-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CD7apE/PSVateaemlo7xD5Ab+XZes6D8dhrdIpl2A2Sg4v77LEGFeygTdpTjYkMb /SuiMOe3pe4mKcryqsi+cQ== 0001046211-04-000027.txt : 20040513 0001046211-04-000027.hdr.sgml : 20040513 20040513161346 ACCESSION NUMBER: 0001046211-04-000027 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20040331 FILED AS OF DATE: 20040513 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARLTON TECHNOLOGIES INC CENTRAL INDEX KEY: 0000096988 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 221825970 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07708 FILM NUMBER: 04803174 BUSINESS ADDRESS: STREET 1: 2828 CHARTER RD STE 101 CITY: PHILADELPHIA STATE: PA ZIP: 19154 BUSINESS PHONE: 2156766900 MAIL ADDRESS: STREET 1: 2828 CHARTER RD CITY: PHILADELPHIA STATE: PA ZIP: 19154 FORMER COMPANY: FORMER CONFORMED NAME: TELESCIENCES INC DATE OF NAME CHANGE: 19880201 10-Q 1 form10q_march31-2004.txt FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q --- X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) --- OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2004 OR --- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) --- OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to_______ Commission file number 1-7708 MARLTON TECHNOLOGIES, INC. ------------------------------------------- (Exact name of issuer as specified in its charter)
Pennsylvania 22-1825970 - ------------------------------------------------------------------------ ----------------------------------- (State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.) 2828 Charter Road Philadelphia PA 19154 - -------------------------------------------------------------- ------------------- ---------------- -------- (Address of principal executive offices) City State Zip Issuer's telephone number (215) 676-6900 Former name, former address and former fiscal year, if changed since last report: ____________________
Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No _______ Indicate by check mark whether the issuer is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ______ No X APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15 (d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by court. Yes ______ No ______ APPLICABLE ONLY TO CORPORATE ISSUERS: State the number of shares outstanding of each of the issuer's classes of common stock as of the last practicable date: 12,844,696 Item 1. FINANCIAL STATEMENTS MARLTON TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In thousands except share and per share data)
March 31, December 31, ASSETS 2004 2003 --------- ------------ Current: Cash and cash equivalents 449 241 Accounts receivable, net of allowance of $473 and $415, respectively 11076 7824 Inventories 6329 6272 Prepaid and other current assets 1172 1191 ----- ----- Total current assets 19026 15528 Property and equipment, net of accumulated depreciation of $10,446 and $10,106, respectively 2960 3240 Rental assets, net of accumulated depreciation of $3,826 and $3,672, respectively 2680 2789 Goodwill 2714 2714 Other assets, net of accumulated amortization of $1,677 and $1,603, respectively 424 388 Notes receivable 140 159 ----- ----- Total assets 27944 24818 ===== ===== LIABILITIES AND STOCKHOLDERS EQUITY Current liabilities: Current portion of long-term debt 89 89 Accounts payable 7392 6363 Accrued expenses and other current liabilities 5966 6080 ----- ----- Total current liabilities 13447 12532 ----- ----- Long-term liabilities: Long-term debt, net of current portion 6452 5146 ----- ------ Total long-term liabilities 6452 5146 ----- ------ Total liabilities 19899 17678 ----- ------ Commitments and contingencies -- -- Stockholders equity: Preferred stock, no par value - shares authorized 10,000,000; no shares issued or outstanding -- -- Common stock, no par value - shares authorized 50,000,000; 12,844,696 outstanding at March 31, 2004 and December 31, 2003 -- -- Stock warrants 742 742 Additional paid-in capital 32951 32951 Accumulated deficit (25500) (26405) ----- ----- 8193 7288 Less cost of 148,803 treasury shares (148) (148) ----- ----- Total stockholders equity 8045 7140 ----- ----- Total liabilities and stockholders equity 27944 24818 ===== =====
The accompanying notes and the notes to the consolidated financial statements included in the Registrant's Annual Report on Form 10-K are an integral part of these financial statements. 2 MARLTON TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands except per share data) For the three months ended
March 31, 2004 March 31, 2003 -------------- -------------- Net sales $ 18,549 $ 17,456 Cost of sales 13,810 13,054 ------ ------ Gross profit 4,739 4,402 Selling expenses 2,217 2,300 Administrative and general expenses 1,525 1,645 ------ ------ Operating profit 997 457 Other income (expense): Interest and other income - 4 Interest expense (92) (45) ------- ------ Income before income taxes 905 416 Provision for income taxes - - ------ ------ Net income 905 416 ====== ====== Net income (loss) per common share: Basic $.07 $.03 ====== ====== Diluted $.07 $.03 ====== ======
The accompanying notes and the notes to the consolidated financial statements included in the Registrant's Annual Report on Form 10-K are an integral part of these financial statements. 3 MARLTON TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands)
For the three months ended March 31, 2004 March 31, 2003 -------------- -------------- Cash flows from operating activities: Net income $ 905 $ 416 Adjustments to reconcile net income to cash provided by (used in) operating activities: Depreciation and amortization 569 562 Change in operating assets and liabilities: Increase in accounts receivable, net (3,252) (912) (Increase) decrease in inventories (57) 1,188 (Increase) decrease in prepaid and other assets 19 (101) Increase (decrease) in accounts payable, accrued expenses and other current liabilities 915 (2,481) Net cash used in operating activities (901) (1,328) Cash flows from investing activities: Capital expenditures (106) (232) Net cash used in investing activities (106) (232) Cash flows from financing activities: Proceeds from revolving credit facility, net 1,328 1,187 Payments for acquisition obligation (11) - Payments for leasehold improvement obligation (11) - Payments for loan origination fees (117) - Payments for promissory note - (33) Proceeds from notes receivable 26 77 Net cash provided by (used in) financing activities 1,215 1,231 Decrease in cash and cash equivalents 208 (329) Cash and cash equivalents - beginning of period 241 880 Cash and cash equivalents - end of period $ 449 $ 551
The accompanying notes and the notes to the consolidated financial statements included in the Registrant's Annual Report on Form 10-K are an integral part of these financial statements. 4 MARLTON TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION: The consolidated financial statements included herein are unaudited and have been prepared in accordance with generally accepted accounting principles for interim financial reporting and Securities and Exchange Commission regulations. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the financial statements reflect all adjustments (of a normal and recurring nature), which are necessary to present fairly the financial position, results of operations and cash flows for the interim periods. Operating results for the quarter are not necessarily indicative of the results that may be expected for the full year or for future periods. These financial statements should be read in conjunction with the Form 10-K for the year ended December 31, 2003. 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 periods. Actual results may differ from those estimates. 2. MAJOR CUSTOMERS: During the first quarter of 2004 and 2003, the same customer accounted for 12% and 16%, respectively, of the Company's total sales. 3. PER SHARE DATA: The following table sets forth the computation of basic and diluted net income per common share (in thousands except per share data):
Three months ended ------------------ March 31, 2004 March 31, 2003 -------------- -------------- Net income $905 $416 Weighted average common shares outstanding used to compute basic net income per common share 12,845 12,845 Additional common shares to be issued assuming the exercise of stock options, net of shares assumed reacquired 742 -- Total shares used to compute diluted net income (loss) per common share 13,587 12,845 Basic net income per share $.07 $.03 Diluted net income per share $.07 $.03
5 MARLTON TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Excluded in the computation of diluted income per common share were outstanding options and warrants to purchase 248,846 shares of common stock at March 31, 2004 and 7,373,512 shares of common stock at March 31, 2003 because the option and warrant exercise prices were greater than the average market price of the common shares. 4. INVENTORIES: Inventories, as of the respective dates, consist of the following (in thousands):
March 31, 2004 December 31, 2003 -------------- ----------------- Raw materials $491 $ 467 Work in process 3,063 3,579 Finished goods 2,775 2,226 $6,329 $6,272
5. RECENTLY ISSUED ACCOUNTING STANDARDS In June 2002, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 146, "Accounting for Exit or Disposal Activities" ("SFAS 146"). Statement of Financial Accounting Standards ("SFAS") 146 addresses significant issues regarding the recognition, measurement, and reporting of costs associated with exit and disposal activities, including restructuring activities that are currently accounted for pursuant to the guidance that the Emerging Issues Task Force ("EITF") has set forth in EITF Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)." Effective in the first quarter of 2003, the Company adopted the provisions of SFAS 146. This new accounting principle had an impact on the timing and recognition of costs associated with the Company's relocation and consolidation of its West Coast operations during the second half of 2003. 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Three months ended March 31, 2004 as compared with three months ended March 31, 2003 Sales
Three Months Ended (in thousands) March 31, 2004 March 31, 2003 -------------- -------------- Trade show exhibits group $ 13,208 $ 14,017 Permanent and scenic displays group 5,341 3,439 ------ ------ Total sales $ 18,549 $17,456 ====== ======
Total net sales of $18.5 million for the first quarter of 2004 grew 6% from total net sales of $17.5 million for the first quarter of 2003. This increase was led by higher sales of permanent and scenic displays, which increased $1.9 million, or 55%, while sales of trade show exhibits and related services decreased $0.8 million, or 6%, below the prior year first quarter results. The increase in sales of permanent and scenic displays was attributable to higher sales of store fixtures and permanent museum displays. The decrease in sales of trade show exhibits and related products was principally attributable to lower trade show budgets and reduced attendance at certain trade shows for existing clients. Gross Profit Gross profit, as a percentage of net sales, of 25.5% for the first quarter of 2004 improved slightly from 25.2% for the same prior year period. This improvement was primarily due to higher gross profit margins generated by sales of store fixtures. Selling Expenses Selling expenses of $2.2 million, or 12% of net sales, for the first quarter of 2004 decreased from $2.3 million, or 13.2% of net sales, for the corresponding period of 2003. This decrease was largely the result of cost reduction initiatives and higher sales of permanent and scenic displays, which are subject to lower variable selling expenses. Administrative and General Expenses Administrative and general expenses were reduced to $1.5 million in the first quarter of 2004 from $1.6 million in the comparable prior year period. This reduction was principally attributable to cost reduction initiatives implemented for the Company's trade show exhibit businesses. Operating Profit Operating profit increased to $1 million for the first quarter of 2004 from $0.5 million for the same period of 2002 due, in large part, to higher sales volume and cost reduction initiatives. 7 Other Income/(Expense) Interest expense increased to $92,000 in the first quarter of 2004 from $45,000 in the first quarter of 2003 due to higher borrowing from the Company's revolving credit facility and to higher interest rates on the Company's new credit facility discussed below. Net Income The Company generated net income of $0.9 million ($.07 per fully diluted share) in the first quarter of 2004 as compared with net income of $0.4 million ($.03 per fully diluted share) in the corresponding period of 2003. The improvement was principally attributable to higher sales volume and cost reduction initiatives. Provision for Income Taxes In the fourth quarter of 2002, the Company established a valuation allowance for deferred income tax assets related to net operating loss carry forwards. As a result, the Company did not record a provision for income taxes in the first quarters of 2004 and 2003. Backlog The Company's backlog of orders was approximately $21 million at March 31, 2004 and $20 million at March 31, 2003. LIQUIDITY AND CAPITAL RESOURCES On February 6, 2004, the Company replaced its $8 million revolving credit facility with a new credit facility provided by a commercial asset-based lender. The new credit facility, which expires on February 6, 2007, provides for borrowing capacity of up to $12 million based on a percentage of eligible accounts receivable and inventories. This new facility bears interest based on the 30-day dealer placed commercial paper rate plus 4.50% (effective rate of 5.5% at March 31, 2004), restricts the Company's ability to pay dividends, and includes certain financial covenants (fixed charge coverage ratio and maximum capital expenditure amount of $1 million in 2004 and $1.25 million in 2005 and in 2006). The Company's borrowing capacity was $9.3 million at March 31, 2004. Proceeds from this credit facility are used primarily for working capital and other capital purposes. The Company's working capital increased to $5.6 million at March 31, 2004 from $3 million at December 31, 2003, largely due to a $3.3 million increase in accounts receivable. The increase in accounts receivable was principally attributable to higher sales near the end of the first quarter of 2004 as compared with sales in the fourth quarter of 2003. The Company has lease commitments for certain facilities under non-cancelable operating leases. Timing of future lease commitments as well as maturities of long-term debt are as follows:
