2) to borrow money, and issue bonds, notes or other
obligations and evidences of indebtedness therefor.
(3) To authorize the corporate seal to be affixed to
documents of the corporation.
(4) to determine questions of general policy with
regard to the business of the corporation.
(5) to make recommendations as to declaration of
dividends.
(b) Audit Committee. The audit committee, if any, shall
nominate the independent public accountants to report on the financial
statements of the corporation, and shall have such other powers, duties
and authority as shall be set forth in the resolutions of the board of
directors appointing the committee.
(c) Compensation Committee. The compensation committee, if
any, shall have the responsibility of reviewing the remuneration of the
officers and key employees of the corporation including stock option and
stock purchase rights and such other powers, duties and authority as
shall be set forth in the resolutions of the board of directors
appointing the committee.
(d) Other Committees. Any other committee or committees
appointed by the directors shall have and may exercise such powers of
the board of directors in the management of the business and affairs of
the corporation as shall be provided in the resolution(s) creating the
committee. Such committee or committees shall have such name or names
as may be determined from time to time by resolution of the board of
directors.
<PAGE>
5.04 Change in Number. The number of members of any committee may be
increased or decreased from time to time by resolution adopted by a
majority of the whole board of directors.
5.05 Removal. Any member of a committee may be removed by the board of
directors by the affirmative vote of a majority of the whole board,
whenever in its judgment the best interests of the corporation will be
served thereby.
5.06 Vacancies. A vacancy occurring in any committee (by death,
resignation, removal or otherwise) may be filled by the board of
directors in the manner provided for original designation in By- Law
5.01.
5.07 Meetings. Time, place and notice (if any) of executive committee
meetings shall be determined by the committee.
5.08 Quorum; Majority Vote. At meetings of each committee, a majority
of the number of members designated by the board of directors shall
constitute a quorum for the transaction of business. The act of a
majority of the members present at any meeting at which a quorum is
present shall be the act of the committee, except as otherwise
specifically provided by statute or by the articles of incorporation or
by these By-Laws. If a quorum is not present at a meeting of the
committee, the members present thereat may adjourn the meeting from time
to time, without notice other than an announcement at the meeting, until
a quorum is present.
5.09 Compensation. See By-Law 3.06.
5.10 Procedure. Each committee shall keep regular minutes of its
proceedings and report the same to the board of directors when required.
The minutes of the proceedings of each committee shall be placed in the
minute book of the corporation.
<PAGE>
5.11 Action Without Meeting. Any action required or permitted to be
taken at a meeting of any committee may be taken without a meeting if a
consent in writing, setting forth the action so taken, is signed by all
the members of the committee. Such consent shall have the same force
and effect as a unanimous vote at a meeting. The signed consent, or a
signed copy, shall be placed in the minute book.
5.12 Telephone and Communication Equipment Meetings. Meetings of
committees may be held by telephone as provided in By-Law 3.09.
5.13 Responsibility. The designation of a committee and the delegation
of authority to it shall not operate to relieve the board of directors,
or any member thereof, of any responsibility imposed upon it or him by
law.
ARTICLE VI.
OFFICERS AND AGENTS
6.01 Number; Qualification; Election; Term.
(a) The corporation shall have:
(1) A president, a vice president, a secretary, an
assistant secretary, and a treasurer, and
(2) Such other officers (including a chairman of the
board, an executive vice president and additional vice presidents) and
assistant officers and agents as the board of directors may deem
necessary.
(b) Officers named in By-Law 6.01 (a) (1) shall be elected
by the board of directors on the expiration of an officer's term or
whenever a vacancy exists. Officers and agents named in By-Law 6.01
(a)(2) may be elected by the board at any meeting.
<PAGE>
(c) Unless otherwise specified by the board at the time of
election or appointment, or in an employment contract approved by the
board, each officer's and agent's term shall end at the first meeting of
directors after the next annual meeting of stockholders. He shall serve
until the end of his term or, if earlier, his death, resignation, or
removal.
(d) Any two or more offices may be held by the same person.
6.02 Removal. Any officer or agent elected or appointed by the board
of directors may be removed by the board of directors whenever in its
judgment the best interests of the corporation will be served thereby.
Such removal shall be without prejudice to the contract rights, if any,
of the person so removed. Election or appointment of an officer or
agent shall not of itself create contract rights.
6.03 Vacancies. Any vacancy occurring in any office of the corporation
(by death, resignation, removal or otherwise) may be filed by the board
of directors.
6.04 Authority. Officers and agents shall have such authority and
perform such duties in the management of the corporation as are provided
in these By-Laws or as may be determined by resolution of the board of
directors not inconsistent with these By-Laws.
6.05 Compensation. The compensation of officers and agents shall be
fixed from time to time by the board of directors.
6.06 Chairman of the Board. If there be a chairman of the board of
directors, he shall be chosen from among the directors and shall be the
chief executive officer of the corporation, unless the board of
directors shall designate such other person as chief executive officer.
He shall have the power to call special meetings of the stockholders and
of the directors for any purpose or purposes, and he shall preside at
all meetings of the stockholders and of the board of directors, unless
he shall be absent or unless he shall, at his option, designate the
president or chief executive officer to preside in his stead at some
particular meeting. The chairman of the board shall have all of the
powers granted by the By-Laws to the president including the power to
make and sign contracts and agreements in the name and on behalf of the
corporation. He shall, in general, have supervisory power over the
president, the other officers and the business activities of the
corporation, subject to the approval or review of the board of
directors.
<PAGE>
6.07 President. If there be a chairman of the board of directors, the
powers and duties of the president shall be subject to the powers and
duties of the chairman of the board of directors. If there be no
chairman of the board, the president shall have all the powers and
duties provided for in By-Law 6.06 as well as those provided in this
By-Law 6.07. The president, who need not be chosen from among the
directors, shall be an ex officio member of all standing committees,
shall, subject to the powers conferred upon the chairman of the board
under By-Law 6.06 of this Article, be the chief executive officer of the
corporation; preside at all meetings of the stockholders and the board
of directors, shall have general and active management of the business
and affairs of the corporation, and shall see that all orders and
resolutions of the board are carried into effect. He shall perform such
other duties and have such other authority and powers as the board of
directors may from time to time prescribe.
6.08 Executive Vice President. If there be an executive vice
president, he shall be the ranking vice president and shall be the chief
operating officer of the corporation unless the board of directors shall
designate another officer as chief operating officer. In the absence or
disability of the president, the executive vice president shall perform
all the duties, exercise the powers and assume all responsibilities of
the president. He shall also generally assist the president and
exercise any other powers and perform such other duties as are delegated
to him by the president and as the board of directors shall prescribe.
6.09 Vice Presidents. The vice presidents in the order of their
seniority, unless otherwise determined by the board of directors, shall,
in the absence or disability of the president, perform the duties and
have the authority and powers as the board of directors may from time to
time prescribe or as the president may from time to time delegate.
<PAGE>
6.10 Secretary.
(a) The secretary shall attend all meetings of the board of
directors and all meetings of the stockholders and record all votes and
the minutes of all proceedings in a book to be kept for that purpose and
shall perform like duties for the executive committee when required.
(b) He shall give, or cause to be given, notice of all
meetings of the stockholders and special meetings of the board of
directors.
(c) He shall keep in safe custody the seal of the
corporation and, when authorized by the board of directors or the
executive committee, affix the same to any instrument requiring it and,
when so affixed, it shall be attested by his signature or by the
signature of the treasurer or an assistant secretary, which may be
facsimile.
(d) He shall be under the supervision of the president. He
shall perform such other duties and have such other authority and powers
as the board of directors may from time to time prescribe or as the
president may from time to time delegate.
6.11 Assistant Secretaries. The assistant secretaries in the order of
their seniority, unless otherwise determined by the board of directors,
shall, in the absence or disability of the secretary, perform the duties
and have the authority and exercise the powers of the secretary. They
shall perform such other duties and have such other powers as the board
of directors may from time to time prescribe or as the president may
from time to time delegate.
6.12 Treasurer.
(a) The treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of
receipts and disbursements of the corporation and shall deposit all
monies and other valuable effect in the name and to the credit of the
corporation in such depositories as may be designated by the boards of
directors.
<PAGE>
(b) He shall disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the president and directors, at the
regular meetings of the board, or whenever they may require it, an
account of all his transactions as treasurer and of the financial
condition of the corporation.
(c) He shall perform such other duties and have such other
authority and powers as the board of directors may from time to time
prescribe or as the president may from time to time delegate.
6.12 Assistant Treasurers. The assistant treasurers in the order of
their seniority, unless otherwise determined by the board of directors,
shall, in the absence or disability of the treasurer, perform the duties
and have the authority and exercise the powers of the treasurer. They
shall perform such other duties and have such other powers as the board
of directors may from time to time prescribe or the president may from
time to time delegate.
6.13 Bonding of Officers. If required by the board of directors, all
or certain officers shall give the corporation a bond in such form, in
such sum, and with such surety or sureties as shall be satisfactory to
the board for the faithful performance of the duties of his office and
for the restoration to the corporation, in case of his death,
resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or
under his control belonging to the corporation.
<PAGE>
ARTICLE VII
CERTIFICATES AND STOCKHOLDERS
7.01 Certificates. The corporation shall deliver certificates
representing all shares to which stockholders are entitled.
Certificates shall be consecutively numbered and shall be entered in the
books of the corporation as they are issued. Each certificate shall
state on the face thereof the holder's name, the number and class of
shares, the par value of shares or a statement that such shares are
without par value, and such other matters as may be required by law.
They shall be signed by the president or a vice president and such other
officer or officers as the board of directors shall designate, and may
be sealed with the seal of the corporation or a facsimile thereof. The
signature of any such officer may be facsimile. In case any officer who
has signed, of whose facsimile signature has been used on such
certificate, shall cease to be such officer of the corporation before
such certificate has been delivered by the corporation or its agents,
such certificate may nevertheless be issued and delivered with the same
effect as if he were still such officer at the date of issue.
7.03 Payment for Shares.
(a) Kind. The consideration for the issuance of shares
shall consist of money paid, labor done (including services actually
performed for the corporation), or property (tangible or intangible)
actually received. Neither promissory notes nor the promise of future
services shall constitute payment for shares.
(b) Valuation. In the absence of fraud in the transaction,
the judgment of the board of directors as to the value of consideration
received shall be conclusive.
