REGISTRATION NO. ________
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
R-TEC TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in its Charter)
New Jersey 22-3615979
--------------- ------------------
(State or Other (Primary Standard (I.R.S. Employer
Jurisdiction of Classification Code Identification No.)
Incorporation or Number)
Organization)
61 Mallard Dr., P.O. Box 282, Allamuchy, New Jersey, 07820, (888) 299-7832
--------------------------------------------------------------------------
(Address and Telephone Number of Registrant's Principal Place of Business)
Michael K. Mullen, Esq.
Schenck, Price, Smith & King
10 Washington Street
P.O. Box 905
Morristown, New Jersey 07963-0905
(973) 593-1000
---------------------------------------------------------
(Name, Address and Telephone Number of Agent for Service)
Copies to:
Sirota & Sirota LLP
747 Third Avenue
New York, New York 10017
(212) 759-5555
Approximate Date of Proposed Sale to the Public: As soon as practicable from
time to time after this registration statement becomes effective.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.[ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Title of each
Class of Proposed Maximum Proposed Maximum
Securities to be Amount to be Offering Price Aggregate Offering Amount of
Registered Registered Per Share (1) Price Registration Fee
- ----------------- ---------------- ------------------ ------------------ ----------------
<S> <C> <C> <C> <C>
Common Stock 3,750,000 Shares $8.00 $30,000,000.00 $8,340.00
(no par value per share)
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A)
MAY DETERMINE.
_____________________
1 Estimated solely for the purpose of calculating the amount of the
registration fee in accordance with Rule 457 under the Securities Act.
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R-Tec Technologies, Inc.
CROSS-REFERENCE SHEET
Item Number and Heading Heading in Prospectus
- ----------------------- ---------------------
1. Front of the Registration
Statement and Outside Front
Cover Page of Prospectus . . . Facing pages; Front
Cover Page
2. Inside Front and Outside Back
Cover Pages of Prospectus . . Inside Front and Outside
Back Cover Pages of Prospectus
3. Summary Information and Risk
Factors . . . . . . . . . . . Prospectus Summary; Risk Factors
4. Use of Proceeds . . . . . . . Prospectus Summary; Use of
Proceeds; Description of Business
5. Determination of
Offering Price . . . . . . . . Cover Page; Prospectus Summary;
Risk Factors; Determination of
Offering Price
6. Dilution . . . . . . . . . . Dilution; Comparative Data
7. Selling Security Holders . . . Not applicable
8. Plan of Distribution . . . . . Front Cover Page; Plan of
Distribution
9. Description of the Securities Description of Securities
10. Interest of Named Experts and
Counsel . . . . . . . . . . . Not Applicable
11(a) Description of Business . . . Description of Business
11(b). Description of Property . . . Management - Facilities
11(c). Legal Proceedings . . . . . . Legal Matters
11(d). Market for Common Equity and
Related Stockholder Matters . Front Cover Page; Risk Factors;
Shares Eligible For Future Sale
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11(e)(f) Financial Statements . . . . . Financial Statements
(g).
11(h). Management's Discussion and
Analysis or Plan of Operation . Plan of Operations
11(i). Changes In and Disagreements
with Accountants on Accounting
and Financial Disclosure . . Not Applicable
11(j) Directors, Executive Officers,
Promoters and Control Persons Directors, Executive Officers,
Promoters and Control Persons
11(k). Executive Compensation . . . . Executive Compensation
11(l). Security Ownership of Certain
Beneficial Owners and
Management . . . . . . . . . . Security Ownership of Certain
Beneficial Owners and Management
11(m) Certain Relationships and
Related Transactions . . . . . Related Transactions
12. Disclosure of Commission
Position on Indemnification for
Securities Act Liabilities . . Disclosure of Commission Position
on Indemnification for Securities
Act Liabilities
The information in this prospectus is not complete and may be changed.
We may not sell these securities until the Registration Statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
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SUBJECT TO COMPLETION, DATED FEBRUARY __, 1999
PROSPECTUS
3,750,000 SHARES
R-TEC TECHNOLOGIES, INC.
COMMON STOCK
-------------
This is an initial public offering of shares of common stock of R-Tec
Technologies, Inc. All of the shares to be sold in the offering are being sold
by the company. There is currently no public market for the common stock. R -Tec
Technologies expects that the public offering price of the common stock will be
$8.00 per share.
The shares will be sold to the public by R-Tec's officers and directors
who will not be compensated for their sales efforts. The company is not required
to sell any specific number or dollar amount of common stock, but will use its
best efforts to sell all of the shares being offered.
This offering is for a minimum of 625,000 shares and not more than
3,750,000 shares. Until at least 625,000 shares are fully subscribed, all
subscription payments will be deposited into an escrow account at the Bank of
New York. If 625,000 shares are not subscribed to within three (3) months after
the effective date of this prospectus, all proceeds will be promptly refunded in
full, without interest, and without any deduction for expenses. This offering
will end on the earlier of the following: Three months after the effective date
of this prospectus if 625,000 shares are not subscribed, the sale of the
3,750,000 shares, twelve months after the effective date of this prospectus or
the date on which the Company decides to close the offering, which will not
exceed twelve months from the effective date of this prospectus.
While it does not plan to do so at this time, the company may engage
the services of broker-dealers to assist it in selling the shares. If it does
so, the maximum commission paid to any such broker-dealer will be 10% of the
offering price.
The shares will be quoted on the NASD Electronic Bulletin Board under
the symbol "_______."
Investing in the common stock involves a high degree of risk. See "Risk
Factors" beginning on page 10.
Price To Proceeds To
Public Company
-------------- --------------
Per Share. . . . . . . . . . . . . . $ 8.00 $ 8.00
Total Minimum (625,000 Shares). . . 5,000,000.00 5,000,000.00
Total Maximum (3,750,000 Shares). . 30,000,000.00 30,000,000.00
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is ______, 1999
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TABLE OF CONTENTS
Page
ADDITIONAL INFORMATION . . . . . . . . . 3
PROSPECTUS SUMMARY . . . . . . . . . . . 4
RISKS FACTORS. . . . . . . . . . . . . . 10
DILUTION . . . . . . . . . . . . . . . . 16
USE OF PROCEEDS. . . . . . . . . . . . . 17
MANAGEMENT'S DISCUSSION AND ANALYSIS . . 19
BUSINESS . . . . . . . . . . . . . . . . 20
MANAGEMENT AND AFFILIATES. . . . . . . . 29
PRINCIPAL SHAREHOLDERS . . . . . . . . . 32
CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS. . . . . . 32
ORGANIZATION WITHIN LAST FIVE YEARS. . . 34
DESCRIPTION OF SECURITIES. . . . . . . . 34
PLAN OF DISTRIBUTION . . . . . . . . . . 36
LEGAL MATTERS. . . . . . . . . . . . . . 37
EXPERTS. . . . . . . . . . . . . . . . . 37
FINANCIAL STATEMENTS . . . . . . . . . . 38
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This Prospectus contains forward-looking statements which involve risk
and uncertainties. R-Tec Technologies, Inc.'s actual results may differ
significantly from the results discussed in those forward-looking statements.
Factors that might cause such a difference, include, but are not limited to,
those discussed in "Risk Factors" beginning on page 10 of this Prospectus.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
In connection with the offering of the common stock, the Company has
filed a Registration Statement with the Securities and Exchange Commission.
There is additional information concerning R-Tec Technologies, Inc. contained in
the Registration Statement that is not contained in this prospectus. In
addition, beginning with the effective date of this prospectus, we will be
required to file annual quarterly and special reports and proxy statements with
the SEC. You may read and copy any document we file at the SEC's Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call
the SEC at 1-800-SEC-0330 for further information on the operation of the Public
Reference Room.
Our SEC filings will also be available at our web site at
http:www.rtectechnologies.com or at the SEC's web site http:www.sec.gov. You may
also request a copy of these filings, at no cost, by writing the company at
R-Tec Technologies, Inc., 61 Mallard Drive, P.O. Box 282, Allamuchy, New Jersey
07820.
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PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this
prospectus and may not contain all of the information that you should consider
before investing in the common stock. You should read the entire prospectus
carefully, including the "Risk Factors" section and the financial statements and
the notes to those statements.
R-Tec Technologies, Inc.
R-Tec Technologies, Inc. was formed in October, 1998 for the purpose of
commercially exploiting its proprietary technology for detecting gas leaks. The
company has not yet commenced commercial operations. To date it has devoted all
of its energies to its initial organization, product research and development,
developing a business plan and fundraising efforts, primarily preparing the
documentation related to this offering.
Proprietary Technology. R-Tec's proprietary technologies are protected
by a patent that has been assigned to the company. We plan to use these
technologies to develop a product line of gas detecting paints that will be used
in a variety of industrial and manufacturing settings. The paints will be used
to coat pipe junctions (valves, caps, joints, etc.). The paints are designed to
change color when gas escapes through the coated junction allowing for rapid
detection of small gas leaks.
We believe that our products will have broad application in areas such
as the manufacture and installation of air conditioning and refrigeration
systems. During manufacture or installation the paint is applied externally to
the joints of the system. If any gas leaks through any painted junction, the
paint - which is initially blue - will change to a bright fluorescent yellow at
the location of the leak.
In addition to detecting leaks, we believe that some of our products
will also neutralize the ChloroFlouroCarbon ("CFC") contained in the leaking gas
by removing the chlorine and fluoride and, possibly, rendering the leaking gas
inert and potentially harmless to the ozone layer. Also, by allowing the early
discovery and repair of gas leaks, the need to replace lost gases will be
reduced, potentially reducing the amount of CFC that needs to be produced,
contributing to the goal of reducing CFC production worldwide.
Initial Products. R-Tec has three products that we believe are ready
for production and sale:
R-Tect 22 - an external application paint for detecting R-22 Freon
leaks in air conditioning systems;
R-Tect CO2 - an external application paint for detecting CO2 leaks in
pipe systems which carry CO2 in gas or liquid forms; and
R-Tect Natural Gas - an external application paint for detecting
natural gas leaks.
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We also expect to shortly complete development of:
R-Tect 12 - an external application paint for detecting R-12 gas,
primarily in automotive applications; and
R-Tect 134A - a product for detecting R-134, a gas currently being used
in air conditioning systems.
STRATEGY
R -Tec has a two phase plan for developing its business. Phase 1
involves establishing manufacturing and distribution relationships and
commencing the distribution of three products. Phase 2 will address expanding
the company's product lines. Because of the lead times necessary to implement
this strategy, we do not expect to realize significant revenues from sales
before at least six months following completion of this offering.
Phase 1 - Establish Manufacturing and Distribution Relationships and
Begin Distribution of the First Three Products
The company's manufacturing and distribution strategy is based on
developing relationships with established manufacturing and distribution
partners. By utilizing these relationships we hope to avoid the need to build
and manage costly production and sales infrastructures. We believe that market
acceptance of our products will also be enhanced if they are included among the
products offered by well respected distribution partners.
Manufacturing and Distribution Relationships.
Anscott Chemical Industries, Inc. - R-Tec Technologies has contracted
with Anscott Chemical Industries, Inc. to be the exclusive manufacturer in the
United States of its first three products, R-Tect 12, R-Tect 22 and R-Tect CO2.
Anscott Chemical Industries, Inc., is believed to be a nationally recognized
manufacturer of specialty commercial products. The agreement has a five year
term. We estimate that Anscott will supply us with about 80% of our production
requirements for our first year of sales.
Motors and Armatures Corp. - R Tec has entered into an oral
distribution arrangement with Motors and Armatures Corp. ("MARS") pursuant to
which MARS agreed to undertake a six month test marketing program to determine
the potential sales volume of our products. MARS has indicated that during the
test period it will promote our products as both tools (leak detectors) and as
preventative maintenance products.
MARS is believed to be one of the largest distributors of air
conditioning, refrigeration and heating parts and supplies to wholesalers and
manufacturers in the United States and Canada. MARS is served by more than 50
independent manufacturer's representatives working for 13 companies that market
MARS' products.
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If the test marketing program is successful, we expect MARS to
distribute our products to organizations that will in turn sell them to air
conditioning and refrigeration contractors. MARS has informed us that it intends
to create artwork to be used when it distributes our products, will allocate
$156,000 in advertising for the first year of R-Tec product sales and provide a
direct mail campaign to reinforce the advertising program.
We have received an initial order for 5,000 R-Tect 12 kits from MARS.
Company Efforts to Expand Commercial Use of Its Initial Products. - R
Tec intends to undertake its own direct marketing efforts during Phase 1 in
addition to the efforts undertaken by MARS. During Phase 1 we plan to complete
our research and development efforts for our initial product lineup and begin
direct marketing efforts to potential users of our products.
The company believes that these potential users include public utility
companies, automotive, marine, aviation and aerospace industry participants as
well as owners and developers of commercial real estate. We also believe that
our products may be attractive to municipalities seeking to reduce maintenance
overhead costs and may also provide important safety benefits in areas prone to
natural disasters.
R-Tec believes that the ability of its products to detect gas and leaks
will develop into a series of significant market opportunities. Our products
have the potential to meet the needs of users who face situations where gas
leaks can expose the user to significant monetary losses or result in life
threatening situations. These include the ability to avert natural gas
explosions, toxic leaks in places like chemical plants, and potential aviation
disasters. In all of these situations our products offer the ability to paint
pipes and joints with a product that will reveal potentially dangerous gas leaks
before danger or injury occurs.
Phase 2 - Expand Product Lines
The company expects to achieve significant and growing revenues as its
initial products gain market acceptance. As the original product lines continue
to grow we expect to develop additional products during Phase 2 which will be
marketed to the users identified in Phase 1.
New Gas Detection Products - We expect to develop additional business
with public utilities as we develop new detection products for additional gases
in response to industry needs. The speed with which we can develop, introduce,
test market and expand sales efforts for new products will determine the pace at
which we are able to realize our Phase 2 goals.
The company expects that its R-Tect Natural Gas detection product will
be available for distribution during Phase 1, with the transition to Phase 2
being marked by the introduction of its next product - a Propane leak detection
product.
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In addition to the Propane Product we hope to develop leak detection
systems for the following gases, using our patented technology:
Ammonia Chlorine Methane
Butane Ethane Methyl Mercaptan
Carbon Monoxide Isobutane Sulphur Hexaflouride
Acetylene Carbon Sulfide 2-Methylpropene
Acetyl Fluoride Carbon Tetrafluoride Nitric Oxide
Allene Hexafluoropropane Nitrogen
Arsine Hydrogen Nitrous Oxide
Boron Trichloride Hydrogen Chloride Other Refrigerants
Boron Trifluoride Isobutylene Phosgene
Bromotrifluoromethane Methyl Ether Propene
1,3-Butadiene Methanethiol Sulphur Dioxide
2-Methylpropane Trimthylamines
Other Potential Applications of R-Tec's Detection Technology
A Method for Measuring Blood Gases - As blood travels through the human
body it carries with it oxygen, carbon dioxide and a variety of metabolic gases.
Restrictions in blood flow, such as those caused by coronary artery disease,
reduce blood flow through the heart and lungs resulting in a decrease in blood
oxygen levels and increase in CO2 levels. We believe that our technology can be
used to detect changes in the amount of CO2 in the blood.
We intend to explore development of a form of the R-Tec detection
system that when combined with DiMethyl Sulfoxide (a substance that carries
medicine into the body), can act as a noninvasive way of measuring CO2 levels in
the blood. The product would take the form of a gel that would periodically be
applied externally (for example, by rubbing it into the subject's wrists) and
which would change color if an excessive amount of CO2 were detected. The
presence of excessive CO2 would serve as a warning indicating the need to seek
medical attention to discover the cause of the condition, possibly averting the
occurrence of a heart attack or stroke.
A Method for Measuring the Freshness of Packaged Poultry - R-Tec plans
to study the feasibility of developing small strips of material to be used to
measure the freshness of packaged poultry. We believe that our technology can be
used to develop a material that would lie on top of the packaged poultry parts.
This material would be colored green indicating that the item is fresh. If
salmonella is present the strip would turn red warning both the retailer and the
consumer of the presence of a disease that would otherwise remain undetected.
A Method for Determining the Integrity of Electric Transformers - R-Tec
plans to work with electric utility companies to develop a system to prevent
transformer explosions. SF6 gas is used as an insulator in many electrical
transformers. When this gas leaks out of a transformer, the possibility of an
explosion exists. At present, there is no way of detecting when a gas leak has
created the potential for an explosion before the explosion occurs. Such an
explosion imposes great costs on both the utility that must replace the
transformer and the consumers that suffer power outages.
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We will propose that a strip of R-Tec leak detection material be placed
on transformers when they are assembled. This will allow utility company workers
to detect leaking and potentially explosive transformers by observing changes in
the color of the detection strip, even as the transformer hangs suspended from
the utility pole.
Los Alamos National Laboratories Inquiry - We have received a request
from the Los Alamos National Laboratory for a sample of our leak detection
products. The company intends to explore the possibility of applying its
technology to detect leaks in the CO2 based systems used to clean nuclear
weapons.
The Company's principal executive offices are located at 61 Mallard
Drive, P.O. Box 282, Allamuchy, New Jersey 07820, telephone (888) 299-RTEC or
(908) 850-8593.
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THE OFFERING
Common Stock Offered: Minimum - 625,000 shares
Maximum - 3,750,000 shares
Offering Price $8.00 per share
Proposed Trading Market
and Symbol NASD Electronic Bulletin Board
"------"
Total Number of
Shares Outstanding
after the Offering
(assuming all offered
shares are sold) 18,750,000 shares
Estimated Net Proceeds
(assuming all offered
shares are sold) $29,800,000.00
Use of Proceeds We intend to use the net proceeds of this
offering to pay existing obligations to
R-Tec's officers and directors, to pay
for the patent assigned to the Company,
to fund the initial business operations
and staffing of R-Tec, to conduct product
research and development, to develop
production and marketing plans, for working
capital and for general corporate purposes.
Dividend Policy We do not intend to pay any cash dividends
for the foreseeable future.
Risk Factors Investing in R-Tec involves a high degree
of risk. Only persons that can bear the
risk of the loss of his or her entire
investment should invest in the common
stock. An extensive discussion of some
of the principal risks is presented in the
"Risk Factors" section of this prospectus.
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RISK FACTORS
Investing in our common stock involves a high degree of risk. In
addition to the other information in this document, you should carefully
consider the following risk factors in evaluating an investment in our common
stock.
Start-Up Company With Limited Operating History.
R-Tec was only recently incorporated, has no significant assets, no
current business operations nor any history of operations and is considered to
be a development stage enterprise. There is absolutely no assurance that the
Company will be able, upon completion of this Offering, to successfully
implement its proposed business or that it will ever operate profitably.
Risk of New Product Development.
R-Tec may experience difficulties that could delay or prevent the
development, introduction and marketing of its products. The Company will be
dependent upon products that will be developed. There can be no assurance that
the company will be able to develop, introduce or market its products or that
problems will not be found in the Company's products or that we will be able to
reduce our technology into products that will be commercially successful. If the
Company is unable on a timely basis to develop new products or enhancements to
existing products, or if its products do not achieve market acceptance or
commercial success, the company's business, operational results and financial
condition will be materially adversely affected and investors could lose their
entire investment.
Lack Of Active Market For Common Stock.
No public market exists for R-Tec's common stock. It is anticipated
that the common stock will be quoted on the NASD inter-dealer Electronic Bullet
Board system upon completion of this Offering. However, there can be no
assurance that any market will develop for the securities or that if a market
does develop, that it will continue. Accordingly, you may not be able to sell
your shares promptly or at all, or sell your shares at a price equal to or above
the price you paid for the shares.
Dependence on Patent Protection.
The technology for developing R- Tec's products will be protected by a
patent exclusively assigned to the Company. However, due to an error this
assignment was erroneously made to an unrelated company named "R-Tec, Inc." The
Company is in the process of correcting this error and anticipates that in or
about March, 1999 it will file a statement correcting the name on the assignment
with the U.S. Patent Office.
There can be no assurance that any of our future patent applications
will be granted, that any current or future patent or patent applications will
provide significant protection for our products or technology, be of commercial
benefit or that the validity of such patents or patent applications will not be
challenged. Moreover, there can be no assurances that foreign patent, trade
secret or copyright laws will protect our technologies or that we will not be
vulnerable to competitors who attempt to copy or use the company's products or
processes.
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Benefits To Present Stockholders/Disproportional Risks.
The Officers and Directors collectively have paid a total price of
$3.00 for the 15,000,000 presently outstanding shares of R-Tec's common stock.
Investors in this offering will pay a total purchase price of $30,000,000,
assuming all 3,750,000 shares are sold, the offering and directors will own 80%
of the outstanding shares and investors in this offering will own 20% of the
outstanding shares. Investors in this Offering will contribute to the capital of
the company a disproportionately greater percentage than the ownership they
receive. Present stockholders will benefit from a disproportionately greater
share of the company, if successful, while investors in this offering risk a
disproportionally greater loss of cash invested if the company is not
successful.
Governmental Regulations And Industrial Standards
R-Tec's products will be subject to numerous governmental regulations
designed to protect the health and safety of consumers and the environment.
We believe that our products will comply with all applicable material
governmental health and safety regulations and standards. However, there can be
no assurance that our products will comply with all applicable regulations and
standards. Because the future scope of these and other regulations and standards
cannot be predicted, there can be no assurance that we will be able to comply
with all regulations or industry standards. Non-compliance could result in
governmental restrictions on sales or reductions in customer acceptance of our
products. Compliance may also require significant product modifications, which
may result in increased costs and impaired product performance, which will
adversly affect the company's profitability.
No Underwriter.
R-Tec has not engaged the services of the Underwriter. Thus, the
independent due diligence review of the Company, its affairs and financial
condition, which would ordinarily be performed by an underwriter, have not been
performed. Furthermore, lack of underwriter or broker/dealer participation in
the offering is likely to increase the risk that no market for the company's
securities will develop upon completion of the Offering.
Arbitrary Determination Of Offering Price.
The $8.00 offering price of the common stock was arbitrarily determined
by management of the company and was set at a level substantially in excess of
the price recently paid by management for their shares of common stock. The
price bears no relationship to the company's assets, book value, net worth or
other economic or recognized criteria of value. The public offering price should
not be regarded as an indicator of value or of any future market price of the
company's securities.
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Possible Failure To Obtain Or Maintain
Listing On The OTC Bulletin Board.
Trading in our common stock, if any, is intended to be conducted in the
over-the-counter market in the so-called "pink sheets" or the OTC Bulletin
Board, which was established for securities that do not meet the Nasdaq Small
Cap Marketsm listing requirements. Consequently, selling your common stock would
be more difficult because smaller quantities of stock could be bought and sold,
transactions could be delayed, and security analysts' and news media's coverage
of R-Tec may be reduced. These factors could result in lower prices and larger
spreads in the bid and ask price for our stock.
Use Of Offering Proceeds To Pay Debts To Officers,
Directors And Related Parties.
On January 6, 1999, R-Tec issued seven promissory notes to its
officers, directors and related parties totalling $1,388,840.22. In addition,
depending on the amount raised in this offering, the company is obligated to pay
a minimum of one million ($1,000,000.00) and a maximum of four million
($4,000,000.00) plus interest, for the patent which was assigned to it. These
payments will be made from the initial proceeds of this offering. Thus, if only
the minimum is sold, the company's level of operations could be materially
adversely affected and the company may not succeed. This event would
significantly increase the risk of loss to those persons who invest in this
offering.
Competition.
There can be no assurance that we will be able to compete successfully
against current or future competitors or technologies or that competitive
pressures faced by R-Tec will not materially adversely affect its business,
operating results and financial condition. Many of our competitors have the
financial resources necessary to enable them to withstand substantial price and
product competition, to implement extensive advertising and promotional
programs, and to introduce new products. The industry is also characterized by
frequent introductions of new products. R-Tec's ability to compete successfully
will depend on its ability to anticipate and respond to competitive factors
affecting the industry, including new products, changes in customer preferences,
demographic trends, pricing strategies by competitors and consolidation in the
industry where smaller companies with leading edge technologies may be acquired
by larger multinational companies.
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We believe that our technology is unique and provides us with the
ability to compete successfully. However, there can be no assurance that we will
be able to become profitable or successfully market our products or implement
our business plan. Competition will be based on many factors including price,
and the quality of products and service.
Some of our competitors have greater financial, marketing and
manufacturing resources. This, together with the limited capital available to
R-Tec, which will limit its marketing effort, creates a significant competitive
disadvantage. If we are not able to compete successfully, regardless of the
quality of our products and the success of this offering, we will have little
chance of succeeding and it is likely investors will lose their entire
investment.
If Only 625,000 Shares Sold, R-Tec
May Not Have Sufficient Capital.
If all 3,750,000 shares are sold, we believe we will have sufficient
capital to fund operations for at least approximately twelve months following
this offering, but there can be no assurance that unexpected costs will not
arise. However, if only 625,000 shares are sold, R-Tec may not have sufficient
capital to fund operations. In addition, R-Tec may be unable to find additional
suitable financing on acceptable terms. Therefore, if only 625,000 shares are
sold, R-Tec's operations will likely be adversely affected and we may not be
able to undertake any of the projects or operations described in this
prospectus, which may result in an entire loss of any amounts invested.
No Commitment To Purchase Common Stock.
No commitment exists by anyone to purchase any of the common stock
offered. Consequently, no assurance can be given that any common stock will be
sold or that even the minimum 625,000 shares will be sold.
The Amounts Paid For Shares Will Be Kept In A Bank Escrow Until The Minimum
Amount Has Been Sold.
If the Minimum 625,000 shares have not been fully subscribed within
three months after the effective date of this prospectus, all monies deposited
in the escrow account will be refunded to the subscribers, without interest and
without any deduction for expenses. During this period, purchasers will be
subscribers and not shareholders of R-TEC. During the Escrow Period, subscribers
will have no right to a return of their payment.
Risk Of Low-Priced Shares.
Since our common stock will not be listed on the Nasdaq Small Cap
Marketsm and/or any Stock Exchange, it may become subject to Rule 15g-9 under
the Exchange Act. That rule imposes additional sales practice requirements on
broker-dealers that sell low-priced securities to persons other than established
customers and institutional accredited investors. For transactions covered by
this rule, a broker-dealer must make a special suitability determination for the
purchaser and have received the purchaser's written consent to the transaction
prior to sale. Consequently, the rule may affect the ability of broker-dealers
to sell our shares and may affect the ability of holders to sell common stock in
the secondary market.
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<PAGE>
Penny Stock Regulation.
Broker/dealer practices in connection with transactions in "penny
stocks" are regulated by certain penny stock rules adopted by the Securities and
Exchange Commission. Penny stocks generally are equity securities with a price
of less than $5.00 (other than securities registered on certain national
securities exchanges or quoted on the Nasdaq system, provided that current price
and volume information with respect to transactions in such securities is
provided by the exchange or system). The penny stock rules require a
broker/dealer, prior to a transaction in a penny stock to deliver a standardized
risk disclosure document that provides information about penny stocks and the
risks in the penny stock market. The broker/dealer also must provide the
customer with current bid and offer quotations for the penny stock, the
compensation of the broker/dealer and its salesperson in the transaction, and
monthly account statements showing the market value of each penny stock held in
the customer's account. In addition, the penny stock rules generally require
that prior to a transaction in a penny stock, the broker/dealer make a special
written determination that the penny stock is a suitable investment for the
purchaser and receive the purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to the
penny stock rules. If R-Tec's common stock becomes subject to the penny stock
rules, investors in this offering may find it more difficult to sell their
securities.
Shares Eligible For Future Sale.
All 15,000,000 shares of the company's common stock owned by the
Officers and Directors are "restricted securities" and may in the future be sold
in compliance with Rule 144 adopted under the Securities Act of 1933. Future
sales of those shares under Rule 144 could depress the market price of the
common stock in any market that may develop. The current outstanding shares
become eligible for sale pursuant to Rule 144 on December __, 1999.
