-----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, CP4DJv+geoIcqyDok8ytllyWnic9plQKdJ8uIv+Zk5z1gE7YCiu4yKQ5hsqkLw6z rm1p3cAzbAjjDM5coCrjBw== 0001046211-04-000051.txt : 20040805 0001046211-04-000051.hdr.sgml : 20040805 20040805164431 ACCESSION NUMBER: 0001046211-04-000051 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20040630 FILED AS OF DATE: 20040805 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: 04955208 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_june30-2004.txt FORM 10-Q FOR MARLTON TECHNOLOGIES, INC. UNITED STATES 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 June 30, 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)
June 30, December 31, ASSETS 2004 2003 --------- ----------- Current: Cash and cash equivalents $ 486 $ 241 Accounts receivable, net of allowance of $576 and $415, respectively 15,012 7,824 Inventories 6,572 6,272 Prepaid and other current assets 1,112 1,191 ------ ------ Total current assets 23,182 15,528 Property and equipment, net of accumulated depreciation of $10,787 and $10,106, respectively 2,753 3,240 Rental assets, net of accumulated depreciation of $4,014 and $3,672, respectively 2,724 2,789 Goodwill 2,714 2,714 Other assets, net of accumulated amortization of $1,709 and $1,603, respectively 328 388 Notes receivable 119 159 ------ ------ Total assets $ 31,820 $ 24,818 ====== ====== LIABILITIES AND STOCKHOLDERS EQUITY Current liabilities: Current portion of long-term debt $ 89 $ 89 Accounts payable 7,675 6,363 Accrued expenses and other current liabilities 5,761 6,080 ------ ------ Total current liabilities 13,525 12,532 ------ ------ Long-term liabilities: Long-term debt, net of current portion 9,743 5,146 ------ ------ Total long-term liabilities 9,743 5,146 ------ ------ Total liabilities 23,268 17,678 ------ ------ 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 June 30, 2004 and December 31, 2003 -- -- Stock warrants 742 742 Additional paid-in capital 32,951 32,951 Accumulated deficit (24,993) (26,405) ------ ------ 8,700 7,288 Less cost of 148,803 treasury shares (148) (148) ------ ------ Total stockholders equity 8,552 7,140 ------ ------ Total liabilities and stockholders equity $ 31,820 $ 24,818 ====== ======
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 For the six months ended June 30, 2004 June 30, 2003 June 30, 2004 June 30, 2003 ------------- ------------- ------------- ------------- Sales $ 20,556 $ 19,864 $ 39,105 $ 37,321 Cost of sales 16,301 15,257 30,112 28,311 ------ ------ ------ ------ Gross profit 4,255 4,607 8,993 9,010 Selling 1,938 2,236 4,155 4,536 Administrative and general 1,676 2,016 3,201 3,661 ----- ----- ----- ----- Operating profit 641 355 1,637 813 Other income (expense): Interest income and other income - 5 - 9 Interest expense (134) (65) (225) (111) ----- ----- ----- ----- Income before income taxes 507 295 1,412 711 Provision for income taxes - - - - ----- ----- ----- ----- Net income 507 295 1,412 711 ===== ===== ===== ===== Net income per common share: Basic $ 0.04 $ 0.02 $ 0.11 $ 0.06 ===== ===== ===== ===== Diluted $ 0.04 $ 0.02 $ 0.10 $ 0.06 ===== ===== ===== =====
The accompanying notes and the notes in 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 six months ended June 30, 2004 2003 ---- ---- Cash flows from operating activities: Net income $ 1,412 $ 711 Adjustments to reconcile net income to cash provided by (used in) operating activities: Depreciation and amortization 1,129 1,040 Change in assets and liabilities: Increase in accounts receivable, net (7,188) (2,566) (Increase) decrease in inventories (300) 477 (Increase) decrease in prepaid and other current assets 79 (343) Increase in accounts payable, accrued expenses and other current liabilities 993 902 ----- ----- Net cash provided by (used in) operating activities (3,875) 221 ----- ----- Cash flows from investing activities: Capital expenditures (472) (465) Proceeds from note receivable 40 89 Proceeds from affiliate 88 - ----- ----- Net cash used in investing activities (344) (376) ----- ----- Cash flows from financing activities: Proceeds from revolving credit facility, net 4,582 500 Payments for acquisition obligation (22) - Payments for leasehold improvement obligation (22) - Proceeds from capital lease obligation 59 - Payments for loan origination fees (133) - Payments for promissory note - (93) ----- ----- Net cash provided by financing activities 4,464 407 ----- ----- Increase in cash and cash equivalents 245 252 Cash and cash equivalents - beginning of period 241 880 ----- ----- Cash and cash equivalents - end of period $ 486 $ 1,132 ===== =====
The accompanying notes and the notes in 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 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 and sixth month periods 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. 2. MAJOR CUSTOMERS AND CONCENTRATIONS: During the first six months of 2004, no customer accounted for over 10% of the Company's total sales. During the first six months of 2003, one customer accounted for 15.6% of the Company's total sales. Two customers accounted for 31% of total accounts receivable at June 30, 2004. 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 Six months ended ------------------ ----------------- June 30, June 30, June 30, June 30, -------- -------- -------- -------- 2004 2003 2004 2003 ---- ---- ---- ---- Net income $507 $ 295 $ 1,412 $ 711 ==== ==== ===== ===== Weighted average common shares outstanding used to compute basic net income per common share 12,845 12,846 12,845 12,846 Additional common shares to be issued assuming the exercise of stock options, net of shares assumed reacquired 1,363 -- 1,363 -- ----- ------ ------ ------ Total shares used to compute diluted net income per common share 14,208 12,846 14,208 12,846 ====== ====== ====== ====== Basic net income per share $.04 $.02 $.11 $.06 ====== ====== ====== ====== Diluted net income per share $.04 $.02 $.10 $.06
5 Excluded in the computation of diluted income per common share were outstanding options and warrants to purchase 233,336 shares of common stock at June 30, 2004 and 7,373,512 shares of common stock at June 30, 2003 because the option and warrant exercise prices were greater than the market price of the common shares. 4. INVENTORIES: Inventories, as of the respective dates, consist of the following (in thousands): June 30, 2004 December 31, 2003 ------------- ----------------- Raw materials $467 $ 467 Work in process 3,353 3,579 Finished goods 2,752 2,226 $6,572 $6,272 5 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 and in the second quarter of 2004. 6. STOCK-BASED COMPENSATION The Company accounts for grants of stock options under its stock option plans based on the recognition and measurement principles of APB Opinion No. 25 and related Interpretations. The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of FASB Statement No. 123 to stock-based employee compensation (in thousands except per share data):
For the three months ended For the six months ended June 30, 2004 June 30, 2003 June 30, 2004 June 30, 2003 ------------- ------------- ------------- ------------- Net Income, as reported $ 507 $ 295 $1,412 $711 Deduct: Total stock-based employee compensation expense determined under fair value based method, net of tax (21) (15) (35) (29) Pro forma net income $ 486 $ 280 $1,377 $682 Earnings per share: Basic: As Reported $0.04 $0.02 $ 0.11 $0.06 Pro forma $0.04 $0.02 $ 0.11 $0.05 Diluted: As Reported $0.04 $0.02 $ 0.10 $0.06 Pro forma $0.03 $0.02 $ 0.10 $0.05
The fair value of each option grant is estimated on the date of the grant using the Black-Scholesl option pricing model. 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS For the three and six month periods ended June 30, 2004 and 2003.