Payment due by period --------------------- Less than 1 1-3 3-5 More than Contractual Obligations Total Year -2004 Years Years 5 Years ----------------------- ----- ---------- ----- ----- ---------- Long-Term Debt Obligations $ 6,541 $ 89 $6,452 $-- $-- Capital Lease Obligations -- -- -- -- -- Operating Lease Obligations 16,160 1,651 4,919 1,590 8,000 Purchase Obligations -- -- -- -- -- Other Long-Term Liabilities Reflected on the Registrant's Balance Sheet Under GAAP -- -- -- -- -- ------ ------ ------ ------ ------ Total $22,701 $ 1,740 $11,371 $1,590 $8,000 ====== ====== ====== ===== ======
8 The Company leases a facility from a partnership controlled by two shareholders of the Company. This lease, which expires on May 14, 2019, contains an option for the Company to terminate after 10 years (May 14, 2009) subject to the landlord's ability to relet the premises. The minimum annual rent is $771,000 through May 14, 2009 and $857,173 through May 14, 2019 (included in the table above). The Company is also responsible for taxes, insurance and other operating expenses for this facility. The Company jointly leases a 31,000 square foot facility with International Expo Services ("IES"), in which the Company holds a minority interest. The annual lease commitment for this facility is $214,000 through September 22, 2007, which is not included with the above future operating lease commitments. Payments in connection with this lease are made by IES. OUTLOOK The Company expects combined sales of trade show exhibits and of permanent and scenic displays in 2004 to decrease from 2003 levels. The Company's trade show exhibit client base of Fortune 1000 companies is expected to closely manage their marketing budgets, which would inhibit the Company's trade show exhibit sales and margins. The Company expects sales of store fixtures to increase in 2004 from 2003 levels. The Company continues to explore new sales opportunities while pursuing operating efficiency improvements and cost reduction initiatives to mitigate the impact of lower sales volume. RECENTLY ISSUED ACCOUNTING STANDARDS In June 2002, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 146, "Accounting for Exit or Disposal Activities" ("SFAS 146"). Statement of Financial Accounting Standards ("SFAS") 146 addresses significant issues regarding the recognition, measurement, and reporting of costs associated with exit and disposal activities, including restructuring activities that are currently accounted for pursuant to the guidance that the Emerging Issues Task Force ("EITF") has set forth in EITF Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)." Effective in the first quarter of 2003, the Company adopted the provisions of SFAS 146. This new accounting principle had an impact on the timing and recognition of costs associated with the Company's relocation and consolidation of its West Coast operations during the second half of 2003. FORWARD-LOOKING STATEMENTS This report contains forward-looking statements. When used in this report, the words "intends," "believes," "plans," "expects," "anticipates," "probable," "could" and similar words are used to identify these forward looking statements. In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, there are certain important factors that could cause the Company's actual results to differ materially from those included in such forward-looking statements. Some of the important factors which could cause actual results to differ materially from those projected include, but are not limited to: the Company's ability to continue to identify and enter new markets and expand existing business; continued availability of financing to provide additional sources of funding for capital expenditures, working capital and investments; the effects of competition on products and pricing; growth and acceptance of new product lines through the Company's sales and marketing programs; changes in material and labor prices from suppliers; changes in customers' financial condition; the Company's ability to attract and retain competent employees; the Company's ability to add and retain customers; changes in sales mix; the Company's ability to integrate and upgrade technology; uncertainties regarding accidents or litigation which may arise; the financial impact of facilities consolidations; uncertainties about the impact of the threat of future terrorist attacks on business travel and related trade show attendance; and the effects of, and changes in the economy, monetary and fiscal policies, laws and regulations, inflation and monetary fluctuations as well as fluctuations in interest rates, both on a national and international basis. 9 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company's revolving credit facility bears a floating rate of interest, based on the 30-day dealer placed commercial paper rate plus 4.50%. The Company had borrowings of $6.3 million from its revolving credit facility at March 31, 2004. Fluctuations in foreign currency exchange rates do not significantly affect the Company's financial position and results of operations. ITEM 4. CONTROLS AND PROCEDURES (a) Evaluation of disclosure controls and procedures The Company established a Disclosure Committee chaired by the Company's Chief Financial Officer and comprised of managers representing the Company's major areas, including financial reporting and control, sales, operations and information technology. This Committee carried out an evaluation of the effectiveness and operation of the Company's disclosure controls and procedures, and established ongoing procedures to monitor and evaluate these controls and procedures in the future. Based upon that evaluation, within the 90 days prior to the date of this report, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective in alerting them on a timely basis to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company's periodic SEC filings. (b) Changes in internal controls There were no significant changes in the Company's internal controls or in other factors that would significantly affect these controls subsequent to the date of their evaluation. PART II - OTHER INFORMATION Responses to Items one through five are omitted since these items are either inapplicable or the response thereto would be negative. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits. --------- Exhibit Page ------- ---- 10(a) Fifth Amendment to Lease for Premises located at 8125 Troon Circle, Austell, GA 30001. 12 10(b) Third Amendment to Lease for Premises located at 2025 Gillespie Way, El Cajon, CA 90202. 18 10 10(c) Fourth Amendment to Lease for Premises located at 2025 Gillespie Way, El Cajon, CA 90202. 24 10(d) Fifth Amendment to Lease for Premises located at 2025 Gillespie Way, El Cajon, CA 90202. 29 10(e) Amendment to Standard Sublease at 2025 Gillespie Way, El Cajon, CA 35 10(f) First Amendment to Loan and Security Agreement with General Electric Capital Corporation. 44 31(a) Rule 13a - 14(a) / 15(d) - 14 (a) Certification, Chief Executive Officer 49 31(b) Rule 13a - 14(a) / 15(d) - 14 (a) Certification, Chief Financial Officer 50 32 Section 1350 Certifications 51
(b) Reports on Form 8-K. One report on Form 8-K dated March 31, 2004 was filed by the Company during the first quarter of 2004, reporting a Notification of Late Filing on Form 12b-25 dated March 31, 2004. SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MARLTON TECHNOLOGIES, INC. By: /s/ Robert B. Ginsburg ------------------ Robert B. Ginsburg President and Chief Executive Officer By: /s/ Stephen P. Rolf --------------- Stephen P. Rolf Chief Financial Officer Dated: May 13, 2004 11 EX-10 2 fifthamend_lease.txt EXHIBIT 10A - FIFTH AMENDMENT TO LEASE Exhibit 10(a) FIFTH AMENDMENT TO LEASE AGREEMENT THIS FIFTH AMENDMENT TO LEASE AGREEMENT (the "Fifth Amendment") is made and entered into as of the _____ day of April, 2004 (the "Effective Date"), by and between SOUTHEAST COMMERCIAL, LLC, a Delaware limited liability company ("Landlord"), and SPARKS EXHIBITS & ENVIRONMENTS, INC., a Georgia corporation ("Tenant"). W I T N E S S E T H: WHEREAS, Woodlands Joint Venture No. V534-3, as landlord, and Sparks Exhibits Inc., as tenant, entered into that certain Lease Agreement dated August 12, 1993, as amended by that certain First Amendment to Lease Agreement dated December 8, 1997, as further amended by that certain Second Amendment to Lease Agreement dated March 30, 2000, as further amended by that certain Third Amendment to Lease (the "Third Amendment") dated July 2002, and as further amended by that certain Fourth Amendment to Lease (the "Fourth Amendment") dated September 11, 2003 (as so amended, the "Lease") with respect to approximately 80,876 rentable square feet of space (the "8125 Space") located in Suite B of the building having an address of 8125 Troon Circle, Austell, Georgia 30168 (the "8125 Building") and located within that certain development known as Woodlands at Riverside (the "Project"), and approximately 17,200 rentable square feet of space (the "8055 Space") located in Suite A of the building having an address of 8055 Troon Circle, Austell, Georgia 30168 (the "8055 Building") and located within the Project; and WHEREAS, Landlord is the successor in interest to Woodlands Joint Venture No. V534-3, and is now the landlord under the Lease; and WHEREAS, Tenant is the successor in interest to Sparks Exhibits Inc., and is now the tenant under the Lease; and WHEREAS, Landlord and Tenant desire to enter into this Fifth Amendment for the purpose of evidencing their mutual understanding and agreement regarding the relocation of the 8055 Space and certain other matters relating thereto as set forth hereinbelow. NOW, THEREFORE, in consideration of the foregoing and the mutual premises and covenants contained herein and in the Lease, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Landlord and Tenant hereby agree as follows: 1. Defined Terms. All terms used herein and denoted by their initial capitalization shall have the meanings set forth in the Lease unless set forth herein to the contrary. 2. Relocation of 8055 Space. Effective as of April 1, 2004 (the "Relocation Commencement Date"), Landlord by these presents leases and rents unto Tenant, and Tenant hereby leases from Landlord approximately Twenty-Five 12 Thousand Five Hundred Fifty (25,550) rentable square feet of space in Suite C of the building within the Project having an address of 8075 Troon Circle (the "8075 Building") as more particularly set forth on Exhibit "A" attached hereto and incorporated herein by this reference (the "8075 Space"). Tenant hereby leases the 8075 Space on the same terms and conditions as the 8055 Space, except as otherwise set forth herein to the contrary; provided, however, Tenant shall receive no concessions or allowances on account of leasing the 8075 Space, except as otherwise specifically and expressly provided herein. Tenant has given, granted and surrendered, and by these presents does give, grant and surrender unto Landlord, its successors and assigns, the 8055 Space, the improvements therein, and all the rights, title and interest of Tenant in and to the same, effective as of the Relocation Commencement Date. From and after the Relocation Commencement Date, Tenant shall have no interest in the 8055 Space. Tenant agrees to vacate the 8055 Space and remove all of its personal effects therefrom and relocate to the 8075 Space by the Relocation Commencement Date. Tenant shall bear the expense of said removal from the 8055 Space to the 8075 Space. Effective as of the Relocation Commencement Date, the 8075 Space together with the 8125 Space shall for all purposes hereof be deemed to be and to constitute the "Premises" under the Lease and all terms, conditions, covenants, warranties, agreements and provisions of the Lease shall continue in full force and effect and shall apply to the 8075 Space, except as expressly set forth herein to the contrary. 3. Base Rental. From and after the Relocation Commencement Date to and through December 31, 2004, Tenant shall pay to Landlord Base Rental for the 8075 Space, as if the 8075 Space only contained 5,000 rentable square feet of space. Thereafter for the duration of the Extended Term (as defined in the Fourth Amendment), Tenant shall pay to Landlord Base Rental for the 8075 Space as if the 8075 Space only contained 17,200 rentable square feet of space. Tenant shall pay such Base Rental for the 8075 Space on the first day of each month without demand, counter-claim or set-off in accordance with the following schedule:
Dates PSF Annual Rental Monthly Rental 4/01/04 - 12/31/04 $2.00 $10,000.00 $ 833.33 1/01/05 - 12/31/05 $2.00 $34,400.00 $2,866.67 1/01/06 - 12/31/06 $2.04 $35,088.00 $2,924.00 1/01/07 - 06/30/07 $2.08 $35,776.00 $2,981.33