State Blue Sky Registration.
Since R-Tec is not using an underwriter, we must register the
securities in any state where we desire to sell our common stock. We must also
register our Officers and Directors in any state in which we seek to sell our
common stock. However, there can be no assurance that any or all stock
registrations will be approved. Presently, R-Tec intends to register in the
following states:
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New Jersey New York
Connecticut Florida
California Illinois
Texas Pennsylvania
Arizona Ohio
Delaware Maryland
Virginia Massachusetts
Colorado Indiana
Georgia South Carolina
North Carolina Wisconsin
Should any or all stock registrations not be approved, this would
likely result in inpeading the company's ability to sell the 3,750,000 shares
offered for sale and would also result in investors finding it more difficult to
sell their securities.
No Dividends.
The Company does not currently intend to pay cash dividends on its
common stock and does not anticipate paying such dividends at any time in the
foreseeable future.
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DILUTION
Dilution is the difference between the offering price of $8.00 per
share for the common stock offered hereby, and the net tangible book value per
share of common stock immediately after its purchase. The Company's net tangible
book value per share of Common Stock is calculated by subtracting R-Tec's total
liabilities from its total assets less intangible assets, and then dividing by
the number of shares then outstanding. The net tangible book value of R-Tec,
based on the December 31, 1998, audited financial statements was $(1,337.420),
or approximately $(0.09) per share of common stock. Assuming no changes in net
tangible book value subsequent to December, 1998, other than those resulting
from the sale of all the common stock offered hereby, the post offering pro
forma net tangible book value of R-Tec would be $30,037,355, or approximately
$1.60 per share, representing an immediate increase in net tangible book value
of $1.51 per share to existing stockholders and an immediate dilution of $6.40
per share or (80%) to new investors. The following table illustrates the
foregoing information with respect to dilution of new investors on a per share
basis.
Offering price per share $ 8.00
Net book value per share prior to offering $(0.09)
Increase attributable to purchase of shares by new
investors $ 1.60
Post offering pro forma net book value per share $ 1.51
Dilution to investors in this offering $ 6.40
Assuming R-Tec can sell only the minimum 625,000 shares, the post
offering pro forma net tangible book value of R-Tec would be $5,037,355, or
approximately $0.32 per share, representing an immediate increase in net
tangible book value of $0.41 per share to existing stockholders and an immediate
dilution of $7.77 per share or (97%) to new investors. The following table
illustrates the foregoing information with respect to dilution of new investors
on a per share basis.
Offering price per share $ 8.00
Net book value per share prior to offering $(0.09)
Increase attributable to purchase of shares by new
investors $ 0.41
Post offering pro forma net book value per share $ 0.32
Dilution to investors in this offering $ 7.77
The following chart illustrates the pro-forma proportionate ownership
in R-Tec, upon completion of the offering of present stockholders and of
investors in this offering, compared to the relative amounts paid and
contributed to capital of R-Tec by present stockholders and by investors in this
offering, assuming no changes in net tangible book value other than those
resulting from the offering.
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<TABLE>
<CAPTION>
Shares Cash Price/
Owned Paid Percent Share
---------- -------------- ------- -----------
<S> <C> <C> <C> <C>
Present Stockholders 15,000,000 $ 3.00 80% $0.00/Share
New Investors-Maximum 3,750,000 $30,000,000.00 20% $8.00/Share
Present Stockholders 15,000,000 $ 3.00 96% $0.00/Share
New Investors-Minimum 625,000 $ 5,000,000.00 4% $8.00/Share
</TABLE>
USE OF PROCEEDS
The net proceeds to R-Tec from the sale of common stock offered hereby
at an offering price of $8.00 per share are estimated to be $29,800,000.00 if
the maximum is sold, after deducting estimated offering expenses of $200,000.00
for legal, accounting and printing in connection with the offering. The company
does not expect to pay sales commissions or other compensation in connection
with the offering because the common stock will be offered and sold by R-Tec
through its Officers and Directors who will not be compensated for their sales
efforts. The net proceeds will be used principally to provide for research and
development activities and working capital during the initial commencement of
operations as follows:
ESTIMATED
PERCENT OF
PURPOSE AMOUNT PROCEEDS
------- ------ ----------
Research and Development Activities* $ 8,911,160.00 29%
Salary Expense* 3,500,000.00 12%
Parts and Supplies Expense* 3,000,000.00 10%
Office Expense* 6,500,000.00 22%
Sales and Marketing Expense* 2,000,000.00 7%
Promissory Note Expense 5,388,840.00 18%
Travel Expense* 500,000.00 2%
TOTAL* $29,800,000.00 100%
* The expected expenses for the 12 months following the successful completion
of this Offering.
If R-Tec is only able to sell 625,000 shares, the net proceeds to R-Tec
would be estimated to be $4,800,000 after deducting estimated offering expenses
of $200,000.00 for legal, accounting and printing in connection with this
offering. The following summary reflects how R-Tec intends to use the proceeds
if they are able to only sell 625,000 shares.
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<PAGE>
ESTIMATED
PERCENT OF
PURPOSE AMOUNT PROCEEDS
------- ------ ----------
Research and Development Activities* $ 1,000,160.00 21%
Salaries Expense* 500,000.00 10%
Parts and Supplies Expense* 200,000.00 4%
Office Expense* 467,000.00 10%
Sales and Marketing Expense* 200,000.00 4%
Promissory Note Expense* 2,388,840.00 50%
Travel Expense* 50,000.00 1%
TOTAL* $ 4,800,000.00 100%
The foregoing represents management's current estimate of how the
proceeds of this offering will be used and is subject to change based on
changing circumstances and differing needs of the company as they may exist in
the future. R-Tec may reallocate the proceeds within the above described
categories or to other purpose in response to, changes in its plans, industry
conditions, and the company's future revenues and expenditures.
We believe that the net proceeds from the sale of the common stock
offered hereby (assuming that all shares offered are sold) will provide the
company sufficient capital to fund initial operation, development and expansion
of the company's business for approximately the first 12 months following
completion of this offering. Many factors may affect the company's cash needs,
including the possible failure to develop sufficient revenues from the sale of
its products. R-Tec may not have sufficient capital for its funding requirements
and may be unable to find suitable financing on acceptable terms. If R-Tec is
unable to obtain such additional financing, our ability to maintain its level of
operations could be materially adversely affected and the company may not
succeed. This event would significantly increase the risk of loss to those
persons who invest in this offering.
If less than all the shares are sold, the net proceeds to the company
will be reduced and the allocations presented will have to be substantially
revised. The likely effect of any reduction in the net proceeds received will be
to lengthen the time it takes us to develop additional products, delays in the
introduction of our products to market and the possible need for R-Tec to seek
additional funding earlier than otherwise planned.
Any portion of the net proceeds not required for immediate expenditure
will be deposited in R-Tec's corporate checking account, interest-bearing
accounts or invested in short-term government notes, treasury bills, or
short-term obligations of financial institutions.
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<PAGE>
SUMMARY OF FINANCIAL INFORMATION
The company is a development stage company and has no revenues or
earnings from operations. As of December 31, 1998:
Total Assets . . . . . . . . . . . $1,361,354
Total Liabilities. . . . . . . . . $1,374,773
Shareholders Equity. . . . . . . . $ (13,419)
Net Tangible Book Value. . . . . . $1,337,420
Net Tangible Book Value per share. $ (0.09)
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction
with company's consolidated financial statements and the Notes associated with
them contained elsewhere in this prospectus. R-Tec Technologies, Inc., was
recently incorporated under the laws of the State of New Jersey on October 22,
1998. R-Tec has not commenced principal business operations and is considered a
development stage company. The company has no significant assets (See Financial
Statements), no active business operations nor any results therefrom. To date,
activities have been limited to organizational matters, research and due
diligence for the corporate business plan and the preparation and filing of the
registration statement of which this prospectus is a part.
Expenses incurred to date include legal costs associated with the
patent for R-Tec's proprietary technology and this offering. These expenses have
been paid by the shareholders and are to be reimbursed from the proceeds of this
offering.
R-Tec's was formed to reduce to industrial production the proprietary
technology contained in a patent assigned to the company. If successful, R-Tec
will use this proprietary technology to develop and manufacture reactive paints
that can be used to coat pipe junctions (valves, caps, joints, etc.). Once
sealed with this paint, any gas that escapes through the junction would pass
through the paint causing a chemical reaction resulting in a visible color
change of the paint.
If all 3,750,000 shares are sold, we believe we will have sufficient
capital to fund operations for at least twelve months following this offering.
There can be no assurance that unexpected costs will not arise. However, if only
625,000 shares are sold R-Tec may not have sufficient capital to fund
operations. In addition, R-Tec may be unable to obtain additional suitable
financing on acceptable terms. Therefore, if only 625,000 shares are sold,
R-Tec's operations will likely be adversely affected and may not succeed, which
may result in an entire loss of any amounts invested.
19
<PAGE>
BUSINESS
DESCRIPTION OF OUR BUSINESS AND HISTORY OF OUR COMPANY
R-Tec Technologies, Inc., was recently incorporated under the laws of
the State of New Jersey on October 22, 1998. The company has not commenced
business operations and is a development stage company. R-Tec has no significant
assets (See Financial Statements) and no active business operations. To date,
activities have been limited to organizational matters, product research and
developing a corporate business plan and the preparation and filing of the
registration statement of which this prospectus is a part.
OUR PROPOSED BUSINESS OF THE COMPANY
R-Tec was formed to reduce to industrial production the proprietary
technology contained in a patent assigned to the company and to use this
proprietary technology to develop and manufacture reactive paints that could be
used to coat pipe junctions (valves, caps, joints, ect.). Once sealed with the
paint, gas that escapes through the junction would pass through the paint
causing a chemical reaction resulting in a visible color change of the paint.
For example, during the manufacture and installation of air
conditioning and refrigeration systems (e.g., in homes, vehicles and commercial
buildings), the manufacturer or installer may apply the Company's paint to the
joints of the system. The application, placed externally on the system, waits
for leaking gas to pass through it. When this occurs, the blue paint should
change to a bright florescent yellow that is easily visible, thereby,
identifying a leak. Our paint not only detects gas leaks from a system, but we
believe it also neutralizes the CFC's passing through it by removing the
chlorine and fluoride from the gas, making the gas inert and possibly harmless
to the ozone layer.
In addition, the paint may react to the leak before any refrigerant gas
escapes from the system and the owner of the equipment experiences any failure
or need to replace the gas, thereby reducing the need for further production of
CFC's. Although there are calls for reducing the amount of CFC production, due
to the overwhelming use of this product worldwide, these gases will be produced
overseas and domestically until the year 2040.
The first of R-Tec's products available for sale are: R-Tect 22
(developed as an external application paint designed to detect R-22 Freon leaks
in air conditioning units), R-Tect CO2 (developed as an external application
paint designed to detect C02 leaks in pipe systems which contain gaseous or
liquid CO2), and R-Tect Natural Gas (developed as an external application paint
which designed to detect natural gas leaks in a variety of systems.) Other
products nearing the end of development are R-Tect 134A, developed to detect the
newer R-134 a gas in air conditioning applications and R-Tect 12, developed for
automotive applications to detect R-12 gas.
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<PAGE>
Our business plan is based on implementing our strategy in two phases:
Phase 1 - "Establish Manufacturing and Distribution Relationship and Begin
Distribution of Three Initial Products" and Phase 2 - "Expand Product Lines."
The key elements of each phase of the company's strategy are described below:
Phase 1 - Establish Manufacturing and Distribution Relationships and Begin
Distribution of The Three Initial Products
The company's primary strategic goals for Phase 1 are:
-- The selection of appropriate manufacturing and distribution
partners; and
-- The commencement of commercial distribution of R-Tect 12,
R-Tect 22, and R-Tect CO2.
During Phase 1, we will incur significant operating expenses, including
payments pursuant to promissory notes given to officers, directors and related
parties for a minimum of $1,388,840.00 and a maximum of $5,388,840.00. We do not
expect to generate significant operating revenues for a period of at least six
months after the completion of this offering. However, R-Tec has already
received a purchase order from Motors and Armatures Corp. ("MARS") for 5,000
R-Tect 22 leak detection kits at $44.00 per kit for a total of $220,000.00.
The current status of the company's efforts to implement its Phase 1
strategy is outlined below:
-- Manufacturing and Distribution Relationships.
One of R-Tec's first stage goals is to establish beneficial
relationships with strategic manufacturing and distribution
partners. With this strategy, we hope to eliminate the need to
build a large and costly production and sales infrastructure
and to benefit from the inclusion of our products in our
partners' products and marketing efforts.
R-Tec has entered into a manufacturing contract with Anscott
Chemical Industries, Inc., a nationally recognized
manufacturer of specialty chemical products located in Wayne,
New Jersey. Anscott's major clients include DuPont, Raytheon
and Daiwa Corp.
Anscott will be the exclusive manufacturer of our leak
detection products; R-Tect 12, R-Tect 22, and R-Tect CO2. The
agreement is for five years. The manufacturing exclusivity
rights granted to Anscott under the agreement are limited to
the three specified products and to the United States.
Anscott's exclusivity rights with respect to R-Tect CO2 is
further limited to the dry cleaning industry. Anscott will
manufacture our products based on purchase orders received
from the company. Tec intends to locate a quality control
technician employed by the company at Anscott's offices.
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<PAGE>
We have established an oral distribution relationship with
Motors and Armatures Corp. ("MARS"). MARS is believed to be
one of the largest distributors of air conditioning,
refrigeration, and heating parts and supplies to wholesalers
and Original Equipment Manufacturing accounts in the U.S. MARS
sells primarily to North America, with a concentration of
sales in the U.S. and Canada. MARS is served by more than 50
independent manufacturing representatives for 13 companies who
sell MARS products to wholesalers and OEM's.
MARS has placed an initial order for 5,000 kits of R-Tect 12
at $44.00 per kit. We believe that MARS will distribute the
company's R-Tect kits (R-Tect 12, R-Tect 22, and later R-Tect
134A) primarily to organizations that will in turn sell them
to air conditioning or refrigeration contractors. MARS has
advised us that it intends to create artwork for the company's
products it will be distributing and intends to hire an
exclusive representative to work on the R-Tect product line.
This specialist will travel with MARS' sales representatives
to train and educate MARS' clients in the use of our products.
MARS has orally represented to the company that it has
allocated $156,000 in advertising for the first year for
R-Tect products and that it will also provide a direct mail
campaign to reinforce the advertising program.
MARS has proposed a six month test marketing program to
determine the volume level of sales. MARS intends to promote
R-Tec's products as both a tool (leak detector) and as a
preventative maintenance products.
-- Company Efforts To Expand Commercial Use of Initial Products
R-Tec also intends during Phase 1 to pursue direct sales to
end users and the OEM market. We will also complete research
and development of our remaining initial products identified
and will pursue marketing of these products. Potential users
include public utility companies, automotive, marine,
aviation, aerospace companies, and commercial real estate
owners and developers. We have also identified government
agencies and municipalities where our products can;
substantially reduce maintenance overhead and provide
important life safety measures in those geographic areas
sensitive to natural disaster. We also intend to pursue
licensing arrangements with select end users.
We believe a marketing opportunity will develop from insurance
companies that underwrite risk associated with gas explosions.
R-Tec will introduce its products to these insurance companies
and will attempt to persuade them either to mandate the use of
the company's products or to provide financial incentives
(such as discounted insurance rates) to companies that utilize
the company's detection products.
22
<PAGE>
We believe that a marketing opportunity will develop for the
use of the company's products to detect natural gas and
propane leaks. Specifically, during the installation of a gas
pipe the installer would apply our paint to pipe joints.
Owners could also apply the company's paint to pipe joints in
existing structures. If the natural gas or propane leaks
through a stress crack, the paint is designed to change
colors, indicating a leak, and warning anyone who examines the
pipe joint.
We also believe a market may exist for our products in
chemical plants. Chemical plants utilizing our products could
reduce the chance of a toxic chemical or gas leak by applying
our products to pipe joints in their manufacturing facilities.
We also believe our products could be used in the aerospace
and aviation markets. We believe that aircraft utilizing our
products could possibly avert disasters caused by gas leaks if
during a routine inspection, a mechanic notes change in color
of the paints applied to pipe joints aboard the aircraft.
Should there be a leak, it could be detected and repaired
prior to the aircraft taking off.
Phase 2 - Expand Product Lines and Expand Internal Sales
We believe that revenues from Phase 1 operation will continue to grow
and expand in those markets identified. The company further anticipates that
additional product lines will be realized in Phase 2 and marketed to the users
identified in Phase 1. R-Tec will continue to pursue new business with public
utilities as specialized gases and industry specific requirements for the
company's gas leak detection products are addressed.
The speed with which we can develop, introduce, test market and expand
sales of the additions to the R-Tect product line will determine the timing of
the realization of our Phase 2 goals.
This phase will be characterized by new product introductions, test
marketing, expanded sales efforts, and industry driven mandates for the use of
R-Tec products.
We expect that the R-Tect Natural Gas detection system will be made
available for distribution during Phase 1 and the transition into Phase 2 will
occur with the next gas leak detection system: Propane. We also expect to
attempt to develop the following gas leak detection systems:
23
<PAGE>
Ammonia Chlorine Methane
Butane Ethane Methyl Mercaptan
Carbon Monoxide Isobutane Sulphur Hexaflouride
Acetylene Carbon Sulfide 2-Methylpropene
Acetyl Fluoride Carbon Tetrafluoride Nitric Oxide
Allene Hexafluoropropane Nitrogen
Arsine Hydrogen Nitrous Oxide
Boron Trichloride Hydrogen Chloride Other Refrigerants
Boron Trifluoride Isobutylene Phosgene
Bromotrifluoromethane Methyl Ether Propene
1,3-Butadiene Methanethiol Sulphur Dioxide
2-Methylpropane Trimthylamines
-- Other Potential Applications Of R-Tec's Detection Technology.
A Method For Measuring Blood Gases.
The company believes there may be an interest in the use of their
technology in the field of blood gases. Blood travels from the heart to the
lung, liver, kidneys and other major organs. During this trip it is carrying a
percentage of oxygen, CO2 and certain other metabolic gases. However, when there
is a restriction in this flow, possibly due to coronary artery disease, the
heart and lungs are unable to supply the proper amount of oxygen to the blood.
Therefore, the oxygen level begins to
decrease and the CO2 level will increase.
R-Tec believes that by detecting gas on a molecular basis at the rate
of -10 to the 64th power, the medical field may have the ability to detect a
change in the amount of CO2 in the blood. This may help patients with family
history or high risk of heart attacks or strokes to possibly know if they are
within weeks or months of suffering one of these debilitating diseases. For
example, a person might be able to just rub some gel on their wrist once a
month. This gel would consist of a form of R- TEC's product and Dimethyl
Sulfoxide (a substance that carries medicine into the body). If the blood
flowing through the arterial arteries has a higher than normal level of CO2,
which is conducive to a restriction of blood flow and oxygen, the gel would turn
from one color to another, possibly warning the individual that they may be
within weeks of suffering a stroke or heart attack. This pre-warning system will
allow a person to seek medical attention and relieve the arterial restriction
before suffering the damage caused by a heart attack or stroke.
We also intend to research the feasibility of using a small strip
across the top of wrapped chicken parts as a means measuring of freshness. This
fine lined strip would be the color green, indicating the chicken is fresh. If
this strip turns red, this would indicate that the chicken is diseased or
tainted with salmonella. This would alert both the retailer and the consumer to
the presence of a disease that might not have been detected without this safety
strip.
24
<PAGE>
We intend to work with utility companies on the detection of SF6 gas.
This gas is used as an insulator in transformers and takes the place of harmful
PCP's. When these gases leak out of a transformer they may cause the electricity
passing through the gas to spark and cause an explosion. Currently, the only way
the utility company can detect a leak is when the transformer blows up and it
must be replaced at great cost to the utility and the consumer. R-Tec proposes
that when a transformer is assembled, the utility company place a strip of our
paint around the top of the transformer so that utility workers will be able to
easily detect a change in the color of a transformer hanging on a utility pole,
if a leak occurs.
Los Alamos National Laboratory
Los Alamos National Laboratory (developers of the atomic weapons
program) has requested a sample of our leak detection products. R-Tec intends to
explore the possibility of using its technology to detect leaks in the CO2 based
systems used to clean nuclear weapons.
THE INDUSTRY
Presently, there are three major methods used to detect gas leaks. The
oldest method is to coat suspected leak sites with a liquid surfactant (e.g.
soap bubbles). Pressure from the escaping gas causes bubbles to form which
confirms a leak at the site. Although inexpensive and generally applicable, this
method lacks the ability to locate small leaks which over time can allow large
volumes of gas to escape. The second major method is the use of electronic
ionization detectors. Although more expensive than the pressure based detection
method, false results have been noted due to interaction with metallic pipes.
Also, this method is only useful with certain gases and does not detect the
smallest leaks. The third, and perhaps most effective currently available
detection method, is the internal injection of liquid based dyes. The dye leaks
through the opening and can be seen on the outside of the pipe. This method
necessitates purchasing expensive equipment, hiring trained technicians, and
purchasing costly dyes for each application. Recently, some hardware
manufacturers have declared that due to the invasive nature of these dyes, their
use voids the manufacturer's warranty. None of the competitive methods provides
any form of passive leak detection.
R-Tec believes that its technology is unique and provides it with a
significant marketing opportunity. The benefits that would result from early
detection of leaks in gas lines may be substantial. By specifically identifying
the source of a gas leak and permitting the early detection of the escaping gas,
our products may reduce environmental damage caused by leaks of gases, which are
believed to cause ozone depletion and other environmental problems. In addition,
by specifically indicating the location of a leak, our products may enable
owners or operators to promptly and cost effectively repair the leak and reduce
the gas replacement cost incurred as a result of leakage.
25
<PAGE>
There can be no assurance that R-Tec will be able to successfully
manufacture and profitably market its existing products or develop, manufacture
and profitably market additional products. The risks of failure are high because
we may find it more difficult than anticipated to reduce to industrial
production the basic concepts contained in our patent. There can be no
assurances that the market will accept this product or that new competitive
processes will not be developed.
Competitive factors include product pricing, capabilities, reliability,
speed and cost. There can be no assurance that we will be able to compete
successfully against current or future competitors or technologies or that
competitive pressures faced by R-Tec will not materially adversely affect its
business, operating results and financial condition. Many of our competitors
have the financial resources necessary to enable them to withstand substantial
price and product competition, to implement extensive advertising and
promotional programs, and to introduce new products. The industry is also
characterized by frequent introductions of new products. R-Tec's ability to
compete successfully will depend on its ability to anticipate and respond to
competitive factors affecting the industry, including new products, changes in
customer preferences, demographic trends, pricing strategies by competitors and
consolidation in the industry where smaller companies with leading edge
technologies may be acquired by larger multinational companies.
We believe that our technology is unique and provides us with the
ability to compete successfully. However, there can be no assurance that we will
be able to become profitable or successfully market our products or implement
our business plan. Competition will be based on many factors including price,
and the quality of products and service.
Some of our competitors have greater financial, marketing and
manufacturing resources. This, together with the limited capital available to
R-Tec, which will limit its marketing effort, creates a significant competitive
disadvantage. If we are not able to compete successfully, regardless of the
quality of our products and the success of this offering, we will have little
chance of succeeding and it is likely investors will lose their entire
investment.
EMPLOYEES
R-Tec currently has twelve full time employees. Upon successful
completion of this offering, assuming all the shares are sold, we plan to hire
approximately thirty to fifty additional full time employees.
FACILITIES
The Company's executive offices are located at 61 Mallard Drive, P.O.
Box 282, Allamuchy, New Jersey 07820. Our rent is $2,000.00 a month under a
lease which expires on October 30, 2000. We also have an office at 499 Van Brunt
Street, Suite 4B, Brooklyn, New York 11231. Our rent for that space is $1,000.00
a month under a lease which expires on October 23, 1999.
26
<PAGE>
Management believes that the Company's existing offices are unsuitable
and inadequate for their present and proposed uses. We hope, following the
successful completion of this offering, to purchase a building which will
contain our offices, warehouse, research and development laboratory, and
manufacturing operation at one location. We expect we will need a 50,000 to
75,000 square foot facility. If we leased such facility, the expected annual
lease cost may be estimated at $125,000.00- $200,000.00.
PATENT LICENSING & MARKETING AGREEMENTS
On November 2, 1998 Muriel Kaiser assigned all right, title and
interest together with all rights of priority in U.S. patent #5783110, issued
July 21, 1998, based on Serial No. 08/837355 filed April 17, 1997 to R-Tec, Inc.
This assignment has been filed with the U.S. Patent and Trademark office but has
not yet been recorded.(6) This patent covers the proprietary technology that is
the basis of our business.
In consideration for the U.S. Patent, on December 1, 1998, the Company
issued a promissory note to Nancy Vitolo and Muriel Kaiser. Pursuant to the
promissory note, the company is obligated to pay a minimum of one million
($1,000,000.00) dollars and a maximum sum of four million ($4,000,000.00)
dollars plus 5% interest per annum payable in full within thirty (30) days of
the completion of this offering. The exact amount to be paid is dependant upon
how many shares are sold in this offering. Specifically, the payment due under
this promissory note is set forth in the following chart:
Public Offering (in dollars) Amount Due
---------------------------- -------------
27.5 - 30 million $4,000,000.00
25 - 27.5 million $3,500,000.00
20 - 25 million $3,000,000.00
15 - 20 million $2,500,000.00
10 - 15 million $2,000,000.00
7.5 - 10 million $1,500,000.00
5 - 7.5 million $1,000,000.00
The following is a brief abstract of the U.S. Patent.
5783110: Composition for the detection of electrophilic gases and
methods of use thereof.
------------------------------------------------------
INVENTORS: Verdicchio, Robert J., Succasunna, N.J.
Kaiser, Stewart R., Hackenttstown, N.J.
Walsh, Shawn, Branchburg, N.J.
- --------
6 Due to a clerical error this assignment was erroneously made to a company
named "R-Tec, Inc." The Company is in the process of correcting this error
and anticipates that in or about March, 1999 it will file a statement
correcting the name on the assignment with the U.S. Patent Office after
the November 2, 1998 filing has been has been recorded.
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ASSIGNEES: R-Tect, Inc., ISSUED: July 21, 1998 FILED: April 17, 1997
SERIAL NUMBER: 08/837355 MAINT. STATUS: INTL. CLASS (Ed. 6): BO1J 13/00; GO1M
3/20 U.S. CLASS: 252/315.1; 252/189; 252/964; 64/125; 73/40; 73/40.7; FIELD OF
SEARCH: 252/68; 194, 184, 252/189, 192, 315.1, 315.2, 315.3, 960, 961, 963, 964;
62/125; 73/40, 40.7;
ABSTRACT: There is provided a composition for the detection of an
electrophilic gas, such as chlorodifluoromethane or carbon dioxide, which
comprises a Lewis base capable of removing a proton from the gas or reacting
therewith in a similar electrophilic manner; a dye capable of visibly indicating
therewith in a similar electrophilic manner; a dye capable of visibly indicating
a color change on protonation or deprotonation; a solvent for the dye, the base
and the gas; and a rheology modifier capable of producing a non-newtonian gel of
all of these components which is sufficiently translucent to permit visual
detection of change of color of the dye and of sufficient
pseudoplasticity/thixotropy to provide adhesion to vertical and horizontal
surfaces.
There can be no assurance that any of our future patent applications
will be granted, that any current or future patent or patent application will
provide significant protection for our products or technology, be of commercial
benefit or that the validity of such patents or patent applications will not be
challenged. Moreover, there can be no assurances that foreign patent, trade
secret or copyright laws will protect our technologies or that we will not be
vulnerable to competitors who attempt to copy or use the company's products or
processes. See "RISK FACTORS - Dependence on Patent Protection" and "CERTAIN
TRANSACTIONS."