Sales - ----- Three Months Ended (In thousands) June 30, 2004 June 30, 2003 % Inc. ( Dec.) ------------- ------------- ------------- Trade show exhibits group $13,492 $11,683 15.5% Permanent and scenic displays group 7,064 8,181 (13.7) ------ ------ ---- Total sales $20,556 $19,864 3.5% ====== ====== ==== Six Months Ended (In thousands) June 30, 2004 June 30, 2003 % Increase ------------- ------------- ----------- Trade show exhibits group $26,701 $25,701 3.9% Permanent and scenic displays group 12,404 11,620 6.7 ------ ------ --- Total sales $39,105 $37,321 4.8% ====== ====== ===
Total net sales of $20.6 million for the second quarter of 2004 increased 3.5% from the second quarter of 2003, and total net sales $39.1 million for the first six months of 2004 increased 4.8% from the same prior year period. The second quarter increase was principally attributable to higher sales of trade show exhibits and related services, which increased 15.5% from comparable sales for the second quarter of 2003. New customers and higher sales to several existing customers contributed to the second quarter trade show exhibits sales increase. Sales of permanent and scenic displays decreased 13.7% in the second quarter of 2004 from the same 2003 period primarily due to lower sales of permanent museum displays. The sales increase for the first six months of 2004 was comprised of a 3.9% increase in sales of trade show exhibits and related services and a 6.7% increase in sales of permanent and scenic displays. The increase for trade show exhibits was largely the result of the same factors discussed for the second quarter and the increase for permanent and scenic displays was primarily due to higher sales of store fixtures to new customers. Gross Profit Gross profit, as a percentage of net sales, decreased to 20.7% in the second quarter of 2004 and to 23% for the first six months of 2004 from 23.2% and 24.1% in the respective prior year periods. These decreases were due, in large part, to additional lease expense of $0.2 million accrued in the second quarter of 2004 in connection with the Company's consolidation of its West Coast operations initiated during the second half of 2003. The lease obligation for the remaining portion of the Company's vacated San Diego area facility was terminated on June 30, 2004. The additional expense recorded in the second quarter of 2004 reflected costs associated with this lease termination. Selling Expenses Selling expenses decreased $0.3 million in the second quarter of 2004 and $0.4 million for the first half of 2004 from the corresponding prior year periods. As 7 a percentage of net sales, these expenses decreased to 9.4% and 10.6% in the second quarter and first half periods of 2004, respectively, from 11.3% and 12.2% for the same 2003 periods. These decreases were largely the result of cost reduction initiatives implemented during the second half of 2003, which were realized during 2004. Administrative and General Expenses Administrative and general expenses were reduced $0.3 million in the second quarter of 2004 and $0.5 million in the first half of 2004 from the expense levels for the comparable periods of 2003. These reductions were principally attributable to cost reduction initiatives implemented for the Company's trade show exhibit businesses. Operating Profit Operating profit increased to $0.6 million and $1.6 million for the second quarter and first half of 2004, respectively, from $0.4 million and $0.8 million for the respective prior year periods. These improvements were principally attributable to cost reduction initiatives. Other Income/(Expense) Interest expense increased to $134,000 in the second quarter of 2004 from $65,000 in the same 2003 period and to $225,000 for the first six months of 2004 from $111,000 for the first half of 2003. These increases were primarily due to higher borrowing from the Company's revolving credit facility largely as a result of financing higher accounts receivable and to higher interest rates on the Company's new credit facility discussed below. 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 2004 or 2003. Net Income The Company generated net income of $0.5 million ($.04 per fully diluted share) in the second quarter and $1.4 million ($.10 per fully diluted share) in the first half of 2004 as compared with $0.3 million ($.02 per fully diluted share) and $0.7 million ($.06 per fully diluted share) for the comparable 2003 periods. These improvements were principally attributable to higher sales volume and cost reduction initiatives. Backlog The Company's backlog of orders was approximately $18 million at June 30, 2004 and June 30, 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 8 5.5% at June 30, 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 $11.6 million at June 30, 2004. Proceeds from this credit facility are used primarily for working capital and other capital purposes. The Company's working capital increased to $9.7 million at June 30, 2004 from $3 million at December 31, 2003, largely due to a $7.2 million increase in accounts receivable. The increase in accounts receivable was principally