<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
General Form For Registration of Securities
of Small Business Issuers Under Section 12(b)
or 12 (g) of the Securities Exchange Act of 1934
CONTESSA CORPORATION
-----------------------------------------------------------
(Name of Small Business Issuer in Its Charter)
Delaware 65-0656268
--------------------------------- ----------------------
(State of Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
18349 NE 4/th/ Ct., North Miami Beach, FL 33179
------------------------------------------ ----------------------
(Address of Principal Executive Offices) (Zip Code)
(305) 653-3201
--------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
------------------- ---------------------------------
None None
------------------- ---------------------------------
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.0001 per share
------------------------------------------
(Title of Class)
<PAGE>
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 1. Description of Business.
(a) Business Development.
Contessa Corporation (hereinafter referred to as the "Company" and/or the
"Issuer"), a Delaware corporation, was formed on March 7, 1996 under the name
United Health Management, Inc. to operate as a managed health care provider. On
or about September 16, 1997, the board of directors of the Company changed the
business of the Company to that of a holding company, and subsequently changed
its name to Contessa Corporation. On September 26, 1997, the Company entered
into an acquisition agreement, whereby the Company acquired all of the issued
and outstanding shares of Gastronnomia Bocca Di Rossa, Inc. ("GBDR"), a Florida
corporation, in exchange for 562,500 shares of the common stock, $.0001 par
value of the Company (the "Acquisition"). As a result of the Acquisition, GBDR,
which was formed on June 12, 1997, became the wholly-owned subsidiary of the
Company. Prior to the Acquisition, GBDR was a wholly owned subsidiary of
Giuditta Investments, Inc., a corporation organized under the laws of Florida.
(b) Business of the Issuer.
Products
The Company is a holding company, the principal assets of which consist of
the capital stock of Gastronnomia Bocca Di Rosa, Inc. ("GBDR"). The Company
conducts no business on its own independent of GBDR.
The business that GBDR will engage in is the operation of an Italian
delicatessen/cafe, which will be called "Bocca Di Rosa Gastronnomia
("Gastronnomia"). The concept of Gastronnomia is an informal restaurant,
delicatessen/bakery, take-out, catering and delivery. Gastronnomia will have
eat-in service, both indoor and outdoor, served in a rustic setting, with an
open, elevated kitchen. The hours of operation will be principally during the
day, with an early dinner service until 8:00 pm. The menu will feature pastas,
salads, sandwiches, soups, pizza and platters. Gastronnomia will also serve
brunch on the weekends. The space for Gastronnomia is currently being renovated
and modified to the needed specifications. The opening of Gastronnomia is
scheduled for November 30, 1998.
GBDR has engaged the culinary teams from its affiliated restaurants in the
Miami, Florida area, to manage the kitchen of Gastronnomia. This team of chefs
has received numerous awards and recognition during the two years that these
restaurants have been open for business.
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Sales and Marketing
Other than local advertising, the Company believes that the proper
marketing strategy for the Cafe is by word of mouth by Gastronnomia's customers
and the favorable reviews its affiliated restaurants receive from local
restaurant critics. The Company believes that the patrons of the affiliated
restaurants will patronize Gastronnomia.
Employees
The Company currently has no employees. It is anticipated that by the time
Gastronnomia opens for business on or about November 30, 1998, GBDR will employ
approximately eight (8) full-time employees and seventeen (17) part-time
employees.
Competition
The food service industry in Miami is intensely competitive with respect to
food quality, concept, location, service, and price. However, the Company
believes that Gastronnomia will be able to compete in the highly competitive
Miami market due to its affiliation with the two Bocca Di Rosa ("Bocca")
restaurants located in the South Beach section of Miami and the Coconut Grove
section of Miami. Both of the Bocca restaurants are operated by GBDR's
president, Pietro Bortolatti. The Bocca restaurants are upscale Italian
restaurants which serve only dinner and require proper attire of its patrons.
The Company expects that Gastronnomia will attract customers who desire the
quality of food and level of service that the Bocca restaurants provide, but in
a more casual setting, with daytime availability for lunch, catering and private
parties. Gastronnomia will be located in the Coconut Grove section of Miami,
across the street from one of the Bocca restaurants.
Government Regulation
The Company's business is subject to various federal, state and local
government regulations. While the Company does not expect to experience an
inability to obtain or maintain any necessary governmental licenses, permits or
approvals, the failure to acquire or maintain food licenses could have a
material effect on the Company's operating results. In addition, a facility's
operating costs are affected by increases in the minimum hourly wage,
unemployment tax rates, sales taxes and similar costs over which the Company has
no control. Since it is anticipated that many of the Company's personnel will
be paid at rates based on the federal minimum wage, increases in the minimum
wage will result in an increase in the Company's labor costs.
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Dependence on Key Customers
There will be no key customers.
Research and Development
The Company will have no research and development expense.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
The Company was formed on March 7, 1996, under the laws of the State of
Delaware to commercialize the efforts of its founders for the purpose of
operating as managed health care provider. The business of the Company was
changed to that of holding company on or about September 19, 1997.
Results of Operations
The following discussion relates to the operations of the Company.
The Company has had no revenues or associated cost of revenues to date.
The Company has incurred approximately $195,610 in General and
Administrative Costs in connection with the development of its business through
cash infusions to GBDR.
Although the Company believes it can attain profitability in its first year
of operations, there can be no assurance that the Company will attain
significant sales, will be able to contain expenses, or will be able to sustain
itself through operations.
Liquidity and Capital Resources
The Company had negative cash flow from its development activities of
approximately $100,813. Cash inflows from financing activities totaled
approximately $319,000. Additional capital may be needed to achieve commercial
startup and begin operations.
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Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for certain forward-looking statements. The forward-looking statements
contained in this Form 10-SB are subject to certain risks and uncertainties.
Actual results could differ materially from current expectations. Among the
factors that could affect the Company's actual results and could cause results
to differ from those contained in the forward-looking statements contained
herein is the Company's ability to implement its business strategy successfully,
which will be dependent on business, financial, and other factors beyond the
Company's control, including, among others, prevailing changes in consumer
preferences, availability of trained personnel and changes in regulations.
There can be no assurance that the Company will continue to be successful in
implementing its business strategy. Other factors could also cause actual
results to vary materially from the future results covered in such forward-
looking statements.
Item 3. Description of Property.
The Company, through GBDR, has entered into a lease dated July 1, 1997
with Carolyn Meredith for 1,832 square feet of retail space at 2808 Bird Avenue
(the "Premises A") and 916 square feet of retail space at 2806 Bird Avenue (the
"Premises B"), both in Coconut Grove, Florida (collectively the "Premises").
The term of the lease is for ten (10) years, beginning July 1, 1997. The
Premises includes on-site parking.
The annual rent for Premises A for the first three years is $42,136,
payable in equal monthly installments of $3,511.33 on the first day of each
calendar month. Beginning on May 1, 1998, the annual rent for Premises B for
the first three (3) years is $21,068, payable in equal monthly installments of
$1,755.66. The rent payable for the four through the twentieth year of the
lease is incremented by a cost of living increase. The terms of the lease
provide for the extension of the terms of the lease for an additional ten (10)
years. The lease provides for the payment by the Company of additional rent,
which amount represents the Company's proportionate share of real estate taxes
and insurance. The amount of additional rent owed by the Company for the first
year of the lease is $10,764, payable in equal monthly installments of $897.00.
The Company's share of the aggregate additional rent is 31.5% of the total
yearly costs for real estate taxes and insurance. The Company has paid a
security deposit of $10,533.99.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
(a) Security Ownership of Certain Beneficial Owners.
The following information relates to those persons known to the Issuer to
be the beneficial owner of more than five percent (5%) of the Common Stock, par
value $.0001 per share, the only class of voting securities of the Issuer
outstanding.
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<TABLE>
<CAPTION>
Name and Amount and
Title of Address of Nature of Percentage
Class Beneficial Owner Beneficial Ownership of Class*
- -------------------- ------------------------- ---------------------- ---------------
<S> <C> <C> <C>
Common Stock, par Anthony Markofsky 300,000 shares 10.46%
value $.0001 per share 18349 NE 4/th/ Court
N. Miami Beach, FL 33179 Direct
Common Stock, par Viking Investment Group II, Inc. 525,000 shares
value $.0001 per share 630 Third Avenue
New York, NY 10017 Direct 14.65%
Common Stock, par Parenteau Corporation 525,000 shares/(1)/ 18.31%
value $.0001 per share 4446 St. Laurent Blvd.
Suite 801 Direct
Quebec, Canada W2W 125
Common Stock, par Giuditta Investment, Inc. 562,500 shares 19.62%
value $.0001 per share 2833 Bird Avenue
Coconut Grove, FL 33133 Direct
</TABLE>
- --------------------
* Based on 2,866,506 shares issued and outstanding.
/(1)/ Ian Markofsky is the President and sole shareholder of Viking Investment
Group II, Inc. Mr. Markofsky is the father of Anthony Markofsky.
The Company has not contacted stock brokerage firms holding shares of the
Company's Common Stock in "street name" to determine whether there are
additional substantial shareholders of the Company.
(b) Security Ownership of Management.
The number of shares of Common Stock of the Issuer owned by the Directors
and Executive Officers of the Issuer is as follows:
<TABLE>
<CAPTION>
Name and Amount and
Title of Address of Nature of Percentage
Class Beneficial Owner Beneficial Ownership of Class*
- -------------------- ------------------------- ---------------------- ---------------
<S> <C> <C> <C>
Common Stock, par Thomas E. Knudson 0 shares 0
value $.0001 per share President & Director
c/o Contessa Corporation Direct
18349 NE 4/th/ Court
N. Miami Beach, FL 33179
</TABLE>
5
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<TABLE>
<CAPTION>
Name and Amount and
Title of Address of Nature of Percentage
Class Beneficial Owner Beneficial Ownership of Class*
- -------------------- ------------------------- ---------------------- ---------------
<S> <C> <C> <C>
Common Stock, par Anthony Markofsky 300,000 shares 10.46%
value $.0001 per share Secretary & Director
c/o Contessa Corporation Direct
18349 NE 4/th/ Court
N. Miami Beach, FL 33179
Common Stock, par David Rector 0 shares 0
value $.0001 per share Director
c/o Contessa Corporation Direct
18349 NE 4/th/ Court
N. Miami Beach, FL 33179
Common Stock, par Adam S. Gottbetter/(1)/ 50,000 shares 1.74%
value, $.001 per share Assistant Secretary
Kaplan Gottbetter & Levenson, LLP Indirect
630 Third Avenue, 5/th/ Floor
New York, NY 10017
Common Stock, par All Officers and Directors 350,000 shares 12.20%
value $.0001 per share (4 persons)
Direct
</TABLE>
- -----------------
* Based on 2,866,506 shares issued and outstanding
/(1)/ Mr. Gottbetter is a partner in the law firm of Kaplan Gottbetter &
Levenson, LLP, which owns 50,000 shares of common stock of the Company.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
(a) The Directors and Executive Officers of the Company are as follows.
Directors of the Company serve for a term of one year or until their successors
are elected. Officers are appointed by, and serve at the pleasure of, the
Board.
Thomas E. Knudson, 42, President and Director.
Mr. Knudson has served as a director of the Company since inception and
has served as President of the Company since July 1996. Prior to that time, Mr.
Knudson was a principal of several entrepreneurial ventures including serving as
Secretary of Leadville Development Corp., a commercial real estate developer
(1990 until June 1996), President and owner of Cocobianco, a clothing importer
and retailer (1986 to 1996) and Principal of Fast Incorporated, a BMW
dealership, all located in and around Sun Valley Idaho. Mr. Knudson served as
Vice President of Sales of Tamboril Cigar Company ("Tamboril") from June 1996
to August 4, 1998, and served as a Director of Tamboril from October 1996 to
August 4, 1998.
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Anthony Markofsky, 30, Secretary and Director
Mr. Markofsky has served as Secretary and a Director of the Company since
inception. Since April 1997, Mr. Markofsky has served as President and Chief
Executive Officer of Tamboril. Mr. Markofsky has served as a Director of
Tamboril since October 1996. Prior to holding his current offices with
Tamboril, Mr. Markofsky served as Vice President and Sales Administration
Manager of Tamboril from March 1996 to April 1997. From April 1995 to January
1996, Mr. Markofsky served as a consultant to Intercare Inc., a medical
management company. From April 1991 to April 1995, he held various positions
with CareFlorida Inc., a health maintenance organization. Mr. Markofsky's
father is Ian Markofsky, President and sole shareholder of Viking Investment
Group II., Inc., an affiliate of the Company by virtue of its shareholdings in
the Company.
Adam S. Gottbetter, 30, Assistant Secretary
Adam S. Gottbetter has served as the Assistant Secretary of the Issuer
since inception. Mr. Gottbetter received his J.D. from the Benjamin N. Cardozo
School of Law and his B.S. in Finance from the School of Business and Economics
at Lehigh University. Since 1992, Mr. Gottbetter has developed, negotiated,
structured and closed equity and debt investments with both public and private
companies on behalf of both issuers and investors. In 1993, Mr. Gottbetter co-
founded the law firm of Kaplan & Gottbetter, predecessor to Kaplan Gottbetter &
Levenson, LLP, which was formed in 1996. As an attorney, Mr. Gottbetter
specializes in corporate finance and securities matters for public companies and
private companies which may be candidates for the public market. Mr. Gottbetter
is a member of the Finance Committee for Compost America Holding Company, Inc.,
a publicly-traded waste management company. He is admitted to the practice of
law in the States of New York and Connecticut.
David S. Rector, 51, Director.
Mr. Rector has served as a Director of Contessa Corporation since June
1998. Mr. Rector has been a director of Tamboril Cigar Company ("Tamboril")
since August, 1996. From August 1996 to March 1997, Mr. Rector was also
Executive Vice President and General Manager of Tamboril, where he was
instrumental in organizing Tamboril's operations and administration. Mr. Rector
was appointed Secretary of Tamboril in June of 1997. Over the past two decades,
Mr. Rector has served as a business consultant to, and held senior positions in,
a variety of ventures. From July of 1995 until July 1996, Mr. Rector was
principal of David Stephen Group, a business consulting firm. Mr. Rector was
Chief Operating Officer of Headstrong Group, a manufacturer and distributor of
recreational safety helmets, from July to November 1995. From January to June
of 1995 Mr. Rector was General Manager of Bemiss-Jason, a distributor of paper
products. From June 1992 to April 1994 he was President of Supercart
International, a distributor of shopping carts. From April 1986 to June 1992 he
was principal of Blue Moon, a distributor of garment buttons. From 1980 to
1985, Mr. Rector served as President of Sunset Designs, a designer of leisure
time craft. From 1972
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to 1980, Mr. Rector held various managerial sales and marketing positions with
Crown Zellerbach Corporation, a multi-billion dollar manufacturer of paper and
forest products.
(b) Although not an employee of the Company, Pietro Bortolatti's
participation in GBDR is significant to GBDR's and the Company's success.
Pietro Bortolatti has served as the President of GBDR since its inception. Mr.
Bortolatti has over 30 years experience in the retail food industry. Mr.
Bortolatti currently manages two other restaurants in Miami under the Bocca Di
Rosa name, one of which is located across the street from GBDR's location.
Neither the Company nor GBDR has an employment agreement with any "key man" life
insurance on Mr. Bortolatti.
(c) Anthony Markofsky, Vice President and a Director of the Issuer, is
the son of Ian Markofsky, the President and the sole shareholder of Viking
Investment Group II, Inc., which is a principal shareholder of the Issuer. Ian
Markofsky was instrumental in the founding of the Issuer and plays a significant
role in promoting the Issuer to the investment community.
Item 6. Executive Compensation.
To date, there has been no annual compensation for the Chief Executive
Officer or any other executive officer of the Company, on an annual basis for
the fiscal year ended December 21, 1997.
The Company currently does not have any stock option or stock incentive
plans.
Item 7. Certain Relationships and Related Transactions.
In March 1996, the Company issued an aggregate of 2,100,000 to its
founders, Messrs. Rudy Roig, Anthony Markofsky, Viking Investment Group II,
Inc., and Parenteau Corporation in connection with the organization and early
development stage of the Company, as follows: Rudy Roig was issued 750,000
shares, Anthony Markofsky was issued 300,000 shares, Viking Investment Group II,
Inc. was issued 525,000 shares and Parenteau Corporation was issued 525,000
shares. In consideration for said shares, the founders paid an aggregate of
$210, consisting of $500 in organization expenses and $3,000 in office
equipment. In September 1996, the Company issued to Kaplan & Gottbetter,
predecessor of Kaplan Gottbetter & Levenson, LLP, 50,000 shares of the common
stock in consideration for legal services valued at $10,000 or $.20 per share.
In July 1996, Rudy Roig was removed as an officer and director of the
Company for breach of his fiduciary duties to the Company. In connection
therewith, pursuant to an escrow agreement dated July 9, 1996 between the
Company and Mr. Roig, Mr. Roig's shareholdings in the Company were returned to
the Company for cancellation in September 1996.
On September 26, 1997, the Company entered into an acquisition agreement,
whereby the Company acquired 500 shares of Gastronnomia Bocca Di Rosa ("GBDR"),
a Florida corporation, being all of the issued and outstanding shares of GBDR,
in exchange for 562,500 shares of the
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common stock, $.0001 par value of the Company (the "Acquisition"). As a result
of the Acquisition, GBDR, which was formed on June 12, 1997, became the wholly-
owned subsidiary of the Company. Prior to the Acquisition, GBDR was a wholly
owned subsidiary of Giuditta Investments, Inc., a corporation organized under
the laws of Florida.