GOVERNMENTAL REGULATIONS AND INDUSTRIAL STANDARDS
R-Tec's products will be subject to numerous governmental regulations
designed to protect the health and safety of consumers and the environment.
We believe that our products will comply with all applicable material
governmental health and safety regulations and standards. However, there can be
no assurance that our products will comply with all applicable regulations and
standards. Because the future scope of these and other regulations and standards
cannot be predicted, there can be no assurance that we will be able to comply
with all future regulations or industry standards. Non-compliance could result
in governmental restrictions on sales or reductions in customer acceptance of
our products. Compliance may also require significant product modifications,
which may result in increased costs and impaired product performance.
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YEAR 2000 ISSUES
We do not expect any Year 2000 issues to affect the development of our
products. No software programs we intend to use will be written with code that
would cause a Year 2000 problem. The only uncertainties, that could or could not
develop, of which the company cannot give any assurances of would be if our
suppliers, distributors and manufacturers of our products would be unable to
resolve any Year 2000 issues that adversely affect their operations. If this
were the case, it could cause delays in the development, production and sale of
our products, which would have a material adverse effect on the continued
development and growth of our business.
MANAGEMENT AND AFFILIATES
DIRECTORS, EXECUTIVE OFFICERS AND KEY EMPLOYEES
The names, addresses, ages and respective positions of the current
Directors and Officers of the Company are as follows:
Name Age Position
- ---- --- --------
Philip Lacqua 50 President, Treasurer and 1127 83rd Street
Brooklyn, New York 11228 a Director
Nancy Vitolo 36 Vice President, Secretary 290 Green Road
Sparta, New Jersey 07871 and a Director
Marc M. Scola 32 Vice President, General
61 Mallard Drive Counsel and a Director
Allamuchy, New Jersey 07820
Each director is elected for a period of one year and serves until his
successor is elected by the company's shareholders.
BIOGRAPHIES
PHILIP LACQUA, age 50, will serve as the President, Treasurer and as a
Director of the Company. As such, his duties will include responsibility for the
overall management of the Company and sales.
Mr. Lacqua was awarded a Bachelor of Science degree from Central
University of Iowa in 1970.
Since 1970, Mr. Lacqua has served as President and Vice-President for
various companies. In 1971, Mr. Lacqua started Container Maintenance Corp.,
which was in the business of repairing ocean going containers, trailers and
chassis. At the same time he started CMC Haulage, Inc., which provided for
interstate and intrastate trucking. In 1973, Mr. Lacqua merged his companies
with others and formed Marine Repair Services, Inc., ("MRS"). He assumed the
title of Vice-President of Sales. MRS was primarily in the business of repairing
containers, trailers and chassis in the New York area. In December, 1977, Mr.
Lacqua sold his interests in CMC Haulage and MRS.
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<PAGE>
In February, 1978, Mr. Lacqua formed Eastern Industrial Supply Corp.,
("EIS"), a ship supply company.
Mr. Lacqua then formed Marine Technical Service, Inc., and served as a
Director and President, overseeing all aspects of that company. That company
specialized in sales to the Far East, the Middle East and Europe. In June, 1998,
Mr. Lacqua resigned as an officer and director of Marine Technical Service, Inc.
to devote his attention to R-Tec Technologies, Inc.
NANCY VITOLO, Age 36, will serve as a Vice-President, Secretary and as
a Director of the Company. As such her duties will include public relations. Ms.
Vitolo was elected Secretary of Garden State Heating and Air Conditioning
Corporation in July of 1994. Garden State Heating and Air Conditioning
Corporation became one of the top 50 Bryant/Carrier Dealers in gross sales in
the continental U.S. and Canada.
In 1995, Ms. Vitolo began a research project, in which she invested a
substantial sum of money to open a laboratory and hire scientists to research
the viability of a paint which could detect and neutralize harmful gases. This
project was the basis of R-Tec Technologies, Inc. Ms. Vitolo has since managed
and overseen the development of R-Tec Technologies, Inc. with the help of
corporate and patent attorneys, business personnel, financial advisors and
scientists.
MARC M. SCOLA, age 32, will serve as a Vice-President, General Counsel
and a Director of the Company. His duties will include preparing and negotiating
the Company's license agreements, contracts, and various other legal and
corporate matters. Mr. Scola was an attorney in private law practice for six (6)
years.
MR. SCOLA was awarded a Bachelor of Arts degree from Seton Hall
University in South Orange, New Jersey in 1988. He then was awarded his Juris
Doctorate (JD) degree by Texas Southern University School of Law in Houston,
Texas in 1992. Mr. Scola obtained a Graduate Law Degree (L.L.M.) in Taxation
from Temple University School of Law in Philadelphia, Pennsylvania in 1996.
Mr. Scola began his law practice in 1993 with the Law Firm of Marc M.
Scola, Esq., P.C. located in Florham Park, New Jersey. In January of 1996, Mr.
Scola joined the Law Firm of Scola & Walterschied, P.C. located in Roseland, New
Jersey, as a partner. In 1997, Mr. Scola continued in practice with Marc M.
Scola, Esq., P.C., in Allamuchy, New Jersey.
Mr. Scola, served as counsel to a wide variety of businesses, including
construction companies, physician practices, manufacturing operations, and
computer consulting firms. Mr. Scola's firms have been involved in the review,
negotiation, financing, employment issues, and restructuring of the business
entities. The firms also had experience in the preparation of shareholder,
partnership and limited liability company, stock option, employment, leasing and
other types of commercial agreements.
30
<PAGE>
KEY EMPLOYEES AND POSSIBLE KEY EMPLOYEES
The company sets forth certain biographical information relating to
possibly future key employees of the company.
Name Position
- ---- --------
Robert J. Verdicchio Consultant
Stewart R. Kaiser Consultant
Shawn Walsh Consultant
Mr. Lacqua, Ms. Vitolo and Mr. Scola have not entered into any
employment agreements with the company. The company has not entered into any
employment or consulting agreement(s) with Mr. Verdicchio. Mr. Verdicchio was
one of three inventors of the Company's patented proprietary technology.
STEWART R. KAISER was one of three inventors of the company's patented
proprietary technology which has been assigned to the company. Mr. Kaiser is the
husband of Nancy Vitolo, and the son of Muriel Kaiser. Mr. Kaiser has no
ownership rights to the patent. On November 4, 1998, Mr. Kaiser filed for
Chapter 7 Bankruptcy protection in the United States Bankruptcy Court, District
of New Jersey. On December 16, 1998, Mr. Kaiser moved to voluntarily withdraw
his Bankruptcy Petition. On or before December 16, 1998, Mr. Kaiser's motion was
granted and the Bankruptcy Petition was dismissed.
The company has a one year Consulting Agreement with Stewart R. Kaiser,
which terminates on January 1, 2000. Mr. Kaiser has been engaged to perform
consulting services for the company regarding scientific experiments and
research on reactive paints. The Company is to pay Mr. Kaiser $1,000.00 per
month for a total of $12,000.00 plus all reasonable out of pocket expenses.
SHAWN WALSH was one of three inventors of the patented proprietary
technology which has been assigned to the company. Mr. Walsh has no ownership
rights to the patent. The company has a one year consulting Agreement with Mr.
Walsh which terminates on January 1, 2000. Mr. Walsh has been engaged to perform
consulting services on behalf of the company regarding scientific experiments
and research on reactive paints. The Company is to pay Mr. Walsh $1.000.00 per
month for a total of $12,000.00 plus all reasonable out of pocket expenses.
EXECUTIVE COMPENSATION
R-Tec was only recently incorporated, has not commenced operations and
has not paid any compensation to its executive Officers and Directors. The
company, and the company presently has no formal employment agreements or other
contractual arrangements with its officers or directors. The company hopes, upon
the completion of this offering, to enter into employment agreements with Mr.
Lacqua, Ms. Vitolo and Mr. Scola. The anticipated annual compensation for each
of these three individuals is anticipated to be between $100,000 - $350,000 per
year, depending on the success of the company and subject to approval by the
Board of Directors.
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<PAGE>
The company has executed three promissory notes in favor of Mr. Lacqua,
Mr. Vitolo and Mr. Scola. These notes obligate the company to pay $350,000.00 to
Mr. Lacqua, $350,000.00 to Ms. Vitolo and $350,000.00 to Mr. Scola within thirty
days of the completion of this offering. Such payments represent compensation
for their services for the past year's work on behalf of the company and
reimbursement of fees and expenses incurred in connection with this offering.
PRINCIPAL SHAREHOLDERS
The following table presents the shares of common stock of R-Tec
Technologies, Inc. owned of record or beneficially by each person known by the
company to own more than 5% of the company's common stock, and the name and
shareholdings of each Officer and Director and all Officers and Directors as a
group:
Principal Stockholder's Number of Percent Prior Percent
Name and Addresses Shares Owned to Offering Post Offer
- ----------------------- ------------ ------------- ----------
Philip Lacqua (1)(2) 5,000,000 33 1/3% 26.66%
1127 83rd Street
Brooklyn, New York 11228
Nancy Vitolo (1)(2) 5,000,000 33 1/3% 26.66%
290 Green Road
Sparta, New Jersey 07871
Marc M. Scola (1)(2) 5,000,000 33 1/3% 26.66%
61 Mallard Drive
Allamuchy, New Jersey 07820
All Officers and
Directors as a Group 15,000,000 100% 80%
Footnotes;
(1)An Officer of the Company.
(2)A Director of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The 15,000,000 presently outstanding Shares of the company's common
stock were purchased by the founders of the company for a total of $3.00. See
"PRINCIPAL SHAREHOLDERS."
The patent covering the company's proprietary technology was assigned
to the company by Muriel Kaiser. Ms. Kaiser is the mother of Stewart Kaiser and
Nancy Vitolo's mother-in-law. Ms. Vitola is the wife of Stewart Kaiser. In
consideration for the patent, the company executed a promissory note in favor of
Nancy Vitolo and Muriel Kaiser. Pursuant to the promissory note, the Company is
obligated to pay a minimum of one million ($1,000,000.00) dollars and a maximum
sum of four million ($4,000,000.00) dollars plus 5% interest per annum payable
in full within thirty (30) days of the completion of this offering. The amount
payable is contingent upon the amount of amount of money raised in this
offering.
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<PAGE>
On October 24, 1998 R-Tec executed an agreement in favor of Philip
Lacqua, Nancy Vitolo and Marc M. Scola under which R-Tec agreed to reimburse Mr.
Lacqua, Ms. Vitolo and Mr. Scola for all expenses advanced by such individuals
prior to and after the date of R-Tec's incorporation. Such expenses include, but
are not limited to, attorneys' fees, accountant fees and officers leases.
On January 6, 1999, R-Tec issued seven promissory notes totaling
$1,388,840.22 to Philip Lacqua, Nancy Vitolo, Marc M. Scola and Columbia
Trading, Inc. Columbia Trading, Inc. is a New York Corporation and Mr. Lacqua is
its sole shareholder. These promissory notes represent back salaries for one
year and reimbursement of fees and expenses incurred in connection with efforts
to take R-Tec public. All of these promissory notes carry an interest rate of
six percent per annum and are payable in full within thirty days of the
completion of this offering.
Upon completion of this offering the company anticipates entering into
employment agreements with Mr. Lacqua, Ms. Vitolo, and Mr. Scola. Preliminary
discussions have been held concerning possible compensation, but no oral or
written agreement have been entered into. See "MANAGEMENT & AFFILIATES -
Executive Compensation."
INDEMNIFICATION
The company's Articles of Incorporation, as amended, provide that, to
the extent not inconsistent with applicable law, the company shall indemnify and
hold harmless its officers, directors, employees and agents from liability and
reasonable expense from actions in which he or she may become involved by reason
of the fact that he or she was an officer, director, employee or agent.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the company pursuant to the foregoing provisions, or otherwise, the
company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable.
In the event that any claim for indemnification against such
liabilities (other than the payment by the small business issuer of expenses
incurred or paid by a director, officer or controlling person of the small
business issuer in the defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the company will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of the Court of such issue.
33
<PAGE>
ORGANIZATION WITHIN LAST FIVE YEARS
R-Tec is a development stage company and has no operating history. As
soon as the money from this offering is made available, the company expects to
make all arrangements necessary so that it can commence operations in 1999.
DESCRIPTION OF SECURITIES
The following statements summarize detailed provisions of the company's
Articles of Incorporation and Bylaws, copies of which will be furnished to an
investor upon written request therefor. See "WHERE YOU CAN FIND ADDITIONAL
INFORMATION."
AUTHORIZED CAPITAL
The company's authorized capital stock consists of 25,000,000 shares of
no par value common stock. The company has outstanding 15,000,000 shares of its
common stock, all of which are validly issued, fully paid and non-assessable.
COMMON STOCK
The shares being offered are shares of common stock. Currently there
are no markets for the common stock and there can be no assurances there will
ever be a public market in the future.
The company is presently authorized to issue 25,000,000 shares of no
par value common stock. There are 15,000,000 shares issued and outstanding, and
a maximum of 3,750,000 shares are for sale in this Offering.
The shares of common stock being sold will be, when issued in
accordance with the terms of the offering, fully paid and non-assessable.
The holders of common stock, are entitled to equal dividends and
distributions per share with respect to the common stock when as and if declared
by the Board of Directors from funds legally available therefore. The company
has not paid any dividends on common stock to date and does not anticipate
paying dividends on common stock in the foreseeable future. No holder of common
stock has a pre-emptive right to subscribe for any securities of the company nor
are any common shares subject to redemption or convertible into other securities
of the company. Upon liquidation, dissolution or winding up of the company, and
after payment of creditors and preferred stockholders, if any, the remaining
assets will be divided pro-rata on a share-for-share basis among the holders of
the shares of common stock. All shares of common stock now outstanding are fully
paid, validly issued and non-assessable. Each share of common stock is entitled
to one vote with respect to the election of any director or any other matter
upon which stockholders are required or permitted to vote. Holders of the
company's common stock do not have cumulative voting rights, so that the holders
of more than 50% of the combined shares voting for the election of directors may
elect all of the directors, if they choose to do so and, in that event, the
holders of the remaining shares will not be able to elect any alternate members
to the Board of Directors.
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<PAGE>
PREFERRED STOCK
The company is currently authorized to issue shares of preferred stock.
Accordingly, the Board of Directors could authorize and the issuance of shares
of preferred stock. Preferred stock may, if and when issued, have rights
superior to those of the common stock offered hereby.
TRANSFER AGENT
The Bank of New York, Inc., 1 Wall Street, New York, New York 10286, is
the Transfer Agent and Registrar for the company's no par value common stock.
DIVIDEND POLICY
The company has not paid any dividends on common stock to date and does
not anticipate paying dividends on common stock in the foreseeable future. The
company intends for the foreseeable future to follow a policy of retaining all
of its earnings to finance the development and expansion of its business.
SHARES ELIGIBLE FOR FUTURE SALE.
Upon the consummation of this offering at the maximum, the company will
have 18,750,000 shares of common stock outstanding. Of these shares, the
3,750,000 shares sold in this offering will be freely tradable without
restriction or further registration under the Securities Act, except for any
shares purchased by an "affiliate" of the Company (in general, a person who has
a control relationship with the company) which will be subject to limitations of
Rule 144 promulgated by the Commission under the Securities Act. All of the
remaining 15,000,000 shares are deemed to be "restricted securities," as that
term is defined under Rule 144 promulgated under the Securities Act, in that
such shares were issued in private transactions not involving a public offering.
All of such shares are not eligible for sale under Rule 144 until December __
1999 at which time they will have been held longer than one year.
In general, under Rule 144 as currently in effect, subject to the
satisfaction of certain other conditions, a person, including an affiliate of
the company (or persons whose shares are aggregated), who has owned restricted
shares of common stock beneficially for at least one year is entitled to sell,
within any three-month period, a number of shares that does not exceed the
greater of 1% of the total number of outstanding shares of the same class or,
the average weekly trading volume during the four calendar weeks preceding the
sale. A person who has not been an affiliate of the company for at least the
three months immediately preceding the sale and who has beneficially owned
shares of common stock for at least two years is entitled to sell such shares
under Rule 144 without regard to any of the limitations described above.
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<PAGE>
Prior to this offering, there has been no market for the common stock,
and no prediction can be made as to the effect, if any, that market sales of
restricted shares of common stock or the availability of such shares for sale
will have on the market prices prevailing from time to time. Nevertheless, the
possibility that substantial amounts of common stock may be sold in the public
market may adversely affect the price for the sale of the company's equity
securities in any trading market which may develop. See "RISK FACTOR - - Shares
Eligible for Future Sale."
PLAN OF DISTRIBUTION
R-Tec Technologies, Inc., is offering a minimum of 625,000 shares and a
maximum of 3,750,000 shares of common stock through it officers and directors on
a "best-efforts" basis. Until at least 625,000 shares are fully subscribed, all
subscription payments will be deposited into an escrow account at the Bank of
New York. If less than 625,000 shares are not subscribed within three months
after the effective date of this prospectus, all proceeds will be promptly
refunded in full, without interest, and without any deduction of expenses. Upon
sale of 625,000 shares, the escrow will be terminated and subscriptions will go
directly to the company. This offering will end on the earlier of the following:
Three months from the effective date of this prospectus if 625,000 shares are
not sold and fully paid for, the sale of the 3,750,000 shares, twelve months
after the effective date of this prospectus or the date on which the Company
decides to close the offering, which will not exceed twelve months from the
effective date of this prospectus.
The offering will be managed by the company without any underwriter.
The company's officers and directors will receive no sales commissions or other
compensation, except for reimbursement of expenses actually incurred for such
activities. In connection with their efforts, they will rely on the "safe
harbor" provisions of Rule 3a4-1 under the Securities and Exchange Act of 1934
(the "1934 Act"). Generally speaking, Rule 3a4-1 provides an exemption from the
broker/dealer registration requirements of the 1934 Act for associated persons
of an issuer. The Company's officer and directors will use their best efforts to
find purchasers for the shares.
Investors should be aware that while this offering is being conducted
through it Officers and Directors, the company retains the right to utilize the
services of broker/dealers ("Participating Broker/Dealers") who are members of
the National Association of Securities Dealers, Inc. ("NASD"). We reserve the
right to pay commissions for sales made by Participating Broker/Dealers in an
amount not to exceed 10% of the sales price. Before the involvement of any
Participating Broker/Dealer in the offering, the company must obtain a no
objection position from the NASD for any compensation arrangements. Any
Participating Broker/Dealer that sells securities in this offering may be deemed
an underwriter as defined in Section 2(11) of the Securities Act of 1933. The
company will amend the Prospectus and the registration statement of which it is
a part to identify any selected Participating Broker/Dealer at such time as such
Participating Broker/Dealer sells 5% or more of the offering.
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<PAGE>
Because R-Tec is offering the shares without the participation of an
underwriter the offering price has not been determined by negotiation with an
underwriter, as is customary in most offerings. Investors are therefore subject
to an increased risk that the price of the shares have been arrived at
arbitrarily.
LEGAL MATTERS
To the knowledge of management there is no material litigation pending
or threatened against the company. Legal counsel for the company in connection
with this offering is Sirota & Sirota LLP, 747 Third Avenue, New York, New York
10017.
EXPERTS
The financial statements of R-Tec Technologies, Inc. as of December 31,
1998, included in this prospectus have been audited by Jurewicz and Duca, CPA's,
P.C., independent certified public accountants, as indicated in their report
with respect thereto, and are included herein in reliance on such report given
upon the authority of that firm as experts in accounting and auditing.
37
<PAGE>
JUREWICZ & DUCA Certified
Public Accountants, P.C.
666 OLD COUNTRY ROAD
GARDEN CITY, NEW YORK 11530
Telephone 516.227.6660
JOSEPH P. JUREWICZ 203.426.9800
MICHAEL A. DUCA Facsimile 516.227.1126
To the Board of Directors and Shareholders
of R-Tec Technologies, Inc.
We have audited the accompanying balance sheet of R-Tec Technologies, Inc. (a
corporation) as of December 31, 1998, and the related statement of operations,
and cash flows for the period from inception, October 29, 1998 to December 31,
1998. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of R-Tec Technologies, Inc. as of
December 31, 1998, and the results of its operations and its cash flows for the
initial period then ended in conformity with generally accepted accounting
principles.
/s/
Garden City, New York
January 7, 1999
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<PAGE>
R-TEC TECHNOLOGIES, INC.
BALANCE SHEET
DECEMBER 31, 1998
ASSETS
Current Assets
Cash $ 36,353
----------
Total Current Assets $ 36,353
Intangible Assets
Organizational Costs 1,324,000
Patent 1
----------
Total Intangible Assets 1,324,001
Other Assets
Rent Security 1,000
----------
Total Other Assets 1,000
----------
Total Assets $1,361,354
==========
LIABILITIES AND SHAREHOLDERS' DEFICIT
Liabilities
Loan Payable-Shareholders $ 1,374,773
Total Liabilities $1,374,773
Shareholders' Equity
Common Stock, 25,000,000 shares
authorized, no par value,
15,000,000 shares issued
and outstanding 3
Retained Deficit (13,422)
-----------
Total Shareholders' Deficit (13,419)
----------
Total Liabilities and
Shareholders' Deficit $1,361,354
==========
The accompanying notes are an integral part of these financial statement.
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R-TEC TECHNOLOGIES, INC.
STATEMENT OF OPERATIONS
FOR THE PERIOD OCTOBER 29, 1998 TO DECEMBER 31, 1998
Expenses:
Office Supplies and Printing $ 7,587
Professional Fees 789
Travel 2,504
Telephone 1,000
Internet Service/Web Site 1,542
--------
Total Expenses $ 13,422
----------
Net Loss (13,422)
----------
Retained Earnings,
beginning of period -0-
Retained Earnings, (Deficit)
end of period $ (13,422)
==========
The accompanying notes are an integral part of these financial statement.
40
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R-TEC TECHNOLOGIES, INC.
STATEMENT OF CASH FLOW
FOR THE PERIOD ENDED DECEMBER 31, 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (13,422)
----------
Net Cash Used by Operating
Activities $ (13,422)
CASH FLOWS FROM FINANCING ACTIVITIES
Organization Costs (1,324,000)
Patent (1)
Security Deposit (1,000)
Accrued Expenses 1,374,773
----------
Net Cash Provided by Financing 49,772
CASH FLOW FROM INVESTING ACTIVITIES
Stock Purchase 3
----------
Net Cash Provided by Investing
Activities 3
---------
Net Increase in Cash 36,353
Cash at Beginning of Period -0-
Cash at End of Period $ 36,353
=========
The accompanying notes are an integral part of the financial statements.
41
<PAGE>
R-TEC TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A) Nature of Business
R-Tec Technologies, Inc. is a research and development company
which has recently obtained a patent on the detection of
electrophilic gases and uses there of. R-Tec Technologies will
be involved in research to see how this technology can be used
in many different industries and will be making this product
in consumer form as a paint available to the general public
for use in detecting harmful gases in their homes like CFC
from air conditioners and natural gas which could be harmful.
B) Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that effect certain reported
amounts and disclosures. Accordingly, actual results could
differ from those estimates.
NOTE 2 - ORGANIZATION COSTS
Certain costs, including legal and managerial costs, have been
capitalized. Such cost will be amortized over a period no to
exceed sixty months.
NOTE 3 - PATENT
The Company has obtained a patent whose value is not readily
determined. The patent was acquired using a promissory note,
the value of which will be determined by the level of funding
received through the initial public offering.
NOTE 4 - LEASES
The Company leases two office facilities under operating
leases. The Brooklyn lease is a one year lease with a monthly
rental of $1,000, with one month security. The lease for the
New Jersey office is a two year lease with a monthly rent f
$2000 and no security. The details of these obligations are as
follows:
Years Ending
------------
December 31, 1999 $34,000
December 31, 2000 20,000
December 31, 2001 -0-
-------
$54,000
=======
42
<PAGE>
R-TEC TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE 5 - CONTINGENT LIABILITY
The Company has signed a promissory note, dated December 1,
1998, for the acquisition of a patent. The note is for a
maximum of four million dollars ($4,000,000.00) with an
interest rate of five percent (5.0%) per annum payable in full
within thirty (30) days of the completion of the funding of
the initial public offering.
It is agreed that if the proposed public offering realizes
less than thirty (3) million dollars as anticipated, the
amount due under this note to the holders will be reduced as
follows:
Amount Realized by
Public Offering Amount Due Holders
------------------ ------------------
$27,500,000-$30,000,000 $ 4,000,000.00
$25,000,000-$27,500,000 $ 3,500,000.00
$20,000,000-$25,000,000 $ 3,000,000.00
$15,000,000-$20,000,000 $ 2,500,000.00
$10,000,000-$15,000,000 $ 2,000,000.00
$7,500,000--$10,000,000 $ 1,500,000.00
$5,000,000--$7,500,000 $ 1,000,000.00
The value of the patent will be set based upon the initial
public offering. The holders agree that the amount paid in the
schedule above will be their total consideration for the
patent and all assignments thereto.
NOTE 6 - PROMISSORY NOTES/LOANS PAYABLE-SHAREHOLDERS
The Corporation entered into promissory notes totalling
$1,388,840 with the three organizing shareholders, and a
company wholly owned by one of the organizing shareholders, to
reimburse them for their efforts and expenses incurred toward
the company prior to incorporation. The notes were signed
January 6, 1999 and carry an interest rate of six percent per
annum with the note payable in full within thirty days of the
completion of the funding of the initial public offering.
NOTE 7 - SUBSEQUENT EVENT
The Company is attempting to raise capital by taking the
Company public with an initial public offering. The Company
expects to raise between $5,000,000 and $30,000,000.
There is no assurance the offering will be successful.
43
<PAGE>
We have not authorized any dealer, salesperson or other person to give
any information or represent anything not contained in this prospectus. You must
not rely on any unauthorized information. This prospectus does not offer to sell
or buy any shares in any jurisdiction where it is unlawful. The information in
this prospectus is current as of February __, 1999.
TABLE OF CONTENTS
Page
ADDITIONAL INFORMATION . . . . . . . . . 3
PROSPECTUS SUMMARY . . . . . . . . . . . 4
RISKS FACTORS. . . . . . . . . . . . . . 10
DILUTION . . . . . . . . . . . . . . . . 16
USE OF PROCEEDS. . . . . . . . . . . . . 17
MANAGEMENTS DISCUSSION AND ANALYSIS. . . 19
BUSINESS . . . . . . . . . . . . . . . . 20
MANAGEMENT AND AFFILIATES. . . . . . . . 29
PRINCIPAL SHAREHOLDERS . . . . . . . . . 32
CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS. . . . . . 32
ORGANIZATION WITHIN LAST FIVE YEARS. . . 34
DESCRIPTION OF SECURITIES. . . . . . . . 34
PLAN OF DISTRIBUTION . . . . . . . . . . 36
LEGAL MATTERS. . . . . . . . . . . . . . 37
EXPERTS. . . . . . . . . . . . . . . . . 37
FINANCIAL STATEMENTS . . . . . . . . . . 38
Until __________, 1999, all dealers effecting transactions in the
registered securities, whether or not participating in this distribution, may be
required to deliver a prospectus. This is in addition to the obligation of
dealers to deliver a prospectus when acting as underwriters with respect to
their unsold allotments or subscriptions. This prospectus should be read in its
entirety by any prospective investor prior to his or her investment.
<PAGE>
R-TEC TECHNOLOGIES, INC.
3,750,000 Shares
PROSPECTUS
February __, 1999
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. Other Expenses of Issuance and Distribution*
The following table sets forth the estimated costs and expenses to be
paid by the Company in connection with the Offering described in the
Registration Statement.