(c) Effect. When consideration, as fixed by law, has been
paid, the shares shall be deemed to have been issued and shall be
considered fully paid and non-assessable.
(d) Allocation of Consideration. The consideration received
for shares shall be allocated by the board of directors, in accordance
with law, between stated capital and capital surplus accounts.
<PAGE>
7.04 Subscriptions. Unless otherwise provided in the subscription
agreement, subscription of shares, whether made before or after
organization of the corporation, shall be paid in full at such time or
in such installments and at such times as shall be determined by the
board of directors. Any call made by the board of directors for payment
on subscriptions shall be uniform as to all shares of the same series,
as the case may be. In case of default in the payment on any
installment or call when payment is due, the corporation may proceed to
collect the amount due in the same manner as any debt due to the
corporation.
7.05 Lien. For any indebtedness of a stockholder to the corporation,
the corporation shall have a first and prior lien on all shares of its
stock owned by him and on all dividends or other distributions declared
thereon.
7.06. Lost, Stolen or Destroyed Certificates. The corporation shall
issue a new certificate in place of any certificate for shares
previously issued if the registered owner of the certificate:
(a) Claim. Makes proof in affidavit form that it has been
lost or wrongfully taken or destroyed; and
(b) Timely Request. Requests the issuance of a new
certificate before the corporation has notice that the certificate has
been acquired by a purchaser for value in good faith and without notice
of an adverse claim; and
(c) Bond. Gives a bond in such form, and with such surety
or sureties, with fixed or open penalty, as the corporation may direct,
to indemnify the corporation (and its transfer agent and registrar, if
any) against any claim that may be made on account of the alleged loss,
destruction, or theft of the certificate; and
<PAGE>
(d) Other Requirements. Satisfies any other reasonable
requirements imposed by the corporation. When a certificate has been
lost, apparently destroyed or wrongfully taken, and the holder of record
fails to notify the corporation within a reasonable time after he has
notice of it, and the corporation registers a transfer of the shares
represented by the certificate before receiving such notification, the
holder of record is precluded from making any claim against the
corporation for the transfer or for a new certificate.
7.07 Registration of Transfer. The corporation shall register the
transfer of a certificate for shares presented to it for transfer if:
(a) Endorsement. The certificate is properly endorsed by
the registered owner or by his duly authorized attorney; and
(b) Guaranty and Effectiveness of Signature. The signature
of such person has been guaranteed by a national banking association or
member of the New York Stock Exchange, and reasonable assurance is
given that such endorsements are effective; and
(c) Adverse Claims. The corporation has no notice of an
adverse claim or has discharged any duty to inquire into such a claim;
and
(d) Collection of Taxes. Any applicable law relating to the
collection of taxes has been complied with; and
(e) Stop Transfer Orders and Legends. The corporation has
not issued a stop-transfer order or placed a legend on such certificate
restricting transfer; or, if legended, the registered owner has complied
with the conditions for transfer provided for in the legend.
<PAGE>
ARTICLE VIII
INDEMNIFICATION; INSURANCE
8.01 The Corporation shall indemnify any person who was, is, or is
threatened to be made a party to a proceeding (as defined below) by
reason of the fact that he or she (i) is or was a director or officer
of the Corporation or (ii) while a director or officer of the
Corporation, is or was serving at the request of the Corporation as a
director, officer, partner, venturer, member, proprietor, trustee,
employee, agent, or similar functionary of another foreign or domestic
corporation, partnership, joint venture, limited liability company,
sole proprietorship, trust, employee benefit plan or other enterprise,
to the fullest extent permitted under the NJBCA, as the same exists or
may hereafter be amended. Such right shall be a contract right and as
such shall run to the benefit of any director or officer who is
elected and accepts the position of director or officer of the
Corporation or elects to continue to serve as a director or officer of
the Corporation while this Article VIII is in effect. Any repeal or
amendment of this Article VIII shall be prospective only and shall not
limit the rights of any such director or officer or the obligations of
the Corporation in respect of any claim arising from or related to the
services of such director or officer in any of the foregoing
capacities prior to any such repeal or amendment to this Article VIII.
Such right shall include the right to be paid by the Corporation
expenses (including attorneys' fees) incurred in defending any such
proceeding in advance of its final disposition to the maximum extent
permitted under the NJBCA, as the same exists or may hereafter be
amended. If a claim for indemnification or advancement of expenses
hereunder is not paid in full by the Corporation within 60 days after
a written claim has been received by the Corporation, the claimant may
at any time thereafter bring suit against the Corporation to recover
the unpaid amount of the claim, and if successful in whole or in part,
the claimant shall also be entitled to be paid the expenses of
prosecuting such claim. It shall be a defense to any such action that
such indemnification or advancement of costs of defense are not
permitted under the NJBCA, but the burden of proving such defense
shall be on the Corporation. Neither the failure of the Corporation
(including its Board of Directors or any committee thereof,
independent legal counsel, or stockholders) to have made its
determination prior to the commencement of such action that
<PAGE>
indemnification of, or advancement of costs of defense to, the
claimant is permissible in the circumstances nor an actual
determination by the Corporation (including its Board of Directors or
any committee thereof, independent legal counsel, or stockholders)
that such indemnification or advancement is not permissible shall be a
defense to the action or create a presumption that such
indemnification or advancement is not permissible. In the event of
the death of any person having a right of indemnification under the
foregoing provisions of this Article VIII, such right shall inure to
the benefit of his or her heirs, executors, administrators, and
personal representatives. The rights conferred in this Article VIII
shall not be exclusive of any other right that any person may have or
hereafter acquire under any statute, bylaw, resolution of stockholders
or directors, agreement, or otherwise. The Corporation may
additionally indemnify any employee or agent of the Corporation to the
fullest extent permitted by law. As used herein, the term
"proceeding" means any threatened, pending, or completed action, suit,
or proceeding, whether civil, criminal, administrative, arbitrative,
or investigative, any appeal in such an action, suit, or proceeding,
and any inquiry or investigation that could lead to such an action,
suit, or proceeding.
8.11 Insurance. The corporation may purchase and maintain insurance on
behalf of any person who holds or who has held any position named in
By-Laws 8.01, against any liability incurred by him in any such
position, or arising out of his status as such, whether or not the
corporation would have power to indemnify him against such liability
under By-Laws 8.01-8.08.
8.12 Reports. Indemnification payments, advance payments and insurance
payments made under By-Laws 8.01-8.11 shall be reported in writing to
the stock holders of the corporation with the next notice of annual
meeting.
<PAGE>
ARTICLE IX.
GENERAL PROVISIONS
9.01 Dividends and Reserves.
(a) Declaration and Payment. Subject to statute and the
articles of incorporation, dividends may be declared by the board of
directors at any regular or special meeting and may be paid in cash, in
property, or in shares of the corporation. The declaration and payment
shall be at the discretion of the board of directors.
(b) Record Date. The board of directors may fix in advance
a record date for the purpose of determining stockholders entitled to
receive payment of any dividend, the record date to be not more than
fifty days prior to the payment date of such dividend, or the board of
directors may close the stock transfer books for such purpose for a
period of not more than fifty days prior to the payment date of such
dividend. In the absence of any action by the board of directors, the
date upon which the board of directors adopts the resolution declaring
the dividend shall be the record date.
(c) Reserves. By resolution the board of directors may
create such reserve or reserves out of the earned surplus of the
corporation as the directors from time to time, in their discretion,
think proper to provide for contingencies, or to equalize dividends, or
to repair or maintain any property of the corporation, or for any other
purpose they think beneficial to the corporation. The directors may
modify or abolish any such reserve in the manner in which it was
created.
9.02 Books and Records. The corporation shall keep correct and
complete books and records of account and shall keep minutes of the
proceedings of its stockholders and board of directors, and shall keep
at its registered office or principal place of business, or at the
office of its transfer agent, agent or registrar, a record of its
stockholders, giving the names and addresses of all stockholders and the
number and class of the shares held by each.
<PAGE>
9.03 Check and Notes. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other
person or persons as the board of directors may from time to time
designate.
9.04 Fiscal Year. The fiscal year of the corporation shall be fixed by
resolution of the board of directors.
9.05 Seal. The corporation seal (of which there may be one or more
exemplars) shall contain the name of the corporation and the name of the
state of incorporation. The seal may be used by impressing it or
reproducing a facsimile of it, or otherwise.
9.06 Resignation. Any director, officer or agent may resign by giving
written notice to the president or the secretary. The resignation shall
take effect at the time specified therein, or immediately if no time is
specified therein. Unless otherwise specified therein, the acceptance
of such resignation shall not be necessary to make it effective.
9.07 Amendment of By-Laws. These By-Laws may be altered, amended, or
repealed at any meeting of the board of directors at which a quorum is
present, by the affirmative vote of a majority of the directors present
at such meeting, provided notice of the proposed alteration, amendment,
or repeal is contained in the notice of such meeting.
9.08 Construction. Whenever the context so requires, the masculine
shall include the feminine and neuter, and the singular shall include
the plural, and conversely. If any portion of these By-Laws shall be
invalid or inoperative, then, so far as is reasonable and possible:
(a) The remainder of these By-Laws shall be considered valid
and operative.
(b) Effect shall be given to the intent manifested by the
portion held invalid or inoperative.
9.09 Headings. The headings are for organization, convenience and
clarity. In interpreting these By-Laws, they shall be subordinated in
importance to the other written material.
<PAGE>
EXHIBIT 10 (i)
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT is made this 5th day of November 1999, by and between MAS
Acquisition IX Corp., a Indiana corporation ("MAS") and Airtrax, Inc.,
a New Jersey corporation ("AITX").
WITNESSETH:
WHEREAS, MAS and AITX desire to enter into this agreement and plan a merger
pursuant to the terms and conditions herein, and
WHEREAS, the Board of Directors of the MAS and AITX have approved, have
declared advisable and in the best interests of its stockholders to effect
the merger of MAS into AITX with AITX being the surviving corporate entity
pursuant to and in accordance with the terms and conditions herein ("Merger"),
WHEREAS, pursuant to the Merger, each issued and outstanding share of $.001
par value common stock of MAS not directly or indirectly owned by AITX, will
be converted into 0.01348 share of no par value common stock of AITX ("AITX
Shares"),
WHEREAS, as an additional inducement for AITX to enter into this agreement,
MAS Financial Corp. ("MAS Financial") desires to make certain representations
and warranties as provided herein, and
WHEREAS, for federal income tax purposes, its intended that the Merger shall
qualify as a reorganization within the meaning of Section 386(a) (1)(A) of
the Internal Revenue Code of 1986, as amended,
NOW THEREFORE, in consideration of the mutual covenants, terms and conditions
contained herein, the parties do hereby covenant, warrant and agree as
follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall have
the meanings ascribed thereto:
"AITX Shares" shall mean any share of no par value common stock of AITX.