Item 8. Legal Proceedings.
The Issuer is not party to any pending legal proceeding, nor is its
property the subject of any pending legal proceeding that is not routine
litigation that is incidental to its business.
Item 9. Market Price of and Dividends on the Registrant's Common Equity
and Related Shareholder Matters.
(a) The Issuer's Common Stock is listed on the National Association of
Securities Dealers, Inc. Electronic Bulletin Board under the trading symbol of
"CONT". The Common Stock became listed on October 8, 1998, and to date there
has been no established bid price for the Common Stock. Prior to that time,
there has been no trading in the Issuer's Common Stock. Accordingly, the high
and low bid prices for the Issuer's Common Stock for each quarter within the
last two fiscal years and the first three (3) quarters of 1998, as reported by
National Quotation Bureau, LLC, are as follows:
<TABLE>
<CAPTION>
Quarter High Bid Price Low Bid Price
- ------------------------- -------------- -------------
<S> <C> <C>
1998 Q3 (07/01 - 09/30) None None
Q2 (04/01 - 06/30) None None
Q1 (01/01 - 03/31) None None
1997 Q4 (10/01 - 12/31) None None
Q3 (07/01 - 09/30) None None
Q2 (04/01 - 06/30) None None
Q1 (01/01 - 03/31) None None
1996 Q4 (10/01 - 12/31) None None
Q3 (07/01 - 09/30) None None
Q2 (04/01 - 06/30) None None
Q1 (03/17 - 03/31) None None
</TABLE>
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These quotations reflect inter-dealer prices, without retail mark-up, mark-
down or commission, and may not represent actual transactions.
(b) The approximate number of holders of record of the Issuer's Common
Stock according to its transfer agent is 34. The Issuer has not contacted stock
brokerage firms showing on the Issuer's stock transfer records to determine the
number of actual holders holding in "street name."
(c) The Issuer has not paid any cash dividends on its Common Stock, nor
does it intend to do so in the foreseeable future. Under the General
Corporation Law of the State of Delaware, the Issuer may only pay dividends out
of capital and surplus, or out of certain delineated retained earnings, all as
defined in the General Corporation Law. There can be no assurance that the
Issuer will have such funds legally available for the payment of dividends in
the event that the Issuer should decide to do so.
Item 10. Recent Sales of Unregistered Securities.
In March 1996, the Company issued an aggregate of 2,100,000 to its
founders, Messrs. Rudy Roig, Anthony Markofsky, Viking Investment Group II,
Inc., and Parenteau Corporation in connection with the organization and early
development stage of the Company, as follows: Rudy Roig was issued 750,000
shares, Anthony Markofsky was issued 300,000 shares, Viking Investment Group II,
Inc. was issued 525,000 shares and Parenteau Corporation was issued 525,000
shares. In consideration for said shares, the founders paid an aggregate of
$210, consisting of $500 in organization expenses and $3,000 in office
equipment. In September 1996, the Company issued to Kaplan & Gottbetter,
predecessor of Kaplan Gottbetter & Levenson, LLP, 50,000 shares of the common
stock in consideration for legal services valued at $10,000 or $.20 per share.
In July 1996, Rudy Roig was removed as an officer and director of the
Company for breach of his fiduciary duties to the Company. In connection
therewith, pursuant to an escrow agreement dated July 9, 1996 between the
Company and Mr. Roig, Mr. Roig's shareholdings in the Company were returned to
the Company for cancellation in September 1996.
On September 26, 1997, the Company entered into an acquisition agreement,
whereby the Company acquired 500 shares of GBDR, being all of the issued and
outstanding shares of GBDR, in exchange for 562,500 shares of the common stock,
$.0001 par value of the Company (the "Acquisition"). The Company became the
parent company of a wholly-owned subsidiary: Gastronnomia Bocca Di Rosa, Inc., a
Florida corporation formed on June 12, 1997 ("GBDR"). Prior to the Acquisition,
GBDR was a wholly owned subsidiary of Giuditta Investments, Inc., a corporation
organized under the laws of Florida.
In October 1996, the Company sold 850,000 shares of its common stock,
at a price of $0.3529411 per share, aggregating $300,000, pursuant to Rule 504
of Regulation D promulgated under the Act.
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In July 1998, the Company, sold 54,006 shares of its common stock, at a
price of $0.35 per share, aggregating $18,902, pursuant to Rule 504 of
Regulation D promulgated under the Act.
Item 11. Description of Securities.
Common Stock
The only security of the Issuer outstanding is its Common Stock, par value
$.0001 per share. The Company is authorized to issue up to 20,000,000 shares of
Common Stock, par value $.0001 per share, of which 2,866,506 shares are
outstanding on the date hereof. Holders of Common Stock are entitled to one
vote for each share held of record on each matter submitted to a vote of
stockholders. There is no cumulative voting for election of directors. Subject
to the prior rights of any series of preferred stock which may from time to time
be outstanding, if any, holders of Common Stock are entitled to receive ratably,
dividends when, as, and if declared by the Board of Directors out of funds
legally available therefor and, upon the liquidation, dissolution, or winding up
of the Company, are entitled to share ratably in all assets remaining after
payment of liabilities and payment of accrued dividends and liquidation
preferences on the preferred stock, if any. Holders of Common Stock have no
preemptive rights and have no rights to convert their Common Stock into any
other securities. The outstanding Common Stock is validly authorized and
issued, fully paid, and nonassessable.
Preferred Stock
Under the Company's Certificate of Incorporation, as amended (the
"Certificate"), the Board of Directors of the Company is authorized to
designate, and cause the Company to issue, up to five million (5,000,000) shares
of preferred stock of any class or series, having such rights, preferences,
powers and limitations as the Board of Directors shall determine.
Item 12. Indemnification of Directors and Officers.
The Issuer's Certificate and By-laws contain provisions eliminating the
personal liability of a director to the Issuer and its stockholders for certain
breaches of his or her fiduciary duty of care as a director. This provision
does not, however, eliminate or limit the personal liability of a director (i)
for any breach of such director's duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Delaware
statutory provisions making directors personally liable, under a negligence
standard, for unlawful dividends or unlawful stock repurchases or redemptions,
or (iv) for any transaction from which the director derived an improper personal
benefit. This provision offers persons who serve on the Board of Directors of
the Company protection against awards of monetary damages resulting from
breaches of their duty of care (except as indicated above), including grossly
negligent business decisions made in connection with takeover proposals for the
Company. As a
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result of this provision, the ability of the Company or a stockholder thereof to
successfully prosecute an action against a director for a breach of his duty of
care has been limited. However, the provision does not affect the availability
of equitable remedies such as an injunction or recision based upon a director's
breach of his duty of care. The Securities and Exchange Commission (the
"Commission") has taken the position that the provision will have no effect on
claims arising under the federal securities laws.
In addition, the Certificate and By-Laws provide mandatory indemnification
rights, subject to limited exceptions, to any person who was or is party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding by reason of the fact that such person is or was a director
or officer of the Company, or is or was serving at the request of the Company as
a director or officer of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise. Such indemnification rights include
reimbursement for expenses incurred by such person in advance of the final
disposition of such proceeding in accordance with the applicable provisions of
the Delaware General Corporation Law.
Item 13. Financial Statements.
Registrant's Consolidated Financial Statements as of December 31, 1997 and
for the period from March 7, 1996 (inception) to June 30, 1998, and the
independent auditors' report of Thomas Monahan, independent certified public
accountant, with respect thereto, appear on pages F-1 to F-13 of this Form 10-SB
and are incorporated by reference herein by reference thereto.
Item 14. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure.
None.
Item 15. Financial Statements and Exhibits.
(a) Registrant's Consolidated Financial Statements as of December 31,
1997 and for the period form March 7, 1996 (inception) to June 30, 1998, and
the independent auditors' report of Thomas Monahan, independent certified
public accountant, with respect thereto, appear on pages F-1 to F-13 of this
Form 10-SB.
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(b) Exhibits
Exhibit No. Description
----------- -----------
2 Acquisition Agreement and Plan of Reorganization
dated as of dated September 26, 1997 by and
between Contessa Corporation and Gastronnomia
Bocca Di Rosa, Inc.
3.1 Certificate of Incorporation, as amended of
Registrant.
3.2 By-laws of Registrant
10.1 Lease Agreement dated July 1, 1997 by and among
Carolyn Meredith and Gastronnomia Bocca Di Rosa,
Inc.
21 List of Subsidiaries of the Registrant
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SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
CONTESSA CORPORATION
Date: October 29, 1998 By: /s/ Thomas Knudson
---------------------------------
Thomas Knudson
President and Treasurer
Date: October 29, 1998 By: /s/ Anthony Markofsky
---------------------------------
Anthony Markofsky
Vice President and Secretary
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THOMAS P. MONAHAN
CERTIFIED PUBLIC ACCOUNTANT
208 LEXINGTON AVENUE
PATERSON, NEW JERSEY 07502
(973) 790-8775
To The Board of Directors and Shareholders
of Contessa Corporation (a development stage company)
I have audited the accompanying consolidated balance sheet of Contessa
Corporation ( a development stage company) as of December 31, 1997 and the
related consolidated statements of operations, cash flows and shareholders'
equity for the years ending December 31, 1996 and 1997. These consolidated
financial statements are the responsibility of the company's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Contessa
Corporation ( a development stage company) as of December 31, 1997 and the
related consolidated statements of operations, cash flows and shareholders'
equity for the years ending December 31, 1996 and 1997 in conformity with
generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared
assuming that Contessa Corporation ( a development stage company) will continue
as a going concern. As more fully described in Note 2, the Company has incurred
operating losses since inception and requires additional capital to continue
operations. These conditions raise substantial doubt about the Company's ability
to continue as a going concern. Management's plans as to these matters are
described in Note 2. The financial statements do not include any adjustments to
reflect the possible effects on the recoverability and classification of assets
or the amounts and classifications of liabilities that may result from the
possible inability of Contessa Corporation (a development stage company) to
continue as a going concern.
July 3, 1998 /s/ Thomas P. Monahan
---------------------------
Paterson, New Jersey Thomas P. Monahan, CPA
F1
<PAGE>
CONTESSA CORPORATION
(a development stage company)
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
June 30,
December 31, 1998
1997 Unaudited
------------ ---------
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 28,136 $ 23,093
-------- --------
Total current assets 28,136 23,093
Capital assets 102,270 132,148
Other assets
Pre-opening expense 15,605 37,962
Officer Loan receivable 5,500
Security deposits 3,511 7,022
Total other assets 24,616 44,984
Total assets $155,022 $200,225
======== ========
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued expenses $ 23,886 $ 84,802
-------- --------
Total liabilities 23,886 84,802
Stockholders equity
Preferred stock - $0.001 par value, authorized
5,000,000 shares. The number of shares outstanding
at December 31, 1997 and June 30, 1998 was -0-
and -0- respectively.
Common stock - $0.0001 par value, authorized
20,000,000 shares. The number of shares
outstanding at December 31, 1997 and June 30,
1998 was 2,812,500 and 2,866,506 respectively. 281 287
Additional paid in capital 291,910 310,806
Accumulated deficit during development stage (161,055) (195,670)
Total stockholders equity 131,136 115,423
Total liabilities and stockholders equity $155,022 $200,225
======== ========
</TABLE>
See accompanying notes to financial statements.
F2
<PAGE>
CONTESSA CORPORATION
(a development stage company)
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For a period
For the period For the six For the three from inception
from inception, For the year months ended months ended March 7, 1996, to
March 7, 1994, to ended June 30, June 30, June 30,
December 31, December 31, 1997 1998 1998
1996 1997 Unaudited Unaudited Unaudited
------------------ ---------------- -------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C>
Income $ -0- $ -0- $ -0- $ -0- $ -0-
Cost of goods sold -0- -0- -0- -0- -0-
---------- ---------- ---------- ---------- ----------
Gross profit -0- -0- -0- -0- -0-
Operations
General and
administration 155,362 5,693 -0- 34,615 195,670
Depreciation and
amortization -0- -0- -0- -0- -0
---------- ---------- ---------- ---------- ----------
Total expense 155,362 5,693 -0- 34,615 195,670
Net Profit (Loss)
from operations $ (155,362) $ (5,693) -0- $ (34,615) $ (195,670)
========== ========== ========== ========== ==========
Net income
per share-basic $ (.07) $ (.00) $ (.01) $ (.01) $ (.00)
========== ========== ========== ========== ==========
Total number of
shares outstanding 2,250,000 2,812,000 2,250,000 2,866,506 2,866,596
========== ========== ========== ========== ==========
Net Profit (loss)
per share-diluted $ (.07) $ (.00) $ (.01) $ (.01) $ (.00)
========== ========== ========== ========== ==========
Total number of
shares-diluted 2,250,000 2,812,000 2,250,000 2,866,506 2,866,596
========== ========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
F3
<PAGE>
CONTESSA CORPORATION
(a development stage company)
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
For a period
For the period For the six For the six from inception
from inception, For the year months ended months ended March 7, 1996, to
March 7, 1996, to ended June 30, June 30, June 30,
December 31, December 31, 1997 1998 1998
1996 1997 Unaudited Unaudited Unaudited
------------------ ------------- ------------ ------------- ------------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net profit (loss) $(155,362) $ (5,693) $ -0- $(34,615) $(195,670)
Depreciation and
amortization -0- -0- -0- -0 -0-
Non-cash transactions 10,000 56 10,056
Accounts payable 2,294 21,592 60,916 84,802
--------- --------- ------------ -----------------
TOTAL CASH FLOWS
FROM OPERATIONS (143,068) 15,955 -0- 26,301 (100,812)
CASH FLOWS FROM
FINANCING ACTIVITIES
Sale of stock 282,135 301,037
--------- -----------------
TOTAL CASH FLOWS
FROM FINANCING
ACTIVITIES 282,135 301,037
CASH FLOWS FROM
INVESTING ACTIVITIES
Capital assets (102,270) (29,878) (132,148)
Loan receivable (133,779) 133,779
Pre-offering expense (15,605) (22,357) (37,962)
Security deposit (3,511) (3,511) (7,022)
Officer loan receivable (5,500) 5,500
--------- --------- ------------ -----------------
TOTAL CASH FLOWS
FROM INVESTING
ACTIVITIES (139,279) 12,393 (50,246) (177,132)
NET INCREASE
(DECREASE) IN CASH (212) 28,348 -0- (5,043) 23,093
CASH BALANCE
BEGINNING OF PERIOD -0- (212) -0- 28,136 -0-
--------- --------- -----
CASH BALANCE END OF
PERIOD $ (212) 28,136 $ -0- $ 23,093 $ 23,093
--------- --------- ----- ------------ -----------------
</TABLE>
See accompanying notes to financial statements
F4
<PAGE>
CONTESSA CORPORATION
(a development stage company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
<TABLE>
<CAPTION>
Additional Deficit
Preferred Preferred Common Common paid in accumulated during
Date Stock Stock Stock Stock capital development stage Total
- --------------- ---------- ----------- ---------- ---------- ------------------ ----------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
03-10-1996(l) 2,100,000 $210 $ 210
04-10-1996(2) 50,000 5 9,995 10,000
09-06-1996(3) (750,000) (75) (75)
10-31-1996(4) 850,000 85 299,915 300,000
12-31-1996 Net loss (155,362) (155,362)
--------- --------- ---- --------- ---------- ----------
12-31-1996 2,250,000 225 291,910 (155,362) 136,773
09-17-1997(5) 562,000 56 56
12-31-1997 Net loss (5,693) (5,693)
--------- ---------- --------- ---- --------- ---------- ----------
12-31-1997 2,812,000 $281 $ 291,910 $ 161,055 $131,136
Unaudited
- -------------
06-30-1998(6) 54,006 6 18,896 18,902
06-30-1998 Net loss (34,615) (34,615)
--------- ---------- --------- ---- --------- ---------- ----------
06-30-1998 2,866,506 $287 $ 310,806 (195,670) $115,423
========= ==== ========= ========== ==========
</TABLE>
(1) Sale of shares to Company founders at $.0001 per share.
(2) Issuance of shares for legal services aggregating $10,000 or $0.20 per
share.
(3) Cancellation of shares by Company returned by Rudy Riog
(4) Sale of shares for $0.3529411 per share pursuant to Regulation D.
(5) Issuance of shares for the acquisition of Gastronnomia Bocca Di Rosa, Inc.
at $.0001 per share.
(6) Sale of shares pursuant to Rule 504 at $0.35 per share.
See accompanying notes to financial statements.
F5
<PAGE>
CONTESSA CORPORATION
(a development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31,1997
Note 1. Organization of Company and Issuance of Common Stock
----------------------------------------------------
a. Creation of the Company
Contessa Corporation (the "Company") was first formed under the laws of
Delaware on March 7, 1996 under the name United Health Management, Inc., with an
initial capitalization of 20,000,000 shares of common stock, $. 0001 par value
each and 1,000,000 shares of blank check preferred stock,$ .001 par value each.
