SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended March 31, 1996
Commission file number 0-17774
BERNSTEIN/LEIBSTONE ASSOCIATES, INC.
(Exact name of registrant as specified in its charter)
New York 11-1996121
(State of Incorporation) (IRS Employer Identification Number)
2001A Australian Avenue, Riviera Beach, Florida 33404
(Address of principal executive offices) (Zip Code)
5601 Corporate Way, Suite 320, West Palm Beach, Florida 33407
(Former address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (561) 844-2442
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share
(Title of Class)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES: X NO: .
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein , and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K [X]
As of September 30, 1996, 17,391,700 shares of the registrant's common stock
were outstanding. The aggregate market value of the common stock held by non-
affiliates of the registrant on that date was $11,412,675 computed at the
closing price on that date.
PART 1
Item 1. Business
Historically, the Company operated two divisions; a packaging division
that designed and marketed a complete line of flexible and rigid packaging,
and a Textile division that supplied blind and handicapped workshops with the
textiles required to fulfill state and federal government contracts.
On July 7, 1995, Bernstein/Leibstone Associates, Inc.(the "Company"),
Archway Capital, Inc. ("Archway") and William Leibstone Associates, Inc.
("WLAI"), an entity owned by the former majority stockholder of the Company,
entered into an agreement to exchange shares of the Company's common stock for
shares of Archway's common stock on a one-for-one basis. On July 14, 1995,
all outstanding shares of Archway were exchanged by the shareholders for
restricted shares issued by the Company. The agreements further provided for
the sale of the former packaging and textile divisions to WLAI in exchange for
a note in the amount of $941,348 which is secured by 1,100,000 shares of stock
in the Company owned by William Leibstone. As a result of these transactions,
the Company's continuing operations are those of Archway and its subsidiaries.
Archway was formed in September 1994 as a holding company for the purpose
of investing in other businesses and providing management expertise in such
subsidiaries with the intention of developing new products, ideas and
techniques in areas of business clearly identified as unique or niche markets.
In October 1994, International Fire Safety Products, Inc. was organized as a
wholly owned subsidiary for the purpose of manufacturing retardant technology
products in a variety of forms. This subsidiary had no significant operations
for the years ended March 31, 1996 and 1995.
Effective April 1, 1995, Archway acquired a majority interest in
Clearshield Manufacturing Corp. ("Clearshield"), a Florida corporation engaged
in the manufacturing, sale and distribution of a patented clear hurricane
shutter system, utilizing a three-for-one share exchange. Archway issued
9,071,700 shares to the shareholders of Clearshield in exchange for 3,023,900
shares of Clearshield. Clearshield's wholly owned subsidiaries, Clearshield
of Palm Beach County, Inc. and Palmco Builders Inc. are engaged in the retail
sale and installation of hurricane protection products, respectively. In
October 1995, PC International Trading Corp. ("PC"), a wholly owned subsidiary
of Archway, was organized for the purpose of distributing recycled plastic and
hardware supplies. PC's primary customer is Clearshield.
Substantially all of the Company's operations are in only one industry
segment - the manufacture, distribution and installation of hurricane
protection systems. The Company had no significant export sales. As such, no
separate industry segment information is presented.
Products
The Company's primary operating group is Clearshield and its subsidiaries
which are 57% owned by the Company. Clearshield was incorporated in the State
of Florida in March 1994. Clearshield's principal product is a transparent
storm shutter assembly that is lightweight and of relatively simple
construction, easy to install and remove, and capable of sufficiently
resisting direct impacts from windborne debris during a storm. The storm
shutter assembly is used to protect glass windows and doors in homes, office
buildings and other walled structures from the destructive forces associated
with storm systems such as hurricanes. The system includes corrugated panels
of a shatter resistant, transparent and opaque polycarbonate material that is
secured to a walled structure using various mounting hardware and
configurations.
Living in coastal areas of the south, southwest and southeast portions of
the United States means living with hurricanes, or the threat of hurricanes.
Building codes are constantly being reviewed and upgraded. Many homes damaged
by hurricanes in the past could have minimized the damage had they been
properly protected. Four weak areas in homes cause most of the damage:
windows, doors, garage doors and wood gable ends. Once one of these entry
points fails, the entire house is at the mercy of the hurricane because no
house is designed to sustain wind inside. One of the main methods of
protecting a home is hurricane shutters.
There are five primary types of commercial hurricane shutters; accordion
shutters, rolling shutters, standard awnings, bahama shutters and storm
panels. Clearshield panels fall into the last category which, until the
development of the Clearshield clear polycarbonate panel, consisted mainly of
panels made from aluminum or steel. There are many different styles and
strengths of commercial storm panels available. What makes the Clearshield
panels more desirable than aluminum or steel include; (1) they are much
lighter making them easier to install; (2) they are made of clear see-through
material which allows natural light to enter the home alleviating the
claustrophobic, tunnel-like feeling during loss of electrical power or during
an actual storm; (3) they improve the home's security as the clear panels
allow police, fire and rescue personnel to easily see into a home to ensure
that occupants are safe; and (4) they will not deteriorate, corrode or rust.
Clearshield manufactures the product under the authority of a License
Agreement with Clearshield, Inc., an affiliate through common shareholders.
Clearshield, Inc. is the owner of the Clearshield Trademark and United States
Patent No. 5,457,921 covering the storm shutter assembly. The License
Agreement provides for a fee of $350,000, a royalty on future transparent
panel sales and entitles Clearshield to use the patent and trademark
throughout the State of Florida for an initial term of 20 years.
The manufacturing process is accomplished through the profile extrusion
of pelletized polycarbonate material into the form for storm panels/hurricane
panels. Extrusion technology has been utilized for other thermoplastic
materials, but it is uncommon for the products to be made in a profile of this
size. Typically, extrusions manufactured of polycarbonate are of dimensions
of six inches or less. Clearshield panels are thirteen inches wide, which
requires the use of state-of-the-art technology and methods.
The clear panel is manufactured from clear polycarbonate which is readily
available from a number of suppliers. Clearshield has also developed the
technology to manufacture a colored panel using recycled polycarbonate in a
ground or pelletized form. The regrind is also readily available from a
number of suppliers.
Sales and Markets
Clearshield sells its products through a network of authorized dealers
who provide full sales and installation services. There were approximately
30 active dealers as of March 31, 1996. Clearshield of Palm Beach County,
Inc., a wholly owned subsidiary of Clearshield, is an authorized dealer in
South Florida, selling directly to builders and individual homeowners through
its own sales force. Installation services are performed by Palmco Builders
Inc., a wholly owned subsidiary of Clearshield of Palm Beach County, Inc. and
state licensed general contractor.
To reach the do-it-yourself portion of the hurricane protection market,
Clearshield's products are sold through The Home Depot, a national retail home
improvement chain. Sales to The Home Depot accounted for 30% of the Company's
consolidated net sales for the year ended March 31, 1996.
Clearshield's competition in the hurricane protection industry comes from
alternate products offered by its competitors. Competing products range from
plywood used by do-it-yourselfers to other forms of hurricane shutters
including accordion shutters and metal panels. There are no other clear panel
systems on the market giving Clearshield a unique niche in the industry.
The hurricane protection market is a seasonal business following the
hurricane season which runs from June 1 to November 30. Customers begin to
build their inventory as the season approaches and reduce their levels as the
season winds down. The Company follows this same pattern in managing its
inventories.
Backlog
At March 31, 1996, the Company had open orders of approximately $345,000
as compared to $40,000 as of March 31, 1995. All of these orders were filled
during the normal course of operations. The large backlog reflects the
seasonality of sales and has declined as the end of the hurricane season
approached.
Employees
At March 31, 1996, the Company had a workforce of approximately 60
people, all of whom are leased by the Company from an employee leasing
company. None of the Company's workforce is represented by a collective
bargaining unit and the Company considers its relations with its workforce to
be good.
Item 2. Properties
The Company leases a 19,000 square foot manufacturing facility in Riviera
Beach, Florida at a current monthly rent of $6,784 and a 3,400 square foot
facility in West Palm Beach, Florida that serves as its corporate offices at a
current monthly rent of $3,636. In July 1996, the Company entered a lease
for an additional facility at a current monthly rent of $8,944 with 27,000
square feet of warehouse space and 8,000 square feet of office space located
in Riviera Beach, Florida to serve as a distribution center and corporate
offices. The corporate offices were relocated in September 1996. With the
new distribution center and offices, the Company believes its facilities are
adequate to satisfy its requirements for the foreseeable future.
Item 3. Legal Proceedings
The Company's Clearshield subsidiary is a party in a lawsuit entitled
Clear Investments, Inc. v. Clearshield Manufacturing Corp., Case No. CL 94-
5898 AF. now pending in the Circuit Court of the Fifteenth Judicial Circuit in
and for Palm Beach County, Florida, where a former director and attorney for
Clearshield, through his company, Clear Investments, Inc. has filed suit to
receive 600,000 shares of stock of Clearshield that were originally allocated
to him in May 1994. Subsequent to that time, the former director and attorney
resigned from Clearshield as director and attorney. The Company has retained
counsel and believes they have a meritorious defense to the allegations
contained in the complaint.
Not withstanding the above, in September 1996, settlement in principle
was reached in this matter, subject to documentation and execution of a
settlement agreement. A motion was filed to abate the case and the court has
entered an order closing the file for administrative purposes, while retaining
jurisdiction for the purpose of enforcing the settlement.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the fourth
quarter ended March 31, 1996.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
The common stock of the Company has been traded over-the-counter since
May 15, 1989 and is quoted electronically through the National Association of
Securities Dealers' Electronic Bulletin Board under the symbol BLAI. The
high, low and closing prices per share of the common stock for the years ended
March 31, 1996 and 1995 appear in the following table.
Year ended March 31, 1996
Quarter High Low Close
First $1.12 $ .50 $ .50
Second 2.75 .44 2.19
Third 2.25 .94 1.09
Fourth 2.69 1.00 1.91
Year ended March 31, 1995
Quarter High Low Close
First $1.25 $1.06 $1.16
Second 1.37 1.19 1.28
Third .88 .75 .81
Fourth 1.06 .81 .94
As of March 31, 1996, there were approximately 245 shareholders of record
of the Company's common stock, without taking into account any shares held in
street name by nominees.
The Company has not paid a cash dividend and does not anticipate that it
will in the foreseeable future. The Company intends to retain future earnings
to finance the expansion of its business.
Item 6. Selected Financial Data
Fiscal Years Ended March 31,
(in thousands except per share data)
1996 1995
Income Statement Data:
Net Sales $3,233 $ 4
Net (Loss) (568) (129)
Net (Loss) per Share $ (.03) (.03)
Balance Sheet Data:
Total Assets $3,239 $ 208
Long-Term Debt - -
Shareholders' Equity 813 192
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The composition of the Company changed dynamically between 1995 and 1996
with the acquisition of a majority interest in Clearshield and the business
combination between Archway and the Company. As such, period to period
comparisons of the Company's financial results are not necessarily meaningful.
This discussion should be read in conjunction with the Company's Consolidated
Financial Statements and Notes thereto included in Item 8 of this Form 10-K.
Liquidity and Capital Resources
As a result of the above discussed acquisitions, the Company's working
capital increased from $121,370 to $588,529. The Company owns all of its
manufacturing equipment, leasing only its facilities. The Company's only debt
is an unsecured note payable to Clearshield, Inc., an affiliate through common
stockholders, related to the License Agreement to manufacture the Clearshield
product.
The Company anticipates it will continue to be in a tight liquidity
position for the near future as it invests its resources in expanding its
manufacturing capacity and supporting its increasing working capital needs.
Because of the strong positive acceptance of the Company's product by the
marketplace, the Company was unable to meet the demand during the past
hurricane season due to production capacity limits. Subsequent to year end,
the Company invested in additional manufacturing equipment to increase its
capacity for the future. All of this additional equipment was purchased
outright with internal resources.
Results of Operations
As indicated above, a direct comparison of the results of operations for
1996 and 1995 may not be meaningful due to the acquisitions discussed above
which are included only in the 1996 results of operations in accordance with
generally accepted accounting principles. These acquisitions resulted in a
740 fold increase in sales from $4,371 to $3,233,096 and a 10 fold increase in
selling, general and administrative expenses from $139,443 to $1,534,471. The
Company anticipates continued growth in sales as it expands its dealer base
and the geographic distribution of its products. Sales to date have been
predominately in the South Florida area. Additional markets include the
islands of the Caribbean, Mexico and the eastern and southern coastal areas of
the United States. All of these areas are susceptible to hurricanes and
therefore have a need for the Company's products.
During 1996, the Company completed the development of a colored
hurricane panel which is more cost competitive with alternate products than
the clear panel sold by the Company. The Company incurred sizeable costs in
developing the point of sale displays and promotional materials needed to sell
its products through retail home improvement stores. These development costs
will not be repeated as sales expand. Additionally, with an increase in sales
and production capacity necessary to meet that demand, the Company expects a
reduction in its operating costs as a percent of sales as it further leverages
its resources; human, physical and mechanical.
Interest income primarily is from interest on the note received in the
sale of the Company's former packaging and textile divisions. This amount
will decrease in the future as a substantial portion of the note was prepaid
subsequent to year end.
Item 8. Financial Statements and Supplementary Data
The following financial statements are filed with this report:
Report of Independent Certified Public Accountants
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Shareholders Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Report of Independent Certified Public Accountants
To the Board of Directors
and Shareholders
Bernstein/Leibstone Associates, Inc.
& Subsidiaries
Riviera Beach, Florida
We have audited the accompanying consolidated balance sheets of
Bernstein/Leibstone Associates, Inc. & Subsidiaries as of March 31, 1996 and
1995, and the related consolidated statements of operations, changes in
shareholders' equity and cash flows for the years then ended. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Bernstein/Leibstone Associates, Inc. & Subsidiaries, as of March 31, 1996 and
1995 and the results of their operations and their cash flows for the years
then ended in conformity with generally accepted accounting principles.
October 22, 1996 /s/ Michaelson & Co. P.A.
BERNSTEIN/LEIBSTONE ASSOCIATES, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1996 AND 1995
1996 1995
ASSETS
CURRENT ASSETS:
Cash $ 14,457 $ 5,488
Accounts Receivable, less allowance
for doubtful accounts of $70,000
in 1996 and $ 0 in 1995 399,792 9,746
Notes Receivable 973,348 108,515
Inventories 660,367 10,637
Deferred Tax Asset, net of
valuation allowance - -
Other Current Assets 38,470 3,193
2,086,434 137,579
PROPERTY & EQUIPMENT, at cost:
Manufacturing Equipment 529,028 10,218
Leasehold Improvements 152,395 4,972
Furniture, Fixtures & Office Equipment 78,249 30,813
Vehicles 26,689 -
786,361 46,003
Less accumulated depreciation
and amortization (185,508) (9,371)
600,853 36,632
OTHER ASSETS:
License Fee, net of accumulated
amortization 331,042 -
Investments 60,000 -
Deferred Tax Asset, net of
valuation allowance - -
Due from Officer 140,398 27,203
Other 19,878 6,322
551,318 33,525
Total Assets $ 3,238,605 $ 207,736
The accompanying notes to consolidated financial statements
are an integral part of these consolidated balance sheets.
BERNSTEIN/LEIBSTONE ASSOCIATES, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1996 AND 1995
(Continued)
1996 1995
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable $ 944,251 $ 13,352
Deposits Payable 102,834 -
Note Payable 150,000 -
Accrued Expenses 300,820 2,857
1,497,905 16,209
MINORITY INTEREST 928,002 -
SHAREHOLDERS' EQUITY:
Common Stock, $.01 par value; 20,000,000
shares authorized, 17,391,700 shares
issued and outstanding at March 31, 1996 173,917 -
Common Stock, no par value, 20,000,000
shares authorized, 4,220,000 shares
issued and outstanding at March 31, 1995 - 320,230
Additional Paid-in Capital 1,335,016 -
Accumulated (Deficit) (696,235) (128,703)
812,698 191,527
Total Liabilities & Shareholders Equity $ 3,238,605 $ 207,736
The accompanying notes to consolidated financial statements
are an integral part of these consolidated balance sheets.
BERNSTEIN/LEIBSTONE ASSOCIATES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1996
AND FROM INCEPTION (SEPTEMBER 20, 1994) TO MARCH 31, 1995
1996 1995
Net Sales $ 3,233,096 $ 4,371
Cost of Sales 2,698,251 10,873
534,845 (6,502)
Selling, General and Administrative Expenses 1,534,471 139,443
Loss from Operations 999,626 145,945
Other Expense (Income):
Interest Income (75,396) (5,110)
Interest Expense 14,804 -
Other, net (13,035) (12,132)
(73,627) (17,242)
Net Loss Before Income Taxes and
Minority Interest 925,999 128,703
Provision for Income Taxes - -
Minority Interest 358,467 -
Net Loss $ 567,532 $ 128,703
Net Loss per Share $ .03 $ .03
Weighted Average Common Shares Outstanding 16,223,481 4,220,000
The accompanying notes to consolidated financial statements
are an integral part of these consolidated statements.