attributable to higher sales near the end of the second quarter of 2004 as compared with sales in the fourth quarter of 2003 as well as slower payment schedules from several of the Company's Fortune 1000 clients. The increase in accounts receivable also led to a portion of the increase in long-term debt to $9.7 million at June 30, 2004 from $5.1 million at December 31, 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 2005 to 2008 to After Contractual Obligations Total Year -2004 2007 2010 2010 ----------------------- ----- ---------- ------- -------- ----- Long-Term Debt Obligations $ 9,773 $ 76 $9,697 $-- $-- Capital Lease Obligations 59 13 46 -- -- Operating Lease Obligations 6,605 993 4,480 1,133 Purchase Obligations -- -- -- -- -- Other Long-Term Liabilities Reflected on the Registrant's Balance Sheet Under GAAP -- -- -- -- -- ------ ----- ------ ----- ----- Total $16,437 $1,082 $14,223 $1,133 $ -- ====== ===== ====== ===== =====
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 (not 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 sales volume in 2004 to approximate the 2003 sales level. The Company's trade show exhibit and retail chain client base of Fortune 1000 companies is expected to continue to closely manage their marketing and capital budgets, which would inhibit the Company's sales and margin growth. The Company continues to explore new sales opportunities while pursuing operating efficiency improvements and cost reduction initiatives to mitigate the impact of its clients' tight budget management. 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 9 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 and in the second quarter of 2004. 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. 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 $9.5 million from its revolving credit facility at June 30, 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. 10 (b) Changes in internal controls There were no changes in the Company's internal controls over financial reporting identified in connection with the Item 4 (a) evaluation that occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting. PART II - OTHER INFORMATION Responses to Items 1, 2, 3 and 5 are omitted since these items are either inapplicable or the response thereto would be negative. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Company's Annual Meeting of Shareholders was held on June 17, 2004. The following were elected as directors of the Company: Name Votes For Votes Withheld Jeffrey K. Harrow 9,740,158 99,770 Scott J. Tarte 9,740,158 99,770 A.J. Agarwal 9,740,158 99,770 Washburn Oberwager 9,740,158 99,770 Richard Vague 9,740,158 99,770 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits.
Exhibit Page ------- ---- 10(a) Sixth Amendment to, and Partial Termination of, Lease Agreement for premises located at 2025 Gillespie Way, El Cajon, CA 90202 13 10(b) Seventh Amendment to, and Complete Termination of, Lease Agreement for premises located at 2025 Gillespie Way, El Cajon, CA 90202 18 10(c) Option Agreement dated May 13, 2004 with Stephen P. Rolf* 24 31(a) Rule 13a - 14(a) / 15(d) - 14 (a) Certification, Chief Executive Officer 26 31(b) Rule 13a - 14(a) / 15(d) - 14 (a) Certification, Chief Financial Officer 27 32 Section 1350 Certifications 28 * Management Contract or Compensatory Plan or Arrangement
(b) Reports on Form 8-K. No reports on Form 8-K were filed by the Company during the second quarter of 2004. 11 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: August 5, 2004 12 EX-10.A 2 exhibit10a_sixthamendment.txt SIXTH AMEND. & PARTIAL TERMINATION OF LEASE AGT. Exhibit 10(a) SIXTH AMENDMENT TO, AND PARTIAL TERMINATION OF, LEASE AGREEMENT THIS SIXTH AMENDMENT TO, AND PARTIAL TERMINATION OF, LEASE AGREEMENT (the "Sixth Amendment"), is entered into as of April 30, 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 and designated the "Additional Premises" in the Fourth Amendment, subject to the performance of certain obligations and undertakings set forth in the Fourth Amendment. 13 Subsequent to entering into the Fourth Amendment, Landlord and Tenant entered into that certain Fifth Amendment to, and Partial Termination of, Lease Agreement, dated as of April 1, 2004 (the "Fifth Amendment"), whereby Landlord and Tenant agreed to partially terminate the Lease with respect to the portion of the Original Premises comprised of the Professional's Choice Premises. D. Upon the fulfillment and satisfaction of certain terms, provisions and conditions set forth in the Fourth 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 Additional Premises (as defined in the Fourth Amendment). The terms, provisions and conditions set forth in the Fourth Amendment have been fulfilled and satisfied and, accordingly, Landlord and Tenant desire to memorialize the partial termination of the Lease with respect to the Additional Premises (as defined in the Fourth Amendment) 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 Sixth 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 Sixth Amendment, or except as otherwise expressly provided in this Sixth Amendment, capitalized terms