On March 26, 1996, the Company amended certificate of incorporation to change
its name to United Health Partners, Inc. On September 17,1997, the Company
amended its certificate to change its name to Contessa Corporation and increase
the authorized number of shares of preferred shares to 5,000,000, $.001 par
value each.
b. Description of the Company
Contessa Corporation was formed under the name United Health Management,
Inc., to operate as a managed health care provider, On September 16, 1997, the
board of directors of the Company changed the business of the Company to
Contessa Corporation. On September 26, 1997, the Company entered into an
acquisition agreement, whereby the Company acquired all of the issued and
outstanding shares of Gastronnomia Bocca Di Rosa, Inc., a Florida corporation
formed on June 12, 1997 ("GBDR") in exchange for 562,500 shares of the common
stock. The Company became the parent company of GBDR, a wholly-owned subsidiary,
Prior to the Acquisition, GBDR was a wholly owned subsidiary of Giuditta
Investments, Inc., a corporation organized under the laws of Florida.
The Company and GBDR have not begun significant operations, but GBDR has
obtained the space for the Italian delicatessen/cafe (the "Cafe") that it plans
to open and operate. Currently, the space is being renovated and modified to the
specifications needed for the Cafe. It is expected that GBDR will begin full
operations in July 1998, when the Cafe is opened for business.
c. Issuance of Capital Stock
In March, 1996, the Company sold 2,100,000 shares of common stock for an
aggregate consideration of $210 and issued shares as follows: 750,000 shares to
Rudy Roig, 300,000 shares to Anthony Markofky, 525,000 shares to Viking
Investment Group II, Inc. and 525,000 shares to Fancois Parenteau Corp.
On September 16, 1996, pursuant to an escrow agreement between the Company
and Rudy Riog, Mr. Riog returned his shares to the Company for cancellation.
In April, 1996, the Company issued 50,000 shares of common stock in
consideration for legal services valued at $10,000 or $0.20 per share pursuant
to Rule 701 of the Securities Act of 1933, as amended.
F6
<PAGE>
CONTESSA CORPORATION
(a development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997
In October, 1996, the Company sold 850,000 shares of common stock for an
aggregate consideration of $300,000 or $0.3529411 per share pursuant to Rule 504
of Regulation D, under the Securities Act of 1933, as amended.
On September 30, 1997, the Company issued 562,000 shares of common stock
for the acquisition of GBDR.
Pursuant to a private placement under Rule 504 of the Securities Act of
1933, as amended, (Rule 504), the Company offered in June, 1998, 100,000 shares
of common stock at $0.35 per share. As of June 30, 1998, the Company had sold
54,006 shares common stock for an aggregate consideration of $18,902.
Note 2 - Summary of Significant Accounting Policies
------------------------------------------
a. Basis of Financial Statement Presentation
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company incurred net losses of
$195,670 for the period from inception March 7, 1996 to June 30, 1998. These
factors indicate that the Company's continuation as a going concern is dependent
upon its ability to obtain adequate financing. The Company is anticipating that
with the completion of its private placement and with the increase in working
capital, the Company will complete the restaurant and experience an increase in
sales. The Company will require substantial additional funds to finance its
business activities on an ongoing basis and will have a continuing long-term
need to obtain additional financing. The Company's future capital requirements
will depend on numerous factors including, but not limited to, continued
progress developing its source of inventory of parts supply, initiating
marketing penetration and signing distributors to parts supply contracts. The
Company plans to engage in such ongoing financing efforts on a continuing basis.
The financial statements presented consist of the consolidated balance
sheet of the Company as at December 31, 1997 and June 30, 1998 and the related
consolidated statements of operations, stockholders equity and cash flows for
the year ended December 31, 1996 and 1997 and the related unaudited consolidated
statements of operations, stockholders equity and cash flows for the six months
ended June 30, 1997 and 1998 and for the period from inception, March 7, 1996,
to June 30, 1998.
b. Cash and cash equivalents
The Company treats temporary investments with a maturity of less than three
months as cash.
F7
<PAGE>
CONTESSA CORPORATION
(a development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997
c. Property and Equipment
Property and equipment are stated at cost less accumulated depreciation.
Depreciation is computed over the estimated useful lives using the straight line
methods over a period of five years. Maintenance and repairs are charged against
income and betterment's are capitalized.
d. Earnings per share
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, EARNINGS PER SHARE ("Statement No.
128"). Statement No. 128 applies to entities with publicly held common stock
or potential common stock and is effective for financial statements issued for
periods ending after December 15, 1997. Statement No. 128 replaces APB Opinion
15, Earnings per Share ("EPS"). Statement No. 128 requires dual presentation of
basic and diluted earnings per share by entities with complex capital
structures. Basic EPS includes no dilution and is computed by dividing net
income by the total number of common shares outstanding for the period. Diluted
EPS reflects the potential dilution of securities that could dilute the shares
in computing the earnings of the Company such as common stock which may be
issuable upon exercise of outstanding common stock options or the conversion of
debt into common stock.
Pursuant to the requirements of the Securities and Exchange Commission, the
calculation of the shares used in computing basic and diluted EPS include the
shares of common stock issued for the acquisition of GBDR.
Shares used in calculating basic and diluted net income per share were as
follows:
<TABLE>
<CAPTION>
Six months Six Months
Year ended Year ended ended ended
December 31, December 31, June 30, June 30,
1996 1997 1997 1998
-------------------------------------------------
<S> <C> <C> <C> <C>
Total number common
shares outstanding 2,250,000 2,250,000 2,250,000 2,250,000
Issuance of common
shares the acquisition of GBDR 562,000 562,000
Sale of shares pursuant Rule
504 54,006
--------- ------------ ---------- ---------
Shares used in calculating
per share amounts - Diluted 2,250,000 2,812,000 2,250,000 2,866,506
========= ============ ========== =========
</TABLE>
F8
<PAGE>
CONTESSA CORPORATION
(a development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31,1997
e. Revenue recognition
Revenue is recognized when products are shipped or services are rendered.
f. Selling and Marketing Costs
Selling and Marketing - Certain selling and marketing costs are expensed in
the period in which the cost pertains. Other selling and marketing costs are
expensed as incurred.
g. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
h. Unaudited financial information
In the opinion of management, the accompanying unaudited financial
statements contain all adjustments (consisting only of normal recurring items)
necessary to present fairly the financial position of the Company as of June 30,
1998. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the SEC's rules and
regulations. The results of operations for the periods presented are not
necessarily indicative of the results to be expected for the full year.
i. Significant Concentration of Credit Risk
At December 31, 1997 and June 30, 1998, the Company has concentrated its
credit risk by maintaining deposits in several banks. The maximum loss that
could have resulted from this risk totaled $-0- which represents the excess of
the deposit liabilities reported by the banks over the amounts that would have
been covered by the federal insurance.
j. Asset Impairment
The Company adopted the provisions of SFAS No. 121, Accounting for the
impairment of long lived assets and for long-lived assets to be disposed of
effective January 1, 1996. SFAS No. 121 requires impairment losses to be
recorded on long-lived assets used in operations when indicators of impairment
are present and the estimated undiscounted cash flows to be generated by those
assets are less than the assets' carrying amount. SFAS No. 121 also addresses
the accounting for long-lived assets that are expected to be disposed of. There
was no effect of such adoption on the Company's financial position or results of
operations.
F9
<PAGE>
CONTESSA CORPORATION
(a development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31,1997
Note 3 - Marketable Securities, Available for Sale
-----------------------------------------
The Company adopted Financial Accounting Standards Board ("FASB") Statement
No. 115, "Accounting for Certain Investments in Debt and Equity Securities",
which requires that investments in equity securities that have readily
determinable fair values and investments in debt securities be classified in
three categories: held-to-maturity, trading and available-for-sale. Based on the
nature of the assets held by the Company and management's investment strategy,
the Company's investments have been classified as available-for-sale. Management
determines the appropriate classification of debt securities at the time of
purchase and reevaluates such designation as of each balance sheet date.
Securities classified as available-for-sale are carried at estimated fair
value, as determined by quoted market prices, with unrealized gains and losses,
net of tax, reported in a separate component of stockholders' equity. At
December 31, 1997 and June 30, 1998, the Company had no investments that were
classified as trading or held-to-maturity as defined by the Statement.
The following is a summary of cash, cash equivalents and available-for-sale
securities by balance sheet classification at December 31, 1997:
<TABLE>
<CAPTION>
Estimated
Gross Gross Fair
Unrealized Unrealized Market
Cost Gains Losses Value
---------- ---------- --------- --------
<S> <C> <C> <C> <C>
Cash $28,136 $-0- $-0- $28,136
---------- ---------- --------- --------
Total cash and cash
equivalents $28,136 $-0- $-0- $28,136
========== ========== ========= ========
</TABLE>
The following is a summary of cash, cash equivalents and available-for-
sale securities by balance sheet classification at June 30, 1998:
<TABLE>
<CAPTION>
Cash Total cash and cash equivalents
Estimated
Gross Gross Fair
Unrealized Unrealized Market
Cost Gains Losses Value
---------- ---------- --------- --------
<S> <C> <C> <C> <C>
Cash $23,093 $-0- $-0- $23,093
---------- ---------- --------- --------
Total cash and cash
equivalents $23,093 $-0- $-0- $23,093
========== ========== ========= ========
</TABLE>
F10
<PAGE>
CONTESSA CORPORATION
(a development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997
Note 5 - Capital Assets
--------------
Capital Assets consisted of the following at December 31, 1997:
<TABLE>
<CAPTION>
Asset Accumulated Total
Cost Depreciation
<S> <C> <C> <C>
Store equipment $102,270 $102,270
-------- --------
</TABLE>
Capital Assets consisted of the following at June 30, 1998:
<TABLE>
<CAPTION>
Asset Accumulated Total
Cost Depreciation
<S> <C> <C> <C>
Store equipment $132,148 $132,148
-------- --------
</TABLE>
Note 6 - Preferred Stock
---------------
The Board of Directors of the Company has the authority to establish and
designate any shares of stock in series or classes and to fix any variations in
the designations, relative rights, preferences and limitations between series as
it deems appropriate, by a majority vote.
The preferred stock may be issued in series, each of which may vary, as
determined by the board of directors, as to the designation and number of shares
in such series, voting power of the holders thereof, dividend rate, redemption
terms and prices, voluntary and involuntary liquidation preferences, and
conversion rights and sinking fund requirements, if any, of such series.
The number of shares of preferred stock outstanding at December 31, 1997
and June 30, 1998 is -0-and -0- respectively.
Note 7 - Related Party transaction
-------------------------
a. Issuance of Shares of Capital Stock
In March, 1996, the Company sold 2,100,000 shares of common stock for an
aggregate consideration of $210 and issued shares as follows 750,000 shares to
Rudy Roig, 300,000 shares to Anthony Markofsky, 525,000 shares to Viking
Investment Group II, Inc. and 525,000 shares to Fancois Parenteau Corp.
On September 16, 1996, Rudy Riog returned his shares to the Company for
cancellation.
b. Loan Payable - Officer
As of December 31, 1996, the Viking Investment Group II, Inc. paid bills on
behalf of the Company aggregating $2,294.
F11
<PAGE>
CONTESSA CORPORATION
(a development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997
c. Officer Compensation
For the period from inception March 7, 1996 to December 31, 1997 and for
the six months ended June 30, 1998, the Company has not paid any officer in
excess of $100,000.
Note 8 - Income Taxes
------------
The Company provides for the tax effects of transactions reported in the
financial statements. The provision if any, consists of taxes currently due plus
deferred taxes related primarily to differences between the basis of assets and
liabilities for financial and income tax reporting. The deferred tax assets and
liabilities, if any represent the future tax return consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled. As of June 30, 1998, the Company had no
material current tax liability, deferred tax assets, or liabilities to impact on
the Company's financial position because the deferred tax asset related to the
Company's net operating loss carryforward and was fully offset by a valuation
allowance,
At June 30, 1998, the Company has net operating loss carry forwards for
income tax purposes of $195,670. This carryforward is available to offset future
taxable income, if any, and expires in the year 2010. The Company's utilization
of this carryforward against future taxable income may become subject to an
annual limitation due to a cumulative change in ownership of the Company of more
than 50 percent.
The components of the net deferred tax asset as of June 30, 1998 are as
follows:
Deferred tax asset:
Net operating loss carry forward $ 66,528
Valuation allowance $ (66,528)
Net deferred tax asset $ -0-
=========
The Company recognized no income tax benefit for the loss generated in the
period from inception March 7, 1996 to June 30, 1998.
SFAS No. 109 requires that a valuation allowance be provided if it is more
likely than not that some portion or all of a deferred tax asset will not be
realized. The Company's ability to realize benefit of its deferred tax asset
will depend on the generation of future taxable income. Because the Company has
yet to recognize significant revenue from the sale of its products, the Company
believes that a full valuation allowance should be provided.
Note 9 - Business and Credit Concentrations
----------------------------------
The amount reported in the financial statements for cash, trade accounts
receivable and investments approximates fair market value. Because the
difference between cost and the lower of cost or market is immaterial, no
adjustment has been recognized and investments are recorded at cost.
F12
<PAGE>
CONTESSA CORPORATION
(a development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997
Financial instruments that potentially subject the company to credit risk
consist principally of trade receivables. Collateral is generally not required.
Note 10 - Commitments and Contingencies
-----------------------------
a. Lease agreement for Restaurant Space
On July 1, 1997, GBDR leased 1,812 square feet of space to be used for the
restaurant. The lease is for 10 years with the option to extend the lease for
additional 10 years upon written notice 18 months prior to the termination date
of the lease. Rent for the first 3 years is $3,511 per month or $42,136 per
year plus GBDR's allocated share of real estate taxes and insurance. For the
year ending December 31, 1997 and for the three months ended March 31, 1998,
this amounts to an additional $598 per month added to the monthly rent. The rent
payable for years 4 through 20 is incremented by a cost of living increase. GBDR
has paid a security deposit of $7,022.
Note 11 - Developmental Stage Company
---------------------------
The Company is considered to be a development stage company with little
operating history. The Company is dependent upon the financial resources of the
Company's management for its continued existence. The Company will also be
dependent upon its ability to raise additional capital to complete the
construction of the restaurant and its marketing program, acquire additional
equipment, management talent, inventory and working capital to engage in
profitable business activity. Since its organization, the Company's activities
have been limited to the acquisition of the restaurant location, construction,
hiring personnel, and the preparation of documentation and the sale of a private
placement offering.
F13
<PAGE>
EXHIBIT 2
<PAGE>
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT, (hereinafter referred to as the "Agreement") is
made and entered into this 26th day of September, 1997 by and between CONTESSA
CORPORATION, a Delaware corporation (hereinafter referred to as "Contessa") and
GASTRONNOMIA BOCCA DI ROSA, INC., a Florida (hereinafter referred to as "GBDR").
RECITALS
WHEREAS, Contessa desires to acquire all of the issued and outstanding
shares of GBDR capital stock in exchange for 562,500 shares (the "Shares") of
the authorized but previously unissued Contessa voting common stock, par value
$.0001 per share (the "Common Stock") pursuant to the terms and conditions set
forth herein;
WHEREAS, Giuditta Investments, Inc. ("Giuditta"), a Florida corporation and
the sole shareholder of all of the issued capital stock of GBDR, desires to
exchange all of its shares of GBDR capital stock for shares of Contessa common
stock in the respective amounts set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual
representations, warranties and covenants herein contained, the parties hereto
hereby agree as follows:
ARTICLE I
SECTION 1.1 Acquisition. The parties agree that pursuant to this
-----------
Agreement Contessa shall acquire all of the issued and outstanding shares of
GBDR common stock, in exchange for Five Hundred Sixty-Two Thousand Five Hundred
(562,500) shares of authorized but previously unissued Contessa Common Stock
(the "Acquisition"). It is also agreed to by the parties hereto that by
acquiring all of the GBDR shares, Contessa will acquire all rights, title and
interest to all assets and property presently owned by GBDR which assets and
property may be subject to certain interest, liens and/or encumbrances. The
parties hereto hereby further agree that at the Closing, as defined in the
Escrow Agreement attached hereto, GBDR shall become a wholly-owned subsidiary of
Contessa.
SECTION 1.2 Issuance of Shares.
------------------
(a) Giuditta shall deliver to Contessa a stock certificate in the amount of
Five Hundred (500) shares, representing all of the issued shares and capital
stock of GBDR, with executed stock powers. Contessa shall cause to be issued
and delivered to Giuditta or its designees, stock certificates evidencing an
aggregate of 562,500 shares of Common Stock.
<PAGE>
(b) The Shares to be issued hereunder shall be authorized but previously
unissued shares of Common Stock, and shall be issued to those persons and in the
respective amounts as specified by Giuditta in writing.
(c) All of the Shares to be issued hereunder are deemed "restricted
securities" as defined by Rule 144 of the Securities Act of 1933, as amended
(the "Securities Act"), and the recipients shall represent that they are
acquiring the Shares for investment purposes only and without the intent to make
a further distribution of the Shares. All Shares to be issued under the terms
of this Agreement shall be issued pursuant to an exemption from the registration
requirements of the Securities Act, under Section 4(2) of the Securities Act and
the rules and regulations promulgated thereunder. Certificates representing the
restricted Shares to be issued hereunder shall bear the following, or similar
legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE "ACT"), AND MAY
NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT IN
COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT
TO AN EXEMPTION FROM SUCH REGISTRATION PROVISIONS, THE AVAILABILITY
OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
SECTION 1.3 Financing. Following the Closing, Contessa shall fund GBDR
---------
with $100,000 to be used for the development of GBDR's operations.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF
CONTESSA
Contessa hereby represents, warrants and agrees that:
SECTION 2.1 Organization of Contessa. Contessa is a corporation duly
-------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware, is duly qualified and in good standing as a foreign corporation in
every jurisdiction in which such qualification is necessary, and has the
corporate power and authority to own its properties and assets and to transact
the business in which it is engaged. Contessa has all requisite corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement is the legal, valid and
binding obligation of Contessa, enforceable against Contessa in accordance with
its respective terms except to the extent that such enforcement may be limited
by applicable bankruptcy, insolvency and other similar laws affecting creditors'
rights generally.
