As filed with the Securities and Exchange Commission on
, 1999
Registration No.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C., 20549
-------------------------------------
Amendment No. 1
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BOOKDIGITAL.COM, INC.
(Name of Small Business Issuer in its charter)
Delaware 22-3655703
(State of Jurisdiction) (Primary Standard Industrial (I.R.S.
Classification Code Number Employee
Identification
No.)
65 Broadway
New York, New York 10006
(212) 430-6380
(Address and telephone number of principal executive offices
and principal place of business)
-------------------------------------
Don L. Rose, Chief Executive Officer
Bookdigital.Com, Inc.
65 Broadway
New York, New York 10006
(212) 430-6380
(Name, address and telephone number of agent for service)
Approximate date of proposed sale to the public: As soon as practicable
after the effective date of this Registration Statement.
Copies of all communications to:
Joel Schonfeld, Esq.
Andrea I. Weinstein, Esq.
Schonfeld & Weinstein, L.L.P.
63 Wall Street, Suite 1801
New York, New York 10005
(212) 344-1600/Fax: (212) 480-0717
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
CALCULATION OF REGISTRATION FEE
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Title of Each Amount Being Proposed Maximum Proposed Amount of
Class of Registered Offering Maximum Registration
Securities Price per Share Aggregate Fee
Offering
Price
Total 1,200,000 $10.00 $12,000,000 $3,636.36
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to 457.
Cross Reference Sheet
Showing the Location In Prospectus of
Information Required by items of Form SB-2
<TABLE>
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Part I Information Required in Prospectus Item No.
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1. Front of Registration Statement Front of
and outside front cover of Registration
Prospectus Statement and
outside
front cover of
Prospectus
2. Inside Front and Outside Back Inside Front Cover Page
Cover Pages of Prospectus of Prospectus and
Outside
Front cover Page of
Prospectus
3. Summary Information and Risk Prospectus Summary;
Factors High Risks Factors
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Prospectus Summary-
Determination of
Offering Price; High
Risk Factors
6. Dilution Dilution
7. Selling Security Holders Not Applicable
8. Plan of Distribution Plan of
Distribution
9. Legal Proceedings Legal Proceedings
10. Directors, executive Officers, Management
Promoters and Control Persons
11. Security Ownership of Certain Principal
Stockholders
Beneficial Owners and Management
Part I Information Required in Prospectus Caption in
Prospectus
12. Description of Securities Description
of
Securities
13. Interest of Named Experts and Legal
Opinions;
Experts
Counsel
14. Disclosure of Commission Position Statement as to
on Indemnification Indemnification
for
Securities
Act Liabilities
15. Organization Within Last Management,
Five Years Certain
Transactions
16. Description of Business Business
17. Management's Discussion and Management's
and Analysis or Plan of Discussion
Operation and Analysis
18. Description of Property Property
19. Certain Relationships and Related Not Applicable
Transactions
20. Market for Common Stock and Prospectus Summary
Related Stockholder Matters Market for
Registrant's
Common Stock and Related
Stockholders Matters;
Shares Eligible for
Future Sale.
21. Executive Compensation Executive
Compensation
22. Financial Statements Financials
Statements
23. Changes in and Disagreements Not Applicable
with Accountants on Accounting
and Financial Disclosure
<PAGE>
1,200,000 SHARES OF COMMON STOCK
BOOKDIGITAL.COM, INC.
Bookdigital.com, Inc., a Delaware corporation ("Bookdigital," "our,"
"we," or "us") is offering 1,200,000 shares of common stock. Prior
to this offering, there has been no public market for the securities, and
there can be no assurance that such a market will develop or be sustained.
We urge you to read the "Risk Factors" section beginning on page
along with this prospectus before you make your investment decision.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary
is a criminal offense.
Per Share Total
Initial public offering price $
Underwriting discounts and commissions $
Proceeds $
The shares are being offered by the underwriters subject to
receipt and acceptance by the underwriters and subject to their
right to reject any order in whole or in part. We have granted to the
underwriters a 45 day option to purchase up to 180,000 additional shares to
cover over-allotments.
We estimate that the maximum offering price will be between $10.00 and
$12.00 per share
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
First Madison Securities, Inc.
Westphalia Investments, Inc.
The date of this prospectus is .
This Offering will terminate on January 1, 2000, but may be extended for
an additional sixty days at Bookdigital's option.
<PAGE>
TABLE OF CONTENTS
PAGE
Prospectus Summary
Selected Financial Data
Risks Factors
Use of Proceeds
Capitalization
Dilution
Management's Discussion and Analysis of Financial Condition
Business
Management
Principal Shareholders
Description of Securities
Shares Eligible for Future Sale
Underwriting
Legal Matters
Experts
Index to Financial Statements
<PAGE>
BOOKDIGITAL.COM, INC.
Bookdigital is a development stage company which provides electronic
access to books and other reference material on the Internet. We provide such
books and materials through our web site, www.Bookdigital.com. We are also
in the process of developing a legal reference site, www.LawxpressUSA.com,
which we expect to market to attorneys, law libraries, law students and anyone
else interested in legal research. All our material is provided in a
readily accessible, convenient and user friendly format.
The principal executive offices of Bookdigital are located at 65
Broadway, New York, New York 10006. Our phone number is 212-430-6380. Our
web site is located at www.Bookdigital.com. Nothing contained on our web site
should be construed as part of this prospectus.
The Offering
The following figures do not include shares issuable upon exercise of
370,800 outstanding warrants nor do they reflect the underwriter's warrants.
Securities Offered...................................1,200,000
Shares of Common Stock.
Shares of common stock
Outstanding before offering ................... 5,175,200
Shares of common stock
Outstanding after offering......................6,375,200
__________
Risk Factors
The securities offered hereby are highly speculative and involve a high
degree of risk. Carefully review and consider the factors set forth under
"Risk Factors" as well as all other information contained herein.
Use of Proceeds
The net proceeds from this offering, estimated to be approximately
$10,440,000, will be used to expand sales and marketing activity, further
develop the law e-library purchase hardware and software, and for
working capital and general corporate purposes. For more information, please
refer to "Use of Proceeds" on page .
<PAGE>
RISK FACTORS
We have limited operation history; we anticpate future losses.
Bookdigital.com, Inc. was incorporated on March 25, 1999 pursuant to the
laws of the State of Delaware. To date, Bookdigital has generated limited
revenues. Since incorporating, we have devoted our efforts to various
organizational activities, including our effort to build our web site and
conduct a private placement in which we raised gross proceeds of $963,600.
As of May 31, 1999 Bookdigital had an accumulated net deficit of $18,436,
and we anticipate that we will incur net losses for the foreseeable future.
The extent of these losses will be dependent, in part, on our ability
to attract and build a membership base, to generate sales and advertising
revenues, and to offer products and services at competitive prices. We expect
our operating expenses to increase, especially in the areas of sales and
marketing and brand promotion, and, as a result, we will need to commence
operations and generate revenue, and to offer products and services at
competitive prices if profitability is to be achieved.
We depend on key personnel, the loss of whom could have a material adverse
effect on our business.
Our success will be substantially dependent on the performance of our
executive officers, Zahra S. Yamani (President), Don L. Rose (CEO), and Susan
L. Schuler (Secretary), who have worked together only a short period of time,
and on the marketing personnel we intend to hire. The loss of the services of
any of our executive officers could have a material adverse effect on our
business, results of operations and financial condition. Competition for
senior management, experienced media sales and marketing personnel, qualified
Web engineers and other employees is intense, and there can be no assurance
that we will be successful in attracting and retaining such personnel. Our
failure to successfully manage our personnel requirements would have a
material adverse effect on our business, results of operations and financial
operations and financial condition. We currently have no Key-Person life
insurance on any of our executive officers. We have entered into employment
agreements with Zahra Yamani, our President, Don L. Rose, our CEO, and Susan
L. Schueler, our Secretary. within the next twelve months, we intend to
hire 30 full/part time employees at an anticipated annualized cost of
$800,000.
Resale may be difficult
Prior to this offering, there has been no public market for our common
stock or other securities. The initial public offering price of the common
stock has been arbitrarily determined by Bookdigital and is not necessarily
related to our assets, book value, results of operations, or any other
established criteria of value. There can be no assurance that an active
trading market for the common stock will develop, or be sustained if developed
following the closing of the offering.
While we intend to hire public relations firms, investors firms and hold
investor meetings to help establish a market for Bookdigital's securities, we
can not guarantee that such action will be successful. As a result, resale
securities purchased in this offering may be difficult.
Arbitrary Determination of Offering Price.
The initial offering will be arbitrarily determined by Bookdigital and
the Underwriters, and bears no relationship whatsoever to our assets,
earnings, book value or any other objective standard of value. Among the
factors we will consider are the lack of operating history of Bookdigital, the
proceeds to be raised by the offering, the amount of capital to be contributed
by the public in proportion to the amount of stock to be retained by present
stockholders, our relative requirements, and the current market conditions in
the over-the-counter market.
Shares eligible for future sale.
Upon completion of this offering, Bookdigital will have outstanding
6,375,200 shares of common stock, excluding 370,800 shares, issuable upon
exercise of outstanding warrants. Of the 6,375,600 issued and outstanding
shares of our common stock, approximately 5,175,600 shares may be
deemed "restricted shares." The restricted shares were issued by Bookdigital
in private transactions in reliance upon one or more exemptions contained in
the Securities Act of 1933. Restricted securities may, in the future, be sold
in compliance with Rule 144 under the Securities Act.
Rule 144 provides that a person holding restricted securities for a
period of one year may sell in brokerage transactions an amount equal to 1% of
our outstanding common stock every three months. A person who is a "non-
affiliate" of Bookdigital and who has held restricted securities for over two
years is not subject to the aforesaid volume limitations as long as the other
conditions of the Rule are met. Possible or actual sales or our common stock
by certain of our present stockholders under Rule 144 may, in the future, have
a depressive effect on the price of our common stock in any market which may
develop for such shares. Such shares would be eligible for sale within one
year under Rule 144, subject to certain volume restrictions and other
conditions imposed thereby) commencing in March 2000.
Our management will have broad discretion to allocate offering proceeds.
Although Bookdigital has generally provided for the use of the proceeds
from this offering, as of the date of this prospectus, we cannot specify with
certainty the amount of the net proceeds of the offering which will be
allocated for each purpose. Accordingly, Bookdigital's management will have
broad discretion in the application of the net proceeds. Holders of
Bookdigital securities may not agree with our allocation of the proceeds of
this offering.
We may need, and may be unable to obtain additional financing.
We anticipate that if this entire offering is sold we will have
sufficient capital to meet our needs for working capital and capital
expenditures for at least the next 12 months. After 12 months we may need to
raise additional funds through a private or public offering of our securities
in order to fund our operations while we build our subscriber base. If
additional funds are raised through the issuance of equity or convertible debt
securities, the new holders may have preferences or privileges senior to those
of the rights of Bookdigital's securities. There can be no assurance that
additional capital will be available or available on acceptable terms.
Bookdigital may not be able to fund its future operations, promote our brand
as we desire, take advantage of unanticipated acquisition opportunities,
develop or enhance services or respond to competitive pressures. Any such
inability could have a material adverse effect on our business, results of
operations and financial condition.
Inside shareholders will continue to control Bookdigital after this
offering.
Prior to this offering, inside shareholders, including management of
Bookdigital, owned 90.7% of outstanding Bookdigital common stock. After this
offering, inside shareholders will own 73.6% of the outstanding Bookdigital
common stock. As a result, these insiders will continue to control the
company, and will continue to be able to elect all of Bookdigital/s directors,
appoint its officers and control Bookdigital's affairs and operations.
Bookdigital's articles of incorporation do not provide for cumulative voting.
USE OF PROCEEDS
The net proceeds that we will receive from the sale of the 1,200,000 shares of
common stock are estimated to be approximately $10,440,000, assuming an
initial public offering price of $10.00 per shares, after deducting
underwriting discounts and commissions and estimated offering expenses.
We intend to apply these net proceeds as follows:
Approximate Amount Percentage
of
Of Net Proceeds Net Proceeds
Sales and Marketing $ 4,000,000 39.1%
Site Development Law
(LawxpressUSA.com) $ 1,600,000 15.6%
Site Development-Reference
materials in Spanish, Italian $ 1,850,000 18.1%
German, French
Hardware and Software $ 350,000 3.4%
Working Capital (including $ 2,440,000 23.8%
rent, payroll and office express)
Total $ 10,440,000 100%
CAPITALIZATION
CAPITALIZATION
The following tables sets forth the capitalization at May 31, 1999 on an
actual basis and as adjusted to give effect to the sale of 1,200,000 units at
an initial public offering price of 10,00 per share and receipt of the net
proceeds. This table should be read in conjunction with the financial
statements and related notes included elsewhere in this prospectus.
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May 31, 1999
Actual As Adjusted
Short term Debt $ 322,562 $ 322,562
Stockholder's Equity
Common Stock, $.001 par
value, 20,000,000 shares
authorized, 5,175,200
shares issued and
outstanding; 6,375,200
shares issued and
outstanding as adjusted 5,175 6,3755
Paid-in Capital 2,461,934 14,461,934
Accumulated Deficit (45,908) (45,908) <?R>
Total Shareholder's
Equity
2,421,201 14,421,201
Total Capitalization $2,743,763 14,743,763
</TABLE>
DILUTION
At May 31, 1999, Bookdigital had a net tangible book value of $800,345
or approximately $.15 per share of common stock. Net tangible
book value per share is equal to Bookdigital's tangible asset less its total
liabilities, divided by the number of shares of common stock outstanding on
such date. After giving effect to the sale of 1,200,000 units and the receipt
of estimated net proceeds, assuming an initial offering price of $8.70 (after
deduction of underwriting discounts and commissions), the proforma net
tangible book value at May 31, 1999 would have been $11,240,345 or $1.76
per share of common stock.
This represents an immediate increase in net tangible book value of $1.61
per share of common stock to the existing shareholders an immediate
dilution of $8.24 share of common stock to new investors.
The following table illustrates the per share dilution:
Assumed initial offering price $10.00
Net tangible book value per share .15
Increase attributable to new investors 1.61
Adjusted net tangible book value after offering 1.76
Dilution per share to new investors 8.24
Dilution as a percentage of offering price 82%
The following table sets forth on a proforma basis as of May 31, 1999,
including the offering.
Shares
purchased
Number % Total
consideration
Amount % Average Price
Per Share
Existing
Shareholders
5,175,200 81 $ 971,064 9 $ .19
New
Investors
1,200,000 19 12,000,000 91 10.00
Total
6,375,200 100 12,971,064 100 2.035
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION
The following discussion and analysis provides information that we
believe is relevant to an assessment and understanding of our results of
operations and financial condition for the two months ended May 31, 1999. The
following discussion should be read in conjunction with the Financial
Statements and related Notes appearing elsewhere in this prospectus.
Overview
Since beginning operations in March 1999, we have devoted substantially
all of our resources to designing and implementing our web site and organizing
and collecting reference materials for our web site. From inception through
May 31, 1999 we raised total equity capital of $963,600 and had an accumulated
deficit of $18,436. We have not yet begun to receive revenues from sales of
services. We except to operate at a loss for the first six to twelve months
following the commencement of sales of our services as we incur increasing
levels of expense to support growth.
We believe that an initial operating loss will not be indicative of
future performance for the following reasons, among others:
The receipt of the proceeds of this offering and their use to fund
our anticipated growth will materially change expense levels in
all major categories and are expected to support substantial
increases in revenues from operations; and
We have recently emerged from the development stage and anticipate
rapid increases in the number and size of site visitors and
advertising revenues.
Although we expect substantial growth in both revenues and expenses, we
anticipate that increases in expenses will occur more rapidly than
corresponding increases in revenues. Also, while we are committed, at least
in the short term, to substantial increases in expenses, we cannot guarantee
that revenues will increase correspondingly. Like many companies attempting
to build an Internet-based business, we expect that for at least the next
year, and for an indeterminate period of time thereafter, to follow a strategy
of establishing market share by making expenditures for marketing and
infrastructure development that exceed current revenues.
Bookdigital
Results of Operations. For the two months ended May 31, 1999, we had
$70,278 in total revenues, all of which were derived from gain or sales of
investments and interest, and incurred total expenses of $88,714. Expenses
consisted of$12,130 of research and development expenses and $36,224 of
general and administrative expenses. We have incurred organization costs of
$152,283. We expect to expend approximately $3,800,000 during the next 12
months.
Liquidity and Capital Resources. We have funded our operations
primarily through the sale of common stock and warrants. From inception
through May 31, 1999, we raised approximately $963,600 from sales of units for
cash. Each unit consists of one share of common stock and one common stock
purchase warrant. Each warrant is exercisable for one share of common stock
at 120% of the price per share in this offering for two year period commencing
March 30, 1999. In some cases, we have issued common stock in return for
goods or services. As of May 31, 1999, we had a total of $322,561 of
outstanding notes and other obligations for money borrowed, and cash and cash
equivalents of $1,107,107. We have described the effect of this offering on
our capital resources and our anticipated uses of those resources under "Use
of Proceeds" on page .
Year 2000 Compliance
There are issues associated with the programming code in existing
computer systems as the Year 2000 approaches. The "Year 2000 problem" is
pervasive and complex, as virtually every computer operation will be affected
in some way by the rollover of the two digit year value to 00. Systems that
do not properly recognize such information could generate erroneous data or
cause a system to fail. We have evaluated our current systems, purchased
necessary upgrades and believe that our current hardware and software is Year
2000 compliant. Similarly, we believe that the services we offer to our
customers are not affected by the Year 2000 problem. We have evaluated the
potential impact on us of a Year 2000 problem on the part of our important
third party vendors and have found none. We plan to continue to evaluate our
systems and those of our important vendors in an effort to minimize the
effects of a Year 2000 problem. We do not anticipate that the Year 2000
problem will have a material impact on our business or operations.
BUSINESS
The discussion in this Prospectus contains certain forward-looking
statements. The outcome of events described in such forward-looking
statements is subject to risks and uncertainties. Bookdigital's actual
results may differ materially from those discussed in such forward-looking
statements. Factors that may cause or contributed to such differences include
those discussed in "Risk Factors," "Management's Discussion and Analysis" and
"Business" as well as those discussed elsewhere in this Prospectus.
Information contained at Bookdigital's web site,
www.Bookdigital.com, does not constitute a part of this prospectus. This
prospectus includes statistical data regarding the Internet industry. Such
data is taken or derived from information published by sources including the
Wall Street Journal, Jupiter Research, Visa International Studies and Ziff-
Davis Marketing Intelligence. Although we believe that such data is generally
indicative of the matters reflected therein, such data may be imprecise and
investors are captioned not to place undue reliance on such data.
Our goal is to become a one-stop e-library reference source for
various subjects, with a focus on legal research. . We believe that we
can provide a valuable tool for people conducting research via the
Internet by collecting all available reference material on numerous subjects
and allowing viewers to access it through a single web site. We have designed
our web site so that a viewer will not have to utilize various search engines
on the Internet when performing research or trying to locate a single book.
By logging onto www.Bookdigital.com, a person will be able to quickly and
efficiently access the most pertinent reference material available on a
particular subject and then access or download it onto his/her hard drive or
print a hard copy. Books and other reference materials are categorized in a
user friendly format, further simplifying research. Viewers may search by
title, subject, key word or author. We believe that the Internet is providing
users with the opportunity for easier and more up to date research, and it
will become increasingly acceptable as a means of research. We expect that
the following categories of people, among others, will find Bookdigital's web
site an important reference and data source:
Professionals
Students
Lawyers
Scientists
Medical Professionals
Anyone seeking knowledge.
Bookdigital.com seeks to become the premier on-line source for reference
books and data by :
Offering easy access to a wide variety of reference materials in many
subject areas
Providing the general reference service free of charge
Continuing to expand access to updated reference books and materials
Marketing our service and engaging in cross-marketing with complementary
companies and services
Developing strategic alliances with other web sites and content
providers
Pursuing acquisitions, joint ventures and similar strategic investments
and relationships with complementary businesses and companies.
Investing in technology to further develop state of the art product and
services.
We will offer unlimited use of our on-line research library
free of charge. We are in the process of developing certain categories
within our e-library, for which we will charge fees. The
first of these planned categories is law. We intend to furnish our law e-
library with current court decisions, rulings and laws in all areas of the
law, both State and Federal. Our law research site, www.LawxpressUSA.com,
is currently under development. We expect that site to be available to
subscribers by January 2000. .
Bookdigital was incorporated on March 25,1999. Bookdigital provides
access to all types of reference books and materials on the Internet in a
digital format that is both easy to use and easy to read. We also provide
links to other categorized premier sites in the subject area. We seek to
maximize the number of visitors to our web site by providing the best service
and content available in the reference and digital book arena. We currently
have in excess of 6,000 volumes in English for our digital book
selection. We anticipate that our digital library will eventually surpass one
million books, and will consist of books in languages such as English,
Spanish, French, German, Italian, Japanese and Chinese. To access a book or
other reference material, all a viewer has to do is to click on the screen.
Bookdigital intends to become the premier e-library and source for
reference and digital books on the Internet. No longer will a person have to
search the Internet via Yahoo, Lycos or some other search engine to find text
dealing with the desired subject. A viewer can go to our Web site, find the
material desired and get instant access to the subject then download an entire
book or series of articles to his/her computer. Bookdigital intends to become
a one-stop reference source. Sources available on our Web site,
www.bookdigital.com, will range from classic literature needed for book
reports (Plato, Mark Twain etc.), to reference materials on law, medicine,
chemistry and more obscure areas such as geophysics. The books and reference
materials are categorized on the web site in an easy to find manner and can be
downloaded from Bookdigital's Web site in a user friendly accessible format.
We have entered into many revenue sharing strategic "alliances" with
complimentary companies such as Staples, Sharper Image, Borders, Omaha Steaks,
and other vendors. A link is established with allied companies to
transport the user to the desired site. A percentage of the ensuing sale is
the normal compensation.
Bookdigital will also actively seek to acquire complimentary
technologies or companies that will grow or expand our business. Furthermore,
the company may invest in other Internet companies that meets its objectives.
As of the date of this prospectus, there are no pending or contemplated
acquisitions.
Products and services
LawXpressUSA.com. Bookdigital is in the process of developing a
legal reference and research web site. By accessing www.lawxpressusa.com,
subscribers will be able to find current statutes, court decisions ,
ordinances and regulations, both state and federal. We intend to make
research as easy as possible for the legal practitioner by utilizing simple
subject-based search engines. It is our goal to provide lawyers, researchers,
law students and others with an easily accessible reference site at a
subscription fee much less than current on-line legal services.
Reference Materials. Bookdigital intends to become the premier
source of reference material on the Web, with an emphasis on up to date
legal reference material. We have obtained, and will continue to obtain,
reference material on a variety of subjects, from astrology to zoology. We
believe that compiling a wealth of information on each topic on a single Web
site will offer subscribers an easy, time-efficient and cost efficient way to
conduct research. Currently, most on-line reference materials are scattered
through numerous Web sites. We believe our site is the first Web site to
condense and concentrate reference materials to such a level in a single
location, www.lawxpressusa.com. We will seek to further attract
those conducting research, by establishing several sub super e-libraries,
within our main reference e-library. The first sub super e-library will be
our law e-library which we expect will contain up to the minute court
decisions, rulings, laws and regulations, in state and federal law. Our
law e-library will be located at a separate web site, www.lawxpressusa.com.
We expect that site to be operational and subscriber-ready by January 2000.
If we are successful in developing these sub super e-libraries, we will
then begin to immediately solicit subscribers for those specific subjects
.
Digital Books. Bookdigital will be supplying access to digital books on
our Web site. Books are currently available in English language only. We
intend to expand into additional languages such as Spanish, German, French,
Italian, Japanese and Chinese in the near future. Downloadable books are
creating a new evolution for book publishing by transforming electronic text
and data to digital technology, digital characters, page layout, and
numbering. Some of the advantages of digital books are:
* The user can create an electronic book library on his/her hard drive.
* The user can create personal notes as an attachment to each page with
an option to save and print.
* The user can highlight desired text.
* The user can locate specific words throughout reference materials
and/or literature.
* The user can skim through pages or go directly to a specific page.
* The user can print whole or part of desired text with or without
personal notes.
* The user can magnify (zoom in) text for easier reading.
With these advantages, Bookdigital plans to become the premier Internet
provider of reference books and materials by providing the most multi-lingual
books, and the easiest to use web site. We have thousands of books now, and
plan to acquire at least ninety thousand more over the next year. Many of
these books are of a highly technical nature. We believe that as our book
inventory grows to a critical mass, the name Bookdigital will become
synonymous with digital books, and that we will become the first Web site a
potential customer will visit in the search for reference material. As we
continue to grow, it will reach the point that Bookdigital will be the first
site looked at for any and all books that are needed instantly.
We intend to utilize these advantages to maximum advantage. The key to
successful businesses on the Internet is to become as large and efficient as
possible in an area of specialty. We believe that Bookdigital will have the
largest single library of electronic reference books and materials available.
We will seek to always maintain and improve upon that crucial advantage.
We do not intend to charge any fees for the use of our
general reference materials. Additionally, Bookdigital intends to
focus on particular reference areas such as law, seeking to become a
single source of reference materials in such area. We anticipate
having a full, functioning on-line law reference library in 2000. We will
charge a monthly subscription fee for users of the law service. We
hope to have up to date court decisions, laws and regulations, both state and
federal. We expect to compete with companies such as WestLaw and Lexis/Nexis.
Most of Bookdigital's books are public domain books that have been
formatted in a digital format. After the initial expense of converting the
books into the digital format, the costs of the books is minimal. We will
also seek arrangements with publishers to offer their newest releases for sale
in the digital format. We believe that having some new releases in the
general reading category is a reasonable way to increase traffic. Our costs
to transform the books in the digital format will be similar to our conversion
costs on public domain books, but since these new releases will be charged on
a per-book basis, the profit margin should be sufficient to make this a
profitable supplement. We do not anticipate that this will become a
significant source or revenue. We believe that the primary sources of
revenues for Bookdigital will include, but will not be limited to:
1. Advertising on our Web site;
2. Lawxpressusa.com subscription fees ;
3. Alliance with other Internet companies such as computer manufacturers,
monitor manufacturers, and modem vendors;
4. Acquisition of complimentary technologies or operating entities to expand
our business.
Advertising. The rapidly increasing number of web users, both in the
United States and Internationally, have resulted in the emergence of the web
as a new mass medium for advertising. The web is a attractive medium for
advertising because of its interactivity, flexibility, targetability, and
measurability. Advertisers can reach broad audiences and target
advertisements to users with similar demographic characteristics specific
regional population or selected individuals. We intend to solicit advertisers
to advertise on our web site. Currently, we have agreements with over eighty
advertisers such as Sharper Image, 1-800 Flowers, Mothernature.com, GOTO.Com,
and Barnesandnoble.com.
These advertisers have agreed to place banner ads on our Web site, and
will give us a portion of any sales generated by such ads. We expect these
fees to comprise a significant portion of Bookdigital's revenues.
