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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
THERMALTEC INTERNATIONAL, CORP.
(Name of small business issuer in its charter)
Delaware 11-7255619
(State or jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
68A Lamar Street, W. Babylon, New York 11704
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, (516) 643-2285
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
- - ---------------------------------- -------------------------------------------
Common Shares par value $.0001 OTC:BB
- - ---------------------------------- -------------------------------------------
Securities to be registered under 12(g) of the Act:
- - --------------------------------------------------------------------------------
(Title of Class)
- - --------------------------------------------------------------------------------
(Title of Class)
Potential persons who are to respond to the collection of information
contained in this form are not required to respond unless the form
displays a currently valid OMB control number.
Total Number of Pages____
Exhibit List - Page___
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THERMALTEC INTERNAUONAL, CORP.
TABLE OF CONTENTS
Management Discussion & Analysis or Plan of Operation .......................3
Business.....................................................................6
Principal Shareholders......................................................12
Management..................................................................13
Certain Transactions........................................................14
Description of Securities...................................................16
Dividend Policy.............................................................18
Stock Transfer Agent........................................................18
Legal Matters...............................................................18
Index to Financial Statements. ............................................F-1
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MANAGEMENT DISCUSSION OF ANALYSIS OF CONDITION OR PLAN OF OPERATIONS
We have established as our goals the development of facilities for thermal
spray coating, machine overhaul and other business enterprises in North America
and Central America.
The primary business franchises are the machine overhaul business of
Thermaltec de Costa Rica, S.A. (TCR) and the operation at West Babylon, New
York. TCR is the industry leader in thermal spray in Central America and is
poised to expand into other related fields in the Central American market. It is
fully operational and is staffed with metallurgists and machinists; they have
developed a customer base of over 300 industrial firms. Market acceptance is
excellent and continues to improve. The West Babylon operation of TTI has
developed thermal spray alternative technology to chrome plating. The latter is
a toxic process; TTI had developed equipment, processes and operating parameters
for the application of coatings superior to chrome plating. This is being done
without the environmental pollution problems of the plating process. Thermaltec
has not had any environmental citation or violation of any environmental law at
any time in both the United States and Cost Rica.
The West Babylon staff has also demonstrated the ability of the thermal
spray process to protect the infrastructure of bridges and pumping stations from
corrosion by the application of anodically protective coatings. The Company is
moving to seek and acquire several major contracts.
Results of Operations
Three Months Ended December 1999 vs. December 1998
For the three months ended December 31, 1999, Thermaltec International had
$57 thousand of consolidated sales, unchanged from the activity level in the
prior years' comparative period. Gross margins were 38%, versus 42% in the prior
year's first quarter; reflecting a higher proportion of NYSERDA project billings
in the sales mix. The operating deficit of $86 was $53 thousand higher than in
the same for the period of 1998, due to the higher expenses due to the aborted
merger with Camanco, which was terminated in the month of December.
1999 vs. 1998
During 1999, sales rose by 48% to $409 thousand, primarily due to the
completion of a $161 thousand contract for the anti-corrosion coating of a
bridge for the New York State Department of Transportation, In addition, the
Company was awarded the second phase of research for the
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New York State Energy Research & Development Authority. The total amount awarded
was $89 thousand, of which $21 thousand was billed during the fiscal year. These
sales more than offset a decline in business activity in the Costa Rica market
where industrial operations were adversely affected by heavy rains and
widespread flooding. Gross profit margins were reduced from 44% to 23%,
reflecting the shift in sales mix from high-margin industrial repairs to the
highly competitive anti-corrosion coating business; the Company expects that
average gross profit margins will improve as business conditions in Costa Rica
return to normal. General and Administrative expenses rose by 100%, due to the
issuance of Company shares for services. The need for these services arose from
the substantial work needed to pursue the merger with Camanco Communications, a
New Jersey-based company. On December 11, 1998 the two companies announced their
shared intention to merge operations. On December 13, 1999 and after extensive
efforts by the Company, Camanco announced that it was withdrawing from the
merger. During that period, the Company incurred approximately $450 thousand of
expenses for legal, financial and marketing services that were largely a direct
consequence of the merger effort. The Company paid for $411 thousand of these
expenses with Company shares.
1998 vs. 1997
During 1998, sales declined by 38% from the prior years' level to $276
thousand, primarily reflecting the winding down of the first phase of a coatings
research project for the New York State Energy Research & Development Authority,
begun in February 1996. The project called for Thermaltec to develop alternative
metallurgical coating processes to chrome plating. The latter process, used for
both high-hardness coatings and for decorative purposes, is highly toxic and
presents industry with severe problems of air pollution, ground water
contamination and toxic waste disposal. Thermaltec's assigned goal was to
investigate existing technologies that had a potential for replacing the
technology of chrome plating and to work with technology partners to develop new
equipment and operating parameters. Phase I of the project was completed in
December of 1997, for a project total of $495 thousand in billings; the second
phase of the project, with a total funding of $89 thousand, did not begin until
March 1999, resulting in a one year depression in the Company's sales.
Offsetting the decline in the United States, revenues in Costa Rica expanded by
$78 thousand as that company expanded its penetration of the industrial,
agricultural, and power generation markets.
Operating expenses during 1998 increased by 9% despite the overall decline
in sales, as the Company continued to invest in the building of its
infrastructure in Costa Rica. The Company continued to carry the expenses of the
operations in the Dominican Republic and in Puerto Rico until they were
terminated in February and May of 1998, respectively. Operating expenses at
Thermaltec de Costa Rica were reduced for the year by $17 thousand, reflecting
the non-repetition of one-time moving costs in the prior year of the Costa Rican
operation to a larger facility.
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Liquidity and Financial Resources
The Company has not yet achieved profitability since its inception in 1994.
As a result, it has limited the amount of debt it has raised to cover only the
acquisition of assets with reliably predictable benefits, such as production
machinery. The Company is of the opinion that the financing necessary to fund
research and market development is more appropriately obtained through the sale
of equity. Debt outstanding as of December 31, 1999 consists primarily of $23
thousand of a bank note and the remainder in equipment financing; all of that
debt has been obtained with personal guarantees by the Company's president,
Andrew Mazzone. Since inception, the Company has received an aggregate of $1.9
million from the sale of equity.
A close review of business operations at December 31, 1999 indicates that
despite past losses, the Company remains viable, with good prospects for
expansion in both the United States and in Central America. The Company
anticipates further contracts for applying corrosion protection coatings on
bridges for the New York State Department of Transportation and is installing
improved quality control and cost accounting systems at Thermaltec de Costa
Rica.
On May 30, 1999, the Company authorized the sale of 1,000,000 shares of
common stock to be offered in private transactions of 1,000 Units, representing
1,000 shares per Unit. Each Unit will consist of 1,000 Common shares and 1,000 B
Warrants and 1,000 C Warrants to purchase additional shares of the Company. Such
offering was filed with the State of New York Department of Law. The Company
utilized an exemption from the registration provisions under Regulation D Rule
504, as amended, and sold in certain States which permit the offering to take
place. The exercise price of the Warrants is $1.50 per B Warrant share and $2.00
per C Warrant share, exercisable commencing one year from termination date of
the offering for the B Warrant and two years from the termination date of the
offering for the C Warrant. The Warrants will expire two years after the date
when they can first be exercised. Stockholders will be notified of the official
termination date of the offering. The date will define the beginning time period
of the respective warrant exercise rights.
Year 2000 Compliance
The operations of the Company have not been highly vulnerable to disruption
due to the "Y2K" problem. The Company replaced its entire computer hardware and
accompanying software prior to the end of 1999. At the end of 1999, the Company
experienced no difficulties with the "Y2K" problem and, in the opinion of
management no cause for further concern exists.
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Inflation
The amounts presented in the financial statements do not provide for the
effect of inflation on the Company's operations or its financial position.
Amounts shown for machinery, equipment and leasehold improvements and for costs
and expenses reflect historical cost and do not necessarily represent
replacement cost. The net operating losses shown would be greater than reported
if the effects of inflation were reflected either by charging operations with
amounts that represent replacement costs or by using other inflation
adjustments.
Forward-looking Information
Certain statements in this document are forward-looking in nature and
relate to trends and events that may affect the Company's future financial
position and operating results. The words "expect" "anticipate" and similar
words or expressions are to identify forward-looking statements. These
statements speak only as of the date of the document; those statements are based
on current expectations, are inherently uncertain and should be viewed with
caution. Actual results may differ materially from the forward-looking
statements as a result of many factors, including changes in economic conditions
and other unanticipated events and conditions. It is not possible to foresee or
to identify all such factors. The Company makes no commitment to update any
forwardlooking statement or to disclose any facts, events or circumstances after
the date of this document that may affect the accuracy of any forward-looking
statement.
BUSINESS
General
Thermaltec International was incorporated in 1995 under the laws of the
State of Delaware. It is engaged in the thermal spray coating industry and its
primary business objective is to establish and support thermal spray coating
shops throughout Latin America.
Thermal spraying is a technology used by Thermaltec International to coat a
substrate (surface) with various materials such as metals, alloys, carbides,
ceramics, and some plastics. The coating material utilized depends upon the
requirements of each specific application.
The coatings utilized by Thermaltec International are produced from
materials in the form of either wire or powder. The material is melted in a
flame or heat source, and projected onto a substrate by a mixture of air
flammable gases to form the coating. The air, flammable gases and coating are
brought together in a flame in the nozzle of the gun where the coating is melted
and sprayed forward onto the surface to be coated. The gases and molten coating
are cooled by the surface and the coating adheres to the surface.
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Thermal spray coating technology can be utilized in any situation in which
metal surfaces are worn from use or exposed to erosion or corrosion. A few of
the most common applications include the rebuilding of mechanical parts, the
protection of pipes (inside and outside) from corrosion, and the repair of
crankshafts, turbine blades and pumps.
Thermal spraying is a generic term used to describe a number of different
technologies. Each sub-technology shares a common element in that molten or
semi-molten metal particles are propelled onto a substrate where they adhere to
form a coating. Each sub-technology involves tradeoffs among coating quality,
deposition rates, and cost. Each of the thermal spray technologies is discussed
in greater detail below.
Thermal spray technology is a subset of materials science and surface
coating engineering. Using thermal spray, technicians can apply a thick or thin
metal or ceramic coating on top of a metal substrate. The coating is bonded
strongly to the substrate, because the process projects molten particles onto
the targeted surface at high -- sometimes hypersonic -- velocities. The coatings
are thus applied with a combination of thermal and kinetic energies.
Since it is usually only the exposed surface of parts that are subjected to
stresses such as wear, erosion, or corrosion, it is possible using this
technology to economically protect such surfaces. The required protection can be
provided with thin coatings, using relatively little material. As a result, high
performance coatings and even exotic materials can be utilized at limited cost.
The process is technically accepted in the technologically advanced
societies such as Western Europe, North America and Japan. Although accepted, it
has been commercially exploited on an uneven basis. In the less developed
countries, it has not yet been widely used. There remains some untapped
potential in the U.S. market, but in third world countries where the need for
parts overhaul is the greatest, they have not yet begun to exploit the
technology to any great extent.
Company Specific
We develop our business primarily by training a sales force of mechanical
or metallurgical engineers, and have them call on leading industrial companies
in the countries where its thermal spray shops are located. At the present time,
Costa Rica is the company's main prototype installation. In Costa Rica,
Thermaltec International does business with over 300 customers. A typical method
of operation would have an engineer call on a customer who uses industrial
machinery. Industrial equipment is subject to wear. Thermaltec International's
engineers would assess the wear problem, and recommend a thermal spray solution.
If needed, the worn part would be taken
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out of service, and shipped to the thermal spray shop. A coating designed to
solve the problem would be applied, and then the part would be ground or
machined to original specification and returned to the customer. Often a 24 hour
turnaround can be achieved. We maintain a full complement of coating devices,
and metal working finishing equipment. The use of this service is valuable to
third world industries because: (1) the repair is generally cheaper than the
cost of a new part, and the turnaround of the refurbished part is much quicker
than reordering a new one. (2) Downtime of the customers' equipment is
minimized. (3) The inventory of customers' spare replacement parts can be
minimized by the accessibility to the thermal spray process. Pricing usually
targets at 40% to 50% the cost of buying a new part. Prices above and below that
target are influenced by need for quick turnaround.
It is our intent to continue to build its Costa Rican location into the
largest shop of its kind in Central America. We estimate that we will attain our
goal within this year. It is anticipated that the Costa Rican operation will be
profitable when it reaches a steady state sales figure of $300,000 U.S. It is
currently running at a $250,000 U.S. sales rate.
Specific Technologies of Thermal Spraying
Wire Flame Spraying
Coating material in wire form is fed into an oxygen-fuel gas combustion
flame, melted, and then atomized and projected by compressed air onto a prepared
substrate (the object to be sprayed upon). This is the oldest of the thermal
spray processes used in industry today. This process, because of the inherent
nature of the gases used, achieves a relatively low velocity flame with a
temperature maximum of 5500 (degrees)F. The process is simple to use and is
employed heavily in industry for rebuilding lightly worn surfaces, anticorrosion
and mild wear resistant applications.
Powder Flame Spraying
Coating material in powder form is fed into an oxygen-fuel combustion
flame, melted, and projected by the gas stream onto a prepared substrate. The
key difference between this and wire flame spraying is that the coating material
is a powder; the powder form lends itself to a greater variety of formulations.
Electric Arc Spraying
Coating material in wire form is electrically charged when two wires are
brought together and an arc is struck between them. Compressed air atomizes the
molten material and projects it onto a prepared substrate. This process allows
for higher deposition rates, and higher quality coatings than traditional flame
spraying.
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Plasma Spraying
Coating material in powder form is fed into a heat source created by using
a high intensity electric arc, which disassociates and ionizes into a plasma
gas, either of hydrogen or nitrogen. The plasma gas is used as a carrier to
transfer the heat available in the arc to the particles of material being
sprayed. The melted particles are projected at high velocity by the plasma gas
stream onto a prepared substrate. The plasma process was developed in the late
1950's and was a technological development that allowed tremendous growth in the
thermal coatings industry. Because of the high temperatures involved, virtually
any material can be sprayed, and the high temperatures produce good coatings.
Plasma spraying is currently utilized by industry and in particular, the
aerospace industry where total sales are over $1,000,000,000 worldwide.
HVOF (High Velocity Oxygen/Fuel) --- HVAF (High Velocity Air/Kerosene)
Coating material is fed into a mini rocket chamber and mixed with either
air and kerosene (HVAF) or oxygen and propane (HVOF). A high velocity combustion
flame, melts, and then projects the material onto a prepared substrate. This
process was developed in the mid-1980's and is the latest development in thermal
spray technology. The extremely high particle velocity (4000' per second)
achieved in this process causes the particles to flatten upon impact with the
substrate, resulting in high density, high bond strength coatings that are
essentially stress free and of very low porosity.
The Company uses all of these technologies in its operation.
Industries Using Thermal Sprayed Coatings
Industry Key Applications
- - -------- ----------------
Chemical Processing Solving corrosion problems in processing equipment.
Textiles Used on mill components such as guides and pins.
Medical/Dental Titanium and hydroxyapatite coatings on medical and
dental implants to prolong life and reliability.
Iron and Steel making Rolls, conveyors, thermal barriers.
Electronics Dielectric coatings and coatings on recording
heads to improve quality and prolong life.
Agricultural A wide variety of erosion and corrosion resistant
coatings for machine parts.
Aerospace Wear resistant and thermal barrier coatings for the
operating parts of turbojet engines.
Automotive Wear resistant coatings for cylinders and
transmission parts.
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Corrosion resistant coatings, oxygen sensor
coatings to regulate fuel air flow.
Railroad Traction motors.
There are over 4,000 different industrial applications for thermal
coatings.
Some Other Industrial Uses Are Found In:
The Petrochemical industries, pumps, paper and pulp manufacturing, power
plants, electric motor repair, food handling, and diesel engines.
Plan of Expansion Overseas
The Company does not plan to expand its business until the Costa Rican
facility is profitable. This is expected to take one year from todays date. It
is the intention to staff and support Latin American expansion through Costa
Rica. Engineers, accountants, and marketing support will come from Costa Rica.
It is important that the Costa Rican operation be a model site in equipment,
technology, and marketing, and administration in order to serve as a
demonstration site to prospective customers. The company cannot guarantee that
it will reach this state, because it may not raise adequate monies to fund the
operation in the required way.
In the opinion of our management, there is a substantial need for thermal
spray technology in developing countries. Such countries typically lack a
developed industrial infrastructure, and due to economic considerations,
equipment is used for relatively extended periods of time, and needs to be
refurbished from time to time. South American, Asian, and other developing areas
are best suited for the company's stand-alone thermal spray shop concept.
When and if the company is in a positive cash position to expand its
operation in Latin America, the preferred method of expansion will be to
purchase a small but active machine or metal working shop in a key industrial
city. The company will then have a base of established local customers to
promote to when introducing thermal spraying. The company would deploy thermal
spraying capability by means of a containerized flame spray system, allowing
instant capability to thermal spray for new customers. We would send personnel
from our Costa Rican facility to assist the launching of the thermal spraying
process at a new facility. The method of operation would be identical with that
of the Costa Rican pilot plant from that point on. The estimate for the purchase
of an existing shop, and adding a thermal spraying capability to it would be
approximately $250,000 per location. There can be no assurance that the Costa
Rican pilot plant would reach a status that would induce a prospective machine
shop owner to sell to the company on favorable terms. There
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can be no assurance that the requisite financing for funding new locations will
be available to us, and if so, on terms that would allow us to make a profit. We
do not intend to start these proposed shops from the ground up as we did in
Costa Rica. We did so in Costa Rica to gain experience in all areas of the
business in order to select the optimum method of expansion.
Competition:
We may experience competition from a few different sources. First, the
traditional manufacturers of thermal spray equipment and supplies i.e. Sulzer
Metco, Westbury, NY. Eutectic Corporation, Flushing, NY, and Praxair Inc.,
Danbury, Connecticut, etc. Although primarily engaged in selling equipment and
supplies, the users of the thermal spray processes may ultimately shift their
strategy to become prime users also of the process.
Economic trends have caused the manufacturers of equipment and supplies to
lose profits to the contractors of the thermal spray process, who, in turn, use
such equipment and supplies to apply a coatings service for their customers.
Thermaltec: International is a contractor. Competition also comes from
alternative coating processes such as brazing and welding. The competitors cited
are significantly larger than the company, in both money and technical
resources. Therefore, as a defensive strategy the company operates in niche
markets not currently attractive to larger competitors.
Suppliers to the Company:
We anticipate obtaining most of its equipment and coating materials from
several separate sources. The loss of any supplier will not have a long term
adverse affect on our operations.
Employees:
At present, we have 18 employees, Andrew Mazzone, the Company's President,
Secretary and Treasurer/Director, and the chairman of the company has an
unwritten arrangement to conduct our affairs at minimal compensation for at
least one more year.
Executive Compensation:
No Officer/Director has been compensated with salaries or any other form of
remuneration. There will be minimal executive compensation for the next year,
estimated at approximately $50,000.
Offices/Directors will be reimbursed for any out-of-pocket expenses in the
performance of their duties for the Company.
