U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
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FORM 10-SB
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GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(g) of
The Securities Exchange Act of 1934
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IN-SPORTS INTERNATIONAL, INC.
(Name of Small Business Issuer in its charter)
Delaware 52-2171803
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
377 Route 17 South, Hasbrouck Heights, NJ 07604
- ------------------------------------------ -------
(Address of principal executive offices) (Zip code)
Issuer's telephone number: (201) 462-0031
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Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock ($.001 Par Value)
(Title of Class)
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TABLE OF CONTENTS
Page
PART I
Item 1. Description of Business 1
Item 2. Plan of Operation 9
Item 3. Description of Property 11
Item 4. Security Ownership of Certain Beneficial Owners and Management 12
Item 5. Directors, Executive Officers, Promoters and Control Persons 12
Item 6. Executive Compensation 13
Item 7. Certain Relationships and Related Transactions 14
Item 8. Description of Securities 14
PART II
Item 1. Market for Common Equities and Related Stockholder Matters 15
Item 2. Legal Proceedings 17
Item 3. Changes in and Disagreements with Accountants 17
Item 4. Recent Sales of Unregistered Securities 17
Item 5. Indemnification of Directors and Officers 19
PART F/S
Financial Statements __
Table of Contents __
PART III
Item 1. Index to Exhibits.
Signatures __
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PART I
Item 1. Description of Business
In-Sports International, Inc., a Delaware corporation, ("In-Sports" or the
"Company") is engaged in the business of distributing and installing artificial
grass surfaces for commercial, athletic, residential and child care applications
(sometimes known as "artificial turf"). The Company's predecessor began
operations on January 27, 1998 in the athletic surfacing industry as a
distributor for Playfield International, Inc., which In-Sports' believes is one
of the world's largest manufacturers of artificial turf. In December 1998,
In-Sports acquired The PermaGrass Corporation (the Company's predecessor) as a
wholly-owned subsidiary ("PGC") in a reverse acquisition transaction in which
the stockholder of PGC were issued 9,000,000 shares of the Company's common
stock and became the controlling stockholder of the Company. PGC installs
artificial turf in residential settings and day care centers; PGC focuses on
smaller scale applications. In February 1999, the Company purchased the name
"Ed-Car Construction" ("Ed-Car") from an existing entity in exchange for 250,000
shares of the Company's common stock. The Company uses the name "Ed-Car
Construction" for its wholly-owned subsidiary engaged in athletic field
construction activities. Ed-Car installs artificial turf athletic fields for
high schools, colleges and municipalities. In July 1999, the Company signed a
non-binding letter of intent to acquire Avery Sports Turf, Inc. ("Avery"), a
Georgia-based manufacturer of artificial turf and the Company primary supplier.
In-Sports is unsure as to when or whether this transaction will close. In-Sports
has not yet completed its due diligence investigation of Avery; the closing of
the transaction is contingent upon In-Sports' approval of all matters revealed
in the due diligence investigation.
The Company plans to enter into a strategic alliance with Resilient
Surface Materials, Inc. ("RSMI"), which the Company believes is one of the
largest manufactures and installers of synthetic running tracks in the United
States. Together with RMSI, the Company is offering its customers an integrated
running track-soccer field-football field package of artificial surfaces that
work together well and have a common drainage and underlayment system.
Today, In-Sports designs, constructs and installs all-weather synthetic
playing surfaces that the Company believes combine the finest safety and
durability features in the industry. The Company operates in two market
segments: (1) athletic fields for secondary schools, colleges and
municipalities; and, (2) small scale installations for commercial and
residential landscaping and cushioned play areas for playgrounds and day-care
centers. In order to develop the athletic market, the Company intends to create
community awareness as to the environmental benefits and safety features of
artificial turf. To expand its small scale installations, the Company intends to
have PGC promote the residential market and cosmetic greenery for business
establishments.
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Marketing
Athletic Field Segment
According to research prepared by the Company, the Company estimates that
the athletic field artificial surfacing market in the United States has a gross
market size of more than $60 Billion. This market size is based on approximately
35,000 high schools and colleges in the United States, each having certain
athletic surfacing needs for their football and soccer fields, each in the
$500,000 to $600,000 price range, which will need replacement during the next
five years. Not only are many natural grass fields in need of expensive repairs,
but, according to the Company's own municipal research, it currently costs a
high school or college up to $50,000 per year to maintain a natural grass sports
field.
In-Sports intends to target private and parochial high schools and
colleges in the Northeastern United States, which number approximately one
thousand. This will eliminate the public bidding and political considerations
that exist in many communities. To date, the Company has installed one
artificial playing field in the City of East Newark, New Jersey, and the Company
is bidding on six athletic fields for private and parochial schools in the North
Jersey area.
The Company is also a distributor for Mate'flex Industries, a manufacturer
of a high density rubber and polypropylene tile product used as flooring for
certain sports. At this writing, In-Sports is installing a Mate'flex modular
sports surface for basketball, volleyball and roller hockey play for the city of
Secaucus, New Jersey, which is scheduled for completion in February 2000.
Residential and Commercial Segment
The Company estimates that there are approximately one million homes in
the Northeastern United States. The Company intends to capture 1% or 10,000
homes in this area for installation of artificial turf lawns, at an average sale
of $3,000 per home. The Company also intends to pursue installations at
commercial facilities. To date, the Company has installed five artificial turf
residential lawns and two artificial turf landscaping projects at commercial
facilities in Lodi and Paramus, New Jersey.
Through PGC, In-Sports' also intends to pursue projects for childcare
centers and playgrounds. Under new New Jersey State rules mandating safe
surfaces to protect children from falls, the Company is promoting its artificial
turf as a safe, low maintenance alternative to woodchips and rubber crumb. To
date, the Company has installed artificial turf in twenty day care centers and
has orders for ten additional installations scheduled for March 2000.
Financing Program.
In-Sports can provide financing to its customers for any project from
$75,000 to $10 Million with payments over time up to 10 years. The Company has
arranged special financing for academic institutions that require no money down
and less than 10% annual interest.
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The Board of Directors of the Company has begun to implement its principal
business purpose described below under "Item 2 - Plan of Operation."
In-Sports was incorporated in Delaware on March 10, 1994 as "Beta
Acquisition Corp." In September, 1995, the Company changed its name to In-Sports
International, Inc. The Company's corporate offices are located at 377 Route 17
South, Hasbrouck Heights, NJ 07604. The Company's telephone number at that
location is (201) 462-0031.
The Company is filing this registration statement to enhance investor
protection and to provide information to the trading market. On December 11,
1997, the National Association of Securities Dealers, Inc. (the "NASD")
announced that its Board of Governors had approved a series of proposed changes
for the Over the Counter ("OTC") Bulletin Board and the OTC market. The
principal change, which was approved by the Securities and Exchange Commission
on January 4, 1999, allows only those companies that report their current
financial information to the Securities and Exchange Commission, banking, or
insurance regulators to be quoted on the OTC Bulletin Board. The rule provides
for a phase-in period for those securities already quoted on the OTC Bulletin
Board. The Company is filing this Registration Statement to comply with that
rule. Quotations for the Company's common stock (par value $0.001 per share)
(the "Common Stock") are posted in the "pink sheets" published by the National
Quotation Bureau under the symbol "IRTN." Until January 12, 2000, the quotations
for the Company's Common Stock were posted on the Over-the-Counter Bulletin
Board under the same symbol. Upon the effectiveness of this Registration
Statement, the Company intends to have its Common Stock reinstated on the
Over-the-Counter Bulletin Board.
The Company's business is subject to numerous risk factors, including, but
not limited to, the following:
RISKS RELATED TO THE COMPANY'S BUSINESS
Development Stage Company; Limited Operating History. In-Sports is an
early-stage company and In-Sports expects to encounter risks and difficulties
frequently faced by early-stage companies. In-Sports' predecessor (PGC) was
incorporated in 1998. In-Sports installed its first synthetic grass system in
September, 1999. The Company's limited operating history makes an evaluation of
the Company's future prospects very difficult. In-Sports cannot be certain that
the Company's business strategy will be successful or that In-Sports will
successfully address these risks.
In-Sports Anticipates Future Losses and Negative Cash Flow. In-Sports expects
operating losses and negative cash flow to continue for the foreseeable future.
In-Sports anticipates the Company's losses will increase significantly from
current levels because In-Sports expects to incur additional costs and expenses
related to:
- - brand development, marketing and other promotional activities;
- - expansion of the Company's operations;
- - continued development of the Company's technology, the systems that
In-Sports uses to process customers' orders and payments, and the
Company's computer network;
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- - geographic expansion of the Company's service area; and
- - development of relationships with strategic business partners.
As of September 30, 1999, In-Sports had an accumulated deficit during the
development stage of ($760,577). In-Sports incurred net losses of ($642,347) and
had $39,342 in sales in the nine month period ended September 30, 1999. The
Company's ability to become profitable depends on the Company's ability to
generate and sustain sales while maintaining reasonable expense levels. If
In-Sports does achieve profitability, In-Sports cannot be certain that the
Company would be able to sustain or increase profitability on a quarterly or
annual basis in the future. See Item 2-"Plan of Operations."
The Company's Limited Operating History Makes Future Forecasting Difficult.
Because of the Company's limited operating history, In-Sports finds it difficult
to forecast the Company's net sales accurately. In-Sports has limited meaningful
historical financial data upon which to base planned operating expenses, since
it has been in the development stage without sales since 1996. In-Sports bases
the Company's current and future expense levels on the Company's operating plans
and estimates of future net sales, and the Company's expenses are to a large
extent fixed. Sales and operating results are difficult to forecast because they
generally depend on the volume and timing of the orders In-Sports receives.
Consequently, In-Sports may be unable to adjust the Company's spending in a
timely manner to compensate for any unexpected revenue shortfall. This inability
could cause the Company's net losses in a given quarter to be greater than
expected.
The Company's Operating Results are Volatile and Difficult to Predict. If
In-Sports Fails to Meet the Expectations of Public Market Analysts and
Investors, the Market Price of the Company's Common Stock May Decrease
Significantly. The Company's annual and quarterly operating results may
fluctuate significantly in the future due to a variety of factors, many of which
are outside of the Company's control, including, among other things, the demand
for the Company's products, unpredictability of consumer trends and technology
changes. Because the Company's operating results are volatile and difficult to
predict, In-Sports believes that quarter-to-quarter comparisons of the Company's
operating results are not a good indication of the Company's future performance.
It is likely that in some future quarter the Company's operating results may
fall below the expectations of securities analysts and investors. In this event,
the trading price of the Company's Common Stock may fall significantly. Factors
that may harm the Company's business or cause the Company's operating results to
fluctuate include the following:
- - the Company's inability to obtain new customers at reasonable cost and
retain existing customers;
- - decreases in the funds available for marketing and promoting the Company's
services;
- - the Company's inability to manage rapid expansion of its services;
- - the Company's inability to adequately maintain, upgrade and develop the
Company's technical systems;
- - the ability of the Company's competitors to offer new or enhanced services
or products;
- - price competition;
- - an unanticipated high level of service cancellations;
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- - the termination of existing, or failure to develop new, strategic
marketing and manufacturing relationships;
- - increases in the cost of advertising;
- - the amount and timing of operating costs and capital expenditures relating
to expansion of the Company's operations;
- - technical difficulties, system downtime or telephone service
interruptions.
A number of factors will cause the Company's gross margins to fluctuate in
future periods, including timing of service area expansion, the mix of services
provided by the Company, and the level of discount or introductory pricing. Any
change in one or more of these factors could harm the Company's gross margins
and operating results in future periods.
The Company's Net Sales are Dependent Upon the Company's Ability To Offer the
Company's Customers A Dependable Quality Product At Competitive Prices. If
In-Sports is not able to offer the Company's customers dependable products at
competitive prices, the Company's net sales and results of operations will be
harmed. The Company's success depends on the Company's ability to provide
quality artificial turf surfaces to its customers at competitive prices.
If In-Sports Is Unable To Obtain Sufficient Quantities of Products From the
Company's Key Vendors, the Company's Net Sales Would Be Adversely Affected. If
In-Sports was unable to obtain sufficient quantities of artificial turf, backing
materials, underlayment and adhesives from the Company's key vendors, the
Company's net sales and results of operations would be harmed. The Company buys
its artificial turf from Avery at this time, and other components from multiple
vendors. The Company believes that multiple other sources of such components
exist and finding replacement vendors would not have a material adverse effect
upon the Company.
To Manage the Company's Growth and Expansion, In-Sports Needs To Improve and
Implement the Company's Systems, Procedures and Controls. If In-Sports Is Unable
To Do So Successfully, the Company's Business Would Be Seriously Harmed. The
Company's growth in operations will place a significant strain on the Company's
management, information systems and resources. In order to manage this growth
effectively, In-Sports needs to continue to improve the Company's financial and
managerial controls and reporting systems and procedures. The Company's failure
to successfully implement, improve and integrate these systems and procedures
would harm the Company's results of operations.
In-Sports May Not Be Able To Compete Successfully Against Current and Future
Competitors. The Company faces competition from AstroTurf, Playfield
International and Field Turf, among others. The market for synthetic sports
fields and commercial and residential use of artificial turf is rapidly evolving
and intensely competitive. Increased competition is likely to result in price
reductions, reduced gross margins and loss of market share, any of which could
seriously harm the Company's net sales and results of operations. In-Sports
expects competition to intensify in the future as use of artificial turf for
secondary school and commercial applications expands and becomes more common.
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Many of the Company's competitors have longer operating histories, larger
customer or user bases, greater brand recognition and significantly greater
financial, marketing and other resources than does In-Sports. Many of these
competitors can devote substantially more resources to marketing and promotion
than can In-Sports. In addition, larger, well-established and well-financed
landscaping, artificial turf and sports facilities may try to offer competing
services. The Company's competitors may be able to secure products from vendors
on terms that are more favorable and adopt more aggressive pricing policies than
can In-Sports.
If In-Sports Does Not Successfully Expand the Company's Service Area and
Marketing Efforts, the Company's Business Could be Seriously Harmed. If
In-Sports does not successfully expand the Company's service area, In-Sports
will not be able to increase the Company's net sales in accordance with the
expectations of securities analysts and investors. In such an event, the
Company's business will be harmed. The Company's success depends on the
Company's ability to expand the Company's service area and marketing efforts in
order to accommodate a significant increase in customer orders. The Company's
planned expansion may cause disruptions that could harm the Company's business,
results of operations and financial condition.
If In-Sports Does Not Respond To Rapid Technological Changes, the Company's
Products Could Become Obsolete and the Company's Business Would Be Seriously
Harmed. If In-Sports faces material delays in introducing new products and
enhancements, the Company's potential customers may forego the use of the
Company's products and use those of the Company's competitors. To remain
competitive, In-Sports must continue to enhance and improve the quality,
durability and maintenance features of the Company's artificial turf and its
available configurations. If competitors introduce new products embodying new
technologies, or if new industry standards and practices emerge, the Company's
existing products may become obsolete. Developing, enhancing and upgrading the
Company's products entails significant technical and business risks. In-Sports
may use new technologies ineffectively or In-Sports may fail to adapt the
Company's products to changing customer requirements or emerging industry
standards.
If the Protection of the Company's Trademarks and Proprietary Rights Is
Inadequate, the Company's Business Will Be Seriously Harmed. The steps In-Sports
takes to protect the Company's proprietary rights may be inadequate. In-Sports
regards the Company's copyrights, service marks, trademarks, trade dress, trade
secrets and similar intellectual property as critical to the Company's success.
In-Sports relies on trademark and copyright law, trade secret protection and
confidentiality or license agreements with the Company's employees, customers,
partners and others to protect the Company's proprietary rights. The Company is
in the process of filing for trademark protection for "In-Sports" for
telecommunications services. Effective service mark, copyright and trade secret
protection may not be available in every country in which In-Sports will sell
the Company's products and services.
Risks Associated With Potential Acquisitions. If In-Sports is presented with
appropriate opportunities, In-Sports intends to make investments in
complementary companies, products or technologies. In-Sports may not realize the
anticipated benefits of any acquisition or investment. If In-Sports buys a
company, In-Sports could have difficulty in assimilating that
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company's personnel and operations. In addition, the essential personnel of the
acquired company may decide not to work for the Company. If In-Sports makes
other types of acquisitions, In-Sports could have difficulty in assimilating the
acquired technology or products into the Company's operations. These
difficulties could disrupt the Company's ongoing business, distract the
Company's management and employees and increase the Company's expenses.
Furthermore, In-Sports may have to incur debt or issue equity securities to pay
for any future acquisitions or investments, the issuance of which could be
dilutive to the Company or the Company's existing stockholders.
Existing Stockholders Will Be Able to Exercise Significant Control Over
In-Sports. Executive officers, directors and entities affiliated with them, if
acting together, would be able to significantly influence all matters requiring
approval by the Company's stockholders, including the election of directors and
the approval of mergers or other business combination transactions. These
stockholders, taken together, beneficially own approximately 31.6% of the
Company's outstanding common stock and can elect all directors and pass any
action requiring stockholder approval. See Item 4. "Security Ownership of
Certain Beneficial Owners and Management" and Item 5 "Directors, Executive
Officers, Promoters and Control Persons."
It May Be Difficult For A Third Party To Acquire The Company. Provisions of the
Company's Certificate of Incorporation, the Company's Bylaws and Delaware law
could make it more difficult for a third party to acquire the Company, even if
doing so would be beneficial to the Company's stockholders. See Item 8.
"Description of Securities."
RISKS RELATED TO THE COMPANY'S INDUSTRY
In-Sports May Need To Change the Manner in Which In-Sports Conducts the
Company's Business if Government Regulation Increases. The adoption or
modification of laws or regulations relating to use of artificial turf surfaces
for day care centers or schools could adversely affect the manner in which
In-Sports currently conducts the Company's business. In addition, the growth and
development of the market for artificial turf for residential or child care
center uses may lead to more stringent consumer protection laws, both in the
United States and abroad, that may impose additional burdens on the Company.
RISKS RELATED TO SECURITIES MARKETS
In-Sports May Be Unable to Meet the Company's Future Capital Requirements.
In-Sports cannot be certain that additional financing will be available to the
Company on favorable terms when required, or at all. If In-Sports raises
additional funds through the issuance of equity, equity-related or debt
securities, such securities may have rights, preferences or privileges senior to
those of the rights of the Company's Common Stock and the Company's stockholders
may experience additional dilution. In-Sports requires substantial working
capital to fund the Company's business. Since the Company's inception, In-Sports
has experienced negative cash flow from operations and expects to experience
significant negative cash flow from operations for the foreseeable future.
In-Sports currently anticipates that the Company's available funds will be
sufficient to meet the Company's anticipated needs for working capital and
capital
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expenditures through at least the next six to nine months. In-Sports may need to
raise additional funds before the expiration of such period.
The Company's Common Stock Price May Be Volatile, Which Could Result in
Substantial Losses For Individual Stockholders. The market price for the
Company's common stock is likely to be highly volatile and subject to wide
fluctuations in response to factors including the following, some of which are
beyond the Company's control:
- - actual or anticipated variations in the Company's quarterly operating
results;
- - announcements of technological innovations or new products or services by
the Company or the Company's competitors;
- - changes in financial estimates by securities analysts;
- - conditions or trends in the building products industry;
- - announcements by the Company or the Company's competitors of significant
acquisitions, strategic partnerships, joint ventures or capital
commitments;
- - additions or departures of key personnel;
- - release of lock-up or other transfer restrictions on the Company's
outstanding shares of common stock or sales of additional shares of common
stock; and
- - potential litigation.
If the Company's Stock Price Is Volatile, In-Sports Could Face a Securities
Class Action Lawsuit. In the past, following periods of volatility in the market
price of their stock, many companies have been the subjects of securities class
action litigation. If disgruntled stockholders sued In-Sports in a securities
class action, it could result in substantial costs and a diversion of
management's attention and resources and would harm the Company's stock price.
Substantial Sales of the Company's Common Stock Could Cause the Company's Stock
Price To Fall. If the Company's stockholders sell substantial amounts of the
Company's Common Stock in the public market, the market price of the Company's
Common Stock could fall. Such sales also might make it more difficult for the
Company to sell equity or equity-related securities in the future at a time and
price that In-Sports deems appropriate.
Conflicts of Interest. Officers and directors of the Company may in the future
participate in business ventures that could be deemed to compete directly with
the Company. Additional conflicts of interest and non-arms length transactions
may also arise in the future in the event the Company's officers or directors
are involved in the management of any firm with which the Company transacts
business. The Company has adopted a policy that the Company will not seek a
merger with, or acquisition of, any entity in which members of the Company's
management serve as officers, directors or partners, or in which they or their
family members own or hold any material ownership interest.
Reporting Requirements May Delay or Preclude Acquisition. Sections 13 and 5(d)
of the Securities Exchange Act of 1934 (the "1934 Act"), require companies
subject thereto to provide certain information about significant acquisitions,
including certified financial statements for the company acquired, covering one,
two, or three years, depending on the relative size of the acquisition. The time
and additional costs that may be incurred by some target entities to prepare
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such statements may significantly delay or essentially preclude consummation of
an otherwise desirable acquisition by the Company. Acquisition prospects that do
not have or are unable to obtain the required audited statements may not be
appropriate for acquisition so long as the reporting requirements of the 1934
Act are applicable.
Item 2. Plan of Operation
In-Sports was founded to market, distribute and install artificial turf
surfaces for commercial, athletic, residential and child care applications. We
recognized a major opportunity to develop new uses for artificial turf in
smaller applications. In addition, we formed a strategic relationship with Avery
to develop products aimed at athletic fields for secondary schools and colleges,
rather than the professional sports market, which is extremely limited. After
investigation, the Company determined that Avery's artificial turf product was
most like natural grass when installed correctly.
The Company believes that a properly installed artificial turf playing
surface, with proper padding and foundation, is safer for growing student
athletes than a poorly maintained natural grass field. The Company's
polyethylene fiber artificial turf is non-abrasive, installed over porous
underlayment that allows for drainage, does not use sand or other gritty
material as topfill and is not slippery when wet. The Company believes that
there is a fundamental misconception regarding artificial turf that is a
holdover from early types of synthetic surfaces. Originally, artificial turf
surfaces were installed over concrete foundations and a layer of sand, with sand
as a topfill to hold the artificial turf in place. These surfaces were very hard
on athletes' joints and may have caused or contributed to injuries. In some
installations, the sand base shifted and moved, leaving ripples, "hills" and
"valleys" in the surface, causing athletes to trip and fall, leading to
additional injuries. The initial forms of artificial turf were made with nylon
fiber, which tended to be slippery, especially when wet, leading to falls, knee
and ankle injuries. The sand topfill and base tended to settle and compact,
which made it hard; the sand topfill was very abrasive, leading to premature
wear on the artificial and injury to falling players.
The Company's modern synthetic grass surfaces are sufficiently cushioned
to allow their use in childcare centers, which have high standards for injury
prevention. These surfaces have traction qualities equivalent to natural grass,
and provide more traction when wet than natural grass. The Company uses rubber
crumb, from recycled tires, as topfill, which adds additional cushion and is
non-abrasive. With proper installation, a modern artificial turf surface needs
very little maintenance other that periodic cleaning. In addition, to keep this
typical grass field in playable condition requires the expenditure of
approximately $20,000 per year, per field, including: chemicals, fertilizer,
seed, water, cutting and other labor. The typical natural turf field can be used
for events no more than approximately 120 hours per year. If a natural grass
field gets too wet and muddy, the field may be closed for an indefinite period
to allow the natural grass to become reestablished. An artificial turf field can
be used every day for as long as light is available and weather conditions
permit. The average artificial turf field has a useful life of 15 years and can
be replaced at approximately one-half the cost of initial installation.
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Market Strategy
There are two distinct markets for In-Sports' products: the Athletic Field
Market and the Residential-Commercial Market.
Athletic Field Market
According to the official publication of the National Interscholastic
Athletic Directors and Coaches Association, the athletic field artificial
surfacing market in the United States has a gross market size more than $60
Billion. This market size is based on approximately 35,000 high schools and
colleges in the United States, each having certain athletic surfacing needs of
their football and soccer fields, in the $500,000 to $600,000 price range,
during the next five years. Not only are many natural grass fields in need of
expensive repairs, but, according to our research, it currently costs a high
school or college up to $50,000 per year to maintain a natural grass sports
field.