Subscriptions. We intend to charge subscribers for certain of
our services. While Bookdigital will
not charge fees for use of
Bookdigital's reference e-library, which will permit a user to access
Bookdigital's entire e-library, Bookdigital will charge subscription fees
for certain super sub categories such as law . Subscribers
interested in accessing material and information contained on our law
site, www.lawxpressusa.com will be subject to a monthly fee. We
expect to attract lawyers, doctor and other medical professionals, engineers
and students to our Web sites.
Internet Market and Business Opportunities
According to emarketer, the typical Internet user is an
educational, professional or computer-related individual. The median age is
38, median household income is $58,000 and 58% have graduated college.
Obviously, this is a very attractive audience for advertisers. Further
emarketer statistics show that the top uses for personnel
accessing the Internet are to gather information (87.8%), E-mail (83.2%) and
to conduct research (80.5%). We have found based upon our surveys that the
people who utilize the Internet for research are in the upper echelon of the
income and educational stratum of Internet users. Furthermore, we will be
able to offer the advertisers prescreened viewers based upon their indicated
interests. These factors should allow Bookdigital to charge higher
advertising rates.
Getting customers to download needed information from the Internet is
not a hurdle for business. According to a new study from International Data
Corp., over 50% of online business people download information from the
Internet several times a week. Approximately 91% of commercial survey
respondents and 81% of consumers use their hard drives for primary storage.
We believe that expanding the capabilities on Bookdigital's Web site to
other languages will give us a significant edge. According to a study
recently released by Global Reach, the fastest- growing group of people online
today doesn't access the Internet in English. Over the last four years, the
number of non-English speaking users has grown from less than 10% to nearly
50% according to Bill Dunlap, author of the Global Reach study. In 1995, only
4 to 5 million out of a total of 40 million users were not English speakers.
Today, approximately 80 to 81 million out of 180-182 million Internet users
are non-English speakers.
The eMarketer eGeography Report (released in April 1999) reports there
are 47 million Internet users residing outside the US and another 48 million
inside the US, for a world total of 95.4 million. These figures are based on
counting only "active" net users, defined as those that get online at least
once a week and for a period of at least one to two hours per week.
According to the Dunlap survey, about 100 million of the Internet's 180
million subscribers still speak English, but Spanish and Japanese usage have
each risen to 14.2 million users. We believe that as more people access the
Internet in languages other than English, businesses marketing on the Web need
to expand to accommodate such users. Bookdigital believes that it is
important for web sites which need international exposure to known how many
people are in each language group, since a company can analyze its current
sales activity there and decide where to invest in promoting their web site.
Today, business professionals are twice as likely to use the Internet to
find sources for products and technologies as they were a year ago. This
rising importance of the Internet as a business-to-business buying tool was
highlighted by a survey released from Cahners Business Information, a trade
magazine publisher. According to the survey:
12% of business professionals who buy or set specifications for
purchase in their companies look first to web sites for
information. This compares with just 5% a year ago.
15% now turn to broad-based Internet search engines, versus 8% a
year ago.
Worldwide, eStats projects that the number of Internet users will nearly
quadruple over the next five years, from 36.0 million in 1997 to 142.0 million
by the year 2002. This represents an average annual growth rate of 79%.
Competition
There are competing sites on the Internet that offer copyrighted books
for sale and other sites that offer public domain books for free. The sites
offering copyrighted sites are well known such as Amazon.com and
Barnesandnoble.com. We will offer some copyrighted books, but our main focus
is in gathering all available quality reference material under one site. Most
of this reference material is not copyrighted.
Most web sites offering reference materials are located on web sites
organized by academic institutions. The sites that currently offer public
domain books offer them in an ASCII format and are non-profit organizations,
typically subsets of universities. Generally, these sites are difficult to
locate, and difficult to access.
Sites offering on-line law reference material are WestLaw and
Lexis/Nexis. While we expect to compete with Westlaw and Lexis, we are aware
that these services are much more well established, better
known and better funded than we are. We could also face competition in the
future from web directories, search engine, content sites, commercial online
service providers, sites maintained by Internet services providers,
traditional media companies and other entities that attempt to or establish
web sites similar to Bookdigital. There can be no assurance that our
competitors and potential competitors will not develop sites that are equal or
superior to us or that achieve greater market acceptance.
Nearly all of our existing and potential competitors have longer
operating histories, greater name recognition, larger customer bases and
significantly greater financial, technical and marketing resources that
Bookdigital. Such competitors are able to undertake more extensive marketing
campaigns for their brands and services, and make more attractive offers to
potential employees, and potential advertisers. There can be no assurance
that we will be able to compete successfully against our current or future
competitors or that competition will not have a material adverse effect on our
business, results of operations and financial condition.
Marketing Promotion and Advertising
It is our intention that the advertising, promotion and public relations
for Bookdigital and its products will be overseen by designated public
relations and advertising firms. Marketing of both Web site names
will be aggressively pursued. We will use all mediums available for
advertising. We realize that name recognition is extremely important to the
future success of our company.
The development of advertising revenue from the placement of banner ads
on the Bookdigital Web site will continue to be aggressively pursued by our
sales force. We intend to hire experienced personnel to market Bookdigital's
web site to advertisers and advertising agencies.
Bookdigital intends to utilize strategic alliances where feasible in
order to maximize revenue. For example, Bookdigital has entered into over
eighty such "alliances" with manufacturers/advertisers, such as GoTo.com,
Borders, Dell Computer, Amazon.com, Sharper Image, Staples and the Lending
Tree, so that a link to the Vendor's site appears as a banner on our site. We
receive revenue per click through or revenue per sale consummated.
Bookdigital will seek to develop and market as many additional books and
other reference material as possible, and in as many languages as possible.
Languages planned are Spanish, French, Italian, German, Chinese and Japanese.
This will serve to add many potential customers for the near future.
Operations
Bookdigital commenced operations in April 1999. Its web site,
www.bookdigital.com, has been accessible to Internet users since that time.
We have been receiving advertising revenues since August 1999. Our law site,
www.lawxpressusa.com, is currently being developed and is not yet operational.
We expect to commence operations on our law site by January 2000. We expect
to incur approximately $1,600,000 in research, development and other start up
costs to achieve operations on that site. We expect to generate revenues on
lawxpressusa.com by February 2000.
INDUSTRY BACKGROUND
E-commerce. The new arena of e-commerce provides retailers with the
opportunity to serve a rapidly growing market because consumers are
increasingly accepting the Internet as an alternative shopping channel. The
Internet is becoming an increasingly accepted method of purchasing goods among
consumers. According to Jupiter Communications, as of the end of 1998, almost
10 million U.S. households have made at least one on-line purchase and by the
end of 2002 this population is expected to grow to approximately 36.5 million,
representing nearly 60 percent of U.S. online households. We believe that
these figures will continue to grow as Internet use becomes easier and more
pleasurable through higher-speed access and less expensive and alternative
Internet access devices. The growth rate of Bookdigital customer base and
revenues may be different from the growth rate of households making online
purchases.
The Internet also provides e-commerce companies with an opportunity to
serve a global market.
Jupiter Communications' April 1999 estimates project
that the number of Internet connected households worldwide will grow from
approximately 60 million at the end of 1998 to approximately 124 million by
the end of 2002. IDC estimates that the number of Web users worldwide will
exceed 130 million by the end of 1999 and will grow to over 315 million users
by the end of 202. The growth rate of Bookdigital's international customer
base and revenues from international sales may be different from the growth
rate of Internet-connected households worldwide or the growth rate of
worldwide Web users.
Products that are well suited for e-commerce.
The reference book business is particulary well suited for e-commerce
because an online site has virtually unlimited shelf space and can offer
consumers anywhere the convenience of browsing through vast product
information databases. The use of sophisticated search engines and
personalized services enables users to locate information with convenience and
speed and to get advance notice about materials in their areas of personal
interest. Editorial content, such as synopses, excerpts, reviews and
editorial recommendations, make for a more-educated and entertaining
purchasing decision. Bookdigital believes that the presence of online stores
on consumers' desktops will, in and of itself, stimulate demand and expand the
marketplace.
Business strategy
Bookdigital seeks to become the leading online source for consumers who
need to obtain certain information and/or data.
To achieve this objective,
Bookdigital has focused its efforts on providing the highest possible levels
of value and service, which it believes are reflected in the completeness of
its product selection, the ease-of-use of its Web site, and the speed of
delivery it can offer its customers. While the principal focus of Bookdigital
will be reference information, it will continue to seek opportunities that
expand its product offering to complementary information, entertainment and
intellectual property-based products, and to present them to customers with
the highest contextual relevance. It is our goal to be recognized as the most
innovative and customer-focused of e-commerce merchants, making online
research a simple, personal and gratifying experience that results in the
highest of customer loyalty.
Central to achieving these objectives, Bookdigital's operating strategy
is focused on rapidly extending its brand and increasing its customer and
revenue base by:
Continually enhancing the user experience. Bookdigital is committed to
making every aspect of browsing, shopping and researching on its Web site an
easy and pleasurable experience. It makes continual efforts to improve the
design, layout and navigation of all elements of its Web site, as well as to
ensure that the site's performance metrics are competitive, especially with
regard to page download times and the speed of all research function.
Bookdigital also strives to make the ordering and processing easy, intuitive,
fast and secure.
Offering a large product selection and fast delivery. Bookdigital
intends to offer the largest selection of on-line reference materials and
organized links. This includes books on a variety of topics from astronomy to
law; engineering to medicine. We believe Bookdigital's online databases will
act as a highly searchable catalog for a wide spectrum of materials.
Expanding its products offering. Bookdigital believes that our entire
range of technologies, inclusive of its database and search engine, quick
information access and related interfaces with vendors will enable it to
position itself as a premier delivery mechanism for reference material, such
as manuals and pamphlets.
Building brand awareness and driving customer acquisition through
advertising and promotion. Bookdigital will seek to invest in building our
online brand and in communicating the benefits and convenience of using our
Web sites. We intend to deploy a variety of media, including online, radio,
television, print and outdoor advertising to rapidly grow our customer base.
In all our advertising and promotion initiatives, Bookdigital will seek to
continuously drive down the costs of acquiring new customers, as well as to
get visitors to return to our site more frequently and to increase the use or
our offered services and advertisers.
Strengthening and expanding strategic alliances. Bookdigital will
continue to seek out additional entities to operate as third-party web sites
with whom it hopes to develop ability to generate alliances with merchandising
support, strengthening our ability to generate sales, and to promote both
Bookdigital.com and Lawxpressusa.com's brands.
Marketing and promotion. Since inception, Bookdigital has pursued
strategic alliances with premier online companies and high traffic web sites
in order to drive traffic to its web site. We have entered into agreements
with complimentary companies such as computer manufactures, hard drive,
monitor and other manufacturers. Generally, strategic alliance deals are
arrangements which provide for links to other web sites to be placed on
Bookdigital in order to direct traffic to those other sites, in exchange for
which Bookdigital receives a commission or percent of ensuing sales.
Bookdigital will also use the unique characteristic of the Web to cost-
effectively market our products and services and to develop a sizable
membership base. Key elements to our approach are:
Development of a detailed subscriber database
Customer convenience
Expand the Bookdigital library
Develop selected subject areas, such as law and medicine, so
Bookdigital can become a comprehensive specialized research source
Continue to refine electronic book technology
Segment our site uses so we can offer highly targeted audiences to
advertisers
Sign agreements with publishers that allow for the publishing of
their latest books in digital format on our web site
Incorporate books and reference materials in various languages
Our objective is to develop a sizable membership base and to create a
one-stop digital reference source. To achieve this goal, we will:
Focus on membership growth
Build strong brand recognition
Promote repeat usage and member loyalty
Offer new products and services
Maintain and improve technological focus and expertise
Employees
As of August 31, 1999 , Bookdigital had eight full time
employees and four part time employees/consultants. Our future
success will depend, in part, on our ability to continue to attract, retain
and motivate highly qualified technical and management personnel, for whom
competition is intense. From time to time, we also employ independent
contractors to support our research and development, marketing, sales and
support and administrative organization. Our employees are not covered by any
collective bargaining agreement, and we have never experienced a work
stoppage. We believe that our relations with our employees are good.
Facilities
Our headquarters are currently located in New York City, consisting of
approximately 1,890 square feet of office space which is under a lease that
expires in 2007. The cost per annum of this lease is $26,932.50, with
annual increases.
MANAGEMENT
EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES
The executive officers, directors and key employees of Bookdigital and
their respective ages as of June 30, 1999, are as follows:
NAME AGE POSITION
Don L. Rose 42 CEO, Director
Zahra S. Yamani 29 President, Director
Susan L. Schuler 53 Secretary, Director
David Blechman 48 Director
Irwin Bosh Stack 71 Director
Don L. Rose has been Chief Executive Officer and a director of Bookdigital
since June 1999. From June 1994 to June 1999, Mr. Rose served as founder and
President of American Equity Financing, Inc., a full service venture capital
firm that worked with companies to assist them in all areas of growth.
America Equity Financing, Inc. was founded on January 27, 1997.
American Equity Financing owns 1,800,000 shares of restricted common stock in
Bookdigital. Mr. Rose served as a consultant to First Madison Securities in
their investment banking area from February of 1999 to June of 1999. Mr. Rose
has extensive experience in the areas of acquisitions, start-up of public and
private companies, growth financing, investor relations, engineering, project
control and general business consulting. consulting firm of which he is
principal. His previous roles prior to founding American Equity Financing
included licensed stock broker, investment banker, founder and President of a
very successful business consulting firm that conducted management efficiency
audits, coordinated computing and engineering projects, setup enterprise wide
databases and other functions as needed by the clients. Mr. Rose is an eight
year veteran of the U.S. Navy and holds a B.S. in Computer Science from Union
College of New York. He expects to devote over 40 hours per week to
Bookdigital.
Zahra S. Yamani has been President and a director of Bookdigital since its
inception. Ms. Yamani has experience in research and development in the areas
of physics and computation technology. She is currently completing her Ph.D.
in research on high temperature super conductivity from the University of
Toronto. Ms. Yamani has been a research assistant in the physics department of
the University of Toronto since 1998. From 1992 to 1998 Ms. Yamani was a
teaching assistant in the physics department of Sharif University of
Technology in Iran. She expects to devote approximately 10 hours per week to
Bookdigital.
Susan L. Schuler has been Secretary and a director of the Company since
Bookdigital's inception in March 1999. Since June 1983, Ms. Schuler has owned
Kennedy & Kennedy, a consulting firm. Ms. Schuler has served as controller
and chief financial officer of Nesbit Systems, Inc., a software developer
since 1986. She has been controller of Singer Frumento, L.L.P., a law firm,
since September 1996. She is the owner and President of Blue Sky Services
Corp. A consulting company specializing in security regulation. She is also
the President of Auric Investment Group, Ltd., a precious metals dealer
specializing in bullion gold coins. Ms Schuler is a member of the NSCP,
National Society of Compliance Professionals. She received a B.S. from
Portland State College in 1968. She expects to devote approximately 20
hours per week to Bookdigital.
David Blechman has been a director since the company's inception. From 1992
to 1997, Mr. Blechman served as vice president of ManageMed, Inc., a medical
office management services company. Since March 1999, he has served as vice
president and chief technical officer of PriMed Technologies. He has
extensive experience in management consulting as well as the development of
various computer software models for businesses as diverse as wholesalers,
doctors, laboratories, casinos, and option traders. He also has designed and
implemented comprehensive document management systems for the medical field.
Mr. Blechman was involved in the introduction of voice to text technology for
computers and holds a MS in Management Sciences from Lehigh University in
Pennsylvania.
Irwin Bosh Stack has been a director of Bookdigital since July 1999. From
1993 to 1996, he served as chairman of Oaktree Medical Systems, a publicly
traded company, which owed and operated medical clinics. Since 19996, he has
been president of Stack Associate, Inc., independent marketing consultants.
Executive compensation
Directors' compensation
Directors will be reimbursed for the expenses they actually incur in
attending board meetings. Directors will not be paid a fee for their service
or attendance at board meetings. To date, directors have received no
compensation.
Executive officers' compensation
Bookdigital was incorporated in March 1999. Don L. Rose, our Chief
Executive Officer, shall receive an annual salary of $85,000, Zahra Yamani,
our president, shall receive a salary of $75,000 per year, and Susan L.
Schueler, our secretary, shall receive a salary of $40,000 per year.
Principal stockholders
The following table sets forth certain information known to Bookdigital
with respect to beneficial ownership of Bookdigital's common stock as of June
30, 1999, and as adjusted for the sale of the securities offered by this
prospectus, the number and percentage of outstanding shares of common stock
beneficially owned by each person who beneficially owns:
more than 5% of the outstanding shares of our common stock;
each of our officers and directors; and
all of our officers and directors as a group.
Except as otherwise noted, the persons named in this table, based upon
information provided by these persons, have sole voting and investment power
with respect to all shares of common stock owned by them.
<TABLE>
<S> <C> <C> <C>
<C> Number of
Name and Address Of Shares %Beneficially Owned %Beneficially
Owned
Beneficial Owner Beneficially Owned Before Offering(3) After Offering (3)
Zahra S. Yamani(1)
321 Floor St. West
Toronto, Ontario
M55155, Canada 2,848,000 55.03.4% 44.7%
American Equity
Financing, Inc.(2)
1078 Route 112
Suite 183
Pt. Jefferson, NY 1,800,000 34.8% 28.2%
Irwin Bosh Stack
16504 Sonehaven Rd.
Miami Lakes, FL 0 0% 0 %
David Blechman
350 NW 12th Avenue
Deerfield Beach, FL 25,000 4.8% 3.9%
Susan L. Schuler
8 Elmwynd Drive
Allentown, NJ 20,000 3.9% 3.10%
All Officers and
Directors as a
Group
(5 persons) 4,693,000 90.7% 73.6%
</TABLE>
(1) Zahra S. Yamani, President of Bookdigital, is the sole officer and
director of Knightsbridge Capital, Inc., as well as its controlling
shareholder. 2,028,000 of Ms. Yamani's 2,038,000 shares are held by
Knightsbridge.
(2) Don L. Rose, our Chief Executive Officer, is a controlling shareholder of
American Equity Financing, Inc.
(3) Excludes all shares issuable upon exercise of 370,800 outstanding
warrants.
DESCRIPTION OF SECURITIES
As of the date of this prospectus, our authorized capital stock consists
of 20,000,000 shares of common stock and 0 shares of preferred stock.
Units
Each unit consists of one share of common stock and one warrant.
Common Stock
As of May 31, 1999, there were 5,175,200 shares of common stock
outstanding held of record by approximately 100 shareholders. Excluding the
exercise of outstanding warrants, there will be 6,375,200 shares of common
stock outstanding after giving effect to the sale of the 1,200,000 we are
offering.
Holders of common stock are entitled to one vote per share on all
matters to be voted upon by the shareholders.
Subject to preferences that may be applicable to the holders of
outstanding shares of preferred stock, the holders of common stock are
entitled to receive such lawful dividends as the board of directors may
declare from time to time. In the event we liquidate, dissolve or wind up,
and subject to the rights of the holders of outstanding shares of preferred
stock, the holders of shares of common stock will be entitled to receive pro
rata all of our remaining assets available for distribution to our
shareholders. There are no redemption or sinking fund provisions applicable
to the common stock. All outstanding shares of common stock are fully paid and
nonassessable, and shares of common stock to be issued pursuant to this
offering will be, upon issuance, fully paid and nonassessable.
Warrants
As of May 31, 1999, there were 370,800 warrants issued and outstanding.
Each warrant entitles the holder to purchase one share of common stock at an
exercise price of (120%) of the initial public offering price of the common
stock. The shares of common stock underlying the warrants, when issued upon
exercise of a warrant, will be fully paid and non-assessable. The warrants are
exercisable for a two year period commencing March 30, 1999, after which they
will expire. The warrants are subject to redemption by Bookdigital at a price
of $.10 per warrant at any time on twenty days prior written notice, provided
the closing bid price of the common stock is at least 120% of the warrant
exercise price ($ ) for twenty consecutive trading days ending three
days prior to the date that notice of redemption was given to warrant holders.
A warrant may be exercised upon surrender of the warrant certificate on
or before the expiration or redemption date of the warrant at the offices of
the warrant agent, with the form of "Election to Purchase" on the reverse side
of the warrant certificate completed and executed as indicated, accompanied by
payment of the exercise price (by certified or bank check payable to the order
of Bookdigital.com, Inc.) for the number of shares with respect to which the
warrant is being exercised. We will not be required to honor the exercise of
the warrants if, in the opinion of our board of directors with the advice of
counsel, the sale of securities upon exercise would be unlawful.
The foregoing discussion of material terms and provision of the warrants
is qualified in its entirety be reference to the detailed provisions of the
warrant agreement, the form of which has been filed as an exhibit to the
registration statement of which this prospectus is a part.
For the life of the warrants, the holders have the opportunity to profit
from a rise in the market price of the common stock without assuming the risk
of ownership of the share of common stock underlying the warrants. The
warrant holders may be expected to exercise their warrants at a time when we
would, in all likelihood, be able to obtain any needed capital by an offering
of common stock on terms more favorable than those provided for by the
warrants. Furthermore, the terms on which we could obtain additional capital
during the life of the warrants may be adversely affected.
Transfer Agent and Warrant Agent
Continental Stock Transfer, New York, New York, will serve as the
Transfer Agent for the common stock and Warrant Agent for the warrants.
Determination of Offering Price
The offering price of the common stock will be arbitrarily determined by
Bookdigital and the underwriters. This price bears no relation to our assets,
book value, or any other customary investment criteria, including our prior
operating history. Among factors we considered in determining the offering
price were estimates of Bookdigital's business potential, our financial
resources, the amount of equity and control desired to be retained by the
present shareholders, the amount of dilution to public investors and the
general condition of the securities markets.
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering there has been no market for Bookdigital's
securities. Future sales of substantial amounts of common stock or warrants
in the public market could adversely affect market prices prevailing from time
to time.
Upon completion of this offering, Bookdigital will have outstanding an
aggregate of 6,375,200 shares of common stock, assuming no exercise of any
warrants to purchase common stock. 1,200,000 < of these shares will
be freely tradable without restriction or further registration under the
Securities Act (except for any shares purchased by "affiliates," as that term
defined in Rule 144 under the Securities Act). The remaining
5,175,000
shares are shares of restricted stock, as that term is defined in Rule
144 promulgated under the Securities Act. Restricted stock may be sold in
public market only if registered or if it qualifies for an exemption from
registration is available.
Pursuant to the provisions of Rule 144 (including Rule 144(k)), the
shares of restricted stock would be available for sale in the public market as
follows: 5,175,000 restricted shares would be eligible for sale under
Rule 144 upon expiration of the one year holding period applicable to
restricted stock, which expires on various dates between March 1999 and May
1999.
In general, under Rule 144 as currently in effect, beginning 90 days
after the date of this Prospectus, a person (or persons whose shares are
aggregated) who has beneficially owned restricted shares for at least one year
(including the holding period of any prior owner except an affiliate) would be
entitled to sell within any three-month period a number of shares that does
not exceed the greater of: (i) one percent of the number of share of common
stock then outstanding (which will equal approximately 63,752 shares
immediately after this offering); or (ii) the average weekly trading volume of
the common stock during the four calendar weeks preceding the filing of a
notice on Form 144 with respect to such sale. Sales under Rule 144 are also
subject to certain manner of sale provisions and notice requirements and to
the availability of current public information about Bookdigital. Under Rule
144(k), a person who is not deemed to have been an Affiliate of Bookdigital at
any time during the 90 days preceding a sale, and who has beneficially owned
the shares proposed to be sold for at least two years (including the holding
period of any prior owner except for an affiliate), is entitled to sell such
shares without complying with the manner of sale, public information, volume
limitation or notice provisions of Rule 144; therefore, unless otherwise
restricted, "144(k) shares" may be sold immediately upon the completion of
this offering.
UNDERWRITING
The underwriters named below, for whom First Madison Securities, Inc. is
acting as representative, have severally agreed pursuant to the terms and
conditions of the underwriting agreement between Bookdigital and the several
underwriters, to purchase from Bookdigital and Bookdigital has agreed to sell
to the underwriters the number of shares of common stock set forth in the
table below at the price set forth on the cover page of this prospectus.
Number of
Underwriter Shares
First Madison Securities, Inc
Janssen-Meyers, L.P.
Westphalia Investments, Inc.
Total................................................ 1,200,000
===========
The underwriting agreement provides that the obligations of the
underwriters to purchase such shares of common stock are subject to certain
conditions. The Underwriters are selling the shares on a firm commitments
basis.
The representative has advised Bookdigital that the underwriters propose
to offer the shares of common stock to the public at the initial public
offering price set forth on the cover page of this prospectus and to selected
dealers at such price less a concession within the discretion of the
representative, and that the underwriters and such dealers may reallow a
concession to other dealers, including the underwriters, within the discretion
of the representative. After the public offering price, the concessions to
selected dealers and the reallowance to other dealers may be changed by the
representative.
The representative may also impose a penalty bid on certain underwriters
and selling group members. This means that if the representative purchases
securities in the open market to reduce the underwriters' short position or to
stabilize the price of the common stock and/or warrants, they may reclaim the
amount of the selling concession from the underwriters and selling group
members who sold those securities as part of this offering.
The underwriting agreement provides for indemnification between
Bookdigital and the underwriters against certain liabilities, including
liabilities under the Securities Act and for contribution by Bookdigital and
the underwriters to payments that may be required to be made in respect
thereof. Insofar as indemnification for liabilities under the Securities Act
may be permitted to Bookdigital directors, officers, and controlling persons
of Bookdigital pursuant to the agreement between Bookdigital and the
underwriters, or otherwise, Bookdigital has been advised that in the opinion
of the Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable.
Bookdigital has agreed to pay the representative a nonaccountable
expense allowance equal to three percent of the gross proceeds from the sale
of common stock offered hereby. In the event the offering is not consummated,
any nonaccountable portion of the advanced payment will be promptly returned
to Bookdigital.
Bookdigital has agreed to issue to the underwriters the underwriter's
warrants, which entitle the holders to purchase up to an aggregate of 120,000
shares of common stock (one share for every ten shares sold by the
underwriters) for $.001 per warrant. These warrants will have an exercise
price per share equal to 120 % of the initial offering price of the common
stock in this offering . The underwriter's warrants are not transferable
for one year from the date of issuance, except to individuals who are either a
partner or an officer of an underwriter, by will or by the laws of descent and
distribution. The underwriter's warrants are not redeemable by Bookdigital.
Bookdigital has agreed to maintain an effective registration statement with
respect to the issuance of the securities underlying the underwriter's
warrants, if necessary, to allow their public resale without restriction, at
all times during the period in which the underwriter's warrants are
exercisable, commencing one year after the date of this prospectus. Such
securities are being registered on the registration statement
of which this Prospectus is a part.
Prior to this offering, there has been no public market for
Bookdigital's securities. Accordingly, the initial public offering price of
the common stock has been determined in negotiations between Bookdigital and
the representative. Among the factors considered in determining the initial
public offering price of the common stock were the history and the prospects
of Bookdigital and the industry in which it operates, the status and
development prospects for Bookdigital's proposed products and services, the
experience and qualifications of Bookdigital's executive officers and the
general condition of the securities markets at the time of the offering.
Legal Matters
The validity of the securities offered hereby will be passed upon for
Bookdigital by its counsel, Schonfeld & Weinstein, L.L.P., New York, New York.