utilized in this Sixth 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 2 of the Fourth Amendment ("Section 2"), Landlord and Tenant hereby agree and acknowledge that (i) all terms, provisions and conditions of Section 2 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 30, 2004 (the "Effective Date"), the Lease is partially terminated with respect only to the portion of the Original Premises which is comprised of the Additional Premises, as defined in the Fourth Amendment (the "Partial Termination"), (iii) this Sixth Amendment is intended by Landlord and Tenant to constitute the "mutually acceptable written instrument" referred to in Section 2 of the Fourth Amendment, which Section 2 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 Sixth 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 with respect to Tenant's prior agreement(s) to pay to Landlord sums which Tenant has agreed to pay pursuant to the terms and provisions of prior amendments to the Lease which have not, as of the Effective Date, been paid, until such time as Tenant shall have fully discharged and satisfied said obligations. 14 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, the Professional's Choice Premises and the Additional Premises (as defined in the Fourth Amendment), consisting of approximately 46,865 square feet, depicted in the amended Exhibit A attached to this Sixth 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 62 parking spaces. 3.3 Base Monthly Rental. Base Monthly Rental, as provided in Section 3.1 of the Lease, shall be the sum of $22,495.10 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., 31.21%), 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, the Fifth Amendment and this Sixth 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 Sixth Amendment. 5.2 Counterparts; Fax Signatures. This Sixth 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. 15 Facsimile signatures shall have the same force and effect as original signatures. 5.3 Severability. If any provisions, or portions thereof, of this Sixth Amendment or the application thereof are held to be unenforceable or invalid by any court of competent jurisdiction, the remainder of this Sixth Amendment shall not be affected thereby and to this end only the provisions of this Sixth Amendment are declared severable. 5.4 Successors and Assigns. Subject to the provisions of Section 5.10 of this Sixth Amendment, all terms of this Sixth 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 Sixth 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 Sixth Amendment shall be brought in San Diego County, California. 5.6 Waiver. No waiver of any of the provisions of this Sixth 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 Sixth Amendment with regard to any legal action, arbitration or other proceeding brought by either party for the enforcement or interpretation of this Sixth Amendment, or because of any alleged dispute, breach, default, or misrepresentation involving any provisions of this Sixth 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 Sixth Amendment. 5.10 Assignment. Neither party may assign this Sixth Amendment nor any of its respective rights, liabilities and obligations under this Sixth 16 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 Sixth Amendment, together with the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment and the Lease, constitutes the entire agreement between the parties pertaining to the subject matter contained in this Sixth 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 Sixth Amendment which are not fully expressed herein, in the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment and/or the Lease. 5.12 Amendment. No supplement, amendment, modification, discharge or change of this Sixth Amendment shall be binding unless executed in writing by all of the parties. 5.13 Authority. If a party to this Sixth Amendment is a corporation or other entity which is not a natural person, each individual executing this Sixth Amendment on behalf of said corporation or other entity represents and warrants that he is duly authorized to execute and deliver this Sixth 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 Sixth Amendment is binding upon such corporation or other entity in accordance with its terms. IN WITNESS WHEREOF, the parties have executed this Sixth 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: /s/__________________________ By: /s/_________________ [Signature] [Signature] __________________________ ___________________ [Print Name and Title] [Print Name and Title] 17 EX-10.B 3 exhibit10b_seventhamendment.txt SEVENTH AMEND. & TERMINATION AGT. OF LEASE AGT. Exhibit 10(b) SEVENTH AMENDMENT TO, AND COMPLETE TERMINATION OF, LEASE AGREEMENT THIS SEVENTH AMENDMENT TO, AND COMPLETE TERMINATION OF, LEASE AGREEMENT (the "Seventh Amendment"), is entered into as of June 30, 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 and designated the "Additional Premises" in the Fourth Amendment, subject to the performance of 18 certain obligations and undertakings set forth in the Fourth Amendment. Subsequent to entering into the Fourth