In-Sports intends to target private and parochial high schools and
colleges in the Northeastern United States, which number approximately one
thousand. This will eliminate the public bidding war and political
considerations, which prevail in every community. To date, the Company has
installed one artificial playing field in the City of East Newark, New Jersey,
and the Company is bidding on six athletic fields for private and parochial
schools in the North Jersey area.
The Company is also a distributor Mate'flex Industries, a manufacturer of
a high density rubber and polypropylene tile product used as flooring for
certain sports. At this writing, In-Sports is installing a Mate'flex modular
sports surface for basketball, volleyball and roller hockey play for the city of
Secaucus, New Jersey, which is scheduled for completion in February 2000.
Residential and Commercial Segment
The Company estimates that there are approximately one million homes in
the Northeastern United States. The Company intends to capture 1% or 10,000
homes in this area, at an average sale of $3,000 per home. The Company also
intends to pursue installations at commercial facilities. To date, the Company
has installed five artificial turf residential lawns and two artificial turf
landscaping projects at commercial facilities in Lodi and Paramus, New Jersey.
Through PGC, In-Sports' also intends to pursue the childcare centers and
playgrounds. To date, the Company has installed artificial turf in twenty day
care centers and has orders for ten additional installations scheduled for March
2000.
Financing Program. In-Sports can provide financing to its customers for
any project from $75,000 to $10 Million with payments over time up to 10 years.
The Company has arranged special financing for academic institutions that
require no money down and less than 10% annual interest.
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The Company markets its products through its own sales force, direct mail
campaigns and telephone solicitation by its employees. To reach potential
customers outside of the Northeastern United States, the Company uses
independent sales representatives.
Competition
In-Sports competes with a large number of independent artificial turf
installation companies, many of which are approximately the same size as the
Company or larger. Most of these companies act on a regional basis in other
areas of the United States, and the market is highly fragmented. In its home
market of the Northeastern United States, the Company is the only company
engaged exclusively in the business of installing artificial turf playing
fields. In the daycare center market, In-Sports is not aware of any other
company installing a synthetic grass surface that meets state and federal safety
guidelines for shock absorption for children's play areas.
The Company has ten full time and three part time employees. In-Sports
operates a facility at 377 Route 17 South, Hasbrouck Heights, New Jersey used as
the principal corporate office and rents a warehouse site in Hackensack, New
Jersey.
CORPORATE INFORMATION
In-Sports was incorporated in Delaware in 1994 as "Beta Acquisition Corp."
In 1995, the Company changed its name to In-Sports International, Inc. The
Company's corporate offices are located at 377 Route 17 South, Hasbrouck
Heights, NJ 07604. The Company's telephone number at that location is (201)
462-0031.
The Company has significant capital needs, which to date the Company has
met through private sales of its equity and loans. The Company will continue to
need substantial infusions of capital, which it expects to continue to fund
primarily from private sales of its equity and loans, or by a public offering of
its equity or debt securities. The Company has no definitive plans for any
transaction at this time.
Item 3. Description of Property
The Company leases one facility located at 377 Route 17 South, Hasbrouck
Heights, New Jersey as its sole office. This facility contains approximately
1200 square feet used for offices. The lease on this facility expires in March,
2000 and the monthly lease payments are approximately $2,200 per month. The
Company also leases self-storage space on a month-to-month "as needed" basis.
The Company does not anticipate any difficulty in either renewing the existing
lease on similar terms or obtaining replacement office space on similar terms.
13
<PAGE>
Item 4. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners.
The following table sets forth the beneficial ownership for the Company's
sole class of Common Stock of the Company beneficially owned by all directors,
officers and 5% or more holders.
Name and
Address of Nature of
Beneficial Beneficial Number of
Owner (1) Ownership Shares Percent
- --------- --------- --------- -------
Patrick McLaren Direct 5,725,000 28.0%
Joseph Caravella Direct 250,000 1.2%
Richard Ciarletta Direct 250,000 1.2%
Samuel Serritella Direct 250,000 1.2%
--------- ------
Total 6,475,000 31.6%
(1) The address for each listed beneficial owner is c/o the Company at 377 Route
17 South, Hasbrouck Heights, New Jersey 07604
Item 5. Directors, Executive Officers, Promoters and Control Persons.
The directors and officers of the Company are as follows:
Name Age Position
- ---- --- --------
Patrick McLaren 75 Chairman of the Board and Director
Samuel Serritella 55 President and Director
Joseph Caravella 56 Vice President and Director
Richard Ciarletta 35 Director
Patrick McLaren. Mr. McLaren has served as Chairman of the Board of In-Sports
since January, 1998. From January, 1998 to September, 1999, Mr. McLaren was the
Company's Chairman of the Board, President and Chief Executive Officer. From
January, 1997 to January, 1998, Mr. McLaren was the President of The Perma Grass
Corporation, prior to the reverse acquisition of PGC by the Company. From 1995
to 1997, Mr. McLaren was the President of Universal Turf, Inc. Mr. McLaren is a
graduate of Seton Hall University, with a BA in Communication Arts.
Samuel Serritella. Mr. Serritella was appointed President and a director of the
Company in September, 1999. Prior to his involvement in the Company, and for
more than the past five years, Mr. Serritella has been self-employed in the tire
recycling business.
Joseph Caravella. Mr. Caravella has been Vice President and a director of the
Company since February, 1999, when the Company purchased the name "Ed-Car
Construction" from Ed-Car Construction, LLC. From 1969 until February, 1999, Mr.
Caravella was the sole or majority
14
<PAGE>
owner of several construction companies, including Ed-Car Construction, LLC and
Joseph Caravella Construction Co.
Richard Ciarletta. Mr. Ciarletta has been a director of the Company since
December, 1999. Since August, 1994, Mr. Ciarletta has been a vice president the
Equity Division of Credit Suisse, First Boston in New York, where he is
responsible for supervising registered representatives and sales assistants and
in monitoring activity in investor accounts.
The above listed directors will serve until the next annual meeting of the
stockholders or until their death, resignation, retirement, removal, or
disqualification, and until their successors have been duly elected and
qualified. Our executive officers serve at the discretion of the Board of
Directors. Vacancies in the existing Board of Directors are filled by majority
vote of the remaining Directors. Officers of the Company serve at the will of
the Board of Directors. There are no agreements or understandings for any
officer or director to resign at the request of another person and no officer or
director is acting on behalf of or will act at the direction of any other
person. There is no family relationship between any executive officers or
directors of the Company.
Board Committees. The Board of Directors has not yet established any committees.
The Board intends to establish a Compensation Committee and an Audit Committee
at the next meeting of the Board of Directors.
Compensation Committee Interlocks and Insider Participation. The Board has not
yet established a Compensation Committee. The Board of Directors as a whole
performs this function.
Director Compensation. In-Sports' directors do not receive any cash compensation
for their service as members of the Board of Directors, although they are
reimbursed for travel and lodging expenses in connection with attendance at
Board meetings.
Item 6. Executive Compensation.
Executive Compensation. The following table sets forth the compensation received
for services rendered to the Company during the fiscal year ended June 30, 1999
by our Chief Executive Officer. The Company had no officers who earned more than
$100,000 during the fiscal year ended March 31, 1999.
SUMMARY COMPENSATION TABLE
Name And Principal Annual Compensation Other Annual Long-Term All Other
Position Salary($) Bonus($) Compensation Compensation Awards
- -------- --------- -------- ------------ ------------ ------
Compensation
------------
Sam Serritella (1) $ 0 $ 0 $ 0 $ 0 $ 0
(1) Mr. Serritella has not received or accrued any compensation since his
election as President of the Company in September, 1999.
15
<PAGE>
The Company did not pay to our Chief Executive Officer or any executive
officer any compensation intended to serve as incentive for performance to occur
over a period longer than one year pursuant to a long-term incentive plan in the
fiscal year ended December 31, 1999. The Company does not have any defined
benefit or actuarial plan with respect to our Chief Executive Officer or any
executive officer under which benefits are determined primarily by final
compensation and years of service.
Option Grants
The Company did not issue any stock options to its Chief Executive Officer
or any executive officer in the fiscal year ended December 31, 1999.
Members of the Company's management are associated with other firms
involved in a range of business activities. Consequently, there are potential
inherent conflicts of interest in their acting as officers and directors of the
Company. Insofar as the officers and directors are engaged in other business
activities, management anticipates it will devote only a minor amount of time to
the Company's affairs.
The officers and directors of the Company are now, and may in the future
become, stockholders, officers or directors of other companies that may be
engaged in business activities similar to those conducted by the Company.
Accordingly, additional direct conflicts of interest may arise in the future
with respect to such individuals acting on behalf of the Company or other
entities. Moreover, additional conflicts of interest may arise with respect to
opportunities which come to the attention of such individuals in the performance
of their duties or otherwise. The Company does not currently have a right of
first refusal pertaining to opportunities that come to management's attention
insofar as such opportunities may relate to the Company's proposed business
operations.
None of the Company's directors receives any compensation for their
respective services rendered to the Company as directors, nor have they received
such compensation in the past. They all have agreed to act without compensation
until authorized by the Board of Directors. Further, none of the directors is
accruing any compensation under any agreement with the Company.
Item 7. Certain Relationships and Related Transactions.
There have been no related party transactions or any other transactions or
relationships required to be disclosed pursuant to Item 404 of Regulation S-B.
Item 8. Description of Securities.
The Company's authorized capital stock consists of 50,000,000 shares of
Common Stock, par value $.001 per share. There are 20,500,000 shares of Common
Stock issued and outstanding as of the date of this filing. All shares of Common
Stock have equal voting rights and, when validly issued and outstanding, are
entitled to one vote per share in all matters to be
16
<PAGE>
voted upon by stockholders. The shares of Common Stock have no preemptive,
subscription, conversion or redemption rights and may be issued only as
fully-paid and non-assessable shares. Cumulative voting in the election of
directors is not permitted, which means that the holders of a majority of the
issued and outstanding shares of Common Stock represented at any meeting at
which a quorum is present will be able to elect the entire Board of Directors if
they so choose and, in such event, the holders of the remaining shares of Common
Stock will not be able to elect any directors. In the event of liquidation of
the Company, each stockholder is entitled to receive a proportionate share of
the Company's assets available for distribution to stockholders after the
payment of liabilities and after distribution in full of preferential amounts,
if any. All shares of the Company's Common Stock issued and outstanding are
fully paid and nonassessable. Holders of the Common Stock are entitled to share
pro rata in dividends and distributions with respect to the Common Stock, as may
be declared by the Board of Directors out of funds legally available therefor.
PART II
Item 1. Market Price for Common Equity and Related Stockholder Matters.
Quotations for the Company's Common Stock (par value $0.001 per share) are
posted in the "pink sheets" published by the National Quotation Bureau under the
symbol "IRTN." Until January 12, 2000, the quotations for the Company's Common
Stock were posted on the Over-the-Counter Bulletin Board under the same symbol.
Upon the effectiveness of this Registration Statement, the Company intends to
have its Common Stock reinstated on the Over-the-Counter Bulletin Board. As soon
as the Company becomes eligible, the Company intends to request a listing for
the Common Stock on the American Stock Exchange (TM). This listing requires
certain asset, earnings and per share price standards that the Company does not
now meet. The Company can give no assurance that it will meet these standards in
the foreseeable future, it at all.
(a) Market Price.
Since December 31, 1998, market makers have be able to post price
quotations for the Company's Common Stock on the Over the Counter Bulletin Board
(before January 12, 2000) or the "pink sheets" (beginning January 12, 2000). The
historical prices for the Company's Common Stock on the OTC Bulletin Board and
the "pink sheets" are as follows:
High Low
---- ---
Fourth Quarter 1998 $ 3.50 $ 3.50
First Quarter 1999 $ 3.12 $ 0.25
Second Quarter 1999 $ 1.06 $ 0.43
Third Quarter 1999 $ 0.59 $ 0.16
Fourth Quarter 1999 $ 1.00 $0.075
First Quarter 2000 (until February 7, 2000) $ 0.25 $ 0.01
The Securities and Exchange Commission adopted Rule 15g-9, which
established the definition of a "penny stock," for purposes relevant to the
Company, as any equity security that
17
<PAGE>
has a market price of less than $5.00 per share or with an exercise price of
less than $5.00 per share, subject to certain exceptions. For any transaction
involving a penny stock, unless exempt, the rules require: (i) that a broker or
dealer approve a person's account for transactions in penny stocks; and (ii) the
broker or dealer receive from the investor a written agreement to the
transaction, setting forth the identity and quantity of the penny stock to be
purchased. In order to approve a person's account for transactions in penny
stocks, the broker or dealer must (i) obtain financial information and
investment experience and objectives of the person; and (ii) make a reasonable
determination that the transactions in penny stocks are suitable for that person
and that person has sufficient knowledge and experience in financial matters to
be capable of evaluating the risks of transactions in penny stocks. The broker
or dealer must also deliver, prior to any transaction in a penny stock, a
disclosure schedule prepared by the Commission relating to the penny stock
market, which, in highlight form, (i) sets forth the basis on which the broker
or dealer made the suitability determination; and (ii) that the broker or dealer
received a signed, written agreement from the investor prior to the transaction.
Disclosure also has to be made about the risks of investing in penny stock in
both public offering and in secondary trading, and about commissions payable to
both the broker-dealer and the registered representative, current quotations for
the securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks.
For the initial listing on the American Stock Exchange(TM), a company must
have net tangible assets of $4 million or market capitalization of $50 million
or a net income (in the latest fiscal year or two of the last fiscal years) of
$750,000, a public float of 1,000,000 shares with a market value of $5 million.
The minimum bid price must be $4.00 and there must be three market makers. In
addition, there must be 300 stockholders holding 100 shares or more, and the
company must have an operating history of at least one year or a market
capitalization of $15 million. For continued listing in the American Stock
Exchange (TM), a company must have net tangible assets of $2 million or market
capitalization of $35 million or a net income (in the latest fiscal year or two
of the last fiscal years) of $500,000, a public float of 500,000 shares with a
market value of $1 million. The minimum bid price must be $1.00 and there must
be two market makers. In addition, there must be 300 stockholders holding 100
shares or more. The Company can give no assurances that it will qualify its
securities for listing on American Stock Exchange some other national securities
exchange, or be able to maintain the maintenance criteria necessary to insure
continued listing. The failure of the Company to qualify its securities or to
meet the relevant maintenance criteria after such qualification in the future
may result in the discontinuance of the inclusion of the Company's securities on
a national exchange. In such events, trading, if any, in the Company's
securities may then continue in the non-NASDAQ over-the-counter market.
Consequently, a stockholder may find it more difficult to dispose of, or to
obtain accurate quotations as to the market value of, the Company's securities.
(b) Holders. There are approximately 1100 holders of the Company's Common Stock.
All share amounts have been adjusted to reflect a 1000 for 1 stock split
effective August 1998. During 1998, the Company issued Common Stock on December
31,1998, where the Company issued 9,000,000 Shares of Common Stock to Patrick
McLaren, its Chairman, in the reverse acquisition transaction between In-Sports
and PGC.
18
<PAGE>
In February, 1999, Mr. McLaren returned 250,000 Shares of Common Stock to the
Company, which were then reissued to ED-Car Construction, LLC in exchange for
the use of its name. On April 6, 1999, the Company issued 10,000,000 shares of
Common Stock to investors for consideration consisting of $10,000 in cash and
$990,000 in Promissory Notes in an offering exempt under Rule 504 of Regulation
D. All of the issued and outstanding shares of the Company's Common Stock were
issued in accordance with exemptions from registration afforded by Section 3(b)
or 4(2) of the Securities Act of 1933, as amended (the "Securities Act"). As of
the date of this Registration Statement, 11,000,000 shares of the Company's
Common Stock held by non-affiliates are eligible for sale.
Dividends. The Company has not paid any dividends to date, and has no
plans to do so in the immediate future.
Item 2. Legal Proceedings.
There is no litigation pending or threatened by or against the Company.
Item 3. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.
The Company has changed accountants since its formation; but there were no
disagreements with the findings of the Company's former accountants.
Item 4. Recent Sales of Unregistered Securities.
(a) Securities sold. The Company sold and issued its securities during the three
year period preceding the date of this Registration Statement in a series of
private transactions or exempt offerings of securities; as follows:
(i) On December 31,1998, the Company issued 9,000,000 Shares of Common
Stock to Patrick McLaren, its Chairman, in the reverse acquisition
transaction between In-Sports and PGC;
(ii) In February, 1999, the Company issued 250,000 Shares of Common Stock
to Joseph Caravella, the former shareholder of Ed-Car Construction,
LLC in exchange for the rights to use its name;
(iii) On April 6, 1999, the Company issued 10,000,000 shares of Common
Stock to investors for consideration consisting of $10,000 in cash
and $990,000 in Promissory Notes in an offering exempt under Rule
504 of Regulation D.
Certain of the shares of Common Stock of the Company were sold and issued on
various dates, described above, for investment purposes in "private
transactions" and are "restricted" shares as
19
<PAGE>
defined in Rule 144 under the Securities Act of 1933, as amended. These shares
may not be offered for public sale except under Rule 144, or otherwise, pursuant
to said Act. In summary, Rule 144 applies to affiliates (that is, control
persons) and nonaffiliates when they resell restricted securities (those
purchased from the issuer or an affiliate of the issuer in nonpublic
transactions). Nonaffiliates reselling restricted securities, as well as
affiliates selling restricted or nonrestricted, are not considered to be engaged
in a distribution and, therefore, are no deemed to be underwriters as defined in
Section2 (11) of the Securities Act of 1933, as amended, if six conditions are
met:
(1) Current public information must be available about the issuer unless sales
are limited to those made by non-affiliates after two years.
(2) When restricted securities are sold, generally there must be a one-year
holding period.
(3) When either restricted or nonrestricted securities are sold by an
affiliate after one year, there are limitations on the amount of
securities that may be sold; when restricted securities are sold by
non-affiliates between the first and second years, there are identical
limitations; after two years, there are no volume limitations for resales
by non-affiliates.
(4) Except for sales of restricted securities made by non-affiliates after two
years, all sales must be made in brokers' transactions as defined in
Section 4(4) of the Securities Act of 1933, as amended, or a transaction
directly with a "market maker" as that term is defined in Section 3(a)(38)
of the 1934 Act.
(5) Except for sales of restricted securities made by non-affiliates after two
years, a notice of proposed sale must be filed for all sales in excess of
500 shares or with an aggregate sales price in excess of $10,000.
(6) There must be a bona fide intention to sell within a reasonable time after
the filing of the notice referred to in (5) above.
(b) Underwriters and other purchasers. There were no underwriters in the sale
and issuance of any of the Company's securities. All of the purchasers of Common
Stock from the Company have had a pre-existing personal or business relationship
with the Company or its officers and directors.
Consideration.
The Company sold certain shares of stock for cash and others were issued either
for services rendered to the Company, for the shares of PermaGrass Corporation,
in the acquisition of the corporate name from Ed-Car Construction Company, LLC.
The Company sold 10,000,000 Shares of Common Stock for cash at the price of
$0.10 per Share and others were issued either for services rendered to the
Company, for shares of PGC or for the acquisition of the name "Ed-Car
Construction."
(d) Exemptions from Registration Relied Upon.
The sale and issuance of the shares of In-Sports' Common Stock were exempt from
registration under the Securities Act of 1933, as amended, by virtue of either
Section 3(b) or Section 4(2) and, in certain cases, Regulation D promulgated
thereunder. Purchasers in transactions exempt under Section 4(2) and Rule 506
purchased shares from the Company for investment and not
20
<PAGE>
with a view to distribution to the public. In 1999, the Company sold 10,000,000
shares under Rule 504 of Regulation D that are not subject to restrictions on
resale.
Item 5. Indemnification of Directors and Officers.
Except for acts or omissions which involve intentional misconduct, fraud or
known violation of law or for the payment of dividends in violation of the
Delaware General Corporation Law, there shall be no personal liability of a
director or officer to the Company, or its stockholders for damages for breach
of fiduciary duty as a director or officer. The Company may indemnify any person
for expenses incurred, including attorneys fees, in connection with their good
faith acts if they reasonably believe such acts are in and not opposed to the
best interests of the Company and for acts for which the person had no reason to
believe his or her conduct was unlawful. The Company may indemnify the officers
and directors for expenses incurred in defending a civil or criminal action,
suit or proceeding as they are incurred in advance of the final disposition of
the action, suit or proceeding, upon receipt of an undertaking by or on behalf
of the director or officer to repay the amount of such expenses if it is
ultimately determined by a court of competent jurisdiction in which the action
or suit is brought determined that such person is fairly and reasonably entitled
to indemnification for such expenses which the court deems proper. Insofar as
indemnification for liabilities arising under the 1933 Act may be permitted to
officers, directors or persons controlling the Company pursuant to the
foregoing, the Company has been informed that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933, as amended, and is therefore
unenforceable.
PART F/S
Financial Statements. The following financial statements are attached to this
report and filed as a part thereof.
21
<PAGE>
IN-SPORTS INTERNATIONAL, INC. AND SUBSIDIARY
(A Development Stage Enterprise)
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
----
Independent Auditor's Report F-2
Consolidated Balance Sheets as of December 31, 1998 and as
of September 30, 1999 (unaudited) F-3
Consolidated Statements of Operations from January 27,1998
(inception) through December 31, 1998 and for the nine
months ended September 30, 1999 (unaudited) and the
cumulative period during the development stage of January
27,1998 (inception)through September 30, 1999 (unaudited) F-4
Consolidated Statement of Shareholders' Equity from January
27,1998 (inception)through December 31, 1998 and for the
nine months ended September 30, 1999 (unaudited) F-5
Consolidated Statements of Cash Flows from January 27,1998
(inception) through December 31, 1998 and for the nine
months ended September 30, 1999 (unaudited) and the
cumulative period during the development stage of January
27,1998 (inception)through September 30, 1999 (unaudited) F-6
Notes to Consolidated Financial Statements F-7 - F-13
F-1
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Shareholders of
In-Sports International, Inc. and Subsidiary
Wilmington, Delaware
We have audited the accompanying consolidated balance sheet of In-Sports
International, Inc. and Subsidiary (A Development Stage Enterprise) as of
December 31, 1998 and the related consolidated statements of operations,
shareholders' equity and cash flows for the period January 27,1998 (inception)
through December 31, 1998. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we 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 used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of In-Sports
International, Inc. and Subsidiary (A Development Stage Enterprise) as of
December 31, 1998, and the results of its operations and its cash flows for the
period January 27,1998 (inception) through December 31, 1998, in conformity with
generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2(b) to
the consolidated financial statements the Company is in the development stage
and has incurred net losses and negative cash flows from operations since
inception. These conditions raise substantial doubt about the Company's ability
to continue as a going concern. Management's plans in these matters are
described in note 2(b). The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ Feldman Sherb Horowitz & Co., P.C.
Feldman Sherb Horowitz & Co., P.C.