4. Tenant's Share. From and after the Relocation Commencement Date, for all purposes of the Lease, as amended hereby, the term "Pro Rata Share" shall mean (i) with respect to the 8125 Space, the ratio of the total floor area of the 8125 Space to the total floor area of the 8125 Building or the Project, as applicable (and consistent with historic practice of allocating operating expenses under the Lease), and (ii) with respect to the 8075 Space, and notwithstanding anything to the contrary contained in the Lease, as amended hereby, the ratio of 17,200 square feet to the total area of the 8075 Building or the Project, as applicable (and consistent with historic practice of allocating operating expenses under the Lease). 5. Condition of the 8075 Space/Use of 8075 Space. (a) Notwithstanding anything to the contrary contained or implied in this Fifth Amendment, Tenant agrees that it will accept possession of the 8075 Space during the remainder of the Extended Term in an "as is, where is" condition, and that no representations, warranties, or inducements, with respect to any condition of the 8075 Space have been made by Landlord, or its designated representatives, to Tenant, or its designated representatives. In furtherance of the foregoing, Tenant hereby acknowledges that no promises to decorate, alter, repair or improve the 8075 Space either before or after the execution of this Fifth Amendment have been made to Tenant, or its designated representatives, by Landlord, or its designated representatives. 13 (b) Notwithstanding anything to the contrary contained in the Lease, as amended hereby, Tenant shall use the 8075 Space for dry storage purposes only and for no other use. Tenant's use of the 8075 Space shall be in compliance with any and all applicable laws, codes, rules, ordinances and regulations from any and all applicable governing authorities. 6. Tenant's Termination Right for 8075 Space. Tenant shall have the on-going right to terminate the Lease, as amended hereby, as the same applies to the 8075 Space, effective as of December 31st of each calendar year during the Extended Term commencing with December 31, 2004 (the specific December 31st on which the Lease as the same applies to the 8075 Space terminates shall be referred to as the "Effective Termination Date for the 8075 Space"), subject to the following terms and conditions: (a) Landlord shall have received from Tenant written notice delivered in accordance with the notice provisions of the Lease that Tenant has irrevocably exercised its right to terminate the Lease, as the same applies to the 8075 Space, on or before the November 1st directly preceding the Effective Termination Date for the 8075 Space, time being of the essence. (b) On or before the Effective Termination Date for the 8075 Space, as set forth above, Tenant shall have removed from the 8075 Space all its personal property which the Lease allows Tenant to remove, Tenant shall have removed all of its signage, and Tenant shall have peacefully surrendered the 8075 Space and the keys thereto to Landlord in the same condition as on the date Tenant first occupied the 8075 Space, only normal wear and tear excepted. (c) The Lease, as amended hereby, shall be in full force and effect as the same pertains to the 8075 Space on the date of the exercise of such termination option and the Effective Termination Date for the 8075 Space, and, further, there shall exist no bona fide material monetary default on the part of Tenant under the Lease, as amended hereby, beyond any applicable notice and cure period, on the date of the exercise of such termination option and on the Effective Termination Date for the 8075 Space. (d) If Tenant fails to exercise such termination option as provided in and in strict accordance with the terms of this Section 6, or if the conditions in subsections (a) through and including (c) above are not entirely satisfied, Tenant's option to terminate the Lease, as amended hereby, as the same applies to the 8075 Space for a specific December 31st shall automatically terminate and be of no further force or effect, or if exercised, shall be void. 7. Landlord's Termination Right/Tenant's Right of First Refusal. Notwithstanding anything to the contrary contained in the Lease, as amended hereby, the parties acknowledge and agree that the 8075 Space contains a total of approximately 25,550 rentable square feet; provided, however, from the Relocation Commencement Date to and through December 31, 2004, Tenant is paying Base Rental on the 8075 Space as if the 8075 Space contained 5,000 rentable square feet and during the remainder of the Extended Term, Tenant is paying Base Rental on the 8075 Space as if the 8075 Space contained 17,200 rentable square feet. Notwithstanding anything to the contrary contained herein and in consideration of the reduced Base Rental for the 8075 Space and Tenant's termination right as set forth in Section 6 above, Tenant acknowledges that Landlord shall have the right to terminate the Lease as the same applies to the 8075 Space in accordance with the terms and conditions set forth herein. 14 (a) During the Extended Term, Landlord shall have the right to market the 8075 Space to third parties upon terms and conditions acceptable to Landlord in Landlord's sole discretion. Additionally, Landlord shall have the right, upon reasonable prior oral or written notice to Tenant, to exhibit the 8075 Space to prospective tenants and that during the duration of the Extended Term Landlord has the right, but not the obligation, to market the 8075 Space to such prospects. (b) In the event Landlord obtains a written offer from a prospective tenant to lease all or any portion of the 8075 Space and Landlord desires to accept such offer, then Landlord shall promptly submit to Tenant in writing all of the terms and conditions of such proposed offer to lease (hereinafter referred to as the "Offer") and Tenant shall have the right and option to lease the 8075 Space upon the same monetary terms and conditions, including any offer of free rent and leasehold improvement allowances, and term length as embodied in the copy of such Offer submitted to Tenant by Landlord, but otherwise upon the same terms and conditions as the Lease, as amended hereby. Notwithstanding the foregoing, in the event Tenant accepts the terms of the Offer, Tenant's termination right for the 8075 Space as set forth in Section 6 above, shall automatically terminate and be of no further force and effect. (c) If Tenant shall elect to exercise its right to lease the 8075 Space, written notice of such election shall be given to Landlord within ten (10) days from the time that Tenant first received a copy of the Offer from Landlord (hereinafter referred to as the "Offer Period"). If Tenant does not accept the terms of the Offer within the Offer Period or Tenant waives its rights under the Offer (no notice is deemed to be a waiver of such right), then Landlord, at Landlord's option shall have the right to terminate the Lease, as amended hereby, as the same applies to the 8075 Space, upon thirty (30) days advance written notice to Tenant. (d) In the event the Lease, as amended hereby, is terminated as the same pertains to the 8075 Space, in accordance with the terms of this Section 7, then on or before the actual termination date, Tenant shall remove from the 8075 Space all its personal property which the Lease allows Tenant to remove, Tenant shall remove all of its signage, and Tenant shall peacefully surrender the 8075 Space and the keys thereto to Landlord in the same condition as on the date Tenant first occupied the 8075 Space, only normal wear and tear excepted. (e) In the event Tenant accepts the terms of the Offer, Landlord and Tenant shall enter into a written agreement modifying and supplementing the Lease, as amended hereby, and specifying the appropriate terms and provisions relating to the terms and conditions of the Offer, including, without limitation, increasing, adjusting or augmenting rent. 8. Brokers. Tenant represents and warrants to Landlord that no broker, agent, commission salesperson, or other person, including, without limitation, Carter & Associates, LLC ("Carter") and/or New Southern Commercial Properties and/or New South Commercial Properties, Inc., has represented Tenant in the negotiations for and procurement of this Fifth Amendment and that no commissions, fees or compensation of any kind are due and payable in connection herewith to any broker, agent, commission salesperson or other person as a result of any act or agreement of Tenant, including without limitation Carter, 15 New Southern Commercial Properties and/or New South Commercial Properties, Inc. Tenant agrees that, if any broker makes a claim for a commission based upon the actions of Tenant, Tenant shall indemnify, defend and hold Landlord harmless from any such claim. The parties hereto do hereby acknowledge and agree that Trammel Crow Company has acted as agent for Landlord and not for Tenant in this transaction and shall be paid a commission by Landlord in connection with this transaction pursuant to the terms of a separate written commission agreement. Landlord agrees that, if any other broker other than Trammel Crow Company makes a claim for a commission based upon the actions of Landlord, Landlord shall indemnify, defend and hold Tenant harmless from any such claim. 9. Miscellaneous. This Fifth Amendment shall be governed by and construed in accordance with the laws of the State of Georgia, and shall be binding upon and inure to the benefit of the parties hereto and their respective successors, successors-in-title, representatives and permitted assigns. In the event of any inconsistency or conflict between the terms of this Fifth Amendment and of the Lease, the terms of this Fifth Amendment shall control. Time is of the essence of all of the terms of this Fifth Amendment. The signatory of Tenant represents to Landlord that he is duly authorized to execute and deliver this Fifth Amendment on behalf of Tenant. The Lease together with this Fifth Amendment constitutes and contains the sole and entire agreement of the parties hereto with respect to the subject matter hereof and no prior or contemporaneous oral or written representations or agreements between the parties and relating to the subject matter hereof shall have any legal effect. Effective immediately, and except for the options contained in Section 7 of the Fourth Amendment and Sections 6 and 7 of this Fifth Amendment, any and all options, including without limitation, expansion options, renewal options, termination options, extension options, and rights of first refusal or negotiation, granted to Tenant pursuant to the Lease are null and void and of no further force or effect. The submission of this Fifth Amendment for examination does not constitute an offer to enter into a contract and this Fifth Amendment shall be effective only upon execution hereof by Landlord and Tenant. Except as hereinabove provided, all other terms and conditions of the Lease shall remain unchanged and in full force and effect, and are hereby ratified and confirmed by the parties hereto. Tenant hereby acknowledges and agrees that, as of the date hereof, the Lease is subject to no offsets, claims, counterclaims or defenses of any nature whatsoever. Landlord acknowledges and agrees that to its actual knowledge, without investigation or inquiry, Tenant is not in default under the Lease. This Fifth Amendment may not be changed, modified, discharged or terminated orally in any manner other than by an agreement in writing signed by Landlord and Tenant or their respective heirs, representatives, successors and permitted assigns. If any clause or provision of this Fifth Amendment is illegal, invalid or unenforceable under present or future laws, the remainder of this Fifth Amendment shall not be affected thereby, and in lieu of each clause or provision of this Fifth Amendment which is illegal, invalid or unenforceable, there shall be added as a part of this Fifth Amendment a clause or provision as nearly identical to the said clause or provision as may be legal, valid and enforceable. IN WITNESS WHEREOF, the parties hereto have executed this Fifth Amendment on the day and year first above written. LANDLORD: SOUTHEAST COMMERCIAL, LLC, a Delaware limited liability company By: AEW Capital Management, LP, Its Asset Manager and Advisor, By: Name: Title: Duly Authorized 16 TENANT: SPARKS EXHIBITS AND ENVIRONMENTS INC., a Georgia corporation By: Name: Title: [CORPORATE SEAL] 17 EX-10 3 thirdamend_leaseagt.txt EXHIBIT 10(B) - THIRD AMENDMENT TO LEASE Exhibit 10(b) THIRD AMENDMENT TO LEASE AGREEMENT AND AGREEMENT THIS THIRD AMENDMENT TO LEASE AGREEMENT AND AGREEMENT (the "Third Amendment"), is entered into as of February 27, 2004, by and between GILLESPIE FIELD PARTNERS, LLC, a California limited liability company ("Landlord") and SPARKS EXHIBITS, LTD., a California corporation ("Tenant"), with reference to the following facts: A. Landlord and Tenant are all of the parties to that certain Lease Agreement dated as of June 29, 1998 (the "Lease"), wherein Landlord leased to Tenant certain real property located at 2025 Gillespie Way, El Cajon, California, having located thereon a single industrial building (the "Building") containing approximately 150,159 square feet of space (the "Original Premises"). B. Subsequent to execution of the Lease, Tenant's business requirements changed and Tenant requested that Landlord assist Tenant in locating tenants to lease portions of the Original Premises. In accordance with Tenant's request, Landlord previously identified G.T.M. Wholesale Liquidators Inc. ("GTM") as a prospective tenant to lease a portion of the Original Premises comprising approximately 40,694 square feet (the "GTM Premises") and Landlord and Tenant previously entered into that certain First Amendment to Lease Agreement and Agreement dated as of October 31, 2003 (the "First Amendment"), whereby Landlord and Tenant agreed to mutually cooperate and undertake to pay for and perform certain obligations with respect to the GTM Premises. The First Amendment was followed by that certain Second Amendment to, and Partial Termination