SEC registration fee $ 8,340.00
Blue sky fees and expenses $20,000.00
Printing and shipping expenses
Legal fees and expenses
Accounting fees and expenses
Transfer and Miscellaneous expenses
Total
* All expenses except SEC registration fee are estimated.
ITEM 14. Indemnification of Directors and Officers.
The Registrant's Articles of Incorporation, Article Eight, provide that
the company shall indemnify and hold harmless its directors, employees and
agents from liability and reasonable expenses from actions in which he or she
may become involved by reason of the fact that he or she was an officer,
director, employee or agent.
Insofar as indemnification for liabilities arising under the Securities
Act, indemnification may be provided to directors, officers or persons
controlling the Registrant pursuant to the foregoing section. The Registrant has
been informed that, in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Securities Act
and is therefore unenforceable.
ITEM 15. Recent Sales of Unregistered Securities
On November 26, 1998, Mr. Lacqua, Ms. Vitolo and Mr. Scola purchased a
total of 15,000,000 shares for a total of $3.00 in conjunction with formation of
the company. As of this date, Mr. Lacqua owns 5,000,000 shares of restricted
common stock of the Company for which he paid a total of $1.00, Ms. Vitolo owns
5,000,000 shares for which she paid a total of $1.00, and Mr. Scola owns
5,000,000 shares for which he paid $1.00.
45
<PAGE>
ITEM 16. Exhibits and Financial Statement Schedules
(a) Exhibits
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
3.1 Certificate of Incorporation dated October 21, 1998.
3.2 Amended and Restated Articles of Incorporation,
dated November 24, 1998
3.3 Amended and Restated Articles of Incorporation, dated
December 18, 1998
3.4 By-laws, dated November 4, 1998
4.2 Form of common stock certificate
5 Opinion and consent of counsel with respect to the legality of
the shares being registered
23.1 Consent of Jurewicz & Duca, CPA's, P.C.
27 Financial Data Schedule
99.1 Patent Assignment dated November 2, 1998
99.2 Promissory Note dated December 1, 1998
99.3 Promissory Note dated January 6, 1999
99.4 Promissory Note dated January 6, 1999
99.5 Promissory Note dated January 6, 1999
99.6 Promissory Note dated January 6, 1999
99.7 Promissory Note dated January 6, 1999
99.8 Promissory Note dated January 6, 1999
99.9 Promissory Note dated January 6, 1999
99.10 Consultant Agreement dated January 5, 1999
99.11 Consultant Agreement dated January 11, 1999
99.12 Exclusive Manufacturer's Agreement dated October 21, 1998
99.13 Purchase Order dated November 20, 1998
99.14 Share Purchase Agreement
99.15 Stock Transfer Agreement
99.16 Escrow Agreement
99.17 Expense Reimbursement Agreement
- -----------------
* Previously filed
+ To be filed by amendment
46
<PAGE>
(b) FINANCIAL STATEMENT SCHEDULE
The Financial Statement Schedule as of December 31, 1998 and the Report
of Independent Public Accountants on such schedule are included in this
Registration Statement. All other schedules are omitted because they are not
applicable or are not required under Regulation S-X.
ITEM 17. Undertakings
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned Registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred to that section. Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to its Articles of
Incorporation or otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question, whether or not such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
The Registrant hereby undertakes to:
1. File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(a)(3)of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information in the
registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation may be reflected in the form
of prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
47
<PAGE>
(iii) Include any additional or changed material information on the plan
of distribution.
2. For determining liability under the Securities Act treat each post
effective amendment as a new registration statement of the securities offered,
and the offering of the securities at that time to be the initial bona fide
offering.
3. File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form S-1 and authorized this Registration
Statement to be signed on its behalf by the undersigned, in the City of New
York, State of New York, on February 11, 1999.
R-TEC TECHNOLOGIES, INC.
By:/s/ Philip Lacqua
------------------
Philip Lacqua
Director and President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Signatures Title Date
- ---------- ----- ----
/s/ Philip Lacqua Director, President February 11, 1999
- ------------------ and Treasurer
Philip Lacqua
/s/ Nancy Vitolo Director, Vice President February 11, 1999
- ------------------ and Secretary
Nancy Vitolo
/s/ Marc M. Scola Director, Vice President February 11, 1999
- ------------------ and General Counsel
Marc M. Scola
48
EXHIBIT 3.1
FILED
DEC 22 1998
JAMES A.DiELEUTERIO, JR.
STATE TREASURER
CERTIFICATE OF INCORPORATION
of
R-Tec Technologies, Inc.
THIS IS TO CERTIFY THAT there is hereby organized a corporation under
and by virtue of N.J.S. 14A:1-1 et seq., the "New Jersey Business Corporation
Act."
FIRST: The name of the corporation is R-Tec Technologies, Inc.
SECOND: The address of the corporation's initial registered office is 290 Green
Road, Sparta, NJ 07871. The name of the registered agent at such address is
Nancy Vitolo.
THIRD: The purpose for which this corporation is organized is to engage in any
activity within the pruposes for which corporations may be organized under the
"New Jersey Business Corporation Act," N.J.S. 14A:1-1 et seq.
FOURTH: The aggregate number of shares which the corporation shall have
authority to issue is 5,000,000 shares without par value.
FIFTH: The number of directors constituting the initial Board of Directors of
this corporation is two (2). The name and adress of each person who is to serve
as such Director is:
Nancy Vitolo, P.O. Box 70, Allamuchy, N.J. 07820. Phillip Lacqua, 499 Van Brunt
Street, Brooklyn, N.Y. 11228.
SIXTH: The name and address of the incorporator is Capitol Information Services,
Inc., 172 West State Street, Trenton, N.J. 08608
In Witness Whereof, each individual incorporator, being over eighteen
years of age has signed this certificate; or if the incorporator be a
corporation has caused this certificate to be signed by its duly authorized
officer this 21st day of October, 1998.
/s/ Ruth Schneider
------------------------
Ruth Schneider
Executive Vice President
<PAGE>
FILED FOR: Marc M. Scola, Esq. Capital Information Services, Inc.
Marc M. Scola, 172 West State Street
A Professional Corporation Trenton, New Jersey 08608
61 Mallard Drive
P.O. Box 282
Allamuchy, N.J. 07820
EXHIBIT 3.2
FILED
NOV. 30, 1998
JAMES A. DiELEUTERIO, JR.
STATE TREASURER
CERTIFICATE OF AMENDMENT TO THE CERTIFICATION OF INCORPORATION
OF
R-TEC TECHNOLOGIES, INC.
Federal Employer Identification No. 22-3615979
Pursuant to the provision of Section 14A:9-2(4) and Section 14A:9-
4(3), Corporations, General, of the New Jersey Statutes, the undersigned
corporation executes the following Certificate of Amendment to its Certificate
of Incorporation:
1. The name of the corporation is: R-Tec Technologies, Inc.
2. The following amendment to the Certification of Incorporation was approved by
the directors and thereafter duly adopted by the shareholders of the corporation
on the 24th day of November, 1998:
RESOLVED, that Article Second of the Certificate of Incorporation be
amended to read as follows:
The Registered Agent of the Corporation shall be amended as follows:
Michael K. Mullen, Esq.
Schenck, Price, Smith & King
10 Washington Street
P.O. Box 905
Morristown, New Jersey 07963-0905
(973) 539-1000 Telephone
(973) 540-7300 Facsimile
RESOLVED, that Article Fourth, the aggregate number of shares which the
corporation shall have authority to issue shall be amended to twenty (20)
million shares without par value.
3. The number of shares outstanding at the time of the adoption of the amendment
was 1,000,000. The total number of shares entitled to vote thereon was
1,000,000.
4. The number of shares voting for and against such amendment is as follows:
<PAGE>
Number of Shares Number of Shares
Voting for Amendment Voting against Amendment
-------------------- ------------------------
1,000,000 - 0 -
5. The effective date of this Amendment to the Certificate of Incorporation
shall be the date of filing.
Dated this 24th day of November, 1998.
R-TEC TECHNOLOGIES, INC.
By: /s/
MARC M. SCOLA
VICE PRESIDENT AND
GENERAL COUNSEL
EXHIBIT 3.3
FILED
DEC. 22 1998
JAMES A. DiELEUTERIO, JR
STATE TREASURER
CERTIFICATE OF AMENDMENT TO THE CERTIFICATION OF INCORPORATION
OF
R-TEC TECHNOLOGIES, INC.
Federal Employer Identification No. 22-3615979
Pursuant to the provision of Section 14A:9-2(4) and Section 14A:9-
4(3), Corporations, General, of the New Jersey Statutes, the undersigned
corporation executes the following Certificate of Amendment to its Certificate
of Incorporation:
1. The name of the corporation is: R-Tec Technologies, Inc.
2. The following amendment to the Certification of Incorporation was approved by
the directors and thereafter duly adopted by the shareholders of the corporation
on the 18th day of December, 1998:
RESOLVED, that Article Fourth, the aggregate number of shares which the
corporation shall have authority to issue shall be amended to twenty five (25)
million shares without par value.
RESOLVED, that Article Seventh, the corporation is authorized to issue
Preferred Stock upon approval of the Board of Directors.
RESOLVED, that Article Eighth, the Corporation shall indemnify and hold
harmless its Officers, Directors, Employees and Agents from liability and
reasonable expense from actions in which he or she may become involved by reason
of the fact that he or she was an Officer, Director, Employee or Agent.
3. The number of shares outstanding at the time of the adoption of the amendment
was 1,000,000. The total number of shares entitled to vote thereon was
1,000,000.
4. The number of shares voting for and against such amendment is as follows:
Number of Shares Number of Shares
Voting for Amendment Voting against Amendment
--------------------- ------------------------
1,000,000 -0-
<PAGE>
5. The effective date of this Amendment to the Certificate of Incorporation
shall be the date of filing.
Dated this 18th day of December, 1998.
R-TEC TECHNOLOGIES, INC.
By: /s/
MARC M. SCOLA
VICE PRESIDENT AND
GENERAL COUNSEL
EXHIBIT 3.4
Minutes and By-Laws
of
R-TEC TECHNOLOGIES, INC.
Commencing November 4, 1998
Ending
<PAGE>
BY-LAWS
OF
R-TEC TECHNOLOGIES, INC.
-----------------------------------------------------------------
Adopted
ARTICLE I
OFFICES
1. Registration Office and Agent. -- The registered office of the Corporation
in the State of New Jersey is at
14A:4-1
290 Green Road
Sparta, New Jersey 07871
The registered agent of the Corporation at such office is
Nancy Vitolo
2. Principal Place of Business. -- The principal place of business of the
Corporation is
61 Mallard Drive
Allumachy, New Jersey 07820
3. Other Places of Business. -- Branch or subordinate places of business or
offices may be established at any time by the Board at any place or places
where the Corporation is qualified to do business. c/o
B1
<PAGE>
ARTICLE II
SHAREHOLDERS
14A:5-2
14A:5-4(1) 1. Annual Meeting.--The annual meeting of shareholders shall
be held upon not less than ten nor more than sixty days
written notice of the time, place, and purposes of the meeting
at 11:30 o'clock a.m. on the 4th day of the month of November
of each year at
61 Mallard Drive
Allamuchy, New Jersey 07820
14A:5-1 or at such other time and place as shall be specified in the
notice of meeting, in order to elect directors and transact
such other business as shall come before the meeting. If that
date is a legal holiday, the meeting shall be held at the same
hour on the next succeeding business day.
14A:5-3 2. Special Meetings. -- A special meeting of shareholders may
be called for any purpose by the president or the Board. A
special meeting shall be held upon not less than one nor more
than sixty days written notice of the time, place, and
purposes of the meeting.
B2
<PAGE>
14A:5-6 3. Action Without Meeting. -- The shareholders may act without
a meeting by written consent in accordance with N.J.S.A.
14A:5-6. Such consents may be executed together, or in
counterparts, and shall be filed in the Minute Book. Special
rules apply to the annual election of directors, mergers,
consolidations, acquisitions of shares or the sales of assets.
14A:5-9(1) 4. Quorum. -- The presence at a meeting in person or by proxy
of the holders of shares entitled to cast (51%) fifty one
percent of the votes shall constitute a quorum.
B3
<PAGE>
ARTICLE III
BOARD OF DIRECTORS
14A:6-2 1. Number and Term of Office. -- The Board shall consist of no
more than five and no less than two members. The precise
number shall be set by the directors or by the 14A:3-3
shareholders at each annual meeting before the election of
directors. Each director shall be elected by the shareholders
at each annual meeting and shall hold office until that
director's successor shall have been elected and qualified.
14A:6-10 2. Regular Meetings. -- A regular meeting of the Board shall
be held without notice immediately following and at the same
place as the annual shareholders' meeting for the purposes of
electing officers and conducting such other business as may
come before the meeting. The Board, by resolution, may provide
for additional regular meetings which may be held without
notice, except to members not present at the time of the
adoption of the resolution.
14A:6-10(2) 3. Special Meeting. -- A special meeting of the Board may be
called at any time by the president or by directors for any
purpose. Such meeting shall be held upon days notice if given
orally (either by telephone or in person,) or by telegraph, or
by 10 days notice if given by depositing the notice in the
United States mails, postage prepaid. Such notice shall
specify the time and place of the meeting.
B4
<PAGE>
14A:6-7.1(5) 4. Action Without Meeting. -- The Board may act without a
meeting if, prior to subsequent to such action, each member of
the Board shall consent in writing to such action. Such
written consent or consents shall be filed in the minute book.
14A:6-7.1(3) 5. Quorum. -- Two of the entire Board shall constitute a
quorum for the transaction of business.
14A:6-5 6. Vacancies in Board of Directors. -- Any vacancy in the
Board may be filled by the affirmative vote of a majority of
the remaining directors, even though less than a quorum of the
Board, or by a sole remaining director.
14A:6-6 7. Removal of Directors. -- Any director may be removed for
cause, or without cause unless otherwise provided in the
certificate of incorporation, by a majority vote of
shareholders.
B5
<PAGE>
14A:6-10(3) 8. Presence at Meetings. -- Where appropriate communication
facilities are reasonably available, any or all directors
shall have the right to participate in all or any part of a
meeting of the board or a committee of the board by means of
conference telephone or any means of communication by which
all persons participating in the meeting are able to hear each
other.
B6
<PAGE>
ARTICLE IV
WAIVER OF NOTICE
14A:55(1)
14A:6-10(2) Any notice required by these by-laws, by the certificate of
incorporation, or by the New Jersey Business Corporation Act
may be waived in writing by any person entitled to notice. The
waiver or waivers may be executed either before or after the
event with respect to which notice is waived. Each director or
shareholder attending a meeting without protesting, prior to
its conclusion, the lack of proper notice shall be deemed
conclusively to have waived notice of the meeting.
B6
<PAGE>
ARTICLE V
OFFICERS
14A:6-15(1) 1. Election. -- At its regular meeting following the
annual meeting of shareholders, the Board shall elect a
14A:6-15(2) resident, a treasurer, a secretary, and it may elect
such other officers, including one or more vice
presidents, as it shall deem necessary. One person may
hold two or more offices.
14A:6-15(4) 2. Duties and Authority of President. -- The president
shall be chief executive officer of the Corporation.
Subject only to the authority of the Board, he shall
have general charge and supervision over, and
responsibility for, the business and affairs of the
Corporation. Unless otherwise directed by the Board, all
other officers shall be subject to the authority and
supervision of the president. THe president may enter
into and execute in the name of the Corporation
contracts or other instruments in the regular course of
business or contracts or other instruments not in the
regular course of business which are authorized, either
generally or specifically, by the Board. He shall have
the general powers and duties of management usually
vested in the office of president or a corporation.
B7
<PAGE>
14A:6-15(4) 3. Duties and Authority of Vice President. -- The vice
president shall perform such duties and have such
authority as from time to time may be delegated to him
by the president or by the Board. In the absence of the
president or in the event of his death, inability, or
refusal to act, the vice president shall perform the
duties and be vested with the authority of the
president.
14A:6-15(4) 4. Duties and Authority of Treasurer. -- The treasurer
shall have the custody of the funds and securities of
the Corporation and shall keep or cause to be kept
regular books of account for the Corporation. The
treasurer shall perform such other duties and possess
such other powers as are incident to that office or as
shall be assigned by the president or the Board.
14A:6-15(4) 5. Duties and Authority of Secretary. -- The secretary
shall cause notices of all meetings to be served as
prescribed in these by-laws and shall keep or cause to
be kept the minutes of all meetings of the shareholders
and the Board. The secretary shall have charge of the
seal of the Corporation. The secretary shall perform
such other duties and possess such other powers as are
incident to that office or as are assigned by the
president of the Board.
B8
<PAGE>
14A:6-16 6. Removal and Resignation of Officers; Filling of
Vacancies.
A. Any officer elected by the board may be removed
by the board with or without cause. An officer elected
by the shareholders may be removed, with or without
cause, only by vote of the shareholders but his
authority to act as an officer may be suspended by the
board for cause. The removal of an officer shall be
without prejudice to his contract rights, if any.
Election of an officer shall not of itself create
contract rights.
B. An officer may resign by written notice to the
corporation. The resignation shall be effective upon
receipt thereof by the corporation or at such subsequent
time as shall be specified in the notice of resignation.
C. Any vacancy occurring among the officers,
however caused, shall be filled by the board.
B9
<PAGE>
ARTICLE VI
AMENDMENTS TO AND EFFECT OF BY-LAWS;
FISCAL YEAR
1. Force and Effect of By-Laws. -- These by-laws are
subject to the provisions of the New Jersey Business
Corporation Act and the Corporation's certificate of
incorporation, as it may be amended from time to time.
If any provision in these by-laws is inconsistent with a
provision in the Act or the certificate of in
corporation, the provision of that Act or the
certificate of incorporation shall govern.
2. Wherever in these by-laws references are made to more
than one incorporator, director, or shareholder, they
shall, if this is a sole incorporator, director,
shareholder corporation, be construed to mean the
solitary person; and all provisions dealing with the
quantum of majorities of quorums shall be deemed to mean
the action by the one person constituting the
corporation.
14A:22-9(1) 3. Amendments to By-laws. -- These by-laws may be
altered, amended, or repealed by the shareholders or the
board. Any by-law adopted, amended, or shareholders or
the board. Any by-law adopted, amended, or repealed by
the shareholders may be amended or repealed by the
board, unless the resolution of the shareholders
adopting such by-law expressly reserves to the
shareholders the right to amend or repeal it.
4. Fiscal Year. -- The fiscal year of the corporation
shall begin on the first day of January of each year.
B10
<PAGE>
MINUTES OF FIRST MEETING OF
SHAREHOLDERS
A meeting of the shareholders of R-TEC TECHNOLOGIES, INC. was held at
11:30 o'clock a.m., November 4, 1998 at
61 Mallard Drive
Allamuchy, New Jersey 07820
The following persons, constituting a quorum, were present in person or
by proxy:
The president presided as chairman of the meeting, and the secretary
recorded the minutes of the meeting.
The president reported on the organization of the Corporation, noting
that the Board had adopted by-laws, elected officers, and determined to
undertake certain activities.
S2
<PAGE>
The next matter to be considered was the election of directors to hold
office until the next annual meeting of shareholders. The president noted that
the Corporation's by-laws provide for no more than five and no less than two
directors. The following persons were nominated as directors and, there being no
other nominations, were unanimously elected:
Nancy Vitolo - Secretary
Philip Lacqua - President
Marc M. Scola - Vice President, Treasurer
And General Counsel
There being no further business presented, the meeting was duly
adjourned.
/s/Nancy Vitolo
-----------------------
Nancy Vitolo, Secretary
S3
<PAGE>
WAIVER OF NOTICE OF
MEETING OF SHAREHOLDERS
The undersigned, each being a shareholder of R-TEC
TECHNOLOGIES, INC. waive all notice required by the Corporation's by-laws and
the laws of the State of New Jersey of the time, place, and purposes of a
meeting of the shareholders and fix November 4, 1998, as the date, 11:30 o'clock
a.m. as the time, and
61 Mallard Drive, Allamuchy, New Jersey 07820
as the place, and the following as the purposes:
Electing a Board of Directors, approving By-Laws and various
other documents of the corporation.
The transaction of such other business as may properly come
before the meeting.
/s/Marc M. Scola
----------------
Marc M. Scola
/s/Philip Lacqua
----------------
Philip Lacqua
Dated: November 4, 1998 /s/Nancy Vitolo
----------------
Nancy Vitolo
S6
<PAGE>
I HEREBY CERTIFY that all shareholders of the Corporation were
present at the foregoing meeting and that none protested the absence of notice
of the meeting.
Dated: November __, 1998 /s/Nancy Vitolo
-----------------------
Nancy Vitolo, Secretary
S7
<PAGE>
THE UNDERSIGNED, being all of the shareholders of the
Corporation, acknowledge that they attended the foregoing meeting without
protest of absence of notice and that the foregoing minutes accurately reflect
the actions taken at that meeting.
/s/Nancy Vitolo
---------------
Nancy Vitolo
/s/Marc M. Scola
----------------
Marc M. Scola
/s/Philip Lacqua
----------------
Philip Lacqua
Dated: November 4, 1998
S8
EXHIBIT 4.2
<TABLE>
<CAPTION>
Certificate No. 4 For Shares Issued to ______________________________ Transferred from / /
-------- -------- ---------------------------------
No. Original Certificate No. Original Shares No. Of Shares Transfered
Dated , Receipt Acknowledged
===================================================================================================
| NUMBER SHARES |
| ---------- ------------ |
| | 4 | INCORPORATED UNDER THE LAWS OF | | |
| ---------- --------------------------------- ------------ |
| ------------------------------ THE STATE OF --------------------------- |
| | NEW JERSEY | |
| | | |
| | | |
| | | |
| | | |
| | R-TEC TECHNOLOGIES, INC. | |
| | 25,000,000 SHARES COMMON STOCK, NO PAR VALUE | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | THIS CERTIFIES THAT VOID is the owner of fully paid | |
| | ---------------------------------- | |
| | and non-assessable Shares of the Capital Stock of the above named Corporation | |
| | transferable only on the books of the Corporation by the holder hereof in person or | |
| | by duly authorized Attorney upon surrender of this Certificate properly endorsed. | |
| | | |
| | | |
| | In Witness Whereof, the said Corporation has caused this Certificate to be | |
| | signed by its duly authorized officers and its Corporate Seal to be | |
| | hereunto affixed this ___________ day of __________________ A.D. ____________ | |
| | | |
| | VOID ___________________ _________________ | |
| | ------------------------ | |
| | TREASURER/SECRETARY PRESIDENT | |
| | | |
| ---------------------------------------------------------------------------------------- |
| VOID |
| |
===================================================================================================
<S> <C>
</TABLE>
EXHIBIT 5
[Letterhead of Sirota & Sirota LLP]
February 10, 1999
Board of Directors
R-TEC Technologies, Inc.
61 Mallard Drive
P.O. Box 282
Allamuchy, New Jersey 07820
Re: Opinion and Consent of Counsel With
Respect to Registration Statement on Form S-1
Gentlemen:
You have requested the opinion and consent of this law firm,
as counsel, with respect to the proposed issuance and public distribution of
certain securities of the Company pursuant to the filing of a registration
statement on Form S-1 with the Securities and Exchange Commission.
The proposed offering and public distribution relates to a
minimum of 625,000 shares and a maximum of 3,750,000 shares of the Company's
common stock to be offered and sold to the public at a price of $8.00 per share.
It is this firm's opinion that the common stock will, when issued in accordance
with the terms and conditions set forth in the registration statement, be duly
authorized, validly issued, fully paid and nonassessable in accordance with the
corporation laws of the State of New York.
We hereby consent to be named as counsel for the Company in
the registration statement and prospectus included therein.
Very truly yours
Howard B. Sirota
HBS:mc
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of
this Registration Statement on Form S-1 for R-Tec Technologies, Inc., of our
report dated January 7, 1999, relating to the December 31, 1998 financial
statements of R-Tec Technologies, Inc., which appears in such prospectus. We
also consent to the reference to us under the heading "Experts."
/s/JUREWICZ & DUCA, CPA'S, P.C.
- -------------------------------
JUREWICZ & DUCA, CPA'S, P.C.
Garden City, New York
January 31, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Financial Data Schedule contains summary information extracted
from the independent auditors consolidated financial statements and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> Other
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 36,353
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 36,353
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,361,354
<CURRENT-LIABILITIES> 1,374,773
<BONDS> 0
0
0
<COMMON> 15,000,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,361,354
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 13,422
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (13,422)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
EXHIBIT 99.1
Assignment GSEN3.0-001
FOR GOOD AND VALUABLE CONSIDERATION,
I, Muriel Kaiser residing at 10110 Boynton Place Circle, Boynton Beach,
Florida 33437 do hereby sell, assign and transfer unto R-Tec, Inc. a corporation
organized under the laws of the State of NEW JERSEY and having an address for
service at P.O. Box 70, Allamuchy, New Jersey 07820 herein sometimes called
"ASSIGNEE," the entire right, title and interest, together with all rights of
priority, in and to the invention for
COMPOSITION FOR THE DETECTION OF ELECTROPHILIC GASES AND METHODS OF USE THEREOF
as described and/or claimed in the Letters Patent of the United States of
America, #5 783 110, issued July 21, 1998, based on Serial No. 08/837355 filed
April 17, 1997 which was assigned to me by mesne assignments and as described
and/or claimed in any and all applications for Letter Patent based thereon
including divisions, continuations and reissues thereof as well as all foreign
counterparts thereof together with all Letters Patent issuing on any of the
aforesaid applications for Letters Patent, the same to be held and enjoyed by
ASSIGNEE, its successors, assigns or other legal representatives, to the full
ends of the terms of all said Letter Patent therefor which may be granted.
And I Hereby Authorize Assignee to make applications for and to receive
Letters Patent for said invention in any countries in its owns name, or in my
name, at its election.
And I Hereby Covenant and Agree that I will execute or procure any
further necessary assurance of title to said invention and any Letters Patent
which may issue therefor and that I will, at any time, upon the request and at
the expense of ASSIGNEE deliver any testimony in any legal proceedings and
execute all papers that may be necessary or desirable to perfect the title to
said invention or any Letters Patent which may be granted therefor in ASSIGNEE,
its successors, assigns, or other legal representatives, and that I will, at any
time, upon the request and at the expense of ASSIGNEE execute any continuations,
divisions, reissues, or any other additional applications for Letters Patent for
said invention or any part or parts thereof, all of which applications and any
letters Patent issuing thereon are hereby assigned to ASSIGNEE, and will make
all rightful oaths, and do all lawful acts requisite for procuring the same
therein, without further compensation, but at the expense of ASSIGNEE, its
successors, assigns or other legal representatives.
I covenant with said assignee, its successors, assigns and legal
representatives, that the rights and property herein conveyed are free and clear
of any encumbrance, and that I have full right to convey the same herein
expressed.
<PAGE>
And I Hereby Authorized and Request the Commissioner of Patents and
Trademarks to issue any and all Letters Patent of the United States for said
invention, resulting from any of the aforesaid applications to said as sole
assignee.
Witness My hand and seal this . . . . . . day of November 1998
/s/Muriel Kaiser
----------------
Muriel Kaiser
Acknowledgment
State of Florida )
)ss.:
County of Palm Beach)
On this 2 day of November 1998, Muriel Kaiser personally appeared
before me Audrey Morreale, a Notary Public of the State of Florida, to me known,
and known by me to be the same person described in and who executed the
foregoing instrument in my presence, and acknowledged that she they executed the
same, of here own free will and for the purposes set forth.