<TABLE>
BERNSTEIN/LEIBSTONE ASSOCIATES, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEAR ENDED MARCH 31, 1996
AND FROM INCEPTION (SEPTEMBER 20, 1994) TO MARCH 31, 1995
<CAPTION>
Common Stock Common Stock
Additional
$.01 Par Value No Par Value
Paid-in Accumulated
Shares Amount Shares Amount
Capital Deficit
<S> <C> <C> <C> <C> <C>
<C>
Balance at September 20, 1994 - $ - - $ - $
- $ -
Initial issuance of common
stock to company founders 3,220,000 87,730
Issuance of common stock in
connection with private
placement memorandum 1,000,000 232,500
Net (Loss)
(128,703)
Balance at March 31, 1995 - $ - 4,220,000 $ 320,230 $
- $ (128,703)
Acquisition of interest in
Clearshield Manufacturing
Corp 9,071,700 247,355
Business combination with
Archway Capital Inc. 17,391,700 173,917 (13,291,700) (567,585)
1,335,016
Net (Loss)
(567,532)
Balance at March 31, 1996 17,391,700 $173,917 - $ -
$1,335,016 $ (696,235)
The accompanying notes to consolidated financial statements are an integral
part of these consolidated statements.
</TABLE>
BERNSTEIN/LEIBSTONE ASSOCIATES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED MARCH 31, 1996
AND FROM INCEPTION (SEPTEMBER 20, 1994) TO MARCH 31, 1995
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (567,532) $ (128,703)
Adjustments to reconcile net (loss)
to net cash provided by (used in)
operating activities:
Minority Interest (358,467) -
Depreciation and Amortization 140,061 9,722
(Increase) in Accounts Receivable (361,793) (9,746)
(Increase) in Inventories (629,730) (10,637)
(Increase) in Other Assets (11,515) (9,866)
Increase in Accounts and
Deposits Payable 885,362 13,352
Increase in Accrued Expenses 206,022 2,857
Common stock of majority owned subsidiary
issued in exchange for services 26,333 -
Net cash (used in)
operating activities (671,259) (133,021)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Property and Equipment (331,963) (46,003)
(Increase) in Notes Receivable - (108,515)
(Increase) in Due from Officer (93,710) (27,203)
Net cash (used in)
investing activities (425,673) (181,721)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of Common Stock - 320,230
Proceeds from issuance of common stock
by majority owned subsidiary 1,099,417 -
Cash acquired in acquisition of Clearshield 6,484 -
Net cash provided by
financing activities 1,105,901 320,230
NET INCREASE (DECREASE) IN CASH 8,969 5,488
CASH, AT BEGINNING OF PERIOD 5,488 -
CASH, AT END OF PERIOD $ 14,457 $ 5,488
The accompanying notes to consolidated financial statements
are an integral part of these consolidated statements.
BERNSTEIN/LEIBSTONE ASSOCIATES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996 AND 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The Entity:
On July 7, 1995, Bernstein/Leibstone Associates, Inc.(the "Company"),
Archway Capital, Inc. ("Archway") and William Leibstone Associates, Inc.
("WLAI"), an entity owned by the former majority stockholder of the
Company, entered into an agreement to exchange shares of the Company's
common stock for shares of Archway's common stock on a one-for-one basis.
On July 14, 1995, all 13,291,700 outstanding shares of Archway were
exchanged by the shareholders for restricted shares issued by the
Company. The agreements further provided for the sale of the former
operating divisions to WLAI in exchange for a note. The share exchange
with Archway and the disposition of the former operating divisions have
been accounted for in accordance with APB Opinion No. 16. As such, the
consolidated financial statements include the accounts of Archway, its
wholly and majority owned subsidiaries, and the Company from the date of
its acquisition. All intercompany accounts and transactions have been
eliminated in consolidation.
Archway was formed in September 1994 as a holding company for the purpose
of investing in other businesses and providing management expertise in
such subsidiaries with the intention of developing new products, ideas
and techniques in areas of business clearly identified as unique or niche
markets. In October 1994, International Fire Safety Products, Inc., a
wholly owned subsidiary, was organized for the purpose of manufacturing
retardant technology products in a variety of forms. In April 1995,
Archway acquired a majority interest in Clearshield Manufacturing Corp.
("Clearshield"), a company engaged in the manufacturing, sale and
distribution of a patented clear hurricane shutter system. Clearshield's
wholly owned subsidiaries, Clearshield of Palm Beach County, Inc. and
Palmco Builders Inc. are engaged in the retail sale and installation of
hurricane protection products, respectively. In October 1995, PC
International Trading Corp., a wholly owned subsidiary of Archway, was
organized for the purpose of distributing recycled plastic and hardware
supplies.
The Company and all of its subsidiaries are located in the City of
Riviera Beach, Palm Beach County, Florida.
Cash and Cash Equivalents
For purposes of reporting cash flows, cash and cash equivalents includes
cash in banks.
Accounts Receivable
The Company's Clearshield of Palm Beach County, Inc. subsidiary uses the
completed contract method of accounting for financial reporting purposes.
Revenues and costs are recognized when the contract is substantially
completed. Most contracts are of short duration taking only a few days
to complete once the work commences. Contract deposits are recorded as a
liability until the contract is substantially completed. Costs incurred
on contracts in progress are not material at March 31, 1996.
Inventories
Inventories are stated at the lower of cost (first-in, first-out) or
market. Inventories by major class are as follows:
1996 1995
Raw Materials $ 106,895 $ -
Finished Goods 553,472 10,637
$ 660,367 $ 10,637
Property & Equipment
Property and equipment is recorded at cost and depreciated using the
straight line method over the estimated useful lives of the assets.
Leasehold improvements are depreciated over the shorter of the estimated
life of the asset or the term of the lease. Depreciable lives by asset
class are as follows:
Manufacturing Equipment 3 to 7 years
Leasehold Improvements 3 to 4 years
Furniture, Fixtures & Office Equipment 5 to 7 years
Vehicles 5 years
License Fee
The Company's Clearshield subsidiary has entered into a License Agreement
with Clearshield, Inc., an affiliate through common shareholders,
providing exclusive rights to manufacture and distribute a patented
hurricane shutter system throughout the state of Florida. The cost of
the License was $350,000 and is being amortized over the twenty year life
of the agreement. Additionally, the License Agreement provides for the
payment of a royalty based on sales of the patented product. Royalty
expense for the year ended March 31, 1996 was approximately $88,600.
Investments
Long term investments consist of a parcel of land held for resale and two
mortgage notes.
Income Taxes
Income taxes are provided for the tax effects of transactions reported in
the financial statements in accordance with Financial Accounting Standard
No. 109, "Accounting for Income Taxes". This accounting standard
requires the asset and liability method of accounting for income taxes
and the recognition of future tax costs and benefits measured by enacted
tax rates attributed to taxable and deductible temporary differences, net
operating loss carryforwards and tax credits to the extent that
realization of such costs and benefits is more likely than not to occur.
Restricted Stock
As of March 31, 1996, there were 17,391,700 common shares issued and
outstanding. Of these shares, 13,291,700 are restricted shares under
Rule 144 of the Securities Act of 1933.
Net (Loss) per Share
Net (Loss) per share is computed on the basis of the weighted average
number of common and common equivalent shares outstanding during each
period. There were no common equivalent shares outstanding during the
years ended March 31, 1996 and 1995.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect reported amounts. Actual results may differ from
reported amounts.
Concentration of Credit Risk
The Company operates within one business segment with the majority of its
sales in the state of Florida. The Companys largest customer, a national
retail home improvement chain accounted for 30% of consolidated sales for
the year ended March 31, 1996. There were no sales to this customer for
the year ended March 31, 1995.
2. ACQUISITIONS AND DIVESTITURES
On July 7, 1995, the Company, Archway and WLAI, an entity owned by the
former majority stockholder of the Company, entered into an agreement to
exchange shares of the Company's common stock for shares of Archway's
common stock on a one-for-one basis. On July 14, 1995, all 13,291,700
outstanding shares of Archway were exchanged by the shareholders for
restricted shares issued by the Company. In connection with the above
referenced agreement, the Company sold the net operating assets of its
textile and packaging divisions to WLAI. WLAI Issued a note to the
Company in the amount of $941,348 which is secured by 1,100,000 shares of
stock of the Company owned by William Leibstone. The note is for a term
of three years and bears interest at the rate of 9% per annum, compounded
quarterly. The fair value of the Company as acquired was determined to
be its net book value considering the values of the securities exchanged
and the agreement to sell the net operating assets of the former
operating divisions.
Effective April 1, 1995, Archway acquired a majority interest in
Clearshield, a Florida corporation in the business of manufacturing clear
polycarbonate hurricane protection panels, utilizing a three-for-one
share exchange. Archway issued 9,071,700 shares to the shareholders of
Clearshield in exchange for 3,023,900 shares of Clearshield which equaled
69% of the then issued and outstanding shares of Clearshield. The fair
value of the shares issued for the interest in Clearshield was determined
to be the net book value of the interest acquired.
The acquisitions of the Company and Clearshield by Archway have been
accounted for using the purchase method in accordance with APB Opinion
No. 16. Accordingly, the accompanying Statements of Operations includes
the results of operations for the Company and Clearshield from their
respective acquisition dates. The following unaudited Pro Forma
Condensed Combined Statement of Operations for the year ended March 31,
1995 reflects the above acquisitions and divestiture as if they had
occurred on April 1, 1994.
Historical Historical Historical Pro Forma
Company Archway Clearshield Adjustments Pro Forma
Net Sales $2,762,712 $ 4,371 $ 455,267 $(2,762,712) $ 459,638
Cost of Sales 2,162,391 10,873 453,049 (2,162,391) 463,922
600,321 (6,502) 2,218 (600,321) (4,284)
Selling, General
and Administrative
Expenses 926,081 139,443 657,865 (926,081) 797,308
Net Loss from
Operations 325,760 145,945 655,647 (325,760) 801,592
Interest Income 56,203 5,110 1,821 (56,203) 6,931
Other, net 44,402 12,132 - (44,402) 12,132
Net Loss Before
Income Taxes
and Minority
Interest 313,959 128,703 653,826 (313,959) 782,529
Provision for
Income Taxes 89,771 - - (89,771) -
Minority
Interest - - - (202,686) (202,686)
Net Loss $ 403,730 $ 128,703 $ 653,826 $ (606,416) $ 579,843
Net Loss
per Share $ 0.10 $ 0.03 $ 0.15 $ 0.03
3. DUE FROM OFFICER
The Company has advanced funds to its Chief Executive Officer and a
corporation in which he is the sole shareholder. Total advances as of March
31, 1996 were $140,398.
4. NOTES PAYABLE
Notes payable at March 31, 1996 consists of a note payable to Clearshield,
Inc. amounting to $150,000 representing a portion of the cost of the
License Agreement with the Company's Clearshield subsidiary. The terms of
the note provide for payment in twelve monthly installments commencing in
October 1995 with interest at eight percent. No payments have been made on
the note as of March 31, 1996.
5. LEASE COMMITMENTS
The Company leases certain of its facilities and vehicles under operating
leases. Future minimum lease payments as of March 31, 1996 are as follows:
Year ending March 31,
1997 $ 154,014
1998 198,535
1999 147,411
2000 118,433
2001 119,346
Thereafter 261,658
$ 999,397
Total rental expense for operating leases charged to operations was
approximately $105,000 in 1996 and $8,000 in 1995.
6. INCOME TAXES
The components of the provision for income taxes for the years ended March
31, 1996 and 1995 are comprised of the following:
1996 1995
Current:
Federal $ - $ -
State - -
- -
Deferred:
Federal - -
State - -
- -
$ - $ -
The components of the net deferred tax assets and liabilities and the
related tax effects as of March 31, 1996 and 1995 are comprised of the
following:
1996 1995
Current Deferred Tax Assets:
Bad debts $ 27,003 $ -
Inventory 13,206 2,628
Total Current Deferred Tax Assets 40,209 2,628
Less Valuation Allowance (40,209) (2,628)
Net Current Deferred Tax Assets - -
Noncurrent Deferred Tax Assets:
Property & equipment - 972
Loss carryforwards 914,984 34,000
Total Noncurrent Deferred Tax Assets 914,984 34,972
Less Valuation Allowance (914,984) (34,972)
Net Noncurrent Deferred Tax Assets - -
Net Deferred Tax Assets $ - $ -
For tax return purposes, the Company and its subsidiaries have net operating
loss carryforwards approximating $2,416,000 that expire beginning in the
year 2010. Due to limitations on the utilization of loss carryforwards
resulting from ownership changes and separate return limitations and the
uncertainty that the Company and its subsidiaries will be able to utilize
the net operating losses and temporary differences to offset future taxable
income, a 100% valuation allowance has been recorded against the deferred
tax assets.
7. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
1996 1995
Interest Paid $ 5,924 $ -
Income Taxes Paid - -
8. LITIGATION
The Company's Clearshield subsidiary is a party in a lawsuit entitled Clear
Investments, Inc. v. Clearshield Manufacturing Corp., Case No. CL 94-5898
AF. now pending in the Circuit Court of the Fifteenth Judicial Circuit in
and for Palm Beach County, Florida, where a former director and attorney for
Clearshield, through his company, Clear Investments, Inc. has filed suit to
receive 600,000 shares of stock of Clearshield that were originally
allocated to him. Subsequent to that time, the former director and attorney
resigned from Clearshield as director and attorney. The Company has
retained counsel and believes they have a meritorious defense to the
allegations contained in the complaint.
Not withstanding the above, in September 1996, settlement in principle was
reached in this matter, subject to documentation and execution of a
settlement agreement. A motion was filed to abate the case and the court
has entered an order closing the file for administrative purposes, while
retaining jurisdiction for the purpose of enforcing the settlement. No
adjustments have been made in the accompanying financial statements
regarding this matter.
9. SUBSEQUENT EVENT
On May 22, 1996, the Company, WLAI, William Leibstone and TTSB, Ltd., an
Ohio limited liability company ("TTSB") entered into an agreement whereby
TTSB purchased the WLAI note dated July 14, 1995 in the amount of $941,348,
in exchange for a note from TTSB in the amount of $1,013,663. The TTSB note
bears interest at the rate of 9% per annum, payable semi-annually, is due on
May 22, 1998 and is secured by a pledge of 506,000 shares of stock in the
Company assigned to TTSB by William Leibstone, which shares are being held
by a financial intermediary on behalf of the Company. Under the terms of
the Stock Pledge Agreement of the same date between the Company and TTSB,
the Company can request partial prepayments of the note, which prepayments
will be made with the proceeds of sales of the pledged shares. TTSB shall
not be obligated to sell the pledged shares or make the prepayment unless it
receives at least $2.28 per share for the first 200,000 shares and $2.50 for
the remaining shares. The Company receives the first $2.00 per share as
prepayment on the note. As of June 30, 1996, TTSB has sold 416,500 of the
pledged shares, making prepayments on the note totalling $833,000.
As part of the above agreement, William Leibstone made a loan to the Company
totalling $100,000. The loan, plus accrued interest at the rate of 7% per
annum, is payable on May 22, 1997.
Item 9. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure
The information required by this item has been previously reported on Form
8-K dated November 6, 1995 which is herein incorporated by reference.
PART III
Item 10. Directors and Executive Officers of the Registrant
The directors and executive officers of the Company are as follows:
Director
Name Age Position Since
Darrell L. Peterson 37 Chief Executive Officer, Director 1995
Patrick T. Sullivan 40 President, Director 1995
John D. Herter 46 Treasurer, Director 1995
Garey Herter 53 Secretary, Director 1995
Bruce Livergood 54 Director 1995
Darrell L. Peterson, was Vice President and Chief Financial Officer of the
Marbledge Group, Inc. and its subsidiaries from 1993 to 1994 and President of
one of it's subsidiaries from 1991 to 1994 before joining the Company.
Marbledge and its subsidiaries were involved in the manufacture, sales and
distribution of natural stone products. Mr. Peterson has also worked in the
real estate development business and securities business. Mr. Peterson has a
B.S. degree in Accounting from Long Island University and currently serves on
the Board of Directors of Clearshield, Inc. and H & H Ventures, Inc., a
business consulting firm.
Patrick T. Sullivan, joined the Company as President of Clearshield
Manufacturing Corp. From 1987 to 1994, Mr. Sullivan was a First Vice
President at both Prudential Securities and Smith Barney and is a Registered
Investment Advisor. Mr. Sullivan was President and owner of Sullivan
Construction, a builder of single and multi-family housing from 1982 to 1987.
Mr. Sullivan is a graduate of Emery Riddle University where he earned a B.S.
degree in Management.
John D. Herter, was the initial incorporator and President of Archway Capital
Inc. During the first half of 1994, Mr. Herter was the President and Chief
Executive Officer for Lamplighter Industries Inc., a company engaged in the
manufacture and distribution of electroluminescent lighting panels. From 1991
to 1994, Mr. Herter was Director of Operations at Brooklyn Bow International,
Inc., a manufacturer of soft goods for intimate apparel, children's wear and
specialty packaging. Mr. Herter has a B.A. degree from the University of
Southern California and is a Vice President of H & H Ventures, Inc. a business
consulting firm.
Garey Herter, currently serves on the Board of Directors of Clearshield, Inc.,
PRIDE Inc., a not-for-profit probation services company and H & H Ventures,
Inc., a business consulting firm of which he is also the President. Mr.
Herter was Chief Administrative Assistant to the Public Defender, Fifteenth
Judicial Circuit, for the State of Florida from 1984 to 1993. Prior to that
time, Mr. Herter had a career in the United States Navy from which he retired
as a Chief Petty Officer in 1984.