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Facilities:
We presently maintain two locations as stated below. We have other area
locations in mind for the future, but have not targeted any other specific
location.
USA
Our executive offices and shop are located at 68A Lamar Street, W. Babylon,
New York 11704. Such space consists of 2,000 Sq. Ft. of which 300 Sq.Ft are
devoted to office and 1,700 Sq.Ft are devoted to the spray shop. The rent is on
a month to month basis for $1,000 per month. The Company's relationship with the
owners is such that renewal of any lease will be no problem.
San Jose, Costa Rica
We maintain a wholly owned shop, Thermaltec de Costa Rica, Pavas, at 75
Oeste del Liceo, Antiqua Fab Rosago, Ultima bodega, San Jose, Costa Rica,
Telephone 011-506-290-7591. The facility is 8,000 Sq.Ft. with 900 Sq. Ft. set
aside for offices and 7,100 Sq. Ft. is dedicated to spray and machine shop
areas. The lease is for five years, which commenced in January 1997 with a
monthly rent of $1,500. Cost of living increases are built into the lease
agreement. The location has four large lathes, four medium lathes, three large
grinders, three milling machines, four drilling machines and other miscellaneous
machine tools, two blast containers, a three-station spray room, 15 thermal
spray guns including wire, powder arc, HV, and plasma (previously described) and
miscellaneous work handling equipment.
The business is subject to minor seasonal variations in Costa Rica. Such
variations are influenced by planting and harvesting sugar and coffee with
resulting shut down and repair of equipment being cyclical in nature.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of December 31, 1999, by (i) each
person (including any "group" as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934 (the "Exchange Act") who is known by the Company
to own beneficially 5% or more of the Common Stock, (ii) each director of the
Company, and (iii) all directors and executive officers as a group. Unless
otherwise indicated, all persons listed below have sole voting power and
investment power with respect to such shares. Total number of shares authorized
is 10,000,000 shares of Common Stock, each of which is $.0001 per share par
value. 998,500 shares of Common Stock have been issued and are outstanding as
follows:
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Andrew Mazzone(1) 998,500 shares
Directors and officers as a group 998,500 shares
(1)Directors and Officers
MANAGEMENT
There is currently one (1) occupied seat on the Board of Directors. The
following table sets forth information with respect to the directors and
executive officers.
DATE SERVICE
NAME AGE OFFICE COMMENCED
- - ---- --- ------ ------------
Andrew Mazzone* 59 Chairman, President December, 1995
/Secretary/Treasurer
* Indicates Board Member
All directors will hold office until the next annual stockholder's meeting
and until their successors have been elected or qualified or until their death,
resignation, retirement, removal, or disqualification. Vacancies on the board
will be filled by a majority vote of the remaining directors. Officers of the
Company serve at the discretion of the Board of Directors.
The Officers and Directors of the Company are set forth below.
Andrew Mazzone
Chairman, CEO & President
Mr. Mazzone has been the chairman of the company since its inception. From
1970 until February 15, 1995, Mr. Mazzone was employed by Metco, Westbury, NY, a
subsidiary of the Perkin Elmer Corp. The Company was acquired by a foreign
holding corporation, which changed the Company's name to Sulzer Metco. Mr.
Mazzone, as President, resigned from Sulzer Metco after the acquisition of the
Company. Mr. Mazzone did so to pursue his belief that there is an unexploited
opportunity in the thermal spray industry to set up industrial thermal spray
shops around the world, excluding the areas of Europe and the United States. In
this endeavor, he left Sulzer Metco on good terms and with the understanding
that his strategy, if successful, would mean even more
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business for Sulzer Metco Corporation. Some of the highlights of Andrew
Mazzone's Metco career include positions as Director of Logistics, Director of
Sales and Marketing, Director of Manufacturing, Executive Vice President and
President. Mr. Mazzone has degrees from Babson college, Babson Park,
Massachusetts in finance and an advanced degree in economics, with a specialty
in economic history. Mr. Mazzone will devote full time to the efforts of the
Company
Executive Compensation
The following table sets forth the annual remuneration for the highest paid
officers and directors of the Company for the annual period ending December 31,
1999.
Name Capacities in Which Aggregate
Remuneration was Received Remuneration
- - -------------------------------------------------------------------------------
Andrew Mazzone Chairman, President and Chief $68,000.00
Executive Officer
Director Compensation
Our directors receive no compensation for their services as directors.
Directors and Officers Insurance
We are exploring the possibility of obtaining directors and officers ("D &
O") liability insurance. We have obtained several premium quotations but have
not entered into any contract with any insurance company to provide said
coverages. There is no assurance that we will be able to obtain such insurance.
CERTAIN TRANSACTIONS
Issuance of Stock:
On November 21, 1995, the Company issued 1,500,000 shares to the Company's
founders, promoters, and affiliates of the Company in the names of Andrew
Mazzone and Chris De Primo. The issuance to the shares were pursuant to Section
4/2 of the Securities Act of 1933.
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Planned Merger:
On December. 11, 1998--Thermaltec International, Corp. announced that it
had entered into a Letter of Intent with Solar Communications Group, Inc. (SCG)
of Millville, N.J. for the merger of Solar Communications into TTI. The specific
details of the merger and its timing were released by SCG on Monday, Dec. 14. It
had been anticipated that, at the effective time of the merger, the shareholders
of Solar Communications would receive 67,500,000 shares of the common stock of
TTI representing approximately 96% of the outstanding shares of TTI common
stock.
Prior to the merger, TTI would take all necessary steps to transfer all of
its assets, ongoing business activities and liabilities to Panama Industries,
Ltd. A wholly owned subsidiary of TTI except for a minimal amount of cash and
certain net operating loss tax carry forwards. After the merger, TTI would
conduct the business formerly conducted by SCG in the name of Panama Industries,
Ltd. The stockholders of TTI (as of the date of May 28, 1999) would receive one
share of Panama Industries, Ltd in addition to each share held in TTI.
Consummation of the merger would have been subject to a number of
conditions, including without limitation the completion of customary due
diligence, the receipt of all necessary governmental, regulatory, shareholder
and third party approvals, and the registration of the shares of TTI common
stock pursuant to a registration statement filed under Form S-4 of the
Securities Act of 1933, as amended, to be issued in conjunction with the merger
and all appropriate state regulatory authorities.
SCG, which is privately owned, was formed in 1996 to provide quality
communications alternatives to the business community. TTI is a metallurgical
engineering company specializing in the development of new solutions for the
prevention of surface wear on industrial equipment.
On December 13, 1999 TTI received notice from the Securities and Exchange
Commission that it would be obligated to register the shares of its Panama
Industries, Ltd. (Panama) spin off under the Securities Act of 1933. The Panama
spin off would have resulted from the proposed merger of TTI and Comanco
Communications, Inc. (formally Solar Communications, Inc.). On December 9, 1999,
TTI requested that Comanco grant it a 45 day extension from December 31, 1999 to
February 15, 2000 to enable TTI to register the Panama shares.
Although TTI could not be assured that the registration would be completed
by February 15, 2000, since most of the information for Panama registration was
available as part of the TTI/Comanco merger process, TTI felt that this was a
reasonable expectation. TTI agrees that both parties put in a strong effort too
complete this merger, for its part TTI wanted to continue and com-
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plete the merger process. As Comanco indicated in their press release of
December 13, 1999, they exercised their right to terminate on December 31, 1999.
TTI strongly regrets that Comanco did not grant the requested extension.
On the following dates, the company entered into nonbinding Letters of
Intent with the following companies to explore the possibility of acquisitions:
Edgement Management, Inc. - 1/29/00
High Velocity Technology - 2/3/00
Viaplex Communications, Inc.- 2/4/00
Exploration and investigation are now being done by the company to
determine whether a binding contract should be entered into between these three
companies and TTI. As of March 16, 2000, no such contracts have been signed. If
such contracts are signed and acquisitions consummated it would indicate a
change in the direction of the company, since two of the three companies are not
in the thermal spray business.
DESCRIPTION OF SECURITIES
General
We are authorized to issue 10,000,000 shares of Common Stock, at a par
value $.0001 per share. As of 2/29/2000 there are 2,763,784 shares of Common
Stock outstanding.
Common Stock
The holders of Common Stock are entitled to one vote for each share held of
record on all matters to be voted on by stockholders. There is no cumulative
voting with respect to the election of directors, with the result that the
holders of more than 50% of the shares voting for the election of directors can
elect all of the directors then up for election. The holders of Common Stock are
entitled to receive ratably such dividends when, as and if declared by the Board
of Directors out of funds legally available therefor. In the event we have a
liquidation, dissolution or winding up, the holders of Common Stock are entitled
to share ratably in all assets remaining which are available for distribution to
them after payment of liabilities and after provision has been made for each
class of stock, if any, having preference over the Common Stock. Holders of
shares of Common Stock, as such, have no conversion, preemptive or other
subscription rights, and there are no redemption pro-
Page 16
<PAGE>
visions applicable to the Common Stock. All of the outstanding shares of Common
Stock are, and the shares of Common Stock offered hereby, when issued in
exchange for the consideration set forth in this Prospectus, will be, fully paid
and nonassessable.
There are approximately 1,815,000 shares of Common Stock outstanding that
are "restricted securities" as that term is defined in Rule 144 promulgated
under the Securities Act.
Price Ranges of Thermaltec Common Stock
Thermaltec's common stock is quoted on the OTC Bulletin Board under the
symbol "THRM". The following table sets forth the range of the high and low bid
quotations of the Thermaltec common stock on the OTC Bulletin Board for the
periods indicated:
High Low
---- ---
THREE MONTHS ENDED
December 31, 1996 $1.500 $1.245
March 31, 1997 1.563 .494
June 30, 1997 1.000 .347
September 30, 1997 .874 .500
December 31, 1997 1.248 .688
March 31, 1998 .968 .341
June 30, 1998 1.063 .500
September 30, 1998 .751 .247
December 31, 1998 4.926 .235
March 31, 1999 5.770 2.509
June 30, 1999 17.465 6.015
September 30, 1999 8.625 7.625
December 30, 1999 .87 .68
The above quotations represent prices between dealers and do not include retail
markup, markdown or commission. They do not necessarily represent actual
transactions.
Thermaltec A Warrants
As of the date of this document, there were 193,400 Thermaltec common stock
purchase warrants outstanding, held of record by 11 persons. Each warrant
entitles the registered holder thereof to purchase one share of Thermaltec
common stock, at a price of $1.00 per share, subject to adjustment in certain
circumstances, on or before June 2, 2000. Any share of Thermaltec
Page 17
<PAGE>
common stock issued pursuant to the exercise of a warrant would be a restricted
security. Such shares may not be sold unless registered under the Securities Act
of 1933 or sold pursuant to an exemption from registration, such as the
exemption provided by Rule 144.
Liquidation Rights
In the event of a liquidation of the Company, all stockholders are entitled
to a pro rata distribution after payment of any claims. Warrant holders will not
be entitled to liquidation rights, and will not be treated as stockholders prior
to the exercise of the warrants.
DIVIDEND POLICY
We have never declared or paid cash dividends on our Common Stock and
anticipate that all future earnings will be retained for development of our
business. The payment of any future dividends will be at the discretion of our
Board of Directors and will depend upon, among other things, future earnings,
capital requirements, the financial condition of the Company and general
business conditions.
STOCK TRANSFER AGENT
Our transfer agent and registrar of the Common Stock is Manhattan Transfer
Registrar Co., Box 361, Holbrook, NY 11741.
LEGAL MATTERS
There is no past, pending or, to our knowledge, threatened litigation or
administrative action which has or is expected by our management to have a
material effect upon our business, financial condition or operations, including
any litigation or action involving our officers, directors, or other key
personnel.
Page 18
<PAGE>
Index to Financial Statements
Thermaltec International Corporation and Subsidiaries
CONTENTS
Page
INDEPENDENT AUDITORS' REPORT ............................................F-2
Consolidated Balance Sheets as of December 31, 1999 and
September 30, 1999, 1998 and 1997 ......................................F-3
Consolidated Statements of Operations and Comprehensive Income
for the periods ending December 31, 1999 and
September 30, 1999, 1998 and 1997 ......................................F-4
Consolidated Statements of Stockholders' Equity for the periods
ending December 31, 1999 and September 30, 1999, 1998 and 1997 .........F-5
Consolidated Statements of Cash Flows for the periods
ending December 31, 1999 and September 30,1999,
1998 and 1997 ..........................................................F-6
Consolidated Notes to the Financial Statements ..........................F7-F12
F-1
<PAGE>
[LETTERHEAD OF CAPRARO, CENTOFRANCHI, KRAMER & CO. P.C.]
INDEPENDENT AUDITOR'S REPORT
The Board of Directors of
Thermaltec International Corporation and Subsidiaries
We have audited the accompanying consolidated balance sheets of Thermaltec
International Corporation and Subsidiaries as of September 30, 1999, 1998 and
1997 and the related consolidated statements of operations and comprehensive
income, stockholders' equity and cash flows for the years then ended. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall consolidated financial
statement presentation. We believe that our audit provide a reasonable basis for
our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Thermaltec
International Corporation and Subsidiaries as of September 30, 1999, 1998 and
1997, and the results of its operations and cash flows for the years then ended,
in conformity with generally accepted accounting principles.
/s/ Capraro, Centofranchi, Kramer & Co, P.C.
Capraro, Centofranchi, Kramer & Co, P.C.
South Huntington, New York
February 9, 2000, except for note 13,
as to which the date is February 15, 2000
F-2
<PAGE>
Thermaltec International Corp. and Subsidiaries
Consolidated Balance Sheets
<TABLE>
<CAPTION>
(Unaudited)
as of as of as of as of
9/30/97 9/30/98 9/30/99 12/31/99
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Assets
Current Assets
Cash and Cash Equivalents $ 4,792 $ 5,604 $ 131,278 $ 86,321
Trade Accounts Receivable 71,869 61,496 159,448 180,974
Inventory 30,182 65,088 19,779 25,793
Prepaid and Other Current Assets 7,686 9,292 1,492 1,595
----------- ----------- ----------- -----------
Total Current Assets 114,529 141,480 311,997 294,683
----------- ----------- ----------- -----------
Fixed Assets
Machinery and Equipment 176,121 145,523 185,879 185,879
Leasehold Improvements 51,104 40,120 40,120 40,120
----------- ----------- ----------- -----------
Gross Fixed Assets 227,225 185,643 225,999 225,999
Less: Accumulated Depreciation (46,284) (65,926) (81,749) (87,077)
----------- ----------- ----------- -----------
Net Fixed Assets 180,941 119,717 144,250 138,922
----------- ----------- ----------- -----------
Other Assets
Organization Costs, Net of Amortization 12,193 7,889 --
Other Assets 339 3,120 5,090 5,071
----------- ----------- ----------- -----------
Total Other Assets 12,532 11,009 5,090 5,071
----------- ----------- ----------- -----------
Total Assets $ 308,002 $ 272,206 $ 461,337 $ 438,676
=========== =========== =========== ===========
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities
Notes Payable $ 42,114 $ 44,495 $ 25,639 $ 26,604
Vendor Accounts Payable 68,067 79,958 176,001 213,441
Other Liabilities 71,513 89,309 37,732 45,020
Shareholder Loan 103,667 105,642 425,904 447,571
----------- ----------- ----------- -----------
Total Current Liabilities 285,361 319,404 665,276 732,636
----------- ----------- ----------- -----------
Long-Term Liabilities
Long-Term Debt Less Current Maturities 40,745 20,764 44,290 37,057
----------- ----------- ----------- -----------
Total Liabilities 326,106 340,168 709,566 769,693
----------- ----------- ----------- -----------
Common Stock (Authorized 10,000,000 shares,
$.0001 Par Value; issued & outstanding: 2,608,118) 205 239 261 261
Additional Paid-in Capital 787,796 1,122,762 1,902,407 1,902,407
Retained Earnings (Deficit) (814,695) (1,217,379) (2,175,983) (2,262,066)
Accumulated Other Comprehensive Income:
Foreign Currency Translation Adjustment 8,590 26,416 25,086 28,381
----------- ----------- ----------- -----------
Total Stockholders' Equity (Deficit) (18,104) (67,962) (248,229) (331,017)
----------- ----------- ----------- -----------
Total Liabilities and Stockholders' Equity (Deficit) $ 308,002 $ 272,206 $ 461,337 $ 438,676
=========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
F-3
<PAGE>
Thermaltec International Corp. and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income
<TABLE>
<CAPTION>
(Unaudited)
For the For the For the For the
year ending year ending year ending 3 months ending
9/30/97 9/30/98 9/30/99 12/31/99
----------- ----------- ----------- ---------------
<S> <C> <C> <C> <C>
Sales $ 442,264 $ 275,846 $ 408,987 $ 57,057
Cost of Sales 250,176 154,511 316,257 35,327
----------- ----------- ----------- -----------
Gross Profit 192,088 121,335 92,730 21,730
General and Administrative Expenses 451,807 524,019 1,051,334 107,813
----------- ----------- ----------- -----------
Net Loss (259,719) (402,684) (958,604) (86,083)
----------- ----------- ----------- -----------
Other Comprehensive Income:
Foreign Currency translation adjustments 8,338 17,826 (1,330) 3,295
----------- ----------- ----------- -----------
Total Comprehensive Income (Loss) ($251,381) (384,858) ($959,934) ($82,788)
=========== =========== =========== ============
Basic and Diluted Loss per Share ($0.13) ($0.19) ($0.38) ($0.03)
=========== =========== =========== ============
Weighted Average Number of Shares Outstanding 2,046,750 2,105,489 2,490,420 2,608,118
=========== =========== =========== ============
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE>
Thermaltec International Corp. and Subsidiaries
Consolidated Statements of Stockholders' Equity (Deficit)
For the Years Ended September 30, 1997, 1998, 1999
and the Three Months Ending December 31, 1999
<TABLE>
<CAPTION>
Common Stock Accumulated
------------------- Additional Retained Other
Number of Paid-in Earnings Comprehensive
Shares Amount Capital (Deficit) Income Total
------------------- ---------- ----------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Beginning Balance 2,034,750 $203 $ 771,797 ($554,976) $252 $217,276
Net Loss for the
year ended 9/30/1997 (259,719) (259,719)
Stock Issued for services during
the year ended 9/30/97 16,001 2 15,999 16,001
Other Comprehensive Income:
Foreign Currency Translation Adjustment 8,338 8,338
---------- ---- ---------- ----------- ---------- ---------
Balance September 30, 1997 2,050,751 205 787,796 (814,695) 8,590 (18,104)
Net Loss for the
year ended 9/30/1998 (402,684) (402,684)
Stock sold during the year
ended 9/30/98 288,600 28 276,972 277,000
Stock issued for services 58,000 6 57,994 58,000
Other Comprehensive Income:
Foreign Currency Translation Adjustment 17,826 17,826
---------- ---- ---------- ----------- ---------- ---------
Balance September 30, 1998 2,397,351 239 1,122,762 (1,217,379) 26,416 (67,962)
Net Loss for the
year ended 9/30/99 (958,604) (958,604)
Stock sold during the year 0 0 0
ended 9/30/99
Warrants exercised during the year
ended 9/30/99 108,200 11 106,938 106,949
Stock issued in lieu of cash repayment of
shareholder during the year ended 9/30/99 30,000 3 29,997 30,000
Stock issued for services 72,567 8 642,710 642,718
Other Comprehensive Income:
Foreign Currency Translation Adjustment (1,330) (1,330)
---------- ---- ---------- ----------- ---------- ---------
Balance September 30, 1999 2,608,118 $261 $1,902,407 ($2,175,983) $25,086 ($248,229)
Net Loss for the
year ended 12/31/99 (86,083) (86,083)
Other Comprehensive Income:
Foreign Currency Translation Adjustment 3,295 3,295
---------- ---- ---------- ----------- ---------- ---------
Balance December 31, 1999 2,608,118 $261 $1,902,407 $2,262,066 $ 28,381 ($331,017)
========== ==== ========== =========== ========== =========
</TABLE>
See accompanying notes to consolidated financial statements
F-5
<PAGE>
Thermaltec International Corp. And Subsidiaries
Consolidated Statements Of Cash Flow
<TABLE>
<CAPTION>
(Unaudited)
For the year For the year For the year For the three
ending ending ending months ending
9/30/97 9/30/98 9/30/99 12/31/99
----------------------------- ------------ ------------
<S> <C> <C> <C> <C>
Cash Flows from Operating Activities:
Net Loss ($259,719) ($402,684) ($958,604) ($ 86,083)
--------- --------- --------- ---------
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation & Amortization 30,665 34,901 23,712 5,328
Common Stock Issued for Services 16,001 58,000 642,718 --
Loss on Disposal of Assets -- 19,680 --
(Increase) decrease in:
Receivables (19,183) 10,373 (97,952) (21,526)
Inventories (23,829) (5,416) 45,309 (6,014)
Prepaid and other current assets (7,686) (1,606) 7,800 (103)
Other Assets (25) (2,781) (1,970) 19
Increase (decrease) in:
Accounts Payable (9,272) 11,891 96,043 37,440
Accrued Expenses and Other Current Liabilities 9,475 58,409 (51,577) 7,288
--------- --------- --------- ---------
Total Adjustments 43,804 183,451 664,083 22,432
--------- --------- --------- ---------
Net cash used in operating activities (215,915) (219,233) (294,521) (63,651)
--------- --------- --------- ---------
Cash Flows from Investing Activities:
Purchases of Fixed Assets & Leasehold Improvements (125,502) (18,543) (16,857)
--------- --------- --------- ---------
Cash Flows from Financing Activities:
Proceeds from sale of shares net of offering costs -- 277,000 106,949 --
Proceeds from issuance of Notes Payable 15,953 -- -- --
Repayments of Notes Payable -- (17,600) (18,830) (6,268)
Net proceeds (repayments) of Shareholder Loans 103,667 (38,638) 350,263 21,667
--------- --------- --------- ---------
Net cash provided by financing activities 119,620 220,762 438,382 15,399
Effect of Exchange on Cash 8,337 17,826 (1,330) 3,295
Net increase (decrease) in cash and cash equivalent (213,460) 812 125,674 (44,957)
Cash & Cash Equivalents, Beginning of Period 218,252 4,792 5,604 131,278
--------- --------- --------- ---------
Cash & Cash Equivalents, End of Period $ 4,792 $ 5,604 $ 131,278 $ 86,321
========= ========= ========= =========
</TABLE>
See accompanying notes to financial statements.