2
<PAGE>
SECTION 2.2 Capitalization of Contessa. The authorized capital stock of
--------------------------
Contessa consists of 25,000,000 shares of which 20,000,000 are designated as
common stock, par value $.0001 per share, and 5,000,000 are designated as blank
check preferred stock, par value $.001 per share. Two Million Two Hundred Fifty
Thousand (2,250,000) shares are presently issued and outstanding. The Shares
to be issued pursuant to this Agreement, when so issued, will be duly
authorized, validly issued, fully paid and non-assessable. Upon the issuance of
the Shares, Contessa will have Two Million Eight Hundred Twelve Thousand Five
Hundred (2,812,500) shares issued and outstanding.
SECTION 2.3 Corporate Documents. The Contessa shareholders' list and
-------------------
corporate minute books are complete and accurate as of the date hereof and the
corporate minute books contain the recorded minutes of all corporate meetings of
shareholders and directors.
SECTION 2.4 Litigation. There is no litigation, arbitration, proceeding
----------
or investigation pending or threatened to which Contessa is a party or which may
result in any material change in the business of condition, financial or
otherwise, of Contessa or in any of its properties or assets, or which might
result in any liability on the part of Contessa, or which questions the validity
of this Agreement or of any action taken or to be taken pursuant to or in
connection with the provisions of this Agreement, and to the best knowledge of
Contessa, there is no basis for any such litigation, arbitration, proceeding or
investigation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
GBDR
GBDR hereby represents, warrants and agrees that:
SECTION 3.1 Organization of GBDR. GBDR is a corporation duly organized,
--------------------
validly existing and in good standing under the laws of Florida, is duly
qualified and in good standing in every jurisdiction in which such qualification
is necessary. There are no corporations or other entities with respect to which
(i) GBDR owns any of the outstanding stock or other interests, or (ii) GBDR may
be deemed to be in control because of factors or relationships other than the
quantity of stock or other interests owned in such entity except as otherwise
disclosed hereto. GBDR has all requisite corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby.
SECTION 3.2 Capitalization. The authorized capital stock of GBDR is 500
--------------
shares of common stock par value $1.00 per share, all of which have been
previously issued to Giuditta.
3
<PAGE>
SECTION 3.3 Corporate Documents. The GBDR shareholders' list and
-------------------
corporate minute books are complete and accurate as of the date hereof and the
corporate minute books contain the recorded minutes of all corporate meetings of
shareholders and directors.
SECTION 3.4 Litigation. There is no litigation, arbitration, proceeding
----------
or investigation pending or threatened to which GBDR is a party or which may
result in any material change in the business of condition, financial or
otherwise, of GBDR or in any of its properties or assets, or which might result
in any liability on the part of GBDR, or which questions the validity of this
Agreement or of any action taken or to be taken pursuant to or in connection
with the provisions of this Agreement, and to the best knowledge of GBDR, there
is no basis for any such litigation, arbitration, proceeding or investigation.
SECTION 3.5 Authority. GBDR and, its sole shareholder, Giuditta, have
---------
approved this Agreement and duly authorized the execution hereof. GBDR has full
power, authority and legal right to enter into this Agreement on behalf of GBDR
and its shareholder and to consummate the transactions contemplated hereby, and
all corporate action necessary to authorize the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby has been
duly and validly taken. The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and compliance by GBDR with
the provisions hereof will not (a) conflict with or result in a breach of any
provisions 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 creation of
any lien, security interest, charge or encumbrance upon any of the properties or
assets of GBDR under, any of the terms, conditions or provisions of the Articles
of Incorporation or By-Laws of GBDR, or any note, bond, mortgage, indenture,
license, agreement or any instrument or obligation to which GBDR is a party or
by which it is bound; or (b) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to GBDR or any of its properties or
assets.
SECTION 3.6 Investment Purpose. GBDR has received representations from
------------------
its shareholder that the recipients of the Shares hereunder are acquiring the
shares for investment purposes only and acknowledges that the Shares issued
hereunder are "restricted securities" and may not be sold, traded or otherwise
transferred without registration under the Securities Act or exemption
therefrom.
SECTION 3.7 Operations. GBDR has leased 1,832 square feet on the ground
----------
floor at 2808 Bird Avenue, Coconut Grove, FL 33133 (the "Premises"). GBDR
intends to own and operate a retail food market and take-away prepared food
service at the Premises which is scheduled to open on or before December 1,
1997.
4
<PAGE>
ARTICLE IV
ADDITIONAL AGREEMENTS
SECTION 4.1 Expenses. Whether or not the transactions contemplated in
--------
this Agreement are consummated, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such expense or as otherwise agreed to herein.
SECTION 4.2. Brokers and Finders. Each of the parties hereto represents,
-------------------
as to itself, that no agent, broker, investment banker or firm or person is or
will be entitled to any broker's or finder's fee or any other commission or
similar fee in connection with any of the transactions contemplated by this
Agreement.
SECTION 4.3 Necessary Actions. Subject to the terms and conditions herein
-----------------
provided, each of the parties hereto agree to use all reasonable efforts to
take, or cause to be taken, all action, and to do or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
In the event at any time after the closing, any further action is necessary or
desirable to carry out the purpose of this Agreement, the proper officers and/or
directors of Contessa or GBDR, as the case may be, shall take all such necessary
action.
ARTICLE V
MISCELLANEOUS
SECTION 5.1 Parties in Interest. This Agreement shall inure to the
-------------------
benefit of and be binding upon the parties hereto and the respective successors
and assigns. Nothing in this Agreement is intended to confer, expressly or by
implication, upon any other person any rights or remedies under or by reason of
this Agreement.
SECTION 5.2 Severability. The parties hereto agree and affirm that none
------------
of the provisions herein is dependent upon the validity of any other provision,
and if any part of this Agreement is deemed to be unenforceable, the remainder
of the Agreement shall remain in full force and effect.
SECTION 5.3 Headings. The "Article" and "Section" headings are provided
--------
herein for convenience of reference only and do not constitute a part of this
Agreement.
SECTION 5.4 Assignability. This Agreement shall not be assigned by any of
-------------
the parties hereto without the prior written consent of the other parties.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement of six (6) pages in a manner legally binding upon them as of the date
first above written.
CONTESSA CORPORATION
Attest:
By:
--------------------------------- ----------------------------------
Its: President Secretary
GASTRONNOMIA BOCCA DI ROSA, INC.
Attest:
By:
--------------------------------- ----------------------------------
Its: President Secretary
GIUDITTA INVESTMENTS, INC.
Attest:
By:
--------------------------------- ----------------------------------
Its: President Secretary
6
<PAGE>
EXHIBIT 3.1
<PAGE>
State of Delaware
Office of the Secretary of State
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
INCORPORATION OF "UNITED HEALTH MANAGEMENT, INC.", CHANGING ITS NAME FORM
UNITED HEALTH MANAGEMENT, INC." TO "UNITED HEALTH PARTNERS, INC." FILED IN THIS
OFFICE ON THE SEVENTH DAY OF MARCH, A.D. 1996, AT 9 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS FOR RECORDING.
/S/ Edward J. Freel
-------------------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 7856373
DATE: 03-07-96
<PAGE>
CERTIFICATE OF INCORPORATION
----------- -- -------------
OF
UNITED HEALTH MANAGEMENT, INC.
-----------
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the
acts amendatory thereof and supplemental thereto, and known, identified, and
referred to as the "General Corporation Law of the State of Delaware"), hereby
certifies that:
FIRST: The name of the corporation (hereinafter called the
-----
"corporation") is United Health Management, Inc.
SECOND: The address, including street, number, city, and county, of the
------
registered office of the corporation in the State of Delaware is 1013 Centre
Rd., City of Wilmington 19801, County of New Castle; and the name of the
registered agent of the corporation in the State of Delaware at such address is
The Prentice-Hall Corporation System, Inc.
THIRD: The nature of the business and the purpose to be conducted and
-----
promoted by the corporation, which shall be in addition to the authority of the
corporation to conduct any lawful business, to promote any lawful purpose, and
to engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
FOURTH: The total number of shares of stock which the corporation shall
------
have authority to issue is 21,000,000 of which 20,000,000 shares are designated
as common stock, par value $.0001 per share and 1,000,000 shares of blank check
preferred stock, par value $.001 per share, none of which has been designated.
FIFTH: The name and the mailing address of the incorporator are as
-----
follows:
NAME MAILING ADDRESS
---- ---------------
Adam S. Gottbetter 630 Third Avenue
New York, NY 10017
SIXTH: The corporation is to have perpetual existence.
-----
SEVENTH: Whenever a compromise or arrangement is proposed between this
-------
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware
<PAGE>
may, on the application in a summary way of this corporation or of any creditor
or stockholder thereof or on the application of any receiver or receivers
appointed for this corporation under the provisions of (S)291 of Title 8 of the
Delaware Code or on the application of trustees in dissolution or of any
receiver or receivers appointed for this corporation under the provisions of
(S)279 of Title 8 of the Delaware Code order a meeting of the creditors or class
of creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, to be summoned in such manner as the said
court directs. If a majority in number representing three fourths in value of
the creditors or class of creditors, and/or of the stockholders or class of
stockholders of this corporation, as the case may be, agree to any compromise
or arrangement and to any reorganization of this corporation as consequence of
such compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the stockholders or class of stockholders, of this corporation, as the case
may be, and also on this corporation.
EIGHTH: For the management of the business and for the conduct of the
------
affairs of the corporation, and in further definition, limitation, and
regulation of the powers of the corporation and of its directors and of its
stockholders or any class thereof, as the case may be, it is further provided:
1. The management for the business and the conduct of the affairs
of the corporation shall be vested in its Board of Directors. The
number of directors which shall constitute the whole Board of
Directors shall be fixed by, or in the manner provided in, the Bylaws.
The phrase "whole Board" and the phrase "total number of directors"
shall be deemed to have the same meaning, to wit, the total number of
directors which the corporation would have if there were no vacancies.
No election of directors need be by written ballot.
2. After the original or other Bylaws of the corporation have
been adopted, amended, or repealed, as the case may be, in accordance
with the provisions of (S)109 of the General Corporation Law of the
State of Delaware, and, after the corporation has received any payment
for any of its stock, the power to adopt, amend, or repeal the Bylaws
of the corporation may be exercised by the Board of Directors of the
corporation; provided, however, that any provision for the
classification of directors of the corporation for staggered terms
pursuant to the provisions of subsection (d) of (S)141 of the General
Corporation Law of the State of Delaware shall be set forth in an
initial Bylaw or in a Bylaw adopted by the stockholders entitled to
vote of the corporation unless provisions for such classification
shall be set forth in this certificate of incorporation.
<PAGE>
3. Whenever the corporation shall be authorized to issue only one
class of stock, each outstanding share shall entitle the holder
thereof to notice of, and the right to vote at, any meeting of
stockholders. Whenever the corporation shall be authorized to issue
more than one class of stock, no outstanding share of any class of
stock which is denied voting power under the provisions of the
certificate of incorporation shall entitle the holder thereof to the
right to vote at any meeting of stockholders except as the provisions
of paragraph (2) of subsection (b) of (S)242 of the General
Corporation Law of the State of Delaware shall otherwise require;
provided, that no share of any such class which is otherwise denied
voting power shall entitle the holder thereof to vote upon the
increase or decrease in the number of authorized shares of said
class.
NINTH: The personal liability of the directors of the corporation is
-----
hereby eliminated to the fullest extent permitted by the provisions of
paragraph (7) of subsection (b) of (S)102 of the General Corporation Law of the
State of Delaware, as the same may be amended and supplemented.
TENTH: The corporation shall, to the fullest extent permitted by the
-----
provisions of (S)145 of the General Corporation Law of the State of Delaware, as
the same may be amended and supplemented, indemnify any and all persons whom it
shall have power to indemnify under said section from and against any and all of
the expenses, liabilities, or other matters referred to in or covered by said
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any Bylaw, agreement, vote of stockbrokers or disinterested directors or
otherwise both as to action in his official capacity and as to action in another
capacity while holding such office, and shall continue as to a person who has
ceased to be a director, officer, employee, or agent and shall inure to the
benefit of the heirs, executors, and administrators of such a person.
ELEVENTH: From time to time any of the provisions of this certificate of
--------
incorporation may be amended, altered, or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and all
rights at any time conferred upon the stockholders of the corporation by this
certificate of incorporation are granted subject to the provisions of this
Article ELEVENTH.
Signed on March 6, 1996
/s/ Adam S. Gottbetter
--------------------------------------------------------------
By: Adam S. Gottbetter, Incorporator
<PAGE>
State of Delaware
Office of the Secretary of State
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT
OF "UNITED HEALTH MANAGEMENT, INC.", CHANGING ITS NAME FORM UNITED HEALTH
MANAGEMENT, INC." TO "UNITED HEALTH PARTNERS, INC." FILED IN THIS OFFICE ON THE
TWENTY-SIXTH DAY OF MARCH, A.D. 1996, AT 9 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS FOR RECORDING.
/S/ Edward J. Freel
-------------------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 7882968
DATE: 03-26-96
<PAGE>
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
BEFORE PAYMENT OF
ANY PART OF THE CAPITAL
OF
UNITED HEALTH MANAGEMENT, INC.
-----------
It is hereby certified that:
1. The name of the corporation (hereinafter called the "corporation") is
UNITED HEALTH MANAGEMENT, INC.
2. The corporation has not received any payment for any of its stock.
3. The certificate of incorporation of the corporation is hereby amended
by striking out Article First thereof and by substituting in lieu of said
Article the following new Article First:
"The name of the corporation (hereinafter called the "corporation") is
United Health Partners, Inc."
4. The amendment of the certificate of incorporation of the corporation
herein certified was duly adopted, pursuant to the provisions of Section 241 of
the General Corporation Law of the State of Delaware, by the sole incorporator,
no directors having been named in the certificate of incorporation and no
directors having been elected.
Signed on March 26, 1996.
/s/ Adam S. Gottbetter
------------------------------------------
Adam S. Gottbetter, Sole Incorporator
<PAGE>
State of Delaware
Office of the Secretary of State
-----------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT
OF "UNITED HEALTH PARTNERS, INC.", CHANGING ITS NAME FROM "UNITED HEALTH
PARTNERS, INC." TO "CONTESSA CORPORATION", FILED IN THIS OFFICE ON THE
SEVENTEENTH DAY OF SEPTEMBER, A.D. 1997, AT 12:30 O'CLOCK P.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS FOR RECORDING.
/S/ Edward J. Freel
-------------------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 8661525
DATE: 09-22-97
<PAGE>
2
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
OF
United Health Partners, Inc.
-----------
It is hereby certified that:
1. The name of the corporation (hereinafter called the "Corporation") is
United Health Partners, Inc.
2. The certificate of incorporation of the Corporation is hereby amended
by striking out Article First thereof and by substituting in lieu of said
Article the following new Article First:
"The name of the corporation (hereinafter called the "Corporation") is
CONTESSA CORPORATION."
3. The certificate of incorporation of the Corporation is hereby amended
by striking out Article Fourth thereof and by substituting in lieu of said
Article the following new Article Fourth:
"The total number of shares of capital stock which the Corporation
shall have authority to issue is 25,000,000 shares of which 20,000,000 shares
shall be common stock, par value $.0001 per share and 5,000,000 shares shall be
blank check preferred stock, par value $.001 per share, none of which has been
designated.
The preferred stock may be issued from time to time in one or more
series. The Board of Directors is hereby expressly authorized to provide by
resolution or resolutions duly adopted prior to issuance, for the creation of
each such series and to fix the designation and the powers, preferences, rights,
qualifications, limitations, and restrictions relating to the shares of each
such series. The authority of the Board of Directors with respect to each
series of preferred stock shall include, but not be limited to, determining the
following:
(a) the designation of such series, the number of shares to constitute
such series and the stated value thereof if different from the par
value thereof;
(b) whether the shares of such series shall have voting rights, in
addition to any voting rights provided by law, and, if so, the term of
such voting rights, which may be general or limited;
<PAGE>
3
(c) the dividends, if any, payable on such series, whether any such
dividends shall be cumulative, and, if so, from what dates, the
conditions and dates upon which such dividends shall be payable, and
the preference or relation which such dividends shall bear to the
dividends payable on any shares of stock of any other class or any
other series of preferred stock;
(d) whether the shares of such series shall be subject to redemption
by the Corporation, and, if so, the times, prices and other conditions
of such redemption;
(e) the amount or amounts payable upon shares of such series upon, and
the rights of the holders of such series in, the voluntary or
involuntary liquidation, dissolution or winding up, or upon any
distribution of the assets, of the Corporation;
(f) whether the shares of such series shall be subject to the
operation of a retirement or sinking fund and, if so, the extent to
and manner in which any such retirement or sinking fund shall be
applied to the purchase or redemption of the shares of such series for
retirement or other Corporation purposes and the terms and provisions
relating to the operation thereof;
(g) whether the shares of such series shall be convertible into, or
exchangeable for, shares of stock of any other class or any other
series of Preferred Stock or any other securities and, if so, the
price or prices or the rate or rates of conversion or exchange and the
method, if any, of adjusting the same, and any other terms and
conditions of conversion or exchange;
(h) the conditions or restrictions, if any, upon the creation of
indebtedness of the Corporation or upon the issue of any additional
stock, including additional shares of such series or of any other
series of preferred stock or of any other class; and
(i) any other powers, preferences and relative, participating, options
and other special rights, and any qualifications, limitations and
restrictions, thereof.