"Certificate of Merger" shall mean the Certificate of Merger executed and
filed in accordance with the provisions of the NJBCA (as defined herein) and
IBCL (as defined herein).
"Dissenting Share" shall mean any share which any stockholder of MAS who or
which has exercised his or its appraisal rights under IBCL hold of record.
"Exchange Agent" shall mean a bank or trust agent selected by the AITX and
the MAS.
"IBCL" shall mean the Indiana Business Corporation Law.
"MAS Share" shall mean any share of $.001 par value common stock of MAS.
"NJBCA" shall mean the New Jersey Business Corporation Act.
2. THE MERGER
Section 2.01 THE MERGER. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the NJBCA and IBCL, MAS shall
be merged with and into AITX at the Effective Time (as defined herein), and
AITX shall be the surviving corporate entity ("Surviving Corporation").
Section 2.02 EFFECTIVE TIME OF MERGER. The parties acknowledge that it is in
their mutual interests to effect the Merger as soon as practicable after the
date hereof. Accordingly, the parties shall use all reasonable efforts to
MAS / Airtrax
Page 1 of 21 Pages Initial each page MAS: A.T. AITX P.A.
<PAGE>
bring to satisfaction all of the conditions set forth in Sections 6 and 7 and
otherwise effect the Merger as soon as possible. Subject to the terms and
conditions hereof, as soon as practicable after all of the conditions set
forth in Sections 6 and 7 are satisfied, the parties hereto will (i) file the
Certificate of Merger with the Secretary of State of New Jersey and the
Secretary of State of Indiana, and (ii) make all other filings or recordings
required under the NJBCA and IBCL. The Merger will be effective at such time
as the Certificate of Merger is duly filed with the Secretary of State for
both New Jersey and Indiana or such other time as MAS and AITX may agree and
as filed in the Certificate of Merger ("Effective Time"). The Effective Time
will immediately follow the Closing Date (as defined herein).
Section 2.03 CERTIFICATE OF INCORPORATION. The Certificate of Incorporation
of AITX as in effect immediately prior to the Effective Time shall be the
Certificate of Incorporation of the Surviving Corporation following the
Effective Time, until duly amended.
Section 2.04 BY-LAWS. The By-Laws of AITX as in effect immediately prior to
the Effective Time shall be the By-Laws of the Surviving Corporation, until
duly amended.
Section 2.05 OFFICERS AND DIRECTORS OF AITX. As of the Effective Time, (i)
the officers and directors of the Surviving Corporation shall be:
Peter Amico Chairman and President
D. Barney Harris Vice President
John C. Watt Secretary
and (ii) the officers and directors of MAS shall resign in all capacities.
Section 2.07 EFFECTS OF MERGER. The Merger shall have the effects set forth
in NJBCA and IBCL.
Section 2.08 EFFECT OF MERGER ON CAPITAL STOCK. At the Effective Time, by
virtue of the Merger and without any action on the part of any holder of any
capital stock of the MAS and AITX:
(a). Conversion of MAS Shares. Each issued and outstanding MAS Share
(other than any Dissenting Shares or shares held by AITX), whether or not
certificates for such shares have been issued to such holder, shall be
converted into the right to receive 0.01348 of a share of duly authorized,
validly issued, fully paid and non-assessable AITX Share
("Conversion Ratio"), provided that, the Conversion Ratio shall be subject to
equitable adjustments in the event of any stock split, stock dividend,
reverse stock split, or other change in the number of outstanding shares of
MAS Shares.
(b). Rights of Dissenters. Each Dissenting Share shall be converted
into the right to receive payment from the Surviving Corporation with respect
thereto in accordance with IBCL, and
(c). AITX Owned Shares. Each MAS Share owned by AITX shall be
canceled.
Each AITX Share issued and outstanding at and as of the Effective Date will
remain issued and outstanding. Upon such conversion, all MAS Shares shall be
canceled and cease to exist, and the holders of a certificate representing
such shares shall cease to have any rights with respect thereto, except for
the right to receive the number of whole AITX Shares to be issued in
consideration therefor upon the surrender of the certificate in accordance
with Section 2.10. The parties acknowledge that the AITX Shares to be
received as provided herein will be restricted securities under federal and
state securities laws and will bear a customary restrictive legend on the
stock certificates evidencing such AITX Shares.
Section 2.09 EXCHANGE OF CERTIFICATES. As soon as practicable after the
Effective Time, AITX will deposit with the Exchange Agent certificates
representing the number of AITX Shares required to effect the conversions
referred to in Section 2.08 (a).
Section 2.10 EXCHANGE PROCEDURE. As soon as practicable after the Effective
Time, the Exchange Agent shall mail to each stockholder of record of MAS
immediately prior to the Effective Time whose stock ownership interests were
converted into shares of AITX Shares (collectively, the "Converted Shares")
pursuant to Section 2.08 (a), (i) a form letter of transmittal which shall
specify that their respective ownership of the MAS Shares has been cancelled
MAS / Airtrax
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<PAGE>
in exchange for the Conversion Shares pursuant to the Conversion Ratio, and
(ii) enclosing the Conversion Shares issued in accordance with the Conversion
Ratio.
Section 2.11 DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No dividends
or other distributions declared or made after the Effective Time with respect
to AITX Shares with a record date after the Effective Time shall be paid to
the former MAS stockholder (other than a shareholder of record) with respect
to such AITX Shares represented thereby until the purported holder of record
provides sufficient evidence to AITX. Subject to the effect of unclaimed
property, escheat and other applicable laws, upon providing sufficient
evidence to AITX, there shall be paid to the holder of the certificates
representing whole AITX Shares issued in exchange therefor, without interest,
at the appropriate payment date, the amount of dividends or other
distributions with a record date after the Effective Time but prior to
surrender and a payment date subsequent to surrender payable with respect to
such whole number of AITX Shares.
Section 2.12 CLOSING OF TRANSFER BOOKS. From and after the Effective Time,
the stock transfer books of the MAS shall be closed and no transfer of any
MAS Shares shall thereafter be made. If after the Effective Time any
certificates evidencing shares of MAS Shares are presented to the AITX's
transfer agent for registration of transfer, they shall be canceled and
exchanged for certificates representing the number of whole shares of AITX
Shares determined in accordance with this Section 2.
Section 2.13 ADDITIONAL UNDERTAKINGS. Concurrent with the execution hereof
and from time to time thereafter, the parties hereto shall execute such
additional instruments and take such additional action as such other
party(ies) make reasonably request in order to effectuate the purpose and
intent of this Agreement.
Section 2.14 CLOSING. The closing of the transaction contemplated in this
Agreement (the "Closing") shall take place at the offices of MAS Acquisition
IX Corp, 1710 E. Division St., Evansville, Indiana 47711 on or about the date
first written above or at such other date, time or place as shall be mutually
acceptable to the parties (the "Closing Date").
3. REPRESENTATIONS AND WARRANTIES OF MAS AND MAS FINANCIAL. MAS and
MAS Financial, each jointly and severally, represents, covenants and warrants
to AITX as of this date and as of the Closing Date as follows:
Section 3.1 CORPORATE EXISTENCE/STANDING/AUTHORITY. MAS is a Indiana
corporation duly organized, validly existing and in good standing under the
laws of the State of Indiana and has the corporate power and authority to
own, operate and lease its respective properties, to carry on its business
as now being conducted, and to enter into this Agreement and to carry out the
transactions contemplated hereby. MAS is duly qualified to do business and is
in good standing in each jurisdiction where the failure to qualify would have
a material adverse affect on it. MAS has delivered to AITX or its counsel
true and correct copies of the articles of incorporation and by-laws of MAS,
together with any amendments thereto.
Section 3.2 SHARES OF STOCK. All issued and outstanding shares of capital
stock of MAS have been duly authorized and validly issued and are fully paid
and nonassessable. MAS has 80,000,000 shares of common stock authorized of
which 8,519,800 shares of common stock are issued and outstanding and
20,000,000 shares of preferred stock authorized with no shares of preferred
stock issued and outstanding. There is no other class of capital stock,
subscription, option, warrant, call, right, contract, commitment,
understanding or arrangement relating to the issuance, sale or transfer by
MAS of any shares of its capital stock, including any right of conversion or
exchange under any outstanding security or other instrument.
Section 3.3 AUTHORITY. MAS has the full right and authority to enter into and
fully perform this Agreement and all other agreements and documents to be
delivered to AITX in connection herewith. All actions required to be taken by
MAS to authorize the execution, delivery and performance of this Agreement
and all other agreements and documents to be delivered in connection herewith
have been or will by the Closing Date be properly taken. This Agreement
constitutes the valid and binding obligation of MAS. Neither the execution
and delivery of this Agreement and all other agreements and documents
executed in connection herewith nor the consummation of the transactions
contemplated hereby nor the performance of this Agreement and all other
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<PAGE>
agreements and documents executed in connection herewith will (1) conflict
with or result in a breach of any provision of the certificate of
incorporation or by-laws of MAS, (2) violate, conflict with, or result in a
breach of any provision of, 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 or in a right of termination or cancellation of, or
accelerate the performance or the payment of money required by, or result in
the creation of any lien, security interest, charge or encumbrance upon any
of MAS's properties under any of the terms, conditions or provisions of any
loan agreement, note, bond, mortgage, indenture, lease, agreement or other
instrument or commitment to which MAS is a party, or by which MAS or its
properties may be bound or affected or (3) violate any order, writ,
injunction, decree, judgment, or ruling of any court or governmental
authority specifically applicable to MAS or any of its properties.
Section 3.4 NO VIOLATION. To the best knowledge of MAS and MAS Financial,
MAS has complied with all rules, regulations, codes and laws affecting its
business and operations and is not in default under, or in violation of, any
provision of any federal, state or local rule, regulation, code or law nor
has MAS been given notice of any such default or violation.