of, Lease Agreement, dated as of January 1, 2004 (the "Second Amendment"), whereby Landlord and Tenant partially terminated the Lease with respect to the GTM Premises and amended the Lease in other respects. Subsequent to the execution of the First Amendment and the Second Amendment, Landlord has identified Professional's Choice Sports Medicine Products, Inc. ("Professional's Choice") as a prospective tenant to lease a portion of the Original Premises comprising approximately 37,600 square feet (the "Professional's Choice Premises") and Professional's Choice is willing to lease the Professional's Choice Premises. C. Landlord and Professional's Choice have negotiated prospective lease terms for the Professional's Choice Premises, which lease terms are substantially as set forth in that certain Irrevocable Offer to Lease dated as of February __, 2004, in the form attached to this Third Amendment as Exhibit A (the "Offer"), having appended thereto that certain Lease Agreement dated as of December 11, 2003 (the "Professional's Choice Lease"). D. Landlord and Tenant desire to memorialize in writing the terms and conditions upon which Landlord and Tenant will mutually cooperate and undertake to pay for and construct certain tenant improvements which are required by the Professional's Choice Lease (the "Professional's Choice Tenant Improvements"), and upon occupancy by Professional's Choice of the Professional's Choice Premises and the satisfaction and/or fulfillment of the other terms and provisions of this Third Amendment, the Lease will be and become partially terminated with respect to the portion of the Original Premises constituting the Professional's Choice Premises. NOW, THEREFORE, in consideration of the mutual covenants, agreements and undertakings contained in this Third Amendment and the exchange of other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. Definitions. Unless defined in this Third Amendment, or except as otherwise expressly provided in this Third Amendment, capitalized terms utilized in this Third Amendment shall have the meanings ascribed to such terms in the Lease, or the Professional's Choice Lease, as applicable. 2. Acknowledgement. Tenant and Sparks Exhibits Corp., a Pennsylvania corporation ("Guarantor"), each hereby acknowledge receipt of the Offer and the Professional's Choice Lease. 3. Tenant's Contribution; Undertakings Regarding Professional's Choice Tenant Improvements. The Professional's Choice Lease requires that Landlord install and construct the Professional's Choice Tenant Improvements. Tenant agrees to share the aggregate cost of the Professional's Choice Tenant Improvements, by paying to Landlord the sum of $100,000 ("Tenant's Contribution"), in accordance with the payment schedule set forth below in this Section 3. Tenant shall have no responsibility, obligation or liability to pay to Landlord any sum in excess of Tenant's Contribution on account of the Professional's Choice Tenant Improvements and concomitantly, Landlord shall have no responsibility, obligation or liability to return any portion of Tenant's Contribution to Tenant, irrespective of the overall aggregate cost of the Professional's Choice Tenant Improvements. Landlord and Tenant each hereby approve the Professional's Choice Tenant Improvements. Tenant specifically acknowledges, agrees and understands that the Professional's Choice Tenant Improvements include, among other things, a demising wall physically separating the Professional's Choice Premises from the GTM Premises and the Original Premises, respectively, separate metering of utilities, separate legal access to the Professional's Choice Premises and other legal and business requirements to configure the Professional's Choice Premises as separate space from the Original Premises and the GTM Premises. Concurrently upon the execution of this Third Amendment, Tenant shall pay to Landlord, in cash the sum of $25,000, representing a portion of the Tenant's Contribution (the "First Installment"), and Tenant understands and agrees that Landlord shall not be required to commence construction and installation of the Professional's Choice Tenant Improvements unless and until Tenant pays to Landlord the First Installment. Tenant shall thereafter pay to Landlord the remaining unpaid portion of the Tenant's Contribution (i.e., $75,000) in three equal installments of $25,000 each which shall be due and payable on that date certain which is three calendar weeks following the most recent payment by Tenant to Landlord of the prior installment of the Tenant's Contribution, respectively. Landlord shall undertake to construct and install, in accordance with the terms and provisions of the Professional's Choice Lease, the Professional's Choice Tenant Improvements. Tenant approves Landlord's entry into the Building and the Professional's Choice Premises in order to install and construct the Professional's Choice Tenant Improvements, demolition and/or construction activities necessary to configure the Professional's Choice Premises in accordance with the Professional's Choice Lease and agrees that Landlord may take or refrain from taking any action in good faith related to the responsibilities and undertakings of Landlord set forth in this Third Amendment. Tenant agrees to physically vacate the Professional's Choice Premises immediately in order to allow Landlord to perform its undertakings pursuant to this Section 3 and further agrees to conduct its operations in such a manner that it will not unreasonably interfere with the performance by Landlord of its undertakings set forth in this Section 3. 4. Agreement to Partially Terminate Lease; Effectiveness. Landlord agrees with Tenant that, (i) upon payment in full by Tenant of Tenant's Contribution in accordance with the provisions of Section 3 of this Third Amendment, (ii) actual occupancy by Professional's Choice of the Professional's Choice Premises on a rent paying basis currently scheduled for April 1, 2004, and (iii) compliance, in full, with all other terms and conditions set forth in this Third Amendment, the Lease shall, with no further action of the parties, be terminated with respect only to the portion of the Lease which pertains to the Professional's Choice Premises. Accordingly, the portion of the Lease pertaining to all of the Original Premises except the GTM Premises and the Professional's Choice Premises shall remain extant and in full force and effect, in accordance with its terms, unless and until Landlord and Tenant shall otherwise agree in writing. Landlord and Tenant shall execute a mutually acceptable written instrument acknowledging partial termination of the Lease in accordance with the provisions set forth above in this Section 4 and agreeing to such amendments and modifications of the Lease as are necessary and appropriate to modify Tenant's proportionate share of shared costs and expenses as provided in the Lease, and other matters, if any, as Landlord and Tenant shall mutually agree. 5. Amendment; Confirmation; Interpretation. To the extent, but only to the extent, necessary to give effect to the First Amendment and Second Amendment previously entered into between Landlord and Tenant and this Third Amendment, the Lease is deemed amended and modified. Except to the limited extent amended and modified hereby, the Lease is ratified and confirmed in all respects and remains extant and in full force and effect. 6. No Agency; Leasing Commissions and Landlord's Attorneys' Fees. Landlord and Tenant hereby acknowledge and agree that there is no agency relationship between Landlord and Tenant, either created by this Third Amendment or otherwise. Landlord shall not be entitled to any leasing commissions in connection with locating Professional's Choice as a tenant for the Professional's Choice Premises, or otherwise in connection with the Professional's Choice Lease. Subject to the last sentence below of this Section 6 of this Third Amendment, Tenant shall not be responsible or liable for any leasing commissions or Landlord's attorneys' fees and costs related to the Professional's Choice Lease or the Landlord-Tenant transactions reasonably related thereto, including without limitation, negotiation and preparation of this Third Amendment and fees and costs expected to be incurred by Landlord in connection with negotiation and preparation of the instrument partially terminating the Lease referred to in Section 4 of this Third Amendment, it being the intention of Landlord and Tenant that, except for responsibility and liability for any breaches of this Third Amendment, Tenant shall have no responsibility, liability or obligation in excess of the Tenant's Contribution in connection with the Professional's Choice Lease. Notwithstanding anything in the preceding sentence to the contrary, Tenant shall, in addition to Tenant's Contribution, reimburse Landlord for 50 percent of Landlord's attorneys' fees and costs related to the negotiation and preparation of this Third Amendment and fees and costs incurred by Landlord in connection with negotiation and preparation of the instrument partially terminating the Lease referred to in Section 4 of this Third Amendment, in the event, but only in the event, that the Lease does not become partially terminated with respect to the Additional Premises (as that term is defined in that certain Fourth Amendment to, and Agreement to Partially Terminate, Lease Agreement, which is to be executed by Landlord and Tenant substantially concurrent to the execution of this Third Amendment (the "Fourth Amendment"). 7. Indemnification. 7.1 By Tenant. Tenant hereby agrees to indemnify and hold Landlord, and the property and assets of Landlord, harmless, from and against any and all liabilities, damages, losses, costs, expenses, attorneys' fees and claims arising out of, resulting from or related to any breach or default by Tenant in the payment or performance of any of Tenant's agreements, promises, undertakings, obligations, responsibilities and/or liabilities under and by reason of this Third Amendment, including specifically but not by way of limitation, Tenant's failure to vacate the Professional's Choice Premises and/or otherwise to affect adversely Landlord's efforts to perform its responsibilities and obligations respecting construction and installation of the Professional's Choice Tenant Improvements. 7.2 By Landlord. Landlord hereby agrees to indemnify and hold Tenant, and the property and assets of Tenant, harmless, from and against any and all liabilities, damages, losses, costs, expenses, attorneys' fees and claims arising out of, resulting from or related to any breach or default by Landlord in the payment or performance of Landlord's agreements, promises, undertakings, obligations, responsibilities and/or liabilities under and by reason of this Third Amendment. 8. General Provisions. 8.1 Further Assurances. Each party hereto agrees to perform any further acts and execute and deliver any further documents that may be reasonably necessary to effectuate the provisions of this Third Amendment. 8.2 Counterparts; Fax Signatures. This Third Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile signatures shall have the same force and effect as original signatures. 8.3 Severability. If any provisions, or portions thereof, of this Third Amendment or the application thereof are held to be unenforceable or invalid by any court of competent jurisdiction, the remainder of this Third Amendment shall not be affected thereby and to this end only the provisions of this Third Amendment are declared severable. 8.4 Successors and Assigns. Subject to the provisions of Section 8.10 of this Third Amendment, all terms of this Third Amendment shall be binding on and shall inure to the benefit of and be enforceable by the parties hereto and their respective heirs, legal representatives, successors and assigns. 8.5 Governing Law; Venue. This Third Amendment shall be governed by, construed and enforced in accordance with the laws of the State of California and is to be performed in San Diego County, California and any action or other proceeding brought to enforce or interpret this Third Amendment shall be brought in San Diego County, California. 8.6 Waiver. No waiver of any of the provisions of this Third Amendment shall be deemed, or shall constitute, a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waive. No failure to enforce any right or provision hereunder shall preclude or affect the later enforcement of such right or provision. No waiver shall be binding unless executed by the party making the waiver. 8.7 Time. Time is of the essence with respect to the performance by each party of its rights and obligations hereunder. 8.8 Attorneys' Fees. In the event any attorney is employed by either party to this Third Amendment with regard to any legal action, arbitration or other proceeding brought by either party for the enforcement or interpretation of this Third Amendment, or because of any alleged dispute, breach, default, or misrepresentation involving any provisions of this Third Amendment, the party prevailing in any such proceeding shall be entitled to recover reasonable attorneys' fees and other costs and expenses incurred, in addition to any other relief to which it may be entitled. 8.9 No Joint Venture. The parties hereto are independent of one another and no joint venture, partnership or other collaborative venture is intended or implied by the provisions of this Third Amendment. 8.10 Assignment. Neither party may assign this Third Amendment nor any of its respective rights, liabilities and obligations under this Third Amendment without the prior written consent of the other party, which may be given or withheld in such party's sole and unreviewable discretion. 