Certain matter in connection with the offering will be passed upon for the
underwriters by Frank Hariton, Esq., White Plains, New York
Experts
The balance sheet as of May 31, 1999, and the statements of operations,
stockholders' deficit, and cash flows for each of the two months then ended,
have been audited by Simon Krowitz Bolin & Associates, independent certified
public accountants, as set forth in their report thereon appearing elsewhere
herein and in registration statement, and are included in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
CERTAIN TRANSACTIONS
On March 25, 1999, Bookdigital issued a total of 4,708,040 shares to 7
people for par value. Zahra Yamani, President of Bookdigital, was issued
810,000 of those shares. Knightsbridge Capital, Inc., a company of which Ms.
Yamani is a principal, was issued 2,028,000 of those shares. Additionally,
1,800,000 of the 4,708,040 shares were issued to American Equity Financing,
Inc., a company of which Don L. Rose, Chief Executive Officer of Bookdigital,
is a principal. Susan L. Schuler, Secretary of Bookdigital, purchased 20,000
shares, and David Blechman, a director, purchased 25,000 shares. Zarto
Ltd. purchased 25,000 shares and Janis Fidotta purchased 20,000 shares.
Additional Information
Bookdigital has filed with the Commission a Registration Statement on
Form SB-2 under the Securities Act of 1933, as amended with respect to the
Common stock offered hereby as well as common stocks and warrants held by
selling shareholders. This prospectus omits certain information contained in
the registration statement and the exhibits thereto, as permitted y the rules
and regulations of the Commission. For further information with respect to
the Company and the securities, reference is hereby made to the Registration
Statement and such exhibits filed as a part thereof, which may be inspected,
without charge, at the Public Reference Section of the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street , N.W., Washington, D.C. 20549, and at
the regional offices of the Commission located at 75 Park Place, 14th Floor,
New York, NY 10007. Copies of all or any portion of the Registration
Statement may be obtained from the Public Reference Section of the Commission,
upon payment of the prescribed fees. The SEC maintains a World Wide Web site
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the SEC, including the
Registration Statement. The address of the SEC"s World Wide Web site is
http://www.sec.gov.
Statements contained in this prospectus as to the contents of any
contract or other documents referred to herein are not necessarily complete
and. In each instance, reference is made to the copy of such contract or other
document filed as an exhibit to the registration statement, each such
statement being qualified in all respect by such reference.
We are not currently a reporting company under the Securities and Exchange
Act of 1934, and therefore we have not filed any reports with the Securities
and Exchange Commission. Upon completion of this offering we intend to
register under the Securities Act, and will be requires to furnish to
our security holders annual reports containing audited reports containing
audited financial statements reported on by independent auditors, and
quarterly reports containing unaudited financial information for the first
three quarters of each fiscal year by electronic delivery on our Web site at
www.Bookdigital.Com.
<PAGE>
BOOKDIGITAL.COM, INC.
Table of contents
Independent Auditors Report
Financial Statements
August 31, 1999
Balance Sheet
Statement of Income and Retained Earnings
Statement of Change in Stockholder's Equity
Statement of Cash Flows
Notes to Financial Statements
<PAGE>
<PAGE>
Independent Accountants' Report
To the Board of Directors of
Bookdigital.com, Inc.
New York, New York
We have compiled the accompanying balance sheet of Bookdigital.com, Inc. as of
August 31, 1999 and the related statements of changes in stockholders' equity,
operations and retained earnings and cash flows for the three months then
ended and for the period March 25, 1999 (inception) to August 31, 1999, in
accordance with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements and supplementary information,
and, accordingly, do not express an opinion or any other form of assurance on
them.
Rockville, Maryland
September 18, 1999
<PAGE>
BOOKDIGITAL.COM, INC.
(A Development Stage Company)
BALANCE SHEET
August 31, 1999
ASSETS
Current Assets
Cash $ 109,092
Account Receivable 5,500
Investment Securities 322,123
Total Current Assets 436,715
Property and Equipment
Furniture and Fixtures 11,507
Equipment 8,770
Computer Equipment 15,800
Accumulated Depreciation - Computer Equipment (790)
Total Property and Equipment 35,287
Other Assets
Security Deposits 28,821
Organization Costs (net of amortized of
$109,889) 1,538,439
Total Other Assets 1,567,260
TOTAL ASSETS $ 2,039,262
LIABILITY AND STOCKHOLDERS' EQUITY
Current Liability $ 0
Stockholders' Equity
Common Stock - $.001 Par Value;
20,000,000 Shares
Authorized, 5,174,200 Shares Issued and
Outstanding 5,174
Paid-in Capital 2,456,435
Retained (Deficit), including deficit
accumulated during the
development stage
(422,347)
Total Stockholders' Equity 2,039,262
TOTAL LIABILITY AND STOCKHOLDERS' EQUITY $ 2,039,262
See Accountants' Report and Notes to Financial Statements.
<PAGE>
BOOKDIGITAL.COM, INC.
(A Development Stage Company)
STATEMENT OF INCOME AND RETAINED EARNINGS
For the Periods
June 1, 1999 March 25
to August 31, (inception)to
1999 August 31, 1999
INCOME
Interest Income $ 1,982 $ 2,798
Realized Gain or (Loss) on Investments (64,135) 5,327
Unrealized Gain or Loss on Investments 3,943 3,943
TOTAL INCOME (LOSS) (58,210) 12,068
EXPENSES
Officer's Salaries 38,071 38,071
Clerical Salaries 558 558
Consulting Fees 64,228 76,228
Entertainment 0 2,200
Internet 179 309
Insurance 2,662 2,662
Office Expenses 5,543 8,732
Postage 108 993
Professional Fee - Public Relations 6,000 6,000
Professional Fee - Accounting 10,000 11,500
Professional Fee - Legal 22,000 30,500
Professional Fee - Other 31,480 39,730
Dues and Subscriptions 498 498
Software Expense 3,064 3,064
Rent 6,088 13,288
Retainer Fee 10,000 50,000
Amortization - Organization Cost 82,417 109,889
Stock/Registration Fees 1,848 1,848
Advertising - Internet 24,500 24,500
Depreciation Expense -
Computer Equipment 790 790
Payroll Tax Expense 4,051 4,051
Other Taxes 100 100
Telephone Expenses 3,516 8,016
TOTAL EXPENSES 317,701 433,527
<PAGE>
BOOKDIGITAL.COM, INC.
(A Development Stage Company)
STATEMENT OF INCOME AND RETAINED EARNINGS
For the Periods
June 1, 1999 March 25
To August 31, (inception)to
1999 August 31, 1999
OTHER INCOME (EXPENSE)
Interest $ (528) $ (888)
NET (DEFICIT) (376,439) (422,347)
RETAINED (DEFICIT) - Beginni (45,908) 0
RETAINED (DEFICIT) - Ending $ (422,347) $ (422,347)
NET DEFICIT PER SHARE - BASIC $ (0.073) $ (0.082)
NET DEFICIT PER SHARE - DILUTED $ (0.073) $ (0.082)
SHARES USED IN PER SHARE CALCULATION - BASIC 5,174,200 5,174,200
SHARES USED IN PER SHARE CALCULATION - DILUTED 5,174,200 5,174,200
See Accountants' Report and Notes to Financial Statements.
<PAGE>
BOOKDIGITAL.COM, INC.
(A Development Stage Company)
STATEMENT OF CHANGE IN STOCKHOLDERS' EQUITY
For the Period from June 1, 1999 to August 31, 1999
Compre-
Retained hensive
Shares Amount Earnings Total Income
Balance at March 25,
1999 0 $ 0 $ 0 $ 0 $ 0
Issuance of
Common Stock 5,175,200 5,175 5,175
Paid in Capita 2,461,934 2,461,934
Loss to May 31, 1999 (45,908) (45,908) (45,908)
Balance at May 31,
1999 5,175,200 2,467,109 (45,908) 2,421,201 (45,908)
Refund to the
Investor (1,000) (1) (1)
Reduction of
Paid-in Capital (5,499) (5,499)
Net Loss (376,439) (376,439) (376,439)
Balance at August
31, 1999 5,174,200 $5,461,609 $(422,347) $2,039,762 $(422,347)
See Accountants' Report and Notes to Financial Statements.
<PAGE>
BOOKDIGITAL.COM, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the Periods
June 1, 1999 March 25 to
To August 31, (inception) to
1999 August 31, 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Deficit) $ (376,439) $ (422,347)
Adjustment to Reconcile Net (Deficit)
to Net Cash Used by Operating Activities
Depreciation Expense -
Furniture and Fixtures 790 790
Amortization Expense -
Organizational Cost 82,417 109,889
Increase in Accounts Receivable (5,500) (5,500)
Security Deposit (28,821) (28,821)
NET CASH (USED) BY OPERATING ACTIVITIES (327,553) (345,989)
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales (Purchases) of Marketable
Equity Securities 656,355 (322,124)
Purchases of Furniture and Fixtures (11,507) (11,507)
Purchases of Computer Equipment (8,770) (24,570)
Capital Expenditures -
Organization Costs 0 (123,428)
NET CASH PROVIDED BY INVESTING ACTIVITIES 636,078 (481,629)
CASH FLOWS FROM BY FINANCING ACTIVITIES:
Proceeds from Issuance of Common Stock 0 942,210
Increase (Decrease) in Short-term Debt (322,561) 0
Decrease in Common Stock (1) (1)
Decrease in Paid-in Capital (5,499) (5,499)
NET CASH USED BY FINANCING ACTIVITIES (328,061) 936,710
NET INCREASE (DECREASE) IN CASH (19,536) 109,092
CASH - Beginning 128,628 0
CASH - Ending $ 109,092 $ 109,092
Supplemental Disclosure:
Interest Paid for the Period
from June 1, 1999 to August 31, 1999 $ 528 $ 888
NONCASH INVESTING ACTIVITIES:
Capital Expenditures -
Organization Costs $ 0 $ 1,524,900
See Accountants' Report and Notes to Financial Statements.
<PAGE>
BOOKDIGITAL.COM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENT
August 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
History and Business Activity - Bookdigital.com, Inc. (the Company) is a
development stage company. The Company was incorporated in the Delaware on
March 25, 1999 and has a December 31 year end. The Company's mission is to
become the ultimate reference library site online. The company's site
(www.Bookdigital.com) on the Internet is designed to maintain a very
comprehensive set of books, manuals, pamphlets, journals, research data, and
links. Bookdigital.com serves as a home base library for educational and
intellectual advancement. Viewer may search, review, browse and download
information needed in any subject such as physics, law, astronomy, etc. at
Bookdigital.com site.
The search can be made by title, subject or author for any reference
materials. Currently all reference materials are in English. However, the
Company intends to develop a global reference site in Spanish, French, German,
Italian, etc. The Company intends to register its viewers and may charge a
subscription fee in the future.
Cash and Cash Equivalents - Bookdigital.com, Inc. maintains a bank account and
a petty cash fund, both of which it classifies as cash for purposes of the
statement of cash flows.
Marketable Equity Securities - The companies' marketable securities consist of
equity securities that have a readily determinable fair market value.
Management determines the appropriate classification of its investments at the
time of purchase and re-evaluates such determinations at each balance sheet
date.
Property, Plant and Equipment - Fixed assets are recorded at cost. The costs
are being depreciated on a straight-line basis over a five-year period.
Organization Costs - The Company incurred organization costs of $1,648,328.
These costs are being amortized on a straight-line basis over a five-year
period.
Common Stock - Common stock issued by the company as payment for services has
been valued by management at the estimated fair market value of the stock
existing at the time of its issuance.
Basic and Diluted Net Income (Loss) per Share - Basic net income (loss) per
share is computed using the weighted average number of common shares
outstanding during the period. Diluted net income (loss) per share is also
computed using the weighted average number of common shares outstanding during
the period, including conversion of any warrants to its equivalent common
stock.
<PAGE>
BOOKDIGITAL.COM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENT
August 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the
reported period. Actual results could differ from those estimates.
Concentration of Risk - The Company maintains an operating checking account at
an FDIC insured (to $100,000) financial institution. The amount in this
account in excess of the insured limit was $9,092. The Company also maintains
a money market account with the brokerage firm of Spear, Leeds & Kellogg.
These funds are not FDIC insured. The total amount not FDIC insured amounts
to $331,215.
Income Taxes - The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes," which requires the use of the "liability method" of accounting for
income taxes. Accordingly, deferred tax liabilities and asset are determined
based upon the differences between the financial statement and tax bases of
assets and liabilities, using enacted rates in effect for the year in which
the differences are expected to reverse. Current income taxes are based upon
the year's taxable income for federal and state income tax reporting purposes.
NOTE 2 - STOCKHOLDERS' EQUITY
Common Stock - The Company is authorized to issue 20,000,000 common shares,
$0.001 par value per share and 5,175,200 shares of common stock were issued
and outstanding. The holders of common stock have one vote per share on all
matters (including election of directors) without provision for cumulative
voting. Thus, holders of more than 50% of the shares voting for the election
of director can elect all of the directors, if they choose to do so. The
common stock is not redeemable and has no conversion or pre-emptive rights.
There are no sinking fund provisions. In the event of liquidation of the
company, the holders of common stock will share equally in any balance of the
company's assets available for distribution to them after satisfaction of
creditors and preferred stockholders, if any.
<PAGE>
BOOKDIGITAL.COM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENT
August 31, 1999
NOTE 2 - STOCKHOLDERS' EQUITY (Continued)
Warrants - Each Class A warrant entitles the holder to purchase one share of
common stock at an exercise price of 120% of the initial public offering price
(the "Exercise Price") during the two-year period commencing March 30, 1999
("Exercise Period"). The Class A warrants are subject to redemption by the
company at a price of $0.10 per warrant, at any time on twenty-day prior
written notice provided the closing bid price of the common stock is at least
120% of the exercise price for twenty consecutive trading days ending three
days prior to the date that notice of redemption was give to warrant holders.
The shares and Class A warrants shall be detachable and separately tradable as
determined by the company. These warrants will have a one-year holding
period. They may be exercised any time after this one-year period, up to the
expiration period of two years.
NOTE 3 - LOAN PAYABLE
The Company maintains an overdraft account with Spear, Leeds & Kellogg, its
brokerage house. The loan is due on demand and bears an interest rate of 6.5%
to 7.5%. The loan is secured by the company's investment securities.
Interest is payable monthly.
NOTE 4 - INCOME TAXES
Since the Company has not yet realized income as of the date of this report,
no provision for income taxes has been made. At August 31, 1999 a deferred
tax asset has not been recorded due to the company's lack of operations to
provide income to use the net operation loss carryover of $(422,347) which
expires in 2019.
NOTE 5 - CONTINGENCIES
The Company is not currently aware of any other legal proceedings or claims
that the company believes will have, individually or in the aggregate, a
material adverse effect on the company's financial position or results of
operations.
<PAGE>
BOOKDIGITAL.COM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENT
August 31, 1999
NOTE 6 - SUBSEQUENT EVENT - COMMITMENT
In September, 1999, the Company entered into a lease for office space. The
term of the lease is from October 1, 1999 to December 31, 2007. The lease has
annual increases of 3%. Minimum annual rentals for the year ending August 31
are:
2000 $ 23,940
2001 45,990
2002 50,400
2003 52,290
2004 54,180
$ 226,800
<PAGE>
BOOKDIGITAL.COM, INC.
(A Development Stage Company)
Financial Statements
May 31, 1999
BOOKDIGITAL.COM, INC.
Table of Contents
Independent Auditors' Report
Financial Statements
Balance Sheet
Statement of Income and Retained Earnings
Statement of Change in Stockholders' Equity
Statement of Cash Flows
Notes to Financial Statements
Independent Auditors' Report
To the Board of Directors of
Bookdigital.com, Inc.
New York, New York
We have audited the accompanying balance sheet of Bookdigital.com, Inc. as of
May 31, 1999 and the related statements of income and retained earnings and
cash flows for the period from inception (March 25, 1999) to May 31, 1999.
These financial statements are the responsibility of the company's management.
Our responsibility is to express an opinion on these 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 financial statements referred to above present fairly, in
all material respects, the financial position of Bookdigital.com, Inc. as of
May 31, 1999 and the results of its operations and its cash flows for the
initial period then ended in conformity with generally accepted accounting
principles.
Rockville, Maryland
June 23, 1999
<PAGE>
BOOKDIGITAL.COM, INC.
(A Development Stage Company)
BALANCE SHEET
May 31, 1999
ASSETS
Current Assets
Cash $ 128,629
Investment Securitie 978,478
Total Current Assets 1,107,107
Property and Equipment
Computer Equipment 15,800
Other Assets
Organization Costs
(net of amortized of $27,472) 1,620,856
TOTAL ASSE $ 2,743,763
LIABILITIES AND STOCKHOLDERS' EQUITY
Liability Payable - margin account $ 322,562
Stockholders' Equity
Common Stock - 0.001 Par Value;
20,000,000 Shares
Authorized, 5,175,200 Shares Issued and
Outstanding 5,175
Paid-in Capital 2,461,934
Retained Earnings, including
Deficit Accumulated During the
Development Stage (45,908)
Total Stockholders' Equity 2,421,201
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 2,743,763
See Auditors' Report and Notes to Financial Statements.
<PAGE>
BOOKDIGITAL.COM, INC.
(A Development Stage Company)
STATEMENT OF INCOME AND RETAINED EARNINGS
For the Period March 25,1999 (date of inception) to May 31, 1999
INCOME
Interest Income $ 816
Realized Gain on Investments 69,462
TOTAL GROSS INCOME 70,278
EXPENSES
Accounting Fee 1,500
Amortization 27,472
Bank Charge 42
Consulting Fees 12,000
Entertainment 2,200
Interest Expenses 360
Internet 130
Legal Expenses 8,500
Office Expenses 3,147
Postage 885
Professional Fee - Other 8,250
Rent 7,200
Retainer Fee 40,000
Telephone Expenses 4,500
TOTAL EXPENSES 116,186
NET DEFICIT (45,908)
RETAINED EARNINGS AT
MARCH 25, 1999 (INCEPTION) 0
RETAINED EARNINGS - MAY 31, 1999 $ (45,908)
NET DEFICIT PER SHARE - BASIC $ (0.009)
NET DEFICIT PER SHARE - DILUTED $ (0.009)
SHARES USED IN PER SHARE
CALCULATION - BASIC 5,175,200
SHARES USED IN PER SHARE
CALCULATION - DILUTED 5,175,200
See Auditors' Report and Notes to Financial Statements.
<PAGE>
BOOKDIGITAL.COM, INC.
(A Development Stage Company)
STATEMENT OF CHANGE IN STOCKHOLDERS' EQUITY
For the Period from March 25, 1999 (date of inception) to May 31, 1999
Shares Amount Retained Earnings Total Comprehensive
Income
Balance at
March 25,
1999 0 $ 0 0 $ 0
Issuance of
Common
Stock 5,175,200 5,175 5,175
Paid-in
Capital 2,461,934 2,461,934
Net Loss (45,908) (45,908) (45,908)
Balance at
May 31,
1990 5,175,200 $2,467,109 $(45,908) $2,421,201 $(45,908)
See Auditor's Report and Notes to Financial Statements.
<PAGE>
BOOKDIGITAL.COM, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the Period from March 25, 1999 (date of inception) to May 31, 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Net Deficit $ (45,908)
Adjustment to Reconcile Net Deficit to
Net Cash Used by Operating
Activities
Amortization 27,472
NET CASH (USED) BY OPERATING ACTIVITIES (18,436)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Marketable Equity Securities (978,478)
Purchases of Computer Equipment (15,800)
Capital Expenditures - Organization Cost (123,428)
NET CASH USED BY INVESTING ACTIVITIES (1,117,706)
CASH FLOWS FROM BY FINANCING ACTIVITIES
Proceeds from Issuance Common Stock 942,210
Proceeds from Short-term Debt 322,560
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,264,770
NET INCREASE IN CASH 128,628
CASH - March 25, 1999 0
CASH - May 31, 1999 $ 128,628
Supplemental Disclosure:
Interest Paid During the Year $ 360
NONCASH INVESTING ACTIVITIES:
Capital Expenditures - Organization Cost $1,524,900
See Auditors' Report and Notes to Financial Statements.
BOOKDIGITAL.COM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENT
May 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
History and Business Activity - Bookdigital.com, Inc. (the Company) is a
development stage company. The Company was incorporated in the Delaware on
March 25, 1999 and has a December 31 year end. The Company's mission is to
become the ultimate reference library site online. The company's site
(www.Bookdigital.com) on the Internet is designed to maintain a very
comprehensive set of books, manuals, pamphlets, journals, research data, and
links. Bookdigital.com serves as a home base library for educational and
intellectual advancement. Viewer may search, review, browse and download
information needed in any subject such as physics, law, astronomy, etc. at
Bookdigital.com site.
The search can be made by title, subject or author for any reference
materials. Currently all reference materials are in English. However, the
Company intends to develop a global reference site in Spanish, French, German,
Italian, etc. The Company intends to register its viewers and may charge a
subscription fee in the future.
Cash and Cash Equivalents - Bookdigital.com, Inc. maintains a bank account and
a petty cash fund, both of which it classifies as cash for purposes of the
statement of cash flows.
Marketable Equity Securities - The companies' marketable securities consist of
equity securities that have a readily determinable fair market value.
Management determines the appropriate classification of its investments at the
time of purchase and re-evaluates such determinations at each balance sheet
date.
Property, Plant and Equipment - Fixed assets are recorded at cost. The costs
are being depreciated on a straight-line basis over a five-year period.
Organization Costs - The Company incurred organization costs of $1,648,328.
These costs are being amortized on a straight-line basis over a five-year
period.
Common Stock - Common stock issued by the company as payment for services has
been valued by management at the estimated fair market value of the stock
existing at the time of its issuance.
Basic and Diluted Net Income (Loss) per Share - Basic net income (loss) per
share is computed using the weighted average number of common shares
outstanding during the period. Diluted net income (loss) per share is also
computed using the weighted average number of common shares outstanding during
the period, including conversion of any warrants to its equivalent common
stock.
<PAGE>
BOOKDIGITAL.COM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENT
May 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the
reported period. Actual results could differ from those estimates.
Concentration of Credit Risk - The Company maintains a cash balance in a money
market account with Spear, Leeds & Kellogg. Accounts are insured by the FDIC
(Federal Deposit Insurance Corporation) up to $100,000.
Income Taxes - The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes," which requires the use of the "liability method" of accounting for
income taxes. Accordingly, deferred tax liabilities and asset are determined
based upon the differences between the financial statement and tax bases of
assets and liabilities, using enacted rates in effect for the year in which
the differences are expected to reverse. Current income taxes are based upon
the year's taxable income for federal and state income tax reporting purposes.
NOTE 2 - STOCKHOLDERS' EQUITY
Common Stock - The Company is authorized to issue 20,000,000 common shares,
$0.001 par value per share and 5,175,200 shares of common stock were issued
and outstanding. The holders of common stock have one vote per share on all
matters (including election of directors) without provision for cumulative
voting. Thus, holders of more than 50% of the shares voting for the election
of director can elect all of the directors, if they choose to do so. The
common stock is not redeemable and has no conversion or pre-emptive rights.
There are no sinking fund provisions. In the event of liquidation of the
company, the holders of common stock will share equally in any balance of the
company's assets available for distribution to them after satisfaction of
creditors and preferred stockholders, if any.
<PAGE>
BOOKDIGITAL.COM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENT
May 31, 1999
NOTE 2 - STOCKHOLDERS' EQUITY (Continued)
Warrants - Each Class A warrant entitles the holder to purchase one share of
common stock at an exercise price of 120% of the initial public offering price
(the "Exercise Price") during the two-year period commencing March 30, 1999
("Exercise Period"). The Class A warrants are subject to redemption by the
company at a price of $0.10 per warrant, at any time on twenty-day prior
written notice provided the closing bid price of the common stock is at least
120% of the exercise price for twenty consecutive trading days ending three
days prior to the date that notice of redemption was give to warrant holders.
The shares and Class A warrants shall be detachable and separately tradable as
determined by the company. These warrants will have a one-year holding
period. They may be exercised any time after this one-year period, up to the
expiration period of two years.
NOTE 3 - LOAN PAYABLE
The Company maintains an overdraft account with Spear, Leeds & Kellogg, its
brokerage house. The loan is due on demand and bears an interest rate of 6.5%
to 7.5%. The loan is secured by the company's investment securities.
Interest is payable monthly.
NOTE 4 - INCOME TAXES
Since the Company has not yet realized income as of the date of this report,
no provision for income taxes has been made. At May 31, 1999 a deferred tax
asset has not been recorded due to the company's lack of operations to provide
income to use the net operation loss carryover of $(45,908) which expires in
2019.
NOTE 5 - CONTINGENCIES
The Company is not currently aware of any other legal proceedings or claims
that the company believes will have, individually or in the aggregate, a
material adverse effect on the company's financial position or results of
operations.
<PAGE>
<PAGE>
Until , all dealers that effect transaction in the securities
whether or not participating in this offering , may be required to deliver a
prospectus. This is in addition to the dealer's obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotment or subscriptions.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers
The Delaware General Corporation Law, as amended, provides for the
indemnification of the Company's officers, directors and corporate employees
and agents under certain circumstances as follows:
INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS;
INSURANCE. - (a) A corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding
if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted
in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the corporation and except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to
the extent that the Court of Chancery or the court in which such action or
suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstance of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such court shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorney's fees) actually and
reasonably incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in subsections
(a) and (b) of this section. Such determination shall be made (1) by the
board of directors by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding, or (2) if such a quorum
is not obtainable, or, even if obtainable a quorum of disinterested directors
so directs, by independent legal counsel in a written opinion, or (3) by the
stockholders.
(e) Expenses incurred by an officer or director in defending any civil,
criminal, administrative or investigative action, suit or proceeding may be
paid by the corporation in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of such
director to repay such amount if it shall ultimately be determined that he is
not entitled to be indemnified by the corporation as authorized in this
section. Such expenses including attorneys' fees incurred by other employees
and agents may be so paid upon such terms and conditions, if any, as the board
of directors deems appropriate.
(f) The indemnification and advancement expenses provided by, or granted
pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in
his official capacity and as to action in another capacity while holding such
office.
(g) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted
against him and incurred by him in any such capacity or arising out of his
status as such, whether or not the corporation would have the power to
indemnify him against such liability under this section.
(h) For purposes of this Section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent
corporation including absorbed in a consolidation of merger which, if its
separate existence had continued, would have had power and authority to
indemnify its directors, officers and employees or agents so that any person
who is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this section with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation as
he would have with respect to such constituent corporation if its separate
existence had continued.
<PAGE>
(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit plan;
and references to "serving at the request of the corporation" shall include
any service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee,
or agent with respect to an employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the corporation" as referred to
in this section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors, and administrators of such person.
Article XI of the Company's By-laws provides for the indemnification of the
company's officers, directors, and corporate employees and agents under
certain circumstances as follows:
Article XI provides that the Company will hold harmless and will indemnify all
officers, directors, employees and agents of the Company against all expense,
liability and loss reasonably incurred or suffered by such person in its
connection as such with the Company. The Company shall indemnify any such
person seeking indemnification in connection with a proceeding initiated by
such person (except against the Company) only if such proceeding was
authorized by the Company's Board of Directors.