/s/Audrey J. Morreale
---------------------
Notary Public
Audrey J. Morreale
My Commission # CC616621
Expires: February 9, 2001
Bonded thru Notary Public
EXHIBIT 99.2
PROMISSORY NOTE
$ 4,000,000.00 Warren County, New Jersey
Five Percent (5.0%) December 1, 1998
FOR VALUE RECEIVED, the undersigned and maker of this Note, R- TEC
TECHNOLOGIES, INC. promises to PAY TO THE ORDER OF NANCY VITOLO at the address
of 290 Green Road, Sparta, New Jersey 07871 and MURIEL KAISER at the address of
10110 Boynton Place Circle, Boynton Beach, Florida 33437 (the "holders") the sum
of Four Million Dollars ($4,000,000.00) at Five Percent (5.0%) per annum payable
in full within thirty (30) days of the completion of the funding of the initial
public offering.
IT IS AGREED that if the proposed public offering realizes less than
Thirty (30) Million Dollars as anticipated, the amount due under this Note to
the holders will be reduced as follows:
Public Offering (in Dollars) Amount Due Holders
- ---------------------------- ------------------
27.5 - 30 Million $ 4,000,000.00
25 - 27.5 Million $ 3,500,000.00
20 - 25 Million $ 3,000,000.00
15 - 20 Million $ 2,500,000.00
10 - 15 Million $ 2,000,000.00
7.5 - 10 Million $ 1,500,000.00
5 - 7.5 Million $ 1,000,000.00
The value of the patent will be set based upon the initial public
offering. Holders Agree that the amount paid in the schedule above will be their
total consideration for the Patent and all assignments thereto.
ADDRESS OF MAKER: The undersigned represents and warrants that the
undersigned is located at 61 Mallard Drive, Allamuchy, New Jersey, and agrees to
notify the holder of any change of residence within 10 days of such change.
WAIVERS: The undersigned hereby waives (1) presentment, demand,
protest, notice of dishonor and/or protest and notice of nonpayment; (2) the
right, if any, to the benefit of, or to direct the application of, any security
hypothecated to the holder until all indebtedness of the undersigned to the
holder, howsoever arising, shall have been paid; and (3) the right to require
the holder to proceed against or to pursue any remedy against any party other
than the undersigned.
<PAGE>
Promissory Note/R-Tec Technologies, Inc./Page Two
INSOLVENCY: It is agreed that if the undersigned, at any time fail in
business or become insolvent, or commit an act of bankruptcy, or if any deposit
account or other property of the undersigned be attempted to be obtained or held
by writ of execution, garnishment, attachment or other legal process, or if any
assessment for taxes against the undersigned other than taxes on real property,
is made by the federal or state government, or any department thereof, or if the
undersigned fails to notify the holder of any material change in its financial
condition, then in such case all of the obligations of the undersigned shall, at
the option of the holder, become due and payable immediately without demand or
notice.
WARRANTY OF RECEIPT OF VALUE: The undersigned does hereby expressly
represent and warrant to the holder with the intent that the holder rely on such
representation and warranty as a specific inducement to the making of this
instrument, that the undersigned have received full value for this note.
ASSIGNABILITY: This note shall be assignable only by the holder
provided that such assignment shall not impair or enlarge the obligations of the
undersigned. The undersigned shall not assign obligations under this note to any
third party without the written consent of the holder.
LAW GOVERNING: This Promissory Note shall be governed by the laws of
the State of New Jersey and the undersigned do hereby voluntarily submit
generally to the jurisdiction of the courts of New Jersey should it become
necessary for the holder hereof to enforce any of his rights under the terms
hereof.
DEFAULT: The maker also agrees to pay all costs and expenses incurred
by the holder hereof, including all reasonable attorneys' fees for the
collection of this Note and the indebtedness evidenced hereby, or the
enforcement of the holder's rights hereunder or under any other instruments
creating any collateral security or guaranty now or hereinafter given to secure
this loan.
The maker acknowledges that the $4,000,000.00 or otherwise due the
holders of this Note arose from the sale of a Patent on December 1, 1998.
ACCELERATION: The maker further agrees that if the Corporation is
subsequently sold or transferred, all payments due and owing under this Note
will become due at the time of the subsequent sale.
<PAGE>
Promissory Note/R-Tec Technologies, Inc./Page Three
Attest: R-TEC TECHNOLOGIES, INC.
/s/ By: /s/ L.S.
- ------------------------ ----------------------
MARC M. SCOLA, ESQ.
Vice President and
General Counsel
Dated: December 1, 1998 Dated: December 1, 1998
STATE OF NEW JERSEY:
SS:
COUNTY OF WARREN :
I CERTIFY that on December 1, 1998, MARC M. SCOLA, ESQ. personally cam
before me, and this person acknowledged under oath, to my satisfaction, that:
(a) This person is the Vice President and General Counsel of R-TEC
TECHNOLOGIES, INC., the corporation named in this document;
(b) This person is the attesting witness to the signing of this
document by the proper corporate office who is MARC M. SCOLA,
ESQ. the Vice President and General Counsel of the corporation;
(c) This document was signed and delivered by the corporation as its
voluntary act duly authorized by a proper resolution of its Board
of Directors;
(d) This person knows the proper seal of the corporation which was
affixed to this document; and
(e) This person signed this proof to attest to the truth of these
facts.
/s/Phyllis Grippaldi
-----------------------------
A Notary Public of New Jersey
Phyllis Grippaldi
A Notary Public of New Jersey
My Commission Expires Oct. 31, 1999
EXHIBIT 99.3
PROMISSORY NOTE
$ 31,000.00 Warren County, New Jersey
Six Percent (6.0%) January 6, 1999
FOR VALUE RECEIVED, the undersigned and maker of this Note, R- TEC
TECHNOLOGIES, INC. promises to PAY TO THE ORDER OF NANCY VITOLO at the address
of 290 Green Road, Sparta, New Jersey 07871 (the "holder") the sum of Thirty One
Thousand Dollars ($31,000.00) at Six Percent (6.0%) per annum payable in full
within thirty (30) days of the completion of the funding of the initial public
offering.
ADDRESS OF MAKER: The undersigned represents and warrants that the
undersigned is located at 61 Mallard Drive, Allamuchy, New Jersey, and agrees to
notify the holder of any change of residence within 10 days of such change.
WAIVERS: The undersigned hereby waives (1) presentment, demand,
protest, notice of dishonor and/or protest and notice of nonpayment; (2) the
right, if any, to the benefit of, or to direct the application of, any security
hypothecated to the holder until all indebtedness of the undersigned to the
holder, howsoever arising, shall have been paid; and (3) the right to require
the holder to proceed against or to pursue any remedy against any party other
than the undersigned.
INSOLVENCY: It is agreed that if the undersigned, at any time fail in
business or become insolvent, or commit an act of bankruptcy, or if any deposit
account or other property of the undersigned be attempted to be obtained or held
by writ of execution, garnishment, attachment or other legal process, or if any
assessment for taxes against the undersigned other than taxes on real property,
is made by the federal or state government, or any department thereof, or if the
undersigned fails to notify the holder of any material change in its financial
condition, then in such case all of the obligations of the undersigned shall, at
the option of the holder, become due and payable immediately without demand or
notice.
WARRANTY OF RECEIPT OF VALUE: The undersigned does hereby expressly
represent and warrant to the holder with the intent that the holder rely on such
representation and warranty as a specific inducement to the making of this
instrument, that the undersigned have received full value for this note.
ASSIGNABITY: This note shall be assignable only by the holder provided
that such assignment shall not impair or enlarge the obligations of the
undersigned. The undersigned shall not assign obligations under this note to any
third party without the written consent of the holder.
<PAGE>
Promissory Note/R-Tec Technologies, Inc./Vitolo/Page Two
LAW GOVERNING: This Promissory Note shall be governed by the laws of
the State of New Jersey and the undersigned do hereby voluntarily submit
generally to the jurisdiction of the courts of New Jersey should it become
necessary for the holder hereof to enforce any of his rights under the terms
hereof.
DEFAULT: The maker also agrees to pay all costs and expenses incurred
by the holder hereof, including all reasonable attorneys' fees for the
collection of this Note and the indebtedness evidenced hereby, or the
enforcement of the holder's rights hereunder or under any other instruments
creating any collateral security or guaranty now or hereinafter given to secure
this loan.
The maker acknowledges that the $31,000.00 of this Note represents
reimbursement of monies paid in an effort to bring the Company R-Tec
Technologies, Inc. public.
ACCELERATION: The maker further agrees that if the Corporation is
subsequently sold or transferred, all payments due and owing under this Note
will become due at the time of the subsequent sale.
Attested By: R-TEC TECHNOLOGIES, INC.
/s/NANCY VITOLO By:/s/PHILIP LACQUA L.S.
- --------------- --------------------
NANCY VITOLO, PHILIP LACQUA,
Secretary President
Dated: January 6, 1999 Dated: January 6, 1999
EXHIBIT 99.4
PROMISSORY NOTE
$ 29,840.22 Warren County, New Jersey
Six Percent (6.0%) January 6, 1999
FOR VALUE RECEIVED, the undersigned and maker of this Note, R-TEC
TECHNOLOGIES, INC. promises to PAY TO THE ORDER OF MARC M. SCOLA at the address
of 61 Mallard Drive, Hackettstown, New Jersey 07840 (the "holder") the sum of
Twenty Nine Thousand Eight Hundred Forty Dollars and Twenty Two Cents
($29,840.22) at Six Percent (6.0%) per annum payable in full within thirty (30)
days of the completion of the funding of the initial public offering.
ADDRESS OF MAKER: The undersigned represents and warrants that the
undersigned is located at 61 Mallard Drive, Allamuchy, New Jersey, and agrees to
notify the holder of any change of residence within 10 days of such change.
WAIVERS: The undersigned hereby waives (1) presentment, demand,
protest, notice of dishonor and/or protest and notice of nonpayment; (2) the
right, if any, to the benefit of, or to direct the application of, any security
hypothecated to the holder until all indebtedness of the undersigned to the
holder, howsoever arising, shall have been paid; and (3) the right to require
the holder to proceed against or to pursue any remedy against any party other
than the undersigned.
INSOLVENCY: It is agreed that if the undersigned, at any time fail in
business or become insolvent, or commit an act of bankruptcy, or if any deposit
account or other property of the undersigned be attempted to be obtained or held
by writ of execution, garnishment, attachment or other legal process, or if any
assessment for taxes against the undersigned other than taxes on real property,
is made by the federal or state government, or any department thereof, or if the
undersigned fails to notify the holder of any material change in its financial
condition, then in such case all of the obligations of the undersigned shall, at
the option of the holder, become due and payable immediately without demand or
notice.
WARRANTY OF RECEIPT OF VALUE: The undersigned does hereby expressly
represent and warrant to the holder with the intent that the holder rely on such
representation and warranty as a specific inducement to the making of this
instrument, that the undersigned have received full value for this note.
ASSIGNABITY: This note shall be assignable only by the holder provided
that such assignment shall not impair or enlarge the obligations of the
undersigned. The undersigned shall not assign obligations under this note to any
third party without the written consent of the holder.
<PAGE>
Promissory Note/R-Tec Technologies, Inc./Scola/Page Two
LAW GOVERNING: This Promissory Note shall be governed by the laws of
the State of New Jersey and the undersigned do hereby voluntarily submit
generally to the jurisdiction of the courts of New Jersey should it become
necessary for the holder hereof to enforce any of his rights under the terms
hereof.
DEFAULT: The maker also agrees to pay all costs and expenses incurred
by the holder hereof, including all reasonable attorneys' fees for the
collection of this Note and the indebtedness evidenced hereby, or the
enforcement of the holder's rights hereunder or under any other instruments
creating any collateral security or guaranty now or hereinafter given to secure
this loan.
The maker acknowledges that the $29,840.22 of this Note represents
reimbursement of monies paid in an effort to bring the Company R-Tec
Technologies, Inc. public.
ACCELERATION: The maker further agrees that if the Corporation is
subsequently sold or transferred, all payments due and owing under this Note
will become due at the time of the subsequent sale.
Attested By: R-TEC TECHNOLOGIES, INC.
/s/NANCY VITOLO By:/s/PHILIP LACQUA L.S.
- --------------- --------------------
NANCY VITOLO, PHILIP LACQUA,
Secretary President
Dated: January 6, 1999 Dated: January 6, 1999
EXHIBIT 99.5
PROMISSORY NOTE
$203,000.00 Warren County, New Jersey
Six Percent (6.0%) January 6, 1999
FOR VALUE RECEIVED, the undersigned and maker of this Note, R- TEC
TECHNOLOGIES, INC. promises to PAY TO THE ORDER OF COLUMBIA TRADING, INC. at the
address of 499 Van Brunt Street, Brooklyn, New York 11231 (the "holder") the sum
of Two Hundred Three Thousand Dollars ($203,000.00) at Six Percent (6.0%) per
annum payable in full within thirty (30) days of the completion of the funding
of the initial public offering.
ADDRESS OF MAKER: The undersigned represents and warrants that the
undersigned is located at 61 Mallard Drive, Allamuchy, New Jersey, and agrees to
notify the holder of any change of residence within 10 days of such change.
WAIVERS: The undersigned hereby waives (1) presentment, demand,
protest, notice of dishonor and/or protest and notice of nonpayment; (2) the
right, if any, to the benefit of, or to direct the application of, any security
hypothecated to the holder until all indebtedness of the undersigned to the
holder, howsoever arising, shall have been paid; and (3) the right to require
the holder to proceed against or to pursue any remedy against any party other
than the undersigned.
INSOLVENCY: It is agreed that if the undersigned, at any time fail in
business or become insolvent, or commit an act of bankruptcy, or if any deposit
account or other property of the undersigned be attempted to be obtained or held
by writ of execution, garnishment, attachment or other legal process, or if any
assessment for taxes against the undersigned other than taxes on real property,
is made by the federal or state government, or any department thereof, or if the
undersigned fails to notify the holder of any material change in its financial
condition, then in such case all of the obligations of the undersigned shall, at
the option of the holder, become due and payable immediately without demand or
notice.
WARRANTY OF RECEIPT OF VALUE: The undersigned does hereby expressly
represent and warrant to the holder with the intent that the holder rely on such
representation and warranty as a specific inducement to the making of this
instrument, that the undersigned have received full value for this note.
ASSIGNABITY: This note shall be assignable only by the holder provided
that such assignment shall not impair or enlarge the obligations of the
undersigned. The undersigned shall not assign obligations under this note to any
third party without the written consent of the holder.
<PAGE>
Promissory Note/R-Tec Technologies, Inc./Columbia Trad./Page Two
LAW GOVERNING: This Promissory Note shall be governed by the laws of
the State of New Jersey and the undersigned do hereby voluntarily submit
generally to the jurisdiction of the courts of New Jersey should it become
necessary for the holder hereof to enforce any of his rights under the terms
hereof.
DEFAULT: The maker also agrees to pay all costs and expenses incurred
by the holder hereof, including all reasonable attorneys' fees for the
collection of this Note and the indebtedness evidenced hereby, or the
enforcement of the holder's rights hereunder or under any other instruments
creating any collateral security or guaranty now or hereinafter given to secure
this loan.
The maker acknowledges that the $203,000.00 of this Note represents
reimbursement of consulting fees and monies paid in an effort to bring the
Company R-Tec Technologies, Inc. public.
ACCELERATION: The maker further agrees that if the Corporation is
subsequently sold or transferred, all payments due and owing under this Note
will become due at the time of the subsequent sale.
Attested By: R-TEC TECHNOLOGIES, INC.
/s/NANCY VITOLO By:/s/PHILIP LACQUA L.S.
- --------------- ----------------------
NANCY VITOLO, PHILIP LACQUA,
Secretary President
Dated: January 6, 1999 Dated: January 6, 1999
EXHIBIT 99.6
PROMISSORY NOTE
$ 350,000.00 Warren County, New Jersey
Six Percent (6.0%) January 6, 1999
FOR VALUE RECEIVED, the undersigned and maker of this Note, R-TEC
TECHNOLOGIES, INC. promises to PAY TO THE ORDER OF MARC M. SCOLA at the address
of 61 Mallard Drive, Hackettstown, New Jersey 07840 (the "holder") the sum of
Three Hundred Fifty Thousand Dollars ($350,000.00) at Six Percent (6.0%) per
annum payable in full within thirty (30) days of the completion of the funding
of the initial public offering.
ADDRESS OF MAKER: The undersigned represents and warrants that the
undersigned is located at 61 Mallard Drive, Allamuchy, New Jersey, and agrees to
notify the holder of any change of residence within 10 days of such change.
WAIVERS: The undersigned hereby waives (1) presentment, demand,
protest, notice of dishonor and/or protest and notice of nonpayment; (2) the
right, if any, to the benefit of, or to direct the application of, any security
hypothecated to the holder until all indebtedness of the undersigned to the
holder, howsoever arising, shall have been paid; and (3) the right to require
the holder to proceed against or to pursue any remedy against any party other
than the undersigned.
INSOLVENCY: It is agreed that if the undersigned, at any time fail in
business or become insolvent, or commit an act of bankruptcy, or if any deposit
account or other property of the undersigned be attempted to be obtained or held
by writ of execution, garnishment, attachment or other legal process, or if any
assessment for taxes against the undersigned other than taxes on real property,
is made by the federal or state government, or any department thereof, or if the
undersigned fails to notify the holder of any material change in its financial
condition, then in such case all of the obligations of the undersigned shall, at
the option of the holder, become due and payable immediately without demand or
notice.
WARRANTY OF RECEIPT OF VALUE: The undersigned does hereby expressly
represent and warrant to the holder with the intent that the holder rely on such
representation and warranty as a specific inducement to the making of this
instrument, that the undersigned have received full value for this note.
ASSIGNABITY: This note shall be assignable only by the holder provided
that such assignment shall not impair or enlarge the obligations of the
undersigned. The undersigned shall not assign obligations under this note to any
third party without the written consent of the holder.
<PAGE>
Promissory Note/R-Tec Technologies, Inc./Scola/Page Two
LAW GOVERNING: This Promissory Note shall be governed by the laws of
the State of New Jersey and the undersigned do hereby voluntarily submit
generally to the jurisdiction of the courts of New Jersey should it become
necessary for the holder hereof to enforce any of his rights under the terms
hereof.
DEFAULT: The maker also agrees to pay all costs and expenses incurred
by the holder hereof, including all reasonable attorneys' fees for the
collection of this Note and the indebtedness evidenced hereby, or the
enforcement of the holder's rights hereunder or under any other instruments
creating any collateral security or guaranty now or hereinafter given to secure
this loan.
The maker acknowledges that the $350,000.00 of this Note represents one
(1) year back salary for work on R-Tec Technologies, Inc., the Patent and
overall diligence toward the company.
ACCELERATION: The maker further agrees that if the Corporation is
subsequently sold or transferred, all payments due and owing under this Note
will become due at the time of the subsequent sale.
Attested By: R-TEC TECHNOLOGIES, INC.
/s/NANCY VITOLO By:/s/PHILIP LACQUA L.S.
- --------------- -------------------------
NANCY VITOLO, PHILIP LACQUA,
Secretary President
Dated: January 6, 1999 Dated: January 6, 1999
EXHIBIT 99.7
PROMISSORY NOTE
$ 350,000.00 Warren County, New Jersey
Six Percent (6.0%) January 6, 1999
FOR VALUE RECEIVED, the undersigned and maker of this Note, R-TEC
TECHNOLOGIES, INC. promises to PAY TO THE ORDER OF NANCY VITOLO at the address
of 290 Green Road, Sparta, New Jersey 07871 (the "holder") the sum of Three
Hundred Fifty Thousand Dollars ($350,000.00) at Six Percent (6.0%) per annum
payable in full within thirty (30) days of the completion of the funding of the
initial public offering.
ADDRESS OF MAKER: The undersigned represents and warrants that the
undersigned is located at 61 Mallard Drive, Allamuchy, New Jersey, and agrees to
notify the holder of any change of residence within 10 days of such change.
WAIVERS: The undersigned hereby waives (1) presentment, demand,
protest, notice of dishonor and/or protest and notice of nonpayment; (2) the
right, if any, to the benefit of, or to direct the application of, any security
hypothecated to the holder until all indebtedness of the undersigned to the
holder, howsoever arising, shall have been paid; and (3) the right to require
the holder to proceed against or to pursue any remedy against any party other
than the undersigned.
INSOLVENCY: It is agreed that if the undersigned, at any time fail in
business or become insolvent, or commit an act of bankruptcy, or if any deposit
account or other property of the undersigned be attempted to be obtained or held
by writ of execution, garnishment, attachment or other legal process, or if any
assessment for taxes against the undersigned other than taxes on real property,
is made by the federal or state government, or any department thereof, or if the
undersigned fails to notify the holder of any material change in its financial
condition, then in such case all of the obligations of the undersigned shall, at
the option of the holder, become due and payable immediately without demand or
notice.
WARRANTY OF RECEIPT OF VALUE: The undersigned does hereby expressly
represent and warrant to the holder with the intent that the holder rely on such
representation and warranty as a specific inducement to the making of this
instrument, that the undersigned have received full value for this note.
ASSIGNABITY: This note shall be assignable only by the holder provided
that such assignment shall not impair or enlarge the obligations of the
undersigned. The undersigned shall not assign obligations under this note to any
third party without the written consent of the holder.
<PAGE>
Promissory Note/R-Tec Technologies, Inc./Vitolo/Page Two
LAW GOVERNING: This Promissory Note shall be governed by the laws of
the State of New Jersey and the undersigned do hereby voluntarily submit
generally to the jurisdiction of the courts of New Jersey should it become
necessary for the holder hereof to enforce any of his rights under the terms
hereof.
DEFAULT: The maker also agrees to pay all costs and expenses incurred
by the holder hereof, including all reasonable attorneys' fees for the
collection of this Note and the indebtedness evidenced hereby, or the
enforcement of the holder's rights hereunder or under any other instruments
creating any collateral security or guaranty now or hereinafter given to secure
this loan.
The maker acknowledges that the $350,000.00 of this Note represents one
(1) year back salary for work on R-Tec Technologies, Inc., the Patent and
overall diligence toward the company.
ACCELERATION: The maker further agrees that if the Corporation is
subsequently sold or transferred, all payments due and owing under this Note
will become due at the time of the subsequent sale.
Attested By: R-TEC TECHNOLOGIES, INC.
/s/NANCY VITOLO By:/s/PHILIP LACQUA L.S.
- --------------- --------------------
NANCY VITOLO, PHILIP LACQUA,
Secretary President
Dated: January 6, 1999 Dated: January 6, 1999
EXHIBIT 99.8
PROMISSORY NOTE
$ 350,000.00 Warren County, New Jersey
Six Percent (6.0%) January 6, 1999
FOR VALUE RECEIVED, the undersigned and maker of this Note, R-TEC
TECHNOLOGIES, INC. promises to PAY TO THE ORDER OF PHILIP LACQUA at the address
of 1127 83rd Street, Brooklyn, New York 11228 (the "holder") the sum of Three
Hundred Fifty Thousand Dollars ($350,000.00) at Six Percent (6.0%) per annum
payable in full within thirty (30) days of the completion of the funding of the
initial public offering.
ADDRESS OF MAKER: The undersigned represents and warrants that the
undersigned is located at 61 Mallard Drive, Allamuchy, New Jersey, and agrees to
notify the holder of any change of residence within 10 days of such change.
WAIVERS: The undersigned hereby waives (1) presentment, demand,
protest, notice of dishonor and/or protest and notice of nonpayment; (2) the
right, if any, to the benefit of, or to direct the application of, any security
hypothecated to the holder until all indebtedness of the undersigned to the
holder, howsoever arising, shall have been paid; and (3) the right to require
the holder to proceed against or to pursue any remedy against any party other
than the undersigned.
INSOLVENCY: It is agreed that if the undersigned, at any time fail in
business or become insolvent, or commit an act of bankruptcy, or if any deposit
account or other property of the undersigned be attempted to be obtained or held
by writ of execution, garnishment, attachment or other legal process, or if any
assessment for taxes against the undersigned other than taxes on real property,
is made by the federal or state government, or any department thereof, or if the
undersigned fails to notify the holder of any material change in its financial
condition, then in such case all of the obligations of the undersigned shall, at
the option of the holder, become due and payable immediately without demand or
notice.
WARRANTY OF RECEIPT OF VALUE: The undersigned does hereby expressly
represent and warrant to the holder with the intent that the holder rely on such
representation and warranty as a specific inducement to the making of this
instrument, that the undersigned have received full value for this note.
ASSIGNABITY: This note shall be assignable only by the holder provided
that such assignment shall not impair or enlarge the obligations of the
undersigned. The undersigned shall not assign obligations under this note to any
third party without the written consent of the holder.
<PAGE>
Promissory Note/R-Tec Technologies, Inc./Lacqua/Page Two
LAW GOVERNING: This Promissory Note shall be governed by the laws of
the State of New Jersey and the undersigned do hereby voluntarily submit
generally to the jurisdiction of the courts of New Jersey should it become
necessary for the holder hereof to enforce any of his rights under the terms
hereof.
DEFAULT: The maker also agrees to pay all costs and expenses incurred
by the holder hereof, including all reasonable attorneys' fees for the
collection of this Note and the indebtedness evidenced hereby, or the
enforcement of the holder's rights hereunder or under any other instruments
creating any collateral security or guaranty now or hereinafter given to secure
this loan.
The maker acknowledges that the $350,000.00 of this Note represents one
(1) year back salary for work on R-Tec Technologies, Inc., the Patent and
overall diligence toward the company.
ACCELERATION: The maker further agrees that if the Corporation is
subsequently sold or transferred, all payments due and owing under this Note
will become due at the time of the subsequent sale.
Attested By: R-TEC TECHNOLOGIES, INC.
/s/NANCY VITOLO By:/s/PHILIP LACQUA
- --------------- ----------------
NANCY VITOLO, PHILIP LACQUA,
Secretary President
Dated: January 6, 1999 Dated: January 6, 1999
EXHIBIT 9.9
PROMISSORY NOTE
$ 75,000.00 Warren County, New Jersey
Six Percent (6.0%) January 6, 1999
FOR VALUE RECEIVED, the undersigned and maker of this Note, R-TEC
TECHNOLOGIES, INC. promises to PAY TO THE ORDER OF MARC M. SCOLA at the address
of 61 Mallard Drive, Hackettstown, New Jersey 07840 (the "holder") the sum of
Seventy Five Thousand Dollars ($75,000.00) at Six Percent (6.0%) per annum
payable in full within thirty (30) days of the completion of the funding of the
initial public offering.
ADDRESS OF MAKER: The undersigned represents and warrants that the
undersigned is located at 61 Mallard Drive, Allamuchy, New Jersey, and agrees to
notify the holder of any change of residence within 10 days of such change.
WAIVERS: The undersigned hereby waives (1) presentment, demand,
protest, notice of dishonor and/or protest and notice of nonpayment; (2) the
right, if any, to the benefit of, or to direct the application of, any security
hypothecated to the holder until all indebtedness of the undersigned to the
holder, howsoever arising, shall have been paid; and (3) the right to require
the holder to proceed against or to pursue any remedy against any party other
than the undersigned.
INSOLVENCY: It is agreed that if the undersigned, at any time fail in
business or become insolvent, or commit an act of bankruptcy, or if any deposit
account or other property of the undersigned be attempted to be obtained or held
by writ of execution, garnishment, attachment or other legal process, or if any
assessment for taxes against the undersigned other than taxes on real property,
is made by the federal or state government, or any department thereof, or if the
undersigned fails to notify the holder of any material change in its financial
condition, then in such case all of the obligations of the undersigned shall, at
the option of the holder, become due and payable immediately without demand or
notice.
WARRANTY OF RECEIPT OF VALUE: The undersigned does hereby expressly
represent and warrant to the holder with the intent that the holder rely on such
representation and warranty as a specific inducement to the making of this
instrument, that the undersigned have received full value for this note.
ASSIGNABILITY: This note shall be assignable only by the holder
provided that such assignment shall not impair or enlarge the obligations of the
undersigned. The undersigned shall not assign obligations under this note to any
third party without the written consent of the holder.