Bruce Livergood, has been the owner of Design Electrical Construction, Inc.,
an electrical design and construction company with a wide range of expertise
in all phases of the electrical industry since 1977. He is an active member
of Associated Builders and Contractors of Palm Beach County, Electrical
Contractors of Florida and the International Association of Electrical
Inspectors. During the 1980's, Mr. Livergood was also the owner of Baker
Knight Industries, a steel processing operation, and Adolescent Recovery
Centers, a 28-bed accredited hospital treatment facility.
Item 11. Executive Compensation
The following table sets forth certain information with respect to the
annual compensation of the Company's Chief Executive Officer for the year
ended March 31, 1996. Payments were made either directly to the officer or to
a corporation in which he is the sole shareholder. No other executive officer
received compensation exceeding $100,000.
Annual Compensation
Name and Other
Principal Position Salary Compensation
Darrell L. Peterson,
Chief Executive Officer $67,600 $34,200 (1)
(1) Other compensation includes a bonus for past uncompensated services and
Company provided group insurance.
The directors of the Company do not receive compensation for serving in that
capacity. They are reimbursed for certain travel related and other out-of-
pocket expenses incurred to attend Board of Directors and stockholder
meetings.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information as of June 30, 1996 with respect
to the beneficial ownership of shares of common stock by (i) each person known
by the Company to be the owner of more than five percent of the outstanding
shares of common stock, (ii) the Company's Chief Executive Officer, (iii) each
director of the Company, and (iv) all executive officers and directors of the
Company as a group.
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
Darrell L. Peterson
Chief Executive Officer ,
Director
2001A Australian Ave.
Riviera Beach, FL 33404 3,480,000 (1) 20.01%
Patrick T. Sullivan
President, Director
2001A Australian Ave.
Riviera Beach, FL 33404 - - %
John D. Herter
Treasurer, Director
2001A Australian Ave.
Riviera Beach, FL 33404 144,000 .83%
Garey Herter
Secretary, Director
2001A Australian Ave.
Riviera Beach, FL 33404 3,540,000 (1) 20.35%
Bruce Livergood
Director
1002 S.E. First Street
Boynton Beach, FL 33412 806,200 4.64%
Gregory Kostrzecha
2001A Australian Ave.
Riviera Beach, FL 33404 1,260,000 7.24%
Alan Singler
407 Elm Street
Terrace Park, OH 45174 1,153,050 6.63%
All Executive Officers and
Directors as a Group
(Five Persons) 7,370,200 42.38%
(1) Includes 600,000 shares owned by a company controlled by Mr. Peterson
and Mr. Herter.
Item 13. Certain Relationships and Related Transactions
The Company has advanced funds to its Chief Executive Officer and a
corporation in which he is the sole shareholder. Total advances as of March
31, 1996 were $140,398.
The Company's Clearshield subsidiary has entered a License Agreement with
Clearshield, Inc., an affiliate through common shareholders. The cost of the
License Agreement was $350,000 plus a royalty on certain sales. Royalty
expense for the year ended March 31, 1996 was approximately $88,600.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) The following documents are filed as part of this report:
1. The Consolidated Financial Statements together with Report of
Independent Certified Public Accountants are filed as Item 8 of this
report.
2. Schedule of Consolidated Valuation and Qualifying Accounts is filed as
part of this report as page 28 following the signature page.
3. Exhibits
Exhibit No. Description
2.1 Master Agreement dated July 7, 1995 by and among
Bernstein/ Leibstone Associates, Inc., William Leibstone
Associates, Inc., and Archway Capital Inc. was filed as
Exhibit 1 to Form 8-K/A dated July 14, 1995 and is
herein incorporated by reference.
2.2 Asset Exchange Agreement dated July 14, 1995 by and
among Bernstein/Leibstone Associates, Inc., William
Leibstone Associates, Inc., and William Leibstone was
filed as Exhibit 2 to Form 8-K/A dated July 14, 1995 and
is herein incorporated by reference.
3.1 Restated Certificate of Incorporation of
Bernstein/Leibstone Associates, Inc. was filed as an
Exhibit to the Company's Registration Statement on Form
S-18 filed on April 4, 1989 and is herein incorporated
by reference.
3.2 Bylaws of Bernstein/Leibstone Associates, Inc. was filed
as an Exhibit to the Company's Registration Statement on
Form S-18 filed on April 4, 1989 and is herein
incorporated by reference.
4.1 Form of Common Stock Certificate of Bernstein/Leibstone
Associates, Inc. was filed as an Exhibit to the
Company's Registration Statement on Form S-18 filed on
April 4, 1989 and is herein incorporated by reference.
10.1 License Agreement between Clearshield, Inc. and
Clearshield Manufacturing Corp. dated March 10, 1995.
10.2 Lease for Riviera Beach, Florida manufacturing facility
dated April 1, 1994.
10.3 Lease for Riviera Beach, Florida distribution facility
dated July 22, 1996.
10.4 Agreement dated May 22, 1996 by and among the Company,
TTSB, Ltd., William Leibstone Associates, Inc.,and
William Leibstone.
11.1 Statement regarding computation of per share earnings
21.1 Subsidiaries of Registrant
27 Financial Data Schedule
(b) No reports on Form 8-K were filed for the three month period ended
March 31, 1996.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
BERNSTEIN/LEIBSTONE ASSOCIATES, INC.
By: /s/ Darrell Peterson Date: October 31, 1996
Darrell Peterson, Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By: /s/ Darrell Peterson Date: October 31, 1996
Darrell Peterson, Chief Executive Officer,
Chief Accounting Officer and Director
By: /s/ Patrick T. Sullivan Date: October 31, 1996
Patrick T. Sullivan, President and Director
By: /s/ John D. Herter Date: October 31, 1996
John D. Herter, Treasurer and Director
By: /s/ Garery Herter Date: October 31, 1996
Garey Herter, Secretary and Director
By: /s/ Bruce Livergood Date: October 31, 1996
Bruce Livergood, Director
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors
and Shareholders
Bernstein/Leibstone Associates, Inc.
& Subsidiaries
Riviera Beach, Florida
We have audited the financial statements of Bernstein/Leibstone Associates,
Inc. & Subsidiaries as of March 31, 1996 and 1995 and for the years then
ended, and have issued our report thereon dated October 22, 1996; such
financial statements and report are included elsewhere in this Form 10-K. Our
audits also included the financial statement schedules of Bernstein/Leibstone
Associates, Inc. & Subsidiaries, listed in Item 14. These financial statement
schedules are the responsibility of the Corporation's management. Our
responsibility is to express an opinion based on our audits. In our opinion,
such financial statement schedules, when considered in relation to the basic
financial statements taken as a whole, present fairly in all material respects
the information set forth therein.
October 22, 1996 /s/ Michaelson & Co. P.A.
<TABLE>
BERNSTEIN/LEIBSTONE ASSOCIATES, INC.
FORM 10-K FOR THE YEAR ENDED MAR CH 31, 1996
Schedule of Consolidated Valuati on
and Qualifying Accounts
<CAPTION>
Additions
Balance at charged to Deductions
Balance at
beginning costs and from
end
Description of year expenses Reserves Other
Additions of year
<S> <C> <C> <C> <C>
<C>
Year ended March 31, 1996:
Reserves deducted from assets
to which they apply:
Allowance for doubtful
accounts $ - 67,393 8,393 11,000
<F1> $ 70,000
Year ended March 31, 1995:
Reserves deducted from assets
to which they apply:
Allowance for doubtful
accounts $ -
$ -
<FN>
<F1>
Clearshield Manufacturing Corp. reserve aquired.
</FN>
</TABLE>
BERNSTEIN/LEIBSTONE ASSOCIATES, INC.
FORM 10-K FOR THE YEAR ENDED MARCH 31, 1996
INDEX TO EXHIBITS
Exhibit No. Description Page
2.1 Master Agreement dated July 7, 1995 by and among
Bernstein/ Leibstone Associates, Inc., William
Leibstone Associates, Inc., and Archway Capital Inc.
was filed as Exhibit 1 to Form 8-K/A dated July 14,
1995 and is herein incorporated by reference.
2.2 Asset Exchange Agreement dated July 14, 1995 by and
among Bernstein/Leibstone Associates, Inc., William
Leibstone Associates, Inc., and William Leibstone was
filed as Exhibit 2 to Form 8-K/A dated July 14, 1995
and is herein incorporated by reference.
3.1 Restated Certificate of Incorporation of
Bernstein/Leibstone Associates, Inc. was filed as an
Exhibit to the Company's Registration Statement on
Form S-18 filed on April 4, 1989 and is herein
incorporated by reference.
3.2 Bylaws of Bernstein/Leibstone Associates, Inc. was
filed as an Exhibit to the Company's Registration
Statement on Form S-18 filed on April 4, 1989 and is
herein incorporated by reference.
4.1 Form of Common Stock Certificate of
Bernstein/Leibstone Associates, Inc. was filed as an
Exhibit to the Company's Registration Statement on
Form S-18 filed on April 4, 1989 and is herein
incorporated by reference.
10.1 License Agreement between Clearshield, Inc. and
Clearshield Manufacturing Corp. dated March 10, 1995.
10.2 Lease for Riviera Beach, Florida manufacturing
facility dated April 1, 1994.
10.3 Lease for Riviera Beach, Florida distribution facility
dated July 22, 1996.
10.4 Agreement dated May 22, 1996 by and among the Company,
TTSB, Ltd., William Leibstone Associates, Inc.,and
William Leibstone.
11.1 Statement regarding computation of per share earnings
21.1 Subsidiaries of Registrant
<TABLE>
Exhibit 11.1
BERNSTEIN/LEIBSTONE ASSOCIATES, INC.
FORM 10-K FOR THE YEAR ENDED MARCH 31, 1996
Calculation of Weighted Average Number of Common Shares Outstanding
<CAPTION>
Common Common
Weighted Average
Share Shares Days Weighted
Average Number of
Activity Outstanding Outstanding Numberof
Shares Shares Outstanding
<S> <C> <C> <C> <C>
<C>
Balance, September 20, 1994 -
Issuance of common shares 4,220,000 4,220,000 192
Balance, March 31, 1995 4,220,000 -
4,220,000
Aquisition of interest in
Clearshield 9,071,700 13,291,700 104 3,787,224
Business combination with
Archway 4,100,000 17,391,700 261 12,436,257
Balance, March 31, 1996 17,391,700
16,223,481
</TABLE>
Exhibit 21.1
BERNSTEIN/LEIBSTONE ASSOCIATES, INC.
FORM 10-K FOR THE YEAR ENDED MARCH 31, 1996
Subsidiaries of Registrant
Name State of Incorporation
Archway Capital, Inc. Florida
International Fire Safety Products, Inc. Florida
PC International Trading Corp. Florida
Clearshield Manufacturing Corp. Florida
Clearshield of Palm Beach County, Inc. Florida
Palmco Builders, Inc. Florida
EXHIBIT 10.1
LICENSE AGREEMENT
THIS AGREEMENT made as of this 10th day of March, 1995,
between CLEARSHIELD, INC., a Florida corporation ("LICENSOR") and
CLEARSHIELD MANUFACTURING CORP., a Florida corporation
("LICENSEE").
WITNESSETH:
WHEREAS:
1. LICENSOR owns the trademark and service mark
"CLEARShield", and the logo attached hereto as Exhibit "A"
(hereinafter collectively referred to as the "MARK"), and such
MARK has been registered by LICENSOR in connection with a
polycarbonate hurricane protection shutter;
2. LICENSOR owns, or has made application for, a utility
patent for the invention, entitled STORM SHUTTER ASSEMBLY (the
"PATENT"); and
3. LICENSEE desires to use the MARK and PATENT in
connection with the manufacture and distribution of the
polycarbonate hurricane protection shutter.
NOW, THEREFORE, in consideration of the mutual promises
herein contained and other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties
hereto agree as follows:
1. GRANT OF LICENSE. Upon the terms and conditions
hereinafter set forth, LICENSOR hereby grants to LICENSEE a non-
exclusive, non-transferable license to use the MARK in its trade
name and the PATENT in conjunction with the Business of
manufacturing, selling and installing the storm shutter assembly.
LICENSEE is authorized to use the MARK and PATENT solely and only
in connection with the Business and LICENSEE has no right to
utilize the MARK or PATENT for any other purpose. This License
is limited to use of the MARK and PATENT and does not extend to
any other MARK or PATENT now or hereafter owned by LICENSOR.
This License is limited to use of the MARK and PATENT by
the LICENSEE for the State of Florida.
In the event that the PATENT is not granted, this LICENSE
shall be adjusted proportional to the values of the PATENT as of
the date of signing of this agreement. Such reduced value will be
a percentage reduction of the total fees paid of $350,000 in cash
and stock. The adjusted price will be determined by a mutually
agreed upon appraiser deemed to have experience in matters of
patent valuation. Such valuation must be initiated within 60 days
of notification of denial or limitation of the patent applied
for. LICENSOR does not make any representations as to whether or
not the PATENT will be granted.
2. OWNERSHIP OF MARK AND/OR PATENT. LICENSEE acknowledges
LICENSOR'S ownership of and exclusive rights in the MARK and
PATENT and the great value of the goodwill associated with the
MARK and PATENT. LICENSEE will do nothing inconsistent with the
ownership of the MARK and PATENT by the LICENSOR and all uses of
the MARK and PATENT by LICENSEE shall inure to the benefit of and
be on behalf of the LICENSOR. In connection with the use of the
MARK and PATENT, LICENSEE shall not in any manner represent that
it has any ownership in the MARK or PATENT or any registration
thereof. Nothing in this License shall give LICENSEE any right,
title or interest in the MARK or PATENT other than the right to
use the MARK or PATENT in accordance with this License. LICENSEE
will not attack the title of LICENSOR to the MARK or PATENT or
attack the validity of this License. Whenever licensee uses the
MARK in advertising or any other manner, licensee shall clearly
indicate the licensor's ownership of the MARK.
This Agreement does not, and is not intended to, create any
joint venture or agency relationship between the LICENSOR and
LICENSEE. LICENSEE has no right to bind LICENSOR in any manner
whatsoever to any agreement or undertaking. This Agreement is
being entered into for the sole and limited purpose of granting
LICENSEE a right to use the MARK or PATENT on the terms and
conditions stated herein. LICENSOR is not and shall not be
responsible for any acts or omissions of LICENSEE.
3. CONSIDERATION AND METHOD OF PAYMENT. For and in
consideration of LICENSOR granting to LICENSEE the right to use
the MARK and PATENT pursuant to the terms and conditions
contained herein, LICENSEE agrees to pay to LICENSOR the sum of
Three Hundred Fifty Thousand ($350,000.00) Dollars as follows:
(a) The sum of One Hundred Thousand ($100,000.00) Dollars
shall be paid to LICENSOR within fifteen (15) days of execution
of this Agreement and the notification of a majority vote of the
LICENSOR'S shareholder's as to approval of this agreement in its
entirety, less any sums spent on manufacture and research and
development of the product and tooling, such schedule to be made
a part of this agreement (Schedule A);
(b) One Hundred Fifty Thousand ($150,000.00) Dollars,
together with interest at the rate of eight (8%) percent per
annum, shall be payable in twelve(12) monthly payments from date
of execution of this Agreement and the notification of a majority
vote of the LICENSOR'S Shareholder's as to approval of this
agreement in its entirety, or the approval of the patent
application whichever is later.
(c) Additionally, LICENSEE agrees to issue to LICENSOR
100,000 shares of common stock. Said stock to have all existing
rights of current shareholders. Said stock to be issued within 15
days of execution of this agreement and the notification of a
majority vote approval of the shareholders of the LICENSOR of
this agreement in its entirety.
4. QUALITY STANDARDS AND CONTROL. LICENSEE agrees that
the nature and quality of all facilities, services and goods
rendered by LICENSEE in connection with the MARK or PATENT shall,
at all times, be first class and of superior standards. In no
case shall such use fall below such standards. In the event such
services do fall below such standards, the LICENSOR may terminate
this License in accordance with Paragraph 8 herein.
LICENSEE shall comply with all applicable laws and
regulations and obtain all appropriate governmental approvals
pertaining to the sale, distribution and advertising of goods or
services covered by this License.
5. FORM OF USE. LICENSEE shall use the MARK and PATENT
only in a form and manner which meets with LICENSOR's express
approval. LICENSEE shall maintain a file containing all
materials of any type utilizing the MARK or PATENT for LICENSOR's
inspection upon request and agrees to forego any use of the MARK
or PATENT which LICENSOR deems objectionable. As to any proposed
materials which have been approved, LICENSEE shall not depart
therefrom in any material respect without LICENSOR's prior
written consent. LICENSEE's use of any such materials containing
the MARK or PATENT after notice that LICENSOR objects to such use
shall entitle LICENSOR to terminate this Agreement pursuant to
Paragraph 8 below. LICENS0R may withdraw its approval of any
materials using the MARK or PATENT, for any reason, upon sixty
(60) days prior written notice to LICENSEE. As to any materials
for which approval is withdrawn LICENSEE shall make diligent
efforts to remove all such materials from public view or
circulation as quickly as possible and LICENSOR shall reimburse
LICENSEE for LICENSEE's actual cost of such materials removed.