Certified Public Accountants
August 12, 1999
F-2
<PAGE>
IN-SPORTS INTERNATIONAL, INC. AND SUBSIDIARY
(A Development Stage Enterprise)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, September 30,
ASSETS 1998 1999
------ ---- ----
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 554 $ 2,546
Loan receivable - shareholder 4,662 --
Due from vendor -- 82,500
Prepaid expense and other current asset 22,500 21,000
----------- -----------
TOTAL CURRENT ASSETS 27,716 106,046
----------- -----------
PROPERTY AND EQUIPMENT - at cost, net 2,595 12,104
SECURITY DEPOSIT 4,627 4,627
----------- -----------
$ 34,938 $ 122,777
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 2,564 $ --
Accrued expenses and other current liabilities 8,412 14,000
----------- -----------
TOTAL CURRENT LIABILITIES 10,976 14,000
COMMITMENTS AND CONTINGENCIES -- --
SHAREHOLDERS' EQUITY:
Common stock, par value $.001 - authorized 50,000,000
shares, issued and outstanding 10,000,000 at December 31, 10,000 20,000
1998 and 20,000,000 at September 30, 1999
Additional paid-in capital 132,192 1,591,504
Less: Common stock subscriptions receivable -- (742,150)
Deficit accumulated during the development stage (118,230) (760,577)
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 23,962 108,777
----------- -----------
$ 34,938 $ 122,777
=========== ===========
</TABLE>
See notes to the consolidated financial statements
F-3
<PAGE>
IN-SPORTS INTERNATIONAL, INC. AND SUBSIDIARY
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Cumulative
From January 27, During The
1998 (inception) to Nine Months Ended Development Stage
December 31, September 30, (January 27, 1998 to
1998 1999 September 30, 1999)
------------------- ----------------- --------------------
(unaudited) (unaudited)
<S> <C> <C> <C>
NET SALES $ 23,216 $ 39,342 $ 62,558
COST OF GOODS SOLD 48,785 60,230 109,015
------------ ------------ ------------
GROSS LOSS (25,569) (20,888) (46,457)
SELLING, GENERAL AND ADMINISTRATIVE 92,661 171,459 264,120
------------ ------------ ------------
LOSS FROM OPERATIONS (118,230) (192,347) (310,577)
COSTS OF START-UP ACTIVITY -- (450,000) (450,000)
------------ ------------ ------------
NET LOSS $ (118,230) $ (642,347) $ (760,577)
============ ============ ============
LOSS PER COMMON SHARE, BASIC AND DILUTED $ (0.01) $ (0.04) $ (0.06)
============ ============ ============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING, BASIC AND DILUTED 9,005,900 16,556,777 12,374,183
============ ============ ============
</TABLE>
See notes to the consolidated financial statements
F-4
<PAGE>
IN-SPORTS INTERNATIONAL, INC. AND SUBSIDIARY
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional Common Stock During the Total
------------------------ Paid-in Subscriptions Development Shareholders'
Shares Amount Capital Receivable Stage Equity
----------- ----------- ----------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 27, 1998 (INCEPTION) 1,000 $ 1,000 $ -- $ -- $ (1,000) $ --
Change from no par value to $.001 -- (999) 999 -- -- --
Stock split 1,000-for-1 999,000 999 (999) -- -- --
Issuance of common stock 9,000,000 9,000 -- -- -- 9,000
Recapitalization adjustment -- -- (7,500) -- 1,000 (6,500)
Direct cost of reverse acquisition -- -- (36,500) -- -- (36,500)
Contribution of capital -- -- 176,192 -- -- 176,192
Net loss -- -- -- -- (118,230) (118,230)
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, DECEMBER 31, 1998 10,000,000 $ 10,000 $ 132,192 $ -- (118,230) $ 23,962
Issuance of common stock (unaudited) 10,000,000 10,000 990,000 (742,150) -- 257,850
Contribution of capital (unaudited) -- -- 469,312 -- -- 469,312
Net loss (unaudited) -- -- -- -- (642,347) (642,347)
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, SEPTEMBER 30, 1999 (unaudited) 20,000,000 $ 20,000 $ 1,591,504 $ (742,150) $ (760,577) $ 108,777
=========== =========== =========== =========== =========== ===========
</TABLE>
See notes to the consolidated financial statements
F-5
<PAGE>
IN-SPORTS INTERNATIONAL, INC. AND SUBSIDIARY
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Cumulative
From January 27, During The
1998 (inception) to Nine Months Ended Development Stage
December 31, September 30, (January 27, 1998 to
1998 1999 September 30, 1999)
--------- --------- ---------------------
(unaudited) (unaudited)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(118,230) $(642,347) $(760,577)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation 519 1,094 1,613
Non-monetary cost of start-up activity -- 400,000 400,000
Changes in operating assets and liabilities:
Due from vendor -- (82,500) (82,500)
Prepaid expense and other current asset (22,500) 1,500 (21,000)
Accounts payable 2,564 (2,564) --
Accrued expenses and other current liabilities 8,412 5,588 14,000
--------- --------- ---------
Net cash used in operating activities (129,235) (319,229) (448,464)
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Loans receivable-shareholder (4,662) 4,662 --
Purchase of property and equipment (3,114) (10,603) (13,717)
Security deposit (4,627) -- (4,627)
--------- --------- ---------
Net cash used in investing activities (12,403) (5,941) (18,344)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Contribution of capital 178,692 69,312 248,004
Direct cost of reverse acquisition (36,500) -- (36,500)
Proceeds from issuance of common stock -- 257,850 257,850
--------- --------- ---------
Net cash provided by financing activities 142,192 327,162 469,354
--------- --------- ---------
NET INCREASE IN CASH 554 1,992 2,546
CASH AT BEGINNING OF PERIOD -- 554 --
--------- --------- ---------
CASH AT END OF PERIOD $ 554 $ 2,546 $ 2,546
========= ========= =========
Supplemental Disclosure of Cash Flow Information
Cash paid during the period:
Interest $ -- $ -- $ --
========= ========= =========
Income Taxes $ -- $ -- $ --
========= ========= =========
Supplemental Disclosure of Non-Cash Flow Investing and Financing Activities
Issuance of common stock from reverse acquisition $ 9,000 $ -- $ 9,000
========= ========= =========
Issuance of common stock for stock subscription receivable $ -- $ 742,150 $ 742,150
========= ========= =========
</TABLE>
See notes to the consolidated financial statements
F-6
<PAGE>
IN-SPORTS INTERNATIONAL, INC. AND SUBSIDIARY
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information at September 30, 1999 and the nine months
ended September 30, 1999 is unaudited)
1. ORGANIZATION
In-Sports International, Inc. ("In-Sports"), as a result of the reverse
acquisition with Perma Grass Corporation ("Perma"), is engaged in the
business of distributing and installing artificial grass surfaces for
commercial, athletic, residential and child care applications (sometimes
known as "artificial turf"). The principal markets for In-Sports's
products and services is the Northeastern United States.
In-Sports was incorporated on March 10, 1994 in the state of Delaware as
Beta Acquisition Corp. ("Beta") and on September 7, 1995 Beta changed its
name to In-Sports. In-Sports, since its inception, has been in the
development stage in accordance with Statement of Financial Accounting
Standards No.7. Perma was incorporated on January 27, 1998 in the state of
New Jersey.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Reverse Acquisition
In December, 1998, In-Sports acquired 100% of Perma by issuing
9,000,000 shares for all of the shares of Perma. This exchange has
been accounted for as a reverse acquisition, under the purchase
method of accounting, since the former shareholder of Perma owned a
majority of the outstanding stock of In-Sports after the
acquisition. Accordingly, the combination of the two companies is
recorded as recapitalization of shareholders' equity of Perma,
pursuant to which Perma is treated as the continuing entity for
accounting purposes and the historical financial statements
presented are those of Perma. Pro-forma information has not been
presented since the transaction was deemed a capital stock
transaction rather than a business combination.
b. Basis of Presentation
The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going concern.
The Company, since its inception, has incurred net losses of
approximately $761,000 and negative cash flows from operations of
$448,000, which raise substantial doubt about its ability to
continue as a going concern. The Company's ability to continue as a
going concern is dependent upon profitable operations and support
from shareholders. Managements' plans in regard to this matter are
to target the athletic market for secondary schools and colleges as
well as the residential and commercial market were it believes its
best growth opportunities exists for the Company's products and
services. In addition, in April 1999, the Company sold $1,000,000 of
restricted
F-7
<PAGE>
IN-SPORTS INTERNATIONAL, INC. AND SUBSIDIARY
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information at September 30, 1999 and the nine months
ended September 30, 1999 is unaudited)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
common stock (see Note 9(c)). Unless the Company can generate
positive cash flows from operations and raise additional capital,
the Company may be unable to continue in existence. The consolidated
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the
amounts and classification of liabilities that might be necessary
should the Company be unable to continue in existence.
c. Principles of Consolidation
The accompanying consolidated financial statements include the
accounts of the Company and its wholly owned subsidiary, Perma
(hereinafter collectively referred to as the "Company"). All
significant intercompany transactions and balances have been
eliminated in consolidation.
d. Interim Financial Statements
The accompanying consolidated financial statements (unaudited) for
the nine months ended September 31, 1999, have been prepared in
accordance with generally accepted accounting principles for the
interim financial information and, in the opinion of the Company,
include all adjustments, consisting of normal recurring adjustments,
necessary for a fair presentation thereof.
e. Property and Equipment
Property and equipment are recorded at cost. Depreciation is
provided on the straight-line method based upon the estimated useful
lives of the respective assets. Property and equipment are being
depreciated over a period of five years. Maintenance, repairs and
minor renewals are charged to operations as incurred, whereas the
cost of significant betterments is capitalized. Upon the sale or
retirement of property and equipment, the related costs and
accumulated depreciation are eliminated from the accounts and gains
or losses are reflected in operations.
f. Revenue Recognition
Sales are recognized upon completion of installation and approval by
the customer. Each installation requires an initial payment that is
classified as customer deposits.
F-8
<PAGE>
IN-SPORTS INTERNATIONAL, INC. AND SUBSIDIARY
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information at September 30, 1999 and the nine months
ended September 30, 1999 is unaudited)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Allowances for estimated bad debts, sales allowances and discounts
are provided when sales are recorded.
g. Advertising
The Company expenses the cost of advertising the first time the
advertising takes place. Advertising expense charged to operations
for the period January 27,1998 (inception) through December 31, 1998
amounted to approximately $2,400.
h. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
i. Fair Value of Financial Instruments
The Company's financial instruments consist primarily cash, loan
receivable, other current assets, trade payables and accrued
expenses which approximated fair value as of December 31, 1998.
j. Loss Per Share
The Company has adopted the provisions of Financial Accounting
Standard No. 128, "Earnings per share", which became effective for
financial statements for fiscal years ending after December 15,
1997. This statement requires that the Company report basic and
diluted earnings (loss) per share for all periods reported. Basic
net income (loss) per share is computed by dividing net income
(loss) by the weighted average number of common shares outstanding
for the period. Diluted net income (loss) per share is computed by
dividing net income (loss) by the weighted average number of common
shares outstanding for the period, adjusted for the dilutive effect
of common stock equivalents, if any.
For all periods presented, diluted net loss per share was the same
as basic net loss per share since the Company had no dilutive
securities at October 31, 1999.
F-9
<PAGE>
IN-SPORTS INTERNATIONAL, INC. AND SUBSIDIARY
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information at September 30, 1999 and the nine months
ended September 30, 1999 is unaudited)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Concluded)
k. Recent Accounting Pronouncements
In April 1998, the AICPA issued SOP 98-5, "Reporting on the Cost of
Start-Up Activities." The statement requires costs of start-up
activities and organization costs to be expensed as incurred. The
Company has adopted SOP 98-5 for the year ended December 31, 1998
(see Note 10 (a)).
In June 1998, the FASB issued SFAS No. 133 "Accounting for
Derivative instruments and Hedging Activities." SFAS No. 133 is
effective for all fiscal periods beginning after June 15, 1999. SFAS
No. 133 requires that all derivative instruments be recorded on the
balance sheet at their fair value. Changes in fair value of
derivatives are recorded each period in current earnings or other
comprehensive income, depending on whether a derivative is designed
as part of a hedge transaction and, if it is, the type of hedge
transaction. The Company does not expect the adoption of SFAS No.
133 to have any impact on the financial statements as they do not
currently hold any derivative instruments nor have they held any in
the past.
3. CONCENTRATION OF CREDIT RISK
The Company maintains cash balances at several commercial banks. Accounts
at these financial institutions are insured by the Federal Deposit
Insurance Corporation up to $100,000.
4. LOAN RECEIVABLE - SHAREHOLDER
The loan receivable of $4,662 is due from Patrick McLaren, a majority
shareholder and Chief Executive Officer of the Company, and is
non-interest bearing, uncollateralized and has no specific due date for
repayment.
5. DUE FROM VENDOR
At September 30, 1999, the amount of $82,500 is due from Avery Sports
Turf, Inc. and is non- interest bearing, uncollateralized and will be
repaid in the ordinary course of business (See Note 10(b)).
F-10
<PAGE>
IN-SPORTS INTERNATIONAL, INC. AND SUBSIDIARY
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information at September 30, 1999 and the nine months
ended September 30, 1999 is unaudited)
6. PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
December 31, September 30,
1998 1999
------------ -------------
(unaudited)
Computer equipment $ 3,114 $ 3,114
Office equipment -- 6,394
Manufacturing equipment -- 3,209
Transportation equipment -- 1,000
-------- --------
3,114 13,717
Less: accumulated depreciation (519) (1,613)
-------- --------
$ 2,595 $ 12,104
======== ========
7. INCOME TAXES
As of December 31, 1998, the Company has available unused federal net
operating loss carryforwards of approximately $118,000 that may be applied
against future taxable income and that expire in 2018. The Company has
fully reserved the resulting deferred tax asset because the likelihood of
realization of these benefits cannot be presently determined.
December 31,
1998
--------
Deferred tax assets:
Net operating loss carryforward $ 40,000
Valuation allowance (40,000)
--------
Net deferred tax asset $ --
========
F-11
<PAGE>
IN-SPORTS INTERNATIONAL, INC. AND SUBSIDIARY
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information at September 30, 1999 and the nine months
ended September 30, 1999 is unaudited)
8. COMMITMENTS AND CONTINGENCIES
The Company lease their office facility under an operating lease which
expires on March 31, 2001. The future minimum lease payments, excluding
escalation charges, are as follows:
Year Ended December 31,
1999 $ 25,600
2000 25,600
2001 6,400
-----------
$ 57,600
===========
Total rent expense charged to operations for the period from January
27,1998 (inception) through December 31, 1998 amounted to approximately
$19,000 and for the nine months ended September 30, 1999 amounted to
approximately $23,000.
9. SHAREHOLDERS' EQUITY
a. In August, 1998, The Board of Directors of In-Sports amended its
articles of incorporation to increase the number of authorized
common stock from 1,500 shares to 50,000,000 shares and change from
no par value to $.001 par value. The board of directors also
approved a 1,000-to-1 common stock split. All per share data in
these consolidated financial statements reflect the stock split.
b. On December 31, 1998, Patrick McLaren, a controlling shareholder and
Chief Executive Officer of the Company, contributed approximately
$176,000 to capital.
c. In connection with a private placement offering in April, 1999, the
Company sold 10,000,000 shares of common stock at $.10 per share for
$10,000 in cash and $990,000 in subscription notes receivable. As of
September 30, 1999, the Company has collected $257,850 of the
subscription notes receiveable.
10. START-UP ACTIVITY AND ACQUISITION
a. In February 1999, Patrick McLaren, a controlling shareholder and
Chief Executive Officer, gave 250,000 shares of his restricted
common stock to Joseph Caravella, the former shareholder of Ed-Car
Construction, LLC, for the rights to the "Ed-Car Corporation" name
and a performance bond. The bond establishes Ed-Car as a fully
F-12
<PAGE>
IN-SPORTS INTERNATIONAL, INC. AND SUBSIDIARY
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information at September 30, 1999 and the nine months
ended September 30, 1999 is unaudited)
10. START-UP ACTIVITY AND ACQUISITION (Continued)
accredited and qualified bidder to meet the requirements to be
awarded certain artificial turf installation projects in the States
of New York and New Jersey. The shares were valued at $1.60 on the
date of the transaction, as described above, based on a 20%
marketability discount from the traded market price.
Pursuant to the agreement the Company has provided $50,000, as
working capital, to Ed-Car in order to increase the value of their
performance bond from $1,000,000 to $2,000,000. In addition, the
Company has agreed to enter into an employment contract with Joseph
Caravella to act as the Chief Executive Officer of Ed-Car and elect
him to the Company's Board of directors.
In addition, the Company plans to form Ed-Car Construction, Inc.
("Ed-Car"), as a wholly owned subsidiary, for the exclusive purpose
of installing artificial turf and related construction projects.
The Company has recorded the total of $450,000 from the issuance of
common stock and the payment of working capital funds as start-up
activity costs, in accordance with SOP 98-5, "Reporting on the Cost
of Start-Up Activities," in the accompanying statement of
operations.
b. In November 1999, the Company signed a non-binding letter of intent
to acquire Avery Sports Turf, Inc. ("Avery"), a manufacturer of
artificial turf, in exchange for $300,000 in cash and 500,000 shares
of restricted common stock for all of the common stock of Avery.
Pursuant to this non-binding letter of intent the Company has
advanced $200,000 in cash and issued 500,000 shares of common stock
to George Avery, the controlling shareholder of Avery, as a
refundable deposit toward full consideration for the acquisition, if
consummated. In addition, the Company will conduct a due diligence
investigation of Avery and upon satisfactory completion of the due
diligence, the Company and Avery will execute a final document and
set a closing date for this transaction, which will be no earlier
than March 2000.
F-13
<PAGE>
Part III
Item 1. Exhibit Index
Exhibit No.
(3) Articles of Incorporation and Bylaws
3.1 Articles of Incorporation of In-Sports International, Inc.
3.2 Articles of Incorporation of The PermaGrass Corporation
3.3 Bylaws of In-Sports International, Inc.
(10) Material Contracts
10.1 Letter of Intent for Acquisition of Avery Sports Turf
10.2 Assignment of Name and Release of Employee
10.3 Lease for 377 Route 17 South
(21) Subsidiaries of the Registrant
21.1 Subsidiaries of the Registrant
(27) Financial Data Schedule
27.1 Financial Data Schedule
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
Date: February 4, 2000 IN-SPORTS INTERNATIONAL, INC.
By: /s/ SAM SERRITELLA
-----------------------------
Sam Serritella, President
2
EXHIBIT 3.1
State of Delaware
OFFICE OF THE SECRETARY OF STATE
--------------------------------
Page 1
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 "BETA ACQUISITION CORP.", FILED IN THIS OFFICE ON THE TENTH
DAY OF MARCH, A.D. 1994, AT 9 O'CLOCK A.M.
/s/ EDWARD J. FREEL
-------------------
EDWARD J. FREEL,
Secretary of State
2384854 8100 AUTHENTICATION: 9237627
981306158 DATE: 8/6/98
3
<PAGE>
STATE OF DELAWARE
CERTIFICATE FOR RENEWAL
AND REVIVAL OF CHARTER
In-Sports International, Inc., a corporation organized under the laws of
Delaware, the charter of which was voided for non-payment of taxes, now desires
to procure a restoration, renewal and revival of its charter, and hereby
certifies as follows:
1. The name of the corporation is: In-Sports International, Inc.
2. Its registered office in the State of Delaware is located at 2707
Landsdowne Drive, City of Wilmington 19810, County of New Castle the name
and address of its registered agent is: Christopher Flannery, Esquire,
2707 Landsdowne Drive, Wilmington, DE 19810.
3. The date of filing of the original Certificate of Incorporation in
Delaware was March 10, 1994.
4. The date when restoration, renewal, and revival of the charter of this
company is to commence is the 28th day of February, same being prior to
the date of the expiration of the charter. This renewal and revival of the
charter of this corporation is to be perpetual.
5. This corporation was duly organized and carried on the business authorized
by its charter until the 1st day of March A.D. 1998, at which time its
charter become inoperative and void for non-payment of taxes and this
certificate for renewal ad revival is filed by authority of the duly
elected directors of the corporation in accordance with the laws of the
State of Delaware.
IN TESTIMONY WHEREOF, and in compliance with the provisions of Section 312
of the General Corporation Law of the State of Delaware, as amended, providing
for the renewal, extension and restoration of charters, MICHAEL E. LEWIS, the
last and acting authorized officer hereunto set his/her hand to this certificate
this 4th day of August, 1998.
By: MICHAEL E. LEWIS
--------------------
Name: Michael E. Lewis
Title: President
4
<PAGE>
ARTICLES OF AMENDMENT
OF
IN-SPORTS INTERNATIONAL, INC.
The undersigned, being the sole director and president of In-Sports
International, Inc., does hereby amend its Articles of Incorporation as follows:
ARTICLE I
CORPORATE NAME
The name of the Corporation shall be In-Sports International, Inc.
ARTICLE II
PURPOSE
The Corporation shall be organized for any and all purposes authorized
under the laws of the State of Delaware.
ARTICLE III
PERIOD OF EXISTENCE
The period during which the Corporation shall continue perpetual.
ARTICLE IV
SHARES
The capital stock of this Corporation shall consist of 50,000,000 shares
of common stock, $0.001 par value.
ARTICLE V
PLACE OF BUSINESS
The address of the principal place of business of this Corporation in the
State of Delaware shall be 2707 Landsdowne Drive, Wilmington, DE 19810. The
Board of Directors may at any time and from time move the principal office of
this corporation.
ARTICLE VI
DIRECTORS AND OFFICERS
The business of this Corporation shall be managed by its Board of
Directors. The number of such directors shall not be less than one (1) and,
subject to such minimum may be increased or decreased from time to time in the
manner provided in the By-Laws.
5
<PAGE>
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
================================================================================
Beta Acquisition Corp., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of Beta Acquisition Corp.
resolutions were duly adopted setting forth a proposed amendment of the
Certificate of Incorporation of said corporation, declaring said amendment to be
advisable and calling a meeting of the stockholders of said corporation for
consideration thereof. The resolution setting forth the proposed amendment is as
follows:
RESOLVED, that the Certificate of Incorporation of this corporation be amended
by changing the Article thereof number " 1 (one) " so that, as amended, said
Article shall be and read as follows:
"1. The name of the Corporation is In-Sports International, Inc."
SECOND: That thereafter, pursuant to resolution of its Board of Directors, a
special meeting of the stockholders of said corporation was duly called and
held, upon notice in accordance with Section 222 of the General Corporation Law
of the State of Delaware at which meeting the number of shares as required by
statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.
FOURTH: That the capital of said corporation shall not be reduced under or by
reason of said amendment.
IN WITNESS WHEREOF, said Beta Acquisition Corp. has caused this certificate to
be singed by Michael E. Lewis , its President, and Michael E. Lewis , its
Secretary, this 15th day of August, 1995.
Beta Acquisition Corp.
By: Michael E. Lewis
----------------------
President
Attest: Michael E. Lewis
Secretary
State of Delaware
Secretary of State
Division of Corporations
6
<PAGE>
Filed 01:30 PM 9/7/1995
950203591 - 2384858
7
<PAGE>
CERTIFICATE OF INCORPORATION
OF
BETA ACQUISITION CORP.
1. The name of the Corporation is Beta Acquisition Corp.
2. The address of the corporation's registered office in the State of
Delaware is 15 E. North Street, in the City of Dover, County of Kent
19901, and the name of its registered agent at such address is
Incorporating Services, Ltd.
3. The purpose of the corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law
of the State of Delaware.
4. The total number of shares of stock which the corporation has authority to
issue is one thousand five hundred (1,500) shares of common stock without
par value.
5. No director of the corporation shall be liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty
of loyalty to the corporation or its stockholders, (ii) the acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the General
Corporation Law, or (iv) for any transaction from which the director
derived an improper personal benefit.
6. The board of directors of the corporation has the power to adopt, amend or
repeal the by-laws of the corporation.
7. The name of the incorporation is Nell J. Mohn and her mailing address is
3400 Marine Midland Center, Buffalo, New York 14203.
I, the undersigned incorporator, for the purpose of forming a corporation
pursuant to the General Corporation Law of the State of Delaware, hereby make
this Certificate of Incorporation this 10th day of March, 1994, and certify that
it is my act and deed and that the facts herein are true.
/s/ NELL J. MOHN
--------------------------
NELL J. MOHN, Incorporator
8
EXHIBIT 3.2
New Jersey Department of State
Division of Commercial Recording
Certificate of Incorporation, Profit
(Title 14A:2-7 New Jersey Business Corporation Act
For Use by Domestic Profit Corporation)
This is to Certify that, there is hereby organized a corporation under and by
virtue of the above noted statute of the New Jersey Statues.
8. Name of Corporation: The PermaGrass Corporation.
9. The purpose for which this corporation is organized is (are) to engage in
any activity within the purposes for which corporations may be organized
under NJSA 14A 1-1 et seq:
10. Registered Agent: Patrick McLaren.
11. Registered Office: 377 Route 17 South, Hasbrouck Heights, NJ 07604.
12. The aggregate number of shares which the corporation shall have
authority to issue is: 2,500 shares.
13. If applicable, set forth the designation of each class and series of
shares, the number in each, and a statement of the relative rights,
preferences and limitations. N/A
14. If applicable, set forth a statement of any authority vested in the board
to divide the shares into classes or series or both and to determine or
change their designation number, relative rights, preferences and
limitations.
15. The first Board of Directors shall consist of 3 Director(s) (minimum of
one).
Name Street Address City State Zip
Patrick McLaren 377 Route 17 South Hasbrouck Heights NJ 07604
Joseph Scibetta 377 Route 17 South Hasbrouck Heights NJ 07604
Michael D. Faverta 377 Route 17 South Hasbrouck Heights NJ 07604
16. Name and Address of Incorporator(s):
Name Street Address City State Zip
Bruce B. Hubbard 77 East John Street Hicksville NY 11801
17. The duration of the corporation is: Perpetual.
18. Other provisions:
In Witness whereof, each individual incorporator being over eighteen years
of age has signed this certificate, or if the incorporator is a corporation has
caused this Certificate to be signed by its duly authorized officers this 27th
day of January, 1998.