If a claim under the above paragraph is not paid in full by the Company within
30 days after a written claim has been received by the Company, the claimant
may at anytime thereafter bring suit against the Company to recover the unpaid
amount of the claim. If the claimant is successful, it is entitled to be paid
the expense of prosecuting such claim, as well.
Notwithstanding any limitations in other sections of the By-laws, the Company
will, to the fullest extend permitted by Section 145 of the General
Corporation Law of Delaware, indemnify any and all persons whom it has the
power to indemnify against any and all of the expense, liabilities and loss,
and this indemnification shall not be deemed exclusive of any other rights to
which the indemnities may be entitled under any By-law, agreement, or
otherwise, both as to action in his/her official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such persons.
The Company may, at its own expense, maintain insurance to protect itself and
any director, officer, employee or agent of the Company against any such
expense, liability or loss, whether or not the Company would have the power to
indemnify such person against such expense, liability or loss under the
Delaware General Corporation Law.
<PAGE>
Item 25. Expenses of Issuance and Distribution
The other expenses payable by the Registrant in connection with the
issuance and distribution of the securities being registered are estimated as
follows:
Escrow Fee....................................$ 1,000.00
Securities and Exchange Commission
Registration Fee.............................$ 6,776.23
Legal Fees....................................$ 25,000.00
Accounting Fees...............................$ 10,000.00
Printing and Engraving....................... $ 1,500.00
Blue Sky Qualification Fees and Expenses......$ 3,000.00
Miscellaneous.................................$ 2,000.00
Transfer Agent Fee............................$ 1,500.00
TOTAL...................................................$50,776.23
<PAGE>
Item 26. Recent Sales of Unregistered Securities
On March 25, 1999, Bookdigital issued a total of 4,708,040 shares to 7
people for par value.
Between March 30, 1999 and May 25, 1999, Bookdigital conducted a private
placement of our securities. We offered a maximum amount of 181,800 units,
each unit consisting of one share of common stock and one warrant, exercisable
for one share of common stock at a price equal to 120% of the offering price
in Bookdigital's initial public offering. The units were offered at $5.50 per
unit. We sold 175,200 units to approximately 80 people.
On May 31, 1999, we issued 195,600 warrants and 272,000 shares of common stock
to various consultants of Bookdigital for work, labor and services performed
and to be performed in the future.
Each of these offerings was conducted pursuant to the exemption from
registration contained in Section 4(2) of the Securities Act of 1933. The
March 30, 1999 private placement was also conducted pursuant to Rule 504 of
Regulation D.
<PAGE>
EXHIBITS
Item 27.
1.0 Underwriting Agreement
3.1 Certificate of Incorporation.*
3.2 By-Laws.*
4.1 Specimen Certificate of Common Stock.*
5.0 Opinion of Counsel.
24.0 Accountant's Consent to Use Opinion.
24.1 Counsel's Consent to Use Opinion.
99.0 Selected Dealer's Agreement
99.1 Lease
99.2 Affiliate Advertising Agreements
<PAGE>
Item 28.
UNDERTAKINGS
The registrant undertakes:
(1) To file, during any period in which offers or sales are being made,
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
Effective Date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement, including
(but not limited to) any addition or deletion of managing underwriter;
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be treated as a new
registration statement of the securities offered, and the offering of the
securities at that time to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to any provisions contained in its Certificate of
Incorporation, or by-laws, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements of filing on Form SB-2 and authorized this
registration statement to be signed on its behalf by the undersigned, in the
City of New York, State of New York on September 30, 1999.
BOOKDIGITAL.COM, INC.
BY:
Don L. Rose
Don L. Rose, Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities
and on the dates stated.
Dated September 29, 1999
Don L. Rose
Don L. Rose
Chief Executive Officer, Director
Dated September 29, 1999
Zahra S. Yamani
Zahra S. Yamani
President, Director
Susan L. Schuler Dated September 29, 1999
Susan L. Schuler
Secretary, Director
Irwin Bosh Stack Dated September 29, 1999
Irwin Bosh Stack
Director
David Blechman
Director
<PAGE>
September 23, 1999
Securities and Exchange Commission
Washington, D.C.
Re: Bookdigital.com, Inc.
To Whom It May Concern:
Bookdigital.com, Inc.(the "Company") is a corporation duly incorporated and
validly existing and in good standing under the laws of the state of Delaware.
The Company has full corporate powers to own its property and conduct its
business, as such business is described in the prospectus. The Company is
qualified to do business as a foreign corporation in good standing in every
jurisdiction in which the ownership of property and the conduct of business
requires such qualification.
This opinion is given in connection with the registration with the Securities
and Exchange Commission of one hundred thousand (1,200,000) shares of common
stock at a maximum offering price of $10.00 per Share, for sale in the
Company's proposed public offering.
We have acted as counsel to the company in connection with the preparation of
the Registration Statement on Form SB-2, pursuant to which such Shares are
being registered and, in so acting, we have examined the originals and copies
of the corporate instruments, certificates and other documents of the Company
and interviewed representatives of the Company to the extent we deemed it
necessary in order to form the basis for the opinion hereafter set forth. In
such examination we have assumed the genuineness of all signatures and
authenticity of all documents submitted to us as certified or photostatic
copies. As to all questions of fact material to this opinion which have not
been independently established, we have relied upon statements or certificates
of officers or representatives of the Company.
All of the 1,200,000 Shares being registered are now authorized but unissued
shares.
Based upon the foregoing, we are of the opinion that the 1,200,000 Shares of
Common Stock of the Company being registered for sale by the Company, when
issued and sold pursuant to this Registration Statement will be legally
issued, fully paid and non-assessable and there will be no personal liability
to the owners thereof.
The undersigned hereby consents to the use of this opinion in connection with
such Registration Statement and its inclusion as an exhibit accompanying such
Registration Statement.
Very truly yours,
SCHONFELD & WEINSTEIN, L.L.P.
SCHONFELD & WEINSTEIN, L.L.P.
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our report dated June 23, 1999, in this registration statement (Form SB-2) of
Bookdigital.com, Inc.
Simon Krowitz Bolin & Associate, P.A.
Certified Public Accountants
Simon Krowitz Bolin & Associates, P.A.
Dated: September 22, 1999
1130 Rockville Pike, Suite 800
Rockville, MD 20852
301-468-7700
<PAGE>
To The Board of Directors of
Bookdigital.com, Inc.
Re: Bookdigital.com, Inc.
SCHONFELD & WEINSTEIN, L.L.P. does hereby consent to the use of our opinion
dated September 23, 1999, to Bookdigital.com, Inc. to be used and filed in
connection with the SB-2 Registration Statement and Prospectus, as filed with
the Securities and Exchange Commission.
Schonfeld & Weinstein, L.L.P.
SCHONFELD & WEINSTEIN, L.L.P.
Dated: September 23, 1999
<PAGE>
SELECTED DEALERS AGREEMENT
Dear Sirs: ____________ , 1999
We, the Underwriter named in the enclosed Prospectus (the
"Underwriter"), have agreed to offer and sell on behalf of Bookdigital.com
Inc. a Delaware corporation (the "Company"), up to 1,200,000 of the Company's
Common Stock (the "Shares") at a price of $8-$12.00 per Share.
The Public Offering. The Shares are to be offered to the public by the
Underwriter at $8-$12.00 per Share (the "Public Offering Price"), in
accordance with the terms of the offering set forth in the Prospectus. The
Underwriter has full authority to take such action, as we may deem advisable
in respect of all matters pertaining to the public offering of the Shares.
Offering by Selected Dealers. The Underwriter is offering
part of the Shares for sale through certain dealers who are
members of the National Association of Securities Dealers, Inc.
("Selected Dealers"), at the Public Offering Price, less a
concession of $ or 7% per Share ("Selected Dealers
Concession"). Each Selected Dealer who sells $500,000. or
more of this offering will receive 85% of the Underwriter's
Warrants available on the Shares that dealers sold. The
Selected Dealers Concession is subject to the terms and
conditions herein and in the Prospectus and to modification and
cancellation of the offering without notice. Sales of Shares
by you pursuant to such offering will be evidenced by our
written confirmation and will be evidenced by our written
confirmation and will be rely upon no statement whatsoever,
written or oral, other that statements contained herein and in
the Registration Statement of which the Prospectus is a part.
If you desire to apply to act as a Selected Dealer and sell any
of the Shares please confirm your application by signing and
returning to us the duplicate copy of this letter enclosed
herewith, even though you may have previously advised us
thereof by telephone or telegraph. Your application should be
sent to our offices at: 150 East 58th Street, 24th Floor, New
York, NY 10022 and or by Facsimile (212) 583-1367 and we will
use our best efforts to any subscriptions you may submit. We
reserve the right to reject all subscriptions in whole or in
part, to make allotment and close the subscription books at any
time and without notice.
Conduct of Offering. On becoming a Selected Dealer and in
offering and selling the Shares, you agree to comply with all
the applicable requirements of the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended,
including the delivery of the Prospectus in connection with
sales of the Units, and Sections 2, 8, 24, 25, 35 and 36 of
Article III of the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. As a Selected Dealer
you will be supplied with such quantities of the Prospectus as
you may from time to time reasonable request.
Upon acceptance of your application, you will be informed as to
the stated in which we have advised that the Units have be
qualified for sale under the respective securities or Blue Sky
laws of such states, but we assume no obligation or
responsibility as to the right of any Selected Dealer to sell the
Shares in any state or as to any sale therein.
Offering by Selected Dealers. Shares sold by you must be offered
in conformity with the terms of the offering set forth in
Prospectus.
4. Payment and Delivery. Payment for Shares purchased
through you shall be made by the subscriber of the Shares at the
Public Offering Price on such date and to such place as we
advise you upon one day's notice, by check payable to the order
of
Of New York, and shall be transmitted directly to:
Attn. Stock Transfer Department, by noon of the
next business day after receipt by you. Delivery instructions
must be in our hands at our offices, at such time as we request.
The Selected Dealers Concession payable to you here under shall
be paid promptly after the termination of the Agreement (or such
earlier date as we may date as we may determine).
5. Relationship of Selected Dealers and Underwriter. You
represented that you area member in good standing of the
National Association of Securities Dealers, Inc. You are not
authorized to, and you agree not to give any information or to
make any representation other than as contained in the
Prospectus, or to act an agent or sub-agent for us. Nothing
shall constitute the Selected Dealers an association,
unincorporated business or other separate entity or partners
with us, or with each other, but you shall be liable for our
proportionate share of any tax, liability or expense based on
any claim to the contrary.
We shall not be under any liability to you, expect for
obligations expressly assumed by us in this Agreement, but no
obligations on our part shall implied or inferred therefrom.
Notices. All communications from you shall be addressed to:
First Madison Securities, Inc. 150 East 58th Street 24th Floor,
New York, NY 10022. Any notice from us to you shall be
delivered, mailed or telegraphed to you at the address to which
this Agreement is mailed.
Termination. This agreement shall terminate ninety (90) days after
the date hereof, unless extended by us for a period or periods
not exceeding an additional sixty (60) days in the aggregate,
and whether extended or not, may be terminated by us at any
time. Such shall not affect any of the provisions of Section 3
hereof.
Very truly yours,
First Madison Securities, Inc.
Confirmed and Accepted:
As of the date first above written
___________________________
Name of Dealer
By: ___________________________
Authorized Signature
<PAGE>
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made effective as of June 22,
1999, by and between Bookdigital.com Inc., ("the Employer"), of 5 Bayberry
Drive, Princeton, NJ 08540, and Don L. Rose, ("the Employee"), of 5 Groton
Drive, Port Jefferson Station,
NY 11776.
A. Employer is engaged in the business of Internet commerce
B. Employer desires to have the services of the Employee.
C. Employee is willing to be employed by Employer.
Therefore, the parties agree as follows:
1. EMPLOYMENT. Employee shall provide to Employer the following services:
Serve as Chief Executive Officer (CEO) of Bookdigital.com Inc. and perform all
duties incumbant in that role, including, but not limited to: Development of
Bookdigital's web site and Ecommerce business and oversee the upcoming public
offering of Bookdigital's common stock.
2. BEST EFFORTS OF EMPLOYEE. Employee agrees to perform faithfully,
industriously, and to the best of Employee's ability, experience, and talents,
all of the duties that may be required by the express and implicit terms of this
Agreement, to the reasonable satisfaction of Employer. Such duties shall be
provided at such place(s) as the needs, business, or opportunities
of the Employer may require from time to time.
3. COMPENSATION OF EMPLOYEE. As compensation for the services provided by
Employee under this Agreement, Employer will pay Employee an annual salary of
$ 85,000.00 payable in monthly installments payable on the first day of each
month. In addition, Employer will pay Employee a bonus of $ 20,000.00 upon
signing of this contract. Upon termination of this Agreement, payments under
this paragraph shall cease; provided, however, that the Employee shall be
entitled to payments for periods or partial periods that occurred prior to
the date of
termination and for which the Employee has not yet been paid. Accrued vacation
will be paid in accordance with state law and the Employer's customary
procedures.
4. REIMBURSEMENT FOR EXPENSES IN ACCORDANCE WITH EMPLOYER
POLICY. The Employer will reimburse Employee for "out-of-pocket" expenses in
accordance with Employer policies in effect from time to time.
5. CONFIDENTIALITY. Employee recognizes that Employer has and will have
information regarding the following:
- inventions
- products
- apparatus
- future plans
- business affairs
- processes
- trade secrets
- technical matters
- customer lists
- product design
- copyrights
and other vital information (collectively, "Information") which are valuable,
special and unique
assets of Employer. Employee agrees that the Employee will not at any time or
in any manner, either directly or indirectly, divulge, disclose, or communicate
in any manner any Information to any third party without the prior written
consent of the Employer. Employee will protect the Information and treat it as
strictly confidential. A violation by Employee of this paragraph shall
be a material violation of this Agreement and will justify legal and/or
equitable relief.
6. CONFIDENTIALITY AFTER TERMINATION OF EMPLOYMENT. The confidentiality
provisions of this Agreement shall remain in full force and effect for a 2
year period after the termination of Employee's employment.
7. NON-COMPETE AGREEMENT. Recognizing that the various items of
Information are special and unique assets of the company, Employee agrees and
covenants that for a period of 1 year following the termination of this
Agreement, whether such termination is voluntary or involuntary, Employee will
not directly or indirectly engage in any business competitive with Employer.
This covenant shall apply to the geographical area that includes Northeast area
of the United States Directly or indirectly engaging in any competitive
business includes, but is not limited to, (i) engaging in a business as owner,
partner, or agent, (ii) becoming an employee of any third party that is
engaged in such business, (iii) becoming interested directly or indirectly in
any such business, or (iv) soliciting any customer of Employer for the
benefit of a third party that is engaged in such business. Employee agrees
that this non-compete provision will not adversely affect the Employee's
livelihood.
8. TERM/TERMINATION. Employee's employment under this Agreement shall be for
1 year, beginning on June 16, 1999. This Agreement may be terminated by either
party upon 60 days written notice. If Employer shall so terminate this
Agreement, Employee shall be entitled to compensation for 30 days, unless the
Employee is in violation of this Agreement. If Employee is in violation of this
Agreement, Employer may terminate employment without notice and with
compensation to Employee only to the date of such termination. The compensation
paid under this Agreement shall be the Employee's exclusive remedy.
9. COMPLIANCE WITH EMPLOYER'S RULES. Employee agrees to comply with all of
the rules and regulations of Employer.
10. RETURN OF PROPERTY. Upon termination of this Agreement, the Employee
shall deliver all property (including keys, records, notes, data, memoranda,
models, and equipment) that is in the Employee's possession or under the
Employee's control which is Employer's property or related to Employer's
business. Such obligation shall be governed by any separate confidentiality or
proprietary rights agreement signed by the Employee.
11. NOTICES. All notices required or permitted under this Agreement shall be
in writing and shall be deemed delivered when delivered in person or deposited
in the United States mail, postage paid, addressed as follows:
Employer:
Bookdigital.com Inc.
5 Bayberry Drive
Princeton, NJ 08540
Employee:
Don L. Rose
5 Groton Drive
Port Jefferson Station, NY 11776
Such addresses may be changed from time to time by either party by providing
written notice in the manner set forth above.
12. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties and there are no other promises or conditions in any other agreement
whether oral or written. This Agreement supersedes any prior written or oral
agreements between the parties.
13. AMENDMENT. This Agreement may be modified or amended, if the amendment
is made in writing and is signed by both parties.
14. SEVERABILITY. If any provisions of this Agreement shall be held to be
invalid or unenforceable for any reason, the remaining provisions shall continue
to be valid and enforceable. If a court finds that any provision of this
Agreement is invalid or unenforceable, but that by limiting such provision it
would become valid or enforceable, then such provision shall be deemed to be
written, construed, and enforced as so limited.
15. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce any
provision of this Agreement shall not be construed as a waiver or limitation of
that party's right to subsequently enforce and compel strict compliance with
every provision of this Agreement.
16. APPLICABLE LAW. This Agreement shall be governed by the laws of the State
of New York.
Employer:
Bookdigital.com Inc.
By: ____________________________________________________
Zahra Yamani
President
AGREED TO AND ACCEPTED.
Employee:
By: ____________________________________________________
Don L. Rose
EXHIBIT A
Description of Services
Serve as Chief Executive Officer (CEO) of Bookdigital.com Inc. and perform all
duties
incumbant in that role, including, but not limited to: Development of
Bookdigital's web site and
Ecommerce business and oversee the upcoming public offering of Bookdigital's
common stock.
Initials:______
<PAGE>
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made effective as of June 1,
1999, by and between Bookdigital.com Inc., ("the Employer"), of 5 Bayberry
Drive, Princeton, NJ 08540, and Susan Schuler, ("the Employee"), of 8
Elmwynd Drive, Allentown, New Jersey 08501.
A. Employer is engaged in the business of Internet and Web based commerce
B. Employer desires to have the services of the Employee.
C. Employee is willing to be employed by Employer.
Therefore, the parties agree as follows:
1. EMPLOYMENT. Employer shall employ Employee as a Secretary to maintain the
records of the Company and assist in the daily operations of the Company.
Employee accepts and agrees to such employment, subject to the general
supervision, advice and direction of Employer and the Employer's supervisory
personnel. Employee may also perform (I) such other duties as are customarily
performed by an employee in a similar position, and (ii) such other and
unrelated services and duties as may be assigned to Employee from time to time.
2. BEST EFFORTS OF EMPLOYEE. Employee agrees to perform faithfully,
industriously, and to the best of Employee's ability, experience, and talents,
all of the duties that may be required by the express and implicit terms of this
Agreement, to the reasonable satisfaction of Employer. Such duties shall be
provided at such place(s) as the needs, business, or opportunities of the
Employer may require from time to time.
3. COMPENSATION OF EMPLOYEE. As compensation for the services provided by
Employee under this Agreement, Employer will pay Employee an annual salary of
$ 40,000.00 payable in monthly installments payable on the first day and the
fifteenth day of each month. Upon termination of this Agreement, payments under
this paragraph shall cease; provided, however, that the Employee shall be
entitled to payments for periods or partial periods that occurred prior to the
date of termination and for which the Employee has not yet been paid.
Accrued vacation will be paid in accordance with state law and the Employer's
customary procedures.
4. REIMBURSEMENT FOR EXPENSES IN ACCORDANCE WITH EMPLOYER POLICY. The
Employer will reimburse Employee for "out-of-pocket" expenses in accordance
with Employer policies in effect from time to time.
5. RECOMMENDATIONS FOR IMPROVING OPERATIONS. Employee shall provide Employer
with all information, suggestions, and recommendations regarding Employer's
business, of which Employee has knowledge that will be of benefit to Employer.
6. CONFIDENTIALITY. Employee recognizes that Employer has and will have
information regarding the following:
- inventions
- products
- - prices
- - costs
- - future plans
- business affairs
- processes
- trade secrets
- technical matters
- customer lists
- product design
- copyrights
and other vital information (collectively, "Information") which are valuable,
special and unique assets of Employer. Employee agrees that the Employee will
not at any time or in any manner, either directly or indirectly, divulge,
disclose, or communicate in any manner any Information to any third party
without the prior written consent of the Employer. Employee will protect the
Information and treat it as strictly confidential. A violation by Employee of
this paragraph shall be a material violation of this Agreement and will justify
legal and/or equitable relief.
7. CONFIDENTIALITY AFTER TERMINATION OF EMPLOYMENT. The confidentiality
provisions of this Agreement shall remain in full force and effect for a 2 year
period after the termination of Employee's employment.
8. NON-COMPETE AGREEMENT. Recognizing that the various items of Information
are special and unique assets of the company, Employee agrees and covenants
that for a period of 1 year following the termination of this Agreement,
whether such termination is voluntary or involuntary, Employee will not
directly or indirectly
engage in any business competitive with Employer. This covenant shall apply to
the geographical area that includes the area within a 200 mile radius of New
York City Directly or indirectly engaging in any competitive business includes,
but is not limited to, (i) engaging in a business as owner, partner, or agent,
(ii) becoming an employee of any third party that is engaged in such business,
(iii) becoming interested directly or indirectly in any such business, or (iv)
soliciting any customer of Employer for the benefit of a third party that is
engaged in such business. Employee agrees that this non-compete provision will
not adversely affect the Employee's livelihood.
9. TERM/TERMINATION. Employee's employment under this Agreement shall be for
1 year, beginning on June 1, 1999. This Agreement may be terminated by either
party upon 30 days written notice. If Employer shall so terminate this
Agreement, Employee shall be entitled to compensation for 30 days, unless the
Employee is in violation of this Agreement. If Employee is in violation of this
Agreement, Employer may terminate employment without notice and with
compensation to Employee only to the date of such termination. The compensation
paid under this Agreement shall be the Employee's exclusive remedy.
10. COMPLIANCE WITH EMPLOYER'S RULES. Employee agrees to comply with all of
the rules and regulations of Employer.
11. RETURN OF PROPERTY. Upon termination of this Agreement, the Employee
shall deliver all property (including keys, records, notes, data, memoranda,
models, and equipment) that is in the Employee's possession or under the
Employee's control which is Employer's property or related to Employer's
business. Such obligation shall be governed by any separate confidentiality or
proprietary rights agreement signed by the Employee.
12. NOTICES. All notices required or permitted under this Agreement shall be
in writing and shall be deemed delivered when delivered in person or deposited
in the United States mail, postage paid, addressed as follows:
Employer:
Bookdigital.com Inc.
5 Bayberry Drive
Princeton, NJ 08540
Employee:
Susan Schuler
8 Elmwynd Drive
Allentown, New Jersey 08501
Such addresses may be changed from time to time by either party by providing
written notice in the manner set forth above.
13. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties and there are no other promises or conditions in any other agreement
whether oral or written. This Agreement supersedes any prior written or oral
agreements between the parties.
14. AMENDMENT. This Agreement may be modified or amended, if the amendment
is made in writing and is signed by both parties.
15. SEVERABILITY. If any provisions of this Agreement shall be held to be
invalid or unenforceable for any reason, the remaining provisions shall continue
to be valid and enforceable. If a court finds that any provision of this
Agreement is invalid or unenforceable, but that by limiting such provision it
would become valid or enforceable, then such provision shall be deemed to be
written, construed, and enforced as so limited.
16. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce any
provision of this Agreement shall not be construed as a waiver or limitation of
that party's right to subsequently enforce and compel strict compliance with
every provision of this Agreement.
17. APPLICABLE LAW. This Agreement shall be governed by the laws of the State
of New York.
Employer:
Bookdigital.com Inc.
By: ____________________________________________________
Zahra Yamani
President
AGREED TO AND ACCEPTED.
Employee:
By: ____________________________________________________
Susan Schuler
EXHIBIT A
Description of Services
Maintain the books of the Company and assist in the operations of the Company
as required.
Initials:______
[TEXT]
<PAGE>
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made effective as of June 1,
1999, by and between Bookdigital.com Inc., ("the Employer"), of 5 Bayberry
Drive, Princeton, NJ 08540, and Zahra Yamani, ("the Employee"), of 321
Bloor Street West, Toronto, Ontario M55155, Canada.
A. Employer is engaged in the business of Internet and Web based commerce
B. Employer desires to have the services of the Employee.
C. Employee is willing to be employed by Employer.
Therefore, the parties agree as follows:
1. EMPLOYMENT. Employer shall employ Employee as a President to Develop the
Ecommerce business of the Company and develop and implement the long-term
strategy for the Company Employee accepts and agrees to such employment, subject
to the general supervision, advice and direction of Employer and the Employer's
supervisory personnel. Employee may also perform (I) such other duties as are
customarily performed by an employee in a similar position, and (ii) such other
and unrelated services and duties as may be assigned to Employee from time
to time.
2. BEST EFFORTS OF EMPLOYEE. Employee agrees to perform faithfully,
industriously, and to the best of Employee's ability, experience, and talents,
all of the duties that may be required by the express and implicit terms of this
Agreement, to the reasonable satisfaction of Employer. Such duties shall be
provided at such place(s) as the needs, business, or opportunities of the
Employer may require from time to time.
3. COMPENSATION OF EMPLOYEE. As compensation for the services provided by
Employee under this Agreement, Employer will pay Employee a one-time signing
bonus of $20,000.00 and an annual salary of $ 75,000.00 payable in monthly
installments payable on the first day and the fifteenth day of each month. Upon
termination of this Agreement, payments under this paragraph shall cease;
provided, however, that the Employee shall be entitled to payments for periods
or partial periods that occurred prior to the date of termination and for
which the Employee has not yet been paid. Accrued vacation will be paid in
accordance with state law and the Employer's customary procedures.
4. REIMBURSEMENT FOR EXPENSES IN ACCORDANCE WITH EMPLOYER POLICY. The
Employer will reimburse Employee for "out-of-pocket" expenses in accordance
with Employer policies in effect from time to time.
5. RECOMMENDATIONS FOR IMPROVING OPERATIONS. Employee shall provide Employer
with all information, suggestions, and recommendations regarding Employer's
business, of which Employee has knowledge that will be of benefit to Employer.
6. CONFIDENTIALITY. Employee recognizes that Employer has and will have
information regarding the following:
- inventions
- products
- - prices
- - costs
- - future plans
- business affairs
- processes
- trade secrets
- technical matters
- customer lists
- product design
- copyrights
and other vital information (collectively, "Information") which are valuable,
special and unique assets of Employer. Employee agrees that the Employee will
not at any time or in any manner, either directly or indirectly, divulge,
disclose, or communicate in any manner any Information to any third party
without the prior written consent of the Employer. Employee will protect the
Information and treat it as strictly confidential. A violation by Employee of
this paragraph shall be a material violation of this Agreement and will justify
legal and/or equitable relief.
7. CONFIDENTIALITY AFTER TERMINATION OF EMPLOYMENT. The confidentiality
provisions of this Agreement shall remain in full force and effect for a 2 year
period after the termination of Employee's employment.
8. NON-COMPETE AGREEMENT. Recognizing that the various items of Information
are special and unique assets of the company, Employee agrees and covenants
that for a period of 1 year following the termination of this Agreement, whether
such termination is voluntary or involuntary, Employee will not directly or
indirectly
engage in any business competitive with Employer. This covenant shall apply to
the geographical area that includes the area within a 200 mile radius of New
York City Directly or indirectly engaging in any competitive business includes,
but is not limited to, (i) engaging in a business as owner, partner, or agent,
(ii) becoming an employee of any third party that is engaged in such business,
(iii) becoming interested directly or indirectly in any such business, or (iv)
soliciting any customer of Employer for the benefit of a third party that is
engaged in such business. Employee agrees that this non-compete provision will
not adversely affect the Employee's livelihood.