6. INFRINGEMENT. LICENSEE agrees not to engage in any
conduct which infringes the MARK or PATENT or constitutes unfair
competition with the LICENSOR by means of the use of the MARK or
PATENT. LICENSEE shall notify LICENSOR of any unauthorized use
of the MARK or PATENT by others, as soon as it comes to
LICENSEE's attention. LICENSOR shall have the sole right and
discretion to bring infringement or unfair competition
proceedings involving the MARK or PATENT.
7. TERM. This License shall continue in full force and
effect for an initial period of twenty (20) years, from the
effective date hereof, unless sooner terminated in accordance
with the provisions hereof. At the end of the initial term, the
License shall be automatically renewed for additional ten (10)
Year terms unless either party, at least sixty (60) days prior to
the end of any ten (10) year term gives written notice to the
other party of termination of this License.
8. DEFAULT. If either LICENSOR or LICENSEE shall fail to
perform any of the terms or conditions of this agreement, and
such failure or breach shall not be cured within thirty (30) days
after giving written notice thereof, the other party shall have
the right to terminate this AGREEMENT, without thereby waiving
any rights and remedies at law or equity on account of such
default.
9. EFFECT OF TERMINATION. Upon termination of this
agreement, all rights and privileges granted LICENSEE shall
immediately terminate and LICENSEE agrees to immediately
discontinue all uses of the MARK or PATENT and any words
confusingly similar thereto, and delete the same from its
corporate or business name. LICENSEE shall destroy all printed
materials bearing the MARK or PATENT. LICENSEE shall make no
further reference to the MARK or PATENT in connection with
LICENSEE's business or advertising and will, at no future time,
adopt or use, without LICENSOR's prior written consent, a word or
mark which is likely to be similar to or confusing with the MARK
or PATENT.
10. ROYALTY. A Royalty on total gross sales of the
LICENSEE of the License and MARK shall be assessed by and paid to
the LICENSOR. This agreed upon license fee is to be seven
percent (7.0%) of panel sales, payable monthly. A minimum of
$70,000 is to be paid over a twelve month period.
In conjunction with the Royalty the LICENSOR has the right
to inspect the books and records of LICENSEE with a reasonable
time request.
11. ADVERTISING AND PROMOTION. LICENSEE hereby agrees to
maintain a minimum advertising and promotional budget to be
expended over the course of a year. Due to the seasonality of the
product expenditures will vary from month to month. A minimum of
3% on the first million dollars in sales; 2% on the second
million dollars in sales and 1% of all sales over two million
dollars must be expended during a calendar year. A minimum of
$36,000 is to be paid over a twelve month period.
Further, the LICENSOR agrees to set up a National Advertising
Fund to which the LICENSEE will contribute 3% on the first
million dollars in sales; 2% on the second million dollars in
sales and 1/2% of all sales over two million dollars. Said fees
are to be paid quarterly and are waived for the first twelve
months of this agreement. A minimum of $20,000 is to be paid over
a twelve month period.
12. INSOLVENCY. This Agreement shall be in default in the
event of any act of insolvency or bankruptcy by LICENSEE or if
LICENSEE makes any assignment for the benefit of creditors, or
upon the appointment of any receiver or trustee to take
possession of the properties of LICENSEE, or upon the winding-up
sale, consolidation, merger or any sequestration by governmental
authority of LICENSEE.
13. NO ASSIGNMENT, SUB-CONTRACT OR SUB-LICENSE BY LICENSEE.
This License and all rights and duties hereunder are personal to
LICENSEE and shall not, without the written consent of LICENSOR
be assigned, mortgaged, sub-licensed or otherwise encumbered or
transferred by LICENSEE or by operation of law unless LICENSEE
sublicensed to companies owned by the LICENSEE seventy-five (75%)
percent or more. LICENSEE shall not be permitted to license any
other person or entity to use the MARK or PATENT unless at least
seventy-five (75%) percent owned by LICENSEE. Should LICENSEE
assign, mortgage, sub-license, encumber, or transfer this
Agreement, LICENSOR shall be in default of this Agreement.
14. INDEMNIFICATION. LICENSEE hereby indemnifies to hold
LICENSOR harmless against any claims, suits, damages, costs r
attorney's fees brought against or incurred by LICENSOR rising
out of any acts or omissions by LICENSEE which are unjustifiably
attributed to LICENSOR as a result of LICENSE's use of the MARK
or PATENT.
15. ENTIRE AGREEMENT. This agreement represents the entire
understanding and agreement between the parties with respect to
the subject matter hereof, and supersedes all other negotiations,
understandings and representations made by and between such
parties.
16. AMENDMENTS. The provisions of this Agreement may not be
amended, supplemented, waived or changed orally, but only by a
writing signed by the party as to whom enforcement of any such
amendment, supplement, waiver or modification is sought and
making specific reference to this Agreement.
17. BINDING EFFECT. All of the terms and provisions of
this agreement, whether so expressed or not, shall be binding
upon, inure to the benefit of, and be enforceable by the parties
and their respective administrators, executors, legal
representatives, heirs, successors and permitted assigns.
18. NOTICES. All notices, requests, consents and other
communications required or permitted under this agreement shall
be in writing (including telex and telegraphic communication) and
shall be (as elected by the person giving such notice) hand
delivered by messenger or courier service, or mailed (airmail or
international) by registered or certified mail (postage prepaid),
return receipt requested, addressed to the address on the
signature page hereof or to such other address as any party may
designate by notice complying with the terms of this Section.
Each such notice shall be deemed delivered (a) on the date
delivered if by personal delivery, (b) on the date received if by
telegraph, (c) on the date of transmission with confirmed answer
back if by telex, and (d) on the date upon which the return
receipt is signed or delivery is refused or the notice is
designated by the postal authorities as not deliverable, as the
case may be, if mailed.
19. HEADINGS. The headings contained in this agreement are
for convenience of reference only, and shall not limit or
otherwise affect in any way the meaning or interpretation of this
Agreement.
20. SEVERABILITY. If any part of this agreement or any
other Agreement entered into pursuant hereto is contrary to,
prohibited by, or deemed invalid under applicable law or
regulation, such provision shall be inapplicable and deemed
omitted to the extent so contrary, prohibited or invalid, but the
remainder hereof shall not be invalidated thereby and shall be
given full force and effect so far as possible.
21. WAIVER. The failure or delay of any party at any time
to require performance by another party of any provision of this
Agreement, even if known, shall not affect the right of such
party to require performance of that provision or to exercise any
right, power or remedy hereunder, and any waiver by any party of
any breach of any provision of this Agreement should not be
construed as a waiver of any continuing or succeeding breach of
such provision, a waiver of the provision itself, or a waiver of
any right, power or remedy under this Agreement. No notice to or
demand on any party in any case shall, of itself, entitle such
party to any other or further notice or demand in similar or
other circumstances.
22. SPECIFIC PERFORMANCE. Each of the parties acknowledges
that the parties will be irreparably damaged (and damages,at law
would be an inadequate remedy) if this Agreement is not
specifically enforced. Therefore, in the event of a breach or
threatened breach by any party of any provision of this
agreement, the other party shall be entitled to an injunction
restraining such breach, without being required to show any
actual damage or irreparable harm or to post any bond or other
security, and to a decree for specific performance of the
provisions of this agreement. The right to an injunction and
specific performance shall be in addition to all other rights or
remedies.
23. JURISDICTION AND VENUE. Without limiting the
jurisdiction or venue of any other federal or state courts, each
of the parties irrevocably and unconditionally (a) agrees that
any suit, action or legal proceeding arising out of or relating
to this Agreement may be brought in the courts of record of the
State of Florida in Palm Beach County; (b) consents to the
jurisdiction of such court in any suit, action, or proceeding;
(c) waives any objection which it may have to the laying of venue
of such suit, action or proceeding in such court.
24. ENFORCEMENT COSTS. If any legal action or other
proceeding is brought for the enforcement of this agreement, or
because of an alleged dispute, breach, default or
misrepresentation in connection with any provision of this
Agreement, the successful or prevailing party or parties shall be
entitled to recover reasonable attorney's fees, court costs and
all expenses even if not taxable as court costs (including
without limitation all such fees, costs and expenses incident to
appeals), incurred in that action or proceeding, in addition to
any other relief to which such party or parties may be entitled.
25. REMEDIES CUMULATIVE. No remedy herein conferred upon
any party is intended to be exclusive of any other remedy, and
each and every such remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute or
otherwise. No single or partial exercise by any party of any
right, power or remedy hereunder shall preclude any other or
further exercise thereof.
26. CONSTRUCTION. This Agreement shall be construed as the
joint and equal work product of the parties hereto. No third
party is intended as a third party beneficiary hereof. This
Agreement and all transactions contemplated by this Agreement
shall be governed by, and construed and enforced in accordance
with the internal laws of the State of Florida without regard to
principles of conflicts of laws.
IN WITNESS WHEREOF, the parties have caused this, Agreement
to be duly executed as of the day and year indicated below.
CLEARSHIELD, INC.,
a Florida corporation
P.O. Box 31268
Palm Beach Gardens, FL 33420
/s/Connie Worthington
by:/s/ Gregory Kostrzecha
/s/J. Courtright Sr. Gregory Kostrzecha, President
Dated 3-10-95
CLEARSHIELD MANUFACTURING CORP.,
a Florida corporation
4900 Dyer Blvd.
Riviera Beach, FL 33407
/s/Patrick Sullivan
by:/s/ Darrell Peterson
/s/J. Courtright Sr. Darrell L. Peterson,
President
Dated:3-10-95
EXHIBIT 10.2
Business Lease
Agreement of lease, made this 1st day of April ,1994 between Southern
Mechanical Contractors, Inc.,("Landlord"), whose address is 1542 Jupiter Cove
Drive, Suite 507, Jupiter, Florida 33469 and Palm Beach Plastics
Manufacturing, Inc., a Florida Corp., ("Tenant"),9056 North Military Trail,
Suite B-9 Palm Beach Gardens, Florida 33410.
PREMISES TERM
1. Landlord hereby leases to Tenant and Tenant hereby hires from Landlord, the
following property hereinafter referred to as ("Premises"), approx. 11,000 SF
at 4900 Dyer Boulevard, Riviera Beach, Florida 33407 for the term of Two (2)
years, commencing on the 1st day of July, 1994, and ending on the 30th day of
June, 1996.
RENT CHARGES
2. Tenant agrees to pay to Landlord, in United States currency, together with
all sales and use taxes levied upon the use and occupancy of the Premises, an
Annual Rent of: $41,250.00 payable in equal monthly installments of $3,437.50
+ sales tax, in advance on the first day of each month, except that Tenant
shall pay the first monthly installment on the signing hereof. If the monthly
payment of rent is not received by Landlord within ten (10) days from the date
it is due, a "late charge" of five (5%) percent of such payment shall be due
Landlord as additional rent. If any check received by Landlord from Tenant in
payment of any amount payable by Tenant under this Lease is returned by
Landlord's bank for non-sufficient funds, or for any reason whatsoever, a
service charge of Twenty-five Dollars ($25.00) for each such check shall be
due Landlord as additional rent. All rent shall be paid to Landlord without
demand, set-off or any deduction whatsoever, at address of the Landlord
hereinabove set forth or at such place as Landlord may designate.
PURPOSE
3. Tenant shall use and occupy the Premises only for Plastics Extrusion
Facility and for no other purpose.
DELAY IN DELIVERY OF POSSESSION
4. If Landlord is unable to give possession of the Premises on the date of
commencement of the term, because the occupant refuses to give up possession,
or for any other reason, Landlord shall not be liable for failure to deliver
possession on said date, but the rent payable hereunder shall be abated until
Landlord tenders possession to Tenant. The termination date of the Lease
shall not be extended.
SECURITY
5. Tenant has delivered to Landlord the sum of $3,000.00 for security for the
full and faithful performance by Tenant of the terms hereof, to be returned to
Tenant, without interest, after Tenant has vacated the Premises and upon the
full performance of the provisions of the Lease. Tenant shall not use the
security as rent.
ASSIGNMENT SUBLETTING
6. Neither Tenant nor Tenant's legal representatives or guarantors in interest
by operation of law or otherwise, shall assign, mortgage or otherwise encumber
this Lease, or sublet or permit all or part of the Premises to be used by
others, without prior written consent of Landlord in such instance, which
consent shall not be unreasonably withheld.
DEFAULT
7. A. Landlord may terminate the Lease on three (3) days' notice: (a) if rent
or additional rent is not paid within three (3) days after written notice from
Landlord; or (b) if Tenant shall have failed to cure a default in the
performance of any covenant of the Lease (except the payment of rent and
additional rent), within fifteen (15) days after written notice thereof from
Landlord, or if default cannot be completely cured in such time, if Tenant
shall not promptly proceed to cure such default within said fifteen (15) days,
or shall not complete the curing of such default with due diligence, or (c) if
a petition in bankruptcy shall be filed by Tenant or if Tenant shall make a
general assignment for the benefit of creditors; or (d) if a petition in
bankruptcy shall be filed against Tenant and such proceeding is not vacated
within thirty (30) days.
B. At the expiration of the three (3) day notice period, the Lease and any
rights of renewal or extension thereof shall terminate as completely as if
that were the date originally fixed for the expiration of the term of the
Lease, but Tenant shall remain liable as hereinafter provided.
RELETTING
8. If Landlord shall re-enter the Premises on the default of Tenant, by
summary proceedings or otherwise: (a) Landlord may re-let the Premises or any
part thereof, as Tenant's agent, in the name of Landlord for a term shorter or
longer than the balance of the term of the Lease; (b)Tenant shall pay landlord
any deficiency between the rent hereby reserved and the net amount of any
rents collected by Landlord for the remaining term of the Lease, through such
re-letting. Such deficiency shall become due and payable monthly, as it is
determined. In computing the net amount of rents collected through such re-
letting, Landlord may deduct all expenses incurred in obtaining possession on
re-letting the Premises, including attorney's and brokerage fees and costs of
restoring the Premises to a rentable condition.
LANDLORD MAY CURE DEFAULTS
9. If Tenant shall default in performing any covenant or condition of this
Lease, Landlord may perform the same for the account of Tenant, and Tenant
shall reimburse Landlord for any expense incurred.
REPAIRS, ALTERATIONS AND ADDITIONS
10. Tenant shall take good care of the Premises and the fixtures therein, and
at Tenant's sole cost shall make all repairs necessary to keep them in good
working order and condition, including structural repairs when those are
necessitated by the fault or negligence of Tenant, or Tenant's agents,
employees or invites. Tenant shall not make any alterations, additions or
improvements to the Premises without the prior written consent of Landlord.
LIENS
11.A. Tenant, at Tenant's expense, shall cause any lien filed against the
real property of which Premises are a part, for work or materials claimed to
have been finished to Tenant, to be discharged of record within ten (10) days
after notice thereof.
B. The interest of the Landlord shall not be subject to liens, notify
every contractor making such improvements of the provisions for improvements
made by Tenant in and to the Premises. Tenant shall set forth in the
preceding sentence of this sub-paragraph. The parties agree to execute,
acknowledge and deliver without charge a Memorandum of Lease, in recordable
form containing a confirmation that the interest of the Landlord shall not be
subject to liens for improvements made by Tenant to the Premises.
SIGNS AND ADVERTISING
12. No signs or advertising shall be placed on the exterior portion of the
premises or in windows by Tenant without prior written consent of Landlord,
which consent shall not be unreasonably withheld.
REQUIREMENTS OF LAW
13. Tenant, at Tenant's expense, shall comply with (a) all laws, orders and
regulations of any governmental authority having jurisdiction with respect to
the Premises or the use or occupancy thereof, and (b) all requirements of the
Board of Fire Underwriters, or any other similar body affecting the Premises.
UTILITIES AND SERVICES
14. Tenant shall pay for all utilities, including electricity, water and
sewer charges, consumed by Tenant during the term of the Lease, and shall pay
the cost of Tenant's garbage and trash collection. Interruption or failure of
any service required to be furnished to Tenant by Landlord if due to causes
beyond Landlord's control shall not entitle Tenant to any allowance of
reduction in rent.
SUBORDINATION
15. This Lease is subject and subordinate to all present and future mortgages
and other encumbrances affecting the real property of which the Premises form
a part, and to all renewals, modifications, consolidations, replacements and
extensions thereof. Tenant agrees to execute at no expense to Landlord any
instrument which may be deemed necessary by Landlord to further affect said
subordination of Lease.
DESTRUCTION OF PREMISES
16.A. If the Premises are damaged or destroyed so that the Premises are
rendered wholly untenantable, the rent shall be proportionally paid up to the
time of the casualty and thenceforth cease until the date when the Premises
have been repaired or restored by Landlord, provided, however, that in the
event the Premises have been rendered wholly untenantable, Landlord or Tenant
shall have the right to terminate the term of the Lease by giving notice to
the other of its exercise of such right at any time within thirty (30) days
after the occurrence of such damage or destruction. If this notice is given,
the term of the Lease shall terminate on the date specified in the notice,
(which shall be not more than fifteen days after giving such notice), as
fully and completely as if such date were the date set forth in the Lease. If
Tenant exercises the option to terminate the Lease, Tenant must immediately
vacate the Premises. If neither party has given the notice of termination as
herein provided, Landlord shall proceed to repair the Premises, and the Lease
shall not terminate.