Section 3.5 LICENSES AND RIGHTS. MAS possesses all franchises, easements,
licenses, permits and other authorizations from governmental or regulatory
authorities and from all other persons or entities that are necessary to
permit it to engage in its business as presently conducted in and at all
locations and places where it is presently operating.
Section 3.6 CONSENTS. There are no approvals or consents of any person, firm
or other entity or body required to be obtained by MAS for the authorization
of this Agreement or the consummation by MAS of the transactions contemplated
hereby.
Section 3.7 NO DEFAULTS. To the best knowledge of MAS and MAS Financial, no
default (or event which with the passage of time or the giving of notice or
both would become a default) exists or is alleged to exist with respect to
the performance of any material obligation of MAS under the terms of any
material indenture, license, mortgage, deed of trust, lease, note, guaranty
or other contract or instrument to which MAS is a party or to which its
assets are subject, or by which it is otherwise bound, and no such default or
event exists or is alleged to exist with respect to the performance of any
obligation of any other party thereto.
Section 3.8 FINANCIAL STATEMENTS. AITX has been or will be furnished with the
audited financial statements of MAS for the period ended December 31, 1998,
and the unaudited financial statements for the nine month period ended
September 30, 1999 (the "Financial Statements"). The Financial Statements
were prepared in accordance with generally accepted accounting principles
and present fairly and accurately the information set forth therein.
Section 3.9 ABSENCE OF CERTAIN CHANGES. Since September 30, 1999December 31,
1998, MAS has actively conducted its business in the ordinary and regular
course. Since that date, there has not been any material adverse change in
the condition (financial or otherwise), results of operations, assets,
liabilities, properties, business or prospects of MAS nor is any event
threatened which would cause such an adverse change, nor has there occurred
any event or governmental regulation or order restricting the business of MAS.
Section 3.10 FACILITIES AND EQUIPMENT. The personal property owned or leased
by MAS at its facility for the operation of, or used in, its business is in
its possession or under its control and is adequate for the operation of such
business as presently conducted.
Section 3.11 TITLE TO ASSETS. Except as set forth in the Financial
Statements, MAS has good, valid and marketable title to all of its real
property and leasehold estates and good and valid title to all of its other
assets (tangible and intangible), including, but not limited to, all
leasehold improvements and equipment and all other properties and assets
reflected or required to be reflected in the Financial Statements and all
properties and assets purchased or leased by it since the dates of such
Financial Statements (except for properties and assets so reflected or
required to be reflected which have been sold or otherwise disposed of
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<PAGE>
in the ordinary course of business), subject to no liens, pledges,
encumbrances, mortgages, security interests, charges or other similar
restrictions of any nature whatsoever.
Section 3.12 ABSENCE OF UNDISCLOSED LIABILITIES. MAS does not have any
material liabilities or obligations, either accrued or unaccrued, fixed or
contingent, which have not been reflected in the Financial Statements.
Section 3.13 LITIGATION. There is no action, suit, claim, demand, arbitration
or other proceeding, administrative or judicial, pending or, to the best
knowledge of MAS, threatened against or relating to MAS which, if adversely
determined or resolved, would materially and adversely affect the financial
condition, results of operations, business or prospects of MAS.
Section 3.14 PATENTS AND TRADEMARKS.
(a) MAS does not own, or operate under, any patent, trademark or service
mark or any applications therefor. All trade names (including those whose use
is limited to one or more states of the United States) owned or used by MAS
are listed on Schedule 3.14 hereof and, to the extent indicated therein, have
been duly registered with the states of the United States or the
corresponding offices of other countries.
(b) MAS has not ever been charged with infringement or violation of any
adversely held trademark, trade name or copyright.
(c) There are no claims or demands of any other person, firm or
corporation pertaining to the trade names, copyright registrations or pending
copyright registration applications, as the case may be, listed on such
schedules, and no proceedings have been instituted which challenge the right
of MAS in respect thereof.
Section 3.15 EMPLOYEE BENEFITS.
(a) Schedule 3.15 hereof contains a list of (i) each pension, profit
sharing, bonus, deferred compensation, or other retirement plan or
arrangement for the benefit of any employee or group of employees of MAS or
any independent contractors or group of independent contractor of MAS, (ii)
each medical, health, disability, insurance or other plan or arrangement of
MAS, and (iii) each employee stock option plan or other plan providing for
the purchase of shares of capital stock of MAS. All of such plans and
arrangements of MAS are referred to herein as the "employee benefit plans".
(b) The amounts reflected in the Financial Statements as liabilities or
contingent liabilities with respect to employee benefit plans have been
calculated Iin accordance and compliance with applicable law, including
accounting principles relating thereto.
(c) All of the employee benefit plans maintained by MAS (and each funding
medium which may be attendant thereto) are in compliance with applicable law
and all reporting and disclosure requirements under applicable laws and
regulations, and have been administered and operated in accordance with their
respective provisions and applicable law. There are no actions, suits or
claims (other than routine claims for benefits) pending with respect to the
employee benefit plans.
(d) MAS has filed, published and disseminated all reports, documents,
statements and communications which are required to be filed, published or
disseminated under applicable law and the rules and regulations promulgated
thereunder relating to, and have timely made all modifications and amendments
to, the employee benefit plans.
Section 3.16 TAXES AND TAX RETURNS. MAS has duly filed all income, franchises
and other tax returns and reports required to be filed by it and has duly
paid or made provisions for the payment of all taxes (including any interest
or penalties) which are due and payable pursuant to such returns. MAS has
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<PAGE>
withheld proper and accurate amounts from their employees' compensation in
substantial compliance with all withholding and similar provisions of
applicable law. There are and will hereafter be no tax deficiencies
(including penalties and interest) of any kind assessed against MAS with
respect to any period ending on or before the Closing Date. MAS will have
provided AITX copies of all federal and state tax returns or evidence of its
non filing status.
Section 3.17 CONTRACTS. MAS has heretofore furnished to AITX or its counsel
true and complete copies of each document, and a written description of each
oral contact, set forth on Schedule 3.17 hereof. Schedule 3.17 is a true and
complete list of all contracts, understandings, commitments, arrangements and
agreements of the following types, including all amendments thereto to which
MAS is a party:
(a) Contracts relating to equipment purchases, or series of similar
equipment purchases from the same supplier, involving an expenditure of, or
if in a series, expenditures in the aggregate of, more than onetwenty-five
thousand dollars ($251,000);
(b) Bonus, incentive, pension, profit sharing, hospitalization, insurance,
deferred compensation, retirement, stock option or stock purchase plans or
similar plans providing employee benefits;
(c) Factoring, loan, note, financing or similar contracts with any lenders
or guarantees of undertakings to answer for the debts or defaults of another,
or any contracts encumbering title to any properties, involving in each case,
or if in a series involving the same lender, guarantor or property, as the
case may be, iIn the aggregate, at least one twenty-five thousand dollars
($251,000);
(d) contracts for the acquisition or disposition of a business or
substantially all of the property, assets or capital stock or other
securities of a business or company under which there are continuing or
unperformed obligations on the part of any of the parties hereto, which
contracts in each case involve at least twenty-five thousand dollars
($25,000);
(e) Conditional sales contracts, leases of personal property or contracts
for the purchase or sale of real or personal property, involving in each case
at least one twenty-five thousand dollars ($251,000);
(f) Management or consulting contracts, involving in each case, or with
respect to any individual in the aggregate, at least one twenty-five thousand
dollars ($251,000);
(g) Contracts for the furnishing of services or products to or by MAS,
involving an expenditure in each case of at least one twenty-five thousand
dollars ($251,000);
(h) Royalty or licensing contracts or contracts requiring similar payments
to unrelated parties individually, or with respect to any unrelated party in
the aggregate, involving or which reasonably may in the future involve an
amount in excess of one twenty-five thousand dollars ($125,000) annually;
(i) All employment agreements between MAS and any of its employees; and
(j) All agreements, contracts and commitments not listed on any other
schedule hereto which individually involve the payment of onetwenty-five
thousand dollars ($251,000) or more.
Except as set forth on Schedule 3.17, all such contracts, understandings,
commitments, arrangements and agreements are in full force and effect.
Section 3.18 COLLECTIVE BARGAINING AGREEMENTS. MAS has no collective
bargaining agreements with any labor organization to which MAS is a party.
Section 3.19 INSURANCE. MAS maintains no insurance.
Section 3.20 REAL PROPERTY. MAS has no real property.
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<PAGE>
Section 3.21 MATERIAL MISSTATEMENTS OR OMISSIONS. No representations or
warranties made by MAS under this Agreement or in any certificate, schedule
or other document furnished to be furnished to AITX or its counsel pursuant
hereto, or in connection with the transactions contemplated by this
Agreement, contains or will contain any untrue statement of a material fact,
or omits or will omit to state a material fact necessary to make the
statements of fact contained therein not misleading.
Section 3.22 FEDERAL SECURITIES LAWS.
(a). MAS has filed a Form 10 SB Registration Statement (including any
amendments under Form 10 SB/A) (collectively the "Filing") with the
Securities and Exchange Commission ("Commission"), and the Filing has reach
a "no comment" status from the Commission. Consequently, the Company' is
deemed a "reporting company" as that term is defined under the federal
securities laws.
(b). MAS and its affiliates and control persons have filed all reports and
filings with the Commission as required by the federal securities laws.
(c). To the best of their knowledge, neither party is aware of any facts,
circumstances, rule or regulation that would adversely affect or otherwise
prohibit the intent of the parties or the actions contemplated herein.
Section 3.23. NON DISTRIBUTIVE INTENT. To the best of their knowledge, each
shareholder of MAS is acquiring the AITX Shares for its own account (and not
for the account of others) for investment purposes and not with a view to
resell or distribute.
4. REPRESENTATIONS AND WARRANTIES OF AITX. AITX represents, covenants and
warrants to MAS as follows:
Section 4.1 CORPORATE EXISTENCE/STANDING/AUTHORITY. AITX is a New Jersey
corporation duly organized, validly existing and in good standing under the
laws of New Jersey and has the corporate power and authority to own, operate
and lease its respective properties, to carry on its business as now being
conducted, and to enter into this Agreement and to carry out the transactions
contemplated hereby. AITX is duly qualified to do business and is in good
standing in each jurisdiction were the failure to qualify would have a
material adverse affect on it. AITX has delivered to MAS or its counsel true
and correct copies of the articles of incorporation and by-laws of AITX,
together with any amendments thereto.
