UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-SB
General Form for Registration of Securities
of Small Business Issuers Under Section 12(b) or (g)
of the Securities Exchange Act of 1934
ULTRASTRIP SYSTEMS INC.
(Name of Small Business Issuer in its charter)
FLORIDA 65-0841549
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
759 SE Federal Highway 34994
Suite 212 (Zip Code)
Stuart, FL
(Address of principal executive offices)
Issuer's telephone number: (561) 287-4095
--------------------------------
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which each
to be so registered class is to be registered
------------------- ------------------------------------
-NONE-
Securities to be registered under Section 12(g) of the Act:
COMMON STOCK $.01 PAR VALUE
(Title of Class)
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TABLE OF CONTENTS
Item 1. Description of Business 4
Item 2. Management's Discussion and Analysis or Plan of Operation 9
Item 3. Description of Property 12
Item 4. Security Ownership of Certain Beneficial Owners and
Management 12
Item 5. Directors, Executive Officers, Promoters and
Control Persons 13
Item 6. Executive Compensation 15
Item 7. Certain Relationships and Related Transactions 15
Item 8. Legal Proceedings 15
Item 9. Market for Common Equity and Related Shareholder Matters 16
Item 10. Recent Sales of Unregistered Securities 16
Item 11. Description of Securities 16
Item 12. Indemnification of Directors and Officers 17
Item 13. Financial Statements 18
Item 14. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure 18
Item 15. Financial Statements and Exhibits 18
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this Registration Statement constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"). Words such as "expects,"
"anticipates," "intends," "plans," "believes," "seeks," "estimates," and
variations of such words and similar expressions are intended to identify such
forward looking statements. These statements are based on current expectations
and projections about the Company's business and industry and assumptions made
by management and are not guarantees of future performance. Therefore, actual
events and results may differ materially from those expressed or forecasted in
the forward-looking statements due to factors such as the economic conditions of
the industries served by the Company (including the marine and petroleum
industries), the availability to the Company of sufficient working capital to
bid for and perform contracts, the ability of the subvendors used by the Company
to meet many of its manufacturing requirements, demand for robotic hydroblasting
equipment in general, and specifically, for the Company's products and services,
and other factors identified in this Registration Statement. Given these
uncertainties, prospective investors are cautioned not to place undue reliance
on such forward-looking statements. The Company undertakes no obligation to
update any forward looking statements in this Registration Statement.
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ITEM 1. DESCRIPTION OF BUSINESS
THE COMPANY
Ultrastrip Systems Inc., a Florida corporation ("USS" or the "Company"),
was founded and incorporated on April 2, 1998 by Dennis E. McGuire, the majority
shareholder in Amclean, Inc. ("Amclean"). Amclean owns the patented technology
underlying the Company's product. USS is an original equipment manufacturer of
industry-specific robotic hydroblasting equipment for sale to the heavy marine
and petroleum industries. The Company also supplies robotic surface preparation
contract services to shipyards and the petroleum industry. The Company's main
product is a patented, robotic, ultra high pressure waterjet paint stripping
system robot - the Manta M2000 ("Manta") - which is used to strip the paint from
the hulls of large ships in drydock and above ground storage tanks in the
petroleum industry. USS acquired the right to commercialize the technology and
become the exclusive manufacturer and distributor for the Manta pursuant to the
terms of an Option to Purchase Assets and License Agreement (see Exhibit 2.6)
executed on June 23, 1998. USS owns the exclusive worldwide rights to the
present and future improvements of the patented ultra high pressure waterjetting
system. The current directors of USS are Dennis E. McGuire, Jacqueline K.
McGuire, Matthew L. Jones, Kevin P. Grady, John Caperton, Michael Cristoforo,
Robert Erato, Roseann Falsetti, and Vincent Zanfini.
The Manta is designed to increase productivity and provide an
environmentally sound alternative to the methods presently used around the world
to remove paint from the surface of steel. The Company markets its products
worldwide to shipyards and the petroleum industry.
The Company utilizes quality-audited, contractually-licensed manufacturing
subcontractors to produce the pump system and the vacuum system, two of the
three major component assemblies for the Manta system. The Company also uses
various manufacturers for sub-components of the robotic Manta. Systems are sent
to USS headquarters in Stuart, Florida for assembly and final testing.
The Company's Sales Division, Contract Services Division and Customer
Support are also located at the Company's headquarters.
