UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (D) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 12, 2006
ALL-STATE PROPERTIES, L.P.
(Exact name of registrant as specified in charter)
Delaware
0-12895
13-1574215
(State or other
jurisdiction of
incorporation)
(Commission File
Number)
(IRS Employer
Identification No.)
5500 NW 69th Avenue, Lauderhill, FL 33319
(Address of principal executive offices)
(954) 572-2113
(Registrant?s telephone number, including area code)
Copy to:
Robert C. Brighton, Jr., Esq.
Ruden McClosky Smith Schuster & Russell, P.A.
200 East Broward Boulevard
Fort Lauderdale, FL 33301
Phone: (954) 527-2473
Fax: (954) 333-4073
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
??
Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
?
Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
?
Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
?
Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
ITEM 8.01 OTHER EVENTS.
On July 12, 2006, All-State Properties, L.P., a Delaware
limited liability company (the ?Company?), entered into a letter
of intent (?LOI?) with Hubei Longdan Biological Medicine
Technology Co. Ltd., a company organized under the laws of the
People?s Republic of China (?Longdan?).
Under the LOI, the Company and Longdan will negotiate a
definitive agreement pursuant to which the Company would acquire
all of the outstanding capital stock of Longdan (the
?Acquisition?). Preliminary to the consummation of the
Acquisition, the Company would convert from a limited liability
company to a Delaware corporation and form a Delaware corporation
into which Longdan would merge. The LOI contemplates that
Longdan?s shareholders will receive shares of the Company equal to
approximately ninety one percent (91%) of the Company?s issued and
outstanding capital stock for their shares of Longdan and that the
Company?s existing partners/stockholders will have approximately
nine percent (9%) of the outstanding capital stock after
consummation of the Acquisition. Following completion of the
Acquisition, all of the officers and directors of the Company
would resign and be replaced by Longdan nominees.
Consummation of the Acquisition is subject to several
conditions, including approval of the Acquisition by the partners
of the Company and the principals of Longdan, and delivery by
Longdan of audited financial statements reflecting profits of
approximately U.S.$2.23 million for its latest fiscal year and
shareholder equity of U.S.$14.8 million as of the end of its
latest fiscal year. In addition, the consummation of the
Acquisition will be conditioned on the consummation of either (x)
the sale of the real property owned by Tunicom, LLC, a company in
which the Company owns a member interest, and distribution of the
proportionate net proceeds to the Company?s partners after payment
of the Company?s outstanding obligations or (y) a divesture of the
Company?s interest in Tunicom to an entity holding such interest
for the benefit of the Company?s partners and the related
assumption of all of the Company?s outstanding obligations. Under
the LOI, Longdan is obligated to pay all of the Company?s costs
incurred in connection with the Acquisition and related
transactions.
The LOI provides each party with the opportunity to conduct
an inspection of the other party?s respective business prior to
closing. The Company has agreed not to entertain, solicit or
encourage any inquiries, discussions or proposals for the
acquisition of the Company or to enter into any agreement,
understanding or arrangement pertaining to the merger or
consolidation of the Company or the sale of its securities to any
party other than Longdan for a period of 120 days after the
signing of the LOI, subject to certain fiduciary considerations.
Longdan has agreed that the general partner of the Company
shall not be personally liable with respect to the LOI or any
definitive agreement and has agreed not to bring any action or
proceeding in any court, regulatory agency or other tribunal
against the general partner in his individual capacity seeking
damages or other relief against the general partner personally.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(a)
Financial statements of businesses acquired.
Not applicable.
(b)
Pro forma financial information.
Not applicable.
(c) Exhibits
Please see the Exhibit Index following the Signature Page for
the Exhibits included with this Report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
ALL-STATE PROPERTIES, L.P.
BY:
/s/ STANLEY R. ROSENTHAL
Stanley R. Rosenthal, General Partner
Dated: July 18, 2006
EXHIBIT INDEX
Exhibit No. Description of Document
10.1 Letter of Intent with Hubei Longdan
Biological Medicine Technology Co. Ltd.
ALL-STATE PROPERTIES, L.P.
