U. S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-SB
Natural Solutions Corporation
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(Name of Small Business Issuer in its charter)
Nevada 88-0367024
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1201 US Highway 1, Suite 205
North Palm Beach, Florida 33408
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (561) 625-4232
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class to be registered
None None
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Securities to be registered under Section 12(g) of the Act:
Common Stock, $.001 par value
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(Title of class)
Copies of Communications Sent to:
Donald F. Mintmire, Esq.
Mintmire & Associates
265 Sunrise Avenue, Suite 204
Palm Beach, FL 33480
Tel: (561) 832-5696
Fax: (561) 659-5371
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SUMMARY TABLE OF CONTENTS
PART I
Item 1 Description of Business.
Item 2 Management's Discussion and Analysis or Plan of Operation.
Item 3 Description of Property.
Item 4 Security Ownership of Certain Beneficial Owners and Management.
Item 5 Directors, Executive Officers, Promoters and Control Persons.
Item 6 Executive Compensation.
Item 7 Certain Relationships and Related Transactions.
Item 8 Description of Securities.
PART II
Item 1 Market Price of and Dividends on the Registrant's Common Equity
and Other Shareholder Matters.
Item 2 Legal Proceedings.
Item 3 Changes In and Disagreements With Accountants.
Item 4 Recent Sales of Unregistered Securities.
Item 5 Indemnification of Directors and Officers.
PART F/S Financial Statements.
PART III
Item 1 Index to Exhibits.
Item 2 Description of Exhibits.
PART I
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Item 1. Description of Business
(a) Business Development
Ice Ban America, Inc. ("IBA" or the "Company"), a Nevada corporation,
was incorporated on August 14, 1996. On November 11, 1998, IBA changed its name
to Natural Solutions Corporation ("NSC" or the "Company"). IBA was formed to
market agricultural by-products for use as anti-icing and de-icing agents. The
Company later expanded into providing dust control and road stabilization
agents. On December 24, 1996, IBA's common stock first began trading on the NASD
Over-the-Counter (OTC) Bulletin Board under the stock symbol "ICEB" (OTC
BB:ICEB). On December 7, 1998, IBA changed its name to Natural Solutions
Corporation ("NSC" or the "Company"). NSC has retained "ICEB" as its stock
symbol. Currently NSC has three wholly-owned subsidiaries, Ice Ban America,
Inc., Roadbind America, Inc. and Ice Ban Holdings, Inc. NSC's current address is
1201 U.S. Highway 1, Suite 205, North Palm Beach, Florida 33408. The Company's
Web-site address is http://www.naturalsolutionscorp.com. The Company's telephone
number is (561) 625-4232 and the consumer information number is 1-888-ICEBAN-1.
In the first two years of its operating history the Company spent its
time and resources developing its product offerings and developing and executing
its marketing and distribution strategies. Into its third year of operations the
Company had already developed a distribution network, marketing and selling its
products throughout the United States. NSC is currently a development stage
company in its fourth fiscal year.
On August 10, 1997, George Janke and the Company entered into an
employment agreement the terms of which would be retroactive to January 1, 1997.
The term and salary of the new agreement are that George Janke was to receive a
salary of eighty-five thousand ($85,000) dollars per year for each year of his
employment. The term of the agreement was to extend from January 1, 1997 for a
minimum of five (5) years thereafter, and after the five year minimum, the term
continues year by year unless canceled or terminated by either party.
Termination by either party is subject to one hundred and eighty days notice.
The agreement also called for George Janke to receive one hundred and
fifty-thousand (150,000) shares of restricted common stock to be issued, per
year, for five years (5) if certain performance goals are met. See Part I, Item
6. Executive Compensation, "1999 Stock Option Plan." Mr. Janke deferred all
claims for option-based compensation or salary through December 31, 1998 under
this agreement. The position of the Company is that George Janke deferred or
waived his rights to future payment of any kind under this contract after his
resignation as Chief Executive Officer on July 30, 1999. Mr. Janke contends the
contract was simply a waiver for only one(1) year and that the Company remains
obligated for the balance of the contract term. The issue remains unresolved.
Prior to the August 31, 1996 execution of the licensing agreement
described below, on August 16, 1996, in consideration of obtaining such
licensing agreement concerning intellectual property rights related to de-icing
and anti-icing products, and payment of five thousand dollars ($5,000), the
Company issued founders' shares to George Janke, in his capacity as trustee for
certain family members, and to Warren D. Johnson, Jr. George Janke, as trustee,
received five million eighthundred thousand (5,800,000) shares of common stock
and Warren D. Johnson, Jr. received six million four-hundred thousand
(6,400,000) shares of common stock. These shares were issued pursuant to the
exemption from registration provided by ss.4(2) of the Securities Act of 1933,
as amended (the "Act") and ss.517.061(11) of the Florida Code.
On August 31, 1996, IBA entered into an exclusive licensing agreement
with Ice Ban USA, Inc. ("IBUSA") to exploit certain patents, patents pending and
trademarks assigned to IBUSA. IBUSA is a Company owned by ICE BAN(R)'s inventor
George Janke and Warren D. Johnson, Jr. These patents govern the use of certain
agricultural by-products as road de-icing and anti-icing agents. The product is
currently marketed as ICE BAN(R). The territory granted under this license
included all of the United States except for upstate New York (north of the 42nd
parallel) and Erie, Pennsylvania. These territories were later added to the
Company's rights through subsequent corporate acquisition of Ice Ban, Inc.
("IBNY"). These areas, termed "out-territories" in the licensing agreement, were
the subject of a previously extended non-assignable license to IBNY, a New York
corporation. On March 30, 1998, IBUSA and IBA entered into an addendum to their
previous agreement. The terms of the addendum state that IBUSA shall transfer
one hundred and twenty-five thousand ($125,000) dollars to IBA's account for it
to use to pay for inventory and operations, at the sole discretion of IBA. IBA
agreed to pay a one ($1.00) dollar per ton additional fee to IBUSA for all IBA
products sold annually up to twenty-five thousand ($25,000) dollars per year for
six years, which would include interest and principal. The principal amount of
the loan as of 1999 is one hundred fifty-thousand ($150,000) dollars.
Prior to the August 31, 1996 execution of the licensing agreement
described below, on August 16, 1996, in consideration of obtaining such
licensing agreement concerning intellectual property rights related to de-icing
and anti-icing products, and payment of five thousand dollars ($5,000), the
Company issued founder's shares to George Janke, as trustee, received five
million eight-hundred thousand(5,800,000) shares of common stock and Warren D.
Johnson, Jr. received six million four-hundred thousand (6,400,000) shares of
common stock. These shares were issued pursuant to the exemptions from
registration provided by ss. 4(2) of the Securities Act of 1933, as amended (the
"Act") and ss. 517.061(11) of the Florida Code.
IBA also acquired the exclusive license to market the trademarked
TEMBIND(R) product upon the consummation of its acquisition of IBNY. TEMBIND(R)
is a biodegradable, non-corrosive dust control and road stabilization product
for use in the maintenance of unpaved roads. The Company now markets this
product under the trademarked brands RB ULTRA(TM) PRODUCTS and ICE BAN(R) as the
primary products offered by the Company.
During the period from September 23, 1996 through November 1, 1996, the
Company sold one million shares (1,000,000) of its common stock at ten cents
($0.10) per share, raising a total of $100,000. This offering was conducted
pursuant to ss.3(b) of the Act and Rule 504 of Regulation D promulgated
thereunder. This offering was made in the State of New York and to nonresident
foreign citizens. An offering memorandum was used in connection with the
offering.
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Commencing December 30, 1996 and through February 1, 1997, the Company
sold nine hundred thousand shares (900,000) of its common stock at one dollar
($1.00) per share, raising a total of $900,000. This offering was conducted
pursuant to ss.3(b) of the Act and Rule 504 of Regulation D promulgated
thereunder. This offering was made in the State of New York and to nonresident
foreign citizens. An offering memorandum was used in connection with the
offering.
IBA's first year of operation was very active. Efforts by the
management team during such year were aimed to develop the Company into a
successful business for its shareholders. During this first year of development
operations, the corporate executives collected no salary and no founder received
any up front fees or compensation for previous work done or expenditures made.
The Company had acquired considerable inventory which was placed in storage at
distribution centers ready for the winter season. Additionally during the first
year of operations the Company began receiving very strong positive interest
from federal, state, county and local highway officials about the Company's
products.
The corporate policy of the Company is to engage or encourage third
party testing facilities to conduct testing and analysis of its products. In
January 1997, the Company engaged the American Association of Civil Engineers
Research Foundation (CERF) to conduct testing of ICE BAN(R), CERF then
instructed Highway Innovative Technological Evaluation Center (HITEC) to
evaluate the technical aspects and effectiveness of ICE BAN(R). The reports that
were produced indicated successful field and laboratory test results. CERF has
another evaluation council named the Environmental Technology Evaluation Center
(EvTEC) which conducts environmental evaluations. The ICE BAN(R) product was
selected by CERF to be the first full scale environmental evaluation that EvTEC
conducted. The results of this evaluation are pending.
On February 21, 1997, the Company entered into an agreement to sell
common stock to Minnesota Corn Processors Company ("MCP") in exchange for
supplies of the raw material by- product which MCP produces and which the
Company uses to produce ICE BAN(R). This arrangement provided the Company with
nearly fifty percent (50%) of the Company's product supply. In accord with this
agreement, on February 21, 1997, the Company committed one million one-hundred
seventy thousand (1,170,000) shares of common stock to MCP for the exchange of
raw material for the ICE BAN(R) product. The amount of raw material to be
supplied by MCP is derived from a formula based on the market value of the
product and the price of stock of the Company at the time of shipment based upon
a formula agreed to between the Company and MCP. The contract provides: (1) MCP
agreed to conduct laboratory and field testing of ICE BAN(R) and TEMBIND(R), (2)
MCP agreed to use its resources to promote further development of ICE BAN(R) and
TEMBIND(R), (3) MCP agreed to provide tankage and distribution as well as sales
and service in its market, (4) MCP agreed to confidentiality and non-compete
provisions, (5) the Company granted MCP an option to purchase an additional
1,170,000 shares on the same terms as previously agreed to, and (6) IBA granted
MCP pre-emptive rights to maintain a 15% stake in the Company. The Company
relied upon the exemption from registration provided by ss.4(2) of the Act and
Rule 506 of Regulation D ("Rule 506"), promulgated thereunder, and ss.80A.15
(Subd. 2)(h) of the Minnesota Code.
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On May 1, 1997, IBA and Jeffrey Johnson entered into an employment
agreement. Jeffrey Johnson was to receive a salary of thirty-six thousand
($36,000) dollars per year for each year of his employment with IBA. Jeffrey
Johnson was to be Senior Vice President and Chief Operating Officer for a
minimum term of three years, subject to the discretion of the IBA Board of
Directors. For each of the three-year term of the agreement, Johnson was to
receive one hundred thousand (100,000) shares of stock per year on the yearly
anniversary of his employment with the Company, provided that Johnson fully
performed under the terms of the contract. The total maximum number of shares
due under this provision was three hundred thousand (300,000) shares. The
contract was to continue after the three-year minimum time period until canceled
or terminated by either party subject to one hundred and eighty (180) days
notice. This employment agreement is currently the subject of litigation. See
Part II, Item 2. Legal Proceedings, Jeffrey Johnson vs. Natural Solutions.
On July 29, 1997, in an exchange of stock, the Company acquired IBNY,
the only licensee with territorial rights to ICE BAN(R) in the U.S. (i.e.
upstate New York and Erie, Pennsylvania) which was not included in the original
license to the Company. This acquisition provided the Company with a fully
operational and cash generating company to enhance its business. The
acquisition, moreover, provided additional personnel experienced in the
Company's line of business. IBA issued 1.3 million shares of its common stock to
acquire 100% of the common stock of IBNY. In the same transaction, an additional
one hundred thousand (100,000) shares of the Company was issued to IBUSA, in
exchange for the waiver of its non-assignability provision in its licensing
agreement. Mr. Janke is the inventor of the patents that cover the ICE BAN(R)
products. As a result of this acquisition of IBNY, the Company's license now
extends to the entire United States. In acquiring IBNY, the Company also
acquired the national distribution rights from IBUSA to the TEMBIND(R) product,
a wood by-product. The Company would later re-brand the product as RB ULTRA(TM)
Products.
IBNY owned the exclusive license to market the ICE BAN(R) products in
upstate New York and Erie County, Pennsylvania, and also the exclusive license
to market and distribute TEMBIND(R) in the United States. As part of the
transaction, IBNY was obligated to assign the above rights to IBUSA (from whence
they came) with the further agreement that IBUSA would assign the rights to the
Company or its designee, which it did, in consideration for one hundred thousand
(100,000) shares of the Company's common stock. As part of this transaction, the
above mentioned 100,000 shares of the Company's common stock were issued to
IBUSA in consideration for the waiver of its non-assignability provision in its
licensing agreement with IBNY in regard to the license of ICE BAN(R) products in
upstate New York and Erie County, Pennsylvania. The Company relied upon the
exemption from registration provided by ss.4(2) of the Act and Rule 506.
On August 10, 1997, IBA and George Janke entered into an employment
agreement with the Company. The agreement stated that George Janke was to be
Chief Executive Officer for a minimum term of five (5) years, from January 1,
1997 thru December 31, 2001. George Janke was to receive eighty-five thousand
dollars ($85,000) per year for each year of his employment with IBA, subject to
cost of living adjustments. Mr. Janke was also given the right to receive his
compensation in the form of IBA stock based on the amount of salary due and the
price that the IBA stock is listed as sold at the close of business on the last
trading day each year. Such compensation would be in lieu of cash, and Mr. Janke
would have the right to receive such non-cash compensation at his sole
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discretion. The agreement provided for a "shares of stock bonus." This bonus
consists of up to one hundred and fifty-thousand (150,000) shares of restricted
shares of common stock to be issued, per year, for five (5) years if certain
performance goals are met. The agreement and Mr. Janke's employment with the
Company, can be terminated after the five(5) year base term, however, each party
is required to provide one hundred and eighty(180) days notice in writing of
said termination or resignation. The position of the Company is that George
Janke deferred or waived his rights to future payment of any kind under this
contract after his resignation as Chief Executive Officer on July 30, 1999. Mr.
Janke contends the contract was simply a waiver for only one(1) year and that
the Company remains obligated for the balance of the contract term. The issue
remains unresolved.
On August 22, 1997, the Company issued to David Wright a total of 5,000
shares of its common stock, Ann M. Owen a total of 2,000 shares, Continental
Capital & Equity Corp. a total of 55,000 shares, and Cullen M. Ryan a total of
10,000 shares, all in payment of professional fees. The Company relied upon the
exemption to registration provided by ss.4(2) of the Act and Rule 506 and
ss.517.061(11) of the Florida Code. On the same date, the Company issued
Castlebar Industries Corp. Profit Sharing Plan a total of 10,000 shares in
payment of professional fees. The Company relied upon the exemption from
registration provided by ss.4(2) of the Act and Rule 506 and ss.49:3-50(b)(9) of
the New Jersey Code. Robert E. Freer was also issued 40,000 shares in payment of
professional fees as well. The Company relied upon the exemption from
registration provided by ss.4(2) and ss.11- 602 (15), ss.11-501 and Rule 9 of
the Maryland Code.
On October 17, 1997, the Company formed Tembind America, Inc. as a
wholly owned subsidiary to market the TEMBIND(R) product in the United States.
On November 3, 1998, the Company changed the name of this subsidiary to Roadbind
America, Inc. ("RBA"). The Company at this time also discontinued use of the
TEMBIND(R) brand name and decided it would market this dust control and road
stabilization product under brand names more related to its product
distinctions. The Company now uses the brand names RB ULTRA(TM) Products.
On or about November 7, 1997, Dr. Marion G. (Pat) Robertson ("Pat
Robertson") entered into an agreement with the Company which allowed him to
acquire up to one million shares of restricted common stock over the next two
years. On November 7, 1997, Dr. Robertson was issued a total of 150,000 shares
at the purchase price of $7.50 per share, as well as warrants to purchase an
additional 1,000,000 shares of common stock were issued by and in consideration
for an aggregate price of $1,125,000 if all warrants are exercised. The Company
relied upon the exemption from registration provided by ss.4(2) of the Act and
Rule 506 and ss.13.1-507 of the Virginia Code.
On December 12, 1997, the Company formed Ice Ban Holdings, Inc. ("IBH")
as a wholly owned subsidiary, the purpose of which was to be a holding company
for certain assets and interests.
On December 19, 1997, the Company issued 4,651 shares of its common
stock to MCP as payment for product. The Company relied upon the exemption from
registration provided by ss.4(2) of the Act and Rule 506 and ss.80A.15 (Subd.
2)(h) of the Minnesota Code.
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On February 20, 1998, the Company issued 25,391 shares of its common
stock to MCP as payment for product. The Company relied upon the exemption from
registration provided by ss.4(2) of the Act and Rule 506 and ss.80A.15 (Subd.
2)(h) of the Minnesota Code.
On March 4, 1998, the Company issued 10,000 shares of its common stock
to Robert E. Freer as payment of professional fees. The Company relied upon the
exemption from registration provided by ss.4(2) of the Act and ss.11-602 (15),
ss.11-501 and Rule 9 of the Maryland Code.
During April 1998, William Dannhausen owner and publisher of Better
Roads, the premier road and transportation trade magazine, agreed to join the
Company's Board of Directors in April , of 1998. In addition, Robert E. Freer,
Esq.: Officer & Director of Baise, Miller & Freer, PC, Dr. J. Nelson Happy: Dean
of Regent University Law School, Richard Jurgenson: Retired President & CEO of
Minnesota Corn Processors, Stanley L. Sitton: Vice President of Marketing of
Minnesota Corn Processors and J. Carter Beese, Managing Partner of B.T. Alex
Brown were appointed to the Company's Board of Directors. The Company believes
the broad experience and perspective of the above board members will assist
management in making the Company's development successful.
On April 23, 1998, the Company issued 35,000 shares of its common stock
to the law firm of Baise, Miller & Freer P.C. of Washington, D.C. as payment of
professional fees. The Company relied upon the exemption from registration
provided by ss.4(2) of the Act and Rule 506.
On or about, May 26, 1998, Hon. J. Carter Beese Jr., managing director
of the Global Banking Group at BT Alex Brown and former Commissioner of the U.S.
Securities & Exchange Commission, agreed to serve on the Company's Board of
Directors.
On June 9, 1998, the 1998 Transportation Efficiency Act for the 21st
Century (TEA 21) legislation was signed by President Clinton. TEA 21 includes
provisions that would permit state users of ICE BAN(R) products to substantially
recoup user costs for de-icing bridges, elevated roadways and approaches thereto
that are part of the national highway system. The Company's products and its
compositions qualify for the federal subsidy because of their environmentally
friendly and corrosion inhibiting characteristics. At about this time, Company
test results indicated that ICE BAN(R) products even when blended with chloride
salt brines have a corrosion index less than distilled water even when blended
with chloride salt brines.
On June 12, 1998, the Company issued 10,000 shares of its common stock
to Floyd Chapman and 10,000 shares of its common stock to NSC Secretary to the
Board of Directors, Ann M. Owen. Both issues were in payment for professional
fees. The Company relied upon the exemption from registration provided by
ss.4(2) of the Act and Rule 506 and ss.517.061(11) of the Florida Code.
On June 16, 1998, the Company issued 914 shares of its common stock to
MCP in payment for product. The Company relied upon the exemption from
registration provided by ss.4(2) of the Act and Rule 506 and ss.80A.15 (Subd.
2)(h) of the Minnesota Code.
On June 16, 1998, the Company entered into a Business Loan Agreement
with First United Bank of Lake Park, Florida. Several documents related to such
loan were executed by the Company.
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Ice Ban America, Inc. provided a company certificate of deposit as a guarantee
in conjunction with this loan. The principal amount of the loan was thirty-five
thousand dollars ($35,000) with a maturity date of June 16, 1999. The Company
has repaid in full this Business Loan Agreement.
On July 7, 1998, the Company formed a separate corporation named
Natural Solutions Corporation with the purpose of changing the name of the
Company from Ice Ban America, Inc. to Natural Solutions Corporation. The newly
formed corporation's name was changed to Ice Ban America, Inc. on December 7,
1998 and on that date the Company changed its name to Natural Solutions
Corporation (NSC). As a result of these events, NSC has a wholly owned
subsidiary named Ice Ban America, Inc. (IBA).
On July 8, 1998, the Company executed an "Operating Agreement of Sears
Environmental Applications Company, L.L.C." (SEACO) with Sears Petroleum &
Transport, Corp. and IMUS, Inc. Each of the three parties owned a one-third
interest (33 1/3%) in SEACO. SEACO Articles of Organization were filed with the
Office of the New York Secretary of State on July 6, 1998. The purpose of SEACO
was to engage in the sale and distribution of ICE BAN(R), TEMBIND(R), and other
related products.
On July 17, 1998, the Company issued 20,000 shares of its common stock
to Richard Stanton as payment of professional fees. The Company relied upon the
exemption from registration provided by ss.4(2) of the Act and ss.11-602 (15),
ss.11-501 and Rule 9 of the Maryland Code.
On August 13, 1998, the Company issued 10,000 shares of its common
stock to Leo Palmer as payment of professional fees. The Company relied upon the
exemption from registration provided by ss.4(2) of the Act and Rule 506 and
ss.517.061(11) of the Florida Code.
On September 15, 1998, the Company issued 784 shares of its common
stock to MCP as payment for product. The Company relied upon the exemption from
registration provided by ss.4(2) of the Act and Rule 506 and ss.80A.15 (Subd.
2)(h) of the Minnesota Code.
On September 29, 1998, the Company announced that Mr. Leo C. Palmer
joined the Company's management team as Chief Financial Officer (CFO).
On October 8, 1998, the Company issued 19,674 shares of its common
stock to the law firm of Baise, Miller & Freer PC of Washington, D.C. in payment
of professional fees. The Company relied upon the exemption from registration
provided by ss.4(2) of the Act and Rule 506.
On November 10, 1998, ICE BAN(R) and its inventor, George Janke, were
awarded the prestigious Charles W. Pankow Innovative Applications Award for 1998
from the Civil Engineering Research Foundation (CERF). The award is presented
each year after consideration and evaluation of various technological
innovations. CERF selected ICE BAN(R) product and technology as the winner of
the Innovative Applications Award, the ICE BAN(R) product and technology from
more than 200 applications submitted. The Company believes that this award was a
significant international honor and confirmed the Company's policy of
independent-based testing of its products and its belief in the product's
capabilities of ICE BAN(R).
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On November 12, 1998, the Company at its annual meeting formally
approved the change of the Company's name from IBA to Natural Solutions
Corporation. The new name was adopted to better describe the Company's
commitment to developing and marketing environmentally friendly products. The
Company believes the new name is more suggestive of the year round nature of the
Company's operations.
On January 11, 1999, the Company issued 200 shares of its common stock
to Andrew Deggeller as an award for winning a science competition at the 1998
Indiana Regional Science Fare using the ICE BAN(R) product . The Company relied
upon the exemption from registration provided by ss.4(2) of the Act and Rule 506
and ss.517.061(11) of the Florida Code.
On January 21, 1999, the Company issued 9,465 shares of its common
stock to Minnesota Corn Processors (MCP) as payment for product. The Company
relied upon the exemption from registration provided by ss.4(2) of the Act and
Rule 506 and ss.80A.15 (Subd. 2)(h) of the Minnesota Code.
On February 10, 1999, the Company issued 22,687 shares of its common
stock to the law firm of Baise, Miller & Freer P.C. of Washington, D.C. as
payment of professional fees. The Company relied upon the exemption from
registration provided by ss.4(2) of the Act and Rule 506.
On March 25, 1999, the Company issued 24,761 shares of its common stock
to MCP as payment for product. The Company relied upon the exemption from
registration provided by ss.4(2) of the Act and Rule 506 and ss.80A.15 of the
Minnesota Code. Also, on March 25, 1999, the Company issued 3,056 shares of its
common stock to Nick D. Hansen for as payment for professional fees. The Company
relied upon the exemption from registration provided by ss.4(2) of the Act and
Rule 506 and ss.517.061(11) of the Florida Code.
On April 16, 1999, the Company issued 17,957 shares of its common stock
to Baise, Miller & Freer PC of Washington, D.C. as payment of professional fees.
The Company relied upon the exemption from registration provided by ss.4(2) of
the Act and Rule 506.
On or about April 16, 1999, NSC filed litigation and also became a
defendant in a case related to the ownership rights of a de-icing patent
covering the use of stillage. The Defendants in this case counter-sued NSC. This
claim against NSC does not threaten the other de-icing patents or patents
pending. The suit was filed in Florida Circuit Court, Palm Beach County, as Case
No. CL 99-3344-AD titled Ice Ban USA, Inc. and Natural Solutions Corp., as
Licensee, vs. Sears Oil Co., Inc., Howard Sears et al. In response to NSC's
legal action, the adverse claimant filed an action against NSC's subsidiary, Ice
Ban America, Inc., in Oneida County Superior Court, Utica, N.Y., Case No.
9900200 titled Sears Petroleum & Transport Corp. et al vs. Ice Ban America et
al. See Part II., Item 2. "Legal Proceedings."
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On or about, May 5, 1999, Richard Jurgenson was elected Chairman of the
Company's Board of Directors. Mr. Jurgenson first joined the Company's board in
April 1998 and had earlier served as President of MCP as well as one of its
founders.
In August of 1999, George Janke, founder of the Company resigned as
President and Chief Executive Officer. Richard Jurgenson was selected to replace
Mr. Janke. Mr. Janke was then appointed Chief Development Officer and assigned
the responsibilities to work on further development of new products and on
expanding the use of existing products.
In August of 1999, NSC filed a claim against Jeffrey Johnson, a former
officer of the Company, members of the Warren Johnson, Jr. family and others
charging fraud, conversion of funds, civil theft, embezzlement, tortuous
interference and racketeering under the RICO statute. The Company requested the
Johnson family's federal bankruptcy trustee to rescind the issuance of
approximately five million shares of the Company's stock issued to members of
the Johnson family and which has now been frozen by the Bankruptcy Trustee.
Kapila Trustee vs. Warren Douglas, Jr. et al. (U.S. Bankruptcy Court, Southern
District of Florida Case No. 92-33339 BKC SHF Chapter 7). The lawsuits that were
filed by the Johnsons and others alleged that the Company does not have a
legitimate ownership in one of the patents it claims and for that reason
investors and others were misled. This patent relates to the "Toth" patent. See
Part I., Item 1. Description of Business. -(b) Business of Issuer, (4)
"Competitive business conditions and issuer's competitive position in the
industry and methods of competition."
On August 11, 1999, Dr. Pat Robertson invested an additional seven
hundred fifty-thousand dollars ($750,000) in the Company. In consideration for
this additional investment, Pat Robertson received stock warrants allowing for
the purchase of 1,000,000 shares of restricted common stock at $.75 per share.
NSC and Dr. Robertson executed a convertible debenture whereby the Company is to
pay Dr. Robertson on August 11, 2001 the principal sum of seven hundred and
fifty-thousand dollars ($750,000), at ten percent (10%) interest per annum which
interest may be converted at the Company's election to pay in cash or shares of
its common stock, each share to be valued at seventy-five cents per share
($0.75/share). On August 11, 2001 upon the execution of an "Election to
Convert", at Dr. Robertson's option, the debenture may be converted to shares of
stock on the outstanding principal and interest due at seventy-five cents per
share ($0.75/share) or the Company will repay the debenture back in cash. In the
event that NSC is unable to repay back the debenture at the end of two years and
Pat Robertson does not wish to convert said debenture into shares of NSC's
stock, a third-party, namely George Janke, who is also a related party of the
Company, acting as Trustee for the Janke Family Trust, has secured this
debenture with artwork as collateral. The Warrants associated with the debenture
were executed on August 10, 1999. The Company relied upon the exemption from
registration provided by ss.4(2) of the Act and Rule 506 and ss.13.1-507 of the
Virginia Code.
On September 28, 1999, Roadbind America, Inc., announced the completion
of the "Pikes Peak Road Dust Research Project" which was conducted by Dr. Tom
Sanders of Colorado State University. The purpose of the project was to
determine the ability of RB ULTRA (TM) Products to reduce the amount of dust and
aggregate loss thereby extending the useful life of a dirt road. Analysis of the
data showed that the road section treated with RB ULTRA(TM) Products performed
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significantly better than the untreated section, retaining 270% more road fines
than the control sections.
On October 29, 1999, the Company entered into a Stock Purchase
Agreement with Dr. Pat Robertson wherein he invested an additional one million
dollars ($1,000,000) in the Company in exchange for 4,000,000 shares of
restricted common stock, $0.001 par value per share. The Company relied upon the
exemption from registration provided by ss.4(2) of the Act and Rule 506 and
ss.13.1-507 of the Virginia Code. Upon the closing of the above Stock Purchase
Agreement Mr. Robertson was appointed as Chairman of the Board of Directors of
the Company.
(b) Business of Issuer
Overview
Natural Solutions Corporation is a distributor of patented
environmentally friendly corrosion inhibitor products for de-icing and
anti-icing under the ICE BAN(R) brand and the environmentally friendly road
stabilization and dust control products currently marketed under the RB
ULTRA(TM) Products brands.
(1) Principal Products and Markets
The Company entered into an exclusive licensing agreement with IBUSA to
exploit certain patents, patents pending and trademarks. The patents cover the
use of agricultural by-products as road de-icing and anti-icing products. The
products are marketed under the trademark ICE BAN(R). The Company also acquired
through acquisition of IBNY exclusive rights to the product TEMBIND(R) which the
Company brands RB ULTRA(TM) Products.
ICE BAN(R)
ICE BAN(R) is produced from the concentrated liquid residue of grain
processing and from the processing of other agricultural products. These
products are the result of natural processes, and are used in various
applications for the de-icing and anti-icing of roadways and other surfaces.
ICE BAN(R) products are designed to satisfy demand for a superior
de-icing and anti-icing agent that is at the same time an environmentally safe
product. ICE BAN(R) is environmentally friendly. ICE BAN(R) is biodegradable,
non-toxic, and does not accumulate in the environment. It has no known adverse
effects on vegetation or fresh water organisms. Using ICE BAN(R) in place of
chloride-based agents reduces the level of damaging chlorides in the
environment. Chloride salts, producing corrosion and other harmful effects to
the environment, are ICE BAN(R)'s primary competition. ICE BAN(R) products are
intended as (1) an alternative to chloride-based substitutes or (2) to be mixed
with chloride to reduce their harmful corrosive effects. Both of these uses
provide the Company with a unique and valuable product in the approximately one
billion dollar ($1,000,000,000) annual market in roadway de-icing and
anti-icing.
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Chloride-based products, ICE BAN(R)'s primary competition imposes
significant external costs and damage the environment. This has been articulated
in an important article on the subject:
"The use of (chloride) salt for the use of de-icing roads results in costs
estimated at more than $800 ($932 in 1997 dollars) per ton (per year)
including the costs of repair and maintenance of roads and bridges, vehicle
corrosion costs, the loss of aesthetic value through roadside tree damage,
etc. Additionally there are...health costs related to sodium levels in
drinking water." Vitaliano, Donald F., "Economic Assessment of the Social
Costs of Highway Salting and the Efficiency of Substituting a New De- Icing
Material", Journal of Policy Analysis & Management, Vol. 11, No. 3, pp.
397- 418.
Dr. Donald F. Vitaliono's, a professor of economics at the Rensselaer
Polytechnic Institute, study further estimates that annual salt damage to
roadway infrastructure and vehicles to be approximately twenty billion dollars
($20,000,000,000) annually. NSC's ICE BAN(R) products seek to attain a marketing
advantage by being more effective and safer than chloride salts.
In laboratory tests, ICE BAN(R) has been shown to be effective in
melting snow and ice faster and at lower temperatures than sodium chloride
(commonly known as "salt"). ICE BAN(R) products are biologically and
environmentally friendly, are minimally corrosive, and have no significant known
adverse effects on roads, other infrastructure, or vehicles. ICE BAN(R) is
water-soluble, easy to handle and apply, and can be used with various
admixtures. They are economical and tests indicate that when used in a mixture
with various chloride salts ICE BAN(R) significantly lower salt's corrosive
effect.
ICE BAN(R) provides the first economical and readily available
replacement for chloride salt de-icers. Testing indicates that the use of ICE
BAN(R) products result in both substantial short-term dollar savings from
reduced direct de-icing budgetary costs and, in the long-term savings in reduced
damage to roadways, infrastructure, vehicles and the environment. ICE BAN(R)
products also have potential special use applications such as on airport runways
where salt is not suitable or approved for salt. The use of ICE BAN(R) by such
specialized users could save such users substantial amounts of money and enable
these users to de-ice where previously the salt corrosiveness was unacceptable
and other alternative de-icers were toxic or cost-prohibitive.
ICE BAN(R) is both technically and economically effective and
efficient. Field and laboratory applications of ICE BAN(R) mixtures have
demonstrated superior penetration on existing ice and snow-packs than
conventional applications. Applications of ICE BAN(R) at the rate of 40-
gallons/lane mile removed snow-pack directly at temperatures well below the
effective range of salt application. ICE BAN(R) mixtures penetrate the snow-pack
vertically to the underlying road surface, then spreads out on the road and
breaks the bond between the snow-pack and the road surface. ICE BAN(R) works on
the road surface and not on the top of the snow-pack. Unlike salts and brines,
it is resistant to dilution and remains effective for much greater periods of
time. Thus, using ICE BAN(R) requires fewer applications, man hours, and truck
miles. Using ICE BAN(R) reduces truck fuel and maintenance costs, and use of ICE
BAN(R) results in fewer problems with spreader vehicles and methods.
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ICE BAN(R) users have reported that ICE BAN(R) products have a residual
re-activation effect after the initial application and melting process. The
re-activation effect is that even long after application, the product continues
to act as an anti-icing agent and prevents new snow and ice from adhering to the
road surface.
Re-activation results in further cost savings for ICE BAN(R) users
compared to traditional de- icing methods. For example, if ICE BAN(R) is applied
prior to storms, it prevents or otherwise impedes snow and ice from bonding to
the road surface. This property further lowers maintenance costs by reducing the
number of applications that are needed; and in turn further reduces materials
requirements (whether salts or agricultural by-products).
In addition, ICE BAN(R) reduces winter-time PM-10 (dust) levels by
eliminating or reducing the need for sand or other grit. ICE BAN(R) is
especially ideal for treating black ice and clear weather frost on road and
bridge surfaces.
Prior to the Company's formation, field and laboratory testing began in
northwestern New York in 1994. After testing, limited commercial use began in
January 1995. Sales and testing continued on a limited basis during the winter
season of 1995-1996 by the licensee for the product in upstate New York. During
this period the licensee obtained a Beneficial Use Determination for commercial
use in the State of New York. This approval required the monitoring of streams
in the use areas for runoff concentrations and environmental impacts. The
impacts were negligible or non- detectable. Commercial use was significantly
expanded in the New York State licensee area in the winter of 1996-1997.
ICE BAN(R) products have been subjected to unrestricted independent
testing. Testing results have been positive. Testing and evaluations have been
conducted by the Civil Engineering Research Foundation (CERF) through its
affiliates HITEC and EvTEC. The National Aeronautics and Space
Administration("NASA") has also participated in conducting tests on the
effectiveness of ICE BAN(R) in association with HITEC. HITEC is the Highway
Innovative Technology Evaluation Center, which conducted technical and field
effectiveness evaluations. EvTEC is the Environmental Technology Evaluation
Center. It conducted environmental testing. Toxicon, Inc. has conducted testing
for algae growth stimulation. Scientific Materials International, Inc. is a
certified FAA testing laboratory, and has conducted tests related to FAA airport
standards. The Washington State Department of Transportation (WSDOT) has
conducted tests concerning ICE BAN(R)'s ice melting capacity and corrosion
inhibiting characteristics. The Nebraska Department of Transportation conducted
roadway traction tests. Materials Engineering and Technical Support Services,
Ltd. (METSS) conducted tests related to ice melting capacity and corrosion
inhibiting characteristics. The New York Department of Environmental Conservancy
(DEC) conducted evaluations related to melt runoff on vegetation and streams.
The Company believes in an open policy with regard to testing and evaluation of
its products, and the testing and evaluation reports have backed up management's
support of ICE BAN(R).
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Testing and roadway use has confirmed that ICE BAN(R) is effective for
anti-icing and de- icing. It is highly soluble in water, and it has a high
concentration of solids in solution resulting in a very low freezing-melting
temperature. These attributes make the product is such an effective de- icing
agent.
RB ULTRA(TM) PRODUCTS (formerly marketed as TEMBIND(R))
RB ULTRA(TM) is an environmentally friendly liquid prodcts used for
unpaved road stabilization and dust control. The Company's product, formerly
known as TEMBIND(R), is now known as, and marketed under, the trademark RB
ULTRA(TM) PRODUCTS(collectively hereinafter also referred to as "Roadbind
products "). TEMBIND(R) provided the Company with a summer season business to
balance the Company's winter season snow and icing control business. This gives
the Company the potential capability to stabilize earnings and provide a revenue
base over the entire fiscal year. The Company is thereby attempting to manage
its product portfolio to reduce any seasonal cycles which subject revenues and
potential earnings to variables in weather and climate conditions. The Company
believes that the potential of these Roadbind products in the marketplace is
exceptional in that the United States has approximately four million (4,000,000)
miles of roads of which nearly one million two-hundred thousand (1,200,000) are
unpaved (or thirty percent). The Company believes that its products are superior
road binders and dust control agents.
Roadbind products are biodegradable, environmentally friendly,
non-toxic, non-corrosive dust control and road stabilization products for use in
the maintenance of unpaved roads. The product is made of lignin and
lignosulfonates, or tree glue, which is a co-product of the papermaking process.
Roadbind product increases the load-bearing strength of roads and soils, and
also allows for immediate use of the road after application and prevents
washouts while increasing traction.
Roadbind products use lignin which is a natural binder found in plants
and trees. It provides strength and rigidity. Approximately one-quarter of dry
wood is lignin. It is the second most prominent component of the wood part of a
tree (cellulose is the first). Lignosulfonates have been used as a treatment for
unpaved roads since the 1920's and have been effective; Roadbind products are
designed to maximize and augment these lignosulfonate properties. Using lignin
as the main ingredient Roadbind America, Inc. (RBA) has blended it with other
environmentally safe proprietary agricultural additives. This blended product is
then marketed under the RB ULTRA(TM) Products brand name.
Roadbind products, when properly mixed and applied, are more resilient,
durable, long lasting and a more effective dust control agent than other
products on the market. Roadbind products increase load-bearing ratios
approximately two to three times. The products are water soluble and are easily
rinsed from equipment and clothing easily. However, it takes heavy and prolonged
rains and traffic to substantially affect the Roadbind treated surfaces.
RBA's products coat dirt roads with an adhesive-like film that binds
particles together for a stronger road surface. Water uptake by the roadbed
surface is also greatly reduced and the treated roadbed is less likely therefore
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to be washed away by rain. Roadbind products can be used on all types of unpaved
roads including shell, coquina, limestone, clay, sand, marl, and gravel.
Roadbind products have been used successfully on roadways, airstrips, helicopter
pads, campgrounds, parks, racetracks, parking areas, nature trails, and even for
embankment stabilization. RBA's products are a safe and economic alternative for
road stabilization and dust control.
(2) Distribution Methods
The Company's products, both its ICE BAN(R) products and its Roadbind
products, are sold by NSC principally in the United States. Sales are made
primarily through exclusive distributors and agents as well as the Company's
sales force.
NSC's ICE BAN(R) distributors service the transportation departments of
government municipalities and other potential users with the Company providing
marketing material, contracts, references, referrals, demonstrations, logistical
backup, technical data and assistance, trade show presence and other support as
may be needed from time to time. At the distributor level, NSC provides
marketing and advertising support both on a territorial and national basis,
including, trade and municipal publications, trade shows, direct mail, news
media, infomercial, and proposal presentations.
The Company originally used ship as well as rail to transport its
product to certain holding tank facilities. ICE BAN(R) is primarily stored in
holding tanks in New York and New Jersey; this is for the most part at the
Company's expense. The independent distributors also use holding tank facilities
for their needs, at their expense.
The Company has determined that a limited number of holding tanks
strategically located throughout the U.S., plus rail cars transported to large
work sites directly from its suppliers will satisfy its supply needs. The
Company has had strategic alliances with MCP, Tembec, Inc., and other suppliers
of the raw materials. Through these alliances, the Company has reduced the
future need for its own extensive storage facilities. The ultimate plan is to
drop ship 85 to 90% of both products to strategic holding tanks throughout the
country, as well as holding tanks owned or leased by its distributors, as well
as to drop shipments directly from the suppliers to large customer job sites and
storage facilities. This strategy is a variation of Just-in-Time Inventory
procedures used in many large industries and the Company believes that this
strategy will result in cost-savings and added flexibility in its marketing and
logistical efforts. Strategic holding tanks along with rapid supplier response
and strategic rail car locations, will potentially keep the Company's inventory
holding costs to a minimum.
The Company's road stabilization products are primarily sold directly
to customers, of which municipalities constitute the largest customer segment.
The Company occasionally sells through authorized Company distributors and other
non-affiliated distributors. The Company's road stabilization products are
currently stored in the State of Florida.
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Distribution and Transportation Agreements
On March 5, 1997, an agreement was executed between Sears Oil Co., Inc.
and IBNY, which calls for Sears to provide storage and thru-put services in
Rome, NY. Such service would include receiving product by rail or truck, in-tank
storage of product, inventory control and reporting, provision of truck loading
facilities, equipment maintenance and provision of normal supplies. This
agreement also calls for minimum quantities of thru-put services to be provided
by IBNY. This contract is binding on any successors of such corporations.
On May 31, 1997, IBNY entered into a contract with Sweetners Plus, Inc.
relating to the unloading, storage, reloading and delivery of ICE BAN(R)
products at Sweetners' Lakeville, New York and Wayland, New York facilities.
This contract is binding on any successors of such corporations. The effective
date of the contract with Sweetners Plus is from June 1, 1997 to May 31, 2002,
with an automatic update from year to year after such five year effective date.
In July 1997, the Company acquired, pursuant to its acquisition of ICE
BAN, INC., the contract with SRI, Inc.,and Petro-chem Div. concerning lignin
storage in Jacksonville, Fla. The proposed contract called for a three-year term
whereby SRI would provide various transport and loading services and storage.
On June 4, 1998, a "Lease" was entered into between 1194 Corporation,
of North Palm Beach, Florida, and Tembind America, Inc. for a three-year lease,
from July 1, 1998 to June 30, 2001, of property to be used for the sale and
storage of materials.
On June 8, 1998, a "Commercial Contract & Lease" was entered into
between Ted Gaczynski, President of R. Conley, Inc. and Jeffrey Johnson, Vice
President of IBNY. IBNY agreed to lease from R. Conley, Inc. premises situated
in Erie, New York. This contract was for the use and occupation of premises for
storage (tank) and handling of product commenced on July 1, 1998 and terminated
on July 1, 1999.
On August 25, 1998, an agreement was entered into among Sears Petroleum
& Transport Corp., Sears Oil Co., Inc. ("Sears"), IBA and Sears Environmental
Applications Company, LLC ("SEACO") . The agreement provided for Sears to have
the right to purchase up to one and one-half million gallons (1,500,000) of ICE
BAN(R), subject to certain provisions relating to resales to SEACO. This
agreement has recently expired.
On August 14, 1999, a "Terminal & Transloading Agreement" was entered
into between Roadbind America, Inc. and Na-Churs Plant Food Company d/b/a
Na-Churs/Alpine Solutions of Corydon, Indiana ("Na-Churs"). The agreement calls
for Na-Churs to receive, store and transload out ROADBIND ULTRA(TM) PRODUCTS,
ICE BAN(R) and Magnesium Chloride Solution. The materials will be delivered FOB
to Na-Churs facility in Roadbind designated trucks or tank cars and all the
inventoried materials will be owned by Roadbind. Na-Churs will store the
materials in storage tanks having a capacity of 110,000 gallons. Roadbind
guarantees a minimum of two hundred thousand (200,000) gallons per calendar year
to be placed through the Na-Churs facility.
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On October 14, 1999, a "Terminal & Transloading Agreement" was entered
into between Roadbind America, Inc. and Steuben County Co-op, Angola, Indiana
("Steuben"). The agreement calls for Steuben to receive, store and transload out
ROADBIND ULTRA(TM) PRODUCTS, ICE BAN(R) and Magnesium Chloride Solution. The
materials will be delivered FOB to Steuben facility in Roadbind designated
trucks or tank cars and all the inventoried materials will be owned by Roadbind.
Steuben's will store the materials in storage tanks having a capacity of 110,000
gallons. Roadbind guarantees a minimum of two hundred thousand (200,000) gallons
per calendar year to be placed through the Steuben facility.
The Company also from time to time contracts with various other railway
and storage companies for the transport and storage of the Company's product.
Such companies include, among others, CSX Corporation and TransMatrix.
(3) Status of any publicly announced new product or service
The status of such is described above. See Part I, Item 2.
(4) Competitive business conditions and issuer's competitive position in the
industry and methods of competition
The de-icing market is highly competitive. Although the Company is
currently a development stage enterprise and is to date not a major volume
supplier of product within the de- icing industry, the Company's market share is
growing within certain geographic and product segments of the market. The
Company believes that because of ICE BAN(R)'s unique environmental advantage
over salts, the product has the potential to become a major factor within the
industry. NSC uses price, quality, and product performance, as well as related
technical support services, to gain a competitive edge over its competitors'
product offerings. NSC further seeks to achieve competitive advantages by using
advertising, promotional, logistical, and branding strategies. The Company
believes that this will result in increased product identification and that this
will translate into increased market penetration.
The principal products in competition with ICE BAN(R) are salt or
chloride based de-icing and anti-icing products. The Company its ICE BAN(R)
product compete and will be competing primarily against de-icing salt producers.
These producers are primarily large multinational corporations with financial
resources substantially greater than those of the Company. These major companies
have large inventories and storage facilities and have distribution
infrastructure already in place. Those government agencies, currently using salt
already have equipment for salt application Much of this equipment which will
require modification or replacement in order to use ICE BAN(R). Most salt
products are currently comparable or less expensive in price than ICE BAN(R)
(the Company believes that this is in part due to the fact that the effects of
corrosion and other environmental harms that salt produces is not accurately
reflected, if at all, in the price of salt; these harms are thus externalities).
However, the Salt Institute has reported that the chloride salt roadway de-icing
market to be in excess of twenty million (20,000,000) tons per annum. This
translates into a market that approaches one billion dollars ($1,000,000,000)
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annually. Thus, the Company is presented with a large market potential for its
differentiated environmentally friendly products and is seeking to carve out a
significant piece of this market dominated by salts, together with salt's
environmental costs and impacts.
Salt de-icing products cause certain environmental impacts including
corrosion that could be (1) reduced by use of ICE BAN(R) if used in mixes with
salt, or (2) effectively eliminated by use of ICE BAN(R) if used exclusively.
The salt industry currently uses liquid calcium brine (8 to 12 gallons per ton
of salt) to reduce bounce-off and loss due to traffic, and to extend its
effective application temperature and increase ice melting action. Calcium
chloride is the salt of a strong acid and a strong base. ICE BAN(R) is not made
from toxic or hazardous chemicals and it mixes with slat, cinder, sand, ash,
river gravel, or other regionally available products or aggregates now being
used for winter season road maintenance.
While salt currently is ICE BAN(R)'s main competition in the de-icing
and anti-icing of roads, ICE BAN(R) can also be used in conjunction with salt as
well. Because of ICE BAN(R)'s intrinsic properties it can be combined with salt
to form a mixture. Thus, while ICE BAN(R) competes with salt products, ICE
BAN(R) maybe sold to salt de-icing companies for use in their salt de-icing
products. This gives ICE BAN(R) a unique advantage in having the ability to sell
its product to its principal competition without incurring significant
disadvantages.
There is the potential for competition from the "Toth" patent. The
"Toth" patent, otherwise known as the VINASZ patent or '918 (U.S. Patent No.
4,676,918), is a patent which covers an admixture of water and a waste
concentrate of a molasses-based alcohol manufacturing procedure (see the actual
patent for complete and accurate details of its coverage), which concentrated
molasses swill is sold under the name "VINASZ". The ICE BAN(R) product and the
testing and reliability of the ICE BAN(R) product is not based upon the VINASZ
patent. NSC has never marketed any ICE BAN(R) products covered by the VINASZ
patent. Currently, Sears, IMUS, Mountain Products and other entities are
claiming that waste "stillbottom" products are covered by the VINASZ patent and
therefore can be sold by them in competition with ICE BAN(R) products without
denigrating the Company's patents.
In June of 1994, George Janke, a founder of the Company, concluded an
Assignment Agreement and an Agreement of Sale for all rights to the VINASZ
patent from three Hungarians who purportedly were the original inventors of the
patent. Ownership of the patent is now in litigation.
Inflation may impact on the costs of the Company, and the ability of
the Company to pass on cost increases in the form of increased sales prices is
dependant upon market conditions. While the general level of inflation in the
U.S. economy has been at relatively low levels, the Company has experienced, to
date, virtually no significant cost increases. If there is an increase in the
rate of inflation, the Company will reexamine its pricing structure. This may
have an impact on competitive conditions.
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Seasonality and weather conditions may affect competitive conditions.
While the Company has made efforts to extend its business year-round, the
business of the Company remains largely seasonal. Due principally to the
seasonal nature of the Company's de-icing and anti-icing products which depend
upon snow and ice conditions, and in which demand is stronger during the winter
months. The Company's shipment volume is typically higher in the second and
third quarters. The Company has made, and is making, arrangements with its
de-icing and anti-icing suppliers to schedule shipments closer to demand periods
rather than store large amounts of this product in its inventory facilities.
This will proportionately reduce inventory and conserve cash. Periods with less
ice and snow, such as the El Nino season of 1997-98, impact upon revenues.
However, the Company's road stabilization and dust control products are
effective for year round use in many areas of the county and for six to eight
months in the areas which experience ice and snow conditions. The Company plans
to aggressively market and sell dust control and stabilization products in order
to create a year-round revenue base for the Company. The Company's acquired IBNY
in 1997 in part to implement this plan.
RB ULTRA(TM) products' principal competition is calcium chloride, cold
mix asphalt, and various polymers.
(5) Sources and availability of raw materials and the names of principal
suppliers
The Company's major source of raw product comes from the processing of
corn which results in corn by-products (or sometimes termed co-products). As
outlined above, in February 1997, Minnesota Corn Processors ("MCP") of Marshall,
Minnesota and the Company entered into an agreement whereby MCP acquired a right
to purchase a minority interest (1,170,000 shares of the Company, then at the
time known as IBA) in the Company's common stock in exchange for supplies of the
corn by-product which NSC brands as ICE BAN(R). MCP has further benefitted the
Company by assisting in laboratory and field testing and evaluation of ICE
BAN(R) and the Company's road stabilization products. The Company does not
anticipate any shortage of reasonably priced raw materials necessary to produce
ICE BAN(R) because it is a by-product of the processing of corn. While MCP had
been the Company's primary supplier of ICE BAN(R) source material, the Company
no longer uses MCP or any other single entity as a sole supplier of material.
The Company has been in the process of diversifying its supplier base. This
diversification includes using various supply sources to enhance NSC's
negotiating posture relative to each of its suppliers.
The Company presently relies heavily upon the expertise and resources
of Tembec, Inc. as a source for its dust control products and materials. The
Tembec products are made, in part, of raw materials that come from co-products
of the wood processing done by paper mills, including, lignosulphonates, or tree
glue. Used previously as a binder for horse and cattle feed products, the tree
glue contains no toxins, which is in contrast to commonly used chloride salts
and asphaltic emulsions which are toxic. It is the Company's belief that there
are sufficient sources in both variety and quantity to ensure a reliable stream
of raw material for the foreseeable future.
The profitability of the Company's operations is dependent, in part,
upon the prices that it pays for raw materials. Accordingly, to the extent there
is a shortage of any related commodity as
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a result of weather, disease or other factors, such events would tend to
increase the operating costs of the Company and may have a negative impact on
its operations.
(6) Dependence on one or a few major customers
The Company expects that federal, state and municipal governments will
be the largest customer segment for the Company's ICE BAN(R) and Roadbind
products. The Company does not at the present time depend on one or a few major
customers for its product sales.
(7) Patents, trademarks, licenses, franchises, concessions, royalty agreements
or labor contracts, including duration
Overview
Intellectual property rights owned or controlled by the Company through
licenses, along with its marketing and distribution networks, are an integral
part of Company's ability to compete successfully in its chosen markets. They
constitute an essential component of NSC's competitive and strategic advantage.
The Company is the exclusive licensee of certain U.S. patents, including
U.S. Patent Nos. 5,635,101(STEEPWATER), 5,709,812(WHEY), 5,709,813(VCS),
5,932,135(CIP/VCS), 5,919,394(CIP/WHEY), and 5,922,240(BCS). In addition, the
Company is the exclusive licensee of certain pending U.S. patent applications.
The Company is a licensee of certain trademarks, including, ICE
BAN(R)(2,215,700), ICE BAN MAGIC(R)(2,270,214), and the ICE BAN(R) LOGO
(2,230,199). The Company secured the aforementioned rights by virtue of a
license agreement dated August 31, 1996, as amended by an August 31, 1998
agreement, between the Company and IBUSA, which agreement has an initial term of
seven years and is automatically renewable for successive one-year terms unless
canceled or otherwise terminated for cause. See Part I, Item 1. (b) Business of
Issuer. (13) Risk Factors. 6. Risk of Effective Failure of Certain Intellectual
Property Rights and 13. Uncertainty Regarding Protection of Proprietary Rights.
IBUSA has filed a U.S. Patent application for certain proprietary
products related to dust control and method. The application was filed May 12,
1998. This patent has been assigned to the Company on an exclusive license basis
for use the United States.
Patent Information
The abstract of each patent is provided below as a summary of the
contents of each patent's coverage.
(1) Patent Number 5,635,101 (Wet Milling Processing; By-Products of Corn)
Date of Patent: Jun. 3, 1997. Disclosed is a new and improved, environmentally
acceptable nd negligibly corrosive de-icing composition comprising a by-products
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from a wet milling process of corn, which by-products are biodegradable. The
invention also relates to the use of a de-icing composition in a manner that
helps to reduce the buildup of snow and ice on roads, bridges and other outdoor
surfaces.
(2) Patent Number 5,709,812 (Whey; By-Products of Cheese Making)
Date of Patent: Jan. 20, 1998. Disclosed is a new and improved,
environmentally acceptable and negligibly corrosive de-icing composition
comprising by-products from the production of cheese from various milks. In
particular, the by-products are the liquids that remain after the coagulated
cheese has been removed from the milks, said liquids being commonly known in the
cheese making industry as "whey". The invention also relates to the use of a
de-icing composition in a manner that helps to reduce the buildup of snow and
ice on roads, bridges and other outdoor surfaces.
(3) Patent Number 5,709,813
(Vintners' Condensed Solubles; wine, fruits, and grains)
Date of Patent: Jan 20, 1998. Disclosed is a new and improved,
environmentally acceptable and negligibly corrosive de-icing composition
comprising by-products from the fermentation and production of wine from grapes
and other fruit, as well as from grains. In particular, the by-products are the
solubles that settle during the fermentation process, said solubles being
commonly known in the wine making industry as "Vintners' Condensed Solubles",
and less technically known as "wine bottoms" and "lees". The invention also
relates to the use of a de-icing composition in a manner that helps to reduce
the buildup of snow and ice on roads, bridges and other outdoor surfaces.
(4) Patent Number 5,919,394 (Whey; By-Products of Cheese Making)
Date of Patent: Jul. 6, 1999. This patent is subject to a terminal
disclaimer. Disclosed is a new and improved, environmentally acceptable and
negligibly corrosive de-icing composition comprising by-products from the
production of cheese from various milks. The present invention is directed to
the liquids that remain after the coagulated cheese has been removed from the
milks, said liquids being commonly known in the cheese making industry as
"whey". The invention also relates to the de-icing composition in a manner that
helps to reduce the buildup of snow and ice on roads, bridges and other outdoor
surfaces. The invention also relates to the a corrosion inhibiting composition
comprising whey.
(5) Patent Number 5,922,240 (Brewers' Condensed Solubles)
Date of Patent: Jul. 13, 1999. Disclosed is a new and improved,
environmentally acceptable and negligibly corrosive de-icing composition
comprising brewers' condensed solubles produced, for example, as by-products
from a commercial beer brewing process, which by-products are biodegradable. The
invention also relates to the use of a de-icing composition to reduce the
buildup of snow and ice on roads, bridges and other outdoor surfaces.
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(6) Patent Number 5,932,135
(Vintners' Condensed Solubles; wine, fruits, and grains)
Date of Patent: Aug. 3, 1999. This patent is subject to a terminal
disclaimer. Disclosed is a new and improved, environmentally acceptable and
negligibly corrosive de-icing composition comprising by-products from the
fermentation and production of wine from grapes and other fruit, as well as from
grains. In particular, the by-products are the solubles that settle during the
fermentation process, said solubles being commonly known in the wine making
industry as "Vintners' Condensed Solubles", and less technically known as "wine
bottoms" and "lees". The invention also relates to a corrosion-inhibiting
composition which comprises vintner's condensed solubles. Other embodiments and
uses of the invention will be apparent to those skilled in the art from
consideration of the specific practice of the invention disclosed herein.
Trademarks
The Company is a licensee of certain trademarks, including, "ICE BAN",
"ICE BAN MAGIC", and the "ICE BAN LOGO" that resembles a caution sign. The
Company has a non-exclusive right and license to use such trademarks. These
trademarks were obtained by virtue of the "Amendment to Exclusive License Area
Agreement" dated August 31, 1998, between IBA and IBUSA. See Part I, Item 7
"Certain Relationships and Related Transactions" and Part I, Item 5, "Directors,
Executive Officers, Promoters and Control Persons".
The Company through its Roadbind America, Inc. subsidiary has filed to
register the trademark RB ULTRA(TM). The Company, through licensing
arrangements, with IBUSA has use of a registered logo(s), as well as the use of
trademarks ICE BAN(R), ICE BAN MAGIC(R), and TEMBIND(R).
Licenses of Dust Control and Road Stabilization Products
The Company is the United States distributor for the TEMBIND(R) product
manufactured by Tembec, Inc. This was accomplished by the acquisition of IBNY by
IBA. TEMBIND(R) is a biodegradable, non-corrosive dust control and road
stabilization product, specified for use by the United States government in
national parks and military installations. TEMBIND(R) is also distributed across
the U.S. to highway superintendents and departments of transportation.
TEMBIND(R) is now marketed by the Company under the RB ULTRA(TM) Products
trademark.
The right to sell and deliver TDS (liquid lignosulfonate or other
products for sale as dust control on roads and parking lots), i.e. TEMBIND(R),
was granted initially to Ice Ban, Inc. (herein also referred to as IBNY)
pursuant to a "Distributor Agreement" between IBNY and Tembec, Inc.
of Quebec, Canada.
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Licenses of ICE BAN(R) Related Patents and Trademarks
On August 31, 1996, IBUSA for consideration of one hundred thousand
dollars ($100,000) granted the Company the use of ICE BAN(R) patents and
trademarks in an exclusive license agreement for the United States, excluding
only counties in the State of New York north of the 42nd parallel and also
excluding Erie County, Pennsylvania. IBUSA, is a Florida corporation controlled
by Mr. George Janke, as trustee. George Janke was then Vice President and
Director of IBA. IBUSA acquired the sole rights to the use of certain patent
rights relating to roadway de-icing and anti-icing products and their related
compositions. In consideration for obtaining the licensing agreement, and after
having contributed five thousand dollars ($5,000) in cash, the Company issued
six million four-hundred thousand shares (6,400,000) to Mr. Warren Johnson, a
former President and Director of the Company and a former officer of IBUSA, and
five million eight-hundred thousand shares (5,800,000) to Mr. George Janke, as
trustee, for the benefit of certain members of Mr. Janke's family. Prior to the
August 31, 1996 execution of the licensing agreement described below, on August
16, 1996, in consideration of obtaining this licensing agreement concerning
intellectual property rights related to de-icing and anti-icing products, and
five thousand dollars ($5,000), the Company issued founders shares to George
Janke, in his capacity as trustee for certain family members, and to Warren D.
Johnson, Jr. George Janke, as trustee, received five million eight- hundred
thousand (5,800,000) shares of common stock and Warren D. Johnson, Jr. received
six million four-hundred thousand (6,400,000) shares of common stock. On this
date 12.2 million shares of stock were issued and this was done pursuant to
ss.4(2) of the Securities Act of 1933. This issuance was also done pursuant to a
form M11 which was forwarded to the State of New York on September 19, 1996 and
was filed by the State of New York (i.e. received) on September 20, 1996. See
Part II, Item 4. "Recent Sales of Unregistered Securities" and Part II, Item 7.
"Certain Relationships and Related Transactions". The license agreement term is
for seven years with one-year automatic renewals thereafter. See Part III,
Exhibits; see also Part I, Item 1. -(b) Business of Issuer, (13) Risk Factors,
6. Risk of Effective Failure of Certain Intellectual Property Rights and 13.
Uncertainty Regarding Protection of Proprietary Rights. All rights to the
excluded territory were reverted to IBA on July 29, 1997 as a result of the
acquisition of IBNY by IBA in 1997 and an amendment to exclusive license area
agreement executed on August 31, 1998, between IBA and IBUSA. See Part I, Item
7, "Certain Relationships and Related Transactions" and Part I, Item 5,
"Directors, Executive Officers, Promoters and Control Persons".
The August 31, 1996 contract was then amended on August 31, 1998. It
was captioned "Amendment to Exclusive License Area Agreement". This amendment
extended IBA's license to cover the entire U.S. The amendment also granted
certain rights to trademarks. These trademark rights were identified and listed
as: (1) "ICE BAN", (2) "ICE BAN MAGIC" and (3) the ICE BAN LOGO. These
trademarks are "for [sic] anti-icing and de-icing composition for use on
exterior surfaces." See Part I, Item 7 Certain Relationships and Related
Transactions and Part I, Item 5, Directors, Executive Officers, Promoters and
Control Persons.
(8) Government Approval of Principal Products or Services
Sales of ICE BAN(R) products have, to date, been slow primarily due to
the numerous testing requirements by municipalities and departments of
transportation (slow sales were also due to two consecutive years of very
minimal snow and ice conditions in the Snow Belt). NSC expects the
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testing to continue; however, many of the departments of transportation and
environmental agencies throughout the Snow Belt have already approved the use of
ICE BAN(R) products.
(9) Governmental Regulations
The Company is subject to various laws and governmental regulations
applicable to businesses generally. The Company's products are also subject to
certain standards, laws, and regulations. The Company believes it is currently
in compliance with such laws and that such laws do not have a material impact on
its operations.
(10) Research and Development Activities
The Company has spent a majority of its time involved in developing its
marketing and distribution structure. The Company has engaged certain testing
facilities and organizations, described elsewhere herein, to conduct product
performance and environmental impact tests. NSC's research and development costs
are not borne directly by its customers.
(11) Environmental Laws
NSC's products are based upon natural ingredients gleaned from
agricultural processing. The Company's strategic focus has always been to
promote environmentally friendly products. NSC believes that its ICE BAN(R)
products and Roadbind products are safe for the environment. The Company
believes that the costs and effects of any environmental laws would actually
harm NSC's competition to a larger extent than it would harm the Company.
NSC is subject to environmental laws concerning safe water, air, and
other environmental protection laws on the federal, state, and local level. The
Company does not foresee any problems, nor has it measured any material cost or
effect, in managing compliance with such to date.
(12) Employees
The Company currently employs fourteen (14) employees of which ten (10)
are full time employees and four (4) of which are salespersons. The full time
employees receive annual salaries and the salespersons are compensated by a base
salary plus commissions.
(13) Risk Factors
Before making an investment decision, prospective investors in the
Company's common stock should carefully consider, along with other matters
referred to herein, the following risk factors inherent in and affecting the
business of the Company.
1. History of Losses. Although the Company has been in business since
August 14, 1996, the Company is still a development stage company. As of July
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31, 1999, the Company had total assets of $1,410,392, a net loss of $2,764,547
on revenues of $2,100,199 and stockholders deficit of $2,764,547. As of July 31,
1998, the Company had total assets of $2,426,918, a net loss of $2,596,930 on
revenues of $1,994,415 and stockholders deficit of $2,586,718. The total deficit
accumulated during development stage since inception to July 31, 1999 is
$5,242,043. Due to the Company's operating history and limited resources, among
other factors, there can be no assurance that profitability or significant
revenue will occur in the future. Moreover, the Company expects to continue to
incur operating losses through at least the next twelve months, and there can be
no assurance that losses will not continue thereafter. The ability of the
Company to establish itself as a going concern is dependent upon the receipt of
additional funds from operations or other sources to continue those activities.
The Company's auditor has expressed in his most recent audit report substantial
doubt that the Company can continue as a going concern. See Part F/S. The
Company is subject to all of the risks inherent in the operation of a
development stage business and there can be no assurance that the Company will
be able to successfully address these risks.
2. Minimal Assets. Working Capital and Net Worth. As of July 31, 1999,
the Company's total assets in the amount of $1,410,392, consisted, principally,
of the sum of $ 78,535 in accounts receivable-trade, $63,954 in prepaid expenses
and $614,280 in inventory. As a result of its minimal assets and a net loss from
operations, in the amount of $2,764,547, there can be no assurance that the
Company will be able to remain solvent over the next twelve (12) months.
Further, there can be no assurance that the Company's financial condition will
improve. Even though management believes, without assurance, that it may obtain
sufficient capital with which to implement its business plan (plan of operation)
and strategy, the Company is not expected to proceed with its business plan and
strategy without an infusion of capital or a pronounced rise in sales. In order
to obtain additional equity financing, management may be required to dilute the
interest of existing shareholders or forego a substantial interest of its
revenues, if any.
3. Need for Additional Capital. Without an infusion of capital or
profits from operations, the Company is not expected to proceed with its
expansion as planned. Accordingly, the Company is not expected to overcome its
history of losses unless sales reach above the current levels and/or additional
equity or debt financing is obtained. While the Company anticipates the receipt
of increased operating revenues, such increased revenues cannot be assured.
Further, the Company may incur significant unanticipated expenditures which
deplete its capital at a more rapid rate because of among other things, the
stage of its business, its limited personnel and other resources and its lack of
a widespread customer base and market recognition. Because of these and other
factors, management is presently unable to predict what additional costs might
be incurred by the Company beyond those currently contemplated. The Company has
no identified sources of additional capital funds other than those otherwise
mentioned herein, and there can be no assurance that resources will be available
to the Company when needed.
4. Dependence on Management. The possible success of the Company is
expected to be largely dependent on the continued services of its President,
Richard Jurgenson and the other executive officers. Virtually all decisions
concerning the marketing, distribution and sales of the Company's products and
services will be made or significantly influenced by the Company's
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officers. These officers are expected to devote only such time and effort to the
business and affairs of the Company as may be necessary to perform their
responsibilities as executive officers. The loss of the services of any of these
officers would adversely affect the conduct of the Company's business and its
prospects for the future.
5. Limited Distribution Capability. The Company's success depends in
large part upon its ability to distribute its products and related services. As
compared to the Company, which lacks the financial, personnel and other
resources required to compete with its larger, better-financed competitors,
virtually all of the Company's competitors or potential competitors have much
larger budgets for securing customers. Although the Company has entered into
agreements for the transportation, storage, and distribution of its products,
these actions have produced only limited revenues to date. Depending upon the
level of operating capital or funding obtained by the Company, management
believes, without assurance, that it will be possible for the Company to attract
additional customers for its products and services. However, in the event that
only limited funds are available from operations or obtained, the Company
anticipates that its limited finances and other resources may be a determinative
factor in the decision or ability to go forward with its plan of operation and
strategy. Until such time, if ever, as the Company is successful in generating
sufficient cash flow from operations or securing additional capital, of which
there is no assurance, it intends to continue marketing its products through its
current distribution arrangements. However, the fact that these arrangements
have not thus far produced significant revenue may adversely impact the
Company's chances for success.
6. Risk of Effective Failure of Certain Intellectual Property Rights.
The Company's ability to continue its business is at significant risk if the
terms or conditions of its licensing agreement, and amendment to such, with
IBUSA are rendered or construed in such a manner that the license of
intellectual property rights to the Company by IBUSA is effectively terminated.
Therefore, all potential investors are strongly encouraged to read this
agreement attached hereto. See Part III, Exhibits; see also Part I, Item 1. -(b)
Business of Issuer, 13. Uncertainty Regarding Protection of Proprietary Rights.
7. Weather and Climate Changes. The Company's sales are to a
significant extent dependent upon, and related to, weather conditions and
climate trends. Specifically, variation in actual and forecasted snow and ice
conditions will have an effect upon the sales of ICE BAN(R) products. Variations
in wind and rainfall amounts may also have an impact upon the sales of Roadbind
products, but this variation or impact has not been analyzed and is deemed
insignificant by management.
8. Significant Customer and Product Concentration. To date, a limited
number of customers and distributors have accounted for substantially all of the
Company's revenues with respect to product sales. Although the company entered
into distribution agreements, there is no assurance that the Company will be
able to obtain adequate distribution of its products to the intended end user.
The Company's ability to achieve revenues in the future will depend in
significant part upon its ability to obtain additional customers and users. The
Company will also be required to maintain relationships with and provide support
to existing and new distributors. As a result, any cancellation,
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reduction or delay in transportation or supply may materially adversely affect
the Company's business, financial condition and results of operations. There can
be no assurance that the Company's revenues will increase in the future or that
the Company will be able to support or attract customers.
9. Fluctuations in Results of Operations. The Company has experienced
and may in the future experience significant fluctuations in revenues, gross
margins and operating results. As with many developing businesses, the Company
expects that some orders may not materialize or delivery schedules may have to
be deferred as a result of changes in customer requirements, among other
factors. As a result, the Company's operating results for a particular period to
date have been and may in the future be materially adversely affected by a
delay, rescheduling or cancellation of even one purchase order. Moreover,
purchase orders are often received and accepted substantially in advance of
shipment, and the failure to reduce actual costs to the extent anticipated or an
increase in anticipated costs before shipment could materially, adversely affect
the gross margins for such order, and as a result, the Company's results of
operations. A delay in a shipment near the end of a particular quarter, due, for
example, to an unanticipated shipment rescheduling, to cancellations or
deferrals by customers or to unexpected difficulties in obtaining sufficient
supplies, may cause net revenues in a particular quarter to fall significantly
below the company's expectations and may materially adversely affect the
Company's operating results for such quarter.
A large portion of the Company's expenses are fixed and difficult to
reduce should revenues not meet the Company's expectations, thus magnifying the
material adverse effect of any revenue shortfall. Furthermore, announcements by
the Company or its competitors of new products and technologies could cause
customers to defer purchases of the Company's products or a reevaluation of any
products then under development, which would materially adversely affect the
Company's business, financial condition and results of operations. Additional
factors that may cause the Company's revenues, gross margins and results of
operations to vary significantly from period to period include: product
development, patent processing, supplier efficiencies, costs and capacity and
the timing of availability of new products by the Company or its customers,
usage of different distribution and sales channels; customization of road
maintenance delivery systems; and general economic and political conditions. In
addition, the Company's results of operations are influenced by competitive
factors, including the pricing and availability of and demand for, competitive
products such as de-icing salt. All of the above factors are difficult for the
company to forecast, and these or other factors could materially adversely
affect the Company's business, financial condition and results of operations. As
a result, the Company believes that period-to-period comparisons are not
necessarily meaningful and should not be relied upon as indications of future
performance.
10. Potential for Changes or Unfavorable Interpretation of Government
Regulation. The Company's products are subject to various federal, state, and
local laws and regulations. Specifically, the regulation of highway and road
maintenance products and technologies, along with their related delivery systems
and methods, may increase to an extent, or move in a direction, in which the
Company would be forced to incur increased regulatory compliance costs. Such
costs could have a material impact on the Company's business, financial
condition and results of operation. The Company's main competition, that is
companies that provide salt and salt related services concerning de-icing and
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anti-icing, may be impacted by such latent risk differently, and upon any such
manifested change in regulation, may be impacted by such in a different manner
and in a different degree than the Company. This difference in regulatory impact
may alter the competitive situation of the Company.
Because the regulatory environment in which the Company operates is
subject to change, regulatory changes, which are affected by political, economic
and technical factors, could furthermore significantly impact the Company's
operations by restricting development efforts by the Company and its customers,
making current products obsolete, making the delivery of road maintenance
products and services more costly or increasing the opportunity for additional
competition. Any such regulatory changes could have a material adverse effect on
the Company's business, financial condition and results of operations.
Furthermore, the Company might deem it necessary or advisable to alter or modify
its products to operate in compliance with such regulations. Such modifications
could be extremely expensive and, especially if subject to regulatory review and
approval, time-consuming.
11. No Assurance of Product Quality, Performance and Reliability. The
Company expects that its distributor and their customers will continue to
establish demanding specifications for quality, performance and reliability.
Although the Company attempts to only deal with suppliers who adhere to good
processing and manufacturing practice standards, there can be no assurance that
problems will not occur in the future with respect to quality, performance,
reliability and price. If such problems occur, the Company could experience
increased costs, delays in or cancellations or rescheduling of orders or
shipments and product returns and discounts, any of which would have a material
adverse effect on the Company's business, financial condition or results of
operations.
12. Future Capital Requirements. The Company's future capital
requirements will depend upon many factors, including any necessary development
of new de-icing and anti-icing technologies, requirements to maintain adequate
storage and transportation facilities, the progress of the Company's research
and development efforts, if any, expansion of the Company's marketing and sales
efforts and the status of competitive products and services. The Company
believes that it will require additional funding in order to fully exploit its
plan for operations. There can be no assurance, however, that the Company will
secure such additional financing. There can be no assurance that any additional
financing will be available to the Company on acceptable terms, or at all. If
additional funds are raised by issuing equity securities, further dilution to
the existing stockholders may result. If adequate funds are not available, the
Company may be required to delay, reduce or eliminate any research and
development or supply or distribution programs or obtain funds through
arrangements with partners or others that may require the Company to relinquish
rights to certain of its existing or potential products, rights, or other
assets. Accordingly, the inability to obtain such financing could have a
material adverse effect on the Company's business, financial condition and
results of operations.
13. Uncertainty Regarding Protection of Proprietary Rights. The Company
attempts to protect its intellectual property rights through patents,
trademarks, secrecy agreements, trade secrets and a variety of other measures.
However, there can be no assurance that such measures will provide
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adequate protection for the Company's trade secrets or other proprietary
information, that additional disputes with respect to the ownership of its
intellectual property rights will not arise, that the Company's trade secrets or
proprietary technology will not otherwise become known or be independently
developed by competitors or that the Company can otherwise meaningfully protect
its intellectual property rights. There can be no assurance that any patent
licensed to the Company will not be invalidated, circumvented or challenged,
that the rights granted thereunder will provide competitive advantages to the
Company or that any of the Company's pending or future patent applications will
be issued with the scope of the claims sought by the Company, if at all.
Furthermore, there can be no assurance that others will not develop similar
products, duplicate the Company's products or design around the patents owned by
the Company or that third parties will not assert further intellectual property
infringement claims against the Company. In addition, there can be no assurance
that foreign intellectual property laws will adequately protect any rights the
Company may assert in the future, if at all, with regard to the Company's
intellectual property rights, if any, abroad. The failure of the Company to
protect its proprietary rights could have a material adverse effect on its
business, financial condition and results of operations.
Future litigation, notwithstanding the Company's current litigation,
may be necessary to protect the Company's intellectual property rights and trade
secrets, to determine the validity of and scope of the proprietary rights of
others or to defend against claims of infringement or invalidity. Such
litigation could result in substantial costs and diversion of resources and
could have a material adverse effect on the Company's business, financial
condition and results of operations. There can be no assurance that
infringement, invalidity, right to use or ownership claims by third parties or
claims for indemnification resulting from infringement claims will not be
asserted in the future. If any claims or actions are asserted against the
Company, the Company may seek to obtain a license under a third party's
intellectual property rights. There can be no assurance, however, that a license
will be available under reasonable terms or at all. In addition, should the
Company decide to litigate such claims, such litigation could be extremely
expensive and time consuming and could materially adversely affect the Company's
business, financial condition and results of operations, regardless of the
outcome of the litigation.
14. Ability to Grow. The Company expects to grow through strategic
acquisitions, internal growth and by expansion of its current relationships.
There can be no assurance that the Company will be able to create a greater
market presence, or if such market presence is created, to expand its market
presence or successfully enter other geographic or product markets. The ability
of the Company to grow will depend on a number of factors, including the
availability of working capital to support such growth, existing and emerging
competition, one or more qualified strategic alliances and the Company's ability
to maintain sufficient profit margins in the face of pricing pressures. The
Company must also manage costs in a changing regulatory environment, adapt its
infrastructure and distribution network to accommodate growth within its market.
The Company also plans to expand its business, in part, through
acquisitions. Although the Company will continuously review potential
acquisition candidates, it has not entered into any agreement, understanding or
commitment with respect to any additional acquisitions at this time. There can
be no assurance that the Company will be able to successfully identify suitable
acquisition
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candidates, complete acquisitions on favorable terms, or at all, or integrate
acquired businesses into its operations. Moreover, there can be no assurance
that acquisitions will not have a material adverse effect on the Company's
operating results, particularly in the fiscal quarters immediately following the
consummation of such transactions while the operations of the acquired business
are being integrated into the Company's operations. Once integrated,
acquisitions may not achieve comparable levels of revenues, profitability or
productivity as at the level then existing or otherwise perform as expected. The
Company is unable to predict whether or when any prospective acquisition
candidate will become available or the likelihood that any acquisitions will be
completed.