THE MANTA
The robotic Manta system consists of three major component assemblies. The
high pressure pump feeds the robotic Manta while the vacuum and filtration
system captures the paint chips and water, cleans all particulates from the
waste water and recirculates the clean water back to the high pressure pump
eliminating any discharge of water or waste products to the environment, and the
robotic vehicle moves over the targeted surface.
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(1) The high pressure pump system. A 550 horsepower Caterpillar diesel
engine supplies the power to run a Hammelmann HDP 440 series triplex ultra high
pressure pump that produces 360,000 pounds of pressure per square inch @ 22
gallons per minute. The system is manufactured in Oelde, Germany by Hammelmann
Corp. exclusively for USS.
(2) The vacuum and filtration system. Manufactured by Hi Vac Corporation
of Marietta, Ohio exclusively for USS, the system consists of a 250 horsepower
Caterpillar engine driving a 5,000 CFM vacuum, centrifuge and filtration system.
(3) The robotic vehicle. The joystick-controlled Manta magnetically
attaches to steel surfaces and strips paint and corrosion using a patented and
proprietary method of ultra high pressure waterjetting. The Manta cuts a path of
48" while moving forward or backward at speeds between 2,000-10,000 feet per
hour.
COMPETITIVE DESCRIPTION
The initial USS product, the Manta, has several features that set it apart
from other products. The patented high pressure jetting ring allows the nozzles
to achieve a cutting path of 48". Competing systems remove only a 6"-8" path and
are moved around the vessel or surface being stripped by cables and pulleys or a
fixed arm in drydock, resulting in low production rates. The patented magneti-
cally attached wheels and independent suspension allow the Manta to traverse an
entire ship or storage tank at very fast speeds, allowing for greater production
rates and faster drydock turn-around.
CONTRACT SERVICES
The Company's Contract Services Division provides complete environmental
consulting for shipyards in transition from grit blasting to robotic hydro-
blasting. It also provides turnkey contract services to the shipyard and
petroleum industries for customers who prefer to reap the benefits of robotic
hydroblasting without purchasing the equipment.
QUALITY COMMITMENT AND CONTROL
The Company's comprehensive quality control program is designed to ensure
that systems manufactured by the Company, as well as components purchased from
outside manufacturers, meet the Company's quality standards. The Company's
quality control program includes inspections at all stages of the design and
manufacturing process at the Company's manufacturing facility. All purchased
components and products assembled by subcontractors are also inspected to ensure
they perform properly. Company management is satisfied with the quality and
reliability of components assembled by subcontractors. However, there can be no
assurance that such components will always perform properly. The failure of a
product to perform properly could have a material
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adverse effect upon the Company's business, operating results, and financial
condition. The Company has made every effort to contract with reputable Original
Equipment Manufacturers who are world-recognized leaders in their respective
industries, thereby assuring both quality control and reliability for the end
user.
TECHNOLOGY
USS products are protected by patents and trademarks. The Company provides
customization and specialization to meet customer requirements. USS strives to
remain in the forefront of technological development in order to satisfy its
customers for the long term.
ENVIRONMENTAL ADVANTAGES
Hydroblasting has many advantages over conventional grit blasting.
Hydroblasting leaves the cleaned surface free of corrosive salts and chlorides
which cause premature coatings failures. Grit blasting contaminates water and
air. Grit blasting a typical ship generates 30 to 50 million pounds of grit
contaminated with hazardous chemicals from the ship's coatings. Spent grit is
trucked and deposited into landfills. Shipowners face unlimited long-term
exposure to liability in the event deposited spent grit pollutes groundwater.
Expensive coal slag, the primary material used in grit blasting, becomes
airborne dust in violation of the federal Clean Air Act of 1990. Hydroblasting a
typical ship using the Manta produces "pigment" waste (approximately a dozen
55-gallon drums) which can be burned for disposal.
CUSTOMERS
The Company's customers are in the marine industry and the petroleum
industry.