5500 Northwest 69th Avenue
Lauderhill, FL 33319
July 12, 2006
Hubei Longdan Biological Medicine Technology Co. Ltd.
Attention: Zhilin Zhang, President
Re: Letter of Intent
Ladies and Gentlemen:
The purpose of this letter (?Letter of Intent?) is to set
forth certain non-binding understandings and certain binding
agreements between All-State Properties, L.P., a Delaware
limited partnership (?All-State?), the limited partnership
interests (the ?Securities?) of which are registered under the
United States Securities Exchange Act of 1934, as amended (the
?Exchange Act?), and which trade in the United States over-the-
counter securities market, and Hubei Longdan Biological Medicine
Technology Co., Ltd., a company organized under the laws of the
People?s Republic of China (?Longdan?), relating to the
acquisition by All-State, or a company controlled by All-State
or its successor, of all of the issued and outstanding shares of
capital stock (the ?Longdan Stock?) of Longdan (the
?Acquisition?).
1. The Acquisition.
(a) On the terms and subject to the conditions to be set
forth in a definitive agreement to be negotiated and entered
into by All-State and Longdan (the ?Agreement?), at the closing
of the Acquisition (the ?Closing?), All-State shall acquire all
of the issued and outstanding shares of Longdan Stock. The
Agreement will contain usual and customary representations by
All-State and Longdan and certain customary covenants and
agreements by the parties, including agreements relating to
indemnification. The Closing will be subject to usual and
customary conditions, including, but not limited to, those set
forth in Section 9 hereof.
(b) The parties agree to use their respective best efforts
to cause the Agreement to be prepared and executed as promptly
as practicable after execution of this Letter of Intent, and to
satisfy all the conditions necessary to Closing.
2. Structure. This Letter of Intent contemplates that
the Acquisition will be structured as multi-step transaction in
which (A) All-State shall (i) convert (the ?Conversion?) from a
Delaware limited partnership to a Delaware business corporation
(?ASC?) with a capital structure acceptable to Longdan, (ii)
form a subsidiary (?Acquisition Co.?) incorporated under the
laws of the State of Delaware, and (iii) issue newly issued
restricted shares (the ?Merger Shares?), representing
approximately 91% of the total issued and outstanding capital
stock of ASC (?ASC Stock?), following issuance of the Merger
Shares, to the shareholders of Longdan (the ?Longdan
Shareholders?) in proportion to their existing holdings of
Longdan Stock and (B) Longdan shall merge with and into
Acquisition Co. and become a wholly-owned subsidiary of ASC (the
?Merger?). It is understood and agreed that the parties may
agree to an alternative structure to effect the Acquisition
provided that any such alternative structure shall be consistent
with the understandings expressed herein.
3. Consideration for Acquisition. In consideration of
the acquisition of the Longdan Stock, the Longdan Shareholders
shall receive the Merger Shares, which shall not be registered
for resale under the Securities Act of 1933, as amended (the
?Securities Act?), and may not be resold by the Longdan
Shareholders without registration, or pursuant to an exemption
from registration, under the Securities Act. Certificates
issued to the Longdan shareholders representing the Merger Share
(the ?Merger Share Certificates?) shall bear a restrictive
legend.
4. Payment of Acquisition Expenses.
(a) In consideration of All-State?s agreement to enter
into this Letter of Intent and take such actions as may be
necessary to consummate the Acquisition, Longdan agrees to pay
all expenses of All-State in connection with the Acquisition,
including, without limitation, all reasonable fees and expenses
of its legal counsel. Longdan acknowledges and agrees that All-
State will incur substantial expenses (?Acquisition Expenses?)
for the preparation of (i) this Letter of Intent, (ii) the
Agreement, (iii) certain corporate documentation and (iv)
reports, proxy statements and other filings required in
connection with the Acquisition and agrees to pay all such
expenses.