The Company has engaged in preliminary discussions with George Janke
regarding the possible acquisition of IBUSA. Such discussions to date have not
yielded an agreement. The Company has also been in further contact with Pat
Robertson's representatives concerning possible future funding and investment
(in addition to his past investments in the Company which are herein disclosed).
Such overtures and preliminary discussions, if any, regarding possible future
funding and investment in the Company have not, to date, yielded any type of
agreement or understanding other than expressing interest and the potential of
conducting future substantive negotiations. Any such future substantive
negotiations, in any case, may or may not result in the Company receiving
adequate funding or assistance, if any.
The Company will be competing for acquisition and expansion
opportunities with entities that have substantially greater resources than the
Company. In addition, acquisitions involve a number of special risks, such as
diversion of management's attention, difficulties in the integration of acquired
operations and retention of personnel, unanticipated problems or legal
liabilities, and tax and accounting issues, some or all of which could have a
material adverse effect on the Company's results of operations and financial
condition.
15. Competition. The markets the Company operates in are characterized
by high levels of competition, with several major companies involved, as well as
smaller regional and local companies. The Company's primary concern is with its
larger competitors. The Company will be competing with these larger competitors
in national, regional and local markets. The Company may also at some point in
the future engage its competition and enter markets in other countries when, if
at all, it becomes feasible and appropriate.
In addition, the Company may encounter substantial competition from new
market entrants. Many of the Company's competitors or potential competitors have
significantly greater name recognition and have greater marketing, financial and
other resources than the Company. There can be no assurance that the Company
will be able to complete effectively against such competitors in the future.
16. Possible Adverse Effect of Fluctuations in the General Economy and
Business of Customers. Historically, the general level of economic activity has
significantly affected the demand for new technology products. ICE BAN(R)
products and Roadbind products are new and innovative methods for road
maintenance. While they provide an environmentally safer alternative to
traditional road stabilization and icing control products, they will often
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demand of its customers certain costs of switching over to this new technology.
Such costs may include the modification of traditional delivery systems (i.e.
specialized vehicles) and information costs related to product attributes and
servicing requirements. Therefore, under certain economic conditions, its
customers may prefer the "safety" of the traditional methods, instead of
incurring additional cost risk in switching to the Company's products. The
pricing structure of the Company's products relative to its competitors, to a
large extent, obviously determines the direction of switching, either to the
Company's products or away from such and into salt-based products. Such
switching could become magnified and pronounced in a general economic decline or
a decline in the economic conditions of its customer firms and municipalities.
17. Lack of Working Capital Funding Source. Other than revenues from
the sale of its products, which revenues have yet to produce any net profit, the
Company has no current source of working capital funds other than otherwise
mentioned herein, and should the Company be unable to secure additional
financing on acceptable terms, its business, financial condition, results of
operations and liquidity would be materially adversely affected.
18. Uncertainty of Market Acceptance. The future operating results of
the Company depend to a significant extent upon the growth in sales of the
Company's products. There can be no assurance that the Company has the ability
to introduce any new propriety products and services into the marketplace which
will achieve the market penetration and acceptance necessary for the Company to
grow and become profitable on a sustained basis, especially given the fierce
competition that exists from companies more established and well financed than
the Company. The Company, however, believes that the environmental advantages
offered by its products have the potential to alter the demand structure within
the market to the Company's advantage. The Company believes that increased
environmental awareness, interest, and political pressure will operate to the
Company's long-run advantage.
To date, substantially all of the Company's product sales have been to
a limited number of customers. The Company's future results of operations will
be dependent in significant part on its ability to penetrate markets in the
United States and possibly in the future, if at all, in foreign countries in
which the Company has not yet established a meaningful presence. There can be no
assurance that the Company will be successful in penetrating these additional
markets.
19. Potential Year 2000 Problems. The "Year 2000" issue affects the
Company's installed computer systems, network elements, software applications,
and other business systems that have time-sensitive programs that may not
properly reflect or recognize the year 2000. Because many computers and computer
applications define dates by the last two digits of the year, "00" may not be
properly identified as the year 2000. This error could result in miscalculations
or system failures. The Year 2000 issue may also affect the systems and
applications of the Company's suppliers. There can be no assurance that systems
operated by third parties providing services to the Company will be Year 2000
compliant. See Part I, Item 2. "Management's Discussion and Analysis or Plan of
Operation - Impact of the Year 2000 Issue."
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20. No Dividends. While payments of dividends on the Common Stock
rests with the discretion of the Board of Directors, there can be no assurance
that dividends can or will ever be paid. Payment of dividends is contingent
upon, among other things, future earnings, if any, and the financial condition
of the Company, capital requirements, general business conditions and other
factors which cannot now be predicted. It is highly unlikely that cash dividends
on the Common Stock will be paid by the Company in the foreseeable future.
21. No Cumulative Voting. The election of directors and other questions
will be decided by a majority vote. Since cumulative voting is not permitted and
a majority of the Company's outstanding Common Stock constitute a quorum,
investors who purchase shares of the Company's Common Stock may not have the
power to elect even a single director and, as a practical matter, the current
management will continue to effectively control the Company.
22. Control by Present Shareholders. The present shareholders of the
Company's common stock will, by virtue of their percentage share ownership and
the lack of cumulative voting, be able to elect the entire Board of Directors,
establish the Company's policies and generally direct its affairs. Accordingly,
persons investing in the Company's Common Stock will have no significant voice
in Company management, and cannot be assured of ever having representation on
the Board of Directors. See Part I, Item 4. "Security Ownership of Certain
Beneficial Owners and Management."
23. Potential Anti-Takeover and Other Effects of Issuance of Preferred
Stock May Be Detrimental to Common Shareholders. The Company is authorized to
issue shares of preferred stock. ("Preferred Stock"). The issuance of Preferred
Stock does not require approval by the shareholders of the Company's Common
Stock. The Board of Directors, in its sole discretion, has the power to issue
shares of Preferred Stock in one or more series and to establish the dividend
rates and preferences, liquidation preferences, voting rights, redemption and
conversion terms and conditions and any other relative rights and preferences
with respect to any series of Preferred Stock. Holders of Preferred Stock may
have the right to receive dividends, certain preferences in liquidation and
conversion and other rights; any of which rights and preferences may operate to
the detriment of the shareholders of the Company's Common Stock. Further, the
issuance of any shares of Preferred Stock having rights superior to those of the
Company's Common Stock may result in a decrease in the value of the market price
of the Common Stock, provided a market exists, and additionally, could be used
by the Board of Directors as an anti-takeover measure or device to prevent a
change in control of the Company. See Part I, Item 1. "Description of Securities
Description of Preferred Stock."
24. Risk of De-Listing from Market and Potential Illiquidity in Trading
of Common Stock. The Company's common stock is traded on the NASDAQ
Over-the-Counter Bulletin Board (OTC Bulletin Board). The Company's stock symbol
is ICEB. The Company makes no assurances whether NSC will be able to maintain
the requirements necessary for such listing. The Company could become de-listed
from such market if certain regulatory requirements are not met; such regulatory
requirements which could such risk de-listing include the timing of the filing
of this SEC disclosure document (Form 10-SB). Any such de-listing could affect
the liquidity of the market for the Company's common stock. This could result in
higher transaction costs in buying or selling the
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Company's common stock and the inability to find a buyer or seller to unwind or
reverse positions in the Company's common stock. There could also be potential
problems involving the Company's ability to attract investment capital, secure
debt financing, or the ability to otherwise implement its strategies, business
plan, plan of operations, etc. However, in the event of de-listing, the Company
anticipates that its common stock will trade on the Over-the-Counter Pink
Sheets.
(c) Reports to Security Holders.
The Company sends out annual reports to its shareholders that include
audited financial statements. The public may read and copy any materials the
Company files with SEC at the SEC's Public Reference Room at 450 Fifth Street,
NW Washington, D.C. 20549. The public may obtain information on the operation of
the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also
maintains an Internet site that contains reports, proxy and information
statements, and other information regarding issuers that file electronically
with the SEC; the address of this site is http://www.sec.gov. The Company's
Internet address is http://www.naturalsolutionscorp.com.
Item 2. Management's Discussion and Analysis or Plan of Operation.
Business Mission
NSC's mission is to expand the market share of its environmentally
friendly, anti-corrosive products, which replace or improve current technologies
that are environmentally damaging and corrosive to the infrastructure of
elevated highways and bridges. NSC seeks to continue its research, testing and
development programs to identify new and unique products and technologies for
the commercialization of environmentally friendly products, produced from
renewable, recyclable, low cost waste base stock.
Item 2. Management's Discussion and Analysis or Plan of Operation.
Introduction
In Management's Discussion and Analysis, Management explains the general
financial condition and the results of operations for the Company and its
subsidiaries including:
What factors affect the Company's business,
What the Company's earnings and costs were in 1998 and 1999,
Why those earnings and costs were different from the year before,
Where the Company's earnings and costs came from,
How the above discussion affects the Company's overall financial condition,
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What the Company's expenditures for capital projects were from 1996 through 1999
and what we expect them to be in 1999 through 2001, and
Where cash is projected to come from to pay for future expenditures.
When reading Management's Discussion and Analysis, it may be helpful to refer to
the Company's Annual Report which presents the results of our operations for
1996 through 1999. In Management's Discussion and Analysis, we analyze and
explain the annual changes in the specific line items in the Consolidated
Statements of Income. This analysis may be important to an investor making
decisions about the Company.
Forward-Looking Statements
This Form 10-SB includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. All statements, other
than statements of historical facts, included or incorporated by reference in
this Form 10-SB which address activities, events or developments which the
Company expects or anticipates will or may occur in the future, including such
things as future capital expenditures (including the amount and nature thereof),
demand for the Company's products and services, expansion and growth of the
Company's business and operations, and other such matters are forward-looking
statements. These statements are based on certain assumptions and analyses made
by the Company in light of its experience and its perception of historical
trends, current conditions and expected future developments as well as other
factors it believes are appropriate in the circumstances. However, whether
actual results or developments will conform with the Company's expectations and
predictions is subject to a number of risks and uncertainties, general economic
market and business conditions; the business opportunities (or lack thereof)
that may be presented to and pursued by the Company; changes in laws or
regulation; and other factors, most of which are beyond the control of the
Company. Consequently, all of the forward-looking statements made in this Form
10-SB are qualified by these cautionary statements and there can be no assurance
that the actual results or developments anticipated by the Company will be
realized or, even if substantially realized, that they will have the expected
consequence to or effects on the Company or its business or operations. The
Company assumes no obligations to update any such forward-looking statements.
OVERVIEW
The Company was formed on August 14,1996, as a Nevada Corporation, to market
several agricultural co-products for use as anti-icing, de-icing, road
stabilization and dust control agents.
The company has been a development stage company since inception.
On August 31,1996, Ice Ban America Inc., entered into an exclusive licensing
agreement with Ice Ban, USA, Inc., to exploit certain patents and patents
pending and trademarks assigned to Ice Ban USA, Inc. The patents cover the use
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<PAGE>
of agricultural co-products as road de-icing and anti-icing products. The
product is marketed under the name ICE BAN.
The Company also owns, as a result of the acquisition of Ice Ban, Inc. by Ice
Ban America, Inc, the exclusive United States license agreement and rights to
market TDS, a dust control product from Tembec, Inc., a Canadian company. The
Company has established the trademark name of RB ULTRA(TM) Products in the
United States and have begun to market these products. RB ULTRA(TM) Products are
biodegradable, environmentally friendly, non-toxic, non-corrosive dust control
and road stabilization products for use in the maintenance of unpaved roads.
Both products are made of lignosulphonates, or tree glue, a co-product of the
papermaking process..
RESULTS OF OPERATIONS
Fiscal 1999 Compared to Fiscal 1998
Net Sales. Net Sales for the 52 weeks in fiscal year 1999 for continuing
operations by the Company were approximately $2.1 million, or approximately
$40,000 per week. Net sales for the fiscal year 1998 (50 weeks) were
approximately $1.9 million or $36,000 per week Of the net sales of approximately
$2.1 million for fiscal year 1999, approximately $1.35 million was attributed to
the expanded use of ICE BAN(R) de-icing and anti-icing products, and
approximately $0.652 million was attributed to the expanded use of RB ULTRA(TM)
Products road stabilization and dust control products.
Cost of Products Sold. The Company's cost of product sold in fiscal 1999 was
approximately $1.6 million (or approximately 76% of Net Sales), while the cost
of product sold for 1998 was approximately $1.6 million (or 82% of net sales).
Included in the $1.6 million cost of product sold for fiscal 1999 is $0.427
million for stock issued in exchange for product (see Note 6. Major
Customers/Suppliers and Note 10 Supplemental Cash Flow Information to Notes to
Consolidated Financial Statements.
Selling and administrative expenses. Selling and administrative expenses for the
fiscal year 1999 were approximately $2.4 million (or approximately 116% of net
sales), while selling and administrative expenses for 1998 were approximately
$2.9 million (or approximately 153% of net sales).
Net Income (Loss). The Company had a net loss of approximately $2.0 million for
fiscal year 1999 of approximately as compared to a net loss of approximately
$2.6 million for the fiscal year 1998. Included in the net loss for fiscal year
1999 was non-cash equity transactions of approximately $0.43 million which
included recognizing an aggregate of $0.11 million in option based compensation
and $.32 million for exchange for product and services.
LIQUIDITY AND CAPITAL RESOURCES
In the fiscal year ended 1999, operating activities consumed approximately $0.25
million in cash ascompared to approximately $1.4 million of cash provided in the
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<PAGE>
1998 fiscal year. This decrease in cash consumed from fiscal year 1998 to 1999
reflects increases in accounts payable of approximately $0.834 million
reflecting delays in payment to vendors. Also non-cash charges and other changes
in working capital reduced cash consumed by $1.13 million.
Capital expenditures required for operation were approximately $0.01
million for fiscal year 1999. The company anticipates expenditures for expansion
of computer information system during fiscal years 1999 and 2000 to better
prepare it for future growth. Cost of the computer information system will be
dependent upon selection of equipment and software that is year 2000 compliant.
However, no assurance can be given as to the Company's actual expenditures for
year 2000 compliance. See "Year 2000" below. Additional purchases for capital
resources are further dependent upon sales of its road stabilization and dust
control products. Cost of application equipment for road stabilization/dust
control products will initially be borne by the Company until a thorough
training program is instituted for its customers and distributors. The equipment
requirements for the Company's de-icing and anti-icing products are currently
incurred by the Company's customers and distributors.
YEAR 2000
The Company's information systems currently are made up of networked computers
which are used internally and are not linked to any outside sources other than
the browser used by the Company. The Company's future information system will
cover a spectrum of software applications for its distribution operations,
certain of these will be custom designed. The company will need to do an
extensive study to achieve year 2000 compliance for both packaged and
custom-designed software.
The cost of compliance has not yet been determined.
The company has initiated formal communication with all of its significant
suppliers to determine the extent to which the Company is vulnerable to the
failure of such suppliers to resolve their own Year 2000 problems. The Company
will grade the responses from low to high risk. In addition, although many of
the Company's customers have been communicating with the Company regarding the
Year 2000 issues, the Company has not made any formal assessment of the effect
which the failure of its larger customers to resolve their own Year 2000
problems could have on the Company's operations. Despite these efforts, there
can be no assurance that the systems of other companies on which the company
relies will be timely converted or that a failure to resolve by one or more of
the company's customers or suppliers would not have a material adverse effect on
the Company.
IMPACT OF INFLATION
The impact of inflation on the costs of the Company, and the ability to pass on
cost increases in the form of increased sales prices, is dependent upon market
conditions. While the general level of inflation in the economy has been at
relatively low levels, the Company has begun to pass on inflationary cost
increases or as the result of recent negotiations with various customers, and
will continue do so.
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<PAGE>
SEASONALITY
Due principally to the seasonal nature of the Company's de-icing and anti-icing
products which depends upon snow and ice, and in which demand is stronger during
the winter months, the Company's shipment volume is typically higher in the
second and third quarters. The company had been building inventory at a higher
level to accommodate a projected precipitous winter. The company is making
arrangements with its de-icing/anti-icing suppliers to schedule shipments closer
to demand periods rather than store large amounts of this product in its
inventory facilities. This will proportionately reduce inventory and conserve
cash. However, periods of no ice and snow affect profitability, especially
during the first and fourth quarters. New management is evaluating the relevant
emphasis on its two principal products with the goal of better balancing its
cash flow by accelerating its sales efforts for its RB ULTRA(TM) brand both in
the United States and abroad. Company's road stabilization/dust control products
are available for year round use in most areas of the country and for eight to
twelve months in the areas which experience ice and snow. Increasing the
proportion of corporate income from dust control and stabilization products is
one alternative to create a larger year round revenue base for the Company.
Business Mission
NSC's mission is to expand the market for its environmentally friendly,
anti-corrosive products, which replace or improve current technologies that are
environmentally damaging and corrosive to the infrastructure of elevated
highways, roads and bridges and to replace less effective and environmentally
harmful dust control and road stabilization agents currently used on much of the
almost one and one half million miles of unpaved U.S. roads. NSC seeks to
continue its research, testing and development programs to identify new and
unique products and technologies for the commercialization of environmentally
friendly products, produced from renewable, recyclable, low cost waste base
stock.
Results of Operations - Full Fiscal Years
Net Sales
For the fiscal year ending July 31, 1999, the Company had $2,100,199 in net
sales, compared to $1,994,415 for the fiscal year ending July 31, 1998. Since
the Company's inception thru the fiscal year ending July 31, 1999, the Company
had total net sales of $4,594,662. Costs applicable to sales and revenue related
to such periods are: $1,645,410 for the fiscal year ending July 31, 1999,
$1,635,726 for the fiscal year ending July 31, 1998, and $3,637,431 for the time
period of the Company's inception thru the fiscal year ending July 31, 1999.
Gross Profit
Gross profits were $454,789 for the fiscal year ending July 31, 1999 and
$358,689 for the fiscal year ending July 31, 1998. Gross profit since inception
thru fiscal year ending July 31, 1999 were $957,231.
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Selling, General & Administrative Expenses
Selling, general and administrative expenses were $3,002,378 for the fiscal year
ending July 31, 1999 and $2,955,619 for the fiscal year ending July 31, 1998.
Such expenses since exception thru fiscal year ending July 31, 1999 were
$6,654,213.
Loss
Loss before other income and income taxes were $2,547,589 and $2,596,930, for
fiscal years ending July 31, 1999 and July 31, 1998, respectively. Since
inception thru July 31, 1999 such loss was $5,696,982. The loss is then adjusted
by other income (investment income) and income taxes to arrive at the Company's
deficit accumulated during the development stage, as described below.
Deficit Accumulated During the Development Stage
The deficit accumulated during the development stage of the Company was
$2,764,547 and $2,586,718, for the fiscal years ending July 31, 1999 and July
31, 1998, respectively. Since inception thru July 31, 1999 such deficit amounted
to $5,242,043.
Basic Net Loss Per Share
The basic net loss per share was $0.1736 and $0.1642, for the fiscal years
ending July 31, 1999 and July 31, 1998, respectively. The weighted average
common shares outstanding for such periods were 15,923,733 and 15,753,032,
respectively.
Financial Condition, Liquidity and Capital Resources
The Company's total current assets were $749,634 and $1,454,057, on July 31,
1999 and July 31, 1998, respectively. Total assets were $1,410,392 and
$2,426,918, on July 31, 1999 and July 31, 1998, respectively. Total current
liabilities were $1,400,510 and $641,869, on July 31, 1999 and July 31, 1998,
respectively. Thus, the Company's financial condition and liquidity has
deteriorated from July 31, 1998 through July 31, 1999. The Company believes that
it will probably be necessary to raise additional debt or equity capital in
order to meet its short-term liquidity and solvency needs over the next twelve
(12) months. The Company also believes that increased sales are necessary in
order to regain adequate liquidity and solvency both in the short term as well
as in the long-term. The Company has recorded an infusion of $1,750,000 since
the end of its fiscal year and new management. The new management is in the
process of implementing a wide ranging assessment of each item of cost,
marketing and sales efforts, it is too early in the process to predict the steps
management will institute as a result. But certainly management will seek to
increase sales to lower fixed costs as a percentage of sales and to either
settle or see through to successful conclusion the non-productive litigation
which this year has burdened the Company's bottom line.
Stockholders' Equity consisted of fifty five (55) million shares of common stock
authorized and fifteen million nine-hundred ninety-six thousand five-hundred
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forty shares (15,996,540) issued on July 31, 1999. The common stock account is
$15,998 and $15,889, on July 31, 1999 and July 31, 1998, respectively.
Additional paid in capital was $5,564,564 and $4,512,276, on July 31, 1999 and
July 31, 1998, respectively. The deficit accumulated during the development
stage was $5,702,712 and $2,938,165, on July 31, 1999 and July 31, 1998. Total
stockholders' equity was ($122,150) and $1,590,000, on July 31, 1999 and July
31, 1998, respectively.
Strategic Elements of NSC's Product Portfolio
o First de-icing and anti-icing application that will not pollute rivers and
streams.
o Beneficial for elevated highway and bridge applications acting as an
anti-corrosive element while de-icing.
o A co-product that is in abundant supply and subject to seasonal over
production discounts.
o Road stabilization and dust control application that is environmentally
friendly.
o Application technique affording greater stability than previously achieved.
Strategic Objectives and Goals
o Qualify as a fully reporting company on the NASDAQ market.
o Distribute NSC's products to the entire market including government and
municipalities.
o Expand use applications and techniques.
o Secure retail packaging and distribution.
o Explore additional expansion through creation of more patents and through
improvements to the Company's current product portfolio.
Strategic Plan: Sales and Marketing
The Company's plan of operations for the next twelve months is to further
strengthen and develop its sales and marketing efforts with its current product
portfolio. The Company is evaluating marketing and logistical structure with the
intention of marketing through distribution dedicated to our products in smaller
distribution areas. NSC plans to place its emphasis on sales and marketing
activities, and execute sales through its distribution structure to increase
revenues and cash flow. One of NSC's main focuses will be on a tighter control
of cost elements and on achieving significant sales growth. The Company
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believes that all of the major elements are in place for product development,
but we need to define and execute sales operations more effectively. NSC plans
to market its products nationally through trade publications, trade shows,
direct mailings, television and news media outlets.
Ice Ban America, Inc. Opportunities for Growth
IBA, now operating as a wholly owned subsidiary of NSC, has been engaged in
unique market opportunities. Currently, IBA has focused on new products and
applications technologies. IBA is researching and developing an aerial spray
method (by helicopter) of a specialty composition and technical spraying
technique (patent pending) with a long established commercial aerial spraying
organization. This spraying application for anti-icing is to be used on high
voltage power transmission lines. Also being studied as an aerial spray
application is the spraying of fruit and vegetable crops to protect them against
freeze damage.
Potential new market areas are being examined. IBA is continuing to develop ICE
BAN(R) products for airports and runways, and continued study of such products
for de-icing of airplanes is being investigated by both the FAA and NASA. IBA
also has been seeking the development of ICE BAN(R) products for the retail
market and home use.
Roadbind America, Inc. Opportunities for Growth
RBA is examining potential expansion of the use of RB ULTRA(TM) products
throughout the U.S. for both municipality and private businesses who use dust
control and road stabilization products. The Company believes there is
opportunity for applications in the farm road, feed lot, and feed lot holding
ponds to reduce waste leaching into fresh water resources and to stabilize the
area where animals are fed.
RBA is seeking further opportunities to continue development of aviation runway
stabilization projects in rural unimproved airports in the West and Alaska. RBA
intends to also continue development of new and existing products as a binder in
producing earthen and adobe building blocks, and a composition binder to replace
mortar or mud for the bonding of building materials. This has the potential for
low cost housing for third-world countries. RBA is seeking to develop agreements
with Central and South American countries for testing and product sales for
unpaved road and airport runway stabilization projects.
Liquidity and Working Capital
The Company is uncertain how long it can continue operations without raising
additional funds. New management has invested $1.75 million since the close of
the fiscal year and instituted stringent cash management but the Company
believes that within the next twelve months (12) it may have to raise additional
funds for working capital by possibly engaging various lending institutions,
accessing capital markets, seeking out private investors, or a combination of
the above. If this is the
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case, then appropriate funding methods would be analyzed and the most prudent
course of action for the Company would be taken.
Research and Development
The Company does not plan any substantial product research and development
("R&D") for the duration of its current operational plans. However, outside
entities and institutions may be conducting such R&D in their own interests, or
if deemed in the best interests of the Company then NSC may in the future cause
such further R&D to occur.
Plant and Equipment
NSC does not foresee any substantial purchase or sale of plant or equipment
within the term of its current operational plans, but does plan to move its
operations to Virginia Beach in the near future to be closer to its winter
markets and to the resources that can be provided to it by new management.
Internal Employment Level
The Company does not expect any significant changes in the number or
compensation of its employees.
Impact of the Year 2000 Issue
The Year 2000 Issue is the result of potential problems with computer
systems or any equipment with computer chips that use dates where the date has
been stored as just two digits (e.g. 98 for 1998). On January 1, 2000, any clock
or date recording mechanism including date sensitive software which uses only
two digits to represent the year, may recognize the date using 00 as the year
1900 rather than the year 2000. This could result in a system failure or
miscalculations causing disruption of operations, including among other things,
a temporary inability to process transactions, send invoices, or engage in
similar activities.
The Company determined that the Year 2000 impact is not material to NSC
and that it will not impact its business, operations or financial condition
since all of the internal software utilized by the Company has the capability of
being upgraded to support Year 2000 versions.
The Company believes that it has disclosed all required information
relative to Year 2000 issues relating to its business and operations. However,
there can be no assurance that the systems of other companies on which the
Company's systems rely also will be timely converted or that any such failure to
convert by another company would not have an adverse affect on the Company's
systems.
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Item 3. Description of Property.
The Company does not currently own any real property. The Company leases its
corporate headquarters and sales office at 1201 US Highway 1, Suite 205-215,
North Palm Beach, Florida 33408.
The Company leases its executive offices pursuant to a lease dated
April 11, 1997 with North Palm Crystal Associates, as amended by an addendum
dated July 10, 1997 and a second addendum dated February 11, 1999 and effective
April 1, 1999. The Company currently rents approximately 2,043 square feet at a
base monthly rent of $1,369.30 and with a monthly common area maintenance charge
of $1,380.72. The current lease term commenced on April 1, 1999 and will
terminate on March 31, 2002.
On February 10, 1999, a lease was entered into between Anthony M.
Massaro and Lance J. Mark and Ice Ban America, Inc., for 547-a Main Street,
Medina, New York 14103. The premises are office spaces. The term of the lease is
twelve months commencing February 8, 1999. The annual rent is three thousand
dollars ($3,000) payable in monthly installments of two-hundred fifty dollars
($250). The office in Medina, NY is currently not being occupied by the Company
and office operations were halted in August 1999.
On June 1, 1997, IBNY agreed to lease approximately 700 feet of office
space at 12118 East Yates Center Road, Lyndonville, New York at one thousand
dollars ($1,000) per month. The term commenced on June 1, 1997 and runs for
three (3) years, with first option to renew after the initial term. Mr. Jeffrey
A. Johnson was the owner of the property and lessor. Mr. Jeffrey Johnson was
also a Senior Vice-President, Chief Operating Officer and a Director of the
Company at the time. See Part I, Item 7. "Certain Relationships and Related
Transactions". On July 1, 1998, an addendum to the lease was executed and an
increase in the monthly rent to one thousand thirty-five dollars ($1,035)
commenced on July 1, 1998 due to installation of central air conditioning. On
February 2, 1999, Ice Ban America, Inc. entered into an "Exclusive Right to
Lease Contract" with Jeanne Whipple Realty concerning the property located at
12118 East Yates Center Rd., Lyndonville, New York. Mr. Johnson refused to
cooperate with the Company to sublease the space and therefore effectively
repudiated the contract.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
(a) Security Ownership of Certain Beneficial Owners.
The following is information on any person or group who is known to be the
beneficial owner of more than five percent of any class of the issuer's voting
securities:
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<TABLE>
<CAPTION>
(1) (2) (3) (4)*
Title of Name and Address Amount and Percent of
Class of Beneficial Owner Nature of Beneficial Class
official Owner Owner
<S> <C> <C> <C>
Common Stock Warren D. Johnson, Jr. 4,929,524 (1) 24.65 %
5111 S.W. Bay Point Circle
Palm City, FL 54990
Common Stock George Janke, Trustee, 4,889,000 24.449 %
Janke Family Vinasz T rust,
511 New Hope Road
Lahaska, PA 18938
Common Stock Dr. M. G. "Pat" Robertson, 4,150,000 (2) 20.75%
Chairman
977 Centerville Turnpike
Virginia Beach, VA 23463
</TABLE>
- ----------------------------------------
* Based on 19,996,540 shares outstanding on November 15, 1999.
(1) These shares are subject to a preliminary injunction in Warren D. Johnson,
Jr.'s Chapter 7 bankruptcy proceeding. Kapila, Trustee vs. Warren Douglas
Johnson, Jr., et al., Case No. 92-33339-BKC-SHF (U.S. Bankruptcy Court, Southern
District of Florida). The Company deems Warren D. Johnson, Jr. the true
beneficial owner of such shares. They are held in nominee names as follows:
700,000 shares / Medical College Fund, 625,000 shares / Windmills Plantation
Fund, Ltd., 600,000 shares / Hawks Nest Plantation Fund, 750,000 shares / Reed
International Fund, Inc., 750,000 shares / Ryder Securities Ltd., 500,000 shares
/ Marlin Preservation Fund, 260,000 shares / Harvard Fund, Ltd., 260,000 shares
Merchants Trust Fund, 100,000 shares / Warren D. Johnson, Sr., 284,524 shares /
Dianne Johnson, 100,000 shares / Dianne Johnson.
(2) In addition to these shares Mr. Robertson has an option to exercise stock
warrants to purchase an additional 4,000,000 shares of the Company's common
stock. ( See Part II, Item 4. Recent Sales of Unregistered Securities.)
(b) Security Ownership of Management.
For directors and officers:
<TABLE>
<CAPTION>
(1) (2) (3) (4)*
Title of Name and Address Amount and Percent of
Class of Beneficial Owner Nature of Beneficial Class
official Owner Owner
<S> <C> <C> <C>
Common Stock Dr. M. G. "Pat" Robertson, 4,150,000 (1) 20.75%
Chairman
977 Centerville Turnpike
Virginia Beach, VA 23463
</TABLE>
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<TABLE>
<S> <C> <C> <C>
Common Stock Richard Jurgenson, President 0 0
1201US Highway 1, Suite 205
N. Palm Beach, FL 33408
Common Stock Joseph S. Kroll, Vice President 0 0
1201US Highway 1, Suite 205
N. Palm Beach, FL 33408
Common Stock Ann M. Owen, Secretary 17,000 0.085%
1201US Highway 1, Suite 205
N. Palm Beach, FL 33408
Common Stock Kathleen M. Smith, Treasurer 0 0
1201US Highway 1, Suite 205
N. Palm Beach, FL 33408
Common Stock George Janke, Trustee, 4,889,000 24.449%
Janke Family Vinasz T rust,
511 New Hope Road
Lahaska, PA 18938
Common Stock William Donnhausen 20,000 0.10%
Board Member
1201US Highway 1, Suite 205
N. Palm Beach, FL 33408
Common Stock J. Nelson Happy, 0 0
Board Member
1201US Highway 1, Suite 205
N. Palm Beach, FL 33408
Common Stock Robert E. Freer 7,000 0.035%
Board Member
1201US Highway 1, Suite 205
N. Palm Beach, FL 33408
Common Stock Directors and Officers 4,933,000 31.046%
as a group
</TABLE>
- ----------------------------------------
(1) See Footnote (2) of Item 4. Security Ownership of Certain Beneficial Owners
and Management, (a) Security Ownership of Certain Beneficial Owners.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
(a) Identification of Directors and Executive Officers
44
<PAGE>
Dr. M. G. "Pat" Robertson, age 69, is Chairman of the Board of NSC. Dr.
Robertson is an internationally known religious broadcaster, businessman,
educator, philanthropist and former candidate for the Presidential nomination
for the Republican Party. Dr. Robertson is also the former Chairman and
controlling shareholder of International Family Entertainment, Inc., which was
sold in 1997 for $1.82 billion dollars to a subsidiary of Rupert Murdoch's News
Corporation.
Currently, Dr. Robertson is Chairman of Zhaodaola China Interest, Ltd.,
Freedon Gold, CENCO Refining Company and serves in the non-profit world as
Chairman of the Christian Broadcasting Network, Chancellor of Regent University,
Chairman of Operation Blessing International Relief and Development, and
President of the American Center for Law and Justice.
Richard Jurgenson, age 65, is President and chief executive officer of NSC.
Mr. Jurgenson was one of the original founders of Minnesota Corn Processors
(MCP), a nearly one billion dollar- per-year corn wet milling operation that
produces cornstarch, corn sweeteners, and fuel alcohol. MCP also produces the
material marketed under ICE BAN(R). Mr. Jurgensen had served as MCP's Board
Chairman for the first 10 years of its operation and guided MCP to a preeminent
position within its industry. Mr. Jergenson retired after serving as President
and General Manager of MCP. Mr. Jurgenson has also served on the Board of
Director's of other corporations for a cumulative total of over 40 years.
Joseph S. Kroll, age 42, is Vice President and COO of NSC. Mr. Kroll has
held these positions within the Company since 1997. He has a background in Civil
Engineering and Survey Engineering and was the Operations/ Maintenance Director
for the Indian Trail Improvement District from 1990 until assuming his position
with the Company.
Ann M. Owen, age 58, is Secretary of NSC. Since April 1997 Ann M. Owen has
served the Company in various capacities. Prior to becoming Secretary and
officer of the Company, she has served the Company as a corporate and executive
secretary as well as office manager. From December 1995 through January 1997,
Ms. Owen served a CPA firm during the tax season, handling all aspects of office
procedures. From December 1993 through November 1995, she worked directly with
the President of American Jai-Alai, Inc. helping to secure and organize the
setting up of a fronton facility in Tallahassee, Florida. Ms. Owen serves her
community through various community projects. She was co-chair of an
organization that built a community health eye and ear screening service with
children in Boca Raton, Florida. For this service she was voted Junior Woman of
the Year for 1973. Her service to the City of Palm Beach Gardens, Florida, had
earned her the Girl of the Year Award for 1976-1977. Ms. Owen is a graduate of
Seacrest High School, Delray Beach, Florida and has participated in various
continuing education programs.
Kathleen M. Smith, age 37, is Treasurer of NSC . From July 1997 to the
present, Ms. Smith has served the Company as Controller. On November 12, 1998
she was appointed Treasurer of the Company. From November 1996 through December
1997, she served as an accountant for a medical practice in Jupiter, Florida.
From November 1994 through November 1996, Ms. Smith served as an accountant with
the firm of Wisneski, Blakiston & Leslie, P.A., located in Jupiter, Florida. Ms.
45
<PAGE>
Smith also served as an accountant for New Concept Marketing, Inc. from October
1989 through November 1994. Ms. Smith is currently attending Palm Beach
Community College where she is studying for her A.S. in Accounting Technology.
George Janke, age 59, is a Board Member of NSC. Mr. Janke, up until May 3,
1999, had been Chairman of the Board of Directors since NSC's incorporation (as
Ice Ban America, Inc.) in August 1996. From May 1997 to August 1999, he has
served as President and Treasurer of IBA. On November 10, 1998, Mr. Janke was
awarded the very prestigious international Charles W. Pankow 1998 Award for his
ICE BAN(R) product. The Award is given each year by the American Society of
Civil Engineers, Research Foundation (CERF) for the best innovative technology.
The ICE BAN(R) technology won out of a field of over two hundred technology
applications from all over the world. From December 1989 to the present, Mr.
Janke has been general partner of the Retirement Facility at Palm Aire, Ltd.,
which developed a retirement facility known as "The Preserve"; Mr. Janke is also
President and Director of Parc M Inc., the corporate general partner of the
project. From December 1993, Mr. Janke has had ongoing involvement in the
development of ICE BAN(R) products. Since April 1995, Mr. Janke has been
President and Chief Executive Officer (CEO) of IBUSA, the exclusive assignee of
the patent rights for North America which are NSC's de-icing and anti-icing
products. Mr. Janke is a graduate of Lafayette College with a B.S. degree in
business administration. He is a Commander (Retired), in the United States Naval
Reserve.
William Dannhausen, age 78, is a Board Member of NSC. Mr. Dannhausen is
publisher of Better Roads magazine. After more than 40 years in the trade
magazine business and more than 30 years as owner and publisher of Better Roads
magazine, he is a recognized authority in the transportation and road
maintenance industry.
J. Nelson Happy, age 56, is a Board Member of NSC. Since 1993, Mr. Happy
has been Dean and Professor of Regent University School of Law. Prior to his
position with Regent, Mr. Happy practiced business and civil litigation law. He
has lectured at the University of Kansas and has been a faculty member at the
National Institute of Trial Advocacy at Northwestern University in Chicago. He
is a national faculty member of the West Bar Review. He has been an attorney
since 1967 and has been an executive officer and director of numerous business
enterprises in a variety of industries. Mr. Happy is a graduate of Columbia
University Law School and has an undergraduate degree in communications from
Syracuse University.
Robert E. Freer, Jr., age 58, is a Board Member of NSC. Mr. Freer has been
a director of the Company since April 1998. He is an attorney and has been an
officer and director of the Washington, D.C. law firm of Baise, Miller & Freer
P.C., and was involved with the firm's predecessor organization for the past 5
years. Mr. Freer is the editor and co-author of "Finding Our Roots, Facing Our
Future: America in the 21st Century", recently published by Madison Books. Mr.
Freer has previously been engaged as one of the Company's outside counsel. Prior
to entering private law practice, Mr. Freer served in several senior level
positions at the Federal Trade Commission and the U.S. Department of
Transportation. For almost ten years, Mr. Freer was Vice President and
Washington Counsel for Kimberly Clark Corporation., where he was also General
Counsel in Roswell, Georgia from 1983 to 1984. Mr. Freer was appointed by
President Reagan as a member of the President's Commission on White House
46
<PAGE>
Fellowships, served as one of the founders and the first General Counsel of the
Republican National Lawyers Association, National Chairman of Corporate Counsel
for Reagan-Bush 1984, and was Assistant General Counsel of the 1988, 1992, and
1996 Republican Conventions. Mr. Freer is a graduate of Princeton University and
the University of Virginia Law School.
J. Carter Beese, Jr., age 43, is a Board Member of NSC. Mr. Beese is
currently President of Riggs Capital Partners a division of Riggs National Bank
and a Vice Chairman of Riggs & Co. Prior to joining Riggs Capital Partners Mr.
Reese was Managing Director of the Global Banking Group at BT Alex Brown. In
1992, Mr. Beese was nominated by President Bush to be the 71st Commissioner of
the U.S. Securities and Exchange Commission (SEC). Upon confirmation Mr. Beese
served as SEC Commissioner until 1996. Prior to joining the SEC, Beese was a
partner at Alex Brown & Sons, the oldest investment banking firm in the United
States. In 1990, Mr. Beese was appointed as a Director of the Overseas Private
Investment Corporation (OPIC). Currently, Mr. Beese serves as Senior Advisor to
the Washington based Center for Strategic and International Studies (CSIS), a
non-partisan think tank that has been at the forefront of shaping public policy
for over 30 years. In addition, he is involved with the World Economic Forum,
the Council on Foreign Relations and serves on the Boards of various public and
private institutions, including Internet Securities, China.com and Aether
Systems, Inc.
(b) Identify Significant Employees.
Not Applicable.
(c) Family Relationships.
There are no family relationships among directors, executive officers, or
persons nominated or chosen by the issuer to become directors or executive
officers.
(d) Involvement in Certain Legal Proceedings.
The Company is not aware of any involvement by its current officers,
directors, or other applicable persons regarding any civil, criminal, or
bankruptcy proceeding or any other event that is required to be disclosed that
relates to the past five years that are material to an evaluation or integrity
of any director, person nominated to become a director, executive officer,
promoter or control person of the issuer.
47
<PAGE>
Item 6. Executive Compensation.
<TABLE>
<CAPTION>
Name and Post Year Annual LT
Annual Comp Annual Comp LT
Comp Bonus Comp Rest Comp LTIP All Other
Salary ($) Other Stock Options Payouts (1)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dr. M. G. "Pat" 1999 0
Robertson,
Chairman
Richard 1999 0 $5,000 per
Jurgenson, month(2),(3)
President
Joseph S. Kroll, 1999 $52,000 $5,260 (4) Car
Vice President Allowance,
Commissions,
Health Insurance.
Ann M. Owen, 1999 $34,320 (5), (7), Dental
Secretary Insurance
Kathleen M. 1999 $34,320 (6), Health
Smith, Treasurer Insurance
</TABLE>
- --------------------------------------
(1) This includes any fringe benefits that the stated employees are currently
receiving.
(2) Richard Jurgenson is to receive $5,000 per month. Such amounts began to
accrue on August 1, 1999 and will continue until January 1, 2000. It is
uncertain whether the Company will, or will otherwise be able to, pay Mr.
Jurgenson "back-pay" for the months he worked without receiving any salary.
(3) On February 17, 1999, Richard Jurgenson was granted a non-qualified stock
option to purchase 50,000 shares of common stock in the Company at $1.05/per
share. The stock option expires on February 17, 2009.
(4) On February 17, 1999, Joseph S. Kroll was granted an incentive stock option
to purchase 25,000 shares of common stock in the Company at $1.05/per share. The
stock option expires on February 17, 2009.
(5) On February 17, 1999, Ann M. Owen was granted an incentive stock option to
purchase 25,000 shares of common stock in the Company at $1.05/per share. The
stock option expires on February 17, 2009.
(6) On February 17, 1999, Kathleen Smith was granted an incentive stock option
to purchase 15,000 shares of common stock in the Company at $1.05/per share. The
stock option expires on February 17, 2009.
(7) On August 22, 1997 and June 12, 1998, Ann M. Owen was issued 2000 shares and
10,000 shares, respectively, of restricted common stock in the Company in
payment of professional services rendered.
48
<PAGE>
1999 Stock Option Plan
On November 11, 1998, one and one-half million (1.5 million) shares of
restricted stock was set aside for compensation and outlined as non-qualified
options at seventy-five cents ($0.75) per share. On February 19, 1999, the
Company amended the vote of the Board of Directors to now include an Incentive
Stock Option Plan whereby nine-hundred thousand (900,000) shares of restricted
stock was to be set aside under the Non-Statutory Stock Option Plan for
non-employee members of the Board of Directors, key personnel, consultants or
independent contractors, and an Incentive Option Plan to include employees, and
key personnel who render services which contribute to the success of the growth
of the Company, whereby six-hundred thousand (600,000) shares of restricted
stock was set aside. The price per share of the options is one dollar and five
cents ($1.05). The Company's Incentive Stock Option Plan and Non-Statutory Stock
Option Plan are both articulated within one plan titled "1999 STOCK OPTION
PLAN".
Summary of Non-Qualified Stock Options
<TABLE>
<CAPTION>
Name Number of Grant Expiration Price
Shares Date Date
<S> <C> <C> <C> <C> <C>
Board of Directors
George Janke (1) 150,000 2/17/99 2/17/2009 $1.10/per
share
J. Carter Beese 50,000 2/17/99 2/17/2009 $1.05/per
share
William O. 30,000 2/17/99 2/17/2009 $1.05/per
Dannhausen share
Richard Jurgenson 50,000 2/17/99 2/17/2009 $1.05/per
share
Robert E. Freer 45,000 2/17/99 2/17/2009 $1.05/per
share
Other Key Personnel
Floyd Chapman 25,000 2/17/99 2/17/2009 $1.05/per
share
James McCann 25,000 2/17/99 2/17/2009 $1.05/per
share
Raymond Marshall 25,000 2/17/99 2/17/2009 $1.05/per
share
Libo Fineberg 10,000 2/17/99 2/17/2009 $1.05/per
share
Dorothy Morgan 5,000 2/17/99 2/17/2009 $1.05/per
share
Dr. Robert Hartley 5,000
Total Non- 420,000
Qualified
Options
</TABLE>
49
<PAGE>
- --------------------------------------------
(1) George Janke has expressed that under his current employment contract he was
granted stock due in 1998. George Janke deferred or waived this stock. The
position of the Company is that George Janke deferred or waived his rights to
future payment of any kind under this contract after his termination as Chief
Executive Officer until the Company determines it has reached a profit level
satisfactory to the Board of Directors. Mr. Janke contends the contract was
simply a waiver for only one(1) year and that the Company remains obligated for
the balance of the contract term. The issue remains unresolved. George Janke,
however, has expressed that he would like to have the 150,000 shares that were
deferred or waived due under the option as outlined above, and each year
thereafter according to the terms and conditions of said employment contract.
<TABLE>
<CAPTION>
Summary of Incentive Stock Options
Name Number Grant Date Expiration Date Price
of
Shares
<S> <C> <C> <C> <C>
Ann M. Owen 25,000 2/17/99 2/17/2009 $1.05/per share
Dave Cook 5,000 2/17/99 2/17/2009 $1.05/per share
Donald Addison 5,000 2/17/99 2/17/2009 $1.05/per share
Harry Pack 25,000 2/17/99 2/17/2009 $1.05/per share
Joseph Kroll 25,000 2/17/99 2/17/2009 $1.05/per share
Kathleen Smith 15,000 2/17/99 2/17/2009 $1.05/per share
Kim Wilkins 5,000 2/17/99 2/17/2009 $1.05/per share
Leo C. Palmer 25,000 2/17/99 2/17/2009 $1.05/per share
Richard Weinert 5,000 2/17/99 2/17/2009 $1.05/per share
Ryan Bridges 5,000 2/17/99 2/17/2009 $1.05/per share
Sandra Funk 5,000 2/17/99 2/17/2009 $1.05/per share
Sandra Wolfe 10,000 2/17/99 2/17/2009 $1.05/per share
Valerie Muzzio 5,000 2/17/99 2/17/2009 $1.05/per share
155,000
</TABLE>
Total Stock Options 575,000
(Non-Qualified + Incentive Stock Options)
50
<PAGE>
Item 7. Certain Relationships and Related Transactions.
On August 20, 1996, the then Vice President of the Company, George
Janke, and the Company entered into a five year Employment Agreement at an
annual salary of $85,000 per year with cost of living increases. The agreement
also provided for up to 150,000 common shares to be issued on December 1 per
year, for five years if certain performance goals are achieved. On August 10,
1997, the 1996 agreement was superseded by a new agreement retroactive to
January 1, 1997. The term and salary of the new agreement remain essentially the
same as the previous agreement but define the exercise dates and exercise prices
of the options portion of the agreement. The position of the Company is that
George Janke deferred or waived his rights to future payment of any kind under
this contract after his resignation as Chief Executive Officer on July 30, 1999.
Mr. Janke contends the contract was simply a waiver for only one(1) year and
that the Company remains obligated for the balance of the contract term. The
issue remains unresolved. See Part I, Item 6.
Executive Compensation, "1999 Stock Option Plan".
Prior to the August 31, 1996 execution of the licensing agreement
described below, on August 16, 1996, in consideration of obtaining such
licensing agreement concerning intellectual property rights related to de-icing
and anti-icing products, and payment of five thousand dollars ($5,000), the
Company issued founders shares to George Janke, in his capacity as trustee for
certain family members, and to Warren D. Johnson, Jr. George Janke, as trustee,
received five million eight-hundred thousand (5,800,000) shares of common stock
and Warren D. Johnson, Jr. received six million four-hundred thousand
(6,400,000) shares of common stock. These shares were issued pursuant to the
exemption from registration provided by ss.4(2) of the Securities Act of 1933,
as amended (the "Act") and ss.517.061(11) of the Florida Code.
On August 31, 1996, IBA entered into an exclusive licensing agreement
with Ice Ban USA, Inc. ("IBUSA") to exploit certain patents, patents pending and
trademarks assigned to IBUSA. IBUSA is a Company owned by ICE BAN(R)'s inventor
George Janke and Warren D. Johnson, Jr. The patents cover the use of
agricultural by-products as road de-icing and anti-icing agents. The product is
currently marketed as ICE BAN(R). The territory granted under this license
included all
51
<PAGE>
of the United States except for upstate New York (north of the 42nd parallel)
and Erie, Pennsylvania. These territories were later added to the Company's
rights through subsequent corporate acquisition of Ice Ban, Inc. ("IBNY"). These
areas, termed "out-territories" in the licensing agreement, were the subject of
a previously extended non-assignable license to IBNY, a New York corporation. On
March 30, 1998, IBUSA and IBA entered into an addendum to their previous
agreement. The terms of the addendum state that IBUSA shall transfer one hundred
and twenty-five thousand ($125,000) dollars to IBA's account for it to use such
to pay for inventory and operations, at the sole discretion of IBA. IBA agreed
to pay one ($1.00) dollar per ton additional fee to IBUSA for all IBA products
sold annually up to twenty-five thousand ($25,000) dollars per year for six
years, which would include interest and principal. The total repayment of the
loan is one hundred fifty thousand ($150,000) dollars. IBA also acquired the
exclusive right to market the trademarked product TEMBIND(R) from Tembec, Inc.
IBA acquired this right through its acquisition of IBNY. TEMBIND(R) is a
biodegradable, non-corrosive dust control and road stabilization product for use
in the maintenance of unpaved roads. The Company now markets this product under
the trademarked brands RB ULTRA(TM) Products. ICE BAN(R) and RB ULTRA(TM)
Products are the three primary products offered by the Company.
On August 31, 1996, IBUSA for consideration of one hundred thousand
dollars ($100,000) granted IBA the use of those rights in an exclusive license
agreement for the United States, excluding only counties in the State of New
York north of the 42nd parallel and also excluding Erie County, Pennsylvania.
IBUSA, is a Florida corporation controlled by Mr. George Janke, as trustee.
George Janke was the Vice President and Director of the Company. IBUSA acquired
the sole rights to the use of certain patent rights relating to roadway de-icing
and anti-icing products and their related compositions. In consideration for
obtaining said licensing agreement, and after having contributed five thousand
dollars ($5,000) in cash, the Company issued six million four-hundred thousand
shares (6,400,000) to Mr. Warren Johnson, a former President and Director of the
Company and a former officer of IBUSA, and five million eight-hundred thousand
shares (5,800,000) to Mr. George Janke, as trustee, for the benefit of certain
members of Mr. Janke's family. The license agreement term is for seven years
with one-year automatic renewals thereafter.
See Part I, Item 1. -(b) Business of Issuer, Risk 6. Risk of Effective Failure
of Certain Intellectual Property Rights; and Part I, Item 1. -(b) Business of
Issuer, Risk 13. Uncertainty Regarding Protection of Proprietary Rights. The
rights to the excluded territory were transferred to IBA on July 29, 1997 as a
result of the acquisition of IBNY by IBA in 1997 and an amendment to exclusive
license area agreement executed on August 31, 1998, between IBA and IBUSA. The
"Amendment to Exclusive License Area Agreement", executed on August 31, 1998,
extended the Company's license to cover the entire U.S. The amendment also
granted certain rights to trademarks. These trademark rights were identified and
listed as: (1) "ICE BAN", (2) "ICE BAN MAGIC" and (3) the ICE BAN(R) LOGO. These
trademarks are "for [sic] anti-icing and de-icing composition for use on
exterior surfaces."
On March 5, 1997, an agreement was executed between Sears Oil Co., Inc.
and IBNY, which calls for Sears to provide storage and thru-put services in
Rome, NY. Such service would include receiving product by rail or truck,
storage-in-tank, inventory control and reporting, provision of truck loading
facilities, equipment maintenance and provision of normal supplies. This
agreement also calls for minimum quantities of thru-put by IBNY. This contract
is binding on any successors of such corporations.
52
<PAGE>
On May 1, 1997, IBA and Jeff Johnson entered into an employment
agreement. Jeff Johnson was to receive a salary of thirty-six thousand ($36,000)
dollars per year for each year of his employment with IBA. Jeff Johnson was to
be Senior Vice President and Chief Operating Officer for a minimum term of three
years, subject to the discretion of the IBA Board of Directors. For each of the
three year term of the agreement, Johnson was to receive one hundred thousand
(100,000) shares of stock on the anniversary of each full year term of
employment for each of the years served. The total shares due under this
provision was three hundred thousand (300,000) shares. The contract was to
continue after the three year minimum time period until canceled or terminated
by either party subject to one hundred and eighty (180) days notice. This
employment agreement is currently the subject of litigation. See Part II, Item
2. Legal Proceedings, Jeffrey Johnson vs. Natural Solutions.
On June 1, 1997, IBNY agreed to lease approximately 700 feet of office
space at 12118 East Yates Center Road, Lyndonville, New York at one thousand
dollars ($1,000) per month. The term commenced on June 1, 1997 and runs for
three (3) years, with first option to renew after the initial term. Mr. Jeffrey
A. Johnson was the owner of the property and lessor. Mr. Jeff Johnson was a
Senior Vice-President, Chief Operating Officer and a Director of the Company at
the time. See Part I, Item 7. "Certain Relationships and Related Transactions".
On July 1, 1998, an addendum to the lease was executed and an increase in the
monthly rent to one thousand thirty-five dollars ($1,035) commenced on July 1,
1998 due to installation of central air conditioning. On February 2, 1999, Ice
Ban America, Inc. entered into an "Exclusive Right to Lease Contract" with
Jeanne Whipple Realty concerning the property located at 12118 East Yates Center
Rd., Lyndonville, New York. Mr. Johnson refused to cooperate with the Company to
sublease the space and therefore effectively repudiated the contract.
On July 29, 1997, the Company purchased 100% of IBNY for one million
three-hundred thousand shares (1,300,000) of common stock of The Company. The
Company had issued common stock to secure this acquisition. IBNY was owned in
large measure by relatives of Warren D. Johnson, Jr., including Mr. Jeff
Johnson, the Vice President of The Company. Mr. Jeff Johnson, an officer and
director of the Company, was also an officer, director and shareholder of IBNY
prior to the acquisition. Furthermore, 100,000 shares of the common stock of The
Company was issued to IBUSA and as part of that transaction IBUSA received an
assignment of the Patent Application for the BCS by-product. Messrs. Janke and
Johnson control IBUSA through share ownership. IBUSA had previously assigned /
transferred rights to ICE BAN(R) to IBNY. Thus, IBNY owned the rights to ICE
BAN(R) for upstate New York (above the 42nd parallel), and owned the rights for
Erie County, Pennsylvania, and had owned these rights before The Company was
formed in 1996. IBNY also owned the rights to market TEMBIND in the United
States. The compensation for the acquisition was effectively determined by
George Janke and Warren D. Johnson, Jr. who, between them controlled both
companies.
On July 29, 1997, in an exchange of stock, the Company acquired IBNY,
the only licensee with territorial rights to ICE BAN(R) in the U.S. (i.e.
upstate New York and Erie, Pennsylvania) which was not included in the original
53
<PAGE>
license to the Company. This acquisition provided the Company with a fully
operational and cash generating company to enhance its business. The
acquisition, moreover, provided additional personnel experienced in the
Company's line of business. IBA issued 1.3 million shares of its common stock to
acquire 100% of the common stock of IBNY. In the same transaction, an additional
one hundred thousand (100,000) shares of the Company was issued to IBUSA, a
corporation which was owned by Warren D. Johnson, Jr. and George Janke, for the
waiver of its non-assignability provision in its licensing agreement. Mr. Janke
is the inventor of the patents that cover the ICE BAN(R) products. As a result
of this acquisition of IBNY, the Company's license now extends to the entire
United States. In acquiring IBNY, the Company had also acquired the national
distribution rights to the TEMBIND(R) product. TEMBIND is a by- product of wood
products. The Company would later re-brand the product as RB ULTRA(TM) Products.
IBNY owned the license to the ICE BAN(R) products in upstate New York
and Erie County, Pennsylvania, and also the license to market and distribute
TEMBIND(R) in the United States. Included within the overall structure of the
transaction was the obligation of IBNY to assign said rights to IBUSA (from
whence they came) with the further agreement that IBUSA would assign the rights
to the Company or its designee, which it did, in consideration for one hundred
thousand (100,000) shares of the Company's common stock. Pursuant to the
transaction, the 100,000 shares of the Company's common stock was issued to
IBUSA in consideration for the waiver of its non- assignability provision in its
licensing agreement with IBNY in regard to the license of ICE BAN(R) products in
upstate New York and Erie County, Pennsylvania. Furthermore, in addition to the
100,000 shares of the common stock of The Company , IBUSA received an assignment
of the Patent Application for the BCS by-product. The Company relied upon the
exemption from registration provided by ss.4(2) of the Act and Rule 506.
On August 10, 1997, IBA and George Janke entered into an employment
agreement with the Company. The agreement stated that George Janke was to be
Chief Executive Officer for a minimum term of five (5) years, from January 1,
1997 thru December 31, 2001. George Janke was to receive eighty-five thousand
dollars ($85,000.00) per year for each year of his employment with IBA, subject
to cost of living adjustments. He was given the right to defer his compensation
at his sole discretion, and may instead choose to receive payment in IBA stock
based on the amount of salary due and the price that the IBA stock is listed as
sold at the close of business on the last trading day each year. The agreement
provided for a "shares of stock bonus." This bonus consists of up to one hundred
and fifty-thousand (150,000) shares of restricted shares of common stock to be
issued, per year, for five (5) years if certain performance goals are met. The
agreement and Mr. Janke's employment with the Company, can be terminated after
the five(5) year base term, however, each party is required to provide one
hundred and eighty(180) days notice in writing of said termination or
resignation. The position of the Company is that George Janke deferred or waived
his rights to future payment of any kind under this contract after his
resignation as Chief Executive Officer on July 30, 1999. Mr. Janke contends the
contract was simply a waiver for only one(1) year and that the Company remains
obligated for the balance of the contract term. The issue remains unresolved.
54
<PAGE>
On October 17, 1997, the Company formed Tembind America, Inc., a Nevada
corporation. On July 22, 1998, the Company changed the name of Tembind America,
Inc. to Roadbind America, Inc. This Company is still a 100% owned subsidiary of
the Company. The rights to market the TEMBIND(R) product and the use of the
trademark as set forth in a distributor agreement dated October 12, 1995 were
assigned to Tembind America, Inc., from the Company, which had acquired the
rights through the acquisition of IBNY. Then, on December 12, 1997, the Company
caused ICE BAN Holdings, Inc. to be formed in Florida. The stock of IBNY was
transferred to Ice Ban Holdings, Inc. subsequent to its formation pursuant to
the Company's acquisition agreement dated July 29, 1997. Ice Ban Holdings, Inc.
is a 100% owned subsidiary of the Company.
On April 23, 1998, the Company issued 35,000 shares of its common stock
to Baise, Miller & Freer PC of Washington, D.C. as payment of professional fees.
The Company relied upon the exemption from registration provided by ss.4(2) of
the Act and Rule 506.
In June of 1998, the Company purchased one hundred thousand shares
(100,000) of the common stock of IBAC Corporation (the Canadian licensee of ICE
BAN(R) products under an agreement with IBUSA) for one hundred ten thousand
dollars ($110,000). The investment amounted to less than one percent (1%) of the
approximately thirteen million seven-hundred fifty- five thousand shares
(13,755,000) outstanding of IBAC Corporation. There exists a commonality of
members of the Board of Directors and officers of both the Company and IBAC
Corporation. There is also substantial ownership of stock in each company by
George Janke, as trustee. At the time Mr. Jeffrey Johnson was Vice President and
a Director of IBAC Corporation and the Company.
On June 4, 1998, a "Lease" was entered into between 1194 Corporation,
of North Palm Beach, Florida, and Tembind America, Inc. for a three year lease,
from July 1, 1998 to June 30, 2001, of property to be used for the sale and
storage of materials. George Janke and IBUSA agreed to share in the leasing of
this warehouse space.
On June 8, 1998, a "Commercial Contract & Lease" was entered into
between Ted Gaczynski, President of R. Conley, Inc. and Jeffrey Johnson, Vice
President of IBNY. IBNY agreed to lease from R. Conley, Inc. premises situated
in Erie, New York. This was a contract commencing on July 1, 1998 and
terminating on July 1, 1999 for the use and occupation of premises for storage
(tank) and handling of product.
During the Company's fiscal year ended July 31, 1998 the Company made
payments in both cash and stock to either Robert E. Freer, Jr., Esq., or two law
firms in which he was or is a principal. Mr. Freer became a Director of the
Company in April, 1998. Cash payments totaling $185,901 and 35,000 shares of
common stock valued at $139,344 were paid directly to these firms for legal
services performed and disbursements made on behalf of the Company prior to his
becoming a director. In addition 50,000 shares valued at $216,125 were issued
directly to Mr. Freer, also before he became a director.
On August 25, 1998, an agreement was entered into among Sears Petroleum
& Transport Corp., Sears Oil Co., Inc. ("Sears"), IBA and Sears Environmental
Applications Company, LLC ("SEACO"). The agreement provided for Sears to have
55
<PAGE>
the right to purchase up to one and one-half million gallons (1,500,000) of ICE
BAN(R), subject to certain provisions relating to resales to SEACO. On October
8, 1998, the Company issued 19,674 shares of its common stock to Baise, Miller &
Freer PC of Washington, D.C. in payment of professional fees. The Company relied
upon the exemption from registration provided by ss.4(2) of the Act and Rule
506.
On February 10, 1999, the Company issued 22,687 shares of its common
stock to Baise, Miller & Freer PC of Washington, D.C. as payment of professional
fees. The Company relied upon the exemption from registration provided by
ss.4(2) of the Act and Rule 506.
On April 16, 1999, the Company issued 17,957 shares of its common stock
to Baise, Miller & Freer PC of Washington, D.C. as payment of professional fees.
The Company relied upon the exemption from registration provided by ss.4(2) of
the Act and Rule 506.
On or about, May 5, 1999, Richard Jurgenson was elected Chairman of the
Board of Directors. Richard Jurgenson first joined the Company's board in April
1998 and was President of MCP as well as one of its founders.
In August 1999, NSC filed a claim against Jeffrey Johnson, a former
officer of the Company, members of the Warren Johnson, Jr. family and others
charging fraud, conversion of funds, civil theft, embezzlement, tortuous
interference and racketeering under the RICO statute. The Company requested the
trustee in Kapila Trustee vs. Warren Douglas, Jr. et al. (U.S. Bankruptcy Court,
Southern District of Florida Case No. 92-33339 BKC SHF Chapter 7) to rescind the
issuance of approximately five million shares of the Company's stock issued to
the Johnson Family and which has now been frozen by the Bankruptcy Trustee. The
lawsuits that were filed by the Johnsons and others alleged that the Company
does not have a legitimate ownership in one of the patents it claims and for
that reason investors and others were misled. This patent relates to the "Toth"
patent. See Part I., Item 1. Description of Business. -(b) Business of Issuer,
(4) "Competitive business conditions and issuer's competitive position in the
industry and methods of competition."
On October 29, 1999, the Company entered into a Stock Purchase
Agreement with Dr. Pat Robertson wherein he invested an additional one million
dollars ($1,000,000) in the Company in exchange for 4,000,000 shares of
restricted common stock, $0.001 par value per share. The Company relied upon the
exemption from registration provided by ss.4(2) of the Act and Rule 506 and
ss.13.1-507 of the Virginia Code. Mr. Robertson was elected Chairman of the
Board of Directors subsequent to the closing of the aforementioned Stock
Purchase Agreement.
Item 8. Description of Securities.
(a) Common or Preferred Stock.
The Company is authorized to issue 55,000,000 shares of common stock,
$0.001 par value per share (the "Common Stock"). As of September 30, 1999 there
were fifteen million eight
56
<PAGE>
hundred eighty-nine thousand (15,889,000) shares of common stock outstanding.
Subject to any superior rights of any outstanding preferred stock of
the Company, the holders of Common Stock (i) have equal rights to dividends from
funds legally available therefore, when, as and if declared by the Board of
Directors of the Company; (ii) are entitled to share ratably in all of the
assets of the Company available for distribution to holders of Common Stock upon
liquidation, dissolution or winding up of the affairs of the Company; (iii) do
not have preemptive, subscription or conversion rights and there are no
redemption or sinking fund provisions applicable thereto; and (iv) are entitled
to one non-cumulative vote per share on all matters on which stockholders may
vote at all meetings of shareholders. All of the shares of Common Stock now
outstanding are fully paid and non-assessable and all shares of Common Stock
which were subject to offerings, when issued, would have been fully paid and
non-assessable. Holders of the Common Stock of the Company do not have
cumulative voting rights, which means that the holders of a majority of such
outstanding shares, voting for the election of directors, can elect all of the
directors to be elected by the holders of the Common Stock if they so choose
and, in such event, the holders of the remaining shares will not be able to
elect any of the Company's directors.
The Company is authorized to issue 20,000,000 shares of preferred
stock, $0.001 par value per share (the "Preferred Stock"). The Preferred Stock
may be issued from time to time in one or more classes or series, each class or
series of which shall have the voting rights, designations, preferences and
relative rights as fixed by resolution of the Company's Board of Directors,
without the consent or approval of the Company's shareholders. The Preferred
Stock may rank senior to the Common Stock as to dividend rights, liquidation
preferences, or both, and may have extraordinary or limited voting rights. There
are no shares currently outstanding.
The transfer agent for the common stock of the Company is Atlas Stock
Transfer Company located at 5899 South State Street, Salt Lake City, Utah 84107.
(b) Debt Securities.
There are no debt securities to be registered and no provisions
required to be disclosed.
(c) Other Securities to Be Registered.
None.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters.
(a) Market Information.
The Company's common stock is traded on the NASD Over-the-Counter
Bulletin Board (OTC Bulletin Board). The Company's stock symbol is "ICEB". The
Company makes no assurances whether NSC will be able to maintain the
requirements necessary for such listing. The Company could become de-listed from
such market if certain regulatory requirements are not met; such regulatory
requirements which could risk de-listing include the timing of the filing of
this SEC
57
<PAGE>
disclosure document (Form 10-SB). As of November 15, 1999 there were nineteen
million nine hundred ninety-six thousand five hundred and forty (19,996,540)
shares outstanding. A summary of the historical quotes for the Company's common
stock is presented in table form below. Over- the-counter market quotations are
provided. The quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commission and may not represent actual transactions. The prices
(high/low) are rounded up or down to the nearest one-hundredth. The time periods
are the Company's fiscal year which begins on August 1 and ends the following
July 31; the comparative calendar year time period is displayed in parenthesis
under the time period heading for the normal calendar year. Data for the past
month of August 1999 (calendar) is also shown.
<TABLE>
<CAPTION>
Historical Quotes*
Fiscal Year Normal Calendar High Low Total Volume
Year
New Fiscal Year (August 1999) 2.69 0.81 31,400
<S> <C> <C> <C> <C>
4th Quarter 1999 (May 99-Jul 99) 1.56 0.81 21,500
3rd Quarter 1999 (Feb 99-Apr 99) 2.13 1.38 55,900
2nd Quarter 1999 (Nov 98-Jan 99) 5.00 2.00 71,200
1st Quarter 1999 (Aug 98-Oct 98) 6.50 3.88 112,600
4th Quarter 1998 (May 98-Jul 98) 7.00 4.66 41,900
3rd Quarter 1998 (Feb 98-Apr 98) 7.50 5.50 83,200
2nd Quarter 1998 (Nov 97-Jan 98) 14.25 6.55 101,500
1st Quarter 1998 (Aug 97-Oct 97) 14.25 5.00 91,200
</TABLE>
- --------------------------
* Data used in the construction of this chart was obtained from Yahoo!Finance.
(b) Holders.
As of November 15, 1999 the approximate number of holders of record of
the Company's common stock is 482.
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<PAGE>
(c) Dividends.
The Company has never declared any dividends and does not intend to
declare any in the foreseeable future. The Company is, however, through its
Directors, authorized by "ARTICLE VI. DIVIDENDS" of its by-laws to declare
dividends from time to time.
Item 2. Legal Proceedings.
1. Jeffrey Johnson vs. Natural Solutions, Case No. CL-99-3185, in the
Circuit Court in and for Palm Beach County, Florida. This was a lawsuit by Jeff
Johnson filed on March 26, 1999, seeking to enforce his employment agreement.
The employment agreement called for arbitration and the Company successfully
moved to have the case arbitrated. Johnson has filed an arbitration proceeding
and the Company has responded with an answer and defenses. The Company expects
that this matter will be arbitrated sometime in January, 2000.
Dianne Johnson and Johnson Family vs. Ice Ban America, IBAC Corporation,
Case No. 99-8228, United States District Court, Southern District of Florida.
This lawsuit was filed on March 26, 1999. It is a lawsuit for securities fraud
by the Johnson family seeking damages for breach of various security regulations
and laws due to alleged violations by IBA and IBAC. IBA filed a Motion to
Dismiss. Natural Solutions Corporation and IBAC filed a Counterclaim to rescind
the sale of the founders stock. The stock owned by the Johnson family is
founders stock for which the Johnson family paid approximately $4,000 to Natural
Solutions Corporation and $6,000 to IBAC. Recently IBA and IBAC have filed a
substantial counterclaim, alleging breach of fiduciary duty, breach of
securities acts, RICO, fraud, etc. against the Johnson family arising out of the
actions of Warren D. Johnson, Jr., and the Johnson family in selling restricted
founders shares of stock in private sales before the restrictions were lifted.
Initial discovery has been done in this case. Although scheduled for trial in
January, 2000, the Plaintiffs have recently moved to extend the trial date.
Dianne Johnson and the Johnson Family vs. Natural Solutions Corporation,
Ice Ban USA, Inc. and George Janke, Case No. 99-5305, in the Circuit Court in
and for Palm Beach County. This is a lawsuit by the Johnson Family seeking to
rescind the sale of Ice Ban, Inc., (New York) to Natural Solutions Corporation,
which sale occurred in the summer of 1997, based upon alleged fraudulent
misrepresentations surrounding the ownership of the Toth patent. The Company has
filed an answer, affirmative defines, and counterclaim similar to the
counterclaim in item #2.
Minnesota Corn Processors vs. Natural Solutions Corporation, Ice Ban USA,
Inc., George A. Janke, Case No. 99-8405, in the United States District Court,
Southern District of Florida. This lawsuit was filed on May 28, 1999. This is a
lawsuit for fraudulent misrepresentation and for a recission of an Agreement of
Sale between MCP and NSC also based upon misrepresentations regarding the Toth
patent. The Company's legal counsel moved to dismiss the initial Complaint and
MCP filed an Amended Complaint. In the Amended Complaint, the same claims were
made, and the claims were made to collect approximately $230,000 purportedly due
and owed by NSC to MCP. The Company has not yet responded to the Amended
Complaint but is planning on responding with a Motion to Dismiss. The Company
59
<PAGE>
has recently filed a scheduling agreement and scheduling order which would set
this case for trial in September 2000. Discovery of MCP representatives had been
scheduled but was delayed due to settlement discussions. This case was resolved
by settlement on October 8, 1999. Final papers have been executed.
Natural Solutions Corporation and Ice Ban USA, Inc. vs. Sears Oil, Sears
Petroleum, et al., Case No. 99-3344. In the Circuit Court in and for Palm Beach
County. This is a lawsuit filed on April 6, 1999, by Natural Solutions
Corporation and Ice Ban USA for tortuous interference with NSC's rights to
acquire the Toth patent from the Hungarian inventors. This action also claims
breach of fiduciary duty, breach of a confidentiality agreement by Sears and
others acting in concert with Sears. Service has been obtained on most of the
Defendants, and motions to dismiss, motions for lack of personal jurisdiction,
and motions to transfer to New York were scheduled for late August 1999. Some
limited discovery on jurisdiction has been undertaken in this case.
Sears Oil Company vs. Natural Solutions Corporation, Ice Ban USA, George
Janke, et al., Case No. 99-CV-704-DNH. This is an action filed on January 25,
1999, in New York State Court, but removed to New York Federal Court. This
action alleges fraudulent misrepresentations based upon the ownership of the
Toth patent and fraudulent inducement into a certain contract for the
distribution of product in New England based upon fraudulent misrepresentations
regarding ownership of the Toth patent. Motions have been filed by IBUSA and
George Janke for lack of jurisdiction and motions have been filed by all
Defendants for failure to state a cause of action. No trial has been scheduled
in this case, and if the motions are unsuccessful, we contemplate filing
counterclaims similar to the case referenced in paragraph 5 above. Plaintiff has
recently amended their Complaint alleging patent infringement of the Toth
patent. In October 1999 Sears Oil and Sears Petroleum sought a temporary
restraining order that SeaCo was the exclusive distributor for Ice Ban(R)product
in the New England States. The Judge denied their request for TRO and Sears
withdrew its claim for injunctive relief in late October 1999.
Ice Ban America, Inc. vs. Innovative Municipal Products, Inc., Case No.
99-00710, State Court of New York. This lawsuit was filed on March 24, 1999, by
IBA to recover two hundred fifty-thousand dollars ($250,000) owed to it by its
New York distributor, Innovative Municipal Products, Innovative has filed
affirmative defenses and counterclaims based upon the misrepresentation
regarding the Toth patent. Natural Solutions has answered and filed affirmative
defenses on the counterclaim. Discovery is ongoing in this case, and it has not
been set for trial.
Item 3. Changes in and Disagreements with Accountants.
The Company's auditor is Cronin & Co., Certified Public Accountants,
with it principal address at 12 Blandford Lane, Fairport, NY 14450. The Company
has had no changes in its accountants or auditors, nor any disagreements with
such.
Item 4. Recent Sales of Unregistered Securities.
The Company relied upon ss.3(b) of the Act and Rule 504 for several
transactions regarding the issuance of its unregistered securities. In each
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<PAGE>
instance, such reliance was based on the following: (i) the aggregate offering
price of the offering of the shares of Common Stock and warrants did not exceed
$1,000,000, less the aggregate offering price for all securities sold with the
twelve months before the start of and during the offering of shares in reliance
on any exemption under ss.3(b) of, or in violation of ss.5(a) of the Act; (ii)
no general solicitation or advertising was conducted by the Company in
connection with the offering of any of the shares; (iii) the fact the Company
has not been since its inception (a) subject to the reporting requirements of
ss.13 or ss.15(d) of the Securities Act of 1934, as amended, (b) and "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or (c) a development stage company that either has no specific business plan or
purpose or has indicated that its business plan is to engage in a merger or
acquisition with an unidentified company or companies or other entity or person.
The Company relied upon ss.4(2) of the Act and Rule 506 for several
transactions regarding the issuance of its unregistered securities. In each
instance, such reliance was based upon the fact that (i) the issuance of the
shares did not involve a public offering, (ii) there were no more than 35
investors (excluding "accredited investors"), (iii) each investor who was not an
accredited investor either alone or with his purchaser representative(s) has
such knowledge and experience in financial and business matters that he is
capable of evaluating the merits and risks of the prospective investment, or the
issuer reasonably believes immediately prior to making any sale that such
purchaser comes within this description, (iv) the offers and sales were made in
compliance with Rules 501 and 502, (v) the securities were subject to Rule 144
limitation on resale and (vi) each of the parties is a sophisticated purchaser
and had full access to the information on the Company necessary to make an
informed investment decision by virtue of the due diligence conducted by the
purchaser or available to the purchaser prior to the transaction.
The Company relied upon Florida Code ss.517.061(11) for several
transactions. In each instance, such reliance is based on the following: (i)
sales of the shares of Common Stock were not made to more than 35 persons; (ii)
neither the offer nor the sale of any of the shares was accomplished by the
publication of any advertisement; (iii) all purchasers either had a preexisting
personal or business relationship with one or more of the executive officers of
the Company or, by reason of their business or financial experience, could be
reasonably assumed to have the capacity to protect their own interests in
connection with the transaction; (iv) each purchaser represented that he was
purchasing for his own account and not with a view to or for sale in connection
with any distribution of the shares; and (v) prior to sale, each purchaser had
reasonable access to or was furnished all material books and records of the
Company, all material contracts and documents relating to the proposed
transaction, and had an opportunity to question the executive officers of the
Company. Pursuant to Rule 3E-500.005, in offerings made under ss.517.061(11) of
the Florida Statutes, an offering memorandum is not required; however each
purchaser (or his representative) must be provided with or given reasonable
access to full and fair disclosure of material information. An issuer is deemed
to be satisfied if such purchaser or his representative has been given access to
all material books and records of the issuer; all material contracts and
documents relating to the proposed transaction; and an opportunity to question
the appropriate executive officer. In the regard, the Company supplied such
information and was available for such questioning (the "Florida Exemption").
61
<PAGE>
The facts relied upon to make the New York exemption available include
the following: (i) the aggregate number of persons purchasing the Company's
stock during the 12 month period ending on the date of issuance did not exceed
40 persons (including offerees who reside outside the State of New York); (ii)
neither the offer nor the sale of any of the shares was accomplished by a public
solicitation or advertisement; (iii) that at the time of filing no offering had
yet been made to any resident of the State of New York, (iv) that the offering
is to be made to personal friends, relatives, and business associates and other
principals of the issuer, (v) these common shares have been issued or sold in
reliance of Section ss.359-f(2) of the New York General Business Law, (vi) each
purchaser executed a statement to the effect that the securities purchased have
been purchased for their own account and not for the resale to any other
persons; (vii) that they have adequate means of providing for their current
needs and possible personal contingencies; and (viii) they do not have a need
for liquidity of this investment.
The facts relied upon to make the Maryland exemption available include
compliance with ss.4(2) of the Act. Such a security is a covered security within
the meaning of ss.18(b)(4)(D) of the Act. Pursuant to ss.11-602 (15), ss.11-501
and Rule 9 of the Maryland Code, such securities are exempt from registration
requirements. The issuer is required under Maryland law to, no later than 15
days after the first sale of securities in Maryland, submit a notice filing
subject to certain guidelines and any applicable fees. The issuer has not as of
yet made the requisite notice filing in the State of Maryland.
The facts relied upon to make the Virginia exemption available include
compliance with ss.4(2) of the Act. Such security is a covered security within
the meaning of ss.18(b)(4)(D) of the Act. Pursuant to ss.13.1-507 of the
Virginia Code such securities are exempt from registration requirements.