Section 4.2 SHARES OF STOCK. AITX has authorized 500,000 shares of Preferred
Stock of which 275,000 shares are issued and outstanding and 5,000,000 shares
of Common Stock of which 4,196,311 are issued and outstanding. AITX agrees to
acquire all of the "MAS Shares" for 114,867 shares of common stock of AITX
("AITX Shares") by exchanging 0.01348 AITX Shares for each MAS Share
(issued and outstanding). All issued and outstanding shares of capital stock
of AITX have been duly authorized and validly issued and are fully paid and
non-assessable. There is no subscription, option, warrant, call, right,
contract commitment, understanding or arrangement relating to the issuance,
sale or transfer by AITX of any shares of its capital stock, including any
right of conversion or exchange under any outstanding security or other
instrument.
Section 4.3 AUTHORITY. AITX has the full right and authority to enter into
and fully perform this Agreement and all other agreements and documents to be
delivered to MAS in connection herewith. All actions required to be taken by
AITX to authorize the execution, delivery and performance of this Agreement
and all other agreements and documents to be delivered in connection herewith
have been or will by the Closing Date be properly taken. This Agreement
constitutes the valid and binding obligation of AITX. Neither the execution
and delivery of this Agreement and all other agreements and documents
executed in connection herewith nor the consummation of the transactions
contemplated hereby nor the performance of this Agreement and all other
agreements and documents executed in connection herewith will (1) conflict
with or result in a breach of any provision of the certificate of
incorporation or by-laws of AITX, (2) violate, conflict with, or result in a
breach of any provision of, 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 or in a right of termination or cancellation of, or
accelerate the performance or the payment of money required by, or result in
the creation of any lien, security interest, charge or encumbrance upon any
of AITX's properties under any of the terms, conditions or provisions of any
loan agreement, note, bond, mortgage, indenture, lease, agreement or other
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<PAGE>
instrument or commitment to which AITX is a party, or by which AITX or its
properties may be bound or affected or (3) violate any order,' writ,
injunction, decree, judgment, or ruling of any court or governmental
authority specifically applicable to AITX or any of its properties.
Section 4.4 NO VIOLATION. Except as set forth on Schedule 4.4, to the best
knowledge of AITX, AITX has complied with all rules, regulations, codes and
laws affecting its business and operations and is not in default under, or in
violation of, any provision of any federal state or local rule, regulation,
code or law nor has AITX been given notice of any such default or violation.
Section 4.5 LICENSES AND RIGHTS. Except as set for on Schedule 4.5 hereto,
AITX possesses all franchises, easements, licenses, permits and other
authorizations from governmental or regulatory authorities and from all other
persons or entities that are necessary to permit it to engage in its business
as presently conducted in and at all locations and places where it is
presently operating. Such franchises, licenses, permits and other
authorizations are set forth on Schedule 4.5.
Section 4.6 CONSENTS. Except as set forth on Schedule 4.6 hereto, no
approval or consent of any person, firm or other entity or body is required
to be obtained by AITX for the authorization of this Agreement or the
consummation by AITX of the transactions contemplated hereby.
Section 4.7 NO DEFAULTS. Except as set forth on Schedule 4.7, to the best
knowledge of AITX, no default (or event which with the passage of time or
the giving of notice or both would become a default) exists or is alleged to
exist with respect to the performance of any obligation of AITX under the
terms of any indenture, license, mortgage, deed of trust, lease, note,
guaranty or other contract or instrument, including, but not limited to, any
contract set forth on Schedule 4.17, to which AITX is a party or to which its
assets are subject, or by which it is otherwise bound, and no such default or
event exists or is alleged to exist with respect to the performance of any
obligation of any other party thereto.
Section 4.8 FINANCIAL STATEMENTS. MAS has been or will be furnished with
unaudited financial statements of AITX for the year ended December 31, 1998
and the unaudited financial statements for the nine month period ending
September 30, 1999 , (the "Financial Statements"). The Financial Statements
were prepared in accordance with generally accepted accounting principles
applied on a basis consistent with prior periods and as of their date of
issuance were or will be true, correct and complete all material respects and
present fairly and accurately the information set forth therein.
Section 4.9 ABSENCE OF CERTAIN CHANGES. Since September 31, 1999, AITX has
actively conducted its business in the ordinary and regular course. Since
that date, there has not been any material adverse change in the condition
(financial or otherwise), results of operations, assets, liabilities,
properties, business or prospects of AITX nor is any event threatened which
would cause such an adverse change, nor has there occurred any event or
governmental regulation or order restricting the business of AITX.
Section 4.10 FACILITIES AND EQUIPMENT. AITX does not own any personal
property owned or leased any facility for its operation except as noted in
the financial statements.
Section 4.11 TITLE TO ASSETS. AITX does not own any tangible property except
as noted in the financial statements.
Section 4.12 ABSENCE OF UNDISCLOSED LIABILITIES. AITX does not have any
material liabilities or obligations, either accrued or unaccrued, fixed or
contingent, which have not been reflected in the Financial Statements or set
forth on Schedule 4.12 hereof.
Section 4.13 LITIGATION. Schedule 4.13 hereof sets forth a list of all
administrative or judicial proceedings to which AITX is a party. Except as
set forth on Schedule 4.13, there is no action, suit, claim, demand,
arbitration or other proceeding, administrative or judicial, pending or, to
the best knowledge of AITX, threatened against or relating to AITX which, if
adversely determined or resolved, would materially and adversely affect the
financial condition, results of operations, business or prospects of AITX.
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Section 4.14 PATENTS AND TRADEMARKS.
(a) Except as set forth on Schedule 4.14(a), AITX does not own, or operate
under, any patent, trademark or service mark or any applications therefore.
All trade names (including those whose use is limited to one or more states
of the United States) owned or used by AITX are listed on Schedule 4.14
hereof and, to the extent indicated therein, have been duly registered with
the states of the United States or the corresponding offices of other
countries. Except as set forth on Schedule 4.14, AITX is the sole and
exclusive owner of, or has the sole and exclusive power with respect to, or
has the sole and exclusive right to use, the trade names specified on
Schedule 4.14.
(b) Except as set forth on Schedule 4.14(b) hereof, AITX has not ever been
charged with infringement or violation of any adversely held trademark, trade
name or copyright.
(c) Except as set forth on Schedules 4.14(a) and 4.14(b), there are no
claims or demands of any other person, firm or corporation pertaining to the
trade names, copyright registrations or pending copyright registration
applications, as the case may be, listed on such schedules, and no
proceedings have been instituted which challenge the right of AITX in respect
thereof.
Section 4.15 EMPLOYEE BENEFITS.
(a) Schedule 4.15 hereof contains a list of (i) each pension, profit
sharing, bonus, deferred compensation, or other retirement plan or
arrangement for the benefit of any employee or group of employees of AITX or
any independent contractors or group of independent contractor of AITX, (ii)
each medical, health, disability, insurance or other plan or arrangement of
AITX, and (iii) each employee stock option plan or other plan providing for
the purchase of shares of capital stock of AITX. All of such plans and
arrangements of AITX are referred to herein as the "employee benefit plans".
(b) The amounts reflected in the Financial Statements as liabilities or
contingent liabilities with respect to employee benefit plans have been
calculated in accordance and compliance with applicable law, including
accounting principles relating thereto, excepting the stock options or other
benefits of the above notes employees or sub-contractors may not be listed
as contingent liabilities.
(c) All of the employee benefit plans maintained by AITX (and each funding
medium which may be attendant thereto) are in compliance with applicable law
and all reporting and disclosure requirements under applicable laws and
regulations, and have been administered and operated in accordance with their
respective provisions and applicable law. There are no actions, suits or
claims (other than routine claims for benefits) pending with respect to the
employee benefit plans.
(d) AITX has filed, published and disseminated all reports, documents,
statements and communications which are required to be filed, published or
disseminated under applicable law and the rules and regulations promulgated
thereunder relating to, and have timely made all modifications and amendments
to, the employee benefit plans.
Section 4.16 TAXES AND TAX RETURNS. AITX has duly filed all income, franchise
and other tax returns and reports required to be filed by it and has duly
paid or made provision for the payment of all taxes (including any interest
or penalties) which are due and payable pursuant to such returns. AITX has
withheld proper and accurate amounts from their employees' compensation in
substantial compliance with all withholding and similar provisions of
applicable law. There are and will hereafter be no tax deficiencies
(including penalties and interest) of any kind assessed against AITX with
respect to any period ending on or before the Closing Date. AITX has
furnished MAS with copies of all state and federal tax returns.
Section 4.17 CONTRACTS. AITX has heretofore furnished to MAS or its counsel
true and complete copies of each document, and a written description of each
oral contact, set forth on Schedule 4.17 hereof. Schedule 4.17 is a true and
complete list of all contracts, understandings, commitments, arrangements and
agreements of the following types, including all amendments thereto to which
AITX is a party:
(a) Contracts relating to equipment purchases, or series of similar
equipment purchases from the same supplier, involving an expenditure of,
or if in a series, expenditures in the aggregate of, more than $25,000;
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(b) Bonus, incentive, pension, profit-sharing, hospitalization, insurance,
deferred compensation, retirement, stock option or stock purchase plans or
similar plans providing employee benefits; to be supplied.
(c) Factoring, loan, note, financing or similar contracts with any lenders
or guarantees of undertakings to answer for the debts or defaults of another,
or any contracts encumbering title to any properties, involving in each case,
or if in a series involving the same lender, guarantor or property, as the
case may be, in the aggregate, at least $25,000;
(d) Contracts for the acquisition or disposition of a business or
substantially all of the property, assets or capital stock or other
securities of a business or company under which there are continuing or
unperformed obligations on the part of any of the parties hereto, which
contracts in each case involve at least $25,000;
(e) Conditional sales contracts, leases of personal property or contracts
for the purchase or sale of real or personal property, involving in each case
at least twenty-five thousand dollars ($25,000);
(f) Management or consulting contracts, involving in each case, or with
respect to any individual in the aggregate, at least twenty-five thousand
dollars ($25,000);
(g) Contracts for the furnishing of services or products to or by AITX,
involving an expenditure in each case of at least twenty-five thousand
dollars ($25,000);
(h) Royalty or licensing contracts or contracts requiring similar payments
to unrelated parties individually, or with respect to any unrelated party in
the aggregate, involving or which reasonably may in the future involve an
amount in excess of twenty-five thousand dollars ($25,000) annually;
(i) All employment agreements between AITX and any of its employees;
and to be supplied.