F-6
<PAGE>
THERMALTEC INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30,1999,1998 AND 1997
AND FOR THE THREE MONTHS ENDED DECEMBER 31,1999 (UNAUDITED)
1. MERGER WITH CAMANCO COMMUNICATIONS, INC.
On December 11, 1998 the Company entered into an agreement with Solar
Communication Group, Inc. (later renamed Camanco Communications, Inc.) of
Millville, New Jersey. Under the terms of this agreement, the Company was
to increase its number of authorized shares to 70,000,000. The Company
would then acquire all of the outstanding shares of Camanco in exchange for
59,500,000 of its shares, with the current shareholders of the Company
retaining their existing shares in the Company. The current owners of
Camanco would then become the majority shareholders of the Company; this is
a process that is sometimes referred to as a "reverse merger". The
consummation of the merger was subject to a number of conditions, including
the completion of customary due diligence, the receipt of all necessary
governmental, regulatory, shareholder and third party approvals as well as
the registration of the shares of the Company's common stock to be issued
in conjunction with the merger with the SEC and with all appropriate state
regulatory authorities.
On December 13, 1999 Camanco exercised its option under the agreement to
terminate the process.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATI0N/REPORTING ENTITIES
The consolidated financial statements of Thermaltec International Corp. and
Subsidiaries (the "Company") include the following entities:
THERMALTEC INTERNATIONAL CORP.
Thermaltec International Corp. ("TTI") was incorporated in 1994 under the
laws of the state of Delaware. TTI was organized for the purpose of
engaging in the sale of thermal sprayed coatings to individual customers in
the United States and other countries. TTI also serves as the parent
company, which acts as a holding company for its subsidiaries and provides
administrative support to the operations of the Company. In May 1999, all
operating assets and liabilities of Thermaltec were transferred into Panama
Industries.
THERMALTEC DE COSTA RICA, S.A.
Thermaltec de Costa Rica, S.A. ("TCR") is a wholly-owned subsidiary located
in San Jose, Costa Rica. TCR began operations during fiscal 1995, and
provides thermal spray coatings to businesses and individuals throughout
Costa Rica.
METAL COATINGS, INC.
Metal Coatings, Inc. ("MCI") was a majority-owned subsidiary located in San
Juan, Puerto Rico. MCI began significant operations during fiscal 1997, and
provided thermal spray coatings to businesses and individuals throughout
Puerto Rico. On May 31, 1998 the operations of MCI ceased, and the
remaining assets and liabilities were assumed by TTI. No material expenses
were associated with the closure.
THERMALTEC DOMINICANA, S.A.
Thermaltec Dominicana, S.A. ("TDR") was a majority-owned subsidiary located
in Santo Domingo in the Dominican Republic. TDR began significant
operations in October 1996 and provided thermal spray coatings, as a market
test, to businesses and individuals in the Santo Domingo metropolitan area.
In February 1998, the operations of TDR ceased and the assets and
liabilities were assumed by TTI. No material expenses were associated with
the closure.
PANAMA INDUSTRIES, LTD.
Panama Industries was incorporated in March 1998, but was inactive and not
part of the consolidated group until May of 1999. At that time, all
operating assets and liabilities of Thermaltec were transferred into
Panama.
PRINCIPLES OF CONSOLIDATION
All material intercompany transactions have been eliminated in the
consolidated financial statements.
F-7
<PAGE>
THERMALTEC INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30,1999,1998 AND 1997
AND FOR THE THREE MONTHS ENDED DECEMBER 31,1999 (UNAUDITED)
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
REVENUE RECOGNITION
Revenues from contracts with terms greater than one month are recognized on
the percentage-of-completion method, measured by the percentage of cost
incurred to date to estimated total cost for each contract. Where
applicable, invoicing for time and materials on long-term contracts are
recognized as revenue at the time of invoice. On short-term contracts with
terms of less than one month, the completed contract method is utilized as
it approximates the percentage-of-completion method. Funded research
projects in which the Company provides the same services that it offers for
sale in the regular course of business are recognized as revenue, at the
amount invoiced.
CASH AND CASH EQUIVALENTS
For the purpose of the statement of cash flows, the Company includes cash
on deposit, money market funds, amounts held by brokers in cash accounts
and funds temporarily held in escrow to be cash equivalents.
ACCOUNTS RECEIVABLE
Accounts receivable have been adjusted for all known uncollectible
contracts; an allowance for doubtful contracts has not been provided, as
the amount is not considered material.
INVENTORIES
Inventories and prepaid supplies consist of various materials and supplies
utilized on construction contracts and are valued at the lower of cost
(first-in, first-out) or market.
PROPERTY, EQUIPMENT AND DEPRECIATION
Property and equipment is stated at cost. Major expenditures for property
and, those which substantially increase useful lives, are capitalized.
Maintenance, repairs, and minor renewals are expensed as incurred. When
assets are retired or otherwise disposed of, their costs and related
accumulated depreciation are removed from the accounts and resulting gains
or losses are included in income. Depreciation is provided by both
straight-line and accelerated methods over the estimated useful lives of
the assets.
INTANGIBLE ASSETS
Organization Costs are being amortized on a straight-line basis over sixty
months.
EARNINGS (LOSS) PER SHARE
The Company has adopted SFAS No. 128, "Earnings per Share", which requires
presentation of basic earnings per share ("Basic EPS") and diluted earnings
per share ("Diluted EPS") by all publicly traded entities, as well as
entities that have made a filing or are in the process of filing with a
regulatory agency in preparation for the sale of securities in a public
market.
Basic EPS is computed by dividing income or loss available to common
shareholders by the weighted average number of common shares outstanding
during the period. The computation of Diluted EPS gives effect to all
dilutive potential common shares during the period. The computation of
Diluted EPS does not assume conversion, exercise or contingent exercise of
securities that would have an antidilutive effect on earnings.
INCOME TAXES
The Company has adopted Financial Accounting Standards Board Statement No.
109, " Accounting for Income Taxes". The Company files a consolidated
Federal tax return, which includes all of the subsidiaries. Accordingly,
Federal Income taxes are provided on the taxable income of the consolidated
group. State income taxes are provided on a separate company basis, if and
when taxable income, after utilizing available carryforward losses, exceeds
certain levels.
F-8
<PAGE>
THERMALTEC INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30,1999,1998 AND 1997
AND FOR THE THREE MONTHS ENDED DECEMBER 31,1999 (UNAUDITED)
DEFERRED INCOME TAXES
Deferred tax assets arise principally from net operating losses and capital
losses available for carryforward against future years' taxable income.
FOREIGN EXCHANGE
The Company and its subsidiaries treat the U.S. Dollar as their functional
currency. Accordingly, gains and losses resulting from the translation of
accounts designated in other than the functional currency are reflected in
the determination of net income and have been immaterial.
RECLASSIFICATIONS
Certain accounts in the prior-year financial statements have been
reclassified for comparative purposes to conform with the presentation in
the current-year financial statements.
INTERIM FINANCIAL INFORMATION
The financial information presented for the three month periods ended
December 31,1999 is unaudited but, in the opinion of management, reflects
all of the adjustments necessary for a fair presentation of such financial
statements. The results of operations for the three month period ended
December 31, 1999 are not necessarily indicative of the operating results
to be expected for the year ended September 30, 2000.
REPORTING COMPREHENSIVE INCOME
The Company has adopted Statement of Financial Accounting Standard No. 130,
"Reporting Comprehensive Income" for the year ended September 30, 1999; all
prior periods have been restated for purposes of comparison. This Statement
establishes standards for reporting and displaying comprehensive income and
its components in a full set of general-purpose financial statements. This
statement requires the classification of items of comprehensive income by
their nature in a financial statement and the accumulated balance of other
comprehensive income separately from retained earnings and additional
paid-in capital in the equity section of the balance sheet.
3. SUPPLEMENTAL CASH FLOW INFORMATION
For the period Ended:
September 30, December 31,
1997 1998 1999 1999
---- ---- ---- ----
Cash paid for:
Interest Expense $ 10,070 $ 23,695 $33,191 $ 5,052
Income taxes $ 967 $ 959 -- --
During the year ended September 30, 1999, the Company issued 30,000 shares
of stock in lieu of cash repayment of a shareholder loan.
During the year ended September 30, 1999, the Company had non-cash
investing and financing transactions relating to purchases of new equipment
totaling $23,500.
4. INVENTORY For the period Ended:
September 30, December 31,
1997 1998 1999 1999
-------- -------- ------- --------
Inventory consists of the
following:
Raw Materials $ 30,182 $ 28,209 $19,779 $ 24,644
Machinery held for Resale -- 36,879 -- 1,149
-------- -------- ------- --------
Total Inventory $ 30,182 $ 65,088 $19,779 $ 25,793
======== ======== ======= ========
F-9
<PAGE>
THERMALTEC INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30,1999,1998 AND 1997
AND FOR THE THREE MONTHS ENDED DECEMBER 31,1999 (UNAUDITED)
5. PROPERTY AND EQUIPMENT
Major classes of property and equipment consist of the following:
<TABLE>
<CAPTION>
For the period Ended:
Estimated useful September 30, December 31,
Life-years 1997 1998 1999 1999
---------------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Machinery, equipment and furniture 5-10 $ 176,121 $ 145,523 $ 185,879 $185,879
Leasehold improvements 5-31.5 51,104 40,120 40,120 40,120
--------- --------- --------- --------
227,225 185,643 225,999 225,999
Less accumulated depreciation and
amortization 46,244 65,926 81,749 87,077
--------- --------- --------- --------
Net property and equipment $ 180,941 $ 119,717 $ 144,250 $138,922
========== ========== ========== =========
</TABLE>
Depreciation for the years ended September 30, 1999,1998 and 1997 was $
15,823 $ 30,597 and $ 26,362, respectively. For the three months ended
December 3l, 1999, depreciation was $ 5,328.
6. LONG TERM DEBT
<TABLE>
<CAPTION>
For the period Ended:
September 30, December 31,
1997 1998 1999 1999
-------- -------- -------- -------
<S> <C> <C> <C> <C>
Line of credit - bank, $25,000 available, payable on
demand. In September, 1999, this was converted into
a term loan $24,977 $24,977 $ 0 $ 0
Note payable - bank, due in monthly installments of $687
plus interest at prime plus 3%, expiring September, 2002,
This note is secured by substantially all of the Company's assets 0 0 24,749 $ 22,687
Various equipment notes with terms expiring December, 1999
through September, 2003. The loans provide for monthly payments
of principal and interest. Interest rates range from 15-18%. 57,882 40,288 45,180 40,974
-------- -------- -------- -------
82,859 65,259 69,929 63,661
Less current maturities 42,114 44,495 25,639 26,604
-------- -------- -------- -------
Long term debt $ 40,745 $ 20,764 $ 44,290 $37,057
======== ======== ======== =======
</TABLE>
7. SHAREHOLDER LOAN
This amount represents the total due to certain shareholders of $425,904,
$105,642, and $ 103,667 as of September 30, 1999, 1998 and 1997,
respectively. At December 31, 1999, the total due was 447,571. This loan
has no maturity and bears no interest.
8. SALES TO MAJOR CUSTOMERS
For the year ending September 30, 1999, one customer accounted for 39% of
the Company's sales and 63% of accounts receivable. For the year ending
September 30, 1998, one customer accounted for 10% of the Company's sales
and 7% of accounts receivable. For the year ending September 30, 1997, one
customer accounted for 32% of sales and 47% of the Company's accounts
receivable balance. During the three months ended December 31, 1999, one
customer accounted for 37% of sales and 15 % of accounts receivable.
9. COMMITMENTS AND CONTINGENCIES
LEASES
TCR is currently obliged under a lease through January 2003 for its office
space and shop space in Costa Rica. The lease calls for an annual rent of $
24,276, due in monthly payments.
TTI was obliged under a lease for its office space in West Babylon, NY,
which expired July 1998 for a minimum annual rental of $ 13,200. TTI
currently occupies this space on a month-to-month basis at a minimum annual
rental of $13,800.
F-10
<PAGE>
THERMALTEC INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30,1999,1998 AND 1997
AND FOR THE THREE MONTHS ENDED DECEMBER 31,1999 (UNAUDITED)
Total rental expense under cancellable and noncancellable operating leases
was $30,196, $ 24,920 and $ 13,900 for the years ended September 30, 1999,
1998 and 1997, respectively. For the three months ended December 31, 1999,
total rental expense was $ 9,369.
Future minimum lease obligations under noncancellable leases are as
follows:
For the year ending,
September 30, 2000 $ 24,276
September 30, 2001 24,276
September 30, 2002 24,276
September 30, 2003 8,092
--------
Total $ 80,920
========
10. COMMON STOCK
September 30, December 31,
1997 1998 1999 1999
---- ---- ---- ----
Common stock is as follows:
Common stock, $.0001 par
value, 10,000,000 shares
authorized.
Shares issued and
outstanding 2,050,751 2,397,351 2,608,118 2,608,118
Par Value $205 $239 $261 $261
Common Stock:
During the year ended September 30, 1997, the Company issued 16,001 shares
to outside providers of marketing services.
During the year ended September 30, 1998, the Company issued 58,000 shares
for services to outside consultants, as follows:
Number of Shares Amount
---------------- -------
Marketing services 27,000 shares $27,000
Technical services 25,000 shares 25,000
Financial services 4,000 shares 4,000
Registrar services 2,000 shares 2,000
During the year ended September 30, 1999, the Company issued 72,567 shares
to outside consultants, as follows:
Marketing services 35,067 shares $326,937
Legal services 21,000 shares 219,188
Financial & Administrative Services 16,500 shares 96,593
For the year ended September 30, 1998, the Company completed the issuance
of 271,600 shares of common stock at various prices of $ 0.75 to $ 1.50 per
share and carried with them a warrant granting the right to purchase, for
each share purchased, an additional share of Thermaltec common stock at a
price of $ 1.00 per share. The warrants expire on June 2, 2000. At
September 30, 1999 a total of 108,200 warrants had been exercised for an
equal number of shares. The proceeds from the sale of these shares, net of
registration fees, totaled $106,949.
The Company also issued 17,000 shares of common stock at the price of $1.00
per share.
On May 30, 1999, the Company authorized the sale of 1,000,000 shares of
common stock to be offered in private transactions of 1,000 Units,
representing 1,000 shares per Unit. Each Unit will consist of 1,000 Common
shares and 750 B Warrants and 500 C Warrants to purchase additional shares
of the Company. Such offering was filed with the State of New York
Department of Law. The Company utilized an exemption from the registration
provisions under Regulation D Rule 504, as amended, and sold in certain
States which permit the offering to take place. The exercise price of the
Warrants is $1.50 per B Warrant share and $2.00 per C Warrant share,
exercisable commencing one year from the termination date of the offering
for the B Warrant and two years from the termination date of the offering
for the C Warrant. The Warrants will expire two years after the date when
they can first be exercised. Stockholders will be notified of the official
termination date of the offering. The date will define the beginning time
period of the respective warrant exercise rights. During the year ended
September 30, 1999, the Company issued 30,000 shares of common stock in
lieu of cash repayment of a shareholder loan.
F-11
<PAGE>
THERMALTEC INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30,1999,1998 AND 1997
AND FOR THE THREE MONTHS ENDED DECEMBER 31,1999 (UNAUDITED)
11. INCOME TAXES
No provision for income taxes was recorded during the years ended September
30, 1999, 1998 and 1997, due to net losses being incurred. The Company does
not anticipate having taxable income at September 30, 2000 and has not
provided for a tax liability on an interim basis. At September 30, 1999,
the Company had net operating loss carryforwards for tax purposes of
approximately $ 1,800,000 which would expire in 2014.
The Company's effective tax rate in 1997, 1998 and 1999 differs from the
federal statutory rate as a result of a full valuation allowance being
provided against gross deferred tax assets.
Deferred tax assets consist of the following components at:
September 30:
1997 1998 1999
---- ---- ----
Net operating loss carryforwards $252,200 $382,000 $760,900
Less: valuation allowance 252,200 382,000 760,900
-------- -------- --------
Total deferred $ $ $
======== ======== ========
At September 30, 1999, 1998 and 1997 and at December 31, 1999, the Company
provided a full valuation allowance against the gross deferred tax asset
since, in management's judgment, it is more likely than not, such benefits
will not be realized.