Signature: /s/ BRUCE B. HUBBARD
--------------------
9
EXHIBIT 3.3
BYLAWS
OF
IN-SPORTS INTERNATIONAL, INC.
(a Delaware corporation)
--------------------
ARTICLE I
STOCKHOLDERS
1. CERTIFICATES REPRESENTING STOCK. Certificates representing stock in the
corporation shall be signed by, or in the name of, the corporation by the
Chairman or Vice-Chairman of the Board of Directors, if any, or by the President
or a Vice President and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary of the corporation. Any or all the
signatures on any such certificate may be a facsimile. In case any officer,
transfer agent, or registrar who has signed or whose facsimile signature has
been placed upon a certificate shall have ceased to be such officer, transfer
agent, or registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if he were such officer, transfer agent, or
registrar at the date of issue.
Whenever the corporation shall be authorized to issue more than one class
of stock or more than one series of any class of stock, and whenever the
corporation shall issue any shares of its stock as partly paid stock, the
certificates representing shares of any such class or series or of any such
partly paid stock shall set forth thereon the statements prescribed by the
General Corporation Law. Any restrictions on the transfer or registration of
transfer of any shares of stock of any class or series shall be noted
conspicuously on the certificate representing such shares.
The corporation may issue a new certificate of stock or uncertificated
shares in place of any certificate theretofore issued by it, alleged to have
been lost, stolen, or destroyed, and the Board of Directors may require the
owner of the lost, stolen, or destroyed certificate, or his legal
representative, to give the corporation a bond sufficient to indemnify the
corporation against any claim that may be made against it on account of the
alleged loss, theft, or destruction of any such certificate or the issuance of
any such new certificate or uncertificated shares.
2. UNCERTIFICATED SHARES. Subject to any conditions imposed by the General
Corporation Law, the Board of Directors of the corporation may provide by
resolution
10
<PAGE>
or resolutions that some or all of any or all classes or series of the stock of
the corporation shall be uncertificated shares. Within a reasonable time after
the issuance or transfer of any uncertificated shares, the corporation shall
send to the registered owner thereof any written notice prescribed by the
General Corporation Law.
3. FRACTIONAL SHARE INTERESTS. The corporation may, but shall not be
required to, issue fractions of a share. If the corporation does not issue
fractions of a share, it shall (1) arrange for the disposition of fractional
interests by those entitled thereto, (2) pay in cash the fair value of fractions
of a share as of the time when those entitled to receive such fractions are
determined, or (3) issue scrip or warrants in registered form (either
represented by a certificate or uncertificated) or bearer form (represented by a
certificate) which shall entitle the holder to receive a full share upon the
surrender of such scrip or warrants aggregating a full share. A certificate for
a fractional share or an uncertificated fractional share shall, but scrip or
warrants shall not unless otherwise provided therein, entitle the holder to
exercise voting rights, to receive dividends thereon, and to participate in any
of the assets of the corporation in the event of liquidation. The Board of
Directors may cause scrip or warrants to be issued subject to the conditions
that they shall become void if not exchanged for certificates representing the
full shares or uncertificated full shares before a specified date, or subject to
the conditions that the shares for which scrip or warrants are exchangeable may
be sold by the corporation and the proceeds thereof distributed to the holders
of scrip or warrants, or subject to any other conditions which the Board of
Directors may impose.
4. STOCK TRANSFERS. Upon compliance with provisions restricting the
transfer or registration of transfer of shares of stock, if any, transfers or
registration of transfers of shares of stock of the corporation shall be made
only on the stock ledger of the corporation by the registered holder thereof, or
by his attorney thereunto authorized by power of attorney duly executed and
filed with the Secretary of the corporation or with a transfer agent or a
registrar, if any, and, in the case of shares represented by certificates, on
surrender of the certificate or certificates for such shares of stock properly
endorsed and the payment of all taxes due thereon.
5. RECORD DATE FOR STOCKHOLDERS. 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, the Board of Directors may fix a record
date, which record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board of Directors, and which record
date shall not be more than sixty nor less than ten days before the date of such
meeting. If no record date is fixed by the Board of Directors, the record date
for determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held. A determination of
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.
In order that the corporation may determine the stockholders entitled to consent
to corporate action in writing without a meeting, the Board of Directors may fix
a record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Directors, and
which date
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shall not be more than ten days after the date upon which the resolution fixing
the record date is adopted by the Board of Directors. If no record date has been
fixed by the Board of Directors, the record date for determining the
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board of Directors is required by the
General Corporation Law, shall be the first date on which a signed written
consent setting forth the action taken or proposed to be taken is delivered to
the corporation by delivery to its registered office in the State of Delaware,
its principal place of business, or an officer or agent of the corporation
having custody of the book in which proceedings of meetings of stockholders are
recorded. Delivery made to the corporation's registered office shall be by hand
or by certified or registered mail, return receipt requested. If no record date
has been fixed by the Board of Directors and prior action by the Board of
Directors is required by the General Corporation Law, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting shall be at the close of business on the day on which the
Board of Directors adopts the resolution taking such prior action. In order that
the corporation may determine the stockholders entitled to receive payment of
any dividend or other distribution or allotment of any rights or the
stockholders 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 a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than sixty days prior to such action. If
no record date is fixed by the Board of Directors, the record date for
determining stockholders for any such purpose shall be at the close of business
on the day on which the Board of Directors adopts the resolution relating
thereto.
6. MEANING OF CERTAIN TERMS. As used herein in respect of the right to
notice of a meeting of stockholders or a waiver thereof or to participate or
vote thereat or to consent or dissent in writing in lieu of a meeting, as the
case may be, the term "share" or "shares" or "share of stock" or "shares of
stock" or "stockholder" or "stockholders" refers to an outstanding share or
shares of stock and to a holder or holders of record of outstanding shares of
stock when the corporation is authorized to issue only one class of shares of
stock, and said reference is also intended to include any outstanding share or
shares of stock and any holder or holders of record of outstanding shares of
stock of any class upon which or upon whom the certificate of incorporation
confers such rights where there are two or more classes or series of shares of
stock or upon which or upon whom the General Corporation Law confers such rights
notwithstanding that the certificate of incorporation may provide for more than
one class or series of shares of stock, one or more of which are limited or
denied such rights thereunder; provided, however, that no such right shall vest
in the event of an increase or a decrease in the authorized number of shares of
stock of any class or series which is otherwise denied voting rights under the
provisions of the certificate of incorporation, except as any provision of law
may otherwise require.
7. STOCKHOLDER MEETINGS.
- TIME. The annual meeting shall be held on the date and at the time
fixed, from time to time, by the directors, provided, that the first annual
meeting shall be held on a date within thirteen months after the organization of
the corporation and each successive annual
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meeting shall be held on a date within thirteen months after the date of the
preceding annual meeting. A special meeting shall be held on the date and at the
time fixed by the directors.
- PLACE. Annual meetings and special meetings shall be held at such place,
within or without the State of Delaware, as the directors may, from time to
time, fix. Whenever the directors shall fail to fix such place, the meeting
shall be held at the registered office of the corporation in the State of
Delaware.
- CALL. Annual meetings and special meetings may be called by the
directors or by any officer instructed by the directors to call the meeting.
- NOTICE OR WAIVER OF NOTICE. Written notice of all meetings shall be
given, stating the place, date, and hour of the meeting and stating the place
within the city or other municipality or community at which the list of
stockholders of the corporation may be examined. The notice of an annual meeting
shall state that the meeting is called for the election of directors and for the
transaction of other business which may properly come before the meeting, and
shall (if any other action which could be taken at a special meeting is to be
taken at such annual meeting) state the purpose or purposes. The notice of a
special meeting shall in all instances state the purpose or purposes for which
the meeting is called. The notice of any meeting shall also include, or be
accompanied by, any additional statements, information, or documents prescribed
by the General Corporation Law. Except as otherwise provided by the General
Corporation Law, a copy of the notice of any meeting shall be given, personally
or by mail, not less than ten days nor more than sixty days before the date of
the meeting, unless the lapse of the prescribed period of time shall have been
waived, and directed to each stockholder at his record address or at such other
address which he may have furnished by request in writing to the Secretary of
the corporation. Notice by mail shall be deemed to be given when deposited, with
postage thereon prepaid, in the United States Mail. If a meeting is adjourned to
another time, not more than thirty days hence, and/or to another place, and if
an announcement of the adjourned time and/or place is made at the meeting, it
shall not be necessary to give notice of the adjourned meeting unless the
directors, after adjournment, fix a new record date for the adjourned meeting.
Notice need not be given to any stockholder who submits a written waiver of
notice signed by him before or after the time stated therein. Attendance of a
stockholder at a meeting of stockholders shall constitute a waiver of notice of
such meeting, except when the stockholder attends the meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the stockholders need be specified in any written waiver of notice.
- STOCKHOLDER LIST. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders, arranged in alphabetical
order, and showing the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list 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 or other municipality or community where the
meeting is to be held, which place
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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. The stock ledger shall be the only
evidence as to who are the stockholders entitled to examine the stock ledger,
the list required by this section or the books of the corporation, or to vote at
any meeting of stockholders.
- CONDUCT OF MEETING. Meetings of the stockholders shall be presided over
by one of the following officers in the order of seniority and if present and
acting - the Chairman of the Board, if any, the Vice-Chairman of the Board, if
any, the President, a Vice President, or, if none of the foregoing is in office
and present and acting, by a chairman to be chosen by the stockholders. The
Secretary of the corporation, or in his absence, an Assistant Secretary, shall
act as secretary of every meeting, but if neither the Secretary nor an Assistant
Secretary is present the Chairman of the meeting shall appoint a secretary of
the meeting.
- PROXY REPRESENTATION. Every stockholder may authorize another person or
persons to act for him by proxy in all matters in which a stockholder is
entitled to participate, whether by waiving notice of any meeting, voting or
participating at a meeting, or expressing consent or dissent without a meeting.
Every proxy must be signed by the stockholder or by his attorney-in-fact. No
proxy shall be voted or acted upon after three years from its date unless such
proxy provides for a longer period. A duly executed proxy shall be irrevocable
if it states that it is irrevocable and, if, and only as long as, it is coupled
with an interest sufficient in law to support an irrevocable power. A proxy may
be made irrevocable regardless of whether the interest with which it is coupled
is an interest in the stock itself or an interest in the corporation generally.
- INSPECTORS. The directors, in advance of any meeting, may, but need not,
appoint one or more inspectors of election to act at the meeting or any
adjournment thereof. If an inspector or inspectors are not appointed, the person
presiding at the meeting may, but need not, appoint one or more inspectors. In
case any person who may be appointed as an inspector fails to appear or act, the
vacancy may be filled by appointment made by the directors in advance of the
meeting or at the meeting by the person presiding thereat. Each inspector, if
any, before entering upon the discharge of his duties, shall take and sign an
oath faithfully to execute the duties of inspectors at such meeting with strict
impartiality and according to the best of his ability. The inspectors, if any,
shall determine the number of shares of stock outstanding and the voting power
of each, the shares of stock represented at the meeting, the existence of a
quorum, the validity and effect of proxies, and shall receive votes, ballots, or
consents, hear and determine all challenges and questions arising in connection
with the right to vote, count and tabulate all votes, ballots, or consents,
determine the result, and do such acts as are proper to conduct the election or
vote with fairness to all stockholders. On request of the person presiding at
the meeting, the inspector or inspectors, if any, shall make a report in writing
of any challenge, question, or matter determined by him or them and execute a
certificate of any fact found by him or them. Except as otherwise required by
subsection (e) of Section 231 of the General Corporation Law, the provisions of
that Section shall not apply to the corporation.
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- QUORUM. The holders of a majority of the outstanding shares of stock
shall constitute a quorum at a meeting of stockholders for the transaction of
any business. The stockholders present may adjourn the meeting despite the
absence of a quorum.
- VOTING. Each share of stock shall entitle the holders thereof to one
vote. Directors shall be elected by a plurality of the votes of the shares
present in person or represented by proxy at the meeting and entitled to vote on
the election of directors. Any other action shall be authorized by a majority of
the votes cast except where the General Corporation Law prescribes a different
percentage of votes and/or a different exercise of voting power, and except as
may be otherwise prescribed by the provisions of the certificate of
incorporation and these Bylaws. In the election of directors, and for any other
action, voting need not be by ballot.
8. STOCKHOLDER ACTION WITHOUT MEETINGS. Any action required by the General
Corporation Law to be taken at any annual or special meeting of stockholders, or
any action which may be taken at any annual or special meeting of stockholders,
may be taken without a meeting, without prior notice and without a vote, if a
consent in writing, setting 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.
Action taken pursuant to this paragraph shall be subject to the provisions of
Section 228 of the General Corporation Law.
ARTICLE II
DIRECTORS
1. FUNCTIONS AND DEFINITION. The business and affairs of the corporation
shall be managed by or under the direction of the Board of Directors of the
corporation. The Board of Directors shall have the authority to fix the
compensation of the members thereof. The use of the phrase "whole board" herein
refers to the total number of directors which the corporation would have if
there were no vacancies.
2. QUALIFICATIONS AND NUMBER. A director need not be a stockholder, a
citizen of the United States, or a resident of the State of Delaware. The
initial Board of Directors shall consist of 2 persons. Thereafter the number of
directors constituting the whole board shall be at least one. Subject to the
foregoing limitation and except for the first Board of Directors, such number
may be fixed from time to time by action of the stockholders or of the
directors, or, if the number is not fixed, the number shall be one. The number
of directors may be increased or decreased by action of the stockholders or of
the directors.
3. ELECTION AND TERM. The first Board of Directors, unless the members
thereof shall have been named in the certificate of incorporation, shall be
elected by the incorporator or incorporators and shall hold office until the
first annual meeting of stockholders and until their successors are elected and
qualified or until their earlier resignation or removal.
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Any director may resign at any time upon written notice to the corporation.
Thereafter, directors who are elected at an annual meeting of stockholders, and
directors who are elected in the interim to fill vacancies and newly created
directorships, shall hold office until the next annual meeting of stockholders
and until their successors are elected and qualified or until their earlier
resignation or removal. Except as the General Corporation Law may otherwise
require, in the interim between annual meetings of stockholders or of special
meetings of stockholders called for the election of directors and/or for the
removal of one or more directors and for the filing of any vacancy in that
connection, newly created directorships and any vacancies in the Board of
Directors, including unfilled vacancies resulting from the removal of directors
for cause or without cause, may be filled by the vote of a majority of the
remaining directors then in office, although less than a quorum, or by the sole
remaining director.
4. MEETINGS.
- TIME. Meetings shall be held at such time as the Board shall fix, except
that the first meeting of a newly elected Board shall be held as soon after its
election as the directors may conveniently assemble.
- PLACE. Meetings shall be held at such place within or without the State
of Delaware as shall be fixed by the Board.
- CALL. No call shall be required for regular meetings for which the time
and place have been fixed. Special meetings may be called by or at the direction
of the Chairman of the Board, if any, the Vice-Chairman of the Board, if any, of
the President, or of a majority of the directors in office.
- NOTICE OF ACTUAL OR CONSTRUCTIVE WAIVER. No notice shall be required for
regular meetings for which the time and place have been fixed. Written, oral, or
any other mode of notice of the time and place shall be given for special
meetings in sufficient time for the convenient assembly of the directors
thereat. Notice need not be given to any director or to any member of a
committee of directors who submits a written waiver of notice signed by him
before or after the time stated therein. Attendance of any such person at a
meeting shall constitute a waiver of notice of such meeting, except when he
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened. Neither the business to be transacted at, nor, the purpose
of, any regular or special meeting of the directors need be specified in any
written waiver of notice.
- QUORUM AND ACTION. A majority of the whole Board shall constitute a
quorum except when a vacancy or vacancies prevents such majority, whereupon a
majority of the directors in office shall constitute a quorum, provided, that
such majority shall constitute at least one-third of the whole Board. A majority
of the directors present, whether or not a quorum is present, may adjourn a
meeting to another time and place. Except as herein otherwise provided, and
except as otherwise provided by the General Corporation Law, the vote of the
majority of the directors present at a meeting at which a quorum is present
shall be the act of the
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Board. The quorum and voting provisions herein stated shall not be construed as
conflicting with any provisions of the General Corporation Law and these Bylaws
which govern a meeting of directors held to fill vacancies and newly created
directorships in the Board or action of disinterested directors.
Any member or members of the Board of Directors or of any committee
designated by the Board, may participate in a meeting of the Board, or any such
committee, as the case may be, by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other.
- CHAIRMAN OF THE MEETING. The Chairman of the Board, if any and if
present and acting, shall preside at all meetings. Otherwise, the Vice-Chairman
of the Board, if any and if present and acting, or the President, if present and
acting, or any other director chosen by the Board, shall preside.
5. REMOVAL OF DIRECTORS. Except as may otherwise be provided by the
General Corporation Law, any director or the entire Board of Directors may be
removed, with or without cause, by the holders of a majority of the shares then
entitled to vote at an election of directors.
6. COMMITTEES. The Board of Directors may, by resolution passed by a
majority of the whole Board, designate one or more committees, each committee to
consist of one 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 any 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, shall have and
may exercise the powers and authority of the Board of Directors in the
management of the business and affairs of the corporation with the exception of
any authority the delegation of which is prohibited by Section 141 of the
General Corporation Law, and may authorize the seal of the corporation to be
affixed to all papers which may require it.
7. WRITTEN ACTION. Any action required or permitted to be taken at any
meeting of the Board of Directors or any committee thereof may be taken without
a meeting if all members of the Board or committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the Board or committee.
ARTICLE III
OFFICERS
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The officers of the corporation shall consist of a President, a Secretary,
a Treasurer, and, if deemed necessary, expedient, or desirable by the Board of
Directors, a Chairman of the Board, a Vice-Chairman of the Board, an Executive
Vice-President, one or more other Vice-Presidents, one or more Assistant
Secretaries, one or more Assistant Treasurers, and such other officers with such
titles as the resolution of the Board of Directors choosing them shall
designate. Except as may otherwise be provided in the resolution of the Board of
Directors choosing him, no officer other than the Chairman or Vice-Chairman of
the Board, if any, need be a director. Any number of offices may be held by the
same person, as the directors may determine.
Unless otherwise provided in the resolution choosing him, each officer
shall be chosen for a term which shall continue until the meeting of the Board
of Directors following the next annual meeting of stockholders and until his
successor shall have been chosen and qualified.
All officers of the corporation shall have such authority and perform such
duties in the management and operation of the corporation as shall be prescribed
in the resolutions of the Board of Directors designating and choosing such
officers and prescribing their authority and duties, and shall have such
additional authority and duties as are incident to their office except to the
extent that such resolutions may be inconsistent therewith. The Secretary or an
Assistant Secretary of the corporation shall record all of the proceedings of
all meetings and actions in writing of stockholders, directors, and committees
of directors, and shall exercise such additional authority and perform such
additional duties as the Board shall assign to him. Any officer may be removed,
with or without cause, by the Board of Directors. Any vacancy in any office may
be filled by the Board of Directors.
ARTICLE IV
CORPORATE SEAL
The corporate seal shall be in such form as the Board of Directors shall
prescribe.
ARTICLE V
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and shall be subject to
change, by the Board of Directors.
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ARTICLE VI
CONTROL OVER BYLAWS
Subject to the provisions of the certificate of incorporation and the
provisions of the General Corporation Law, the power to amend, alter, or repeal
these Bylaws and to adopt new Bylaws may be exercised by the Board of Directors
or by the stockholders.
19
EXHIBIT 10.1
IN-SPORTS INTERNATIONAL, INC.
377 ROUTE 17 SOUTH
HASBROUCK HEIGHTS, NJ 07604
November 16, 1999
George Avery, Sole Proprietor
Avery Sports Turf
Rome, Georgia
Re: Proposed Acquisition of Avery Sports Turf by In-Sports International,
Inc.
Dear Mr. Avery:
The purpose of this letter (the "Letter of Intent") is to outline the
terms of a transaction by which In-Sports International, Inc., a Delaware
corporation ("In-Sports") will acquire all title and interest in Avery Sports
Turf ("AST"), a sole proprietorship owned 100% by George Avery ("Mr. Avery")
from Mr. Avery in exchange for $300,000 in cash and 500,000 shares of restricted
common stock of In-Sports (the "In-Sports Shares") and certain other agreements.
1) The transaction as currently envisioned will proceed as follows: (i) upon
the signing of this letter of intent (the "Letter of Intent"), In-Sports
will advance $200,000 in cash and 500,000 In-Sports Shares to Mr. Avery as
a refundable deposit (the "Refundable Deposit") towards the full
consideration; (ii) AST will allow In-Sports and its professional advisors
to conduct a due diligence investigation ("Due Diligence") of AST, to
In-Sports' satisfaction; and (iii) assuming the satisfactory completion of
the Due Diligence, the parties will execute final documentation and set a
closing date for this transaction (the "Closing Date") which will be no
earlier than April 1, 2000.
2) Conditions to Closing. In-Sports will not be required to purchase AST or
proceed with any part of this transaction unless the following conditions
are met prior to January 31, 2000:
a) Due Diligence. AST will give In-Sports and its counsel full access
to AST's books, records, executive officers, key employees and
auditors to complete its due diligence review of AST. At a minimum,
this will include, but not be limited to, complete audited financial
statements for AST and any subsidiaries, affiliates or companies
controlled by, controlling, or under common control of AST,
corporate records, stock or other equity interest offerings,
stockholder or other equity holder lists, material agreements
(including employment agreements, licensing agreements and the
like), without limitation.
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b) Agreements. To the extent any of AST's existing agreements with
suppliers or customers require amendment, reconfirmation or notice
to the other party, AST must complete any such requirements before
the January 31, 2000.
c) Verification. If In-Sports, its counsel or other advisers find any
facts in their due diligence review which cause it or them to
believe that any material statements made by AST, its owner,
officers, directors or agents are inaccurate or misleading,
In-Sports will have the option to declare this Letter of Intent null
and void and demand the immediate return of any funds and In-Sports
Shares advanced to Mr. Avery, AST or its affiliates, including, but
not limited to, the Refundable Deposit.
3) Refundable Deposit. In-Sports will pay the Refundable Deposit as described
in paragraph 1.
4) Once In-Sports has completed its Due Diligence, In-Sports' counsel will
prepare final closing documents for this transaction, subject to review
and consultation with counsel for AST.
5) In-Sports will negotiate employment agreements and incentive compensation
plans with certain key employees of AST ("Key Employees") similar to their
existing agreements or arrangements.
6) If the parties do not go forward with this transaction, Mr. Avery will
return the Refundable Deposit to In-Sports no later than March 1, 2000.
7) All parties agree to negotiate the terms of definitive agreements in good
faith and in accordance with the terms of this Letter of Intent.
8) Consummation of the transactions outlined above are subject to board of
directors and shareholder approval (if necessary) of In-Sports. All
securities issuances are subject to the approval of offering materials by
all parties and their counsel, which approval shall not be unreasonably
withheld. Further, all securities offerings are subject to filings with
and clearance by securities authorities, if necessary. The forms of
Closing documents are subject to review by legal counsel for each party.
The parties acknowledge that this Letter of Intent is merely a statement
of the parties to enter into this transaction and is not binding on either
party, except for the requirement of paragraph 6 for the return of the
Refundable Deposit.
If the foregoing accurately sets forth your understanding of our mutual
intentions, please sign the attached copy of this letter and return it to the
undersigned in the envelope provided.
Very truly yours,
IN-SPORTS INTERNATIONAL, INC.
By: /s/ SAM SERRITELLA
-------------------------------
Sam Serritella, President
<PAGE>
AVERY SPORTS TURF
By: /s/ GEORGE AVERY
-------------------------------
George Avery, Sole Proprietor
/s/ GEORGE AVERY
-------------------------------
GEORGE AVERY
21
EXHIBIT 10.2
ASSIGNMENT OF NAME
And
RELEASE OF EMPLOYEE
This assignment of name and release of employee (the "Agreement") is made
as of the 2nd day of February, 1999 by and between In-Sports International, Inc.
(In-Sports"), a Delaware corporation, and Ed-Car Construction, LLC ("Ed-Car"), a
limited liability company organized under the laws of the State of New Jersey.
This Agreement supercedes any other agreements made or contemplated by the
parties with respect to the subject matter of this Agreement.