(ii) All agreements, contracts and commitments not listed on any other
schedule hereto which individually involve the payment of twenty-five
thousand dollars ($25,000) or more.
Except as set forth on Schedule 4.17, all such contracts, understandings,
commitments, arrangements and agreements are in full force and effect.
Section 4.18 COLLECTIVE BARGAINING AGREEMENTS. There are no collective
bargaining agreements with any labor organization to which AITX is a party.
The relations of AITX with its employees are good and there are no impending
labor difficulties.
Section 4.19 INSURANCE. AITX maintains has Officer and Director liability,
workers compensation liability and automobile insurance.
Section 4.20 REAL PROPERTY. AITX does not own nor lease any real property.
Section 4.21 MATERIAL MISSTATEMENTS OR OMISSIONS. No representations or
warranties made by AITX under this Agreement or in any certificate, schedule
or other document furnished or to be furnished to MAS or its counsel pursuant
hereto, or in connection with the transactions contemplated by this
Agreement, contains or will contain any untrue statement of a material fact,
or omits or will omit to state a material fact necessary to make the
statements of fact contained therein not misleading.
5. COVENANTS AND TRANSACTIONS PRIOR TO CLOSING.
Section 5.1 CONDUCT AND TRANSACTIONS OF MAS PRIOR TO THE CLOSING.
Between the date of this Agreement and the Closing, the executive officers
and board of directors of MAS shall retain full control of the management and
business thereof. In order to assure protection and preservation of MAS's
business as well as MAS's performance of its obligations under and related to
this Agreement, MAS agrees that from the date of this Agreement up to and
including the Closing;
(a) MAS shall give AITX, its counsel, accountants, appraisers and other
representatives or experts retained by AITX full access on reasonable notice
to all the premises and books, records and personnel of MAS during normal
business hours and cause MAS to furnish to AITX such financial and operating
data and other information with respect to the business and properties of MAS
as AITX may from time to time reasonably request. In the event of termination
of this Agreement for any reason, AITX will return all
MAS / Airtrax
Page 10 of 21 Pages Initial each page MAS: A.T. AITX P.A.
<PAGE>
documents, work papers and other materials obtained from MAS or MAS and will
not further disclose to third parties any confidential information obtained
by it pursuant hereto.
(b) MAS shall use all reasonable efforts to (i) preserve intact the
present business organization and personnel of MAS, (ii) preserve the present
goodwill and advantageous relationships of MAS with all persons having
business dealings with MAS, and (iii) preserve and maintain in force all
licenses, certificates, leases, contracts, permits, registrations,
franchises, confidential trade names and copyrights, and applications for any
of same, bonds and other similar rights of MAS. Except as otherwise provided
in this Agreement, MAS shall refrain from entering into any new employment or
consulting agreements with any of its present officers, management personnel
or consultants, or any other employment or consulting agreement with any
other person, not terminable by MAS on less than thirty (30) days' notice.
MAS shall maintain in force all property, casualty, crime, life, directors,
officers and other forms of insurance and bonds which it presently carries
and, except with the written consent of AITX, no cancellation or assignment
of existing insurance coverage will be effected by MAS.
(c) MAS shall operate its business only in the usual, regular and ordinary
course and manner, and, except with the written consent of MAS, shall refrain
from (i) selling or agreeing to sell any capital stock, or (ii) except in the
ordinary course of business, encumbering or mortgaging any property or assets
or terminating or modifying any lease or incurring any obligation
(contingent or otherwise).
(d) MAS shall not discuss or negotiate with any third party a possible
sale of all or any part of the capital shares or assets of MAS, nor provide
any information to any third party with respect thereto, other than such
Information which is provided in the ordinary course of the business
operation of MAS to third parties, provided MAS has no reason to believe that
such information may be utilized to evaluate a possible sale of the capital
shares or assets of MAS.
(e) MAS will exert its best efforts to fulfill in a timely manner all
objectives and conditions to permit consummation of the transactions as
contemplated by this Agreement and execute and deliver to AITX any and all
documents necessary, in the reasonable opinion of its counsel, to consummate
the transactions contemplated by this Agreement.
Section 5.2 CONDUCT BY AITX PRIOR TO CLOSING. Between the date of this
Agreement and the Closing Date, AITX shall use its best efforts to fulfill in
a timely manner all objectives and conditions to permit consummation of the
transactions as contemplated by this Agreement and execute and deliver to
MAS any and all documents necessary, in the reasonable opinion of its
counsel, to consummate the transactions contemplated by this Agreement.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF AITX. The obligations of AITX
under this Agreement are, at its option, subject to satisfaction of the
following conditions at or prior to the Closing:
Section 6.1 REPRESENTATIONS OF MAS. The representations and warranties of MAS
set forth in this Agreement shall be true and complete in all material
respects on and as of the Closing to the same extent and with the same force
and effect as if made on such date, except as expressly provided to the
contrary in this Agreement.
Section 6.2 CONSENTS. All necessary approvals or consents shall have been
obtained from any and all federal departments and agencies and from all other
commissions, boards, agencies and from any other person, firm or entity whose
approval or consent is necessary to the consummation of the transactions
contemplated by this Agreement, including the approval of the transaction by
Board of Directors and the shareholders of MAS.
Section 6.3 PERFORMANCE BY MAS. MAS shall have duly performed all
obligations, covenants and agreements undertaken by them herein and complied
with all terms and conditions applicable to them hereunder to be performed
and complied with prior to the Closing.
MAS / Airtrax
Page 11 of 21 Pages Initial each page MAS: A.T. AITX P.A.
<PAGE>
Section 6.4 DOCUMENTS TO BE DELIVERED TO AITX. AITX shall have received:
(a) All of the books and records of MAS.
(b) A certificate, dated as of the Closing, and executed by the Secretary
of MAS certifying as to the fulfillment of the matters contained in Sections
6.1, 6.2 and 6.3;
(c) True and complete copy of the certificates of incorporation of MAS,
certified by the State of Indiana or similar office of competent
jurisdiction, and of the by-laws of MAS, together with all amendments
thereto, certified by the Secretary of MAS;
(d) Good standing certificate for MAS, certified by the Secretary of State
of Indiana;
(e) True and correct copies of minutes of the meeting of the Board of
Directors of MAS authorizing the officers and MAS to consummate the
transaction;
(f) Certificates representing 8,250,000 shares of common stock, duly
endorsed for transfer. All such shares shall be subject to Rule 144 legend;
(e). The resignation of the officers and directors of MAS, and
(f) The preparation by MAS of a Form 8-K and Schedule 14f-1, each in a
form acceptable to AITX's counsel.
Section 6.5 SUITS. No suit, action or other proceeding shall be threatened or
pending before any court or governmental agency in which it will be or it is
sought to restrain or prohibit or to obtain damages or other relief in
connection with this Agreement or the consummation of the transactions
contemplated by this Agreement or which is likely to materially and adversely
affect the financial condition, results of operations, business or prospects
of MAS.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF MAS. The obligations of MAS under
this Agreement are, at its option, subject to satisfaction of the following
conditions at or prior to the Closing:
Section 7.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of AITX set forth in this Agreement shall be true and complete in
all material respects on and as of the Closing to the same extent and with
the same force and effect as if made on such date, except as affected by the
transactions contemplated by this Agreement.
Section 7.2 CONSENTS. All necessary approvals or consents shall have been
obtained from any and all federal departments and agencies and from all other
commissions, boards, agencies and from any other person, firm or entity whose
approval or consent is necessary to the consummation of the transactions
contemplated by this Agreement, including the approval of the transaction by
the Board of Directors and shareholders of AITX.
Section 7.3 PERFORMANCE BY AITX. AITX shall have duly performed all
obligations, covenants and agreements undertaken by it herein and complied
with all the terms and conditions applicable to them hereunder to be
performed or complied with prior to the Closing.
Section 7.4 DOCUMENTS TO BE DELIVERED TO MAS. MAS shall have received:
(a) Certificate dated as of the Closing, and executed by the Secretary of
AITX, certifying as to the fulfillment of the matters contained in Sections
7.1, 7.2 and 7.3;
(b) Certificates representing 114,867 AITX Shares, duly endorsed for
transfer,
(c) True and complete copies of the certificate of incorporation of AITX
and of the by-laws of AITX, together with all amendments thereto, certified
by the Secretary of AITX;
(d) True and correct copies of minutes of the meeting of the Board of
Directors authorizing the officers and the AITX to consummate the
transaction.
Section 7.5 SUITS. No suit, action or other proceeding shall be threatened or
pending before any court or governmental agency in which it will be or it is
sought to restrain or prohibit or to obtain damages or other relief in
connection with this Agreement or the consummation of the transactions
contemplated by this Agreement.
MAS / Airtrax
Page 12 of 21 Pages Initial each page MAS: A.T. AITX P.A.
<PAGE>
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND INDEMNIFICATION.
Section 8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Notwithstanding the
closing of the transactions contemplated by this Agreement, or any
investigation made by or on behalf of MAS or AITX, the representations and
warranties of MAS or AITX contained in this Agreement or in any certificate,
schedule, chart, list, letter, compilation or other document delivered
pursuant hereto, shall survive the Closing for a period of one (1) year;
provided, however, that as to any breach of, or misstatement in, any such
representation or warranty as to which one party has given notice to the
other on or prior to the expiration of such one (1) year period, the same
shall continue to survive beyond said period, but only as to the matters
contained in such notice.
Section 8.2 MAS and MAS FINANCIAL INDEMNIFICATION. MAS and MAS Financial,
jointly and severally, covenant and agree to indemnify and save harmless
AITX and its directors, officers, employees and agents from any and all
costs, expenses, losses, damages and liabilities incurred or suffered
directly or directly by any of them (including reasonable legal fees and
costs) proximately resulting from or attributable to the breach of, or
misstatement in, any one or more of the representations or warranties of MAS
made in or pursuant to this Agreement.
Section 8.3 AITX INDEMNIFICATION. AITX covenants and agrees to indemnify and
save harmless MAS and its directors, officers, employees and agents from any
and all costs, expenses, losses, damages and liabilities incurred or suffered
by any of them (including reasonable legal fees and costs) proximately
resulting from or attributable to the breach of, or misstatement in, any one
or more of the representations or warranties of AITX made in or pursuant to
this Agreement.