Pursuant to Rule 21 VAC 5-40-120 of the Virginia Code such issuer is required to
submit a notice filing subject to certain guidelines and any applicable fees.
The issuer has not as of yet made the requisite notice filing in the State of
Virginia.
Prior to the August 31, 1996 execution of the licensing agreement, on
August 16, 1996, in consideration of obtaining such licensing agreement
concerning intellectual property rights related to de-icing and anti-icing
products, and payment of five thousand dollars ($5,000), the Company issued
founders shares to George Janke, in his capacity as trustee for certain family
members, and to Warren D. Johnson, Jr. George Janke, as trustee, received five
million eight-hundred thousand (5,800,000) shares of common stock and Warren D.
Johnson, Jr. received six million four-hundred thousand (6,400,000) shares of
common stock. These shares were issued pursuant to the exemption from
registration provided by ss.4(2) of the Securities Act of 1933, as amended (the
"Act") and ss.517.061(11) of the Florida Code.
During the period from September 23, 1996 through November 1, 1996, the
Company sold one million shares (1,000,000) of its common stock at ten cents
($0.10) per share, raising a total of $100,000. This offering was conducted
pursuant to ss.3(b) of the Act and Rule 504 of Regulation D promulgated
thereunder. This offering was made in the State of New York and to non-resident
foreign citizens. An offering memorandum was used in connection with the
offering.
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Commencing December 30, 1996 and through February 1, 1997, the Company
sold nine hundred thousand shares (900,000) of its common stock at one dollar
($1.00) per share, raising a total of $900,000. This offering was conducted
pursuant to ss.3(b) of the Act and Rule 504 of Regulation D promulgated
thereunder. This offering was made in the State of New York and to non-resident
foreign citizens. An offering memorandum was used in connection with the
offering.
On February 21, 1997, the Company entered into an agreement to sell
common stock to Minnesota Corn Processors Company (MCP) in exchange for supplies
of the by-product which MCP produces and which the Company brands ICE BAN(R).
This arrangement provided the Company with nearly fifty percent (50%) of the
Company's product supply. Mr. Richard Jurgenson, former President of MCP and the
executive that guided MCP to a preeminent position in the corn processing
industry, and who was instrumental in negotiating MCP's stock sale to ADM, also
at that time agreed to join the Board of Directors of the Company. In accord
with this agreement, on February 21, 1997, the Company committed one million
one-hundred seventy thousand (1,170,000) shares of common stock to MCP for the
exchange of raw material for the ICE BAN(R) product. The amount of raw material
is based on the market value of the product and the stock at the time of
shipment based upon a formula agreed to between the Company and MCP. The
contract's provisions include: (1) MCP agreed to conduct laboratory and field
testing of ICE BAN(R) and TEMBIND(R), (2) MCP agreed to use its resources to
promote further development of ICE BAN(R) and TEMBIND(R), (3) MCP agreed to
provide tankage and distribution as well as sales and service in its market, (4)
MCP agreed to confidentiality and non-compete provisions, (5) the Company
granted MCP an option to purchase an additional 1,170,000 shares on the same
terms as previously agreed to, and (6) IBA granted MCP pre-emptive rights to
maintain a 15% stake in the Company. The Company relied upon the exemption from
registration provided by ss.4(2) of the Act and Rule 506 of Regulation D ("Rule
506"), promulgated thereunder, and ss.80A.15 (Subd. 2)(h) of the Minnesota Code.
On July 29, 1997, in an exchange of stock, the Company acquired IBNY,
the only licensee with territorial rights to ICE BAN(R) in the U.S. (i.e.
upstate New York and Erie, Pennsylvania) which was not included in the original
license to the Company. This acquisition provided the Company with a fully
operational and cash generating company to enhance its business. The
acquisition, moreover, provided additional personnel experienced in the
Company's line of business. IBA issued 1.3 million shares of its common stock to
acquire 100% of the common stock of IBNY. In the same transaction, an additional
one hundred thousand (100,000) shares of the Company was issued to IBUSA, a
corporation which was owned by Warren D. Johnson, Jr. and George Janke, for the
waiver of its non-assignability provision in its licensing agreement. Mr. Janke
is the inventor of the patents that cover the ICE BAN(R) products. As a result
of this acquisition of IBNY, the Company's license now extends to the entire
United States. In acquiring IBNY, the Company had also acquired the national
distribution rights to the TEMBIND(R) product. TEMBIND is a by- product of wood
products produced by Tembec, Inc. The Company would later re-brand the product
as RB ULTRA(TM) PRODUCTS.
IBNY owned the license to the ICE BAN(R) products in upstate New York
and Erie County, Pennsylvania, and also the license to market and distribute
TEMBIND(R) in the United States. Included within the overall structure of the
transaction was the obligation of IBNY to assign said rights to IBUSA (from
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whence they came) with the further agreement that IBUSA would assign the rights
to the Company or its designee, which it did, in consideration for one hundred
thousand (100,000) shares of the Company's common stock. Pursuant to the
transaction, the 100,000 shares of the Company's common stock was issued to
IBUSA in consideration for the waiver of its non- assignability provision in its
licensing agreement with IBNY in regard to the license of ICE BAN(R) products in
upstate New York and Erie County, Pennsylvania. The Company relied upon the
exemption from registration provided by ss.4(2) of the Act and Rule 506.
On August 22, 1997, the Company issued to David Wright a total of 5,000
shares of its common stock, Ann M. Owen a total of 2,000 shares, Continental
Capital & Equity Corp. a total of 55,000 shares, and Cullen M. Ryan a total of
10,000 shares, all in payment of professional fees. The Company relied upon the
exemption to registration provided by ss.4(2) of the Act and Rule 506 and
ss.517.061(11) of the Florida Code. On the same date, the Company issued
Castlebar Industries Corp. Profit Sharing Plan a total of 10,000 shares in
payment of professional fees. The Company relied upon ss.49:3-50(b)(9) of the
New Jersey Code and upon ss.4(2) of the Act and Rule 506. Robert E. Freer was
issued 40,000 shares in payment of professional fees as well. The Company relied
upon the exemption from registration provided by ss.4(2) and ss.11-602 (15),
ss.11-501 and Rule 9 of the Maryland Code.
On or about November 7, 1997, Pat Robertson entered into an agreement
with the Company which allowed him to acquire up to one million shares of
restricted common stock over the next two years. On November 7, 1997, a total of
150,000 shares was issued at the purchase price of $7.50 per share, and warrants
to purchase an additional 1,000,000 shares of common stock were issued by and in
consideration for an aggregate price of $1,125,000 if all warrants are
exercised. The Company relied upon the exemption from registration provided by
ss.4(2) of the Act and Rule 506 and ss.13.1-507 of the Virginia Code.
Summary of Company's Warrants Issued to Pat Robertson on November 7, 1999
<TABLE>
<CAPTION>
Date Designation Exercise Exercise Exercise Shares Replaced by
Date Date Price
Starting Ending
<S> <C> <C> <C> <C> <C> <C>
11/07/97 W-1 11/07/97 6/07/99 $7.50/share 150,000 W-1A
(8/10/1999)
11/07/97 W-2 11/07/97 6/07/99 $12.00/share 350,000 W-2A
(8/10/1999)
11/07/97 W-3 11/07/97 1/07/00 $7.50/share 150,000 W-1A
(8/10/1999)
11/07/97 W-4 11/07/97 1/07/00 $15.00/share 350,000 W-2A
(8/10/1999)
Total 1,000,000
</TABLE>
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<PAGE>
On December 19, 1997, the Company issued 4,651 shares of its common
stock to Minnesota Corn Processors (MCP) as payment for product. The Company
relied upon the exemption from registration provided by ss.4(2) of the Act and
Rule 506 and ss.80A.15 (Subd. 2)(h) of the Minnesota Code.
On February 20, 1998, the Company issued 25,391 shares of its common
stock to Minnesota Corn Processors (MCP) as payment for product. The Company
relied upon the exemption from registration provided by ss.4(2) of the Act and
Rule 506 and ss.80A.15 (Subd. 2)(h) of the Minnesota Code.
On March 4, 1998, the Company issued 10,000 shares of its common stock
to Robert E. Freer as payment of professional fees. The Company relied upon the
exemption from registration provided by ss.4(2) of the Act and ss.11-602 (15),
ss.11-501 and Rule 9 of the Maryland Code.
On April 23, 1998, the Company issued 35,000 shares of its common stock
to Baise, Miller & Freer PC of Washington, D.C. as payment of professional fees.
The Company relied upon the exemption from registration provided by ss.4(2) of
the Act and Rule 506.
On June 12, 1998, the Company issued 10,000 shares of its common stock
to Floyd Chapman and 10,000 shares of its common stock to Ann M. Owen, both were
for payment of professional fees. The Company relied upon the exemption from
registration provided by ss.4(2) of the Act and Rule 506 and ss.517.061(11) of
the Florida Code.
On June 16, 1998, the Company issued 914 shares of its common stock to
MCP in payment for product. The Company relied upon the exemption from
registration provided by ss.4(2) of the Act and Rule 506 and ss.80A.15 (Subd.
2)(h) of the Minnesota Code.
On July 17, 1998, the Company issued 20,000 shares of its common stock
to Richard Stanton as payment of professional fees. The Company relied upon the
exemption from registration provided by ss.4(2) of the Act and ss.11-602 (15),
ss.11-501 and Rule 9 of the Maryland Code.
On August 13, 1998, the Company issued 10,000 shares of its common
stock to Leo Palmer as payment of professional fees. The Company relied upon the
exemption from registration provided by ss.4(2) of the Act and Rule 506 and
ss.517.061(11) of the Florida Code.
On September 15, 1998, the Company issued 784 shares of its common
stock to MCP as payment for product. The Company relied upon the exemption
provided by ss.4(2) of the Act and Rule 506 and ss.80A.15 (Subd. 2)(h) of the
Minnesota Code.
On October 8, 1998, the Company issued 19,674 shares of its common
stock to Baise, Miller & Freer PC of Washington, D.C. in payment of professional
65
<PAGE>
fees. The Company relied upon the exemption from registration provided by
ss.4(2) of the Act and Rule 506.
On January 11, 1999, the Company issued 200 shares of its common stock
to Andrew Deggeller as an award. The Company relied upon the exemption provided
by ss.4(2) of the Act and Rule 506 and ss.517.061(11) of the Florida Code.
On January 21, 1999, the Company issued 9,465 shares of its common
stock to Minnesota Corn Processors (MCP) as payment for product. The Company
relied upon the exemption provided by ss.4(2) of the Act and Rule 506 and
ss.80A.15 (Subd. 2)(h) of the Minnesota Code.
On February 10, 1999, the Company issued 22,687 shares of its common
stock to Baise, Miller & Freer PC of Washington, D.C. as payment of professional
fees. The Company relied upon the exemption from registration provided by
ss.4(2) of the Act and Rule 506.
On March 25, 1999, the Company issued 24,761 shares of its common stock
to MCP as payment for product. The Company relied upon the exemption from
registration provided by ss.4(2) of the Act and Rule 506 and ss.80A.15 of the
Minnesota Code. Also, on March 25, 1999, the Company issued 3,056 shares of its
common stock to Nick D. Hansen for as payment for professional fees. The Company
relied upon the exemption from registration provided by ss.4(2) of the Act and
Rule 506 and ss.517.061(11) of the Florida Code.
On April 16, 1999, the Company issued 17,957 shares of its common stock
to Baise, Miller & Freer PC of Washington, D.C. as payment of professional fees.
The Company relied upon the exemption from registration provided by ss.4(2) of
the Act and Rule 506.
On August 11, 1999, Pat Robertson invested an additional seven hundred
fifty thousand dollars ($750,000) with the Company. In consideration for this
additional investment, Pat Robertson received stock warrants. NSC and Pat
Robertson executed a convertible debenture whereby the Company is to pay Pat
Robertson on August 11, 2001 the principal sum of seven hundred and
fifty-thousand dollars ($750,000), interest is ten percent (10%) per annum which
interest may be converted at the Company's election to pay in cash or shares of
its common stock, each share to be valued at seventy-five cents per share
($0.75/share). On August 11, 2001 upon the execution of Election to Convert, the
debenture may be converted to shares of stock on the outstanding amount due at
seventy-five cents per share ($0.75/share) or the Company will pay the debenture
back in cash. In the event that NSC is unable to pay back the debenture at the
end of two years and Pat Robertson does not wish to convert said debenture into
shares of NSC's stock, a third-party, namely George Janke, who is also a related
party of the Company, acting as Trustee for the Janke Family Trust, has secured
this debenture with collateral. In addition to this August 11, 1999 debenture,
the associated Warrants were executed on August 10, 1999. The Company relied
upon the exemption from registration provided by ss.4(2) of the Act and Rule 506
and ss.13.1-507 of the Virginia Code.
66
<PAGE>
Summary of Company's Warrants Issued to Pat Robertson on August 10, 1999
<TABLE>
<CAPTION>
Date Designation Exercise Exercise Exercise Shares Replaces the
Date Date Price following
Starting Ending warrants
<S> <C> <C> <C> <C> <C> <C>
08/10/99 W-1A 08/10/99 08/28/00 $0.75/share 1,000,000 W-1 and W-3
(from 11/07/97
Agreement)
08/10/99 W-2A 8/10/99 8/09/04 $0.75/share 2,000,000 W-2 and W-4
(From 11/07/97
Agreement)
Total 3,000,000
</TABLE>
On October 29, 1999, the Company entered into a Stock Purchase
Agreement with Dr. Pat Robertson wherein he invested an additional one million
dollars ($1,000,000) in the Company in exchange for 4,000,000 shares of
restricted common stock, $0.001 par value per share. The Company relied upon the
exemption from registration provided by ss.4(2) of the Act and Rule 506 and
ss.13.1-507 of the Virginia Code. Upon the closing of the above Stock Purchase
Agreement Mr. Robertson was appointed as Chairman of the Board of Directors of
the Company.
Item 5. Indemnification of Directors and Officers.
The Company's by-laws provide for indemnification of Directors and
Officers. Specifically, ARTICLE V. "INDEMNIFICATION OF OFFICERS AND DIRECTORS",
provides that the corporation shall indemnify any and all of its Directors and
Officers, and its former Directors and Officers, or any person who may have
served at the corporation's request as a Director or Officer of another
corporation in which it owns shares of capital stock or of which it is a
creditor. The indemnification covers actual and necessary expenses incurred by
them in connection with the defense of any action, suit or proceeding, in which
they, or any of them, are made parties, or a party, be reason of being or having
been a Director or Officer, except it does not provide coverage in relation to
matters as to which they shall have been adjudged in such action, suit or
proceeding to be liable for negligence or misconduct in the performance of duty.
PART F/S
The Financial Statements of Natural Solutions, INC., and Notes to Financial
Statements together with the Independent Auditor's Report of Cronin and Company,
CPA's, required by this Item 13 commence on page F-1 hereof and are incorporated
herein by this reference.
67
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Independent Auditors' Report............................F-1
Balance Sheets..........................................F-2
Income Statement .......................................F-3
Statements of Cash Flows................................F-4
Statements of Changes in Stockholders' Equity...........F-5
Summary of Significant Accounting Policies..............F-6
Notes to Financial Statements...........................F-8
<PAGE>
Cronin & Company
Certified Public Accountants
1574 Eagle Nest Circle
Winter Springs, Florida 32708
Board of Directors and Shareholders
Natural Solutions Corporation
North Palm Beach, Florida
We have audited the accompanying consolidated balance sheet of Natural
Solutions Corporation as of July 31, 1999 and 1998 and the related consolidated
statements of income, cash flows and stockholders' equity for the years then
ended. The financial statements are the responsibility of the directors. 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 except as described in the following paragraph. 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.
We did not observe the taking of a portion of the physical inventory as of
July 31, 1999 (stated at $286,872) and were unable to satisfy ourselves as to
the inventory quantity by means of other auditing procedures.
In our opinion, except for the effects of such adjustments, if any, as might
have been determined to be necessary had we been able to observe the physical
inventories, the financial statements referred to above present fairly, in all
material respects, the financial position of Natural Solutions Corporation as of
July 31, 1999 and 1998 and the results of its operations, its cash flows and
changes in stockholders' equity for the years then ended in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The Company has been in the development stage
since inception, August 14, 1996, and has incurred operating losses of $
5,133,173 through July 31, 1999. As a result of these continued losses, the
Company has been unable to generate sufficient cash flow from its operating
activities to support current operations. The Company's ability to generate
sufficient future cash flows from its operating activities in order to sustain
future operations cannot be determined at this time. The Company has primarily
funded its operations through the sale of its common stock. There can be no
assurance that the Company will be able to do so in the future, and, if so, will
provide sufficient capital and on terms favorable to the Company. These
uncertainties raise substantial doubt about the Company's ability to continue as
a going concern. The financial statements do not include any adjustments that
might arise from the outcome of these uncertainties.
September 2, 1999
/s/Cronin & Company
Certified Public Accountants
F-1
<PAGE>
<TABLE>
<CAPTION>
NATURAL SOLUTIONS CORPORATION
(a development stage company)
(formerly known as ICE BAN AMERICA, INC.)
Balance Sheet
July 31, 1999 and 1998
ASSETS
July 31, 1999 July 31, 1998
<S> <C> <C>
Current Assets:
Cash & Cash Equivalents $ 0 $ 125,265
Receivables -Trade 86,339 401,503
-Employees 0 11,221
-Other 5,375 122,746
Inventories 626,872 698,582
Prepaid Expenses 62,736 94,740
----------- ------------
Total Current Assets 781,322 1,454,057
Property & Equipment-Net 112,453 119,228
Investment in Affiliate 18,750 110,000
Other Assets:
Licensing Agreement (net of amortization) 419,620 522,341
Other Intangible Assets 3,686 3,686
Deferred Tax Asset 0 217,606
------------- ----------
Total Other Assets 423,306 743,633
Total Assets $ 1,335,831 $ 2,426,918
========= ==========
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable-Trade $ 1,115,754 $ 430,391
Accrued Expenses 180,856 17,527
Current Portion of Long Term Debt 82,000 82,000
Current Portion of Long Term Debt-Related Parties 124,968 61,951
Liability to Issue Common Stock 0 50,000
-------------- ----------
Total Current Liabilities 1,503,578 641,869
Long Term Debt-Related Parties 132,032 195,049
Stockholders' Equity:
Common Stock Authorized-55 Million Shares
Issued-15.997 Million Shares 15,997 15,889
Additional Paid-in Capital 4,939,124 4,512,276
Other Comprehensive Income (121,727) (25,477)
Deficit Accumulated During Development Stage (5,133,173) (2,912,688)
----------- ----------
Total Stockholders' Equity (299,779) 1,590,000
Total Liabilities & Stockholders' Equity $ 1,335,831 $ 2,426,918
========= ===========
</TABLE>
F-2
See Summary of Accounting Policies and Notes
to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
NATURAL SOLUTIONS CORPORATION
(a development stage company)
(formerly known as ICE BAN AMERICA, INC.)
Income Statement
July 31, 1999 and 1998
Fiscal Year Fiscal Year Aug. 14, 1996
Ended Ended ( inception)
July 31, 1999 July 31, 1998 To July 31, 1999
------------- ------------- ----------------
<S> C> <C> <C>
Net Sales 2,100,199 $ 1,994,415 $ 4,594,662
Costs Applicable to Sales & Revenue 1,601,552 1,635,726 3,593,573
----------- ------------ -------------
Gross Profit 498,647 358,689 1,001,089
Selling, General & Administrative Expenses 2,455,157 2,953,134 6,104,507
Interest 47,017 2,485 49,502
------------ ------------- -------------
(Loss) Before Other Income And Income Taxes (2,003,527) (2,596,930) (5,152,920)
Other Income:
Investment Income 648 10,212 20,072
--------------- ------------- --------------
Net Income (Loss) Before Taxes (2,002,879) (2,586,718) (5,132,848)
Income Tax Expense (Benefit) 217,606 0 325
------------- -------------- -------------
Deficit Accumulated During Development
Stage $ (2,220,485) $ (2,586,718) $ (5,133,173)
============= ============ ==============
Basic Net Loss Per Common Share $ (0.14) $ ( 0.16)
============= ==========
Weighted Average Common Shares 15,923,733 15,753,032
=========== ============
Outstanding
</TABLE>
F-3
See Summary of Accounting Policies and Notes
to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
NATURAL SOLUTIONS CORPORATION
(a development stage company)
(formerly known as ICE BAN AMERICA, INC.)
Statement of Cash Flows
July 31, 1999 and 1998
Fiscal Year Fiscal Year Aug.14, 1996
Ended Ended (inception)
July 31, 1999 July 31, 1998 To July 31, 1999
------------- ------------- ----------------
<S> <C> <C> <C>
Operating Activities:
Deficit Incurred During Development Stage $ (2,220,485) $ (2,586,718) $ (5,133,173)
Non-Cash Expenses Included in Net Income:
Depreciation & Amortization 120,722 189,965 327,896
Bad Debts 340,781 116,932 457,713
Adjustment for Deferred Taxes 217,606 0 0
Product & Services Purchased for Stock & Options 426,957 1,732,612 2,159,569
Adjustments to Reconcile Net Loss to Cash
Provided (Consumed) by Operating Activities:
(Increase) in Accounts Receivable (25,617) (399,939) (475,536)
(Increase) Decrease in Inventory 71,710 (572,466) (596,007)
(Increase) Decrease in Prepaid Expenses (17,996) 24,331 (62,759)
Increase in Accounts Payable & Accruals 834,444 87,031 1,191,969
----------- ------------- -------------
Cash Consumed by Operating Activities (251,878) (1,408,252) (2,130,328 )
Financing Activities:
Proceeds From the Issuance of Common Stock 0 1,125,122 2,202,592
Payment of Offering Costs 0 0 (19,273)
(Payment) of Long Term Debt 0 0 (50,000)
Proceeds of Long Term Debt 0 62,000 62,000
(Payment) of Long Term Debt-Related Parties (5,037) (155,000) (160,037)
Proceeds of Long Term Debt-Related Parties 10,883 412,000 422,883
----------- ---------- -----------
Cash Generated by Financing Activities 5,846 1,444,122 2,458,165
Investing Activities:
Payment of Organization Costs 0 0 (905)
Expenditures on Research & Development 0 0 (30,784)
Fees Paid for Patents & Trademark Registration 0 0 (42,357)
Acquisition of Equipment (11,225) (89,483) (126,866)
Payment of Initial Licensing Fee 0 0 (100,000)
Advances to Affiliates & Employees 0 (114,870) (114,870)
Payments Collected on Advances 122,746 41,059 163,805
Purchase of Investment in Affiliate (5,000) (110,000) (115,000)
----------- ----------- ---------
Cash Expended on Investing Activities 106,521 (273,294) (366,977)
Net Decrease in Cash (139,511) (237,424) (39,140)
Cash & Cash Equivalents-Beginning 125,265 362,689 24,894
---------- ----------- ----------
Cash & Cash Equivalents-Ending-(Included in payables) $ (14,246) $ 125,265 $ (14,246)
=========== =========== ===========
</TABLE>
F-4
See Summary of Accounting Policies and Notes
to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
NATURAL SOLUTIONS CORPORATION
(a development stage company)
(formerly known as ICE BAN AMERICA, INC.)
Consolidated Statement of Changes in Stockholders' Equity
August 14, 1996 (inception) to July 31, 1999
Common Stock
Deficit
Accumulated
Additional Other During
Paid-in Comprehensive Development
Shares Par Value Capital Income Stage
<S> <C> <C> <C> <C> <C>
Balance July 31, 1997 15,400,000 $ 15,400 $ (25,477) $ (325,970)
1,062,997
Stock Issued to Secure Additional Licensing Rights 100,000 100
Stock Issued for Services 207,000 207 531,900
Stock Issued for Product 31,740 32 950,323
Stock Issued in Exchange for Cash 150,000 150 192,206
Options Issued Under Employment Agreements 1,124,850
Deferred Compensation Under Employment Options (4,086,920)
Net Loss July 31, 1998 (3,436,920) (2,586,718)
-------------- -------- ----------- ----------
Balance July 31, 1998 15,888,740 $ 15,889 $ (25,477) $ (2,912,688)
========== ======== =========== ============
$
Stock Issued for Services 73,574 74 4,512,276
=========
Stock Issued for Product 34,226 34
Valuation Charge-Marketable Securities 316,797 (96,250)
Net Loss July 31, 1999 110,051 (2,220,485)
------------ ------- ---------- -------------
Balance July 31, 1999 15,996,540 $ 15,997 $(121,727) $ (5,133,173)
========== ======== ---------- =========== ==============
$4,939,124
</TABLE>
F-5
See Summary of Accounting Policies and Notes
to Consolidated Financial Statements.
<PAGE>
NATURAL SOLUTIONS CORPORATION
(a development stage company)
(formerly known as ICE BAN AMERICA, INC.)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Year Ended July 31, 1999
Principles of Consolidation
The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries, Ice Ban America, Inc., a Nevada
corporation, Ice Ban, Inc., a New York corporation, and Roadbind America,
Inc., a Nevada corporation and Ice Ban Holdings, Inc., a Florida
corporation,. The Ice Ban, Inc. combination is accounted for as a pooling
of interests. Roadbind America, Inc., Ice Ban America, Inc. and Ice Ban
Holdings, Inc. were formed by the Company as wholly owned subsidiaries. All
intercompany balances and transactions have been eliminated. For further
information see Note 5. The Investment in Unconsolidated Affiliate has been
accounted for under the equity method.
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 and
disclosure of contingent assets and liabilities at the date of the
financial statement and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from the
estimates.
Cash & Cash Equivalents
For financial statement presentation purposes, the Company considers those
short-term, highly liquid investments with original maturities of three
months or less to be cash or cash equivalents.
Inventories
Inventories consist of de-icing and road binding agents held for resale and
are valued at average lower of cost (First in-First out) or market.
Property & Equipment
Property and equipment are recorded at cost. Depreciation is computed using
the straight line method over the estimated useful lives of the assets,
generally 10 years. Expenditures for renewals and betterments are
capitalized. Expenditures for minor items, repairs and maintenance are
charged to operations as incurred. Gain or loss upon sale or retirement due
to obsolescence is reflected in the operating results in the period the
event takes place.
Revenue Recognition
Sales are recognized when a product is delivered or shipped to the customer
and all material conditions relating to the sale have been substantially
performed.
Stock Based Compensation
Stock based compensation is accounted for by using the intrinsic value
based method in accordance with Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25"). The Company has
adopted Statements of Financial Accounting Standards No. 123, "Accounting
for Stock Based Compensation, ("SFAS 123") which allows companies to either
continue to account for stock based compensation to employees under APB 25,
or adopt a fair value based method of accounting. The Company has elected
to continue to account for stock based compensation to employees under APB
25 but has made the required SFAS 123 pro forma disclosures in accordance
with SFAS 123.
Fair Value of Financial Instruments
Statements of Financial Accounting Standards No. 107, "Disclosures About
Fair Value of Financial Instruments," requires disclosure of fair value
information about financial instruments. Fair value
F-6
<PAGE>
Summary of Accounting Principles (Cont'd)
Fair Value of Financial Instruments (Cont'd)
estimates discussed herein are based upon certain market assumptions and
pertinent information available to management as of July 31, 1999. The
respective carrying value of certain on-balance sheet financial instruments
approximated their fair values. These financial instruments include cash
and cash equivalents, marketable securities, trade receivables, accounts
payable and accrued expenses. Fair values were assumed to approximate
carrying values for these financial instruments since they are short term
in nature and their carrying amounts approximate fair values or they are
receivable or payable on demand. The fair value of the Company's notes
payable is estimated based upon the quoted market prices for the same or
similar issues or on the current rates offered to the Company for debt of
the same remaining maturities. The carrying value approximates the fair
value of the notes payable.
Earnings Per Common Share
The Company has adopted the provisions of Statement of Financial Accounting
Standards No. 128 "Earnings Per Share" ("SFAS 128"). SFAS 128 replaces the
previous "primary" and "fully diluted" earnings per share with "basic" and
"diluted" earnings per share. Unlike "primary" earnings per share that
included the dilutive effects of options, warrants and convertible
securities, "basic" earnings per share reflects the actual weighted average
of shares issued and outstanding during the period. "Diluted" earnings per
share are computed similarly to "fully diluted" earnings per share. In a
loss year, the calculation for "basic" and "diluted" earnings per share is
considered to be the same as the impact of potential common shares is
antidilutive. Potential common shares include 1,620,000 options.
Income Taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes,"
("SFAS 109") which requires recognition of estimated income taxes payable
or refundable on income tax returns for the current year and for the
estimated future tax effect attributable to temporary differences and carry
forwards. Measurement of deferred income tax is based on enacted tax laws
including tax rates, with the measurement of deferred income tax assets
being reduced by available tax benefits not expected to be realized.
Impairment of Long Lived Assets
The Company adopted Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long Lived Assets and for Long Lived
Assets to be Disposed of," ("SFAS 121"). SFAS 121 requires impairment
losses to be recorded on long lived assets used in operations and goodwill
when indications of impairment are present and the undiscounted cash flows
estimated to be generated by those assets are less than the carrying amount
of the asset.
Recent Accounting Pronouncements
Effective for periods beginning after December 15, 1997, the Financial
Accounting Standards Board issued Statement of Financial Accounting
Standards No. 131, "Disclosure about Segments of an Enterprise and Related
Information," ("SFAS 131"). SFAS 131 establishes standards for the way that
public companies report information about operating segments in annual
financial statements and requires reporting of selected information about
operating statements in interim financial statements issued to the public.
The Company has not determined the impact the adoption of this new
accounting standard will have on its future financial statements and
disclosures.
F-7
<PAGE>
NATURAL SOLUTIONS CORPORATION
(a development stage company)
(formerly known as ICE BAN AMERICA, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year Ended July 31, 1999
1. The Company (a Nevada corporation) was formed August 14, 1996 to exploit
certain patents and rights to patents covered under a licensing agreement which
will enable Ice Ban America, Inc. to market an agricultural co-product as a road
de-icing and anti-icing product. The product will be marketed under the
copyright protected trade name of ICE BAN R. The original licensing agreement
covered all of the United States except for certain portions of New York State
and Erie County Pennsylvania. Natural Solutions Corporation. is a "Development
Stage" corporation. The Company is devoting substantially all its efforts to
establishing a new business. Planned principal operations have not commenced.
2. Investment in Unconsolidated Affiliate:
In June, 1998 the Company purchased 100,000 shares of IBAC Corporation stock for
$ 110,000. The investment amounts to less than 1% of the 13,755,000 outstanding
shares of IBAC Corporation. Due to factors such as the commonality of several
members of the Board of Directors and officers in each company and the
substantial ownership of stock in each company by Mr. George Janke, as trustee,
this investment has been accounted for under the equity method. Mr. George Janke
is the former President and Chairman of the Board of Directors of Natural
Solutions Corporation and current President and Chairman of the Board of IBAC
Corporation. The current market value for IBAC's common stock approximates its
carrying value at July 31, 1999. Natural Solutions Corporation's equity in the
net loss of its investee for the year ended July 31, 1999 is considered
immaterial.
3. Licensing Agreement & Note Payable:
Ice Ban USA, Inc., is a Florida corporation controlled by Mr. George Janke as
its President & Chairman of the Board of Directors. Ice Ban USA acquired the
sole rights to the use of certain patent rights relating to roadway de-icing &
anti-icing products and their related compositions. On August 31, 1996, Ice Ban
USA, Inc. granted the Company the use of those rights in an exclusive license
agreement for covering substantially all of the United States except for Erie
County, PA and New York State north of the 42nd parallel for consideration of $
100,000. The agreement is for a term of 7 years followed by one year automatic
renewals and is being amortized over the initial minimum term of 7 years. Mr.
George Janke is the former President & Chairman of the Board of Directors of
Natural Solutions Corporation. All rights to the excluded territory reverted to
the Company upon the acquisition of Ice Ban, Inc. on July 29, 1997 (see note 5).
The Company is also required to pay Ice Ban USA, Inc. fees (currently accrued at
$ 38,228) based upon the following schedule:
Period Covered Amount Payable Quarterly
- ----------------------------------------------------------------
September 1, 1996- August 31, 1997 No Fee Due
September 1, 1997- August 31, 1998 1% of Sales
September 1, 1998 and Thereafter 2% of Sales but not to
exceed $ 3/ton
or be less than $ 2/ton
- -----------------------------------------------------------------
On August 14, 1997 the Company issued 100,000 shares of its common stock (valued
at $ 532,000) to Ice Ban, USA, Inc. to acquire additional rights to use certain
other patents and secure a geographic marketing exclusivity agreement. The
marketing agreement allows the Company to market the RoadbindTM product in the
continental United States. This addition to the original licensing agreement of
1996 is being amortized over the 73 months which were remaining in the life of
the original agreement at the date of the addition. Amortization expense for the
years ended July 31, 1999 and 1998 was $102,721 and $102,721 respectively.
F-8
<PAGE>
(Notes to Consolidated Financial Statements Cont'd)
4. Income Taxes:
The Corporation has approximately $ 5,133,173 in net operating loss carryovers
available to reduce future income taxes. These carryovers may be utilized
through the year 2013. The Company has adopted SFAS 109 which provides for the
recognition of a deferred tax asset based upon the value the loss carryforwards
will have to reduce future income taxes and management's estimate of the
probability of the realization of these tax benefits. A summary of the deferred
tax asset presented on the accompanying balance sheet is as follows:
<TABLE>
<CAPTION>
July 31, 1999 July 31, 1998
<S> <C> <C>
Federal Deferred Tax Asset Relating to Net Operating Losses $ 1,603,443 $ 811,361
State Deferred Tax Asset Relating to Net Operating Losses 239,577 128,641
Less Valuation Allowance 1,843,020 722,396
----------- ----------
Total Deferred Tax Asset $ 0 $ 217,606
============== ===========
</TABLE>
5. Business Combination:
On July 29, 1997 the Company issued 1.3 million shares of its common stock to
acquire 100% of the common stock of Ice Ban, Inc. Ice Ban, Inc. is a New York
corporation engaged in the business of selling the Ice BanR product in upstate
New York. The combination is accounted for as a pooling of interests and,
accordingly, reflects the continuing accounting basis of the assets and
liabilities of the acquired corporation. No accounting adjustments were required
to achieve uniform accounting methods. A condensed balance sheet of each company
as well as the operating results of the separate companies prior to the
acquisition and combined results of operations is as follows:
<TABLE>
<CAPTION>
Ice Ban Combined
America, Inc. Ice Ban, Inc. July 31, 1997
<S> <C> <C> <C>
Assets $ 794,424 $ 313,412 $ 1,107,836
Liabilities 166,551 214,335 380,886
Shareholders' Equity 627,873 99,077 726,950
Revenues 0 500,048 500,048
Income/(Loss) ( 365,054) 39,084 ( 325,970)
</TABLE>
6. Major Customers/Suppliers:
At July 31, 1999 and 1998 transactions with two or more suppliers and/or
customers, in the aggregate, have accounted for 10% or more of purchases of
inventory or services and/or sales and also account for 10% or more of the
Company's accounts payable and accounts receivable at those dates as follows:
<TABLE>
<CAPTION>
Amounts Purchased Amounts Payable
Supplier Supplier Supplier Supplier Supplier Supplier
A B C A B C
<S> <C> <C> <C> <C> <C> <C>
July 31, 1998 44.9% 12.6% 20.9% 17.7% 28.3% 7.1%
1999 15.9% 15.3% 7.6% 18.5% 20.3% 0.6%
</TABLE>
<TABLE>
<CAPTION>
Amounts Sold Amounts Receivable
Customer Customer Customer Customer Customer Customer
A B C A B C
<S> <C> <C> <C> <C> <C> <C>
July 31, 1998 51.2% 9.7% 9.6% 37.4% 14.7% 7.4%
1999 25.7% 11.9% 11.9% 56.7% 16.4% 1.7%
</TABLE>
F-9
<PAGE>
(Notes to Consolidated Financial Statements Cont'd)
On February 21, 1997 the Company entered into an agreement with Minnesota Corn
Processors, Inc. (MCP) to purchase its Ice BanR product from MCP in exchange for
issuing up to 1,170,000 (Approx. 7.3% of the current outstanding shares issued)
shares of its common stock. The shares were to be issued over the 3 year term of
the agreement under a formula based upon the relationship of corn value price
per ton and the value of Natural Solutions Corporation stock on the day of
shipment. As of July 31, 1999, 65,966 common shares have been issued under this
agreement. In October 1999, in conjunction with the settlement of a lawsuit
described in note 13, this agreement was terminated and replaced with a fixed
price purchase agreement.
7. Notes Payable & Long Term Debt:
<TABLE>
<S> <C>
Notes Payable to Related Parties consist of two notes payable to Ice Ban USA,
Inc. bearing interest at 5.8% and 7%. $ 257,000
Three short term notes to unrelated individuals bearing interest at 6%-10% 47,000
Secured commercial loan guaranteed by an officer, director &
shareholder of the Corporation also requiring a compensating balance
held in savings for the
full amount of the unpaid balance of the loan, bearing interest at 7%. 35,000
----------
Total 339,000
Less Current Portion 206,967
----------
Total $ 132,033
==========
</TABLE>
A Summary of contractual maturities in each of the following fiscal years ended
July 31, is as follows:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Year Ended Related
July 31: Party Debt Unrelated Total
- ----------- ---------- ------------ --------------
2000 $ 124,967 $ 82,000 $ 206,967
2001 64,144 0 64,144
2002 21,339 0 21,339
2003 22,604 0 22,604
Thereafter 23,946 0 23,946
---------- ------------ ----------
Totals $ 257,000 $ 82,000 $ 339,000
========== ========= ==========
</TABLE>
The Company is in default on $47,000 of unrelated or third party debt.
Subsequent to year end, the terms of repayment of amounts due to Ice Ban USA
were modified to become payable when the Company, in its sole discretion,
determines that it has achieved sufficient, reliable cash flow to satisfy the
notes without jeopardizing the Company's ability to pay its budgeted
expenditures.
8. Commitments:
The Company leases its three office locations, certain storage facilities and
rail cars. Rent expense for the year ended July 31, 1999 and future minimum
lease payments under these operating leases was and is as follows:
<TABLE>
<CAPTION>
Minimum Minimum Minimum Minimum
Description Expense Expense Payment Due Payment Due Payment Due Payment Due
July 31, 1998 July 31, 1999 July 31, 2000 July 31, 2001 July 31, 2002 July 31, 2003
- ----------------- -------------- ------------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Office Space $ 32,096 $ 41,432 $ 42,969 $ 40,419 $ 21,996 $ 0
Storage Tanks 251,260 356,657 325,000 265,000 300,000 0
Rail Cars 52,290 39,030 37,080 37,080 3,090 0
----------- ---------- ----------- --------- ----------- -------------
Totals $ 335,646 $ 437,119 $ 405,049 $ 342,499 $ 325,086 $ 0
========== ========== ========== ========== ========== =============
</TABLE>
F-10
<PAGE>
(Notes to Consolidated Financial Statements Cont'd)
In addition, the Company is also obligated under employment agreements, to
provide minimum compensation to two principal officers in the annual amount of $
121,000 in cash plus certain stock options as outlined in notes 9 & 11. The
Company has recognized an aggregate of $ 85,000 and $686,000 in cash and option
based compensation under these agreements for the fiscal years ended July 31,
1999 and 1998 respectively.
9. Stockholders' Equity:
Common Stock Offering:
On March 31, 1997 the Company concluded two offerings of its common stock to
the public at $.10 and $ 1.00 per share. 1,900,000 shares of its $ 0.001 par
value common stock were issued. The Company received $ 1,000,000 as a result
of these offerings. The offerings were exempt from S.E.C. registration under
Rule 504 of Regulation D. Offering costs such as legal, accounting,
registration fees and filing fees of $ 19,273 were applied against additional
paid in capital and are treated as a reduction of the gross proceeds of the
offerings.
Stock Issued for Product & Services:
During 1999 and 1998, the Company issued an aggregate of 346,540 shares for
professional services, consulting and purchases of its principal products. The
value of these transactions is recorded at fair market value at the date of
contract or delivery, or by a predetermined formula stipulated by the terms of
underlying agreements. The following table summarizes these transactions
<TABLE>
<CAPTION>
1999 1998
------------------------- ---------------------
Weighted Weighted
Average Value Average Value
Shares Per Share Shares Per Share
<S> <C> <C> <C> <C>
Shares Issued for Product 34,226 $ 3.22 31,740 $ 6.06
Shares Issued for Professional Fees and Services 73,574 $ 4.31 207,000 $ 4.58
- --------------------------------------------------------- -------------- ------------- -------------
Total 107,800 238,740
======= =======
</TABLE>
For additional information see note 10.
Stock Based Compensation:
Stock based compensation is accounted for by using the intrinsic value based
method in accordance with Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25"). The Company has adopted
Statements of Financial Accounting Standards No. 123, "Accounting for Stock
Based Compensation, ("SFAS 123") which allows companies to either continue to
account for stock based compensation to employees under APB 25, or adopt a
fair value based method of accounting. The Company has elected to continue to
account for stock based compensation to employees under APB 25. APB 25
recognizes compensation expense for options granted to employees only when the
market price of the stock exceeds the grant exercise price at the date of the
grant. The amount reflected as compensation expense is measured as the
difference between the exercise price and the market value at the date of the
grant.
SFAS 123 requires pro forma disclosures regarding net income and earnings per
share as if the compensation expense had been determined in accordance with
the fair value based method described in SFAS 123. The Company estimates the
fair value of each stock option at the date of grant using the Black-Sholes
option pricing model with the following weighted average assumptions for
grants issued in 1998 and 1999
Dividend Yield None
Expected Life 2 Years
Expected Volatility 68%
Risk Free Interest Rate 6%
F-11
<PAGE>
(Notes to Consolidated Financial Statements Cont'd)
A Summary of employee and non employee options and warrants granted and
exercised for each of the fiscal years ended July 31, 1999 and 1998 is
presented below:
<TABLE>
<CAPTION>
1998 1999
-------------------------- ----------------------
Weighted Weighted
Average Average
Shares Exercise Price Shares Exercise Price
<S> <C> <C> <C> <C>
Balance at Beginning of Year - $ - 1,900,000 $ 6.58
Grants Made During Year:
Employment Agreements 900,000 0.90 570,000 1.05
Other 1,000,000 11.70 - -
Less Options Exercised During Year 0 - - -
Less Options That Expired During Year 0 - 850,000 6.26
------------ ---------- ----------- --------
Amount of Options Outstanding at End of Fiscal Year 1,900,000 $ 6.58 1,620,000 $ 4.80
=========== ======== ========= ==========
Options Exercisable at Year End 1,100,000 $ 10.64 1,170,000 $ 5.96
- --------------------------------------------------------------- ------------ ---------- -----------
Weighted Average Fair Value of Options Granted During Year $ 5.16 $ 0.74
- --------------------------------------------------------------- ------------- --------- -----------
</TABLE>
Summary information for Options outstanding at July 31, 1999 is as follows:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
Weighted Average
Range of Number Outstanding Remaining Weighted Average Amount Exercisable Weighted Average
Exercise Prices at July 31, 1999 Contractual Life Exercise Price at July 31, 1999 Exercise Price
- ------------------- ------------------ ------------------ ------------------- ------------------ ----------------------
<S> <C> <C> <C> <C> <C>
$ 0.00-$ 2.70 1,120,000 78 Months $ 1.26 670,000 $ 0.89
$ 7.50-$15.00 500,000 4 Months $ 12.75 500,000 $ 12.75
</TABLE>
Had compensation cost been determined on the fair market value at the grant date
consistent with SFAS 123, the Company's net loss and loss per share would have
been increased to the pro forma amounts indicated below:
<TABLE>
<S> <C> <C>
1999 1998
Net loss applicable to common shareholders-as reported $(2,220,485) $ (2,586,718)
Net loss applicable to common shareholders-pro forma $(2,714,047) $ (2,714,445)
Basic loss per share-as reported $ ( 0.14) $ ( 0.16)
Basic loss per share-pro forma $ ( 0.17) $ ( 0.17)
</TABLE>
10. Supplemental Cash Flow Information:
Selected non cash investing and financing activities are summarized as follows:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Cash Paid for Interest $ 1,973 2,485
- ------------------------------------------------------------- ------------- ------------
Non Cash Equity Transactions:
Issuance of Common Stock to Acquire Market & Patent Rights $ 0 $ 532,000
Issuance of Common Stock in Exchange for Product 110,086 192,238
Issuance of Common Stock in Exchange for Services 316,871 887,813
Issuance of Common Stock For Other Purposes 0 62,717
- ------------------------------------------------------------- ------------- ------------
</TABLE>
11. Related Party Transactions:
Ice Ban USA, Inc. is a Florida corporation controlled by Mr. George Janke, as
trustee. In consideration for obtaining the licensing agreement disclosed in
note 3, and after having contributed $ 5,000 in cash, the Company issued 6.4
million shares to Mr. Warren Johnson, a former President and director of the
Company and a former officer of Ice Ban USA, Inc., and 5.8 million shares to Mr.
Janke, as trustee, for the benefit of certain members of his family.
F-12
<PAGE>
(Notes to Consolidated Financial Statements Cont'd)
On July 29, 1997, the Company issued 1.3 million shares of its common stock to
acquire 100% of the stock of Ice Ban, Inc. Mr. Jeff Johnson, a former officer &
director of the Company, was also an officer, director & shareholder of Ice Ban,
Inc. prior to the acquisition.
On August 20, 1996, George Janke and the Company entered into a five year
Employment Agreement at an annual salary of $ 85,000 per year with cost of
living increases. The Agreement also provides for up to 150,000 common shares to
be issued on December 1 per year, for 5 years if certain performance goals are
met. . On August 10, 1997, the 1996 agreement was superseded by a new agreement
retroactive to January 1, 1997. The term and salary of the new agreement remain
essentially the same as the old agreement but define the exercise dates and
exercise prices of the options portion of the agreement. See note 9 for relevant
data on employment related stock options issued under this agreement. Mr. Janke
has waived all claims for option based compensation or salary through December
31, 1998 under this agreement.
On May 1, 1997, the Vice President of the Company and the Company entered into a
three year Employment Agreement at an annual salary of $ 36,000 per year with
cost of living increases. The Agreement also provides for additional
compensation to be paid in the form of 100,000 shares of common stock to be
issued on the Agreement anniversary date in each of the three years of the
Agreement. See note 9 for relevant data on employment related stock options
issued under this agreement. The Company has recognized an aggregate of $
686,000 in cash and option based compensation under this agreement for the
fiscal year ended July 31, 1998. In fiscal year 1999 the employment of the Vice
President and this agreement were terminated by the Company. Such termination is
the subject of a lawsuit disclosed on note 13.
In June, 1998 the Company purchased 100,000 shares of the common stock of IBAC
Corporation (the Canadian licensee of Ice BanR products under an agreement with
Ice Ban USA, Inc.) for $ 110,000. The investment amounts to less than 1% of the
13,755,000 outstanding shares of IBAC Corporation. There exists a commonality of
members of the Board of Directors and officers in both Natural Solutions
Corporation and IBAC Corporation as well as a substantial ownership of stock in
each company by Mr. George Janke, as trustee.
During the fiscal year ended July 31, 1999 the Company made payments in both
cash and stock to a law firm in which Robert E. Freer Jr., Esq. is a principal.
Mr. Freer became a Director of the Company in April, 1998. Cash payments
totaling $ 11,518 and 60,318 shares of common stock valued at $ 259,753 were
paid directly to this firm for legal services performed and disbursements made
on behalf of the Company. The Company owed approximately $ 79,020 in unpaid
legal fees to Mr. Freer's law firm at July 31, 1999.
During the fiscal year ended July 31, 1998 the Company made payments in both
cash and stock to either Robert E. Freer Jr., Esq., or to two law firms in which
he was a principal. Mr. Freer became a Director of the Company in April, 1998.
Cash payments totaling $ 185,901 and 35,000 shares of common stock valued at $
139,344 were paid directly to these firms for legal services performed and
disbursements made on behalf of the Company prior to his becoming a director. In
addition 50,000 shares valued at $216,125 were issued directly to Mr. Freer,
also before becoming a director. The Company owed approximately $ 87,000 in
unpaid legal fees to Mr. Freer's current law firm at July 31, 1998.
12. Subsequent Events:
On August 11, 1999 the Company received proceeds of $ 750,000 upon the issuance
of a convertible debenture. The debenture is due and payable on August 31, 2001
and bears interest at 10% per annum. Interest is payable semiannually and may be
paid in cash or, at the election of the Company, in shares of its common stock
valued at $ 0.75 per share. The debenture may be converted, at the option of the
holder, into common shares of the Company at $ 0.75 per share at any time prior
to maturity.
F-13
<PAGE>
(Notes to Consolidated Financial Statements Cont'd)
As an inducement, the Company also granted the holder warrants to acquire up to
3,000,000 shares of its common stock at $0.75 per share. These options expire
August, 2004. These options replace outstanding options on 500,000 shares at a
weighted average exercise price of $ 12.75 that existed at July 31, 1999.
On October 29, 1999 the Company also sold 4,000,000 shares of its common stock
for $1,000,000 in cash.
13. Contingencies and Legal Matters:
Employment Agreement
This lawsuit was filed by the former Vice President of the Company and seeks to
enforce his original employment agreement of an annual salary of $ 36,000 and
300,000 shares of common stock over a three year period. The agreement calls for
an arbitration proceeding that is currently at the initial scheduling conference
stage. The Company intends to defend its dismissal of the employee for good
cause. Management estimates the loss to be the 100,000 shares earned in the
first year under the agreement but not yet issued. The financial statements
reflect the future obligation to issue these shares.
Securities Fraud
This lawsuit seeks damages to certain shareholders for breach of various
security regulations and laws due to alleged violations by the Company. The
former shareholders of Ice Ban, Inc. claim of being defrauded in the receipt of
their stock in the Company in exchange for selling their company, Ice Ban, Inc.,
to Natural Solutions Corporation. The Company has filed a counterclaim alleging,
among other things, breach of fiduciary duty and violation of securities law.
This case is scheduled for trial in January, 2000. Management is uncertain of
the outcome of this case and, if unsuccessful, unable to estimate the amount or
range of potential loss.
Fraudulent Misrepresentation
The selling shareholders of Ice Ban, Inc. seek to rescind the sale of that
company to Natural Solutions Corporation in July of 1997. The suit alleges
management misrepresentation surrounding the ownership of the Toth Patent.
Management believes full and complete disclosure was made at the time of the
acquisition and has filed motions to dismiss and for summary judgment.
Management is uncertain of the outcome in this case but considers a successful
defense likely.
Minnesota Corn Processors (MCP) sued the Company for fraudulent
misrepresentation regarding the Toth Patent and sought to rescind the
exclusivity in its agreement to supply the Company with steepwater used in the
Company's "Ice Ban" product. The Company reached a settlement in October, 1999.
In the settlement, the Company agreed to pay the $235,000 owed to MCP which is
carried in accounts payable at July 31,1999. In addition the supply agreement
was amended as discussed in note 6.
Sears Oil Company alleges fraudulent misrepresentation and inducement regarding
the Toth Patent and seeks to rescind its distribution agreement for the New
England region. Plaintiffs seek damages of $400,000 plus dissolution of a New
York LLC in which both parties are principals. The Company has filed a motion
alleging patent infringement by Sears Oil Company as well as a motion for
failure to state a cause of action. No trial has been scheduled as of the date
of the issuance of these financial statements. Management is uncertain of the
outcome in this case nor unable to estimate the amount or range of potential
loss.
F-14
<PAGE>
PART III
Item 1. Index to Exhibits
2.1 Ice Ban Board of Directors Mtg. Nov. 13, 1997
3.(i).1 Articles of Incorporation Ice Ban Aug. 14, 1996
3.(i).2 Articles of Incorporation Tembind (Roadbind) Oct. 17, 1997
3.(i).3 Articles of Incorporation Natural Solutions Corp.
3.(i).4 Ice Ban Articles of Inc. Amendment Nov. 11, 1998
3.(i).5 Amend. to Articles of Inc. for ICE BAN, INC. 12-02-98
3.(i).6 Amend. of Articles of Inc. ICE BAN 12-11-98
3.(ii).1 Ice Ban America By-Laws
3.(ii).2 Tembind America (Roadbind) Bylaws
10.1 PLM Investment Management
10.2 First Addendum to Crystal Tree Lease July 10, 1997
10.3 Second Addendum to Crystal Tree Lease Feb. 8, 1999
10.4 Tenant Estoppel Cert. Crystal Tree March 30, 1999
10.5 Lease Agreement, Medina NY Feb. 10, 1999
10.6 Office Lease Agreement-NY 6-1-97
10.7 Tembec & Ice Ban Dist Agreement
10.8 Addendum to Agreement between IBA and IBUSA
10.9 Agreement Mountain Products -- Ice Ban
10.10 Caloosa Shell Corp. Supply Agree
10.11 DEDERT- Rental 7-23-98
10.12 Elevage USA Corp
10.13 Lease IBA and Jeanne Whipple Realty
10.14 Na-Churs Plant Food Company
10.15 Roadway Solutions Inc. Sup Agree 4/19/99
<PAGE>
10.16 RPR, Inc. 2/24/99
10.17 Steuben Co-Op terminal agree.9/16/99
10.18 Sweetners Plus
10.19 Transmatrix, Inc. Contract
10.20 Warehouse Lease
10.21 CSX Transportation Agreement 5/12/98
10.22 Crystal Tree Corporate Centre Lease 4/11/97
10.23 Employment Agreement IBA and George Janke dated 8/10/96
Item 2. Description of Exhibits
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this Registration Statement to be signed on its behalf by the
undersigned, hereunto duly authorized
Natural Solutions Corporation
(Registrant)
Date: November15, 1999 By:/s/ Richard Jurgenson
-------------------------------
Richard Jurgenson, President and CEO
Date: November15, 1999 By:/s/ Ann M. Owen
-----------------------------
Ann M. Owen, Secretary
EXHIBIT 3.(i).1
ARTICLES OF INCORPORATION
OF
ICE BAN AMERICA, INC.
FIRST. The name of the corporation is:
ICE BAN AMERICA, INC.
SECOND. Its registered office in the State of Nevada is located at 2533
North Carson Street, Carson City, Nevada 89706 that this Corporation may
maintain an office, or offices, in such other place within or without the State
of Nevada as may be from time to time designated by the Board of Directors, or
by the By-Laws of said Corporation, and that this Corporation may conduct all
Corporation business of every kind and nature, including the holding of all
meetings of Directors and Stockholders, outside the State of Nevada as well as
within the State of Nevada.
THIRD. The objects for which this Corporation is formed are: To engage in
any lawful activity, including, but not limited to the following:
(1) Shall have such rights, privileges and powers as may be conferred
upon corporations by any existing law.
(2) May at any time exercise such rights, privileges and powers, when
not inconsistent with the purposes and objects for which this
corporation is organized.
(3) Shall have power to have succession by its corporate name for the
period limited in its certificate or articles of incorporation, and
when no period is limited, perpetually, or until dissolved and its
affairs wound up according to law.
(4) Shall have power to sue and be sued in any court of law or equity.
(5) Shall have power to make contracts.
(6) Shall have power to hold, purchase and convey real and personal
estate and to mortgage or lease any such real and personal estate with
its franchises. The power to hold real and personal estate shall
include the power to take the same by devise or bequest in the State
of Nevada, or in any other state, territory or country.
(7) Shall have power to appoint such officers and agents as the
affairs of the corporation shall require, and to allow them suitable
compensation.
(8) Shall have power to make By-Laws not inconsistent with the
constitution or laws of the United States, or of the State of Nevada,
for the management, regulation
1
<PAGE>
and government of its affairs and property, the transfer of its stock,
the transaction of its business, and the calling and holding of
meetings of its stockholders.
(9) Shall have power to wind up and dissolve itself, or be wound up or
dissolved.
(10) Shall have power to adopt and use a common seal or stamp, and
alter the same at pleasure. The use of a seal or stamp by the
corporation on any corporate documents is not necessary. The
corporation may use a seal or stamp, if it desires, but such use or
nonuse shall not in any way affect the legality of the document.
(11) Shall have power to borrow money and contract debts when
necessary for the transaction of its business, or for the exercise of
its corporate rights, privileges or franchises, or for any other
lawful purpose of its incorporation; to issue bonds, promissory notes,
bills of exchange, debentures, and other obligations and evidences of
indebtedness, payable at a specified time or times, or payable upon
the happening of a specified event or events, whether secured by
mortgage, pledge or otherwise, or unsecured, for money borrowed, or in
payment for property purchased, or acquired, or for any other lawful
object.
(12) Shall have power to guarantee, purchase, hold, sell, assign,
transfer, mortgage, pledge or otherwise dispose of the shares of the
capital stock of, or any bonds, securities or evidences of the
indebtedness created by, any other corporation or corporations of the
State of Nevada, or any other state or government, and, while owners
of such stock, bonds, securities or evidences of indebtedness, to
exercise all the rights, powers and privileges of ownership, including
the right to vote, if any.
(13) Shall have power to purchase, hold, sell and transfer shares of
its own capital stock, and use therefor its capital, capital surplus,
surplus, or other property or fund.
(14) Shall have power to conduct business, have one or more offices,
and hold, purchase, mortgage and convey real and personal property in
the State of Nevada, and in any of the several states, territories,
possessions and dependencies of the United States, the District of
Columbia, and any foreign countries.
(15) Shall have power to do all and everything necessary and proper
for the accomplishment of the objects enumerated in its certificate or
articles of incorporation, or any amendment thereof, or necessary or
incidental to the protection and benefit of the corporation, and, in
general, to carry on any lawful business necessary or incidental to
the attainment of the objects of the corporation, whether or not such
business is similar in nature to the objects set forth in the
certificate or articles of incorporation of the corporation, or any
amendment thereof.
(16) Shall have power to make donations for the public welfare or for
charitable, scientific or educational purposes.
2
<PAGE>
(17) Shall have power to enter into partnerships, general or limited,
or joint ventures, in connection with any lawful activities, as may be
allowed by law.
FOURTH. The total number of shares of stock which the Corporation shall
have authority to issue is SEVENTY-FIVE MILLION (75,000,000), consisting of
TWENTY MILLION (20,000,000) share of Preferred Stock, par value $0.001 per share
(hereinafter referred to as "Preferred Stock"), and FIFTY FIVE MILLION
(55,000,000) shares of Common Stock, par value $0.001 per share (hereinafter
referred to as "Common Stock").
The Preferred Stock may be issued from time to time in one or more series.
The Board of Directors is hereby authorized to provide for the issuance of
shares of Preferred Stock in series and, to establish from time to time the
number of shares to be included in each such series, and to fix the designation,
powers, preferences and rights of the shares of each such series and the
qualifications, limitations and restrictions thereof. The authority of the board
of Directors with respect to each series shall include, but not be limited to,
determination of the following:
(1) The designation of the series, which may be by distinguishing
number, letter or title.
(2) The number of shares of the series, which number of the Board of
Directors may thereafter (except where otherwise provided in the
Preferred Stock Designation) increase or decrease (but not below the
number of shares thereof then outstanding).
(3) The amounts payable on, and preferences, if any, of shares of the
series in respect of dividends, and whether such dividends, if any,
shall be cumulative or noncumulative.
(4) Dates at which dividends, if any, shall be payable.
(5) The redemption rights and price or prices, if any, for shares of
the series.
(6) The terms and amount of any sinking fund provided for the purchase
or redemption of shares of the series.
(7) The amounts payable on, and the preferences, if any, of shares of
the series in the event of any voluntary or involuntary liquidation,
dissolution or winding up the affairs of the Corporation.
(8) Whether the shares of the series shall be convertible into or
exchangeable for shares of any other class or series, or any other
security, of the Corporation or any other corporation, and if so, the
specification of such other class or series of such other security,
the conversion or exchange price or prices or rate or rates, any
adjustments thereof, the date or dates at which such shares shall be
convertible or
3
<PAGE>
exchangeable and all other terms and conditions upon which such
conversion or exchange may be made.
(9) Restrictions on the issuance of shares of the same series or of
any other class or series.
(10) The voting rights, if any, of the holders of shares of the
series. The Common Stock shall be subject to the express terms of the
Preferred Stock and series thereof. Except as may be provided in this
Certificate of Incorporation or in a Preferred Stock Designation, the
holders of shares of Common Stock shall be entitled to one vote for
each such share upon all questions presented to the stockholders, the
Common Stock shall have the exclusive right to vote for the election
of directors and for all other purposes, and holders of Preferred
Stock shall not be entitled to receive notice of any meeting of
stockholders at which they are not entitled to vote.
The Corporation shall be entitled to treat the person in whose name any
share of its stock is registered as the owner thereof for all purposes and shall
not be bound to recognize any equitable or other claim to, or interest in, such
share on the part of any other person, whether or not the Corporation shall have
notice thereof, except as expressly provided by applicable law.
FIFTH. The governing board of this corporation shall be known as directors,
and the number of directors may from time to time be increased or decreased in
such manner as shall be provided by the By-Laws of this corporation, providing
that the number of directors shall not be reduced to fewer than one (1).
The name and post office address of the first Board of Directors shall be
one (1) in number and listed as follows:
NAME POST OFFICE ADDRESS
Robert Seligman 2533 North Carson Street
Carson City, Nevada 89706
SIXTH. The capital stock, after the amount of the subscription price, or
par value, has been paid in, shall not be subject to assessment to pay the debts
of the corporation.
SEVENTH. The name and post office address of the Incorporator signing the
Articles of Incorporation is as follows:
NAME POST OFFICE ADDRESS
Robert Seligman 2533 North Carson Street
Carson City, Nevada 89706
4
<PAGE>
EIGHTH. The resident agent for this corporation shall be:
LAUGHLIN ASSOCIATES, INC.
The address of said agent, and, the registered or statutory address of this
corporation in the state of Nevada, shall be:
2533 North Carson Street
Carson City, Nevada 89706
NINTH. The corporation is to have perpetual existence.
TENTH. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized:
Subject to the By-Laws, if any adopted by the Stockholders, to make, alter
or amend the ByLaws of the Corporation. To fix the amount to be reserved as
working capital over and above its capital stock paid in; to authorize and cause
to be executed, mortgages and liens upon the real and personal property of this
Corporation.
By resolution passed by a majority of the whole Board, to designate one (1)
or more committees, each committee to consist of one or more of the Directors of
the Corporation, which, to the extent provided in the resolution, or in the
By-Laws of the Corporation , shall have and may exercise the powers of the Board
of Directors in the management of the business and affairs of the Corporation.
Such committee, or committees, shall have such name, or names, as may be stated
in the By-Laws of the Corporation, or as may be determined from time to time by
resolution adopted by the Board of Directors.
When and as authorized by the affirmative vote of the Stockholders holding
stock entitling them to exercise at least a majority of the voting power given
at a Stockholders meeting called for that purpose, or when authorized by the
written consent of the holders of at least a majority of the voting stock issued
and outstanding, the Board of Directors shall have power and authority at any
meeting to sell, lease or exchange all of the property and assets of the
Corporation, including its good will and its corporate franchises, upon such
terms and conditions as its Board of Directors deems expedient and for the best
interest of the Corporation.
ELEVENTH. No shareholder shall be entitled as a matter of right to
subscribe for or receive additional shares of any class of stock of the
Corporation, whether now or hereafter authorized, or any bonds, debentures or
securities convertible into stock, but such additional shares of stock or other
securities convertible into stock may be issued or disposed of by the Board of
Directors to such persons and on such terms as in its discretion it shall deem
advisable.
TWELFTH. No director or officer of the Corporation shall be personally
liable to the Corporation or any of its stockholders for damages for breach of
fiduciary duty as a director or officer involving any act or omission of any
5
<PAGE>
such director or officer; provided, however, that the foregoing provision shall
not eliminate or limit the liability of a director or officer (i) for acts or
omissions which involve intentional misconduct, fraud or a knowing violation of
law, or (ii) the payment of dividends in violation of Section 78.300 of the
Nevada Revised statutes. Any repeal or modification of this Article by the
stockholders of the Corporation shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director or
officer of the Corporation for acts or omissions prior to such repeal or
modification.
THIRTEENTH. This Corporation reserves the right to amend, alter, change or
repeal any provision contained in the Articles of Incorporation, in the manner
now or hereafter prescribed by statute, or by the Articles of Incorporation, and
all rights conferred upon Stockholders herein are granted subject to this
reservation.
I, THE UNDERSIGNED, being the Incorporator hereinbefore named for the
purpose of forming a Corporation pursuant to the General Corporation Law of the
State of Nevada, do make and file these Articles of Incorporation, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have hereunto set my hand this 14th day of August 1996.
/s/Robert Seligman
Robert Seligman
STATE OF NEVADA )
) SS:
CARSON CITY )
On this 14th day of August, 1996 in Carson City, Nevada, before me, the
undersigned, a Notary Public in and for Carson City, State of Nevada, personally
appeared: Robert Seligman Known to me to be the person whose name is subscribed
to the foregoing document and acknowledged to me that he executed the same.
Notary Public
I, Laughlin associates, Inc. hereby accept as Resident Agent for the
previously named Corporation.
August 14, 1996
Date R. Seligman
Executive Vice President
6
EXHIBIT 3.(i).2
ARTICLES OF INCORPORATION
OF
TEMBIND AMERICA INC.
FIRST: The name of this corporation is:
TEMBIND AMERICA INC.
SECOND: Its principal office in the State of Nevada is located at 502 East
John Street, Carson City, Nevada, 89706. The name and address of its resident
agent is SCS Services of Nevada, Inc., at the above address.
THIRD: The nature of the business or objects or purposes proposed may be
organized under the General Corporation Law of the State of Nevada;
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Nevada.
FOURTH: The total authorized capital stock of the corporation is 500,000
shares with a Par Value of $.001 Per Share.
FIFTH: The governing board of this corporation shall be known as directors,
and the number of directors may from time to time be increased or decreased in
such manner as shall be provided in the By-laws of this corporation, provided
that the number of directors shall not be reduced less than one unless there is
less than one stockholder.
The name and post office address of the first Board of Directors, which
shall be one in number, is as follows:
NAME POST OFFICE ADDRESS
George Janke 1201 U.S. Highway one, #205
North Palm Beach, FL 33408
SIXTH: The capital stock, after the amount of the subscription price, or
par value, has been paid in, shall not be subject to assessment to pay the debts
of the corporation.
SEVENTH: The name and post office address of the incorporation signing the
Articles of Incorporation is as follows:
NAME POST OFFICE ADDRESS
B. Gould 502 E. John Street
Carson City, NV 89706
<PAGE>
EIGHTH: The corporation is to have perpetual existence.
NINTH: In furtherance and not in limitation of the powers conferred by
statue, the Board of Directors is expressly authorized, subject to the By-laws,
if any, adopted by the shareholders, to make, alter or amend the By-laws of the
corporation.
TENTH: Meetings of stockholders may be held outside of the State of Nevada
at such place or places as may be designated from time to time by the Board of
Directors or in the By-laws of the corporation.
ELEVENTH: This corporation reserves the right to amend, alter, change or
repeal any provision contained in the Articles of Incorporation, in the manner
now or hereafter prescribed, and all rights conferred upon stockholders herein
are granted subject to this reservation.
I, THE UNDERSIGNED, being the sole incorporator herein before named for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Nevada, do make and file these Articles of Incorporation, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have hereunto set my hand this seventeenth day of October, A.D., 1997.
/s/ B. Gould
- -------------------------
B. Gould, Incorporator
STATE OF NEVADA )
)SS
CARSON CITY )
On this seventeenth day of October, A.D., 1997, before me a Notary Public,
personally appeared, B. Gould, who severally acknowledged that he/she executed
the above instrument.
- -----------------------------------
Notary Public
CERTIFICATE OF ACCEPTANCE OF APPOINTMENT OF RESIDENT AGENT
I, B. Gould, Authorized Representative, on behalf of SCS Services of
Nevada, Inc. hereby accepts appointment as Resident Agent of the above-name
corporation.
___________________________________ October 16, 1997
Authorized Representaive
EXHIBIT 3.(i).3
ARTICLES OF INCORPORATION
OF
NATURAL SOLUTIONS CORPORATION
ARTICLE I
The name of this Corporation is Natural Solutions Corporation.
ARTICLE II
It's registered agent is CSC Services of Nevada, Inc. It's registered office in
the State of Nevada is located at 502 East John Street, Carson City, Nevada
89706.
ARTICLE III
The purpose of this Corporation is to engage in any lawful act or activity for
which corporations may be organized under the General Corporation Law of Nevada.
The Corporation shall possess and may exercise all powers and privileges
necessary or convenient to effect such purpose and all powers and privileges now
or hereafter conferred by the laws of Nevada upon corporations formed under the
General Corporation Law of Nevada.
ARTICLE IV
The total number of shares of all classes of capital stock which the Corporation
shall have the authority to issue is 150 million shares which shall be divided
into two classes as follows:
(a) 50 million (50,000,000) shares of Preferred Stock of a par value of .001
each; and (b) 100 million (100,000,000) shares of Common Stock of the par value
of one one-thousandths of a dollar (.001) per share.
ARTICLE V
A statement of the voting powers and of the designations, preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations and restrictions thereof, of each class of stock of
the Corporation, is as follows:
(1) In general
No holders of any class of stock, or other securities convertible into stock of
any class, shall be entitled as of right to subscribe for, purchase, or receive
any stock of any class whether now or hereafter authorized, or any bonds,
debentures or other securities whether now or hereafter authorized, convertible
into stock of any class, or any stock into which said bonds, debentures or
1
<PAGE>
other securities may be convertible, and all such additional shares of stock,
debentures or other securities, together with the stock into which the same may
be converted, may be issued and disposed of by the Board of Directors to such
persons and on such terms and for such consideration (as far as may be permitted
by law) as the Board of Directors in their absolute discretion may deem
advisable. All persons who shall acquire stock in the Corporation shall acquire
the same subject to the provisions of these Articles of Incorporation.
(2) Preferred Stock
The Preferred Stock may be issued from time to time in one or more series, with
such distinctive serial designations as may be stated or expressed in the
resolution or resolutions providing for the issue of such stock adopted from
time to time by the Board of Directors; and in such resolution or resolutions
providing for the issue of shares of each particular series, the Board of
Directors is also expressly authorized to fix: the consideration for which the
shares of such series are to be issued; the number of shares constituting such
series; the rate of dividends upon which and the times at which dividends on
shares of such series shall be payable and the preference, if any, which such
dividends shall have relative to dividends on shares of any other class or
classes or any other series of stock of the Corporation; whether such dividends
shall be cumulative or noncumulative, and if cumulative, the date or dates from
which dividends on shares of such series shall be cumulative; the voting rights,
if any, to be provided for shares of such series; the rights, if any, which the
holders of shares of such series shall have in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation; the rights, if any, which the holders of shares of such series
shall have to convert such shares into or exchange such shares for shares of any
other class or classes or any other series of stock of the Corporation and the
terms and conditions, including price and rate of exchange, of such conversion
or exchange; the redemption price or prices and other terms of redemption, if
any, for shares of such series; and any and all other preferences and relative,
participating, optional or other special rights and qualifications, limitations
or restriction thereof pertaining to shares of such series.
(3) Common Stock
(a) Subject to preferences and rights to which holders of stock other than
the Common Stock may have become entitled by resolution or resolutions
of the Board of Directors as hereinbefore provided, such dividends
(payable in cash, stock or otherwise) as may be determined by the
Board of Directors may be declared and paid out of funds legally
available therefor upon the Common Stock from time to time.
(b) In the event of any liquidation, dissolution or winding up of the
affairs of the Corporation, the holders of the Common Stock shall be
entitled to share ratably in all assets available for distribution to
the shareholders, subject to preferences and rights to which the
holders of stock other than the Common Stock may have become entitled
by resolution or resolutions of the Board of Directors as hereinbefore
provided.
2
<PAGE>
(c) The holders of Common Stock shall be entitled to one vote for each of
the shares held by them of record at the time for determining holders
thereof entitled to vote.
ARTICLE VI
(1) The following corporate action shall require the approval, given at a
stockholders' meeting or by consent in writing, of the holders of at least
two-thirds of the stock issued and outstanding and entitled to vote
thereon:
(a) the dissolution of the Corporation, or
(b) the sale, lease, exchange or other conveyance of all or substantially
all of the asets of the Corporation,
(c) the adoption of an agreement for the merger or consolidation of the
company with or into any other entity, but no stockholder approval
shall be rquired for any merger or consolidation which, under the Laws
of Nevada, need not be approved by the stockholders of the
Corporation.
(2) The number of authorized shares of any class or classes of stock may be
increased or decreased by the approval of the holders of a majority of all
of the stock of the Corporation entitled to vote thereon, except to the
extent that, in the resolution or resolutions providing for the issuance of
a class or series of stock, the Board of Directors shall specify that
approval of the holders of one or more classes or series of stock shall be
required to increase or decrease the number of authorized shares of one or
more classes or series of stock.
(3) Any action required or permitted to be taken by the stockholders of the
Corporation must be effected at a duly called annual or special meeting of
stockholders of the Corporation and may not be effected by any consent in
writing by such stockholders, except for stockholder approvals required by
Section (1) of this Article VI.
(4) Meetings of stockholders of the corporation may be called only by the Board
of Directors pursuant to a resolution adopted by the affirmative vote of a
majority of the entire Board of Directors, by the Chairman of the Board or
by the Chief Executive Officer.
ARTICLE VII
The private property of the stockholders of the Corporation shall not be subject
to the payment of corporate debts to any extent whatever.
3
<PAGE>
ARTICLE VIII
(1) Power of the Board. The business and affairs of the Corporation shall be
managed under the directions of its Board of Directors. In furtherance, and
not in limitation, of the powers conferred by the laws of the State of
Nevada, the Board of Directors is expressly authorized:
(a) to make, alter, amend or repeal the By-Laws of the Corporation;
provided, however, that no By-Laws hereafter adopted shall invalidate
any prior act of the Directors that would have been valid if such
By-Laws had not been adopted;
(b) to determine the rights, powers, duties, rules and procedures that
affect the power of the Board of Directors to direct the business and
affairs of the Corporation, including the power to designate and
empower committees of the Board of Directors, to elect, appoint and
empower the officers and other agents of the Corporation, and to
determine the time and place of, and the notice requirements for,
Board meetings, as well as quorum and voting requirements (except as
otherwise provided in these Articles of Incorporation) for, and the
manner of taking, Board action; and
(c) to exercise all such powers and do all such acts as may be exercised
by the Corporation, subject to the provisions of the laws of the State
of Nevada, these Articles of Incorporation, and the By-Laws of the
Corporation.
(2) Number of Directors. The number of Directors constituting the entire Board
of Directors shall not be less than 1 nor more than 15. The specific number
of Directors constituting the entire Board of Directors shall be as
authorized from time to time by the affirmative vote of a majority of the
entire Board of Directors. As used in these Articles of Incorporation, the
term "entire Board of Directors" means the total authorized number of
Directors that the Corporation would have if there were no vacancies. The
initial Director is George E. Janke, 1201 U.S. Highway One, Suite 205,
North Palm Beach, Florida, 33408. The initial board shall consist of one
member.
(3) Classified Board. Commencing with the election of directors at the first
annual meeting of stockholders of the Corporation, the Board of Directors
shall be divided into three classes, designated as Class I, Class II and
Class III, respectively, and to be composed of as nearly an equal number of
directors as possible. Upon any change in the size of the Board of
Directors, each class shall consist, initially, of such number and identity
of directors as the Board of Directors shall determine. The initial term of
office of the Class I Directors shall expire at the second annual meeting
of stockholders of the Corporation; the initial term of office of the Class
II Directors shall expire at the third annual meeting of stockholders of
the Corporation; the initial term of office of the Class III Directors
shall expire at the fourth annual meeting of shareholders of the
Corporation. At each annual meeting of the stockholders, the successors to
the class of Directors whose term shall then expire shall be elected to
hold office for a term expiring at the third succeeding annual meeting of
stockholders, and until the qualification of their successors, or until
their earlier resignation or removal from office.
4
<PAGE>
(4) Nominations. Subject to the rights of holders of any series of Preferred
Stock or any other class of capital stock of the Corporation (other than
the Common Stock) then outstanding, nominations for the election of
Directors may be made by the affirmative vote of a majority of the entire
Board of Directors or by any stockholder of record entitled to vote
generally in the election of Directors. However, any stockholder of record
entitled to vote generally in the election of Directors may nominate one or
more persons for election as Directors at a meeting only if a written
notice of such stockholder's intent to make such nomination or nominations,
meeting the requirements described below, has been given, either by
personal delivery or by United States mail, postage prepaid, to the
Secretary of the Corporation, and received by the Corporation, not less
than 50 days nor more than 75 days prior to the meeting at which the
election is to take place; provided, however, that in the event that less
than 60 days' notice or prior public disclosure of the date of the meeting
is given or made to stockholders, notice by the stockholder to be timely
must be so received not later than the close of business on the 10th day
following the day on which such notice of the date of meeting was mailed or
such public disclosure was made, whichever first occurs. Each such notice,
to the Secretary shall set forth: (i) the name and address of record of the
stockholder who intends to make the nomination; (ii) a representation that
the stockholder is a holder of record of shares of the Corporation entitled
to vote at such meeting and intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the notice; (iii)
the name, age, business and residence addressed, and principal occupation
or employment of each nominee; (iv) a description of all arrangements or
understanding between the stockholder and each nominee and any other person
or persons (naming such person or persons) pursuant to which the nomination
or nominations are to be made by the stockholder; (v) such other
information regarding each nominee proposed by such stockholder as would be
required to be included in a proxy statement filed pursuant to the proxy
rules of the Securities and Exchange Commission; and (vi) the consent of
each nominee to serve as a Director of the Corporation if so elected. The
Corporation may require any proposed nominee to furnish such other
information as may reasonably be required by the Corporation to determine
the elegibility of such proposed nominee to serve as a Director of the
Corporation. The presiding officer of the meeting may, if the facts
warrant, determine that a nomination was not made in accordance with the
foregoing procedure, and if he should so determine, he shall so declare to
the meeting and the defective nomination shall be disregarded.