(b) All-State acknowledges receipt of a deposit in the
amount of Five Thousand ($5,000) Dollars (the ?Initial Expense
Deposit?) by its counsel, Ruden, McClosky, Smith, Schuster &
Russell, P.A. (?Ruden?) as the initial payment of Acquisition
Expenses. Longdan agrees to pay an additional expense deposit
in the amount of Ten Thousand ($10,000) to Ruden following
execution of this Letter of Intent and to pay all such
additional amounts as may be required to cover All-State?s
Acquisition Expenses in advance promptly upon request by All-
State.
(c) Longdan acknowledges and agrees that All-State shall
have no obligation under this Letter of Intent or the Agreement
in the event that Longdan fails to make prompt payment in full
of all Acquisition Expenses upon request. In addition, in the
event that the Acquisition is not consummated for any reason
other than All-State?s intentional act or omission resulting in
the material breach of the terms of this Letter of Intent or
the Agreement, Longdan agrees that it is, nonetheless, obligated
to pay all of the Acquisition Expenses of All-State incurred in
connection with the negotiation and the attempted implementation
of this Letter of Intent or the Agreement.
5. Governmental Requirements.
(a) All-State represents that it is in compliance with all
of the requirements necessary to maintain registration of the
Securities under the Exchange Act and to permit trading in the
Securities, and agrees that, at Closing, the ASC Stock, shall be
registered under the Exchange Act. Upon execution of this
Letter of Intent and the Agreement, All-State shall have taken
all actions necessary to comply with all United States federal,
state and local requirements (?U.S. Governmental Requirements?)
required to be taken by it in connection with the consummation
of the Acquisition.
(b) Longdan agrees that, at Closing, it shall have taken
all actions necessary to comply with all People?s Republic of
China national, provincial and local requirements (?P.R.O.C.
Governmental Requirements?) required to be taken by it in
connection with the consummation of the Acquisition, and shall
cooperate with All-State by taking any action reasonably
requested by All-State to permit All-State to comply with U.S.
Governmental Requirements, including the preparation of
financial statements (?Audited Financial Statements?) prepared
in accordance with United Stated generally accepted accounting
principles and in compliance with Regulation S-X and the other
rules and regulations of the United States Securities and
Exchange Commission (?SEC?) and audited by an independent public
accounting firm registered with United States Public Company
Accounting Oversight Board (?PCAOB?).
6. Inspection; Provision of Information.
(a) Upon execution of this Letter of Intent, All-State and
Longdan shall be granted an opportunity to conduct any and all
inspections of the business of the other party and to receive
all information, including financial records, and the like which
either shall request, including, without limitation, all
information necessary in connection with the preparation of the
Agreement, compliance with the U.S. Governmental Requirements
and the P.R.O.C. Governmental Requirements and satisfaction of
any condition to Closing. Each of the parties shall provide
representatives of the other party with full access to its
books, records and other information, as well as to its
officers, key employees and independent accountants.
(b) In the event that either party shall reasonably
determine that it has not been provided with the opportunity to
make any necessary inspection or has not received any necessary
information, or that the information obtained indicates that a
condition to Closing cannot be satisfied, such party shall be
entitled to terminate this Letter of Intent or the Agreement, as
the case may be, and whereupon both parties shall have no
further obligation under this Letter of Intent or the Agreement,
as the case may be, except for those obligations which shall
survive as specifically provided herein or therein, including,
without limitation, the obligation to make payment of
Acquisition Expenses as required by Section 4 of this Letter of
Intent.
7. Confidentiality. Before the Closing, neither All-State
or Longdan, nor any of their respective affiliates or agents
shall make any public release of information regarding the
matters contemplated herein except All-State and Longdan shall
be permitted to make such public disclosure as required by the
laws of the United States and the People?s Republic of China,
including, but not limited to, any reports, proxy statements or
other filings required to be made by All-State with the SEC, and
any filings required to be made by Longdan with the People?s
Republic of China in connection with the consummation of the
transactions contemplated by this Letter of Intent.
8. Distribution by All-State of Proceeds Received Upon of
Sale of Real Estate.