B. If the Premises shall be partially damaged or partially destroyed, the
damage shall be repaired by and at the expense of Landlord and the rent until
such repairs are made shall be apportioned according to the part of the
Premises which is usable by tenant. Landlord shall not be liable for any
inconvenience or annoyance to Tenant resulting from such damage or the repair
thereof, and shall not be liable for any delay in restoring the Premises. If
the Premises are partially damaged or partially destroyed as a result of the
wrongful or negligent act of Tenant or any person on the Premises with
Tenant's consent, there shall be no apportionment or abatement of rent.
RADON GAS DISCLOSURE
17. 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 in Florida.
Additional information regarding radon and radon testing may be obtained from
your public county health unit.
CONDEMNATION
18. If the whole or any substantial part of the Premises shall be condemned
by eminent domain for any public or quasi-public purpose, this Lease shall
terminate on the date of the vacating of title, and Tenant shall have no claim
against Landlord for the value any of unexpired portion of the term of this
Lease, nor shall Tenant be entitled to any part of the condemnation award. If
less than a substantial part of the Premises is condemned, this Lease shall
not terminate, but rent shall abate in proportion to the portion of the
Premises condemned.
RIGHT OF ENTRY
19. Landlord or Landlord's agents may enter the Premises at any reasonable
time, on reasonable notice to Tenant (except that no notice need be given in
case of emergency) for the purpose of inspection or making such repairs as
Landlord deems necessary or desirable. Landlord may show the Premises to
prospective purchasers and mortgagees and, during the six months prior to
termination of the Lease, prospective tenants during business hours upon
reasonable notice to Tenant.
INDEMNITY
20. Tenant shall indemnify, defend and save Landlord harmless from and
against any liability or expense arising from the use or occupation of the
Premises by Tenant, or anyone on the Premises with Tenant's permission.
FEES AND EXPENSES
21. If either party shall default in the performance of any provision of the
Lease on its part to be performed, or if either party is required to take any
action to enforce the Lease, or to defend the validity of or interpret the
Lease, then the prevailing party shall be entitled to recover all costs and
expense incurred thereby, including court costs and reasonable attorney's
fees.
END OF TERM
ABANDONED PROPERTY
22. At the end of the term, Tenant shall vacate and surrender the Premises to
Landlord, broom clean, and in as good condition as they were at the beginning
of the term, ordinary wear and tear, and damage by fire and other elements
excepted, and Tenant shall remove all of Tenant's property. All property,
installations and additions required to be removed by Tenant at the end of the
term which remain in the Premises after Tenant has vacated shall be considered
abandoned by Tenant and, at the option of Landlord, may either be retained as
Landlord's property or may be removed by Landlord at Tenant's expense.
JURY WAIVER
23. Landlord and Tenant hereby waive trial by jury in any action, proceeding
or counterclaim brought by either party against the other pertaining to any
matters whatsoever arising out of or in any way connected with the Lease or
Tenant's use and occupancy of the Premises other than an action for personal
injury.
QUIET ENJOYMENT
24. Landlord agrees with Tenant that upon Tenant paying the rent and
performing all of the terms, covenants and conditions of the Lease on Tenant's
part to be performed, Tenant may peaceably and quietly enjoy the Premises.
HOLDING OVER DOUBLE RENT
25. If Tenant holds over and continues in possession of the Premises, or any
part thereof, after the expiration or termination of the Lease without
Landlord's permission, Landlord may recover double the amount of the rent and
additional rent due for each day Tenant holds over and refuses to surrender
possession. Such daily rent shall be computed by dividing the rent and
additional rent for the last month of the Lease by fifteen.
NO WAIVER OF LEASE TERMS
26. The failure of Landlord or Tenant to take any action against the other
for violation of any of the terms of the Lease shall not prevent a subsequent
act of a similar nature from being a violation of the Lease. No act or
agreement to accept surrender of the Premises from Tenant shall be valid
unless evidenced by a writing signed by Landlord.
"AS IS"
27. Tenant has inspected the Premises and is familiar and satisfied with its
present condition.
BROKER
28. Tenant represents to Landlord that Tenant has not dealt with any broker
in connection with this transaction other than Fischer-Gaeta-Crowell
and Landlord agrees to pay said broker, who is acting herein as Landlord's
agent, a commission.
NOTICES
29. Any notice by either party to the other shall be in writing and mailed by
registered or certified mail, return receipt requested, to the address above
set forth, or to such other address as either party may designate in writing.
Each notice shall be deemed given on the next business day following the date
of mailing. Any notice by Landlord to Tenant shall be deemed given if
personally delivered to Tenant at the Premises.
NO ORAL AGREEMENTS SUCCESSOR INTERESTS
30. The agreements contained in this Lease set forth the entire understanding
of the parties, shall be binding upon and shall inure to the benefit of the
respective heirs, successors, assigns and legal representatives of the parties
herein and shall not be changed or terminated orally.
SEE ADDENDUM ATTACHED HERETO.
IN WITNESS WHEREOF, the parties have executed the Lease as of the day and year
first above written.
Witnessed by:
/s/ Darrell Peterson________
____________________ Tenant
____________________________
____________________ Landlord
ADDENDUM TO BUSINESS LEASE BETWEEN
Southern Mechanical Contractors, Inc. (LANDLORD)
and
Palm Beach Plastics Manufacturing, Inc. a Florida Corporation (TENANT)
THIS ADDENDUM, entered into this 13th day of April, 1994 is attached to
and made part of that certain Business Lease of even date between Southern
Mechanical Contractors, Inc., hereinafter referred to as "LANDLORD", and Palm
Beach Plastics Manufacturing, Inc., a Florida Corporation, hereinafter
referred to as "TENANT", and relating to the property located at 4900 Dyer
Boulevard, Riviera Beach, Florida 33407.
In addition to the terms and provisions set forth in the Business Lease
to which this Addendum is attached, the LANDLORD and TENANT agree to the
following terms, provisions, and conditions. In the event of any
inconsistencies or conflicts between the Business Lease and this Addendum, it
is the intention of the parties that the Addendum shall control.
31. Upon signing, Tenant has paid a security deposit of $3,000.00. Tenant
shall also pay the first month's rent plus sales tax ($3,643.75) no later than
May 1, 1994.
32. Provided Tenant does not interfere with Landlord's installation of fire
sprinklers and other upgrades, Tenant shall have right to occupy premises
immediately after lease execution for the purpose of cleaning the premises and
installing Tenant's equipment.
33. Provided the lease is in good standing and Tenant is not in default
hereunder, Tenant may extend lease for two (2) additional three (3) year
terms, provided that Tenant gives notice to Landlord via certified mail,
return receipt requested, of Tenant's intention to exercise the option term
not less than ninety days prior to commencement of the option term. The
monthly rent for the option terms shall increase (never decrease) based on the
CPI with the base year being 1994. In no case would either option term
increase exceed ten (10%) percent of the previous term's gross rent.
34. Landlord agrees to fully absorb the cost of a fire sprinkler system (if
required for Tenant's operation), to meet all codes, no later than May 31,
1994.
35. Tenant shall be permitted to upgrade the current electrical system to a
three (3) phase system up to 460 volts. Landlord will reimburse Tenant the
cost of this upgrade as a credit towards last month's rent not to exceed
$3,000.00.
36. Provided there are no unusual requirements due to the Tenant's operation,
Landlord agrees to upgrade the facility to meet any additional code
requirements which may be required by the County or Municipality, including
but not limited to, handicap access.
37. Tenant shall have the Right of First Refusal for four thousand (4,000)
additional square feet of contiguous space under the same terms and conditions
of the existing lease. Should Landlord receive from a third party a signed
offer to lease said 4,000 square feet of contiguous space, Tenant shall within
five (5) days of receiving notice, notify Landlord of Tenant's intention to
lease said space.
38. Landlord shall be responsible for paying yearly property taxes, hazard
insurance, and exterior maintenance. Tenant shall be responsible for paying
all other expenses, including, but not limited to, electric, air-conditioning
maintenance, water and sewer, trash collection, alarms if any, interior
plumbing, and liability and contents insurance.
39. Should Tenant or their assigns ever purchase the leased premises from
Landlord, Fischer-Gaeta-Cromwell shall receive 6% of the purchase price in
cash at closing.
LANDLORD: Southern Mechanical Contractors, Inc.
By: /s/ George Barngrover
TENANT: Palm Beach Plastics Manufacturing, Inc.,
a Florida Corporation, Inc.
By: /s/ Darrell Peterson
ADDENDUM TO BUSINESS LEASE
THIS ADDENDUM TO BUSINESS LEASE entered into this 9th day of January,
1996, by and between SGB INVESTMENTS, INC., (hereinafter Landlord) and
CLEARSHIELD MANUFACTURING CORP., hereinafter (Tenant).
WHEREAS, on April 1, 1994, SOUTHERN MECHANICAL CONTRACTORS, INC., as
Landlord and PALM BEACH PLASTICS MANUFACTURING, INC., a Florida Corporation;
as Tenant entered into this business lease; and
WHEREAS, SOUTHERN MECHANICAL CONTRACTORS, INC., has assigned all of its
rights in the business lease to SGB INVESTMENTS, INC., a Florida Corporation;
and
WHEREAS, PALM BEACH PLASTICS MANUFACTURING, INC., a Florida Corporation
has changed its legal name to CLEARSHIELD MANUFACTURING CORP., and
WHEREAS, Landlord and tenant desire to amend the business lease and all
addendum as set forth below.
THEREFORE, for good and valuable considerations, the parties agree as
follows:
1. Landlord agrees to lease to Tenant and Tenant agrees to lease from
Landlord the entire leased premises of Landlord which is legally described as
follows:
LEGAL DESCRIPTION
The East 150 feet of the West 340 feet of the following described
property:
The West 655 feet of the East 1,440.96 feet of the North Half of the
South Half of the North Half of the Northwest Quarter of Section 36,
Township 42 South, Range 42 East, Palm Beach County, Florida
a/k/a 4900 Dyer Blvd., Riviera Beach, Florida 33407
2. The leased premises includes a building located thereon which has
approximately 19,2000 square feet.
3. Tenant agrees to pay to Landlord, in U.S. Currency together with all
sales and use taxes levied upon the use and occupancy of the leased premises,
annual rent of $72,000.00 payable monthly in the amount of $6,000.00 per month
plus sales tax.
4. Landlord's requirement that Tenant's rental payments be in the form
of Certified or Cashier's Check is hereby waived, as Landlord will accept
Tenant's business checks. However, subsequent to the date of this Addendum,
if Tenant should deliver a check to Landlord, which check is returned for
insufficient funds or is returned for any other reason other than the fault of
Landlord, then Landlord shall be entitled to demand all future rental payments
to be paid in the form of either Cashier's check or Certified check, provided
such demand is made by Landlord to Tenant in writing by Certified Mail Return
Receipt Requested.
5. Landlord acknowledges that Tenant, at Tenant's sole expense, will
construct a twelve (12') foot by (12') foot opening on a wall running east and
west and located approximately forty (40') feet north of the southern most
exterior wall of the building located upon the leased premises. All such
improvements and work shall be performed according to all local building
codes. Prior to commencing the construction work, Tenant shall contact
Landlord and make arrangements with Landlord so that Tenant can show Landlord
the exact location of the improvements.
6. Except as amended by this Addendum, all provisions of the Business
Lease dated April 1, 1994 between SOUTHERN MECHANICAL CONTRACTORS, INC., as
Landlord and PALM BEACH PLASTICS MANUFACTURING, INC., as Tenant and all
addendums thereafter shall remain in full force and shall be binding on the
parties to this Addendum.
IN WITNESS WHEREOF, the parties have executed this Addendum to Lease as
of the day and year first above written.
WITNESSED BY: CLEARSHIELD MANUFACTURING CORP.
_________________________ By: /s/ Darrell Peterson
_________________________ as President
SGB INVESTMENTS, INC.
_________________________ By: /s George Barngrover
_________________________ as President
ADDENDUM TO BUSINESS LEASE
THIS ADDENDUM TO BUSINESS LEASE entered into this _____ day of July, 1996,
by and between SGB INVESTMENTS, INC., (hereinafter Landlord) and CLEARSHIELD
MANUFACTURING CORP., hereinafter (Tenant).
WHEREAS, on April 1, 1994, SOUTHERN MECHANICAL CONTRACTORS, INC. as
Landlord and PALM BEACH PLASTICS MANUFACTURING, INC., a Florida corporation as
Tenant entered into a business lease (Lease); and
WHEREAS, SOUTHERN MECHANICAL CONTRACTORS, INC., has assigned all of its
rights in the business lease to SGB INVESTMENTS, INC., a Florida corporation;
and
WHEREAS, PALM BEACH PLASTICS MANUFACTURING, INC., a Florida corporation
has changed its legal name to CLEARSHIELD MANUFACTURING CORP.; and
WHEREAS, Landlord and Tenant desire to amend the business lease and all
addendum as set forth below.
THEREFORE, for good and valuable considerations, the parties agree as
follows:
1. This Addendum to Business Lease relates to that certain property
described as follows:
The East 150 feet of the west 340 feet of the following property:
The West 655 feet of the East 1,440.96 feet of the North Half of the
South Half of the North Half of the Northwest Quarter of Section 36,
Township 42 south, Range 42 East, Palm Beach County, Florida.
a/k/a 4900 Dyer Blvd., Riviera Beach, Florida 33407
2. Commencing August 1, 1996, Tenant agrees to pay Landlord, in U.S.
Currency, together with all sales and use taxes levied upon the use and
occupancy of the leased premises, annual rent of $76,800.00 payable monthly in
the amount of $6,400.00 per month plus sales tax.
3. Tenant's option to extend the term of the Lease Agreement as set
forth in that certain Addendum to Business Lease between SOUTHERN MECHANICAL
CONTRACTORS, INC., as Landlord and PALM BEACH PLASTICS MANUFACTURING, INC., a
Florida corporation, as Tenant, dated April 13, 1994 is hereby terminated.
4. The term of the Lease Agreement between Landlord and Tenant is hereby
executed to July 31, 1998.
5. Except as amended by this Addendum, all provisions of the Business
Lease dated April 1, 1994 between SOUTHERN MECHANICAL CONTRACTORS, INC., As
Landlord and PALM BEACH PLASTICS MANUFACTURING, INC. as Tenant and all
addendums thereafter shall remain in full force and shall be binding on the
parties to this Addendum.
IN WITNESS WHEREOF, the Parties have executed this Addendum to Lease as
of the day and year first above written.
WITNESSED BY: CLEARSHIELD MANUFACTURING CORP.
/s/ Michelle R. Wilson By: /s/ Darrell Peterson
as President
_________________________
SGB INVESTMENTS, INC.
/s/ Sally Barngrover By: /s/ George Barngrover
as President
_________________________
Exhibit 10.3
CB COMMERCIAL REAL ESTATE GROUP, INC.
BROKERAGE AND MANAGEMENT
LICENSED REAL ESTATE BROKER
I. PARTIES.
This Sublease, dated July 22, 1996, is made between Bunzl
South Florida, Inc., a Florida Corporation ("Sublessor"), and
ClearShield Manufacturing Corporation, a Florida Corporation
("Sublessee").
2. MASTER LEASE.
Sublessor is the lessee under a written lease dated 15th day
of October, 1982, wherein Florida East Coast Railway Company, a
Florida Corporation ("Lessor") leased to Sublessor the real
property located in the City of Riviera Beach, County of Palm
Beach, State of Florida, described as The northern one-half of
the building (Bays 1, 2, 3, and 4) located at 2001 Australian
Avenue, Riviera Beach, FL 33404, having dimensions of 240 feet by
225 feet and as more particularly shown on Exhibit "A" attached
hereto and by this reference made a part of ("Master Premises")
Said lease and amendments are herein collectively referred to as
the "Master Lease" and are attached hereto as Exhibit "A".
3. PREMISES.
Sublessor hereby subleases to Sublessee on the terms and
conditions set forth in this Sublease the following portion of
the Master Premises ("Premises"): (Bays 3 and 4) having
dimensions of 120 feet by 225 feet excluding the fenced in
storage yard located at 2001 Australian Avenue, Riviera Beach, FL
33404, as more particularly shown on Exhibit "B" attached hereto
and by this reference made a part hereof.
4. WARRANTY BY SUBLESSOR.
Sublessor warrants and represents to Sublessee that the
Master Lease has not been amended or modified except as expressly
set forth herein, that Sublessor is not now, and as of the
commencement of the Term hereof will not be, in default or breach
of any of the provisions of the Master Lease, and that Sublessor
has no knowledge of any claim by Lessor that Sublessor is in
default or breach of any of the provisions of the Master Lease.