Background
In-Sports desires to buy, and Ed-Car desires to sell, all of Ed-Car's
right, title, interest and goodwill in the name "Ed-Car Construction" or any
derivative thereof. In addition, In-Sports desires to hire Joseph Caravella, a
former employee of Ed-Car and wishes to obtain a general release from Ed-Car in
that connection.
Therefore, in consideration of the premises and the mutual obligations
hereunder, for good and valuable consideration, the receipt and sufficiency of
which is acknowledged, the parties agree as follows:
1) Assignment of Name. Ed-Car hereby assigns to In-Sports its entire right,
title, interest and goodwill in the name "Ed-Car Construction" and any
derivative thereof. Ed-Car agrees to change its name within a reasonable
time after the date of this Agreement. Ed-Car agrees not to use the name
"Ed-Car Construction" in any manner after the date of this Agreement,
except in connection with its change of name.
2) Release. Simultaneously with the execution of this Agreement, Ed-Car will
deliver an executed release to In-Sports in the form attached as Exhibit
A, allowing In-Sports to hire Joseph Caravella as an employee of
In-Sports.
3) Consideration. In consideration for Ed-Car's assignment and release,
In-Sports hereby delivers to Ed-Car 250,000 shares of In-Sports' common
stock (the "Shares"). Ed-Car acknowledges that the Shares are subject to
restrictions under the Securities Act of 1933 and may not be transferred
except pursuant to a registration statement or an exemption from
registration.
4) Limitations on Assignment. The parties acknowledge that this Agreement
does not, and is not meant to, transfer any assets, liabilities or
business of Ed-Car, except for the name "Ed-Car Construction" and its
associated goodwill. Ed-Car may continue in its present business or change
its business, subject to the terms of this Agreement.
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5) MISCELLANEOUS.
a) Captions and Headings. The paragraph headings throughout this
Agreement are for convenience and reference only, and shall in no
way be deemed to define, limit, or add to the meaning of any
provision of this Agreement.
b) No Oral Change. This Agreement and any provision hereof, may not be
waived, changes, modified, or discharged orally, but only by an
agreement in writing, signed by the party against whom enforcement
of any waiver, change, modification or discharge is sought.
c) Non Waiver. Except as otherwise expressly provided herein, no waiver
of any covenant, condition, or provision of this Agreement shall be
deemed to have been made unless expressly in writing and signed by
the party against whom such waiver is charged; and (i) the failure
of any party to insist in any one or more cases upon the performance
of any of the provisions, covenants, or conditions of this Agreement
or to exercise any option herein contained shall not be construed as
a waiver or relinquishment for the future of any such provisions,
covenants, or conditions, (ii) the acceptance of performance of
anything required by this Agreement to be performed with knowledge
of the breach or failure of a covenant, condition, or provision
hereof shall not be deemed a waiver of such breach or failure, and
(iii) no waiver by any party of one breach by another party shall be
construed as a waiver with respect to any other or subsequent
breach.
d) Time of Essence. Time is of the essence of this Agreement and of
each and every provision hereof.
e) Entire Agreement. This Agreement contains the entire Agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings.
f) Counterparts. This Agreement may be executed simultaneously in one
or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
g) Notices. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have
been duly given on the date of service if served personally on the
part to whom notice is to be given, or on the third day after
mailing if mailed to the part to whom notice is to be given, by
first-class mail, registered or certified, postage prepaid, and
properly addressed, and by fax, to the
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principal office of each party.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
ED-CAR CONSTRUCTION, LLC IN-SPORTS INTERNATIONAL, INC.
BY: /s/ JOSEPH CARRAVELLA BY: /s/ PATRICK MCLAREN
--------------------- -------------------
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Exhibit A
RELEASE OF ALL CLAIMS
FOR ONE DOLLAR ($1.00) IN HAND PAID AND OTHER GOOD AND VALUABLE
CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged, the
undersigned, ED-CAR CONSTRUCTION, LLC, a New Jersey limited liability company,
for itself and for its successors and assigns (collectively, "Releasors"), does
hereby remise, release, quitclaim and forever discharge IN-SPORTS INTERNATIONAL,
INC. and its attorneys, officers, directors, agents, heirs, executors,
administrators, and personal representatives (collectively, "Releasees") of and
from any and all damages, losses, expenses, claims, demands, actions, causes of
action, suits, judgments, orders, decrees, and any execution thereon, whether at
law, in equity or otherwise, which Releasors had, have, or may in the future
have, of any kind or nature whatsoever, past, present or future, known or
unknown, and whether the same were or could have been discovered, against
Releasees, from the beginning of time to the date of these presents and forever,
arising from the employment by In-Sports International, Inc. of Joseph
Caravella.
IN WITNESS WHEREOF, and intending to be legally bound, the undersigned has
executed this Release this _______ day of ________, 2000.
WITNESS: ED-CAR CONSTRUCTION, LLC
By:
- -------------------------- -------------------------
STATE OF NEW JERSEY :
: SS
COUNTY OF __________:
On this the ______ day of ________, 2000, before me, ______________, the
undersigned officer, personally appeared ______________, managing member and
sole officer of ED-CAR CONSTRUCTION, LLC, known to me (or satisfactorily proven)
to be the entity whose name is subscribed to the within instrument and
acknowledged that he executed the same for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
NOTARY PUBLIC
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EXHIBIT 10.3
OFFICE LEASE
19. Parties. This is a Lease for office space in the building located at 377
Route 17 South, Hasbrouck Heights, New Jersey between Satnick Development
Corporation, a corporation organized under the laws of the State of New
Jersey, as Landlord and, Perma Grass Corporation, a New Jersey
corporation, as Tenant.
20. Definitions. As used in this Lease, the following terms shall have the
indicated meanings:
2.1. "Affiliate of Landlord" shall mean any person, firm or corporation
which controls or is controlled by Landlord.
2.2. "Building" shall mean the office building located at 377 Route 17
South, Hasbrouck Heights, New Jersey, commonly known as Airport 17
Office Centre.
2.3. "Bulding Hours" shall mean the time between 8:00 a.m. and 6:00 p.m.,
Mondays through Fridays, and from 8:00 a.m. to 1:00 p.m. on
Saturdays, excluding Holidays.
2.4. "Commencement Date" shall mean the date determined pursuant to
Article 7 as the date on which the Term commences.
2.5. "Common Facilities" shall mean the stairwells, elevators, hallways,
restrooms nad lobbies in the Building and the driveways and parking
lots on the Property.
2.6. "Force Majeure" shall mean fire, catastrophe, casualty,, strikes or
labor trouble, civil commotion, acts of God or the public enemy,
governmental prohibitions or regulations, or inability or difficulty
in obtaining materials, or any other causes beyond the Landlord's
control.
2.7. "Landlord" or "Lessor" shall mean initially Satnick Development
Corporation, a New Jersey corporation; however, the term "Landlord"
shall only refer to the holder or holders of the fee title to the
Property or the lessee or lessees of the entire interest of such
holder or holders, so that upon any transfer of title to the
Property, the term shall refer only to the party holding title, and
no prior holder of title or lessee of such entire interest shall
have any further liability or obligation with respect to the
performance of any obligation on the part of the Landlord to be
performed under this Lease, except as may be specifically provided
herein. A lease of the entire interest of any Landlord shall be
deemed a transfer of title for
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the purposes of this Lease, and the Lessee under such lease shall be
deemed to hold title to the Property within the meaning of this
Lease.
2.8. "Mortgagee" shall mean the lessor of any present or future ground or
underlying leases affecting all or any part of the Property and the
holder of any mortgage which may now or hereafter be placed on or
affect such leases or all or any part of the Property or any
interest therein, and each of them.
2.9. "Premises" or "Demised Premises" shall mean the rentable square feet
located on the lobby level of the building commonly known as Suite
116 (which is subject to adjustment in the event Tenant leases
additional space in the Building, as hereinafter provided).
2.10. "Property" shall mean the tract of land in Hasbrouck Heights, New
Jersey on which the Building is located, including the Building and
any other improvements thereon.
2.11. "Tenant" or "Lessee" shall mean Perma Grass Corporation.
2.12. "Term" shall mean the Initial Term of this Lease as set forth in
Article 4, as the same may be renewed.
21. Leasing of the Premises. Landlord hereby leases the Premises to Tenant,
and Tenant hereby rents the Premises from Landlord, on the terms and
conditions contained in this Lease.
3.1. Tenant and Tenant's agents, employees, licensees and invitees shall
also have the right, during the Term, to the reasonable use of the
Common Facilities, together with Landlord and other lessees of
portions of the Building, their invitees, licensees, agents and
employees. Landlord reserves the right to grant to the owners and
lesses of office buildings which hereafter may be constructed in the
vicinity of the Building and to their invitees, licensees, agents
and employees the right to use the driveways located on the Property
together with lessees of the Building, and to grant easements and
other rights therein for such purpose, provided that same do not
materially interfere or otherwise materially diminish the use,
occupation and enjoyment of the Premises, Common Facilities and
appurtenances thereto by the Tenant or its employees, invitees and
guests.
22. Initial Term. The Premises are leased to the Tenant for an initial term of
thirty-seven (37) months (the "Initial Term"), commencing on the
Commencement Date, February 1, 1998.
23. Basic Rent.
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5.1. Basic Rent shall be payable in monthly installments, in advance, on
the first day of each calendar month during the term of this Lease,
except that a proportionately lesser sum may be paid for the first
and last months of the ter of this Lease if the Commencement Date is
other than the first day of the month. The annual basic rent payable
by Tenant to Landlord during the term hereof shall be as follows:
(a) The Tenant shall pay to the Landlord during the Initial Term
Basic Rent in the amount of Seventy-Six Thousand Eight Hundred
Dollars ($76,800.00), at an annual rate of Twenty-five
Thousand Six Hundred Dollars ($25,600.00), which shall accrue
at the rate of Two Thousand One Hundred Thirty-three Dollars
and Thirty-three Cents ($2,133.33), per month. (First month's
rent to commence March 1, 1998).
(b) Tenant shall pay basic rent and any additional rent required
to be paid under this Lease in lawful money of the United
States to landlord at Landlord's address set forth in the
section of this Lease captioned "Notices", or at such other
place as Landlord may designate in writing, without demand and
without counterclaim, deduction or setoff, except as otherwise
provided herein.
(c) If Tenant shall fail to pay any basic rent or any
additional rent, within three (3) days of the date when the
same is due and payable, Tenant shall pay upon demand by
Landlord, an additional rent hereunder, interest at the
rate of eighteen (18%) percent per annum, on all such late
payments of rent due hereunder; provided, however, that in
no event shall the interest rate exceed the maximum
permitted by law.
24. Security Deposit. Tenant has deposited with Landlord the sum of Four
Thousand Six Hundred Twenty-six Dollars and Sixty-six Cents ($4,626.66) as
security for the full and faithful performance by the Tenant of all the
terms, covenants and conditions of this Lease upon the Tenant's part to be
performed, which said sum shall be returned to the Tenant without
interest, after the expiration of the Term (including any Renewal Terms),
provided that Tenant has fully and faithfully carried out all of said
terms, covenants and conditions on Tenant's part to be performed. Landlord
shall have the right to apply any part of the security deposit to cure any
default of Tenant, and if Landlord does so, Tenant shall, within ten (10)
days after written demand, deposit with Landlord the amount applied so
that Landlord shall have the full deposit on hand at all times during the
term of this Lease. In the event the annual basic rent is increased
pursuant to Article 24 of this Lease or as otherwise provided herein,
Tenant shall deposit with Landlord on each anniversary date of the
Commencement Date such additional sums required to increase the Security
Deposit then held by Landlord to an amount equal to two (2) months basic
rent. In the event of a sale or lease of the Building, and Tenant electric
subject to this Lease, the Landlord shall thereupon be considered released
by the Tenant from all liability for the return of the security deposit
and the Tenant shall look solely to the new
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Landlord for the return thereof. It is agreed that the foregoing shall
apply to every transfer or assignment made of the security to a new
Landlord. The security deposited under this Lease shall not be mortgaged,
assigned or encumbered by Tenant without the written consent of the
Landlord, and any attempt to do so shall be void. Landlord shall provide
notice to Tenant of all such transfers of the security deposit within
seven (7) days after said transfer. No trust relationship is created
between Landlord and Tenant as said security deposit.
25. Commencement of Term; Estimated Commencement Date.
7.1. The parties intend that the Commencement Date be on or about
February 1, 1998 (the "Estimated Commencement Date"), but the actual
Commencement Date shall be fixed and ascertained as hereinafter set
forth. The actual Commencement Date shall be the date upon which the
Demised Premises shall be "substantially completed". "Substantially
Completed" for the purposes of this Lease, and to fix the Tenants
liability for the payment of the rents payable under this Lease,
shall be the earlier of (a) the date on which the Tenant has
procured, if required by law, a temporary or permanent Certificate
of Occupancy, which ever is first obtained, permitting occupancy of
the Demised Premises by the Tenant, or the date on which Landlord
obtains such Certificate of Occupancy, if Landlord elects to obtain
same, or (b) the date upon which Landlord has substantially
completed the work required to be performed by Landlord pursuant to
the Work Letter and any Extras of Change Orders executed pursuant to
Section 14.1., as determined by landlord in its reasonable judgment.
The work to be done by landlord shall be deemed to be substantially
completed even though minor details of work or adjustments remain to
be done, provided they shall not materially interfere with the
Tenant's use of the Premises.
7.2. After the Commencement Date, Landlord and Tenant, promptly upon the
request of either of them, will execute and deliver to each other a
certificate in recordable form setting forth the Commencement Date.
7.3. If Prior to the Commencement Date, Tenant shall enter the Premises
with Landlord's prior written consent to make any installations of
its equipment, fixtures and furnishings, Landlord shall have no
liability or obligation for the care or preservation of Tenant's
property.
7.4. Landlord agrees to provide access to the Premises to permit Tenant's
installation of telephones provided same shall not in any way
interfere with the work to be performed by Landlord hereunder. The
parties agree, however, that failure to complete the telephone
installation and to provide service on the Commencement Date or
Tenant's failure to timely supply Landlord with the plans and
specifications required under the Landlord's Work Letter (Exhibit
"B") in accordance with Section 11.1, shall not delay or defer the
Commencement Date.
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7.5. Anything contained in this Lease to the contrary notwithstanding, if
for any reason the Premises are not ready for occupancy on the
Estimated Commencement Date, this Lease shall nevertheless continue
in full force and effect; and the Commencement Date shall be
determined as set forth in Section 7.1 above.
7.6. Real Estate Tax Escalation.
(a) For the purpose of this Article:
(i) The term "Taxes" shall mean (a) the real estate taxes,
water and sewer rents and assessments and special
assessments imposed upon the Building and/or the land on
which the building is erected by and governmental bodies
or authorities and (2) any expenses incurred by Landlord
in contesting the same. If at any time during the term
of this Lease the methods of taxation prevailing on the
date hereof shall be altered so that in lieu of, or as
in addition to, or as a substitute for, the whole or any
part of such real estate taxes, water and sewer rents
and assessments and special assessments now imposed on
real estate, there shall be levied, assessed and imposed
(x) a tax, assessment, levy, imposition, license fee or
charge wholly or partially as a capital levy, or
otherwise on the rents received therefrom, or (y) any
other additional or substitute tax, assessment, levy,
imposition, fee or charge, then all such taxes,
assessments, levies, impositions, fees or charges shall
be deemed to be included within the term "Taxes" for the
purposes hereof.
(ii) The term "Base Tax Year" shall mean the Tax Year ending
June 30, 1998.
(iii) The term "Base Tax" shall mean the taxes for the Base
Tax Year.
(iv) The term "Tax Year" shall mean the period of twelve (12)
calendar months beginning January 1st.
(v) The term "Tenant's Share" shall mean one and six-tenths
(1 1/6%) percent.
(b) IF the taxes for any Tax Year during the term of this Lease
commencing after the Base Tax Year shall exceed the Base Tax,
Tenant shall pay, as additional rent, for such Tax year an
amount ("Tax Payment") equal to Tenant's Share of such excess.
If a Tax Year ends after the expiration or Termination of the
term of this Lease, the Tax Payment therefor shall be prorated
to correspond to that portion of such Tax Year occurring
within the term of this Lease. If the real estate fiscal tax
year in the Municipality
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where the Building is located shall be changed during the term
of this Lease, any Taxes for a real estate fiscal tax year, a
part of which is included within a particular Tax year and
part of which is not so included, shall be apportioned on the
basis of the number of days in the real estate fiscal tax year
included in the particular Tax Year for the purpose of making
the computation under this Article.
(c) The Tax Payment shall be payable by Tenant within ten (10)
days after receipt of a demand from Landlord. Notwithstanding
the foregoing, at Landlord's option, to be exercised at any
time during the term of this Lease upon notice to Tenant,
Tenant shall pay on the first day of each month, on account of
the Tax Payment, an amount equal to one-twelfth of the Tax
Payment for the preceding Tax Year. If Landlord shall exercise
such option for the first Tax year following the Base Tax Year
and the Taxes for the first Tax Year have not been
established, then for such first Tax Year said monthly
payments shall be based on the Base Tax of the first Tax Year.
If the aggregate payments on account of the Tax Payment in any
Tax Year shall exceed the Tax Payment of that Tax Year, the
excess shall, at Landlord's option, either be credited against
subsequent payments under this Article or promptly refunded to
Tenant; and if the Tax Payment for any Tax Year shall exceed
the aggregate payments on account of the Tax Payment, the
excess shall be promptly paid by Tenant.
(d) If the Base Tax is reduced as a result of an appropriate
proceeding or otherwise, Landlord shall adjust the amount of
each Tax payment previously made, and Tenant shall pay the
amount of the adjustment on the next rent installment date
immediately following receipt of a demand therefor from
Landlord setting forth the amount of the adjustment.
(e) If Landlord shall receive a refund of the Taxes for any Tax
Year, Landlord shall pay to Tenant, Tenant's Share of the net
refund (after deducting from such total refund the costs and
expenses of obtaining same); provided, however, such payment
to Tenant shall in no event exceed Tenant's Tax Payment
actually paid for such Tax Year.
26. Use and Occupancy. Tenant shall use and occupy the Premises as general
offices and for no other purpose.
27. Repairs and Maintenance.
9.1. Except as otherwise provided in this Lease, Landlord at its cost and
expense, shall keep in good repair the structural parts of the
Building, including the walls, roof, floor, foundation, load bearing
members, trusses and joists, as well as all plumbing, utilities and
facilities located within the walls, ceilings and floors and outside
of the Premises, which serve the Premises, except for repairs or
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maintenance occasioned by the negligence or intentional act of
Tenant or Tenant's agents, employees, licensees or invitees. Any
repairs or maintenance occasioned by the negligence or intentional
act of Tenant's agents, employees, licensees or invitees shall be
repaired at the cost and expense of Tenant.
9.2. Except as otherwise provided in this Lease, the Landlord shall take
good care of and maintain and repair the lawns, shrubbery,
driveways, sidewalks, and entranceways, foyers, curbs and parking
lot on the Property, and the Landlord shall provide for snow removal
and window cleaning.
9.3. Tenant covenants and agrees that it shall not cause or permit any
waste or damage to the Premises or any overloading of the floors of
the Premises. Tenant shall at the expiration of the Term, deliver up
the Premises in good order and condition, ordinary wear and tear and
damage by fire or other casualty excepted.
9.4. Except as specifically provided in Section 13.2 and Article 14 of
this Lease, there shall be no abatement of rent or allowance to
Tenant for any diminution of rental value and no liability on the
part of Landlord by reason of inconvenience, annoyance or injury to
business resulting from Landlord's, Tenant's or other's making or
failing to make any repairs, alterations, additions or improvements
in or to any portion of the Property or the Premises or to the
fixtures, appurtenances or equipment thereof. The provisions of this
Article 9 with respect to the making of repairs shall not apply in
the case of fire or other casualty, which is dealt with in Article
13 hereof.
9.5. Tenant shall throughout the term of this Lease, take good care of
the Premises, the fixtures, glass and equipment therein and the
plumbing, electrical and other utility system on the Premises, and
at Tenant's sole cost and expense, make all repairs thereto as and
when needed to preserve all of the foregoing in good working order
and condition. Tenant shall also repair all damage to the Building
caused by the moving of Tenant's fixtures, furniture and equipment.
In addition, throughout the Term, Tenant shall take good care of any
additions, alterations, improvements and installations made by or at
the request of Tenant in accordance with Article 11 of this Lease,
and at Tenant's sole cost and expense, shall make all repairs
thereto as and when needed to preserve same in good working order
and condition. All repairs required to be made by Tenant shall be of
quality or class equal to the original work or construction. If
Tenant fails after ten (10) days notice to proceed with due
diligence to make repairs required to be made by Tenant, such
repairs may be made by the Landlord at the cost and expense of
Tenant and the cost and expense thereof incurred by Landlord shall
be collectable as additional rent immediately upon demand therefor.
Tenant shall give Landlord prompt notice of any defective condition
in any plumbing, heating system or electrical lines located in,
servicing or passing through the Premises.
28. Window Cleaning. Tenant will not clean nor require or allow any window in
the
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Premises to be cleaned from the outside except by parties authorized by
Landlord.
29. Alterations - As presently constructed and decorated.
11.1. Annexed hereto as Exhibit __ is "Landlord's Building Standard Work
Letter" (the "Work Letter"). Tenant agrees that it shall provide to
Landlord, on or before __________, such plans and specifications as
are required under the Work Letter and such other plans and
specifications as may reasonably be required by Landlord for
Tenant's layout, partitioning, electrical, ceiling and other
installations, subject to the approval and acceptance of Landlord.
Landlord shall furnish and install in accordance with such drawings,
so much of the work required by Tenant as is allowed by Landlord's
Work Letter, at no additional cost to Tenant. To the extent Tenant
requires work, the cost of which is not included in the Work Letter,
the same shall be reduced to an "Extra" or "Change Order" to be
executed by both the Landlord and Tenant, which shall indicate the
work required, the cost thereof to Tenant, and the additional time
required, if any, for completion. Any such Extra or Change Order
shall be paid by Tenant in advance of Landlord performing such work.
Tenant shall be responsible for any delays in completing the
Premises by reason of its failure to furnish Landlord with the
requisite plans and specifications by the date set forth in this
Section 11.1.
11.2. Tenant shall make no alterations, permanent decorations,
installations, substitutions, or improvements in or to the Premises,
including but not limited to the removal or installation of any
partitions, doors, electrical installations, plumbing installations,
water coolers, air-conditioning or cooling systems, or any
apparatus, whether structural or nonstructural (hereinafter the
"Tenant Changes") without Landlord's prior written consent in each
instance, and only upon complying with all of the provisions of this
Section 11.2.
11.2.1. Prior to commencing any Tenant Changes, Tenant, at its sole
cost and expense shall obtain and deliver to Landlord, for
Landlord's prior written consent, all of the following:
11.2.1.1. Detailed architect's plans and specifications,
showing the proposed Tenant Changes;
11.2.1.2. A certificate evidencing that Tenant or Tenant's
contractors have procured and paid for worker's
compensation insurance covering all persons
employed in connection with the Tenant Changes or
who might asset claims for death or bodily injury
against Landlord, Tenant, or the Property;
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11.2.1.3. A certificate evidencing such additional personal
injury and property damage insurance (over and
above the insurance required to be carried by
Tenant pursuant to the provisions of Article 31
hereof) as Landlord may reasonably require in
connection with the Tenant Changes;
11.2.1.4. Copies of all contracts and subcontracts for the
completion of the Tenant Changes together with
Tenant's written certification as to the estimated
total cost of the Tenant Changes;
11.2.1.5. If Landlord's estimate of the total cost of the
Tenant Changes is in excess of $10,000.00, then at
Landlord's option, Tenant shall furnish Landlord
with a surety company performance bond in form and
substance satisfactory to Landlord, procured at
Tenant's cost and expense, and issued by a surety
company acceptable to Landlord, in an amount equal
to at least 120% of the estimated total cost of
the Tenant Changes, guaranteeing to Landlord and
Mortgagee the completion thereof and payment
therefor within a reasonable time, free and clear
of all liens, encumbrances, security interests,
and other charges, and in accordance with the
plans and specifications and any modifications and
amendments thereto approved by Landlord.
11.2.1.6. Such permits, authorizations or consents as may be
required by any applicable law, rule, order or
requirement of any governmental authority having
jurisdiction thereof, provided, however, that no
plans, specifications or applications (or any
modifications or amendments thereto) shall be
filed by Tenant with any governmental authority
without first obtaining Landlord's prior written
consent in each instance.