12. GEOGRAPHIC INFORMATION
The Company's revenues from external customers is derived from the
following geographic markets:
For the three
For the year ended months ended
September 30: December 31:
1997 1998 1999 1999
---- ---- ---- ----
United States (excluding
Puerto Rico) $341,604 $ 91,560 $217,778 $21,933
Costa Rica 100,660 179,367 191,209 35,124
Puerto Rico -- 4,919 -- --
Dominican Republic -- -- -- --
-------- -------- -------- -------
Total $442,264 $275,846 $408,987 $57,057
======== ======== ======== =======
13. SUBSEQUENT EVENTS
On January 31, 2000, the Company signed a letter of intent to acquire the
assets of Edge Management Inc. Edge Management is a privately-held firm in
the Professional Employers Organization industry; it has current annual
revenues of $ 43 million. The sale will be consummated by the issuance of
400,000 shares of Thermaltec common stock. The completion of the
acquisition is subject to the usual due diligence process and any
regulatory filings that may be required.
On January 31, 2000, the Company signed a letter of intent to acquire one
million shares, representing 10% of the outstanding shares of I(x)
Partners, Ltd. I(x), based in Salem, NH, is active in the field of
information technology, with a special emphasis on developing and enhancing
real-time data processing systems by means of the Internet. The acquisition
will be effected by the exchange of 200,000 shares of Thermaltec common
stock. The completion of the acquisition is subject to the usual due
diligence process.
On February 4, 2000, the Company signed a letter of intent to acquire the
assets of High Velocity Technology Inc., a privately held company in the
thermal spray industry. The acquisition of High Velocity will be
consummated by the exchange of 150,000 common shares of Thermaltec and $
50,000 in cash for all of the assets of High Velocity. The completion of
the acquisition is subject to the usual due diligence process and any
required regulatory filings.
On February 14, 2000, the Company signed a letter of intent to acquire the
assets of Viaplex Communications, Inc. an Information Technology
professional services company with specialized expertise in the design,
implementation and support of enterprise multi-service networks and
applications. The acquisition of Viaplex will be consummated by the
exchange of 80,000 common shares of Thermaltec for all of the assets of
Viaplex. The completion of the acquisition is subject to the usual due
diligence process and any required regulatory filings.
F-12
<PAGE>
ITEM 24. Indemnification of Officers and Directors
At present we have not entered into individual indemnity agreements with
our Officers or Directors. However, our By-Laws and Certificate of Incorporation
provide a blanket indemnification that we shall indemnify, to the fullest extent
under Delaware law, our directors and officers against certain liabilities
incurred with respect to their service in such capabilities. In addition, the
Certificate of Incorporation provides that the personal liability of our
directors and officers and our stockholders for monetary damages will be
limited.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to our directors, officers and controlling persons pursuant to
the foregoing provisions, or otherwise, we have been advised that in the opinion
of the Securities and Exchange Commission, such indemnification is against
public policy as expressed in the Securities Act of 1933, as amended, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by us of expenses incurred or paid by a
director, officer or controlling person 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, we will, unless in the
opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933, as amended, and we will be governed by the final adjudication of
such case.
ITEM 26. Recent Sales of Unregistered Securities.
(a) Unregistered Securities Sold
The following sets forth information relating to all previous
sales of common stock by the Registrant which sales were not
registered under the Securities Act of 1933.
First Private Placement Offering:
On February 9, 1995, the Company authorized the sale and
placement of 1,000,000 shares of common stock to be offered in
private transactions for 1,000,000 in Units of $1,000 for 1 Unit
which consists of 1,000 shares ($1.00 per share). Such offering,
as contained herein, utilizes the exemption from the registration
provisions under Regulation D Rule 504, and certain States Rules
<PAGE>
where the offering took place. The offering terminated with the
sale of 525,259 shares of common stock.
Second Private Placement:
In September of 1998 the Company sold Units in a private
placement pursuant to Regulation D 504. Each purchasing Unit
consisted of 1,000 shares of Common Stock, and 1,000 stock
purchasing warrants at a price of $1,000 per purchasing Unit. The
shares underlying the warrants were exercisable at $1.00 per
warrant share. The offering terminated with the sale of 272,000
Units.
Offering:
On May 30, 1999, the Company authorized the sale of 1,000,000
shares of common stock to be offered in private transactions for
1,000,000 in Units of $1,000 for 1 Unit, which consists of 1,000
shares ($1.00 per share) and 750 B Warrants and 500 C Warrants to
purchase additional shares of the company. Such offering, was
filed with the State of New York, Department of Law. The Company
utilized an exemption from the registration provisions under
Regulation D Rule 504, as amended, and sold in certain States
which permit the offering to take place.
Warrants:
There is no cost basis on the warrants to the purchasers of the
Units offered as referred to in the Offering aforementioned. The
exercise price for the warrants is $1.50 per B warrant share and
$2.00 per C warrant share exercisable commencing one year from
the termination date of the offering for the B warrant and two
years from the termination date of the offering for the C
warrant. The warrants will expire two years after the date where
they can first be exercised. The warrants are detachable from the
Units immediately upon issuance. Stockholders will be notified of
the official termination date of the offering. This date will
define the beginning time period of the respective warrant
exercise rights.
All investors had the opportunity to ask questions and receive
answers from all of our officers, directors and employees. In
addition, they had access to review all of our corporate records
and material contracts and agreements.
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Act of 1934, the registrant
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
(Registrant) THERMALTEC INTERNATIONAL, INC.
Date By
--------------------------- ----------------------------------
Andrew Mazzone, President and
Chairman of the Board of Directors
<PAGE>
ITEM 27. - EXHIBITS
Index to Exhibits
- - --------------------------------------------------------------------------------
EXHIBITS
SEC REFERENCE TITLE OF DOCUMENT LOCATION
NUMBER
- - --------------------------------------------------------------------------------
3.1 Articles of Incorporation This filing page
- - --------------------------------------------------------------------------------
3.2 Amendment to Articles This filing page
- - --------------------------------------------------------------------------------
3.3 Bylaws This filing page
- - --------------------------------------------------------------------------------
10.1 Lease Agreement on the premises This filing page
Babylon, N.Y.
- - --------------------------------------------------------------------------------
10.2 Lease Agreement on the premises This filing page
- - --------------------------------------------------------------------------------
10.3 Letters of Intent This filing page
- - --------------------------------------------------------------------------------
11.1 Statement re: Computation This filing page
of per share earnings
- - --------------------------------------------------------------------------------
21.1 Subsidiaries of Thermaltec This filing page
- - --------------------------------------------------------------------------------
27.1 Financial Data Schedule This filing page
- - --------------------------------------------------------------------------------
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 11/17 1994
944222493 - 2453657
CERTIFICATE OF INCORPORATION
OF
THERMALTEC INTERNATIONAL, CORP.
FIRST: The name of the corporation is:
THERMALTEC INTERNATIONAL, CORP.
SECOND: Its registered office in the State of Delaware is located at 25
Greystone Manor, Lewes, Delaware 19958-9776, County of Sussex. The registered
agent in charge thereof is Harvard Business Services, Inc.
THIRD: The purpose of the corporation is to engage in any lawful activity
for which corporations may be organized under the General Corporation Law of
Delaware.
FOURTH: The total number of shares of stock which the corporation is
authorized to issue is 10,000,000 shares having a par value of $ 0.0001 per
share.
FIFTH: The business and affairs of the corporation shall be managed by or
under the direction of the board of directors, and the directors need not be
elected by ballot unless required by the bylaws of the corporation.
SIXTH: This corporation shall be perpetual unless otherwise decided by a
majority of the Board of Directors.
SEVENTH: In furtherance and not in limitation of the powers conferred by
the laws of Delaware, the board of directors is authorized to amend or repeal
the bylaws.
EIGHTH: The corporation reserves the right to amend or repeal any provision
in this Certificate of Incorporation in the manner prescribed by the laws of
Delaware.
NINTH: The incorporator is Harvard Business Services, Inc., whose mailing
address is 25 Greystone Manor, Lewes, DE 19958-9766. The powers of the
incorporator are to file this certificate of incorporation, approve the by-laws
of the corporation and elect the initial directors.
TENTH: To the fullest extent permitted by the Delaware General Corporation
Law a director of this corporation shall not be liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director.
I, Richard H. Bell, for the purpose of forming a corporation under the laws
of the State of Delaware do make and file this certificate, and do certify that
the facts herein stated are true; and have accordingly signed below, this 17th
day of November, 194.
Signed and Attested to by: /s/ Richard H. Bell
---------------------------------
Richard H. Bell, President & Secretary
HARVARD BUSINESS SERVICES, INC.
[STAMP]
[GRAPHIC] [LOGO] TTI
August 2, 1999
Re: Approval of Amendment to Certificate of Incorporation and Adoption of Stock
Option Plan
Dear Shareholder:
I am writing to inform you that Thermaltec International, Corp. (the "Company")
has received written consents, executed by the holders of more than 56% of the
outstanding shares of the Company's Common Stock, approving the adoption of (a)
an amendment (the "Amendment") to the Company's Certificate of Incorporation to
increase the number of authorized shares of the Company's Common Stock from
10,000,000 to 100,000,000, and (b) a Stock Option Plan (the "Plan") which would
permit the Company to issue options to purchase up to 10,000,000 shares of the
Company's Common Stock to the Company's directors, employees and certain
consultants. Approval of the Amendment and the Plan requires the written consent
of the holders of at least 50% of the outstanding shares of the Company's Common
Stock.
As required by the provisions of the Delaware General Corporation Law, the
Company is hereby notifying all non-consenting Company shareholders that it has
received the necessary shareholder approvals for the adoption of the Amendment
and the Plan. The effective date for shareholder approval of the Amendment and
the Plan was July 7, 1999.
The Company currently anticipates the calling of a special meeting of the
shareholders of the Company, to be held within the next 60 days, to vote upon a
proposal to approve and adopt an Agreement and Plan of Reorganization by and
among the Company, Solar Communications Group, Inc., and Andrew B. Mazzone. You
will be receiving further information from the Company concerning this meeting
in the near future.
For informational purposes, a copy of this notice is also being mailed to each
Company shareholder who consented to tile adoption of the Ameadmeni and the
Plan. Management of the Company sincerely thanks you for your support.
Very truly yours,
Andrew B. Mazzone
President
Charter Amendment
<PAGE>
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF INCORPORATION
OF
THERMALTEC INTERNATIONAL CORP.
TO: THE SECRETARY OF STATE
STATE OF DELAWARE
Pursuant to the provisions of Section 242 of the General Corporation Law,
this Certificate of Amendment is being filed in order to amend the Certificate
of Incorporation of THERMALTEC INTERNATIONAL, CORP., a Delaware corporation (the
"Corporation"), as set forth below:
I. The name of the corporation is THERMALTEC INTERNATIONAL CORP.
II. The Certificate of Incorporation is herebe amended as follows:
Article Fourth of the Certificate of Incorporation is amended to read in
its entirety as follows:
"The total number of shares of stock which the
corporation is authorized to issue is 100,000,000 shares
par value of $0.001 per share."
III. In lieu of a meeting and vote of stockholders, the stockholders have
given written consent to said amendment in accordance with the provisions of
Section 228 of the General Corporation Law of the State of Delaware and written
notice of adoption of the amendment has been given as provided in Section 228 of
the General Corporation Law of the State of Delaware to every stockholder
entitled to such notice.
<PAGE>
V. This Certificate of Amendment to the Certificate of Incorporation of
the Corporation has been duly adopted in accordance with the provisions of
Sections 242 and 228 of the Delaware General Corporation Law.
VI. The amendment shall be effective upon the filing hereof.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Amendment as of the 29th day of July, 1999.
THERMALTEC INTERNATIONAL, CORP.
Attested:____________________________ By: /s/ Andrew B. Mazzone
-------------------------
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
THERMALTEC INTERNATIONAL, INC.
------------------------------
THERMALTEC INTERNATIONAL, INC. , a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware, DOES
HEREBY CERTIFY:
FIRST: That the Board of Directors of said corporation at a meeting duly
convened and held, adopted the following resolution:
RESOLVED that the Board of Directors hereby declares it advisable and in
the best interest of the Company that Article Fourth of the Certificate of
Incorporation be amended to read as follows:
FOURTH: The total number of shares of stock which this corporation is
authorized to issue is:
TEN MILLION (10,000,000) AT $.001 PAR VALUE
SECOND: That the said amendment has been consented to and authorized by the
holders of a majority of the issued and outstanding stock entitled to vote by
written consent given in accordance with the provisions of Section 228 of the
General Corporation Law of the State of Delaware.
THIRD: That the aforesaid amendment was duly adopted in accordance with the
applicable provisions of Sections 242 and 228 of the General Corporation Law of
the State of Delaware.
IN WITNESS WHEREOF, said corporation has caused this Certificate to be
signed by Andrew B. Mazzone this 11th day of January A.D. 2000.
/s/ Andrew B. Mazzone
-------------------------
Authorized Officer
<PAGE>
Certificate of Authority
[STAMP]
[GRAPHIC]
Identification Number
113255619
(Use this number on all returns and correspondence)
THERMALTEC INTERNATIONAL, CORPORATION
68A LAMAR ST
WEST BABYLON, NY 11704
is authorized to collect sales and use taxes under Articles 28 and 29 of the New
York State Tax Law
Not Transferable
This certificate must be prominently displayed in your place of
business listed above. Fraudulent or other improper use of this
certificate may cause it to be revoked. This certificate may
not be photocopied or reproduced.
DTF-17 C (9/95)
BY-LAWS
OF
THERMALTEC INTERNATIONAL CORP.
ARTICLE I - OFFICES
Section 1. The registered office of the Corporation in the State of
Delaware Shall at
25 Greystone Manor
Lewes, Delaware 19958
Sussex County
The registered agent in charge thereof shall be
Harvard Business Services, Inc.
Section 2. The Corporation may also have offices at such other places as
the Board of Directors from time to time appoint or the business of the
corporation may require.
ARTICLE II - SEAL
Section 1. The corporate seal shall have inscribed thereon the name of the
corporation, year of its organization and the words "Corporate Seal, Delaware".
ARTICLE III - STOCKHOLDERS' MEETINGS
Section 1. Meetings of stockholders shall be held at the registered office
of the corporation in this state or at such place, either within or without this
state, as may be selected from time to time by the Board of Directors.
Section 2. Annual Meetings. The annual meeting of the stockholders shall be
held on the 15th day of MAY in each year if not a legal holiday, and if a legal
holiday, then on the next secular day following at 10 O'Clock A.M. when they
shall elect a Board of Directors and transact such other business as may
properly be brought before the meeting. If the annual meeting for election for
Directors is not held on the date designated therefore, the directors shall
cause the meeting to be held as soon thereafter as convenient.
-1-
<PAGE>
Section 3. Election of Directors: Election of Directors of the corporation
SHALL be by written Ballot.
Section 4. Special Meetings: Special Meetings of the stockholders may be
called at any time by the President, or the Board of Directors, or stockholders
entitled to cast at least one-fifth of the votes which all stockholders are
entitled to cast at the particular meeting. At any time, upon written request of
any person or persons who have duly called a special meeting, it shall be the
duty of the Secretary to fix the date of the meeting, to be held not more than
sixty days after receipt of the request, and to give due notice thereof. If the
Secretary shall neglect or refuse to fix the date of the meeting and give notice
thereof, the person or persons calling the meeting may do so.
Business transacted at all special meetings shall be confined to the
subjects stated in the call and matters germane thereto, unless all stockholders
entitled to vote are present and consent.
Written notice of a special meeting of stockholders stating the time and
place and subject thereof, shall be given to each stockholder entitled to vote
thereat, at least 10 days before such meeting, unless a greater period of notice
is required by statute in a particular case.
Section 5. Quorum: A majority of outstanding shares of the corporation
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of stockholders. If less than a majority of the outstanding shares
entitled to vote is represented at a meeting, a majority of the shares so
represented may adjourn the meeting at which a quorum shall be present or
represented, any business may be transacted which might have transacted at the
meeting
-2-
<PAGE>
as originally noticed. The stockholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough stockholders to leave less than a quorum.
Section 6. Proxies: Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him by
proxy, but no such proxy shall be voted or acted upon after three years from its
date, unless the proxy provides for longer period.
A duly executed proxy shall be irrevocable if it states that it is
irrevocable and if, and only as long as, it is coupled with an interest
sufficient in law to support an irrevocable power. A proxy may be made
irrevocable regardless of whether the interest with which it is coupled is an
interest in the stock itself or an interest in the corporation generally. All
proxies shall be filed with the Secretary of the meeting before being voted
upon.
Section 7. Notice of Meetings: Whenever stockholders are required or
permitted to take any action at a meeting, a written notice of the meeting shall
be given which shall state the place, date and hour of the meeting, and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called.
Unless otherwise provided by law, written notice of any meeting shall be
given not less than ten nor more than sixty days before the date of the meeting
to each stockholder entitled to vote at such meeting.
-3-
<PAGE>
Section 8. Consent in lieu of Meetings: Any action required to be taken at
any annual or special meeting of stockholders of a corporation, or any action
which may be taken without a meeting, without prior notice and without a vote,
if a consent in writing, setting forth the action taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted. Prompt notice of the
taking of the corporate action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not consented in writing.
Section 9. List of Stockholders: The officer who has charge of the stock
ledger of the corporation shall prepare and make, at least ten days before every
meeting of stock holders, a complete list of the stockholders entitled to vote
at the meeting, arranged in alphabetical order, and showing the address of each
stockholder. No share of stock upon which any installment is due and unpaid
shall be voted at any meeting. The list shall be open to examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten days prior to the meeting, either at the
place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list shall also be produced and kept at the
time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
-4-
<PAGE>
ARTICLE IV - DIRECTORS
Section 1. The business and affairs of this corporation shall be managed by
its Board of Directors, 1 minimum and 7 maximum in number. The Directors need
not be residents of this state or stockholders at the annual meeting of
stockholders of the corporation, and each director shall be elected for the term
of one year, and until his successor shall be elected and shall qualify or until
his resignation or removal.
Section 2. Regular Meetings: Regular meetings of the Board shall be held
without notice at the registered office of the corporation, or at such other
time and place as shall be determined by the Board.
Section 3. Special Meetings: Special Meetings of the Board may be called by
the President on a 10 days notice to each Director, either personally or by mail
or by telegram; special meetings shall be called by the President or Secretary
in the like manner and on like notice on the written request of the majority of
the Directors in office.
Section 4. Quorum: A majority of the total number of Directors shall
constitute a quorum for the transaction of business.
Section 5. Consent in Lieu of Meetings: Any action required or permitted to
be taken at any meeting of the Board of Directors, or of any committee thereof,
may be taken without a meeting if all members of the Board or committee, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the Board or committee. The Board of
Directors may hold its meetings, and have an office or offices, outside of this
state.
-5-
<PAGE>
Section 6. Conference Telephone: One or more Directors may participate in a
meeting of the Board, of a committee of the Board or of the stockholders, by
means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other;
participation in this manner shall constitute presence in person at such
meeting.