9. TERM/TERMINATION. Employee's employment under this Agreement shall be for
1 year, beginning on June 1, 1999. This Agreement may be terminated by either
party upon 30 days written notice. If Employer shall so terminate this
Agreement, Employee shall be entitled to compensation for 30 days, unless the
Employee is in violation of this Agreement. If Employee is in violation of this
Agreement, Employer may terminate employment without notice and with
compensation to Employee only to the date of such termination. The compensation
paid under this Agreement shall be the Employee's exclusive remedy.
10. COMPLIANCE WITH EMPLOYER'S RULES. Employee agrees to comply with all of
the rules and regulations of Employer.
11. RETURN OF PROPERTY. Upon termination of this Agreement, the Employee
shall deliver all property (including keys, records, notes, data, memoranda,
models, and equipment) that is in the Employee's possession or under the
Employee's control which is Employer's property or related to Employer's
business. Such obligation shall be governed by any separate confidentiality or
proprietary rights agreement signed by the Employee.
12. NOTICES. All notices required or permitted under this Agreement shall be
in writing and shall be deemed delivered when delivered in person or deposited
in the United States mail, postage paid, addressed as follows:
Employer:
Bookdigital.com Inc.
5 Bayberry Drive
Princeton, NJ 08540
Employee:
Zahra Yamani
321 Bloor Street West
Toronto, Ontario M55155
Canada
Such addresses may be changed from time to time by either party by providing
written notice in the manner set forth above.
13. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties and there are no other promises or conditions in any other agreement
whether oral or written. This Agreement supersedes any prior written or oral
agreements between the parties.
14. AMENDMENT. This Agreement may be modified or amended, if the amendment
is made in writing and is signed by both parties.
15. SEVERABILITY. If any provisions of this Agreement shall be held to be
invalid or unenforceable for any reason, the remaining provisions shall continue
to be valid and enforceable. If a court finds that any provision of this
Agreement is invalid or unenforceable, but that by limiting such provision it
would become valid or enforceable, then such provision shall be deemed to be
written, construed, and enforced as so limited.
16. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce any
provision of this Agreement shall not be construed as a waiver or limitation of
that party's right to subsequently enforce and compel strict compliance with
every provision of this Agreement.
17. APPLICABLE LAW. This Agreement shall be governed by the laws of the State
of New York.
Employer:
Bookdigital.com Inc.
By: ____________________________________________________
David Blechman
AGREED TO AND ACCEPTED.
Employee:
By: ____________________________________________________
Zahra Yamani
EXHIBIT A
Description of Services
Develop the Ecommerce business of the Company and develop and implement the
long-term
strategy for the Company.
Initials:______
<PAGE>
STANDARD FORM OF OFFICE LEASE
The Real Estate Board of New York, Inc.
Agreement of Lease, made as of this 8th Day of July of 1999, between A.M.
Property Holding Corp., as agent for 65 Broadway Co., LLC, with principal
offices at 352 7th Ave., 11th Fl., New York, NY party of
the first part, hereinafter referred to as OWNER, and Bookdigital.com, Inc.
party of the second part, hereinafter referred to as TENANT.
Witnesseth: Owner hereby lease to Tenant and Tenant hereby hires from Owner Unit
507 on the fifth floor in the building known as 65 Broadway in the borough of
Manhattan, City of New York, for the term
of 7 years and 3 months (or until such term shall sooner cease and expire as
hereinafter provided) to commence on the 1st day of October of nineteen
hundred and ninety-nine, and toend on the 31st day of
December two-thousands and seven both dates inclusive, at an annual rental rate
of See Annexed Rider which Tenant agrees to pay in lawful money of the
United States which shall be legal tender in payment of all debts and dues,
public and private, at the time of the payment, in equal monthly installments
in advance on the first day of each month during said term, at the office of
Owner or such other place as
Owner may designate, without any set off deduction whatsoever, except that
Tenant shall pay three monthly installment(s) on the execution hereof
(unless this lease be a renewal).
In the event that, at the commencement of the term of this lease, or
thereafter, Tenant shall be in default in the payment of rent to Owner
pursuant to the terms of another lease
with Owner or with
Owner's predecessor in interest. Owner may at Owner's option and without notice
to Tenant add the
amount of such arrears to any monthly installment of rent payable hereunder and
the same shall be
payable to Owner as additional rent.
The parties hereto, for themselves, their heirs, distributes,
executors, administrators, legal
representatives, successors and assigns, hereby covenant as follows:
Rent: 1. Tenant shall pay the rent as above and as hereinafter
provided.
Occupancy: 2. Tenant shall use and occupy demised premises for Office
Space and for no other purpose.
Tenant Alterations:
3. Tenant shall make no changes in or to the demised premises of any nature
without Owner's prior written consent of Owner, and to the provisions of
this article. Tenant, at Tenant's expense, may make
alterations, installations, additions or improvements which are non-structural
and which do not affect utility services or plumbing and electrical lines,
in or to the interior of the demised premises by using contractors or
mechanics first approved in each instance by Owner. Tenant shall,
before making any alterations, additions, installations or improvements, at
its expense, obtain all permits, approvals and
certificates required by any governmental or quasi-governmental bodies and (upon
completion) certificates
of final approval thereof and shall delivery promptly duplicates of all such
permits, approvals and
certificates to Owner and Tenant agrees to carry and will cause Tenant's
contractors and sub-contractors
to carry such workman's compensation, general liability, personal and property
damage insurance as
Owner may require. If any mechanic's lien is filed against the demised
premises, or the building of which
the same forms a part, for work claimed to have been done for, or materials
furnished to, Tenant, whether
or not done pursuant to this article, the same shall be discharged by Tenant
within thirty days thereafter,
at Tenant's expense, by payment or filing the bond required by law.
All fixtures and all paneling,
partitions, railings, and like installations, installed in the premises at any
time, either by Tenant or by Owner on Tenant's behalf, shall, upon
installation, become the property of Owner
and shall remain upon
and be surrendered with the demised premises unless Owner, by notice to the
Tenant no later than twenty
days prior to the date fixed at the termination of this lease, elects to
relinquish Owner's right thereto and
to have them removed by Tenant, in which event the same shall be removed from
the premises by Tenant
prior to the expiration of the lease , at Tenant's expense. Nothing in this
Article shall be construed to give
Owner title to or to prevent Tenant's removal of trade fixtures, moveable office
furniture and equipment,
but upon removal of any such from the premises or upon removal of other
installations as may be required
by Owner, Tenant shall immediately and at its expense, repair and restore the
premises to the condition
existing prior to installation and repair any damage to the demised premises or
the building due to such
remove. All property permitted or required to be removed by Tenant at the end
of the term remaining in
the premises after Tenant's removal shall be deemed abandoned and may, at the
election of Owner, either
be retained as Owner's property or may be removed form the premises by Owner, at
Tenant's expense.
Maintenance and Repairs:
4. Tenant shall throughout the term of this lease, take good care of the demised
premises and the fixtures
and appurtenances therein. Tenant shall be responsible for all damage or injury
to the demised premises
or any other part of the building of the building and the systems and the
equipment thereof, whether
requiring structural or nonstructural repairs caused by or resulting form
carelessness, omission, neglect or
improper conduct of Tenant. Tenant's subtenants, agents, employees, invitees or
licensees, or which arise
out of any work, labor, service or equipment done for our supplied to Tenant or
any subtenant or arising
out of the installation use or operation of the property or equipment of Tenant
or any subtenant. Tenant
shall also repeal all damage to the building and the demised premises caused by
the moving of Tenant's
fixtures, furniture's and equipment. Tenant shall promptly make at Tenants
expense all repairs in and to
the demised premises for which Tenant is responsible using only the contractor
for the per trade submitted
by owner. Any other repairs in or to the building or the facilities and systems
thereof for which Tenants is
responsible shall be performed by Owner at the Tenant's expense. Owner shall
maintain in good working
order and repair the exterior and the structural portions of the building,
including the structural portions
of its demised premises, and the public portions of the building interior and
the building plumbing,
electrical, heating and ventilating systems (to the extent such systems
presently exist) serving the demised
premises. Tenant agrees to give prompt notice of any detective condition in the
premises for which
Owner may be responsible hereunder. There shall be no allowance to Tenant for
diminution of rental
value and no liability on the part of Owner by reason of inconvenience,
annoyance or injury to business
arising form Owner or others making repairs, alterations, additions or
improvements in or to any portion
of the building or the demised premises or in and to the failure of Owner to
comply with covenant of
this or any other article of this be by way of an action for damages for breach
of contract. The provisions
of this Article 4 shall not apply in the case of fire or other casualty, which
are dealt with in Article 9 hereof.
Window Cleaning:
5. Tenant will not clean nor require, permit, suffer or allow any window in the
demised premises to be
cleaned form the outside in violation of Section 202 of the Labor Law or any
other applicable law or of the
Rules of the Board of Standards and Appeals, or of any other Board or body
having or asserting jurisdiction.
Requirements of Law, Fire Insurance, Floor Loads:
6. Prior to the commencement of the lease term if Tenant is then in possession
and at all times thereafter, Tenant, at Tenant's sole cost and expense, shall
promptly comply will all present and future laws, orders
and regulations of all state, federal, municipal and local governments,
departments, commissions and
boards and any direction of any public officer pursuant to law, and all orders
rules and regulations of the
New York Board of Fire Underwriters, Insurance Services Office, or any similar
body which shall impose
any violation, order or duty upon Owner or Tenant with respect to the demised
premises, whether or not
arising out of Tenant's use or manner of use thereof, (including Tenant's
permitted use) or with respect to
the building if arising out of Tenant's use or manner of use of the premises or
the building (including the
use permitted under the lease). Nothing herein shall require Tenant to make
structural repairs or
alterations unless Tenant has, by its manner of use of the demised premises or
method of operation
therein, violated any such laws, ordinances, orders, rules, regulations or
requirements with respect thereto.
Tenant may, after securing Owner to Owner's satisfaction against all damages,
interest, penalties and
expenses including but not limited to, reasonable attorney's fees, by cash
deposit or by surely bond in an
amount and in a company satisfactory to Owner, contest and appeal any such laws,
ordinances, orders,
rules, regulations, or requirements provided same is done with all reasonable
promptness and provided
such appeal shall not be subject Owner to prosecution for a criminal offense or
constitute a default under
any lease or mortgage under which Owner may be obligated, or cause the demised
premises or any part
thereof to be condemned or vacated. Tenant shall nor do or permit any act or
thing to be done in or to the
demised premises which is contrary law, or which will invalidate or be in
conflict with public liability, fire
or other policies of insurance at any time carried by or for the benefit of
Owner with respect to demised
premises or the building of which the demised premises for a part, or which
shall or might subject Owner
to any liability or responsibility to any person or for property damage. Tenant
shall knot keep anything in
the demised premises except as not or hereafter permitted by the Fire
Department, Board of Fire
Underwriters, Fire Insurance Rating Organization or other authority having
jurisdiction, and then only in
such manner which will increase the insurance rate for the building or any
property located therein over
that in effect prior to the commandment of Tenant's occupancy. Tenant shall pay
all costs, expenses,
fines, penalties, or damages which may be imposed upon Owner by reason of
Tenant's failure to comply
with the provisions of this article and if by reason of such failure to comply
with provisions of this article
and if by reason of such failure the fire insurance rate shall at the beginning
of this lease or at any time
thereafter, be higher than it otherwise would be, then Tenant shall reimburse
Owner, as additional rent
hereunder for that portion of all fire insurance premiums thereafter paid by
owner which shall have been
charged because of such failure by Tenant. In action or proceeding wherein
Owner and Tenant are parties
a schedule or "make-up" of rate for the building or demised premises issued by
the New York Fire
Insurance Exchange, or other body making fire insurance rates applicable to said
premises shall be
conclusively evidence of the facts therein stated and of the several items and
charges in the fire insurance's
rates then applicable to said premises. Tenant shall not place a load upon any
floor of the demised
premises exceeding the floor load per square foot area which it was designed to
carry and which is
allowed by law Owner 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 setting sufficient in Owner's judgment, to absorb and
prevent vibration, noise and
annoyance.
Subordination:
7. This lease is subject and subordinate to all ground now or hereafter or
underlying leases and to all
mortgagees which may now or hereafter affect such leases or the real property of
which demises premises
are a part and to all renewals, modifications, consolidations, replacements and
extensions of any such
underlying leases and mortgages. This clause shall be self-operative and no
further instrument of
subordination shall be required by any ground or underlying lessor or by any
mortgages, affecting any
lease or the real property of which the demised premises are a part. In
confirmation of such
subordination, Tenant shall from time to time execute promptly any certificate
that Owner may request.
Property Loss, Damage Reimbursement Indemnity:
8. Owner or its agent shall not be liable for nay damage to property of Tenant
or of others damage to
property of Tenant or of others entrusted to employees of the building, not for
loss of or damage to any
injury or damage to persons or property resulting from any cause of whatsoever
nature, unless caused by
or due to the negligence of Owner, its agents servants or employees. Owner or
its agents will not be liable
for any such damage caused by other tenants or persons in, upon or about said
building or caused by
operations in construction of any private, public or quasi public work. If any
time any windows of the
demised premises are temporarily closed, darkened or bricked up (or permanently
closed, darkened or
bricked up, if required by law) for any reason whatsoever including, but not
limited to Owner's own acts,
Owner shall not be liable for any damage Tenant may sustain thereby and Tenants
shall not be entitled to
any compensation there for nor abatement or diminution of rent nor shall the
same release Tenant from its
obligations hereunder nor constitute an eviction. Tenant shall indemnify and
save harmless Owner
against and from all liabilities, obligations, damages penalties, claims, costs
and expenses for which
owner shall not be reimbursed by insurance, including reasonable attorneys fees,
paid, subcontractors,
employees, invitees, or licenses, of any covenant or condition of this lease or
the carelessness, negligence
or improper conduct of the Tenant. Tenant's agent contractor's employees
invites or licenses of any sub-
tenant. In case any action or proceeding is brought against Owner, will at
Tenant's expense resist or
defiant such action or proceeding by counsels approved by Owner in writing such
approval not to be
unreasonably withheld.
Destruction Fire and Other Casualty:
9. (a) If the demised premises or any part thereof shall be damaged be fire or
other casualty. Tenant shall
give immediate notice thereof to Owner and this lease shall continue in full
force and effect except as
hereinafter set forth. (b) If the demised premises are partially damaged or
rendered partially unusable by
fire or other casualty, the damages thereto shall be repaired by and at the
expense of Owner and the rent
and other items of additional rent, until such repair shall be substantially
completed, shall be apportioned
from the day following the causality according to the part of the premises which
usable. (c) If the demised
premises are totally damaged or rendered wholly unusable by fire or other
casualty then the rent and other
items of additional rent as hereinafter expressly provided shall be
proportionately paid up to the time of
the casualty and thenceforth shall cease until the date when the premises shall
have been repaired and
restored by Owner (or sooner reoccupied in part by Tenant then rent shall be
apportioned as provided in
subsection (b) above), subject to Owner's right to elect not to restore the same
as hereinafter provided. (d)
If the demised premises are rendered wholly unusable or (whether or not the
demised premised are
damaged in whole or in part) if the building shall be so damaged that Owner
shall decide to demolish it or
to rebuild it then in any such events. Owner may elect to terminate this lease
by written notice to Tenant
given within 90 days after such fire a casualty or 30 days after adjustment of
the insurance claim for such
fire or casualty whichever specific a date for the expiration of the lease,
which date shall not be more than
60 days after the giving of such notice, and upon the date specified in such
notice the term of this lease
shall expire as fully and completely as if such date were the date set forth
above for the termination of this
lease and Tenant shall forthwith quit, surrender and vacate the premises without
prejudice however, to Landlord's rights and remedies against Tenant under
the lease provision in effect prior to such termination
and any rent owing shall be paid up to such date and any payment of rent made by
Tenant which were on
account of any period subsequent to such date shall be returned to Tenant.
Unless Owner shall serve a
termination notice as provided for herein, Owner shall make the repairs and
restorations under the
conditions of (b) and (c) hereof, with all reasonable expedition subject to
delays due to adjustment of
insurance claims, labor troubles and causes beyond Owner's control. After any
such casualty Tenants
shall cooperate with Owner's restoration by removing form the premises as
promptly as reasonably possible, all of Tenant's salvageable inventory and
moveable equipment, furniture and other property.
Tenant liability for rent shall resume five (5) days after written notice from
Owner that the premises are
substantially ready for Tenant's occupancy. (e) Nothing contained herein above
shall relieve Tenant form
liability that may exist as a result of damage from fire or other casualty.
Notwithstanding the foregoing
including Owner's obligation to restore under subparagraph (b) above, each party
shall look first to any
insurance in its favor making any claim against the other party for recovery for
loss or damage resulting
from fire or other casualty, and to the extent permitted by law, Owner and
Tenant each hereby releases
and waives all right of recovery with respect to subparagraphs (b), (d), and (e)
above, against the other or
any one claiming through rounder each of them by way of subrogation or
otherwise. The release and
waiver herein referred to shall be deemed to include any loss or damage to the
demised premises and/or to
any personal property, equipment, trade fixtures, goods and merchandise located
therein. The foregoing
release and waiver shall be in force only if both releaser insurance policies
contain a clause providing that
such a release or waiver shall invalidate the insurance. If and to the extent
that such party benefitting from
the waiver shall pay such premium within ten days after written demand or shall
be deemed to have
agreed that the party obtaining insurance coverage shall be free of any further
obligation under the
provisions hereof with respect of waiver of subrogation. Tenant acknowledges
that Owner will not carry
insurance or Tenant's furniture and/pr furnishing or any fixtures or equipment
improvements, or
removable by Tenant and agrees that Owner will not be obligate to repair any
damage thereto or replace
the same. Tenant hereby waives the provisions of Section 227 of the Real
Property Law and agrees that
the provisions of this article shall govern and control in lieu thereof.
Eminent Domain:
10. If the whole or any part of the demised premise shall be acquit or condemned
by Eminent Domain for any public or quasi public use or purpose then and in
that event the term of this lease shall cease and terminate form the date of
title vesting in such proceeding and Tenant shall have no claim for the value
of any unexpired term of said lease and assigns to Owner, Tenant's entire
interest in any such award. Tenant shall have the right to make an
independent claim to the condemning authority for the value of Tenant's
moving expenses and personal property, trade fixtures and equipment provided
Tenant is entitled pursuant to the terms of the lease to remove such
property, trade fixture and equipment at the end of the term and
proved further such claim does not reduce Owner's award.
Assignment Mortgage:
11. Tenant for itself, its heirs, distributors executors, administrators, legal
representative successor and
assigns expressly covenants that it shall not assign mortgage or encumber this
agreement not underlet or
suffer or pert the demised premises or nay part thereof to be used by others,
without the prior written
consent of Owner in each instance. Transfer of the majority of the stock of a
corporate Tenant on the
majority partnership interest of a partnership Tenant shall be deemed an
assignment. If this lease be
assigned or if the demise premise or any part thereof by underlet or occupied by
anybody other than
Tenant Owner may, after default by Tenant, collect rent form assignee,
under-tenant or occupant and
apply the net amount collected to the rent herein reserve but not such
assignment, underletting occupancy
or collection shall be deemed a waiver of this covenant or the acceptance of the
assignee, under-tenant or
occupant as tenant or a release of Tenant from the further performance by Tenant
of convenants on the
part of Tenant herein contained. The consent by Owner to an assignment or
underletting shall not in any wise be construed to relieve Tenant from
obtaining the express consent in writing of Owner to any further
assignment or underletting
Electric Current:
12. Rates and conditions in respect to submetering ore rent inclusion, as the
case may be, to be added in
RIDER attached hereto. Tenant covenants and agrees that at all time its use of
electric current shall not
exceed the capacity of existing feeders to the building or the risers or wiring
installation and Tenant may
not use any electrical equipment which, in Owner's opinion reasonable exercised
will overload such installations or interfere with the use thereof by other
tenants of the building. The change at any time of
the character of electric service shall in no wise make Owner liable or
responsible to Tenant, for any loss
damages or expenses, which Tenant may sustain.
Access to Premises:
13. Owner or Owner's agents shall have the right (but shall not be
obligated) to enter the demised
premises in any emergency at any time and at other reasonable times to examine
the same and to make
such repairs replacements and improvements as Owner may deem necessary and
reasonably desirable to
the demised premises or to any other portion of the building or which owner may
deem necessary and
reasonably desirable to the demised premises or to any other portion of the
building or which Owner may
elect to perform. Tenant shall permit Owner to use and maintain and replace
pipes and conduits in and through the demised premises and to erect new pipes
and conduits therein provided they are concealed
within the walls, for floor, or ceiling. Owner may, during the progress of nay
work in the demised
premises take all necessary materials and equipment into said premises without
the same constituting an
eviction nor shall the Tenant be entitled to any abatement of rent while such
work is in progress nor to
any damages by reason of loss or interruption of business or otherwise.
Throughout the term hereof
Owner shall have the right to enter the demised premises at reasonable hours for
the purpose of showing
the same to prospective purchasers or mortgagees of the building and during the
last six months of the
term for the purpose of showing the same to prospective tenants. If Tenant
is not present to open and permit an entry into the demised premises. Owner
or Owner's agents may enter the same whenever such entry may be necessary or
permissible by master key or forcibly and provided reasonable care
is exercised to safeguard Tenant's property, such entry shall not render Owner
or its agents liable therefor or, nor in any event shall the obligations of
Tenants hereunder be
affected. If during the last month of the term tenant shall have removed all or
substantially all of Tenant's property there from Owner may immediately enter,
alter, or
redecorated, renovate the demised premises without limitation or abatement of
rent, or
incurring liability to Tenants for any compensation and such act shall have no
effect on
this lease or Tenant's obligations hereunder.
Vault 14. No Vaults, vault space or area, weather or not enclosed or
covered, not Vault Space within the property line of the building is leased
hereunder, anything Area contained in or indicated on any sketch, blue print
or plan, or anything contained elsewhere in this lease to the contrary
notwithstanding. Owner makes no representation as to the location of the
property line of the building. All vaults and
vault space and all such areas not within the property line of the building,
which Tenant
may be permitted to use and/ or occupy, is to be used and/or occupied under a
revocable
license, and if any such license be revoked, or if the amount of such space or
area
be diminished or required by and federal, state or municipal authority or public
utility,
Owner shall not be subject to any liability nor shall Tenant be entitled to any
compensation or diminution or abatement of rent, nor shall such revocation,
diminution
or requisition be deemed constructive or actual eviction. Any tax, fee or charge
of
municipal authorities for such vault or area shall be paid by Tenant.
Occupancy 15. Tenant will not at any time use or occupy the demised premises
in
violation of the certificate of occupancy issued for the building of which
the demised premises are apart. Tenant has inspected the premises and accept
them as is, subject to the riders annexed hereto with respect to Owner's
work, if any. In any event Owners makes no representation as the condition of
the premises and Tenant agrees to accept the same subject to violations,
weather or not of record.
Bankruptcy 16. (a) Anything elsewhere in this lease to the contrary
notwithstanding, this lease may can- called by Owner by the sending of a
written notice to
Tenant within a reasonable time after the happening of any one or more of the
following events: (1) the commencement of a case in bankruptcy or under the
laws of any state
naming Tenant as the debtor; or (2) the making of the tenant an assignment or
any other
arrangement for the benefit of the creditors under any state statue. Neither
Tenant nor
any person claiming through or under Tenant, or by reason of any statue or order
of court,
shall therefore be entitled to possession of the premises demised but shall
forthwith quit
and surrender the premises. If this lease shall be assigned in accordance with
its terms,
the provisions of this Article 16. shall be applicable only to the party then
owning
Tenant's interest in this lease.
(b) It is stipulated and agreed that in the event of the termination of this
lease pursuant to
(a) hereof, Owner shall forthwith, notwithstanding any other provisions of this
lease to
the contrary, be entitled to recover from Tenant as and for liquidated damage an
amount
equal to the difference between the rent reserved hereunder for the unexpired
portion of
the term demised and the fair and reasonable rental value of the demised
premises for the
same period. In the computation of such damages the difference between any
installment
of rent becoming due hereunder after the date of termination and the fair and
reasonable
rental value of the demised premises for the period for which such installment
was
payable shall be discounted to the date of termination at the rate of four
percent (4%) per
annum. If such premises or any part thereof be re-let the Owner for the
unexpired term of
said lease, or any part thereof before presentation of proof of such liquidated
damages to
any court, commission or tribunal the amount of rent reserved upon such
re-letting shall be deemed to be the fair an the reasonable rental value for
the part or the whole of the
premises so re-let during the term of the re-letting. Nothing herein contained
shall limit or
prejudice the right of the Owner to prove for and obtain as liquidated damages
by reason
of such termination an amount equal to the maximum allowed by the statue or rule
of law
in effect at the time when, and weather or not such amount be greater, equal to,
or less
that the amount of the difference referred to the above.
Default 17. (1) If Tenants defaults in fulfilling any of the covenants of
this lease
other then covenants for the payment of rent or additional rent, or if the
demises premises become vacant or deserted: or if any execution or attachment
shall be
issued against Tenant or any of Tenant's property whereupon the demised premises
shall
be taken or occupied by someone other than Tenants: or if this lease be rejected
under
$235 of Title 11 of the US Code: (bankruptcy code) or if Tenants shall fail to
move into or take possession of the premises within thirty (30) days after
the commencement of
terms of this lease, then, in anyone or more of such events, upon Owner serving
a written
fifteen(15) days notice upon, Tenant specifying the nature of said default and
upon the expiration of said fifteen (15) days, if Tenant shall have failed
to comply with
or remedy
such default, or if the said default or omission complained of shall be of
nature that the
same cannot be completed cured or remedied within said fifteen (15) day period,
and if
Tenant shall not have diligently commenced curing such default within such
fifteen (15)
day period, and shall not therefore with reasonable diligence and in good faith,
proceed to
remedy or cure such default, then Owner may serve a written five (5) days'
notice of
cancellation of this lease upon Tenant, and upon the expiration of five(5) days'
this lease
and the term thereunder shall end and expire as fully and completely as if the
expiration
of such five (5) day period were the day herein definitely fixed for the end
and expiration
of this lease and the term thereof and Tenant shall then quit and surrender
the demised premises to Owner but Tenant shall remain liable as hereinafter
provided.
(2) If the notice provided for in (1) hereof shall have been given, and the item
shall expire
as a foresaid: or if Tenant shall make default in the payment of the rent
reserved herein or
any item additional rent herein mentioned or any part of either or in make in
other
payment herein required: then and in any of such events Owner may without
notice, re- enter the demised premised either by force or otherwise, and
dispossess Tenant by
summary proceedings or otherwise, and the legal representation of Tenants or
other
occupant of demised premises and remove their effects and hold the premises as
if this
lease had not been made, and Tenant hereby waives the service of notice of
intention to
re-enter or to institute legal proceedings to that end. If Tenant shall make
default
hereunder prior to the date fixed to commencement of any renewal of extension of
this
lease, Owner may cancel and terminate such renewal or extension agreement by
written
notice.