Amendment, Landlord and Tenant entered into that certain Fifth Amendment to, and Partial Termination of, Lease Agreement, dated as of April 1, 2004 (the "Fifth Amendment"), whereby Landlord and Tenant agreed to partially terminate the Lease with respect to the portion of the Original Premises comprised of the Professional's Choice Premises and that certain Sixth Amendment to, and Partial Termination of, Lease Agreement, dated as of April 30, 2004 (the "Sixth Amendment"), whereby Landlord and Tenant agreed to partially terminate the Lease with respect to the portion of the Original Premises designated the "Additional Premises" in the Fourth Amendment. After giving effect to the Sixth Amendment, the portion of the Original Premises remaining subject to the Lease was approximately 46,865 square feet (the "Remaining Premises"). D. Subsequent to execution of the Sixth Amendment, Tenant has requested that Landlord terminate the Lease with respect to the Remaining Premises and effect a complete termination of the Lease in exchange for the payment to Landlord of certain sums in consideration of Landlord's agreement to so terminate the Lease, and Tenant's full and complete compliance with other terms and provisions set forth in this Seventh Amendment. Provided Tenant pays said sums and otherwise complies with said other terms and provisions, Landlord is willing to so terminate the Lease. E. Accordingly, Landlord and Tenant desire to memorialize the terms, provisions and conditions upon which the Lease with respect to the Remaining Premises and otherwise shall be and become completely terminated subject to, and in accordance with, all terms and provisions of this Seventh Amendment. NOW, THEREFORE, in consideration of the mutual covenants, agreements and undertakings contained in this Seventh 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 Seventh Amendment, or except as otherwise expressly provided in this Seventh Amendment, capitalized terms utilized in this Seventh Amendment shall have the meanings ascribed to such terms in the Lease. 2. Mutual Termination of the Lease; Termination Payment; Effective Date. Landlord and Tenant hereby agree and acknowledge that subject to (i) payment by Tenant of the sum of $163,089.60 (the "Lease Termination Payment") to Landlord pursuant to the terms and conditions of this Section 2 set forth below, (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 Remaining Premises and all of such tenant(s) and/or occupant(s) having vacated the Remaining Premises and delivered up and surrendered possession of the Remaining Premises to Tenant on or before June 30, 2004 (the "Effective Date") and (iii) subject to the delayed complete surrender of the Remaining Premises as set forth below in this Section 2, Tenant's having in turn delivered up and surrendered possession of the Remaining Premises to Landlord on or before the 19 Effective Date, the Lease shall be and become completely terminated on the Effective Date, both with respect to the Remaining Premises and otherwise. Landlord and Tenant agree and acknowledge that a portion of the Lease Termination Payment is comprised of Landlord's estimate of the common area maintenance/operating expenses for calendar year 2004 in the aggregate amount of $28,119 (the "CAM Estimate"), calculated at the rate of $0.10 per square foot of the Remaining Premises for each of the remaining months of calendar year 2004, July, 2004, through December, 2004. Landlord and Tenant agree that only the CAM Estimate portion of the Lease Termination Payment shall be subject to the final reconciliation procedures set forth in Section 11.3 of the Lease, and any underpayment or overpayment, as the case may be, shall be paid by Tenant or refunded by Landlord, as applicable, within five (5) days of Landlord's transmission to Tenant of Landlord's statement required by Section 11.3 of the Lease. Tenant shall also have the continuing right to a final reconciliation of common area maintenance/operating expenses, pursuant to Section 11.3 of the Lease, paid by Tenant during calendar year 2004 and prior to the Effective Date. Landlord is currently holding a security deposit in the sum of $30,782 provided by Tenant to Landlord at the commencement of the Lease pursuant to Section 3.6 of the Lease. Landlord agrees to apply said security deposit to the outstanding obligations due to Landlord, as set forth in Landlord's ledger dated as of June 29, 2004, which ledger is attached to this Seventh Amendment as Exhibit A (the "Ledger"). The portion of the Lease Termination Payment remaining outstanding and unpaid after application of the security deposit as shown in the Ledger, namely, $158,307.60, shall be due and payable by Tenant to Landlord in six equal installments of $26,384.60 each, commencing July 9, 2004 and so continuing on the first day of each calendar month thereafter until December 1, 2004, on which latter date the final installment shall be due and payable. Installments of the Lease Termination Payment which are not paid when due are subject to the late charge and default interest provisions, if any, set forth in the Lease. Notwithstanding