11.3. If Landlord determines that the prior written consent of the
Mortgagee is required, Tenant shall obtain and deliver such consent
to Landlord, at Tenant's sole cost and expense, prior to the
commencement of the Tenant Changes, and Tenant shall comply fully
with the requirements of the Mortgagee, also at Tenant's sole cost
and expense.
11.4. In no event shall any material or equipment be incorporated in or to
the Premises in connection with any Tenant Changes which is subject
to any lien, encumbrance, security interest or charge of any kind
whatsoever, or subject to any title retention agreement. Any
mechanic's or materialman's lien filed against all
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or any part of the Premises or the Property or Landlord's interest
therein, for work claimed to have been done for Tenant, or materials
claimed to have been furnished to Tenant, shall be discharged by
Tenant within ten (10) days thereafter, at Tenant's cost and
expense, by filing any bond required by law or otherwise. Tenant
shall defend, indemnify and save Landlord harmless from and against
any such liens and all costs and expenses (including reasonable
attorney's fees) incurred by Landlord in connection therewith.
11.5. Tenant shall cause all Tenant Changes to be performed promptly at
its sole cost and expense;
11.5.1. Only pursuant to written contracts with contractors and
mechanics that have been approved in advance by Landlord
in writing;
11.5.2. In a good and workmanlike manner, using prime quality
new materials and equipment, at least equal in quality
and class to the original Building installations;
11.5.3. in compliance with all applicable laws, and government
rules, permits, authorizations, licenses, regulations
and orders;
11.5.4. In compliance with all insurance policies affecting the
Premises and the Building;
11.5.5. So as not to disturb or interfere with or delay Landlord
in the operation of the Building or the provision of
services thereto or to any other lessees of the Building
or any of their employees, agents, licensees or
invitees;
11.5.6. So as not to obstruct or cause to obstruct any of the
Common Facilities;
11.5.7. So as not to cause any damage or injury to the Building
or to the Property of Landlord or any other lessee of
the Building, or any of their employees, agents,
licensees or invitees;
11.5.8. So as not to result in any cost or expense to
Landlord whatsoever.
11.6. Tenant shall not exercise any of its rights pursuant to the
provisions of this Article 11 in a manner which would create any
work stoppage, picketing, labor disruption or dispute, violate
Landlord's union contracts affecting the Property, or interfere with
the business of Landlord or any other lessee or occupant of the
Building.
11.7. When furnished by or at the expense of Tenant (except when same is a
replacement of an item theretofore furnished and paid for by the
Landlord or
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against which Tenant has received a credit), all movable property,
furniture, furnishings and trade fixtures, other than those affixed
so that they cannot be removed without damage to the Building or the
Property ("Tenant's Property") shall remain the property of Tenant,
and may be removed by Tenant prior to the expiration of the Term. In
case Tenant shall decide not to remove any or all of Tenant's
Property, Tenant shall notify Landlord in writing, not less than
sixty (60) days prior to the expiration of the Term, specifying the
items of property which Tenant has decided not to remove. If, within
thirty (30) days after receipt of such notice, Landlord shall
request Tenant to remove any or all of such property, Tenant shall
remove such property, at Tenant's cost and expense, at or prior to
the expiration of the Term. At the expiration of other termination
of this Lease, Tenant shall restore the Premises and the Property to
the same good order and condition as they were in on the
Commencement Date hereof, normal wear and tear excepted, and tenant
shall repair any damage caused in connection with the removal of any
of Tenant's Property therefrom. If Tenant shall fail to remove any
or all of Tenant's property, Landlord may remove any or all of such
property, and dispose of it or place it in storage, and restore the
Premises to good order and condition as herein provided, and Tenant
shall reimburse Landlord for all of Landlord's costs and expenses in
connection therewith as additional rent, within ten (10) days after
Landlord gives Tenant written notice as to the amount hereof. Any of
Tenant's Property not removed by Tenant, at the election of
Landlord, shall be deemed to be abandoned by Tenant, and Landlord
may retain or dispose of such property as Landlord shall elect,
without accountability to Tenant but at Tenant's cost and expense.
The provisions of this Section 11.7 shall survive termination of
this Lease.
11.8. Unless Landlord elects otherwise (which election shall be made by
written notice not less than thirty (30) days prior to the
expiration or other termination of this Lease) all alterations,
decorations, partitions, installations, additions or improvements
upon or to the Property or in the Premises, made by either party
subsequent to the Commencement Date and not easily removable by the
Tenant without material damage, including, but not limited to, all
wall-to-wall carpeting, paneling, railings and the like, affixed to
the Property, or for which Tenant has received a credit, shall
become the property of the Landlord and shall remain upon and be
surrendered with the Premises at the end of the Term. In the event
the Landlord shall exercise such election, then such alterations,
decorations, installations, additions, or improvements made by
Tenant upon the Property or in the Premises as Landlord shall
designate in such notice shall be removed by Tenant and Tenant shall
restore the Property and the Premises to its condition on the
Commencement Date, reasonable wear and tear excepted, at Tenant's
cost and expense, at or prior to the expiration or other termination
of the Term. If Tenant fails to remove any fixture, equipment,
improvement installation or appurtenances which, as herein provided,
are required to be removed by Tenant, within the time above
specified therefor, then Landlord (in addition to all rights and
remedies to which Landlord may be entitled at any time) may, at its
election, deem that the
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same has been abandoned by Tenant and Landlord may retain or dispose
of such property and restore the Property to its condition on the
Commencement Date without accountability to Tenant and at Tenant's
cost and expense. Tenant shall reimburse Landlord for such costs and
expenses, as additional rent, within ten (10) days after written
notice to Tenant of the amount thereof.
11.9. Notwithstanding the right of Landlord to approve any matter
described in the Article, Landlord shall have no responsibility or
liability for the performance or quality of work or materials
furnished by any contractor, subcontractor, agent or consultant of
Tenant. The approval by Landlord, whether expressed or implied, of
any Tenant Changes shall in no way affect Landlord's rights or
Tenant's obligations relating to the restoration of the Property and
Premises at the expiration or other termination of the Term.
30. Compliance with Rules and Regulations; Compliance with Law.
12.1. Tenant shall observe and comply with the rules and regulations
hereinafter set forth in Exhibit "A" attached hereto and with such
further reasonable rules and regulations as Landlord may prescribe,
on written notice to the Tenant, for the safety, care and
cleanliness of the Property or for the comfort, quiet and
convenience of the other occupants of the Building.
12.2. Tenant shall not place a load upon any floor of the Premises
exceeding the floor load per square foot area which it was designed
to carry and which is allowed by law. Landlord reserves the right to
prescribe the weight and position of all safes, business machines
and mechanical equipment. Such installations shall be placed and
maintained by Tenant, at Tenant's expense, in settings sufficient,
in Landlord's judgment, to absorb and prevent vibration, noise and
annoyance.
12.3. Lessee shall, at its expense, comply promptly with all applicable
statues, ordinances, rules, regulations, orders, restrictions of
record, and requirements in effect during the Term or any part of
the Term hereof regulating or relating to the use by Lessee of the
Premises. Lessee shall neither use nor permit the use of the
Premises in any manner that will tend to create waste, nuisance, or
damage to the Building.
12.4. Lessee hereby accepts the Demised Premises subject to all applicable
zoning, municipal, county and state laws, ordinances, covenants of
record, and regulations governing and regulating the use of the
Premises, and accepts this Lease subject thereto and to all matters
disclosed thereby and by any exhibits attached hereto. Landlord
makes no representations as to any permissive use of zoning
ordinance interpretation. Tenant, or Landlord at its sole option,
shall be responsible for obtaining, at Tenant's cost and expense, a
temporary and/or permanent Certificate of Occupancy for the Premises
from the Borough of Hasbrouck Heights
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permitting Tenant's use of the Property as provided herein, if
required by applicable law. Provide however, the Commencement Date
set forth in Paragraph 7.1 shall not be delayed or otherwise
extended by reason of Tenant's failure to obtain a Certificate of
Occupancy on or before the Commencement Date, except if such failure
results from Landlord's failure to complete any work required to be
performed by Landlord hereunder.
12.5. Lessee represents and warrants that it has reviewed the Standard
Industrial Classification Manual prepared by the Office of
Management and Budget of the U.S. and that the S.I.C. number for the
operations to be conducted by Tenant at the Premises is _________.
Lessee shall advise Lessor immediately in the event its S.I.C.
number should change.
Lessee represents and warrants that the business operations which it
shall conduct at the Premises do not constitute the operation of an
industrial establishment as defined in the Environmental Cleanup and
Responsibility Act (hereinafter "ECRA"), or, on the other hand, if
it is or at any time shall become such an industrial establishment,
Tenant will comply with all ECRA requirements during operations and
at the time of closing, terminating or transferring the operations.
Lessee represents and warrants that no use to be undertaken shall,
in addition to the additional warranties and restrictions contained
herein, violate any rules, regulations or statute of the
Occupational Safety and Health Administration or any other similar
enactment.
If at any time during the original term or any renewal or extension
of this Lease, Lessor shall reasonably believe that Lessee's
operation violates ECRA or ay other environmental law or regulation,
or for other good cause, including the planned closing, termination
or transferring of the operation at, or ownership of, the Premises
or the Property, upon sixty (60) days written notice Lessee shall
submit to Lessor at Lessee's sole cost and expense, either (1) a
letter of non-applicability or a Negative Declaration approved by
the New Jersey Department of Environmental Protection, or (2) a
Cleanup Plan and a surety bond or other financial security
guaranteeing performance of the Cleanup Plan, meeting the
requirements of the New Jersey Department of Environmental
Protection.
31. Damages to Building; Waiver of Subrogation.
13.1. If the Building is damaged by fire or any other cause to such extent
that the cost of restoration, as reasonably estimated by Landlord,
will equal or exceed twenty-five (25%) percent of the replacement
value of the Building (exclusive of foundations) just prior to the
occurrence of the damage then Landlord may, no later than the
sixtieth (60th) day following the damage, given Tenant notice of
election to terminate this Lease, or, if the cost of restoration
will exceed fifty (50%) percent of such replacement value and if the
substantial portion of the
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Premises are damaged therefrom rendering the Premises wholly
untenantable or unfit for occupancy, then Tenant may, no later than
the sixtieth (60th) day following the casualty or loss, give the
Landlord notice of election to terminate this Lease; provided that
Tenant shall not have the right to terminate this Lease in any such
event if the damage is caused by Tenant or Tenant's employees,
agents, licensees or invitees. If such election is exercised, this
Lease shall be deemed to terminate on the fifteenth (15th) day after
the giving of such notice. The basic rent, and any additional rent,
shall be apportioned as of the date of such termination. If the cost
of restoration as estimated by Landlord shall amount to less than
twenty-five (25%) percent of the replacement value of the Building,
or if, despite the cost, Landlord or Tenant does not elect to
terminate this Lease as provided above, Landlord shall restore the
Building and the Premises with reasonable promptness, subject to
Force Majeure, and the partes shall have waived their right to
terminate this Lease. Landlord shall have no duty or obligation to
restore Tenant's Property, equipment, fixtures or Tenant Changes.
The words "restoration" and "restore" are used in this Article 13
shall include repairs.
13.2 In any case in which Tenant's use of the Premises is materially and
adversely affected by any damage to the Building or appurtenances
thereto, the rent accrued and accruing shall not cease but there
shall be either an abatement of an equitable reduction in basic rent
and additional rent depending on the period for which and the extend
to which the Premiss are not reasonably usable for the purposes for
which they are leased hereunder. IF the damage results from the
fault of the Tenant, or Tenant's agents, employees or invitees,
Tenant shall not be entitled to any abatement or reduction in basic
rent or additional rent.
13.3 Notwithstanding the provisions of this Article 13 of this Lease, in
any event of loss or damage to the Property, the Building, the
Premises and/or any contents, each party shall look first to any
insurance in its favor before making any claim against the other
party, and, to the extent possible without additional cost, each
party shall obtain, for each policy of insurance, provisions
permitting waiver of any claim against the other party for loss or
damage within the scope of such insurance, and each party, to such
extent permitted, for itself and its insurers hereby waives all such
claims against the other party.
32. Eminent Domain. If Tenant's use of the Premises is materially and
adversely affected due to the taking by eminent domain of part or all of
the Premises or any other part of the Building or appurtenances thereto
including the parking lot, this Lease shall terminate on the date when
title vests pursuant to such taking. The basic rent, and any additional
rent, shall be apportioned as of the termination date and any basic and
additional rent paid for any period beyond the termination date shall be
repaid to Tenant. Tenant shall not be entitled to any part of the award
for such taking or any payment in lieu thereof, but Tenant may file a
separate claim for any taking of fixtures and improvements owned by Tenant
which have not become the Landlord's property, and for moving expenses,
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provided the same shall in no way affect or diminish Landlord's award. In
the event of a partial taking which does not affect a termination of this
Lease but does deprive Tenant of the use of a portion of the Premises,
there shall be an equitable reduction of the basic rent and additional
rent, depending on the period for which and the extent to which the
Premises are not reasonably usable for the purpose for which they are
leased hereunder.
33. Assignment, Subletting.
15.1. If the Tenant shall desire to sublet all or any portion of the
Premises, it shall first submit in writing to the Landlord;
15.1.1. The name and address of the proposed subtenant;
15.1.2. The terms and conditions of the proposed subletting;
15.1.3. The nature and character of the business of the proposed
subtenant;
15.1.4. Banking, financial and other credit information relating
to the proposed subtenant reasonably sufficient to
enable Landlord to determine the proposed subtenant's
financial responsibility; and
15.1.5. Plans and specifications for the layout, partitioning,
HVAC and electrical installations, if any, required for
the Premises to be sublet.
15.2. If the nature and character of the business of the proposed
subtenant, and the proposed use and occupancy of the Premises by the
proposed subtenant, is in keeping and compatible with the dignity
and character of the Building, then Landlord agrees not to
unreasonably withhold or delay its consent to any such proposed
subletting, providing that Tenant shall, by notice in writing as
described in Article 15.1 above, advise Landlord of its intention to
sublease all or any part of the Premises, on and after a stated date
(which shall not be less than sixty (60) days after the date on
which Tenant's notice is given). Landlord shall thereupon have the
right, to be exercised by giving written notice to Tenant within
thirty (30) days after Landlord's receipt of Tenant's notice, to
recapture the Premises. Such recapture notice shall, if given,
cancel and terminate this Lease with respect to the space therein
described as of the date thirty (30) days following the date set
forth in Tenant's notice, or thirty (30) days after Tenant shall
have surrendered possession of the Premises, whichever is later,
with no further obligation due by Tenant with respect to such space.
In the event less than all of the Premises are sublet or recapture,
Tenant or any permitted sublessee shall be obligated to construct
and erect such partitioning and means of ingress and egress as may
be required to sever the space retained by tenant from the space
recaptured or sublet, all in accordance with requirements of Article
11 hereof.
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15.3. If this Lease should be cancelled pursuant to the foregoing with
respect to less than the entire Premises, the basic rent and
additional rent shall be proportionately adjusted, and this Lease,
as so amended, shall continue thereafter in full force and effect.
15.4. In addition to the foregoing requirements, no sublease shall be
made if:
15.4.1 Such sublease shall result in occupancy of the Premises
by more than two (2) tenants, including the Tenant
hereunder, or
15.4.2 The sublease shall be for a term of less than two (2)
years, unless the unexpired term of this Lease shall be
less than (2) years, or
15.4.3. The proposed subtenant shall be an existing tenant of
the Building, or any other building owned by Landlord or
any Affiliate of Landlord, or
15.4.4. Tenant shall be in default under any of the terms or
conditions of this Lease at the time of any notice or
request for consent under the terms of this Article or
at the effective date of such subletting.
15.5. Any subletting which is not recaptured by Landlord shall not in any
event release or discharge Tenant of or from any liability, whether
past, present or future, under this Lease, and Tenant shall remain
liable hereunder with respect to the entire Premises, except as
otherwise provided herein or by law. The subtenant shall also agree
in writing, to assume, comply with, and bound by all of the terms,
covenants, conditions, provisions and agreements of this Lease to
the extent of the space sublet; and Tenant shall deliver to Landlord
promptly after execution, an executed duplicate original copy of
such sublease and an agreement of assumption by the subtenant.
15.6. The sublease must provide that it is subject to all of the terms and
conditions of this Lease and the sublease must provide that in the
event of the expiration or other termination of this Lease for any
reason whatsoever whether voluntary, involuntary or by operation of
law, prior to the expiration date of such sublease, the proposed
subtenant agrees, but only if requested by and at the option of
Landlord, to make full and complete attornment to Landlord for the
balance of the term of the sublease. Such attornment shall be
evidenced by an agreement in form and substance satisfactory to
Landlord, which the proposed subtenant agrees to execute and deliver
at any time within five (5) days after requested of Landlord, it
successors and assigns, and the proposed subtenant waives the
provisions of any law now or hereafter in effect which may give the
proposed subtenant any right of election to terminate the sublease
or to surrender possession
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of the premises in the event any proceeding is brought by Landlord
under this Lease to terminate this Lease.
15.7. Tenant shall be responsible for obtaining all permits and approvals
required by any governmental or quasigovernmental agency for any
work, or as otherwise required in connection with the proposed
sublease of the Premises. Tenant shall also be responsible for and
is required to reimburse Landlord for all costs which Landlord
incurs in reviewing the proposed sublease, including a charge
payable to Landlord in the sum of Five Hundred Dollars ($500.00),
and for the cost of any permits, approvals and applications for the
construction or alteration of the subleased premises.
15.8. The Tenant shall not assign this Lease.
34. Activities Increasing Fire Insurance Rates. Tenant shall not do or suffer
anything to be done in the Premises which will increase the rate of fire
insurance on the Building.
35. Right to Inspect and Repair. Landlord may enter the Premises, but shall
not be obligated to do so (except as required by an specific provision of
this Lease); at any reasonable time on reasonable notice to Tenant (except
that no notice need be given in case of emergency) for the purpose of
inspection or the making of such repairs, replacements of additions, in,
to, and about the Premises or the Property, as Landlord deems necessary or
desirable, provided Landlord shall not unreasonably interfere with
Tenant's business operations at the Property. Landlord shall restore the
Premises to their pre-existing condition if any damage results in
connection with such repairs, replacements or additions by Landlord and
Landlord shall repair any other property damaged in the course of making
such repairs, replacements or additions, the cost f such restoration and
repair to be at landlord's expense. In no event shall Tenant have any
claims against Landlord for necessary and reasonable interruptions of
Tenant's business, or for any other consequential damages sustained by
Tenant in the course of such repairs, replacements or restoration, however
occurring, including those resulting from the negligence of Landlord, its
agents or employees.
36. No Liability of Landlord.
18.1. Landlord and its agents, and employees, shall not be liable for any
loss of or damage to any of Tenant's Property or Tenant's Changes or
to property of others any of which is entrusted to any employee of
the Building, nor shall Landlord, its agents or employees be liable
for any injury or damage to persons or property resulting from fire,
explosion, falling plaster, steam, gas, electricity, water, rain or
snow or leaks from any part of the Building or from the pipes,
appliances or plumbing works or from the roof, street or sub-surface
or from any other place or by dampness or by any other cause of
whatsoever nature, unless caused by and due to the negligence or
wilful misconduct of Landlord, its agents or employees.
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Nothing in this section 18.1 contained shall be deemed to impose on
the Tenant liability for any of the foregoing unless caused by
Tenant.
18.2. Tenant agrees if Tenant, its contractors, agents or employees shall
be negligent, to indemnify, defend and save harmless, Landlord and
its partners, officers, directors, contractors, agents and employees
from and against any property damage and bodily injury liability
(statutory or otherwise), claims, suits, demands, damages,
judgments, costs, fines, penalties, interest and expenses
(including, but not limited to, reasonable attorney's fees) to which
landlord or any such partner, officer, director, contractor, agent
or employee may be subject or suffer by any liability or claim for
any injury to, or death of, any person, for persons or damage to
property (including any loss of use thereof) or otherwise arising
from or in connection with the negligent use and occupancy of the
Premises or the Property, or from, any work; installation or thing
whatsoever done or omitted (other than by Landlord or its
contractors or the agents or employees of either) in the Premises or
on the Property during the Term and during the period of time, if
any, prior to the Commencement Date that Tenant may have been given
access to the Premises, or arising from any default by Tenant in the
performance of Tenant's obligations under this Lease or from any
negligent act or omission of Tenant or any of Tenant's agents,
contractors, employees, subtenants, licensees, or invitees.
18.3. Tenant shall reimburse and compensate Landlord as additional rent
within five (5) days after rendition of a statement for all
expenditures made by or losses, damages or fines sustained or
incurred by Landlord (including, but not limited to, reasonable
attorney's fees) due to the operation of this Article 18 or
non-performance or non-compliance with or breach or failure by
Tenant to observe any term, covenant or condition of this Lease.
37. Services to be Provided by Landlord; Landlord's Exculpation. While Tenant
is not in default under any of the provisions of this Lease, Landlord
agrees to furnish during Building Hours, except on Holidays, the cleaning
services set forth on Exhibit "C" attached hereto, subject to the
conditions therein stated; heating, ventilating and ordinary
air-conditioning ("HVAC"), as appropriate for the season; and Common
Facilities cleaning, maintenance and lighting.
19.1 Notwithstanding the requirements of any provision of this Lease,
Lessor shall not be liable for failure to furnish any of the
aforesaid services when such failure is due to Force Majeure.
Landlord shall not be liable, under any circumstances, including
negligence of Landlord, its agents and employees, for loss of, or
injury to, Tenant or Tenant's business or property however
occurring, through or in connection with or incidental to the
furnishing of, or failure to furnish, any of the aforesaid services.
19.2. Lessee's use of HVAC in excess of Building Hours shall result in a
direct charge to Tenant to reflect such additional consumption, as
determined by Landlord's
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independent electrical consultant, which charge shall be payable by
Tenant to Landlord within ten (10) days after demand by Landlord.
19.3. This Lease and obligations of Tenant to pay rent hereunder and to
perform all of the other covenant and agreements hereunder on the
part of Tenant to be performed shall in no way be affected, impaired
or excused if Landlord is unable to supply or is delayed in
supplying any service expressly or impliedly to be supplied or is
unable to make, or is delayed in making repairs, additions,
alterations or decorations or is unable to supply or is delayed in
supplying any equipment or fixtures.
19.4. Landlord reserves the right, without being liable to Tenant and
without abatement or diminution in rent, to suspend, delay or stop
any of Building services to be furnished and provided by Landlord
under this Lease whenever necessary by reason of Force majeure, or
for emergency, or for inspection, cleaning, repairs, replacements,
alterations, improvements or renewals which, in Landlord's
reasonable judgment, are desirable or necessary to be made. Landlord
agrees, however, to use its best efforts and to act with all due
diligence to restore or have restored any services which may be
suspended, delayed or stopped.
38. Electricity. The cost of electrical current which shall be supplied by
Landlord for use by Tenant in the Demised Premises, other than for heating
or air-conditioning purposes, shall be reimbursed to Landlord by Tenant at
terms, classifications and rates normally charged by the public utilities
corporation serving that part of the municipality where the Property is
located. In the event Landlord does not install a separate electric meter
or meters for the Demised Premises or any other part of the Property used
exclusively by Tenant, the provisions of Section 20.1 shall be applicable.
20.1. Tenant agrees that Landlord's independent electrical engineering
consultant shall make a survey of the electrical power demand of the
electric lighting fixtures and the electric equipment used by Tenant
at the Property to determine the average monthly electric
consumption thereof. The findings of said consultant as to the
average monthly electric consumption of Tenant shall, unless
objected to by Tenant within thirty (30) days after notice to Tenant
of said findings, be conclusive and binding on Landlord and Tenant.
After Landlord's consultant has submitted its report to Landlord,
Tenant shall pay to Landlord as additional monthly rent of One
Hundred Eighty Dollars ($180.00) which is a fixed additional rate
that shall not be diminished, reduced or mitigated as a result of
Tenant's failure to use electricity in subject premises, Tenant's
abandonment of subject premises or Tenant's vacator of subject
premises, within ten (10) days after demand therefore by Landlord,
the amount (based on the monthly consumption found by such
consultant and the applicable utility rates) determined by said
consultant as owing from the Commencement Date, through the then
expired months of the Term, to include the then current month.
Thereafter, on the first day of every month, in advance, Tenant
shall pay the amount set forth as the
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monthly consumption in said report, as additional rent.