(5) Vacancies. Subject to the rights of the holders of any series of Preferred
Stock or any other class of capital stock of the Corporation (other than
the Common Stock) then outstanding, any vacancies in the Board of Directors
for any reason and any newly created Directorships resulting by reason of
any increase in the number of Directors may, if occurring prior to the
expiration of the term of office of the class in which such vacancy or
increase occurs, be filled only by the Board of Directors, acting by the
affirmative vote of a majority of the remaining Directors, although less
than a quorum, and any Directors so elected shall hold office until the
next election of the class for which such Directors have been elected and
until his or her successors are elected and qualified.
5
<PAGE>
(6) Removal of Directors. Subject to the rights of the holders of any series of
Preferred Stock or any other class of capital stock of the Corporation
(other than the Common Stock) then outstanding, (i) any Director, or the
entire Board of Directors, may be removed from office at any time prior to
the expiration of his or their term of office, but only for cause and only
be the affirmative vote of the holders of record of outstanding shares
representing at least eight percent (80%) of the voting power of all of the
shares of capital stock of the corporation then entitled to voted generally
in the election of Directors, voting together as a single class, and (ii)
any Director may be removed from office by the affirmative vote of a
majority of the entire Board of Directors, at any time prior to the
expiration of his terms of office.
ARTICLE IX
Whenever a compromise or arrangement is proposed between this Corporation and
its creditors or any class of them and/or between this Corporation and its
stockholders or any class of them, any court of equitable jurisdiction within
the State of Nevada may, on the application in a summary way of this Corporation
or of any creditor or stockholder thereof, or on the application of any receiver
or receivers appointed for this Corporation under the provisions of the Nevada
Code or on the application of trustees in dissolution or of any receiver or
receivers appointed for this Corporation under the provisions of the Nevada Code
order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the case may be,
to be summoned in such manner as the said court directs. If creditors
representing three-fourths in value of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this Corporation, as the
case may be, agree to any compromise or arrangement and to any reorganization of
this Corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this Corporation, as the case may be, and also on this
Corporation.
ARTICLE X
The Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Articles of Incorporation in the manner now or
hereafter prescribed by law, and all rights and powers conferred herein on
stockholders, directors and officers are subject to this reserved power;
provided that, notwithstanding the fact that a lesser percentage may be
specified by the General Corporation Law of Nevada, the affirmative vote of the
holders of record or outstanding shares representing at least eighty percent
(80%) of the voting power of all the shares of capital stock of the Corporation
then entitled to vote generally in the election of Directors, voting together as
a single class shall be required to amend, alter, change, repeal, or adopt any
provision or provisions inconsistent with, Section (2) of Article V, Sections
(3) and (4) of Article VI, and Articles VIII and X (except for the second
proviso of this Article X) of this Articles of Incorporation unless such
amendment, alteration, change, repeal or adoption of any inconsistent provision
or provisions is declared advisable by the Board of Directors by the affirmative
vote of at least eight percent (80%) of the Board of Directors; and provided
further that, notwithstanding the fact that a lesser percentage may be specified
by the General Corporation Law of Nevada, the affirmative vote of the holders of
6
<PAGE>
record of outstanding shares representing at least eight percent (80%) of the
voting power of all the outstanding Voting Stock of the corporation, voting
together as a single class, shall be required to amend, alter or repeal, or
adopt any provision or provisions inconsistent with, any provision of Article X
or this proviso of this Article X, unless such amendment, alteration, repeal, or
adoption of any inconsistent provision or provisions is declared advisable by
the Board of Directors by the affirmative vote of at least seventy-five percent
(75%) of the entire Board of Directors and by a majority of the continuing
Directors.
ARTICLE XI
No Director shall be personally liable to the Corporation or its stockholders
for monetary damages for any breach of fiduciary duty by such Director as a
Director. Notwithstanding the foregoing, a Director shall be liable to the
extent provided by applicable law (i) for breach of the Director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) pursuant to the General Corporation Law of the State of Nevada or
(iv) for any transaction from which the Director derived an improper personal
benefit. No amendment to or repeal of these provisions shall apply to or have
any effect on the liability or alleged liability of any Director of the
Corporation for or with respect to any acts or ommissions of such Director
occurring prior to such amendment or repeal.
7
EXHIBIT 3.(i).4
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
ICE BAN AMERICA, INC.
We the undersigned President and Assistant Secretary of Ice Ban America,
Inc. do hereby certify:
That the Board of Directors of said corporation at a meeting duly convened,
held on the 11th day of November, 1998, adopted a resolution to amend the
original articles as follows:
Article One is herby amended as follows:
FIRST: The name of the corporation shall be Natural Solutions Corporation.
The number of shares of the corporation outstanding and entitled to vote on
an amendment to the Articles of Incorporation is 15,888,740; that the said
change(s) and amendment have been consented to and approved by a majority vote
of the stockholders holding at least a majority of each class of stock
outstanding and entitled to vote thereon.
/s/ George A. Janke
---------------------------------------
*President or Vice President
State of Florida
County of Palm Beach
On November 12, 1998, personally appeared before me, a Notary Public,
George A. Janke, President, who acknowledged that he executed the above
instrument. This notarization does not acknowledge the signature of the
Secretary or Assistant Secretary.
/s/ illegible
---------------------------------------
Signature of Notary
(Notary Stamp or Seal)
*Only the President or Vice President's signature need to be acknowledged.
EXHIBIT 3.(i).5
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
Filed by:
Robert E. Freer, Jr.
Certify that:
1. The constitute at least two-thirds of the original incorporators or of
the directors of Natural Solutions Corporation, a Nevada corporation.
2. The original Articles were filed in the Office of the Secretary of State on
July 7, 1998.
3. As of the date of this certificate, no stock of the corporation has been
issued.
4. They hereby adopt the following amendments to the Articles of
Incorporation of this corporation:
FIRST: The name of the corporation is ICE BAN AMERICA, INC.
/s/ Robert Freer, Jr.
- -------------------------------------
Signature
THE DISTRICT OF COLUMBIA
On December 2, 1998 , personally appeared before me, a Notary Public Robert
E. Freer, Jr. , who acknowledged that they executed the above instrument.
/s/ illegible
-----------------------------------
Signature of Notary
(Notary Stamp or Seal)
EXHIBIT 3.(i).6
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
ICE BAN AMERICA, INC.
We the undersigned President and Assistant Secretary of Ice Ban America,
Inc. do hereby certify:
That the Board of Directors of said corporation at a meeting duly
convened, held on the 11th day of November, 1998, adopted a resolution to amend
the original articles as follows:
Article One is hereby amended as follows:
FIRST: The name of the corporation shall be Natural Solutions Corporation.
The number of shares of the corporation outstanding and entitled to
vote on an amendment to the Articles of Incorporation is 15,888,740; that the
said change (s) and amendment have been consented to and approved by a majority
vote of the stockholders holding at least a majority of each class of stock
outstanding and entitled to vote thereon.
/s/ George A. Janke
---------------------------------
*President or Vice President
State of Florida
County of Palm Beach
On November 12, 1998 , personally appeared before me, a Notary Public, George A.
Janke, President , who acknowledged that he executed the above instrument. This
notarization does not acknowledge the signature of the Secretary or Assistant
Secretary.
/s/Illegible
--------------------------------
Signature of Notary
(Notary Stamp or Seal)
*Only the President or Vice President's signature need to be acknowledged.
EXHIBIT 3.(i).1
ICE BAN AMERICA, INC.
BY-LAWS
ARTICLE I MEETINGS OF SHAREHOLDERS
1. Shareholders' Meetings shall be held in the office of the corporation, at
Carson City, NV, or at such other place or places as the Directors shall,
from time to time, determine.
2. The annual meeting of the shareholders of this corporation shall be held at
11:00 a.m., on the 14th day of August of each year beginning in 1997 , at
which time there shall be elected by the shaeholders of the corporation a
Board of Directors for the ensuing year, and the shareholders shall
transact such other business as shall properly come before them. If the day
fixed for the annual meeting shall be a legal holiday such meeting shall be
held on the next succeeding business day.
3. A notice signed by any Officer of the corporation or by any person
designated by the Board of Directors, which sets forth the place of the
annul meeting, shall be personally delivered to each of the shareholders of
record, or mailed postage prepaid, at the address as appears on the stock
book of the corporation, or if no such address appears in the stock book of
the corporation, to his last known address, at least ten (10) days prior to
the annual meeting. Whenever any notice whatever is required to be given
under any article of these By-Laws, a waiver thereof in writing, signed by
the person or persons entitled to the notice, whether before or after the
time of the meeting of the shareholders, shall be deemed equivalent to
proper notice.
<PAGE>
4. A majority of the shares issued and outstanding, either in person or by
proxy, shall constitute a quorum for the transaction of business at any
meeting of the shareholders.
5. If a quorum is not present at the annual meeting, the shareholders present,
in person or by proxy, may adjourn to such future time as shall be agreed
upon by them, and notice of such adjournment shall be mailed, postage
prepaid, to each shareholder of record at least then (10) days before such
date to which the meeting was adjourned; but if a quorum is present, they
may adjourn from day to day as they see fit, and no notice of such
adjournment need be given.
6. Special meetings of the shareholders may be called at anytime by the
President; by all of the Directors provided there are no more than three,
or if more than three, by any three Directors; or by the holder of a
majority share of the capital stock of the corporation. The Secretary shall
send a notice of such called meeting to each shareholder of record at least
ten (10) days before such meeting, and such notice shall state the time and
place of the meeting, and the object thereof. No business shall be
transacted at a special meeting except as stated in the notice to the
shareholders, unless by unanimous consent of all shareholders present,
either in person or by proxy, all such shares being represented at the
meeting.
7. Each shareholder shall be entitled to one vote for each share of stock in
his own name on the books of the corporation, whether represented in person
or by proxy.
4 - 2
<PAGE>
8. At all meetings of shareholders, a shareholder may vote by proxy executed
in writing by the shareholder or by his duly authorized attorney-in-fact.
Such proxy shall be filed with the Secretary of the corporation before or
at the time of the meeting.
9. The following order of business shall be observed at all meetings of the
shareholders so far as is practicable:
a. Call the roll;
b. Reading, correcting, and approving of the minutes of the previous
meeting;
c. Reports of Officers; d. Reports of Committeees; e. Election of
Directors; f. Unfinished business; and g. New business.
10. Unless otherwise provided by law, any action required to be taken at a
meeting of the shareholders, or any other action which may be taken at a
meeting of the shareholders, may be taken without a meeting if a consent in
writing, setting forth the action to be taken, shall be signed by all of
the shareholders entitled to vote with respect to the subject matter
thereof.
ARTICLE II STOCK
1. Certificates of stock shall be in a form adopted by the Board of Directors
and shall be signed by the President and Secretary of the corporation.
4 - 3
<PAGE>
2. All certificates shall be consecutively numbered; the name of the person
owning the shares represented thereby, with the number of such shares and
the date of issue shall be entered on the company's books.
3. All certificates of stock transferred by endorsement thereon shall be
surrendered by cancellation and new certificates issued to the purchaser or
assignee.
4. Upon surrender to the corporation or the transfer agent of the corporation
of a certificate for shares duly endorsed or accompanied by proper evidence
of succession, assignment or authority to transfer, it shall be the duty of
the corporation to issue a new certificate to the person entitled thereto,
and cancel the old certificate; every such transfer shall be entered on the
transfer book of the corporation.
5. The corporation shall be entitled to treat the holder of record of any
share as the holder in fact thereof, and accordingly, shall not be bound to
recognize any equitable or other claim to or interest in such share on the
part of any other person whether or not it shall have express or other
notice thereof, except as expressly provided by the laws of this state.
ARTICLE III DIRECTORS
1. A Board of Directors, consisting of at least one (1) person shall be chosen
annually by the shareholders at their meeting to manage the affairs of the
corporation. The Directors' term of office shall be one (1) year, and
Directors may be re-elected for successive annual terms.
4 - 4
<PAGE>
2. Vacancies on the Board of Directors by reason of death, resignation or
other causes shall be filled by the remaining Director or Directors
choosing a Director or Directors to fill the unexpired term.
3. Regular meetings of the Board of Directors shall be held at 1:00 p.m., on
the 14th day of August of each year beginning in ________ at the office of
the company at Carson City, NV, or at such other time or place as the Board
of Directors shall by resolution appoint; special meetings may be called by
the President or any Director giving ten (10) days notice to each Director.
Special meetings may also be called by execution of the appropriate waiver
of notice and called when executed by a majority of the Directors of the
company. A majority of the Directors shall constitute a quorum.
4. The Directors shall have the general management and control of the business
and affairs of the corporation and shall exercise all the powers that may
be exercised or performed by the corporation, under the statutes, the
Articles of Incorporation, and the By-Laws. Such management will be by
equal vote of each member of the Board of Directors with each Board member
having an equal vote.
5. The act of the majority of the Directors present at a meeting at which a
quorum is present shall be the act of the Directors.
6. Resolution, in writing, signed by all or a majority of the members of the
Board of Directors, shall constitute action by the Board of Directors to
effect therein expressed, with the same force and effect at though such
resolution had been passed at a duly convened meeting; and it shall be the
duty of the Secretary to record every such resolution in the Minute Book of
the corporation under its proper date.
4 - 5
<PAGE>
7. Any or all of the Directors may be removed for cause by vote of the
shareholders or by action of the Board. Directors may be removed without
cause only by vote of the shareholders.
8. A Director may resign at any time by giving written notice to the Board,
the President or the Secretary of the corporation. Unless otherwise
specified in the notice, the resignation shall take effect upon receipt
thereof by the Board or such Office, and the acceptance of the resignation
shall not be necessary to make it effective.
9. A Director of the corporation who is present at a meeting of the Directors
at which action on any corporate matter is tken shall be presumed to have
assented to the action taken unless his dissent shall be entered in the
minutes of the meeting or unless he shall file his written dissent to such
action with the person acting as the Secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered mail to the
Secretary of the corporation immediately after the adjournment of the
meeting. Such right to dissent shall not apply to a Director who voted in
favor of such action.
ARTICLE IV OFFICERS
1. The Officers of this company shall consist of: a President, one or more
Vice Presidents, Secretary, Treasurer, and such other officers as shall,
from time to time, be elected or appointed by the Board of Directors.
4 - 6
<PAGE>
2. The PRESIDENT shall preside at all meetings of the Directors and the
shareholders and shall have general charge and control over the affairs of
the corporation subject to the Board of Directors. He shall sign or
countersign all certificates, contracts and other instruments of the
corporation as authorized by the Board of Directors shall perform all such
other duties as are incident to his office or are required by him by the
Board of Directors.
3. The VICE PRESIDENT shall exercise the functions of the President during the
absence or disability of the President and shall have such powers and such
duties as may be assigned to him, from time to time, by the Board of
Directors.
4. The SECRETARY shall issue notices for all meetings as required by the By-
Laws, shall keep a record of the minutes of the proceedings of the meetings
of the shareholders and Directors, shall have charge of the corporate
books, and shall make such reports and perform such other duties as are
incident to his office, or properly required of him by the Board of
Directors. He shall be responsible that the corporation complies with
Section 78.105 of the Nevada Revised Statutes and supplies to the Nevada
Resident Agent or Registered Office in Nevada, any and all amendments to
the corporation's Articles of Incorporation and any and all amendments or
changes to the By-Laws of the corporation. In compliance with Section
78.105, he will also supply to the Nevada Resident Agent or Registered
Office in Nevada, and maintain, a current statement setting out the name of
the custodian of the stock ledger or duplicate stock ledger, and the
present and complete Post Office address, including street and number, if
any, where such stock ledger or duplicate stock ledger is kept.
4 - 7
<PAGE>
5. The TREASURER shall have the custody of all monies and securities of the
corporation and shall keep regular books of account. He shall disburse the
funds of the corporation in payment of the just demands against the
corporation, or as may be ordered by the Board of Directors, making proper
vouchers for such disbursements and shall render to the Board of Directors,
from time to time, as may be required of him, an account of all his
transactions as Treasurer and of the financial condition of the
corporation. He shall perform all duties incident to his office or which
are properly required of him by the Board of Directors.
6. The RESIDENT AGENT shall be in charge of the corporation's registered
office in the State of Nevada, upon whom process against the corporation
may be served and shall perform all duties required of him by statute.
7. The salaries of all Officers shall be fixed by the Board of Directors and
may be changed, from time to time, by a majority vote of the Board.
8. Each of such Officers shall serve for a term of one (1) year or until their
successors are chosen and qualified. Officers may be re-elected or
appointed for successive annual terms.
9. The Board of Directors may appoint such other Officers and Agents, as it
shall deem necessary or expedient, who shall hold their offices for such
terms and shall exercise such powers and perform such duties as shall be
determined, from time to time, by the Board of Directors.
4 - 8
<PAGE>
10. Any officer or agent elected or appointed by the Directors may be removed
by the Directors whenever in their judgment the best interests of the
corporation would be served thereby, but such removal shall be without
prejudice to the contract rights, if any, of the person so removed.
11. A vacancy in any office because of death, resignation, removal,
disqualification or otherwise, may be filled by the Directors for the
unexpired portion of the term.
ARTICLE V INDEMNIFICATION OF OFFICERS AND DIRECTORS
The corporation shall indemnify any and all of its Directors and Officers,
and its former Directors and Officers, or any person who may have served at the
corporation's request as a Director or Officer or another corporation in which
it owns shares of capital stock or of which it is a creditor, against expenses
actually and necessarily incurred by them in connection with the defense of any
action, suit or proceeding in which they, or any of them, are made parties, or a
party, by reason of being or having been Director(s) or Officer(s) of the
corporation, or of such other corporation, except, in relation to matters as to
which any such Director or Officer or former Director or Officer or person shall
be adjudged in such action, suit or proceeding to be liable for negligence or
misconduct in the performance of duty. Such indemnification shall not be deemed
exclusive of any other rights to which those indemnified may be entitled, under
ByLaw, agreement, vote of shareholders or otherwise.
ARTICLE VI DIVIDENDS
The Directors may, from time to time, declare, and the corporation may pay,
dividends on its outsanding shares in the manner and upon the terms nd
conditions provided by law.
4 - 9
<PAGE>
ARTICLE VII WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to be
given to any shareholder or Director of the corporation under the provisions of
these By-Laws or under the provisions of the Articles of Incorporation, a waiver
thereof in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice.
ARTICLE VIII AMENDMENTS
1. Any of these By-Laws may be amdended by a majority vote of the shareholders
at any annual meeting or at any special meeting called for that purpose.
2. The Board of Directors may amend the By-Laws or adopt additional By-Laws
but shall not alter or repeal any By-Laws adopted by the shareholders of
the company.
CERTIFIED TO BE THE BY-LAWS OF:
ICE BAN AMERICA, INC.
BY: /s/Ann Owens
-------------------
Secretary
4 - 10
EXHIBIT 3.(ii).2
BYLAWS
OF
TEMBIND AMERICA INC.
(a Nevada corporation)
ARTICLE I
STOCKHOLDERS
1. CERTIFICATES REPRESENTING STOCK. Every holder of stock in
the corporation shall be entitled to have a certificate signed by, or in the
name of, the corporation by the Chairman or Vice-Chairman of the Board of
Directors, if any, or by the President or a Vice- President and by the Treasurer
or any Assistant Treasurer or the Secretary or an Assistant Secretary of the
corporation or by agents designated by the Board of Directors, certifying the
number of shares owned by him in the corporation and setting forth any
additional statements that may be required by the General Corporation Law of the
State of Nevada (General Corporation Law). If any such certificate is
countersigned or otherwise authenticated by a transfer agent or transfer clerk,
and by a registrar, a facsimile of the signature of the officers, the transfer
agent or the transfer clerk or the registrar of the corporation may be printed
or lithographed upon the certificate in lieu of the actual signatures. If any
officer or officers who shall have signed, or whose facsimile signature or
signatures shall have been used on any certificate or certificates shall cease
to be such officer or officers of the corporation before such certificate or
certificates shall have been delivered by the corporation, the certificate or
certificates may nevertheless be adopted by the corporation and be issued and
delivered as though the person or persons who signed such certificate or
certificates, or whose facsimile signature or signatures shall have been used
thereon, had not ceased to be such officer or officers of the corporation.
Whenever the corporation shall be authorized to issue more
than one class of stock or more than one series of any class of stock, the
certificates representing stock of any such class or series shall set forth
thereon the statements prescribed by the General Corporation Law. Any
restrictions on the transfer or registration of transfer of any shares of stock
of any class or series shall be noted conspicuously on the certificate
representing such shares.
The corporation may issue a new certificate of stock in place
of any certificate theretofore issued by it, alleged to have been lost, stolen,
or destroyed, and Board of Directors may require the owner of any lost, stolen,
or destroyed certificate, or his legal representative, to give the corporation a
bond sufficient to indemnify the corporation against any claim that may be made
against it on account of the alleged loss, theft, or destruction of any such
certificate or the issuance of any such new certificate.
<PAGE>
2 .FRACTIONAL SHARE INTERESTS. The corporation is not obliged
to but may execute and deliver a certificate for or including a fraction of a
share. In lieu of executing and delivering a certificate for a fraction of a
share, the corporation may proceed in the manner prescribed by the provisions of
Section 78.205 of the General Corporation Law.
3. STOCK TRANSFERS. Upon compliance with provisions
restricting the transfer or registration of transfer of shares of stock, if any,
transfers or registration of transfers of shares of stock of the corporation
shall be made only on the stock ledger of the corporation by the registered
holder thereof, or by his attorney thereunto authorized by power of attorney
duly executed and filed with the Secretary of the corporation or with a transfer
agent or a registrar, if any, and on surrender of the certificate or
certificates for such shares of stock properly endorsed and the payment of all
taxes, if any, due thereon.
4. RECORD DATE FOR STOCKHOLDERS. For the purpose of
determining the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or the allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion, or exchange of stock
or for the purpose of any other lawful action, the directors may fix, in
advance, a record date, which shall not be more than sixty days nor less than
ten days before the date of such meeting, nor more than sixty days prior to any
other action. If no record date is fixed, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held; the record date for determining
stockholders entitled to express consent to corporate action in writing without
a meeting, when no prior action by the Board of Directors is necessary, shall be
the day on which the first written consent is expressed; and the record date for
determining stockholders for any other purpose shall be at the close of business
on the day on which the Board of Directors adopts the resolution relating
thereto. A determination of stockholders of record entitled to notice of or to
vote at any meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
5. MEANING OF CERTAIN TERMS. As used in these Bylaws in
respect of the right to notice of a meeting of stockholders or a waiver thereof
or to participate or vote thereat or to consent or dissent in writing in lieu of
a meeting, as the case may be, the term "share" or "shares" or "share of stock"
or "shares of stock" or "stockholder" or "stockholders" refers to an outstanding
share or shares of stock and to a holder or holders of record of outstanding
shares of stock when the corporation is authorized to issue only one class of
shares of stock, and said reference is also intended to include any outstanding
share or shares of stock and any holder or holders of record of outstanding
shares of stock of any class upon which or upon whom the Articles of
Incorporation confers such rights where there are two or more classes or series
of shares of stock or upon which or upon whom the General Corporation Law
confers such rights notwithstanding that the Articles of Incorporation may
provide for more than one class or series of shares of stock, one or more of
which are limited or denied such rights thereunder; provided, however, that no
such right shall vest in the event of an increase or a decrease in the
authorized number of shares of stock of any class or series which is otherwise
denied voting rights under the provisions of the Articles of Incorporation.
<PAGE>
6. STOCKHOLDER MEETINGS.
- TIME. The annual meeting shall be held on the date and at
the time fixed, from time to time, by the directors, provided, that the first
annual meeting shall be held on a date within thirteen months after the
organization of the corporation, and each successive annual meeting shall be
held on a date within thirteen months after the date of the preceding annul
meeting. A special meeting shall be held on the date and at the time fixed by
the directors.
- PLACE. Annual meetings and special meetings shall be held at
such place, within or without the State of Nevada, as the directors may, from
time to time, fix.
- CALL. Annual meetings and special meetings may be called
by the directors or by any officer instructed by the directors to call the
meeting.
- NOTICE OR WAIVER OF NOTICE. Notice of all meetings shall be
in writing and signed by the president or a Vice-President, or the Secretary, or
an Assistant Secretary, or by such other person or persons as the directors must
designate. The notice must state the purpose or purposes for which the meeting
is called and time when, and the place, where it is to be held. A copy of the
notice must be either delivered personally or mailed postage prepaid to each
stockholder not less than ten nor more than sixty days before the meeting. If
mailed, it must be directed to the stockholder at his address as it appears upon
the records of the corporation. Any stockholder may waive notice of any meeting
by a writing signed by him, or his duly authorized attorney, either before or
after the meeting; and whenever notice of any kind is required to be given under
the provisions of the General Corporation Law, a waiver thereof in writing and
duly signed whether before or after the time stated therein, shall be deemed
equivalent thereto.
- CONDUCT OF MEETING. Meetings of the stockholders shall be
presided over by one of the following officers in the order of seniority and if
present and acting - the Chairman of the Board, if any, the Vice-Chairman of the
Board, if any, the President, a Vice- President, or, if none of the foregoing is
in office and present and acting, by a chairman to be chosen by the
stockholders. The Secretary of the corporation, or in his absence, an Assistant
Secretary, shall act as secretary of every meeting, but if neither the secretary
nor an Assistant Secretary is present the Chairman of the meeting shall appoint
a secretary of the meeting.
PROXY REPRESENTATION Every stockholder may authorize another
person or persons to act for him by proxy in any manner desribed in, or
otherwise authorized by, the provisions of section 78.355 of the General
Corporation Law.
INSTPECTORS. The directors, in advance of any meeting, may,
but need not, appoint one or more inspectors of election to act at the meeting
or any adjournment thereof. If an inspector or inspectors are not appointed, the
person presiding at the meeting may, but need not, appoint one or more
inspectors. In case any person who may be appointed as an inspector fails to
appear or act, the vacancy may be filled by appointment made by the directors in
advance of the meeting or at the meeting by the person presiding thereat. Each
inspector, if any, before entering upon the discharge of his duties, shall take
and sign an ooath faithfully to execute theduties of inspector at such meeting
with strict impartiality and according to the best of his ability. The
inspectors, if any, shall determine the number of shares of stock outstanding
and the
<PAGE>
voting power of each, the shares of stock represented at the meeting, the
existence of a quorom, the validity effect of proxies, and shall receive votes,
ballots or consents, hear and determne all challenges and quesions arising in
connection with the right to vote, count and tbulate all votes, ballots or
consents, determine the result, and do such acts as are proper to conduct the
election or vote with fairness to all stockholders. On request of the person
presiding at the meeting, the inspector or inspectors, if any, shall make a
report in writing of any challenge, question or matter determined by him or them
and execute a certificate of any fact found by him or them.
QUORUM. Stockholders holding at least a majority of the voting
power are necessary to constitue a quorum at a meeting of stockholders for the
transaction of business unless the action to be taken at the meeting shall
require a greater proportion. The stockholders present may adjourn the meeting
despite the absence of a quorum.
VOTING. Each share of stock shall entitle the holder thereof
to one vote in the election of directors, a plurality of the votes cast shall
elect. Any other action shall be authorized by stockholders who hold at least a
majority of the voting power and are present at a meeting at which a quorum is
present, except where the General Corporation Law, theArticles of Incorporation,
or these Bylaws prescribe a different percentage of votes and/or a different
exercise of voting power. In the election of director voting need not by by
ballot; andd except as otherwise may be provided by the General Corporation Law,
voting by ballot shall not required for any other action.
STOCKHOLDER ACTION WITHOUT MEETING. Except as may otherwise be
provided by the General Corporation Law, any action required or permitted to be
taken at a meeting of the stockholdes may be taken without a meeting if a
written consent thereto is signed by stockholders holding at least a majority of
the voting power; provided that if a differnt porportion of voting paper
required for such an action at a meeting, then that proportion of written
consents is required. In no instance where action is authorized by written
consent need a meeting of stockholders by called or noticed. Any written consent
shall be subject to the requirements of Section 78.320 of the General
Corporation Law and of any other applicable provision of law.
<PAGE>
ARTICLE II
DIRECTORS
1. FUNCTIONS AND DEFINITION. The business and affairs of the
corporation shall be managed by the Board of Directors of the corporation. The
Board of Directors shall have authority to fix the compensation of the members
thereof for services in any capacity. The use of the phrase "whole Board" herein
refers to the total number of directors which the corporation would have if
there were no vacancies.
2. QUALIFICATIONS AND NUMBER. Each director must be at least
18 years of age. A director need not be a stockholder or a resident of the State
of Nevada. The initial Board of Directors shall consist of persons. Thereafter
the number of directors constituting the whole board shall be at least one.
Subject to the foregoing limitaion and except for the first Board of Directors,
such number may be fixed from time to time by action of the stockholders or of
the directors, or, if the number is not fixed, the number shall be . The number
of directors may be increased or decreased by action of the stockholders or of
the directors.
3. ELECTION AND TERM. Directors may be elected in the manner
prescribed by the provisions of Sections 78.320 through 78.335 of the General
Corporation Law of Nevada. The first Board of Directors shall hold office until
the first election of directors by stockholders and until their successors are
elected and qualified or until their earlier resignation or removal. Any
director may resign at any time upon written notice to the corporation.
Thereafter, directors who are elected at an election of directors by
stockholders, and directors who are elected in the interim to fill vacancies and
newly created directorships, shall hold office until the next election of
directors by stockholders and until their successors are elected and qualified
or until their earlier resignation or removal. In the interim between elections
of directors by stockholders, newly created directorships and any vacancies in
the Board of Directors, including any vacancies resulting from the removal of
directors for cause or without cause by the stockholders and not filled by said
stockholders, may be filled by the vote of a majority of the remaining directors
then in office, although less than a quorum, or by the sole remaining director.
4. MEETINGS.
- TIME. Meetings shall be held at such time as the Board shall
fix, except that the first meeting of a newly elected board shall be held as
soon after its election as the directors may conveniently assemble.
- PLACE. Meetings shall be held at such place within or
without the State of Nevada as shall be fixed by the Board.
- CALL. No call shall be required for regular meetings for
which the time and place have been fixed. Special meetings may be called by or
at the direction of the Chairman of the Board, if any, the Vice-Chairman of the
board, if any, or the President, or of a majority of the directors in office.
<PAGE>
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. No notice shall be
required for regular meetings for which the time and place shall be given for
special meetings in sufficient time for the convenient assembly of the directors
thereat. Notice if any need not be given to a director or to any member of a
committee of directors who submits a written waiver of notice signed by him
before or after the time stated therein.
QUORUM AND ACTION. A majority of the whole Board shall
constitute a quorum except when a vacancy or vacancies prevents such majority,
whereupon a majority of the directors in office shall constitute a quorum,
provided, that such majority shall constitute at lease one-third of the whole
Board. A majority of the directors present, whether or not a quorum is present,
may adjourn a meeting to another time and place. Except as the Articles of
Incorporation or these Bylaws may otherwise provide, and except as otherwise
provided by the General Corporation Law, the act of the directors holding a
majority of the voting power of the directors, present at a meeting at which a
quorum is present, is the act of the Board. The quorum and voting provisions
herein stated shall not be construed as conflicting with any provisions of the
General Corporation Law and these Bylaws which govern a meeting of directors
held to fill vacancies and newly created directorships in the Board or action of
disinterested directors.
Members of the board or of any committee which may be
disignated by the Board may participate in a meeting of the Board or of any such
committee, as the case may be, by means of a telephone conference or similar
method of communication by which all persons participating in the meeting hear
each other. Participation in a meeting by said means constitutes presence in
person at the meeting.
- CHAIRMAN OF THE MEETING. The Chairman of the board, if any
and if present and acting, shall preside at all meetings. Otherwise, the
Vice-Chairman of the Board, if any and if present and acting, or the President,
if present and acting or any other director chosen by the board, shall preside.
5. REMOVAL OF DIRECTORS. Any or all of the directors may be
removed for cause or without cause in acordance with the provisions of the
General Corporation Law.
6. COMMITTEES. Whenever its number consists of two or more,
the Board of directors may designate one or more committees which have such
powers and duties as the Board shall determine. Any such committee, to the
extent provided in the resolution or resolutions of the board, shall have and
may exercise the powers and authority of the board of Directors in the
management of the business and affairs of the corporation and may authorize the
seal or stamp of the corporation to be affixed to all papers on which the
corporation desires to place a seal or stamp. Each committee must include at
lease one director. The board of Directors may appoint natural persons who are
not directors to serve on committees.
7. WRITTEN ACTION. Any action required or permitted to be
taken at a meeting of the Board of Directors or of any committee thereof may be
taken without a meeting if, before or after the action, a written consent
thereto is signed by all the members of the Board or of the committee, as the
case may be.
<PAGE>
ARTICLE III
OFFICERS
1. The corporation must have a President, a Secretary, and a
Treasurer, and, if deemed necessary, expedient, or desirable by the Board of
Directors, a Chairman of the Board, a Vice-Chairman of the Board, an Executive
Vice-President, one or more other Vice-Presidents, one or more Assistant
Secretaries, one or more Assistant Treasurers, and such other officers and
agents with such titles as the resolution choosing them shall designate. Each of
any such officers must be natural persons and must be chosen by the Board of
Directors or chosen in the manner determined by the Board of Directors.
2. QUALIFICATIONS. Except as may otherwise be provided in the
resolution choosing him, no officer other than the Chairman of the Board, if
any, and the Vice-Chairman of the Board, if any, need be a director.
Any person may hold two or more offices, as the directors may
determine.
3. TERM OF OFFICE. Unless otherwise provided in the resolution
choosing him, each officer shall be chosen for a term which shall continue until
the meeting of the Board of Directors following the next annual meeting of
stockholders and until his successor shall have been chosen or until his
resignation or removal before the expiration of his term.
Any officer may be removed, with or without cause, by the
Board of Directors or in the manner determined by the Board.
Any vacancy in any office may be filled by the Board of
Directors or in the manner detemined by the Board.
4. DUTIES AND AUTHORITY. All officers of the corporation shall
have such authority and perform such duties in the management and operation of
the corporation as shall be prescribed in the resolution designation and
choosing such officers and prescribing their authority and duties, and shall
have such additional authority and duties as are incident to their office except
to the extent that such resolutions or instruments may be inconsistent
therewith.
<PAGE>
ARTICLE IV
REGISTERED OFFICE
The location of the initial registeed office of the
corporation in the State of Nevada is the address of the initial resident agent
of the corporation, as set forth in the original Articles of Incorporation.
The corporation shall maintain at said registered office a
copy, certified by the Secretary of State of the State of Nevada, of its
Articles of Incorporation, and all amendments thereto, and a copy, certified by
the Secretary of the corporation, of these Bylaws, and all amendments thereto.
The corporation shall also keep at said registered office a stock ledger or a
duplicate stock ledger, revised annually, containing the names, alphabetically
arranged, of all persons who are stockholders of the corporation, showing their
places of residence, if known, and the number of shares held by them
respectively or a statement setting out the name of the custodian of the stock
ledger or duuplicate stock ledger, and the present and complete post office
address, including street and number, if any, where such stock ledger or
duplicate stock ledger is kept.
ARTICLE V
CORPORATE SEAL OR STAMP
The corporate seal or stamp shall be in such form as the Board
of Directors my prescribe.
ARTICLE VI
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and shall
be subject to change, by the Board of Directors.
ARTICLE VII
CONTROL OVER BYLAWS
The power to amend, alter, and repeal these Bylaws and to make
new Bylaws shall be vested in the Board of Directors subject to the bylaws, if
any adopted by the stockholders.
I HEREBY CERTIFY that the foregoing is a full, true, and
correct copy of the Bylaws of Tembind America Inc., a Nevada corporation, as in
effect on the date hereof.
WITNESS my hand and the seal or stamp of the corporation.
Dated: April 9, 1998
/s/ illegible
--------------
(Seal) Secretary
EXHIBIT 10.1
SCHEDULE A
TO
RIDER NO. 1
#5198-01
NCTX 20879
NCTX 20896
<PAGE>
AMENDMENT
Rider No. 1
#5198-01
WHEREAS, PLM INVESTMENT MANAGEMENT INC., AND ICE BAN AMERICA
Entered into an agreement on the 11th day of November, 1997 for the leasing
of railroad cars and Rider No. 1 of which agreement will expire on the 30th day
of November, 1998 and
WHEREAS, both parties thereto desire to amend Rider No.1 of such agreement;
NOW, THEREFORE, it is hereby mutually agreed by and between the undersigned
that Rider No. 1 of the aforesaid agreement be and it hereby is amended to
include on (1) additional railcar NCTX 20896. Schedule A attached hereto and
made a part hereof includes all the cars on Rider No.1.
All other conditions and provisions contained in said agreement and Rider
No.1 shall continue in full force and effect during this additional period and
thereafter until said railroad cars are released from Lessee's service.
DATED as of this 13th day of January, 1998
PLM INVESTMENT MANAGEMENT INC. ICE BAN AMERICA
By: /s/ Stephen Bess By: /s/ Jeff Johnson
- ----------------------------- -----------------------
Name: Stephen M. Bess Name: Jeff Johnson
Title: President Title: Vice President
<PAGE>
RIDER 1 - 1
LEASE DATED NOVEMBER 11, 1997
ICE BAN AMERICA
I. NUMBER OF CARS:
One (1)
II. DESCRIPTION OF CARS:
20,591 US gallon capacity rail tank car with a DOT specification of
111A100W1 and an AAR code of T105
III. TERM:
Date of arrival through and including November 30, 1998
IV RENTAL RATE:
$325.00 per car per month
V. ANTICIPATED DELIVERY PERIOD:
February 1998 (SB DC *change vial Laura/DC)
VI. PLACE OF DELIVERY:
Jacksonville, Florida
VII. COST OF DELIVERY TO BE BORNE BY:
Lessor
VIII. MILEAGE ALLOWANCE AND ADDITIONAL USAGE RENTAL:
$0.3 per mile in excess of 30,000 miles traveled per year
IX. THE CARS MAY BE USED ONLY FOR THE TRANSPORTATION OF THE FOLLOWING TYPES
OF COMMODITIES:
Liens sulfonate (SB DC)
<PAGE>
RIDER 1 - 1 (continued)
LEASE DATED NOVEMBER 11, 1997
ICE BAN AMERICA
X. SPECIAL ITEMS
Immediately prior to the termination date, the cars will be returned to
a point designated by Lessor, cleaned of all last content commodity.
Any costs associated with cleaning of excess commodity shall be for the
acount of Lessee.
II ADDRESSING OF NOTICES
Lessee to Lessor Lessor to Lessee
PLM investment Management, Inc. ICE BAN AMERICA
Once Market Plaza 12118 E. Yates Center Road
Steuart Street Tower, Suite 900 Lyndonville, NY 14098
San Francisco, CA 94105-1301
Lessor: Lessee:
PLM INVESTMENTS MANAGEMENT, INC. ICE BAN AMERICA
By: /s/ Sam Bess By: Jeff Johnson
- ---------------------------- ----------------------------
Title: President Title: Vice President
<PAGE>
RIDER 1 - 2
LEASE DATED NOVEMBER 11, 1997
ICE BAN AMERICA
IDENTIFICATION OF PRINCIPAL
PLM Ewuipment Growth Fund III - IP 300
NCTX 20879
<PAGE>
RIDER 1 - 3
LEASE DATED NOVEMBER 11, 1997
ICE BAN AMERICA
CERTIFICATE OF ACCEPTANCE OF
RAILROAD CARS
This Certificate relates to the railroad cars listed below leased by PLM
Investment Management. Inc. to Ice Ban America under a Lease Agreement for
Railroad Cars dated November 11, 1997 (the "Lessee") into which this Certificate
is incorporated (by Section 4 thereof).
RAILROAD CAR NUMBERS
See attached Rider No. 1 - 2
Lessee herby certifies that the representation and warranties of Lessee
contained in the Lease are true and correct on the date hereof.
ICE BAN AMERICA
"Lessee"
By: /s/ Jeff Johnson
-------------------------------
Dated: Vice President
<PAGE>
LEASE AGREEMENT FOR
RAILROAD TANK CARS
#5198-01
This Lease Agreement dated as of the 11th day of November, 1997
(the"Agreement"), by and between PLM Investment Management, Inc. ("IMI"), a
California corporation (with its principals, collectively, for convenience,
"Lessor"); and Ice Ban America, a Palm Beach, Florida corporation ("Lessee"),
with its pricipal place of business at 12118 E. Yates Center Road, Lyndonville,
New York.
IDENTITY OF LESSOR
The parties hereto recognize and acknowledge that IMI my be acting
under management agreements as agent for certain principals which shall be
indentified to Lessee by IMI from time to time. Such pricipals shall, from time
to time, be set forth in a rider to this Agreement. IMI at any time, and from
time to time, shall have the right to add principals (and amend or supplement a
rider to include such principals) and upon so doing shall notify Lessee;
provided, however, that not withstanding the date of such notification, such
principal(s) shall be deemed a Lessor hereunder, effective as of the date the
cars owned by such principal and manged by IMI are delivered to Lessee. Any
amended or supplemented rider shall, from time to time, be delivered to Lessee.
Lessee agress to cooperate with IMI and any pricipal for the purpose of
complying with any reasonable requi8rements of any lender, the Surface
Transportation Board or the provision of Article 9 of the Uniform Commercial
Code provided such cooperation does not material affect the rights or
liabilities of Lessee hereunder. Except as otherwise provided, this Agreemtn
shall be administer IMI or such other third person or entity as IMI may from
time to time identify; provided, however, that any such assignment to such third
person or entity shall not be effective against Lessee until Lessee is so
notified of such assignment.
WITNESSETH:
1. Lease. Lessor agrees to furnish and lease to Lessee, and Lessee
agrees to accept and use upon the terms and conditions herein set forth, the
cars covered by the riders attached hereto and such additional riders as may be
added hereto from time to time by agreement of the parties, and any and all
other cars delivered to and accepted by Lessee. Each such rider shall set forth
the number of cars, the rental rate, term of use, car number, and other
pertinent information that may be desired by both parties. All cars leased
pursuant to such riders, or otherwise delivered to and accepted by Lessee, are
subject to the terms of this Agreement.
2. Delivery. Lessor agrees to deliver the cars to Lessee at such point
or points as may be agreed to by the parties. Lessor's obligation as to such
delivery shall be excused during the pendency of delays resulting from causes
beyond its control. Lessee agrees to use the cars exclusively in its own
service, except as hereinafter provided, and none of the cars shall be shipped
beyond the boundaries of Canada or the United States except with the prior
written consent of Lessor.
<PAGE>
3. Rent.
(a) Lessee agrees to pay the rental charges with respect to each of the
cars from the date of delivery thereof and until such car is returned
to and accepted by Lessor. Each monthly rental charge shall be paid in
advance on the first day of the month, prorating, however, any period
which is less than a full month on the basis of a month of thirty (30)
days. The rental shall be payable without deduction, reduction, set-off
or counterclaim of any kind, for any reason, whether or not related to
this Agreement. Such rental charges shall be paid to Lessor at the
address set forth in the riders to this Agreement.
(b) Within a reasonable period of time after the end of each calendar
year of the term hereof, and upon termination of this Agreement, Lessor
shall, on the basis of mileage reported by railroads, determine the
total number of miles that each car traveled during the calendar year
or the portion thereof just ended, loaded and empty. If it is
determined that any car traveled more that the number of miles set
forth in a rider during such period or a pro rata portion thereof for a
period of usage of less that twelve (12) full calendar months, Lessee,
upon notice by Lessor, shall pay to Lessor, within fifteen (15) days of
receipt of such notice, as additional rent for such car for such
period, an amount equal to the additional usage rental set forth in a
rider multiplied by the number of miles in excess of the product of (I)
the number of miles set forth in a rider and (ii) the number of day
during such year for which rent accrued divided by 365.
3. Acceptance. Each of the cars shall be subject to Lessee's inspection
upon delivery to Lessee. Failure to report any defect in the car within a
reasonable time after delivery of the car or the loading of each such car by
Lessee or at its direction shall constitute acceptance thereof by Lessee and
shall be conclusive evidence of the fit and suitable condition thereof for the
purpose of transporting the commodities then and thereafter loaded therein or
thereon.
4. Records. Lessor agrees to keep records pertaining to the movement of
the cars, and Lessee agrees to promptly furnish Lessor with complete reports of
the car movements, including dates received, loaded and shipped, commodity,
destination and ull junction routing, and all information which Lessee may
received from railroad companies or other sources which may be of use to Lessor.
Lessor shall collect the mileage earned by the cars, and, subject to all rules
of the tariffs of the railroads, Lessor shall credit to Lessee's rental account
such mileage as and when received from the railroads, but in no event shall the
aggregate amount of mileage credit exceed the aggregate monthly rentals for the
term of this Agreement.
5. Mileage. Lessee agrees to reimburse Lessor for any payment Lessor
may be required to make to any railroad, due to mileage equalization where
applicable, resulting from excess empty mileage incurred by the cars on such
railroad. For the purpose of this paragraph, the railroad mileage and junction
reports shall be prima facie evidence of the facts reported therein. In
addition, if Lessor is required to make any payments to a railroad resulting
from the empty movement of any other cars while they are in Lessee's service,
Lessee agrees to reimburse Lessor for such payments.
6. Loss of Damage. Lessee shall promptly notify Lessor upon receipt by
Lessee of knowledge of any damage to any of the cars. Lessor shall, at its
expense, perform, arrange, and pay for all maintenance and repairs made
<PAGE>
necessary by ordinary wear and tear, or otherwise necessary to keep the cars in
good condition and repair under the Interchange Rules. Lessee shall not repair,
or authorize the repair of, any of the cars without Lessor's prior written
consent, except that running repairs (as specified in the Associate of American
Railroads rules for Interchange and the Canadian Transport Commission
regulations) may be performed without prior written consent. The amount Lessor
will pay for such running repairs shall not be in excess of the basis, in effect
at the time the repair is made, provided by the Association of American
Railroads. If any car becomes unfit for service and requires repairs, other than
repairs made by railroads, rental charges will cease five (5) days after receipt
of such car at a shop authorized by Lessor, provided that Lessee has notified
Lessor prior to the time the car is routed to shop. In the event Lessee fails to
so notify Lessor, rental charges shall cease five days after receipt by lessor
of notification of the arrival of the car at a shop authorized by Lessor. In all
cases, after a car has bee repaired, rental charges will resume on the date the
car is available for forwarding to Lessee. It is understood that no rental
credits will be issued for cars in a shop for repairs which are Lessee's
responsibility.
7. Removal from Service. In the event the physical condition of any car
shall become such that the car cannot be operated in railroad service as
determined by Lessor and Lessor elects to permanently remove such car from
Lessee's service, the rental with respect to such car shall terminate upon the
removal of such car. Lessor shall have right, but shall not be obligated, to
substitute for any such car another car of the same type and capacity and the
rental is respect to such substituted car shall commence upon delivery of such
substituted car to Lessee.
8. Lessee Responsibility. Lessee shall be responsible for and shall
indemnify Lessor and hold Lessor harmless and does hereby release Lessor from
the loss or destruction of, or damage to, the cars or any parts thereof, during
the term; provided, however, Lessee shall not be responsible to the extent the
then- prevailing Interchange Rules place responsibility upon a railroad
subscribing to the Interchange Rules; and provided, further, that Lessee shall
not be responsible if such loss, destruction, or damage to the cars or parts
thereof was caused by the sole active negligence or willful misconduct of
Lessor. Notwithstanding anything contained herein to the contrary, Lessee shall
be responsible for and shall indemnify Lessor and hold Lessor harmless and does
hereby release Lessor from the loss or destruction of, or damage to, a car or
any part thereof during the term of this Agreement which shall (i) be occasioned
by the misuse or negligence of Lessee, its consignee, agent or sublessee, or
(ii) occur while such car is on the tracks of Lessee or any private siding or
track, or at the loading or unloading facility of Lessee or its consignee, agent
or sublessee, or on the track of any railroad that does not subscribe to the
Interchange Rules or any private or industrial railroad or (iii) be caused by
any commodity which may be transported or stored in or on such car.
Lessee shall notify Lessor of the loss or destruction of any of the
cars within two (2) days of the date of such event. The amount of loss resulting
from the loss or destruction of a car shall be measured by its replacement value
as determined immediately prior to the time of such loss or destruction. The
"replacement value" shall equal the amount payable by a railroad subscribing to
the Interchange Rules for the car if the car had been in service of such
railroad.
9. Loss or Damage to Lading. Lessor shall not be liable for any loss
of or damage to commodities, or any part thereof, loaded or shipped in or on the
cars, and Lessee agrees to assume financial responsibility for, to indemnify
<PAGE>
Lessor against, and to save it harmless from any such loss or damage, unless
caused by the sole negligence of Lessor.
10. Appliances. Lessee, at its own expense, shall either replace or
reimburse Lessor for the cost of replacing any appliance or removable part
(including, but not limited to, safety appliances, dome lid; dome housing and
gasket; thermometer well; gauging device; test tube; siphon lines; outlet valve,
cap and gasket; safety, air inlet, angle and check valves and gaskets), if
destroyed, damaged, lost, removed or stolen, unless the railroads transporting
the cars have assumed full responsibility for such loss or damage, or unless
such loss or damage results from the negligence or omission of Lessor, its
agents or employees.
11. Linings. The application, maintenance, and removal of interior
protective lining in any of the cars is to be performed by and at the expense of
Lessee unless otherwise specifically provided for in the applicable rider.
13. Claims. Lessee agrees to indemnify and hold Lessor harmless from
and against any loss, liability, claim, damage or expense (including, unless
Lessee assumes the defense, the reasonable cost of investigating and defending
against any claim for damages) arising out of or in connection with the use of
the cars during the term of this Agreement, excepting, however, any loss,
liability, claim, damage, or expense which accrues with respect to any of the
cars (i) while such car is in a repair shop undergoing repairs; (ii) which is
attributable to the negligence or omission of Lessor; its agents or employees;
or (iii) for which a railroad or railroads have assumed full responsibility,
including investigating and defending against any claim for damages.
14. Marks. Other than the restoration of Lessor's marks on the
cars, no lettering or marking of any kind shall be placed upon any of the cars
by Lessee except with the prior written consent of Lessor.
15. Load Limits. Lessee agrees not to load any of the cars in excess
of the load limit stenciled thereon.
16. Charges. Lessee shall be liable for any demurrage, track storage
or detention charge imposed in connection with any of the cars as well as loss
of or damage to any car while on any private siding or track or on any private
or industrial railroad or in the custody of any carrier not subject to the
Association of American Railroads Rules for Interchange or the Canadian
Transport Commission regulations.
17. Sublease and Assignment. Lessee shall make no transfer or
assignment of its interest under this Agreement in and to the cars without
Lessor's prior written consent, and any attempted transfer or assignment without
such consent shall be void, except that Lessee may sublease any of the cars to
its customers for single trips consistent with its normal merchandising methods;
provided, however, that notwithstanding any such sublease, Lessee shall continue
to remain liable to Lessor under all conditions and terms of this Agreement. No
right, title, or interest in any of the cars shall vest in Lessee by reason of
this Agreement or by reason of the delivery to or use by Lessee of the cars,
except the right to use the cars in accordance with the terms of this Agreement.
Lessee shall keep the cars free of any lien or encumbrance created by or through
<PAGE>
Lessee and agrees to indemnify Lessor and hold Lessor harmless from any cost or
expense, including attorneys' fees, with respect to such a lien or encumbrance.
18. Default. If Lessee defaults in the payment of any sum of money to
be paid under this Agreement and such default continues for a period of three
(3) days after notice to Lessee of such default; or if Lessee fails to perform
any covenant or condition required to be performed by Lessee which failure shall
not be remedied within ten (10) days after notice thereof from Lessor to Lessee;
or if Lessee shall dissolve, make or commit any act of bankruptcy, or if any
proceeding under any bankruptcy, or insolvency statue or any laws relating to
relief of debtors is commenced by Lessee, or if any such proceeding is commenced
against Lessee and same shall not have been removed within thirty (30) days of
the date of the filing thereof, or if a receiver, , or liquidator is appointed
for Lessee or for all or a substantial part of Lessee's assets with Lessee's
consent, or if without Lessee's consent the same shall not have been removed
within thirty (30) days of the date of the appointment thereof-, or if an order,
judgment or decree be entered by a court of competent jurisdiction and continue
unpaid and in effect for any period of thirty (30) consecutive days without a
stay of execution; or if a writ of attachment or execution is levied on any car
and is not discharged within ten (10) days thereafter, Lessor may exercise one
or more of the following remedies with respect to the cars;
(a) Immediately terminate this Agreement and Lessee's rights hereunder;
(b) Require Lessee to return the cars to Lessor at Lessee's expense,
and if Lessee fails to so comply, Lessor may take possession of such
car without demand or notice and without court order or legal process;
(c) Lease the cars to such persons, at such rental and for such period
of time as Lessor shall elect. Lessor shall apply the proceeds from
such leasing, less all cost and expenses incurred in the recovery,
repair, storage, and renting of such cars, toward the payment of
Lessee's obligations hereunder. Lessee shall remain liable for any
deficiency, which, at Lessor's option, shall be paid monthly, as
suffered, or immediately, or at the end of the term as damages for
Lessee's default;
(d) Bring legal action to recover all rent or other amounts then
accrued or thereafter accruing from Lessee to Lessor under any
provision hereunder;
(e) Pursue any other remedy which Lessor may have.
Each remedy is cumulative and may be enforced separately or
concurrently. If Lessee fails to perform any of its obligations hereunder,
Lessor, at Lessee's expense, and without waiving any rights it may have against
Lessee for such nonperformance, may itself render such performance. Further,
Lessee shall reimburse Lessor for all costs and expenses including reasonable
attorneys' fees expended by Lessor in the enforcement of its rights and remedies
hereunder, and Lessee shall pay interest on any amount owing to Lessor from the
time such amount becomes due hereunder at a monthly rate of one and one-half
percent (1-1/2%); such rate be reduced, however, to the extent it exceeds the
maximum rate permitted by applicable law. In addition, Lessee shall, without
expense to Lessor, assist Lessor in repossessing the cars and shall, for a
reasonable time if required, furnish suitable trackage space for the storage of
the cars.
<PAGE>
If applicable, Lessor shall be entitled to the remedies of a Lessor
under Section 1168 of the U. S. Bankruptcy Code.
19. Return Provisions.
(a) Upon the termination of each rider, Lessee agrees, subject to
the provision of paragraph 8 above, to return the cars to Lessor at a point or
points designated by Lessor, in the same or as good condition as received,
ordinary wear and tear excepted, free and clear from all accumulations or
deposits from commodities transported in or on the cars while in the service of
Lessee. If any car is not returned to Lessor free from such accumulations or
deposits, Lessee shall reimburse Lessor for any expense incurred in cleaning
such car.
(b) In the event of any car or tank fittings or appurtenances,
including interior lining for cars so equipped, shall become damaged, suffers
corrosion, or other damage related to or connected with the commodity, along
with other material placed or allowed to accumulate in or on the car and to how
the car is exposed, Lessee shall be liable for such damage, regardless of how it
is caused, and whether or not it is due to the Lessee's negligence. Such damage
shall not be considered "ordinary wear and tear."
20. Taxes. All federal, state, provincial, and local taxes levied or
assessed against the cars shed Lessee under this Agreement, payable on account
of the ownership of such cars, shall be paid by Lessor, and all returns and
reports in connection therewith shall be made by Lessor. All taxes payable on
account of or measured by the rental paid or the use of such cars (excluding any
tax which is based solely upon or measured solely by Lessor's net income) shall
be the responsibility of Lessee. hi the event any taxes or assessments, other
than those payable on account of ownership, are levied against the cars or the
rental paid for the use of the cars covered by any rider to this Agreement by
any federal, state, provincial or local authority, in addition to those taxes or
assessments in effect on the effective date of such rider, Lessee agrees to pay
to Lessor, in addition to any other amounts due, a sum equal to the amount of
any such taxes or assessments.
In order to avoid recapture of any tax benefit claimed by Lessor with
respect to the cars, including, but not limited to any deduction allowable under
section 168 and related Sections of the Internal Revenue Code of 1986 (the
"Code"), Lessee shall (i) use the cars predominantly within the continental
United States within the meaning of the Code, (ii) shall cause third parties
having control over their use to use the cars predominantly within the
continental United States, in accordance with the Code and (iii) shall not take
any action that will cause the cars to be considered tax-exempt use property
within the meaning of the Code.
If Lessor (or any owner of a partnership or beneficial interest of
Lessor) shall lose by is allowance, recapture or otherwise, any portion of said
tax benefits as the result of any act committed by Lessee or Lessee's failure to
take any act, Lessee agrees to pay Lessor or such owner a sum which, after
deduction of all taxes required to be paid by Lessor or such owner in respect of
the receipt thereof under the laws of the United States or any political
subdivision thereof, shall be equal to the amount of the tax benefits so lost by
Lessor or such owner, which sum shall be payable on written demand made at any
<PAGE>
time after payment of the tax attributable to the portion of the tax benefits
lost; provided, however, that Lessee shall be under no obligation to indemnify
Lessor for the amount of any tax benefits lost with respect to any car for which
Lessee has paid to Lessor the replacement value set forth in Section 9 hereof.
21. Mortgages; Liens. It is understood that some or all of the cars
furnished Lessee under this Agreement and Lessor and/or principal's rights under
this Agreement may at the time of delivery to Lessee or at some future time
during the term of this Agreement be subject to the terms of any lien or
encumbrance (a "Lien") including a Mortgage, Deed of Trust, Equipment Trust,
Pledge, or Bill of Sale or similar security arrangement. Lessee agrees that any
or all of the cars may be stenciled or marked to set forth the ownership of any
such cars in the name of the holder of any Lien (the "Lien holder") including a
mortgagee, trustee, pledgee, assignee or security holder and that this Agreement
and Lessee's rights hereunder are and shall at all times be subject and
subordinate to any and all rights of any Lien holder. Lessee agrees that upon
the written request of Lessor or any Lien holder at any time or from time to
time, Lessee will enter into a written agreement with any Lien holder(s): (i)
that the Lien(s) will have priority and be entitled to all rights therein as
though the Lien were made before this Agreement and on the making of this
Agreement Lessee had knowledge of the Lien; (ii) confirming the security created
by the Lien and rights given to the Lien holder(s); and (iii) postponing and
deferring this Agreement and its rights hereunder and to the cars and agreeing
that they will be subject and subordinate to the Lien(s) and the rights of the
Lien holder.
This Agreement and/or any of Lessor's rights hereunder, including
rentals, may have been assigned and may in the future be assigned to any Lien
holder(s) or others. Lessee hereby consents to and accepts any such assignment.
Lessee acknowledges notice of any such assignment and of any Lien which is filed
under Section 11303 of the Interstate Commerce Act of the United States of
America. However, Lessee is to pay all rentals hereunder to Lessor and have all
its dealings hereunder with Lessor until notified to the contrary by any person
proving to Lessee's reasonable satisfaction that he is the assignee of this
Agreement and/or the relevant rights of Lessor hereunder and is entitled to
intervene. Lessee represents that it has received no notice of any other
mortgage, charge, hypothecate or encumbrance on or of any assignment, sale or
disposition of any car covered hereby or of any of Lessor's rights hereunder.
Lessee agrees that no claim or defense which Lessee may have against Lessor
shall be asserted or enforced against any assignee of this Agreement and/or any
rights of Lessor hereunder.
22. Notices. Any notice, demand or request required or permitted to
be made, given or served by either party to or upon the other hereunder, shall
be in writing and shall be deemed to have been made when deposited in the United
States or Canada mail, certified or registered mail, postage prepaid and
addressed to Lessor or Lessee at the address set forth in a rider to this
Agreement.
23. Successors. This Agreement shall be binding upon the parties
hereto, their respective successors, assigns and legal representatives; and
shall remain in full force and effect from the date hereof until the completion
of the leasing arrangement shown on attached riders of the last car or cars
hereunder, and all such cars are returned to Lessor.
24. Governing Law. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of California.
<PAGE>
25. Insurance. Lessee shall, at all times prior to the return of the
cars to Lessor in accordance with the terms of this Agreement and during any
storage period, at its own expense, cause to be carried and maintained public
liability and property damage insurance in respect of the cars against the risks
and in the amounts, if any, customarily insured against by Lessee in respect to
similar equipment owned or leased by it.
26. Additional Provisions. Additional provisions of this Agreement may
be set forth in a rider, which, if executed by Lessor and Lessee, is
incorporated herein by this reference.
27. Representations and Warranties of Lessee. Lessee represents and
warrants that, as of the date of this Agreement:
(a) Lessee is a corporation duly incorporated, validly existing
and in good standing under the laws of the state of its incorporation and is
either duly qualified to do business and is in good standing in such other
jurisdictions in which the business and activities of Lessee require such
qualification, or its failure to so qualify in such other jurisdiction will not
have a material adverse impact on this Agreement.
(b) Lessee has full corporate power to enter into this Agreement.
(c) The Agreement has been duly authorized, executed, and
delivered by Lessee, and constitutes a valid, legal and binding agreement,
enforceable in accordance with its terms.
(d) No approval is required by Lessee from any governmental or
public body or authority with respect to the entering into or performance of
this Agreement.
(e) The entering into and performance of this Agreement will not
conflict with, or result in a breach of, the terms, conditions, or provisions of
(i) any law, or any regulation, order, injunction, permit, franchise, or decree
of any court or governmental instrumentality, and (ii) any indenture, agreement,
or other instrument to which Lessee is party or any of its property is bound.
(f) Lessee is neither an organization described in Section 48(a)
(4) nor a governmental unit described in Section 48(a)(5) of the Internal
Revenue Code of 1986.
28. Modifications. In the event the U. S. Department of Transportation
or any other governmental agency or nongovernmental organization having
jurisdiction over the operation, safety or use of railroad equipment, requires
that Lessor add, modify, or in any manner adjust the cars subject to this
Agreement in order to qualify them for operation in railroad interchange, Lessee
agrees to pay an additional monthly charge of $1.75 per car for each $1 00
expended by Lessor on such car, or such other monthly charge in lieu thereof as
may be provided for modifications, in any rider hereto, in any case, effective
as of the date the car is released from the shop after application of such
additions, modifications or, adjustments (hereinafter the "Modifications"). No
rental credits will be issued on cars entering the shop for any Modifications
for the first thirty (30) days. In the event Lessor, in its sole discretion,
determines, prior to making any Modifications, that the cost thereof is not
<PAGE>
economical to expend in view of the estimated remaining useful life of such car,
and Lessor elects to permanently remove such car from Lessee's service rather
than have such car taken to a car shop for such Modifications, the rental with
respect to such car shall terminate upon the date specified in writing by
Lessor, provided that such date must be prior to the date the Modifications are
so required to be made.
(this space left blank intentionally)
29. Captions. Captions to any provision of this Agreement are for
ease of reference only and are not to be construed to be part of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement (such execution may be by two or more counterparts, each of which
shall be deemed an original) the day and year first above written.
LESSEE: ICE BAN AMERICA
By: /s/Jeff Johnson
- -----------------------------
Title: Vice President
LESSOR: PLM INVESTMENT MANAGEMENT, INC.
By: /s/Stephen M. Bess
- --------------------------
Title: President
EXHIBIT 10.2
FIRST ADDENDUM TO LEASE AGREEMENT
THIS FIRST ADDENDUM TO LEASE AGREEMENT is made this 10th day of July,
1997 between NORTH PALM CRYSTAL ASSOCIATES, ("Landlord"), having an office at
1201 U.S. Highway One, suite 201, North Palm Beach, Florida 33408, and ICE BAN
AMERICA, INC., a Nevada Corporation, ("Tenant"), whose address is 1201 U.S.
Highway One, Suite 205, North Palm Beach, Florida 33408.
W I T N E S S E T H
WHEREAS, on April 11, 1997, Ice Ban America, Inc., as Tenant, and NORTH
PALM CRYSTAL ASSOCIATES, as Landlord, entered into that certain Crystal Tree
Commerce Centre Office Lease for those particular premises (Suite 36) of a size
of 825 square feet, to which size the parties had agreed, and which premises are
located in Crystal Tree Shopping Center which is situated at the Northwest
Corner of U.S. Highway One and Golfview Road, North Palm Beach, Florida; and,
WHEREAS, the parties now desire to amend the Lease to reflect and
provide for relocation of business from Suite 36 to Suite 205 the restructure of
the Term, Annual Rent, as herein set forth, and other such changes and
modifications as herein outlined.
NOW THEREFORE, in consideration of the sum of TEN DOLLARS paid by Tenant to
the Landlord and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1.) Article I, Section 1.1N is hereby modified and amended to read as
follows:
"Premises" means 1,415 square feet more or less on the second floor of the
Building as generally indicated on Exhibit "A" attached and known as Suite 205.
2.) Article III, Section 3.1 "Term" is hereby modified and amended to read
as follows:
"Term". The Term of the Lease shall be three (3) years beginning on August 1,
1997 and continuing through July 31, 2000.
3.) Article IV, Section 4.1 "Base Annual Rent" is hereby modified and
amended to read as follows:
"Base Annual Rent". Tenant covenants and agrees to pay to Landlord, without
deduction or offset, Base Annual Rent in the amount of $7.24 per square foot of
Leased Premises ("Base Annual Rent"), which is based on an annual rate of
$10,248.00, payable in lawful money of the United States of America in equal
monthly installments of $854.00, in advance, on or before the first day of each
calendar month during the Term of this Lease. Landlord agrees that rent to
1
<PAGE>
commence upon occupancy. For each year of the Lease Term subsequent to the first
year, the Base Annual Rent shall be adjusted and increased. The Base Annual Rent
for each subsequent year of the Lease Term shall be a sum equal to $7.24 per
square foot plus an additional amount equal to that portion of $7.24 per square
foot which is the equivalent of the percentage increase in the Consumer Price
Index during a period commencing with that month which is two months prior to
the commencement of the original Term of this Lease and that month which is two
months prior to the commencement of the year of the Term for which the Base
Annual Rent is being determined. The total of these two sums shall be the Base
Annual Rent for that year of the Term. In no event shall the Base Annual Rent
for any Lease year be reduced below the Base Annual Rent for any prior Lease
year in the event of a decline in the Consumer Price Index. The term "Consumer
Price Index" is defined as provided in the MISCELLANEOUS provisions of this
Lease. Notwithstanding the above, the annual increase shall not be less than 3%
nor greater than 6%.
4.) Article IV, Section 4.2A, "Occupancy Costs", is hereby modified and
amended to read as follows:
"A. Tenant shall pay to Landlord in monthly installments on the first day of
each month, in advance, one-twelfth (1/12th) of the estimated amount of
Occupancy Costs for the appropriate Fiscal Year of the Term. Landlord shall at
the Commencement Date and the beginning of each Fiscal Year of the Term compute
and deliver to Tenant a bona fide estimate of Occupancy Costs relative to the
Premises for the appropriate Fiscal Year. The amount of Occupancy Costs relative
to the Premises shall be determined in accordance with Exhibit "C". Year 1 - the
occupancy costs monthly estimate is $896.00 ($7.60 psf), which Landlord agrees
to commence upon occupancy."
5.) Security Deposit (Pre-paid Rent) - Both parties agree that the deposit
of $2,190.00 presently held by Landlord shall continue to be held by Landlord
and applied to the last two (2) months rent.
6.) Special Conditions:
Landlord agrees to;
1) Carpet entire suite - carpet samples will be suppled by Landlord
for Tenant selection.
2) Touch-up painted walls, where applicable.
7.) All other terms and conditions of the Lease shall remain in full force
and effect. Should anything in this First Addendum conflict with the Terms of
the Lease, the terms and conditions of this First Addendum shall, to the extent
of such conflict, supersede the terms and conditions of the Lease.
2
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this instrument to be
executed on the dates shown below:
Date Executed by Landlord: LANDLORD:
7-10-97 NORTH PALM CRYSTAL ASSOCIATES,
- ----------------------
By: PaineWebber Equity Partners
One Limited Partnership, a
Virginia Limited Partnership
By: First Equity Partners, Inc.,
its general partner
WITNESSES:
/s/ N... Foggin By: Richard S. Green
- --------------------- --------------------------
/s/ Maureen H McCarthy Title: V.P.
- --------------------
(Corporate Seal)
Date Executed by Tenant:
June 30, 1997
TENANT
ICE BAN AMERICA, INC.
a Nevada Corporation
WITNESSES:
/s/ Kimberly A.Fardina By: George Janke
- -------------------------------- ------------------------------------
Title:
3
EXHIBIT 10.3
SECOND ADDENDUM TO LEASE AGREEMENT
THIS SECOND ADDENDUM TO LEASE AGREEMENT is made this 11th day of
February, 1999 between NORTH PALM CRYSTAL ASSOCIATES, ("Landlord"), having an
office at 1201 U.S. Highway One, Suite 201, North Palm Beach, Florida 33408, and
ICE BAN AMERICA, INC., a Nevada Corporation, ("Tenant"), whose address is 1201
U.S. Highway One, Suite 205, North Palm Beach, Florida 33408.
WITNESSETH
WHEREAS, on April 11, 1997, Ice Ban America, Inc., as Tenant, and NORTH
PALM CRYSTAL ASSOCIATES, as Landlord, entered into that certain Crystal Tree
Commerce Centre Office Lease for those particular premises (Suite 36) of a size
of 825 square feet, to which size the parties had agreed, and which premises are
located in Crystal Tree Shopping Center which is situated at the Northwest
Corner of U.S. Highway One and Golfview Road, North Palm Beach, Florida; and,
WHEREAS, on July 10, 1997, the parties hereto entered into a First
Addendum Agreement, whereby the lease was amended to reflect and provide for
relocation of business from Suite #36 to Suite #205 and the restructure of Term,
Annual Rent and other changes and modifications; and,
WHEREAS, the parties now desire to amend the Lease to reflect and
provide for the addition of Suite 215 (628 S.F.), the restructure of the
premises, Term, Annual Rent, as herein set forth, and other such changes and
modifications as herein outlined.
NOW THEREFORE, in consideration of the sum of TEN DOLLARS paid by
Tenant to the Landlord and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1.) Article I, Section 1.1N is hereby modified and amended to read as
follows:
"Premises" means 2,043 square feet more or less on the second floor of the
building as generally indicated on Exhibit "A" attached and known as suite
205 (1415 S.F.) And Suite 215 (628 S.F.).
2.) Article III, Section 3.1 "Term" is hereby modified and amended to read
as follows:
"Term". The Term of the Lease shall be three (3) years beginning on April
1, 1999 and continuing through March 31, 2002.
3.) Article IV, Section 4.1 "Base Annual Rent" is hereby modified and
amended to read as follows:
<PAGE>
"Base Annual Rent". Tenant covenants and agrees to pay to Landlord, without
deduction or offset, Base Annual Rent in the amount of $8.04 per square
foot of Lease Premises ("Base Annual Rent"), which is based on an annual
rate of $16,431.60, payable in lawful money of the United States of America
in equal monthly installments of $1,369.30, in advance, on or before the
first day of each calendar month during the Term of this Lease. Landlord
agrees that rent to commence upon occupancy.
For each year of the Lease Term subsequent to the first year, the Base
Annual Rent shall be adjusted and increased. The Base Annual Rent for each
subsequent year of the Lease Term shall be a sum equal to $8.04 per square foot
plus an additional amount equal to that portion of $8.04 per square foot which
is the equivalent of the percentage increase in the Consumer Price Index during
a period commencing with that month which is two months prior to the
commencement of the original Term of this lease and that month which is two
months prior to the commencement of the year of the Term for which the Base
Annual Rent is being determined. The total of these two sums shall be the Base
Annual Rent for that year of the Term. In no event shall the Base Annual Rent
for any Lease year be reduced below the Base Annual Rent for any prior Lease
year in the event of a decline in the Consumer Price Index. The term "Consumer
Price Index" is defined as provided in the miscellaneous provisions of this
Lease. Notwithstanding the above, the annual increase shall not be less than 3%
nor greater than 6%.
4.) Article IV, Section 4.2A, "Occupancy Costs", is hereby modified and
amended to read as follows:
1. Tenant shall pay to landlord in monthly installments on the first
day of each month, in advance, one-twelfth (1/12th) of the estimated
amount of Occupancy Costs for the appropriate Fiscal Year of the Term.
Landlord shall at the Commencement Date and the beginning of each
Fiscal Year of the Term compute and deliver to Tenant a bona fide
estimate of Occupancy Costs relative to the Premises for the
appropriate Fiscal year. The amount of Occupancy Costs relative to the
Premises shall be determined in accordance with Exhibit "C". Effective
April 1, 1999 the occupancy costs monthly estimate is $1,380.70 ($8.11
psf), which will commence April 1, 1999.
5.) Special Conditions:
Landlord agrees to:
a.) Install doorway between Suite #205 and #215.
b.) Paint all woodwork in Suite #215.
c.) Shampoo carpet in Suite #215.
<PAGE>
6.) All other term and conditions of the lease shall remain in full force
and effect. Should anything in this Second Addendum conflict with the Terms of
the Lease or First Addendum, the term and conditions of this Second Addendum
shall, to the extent of such conflict, supersede the terms and conditions of the
Lease and Addendum.
IN WITNESS WHEREOF, the undersigned have caused this instrument to be
executed on the dates shown below:
Date Executed by Landlord: LANDLORD:
2/11/99 NORTH PALM CRYSTAL ASSOCIATES,
By: PaineWebber Equity Partners
One Limited Partnership, a
Virginia Limited Partnership
By: First Equity Partners, Inc.,
Its general partner
WITNESSES:
/s/ Joanne E. Sordillo By: /s/ J D Encu
- --------------------------- ----------------------------
- --------------------------- Title: Vice President
(Corporate Seal)
Date Executed by Tenant:
2/8/99
TENANT
ICE BAN AMERICA, INC.
A Nevada Corporation
WITNESSES:
/s/ Ann M. Owen By: /s/ George Janke, Pres
- ------------------------ ---------------------------
Leo C Palmer Title:
- -----------------------
<PAGE>
January 26, 1999
Mr. George Jake
Ice Ban America
1201 U.S. Highway One, Suite 205
North Palm Beach, Florida 33408
RE: Crystal Tree Commerce Centre
Second Addendum to Lease Agreement
Dear George:
Enclosed for your review are three (3) copies of subject agreement -
adding Suite #215 to your Lease. Please execute each document where indicated,
and return all to my attention. I will then proceed to secure Landlord's
signature and return to you a fully executed copy.
In closing, we look forward to Ice Ban America continuing to be a part
of Crystal Tree Commerce Centre and if you have any questions, please do not
hesitate to contact me.
Sincerely,
/s/ LE Hendrick
-----------------
L.E. Hendrick
Property Manager
LEH/kaa
Enclosures
EXHIBIT 10.4
Tenant Estoppel Certificate
Landlord North Palm Crystal Associates
1201 U.S. Highway One, Suite 201
North Palm Beach, Florida 33408
Tenant: Ice Ban America, Inc., a North Palm Corporation
D/b/a Ice Ban America
Lease and all amendments:
Lease dated April 11, 1997 by and between North Palm Crystal Associates
("Landlord") and Ice Ban America, Inc. ("Tenant"), as amended by addendum
dated:
Addendum to Lease dated July 10, 1997, by and between North Palm Crystal
Associates ("Landlord") and Ice Ban America, Inc. ("Tenant"):
Second Addendum to Lease (effective April 1, 1999) dated February 11, 1999,
by and between North Palm Crystal Associates ("Landlord") and Ice Ban
America, Inc. ("Tenant"):
Premises including square footage: 1201 U.S. Highway One, suite 205-215
North Palm Beach, Florida 33408
S.F. 2,043
Landlord and tenant are parties to the Lease as defined above and
pursuant thereto, Tenant hereby agrees and certifies as follows:
1. That said Lease is the only lease between the undersigned affecting
said premises and has not been amended, modified, changed, altered or
supplemented, except as specified above.
2. That the amount of base monthly rent is $1,369.30 and/or the
percentage rent is ---% gross sales in excess of $ N/A , and that the
monthly common area maintenance charge is $1,380.72.
3. That Tenant has made a security deposit in the amount of $0.
4. That said Lease is in full force and effect and that there are no
defaults thereunder of any conditions which with the passage of time
or giving of notice or both would become a default under the terms of
said Lease.
<PAGE>
5. That no rents have been prepaid except as provided by said Lease, but
in no event have rents been paid more than thirty (30) days in advance
and that there are no set-offs or credits against future accruing
rents. With the exception of $2,190 prepaid rent, which is to be
applied to the last two months rent.
6. That Tenant is open and operating and in full and complete possession
of the premises demised pursuant to the terms of said Lease and that
the current lease term commenced on April 1, 1999 and will terminate
on March 31, 2002.
7. That the demised premises, including all improvements, appurtenances,
common areas and parking to be constructed by Landlord pursuant to the
Lease satisfy the requirements of said Lease and have been accepted
and approved in all respects by Tenant and are open for the use of
Tenant, its customers, employees and invitees.
8. That all duties of an inducement nature and all inducement clauses
have been fulfilled by Landlord in all respects.
9. That Tenant has not, and will not, generate, store, handle or
otherwise deal with any hazardous or toxic waste or material,
radioactive materials, or other contaminants, the removal of which is
required or the maintenance of which is prohibited, regulated or
penalized by any local, state or federal agency, authority or
governmental unit.
10. That Tenant acknowledges that the address to which notices shall be
given pursuant to the Lease, and a designated contact person, are:
1201 U.S. Highway One, Suite 205
North Palm Beach, FL 33408
Attn: George Janke
11. That Tenant recognizes that the statement contained herein may be
relied upon by Buyer and its permitted assigns, the Lender and by
third parties who have an interest in the matters set forth in this
Tenant Estoppel Certificate.
Executed to be effective this 30th day of March, 1999.