Section 7. Compensation: Directors as such, shall not receive any stated
salary for their services, but by resolution of the Board, a fixed sum and
expenses of attendance, if any. may be allotted for attendance at each regular
or special meeting of the Board PROVIDED, that nothing herein contained shall be
construed to preclude any Director from serving the corporation in an capacity
and receiving compensation thereof.
Section 6. Removals: Any Director or the entire Board of Directors may be
removed, with or without cause, by the holders of a majority of the shares then
entitled to vote at an election of Directors, except that when cumulative voting
is permitted, if less than the entire Board is to be removed, no Director may be
removed without cause if the votes cast against his removal would be sufficient
to elect him if then cumulatively voted at an election of the entire Board of
Directors, or if there be classes of Directors, at an election of the class of
Directors of which he is a part.
ARTICLE V - OFFICERS
Section 1. The executive officers of the corporation shall chosen by the
directors and shall be a President, Secretary and Treasurer. The Board of
Directors may also choose a Chairman, one or more Vice Presidents and such other
officers as it shall deem necessary. Any number of officers may be held by the
same person.
-6-
<PAGE>
Section 2. Salaries: Salaries of all officers and agents of the corporation
shall be fixed by the Board of Directors.
Section 3. Term of office: The officers of the corporation shall hold
office for one year and until their successors are chosen and have qualified.
Any officer or agent elected or appointed by the board may be removed by the
Board board of Directors whenever in its judgment the best interest of the
corporation will be served thereby.
Section 4. President: The president shall be the chief executive officer of
the corporation; he shall preside at all meetings of the stockholders and
directors; he shall have general and active management of the business of the
corporation, shall see that all orders and resolutions of the board are carried
into effect, subject, however to the right of the Directors to delegate any
specific powers, except such as may be by statute exclusively conferred on the
president, to any other officer or officers of the corporation. He shall execute
bonds, mortgages and other contracts requiring a seal, under the seal of the
corporation. He shall be EX-OFFICIO a member of all committees, and shall have
general power and duties of supervision and management usually vested in the
office of President of a corporation.
Secretary 5. Secretary: The secretary shall attend all sessions of the
Board and all meetings of stockholders and act as clerk thereof, and record all
the votes of the corporation and the minutes of all its transactions in a book
to be kept for that purpose, and shall perform like duties for all committees of
the Board of Directors when required. He shall give, or cause to be given,
notice of all meetings of the
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<PAGE>
stockholders and of the Board of Directors, and shall perform such other duties
as may be prescribed by the Board of Directors or President, and under whose
supervision he shall be. He shall keep in a safe custody the corporate seal of
the corporation, and when authorized by the Board, affix the same to any
instrument requiring it.
Section 6. Treasurer: The treasurer shall have custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation, and shall keep the moneys
of the corporation in a separate account to the credit of the corporation. He
shall disburse the funds of the corporation an may be ordered by the Board,
taking proper vouchers for such disbursements, and shall render to the President
and Directors, at the regular meetings of the Board, or whenever they may
require it, an account of all his transactions as treasurer and of the financial
condition of the corporation.
ARTICLE VI - VACANCIES
Section 1. Any vacancy occurring in any office of the corporation by death,
resignation, removal or otherwise, shall be filled by the Board of Directors.
Vacancies and newly created directorships resulting from any increase in
authorized number of Directors may be filled by a majority of the Directors then
in office, although less than a quorum, or by sole remaining Director. If at any
time, by reason of death or resignation or other cause, the corporation should
have no directors in office, then any officer or any stockholder or an executor,
administrator, trustee or guardian of a stockholder, or
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<PAGE>
other fiduciary entrusted with the responsibility for the person or estate of a
stockholder, may call a special meeting of stockholders in accordance with the
provisions of these By-Laws.
Section 2. Resignations Effective at Future Date: When one or more
Directors shall resign from the Board, effective at some future date, a majority
of Directors then in office, including those who have resigned, shall have power
to fill such vacancy or vacancies, the vote thereon to take effect when such
resignation or resignations shall become effective.
ARTICLE VII - CORPORATE RECORDS
Section 1. Any stockholder of record, in person or by attorney or other
agent, shall, upon written demand under oath stating the purpose thereof, have
the right during the usual hours for business to inspect for any purpose the
corporations stock ledger, a list of its stockholders, and its other books and
records, and to make copies or extract therefrom. A purpose shall mean a purpose
reasonably related to such person's interest as a stockholder. In every instance
where an attorney or other agent shall be the person who seeks the right to
inspection, the demand under oath shall be accompanied by a power of attorney or
such other writing which authorizes the attorney or other agent to so act on
behalf of the stockholder. The demand under oath shall be directed to the
corporation at its registered office in this state or at its principal place of
business.
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<PAGE>
ARTICLE VIII - STOCK CERTIFICATES, DIVIDENDS, ETC.
Section 1. The stock certificates of the corporation shall be numbered and
registered in the share ledger and transfer books of the corporation as they are
used. they shall bear the corporate seal and shall be signed by the President
and Secretary
Section 2. Transfers: Transfers of shares shall be made on the books of the
corporation upon surrender of the certificates thereof, endorsed by the person
named in the certificate or by attorney, lawfully constituted in writing. No
transfer shall be made which is inconsistent with law.
Section 3. Lost Certificates: The corporation may issue a new certificate
of stock in place of any certificate therefore signed by it, alleged to have
been lost, stolen or destroyed, and the corporation may require the owner of the
lost, stolen or destroyed certificate, or his legal representative, to give the
corporation a bond to indemnify it against any claim that may be made against it
on account of the alleged loss, theft or destruction of any such certificate or
the issuance of such new certificate.
Section 4. Record Date: In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
lawful action, the Board of Directors may fix, in advance, a record date, which
shall not be more than sixty days nor less than ten days prior to any other
action.
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<PAGE>
If no record date is fixed:
(a) The record date for determining stockholders entitled to notice of or
to vote at a meeting of stockholders shall be at the close of business on the
day next preceding the day on which notice is given, or, if notice is waived, at
the close of business on the day next preceding the day on which the meeting is
held.
(b) The record date for determining stockholders entitled to express
consent to corporate action in writing without a meeting, when no priur action
by the Board of Directors is necessary, shall be on the day on which the first
written consent is expressed.
(c) The record date for determining stockholders for any other purpose
shall be at the close of business on the day on which the Board of Directors
adopts the resolution relating thereto.
(d) A determination of stockholders of record entitled to notice of or vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjournment meeting.
Section 5. Dividends: The Board of Directors may declare and pay dividends
upon the outstanding shares of the corporation from time to time and to such
extent as they deem advisable, in the manner and upon the terms and conditions
provided by statute and the certificate of Incorporation.
Section 6. Reserves: Before payment of any dividend there may be set aside
out of the net profits of the corporation such sums as the Directors, from time
to time, in their absolute discretion, think
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<PAGE>
proper as a reserve fund to meet contingencies, or for equalizing dividends, or
for repairing or maintaining any property of the corporation, or for such other
purposes as the Directors shall think conducive to the interests of the
corporation, and the Directors may abolish any such reserve in the manner in
which it was created.
ARTICLE IX - MISCELLANEOUS PROVISIONS
Section 1. All checks or demands for money and notes Of the corporation
shall be signed by such officer or officers as the Board of Directors may from
time to time designate.
Section 2. Fiscal Year: The fiscal year shall begin on the first day of
JANUARY
Section 3. Notice: Whenever written notice is required to be given to any
person, it may be given to such person, either personally or by sending a copy
thereof through the mail, or by telegram, charges prepaid, to his address
appearing on the books of the corporation, or supplied by him to the corporation
for the purpose of notice. If the notice is sent by mail or by telegraph, it
shall be deemed to have been given to the person entitled thereto when deposited
in the United States mail or with a telegraph office for transmission to such
person. Such notice shall specify the place, day and hour of the meeting and, in
the case of a special meeting of stockholders, the general nature of the
business to be transacted.
Section 4. Waiver of Notices: Whenever any written notice is required by
statute, or by the Certificate or the By-Laws of this corporation a waiver
thereof in writing, signed by the person or persons entitled to such notice,
whether before or after the time
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<PAGE>
stated therein, shall be deemed equivalent to giving of such notice. Except in
the case of a special meeting of stockholders, neither the business to be
transacted at nor the purpose of the meeting need be specified in the waiver of
notice of such meeting. Attendance of a person either in person or by proxy, at
any meeting shall constitute a waiver of notice of such meeting, except where a
person attends a meeting for the express purpose of objecting to the transaction
of any business because the meeting was not lawfully called or convened.
Section 5. Disallowed Compensation: Any payments made to an officer or
employee of the corporation such as salary, commission, bonus, interest, rent,
travel or entertainment expense incurred by him, which shall be disallowed in
whole or in part as a deductible expense by the Internal Revenue Service, shall
be reimbursed by such officer or employee to the corporation to the full extent
of such disallowance. It shall be the duty of the Directors, as a Board, to
enforce payment of each such amount disallowed. In lieu of payment by the
officer or employee, subject to the determination of the Directors,
proportionate amounts may be withheld from future compensation payments until
the amount owed to the corporation has been recovered.
Section 6. Resignations: Any Director or other officer may resign at
anytime, such resignation to be in writing, and to take effect from the time of
its receipt by the corporation, unless some time fixed in the resignation and
then from that date. The acceptance of a resignation shall be required to make
it effective.
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<PAGE>
ARTICLE X - ANNUAL STATEMENT
Section 1. The President and the Board of Directors shall present at each
annual meeting a full complete statement of the business and affairs of the
corporation for the preceding year. Such statement shall be prepared and
presented in whatever manner the Board of Directors shall deem advisable and
need not be verified by certified public accountant.
ARTICLE XI - AMENDMENTS
Section 1. These By-Laws may be amended or repealed by the vote of
stockholders entitled to cast at least a majority of votes which all
stockholders are entitled to cast thereon, at any regular or special meeting of
stockholders, duly convened after notice to the stockholders of the purpose.
THERMALTEC INTERNATIONAL, CORP.
By: /s/ Andew Mazzone
-----------------------------
Andew Mazzone/Pres/Sec/treas
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This Lease made the 20th day of July 1995, between RAYMOND V. ROMANO, 25
Carlough Road, Bohemia, NY 11716 hereinafter referred to as LANDLORD, and
THERMALTECH INTERNATIONAL, INC., 513 Dryden Street, Westbury, New York 11590
hereinafter jointly, severally and collectively referred to as TENANT.
Witnesseth, that the Landlord hereby leases to the Tenant, and the Tenant,
hereby hires and takes from the Landlord approximately 2,000 square feet in the
building known as 68 Lamar Street (Unit A) , West Babylon, NY 11704 to be used
and occupied by the Tenant for office, warehouse and light industry.
and for no other purpose, for a term to commence on August 1, 1995, and to end
on July 31, 1998, unless sooner terminated as hereinafter provided, at the
ANNAUL RENT of
YEAR 1: $12,000.00 YEARLY......................................$1,000.00 MONTHLY
YEAR 2: $12,600.00 YEARLY......................................$1,050.00 MONTHLY
YEAR 3: $12,600.00 YEARLY .....................................$1,050.00 MONTHLY
all payable in equal monthly instalments in advance on the first day of each and
every calendar month during said term, except the first instalment, which shall
be paid upon the execution hereof.
THE TENANT JOINTLY AND SEVERALLY COVENANTS:
FIRST.--That the Tenant will pay the rent as above provided.
REPAIRS
ORDINANCES AND VIOLATIONS
ENTRY
INDEMNIFY LANDLORD
SECOND.-- That, throughout said term the Tenant will take good care of the
demised premises, fixtures and appurtenances, and all alterations, additions and
improvements to either; make all repairs in and about the same necessary to
preserve them in good order and condition, which repairs shall be, in quality
and class, equal to the original work; promptly pay the expense of such repairs;
suffer no waste or injury; give prompt notice to the Landlord of any fire that
may occur; execute and comply with all laws, rules, orders, ordinances and
regulations at any time issued or in force (except those requiring structural
alterations), applicable to the demised premises or to the Tenant's occupation
thereof, of the Federal, State and Local Governments, and of each and every
department, bureau and official thereof, and of the New York Board of Fire
Underwriters; permit at all times during usual business hours, the Landlord and
representatives of the Landlord to enter the demised premises for the purpose of
inspection, and to exhibit them for purposes of sale or rental; suffer the
Landlord to make repairs and improvements to all parts of the building, and to
comply with all orders and requirements of governmental authority applicable to
said building or to any occupation thereof; suffer the Landlord to erect, use,
maintain, repair and replace pipes and conduits in the demised premises and to
the floors above find below; forever indemnify and save harmless the Landlord
for and against any and all liability, penalties, damages, expenses and
judgments arising from injury during said term to person or property of any
nature, occasioned wholly or in part by any act or acts, omission or omissions
of the Tenant, or of the employees, guests, agents, assigns or undertenants of
the Tenant and also for any matter or thing growing out of the occupation of the
demised premises or of the streets, sidewalks or vaults adjacent thereto;
permit, during the six months next prior to the expiration of the term the usual
notice "To Let" to be placed and to remain unmolested in a conspicuous place
upon the exterior of the demised premises; repair, at or before the end of the
of the term, all injury done by the installation or removal of furniture and
property; and at the end of the term, to quit and surrender the demised premises
with all alterations, additions and improvements in good order and condition.
MOVING INJURY SURRENDER
NEGATIVE COVENANTS
OBSTRUCTION SIGNS
AIR CONDITIONING
THIRD. -- That the Tenant will not disfigure or deface any part of the
building, or suffer the same to be done, except so far as may be necessary to
affix such trade fixtures as are herein consented to by the Landlord; the Tenant
will not obstruct, or permit the obstruction of the street or the sidewalk
adjacent thereto; will not do anything, or suffer anything to be done upon the
demised premises which will increase the rate of fire insurance upon the
building or any of its contents, or be liable to cause structural injury to said
building; will not permit the accumulation of waste or refuse matter, and will
not, without the written consent of the Landlord first obtained in each case,
either sell, assign, mortgage or transfer this lease underlet the demised
premises or any part thereof, permit the same or any part thereof to be occupied
by anybody other than the Tenant and the Tenant's employees; make any
alterations in the demised premises, use the demised premises or any part
thereof for any purpose other than the one first above stipulated, or for any
purpose deemed extra hazardous on account of fire risk, nor in violation of any
law or ordinance. That the Tenant will not obstruct or permit the obstruction of
the light, halls, stairway or entrances to the building, and will not erect or
inscribe any sign, signals or advertisements unless and until the style and
location thereof have been approved by the Landlord; and if any be erected or
inscribed without such approval, the Landlord may remove the same. No water
cooler, air conditioning unit or system or other apparatus shall be installed or
used without the prior written consent of Landlord.
IT IS MUTUALLY COVENANTED AND AGREED, THAT
FIRE CLAUSE
FOURTH.--If the demised premises shall be partially damaged by fire or other
cause without the fault or neglect of Tenant, Tenant's servants, employees,
agents, visitors or licensees, the damages shall be repaired by and at the
expense of Landlord and the rent until such repairs shall be made shall be
apportioned according to the part of the demised premises which is usable by
Tenant. But if such partial damage is due to the fault or neglect of Tenant,
Tenant's servants, employees, agents, visitors or licensees, without prejudice
to any other rights and remedies of Landlord and without prejudice to the rights
of subrogation of Landlord's insurer, the damages shall be repaired by Landlord
but there shall be no apportionment or abatement of rent. No penalty shall
accrue for reasonable delay which may arise by reason of adjustment of insurance
on the part of Landlord and/or Tenant, and for reasonable delay on account of
"labor troubles", or any other cause beyond Landlord's control. If the demised
premises are totally damaged or are rendered wholly untenantable by fire or
other cause, and if Landlord shall decide not to restore or not to rebuild the
same, or if the building shall be so damaged that Landlord shall decide to
demolish it or to rebuild it, then or in any of such events Landlord may, within
ninety (90) days after such fire or other cause, give Tenant a notice in writing
of such decision, which notice shall be given as in Paragraph Twelve hereof
provided, and thereupon the term of this lease shall expire by lapse of time
upon the third day after such notice is given, and Tenant shall vacate the
demised premises and surrender the same to Landlord. If Tenant shall not be in
default under this lease then, upon the termination of this lease under the
conditions provided for in the sentence immediately preceding, Tenant's
liability for rent shall cease as of the day following the casualty. Tenant
hereby expressly waives the provisions of Section 227 of the Real Property Law
and agrees that the foregoing provisions of this Article shall govern and
control in lieu thereof. If the damage or destruction be due to the fault or
neglect of Tenant the debris shall be removed by, and at the expense of, Tenant.
EMINENT DOMAIN
FIFTH.--If the whole or any part of the premises hereby demised shall be
taken or condemned by any competent authority for any public use or purpose then
the term hereby granted shall cease from the time when possession of the part so
taken shall be required for such public purpose and without apportionment of
award, the Tenant hereby assigning to the Landlord all right and claim to any
such award, the current rent, however, in such case to be apportioned.
LEASE NOT IN EFFECT
DEFAULTS
TEN DAY NOTICE
SIXTH.--If, before the commencement of the term, the Tenant be adjudicated
a bankrupt, or make a "general assignment," or take the benefit of any insolvent
act, or if a Receiver or Trustee be appointed for the Tenant's property, or if
this lease or the estate of the Tenant hereunder be transferred or pass to or
devolve upon any other person or corporation, or if the Tenant shall default in
the performance of any agreement by the Tenant contained in any other lease to
the Tenant by the Landlord or by any corporation of which an officer of the
Landlord is a Director, this lease shall thereby at the option of the Landlord,
be terminated and in that case, neither the Tenant nor anybody claiming under
the Tenant shall be entitled to go into possession of the demised premises. If
after the commencement of the term, any of the events mentioned above in this
subdivision shall occur, or if Tenant shall make default in fulfilling any of
the covenants of this lease, other than the covenants for the payment of rent or
"additional rent" or if the demised premises become vacant or deserted, the
Landlord may give to the Tenant ten days' notice of intention to end the term of
this lease, and thereupon at the expiration of said ten days (if said condition
which was the basis of said notice shall continue to exist) the term under this
lease shall expire as fully and completely as if that day were the date herein
definitely fixed for the expiration of the term and the Tenant will then quit
and surrender the demised premises to the Landlord, but the Tenant shall remain
liable as hereinafter provided.
CONSULTORES JURIDICO EMPRESARIALES
Asesores Legales
Lic. Federico J. Gonzalez Pena Lic. Leda Di Napoli Perera,MBA.