Remedies of 18. in case of any such default, re-try, expiration and /or
dispossess
Owner and by summary proceedings or other wise, (a) the rent shall become
Waiver of due thereupon and be paid up to the time of such re-entry,
Redemption: dispossesses and/ or expiration, (b) Owner may re-let the premises
or otherwise, for a any part or parts thereof, either in the name of Owners
or otherwise, for a term or terms, which may at Owners option be less than or
exceed the period which would otherwise have constituted the balance of the term
of this
lease and may grant concessions or free rent or charge a higher rental than that
in this
lease, and/or Tenant or the legal representatives of Tenant shall also pay
Owner as Liquidated damages for the failure of Tenant to observe and perform
said Tenant's covenants herein contained any deficiency between the rent hereby
reserved and /or
covenanted to be paid and the net amount, if any, of the rents collected on
account of the
lease or lease of the demised premises for each month of the period which would
otherwise have constituted the balance of the term of this lease. The failure of
Owner to
re-let the premises or any part or parts thereof shall not release or affect
Tenant's liability
for damages, In computing such liquidated damages there shall be added to the
said
deficiency such expenses as Owner may incur in connection with re-letting, such
as legal
expenses, reasonable attorneys' fees, brokerage, advertising and for keeping the
demised
premises in good order or for preparing the same for the re-letting. Any such
liquidated
damages shall be paid in monthly installments by Tenants on the rent day
specified in this
lease and any suit brought to collect the amount of the deficiency for any month
shall not
prejudice in any way the rights of Owner to collect the deficiency for any
subsequent
month by similar proceeding. Owner in putting the demised premises in good order
or preparing the same for re-rental may, at Owners option, make such
alterations, repairs,
replacements, and/or decoration in the demised premises as Owner in Owner's sole
judgment, considers advisable and necessary for the purpose of re-letting the
demised
premises and the making of such alterations, repairs, replacement and/or
decorations
shall not operate or be construed to release Tenants from liability hereunder as
aforesaid.
Owner shall in no event liable in any way whatsoever for failure to re-let the
demised
premises, or in the event that the demised premises are re-let, for failure to
collected the
rent therefore under such re-letting, and in no event shall Tenant be entitled
to receive
any excess if any, of such net rents collects over the sums payable by Tenant to
Owner
here under. In the event of a branch or threatened breach by Tenant of any
of the covenant provisions or hereof, Owner 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 Owner from any other remedy, in law or in equity.
Tenant
hereby expressly waives any and all rights of redemption granted by or under any
present or future laws in the event of Tenant being evicted o dispossessed for
any cause,
or In the event of Owner obtaining possession of demised premises, by reason of
the
violation by Tenant of any of the covenants and conditions of this lease, or
otherwise.
Fees and. 19. If tenants shall default in the observance of performance
of any
Expenses term or covenant on Tenant's part to be observed or performed
under or by virtue of any of the terms or provisions in any article
of this lease, after notice if required and upon expiration of any applicable
grace period if
any, (except in an emergency) then, unless otherwise provided elsewhere in this
lease,
Owner may immediately or at any time thereafter and without notice perform the
obligation of Tenant thereunder, if Owner, in connection with foregoing or in
connection
with any default by Tenant in the covenant to pay rent hereunder, makes any
expenditures or incurs any obligations for the payment of money, including but
not
limited reasonable attorneys fees, in instituting, prosecuting or defending any
action or
proceeding, and prevails in any such action or proceeding then Tenants will
reimburse
Owner for such sums so paid or obligations incurred with interest and costs.
The foregoing expenses incurred by reason of Tenant's default shall be
deemed to be
additional rent hereunder and shall be paid Tenant to Owners within ten (10)
days
rendition of any bill or statement to Tenant therefor. If Tenants lease term
shall have
expired at the time of making of such expenditures or incurring of such
obligations, such
sums shall be recoverable by Owner, as damages.
Building 20. Owner shall have the right at any time without the same
constituting
Alteration an eviction and without the incurring liability to Tenant therefor
to change
and the arrangement and/or location of public entrances, passageways,
doors
Management doorways, corridors, elevators stairs, toilets or public parts of
the building and to change the name, number or designation by which the
building may be known.
There shall be no allowance to Tenant for diminution of rental value and no
liability on
the part of Owner by reason of inconvenience, annoyance or injury to business
arising
from Owner or other Tenants making any repairs in the building or any such
alterations,
additions, and improvements. Further more, Tenants shall not have any claim
against
Owner by reason of Owner's imposition of such control of the manner of access to
the
building by Tenants social or business visitors as the Owner may deem necessary
for the
security of the building and its occupants.
No Repre- 21. Neither Owner nor Owners agents have made any representations
sanitations promises with respect to the physical conditions of the building,
the land
by Owner upon which it is erected or the demised premises, the rents lease,
expenses
of operation or any other matter or thing affecting or related to the premised
expected as
here expressly set forth and no rights, casements or licenses are aquited by
Tenant by
implications or otherwise except as expressly set forth in the provision of this
lease.
Tenants has inspected the building and the demised premises and is thoroughly
acquaited
with their condition and agrees to take the same "as is" and acknowledges that
the taking
of possession of the premises by Tenants shall be conclusive evidence that the
said
premises and the building of which the same from a part were good and
satisfactory
condition at the time such possession was so taken, except s to Tenant defects.
All
understanding and agreements heretofore made between the parties hereto are
merged in
this contract, which alone fully and completely expresses the agreement between
owner
and Tenant and any executory agreement hereafter made shall in ineffective to
change,
modify, discharge or effect an abandonment of it in whole or in part, unless
such
executory agreement in writing and signed by the party against whom enforcement
of the
charge, modification, discharge or abandonment is sought.
End of 22. Upon the expiration or other termination of the term of this
lease
Term Tenant shall quit and surrender to Owner the demised premises,
broom
clean, in good order and condition, ordinary wear and damages which Tenant is
not required to repair as provided elsewhere in this lease expected, and Tenant
shall remove
all its property, Tenant's obligation to observe or perform this covenant shall
survive the
expiration or other termination of this lease. If the last day of this lease or
any renewal
thereof, fall on Sunday this ease shall expire at noon on the proceeding
Saturday unless it
be a legal holiday in which case it shall expire at noon on the proceeding
business day.
Quiet 23. Owners covenants and agrees with Tenants that upon Tenant
paying
Enjoyment: rent and additional rent and observing and performing all the
terms, covenants and conditions on Tenant's part to be observed and performed,
Tenants may peaceably and quietly enjoy the premises hereby demised, subject,
nevertheless to the terms and conditions of this lease including, but not
limited to Article
31 hereof and to the ground lease, underlying lease and mortgages hereinbefore
mentioned.
Failure 24. if Owners is unable to give possession of the demised premises
on the
to Give date of the commencement of term hereof, because of the holding-over
or
Possession retention of possession of any tenant, undertenant or occupants or
if the
demised premises are located in the building being constructed,
because such building has not been sufficiently completed to make the
premises ready for occupancy or because of the fact that a certificate of
occupancy has not been procured or
for any other reason, Owners shall not be subject to any liability for failure
to give
possession on said date and the validity of the lease shall not be impaired
under such
circumstances, not shall the same be construed in any wise to extend the term of
this
lease, but the rent payable hereunder shall be abated (provided Tenant is not
responsible
for Owner's inability to obtain possession or complete construction) until after
Owner
shall have given Tenant written notice that the Owner is able to deliver
possession in
condition required by this lease. If permission is given to Tenant to enter into
the
possession of the demised premises or occupy premises other than the demised
premises prior to the date specified as the commencement of the term of this
lease, Tenant covenants and agrees that such possession and/or occupancy
shall be deemed to be under
all terms, covenants, conditions and provisions of this lease except the
obligation to pay
the fixed annual rent set forth in the preamble to this lease. The provision of
this article
are intended to constitute "an express provision to the contrary" within the
meaning of
Section 223-a of the New York Real Property law.
No Waivers 25. The failure of Owner to seek redress for violation of, or to
insist upon the strict performance of any covenant or condition of
this lease or of any of the Rules or Regulation, set forth or hereafter adopted
by Owner,
shall not prevent a subsequent act which would have originally constituted a
violation
from having all the force and effect of an original violation. The receipt by
Owner of rent
and/or additional rent with knowledge of the breach of any covenant of this
lease shall
not be deemed waiver of such breach and no provision of this lease shall be
deemed to
have been waived by Owner unless such waiver be in writing signed by Owner. No
payment by Tenant or receipt by Owner of a lesser amount that the monthly rent
herein
Stipulated shall be deemed to be other that on account of the earlier stipulated
rent, nor
shall any endorsement or statement of any check or any letter accompanying any
check or
payment as rent deemed an accord and satisfaction, and Owner may accept such
check or
payment without prejudice to Owner's right to recover the balance of such rent
or pursue
any other remedy in this lease provided. No act or thing done by Owner or Owners
agents
during this term hereby demised shall be deemed an acceptance of surrender of
said
premises and no agreement to accept such surrender shall be valid unless in
writing
signed by Owner. No employee of Owner or Owner's agent shall have any power to
accept the keys of said premises prior to the termination of the lease and the
delivery of
keys to any such agent or employee shall nor operate as a termination of the
lease or a
surrender of the premises.
Waiver of 26. It is mutually agreed by and between Owners and Tenants that
Trail by Jury: the respective parties hereto shall and they hereby do waiver
trial
by jury in any action proceeding or counterclaim brought by either
of the parties hereto against the other (except for personal injury or property
damage) on
any matter whatsoever arising out of or way connected with this lease, the
relationship of
Owner and Tenant, Tenant's use of or occupancy of said premises, and any
emergency
statutory or any other statutory remedy. It is further mutually agreed that in
the event
Owner commences any proceeding or action for possession including a summary
proceeding for possession of the premises. Tenant will not interpose any
counterclaim of
whatever Nature or description in any such proceeding including a counterclaim
under
Article 4 except for statutory mandatory counterclaims.
Inability to 27. This Lease and the obligation of Tenant to pay rent hereunder
and
Perform perform all of the other covenant and agreement hereunder on part
of
Tenant to be performed in no wise be affected, impaired or excused because Owner
is
unable to fulfill any of its obligations under this lease or to supply or is
delayed in
supplying
any service expressly or impliedly to be supplies or is unable to make, or is
delayed in
making any repair, additions alteration or decorations or is unable to supply or
delayed in
supplying any equipment, fixture or other material if Owner is prevented or
delayed from
so doing reason of strike or labor trouble or any cause whatsoever including,
but not
limited to government preemption or restrictions or by reason of any rule, order
of
regulation of any department or subdivision thereof any government agency or by
reason
of the conditions which have been or are affected, either directly or
indirectly, by war or
other emergency.
Bill and 28. Expect as otherwise in this lease provided a bill, statement,
notice or
Notice communication which Owners may desire or to required to give to
Tenant,
shall be deemed sufficiently given or rendered if, in writing delivered to
Tenant personally or sent by registered or certified mail address to Tenant at
the building
of which the demised premises from a part or at the last known residence address
or
business address Tenant or left at any of the aforeside premises addressed to
Tenant, and
the time of the rendition of such bill or statement and of the giving of such
notice or
communication shall be deemed to be time when the same is delivered to Tenants,
mailed, or left at the premises as herein provided. Any notice by Tenant to
Owner must
be served by registration or certified mail addressed mail to Owner at the first
hereinabove given or such other address, as Owner shall designate by written
notice.
Services 29. As long as Tenant is not in default under any of the covenants
of this
Provided by lease beyond the applicable grace period provided in this lease for
the
Owner curing of such default, Owner shall provide: (a) necessary
elevator
facilities on business days from 8 am to 6 pm and have one elevator
subject to call at all other times (b) heat to the demised premises when and as
required by
law, on business days from 8 am to 6 pm; water for ordinary lavatory purposes,
but if
Tenant uses or consumes water of any other purposes or in unusual quantities (of
which
fact Owner shall be the sole judge). Owner may install a water meter at Tenant
is expense
which Tenant shall therefore maintain at Tenant's expense in good working order
and
repair register such water consumption and Tenant shall pay or water consumed as
shown
on said meter as additional rent as and when bills rendered. (d) cleaning
service for the
demised premises on business days at Owner's expense provided that the same are
kept
in order by Tenant. If however, said premises are to be kept clean by Tenant, it
shall be
done at Tenant sole expense, in a manner reasonable satisfactory to Owner and no
one
other than persons approved by Owner shall be permitted to enter said premises
or the
building of which they are a part for such purpose. Tenant shall pay Owner the
cost of
removal of any of Tenant's refuse
and rubbish from the building: (e) if the demised premises are service by
Owner's air-
conditioning/cooling and ventilation system, air-conditioning/cooling will be
furnished to
Tenants from May 15th through September 30th on business days (Mondays through
Fridays, holidays excepted) from 8:00 am to 6:00 pm and ventilation will be
furnished on
business days during the aforesaid hours except when air conditioning/cooling is
being
furnished as aforesaid. If Tenant requires air conditioning/cooling or
ventilation for more
extended hours or Saturdays, Sundays or on holidays, as defined under Owner's
contract
with Operating Engineers Local 94-94A. Owner will furnish the same at Tenant
expenses.
Rider added to be added in respect to rates and conditions for such
additional service: (f) Owner reserves the right to stop services of heating,
elevators,
pluming, air conditioning, electric, power systems or cleaning of other
services, if any,
when necessary by reason of accident or for repairs, alterations, replacement
or
improvements necessary or desirable in the judgment of Owner for as long as may
be
reasonably required by reason thereof, If the building of which the demised
premises are
a part supplies manually operated elevator service, Owner at any time may
substitute
automatic control elevator service and proceed diligently with alteration
necessary
therefor without in any wise affecting this lease or the obligation of Tenant
hereunder.
Captions; 30. The Captions are inserted only as a matter of convenience and
for reference and in no way define, limit or describe the scope of
this lease not the intent of any provisions thereof.
Definitions: 31.The term "office" or 'offices" wherever used in this lease,
shall
be a construed to mean premises used as a store or stores
for the sale or display, at any time of good, wares or
merchandises, of any kind, or as a restaurant, shop, booth, bootblack, or other
stand,
barber shop, or for other similar purposes or for manufacturing. The term
"Owner" means
a landlord or lesser, and as used in this lease means only the owner, the
mortgage in
possession, for the time being of the land and building (or the owner of a lease
of the
building or of the land and building) of which the demises premises from a part,
so that in
the event of any sale or sales of said land and building or of said lease, or in
the event of a
lease of said building, or of the land and building, the said Owner shall be and
hereby
entirely freed and retrieved of all covenants and obligations of Owner
hereunder, and it
shall be deemed and constructed without further agreement between the parties or
their
successors in interest, or between the parties and the purchaser, at any such
sale, or the
said lessee of the building, or of the land and building, that the purchaser or
the lessee of
the building has assumed and agreed to carry out any and all covenants and
obligation of
Owner, hereunder. The words "re-enter" and "re-entry " as used in this lease are
not
restricted to their technical legal meaning.
The term " business days" as used in this lease shall exclude Saturday, Sunday
and all
days as observed by the State or Federal Government as legal holidays and those
designated as holidays by the applicable Building service union employees
service
contract or by the applicable Operating Engineers contact with respect to HVAC
service.
Whatever it is expressly provided in this lease that consent shall not be
unreasonable
withheld, such consent shall not be unreasonable delayed.
Adjacent: 32. If an excavation shall be made upon land adjacent the
Excavation demised premises, on or shall be authorized to be made. Tenant
Shortage shall afford to the person Shortage causing or authorized to
cause such excavation; license to enter upon the demised premises for the
purpose of
doing such work as said person shall deemed necessary preserve the wall of the
building
of which demised premises from a part from injury or damage and to support the
same by
proper foundation without any claim for damages or indemnity against Owner, or
diminution or abatement of rent.
Rules and 33. Tenant and Tenants servants, employees agents, visitors,
Regulation and licenses shall observed faithfully, and comply strictly with,
the
Rules an Regulations and such other further reasonable Rule and regulations as
Owner
and Owners agents may from time to time adopt. Notice of any additional rules or
registration shall be given in such manner as Owner may elect. In case Tenants
disputes
the reasonableness of any additional rule or Regulation hereafter made or
adopted by
Owner or Owner's agents, the parties hereafter agree to submit the question of
the
Reasonableness of such Rules or Regulations for decision to the New York office
of the
American Arbitration Association, whose determination shall be final and
conclusive,
upon the parties hereto. The right to dispute the reasonableness of any
additional Rules or
Regulation upon Tenant's part shall be deemed waived unless the same shall be
asserted
by service of a notice, in writing upon Owner with fifteen (15) days after the
giving of
notice thereof. Nothing.
RIDER OF THE LEASE DATED THE 8th DAY OF JULY OF 1999, BETWEEN
A.M. PROPERTY HOLDING CORPORATION AS AN AGENT FOR 65
BROADWAY CO., LLC AS LANDLORD AND BOOKDIG I ITAL.COM INC.,
AS TENANT.
1. NO CONFLICT: Wherever the terms, Covenants and conditions contained in the
printed
portion of this Lease shall be in conflict with any of the terms, covenants and
conditions of this
Rider, the additional clauses shall prevail.
2. DEFINITIONS AND CAPTIONS: As used in this Lease, each number (singular and
plural)
shall include all numbers and each gender shall include all genders. The
captions headings,
and marginal notes throughout this Lease are for convenience of reference only
and the
words contained therein shall in no way be held or deemed to define, limit,
explain, modify,
amplify, or add to the interpretation, construction, or meaning of an),
provision of, or the scope
or intent of, this Lease, nor in any way affect this Lease. Except as otherwise
expressly stated,
each payment provided to be made by the Tenant shall be in addition to, and not
in
substitution for, all other payments to be made by the Tenant to Landlord. The
term"PERSON"
used herein means person, firm, association, or corporation, as the case may be.
3. GOVERNING LAW AND SEVERABILITY: The laws of the State of New York shall
govern the validity, performance, and enforcement of this Lease. The invalidity
or
unenforceability of any provision of this Lease shall not affect or impair any
other provision. It
any provision of this Lease is capable to two constructions, one of which would
render the
provision invalid and the other of which would make the provision valid, then
the provisions shall have the other meaning which renders it valid.
4. ELECTRIC: If electric current is supplied by Landlord, Tenant covenants and
agrees to
purchase the same from the Landlord or Landlord's designated agent at charge
terms and
rates equal to Landlord's ACTUAL cost for electric consumed by Tenant, plus 12%.
Said
charges may be revised by Landlord in order to maintain the return to Landlord
produced
under the foregoing in the event that the Public Service Commission approves
changes in the
service classifications, terms, rates or charges for such public utility during
the term hereof.
Where more than one meter measures the service of the Tenant in the building,
the services
rendered through such meter may be computed and billed separately in accordance
with the
rate herein. Bills therefore shall be rendered at such times as Landlord may
elect. Landlord
and its agents shall not in any way be liable or responsible to Tenant for any
loss, damage or
expense which Tenant may sustain or incur if either the quantity or character of
electric
services is changed or is no longer available or suitable for Tenant's
requirements. Any riser
or risers to supply Tenant's electrical requirements, upon written request of
Tenant, will be
installed by Landlord, at the sole cost and expense of Tenant, if in Landlord's
sole judgment,
the same are necessary and will not cause permanent damage or injury to the
building or
demised premises or cause or create a dangerous injury to the building or
demised premises
or cause or create a dangerous or hazardous condition or entail excessive or
unreasonable
alterations, repairs or expense or interfere without disturb other tenants or
occupants. In
addition to installation of such riser or risers, Landlord will also at Tenant's
sole expense,
install all other equipment proper and necessary in connection therewith subject
to the
aforesaid terms and conditions. Tenant covenants and agrees that at all times
its use of
electric current shall never exceed the capacity of existing feeders to the
building or the risers
or wiring installations. It is further covenanted and agreed by the Tenant to
pay Landlord
within FIVE (5) days after rendition of any bill or statement to the Tenant
therefore, even it
said bill is rendered on advance of said installations. If any tax is imposed
upon the Landlord's
receipts from the sale or resale of electrical energy or gas or telephone
service to Tenant by
any Federal, State or Municipal Authority, Tenant covenants and agrees that,
where permitted
by law, Tenant's pro-rata share of such taxes shall be passed on to and included
in the bill of,
and paid by Tenant to Landlord. Landlord's failure during the term of this Lease
to prepare
and deliver any such statements or bills under this Paragraph, or any provisions
of this Lease,
shall not in any way be deemed a waiver of or cause Landlord to forfeit or
surrender its rights
to bill Tenant or collect same, including, but not limited to, the Fixed Annual
Rent or any
amount of Additional Rent, as the case may be, which may have become due
pursuant to this
Lease. Tenant's liability for any amounts due under this Paragraph shall survive
the expiration
or sooner termination of this Lease. If either the quantity or character of the
electrical service
is changed by the utility company supplying electrical service to the Building
or is no longer
available or suitable for Tenant's requirement, no such change, unavailability
or unsuitability
shall constitute an actual or constructive eviction, in whole or in part, or
entitle Tenant to any
abatement of diminution of the fixed annual rent or additional rent, or relieve
Tenant from any
of its obligations under this Lease or impose any liability upon Landlord, or
its agents, by
reason of inconvenience or annoyance to Tenant, or injury to or interruption of
Tenant's
business or otherwise. The foregoing arrangement shall also apply to the cost
for electric
consumed by Tenant to operate its air condition unit(s).
5. REAL ESTATE TAX ESCALATION:
a. Tenant shall pay, as additional rent, .53% of any and all increases in real
estate taxes
covering the land and the building of which the demised premises form a part.
Said increases
shall be the difference between the amount charged during any Tax Year and the
amount
charged during the Base Tax year.
b. Tax year shall mean each period of twelve (12) months commencing on the first
day
of July in which occurs any part of the term of this Lease or any such other
period of (12)
twelve months occurring during the term of this Lease as hereafter may be
adopted as the
fiscal year for real estate tax purposes of the City of New York or any other
governmental
authority.
c. Base Tax year shall mean the Tax Year 1999-00.
d. Tenant shall pay, as additional rent, .53% of any costs and expenses
including,
without limitation, reasonable counsel fees incurred by Landlord which result in
a reduction of
the assessed value of the land and the building as proposed by the City of New
York or any
other governmental authority for any Tax Year after the Base Tax Year to the
extent same do
not exceed the amount of any refund obtained as a result of such reduced
valuation.
Moreover, in the event Landlord obtains a refund under this Article, Landlord
shall pay a
portion of such refund to Tenant in the same proportion as the original tax was
paid by Tenant
to Landlord, less the cost of obtaining such refund, including Landlord's legal
fees, if said cost
was not paid by Tenant heretofore, but nothing herein contained shall be
construed to give
Tenant the right to seek a reduction in tax nor the Landlord an obligation to do
so.
e. Payment of additional rent pursuant to this Article shall be made within
five (5) days
of written demand by Landlord to Tenant.
f. The term "real estate taxes" shall mean all taxes assessed or imposed at any
time by
the City of New York or by any other governmental authority upon or against the
land and/or
building of which the demised premises form a part, and also any tax or
assessment levied,
assessed or imposed at any time by any governmental authority in connection with
the receipt
of income rents from said land and/or building. If due to a future change in the
method of
taxation, or in the taxing authority, a franchise, license, income, transit,
profit or other tax, fee,
or governmental imposition, however designated, shall be, levied, assessed or
imposed
against Landlord in substitution, in whole or in part, for the real estate
taxes, or in lieu of,
additional real estate taxes, then such franchise, license, income, transit,
profit, or other tax,
fee or governmental imposition shall be deemed to be included within the
definition of "real
estate taxes" for the purposes hereof.
g. any delay or failure of Landlord in billing any amount payable under this
Article shall
not constitute a waiver or in any way impair the continuing obligation of Tenant
to make
payments hereunder.
6. INSURANCE: Tenant, at its sole cost and expense, shall maintain at all times
during the
term of this Lease and at all times when Tenant is in possession of the demised
premises, a
commercial policy of general liability insurance in which Landlord, Landlord's
managing agent
and Tenant are the named insureds for any and all claims arising during the term
of this Lease
for damages or injuries to inventory, fixtures, goods, wares, merchandise and
property and/or
for any personal injury or loss of life, in, upon, or about the demised
premises, protecting
Landlord, Landlord's managing agent, any Superior Lessor, any mortgagees
designated by
Landlord, and Tenant against any liability whatsoever occasioned by accidents on
or about
the demised premises or any appurtenances thereto. Such policy is to be written
by a good
and solvent insurance company, satisfactory to Landlord, in the amount of TWO
MILLION
DOLLARS ($2,000,000.00) per occurrence (combined single limit), FOUR MILLION
DOLLARS ($4,000,000.00) in aggregate. Tenant agrees to deliver to Landlord a
certificate of
endorsement of the aforesaid insurance policy and upon Tenant's failure to
provide and keep
in force the aforementioned insurance, it shall be regarded as a material
default, entitling
Landlord to exercise any and all remedies provided by this Lease.
a. Tenant shall deliver to Landlord such policies or certificates of such
policies prior to
the commencement of the term of this Lease. Tenant shall deliver to Landlord and
any
additional named insureds all renewal policies or certificates at least thirty
(30) days prior to
written notice of such cancellation or modification, including, without
limitation, any such
cancellation resulting from non-payment of premiums. Landlord shall have the
right at any
time to reasonably require Tenant to increase the amount of insurance maintained
by Tenant
under this Article, so that the amount thereof, as reasonably determined by
Landlord,
adequately protects the interests of Landlord.
b. Tenant shall obtain, at its own cost and expense, naming both Landlord,
Landlord's
managing agent, and Tenant as named insureds, theft and fire insurance for all
personal
property which may be affixed to the realty now located in the leased premises
and including
any future installations.
c. Notwithstanding anything herein to the contrary, nothing herein shall
prevent
Landlord from recovering in the event of fire or loss under Landlord's fire or
other insurance
coverage for all betterments and improvements by Tenant so affixed to the
demised premises
as to be considered part of the realty under the law.
d. Tenant hereby releases Landlord, Landlord's partners or principals, disclosed
or
undisclosed, and its agents. and their respective employees in respect to any
claim occurring during the
term of this Lease and normally covered under a property, theft or fire
insurance policy with extended
coverage endorsement in the form normally used in respect to similar property in
New York County.