The powers, preferences and relative, participating optional and other
special rights of each series of preferred stock, and the qualifications,
limitations or restrictions thereof, if any, may differ from those of any and
all other series at any time outstanding. All shares of any one series of
preferred stock shall be identical in all respects with all other shares of such
series, except that shares
<PAGE>
4
of any one series issued at different times may differ as to the dates from
which dividends thereof shall be cumulative."
4. The amendments of the certificate of incorporation of the Corporation
herein certified were duly adopted, pursuant to the provisions of Section 242 of
the General Corporation Law of the State of Delaware, by actions without meeting
of the Directors on September 16, 1997 and consent of stockholders in lieu of
meeting on September 16, 1997.
Signed on September 16, 1997.
/s/ Thomas Knudson
-----------------------------------------
Thomas Knudson, President
<PAGE>
EXHIBIT 3.2
<PAGE>
BY-LAWS
OF
CONTESSA CORPORATION
(Formerly United Health Partners, Inc.)
ARTICLE I
OFFICES
SECTION 1. REGISTERED OFFICE. -- The registered office shall be
established and maintained at 32 Loockerman Square, Suite L-100, in the City of
Dover, in the County of Kent, in the State of Delaware. The name of its
registered agent at that address is The Prentice-Hall Corporation System, Inc.
SECTION 2. OTHER OFFICES. -- The corporation may have other offices,
either within or without the State of Delaware, at such place or places as the
Board of Directors may from time to time appoint or the business of the
corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS. -- Annual Meetings of stockholders for
the election of directors and for such other business as may be stated in the
notice of the meeting, shall be held at such place, either within or without the
State of Delaware, and at such time and date as the Board of Directors, by
resolution, shall determine and as set forth in the notice of the meeting.
If the date of the annual meeting shall fall upon a legal holiday, the
meeting shall be held on the next succeeding business day. At each annual
meeting, the stockholders entitled to vote shall elect a Board of Directors and
they may transact such other corporate business as shall be stated in the notice
of the meeting.
SECTION 2. OTHER MEETINGS. -- Meetings of stockholders for any
purpose other than the election of directors may be held at such time and place,
within or without the State of Delaware, as shall be stated in the notice of the
meeting.
SECTION 3. VOTING. -- Each stockholder entitled to vote in accordance
with the terms of the Certificate of Incorporation and in accordance with the
provisions of these By-
<PAGE>
Laws shall be entitled to one vote, in person or by proxy, for each share of
stock entitled to vote held by such stockholder, but no proxy shall be voted
after three years from its date unless such proxy provides for a longer period.
Upon the demand of any stockholder, the vote for directors and the vote upon any
question before the meeting, shall be by ballot. All elections for directors
shall be decided by plurality vote; all other questions shall be elected by
majority vote except as otherwise provided by the Certificate of Incorporation
or the laws of the State of Delaware.
A complete list of the stockholders entitled to vote at the ensuing
election, arranged in alphabetical order, with the address of each, and the
number of shares held by each, shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours for a period of at least ten days prior to the meeting, either at a place
within the city where the meeting is to be held, which place shall be specified
in the notice of the meeting, or, if not so specified, at the place where the
meeting is to be held. The list shall also be produced and kept at the time and
place of the meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
SECTION 4. QUORUM. -- Except as otherwise required by law, by the
Certificate of Incorporation or by these By-Laws, the presence, in person or by
proxy, of stockholders holding a majority of the stock of the corporation
entitled to vote shall constitute a quorum at all meetings of the stockholders.
In case a quorum shall not be present at any meeting, a majority in interest of
the stockholders entitled to vote thereat, present in person or by proxy, shall
have power to adjourn the meeting from time to time, without notice other than
announcement at the meeting until the requisite amount of stock entitled to vote
shall be present. At any such adjourned meeting at which the requisite amount of
stock entitled to vote shall be represented, any business may be transacted
which might have been transacted at the meeting as originally noticed; but only
those stockholders entitled to vote at the meeting as originally noticed shall
be entitled to vote at any adjournment or adjournments thereof.
SECTION 5. SPECIAL MEETINGS. -- Special meetings of the stockholders
for any purpose or purposes may be called by the President or Secretary, or by
resolution of the directors.
SECTION 6. NOTICE OF MEETINGS. -- Written notice, stating the place,
date and time of the meeting, and the general nature of the business to be
considered, shall be given to each stockholder entitled to vote thereat at his
address as it appears on the records of the corporation, not less than ten nor
more than sixty days before the date of the meeting. No business other than
that stated in the notice shall be transacted at any meeting without the
unanimous consent of all the stockholders entitled to vote thereat.
SECTION 7. ACTION WITHOUT MEETING. -- Unless otherwise provided by
the Certificate of Incorporation, any action required to be taken at any annual
or special meeting of stockholders, or any action which may be taken at any
annual or special meeting, may be taken without a meeting, without prior notice
and without a vote, if a consent in writing, setting
2
<PAGE>
forth the action so taken, shall be signed by the holders of outstanding stock
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted. Prompt notice of the taking of the corporate
action without a meeting by less than unanimous written consent shall be given
to those stockholders who have not consented in writing.
ARTICLE III
DIRECTORS
SECTION 1. NUMBER AND TERM. -- The number of directors initially
shall be three (3). The directors shall be elected at the annual meeting of the
stockholders and each director shall be elected to serve until his or her
successor shall be elected and shall qualify. Directors need not be
stockholders.
SECTION 2. RESIGNATIONS. -- Any director, member of a committee or
other officer may resign at any time. Such resignation shall be made in
writing, and shall take effect at the time specified therein, and if no time be
specified, at the time of its receipt by the President or Secretary. The
acceptance of a resignation shall not be necessary to make it effective.
SECTION 3. VACANCIES. -- If the office of any director, member of a
committee or other officer becomes vacant, the remaining directors in office,
though less than a quorum by a majority vote, may appoint any qualified person
to fill such vacancy, who shall hold office for the unexpired term and until his
successor shall be duly chosen.
SECTION 4. REMOVAL. -- Except as hereinafter provided, any director
or directors may be removed either for or without cause at any time by the
affirmative vote of the holders of a majority of all the shares of stock
outstanding and entitled to vote, at a special meeting of the stockholders
called for the purpose and the vacancies thus created may be filled, at the
meeting held for the purpose of removal, by the affirmative vote of a majority
in interest of the stockholders entitled to vote.
Unless the Certificate of Incorporation otherwise provides,
stockholders may effect removal of a director who is a member of a classified
Board of Directors only for cause. If the Certificate of Incorporation provides
for cumulative voting and if less than the entire board is to be removed, no
director may be removed without cause if the votes cast against his removal
would be sufficient to elect him if then cumulatively voted at an election of
the entire Board of Directors, or, if there be classes of directors, at an
election of the class of directors of which he is a part.
If the holders of any class or series are entitled to elect one or
more directors by the provisions of the Certificate of Incorporation, these
provisions shall apply, in respect to the
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<PAGE>
removal without cause of a director or directors so elected, to the vote of the
holders of the outstanding shares of the class or series and not to the vote of
the outstanding shares as a whole.
SECTION 5. INCREASE OF NUMBER. -- The number of directors may be
increased by amendment of these By-Laws by the affirmative vote of a majority of
the directors, though less than a quorum, or, by the affirmative vote of a
majority in interest of the stockholders, at the annual meeting or at a special
meeting called for that purpose, and by like vote the additional directors may
be chosen at such meeting to hold office until the next annual election and
until their successors are elected and qualify.
SECTION 6. POWERS. -- The Board of Directors shall exercise all of
the powers of the corporation except such as are by law, or by the Certificate
of Incorporation of the corporation or by these By-Laws conferred upon or
reserved to the stockholders.
SECTION 7. COMMITTEES. -- The Board of Directors may, by resolution
or resolutions passed by a majority of the whole board, designate one or more
committees, each committee to consist of two or more of the directors of the
corporation. The board may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of the committee. In the absence or disqualification of any member of
such committee or committees, the member or members thereof present at any
meeting and not disqualified from voting, whether or not he or they constitute a
quorum, may unanimously appoint another member of the Board of Directors to act
at the meeting in the place of any such absent or disqualified member.
Any such committee, to the extent provided in the resolution of the
Board of Directors, or in these By-Laws, shall have and may exercise all the
powers and authority of the Board of Directors in the management of the business
and affairs of the corporation, and may authorize the seal of the corporation to
be affixed to all papers which may require it; but no such committee shall have
the power or authority in reference to amending the Certificate of
Incorporation, adopting an agreement of merger or consolidation, recommending to
the stockholders the sale, lease or exchange of all or substantially all of the
corporation's property and assets, recommending to the stockholders a
dissolution of the corporation or a revocation of a dissolution, or amending the
By-Laws of the corporation; and, unless the resolution, these By-Laws or the
Certificate of Incorporation expressly so provide, no such committee shall have
the power or authority to declare a dividend or to authorize the issuance of
stock.
SECTION 8. MEETINGS. -- The newly elected directors may hold their
first meeting for the purpose of organization and the transaction of business,
if a quorum be present, immediately after the annual meeting of the
stockholders; or the time and place of such meeting may be fixed by consent in
writing of all the directors.
Regular meetings of the directors may be held without notice at such
places and times as shall be determined from time to time by resolution of the
directors.
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Special meetings of the board may be called by the President or by
the Secretary on the written request of any two directors on at least two days'
notice to each director and shall be held at such place or places as may be
determined by the directors, or as shall be stated in the call of the meeting.
Unless otherwise restricted by the Certificate of Incorporation or
these By-Laws, members of the Board of Directors, or any committee designated by
the Board of Directors, may participate in a meeting of the Board of Directors,
or any committee, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and such participation in a meeting shall constitute presence in
person at the meeting.
SECTION 9. QUORUM. -- A majority of the directors shall constitute a
quorum for the transaction of business. If at any meeting of the board there
shall be less than a quorum present, a majority of those present may adjourn the
meeting from time to time until a quorum is obtained, and no further notice
thereof need be given other than by announcement at the meeting which shall be
adjourned.
SECTION 10. COMPENSATION. -- Directors shall not receive any stated
salary for their services as directors or as members of committees, but by
resolution of the board a fixed fee and expenses of attendance may be allowed
for attendance at each meeting. Nothing herein contained shall be construed to
preclude any director from serving the corporation in any other capacity as an
officer, agent or otherwise, and receiving compensation therefor.
SECTION 11. ACTION WITHOUT MEETING. -- Any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting, if prior to such action a
written consent thereto is signed by all members of the board, or of such
committee, as the case may be, and such written consent is filed with the
minutes of proceedings of the board or committee.
ARTICLE IV
OFFICERS
SECTION 1. OFFICERS. -- The officers of the corporation shall be a
President, a Treasurer, and a Secretary, all of whom shall be elected by the
Board of Directors and who shall hold office until their successors are elected
and qualify. In addition, the Board of Directors may elect a Chairman, one or
more Vice Presidents and such Assistant Secretaries and Assistant Treasurers as
they may deem proper. None of the officers of the corporation need be
directors. The officers shall be elected at the first meeting of the Board of
Directors after each annual meeting. More than two offices may be held by the
same person.
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SECTION 2. OTHER OFFICERS AND AGENTS. -- The Board of Directors may
appoint such other officers and agents as it may deem advisable, who shall hold
their offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the Board of Directors.
SECTION 3. CHAIRMAN. -- The Chairman of the Board of Directors, if
elected, shall preside at all meetings of the Board of Directors and he shall
have and perform such other duties as from time to time may be assigned to him
by the Board of Directors.
SECTION 4. PRESIDENT. -- The President shall be the chief executive
officer of the corporation and shall have the general powers and duties of
supervision and management usually vested in the office of President of a
corporation. He shall preside at all meetings of the stockholders if present
thereat, and in the absence or non-election of the Chairman of the Board of
Directors, at all meetings of the Board of Directors, and shall have general
supervision, direction and control of the business of the corporation. Except
as the Board of Directors shall authorize the execution thereof in some other
manner, he shall execute bonds, mortgages and other contracts on behalf of the
corporation, and shall cause the seal to be affixed to any instrument requiring
it and when so affixed the seal shall be attested by the signature of the
Secretary or the Treasurer or an Assistant Secretary or an Assistant Treasurer.
SECTION 5. VICE PRESIDENT. -- Each Vice President, if elected, shall
have such powers and shall perform such duties as shall be assigned to him by
the directors.
SECTION 6. TREASURER. -- The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate account of
receipts and disbursements in books belonging to the corporation. He shall
deposit all moneys and other valuables in the name and to the credit of the
corporation in such depositaries as may be designated by the Board of Directors.
The Treasurer shall disburse the funds of the corporation as may be
ordered by the Board of Directors, or the President, taking proper vouchers for
such disbursements. He shall render to the President and Board of Directors at
the regular meetings of the Board of Directors, or whenever they may request it,
an account of all his transactions as Treasurer and of the financial condition
of the corporation. If required by the Board of Directors, he shall give the
corporation a bond for the faithful discharge of his duties in such amount and
with such surety as the board shall prescribe.
SECTION 7. SECRETARY. -- The Secretary shall give, or cause to be
given, notice of all meetings of stockholders and directors, and all other
notices required by law or by these By-Laws, and in case of his absence or
refusal or neglect so to do, any such notice may be given by any person
thereunto directed by the President, or by the directors, or stockholders, upon
whose requisition the meeting is called as provided in these By-Laws. He shall
record all the proceedings of the meetings of the corporation and of the
directors in a book to be kept for
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that purpose, and shall perform such other duties as may be assigned to him by
the directors or the President. He shall have custody of the seal of the
corporation and shall affix the same to all instruments requiring it, when
authorized by the directors or the President, and attest the same.
SECTION 8. ASSISTANT TREASURERS & ASSISTANT SECRETARIES. --Assistant
Treasurers, and Assistant Secretaries, if any, shall be elected and shall have
such powers and shall perform such duties as shall be assigned to them,
respectively, by the directors.
ARTICLE V
MISCELLANEOUS
SECTION 1. CERTIFICATES OF STOCK. -- Certificates of stock, signed by
the Chairman or Vice Chairman of the Board of Directors, if they be elected,
President or Vice President, and the Treasurer or an Assistant Treasurer, or
Secretary or an Assistant Secretary, shall be issued to each stockholder
certifying the number of shares owned by him in the corporation. Any or all of
the signatures may be facsimiles.
SECTION 2. LOST CERTIFICATES. -- A new certificate of stock may be
issued in the place of any certificate theretofore issued by the corporation,
alleged to have been lost or destroyed, and the directors may, in their
discretion, require the owner of the lost or destroyed certificate, or his legal
representatives, to give the corporation a bond, in such sum as they may direct,
not exceeding double the value of the stock, to indemnify the corporation
against any claim that may be made against it on account of the alleged loss of
any such certificate, or the issuance of any such new certificate.
SECTION 3. TRANSFER OF SHARES. -- The shares of stock of the
corporation shall be transferable only upon its books by the holders thereof in
person or by their duly authorized attorneys or legal representatives, and upon
such transfer the old certificates shall be surrendered to the corporation by
the delivery thereof to the person in charge of the stock and transfer books and
ledgers, or to such other person as the directors may designate, by whom they
shall be cancelled, and new certificates shall thereupon be issued. A record
shall be made of each transfer and whenever a transfer shall be made of
collateral security, and not absolutely, it shall be so expressed in the entry
of the transfer.
SECTION 4. STOCKHOLDERS RECORD DATE. -- In order that the corporation
may determine the stockholders entitled to notice of or to vote at any meeting
of stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than sixty nor less than ten
days before the date of such meeting, nor more than sixty days prior to any
other action. A determination of
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<PAGE>
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
SECTION 5. DIVIDENDS. -- Subject to the provisions of the Certificate
of Incorporation, the Board of Directors may, out of funds legally available
therefor at any regular or special meeting, declare dividends upon the capital
stock of the corporation as and when they deem expedient. Before declaring any
dividend there may be set apart out of any funds of the corporation available
for dividends, such sum or sums as the directors from time to time in their
discretion deem proper for working capital or as a reserve fund to meet
contingencies or for equalizing dividends or for such other purposes as the
directors shall deem conducive to the interests of the corporation.
SECTION 6. SEAL. -- The corporate seal shall be circular in form and
shall containing the name of the corporation, the year of its creation and the
words "CORPORATE SEAL DELAWARE." Said seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
SECTION 7. FISCAL YEAR. -- The fiscal year of the corporation shall
be determined by resolution of the Board of Directors.
SECTION 8. CHECKS. -- All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the corporation shall be signed by such officer or officers, agent or agents of
the corporation, and in such manner as shall be determined from time to time by
resolution of the Board of Directors.
SECTION 9. NOTICE AND WAIVER NOTICE. -- Whenever any notice is
required by these By-Laws to be given, personal notice is not meant unless
expressly so stated, and any notice so required shall be deemed to be sufficient
if given by depositing the same in the United States mail or with an express
delivery courier, postage prepaid, addressed to the person entitled thereto at
his address as it appears on the records of the corporation, and such notice
shall be deemed to have been given on the day of such mailing. Stockholders not
entitled to vote shall not be entitled to receive notice of any meetings except
as otherwise provided by Statue.