CONTRATO DE ARRENDAMIENTO
Entre nosotros, SOLEIL, SOCIEDAD ANONIMA, cedula juridica tres-ciento uno-
setenta y seis mil novecientos treinta y cinco, representada por su Presidente
con plenas facultades ROGELIO ULLOA SABORIO, mayor, casado una vez, empresario,
vecino de San Jose, de la Galera ochocientos metros este, carretera a Tres Rios,
portador de la cedula de identidad numero uno-trescientos cuarenta y
cuatro-cuatrocientos ochenta y uno, personeria que se encuentra debidamente
inscrita en la seccion mercantil del Registro Publico al tomo ochocientos
treinta y uno, folio ciento dieciocho, asiento doscientos veintidos, quien para
los efectos de este contrato se denominara la ARRENDANTE THERMALTEC DE COSTA
RICA SOCIEDAD ANONIMA, cedula juridica tres-ciento uno-ciento setenta y tres mil
setecientos trece, representada por su Vicepresidente con plenas facultades,
MARIO ALBERTO ESQUIVEL FUENTES, mayor casado en segundas nupcias, Mecanico,
vecino de Santo Domingo de Heredia, doscientos veinticinco metros sur de la Cruz
Roja, cedula de identidad uno-cuatrocientos veintiuno-quinientos sesenta y
nueve, personeria que se encuentra debidamente inscrita en la seccion mercantil
del Registro Publico al tomo novecientos diez, folio setenta y seis, asiento
ciento ocho, quien para efectos de este contrato se denominara la ARRENDATARIA,
hemos convenido celebrar el presente contrato de arrendamiento que se regira por
las siguientes clausulas y estipulaciones:
Primera: La ARRENDANTE es propietaria del inmueble inscrito en el Registro
Publico de la Propiedad, Partido de San Jose, folio real ciento cincuenta y seis
mil-cero cero cero; que es terreno para construir con un edificio suceptible de
ser dividido en bodegas independientes destinadas a servir de almacenes o
plantas industriales, sito en Pavas distrito noveno del canton primero de la
Provincia de San Jose.
Segunda: En este acto la ARRENDANTE da en arrendamiento a la ARRENDATARIA, una
bodega parte del inmueble antes descrito, identificada en el plano general del
edificio con el numero Uno-A-Sur, la cual se describe en la clausula siguiente.
Tercera: Bodega Numero Uno-A-Sur, construida con bloques de concreto, estructura
de acero y techo de laminas de hierro galvanizado. Linda al norte con la Bodega
numero dos, al sur con calle privada: al este con Bodega Uno-B-Sur: y al oeste
con calle publica. La bodega se encuentra equipada con dos servicios sanitarios
completos (modoro y lavamanos) y ducha.
En la pared del lindero sur frente a la calle privada hay un porton corredizo de
hierro de cuatro metros de alto por seis metros de ancho, frente a la calle
publica.
La bodega esta provista de oficinas de aproximadamente cincuenta y cinco metros
cuadrados de construccion con una bodega para almacenar materias primas.
El area total de la bodega dada en arrendamiento es de trescientos sesenta
metros cuadrados.
Cuarta: El plazo de este contrato es de tres anos, a partir del dia primero de
febrero de mil novecientos noventa y siete, fecha en la cual la ARRENDATARIA
tomara posesion de la bodega descrita. Dicho plazo sera prorrogable por periodos
iguales, en cuyo caso se renegociara un nuevo precio de alquiler. Las prorrogas
previstas se tendran por convenidas automaticamente si la ARRENDATARIA no
manifesta por escrito a la ARRENDANTE, con por lo menos treinta dias de
anticipacion al vencimiento del plazo, su decision de no prorrogar el contrato.
<PAGE>
Decima: La ARRENDATARIA no podra sin el permiso previo y escrito de la
ARRENDANTE, introducir modificaciones capaces de alterar o modificar la
estratura del local.
Decima primera: Las me joras que la ARRENDATARIA introduzca, con o sin el
consentimiento de la ARRENDANTE, quedaran a beneficio del inmueble, a la
terminacion del contrato, sin que la ARRENDANTE tenga que pagar suma alguna por
ellas. No obstante lo anterior, si la ARRENDANTE notificare por escrito a la
ARRENDATARIA, sobre la necesidad de remover tales mejoras, por lo menos veinte
dias antes de la terminacion del contrato, este debera efectuar esos trabajos
por cuenta propia, antes de entregar lo arrendado, procediendo a restaurarlo
hasta dejarlo en la misma condicion que lo recibio.
Decima segunda: La ARRENDATARIA no podra instalar o pintar rotulos sin el
permiso previo y escrito de la ARRENDANTE.
Decima tercera: La ARRENDANTE no asume responsabilidad civil por los accidentes
de cualquier naturaleza que ocurran en el interior de la bodega, cualquiera que
haya sido la causa de ellos. La ARRENDATARIA sera la unica responsable de la
operacion comercial e industrial del local, por lo que le correspondera
responder civil y penalmente de cualquier tipo de actos o accidentes que se
produzcan en virtud de su operacion. Asumismo, corresponde a la ARRENDATARIA la
obtencion de todos los permisos y patentes que la ley exija para estos efectos.
Decima cuarta: La ARRENDANTE no respondera en forma alguna por danos, hurtos o
robos que terceras personas pudieran causarle a la ARRENDATARIA, usuarios,
visitantes o empleados de su establecimiento.
Decima quinta: Las sumas de plazo vencido que LA ARRENDATARIA llegare a adeudar
a la ARRENDANTE, por concepto de alquiler o por cualquier otra razon, podran ser
cobradas por la ARRENDANTE en la via ejecutiva, sin necesidad de requerimiento
previo. Para esa hipotesis un testimonio del presente contrato protocolizado
ante notario y una certificacion de contador publico donde conste el saldo,
constituiran titulo ejecutivo.
Decima sexta: El presente contrato podra ser finalizado por las causas previstas
en el articulo setenta y uno, setenta y dos y ciento trece de la Ley General de
Arrendamientos Urbanos y Suburbanos. Y al ocurrir alguno de los hechos
previstos, la ARRENDANTE se reserva el derecho de demandar en cualquier otra via
a la ARRENDATARIA por concepto de falta de pago, o danos y perjuicios que
pudiera causar.
Decima setima: La ARRENDATARIA no podra reclamar ningun derecho de llave en su
benificio. Y cualquier concesion que la ARRENDANTE hiciera en su favor, en
relacion con el cumplimiento de sus obligaciones sera entendida como mera
tolerancia, sin que ello constituya modificacion tacita a este contrato. En
consecuencia la ARRENDANTE podra exigir el cumplimiento de esas obligaciones, en
la forma aqui estipulada, y ninguna concesion eventual podra ser invocada
contra una posible accion de desahucio, ni impedira su procedencia.
Decima octava: Para todas la cuestiones no previstas en este contrato, se
aplicara la Ley General de Arrendamiento Urbanos y Suburbanos, y las
disposiciones pertmentes del Codigo Civil. Asimismo para efectos judiciales y
extrajudiciales, las partes senalan para atender notificaciones en la siguientes
direcciones: la ARRENDANTE en San Jose, avenida segunda calle uno y tres, tercer
piso Edificio Las Arcadas; y la ARRENDATARIA en Santo Domingo de Heredia,
doscientos veinticinco metros sur de la Cruz Roja.
<PAGE>
Decima primera: Se estima el presente contrato en la suma de treinta y ocho mil
ochocientos ochenta dolares US$.
En fe y garantia de lo expuesto, ambas partes se autorizan mutuamente a elevar
el presente contrato a escritura publica, sin necesidad de citacion o compulsa a
la otra, firmando en duplicado, en San Jose, a las ocho horas del primero de
febrero de mil novecientos noventa y siete.
/s/Rogelio Ulloa S. /s/ Mario A. Esquivel F.
- - ------------------- ---------------------------
Rogelio Ulloa S., Presidente Mario A. Esquivel F., Vice-presidente
P/Arrendante P/Arrendantaria
Son autenticas:
Lic. Leda Di Napoli P.
[SEAL]
<PAGE>
MIGUEL VALLE GUZMAN
ABOGADO Y NOTARIO
CONDOMINIO "PLAZA COLONIAL"
ESCAZU, COSTA RICA
APARTADO: 521-1000 TELEFONO: (506) 289-4122
SAN JOSE, COSTA RICA TEL./FAX: (506) 289-4087
CONTRATO DE ARRENDAMIENTO
Entre las Companias de este domicilio "SOLEIL S.A.", cedula de persona juridica
3-101-076935, representada en este acto por su Presidente, el senor Rogelio
Ulloa Saborio, comerciante, cedula de identidad numero 1-344-481, vecino de
Curridabat y "THERMALTEC DE COSTA RICA S.A.", cedula de persona juridica
3-101-173713, representada pro su Vicepresidente senor Mario Alberto Esquivel
Fuentes, mecanico, cedula 1-421-569, vecino de Santo Domingo de Heredia; ambos
mayores de edad, casados y costarricenses, los dos con facultades de apoderados
generalisimos sin limite de suma de sus respectivas representadas, se ha
convenido un contrato de arrendamiento con arreglo a las siguientes y clausulas
y en el que la Sociedad representada por el primero sera conocida
indistintamente como "SOLEIL", "LA PROPIETARIA" o "LA ARRENDANTE" y la sociedad
representada por el segundo, sera aludida como "THERMALTEC", "LA ARRENDATARIA" o
"LA INQUILINA".
PRIMERA: Declaracion de propiedad: "SOLEIL" es duena de la finca
inscrita en el Registro Publico, al Folio Real del Partido de San Jose,
matricula 156 163-000, que es terreno para construir con un local dividido en
bodegas destinadas a servir de almacenes o plantas industriales, sito en Pavas,
distrito noveno del canton Primero de esta provincia.
SEGUNDA: Descripcion del inmueble arrendado: En este acto "LA
PROPIETARIA" da en arrendamiento a "LA INQUILINA" la bodega identificada en el
plano general del edificio con el numero "Dos-A" de la seccion Sur, que se
describe asi: local construido con paredes bloques de concreto, estructuras de
acero, cielo raso de "gypsum" y techo de lamina de hierro galvanizado, con los
siquientes linderos: Norte: Bodega "Dos-B y Tres", arrendadas actualmente por su
orden a "Tecnologia Textil S.A." y a "Likia Internacional S.A.", Sur: Bodegas
"Uno-A y Uno-B" arrendadas por su order a la misma Compania "Thermaltec" y a
"Movitec S.A."; Este: Terreno que se reserva la propietaria, y Oeste: Calle de
acceso a las bodegas de este Complejo Industrial, con seis metros de frente.
Medida: Trescientos metros cuadrados. El local descrito se encuentra alumbrado
con lamparas de tubos fluorescentes y equipado con dos banos completos y una
pequena bodega para guardar herramientas o materia prima.
<PAGE>
TERCERA: Plazo, Precio y forma de pago: El plazo de este contrato es de
tres anos, a partir del primero de Junio de mil novecientos noventa y nueve. El
precio mensual del arrandamiento, durante el expresado plazo se determinara en
la siguiente forma.
Del 1 de Junio de 1999 al 31 de Mayo del 2000 US$900.000 mensuales
Del 1 de Junio de 2000 al 31 de Mayo del 2001 US$927.000 mensuales
Del 1 de Junio de 2001 al 31 de Mayo del 2002 US$954.000 mensuales
Todas las cuotas de arrendamiento seran pagadas dentro de los cinco primeros
dias habiles de cada mes, en las oficinas de "LA ARRENDANTE", en el tercer piso
del Edificio Las Arcadas (avenida segunda entre calles primera y tercera), en la
moneda estipulada o en colones de curso legal, al tipo establecido por el Banco
Central de Costa Rica para la venta de esas divisas, a la fecha del pago
correspondiente.
CUARTA: Resolucion anticipada del contrato: Despues del primer ano de
arrendamiento, "LA INQUILINA" podra, en cualquier momento, ponerle termino al
contrato anticipadamente, sin otra responsabilidad que la de notificarle por
escrito a "LA PROPIETARIA" su decision, con dos meses de anticipacion por lo
menos. Este aviso podra dispensarse y "LA INQUILINA" resolver el contrato de
inmediato, pagando a "LA PROPIETARIA" el importe correspondiente a dos meses de
alquiler o al tiempo que falte para el vencimiento del plazo, sequn le sea mas
favorable.
QUINTA: Destino: "LA ARRENDATARIA" destinaran la bodega descrita a sus
actividades de mecanica de presicion. No podra variar ese destino sin el
consentimiento previo y escrito de "LA PROPIETARIA" y cualquier cambio en ese
sentido se considerara como una violacion grave al presente contrato, para los
efectos previstos en la clausula decimosegunda.
SEXTA: Obligaciones de "LOS CONTRATANTES": Ademas de pagar oportuna y
cumplidamente las cuotas mensuales del arrendamiento, "LA INQUILINA" tendra las
siguientes obligaciones: a) Restituir la bodega a "LA PROPIETARIA", en las
mismas conditiones en que la recibe, salvo los desgastes producidos por el
transcurso del tiempo y el uso autorizado del inmueble, b) "LA INQUILINA" no
podra, sin el consentimiento previo y escrito de "LA PROPIETARIA", ceder,
gravar, enajenar o en cualquier forma transferir, en todo on en parte, los
derechos que le confiere este contrato. Tempoco podra, sin el referido
consentimiento previo y escrito de "LA PROPIETARIA", subarrendar la bodega
mencionada, en todo o en parte; c) "LA INQUILINA" sera
<PAGE>
la unica responsable de la operacion comercial del local mencionado, por lo que
le correspondera responder, civil y penalmente por cualquier tipo de actos o
accidentes que se produzcan dentro del recinto arrendado. Asimismo le
correspondera obtener y cancelar todos los permisos y patentes que la ley exija
para el funcionamiento de su negocio; d) Correra pro cuenta de "LA INQUILINA" el
pago del servicio de corriente electrica, aqua, patentes, permisos y cualquier
otra suma que sea necesaria para la operacion de su negocio; e) En caso de que
"LA INQUILINA" quisiera instalar en el local arrendado uno o varios aparatos
telefonicos, sera la unica responsible del pago de las facturas
correspondientes, f) Efectuar las reparaciones que haya que hacer en el local,
incluyendo la reposicion de vidrios y cristales, cuando los danos sean causados
por sus empleados, intencionadamente o por negligencia. Cuando los danos
provengan de fallas del edificio o sus instalaciones o desgaste de los mismos
"LA ARRENDANTE" tendra la obligacion de efectuar a la mayor brevedad, las
reparaciones necesarias a fin de que el local arrendado quede en las mismas
condiciones que tenia al inicio del contrato, g) "LA INQUILINA" no prodra, sin
el permiso previo y escrito de "LA PROPIETARIA", instalar o pintar rotulos ni
introducir modificaciones capaces de alterar o modificar la estructure del
local.
SETIMA: Deposito en Garantia: "LA INQUILINA" recibe la bodega en el
estado en que actualmente se encuentra y se obliga a restituirla, a la
terminacion del contrato, en las mismas condiciones en que se le entrega, salvo
los desgastes producidos por el transcurso del tiempo y el uso racional de la
edificacion y sus instalaciones. En garantia de esta obligacion, "LA INQUILINA"
deposita en este mismo acto la suma de NOVECIENTOS DOLARES (US$900.00), la cual
le sera reintegrada a la terminacion de la relacion inquilinaria, si la bodega
es entregada a satisfaccion, de conformidad con los terminos del presente
contrato. Si hubiere danos, "LA PROPIETARIA" procedera a repararlos, aplicando
para estos efectos el expresado deposito y cualquier saldo que resulte lo
reintegrara a "LA INQUILINA", dentro de los treinta dias naturales inmediatos
siguientes a la terminacion de las reparaciones, junto con las facturas
comprobatorias de los gastos incurridos.
OCTAVA: Propiedad de las mejoras a la terminacion del contrato: Las
mejoras de cualquier clase que "LA INQUILINA" introduzca, con o sin el
consentimiento de "LA PROPIETARIA", quedaran a beneficio del inmueble, a la
terminacion del contrato, sin que esta tenga que pagar suma alguna por ellas. No
obstante lo anterior, si "LA PROPIETARIA" notificare por escrito a "LA
INQUILINA" sobre la necesidad de remover tales mejoras, por lo menos veinte
dias antes de la terminacion del contrato, esta debera efectuar esos trabajos
por su propia cuenta, antes de entregar lo arrandado, procediendo a restaurarlo
hasta dejarlo en las misma condicion en que lo recibio.
<PAGE>
NOVENA: Obligaciones de "LA PROPIETARIA": "LA PROPIETARIA" pagara los
impuestos correspondientes al local arrendado. Asimismo, mantendra, por su
cuenta un sistema de vigilancia en beneficio de "LA INQUILINA" pero no sera
responsable por danos, hurtos o robos que usuarios, visitantes o terceras
personas en general, pudieran causar en la bodega arrendada.
DECIMA: Exencion de la responsabilidad: "LA PROPIETARIA" no asume
responsabilidad civil por los accidentes de cualquier naturaleza que occuran en
el interior de la bodega, cualquiera que haya sido la causa productora de ellos.
DECIMOPRIMERA: Cobro de sumas adeudadas: Las sumas de plazo vencido que
"LA INQUILINA" llegare a adeudar a "LA PROPIETARIA", por concepto de alquileres
o por cualquier otra razon, podran ser cobradas por la acreedora, en la via
ejecutiva, sin necesidad de ningun requerimiento previo. Para efectos del
reclamo judicial correspondiente, un testimonio del presente contrato
protocolizado ante Notario y una certificacion de Contador Publico Autorizado en
que conste el saldo debido, constituiran titulo ejecutivo.
DECIMOSEGUNDA: Derecho de "LA PROPIETARIA" a dar por resuelto el
contrato: El presente contrato se tendra por concluido de pleno derecho y "LA
PROPIETARIA" tendra la facultad de pedir, en la via del desahucio, la inmediata
desocupacion del local, en cualquiera de los siguientes casos: a) por la
expiracion del plazo inicial o de cualquier prorroga futura que llegare a
pactarse, b) por la falta de pago oportuno de alguna cuota mensual de alquiler,
c) por la simple iniciacion, por parte de cualquier persona, de tramites
tendientes a obtener la quiebra o insolvencia de "LA INQUILINA", cuando esta
solicitud inicial fuere acogida por las autoridades competentes, d) por
cualquiera de los motivos que senala la Ley General de Arrendamientos Urbanos Y
Suburbanos; y, c) por haber incumplido "LA INQUILINA", en cualquier forma, con
alguna de las obligaciones que le impone el presente contrato. Al ocurrir alguno
de los hechos mencionados en la presente clausula, "LA PROPIETARIA" podra
tambien, independientemente de la accion de desahucio, demandar a "LA INQUILINA"
en la via que corresponda, para exigir el pago de los alquileres pendientes y de
los danos y perjuicios que su incumplimiento le haya podido ocasionar.
<PAGE>
DECIMOTERCERA: Derechos de llave: "THERMALTC" no podra reclamar ningun
derecho de llave en su beneficio.
DECIMOCUARTA: Actos de mera tolerancia que no causan modificacion al
presente contrato: Cualquier concesion que "LA PROPIETARIA" hiciere a
"THERMALTEC", en relacion con el cumplimiento de sus obligaciones, debera
interpretarse como una mera tolerancia de su parte, y no constituira
modificacion tacita de este contrato. En consecuencia, "LA PROPIETARIA", podra
exigir judicial o extrajudicialmente de dicha Compania el cumplimiento de esas
obligaciones, en la forma aqui estipulada, y ninguna concesion eventual podra
ser invocada en su contra.
