UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported) January 14, 1999
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(December 31, 1998)
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COMTEC INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
New Mexico 0-12116 75-2456757
(State or other (Commission (IRS Employer
Jurisdiction File Number) Identification No.)
Of Incorporation)
9350 East Arapahoe Road, Suite 340, Englewood, Co. 80112
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 662-
8373
This Document consists of 9 pages
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Item 2: Acquisition or Disposition of Assets
Disposition of Assets
On December 31, 1998 the Registrant disposed of six (6) giant
light-emitting diode (LED) screens by sale to Lanstar Computer
Products, Inc., a Texas Corporation, located in Dallas, Texas. The
giant LED screens are used to provide computer active light
presentation programs, adaptable for indoor or outdoor use for
sporting events, advertising displays and other theatrical
applications. Pursuant to the Purchase Agreement entered into
between the Registrant and Lanstar Computer Products, Inc., the LED
screens were sold to Lanstar Computer Products, Inc. in exchange
for a Promissory Note payable to the Registrant in the amount of
two million four hundred thousand dollars ($2,400,000). The
promissory note is to be secured by an agreement utilizing the
assets sold as security for the promissory note. The entire
principal of the promissory note is due December 31, 1999. The
promissory note, a general obligation of Lanstar Computer Products,
Inc., bears simple interest at the rate of eight percent (8%) per
annum payable quarterly. Quarterly payments of interest in the
amount of $48,000 are scheduled for payment on April 15, 1999, July
15, 1999 and October 15, 1999, with the entire principal balance
and all accrued interest due and payable on December 31, 1999. The
purchase price and terms were determined through negotiations
between the respective management of the buyer and seller.
The Buyer, Lanstar Computer Products, Inc., is a Texas Corporation
located at 13707 Gamma Road, Dallas, Texas 75244. Prior to this
disposition, neither the Registrant, nor any of its subsidiaries,
directors, officers or persons associated with the Registrant's
officers and directors had any relationship with Lanstar Computer
Products Inc. or any of its officers or directors. Lewis D. Rowe,
who is not an officer or director of the Registrant, but who is
listed as an affiliate of the Registrant in the Registrants June
30, 1997 Form 10KSB as a person known by the Registrant to own
beneficially more than 5% of the Registrant's .001 par value common
stock, may also be considered an to be an affiliate of Lanstar
Computer Products, Inc.
As was reported in the Registrant's 8K dated April 6, 1998, the
Registrant initially obtained possession of the six (6) giant
light-emitting diode (LED) screens on approximately March 31, 1997
through agreements to acquire for future issuance of common stock
in a nonpublic exchange. That agreement was satisfied by issuance
of 5,000,000 shares of the Registrant's .001 par value common stock
and warrants to purchase 5,000,000 shares of the Registrant's .001
par value common stock at an exercise price of $2.90 per share.
The Registrant recorded the LED screen assets at $1,300,000 in the
Registrant's unaudited March, 1998 financial statements. The
Registrant had intended through a wholly owned subsidiary,
International Media Group, Ltd., ("IMG") to lease out the screens
for short-term (one to six week) events. Efforts at leasing and
utilizing the LED screens resulted in substantial operating losses
to the Registrant's subsidiary, IMG, through which leasing and
operation of the LED screens was to take place. IMG is currently
inactive. As reported in the Registrant's 10KSB for the year ended
June 30, 1997, the LED Screens had been on consignment for sale
since August 1998.
Exhibits
Exhibit 1. Purchase Agreement
Exhibit 2. Promissory Note
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SIGNATURES
ComTec International, Inc.
---------------------------
(Registrant)
Date: January 14, 1999
s/s Gordon Dihle
________________________________________
Gordon Dihle - Authorized Officer, CFO
and Secretary.
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Exhibit 1. 8K (ComTec International, Inc.)