"Tenant"
Ice Ban America, Inc.,
A North palm corporation
By: /s/ Katie M D
-------------------------
Title: Controller
<PAGE>
March 26, 1999
Mr. George Janke
Ice Ban America
1201 U.S. Highway One, Suite 215
North Palm Beach, Florida 33408
RE: Crystal Tree Centre
Tenant Estoppel Letter
Dear George:
NORTH PALM CRYSTAL ASSOCIATES, the ("Landlord"), is in the process of
selling Crystal Tree Centre. Pursuant to the terms of your lease you are
required upon request, to provide a signed Estoppel Certificate, regarding the
status of your lease, within ten (10) days, (which would be April 5, 1999),
however it would be of great benefit if the completed document could be received
sooner.
Please review, date (first and last page) and sign the enclosed Tenant
Estoppel Certificate, which has been prepared for you. Please print the name and
title of the authorized signatory below signature and title. We request the
Tenant Estoppel Certificate be executed and returned to this office as soon as
possible.
Thank you in advance for your cooperation, and if you have any
questions relative to this letter, please feel free to contact me.
Sincerely
/s/ LE Hendrick
------------------
L.E. Hendrick
Property Manager
LEH/kaa
EXHIBIT 10.5
LANCE J. MARK, PLLC
ATTORNEY AT LAW
539-a Main Street
P.O. Box 426
Medina, New York 14103-0426
TO: ICE BAN AMERICA INC
ATTN KATHY SMITH
1201 US HIGHWAY 1 STE 205
N PALM BEACH FL 33408
-------------------------------------------------------------
February 11, 1999
RE: LEASE AGREEMENT FOR 547-A MAIN STREET, MEDINA
Dear Kathy:
Enclosed herewith is a copy of the signed agreement with reference to the above.
Thank you.
/s/ Anna
Lance J. Mark, Esq.
By: Anna
Enclosure
<PAGE>
LEASE
THIS AGREEMENT made the 10th day of February, 1999 by and between
Anthony M. Massaro and Lance J. Mark, 539-a Main Street, Medina, New York,
(herein called Landlord), and ICE BAN AMERICA, INC. of 1201 U.S. No.1, Crystal
Tree Plaza, Suite 205, North Palm Beach, Florida 33408, (herein called Tenant).
WITNESSETH:
Landlord hereby leases to Tenant and Tenant hereby hires the
following-described premises, 547-a Main Street, Medina, New York 14103. The
premises consists of the front and adjoining office spaces. The term shall be 12
months commencing February 8, 1999. The annual rent is $3,000.00 payable in
monthly installments of $250.00 commencing on February 8, 1999 and each first
day of the month thereafter.
LANDLORD AND TENANT FURTHER COVENANT AND AGREE:
1. USE OF PREMISES. Tenant agrees that the let premises shall be used and
occupied solely as a an office as a business office, and for no other purposes.
2. CARE OF PREMISES. Tenant states the he/she has examined and received the
let premises in good order and repair and that upon the termination of this
agreement he/she will yield up said premises to Landlord in as good condition as
at the signing of this agreement, reasonable wear and tear excepted. Tenant
shall not paint, decorate or otherwise embellish and/or change and shall not
make nor suffer to be made any additions or alterations in or to the let
premises without the prior written consent of Landlord.
3. CLEANLINESS . Tenant shall maintain the let premises in a clean
condition and shall not sweep, throw or dispose of from said premises nor from
any doors, windows, porches or other parts of said building, any dirt, waste,
rubbish or other substance or article into any other parts of said building or
the land adjacent thereto.
4. DEFINITIONS. The words "Landlord" and "Tenant" as used herein shall
include their respective heirs, executors, successors, representatives and
assigns, agents and servants. If more than one person sign as Tenant hereunder,
the covenants, conditions and agreements herein of the Tenant shall be the joint
and several obligations of each such person.
5. ACCESS TO PREMISES. Tenant agrees to allow Landlord and its agents,
servants and employees free access, at all reasonable hours, to the let premises
for the purpose of examining or exhibiting same or to make any needed repairs or
to do such cleaning or other things as Landlord may think proper.
6. DESTRUCTION-EMINENT DOMAIN. If the leased premises, or any part thereof,
or the whole or any part of the building of which they are a part, shall be
taken for any purpose by exercise of the power of eminent domain or
condemnation, or shall be destroyed or damaged by fire or other unavoidable
<PAGE>
casualty or by action of the city or other authorities or shall receive any
direct or consequential damage for which the Landlord or Tenant shall be
entitled to compensation by reason of anything lawfully done in pursuance of any
public authority, after the execution hereof and during said term, or any
extension or renewal thereof, then this lease and said term shall terminate at
the option of the Landlord; and such option may be exercised in case of any such
taking, notwithstanding the entire interest of the Landlord may have been
divested by such taking. If this lease and said term are not so terminated, then
in case of any such taking or destruction of or damage to the leased premises,
rendering the same or any part thereof unfit for use and occupation, a just
proportion of the rent hereinbefore reserved, according to the nature and extent
of the injury sustained by the leased premises, shall be suspended or abated
until the leased premises, or in the case of such taking, what may remain
thereof, shall have been put in proper condition for use and occupation. The
Tenant hereby assigns to the Landlord any and all claims and demands for damages
on account of any such taking or for compensation for anything lawfully done in
pursuance of any public authority, and covenants with the landlord that the
Tenant will from time to time execute and deliver to the Landlord such further
instruments of assignment of any such claims and demands as the Landlord shall
request.
7. RISK FOR PERSONAL POSSESSIONS. It is expressly agreed and understood
that all personal property belonging to Tenant or other occupants of the
premises or to any other person or persons, which shall have been brought into
said premises or building by or on account of Tenant or such other occupants or
persons, shall be kept and maintained in said premises or building at the sole
risk and responsibility of Tenant or such other occupants or persons. Tenant
hereby releases and agrees to indemnify and hold harmless Landlord, its agents,
servants and employees, from any and all claims for damages by reason of the
theft, removal, disappearance, loss or damage to any such articles or things,
occurring during the said tenancy or thereafter, or prior to said tenancy in the
event that any of such personal property, articles or things are delivered to or
brought into said premises or building prior to the period of tenancy mentioned
herein.
8. MASTER KEY. Landlord may at its discretion retain and use a master key
or duplicate keys for access to said let premises and it is specifically agreed
by the parties hereto that the retention and use of such master key or duplicate
keys by Landlord shall in no way make Landlord responsible for the contents of
said let premises.
9. RESTRICTIONS. Tenant agrees that no inflammable, explosive or injurious
substances or articles shall be kept on the let premises or in said building;
that nothing shall be hung from the outside of the walls without the prior
written consent of Landlord; and that the halls stairways, porches and common
passageways shall not be used for storage of any article whatsoever.
10. REPAIRS AND MAINTENANCE. Tenant agrees to keep the let premises and all
pipes, wires, glass, plumbing and other equipment and fixtures therein or used
therewith in good order and repair, whole and of the same kind, quality and
description as at the beginning of the lease term herein, reasonable wear and
tear and damage by fire or unavoidable casualty only excepted. Any repairs or
maintenance, made or performed by the Landlord shall be deemed to be a
<PAGE>
gratuitous act of the Landlord. It is agreed that the landlord shall not be
liable for any damage or injury occasioned by failure to keep the premises or
building in repair, and shall not be liable for any damage or injury done or
occasioned by or from plumbing, refrigeration, gas, water, steam, chemicals or
sewerage, nor for damages occasioned by water, snow or ice being upon or coming
into the let premises, building or land adjacent thereto, or for any damage or
injury resulting from the acts of neglect of the co-tenants, Landlord or its
agents, servants and employees or other occupants of the let premises or
building or of any owners or occupants of adjacent or contiguous property.
11. STORAGE SPACE. It is specifically agreed and understood that Landlord
shall not be liable for any loss or damage of or to any property placed in any
storeroom, cellar, attic or other storage place, or for any injury whatsoever
occurring in or as a result of the use of such storeroom, cellar, attic or other
storage place, such storeroom, cellar, attic or other storage place being
furnished gratuitously and being no part of the obligations of this agreement.
12. COSTS OF ENFORCEMENT. Tenant agrees to pay and discharge all reasonable
costs, attorneys fees and expenses that shall be made and incurred by Landlord
in enforcing the covenants and agreements herein contained.
13. SUBLETTING. Tenant agrees that this lease shall not be assigned and the
let premises herein shall not be sublet without the prior written consent of
Landlord. Landlord agrees to not unreasonable withhold consent to such a
sublease for an acceptable tenant in the event that the Tenant shall discontinue
the practice of dentistry during the lease term.
14. UTILITIES. Tenant shall be responsible for the furnishing of the
following utilities to said let premises: all utilities. Landlord shall be
responsible for the furnishing of the following utilities to said let premises:
none.
15. WAIVER. The waiver of one breach of any term, condition, covenant,
obligation or agreement of this lease shall not be deemed to be a waiver of any
other term, condition, covenant or agreement or of any subsequent breach
thereof.
16. SEPARABILITY CLAUSE. If any provision of this lease or portion thereof
shall be invalid by operation of law or otherwise, the remaining provisions and
portions herein shall continue in full force and effect. This agreement may be
changed, altered or amended only by a subsequent agreement between the parties
in writing.
17. SECURITY DEPOSIT. Landlord acknowledges receipt of $250.00 from Tenant
to be held by Landlord during the term hereof, or any extension or renewal
hereof, as security for the full and faithful performance by Tenant of all the
covenants, terms and conditions of this lease. Tenant acknowledges that said
security deposit does not constitute an advance rental payment and shall be
returned only upon Tenant's deliverance of possession of the premises to
Landlord in the same condition as when Tenant's occupancy commenced, reasonable
wear and tear excepted.
<PAGE>
18. APPLICABLE LAW. This agreement shall be construed and enforced
according to the laws of the State of New York.
19. TENANT'S INSURANCE. Tenant shall carry a renter's liability insurance
policy with minimum coverage of $100,000.00 and they agree to indemnify and hold
Landlord harmless against any and all claims or lawsuits for injury to person or
property arising out of Tenant's use and occupancy of the lease premises.
/s/ Lance Mark
---------------------
LANCE J. MARK, Landlord
ICE BAN AMERICA, INC.
/s/ George Janke
----------------------
By: GEORGE JANKE, President
EXHIBIT 10.6
ICE BAN INC.
12118 E. Yates Center Rd.
Lyndonville, NY 14098
LEASE AGREEMENT
Date: June 1, 1997
Ice Ban, Inc. agrees to lease approximately 700 square feet of office space at
121198 East Yates Center Road, Lyndonville, New York, for the amount of $1000.00
per month, beginning June 1, 1997, payable on the first day of each month.
Included in this amount are maintenance costs, normal wear and tear on the
property, heat, lighting, electricity, and air conditioning.
The initial term of this lease will be three years, with first option to renew
after the initial term.
/s/ Lawrence W. Pratt
------------------------------
by: Lawrence W. Pratt, VP
Ice Ban, Inc.
/s/ Jeff A Johnson
-----------------------
Jeffery A. Johnson, Owner
<PAGE>
ICE BAN AMERICA, INC.
12118 E. Yates Center Rd.
Lyndonville, NY 14098
LEASE AGREEMENT
Addendum - dated July 1, 1998
Ice Ban America, Inc. agrees add this addendum to the Office Lease Agreement
dated June 1, 1997. Central Air Conditioning was added to the office on July 1,
1998. The additional costs associated with this addition are calculated at
$35.00 per month, when averaged out over the year. Therefore, the new monthly
lease rate will be $1035.00 per month, beginning July 1, 1998 The initial term
of this lease will be three years, with first option to renew after the initial
term.
/s/ Lawrence W. Pratt
------------------------------
by: Lawrence W. Pratt, VP
Ice Ban, Inc.
/s/ Jeff A Johnson
-----------------------
Jeffery A. Johnson, Owner
EXHIBIT 10.7
Distributor Agreement
INTRODUCTION
This distribution agreement is made of October 12, 1995, by and between Tembec
Inc. ("SELLER"), a corporation with offices at Temiscaming, Quebec and ICE BAN
Inc. ("Distributor"), a corporation with offices Lyndonville, NY. Subject to
this agreement, SELLER appoints DISTRIBUTOR as a distributor of "PRODUCTS".
PRODUCTS
TDS (liquid lignosulfonate or other products for sale as dust control on roads
and parking lots).
EXCLUSIVITY
DISTRIBUTOR shall have the exclusive right to sell and deliver PRODUCTS in the
United States only, and shall only purchase such PRODUCTS from SELLER. SELLER
will refer to DISTRIBUTOR all inquiries or orders of PRODUCTS for delivery in
the United States.
PRICE
The price of PRODUCTS to DISTRIBUTOR shall be agreed upon between the SELLER and
DISTRIBUTOR on an ongoing basis, based on competitive market factors,
manufacturing costs, and financial performance criteria. All sales terms are net
60 days from date of invoice and in Canadian funds at the address specified on
the invoice. Selling prices for each product will be directly to DISTRIBUTOR.
DISTRIBUTOR has the right to determine its own selling prices to their
customers.
SELLER will offer one-year price protection. DISTRIBUTOR may from time to time
request a variance from the prevailing price in order to meet competitive price
situations for specific customers. If DISTRIBUTOR provides satisfactory proof of
competitive pricing, then the SELLER may agree to allow DISTRIBUTOR a special
discount which in SELLER's opinion will allow DISTRIBUTOR to meet such pricing.
PERFORMANCE
DISTRIBUTOR recognizes that its primary function shall be to promote sales of
PRODUCTS within the United States and that its performance shall be judges
solely upon its ability to meet its performance obligation under this agreement.
Each October, SELLER and DISTRIBUTOR will agree on a minimum purchase quota for
the up-coming year. In 1996, this minimum purchase quota is 8,000 tons.
<PAGE>
DISTRIBUTOR shall give the SELLER an ANNUAL SALES REPORT in October and a
12-month forecast on a quarterly basis, including volumes and selling price by
account.
DISTRIBUTOR shall use SELLER's trademark on all PRODUCTS' literature and
packaging. By such us DISTRIBUTOR does not acquire any right to such trademarks;
and DISTRIBUTOR will not in any way misuse them.
REGULATORY MATTERS
DISTRIBUTOR shall comply with all applicable laws in its performance hereof
including laws or regulations concerning the important, transportation and
labeling of products; and DISTRIBUTOR will pay all duties, taxes, and
assessments in connection therewith. DISTRIBUTOR shall furnish its customers all
information on handling and storage necessary to enable its customers to use and
store product safely.
TRANSFER of AGREEMENT
This agreement shall be binding upon and inure to the benefit of DISTRIBUTOR and
SELLER and their respective successors or assigns. This agreement may not be
assigned by either party without the written consent of the other party.
TERMINATION
Either party may terminate this agreement and the rights granted hereunder, if a
party continues to breach any terms or conditions of this agreement, after a
period of ten days following written notice thereof being given to the offending
party. After termination, if the DISTRIBUTOR is the offending party, SELLER may,
at its discretion, sell directly to or appoint a new distributor for
DISTRIBUTOR's customers, as listed in the ANNUAL SALES REPORT, for minimum
period of one year.
If SELLER decides to withdraw from PRODUCTS in the United States, this agreement
is suspended after six months written notice thereof. SELLER will not sell
PRODUCTS in the United States for a minimum of one and half years after the
written notice has been given to DISTRIBUTOR. If SELLER decides to reenter the
market for PRODUCTS in the United States, the suspension of this agreement can
be removed only at the discretion of the DISTRIBUTOR. If DISTRIBUTOR decides not
to remove the suspension, this agreement is then null and void.
This agreement shall be null and void upon the bankruptcy or insolvency of
either party.
Neither party shall not, by reason for the termination of this agreement be
liable for compensation, reimbursement or damages on account of loss of
prospective profits on anticipated sales or on account of expenditures,
investments, leases or commitments in connection with the business or goodwill.
<PAGE>
COMPLETE AGREEMENT
This agreement supersedes and cancels all previous agreements, understandings,
or arrangements, oral or written between the two parties referring to the
PRODUCTS covered by this agreement.
COMPLETE AGREEMENT
This agreement supersedes and cancels all previous agreements, understandings,
or arrangements, oral or written between the two parties referring to the
PRODUCTS covered by this agreement.
GOVERNING LAW
This agreement shall be deemed executed in Quebec by the parties hereto and
shall be governed by and construed in accordance with the laws of Quebec.
AMENDMENT
This agreement or any portion thereof may be amended only by written agreement
of the parties hereto.
In witness whereof, SELLER and DISTRIBUTOR have caused this agreement to be
executed in duplicate by their respective duly authorized representatives.
TEMBEC Inc. ICE BAN Inc.
By: /s/ Jim Lopez By: /s/ Jeff Johnson
- -------------------- --------------------
Name: Jim Lopez Name: Jeff Johnson
Title: VP & General Manager Title: President
EXHIBIT 10.8
Addendum to Agreement
Between
Ice Ban USA Inc.
And
Ice Ban America, Inc.
THIS IS AN ADDENDUM TO THE AGREEMENT attached hereto as Exhibit A by
and between Ice Ban USA, Inc. hereinafter referred to as IBUSA and Ice Ban
America, Inc., hereinafter referred to as IBA dated this 30TH day of March,
1998.
WHEREAS, IBUSA has been requested by IBA to provide cash to IBA from
the treasury of IBUSA, and was approved at the Board of Directors meeting of
march 30, 1998 and;
WHEREAS, IBUSA has agreed to provide said funds to IBA for its use for
a period of five years from the date of execution and transfer of said funds to
IBA.
NOW, THEREFORE, in consideration of one dollar ($1.00) in hand received
and other good and valuable considerations it is hereby agreed between the
parties hereto.
ARTICLE I
LOAN
1. IBUSA shall transfer one hundred and twenty five thousand ($125,000)
dollars to IBA account for their use to pay for inventory and operations,
at the sole discretion of IBA in consideration of the following changes and
modifications to the underlying Agreement between IBUSA and IBA attached
hereto as Exhibit A and made a part of this Agreement.
2. At the execution of this Agreement IBUSA will deliver one hundred and
twenty five thousand ($125,000) dollars in good and valuable U.S. funds to
IBA.
ARTICLE II
REPAYMENT OF LOAN
1. As consideration for terms and conditions for repayment of said loan, which
are set forth in Article I section 1, 2, 3, 4, and 4a, IBA shall agree to
pay one ($1.00) dollar per ton additional fee to IBUSA for all IBA products
sold annually up to twenty five thousand ($25,000) dollars per year for six
years, which would include interest and principal. The total repayment of
said loan shall be one hundred fifty thousand ($150,000) dollars, which
would include payment in full for principal and interest. (This equates to
approximately 5.8 percent (5.8%) interest.) These payments shall commence
at the end of the IBA's fiscal year ending July 31, 1998, and each year
thereto up to and including July 31, 2003.
<PAGE>
2. The repayment under this Agreement shall be made bi-annually, twenty (20)
days after the end of the second quarter, and twenty (20) days after the
end of the fourth quarter of IBA's fiscal year for the (6) year term of the
Agreement.
3. The payment set forth above shall be in addition to and separate from the
payment fees and terms set forth and required in the underlying Agreement
attached hereto.
4. In the event that IBUSA is called upon to make any payments for patents
under negotiations or pending beyond its cash resources, IBUSA may, and
shall have the right, at its sole option, to call upon IBA to repay any
portion of the one hundred and twenty five thousand ($125,000) dollars
advanced up to the amount required by IBUSA to pay for said payments, but
not to exceed the then balance due to IBUSA from this advance.
a. If such a request by IBA for repayment of funds is forthcoming, IBA
shall have sixty (60) days from the date of written notice in which to
provide the requested funds.
ARTICLE III
ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement and understanding
between the parties hereto which respect to the subject matter hereof and
supersedes all previous or contemporaneous written or verbal Agreements.
Agreed and accepted this 30th day of March, 1998.
Ice Ban USA Inc.:
/s/Joseph S. Kroll /s/George Janke
- -------------------- -------------------
Witness President
/s/Ann M. Owen /s/Ray Marshall
- -------------------- -------------------
Witness Secretary
Agreed and accepted this 30th day of March, 1998.
Ice Ban America, Inc.
/s/Joseph S. Kroll /s/George Janke
- --------------------- ----------------------
Witness President
/s/Kathleen M. Smith /s/Ann M. Owen
- -------------------------- -----------------------
Witness Secretary - Assistant Ann M. Owen
EXHIBIT 10.9
MOUNTAIN SALT AND PRODUTS CO.
P.O. BOX 309
GEORGETWON, KENTUCKY 40324
Phone: 502-535-4622 Fax: 502-525-4786
April 8. 1998
Via Facsimile (315--337-0117)
Jeff Johnson, Vice President
Ice Ban America, Inc.
1201 US Highway 1
Suite 205'
North Palm Beach, Florida 33408
Dear Jeff:
This letter of intent is to further clarify our discussions the
concerning expansion of the existing manufacturer-distributor relationship
between Ice Ban America, Inc., a Nevada corporation ("IBA") and Mountain Salt
and Products Co., a Kentucky corporation ("MSP"). Specifically, we have agreed
to negotiate in good faith to enter into an agreement (the "Agreement") which
would, among other things, include the following business terms:
1. MSP will form a new Florida limited liability company (the "LLC")
which will be owned two-thirds (2/3) by MSP and one-third (1/3) by IBA.
a. Definitions:
1. IBA Products -shall mean the "Ice Ban", "Ice Ban
Magic", "Ice Ban M-50", and "Ice Ban C-50" products
(including any other deicing/anti-icing compositions
which IBA may from time to time develop) for usage on
roadways (paved and unpaved), highways and other pave
surfaces.
2. Distribution Agreement - the word "Distribution
Agreement" shall me a written agreement between the
LLC and IBA regarding the distribution of IBA
Products.
2. In consideration of IBA entering into the Agreement and performing
its obligations under the Agreement, MSP will do the following:
a. MSP shall assign any rights it has by virtue of its
existing defacto oral arrangement with IBA to the LLC, with MSP being henceforth
released from any further liability under said arrangement.
b. During the Set Price Period, defined in Paragraph 3
(e), below, MSP
<PAGE>
shall obtain and sell magnesium chloride or any replacement, successor or
improved compound, to the LLC for mixing with IBA's product "Ice Ban" at a price
of forty-five cents ($0.45) per gallon.
3. IBA, in consideration for receiving its one-third (1/3) ownership
interest in the LLC, will, to the extent not already granted, act in good faith
and with its best efforts to negotiate and enter a Distribution Agreement with
the LLC which includes but is not limited to the following:
a. The LLC's territory will include Kentucky, Ohio,
Wisconsin, Illinois, Indiana, West Virginia, Tennessee, North Carolina and
Alabama {the "Existing Territory"}, plus Michigan.
b. The LLC shall have a right of first refusal to add to
its territory any additional jurisdictions in the United States of America east
of the Mississippi River which from time to time are not serviced by existing
IBA distributors operating under valid, arms-length arrangement with IBA. All
existing IBA distributors and their territories are outlined on Exhibit "A"
attached hereto.
c. IBA also represents it will use its best effort to help
the LLC reach a Distribution Agreement with its subsidiary, Tembind America, Inc
IBA has limited authority to obligate Tembind America, Inc. or its products, or
trademarks. IBA will utilize its abilities to the extent it is able to help the
LLC reach a similar (though non-exclusive) distribution agreement with Tembind
America, Inc.
d. The initial term of the Distribution Agreement will be
extended to include a period of five (5) years after final execution and
delivery of IBA's standard Distribution Agreement as contemplated in the Letter
of Intent (the "Initial Term"), which standard Distribution Agreement with
incorporate the relevant terms of this Letter of Intent. Unless the LLC is then
in default beyond applicable cure periods, the Distribution Agreement
automatically shall be renewed for an additional five (5) year term, unless the
LLC, on no less than six (6) months prior written notice, elects to terminate
the Distribution Agreement, in whole or in part. The LLC from time to time may
voluntarily surrender all or any part of the territory to IBA in this fashion,
after which the LLC sahll have no further rights with respect to the part(s) of
the territory surrendered. After the first ten (10) years, unless the LLC is
then in default beyond applicable cure periods, the Distribution Agreement
automatically shall be renewed for additional five (5) year terms, unless the
LLC or IBA, on no less than six (6) months prior written notice, elects to
terminate the Distribution Agreement, in whole or in part. In the event that the
LLC elects to terminate the Distribution Agreement without cause, IBA shall have
the right, but not the obligation, to take over any contracts for the sale of
IBA Products which the LLC may have entered, and the LLC shall include
provisions in any such contracts to effectuate IBA's right.
e. For the first two (2) years of the Distribution
Agreement after it is amended pursuant to the Agreement (the "Set Price
Period"), IBA shall sell its IBA Products or any successor, replacement or
improved products, tot the LLC on an as needed basis at a price of forty-eight
cents ($0.48) per gallon, FOB the plant or storage facility closest to the part
of the LLC's territory into which the product will be sold. By way of
clarification, the LLC may take delivery FOB at either IBA's storage facility or
the plant or storage facility of any manufacturer/producer of the product from
time to time used by IBA, whichever is closer to the site at which the LLC is to
deliver the product. MSP acknowledges that IBA does not manufacture the IBA
products, but rather purchases the base ingredients as agricultural byproducts.
After the Set Price Period, IBA shall adjust its price annually, on or before
May 1 of each year, with the new price to be effective beginning on the 1st day
<PAGE>
of July of the year in which the increase occurs (for example, the adjusted
price announced May 1, 2005 would take effect July 1, 2005), subject to the
following conditions: IBA shall adjust it sprice to the LLC (increase or
decrease) for an IBA Product to the price which is the greater of (a) IBA's cost
or (b) eight cents ($0.08) per gallon less than the established price for other
distributors. In no event shall the price charged to or the terms imposed on the
LLC by IBA for any IBA Products exceed the most favorable price and the most
favorable terms from time to time offered by IBA to any other distributor or
customer on a regular basis.
f. In the event IBA at any time is insolvent or otherwise
is unable to deliver IBA Products, or any successor, replacement or improved
product to the LLC for any reason other than the LLC's non-performance of its
obligations to IBA, and IBA's failure to deliver the product would result in the
LLC being in default to its customers, the LLC, at its option, shall have the
right, but not the obligation, to assist IBA in procuring the product or its
underlying components from third party manufacturers or producers, provided
that: i) all such product shall be deemed to be purchased through IBA; and ii)
IBA shall be entitled to any difference between the actual price of the product
and the price for the product due IBA under the Distribution Agreement.
g. The LLC shall have the right to use in connection with
its performance of the Distribution Agreement all trademarks and product names
from time to time held by IBA related to its de-icing/anti-icing products,
including, but not limited to, "Ice Ban", "Ice Ban Magic", "Ice Ban M-50", and
"Ice Ban C-50" as well as any trademarks related to any replacement, successor
or improved IBA de- icing products, subject to certain reasonable requirements
IBA deems necessary to protect its trademarks and patents.
h. The Distribution Agreement may be assigned only in
connection with the following circumstances: (a) a change in the legal name or
legal status of either party hereto, which change does not affect the nature of
the respective business activities; (b) the transfer by a party hereto of
substantially all the assets of the business to which the licensed rights relate
o the sale of a separable business unit related to a portion of the licensed
rights; or (c) otherwise with the written permission of the other party, which
permission shall be within the complete and total discretion of said other
party. This prohibition on assignment shall not be construed as any limitation
on the transfer of any ownership interest in the LLC.
i. The LLC shall not enter into any subdistributorship
agreements with respect to the IBA Products, except with the prior written
consent of IBA, which consent shall not be unreasonably withheld. The LLC shall
provide IBA with information that it deems reasonably necessary for IBA to
evaluate any proposed subdistributor.
j. In the event that the LLC terminates the Distribution
Agreement without cause or IBA terminates the Distribution Agreement for cause,
MSP hereby agrees that it will not purchase or sell, or enter any agreement to
purchase or sell, any Ice Ban Product currently covered by a patent or patent
application identified in Exhibit B for three years after the date of
termination of the Distribution Agreement. This non-compete provision shall
survive termination for a period of three years.
k. IBA also represents it will use its best effort to help
the LLC reach an agreement with Ice Ban USA, Inc., the owners of the patents
<PAGE>
identified in Exhibit B, which agreement provides that if IBA for any reason
loses its license with respect to the IBA Products, Ice Ban USA, Inc., will
honor the terms and conditions of the distribution Agreement.
4. MSP shall be responsible for the day-to-day operation and management
of the LLC an shall report to IBA monthly as to its operations in a form that
IBA deems reasonably deems necessary to generate proper accounting reports.
5. The Agreement will include customary representations and
warranties by MSP concerning, among other things, the following:
a. MSP is in good standing, validly organized and existing
under the laws of Kentucky.
b. All actions necessary to authorize, direct and empower
MSP, and the officers of MSP executing the Agreement on its behalf, have been
duly taken and completed to permit: I) MSP to enter into and to perform the
Agreement; and ii) its officers to execute the Agreement on behalf of MSP.
c. MSP: i) to the best of its knowledge, is not in
violation of any federal, state or local law, regulation or ordinance and is
current in filing all tax returns, and paying all taxes, then due and payable;
and 2) has received no notice of any such violation.
d. To the best of MSP's knowledge, there is no litigation,
government investigation or claim of any kind pending, or threatened, against
MSP, and MSP has received no notice of any such claim.
e. MSP is solvent and is not subject to any pending or
threatened bankruptcy or other federal or state insolvency proceeding.
f. The foregoing representations of MSP are true as of the
date of execution and the closing on the Agreement, and these representations
(as of the time of closing) shall survive the closing on this Agreement for a
period of three years.
7. The Agreement will include customary representations and
warranties by IBA concerning, among other things, the following:
a. IBA is in good standing, validly organized and existing
under the laws of Nevada.
b. All actions necessary to authorize, direct and empower
IBA, and the officers of IBA executing the Agreement on its behalf, have been
duly taken and completed to permit: i) IBA to enter into and to perform the
Agreement; and ii) its officers to execute the Agreement on behalf of IBA.
c. IBA: i) to the best of its knowledge, it not in
violation of any federal, state or local law, regulation or ordinance and its
current in filing all tax returns, and paying all taxes, then due and payable;
and ii) has received no notice of any such violation.
<PAGE>
d. To the best of IBA's knowledge, there is no litigation,
government investigation or claim of any kind pending, or threatened, against
IBA, and IBA has received no notice of any such claim.
e. IBA is solvent and is not subject to any pending or
threatened bankruptcy or other federal or state insolvency.
f. By virtue of an Exclusive License Area Agreement dated
August 31, 1996, any by
virtue of IBA's acquisition on November 12, 1997, of Ice Ban, Inc., a New York
corporation, IBA enjoys exclusive rights to market, sell and use certain
patented products and processes or patent-pending products and processes in the
United States, as more particularly identified on Exhibit "B" attached hereto,
and is lawfully able to enter into and perform the Agreement and the
Distribution Agreement.
g. IBA believes it is entitled to and has applied for
trademark registrations for "Ice Ban," and "Ice Ban Magic."
h. The foregoing representations of IBA are true as of the
date of execution and the closing on the Agreement, and these representations
(as of the time of closing) shall survive the closing on this Agreement for a
period of three years.
9. In consideration for the payment of One Hundred Dollars
(100.00) (the "Option Payment"), and to induce MSP to undertake the studies and
other due diligence activities connected with this transaction, IBA agrees that,
for a period of thirty (30) days from the date of final execution and delivery
of the Letter of Intent by both parties (the "MSP Option Period"), MSP shall
have the exclusive option to negotiate with IBA for the sales, marketing and
distribution rights of IBA Products, including, without limitation "Ice Ban,"
"Ice Ban Magic," "Ice Ban M-50," and "Ice Ban C-50" Products for the territory
described in 3(a) above. During the MSP Option period, the parties shall
negotiate in good faith to finalize and enter into the Agreement, incorporating
the terms and conditions set out in this Letter of Intent. Without limiting the
foregoing, during the MSP Option Period, IBA will not solicit or accept any
other offer(s) for, or negotiate with any other person or entity for an IBA
distributorship in any part of the territory East of the Mississippi that is not
currently included in Exhibit "A". Nor shall IBA, during the MSP Option Period,
enter into any agreement or understanding of any nature with any other person or
entity regarding any sales, distribution or marketing rights for any IBA
Products in the territory east of the Mississippi, which person or entity is not
currently included in Exhibit "A." In that respect, this Letter of Intent shall
be deemed to establish an option for either party and, in addition to all other
rights and remedies available at law or in equity, each of which are reserved,
the provisions of this Paragraph 7 may be specifically enforced and either party
may enforce its rights by seeking injunctive or other relief. The parties
acknowledge and agree that the some of the distributors identified in Exhibit A
are currently under negotiations with IBA, and nothing herein shall be deemed a
prohibition on continuing negotiations with said distributors for the listed
territories.
10. Notwithstanding anything herein to the contrary, IBA shall
have the right to distribute the IBA Products within the Territory provided said
products are sold in containers with a volume of less that 5.5 gallons (for
liquid product or with a weight of less than about 60 lbs (for dry product). The
intent of this provision is that IBA shall have the right to sell the IBA
Products for residential and other smallscale uses.
<PAGE>
11. The parties acknowledge and agree that neither the company
name nor the trade name of the LLC shall include the word "salt.
12. The terms and provisions set forth in the Letter of
Intent, together with other terms and provisions relating to this transaction,
shall be set forth more completely in the agreement. Each party agrees to
diligently proceed with the negotiation, preparation and execution of such a
formal contract prior to the end of the MSP Option Period. Notwithstanding
anything to the contrary contained herein, in the event the contract is not
agreed upon by the parties for any reason whatsoever, other than a part's bad
faith conduct or either parties' violation of the provisions of Paragraph 7,
above, neither party shall have any liability to the other and each party shall
bear its own expenses incurred in connection with this transaction.
13. Any controversy, dispute or claim arising out of or
relating to this Agreement shall be settled by arbitration in the State of
Florida, or in some other mutually agreeable location, in accordance with the
Rules of the American Arbitration Association (Commercial Arbitration Rules)
then existing, except as otherwise specifically provided herein. The parties
hereby agree and consent to personal jurisdiction in the courts of Florida for
purposes of enforcement of the award and any other provisions or rights granted
herein.
14. Except pursuant to a court order or other involuntary
disclosure required by law, the parties agree that the terms of this Letter of
Intent, the terms of the agreements contemplated by this Letter of Intent, and
the negotiations and discussions which occur in connection with this Letter of
Intent shall remain confidential and shall not be disclosed by either party
without the written consent of the other. This prohibition against disclosure
shall survive the closing on this Agreement for the greater of a) a period of
three years or b) the term of the Distribution Agreement.
If this letter accurately sets forth our understanding, please sign and
date a copy of the letter in the space provided below and return it to me. Upon
receipt of this counter-signed letter, the MSP Option Period will begin.
Sincerely,
/s/ Todd Bloomer
--------------------
Todd A. Bloomer, President
Seen, acknowledged and agreed:
Ice Ban America, Inc.
By: /s/Jeff Johnson Date: April 8, 1998
---------------
Name: Jeff Johnson
<PAGE>
EXHIBIT B
ISSUED PATENTS AND PENDING PATENT APPLICATIONS
"Deicing Composition and Method" (Steepwater)
Inventors: George A. Janke and Warren D. Johnson, Jr.
US Patent 5,635,101 Issued 06/03/97
PCT/US97/01008 Application Filed 01/21/97
US Continuation-in-Part
Application No. 08/867,788 Filed 06/03/97
Status: Pending
"Deicing Composition and Method" (VCS)
Inventors: George A. Janke and Warren D. Johnson, Jr.
US Patent 5,709,813 Issued January 20, 1998
PCT/US97/04440 Application Filed 03/19/97
US Continuation-in-Part
Application No. 09/009,174 Filed 01/20/98
Status: Pending
"Deicing Composition and method" (Whey)
Inventors: George A. Janke and Warren D. Johnson, Jr.
US Patent 5,709,812 Issued January 20, 1998
PCT/US97/04374 Application Filed 03/19/97
US Continuation-in-Part
Application No. 09/009,175 Filed 01/20/98
"De-icing Composition and Method" (BCS)
Inventors: Jeffrey A. Johnson and Lawrence Pratt
US Continuation-in-part
Application 08/891,841 Filed July 14, 1997
Status: Pending
EXHIBIT 10.10
SUPPLY AGREEMENT
This Supply Agreement (the "Agreement") is made and entered into this 16th
day of February, 1998, (the "Effective Date") by and between TEMBIND AMERICA,
INC., a corporation duly organized and existing under the laws of Nevada and
having a place of business at 1201 U.S. Highway 1, Suite 205, North Palm Beach,
FL 33408 (hereinafter referred to as "TAI"), and Caloosa Shell Corp., a
Corporation duly organized under the laws of the State of Florida and having a
place of business at 3939 Cockroach Bay Rd., Ruskin, FL 33570 hereinafter
referred to as "Distributor").
WITNESSETH
WHEREAS, TAI desires to supply Distributor with certain Products (as
defined in Article 1).
WHEREAS, Distributor desires to distribute the Products within the
Territory (as defined in Article 1);
WHEREAS, TAI desires to grant to Distributor certain rights with respect to
the Products for the Territory;
WHEREAS, TAI and Distributor desire to enter into this Supply Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS
In addition to terms defined elsewhere in this Agreement, the following
words and phrases shall have the following meanings:
1.1 "Person" means, in the plural as well as in the singular, any natural
person or any corporation, partnership, limited liability company, joint
venture, association, trust, or other entity or organization.
1.2. "Product" and "Products" mean those certain products used for dust
control on roads and outdoor surfaces and for road stabilizers on unpaved roads,
which products comprise, in part, liquid lignosulfonate.
1.3 "TAI Trademarks" means all registered and unregistered trademarks,
service marks, certification marks, collective marks, trade names, icons and
logos and registrations listed in Exhibit A attached hereto, including any
applications therefor and including any and all renewals and extensions thereof,
for the United States of America, and including all registrations that have been
or may be granted on any of the foregoing applications.
-1-
<PAGE>
1.4 "Territory" means the following counties of the state of Florida:
Dixie, Gilcrest, Alachla, Levy, Marion, Citrus, Sumter, Lake Hernando, Pasco,
Pinellas, Hillsboro, Polk, Manatee, Highlands, Hardee, Sarasota, Desoto, Glades,
Charlotte.
ARTICLE 2.
SUPPLY RIGHTS
2.1. TAI hereby agrees to use commercially reasonable efforts to supply
Distributor with sufficient Product to meet the demands of Distributor for the
sale of the Product within the Territory.
2.2. Distributor shall purchase from TAI a minimum annual amount of the
Product equal to 40,000 gallons for each year that this Agreement remains in
force. In the event that more than the minimum purchase amount is exceeded for
any given year, the excess shall not be applied toward meeting the subsequent
year's minimum purchase amount.
ARTICLE 3.
PROHIBITIONS ON DISTRIBUTORSHIP RELATIONSHIP
3.1 Provided Distributor is not in breach of this Agreement, TAI shall not
supply the Product or otherwise authorize another Person to distribute and sell
the Product within the Territory.
3.2 Distributor shall not without prior written permission solicit sales or
otherwise advertise the Product outside the Territory. In the event that
Distributor receives orders or requests for information from a Person outside
the Territory, or by a Person inside the Territory where the Products are
purchased with the intent of use outside the Territory, Distributor shall refer
said entities to TAI or to the authorized Distributor for the relevant area.
3.3 Unless it obtains the prior written permission of TAI, Distributor
shall not sell the Product to any Person outside the Territory or to any Person
inside the Territory where Distributor knows that the Product is being purchased
with the intent of use outside the Territory.
3.4 Distributor shall not without prior written permission attempt to
purchase any Product from any suppliers (authorized or unauthorized) other than
TAI.
3.5 TAI shall include the prohibitions of this Article in any and all
similar supply agreements that TAI shall enter for territories within
geographical boundaries of the United States of America.
ARTICLE 4.
DEVELOPING THE MARKET
4.1 Distributor shall exercise best efforts to maximize the sale of the
Products within the Territory. Distributor shall make regular and sufficient
contact with existing and potential customers in order to develop a market for
the Products. Distributor shall also maintain adequate sales facilities, storage
facilities, and supply to ensure prompt service to its customers.
-2-
<PAGE>
4.2. TAI shall have the right, but not the obligation, to engage in
regional and national advertising programs to promote the use and sale of the
Products.
4.3. From time to time, and to the extent practicable, TAI shall provide
Distributor with such information as TAI considers appropriate to assist
Distributor in the preparation of sales promotion materials for the Territory.
ARTICLE 5.
PRICING
5.1 TAI shall invoice Distributor for all product sold to or on behalf of
Distributor, and Distributor shall pay said invoice within 2% 10 days, 20 days
net, from receipt of said invoice.
5.2 TAI shall charge Distributor a price for the Product that shall be the
lowest wholesale price that TAI sells other distributors.
ARTICLE 6.
GRANT OF TRADEMARK LICENSE
6.1 TAI hereby grants to Distributor a non-exclusive right and license to
utilize the TAI Trademarks within the Territory in connection with the
marketing, distribution and sale of the Product provided: 1) All such usage of
the TAI Trademarks is approved by TAI; and 2) Distributor is not in breach of
this Agreement. The grant of this provision, however, specifically excludes the
right of Distributor to sublicense or assign any of said rights to another
Person.
ARTICLE 7.
USE OF TRADEMARKS LICENSED HEREUNDER
7.1 Distributor agrees to mark any products sold under any TAI Trademarks
in such a manner as to conform with the trademark laws and practice of the
country of manufacture or sale. Any such products sold under any TAI Trademark
will be made in accordance with the written guidelines designated by the TAI,
which guidelines may change from time to time, and the licensed usage shall not
reflect adversely upon the good name of the owner. Prior to distributing any
advertising, promotional or marketing materials, Distributor shall furnish to
TAI free of cost, for its written approval, examples of said materials to be
used by Distributor in connection with the TAI Trademarks.
7.2 TAI shall have the right to inspect all products sold by Distributor
under the TAI Trademarks to ensure compliance with the owner's quality control
requirements, provided TAI gives reasonable notice.
7.3 Distributor shall use the TAI Trademarks licensed hereunder with the
applicable symbols identifying trademark ownership or registration, namely, (R)
or (TM), whichever is appropriate, as required by TAI's trademark attorneys.
7.4 Distributor acknowledges that a great value exists in each TAI
Trademark, and therefore, every use of an TAI Trademark shall inure to the
benefit of TAI.
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7.5 Upon termination or expiration of this Agreement, Distributor shall
immediately cease any and all use of the TAI Trademarks.
ARTICLE 8.
INFRINGEMENT
8.1 Distributor and TAI shall inform the other immediately within seven (7)
calendar days in writing of any alleged trademark infringement within the
Territory relating to the Products, whether the alleged infringement is by
Distributor, TAI, or a third party.
8.2 During the term of this Agreement, TAI shall have the sole right to
take legal action for infringement of any TAI Trademark, all at its own expense.
In furtherance of such right, Distributor hereby agrees that TAI may include
Distributor as a party plaintiff in any such suit, without expense to
Distributor. The total cost of any such infringement action commenced or
defended solely by TAI shall be borne by TAI.
8.3 In the event that a declaratory judgment action alleging invalidity or
non- infringement of any of the TAI Trademarks shall be brought against
Distributor, TAI, at its option, shall have the right, within thirty (30) days
after commencement of such action, to intervene and take over the sole defense
of the action at its own expense.
8.4 Notwithstanding any provision in this Agreement to the contrary, TAI
shall not be responsible for any incidental or consequential damages of
Distributor, including loss of profit, cost of capital, loss of goodwill,
increased operating costs or any other special or incidental damages, caused by
any such infringement activity or law suits.
ARTICLE 9.
WARRANTY
9.1 The parties acknowledge that the Products are based on by-products from
various agriculturally-related processes, and as such, TAI has limited control
over the manufacturing process. Also, the actual performance of various Products
as road binding or dust control compositions may vary from batch to batch.
Distributor acknowledges that it is familiar with the performance capabilities
of the Products as dust control compositions and road stabilizers. TAI warrants
that all Products sold under this Agreement shall perform substantially the same
as the Products have historically performed. Testing and other quality control
techniques are utilized to the extent that TAI deems necessary to support this
warranty.
9.2 In the event of a breach of any warranty provided by this Article,
TAI's maximum liability shall be limited to the replacement or credit to
Distributor's account for any goods that are returned by Distributor, provided
that a) TAI is promptly notified in writing upon discovery by Distributor that
the goods failed to conform to this Agreement, and b) Distributor gives
objective proof of failure of the goods to perform substantially in conformance
with this Agreement, and c) said non-conformance was not caused by accident,
misuse, abuse, neglect, alteration, improper application, improper testing,
improper environment, or external causes beyond the control of TAI.
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ARTICLE 10.
ASSIGNABILITY
10.1 This Agreement may be assigned only in connection with the following
circumstances: (a) a change in name or legal status of either party hereto,
which change does not affect the nature of the respective business activities;
(b) the sale by a party hereto of substantially all the assets of the business
to which the licensed rights relate or the sale of a separable business unit
related to a portion of the licensed rights; or (c) otherwise with the written
permission of the other party, which permission shall be within the complete and
total discretion of said other party.
ARTICLE 11.
PRODUCT LIABILITY AND REPRESENTATION
11.1 Indemnification
(a) Distributor shall indemnify, defend and hold harmless TAI, its
trustees, officers, staff, employees, and agents and their respective
successors, heirs and assigns and ICE BAN USA, INC., (collectively, the
"Indemnities"), against any liability, damage, loss or expense (including
reasonable attorney's fees and expenses of litigation through any and all
appeals) incurred by or imposed upon the Indemnitees or any one of them in
connection with any claims, suits, actions, demands or judgments arising
out of any theory of negligence relating to the application of the Products
by Distributor or its agents, excluding however, any negligence associated
with the manufacturing of the Products. For purposes of example, and
without limitation, this indemnification provision covers liability that
results from the unauthorized alteration of the composition of the Products
by Distributor or its agents.
(b) Distributor agrees, at its own expense, to provide attorneys reasonably
acceptable to the TAI to defend against any actions brought or filed
against any party indemnified hereunder with respect to the subject of
indemnity contained herein, whether or not such actions are rightfully
brought.
(c) This Section 11.1 shall survive expiration or termination of this
Agreement.
11.2 Insurance
(a) Beginning at the time as any such product, process or service is being
commercially distributed or sold (other than for the purpose of obtaining
regulatory approvals) by Distributor, Distributor shall, at its sole cost
and expense, procure and maintain comprehensive general liability insurance
in amounts not less than $2,000,000 per incident and $3,000,000 annual
aggregate and naming the Indemnitees as additional insureds. Such
comprehensive general lability insurance shall provide (i) product
liability coverage and (ii) broad form contractual liability coverage for
Distributor's indemnification under Section 11.1 of this Agreement. The
minimum amount of insurance coverage required under this Section shall not
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be construed to create a limit of Distributor's liability with respect to
its indemnification under the preceding Section of this Agreement.
(b) Distributor shall provide TAI with written evidence of such insurance
upon request of TAI. Distributor shall provide TAI with written notice at
least fifteen (15) days prior to the cancellation, non-renewal or material
change in such insurance; if Distributor does not obtain replacement
insurance providing comparable coverage within such fifteen (15) day
period, TAI shall have the right to terminate this Agreement effective at
the end of such fifteen (15) day period without notice of any additional
waiting periods.
(c) Distributor shall maintain such comprehensive general liability
insurance during
(i) the period that any such product, process or service is being
commercially distributed or sold (other than for the purpose of
obtaining regulatory approvals) by Distributor or agent of
Distributor, and
(ii) a reasonable period after the period referred to in (c)(i) above.
(d) TAI has and will continue to maintain general liability insurance
(which includes product liability with completed operations) of two million
dollars ($2,000,000), plus an umbrella form of one million dollars
($1,000,000). TAI will also maintain general liability insurance on Ocean
Marine/Ocean Cargo, and all necessary workers compensation insurance
required by the laws of the state of Florida. TAI shall bear the cost of
said insurance.
(e) This Section 11.2 shall survive expiration or termination of this
Agreement.
ARTICLE 12.
CONFIDENTIALITY
12.1 In the performance of their respective duties hereunder, each party
hereto will be exposed to certain Confidential Information of the other party.
Each party acknowledges and agrees that the other party's Confidential
Information represents a substantial investment by the other party and that any
disclosure or use of the other party's Confidential Information, except as
otherwise authorized in this Agreement, or any violation of the confidentiality
provisions of this Agreement would be wrongful and could cause irreparable
injury to the other party.
12.2 As used in this Agreement, Confidential Information shall be defined
as that information which is, for any reason, disclosed to another party and
confidential or proprietary to a party and shall include:
12.2.1 information, whether tangible or not, that has been created,
discovered, or developed by the transferring party and which has commercial
value to that party. By way of illustration, but not limitation,
Confidential Information shall include any patent applications, trade
secrets, processes, formulae, experimental designs, results, and
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conclusions, technological data and know-how, improvements, inventions,
techniques, planned products, research and development, marketing plans,
business plans, strategies, forecasts, customer lists, confidential
information about finances, marketing, pricing, costs and compensation
structures;
12.2.2 information that is in written, tabulated, graphic, machine readable
or other tangible form, including experimental designs, results and
conclusions, technological data and know-how, designs, memoranda, models,
prototypes, and any other tangible information; and
12.2.3 information that is furnished orally or in other non-tangible means,
if it is confirmed as being Confidential Information by the furnishing
party in a written instrument delivered within thirty (30) days after such
delivery. Reasonable efforts shall be used to identify such orally
delivered information as being Confidential Information at the time of oral
delivery. Any such confirmatory instrument shall summarize the relevant
Confidential Information and the date of its oral delivery and refer to
this Agreement.
12.3 The confidentiality and limited use obligations of this Agreement
shall not apply to information received pursuant to this Agreement which:
12.3.1 is generally known and available in the public domain at the time it
was disclosed or became generally known and available in the public domain
through no fault of the receiving party;
12.3.2 is known to the receiving party at the time of disclosure as shown
by documentation which was prepared contemporaneously with the receipt or
creation of that information;
12.3.3 is or becomes known to the receiving party from a source other than
the providing party without breach of this Agreement and otherwise not in
violation of a party's rights; or
12.3.4 is disclosed pursuant to the order or requirement of a Court,
administrative agency, or other governmental body, provided, that prompt
notice thereof is provided to the providing party to enable that party, if
it so desires, to seek a protective order or otherwise prevent such
disclosure.
12.4. Except as required to exercise its rights or perform its obligations
under this Agreement, or as required by a court of or regulatory agency of
competent jurisdiction, each party shall:
12.4.1 not redistribute, market, publish, disclose or divulge to any Person
any Confidential Information of the other party;
12.4.2 not permit any of its officers, staff, employees, and agents to
disclose any Confidential Information of the other party, or permit its
officers, staff, employees, and agents to do any of the actions prohibited
of said party;
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12.4.3 adhere to the other party's confidentiality requirements that the
other party may establish in writing from time to time;
12.4.4. immediately notify the other party in writing of any unauthorized
disclosure or use of any Confidential Information of the other party; and
12.4.5. assist the other party, at the other party's expense and to the
extent necessary, in the procurement of any protection of the other party's
rights in or to any of its Confidential Information;
at all times during the term of this Agreement and for a period of three (3)
years subsequent to its expiration or earlier termination.
12.5. The parties agree that, in the event of a breach or threatened breach
of the terms of this Article by one of the parties hereto, the non-breaching
party shall be entitled to an injunction prohibiting any such breach or
disclosure of any Confidential Information. In addition to injunctive relief,
the injured party shall have all other rights and remedies afforded it by law.
The parties acknowledge that the Confidential Information is valuable and unique
and that disclosure in breach of this Agreement will result in irreparable
injury to the party who owns the Confidential Information.
ARTICLE 13
TERM
13.1 This Agreement shall become effective upon execution by all parties
hereto and shall remain in effect for one (1) year from the Effective Date as
identified on page 1 hereof. This agreement shall renew automatically each year
thereafter on the anniversary date for an additional period of one (1) year,
unless either party shall provide written notice of an intent not to renew,
which notice shall be given at least 120 days prior to a renewal date.
ARTICLE 14
BREACH AND TERMINATION
14.1 Either party may terminate this Agreement upon the occurrence of an
Event of Default (as defined hereafter) by giving written notice to the other
party. An Event of Default as to either party shall mean:
A) Failure by a party to perform any of its material obligations under this
Agreement (including specifically without limitation the failure to make
any payment whatsoever due and payable hereunder) within the time frames
provided or otherwise contemplated by this Agreement, provided such failure
continues uncorrected for thirty (30) days after written notice thereof
from the other party; or
B) The filing by a party of a petition under any applicable bankruptcy
statute, or any similar code or statute; the voluntarily or involuntarily
filing of an action against a party under any applicable bankruptcy statute
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or any similar code or statute, provided said party fails to receive
dismissal within sixty (60) days after said filing; the making or
attempting to make an assignment for the benefit of creditors by a party,
or the consenting to or the acquiescence in such relief; the seeking of
relief by a party as a debtor under any applicable law of any jurisdiction
relating to liquidation or reorganization of debtors or to the modification
or alteration of the rights of creditors; or the initiation of proceedings
for liquidation or winding up of a party's business.
14.2 If any party fails to pay any monetary obligation due under this
Agreement when the obligation becomes due, such party shall pay interest on such
amounts due from the due date up to and including the date when such amount and
all interest thereon are paid in full at a rate per annum equal to the rate of
interest commonly known and referred to as the "prime interest rate." The
parties agree to use the prime interest rate as periodically published in the
Wall Street Journal during any default period. Acceptance by a party of any
overdue payment and/or any interest due thereon shall not constitute a waiver of
any breach of this Agreement, including specifically the breach associated with
the untimely payment.
14.3 Upon termination of this Agreement for any reason, the following shall
apply:
14.3.1 Distributor shall return any and all advertising material,
information, or technical material which Distributor possesses.
14.3.2 Distributor shall immediately pay all amounts owing by it to TAI, or
at the option of TAI, Distributor shall return any inventory for which
Distributor has not made payment; and
14.4 Upon termination of this Agreement for any reason, nothing herein
shall be construed to release either party from any obligation that matured
prior to the effective date of such termination.
14.5 Upon termination of this Agreement for any reason, any and all
licenses that have been granted Distributor by this Agreement shall immediately
terminate.
14.6 Upon termination of this Agreement for any reason, the parties shall
continue to be bound by the following sections 11.1; 11.2; 12.1-12.5; 15.1;
16.1-16.3; 18.3; 18.5; and 18.7.
ARTICLE 15
FORCE MAJEURE
15.1 Neither party will be responsible for delays resulting from causes
beyond the reasonable control of such party, including without limitation fire,
explosion, flood, war, strike, or riot, provided that the non-performing party
uses commercially reasonable efforts to avoid or remove such causes of
nonperformance and continues performance under this Agreement with reasonable
dispatch whenever such causes are removed.
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15.2 In the event that Distributor is unable to deliver product to a end
user, or unable to deliver product without a substantial delay, because of
causes beyond its control as recited in the preceding section, TAI shall have
the right, but not the obligation, to step into the shoes of Distributor for the
period during which Distributor is unable to deliver to a end user, or unable to
deliver without a substantial delay.
ARTICLE 16
ARBITRATION
16.1 Any controversy, dispute or claim out of or relating to this Agreement
shall be settled by arbitration in the State of Florida, or in some other
mutually agreeable location, in accordance with the Rules of the American
Arbitration Association (Commercial Arbitration Rules) then existing, except as
otherwise specifically provided herein.
16.2 The Arbitration shall be conducted by a panel of three (3) arbitrators
to be chosen by the American Arbitration Association. The dispute shall be
resolved by majority vote of the three (3) arbitrators. All costs and expenses
of such arbitration shall be share equally between both parties; provided,
however, that each party shall be responsible for its own attorneys' fees.
16.3 For the purpose of enforcing an arbitration award granted herein or
enforcing any other provisions or rights hereunder, the parties hereby agree and
consent to in personam jurisdiction in the courts of the State of Florida. The
award rendered by the arbitrators shall be final and judgment may be entered
upon the award in any court having jurisdiction of the matter.
ARTICLE 17
NOTICES AND OTHER COMMUNICATIONS
17.1 All notices, requests, demands and other communications which are
required or may be given under this Agreement shall unless otherwise provided
for elsewhere in this Agreement, be in writing and shall be deemed to have been
duly given if and when (i) transmitted by telecopier facsimile with proof of
confirmation from the transmitting machine, or (ii) delivered by courier or
other hand delivery, as follows:
(a) in the case of TAI:
TEMBIND AMERICA, INC.
1201 U.S. HWY 1, Suite 205
North Palm Beach, Florida 33408
Telecopy: (315) 337-0117
Attention: Joseph S. Kroll
and a copy to:
BAISE, MILLER & FREER
815 Connecticut Avenue, N.W.
Suite 620
Washington, D.C. 20006-4004
Telecopy: (202) 331-9060
Attention: Robert E. Freer, Jr., Esq.
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(b) in the case of Distributor:
Caloosa Shell Corporation
P.O. Box 7240
Sun City, FL 33586
Attention: William W. Casey, President
or to such other address or telecopy number as either party shall have specified
by notice in writing to the other party. All such notices, requests, demands and
communications shall be deemed to be effective upon receipt.
ARTICLE 18.
MISCELLANEOUS PROVISIONS
18.1 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN THE
SUPPLY AGREEMENT, TAI MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY
KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND VALIDITY OF TRADEMARKS,
UNLESS SAID WARRANTIES ARE REQUIRED BY LAW.
18.2 In construing this Agreement, the following principles shall be
followed: (i) no consideration shall be given to the captions of the articles,
sections, subsections or clauses, which are inserted for convenience in locating
the provisions of this Agreement and not as an aid in construction: (ii) no
consideration shall be given to the fact or presumption that any of the parties
had a greater or lesser hand in drafting this Agreement; (iii) examples shall
not be construed to limit, expressly or by implication, the matter they
illustrate; (iv) the word "includes" and its syntactic variants mean "includes,
but is not limited to" and corresponding syntactic variant expressions; (v) the
plural shall be deemed to include the singular, and vice versa; (vi) each gender
shall be deemed to include the other gender; and (vii) each exhibit, appendix,
attachment and schedule to this Agreement is a part of this Agreement.
18.3 This Agreement shall not be recorded or otherwise disclosed without
the prior written permission of TAI.
18.4 The relationship hereby established between the undersigned parties is
that of independent contractors. This Agreement shall not create an agency,
partnership, joint venture, or employer/employee relationship, and nothing
hereunder shall be deemed to authorize either party to act for, represent or
bind the other except as expressly provided in this Agreement.
18.5 In the event of any litigation between the parties hereto and with
respect to the subject matter of this Agreement, the unsuccessful party to such
litigation covenants and agrees to pay to the prevailing party therein all
attorneys' fees and court costs incurred therein by such prevailing party
(including through any and all appeals), and all of such fees and costs shall be
included in and as a part of any judgment rendered in such litigation.
18.6. TAI and Distributor further agree for themselves and for their
successors and assigns, to execute and deliver without further consideration any
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further applications, assignments, licenses and other documents, and to perform
such other acts as may be deemed reasonably necessary by the other, its
successors, assigns, and nominees, fully to secure its interest in all of the
aforesaid assignments, licenses, and other grants of benefits by said parties.
18.7. The parties hereto agree to make its respective employees reasonably
available to the other party, at the other party's expense, to reasonably assist
and otherwise reasonably cooperate in the preparation and prosecution of
applications for patents, trademarks, and copyrights, and to execute any and all
applications, assignments, affidavits and any other papers in connection
therewith necessary to perfect such rights.
18.8. This Agreement shall be construed, governed, interpreted and applied
in accordance with the laws of the State of Florida, USA, excluding conflicts of
law principles of such jurisdiction.
18.9. The parties hereto acknowledge that this Agreement sets forth the
entire agreement and understanding of the parties hereto as to the subject
matter hereof, and shall not be subject to any change or modification except by
the execution of a written instrument subscribed to by the parties hereto.
18.10. The provisions of this Agreement are severable, and in the event
that any provisions of this Agreement shall be determined to be invalid or
unenforceable under any controlling body of the law, such invalidity or
unenforceability shall not in any way affect the validity or enforceability of
the remaining provisions hereof.
18.11 The failure of either party to assert a right hereunder or to
insist upon compliance with any term or condition for this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to
perform any such term or condition by the other party. No waiver of any right
under this Agreement shall be deemed effective unless contained in writing and
signed by the party charged with such waiver. All rights, remedies,
undertakings, obligations and agreements contained in this Agreement shall be
cumulative, and none of them shall be a limitation of any other remedy, right,
undertaking, obligation or agreement.
18.12 This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all together shall constitute the
same Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement the day
and year set forth below.
Feb. 18, 1998 By: /s/ William W Casey
------------------------------
Name: William W. Casey
Title: President
TEMBIND AMERICA, INC.
By:/s/ George A Janke
----------------------------
Name: George A. Janke, President
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EXHIBIT A
TRADEMARK RIGHTS
"TEMBIND"
U.S. Trademark Application Serial No. 75/367,613 Filed October 3, 1997
FOR: DUST CONTROL AGENT FOR GRAVEL SURFACES, ROADS, TRAILS
AND OTHER SURFACES; ROAD STABILIZER AND BINDER
APPLICANT: Ice Ban USA, Inc.
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EXHIBIT 10.11
DEDERT
TERMS AND CONDITIONS OF RENTAL
RENTAL RATE $0 Rental Rate (/s/Jeff Johnson)
The rental fee listed is quoted as a monthly rate. Rental invoices will be
issued every four to five weeks (approximately monthly) and the terms of payment
are net on receipt of invoice.
RENTAL PERIOD No Minimum Period (/s/Jeff Johnson)
The rental period is to commence on the first day of the week following receipt
of the equipment at Customer's plant, and will conclude the week the equipment
is received at Dedert storage area. The basic rental fee includes Dedert cost to
recondition the effects of normal wear and tear on the equipment. The minimum
rental period will be one month. The maximum rental period will be six months.
If additional rental time is needed, new terms will be required.
DATA Agree (/s/Jeff Johnson)
Dedert Corporation will be provided with all data and results resulting from
operation with this equipment. Dedert Corporation will assist Customer with
procedures necessary to obtain maximum benefit from equipment and will help
interpret the test data and recommend appropriate changes during the course of
the test work.
INSURANCE Do Not Agree (/s/Jeff Johnson)
The Customer is responsible for insurance on the unit from the day of shipment
from Dedert until th equipment is returned again to Dedert.
TRANSPORTATION Agree (/s/Jeff Johnson)
The Customer is responsible for all shipping and transportation costs, including
proper repacking of the unit prior to shipment back to Dedert.
INSTALLATION Lyons Falls Pulp and Paper Mill is responsible (/s/Jeff Johnson)
The Customer is responsible for first class installation of the equipment,
providing proper auxiliaries and instruments to conduct the test program in such
a way as to minimize delay and assure technical test objectives are met.
DAMAGE Do Not Agree (/s/Jeff Johnson)
The rental fees include normal wear and tear of the equipment. The Dedert
Corporation will attempt to ship this pilot equipment in suitable condition and
with auxiliaries as agreed. The Customer is requested to inspect the equipment
upon receipt and advise of deficiencies so that corrective action is not
delayed.
The rental fees do not include damage to the equipment as a result of corrosive
or abrasive attack, mechanical or electrical overload damage, or the
consequences of operator misuse and abuse. Dedert will inspect the equipment
upon its return, will notify the Customer promptly of any abnormal damage to the
<PAGE>
unit, and will follow this notification as quickly as practical with an itemized
listing of the damages and the extra cost to be borne by the Customer for
repairing the unit.
LIMIT OF LIABILITY Agree (/s/Jeff Johnson)
In renting this equipment, Dedert makes no guarantees as to equi9pment
performance nor does Dedert accept any responsibility or obligations for loss of
the Customer's product or damage to his property or equipment of injury to
personnel resulting from the operation of the equipment by the Customer while it
is under rental and in their possession Nor does Dedert by renting this
equipment accept any liability for infringement of patents because of the use of
this equipment by the Customer to produce a patented product or to operate it as
a part of a patented process.
Agreed and accepted by: with changes!
/s/Jeff Johnson
- -------------------
Authorized Signature
Date July 23, 1998
EXHIBIT 10.12
PURCHASE-SALE AGREEMENT
This Supply Agreement (the "Agreement") is made and entered into this
23rd day of November, 1998, (the "Effective Date") by and between ROADBIND
AMERICA, INC., a corporation duly organized and existing under the laws of
Nevada and having a place of business at 1201 U.S. Highway 1, Suite 205, North
Palm Beach, FL 33408 (hereinafter referred to as "RAI"), and Elevage USA
Corporation, a company duly organized under the laws of the and having a place
of business at 2775 Hackney Road, Ft. Lauderdale, Florida 33331 (hereinafter
referred to as "Purchaser").
RECITALS
WHEREAS, RAI desires to sell Purchaser certain Products (as defined in
Article 1).
WHEREAS, the Products are covered by a pending patent application which
has been filed with the United States;
WHEREAS, Purchaser desires to purchase said Products for sale within a
certain Territory (as defined in Article 1);
WHEREAS, RAI and Purchaser desire to enter into this Purchase-Sale
Agreement to set forth the terms and conditions for the sale of the Products for
the Territory;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
In addition to terms defined elsewhere in this Agreement, the following
words and phrases shall have the following meanings:
1.1 "Person" means, in the plural as well as in the singular, any
natural person or any corporation, partnership, limited liability company, joint
venture, association, trust, or other entity or organization.
1.2 "Product" and "Products" mean those certain products sold by RAI
and that are used for dust control on roads and outdoor surfaces and for road
stabilizers on unpaved roads, which products comprise, in part, liquid
lignosulfonate.
1.3 "RAI Trademarks" means all registered and unregistered trademarks,
service marks, certification marks, collective marks, trade names, icons and
logos and registrations listed in Exhibit A attached hereto, including any
applications therefor and including any and all renewals and extensions thereof,
for the United States of America, and including all registrations that have been
1
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or may be granted on any of the foregoing applications.
1.4 "Territory" means the following countries outside the United
States: Ecuador.
ARTICLE 2
SUPPLY RIGHTS
2.1 RAI hereby agrees to use commercially reasonable efforts to supply
Purchaser with sufficient Product to meet the demands of Purchaser for the sale
of the Product within the Territory.
2.2 Purchaser shall purchase from RAI a minimum annual amount of the
Product equal to 250,000 U.S. gallons for each year that this Agreement remains
in force. In the event that more than the minimum purchase amount is exceeded
for any given year, the excess shall not be applied toward meeting the
subsequent year's minimum purchase amount.
ARTICLE 3
PROHIBITIONS
3.1 Purchaser shall not without prior written permission solicit sales
or otherwise advertise the Product outside the Territory. In the event that
Purchaser receives orders or requests for information from a Person outside the
Territory, or from a Person inside the Territory where Purchaser knows that the
Products are being purchased with the intent of use or re-sale outside the
Territory, Purchaser shall refer said entities to RAI or to the RAI-recognized
supplier for the relevant area.
3.2 Unless Purchaser obtains the prior written permission of RAI,
Purchaser shall not sell the Product to any Person outside the Territory or to
any Person inside the Territory where Purchaser knows that the Products are
being purchased with the intent of use or re-sale outside the Territory.
3.3 Purchaser shall not without prior written permission attempt to
ship or resell any Product in the United States.
ARTICLE 4
PURCHASING & SHIPPING TERMS
4.1 The pricing schedule for the Product shall be as follows:
Volume of Individual Order Price per U.S. Gallon
250,000 -399,999 U.S. Gallons $(U.S.) 1.25
400,000-749,999 U.S. Gallons $(U.S.) 1.18
750,000 and up $(U.S.) 1.10
2
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4.2 RAI reserves the right to decline any order which is less than
250,000 U.S. gallons.
4.3 Purchaser shall pay in advance for the Product. RAI shall have no
obligation to ship the Product unless and until Purchaser arranges for an
acceptable letter of credit with a bank selected by RAI.
4.4 All Product will be shipped F.O.B. Jacksonville, Florida.
ARTICLE 5
GRANT OF TRADEMARK LICENSE
5.1 RAI hereby grants to Purchaser a non-exclusive right and license to
utilize the RAI Trademarks within the Territory in connection with the
marketing, distribution and sale of the Product provided: 1) All such usage of
the RAI Trademarks is approved by RAI; and 2) Purchaser is not in breach of this
Agreement. The grant of this provision, however, specifically excludes the right
of Purchaser to sublicense or assign any of said rights to another Person.
ARTICLE 6
USE OF TRADEMARKS LICENSED HEREUNDER
6.1 Purchaser agrees to mark any products sold under any RAI Trademarks
in such a manner as to conform with the trademark laws and practice of the
country of manufacture or sale. Any such products sold under any RAI Trademark
will be made in accordance with the written guidelines designated by the RAI,
which guidelines may change from time to time, and the licensed usage shall not
reflect adversely upon the good name of the owner. Prior to distributing any
advertising, promotional or marketing materials, Purchaser shall furnish to RAI
free of cost, for its written approval, examples of said materials to be used by
Purchaser in connection with the RAI Trademarks.
6.2 RAI shall have the right to inspect all products sold by Purchaser
under the RAI Trademarks to ensure compliance with the owner's quality control
requirements, provided RAI gives reasonable notice.
6.3 Purchaser shall use the RAI Trademarks licensed hereunder with the
applicable symbols identifying trademark ownership or registration, namely, (R)
or O, whichever is appropriate, as required by RAI's trademark attorneys.
6.4 Purchaser acknowledges that a great value exists in each RAI
Trademark, and therefore, every use of an RAI Trademark shall inure to the
benefit of RAI.
6.5 Upon termination or expiration of this Agreement, Purchaser shall
immediately cease any and all use of the RAI Trademarks.
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ARTICLE 7
INFRINGEMENT
7.1 Purchaser and RAI shall inform the other immediately within seven
(7) calendar days in writing of any alleged trademark infringement within the
Territory relating to the Products, whether the alleged infringement is by
Purchaser, RAI, or a third party.
7.2 During the term of this Agreement, RAI shall have the sole right to
take legal action for infringement of any RAI Trademark, all at its own expense.
In furtherance of such right, Purchaser hereby agrees that RAI may include
Purchaser as a party plaintiff in any such suit, without expense to Purchaser.
The total cost of any such infringement action commenced or defended solely by
RAI shall be borne by RAI.
7.3 In the event that a declaratory judgment action alleging invalidity
or non-infringement of any of the RAI Trademarks shall be brought against
Purchaser, RAI, at its option, shall have the right, within thirty (30) days
after commencement of such action, to intervene and take over the sole defense
of the action at its own expense.
7.4 Notwithstanding any provision in this Agreement to the contrary,
RAI shall not be responsible for any incidental or consequential damages of
Purchaser, including loss of profit, cost of capital, loss of goodwill,
increased operating costs or any other special or incidental damages, caused by
any such infringement activity or law suits.
ARTICLE 8
ASSIGNABILITY
8.1 This Agreement may be assigned only in connection with the
following circumstances: (a) a change in name or legal status of either party
hereto, which change does not affect the nature of the respective business
activities; (b) the sale by a party hereto of substantially all the assets of
the business to which the licensed rights relate or the sale of a separable
business unit related to a portion of the licensed rights; or (c) otherwise with
the written permission of the other party, which permission shall be within the
complete and total discretion of said other party.
ARTICLE 9
LIABILITY FOR PRODUCT'S USE IN TERRITORY
9.1 Indemnification
(a) Purchaser shall indemnify, defend and hold harmless RAI, its
directors, officers, staff, employees, and agents and their respective
successors, heirs and assigns and ICE BAN USA, INC., (collectively,
the "Indemnities"), against any liability, damage, loss or expense
(including reasonable attorney's fees and expenses of litigation
through any and all appeals) incurred by or imposed upon the
Indemnitees or any one of them in connection with any claims, suits,
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actions, demands or judgments arising out of any theory of negligence
relating to the application of the Products by Purchaser or its
agents, excluding however, any negligence associated with the
manufacturing of the Products. For purposes of example, and without
limitation, this indemnification provision covers liability that
results from the unauthorized alteration of the composition of the
Products by Purchaser or its agents.
(b) Purchaser agrees, at its own expense, to provide attorneys
reasonably acceptable to the RAI to defend against any actions brought
or filed against any party indemnified hereunder with respect to the
subject of indemnity contained herein, whether or not such actions are
rightfully brought.
(c) This Section 11.1 shall survive expiration or termination of this
Agreement.
ARTICLE 10
CONFIDENTIALITY
10.1 In the performance of their respective duties hereunder, each
party hereto will be exposed to certain Confidential Information of the other
party. Each party acknowledges and agrees that the other party's Confidential
Information represents a substantial investment by the other party and that any
disclosure or use of the other party's Confidential Information, except as
otherwise authorized in this Agreement, or any violation of the confidentiality
provisions of this Agreement would be wrongful and could cause irreparable
injury to the other party.
10.2 As used in this Agreement, Confidential Information shall be
defined as that information which is, for any reason, disclosed to another party
and confidential or proprietary to a party and shall include information,
whether tangible or not, that has been created, discovered, or developed by the
transferring party and which has commercial value to that party. By way of
illustration, but not limitation, Confidential Information shall include any
patent applications, trade secrets, processes, formulae, experimental designs,
results, and conclusions, technological data and know-how, improvements,
inventions, techniques, planned products, research and development, marketing
plans, business plans, strategies, forecasts, customer lists, confidential
information about finances, marketing, pricing, costs and compensation
structures.
10.3 The confidentiality and limited use obligations of this Agreement
shall not apply to information received pursuant to this Agreement which:
10.3.1 is generally known and available in the public domain
at the time it was disclosed or became generally known and available in the
public domain through no fault of the receiving party;
10.3.2 is known to the receiving party at the time of
disclosure as shown by documentation which was prepared contemporaneously with
the receipt or creation of that information;
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10.3.3 is or becomes known to the receiving party from a
source other than the providing party without breach of this Agreement and
otherwise not in violation of a party's rights; or
10.3.4 is disclosed pursuant to the order or requirement of a
Court, administrative agency, or other governmental body, provided, that prompt
notice thereof is provided to the providing party to enable that party, if it so
desires, to seek a protective order or otherwise prevent such disclosure.
10.4 Except as required to exercise its rights or perform its
obligations under this Agreement, or as required by a court of or regulatory
agency of competent jurisdiction, each party shall:
10.4.1 not redistribute, market, publish, disclose or divulge
to any Person any Confidential Information of the other party;
10.4.2 not permit any of its officers, staff, employees, and
agents to disclose any Confidential Information of the other party, or permit
its officers, staff, employees, and agents to do any of the actions prohibited
of said party;
10.4.3 adhere to the other party's confidentiality
requirements that the other party may establish in writing from time to time;
10.4.4 immediately notify the other party in writing of any
unauthorized disclosure or use of any Confidential Information of the other
party; and
10.4.5 assist the other party, at the other party's expense
and to the extent necessary, in the procurement of any protection of the other
party's rights in or to any of its Confidential Information;
at all times during the term of this Agreement and for a period of three (3)
years subsequent to its expiration or earlier termination.
10.5 The parties agree that, in the event of a breach or threatened
breach of the terms of this Article by one of the parties hereto, the
non-breaching party shall be entitled to an injunction prohibiting any such
breach or disclosure of any Confidential Information. In addition to injunctive
relief, the injured party shall have all other rights and remedies afforded it
by law. The parties acknowledge that the Confidential Information is valuable
and unique and that disclosure in breach of this Agreement will result in
irreparable injury to the party who owns the Confidential Information.
6
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ARTICLE 11
TERM
11.1 This Agreement shall become effective upon execution by all
parties hereto and shall remain in effect for one (1) year from the Effective
Date as identified on page 1 hereof. This agreement shall renew automatically
each year thereafter on the anniversary date for an additional period of one (1)
year, unless either party shall provide written notice of an intent not to
renew, which notice shall be given at least 30 days prior to a renewal date. In
the event that Purchaser does not purchase the minimum annual volume of Product
as required by Section 2.2, this Agreement shall not renew, but shall terminate
on the first anniversary date following the year of non-compliance.
ARTICLE 12
BREACH AND TERMINATION
12.1 Either party may terminate this Agreement upon the occurrence of
an Event of Default (as defined hereafter) by giving written notice to the other
party. An Event of Default as to either party shall mean:
A) Failure by a party to perform any of its material obligations under
this Agreement (including specifically without limitation the failure
to make any payment whatsoever due and payable hereunder) within the
time frames provided or otherwise contemplated by this Agreement,
provided such failure continues uncorrected for thirty (30) days after
written notice thereof from the other party; or
B) The filing by a party of a petition under any applicable bankruptcy
statute or any similar code or statute, or the voluntarily or
involuntarily filing of an action against a party under any applicable
bankruptcy statute or any similar code or statute, provided said party
fails to receive dismissal within sixty (60) days after said filing;
or the initiation of proceedings for liquidation or winding up of a
party's business.
12.2 If any party fails to pay any monetary obligation due under this
Agreement when the obligation becomes due, such party shall pay interest on such
amounts due from the due date up to and including the date when such amount and
all interest thereon are paid in full at a rate per annum equal to the rate of
interest commonly known and referred to as the "prime interest rate." The
parties agree to use the prime interest rate as periodically published in the
Money Rates Section of the Wall Street Journal during any default period.
Acceptance by a party of any overdue payment and/or any interest due thereon
shall not constitute a waiver of any breach of this Agreement, including
specifically the breach associated with the untimely payment.
12.3 Upon termination of this Agreement for any reason, the following
shall apply:
12.3.1 Purchaser shall return any and all advertising material
information, or technical material which Purchaser possesses.
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12.3.2 Purchaser shall immediately pay all amounts owing by it
to RAI, or at the option of RAI, Purchaser shall return any inventory for which
Purchaser has not made payment; and
12.4 Upon termination of this Agreement for any reason, nothing herein
shall be construed to release either party from any obligation that matured
prior to the effective date of such termination.