5. TERM.
The Term of this Sublease shall commence on July 22, 1996
("Commencement Date"), or when Lessor consents to this Sublease
(if such consent is required under the Master Lease), whichever
shall last occur, and end on May 14, 2O03 ("Termination Date"),
unless otherwise sooner terminated in accordance with the
provisions of this Sublease. In the event the Term commences on
a date other than the Commencement Date, Sublessor and Sublessee
shall execute a memorandum setting forth the actual date of
commencement of the Term. Possession of the Premises
("Possession") shall be delivered to Sublessee on the
commencement of the Term. If for any reason Sublessor does not
deliver Possession to Sublessee on the commencement of the Term,
Sublessor shall not be subject to any liability for such failure,
the Termination Date shall not be extended by the delay, and the
validity of this Sublease shall not be impaired, but rent shall
abate until delivery of Possession. Notwithstanding the
foregoing, if Sublessor has not delivered Possession to Sublessee
within thirty (30) days after the Commencement Date, then at any
time thereafter and before delivery of Possession, Sublessee may
give written notice to Sublessor of Sublessee's intention to
cancel this Sublease. Said notice shall set forth an effective
date for such cancellation which shall be at least ten (10) days
after delivery of said notice to Sublessor. If Sublessor
delivers Possession to Sublessee on or before such effective
date, this Sublease shall remain in full force and effect. If
Sublessor fails to deliver Possession to Sublessee on or before
such effective date, this Sublease shall be cancelled, in which
case all consideration previously paid by Sublessee to Sublessor
on account of this Sublease shall be returned to Sublessee, this
Sublease shall thereafter be of no further force or effect, and
Sublessor shall have no further liability to Sublessee on account
of such delay or cancellation. If Sublessor permits Sublessee to
take Possession prior to the commencement of the Term, such early
Possession shall not advance the Termination Date and shall be
subject to the provisions of this Sublease, including without
limitation the payment of rent.
6. RENT.
6.1 Minimum Rent. Sublessee shall pay to Sublessor as minimum
rent, without deduction, setoff, notice, or demand, at Bunzl
South Florida, Inc., 6063 Boat Rock Blvd., Atlanta, FA 30336 or
at such other place as Sublessor shall designate from time to
time by notice to Sublessee, the sum of Eight Thousand Nine
Hundred Forty-Three and 75/100 Dollars ($ 8,943.75) per month, in
advance on the first day of each month of the Term. Sublessee
shall pay to Sublessor upon execution of this Sublease the sum of
Eight Thousand Nine Hundred Forty-Three and 75/100 Dollars ($
8,943.75) as rent for November 1996. If the Term begins or ends
on a day other than the first or last day of a month, the rent
for the partial months shall be prorated on a per diem basis.
Additional provisions: Exhibit "C" attached hereto and by this
reference made a part hereof shall be the rent schedule.
6.2 Operating Costs. (lined out of Sublease)
7. SECURITY DEPOSIT.
Sublessee shall deposit with Sublessor upon execution of this
Sublease the sum of Ten Thousand Dollars and no cents. Dollars
($10,000.00) as security for Sublessee's faithful performance of
Sublessee's obligations hereunder ("Security Deposit"). If
Sublessee fails to pay rent or other charges when due under this
Sublease, or fails to perform any of its other obligations
hereunder, Sublessor may use or apply all or any portion of the
Security Deposit for the payment of any rent or other amount then
due hereunder and unpaid, for the payment of any other sum for
which Sublessor may become obligated by reason of Sublessee's
default or breach, or for any loss or damage sustained by
Sublessor as a result of Sublessee's default or breach. If
Sublessor so uses any portion of the Security Deposit, Sublessee
shall, within ten (10) days after written demand by Sublessor,
restore the Security Deposit to the full amount originally
deposited, and Sublessee's failure to do so shall constitute a
default under this Sublease. Sublessor shall not be required to
keep the Security Deposit separate from its general accounts, and
shall have no obligation or liability for payment of interest on
the Security Deposit. In the event Sublessor assigns its
interest in this Sublease, Sublessor shall deliver to its
assignee so much of the Security Deposit as is then held by
Sublessor. Within ten (10) days after the Term has expired, or
Sublessee has vacated the Premises, or any final adjustment
pursuant to Subsection 6.2 hereof has been made, whichever shall
last occur, and provided Sublessee is not then in default of any
of its obligations hereunder, the Security Deposit, or so much
thereof as had not theretofore been applied by Sublessor, shall
be returned to Sublessee or to the last assignee, if any, of
Sublessee's interest hereunder.
8. USE OF PREMISES.
The Premises shall be used and occupied only for a purpose
permitted by and any/or all applicable zoning and land use
regulations and/or ordinances, provided that no such use shall
principally involve the handling or storage of hazardous
substances or hazardous materials, and for no other purpose.
9. ASSIGNMENT AND SUBLETTING.
Sublessee shall not assign this Sublease or further sublet
all or any part of the Premises without the prior written consent
of Sublessor (and the consent of Lessor, if such is required
under the terms of the Master Lease), such consent not to be
unreasonably withheld.
10. OTHER PROVISIONS OF SUBLEASE.
All applicable terms and conditions of the Master Lease are
incorporated into and made a part of this Sublease as if
Sublessor were the lessor thereunder, Sublessee the lessee
thereunder, and the Premises the Master Premises, except for the
following: Sublessee shall not be required to pay real property
taxes or real property insurance or assessments during the term.
Sublessee assumes and agrees to perform the lessee's obligations
under the Master Lease during the Term to the extent that such
obligations are applicable to the Premises, except that the
obligation to pay rent to Lessor under the Master Lease shall be
considered performed by Sublessee to the extent and in the amount
rent is paid to Sublessor in accordance with Section 6 of this
Sublease. Sublessee shall not commit or suffer any act or
omission that will violate any of the provisions of the Master
Lease *Time is of the essence regarding Sublessor in attempting
to cause Lessor to perform its obligations under the Master Lease
for the benefit of Sublessee. If the Master Lease terminates,
this Sublease shall terminate and the parties shall be relieved
of any further liability or obligation under this Sublease,
provided however, that if the Master Lease terminates as a result
of a default or breach by Sublessor or Sublessee under this
Sublease and/or the Master Lease, then the defaulting party shall
be liable to the nondefaulting party for the damage suffered as a
result of such termination. Notwithstanding the foregoing, if
the Master Lease gives Sublessor any right to terminate the
Master Lease in the event of the partial or total damage,
destruction, or condemnation of the Master Premises or the
building or project of which the Master Premises are a part, the
exercise of such right by Sublessor shall not constitute a
default or breach hereunder.
11. ATTORNEYS' FEES.
If Sublessor, Sublessee, or Broker shall commence an action
against the other arising out of or in connection with this
Sublease, the prevailing party shall be entitled to recover its
costs of suit and reasonable attorney's fees.
12. AGENCY DISCLOSURE:
Sublessor and Sublessee each warrant that they have dealt
with no other real estate broker in connection with this
transaction except: Catalfumo Management and Investment, Inc.,
who represents Sublessor and CB Commercial Real Estate Group,
Inc., who represents Sublessee. In the event that CB COMMERCIAL
REAL ESTATE GROUP, INC. represents both Sublessor and Sublessee,
Sublessor and Sublessee hereby confirm that they were timely
advised of the dual representation and that they consent to the
same, and that they do not expect said broker to disclose to
either of them the confidential information of the other party.
13. COMMISSION.
Upon execution of this Sublease, and consent thereto by
Lessor (if such consent is required under the terms of the Master
Lease), Sublessor shall pay Broker a real estate brokerage
commission in accordance with Sublessor's contract with Broker
for the subleasing of the Premises, if any, and otherwise in the
amount of -Per a separate agreement- Dollars ($ N/A), for
services rendered in effecting this Sublease. Broker is hereby
made a third party beneficiary of this Sublease for the purpose
of enforcing its right to said commission.
14. NOTICES.
All notices and demands which may or are to be required or
permitted to be given by either party on the other hereunder
shall be in writing. All notices and demands by the Sublessor to
Sublessee shall be sent by United States Mail, postage prepaid,
addressed to the Sublessee at the Premises, and to the address
hereinbelow, or to such other place as Sublessee may from time to
time designate in a notice to the Sublessor. All notices and
demands by the Sublessee to Sublessor shall be sent by United
States Mail, postage prepaid, addressed to the Sublessor at the
address set forth herein, and to such other person or place as
the Sublessor may from time to time designate in a notice to the
Sublessee.
To Sublessor: Mr. Tom Emge, Vice-President, Bunzl South Florida,
Inc., 6063 Boat Rock Blvd., Atlanta, GA 30336
To Sublessee: Mr. Pat Sullivan, President, ClearShield
Manufacturing Inc., 2001 Australian Avenue,
Riviera Beach, FL 33404
15. CONSENT BY LESSOR.
THIS SUBLEASE SHALL BE OF NO FORCE OR EFFECT UNLESS CONSENTED
TO BY LESSOR WITHIN 10 DAYS AFTER EXECUTION HEREOF, IF SUCH
CONSENT IS REQUIRED UNDER THE TERMS OF THE MASTER LEASE.
16. COMPLIANCE.
The parties hereto agree to comply with all applicable
federal, state and local laws, regulations, codes, ordinances and
administrative orders having jurisdiction over the parties,
property or the subject matter of this Agreement, including, but
not limited to, the 1964 Civil Rights Act and all amendments
thereto, the Foreign Investment In Real Property Tax Act, the
Comprehensive Environmental Response Compensation and Liability
Act, and The Americans With Disabilities Act.
Sublessor: Sublessee:
Bunzl South Florida, Inc., ClearShield Manufacturing Inc.,
a Florida Corporation a Florida Corporation
/s/ Tom Emge /s/ Pat Sullivan
Vice President President
7/25/96 7/19/96
LESSOR'S CONSENT TO SUBLEASE
The undersigned ("Lessor"), lessor under the Master Lease, hereby
consents to the foregoing Sublease without waiver of any
restriction in the Master Lease concerning further assignment or
subletting. Lessor certifies that, as of the date of Lessor's
execution hereof, Sublessor is not in default or breach of any of
the provisions of the Master Lease, and that the Master Lease has
not been amended or modified except as expressly set forth in the
foregoing Sublease.
Lessor: Gran Central Corporation, successor in interest to the
rights and obligations of Florida East Coast Railway
Company, a Florida Corporation
Notice: Gran Central Corporation
P. 0. Box 1048
St. Augustine, FL 32084
By: /s/ W. E. Durham
Title: Vice President
Date: 7/25/96
GUARANTY OF LEASE
CB COMMERCIAL REAL ESTATE GROUP, INC.
BROKERAGE AND MANAGEMENT
LICENSED REAL ESTATE BROKER
This Guaranty of Lease (the "Guaranty") is attached to and made
part of that certain real Estate Lease dated June , 1996
between Bunzl South Florida, Inc., a Florida Corporation, as
Landlord, and ClearShield Manufacturing, Inc., a Florida
Corporation, as Tenant, covering the Property commonly known as
2001 Australian Avenue, Bays 1-4, Riviera Beach, FL. The terms
used in this Guaranty shall have the same definitions as set
forth in the Lease. In order to induce Landlord to enter into
the Lease with Tenant, Bernstein/Leibstone Associates, Inc., a
New York Corporation and ClearShield of Palm Beach County, Inc.,
a Florida Corporation ("Guarantors"), have agreed to execute and
deliver this Guaranty to Landlord. Each Guarantor acknowledges
that Landlord would not enter into the Lease if each Guarantor
did not execute and deliver this Guaranty to Landlord.
1. Guaranty. In consideration of the execution of the Lease by
Landlord and as a material inducement to Landlord to execute the
Lease, each Guarantor hereby irrevocably, unconditionally,
jointly and severally guarantees the full, timely and complete
(a) payment of all rent and other sums payable by Tenant to
Landlord under the Lease, and any amendments or modifications
thereto by agreement or course of conduct, and (b) performance of
all covenants, representations and warranties made by Tenant and
all obligations to be performed by Tenant pursuant to the Lease,
and any amendments or modifications thereto by agreement or
course of conduct. The payment of those amounts and performance
of those obligations shall be conducted in accordance with all
terms, covenants and conditions set forth in the Lease, without
deduction, offset or excuse of any nature and without regard to
the enforceability or validity of the Lease, or any part thereof,
or any disability of Tenant.
2. Landlord's Rights. Landlord may perform any of the following
acts at any time during the Lease Term, without notice to or
assent of any Guarantor and without in anyway releasing,
affecting or impairing any of Guarantor's obligations or
liabilities under this Guaranty: (a) alter, modify or amend the
Lease by agreement or course of conduct, (b) grant extensions or
renewals of the Lease, (c) assign or otherwise transfer its
interest in the Lease, the Property, or this Guaranty, (d)
consent to any transfer or assignment of Tenant's or any future
tenant's interest under the Lease, (e) release one or more
Guarantor, or amend or modify this Guaranty with respect to any
Guarantor, without releasing or discharging any other Guarantor
from any of such Guarantor's obligations or liabilities under
this Guaranty, (f) take and hold security for the payment of this
Guaranty and exchange, enforce, waive and release any such
security, (g) apply such security and direct the order or manner
of sale thereof as Landlord, in its sole discretion, deems
appropriate, and (h) foreclose upon any such security by judicial
or nonjudicial sale, without affecting or impairing in any way
the liability of Guarantor under this Guaranty, except to the
extent the indebtedness has been paid.
3. Tenant's Default. This Guaranty is a guaranty of payment and
performance, and not of collection. Upon any breach or default
by Tenant under the Lease, Landlord may proceed immediately
against Tenant and/or any Guarantor to enforce any of Landlord's
rights or remedies against Tenant or any Guarantor pursuant to
this Guaranty, the Lease, or at law or in equity without notice
to or demand upon either Tenant or any Guarantor. This Guaranty
shall not be released, modified or affected by any failure or
delay by Landlord to enforce any of its rights or remedies under
the Lease or this Guaranty, or at law or in equity.
4. Guarantor's Waivers. Each Guarantor hereby waives (a)
presentment, demand for payment and protest of non-performance
under the Lease, (b) notice of any kind including, without
limitation, notice of acceptance of this Guaranty, protest,
presentment, demand for payment, default, nonpayment, or the
creation or incurring of new or additional obligations of Tenant
to Landlord, (c) any right to require Landlord to enforce its
rights or remedies against Tenant under the Lease, or otherwise,
or against any other Guarantor, (d) any right to require Landlord
to proceed against any security held from Tenant or any other
party, (a) any right of subrogation and (f) any defense arising
out of the absence, impairment or loss of any right of
reimbursement or subrogation or other right or remedy of
Guarantors against Landlord or any such security, whether
resulting from an election by Landlord, or otherwise. Any part
payment by Tenant or other circumstance which operates to toll
any statute of limitations as to Tenant shall operate to toll the
statute of limitations as to Guarantor.
5. Separate and Distinct Obligations. Each Guarantor
acknowledges and agrees that such Guarantor's obligations to
Landlord under this Guaranty are separate and distinct from
Tenant's obligations to Landlord under the Lease. The occurrence
of any of the following events shall not have any effect
whatsoever on any Guarantor's obligations to Landlord hereunder,
each of which obligations shall continue in full force or effect
as though such event had not occurred: (a) the commencement by
Tenant of a voluntary case under the federal bankruptcy laws, as
now constituted or hereafter amended or replaced, or any other
applicable federal or state bankruptcy, insolvency or other
similar law (collectively, the "Bankruptcy Laws"), (b) the
consent by tenant to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator
or similar official of Tenant or for any substantial part of its
property, (c) any assignment by Tenant for the benefit of
creditors, (d) the failure of Tenant generally to pay its debts
as such debts become due, (a) the taking of corporate action by
Tenant in the furtherance of any of the foregoing; or (f) the
entry of a decree or order for relief by a court having
jurisdiction in respect of Tenant in any involuntary case under
the Bankruptcy Laws, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official)
of Tenant or for any substantial part of its property, or
ordering the winding-up or liquidation of any of its affairs and
the continuance of any such decree or order unstayed and in
effect for a period of sixty (60) consecutive days. The
liability of Guarantors under this Guaranty is not and shall not
be affected or impaired by any payment made to Landlord under or
related to the Lease for which Landlord is required to reimburse
Tenant pursuant to any court order or in settlement of any
dispute, controversy or litigation in any bankruptcy,
reorganization, arrangement, moratorium or other federal or state
debtor relief proceeding. If, during any such proceeding, the
Lease is assumed by Tenant or any trustee, or thereafter assigned
by Tenant or any trustee to a third party, this Guaranty shall
remain in full force and effect with respect to the full
performance of Tenant, any such trustee or any such third party's
obligations under the Lease If the Lease is terminated or
rejected during any such proceeding, or if any of the events
described in Subparagraphs (a) through (f) of this Paragraph 5
occur, as between Landlord and each Guarantor, Landlord shall
have the right to accelerate all of Tenant's obligations under
the Lease and each Guarantor's obligations under this Guaranty.
In such event, all such obligations shall become immediately due
and payable by Guarantors to Landlord. Guarantors waive any
defense arising by reason of any disability or other defense of
Tenant or by reason of the cessation from any cause whatsoever of
the liability of Tenant.
6. Subordination.
All existing and future advances by Guarantor to Tenant, and
all existing and future debts of Tenant to any Guarantor, shall
be subordinated to all obligations owed to Landlord under the
Lease and this Guaranty.
7. Successors and Assigns.
This Guaranty binds each Guarantor's personal representa-
tives, successors and assigns.
8. Encumbrances.
If Landlord's interest in the Property or the Lease, or the
rents, issues or profits therefrom, are subject to any deed of
trust, mortgage or assignment for security, any Guarantor's
acquisition of Landlord's interest in the Property or Lease shall
not affect any of Guarantor's obligations under this Guaranty.