The Marine Industry. Waterjetting has recently been approved by the
world's leading paint manufacturers as a replacement for grit blasting. High
pressure waterjetting provides a much cleaner surface, free of all salts and
chlorides that in the past caused premature coatings failures. Worldwide there
are approximately 440 large shipyards with drydocks capable of handling one or
more vessels 400 feet or longer. These shipyards serve shipowners who require
minimal time in drydock so the vessels can return to revenue-producing status
and these shipyards are the Company's target market. Each of these 440 shipyards
is now forced to find an economical and efficient way of complying with
newly-instituted environmental regulations affecting the traditional method of
cleaning ship steel. A secondary marine industry target market is made up of the
numerous smaller shipyards which are likely to engage the Company to perform
hydroblasting services on a contract basis.
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The Petroleum Industry. Petroleum storage tanks periodically require
removal of failed paint systems. Waterjetting is the new preferred method of
removing the failed paint. The traditional grit blasting method of paint removal
involves using coal slag which causes a spark and can result in 1.2 million
pounds of grit and contaminated paint chips (per storage container) as waste to
be removed to a landfill. Waterjetting produces no spark, thus eliminating the
need to empty the tanks before proceeding, and produces no dust, thereby
eliminating violation of the Clean Air Act of 1990.
CURRENT CUSTOMERS
Wallem Ship Management Ltd., which manages a fleet of over 100 ocean going
vessels (including the world's largest oil supertanker "Jahre Viking"), has
committed to purchase hydroblasting services from the Company (to replace grit
blasting) which could result in billings of $10 million in 1999. The Company
anticipates commencing work for Wallem in April 1999 in Brest, France, servicing
the supertanker M/V Algorobo.
MARKETING AND DISTRIBUTION
Distribution channels to the ship repair and petroleum industries are very
direct. The Company uses word-of-mouth advertising and aggressive networking
between friends in the same industry as effective marketing tools. The Company
intends to advertise in shipping industry and petroleum industry publications,
at conventions and trade shows, and by direct mail, using its website for
marketing support. USS has recruited industry-qualified sales people to market
the Manta to the target industries. As part of its marketing program the Company
is considering sales of regional area distributorships.
COMPETITION AND INDUSTRY
There are approximately 2,000 shipyards that need to convert to high
pressure waterjetting for ship repair to satisfy environmental pressures
worldwide. 440 of these shipyards have drydocks capable of handling one or more
vessels 400 feet and larger. To comply with the Clean Air Act of 1990, and to
adhere to regulations concerning disposal of contaminated industrial waste, the
marine industry must switch from grit blasting to waterjetting. The necessity
for conversion creates the niche market that USS will serve.
COMPETITORS
The Company competes with grit blasting companies worldwide and a small
number of hydroblasting companies that rely on manual labor.
The patented robotics of the Manta give the Company a competitive edge as
no other company has a product that is as
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completely developed. There are competitors with specific products that fill a
similar need supplying the submarkets of smaller shipyards and contractors.
Among these are:
Hammelmann Corp. of Oelde, Germany, the Company's closest competitor.
(Hammelmann supplies the pump component of the Manta to the Company.)
Hammelmann's device, the "Dockmaster", can strip coatings at the rate of 750
square feet per hour. It is moved along the side of a ship by a large crane. It
cannot strip a ship's underside, only about half of its flat sides.
Flow International of Kent, Washington manufactures a robotic vehicle
marketed as the "Hydrocat". It uses suction to adhere to vessels. Its
production rate is 150 to 200 square feet per hour.
Jet Edge Corp. of Minneapolis, Minnesota manufactures a smaller
magnetic track vehicle with a production rate of 100 square feet per hour.
The Flow International vehicle and the Jet Edge vehicle address the needs
of small contractors, not large shipyards.
Pratt & Whitney, Waterjet Systems manufactures a low production, 300
square feet an hour, high cost system that has been purchased by the U.S.
Navy. The system sells for $2 million.
The Company's product, the Manta, a true robotic vehicle which cleans
10,000 square feet an hour, is ideal for large ships and shipyards and is priced
at $2.5 million.
INDUSTRY OUTLOOK
As previously stated, the marine industry, and specifically shipyards,
must switch from grit blasting to waterjetting as the method for paint removal
in order to comply with the Clean Air Act of 1990 and to adhere to regulations
concerning disposal of contaminated industrial waste. The necessity for
conversion creates the niche market for USS. USS has the most efficient and
economical solution to conversion. Before conversion, shipyards employ a crew of
at least 20 men and tie up drydock space for several weeks for a single ship. By
converting to the Manta system, the manpower is reduced to two machine operators
and the time in drydock is drastically reduced. In order to compete, the large
shipyards will need to convert.