<PAGE>
Promissory Note/R-Tec Technologies, Inc./Scola/Page Two
LAW GOVERNING: This Promissory Note shall be governed by the laws of
the State of New Jersey and the undersigned do hereby voluntarily submit
generally to the jurisdiction of the courts of New Jersey should it become
necessary for the holder hereof to enforce any of his rights under the terms
hereof.
DEFAULT: The maker also agrees to pay all costs and expenses incurred
by the holder hereof, including all reasonable attorneys' fees for the
collection of this Note and the indebtedness evidenced hereby, or the
enforcement of the holder's rights hereunder or under any other instruments
creating any collateral security or guaranty now or hereinafter given to secure
this loan.
The maker acknowledges that the $75,000.00 of this Note represents
reimbursement for use of office, office lease, secretaries, postage, fax
machine, printing, copying, and other miscellaneous office services prior to
Incorporation in furtherance of the Corporation.
ACCELERATION: The maker further agrees that if the Corporation is
subsequently sold or transferred, all payments due and owing under this Note
will become due at the time of the subsequent sale.
Attested By: R-TEC TECHNOLOGIES, INC.
/s/NANCY VITOLO By:/s/PHILIP LACQUA
- --------------- ----------------
NANCY VITOLO, PHILIP LACQUA,
Secretary President
Dated: January 6, 1999 Dated: January 6, 1999
EXHIBIT 99.10
CONSULTING AND SCIENTIFIC AGREEMENT
AGREEMENT made this 5 day of January, 1999, by and between STEWART
KAISER, having an address at 290 Green Road, Sparta, New Jersey 07871
hereinafter referred to as the "Consultant", and R-TEC TECHNOLOGIES, INC., whose
principal place of business is located at 61 Mallard Drive, Allamuchy, New
Jersey 07820, hereinafter referred to as "Company".
WHEREAS, the Company desires to engage the services of the Consultant
to perform for the Company consulting services regarding scientific experiments
and research on reactive paints as an independent contractor and not as an
employee; and
WHEREAS, Consultant desires to consult with the Board of Directors, the
officers of the Company, and the administrative staff, and to undertake for the
Company consultation as to the direction of certain functions in said
development of reactive paints.
NOW, THEREFORE, it is agreed as follows:
1. Term. The respective duties and obligations of the contracting parties shall
be for a period of twelve (12) months commending on January 1, 1999, and may be
terminated by either party giving thirty (30) days' written notice to the other
party at the addresses stated above or at an address chosen subsequent to the
execution of this agreement and duly communicated to the party giving notice.
2. Consultations. Consultant shall be available to consult with the Board of
Directors, the officers of the Company, and the heads of the administrative
staff, at reasonable times, concerning matters pertaining to the organization of
the scientific staff, the fiscal policies of the Company, the relationship of
the Company with its employees or with any organization representing its
employees, and, in general, the important problems of concern in the business
affairs of the Company. Consultant shall not represent the Company, its Board of
Directors, its officers or any other members of the Company in any transactions
or communications nor shall Consultant make claim to do so.
3. Liability. With regard to the services to be performed by the Consultant
pursuant to the terms of this agreement, the Consultant shall not be liable to
the Company, or to anyone who may claim any right due to any relationship with
the Corporation, for any acts or omissions in the performance of services on the
part of the Consultant or on the part of the agents or employees of the
Consultant, except when said acts or omissions of the Consultant are due to
willful misconduct or gross negligence. The Company shall hold the Consultant
free and harmless from any obligations, costs, claims, judgments, attorneys'
fees, and attachments arising from or growing out of the services rendered to
the Company pursuant to the terms of this agreement or in any way connected with
the rendering of services, except when the same shall arise due to the willful
misconduct or gross negligence of the Consultant and the Consultant is adjudged
to be guilty or willful misconduct or gross negligence by a court of competent
jurisdiction.
<PAGE>
CONSULTING AND SCIENTIFIC AGREEMENT - PAGE TWO
4. Compensation. The Consultant shall receive at least monthly from the Company
for the performance of the services to rendered to the Company pursuant to the
terms of the agreement $1,000.00 per month for work performed by the Consultant;
however; in no event shall the compensation paid to the Consultant by the
Company be less than $1,000.00. In addition, the Company shall reimburse the
Consultant per diem for any reasonable out of pocket expenses incurred by the
Consultant pursuant to the terms of this agreement. The Consultant shall submit
itemized statements of hours of services performed and expenses incurred during
any particular month by the fifth (5th) day of the next succeeding month. The
amount shall be paid to the Consultant by the fifteenth (15th) day of the latter
month.
5. The Laws of the State of New Jersey shall apply to this Agreement.
6. All data, findings, research, patents, trademarks, experiments or ideas
obtained while working on any of the company's projects are the sole property of
the company and considered trade secrets.
7. The undersigned consultant agrees not to discuss, reveal or disclose any
information on present projects, future projects or past projects with anyone
other than the designated corporate officers. The undersigned consultant agrees
not to disclose or reveal any findings, research or experiments with any person
outside the project and not designated by the company.
8. The undersigned consultant agrees to never reveal or disclose any of the
above information, findings, research or experiments to anyone not designated by
the company after termination or expiration of this agreement.
9. The undersigned consultant understands that any disclosure of the company's
trade secrets, research, experiments, future projects and ideas could cause the
company to suffer a financial loss.
<PAGE>
CONSULTING AND SCIENTIFIC AGREEMENT - PAGE THREE
I have read the above agreement and understand its terms and
conditions.
IN WITNESS WHEREOF, the parties have hereunto executed this Agreement
on the 5 day of January, 1999.
WITNESS: "R-TEC TECHNOLOGIES, INC."
By: /s/ By:/s/MARC M. SCOLA
----------------- -----------------
MARC M. SCOLA,
Vice President and
General Counsel
WITNESS:
By: /s/ By:/s/STEWART KAISER
----------------- -----------------
STEWART KAISER,
CONSULTANT
EXHIBIT 99.11
CONSULTING AND SCIENTIFIC AGREEMENT
AGREEMENT made this 11 day of January, 1999, by and between SHAWN
WALSH, having an address at 538 Wren Way, Branchburg, New Jersey 08876
hereinafter referred to as the "Consultant", and R-TEC TECHNOLOGIES, INC., whose
principal place of business is located at 61 Mallard Drive, Allamuchy, New
Jersey 07820, hereinafter referred to as "Company".
WHEREAS, the Company desires to engage the services of the Consultant
to perform for the Company consulting services regarding scientific experiments
and research on reactive paints as an independent contractor and not as an
employee; and
WHEREAS, Consultant desires to consult with the Board of Directors, the
officers of the Company, and the administrative staff, and to undertake for the
Company consultation as to the direction of certain functions in said
development of reactive paints.
NOW, THEREFORE, it is agreed as follows:
1. Term. The respective duties and obligations of the contracting parties shall
be for a period of twelve (12) months commending on January 1, 1999, and may be
terminated by either party giving thirty (30) days' written notice to the other
party at the addresses stated above or at an address chosen subsequent to the
execution of this agreement and duly communicated to the party giving notice.
2. Consultations. Consultant shall be available to consult with the Board of
Directors, the officers of the Company, and the heads of the administrative
staff, at reasonable times, concerning matters pertaining to the organization of
the scientific staff, the fiscal policies of the Company, the relationship of
the Company with its employees or with any organization representing its
employees, and, in general, the important problems of concern in the business
affairs of the Company. Consultant shall not represent the Company, its Board of
Directors, its officers or any other members of the Company in any transactions
or communications nor shall Consultant make claim to do so.
3. Liability. With regard to the services to be performed by the Consultant
pursuant to the terms of this agreement, the Consultant shall not be liable to
the Company, or to anyone who may claim any right due to any relationship with
the Corporation, for any acts or omissions in the performance of services on the
part of the Consultant or on the part of the agents or employees of the
Consultant, except when said acts or omissions of the Consultant are due to
willful misconduct or gross negligence. The Company shall hold the Consultant
free and harmless from any obligations, costs, claims, judgments, attorneys'
fees, and attachments arising from or growing out of the services rendered to
the Company pursuant to the terms of this agreement or in any way connected with
the rendering of services, except when the same shall arise due to the willful
misconduct or gross negligence of the Consultant and the Consultant is adjudged
to be guilty or willful misconduct or gross negligence by a court of competent
jurisdiction.
<PAGE>
CONSULTING AND SCIENTIFIC AGREEMENT - PAGE TWO
4. Compensation. The Consultant shall receive at least monthly from the Company
for the performance of the services to rendered to the Company pursuant to the
terms of the agreement $1,000.00 per month for work performed by the Consultant;
however; in no event shall the compensation paid to the Consultant by the
Company be less than $1,000.00. In addition, the Company shall reimburse the
Consultant per diem for any reasonable out of pocket expenses incurred by the
Consultant pursuant to the terms of this agreement. The Consultant shall submit
itemized statements of hours of services performed and expenses incurred during
any particular month by the fifth (5th) day of the next succeeding month. The
amount shall be paid to the Consultant by the fifteenth (15th) day of the latter
month.
5. The Laws of the State of New Jersey shall apply to this Agreement.
6. All data, findings, research, patents, trademarks, experiments or ideas
obtained while working on any of the company's projects are the sole property of
the company and considered trade secrets.
7. The undersigned consultant agrees not to discuss, reveal or disclose any
information on present projects, future projects or past projects with anyone
other than the designated corporate officers. The undersigned consultant agrees
not to disclose or reveal any findings, research or experiments with any person
outside the project and not designated by the company.
8. The undersigned consultant agrees to never reveal or disclose any of the
above information, findings, research or experiments to anyone not designated by
the company after termination or expiration of this agreement.
9. The undersigned consultant understands that any disclosure of the company's
trade secrets, research, experiments, future projects and ideas could cause the
company to suffer a financial loss.
<PAGE>
CONSULTING AND SCIENTIFIC AGREEMENT - PAGE THREE
I have read the above agreement and understand its terms and
conditions.
IN WITNESS WHEREOF, the parties have hereunto executed this Agreement
on the ____ day of January, 1999.
WITNESS: "R-TEC TECHNOLOGIES, INC."
By: /s/ By:/s/MARC M. SCOLA
------------------- ------------------
MARC M. SCOLA,
Vice President and
General Counsel
WITNESS:
By: By:/s/SHAWN WALSH
------------------- ------------------
SHAWN WALSH,
CONSULTANT
EXHIBIT 99.12
EXCLUSIVE MANUFACTURING AGREEMENT
This Manufacturing Agreement ("Agreement") is entered into as of
October 21st, 1998, between R-Tec Technologies, Inc., a New Jersey Corporation,
with its principal place of business at P.O. Box 70, Allamuchy, NJ, 07820
("Contractor") and Anscott Chemical Industries, a New Jersey Corporation with
its principal place of business at 26 Hanes Drive, Wayne, New Jersey, 07470,
("Manufacturer").
GENERAL
The Contractor is in the business of developing, marketing and
supporting certain products (defined below). The Manufacturer wishes to
manufacture to the dealers and the remarketers of these products and assures the
Contractor that it has the facilities, personnel, and technical expertise
necessary to manufacture the products.
The Manufacturer wishes to obtain from the Contractor, and the
Contractor is willing to grant to the Manufacturer, the exclusive right to
manufacture these products for resale purposes.
In consideration for the mutual promises, covenants, and Agreements
made below, the parties, intending to be legally bound, agree as follows:
1. Definitions
For purposes of this Agreement, the following terms will have the
indicated definitions:
"Agreement." This Agreement is by and between the Contractor
and the Manufacturer.
"Information." The documentation, technical information and/or business
information, either oral or written that the Contractor or the Manufacturer
furnishes to the other marked as; proprietary or confidential or simply treated
as such by the disclosing party. The products and services, as well as any
information relating to services, developments, services, processes, plans,
financial information, customer and Contractor lists, forecasts and projections.
Information shall also include the the terms of this Agreement. A party's
information shall be deemed confidential under this Agreement unless the
information: (1) is in the public domain through no act of other party; (2) is
lawfully known by the other party from a source other than the first party with
no restriction of confidentiality; or (3) must be disclosed by requirement of
law or generally accepted accounting principles.
<PAGE>
"Term." The duration of this Agreement.
"Products." The "Leak Detection Products" developed by the Contractor
Currently specified as R-12, R-22 or CO2 in kit form.
"End-User." Any person or entity who obtains the product(s)
in kit form.
"Intellectual Property Rights." The intangible legal rights or
interests evidenced by or embodied in (1) any idea, design, concept, technique,
invention, discovery, or improvement regardless of patentability, but including
patents, patent application, trade secrets and know-how; (2) any work of
authorship, regardless of copyrightability, but including copyrights and any
moral rights recognized by law; and (3) any other similar rights, in each case
on a worldwide basis.
2. Term
2.1 Term. This Agreement shall commence on the date stated in the first section
and shall terminate October 21, 2003, unless it terminates sooner in accordance
with the provisions of this Agreement. The Parties may renew this Agreement in
writing upon mutual Agreement.
2.2 Continuation or Survival of Certain Sections. Certain section, (6.1 & 6.3)
as indicated below, will survive and remain effective even after the termination
of this Agreement. All other rights and obligations of each party to the other
shall terminate upon the termination of this Agreement.
3. Relationship
3.1 Exclusive Manufacturer. The Contractor grants the Manufacturer, and the
Manufacturer accepts from the Contractor, the exclusive right to manufacture the
products. This appointment is subject to the limitations set forth in Section 4.
3.2 Powers as Manufacturer. Except as expressly provided in this Agreement, all
aspects of the production of the finished product by the Manufacturer shall be
under the Manufacturer's sole control. Product will be produced accordingly to
the formulations and specifications provided by the Contractor to the
Manufacturer. The Manufacturer will exercise full compliance in adhering to
those standards of quality established and communicated by the Contractor. The
Manufacturer is not responsible for the performance of the finished product. The
manufacturer is responsible for correctly adhering to the formulation and
assembly of product pursuant to Contractor's written specifications.
3.3 Powers as Manufacturer. The Contractor and the Manufacturer, agree that
their relationship is that of the contractor and the manufacturer and not that
of joint venturers, principals or agents, or franchiser and franchisee. Both are
independent contractors acting for their own accounts, and neither is authorized
to make any commitment or representation, express or implied, on the other's
behalf unless authorized to do so by the other in writing.
<PAGE>
3.4 Use of Trademarks and Trade Names. No right, title or interest in or to any
trademarks, trade names, slogans, labels and designs used by either the
Contractor or the Manufacturer, nor the goodwill connected, is conveyed by this
Agreement. The Manufacturer may, in connection with the promotion and sale of
the products pursuant to the terms of this Agreement, refer to the Contractor's
applicable trade names or trademarks provided that all such references are in
conformance with the Contractor's requirements regarding such use, as such
requirements are communicated to the Manufacturer in writing from time to time
by the Contractor.
3.5 Marketing Responsibility. The Contractor shall pursue vigorously sales
policies and procedures to realize the maximum sales potential for the products.
The Manufacturer agrees to similarly pursue sales in the CO@ market defined in
section 4.1.2
4. Manufacturing Rights
In recognition of the investment to be made by the Manufacturer in connection
with the manufacturing of the products, the parties agree to each of the
following provisions:
4.1.1. The Contractor hereby grants the Manufacturer the exclusive right to
manufacture the products in the United States. The Contractor is prohibited from
importing the products into the United States.
4.1.2 The Manufacturer reserves the rights to both manufacture and re-sell the
CO@ products without restriction in the industrual gas Industry, limited to, the
use of carbon dioxide in Dry Cleaning and related applications. the Manufacturer
may produce the products and re-sell to accounts in the CO2 market worldwide. It
is the intent of the parties to enter into a re-sellers agreement for CO2
products. The Contractor will utilize its best efforts to divert all
manufacturing requirements for CO2 applications to the Manufacturer.
4.1.3 The exclusive Manufacturing rights granted to the Manufacturer pursuant to
this Agreement terminates five years following the signing date of this
contract.
4.1.4 Other Products. The Contractor shall not sell any products in kit form
with specifications comparable to R-12, R-22 or CO2, unless manufactured by the
Manufacturer.
5. Manufacturer's Responsibilities
During the term of this Agreement, the Manufacturer agrees to the
following:
5.1 Manufacturing Orders. The Manufacturer shall manufacture the products based
on purchase orders presented from the Contractor and accepted by the
Manufacturer.
5.2 Reports. The Manufacturer shall deliver upon the request of the Contractor,
a monthly report showing the Manufacturer's current inventory of each product
(listed in units); (2) the quantity of each product shipped (3) the number of
returns and (4) other relevant information for the prior month as request from
time to time by the Contractor. The Manufacturer shall cooperate with the
Contractor to make the format, microcomputer environment, and coding of its
monthly records compatible with the Contractor's record-keeping system.
<PAGE>
5.3 Compliance with Laws. The Manufacturer shall comply with all material
applicable present and future federal, state, county, local and, where
necessary, foreign laws, ordinance and regulation relating to the sale of the
products.
6. Contractor's Rights and Responsibilities
6.1 Service Manual(s). Upon execution of this Agreement, the Contractor shall
provide the Manufacturer with manuals documenting the appropriate method(s) of
servicing/installing/ using the products). The Contractor is responsible for
purchasing and providing the Manufacturer with aerosol cans and location
identification tags to be packaged into the product kit and for all printed
materials and labels to be included in the assembly of the products.
6.2 Training. The Manufacturer will not provide training to the Contractor or
its customers.
6.3 System Documentation. The Contractor shall provide at no charge to the
Manufacturer copies of each technical publication document, including without
limitation, service and installation manuals that the Contractor prepares or
uses for the products during the Term of this Agreement and for five years
thereafter. The Manufacturer may use and/or reproduce and/or translate such
materials, in whole or in part, but shall reproduce and include any copyright
and proprietary notice of the Manufacturer on all copies of such materials.
6.4 Contractor Determination of Product Content. The Contractor reserves the
right to determine the contents of the product, including its specification,
features, and functions, as well as any documentation or related materials; (2)
change or terminate any of the specifications, features, or functions of the
products. Any changes made ot the product shall be indicated in writing to the
Manufacturer. The Manufacturer may cancel any orders for discontinued products
without liability. The cancellation is limited to only those orders placed by
the manufacturer on behalf of the Contractor that the Contractor then
discontinues the use of said raw material. The Contractor will be responsible
for payment to the Manufacturer for any discontinued raw materials or for any
product or service purchased by the Manufacturer on behalf of the Contractor.
The contractor will identify any hazardous components associated with the
manufacture or distribution of it's product by the Manufacturer.
<PAGE>
7. Purchase Orders
7.1 Initial Order. The Contractor will issue all instructions to Manufacturer in
the form of a confirmed purchase order. The Initial Order shall be
non-cancelable. The Manufacturer requires a 50% deposit, paid in advance, for
this order. The Contractor will provide to the Manufacturer certain documents in
order to establish a line of credit. The documents will include a credit
application and a copy of the Incorporation Certificate. The Manufacturer will
evaluate the application for the purposes of establishing a credit limit and
terms with the Contractor.
7.2 Subsequent Orders. All subsequent orders shall be in writing or if placed
orally, shall be confirmed in writing within three business days after such oral
order. All orders, whether in writing or verbal shall specify: (1) the quantity
and description of the products; (2) requested delivery dates (3) applicable
price; and (4) any special instructions. All orders shall be governed solely by
the terms and conditions of this Agreement. No additional or different
provisions contained in the Contractor's purchase orders or any other business
forms shall be of any force or effect whatsoever unless agreed to in writing by
the other party.
7.3 Manufacturer's Acceptance. All orders for products by the Contractors shall
be subject to acceptance by the Manufacturer and shall not be binding on the
Manufacturer until acceptance of the written purchase order by the Manufacturer
is confirmed in writing to the Contractor. The Manufacturer must evaluate the
terms of the purchase order to determine if the specified delivery date can be
accomplished. The Manufacturer will require a minimum production allowance of 12
weeks on the initial order and 8 weeks on all subsequent orders, subject to
change. Lead times will be reduced once Contractor is able to forecast annual
production requirements.
7.4 Controlling Terms. The terms and conditions of this Agreement shall apply to
each order accepted or shipped by the Manufacturer under this Agreement. Any
terms or conditions appearing on the face or reverse side of any purchase order,
acknowledgment, or confirmation that are different from or in addition to those
required under this Agreement shall not be binding on the parties, even if
signed and returned, unless both parties expressly agree in a separate writing
to be bound by such separate or additional terms and conditions.
7.5 Freight and Tax Charges. The Contractor shall pay the cost of freight and
any taxes, levies, duties or fees of any kind, nature or description whatsoever
applicable to the sale of any products by the Contractor. The Manufacturer shall
not be required to pay taxes for product which it provides the Contractor, by
the time of the submission of its purchase order to the Manufacturer, tax
exemption certificates or licenses acceptable to the appropriate taxing
authorities. In connection with the delivery of the products, the Contractor may
designate the carrier for shipment and the amount of insurance and nature of
coverage. If the Contractor fails to so designate any or all such items, the
Manufacturer, at its discretion, may specify any item not so designated.
<PAGE>
7.6 Acceptance Tests. The Contractor shall formulate, subject to the
Manufacturer's approval, Acceptance Test Procedures. The Contractor has the
right to conduct acceptance test on any of the products and may reject those
that fail to pass that test. Such rejection shall be evidenced by notice of
rejection to the Manufacturer, together with an indication of the basis for that
rejection. The Manufacturer shall have no obligations with respect to any
products properly manufactured by it pursuant to this Agreement.
8.0 Taxes. Prices to the Contractor do not include taxes of any nature.
8.1 Payment. After the initial order and based upon an established line of
credit, the Contractor shall pay the Manufacturer's invoices to the Contractor
within thirty days of the invoice date. The terms of any payments made to the
Manufacturer from the proceeds of letters of credit must be pre-approved by the
Manufacturer. The Contractor must maintain a current account with the
Manufacturer in order to have additional orders for product filled.
8.2 Pricing. The Contractor has agreed to pay the Manufacturer a price of $10.90
per kit for the initial order. The price of $10.90 will be guaranteed for a
period of (6) months with a minimum quantity of 5,000 kits. Pricing for orders
for less than 5,000 kits will be determined. Subsequent orders for less than
5,000 kits will be based on prevailing market prices at the time of the order.
9. Shipment, Risk of Loss and Delivery
9.1 Risk of Loss. Except as provided below, title to the products purchased
pursuant to this Agreement will pass upon delivery to the Contractor. The
Contractor assumes the risk of loss and damage of the products in transit from
the Contractor's shipping point to the point of destination.
9.2 Modifications. The Manufacturer shall not have the right to modify any of
the products, without the expressed written consent of the Contractor.
9.3 Shipment. All products shall be shipped by the Manufacturer F.O.B. Wayne,
New Jersey. Shipments shall be made to the Contractor's identified warehouse
facilities or freight forwarded to the end-user as specified by the Contractor.
Unless specified in the Contractor's order, the Manufacturer shall select the
mode of shipment and the carrier. The Contractor shall be responsible for and
shall pay all shipping, freight, and insurance charges, which charges the
Manufacturer may require the Contractor to pay in advance.
10.0 Disclaimer, No Other Warranty. The Manufacturer grants no warranties,
express or implied, by statute or otherwise. Manufacturer does warranty its
strict adherence to the contractors formulation and specification instructions.
<PAGE>
10.1 Limitation of Liability. The Manufacturer warrants and guarantees, it s
liability being limited to the purchase price of the products, strict compliance
with the expressed specifications of the Contractor in manufacturing the
products. The Manufacturer shall not be liable for the cost of procurement of
substitute goods by the customer or for an special, consequential or incidental
damages for breach of warranty.
10.2 Product Liability
10.3 Indemnification. The Manufacturer represents that it holds product
liability insurance for its operation and will provide the Contractor with proof
of same. The product liability insurance held by the Manufacturer insures
against bodily injury or property damage resulting from improperly manufactured
products. The Manufacturer will be liable for any claim resulting form the
Manufacturer's failure to adhere to the Contractor's formulation and
specifications. The Contractor shall indemnify and hold harmless the
Manufacturer for damages or expenses resulting from any claim, suit or
proceeding brought against the Manufacturer on the issue of product performance
or user liability. The Manufacturer agrees that the Contractor has the right to
defend, or at its option to settle, and the Contractor agrees that the
Contractor has the right to defend, or at its option ot settle, and the
Contractor agrees, at its own expense, to defend or at its option to settle, any
claim, suit or proceeding brought against the Manufacturer or its Customer on
the issue of product liability, subject to the limitation set forth in this
Agreement. The Contractor shall have sole control of any such action or
settlement negotiations, and the Contractor agrees to pay, subject to the
limitations of this Agreement set forth, any final judgment entered against the
Manufacturer or its Customer on such issue in any such suit or proceeding
defended by the Contractor. The Manufacturer agrees that the Contractor at its
sole option shall be relieved of the foregoing obligations unless the
Manufacturer or its Customer notifies the Contractor promptly in writing of such
claim, suit or proceeding and gives the contractor authority to proceed as
contemplated herein, and, at the Contractor's expense, gives the Contractor
proper and full information and assistance to settle and/or defend any such
claim, suit or proceeding.
10.4 Entire Liability. The foregoing provisions of this Section 10 state the
entire liability and obligations fo the Contractor and the exclusive remedy of
the Manufacturer and its Customers, with respect to any alleged product
liability suit related to the products or any part thereof.
11. Ownership Warrant and Indemnification
11.1 Contractor Ownership Warranty. The Contractor represents and warrants to
the Manufacturer that: (1) the products are the originals with the Contractor;
(2) the products do not infringe upon any patent, Copy right, trade secret or
other proprietary rights of others; (3) the Contractor has full power and
authority to grant the rights granted within this Agreement tot he Manufacturer;
and (4) the Contractor has not previously or otherwise granted any other rights
in the products to any third party the conflict with the rights in this
Agreement granted to the Manufacturer.
<PAGE>
11.2 Indemnification. The Contractor agrees to defend at its expense and hold
the Manufacturer harmless form any claim, demand, or suit against the
Manufacturer resulting form a breach of any of the warranties set forth above in
Section 11.1 and to pay any cost, damages, or expenses (including attorneys'
fees) arising from any such claim, demand, or suit. The Contractor shall have
sole control of the defense of such action and all negotiations for its
compromise or settlement. The Manufacturer shall timely notify the Contractor in
writing of any such claim, demand, or suit, and, at the Contractor's request and
expense, provide the Contractor with all available information, assistance and
authority to enable the Contractor to defend the same. The Contractor shall
indemnify the Manufacturer for all such costs, damages, and expenses as they are
incurred.
11.3 Continued Use. Following notice of a claim or demand or a threatened or
actual suit, the Contractor shall immediately, at its own expense, procure for
the Manufacturer the right to continue the use of the products subject to such
claim, demand or suit, or, having failed to obtain such rights, replace or
modify such products to make them non-infringing, or, having failed to replace
or modify the products, refund to the Manufacturer the purchase price of all
unsold products. If the Manufacturer elects to replace or modify any of the
products, such replacement or modification shall substantially meet the
performance and interface specifications of the replaced or modified products.
11.4 Modification of the Products. The Contractor shall have no liability for
any claim of infringement based on the Manufacturer's combination of the
products with products not supplied by the Contractor if such claim would have
been avoided by the use of the products without such specific products.
11.5 Survival of Warranties. The warranties and indemnities stated in this
Section 11 shall survive the expiration or termination of this Agreement.
12. Limitation of Liability
12.1 Limitation of Liability. The warranties contained in Section 10 and 11
above are in lieu of all other warranties and conditions expressed or implied,
including, but not limited to, those governing merchantability or fitness for a
particular purpose. In the event that, despite Section 10, Manufacturer is found
liable for damages based on any defect of nonconformity in the products, its
total liability for each defective product shall not exceed the discounted price
of such defective product.