8.11 Entire Agreement. This Third Amendment, together with the First Amendment, the Second Amendment and the Lease, constitutes the entire agreement between the parties pertaining to the subject matter contained in this Third Amendment and supersedes all prior and contemporaneous agreements, representations and understandings of the parties with respect thereto. There are no representations, warranties, agreements or understandings, express or implied, written or oral between the parties hereto relating to the subject matter of this Third Amendment which are not fully expressed herein, in the First Amendment, the Second Amendment and/or the Lease. 8.12 Amendment. No supplement, amendment, modification, discharge or change of this Third Amendment shall be binding unless executed in writing by all of the parties. 8.13 Authority. If a party to this Third Amendment is a corporation or other entity which is not a natural person, each individual executing this Third Amendment on behalf of said corporation or other entity represents and warrants that he is duly authorized to execute and deliver this Third Amendment on behalf of said corporation or other entity in accordance with a duly adopted resolution of the board of directors of such corporation or the governing authority of such other entity or in accordance with the bylaws of such corporation or governing instrument(s) of such other entity, and that this Third Amendment is binding upon such corporation or other entity in accordance with its terms. IN WITNESS WHEREOF, the parties have executed this Third Amendment as of the date first set forth above. Landlord: Tenant: GILLESPIE FIELD PARTNERS, LLC SPARKS EXHIBITS, LTD., a California limited liability company a California corporation By: ____________________________ By: ________________________ [Signature] [Signature] ____________________________ ________________________ [Print Name and Title] [Print Name and Title EX-10 4 fourthamend_leaseagt.txt EXHIBIT 10(C) - FOURTH AMENDMENT TO LEASE Exhibit 10(c) FOURTH AMENDMENT TO, AND AGREEMENT TO PARTIALLY TERMINATE, LEASE AGREEMENT THIS FOURTH AMENDMENT TO, AND AGREEMENT TO PARTIALLY TERMINATE, LEASE AGREEMENT (the "Fourth Amendment"), is entered into as of March 1, 2004, by and between GILLESPIE FIELD PARTNERS, LLC, a California limited liability company ("Landlord") and SPARKS EXHIBITS, LTD., a California corporation ("Tenant"), with reference to the following facts: A. Landlord and Tenant are all of the parties to that certain Lease Agreement dated as of June 29, 1998 (the "Lease"), wherein Landlord leased to Tenant certain real property located at 2025 Gillespie Way, El Cajon, California, having located thereon a single industrial building (the "Building") containing approximately 150,159 square feet of space (the "Original Premises"). B. Subsequent to execution of the Lease, Tenant's business requirements have changed and Tenant has requested that Landlord assist Tenant in locating tenants to lease portions of the Original Premises. In accordance with Tenant's request, Landlord previously identified (i) G.T.M. Wholesale Liquidators Inc. ("GTM") as a prospective tenant to lease a portion of the Original Premises comprising approximately 40,694 square feet (the "GTM Premises") and Landlord and Tenant previously entered into that certain First Amendment to Lease Agreement and Agreement dated as of October 31, 2003 (the "First Amendment"), whereby Landlord and Tenant agreed to mutually cooperate and undertake to pay for and perform certain obligations with respect to the GTM Premises and that certain Second Amendment to, and Partial Termination of, Lease Agreement dated as of January 1, 2004 (the "Second Amendment"), whereby the Lease was partially terminated with respect to the portion of the Original Premises which is comprised of the GTM Premises; and (ii) Professional's Choice Sports Medicine Products, Inc. ("Professional's Choice") as a prospective tenant to lease a portion of the Original Premises comprising approximately 37,600 square feet (the "Professional's Choice Premises") and Landlord and Tenant previously entered into that certain Third Amendment to Lease Agreement and Agreement dated as of February 27, 2004 (the "Third Amendment"), whereby Landlord and Tenant agreed to mutually cooperate and undertake to pay for and perform certain obligations with respect to the Professional's Choice Premises. C. Landlord now desires to extend to Tenant an option to terminate the Lease with respect to the portion of the Original Premises which is comprised of approximately 25,000 square feet and is depicted in Exhibit A to this Fourth Amendment (the "Additional Premises"), subject to the payment by Tenant of the lump sum amount of $100,000 to Landlord (the "Additional Premises Termination Payment") and fulfillment of all terms and conditions set forth in this Fourth Amendment. NOW, THEREFORE, in consideration of the mutual covenants, agreements and undertakings contained in this Fourth Amendment and the exchange of other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. Definitions. Unless defined in this Fourth Amendment, or except as otherwise expressly provided in this Fourth Amendment, capitalized terms utilized in this Fourth Amendment shall have the meanings ascribed to such terms in the Lease. 2. Agreement to Partially Terminate the Lease. Landlord and Tenant hereby agree and acknowledge that subject to (i) payment by Tenant of the Additional Premises Termination Payment in good funds to Landlord, and (ii) Tenant's having terminated any tenancies, subtenancies or other occupancy agreements and/or arrangements with any tenant(s) and/or occupant(s) of the Additional Premises and all of such tenant(s) and/or occupant(s) having vacated the Additional Premises and delivered up possession of the Additional Premises to Tenant, Tenant shall be entitled to elect to terminate the Lease with respect only to the portion of the Original Premises which is comprised of the Additional Premises. If Tenant elects to partially terminate the Lease with respect to the Additional Premises, such election shall be communicated to Landlord in writing on or before May 1, 2004 and Landlord agrees that Tenant's right to elect to partially terminate the Lease with respect to the Additional Premises shall be irrevocable until the close of business on May 1, 2004, whereupon, if Tenant shall not have so elected to partially terminate the Lease with respect to the Additional Premises by said date, Tenant's right to so elect to partially terminate the Lease with respect to the Additional Premises shall expire automatically without further action of either Landlord or Tenant and Tenant shall have no further right to so elect to partially terminate the Lease thereafter. If Tenant shall so elect to terminate the Lease with respect to the Additional Premises on or before May 1, 2004, as aforesaid, Tenant shall fully comply with the requirements of this Section 2 on or before June 1, 2004. If Tenant so complies, the date of partial termination of the Lease with respect to the Additional Premises shall be the date upon which Tenant complies with the last of the requirements set forth in the first sentence of this Section 2 to be complied with by Tenant; provided, however that the requirement that Tenant pay the Additional Premises Termination Payment in good funds to Landlord will be deemed to have been met on the date Tenant tenders to Landlord its check in the full amount of the Additional Premises Termination Payment, provided that such check clears Tenant's bank when first deposited by Landlord; otherwise such requirement will not be deemed to have been met until the date upon which Landlord's account is credited by its bank with funds in the full amount of the Additional Premises Termination Payment which are subject to an immediate withdrawal right in favor of Landlord. If Tenant does not fully comply with the requirements of this Section 2 on or before said latter date, Tenant's right to elect to terminate the Lease with respect to the Additional Premises shall expire automatically and Tenant shall have no further right to so elect to partially terminate the Lease thereafter. Landlord and Tenant shall execute a mutually acceptable written instrument acknowledging partial termination of the Lease with respect to the Additional Premises in accordance with the provisions set forth above in this Section 2 and agreeing to such amendments and modifications of the Lease as are necessary and appropriate to modify Tenant's proportionate share of shared costs and expenses as provided in the Lease, and other matters, if any, as Landlord and Tenant shall mutually agree. 3. Amendment; Confirmation; Interpretation. To the extent, but only to the extent, necessary to give effect to the First Amendment, Second Amendment, Third Amendment and this Fourth Amendment, the Lease is deemed amended and modified. Except to the limited extent amended and modified hereby, the Lease is ratified and confirmed in all respects and remains extant and in full force and effect. 4. General Provisions. 4.1 Further Assurances. Each party hereto agrees to perform any further acts and execute and deliver any further documents that may be reasonably necessary to effectuate the provisions of this Fourth Amendment. 4.2 Counterparts; Fax Signatures. This Fourth Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile signatures shall have the same force and effect as original signatures. 4.3 Severability. If any provisions, or portions thereof, of this Fourth Amendment or the application thereof are held to be unenforceable or invalid by any court of competent jurisdiction, the remainder of this Fourth Amendment shall not be affected thereby and to this end only the provisions of this Fourth Amendment are declared severable. 4.4 Successors and Assigns. Subject to the provisions of Section 4.10 of this Fourth Amendment, all terms of this Fourth Amendment shall be binding on and shall inure to the benefit of and be enforceable by the parties hereto and their respective heirs, legal representatives, successors and assigns. 4.5 Governing Law; Venue. This Fourth Amendment shall be governed by, construed and enforced in accordance with the laws of the State of California and is to be performed in San Diego County, California and any action or other proceeding brought to enforce or interpret this Fourth Amendment shall be brought in San Diego County, California. 4.6 Waiver. No waiver of any of the provisions of this Fourth Amendment shall be deemed, or shall constitute, a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. No failure to enforce any right or provision hereunder shall preclude or affect the later enforcement of such right or provision. No waiver shall be binding unless executed by the party making the waiver. 4.7 Time. Time is of the essence with respect to the performance by each party of its rights and obligations hereunder. 4.8 Attorneys' Fees. In the event any attorney is employed by either party to this Fourth Amendment with regard to any legal action, arbitration or other proceeding brought by either party for the enforcement or interpretation of this Fourth Amendment, or because of any alleged dispute, breach, default, or misrepresentation involving any provisions of this Fourth Amendment, the party prevailing in any such proceeding shall be entitled to recover reasonable attorneys' fees and other costs and expenses incurred, in addition to any other relief to which it may be entitled. 4.9 No Joint Venture. The parties hereto are independent of one another and no joint venture, partnership or other collaborative venture is intended or implied by the provisions of this Fourth Amendment. 4.10 Assignment. Neither party may assign this Fourth Amendment nor any of its respective rights, liabilities and obligations under this Fourth Amendment without the prior written consent of the other party, which may be given or withheld in such party's sole and unreviewable discretion. 4.11 Entire Agreement. This Fourth Amendment, together with the First Amendment, Second Amendment, Third Amendment and the Lease, constitutes the entire agreement between the parties pertaining to the subject matter contained in this Fourth Amendment and supersedes all prior and contemporaneous agreements, representations and understandings of the parties with respect thereto. There are no representations, warranties, agreements or understandings, express or implied, written or oral between the parties hereto relating to the subject matter of this Fourth Amendment which are not fully expressed herein, in the First Amendment, Second Amendment, Third Amendment and/or the Lease. 4.12 Amendment. No supplement, amendment, modification, discharge or change of this Fourth Amendment shall be binding unless executed in writing by all of the parties. 