PURCHASE AGREEMENT
This Purchase Agreement hereinafter referred to as "Agreement"
is made this day by and between ComTec International, Inc. a
corporation dully existing and organized pursuant to the laws of
the State of New Mexico (hereinafter "ComTec" or "Seller") with its
current place of business at 9350 East Arapahoe Road Suite 340
Englewood Colorado 80112 and Lanstar Computer Products, Inc., a
Texas corporation (hereinafter "Lanstar") with its current place of
business at 13707 Gamma Rd., Dallas, Texas 75244 upon the following
terms and conditions:
WHEREAS Lanstar desires to purchase certain inventory from ComTec
and ComTec desires to liquidate and sell such inventory
NOW THEREFORE, for and in consideration of the mutual premises
herein contained, Lanstar agrees to purchase and acquire from
ComTec and ComTec agrees to sell, convey, transfer and assign to
Lanstar, the tangible assets previously delivered to Lanstar,
hereinafter "Assets" as further described in Exhibit A attached
hereto for and in consideration of the sum of $2,400,000 (Two
Million Four Hundred Thousand Dollars) hereinafter "Purchase Price"
to be paid as outlined hereinbelow.
In full consideration for the purchase of the Assets and
ComTec' s execution and delivery of this Agreement and the
consummation of the transaction contemplated hereby the Parties
hereto agree that the full and complete consideration of the entire
Purchase Price of the Assets to be paid by Lanstar to ComTec in
accordance herewith shall be paid by the issuance of a Promissory
Note (hereinafter "Note") in the amount of $2,400,000 (Two Million
Four Hundred Thousand Dollars) bearing simple interest at the rate
of eight percent (8%) payable quarterly with the entire principal
and all accrued interest due one (1) year from the commencement of
the Note. Said Note being secured by the Assets with a Security
Agreement and being in substantially the same form as the Note
attached hereto as Exhibit B and Security Agreement attached hereto
as Exhibit C.
ComTec represents and warrants to Lanstar as follows:
ComTec is a Corporation dully organized, validly existing and in
good standing under the laws of New Mexico and is qualified and in
good standing in any County, State or Province in which it is
required to be so qualified, and has all necessary corporate power
and authority to carry, on its business as now conducted and to own
or lease and operate its properties, and to execute, deliver and
perform its obligations hereunder. ComTec shall and will take all
corporate action necessary to properly authorize and execute this
Purchase Agreement.
This Agreement constitutes the valid and legally binding obligation
of ComTec. ComTec's execution and delivery of this Agreement and
its consummation of the transaction contemplated hereby has been
duly authorized by all necessary action on the part of its board of
directors and/or shareholders and will not conflict with or result
in any violation of or default under any provisions of the charter
or by-laws of ComTec.
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ComTec has good and marketable title to all properties assets,
subject to no mortgage, pledge, lien, conditional sales agreement,
encumbrances or charge except as disclosed. The legal and
beneficial interests in the Assets are owned exclusively by ComTec.
ComTec warrants and represents that no material agreement,
written or oral, to which it is a party exists which directly
affects the Assets, or the transaction contemplated hereunder.
Lanstar represents and warrants to ComTec as follows:
Lanstar is a Corporation dully organized, validly existing and in
good standing under the laws of Texas and is qualified and in good
standing in any County, State or Province in which it is required
to be so qualified, and has all necessary corporate power and
authority to carry, on its business as now conducted and to own or
lease and operate its properties, and to execute, deliver and
perform its obligations hereunder. Lanstar shall and will take all
corporate action necessary to properly authorize and execute this
Purchase Agreement, the Promissory Note and Security Agreement.
This Agreement constitutes the valid and legally binding obligation
of Lanstar. Lanstar's execution and delivery of this Agreement and
its consummation of the transaction contemplated hereby has been
duly authorized by all necessary action on the part of its board of
directors and/or shareholders and will not conflict with or result
in any violation of or default under any provisions of the charter
or by-laws of Lanstar.
Lanstar acknowledges that it has had the opportunity to inspect the
Assets, that it is aware that the Assets may require software
updates and/or maintenance and repairs, and that it now has
possession of the Assets.
Lanstar accepts the Assets "as is" with no warranty from ComTec
other than the representations and warranties contained in this
agreement.
GENERAL PROVISIONS
A breach of any of the representations or warranties contained
herein shall give rise to a cause of action against the breaching
party for all damages proximately caused as a result of such a
breach of any of the representations or warranties contained
herein.