Section 8.4 DEFENSE AGAINST ASSERTED CLAIMS. If any claim or assertion of
liability is made or asserted by a third party against a party indemnified
pursuant to this Article 8 ("Indemnified Party") based on any liability or
absence of right which, if established, would constitute a matter for which
the Indemnified Party would be entitled to indemnification by another party
hereto ("the Indemnifying Party") the Indemnified Party shall with
reasonable promptness give to the Indemnifying Party written notice of the
claim or asserting of liability and request the Indemnifying Party to defend
the same. Failure to so notify the Indemnifying Party shall not relieve the
Indemnifying Party of any liability which the Indemnifying Party might have
to the Indemnified Party unless such failure materially prejudices the
Indemnifying Party's position. The Indemnifying Party shall have the right
to defend against such liability or assertion, in which event the
Indemnifying Party shall give written notice to the Indemnified Party of the
acceptance of defense of such claim and the identity of counsel selected by
the Indemnifying Party with respect to such matters. The Indemnified Party
shall be entitled to participate with the Indemnifying Party in such defense
and also shall be entitled at its option to employ separate counsel for such
defense at the expense of the Indemnified Party. In the event the
Indemnifying Party does not accept the defense of the matter as provided
above or in the event that the Indemnifying Party or its counsel fails to use
reasonable care in maintaining such defense, the Indemnified Party shall have
the full right at its option to defend against the liability or assertion and
to employ counsel for such defense at the expense of the Indemnifying Party.
All parties hereto will cooperate with each other in the defense of any such
action and the relevant records of each shall be available to the others with
respect to such defense.
9. TERMINATION. In the event the parties are unable to effect a Closing of
the transactions contemplated herein on or before the Closing Date, then in
such event, this Agreement shall be deemed null and void and neither party
shall have any further obligation to the other party nor have any claims
against the other party.
10. ASSIGNMENT, THIRD PARTIES, BINDING EFFECT. The rights under this
Agreement shall not be assignable nor the duties delegable by any party
without the written consent of all parties hereto having been obtained
thereto. Nothing contained in this Agreement, express or implied, is intended
to confer upon any person or entity, other than the parties hereto, and their
successors in interest, any rights or remedies under or by reason of this
Agreement unless so stated expressly to the Contrary. All covenants,
MAS / Airtrax
Page 13 of 21 Pages Initial each page MAS: A.T. AITX P.A.
<PAGE>
agreements, representations and warranties of the parties contained herein
shall be binding upon and inure to the benefit of AITX and MAS and their
respective successors and permitted assigns.
11. ABANDONMENT. In the event the transactions contemplated hereby are
terminated or abandoned by mutual agreement of the parties hereto, there
shall be no liability on the part of any of the parties by reason of such
termination or abandonment.
12. NOTICES.
All notices, requests, demands and other communications hereunder shall be
writing and shall, be deemed to have been duly given when personally
delivered or deposited in the United States mail, certified or registered,
return receipt requested, postage prepaid, addressed to the parties at the
following addresses (or at such other address as shall be given in writing
by any party to the other) as follows:
To: Mr. Aaron Tsai
MAS Acquisition IX corp.
MAS Financial Corp.
1710 East Division Street
Evansville, Indiana 47711
Telephone: (812) 479-7266
Facsimile: (812) 479-7267
To: Mr. Peter Amico, Chief Executive Officer
Airtrax, Inc.
P. O. Box 868
Vineland, NJ 08362-0868
Telephone: (856) 327-8112
Facsimile: (856) 327-0395
13. REMEDIES NOT EXCLUSIVE. No remedy conferred by any of the provisions of
this Agreement is intended to be exclusive of any other remedy, and each and
every remedy shall be cumulative and shall be in addition to every remedy
given hereunder or now or hereafter existing, at law or in equity by statute
or otherwise. The election of any one or more remedies by AITX or MAS shall
not constitute a waiver of the right to pursue other available remedies.
14. COUNTERPARTS. This Agreement may be executed in one or more counterparts
each of which shall be deemed to be an original but all of which together
shall constitute one and the same instrument.
15. CAPTIONS AND SECTION HEADINGS. Captions and section headings used herein
are for convenience only and are not a part of this Agreement and shall not
be used in construing it.
16. WAIVERS. Any failure by any of the parties hereto to comply with all of
the obligations, agreements or conditions set forth herein may be waived by
the other party or parties, provided, however that any such waiver shall not
be deemed a waiver of any other obligation, agreement or condition contained
herein.
17. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties. There are not and shall not be any verbal statements,
representations, warranties, undertakings or agreements between the parties,
and this Agreement may not be amended or modified in any respect except by a
written instrument signed by the parties hereto.
18. APPLICABLE LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Indiana. AITX and MAS agree to the
jurisdiction of the Courts of the State of Indiana as the exclusive forum
for the resolution of any legal disputes between the parties.
MAS / Airtrax
Page 14 of 21 Pages Initial each page MAS: A.T. AITX P.A.
<PAGE>
19. EXPENSES. All of the expenses incurred by AITX in connection with the
authorization, preparation, execution and performance of this Agreement by
AITX, including without limitation all fees and expenses of agents,
representatives, counsel and accountants for AITX, shall be paid by AITX. All
expenses incurred by MAS in connection with the authorization, preparation,
execution and performance of this Agreement, including without limitation
all fees and expenses of agents, representatives, counsel and accountants,
shall be paid by MAS.
20. BROKERS. Each party hereto represents and warrants to the other party
that no broker or finder exists in connection with this Agreement or the
transactions contemplated herein and each party shall indemnify the other
and save it harmless from any claim or demand for commission or other
compensation by any broker, finder or similar agent claiming to have been
employed by or on behalf of such party.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
MAS Acquisition IX corp.
By /s/ Aaron Tsai
-------------------------------------------
Aaron Tsai, President
MAS Financial Corp.
By /s/ Aaron Tsai
-------------------------------------------
Aaron Tsai, President
Airtrax, Inc.
By: /s/ Peter Amico
------------------------------------------
Peter Amico, Chief Executive Officer
MAS / Airtrax
Page 15 of 21 Pages Initial each page MAS: A.T. AITX P.A.
<PAGE>
Section 3.15
------------
None
MAS / Airtrax
Page 16 of 21 Pages Initial each page MAS: A.T. AITX P.A.
<PAGE>
Section 3.17
------------
None
MAS / Airtrax
Page 17 of 21 Pages Initial each page MAS: A.T. AITX P.A.
<PAGE>
Section 4.12
------------
1. AITX has employment contracts with three employees.
2. AITX has issued the following purchase orders for supplies and/or parts or
labor to manufacture between 500 to 550 forklifts for the period September of
1999 through December 2000.
<TABLE>
<CAPTION>
Open Purchase Orders: As of November 1999
-----------------------------------------
PO # Amount
-----------------------------
<S> <C> <C>
a. 11999-258D 99.95
b. 11999-257D 15,000,00 estimated
c. 11999-256D 117.967.00
d. 11999-253D 10,000.00
e. 10699-252D 200.00
f. 11999-254D 700.33
g. 10699-251D 85,116.00
h. 10699-250D 1,500.00
i. 92299-248D 185,000.00
j. 90399-256C 15,260.00
k. 92799-252C 119.707.50
l. 90399-255C 1,650.00
m. 92299-247D 100,000.00 estimated
n. 90399-254C 99,372.00
o. 92299-244C 8,572.50
p. 90399-251C 36,960.00
q. 90399-253C 305,214.00
r. 90399-249C 8,535.00
s. 90399-248C 11,573.54
t. 80399-247C 15,862.00
u. 80399-246C 397,600.00
v. 80399-200B 2,186,863.00
w. 60399-231B 139,150.00
x. 60399-228B 5,616.60
y. 52499-222B 318,939.00
z. 1119-202A 4,654.00
The Company expects to issue additional purchase orders or there are
orders that may be missing from the above list. The Company has ordered
parts/or services to complete 50 forklifts for the calendar year ending
12/31/99 and 500 forklifts for the calendar year 2000.
MAS / Airtrax
Page 18 of 21 Pages Initial each page MAS: A.T. AITX P.A.
<PAGE>
Schedule 4.14
The Company has received patents from the Unites States Patent and Trademark
Office for the following applications:
1. POWERTRAX ODV
2. Helicopter Ground Handling Machine
The Company has applied for patents with the United States Patent and
Trademark Office for the following application::
1. Omni-Direction Forklift Retractable with Turret
MAS / Airtrax
Page 19 of 21 Pages Initial each page MAS: A.T. AITX P.A.
<PAGE>
Section 4.15
1. AITX has employment contracts with the following employees:
Peter Amico,
Donald Barney Harris
Robert Mullowney
In addition to salary payments, each of the contracts provide for employee
benefits including health insurance and stock options.
2. AITX recently mutually terminated a sub-contract agreement with William
Wischmann wherein Mr. Wischmann will be paid for certain services in the
form of stock.
3. Apart from the Purchase Orders identified on Schedule 4.12, AITX has
agreements with various contractors to provide services on an as needed
basis. As of the date of this agreement, amounts owed to such contractors
are less than $25,000 in the aggregate
MAS / Airtrax
Page 20 of 21 Pages Initial each page MAS: A.T. AITX P.A.
<PAGE>
Schedule 4.17
1. AITX has employment contracts with the following employees
Peter Amico
Robert Mullowney
Donald Barney Harris
The Company has agreed to provide one hourly employee (Timothy Smith) with
health insurance.
2. The Company has an equipment lease with Xerox for a copier. The monthly
payment is $579.32 and the lease expires in 2004.
3. The purchase orders provided in Schedule 4.12.
MAS / Airtrax
Page 21 of 21 Pages Initial each page MAS: A.T. AITX P.A.
<PAGE>
Section 4.2
This Section 4.2 exhibit amends and supersedes Section 4.2 of the
Agreement and Plan of Merger by and between MAS Acquisition IX Corp. and
AirTrax, Inc. ("AirTrax") dated November 5, 1999.