Proportionate sums shall be payable for periods of less than a full
month if the Term commences on any day other than the first day of
the month. If Tenant objects to said findings, Tenant shall
nevertheless pay and continue to pay the amount determined by
Landlord's consultant. Upon objection by Tenant, Tenant shall retain
a qualified consultant and if landlord's and Tenant's consultants
cannot agree as to Tenant's consumption within ten (10) days of
Tenant's consultant's findings, either Landlord or Tenant may
request the American Arbitration Association to appoint a qualified
electrical engineering consultant whose decision shall be final and
binding on Landlord and Tenant, and whose costs shall be shared
equally. Upon the issue being finally resolved and any overpayment
made by Tenant shall be refunded by Landlord, and any underpayment
shall be paid by Tenant as additional rent.
20.2. In the event that there shall be an increase or decrease in the rate
schedule (including surcharge or demand adjustments), of the public
utility service to the Building, or the imposition of any tax with
respect to such service or increase in any such tax following the
Lease Term's commencement, the additional rent payable under this
Article 20 shall be adjusted equitably to reflect the increase or
decrease in rate or imposition or increase in the aforesaid tax. All
computation shall be made on the basis of Tenant's surveyed usage as
if a meter measuring such usage to the Premises exclusively was in
place.
20.3. Tenant covenants that it shall not introduce any equipment or
lighting material different from that on the Property as of
Landlord's electrical survey or in addition to the aforesaid
equipment or lighting on the Property as of said survey without
Landlord's prior written consent. In no event shall Tenant's use of
electricity in the Premises at any time exceed the capacity of any
electrical conductors and equipment in or otherwise serving the
Premises. The introduction of any new or different equipment or
lighting approved by Landlord shall be cause for a resurveying of
the Premises at Tenant's expense by Landlord's electrical
consultant, subject to Tenant's rights and obligations as contained
in Section 20.1. above. Landlord reserves the right to inspect the
Premises to insure compliance with this provision.
20.4. Landlord shall not be liable in any way to Tenant, for any loss,
damage or expense which Tenant may sustain or incur as a result of
any failure, defect or change in the quantity or character of
electrical energy available for redistribution to the Premises nor
for any interruption in the supply of electricity and Tenant agrees
that such supply may be interrupted for inspection, repairs,
replacement and in emergencies. In no event shall Landlord be liable
for any business interruption suffered by Tenant.
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20.5. Tenant shall furnish and install all replacement lighting tubes,
lamps, ballasts and bulbs required in the premises, at Tenant's
expense, and at Landlord's option, shall purchase same from
Landlord.
20.6. Lessee's use of electrical service as contemplated herein shall be
during Building Hours, and any use in excess of said Building Hours
shall result in an adjustment computed as set forth in Section 20.1
above to reflect such additional consumption.
39. Bankruptcy of Tenant.
21.1. Upon the filing of a petition by or against Tenant under the U.S.
Bankruptcy Act of 1978, as amended or under any other law relating
to bankruptcy, Tenant, as debtor or as debtor in possession, and any
trustee who may be appointed, agree to perform each and every
obligation of Tenant under this Lease until such time as this Lease
is either rejected or assumed by order of the Court having
jurisdiction thereof; to pay monthly in advance on the first day of
each month as reasonable compensation for use and occupancy of the
Demised Premises an amount equal to all rent and other charges
otherwise due pursuant to this Lease; to reject or assume this Lease
within sixty (60) days of the filing of such petition under Chapter
7 of the Bankruptcy Act or within one hundred twenty (120) days (or
such shorter term as Landlord in its sole discretion, may deem
reasonable so long as notice of such period is given) of the filing
of a petition under any other Chapter; to give Landlord at least
forty-five (45) days prior written notice of any proceeding relating
to any assumption of this Lease; to give at least thirty (30) days
prior written notice of any abandonment of the Premises, any such
abandonment to be deemed a rejection of this Lease; to do all other
things of benefit to Landlord otherwise required under the
Bankruptcy Act; to be deemed to have rejected this Lease in the
event of the failure to comply with any of the above; and to have
consented to the entry of an order by an appropriate United States
Bankruptcy Court providing all of the above, waiving notice and
hearing of the entry of same.
21.2. No default under this Lease by Tenant, either prior to or subsequent
to the filing of such a petition, shall be deemed to have been
waived unless expressly done so in writing by Landlord.
40. Defaults.
22.1 In the event that:
22.1.1. Tenant defaults in the payment of any basic rent or any
additional rent and such default continues for three (3)
days after the same has become due;
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22.1.2. Tenant defaults in fulfilling any of the covenant or
agreements of this Lease on its part to be kept or
performed and such default is not cured within fifteen
(15) days after written notice from Landlord or its
agent or if such default is of such nature that it
cannot be completed cured within such period, Tenant
does not commence such curing within fifteen (15) days
and thereafter fails to proceed with due diligence and
in good faith to cure such default; or
22.1.3. This Lease is transferred to or dissolves by merger,
consolidation or operation of law upon person, firm or
corporation other than Tenant, except as may be
specifically permitted by this Lease;
22.1.4. A receiver is appointed to take possession of all or
substantially all of the Tenant's assets or Tenant makes
a general assignment for the benefit of creditors or
Tenant takes any action or suffers to be taken any
action under any insolvency or bankruptcy act; or
22.1.5. Tenant abandons the Premises or Tenant fails to take
possession of the Premises within ten (10) days after
the Commencement Date; then and in any of such events,
Landlord or its agent, may give Tenant written notice
specifying a day not less than five (5) days thereafter
whereupon if the default is not cured the Term shall
end, and on the day specified the Term shall expire as
if that day were the day herein fixed for the expiration
of the Term, and Tenant shall then quit and surrender
the Premises to Landlord and Tenant shall remain liable
as herein provided.
22.2 Upon the occurrence of any of the events specified in Section 22.1,
and after the expiration of any applicable grace period, Landlord
may re-enter the Premises and remove Tenant by summary proceedings
or otherwise. In case of any such re-entry, expiration of the Term
and/or dispossess by summary proceedings or otherwise, the basic
rent and additional rent shall become due and payable up to the time
of such re-entry, dispossess and/or expiration, together with such
reasonable expenses as Landlord may incur in obtaining possession of
the Premises (including, but not limited to, reasonable attorneys'
fees, brokerage fees and/or the cost of putting the Premises in good
order, and for preparing the same for re-rental) but Tenant shall
not be responsible for substantial "build to suit" types of
expenses.
Landlord may relet the Premises or any part or parts thereof, for a
term or terms which may at Landlord's option be less than or exceed
the period which may otherwise have constituted the balance of the
Term and may grant reasonable concessions, or free rent and Tenant
shall not be credited therewith; and Tenant or the legal
representatives of Tenant shall also pay Landlord as liquidated
damages
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for the failure of Tenant to observe and perform said Tenant's
covenants herein contained, any deficiency between all basic rent
and additional rent hereby reserved and/or covenanted to be paid and
the net amount, if any, of the basic and additional rents collected
on account of the Lease of the Premises for the period which would
otherwise have constituted the balance of the Term. Any such
liquidated damages shall be paid in monthly installments by Tenant
on the rent days specified in the Lease, until Landlord or Tenant
shall elect to accelerate the payment of such liquidated damages in
which event Tenant shall pay Landlord, within ten (10) days after
Landlord's demand, an amount equal to such deficiency above
discounted to present value by allowing interest at the rate of four
(4%) percent per annum. Any suit brought to collect the amount of
such deficiency for any month shall not prejudice in any way the
rights of Landlord to collect the deficiency for any subsequent
month by a similar proceeding. Landlord shall not be liable for
inability to relet the Demised Premises. The words "re-enter" or
"re-entry" as used in this Lease shall not be restricted to their
technical legal meaning. Tenant shall not be entitled to any surplus
accruing to Landlord as a result of any reletting and no such
reletting shall constitute a surrender and acceptance or be deemed
evidence thereof. Tenant hereby waives all rights of redemption to
which Tenant or any person under Tenant might be entitled by any law
now or hereafter in force.
22.3. In the event of a breach or threatened breach by Tenant of any of
the covenants or provisions of this Lease, Landlord shall have the
right of injunction and the right to invoke any remedy allowed at
law or in equity as if re-entry, summary proceedings and other
remedies were not herein provided for. Mention in this Lease of any
particular remedy shall not preclude Landlord from any other remedy,
in law or in equity.
22.4. If Tenant shall default in the performance of any provision,
covenant or condition on its part to be performed under this Lease,
Landlord may, at its option, perform the same for the account and at
the expense of Tenant. If Landlord at any time shall be compelled to
pay or elects to pay any sum of money or do any act which requires
the payment of any sum of money by reason of the failure of the
Tenant to comply with any provision of this Lease, or if Landlord
incurs any expense including reasonable attorneys fees in
prosecuting or defending any action or proceeding by reason of any
default of Tenant under this Lease, the sums so paid by Landlord,
with interest at the lesser of the rate of eighteen (18%) percent
per annum or the maximum rate permitted by law, together with costs
and damages shall be due from and be paid by Tenant to Landlord on
demand as additional rent hereunder.
41. Excavations. If an excavation or other construction shall be undertaken
with Landlord's approval upon land adjacent to the Building, Tenant shall
afford to the party performing such work permission to enter upon the
Premises for the purpose of doing such work as such part deems necessary
to preserve any wall, or the Building, from injury or damage
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and to support the same by proper foundations, without the same
constituting an eviction of Tenant, in whole or in part, and without any
claim for damages or indemnity against Landlord, or diminution or
abatement of rent. The party performing such work shall use reasonable
efforts to minimize interference with, or interruption of, Tenant's
business operations, and shall expeditiously repair any damage caused to
the Premises as a result of such work.
42. Adjustments to Basic Rent. The annual basic rent reserved in this Lease
and payable hereunder shall be adjusted, as of the times and in the manner
set forth in this Article.
(a) Definitions: For the purposes of this Article, the following
definitions shall apply:
(i) The term "Price Index" shall mean the "Consumer Price Index"
for All Urban Consumers as published by the Bureau of Labor
Statistics of the U.S. Department of Labor from time to time,
New York, New York-Northeastern, New Jersey, all items
(1982-84 = 100), or a successor or substitute index
appropriately adjusted.
(ii) The term "Initial Price Index" shall mean the Price Index in
effect during the month in which this lease is executed by the
parties.
(b) Effective as of the basic rent payment due on the first day of
January following the Commencement Date, or if said date is less
than six (6) months after the Commencement Date, then effective as
of the first day of July following the Commencement Date, and every
January and July thereafter during the Term of this Lease, there
shall be made a cost of living adjustment in the annual basic rent
payable hereunder (it being the intention of the parties that the
basic rent adjustment provided for in this Article shall be made
every six (6) months after, the first adjustment is made). Each
adjustment shall be based on the percentage difference between the
Price Index in effect for the month immediately preceding the
applicable adjustment period and the Initial Price Index.
(i) In the event the Price Index for the month immediately
preceding the period for which the adjustment is to be made
reflects an increase over the Initial Price Index, than the
annual basic rent to be paid pursuant to Article 5.1(a) hereof
(unchanged by any adjustments under this Article) shall be
multiplied by the percentage difference between the Price
Index for such immediately preceding month and the Initial
Price Index, and the resulting sum shall be added to such
annual basic rent, effective as of the adjustment date. Said
adjusted annual basic rent shall thereafter be payable
hereunder, in equal monthly installments, until it is
readjusted pursuant to the terms of this Lease. In no event
shall the annual basic rent payable during the first
adjustment period be less than the annual basic rent payable
pursuant to the provisions of Article 5.1(a) of this Lease. In
no event shall the annual basic rent payable during any
subsequent
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adjustment period be less than the annual basic rent payable
during the immediately preceding adjustment period.
The following illustrates the intentions of the parties hereto
as to the computation of the aforementioned cost of living
adjustment in the annual basic rent payable hereunder:
If the Lease is fully executed on March, 1989, and the
Commencement Date is June 1, the first basic rent adjustment
would be effective on January 1, 1990. Assuming that the
annual basic rent is initially $10,000.00, and the Initial
Price Index was 102.0, if the Price Index for the month of
December, 1989, was 105.0, then the percentage increase thus
reflected, e.g., 2.949% (3.0/102.0) would be multiplied by
$10,000.00, and the annual basic rent would be increased by
$249.10, and effective as of January 1, the monthly payment of
basic rent would be increased from $833.33 to $854.09. The
annual basic rent would be adjusted again on July 1, 1990, by
comparing the Initial Price Index and the Price Index for June
of such calendar year, and the percentage increase reflected
would be multiplied by $10,000.00 to determine the applicable
increase in the annual basic rent. Adjustments to the basic
annual rent would continue to be made every six (6) months
during the Term.
In the above example, if the Commencement Date was August 1,
1989, the first adjustment to the annual basic rent would be
made for the six (6) month period commencing on July 1, 1990.
Subsequent adjustments would be made every six (6) months
thereafter.
In the event that the Price Index ceases to use 1982-84 = 100
as the basis of calculation or if a substantial change is made
in the terms or number of items contained in the Price Index,
then the Price Index shall be adjusted to the figure that
would have been arrived at had the manner of computing the
Price Index in effect at the date of this Lease not been
altered. In the even such Price Index (or a successor or
substitute index) is not available, a reliable governmental or
other non-partisan publication evaluating the information
theretofore use din determining the Price Index, as selected
by Landlord in its reasonable judgment shall be used.
No adjustment or recomputations, retroactive or otherwise,
shall be made due to any revision which may later be made in
the first published of the Price Index for any month.
(c) Landlord will cause statements of the cost of living and
adjustments provided for in subparagraph (b) above to be
prepared in reasonable detail and delivered to Tenant.
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(d) Any delay or failure of Landlord, in computing or billing for
the rent adjustments hereinabove provided, shall not
constitute a waiver of or in any way impair the continuing
obligation of Tenant to pay such rent adjustment hereunder and
Tenant shall pay the rent adjustment for the expired months of
the applicable adjustment period within ten (10) days after
Tenant's receipt of notice of the adjustment from Landlord.
(e) Notwithstanding any expiration or termination of this Lease
prior to the lease expiration date (except in the case of a
cancellation by mutual agreement) Tenant's obligation to pay
rent as adjusted under this Article shall continue and shall
cover all periods up to the Lease expiration date, and shall
survive any expiration or termination of this Lease.
43. Partial Invalidity. If any provision of this Lease or any application
thereof to any person or circumstance shall be determined to be invalid or
unenforceable, the remaining provisions of this Lease or the application
of such provision to persons or circumstances other than those to which it
is held invalid or unenforceable shall not be affected thereby and shall
be valid and enforceable to the fullest extent permitted by law.
44. Estoppel Certificate. Tenant agrees, at any time, and from time to time,
upon not less than ten (10) days prior notice by Landlord, to execute,
acknowledge and deliver to Landlord, a statement, in writing, addressed to
Landlord and to any mortgagee, prospective mortgage, or any other party
specified by Landlord, certifying that this Lease is unmodified and in
full force and effect (or, if there have been modifications, describing
them), the improvements required pursuant to Article 11 have been made and
completed (if applicable) and stating that Tenant has accepted possession;
the dates to which base rent, additional rent and other charges have been
paid, the date on which the Term of the Lease commenced and stating
whether or not to the best knowledge of the signer of such certificate,
there exists any default by either party in the performance of any
covenant, agreement, term, provision or condition contained in this Lease,
and, if so, specifying each such default of which the signer may have
knowledge, and stating any other fact or certifying any other condition
reasonably requested by Landlord or reasonably required by any mortgagee,
prospective mortgagee or purchaser or assignees of such mortgagee or of
Landlord, it being intended that any such statement delivered pursuant
hereto may be relied upon by Landlord or a purchaser of Landlord's
interest and by any mortgagee or prospective mortgagee. Tenant hereby
agrees to deliver an Estoppel Certificate to Landlord on or before the
Commencement Date of this Lease.
45. Holding Over. In the event that Tenant shall remain in occupancy of the
Premises for any period beyond the expiration of the Term of this Lease or
any renewals or extensions thereof, such occupancy shall be deemed to be a
month-to-month tenancy at a monthly rental equal to twice the sum of the
basic rent and additional rent payable for the last month of the Term, and
Tenant shall be liable for any additional damages that might be suffered
by Landlord as a result of Tenant's failure to vacate the Premises and
deliver possession thereof to Landlord as required by this Lease. The
acceptance of rent by
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Landlord shall not be deemed to create a new or additional tenancy other
than as aforesaid.
46. Landlord's Right to Enter. Landlord shall have the right to enter upon the
Premises at all reasonable hours for the following purposes: to inspect or
protect the same; to effect compliance with any law, order or regulation
of any governmental authority having jurisdiction; to exhibit the same to
prospective purchasers, lenders or lessees; to make or supervise repairs,
additions or alterations to the Premises or the Building, and to take all
required materials into the Premises for such purposes; to erect, use and
maintain pipes and conduits in and through the Premises; and to alter,
decorate or otherwise prepare the Premises for reoccupancy but only after
Tenant has vacated the same or shall have removed substantially all of its
property therefrom provided that all of the above is done in conjunction
with Tenant so as to minimize any interruption of Tenant's business
activity so as to meet the objectives of both parties. None of the
foregoing shall constitute an actual or constructive eviction of Tenant or
a deprivation of its rights, not subject Landlord to any liability or
impose upon Landlord any obligation, responsibility or liability
whatsoever, for the care, supervision or repair of the Building of which
the Premises are a part, or any part thereof, other than as herein
specifically provided, or entitle Tenant to any compensation or diminution
or abatement of the rent reserved.
47. No Waiver; Entire Agreement; No Surrender.
29.1. The failure of Landlord or Tenant to seek redress for violation of,
or to insist upon the strict performance of any covenant, agreement,
term, provision or condition of this Lease, or any of Landlord's
Rules and Regulations shall not constitute a waiver thereof and
Landlord shall have all remedies provided herein and by applicable
law with respect to any act, which would have originally constituted
a default by Tenant. The receipt by Landlord of basic rent or
additional rent with knowledge of the breach of any covenant,
agreement, term, provision or condition of this Lease shall not be
deemed a waiver of such breach. The failure of Landlord to bill or
collect rent in a timely fashion shall not be construed as a waiver
of Landlord's right to collect rent at any time during the Term or
any time thereafter.
29.2. This Lease with the schedules, riders and exhibits, if any, annexed
hereto contains the entire agreement between Landlord and Tenant,
and any agreement hereafter made between Landlord and Tenant shall
be ineffective to change, modify, waiver, release, discharge,
terminate or effect a surrender or abandonment of this Lease, in
whole or in part, unless such agreement is in writing and signed by
the party against whom enforcement is sought. If Tenant shall have
any right to an extension or renewal of the Term, or any right to
lease other space from Landlord or any Affiliate of the Landlord,
Landlord's exercise of Landlord's right to terminate this Lease
shall operate automatically and without any further action or notice
on the part of Landlord to terminate such renewal, extension or
other right, whether or not theretofore exercised by Tenant.
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29.3. No employee of Landlord or of Landlord's agents shall have any power
to accept the keys of the Demised Premises prior to the termination
of the Lease. The delivery of keys to any employee of Landlord or of
Landlord's agents shall not operate as a termination of the Lease or
a surrender of the Premises. In the event of Tenant at any time
desiring to have Landlord sublet the Premises for Tenant's account,
Landlord or Landlord's agents are authorized to receive the keys for
such purposes without releasing Tenant from any of the obligations
under this Lease. Tenant hereby relieves Landlord of any liability
for loss or damage to any of Tenant's effects in connection with
such subletting.
48. Landlord's Covenants of Quiet Enjoyment. Landlord covenants and agrees
that if and so long as Tenant pays the rent herein reserved, and performs
and observes the covenants, conditions and agreements hereof upon the part
of the Tenant to be performed and observed, Landlord shall do nothing to
affect Tenant's right to peaceably and quietly have, hold and enjoy the
Premises for the term herein mentioned, subject to the provisions of this
Lease.
49. Indemnity and Tenant's Insurance.
31.1. Tenant shall indemnify and hold harmless Landlord, its invitees,
employees or assigns from and against any and all claims arising
from Tenant's negligence or intentional acts (A) in Tenant's use of
the Premises and any other part of the Property, or (B) from the
conduct of Tenant's business of (C) from any activity, work or
things done, permitted or suffered by Tenant in or about the
Premsies or elsewhere, and shall further indemnify and hold harmless
Landlord from and against any and all claims arising from any breach
or default in the performance of any obligation on Tenant's part to
the be performed under the Terms of this Lease, or arising from any
negligence of the Tenant, or any of Tenant's employees and from and
against all costs, reasonable attorneys fees, expenses and
liabilities incurred in the defense of any such claim or any action
or proceeding brought thereon; and in case any action or proceeding
be brought against Landlord by reason of any such claim, Tenant,
upon notice from Landlord, shall defend the same at Tenant's expense
by counsel reasonably satisfactory to Landlord. Provided, however,
Tenant shall not be obligated to indemnify Landlord from any
liability caused by or resulting from the negligence or intentional
act of Landlord, its invitees, contractors, agents or employees, or
from the act of any third party not associated with Tenant.
31.2. Tenant shall pay, provide and keep in force during the Term hereof,
Comprehensive General Liability Insurance against claims for bodily
injury, death or property damage occurring on, in or about the
Premises or any appurtenances thereto, arising out of Tenant's
negligence or intentional act in the operation and control of the
Premises, including, but not limited to, any liability of Landlord
to
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third parties arising out of the negligent or intentional act of
Tenant or its employees, in total limits of not less than
$1,000,000.00 in respect to bodily injury or death to any one
person, and $300,000.00 in respect to any one occurrence, accident
or disaster, and property damage with limits of not less than
$500,000.00 or such other amounts as may from time to time be
reasonably required by Landlord, or the holder of the first
mortgage. Tenant shall cause Landlord and any mortgagee to be named
as an additional insureds on said liability insurance.
31.3. Tenant covenants and represents, said representation being
specifically designed to induce Landlord to execute this Lease, that
Tenant's personal property, fixtures and all improvements,
alterations and additions made by Tenant, and any other items which
Tenant may bring to the Premises which may be subject to any claim
for damages or destruction due to Landlord's negligence shall be
fully insured by a policy of insurance covering all risks of loss
with no deductible which such policy shall specifically provide for
a waiver of subrogation for Landlord without regard to whether or
not same shall cost an additional premium and notwithstanding
anything to the contrary contained in this Lease.
31.4. Tenant shall, at its expense, provide and keep in full force for the
benefit of Landlord and Tenant, rent insurance in an amount at least
equal to the then annual basic rent payable hereunder, plus the
additional rent payable by Tenant for the proceeding twelve (12)
month period, and the cost of the annual premiums required to be
paid for the coverages provided for under this Article. Tenant
hereby assigns to lessor all of its right, title and interest in and
to the rent insurance proceeds to be held by lessor as security for
the payment of the rent and additional rents due hereunder until
restoration of the Demised Premises or expiration of the Term.
31.5. Tenant shall provide and keep in force such other insurance and in
such amounts as may, from time to time, be reasonably required by
Landlord, or any mortgagee, wherein Landlord is named as an
additional named insured, or by the holder of any mortgage to which
this Lease is subject, against such other insurable hazards as at
the time are normally insured against in cases of premises similarly
situated and similarly used.
31.6. All insurance required to be provided by Tenant by the provisions of
this Article shall be carried in favor of Landlord, Tenant, and any
mortgagee, as their respective interests may appear, in such
responsible companies and in such form as shall be reasonable
satisfactory to Landlord and to the holder of any mortgage to which
this Lease is subject and subordinate.
31.7. Cancellation of Insurance. All policies referred to hereunder, and
required to be procured by Tenant, shall be paid for by Tenant and
shall be non-assessable and shall require thirty (30) days prior
notice by the insurer by registered mail to
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landlord, and to the holder of any mortgage to which this Lease is
subject and subordinated, of any cancellation thereof or change
therein affecting the coverage hereunder.
31.8. Landlord to Insure. If Tenant fails to procure the insurance as
required hereunder, Landlord reserves the unqualified right at any
time, after ten (10) days notice, to secure any insurance that is
required of Tenant at Tenant's expense. On Landlord's demand,
reimbursement shall be made by Tenant, as additional rent.
31.9 Evidence of Insurance. Tenant shall procure policies for all said
insurance for periods of not less than one (1) year and shall
deliver to Landlord evidence of insurance and of the payment of
premiums thereon within ten (10) days after the date hereof, and
shall procure renewals thereof from time to time, delivering
certificates of said renewals to the Landlord at least thirty (30)
days before the expiration thereof, together with such evidence of
payment as is provided by the insurance carrier.