In the event of any litigation between the parties concerning the
assets, this Agreement or the rights and duties of either party in
relation thereto, the prevailing party. in such litigation shall be
entitled, in addition to such other relief as may be granted, to a
reasonable sum as and for attorneys fees incurred in such
litigation
The parties hereto covenant and agree that they will execute such
other and further instruments and documents as are or may become
necessary, or convenient to memorialize the rights and obligations
created by this Agreement.
This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, executors,
administrators, legal representatives , and assigns.
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Any and all modifications of this Agreement shall not be valid
unless in writing and signed by the party to be charged with the
modification.
This Agreement shall be construed under and in accordance with the
laws of the State of Colorado, and all obligations of the parties
created hereunder are performable in Arapahoe County, Colorado. The
parties specifically stipulate the venue for any action brought
hereunder is mandatory in Arapahoe County, Colorado.
Seller:
ComTec International, Inc.
By: s/James Krejci
_______________________________
James Krejci
Its: Chief Executive Officer and Director
Purchaser:
Lanstar Computer Products, Inc.
By: s/Maxie Smith
-------------------------------
Maxie Smith, CEO 12/30/98
Its: Chief Executive Officer
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Exhibit 2. 8K (ComTec International, Inc.)
PROMISSORY NOTE
December 31, 1998 - Englewood, Colorado USA
$2,400,000
FOR VALUE RECEIVED, the sufficiency of which is hereby
acknowledged, Lanstar Computer Products, Inc. a Texas Corporation
which principal place of business is located at 13707 Gamma Rd.,
Dallas, Texas 75244 ("Lanstar" or "Maker"), promises to pay to the
order of ComTec International, Inc. or its assigns, (hereinafter
"Payee") at 9350 East Arapahoe Road, #340, Englewood, Colorado
80112, or at such other place as any Holder of this Promissory Note
(hereinafter "Promissory Note") may designate in writing, the sum
of Two Million Four Hundred Thousand Dollars ($2,400,000).
This Promissory Note is due and payable as follows:
The entire Principal together with all accrued interest shall
be due and payable one year from the date of this promissory
note. Simple interest shall accrue at the rate of eight
percent (8%) payable quarterly. Payments of interest only
shall be due and payable, in full, in quarterly installments
of $48,000 due on the 15th day of April 1999, July 1999 and
October 1999.
The indebtedness created by this Promissory Note is secured by
the collateral ("Collateral") pledged pursuant to that certain
Security Agreement of even date herewith, executed by Lanstar as
debtor thereunder and in favor of ComTec as Secured Party
(hereinafter the "Security Agreement").
This Promissory Note represents a general obligation of Maker.
Liability on this Promissory Note shall be recourse only to general
assets of Maker and shall be non-recourse to the shareholder and
officers thereof. Maker and Payee specifically acknowledge that no
personal liability shall attach to any corporate officer or
individual executing this promissory note.
Maker will be in default if any of the following occurs:
a. Maker fails to make any payment when due.
b. Maker breaks any promise Maker has made to Payee as set
forth in this Promissory Note, that certain Security
Agreement, or that certain Purchase Agreement or Maker fails
to perform promptly at the time and strictly in the manner
provided in this Promissory Note, that certain Security
Agreement or that certain Purchase Agreement.
c. Any representation or statement made or furnished to
Payee by Maker or on Maker's behalf, as relating to this
Promissory Note, is materially false or misleading.
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d. Maker becomes insolvent, a receiver is appointed for or
any proceeding is commenced either by Maker or against Maker
under any bankruptcy or insolvency laws.
Upon default, Payee may declare the entire indebtedness,
including the unpaid principal balance on this Promissory Note, all
accrued unpaid interest and all other amounts, costs and expenses
for which Maker is responsible under this Promissory Note or any
other agreement with Payee pertaining to this loan, immediately
due, without notice, and the Maker will pay that amount. Payee may
hire an attorney to help collect this Promissory Note if Maker does
not pay, and Maker will pay Payee's reasonable attorneys' fees.
Maker also will pay Payee all other amounts actually incurred by
Payee as court costs, lawful fees for filing, recording, or
releasing to any public office any instrument securing this loan;
the reasonable cost actually expended for repossessing, storing,
preparing for sale, and selling any security; and fees for noting
a lien on or transferring a certificate of title to any titled
collateral offered as security for this loan.