AirTrax has 275,000 shares of Preferred Stock outstanding. Each share of
Preferred Stock is entitled to 10 voting rights on all matters on which
shareholders are entitled to vote. The Preferred Stock has a preference
over common stockholders upon liquidation equal to the stated value per
share. The Preferred Stock is not convertible to common stock. The
Preferred Stock has a stated value per share of $5.00 and an annual
dividend per share equal to 5% of the stated value. Dividends are
cumulative and the holder has a right to waive any cash dividend and
receive the dividend in the form of common stock at a price per share
equal to 30% of the last offering or trading price of the common stock.
The annual dividend equals $68,750, however, the holder may elect to be
paid in the form of common stock. Although not elected by the holder, it
is entitled to receive 305,737 shares of common stock as a preferred
stock dividend for the period May 1997 to December 31, 1998.
As of this date, AirTrax also has annual stock options outstanding for
its directors and officers, as follows:
Peter Amico 50,000 shares of common stock
D. Barney Harris 25,000 shares of common stock
All directors 5,000 shares of common stock
Agreed and accepted effective the 5th day of November 1999.
MAS Acquistion IX Corp. AirTrax Inc.
/s/ Aaron Tsai /s/ Peter Amico
__________________ _______________
Aaron Tsai Peter Amico
President President
<PAGE>
EXHIBIT 99(i)
MAS FINANCIAL CORP.
1710 E. Division St. Tel: (812) 479-7266
Evansville, IN 47711 Fax: (812) 479-7267
- ----------------------------------------------------------------------------------
CONSULTING AGREEMENT
This agreement is entered into on this 26th day of October, 1999 by and between
MAS Financial Corp. (hereinafter referred to as "MAS"), and Airtrax Inc., their
heirs, designees or assignees, (hereinafter referred to as "Client"), and is made
with reference to the following recitations:
Whereas, MAS has skills and expertise in the fields of business consulting, due
diligence, mergers and acquisitions, and public and private offering structuring
and transactions, and,
Whereas, for the purpose of advancing the business plans of Client, Client wishes
to contract for the control stock of an acquisition company from MAS, and,
Whereas MAS owns or controls the control stock of a public shell corporation
(hereinafter referred to as "Acquisition" company, a corporation organized under
the laws of the State of Indiana, having those classes and numbers of shares as
more fully set forth on the company information sheet attached hereto and made a
part hereof by reference. MAS has control of Acquisition company and is prepared
to transfer the control block. Now, therefore, the parties hereto hereby agree
and covenant as follows:
(1) MAS agrees to take certain actions, and undertake certain obligations for the
orderly transfer of the control of Acquisition company in a merger transaction
where Client agrees to exchange 114,867 common shares for 100% of the common
shares of Acquisition company. MAS agrees as well to do all of the following acts:
* Prepare the merger agreement and plan of merger.
* Name Change and New Stock Certificates
* Unaudited financial statements brought forward to most recent period.
* Change of officers and directors and resignation of present board
* Pink Sheet exemption prepared and filed with NASD.
* Deliver control block shares.
* Obtain a stock symbol for trading on the OTC Bulletin Board.
* Furnish Market Maker.
* Any other document or act needed to make an orderly transfer of control.
* Prepare and file 8-K and Schedule 14f-1 with the Securities and Exchange
Commission, and respond to comments by the Commission, if any, that relate to
the Acquisition company
* Respond to comments, if any, from the NASD pertaining to the Acquisition
company.
Closing of the transaction, and this agreement , will be subject to the due
diligence review by both parties, and the execution of a definitive merger
agreement. All expenses incurred by the Acquisition company, after the transfer
of control by MAS to the Client, shall be the responsibility of the Acquisition
company.
(2) Subject to the other terms herein, the Client agrees to pay MAS a consulting
fee of $50,000 as follows:
* The first $25,000 is due and payable at closing.
* The second $25,000 is due and payable within 180 days from closing or
immediately upon receipt of funds from any offering, subject however, to the
trading requirements set forth in (a) below.
(a) Either party shall have the right to cancel the merger, if after 45 days of the
filing of the Pink Sheet exemption with the NASD, the merged company is not cleared
for quotation on the OTC Bulletin Board. In the event either party chooses to cancel
the merger after the above mentioned 45 days, then except as provided in the
following sentence, no damages will be assessed by one party against the other, and
MAS will promptly, not later than 7 days from such termination, refund to Client the
MAS / Airtrax Page 1 of 4 Pages Initial Page MAS___AT____ AIRTRAX____PA____
<PAGE>
consulting fee paid to MAS. In the event Client elects to cancel the merger as
provided herein, however, if the reason for the delay in listing on the OTC Bulletin
Board relates to questions or inquiries of the NASD concerning the Client's present
or past business and its officers and directors, then in such event, MAS will
promptly refund to Client the consulting fee paid to MAS as provided above, less the
sum of $10,000.
(3) At closing, which shall take place at a time and place mutually agreeable to the
parties hereto, MAS shall deliver to Client or its designee the following:
(a) Certificates representing the shares being acquired hereunder; containing the
following legend:
"The securities represented by this Certificate have not been registered under the
Securities Act of 1933 (the "Act") and are "Restricted Securities" as the term is
defined in Rule 144 under the Act. The Common Shares may not be offered for sale,
sold or otherwise transferred except pursuant to an effective registration statement
under the Act or exemption, the availability of which is to be established to the
satisfaction of the Corporation."
(b) Necessary consents, if any, from the state of domicile of the Acquisition company;
(c) All corporate books, records, and documents, stock books, ledgers, minute books,
articles and by-laws of the Acquisition company;
(d) Shareholder list of the Acquisition company;
(e) Resignations of all present officers and directors, effective as of the closing
date;
(f) Copy of two years of audited year-end financial statements;
(4) MAS represents and warrants the following:
(a) that the Acquisition company is a corporation duly organized and existing under
the laws of the State of Indiana, unless otherwise noted;
(b) that the Acquisition company will use its best efforts to preserve its business
organization intact.
(c) that the Acquisition company will not enter into any contract, commitment or
transaction, or declare, set aside or pay any dividend, or make any distribution in
respect of its capital stock, or waive any obligation or liability, or compromise
any claim, or cancel any note, loan or other obligation owed to it, without the
consent of Client.
(d) That the Acquisition company is a reporting company under the federal securities
laws, and it and its affiliates are current with its reporting obligations.
(5) MAS represents and warrants the following prior to closing:
(a) That MAS will not cause any amendment to be made in the Articles of Incorporation
or By-Laws of the Acquisition company, nor issue or cause to be issued any additional
shares of capital stock; nor issue or cause to be issued any warrants, obligations,
subscriptions, options, convertible securities, or other commitments under which any
additional shares of its capital stock may be directly or indirectly authorized,
issued or transferred nor will either agree to do any of the acts listed above.
(6) Client represents and warrants the following prior to closing:
(a) That Client is solely responsibly for the decision to merge with the Acquisition
company,
(b) That the Client to be merged with the Acquisition company which is the subject
of this agreement shall be suitable in all respects for such merger,
MAS / Airtrax Page 2 of 4 Pages Initial Page MAS___AT____ AIRTRAX____PA____
<PAGE>
(7) The parties shall at all times keep each other's information, sources, trade
secrets, processes, and confidential information strictly confidential.
(8) MAS is not rendering legal advise to Client. Each party is responsible for all
of it's own professional, legal, accounting, Broker-Dealer, and consulting fees as
they may apply to each party.
(9) All documents and work product prepared for or on behalf of Client by MAS shall
become the property of Client.
(10) MAS warrants that the Acquisition company being transferred shall be transferred
with no liabilities and little or no assets, and shall defend and hold Client and
the Acquisition company harmless against any action by any third party against either
of them arising out of, or as a consequence of, any act or omission of MAS or the
Acquisition company prior to, or during the closing contemplated by this contract of
sale. Prior to closing MAS reserves the right, if necessary, to substitute another
Acquisition company acceptable to Client of like worth.
(11) All of the representations and warranties contained within this contract of sale,
whether made by Client, MAS, or MAS on behalf of the Acquisition company, will be
true and correct on the closing date as if made on that date.
(12) At any time prior to the closing, Client and their counsel, accountants and other
agents shall have full access during normal business hours to all properties, books,
accounts, records, contracts and documents relating to the Acquisition company.
(13) This agreement shall be governed by the laws of the State of Indiana. The parties
agree to the jurisdiction of the Courts of the State of Indiana and the United States
District Court for the Southern District of Indiana as the forums for the resolution
of any legal disputes between the parties. Client agrees to pay court costs, attorney
fees in a reasonable amount, and interest on any unpaid balances at the judgment rate
then in effect in the State of Indiana should it become necessary for MAS to engage
in legal action to recover any portion of the purchase price or any other fees from
Client.
(14) If any bona fide action or proceeding shall be pending against any party on the
closing date that could result in an unfavorable judgment, decree or order that would
prevent or make unlawful the performance of this agreement, or if any agency of the
federal or of any state government shall have objected to it on or before the closing
date to this transaction, or if any prospectus contemplated with respect to the
issuance and sale of shares by Buyers shall have been disapproved by any federal or
state regulatory agency, either party may cancel and terminate this agreement without
liability to the other. This paragraph shall not affect any obligation of any party
under this contract that is permitted to be performed in whole or in part after the
closing.
(15) Neither party may assign this agreement without the prior written consent of the
other party, which consent shall not be unreasonably withheld. However, MAS may
require up to 180 days to perform due diligence on any assignee of Client, and may
reject any assignee not qualified by MAS.
(16) This document contains the entire agreement between the parties hereto. No oral
or other representation or warranty has been given to Client by MAS, and this
agreement controls over any and all oral representations made by any party to this
transaction. This agreement may only be modified by a writing, signed by the parties.
(17) Each party agrees to execute all of the documents and do all of the things
necessary to effectuate the purpose of this agreement, without delay or limitations.
Accepted and Agreed: Accepted and Agreed:
/S/ Aaron Tsai /s/ Peter Amico
__________________________ ____________________________________
MAS Financial Corp. Airtrax Inc.
By: Mr. Aaron Tsai, President By: Peter Amico, Chief Executive Officer
MAS / Airtrax Page 3 of 4 Pages Initial Page MAS___AT____ AIRTRAX____PA____
<PAGE>
Mailing Address:
MAS Financial Corp.
1710 E. Division St.
Evansville, IN 47711
Airtrax Inc.
P. O. Box 868
Vineland, NJ 08362-0868
MAS / Airtrax Page 4 of 4 Pages Initial Page MAS___AT____ AIRTRAX____PA____
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