(a) All-State currently owns a member interest in Tunicom
LLC (?Tunicom?). Tunicom owns certain real property (the ?Real
Property?) which is subject to a contract for sale. The buyer
of the Real Property has received certain assurances from the
United States Department of Housing and Urban Development
(?HUD?) with respect to government guarantees relating to the
financing of a project to be constructed on the Real Property.
All-State anticipates that closing of the sale of the Real
Property will occur in approximately sixty (60) days. However,
the parties acknowledge and agree that the closing may be
delayed in the event of a hurricane or other material event
affecting the Real Property or the project to be constructed by
the buyer on the Real Property, including without limitation,
the assurances provided by HUD to the buyer of the Real
Property. Should the closing of the Real Property be delayed
materially, at the request of Longdan, All-State will use
reasonable commercial efforts to divest itself of its member
interest in Tunicom (?Divestiture?), including by the spin off
of its member interest to a liquidating trust which would take
such member interest subject to All-States? liabilities,
including without limitation, its obligation to repay its
general partner for advances; provided, however, that any costs
incurred by All-State in connection with such Divestiture will
be Acquisition Expenses and payable by Longdan.
(b) Upon the sale of the Real Property, Tunicom will be
liquidated and All-State will receive its proportionate share of
the sales proceeds from the sale of the Real Property. All-State
will use a portion of the sales proceeds received by it to repay
all advances made to it by its general partner and to pay all
its other obligations. The net amount after payment of such
expenses will be distributed to its partners in proportion to
their respective interests in All-State. At Closing, ASC, the
successor to All-State following the Conversion, will have no
assets or liabilities.
9. Conditions Precedent. Closing of the transactions
contemplated by this Letter of Intent and the Agreement is
subject to satisfaction or waiver of the following conditions:
(a) Approval of the Acquisition by the partners of All-
State and the principals of Longdan;
(b) delivery of Audited Financial Statements reflecting
profits of approximately U.S. $2.23 million for the
year ended December 31, 2005 and shareholders equity
of approximately U.S. $14.8 million as of December 31,
2005;
(c) either (A) the closing of the sale of the Real
Property and distribution by All-State of the proceeds
received from the liquidation of its member interest
in Tunicom upon the sale of the Real Property and
repayment of the advances made by All-State?s general
partner and payment of all other obligations of All-
State or (B) consummation of a Divesture;
(d) satisfaction of all necessary U.S. Governmental
Requirements;
(e) satisfaction of all necessary P.R.O.C. Governmental
Requirements;
(f) consummation of the Conversion and the Merger;
(g) delivery of certificates representing the Merger
Shares;
(h) payment in full of all Acquisition Expenses; and
(i) delivery of certificates of officers of All-State and
Longdan certifying the continued truth of their
respective representations and warranties made in the
Agreement and the satisfaction or waiver of all other
conditions to Closing set forth in the Agreement.
10. No Shop.
(a) In consideration of the payment of the Initial Expense
Deposit and the premises contained in this Letter of Intent,
All-State agrees as follows: (i) subject to clause (iii) below,
All-State shall not entertain, solicit or encourage (including
by way of furnishing non-public information concerning All-
State) any inquiries, discussions or proposals for the
acquisition of All-State, and to make any filings with the SEC
necessary to keep current the registration of the Securities
under the Exchange Act for a period of 120 days after the date
hereof; (ii) All-State shall not enter into (or enter into
negotiations with a view to entering into) any agreements,
understandings or arrangements pertaining to the merger,
consolidation or sale of the Securities of All-State to any
party other than Londan or one of its affiliates for a period of
120 days after the date hereof; and (iii) in the event that the
management of All-State, based on the written opinion of
independent counsel, deem it necessary, in order to comply with
applicable federal or state law, to consider unsolicited
competing offers for the sale of All-State, any unissued
Securities or other capital stock of All-State, and, as a
result, an agreement with respect to a transaction of the type
described above is reached with a party other than Longdan or
one of its affiliates within a period of one year from the date
hereof, then All-State shall reimburse to Longdan funds advanced
to All-State for expenses incurred by us in connection with the
transactions contemplated by this Letter of Intent. The
provision of clause (iii) shall not impair the obligations of
All-State under clauses (i) and (ii) of this Section.