12.2 Exclusion of Consequential Damages. In no event shall either party be
liable to the other or any dealer or end-user for any indirect, special or
consequential damages including, without limitation, lost profits, costs of
delay, any failure of delivery or liability to third party arising from any
source even if the party had been advised of the foreseeability of the same.
<PAGE>
13. Trademarks. The Contractor shall have and retain sole ownership of the
Trademarks, including the goodwill pertaining thereto. Subject to the
Manufacturer's compliance with the Contractor's standard cooperative advertising
policies, the Contractor hereby grants to the Manufacturer the right to use and
display the Trademarks solely in connection with and solely to the extent
reasonably necessary for the marketing, Manufacturing, and support of the
products in accordance with the terms and conditions of this Agreement.
14. Notification. The Manufacturer shall promptly notify the Contractor of (1)
any claims, allegations, or notification that its marketing, licensing, support,
or service of the products may or will infringe the Intellectual Property Rights
of any other person or entity; and (2) any determination, discovery, or
notification that any person or entity is or may be infringing the Intellectual
Property Rights of the Contractor. The Manufacturer shall n ot take any legal
action relating to the protection or defense of any Intellectual Property Rights
pertaining to the products without the prior written approval of the Contractor.
The Manufacturer shall assist in the production and defense of such Intellectual
Property Rights.
14.1 Infringement
14.1.1 If notified promptly in writing of and given sole control of the defense
and all related negotiations and settlements, the Contractor shall defend the
Manufacturer against any claim based on an allegation that a product supplied
under this Agreement infringes any United States Intellectual Property Rights.
The Contractor shall pay any resulting costs, damages, and attorney fees finally
awarded by a court with respect to any such claims.
14.1.2 Contractor shall not be liable to the Manufacturer for any claim arising
from or based upon the combination, operation, or use of any product with
equipment, data, or programming not supplied by the Contractor, or arising from
any alteration or modification of products.
14.1.3 The Contractor shall have no obligation to the Manufacturer with respect
to any infringement involving or concerning the products except as stated in
this Section 14.7.
15.1 Force Majeure. Neither party will be deemed in default of this Agreement to
the extent that performance of its obligations, or attempts to cure any breach,
are delayed or prevented by reason of circumstance beyond its reasonable
control, including without limitation fire, natural disaster, earthquake,
accident or other acts of God ("Force Majeure"), provided that the party seeking
to delay its performance gives the other written notice of any such Force
Majeure within 15 days after the discovery of the Force Majeure, and further
provided that such party uses its good faith efforts to cure the Force majeure
within 60 days of notification or will notify Contractor of it's inability to do
same.
<PAGE>
15.2 Settlement of Disputes
Each party acknowledges and agrees that, if there is any breach of this
Agreement, including without limitation, unauthorized use or disclosure of
Confidential Information or other information of the other party or failure ot
perform the terms of this contract, the matter will be resolved in accordance
with the laws and remedies of the State of New Jersey.
15.3 Proprietary Information. Each party acknowledges that it may be furnished
with or may otherwise receive or have access to information or material that
relates to past, present or future products, software, research development,
inventions, processes, techniques, designs or technical information and data,
and marketing plans. (The "Proprietary Information"). Each party agrees to
preserve and protect the confidentiality of the Proprietary Information and all
of its physical forms, whether disclosed to the other party before this
Agreement is signed or afterward, including the terms of this Agreement
15.4 Cumulative Rights. Any specific right or remedy provided in this Agreement
shall not be exclusive but shall be cumulative upon all other rights and
remedies set forth in this section and allowed under applicable law.
15.5 Governing Law. This Agreement shall be governed by the laws
of this State of New Jersey.
15.6 Severability. If any provision of this Agreement is found invalid or
unenforced according to its terms. Without limiting the previous, it is
expressly understood and agreed that each and every provision of this Agreement
that provides for a limitation of liability, disclaimer of warranties, or
exclusion of damages is intended by the parties to be severable and independent
of any other provision and to be enforced as such. Further, it is expressly
understood and agreed that if any remedy under this Agreement is determined to
have failed of its essential purpose, all other limitations of liability and
exclusion of damages set forth in this section shall remain in full force and
effect.
<PAGE>
15.7 Notices. All notices, demands or consents required or permitted under this
Agreement shall be in writing and shall be delivered or mailed certified return
receipt requested to the respective parties at the addresses set forth above or
at such other address as such party shall specify t the other party in writing.
Any notice required or permitted to be given by the provisions of this Agreement
shall be conclusively deemed to have been received on the day it is delivered to
that party by U.S. Mail with Acknowledgement of Receipt or by any commercial
courier providing equivalent acknowledgement of receipt. Captions and section
headings used in this Agreement are for convenience only and are not a part of
this contract and agree to and accept its terms and conditions. We are executing
this Agreement as of the day and year first written above.
Contractor Manufacturer
By: /s/Marc M. Scola By: /s/Jack Belluscio
- ------------------------ ---------------------
Marc M. Scola Jack Belluscio
Vice-President and General Counsel President
Date signed: October 21, 1998
EXHIBIT 99.13
MOTORS & ARMATURES, INC. ---------------------
250 Rabro Drive East |Purchase Order No. |
Hauppauge, New York 11788-4255 ---------------------
| 75303NYP |
---------------------
RESALE NUMBER
11-18/6943
PURCHASE ORDER
VENDOR SHIP TO
R-TEC TECHNOLOGIES MOTORS & ARMATURES, INC.
P.O. BOX 282 250 RABRO DRIVE EAST
ALLAMUCHY, NJ 07820 HAUPPAUGE, NEW YORK 11788
Merchandise received in excess of 10% over quantity will be subject to
return freight collect
- ------------------------------------------------------------------------
PURCHASE ORDERS NUMBER MUST APPEAR ON ALL INVOICES
PACKING LISTS, CONTAINERS AND CORRESPONDENCE
ORDER DATE DATE REQ'D VENDOR NUMBER
- ---------------------------------------------------------
11-20-98 68365
- ------------------------------------------------------------------------
ITEM MARS NO MANUFACTURER'S PART NO/DESCRIPTION QTY UNIT AMOUNT
- ----------------------------------------------------------------------
1 | 25101 |R-TECT R22 LEAK DETECTION KIT |5000|44.000 | 220000.00
| | | | |
| | | | |
| |SPECIAL INSTRUCTIONS | | |
| | | | |
| |PLEASE SHIP - ASAP | | |
| | | | |
| | | | |
| | | | |
| | TOTAL --- | | |220,000.00
| | | | |
| | | | |
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EXHIBIT 99.14
SHARE PURCHASE AGREEMENT
To: R-Tec Technologies, Inc., Escrow, P.O. Box 282, Allamuchy, New Jersey
07820.
Please issue shares of R-Tec Technologies, Inc.'s common stock in the
amount(s) and name(s) shown below. My signature acknowledges that I have
received and had an opportunity to read the Prospectus by which the shares are
offered, that I am purchasing for investment, that I am capable of evaluating
the merits and risks of the prospective investment, because my knowledge and
experience in financial and business matters and that the amount of my
investment is not more than 10% of my net worth.
Signature_____________________ Date:________________
Enclosed is payment for ___________ shares, at $8.00 per share, totaling
$___________________. Please make checks payable to "Bank of New York, Escrow,
R-Tec Technologies, Inc.," and indicate account #301472 in legend of check.
Register the shares in the following name(s) and amount(s):
Name Number of Shares
---- ----------------
As (Circle One):
Individual Joint Tenants Trust
Tenants in Common Corporation Other
For the person(s) who will be registered shareowner(s):
Mailing Address:
Telephone Number: Business: ( ) Home: ( )
Social Security or Taxpayer ID Number:
(PLEASE ATTACH ANY SPECIAL MAILING
INSTRUCTIONS OTHER THAN SHOWN ABOVE)
(YOU WILL BE MAILED A SIGNED COPY OF THIS AGREEMENT TO RETAIN FOR YOUR RECORDS.)
SUBSCRIPTION ACCEPTED BY R-TEC TECHNOLOGIES, INC.:
Philip Lacqua, Chief Executive Officer Date:
EXHIBIT 99.15
THE
BANK OF
NEW
YORK
----------------------------------------------------
STOCK TRANSFER AGENCY AGREEMENT
between
R-TEC TECHNOLOGIES, INC.
-----------------------------------------------------------------
and
THE BANK OF NEW YORK
Dated as of January , 1999
ACCOUNT NUMBER(S)____________________________
----------------------------------------------------
<PAGE>
STOCK TRANSFER AGENCY AGREEMENT
AGREEMENT, made as of January , 1999, by and between R-Tec
Technologies, Inc., a corporation organized and existing under the laws of the
State of New York (hereinafter referred to as the "Customer"), and THE BANK OF
NEW YORK, a New York trust company (hereinafter referred to as the "Bank").
WITNESSETH:
That for and in consideration of the mutual promises hereinafter set
forth, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases shall
have the following meanings:
1. "Business Day" shall be deemed to be each day on which the Bank is
open for business.
2. "Certificate" shall mean any notice, instruction, or other
instrument in writing, authorized or required by this Agreement to be given to
the Bank by the Customer which is signed by any Officer, as hereinafter defined,
and actually received by the Bank.
3. "Officer" shall be deemed to be the Customer's Chief Executive
Officer, President, any Vice President, the Secretary, the Treasurer, the
Controller, any Assistant Treasurer, and any Assistant Secretary duly authorized
by the Board of Directors of the Customer to execute any Certificate, as such
Certificate may be amended from time to time.
4. "Shares" shall mean all or any part of each class of the shares of
capital stock of the Customer which from time to time are authorized and/or
issued by the Customer and identified in a Certificate of the Secretary of the
Customer under corporate seal, as such Certificate may be amended from time to
time, with respect to which the Bank is to act hereunder.
ARTICLE II
APPOINTMENT OF BANK
1. The Customer hereby constitutes and appoints the Bank as its agent
to perform the services described herein and as more particularly described in
Schedule I attached hereto (the "Services"), and the Bank hereby accepts
appointment as such agent and agrees to perform the Services in accordance with
the terms hereinafter set forth.
2. In connection with such appointment, the Customer shall deliver the
following documents to the Bank:
(a) A certified copy of the Certificate of Incorporation or other
document evidencing the Customer's form of organization (the
"Charter") and all amendments thereto;
(b) A certified copy of the By-Laws of the Customer;
<PAGE>
(c) A certified copy of a resolution of the Board of Directors of the
Customer appointing the Bank to perform the Services and
authorizing the execution and delivery of this Agreement;
(d) A Certificate signed by the Secretary of the Customer specifying:
the number of authorized Shares, the number of such authorized
Shares issued and currently outstanding, and the names and
specimen signatures of all persons duly authorized by the Board
of Directors of the Customer to execute any Certificate on behalf
of the Customer, as such Certificate may be amended form time to
time;
(e) A specimen Share certificate for each class of Shares in the form
approved by the Board of Directors of the Customer, together with
a Certificate signed by the Secretary of the Customer as to such
approval and covenanting to supply a new such Certificate and
specimen whenever such form shall change;
(f) An opinion of counsel for the Customer, in a form satisfactory to
the Bank, with respect to the validity of the authorized and
outstanding Shares, the obtaining of all necessary governmental
consents, whether such Shares are fully paid and non-assessable
and the status of such Shares under the Securities Act of 1933,
as amended, and any other applicable law or regulation (i.e., if
subject to registration, that they have been register and that
the Registration Statement has become effective or, if exempt,
the specific grounds therefor);
(g) A list of the name, address, social security or taxpayer
identification number of each Shareholder, number of Shares
owned, certificate numbers, and whether any "stops" have been
placed; and
(h) An opinion of counsel for the Customer, in a form satisfactory to
the Bank, with respect to the due authorization by the Customer
and the validity and effectiveness of the use of facsimile
signatures by the Bank in connection with the countersigning and
registering of Share certificates of the Customer.
3. The Customer shall furnish the Bank with a sufficient supply of
blank Share certificates and from time to time will renew such supply upon
request of the Bank. Such blank Share certificate shall be properly signed, by
facsimile or otherwise, by Officers of the Customer authorized by law or by the
By-Laws to signed, by facsimile or otherwise, by Officers of the Customer
authorized by law or by the By-Laws to sign Share certificates, and, if
required, shall bear the corporate seal or facsimile thereof.
ARTICLE III
AUTHORIZATION AND ISSUANCE OF SHARES
1. The Customer shall deliver to the Bank the following
documents on or before the effective date of any increase, decrease or other
change in the total number of Shares authorized to be issued:
(a) A certified copy of the amendment to the Charter giving effect to
such increase, decrease or change;
2
<PAGE>
(b) An opinion of counsel for the Customer, in a form satisfactory to
the Bank, with respect to the validity of the Shares, the
obtaining of all necessary governmental consents, whether such
Shares are fully paid and non-assessable and the status of such
Shares under the Securities Act of 1933, as amended, and any
other applicable federal law or regulations (i.e., if subject to
registration, that they have been registered and that the
Registration Statement has become effective or, if exempt, the
specific grounds thereof); and
(c) In the case of an increase, if the appointment of the Bank was
therefore expressly limited, a certified copy of a resolution of
the Board of Directors of the Customer increasing the authority
of the Bank.
2. Prior to the issuance of any additional Shares pursuant to stock
dividends, stock splits or otherwise, and prior to any reduction in the number
of Shares outstanding, the Customer shall deliver the following documents to the
Bank:
(a) A certified copy of the resolutions adopted by the Board of
Director and/or the shareholders of the Customer authorizing such
issuance of additional Shares of the Customer or such reduction,
as the case may be;
(b) A certified copy of the order or consent of each governmental or
regulatory authority required by law as a prerequisite to the
issuance or reduction of such Shares, as the case may be, and an
option of counsel for the Customer that no other order or consent
is required; and
(c) An opinion of counsel for the Customer, in a form satisfactory to
the Bank, with respect to the validity of the Shares, the
obtaining of all necessary governmental consents, whether such
Shares are fully paid and non-assessable and the status of such
Shares under the Securities Act of 1933, as amended, and any
other applicable law or regulation (e.g., if subject to
registration, that they have ben registered and that the
Registration Statement has become effective, or, if exempt, the
specific grounds therefor).
ARTICLE IV
RECAPITALIZATION OR CAPITAL ADJUSTMENT
1. In the case of any negative stock split, recapitalization or other
capital adjustment requiring a change in the form of Share certificates, the
Bank will issue Share certificates in the new form in exchange for, or upon
transfer of, outstanding Share certificates in the old form, upon receiving:
(a) A Certificate authorizing the issuance of Share certificate in
the new form;
(b) A certified copy of any amendment to the Charter with respect to
the change;
(c) Specimen Share certificates for each class of Shares in the new
form approved by the Board of Directors of the Customer, with a
Certificate signed by the Secretary of the Customer as to such
approval;
3
<PAGE>
(d) A certified copy of the order or consent of each governmental or
regulatory authority required by law as a prerequisite to the
issuance of the Shares in the new form, and an option of counsel
for the Customer that the order or consent of no other
governmental or regulatory authority is required; and
(e) An opinion of counsel for the Customer, in a form satisfactory to
the Bank, with respect to the validity of the Shares in the new
form, the obtaining of all necessary governmental consents,
whether such Shares are fully paid and non-assessable and the
status of such Shares under the Securities Act of 1933, as
amended, and any other applicable law or regulation (i.e., if
subject to registration, that the Shares have been registered and
that the Registration Statement has become effective or, if
exempt, the specific grounds therefore).
2. The Customer shall furnish the Bank with a sufficient supply of
blank Share certificates in the new form, and from time to time will replenish
such supply upon the request of the Bank. Such blank Share certificates shall be
properly signed, by facsimile or otherwise, by Officers of the Customer
authorized by law or by the By-Laws to sign Share certificates and, if required,
shall bear the corporate seal or a facsimile thereof.
ARTICLE V
ISSUANCE AND TRANSFER OF SHARES
1. The Bank will issue Share certificates upon receipt of a Certificate
from an Officer, but shall not be required to issue Share certificates after it
has received from an appropriate federal or state authority written notification
that the sale of Shares ha been suspended or discontinued, and the Bank shall be
entitled to rely upon such written notification. The Bank shall not be
responsible for the payment of any original issue or other taxes required to be
paid by the Customer in connection with the issuance of any Shares.
2. Shares will be transferred upon presentation to the Bank of Share
certificates in form deemed by the Bank properly endorsed for transfer,
accompanied by such documents as the Bank deems necessary to evidence the
authority of the person making such transfer, and bearing satisfactory evidence
of the payment of applicable stock transfer taxes. In the case of small estates
where no administration is contemplated, the Bank may, when furnished with an
appropriate surety bond, and without further approval of the Customer, transfer
Shares registered in the name do the decedents where the current market value of
the Shares being transferred does not exceed such amount as may from time to
time be prescribed by the various states. The Bank reserves the right to refuse
to transfer Shares until it is satisfied that the endorsements on Share
certificates are valid and genuine, and for the purpose it may require, unless
otherwise instructed by an Officer of the Customer, a guaranty of signature by
an "eligible guarantor institution" meeting the requirements of the Bank, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as my be determinedly the Bank in addition to, or
in substitution for, STAMP, all in accordance with the Securities Exchange Act
of 1934, as amended. The Bank also reserves the right to refuse to transfer
Shares until it is satisfied that the requested transfer is legally authorized,
and it shall incur no liability for the refusal in good faith to make transfers
which the Bank, in its judgment, deems improper or unauthorized, until it is
satisfied that there is no basis to any claims adverse to such transfer. The
Bank may, in effecting transfers of Shares, rely upon those provisions of the
Uniform Act for the Simplification of Fiduciary Security Transfers or the
Uniform commercial Code, as the same may be amended from time to time,
applicable to the transfer of securities, and the Customer shall indemnify the
Bank for any act done or omitted by it in good faith in reliance upon such laws.
4
<PAGE>
3. All certificates representing Shares that are subject to restriction
on transfer (e.g., securities acquired pursuant to an investment representation,
securities held by controlling person, securities subject to stockholders'
agreement, etc.), shall be stamped with a legend describing the extent and
conditions of the restriction or referring to the source of such restriction.
The Bank assumes no responsibility with respect to the transfer of restricted
securities where counsel for the Customer advises that such transfer may be
properly effected.
ARTICLE VI
DIVIDENDS AND DISTRIBUTIONS
1. The Customer shall furnish to the Bank a copy of a resolution of its
Board of Directors, certified by the Secretary or any Assistant Secretary,
either (i) setting forth the date of the declaration of a dividend or
distribution, the date of accrual or payment, as the case may be, the record
date as of which shareholders entitled to payment, or accrual, as the case may
be shall be determined, the amount per Share of such dividend or distribution,
the payment date on which all previously accrued and unpaid dividends are to be
paid, and the total amount, if any, payable to the Bank on such payment date, or
(ii) authorizing the declaration of dividends and distributions on a periodic
basis and authorizing the Bank to rely on a Certificate setting forth the
information described in subsection (i) of this paragraph.
2. Prior to the payment date specified in such Certificate or
resolution, as the case may be, the Customer shall, in the case of a cash
dividend or distribution, pay the Bank on amount of cash, sufficient for the
Bank to make the payment, specified in such Certificate or resolution, to the
shareholders of record as of such payment date. The Bank will, upon receipt of
any purchase plan of the Customer, reinvest such cash dividends or distributions
in accordance with the terms of such plan, and (ii) in the case of shareholders
who are not participants in any such plan, make payment of such cash dividends
or distributions to the shareholders of record as of the record date by mailing
a check, payable to the registered shareholder, to the address of record or
dividend mailing address. The Bank shall not be liable for any improper payment
made in accordance with a Certificate or resolution described in the proceeding
paragraph. If the Bank shall not receive sufficient cash prior to the payment
date to make payments of any cash dividend or distribution pursuant to
subsection (i) and (ii) above to all shareholders of the Customer as of the
record date, the Bank shall, upon notifying the Customer, withhold payment to
all shareholders of the Customer as of the record date until sufficient cash is
provided to the Bank.
3. It is understood that the Bank shall in no way be responsible for
the determination of the rate or form of dividends or distributions due to the
shareholders.
4. It is understood that the Bank shall file such appropriate
information returns concerning the payment of dividends and distribution with
the proper federal, state and local authorities as the required by law to be
filed by the Customer but shall in no way be responsible for the collection or
withholding of taxes due on such dividends or distributions due to shareholders,
except and only to the extent required of it by applicable law.
ARTICLE VII
CONCERNING THE CUSTOMER
1. The Customer shall promptly deliver to the Bank written notice of
any change in the Officers authorized to sign Share certificates, Certificates,
notifications or requests, together with a specimen signature of each new
Officer. In the event any officer who shall have signed manually or whose
facsimile signature shall have been affixed to blank Share certificates shall
die, resign or be removed prior to assurance of such Share certificates, the
Bank may issue such Share certificates as the Share certificates of the Customer
notwithstanding such death, resignation or removal, and the Customer shall
promptly deliver to the Bank such approvals, adoptions or rectifications as may
be required by law.
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<PAGE>
2. Each copy of the Charter of the Customer and copies of all
amendments thereto shall be certified by the Secretary of State (or other
appropriate official) of the state of incorporation, and if such Charter and/or
amendments are required by law also to be filed with a county or other officer
or official body, a certificate of such filing shall be filed with a certified
copy submitted to the Bank. Each copy of the By-Laws and copies of all
amendments thereto, and copies of resolutions of the Board of Directors of the
Customer, shall be certified by the Secretary or an Assistant Secretary of the
Customer under the corporate seal.
3. Customer hereby represents and warrants:
(a) It is a corporation duly organized and validly existing under the
laws of New Jersey.
(b) This Agreement has been duly authorized, executed and delivered
on its behalf and constitutes the legal, valid and binding
obligation of Customer. The execution, delivery and performance
of this Agreement by Customer do not and will not violate any
applicable law or regulation and do not require the consent of
any governmental or other regulatory body except for such
consents and approvals as have been obtained and are in full
force and effect.
ARTICLE VIII
CONCERNING THE BANK
1. The Bank shall not be liable and shall be fully protected in acting
upon any oral instruction, writing or document reasonably believed by it to be
genuine and to have been given, signed or made by the proper person or persons
and shall not be held to have any notice of any change of authority of any
person until receipt of written notice thereof from an Officer of the Customer.
It shall also be protected in processing Share certificates which it reasonably
believes to bear the proper manual or facsimile signature of the duly authorized
Officer or Officers of the Customer and the proper counter signature of the
Bank.
2. The Bank may establish such additional procedures, rules and
regulations governing the transfer or registration of Share certificates as it
may deem advisable and consistent with such rules and regulations generally
adopted by bank transfer agents.
3. The Bank may keep such records as it deems advisable but not
inconsistent with resolution adopted by the Board of Directors of the Customer.
The Bank may delver to the Customer from time to time at its discretion, for
safekeeping or disposition by the Customer in accordance with law, such records,
papers, Share certificates which have been cancelled in transfer or exchange and
other documents accumulated in the execution of its duties hereunder as the Bank
may deem expedient, other than those which the Bank is itself required to
maintain pursuant to applicable laws and regulations, and the Customer shall
assume all responsibility for any failure thereafter to produce any record,
paper, cancelled Share certificate or other document so returned, if and when
required. The records maintained by the Bank pursuant to this paragraph which
have not been previously delivered to the Customer pursuant to the foregoing
provisions of this paragraph shall be considered to be the property of the
Customer, shall be considered to be the property of the Customer, shall be made
available upon request for inspection by the Officers, employees and auditors of
the Customer, and shall be delivered to the Customer upon request and in any
event upon the date of termination of this Agreement, as specified in Article IX
of this Agreement, in the form and manner kept by the Bank on such date of
termination or such earlier date as may be requested by the Customer.
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<PAGE>
4. The Bank may employ agents or attorneys-in-fact at the expense of
the Customer, and shall not be liable for any loss or expense arising out of, or
in connection with, the actions or omissions to act of its agents or
attorneys-in-fact, so long as the Bank acts in good faith and without negligence
or willful misconduct in connection with the selection of such agents or
attorneys-in-fact.
5. The Bank shall only be liable for any loss or damage arising out of
its own negligence or willful misconduct; provided, however, that the Bank shall
not be liable for any indirect, special, punitive or consequential damages.
6. The Customer shall indemnify and hold harmless the Bank from and
against any and all claims (whether with or without basis in fact or law),
costs, demands, expenses and liabilities, including reasonable attorney's fees,
which the Bank may sustain or incur or which may be asserted against the Bank
except for any liability which the Bank has assumed pursuant tot he immediately
preceding section. The Bank shall be deemed not to have acted with negligence
and not to have engaged in willful misconduct by reason of or as a result of any
action taken or omitted to be taken by the Bank without its own negligence or
willful misconduct in reliance upon (i) any provisions of this Agreement, I(ii)
any instrument, order or Share certificate reasonably believed by it to be
genuine and to be signed, countersigned or executed by any duly authorized
Officer of the Customer, (iii) any Certificate or other instructions of any
Officer, (iv) any opinion of legal counsel for the Customer or the Bank, or (v)
any law, act, regulation or any interpretation of the same even though such law,
act, or regulation may thereafter have been altered, changed, amended or
repealed. Nothing contained herein shall limit or in any way impair the right of
the Bank to indemnification under any other provision of this Agreement.
7. Specifically, but not by way of limitation, the Customer shall
indemnify and hold harmless the Bank from and against any and all claims
(whether with or without basis in fact or law), costs, demands, expenses and
liabilities, including reasonable attorney's fees, of any and every nature which
the Bank may sustain or incur or which may be asserted against the Bank in
connection with the genuineness of a Share certificate, the Bank's due
authorization by the Customer to issue Shares and the form and amount of
authorized Shares.
8. At any time the Bank may apply to an Officer of the Customer for
written instructions with respect to any matter arising in connection with the
Bank's duties and obligations under this Agreement, and the Bank shall not be
liable for any action taken or omitted to be taken by the Bank in good faith in
accordance with such instruction. Such application by the Bank for instructions
from an Officer of the Customer may, at the option of the Bank, set forth in
writing any action proposed to be taken or omitted to be taken by the Bank with
respect to its duties or obligations under this Agreement and the date on and/or
after which such action shall be taken, and the Bank shall not be liable for any
action taken or omitted to be taken in accordance with a proposal included in
any such action, the Bank has received written instructions in response to such
application specifying the action to be taken or omitted. The Bank may consult
counsel to the Customer or its own counsel, at the expense of the Customer, and
shall be fully protected with respect to anything done or omitted by it in good
faith in accordance with the advice or opinion of such counsel.
7
<PAGE>
9. When mail is used for delivery of non-negotiable Share certificates,
the value of which does not exceed the limits of the Bank's Blanket Bond, the
Bank shall send such non-negotiable Share certificates by first class mail, and
such deliveries will be covered while in transit by the Bank's Blanket Bond.
Non-negotiable Share certificates, the value of which exceed the limits of the
Bank's Blanket Bond, will be sent by insured registered mail. Negotiable Share
certificates will be sent by insured register mail. The Bank shall advise the
Customer of any Share certificates returned as undeliverable after being mailed
as herein provided for.
10. The Bank may issue new Share certificates in place of Shares
certificates represented to have been lost, stolen or destroyed upon receiving
instructions in writing from an Officer and indemnity satisfactory to the Bank.