In the event of a default, from the date of default by Maker,
interest shall thereafter accrue at the rate of eighteen percent
(18%) per annum until the Note is fully paid.
If this Promissory Note is placed in the hands of an attorney
for collection after default, or if all or any part of the
indebtedness represented hereby is proved established or collected
in any court or in any bankruptcy receivership, debtor relief,
probate or other court proceedings, the Maker agrees to pay
reasonable attorney's fees and collection costs to the Payee(s)
hereof in addition to the principal and interest payable hereunder.
The inclusion of specific default provisions or rights of
Payee shall not preclude Payee's rights to declare payment of this
Promissory Note on its terms pursuant to common law or any
applicable statute. If any part of this Promissory Note cannot be
enforced this fact will not affect the remainder of the Promissory
Note that is enforceable. In particular, this section means (among
other things) that Maker does not agree or intend to pay, and Payee
does not agree or intend to contract for, charge, collect, take,
reserve or receive (collectively referred to herein as "charge or
collect"), any amount in the nature of interest or in the nature of
a fee for this loan, which would in any way or event (including
demand, prepayment, or acceleration) cause Payee to charge or
collect more for this loan that the maximum Payee would be
permitted to charge or collect by Federal law or the laws of the
State of Colorado (as applicable). Any such excess interest or
unauthorized fee shall, instead of anything stated to the contrary,
be applied first to reduce the principal balance of this loan, and
when the principal has been paid in full, be refunded to Maker.
The right to accelerate maturity of sums due under this Promissory
Note does not include the right to accelerate any interest that has
not otherwise accrued on the date of such acceleration, and Payee
does not intend to charge or collect any unearned interest in the
event of acceleration. All sums paid or agreed to be paid to Payee
for the use, forbearance or detention of sums due hereunder shall,
to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of the loan evidenced
by this Promissory Note until payment in full so that the rate or
amount of interest on account of the loan evidenced hereby does not
exceed the applicable usury ceiling. Payee may delay or forgo
enforcing any of its rights or
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remedies under this Promissory Note without losing them. Maker and
any other persons who signs, guarantees or endorses this Promissory
Note, to the extent allowed by law, waive presentment, demand for
payment, protest, notice of dishonor, notice of intent to
accelerate the maturity of this Promissory Note, and notice of
acceleration of the maturity of this Promissory Note Upon any
change in the terms of this Promissory Note, and unless otherwise
expressly stated in writing, no party who signs this Promissory
Note, whether as Maker, guarantor accommodation Maker or endorser,
shall be released from liability. All such parties agree that Payee
may renew, extend (repeatedly and for any length of time) or modify
this loan, or release any party or guarantor or collateral; or
impair, fail to realize upon or perfect Payee's security interest
in the collateral without the consent of or notice to anyone.
This Promissory Note may be prepaid in whole or in part
without premium or penalty. The indebtedness incurred hereunder may
be extended or renewed at the option of the Payee upon terms agreed
upon in writing by the Maker and Payee without the consent of any
Guarantor. The rights and obligations of Maker under this
Promissory Note are fully assignable in whole or in part to any
other third party.
If default is made in the payment of any installment of
interest due under this Promissory Note the entire principal
balance owing hereon shall at once become due and payable at the
option of the Payee(s) of this Promissory Note upon written notice
of acceleration to the Maker. Failure to exercise this option shall
not constitute a waiver of the right to exercise the same in the
event of any subsequent default.
This Promissory Note shall be governed by and construed in
accordance with the Laws of the State of Colorado and all
obligations of the parties created hereunder are performable in the
County of Arapahoe, State of Colorado. Any legal proceedings
instituted under this Promissory Note shall be brought in the
County of Arapahoe, State of Colorado and the parties hereby agree
and specifically stipulate that venue for any action brought herein
is mandatory in the County of Arapahoe, State of Colorado.
PROMISSORY NOTE EXECUTED this 31 day of December, 1998.
Lanstar Computer Products, Inc.
By: s/Maxie Smith
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Maxie Smith
Its: Chief Executive Officer
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