(b) Except with respect to clause (iii) of paragraph (a)
of this Section which shall continue indefinitely, this Letter
of Intent will terminate if we have not entered into a
definitive Agreement within 120 days from the date hereof,
unless otherwise extended by the parties.
11. Management of ASC Post-Closing. Effective at
Closing, the members of the board of directors and officers of
ASC shall resign and be replaced by nominees of Longdan.
12. ASC Holders Shares. The partners of All-State will
become stockholders of ASC (?ASC Holders?) in proportion to
their partnership interests upon consummation of the Conversion.
Following consummation of the Merger, shares of common stock of
ASC held by ASC Holders (the ?Free Stock?) will constitute
approximately an aggregate nine percent (9%) of the total
capital stock of ASC and will be held by the ASC Holders in
proportion to their ownership of partnership interests in All-
State. The Free Stock will be freely transferable by the
holders thereof without the need for registration under the
Securities Act.
13. Limited Binding Effect. This Letter of Intent is
intended to serve only as a mutual expression of the intention
of the parties on the principal points summarized herein, and
shall not constitute a definitive agreement or a binding legal
obligation of the parties other than with respect to the
provisions of Sections 4, 7 and 10 and the procedural and
administrative provisions of this Letter of Intent (which are
intended to be legally binding). The parties shall not be
obligated to consummate the transaction unless and until a
formal definitive written agreement (and related ancillary
agreements) in form and substance mutually acceptable to the
parties are executed by the parties (the provisions of which
will supersede this letter) and the conditions expressed therein
are fulfilled to the satisfaction of the parties.
14. Entire Agreement. This Letter of Intent supersedes
all prior agreements and understandings, oral or written,
between the parties hereto with respect to the subject matter
hereof, and may not be changed orally, but only by an agreement
in writing, signed by both parties.
15. Governing Law. This Letter of Intent shall be
governed by, and construed and enforced in accordance with, the
laws of the State of Florida applicable to agreements executed
and to be wholly performed within such state, without giving
effect to the conflict of law provisions thereof.
16. Counterparts. This Letter of Intent may be executed
in one or more counterparts, each of which shall be an original,
and all of which when taken together shall constitute one and
the same instrument.
17. Expenses. Except with respect to Acquisition Expenses
as set forth in Section 4 and Section 8(a) of this Letter of
Intent, each party shall be responsible for its own costs and
expenses.
18. Exculpation of General Partner. The parties
acknowledge and agree that Stanley R. Rosenthal, the general
partner of All-State (?General Partner?), is executing this
Letter of Intent in his capacity as general partner on behalf of
All-State and not individually. Longdan agrees that the General
Partner shall have no personal liability with respect to any
matter under this Letter of Intent or the Agreement and further
agrees that it shall not bring any action or proceeding in any
court, regulatory agency or other tribunal against the General
Partner in his individual capacity seeking damages or other
relief against the General Partner personally.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
If the foregoing is acceptable, please indicate your
approval in the space provided below and return one fully
executed copy of this Letter of Intent to Robert C. Brighton,
Jr., counsel for All-State, Ruden McClosky Smith Schuster &
Russell, PA, 200 E. Broward Blvd., Fort Lauderdale, FL. 33301.
Unless accepted by Longdan and delivered to Mr. Brighton by 5:00
p.m. on the fifth (5th) business day following the date of this
Letter of Intent, this Letter of Intent shall expire and shall
be null and void and of no effect.
Very truly yours,
ALL-STATE PROPERTIES, L.P.
By: /s/ STANLEY R. ROSENTAL
Name: Stanley R. Rosenthal
Its: General Partner
ACCEPTED AND AGREED TO THIS 12 TH DAY OF JULY, 2006:
HUBEI LONGDAN BIOLOGICAL MEDICINE TECHNOLOGY CO. LTD.
By: /s/ ZHILIN ZHANG
Print Name: Zhilin Zhang
Its: Chairman
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Hubei Longdan Biological Medicine Technology Co. Ltd.
July 12, 2006
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