DECIMOQUINTA: Aplicacion supletoria de la ley: Para todas las
cuestiones no previstas en este contrato, se aplicaran la Ley General de
Arrendamientos Urbanos y Suburbanos y las disposiciones pertinentes del Codigo
Civli. Los Tribunales Civiles de Pavas y de la Ciudad de San Jose seran los
competentes para conocer, segun la cuantia, de todas las cuestiones
controversiales derivadas del presente contrato. Asimismo, para efectos
judiciales y extrajudiciales senalan para notificaciones las siguientes
direcciones: "LA PROPIETARIA". Sus oficinas en la direccion indicada en la
clausula tercera anterior y "THERMALTEC", en sus oficinas principales, local
"Uno-A, Sur" en el mismo Complejo Industrial del que forma parte la bodega
arrandada en este acto, en Pavas. Cualquier cambio en las anteriores direcciones
debera ser comunicado por escrito a la otra parte, obteniendo el correspondiente
acuse de recibo como comprobante.
DECIMOSEXTA: Honorarios y gastos: Los honorarios y gastos de este
contrato seran cubiertos por mitades, por ambas partes. Cualquiera de ellas
podra, en cualquier momento y sin necesidad de citar a la otra, comparecer ante
Notario a protocolizar literalmente este documento, corriendo con los gastos que
dicha protocolizacion demande.
DECIMOSETIMA: Estimacion: Se estima este contrato en la suma de TREINTA
Y TRES MIL TRESCIENTOS SETENTA Y DOS DOLARES DE LOS ESTADOS UNIDOS DE AMERICA
(U.S.$33,372.00).
<PAGE>
Personeria: Se deja constancia de que la personeria del senor Ulloa
Saborio se encuentra inscrita en la Seccion Mercantil del Registro Publico al
Tomo 831, Folio 118, Asiento 222 y la del senor Esquivel Fuentes al Tomo 910,
folio 76, asiento 108 de esa misma Seccion. Leido lo escrito, en presencia de
los testigos Joaquin Vargas Marin, cedula numero 3-114-985 y Lilliam Garcia
Marin, cedula numero 6-121-602, ambos mayores, Contadores y vecinos de Barrio
Cordoba y Alajuelita, respectivamente, los contratantes lo aprobaron y firman
junto con los testigos dichos, en dos copias iguales, en la ciudad de San Jose,
a las catorce horas del veinte de Mayo de mil novecientos noventa y nueve. Se
deja constancia de que las especies fiscales correspondientes quedaron
agregadas en la copia correspondiente a "LA INQUILINA".
noventa y siele
/s/ Rogelio Ulloa S.
- - ----------------------------
Rogelio Ulloa S., Presidente
P/Arrendante
/s/ Mario A. Esquivel F.
- - ----------------------------
Mario A. Esquivel F., Vice-president
P/Arrendataria
/s/ Miguel Valle Guzman
- - ----------------------------
MIGUEL VALLE GUZMAN
ABOGADO Y NOTARIO
CONDOMINIO "PLAZA COLONIAL"
ESCAZU, COSTA RICA
<PAGE>
CONSULTORES JURIDICO EMPRESARIALES
Asesores Legales
MIGUEL VALLE GUZMAN Pagina: Cinco
DECIMOTERCERA: Derechos de llave: "THERMALTC" no podra reclamar ningun
derecho de llave en su beneficio.
DECIMOCUARTA: Actos de mera tolerancia que no causan modificacion al
presente contrato: Cualquier concesion que "LA PROPIETARIA" hiciere a
"THERMALTEC", en relacion con el cumplimiento de sus obligaciones, debera
interpretarse como una mera tolerancia de su parte, y no constituira
modificacion tacita de este contrato. En consecuencia, "LA PROPIETARIA", podra
exigir judicial o extrajudicialmente de dicha Compania el cumplimiento de esas
obligaciones, en la forma aqui estipulada, y ninguna concesion eventual podra
ser invocada en su contra.
DECIMOQUINTA: Aplicacion supletoria de la ley: Para todas las cuestiones no
previstas en este contrato, se aplicaran la Ley General de Arrendamientos
Urbanos y Suburbanos y las disposiciones pertinentes del Codigo Civil. Los
Tribunales Civiles de Pavas y de la Ciudad de San Jose seran los competentes
para conocer, segun la cuantia, de todas las cuestiones controversiales
derivadas del presente contrato. Asimismo, para efectos judicials y
extrajudiciales senalan para notificaciones las siguientes direcciones "LA
PROPIETARIA": Sus oficinas en la direccion indicada en la clausula tercera
anterior y "THERMALTEC", EN SUS OFICINAS PRINCIPALES, LOCAL "Uno-A, Sur" en el
mismo Complegjo Industrial del que forma parte la bodega arrendada en este acto,
en Pavas. Cualquier cambio en las anteriores direcciones debera ser comunicado
por escrito a la otra parte, obteniendo el correspondiente acuse de recibo com
comprobante.
DECIMOSEXTA: Honorarios y gastos: Los honorarios y gastos de este contrato
seran cubiertos por mitades, por ambas partes. Cualquiera de ellas podra, en
cualquier momento y sin necesidad de citar a la otra, comparecer ante Notario a
protocolizar literalmente este documento, corriendo con los gastos que dicha
protocolizacion demande.
DECIMOSETIMA: Estimacion: Se estima este contrato en la suma de TREINTA Y
TRES MIL TRESCIENTOS SETENTA Y DOS DOLARES DE LOS ESTADOS UNIDOS DE AMERICA
(U.S.$33.372.00).
<PAGE>
CONSULTORES JURIDICO EMPRESARIALES
Asesores Legales
Lic. Federico J. Gonzalez Pefia Lic. Leda Di Napoli Perrera, MBA.
- - --------------------------------------------------------------------------------
En todo caso la ARRENDATARIA al vencimiento del plazo inicial de un ano, podra
desocupar la bodega descrita, en cualquier momento, sin ninguna responsabilidad
de su parte, y sin otra obligacion que la de notificar su decision por escrito a
la ARRENDANTE, con dos meses de anticipacion por lo menos. Este aviso podra
dispensarse pagando a la ARRENDANTE el importe correspondiente a dos meses de
alquiler.
Quinta: El precio del arrendamiento es de mil ochenta dolares US$ mensuales,
pagaderos por mes adelantado dentro de los cinco primeros dias habiles de cada
mes en dinero efectivo, a partir del primero de febrero de mil novecientos
noventa y siete. Todo pago debera efectuarse en el domicilio, de la ARRENDANTE,
sito en el tercer piso del edificio Las Arcadas, avenida segunda, calles uno y
tres.
El precio, podra ser cancelado, a criterio de la ARRENDATARIA en moneda nacional
o extranjera, a tipo de cambio oficial a la fecha de pago, establecido por el
Banco Nacional de Costa Rica.
En este acto la ARRENDATARIA ha cancelado en efectivo la suma de dos mil ciento
sesenta dolares US$ mensuales, que corresponden al primer mes de arrendamiento y
al deposito de garantia que se mencionara en la clausula setima.
Sexta: La ARRENDATARIA arrienda la bodega descrita anteriormente, con el
exclusivo proposito de ser destinada para la instalacion de un taller de
mecanica y precision.
La ARRENDATARIA no podra modificar la naturaleza del bien dado en
arrendurniento, salvo autorizacion previa y escrita de la ARRENDANTE, ni
modificar la estructura del local, ni subarrendarlo en toda o en parte.
Setima: La ARRENDATARIA recibe el bien en perfecto estado de conservacion y
limpieza, y asi debera mantenerlo y devolverlo a la ARRENDANTE al finalizar el
contrato, salvo el desgaste natural del uso normal producido por el tiempo y el
uso racional de la edificacion.
En garantia de esta obligacion la ARRENDATARIA deposita la suma de mil ochenta
dolares US$, la cual le sera devuelta a la terminacion del contrato, si la
bodega la recibe la ARRENDANTE a su entera satisfaccion, de conformidad con los
terminos de este contrato. Si hubiere danos, la ARRENDANTE procedera a su
reparacion, aplicando para estos efectos el expresado deposito y cualquier saldo
que resultare, lo reintegrara de inmediato a la ARRENDATARIA, junto con las
facturas comprobatorias de los gastos incurridos.
Octava: Los servicios publicos de agua, luz y telefono correran por cuenta de la
ARRENDATARIA. Los impuestos territorialses y municipales correran por cuenta del
ARRENDANTE.
Novena: Todas las reparaciones que haya que hacer en el local, incluyendo la
reposicion de vidrios y cristales, sera efectuadas por la ARRENDANTE, salvo los
danos que provengan de fuerzas de la naturaleza o defectos de construccion, en
cuyo caso correspondera a la ARRENDANTE, efectuar las reparaciones necesarias a
fin de que al menor plazo posible, la bodega quede en las mismas condiciones en
que se entrega. En la bodega arrendada existe una caja de registro de aguas
pluviales, que los empleados de la ARRENDANTE deberan revisor regularmente un o
dos veces al mes. Para esos efectos asi como en caso de emergencia, la
ARRENDATARIA permitira a los empleados de la ARRENDANTE en dias y horas habiles
el acceso, a la mencionada instalacion.
Tel: 225-8616 Fax: 283-5495 Apdo 5927-1000 San Jose, Costa Rica. Barrio
Francisco Peralla. Avenidas 8 y 10, calle 33. N 837
<PAGE>
CONSULTORES JURIDICO EMPRESARIALES
Asesores Legales
Lic. Federico J. Gonzalez Pefia Lic. Leda Di Napoli Perrera, MBA.
- - --------------------------------------------------------------------------------
Decima: La ARRENDATARIA no podra sin el permiso pervio y escrito de la
ARRENDANTE, introducir modificaciones capaces de alterar o modificar la
estructura del local.
Decima primera: Las me joras que la ARRENDATARIA introduzca, con o sin el
consentimiento de la ARRENDANTE, quedaran a beneficio del inmueble, a la
terminacion del contrato, sin que la ARRENDANTE tenga que pagar suma a1guna por
ellas. No obstante lo anterior, si la ARRENDANTE notificare por escrito a la
ARRENDATARIA, sobre la necesidad de remover tales mejoras, por lo menos veinte
dias antes de la terminacion del contrato, este debera efectuar esos trabajos
por cuenta propia, antes de entregar lo arrendado, procediendo a restaurarlo
hasta dejarlo en la misma condicion que lo recibio.
Decima segunda: La ARRENDATARIA no podra instalar o pintar rotulos sin el
permiso previo y escrito de la ARRENDANTE.
Decima tercera: La ARRENDANTE no asume responsabilidad civil por los accidentes
de cualquier naturaleza que ocurran en el interior de la bodega, cualquiera que
haya sido la causa de ellos. La ARRENDATARIA sera la unica responsable de la
operacion comercial e industrial del local, por lo que le correspondera
responder civil y penalmente de cualquier tipo de actos o accidentes que se
produzcan en virtud de su operacion. Asimismo, corresponde a la ARRENDATARIA la
obtencion de todos los permisos y patentes que la ley exija para estos efectos.
Decima cuarta: La ARRENDANTE no respondera en forma alguna por danos, hurtos o
robos que terceras personas pudieran causarle a la ARRENDATARIA, usuarios,
visitantes o empledos de su establecimiento.
Decima quinta: Las sumas de plazo vencido que LA ARRENDATARIA llegare a adeudar
a La ARRENDANTE, por concepto de alquiler o por cualquier otra razon, podran ser
cobradas por la ARRENDANTE en la via ejecutiva, sin necesidad de requerimiento
previo. Para esa hipotesis un testimonio del presente contrato protocolizado
ante notario y una certificacion de contador publico donde conste el saldo,
constituiran titulo ejecutivo,
Decima sexta: El presente contrato podra ser finalizado por las causas previstas
en el articulo setenta y uno, setenta y dos y ciento trece de la Ley General de
Arrendamientos Urbanos y Suburbanos. Y al ocurrir a1guno de los hechos
previstos, la ARRENDANTE se reserva el derecho de demandar en cualquier otra via
a la ARRENDATARIA por concepto de falta de pago, o danos y perjuicios que
pudiera causar.
Decima setima: la ARRENDATARIA no podra reclamar ningun derecho de llave en su
benificio. Y cualquier concesion que la ARRENDANTE hiciera en su favor, en
relacion con el cumplimiento de sus obligaciones sera entendida como mera
tolerancia, sin que ello constituya modificacion tacita a este contrato. En
consecuencia a la ARRENDANIE podra exigir el cumplimiento de esas obligaciones,
en la forma aqui estipulada, y ninguna concesion eventual podra ser invocada
contra una posible accionde desahucio, ni impedira su procedencia.
Decima octava: Para todas la cuestiones no previstas en este contrato, se
aplicara la Ley General de Arrendamient Urbanos y Suburbanos, y las
disposiciones pertinentes del Codito Civil. Asimismo para efectos judiciales y
extrajudiciales, las partes senalan para atender notificaciones en la siguientes
direcciones: la ARRENDANTE en San Jose, avenida segunda calle uno y tres, lercer
piso Edificio Las Arcadas; y la ARRENDATARIA en Santo Domingo de Heredia,
doscientos veinticinco metros sur de la Cruz Roja.
Tel: 225-8616 Fax: 283-5495 Apdo 5927-1000 San Jose, Costa Rica. Barrio
Francisco Peralla. Avenidas 8 y 10, calle 33. N 837
<PAGE>
CONSULTORES JURIDICO EMPRESARIALES
Asesores Legales
Lic. Federico J. Gonzalez Pefia Lic. Leda Di Napoli Perrera, MBA.
- - --------------------------------------------------------------------------------
Decima primera: Se estima el presente contrato en la suma de treinta y ocho mil
ochocientos ochenta dolares US$.
En fe y garantia de lo expuesto, ambas partes se autorizan mutuamente a elevar
el presente contrato a escritura publica, sin necesidad de citacion o compulsa a
la otra, firmando en duplicado, en San Jose, a los ocho horas del primeo de
febero de mil novecientos noventa y siete.
Tel: 225-8616 Fax: 283-5495 Apdo 5927-1000 San Jose, Costa Rica. Barrio
Francisco Peralla. Avenidas 8 y 10, calle 33. N 837
/s/ Roglio Ulloa S. /s/ Mario A. Esquivel F.
- - ---------------------------- ------------------------
Roglio Ulloa S., Presidente Mario A. Esquivel F.
P/Arrendante Vice presidente
P/Arrendataria
/s/ Leda Di Napoli P.
Son autenticas: ----------------------
Lic. Leda Di Napoli P.
[Stamp]
[Stamp]
<PAGE>
BUFETE GUERRERO, GONZALEZ & CHAVERRI
ADDENDUM A CONTRATO DE ARRENDAMIENTO
Entre las companias de este domicilio, SOLEIL S.A., cedula de persona juridica
3-101-076935, representada en este acto por su Presidente, el senor Rogelio
Ulloa Saborio, comerciante, cedula de identidad numero 1-344-481, vecino de
Curridabat, y THERMALTEC DE COSTA RICA S.A., cedula de personeria 3-101-073713,
representada por su Vicepresidente senor Mario Alberto Esquivel Fuentes,
mecanico, cedula 1-421-569, vecino de Santo Domingo de Heredia, ambos mayores de
edad, casados y costarricenses, los dos con facultades de apoderados
generalisimos sin limite de suma de sus respectivas representadas; hemos
convenido celebrar el presente ADDENDUM A CONTRATO DE ARRENDAMIENTO suscrito
entre las partes a las 14:00 del 20 de mayo de 1999, y que forma parte integral
de este documento y asi se encuentra adherido; el cual se regira por las
siguientes estipulaciones:
PRIMERA: Se acuerda modificar la clausula cuarta del contrato principal; para
que en adelante se lea asi: "La INQUILINA podra ponerle fin al contrato de
arrendamiento, cuando avise a LA PROPIETARIA, por escrito y con tres meses de
antelacion, su voluntad de terminar el arrendamiento. Sin embargo, si desea
ponerle termino anticipadamente y sin otorgar el plazo convenido, la INQUILINA
debera indemnizar a LA PROPIETARIA, el importe correspondiente a dos meses de
alquiler."
SEGUNDA: Se acuerda modificar la clausula quinta del contrato principal, para
que en adelante se lea asi: "LA INQUILINA destinara la bodega descrita, a
actividades a toda clase de soldadura y metalizacion, lo cual genera una
actividad bastante ruidosa. No podra variar ese destino sin el consentimiento
previo y escrito de La PROPIETARIA y cualquier cambio en ese sentido se
considerara como una violacion grave al presente contrato, para los efectos
previstos en la clausula decimo segunda.
TERCERA: Se acuerda modificar la clausula decimo tercera, del contrato
principal, referente al derecho de llave, debiendo por ende correrse la
numeracion.
<PAGE>
MIGUEL VALLE GUZMAN
ABOGADO Y NOTARIO
CONDOMINIO "PLAZA COLONIAL"
ESCAZU, COSTA RICA
Apartado: 521-1000 TELEFONO: (506) 289-4122
SAN JOSE, COSTA RICA TEL./FAX: (506) 289-4087
CONTRATO DE ARRENDAMIENTO
Entre las Companias de este domicilio "SOLEIL S.A.", cedula de persona juridica
3-101-076935, representada en este acto por su Presidente, el senor Rogelio
Ulloa Saborio, comericiante, cedula de identidad numero 1-344-481, vecino de
Curridabat y "THERMALTEC DE COSTA RICA S.A.", cedula de persona juridica 3- 101-
173713, representada por su Vicepresidente senor Mario Alberto Esquivel Fuentes,
mecanico, cedula 1-421-569, vecino de Santo Domingo de Heredia; ambos mayores de
edad, casados y costarricenses, los dos con facultades de apoderados
generalisimos sin limite de suma de sus respectivas representadas, se ha
convenido un contrato de arrendamiento con arreglo a las siguientes y clausulas
y en el que la Sociedad representada por el primero sera conocida
indistintamente como SOLEIL", "LA PROPIETARIA" o "LA ARRENDANTE" y la sociedad
representada por el segundo, sera aludida como "THERMALTEC", "LA ARRENDATARIA" o
"LA INQUILINA".
PRIMERA: declaracion de propiedad "soleil" es duena de la finca inscrita en el
Registro Publico, al Folio Real del Partido de san Jose, matricula 156.163-000,
que es terreno para construir con un local dividido en bodegas destinada a
servir de almacenes o plantas industriales, sito en Pavas, distrito noveno del
canto Primero de esta provincia.
SEGUNDA: Descripcion del inmueble arrendado: En este acto "LA PROPIETARIA" da en
arrendamiento a "LA INQUILINA" la bodega idenfificada en el plano general del
edificio con el numero "Dos- A" de la seccion Sur, que se describe asi: local
construido con paredes bloques de concreto, estructuras de acero, cielo raso de
"gypsumn" y techo de lamina de hierro galvanizado, con los siguientes linderos:
Norte: Bodega 'Dos-B y Tres", arrendadas actualmente por su orden a "Tecnologia
Texfil S.A," y a "Likia Internacional S.A"; Sur: Bodegas "Uno-A y Uno-B"
arrendadas por su orden a la misma Compania "Thermaltec" y a "Movitec S.A." ;
Este- Terreno que se reserva la propietaria; y Oeste: Calle de acceso a las
bodegas de este Complejo Industrial, con seis metros de frente. Medida:
Trescientos metros cuadrados. El local descrito se encuentra alumbrado con
lamparas de tubos fluorescentes y equipado con dos banos completos y y una
pequena bodega para guardar herramientas o materia prima.