TRADEMARKS AND PROPRIETARY RIGHTS
The Company holds rights to US Patent #5,628,271 issued May 13, 1997 to
Dennis McGuire. Such rights were assigned to and then licensed to USS
through 2008. (See Exhibit 2.6)
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RESEARCH AND DEVELOPMENT
The Company currently conducts regular research and development activities
involving the engineering and design of robotic waterjetting systems and
components and will continue to strive to be at the forefront of technological
development in order to satisfy its customers for the long term.
ENVIRONMENTAL COMPLIANCE
The Company's operations are not subject to any extraordinary laws and
regulations relating to the protection of the environment. However, in
developing and maintaining its product, the Company must be aware of the
stringent clean air and water regulations imposed on and surrounding the marine
industry in particular and pertaining to the environment in general. Failure to
ensure that the product and hydroblasting services comply with regulations or
changes in the interpretation of existing regulations could result in the
suspension or cessation of business. Such regulations or such changes in
interpretation could require the Company to incur substantial costs to comply
with such regulations and changes. Regulatory changes, which are affected by
political and economic factors, could significantly impact the Company's
operations by increasing the opportunity for additional competition. Any such
regulatory changes could have a material adverse effect on the Company's
business, financial condition and results of operations.
EMPLOYEES
At December 31, 1998, the Company employed 4 persons. None of the
Company's employees is covered by collective bargaining agreements. The Company
considers its employee relations to be satisfactory.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
OVERVIEW
USS was founded and incorporated in 1998 by Dennis McGuire, the founder of
Amclean Inc. and the inventor of the Manta, U.S. Patent #5,628,271. In the
second quarter of 1998 the Company was completing its initial development phase.
A prototype of the Manta had been developed and agreements with subcontractors
were in place. Tests had been conducted, industry endorsements were obtained and
the Company was ready to step up its marketing efforts and begin production.
USS projected initial costs associated with developing and marketing the
next generation robotic Manta at $1 million; in April 1998 USS authorized the
sale of company stock pursuant to SEC Rule 504.
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IMPLEMENTATION SUMMARY
The Company intends to replace pollutive grit blasting with environ-
mentally sensitive hydroblasting as the primary method for removal of coatings
and rust from steel surfaces. USS' strategy is to identify and address the needs
of the niche markets by selling a singular, essential, high-priced item designed
to customer specifications. Each customized version of the Manta can ultimately
become adaptable to fit the needs of other niche customers.
MARKETING STRATEGY
The Company believes that its target product sales market consists of the
world's 440 largest shipyards and has designated the shipyards as customers. USS
customers are being forced to adopt new technologies in order to remain
competitive. USS is dedicated to bringing to customers a practical solution to
job tasks and intends to be instrumental in providing robotic solutions to
assist its customers in meeting the demands of the 21st century. The larger the
shipyard the greater the likelihood of Manta sales.
The target service market has been identified as the smaller shipyards,
which are likely to engage the Company to perform hydroblasting services on a
contract basis.
PRICING STRATEGY
The Company's robotics are priced competitively enough to encourage a
short-term purchase decision from its customers. USS prices its complete robotic
waterjetting system (the Manta) at $2.5 million. Production rates for the Manta
are up to 75% greater than those of its competitors but the system is priced in
the same range, making the price-to-production ratio of the Manta far superior
to that of its competitors.
SALES & PROMOTION STRATEGY
The Company has assembled a knowledgeable and experienced in-house sales
force with extensive ties to shipyards and petroleum companies worldwide.
Initially the USS sales team will consist of four commissioned sales people in
house and four to six commissioned sales people in various assigned regions. As
USS expands its regions, additional sales people and distributors will be added.
The Company's long-range promotional goal is to gain enough visibility
throughout the target marine industry to generate sales to meet or exceed
forecasted growth.
SALES FORECAST
The following table presents sales forecast (sales growth projected at 50%
per year) for the next three years:
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SALES 1999 2000 2001
Manta Systems $ 20,000,000 $ 30,000,000 $ 45,000,000
Contract Services 2,900,000 4,500,000 6,750,000
Other (Distributorships) 25,000,000 37,500,000 53,500,000
Total Sales $ 47,900,000 $ 72,000,000 $105,250,000
RESULTS OF OPERATIONS
The Company's financial statements of December 31, 1998, reflect the
activity for the first ten months of operation, including the "start-up" phase
of operations involving the acquisition of equipment and capital to engage in
operations. During the period the Company raised $853,011 in capital through
stock sales which was used for capital expenditures in the form of property,
plant and equipment, and the balance for start-up costs (prepaid expenses).