12.5 Upon termination of this Agreement for any reason, any and all
licenses that have been granted Purchaser by this Agreement shall immediately
terminate.
12.6 Upon termination of this Agreement for any reason, the parties
shall continue to be bound by the following sections 3.1-3.3, 6.4, 6.5, 7.4,
9.1, 10.1-10.5, 12.3, and 14.1-14.3.
ARTICLE 13
FORCE MAJEURE
13.1 Neither party will be responsible for delays resulting from causes
beyond the reasonable control of such party, including without limitation fire,
explosion, flood, war, strike, or riot, provided that the nonperforming party
uses commercially reasonable efforts to avoid or remove such causes of
nonperformance and continues performance under this Agreement with reasonable
dispatch whenever such causes are removed.
ARTICLE 14
ARBITRATION
14.1 Any controversy, dispute or claim out of or relating to this
Agreement shall be settled by arbitration in the State of Florida, or in some
other mutually agreeable location, in accordance with the Rules of the American
Arbitration Association (Commercial Arbitration Rules) then existing, except as
otherwise specifically provided herein.
14.2 The Arbitration shall be conducted by a panel of three (3)
arbitrators to be chosen by the American Arbitration Association. The dispute
shall be resolved by majority vote of the three (3) arbitrators. All costs and
expenses of such arbitration shall be shared equally between both parties;
provided, however, that each party shall be responsible for its own attorneys'
fees.
14.3 For the purpose of enforcing an arbitration award granted herein
or enforcing any other provisions or rights hereunder, the parties hereby agree
and consent to in personam jurisdiction in the courts of the State of Florida.
The award rendered by the arbitrators shall be final and judgment may be entered
upon the award in any court having jurisdiction of the matter.
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ARTICLE 15
NOTICES AND OTHER COMMUNICATIONS
15.1 All notices, requests, demands and other communications which are
required or may be given under this Agreement shall unless otherwise provided
for elsewhere in this Agreement, be in writing and shall be deemed to have been
duly given if and when (i) transmitted by telecopier facsimile with proof of
confirmation from the transmitting machine, or (ii) delivered by courier or
other hand delivery, as follows:
(a) in the case of RAI:
ROADBIND AMERICA, INC.
1201 U.S. Highway One, Suite 205
North Palm Beach, Florida 33408
Telecopy: (315) 337-0117
Attention: Joseph S. Kroll
and a copy to:
BAISE, MILLER & FREER
815 Connecticut Avenue, N.W.
Suite 620
Washington, D.C. 20006-4004
Telecopy: (202) 331-9060
Attention: Robert E. Freer, Jr., Esq.
(b) in the case of Purchaser:
Elevage USA Corporation
2775 Hackney Road
Ft. Lauderdale, Florida 33331
Phone: 305-593-2123
Attention: Luis Duco
or to such other address or telecopy number as either party shall have specified
by notice in writing to the other party. All such notices, requests, demands and
communications shall be deemed to be effective upon receipt.
ARTICLE 16
MISCELLANEOUS PROVISIONS
16.1 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, RAI
MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS
OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY,
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FITNESS FOR A PARTICULAR PURPOSE, AND VALIDITY OF TRADEMARKS, UNLESS SAID
WARRANTIES ARE REQUIRED BY LAW.
16.2 Purchaser acknowledges that certain U.S. patent applications are
pending that cover the Products and that foreign patents may be obtained that
claim priority, directly or indirectly, to said U.S. patent applications.
NOTHING IN THIS AGREEMENT SHALL BE DEEMED TO GRANT TO PURCHASER ANY LICENSES OR
OTHER RIGHTS WITH RESPECT TO ANY U.S. OR FOREIGN PATENTS OR PATENT APPLICATIONS
THEREFOR.
16.3 In construing this Agreement, the following principles shall be
followed: (i) no consideration shall be given to the captions of the articles,
sections, subsections or clauses, which are inserted for convenience in locating
the provisions of this Agreement and not as an aid in construction: (ii) no
consideration shall be given to the fact or presumption that any of the parties
had a greater or lesser hand in drafting this Agreement; (iii) examples shall
not be construed to limit, expressly or by implication, the matter they
illustrate; (iv) the word "includes" and its syntactic variants mean "includes,
but is not limited to" and corresponding syntactic variant expressions; (v) the
plural shall be deemed to include the singular, and vice versa; (vi) each gender
shall be deemed to include the other gender; and (vii) each exhibit, appendix,
attachment and schedule to this Agreement is a part of this Agreement.
16.4 This terms of this Agreement shall not be recorded or otherwise
disclosed without the prior written permission of RAI.
16.5 The relationship hereby established between the undersigned
parties is that of independent contractors. This Agreement shall not create an
agency, partnership, joint venture, or employer/employee relationship, and
nothing hereunder shall be deemed to authorize either party to act for,
represent or bind the other except as expressly provided in this Agreement.
16.6 In the event of any litigation between the parties hereto and with
respect to the subject matter of this Agreement, the unsuccessful party to such
litigation covenants and agrees to pay to the prevailing party therein all
attorneys' fees and court costs incurred therein by such prevailing party
(including through any and all appeals), and all of such fees and costs shall be
included in and as a part of any judgment rendered in such litigation.
16.7 This Agreement shall be construed, governed, interpreted and
applied in accordance with the laws of the State of Florida, U.S.A., excluding
conflicts of law principles of such jurisdiction.
16.8 The parties hereto acknowledge that this Agreement sets forth the
entire agreement and understanding of the parties hereto as to the subject
matter hereof, and shall not be subject to any change or modification except by
the execution of a written instrument subscribed to by the parties hereto.
16.9 The provisions of this Agreement are severable, and in the event
that any provisions of this Agreement shall be determined to be invalid or
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unenforceable under any controlling body of the law, such invalidity or
unenforceability shall not in any way affect the validity or enforceability of
the remaining provisions hereof.
16.10 The failure of either party to assert a right hereunder or to
insist upon compliance with any term or condition for this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to
perform any such term or condition by the other party. No waiver of any right
under this Agreement shall be deemed effective unless contained in writing and
signed by the party charged with such waiver. All rights, remedies,
undertakings, obligations and agreements contained in this Agreement shall be
cumulative, and none of them shall be a limitation of any other remedy, right,
undertaking, obligation or agreement.
The parties have duly executed this Agreement the day and year set forth below.
By: /s/ Louis Duco
-------------------------
Name: Louis Duco
Title: V. President
ROADBIND AMERICA, INC.
By: /s/ George Janke
Name: George A. Janke, President
AA. Joseph S. Kroll
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EXHIBIT A
TRADEMARK RIGHTS
"RB ULTRA"
U.S. Trademark Application is being filed based on actual use
"RB ULTRA PLUS"
U.S. Trademark Application is being filed based on actual use
FOR: DUST CONTROL AGENT FOR GRAVEL SURFACES, ROADS, TRAILS AND OTHER
SURFACES; ROAD STABILIZER AND BINDER
APPLICANT: Ice Ban USA, Inc.
12
EXHIBIT 10.13
EXCLUSIVE RIGHT TO LEASE CONTRACT
THE TERMS OF THIS AGREEMENT FOR REAL ESTATE SERVICES TO BE PROVIDED ARE
NEGOTIABLE. THIS IS A LEGALLY BINDING CONTRACT, IF YOU HAVE ANY QUESTIONS
CONCERNING THIS CONTRACT YOU SHOULD CONSULT AN ATTORNEY BEFORE SIGNING IT.
This is an agreement between Ice Ban America, Inc. hereinafter referred to as
the Landlord and Jeanne Whipple Realty hereinafter referred to as the Broker.
1. AUTHORITY AND ABILITY TO RENT/LEASE
The Landlord has complete legal authority and ability to lease the
premises located at 12118 E. Yates Circle Road, Lyndonville, MM 14098 (for more
than one unit, use separate page to list the property and prices), and agrees to
tender to the tenant a 1 year lease. The landlord has not entered into any other
agreement which would affect the rental of the Property except as follows: (name
or specify agreement) None.
2. GRANT OF EXCLUSIVE RIGHT TO LEASE
In the consideration of the Broker's agreement to list the property in
its Rentals Listing Service, the Landlord hereby grants to the Broker as of
2/22/99, unit and including 5/22/99 (expiration date), the exclusive right to
lease/rent property for the sum of 12,000.00 per year and/or at such other price
or terms which Landlord may consent. The Landlord understands that he/she has
the final authority to enter into a lease agreement with the prospective tenant,
and that he/she has the right to meet with such prospects.
The Landlord agrees to pay the Broker a commission of 10% (maximum one
months rent) providing the Apartment/Property is rented/leased before the
expiration of this agreement, whether such a lease is made by the Broker or the
Landlord, or by anyone else. The Landlord authorizes Broker to be paid from any
deposits or rent Broker collects at the time of leasing the Unit. Such
compensation shall also be paid if the unit is leased/rented within 60 days
after the termination of this agreement or by any extension thereof to anyone
who received information about the property prior to final termination. However,
the Landlord shall not be obligated to pay such compensation if a valid
exclusive right to lease listings agreement is entered into during the term of
such protection period with another licensed real estate broker and the
apartment is rented or leased during the term of said protection period.
3. BROKERS REPRESENTATIONS AND SERVICES
The Broker represents that the Broker is duly licensed under the laws
of the State of New York as a real estate broker. The Broker, during the term of
this Contract will: (a) Use his/her best efforts to procure a ready, willing and
able tenant: (b) Provide professional advice and assistance in accordance with
the Brokers legal obligations of reasonable care, undivided loyalty,
confidentiality, full disclosure, obedience and duty to account.
4. SUBMISSION OF LEASE APPLICATIONS
All Lease/Rental Applications will be presented to Landlord for his/her
approval/decision prior to the execution of a Lease unless otherwise agreed to
between Landlord and Broker.
5. OBLIGATIONS OF THE LANDLORD
It is agreed that this property/apartment is listed in full compliance
with local, State an Federal Fair Housing Laws against discrimination on the
<PAGE>
basis of race, creed, color, national origin, sex, age, disability, marital
status, or familial status.
6. DISCLOSURE
The seller has signed and received a Disclosure Regarding Real Estate
Agency Relationships, which New York State law requires.
7. AUTHORITY TO PUBLISH PROPERTY DATA
The Broker is hereby authorized to photograph said property and use
such photographs in promoting the property. The Landlord hereby acknowledges
receipt of a copy of this contract.
8. INFORMATION ABOUT THE PROPERTY
All information about the property I have given the Broker is accurate
and complete. The Landlord understands that the Broker must disclose to
prospective tenants and any other persons all facts known to the Broker
materially affecting the value or desirability of property, except as otherwise
provided by the law. The Landlord authorizes Broker to transfer any keys in
his/her possession to the new tenants unless otherwise stated. Landlord
authorizes Broker to use a Lockbox where appropriate.
9. SIGNS
The Landlord authorizes the Broker to place a "For Rent"/"For Lease"
sign on property
10. LEAD BASED PAINT HAZARDS
The Landlord represents that the property { } was or { X } was not
built prior to 1978. The Landlord acknowledges that the broker has notified the
Landlord of his/her obligation to disclose any knowledge concerning the presence
of lead based paint hazards and to provide a tenant with an opportunity to
inspect the property for the presence of lead based paint hazards for any
property built prior to 1978.
OTHER:
------------------------------------------------------------
/s/ Jeanne Whipple Realty /s/Darren D. Cork 2/22/99
- ---------------------------------- -------------------------------
BROKER LANDLORD
/s/ Jeanne Whipple /s/Darren D. Cork 2/22/99
- --------------------------------- ---------------------------------
AGENT LANDLORD
EXHIBIT 10.14
TERMINAL & TRANSLOADING AGREEMENT
This Agreement is made by and between Roadbind America, Inc., 1201 U.S. Highway
1, Suite 215, North Palm Beach, Florida 33408 (RB), and Na-Churs Plant Food
Company d.b.a. Na-Churs/Alpine Solutions, 3185 Cline Road, Corydon, Indiana
47112 ("Na-Churs/Alpine").
NOW THEREFORE, in consideration of the mutual promises and conditions contained
herein, the parties hereby agree as follows:
1. Material Terminalized Na-Churs/Alpine will receive, store and transload out
the following materials ("Materials") for RB at the Na-Churs/Alpine
Corydon, Indiana plant ("Facility").
a. Ammonium lignosulfonate (Roadbind Ultra Plus)
b. Iceban ( fermented grain extracts, grain, steep liquor, brewers
soluble, vintners and whey)
c. Magnesium chloride solution (25-35%) (Dustgard)
2. Inventory Ownership The materials shall be delivered FOB to the Na-
Churs/Alpine Facility in RB designated trucks and/or tank cars. All
inventoried Materials will be owned by RB.
3. Storage and Terminaling Na-Churs/Alpine will store the Materials in
Na-Churs/ Alpine storage tanks having the capacity of 110,000 gallons.
Transloading (out) will be measured via Na-Churs/Alpine's electronic
micromotion meters (rather than truck sales). Such meters shall be
certified on a regular basis as required by law.
4. Minimum Volume RB agrees to guarantee a minimum of 200,000 gallons per
calendar year through the Na-Churs/Alpine Facility.
5. Terminal Fees RB agrees to pay the following fees to Na-Churs/Alpine:
a. $2.50 per short ton per month for storage.
b. $4.00 per short ton for Transloading into the terminal.
c. $4.50 per short ton for Transloading out of the terminal.
The above fees shall be billed to RB on a monthly basis, and RB will pay
said fees within thirty (30) days of the invoice date. Monthly storage fees
will be determined by the quantity of inventory at the Na-Churs/Alpine
Facility on the last business day of each month.
<PAGE>
6. Shrinkage Na-Churs/Alpine agrees to use its best plant procedures to
maintain shrinkage Below 0.5%.
7. Paperwork RB will provide its own paperwork (Bills of Lading, Inventory
Records/Accounting, MSDS Sheets and Specifications Sheets) for storage and
Transloading of Materials.
8. Product Withdrawal RB shall give adequate (at least 8 hours) notice of
withdrawal to Na-Churs/Alpine to perform its duties during normal business
hours.
9. Indemnification Na-Churs/Alpine agrees to indemnify and hold RB harmless
for:
a. Materials loss in excess of normal shrinkage due to spillage or tank
and equipment leakage.
b. Environmental consequences from any such product loss and/or acts and
omissions by Na-Churs/Alpine Facility.
Roadbind America agrees to be responsible for:
a. Insurance (liability and property) on all Roadbind Materials stored at
the Na-Churs/Alpine Facility.
b. Any applicable taxes ( personal property or otherwise) associated with
the Roadbind Materials stored at the Na-Churs/Alpine Facility.
11. Discrepancies and Inspections If any discrepancies shall arise as a result
of terminalizing and Transloading both parties shall use there best efforts
to quickly resolve such differences. RB shall have a reasonable opportunity
during normal business hours to inspect its Materials and the equipment
used by Na-Churs/Alpine for the purpose of terminalizing and Transloading
of Materials.
12. Confidentiality Both parties acknowledge that during the course of the
Agreement, each may obtain confidential information regarding the other
Party's business. Both parties agree to treat all such information and the
terms of this Agreement as confidential and to take all reasonable
precautions against Disclosure of such information to unauthorized third
parties during and after the term of this Agreement. Upon request, all
documents relating to the Confidential information will be returned to its
owner.
13. Amendment This Agreement may be modified or Amended if the amendment is
made in writing and is signed by both parties.
14. Term of Agreement This Agreement shall remain in effect on an "Evergreen"
basis or until notified by either party in writing of a default or
discontinuation.
<PAGE>
15. Termination It is agreed that in case of a material breach by either party
of any of the provisions contained in this Agreement, the other party shall
have the right to terminate its option, terminate this Agreement.
Additionally, either party may terminate this Agreement by giving the other
party sixty-(60) day's prior written notification of such termination.
16. Assignment Neither party shall assign its interest or obligations under
this Agreement without the prior written consent of the other party.
17. Entire Agreement This Agreement constitutes the sole and only agreement of
the parties hereto and supersedes any prior understandings or oral written
agreements between the parties respecting this Agreement.
18. Saving Clause If any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or
unenforceability shall not affect any other provision therefore and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein.
19. Applicable Law This Agreement shall be construed under and in accordance
with the laws of the State of Ohio.
IN WITNESS WHEREOF, the parties have executed this Agreement this 14th day of
Aug, 1999.
ROADBIND AMERICA, INC.
/s/ Joseph S Kroll
-------------------------
Joseph S. Kroll, Vice President
NA-CHURS/ALPINE SOLUTIONS
/s/ D Randal Blank
--------------------------
D. Randall Blank, CEO
<PAGE>
AMENDMENT TO
TERMINAL & TRANSLOADING AGREEMENT
This is an amendment ("First Amendment") to the Agreement dated August 14, 1999
by and between Roadbind America, Inc., 1201 US Highway 1, Suite 215, North Palm
Beach, Florida 33408 ("Roadbind"), and Na-Churs Plant Food Company dba
Na-Churs/Alpine Solutions, 3185 Cline Road, Corydon, Indiana 47112
("Na-Churs/Alpine").
It has been discovered that a portion of Paragraph 15 of the Agreement was
omitted during e.mail transmission, and this First Amendment is to correct that
error. Now therefore, in consideration of the mutual promises and conditions
contained herein, the parties hereby agree that Paragraph 15 of the Agreement is
hereby deleted and replaced with the following language:
15. Termination. It is agreed that in case of a material breach by either party
of any of the provisions contained in this Agreement, the other party shall
have the right to terminate this Agreement at its option. Furthermore, if
either party becomes insolvent, makes a general assignment for the benefit
of creditors, has a petition or any proceeding under the bankruptcy laws
filed by or against it or any other law relating to debtors relief, or if a
receiver is appointed to take control of the business of either party, the
other party may, at its option, terminate this Agreement. Additionally,
either party may terminate this Agreement by giving the other party sixty
(60) days prior written notification of such termination.
All other provisions of the Agreement remain unchanged.
IN WITNESS WHEREOF, the parties have executed this First Amendment this 3rd day
of September, 1999.
ROADBIND AMERICA, INC.
/s/ Joseph S. Kroll
---------------------
NA-CHURS/ALPINE SOLUTIONS
D. Randall Blank, CEO
-----------------------------
EXHIBIT 10.15
SUPPLY AGREEMENT
This Supply Agreement (the "Agreement") is made and entered into this
19th day of April, 1999, (the "Effective Date") by and between ROADBIND AMERICA,
INC., a corporation duly organized and existing under the laws of Nevada and
having a place of business at 1201 U.S. Highway 1, Suite 205, North Palm Beach,
FL 33408 (hereinafter referred to as "RBA"), and Roadway Solutions, Inc., a duly
organized business under the laws of the State of Michigan and having a place of
business at 05916 US 31 South, Charleviox, MI 49720 616-547-9660, 616-547-6681
(fax) (hereinafter referred to as "Distributor").
RECITALS
WHEREAS, RBA desires to supply Distributor with certain Products (as
defined in Article 1).
WHEREAS, Distributor desires to distribute the Products within the
Territory (as defined in Article 1);
WHEREAS, RBA desires to grant to Distributor certain rights with respect to
the Products for the Territory;
WHEREAS, RBA and Distributor desire to enter into this Supply Agreement;
WHEREAS, the Products are covered by a pending patent application (the
"Patent Application") which has been filed with the United States;
WHEREAS, RBA may acquire rights under any patents that issue from the
Patent Application;
WHEREAS, RBA may be in a position to license the rights that RBA may
acquire under any patents that issue from the Patent Application;
WHEREAS Distributor acknowledges that if any patents issue from the Patent
Application, that a license may be required to distribute and/or use the
Products within the Territory;
WHEREAS Distributor and RBA acknowledge that they may wish to negotiate a
license under any rights that RBA may acquire under any patents that issue from
the Patent Application;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto agree as follows:
The parties agree that the recitals above are true and correct and are made
a part hereof by reference. The parties further agree as follows:
ARTICLE 1.
DEFINITIONS
In addition to terms defined elsewhere in this Agreement, the following
words and phrases shall have the following meanings:
1.1 "Person" means, in the plural as well as in the singular, any natural
person or any corporation, partnership, limited liability company, joint
venture, association, trust, or other entity or organization.
1.2 "Product" and "Products" means those certain products used for dust
control on roads and other earthen surfaces and for road stabilizers on unpaved
roads, which products comprise, in part, liquid lignosulfonate.
1.3 "RBA Trademarks" means all registered and unregistered trademarks,
service marks, certification marks, collective marks, trade names, icons and
logos and registrations listed in Exhibit A attached hereto, including any
applications therefor and including any and all renewals and extensions thereof,
<PAGE>
for the United States of America, and including all registrations that have been
or may be granted on any of the foregoing applications.
1.4 "Territory" means the following states: Michigan .
ARTICLE 2.
SUPPLY RIGHTS
2.1 RBA hereby agrees to use commercially reasonable efforts to supply
Distributor with sufficient Product to meet the demands of Distributor for the
sale of the Product within the Territory.
2.2 Distributor shall purchase from RBA a minimum annual amount of the
Product equal to ( N/A) U.S. gallons for each year that this Agreement remains
in force. In the event that more than the minimum purchase amount is exceeded
for any given year, the excess shall not be applied toward meeting the
subsequent year's minimum purchase amount.
ARTICLE 3.
PROHIBITIONS ON DISTRIBUTORSHIP RELATIONSHIP
3.1 Provided Distributor is not in breach of this Agreement, RBA shall not
supply the Product or otherwise authorize another Person to distribute and sell
the Product within the Territory.
3.2 Distributor shall not without prior written permission solicit sales or
otherwise advertise the Product outside the Territory. In the event that
Distributor receives orders or requests for information from a Person outside
the Territory, or by a Person inside the Territory where the Products are
purchased with the intent of use outside the Territory, Distributor shall refer
said entities to RBA or to the authorized Distributor for the relevant area.
3.3 Unless it obtains the prior written permission of RBA, Distributor
shall not sell the Product to any Person outside the Territory or to any Person
inside the Territory where Distributor knows that the Product is being purchased
with the intent of use outside the Territory.
3.4 Distributor shall not without prior written permission attempt to
purchase any Product from any suppliers (authorized or unauthorized) other than
RBA.
3.4 RBA shall include the prohibitions of this Article in any and all
similar supply agreements that RBA shall enter for territories within
geographical boundaries of the United States of America.
ARTICLE 4.
DEVELOPING THE MARKET
4.1 Distributor shall exercise best efforts to maximize the sale of the
Products within the Territory. Distributor shall make regular and sufficient
contact with existing and potential customers in order to develop a market for
the Products. Distributor shall also maintain adequate sales facilities, storage
facilities, and supply to ensure prompt service to its customers.
4.2 RBA shall have the right, but not the obligation, to engage in regional
and national advertising programs to promote the use and sale of the Products.
4.3 Distributor has the obligation to engage in state advertising and
publicity and to attend highway official road conferences from time to time to
the extent practicable. RBA shall provide Distributor with such information as
RBA considers appropriate to assist Distributor in the preparation of sales
promotion materials for the Territory.
<PAGE>
ARTICLE 5.
PRICING
5.1 RBA shall invoice Distributor for all product sold to or on behalf of
Distributor, and Distributor shall pay said invoice within 2% 10 days, 20 days
net, from receipt of said invoice.
5.2 RBA shall charge Distributor a price for the Product as follows: $50 a
ton FOB Our storage facility.
ARTICLE 6.
GRANT OF TRADEMARK LICENSE
6.1 RBA hereby grants to Distributor a non-exclusive right and license to
utilize the RBA Trademarks within the Territory in connection with the
marketing, distribution and sale of the Product provided: 1) All such usage of
the RBA Trademarks is approved by RBA; and 2) Distributor is not in breach of
this Agreement. The grant of this provision, however, specifically excludes the
right of Distributor to sublicense or assign any of said rights to another
Person.
ARTICLE 7.
USE OF TRADEMARKS LICENSED HEREUNDER
7.1 Distributor agrees to mark any products sold under any RBA Trademarks
in such a manner as to conform with the trademark laws and practice of the
country of manufacture or sale. Any such products sold under any RBA Trademark
will be made in accordance with the written guidelines designated by the RBA,
which guidelines may change from time to time, and the licensed usage shall not
reflect adversely upon the good name of the owner. Prior to distributing any
advertising, promotional or marketing materials, Distributor shall furnish to
RBA free of cost, for its written approval, examples of said materials to be
used by Distributor in connection with the RBA Trademarks.
7.2 RBA shall have the right to inspect all products sold by Distributor
under the RBA Trademarks to ensure compliance with the owner's quality control
requirements, provided RBA gives reasonable notice.
7.3 Distributor shall use the RBA Trademarks licensed hereunder with the
applicable symbols identifying trademark ownership or registration, namely, (R)
or (TM), whichever is appropriate, as required by RBA's trademark attorneys.
7.4 Distributor acknowledges that a great value exists in each RBA
Trademark, and therefore, every use of an RBA Trademark shall inure to the
benefit of RBA.
7.5 Upon termination or expiration of this Agreement, Distributor shall
immediately cease any and all use of the RBA Trademarks.
ARTICLE 8.
INFRINGEMENT
8.1 Distributor and RBA shall inform the other immediately within seven (7)
calendar days in writing of any alleged trademark infringement within the
Territory relating to the Products, whether the alleged infringement is by
Distributor, RBA, or a third party.
8.2 During the term of this Agreement, RBA shall have the sole right to
take legal action for infringement of any RBA Trademark, all at its own expense.
In furtherance of such right, Distributor hereby agrees that RBA may include
Distributor as a party plaintiff in any such suit, without expense to
Distributor. The total cost of any such infringement action commenced or
defended solely by RBA shall be borne by RBA.
8.3 In the event that a declaratory judgment action alleging invalidity or
non-infringement of any of the RBA Trademarks shall be brought against
Distributor, RBA, at its option, shall have the right, within thirty (30) days
<PAGE>
after commencement of such action, to intervene and take over the sole defense
of the action at its own expense.
8.4 Notwithstanding any provision in this Agreement to the contrary, RBA
shall not be responsible for any incidental or consequential damages of
Distributor, including loss of profit, cost of capital, loss of goodwill,
increased operating costs or any other special or incidental damages, caused by
any such infringement activity or law suits.
ARTICLE 9.
WARRANTY
10. The parties acknowledge that the Products are based on by-products from
various agriculturallyrelated processes, and as such, RBA has limited control
over the manufacturing process. Also, the actual performance of various Products
as road binding or dust control compositions may vary from batch to batch.
Distributor acknowledges that it is familiar with the performance capabilities
of the Products as dust control compositions and soil stabilizers. RBA warrants
that all Products sold under this Agreement shall perform substantially the same
as the Products have historically performed. Testing and other quality control
techniques are utilized to the extent that RBA deems necessary to support this
warranty.
10.1 In the event of a breach of any warranty provided by this Article,
RBA's maximum liability shall be limited to the replacement or credit to
Distributor's account for any goods that are returned by Distributor, provided
that a) RBA is promptly notified in writing upon discovery by Distributor that
the goods failed to conform to this Agreement, and b) Distributor gives
objective proof of failure of the goods to perform substantially in conformance
with this Agreement, and c) said non-conformance was not caused by accident,
misuse, abuse, neglect, alteration, improper application, improper testing,
improper environment, or external causes beyond the control of RBA.
ARTICLE 11.
ASSIGNABILITY
11.1 This Agreement may be assigned only in connection with the following
circumstances: (a) a change in name or legal status of either party hereto,
which change does not affect the nature of the respective business activities;
(b) the sale by a party hereto of substantially all the assets of the business
to which the licensed rights relate or the sale of a separable business unit
related to a portion of the licensed rights; or (c) otherwise by distributor the
written permission of the other party.
ARTICLE 12.
PRODUCT LIABILITY AND REPRESENTATION
12.1 Indemnification
(a) Distributor shall indemnify, defend and hold harmless RBA, its
trustees, officers, staff, employees, and agents and their respective
successors, heirs and assigns and ICE BAN USA, INC., (collectively,
the "Indemnities"), against any liability, damage, loss or expense
(including reasonable attorney's fees and expenses of litigation
through any and all appeals) incurred by or imposed upon the
Indemnitees or any one of them in connection with any claims, suits,
actions, demands or judgments arising out of any theory of negligence
relating to the application of the Products by Distributor or its
agents, excluding however, any negligence associated with the
manufacturing of the Products. For purposes of example, and without
limitation, this indemnification provision covers liability that
results from the unauthorized alteration of the composition of the
Products by Distributor or its agents.
(b) Distributor agrees, at its own expense, to provide attorneys
reasonably acceptable to the RBA to defend against any actions brought
or filed against any party indemnified hereunder with respect to the
subject of indemnity contained herein, whether or not such actions are
rightfully brought.
<PAGE>
(c) This Section 11.1 shall survive expiration or termination of this
Agreement.
12.2 Insurance
(a) Beginning at the time as any such product, process or service is
being commercially distributed or sold (other than for the purpose of
obtaining regulatory approvals) by Distributor, Distributor shall, at
its sole cost and expense, procure and maintain comprehensive general
liability insurance in amounts not less than $2,000,000 per incident
and $3,000,000 annual aggregate and naming the Indemnitees as
additional insureds. Such comprehensive general liability insurance
shall provide (i) product liability coverage and (ii) broad form
contractual liability coverage for Distributor's indemnification under
Section 11.1 of this Agreement. The minimum amount of insurance
coverage required under this Section shall not be construed to create
a limit of Distributor's liability with respect to its indemnification
under the preceding Section of this Agreement.
(b) Distributor shall provide RBA with written evidence of such
insurance upon execution of this agreement. Distributor shall provide
RBA with written notice at least fifteen (15) days prior to the
cancellation, non-renewal or material change in such insurance; if
Distributor does not obtain replacement insurance providing comparable
coverage within such fifteen (15) day period, RBA shall have the right
to terminate this Agreement effective at the end of such fifteen (15)
day period without notice of any additional waiting periods.
(c) Distributor shall maintain such comprehensive general liability
insurance during
(i) the period that any such product, process or service is being
commercially distributed or sold (other than for the purpose of
obtaining regulatory approvals) by Distributor or agent of
Distributor, and
(ii) a reasonable period after the period referred to in (c)(i)
above.
(d) RBA has and will continue to maintain general liability insurance
(which includes product liability with completed operations) of two
million dollars ($2,000,000), plus an umbrella form of one million
dollars ($1,000,000). RBA will also maintain general liability
insurance on Ocean Marine/Ocean Cargo, and all necessary workers
compensation insurance required by the laws of the state of Florida.
RBA shall bear the cost of said insurance.
(e) This Section 11.2 shall survive expiration or termination of this
Agreement.
ARTICLE 13.
CONFIDENTIALITY
13.1 In the performance of their respective duties hereunder, each party
hereto will be exposed to certain Confidential Information of the other party.
Each party acknowledges and agrees that the other party's Confidential
Information represents a substantial investment by the other party and that any
disclosure or use of the other party's Confidential Information, except as
otherwise authorized in this Agreement, or any violation of the confidentiality
provisions of this Agreement would be wrongful and could cause irreparable
injury to the other party.
13.2 As used in this Agreement, Confidential Information shall be defined
as that information which is, for any reason, disclosed to another party and
confidential or proprietary to a party and shall include:
13.2.1 information, whether tangible or not, that has been created,
discovered, or developed by the transferring party and which has commercial
value to that party. By way of illustration, but not limitation,
Confidential Information shall include any patent applications, trade
secrets, processes, formulae, experimental designs, results, and
conclusions, technological data and know-how, improvements, inventions,
techniques, planned products, research and development, marketing plans,
business plans, strategies, forecasts, customer lists, confidential
information about finances, marketing, pricing, costs and compensation
structures;
<PAGE>
13.2.2 information that is in written, tabulated, graphic, machine
readable or other tangible form, including experimental designs, results
and conclusions, technological data and know-how, designs, memoranda,
models, prototypes, and any other tangible information; and
13.2.3 information that is furnished orally or in other non-tangible
means, if it is confirmed as being Confidential Information by the
furnishing party in a written instrument delivered within thirty (30) days
after such delivery. Reasonable efforts shall be used to identify such
orally delivered information as being Confidential Information at the time
of oral delivery. Any such confirmatory instrument shall summarize the
relevant Confidential Information and the date of its oral delivery and
refer to this Agreement.
13.3 The confidentiality and limited use obligations of this Agreement
shall not apply to information received pursuant to this Agreement which:
13.3.1 is generally known and available in the public domain at the
time it was disclosed or became generally known and available in the public
domain through no fault of the receiving party;
13.3.2 is known to the receiving party at the time of disclosure as
shown by documentation which was prepared contemporaneously with the
receipt or creation of that information;
13.3.3 is or becomes known to the receiving party from a source other
than the providing party without breach of this Agreement and otherwise not
in violation of a party's rights; or
13.3.4 is disclosed pursuant to the order or requirement of a Court,
administrative agency, or other governmental body, provided, that prompt
notice thereof is provided to the providing party to enable that party, if
it so desires, to seek a protective order or otherwise prevent such
disclosure.
13.4 Except as required to exercise its rights or perform its obligations
under this Agreement, or as required by a court of or regulatory agency of
competent jurisdiction, each party shall:
13.4.1 not redistribute, market, publish, disclose or divulge to any
Person any Confidential Information of the other party;
13.4.2 not permit any of its officers, staff, employees, and agents to
disclose any Confidential Information of the other party, or permit its
officers, staff, employees, and agents to do any of the actions prohibited
of said party;
13.4.3 adhere to the other party's confidentiality requirements that
the other party may establish in writing from time to time;
13.4.4 immediately notify the other party in writing of any
unauthorized disclosure or use of any Confidential Information of the other
party; and
13.4.5 assist the other party, at the other party's expense and to the
extent necessary, in the procurement of any protection of the other party's
rights in or to any of its Confidential Information;
at all times during the term of this Agreement and for a period of three (3)
years subsequent to its expiration or earlier termination.
13.5 The parties agree that, in the event of a breach or threatened breach
of the terms of this Article by one of the parties hereto, the non-breaching
party shall be entitled to an injunction prohibiting any such breach or
disclosure of any Confidential Information. In addition to injunctive relief,
the injured party shall have all other rights and remedies afforded it by law.
The parties acknowledge that the Confidential Information is valuable and unique
and that disclosure in breach of this Agreement will result in irreparable
injury to the party who owns the Confidential Information.
<PAGE>
ARTICLE 14.
TERM
14.1 This Agreement shall become effective upon execution by all parties
hereto and shall remain in effect for one (1) year from the Effective Date as
identified on page 1 hereof. This agreement shall renew automatically each year
thereafter on the anniversary date for an additional period of one (1) year,
unless either party shall provide written notice of an intent not to renew,
which notice shall be given at least 120 days prior to a renewal date.
ARTICLE 15.
BREACH AND TERMINATION
15.1 Either party may terminate this Agreement upon the occurrence of an
Event of Default (as defined hereafter) by giving written notice to the other
party. An Event of Default as to either party shall mean:
A) Failure by a party to perform any of its material obligations under this
Agreement (including specifically without limitation the failure to make
any payment whatsoever due and payable hereunder) within the time frames
provided or otherwise contemplated by this Agreement, provided such failure
continues uncorrected for thirty (30) days after written notice thereof
from the other party; or
B) The filing by a party of a petition under any applicable bankruptcy
statute, or any similar code or statute; the voluntarily or involuntarily
filing of an action against a party under any applicable bankruptcy
statute, or any similar code or statute, provided said party fails to
receive dismissal within sixty (60) days after said filing; the making or
attempting to make an assignment for the benefit of creditors by a party,
or the consenting to or the acquiescence in such relief; the seeking of
relief by a party as a debtor under any applicable law of any jurisdiction
relating to liquidation or reorganization of debtors or to the modification
or alteration of the rights of creditors; or the initiation of proceedings
for liquidation or winding up of a party's business.
15.2 If any party fails to pay any monetary obligation due under this
Agreement when the obligation becomes due, such party shall pay interest on such
amounts due from the due date up to and including the date when such amount and
all interest thereon are paid in full at a rate per annum equal to the rate of
interest commonly known and referred to as the "prime interest rate." The
parties agree to use the prime interest rate as periodically published in the
Wall Street Journal during any default period. Acceptance by a party of any
overdue payment and/or any interest due thereon shall not constitute a waiver of
any breach of this Agreement, including specifically the breach associated with
the untimely payment.
15.3 Upon termination of this Agreement for any reason, the following shall
apply:
15.3.1 Distributor shall return any and all advertising material,
information, or technical material which Distributor possesses.
15.3.2 Distributor shall immediately pay all amounts owing by it to
RBA, or at the option of RBA, Distributor shall return any inventory for
which Distributor has not made payment; and
15.4 Upon termination of this Agreement for any reason, nothing herein
shall be construed to release either party from any obligation that matured
prior to the effective date of such termination.
15.5 Upon termination of this Agreement for any reason, any and all
licenses that have been granted Distributor by this Agreement shall immediately
terminate.
15.6 Upon termination of this Agreement for any reason, the parties shall
continue to be bound by the following sections 11.1; 11.2; 12.1-12.5; 15.1;
16.1-16.3; 18.3; 18.5; and 18.7.
<PAGE>
ARTICLE 16
FORCE MAJEURE
16.1 Neither party will be responsible for delays resulting from causes
beyond the reasonable control of such party, including without limitation fire,
explosion, flood, war, strike, or riot, provided that the nonperforming party
uses commercially reasonable efforts to avoid or remove such causes of
nonperformance and continues performance under this Agreement with reasonable
dispatch whenever such causes are removed.
16.2 In the event that Distributor is unable to deliver product to a end
user, or unable to deliver product without a substantial delay, because of
causes beyond its control as recited in the preceding section, RBA shall have
the right, but not the obligation, to step into the shoes of Distributor for the
period during which Distributor is unable to deliver to a end user, or unable to
deliver without a substantial delay.
ARTICLE 17.
ARBITRATION
17.1 Any controversy, dispute or claim out of or relating to this Agreement
shall be settled by arbitration in the State of Florida, or in some other
mutually agreeable location, in accordance with the Rules of the American
Arbitration Association (Commercial Arbitration Rules) then existing, except as
otherwise specifically provided herein.
17.2 The Arbitration shall be conducted by a panel of three (3) arbitrators
to be chosen by the American Arbitration Association. The dispute shall be
resolved by majority vote of the three (3) arbitrators. All costs and expenses
of such arbitration shall be share equally between both parties; provided,
however, that each party shall be responsible for its own attorneys' fees.
17.3 For the purpose of enforcing an arbitration award granted herein or
enforcing any other provisions or rights hereunder, the parties hereby agree and
consent to in personam jurisdiction in the courts of the State of Florida. The
award rendered by the arbitrators shall be final and judgment may be entered
upon the award in any court having jurisdiction of the matter.
ARTICLE 18.
NOTICES AND OTHER COMMUNICATIONS
18.1 All notices, requests, demands and other communications which are
required or may be given under this Agreement shall unless otherwise provided
for elsewhere in this Agreement, be in writing and shall be deemed to have been
duly given if and when (i) transmitted by telecopier facsimile with proof of
confirmation from the transmitting machine, or (ii) delivered by courier or
other hand delivery, as follows:
(a) in the case of RBA:
ROADBIND AMERICA, INC.
1201 U.S. HWY 1, Suite 205
North Palm Beach, Florida 33408
Telecopy: (315) 337-0117
Attention: Joseph S. Kroll
and a copy to:
BAISE, MILLER & FREER
1020 Nineteenth St., NW
Suite 400
Washington, D.C. 20036
Telecopy: (202) 331-9060
Attention: Robert E. Freer, Jr., Esq.
<PAGE>
(b) in the case of Distributor:
Roadway Solutions, Inc.
05916 US 31 South
Charleviox, MI 49720
Telecopy: (616) 547-6681
Attention: Doug Way, Jr.
or to such other address or telecopy number as either party shall have specified
by notice in writing to the other party. All such notices, requests, demands and
communications shall be deemed to be effective upon receipt.
ARTICLE 19.
MISCELLANEOUS PROVISIONS
19.1 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN THE
SUPPLY AGREEMENT, RBA MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY
KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND VALIDITY OF TRADEMARKS,
UNLESS SAID WARRANTIES ARE REQUIRED BY LAW.
19.2 In construing this Agreement, the following principles shall be
followed: (i) no consideration shall be given to the captions of the articles,
sections, subsections or clauses, which are inserted for convenience in locating
the provisions of this Agreement and not as an aid in construction: (ii) no
consideration shall be given to the fact or presumption that any of the parties
had a greater or lesser hand in drafting this Agreement; (iii) examples shall
not be construed to limit, expressly or by implication, the matter they
illustrate; (iv) the word "includes" and its syntactic variants mean "includes,
but is not limited to" and corresponding syntactic variant expressions; (v) the
plural shall be deemed to include the singular, and vice versa; (vi) each gender
shall be deemed to include the other gender; and (vii) each exhibit, appendix,
attachment and schedule to this Agreement is a part of this Agreement.
19.3 This Agreement shall not be recorded or otherwise disclosed without
the prior written permission of RBA.
19.4 The relationship hereby established between the undersigned parties is
that of independent contractors. This Agreement shall not create an agency,
partnership, joint venture, or employer/employee relationship, and nothing
hereunder shall be deemed to authorize either party to act for, represent or
bind the other except as expressly provided in this Agreement.
19.5 In the event of any litigation between the parties hereto and with
respect to the subject matter of this Agreement, the unsuccessful party to such
litigation covenants and agrees to pay to the prevailing party therein all
attorneys' fees and court costs incurred therein by such prevailing party
(including through any and all appeals), and all of such fees and costs shall be
included in and as a part of any judgment rendered in such litigation.
19.6 RBA and Distributor further agree for themselves and for their
successors and assigns, to execute and deliver without further consideration any
further applications, assignments, licenses and other documents, and to perform
such other acts as may be deemed reasonably necessary by the other, its
successors, assigns, and nominees, fully to secure its interest in all of the
aforesaid assignments, licenses, and other grants of benefits by said parties.
19.7 The parties hereto agree to make its respective employees reasonably
available to the other party, at the other party's expense, to reasonably assist
and otherwise reasonably cooperate in the preparation and prosecution of
applications for patents, trademarks, and copyrights, and to execute any and all
applications, assignments, affidavits and any other papers in connection
therewith necessary to perfect such rights.
19.8 This Agreement shall be construed, governed, interpreted and applied
in accordance with the laws of the State of Florida, U.S.A., excluding conflicts
of law principles of such jurisdiction.
19.9 The parties hereto acknowledge that this Agreement sets forth the
entire agreement and understanding of the parties hereto as to the subject
<PAGE>
matter hereof, and shall not be subject to any change or modification except by
the execution of a written instrument subscribed to by the parties hereto.
19.10 The provisions of this Agreement are severable, and in the event that
any provisions of this Agreement shall be determined to be invalid or
unenforceable under any controlling body of the law, such invalidity or
unenforceability shall not in any way affect the validity or enforceability of
the remaining provisions hereof.
19.11 The failure of either party to assert a right hereunder or to insist
upon compliance with any term or condition for this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to
perform any such term or condition by the other party. No waiver of any right
under this Agreement shall be deemed effective unless contained in writing and
signed by the party charged with such waiver. All rights, remedies,
undertakings, obligations and agreements contained in this Agreement shall be
cumulative, and none of them shall be a limitation of any other remedy, right,
undertaking, obligation or agreement.
19.12 This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all together shall constitute the
same Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement the day and
year set forth below.
Roadway Solutions, Inc.
By: /s/ DJ Way
Name: D.J. Way
Title: President
ROADBIND AMERICA, INC.
By: Joseph S. Kroll
Name: Joseph S. Kroll, Vice President / General Manager
<PAGE>
EXHIBIT A
TRADEMARK RIGHTS
"RB ULTRA"
U.S. Trademark Application Serial No. TBA Filed February 2, 1999
FOR: COMPOSITIONS FOR ROAD DUST CONTROL AND STABILIZZATION
APPLICANT: Roadbind America, Inc.
EXHIBIT 10.16
SUPPLY AGREEMENT
This Supply Agreement (the "Agreement") is made and entered into this
24th day of February, 1999, (the "Effective Date") by and between ROADBIND
AMERICA, INC., a corporation duly organized and existing under the laws of
Nevada and having a place of business at 1201 U.S. Highway 1, Suite 205, North
Palm Beach, FL 33408 (hereinafter referred to as "RAI"), and RPR, Inc., a duly
organized business under the laws of the State of Alaska and having a place of
business at P.O. Box 110209, Anchorage, Alaska 99511 (hereinafter referred to as
"Distributor").
RECITALS
WHEREAS, RAI desires to supply Distributor with certain Products (as
defined in Article 1).
WHEREAS, Distributor desires to distribute the Products within the
Territory (as defined in Article 1);
WHEREAS, RAI desires to grant to Distributor certain rights with respect to
the Products for the Territory;
WHEREAS, RAI and Distributor desire to enter into this Supply Agreement;
WHEREAS, the Products are covered by a pending patent application (the
"Patent Application") which has been filed with the United States;
WHEREAS, RAI may acquire rights under any patents that issue from the
Patent Application;
WHEREAS, RAI may be in a position to license the rights that RAI may
acquire under any patents that issue from the Patent Application;
WHEREAS Distributor acknowledges that if any patents issue from the Patent
Application, that a license may be required to distribute and/or use the
Products within the Territory;
WHEREAS Distributor and RAI acknowledge that they may wish to negotiate a
license under any rights that RAI may acquire under any patents that issue from
the Patent Application;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto agree as follows:
The parties agree that the recitals above are true and correct and are made
a part hereof by reference. The parties further agree as follows:
ARTICLE 1.
DEFINITIONS
In addition to terms defined elsewhere in this Agreement, the following
words and phrases shall have the following meanings:
1.1 "Person" means, in the plural as well as in the singular, any natural
person or any corporation, partnership, limited liability company, joint
venture, association, trust, or other entity or organization.
1.2 "Product" and "Products" means those certain products used for dust
control on roads and other earthen surfaces and for road stabilizers on unpaved
roads, which products comprise, in part, liquid lignosulfonate.
1.3 " Trademarks" means all registered and unregistered trademarks,
service marks, certification marks, collective marks, trade names, icons and
logos and registrations listed in Exhibit A attached hereto, including any
applications therefor and including any and all renewals and extensions thereof,
for the United States of America, and including all registrations that have been
or may be granted on any of the foregoing applications.
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1.4 "Territory" means the following states: Alaska .
ARTICLE 2.
SUPPLY RIGHTS
2.1 RAI hereby agrees to use commercially reasonable efforts to supply
Distributor with sufficient Product to meet the demands of Distributor for the
sale of the Product within the Territory.
2.2 Distributor shall purchase from RAI a minimum annual amount of the
Product equal to ( N/A) U.S. gallons for each year that this Agreement remains
in force. In the event that more than the minimum purchase amount is exceeded
for any given year, the excess shall not be applied toward meeting the
subsequent year's minimum purchase amount.
ARTICLE 3.
PROHIBITIONS ON DISTRIBUTORSHIP RELATIONSHIP
3.1 Provided Distributor is not in breach of this Agreement, RAI shall not
supply the Product or otherwise authorize another Person to distribute and sell
the Product within the Territory.
3.2 Distributor shall not without prior written permission solicit sales or
otherwise advertise the Product outside the Territory. In the event that
Distributor receives orders or requests for information from a Person outside
the Territory, or by a Person inside the Territory where the Products are
purchased with the intent of use outside the Territory, Distributor shall refer
said entities to RAI or to the authorized Distributor for the relevant area.
3.3 Unless it obtains the prior written permission of RAI, Distributor
shall not sell the Product to any Person outside the Territory or to any Person
inside the Territory where Distributor knows that the Product is being purchased
with the intent of use outside the Territory.
3.4 Distributor shall not without prior written permission attempt to
purchase any Product from any suppliers (authorized or unauthorized) other than
RAI.
3.4 RAI shall include the prohibitions of this Article in any and all
similar supply agreements that RAI shall enter for territories within
geographical boundaries of the United States of America.
ARTICLE 4.
DEVELOPING THE MARKET
4.1 Distributor shall exercise best efforts to maximize the sale of the
Products within the Territory. Distributor shall make regular and sufficient
contact with existing and potential customers in order to develop a market for
the Products. Distributor shall also maintain adequate sales facilities, storage
facilities, and supply to ensure prompt service to its customers.
4.2 RAI shall have the right, but not the obligation, to engage in regional
and national advertising programs to promote the use and sale of the Products.
4.3 Distributor has the obligation to engage in state advertising and
publicity and to attend highway official road conferences from time to time to
the extent practicable. RAI shall provide Distributor with such information as
RAI considers appropriate to assist Distributor in the preparation of sales
promotion materials for the Territory.
ARTICLE 5.
PRICING
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5.1 RAI shall invoice Distributor for all product sold to or on behalf of
Distributor, and Distributor shall pay said invoice within 2% 10 days, 20 days
net, from receipt of said invoice.
5.2 RAI shall charge Distributor a price for the Product as follows: $70 a
ton FOB storage.
ARTICLE 6.
GRANT OF TRADEMARK LICENSE
6.1 RAI hereby grants to Distributor a non-exclusive right and license to
utilize the RAI Trademarks within the Territory in connection with the
marketing, distribution and sale of the Product provided: 1) All such usage of
the RAI Trademarks is approved by RAI; and 2) Distributor is not in breach of
this Agreement. The grant of this provision, however, specifically excludes the
right of Distributor to sublicense or assign any of said rights to another
Person.
ARTICLE 7.
USE OF TRADEMARKS LICENSED HEREUNDER
7.1 Distributor agrees to mark any products sold under any RAI Trademarks
in such a manner as to conform with the trademark laws and practice of the
country of manufacture or sale. Any such products sold under any RAI Trademark
will be made in accordance with the written guidelines designated by the RAI,
which guidelines may change from time to time, and the licensed usage shall not
reflect adversely upon the good name of the owner. Prior to distributing any
advertising, promotional or marketing materials, Distributor shall furnish to
RAI free of cost, for its written approval, examples of said materials to be
used by Distributor in connection with the RAI Trademarks.
7.2 RAI shall have the right to inspect all products sold by Distributor
under the RAI Trademarks to ensure compliance with the owner's quality control
requirements, provided RAI gives reasonable notice.
7.3 Distributor shall use the RAI Trademarks licensed hereunder with the
applicable symbols identifying trademark ownership or registration, namely, (R)
or (TM), whichever is appropriate, as required by RAI's trademark attorneys.
7.4 Distributor acknowledges that a great value exists in each RAI
Trademark, and therefore, every use of an RAI Trademark shall inure to the
benefit of RAI.
7.5 Upon termination or expiration of this Agreement, Distributor shall
immediately cease any and all use of the RAI Trademarks.
ARTICLE 8.
INFRINGEMENT
8.1 Distributor and RAI shall inform the other immediately within seven (7)
calendar days in writing of any alleged trademark infringement within the
Territory relating to the Products, whether the alleged infringement is by
Distributor, RAI, or a third party.
8.2 During the term of this Agreement, RAI shall have the sole right to
take legal action for infringement of any RAI Trademark, all at its own expense.
In furtherance of such right, Distributor hereby agrees that RAI may include
Distributor as a party plaintiff in any such suit, without expense to
Distributor. The total cost of any such infringement action commenced or
defended solely by RAI shall be borne by RAI.
8.3 In the event that a declaratory judgment action alleging invalidity or
non-infringement of any of the RAI Trademarks shall be brought against
Distributor, RAI, at its option, shall have the right, within thirty (30) days
after commencement of such action, to intervene and take over the sole defense
of the action at its own expense.
8.4 Notwithstanding any provision in this Agreement to the contrary, RAI
shall not be responsible for any incidental or consequential damages of
<PAGE>
Distributor, including loss of profit, cost of capital, loss of goodwill,
increased operating costs or any other special or incidental damages, caused by
any such infringement activity or law suits.
ARTICLE 9.
WARRANTY
9.1 The parties acknowledge that the Products are based on by-products from
various agriculturallyrelated processes, and as such, RAI has limited control
over the manufacturing process. Also, the actual performance of various Products
as road binding or dust control compositions may vary from batch to batch.
Distributor acknowledges that it is familiar with the performance capabilities
of the Products as dust control compositions and soil stabilizers. RAI warrants
that all Products sold under this Agreement shall perform substantially the same
as the Products have historically performed. Testing and other quality control
techniques are utilized to the extent that RAI deems necessary to support this
warranty.
9.2 In the event of a breach of any warranty provided by this Article,
RAI's maximum liability shall be limited to the replacement or credit to
Distributor's account for any goods that are returned by Distributor, provided
that a) RAI is promptly notified in writing upon discovery by Distributor that
the goods failed to conform to this Agreement, and b) Distributor gives
objective proof of failure of the goods to perform substantially in conformance
with this Agreement, and c) said non-conformance was not caused by accident,
misuse, abuse, neglect, alteration, improper application, improper testing,
improper environment, or external causes beyond the control of RAI.
ARTICLE 10.
ASSIGNABILITY
10.1 This Agreement may be assigned only in connection with the following
circumstances: (a) a change in name or legal status of either party hereto,
which change does not affect the nature of the respective business activities;
(b) the sale by a party hereto of substantially all the assets of the business
to which the licensed rights relate or the sale of a separable business unit
related to a portion of the licensed rights; or (c) otherwise by distributor the
written permission of the other party.
ARTICLE 11.
PRODUCT LIABILITY AND REPRESENTATION
11.1 Indemnification
(a) Distributor shall indemnify, defend and hold harmless RAI, its
trustees, officers, staff, employees, and agents and their respective
successors, heirs and assigns and ICE BAN USA, INC., (collectively,
the "Indemnities"), against any liability, damage, loss or expense
(including reasonable attorney's fees and expenses of litigation
through any and all appeals) incurred by or imposed upon the
Indemnitees or any one of them in connection with any claims, suits,
actions, demands or judgments arising out of any theory of negligence
relating to the application of the Products by Distributor or its
agents, excluding however, any negligence associated with the
manufacturing of the Products. For purposes of example, and without
limitation, this indemnification provision covers liability that
results from the unauthorized alteration of the composition of the
Products by Distributor or its agents.
(b) Distributor agrees, at its own expense, to provide attorneys
reasonably acceptable to the RAI to defend against any actions brought
or filed against any party indemnified hereunder with respect to the
subject of indemnity contained herein, whether or not such actions are
rightfully brought.
(c) This Section 11.1 shall survive expiration or termination of this
Agreement.
<PAGE>
11.2 Insurance
(a) Beginning at the time as any such product, process or service is
being commercially distributed or sold (other than for the purpose of
obtaining regulatory approvals) by Distributor, Distributor shall, at
its sole cost and expense, procure and maintain comprehensive general
liability insurance in amounts not less than $2,000,000 per incident
and $3,000,000 annual aggregate and naming the Indemnitees as
additional insureds. Such comprehensive general liability insurance
shall provide (i) product liability coverage and (ii) broad form
contractual liability coverage for Distributor's indemnification under
Section 11.1 of this Agreement. The minimum amount of insurance
coverage required under this Section shall not be construed to create
a limit of Distributor's liability with respect to its indemnification
under the preceding Section of this Agreement.
(b) Distributor shall provide RAI with written evidence of such
insurance upon execution of this agreement. Distributor shall provide
RAI with written notice at least fifteen (15) days prior to the
cancellation, non-renewal or material change in such insurance; if
Distributor does not obtain replacement insurance providing comparable
coverage within such fifteen (15) day period, RAI shall have the right
to terminate this Agreement effective at the end of such fifteen (15)
day period without notice of any additional waiting periods.
(c) Distributor shall maintain such comprehensive general liability
insurance during
(i) the period that any such product, process or service is being
commercially distributed or sold (other than for the purpose of
obtaining regulatory approvals) by Distributor or agent of
Distributor, and
(ii) a reasonable period after the period referred to in (c)(i)
above.
(d) RAI has and will continue to maintain general liability insurance
(which includes product liability with completed operations) of two
million dollars ($2,000,000), plus an umbrella form of one million
dollars ($1,000,000). RAI will also maintain general liability
insurance on Ocean Marine/Ocean Cargo, and all necessary workers
compensation insurance required by the laws of the state of Florida.
RAI shall bear the cost of said insurance.
(e) This Section 11.2 shall survive expiration or termination of this
Agreement.
ARTICLE 12.
CONFIDENTIALITY
12.1 In the performance of their respective duties hereunder, each party
hereto will be exposed to certain Confidential Information of the other party.
Each party acknowledges and agrees that the other party's Confidential
Information represents a substantial investment by the other party and that any
disclosure or use of the other party's Confidential Information, except as
otherwise authorized in this Agreement, or any violation of the confidentiality
provisions of this Agreement would be wrongful and could cause irreparable
injury to the other party.
12.2 As used in this Agreement, Confidential Information shall be defined
as that information which is, for any reason, disclosed to another party and
confidential or proprietary to a party and shall include:
12.2.1 information, whether tangible or not, that has been created,
discovered, or developed by the transferring party and which has commercial
value to that party. By way of illustration, but not limitation,
Confidential Information shall include any patent applications, trade
secrets, processes, formulae, experimental designs, results, and
conclusions, technological data and know-how, improvements, inventions,
techniques, planned products, research and development, marketing plans,
business plans, strategies, forecasts, customer lists, confidential
information about finances, marketing, pricing, costs and compensation
structures;
12.2.2 information that is in written, tabulated, graphic, machine
readable or other tangible form, including experimental designs, results
<PAGE>
and conclusions, technological data and know-how, designs, memoranda,
models, prototypes, and any other tangible information; and
12.2.3 information that is furnished orally or in other non-tangible
means, if it is confirmed as being Confidential Information by the
furnishing party in a written instrument delivered within thirty (30) days
after such delivery. Reasonable efforts shall be used to identify such
orally delivered information as being Confidential Information at the time
of oral delivery. Any such confirmatory instrument shall summarize the
relevant Confidential Information and the date of its oral delivery and
refer to this Agreement.
12.3 The confidentiality and limited use obligations of this Agreement
shall not apply to information received pursuant to this Agreement which:
12.3.1 is generally known and available in the public domain at the
time it was disclosed or became generally known and available in the public
domain through no fault of the receiving party;
12.3.2 is known to the receiving party at the time of disclosure as
shown by documentation which was prepared contemporaneously with the
receipt or creation of that information;
12.3.3 is or becomes known to the receiving party from a source other
than the providing party without breach of this Agreement and otherwise not
in violation of a party's rights; or
12.3.4 is disclosed pursuant to the order or requirement of a Court,
administrative agency, or other governmental body, provided, that prompt
notice thereof is provided to the providing party to enable that party, if
it so desires, to seek a protective order or otherwise prevent such
disclosure.
12.4 Except as required to exercise its rights or perform its obligations
under this Agreement, or as required by a court of or regulatory agency of
competent jurisdiction, each party shall:
12.4.1 not redistribute, market, publish, disclose or divulge to any
Person any Confidential Information of the other party;
12.4.2 not permit any of its officers, staff, employees, and agents to
disclose any Confidential Information of the other party, or permit its
officers, staff, employees, and agents to do any of the actions prohibited
of said party;
12.4.3 adhere to the other party's confidentiality requirements that
the other party may establish in writing from time to time;
12.4.4 immediately notify the other party in writing of any
unauthorized disclosure or use of any Confidential Information of the other
party; and
12.4.5 assist the other party, at the other party's expense and to the
extent necessary, in the procurement of any protection of the other party's
rights in or to any of its Confidential Information;
at all times during the term of this Agreement and for a period of three (3)
years subsequent to its expiration or earlier termination.
12.5 The parties agree that, in the event of a breach or threatened
breach of the terms of this Article by one of the parties hereto, the
non-breaching party shall be entitled to an injunction prohibiting any such
breach or disclosure of any Confidential Information. In addition to injunctive
relief, the injured party shall have all other rights and remedies afforded it
by law. The parties acknowledge that the Confidential Information is valuable
and unique and that disclosure in breach of this Agreement will result in
irreparable injury to the party who owns the Confidential Information.
<PAGE>
ARTICLE 13.
TERM
13.1 This Agreement shall become effective upon execution by all
parties hereto and shall remain in effect for one (1) year from the Effective
Date as identified on page 1 hereof. This agreement shall renew automatically
each year thereafter on the anniversary date for an additional period of one (1)
year, unless either party shall provide written notice of an intent not to
renew, which notice shall be given at least 120 days prior to a renewal date.
ARTICLE 14.
BREACH AND TERMINATION
14.1 Either party may terminate this Agreement upon the occurrence of
an Event of Default (as defined hereafter) by giving written notice to the other
party. An Event of Default as to either party shall mean:
A) Failure by a party to perform any of its material obligations under
this Agreement (including specifically without limitation the failure
to make any payment whatsoever due and payable hereunder) within the
time frames provided or otherwise contemplated by this Agreement,
provided such failure continues uncorrected for thirty (30) days after
written notice thereof from the other party; or
B) The filing by a party of a petition under any applicable bankruptcy
statute, or any similar code or statute; the voluntarily or
involuntarily filing of an action against a party under any applicable
bankruptcy statute, or any similar code or statute, provided said
party fails to receive dismissal within sixty (60) days after said
filing; the making or attempting to make an assignment for the benefit
of creditors by a party, or the consenting to or the acquiescence in
such relief; the seeking of relief by a party as a debtor under any
applicable law of any jurisdiction relating to liquidation or
reorganization of debtors or to the modification or alteration of the
rights of creditors; or the initiation of proceedings for liquidation
or winding up of a party's business.
14.2 If any party fails to pay any monetary obligation due under this
Agreement when the obligation becomes due, such party shall pay interest on such
amounts due from the due date up to and including the date when such amount and
all interest thereon are paid in full at a rate per annum equal to the rate of
interest commonly known and referred to as the "prime interest rate." The
parties agree to use the prime interest rate as periodically published in the
Wall Street Journal during any default period. Acceptance by a party of any
overdue payment and/or any interest due thereon shall not constitute a waiver of
any breach of this Agreement, including specifically the breach associated with
the untimely payment.
14.3 Upon termination of this Agreement for any reason, the following
shall apply:
14.3.1 Distributor shall return any and all advertising
material, information, or technical material which Distributor
possesses.
14.3.2 Distributor shall immediately pay all amounts owing by
it to RAI, or at the option of RAI, Distributor shall return any
inventory for which Distributor has not made payment; and
14.4 Upon termination of this Agreement for any reason, nothing herein
shall be construed to release either party from any obligation that matured
prior to the effective date of such termination.
14.5 Upon termination of this Agreement for any reason, any and all
licenses that have been granted Distributor by this Agreement shall immediately
terminate.
14.6 Upon termination of this Agreement for any reason, the parties
shall continue to be bound by the following sections 11.1; 11.2; 12.1-12.5;
15.1; 16.1-16.3; 18.3; 18.5; and 18.7.
<PAGE>
ARTICLE 15
FORCE MAJEURE
15.1 Neither party will be responsible for delays resulting from causes
beyond the reasonable control of such party, including without limitation fire,
explosion, flood, war, strike, or riot, provided that the nonperforming party
uses commercially reasonable efforts to avoid or remove such causes of
nonperformance and continues performance under this Agreement with reasonable
dispatch whenever such causes are removed.
15.2 In the event that Distributor is unable to deliver product to a
end user, or unable to deliver product without a substantial delay, because of
causes beyond its control as recited in the preceding section, RAI shall have
the right, but not the obligation, to step into the shoes of Distributor for the
period during which Distributor is unable to deliver to a end user, or unable to
deliver without a substantial delay.
ARTICLE 16.
ARBITRATION
16.1 Any controversy, dispute or claim out of or relating to this
Agreement shall be settled by arbitration in the State of Florida, or in some
other mutually agreeable location, in accordance with the Rules of the American
Arbitration Association (Commercial Arbitration Rules) then existing, except as
otherwise specifically provided herein.
16.2 The Arbitration shall be conducted by a panel of three (3)
arbitrators to be chosen by the American Arbitration Association. The dispute
shall be resolved by majority vote of the three (3) arbitrators. All costs and
expenses of such arbitration shall be share equally between both parties;
provided, however, that each party shall be responsible for its own attorneys'
fees.
16.3 For the purpose of enforcing an arbitration award granted herein
or enforcing any other provisions or rights hereunder, the parties hereby agree
and consent to in personam jurisdiction in the courts of the State of Florida.
The award rendered by the arbitrators shall be final and judgment may be entered
upon the award in any court having jurisdiction of the matter.
ARTICLE 17.
NOTICES AND OTHER COMMUNICATIONS
17.1 All notices, requests, demands and other communications which are
required or may be given under this Agreement shall unless otherwise provided
for elsewhere in this Agreement, be in writing and shall be deemed to have been
duly given if and when (i) transmitted by telecopier facsimile with proof of
confirmation from the transmitting machine, or (ii) delivered by courier or
other hand delivery, as follows:
(a) in the case of RAI:
ROADBIND AMERICA, INC.
1201 U.S. HWY 1, Suite 205
North Palm Beach, Florida 33408
Telecopy: (315) 337-0117
Attention: Joseph S. Kroll
and a copy to:
BAISE, MILLER & FREER
1020 Nineteenth St., NW
Suite 400
Washington, D.C. 20036
Telecopy: (202) 331-9060
Attention: Robert E. Freer, Jr., Esq.
<PAGE>
(b) in the case of Distributor:
RPR, Inc.
P.O. Box110209
Anchorage, AK 99511
(907) 563-6566
Attention: Ren Rasmussen
or to such other address or telecopy number as either party shall have specified
by notice in writing to the other party. All such notices, requests, demands and
communications shall be deemed to be effective upon receipt.
ARTICLE 18.
MISCELLANEOUS PROVISIONS
18.1 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN THE
SUPPLY AGREEMENT, RAI MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY
KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND VALIDITY OF TRADEMARKS,
UNLESS SAID WARRANTIES ARE REQUIRED BY LAW.
18.2 In construing this Agreement, the following principles shall be
followed: (i) no consideration shall be given to the captions of the articles,
sections, subsections or clauses, which are inserted for convenience in locating
the provisions of this Agreement and not as an aid in construction: (ii) no
consideration shall be given to the fact or presumption that any of the parties
had a greater or lesser hand in drafting this Agreement; (iii) examples shall
not be construed to limit, expressly or by implication, the matter they
illustrate; (iv) the word "includes" and its syntactic variants mean "includes,
but is not limited to" and corresponding syntactic variant expressions; (v) the
plural shall be deemed to include the singular, and vice versa; (vi) each gender
shall be deemed to include the other gender; and (vii) each exhibit, appendix,
attachment and schedule to this Agreement is a part of this Agreement.
18.3 This Agreement shall not be recorded or otherwise disclosed without
the prior written permission of RAI.
18.4 The relationship hereby established between the undersigned parties is
that of independent contractors. This Agreement shall not create an agency,
partnership, joint venture, or employer/employee relationship, and nothing
hereunder shall be deemed to authorize either party to act for, represent or
bind the other except as expressly provided in this Agreement.
18.5 In the event of any litigation between the parties hereto and with
respect to the subject matter of this Agreement, the unsuccessful party to such
litigation covenants and agrees to pay to the prevailing party therein all
attorneys' fees and court costs incurred therein by such prevailing party
(including through any and all appeals), and all of such fees and costs shall be
included in and as a part of any judgment rendered in such litigation.
18.6 RAI and Distributor further agree for themselves and for their
successors and assigns, to execute and deliver without further consideration any
further applications, assignments, licenses and other documents, and to perform
such other acts as may be deemed reasonably necessary by the other, its
successors, assigns, and nominees, fully to secure its interest in all of the
aforesaid assignments, licenses, and other grants of benefits by said parties.
18.7 The parties hereto agree to make its respective employees reasonably
available to the other party, at the other party's expense, to reasonably assist
and otherwise reasonably cooperate in the preparation and prosecution of
applications for patents, trademarks, and copyrights, and to execute any and all
applications, assignments, affidavits and any other papers in connection
therewith necessary to perfect such rights.
18.8 This Agreement shall be construed, governed, interpreted and applied
in accordance with the laws of the State of Florida, U.S.A., excluding conflicts
of law principles of such jurisdiction.
18.9 The parties hereto acknowledge that this Agreement sets forth the
entire agreement and understanding of the parties hereto as to the subject
<PAGE>
matter hereof, and shall not be subject to any change or modification except by
the execution of a written instrument subscribed to by the parties hereto.
18.10 The provisions of this Agreement are severable, and in the event that
any provisions of this Agreement shall be determined to be invalid or
unenforceable under any controlling body of the law, such invalidity or
unenforceability shall not in any way affect the validity or enforceability of
the remaining provisions hereof.
18.11 The failure of either party to assert a right hereunder or to insist
upon compliance with any term or condition for this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to
perform any such term or condition by the other party. No waiver of any right
under this Agreement shall be deemed effective unless contained in writing and
signed by the party charged with such waiver. All rights, remedies,
undertakings, obligations and agreements contained in this Agreement shall be
cumulative, and none of them shall be a limitation of any other remedy, right,
undertaking, obligation or agreement.
18.12 This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all together shall constitute the
same Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement the day and
year set forth below.
Roadway Solutions, Inc.
By: /s/ Ronald L Rasmussen
Name: Ronald L Rasmussen
Title: Tresurer
ROADBIND AMERICA, INC.
By: Joseph S. Kroll
Name: Joseph S. Kroll, Vice President
/s/Janette Banie
My commission expires on 6/2/2002, witnessed before me on 3/31/99.
<PAGE>
EXHIBIT A
TRADEMARK RIGHTS
"RB ULTRA"
U.S. Trademark Application Serial No. TBA Filed February 2, 1999
FOR: COMPOSITIONS FOR ROAD DUST CONTROL AND STABILIZZATION
APPLICANT: Roadbind America, Inc.
EXHIBIT 10.17
TERMINAL & TRANSLOADING AGREEMENT
This Agreement is made by and between Roadbind America, Inc., 1201 U.S. Highway
1, Suite 215, North Palm Beach, Florida 3340 (RB), and Steuben County Co-op, 610
West Broad St., Angola, IN 46703 (SCC)
NOW THEREFORE, in consideration of the mutual promises and conditions contained
herein, the parties hereby agree as follows:
1. Material Terminalized SCC will receive, store and transload out the
following materials ("Materials") for RB at the Steuben County Co-op 33700
Deer Park Rd, Bur Oak, MI 49030 ("Facility"):
a. Ammonium lignolsulfonate (Roadbind Ultra Plus(TM))
b. Iceban(R) (fermented grain extracts, grain, steep liquor, brewers
solubles, vintners and whey)
c. Magnesium chloride solution (25-35%) (Dustgard).
2. Inventory Ownership The Materials shall be delivered FOB to the SCC
Facility in RB designated trucks and/or tank cars. All inventoried
Materials will be owned by RB.
3. Storage and Terminaling SCC will store the Materials in SCC storage tanks
having a capacity of 110,000 gallons. Transloading (out) will be measured
via SCC electronic micromotion meters or truck scales. Such meters or truck
scales shall be certified on a regular basis as required by state law.
4. Minimum Volume RB agrees to guarantee a minimum of 200,000 gallons per
calendar year through the SCC.
5. Terminal Fees RB agrees to pay the following fees to SCC:
a. $5.00 per short ton for transloading into the terminal.
b. $5.00 per short ton for transloading out of the terminal.
The above fees shall be billed to RB on a monthly basis, and RB will pay
said fees within thirty (30) days of the invoice date. Monthly storage fees
will be determined by the quantity of inventory at the SCC Facility on the
last business day of each month.
6. Shrinkage SCC agrees to use its best plant procedures to maintain shrinkage
below 0.5%.
7. Paperwork RB will provide its own paperwork (Bills of Lading, Inventory
Records/Accounting, MSDS Sheets and Specifications Sheets) for storage and
transloading of Materials.
<PAGE>
-2-
8. Product Withdrawal RB shall give adequate (at least hours) notice of
withdrawal to SCC in order for SCC to perform its duties during normal
business hours.
9. Record Keeping SCC will submit a monthly inventory report to RB in a format
as required by RB.
10. Indemnification SCC agrees to indemnify and hold RB harmless for :
a. Materials loss in excess of normal shrinkage due to spillage or tank
and equipment leakage.
b. Environmental consequences from any such product loss and/or acts and
omissions by SCC Facility.
Roadbind agrees to be responsible for:
a. Insurance (liability and property) on all Roadbind Materials stored at
the SCC Facility.
b. Any applicable taxes (personal property or otherwise) associated with
the Roadbind Materials stored at the SCC Facility.
11. Discrepancies and Inspections If any discrepancies shall arise as a result
of terminalizing and transloading both parties shall use their best efforts
to quickly resolve such differences. RB shall have a reasonable opportunity
during normal business hours to inspect its Materials and the equipment
used by SCC for the purpose of terminalizing and transloading of Materials.
12. Confidentiality. Both parties acknowledge that during the course of the
Agreement, each may obtain confidential information regarding the other
party's business. Both parties agree to treat all such information and the
terms of this Agreement as confidential and to take all reasonable
precautions against disclosure of such information to unauthorized third
parties during and after the term of this Agreement. Upon request, all
documents relating to the confidential information will be returned to its
owner.
13. Amendment This Agreement may be modified or amended if the amendment is
made in writing and is signed by both parties.
14. Term of Agreement This Agreement shall remain in effect on an "Evergreen"
basis or until notified by either party in writing of a default or
discontinuation.
15. Termination It is agreed that in case of a material breach by either party
of any of the provisions contained in this Agreement, the other party shall
have the right to terminate this Agreement at its option. Furthermore, if
either party becomes insolvent, makes a general assignment for the benefit
of creditors, has a petition or any proceeding under the bankruptcy laws
filed by or against it or any other law relating to debtors relief, or if a
receiver is appointed to take control of the business of either party, the
other party may, at its option, terminate this Agreement. Additionally,
either party may terminate this Agreement by giving the other party sixty-
(60) day's prior written notification of such termination.
<PAGE>
-3-
16. Assignment Neither party shall assign its interest or obligations under
this Agreement without the prior written consent of the other party.
17. Entire Agreement This Agreement constitutes the sole and only agreement of
the parties hereto and supersedes any prior understandings or oral or
written agreements between the parties respecting this Agreement.
18. Saving Clause If any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision therefore and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein.
19. Applicable Law This Agreement shall be construed under and in accordance
with the laws of the State of Ohio.
IN WITNESS WHEREOF, the parties have executed this Agreement this 14 day of
OCT, 1999.
ROADBIND AMERICA, INC.
/s/ Joseph S. Kroll
--------------------------
Joseph S. Kroll, Vice President
STUEBEN COUNTY CO-OP
/s/ Dennis Buell
-------------------
Dennis Buell, General Manager
EXHIBIT 10.18
Sweetners Plus
P.O. Box 520
Lakeville, NY 14480
May 29, 1997
Ice Ban, Inc.
12118 E. Yates Center Rd.
Lyndonville, New York 14098
Mr. Jeff Johnson:
The following terms and conditions are intended to be the contract terms between
Ice Ban America Inc. and Sweetners Plus, Inc., (or any successor of either)
relating to the unloading, storage, reloading and delivery of Ice Band products
at our Lakeville, New York and Wayland, New York,(if acquired) facilities.
1.) Sweetners Plus, Inc would provide storage and thruput services in
Lakeville, New York and Wayland, New York to Ice Ban, Inc; such services
would include receiving and unloading Ice Ban products by rail or truck,
storage facility, reloading facility, inventory control and billing for
services to Ice Ban, Inc.
2.) Sweetners Plus, Inc. will charge Ice Ban, Inc. 4.0 cents/gallon for thruput
services as outlined in (1) above as a starting point. Such charge would
include receipt, storage for up to one year, and reloading to truck or to
trailers as directed by Ice Ban, Inc., will pay Sweetners Plus, Inc. .02
cents/gallon or 1/2 the per gallon charge within 20 days after receipt into
Sweetners Plus, Inc. storage, the balance will be due 20 days after
reloading to truck or trailer, or after one year. Product stored longer
than one year (on a FIFO basis) will incur an addition .02 cent/gallon
charge.
3.) Ice Ban, Inc. will guarantee Sweetners Plus, Inc. a minimum of 750,000
gallons thruput of Ice Ban product in year one, 2,000,000 gallons minimum
thruput of Ice Ban product in year two, 3,000,000 gallons minimum thruput
of Ice Ban product on year three, 4,000,000 gallons minimum thruput of Ice
Ban product in year five.
4.) For purpose of this contract, Sweetners Plus, Inc. will upgrade or alter
its Lakeville or Wayland, New York facilities as it deems necessary to
facilitate the thruput service for Ice Ban products. It is anticipated that
Ice Ban product can be reloaded to truck or trailer using our existing
scales. If that proves false, additional costs acquiring, installation and
operating scales, or change over to meters will need to be recognized in an
addendum to this agreement.
5.) Sweetners Plus, Inc. will use its best efforts to minimize handling losses,
inventory shrink, degrading of product or other problems associated with
unloading, storage or reloading. Sweetners Plus, Inc. will be held harmless
from all losses or claims except those arising from storage tank leakage,
<PAGE>
leakage or breakage of piping, hoses, meters, or pumps, losses due to
vandalism, or losses arising from the direct negligence of its employees.
6.) Sweetners Plus, Inc. will require liability and Workers Compensation
Insurance Certificates from all carriers entering its properties.
7.) If additional storage facilities are needed, Ice Ban, Inc. will give
Sweetners Plus, Inc. first consideration to provide same excluding Albany,
New York area.
8.) Sweetners Plus,Inc. will provide delivery service to Ice Ban, Inc.
customers from Lakeville or Wayland sites to any point in the Ice Ban
service area as directed by Ice Ban, Inc. whenever possible, in a timely
and orderly fashion. Delivery rates and conditions are stated in addendum
"A" to this contract. Delivery charges will be billed by Sweetners Plus,
Inc. directly to Ice Ban, Inc. with net 10 days credit terms.