<PAGE>
MIGUEL VALLE GUZMAN Pagina: Dos
TERCERA: Plazo. Precio y forma de pago : El Plazo de este contrato es de
tres anos, a partir del primero de Junio de mil novecientos noventa y nueve. El
precio mensual de arrendamiento, durate el expressado plazo se determinara en la
siguiente forma:
Del 1 de Junio del 1999 al 31 de Mayo del 2000 US$900.00 mensuales
Del 1 de Junio del 2000 al 31 de Mayo del 2001 US$927.00 mensuales
Del 1 de Junio del 2001 al 31 de Mayo del 2002 US$954.00 mensuales
Todas las cuotas de arrendarniento seran pagadas dentro de los cinco primeros
dias habiles de cada mes, en las oficinas de "LA ARRENDANTE", en el tercer piso
del Edificio Las Arcadas (avenida segunda entre calles primera y tercera), en la
moneda estipulada o en colores de curso legal, al tipo establecido por el Banco
Central de Costa Rica para la venta de esas divsas, a la fecha del pago
correspondiente.
CUARTA: Resolucion anticipada del contrato: Despues del primer ano de
arrendamiento, "LA INQUILINA" podra, en cualquier momento, ponerle termino al
contrato anticipadamente, sin otra responsabilidad que la de notificarle por
escrito a "LA PROPIETARIA" su decision, con dos meses anticipacion por lo menos.
Este aviso podra dispensarse y "LA INQUILINA" resolver el contrato de immediato,
pagando a "LA PROPIETARIA" el importe correspondiente a dos meses de alquiler o
al tiempo que falte para el vencimeiento del plazo, segun le sea mas favorable.
QUINTA: Destino: "LA ARRENDATARIA" destinaran la bodega descrita a sus
actividades de mecanica de presicion. No podra variar ese destino sin el
consentimiento previo y escrito de "LA PROPIETARIA" y cualquier cualquier cambio
en ese sentido se considerara como una violacion grave al presente contrato,
para los efectos previstos en la clausula decimosegunda.
SEXTA: Obligacions de "LOS CONTRATANES": Ademas de pagar oportuna y
cumplidamente las cuotas mensuales del arrendamiento, "LA INQUILINA" tendra las
siguientes obligaciones: a) Restituir la bodega a "LA PROPIETARIA", en las
mismas condiciones en que la recibe, salvo los desgastes producidos por el
transcurso del tiempo y el uso autorizado del inmueble; b) "LA INQUILINA" no
podra, sin el consentimiento previo y escrito de "LA PROPIETARIA", ceder,
gravar, enajenar o en cualquier forma transferir, en todo o en parte, los
derechos que le confiere este contrato. Tampco podra, sin el referido
consentimiento previo y escrito de "LA PROPIETARIA", subarrendar la bodega
meniconada, en todo o en parte; c) "LA INQUILINA" sera
<PAGE>
MIGUEL VALLE GUZMAN Pagina: Tres
la unica responsable de la operacion comercial del local mencionado, por lo que
le correspondera responder, civil y penalmente por cualquier tipo de actos o
accidentes que se produzcan dentro del recinto arrendado. Asimismo le
correspondera obtener y cancelar todos los permisos y patentes que la ley exija
para el funcionamiento de su negocio; d) Correra por cuenta de "LA INQUILINA" el
pago del servicio de corriente electrica, agua, patentes, permisos y cualquier
otra suma que sea necesaria para la operacion de su negocio; e) En caso de que
"LA INQUILINA" quisiera instalar en el local arrendado uno o varios aparatos
telefonicos, sera la unica responsable del pago de las facturas
correspondientes; (f) Efectuar las reparaciones que haya que hacer en el local,
incluyendo la reposicion de vidrios y cristales, cuando los danos sean causados
por sus empleados, intencionadamente o por negligencia. Cuando los danos
provengan de fallas del edificio o sus instalaciones o desgaste de los mismos
"LA ARRENDANTE" tendra la obligacion de efectuar a la mayor brevedad , las
reparaciones necesarias a fin de que el local arrendado quede en las mismas
condiciones que tenia al inicio del contrato, g) "LA INQUILINA" no podra, sin el
permiso previo y escrito de "LA PROPIETARIA", instalar o pintar rotulos ni
introducir modificaciones capaces de alterar o modificar la estructura del
local.
SETIMA: Deposito en Garantia: "LA INQUILINA" recibe la bodega en el estado
en que actualmente se encuentra y se obliga a restituirla, a la terminacion del
contrato, en las mismas condiciones en que se le entrega, salvo los desgastes
producidos por el transcurso del tiempo y el uso racional de la edificacion y
sus instalaciones. En garantia de esta obligacion, "LA INQUILINA" deposita en
este mismo acto la suma de NOVECIENTOS DOLARES (US$900.00), la cual le sera
reintegrada a la terminacion de la relacion inquilinaria., si la bodega es
entregada a satisfaccion, de conformidad con los terminos del presente contrato.
Si hubiere danos, "LA PROPIETARIA" procedera a repararlos, aplicando para estos
efectos el expresado deposito y cualquier saldo que resulte lo reintegrara a "LA
INQUILINA", dentro de los treinta dias naturales inmediatos siguientes a la
terminacion de las reparaciones, junto con las facturas comprobatorias de los
gastos incurridos.
OCTAVA: Propiedad de las mejoras a la terminacion del contrato: Las mejoras
de cualquier clase que "LA INQUILINA" introduzca, con o sin el consentimiento de
"LA PROPIETARIA", quedaran a beneficio del inmueble, a la terminacion del
contrato, sin que esta tenga que pagar suma alguna por ellas. No obstante lo
anterior, si "LA PROPIETARIA" notificare por escrito a "LA INQUILINA" sobre la
necesidad de remover tales mejoras, por lo menos veinte dias antes de la
terminacion del contrato, esta debera efectuar esos trabajos por su propia
cuenta, antes de entregar lo arrendado, procediendo a restaurarlo hasta dejarlo
en la misma condicion en que lo recibio.
<PAGE>
MIGUEL VALLE GUZMAN Pagina: Cuatro
NOVENA: Obligacions de "LA PROPIETARIA": "LA PROPIETARIA" pagara los
impuestos correspondientes al local arrendado. Asimismo, mantendra, por su
cuenta un sistema de vigilancia en beneficio de "LA INQUILINA" pero no sera
responsable por danos, hurtos o robos que usuarios, visitantes o terceras
personas en general, pudieran causar en la bodega arrendada.
DECIMA: Exencion de la responsabilidad: "LA PROPIETARIA".no asume
responsabilidad civil por los accidentes de cualquier naturaleza que ocurran en
el interior de la bodega, cualquiera que haya sido la causa productora de ellos.
DECIMOPRIMERA: Cobro de sumas adeudadas: Las sumas de plazo vencido que "LA
INQUILINA" Llegare a adeudar a "LA PROPIETARIA", por concepto de alquileres o
por cualquier otra razon, podran ser cobradas por la acreedora, en la via
ejecutiva, sin necesidad de ningun requerimiento previo. Para efectos del
reclamo judicial correspondiente, un testimonio del presente contrato
protocolizado ante Notario y una certificacion de Contador Publico Autorizado en
que conste el saldo debido, constituiran titulo ejecutivo.
DECIMOSEGUNA: Derecho de "La PROPIETARIA" a dar por resuelto el contrato:
El presente contrato se tendra por concluido de pleno derecho y "LA PROPIETARIA"
tendra la facultad de pedir, en la via del desahucio, la inmediata desocupacion
del local, en cualquiera de los siguientes casos: a) por la expiracion del plazo
inicial o de cualquier prorroga futura que llegare a pactarse; b) por la falta,
de pago oportuno de alguna cuota mensual de alquiler; c) por la simple
iniciacion, por parte de cualquier persona, de tramites tendientes a obtener la
quiebra o insolvencia de "LA INQUILINA", cuando esta solicitud inicial fuere
acogida por las autoridades competentes, d) por cualquiera de los motivos que
senala la Ley General de Arrendamientos Urbanos y Suburbanos; y, e) por haber
incumplido "LA INQUILINA", en cualquier forma, con alguna de las obligaciones
que le impone el presente contrato. Al ocurrir alguno de los hechos mencionados
en la presente clausula, "LA PROPIETARIA" podra tambien, independientemente de
la accion de desahucio, demandar a "LA INQUILINA" en la via que corresponda,
para exigir el pago de los alquileres pendientes y de los danos y perjuicios que
su incumplimiento le haya podido ocasionar.
LETTER OF INTENT
This Letter of Intent (Letter) between Thermaltec International, Corp. (TTI),
with its principal place of business at 68A Lamar Street, West Babylon, New York
11704 and High Velocity Technology (HVT) with its principal place of business at
Lebanon, New Hampshire is intended to confirm the parties' recent discussion
with the proposed exchange of shares between TTI and HVT.
TTI and HVT intend to take the following actions:
TTI intends:
o Selling price to be paid for the issued and outstanding shares of HVT
will be affected by the issuance of 150,000 shares of TTI stock and the
providing of all working capital.
o On closing $50,000 cash will be paid to Rob Lalumiere. 120 days after
closing an additional $50,000 will be paid.
o TTI will provide necessary expansion and operating capital in stages as
needed.
o There will be a stock option plan for HVT employees in compliance with
any TTI stock option plan set up.
o HVT will be spun off as an IPO when conditions are conducive to do so.
o Rob Lalumiere may sell at his choice, the Steam Generation Corporation
to TTI for not more than 50,000 shares.
HVT intends:
o HVT will be merged into TTI. Rob Lalumiere will be CEO of the HVT
Division.
o All decisions that affect the HVT side of the business will be made by
Rob Lalumiere.
<PAGE>
LETTER OF INTENT
This Letter of Intent (Letter) between Thermaltec International, Corp. (TTI),
with its principal place of business at 68A Lamar Street, West Babylon, New York
11704 and Viaplex Communications, Inc. (VCI), with its principal place of
business at 90 William Street, New York, NY 10038 is intended to confirm the
parties' recent discussion with the proposed exchange of shares between TTI and
VCI.
TTI and VCI intend to take the following actions:
TTI intends:
o Selling price to be paid for the issued and outstanding shares of VCI
will be affected by the issuance of 80,000 shares of TTI stock and the
providing of all working capital.
o There will be a performance incentive to issue an additional 20,000
shares of stock for every additional $1,000,000 in revenue.
o TTI will provide necessary expansion and operating capital in stages as
needed.
o There will be a stock option plan for Viaplex employees in compliance
with any TTI stock option plan set up.
o The Viaplex Division will be spun off as an IPO when conditions are
conducive to do so.
VCI intends:
o VCI will be merged into TTI. Ron Wiggins will be CEO of the Viaplex
Division.
o All decisions that affect the Viaplex side of the business will be made
by Ron Wiggins.
o The Viaplex Division will remain intact and all parties will work
toward expanding the Viaplex operation.
/s/ Andrew B. Mazzone /s/ Ron Wiggins
- - ----------------------------------- ----------------------------
Andrew B. Mazzone Ron Wiggins
For Thermaltec International, Corp. Viaplex Communications, Inc.
Date: 2/4/00 Date: 2/4/00
<PAGE>
o The HVT Division will remain intact and all parties will work toward
expanding the HVT operation.
o Subject to traditional due diligence
/s/ Andrew B. Mazzone /s/ Rob Lalumiere
- - ----------------------------------- ----------------------------
Andrew B. Mazzone Rob Lalumiere
For Thermaltec International, Corp. High Velocity Technology
Date: 2/3/2000 Date: Feb. 3/2000
<PAGE>
Edge Management, Inc./TTI
NEXT STEPS
<TABLE>
<S> <C> <C>
AM Fund raising by AM 2/15
FV/TK Get a copy of QB 1999 data 2/7
TK Need analysis of: cash requirements 2/14
Operations Insurance & Bonds
0-50 MM
50-100 MM
100-150 MM
DM Set up model for systems consultants to spec. out operating system. 2/14
(Internet side plus internals)
AM Review IT system with Carl Tarabelli. 2/29
AM/DM Meet with Dean Rhoads to review investment of fund. 2/15
CA/TK Investigates "head tax state" question relative NY. 2/10
</TABLE>
Legend
AM Andy
FV Frank
RK Tom Klein
DM Dave
CA Charles Affatato
/s/ Andrew B. Mazzone
/s/ D. Mowrer
1 of 1
<PAGE>
The Spirit of the Agreement
1. Selling Price $3,200,000 to be paid for issued and outstanding Edge
Management, Inc. stock. This will be effected by the issuance of 400,000
shares of Thermaltec stock currently valued at approximately $3,200,000,
and the providing of approximately $2,000,000 in working capital during the
next months. The parties agree that actual value paid to Edge constitutes
approximately 12.5% effective February 1, 2000, of the total cumulative
current value of Thermaltec stock issued at the time of the consummation of
this transaction.
2. Thermaltec and Edge Management, Inc. will be merged and will trade under
the name of Edge Management.com, or some abbreviated from of that name.
3. The new entity will be comprised of two or more primary divisions, Edge
Management, Thermal Coating, and possibly another. Andy will be the
Chairman of the Board of the new entity. As chairman, he will have
responsibility for IT, Financial Management and Fund raising, David will be
the CEO of the PEO Division. The Thermal Coating activities will be managed
by Rob La Lumiere. The parties agree that for a period of one year there
will be no acquisitions outside the PEO or thermal coating industries,
without the unanimous consent of the initial directors or their respective
assignees.
4. The initial Board of Directors will consist of Andrew Mazone, Chairman,
David R. Mowrer, Thomas R. Klein, Charles R. Affatato, and possibly Robert
La Lumiere. Each member of the Board shall appoint a designee to function
in his absence or incapacity. The parties agree that David R. Mowrer will
be appointed to serve for a period of 5 years as a member of the Board of
Directors. David R. Mowrer will take necessary steps to create a
testamentary instrument will convey his seat on the Board of Directors for
the remainder of his initial term, in the event of his demise prior to the
conclusion of his term. This appointment may be made in the alternative,
however, the Board must be advised of the individuals appointed so
designated.
5. All decisions that affect the PEO side of the business will be made with
the concurrence of the initial Board and any other individuals that may
become significant shareholders.
6. The PEO side of the new company will remain in tact and all parties will
work toward expanding the PEO operations with a goal of reaching 100,000
employees.
7. This agreement contemplates the re-acquisition of the Edge stock
transferred to Concordia and the Hedge fund and repayment of the note
payable to Concordia.
8. David R. Mowrer acknowledges that he is currently in possession of 85% of
the issued and outstanding, Edge Stock. He further acknowledges that a
portion of the said stock is to be distributed to Janet Russell and Tom
Vipperman at some time in the future.
9. All parties agree that a stock option incentive plan for PEO employees and
staff, based upon performance, will be implemented. The plan will result in
an increase in the
1 of 2
<PAGE>
umber of shares issued, however, the shares will be issued in favor of the
individuals who are performing at the highest levels and graduated on
performance.
/s/ Andrew B. Mazzone
/s/ D. Mowrer
2 of 2
Thermaltec International Corp and Subsidiaries
Calculation of net Earnings per Share
<TABLE>
<CAPTION>
(Unaudited)
For the For the For the For the
year ending year ending year ending 3 months ending
9/30/97 9/30/98 9/30/99 12/31/99
----------- ----------- ----------- ---------------
<S> <C> <C> <C> <C>
Earnings or (loss):
Net Loss ($259,719) ($402,684) ($958,604) ($86,083)
--------- --------- --------- ---------
Net Earnings for calculation
of fully diluted earnings
per share ($259,719) ($402,684) ($958,604) ($86,083)
========= ========= ========= =========
Shares:
Weighted Average No.
of shares of common stock
during the year 2,046,750 2,105,489 2,490,420 2,608,118
--------- --------- --------- ---------
Weighted Average No.
of shares of common stock
during the year 2,046,750 2,105,489 2,490,420 2,608,118
========= ========= ========= =========
Per share amounts:
Basic ($0.13) ($0.19) ($0.38) ($0.03)
========= ========= ========= =========
Fully diluted ($0.13) ($0.19) ($0.38) ($0.03)
========= ========= ========= =========
</TABLE>
EXHIBIT 21.1
Organization/Reporting Entities
The consolidated financial statements of Thermaltec International Corp. and
Subsidiaries (the "Company") include the following entities:
Thermaltec International Corp.
Thermaltec International Corp. ("TTI") was incorporated in 1994 under the laws
of the state of Delaware. TTI was organized for the purpose of engaging in the
sale of thermal sprayed coatings to individual customers in the United States
and other countries. TTI also serves as the parent company, which acts as a
holding company for its subsidiaries and provides administrative support to the
operations of the Company. In May 1999, all operating assets and liabilities of
Thermaltec were transferred into Panama Industries.
Thermaltec De Costa Rica, S.A.
Thermaltec de Costa Rica, S.A. ("TCR") is a wholly-owned subsidiary located in
San Jose, Costa Rica. TCR began operations during fiscal 1995, and provides
thermal spray coatings to businesses and individuals throughout Costa Rica.
Metal Coatings, Inc.
Metal Coatings, Inc. ("MCI") was a majority-owned subsidiary located in San
Juan, Puerto Rico. MCI began significant operations during fiscal 1997, and
provided thermal spray coatings to businesses and individuals throughout Puerto
Rico. On May 31, 1998 the operations of MCI ceased, and the remaining assets and
liabilities were assumed by TTI No material expenses were associated with the
closure.
Thermaltec Dominicana, S.A.
Thermaltec Dominicana, S.A. ("TDR") was a majority-owned subsidiary located in
Santo Domingo in the Dominican Republic. TDR began significant operations in
October 1996 and provided thermal spray coatings, as a market test, to
businesses and individuals in the Santo Domingo metropolitan area. In Februray
1998, the operations of TDR ceased and the assets and liabilities were assumed
by TTI. No material expenses were associated with the closure.
Panama Industries, Ltd.
Panama Industries was incorporated in March 1998, but was inactive and not part
of the consolidated group until May Of 1999. At that time, all operating assets
and liabilities of Thermaltec were transferred into Panama.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 9/30/99 AND IS QUALIFED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> SEP-30-1999
<CASH> 131,278
<SECURITIES> 0
<RECEIVABLES> 159,448
<ALLOWANCES> 0
<INVENTORY> 19,779
<CURRENT-ASSETS> 311,997
<PP&E> 225,999
<DEPRECIATION> 81,749
<TOTAL-ASSETS> 461,337
<CURRENT-LIABILITIES> 664,776
<BONDS> 0
0
0
<COMMON> 261
<OTHER-SE> (203,178)
<TOTAL-LIABILITY-AND-EQUITY> 461,337
<SALES> 408,987
<TOTAL-REVENUES> 408,987
<CGS> 316,257
<TOTAL-COSTS> 411,340
<OTHER-EXPENSES> 606,803
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 33,191
<INCOME-PRETAX> (958,604)
<INCOME-TAX> 0
<INCOME-CONTINUING> (958,604)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (958,604)
<EPS-BASIC> (0.38)
<EPS-DILUTED> (0.38)
</TABLE>