LIQUIDITY AND CAPITAL RESOURCES
To date the Company has relied on a private placement offering under SEC
Rule 504 to raise $1 million in start-up working capital. The Company
anticipates that additional working capital will be necessary to cover the start
up expenses during the next eighteen months. Management projects that initial
costs associated with developing and marketing the next generation robotic Manta
and equipping the contract services division with two complete systems will be
$4-5 million and on February 22, 1999 launched a private placement offering
under SEC Rule 506 to raise the capital.
USS expects to finance growth in part through cash flow. A Company
breakeven analysis indicates that USS has an excellent balance of fixed costs
and sufficient sales strength to remain healthy. The breakeven point is one unit
per year, while the sales forecast for the next year calls for 8 units.
ITEM 3. DESCRIPTION OF PROPERTY
The Company will seek to lease and occupy 10,000 square feet of space in
Stuart, Florida to warehouse product, sales and administrative offices and
customer support.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the number
of shares of Common Stock owned beneficially as of January 31, 1999 by: (i) each
person known to the Company to own more than five percent (5%) of any class of
the Company's voting securities; (ii) each director of the Company; and (iii)
all directors and officers as a group.
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TITLE NAME AND ADDRESS AMOUNT AND NATURE PERCENT
OF CLASS OF BENEFICIAL OWNER OF BENEFICIAL OWNER OF CLASS
- ------------ ------------------------- ------------------- --------
Common Stock Dennis E. and 3,169,144 34.35%
Jacqueline K. McGuire
P.O. Box 2173
Stuart, FL 34995
Common Stock Kevin P. Grady 3,169,144 34.35%
14640 Marvin Lane
Fort Lauderdale, FL 33330
Common Stock John Caperton 633,889 6.86%
9916 Silvertree
Dallas, TX 75243
Common Stock Matthew L. Jones 38,889 .42%
P.O. Box 2434
Stuart, FL 34995
Common Stock Michael and Jean Cristoforo 138,889 1.50%
3665 E. SW Quail Meadow Tr.
Palm City, FL 34990
Common Stock Robert Erato 78,889 .85%
4821 SW Bimini Circle
Palm City, FL 34990
Common Stock Roseann Falsetti 59,000 .64%
1573 SW Crossings Circle
Palm City, FL 34990
Common Stock Vincent Zanfini 73,000 .79%
4701 Bimini Circle N.
Palm City, FL 34990
Common Stock All directors and officers 7,360,844 79.79%
as a group
All shares of Common Stock are held directly with sole voting and invest-
ment powers except that Messrs. Capterton and Grady gave Mr. McGuire their
proxies to vote their shares through 2003.
The Company is not aware of any arrangement which might result in a change
of control in the future.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The following table sets forth certain information about the directors and
executive officers of the Company:
DIRECTORS AND EXECUTIVE OFFICERS
NAME AGE POSITION
- --------------------- --- -----------------------
Dennis E. McGuire 48 Director/President
Chairman of the Board
Jacqueline K. McGuire 35 Director/Vice President
Kevin P. Grady 47 Director
Matthew L. Jones 38 Director/Treasurer/COO
John Caperton 50 Director/VP/CFO
Michael Cristoforo 46 Director/Vice President
Robert Erato 42 Director/Vice President
Roseann Falsetti 53 Director/Vice President
Vincent Zanfini 40 Director/Vice President
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DENNIS E. MCGUIRE, President and Director. Mr. McGuire served as president
of Amclean Inc. since forming it in 1992. Amclean is the world's first ultrahigh
pressure waterjetting contractor in the marine industry. Mr. McGuire has
traveled extensively throughout the world performing contract services at
shipyards and has given educational seminars to various navies and shipyards on
the benefits of ultrahigh pressure waterjetting as an environmentally safer
alternative to grit blasting for removing coatings from the hulls of ships. He
left Amclean in early 1998 to start the Company. Mr. McGuire earned an associate
of science degree from Miami Dade Junior College in 1974.
JACQUELINE K. MCGUIRE, Vice President, Secretary and Director. Mrs.