Whenever any notice whatever is required to be given under the
provisions of any law, or under the provisions of the Certificate of
Incorporation or the corporation or these By-Laws, a waiver thereof in writing,
signed by the person or persons entitled to said notice, whether before or after
the time stated therein, shall be deemed equivalent thereto.
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<PAGE>
ARTICLE VI
AMENDMENTS
These By-Laws may be altered or repealed and By-Laws may be made at
any annual meeting of the stockholders or at any special meeting thereof if
notice of the proposed alteration or repeal or By-Law or By-Laws to be made be
contained in the notice of such special meeting, by the affirmative vote of a
majority of the stock issued and outstanding and entitled to vote thereat, or by
the affirmative vote of a majority of the Board of Directors, at any regular
meeting of the Board of Directors, or at any special meeting of the Board of
Directors, if notice of the proposed alteration or repeal, or By-Laws to be
made, be contained in the notice of such special meeting.
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EXHIBIT 10.1
<PAGE>
LEASE
THIS LEASE AGREEMENT is made as of the 1st day of July, 1997 by and
between CAROLYN MEREDITH, (the "Landlord") and BOCCA DI ROSA, GASTRONNOMIA,
INC., a Florida corporation (the "Tenant"), who hereby mutually covenant and
agree as follows:
1. Lease of Premises.
------------------
1.01. Lease of Premises.
------------------
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord, upon
and subject to the covenants, agreements, provisions and conditions of this
Lease, the space located at 2806 and 2808 Bird Avenue, Coconut Grove, Florida,
33133, situated on a parcel plot of land described on Exhibit A (the "Land").
1.02 Leased Premises.
----------------
Premises "A" shall mean the 1832 square feet on ground floor at 2808 Bird Ave,
as shown on Exhibit B. Premises "B" shall mean 916 sq. ft. on the ground floor
at 2806 Bird Ave., as shown on Exhibit "B".
1.03 Common Building Facilities.
---------------------------
This lease includes the right of the Tenant to use the Common Building
Facilities in common with other tenants of the Building. The words "Common
Building Facilities" shall mean all of the facilities in or around the Building
designed and intended for use by the tenants of the building in common with
Landlord and each other, including corridors, fire stairs, telephone and
electric closets, telephone trunk lines and electric risers, aisles, walkways,
truck docks, customer parking areas not reserved for the exclusive use by
Landlord and others, courts, service areas, landscaped areas, and all other
common and service areas of the Building designated for such use from time to
time. All common Building Facilities during the initial five years of this
lease shall at all times be subject to the control and management of the Tenant.
Thereafter all common building facilities shall be subject to the control and
management of the Landlord with due regard to Tenant's use of Premises "A" as a
restaurant serving lunch and dinner, and the Landlord shall have the right, from
time to time, to change the area, level, location and arrangement of parking
areas and other facilities hereinabove referred to. Landlord reserves the right
to do and perform such acts in and to the Common Building Facilities as, in the
use of good business judgment, the Landlord shall determine to be advisable with
view to the improvement of the convenience and use thereof by tenants and
customers.
<PAGE>
2. Term
----
2.01. Initial Term
------------
Tenant shall lease Premises "A" for an initial term of ten (10) years
("Initial Term") beginning on July 1, 1997, subject to extension and earlier
termination as hereinafter provided. The words "Lease Year" shall mean any
twelve (12) consecutive calendar month period.
2.02. Extended Term
-------------
Provided Tenant is not in default under any material term of this Lease,
beyond any applicable periods of notice and grace, at the time of the exercise
of the option set forth in this section or at the time of the beginning of such
Extended Term, Tenant shall have the option to extend the Initial Term for the
Extended Term upon and subject to the following terms and conditions;
(a) Tenant may extend this Lease for up to an additional ten (10) years by
the Tenant's giving written notice thereof to the Landlord no later than
eighteen (18) months prior to the expiration of the Initial Term. The Extended
Term shall begin immediately upon the expiration of the Initial Term. If Tenant
does not extend this lease in a timely manner, then Tenant's rights to extend
this lease shall expire and be of no further force or effect.
(b) The exercise by Tenant of the extension option must be made, if at all,
by written notice executed by Tenant and delivered to Landlord on or before the
date set forth above. After Tenant has exercised the option, Tenant may not
thereafter revoke such exercise.
(c) Landlord shall have no obligation to make any improvements, decorations
or alterations to Premises "A" and "B", other than Landlord's existing
obligations under this Lease.
(d) Except as set forth in this section, the leasing of Premises "A" and
"B" for the Extended Term shall be upon the same terms, covenants, agreements,
provisions and conditions of this Lease as are in effect as of the date
immediately prior to the beginning of the Extended Term.
2.01. Commencement Date
-----------------
The words "Commencement Date" shall mean July 1st, 1997
2.4 Term of this Lease for Premises "A"
-----------------------------------
The word "Term" shall mean the Initial Term and The Extended Term if it
shall become effective.
<PAGE>
3. Rent, Additional Rent, Utilities
--------------------------------
3.01 Fixed Minimum Annual Rent for Premises "A"
Beginning on February 1, 1997 and subject to the provisions of this Lease,
Tenant shall pay annual rent of Forty-two Thousand One Hundred Thirty-six
Dollars ($42,136.00) payable in equal monthly installments in advance of Three
Thousand Five Hundred Eleven Dollars Thirty-three ($3,511.33) on the first day
of each calendar month. Beginning on May 1, 1998, Tenant shall pay$ 21,068.00
(Twenty One Thousand and Sixty Eight Dollars) payable in equal installments of
$1,755.66 (One Thousand Seven Hundred Fifty-five Dollars and Sixty six cents)
on the first day of the calender for premises "B".
3.02 Rent for any period less than one month shall be apportioned based
on the number of days in that month. Tenant will pay the annual rent and
additional rent to Landlord or to such other person or at such other place as
the Landlord may designate in writing, without demand, deduction, set-off or
counterclaim, except as expressly provided herein. All payments of annual rent
shall be accompanied each month by a sum equal to any sales tax on rentals, and
any other charges, taxes, or impositions now in existence or hereafter imposed
based upon the privilege of renting the Leased Premises or the amount of
rentals collected therefor. Nothing herein shall, however, be taken to require
Tenant to pay any federal or state tax on income imposed by Landlord. Tenant
shall be responsible for and shall pay before delinquent all municipal, county
or state taxes assessed during the Term against any leasehold interest or
personal property of any kind, used, owned by or placed in, upon or about
Premises "A" and "B" by the Tenant.
3.03 Cost of Living Increases in Fixed Minimum Annual Rent.
------------------------------------------------------
Beginning with the Tenant's payments of fixed minimum annual rent for
Premises "A" and "B" for Lease years 4 through 20 annual rent shall be adjusted
in accordance with the following provisions. Landlord shall compute the
increase, if any, of the cost of living for each Lease Year based on the
Consumer Price Index - Urban Wage Earners and Clerical Workers (Revised Series),
(CPI-W) Miami, Florida Region, all items (Nov.1977 = 100) (the "index"),
published by the Bureau of Labor Statistics of the United States Department of
Labor. The index number published for the month of November preceding each
Lease Year shall be the "Current Index Number" and the corresponding index
number for October, 1977 shall be the "Base Index Number". The fixed minimum
annual rent for each Lease Year 4 through 20 shall be determined by multiplying
the fixed minimum annual rent set forth in section 3.01 and 3.02 by a fraction,
the numerator of which shall be the Current Index Number and the denominator of
which shall be the Base Index Number, The new monthly payments of fixed minimum
annual rent, adjusted as aforesaid, shall be due and payable beginning with the
first month of the next following Lease Year. In no event shall the fixed
minimum annual rent be less than the amounts set forth in section 3.01 and 3.02.
If the United States Department of Labor should no longer publish such price
indexes, the index compiled and published
<PAGE>
by any other branch of the Federal government shall be used for the purpose of
this paragraph, and if no such index is compiled and published by any branch or
department of the Federal government, the statistics reflecting cost of living
increases as compiled by any institution or organization or individual
generally recognized as an authority by financial and insurance institutions
shall be used as a basis for such adjustment.
3.04. Extended Term Rent. The annual rent for the Extended Term shall
-------------------
be calculated at the annual rate established as if the Initial Term was for a
period of Thirty (30) years.
3.05. Additional Rent. In addition to annual rent, Tenant shall pay
----------------
additional rent which shall mean all sums of money payable by tenant under this
Lease other than annual rent. For the first year the additional rent for
Premises "A" and "B" shall be Ten Thousand Seven Hundred Sixty Four Dollars
($10,764.00), payable in installments of Eight Hundred Ninety Seven Dollars
($897.00), monthly. This additional rent is for real estate taxes and
insurances and is divided as aforesaid in article 3.07.
3.06. Taxes and Insurance. Tenant shall pay as additional rent the
--------------------
amount by which the sum of the Tenant's share of the annual premiums for
multi-peril hazard insurance maintained by the Landlord on the Land and the
Building and real estate taxes described below for each Lease Year (the "Base
Insurance and Real Estate Tax").
3.07. Tenant's Share. The words "Tenant's Share" shall mean 31.5% as to
---------------
Premises "A" and "B", of the total increase in the insurance premiums and real
estate taxes. Tenant's Share shall be adjusted to reflect any change in the
rentable square feet in the Leased Premises or any change in the apportionment
of office space and retail space in the Building or any change in the rentable
square feet in the Building.
3.08. Real Estate Taxes.
------------------
(a). Landlord shall pay when due all ad valorem real estate taxes,
assessments and other governmental charges which shall be levied or assessed or
which become liens upon the Land and Building ("Real Estate Taxes"). If allowed
by law, Landlord shall pay Real Estate Taxes in instalments.
(b). If and only in the event that the real estate taxes for any tax year
shall be more than the Base Real Estate Tax, Tenant shall pay as additional rent
for such tax year an amount equal to 31.5% Premises "A" and "B".
Tenant's Share of the amount by which the real estate taxes for such year are
greater than the Base Real Estate Tax.
<PAGE>
(c) If at any time during the term of this Lease, the present method of
taxation or assessment shall be so changed that the whole or any part of the
taxes, assessments, levies, impositions or charges now levied, assessed or
imposed on real estate and the improvements thereof shall be discontinued and
as a substitute therefor, or in lieu of an addition thereto, taxes,
assessments, levies, impositions or charges shall be levied, assessed and/or
imposed wholly or partially as a capital levy or otherwise on the rents
received from the Building or the rents reserved herein or any part thereof,
then such substitute or additional taxes, assessments, levies, impositions or
charges, to the extent so levied, assessed or imposed, shall be deemed to be
included within the Real Estate Taxes to the extent that such substitute or
additional tax would be payable if the Building were the only property of
Landlord subject to such tax. It is agreed that Tenant will be responsible for
ad valorem taxes on its personal property and the landlord's personal property
located within the Leased Premises.
(d) The increase in real estate taxes that Tenant is obligated to pay
shall be the amount of real estate taxes finally determined to be legally
payable by legal proceedings or otherwise and paid by Landlord. Any increase or
decrease in real estate taxes during the Term shall be apportioned so that
Tenant shall pay or receive Tenant's Share of only that portion of the increase
or decrease in the real estate taxes that falls within the Term
(e) Tenant's Share of any incentives or abatements of the real estate
taxes which are received by or credited to Landlord shall be passed through to
Tenant.
3.08.1 Tax Contest.
------------
(a) Landlord shall have the sole, absolute and unrestricted right, but not
the obligation to contest the validity or amount of any real estate taxes or
assessments by appropriate proceedings, and if Landlord shall institute any such
contest, it shall have the sole, absolute and unrestricted right to settle any
such contest, proceeding or action upon whatever terms Landlord may, in its sole
discretion, determine.
(b) If Landlord shall receive a reduction or refund for any tax year for
which Tenant shall be obligated to pay or shall have paid Tenant's Share of
increase in real estate taxes, the amount of such reduction or refund shall be
subtracted from the real estate taxes payable or paid by Landlord for the tax
year to which the reduction or refund applies and proper reimbursement shall be
made by Landlord to Tenant promptly after Landlord receives or is credited with
such refund or reduction. Landlord agrees to keep Tenant apprised of all tax
protest filings and proceedings undertaken by Landlord or others to obtain a tax
reduction or refund. Landlord may deduct from the total refund any reasonable
attorneys' fees and other reasonable expenses incurred by Landlord therefor.
3.09. Insurance.
----------
(a) If the insurance premiums paid by the Landlord for any Lease Year
shall
<PAGE>
be more than the Base Insurance Premium, Tenant shall pay as additional rent
for such year an amount equal to Tenant's Share of the amount by which the
insurance premiums for such year are greater than the Base Insurance Premium.
(b) If the Landlord shall receive a refund for any year in which an
insurance payment shall have been made by Tenant, Landlord shall repay to
Tenant, Tenant's proportionate share of such refund after deducting therefrom
the costs and expenses of obtaining such refund, if any.
3.10. Billing.
--------
(a) Beginning with the second Lease Year and continuing thereafter for each
Lease Year during the Term, Landlord shall present to Tenant, prior to the
beginning of each Lease Year a statement of Tenant's Forecast Additional Rent.
Tenant agrees to pay Tenant's Forecast Additional Rent in twelve (12) equal
installments on the first day of each month during the Term. The words "Tenant's
Forecast Additional Rent" shall mean Landlord's reasonable estimate of Tenant's
additional rent for the upcoming Lease Year. Within one hundred fifty (150) days
after the end of the second Lease Year and of each Lease Year thereafter during
the Term, or as soon as possible thereafter, Landlord shall provide Tenant with
a statement prepared by Landlord comparing Tenant's Forecast Additional Rent
with Tenant's additional rent for each Lease Year ("Landlord's Statement"). If
Tenant's Forecast Additional Rent exceeds Tenant's additional rent for the
Lease Year, Landlord shall pay Tenant in the form of a credit against rentals
next due an amount equal to any excess. If the Tenant's additional rent exceeds
Tenant's Forecast Additional Rent for the year, Tenant shall pay Landlord,
within thirty (30) days of receipt of the Landlord's Statement, an amount equal
to the difference.
(b) The words "Landlord's Statement" shall mean a statement setting forth
the annual insurance premiums and real estate taxes for a Lease Year together
with a calculation prepared by Landlord of Tenant's Share of annual increase in
insurance premiums and real estate taxes and the additional rent payable for
such Lease Year pursuant to section 3.05.
(c) Landlord shall, at Tenant's request, make available to Tenant for
inspection and examination the books and records that relate to Landlord's
Statement.
(d) This section shall survive the expiration or earlier termination of
the term of this Lease.
3.11. Interest on Rent. All rent and other sums of whatever nature
-----------------
owed by Tenant to Landlord under this Lease shall bear interest from the date
due until paid at the lesser of (i) five percent (5%) above the "prime rate", or
if the "prime rate" be discontinued, the rate announced as that being charged to
the most credit-worthy commercial borrowers, announced by the Wall Street
Journal, or its successor, from time to time, or (ii) the maximum lawful
contract rate per annum.
<PAGE>
3.12. Utilities. Tenant shall be solely responsible for, and promptly
----------
pay, all charges for water, gas, electricity, waste disposal or any other
utilities or services used or consumed with respect to each Premises. Landlord
shall have no liability for any interruption to, or failure of, any service to
each Premises.
4. Security Deposit.
-----------------
$10,533.99 (Ten Thousand Five Hundred Thirty Three Dollars and Ninety-nine
Cents).
4.01. Security and Qualification: Tenant has delivered to Landlord the
---------------------------
sum of Ten Thousand Five Hundred Thirty-three Dollars and Ninety-nine Cents
($10,533.99) as security for the full and faithful performance by Tenant of the
terms hereof, to be returned to the Tenant, without interest, after Tenant has
vacated the Premises and upon the full performance of the provisions of the
Lease. Tenant shall not use the security as rent. Tenant shall be of good
repute and in the reasonable judgement of Landlord of good financial standing
and shall provide references and proper financial records for Landlord's
review and approval.
5. Use of Leased Premises
----------------------
5-01. General Uses. Tenant shall have the right to use Premises "A"
-------------
and "B" only for a full service sit-down restaurant and all uses incidental and
related thereto.
5.02. Operation of Business. Tenant shall conduct business in each
----------------------
Premises during the regular customary days and hours for such type of business
in Dade County, Florida. Tenant shall not perform any acts or carry on any
practices which may damage the Building or be a nuisance or menace to other
tenants in the Building or their customers, employees or invitees or which will
result in the increase of casualty insurance premiums.
6. Condition of Leased Premises.
----------------------------
6.01. Acceptance of Leased Premises. Tenant acknowledges having fully
------------------------------
inspected each Premises and is accepting both in their "AS IS" condition. Unless
otherwise specifically agreed to in writing by the parties, Landlord shall make
no repairs or improvements to either Premises. Landlord warrants the good
working order of the Landlord's Equipment for a period from the Commencement
Date until February 1, 1997,
6.02. Tenant's Improvements to Building. Tenant, subject to Landlord's
----------------------------------
consent, which will not be unreasonably withheld, will rebuild the interior and
repaint the exterior of the Building and repair the balconies and awnings.