In such event, this Guaranty shall nevertheless continue in full
force and effect for the benefit of any mortgagee, beneficiary,
trustee or assignee or any purchaser at any sale by judicial
foreclosure or under any private power of sale, and their
successors and assigns. Any married Guarantor expressly agrees
that Landlord has recourse against any Guarantor's separate
property for all of such Guarantor's obligations hereunder.
9. Guarantor's Duty.
Guarantors assume the responsibility to remain informed of
the financial condition of Tenant and of all other circumstances
bearing upon the risk of Tenant's default, which reasonable
inquiry would reveal, and agree that Landlord shall have no duty
to advise Guarantors of information known to it regarding such
condition or any such circumstance.
10. Landlord's Reliance.
Landlord shall not be required to inquire into the powers of
Tenant or the officers, employees, partners or agents acting or
purporting to act on its behalf, and any indebtedness made or
created in reliance upon the professed exercise of such powers
shall be guaranteed under this Guaranty.
11. Incorporation of Certain Lease Provisions.
Each Guarantor hereby represents and warrants to Landlord
that such Guarantor has received a copy of the Lease, has read or
had the opportunity to read the Lease, and understands the terms
of the Lease. The provisions in the Lease relating to the
execution of additional documents, legal proceedings by Landlord
against tenant, severability of the provisions of the Lease,
interpretation of the Lease, notices, waivers, the applicable
laws which govern the interpretation of the Lease and the
authority of the Tenant to execute the Lease are incorporated
herein in their entirety by this reference and made a part
hereof. Any reference in those provisions to "Tenant" shall mean
each Guarantor and any reference in those provisions to the
"Lease" shall mean this Guaranty, except that (a) any notice
which any Guarantor desires or is required to provide to Landlord
shall be effective only if signed by all Guarantors and (b) any
notice which Landlord desires or is required to provide to any
Guarantor shall be sent to such Guarantor at such Guarantor's
address indicated below, or if no address is indicated below, at
the address for notices to be sent to Tenant under the Lease.
Signed on July 19, 1996 Bernstein/Leibstone Associates, Inc.,
a New York Corporation
Address: By:/s/ Darrell L. Peterson
5601 Corporate Way, #320 Darrell Peterson
Riviera Beach, FL 33404 Its President
Signed on July 19, 1996 ClearShield of Palm Beach County,
Inc., a Florida Corporation
Address: By:/s/ Patrick T. Sullivan
5601 Corporate Way, #320 Patrick T. Sullivan
Riviera Beach, FL 33404 Its President
CONSULT YOUR ATTORNEY - This document has been prepared for
approval by your attorney. No representation or recommendation
is made by CB Commercial Real Estate Group, Inc. or the Southern
California Chapter of the Society of Industrial Realtors," Inc.,
or the agents or employees of either of them as to the legal
sufficiency, legal effect, or tax consequences of this document
or the transaction to which it relates. These are questions for
your attorney.
*12. The term Landlord shall also mean Sublandlord or Sublessor.
The term tenant shall also mean subtenant or sublessee.
ADDENDUM TO SUBLEASE
BETWEEN
BUNZL SOUTH FLORIDA, INC.,
a Florida Corporation as "Sublessor"
and
CLEARSHIELD MANUFACTURING, INC.,
a Florida Corporation as "Sublessee"
This Addendum to Sublease, dated this 22nd day of July 1996,
by and between BUNZL SOUTH FLORIDA, INC., a Florida Corporation,
as Sublessor, and CLEARSHIELD MANUFACTURING, INC., a Florida
Corporation as Sublessee, modified and supplements that certain
Sublease dated the date hereof between Sublessor and Sublessee.
Terms defined in the Sublease and used herein shall have the same
meaning as used in the Sublease. The provisions of this Addendum
supersede any inconsistent provisions in the Lease to the extent
of the inconsistency.
1. Sublessee has inspected the Premises to its satisfaction and
agrees to accept the Premises in "as is" condition, without any
representation as to the condition of the Premises having been
made by Sublessor or its agent and without any obligation on the
part of Sublessor to perform any alterations or improvements,
except to ensure current HVAC, plumbing and electric systems are
in working order. All work is to be completed prior to August
15, 1996.
2. Sublessee and/or its licensed vendors shall be solely
responsible for the cost, permitting and performance of any and
all alterations, renovations, repairs and maintenance
attributable to Sublessee's use and occupancy of the Premises.
All renovations shall require Sublessor's and Master Lessor's
written approval prior to commencement.
3. Sublessor and Sublessee agree that the rent due under the
Sublease shall constitute Sublessee's total obligation to
Sublessor in respect of rent, (other than sales taxes, which
Sublessee shall pay). Sublessee shall pay direct to the
appropriate provider the cost of any utility or service being
supplied to the premises.
4. Provided that Sublessee does not default in the performance
of its obligations under the Sublease, Sublessor shall not be
entitled to any additional Security Deposit. In the event
Sublessor shall, as a result of any such default, retain or apply
all or any portion of the Security Deposit toward the cure of
such default, Sublessee shall thereupon be obligated to restore
the amount of the Security Deposit so retained or applied.
5. Sublessor hereby consents to the removal by Sublessee, from
time-to-time and at any time, of Sublessee's equipment, personal
property, inventory and other goods from the Premises, Sublessor
hereby waiving any right under the Sublease, Master Lease, or
pursuant to the laws of the State of Florida, to assert a
landlord's lien in respect of such property upon a default of
Sublessee. In addition and notwithstanding the foregoing, upon a
termination of this Sublease or upon a termination of Sublessee's
right to possession of the Premises in accordance with the
provisions of this Sublease, Sublessor shall be entitled to store
(and, if necessary, relocate for storage) Sublessee's property at
the expense of Sublessee if Sublessee shall fail to remove such
property from the Premises, and in the further event that
Sublessee shall fail to remove its property from the Premises or
from the place of storage within ninety (90) days next following
Sublessor's demand, Sublessor shall be entitled to dispose of
such property as though it had been abandoned by Sublessee.
6. Sublessee shall obtain and keep in force all insurance
required to be obtained and kept in force by Sublessor under the
Master Lease and shall deliver to Sublessor certificates of
insurance providing evidence of such coverage, naming Sublessor
as an additional insured as its interest may appear, and stating
that such insurance shall not be modified or cancelled except in
thirty (30) days' prior written notice to Sublessor.
7. Sublessor agrees to the erection of Sublessee's signage paid
for by Sublessee.
8. Sublessee shall indemnify, defend and hold harmless Sublessor
from and against all losses, costs, damages, expenses and
liabilities; including, without limitation, attorney's's fees and
expenses, which Sublessor may incur or pay out by reason of (a)
any accidents, damages or injuries to persons or property
occurring in, on or about the Premises, (b) any breach or default
hereunder on Sublessee's part, (c) any work done in or to the
Premises (except for any work done in the Master Premises by
Lessor or Sublessor) or (d) any act, omission or negligence on
the part of Sublessee and/or its officers, employees, agents,
customers or invitees, or any person claiming through or under
Sublessee.
9. Sublessee hereby releases the Sublessor under the Master
Lease or anyone claiming through or under the Sublessor under the
Master Lease by way of subrogation or otherwise to the extent
that Sublessor is released under the Master Lease of liability or
responsibility pursuant to the provisions of the Master Lease,
and Sublessee will cause its insurance carriers to include any
clauses or endorsements in favor of the sublessor under the
Master Lease, which Sublessor is required to provide pursuant to
the provision of the Master Lease.
10. In any instance when Sublessor's consent or approval is
required under this Sublease, Sublessor's refusal to consent to
or approve any matter shall be deemed reasonable if such consent
or approval has not been obtained from Gran Central Corporation
under the Master Lease between Gran Central Corporation and Palm
Beach Paper Company. If Sublessee shall seek the approval by
or consent of Sublessor and Sublessor shall fail or refuse to
give such consent of approval, Sublessee shall not be entitled to
any damages for any withholding or delay of such approval or
consent by Sublessor, it being intended that Sublessee's sole
remedy shall be an action for injunction or specific performance
and that said remedy of an action for injunction or specified
performance shall be available only in those cases where
Sublessor shall have expressly agreed in writing not to
unreasonably withhold or delay its consent.
11. If for any reason the term of the Master Lease shall
terminate prior to the expiration date of this Sublease, this
Sublease shall thereupon be terminated and Sublessor shall not be
liable to Sublessee by reason thereof, unless both (a) Sublessee
shall not then be in default hereunder and (b) said termination
shall have been effected because of the breach of default of
Sublessor under the Master Lease, not the result of an act or
omission of Sublessee.
12. Sublessee shall not, by operation of law or otherwise,
assign, sell, mortgage, pledge or sublet the Premises or any part
or parts thereof, or grant any concession or license or otherwise
permit occupancy of all or any part of the Premises by any
person, without the consent of Sublessor such consent not to be
unreasonably withheld.
13. Sublessor shall not agree to or enter into any modification
of its Master Lease with Gran Central Corporation, which shall
have an adverse effect on Sublessee's rights under this sublease
document.
14. The months of July, August and September,and October 1996
shall be rent free upon full execution of this Sublease.
15. Sublessee shall also be responsible for the payment of any
late charges imposed on Sublessor by Gran Central Corporation
"GCC" as a result of Sublessee's delinquency and/or failure in
the payment of rent.
16. The following shall be deemed to be events of default by
Sublessee under this Sublease: (1) Sublessee shall fail to pay
when due any installment of rent or any other payment required
pursuant to this Sublease; and provided Sublessor has notified
Sublessee in writing of such default and Sublessee has failed to
cure such default within three (3) days after receipt of written
notification; (2) Sublessee shall fail to comply with any term,
provision or covenant of this Sublease other than the payment of
rent, excluding a default that may cause damage or injury to
property or persons and the failure is not cured within ten (10)
days, or a reasonable time after written notice to Sublessee; (3)
Sublessee shall be adjudged bankrupt or insolvent under any
applicable federal or state bankruptcy or insolvency law or admit
that it cannot meet its financial obligations as they become due;
(4) a receiver or trustee shall be appointed for all or
substantially all of the assets of Sublessee; (5) Sublessee shall
make a transfer in fraud of creditors or shall make an assignment
for the benefit of creditors; or (6) Sublessee shall do or permit
to be done any act which results in a lien being filed against
the Leased Premises or the Building and/or project of which the
Leased Premises are a part; (7) the vacating or abandonment of
the Premises by Sublessee.
17. Upon the occurrence of any event of default set forth in this
Sublease, Sublessor shall have the option to pursue any one or
more of the remedies as set forth herein without any notice or
demand: (1) Sublessor may enter upon and take possession of the
Leased Premises, by picking or changing locks if necessary, and
lock out,' expel or remove Sublessee and any other person who may
be occupying all or any part of the Leased Premises without being
liable for any claim for damages and relet the Leased Premises on
behalf of Sublessee and receive the rent directly by reason of
the reletting. Sublessee agrees to pay Sublessor on demand any
deficiency that may arise by reason of reletting of the Leased
Premises; further, Sublessee agrees to reimburse Sublessor for
any expenditures made by it in order to relet the Leased
Premises, including, but not limited to, remodeling and repair
costs; (2) Sublessor may enter upon the Leased Premises, by
picking or changing locks if necessary, without being liable for
any, claims for damages, and do whatever Sublessee is obligated
to do under the term of this Sublease. Sublessee agrees to
reimburse Sublessor on demand for any expenses which Sublessor
may incur in effecting compliance with Sublessee's obligations
under this Sublease; further, Sublessee agrees that Sublessor
shall not be liable for any damages resulting to Sublessee from
effecting compliance with Sublessee's obligations trader this
Sublease caused by the negligence of Sublessor or otherwise. (3)
Sublessor may terminate this Sublease, in which event Sublessee
shall immediately surrender the Leased Premises to Sublessor, and
if Sublessee fails to surrender the Leased Premises, Sublessor
may, without prejudice to any other remedy which it may have for
possession or arrearages in rent, enter upon and take possession
of the Leased Premises, by picking or changing locks, if
necessary, and lock out, expel or remove Sublessee and any other
person who may be occupying all or any part of the Leased
Premises without being liable for any claim for damages.
Sublessee agrees to pay on demand the amount of loss and damage
which Sublessor may suffer by reason of the termination of this
Sublease under this section, whether through inability to relet
the Leased Premises on satisfactory terms or otherwise.
Notwithstanding any of the remedies set forth in this Sublease,
in the event Sublessor has made rent concessions of any type or
character, or waived any base rent, and Sublessee fails to take
possession of the Leased Premises on the commencement date or
otherwise defaults at any time during the term of this Sublease,
the rent concessions, including any waived base rent, shall be
cancelled and the amount of the base rent or other rent
concessions shall be due and payable immediately as if no rent
concessions or waiver of any base rent had ever been granted. A
rent concessions or waiver of the base rent shall not relieve
Sublessee of any obligation to pay any other charge due and
payable under this Sublease. (4) Maintain Sublessee's right to
possession in which case this Sublease shall continue in effect
whether or not Sublessee shall have abandoned the Premises. In
such event, Sublessor shall be entitled to enforce all of
Sublessor's rights and remedies under this Sublease, including
the right to recover the rent as it becomes due hereunder.
18. Sublessor or its agents or contractor shall have the right to
enter Premises with reasonable notice for the purpose of
fulfilling its lease obligations to Gran Central Corporation
"GCC" under its lease and for the purposes of doing repairs,
maintenance and general service or to inspect, alter or separate
electrical, water, sewer or security services on the Premises to
service Sublessor's property as defined in the Master Lease.
19. This sublease document shall be null and void if not executed
by Sublessor and returned and delivered to Sublessee by July 25,
1996.
20. Sublease Agreement, Addendum and Exhibits are contingent upon
Sublessee applying for, within one week of occupancy, and
sometime thereafter receiving from the City of Riviera Beach
an occupational license for the Premises. A copy of said license
shall be delivered to Sublessor within one week upon receipt from
the City of Riviera Beach.
21. Notwithstanding anything to the contrary in paragraph 9 of
the Sublease or paragraph 12 of this Addendum, Sublessee shall
have the right to sublease to any subsidiary of Sublessee without
Sublessor's consent. Such subleasing shall not diminish or alter
Sublessee's obligations under this Agreement.
IN WITNESS WHEREOF, Sublessor and Sublessee have entered
into this Addendum to Sublease as of the day and year first above
written.
CLEARSHIELD MANUFACTURING, INC.,
a Florida Corporation
By: /s/ Patrick T. Sullivan
President 7/19/96
BUNZL SOUTH FLORIDA, INC.,
a Florida Corporation
By: Thomas Emge
Vice President
EXHIBIT A
Drawing of building showing full facility
EXHIBIT B
Drawing of entire building with highlighting of subleased space.
EXHIBIT "C"
RENT SCHEDULE
SQ.FT. GROSS MONTHLY MONTHLY GROSS PAYMENT
TERM OCCUPIED RATE PSF GROSS RENT SALES TAX* FOR TERM
Occ. - 9/30/96** 27,000 $0.00 $ 0.00 $ 0.00 $ 0.00
11/1/96-6/30/97 27,000 $3.75 $8,437.50 $506.25 $ 72,056.25
7/l/97 -6/30/98 27,000 $3.95 $8,887.50 $533.25 $113,049.00
7/l/98 -6/30/99 27,000 $4.03 $9,067.50 $544.05 $115,338.60
7/l/99 -6/30/00 27,000 $4.11 $9,247.50 $554.85 $117,628.20
7/l/00 -6/30/01 27,000 $4.19 $9,427.50 $565.65 $119,917.80
7/l/01 -6/30/02 27,000 $4.28 $9,630.00 $577.80 $122,493.60
7/l/02 -5/14/03 27,000 $4.36 $9,810.00 $588.60 $109,185.30
* State sales tax subject to change.
** Occ. equals date of occupancy.
CONSENT TO SUBLEASE
Gran Central Corporation, hereinafter referred to as "GCC",
as successor in interest of the rights and obligations of Florida
East Coast Railway Company, hereinafter referred to as "FEC", in
and to that certain Lease dated October 15, 1982 executed by FEC
as Lessor and Palm Beach Paper Company, hereinafter referred to
as "PBPC", as Lessee, pursuant to Paragraph 15 of said Lease,
does hereby consent to that certain Sublease and Addendum hereto
dated July 1, 1996 and executed by Bunzl South Florida, Inc.,
hereinafter referred to as "BSF", successor in interest to the
rights and obligations of PBPC as Sublessor and ClearShield
Manufacturing, Inc. hereinafter referred to as "CMI", as
Sublessee.
This Consent is not intended to operate as a waiver of any
rights which GCC has under the terms of the Lease or applicable
federal, state or local laws, rules and regulations. GCC
specifically retains the right to enforce any provision of the
Lease through action at law or in equity or otherwise.
To the best of GCC's knowledge and belief, PBPC is not in
default or breach of any of the terms of the Lease and no
modifications or amendments have been made to the Lease, not
otherwise disclosed, prior to the execution of this Consent.
GCC agrees to notify CMI if PBPC or BSF commits any act or
omission constituting a default of the Lease, and CMI may cure
such default or breach within ten (10) days of receipt of notice
thereof.
GCC further consents to the use of the Leased Premises by CMI
for a purpose permitted by any and/or all applicable zoning and
land use regulations and/or ordinances and to the erection
of CMI's sign upon the Premises, provided such sign shall conform
to all applicable federal, state and local laws, ordinances,
rules and regulations governing the size, placement and erection
of signs.