4.13 Authority. If a party to this Fourth Amendment is a corporation or other entity which is not a natural person, each individual executing this Fourth Amendment on behalf of said corporation or other entity represents and warrants that he is duly authorized to execute and deliver this Fourth Amendment on behalf of said corporation or other entity in accordance with a duly adopted resolution of the board of directors of such corporation or the governing authority of such other entity or in accordance with the bylaws of such corporation or governing instrument(s) of such other entity, and that this Fourth Amendment is binding upon such corporation or other entity in accordance with its terms. IN WITNESS WHEREOF, the parties have executed this Fourth Amendment as of the date first set forth above. Landlord: Tenant: GILLESPIE FIELD PARTNERS, LLC SPARKS EXHIBITS, LTD., a California limited liability company a California corporation By: ____________________________ By: ________________________ [Signature] [Signature] ____________________________ ________________________ [Print Name and Title] [Print Name and Title] EX-10 5 fifthamend_leaseagt.txt EXHIBIT 10(D) - FIFTH AMENDMENT TO LEASE Exhibit 10(d) FIFTH AMENDMENT TO, AND PARTIAL TERMINATION OF, LEASE AGREEMENT THIS FIFTH AMENDMENT TO, AND PARTIAL TERMINATION OF, LEASE AGREEMENT (the "Fifth Amendment"), is entered into as of April 1, 2004, by and between GILLESPIE FIELD PARTNERS, LLC, a California limited liability company ("Landlord") and SPARKS EXHIBITS, LTD., a California corporation ("Tenant"), with reference to the following facts: A. Landlord and Tenant are all of the parties to that certain Lease Agreement dated as of June 29, 1998 (the "Lease"), wherein Landlord leased to Tenant certain real property located at 2025 Gillespie Way, El Cajon, California, having located thereon a single industrial building (the "Building") containing approximately 150,159 square feet of space (the "Original Premises"). B. Subsequent to execution of the Lease, Tenant's business requirements changed and Tenant requested that Landlord assist Tenant in locating tenants to lease portions of the Original Premises. In accordance with Tenant's request, Landlord previously identified (i) G.T.M. Wholesale Liquidators Inc. ("GTM") as a prospective tenant to lease a portion of the Original Premises comprising approximately 40,694 square feet (the "GTM Premises") and Landlord and Tenant previously entered into (A) that certain First Amendment to Lease Agreement and Agreement dated as of October 31, 2003 (the "First Amendment"), whereby Landlord and Tenant agreed to mutually cooperate and undertake to pay for and perform certain obligations with respect to the GTM Premises and (B) that certain Second Amendment to, and Partial Termination of, Lease Agreement dated as of January 1, 2004 (the "Second Amendment"), whereby Landlord and Tenant agreed to partially terminate the Lease with respect to the portion of the Original Premises comprised of the GTM Premises, and (ii) Professional's Choice Sports Medicine Products, Inc. ("Professional's Choice") as a prospective tenant to lease a portion of the Original Premises comprising approximately 37,600 square feet (the "Professional's Choice Premises") and Landlord and Tenant previously entered into that certain Third Amendment to Lease Agreement and Agreement dated as of February 27, 2004 (the "Third Amendment"), whereby Landlord and Tenant agreed to mutually cooperate and undertake to pay for and perform certain obligations with respect to the Professional's Choice Premises. C. In addition, Landlord and Tenant entered into that certain Fourth Amendment to, and Agreement to Partially Terminate Lease Agreement, dated as of March 1, 2004 (the "Fourth Amendment"), whereby Landlord agreed to grant Tenant an option to partially terminate the Lease further with respect to a portion of the Original Premises comprising approximately 25,000 square feet, subject to the performance of certain obligations and undertakings set forth in the Fourth Amendment. D. Upon the fulfillment and satisfaction of certain terms, provisions and conditions set forth in the Third Amendment, Landlord and Tenant agreed to mutually terminate the Lease with respect only to the portion of the Original Premises which is comprised of the Professional's Choice Premises. Subject to payment by Tenant of remaining amounts required by the Third Amendment, such terms, provisions and conditions set forth in the Third Amendment have been fulfilled and satisfied and, accordingly, Landlord and Tenant desire to memorialize the partial termination of the Lease with respect to the Professional's Choice Premises and to otherwise amend certain terms and provisions of the Lease affected by such partial termination. NOW, THEREFORE, in consideration of the mutual covenants, agreements and undertakings contained in this Fifth Amendment and the exchange of other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. Definitions. Unless defined in this Fifth Amendment, or except as otherwise expressly provided in this Fifth Amendment, capitalized terms utilized in this Fifth Amendment shall have the meanings ascribed to such terms in the Lease. 2. Mutual Partial Termination of the Lease; Effective Date. Pursuant to, and in accordance with, Section 4 of the Third Amendment ("Section 4"), Landlord and Tenant hereby agree and acknowledge that (i) subject to payment by Tenant of remaining amounts required by the Third Amendment as provided in the next sentence, all terms, provisions and conditions of Section 4 which were required to be fulfilled and satisfied in order for the Lease to be partially terminated have been fulfilled and satisfied, (ii) effective as of April 1, 2004 (the "Effective Date"), the Lease is partially terminated with respect only to the portion of the Original Premises which is comprised of the Professional's Choice Premises (the "Partial Termination"), (iii) this Fifth Amendment is intended by Landlord and Tenant to constitute the "mutually acceptable written instrument" referred to in Section 4 of the Third Amendment, which Section 4 contemplates is to be entered into by Landlord and Tenant partially terminating and amending the Lease and (iv) the Lease is amended and modified in accordance with the terms and provisions of this Fifth Amendment. Notwithstanding Landlord's agreement with Tenant to partially terminate the Lease as of the Effective Date, as aforesaid, Tenant shall remain obligated and liable for Tenant's obligation to pay to Landlord Tenant's Contribution (as defined in the Third Amendment), and if applicable, Tenant's share of certain attorneys' fees and costs of Landlord described and set forth in Section 6 of the Third Amendment, until Tenant shall have fully discharged and satisfied said obligations. 3. Specific Amendments to the Lease. Effective as of the Effective Date, the Lease is hereby amended only in the following specific respects: 3.1 Definition of Premises. The definition of the "Premises", for all purposes of the Lease, shall refer to, and be deemed to refer to, the Original Premises reduced by the portion of the Original Premises which comprises the GTM Premises and the Professional's Choice Premises, consisting of approximately 71,865 square feet, depicted in the amended Exhibit A attached to this Fifth Amendment, which Exhibit A amends, supersedes and replaces in its entirety, original Exhibit A to the Lease. 3.2 Parking. The requirement, in Section 1.1 of the Lease, that the Premises contain not less than 200 parking spaces is hereby amended to provide that the Premises shall contain not less than 96 parking spaces. 3.3 Base Monthly Rental. Base Monthly Rental, as provided in Section 3.1 of the Lease, shall be the sum of $34,495.05 per month, and, in accordance with Section 3.3 of the Lease, shall remain fixed throughout the balance of the initial term of the Lease as set forth in Section 2.1 of the Lease. 3.4 Share of Common Area Maintenance Expenses and Other Charges. The second sentence of Section 11.2 of the Lease shall be amended in its entirety, to provide: "Tenant shall pay to Landlord in the manner set forth in Section 11.3 of the Lease, Tenant's prorata share of expenses in connection with the maintenance of common areas, which shall be equal to that proportion which the gross floor area of the Premises bears to the gross floor area in the Building (i.e., 47.86%), plus any additional costs arising from special requirements created by Tenant's use of the Premises". 4. Amendment; Confirmation; Interpretation. To the extent, but only to the extent, necessary to give effect to the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment and this Fifth Amendment, the Lease is deemed amended and modified. Except to the limited extent amended and modified hereby, the Lease is ratified and confirmed in all respects and remains extant and in full force and effect. 5. General Provisions. 5.1 Further Assurances. Each party hereto agrees to perform any further acts and execute and deliver any further documents that may be reasonably necessary to effectuate the provisions of this Fifth Amendment. 5.2 Counterparts; Fax Signatures. This Fifth Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile signatures shall have the same force and effect as original signatures. 5.3 Severability. If any provisions, or portions thereof, of this Fifth Amendment or the application thereof are held to be unenforceable or invalid by any court of competent jurisdiction, the remainder of this Fifth Amendment shall not be affected thereby and to this end only the provisions of this Fifth Amendment are declared severable. 5.4 Successors and Assigns. Subject to the provisions of Section 5.10 of this Fifth Amendment, all terms of this Fifth Amendment shall be binding on and shall inure to the benefit of and be enforceable by the parties hereto and their respective heirs, legal representatives, successors and assigns. 5.5 Governing Law; Venue. This Fifth Amendment shall be governed by, construed and enforced in accordance with the laws of the State of California and is to be performed in San Diego County, California and any action or other proceeding brought to enforce or interpret this Fifth Amendment shall be brought in San Diego County, California. 5.6 Waiver. No waiver of any of the provisions of this Fifth Amendment shall be deemed, or shall constitute, a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. No failure to enforce any right or provision hereunder shall preclude or affect the later enforcement of such right or provision. No waiver shall be binding unless executed by the party making the waiver. 5.7 Time. Time is of the essence with respect to the performance by each party of its rights and obligations hereunder. 5.8 Attorneys' Fees. In the event any attorney is employed by either party to this Fifth Amendment with regard to any legal action, arbitration or other proceeding brought by either party for the enforcement or interpretation of this Fifth Amendment, or because of any alleged dispute, breach, default, or misrepresentation involving any provisions of this Fifth Amendment, the party prevailing in any such proceeding shall be entitled to recover reasonable attorneys' fees and other costs and expenses incurred, in addition to any other relief to which it may be entitled. 5.9 No Joint Venture. The parties hereto are independent of one another and no joint venture, partnership or other collaborative venture is intended or implied by the provisions of this Fifth Amendment. 5.10 Assignment. Neither party may assign this Fifth Amendment nor any of its respective rights, liabilities and obligations under this Fifth Amendment without the prior written consent of the other party, which may be given or withheld in such party's sole and unreviewable discretion. 5.11 Entire Agreement. This Fifth Amendment, together with the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment and the Lease, constitutes the entire agreement between the parties pertaining to the subject matter contained in this Fifth Amendment and supersedes all prior and contemporaneous agreements, representations and understandings of the parties with respect thereto. There are no representations, warranties, agreements or understandings, express or implied, written or oral between the parties hereto relating to the subject matter of this Fifth Amendment which are not fully expressed herein, in the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment and/or the Lease. 5.12 Amendment. No supplement, amendment, modification, discharge or change of this Fifth Amendment shall be binding unless executed in writing by all of the parties. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 5.13 Authority. If a party to this Fifth Amendment is a corporation or other entity which is not a natural person, each individual executing this Fifth Amendment on behalf of said corporation or other entity represents and warrants that he is duly authorized to execute and deliver this Fifth Amendment on behalf of said corporation or other entity in accordance with a duly adopted resolution of the board of directors of such corporation or the governing authority of such other entity or in accordance with the bylaws of such corporation or governing instrument(s) of such other entity, and that this Fifth Amendment is binding upon such corporation or other entity in accordance with its terms. IN WITNESS WHEREOF, the parties have executed this Fifth Amendment as of the date first set forth above. Landlord: Tenant: GILLESPIE FIELD PARTNERS, LLC SPARKS EXHIBITS, LTD., a California limited liability company a California corporation By: ____________________________ By: ________________________ [Signature] [Signature] ____________________________ ________________________ [Print Name and Title] [Print Name and Title] EX-10 6 amend_standard-sublease.txt EXHIBIT 10(E) - AMENDMENT TO STANDARD SUB LEASE Exhibit 10(e) AMENDMENT TO STANDARD SUBLEASE THIS AMENDMENT TO STANDARD SUBLEASE (the "Amendment"), is entered into as of March __, 2004, by and between BRADCO INTERNATIONAL, LTD., a California corporation ("Sublessee") and SPARKS EXHIBITS & ENVIRONMENTS, LTD., a California corporation ("Sublessor"), with reference to the following facts: A. Sublessor and Sublessee are all of the parties to that certain Sublessee Agreement dated as of March 22, 2002 (the "Sublease"), wherein Sublessor subleased to Sublessee approximately 25,000 square feet of real property ("Premises") located at 2025 Gillespie Way, El Cajon, California, having located thereon a single industrial building (the "Building") containing approximately 150,159 square feet of space . B. Subsequent to execution of the Sublease, Sublessee's business requirements changed and Sublessee requested that Sublessor assist Sublessee in terminating the Sublease. C. Sublessor and its landlord ("Landlord") have negotiated a Fourth Amendment to Lease ("Option"), in the form attached hereto as Exhibit A, granting Sublessor an option to terminate its Lease for the portion of the Building constituting the Premises. D. Sublessor and Sublessee desire to memorialize in writing the terms and conditions upon which Sublessor and Sublessee will mutually cooperate and undertake to exercise the Option and pay for the Option termination fee as provided in the Fourth Amendment. NOW, THEREFORE, in consideration of the mutual covenants, agreements and undertakings contained in this Amendment and the exchange of other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. Definitions. Unless defined in this Amendment, or except as otherwise expressly provided in this Amendment, capitalized terms utilized in this Amendment shall have the meanings ascribed to such terms in the Sublease, or the Option, as applicable. 