7. Signs.
------
<PAGE>
7.01. Installation by Tenant. Tenant shall not install or cause to be
----------------------
installed any exterior signs, exterior lighting, shades or awnings or make any
changes to the front of the Building without first obtaining Landlord's written
approval and consent, which consent shall not be unreasonably withheld. Tenant
shall present to Landlord plans and specifications for such work at the time
approval is sought.
8. Repairs and Maintenance
-----------------------
8.01. Landlord's Repairs. Landlord shall perform all maintenance and
------------------
make all repairs, restoration, and replacements to the Building and Building
Service Systems not specifically imposed upon Tenant by the provisions of this
Lease. Without limiting the generality of the foregoing sentence or the
following, yet subject to Tenant's repair obligations, Landlord shall maintain,
repair and replace, as necessary, and keep in good order (1) the plumbing,
electrical and mechanical lines located outside the Building during the initial
five (5) years of this Lease, and thereafter, Premises "A" and "B"; and (2)
utility and trunk lines, tanks and transformers and (3) the exterior structure
of the Building, including the roof, exterior walls, bearing walls, support
beams, floor slabs, foundation, support columns and window frames (the
"Structure").
8.02. Tenant's Repairs. At its expense, Tenant shall maintain, repair
----------------
and replace as necessary, the Building, except for the structure, during the
initial five (5) years of this Lease and thereafter Premises "A" and "B" in
good order, condition and repair, including interior surfaces of ceilings,
walls and floors, all doors, windows, plate glass and all furnishing, fixtures
and Landlord's Equipment located within the Building, and the Leased Premises
Service Systems. Any damage or injury to the Common Building Facilities,
Structure, or Building Service Systems (as opposed to those involving only
Tenant's improvements) and any damage or injury to Tenant's Improvements which
materially and adversely affects the Structure or Building Service Systems, if
caused by Tenant, its agents, contractors, employees, invitees or visitors,
shall be repaired, restored or replaced by Landlord, but at Tenant's expense.
In that regard, Tenant shall reimburse Landlord for Landlord's reasonable costs
and expenses incurred in making such repair, restoration or replacement within
thirty (30) days after Tenant receives Landlord's invoice therefor. Without
limitation, Tenant shall not be liable for repairs or replacements necessitated
by ordinary wear and tear, damage by fire or other casualty and damage caused
by Landlord or by others for whom Tenant is not responsible.
8.02.1. Building Service System. The words "Building Service Systems"
-----------------------
shall mean the electrical, HVAC, mechanical, plumbing, safety and health and
telecommunication (voice/data/signal) systems that service the Building up to
the point of entering the Building; "Leased Premises Service System" shall mean
the Building Service Systems within the Building during the initial five (5)
years of the Lease and thereafter Premises "A" and "B" or those systems serving
exclusively Premises "A" and "B" after the initial five (5) years of this
Lease.
8.04. Landlord's Failure to Make Repairs.
----------------------------------
If after written notice by Tenant, Landlord fails or refuses to make any
repairs, restoration,
<PAGE>
or replacements that it is required to make under section 8.01 or elsewhere in
this Lease within a reasonable time specified by Tenant in its notice, Tenant
may make such repairs, restoration or replacements. Landlord shall reimburse
Tenant within thirty (30) days after Landlord receives Tenant's invoice.
8.05. Emergency Repairs. If by reason of an emergency, repairs,
------------------
restoration, or replacements become necessary and by the provisions hereof are
the responsibility of Landlord, Tenant may make such repairs, restoration or
replacements which, in the opinion of Tenant, reasonably exercised, are
necessary for the preservation of either Premises, or of the safety or health of
the occupants in the Building, or of Tenant's Property, or are required by the
law; provided, however, that Tenant shall first make a reasonable effort to
inform Landlord before making them.
9. Alterations and Improvements.
9.01. Tenant's Changes - No Approval.
------------------------------
(a) Tenant may place and replace its trade or other movable fixtures,
tools, machinery, furniture, equipment and other tangible personal property
("Tenant's Property") in either Premises and may make alterations,
improvements, replacements and other changes to the Leased Premises Service
Systems and to the interior of each Premises as it may desire at its own expense
without Landlord's consent provided such placements, replacements, alterations,
improvements and/or changes do not alter the Structure, the external appearance
of any portion of the Building or the Building Service Systems and further
provided that Tenant delivers as-built drawings to Landlord upon completion of
work. Tenant shall not alter, improve, replace or change the Building Service
Systems or the Structure except in accordance with section 9.02
9.02. Tenant's Changes - Landlord's Approval.
--------------------------------------
(a) At its sole cost and expense, Tenant may make alterations,
improvements, replacements and other changes to the Building Service Systems
and to the Structure, provided that Landlord consents thereto in writing, which
consent shall not be unreasonably withheld or delayed if regarding the Building
Service Systems, and which consent may be withheld by Landlord in-its sole
discretion if regarding the Structure.
(b) If Tenant desires to make alterations, improvements, replacements or
other changes to the Structure or Building Service Systems, Tenant shall make a
written request for Landlord's approval by submitting to Landlord a list of
proposed contractors and plans and specifications for the work to be performed
and a written statement as to whether Tenant desires to remove such alteration,
improvement, replacement or other change at the expiration of the Term of this
Lease. Tenant shall be deemed to have elected to leave in place at the
expiration of the Term of this Lease, any alteration, improvement, replacement
or other change, unless, its request for approval of such alteration,
improvement, replacement or other change, Tenant specifically requests the
right to remove same. Landlord shall respond in writing ten (10) business days
from receipt of such request,
<PAGE>
approving those contractors and those portions of the work that are acceptable
and disapproving those contractors and portions of the work that are, in
Landlord's judgment reasonably exercised, unacceptable and specifying in detail
the nature of Landlord's objection. Landlord shall also advise Tenant in
writing within such time period of any such alterations, improvements,
replace-meets or other changes to the Structure or Building Service Systems
which Landlord shall require Tenant to remove at the expiration of the Term of
this Lease. With respect to Tenant's requests relating to Structure and
Building Service Systems, Landlord shall be deemed to have elected to require
that Tenant leave in place at the expiration of the Term of this Lease, a
particular alteration, improvement, replacement or other change, if, in
response to Tenant's request for approval of the alteration, improvement,
replacement or other change, Landlord does not specifically grant Tenant the
right or require Tenant to remove same at the expiration of the Term of this
Lease.
9.03. Removal of Property on Expiration of the Term.
---------------------------------------------
Upon the expiration or earlier termination of this Lease, the following
provisions shall apply with respect to removal of property from the subject
Premises by Tenant:
(a) All alterations, decorations, additions and improvements made by the
Tenant, or made by the Landlord on the Tenant's behalf by agreement under this
Lease, shall remain the property of the Tenant for the Term. Any alterations,
decorations, additions and improvements shall not be removed from the premises
without prior consent in writing from the Landlord.
(b) Upon expiration of the Term, the Landlord shall have the option of
requiring the Tenant to remove all Tenant's Property and alterations,
decorations, additions and improvements, and to repair and restore the subject
Premises. If the Tenant fails to remove such property, alterations, decorations
and improvements and restore the subject Premises, the property, decorations,
additions and improvements shall become the property of the Landlord and in such
event should Landlord so elect, Landlord may repair and restore the subject
Premises to its original condition for the cost of which, with allowance for
ordinary wear and tear, Tenant shall be responsible for and shall pay promptly
upon demand. Notwithstanding the foregoing, Tenant shall have the option of
removing the Tenant's Property and any improvement or alteration installed by
Tenant or on Tenant's behalf provided Tenant repairs and restores at Tenant's
expense the subject Premises to its prior condition.
10. Insurance.
----------
10.01. Casualty Insurance
------------------
(a) Tenant shall maintain at its expense standard fire and extended
coverage insurance on all of Tenant's Property, including removable trade
fixtures, located in either Premises, all Tenant's, improvements and the
Landlord's Equipment. The policy shall name the Landlord as an insured and a
copy of the policy, or certificated of insurance shall be delivered to the
Landlord.
<PAGE>
(b) Landlord and Tenant each hereby waives its respective right of
recovery against the other and each releases the other from any claim arising
out of loss, damage or destruction to the Building, and contents thereon or
therein, by reason of fire, the elements, or any other cause which could be
insured against, whether or not such loss, damage or destruction may be
attributable to the fault or negligence of either party or its respective
agents, contractors or employees. Any casualty insurance policy shall include a
waiver of the insurer's rights of subrogation against the party who is not an
insured under such policy. Each party shall look solely to the proceeds of its
respective casualty insurance policy to compensate it for any such loss, damage
or destruction.
10.02. Liability Insurance
-------------------
(a) Tenant shall maintain at its expense a policy of comprehensive general
liability insurance with the premiums thereon fully paid on or before the due
dates, issued by and binding upon an insurance company approved by the Landlord,
such insurance to afford minimum protection of not less than $1,000,00 for
personal injury or death in any one occurrence and not less than $500,000 for
personal injury or death to any one person and of not less than $250,000 for
property damage in any one occurrence. The policy shall name the Landlord as an
insured and a copy of the policy of certificate of insurance shall be delivered
to the Landlord.
11. Fire and Other Casualty
-----------------------
11.01. Damage or Destruction.
---------------------
(a) Except as provided to the contrary in paragraph (b), if any portion of
the Building is damaged by fire, earthquake, flood or other casualty, of by any
other cause of any kind or nature (the "Damaged Property"), Landlord shall
proceed immediately to make the repairs as required by paragraph (c). This
Lease shall not terminate, but Tenant shall be entitled to a pro rata abatement
of annual rent and additional rent payable during the period commencing on the
date of the damage and ending on the date the Damaged Property is repaired and
the subject Premises are delivered to Tenant. The extent of rent abatement
shall be based upon the portion of the subject Premises rendered unrentable,
unfit or inaccessible for use by Tenant for the purposes stated in this Lease
during such period.
(b) Within thirty (30) days after any damage to the Damaged Property,
Landlord shall deliver to Tenant a report from Landlord's architect (the
"Damage Report") containing a written estimate of the date (the "Estimated
Date") Landlord's architect reasonably expects the Building and subject
Premises, which shall include the Building Service Systems serving the same, to
be restored to its condition immediately prior to such damage, a written
estimate of the amount which will be required to be expended in order to repair
the, Building to its condition immediately prior to such damage or destruction,
and a written estimate of the replacement cost of the Building above
foundation. The Damage Report shall be made in good faith after a thorough
investigation of the facts required to make an informed judgment. The architect
shall consider and include as a part of the Damage Report the period of time
necessary to obtain required approvals of the mortgagee and insurer, to order
an
<PAGE>
obtain materials, and to engage contractors. If any fire or other casualty
shall cause damage to the Building which, according to the, Damage Report
requires the expenditure of an amount in excess of fifty percent (50%) of the
replacement cost of the Building above foundation if such damage or destruction
is insured, or ten percent (10%) of the replacement cost if such damage or
destruction is not insured, or five percent (5%) of the replacement cost,
whether or not such damage or destruction is insured or insurable, at a time
when less than eighteen (18) full calendar months remain of the Term, or if
the, Estimated Date for the completion of the repair of the Building or either
Premises is a date later than twelve (12) months after the date the Damage
Report is delivered to Tenant; then in any such events, Landlord may elect to
terminate this Lease by giving written notice to Tenant within thirty (30) days
after the date the Damage Report is delivered to Tenant. If the Estimated Date
for the completion of the repair of the Premises only, including the Building
Service Systems servicing the same, is later than nine (9) months from and
after the date the Damage Report is delivered to Tenant, or if any fire or
other casualty shall cause in excess of fifty percent (50%) of the rentable
area of either Premises to be rendered unrentable, unfit or inaccessible at a
time when less than twelve (12) full calendar months remain in the Term, then
Tenant may terminate this lease as to that Premises by delivering written
notice to Landlord within one hundred and thirty (130) days from and after the
date the Damage Report is delivered to Tenant. If this Lease is not terminated
as aforesaid, then this Lease shall continue in full force and effect, Landlord
shall repair the Damaged Property in accordance with the terms hereof, and
Landlord shall keep Tenant advised of the progress and the estimated actual
completion date of all repairs. Landlord shall deliver to Tenant at least
monthly a written revised estimate of when Landlord reasonably expects to
complete such repairs, and during the period commencing on the date of the
damage and ending on the date the Damaged Property is repaired in accordance
with paragraph (c), Tenant shall be entitled to a pro rata abatement of Annual
Rent and Additional Rent as provided in section 10.01 (a).
(c) If neither party exercises its option to terminate this Lease,
Landlord shall, with due diligence, repair the Damaged Property as a complete
architectural unit of substantially the same usefulness, design and construction
existing immediately prior to the damage provided, that, with respect to
Tenant's Improvements, Tenant has elected to contribute the proceeds of its
insurance for Tenant's Improvements toward the repair of Tenant's Improvements:
If Tenant elects to make such contribution, Landlord shall repair the Tenant's
Improvements to substantially the same usefulness, design and construction in
which they existed immediately prior to the damage. If Tenant elects not to make
such contribution to the repair of Tenant's Improvements, Landlord shall not
replace or repair Tenant's improvements. Tenant shall be entitled to a pro rata
abatement of annual rent and additional rent in the manner and to the extent
provided in paragraph (a) or paragraph (b).
(d) If either party elects to terminate this Lease and the Term shall
end on the date specified in the notice, annual rent and additional rent shall
be apportioned as of the date of the damage and all prepaid annual rent and
additional rent shall be repaid.
(e) The word "repair" shall include rebuilding, replacing, and restoring
the Damaged Property. In the event of a fire or other casualty to either
Premises, Tenant shall immediately give notice thereof to Landlord.
<PAGE>
12. Eminent Domain
--------------
12.01. Taking - Lease Ends. If at anytime during the Term the whole
--------------------
of the Building shall be taken for any public or quasi-public use, under any
statute or by right of eminent domain, this Lease shall terminate on the date
of such taking except as provided in section 12.03. If less than all of the
Building shall be taken and in Tenant's reasonable opinion the remaining part
is insufficient for the conduct of Tenant's business Tenant may, by notice to
Landlord within sixty (60) days after the date Tenant is notified of such
taking, terminate this Lease. If Tenant exercises its option, this Lease and
the Term shall, end on the date specified in Tenant's notice and the annual
rent and additional rent shall be apportioned and paid to the date specified in
Tenant's notice. If less than all of the building shall be taken and in
Landlord's reasonable opinion it is uneconomic to continue to operate the
remainder of the Building, Landlord may, by notice to Tenant within sixty (60)
days after Landlord notifies Tenant of such taking, terminate this Lease. If
Landlord exercises its option, this Lease and the Term shall end on the date
specified in Landlords notice and the annual rent shall be apportioned and paid
to the date specified in Landlord's notice.
12.02. Taking - Lease Continues. If less than all of the Building
-------------------------
shall be taken and, in Tenant's reasonable opinion, Tenant is able to gain
access to continue the conduct of its business in the part not taken, by notice
to Landlord within sixty (60) days after Tenant is notified of such taking, this
Lease shall remain unaffected, except that Tenant shall be entitled to a pro
rata. abatement of annual rent and additional rent based upon the nature of the
space taken (restaurant space, storage) and upon the proportion which the area
of the subject Premises taken bears to the area of the subject Premises
immediately prior to such taking.
12.03. Temporary Taking. If the use and occupancy of the whole of
-----------------
the Building is temporarily taken for a public or quasi-public use for a period
of less than the balance of the Term but for a period greater than twelve (12)
months, at Tenant's option to be exercised in writing and delivered to Landlord
not later than ________________________________________________________________
to be exercised in writing and delivered to Landlord not later than sixty (60)
days after the date Tenant is notified of such taking, this Lease and the Term
shall terminate on the date specified in Tenant's notice. If the use and
occupancy of less than all of the Building is temporarily taken for a public or
quasi-public use for a period less the balance of the term but for a period
greater than fifteen (15) months, and in Tenant's reasonable opinion, the
remaining part is insufficient for the conduct of Tenant's business, Tenant may,
by notice to Landlord within sixty (60) days after the date Tenant is notified
of such taking, terminate this Lease. If Tenant exercises its option to so
terminate, this Lease and the Term shall end on the date specified in Tenant's
notice and the annual rent shall be apportioned and paid to the date specified
in Tenant's notice. If this Lease remains in effect Tenant shall be entitled to
a pro rata. abatement of annual rent and additional rent in the manner and to
the extent provided in section 12.12, in which case Tenant shall continue to pay
the annual rent and additional rent in full when due.
12.04. Landlord's Award. Landlord shall be entitled to receive the
-----------------
entire award or awards in any condemnation proceeding without deduction
therefrom for any estate vested in Tenant
<PAGE>
and Tenant shall receive no part of such award or awards from Landlord or in
the proceedings. Subject to the foregoing, Tenant hereby assigns to Landlord
any and all of Tenant's right, title and interest in or to such award or awards
or any part thereof.
12.05. Restoration by Landlord. If there is a taking hereunder and
------------------------
this Lease is continued Landlord shall after receipt of condemnation proceeds
applicable thereto, at its expense, proceed with reasonable diligence to repair,
replace and restore the Building as a complete architectural unit of
substantially the same proportionate usefulness, design and construction
existing immediately prior to the date of taking.
12.06. Definitions. Taking by condemnation or eminent domain shall
------------
include the exercise of any similar governmental power and any sale, transfer or
other disposition of the Building or Land in lieu or under threat of
condemnation. The word "Building" as used in this article only, shall mean both
Premises, Common Building Facilities and Building parking area and access ways
thereto.