IN WITNESS WHEREOF, this Consent to Sublease has been
executed this 25th day of July, 1996.
WITNESSES GRAN CENTRAL CORPORATION:
/s/ (Illegible) By: /s/ W. E. Durham
/s/ David S. Tillis Vice President
Exhibit 10.4
AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into this
22nd day of May, 1996 by and among BERNSTEIN LEIBSTONE
ASSOCIATES, INC., a New York corporation ("BLAI), TTSB, LTD., an
Ohio limited liability company ("TTSB"), WILLIAM LEIBSTONE
ASSOCIATES, INC., a Florida corporation ("WLAI"), and WILLIAM
LEIBSTONE ("Leibstone").
WITNESSETH:
WHEREAS, WLAI issued a pomissory note dated July 14, 1995 in
the principal amount of Nine Hundred and Forty-One Thousand Three
Hundred and Forty-Eight Dollars ($941,348) in favor of BLAI ("WLAI
Note"); and
WHEREAS, the WLAI Note is personally guaranteed by Leibstone
on a non-recourse basis pursuant to a nonrecourse guaranty dated
July 14, 1995 ("Guaranty"), which Guaranty is secured by a pledge
of One Million One Hundred Thousand (1,100,000) shares of the
common stock of BLAI owned by Leibstone ("Leibstone Stock")
pursuant to a stock pledge and escrow agreement dated July 14,1995
("Leibstone Pledge Agreement") among Leibstone, BLAI and Ruden,
McClosky, Smith, Schuster & Russell, P.A., as escrow agent ("Escrow
Agent"); and
WHEREAS, TTSB desires to acquire the WLAI Note from BLAI in
exchange for a promissory note to be issued by TTSB in favor of
BLAI ("TTSB Note") in the original principal amount of One Million
Thirteen Thousand Six Hundred Sixty-Two and 60/100 Dollars
($1,013,662.60); and
WHEREAS, the TTSB Note will be secured by a pledge by TTSB of
Five Hundred Six Thousand (506,000) shares of BLAI common stock
pursuant to a stock pledge agreement in favor of BLAI ("TTSB
Pledge Agreement"); and
WHEREAS, BLAI desires to sell the WLAI Note and assign its
rights under the Guaranty and the Leibstone Pledge Agreement to
TTSB in exchange for the TTSB Note and the rights to the
collateral securing the TTSB Note as provided in the TTSB Pledge
Agreement, and TTSB desires to consummate such transactions in the
manner and under such terms and conditions as are set forth
herein; and
WHEREAS, immediately upon TTSB's acquisition of BLAI's right,
title and interest in and to the WLAI Note, the Guaranty and the
Leibstone Pledge Agreement, TTSB shall assign to Leibstone all of
its right, title and interest in and to the WLAI Note, the Guaranty
and the Leibstone Pledge Agreement, and, in consideration thereof,
Leibstone shall absolutely assign to TTSB Five Hundred Six
Thousand (506,000) shares of the Leibstone Stock; and
WHEREAS, Leibstone desires to make a loan of One Hundred
Thousand Dollars ($100,000) to BLAI ("Leibstone Loan") and BLAI
desires to accept such Leibstone Loan, which Leibstone Loan shall
be evidenced by a promissory note issued by BLAI in favor of
Leibstone ("BLAI Note").
NOW, THEREFORE, in consideration of the mutual promises
covenants and agreements contained herein, the parties hereby agree
as follows:
SECTION 1. The Transactions.
At the Closing (as hereinafter defined), the following
transactions shall occur:
(a) ExchangeTransaction. BLAI shall sell, transfer
assign, and convey to TTSB all of its right, title and interest in
and to the WLAI Note, the Guaranty and the Leibstone Pledge
Agreement and in exchange therefor TTSB shall issue to BLAI the
TTSB Note, which TTSB Note will be secured by the TTSB Pledge
Agreement;
(b) Assignment of TTSB's Rights to Leibstone.
Immediately thereafter, TTSB shall sell, transfer, assign and
convey to Leibstone all of its right, title and interest in and to
the WLAI Note, the Guaranty and the Leibstone Pledge Agreement and
in exchange therefor Leibstone shall absolutely assign to TTSB
Five Hundred Six Thousand (506,000) shares of the Leibstone Stock;
and
(c) Leibstone Loan. Leibstone shall make the Leibstone
Loan to BLAI and BLAI shall deliver the BLAI Note to Leibstone in
exchange therefor.
SECTION 2. Closing. The closing (the "Closing") of the
transactions described in Section 1 hereof (the "Transactions")
shall take place at the offices of Ruden, McClosky, Smith, Schuster
& Russell, P.A. in Fort Lauderdale, Florida, upon the performance
of the parties' respective obligations in Sections 5, 6 and 7
hereof.
SECTION 3. Representations and Warranties BLAI. As a
material inducement to TTSB and Leibstone to enter into this
Agreement and consummate the Transactions, BLAI hereby represents
and warrants as of the date hereof, that:
(a) BLAI is a corporation duly organized and existing under
the laws of the State of New York. BLAI is in good standing under
the laws of the State of Florida. The execution and delivery of
this Agreement and the BLAI Note by BLAI and the performance of its
obligations hereunder and thereunder has been duly authorized and
approved by all requisite corporate action on the part of BLAI.
Pursuant to such authorization, BLAI has all power and authority to
enter into and perform its obligations under this Agreement and
the BLAI Note and the execution hereof and thereof by the person
signing this Agreement and the BLAI Note and all related documents
and instruments on behalf of BLAI is sufficient to bind BLAI to
same.
(b) This Agreement, the BLAI Note and each of the other
documents, instruments and agreements executed by BLAI in
connection herewith constitute its legal, valid and binding
agreement enforceable against it in accordance with their
respective terms except that (i) enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws of general application effecting the enforcement of
the rights and remedies of creditors; and (ii) the availability of
equitable remedies may be limited by equitable principles.
(c) Neither the execution, delivery or performance of
this Agreement, the BLAI Note or any other documents, instruments
or agreements executed by BLAI in connection herewith, nor the
consummation of the transactions contemplated hereby or thereby:
(i) constitutes a violation of or default under (either
immediately upon notice, lapse of time, or both), the Certificate
of Incorporation or Bylaws of BLAI, any provision of any contract,
agreement or other document to which BLAI or its assets may be
bound, or any provision of any law, judgment or order applicable
to BLAI; or (ii) will or could result in the creation or imposition
of any lien, encumbrance or security interest upon or give to any
third party any interest in or right to the WLAI Note, the
Guaranty, the Leibstone Pledge Agreement or the Leibstone Stock.
(d) BLAI is the sole beneficial owner of the WLAl Note
and, upon the consummation of the Transactions set forth in
Section I (a), TTSB will be vested with good and valid title to
the WLAI Note, free and clear of any and all claims, liens, pledges
or encumbrances of any kind. BLAI has not entered into any
agreement (other than this Agreement) which would grant any other
persons any rights or claims under the Guaranty, the Leibstone
Pledge Agreement or the Leibstone Stock.
(e) The TTSB Note to be aquired by BLAI pursuant to this
Agreement will be acquired for BLAI for its own account as an
investment and not with a view to or intention of distribution
thereof. The TTSB Note will not be offered for sale or disposed of
in contravention of the Securities Act of 1933 as amended (the
"Securities Act"), or any applicable state securities laws. BLAI
is an "accredited investor" as that term is defined in Regulation
D of the Securities.Act. BLAI has made a decision to enter into
this Agreement and consummate the Transactions described herein
based upon BLAI's own investigation of TTSB as it deems necessary
in order for it to make a fully informed decision to enter into
this Agreement without reliance upon any representations or
warranties of TTSB except those expressly made to BLAI hereunder.
SECTION 4. Representations and Warranties of TTSB. As a
material inducement to BLAI and Leibstone to enter into this
Agreement and consummate the Transactions, TTSB hereby represents
and warrants that:
(a) TTSB is a limited liability company duly organized
and existing under the laws of the State of Ohio. The execution
and delivery of this Agreement, the TTSB Note, the TTSB Pledge
Agreement and each of the other documents, instruments and
agreements executed by TTSB in connection herewith and therewith
and the performance of its obligations hereunder and thereunder
have been duly authorized and approved by all requisite corporate
action on the part of TTSB. Pursuant to such authorization, TTSB
has all power and authority to enter into and perform its
obligations under this Agreement, the TTSB Note, the TTSB Pledge
Agreement and each of the other documents, instruments and
agreements executed by TTSB in connection herewith and therewith
and the execution hereof and thereof by the person signing this
Agreement, the TTSB Pledge Agreement and all related documents and
instruments on behalf of TTSB is sufficient to bind TTSB to the
same. This Agreement, the TTSB Note, the TTSB Pledge Agreement and
each of the other documents, instruments and agreements executed
by TTSB in connection herewith or therewith constitute, legal,
valid and binding agreements of TTSB enforceable against it in
accordance with their respective terms except that (i)
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general
application affecting the enforcement of the rights and remedies
of creditors; and (ii) the availability of equitable remedies may
be limited by equitable principles.
(c) Neither the execution, delivery or performance of
this Agreement, the TTSB Note or the TTSB Pledge Agreement or any
other, documents, instruments or agreements executed by TTSB in,
connection herewith or therewith, nor the consummation of the
transactions contemplated hereby or thereby (i) constitutes a
violation of or default under (either immediately upon notice, or
upon lapse of time, or both), the Articles of Organization or other
constituent documents of TTSB, any provision of any contract,
agreement or other document to which TTSB or its assets (including
the collateral to be pledged under the TTSB Pledge Agreement) may
be bound, or any provision of any law, judgment or order
applicable to TTSB; or (ii) could result in the creation or
imposition of any lien, encumbrance or security interest upon or
give to any third party any interest in or right to the WLAI Note,
the Guaranty, the Leibstone Pledge Agreement or the Leibstone
Stock (other than as contemplated by this Agreement).
(d) The WLAI Note to be acquired by TTSB pursuant to
this Agreement will be acquired by TTSB for its own account as an
investment and not with a view to or intention of distribution
thereof. The WLAI Note will not be offered for sale or disposed of
in contravention of the Securities Act or any applicable state
securities laws. TTSB is an "accredited investor" as that term is
defined in Regulation D of the Securities Act. TTSB has made a
decision to enter into this Agreement and consummate the
Transactions described herein based upon TTSB's own investigation
of WLAI as it deems necessary in order for it to make a fully
informed decision to enter into this Agreement, without reliance
upon any representations or warranties of BLAI, WLAI or Leibstone,
except those expressly made to TTSB hereunder.
(e) Immediately after the transfer of the WLAI Note by
BLAI to TTSB contemplated herein, TTSB will be the sole beneficial
owner of the WLAI Note and, upon the consummation of the
Transactions contemplated by Section I (b) hereof, Leibstone will
be vested with good and valid title to the WLAI Note, free and
clear of any and all claims, liens, pledges or encumbrances of any
kind. TTSB has not entered into any agreement (other than as
contemplated by this Agreement) which would grant any other
persons any rights or claims under the Guaranty, the Leibstone
Pledge Agreement or the Leibstone Stock.
(f) TTSB will be the sole beneficial owner of the
collateral pledged under the TTSB Pledge Agreement and owns such
collateral free and clear of any and all claims, liens, pledges or
encumbrances of any kind.
SECTION 5. Conditions to BIAl's Obligation at the Closing.
The obligation of BLAI to consummate the transactions described in
Section 1, hereof at the Closing shall be subject to the
satisfaction as of the Closing of the following conditions:
(a) The representations and warranties of TTSB set forth
in Section 4 hereof shall be true and correct.
(b) TTSB shall have delivered to BLAI a duly executed
original of the TTSB Note.
(c) TTSB shall have delivered to BLAI a duly executed
original Pledge Agreement, together with all certificates
representing the collateral pledged thereunder and any stock powers
reasonably requested by BLAI.
(d) Leibstone shall have made the Leibstone Loan to
BLAI.
SECTION 6. Conditions to TTSB's Obligations at the Closing.
The obligation of TTSB to consummate the transactions contemplated
by Section I hereof at the Closing shall be subject to the
satisfaction as of the Closing of the following conditions:
(a) The representations and warranties of BLAI set forth
in Section 3 hereof shall be true and correct.
(b) BLAI shall have delivered to TTSB the original WLAI
Note duly endorsed for transfer to TTSB.
(c) BLAI shall have delivered to TTSB the original
Leibstone Guaranty and the original Leibstone Pledge Agreement
(and the Leibstone Stock pledged thereunder) together with such
documents or instruments of assignment as are requested by TTSB to
assign BLAI's rights therein to TTSB.
(d) Leibstone shall have absolutely assigned Five
Hundred Six Thousand (506,000) shares of the Leibstone Stock to
TTSB.
SECTION 7. Conditions to Leibstone Obligations at the
Closing. The obligation of Leibstone to make the Leibstone Loan
to BLAI at the Closing shall be subject to the satisfaction, as of
the Closing, of the following conditions:
(a) The representations and warranties of BLAI and TTSB
set for the Sections 3 and 4 hereof shall be true and correct.
(b) TTSB shall have delivered to Leibstone the original
WLAI Note, duly endorsed for transfer to Leibstone.
(c) TTSB shall have delivered to Leibstone the original
Guaranty and the original Leibstone Pledge Agreement (and 594,000
shares of the Leibstone Stock pledged thereunder), together with
such documents or instruments of assignment as are requested by
Leibstone to assign TTSB's rights therein to Leibstone.
(d) BLAI shall have delivered to Leibstone the original
BLAI Note.
SECTION 8. Agreement of Leibstone. Leibstone covenants and
agrees with BLAI that he shall sell no more than (a) Forty Four
Thousand (44,000) shares of the Leibstone Stock.for the first
sixty period commencing after the Closing; and (b) Three Hundred
Nineteen Thousand (319,000) shares (including any shares sold in
compliance with clause (a) hereof) of the Leibstone Stock during
the period commencing sixty (60) days after the Closing through the
date that is one hundred twenty (120) days after the Closing.
Leibstone shall be permitted to sell any or all of the Leibstone
Stock beginning on the date that is one hundred twenty (120) days
after the Closing. Nothing contained in this Agreement shall in
any way limit or prohibit Leibstone from selling any shares (other
than the Leibstone Stock) of BLAI common stock owned by Leibstone.
SECTION 9. Miscellaneous.
(a) Entire Agreement. This Agreement sets forth all of
the promises, covenants agreements, conditions and understandings
between the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements or conditions, expressed or implied,
oral or written, except as herein contained. No changes of or
modifications or additions to this Agreement shall be valid unless
the same shall be in writing and signed by the parties hereto.
(b) Counteparts. This Agreement and any amendments
hereto may be executed in one or more counterparts, each of which
shall be deemed an original and all of which together will
constitute one and the same instrument.
(c) Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Florida and any
proceeding arising between the parties in any manner pertaining or
related to this Agreement shall, to the extent permitted by law, be
held in Broward County, Florida.
(d) Notice. All notices, requests, demands and other
communications hereunder shall be deemed to have been duly given
if the same shall be in writing and shall be delivered personally
or sent by registered or certified mail, postage prepaid, and
addressed as set forth below.
If to BLAI: Bernstein Leibstone Associates, Inc.
5601 Corporate Way
Suite 301
West Palm Beach, Florida 33407
If to TTSB: TTSB, Ltd.
10606 Orinda Drive
Cincinnati, Ohio 45249
If to WLAI or
Leibstone: William Leibstone Associates, Inc.
1776 North Pine Island Road, Suite 308
Plantation, Florida 33322
(e) Further Assurances. The parties hereto will execute
and deliver such further instruments and do such futher acts and
things as may be reasonably required to carry out the intent and
purposes of this Agreement.
(f) No Third Party Beneficiary. This Agreement is made
solely and specifically between and for the benefit of the parties
hereto, and their respective successors and assigns, subject to
the express provisions hereof relating to successors and assigns,
and no other person shall have any rights, interest or claims
hereunder or be entitled to any benefits under or on account of
this Agreement as a third party beneficiary or otherwise.
(g) Successors and Assigns. This Agreement shall be
binding upon the parties hereto, their heirs, administrators,
successors and assigns.
(h) Prevailing Party. If any party hereto is required to
engage in litigation against any other party hereto, either as a
plaintiff or as defendant, in order to enforce or defend any rights
under this Agreement and such litigation results in a final
judgment in favor of such party ("Prevailing Party"), then the
party or parties against whom said final judgment is obtained shall
reimburse the Prevailing Party for all direct, indirect or
incidental expenses incurred including, but not limited to all
attorney's fees, paralegals' fees, court costs and other expenses
incurred throughout all negotiations, trials or appeals undertaken
in order to enforce the Prevailing Party's rights hereunder.
[Left Intentionally Blank]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date and year set forth above,
BERNSTEIN LEIBSTONE ASSOCIATES, INC.
By: /s/ Darrell Pterreson
Darrell Peterson, Chief Executive
Officer
TTSB, LTD.
By: /s/ Jeffrey Schradin
Jeffery Schradin, Member
WILLIAM LEIBSTONE ASSOCIATES INC.
By: /s/ William Leibstone
William Leibstone, President
/s/ William Leibstone
WILLIAM LEIBSTONE
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<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> MAR-31-1996
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<RECEIVABLES> 1443140
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