This waiver shall include any claim, including a claim for negligence, which
Tenant might
otherwise have against Landlord, Landlord's partners or principals, disclosed or
undisclosed,
and its agents and their employees for loss, damage or destruction with respect
to Tenant's
property by fire or other casualty (including rental value or business
interest).
e. As required by Landlord, Tenant shall be required to use its insurance
proceeds
towards replacing and restoring all betterments and improvement in the demised
premises.
f. Tenant acknowledges that Landlord will not carry insurance on Tenant's
furniture
and/or furnishings or any fixtures or equipment, improvements of appurtenances
removable
by Tenant and agrees that Landlord will not be obligated to repair any damage
thereto or
replace the same, except as provided by the relevant portions of the New York
General
Obligations Law
7. CLEANING, RUBBISH, REMOVAL AND ODORS
a. Landlord shall provide to Tenant free of charge daily garbage collection and
weekly
cleaning and vacuuming of the demised premises, provided however, that in the
event that
Landlord is temporarily unable to provide said service during the Lease term,
said inability
shall not constitute a ground for Tenant to withhold payment of all rent and
additional rents
due to Landlord under the terms of this Lease.
b. Tenant shall, in a manner satisfactory to Landlord, cause the demised
premises thereof to be neat and orderly. Tenant shall not permit any unusual or
noxious odors to
emanate from the demised premises. Tenant will, within ten (10) days after
written notice from
Landlord setting forth the specific condition complained of by Landlord, install
at its own cost
and expense, reasonable control devices or procedures to eliminate such odors,
if any. In the
event such condition is not remedied within said ten-day period, Landlord may,
at its
discretion, either (a) cure such condition and thereafter add the cost and
expense incurred by
Landlord therefore to the next monthly rental to become due and Tenant shall pay
said
amount as additional rent; or (b) treat such failure on Tenant's part to
eliminate such noxious
odors as a material default hereunder entitling Landlord to exercise any of its
remedies under
the terms of this Lease. Landlord shall have the right to enter the demised
premises upon
reasonable, notice to inspect same and ascertain whether they are clean and free
of odors.
c. Tenant covenants that it will hold Landlord harmless against all claims,
damages or
causes of action for damages arising after the commencement of the term of this
Lease and
will indemnify Landlord for all such suits, orders or decrees and judgments
entered thereon
brought on account of any such permeating from the demised
premises of unusual or objectionable odors or otherwise, and Tenant shall
further covenant to
pay Landlord's reasonable attorney's fees and expenses made necessary in
connection with
any claim or suit as aforesaid. If Landlord requires Tenant to install
reasonable control devices
or procedures to eliminate such odors, the material, size and location of such
installations
shall not commence until plans and specification therefore have been submitted
to and
approved by Landlord.
8. SORTING AND SEPARATION OF REFUSE AND TRASH: Tenant covenants and agrees,
at its sole cost and expense, to comply with all present and future laws, orders
and regulations
of all state, federal, municipal and local governments, departments, commissions
and boards
regarding the collection, sorting, separation and recycling of all waste
products, garbage,
refuse and trash, and otherwise. Tenant shall pay all costs, expenses, lines,
penalties or
damages which may be imposed on Landlord or Tenant by reason of Tenant's failure
to
comply with the provisions of this Article, and, at Tenant's sole cost and
expense, shall
indemnity defend and hold Landlord harmless (including legal fees and expenses
from and
against any actions, claims and suits arising from such noncompliance, utilizing
counsel
satisfactory to Landlord.
9. EXCULPATION: Tenant shall only look to Landlord's estate and property in the
Building for
the satisfaction of Tenant's remedies for the collection of a judgment (or other
judicial process)
requiring the payment of money by Landlord or its agents in the event of any
default or breach
by Landlord hereunder, and to no other property or assets of Landlord or its
agents, partners,
or principals, disclosed or undisclosed, for lien, levy, execution or other
enforcement
procedure for the satisfaction of Tenant's remedies under or with respect to
this lease, the
relationship of Landlord and Tenant hereunder or tenant's use or occupancy
of the demised
promises; and if Tenant hereunder shall acquire a lien on such property or other
assets by
judgment or otherwise, Tenant shall promptly release such lien by executing and
delivering to
Landlord an instrument to that effect prepared by Landlord.
10. INDEMNIFICATION: Tenant agrees to indemnify and save Landlord harmless
against and
from any and all claims by or on behalf of any person or persons, firm or firms
corporation or
occurrence whatsoever done by or on behalf of Tenant or Tenant's agents,
contractors,
servants, employees, invitees, or licensees, in or about the demised premises,
and will further
indemnify and save Landlord. harmless against and from any and all claims
arising from any
breach or default on the part of Tenant in the performance of any covenants or
agreements on
the part of Tenant to be performed, pursuant to the terms of the Lease, or
arising from any act
or negligence to Tenant, or any of its agents, contractors, servants, employees,
invitees, or licensees, and
from and against all costs, reasonable counsel fees, expenses and liabilities
incurred in or about any such
claim or action or proceeding brought thereon; and in any action or proceeding
that be brought against
Landlord by reason of any such claim, Tenant, upon notice from Landlord ,
covenants to defend, at
Tenant's expense, such action or proceeding by counsel reasonably satisfactory
to Landlord whose consent
shall not be unreasonably withheld.
11. TENANT'S REPRESENTATION:
a. Tenant covenants that it will not do or suffer to be done in or upon said
premises any
act or thing which shall damage the Landlord or its tenants, and covenants that
no business
shall be carried on, nor any act or acts suffered or permitted to be done on
said premises that
in any manner conflicts with, or is contrary to, any law.
b. Tenant agrees that the value of the demised premises and the reputation of
Landlord
will be seriously injured if the premises are used for any obscene or
pornographic purposes or
any sort of commercial sex establishment. Tenant agrees that Tenant will not
bring or permit
any obscene material on the premises, and shall not permit or conduct any
obscene, nude, or
semi-nude live performances on the premises, nor permit use of the premises for
nude
modeling, rap sessions, or as a so-called rubber-goods shop, or as a sex club of
any sort, or
as a "massage parlor." Tenant agrees further that Tenant will not permit any of
these uses by
any sub lessee or assignee of the promises. Tenant agrees that it at any time
Tenant violates
any of the provisions of this Article, such violation shall be deemed a breach
of a substantial
obligation of the ease.
c. Tenant warrants, represents and agrees that it has no claims or causes of
action
against Landlord, Landlord's principals or agents for any reason whatsoever.
Moreover, in
further consideration for this Lease herein, Tenant and its principals hereby
release Landlord,
Landlord's principals and agents from any and all claims and/or causes of
action, it any, that
Tenants may have against them, from the beginning of time until the date of the
signing of this
Lease.
12. WAIVER OF COUNTERCLAIMS: Tenant hereby waives its right and agrees not to
interpose any counterclaim or set off, of whatever nature or description, in any
actions or
proceedings which may be commenced by Landlord against Tenant to recover rent,
additional
rent, other charges, or for damages or in connection with any matters or claims
whatsoever
arising out of or in any way connected with this Lease, or any renewal,
extension, holdover, or
modification thereof, the relationship of Landlord and Tenant, or Tenant's use
or occupancy of
said promises. This clause, as well as the "waiver of jury trial" provision of
this Lease shall
survive the expiration, early termination, or cancellation of this Lease or the
term thereof.
Nothing herein contained, however, shall be construed
- -7-
as a waiver of Tenant's right to commence a separate action on a bona fide claim
against
Landlord.
13. BUILDING DIRECTORY AND SIGNAGE:
Tenant shall be provided one listing on the Directory in the lobby of the
building. The costs of
changing any such listings during the duration of this lease are to be borne by
the tenant.
Tenant shall be provided one listing on the floor Directory. Tenant shall be
provided a sign
publishing it's occupancy uniform to and similar in nature and size to those
signs used
throughout this building, on it's entrance door or in proximity to it's doorway.
14. TENANT'S CERTIFICATE: Tenant shall, without charge, at any time and from
time to
time, within ten (10) days after request by Landlord, certify by written
instrument to be
prepared by Landlord, duly executed, acknowledged and delivered to any
mortgagee, assignee, or any mortgagor or purchase, or any proposed mortgagee,
assignee of any
mortgagor or purchaser, or any other person, firm or corporation specified by
Landlord: a. that
this Lease is unmodified and in full force and effect (or, if there has been
modification, that the
same is in full force and affect as modified and stating the modification); b.
Whether or not to
Tenant's knowledge there are any existing claims against Landlord or any
defenses, which
would prohibit or prevent Landlord from enforcing the provisions of this Lease;
and c. the
dates, if any, to which the rental and other charges hereunder have been paid in
advance.
15. ASSIGNMENT AND SUBLETTING:
a. In the event that Tenant desires to assign this Lease or to sublet all or any
part of the
demised premises, Tenant shall, before proceeding to attempt to so assign or
sublet, notify
Landlord in writing, served with proof of delivery, of its desire and so offer
to vacate the space
which it desires to sublease (whether all or part of the demised premises) or
the entire
demised premises (in the case of an assignment) and to surrender the same to
Landlord. In
the event that Landlord does not, in writing served with proof of delivery,
accept the foregoing
offer of Tenant within 45 days after said writing is delivered to Landlord,
Tenant may proceed
to attempt to assign or sublet the demised premises in accordance with the
provisions that
follow hereinafter.
b. Tenant, for itself, its heirs, distributees executors, administrators, legal
representatives, successors and assigns, expressly covenants that it shall not
assign, or
mortgage or otherwise encumber, all or any part of its interest in this Lease,
sublet the
demised premises, in whole, or suffer or permit the demised premises or any part
thereof to
be used by other, without the prior written consent of Landlord in each
instance. if Tenant shall
desire to assign its interest in this Lease or to sublet aII of the Demised
Premises, Tenant
shall submit to Landlord a written request for Landlord's consent to such
assignment or
subletting which shall be accompanied by the following information: (i) the name
and address of the
proposed assignee or subtenant; (ii) if Tenant desires to sublet a portion of
the demised premises, a
description of the portion to be sublet together with a floor plan thereof,
(iii) the terms and
conditions of the proposed assignment or subletting; Bolivia the nature and
character of the
business of the proposed assignee or subtenant and its proposed use of the
Demised
Premises and (v) the current financial information and any other information
Landlord may
reasonably request with respect to the proposed assignee or subtenant. Landlord
shall not
unreasonably withhold its consent to the proposed assignment or subletting for
the use
permitted in this Lease provided that:
(1) The demised premises, shall not, without Landlord's prior consent, have been
listed or
otherwise publicly advertised for assignment or subletting at a rental rate
lower that the higher
of (a) the Fixed Annual Rent and all Additional Rent then payable or (b) the
then prevailing
rental rate for other space in the Building, the Tenant shall not enter into any
sublease at a
lower rental rate than the Fixed Annual Rent and all Additional Rent then
payable absent landlord's consent;
(2) Tenant shall not be in default hereunder.
(3) The proposed assignee or subtenant shall have a financial standing, be of a
character, be
engaged in a business, and propose to use the Demised Premises in a manner
consistent
with the permitted use(s) and in keeping with the standards of the Building and
shall be a
white-collar businessperson operating a fully legal business concern.
(4) The proposed assignee or subtenant shall not then be a tenant, subtenant or
assignee of
any space in the Building, nor shall the proposed assignee or subtenant to the
knowledge of
the tenant be a person or an entity with whom Landlord is then negotiating to
lease space in
the Building, or has negotiated within the prior six months. Such a prior
contact between the
landlord and the proposed assignee or subtenant shall constitute good cause for
the
landlord's objection to the assignment or sub tenancy and shall be considered by
the parties
to be a bar to such a sub tenancy or assignment.
(5) In the case of a subletting, the subtenant shall be expressly subject to all
obligations of
Tenant under this Lease and the further condition and restriction that such
sublease shall not
be assigned, encumbered or otherwise transferred or the Demised Premises further
sublet by
subtenant in whole or in part, or any part thereof suffered or permitted by the
subtenant to be
used or occupied by others, without the prior consent of the Landlord in each
instance.
(6) No subletting shall and later than on:, (1) day before the Expiration Date
of this Lease.
(7) At no time shall Tenant be permitted to sublet or assign any portion of the
premises more
than six times
(8) Tenant shall reimburse Landlord on demand for any costs, including
reasonable attorney's
fees and disbursements that may be incurred by Landlord in connection with
Tenant's request for
assignment or sublease.
c. Tenant shall deliver to Landlord a copy of each sublease or assignment made
hereunder within ten (10) days after the date of its execution. Tenant shall
remain fully liable
for the performance of all of the Tenant's obligations hereunder notwithstanding
any subletting
or assignment provided for herein and, without limiting the generality of all
acts and omissions
of any subtenant, assignee or anyone claiming by, through, or under any
subtenant or
assignee which shall be in violation of any of the obligations of this Lease,
and any such
violation shall be deemed to be a violation by the Tenant. Notwithstanding any
assignment
and assumption by the assignee of the obligations of the Tenant hereunder,
Tenant herein
named, and each immediate or remote successor in interest of Tenant herein
named, shall
remain jointly and severably (as a primary obligor) liable with assignees and
all subsequent
assignees for the performance of Tenant's obligations hereunder, and shall
remain
fully and
directly responsible and liable to Landlord for all acts and omissions on the
part of any
assignee subsequent to it in violation of any of the obligations of this Lease.
d. Notwithstanding anything to the contrary contained in this Lease, no
assignment of
Tenant's interest in this Lease shall be binding upon Landlord unless the
assignee, and, if the
assignee is a partnership, the individual partners thereof, shall execute and
deliver to Landlord
an agreement, in recordable form whereby such assignee agrees unconditionally to
sign a
limited guarantee in the form annexed hereto and to perform all the obligations
of Tenant
hereunder and further expressly agrees that notwithstanding such assignment the
provisions
of this Article shall continue to be binding upon such assignee with respect to
all future
assignments and transfers.
e. Any transfer by operation of law or otherwise of the interest of Tenant in
this Lease
(in whole or in part) or of a fifty (50%) percent or greater interest in Tenant
(whether stock,
partnership interest or otherwise) shall be deemed an assignment of this Lease
within the
meaning of this Article. (The issuance of shares of stock to other than the
existing shareholder
shall be deemed to be a transfer of such stock for the purposes of this
Article).
If there has
been a previous transfer of less than fifty (50%) percent interest in Tenant,
any other transfer
of an interest in Tenant which would then result in an aggregate transfer of
greater than fifty
(50%) percent interest in Tenant shall all be deemed an assignment of the
interest of Tenant
in this Lease within the meaning of this Article. Tenant warrants and represents
the present
shareholders of any outstanding shares of stock of the corporate Tenant is/are
the following:
DON L. ROSE.
f. In the event that Tenant fails to execute and deliver any assignment or
sublease to
which Landlord consented under the provisions of this Article within forty-five
(45) days after
the giving of such consent, then Tenant shall again comply with all of the
provisions of this Article
before assigning its interest in this Lease or subletting the Demised Premises.
g. The consent of Landlord to an assignment or a subletting shall not relieve
Tenant
from obtaining the express consent in writing of Landlord to any further
assignment or
subletting.
h. If Tenant's interest in this Lease be assigned, or if the Demised Premises or
any part
thereof be sublet or occupied by anyone other than Tenant, Landlord may collect
rent from the
assignee, subtenant or occupant and apply the net amount collected to the Fixed
Annual Rent
and all Additional Rent herein reserved, but no such assignment, subletting, or
occupancy or
collection shall be deemed a waiver of the provisions of this Article or of any
default hereunder
or the acceptance of the assignee, subtenant or occupant as Tenant, or a release
of Tenant
from further observance of performance by Tenant of all of the covenants,
conditions, terms
and provisions on the part of Tenant to be performed or observed.
i. If Tenant desires to assign all of the Demised Premises, Tenant agrees to
use
Landlord's exclusive agent for Such purposes, or Landlord's then managing agent
and Tenant
shall pay to such agent upon execution of such sublease, assignment, release or
other
disposition a commission computed in accordance with such exclusive agents
standard rates
and rules then in effect for the locality in which the Demised Promises are
located.
16. LATE CHARGES: Except as otherwise provided herein, In every case in which
Tenant is
required by the terms of this Lease to pay to Landlord a sum of money
(including,
without
limitation, payment of fixed or additional rent) and payment is not made within
five (5) days
after the same shall become due, Tenant shall pay as additional rent hereunder,
a $250.00
late fee on such sum per month from the date it becomes due until it is paid,
provided,
however, in no event shall such payment be in excess of the highest rate which
shall from
time to time be permitted under the laws of the State of New York to be charged
on late
payments of sums of money due pursuant to the terms of a lease.
17. HOLD-OVER: If Tenant holds over in possession after the expiration or
sooner termination of the original term or any extended term of this Lease,
such holding over shall not
be deemed to extend the term or renew the Lease, but such holding over
thereafter shall
continue upon the covenants and conditions herein set forth except that the
charge for use
and occupancy of such holding over for each calendar month or part thereof (even
if such part
shall be a small fraction or a calendar month) shall be the sum of:
a. 1/12 of the highest annual rent set forth in this Lease, times three (3),
plus
b. 1/12 of the net increase, if any, in annual fixed rental due solely to
increases in the
cost of the value of electric and fuel service furnished to the premises in
effect on the last day
of the term of the Lease, plus
c. 1/12 of all other items of annual additional rental, which annual additional
rental
would have been payable pursuant to this Lease had this Lease not expired, plus
d. Those other items of additional rent (not annual additional rent) which would
have
been payable monthly pursuant to this Lease, had this Lease not expired, which
total sum
Tenant agrees to pay to Landlord promptly upon demand, in full, without set-off
or deduction.
Neither the billing nor the collection of use and occupancy in the above amount
shall be
deemed a waiver of any right of Landlord to collect damages for Tenant's failure
ire to vacate
the Demised Premises after the expiration or sooner termination of this Lease.
The aforesaid
provisions of this Article shall survive the expiration or sooner termination of
this Lease.
e. Tenant agrees that it shall indemnify and save Landlord harmless against all
costs,
claims, loss or ability (including reasonable legal fees) resulting from the
delay by Tenant in
surrendering the Demised Premises upon the expiration or earlier termination of
this Lease,
including, without limitation, any claims made by any succeeding tenant founded
on such
delay.
f. It is further agreed that the terms herein are not a penalty, but they have
been agreed
to by the parties as a reasonable estimation of the damages that would have been
incurred by
Landlord, since the amount of actual damages would be extremely difficult to
ascertain,
should Tenant holdover in possession of the Demised Premises after the
termination of this
Lease.
18. DEFAULT: Any default by Tenant under any other lease held by tenant in the
Building, if
any, shall be deemed a default of the same nature of this Lease,
19. BROKER. Tenant represents and warrants that it has dealt with no broker
except GVA
Williams Real Estate Co., Inc. in connection with the execution of this Lease or
the showing of
the Demised Premises and agrees to hold and save Landlord harmless from and
against any
and all liabilities from any claims of any broker (including, without
limitation, the cost of
counsel fees in connection with the defense of any such claims), other than GVA
Williams
Real Estate Co., Inc.
20. ALTERATIONS: Tenant understands and agrees that NO structural alterations
or
changes in or to the demised premises may be made without the prior written
consent of the
Landlord, and upon the further conditions then imposed by Landlord in the event
Landlord
grants it consent to such alterations.
21. GOVERNMENT REGULATION: In the event that the Landlord herein is directed by
any
City, State or Federal agency to comply with Local Law Legislation (which
includes Local Law
5, elevator inspection, land Local Law 10 or 11, facade inspection, but not
limited thereto), the
tenant herein agrees to pay, .53% (Tenant's proportionate share) of Landlord's
cost to comply
with said directives. These costs shall be deemed to be additional rent and will
be due and
payable on the first day of the month succeeding the completion of the work, and
will be paid
together with the rent. The Landlord reserves the right to collect said
additional rent in
accordance with the provisions of this Lease.
22. SOUARE FOOT ESTIMATE: Any square footage and/or percentage set forth herein
are
approximate only and Landlord and Tenant hereby agree that any such figures
and/or
percentages have been fairly determined and agreed to be Tenant solely for the
purpose of
computing Tenant's contribution for escalation charges.
23. LANDLORD'S APPROVAL: If Tenant shall request Landlord's approval or consent
and
Landlord shall fail or refuse to give such approval or consent, Tenant shall not
be entitled to
any damages for any withholding or delay of such approval or consent by
Landlord,
it being
intended that Tenant's sole remedy shall be an action for injunction or specific
performance
(the rights to money damages or other remedies being hereby specifically
waived), and that
such remedy shall be available only in those cases where Landlord shall have
expressly
agreed in writing not to unreasonably withhold its consent or approval or where
as a matter of
law Landlord may not unreasonably withhold its consent or approval.
24. ADDITIONAL RENT: Notwithstanding any thing to the contrary in this Lease,
any moneys
due Landlord other than the annual rents are deemed to be additional rent, and
any default in
the payment of additional rent shall give to Landlord the same remedies as it
has with respect to any default in the payment of rent.
25. LANDLORD'S WORK: Other than Landlord's Work stated herein, Tenant agrees to
rent
the Demised Premises in "as is" condition. Landlord will perform work, if any,
as set forth in a
Work Letter annexed hereto, if any.
26. PREPAID CONSTRUCTION FUNDS: Tenant has prepaid $8977.50 towards three
months of base rent to defray Landlord's construction costs for the demised
premises, Such
monies shall be applied to Tenant's rent obligations in the tenth eleventh, and
twelfth months
of the Lease Term. In all of these three months, Tenant is responsible all
additional rents
specified herein.
27. SECURITY DEPOSIT: At all times prior to the expiration of the term of this
lease tenant
shall maintain on deposit with landlord $25,515.00, the sum equal to six (6)
months of average
base rent as security for due and faithful payment, as herein provided, of the
rent, additional
rent, charges and damages payable by tenant under this lease or pursuant to law
and for the
clue and faithful keeping, observance, and performance of all the other
covenants,
agreements, terms, provisions and conditions of this lease on the part of tenant
to be kept,
observed and performed. If at any time Tenant shall be in default in the payment
of any such
moneys or in the keeping, observance and performance of any such other covenant,
agreement, term, provision or condition, Landlord may at its election apply
security so on
deposit with Landlord to the payment of any such moneys or to the payment of the
costs
incurred by Landlord in curing such default, as the case may be. If as the
result of any such
application of all or any part of such security, the amount of cash so on
deposit
with landlord
shall be less than the required stated amounts, tenant's shall immediately
deposit with
landlord cash in an amount equal to the deficiency. Tenant's failure to make
such
additional
deposit as may be required shall be deemed a material default under this Lease.
At the conclusion of the twenty-fourth month of the Lease Term, provided that
Tenant is not
then and has not been in default hereunder beyond any applicable cure period,
Landlord shall
return to Tenant $8190.00 of the security amount. It Tenant has been in default
prior to the
conclusion of the twenty-fourth month of the Lease Term beyond any applicable
cure period or
is in default beyond any applicable cure period at that time, Landlord shall
retain the complete
security amount.
At the conclusion of the thirty-sixth month of the Lease Term, provided that
Tenant is not in
default hereunder beyond any applicable cure period and has not been in default
prior to that
date beyond any applicable cure period, Landlord shall return to Tenant $8505.00
of the
security amount. If Tenant has been in default prior to the conclusion of the
thirty-sixth month
of the Lease Term beyond any applicable cure period or is in default at that
time, Landlord
shall retain the complete security amount.
28. RENT: Tenant shall pay at an annual rental rate of
10/1/99-12/31100 $00,000.00 in 3 equal monthly payments of $0000.00
1/l/00-9/30/01 $26,932.50 in 9 equal monthly payments of $2992.50
10/01/01-9/30 /02 $49,140.00 In 12 equal Monthly payments of $4095.00
10/1/02-9/30/03 $51,030.00 in 12 equal monthly payments of $4252.50
10/l/03-9/30/04 $52,920.00 in 12 equal monthly payments of $4410.00
10/l/04-9/30/05 $54,810,00 in 12 equal monthly payments of $4567.50
10/l/05-9/30/06 $56,700.00 in 12 equal monthly payments of $4725.00
10/l/06-12/31/07 $70,875.00 in 15 equal monthly payments of $4725.00
29. LEASE NOT BINDING UNLESS EXECUTED: It is specifically understood and agreed
that
this Lease is offered to Tenant for signature and is subject to Landlord's
acceptance and
approval of same and that Tenant has hereunto affixed its signature with the
understanding
that said Lease shall not in any way bind Landlord or its Agent until such time
as Landlord has approved said Lease and same is executed by Landlord and
delivered to the Tenant.
30. HOURS OF BUILDING: Landlord covenants and Tenant agrees that Landlord will
use its
best efforts to provide twenty-four (24) hour access to the Demised Premises,
however,
nothing contained herein shall be construed as requiring Landlord to provide
services, such as
heat, freight elevator service, etc., in anything other than business hours as
stated elsewhere
in this Lease, except that a passenger elevator shall be on standby use for all
hours, barring
breakdown or emergency.
31. PRIOR LEASES AND AGREEMENTS All other prior leases, including amendments
and
modifications thereto, and other agreements between Landlord and Tenant herein
are hereby
deemed terminated and without any force and effect whatsoever.
32. LANDLORD'S CONSENT. Whenever Landlord's consent is required under this
Lease, such consent shall not be unreasonably withheld.
33. FREE RENT: Tenant shall be entitled to occupy the demised premises free of
the charge
for base rent in the first three months of the Lease Period. In all of these
three months, Tenant
remains responsible for all additional rents provided herein then due to
Landlord.
A.M. PROPERTY HOLDING BOOKDIGITAL.COM, INC.
CORPORATION, agent for
65 BROADWAY Co., LLC
By DON L. ROSE,
Vice-President C.E.O
A.M. Property Holding Corp.
BUILDING WORK LETTER
RIDER OF THE LEASE DATED THE DAY OF JULY OF 1999, BETWEEN
A.M. PROPERTY HOLDING CORPORATION AS AN AGENT FOR 65
BROADWAY CO., LLC, AS LANDLORD AND BOOKDIGITAL.COM, INC.,
AS TENANT.
A. Within ten (10) days after the execution of this Lease, Tenant shall provide
to Landlord an
architectural drawing and an electrical plan for the Demised Premises.
Landlord's work shall be based
upon the standard used In the building and, to the extent practicable, shall be
in accord with Tenant's
architectural drawing and electrical plan and specifications which have been
developed In consultation
with Tenant. Landlord shall have the right to reasonably modify such drawing,
plan and specification as
it, in its sole discretion, determines.
B. Provided that Tenant timely provides to Landlord its architectural drawing
and an electrical plan for
the Demised Premises as provided herein Landlord hereby agrees to use its best
effort to have the required
construction at the Demised Promises substantially completed within sixty (60)
days after the execution of
this Lease, such that the premises are available for occupancy by Tenant within
sixty (60) days after the
execution of this Lease. In the event that Tenant provides said architectural
drawing and electrical plan
for the Demised Premises to Landlord more than ten (10) days after the execution
of this Lease, Landlord
hereby agrees to use Its best effort to have the required construction' at the
Demised Promises substantially
complete: within sixty (60) days after Tenant shall provides said architectural
drawing and electrical plan
for the Demised Premises to Landlord, such that the promises are available for
occupancy by Tenant
within
sixty (60) days after Tenant provides said architectural drawing and electrical
plan for the Demised
Premises to Landlord .
A.M. PROPERTY HOLDING BOOKDIGITAL.COM INC.
CORPORATION, agent for
65 BROADWAY Co., LLC
By: Paul Wasserman, By: DON L. ROSE,
Vice-President C.E.O.
A.M. Property Holding Corp.
FORM OF LIMTED GUARANTEE
RIDER OF THE LEASE DATED THE 8th DAY OF JULY OF 1999, BETWEEN A.M. PROPERTY
HOLDING CORPORATION AS AN AGENT FOR 65 BROADWAY CO., LLC, AS LANDLORD
AND BOOKDIGITAL.COM, INC., AS TENANT
In order to induce Landlord to enter into the foregoing lease and for other
valuable considerations, the
receipt whereof is hereby acknowledged, the undersigned ("Guarantor") hereby
makes the following
guarantee and agreement with and in favor of Landlord and its respective legal
representatives and
assigns.