McGuire, the wife of the Company's president, served as Chairman of the Board of
Amclean Inc. from 1992 through 1997 where she was responsible for bid
negotiating with the U.S. Navy and shipyards worldwide to provide contracting
services. Mrs. McGuire has traveled extensively to Europe to negotiate with
equipment manufacturers on pricing, delivery and terms. Mrs. McGuire earned a
bachelor's degree in business administration from Barry College in 1984.
KEVIN P. GRADY, Vice President and Director. Mr. Grady co-founded Amclean
Inc. with the McGuires where he was responsible for the day to day coordination
of managing contract services until 1997. While under Mr. Grady's management,
Amclean completed the world's first hydroblasting project on the hull of a ship,
the U.S. Coast Guard ice breaker "Polar Star". The knowledge acquired on this
project resulted in the development of the original Manta.
MATTHEW L. JONES, Treasurer, Chief Operating Officer and Director. Mr.
Jones is an attorney in Stuart, Florida, specializing in general civil practice.
He earned his bachelor's degree in off-shore marine technology in 1984 from the
Florida Institute of Technology. He earned his law degree in 1987 from Loyola
University.
JOHN CAPERTON, Vice President, Chief Financial Officer and Director. Mr.
Caperton earned his bachelor of science degree in business from Texas A&M
University in 1967 with a minor in mathematics and accounting. He is presently
working on his masters degree at the University of Texas at Arlington. He holds
both Texas and California real estate brokers licenses. Since 1981 Mr. Caperton
has owned Caperton Realty Service in Dallas. Mr. Capterton is responsible for
negotiating sales of contract services and equipment sales and leasing.
MICHAEL CRISTOFORO, Vice President and Director. Mr. Cristoforo has owned
and operated Custom Auto Center in Stuart, Florida since 1991. Mr. Cristoforo is
responsible for investor and customer relations.
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ROBERT ERATO, Vice President and Director. Mr. Erato earned his bachelors
degree in Business Administration from Baruch College in 1978. He is co-owner of
Custom Auto Center in Stuart, Florida. Mr. Erato oversees product safety,
environmental compliance and quality assurance.
ROSEANN FALSETTI, Vice President and Director. Mrs. Falsetti is vice
president of Interstate Insurance Services in Stuart, Florida, an insurance
brokerage. Mrs. Falsetti oversees the Company's needs in longshoremen's and
harbor workers' and product liability insurance.
VINCENT ZANFINI, Vice President and Director. Mr. Zanfini has owned and
operated Vinnie's Carpet in Palm City, Florida since 1989. Mr. Zanfini is
responsible for coordinating product demonstrations for shipyard executives
worldwide.
FINANCIAL ADVISOR. In May 1998 the Company engaged Merit First, Inc. of
Tequesta, Florida as its financial advisor. Merit had invested $1,000 in the
Company as a co-founder, for which it acquired 100,000 shares of Common Stock.
Merit assisted the Company in its initial private securities offering in which
the Company raised $1,000,000. For its services, Merit was paid $11,150.
ITEM 6. EXECUTIVE COMPENSATION
The following summary compensation table sets forth certain information
regarding compensation paid during the fiscal year ending December 31, 1998 to
the executives of the Company.
SUMMARY COMPENSATION TABLE
Name and
Principal Salary Bonus
Position Year ($) ($)
-------- ---- ------ -----
Dennis E. McGuire 1998 92,000 -0-
President
Jacqueline K. McGuire 1998 60,165 -0-
Vice President
Matthew L.Jones 1998 23,500 -0-
Treasurer,
Chief Operating Officer
Kevin P. Grady 1998 10,500 -0-
Vice President
The Company has entered into contracts with business consultants,
including certain officers of the Company, to provide services for the
Company. Each separate agreement
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defines commission compensation for the designated individual(s). (See Exhibit
2.3)
COMPENSATION OF DIRECTORS. No director of the Company received any form of
compensation from the Company for any services provided as a director, for
committee participation, or for special assignments.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company intends that any transactions between the Company and its officers,
directors, principal shareholders, affiliates or advisors will be on terms no
less favorable to the Company than those reasonably obtainable from third
parties.