Landlord's agreement with Tenant to completely terminate the Lease with respect to the Remaining Premises and otherwise as of the Effective Date, as aforesaid, (1) Tenant shall remain fully obligated and liable to pay to Landlord sums which Tenant has agreed to pay pursuant to the terms and provisions of this Seventh Amendment, which have not, as of the Effective Date, been paid, until such time as Tenant shall have fully discharged and satisfied said obligations, (2) Tenant shall have until the close of business on Friday, July 16, 2004 (the "Final Surrender Date"), to completely vacate and surrender the Remaining Premises, provided however that Tenant acknowledges that Landlord will be installing certain tenant improvements and otherwise configuring the Remaining Premises for occupancy by a new tenant (collectively, "Landlord's Work") during the period between the Effective Date and the Final Surrender Date and, in consideration of Landlord's permitting Tenant to continue to occupy portions of the Remaining Premises until the Final Surrender Date, Tenant agrees to organize and consolidate its remaining personal property during the period between the Effective Date and the Final Surrender Date in accordance with Landlord's reasonable requests and in areas of the Remaining Premises which will permit Landlord's Work to proceed without unreasonable interference during said period, and (3) this Seventh Amendment shall not be construed or interpreted to alter, amend and/or modify Landlord and Tenant's respective responsibilities and obligations to each other under and by reason of the Lease, to the extent (but only to the extent) that any such responsibilities and obligations arose prior to the Effective Date and would have continued beyond the date provided in the Lease for the expiration of its term, in the absence of this Seventh Amendment. 20 3. General Provisions. 3.1 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 Seventh Amendment. 3.2 Counterparts; Fax Signatures. This Seventh 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. 3.3 Severability. If any provision, or portion thereof, of this Seventh Amendment or the application thereof is held to be unenforceable or invalid by any court of competent jurisdiction, the remainder of this Seventh Amendment shall not be affected thereby and to this end only the provisions of this Seventh Amendment are declared severable. 3.4 Successors and Assigns. Subject to the provisions of Section 3.10 of this Seventh Amendment, all terms of this Seventh 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. 3.5 Governing Law; Venue. This Seventh 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 Seventh Amendment shall be brought in San Diego County, California. 3.6 Waiver. No waiver of any of the provisions of this Seventh 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. 3.7 Time. Time is of the essence with respect to the performance by each party of its rights and obligations hereunder. 3.8 Attorneys' Fees. In the event any attorney is employed by either party to this Seventh Amendment with regard to any legal action, arbitration or other proceeding brought by either party for the enforcement or 21 interpretation of this Seventh Amendment, or because of any alleged dispute, breach, default, or misrepresentation involving any provisions of this Seventh 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. 3.9 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 Seventh Amendment. 3.10 Assignment. Neither party may assign this Seventh Amendment nor any of its respective rights, liabilities and obligations under this Seventh Amendment without the prior written consent of the other party, which may be given or withheld in such party's sole and unreviewable discretion. 3.11 Entire Agreement. This Seventh Amendment, together with the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment, the Sixth Amendment and the Lease, constitutes the entire agreement between the parties pertaining to the subject matter contained in this Seventh 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 Seventh Amendment which are not fully expressed herein, in the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment, the Sixth Amendment and/or the Lease. 3.12 Amendment. No supplement, amendment, modification, discharge or change of this Seventh Amendment shall be binding unless executed in writing by all of the parties. 3.13 Authority. If a party to this Seventh Amendment is a corporation or other entity which is not a natural person, each individual executing this Seventh Amendment on behalf of said corporation or other entity represents and warrants that he is duly authorized to execute and deliver this Seventh 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 Seventh Amendment is binding upon such corporation or other entity in accordance with its terms. 