9.) Normal Force Majeure conditions are applicable including allowing a
reasonable time for repairs.
10.) Contract is for five full years with automatic update from year one thru
year five from anniversary date.
11.) The initial storage rate would increase annually by either the greater of
the percentage of any increase in the CPI, or the percentage of increase on
the selling price of Ice Ban product, agreed to be at .65 cents/gallon
initially. In the even of a subsidy for users, the amount of subsidy above
.90 cents/gallon would be used as a basis for this calculation.
12.) Ice Ban, Inc. agrees to notify Sweetners Plus, Inc. in writing of any Ice
Ban product changes, regulations, test results, chemical structure, or for
any other reason in which it would make Ice Ban products unsafe or illegal
to thruput, store, or deliver as outlined by the following N.Y.S. DEC,
E.P.A., N.Y.S. Health Department, Livingston or Steuben Counties, Towns or
Villages of Wayland or Livonia, or any other local, state, or federal
agency.
13.) This contract is binding upon heirs, successors, or assigns of either
contracting parties.
14.) The effective date of this contract is June 1, 1997 and run thru May 31,
2002.
Acceptance Accepted
Sweetners Plus, Inc Ice Ban, Inc.
By:/s/Carl Myers By:/s/ Jeff Johnson
- -------------------- ----------------------
5/30/97 May 30, 1997
Witness Witness
John Hooker Sandra Wolfe
- ----------------- ------------------
EXHIBIT 10.19
TRANSMATRIX, INC
RAILCAR LEASE AND SERVICE CONTRACT
CONTRACT # 1279
This agreement made this 1st day of August, 1997 by and between TRANSMATRIX,
INC, an Illinois Corporation with its principal office at 2300 E. Higgins Rd.
Suite 207, Elk Grove Village, Illinois 60007, (hereinafter "Lessor"), and ICEBAN
AMERICA, INC., with its principle office at 12118 East Yates Center Road,
Lyndonville, New York, 14098 (hereinafter "Lessee").
WITNESSETH:
1. LEASE: Lessor agrees to lease from Lessor, upon the terms and conditions set
forth herein, the railway cars described in Riders which may from time to time
be added to this Agreement by agreement of Lessor and Lessee, (Such cars are
referred to herein as the "Cars" or Car"). This Agreement will be effective from
the date hereof and will expire upon the expiration of the term of lease of the
last Car leaded hereunder, except that all obligations of Lessee which have not
been satisfied in full by that time shall continue until so satisfied.
2. DELIVERY: Each of the Cars shall be delivered to the Lessee at the delivery
point designated by Lessee. The obligation of Lessor to furnish the Cars shall
be subject to all causes reasonably beyond the control of Lessor, including but
not limited to, delays caused by fire, labor difficulties, delays of carriers
and materialmen or governmental authority, and Lessor shall not be liable for
any damages by reason of any such delay.
3. TERMS: The "EFFECTIVE DATE" of each Rider shall be the first day of each
month following the date of delivery of the final Car on such Rider, and shall
continue in effect for a period specified by such Rider after the Effective Date
and month to month thereafter cancelable upon thirty days written notice by
either party, The expiration of this Agreement is defined to be the date of
termination of the final Rider hereunder. Notwithstanding the expiration or
termination of this Agreement, the obligations of the Lessee hereunder shall
continue in effect with regard to each Car until returned to possession of
Lessor.
4. RETURN OF THE CARS: Upon the expiration or termination on this Agreement as
to any of the Cars, Lessee agrees to return each of the Cars to Lessor at the
point of delivery or at a point mutually agreed upon within the boundaries of
the continental United States (excluding Alaska) in good working order, ordinary
wear and tear excluded (except for safety valves, angle valve, check valves,
thermometer and gauging devices which must be in good working order,) free from
all charges and liens which may result form any act or default of Lessee, clean
and free from residue and complete with all parts, equipment , and accessories
with which the Car was originally equipped or which had been added during the
term of this Agreement, and to give Lessor thirty days advance written notice of
such return. Lessee shall, on demand, reimburse Lessor for the cost of cleaning
any Cars not properly cleaned or containing residue, as well as monthly rental
and service charges incurred hereunder during the cleaning process. In the event
Lessor institutes legal action to collect from Lessee the cost of cleaning any
Cars, Lessee shall be responsible for Lessor's attorney's fees and other costs
and expenses related to such legal action. In the event that any or all of the
Cars are not redelivered to Lessor on or before the date on which the tern of
this Agreement with respect to such Cars shall remain in full force and effect
until such Cars are redelivered to Lessor, provided
<PAGE>
however, that the daily rental for each of such Cars during such period shall be
two times to pro-rata daily rate of the rental specified in the Rider applicable
to such Cars for a maximum period of one year after such termination date. If
lessee shall for any reason fail to redeliver any of such Cars during such one
year period, Lessee shall pay to Lessor on that date that such one year period
expires a sum equal to the then depreciated value of such Car or Cars using AAR
schedule of depreciation. Such payment shall be in addition to any other
remedies Lessor may have hereunder. 5. RENTAL: The pro-rata rental for each Car
shall be that specified in the Rider with respect to such Car and shall commence
on the date of forwarding of the Car from Lessor to Lessee's designated point of
receipt. Except as otherwise provided herein or in such applicable Rider
hereunder, Lessee shall pay Lessor such rental from the date the Car is
forwarded to lessee to the date the Car is returned to Lessor.
6. ABATEMENT OF RENTAL: When Cars are place in a private car shop for
maintenance and/or repair, the rental charges of each Car shall cease five days
after the date of arrival in shop and will be reinstated on the date such Car is
forwarded from shop.
7. PAYMENT: Lessee agrees to pay said rental and service charges in U.S. funds
to Lessor at its principal office or as specified in such applicable invoice, ON
THE FIRST DAY OF THE CALENDAR MONTH IN ADVANCE, without deduction, except that
the Lessee shall pay in advance on the delivery of each Car, respectively, for
the period intervening the date of delivery and the first of the next succeeding
calendar month, and shall pay only the pro-data portion of such monthly charge
attributed to any fractional month accruing at the termination of this lease.
Any rental or other sum payable to Lessor under this Agreement and not paid when
due shall, (whether or not Lessor shall then be entitled to exercise its rights
under Item 30), thereafter bear interest at a rate per annum equal to the
greater of (i) eighteen percent or (ii) the prime rate in effect from time to
time at the American Nation Bank and Trust Company of Chicago, but not in excess
of the maximum interest permitted by law. As permitted by law, it will be
incumbent on Lessee to provide Lessor with the pertinent laws of its concerning
interest if Lessee should incur interest charges under this Agreement considered
to be in excess of the maximum interest permitted by law in its state. In the
event lessor takes legal action to collect any such sums which are due and not
paid by Lessee, Lessee shall be responsible for Lessor's attorney's fees and
other costs and expenses related to any such legal action.
8. MILEAGE: Lessor shall collect all mileage earned by the Cars and shall credit
to the rental account of Lessee such mileage earned by the Cars while in the
service of Lessee, as and when received, according and subject to all rules of
the tariffs of the railroads, but only to the extent of the aggregate rental
charges payable hereunder. Lessee agrees not to enter into any agreement or
arrangement with any party to affect the mileage of any Car hereunder without
prior notification to Lessor.
9. EMPTY MILAGE: During the term of each applicable Rider hereunder, Lessee
agrees that it will use its best efforts to maintain the aggregate mileage empty
for such Cars. Following (i) the end of the calendar year during the term of
each applicable Rider and (ii) the termination or expiration of each applicable
Rider, the Lessor will determine for each calendar year or portion thereof just
ended the aggregate loaded mileage and empty mileage of the Cars and advise
Lessee of the same. In the event that the empty mileage of the Cars should
exceed, in the aggregate, their loaded mileage for the calendar year or portion
thereof covered by the determination mentioned in the immediately preceding
sentence, Lessee shall promptly pay Lessor for such excess according to
<PAGE>
the rate established by the governing tariff.
10. TAXES AND LIENS: Lessor agrees to pay all property taxes levied upon the
Cars and to file all property tax reports relating thereto. Lessee agrees to
report and pay, in addition to rent and service charges, all sales, use,
leasing, operation, excise, and other taxes with respect to the Cars, together
with any penalties, fines, or interest thereon, and all duties, taxes,
investment tax credit reductions, and similar charges arising out of the Cars
outside the United States. Lessee agrees not to encumber or dispose of the lease
of any of the Cars or any part of a Car or permit any encumbrance or lien to be
entered or levied upon any of the Cars.
11. CLEANING: Any cleaning of Cars that may be necessary to prepare them for
shipment of commodities by or for Lessee or any cleaning required prior to
repairs or modifications while in Lessee's service shall be done at Lessee's
expense and responsibility unless otherwise agreed in writing.
12. LINING: The application , maintenance, and removal of interior protective
lining in Cars so equipped is to be at the expense of the Lessee, including, but
not limited to freight charges to and from the lining shop. Damage, by lading or
mechanical means. To such linings shall be repaired at the expense of the
Lessee.
13. INSPECTION: Prior to the commencement of the term of lease of any Car,
Lessor will, if requested by Lessee, arrange an inspection of the Car at a
location designated by Lessor, Unless prior to the first loading of the Car by
Lessee an inspection report setting forth the nature and amount of any then
existing damage is signed by both parties, it shall be conclusively presumed
that the Car was free of corrosion or other commodity-related damage at the time
of commencement of the term of lease of such Car. The loading of any Car
hereunder or the failure of the Lessee to inspect the Cars hereunder within five
working days of delivery of each Car shall constitute acceptance thereof by
Lessee, and shall be conclusive evidence of the fit and suitable condition of
such Cars described in the Agreement. In any event, however, monthly rental and
service charges shall be paid as described in Item 5 of this Agreement.
14. ALTERATION AND LETTERING: Lessee will preserve the Cars in good condition
and will not in any way alter the physical structure of the Cars without the
advance approval in writing of the Lessor. Lessee shall place no lettering or
marketing of any kind on the Cars without Lessor's prior written consent, except
that, for the purpose of evidencing the operations of the Cars in Lessee's
service hereunder, Lessee will be permitted to board and placard or stencil the
Cars with letters not to exceed two inches in height. Lessee will remove or pay
for the removal of such markings upon termination of Cars so marked.
15. IMPROVEMENTS: All additions and improvements to any Car made at Lessee's
request, including, but not limited to, parts, accessories, lining, coatings and
modifications, shall be considered accessions to such, Car and title thereto
shall immediately vest in Lessor without cost or expense to Lessor. If requested
by Lessor, Lessee shall, at Lessee's expense, remove any such additions or
improvements prior to the release of any Car.
16. MANDATED MODIFICATIONS: In the event the U.S. Department of Transportation
or any other governmental agency or non-governmental organization having
jurisdiction over the
<PAGE>
operation, safety or use of railroad equipment, requires that owner add, modify
or in any manner adjust the Cars subject to this Agreement in order to qualify
them for operation in railroad interchange, Lessee agrees to pay an additional
monthly charge of $1.87 per car for each $100.00 expended by owner on such Car
or in the case of a modification with a useful life less than that of the Car
the monthly charge will be an amount which will recover the cost of the
modification, including interest at the rate of 18% per annum, over the
estimated like of such modification, or such other monthly charge in lieu
thereof as may be provided for modifications in the Rider hereto, in any case
effective as of the date the Car is released from the shop after application of
such additions, modifications or adjustments ( herein after modifications). No
rental credits will be issued on Cars entering the shop for any modification for
the first 30 days. In the event owner in its sole discretion determines prior to
making any modifications that the cost thereof is not economical to expend in
view of the estimated remaining useful like of such Car, and owner elect to
permanently remove such Car from Lessee's service rather than have such Car
taken to a Car shop for such modifications, the rental with respect to such Car
shall terminate upon the date specified in writing by owner provided that such
date must be prior to the date the modification is so required to be made.
17. AREA OF USE: Lessee agrees to the best of its ability, to use the Cars
exclusively in Lessee's own service within the boundaries of the continental
United States and Canada and to make no transfer or assignment of this
Agreement. In the event any Car is used outside of the area specified and/or in
Mexico, Lessee agrees to bear full responsibility for, to defend, and to
reimburse Lessor for any loss, damage, and/or cost and expenses suffered by
Lessor, or claim against Lessor and for all cost and expenses, including legal
costs and attorney fees arising in any way from any such Cars use.
18. USAGE LIMITITAIONS: Lessee will not use the Cars in a "unit train" without
the advance approval in writing of the Lessor. Lessee agrees not to load any of
the Cars in excess of the load limit stenciled thereon, Lessee shall not,
without the prior written consent of Lessor, use any Car or permit such Car to
be used in such a manner that in any calendar year or period of service it
accumulates miles (loaded and empty) in excess of 30,000 multiplied by the days
in service divided by 365, or as otherwise provided in the applicable Rider. If
the mileage is exceeded, Lessee shall pay Lessor a mileage charge in the amount
of $.04, or otherwise provided for in the applicable Rider, for each mile such
Car moves in excess of such limitation.
19. USAGE UNDER AAR CIRCULAR OT-5: Whenever approval of the originating line
haul carrier is required in order that Cars may be placed in service pursuant to
AAR Circular OT-5 and any revisions or successors thereto, Lessor shall, upon
written request of Lessee, use reasonable efforts to aid Lessee in obtaining
such approval. In no event shall Lessor be liable if any such approval is not
obtained for any reason or is withdrawn or modified, and this Agreement shall
continue in full force and effect notwithstanding such withdrawal or
modification or the failure to obtain such approval.
20. RAILROAD CHARGES: Lessee agrees to use the Cars, upon each railroad over
which the Cars shall move, in accordance with the then prevailing tariffs to
which each such railroad shall be a party and, if the operation or movements of
any of the Cars during the term hereof shall result in any charges being made
against Lessor by any such railroad, Lessee shall pay Lessor for such charges
within the period prescribed by and at rates and under the conditions
established by said then prevailing tariffs. Lessee agrees to indemnify Lessor
against same and shall be liable for any switching, demurrage, track storage, or
detention charge imposed on any of the Cars during the term hereof.
<PAGE>
21. MISUE OF CARS: If any repairs are required as a result of misuse or by
negligence of Lessee, its consignee, agent, or while on a railroad that does not
subscribe to, or fails to meet its responsibility under the Interchange Rules of
the Association of American Railroads, or while on any private siding or track
or any private or industrial railroad, the rental charge shall continue during
the repair period, and Lessee agrees to pay Lessor for the cost of such repairs.
Lessee agrees that if b reason of such misuse or negligence or while on a
railroad that dies not subscribe to, or fails to meet its responsibility under
the Interchange Rules of the AAR, or while on any private siding or track or any
private or industrial railroad, any Car is completely destroyed or, in the
opinion of the Lessor, such Car's physical condition settlement value as
determined by the AAR Rules of Interchange in effect at that time within ten
days following a request by Lessor for such payment.
22. SUBSTITUTION OF CARS: If any Car shall be completely destroyed or if
physical condition of any Car shall become such that such Car cannot be operated
in railroad service as determined by the parties, then the Lessor may, at its
option, cancel this lease as to such Car as of the date on which such Car
arrives at a repair facility as designated by Lessor or may substitute another
Car of approximately the same type and capacity within a reasonable period of
time, and, in the event of such substitution, substituted Car shall be held
pursuant to all terms and conditions of this Agreement and the Rider hereto
governing the Car which is unavailable for service. Should any of the cars
become unavailable for use pursuant to this Agreement for any reason, Lessor
shall have the right to substitute another Car of approximately the same type
and capacity within a reasonable period of time, and, in the event of such
substitution, the substitute Car shall be held by Lessee pursuant to all the
terms and conditions of this Agreement and the Rider hereto governing the Car
which is unavailable for service.
23. DAMAGE TO OR BY COMMODITIES: Lessor shall not be liable for any loss of or
damage to any commodities or any part thereof loaded or shipped in the Cars,
regardless of how such loss or damage may be caused. Lessee shall indemnify
Lessor against and hold Lessor harmless from all claims, liabilities, losses,
damages, costs and expenses(including attorney fees and litigation expenses)
arising out of or resulting from the loss of or damage to any such commodity or
the loading, unloading, spillage, leakage, emission or discharge of commodity in
or from the Car, including without limitation any liability for injury, death,
property damage or environmental pollution. LESSEE HEREBY EXPRESSLY AGREES THAT
LESSOR SHALL NOT BR LIABLE FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY
KIND WHATSOEVER, INCURRED BY LESSEE OR ANY OTHER PERSON OR ENTITY. RESULTING
DIRECTLY OR INDIRECTLY FROM THIS AGREEMENT.
24. SUBLEASE, ASSIGNMENT OR TRANSFER: Lessee shall not loan or sublet any Car or
transfer or assign any of its interests or obligations hereunder, whether by
operation of law or otherwise, without the prior written consent of Lessor,
except that Lessee may load or sublet Cars to (i) its affiliated companies, or
(ii) its consignees or suppliers in connection with the handling of commodities
sold, bought or supplied for the account of Lessee and transported therein. No
sublease, assignment or transfer of any Car or any interest in this Agreement
shall relieve Lessee of any of its obligations hereunder.
25. REGULATIONS: Lessee agrees to comply with all government laws, rules,
regulations and requirements, and with the Interchange Rules of the AAR with
respect to the use of and operation of each of the Cars during the term of this
Agreement
<PAGE>
26. MAINTENANCE: Lessor agrees to maintain each of the Cars in good condition
and repair according to the Interchange rules of the AAR, and Lessee agrees to
forward the Cars in to the shops of Lessor for periodic maintenance repairs as
may be directed by Lessor. No repairs to any of the Cars shall be made by Lessee
without Lessor's prior written consent, except that Lessee shall, at its own
expense, replace any removable tank parts ( dome cover, outlet caps, etc.) if
lost or broken and Lessee agrees that it will assume responsibility for the
maintenance, replacement and testing of outlet valves, safety valves, angle
valves, check valves, thermometers and gauging devices, without regard for
ordinary wear and tear in fair service and required periodic inspections. Any
repairs covered by railroad defect card will not be charged to Lessee.
Replacement or repair by Lessee of any parts, equipment, and/or accessories on
any of the Cars shall be with parts, equipment, and accessories that are of like
kind and of at least equal quality to those being replaced or repaired unless
otherwise agreed in writing by Lessor.
27. DAMAGE TO CARS, LOST OR DAMAGE PARTS: Lessee shall be liable for all damage
to any Car which (i) is caused by the negligence or misconduct of Lessee or its
agents or customers or (ii) occurs while such Car is located on the premises of
Lessee, its agents or customers, regardless of the cause thereof, unless a
subscribing railroad to the Interchange Rules of the AAR will assume the
responsibility therefore. If any Car part, including but not limited to, outlet
caps, valves, manway coverings and fittings, is found loose, damaged, lost or
removed without consent form Lessor, Lessee shall be liable therefore,
regardless of the cause thereof, unless (i) full responsibility therefore has
been assumed by one or more railroads or (ii) such loss or damage occurs while
the Car, or the tank, fittings or appurtenances thereto, including interior
lining for Cars so equipped shall become damaged or suffers corrosion or other
damage related to or connected with the commodity or other material placed
allowed to accumulate in or on the Car, or to which the Car is exposed, Lessee
shall be liable for such damage, regardless of how caused and whether or not due
to lesse's negligence. Such damage shall not be considered "ordinary wear and
tear".
28. REPORTS: Each month Lessee shall give Lessor monthly reports for the
immediately preceding month of the complete movements of the Cars, giving dates
loaded or shipped, commodity, destination, and full junction routing of each
movement. Failure to provide such monthly reports may result in Lessee's
forfeiture of the mileage earned by the Cars for the month not reported. Lessee
shall, within tem days after notification to Lessee, give Lessor written notice
of any damage to persons, commodities, property or environment.
29. IDEMNITY: Lessee will indemnify Lessor against and hold Lessor harmless from
any loss, damage, claim, expenses (including attorney fees and litigation
expenses), or injury imposed on, incurred by, or asserted against Lessor
arising, directly or indirectly, out of Lessee's use, lease, possession, or
operation of the Cars occurring during the term of this lease, or by the
contents of such Cars, howsoever occurring except any loss, liability claim,
damage, or expenses which is directly attributable to the fault or neglect of
the Lessor, or for which a railroads have assumed full responsibility. All
indemnities contained in this Agreement shall survive the termination hereof,
however same shall occur.
30. DEFAULT: It is mutually agreed that the time of payment of rental and
service charges and any other costs expenses due by Lessee to Lessor under this
Agreement is of the essence of this
<PAGE>
Agreement and that if the Lessee shall make default in the payment of rental and
service charges or any other costs and expenses due by Lessee to Lessor under
this Agreement on any of the Cars at the time when same become due and payable
or shall make default in the performance or observance of any of the other
commitments herein contained and such default shall continue for ten days after
Lessee has been given notice of default ( that is Lessee shall have 10 days from
date of receiving notice to correct default) or there shall be filed by or
against Lessee a petition in bankruptcy or for reorganization under the
Bankruptcy Law or there shall be a receiver appointed of any part of Lessee's
property or Lessee shall make a general assignment for the benefit of creditors,
then ans in any of said events, Lessor may, at its election, upon notice to
Lessee of termination, terminate the Agreement set forth herein and repossess
itself of any or all of said Cars, and this Agreement shall thereupon become and
be terminated. Lessee shall be responsible for all damages caused by the
termination of the Contract and/or the be responsible for Lessor's attorney's
fees and other costs and expenses related to termination of the Contract and/or
the collection of the damage amounts. In the alternative, Lessor may without
notice, repossess itself of said Cars and relet the same or any part thereof to
others for such rent and upon terms as it may see fit, and if a sufficient sum
shall not be thus realized after repaying all expenses of retaking and reletting
said Cars (including attorney fees, costs, and litigation or rental collection
expenses ) to satisfy the rental and service charges herein reserved, the Lessee
agrees to satisfy and pay the deficiency accrued from time to time upon demand.
The obligation to pay such deficiency as well as the obligation for any and all
other payments by Lessee to Lessor or any other party, assist it in repossessing
itself of said Cars and shall, for a reasonable time if required, furnish
suitable trackage space for the storage of said Cars. The right and remedies
herein given to Lessor shall in no way limit its right and remedies given by law
or in equity.
31. SUBORDINATION: All rights of Lessor hereunder may be assigned, pledged,
mortgaged, transferred, or otherwise disposed of, either in whole or in part,
and/or Lessor may assign, pledge, mortgage, transfer, or otherwise dispose of
title to the Cars without notice to Lessee. In the event of any such assignment,
pledge, mortgage, transfer, or other disposition, this Agreement and all of the
Lessee's rights hereunder hand all rights of any person, firm, or corporation
whom claims or who may hereafter claim any rights under this agreement under or
through Lessee are hereby made subject and subordinate to the term, covenants,
and conditions of any chattel mortgages, security agreements, conditional sale
agreements, and/or equipment trust agreements covering the Cars or any of them
hereto or hereafter created and entered into by Lessor, its successor or
assigns, and to all of the rights of any such chattel mortgages, assignee,
trustee secured party or other holder of the legal title to the Car, however, so
long as Lessee is not in default under this agreement, such assignment, pledge,
mortgage, or other disposition shall not increase Lessee's obligation hereunder
or result in depravation of its quiet enjoyment of the Cars. At the request of
the Lessor or any chattel mortgages, assignee, trustee, secured party, or other
holder of the legal title to the Cars, the as may be lettered or marked to
identify the legal owner of the Cars at no expense to Lessee. If during the
continuance of this Agreement, any such marking shall at anytime be removed or
become illegible, wholly or in part, Lessee shall immediately cause such marking
to be restored or replaced at Lessor's expense.
32. WARRANTIES: Nothing herein contained shall give or convey to Lessee any
right, title or property interest in and to the Cars, or any of them, except as
Lessee, LESSOR, NOT BEING THE MANUFACTURER OF THE CARS NOT THE MANUFACTURE'S
AGENT, MAKES NO EXPRESS OR IMPLIED WARRANTY OF ANY KIND WHATSOEVER WITH RESPECT
TO THE EQUIPMENT, INCLUDING BUT NOT LIMITED TO: THE MERCHANTABILITY OF THE
<PAGE>
EQUIPMENT OR ITS FITNESS FOR ANY PARTICULAR PURPOSE, THE DESIGN OR CONDITON OF
THE EQUIPMENTM THE QUALITY OR CAPACITY OF THE EQUIPMENT, COMPLIANCE OF THE
EQUIPMENT WITH THE REQUIREMENTS OF ANY LAW, RULE, SPECIFICATION OR CONTRACT
PERTAINING THERETO; PATTEN INFRINGEMENT; OR
LATEN DEFECTS. Lessee will be subrogated to Lessor's claims, if any, against the
manufacture or supplier of the Cars for breach of warranty or representation and
upon written request from Lessee, Lessor shall take all reasonable action
requested by Lessee to enforce any such warranty express or implied, issued on
or applicable to any of the Cars, which is enforceable by Lessor in its own mane
provided however that (i) Lessee is not in default under this Agreement and (ii)
Lessor shall not be obligated to resort to litigation to enforce any such
warranty unless Lessee shall pay all expenses in connection therewith.
Notwithstanding the foregoing, Lessee's obligation to pay the rentals or
otherwise under this Agreement shall be and are absolute and unconditional. All
proceeds of any such warranty recovery from the manufacture or supplier of the
Cars shall first be used to repair the affected Cars Lessee shall be solely
responsible for determining that the specifications and design of any Car are
appropriate for the commodities loaded therein.
33. RELIANCE ON LEASE: Lessor, in consideration of the Lessee's oral
representations and agreement to observe, and be bound by each and all of the
terms and conditions of this Agreement as set forth herein, and the immediate
need of Cars by Lessee may have shipped one or more of the Cars to Lessee prior
to the formal execution of this Agreement. If this has occurred, this Agreement,
whether or not executed, shall be the "Standard Lease and Service Agreement"
between the parties of such Cars and upon Lessee's oral agreement to abide by
the Standard Lease and Service Agreement, shall supersede all prior negotiations
and correspondence and shall relate back to the time of first shipment of any
Car hereunder. All notices provided for herein, as well as al correspondence
pertaining to this Agreement, shall be considered as properly given if: (i)
given in writing and delivered personally or sent by registered certified mail,
or regular mail, (ii) by Telex or cable or (iii) by telecopy, and confirmed
thereafter in writing sent by registered, certified, or regular mail. The
respective addresses for notice shall be the addresses of the parties given at
the outset hereof. Such address may be changed by either party giving written
notice thereof to the other party.
34. GOVERNING LAW: This Agreement shall be governed and construed by the laws of
the State of Illinois.
35. BENEFIT: Subject always to the foregoing, this Agreement shall be binding
upon and inure to the benefits of the Lessor, its successors and assigns and the
Lessee, its successors and assigns.
36. ENTIRE AGREEMENT: This instrument, constitutes the entire agreement between
Lessee and Lessor and it shall not be amended, altered or change except by
written agreement and signed by the parties hereto,
37. SEVERABILITY: If any of the provisions of this Agreement shall contravene,
or be invalid under, the laws of the State of Illinois such contravention or
invalidity shall not invalidate this entire Agreement but this Agreement shall
be construed as if not containing the particular provision of provisions held to
be invalid, and the right and obligations of the parties shall be construed and
enforced accordingly.
38. HEADINGS: The headings that have been used to designate the various sections
hereof are solely for convenience in reading and ease of reference and shall
<PAGE>
not be constructed i any event or manner as interpretative or limiting the
interpretation of the same.
IN WITNESS WHEREOF, the parties have caused this instrument to be executed and
delivered the day and year first above written.
TRANSMATRIX, INC.
Cindy Rabbitt By:
- ----------------- ------------------------------
Attest President
ICEBAN AMERICA,INC.
Lawrence Pratt By: Jeff Johnson
- ------------------- ----------------------
Attest Exec. Vice. Pres.
<PAGE>
RIDER #001
TRANSMATRIX CONTRACT #1279
This rider shall become subject a part of that certain Railcar Lease and Service
Contract dated August 1, 1997 between TRANSMATRIX, INC., Lessor, and ICEBAN
AMERICA,INC., Lessee. The railcars described herein shall be leased to Lessee
subject to the terms and conditions in said Railcar Lease and Service Contract
during the term and for the rental described herein.
# OF CARS COVERED BY RIDER: 4
TERMS OF RIDER: 5 MONTHS
CAR DESCRIPTION:
<TABLE>
<CAPTION>
CAR RENTAL
NUMBERS CAR TYPE CAPACITY RATE
<S> <C> <C> <C>
GATX27841 DOT111A100W1, Interior coils 20,000 Gallons $400.00
GATX81685 DOT111A100W1, Interior coils 20,000 Gallons $400.00
GATZ99516 DOT111A100W1, Interior coils 20,000 Gallons $400.00
TEIX1269 DOT111A100W1, Interior coils 20,000 Gallons $400.00
</TABLE>
MM.) In reference to Item 5 of the Railcar Lease and Service Contract, rental
with respect to the railcars leased hereunder shall terminate the date the lease
term expires or the fifth day following the date of return to Lessor as per Item
3 of the Railcar lease and Service Contract, whichever is later.
NN.) In reference to Item 4 of the Railcar Lease and Service Contract, Lessee
agrees to return railcars cleaned free of rust, residue and odor suitable
loading molasses.
OO.) Lessee agrees to limit the loading of the railcars hereunder to Distillers,
Solubles, Steep Water or De-Icer.
Cancels Rider # n/a Rider Date 8/1/97
TRANSMATRIX, INC ICEBAN AMERICA, INC
"LESSOR" "LESSEE"
BY: BY: Jeff Johnson
- ----------------------- -------------------------
President Exec Vice President
Cindy Rabbitt Lawrence Pratt
- -------------------- ---------------------
ATTEST ATTEST
<PAGE>
RIDER # 002
TRANSMATRIX CONTRACT # 1279
This rider shall become a part of that certain Railcar Lease and Service
Contract dated August 1, 1997 between TRANSMATRIX, INC., Lessor, and ICEBAN
AMERICA,INC, Lessee. The railcars described herein shall be leased to Lessee
subject to the terms and conditions in said Railcar Lease and Service Contract
during the term and for the rental described herein.
# OF CARS COVERED BY RIDER: 6
TERMS OF RIDER: 5 YEARS
CAR DESCRIPTION:
<TABLE>
<CAPTION>
CAR RENTAL
NUMBERS CAR TYPE CAPACITY RATE
<S> <C> <C> <C>
NATX71011 DOT111A100W1, Interior Coils 20,000 Gallons $340.00
NATX71231 DOT111A100W1, Interior Coils 20,000 Gallons $340.00
NATX71242 DOT111A100W1, Interior Coils 20,000 Gallons $340.00
NATX71578 DOT111A100W1, Interior Coils 20,000 Gallons $340.00
NATX71977 DOT111A100W1, Interior Coils 20,000 Gallons $340.00
NATX73263 DOT111A100W1, Interior Coils 20,000 Gallons $340.00
</TABLE>
PP.) In reference to Item 5 of the Railcar Lease and Service Contract, rental
with respect to the railcars leased hereunder shall terminate the date the lease
term expires or the fifth day following the date of return to Lessor as per Item
3 of the Railcar Lease and Service Contract, whichever is later.
QQ.) In reference to Item 4 of the Railcar Lease and Service Contract, Lessee
agrees to return railcars cleaned free of rust, residue and odor
RR.) Lessee agrees to limit the loading of the railcars hereunder to Steep Water
of De-icer.
SS.) Lessor will send a renewal proposal letter to Lessee approximately sixty
days prior to the expiration date of the Rider. If no written notice is received
by TransMatrix, Inc. from Lessee regarding its intention to either return the
card at the end of the lease term or renew the Rider upon the terms and
conditions set forth in the renewal proposal letter, the Rider will be
automatically renewed upon the terms and conditions set forth in the renewal
proposal letter on the date following the expiration date of the Rider.
TT.) Lessee agrees to indemnify, defend, protect and hold harmless Lessor from
and against any and all claims, liabilities, damages, injuries, and expenses
(including attorney's fees and expenses) for Environmental Claims in connection
with or alleged to be in connection with, the operation, use, possession,
storage, abandonment or return of any Car, or with any location
whatsoever(including without limitation any landfill) owned, operated or used
for the treatment, storage, transportation or disposal of any material defined
as a hazardous substance ("Hazardous Substance") uder applicable Environmental
Law; including without limitation, Environmental Claims incurred in connection
with the treatment, storage, transportation or disposal by Lessor of any
Hazardous Substance left in the Cars upon return or abandonment of the Cars upon
assignment of any leasehold interest in the Cars.
Definitions: For purpose of this Section the following words shall have the
meanings set forth below:
<PAGE>
(i) "Environmental Claim" means any accusation, allegation, notice of violation,
claim, demand, abatement order, direction, investigation, litigation or any
other proceeding by any governmental authority or any person (including any
corporation, partnership, association or any other organization or entity) for
personal injury ( including sickness, disease or death), tangible or intangible
property damage, damage to the environmental or natural resources, reimbursement
of environmental cleanup cost, nuisance, pollution, contamination, fines,
penalties restrictions, attorney's fees, health effects monitoring or any other
adverse effects on the environment arising under any Environmental Law; (ii)
"Environmental Law" means any applicable foreign, federal, state of local
statute, law (including common law), ordinance rule, order (whether voluntary or
not) relating to the environment, natural resources, or human health and safety.
Cancels Rider # n/a Rider Date:9/15/97
TRANSMATRIX, INC ICEBAN AMERICA, INC
"LESSOR" "LESSEE"
BY: BY: Jeff Johnson
- ----------------------- -------------------------
President Exec Vice President
Cindy Rabbitt Lawrence Pratt
- -------------------- ---------------------
ATTEST ATTEST
<PAGE>
RIDER # 003
TRANSMATRIX CONTRACT # 1279
This rider shall become a part of that certain Railcar Lease and Service
Contract dated August 1, 1997 between TRANSMATRIX, INC., Lessor, and ICEBAN
AMERICA, INC., Lessee. The railcars described herein shall be leased to Lessee
subject to the terms and conditions in said Railcar Lease and Service Contract
during the term and form the rental described herein.
# OF CARS COVERED BY RIDER: 2
TERMS OF RIDER: 5 YEARS
CAR DESCRIPTION:
<TABLE>
<CAPTION>
CAR RENTAL
NUMBERS CAR TYPE CAPACITY RATE
<S> <C> <C> <C>
TMIX200021 DOT111A100W1, INTERIOR COILS 20,000 GALLONS $350.00
TMIX200025 DOT111A100W1, INTERIOR COILS 20,000 GALLONS $350.OO
</TABLE>
A.) In reference to Item 5 of the Railcar Lease and Service Contract, rental
with respect to the railcars leased hereunder shall terminate the date the lease
term expires or the fifth day following the date of return to Lessor as per item
3 of the Railcar lease and Service Contract, whichever is later.
B.) In reference to Item 4 of the Railcar Lease and Service contracr, Lessee
agrees to return railcars clean and free of rust, residue, and odor.
C.) Lessee agrees to limit the loading of the railcars hereunder to Lignin
Liquor.
Cancels Rider # n/a Rider Date 11/11/97
TRANSMATRIX, INC ICEBAN AMERICA, INC
"LESSOR" "LESSEE"
BY: BY: Jeff Johnson
- ----------------------- -------------------------
President Exec Vice President
Cindy Rabbitt Lawrence Pratt
- -------------------- ---------------------
ATTEST ATTEST
<PAGE>
RIDER # 004
TRANSMATRIX CONTRACT # 1279
This rider shall become a part of that certain Railcar Lease and Service
Contract dated August 1, 1977 between TRANSMATRIX, INC., Lessor and ICEBAN
AMERICA, INC., Lessee. The railcars described herein shall be leased to Lessee
subject to the terms and conditions in said Railcar Lease and Service contract
during the term and for the rental described herein.
# OF CARS COVERED BY RIDER: 1
TERMS OF RIDER: 5 YEARS
CAR DESCRIPTION:
<TABLE>
<CAPTION>
CAR RENTAL
NUMBERS CAR TYPE CAPACITY RATE
<S> <C> <C> <C>
TMIX200036 DOT111A100W,INTERIOR COILS 20,000 GALLONS 350.00
</TABLE>
A.) In reference to Item 5 of the Railcar Lease and Service Contract, rental
with respect to the railcars leased hereunder shall terminate the date the lease
term expires or the fifth day following the date to Lessor as per Item 3 of the
Railcar Lease and Service Contract, whichever is later.
B.) In reference to Item 4 of the Railcar lease and Service Contract Lessee
agrees to return railcars cleaned free of rust, residue and odor.
C.) Lessee agrees to limit the loading of th railcars hereunder to Lignin
Liquor.
Cancels Rider # n/a Rider Date 6/24/98
TRANSMATRIX, INC ICEBAN AMERICA, INC
"LESSOR" "LESSEE"
BY: BY: Jeff Johnson
- ----------------------- -------------------------
President Exec Vice President
Cindy Rabbitt Lawrence Pratt
- -------------------- ---------------------
ATTEST ATTEST
EXHIBIT 10.20
LEASE
Specific Terms
Date: June 4, 1998
Lessee: Tembind America Inc.
1201 US Highway One, Suite 205
North Palm Beach, FL 33408
Unit No. 19
Purpose for which property is to be used: Sale and Storage of Sale Materials
Term: Three (3) years
From: The first day of July, 1998 or upon completion of Tenant's interiors
To: The 30th day of June, 2001
Monthly Rent: Six Hundred Seventy-Five dollars and 00/100 ($675.00)
In addition to the rent stated above Lessee shall pay applicable sales tax due
on the rent hereunder
Security Deposit: Six Hundred Seventy-Five Dollars and 00/100 ($675.00)
The interior of the unit shall be painted and an air conditioning system shall
be installed at Lessors expense. Additionally, lessor shall carpet the office
area of the unit, including the office area to be constructed in the rear area
by Lessee.
Option to renew: Lessee shall have the option to renew this lease for two (2)
additional one (1) year period immediately following the termination of this
lease on the same terms and conditions contained herein except as follows:
1. Lessor may adjust the rent rate not more than three percent per year plus the
actual prorata cost of the real estate increase, if any.
This agreement, entered into the date first written above between 1194
Corporation, 1037 Country Club Drive North Palm Beach, Florida 33408 hereinafter
referred to as "Lessor", and the party identified as Lessee under the "Specific
Terms" above as Lessee.
Witnesseth:
That the said Lessor does this day, lease unto the said Lessee and said
Lessee does hereby hire and take as tenant under this Lease the commercial
rental unit identified under "Specific Terms" above which is located at 1194 Old
Dixie Highway Lake Park, Florida to be used and occupied by the Lessee.
<PAGE>
In consideration of the mutual covenants herein contained, the parties
hereby agree as follows:
1. DEMISED PREMISES Lessor leases to lessee the property described above to be
used for the stated under "Specific Terms" above. Whenever used herein, the term
"property shall mean the above described premises.
2. TERM OF LEASE This lease shall be for a term commencing on the date first
written after "From" under the "Specific Terms" above and shall terminate on the
date first written after "To" under the section of "Specific Terms" above.
3. RENTAL Lessee agrees to pay Lessor the rental amount stated under the
"Specific Terms" above. Monthly rent payments shall be due on the first day of
each month including the month of the commencement date until and including the
first day of the last month of this lease.
4. ALTERNATION AND SIGNS Lessee will not make alternation or changes in the
property without first having obtained Lessor's written consent. It is
specifically understood that the lessee will not erect, install, paint or place
any signs, fences, alter the walls, remove or add rooms, or change in any
substantial manner the property without having first received written permission
from lessor. All additions, fixture or improvements which may be made by lessee,
except movable office furniture, movable shelving for storage to be built in the
primary storage area, and equipment shall become the property of the lessor and
remain upon the premises as a part thereof, and be surrendered with the premises
at the termination of this lease.
5. RISK OF LOSS TO PERSONAL PEROPERTY All personal property placed or moved in
the premises shall be at the risk of the lessee or owner thereof, and lessor
shall not be liable for any damage to said personal property, or to the lessee
arising from the bursting or leaking or water pipes, or from any act of
negligence of any co-tenant or occupants of the building or of any other person
whomsoever. Lessor represents that to the best of his knowledge and belief as of
the date thereof there are no defects in this structure that cause the leaking
of water through the roof or by reason of leaking plumbing.
6. MAINTENANCE OBLIGATIONS OF LESSEE Lessee acknowledges that lessee has fully
examined, knows, and is satisfied with condition of the property and equipment
thereon and that the same was received by the Lessee in good order and repair.
Lessee agrees at Lessee's expense to make all repairs of every kind and
character except structural and to keep the property including building and
adjacent sidewalks, curbs and drives in clean and orderly condition and free of
trash, obstructions, fire hazards, or any other unsanitary or dangerous
conditions.
7. MAINTENANCE OBLIGATIONS OF LESSOR Lessor, at its expense, shall make all
structural repairs and accomplish all exterior painting deemed necessary by
lessor in its sole discretion to keep the property and improvements in good
condition, provided, however, that such repairs are required due to ordinary
wear and ter where repairs are necessary as a
<PAGE>
result of neglect, misuse or carelessness of lessee or lessee's employees, then
lessee shall be obligated to reimburse lessor for the cost of such repairs.
Examples of the repairs, structural and otherwise, to be made by lessor shall
include sidewalks and driveways, roofs, exterior walls. Lessee agrees to notify
Lessor of need for repair and lessor shall have a reasonable time to make such
repairs and to determine the cause for same. Lessor, or any of his agents, shall
have the right to enter said premises during all reasonable hours, to examine
the same to make such repairs, additions or alterations as may be deemed
necessary for the safety, comfort, or preservation thereof, or of said building.
8. TAXES AND EXPENSES Lessee agrees to pay, when due any and all license, sales,
occupation or privilege tax, or any other tax, levied upon their property or
with respect to the business conducted by the Lessee on the property, and all
taxes, fees and assessments levied or assessed upon any equipment, merchandise,
and any and all other personal property (owned by Lessee) which is installed
and/or located in, on or about the property during the term of this lease.
Lessor agrees to pay all real estate taxes and assessments levied or assessed
against the property and all taxes (except business and inspection type taxes)
on personal property located thereon owned by Lessor.
9. ASSIGNMENT AND SUBLETTING This lease may not be assigned, pledged, mortgaged,
transferred, no may the property be sublet or turned over or made available for
use of operation by others by Lessee without prior written consent of Lessor.
10. LIABILITY It is expressly agreed and understood by and between the parties
to this agreement, that the landlord shall not be liable for any damage or
injury by water, which may be sustained by the said tenant or other person or
for any other damage or injury resulting from the carelessness, negligence, or
improper conduct on the part of any other tenant or agents, or employees, or by
reason of the breakage, leakage, or obstruction of the water sewer or soil
pipes, or other leakage in or about the said building.
11. TIME IS OF THE ESSENCE It is understood and agreed between the parties
hereto that time is of the essence of this contract and this applies to all
terms and conditions contained herein.
12. TERMINATION OF LEASE WITHOUT NOTICE Each of the following shall be deemed an
event of default by lessee under this lease:
[a] Failure in the prompt payment of rent.
[b] Failure in the performance of the maintenance obligations in
paragraph 6.
[c] Failure in the performance or observance of any other covenant,
obligation or condition of this lease by the Lessee to be performed or
observed.
[d] If any insolvency, bankruptcy or receivership proceedings are
instituted against Lessee; or if the Lessee shall make an assignment
for the benefit of creditors.
<PAGE>
[e] If any liens for taxes or charges for services of material rendered
at the request of Lessee are filed against the property. If any of the
events of default provided above should continue for a period of five
(5) days after written notice of such default has been given to Lessee
by Lessor, then and in that event, Lessor may at its options and
without further notice or demand, terminate this lease and all of
lessee's rights hereunder and enter upon the property or any part
thereof and resume possession of same, the Lessee hereby waiving any
statutory rights inconsistent therewith and hereby releasing Lessor
from any action or causes of action which might accrue to Lessor as a
result of such re-entry.
13. ABANDONMENT OF PROPERTY If the property is abandoned by the Lessee then this
lease shall be deemed automatically terminated without notice. Lessor may enter
upon the property and resume possession of same. Lessee hereby waiving any
statutory right inconsistent therewith and hereby releasing Lessor from any
causes of action which might accrue to Lessor as a result of any such re entry.
14. WAIVER - ENTIRETY OF CONTRACT The waiver of any breach of any of the
covenants, conditions or stipulation hereof shall not be taken to be a waiver of
any subsequent breach of same or any of the covenants, conditions or
stipulations hereof no shall any failure o Lessor or Lessee to enforce its
rights or seek remedies upon any default of Lessee with respect to his
obligations hereunder or any of them prejudice or affect the rights or remedies
of Lessor in the event of any subsequent default or defaults to Lessee. No prior
stipulation, agreement or understanding of the parties or their agents in
respect to the subject matter of this contract or covered by these provisions.
The right of either party to require strict performance of this contract shall
not be affected by any previous waiver or course of dealings.
15. UNDERLYING ESTATE - CONDEMNATION - FIRE OR OTHER CASUALTY
Lessor or Lessee may terminate this lease if any part of the property is
condemned or given up voluntarily or involuntarily for public or quasi-public
use.
In the event the property is destroyed by fire or other casualty, Lessee shall
give immediate notice to Lessor, and Lessee and Lessor shall have the option to
terminate this lease of the date of such damage by giving notice of election to
do so. After fire or condemnation, if neither party elects to terminate, rental
shall be abated in proration to the loss of use and occupancy suffered by lease.
16. NOTICES It is understood and agreed between the parties hereto that that
written notice mailed or delivered to the premises leased hereunder shall
constitute sufficient notice to the lessee and written notice mailed or
delivered o the office of the lessor shall constitute sufficient notice to the
lessor, to comply with the terms of this contract.
17. PERSONALL PROPERTY AS SECURITY The said Lessee hereby pledges and assigns to
the Lessor all of the furniture, inventory, fixtures, goods and chattels of said
Lessee, which shall or may be brought or put on said premises as security for
<PAGE>
the payment of the rent reserved, and the Lessee agrees that the said lien may
been forced by distress foreclosure or other wise at the election of the said
Lessor.
18. ATTORNEY'S FEES In the event that it should become necessary for either
party to enforce the terms of this lease through judicial proceedings, or in the
event that it should be necessary for either party to hire an attorney to
enforce the terms of this lease, then, in said event the prevailing party shall
be entitled to collect from the non-prevailing party, all court costs and
reasonable attorney's fees in connection therewith.
19. MECHANIC'S LIENS It is specifically understood that Lessee shall have right
to have any liens placed on the subject premises in that no person shall ever be
entitled to any lien directly or indirectly derived through or under the Lessee,
or their agents or servants. Prior to any work being done on the subject
premises by the Lessee, the Lessee shall, after obtaining written consent of
doing said work by the Lessor as provided in this lease, further provide Lessor
with a waiver of mechanic's lien executed by the persons or person doing said
work on the premises through a contractor, material man or laborer or other
person dealing with the Lessee, (15) days thereafter, by paying same. The Lessee
shall not be deemed to be the agent of the Lessor so as to confer upon a laborer
bestowing labor upon the leased premises or upon any material incorporated in
the construction of improvements upon the leased premises, a mechanic's lien
upon the Lessor's estate under the provisions of the statutes of the State of
Florida.
20. UTILITIES Lessor shall pay for water and garbage pick-up. Lessee shall pay
for all utilities used on the premises. Lessee may not use gas in the premises.
21. USE OF PREMISES Lessee agrees to use the premise solely for the use
described in paragraph 1 above an for no other purposes or uses whatsoever.
Lessee shall not sell any items in the store which landlord in landlord's sole
discretion shall deem "adult material" such as but not limited to books and
magazines, video tapes or other adult novelties, not will lessee use premises
for automobile repair or for the storage of any hazardous or toxic substances.
22. RETURNED CHECK AND LATE RENT In the event that any checks given to lessor
for payment of rent should be returned for insufficient funds or any other
reason by Lessors bank, then Lessee agrees to pay a penalty in the amount of
$50.00 to Lessor for each said returned check. Furthermore, Lessee agrees to pay
a penalty of $50.00 for late payment of rent for any month which the rent is
delivered Ten (10) days late. For purposes of this paragraph rent mailed and
postmarked on or before the due date will not be deemed late.
23. PARKING LOT Lessee agrees that the parking lot is for the sole purpose of
providing parking for customers of Lessee and other co-tenants of the building.
Lessee shall not utilize the parking lot for any other purpose whatsoever
without the express written permission of Lessor.
24. SECURITY DEPOSIT Lessor recognizes a security deposit in the amount stated
under "Specific Terms" above, previously received from Lessee, to be returned
<PAGE>
upon the satisfactory completion of this lease and surrender of the property by
Lessor in good condition.
25. RADON GAS NOTIFICATION Radon is a naturally occurring radioactive gas that,
when it has accumulated in a building in sufficient quantities, may present
health risks to persons who are exposed to it over time. Levels of radon that
exceed federal and state guidelines have been found in buildings. Addition
information regarding radon and radon testing may be obtained from your county
public health unit.
26. RULES Lessee agrees to abide by the rules of the building reasonable
promulgated by Lessor for the management and orderly operation of the building.
In witness whereof, the parties hereto have executed and delivered this lease
the day and year first above written.
1194 Corporation, Lessor
By: /s/ C Russell Wilson
-----------------------------
C. Russell Wilson
/s/ George Janke
----------------------------
Tembind America Inc.
George Janke, President &CEO
/s/ Ann M Owen
-----------------------------
Ann Owen, Assistant Secretary
EXHIBIT 10.21
CSXT Form 2124UL - Page 1
Revised July 1997
Agreement No. CSX-032648
TRACK LEASE (LOADING/UNLOADING)
THIS AGREEMENT, Made as of May 12, 1998, by and between CSX TRANSPORTATION,
INC., a Virginia corporation, whose mailing address is 500 Water Street,
Jacksonville, Florida 32202, hereinafter referred to as "Railroad", and ICE BAN
AMERICA, INC., a New York corporation, whose address is 12118 E. Yates Center
rd., Lyndonville, NY 14098, and telephone number is (800) 742-3226, hereinafter
referred to as "Lessee", WITNESSETH THAT:
In consideration of the terms, covenants and conditions herein specified
and the rental to be paid hereunder by Lessee, Railroad, effective as of October
20, 1997, the effective date, and only so long as this Agreement remains in
effect, leases unto Lessee, on a nonexclusive basis, 120 feet of Track No. SV-2,
including a strip of right-of-way adjacent to and beneath same to a width of
thirteen feet (13') [being six and one-half fee (6 1/2) on each side of the
centerline of said track(s)], at Milepost SX-963.50, Dyer, Palm Beach County,
Florida as shown on Railroad's Plan numbered A-0573, dated April 29, 1998,
attached hereto and made a part hereof. Railroad specifically reserves the
right, at any time during this Agreement, to substitute other tracks(s) and
corresponding adjacent strip(s) of right-of-way of the same approximate
dimensions as described above and any such substituted track(s) are hereinafter
collectively referred to as the "Track", and Track, together with the adjacent
strip(s) of right-of-way and any such substituted right-of-way are hereinafter
collectively referred to as the "Premises".
1. USE:
1.1 Lessee shall use and occupy the Premises for no purpose other than
loading and unloading the freight described in Section 1.2 into and
from railcars.
1.2 Freight to be loaded and unloaded is limited to: (List items and
ICC-STC Codes):
2611215 Bulk Lignin
2. RENTS:
2.1 Lessee shall yield and pay to Railroad as rental for the Premises the
sum of SEVEN HUNDRED FIFTY AND 00/100 U.S. DOLLARS ($750.00) per
annum, payable in advance from the effective date above, plus any
applicable sales, use or rental tax thereon. Payment by Lessee of any
sum in advance shall not create an irrevocable lease for the period
for which the same is paid.
2.2 Railroad reserves the right to change the rental hereunder at any time
upon thirty (30) days' written notice to Lessee. Occupation of the
Premises by Lessee after the effective date in said notice shall be at
such adjusted rent. If rental is payable by CTP, Lessee agrees to
execute a new EFT Authorization Agreement for Lessee's bank within
said thirty (30) days. Rent may be similarly adjusted from time to
time thereafter.
2.3 Neither the failure of Lessee to receive any rent bill under Section
2.1(B), nor receipt of a bill in an incorrect or unadjusted rent,
shall override the terms of this Agreement or excuse or release Lessee
from liability for the correct contract rent. Limitation on collection
of any erroneous billings or payment shall be three (3) years from the
termination of this Agreement.
<PAGE>
3. RAILROAD'S USAGE:
3.1 Railroad shall have the following retained rights, among others, in
and to the Track and Premises:
(a) to switch any railcar(s) standing on the Track when Railroad finds
it necessary to do so in connection with its operations; (b) to use the
Track in the event of any Railroad operating emergency; (c) to operate over
the Track with Railroad's engines and equipment when necessary to handle
the business of other industries, but such operation will be performed with
the least practicable interference to Lessee's use of the Premises; (d) to
maintain and/or construct, and to permit others to maintain and/or
construct, overhead and/or underground pipe and/or wire lines in, upon,
under or across the Premises, and to use, repair, replace and remove the
same; and (e) to alter, rearrange, extend or enlarge the Track.
4. MAINTENANCE:
4.1 Railroad shall maintain the Track; provided, however, that such "track
maintenance' shall not include removal from the Premises of snow, ice,
weeks, brush, debris or any spillage resulting from Lessee's
operations, all of which shall be performed by Lessee at its sole
risk, cost and expense.
4.2 Lessee shall not create or permit any nuisance in, on or about the
Premises, and lessee shall otherwise maintain the Premises in a neat
and clean condition, free and clear of all flammable or combustible
objects (including commodities, trash and weeds) ignitable by sparks
resulting from Railroad operations, at Lessee's sole risk, cost and
expense, in a manner satisfactory to Railroad.
5. GOVERNMENTAL REQUIREMENTS:
5.1 Lessee shall be solely responsible for compliance with all laws,
regulations and governmental requirements applicable to the safety of
railcar(s) and applicable to safety and environmental controls of the
loading and unloading operations conducted on the Premises
(collectively, "Governmental Requirements"), and shall defend,
indemnify and hold Railroad harmless from all consequences and costs
of non-compliance with such Governmental Requirements and any permits
issued thereunder.
6. DRAINAGE:
6.1 During the term of this Agreement, Lessee shall maintain any existing
railroad drainage ditch located within the Premises. With the prior
written consent of Railroad, Lessee may install and maintain drainage
structures to encase said drainage ditch, at Lessee's sole cost and
expense and in a manner satisfactory to Railroad's Chief
Engineer-Design & Construction. Thereafter, Lessee may fill in and
utilize and the land over said drainage structures. Upon termination
of this Agreement, Lessee shall remove said drainage structures, if
required by Railroad, and restore the original open ditch in a manner
satisfactory to said Chief Engineer.
6.2 If the Premises is within a yard area or other property of Railroad,
Lessee shall construct and maintain--in accordance with all applicable
Governmental Requirements--an adequate surface drainage system,
diverting all stream or surface drainage water from the Premises to
the nearest public (or non-Railroad owned) drainage or storm sewer
system, in order to prevent the accumulation or discharge of such
waters upon adjacent lands, right-of-way or facilities of Railroad. If
applicable Governmental Requirements mandate that practices, then
lessee shall take all steps necessary and appropriate, at its sole
cost and expense, to assure compliance therewith.
7. ACCESS:
7.1 Lessee shall have the right to use, in common with Railroad and others
authorized by Railroad, only existing driveway(s) and crossings or
<PAGE>
other property designated by Railroad, for ingress to and egress from
the Premises, subject to all of the covenants, terms and conditions of
this Agreement. Railroad shall be under no obligation to maintain said
driveway(s) or access.
7.2 Lessee shall use and shall cause its agent, employees (family),
servants, sublessees and invitees to use the highest degree of care in
the operation and use of said Crossings so as to use the highest
degree of care in the operation and use of said Crossings so as to
avoid collisions and/or interference with operations of Railroad.
8. TRACK ALTERATIONS:
8.1 If any change, rearrangement, alternation, extension or enlargement of
the Track or other rail structure(s) on the Premises is required
because of any change in Railroad's connecting track(s) or any changes
in Railroad operations, or for any other cause, Lessee shall
rearrange, relocate or alter Lessee's facilities, equipment or
railcar(s) thereon at Lessee's sole cost
9. TRACK CLEARANE(S):
9.1 Because Railroad is required to provide its employees with a safe
environment within which to work, and Railroad employees will be
working on and around the Track, and adequate clearance over, under or
adjacent to the Track are essential to said safe working environment,
Lessee shall not create, erect, place or permit any temporary or
permanent buildings, structures, fixtures, equipment or other
obstruction over the Track within a vertical clearance of less than
twenty-two (22) feet above the top of the higher rail for the full
width of the horizontal clearance, or horizontally parallel with the
Track within eight (8) feet of the center line of the Track as
increased for flat or superelevated curves and approaches thereto as
required by Railroad.
9.2 Nothing herein shall be construed to permit any clearances less than
the minimum required by any applicable law or regulation. All
electrical wires suspended over the Track shall be placed and
maintained in accordance with the standards prescribed by the National
Electric Safety Code (NESC).
9.3 Lessee alone shall monitor compliance with clearance requirements, and
Lessee shall install, maintain and replace any approved warning signs
along or above the Track (including lighting of the warning signs when
night rail service is possible).
9.4 For the safety of employees of Railroad and of Lessee, Lessee shall:
(A) Keep walkway areas on both sides of the Track in proper repair,
free of obstructions or holes;
(B) Maintain any gate(s) permitted across the Track so as to provide
proper clearance when open, with a means satisfactory to Railroad for
safely fastening the gate(s) in opened position, and equip said
gate(s) with double-end hasp to allow use of a padlock by Lessee and
standard switch lock by Railroad, and provide nighttime reflective
markers thereon; and
(C) Keep the Track and the rest of the Premises within the clearance
limits of Section 9.1, free and clear of all freight, commodities,
materials or other objects.
9.5 Lessee shall neither temporarily no permanently block any sight view
of any rail/road crossing on the Premises by parking or allowance of
parked motor vehicles or any other means.
<PAGE>
10. CAR DELIVERY, SECURITY:
10.1 In the absence of any Rail Transportation Contract provision between
the parties to the contrary, this Article 10 shall govern railcar
delivery, placement, security and/or removal.
10.2 Each railcar consigned to Lessee for delivery on the Track shall be
deemed to be fully and completely delivered and in the sole possession
of Lessee from the time the railcar is placed on the Track and
detached or uncoupled from the engine or train by which it was moved
until the railcar is coupled up to Railroad's engine or train for
outbound movement (the "Lessee's Possession Period").
10.3 If Railroad is unable to deliver a railcar on the Track due to acts or
omissions of Lessee or any third part, then such railcar will be
considered as constructively placed on the Track at the time of
Railroad's attempted delivery.
10.4 Lessee assumes all risk of loss and/or damage to railcars on the Track
and the contents thereof during the Lessee's Possession Period, and
Lessee shall be solely responsible for providing security for such
railcars and contents against acts or omissions of third parties
(including trespassers) or against Acts of God. At no time during the
Lessee's Possession Period shall Railroad be or be deemed to be a
bailee, common carrier or warehouseman with respect to railcars on the
Track and contents thereof.
10.5 Railroad shall be responsible only for loss or damage to railcars on
the Track, and the contents thereof, arising solely and directly from
negligent acts of Railroad in conducting its rail operations. However,
in no event will Railroad have any liability for indirect or
consequential damanges.
10.6 Lessee shall be solely responsible for the cost, installation,
maintenance, replacement, operation and Safety of loading/unloading
equipment located on the Premises. Any device used in loading or
unloading railcars (including but not milited to sideloaders,
forklifts, gangplantks, overhead chutes, pumps, gravity drains,
sub-surface pits) shall be locked, secured, removed (or covered) when
not in use. Any device used by Lessee to move railcars upon the Track
(whether trackmobile, locomotive or other) shall be disconnected from
said railcars and locked and secured by Lessee when not use.
11. HAZARDOUS MATERIALS, SUBSTANCE, WASTES:
11.1 Unless designated as a permitted freight commodity in Section 1.2, no
hazardous materials, hazardous substances or hazardous wastes, as
those terms are defined in applicable federal, state or local laws and
regulations (collectively, "Hazardous Commodities") and no goods or
materials classified in Title 49, Code of Federal Regulations, as
explosive, combustible or flammable (which, together with Hazardous
Commodities are hereinafter referred to as "Controlled Commodities")
shall be loaded, unloaded or transferred on the Track or elsewhere
upon the Premises without the prior written consent of Railroad.
11.2 In the vent the Track or any part of the Premises is used for the
loading, unloading or transfer of any Hazardous Commodity, prior to
the first such loading, unloading or transfer operations, Lessee shall
install and thereafter maintain, at it sole risk, cost and expense:
(A) an impermeable containment structure of sufficient size and
construction to prevent any leakage, spillage or runoff of such
Hazardous Commodity onto the soil of the Premises; and
(B) all pollution control structures, containers, devices or equipment
which may be required for any such operation by any applicable
Governmental Requirement.
<PAGE>
Plans for all such structures, etc., shall be sent to, and reviewed and
approved by, Railroad's Chief Engineer-Design & Construction prior to
construction or installation.
11.3 In the event the Track is used for the loading or unloading of
railcars containing Controlled Commodities, or in the event the area
adjacent to the Track is used for any transfer or vehicular movement
of such Controlled Commodities, Lessee expressly agrees, in addition
to the provisions of Section 11.2, that:
(A) Lessee shall fully comply with the recommended practices of the
Association of American Railroads (AAR) and with all Governmental
Requirements pertaining to the loading/unloading or transfer of
Controlled Commodities, and shall be solely liable, for, and shall
indemnify and hold Railroad harmless against, any damages, penalties,
fines, costs or charges incurred by Railroad on account of Lessee's
failure to so comply; and
(B) The provisions of CSX Transportation Circular G.M.40, a copy of
which Lessee acknowledges having received, shall apply (Section A to
flammables or combustibles; Section B to liquefied petroleum gas;
Section C to hazardous materials, substances or wastes) to any
transfers directly between railcars and highway vehicles.
11.4 In the event of any leakage, spillage or release from any railcar on
the Track, or from any transfer, delivery or receptor vehicles or
equipment, Lessee shall: (a) immediately notify the appropriate
Government Response Center, and Railroad's Operation Center, at (904)
381-2794; (b) confirm such telephone notice in writing within sever
(7) calendar days thereof to Railroad's Director Hazardous Materials,
500 Water Street, Jacksonville, Florida 32202, outlining all actions
taken to remediate the release; (c) immediately, at Lessee's sole
expense, clean,. Neutralize, remove or remedy the release; and (d)
promptly and fully remediate any environmental damage done to the
Premises and reimburse and indemnify Railroad for any cost, charge,
fine or penalty incurred by Railroad as a result thereof (unless such
environmental damage is attributable solely and directly to Railroad's
negligent conduct of its rail operaitons, in which case Railroad shall
be responsible for such remediation)
12. ALLOCATION OF RISK AND LIABILITY:
12.1 The provisions of this Article 12 govern the respective
indemnification obligations of Railroad and Lessee for "Losses" (as
hereinafter defined)during the Lessee's Possession Period.
12.2 "Losses" are nay and all damages, claims, demands, causes of action,
suits, expenses (including attorney's fees and costs), judgments and
interest whatsoever asserted or recoverable by Third Parties with
respect to bodily injury or death or damage or destruction of property
of Third Parties arising or allegedly arising in connection with, or
related to, the presence of any railcar on the Track and the contents
thereof. "Third Parties" are all persons, corporations or firms, other
than Railroad and Lessee, but shall include the respective employees
of either Railroad or Lessee and the owner of any railcar other that
Railroad and Lessee.
12.3 Railroad shall indemnify and hold Lessee harmless from and against all
Losses attributable solely to (a) any negligent act or omission of
Railroad in the conduct of its rail operations, or (b) the failure by
Railroad to maintain the Track properly, but only if Railroad is
obligated to perform such maintenance pursuant to Article 4 of this
Agreement.
12.4 In the event Losses are attributable jointly or concurrently to the
causes described in (a) or (b) of Section 12.3 and to any negligent
act or omission of Lessee, both parties agree to jointly defend and
bear equally between them (one-half (1/2) each) all Losses arising
therefrom.
12.5 Lessee shall indemnify and hold Railroad harmless from and against any
and all Losses attributable to any cause (s) other than those
specifically set forth in Sections 12.3 and 12/4 above, including,
without limitation: the sole negligence of Lessee; Lessee's failure to
maintain track clearances in conformity with Article 9; Lessee's
<PAGE>
failure to comply with Article 11; the actions or inactions of any
trespasser; or the breach by Lessee of any obligation to Railroad
created hereunder; or Lessee's failure to use the highest degree of
care as required in Section 7.2.
12.6 All obligations of Railroad and Lessee under this Agreement ot defend,
release, indemnify and/or hold the other harmless shall also extend to
the officers, agents, servants and employees of Railroad and Lessee,
respectively.
13. INSURANCE:
13.1 Prior to commencement of any activities provided for herein, Lessee
shall procure, and shall thereafter maintain during the continuance of
this Agreement, at its sole cost and expense, a policy of Commercial
General Liability (CGL) Insurance, or equivalent , covering liability
under this Agreement, including assumed contractual liability, naming
Railroad as additional insured and covering liability assumed by
Lessee under this Agreement. Coverage of not less that THREE MILLION
U.S. DOLLARS ($3,000,000), per occurrence, for bodily injury and
property damage, is recommended as a prudent minimum to protect
Lessee's assumed obligations hereunder. If said CGL policy does not
automatically cover Lessee's contractual liability under this
Agreement, a specific endorsement adding such coverage shall be
purchased by Lessee. Should said CGL policy be written on a "claims
made" basis instead of a "per occurrence" basis, Lessee shall arrange
for adequate time for reporting losses. Failure to provide contractual
liability coverage or adequate reporting time shall be at Lessee's
sole risk. Securing of insurance by Lessee shall not limit Lessee's
liability under this Agreement, but shall be additional security
therefor.
13.2 Railroad may at any time request evidence of insurance purchased by
Lessee to comply with the requirements of this Article 13. Failure of
Lessee to comply within thirty (30) days of Railroad's request shall
be a default subject to Article 14.
13.3 Notwithstanding the provisions of Section 13.1, Lessee may self-insure
in any amount Lessee's liability under this Agreement, provided that
Lessee's self-insurance program is approved by Railroad's
DirectorCasualty Insurance prior to commencement of any activities
contemplated herein.
13.4 In the event that Lessee undertakes or causes to be undertaken any
construction and/or demolition activities within fifty (50) feet of
any operated railroad track(s) or affecting any railroad bridge,
trestle, tunnel, track(s) roadbed, overpass or underpass (in
constructing any containment structures, gates, etc.), Lessee shall
pay to Railroad the sum of $1,000 to cover the cost of adding this
Agreement to Railroad's blanket Railroad Protective Liability (RPL)
Policy for any period of actual construction or demolition.
14. DEFAULT; TERMINATION:
14.1 If Lessee fails to keep and perform any of the covenants, terms or
conditions herein set forth to be kept and performed by Lessee,
including rental payment, then Railroad, in addition to any other
remedies, may immediately suspend service to Lessee on, to or over the
Track, and may thereafter cancel this Agreement upon thirty (30) days
written notice to Lessee. However, Railroad assumes no duty to advise
Lessee of failure to comply, and Railroad may continue service Lessee
without canelling this Agreement and without being deemed to have
waived any rights.
14.2 Unless so cancelled, this Agreement shall continue in force from the
effective date first written above until terminated by thirty (30)
days' written notice from either party to the other. Railroad reserves
the right to so terminate this Agreement regardless of rental having
been paid in advance for any annual or other period. Upon notice of
termination by Railroad, and unless the amount involved is less than
One Hundred Dollars ($100), Railroad shall refund to Lessee any
prepaid rental, prorata, in full settlement, satisfaction and
discharge of the remainder of the term of period.
<PAGE>
14.3 Upon cancellation or termination of this Agreement, Lessee shall
immediately vacate the Track, shall remove (at Lessee's sole cost and
expense) any structures or equipment placed on the Premises by Lessee,
and shall leave the Premises in a condition satisfactory to Railroad's
Chief Engineer-Design and Construction. Lessee's obligation to
remediate any environmental damage done to the Premises by Lessee
shall survive cancellation or termination of this Agreement for a
period of three (3) years unless Railroad gives Lessee notice within
such three (3) year period that remediation is required, in which case
Lessee's obligation shall continue until remediation has bee
completed.
15. NOTICES:
15.1 All consents or approvals of Railroad to construction, alteration or
clearance plans, or standards of satisfaction of Railroad required
hereunder, shall be secured in writing from its Chief Engineer-Design
& Construction, at the address above, or from said Chief Engineer's
designated representative, unless otherwise provided herein or by
separate notice.
15.2 All other notices or written proofs, advice, etc., required hereunder
to be given shall be addressed to Railroad at the address above, c/o
Contract Administration, Administrative Services J180, referring to
this Agreement by date and form number; and to Lessee at the address
above; unless otherwise provided herein.
16. ASSIGNMENT, SUBLEASE; PROHIBITION:
16.1 This Agreement and Lessee's rights hereunder shall not be assigned or
transferred in any manner, no shall the Premises or any part thereof
be sublet by Lessee, nor shall Lessee in any manner transfer or
attempt to transfer to, or direct or authorize any use of the Track by
any other party, without the prior written consent of Railroad. Any
attempt by Lessee to assign, sublease or otherwise convey or transfer
any of its rights or obligations contained herein, shall be null and
void and shall constitute a default. Railroad shall not be under any
obligation to switch onto or from the Track any railcar consigned to
or from an assignee, sublessee or grantee as to which Railroad has not
consented.
16.2 Unless cancelled or terminated as provided in Article 14, and subject
to the provisions of Section 16.1, this Agreement shall inure to the
benefit of and be binding upon the parties thereto, their successors
(or heirs, executors and administrators) and assigns.
17. GENERAL PROVISIONS:
17.1 The term "Railroad" shall include any other company(ies) whose
property at the Premises may be leased or operated by the undersigned
Railroad, and any parent company(ies) or subsidiary(ies) of the
undersigned Railroad.
17.2 This Agreement is executed under current interpretation of all
applicable federal, state and local statutes, ordinances, and laws.
Each separate division (paragraph, clause, item, term, condition,
covenant or agreement) herein shall have independent and severable
status from each other separate division for the determination of
legality, so that if any separate division is determined to be void,
voidable, invalid or unenforceable for any reason, such determination
shall have no effect upon the validity or enforceability of each other
separate division, or any combination thereof.
17.3 In the event this Agreement is part of a package of agreements for
rail service to a plant or facility of Lessee, all such documents
shall be read as capat8ible parts of said package and not in
contradiction to each other.
17.4 With respect to interpretation of this Agreement, each party agrees
that no rule of strict construction shall be applied against either
party.
<PAGE>
17.5 Lessee shall not at time own or claim any right, title of interest in
or to the Premises, nor shall the exercised of this Agreement for any
length of time give rise to any right, title or interest in or to the
Premises other than the terminable leasehold created herein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed, in duplicate, each of which shall constitute an original but together
shall constitute but on agreement, effective as of the day and year first above
written.
Witness for Railroad: CSX TRANSPORATION, INC.
SIGNED By: /s/ Sheila W. Bazar
---------------------------------
Print/Type name: Sheila W. Bazar
Print/Type Title: Director Property Services
Witness for Lessee: ICE BAN AMERICA, INC.
/s/ Dave Cook By:/s/ Lawrence Pratt
- ----------------- -----------------------------
Who, by the execution
hereof, affirms that he/she
has the authority to do so
and to bind the Lessee to
the terms and conditions of
this Agreement.
Print/Type Name: Lawrence Pratt
Print/Type Title: Office Manager
Social Security Number or Tax
Identification Number: 88-0367024
EXHIBIT 10.22
CRYSTAL TREE CORPORATE CENTRE
LEASE OF OFFICE SPACE
THIS LEASE is made and entered into as of the 11th day of April, 1997,
between NORTH PALM CRYSTAL ASSOCIATES (hereinafter called "Landlord") with an
address of 1201 U.S. Highway One, Suite 201, North Palm Beach, Florida 33408 and
Ice Ban America, Inc., (a Nevada Corporation), (hereinafter called "Tenant")
whose address is 1201 U.S. Highway One, Suite 36, North Palm Bech, Florida
33408, for Premises in Crystal Tree Corporate Centre with an address of 1201
U.S. Highway one, North Palm Beach, Florida 33408. Landlord and Tenant, in
consideration of the covenants herein contained, hereby agree as follows:
ARTICLE I - DEFINITIONS
1.1 Definitions.
A. "Article" means an Article of this lease.
B. "Building" means the CRYSTAL TREE CORPORATE CENTRE building located at
1201 U.S. Highway One, North Palm Beach, Florida 33408
C. "Commencement Date" means the first day of the Term.
D. "Exhibit A" means the legal description attached hereto as Exhibit "A"
E. "Exhibit B" means the floor plan attached hereto as Exhibit "B".
F. "Exhibit C" means the provisions relating to Occupancy Costs and other
matters attached hereto as Exhibit "C".
G. "Exhibit D" means the Rules and Regulations attached hereto as Exhibit
"D".
H. "Exhibit E" means the quaranty of the obligations of this Lease as
described in the Exhibit "E" attached hereto.
I. "Exhibit F" means the provisions relating to the Landlord's Work
attached hereto as Exhibit "F".
J. "Exhibit "G" means the provisions relating to the Tenant's Work
attached hereto as Exhibit "G".
K. "Fiscal Year" means a twelve month period (all or part of which falls
within the Term) from time to time determined by Landlord, at the end
of which Landlord's books are balanced for auditing.
<PAGE>
L. "Lease" means this Lease, Exhibits "A", "B", "C", "D", "E" "F" "G" to
this Lease, and every properly executed instrument which by its terms
hereafter amends, modifies or supplements this Lease.
M. "Occupancy Costs" means the amount chargeable by Landlord under
Section 4.2.
N. "Premises" means 825 + square feet, more or less, on the first floor
of the Building as generally indicated on Exhibit "B" and known as
Suite 36.
O. "Rent" means the amount payable by Tenant to Landlord under Article IV
of this Lease, including applicable Sales and Use Taxes for the full
Term of this lease.
P. "Term" means the period of time set out in Section 3.1.
ARTICLE II - GRANT OF LEASE
2.1 GRANT. Landlord hereby demises and leases the Premises to Tenant,
and Tenant hereby leases and accepts the Premises from Landlord, to have and to
hold during the Term, subject
to the terms and conditions of this Lease.
2.2 Quiet Enjoyment. So long as Tenant shall not be in default
hereunder, Tenant shall not be disturbed in its occupancy of the Premises by
anyone claiming by, through or under Landlord.
2.3 Covenants of Tenant. Tenant covenants to pay the Rent when due
under this Lease, and to observe and perform all of the other terms and
conditions to be observed and performed by Tenant under this lease.
ARTICLE III - TERM AND POSSESSION
3.1 Term. The Term of this Lease shall be three ( 3) years beginning on
April 1, 1997, and continuing through March 31, 2000 . In the event that the
Term commences prior to the commencement of a calendar month and prior to the
commencement of a Fiscal Year and/or terminates prior to the termination of a
Fiscal Year, adjustments shall be made on a proportional basis for the Rent and
other charges to be paid under this Lease with respect to such periods.
3.2 Acceptance of Premises. Taking possession of all or any portion of
the Premises by Tenant shall be conclusive evidence as against Tenant that the
Premises or such portion thereof is in satisfactory condition on the date of
taking possession.
3.3 Renewal Options. Provided that at the time of the giving of
Tenant's renewal notice (as herein provided) Tenant is not in default under any
of the terms, conditions, covenants or provisions contained in this Lease, then
Tenant (but not any assignee or subtenant) is hereby granted an option to renew
this Lease for an additional Three ( 3 ) year Term, which option shall be
<PAGE>
exercisable upon tenant's notifying Landlord in writing of its election to renew
at least six (6) months prior to the expiration of the Term of this Lease (the
option to be referred to herein as a "Renewal Option". During such Renewal Term,
the renewed Lease shall be on the same terms, conditions, covenants and
provisions as contained in this Lease except:
A. The " Term" as defined in Section 3.1 shall include the Renewal Term;
B. There shall be no further rights of renewal; and, THIS PARAGRAH N/A
The Base Annual Rent for year one and each successive year of the Renewal Term
shall be a sum equal to the Base Annual Rent for the immediately preceding year
plus an additional amount equal to the portion of the Base Annual Rent for the
immediately preceding year which is the equivalent of the percentage increase in
the Consumer Price Index during a period commencing with that month which is two
months prior to the commencement of the immediately preceding year and that
month which is two months prior to commencement of the year of the Renewal Term
for which the Annual Rent is being determined. The total of these two sums shall
be the Base Annual Rent for that year of the Renewal Term. Notwithstanding the
above, the annual increase shall not be less than 3% nor greater than 6%.
As used herein, the "Consumer Price Index" is defined as provided in
the MISCELLANEOUS provisions of this Lease. Notwithstanding any provision of
this section, the Base Annual Rent for any year of the Renewal Term, subsequent
to the first year of the Renewal Term, shall be no less than the Base Annual
Rent for the immediately preceding year of the Renewal Term.
3.4 Tenant's Estoppel Certificate. Within ten (10) days after written
request by Landlord, Tenant will execute, acknowledge and deliver to Landlord, a
certificate stating (I) that this Lease is in full force and effect and has not
been modified, supplemented or amended in any way, except as indicated in such
certificate: (ii) that all conditions and agreements hereunder to be performed
by Landlord have been satisfied or performed, except as set forth in said
certificate; (iii) that Tenant is not in default in the payment of Base Annual
Rent or any of the other obligations, required of Tenant hereunder; and (iv)
such other information as Landlord may reasonably request.