31.10.Waiver of Subrogation. Subject to their ability to obtain
appropriate endorsements from their respective insurance carriers,
Tenant and lessor each waive any and all rights of recovery against
the other and against the officers, employees, agents, and
representatives of the other, for loss or damage, etc., to such
waiving party or its property or the property of others under its
control where such loss or damage is insured against under any
insurance policy in force at the time of such loss or damage. In
obtaining policies of insurance required by this Lease, lessor and
Tenant shall obtain a waiver of subrogation endorsement or an
express provision in the policy having that effect. In the event
that any insurer imposes a charge for making such waiver
endorsement, the charge shall be paid by the respective party; and,
in the event that either party fails to obtain such a waiver
endorsement from its insurer, then the other party shall be likewise
relieved from its obligation to do so. Nothing in this paragraph
shall be construed as a waiver of recovery rights with regard to
damages not compensated by insurance.
50. Attorney's Fees. Tenant agrees to pay to Landlord upon demand, as
additional rent, a sum equal to all costs and expenses (including
reasonable attorney's fees) incurred by Landlord during or after the Term
in enforcing all or any of Landlord's rights under this Lease because of a
breach by Tenant, whether or not an action or proceeding is commenced, or
levying and collecting on any judgment in Landlord's favor.
51. Broker. Tenant and Landlord warrant and represent to each other that there
are no brokers who negotiated or brought about this transaction other than
DJM Group. Tenant and Landlord shall indemnify, defend and hold each other
harmless from any and all claims for any brokerage commissions or other
compensation asserted by any other broker or person in connection with
this Lease, arising from the respective acts of Tenant or Landlord, and
their respective expenses (including reasonable attorney's fees) related
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thereto. Landlord agrees to pay a broker's commission to DJM Group with
respect to this Lease, pursuant to separate agreement.
52. Execution by Landlord. The submission of this Lease Agreement for
examination does not constitute a reservation of or option for the
Premises and this Lease shall be of no force and effect whatsoever unless
it shall have been executed by the Landlord.
53. Recordation. Tenant covenants not to place this Lease or the Commencement
Date certificate referred to in Section 7.2 on record. At the request of
Landlord, Tenant will execute a memorandum of Lease for recording purposes
containing references to such provisions of this Lease as Landlord, in its
sole discretion, shall deem necessary.
54. Subordination.
36.1. This Lease, any amendments, extensions, options (if any) and any
other rights granted to Tenant hereunder shall be subject and
subordinate at all times in lien and priority to any and all present
and future ground and underlying leases affecting all or any part of
the Property or Building and to any and all mortgages which may now
or hereafter be placed on or affect such leases, and/or the Property
or Building, and to all renewals, modifications, consolidations, and
extensions thereof, without the necessity of any further instrument
or act on the part of Tenant. Tenant shall execute and deliver upon
demand any further instrument or instruments confirming the
subordination of this Lease to the lien of any such ground and/or
underlying lease or mortgage if requested to do so by Landlord, and
any further instrument or instruments of attornment that may be
reasonably desired by any such lessee, mortgagee or Landlord. Tenant
hereby irrevocably appoints Landlord attorney-in-fact to execute and
deliver any such instrument for Tenant in the event Tenant fails to
execute and deliver same within five (5) days after demand by
Landlord. Notwithstanding the foregoing, any mortgagee may at any
time subordinate its mortgage to this Lease without Tenant's
consent, by giving notice in writing to Tenant, and thereupon this
Lease shall be deemed prior to such mortgage without regard to their
respective dates of execution and delivery, and in that event, such
mortgagee shall have the same rights with respect to this Lease as
though this Lease had been executed prior to the execution and
delivery of the mortgage and had been assigned to such mortgagee. If
requested by Tenant, Landlord agrees to use its best efforts to
obtain a nondisturbance agreement from any Mortgagee which has
agreed to provide same, in form reasonably satisfactory to any such
Mortgagee.
36.2. In the event of any act or omission by Landlord or Tenant which
would give the other party the right to terminate this Lease or
claim a partial or total eviction, or claim against Landlord for the
payment of money, Tenant will not exercise such right until it has
given written notice of such act or omission to Landlord and the
mortgagee and a reasonable period for remedying such act or omission
shall have elapsed following the giving of such notices, during
which period of time the
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Landlord or the Mortgagee or any of them, with reasonable diligence
following the giving of such notice, has not commenced and continued
diligently to remedy such act or omission. Nothing herein contained
shall be deemed to create any rights in Tenant not specifically
granted in this Lease or under any applicable provision of law, nor
any obligation on the part of the Mortgagee to remedy any act or
omission of Landlord.
55. Notices. Any notice, request or demand permitted or required to be given
by the terms and provisions of this Lease, or by any law or governmental
regulation, either by Landlord to Tenant or the Tenant to landlord, shall
be in writing, and shall be delivered by hand or courier service, or
mailed by registered or certified mail, return receipt requested,
addressed if to Tenant, to Attention: Patrick McLaren, Perma Grass
Corporation, 377 Route 17 South, Suite 116, Hasbrouck Heights, New Jersey
07604 and if to Landlord, Satnick Development Corporation at 377 Route 17
South, Hasbrouck Heights, New Jersey 07604, with a copy to:
Such notice, request or demand shall be deemed given when actually
delivered or if mailed, when received by the addressee as evidenced by the
return receipt, or if refused, the date on which delivery was first
attempted as evidenced by the postal records. Either party may from time
to time, by notice as aforesaid, designate a different address for
notices, requests or demand.
56. Personal Property Taxes. Tenant agrees to pay all taxes imposed on the
Property of Tenant for its use and occupancy of the Premises, and to hold
Landlord harmless therefrom.
57. Property Changes. This Lease shall not be affected or impaired by any
change to, or easements or other rights granted in, any lawns, sidewalks,
driveways, curb cuts or streets adjacent to or around the Property, except
as provided in the provisions of this Lease dealing with condemnation.
58. Persons Bound. The covenants, agreements, terms, provisions and conditions
of this Lease shall bind and inure to the benefit of the respective heirs,
distributees, executors, administrators, successors, assigns and legal
representatives of the parties hereto with the same effect as if mentioned
in each instance where a party hereto is named or referred to, but nothing
herein contained shall be construed to give Tenant the right to assign
this Lease. The covenants and obligations on the part of Landlord under
this Lease shall not be binding upon Landlord herein named with respect to
any period subsequent to the transfer of its interest in the Building, by
operation of law or otherwise, and in the event of such transfer or any
subsequent transfer, Tenant agrees to look solely to the transferee fr the
performance of Landlord's covenants and obligations, but only with respect
to the period beginning with such transfer and ending with a subsequent
transfer of such interest, and all acts, covenants or obligations due on
the part of Landlord during its ownership shall survive any act of
transfer of the fee title to or leasehold interest in the Property.
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59. Miscellaneous Conditions.
41.1. This Lease is expressly conditioned upon Landlord receiving the
consent and approval of Landlord's mortgagee to its terms and
provisions not later than sixty (60) days after its execution and
delivery by both parties, failing which, Landlord may cancel this
Lease and Tenant's deposit and any rent paid shall be returned
without further obligation of the parties. To enable the Landlord to
satisfy the requirements of any present or future mortgagee, if any
mortgagee requires modifications to this Lese, provided such
modifications do not materially alter the approved plans and
specifications of Tenant and do not increase the rent or materially
and adversely affect any other rights of Tenant hereunder, Landlord
shall submit to Tenant a written amendment of this Lease containing
such required modifications. If Tenant fails to execute and return
such amendment within ten (10) days after the amendment has been
received by Tenant, Landlord shall have the right to cancel this
Lease upon written notice to Tenant, whereupon this Lease shall
immediately be cancelled and terminated, any money or security
deposited by Tenant with Landlord shall be returned to Tenant and
both Landlord and Tenant shall thereupon be relieved from any and
all further liability or obligation hereunder.
60. Miscellaneous.
42.1. Tenant agrees that neither Landlord, nor Landlord's agents,
employees or representatives nor any other party has made, and
Tenant does not rely on, any representations, warranties or promises
with respect to the Building, the Property, the Premises or this
Lease, except as herein expressly set forth.
42.2. The Article headings of this Lease are for convenience only and
shall not limit or define the meaning or content hereof. All
pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, neuter, singular or plural, as the identity of
the person or persons may require.
42.3. Anything elsewhere to the contrary notwithstanding, Tenant shall
look solely to the estate of Landlord in the property for the
satisfaction of each and every remedy of Tenant in the event of any
default or breach by Landlord with respect to any of the terms,
covenants and conditions of this Lease to be observed and/or
performed by Landlord, and no other property or assets of Landlord
or any officer, director, shareholder or general partner of Landlord
or their respective successors and assigns shall be subject to levy,
execution or other enforcement procedure for the satisfaction of
Tenant's remedies, such exculpation of liability to be absolute and
without any exceptions whatsoever.
42.4. Except with respect to the signage provided for Tenant in the Work
Letter, Tenant shall not place any sign on the exterior of the
Building without Landlord's
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consent. Any sign placed on the exterior of the Building shall
comply with all applicable governmental regulations and be of a
style and set in a location which would not, in the option of the
Landlord, give the impression that the Tenant is the only occupant
of the Building.
42.5. If Tenant is a corporation, each individual executing this Lease on
behalf os aid corporation represents and warrants that he is duly
authorized to execute and deliver this Lese on behalf of said
corporation in accordance with a duly adopted resolution of the
Board of Directors of said corporation or in accordance with the
By-Laws of said corporation, and that this Lease is binding upon
said corporation in accordance with its terms. If Tenant is a
corporation, Tenant shall, simultaneously with the execution of this
Lease, deliver to Landlord a certified copy of a resolution of the
Board of Directors of said corporation authorizing or ratifying the
execution of this Lease.
IN WITNESS WHEREOF, this Lease has been executed and delivered as of the
____ day of _________________, _____.
WITNESS: TENANT:
Perma Grass Corporation
BY: BY:
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ATTESTED: LANDLORD:
Satnick Development Corp. (Landlord)
BY: BY:
---------------------------- ---------------------------------
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EXHIBIT "A"
RULES AND REGULATIONS
61. The public and common sidewalks, entrances, passages, courts, elevators,
vestibules, stairways, corridors, or halls shall not be obstructed, or
encumbered by any Tenant or used for any purpose other than ingress and
egress to and from the premises.
62. No awnings or other projections shall be attached to the outside walls of
the Building without prior written consent of the Landlord. No curtains,
blinds, shades, or screens shall be attached to or hung in, or used in
connection with any window or door of the Premises, without the prior
written consent of the Landlord. Such awnings, projections, curtains,
blinds, shades, screens or other fixtures must be a quality type, design
and color, and attached in the manner approved by Landlord. All electrical
fixtures hung in offices or spaces along the perimeter of the Premises
must be of a quality, type, design and bulb color approved by the
Landlord.
63. No sign, advertisement, notice or other lettering shall be exhibited,
inscribed, painted or affixed by any Tenant or any part of the outside or
inside of the Premiss or Building without prior written consent of the
Landlord. In the event of the violation of the foregoing by any Tenant,
Landlord may remove same without any liability, and may charge the expense
incurred by such removal to the Tenant or Tenants violating this rule.
Interior signs on doors and directory tablet shall be inscribed, painted
or affixes for each Tenant by the landlord at the expense of such Tenant,
and shall be of a size, color and style acceptable to the Landlord.
64. The sashes, sash doors, skylights, windows and doors that reflect or admit
light and air into the halls, passage ways or other public places in the
Building shall not be covered or obstructed by any Tenant, nor shall any
bottles, parcels, or other articles be placed on the windowsills.
65. The water and wash closets and other plumbing fixtures shall not be used
for any purposes other than those for which they were constructed, and no
sweepings, rubbish, rags or other substances shall be thrown therein. All
damages resulting from any misuse of the fixtures shall be borne by the
Tenant who, or whose servants, employees, agents, visitors or licensees,
shall have caused the same.
66. No Tenant shall mark, paint, drill into, or in any way deface any part of
the Premises or the Building of which they form a part. No boring, cutting
or stringing of wires shall be permitted, except with the prior written
consent of the Landlord, and as the Landlord may direct. No Tenant shall
lay linoleum or other similar floor covering, so that the same shall come
in direct contact with the floor of the Premises, and if linoleum, rug or
other similar floor covering is desired to be used, and interlining of
builder's deadening felt shall be first affixed to the floor, by a paste
or other material, soluble in water, the use of
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cement or other similar adhesive material being expressly prohibited.
67. No space in the Building shall be used for manufacturing, for the storage
of merchandise, or for the sale of merchandise, goods or property of any
kind at auction.
68. No Tenant shall make, or permit to be made, any unseemly or disturbing
noises or disturb or interfere with other occupants of the Building or
those having business with them whether by the use of any musical
instrument, radio, television set, talking machine, unmusical noise,
whistling, signing, or in any other way. No Tenant shall throw anything
out of the doors, windows or skylights or down the passageways.
69. No additional locks or bolts of any kind shall be placed upon any of the
doors or windows by any Tenant, nor shall any changes be made in existing
locks or the mechanism thereof. Each Tenant must, upon the termination of
his tenancy, restore to the Landlord all keys of stores, offices and
toilet rooms, either furnished to, or otherwise procured by, such Tenant,
and in the event of the loss of any keys, so furnished, such Tenant shall
pay to Landlord the cost thereof.
70. All removals, or the carrying in or out of any safes, freight, furniture
or bulky matter of any description must take place during the hours which
the Landlord or its agents may reasonably designate from time to time. The
Landlord reserves the right to exclude from the Building all safes,
freight or other bulky articles which violate any of these Rules and
Regulations are a part.
71. No Tenant shall occupy or permit any portion of the Premises demised to
him to be occupied as an office for a public stenographer or typist, or a
small loan company or for the possession, storage, manufacture, or sale of
liquor, narcotics, dope, tobacco, in any form, or as a barber, beauty
parlor, or manicure shop, or as an employment bureau. No Tenant shall
engage or pay any employees on the Premises, nor advertise for laborers
giving an address at said Premises.
72. No Tenant shall purchase spring water, ice, towels, or other like service,
from any company or persons not approved by the Landlord.
73. The Landlord reserves the right to exclude from the Building between the
hours of 6:00 p.m. and 8:00 a.m. on Monday to Friday, inclusive, and
between the hours of 1:00 p.m. on Saturday and 8:00 a.m. on the following
Monday as well as on legal holidays, all persons who do not present a pass
to the Building signed by the Landlord. The Landlord will furnish passes
to executives for whom Tenant requests same in writing. Each Tenant shall
be responsible for all persons for whom it request such pass and key and
shall be liable to the Landlord for all acts of such persons. At the
option of the Landlord, Tenant agrees to purchase from Landlord all
passes, keys and locks, and to pay the cost thereof.
74. Canvassing, soliciting and peddling in the Building is prohibited and each
Tenant shall cooperate to prevent the same.
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75. There shall not be used in any space, or in the public halls of any
Building, either by any Tenant or by jobbers or others in the delivery or
receipt of merchandise, any hand trucks, except those equipped with rubber
tires and side guards.
76. Tenant shall not do any cooking, conduct any restaurant, luncheonette or
cafeteria for the sale or service of food or beverages to its employees or
to others, or cause or permit any odors of cooking or other processes or
any unusual or objectionable odors to emanate from the premises. Tenant
shall not install or permit the installation or use of any food, beverage,
cigarettes, cigar or stamp dispensing machine; or permit the delivery of
any food or beverage to the Premises, except by such persons delivering
the same as shall be approved by Landlord.
77. Tenant shall not use or permit the Premises to be used for any unlawful or
illegal business or purpose or for lodging.
78. Tenant shall not illegally sell or store upon the premises any spirituous,
malt or vinous liquor or any narcotic drugs and shall not exhibit, sell or
offer for sale on the premises of the Building anything whatsoever except
such as are essentially connected with the stated use of the Premises.
79. Tenant shall not do or permit to be done any act or thing upon the
Premises which will invalidate or be in conflict with any fire insurance
policies or increase the rate of fire insurance covering the Building of
which the Premises form a part and shall not do so permit to be done any
act or thing upon the Premises which shall or might subject landlord to
any liability or responsibility for injury to any person or persons or to
property by means of any business or operation being carried on in the
Premises or for any other reason. In no event shall any explosives or
flammable materials be taken into or retained in the Premises.
80. Tenant shall not use or permit the parking areas to be used for the
parking, loading or unloading of trucks exceeding the weight limit
established from time to time by Landlord. Landlord to designate area for
loading or unloading and hours for such use.
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81. Landlord reserves the right, from time to time, to assign and reassign to
Tenant and other Tenants of the Building, specific parking spaces, and
Tenant agrees to be bound thereby.
TENANT:
Perma Grass Corporation
BY:
-----------------------------------
Date:
---------------------------------
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EXHIBIT "B"
LANDLORD IMPROVEMENTS
82. Replace ceiling tile as needed.
83. Shampoo existing carpeting.
84. Install five (5) handsets
85. Paint office one color throughout.
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EXHIBIT "C"
JANITORIAL SERVICES
Janitorial services provided to Tenant by Landlord, five (5) evenings per
week, excluding weekends and holidays, as follows:
86. Low dusting nightly.
87. Carpeting vacuumed nightly.
88. Refuse containers emptied nightly (with plastic liners changed regularly).
89. Glass entryway doors cleaned nightly.
90. Windows washed annually.
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EXHIBIT "D"
HOLIDAY SCHEDULE
New Years Day
President's Day
Good Friday
Memorial Day
Independence Day
Labor Day
Thanksgiving Day [and day after]
Christmas Day
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GUARANTY
In consideration of, and as an inducement for the granting, execution and
delivery of the foregoing lease ("Lease") at Airport 17 Office Centre, 377 Route
17 South, Hasbrouck Heights, New Jersey, Suite 116 on the lobby level by Satnick
Development Corp., Landlord therein named ("Landlord", which term shall be
deemed to include the named Landlord and its successors and assigns) to Patrick
McLaren, Tenant named ("Tenant", which term shall be deemed to include the named
Tenant and its successors and assigns), and in further consideration of the sum
of One ($1.00) Dollar and other good and valuable consideration paid by Landlord
to the undersigned, the receipt and sufficiency of which are hereby
acknowledged, the undersigned Patrick McLaren ("Guarantor", which term shall be
deemed to include the named Guarantor and its successors and assigns), hereby
guarantees, absolutely and unconditionally, to Landlord the full and prompt
payment of rent and other charges and sums for a period of thirty-seven (37)
months, effective February 1, 1998 through February 28, 2001, (including,
without limitation, Landlord's legal expenses and reasonable attorneys' fees and
disbursements) payable by Tenant under the Lease, and hereby further guarantees
the full and timely performance and observance of all the covenants, terms,
conditions and agreements therein provided to be performed and observed by
Tenant; and Guarantor hereby covenants and agrees to and with Landlord that if
default shall at any time be made by tenant in the payment of any rent or other
charges and sums, or if Tenant should default in the performance and observance
of any of the terms, covenants and conditions contained in the Lease, Guarantor
shall and will forthwith pay rent and all other charges and sums, to Landlord
and any arrears thereof, and shall and will forthwith faithfully perform and
fulfill all of such terms, covenants and conditions and will forthwith pay to
Landlord all damages that may arise in consequence of any default by Tenant
under the Lease, including, without limitation, all reasonable attorneys' fees,
and disbursements incurred by Landlord or caused by any such default or the
enforcement of this Guaranty.
This Guaranty is an absolute and unconditional guaranty of payment (and
not of collection) and of performance. The liability of Guarantor is
co-extensive with that of Tenant and this Guaranty shall be enforceable against
Guarantor without the necessity of any suit or proceeding on Landlord's part of
any kind or nature whatsoever against Tenant and without the necessity of any
notice of non-payment, non-performance or non-observance or of any notice of
acceptance of this Guaranty or of any other notice or demand to which Guarantor
might otherwise be entitled, all of which Guarantor hereby expressly waives.
Guarantor hereby expressly agrees that the validity of this Guaranty and the
obligations of Guarantor hereunder shall in no way be terminated, affected,
diminished or impaired by reason of (a) the assertion or the failure to asset by
Landlord against Tenant of any of the rights or remedies reserved to Landlord
pursuant to the terms, covenants and conditions of this Lease, or (b) any
non-liability of Tenant under the Lease, whether by insolvency, discharge in
bankruptcy, or any other defect or defense which may now or hereafter exist in
favor of Tenant.
This Guaranty shall be continuing guaranty, and the liability of Guarantor
hereunder shall in no way be affected, modified or diminished by reason of (a)
any assignment, renewal, modification, amendment, or extension of the Lease, or
(b) any modification or waiver of or change in any of the terms, covenants and
conditions of the Lease by Landlord and Tenant, or (c)
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any extension of time that may be granted by Landlord to Tenant, or (d) any
consent, release, indulgence or other action, inaction or omission under or in
respect of the Lease, or (e) any dealings or transactions or matter of thing
occurring between Landlord and Tenant, or (f) any bankruptcy, insolvency,
reorganization, liquidation, arrangement, assignment for the benefit of
creditors, receivership, trusteeship or similar proceeding affecting Tenant,
whether or not notice thereof or of any thereof is given to Guarantor.
Should Landlord be obligated by any bankruptcy or other law to repay to
Tenant or to Guarantor or to any trustee, receive or other representative of
either of them, any amounts previously paid, this Guaranty shall be reinstated
in the amount of such repayments. Landlord shall not be required to litigate or
otherwise dispute its obligations to make such repayments if it in good faith
believes that such obligation exists.
No delay on the part of Landlord in exercising any right, power or
privilege under this Guaranty or failure to exercise the same shall operate as a
waiver of or otherwise affect any such right, power or privilege, nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
No waiver or modification of any provision of this Guaranty nor any
termination of this Guaranty shall be effective unless in writing, signed by
Landlord; nor shall any such waiver be applicable except in the specific
instance for which given.
All of Landlord's rights and remedies under the Lease and under this
Guaranty, now or hereafter existing at law or in equity or by statute or
otherwise, are intended to be distinct, separate and cumulative and no exercise
or partial exercise of any such right or remedy therein or herein mentioned is
intended to be in exclusion of or a waiver of any of the others.
As further inducement to Landlord to make and enter into the Lease and in
consideration thereof, Landlord and Guarantor covenant and agree that in any
action or proceeding brought on, or under or by virtue of this Guaranty,
Landlord and Guarantor shall and do hereby waive trial by jury. Without regard
to principles of conflicts of laws, the validity, interpretation, performance
and enforcement of this Guaranty shall be governed by and construed in
accordance with the internal laws of the State of New Jersey.
Guarantor further agrees to provide Landlord, on the 15th day of January,
during the year of the Lease or Leases involved herein, with a personal
financial statement detailing with specificity all personal assets and
liabilities of the Guarantor as of the date said statement is provided to
Landlord, including but not limited to bank accounts, investment accounts,
details as to receivables, securities, property owned or leased, etc. A breach
by the Guarantor of this provision of this Guaranty shall be considered a
material breach of the Lease by the Tenant, and the Landlord shall have all
rights as set forth in said Lease to take any and all actions in response to
Tenant's material breach of said Lease.
/S/ PATRICK MCLAREN
-----------------------
69
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STATE OF NEW JERSEY:
: ss.
COUNTY OF :
On the day of ___________, ____, before me personally came
_____________________, to me known to be the individual described in and who
executed the foregoing instrument, and he acknowledged that he executed same.
------------------------
NOTARY PUBLIC
70
EXHIBIT 21.1
SUBSIDIARIES OF THE REGISTRANT
The PermaGrass Corporation
71
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<PERIOD-TYPE> 11-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 554
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 27,716
<PP&E> 3,114
<DEPRECIATION> (519)
<TOTAL-ASSETS> 34,938
<CURRENT-LIABILITIES> 10,976
<BONDS> 0
0
0
<COMMON> 10,000
<OTHER-SE> 13,962
<TOTAL-LIABILITY-AND-EQUITY> 34,938
<SALES> 23,216
<TOTAL-REVENUES> 23,216
<CGS> 48,785
<TOTAL-COSTS> 118,230
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (118,230)
<INCOME-TAX> 0
<INCOME-CONTINUING> (118,230)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (118,230)
<EPS-BASIC> (.01)
<EPS-DILUTED> (.01)
</TABLE>