2. Acknowledgement. Sublessee hereby acknowledges receipt of the Option. 3. Sublessee's Contribution; Undertakings Regarding Option. The Option requires that Sublessor pay Landlord the sum of $100,000 ("Payment"), in accordance with the terms and conditions of the Option. Sublessee hereby directs Sublessor to exercise the Option and Sublessee agrees to pay the sum of $100,000 to Sublessor in a timely manner to allow Sublessor to make the Payment to the Landlord. Sublessee agrees to physically vacate the Premises no later than April 30, 2004 and to leave the Premises in broom clean condition and as otherwise required by the Sublease. 4. Agreement to Terminate Sublease; Effectiveness. Sublessor agrees with Sublessee that, (i) upon payment in full by Sublessee of the sum of $100,000 in accordance with the provisions of Section 3 of this Amendment, (ii) actual vacancy of the Premises by Sublessee no later than April 30, 2004, (iii) compliance, in full, with all other terms and conditions set forth in this Amendment, and (iv) fulfillment by Sublessor and Landlord of all of the terms and conditions of the Option, (as to which Sublessor agrees to use its best efforts (A) to fulfill Sublessor's obligations, and (B) to cause Landlord to fulfill Landlord's obligations) the Sublessee shall, with no further action of the parties, be terminated effective April 30, 2004. Sublessor and Sublessee shall execute a written instrument in the form of Exhibit B, acknowledging termination of the Sublease in accordance with the provisions set forth above in this Section 4. Notwithstanding such termination, Sublessee shall remain liable for payment of all rent and performance of all other obligations under the Sublease for the period through April 30, 2004. 5. Amendment; Confirmation; Interpretation. To the extent, but only to the extent, necessary to give effect to this Amendment, the Sublessee is deemed amended and modified. Except to the limited extent amended and modified hereby, the Sublease is ratified and confirmed in all respects and remains extant and in full force and effect. 6. No Agency. Sublessor and Sublessee hereby acknowledge and agree that there is no agency relationship between Sublessor and Sublessee, either created by this Amendment or otherwise. 7. Indemnification. 7.1 By Sublessee. Sublessee hereby agrees to indemnify and hold Sublessor, and the property and assets of Sublessor, harmless, from and against any and all liabilities, damages, losses, costs, expenses, attorneys' fees and claims arising out of, resulting from or related to any breach or default by Sublessee in the payment or performance of any of Sublessee's agreements, promises, undertakings, obligations, responsibilities and/or liabilities under and by reason of this Amendment, including specifically but not by way of limitation, Sublessee's failure to vacate the Premises or to make the Payment and/or otherwise to affect adversely Sublessor's efforts to perform its responsibilities and obligations respecting the Option. 7.2 By Sublessor. Sublessor hereby agrees to indemnify and hold Sublessee, and the property and assets of Sublessee, harmless, from and against any and all liabilities, damages, losses, costs, expenses, attorneys' fees and claims arising out of, resulting from or related to any breach or default by Sublessor in the payment or performance of Sublessor's agreements, promises, undertakings, obligations, responsibilities and/or liabilities under and by reason of this Amendment. 8. General Provisions. 8.1 Further Assurances. Each party hereto agrees to perform any further acts and execute and deliver any further documents that may be reasonably necessary to effectuate the provisions of this Amendment. 8.2 Counterparts; Fax Signatures. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile signatures shall have the same force and effect as original signatures. 8.3 Severability. If any provisions, or portions thereof, of this Amendment or the application thereof are held to be unenforceable or invalid by any court of competent jurisdiction, the remainder of this Amendment shall not be affected thereby and to this end only the provisions of this Amendment are declared severable. 8.4 Successors and Assigns. Subject to the provisions of Section 8.10 of this Amendment, all terms of this Amendment shall be binding on and shall inure to the benefit of and be enforceable by the parties hereto and their respective heirs, legal representatives, successors and assigns. 8.5 Governing Law; Venue. This Amendment shall be governed by, construed and enforced in accordance with the laws of the State of California and is to be performed in San Diego County, California and any action or other proceeding brought to enforce or interpret this Amendment shall be brought in San Diego County, California. 8.6 Waiver. No waiver of any of the provisions of this Amendment shall be deemed, or shall constitute, a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waive. No failure to enforce any right or provision hereunder shall preclude or affect the later enforcement of such right or provision. No waiver shall be binding unless executed by the party making the waiver. 8.7 Time. Time is of the essence with respect to the performance by each party of its rights and obligations hereunder. 8.8 Attorneys' Fees. In the event any attorney is employed by either party to this Amendment with regard to any legal action, arbitration or other proceeding brought by either party for the enforcement or interpretation of this Amendment, or because of any alleged dispute, breach, default, or misrepresentation involving any provisions of this Amendment, the party prevailing in any such proceeding shall be entitled to recover reasonable attorneys' fees and other costs and expenses incurred, in addition to any other relief to which it may be entitled. 8.9 No Joint Venture. The parties hereto are independent of one another and no joint venture, partnership or other collaborative venture is intended or implied by the provisions of this Amendment. 8.10 Assignment. Neither party may assign this Amendment nor any of its respective rights, liabilities and obligations under this Amendment without the prior written consent of the other party, which may be given or withheld in such party's sole and unreviewable discretion. 8.11 Entire Agreement. This Amendment, together with the Sublease as amended, constitutes the entire agreement between the parties pertaining to the subject matter contained in this Amendment and supersedes all prior and contemporaneous agreements, representations and understandings of the parties with respect thereto. There are no representations, warranties, agreements or understandings, express or implied, written or oral between the parties hereto relating to the subject matter of this Amendment which are not fully expressed herein and/or in the Sublease. 8.12 Amendment. No supplement, amendment, modification, discharge or change of this Amendment shall be binding unless executed in writing by all of the parties. 8.13 Authority. If a party to this Amendment is a corporation or other entity which is not a natural person, each individual executing this Amendment on behalf of said corporation or other entity represents and warrants that he is duly authorized to execute and deliver this Amendment on behalf of said corporation or other entity in accordance with a duly adopted resolution of the board of directors of such corporation or the governing authority of such other entity or in accordance with the bylaws of such corporation or governing instrument(s) of such other entity, and that this Amendment is binding upon such corporation or other entity in accordance with its terms. IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first set forth above. Sublessee: Sublessor: BRADCO INTERNATIONAL, LTD SPARKS EXHIBITS & ENVIRONMENTS, LTD. a California corporation a California corporation By: ____________________________ By:________________________________ [Signature] [Signature] ____________________________ ________________________________ [Print Name and Title] [Print Name and Title] EXHIBIT A OPTION EXHIBIT B SECOND AMENDMENT AND TERMINATIN OF SUBLEASE THIS SECOND AMENDMENT TO STANDARD SUBLEASE (the "Amendment"), is entered into as of _________, 2004, by and between BRADCO INTERNATIONAL, LTD., a California corporation ("Sublessee") and SPARKS EXHIBITS & ENVIRONMENTS, LTD., a California corporation ("Sublessor"), with reference to the following facts: A. Sublessor and Sublessee are all of the parties to that certain Sublessee Agreement dated as of March 22, 2002 (the "Sublease"), wherein Sublessor subleased to Sublessee approximately 25,000 square feet of real property ("Premises") located at 2025 Gillespie Way, El Cajon, California, having located thereon a single industrial building (the "Building") containing approximately 150,159 square feet of space . B. Sublessee and Sublessor have previously entered into that certain Amendment to Standard Sublease dated as of March __, 2004 (the "First Amendment"), whereby Landlord and Tenant have agreed to mutually cooperate and undertake to perform certain obligations with respect to the Premises. NOW, THEREFORE, in consideration of the mutual covenants, agreements and undertakings contained in this Second Amendment and the exchange of other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. Mutual Partial Termination of the Lease; Effective Date. Pursuant to, and in accordance with, Section 4 of the First Amendment ("Section 4"), Landlord and Tenant hereby agree and acknowledge that effective as of _______, 2004 (the "Effective Date"), the Sublease is terminated. Notwithstanding termination of the Sublease as of the Effective Date, the last sentence of Section 4 of the First Amendment shall remain in full force and affect. 2. General Provisions. 2.1 Further Assurances. Each party hereto agrees to perform any further acts and execute and deliver any further documents that may be reasonably necessary to effectuate the provisions of this Second Amendment. 2.2 Counterparts; Fax Signatures. This Second Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile signatures shall have the same force and effect as original signatures. 2.3 Severability. If any provisions, or portions thereof, of this Second Amendment or the application thereof are held to be unenforceable or invalid by any court of competent jurisdiction, the remainder of this Second Amendment shall not be affected thereby and to this end only the provisions of this Second Amendment are declared severable. 2.4 Successors and Assigns. Subject to the provisions of Section 5.10 of this Second Amendment, all terms of this Second Amendment shall be binding on and shall inure to the benefit of and be enforceable by the parties hereto and their respective heirs, legal representatives, successors and assigns. 2.5 Governing Law; Venue. This Second Amendment shall be governed by, construed and enforced in accordance with the laws of the State of California and is to be performed in San Diego County, California and any action or other proceeding brought to enforce or interpret this Second Amendment shall be brought in San Diego County, California. 2.6 Waiver. No waiver of any of the provisions of this Second Amendment shall be deemed, or shall constitute, a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. No failure to enforce any right or provision hereunder shall preclude or affect the later enforcement of such right or provision. No waiver shall be binding unless executed by the party making the waiver. 2.7 Time. Time is of the essence with respect to the performance by each party of its rights and obligations hereunder. 2.8 Attorneys' Fees. In the event any attorney is employed by either party to this Second Amendment with regard to any legal action, arbitration or other proceeding brought by either party for the enforcement or interpretation of this Second Amendment, or because of any alleged dispute, breach, default, or misrepresentation involving any provisions of this Second Amendment, the party prevailing in any such proceeding shall be entitled to recover reasonable attorneys' fees and other costs and expenses incurred, in addition to any other relief to which it may be entitled. 2.9 No Joint Venture. The parties hereto are independent of one another and no joint venture, partnership or other collaborative venture is intended or implied by the provisions of this Second Amendment. 2.10 Assignment. Neither party may assign this Second Amendment nor any of its respective rights, liabilities and obligations under this Second Amendment without the prior written consent of the other party, which may be given or withheld in such party's sole and unreviewable discretion. 2.11 Entire Agreement. This Second Amendment, together with the First Amendment and the Sublease, constitutes the entire agreement between the parties pertaining to the subject matter contained in this Second Amendment and supersedes all prior and contemporaneous agreements, representations and understandings of the parties with respect thereto. There are no representations, warranties, agreements or understandings, express or implied, written or oral between the parties hereto relating to the subject matter of this Second Amendment which are not fully expressed herein, in the First Amendment and/or the Lease. 