ARTICLE IV - BASE RENT AND ACCUPANCY COSTS
4.1 Base Annual Rent. Tenant covenants and agrees to pay to Landlord,
without deduction or offset, Base Annual Rent in the amount of $ 7.27 per square
foot of Leased Premises ("Base Annual Rent"), which is based on an annual rate
of $6,000.00, payable in lawful money of the United States of America in equal
monthly installments of $ 500.00, in advance, on or before the first day of each
calendar month during the term of this Lease. Landlord agrees that rent to
commence upon occupancy of Suite 36
For each year of the Lease Term subsequent to the first year, the Base
Annual Rent shall be adjusted and increased. The Base Annual Rent for each
subsequent year of the Lease Term shall be
<PAGE>
a sum equal to $ 7.27 per square foot plus an additional amount equal to that
portion of $ 7.27 per square foot which is the equivalent of the percentage
increase in the Consumer Price Index during a period commencing with that month
which is two months prior to the commencement of the original Term of this Lease
and that month which is two months prior to the commencement of the year of the
Term for which the Base Annual Rent is being determined. The total of these two
sums shall be the Base Annual Rent for that year of the Term. In no event shall
the Base Annual Rent for any Lease year be reduced below the Base Annual Rent
for any prior Lease year in the event of a decline in the Consumer Price Index.
The tgerm "Consumer Price Index" is defined as provided in the MISCELLANEOUS
provisions of this Lease. Notwithstanding the above, the annual increase shall
not be less than 3% nor greater than 6%.
4.2 Occupancy Costs:
A. tenant shall pay to Landlord in monthly installments on the
first day of each month, in advance, one-twelfth (1/12th) of the estimated
amount of Occupancy Costs for the appropriate Fiscal Year of the Term. Landlord
shall at the Commencement Date and the beginning of each Fiscal Year of the Term
compute and deliver to Tenant a bona fide estimate of Occupancy Costs relative
to the Premises for the appropriate Fiscal Year. The amount of Occupancy Costs
relative to the Premises shall be determined in accordance with Exhibit "C"
attached hereto. Year l - the occupancy costs monthly estimate is $523.00 ($7.60
psf), which Landlord agrees to commence upon occupancy of Suite 36.
B. Unless delayed by causes beyond Landlord's reasonable
control, Landlord shall deliver to Tenant within one hundred twenty (120) days
after the end of each Fiscal Year a written statement (the "Statement ") setting
out in reasonable detail the amount of occupancy costs for such Fiscal Year and
certified to be correct by an officer of Landlord. If the aggregate of monthly
installments of occupancy costs actually paid by Tenant to Landlord during such
Fiscal Year differs from the actual amount of occupancy costs relative to the
premises for such Fiscal Year, then Tenant shall pay or Landlord shall refund
the difference (as the case may be) without interest within thirty (30) days
after the date of deliver of the statement.
C. If Landlord and Tenant disagree on the accuracy of
occupancy costs as set forth in the Statement, Tenant shall nevertheless make
payment in accordance with any notice given by Landlord, but the disagreement
shall immediately be referred by Landlord for prompt decision by a mutually
acceptable certified public accountant, architect, or other professional
consultant who shall be deemed to be acting as an expert and not an arbitrator,
and a determinations signed by the selected expert shall be final and binding on
both Landlord and Tenant. Any adjustment to the amount of occupancy costs
required by reason of any such decision shall be made within fourteen (14) days
thereof, and the party required to make payment under such adjustment shall bear
all costs of the expert making such decision.
D. Neither party may claim that an adjustment should be made
to occupancy costs due to an error of computation or allocation or otherwise in
occupancy costs for a Fiscal Year, except by written notice delivered to the
other party within six (6) months after the date of delivery of the Statement.
<PAGE>
4.3 Sales and Use Tax and other Charges. Tenant shall pay to Landlord
each month, together with Base Rent a sum equal to all taxes imposed and/or
assessed upon the Rent paid or payable by Tenant to Landlord for the use and
occupancy of the premises Tenant shall also pay to Landlord, at the times and in
the manner provided in this Lease or, if not so provided, as reasonable required
by Landlord, all other amunts which are payable by Tenant to Landlord under this
Lease.
4.4 Payment to Landlord - General All amounts payable by Tenant to
Landlord under this Lease, whether Rent or any other payment, shall be payable
when due, without deduction or set-off, in U.S. Dollars at the address of the
Landlord as set forth in the beginning of this Lease, or to such other person or
at such other address as Landlord may from time to time designate in writing.
Tenant's obligation to pay Rent shall survive the expiration or earlier
termination of this Lease. Landlord shall have all of the rights in the event of
a default in any payments due hereunder as Landlord would have in the event of a
default in the payment of Rent.
ARTICLE V- SECURITY DEPOSIT
5.1 Amount of Deposit. Tenant simultaneously with the execution of this
Lease has deposited with the Landlord the sum of Two Thousand Two Hundred Thirty
Five & 00/100 Dollars ($ 2,235.00 ), receipt of which is hereby acknowledged by
Landlord. Said deposit shall be held by Landlord, without liability for
interest, and may be commingled with other funds of Landlord, as security for
the faithful performance by Tenant of all the terms, covenants, and conditions
of this Lease by said Tenant to be kept and performed during the term hereof.
5.2 Use and Return of Deposit. In the event of the of the failure of
Tenant to keep and perform any of the terms, covenants and conditions of this
Lease to be kept and performed by Tenant, then the Landlord, at its option, may
appropriate and apply said deposit, or so much thereof as may be necessary, to
compensate the Landlord for all loss or damage sustained or suffered by the
Landlord due to such breach on the part of Tenant, Should the entire deposit, or
any portion thereof, be appropriated and due and payable by Tenant hereunder,
then Tenant shall, upon the demand of Landlord, forthwith remit to Landlord a
sufficient amount to restore said security to the original sum deposited, and
Tenant's failure to do so within five (5) days after receipt of such demand
shall constitute a breach of this Lease. Should Tenant comply with all of said
terms, covenants and conditions and promptly pay all of the rental herein
provided for as it falls due, and all other sums payable by Tenant to Landlord
hereunder, the said deposit shall be returned in full to Tenant at the end of
the Term of this lease, or upon the earlier termination hereof. Notwithstanding
the above, the security deposit shall be applied to the first and last two month
rent.
5.3 Transfer of Deposit Landlord may deliver the deposit to the
purchaser of Landlord's interest in the Leased Premises, in the event that such
interest be sold, and thereupon Landlord shall be discharged from any further
liability with respect to such deposit and the purchaser shall hold such deposit
subject to the terms and conditions of this Lease.
ARTICLE VI - USE OF PREMISES
6.1 Use. The Premises shall be used and occupied only as business
offices for the current business of Tenant or for such other purposes as
<PAGE>
Landlord may specifically authorize in writing. Tenant's current business is
Corporate Business Offices - (Distribution Co.) Tenant acknowledges that this is
a non-exclusive use and occupancy.
6.2 Compliance With Laws. The Premises shall be used and occupied in a
safe, careful and proper manner so as not to violate any present or future
governmental laws, regulations or orders. If improvements to the Premises are
necessary to comply with any of the foregoing or with the requirements of
insurance carriers, Tenant shall pay the entire cost thereof.
6.3 Abandonment. Tenant shall not vacate or abandon the Premises at any
time during the Term without Landlord's written consent.
6.4 Nuisance. Tenant shall not cause or maintain any nuisance in or
about the Premises, and at its expense shall keep the Premises free of debris,
rodents, vermin and anything of a dangerous noxious, or offensive nature or
which could create a fire hazard (through undue load on electrical circuits or
otherwise) or undue vibration, heat or noise.
ARTICLE VII - SERVICES, MAINTENANCE, REPAIR
AND ALTERATIONS BY LANDLORD
7.1 Operation of Building. During the term, Landlord shall operate and
maintain the Building and, subject to payment by Tenant of Rent, shall provide
the services set out in Sections 7.2 and 7.3.
7.2 Services to Premises. Landlord shall provide in the Premises:
A. A/C, ventilation and cooling as required for the comfortable use and
occupancy of the premises during normal business hours:
B. Janitorial services, including window washing, as reasonable required
to keep the Premises in a clean and wholesome condition, provided that
Tenant shall leave the Premises in a readsonably tidy condition at the
end of each business day.
C. Electric power for normal lighting and small business office equipment
(but not equipment using amounts of power disproportionate to that
used by other tenants in the Building).
D. Replacement of Building standard fluorescent tubes, light bulbs and
ballasts as required from time to time as a result of normal usage,
and
E. Maintenance, repair and replacement as set forth in Section 7.4.
7.3 Building Services. Landlord shall provide in the Building:
A. Hot and cold running water and necessary supplies in washrooms
sufficient for the normal use thereof by occupants in the Building:
<PAGE>
B. Access to and egress from the Premises, including elevator service to
each floor of the building.
C. Heat, ventilation, cooling, electric power, running water, and
janitorial sevice in those areas of the Building from time to time
designated by Landlord for use during normal business hours by Tenant
in common with wll tenants and other persons in the Building but under
the exclusive control of the Landlord.
D. A general directory board on which Tenant shall be entitled to have
its name shown, provided that Landlord shall have exclusive control
thereof and of the space thereon to be allocated to each tenant: and
E. Maintenance, repair and replacement as set forth in Section 7.4.
7.4 Maintenance, Repair and Replacement. Landlord shall operate,
maintain, repair and replace the systems, facilities and equipment necessary for
the proper operation of the Building and for provision of Landlord's services
under Sections 7.2 and 7.3 (except as such may be installed by or be the
property of the Tenant), and shall be responsible for the shall maintain and
repair the foundations structure and roof of the Building and repair damage to
the Building which Landlord is obligated to insure against under Article X,
provided that:
A. If all or part of such systems, facilities and equipment are
destroyed, damaged or impaired, Landlord shall have a reasonable time
in which to complete the necessary repair or replacement, and during
that time shall be required only to maintain such services as are
reasonable possible under the circumstances:
B. Landlord may temporarily discontinue such services or any of them at
such times as may be necessary due to causes beyond the reasonable
control of Landlord:
C. Landlord shall use reasonable diligence in carrying out its
obligations under this Section 7.4, but shall not be liable under any
circumstances for any consequential damage to any person or property
for any failure to do so:
D. A reduction or discontinuance of such services, if any, under this
Section 7.4(A) or (B) shall be not construed as an eviction of Tenant
or (except as specifically provided in this Lease) release Tenant from
any obligation of Tenant under this Lease, and
E. Nothing contained herein shall be in derogation of the provisions of
Article XVII regarding Casualty Damage.
<PAGE>
7.5 Additional Services.
A. Tenant shall not, without Landlord's written consent, install in the
Premises equipment (including without limitation, telephone equipment)
which generates sufficient heat to affect the the temperature
otherwise maintained in the Premises by the air conditioning system as
normally operated. Landlord may install supplementary air conditioning
units, facilities or services in the Premises, or modify the Premises
or the Building's air conditioning system, as may in Landlord's
reasonable opinion be required to maintain proper temperature levels,
and Tenant shall pay Landlord, within ten (10) days of any invoice,
for the cost thereof, including installation, operation and
maintenance expense.
B. If the Landlord shall from time to time reasonably determine that the
use of electricity or any other utility or service in the Premises is
disproportionate to the use of the other tenants, Landlord may
separately charge Tenant for the excess costs attributable to such
disproportionate use. At Landlord's request, Tenant shall install and
maintain metering devices for checking the use of any such utility or
service in the Premises.
C. Change or alter the location of those areas of the Building from time
to time designated by Landlord for use during normal business hours by
Tenant in common with all tenants and other persons in the Building
but under the exclusive control of Landlord, provided that in doing so
Landlord shall not unreasonably disturb or interfere with Tenant's use
of the premises and operation of its business any more than is
reasonably necessary under the circumstances and shall repair any
damage to the Premises caused thereby.
As of the date of execution of this Lease, the Tenant acknowledges that
the Landlord's work has been fully completed and is accessible to the Tenant
except for such other work that will be completed as specified in Exhibit "F"
attached hereto and according to the terms and conditions thereof.
7.7 Acceptance of Premises The Tenant hereby accepts the Demised
premises and Common Areas "as is" and without warranty or representation by the
Landlord as to any matter and acknowledges that it has had a full and fair
opportunity to inspect the property.Tenant further acknowledges that the
Premises as constructed are satisfactory for Tenant's business use and that the
Landlord will not be "building out" the space in any manner except as may b
specifically provided in Exhibit "F"
7.8 Access by Landlord. Tenant shall permit Landlord to enter the
premises outside normal business hours, and during normal business hours where
such will not unreasonably disturb or interfere with Tenant's use of the
Premises and operation of its business, to examine, inspect, and show the
Premises to persons wishing to lease them, to provide services, to make repairs,
replacements, changes or alterations as set out in this Lease, and to take such
steps as Landlord may deem necessary for the safety, improvement or reservation
of the Premises or the Building, Landlord shall wheneverpossible consult with or
give reasonable notice to Tenant prior to such entry, but no such entry shall
constitute an eviction or entitle Tenant to any abatement of Rent.
<PAGE>
7.9 Energy Conservation and Services Policies. Landlord shall be deemed
to have observed and performed to terms and conditions to be performed by
Landlord under this Lease relating to the provision of utilities and services,
If in so doing it acts in accordance with a directive, policy or request of a
governmental authority having jurisdiction serving the public interest in the
fields of energy conservation or services.
ARTICLE VIII - MAINTENANCE, REPAIR, ALTERATIONS AND
IMPROVEMENTS BY TENANT
8.1 Condition of Premises. Except to the extent that Landlord is
specifically responsible therefor under this Lease, Tenant shall maintain the
Premises and all improvements therein in good order and condition, including:
A. Repainting and redecorating the Premises and cleaning window coverings
(if applicable) and carpets at reasonable intervals as needed: and
B. Making repairs, replacement and alterations as needed, including those
necessary to comply with the requirements of any governmental
authority having jurisdiction over the Premises.
8.2 Failure to Maintain Premises. If Tenant fails to perform any
obligation under Section 8.1, then on not less than ten (10) days notice to
Tenant, Landlord may enter the Premises and perform such obligation without
liability to Tenant for any loss or damage to Tenant incurred thereby, and
Tenant shall pay Landlord for the cost thereof, plus twenty percent (20%) of
such cost for overhead and supervision, within ten (10) days of receipt of
Landlord's invoice therefor.
8.3 Alterations by Tenant Tenant may from time to time at Tenant's own
expense make nonstructural, interior changes, additions and improvements in the
Premises to better adapt the same to its business, jprovided that any such
change, addition or improvement shall;
A. Comply with the frequirement of any governmental authority having
jurisdiction;
B. Be made only with the prior written consent of Landlord:
C. Equal or exceed the then current standard for the Building: and
D. Be carried out only by persons selected by Tenant and approved in
writing by Landlord in advance, such persons shall, if required by
Landlord, deliver to Landlord before commencement of the work,
performance and payment bonds as well as proof of worker's
compensation and public liability and property damage insurance
coverage, with Landlord named as an additional insured, in amounts,
with companies, and in form reasonably satisfactory to Landlord, which
shall remain in effect during the entire period in which the work will
be carried out.
<PAGE>
E. Further provisions relating to Tenant's Work shall be as provided on
Exhibit "G" attached hereto.
Any increase in property taxes or fire or casualty insurance premiums
for the building attributable to such change, addition or improvement
shall be borne solely by Tenant.
8.4 Trade Fixtures and Personal Property Tenant may install in the
Premises its usual trade fixtures and personal property in a proper manner,
provided that no such installation shall interfere with or damage the mechanical
or electrical systems or the structure of the Building. Tenant is not then in ?
hereunder, trade fixtures and personal property installed in the Premises by
Tenant may be removed from the Premises:
A. From time to time in the ordinary course of Tenant's business or in
the course of reconstruction, renovation, or alteration of the
Premises by Tenant: or
B. During a reasonable period prior to the expiration of the Term or the
Renewal Term, if exercised:
provided that Tenant promptly repairs, at its own expense, any damage to the
Premises or Building resulting from such installation or removal
8.5 Mechanics' Liens Tenant shall pay before delinquency all costs for
work done or caused to be done by Tenant in the Premises which could result in
any lien or encumbrance on Landlord's interest in the land or Building or any
part hereof. Tenant shall keep the title to the land or Building and every part
her of free and clear of any lien or encumbrance in respect of such work, and
shall indemnify and hold harmless Landlord against any claim, loss, cost,
demand, and legal or other expense, whether in respect of any lien, or
otherwise, arising out of the supply of materials services or labor for such
work, Tenant shall immediately notify Landlord of any such lien, claim of lien
or other action of which it has or reasonably should have knowledge and which
affects the title to the land or Building or any part thereof, and shall cause
the same to be satisfied or bonded off within five (5) days (or such additional
time as Landlord may consent to in writing). failing which Landlord may take
such action as Landlord Deems necessary to remove the same and the entire cost
thereof shall be immediately due and payable by Tenant to Landlord. TENANT SHALL
NOT HAVE ANY AUTHORITY TO CREATE ANY LIENS FOR LABOR OR MATERIALS ON THE
LANDLORD'S INTEREST IN THE PREMISES OR THE BUILDING AND ALL PERSONS CONTRACTING
WITH THE TENANT FOR THE DESTRUCTION OR REMOVAL OR ANY FACILITIES OR OTHER
IMPROVEMENTS OR FOR THE ERECTION, INSTALLATION, ALTERATION OR REPAIR OF ANY
FACILITIES OR OTHER IMPROVEMENTS, ON OR ABOUT THE PREMISES, AND ALL MATERIALMEN,
CONTGRACTORS, MECHANICS AND LABORERS ARE HEREBY CHARGED WITH NOTICE THAT THEY
MUST LOOK ONLY TO THE TENANT AND TO THE TENANT'S INTEREST IN THE PREMISES TO
SECURE THE PAYMENT OF ANY BILL FOR WORK DONE OR MATERIAL FURNISHED AT THE
REQUEST OR INSTRUCTION OF TENANT.
<PAGE>
8.6 Signs. Any sign, lettering or design of Tenant shall be at Tenant's
expense and subject to approval by Landlord, and shall conform to the uniform
pattern of identification signs for tenants in the Building as prescribed by
Landlord. Tenant shall not inscribe or affix any sign, lettering or design in
the Premises or Building which is visible from the exterior of the Building.
Tenant shall not affix any sign, lettering, design or other hanging or
decoration outside of the Premises.
ARTICLE IX - TAXES
9.1 Landlord's Taxes Landlord shall pay before delinquency every real
estate tax, assessment, license fee and other charge, excepting Tenant's Taxes
under Section 9.2, which is imposed, levied, assessed or charged by any
governmental authority having jurisdiction and which is payable on account of
the land or Building.
9.2 Tenant's s Taxes . Tenant shall pay before delinquency and as
otherwise set forth in this Lease, every tax, assessment, license fee, excise
and other charge, however described, which is imposed, levied, assessed or
charged by any governmental authority having jurisdiction and which is payable
in respect of this Lease including, but not limited to:
A. Operations at, occupancy of , or conduct of business in or from the
Premises by or with permission of Tenant:
B. Fixtures or personal property in the Premises which do not belong to
the Landlord, and
C. Rent paid or payable by Tenant to Landlord for the Premises or for the
use and occupancy of all or any part thereof.
9.3 Right to Contest. With the exception of Sales and Use Taxes
pursuant to Chapter 212, Florida Statues, Landlord and Tenant shall each have
the right to contest in good faith the validity or amount of any tax,
assessment, license fee, excise fee and other charge which it is responsible to
pay under this Article IX, provided that no contest by Tenant may involve the
possibility of forfeiture, sale or disturbance of Landlord's interest in the
Premises and that upon the final determination of any contest by Tenant, Tenant
shall immediately pay and satisfy the amount found to be due, together with any
costs, penalties, and interest.
ARTICLE X - INSURANCE
10.1 Landlord's Insurance. During the Term, Landlord shall maintain
(subject to Tenant paying for same in its "Occupancy Costs" under Article 4.2)
liability insurance, fire insurance with extended coverage, boiler and pressure
vessel insurance, and other insurance on the Building and all property and
interest of Landlord in the Building, including Rent interruption Insurance on
behalf of Tenant, with coverage and in amounts not less than those which are
from time to time acceptable to a prudent owner in the area in which the
Building is located, Policies for such insurance shall waive, to the extent
available from Landlord's carrier (s), any right of subrogation against Tenant.
<PAGE>
10.2 Tenant's Insurance. During the erm, Tenant shall maintain at its
own expense:
A. Fire insurance with extended coverage and water damage insurance in
amounts sufficient to fully cover Tenant's improvements and all
property in the Premises which is not owned by Landlord, and
B. Liability insurance, with Landlord named as an additional insured,
against claims for death, personal injury and property damage in or
about he Premises, in amounts which are from time to time acceptable
to a prudent Tenant in the community in which the Building is located,
but not less than one Million Dollars ($1,000.000.00) for death,
illness or injury to one or more persons, and Five Hundred Thousand
Dollars ($500.00.00) for property damage, in respect of each
occurrence.
All policies shall (i) be from insurance carriers licensed to do business in the
State of Florida; (ii) contain an undertaking by the insurers to notify the
Landlord and Landlord's mortgagees in writing not less than thirty (30) days
prior to any material change, cancellation or termination thereof; and, (iii)
nam Landlord and /or any designee (s) of Landlord, as their interest may appear,
as additional insured (s). Tenant shall furnish Landlord with such insurance
policies or at Landlord's option, supply certificates thereof prior to taking
possession of the Demised Premises.
OR ARTICLE XI - INJURY TO PERSON PROPERTY
11.1 Indemnity by Tenant. Tenant shall indemnify and hold harmless
Landlord from and against every demand, claim, cause of action, judgment and
expense, and all loss and damage arising from:
A. Any injury or damage to the personal property of Tenant, any other
tenant in the Building or to any other person rightfully in the
Building, where the injury or damage is caused by negligence or
misconduct of Tenant, its agents, servants or employees, or of any
other person entering upon the Premises under express or implied
invitation of Tenant, or where the injury of damage results from the
violation of any of the foregoing laws, ordinances or governmental
orders of any kind, or of the provisions of this Lease.
B. Any loss or damage, however, caused , to books, records, files, money,
securities, negotiable instruments or papers in or about the Premises.
C. Any loss or damage resulting from interference with or obstruction of
deliveries to or from the Premises: and
D. Any injury or damage not specified above to the person or property of
Tenant. its agents, servants or employees, or any other person
entering upon the Premises under express or implied invitation of
Tenant, where the injury or damage is caused by any reason other than
the affirmative acts of negligence or misconduct of Landlord, its
agents, servants, or employees.
<PAGE>
ARTICLE XII - ASSIGNMENTS AND SUBLETTING
12.1 Assignment of Sublease by Tenant Tenant shall not assign or
mortgage this Lease or any right hereunder interest herein, and Tenant shall not
sublet the Premises in whole or in part of suffer any other person to occupy the
Premises, or any portion thereof, without the prior written consent of Landlord,
and any such assignment, mortgage or subletting without such consent shall be
void and shall, at the option of Landlord, be deemed a breach of this Lease. If
Tenant is a corporation and if any transfer, sale, pledge or other disposition
of the majority of the outstanding capital stock of Tenant shall occur, or if
the power to vote the majority of the outstanding capital stock be changed, then
Tenant shall so notify Landlord and Landlord shall have the right, at its
option, to treat any such transfer, sale, pledge or other disposition as an
assignment under this Article and subject to all the restrictions contained
herein.
12.2 First offer to Landlord. If Tenant requests Landlord's consent to
an assignment of the whole or part of this Lease or to a subletting of the whole
or any part of the Premises, the Tenant shall submit to the Landlord a copy of
the proposed assignment or subletting agreement, the sum of Two Hundred Dollars
($200.00) as a deposit on account of Landlord's costs in processing such
request, the name of the proposed assignee or subtenant and such information as
to the nature of its business and its financial responsibility and standing as
Landlord may reasonably require. Upon the receipt of such request and
information from Tenant, Landlord shall have the right exercisable in writing
within seven (7) days after such receipt to cancel terminate this lease if the
request is to assign this Lease or to sublet all of the Premises or, if the
request is to sublet a portion of the Premises only, to cancel and terminate
this Lease with respect to such portion, in each case as of the date set forth
in Landlord's notice of exercise of such right, which date shall be neither less
than thirty (30) nor more than sixty (60) days following the service of such
notice by Landlord.
If Landlord shall exercise such right, the Tenant shall surrender
possession of the entire Premises or the portion which is the subject of
such right, as the case may be , on the date set forth in such notice in
accordance with the provisions of this Lease relating to surrender of the
Premises at the expiration of the Term. If this Lease shall be cancelled as
to a portion of the Premises only, the rent payable by Tenant under this
Lease shall be abated proportionately.
If Landlord shall not exercise the fright to cancel this lease as above
provided after the receipt of Tenant's written request. Landlord's consent
to such request shall not be unreasonable withheld or delayed, provided
such consent will not subject the Landlord to any liability to such
assignee or to any other tenant, and provided such assignment or sublease
shall maintain the standard of the building as determined solely by
Landlord.
It is a condition of this Article XII that any such assignee or subtenant
shall assume all obligations on the part of the Tenant to be performed
pursuant to this Lease and shall execute an assumption agreement in form
and substance reasonably satisfactory to Landlord. A duplicate original of
any such assumption agreement and duplicate originals of all assignments
and sublease documents shall be delivered to Landlord within five (5) days
of their execution.
<PAGE>
12.3 Limitation: Except as specifically provided in this Article XII,
Tenant shall not assign or transfer this Lease or any interest therein or in any
way part with possession of all or any part of the Premises, or permit all or
any part of the Premises to be used or occupied by any other person. Any actual
or purported assignment transfer, subletting or mortgage, except as specifically
provided herein shall, at Landlord's option, be null and void and of no force
and effect, and be deemed a breach of this lease. Landlord shall not be required
to consent to an assignment of this Lease or a sublease of all or part of the
Premises by Tenant to any Tenant in a Building in the same city in which the
Building is located and which is owned or managed by Landlord or any affiliate
of Landlord. The rights and interests of Tenant under this Lease shall not be
assignable by operation of law without Landlord's written consent, which consent
shall not be unreasonably withheld.
12.4 Assignment by Landlord. Landlord shall have the right to transfer,
assign and convey, in whole or in part, the Building and any and all of its
rights under this Lease, and in the event Landlord assigns its rights under this
Lease, Landlord shall thereby be released from any further obligations
hereunder, and Tenant agrees to look solely to such successor in interest of the
Landlord for performance of such obligations.
12.5 Primary Liability. Tenant shall, despite any permitted assignment
or sublease, remain directly and primarily liable for the performance of all of
the covenants, duties and obligations of Tenant hereunder and Landlord shall be
permitted to enforce the provisions of this Lease against Tenant or any assignee
or subtenant without demand upon or proceeding in any way against any other
person.
12.6 No Waiver Consent by Landlord to a particular assignment or
sublease shall not be deemed a consent to any other or subsequent transaction.
If this Lease is assigned or if the Premises are subleasedin violation of this
Article XII, then Landlord may nevertheless collect Rent from the assignee or
subtenants and apply the net amount collected to the rent payable hereunder, but
no such transaction or collection of Rent or application thereof by Landlord
shall be deemed a waiver of any provision hereof or a release of Tenant from
performance by Tenant if its obligations hereunder.
ARTICLE XIII - SURRENDER
13.1 Possession. Upon the expiration of the Term Tenant shall
immediately quit and surrender possession of the Premises in substantially the
condition on which Tenant is required to maintain the Premises excepting only
reasonable wear and tear. Upon such surrender, all right, title and interest of
Tenant in the Premises shall cease.
13.2 Trade Fixtures, Personal Property and Improvements. After the
expiration or other termination of the Term, and any Renewal Term if properly
exercised by Tenant, all of Tenant's trade fixtures, personal property and
improvements remaining in the Premises shall be deemed conclusively to have been
abandoned by Tenant and maybe appropriated, sold, destroyed or otherwise
disposed of by Landlord without notice or obligation to compensate Tenant or to
account therefore, and Tenant shall pay to Landlord on written demand all costs
incurred by Landlord in connection therewith.
13.3 Merger The voluntary or other surrender of this Lease by Tenant
or the cancellation of this Lease by mutual agreement of Tenant and Landlord
<PAGE>
shall not work a merger, and shall only at Landlord's option terminate all or
any subleases and subtenancies or operate as an assignment to Landlord of all or
any subleases or subtenancies. Landlord's option hereunder shall be exercised by
notice to Tenant and all known sublessees or subtenants in the Premises or any
part there of.
13.4 Payments After Termination. No payments of money by Tenant to
Landlord after the expiration or other termination of the Term or after the
giving of any notice (other than a demand for payment of money) by Landlord to
Tenant, shall reinstate, continue or extend the Term, or make ineffective any
notice given to Tenant prior to the payment of such money. After the service of
notice or the commencement of a suit, or after final judgment granting Landlord
possession of the Premises, Landlord may receive and collect any sums of Rent or
other charges due under the Lease, and the payment thereof shall not make
ineffective any notice, or in any manner affect any pending suit or any judgment
theretofore obtained.
ARTICLE XIV -HOLDING OVER
14.1 Month-To-Month Tenancy If with Landlord's written consent, Tenant
remains in possession of the Premises after the expiration or other termination
of the Term, Tenant shall be deemed to be occupying the Premises on a
month-to-month tenancy only, at a monthly rental equal to the Rent and other
charges as determined in accordance with Article IV or such other rental as is
stated in such written consent and such month -to - month tenancy may be
terminated by Landlord or Tenant on the last day of any calendar month by
delivery of a at least thirty (30) days advance notice of termination to the
other.
14.2 Tenancy at Sufferance. If, without Landlord's written consent,
tenant remains in possession of the Premises after the expiration or other
termination of the Term, Tenant shall be deemed to be occupying the Premises
upon a tenancy at sufferance only, at a monthly rental equal to two (2) times
the Rent and other charges as determined in accordance with Article IV. Such
tenancy at sufferance may be terminated by Landlord at any time by notice of
termination to Tenant. This tenancy may be terminated by Tenant on the last day
of any calendar month by providing at least thirty (30) days advance notice of
termination to Landlord.
14.3 General Any month - to - month tenancy or tenancy at sufferance
hereunder shall be subject to all other terms and conditions of this Lease
except any right of renewal and nothing contained in this Article XIV shall be
construed to limit or impair any of Landlord's rights of re-enry or eviction or
constitute a waiver thereof.
ARTICLE XV - RULES AND REGULATIONS
15.1 Purpose. The Rules and Regulations in Exhibit "D" have been
adopted by Landlord for the safety, benefit and convenience of all tenants and
other persons in the Building.
15.2 Observance Tenant shall at all time comply with, and shall cause
its employees, agents, licensees and invitees to comply with, the Rules and
Regulations from time to time in effect.
<PAGE>
15.3 Modification Landlord may from time to time, for the purposes set
forth in Section 15.1, amend, delete from or add to the Rules and Regulations,
provided that such modifications:
A. Shall not be repugnant to any other provision of this Lease.
B. Shall be reasonable and have general application to all tenants in the
Building and
C. Shall be effective against Tenant only upon delivery of a copy thereof
to Tenant at the Premises.
15.4 Non-Compliance. Landlord shall use its best efforts to secure
compliance by all tenants and other persons with the Rules and Regulations from
time to time in effect, but shall not be responsible to Tenant for failure of
any person to comply with such Rules and Regulations.
ARTICLE XVI - EMINENT DOMAIN
16.1 Taking of Premises If during the Term all of the Premises shall be
taken for any public use under any statute or by right of eminent domain, or
purchased under threat of such taking, this Lease shall automatically terminate
on the date on which the condemning authority takes possession of the Premises
(hereinafter called the "date of such taking")
16.2 Partial Taking of Building. If during the term only part of the
Building is taken or purchased as set out in Section 16.1, then;
A. If in the reasonable opinion of Landlord substantial alteration or
reconstruction of the Building is necessary or desirable as a result
thereof, whether or not the Premises are or may be affected, Landlord
shall have the right to terminate this Lease by giving the Tenant at
least thirty (30) days written notice of such termination: and
B. If more than one-third (1/3) of the number of square feet in the
Premises is included in such taking or purchase, Landlord and Tenant
shall each have the right to terminate this Lease by giving the other
at least thirty (30) days written notice thereof.
If either party exercises its right of termination herunder, this Lease shall
terminate on the date in the notice, provided, however, that no termination
pursuant to notice hereunder may occur later than sixty (60) days after the date
of such taking.
16.3 Surrender On any such date of termination under Section 16.1 or
16.2, Tenant shall immediately surrender to Landlord the Premises and all
interests therein under this Lease. Landlord may re-enter and take possession of
the Premises and remove Tenant therefrom, and the Rent shall abate on the date
of termination, except that if the date of such taking differs from the date of
termination, Rent shall abate on the former date in respect of the portion
taken, After such termination, and on notice from Landlord stating the Rent then
owing, Tenant shall forthwith pay Landlord such Rent.
<PAGE>
16. 4 Partial Taking of Premises. If any portion of the Premises (but
less than the whole thereof) is taken, and no rights of termination herein
conferred are timely exercised, the Term of this Lease shall expire with respect
tot he portion so taken on the date of such taking. In such event the Rent
payable hereunder with respect to such portion so taken shall abate on such
date, and the rent thereafter payable with respect tot he remainder not so taken
shall be adjusted pro rata by Landlord in order to account for the resulting
reduction in the number of square feet in the Premises.
16.5 Awards. Upon the occurrence of any timing or purchase under this
Article XVI, Landlord shall be entitled to receive and retain the entire award
or consideration for the affected lands and improvements including leasehold
improvements, and Tenant shall not have nor advance any claim against Landlord
for the value of its property or its leasehold estate or the unexpired Term of
the Lease, or for costs of removal or relocations, or business interruption
expenses or any other damages arising out of such taking or purchase. Nothing
herein shall give Landlord any interest in or preclude Tenant from seeking and
recovering on its own account from the condemning authority any award or
compensation attributable to the taking or purchase of Tenant's improvements,
chattels or trade fixtures, or the removal or relocation of its business and
effects, or the interruption of its business. If any such award made or
compensation paid to either party specifically includes an award or amount for
the other, the party first receiving the same shall promptly account therefor to
the other.
ARTICLE XVII - DAMAGE BY FIRE OR OTHER CASUALTY
17.1 Limited Damage to Premises. If all or part of the Premises are
rendered untenantable by damage from fire or other casualty which, in the
reasonable opinion of an architect acceptable to Landlord, can be substantially
repaired under applicable laws and governmental regulations within one hundred
twenty (120) days from the date of such casualty (employing normal construction
methods without overtime or other premium, Landlord shall forthwith at its own
expense repair such damage other than damage to improvements, furniture,
chattels or trade fixtures which do not belong to Landlord or improvements which
were constructed at Tenant's expense.
17.2 Major Damage to Premises. If all or part of the Premises are
rendered untenantable by damage from fire or other casualty which, in the
reasonable opinion of an architect acceptable to Landlord. cannot be
substantially repaired under applicable laws and governmental regulations within
120 days from the date of such casualty (employing normal construction methods
without overtime or other premium), then Landord may elect to terminate this
Lease as of the date of such casualty by written notice delivered to the other
not more than ten (10) days after receipt of such architect's opinion, failing
which Landlord shall forthwith at its own expense repair such damage other than
damage to improvements, furniture, chattels or trade fixtures which do not
belong to Landlord or improvements which were constructed at Tenant's expense.
17.3 Abatement. If Landlord is required to repair damages to all or
part of the Premises under Sections 17.1 or 17.2 the Rent, payable by Tenant
hereunder shall be proportionately reduced to the extent that the Premises are
thereby rendered unusable by Tenant in its business, from the date of such
casualty until five (5) days after completion by Landlord of the repairs to the
Premises (or the part thereof rendered untenantable) or until Tenant again uses
the Premises (or the part thereof rendered untenantable) in its business,
whichever first occurs. Any such abatement of Rent to
<PAGE>
Tenant is expressly conditioned upon Landlord collecting the amount of any such
abatement as part of the proceeds paid to Landlord under a Rent Interruption
Insurance Policy.
17.4 Major Damage to Building. If all or a substantial part (whether or
nort including the Premises) of the Building is rendered untenantable by damage
from fire or other casualty to such a material extent that in the opinion of
Landlord the Building must be totally or partially demolished, whether or not to
be reconstructed in whole or in part, Landlord may elect to terminate this Lease
as of the date of such casualty (or on, the dae of notice if the Premises are
unaffected by such casualty) by written notice delivered to Tenant not more than
sixty (60) days after the date of such casualty.
17.5 Limitation of Landlord's Liability. Except as specifically
provided in this Article XVII there shall be no reduction of Rent and Landlord
shall have no liability to Tenant by reason of any injury to or interference
with Tenant's business or property arising from fire or other casualty, however
caused, or from the making of any repairs resulting therefrom in or to any
portion of the Building or the Premises. Notwithstanding anything contained
herein, Rent payable by Tenant hereunder shall not be abated if the damage is
caused by any act or omission of Tenant, its agents, servants, employees or any
other person entering upon the Premises under the express or implied invitation
of Tenant.
ARTICLE XVIII - TRANSFERS BY LANDLORD
18.1 Sale, Conveyance and Assignment. Nothing in this Lease shall
restrict the right of Landlord to sell, convey, assign, mortgage or otherwise
deal with the Building, subject only to the rights of Tenant under this Lease.
18.2 Effect of Sale, Conveyance or Assignment. A sale, conveyance or
assignment of the Building shall operate to release Landlord from liability from
and after the effective date thereof under all of the covenants, terms and
conditions of this Lease, express or implied, except as such may relate to the
period prior to such effective date, and Tenant shall thereafter look solely to
Landlord's successor in interest in and to this Lease, This Lease shall not be
affected by any such sale, conveyance or assignment, and Tenant shall attorn to
Landlord's successor in interest thereunder.
18.3 Subordination. This lease is and shall be subject and subordinate
in all respects to any and all mortgages and deeds of trust now or hereafter
placed on the building or land, and to all renewals, modifications,
consolidations, replacements and extensions thereof.
18.4 Attornment. If the interest of Landlord is transferred to any
person or entity (therein called "Purchaser") by reason of foreclosure or other
proceedings for enforcement of any such mortgage or deed of trust, or by
delivery of a deed in lieu of such foreclosure or other proceedings. Tenant
shall immediately and automatically attorn to Purchaser.
18.5 Intentionally Deleted.
<PAGE>
18.6 Effect of Attornment. Upon attornment under Section 18.4, this
Lease shall continue in, full force and effect as a direct Lease between
Purchaser and Tenant, upon all of the same terms, conditions and covenants as
are set forth in the Lease except that, after such attornment, Purchaser shall
not be:
A. Liable for any act or omission of Landlord, or
B. Subject to any off-sets or defenses which Tenant might have against
Landlord; or
C. Bound by any prepayment by Tenant of more than one month's installment
of Rent. or by any previous modification shall have been approved in
writing by Purchaser or any predecessor in interest except Landlord.
18.7 Execution of Instruments. The subordination and attornment
provisions of this Article XVIII shall be self-operating and no further
instrument shall be required. Nevertheless Tenant, on request by and without
cost to Landlord or any successor in interest, shall execute and deliver any and
all instruments further evidencing such subordination and (where applicable
hereunder) attornment.
ARTICLE XIX - NOTICES, ACKNOWLEDGEMENTS,
AUTHORITIES FOR ACTION
19.1 Notices. Any notice from one party to the other hereunder shall be
in writing and shall be deemed duly served inf delivered to the party being
served or if mailed by registered or certified mail, in either case, addressed
to Tenant at the Premises (whether or not Tenant has departed from, vacated or
abandoned the same) or to Landlord at the place from time to time established
for the payment of Rent. Any notice shall be deemed to have been given at the
time of delivery if the day of such delivery is not a Saturday, Sunday or
statutory holiday. If the day of delivery is a Saturday, Sunday or statutory
holiday, such notice shall be deemed to have been given on the next following
day that is not a Saturday, Sunday or statutory holiday. If such notice is
mailed, notice shall be deemed to have been given five (5) days after the date
of mailing thereof, Either party shall have the right to designate by notice, in
the manner above set forth, a different address to which notices are to be
mailed.
19.2 Acknowledgments. Each of the parties hereto shall at any time and
from time to time not less than twenty (20) days prior from other execute,
acknowledge and deliver a written statement certifying that:
A. This Lease is in full force and effect, subject only to such
modifications (if any) as may be set out herein;
B. tenant is inpossession of the Premises and paying Rent as provided in
this lease;
C. The dates (if any) to which Rent is paid in advance;
<PAGE>
D. That there are not, to such party's knowledge, any uncured defaults on
the part of the other party hereunder, or specifying such defaults if
any are being claimed, and
E. Such other information as Landlord may reasonably request.
Any such statement may be relied upon by any prospective transferee or
encumbrancer of all or any portion of the Building, or any assignee of any such
persons. If Tenant fails to timely deliver such statement, Tenant shall be
deemed to have acknowledged that this Lease is in full force and effect, without
modification except as may be represented by Landlord, and that there are no
uncured defaults in Landlord's performance.
19.3 Authorities for Action. Landlord may act in any matter provided
for herein by its Property Manager, any of its officers or agents, and any other
person who shall from time to time be designated by Landlord by notice to
Tenant. Tenant shall designate in writing one or more persons to act on its
behalf in any matter provided for herein and may from time to time change, by
notice to Landlord, such designation. In the absence of any such designation,
the person or persons executing this Lease for Tenant shall be deemed to be
authorized to act on behalf of Tenant in any matter provided herein.
ARTICLE XX -= DEFAULT
20.1 Interest and Costs. Tenant shall pay monthly to Landlord interest
at a rate equal to the lesser of eighteen percent (18%) per annum or the maximum
rate permitted by applicable law, on all Rent and other charges required to be
paid hereunder from the due date for payment thereof until the same is fully
paid and satisfied. Tenant shall indemnify Landlord against all costs and
charges (including legal fees) lawfully and reasonably incurred in enforcing
payment thereof, and in obtaining possession of the Premises after default of
Tenant or upon expiration or earlier termination of the term of this Lease, or
in enforcing any covenant, provision or agreement of Tenant herein contained.
20.2 Right of Landlord to Perform Covenants. All covenants and
agreements to be performed by Tenant under any of the terms of this Lease shall
be performed by Tenant, at Tenant's sole cost and expense, and without an
abatement of Rent. If Tenant shall fail to perform any act on its part to be
performed hereunder, and such failure shall continue for ten (10) days after
notice thereof from Landlord, Landlord may (but shall not be obligated so to do)
perform such act without waiving or releasing Tenant from any of its obligations
relative thereto. All sums paid or costs incurred by Landlord in so performing
such acts under this Section 20.2, together with interest thereon at the rate
set out in Section 20.1 from the date each such payment was made or each such
cost incurred by Landlord, shall be payable by tenant to Landlord on demand.
20.3 Events of Default. Tenant shall be in default under this Lease
whenever any of the following events of default occur:
A. Part of all of the Rent or other charges hereby reserved are not paid
when due., and such default continues for five (5) days after the due
date thereof: or
<PAGE>
B. Tenant's interest in this Lease or any goods, chattels or equipment of
Tenant is taken or is subject to execution or attachment or if a writ
of execution is issued against Tenant: or
C. Tenant becomes insolvent or commits an act of bankruptcy or becomes
bankrupt or takes the benefit of any statute that may be in force for
bankrupt or insolvent debtors or becomes involved in voluntary or
involuntary wind-up proceedings or if a receiver shall be appointed
for the business, property, affairs or revenues of Tenant, or
D. Tenant makes a bulk sale of its goods or moves, commences, attempts or
threatens to move its goods, chattels and equipment out of the
Premises (other than in the normal course of its business) or ceases
to conduct business from the Premises; or
E. Tenant fails to observe, perform and keep each and every of the
convents, agreements, provisions, stipulations and conditions herein
contained to be observed, performed and kept by Tenant (other than
payment of Rent and other charges hereunder) and persists in such
failure for ten (10) days after notice by Landlord requiring that
Tenant remedy, correct, desist or comply.
20.4 Remedies Upon the occurrence of any event of default, Landlord
shall have the option to do any one or more of the following without notice or
demand, in addition to and not in limitation of any other remedy permitted by
law or by this Lease:
A. Terminate this Lease, in which event Tenant shall immediately
surrender the Premises to Landlord, but if Tenant shall fail to do so,
Landlord may, without notice and without prejudice to any other remedy
Landlord may have, enter upon and take possession of the Premises and
expel or remove Tenant and its effects without being liable for
prosecution or any claim for damages therefore; and Landlord may seize
and sell all of Tenant's chattels upon which it has a lien for Rent,
and otherwise distrain for all sums due, and apply the proceeds
therefrom to the amounts owed to Landlord: and Tenant agrees to
indemnify Landlord for all loss and damage which Landlord may suffer
by reason of such termination, whether through inability to relet the
Premises or otherwise, including any loss of rental for the remainder
of the Lease Term.
B. Declare the entire amount of the Rent which would have become due and
payable during the remainder of the Term of this Lease to be due and
payable immediately, in which event Tenant agrees to pay the same
(less any rents actually received by Landlord in reletting the Demised
Premises) to Landlord at once, it being agreed that such payment shall
constitute payment in advance of the Rent stipulated for the remainder
of the Term.
The acceptance by Landlord of the payment of such Rent shall not
constitute a waiver of any default then existing or thereafter
occurring hereunder.
<PAGE>
C. Enter upon and take possession of the Premises as the agent of Tenant
without being liable for prosecution or any claim for damages
therefor, and Landlord may relet the Premises as the agent of Tenant
and receive the Rent therefor, in which event Tenant shall pay to
Landlord on demand the cost of renovating, repairing and altering the
Premises for a new tenant or tenants and any deficiency that may arise
by reason of such reletting, provided however, that Landlord shall
have no duty to relet the Premises and the failure of Landlord to
relet the Premises shall not release or affect Tenant's liability for
Rent or for damages.
D. Landlord may do whatever Tenant is obligated to do by the provisions
of this Lease and may enter the Premises without being liable for
prosecution or any claim for damages therefor, in order to accomplish
this purpose, Tenant agrees to reimburse Landlord immediately upon
demand for any expenses which Landlord may incur in effecting
compliance with the Lease on behalf of Tenant, and Tenant further
agrees that Landlord shall not be liable for any damages resulting to
Tenant from such action, whether caused by the negligence of Landlord
or otherwise.
20.5 Waiver of Exemption and Redemption. Notwithstanding anything
contained in any statute now or hereafter in force limiting or abrogating the
right of distress, none of Tenant's goods, chattel or trade fixtures on the
Premises at any time during the continuance of the Term shall be exempt from
levy by distress for Rent or other charges in arrears, and upon any claim being
made for such exemption by Tenant or on distress being made by Landlord this
Lease may be pleaded as an estoppel against Tenant in any action brought to test
the right to the levying upon any such goods as are named as exempted in any
such statute, Tenant hereby waiving all and every benefit that would or might
have accrued to Tenant under and by virtue of any such statue but for this
Lease.
20.6 Surrender. If and whenever Landlord is entitled to or does
re-enter the Premises, Landlord may terminate this Lease by giving notice
thereof, and in such event Tenant shall forthwith vacate and surrender the
Premises
20.7 Expenses If Landlord shall re-enter the Premises, or if this Lease
shall be terminated hereunder, Tenant shall pay to Landlord on demand all
expenses incurred by Landlord in Performing any of Tenant's obligations under
this Lease, reentering or terminating and re-letting, collecting sums due and
payable by Tenant, realizing upon assets seized including brokerage, legal fees
and disbursements, and the expense of keeping the Premises in good order,
repairing the same and preparing it for re-letting.
20.8 Remedies Cumulative. No reference to, nor exercise of, any
specific right or remedy by Landlord shall prejudice or preclude Landlord from
exercising or invoking any other remedy in respect thereof, whether allowed at
law or in equity or expressly provided for herein. No such remedy shall be
exclusive or dependent upon any other such remedy, but Landlord may from time to
time exercise any one or more of such remedies independently or in combination.
<PAGE>
ARTICLE XXI - MISCELLANEOUS
21.1 Relationship of Parties. Nothing contained in this Lease shall
create any relationship between the parties hereto other than that of Landlord
and Tenant, and it acknowledged agreed that Landlord oes not in any way or for
any purpose become a partner of member of a joint or common enterprise with
Tenant.
21.2 Consents. Except as otherwise specifically provided herein,
whenever a consent or approval of Landlord is required under the terms of this
Lease, such consent or approval shall be granted or withheld within a seven (7)
day period and may be granted withheld in Landlord's sole discretion. If either
party withholds any consent or approval, such party shall on written request
deliver to the other party a written statement giving the reason therefor.
21.3 Name of Building. Landlord shall have the right, after thirty (30)
days notice to Tenant, to change the name, number or designation of the Building
during the Term without liability to Tenant.
21.4 Applicable Law and Construction. This Lease shall be governed by
and construed under the Laws of the State of Florida and its provisions shall be
construed as a whole according to their common meaning and not strictly for or
against Landlord or Tenant. The words Landlord and Tenant shall include the
plural as well as the singular. If this Lease is executed by more than one
Tenant, Tenants obligations hereunder shall be joint and several obligations of
such executing Tenants. Time is of the essence of this Lease and each of its
provisions. The captions of the Articles are included for interpretation of this
Lease.
21.5 Entire Agreement. This Lease contains the entire agreement between
the parties hereto with respect to the subject matter of this Lease. Tenant
acknowledges and agrees that it has not relied upon any statement,
representation, agreement or warranty except such as are set out in this Lease.
If this Lease is mde pursuant to an offer to Lease, then the term "Lease" in
this Section 21.5 shall be deemed to include such offer to Lease.
21.6 Amendment or Modification. Unless otherwise specifically provided
in this Lease no amendment, modification or supplement to this Lease shall be
valid or binding unless set out in writing and executed by the parties hereto in
the same as the execution of this Lease.
21.7 Construed Covenants and Severability, All of the provisions of
this Lease are to be construed as covenants and agreements as thought the words
importing such covenants and agreements were used in each separate Article
hereof. Should any provision of this Lease be or become invalid, void, illegal
or not enforceable, it shall be considered separate and severable from the Lease
and the remaining provisions shall remain in force and be binding upon he
parties hereto as though such provisions had not been included.
21.8 No Implied Surrender or Waiver No provisions of this Lease shall
be deemed to have been waived by Landlord unless such waiver is in writing
signed by Landlord. Landlord's waiver of a breach of any term or condition of
this Lease shall not prevent a subsequent act, which would have originally
constituted a breach, from having all the force and effect of any original
<PAGE>
breach, Landlord's receipt of Rent with knowledge of a breach by Tenant of any
term or condition of this Lease shall not be deemed a waiver of such breach,
Landlord's failure to enforce against Tenant or any other tenant in the Building
of any of the Rules and Regulations made under Article XV shall not be deemed a
waiver of such Rules and Regulations. No act or thing done by Landlord, its
agents or employees during the Term shall be deemed an acceptance of a surrender
of the Premises, and no agreementto accept a surrender of the Premises shall be
valid, unless in writing signed by Landlord, The delivery of keys to any of
Landlord's agents or employees shall not operate as a termination of this Lease
or a surrender of the Premises. NO payment by Tenant, or receipt by Landlord, of
a lesser amount than the Rent due hereunder shall be deemed to be other than on
account on the earliest stipulated Rent, nor shall any endorsement or statement
or any check or letter accompanying any check, or payment as Rent, be deemed an
accord and satisfaction, and Landlord may accept such check or payment without
prejudice to Landlord's right to recover the balance of such Rent or pursue any
other remedy available to Landlord.
21.9 Successors Bound Except as otherwise specifically provided the
covenants, terms and conditions in this Lease shall apply to an bind the heirs
successors, executors, administrators and assigns of the parties hereto.
21.10 Radon Gas. Radon is a naturally occurring and radioactive gas
that when it has accumulated in a building in sufficient quantities, may present
a health risk to persons who are exposed to it over time. Levels of radon that
exceed Federal and State guidelines have been found in buildings in Florida.
Additional information regarding radon and radon testing may be obtained from
your county public health unit.
21.11 Brokers. Tenant warrants that it has had no dealings with any
broker or agent other than Landlord's broker, and Tenant agrees to indemnify
Landlord and hold Landlord harmless from and against any and all costs, expenses
or liability for commissions or other fees claimed by Tenant's broker (if any)
with respect to this Lease, and Landlord agrees to indemnify and hold Tenant
harless from and against any and all costs, expenses and liability for
commissions or other fees claimed by Landlord's broker with respect to this
Lease.
21.12 Force Majeure. Whenever a period of time is herein prescribed for
action to be taken by Landlord, Landlord, Landlord shall not be liable or
responsible for, and there shall be excluded from the computation for any such
period of time, any delays due to strikes, riots, acts of God, shortages of
labor or materials, war, governmental laws. regulations or restrictions of any
other cause of any kind whatsoever which are beyond the control of Landlord.
21.13 Lease Language. Words of any gender used in this Lease shall be
held and construed to include any other gender, and words in the singular number
shall be held to include the plural, unless the context otherwise requires.
21.14 Multiple Tenants/Guarantors. If there be more than one (1)
Tenant, the obligations hereunder imposed upon tenant shall be joint and
several. If there be a Guarantor of Tenant's obligations hereunder, the
obligations hereunder imposed upon Tenant shall be joint and several obligations
of Tenant and such Guarantor, and Landlord need not first proceed against Tenant
hereunder before proceeding against such Guarantor, nor shall any such Guarantor
be released from
<PAGE>
its guarantee for any reason whatsoever, including (without limitation) any
amendment of this Lease, any forbearance by Landlord or waiver of any of
Landlords' rights, the failure to give Tenant or such Guarantor any notices, or
the release of any party liable for the payment of Tenant's obligations
hereunder.
initialed by GAJ
21.16 No Waiver. No delay or omission of the exercise of any right by
either party hereto shall impair any such right or shall be construed as a
waiver of any default or as shall not constitute a waiver of
Landlordacquiescence therein. One or more waivers of any covenant, term or
condition of this Lease by either party shall not be construed by the other
party as a waiver of subsequent breach of the same covenant, term or condition.
No requirement whatsoever of this Lease shall be deemed waived or varied because
of either part requirement whatsoever of this Lease shall be deemed waived or
varied because of either part failure or delay in taking advantage of any
default, and landlord's acceptance of payment from Tenant with knowledge of any
default shall not constitute a waiver of Landlord's rights in respect to such
default, nor of any subsequent or continued breach of any such default or any
other requirement of this Lease. All remedies provided for herein shall be
construed as cumulative and shall be in addition to every other remedy otherwise
available to Landlord.
21,17 Exculpation. Tenant agrees that Tenant shall look solely to
Landlord's interest in the Building of which the Premises is a part and
Landlord's personal property used in connection therewith for the satisfaction
of any claim, judgment or decree requiring the payment of money by Landlord
based upon any default hereunder, and no other property or assets of landlord,
its successors or assigns, shall be subject to levy, execution or other
enforcement procedure for the satisfaction of any such claim, judgment,
injunction or decree.
21.18 Headings. The Article headings contained in this Lease are for
convenience only and shall in no way enlarge or limit the scope or meaning of
the various and several articles hereof.
21.19 Recording. Tenant shall not record this Lease, nor a Memorandum
thereof, in the Public Records, and doing so shall, at Landlord's option, render
this Lease null and void for all purposes.
21.20 Exhibits. The seven (7) Exhibits ("A" - "G") are attached hereto
and incorporated herein by reference.
21.21 Irrevocable Offer. In consideration of Landlord's administrative
expense in considering this Lease and the terms of Tenant's proposed tenancy
hereunder, Landlord's reservation of the Premises pending such consideration and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Tenant's submission to Landlord of this Lease,
<PAGE>
duly executed by Tenant, shall constitute Tenant's irrevocable offer to continue
for fourteen (14) days from and after receipt by Landlord of said Lease duly
executed by Tenant or until Landlord shall deliver to Tenant written notice of
rejection of Tenant's offer whichever shall first occur. If within said fourteen
(14) day period Landlord shall neither return the Lease duly executed by
Landlord nor so advise Tenant of Landlord's rejection of Tenant's offer, then
after said fourteen (14) day period Tenant shall be free to revoke its offer
provided, however, Tenant's offer shall continue until (i) revoked by tenant in
writing, or (ii) accepted or rejected by Landlord.
S. "Consumer Price Index" Defined. As used elsewhere in this Lease, the
term "Consumer Price Index" means the average for "All Items" shown for the U.S.
City Average for "All Urban Consumers" as promulgated by the Bureau of Labor
Statistics of the U.S. Department of Labor, using the year 1982-84 as a base of
100
21.23 Special Conditions. l) This lease shall not be binding on or
enforceable against Landlord unless and until Landlord (A) shall have executed
and unconditionally delivered to Tenant an executed counterpart to this
agreement. 2) Landlord agrees that tenant shall have right to occupy Suite 410
at no charge - until Suite 36 is ready for occupancy - target date is May 7,
1997. However, Landlord must have Certificate of Insurance prior to tenant
occupying Suite 410. 3)
Tenant shall have right of first Refusal on Suite 205.
In Witness Whereof, the parties hereto have caused this Lease to be
executed as of the day and year first written above.
LANDLORD:
Date Executed by Landlord: North Palm Crystal Associates,
4-11-97 By: Paine Webber Equity Partners
One Limited Partnership,
a Virginia Limited Partnership
By: First Equity Partners, Inc.
as its general partner
WITNESSES: By: /s/Richard S.Coombs
/s/Joanne E. Sordillo signature
signature
April 11, 1997 before me personally appeared Richard Coombs .
Date Executed by Tenant: TENANT:
3-25-97 ICE BAN AMERICA, INC.
A Nevada Corporation
WITNESSES:
By: G.A. Janke
signature Title: V.P.
/s/Lorraine A. Malanga
Notary Public MyComm. Expires Sept. 25, 2003
<PAGE>
LEGAL DESCRIPTION
Lots 1 and 2, GOLFVIEW ADDITION TO the VILLAGE OF NORTH PALM BEACH, According to
the Plat thereof, as recorded in Plat Book 28, Page 199, Public Records of Palm
Beach County, Florida
Subject to easements, reservations, restrictions, and rights of way record.
<PAGE>
EXHIBIT "C"
MISCELLANEOUS DEFINITIONS AND PROVISIONS
SECTION 1 - WORDS AND PHRASES
1.01 Definitions. In this Lease, including this Exhibit:
A. "Architect" means such firm of professional architects or engineers as
Landlord may from time to time engage for preparation of construction drawings
for the Building or for general supervision of architectural and engineering
aspects and operations thereof and includes any consultant (s) from time to time
appointed Landlord or the Architect whenever such consultant (s) is acting
within the scope of his appointment and specialty.
B. "Center" means all improvements, Buildings, landscaping and parking
facilities constructed on the Land.
C. "Building Common Area" means those portions of the Building which are not
leased or designated for lease to Tenants but are provided to be used in common
by Landlord, Tenant and other Tenants of the Building and their employees,
agents, servants, licensees and invitees, whether or not the same or open to the
general public and shall include any fixtures, chattels, systems or decor,
signs, facilities, or landscaping contained therein or maintained or used in
connection therewith.
D. "Center Common Area" means those portions of the Center other than Building
Common Areas which are not leased or designated for lease to tenants but are
provided to be used in common by Landlord, Tenant and other tenants of the
Building and their employees, agents, servants, licensees and invitees, whether
or not the same or open to the general public and shall include any fixtures,
chattels, systems or decor, signs, facilities, or landscaping contained therein
or maintained or used in connection therewith.
E. "Section" means a section of this Exhibit "C"
1.02 Normal Business Hours. Except as otherwise specifically provided in this
Lease normal business hours for the Building shall be from 9:00 A.M. to 6:00
P.M. Monday through Friday, excluding days which are legal or statutory holidays
in the jurisdictions in which the Building is located.
SECTION 2 - DETERMINATION OF OCCUPANCY COST
2.01 Definitions In this Section 2:
A. "Taxes" means the aggregate of all taxes, rates, charges, levies, and
assessments accruing in respect of the Calendar year in which the Fiscal Year
begins and imposed by any competent
<PAGE>
authority upon or in respect of the Land and Building, including any tax imposed
on the capital invested therein.
B. "HVAC Cost" means the costs in the Fiscal Year for the operation, repair, and
maintenance of the systems for heating, ventilating, and air conditioning the
Building and Building Common Area.
C. "Square Feet in the Building" means 40,115 square feet provided that if from
time to time there is a material change in the rentable space in the Building,
square feet in the Building shall until any further change mean the number of
square feet in the Building determined on completion of that change on the basis
set out in Section 2.
D "Square Feet in the Premises" means 825 + square feet.
E. "Square Feet in the Center" means 115,851 square feet.
2.02 Determination of Occupancy Coats. Occupancy Costs shall be paid by Tenant
and the include the following.
A. Building. Tenant shall pay its proportionate share of the Total costs
incurred during any Fiscal Year in connection with the Building and Building
Common Area. Said proportionate share shall be determined by multiplying the
total of the following costs by a fraction the numerator of which shall be the
square feet in the Premises and the denominator of which shall be the Square
feet in the Building. Such costs shall including without limitation and without
duplication, the following:
(i) Taxes;
(ii) HVAC Costs.
(iii) the cost of operating, lighting, cleaning, painting, striping,
securing (including cost of uniforms, equipment and all employment
taxes) and insuring (including liability insurance and extended
coverage against fire, theft or other casualty, rent insurance,
workman's compensation insurance covering personnel, fidelity bonds for
personnel, insurance against liability for defamation and claims of
false arrest occurring in or about the Common Area) the Building and
Building Common Area;
(iv) the cost of all personnel employed on a part time basis or full
time basis in the operation, maintenance or repair of the Building and
Building Common Area;
(v) the cost of removal of rubbish and debris;
(vi) the cost of regulating traffic;
<PAGE>
(vii) the cost of inspection and depreciation and depreciation of
machinery and equipment used in operating and maintenance of the
Building and Building Common Area and personal property taxes and other
charges incurred in connection with such equipment;
(viii) the cost of replacement and maintenance of the roof, the
sprinkler system, paving, curbs, walkways, draining and lighting
facilities, utilities, systems and structures of the Building and
Building Common Area provided that in no event shall such costs and
expenses include the cost of expanding, contracting or otherwise
altering the configuration of all or any portion of the Building,
(ix) the cost of planting, replanting and replacing flowers, shrubbery
and the supplies required therefor; and
(x) the cost of all utilities used in connection with the operation of
the building Common Area facilities.
B. Centre. Tenant shall pay its proportionate share of the total of all costs
including without limitation and without duplication, those costs (as determined
in accordance with 2.02A above insofar as they apply to the Center Common Area)
incurred during any Fiscal Year in connection with the Center Common Area. Said
proportionate share shall be determined by multiplying the total of such costs
by a fraction the numerator of which shall be the Square Feet in the Premises
and the denominator of which shall be the Square Feet in the Center.
C All expenses after the date any space in the Building was first occupied by
any Tenant and properly allocable to such Fiscal Year for any capital
improvement or structural repair to the Building required by any change in the
laws, rules, regulations or orders of any governmental authority having
jurisdiction or incurred. to reduce any item of cost or expense, which cost or
expense shall be amortized over the useful capital life of the capital
improvement or structural repair; and
A charge for Landlord's management overhead equal to fifteen
percent (15%) of the 2.02A,B and C.
Tenant acknowledges and agrees that if at any time during the Term
certain services, facilities and utilities are available for the joint use of
the Building located in the center, that in determining the costs, charges, and
expenses to be included in occupancy cost, Landlord, acting reasonable and
equitably, shall make an allocation or allocations of such costs, charges and
expenses which the Landlord determines as attributable to the Building.
2.03 Limitation on Occupancy Cost. In determining Occupancy Cost, the cost
(if any) of the following shall be excluded.:
A. Major structural repairs to the Building.
<PAGE>
B. Repair and replacement resulting from inferior or deficient workmanship,
materials, or equipment in the initial construction of the Building or for which
Landlord is reimbursed by insurers.
C. Ground rent (if any), depreciation, amortization, and interest on and capital
retirement of debt; and
D. Tenant improvements and leasing commissions.
2.04 Partial Fiscal Year. If the Term commences after the beginning of or
terminates before the end of a Fiscal Year, any amount payable by Tenant under
Section 2.02 shall be adjusted proportionately.
SECTION 3 DETERMINATION OF SQUARE FEET IN THE PREMISES.
The number of square feet of office space in the Premises shall be
calculated from dimensioned Architect's drawings to the inside finish of
permanent exterior building walls or to the inside face of the glass, whenever
the area of the exterior building wall as measured from the interior between the
floor and finished ceiling, is at least fifty percent (50%) glass, to the face
of permanent interior walls, and to the center line of demising partitions. No
adjustment shall be made for any columns located wholly or partially within the
rentable space, or for any enclosures around the periphery of the Building used
for the purposes of cooling, heating or ventilating.
SECTION 4 - LOADING AND UNLIADING.
4.01 The delivery and shipping of merchandise, supplies, fixtures, and other
materials or goods of whatsoever nature to or from the Premises and all loading
and unloading, and handling thereof shall be done only at such times, in such
areas, by such means, and through such elevators, entrances, halls, and
corridors as are designated by Landlord.
4.02 Landlord accepts no liability and is hereby relieved and released by Tenant
in respect of the operation of delivery facilities for the Building, or the
adequacy thereof, or of the acts or omissions of any person or persons engaged
in the operation thereof, or in the acceptance, holding, handling, delivery or
dispatch, any error, negligence or delay therein.
4.03 Landlord may from time to time make and amend regulations for the orderly
and efficient operation of the delivery facilities for the Building, and may
require the payment of reasonable and equitable charges for delivery services
and demurrage provided by Landlord.
<PAGE>
EXHIBIT "D"
RULES AND REGULATIONS
1. Security. Landlord may from time to time adopt appropriate systems and
systems and procedures for the security or safety of the Building, any persons
occupying, using or entering the same, or any equipment, finishings or contents
thereof, and Tenant shall compy with Landlord's reasonable requirements relative
thereto.
2. Locks. Landlord may from time to time install and change looking mechanisms
on entrances to the Building, common areas thereof, and the Premises ,f and
(unless 24 hour security is provided by the Building) shall provide to Tenant a
reasonable number of keys and replacements therefor to meet the bona fide
requirements of Tenant. In these rules "keys" include any device serving the
same purpose. Tenant shall not add to or change existing locking mechanisms on
any door in or to the Premises without Landlord's prior written consent. If with
Landlord's consent, Tenant installs lock (s) incompatible with the Building
master locking system.
A. Landlord, without abatement of Rent shall be relieved of any obligation
under the Lease to provide any service to the affected area which require access
thereto;
B. Tenant shall indemnify Landlord against any expense as a result of
forced entry thereto which may be required in an emergency; and
C. Tenant shall at he end of the Term and at Landlord's request remove such
lock (s) and re-install locks compatible with the Building master locking
system, all at Tenant'
3. Return of Keys; At the end of the Term, Tenant shall promptly return to
Landlord all keys for the Building and Premises which are in possession of
Tenant.
4. Window. Tenant shall observe Landlord's rules with respect to maintaining
window coverings at all windows in the Premises so that the Building presents a
uniform exterior appearance, and shall not install any window shades, screens,
drapes, covers or other materials on or at any window in the Premises without
Landlord's prior written consent. Tenant shall ensure that window coverings are
closed on all windows in the Premises while they are exposed to the direct rays
of the sun.
5. Repair, Maintenance, Alterations and Improvements. Tenant shall carry out
Tenant's repair, maintenance, alterations and improvements in the Premises only
during times agreed to in advance by Landlord and in a manner which will not
interfere with the rights of other tenants in the Building.
6. Water Fixtures. Tenant shall not use water fixtures for any purpose for which
they are not intended, nor shall water be wasted by tampering with such fixture.
Any cost or damage resulting from such misuse by Tenant shall be paid for by
Tenant.
<PAGE>
7. Personal Use of Premises. The Premises shall not be used or permitted to be
used for residential, lodging or sleeping purposes or for the storage of
personal effects or property not required for business purposes.
8. Heavy Articles. Tenant shall not place in or move about the Premises without
Landlord's prior written consent any safe or other heavy article which in
Landlord's reasonable opinion may damage the Building, and Landlord may
designate the location of any heavy articles in the Premises.
9. Carpet Pads. In those portions of the Premises where carpet has been provided
directly or indirectly by Landlord, Tenant shall at its own expense install and
maintain pads to protect the carpet under all furniture having casters other
than carpet casters.
10. Bicycles, Animals. Tenant shall not bring any animals or birds into the
Building, and shall not permit bicycles or other vehicles inside or on the
sidewalks outside the Building except in areas designated from time to time by
Landlord for such purposes.
11. Deliveries. Tenant shall ensue that deliveries of materials and supplies to
the Premises are made through such entrances, elevators and corridors and at
such times as may from time to time be designated by Landlord, and shall
promptly pay or cause to be paid to Landlord the cost of repairing any damaged
in the Building caused by any person making such deliveries.
12. Furniture and Equipment. Tenant shall ensure that furniture and equipment
being moved into or out of the Premises is moved through such entrances,
elevators and corridors and at such times as may from time to time be designated
by Landlord, and by movers or a moving company approved by Landlord, and shall
promptly pay or cause to be paid to Landlord the cost of repairing any damage in
the building caused thereby.
13. Solicitations. Landlord reserves the right to prohibit canvassing,
soliciting or peddling in the Building.
14. Foods and Beverages. Only persons approved from time to time by Landlord may
prepare, solicit orders for, sell, serve or distribute food or beverages in the
Building, or use the elevators, corridors, or common areas for any such purpose.
Except with Landlord's prior written consent and in accordance with arrangements
approved by Landlord, Tenant shall not permit on the Premises the use of
equipment for dispensing food or beverages or for the preparation, solicitation
of orders for, sale, serving, or distribution of food or beverages.
15. Refuse. Tenant shall place all refuse in proper receptacles provided by
Tenant at its expense in the Premises or in receptacles (if any) provided by
Landlord for the Building and shall keep sidewalks and driveways outside the
Building, and lobbies, corridors, stairwells, ducts and shafts of the Building,
free of all refuse.
16 Obstructions. Tenant, shall not obstruct or place anything in or on the
sidewalks or driveways outside the Building or in the lobbies, corridors,
stairwells or other common areas of
<PAGE>
the Building, or use such locations for any purpose except access to and exit
from the Premises without Landlord's prior written consent. Landlord may remove
at Tenants' expense any such obstruction or thing (unauthorized by Landlord)
without notice or obligation to Tenant.
17. Dangerous or Immoral Activities. Tenant shall not make any use of the
Premises which involves the danger of injury to any person, nor shall the same
be used for any immoral use.
18. Proper Conduct. Tenant shall not conduct itself in any manner which is
inconsistent with the character of the Building as a first quality building or
which will impair the comfort and convenience of other tenants in the building.
19. Employees, Agents, and Invitees. In these Rules and Regulations, the term
"Tenant" includes the employees, agents, invitees and licensees of Tenant and
others permitted by Tenant to use or occupy the Premises.
<PAGE>
EXHIBIT 'F"
LANDLORD'S WORK
Landlord agrees to:
1.) Shampoo Carpet.
2.) Paint walls, where applicable due to furniture marks.
<PAGE>
EXHIBIT "G"
TENANT'S WORK
Prior to commencing any alternation or renovation work by the Tenant,
Tenant shall deliver the following to the Landlord:
A. A written agreement whereby Tenant indemnifies and holds Landlord harmless
from any and all (i) claims or demands of any parties rendering labor, services
and/or materials to the Premises, (ii) litigation related to the foregoing, and
(iii) costs, expenses and attorneys' fees incurred by Landlord in connection
with the foregoing;
B. Plans acceptable to Landlord identifying the renovation work and an estimated
budget for such work describing in reasonable detail the work to be done and the
estimated cost thereof, and,
C. Any other affidavits, waivers or releases that Landlord may reasonably
require.
Landlord shall be entitled to inspect the improvements for which Tenant
seeks payment in order to determine that Tenant has satisfactorily completed
such improvements. All work performed by comply with all applicable governing
codes, ordinances and regulations.
Tenant's alterations or renovation work, if any further is required,
shall consist of the following:
Exhibit 10.23
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into this 10th day of August,1996 Ice Ban
America, Inc. a Nevada Corporation hereinafter referred to as "IBA" and George
Janke hereinafter referred to as "JANKE" for his employment by IBA, at the
discretion of the IBA Board of Directors.
WHEREAS, IBA wishes to engage JANKE as Chief Executive Officer (CEO) of
lBA, and;
WHEREAS, JANKE wishes to be engaged as Chief Executive Officer of IBA.
NOW THEREFORE, for good and valuable consideration it is agreed between the
parties that:
1. RECITALS: The foregoing recitals are true and correct and are hereby made a
part hereof
2. ENGAGEMENT: IBA hereby engages JANKE to be Chief Executive Officer for a
minimum term of five (5) years, from January 1, 1997 thru December 31,
2001, said term may be extended by the action of the Board Of Directors of
IBA at any time.
3 . COMPENSATION: JANKE: shall receive a salary of eighty five thousand
($85,000) dollars per year for each year of his employment with IBA. In
each subsequent year his salary shall be adjusted by the U S Department of
Labor cost price index (CPI).
The Board of Directors may, at its sole discretion increase JANKE'S base
salary based on IBA'S performance, and profitability of company operations
at any time. JANKE shall have the right to defer his compensation at his
sole discretion, and may instead choose to receive payment in IBA stock
based on the amount of salary due and price that the IBA stock is listed
as sold on NASDAQ at the close of business on the last trading day each
year.
4. SHARES OF STOCK BONUS: This Agreement so provides for up to one hundred and
fifty thousand (150,000) shares of restricted shares of common stock, to be
issued, per year, for five (5) years if certain performance goals are met
as set forth below:
Option 1: Completing the preparation of and acceptance of a 504-D
offering memorandum. One hundred fifty thousand (150,000) shares at
$.001 per share.
Option 2: Completing the subscription and sale of the $0.10 portion of
the 504D offering. One hundred fifty thousand (150,000) shares at $.001
per share.
Option 3: Completing the subscription and sale of the $1.00 portion of
the 504D offering. One hundred and fifty (150,000) thousand share at
$0.90 per share.
Page 1 of 3
<PAGE>
Option 4: Achieving a trading value of the tradable stock of or above
$2.00 per share for ten (10) consecutive days. One hundred fifty
thousand (150,000) shares at $1.80 per share.
Option 5: Achieving a trading value of the tradable stock of or above
$3.00 per share for ten (10) consecutive days. One hundred fifty
thousand (150,000) shares at $2.70per share.
The bonus option shares to George A. Janke shall be restricted shares and shall
be subject to the 144 regulations as they apply to an affiliate of the Company.
The options so acquired may be exercised for the actual issuance of the stock
granted by the schedule below:
May not be exercised prior to: Must be exercised and redeemed by:
Option 1: December 30, 1997 March 30, 2000
Option 2: December 30, 1998 March 30, 2001
Option 3: December 30, 1999 March 30, 2002
Option 4: December 30, 2000 March 30, 2003
Option 5: December 30, 2001 March 30, 2004
5. TERM OF AGREEMENT AND TERMINATION: This Agreement shall be effective and as
of January 1, 1997 and shall be for a minimum period of five (5) years, and
shall continue thereafter year by year unless canceled or terminated by
either party. If either party wishes to terminate this Agreement at any
time after the five (5) year base term, each is required to give a one
hundred and eighty (180) day notice in writing of said termination or
resignation.
6. INVESTMENT INTENT: JANKE, hereby acknowledges that the acquisition of the
IBA shares he receives are restricted common stock and are for the account
of the Janke Family Trust Vinasz Trust, and are for investment purposes
only, and not with a view to the sale or other distribution, in whole or in
part.
7. NON REGISTRATION OF SECURITIES: JANKE acknowledges and understands that the
shares of stock subject to this Agreement are being transferred pursuant to
an exemption from registration under the Federal and State securities laws,
and accordingly cannot be sold or transferred without the availability of
an exemption from registration and are subject to regulation 144
restrictions.
8. ENTIRE AGREEMENT: This Agreement constitutes the entire Agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all previous or contemporaneous written or verbal
Agreements.
9. GOVERNING LAW/VENUE: This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Florida. Venue for any litigation
between the
Page 2 of 3
<PAGE>
parties hereto with respect to the subject matter hereof shall be proper
only in Palm Beach County, Florida.
10. ARBITRATION: Any controversy or claim arising out of or relating to this
contract, or the breach thereof, shall be settled by Arbitration in
accordance with the rules of the American Arbitration Association, and
judgment upon, the award rendered by the Arbitrator may be entered in any
court having jurisdiction thereof. This Agreement is prepared in accordance
with the laws of the State of Florida.
11. COUNTERPARTS: This Agreement may be executed in any number of counterparts,
each of which shall be an original, and all of which taken together, shall
constitute one and the same Agreement.
12. HEADINGS: The headings contained in this Agreement are inserted only as a
matter of convenience and in no way define, limit, extend or prescribe the
scope of this Agreement or the intent of any provision hereof.
13. SEVERABILITY: All provisions of this Agreement are severable from the
others and this Agreement shall be interpreted and enforced as if all
completely invalid or unenforceable provisions were not contained herein-
all partially valid and enforceable provision shall be enforced to the
extent they are intelligible, valid and enforceable.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
first date indicated above:
WTINESSES: ICE BAN AMERICA, INC.
- --------------------------------
- -------------------------------- ----------------------------
Chairman, Board of Directors
GEORGE A. JANKE
- -----------------------------
- ----------------------------- ----------------------------
As trustee
Page 3 of 3
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<NAME> Natural Solutions Corporation
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<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> Jul-31-1998
<PERIOD-START> Aug-01-1998
<PERIOD-END> Jul-31-1999
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0
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