13. Indemnification
---------------
Subject to the provisions of section 10.0.1 (b), Landlord and Tenant each
agree to indemnify and save the other harmless from any and all claims for
bodily injury including death or property damage made against one party if (1)
arising from any breach or default by the other party including its agents,
invitees, employees or contractors, in the performance of any covenant or
agreement on its part to be performed pursuant to the provisions of this Lease,
or (2) occurring within the Land and Building limits and arising from the
misconduct or gross negligence of the other party, including its agents,
invitees, employees or contractors. This indemnity shall include all court
costs, attorneys' fees, expenses and liabilities incurred by the indemnified
party against which the claim is made. If any action or proceeding is brought
against either Landlord or Tenant by reason of any such claim, the indemnifying
party agrees to defend the action or proceeding at its expense upon notice from
the party to be indemnified.
14. Landlord's Access
-----------------
Landlord shall upon advance oral notice to Tenant except in an emergency,
have the right (1) at all reasonable times during Tenant's business hours to
inspect either Premises and to show the same to prospective mortgagees and
purchasers; (2) during the last six (6) months of the term for Premises "A" and
"B" and Term, to show the same to prospective tenants and (3) at all times to
make repairs or replacements as required by this Lease or as may be necessary;
provided, however, that Landlord shall use all reasonable efforts not to
disturb Tenant's use and occupancy of either Premises.
15. Compliance with Laws
--------------------
<PAGE>
15.01. Tenant's Compliance with Laws. Tenant shall comply with, all
statutes, rules, ordinances, orders, codes and regulations, and legal
requirements and standards issued thereunder (the "Laws") which are applicable
to Tenant's use and manner of use of both Premises. Nothing herein shall be
deemed to impose any obligation upon Tenant for any elements of the Structure
or Building Service Systems, or for a restoration, alterations, replacements or
repairs required to be made by Landlord pursuant to the provisions of this
Lease.
16. Subordination: Attornment.
--------------------------
16.01. This Lease shall be subordinate and subject to all ground and
underlying leases and to any mortgages thereon and to any mortgages now or
hereafter covering the fee of the Land, and to all renewals, modifications or
replacements thereof. This clause shall be self-operative and no further
instrument of subordination or recognition shall be required.
16.02. If the ground or underlying lessor or mortgagee or any successor in
interest shall succeed to the rights of Landlord under this Lease, whether
through possession, surrender, assignment, subletting, judicial or foreclosure
action, or delivery of a deed or otherwise, Tenant will attorn to and recognize
such successor landlord as Tenant's landlord. This clause shall be self
operative and no further instrument of attornment or recognition shall be
required.
17. Mechanics' Liens. During the term of this Lease, Tenant shall
-----------------
discharge by payment, bond or otherwise those mechanics liens filed against the
Land and Building for work, labor, services or materials claimed to have been
performed at or furnished to either Premises for or on behalf of Tenant, except
when the mechanics' liens are filed by a contractor, subcontractor, materialman
or laborer of Landlord, in which event Landlord shall discharge the liens by
payment, bond or otherwise.
18. Default
-------
18.01. The following events shall constitute events of default by Tenant
under this Lease:
(a) If Tenant shall default in the payment of annual rent or additional
rent for either Premises and such default shall continue for five (5) business
days after notice thereof from Landlord,: (b) Tenant shall default in the
performance or observance of any of its other covenants or obligations set
forth in this Lease, and if such default shall continue for thirty (30) days
after notice thereof from Landlord specifying in what manner Tenant has
defaulted, except that if such default cannot within such thirty (30) day
period, this period shall be extended, for a reasonable additional time,
provided that Tenant commences to cure such default within the thirty (30) day
period and proceeds diligently thereafter to effect such cure, (c) the interest
of Tenant under this Lease shall be levied on under execution or other legal
process, (d) any petition shall be filed by or against Tenant to declare Tenant
a bankrupt or to delay, reduce or modify Tenant's debt or obligations, or if
any petition shall be filed by, or other action taken by, Tenant to reorganize
or
<PAGE>
modify Tenant's debts or obligations, or if any petition shall be filed
against, or other action taken against, Tenant to reorganize or modify Tenant's
debts or obligations and not set aside by Tenant within seventy five (75) days
of such filing or other action, (e) Tenant shall be declared insolvent
according to law, (f) if any assignment of Tenant's property shall be made for
the benefit of creditors, or if a receiver or trustee is appointed for Tenant
or its property, (g) if Tenant shall vacate or abandon either Premises or any
substantial portion thereof during the Term, or (h) if Tenant shall cease to
exist as a corporation in good standing in the state of its incorporation.
18.02. Upon the occurrence of an event of default, Landlord at its
option may:
(1) cure such default and any costs and expenses incurred by Landlord
therefor shall be deemed additional rent payable within thirty (30) days after
Landlord's invoice therefor, or
(2) Landlord may terminate this Lease and forthwith repossess either
Premises and be entitled to recover forthwith as damages a sum of money equal to
the total of (i) the cost of recovering either Premises including attorneys'
fees and costs of suit, (ii) the unpaid rent earned at the time of termination,
plus interest thereon at the maximum lawful contract rate per annum, (iii) the
present value discounted at the rate of eight percent (8%) per annum of the
balance of the rent for the remainder of the Term less the present value
discounted it the same rate of the fair market rental value of both Premises for
said period and (iv) any other sum of money and damages owed by Tenant to
Landlord, or
(3) Landlord may terminate Tenant's right of possession, but not this
Lease, and may repossess either Premises, and if default shall occur for any
reason other than (a) and (b) above, by forcible entry or otherwise, without
demand or notice of any kind to Tenant, and without being deemed guilty of any
manner of trespass, without prejudice to any other remedies which Landlord may
have for arrears of annual rent or additional rent or preceding breach of
covenant and without thereby releasing Tenant from any liability hereunder, in
which event Landlord may, relet the same for the account of Tenant for such
rent and upon such terms as shall be satisfactory to Landlord. For the purpose
of such reletting Landlord is authorized to decorate or to make any repairs,
changes, alterations or additions in or to either Premises as may be reasonably
necessary or desirable, and (i) if Landlord shall fail to relet either
Premises, or (ii) if the same are relet and a sufficient sum shall not be
realized from such reletting, after first deducting therefrom, for retention by
Landlord, the unpaid rent due hereunder earned but unpaid at the time of
reletting plus interest thereon at the maximum lawful contract rate per annum,
the cost of recovering possession including attorneys' fees and costs of suit,
all of the costs and expenses of such decorations, repairs, charges,
alterations and additions, the expense of such reletting and the cost of
collection of the rent accruing therefrom to satisfy the rent provided for in
this Lease to be paid, then (a) Tenant shall pay to Landlord as damages a sum
equal to the amount of the rental reserved in this Lease for such period or
periods, plus the cost of recovering possession of either Premises, including.
attorneys fees and costs of suit, the unpaid rent earned at the time of
repossession plus interest thereon at the maximum lawful contract rate per
annum, and the costs incurred in any attempt by Landlord to relet either
Premises, or (b) if either Premises has been relet, Tenant shall satisfy and
pay any such deficiency. Any such
<PAGE>
payments due Landlord shall be made upon demand therefor from time to time and
Tenant agrees that Landlord may file suit to recover any sums falling due under
the terms of this section from time to time. No delivery to or recovery by
Landlord of any portion due Landlord hereunder shall be any defense in any
action to recover any amount not theretofore reduced to judgment in favor of
Landlord, nor shall such reletting be construed as an election on the part of
Landlord to terminate this Lease unless a written notice of such intention be
given to Tenant by Landlord, Notwithstanding any such reletting without
termination, Landlord may at any time thereafter elect to terminate this Lease
for any previous breach.
19. Surrender of Possession/Holdover.
---------------------------------
19.01. Upon the termination of this Lease, whether by forfeiture, lapse of
time or otherwise, or upon the termination of Tenant's rights to possession of
either Premises, Tenant, subject to paragraph 9.03, will at once peacefully
surrender and deliver both Premises to Landlord, together with. all
improvements thereon, in good condition and repair, reasonable wear and tear
excepted. All additions, hardware, non-trade fixtures and all improvements,
temporary or permanent, in or upon both Premises', excluding any item which has
not become attached to the Building, placed there by Tenant shall become
Landlord's property and shall remain upon either Premises upon termination of
this Lease by lapse of time or otherwise, without compensation or allowance or
credit to Tenant. If Landlord requests removal of any additions, hardware, non-
trade fixtures and improvements, and Tenant does not take such removal at
termination of this Lease, or within ten (10) days after such request,
whichever is later, Landlord may remove and deliver the same to any other place
of business of Tenant or warehouse the same, and Tenant shall pay the cost of
such removal, delivery and warehousing to Landlord on demand.
19.02. If Tenant remains in either Premises beyond the expiration or
earlier termination of the Term without the written consent of Landlord,
Tenant shall pay as liquidated damages one hundred and twenty-five percent
(125%) of the rent provided herein (125%) of the annual rent and additional
rent then payable), in equal monthly installments, for the entire holdover
period in lieu of any other obligation of Tenant to pay any rent, including
additional rent for such period. Such holding over in itself shall not
constitute a renewal or extension of this Lease. In the event of an
unauthorized holding over, Tenant shall also indemnify Landlord against all
claims for damages by any person to whom Landlord may have leased all or any
part of the subject Premises effective upon the expiration or earlier
termination of this Lease. Any holding over with the written consent of
Landlord shall thereafter constitute a tenancy from month to month and rent
shall be payable at one-twelfth (1/12) of the then annual rent and additional
rent.
20. Security. Landlord shall have no responsibility to provide
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security to the Building and shall not be liable to Tenant for loss to Tenant
arising out of losses due to theft, burglary or damage or injury to persons or
property caused by unauthorized persons gaining access to either Premises.
Tenant hereby releases Landlord from all liability relating thereto.
21. Assignment and Subletting
-------------------------
<PAGE>
(a) Tenant shall assign this Lease or sublet all or any part of either
Premises at any time during the Term with Landlord's written consent, which
consent will not be unreasonably withheld. Any consent by Landlord to a
particular assignment or sublease shall not constitute Landlord's consent to
any other or subsequent assignment or sublease, and any proposed sublease or
assignment by a sublessee or assignee of Tenant shall be subject to the
provisions of this section as if it were a proposed sublease or assignment by
Tenant.
22. General Provisions
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22.01. Notices. Unless otherwise specified, all notices, requests,
demands or other communications to or from the parties shall be deemed to have
been duly given and made (a) in the case of a letter sent other than by mail,
when the letter is delivered to the party to whom it is addressed, (b) in the
case of a telegram or telecopied document, when the telegram or telecopy is
transmitted, (c) in the case of a letter sent by mail, when the letter is
deposited in a United States post office, certified mail, return receipt
requested, and addressed as follows:
Any of the above may change, from time to time, the address to which notices to
them are sent by giving written notice of the change to the parties to this
agreement. Rejection or other refusal to accept a notice, request or demand, or
the inability to deliver the same because of a changed address of which no
notice was given, shall be deemed to be receipt of the notice, request or demand
sent.
22.02. Quiet Enjoyment. Provided Tenant performs the covenants and
obligations in this Lease on Tenant's part to be performed, Landlord covenants
and agrees to take all necessary steps to secure and to maintain for the benefit
of Tenant the quiet and peaceful possession of the Leased Premises, for the
Term, without hindrance, claim or molestation by Landlord or any other person.
22.03. Non-Waiver. Failure by either party to complain of action,
-----------
inaction or default of the other party shall not constitute a waiver of the
aggrieved party's rights hereunder. Waiver by either party of any right for any
default of the other party shall not constitute a waiver of any right for either
a subsequent default of the same obligation or for any other default, past,
present or future.
22.04. Partial Invalidity. If any covenant, condition or provision of
------------------
this Lease, or the application thereof to any person or circumstance, shall be
held to be invalid or unenforceable, then in each such even the remainder of
this Lease or the application of such covenant, condition or provision to any
other person or any other circumstance, other than those as to which it shall
be invalid or unenforceable, shall not be thereby affected, and each covenant,
condition and provision
<PAGE>
hereof shall remain valid and enforceable to the fullest extent permitted by
applicable law.
22.05. Estoppel Certificates. Tenant agrees, at any time and from time
----------------------
to time, upon not less than ten (10) business days' prior notice from Landlord,
to execute, acknowledge and deliver to Landlord or person designated by Landlord
a statement in writing (1) certifying that this Lease is unmodified and in full
force and effect, or if there have been modifications, that this Lease is in
full force and effect as in modified and stating the modifications; (2) stating
the dates to which the annual rent and additional rent have been paid by Tenant;
and (3) stating, to the best of Tenant's knowledge, whether or not Landlord is
in default in the performance of any covenant, agreement or condition contained
in this Lease, and if Tenant has knowledge of such a default specifying each
such default.
22.06. Excusable Delay. Whenever a party is required by the provisions of
----------------
this Lease to perform an obligation, other than an obligation to pay money, and
such party is prevented beyond its reasonable control from doing so by reason of
an Excusable Delay, such party shall be temporarily relieved of its obligation
to perform, provided it promptly notifies the other party of the specific delay
and exercises due diligence to remove or overcome it. The words "Excusable
Delay" shall mean any delay due to strikes, lockouts or other labor or
industrial disturbance; civil disturbance; future order of any government, court
or regulatory body claiming jurisdiction; act of the public, enemy; war, riot,
sabotage, blockade or embargo; failure or inability to secure materials,
supplies or labor through ordinary sources by reason of shortages or priority or
similar regulation or order of any government or regulatory body; lightning,
earthquake, fire, storm, hurricane, tornado, flood, washout or explosion, or
act or omission of one party hereto which prevents the party claiming delay
from complying, or which materially and adversely interferes with the claiming
party's ability to comply with an obligation under this Lease on its part to be
performed.
22.07. Rules of Interpretation. This Lease shall be strictly construed
------------------------
neither against Landlord or Tenant; except as otherwise expressly provided in
this Lease and its Exhibits and other attachments, the singular includes the
plural and the plural includes the singular; "or" is not exclusive; a reference
to an agreement or tether contract includes supplements and amendments thereto
to the extent permitted by this Lease; a reference to the Laws includes any
amendment or supplement to such Laws; a reference to a person includes its
permitted successors and assigns; accounting. provisions have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis; the words "such as", "include", and "including", are not
limiting; except as specifically agreed upon in this Lease, any right may be
exercised at any time and from time to time and all obligations are continuing
obligations throughout the term of this Lease, and in calculating any time
period, the first day shall be excluded and the last day shall be included and
all days are calendar days unless otherwise specified.
22.08. No Exclusive Remedies. No remedy or election given by any
----------------------
provision in this Lease shall be deemed exclusive unless so indicated, but each
shall, wherever possible, be cumulative in addition to all other remedies at law
or in equity which either party may have arising out of an event of default of
the other party.
<PAGE>
22.09. Recording of Lease. This Lease nor any memorandum of this Lease,
------------------
shall not be recorded by Tenant.
22.10. Binding Agreement. Unless specifically provided to the contrary
------------------
herein, this Lease shall bind and inure to the benefit of the Tenant's and
Landlord's respective representatives, successors and permitted assigns.
22.11. Entire Agreement. This Lease, including all Exhibits and other
-----------------
attachments referred to herein, contains the entire agreement of Landlord and
Tenant with respect to the matters stated here~n, and may not be modified except
by an instrument in writing which is signed by both parties and delivered by
each to the other. Exhibits and such other attachments are incorporated herein
as fully as if their contents were set out in full at each point of reference to
them.
22.12. Limitation of Landlord's Personal Liability. Tenant specifically
-------------------------------------------
agrees to look solely to Landlord's interest in the Building, its right to
receive rental income therefrom, and the Land for the recovery of any judgment
against Landlord, it being agreed that Landlord shall never be personally
liable for any such, judgment. The provision contained in the foregoing
sentence is not intended to, and shall not, limit any right that Tenant might
otherwise have to obtain injunctive relief against Landlord or Landlord's
successors in interest or any suit or action in connection with enforcement or
collection of amounts which may become owing or payable under or on account of
insurance maintained by Landlord.
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the terms, agreements or conditions contained in this Lease and the other party
places the enforcement of this Lease, or possession of the Leased Premises in
the hands of an attorney, the defaulting party agrees to pay the other party's
reasonable attorneys' fees.
22.14. Governing Law. This Lease shall be governed all respects by the
-------------
laws of the State of Florida.
IN WITNESS WHEREOF the parties have executed this agreement as of this date and
year first written above.
WITNESS FOR LESSEE/TENANT LESSEE/TENANT
3/9/98 Gastronomia Bocca di Rosa, Inc.
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Date
3/9/98 /s/ Pietro Bortolatti, President 3/9/98
- ---------------------------- ---------------------------------------
Date Pietro Bortolatti, President Date
<PAGE>
WITNESS FOR LANDLORD LESSOR/LANDLORD
2/27/98 Max Wolfe Sturman, on behalf of:
- ----------------------------
Date
2/27/98 /s/ Max Wolfe Sturman 2/27/98
- ---------------------------- ---------------------------------------
Date Carolyn Meredith Date
<PAGE>
EXHIBIT 21
Subsidiaries of the Issuer
The Issuer has one wholly-owned subsidiary, Gastronnomia Bocca Di Rosa, Inc.,
which was organized under the laws of the State of Florida on June 12, 1997.