2.12 Amendment. No supplement, amendment, modification, discharge or change of this Second Amendment shall be binding unless executed in writing by all of the parties. 2.13 Authority. If a party to this Second Amendment is a corporation or other entity which is not a natural person, each individual executing this Second Amendment on behalf of said corporation or other entity represents and warrants that he is duly authorized to execute and deliver this Second Amendment on behalf of said corporation or other entity in accordance with a duly adopted resolution of the board of directors of such corporation or the governing authority of such other entity or in accordance with the bylaws of such corporation or governing instrument(s) of such other entity, and that this Second Amendment is binding upon such corporation or other entity in accordance with its terms. IN WITNESS WHEREOF, the parties have executed this Second Amendment as of the date first set forth above. Landlord: Tenant: BRADCO INTERNATIONAL, LTD. SPARKS EXHIBITS & ENVIRONMENTS, LTD., a California corporation a California corporation By:____________________________ By: ________________________ [Signature] [Signature] ____________________________ ________________________ [Print Name and Title] [Print Name and Title] EX-10 7 firstamend_loanagt.txt EXHIBIT 10(F) - FIRST AMENDMENT TO LOAN AGT. Exhibit 10(f) FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT, dated as of April ___, 2004 (this "Amendment"), is made by and among GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation ("Lender"), SPARKS EXHIBITS & ENVIRONMENTS CORP., a Pennsylvania corporation ("Leading Borrower"), SPARKS EXHIBITS & ENVIRONMENTS, LTD., a California corporation ("Second Borrower"), SPARKS EXHIBITS & ENVIRONMENTS, INC., a Georgia corporation ("Third Borrower"), and DMS STORE FIXTURES LLC, a Pennsylvania limited liability company ("Fourth Borrower"; Leading Borrower, Second Borrower, Third Borrower and Fourth Borrower, being collectively referred to herein as "Borrowers" and each a "Borrower"). WITNESSETH : WHEREAS, Borrowers and Lender are parties to that certain Loan and Security Agreement, dated as of February 6, 2004 (as amended, supplemented or otherwise modified from time to time, the "Loan Agreement"; capitalized terms used but not otherwise defined herein shall have the meanings ascribed thereto in the Loan Agreement); and WHEREAS, Borrowers have requested that Lender amend the Loan Agreement, as more fully set forth herein, and Lender is willing to do so subject to the terms and conditions set forth herein; NOW, THEREFORE, in consideration of the premises, the covenants and agreements contained herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties, intending to be legally bound, do hereby agree as follows: STATEMENT OF TERMS 1. Amendment to Schedule A. Schedule A is hereby amended as follows: (a) The following defined term is hereby added: "Designated Account Debtor" shall mean each of the Account Debtors listed in Schedule H attached hereto. (b) Subparagraph (m) of the definition of "Eligible Accounts" is hereby amended and restated in its entirety as follows: (m) that is not paid within 60 days from its due date or 120 days from its invoice date, except for the Designated Account Debtors, with respect to which any Account that is not paid within the number of days from its due date or its invoice date set forth opposite the name of each Designated Account Debtor in Schedule H attached hereto, or that are Accounts of an Account Debtor if 50% or more of the Accounts owing from such Account Debtor remain unpaid within such time periods. (c) The definition of "Special Reserve" is hereby amended by deleting the term "$100,000" contained therein and inserting in place thereof the term "$125,000". 2. Elimination of Accrued Volume Rebate Reserve. The accrued volume rebate reserve presently in place is hereby eliminated. 3. Representations and Warranties. To induce Lender to enter into this Amendment, each Borrower hereby warrants and represents to Lender as follows: (a) each representation and warranty of such Borrower set forth in the Loan Agreement is hereby restated and reaffirmed as true and correct on and as of the date hereof after giving affect to this Amendment as if such representation or warranty were made on and as of the date hereof (except to the extent that any such representation or warranty expressly relates to a prior specific date or period in which case it is true and correct as of such prior date or period); (b) no Default or Event of Default has occurred and is continuing as of this date under the Loan Agreement after giving effect to this Amendment; (c) such Borrower has the power and is duly authorized to enter into, deliver and perform its obligations under this Amendment and to perform its obligations under the Loan Agreement, as amended hereby; and (d) this Amendment and the Loan Agreement, as amended hereby, constitutes a legal, valid and binding obligation of such Borrower and is enforceable against such Borrower in accordance with its terms. 4. Conditions Precedent to Effectiveness of this Amendment. The effectiveness of this Amendment is subject to the fulfillment of the following conditions precedent: (a) Lender shall have received one or more counterparts of this Amendment duly executed and delivered by each Borrower; (b) Each Guarantor shall have consented to the execution, delivery and performance of this Amendment and all of the transactions contemplated hereby by signing one or more counterparts of this Amendment in the appropriate space indicated below and returning the same to Lender; and (c) Lender shall have received an amendment fee in the amount of $2,500. 5. Continuing Effect of Loan Agreement. Except as expressly modified hereby, the provisions of the Loan Agreement, and the Liens granted thereunder, are and shall remain in full force and effect, and are hereby ratified and continued including, without limitation, the provisions regarding confession of judgment. 6. Counterparts. This Amendment may be executed in multiple counterparts each of which shall be deemed to be an original and all of which when taken together shall constitute one and the same instrument. Any signature delivered by a party via facsimile shall be deemed to be an original signature hereto. 7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the day and year first set forth above. SPARKS EXHIBITS & ENVIRONMENTS CORP. By: ___________________________ Name: Robert B. Ginsburg Title:Chief Financial Officer SPARKS EXHIBITS & ENVIRONMENTS, LTD. By: ____________________________ Name: Robert B. Ginsburg Title:Chief Financial Officer SPARKS EXHIBITS & ENVIRONMENTS, INC. By: ___________________________ Name: Robert B. Ginsburg Title:Chief Financial Officer DMS STORE FIXTURES LLC By: ___________________________ Name: Robert B. Ginsburg Title:Chief Financial Officer GENERAL ELECTRIC CAPITAL CORPORATION By:_______________________________ Name: Jeffrey Zinn Title: Duly Authorized Signatory Each of the undersigned Guarantors, intending to be legally bound, does hereby consent to the execution, delivery and performance of the within and foregoing Amendment, and confirms and reaffirms, without setoff, counterclaim, deduction or other claim of avoidance of any nature, the continuing effect of such Guarantor's guarantee of the Obligations after giving effect to the foregoing Amendment. ACKNOWLEDGED and AGREED to as of the date first set forth above: SPARKS EXHIBITS & ENVIRONMENTS CORP. By: _______________________ Name: Robert B. Ginsburg Title: Chief Financial Officer SPARKS EXHIBITS & ENVIRONMENTS, LTD. By: ____________________________ Name: Robert B. Ginsburg Title:Chief Financial Officer SPARKS EXHIBITS & ENVIRONMENTS, INC. By: ___________________________ Name: Robert B. Ginsburg Title: Chief Financial Officer DMS STORE FIXTURES LLC By: ___________________________ Name: Robert B. Ginsburg Title:Chief Financial Officer MARLTON TECHNOLOGIES, INC. By: _________________________ Name: Robert B. Ginsburg Title: Chief Executive Officer SPARKS EXHIBITS HOLDING CORPORATION By: _____________________________ Name: Robert B. Ginsburg Title: Chief Financial Officer SPARKS EXHIBITS & ENVIRONMENTS INCORPORATED By: ______________________________ Name: Robert B. Ginsburg Title:Chief Financial Officer SPARKS EXHIBITS & ENVIRONMENTS COMPANY By: ______________________________ Name: Robert B. Ginsburg Title: Chief Financial Officer SCHEDULE H Designated Account Debtor Payment Terms
Designated Account Debtor Days from Due Date Days from Invoice Date - ---------------------------------------- ------------------------------- ----------------------------------- Leading Borrower: - ---------------------------------------- ------------------------------- ----------------------------------- Adidas 90 150 - ---------------------------------------- ------------------------------- ----------------------------------- Astra Zeneca 75 120 - ---------------------------------------- ------------------------------- ----------------------------------- Boston Scientific 105 150 - ---------------------------------------- ------------------------------- ----------------------------------- Ciena 90 150 - ---------------------------------------- ------------------------------- ----------------------------------- DuPont 90 150 - ---------------------------------------- ------------------------------- ----------------------------------- GE Water Tech 75 150 - ---------------------------------------- ------------------------------- ----------------------------------- Hewlett Packard 75 120 - ---------------------------------------- ------------------------------- ----------------------------------- McKesson 90 150 - ---------------------------------------- ------------------------------- ----------------------------------- Motorola 90 150 - ---------------------------------------- ------------------------------- ----------------------------------- Okidata 90 150 - ---------------------------------------- ------------------------------- ----------------------------------- Telecordia 75 120 - ---------------------------------------- ------------------------------- ----------------------------------- Eastman 75 120 - ---------------------------------------- ------------------------------- ----------------------------------- Philips 90 150 - ---------------------------------------- ------------------------------- ----------------------------------- JDS 75 120 - ---------------------------------------- ------------------------------- ----------------------------------- Philips Semiconductors 90 150 - ---------------------------------------- ------------------------------- ----------------------------------- Toshiba 105 150 - ---------------------------------------- ------------------------------- ----------------------------------- Fourth Borrower: - ---------------------------------------- ------------------------------- ----------------------------------- Abercrombie & Fitch 90 150 - ---------------------------------------- ------------------------------- ----------------------------------- Jos. A. Banks 90 150 - ---------------------------------------- ------------------------------- -----------------------------------
EX-31 8 certification_ceo.txt EXHIBIT 31(A) CERTIFICATION CEO Exhibit 31(a) CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 (1) I, Robert B. Ginsburg, certify that I have reviewed this quarterly report on Form 10-Q for Marlton Technologies, Inc.; (2) Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; (3) Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; (4) The registrants' other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: (a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and (c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; (5) The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): (a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and (6) The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. May 13, 2004 /s/ Robert B. Ginsburg ------------------ Robert B. Ginsburg Chief Executive Officer EX-31 9 certification_cfo.txt EXHIBIT 31 (B) - CERTIFICATION CFO Exhibit 31(b) CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 (1) I, Stephen P. Rolf, certify that I have reviewed this quarterly report on Form 10-Q for Marlton Technologies, Inc.; (2) Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; (3) Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; (4) The registrants' other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: (a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and (c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; (5) The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): (a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and (6) The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. May 13, 2004 /s/ Stephen P. Rolf --------------- Stephen P. Rolf Chief Financial Officer EX-32 10 certification1350.txt EXHIBIT 32 - SECTION 1350 CERTIFICATION Exhibit 32 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Marlton Technologies, Inc. (the "Company") on Form 10-Q for the period ending March 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Robert B. Ginsburg, Chief Executive Officer of the Company, and Stephen P. Rolf, Chief Financial Officer of the Company, each certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, based on their knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ Robert B. Ginsburg /s/ Stephen P. Rolf ------------------ --------------- Robert B. Ginsburg Stephen P. Rolf Chief Executive Officer Chief Financial Officer May 13, 2004 May 13, 2004 -----END PRIVACY-ENHANCED MESSAGE-----