22 IN WITNESS WHEREOF, the parties have executed this Seventh 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: /s/__________________________ By: /s/_________________ [Signature] [Signature] ____________________________ ___________________ [Print Name and Title] [Print Name and Title] 23 EX-10.C 4 exhibit10c_stockoption-agt.txt STOCK OPTION AGREEMENT Exhibit 10(c) MARLTON TECHNOLOGIES, INC. STOCK OPTION AGREEMENT THIS STOCK OPTION (the "Option") is granted as of the 13th day of May 2004, by MARLTON TECHNOLOGIES, INC., a Pennsylvania corporation (the "Company") to STEPHEN P. ROLF (the "Optionee"). W I T N E S S E T H : 1. Grant. Pursuant to the Company's 2001 Equity Incentive Plan (the "Plan"), the Company hereby grants to the Optionee Stock Options (the "Options") to purchase on the terms and conditions set forth herein, an aggregate of One Hundred Thousand (100,000) shares (appropriately adjusted for any subsequent stock splits, stock combinations or similar capital restructuring) of the Company's Common Stock, no par value per share (the "Option Shares"), at a purchase price per share of Fifty Cents ($.50) (the "Option Price"). 2. Term. This Option Agreement and Optionee's right to exercise Options vested in accordance with Paragraph 3 shall terminate on the earlier of (i) May 12, 2009, or (ii) upon termination of Optionee's employment or Employment Agreement with the Company's wholly-owned subsidiary Sparks Exhibits & Environments Corp., provided that in the event of termination due to Optionee's death or disability, Optionee (or Optionee's spouse or estate) may exercise this Option Agreement for a period of six months following the date of termination as to Options fully vested on or before the date of termination. 3. Vesting. The Options will vest 60,000 on May 13, 2004 and 20,000 on each of the first two anniversaries of the date of this Agreement, provided Optionee continues to be employed by the Company on each of such dates. 4. Method of Exercise and Payment. Vested Options may be exercised from time to time, in whole or in part. When exercisable under Paragraph 3, the Option may be exercised by written notice to the Company specifying the total number of Option Shares to be exercised. The notice shall be accompanied by payment in cash or by check equal to the aggregate Option Price of all Option Shares covered by such notice. 5. Notices. Any notice to be given to the Company shall be addressed to the Company at its principal executive office, and any notice to be given to the Optionee shall be addressed to the Optionee at the address then appearing on the records of the Company or at such other address as either party hereafter may designate in writing to the other. Any such notice shall be deemed to have been duly given when deposited in the United States mail, addressed as aforesaid, registered or certified mail, and with proper postage and registration or certification fees prepaid. 6. General. This Option shall not be assignable by Optionee. Stock certificates representing the Option Shares acquired shall bear any legends required by applicable state and federal securities laws. Company stock issuances are unregistered, requiring a one year holding period. 7. Tax Provision. This Option Agreement shall be interpreted and construed in a manner consistent with, and to satisfy the requirements of, the incentive stock option provisions of the Internal Revenue Code of 1986, as it may be amended from time to time (the "Code") and of the Plan. This Option Agreement is intended to satisfy the requirements of the Plan, Section 422A(b) of the Code and qualify for special tax treatment under Section 421 et seq. of the Code. 24 IN WITNESS WHEREOF, the parties have executed this Option Agreement as of the day and year first above written. MARLTON TECHNOLOGIES, INC. Attest: /s/______________________________ By:/s/_____________________________ Alan I. Goldberg, Secretary Robert B. Ginsburg, President Witness: /s/_____________________________ /s/______________________________ Optionee: Stephen P. Rolf 25 EX-31.A 5 exhibit31a_certification.txt CERTIFICATION OF CHIEF EXECUTIVE OFFICER 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. August 5, 2004 /s/ Robert B. Ginsburg ------------------ Robert B. Ginsburg Chief Executive Officer 26 EX-31.B 6 exhibit31b_certification.txt CERTIFICATION OF CHIEF FINANCIAL OFFICER EXHIBIT 31(b) SECTION 302 CERTIFICATION I, Stephen P. Rolf, the Chief Financial Officer, certify that: 1. I have reviewed this Annual Report on Form 10-K of Marlton Technologies, Inc. 2. Based upon my knowledge, this 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 report. 3. Based on my knowledge, the financial statements, and other financial information included in this 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 report. 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and (c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing equivalent functions): (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; 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 over financial reporting. Dated: April 14, 2004 /s/ Stephen P. Rolf --------------- Stephen P. Rolf Chief Financial Officer 27 EX-32 7 exhibit32_certification.txt 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 June 30, 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 August 5, 2004 August 5, 2004 28 -----END PRIVACY-ENHANCED MESSAGE-----