A. The undersigned guarantees to Landlord, its successors and assigns, that
First Madison Securities and
its successors and assigns, shall pay to Landlord all rent and additional rent
that has accrued or may
accrue (other than by acceleration, as described in the Lease) under the terms
of the Lease herein
(hereinafter referred to as Accrued Rent), to the latest date that Tenant
and its assigns and subleases, if
any, shall have completely performed all of the following:
1. Vacated and surrendered the Demised Premises to Landlord and delivered the
keys to same to
Landlord, and 2. Paid to Landlord all Accrued Rent to and including the date
which is the later of (a) the
actual receipt by Landlord of said Accrued Rent (b) the surrender of the
premises or (c) receipt by
Landlord of the keys to the Premises.
B. It is agreed that any security deposited under this lease shall not be
computed as a deduction from any
amount payable by Tenant or Guarantor under the terms of this Guarantee or the
Lease.
C. This guarantee is absolute and unconditional and is a guarantee of payment
and not of collection. The
parties hereto waive all notice of nonpayment, non-performance, nonobservance or
proof, or notice, or
demand, whereby to charge the undersigned therefore, all of which the
undersigned expressly waives and
expressly agrees that the validity of this Agreement, and the obligation of the
Guarantor hereto shall in no
way be terminated, affected or impaired by reason of the assertion by Landlord
against Tenant of any
rights or remedies reserved to Landlord pursuant to the performance of the
within Lease. The undersigned
further covenants and agrees that this guarantee shall remain and continue in
full force and effect, as to
any renewal, modification or extension of this Lease and during any period when
Tenant is occupying the
Premises as a "statutory tenant," or otherwise, As a further inducement to
Landlord to make this Lease
and in consideration thereof, Landlord and the undersigned covenant and agree
that any action or
proceeding brought by either 1, Landlord or the undersigned against the other on
any matters whatsoever
arising out of, under or by virtue of the terms of this Lease or of this
guarantee that Landlord and the
undersigned shall and do hereby waive trial by jury.
D. This guarantee shall be construed in accordance with the Laws of the State of
New York.
E. If Tenant becomes Insolvent or shall be adjudicated a bankrupt or shall file
for reorganization or
similar relief or if such petition is filed by creditors of Tenant, under any
present or future law or if the
lease is terminated or Tenant's obligations otherwise discharged in any
bankruptcy proceeding or
otherwise, Guarantor's obligations hereunder may nevertheless be enforced
against the Guarantor,
F. This guarantee shall be construed in accordance with the Laws of the State of
Now York,
IN WITNESS WHEREOF, the undersigned have set their hand the date and year last
above written.
First Madison Securities, Inc.
By: Ray Vahab, President, First Madison Securities, Inc.
On the 8th of JULY, 1999, before me personally came RAY VAHAB to me known and
known to me to be
the individual described herein and who executed the foregoing instrument and
acknowledged to me that
he executed the same.
Notary Public
STEVEN Y SCHMIER
Notary Public, State of New York
Qualified In Nassau County
Registration No. O1SC5076904
Commission Expires 04-28-01
Dear Zahra Yamani,
Congratulations on your recent acceptance as an American Greetings Affiliate!
Getting started is easy! All you need to do is visit: http://www.reporting.net.
This site will provide
everything you need to set up the affiliate links on Bookdigital.com. You will
be able to generate reports,
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potential as an American Greetings affiliate!
We have exciting ideas for the coming months new graphics to keep your links
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things that are going on at http://www.americangreetings.com!
If you have any questions or comments, please contact us at
[email protected].
Best regards,
Affiliate Support
American Greetings Interactive Affiliate Network
<PAGE>
Zahra Yamani
Bookdigital.com
Congratulations! Your membership application to the LendingTree Branch Network
has been approved.
Our affiliate program has experienced some exciting developments. Check out our
new content rich
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Follow these simple steps to get started. (You may want to print out this page
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3) Click on the LendingTree logo under "Your Merchant Partners". This will take
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exclusively for our LendingTree
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site, generate reports, and
maximize your revenues.
4) Click on "Creating Links" on the navigation bar to your left.
5) Choose your web site and click OK.
6) Click on "Affiliate Loan Center".
7) Under the Affiliate Loan Center heading you will see two link types:
* Co-Branded Link
* Mortgage & Home Equity Co-Branded Link
8) Select a link type and click "Make My Code".
9) Cut and paste the HTML onto your page. (Make Sure you cut and paste the code
in its entirety and that
it remains unchanged from the way it appears in Reporting.net.)
Return to the reporting.net site regularly to update your Affiliate Loan
Center. We're always making
changes adding new features and promotions. To update your Affiliate Loan
Center, you must replace
your old code with the new html in reporting.net.
**Please note that some HTML editors (such as FrontPage) may make minor changes
to your code that
may disable your tracking. If you are using an HTML editor, compare the code on
your page to the way it
appears on Reporting.net. You may need to make minor changes. In most cases,
taking out the "amp" in
your code will solve the problem.
Please contact us at [email protected] if you have any questions about
setting up.
Sincerely,
The LendingTree Affiliate Team
IMPORTANT NOTICE: We may revoke your participation in the LendingTree Branch
Network if we
determine (in our sole discretion) that your site is unsuitable for the
LendingTree Branch Network for any
reason, including, but not limited to, inclusion of content that is in any way
unlawful , harmful, threatening,
defamatory, obscene, harassing, or racially, ethnically, or otherwise
objectionable.
<PAGE>
Dear Don Rose:
Congratulations! Omaha Steaks has approved you into their Affiliate Program!
To begin participating in the program immediately, simply place one or more of
the links below into your Web site.
For a full selection of banners and other linking types, please follow the
directions below:
1. Click here (http://www.linkshare.com) to log on to your account with your
User name and Password. 2. Click on Create Links on your
main control panel. 3. Click on Omaha Steaks. 4. Select from the link types
available to you from Omaha Steaks in the left frame tool
bar. 5. Copy and paste the appropriate code into your Web site.
Getting the most out of your partnership with Omaha Steaks depends on how much
you de\tote to building your relationship. Affiliate
programs enable you to earn commissions on a performance basis, and to associate
yourself with well-established online merchants.
Affiliate programs also offer you the ability to increase the \value that you
provide to your community, by giving them access to
relevant content and marketing information.
If you are interested in learning new ways for you to get the most out of your
affiliate programs, please feel free to visit our Resource
Center by clicking here. (http://www.linkshare.com/helpcenter/resource.htm1)
If you encounter any problems, or have any questions or concerns, please feel
free to visit our Help section by clicking here
(http://www.linkshare.com/helpcenter/helpframe.htm1) or contact LinkShare at
contact@linkcorp. net. Thank you for your participation
in The LinkShare Network(tm), and we look forward to a rewarding partnership
with you!
Best regards,
The LinkShare Team
<PAGE>
Dear Don Rose:
Congratulations! 1-800-FLOWERS has approved you into their Affiliate Program!
To begin participating in the program immediately, simply place one or more of
the links below into your Web site.
For a full selection of banners and other linking types, please follow the
directions below:
1. Click here (http://www.linkshare.com) to log on to your account with your
User name and Password. 2. Click on Create Links on your
main control panel. 3. Click on 1-800-FLOWERS. 4. Select from the link types
available to you from 1-800-FLOWERS in the left frame
tool bar. 5. Copy and paste the appropriate code into your Web site.
Getting the most out of your partnership with 1-800-FLOWERS depends on how much
you devote to building your relationship, Affiliate
programs enable you to earn commissions on a performance basis, and to associate
yourself with well -established online merchants.
Affiliate programs also offer you the ability to increase the value that you
provide to your community, by giving them access to relevant
content and marketing information.
If you are interested in learning new ways for you to get the most out of your
affiliate programs, please feel free to visit our Resource
Center by clicking here. (http:/www. Link share. com/helpcenter/resource. htm1)
If you encounter any problems, or have any questions or concerns, please feel
free to visit our Help section by clicking here
(http-://www.linkshare.com/helpcenter/helpframe.html) or contact LinkShare at
contact@linkcorp. net. Thank you for your participation
in The LinkShare Network(tm), and we look forward to a rewarding partnership
with you!
Best regards,
The LinkShare Team
<PAGE> Dear New Affiliate,
On behalf of everyone at Mothernature.com, it is our pleasure to welcome you to
the Mothernature.com Network. As an affiliate of the
world's leading Internet retailer of natural health products, you will enjoy the
benefits of offering your customers the broadest selection,
deepest content and most competitive prices on the Web.
You will be receiving a special commission of 20% of sales for every sale
generated by a direct link from your site to cum until July 31,
1999. Commission on sales beginning August 1, 1999 will be 12%.
You can start setting up your co-branded store TODAY! by visiting our extranet
at http://www.reporting.net
To start selling right away, simply follow the directions on the site and
download a link. Embedded in the link is technology that will
enable us to track your sales.
On the same site, you can also review sales reports as well as "Getting
Started", an introduction designed expressly for new Affiliates.
If you should require any assistance or have any questions, please email us at
[email protected], and we will have one of
our customer service representatives get in touch with you.
Sincerely, The Mothernature.com Network Team
<PAGE>
Dear Zahra Yamani:
Congratulations! On behalf of everyone at Fogdog Sports, it is our pleasure to
welcome Bookdigital.com to the Fogdog Sports Affiliate
Program. We are very happy to have you join us. As an affiliate of the Ultimate
Sports Store, you will enjoy the benefits of partnering
with a recognized leader in electronic commerce in this exciting and innovative
program.
Please read on for important information about the program, including
commissions, discounts, links and reporting.
THANK YOU! GET YOUR AFFILIATE DISCOUNT
you for joining the Fogdog Sports Affiliates Program. You will be receiving
commissions of up to 20% of all sales that come from
visitors you refer to Fogdog Sports. This includes you, too! If you click
through your link to Fogdog Sports and buy sporting goods for
yourself, you will pocket the commissions. It is our way of saying thanks for
being an affiliate!
Keep an eye out for new ideas on how to maximize sales from your site in our
affiliates email newsletter.
GETTING STARTED BUILDING LINKS AND VIEWING SALES REPORTS
Setting up links with our Affiliates Program can take as little as five minutes.
You will find a whole variety of links by visiting our
extranet at http://fogdog.reporting.net.
You'll want to begin by reviewing "Getting Started", an introduction designed
expressly for new affiliates. On fbgdog. reporting. net, you
can use our automatic Link Generator to create links to our site plus access
your sales reports online.
Once you've integrated the Fogdog Sports product information and banners into
your site and linked to Fogdog Sports, you'll be on
your way to earning commissions on every purchase made by visitors you refer.
QUICK START - COOL FOG DOG BUTTON
Here is a highly effective button you can use on your site right now! Just copy
and paste the following HTML code into your web page,
and you are ready to rock. Please DO NOT modify the HTML code. If you modify the
code, we will not be able to track sales from your
site! The only modification you will need to make is to remove spaces or line
breaks from links that have been wrapped by your email
program. All links in double quotes should not have any line breaks or spaces.
If you have any questions about the code or think you
need to make modifications to it, please email [email protected] and we'll
help you out.
Here is the HTML code for your page.
You can also get this code from the "Creating Links" section of fogdog.
reporting.net.
TELL ALL YOUR FRIENDS
You can now put your affiliates link into all your emails! It's really easy to
do. Just copy and paste the following text and link into your
email signature, then all your emails become money-makers~
PS. Buy all your sporting goods at Fogdog Sports, the Ultimate Sports Store.
Note: Please do not post this link in news groups; communication of this link is
strictly limited to your personal emails and opt-in email
lists you maintain. Any other communication of this link must be approved by
Fogdog Sports. For all notes to mailing lists you maintain,
please email the copy to [email protected] for approval before sending the
note. We disapprove of spamming, and take vigorous
action to prosecute spammers who use this link in their emails.
WE ARE HERE TO HELP
If you have questions about how to form links or about any other details
regarding the Affiliates Program, we recommend that you look
over the FAQ and other helpful information found on the Fogdog Sports Affiliates
site. The URL for going directly to the Affiliates
Program pages is:
http://www.fogdog.com/affiliates
It's a good idea to visit and bookmark this page for future reference. If you
can't find the answer to your questions here, please send
e-mail to [email protected] with your questions. We would be glad to help
you.
Thanks again for joining us to bring this great service to your visitors. We
look forward to building a lasting, creative, and profitable
relationship. Congratulations and good luck!
Sincerely,
Michael Feldman
Director, Fogdog Sports Affiliate Program
[email protected]
PS. Buy products for yourself through your link and keep the commissions as your
discount!
<PAGE>
Dear Zahra Yamani,
Congratulations on your recent acceptance as an American Greetings Affiliate!
Getting started is easy! All you need to do is visit: http://www.reporting.net.
This site will provide everything you need to
set up the affiliate links on Bookdigital.com. You will be able to generate
reports, obtain answers to frequently asked
questions, and maximize your earning potential as an American Greetings
affiliate!
We have exciting ideas for the coming months new graphics to keep your links
interesting, some fun and different
holidays to celebrate, and a semimonthly newsletter that will keep you informed
about the new things that are going on at
http://www.americangreetings.com!
If you have any questions or comments, please contact us at
[email protected].
Best regards,
Affiliate Support
American Greetings Interactive Affiliate Network
<PAGE>
Dear Zahra Yamani:
Congratulations! Value America would like to welcome you and Bookdigital.com,
as the newest member of our Preferred
Partner Team. The good news, is that you can earn quick CASH by activating your
links to Value America now. For
example, sell one $2500 computer and you can easily earn a $75 commission check.
Value America is dedicated to ensuing that our Preferred Partners have the
necessary tools to be successful. We
provide the following types of links to help you sell products earn easy CASH!
Affiliate Links Value America homemade links, department links, category links
and products links. We make it simple
for you, right down to the ability to select product HOT BUYS with pricing
options!
Banner Links Categorized your site with Value America, select a banner size and
we will PUSH you the latest and
greatest products from our site! Value America will manage the product
selection and dynamic updating of the banner
links for you. (Don't be surprised the first time when the banner is blank,
simply refresh and the banners will begin to
arrive COOL!)
Current categories for Banner Links are: Computers, Accessories, Office
Products, Home Electronics and General
Merchandise.
If you have any questions, our dedicated support team is here to help you by
phone or e-mail.
We also welcome you comments and suggestions. Value America is committed to
help you make MONEY!
Best Wishes,
Value America Preferred Partner Team
Value America, Inc.
To get started, visit http://www.reporting.net.
This site will provide everything you need to prepare your site, generate
reports and maximize your revenues. Please
not that you user name and password are case-sensitive.
You'll want to begin by reviewing Getting Started, and introduction designed
expressly for new Preferred Partners. On that same site, you can use our
automatic Link Generator to create links to our site that we will track. You
may also use this site to access you sales reports.
IMPORTANT NOTICE:
By our approval and acceptance of you application, you and Value America, Inc.
are now parties of the Value America,
Inc. Preferred Partner Agreement (the Agreements) to which you agreed to be
bound when you submitted your
application. We are very pleased to have you as a Preferred Partner.
We may terminate the Agreement and you participation as a Value America
Preferred Partner at any time, with or without
cause, as provided in the Agreement. In addition, as provided in the Agreement,
we may terminate the Agreement and
your participation as a Value America Preferred Partner at any time if we
determine (in our sole discretion) that you site
is unsuitable as a Preferred Partner for any reason, but not limited to,
inclusion of content that is in any way unlawful,
harmful, threatening, defamatory, obscene, harassing, or racially, ethnically,
or otherwise objectionable.
<PAGE>
Dear Zahra,
Congratulations!
Your site, Bookdigital.com, has been approved for the priceline.com Affiliate
Network.*
You can start setting up your links to priceline.com today by visiting our site
at http://www.reporting.net. You'll need to login, so make
sure you have the user name and password you selected in your application. Click
on the priceline logo to access the priceline.com
Affiliate Network homemade. Then click the "create links" button to get started.
Remember, you'll get your $10 sign up bonus deposited into your account once you
begin sending us qualified offers.
Here is a text link for you to use immediately.
The setup process is a fairly easy one, but if you have ANY questions, please
feel free to email us at affiliate@priceline. com. Welcome aboard! We are
excited to have Bookdigital.com as part of the priceline.com Affiliate
Network! Please note that we regularly review all sites. In the event that a
site does not comply with the priceline.com Affiliate Agreement standards, were
serve the right to cancel your membership in the
priceline.com Affiliate Network at any time.
<PAGE>
Dear Zahra,
Thank you for your application to the barnesandnoble.com Affiliate Network.
Your site has been approved*.
You can start setting up your links to barnesandnoble.com today by visiting
our extranet at http://www.affiliate.net.
You'll need the user name and password you selected in your application to use
our automatic HTML Tag Generator and to access
your sales reports.
You'll want to begin by reviewing the "Getting Started" area at
http://www.affiliate.net/affnet/start.asp, an introduction designed
expressly for new Affiliates.
Here are some quick links for you to use immediately.
Link to our Home Page:
http://bn.bfast.com/booklink/click?sourceid=1217818&categoryid=homemade
Bestsellers Page:
http://bn.bfast.com/booklink/click?sourceid=1217818&categoryid=ToplOO
Bargain Books
http://bn.bfast.com/booklink/click?sourceid=1217818&categoryid=bargains
Software Store:
http://bn.bfast.com/booklink/click?sourceid=1217818&categoryid=swhomepage
Gift Center: htt p://bn. Vast. com/bookli n k/c lick?s ourceid= 121781
8&category id= gifts
For other easy links, go to our Auto-bookstore
http://affiliates.bfast.com/affiliates/barnesandnoble/linktoautobook to get a
whole
bookstore at once, or our Auto-merchandiser
http://www.affiliates.neVaffnet/automerch - infb.asp to get dynamic banners on
your site.
For all other links visit the Make Links area of http://www.affiliate.net
where you can create book links, keyword links and over 100
other links of your choice. You can check your sales reports anytime online at
http://affi~iates.bfast.com/affiliates/barnesandnoble/reports
Should you have any questions, before you send us an email, questions section)
at http://affiliate.net/affnet/faq.asp
If you need further assistance, please contact us at http://www. affiliate.
net/aftnet/s upport. asp
We are excited to have Bookdigital.com as part of the Affiliate Network and
look forward to building a lasting, creative, and profitable
relationship. As an Affiliate of the world's largest bookseller online, you
will enjoy the benefits of partnering with a recognized leader in
electronic commerce.
Sincerely,
The barnesandnoble.com Affiliate Network Team
*Please note that we review all sites and in the event that a site does not
comply with the Operating Agreement standards, we reserve
the right to cancel the site's membership in the Affiliate Network at any
time.
<PAGE>
Dear Zahra,
Thank you for you application to the GoTo.com Affiliate Network. Your
application has been approved. Welcome to the
fastest growing and best performing Affiliate Network on the Web!
Please understand that we will adhere to the Terms and Conditions you agreed
to in the online applications.
You can create the HTML for you GoTo.com search box by visiting our extranet
at http://www.reporting.net. Bookmark this url because this is also where you
can view your traffic and revenue reports as well as change your account
information. You'll need the user name and password you selected in your
application.
You'll want to begin by reviewing the Getting Started area at
http://www.reporting.net, an introduction designed
expressly for new Affiliates.
Should you have any questions, before you send us an email, please take the
time to review our online FAQ (frequently
asked questions section).
If you need assistance, please email affiliate [email protected]
Here are some tips for how you can benefit the most from the GoTo.com
Affiliate Program (i.e., make you more money!):
*** Place the GoTo.com Search Box on the highest traffic pages of your site,
or even create a special search area within
your site.
*** Promote GoTo.com using the same verbiage that has made us the 24th most
visited site on the Web (according to
Relevant Knowledge)- Search Made Simple
*** Tell your users now that GoTo.com is the fastest, easiest way to find the
most relevant web sites on any topic.
We are please to have you as part of the Affiliate Network and look forward to
building a lasting and profitable
relationship. As an Affiliate of GoTo.com, we hope you will enjoy the
offering a great search service while earning
revenue with your site!
Sincerely,
The GoTo.com Affiliate Network Team
- -Please note that we will review all sites and in the event that a site does
not comply with the Terms and Conditions, we
reserve the right to cancel the site membership in the Affiliate Network
<PAGE>
Dear Don Rose:
Congratulations! The Sharper Image has approved you into their Affiliate
Program!
To begin participating in the program immediately, simply place one or more of
the links below into your Web site.
For a full selection of banners and other linking types, please follow the
directions below.
1. Click here (http: //www. I inks hare. com) to log on to your account with
your User name and Password. 2. Click on Create Links on
your main control panel. 3. Click on The Sharper Image. 4. Select from the
link types available to you from The Sharper Image in the
left frame tool bar. 5. Copy and paste the appropriate code into your Web
site.
Getting the most out of your partnership with The Sharper Image depends on how
much you devote to building your relationship,
Affiliate programs enable you to earn commissions on a performance basis, and
to associate yourself with well -established online
merchants. Affiliate programs also offer you the ability to increase the value
that you provide to your community, by giving them access
to relevant content and marketing information.
If you are interested in learning new ways for you to get the most out of your
affiliate programs, please feel free to visit our Resource
Center by clicking here.
If you encounter any problems, or have any questions or concerns, please feel
free to visit our Help section by clicking here or contact LinkShare at
[email protected]. Thank you for your participation in
The LinkShare Network(tm), and we look forward to a rewarding partnership with
you!
Best regards,
The LinkShare Team
<PAGE>
Dear Zahra,
Thank for applying to participate in Staples Affiliate Program.
Your site, located at http://www.bookdigital.com, has been approved.
Congratulations!
Start setting up links to staples.com today by clicking on the
http://www.reporting .net. You will have a choice of images
to choose for your site. Enter the user name and password you selected in
your application to use our automatic HTML
Tag Generator and to access your sales reports.
If you need assistance, please email mail to: [email protected]
As a Staples.com Affiliate, you are enhancing the user experience on your site
by making over 6,000 office products
available at everyday low prices. We are happy to include you as one of our
valued Affiliates. We hope to make the
relationship between Staples.com and Bookdigital.com a long and profitable
one.
Sincerely,
Jeff Levitan
Senior Vice President, Staples.com
<PAGE>
Thank you for applying to the Amazon.com Associates Program. Your application
has been tentatively approved. We will contact you
by email after we have visited your Web site and given your application final
approval.
IMPORTANT: SAVE THIS EMAIL. It contains your unique Associates ID and
instructions for creating links from your site to
Amazon.com. You will need your Associates ID when creating links to
Amazon.com.
Your unique Associates ID is: bookdigitalcom
GET STARTED NOW-ITS EASY We suggest that you cut and paste the HTML examples
from this e-mail into your own HTML
document. If the e-mail program you are using presents the following HTML
examples in a difficult-to-read format, then please visit
our Linking Methods page to see how to set up your links to Amazon.com. The
Linking Methods page contains linking instructions as
well as examples of how the links will look on your site:
http://www.amazon.com/assoc-linking
There are three basic ways to link to Amazon.com: 1. Link to our home page. 2.
Link to individual products you recommend. 3. Link to
us with an Amazon. com Search Box.
You may use graphics and Amazon. com-authored reviews for the books, music CDs
and videos you recommend on your site. You
may also use up to 100 cover art images. Add or remove links to Amazon.com at
any time without our prior approval. As long as your
links follow the prescribed linking format, our software will automatically
track visitors who use your Associates links to enter
Amazon.com. You can get started immediately by linking to our home page or
placing an Amazon. com Search Box on your site. We'll
start tracking the click-throughs and orders generated by these links after we
have reviewed and appro\ed your application. You'll
receive a separate email as soon as we have completed our review, letting you
know if your site has been approved.
1. Home Page Link
This is the quickest, easiest and most popular way to get started, Simply
choose an Amazon. com Associates logo or button from our
Graphics and Logos Library at http://www.amazon.com/assoc-art
The logo you choose, used in conjunction with the Amazon.com Home Page link,
will allow you to earn 5% of sales for all qualifying
items purchased as a direct result of your link. Please note that
the home.gif is an example of one of the graphics you can save to your
computer's hard drive to use in conjunction with the home page
link. You can use any graphic you'd like, just be sure to use the name of the
graphic you choose to replace home.gif in your HTML
shown below.
2. Individual Product Link
This is where you can employ your expertise on the subject or genre of your
choice. You can also earn up to 15% in referral fees for
books and 5% for CDs and videos or the sale of any other products generated
through your Associates links! Featuring specific books
and other items with personal recommendations is a great way to encourage your
visitors to make a purchase. Your personal
recommendations also add value to your site, especially if the items you
review and recommend dovetail with your site's content. Your
customers will appreciate objective, third-party opinions that only you can
provide.
"ASIN" stands for "Amazon Standard Item Number." Every item in our store has a
unique ASIN. For books, the ASIN matches the ISBN. For example, here is a book
that we',ve chosen to put in your individual Product Linking Format called The
Greatest
Generation. You'll note that the number listed at the end of the URL is the
ASIN for this particular book. If you take the ASIN number from ANY item you
choose to feature, you can place it in your link shown below as we have done
with The Greatest Generation. You can repeat this link with as many different
ASIN numbers as you want.
Order The Greatest Generation Today!
You may change your individual product links at any time without our
permission. They'll be automatically detected and tracked
correctly. Please note, however, that the ASIN number is different for each
item and will need to be changed accordingly. Do not
include spaces or dashes in the ASIN number when creating your individual
product links.
VERY IMPORTANT. If you copy the URL of a page from our Web site
and modify it to fit the linking formatted above, then be sure to remove the
17-digit shopping session ID that appears at the end of the URL. Your unique
Associates ID should immediately follow the ASIN number as in the example
above. If you leave the 17-digit
shopping session ID in your modified links, then they will not track sales
properly.
3. Search Box Link
Visitors to your site can use Amazon.com's powerful search engine to find any
book, CD or video if you place a search box link on your
site. You earn 5% on every qualifying item purchased through this link. Don't
forget to download the Associates Search Box graphic
from the Linking Methods page at http://www.amazon.com/assoc-linking
Go to the Search Box example and place the pointer over the "Amazon.com" logo
in the search box and save it to your computers hard drive. You will then need
to upload the image to your files. For additional information about how to
download graphics, please visit:
http://www.amazon.com/assoc-art
Here's an example of the HTML for the Amazon.com Associates Search Box
including your Associates ID in the HTML. You may cut
and paste this directly from this document. Be sure to save a copy of the
Associates logo discussed abo\e in the same place as you
save your HTML.
YOUR ASSOCIATION WITH AMAZON.COM We ask that you prominently display
Amazon.com's logo or a text link somewhere on your site that says "in
Association with Amazon.com". This will identify that you
are working with Amazon.com to bring your visitors the best ser\Ace available.
We encourage you to link the logo or text to the
Associates Program information page so that your visitors will have a better
understanding of the Program and your relationship with
us. Here is a pre-formatted link to the Associates information page which
contains your unique store.
YOUR ASSOCIATES ACCOUNT INFORMATION
Your unique Associates ID is: bookdigitalcom
<PAGE>