Such instructions from the Customer shall be in such form as approved by the
Board of Directors of the Customer in accordance with applicable law or the
By-Laws of the customer governing such matters. If the Bank receives written
notification from the owner of the lost, stolen or destroyed Share certificate
within a reasonable time after he has notice of it, the Bank shall promptly
notify the Customer and shall act pursuant to written instructions signed by an
Officer. If the Customer receives such written notification from the owner of
the lost, stolen or destroyed Share certificate within a reasonable time after
he has notice of it, the Customer shall promptly notify the Bank and the Bank
shall act pursuant to written instructions signed by an Officer. The Bank shall
not be liable for any act done or omitted by it pursuant to the written
instructions described herein. The Bank may issue new Shares certificates in
exchange for, and upon surrender of, mutilated Share certificates.
11. The Bank will issue and mail subscription warrants for Shares,
Shares representing stock dividends, exchanges or splits, or act as conversion
agent upon receiving written instructions from an Officer and such other
documents as the Bank may deem necessary.
12. The Bank will supply shareholder lists to the Customer from time to
time upon receiving a request therefor from an Officer of the Customer.
13. In case of any requests or demands for the inspection of the
shareholder records of the Customer, the Bank will notify the Customer and
endeavor to secure instructions from an Officer a stop such inspection. The Bank
reserves the right, however, to exhibit the shareholder record to any person
whenever it is advised by its counsel that there is a reasonable likelihood that
the Bank will be held liable for the failure to exhibit the shareholder records
to such person.
14. At the request of an Officer, the Bank will address and mail such
appropriate notices to shareholders as the Customer may direct.
15. Notwithstanding any provisions of this Agreement to the contrary,
the Bank shall be under no duty or obligation to inquire into, and shall not be
liable for:
(a) The legality of the issue, sale or transfer of any Shares, the
sufficiency of the amount to be received in connection therewith,
or the authority of the Customer to request such issuance, sale
or transfer;
(b) The legality of the purchase of any Shares, the sufficiency of
the amount to be paid in connection therewith, or the authority
of the Customer to request such purchase;
(c) The legality of the declaration of any dividend by the Customer,
or the legality of the issue of any Shares in payment of any
stock dividend; or
8
<PAGE>
(d) The legality of any recapitalization or readjustment of the
Shares.
16. The Bank shall be entitled to received and the Customer hereby
agrees to pay to the Bank for its performance hereunder (i) out-of-pocket
expenses (including legal expenses and attorney's fees) incurred in connection
with the Agreement and its performance hereunder, and (ii) the compensation for
services as set forth is Schedule I.
17. The Bank shall not be responsible for any money, whether or not
represented by any check, draft or other instrument for the payment of money,
received by it on behalf of the Customer, until the Bank actually receives and
collects such funds.
18. The Bank shall have no duties or responsibilities whatsoever except
such duties and responsibilities as are specifically set forth in this
Agreement, and no covenant or obligation shall be implied against the Bank in
connection with this Agreement.
ARTICLE IX
TERMINATION
Either of the parties hereto may terminate this Agreement by giving to
the other party a notice in writing specifying the date of such termination,
which shall be not less than 60 days after the date of receipt of such notice.
In the event such notice is given by the Customer, it shall be accompanied by a
copy of a resolution of the Board of Directors of the Customer, certified by the
Secretary, electing to terminate this Agreement and designating a successor
transfer agent or transfer agents. In the event such notice is given by the
Bank, the Customer shall, on or before the termination date, deliver to the Bank
a coy of a resolution of its Board of Directors certified by the Secretary
designating a successor transfer agent or transfer agents. In the absence of
such designation by the Customer, the Bank may designate a successor transfer
agent. If the Customer fails to designate a successor Transfer agent and if the
Bank is unable to find a successor transfer agent, the Customer shall, upon the
date specified in the notice of termination of this Agreement and delivery of
the records maintained hereunder, be deemed to be its own transfer agent and the
Bank shall thereafter be relieved of all duties and responsibilities hereunder.
Upon termination hereof, the Customer shall pay to the Bank such compensation as
may be due to the Bank for any disbursements and expenses made or incurred by
the Bank and payable or reimbursalbe hereunder.
ARTICLE X
MISCELLANEOUS
1. The indemnities contained herein shall be continuing obligations of
the Customer, its successors and assigns, notwithstanding the termination of
this Agreement.
2. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Customer shall be sufficiently given if
addressed to the Customer and mailed or delivered to it at P.O. Box 282,
Allamuchy, New Jersey 07820, or at such other place as the Customer may from
time to time designate in writing.
3. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Bank shall be sufficiently given if addressed
to the Bank and mailed or delivered to it at its office at 101 Barclay Street
(22W), New York, New York 10286 or at such other place as the Bank may from time
to time designate in writing.
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<PAGE>
4. This Agreement may not be amended or modified in any manner except
by a written agreement duly authorized and executed by both parties. Any duly
authorized Officer may amend any Certificate naming Officers authorized to
execute and deliver Certificates, instructions, notices or other instruments,
and the Secretary or any Assistant Secretary may amend any Certificate listing
the shares of capital stock of the Customer for which the Bank performs Services
hereunder.
5. This Agreement shall extend to and shall be binding upon the parties
hereto and their respective successors and assigns; provided, however, that this
Agreement shall not be assignable by either party without the prior written
consent of the other party, and provided, further, that any reorganization,
merger, consolidation, or sale of assets, by the Bank shall not be deemed to
constitute an assignment of this Agreement.
6. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
7. This Agreement may be executed in any number of counterparts each of
which shall be deemed to be an original; but such counterparts, together, shall
constitute only one instrument.
8. The provisions of this Agreement are intended to benefit only the
Bank and the Customer, and no rights shall be granted to any other person by
virtue of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate officers, thereunto duly authorized and
their respective corporate seals to be hereunto affixed, as of the day and year
first above written.
Attest: R-TEC TECHNOLOGIES, INC.
/s/Phyllis Grippaldi By:/s/Marc M. Scola
- -------------------- ------------------------
Phyllis Grippaldi Name:Marc M. Scola, Esq.
Title:General Counsel and
Vice President
Attest: THE BANK OF NEW YORK
/s/ By:/s/Raymond Romanski
- --------------------- -----------------------
Name: Raymond Romanski
Title: VP
10
EXHIBIT 99.16
THE
BANK OF
NEW
YORK
----------------------------------------------------
SUBSCRIPTION ESCROW AGREEMENT
between
R-TEC TECHNOLOGIES, INC.
-----------------------------------------------------------------
and
THE BANK OF NEW YORK
Dated as of January 26 , 1999
ACCOUNT NUMBER(S) 301472
Short Title of Account R-TEC Technologies, Inc.
----------------------------------------------------
<PAGE>
ESCROW AGREEMENT
Escrow Agreement (the "Agreement"), dated as of January __, 1999, among
The Bank of New York, a New York banking corporation with its principal
corporate trust office at 101 Barclay Street, New York, New York 10286 (the
"Escrow Agent"), and R-Tec Technologies, Inc., a New Jersey corporation, with
its principal office at 61 Mallard Drive, P.O. Box 282, Allamuchy, New Jersey
07820 (the "Company").
WHEREAS, the Company intends to offer for sale (the "Offering") up to
3,750,000 shares of common stock, par value $8.00 per share of the Company in an
initial Public Offering under the Securities Act of 1933, as amended, pursuant
to its Prospectus dated January ___, 1999.
WHEREAS, the Company is expected to offer the stock on behalf of the
Company;
WHEREAS, the Company proposes to engage the Escrow Agent for the
purpose of receiving, depositing and holding in a segregated non
interest-bearing account all funds ("Proceeds" shall mean all funds wired into
the escrow account and funds resumed cleared from check deposits) from
subscribers for Units ("Subscribers") received in connection with the sale of
stock until such time as such funds are to be released to the Company or
returned to the Subscribers; and
WHEREAS, the Escrow Agent has agreed to act as escrow agent in
connection with the proposed subscription and sale of Units.
NOW, THEREFORE, it is agreed as follows:
Section 1. Establishment of Escrow Account; Deposits.
(a) The Escrow Agent shall promptly (and, in any case, on or
prior to the commencement of the Offering) cause to be opened a fully segregated
noninterest-bearing escrow account, which escrow account shall be entitled R-Tec
Technologies, Inc. - Escrow Account (the "Escrow Account") for the purpose of
holding in trust all Proceeds for the company and the Subscribers. The Company
shall, as to each Subscriber in connection with all proceeds received under the
Offering, instruct each subscriber to remit the purchase price in the form of
checks (which checks must be certified if remitted during the last five (5)
business days of the offering period) or wire transfers to (insert "the
Company") the Company for forwarding to the Escrow Agent as promptly as
possible. All such checks and wire transfers forwarded to the Escrow Agent shall
be accompanied by information identifying each Subscriber, subscription, the
Subscriber's social security or ID number and address. Wire transfers to the
Escrow Account shall be made in Federal Funds transferred as follows:
Bk of NYC
ABA No. 021000018
GLA 111-565
Cust A/C # 301472
A/C R-Tec Technologies
(b) On the terms and conditions of this Agreement, the Escrow Agent
shall deposit the Proceeds and any interest earned thereon in the Escrow
Account. The Proceeds and any interest earned thereon in the Escrow Account. The
Proceeds shall be invested as in accordance with this Agreement. All amounts
deposited in the Escrow Account shall be invested and reinvested in the manner
provided in Section 2 hereof.
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<PAGE>
(c) Except as and to the extent provided herein, the Escrow Agent shall
not be obligated nor, without the consent of the company, is it authorized to
accept instructions under Agreement directly from any Selected Dealer.
Section 2. Investment of Proceeds.
Proceeds (and any earnings thereon), and until such time as all
Proceeds and earnings thereon have bee disbursed from the Escrow Account as
provided in Section 4 and Section 5, shall be invested and reinvested by the
Escrow Agent without unreasonable delay and only in such obligations issued or
guaranteed by the United States Government or any agency thereof, or in such
commercial paper, or in such bank or trust company certificates of deposit, and
with such maturities, as shall be designated in writing fro time to time by the
Company, such writing to specify the particular investment. Temporarily
uninvested funds held hereunder shall be deposited in The Bank of New York
Deposit reserve. The Escrow Agent shall not be responsible for interest losses,
taxes or other charges on investments. Interest actually earned from the time
the Proceeds are deposited into the Escrow Account until the close of business
on the date preceding the date the proceeds are disbursed by the Escrow Agent as
provided herein shall be held intrust for the Subscribers and, upon the
occurrence of the conditions set forth in Section 4 and Section 5 hereof, shall
be payable in accordance with the provisions set forth in Section 5 hereof. If,
at the time the Escrow Agent is required to make a disbursement pursuant to
Section 5, the proceeds are invested as provided in this Section 2, the Escrow
Agent shall, in anticipation of such disbursement, sell or otherwise liquidate
such investments. Instructions from the Company as to any such investments or
the sale or other disposition thereof shall be confirmed in writing (but no
delay or failure by the Company to confirm in writing an instruction or failure
by the Company to confirm in writing an instruction given by telephone shall
effect the validity of such instruction or result in any liability to the Escrow
Agent for acting on such instruction).
Section 3. Acceptance or Rejection of Subscription.
As soon as practicable following receipt of each subscription, the
company will determine whether or not the subscription is to be accepted or
rejected in whole or in part.
With respect to each subscription which is to be accepted, the company
will notify the Escrow Agent of such acceptance. With respect to each
subscription which is to be rejected (in whole or in part), the company will
notify the Escrow Agent of such rejection in writing, and upon receipt of such
notification, the Escrow Agent will promptly as practicable transfer the amount
represented by such subscription reflected in part only) and issue a check in
the amount of the rejected Subscriber's subscription directly to the rejected
Subscriber.
Section 4. Disbursements from the Proceeds.
(a) If subscriptions of at least 625,000 shares ($5,000,000 U.S.) have
not been deposited in the Escrow Account and accepted by the Company on or
before the earlier of (i) _________________ or (ii) the date upon which the
Company elects to terminate the Offering (the "Termination Date") upon
instruction by the Company as to the amounts and recipients of the funds then
held in escrow, the Escrow Agent shall terminate the Escrow Account and return
the subscription funds to each Subscriber.
2
<PAGE>
(b) If subscriptions for at least 625,000 shares ($5,000,000) have been
deposited in the Escrow Account and accepted by the Company on or before the
Termination Date, pursuant to the instructions of the Company identifying the
Subscribers whose subscriptions are to be accepted, the Escrow Agent shall on
the date designated by the Company in such instructions (the "Interim Closing
Date") which date shall be at any time on or after the giving of such notice)
release to the Company all or a specified portion of the Proceeds held by the
Escrow Agent (including all accrued interest thereon) in the Escrow Account in
the manner described in Section 4(a). With respect to any date subsequent to the
Interim Closing Date on which the Escrow Agent is to release proceeds to the
Company, but no later than __________________, (the "Final Closing Date"),
pursuant to the instructions of the Company identifying the Subscribers whose
subscriptions are to be accepted on the Final Closing Date and delivered at any
time on or prior to such Final Closing Date, the Escrow Agent shall release to
the Company on such Final Closing Date all or the specified portion of the
Proceeds held by the Escrow Agent in the Escrow Account in the manner described
in Section 5(a).
3
<PAGE>
Section 5. Procedure for disbursement from the Escrow Account.
The proceeds held in the Escrow Account and interest earned thereon
shall be subject to, and distributed in accordance with, the following
provisions:
(a) On the Interim Closing Date and on the Final Closing Date, upon
satisfaction of the applicable requirements of Section 4 hereof, the Escrow
Agent shall (i) transfer by wire to an account designated by the Company the
Proceeds requested to be transferred on such date in the notice executed by the
Company, and (ii) the Escrow agent shall within 10 business days of the
applicable closing date transfer by check to each Subscriber any interest
actually earned on such Proceeds. At the time of such transfer, the Escrow Agent
shall confirm in writing to the Company the amount of interest earned for the
account of each Subscriber and the date such subscription was received.
(b) On the Interim Closing Date and on the Final Closing Date, the
Escrow Agent shall transfer by check the proceeds and all interest (if any)
earned thereon, of any Subscribers whose subscriptions were obtained by the
Company but rejected by the Company since the commencement of the Offering or
the most recent closing date (as applicable). At the time of such transfer, the
Escrow Agent shall identify in writing to the Company the amount of interest
earned for the account of each Subscriber and the date such subscription was
received.
(c) As soon as practicable after the Termination Date (but in no event
later than the 30th business day following the Termination Date), all proceeds
received by the Escrow Agent (other than proceeds previously disbursed or to be
distributed by the Escrow Agent pursuant to Section 5(a) or Section 5(b) shall
be returned by check directly to the Subscriber having provided such proceeds,
without deduction, penalty or expense to the Subscriber and together with each
such Subscriber's pro rata portion of the interest actually earned thereon. The
Escrow Agent shall notify the Company of the distribution of such funds to the
Subscribers.
(d) The Escrow Agent does not have any interest in the Escrowed
Property deposited hereunder but is serving as escrow holder only and having
only possession thereof. The Company shall pay or reimburse the Escrow Agent
upon request for any transfer taxes or other taxes relating to the Escrowed
Property incurred n connection herewith and shall indemnify and hold harmless
the Escrow Agent any amounts that it is obligated to pay in the way of such
taxes. Any payments of income from this Escrow Account shall be subject to
withholding regulations then in force with respect to Untied States taxes. The
parties hereto will provide the Escrow Agent with appropriate W-9 forms for tax
I.D., number certifications, W-8 forms for non-resident alien certifications. It
is understood that the Escrow Agent shall be responsible for income reporting
only with respect to income earned on investment of funds which are a part of
the Escrowed Property and is not responsible for any other reprint. This
paragraph and paragraph (9) shall survive notwithstanding any termination of
this Escrow Agreement or the resignation of the Escrow Agent.
Section 6. Termination of Escrow.
In the event of the release of all proceeds and all accrued interest in
accordance with Section 4 and Section 5 of this Agreement, this Agreement shall
terminate and the Escrow Agent shall be relieved of all responsibilities in
connection with the escrow deposits provided for in this Agreement, except
claims which are occasioned by its negligence, bad faith or willful misconduct.
4
<PAGE>
Section 7. Compensation of Escrow Agent.
(a) At the time of execution of this Agreement the Company shall pay
the Escrow Agent an acceptance fee of $1,500.00. In addition, the Company shall
pay Escrow Agent $15,000.00 annually, payable upon execution of this Agreement
and on each [Date] thereafter, for any and all services rendered by Escrow Agent
hereunder.
(b) The Company shall pay monthly an investment transaction fee of
$25.00 for each purchase or sale made by the Escrow Agent pursuant to Section 2.
(c) The Company shall reimburse the Escrow Agent upon request for all
expenses, disbursements, and advances incurred or made by the Escrow Agent in
implementing any of the provision of this Agreement, including compensation and
the expenses and disbursements of its counsel, except any such expense,
disbursement, or advance as may arise from its gross negligence or willful
misconduct.
The Company hereby grants to the Escrow Agent a lien on the
Proceeds such that, in the event that any and all charges payable under Section
7 and Section 8 shall not be timely paid by the Company, the Escrow Agent shall
have the right to pay itself from the proceeds the full amount owed, provided
that written notice of the Escrow Agent's intent to proceed under this Section 7
be given at least five (5) business days in advance of such action.
Section 8. Responsibilities of Escrow Agent; Notices.
(a) The Escrow Agent shall be under no duty to enforce
payment of any subscription which is to be paid to and held by it;
(b) The Escrow Agent shall be under no duty to accept funds,
checks, drafts or instruments for the payment of money from anyone other than
the Company or to give any receipt therefor except to the Company;
(c) The Escrow Agent shall be obligated to perform only such
duties as are expressly set forth in this Agreement. No implied covenants or
obligation shall be inferred from this Agreement against the Escrow Agent, nor
shall the Escrow Agent be bound by the provisions of any agreement among the
Company beyond the specific terms hereof.
(d) The Escrow Agent shall not be liable hereunder except for
its own gross negligence or willful misconduct and the Company agrees to
indemnify the Escrow Agent for and hold it harmless as to any loss, liability,
or expense, including attorney's fees and expenses, incurred without gross
negligence or willful misconduct on the part of the Escrow Agent and arising out
of or in connection with the Escrow Agent's duties under this Agreement.
Specifically and without limiting the foregoing, the Escrow Agent shall in no
event have any liability in connection with its investment, reinvestment or
liquidation, in good faith and in accordance with the terms hereof, of any
Escrowed Property held by it hereunder, including without limitation any
liability for any delay not resulting from gross negligence or willful
misconduct in such investment, reinvestment or liquidation, or for any loss of
income incident to any such delay.
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(e) the Escrow Agent shall be entitled to rely upon any order,
judgment, certification, instruction, notice, opinion or other writing delivered
to it in compliance with the provisions of this Agreement without being required
to determine the authenticity or the correctness of any fact stated therein or
the propriety or validity of service thereof. The Escrow agent may act in
reliance upon any instrument comporting with the provisions of this Agreement or
signature believed by it to be genuine and may assume that any person purporting
to give notice or receipt or advice or make any statement or execute any
document in connection with the provision hereof has been duly authorized to do
so.
At any time the Escrow Agent may request in writing any
instruction in writing from the Company, and may at its own option include in
such request the course of action it proposes to take and the date on which it
proposes to act, regarding any matter arising in connection with its duties and
obligations hereunder. The Escrow Agent shall not be liable for acting without
the company's consent in accordance with such a proposal on or after the date
specified therein, provided that the specified date shall be at least two (2)
business days after the Company receives the Escrow Agents request for
instructions and its proposed course of action, and provided that, prior to so
acting, the Escrow Agent has not received the written instructions requested.
(f) The Escrow Agent may act pursuant to the advice of counsel
chosen by it with respect to any matter relating to this Agreement and shall not
be liable for any action taken or omitted in accordance with such advice.
(g) The Escrow Agent makes no representation as to the
validity, value, genuineness or collectability of any security or other document
or instrument held by our delivered to it.
(h) The Escrow Agent shall not be called upon to advise any
party as to selling or retaining, or taking or refraining from taking any action
with respect to, any securities or other property deposited hereunder.
(i) No provision or this Agreement shall require the Escrow
Agent to expend or risk its own funds or otherwise incur any financial
liabilities in the performance of any of its duties hereunder.
(j) The Escrow Agent shall be deemed conclusively to have
given and delivered any notice required to be given or delivered if it is in
writing, signed by any one of its authorized officers and mailed, by express,
registered or certified mail addressed to:
The Company at:
R-Tec Technologies, Inc.
P.O. Box 282
61 Mallard Drive
Allamuchy, New Jersey 07820
Telephone: (908) 850-4466
Facsimile: (908) 850-4670
(k) The Escrow Agent shall be deemed conclusively to have
receive any notice required to be given or delivered to the Escrow Agent if it
is in writing, signed by any one of the authorized officers of the company,
mailed, by express, registered or certified mail addressed to and actually
received by:
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The Escrow Agent at:
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Attn: Insurance Trust & Escrow
Sharia Jones-Bey
Facsimile: (212) 815-7181
(l) the provision of Sections 7, 8 and 11 shall survive
termination of this Agreement and/or the resignation or removal of the Escrow
Agent.
Section 9. Resignation of Escrow Agent; Successor.
Notwithstanding anything to the contrary herein, the Escrow Agent may
resign at any time by giving at least 15 days written notice thereof. The
Company may remove the Escrow Agent at any time (with or without cause) by
giving at least 15 days written notice thereof. Within 10 days after receiving
such notice, the Company shall agree on and appoint a successor escrow agent at
which time the Escrow Agent shall either distribute the funds held in the Escrow
Account, less its fees, costs and expenses or other obligations owed to the
Escrow Agent as directed by the instructions of the Company or hold such funds,
pending distribution, until such fees, costs and expenses or other obligations
are paid. If a successor escrow agent has not been appointed or has not accepted
such appointment by the end of the 10 day period, the Escrow Agent may apply to
a court of competent jurisdiction for the appointment of a successor escrow
agent, or for other appropriate relief and the costs, expenses and reasonable
attorney fees which the Escrow Agent incurs in connection with such a proceeding
shall be paid by the Company.
Section 10. Dispute Resolution.
In the event of any dispute between or conflicting claims by or among
the Company or and/or any other person or entity with respect to any Proceeds
held in the Escrow Account, the Escrow Agent shall be entitled, at its sole
discretion, to refuse to comply with any and all claims, demands or instructions
with respect to such Proceeds so long as such dispute or conflict shall
continue, and the Escrow Agent shall not be or become liable in any way to the
Company for the Escrow Agent's failure or refusal to comply with such
conflicting claims, demands or instructions, except to the extent under the
circumstances such failure would constitute gross negligence, bad faith or
willful misconduct on the part of the Escrow Agent. The Escrow Agent shall be
entitled to refuse to act until, at its sole discretion, either such conflicting
or adverse claims or demands shall have been finally determined in a court of
competent jurisdiction or settled by agreement between the conflicting parties
as evidenced in writing, satisfactory to the Escrow Agent, or the Escrow agent
shall have received security or an indemnity satisfactory to the Escrow Agent
sufficient to save the Escrow Agent harmless from and against any and all loss,
liability or expenses which the Escrow Agent may incur by reason of the Escrow
agent's acting. The Escrow Agent may in addition elect at its sole discretion to
commence an interpleader action or seek other judicial relief or orders as the
Escrow Agent may deem necessary.
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Section 11. Extraordinary Expense.
It is understood that fees and usual charges agreed upon for the Escrow
Agent's services shall be considered compensation for its services as
contemplated by this Agreement, and if the Escrow Agent rendered any service not
provided for in this Agreement, or if there is any assignment of any interest in
the subject matter of this Agreement by the Company or any modification of this
Agreement, or if any controversy arises under this Escrow Agreement or the
Escrow Agent is made a party to any litigation pertaining to this Agreement or
the subject matter of this Agreement, the Escrow Agent shall be reasonably
compensated for those extraordinary services and reimbursed for all costs and
expenses occasioned by such services, controversy or litigation and the Company
hereby promises to pay such sums upon demand.
Section 12. Governing Law.
This agreement shall be governed and construed in accordance with the
laws of the State of New York without reference to the principles thereof
respecting conflicts of laws. This Agreement may be executed in counterparts,
each of which so executed shall be deemed an original , and said counterparts
together shall constitute one and the same instrument.
Section 13. Maintenance of Record.
The Escrow Agent shall maintain accurate records of all transactions
hereunder. Promptly after the termination of this Agreement, and as may from
time to time be reasonably requested by the Company before such termination, the
Escrow Agent shall provide the Company with a copy of such records, certified by
the Escrow Agent to be a complete and accurate account of all transactions
hereunder. The authorized representatives of the company shall also have access
to the Escrow Agent's gooks and records to the extent relating to its duties
hereunder, during normal business hours upon notice to the Escrow Agent.
Section 14. Miscellaneous.
(a) Nothing in this Agreement is intended or shall confer upon
anyone other than the parties any legal equitable right, remedy or claim.
(b) The invalidity of any portion of this agreement shall not
affect the validity of the remainder hereof.
(c) This Agreement is the final integration of the agreement
of the parties with respect to the matters covered by it and supersedes any
prior understanding or agreement, oral or written, with respect thereto.
(d) The rights and obligations of each party hereto may not be
assigned or delegated to any other person without the written consent of the
other parties hereto. Subject to the foregoing, the terms and provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
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(e) No printed or other material in any language, including
prospectuses, notices, reports, and promotional material which mentions "The
Bank of New York" by name or the rights, powers, or duties of the Escrow Agent
under this Agreement shall be issued by any other parties hereto, or on such
party's behalf, without the prior written consent of Escrow Agent.
R-TEC TECHNOLOGIES, INC.
Dated: January 26, 1999 By: /s/MARC M. SCOLA
----------------------
MARC M. SCOLA, ESQ.
Vice President
and General Counsel
THE BANK OF NEW YORK
Dated: January 27, 1999 By: /s/SHARIA JONES-BEY
----------------------
SHARIA JONES-BEY
Assistant Treasurer
9
EXHIBIT 99.17
AGREEMENT
THIS AGREEMENT, made as of the 24th day of October, 1998, by and
between R-TEC TECHNOLOGIES, INC., A New Jersey Corporation with a business
address at 290 Green Road, Sparta, New Jersey 07871, hereinafter the "Company"
and MARC M. SCOLA, having an address at 61 Mallard Drive, Allamuchy, New Jersey
07820 and PHILIP LACQUA, having an address at 1127 83rd Street, Brooklyn, New
York 11228 and NANCY VITOLO, individually having an address at 290 Green Road,
Sparta, New Jersey 07871, hereinafter called "Individuals".
WHEREAS, the Individuals have advanced numerous amounts of money to
finance the Company both after its date of incorporation of October 22, 1998 and
prior to its incorporation for several years. The Company guarantees that all
expenses advanced by the individuals both prior to and after the date of
incorporation will be reimbursed to each individual. The Company will attempt to
reimburse each individual lump sum as soon as it is financially able.
Some of the expenses that will be reimbursed, but not limited to are as
follows:
Attorneys Fees, Accountants Fees, Office Leases, etc.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the date first above written.
Witness:
/s/MARC M. SCOLA
- --------------------- --------------------------
MARC M. SCOLA,
Individually
Witness:
/s/PHILIP LACQUA
- --------------------- --------------------------
PHILIP LACQUA,
Individually
Witness:
/s/NANCY VITOLO
- --------------------- --------------------------
NANCY VITOLO,
Individually
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AGREEMENT - PAGE TWO
Witness: R-TEC TECHNOLOGIES, INC.
_____________________ By:/s/NANCY VITOLO
------------------------
NANCY VITOLO,
Secretary
Witness: R-TEC TECHNOLOGIES, INC.
_____________________ By:/s/MARC M. SCOLA
------------------------
MARC M. SCOLA,
Vice President and
General Counsel
Witness: R-TEC TECHNOLOGIES, INC.
_____________________ By:/s/PHILIP LACQUA
------------------------
PHILIP LACQUA,
President
11