ITEM 8. LEGAL PROCEEDINGS
The Company has no knowledge of any pending or contemplated legal
proceedings against it, and is not presently a party to any legal action. The
Company is contemplating commencing litigation for patent infringement against
the Jet Edge division of TC/American Monorail, Incorporated. Jet Edge has
attempted to develop a magnetic crawler which uses ultrahigh water pressure to
remove coatings. To the best of the Company's knowledge, Jet Edge has been
unsuccessful in selling and/or marketing its product. The Company will seek
injunctive relief and money damages.
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS.
There is no established public trading market for shares of the Company's
Common Stock. As of January 31, 1999, there were approximately 158 holders of
the Company's Common Stock.
The Company distributed no dividends during fiscal year 1998.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
The following information sets forth certain information for all
securities the Company sold during 1998 (since inception) without registration
under the Securities Act of 1933 (the "Securities Act"):
In May of 1998 the Company initiated a private placement offering pursuant
to SEC Rule 504 to raise $1 million for initial capitalization. At December 31,
1998 the Company had raised $935,653 through the sale of: (1) 76,340
"free-trading" shares, and (2) 9,148,155 "restricted" shares.
There was no other issuance of stock during 1998.
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There were no underwriters participating in the transactions.
ITEM 11. DESCRIPTION OF SECURITIES
COMPANY STOCK
The Company's Articles of Incorporation authorize the Company to issue
50,000,000 shares of Common Stock, par value $.01 per share ("Common Stock") and
1,000 shares of Series A Preferred Stock, par value $.01 per share ("Preferred
Stock"). As of January 31, 1999, there were 9,224,495 issued and outstanding
shares of Common Stock held of record by approximately 158 shareholders and no
Preferred Stock had been issued.
Holders of Common Stock are entitled to one vote per share on each matter
submitted to vote at any meeting of shareholders. Common Stock does not carry
cumulative voting rights and, therefore, holders of a majority of the
outstanding shares of Common Stock will be able to elect the entire Board of
Directors, if they choose to do so, in which event the holders of the remaining
shares will be unable to elect directors. The holders of Series A Preferred
Stock will have no voting rights except as required by law. There are currently
nine members of the Board of Directors. The By-Laws of the Company provide that
the number of directors shall be a minimum of one but may be increased to not
more than nine without amendment. The Common Stock has no preemptive or other
subscription rights, has no conversion rights and is not subject to redemption.
The Company is attempting to raise capital by selling Preferred Stock
pursuant to SEC Rule 506. All Preferred Stock to be issued in the offering, when
issued and paid for, will be validly issued, fully paid and nonassessable.
DIVIDENDS
The Company has never paid a dividend on its Common Stock and it currently
intends to retain earnings for use in its business to finance operations and
growth. Any future determination as to the distribution of cash dividends will
depend upon the earnings and financial position of the Company at that time and
such other factors as the Board of Directors may deem appropriate. The holders
of Preferred Stock shall be entitled to receive cumulative dividends in
preference to holders of Common Stock. The Series A Preferred Stock will be
senior as to dividends to any series of the Company's stock.
WARRANTS
In April 1998, the Company granted to each of the seven parties listed
below a three year warrant to purchase shares of the Company's Common Stock. The
options have an aggregate exercise price of $2,584,062.50, or $2.50 per share.
13
<PAGE>
SUBSCRIBER # OF SHARES
- ---------------------------- -----------
Mirkin & Woolf, PA 413,450
John Odwazny 220,000
Michael Cristoforo 220,000
Matthew L. Jones 100,000
Bill Elliott and Mark Howard 50,000
Swapan Bizwah 25,000
Gurdip Singh 25,000
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The By-Laws of the Company provide that the Company shall indemnify its
directors, officers under certain circumstances, to the fullest extent permitted
by law.
ITEM 13. FINANCIAL STATEMENTS
Please refer to the Financial Statements and the index thereto which
appear on pages F-1 to F-8 hereof.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS
DESCRIPTION OF EXHIBITS
2.1 Articles of Incorporation
2.2 Bylaws
2.3 Consulting Agreements (4)
2.4 Form of Common Stock Certificate
2.5 Form of Common Stock Purchase Warrant
2.6 Option to Purchase Assets and License Agreement
2.7 Patent
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
ULTRASTRIP SYSTEMS INC.
a Florida corporation
By: /s/ DENNIS E. MCGURIE
Dennis E. McGuire
Dated March 25, 1999 President and Chairman of the Board
14
<PAGE>
ULTRASTRIP SYSTEMS INC.
INDEX TO FINANCIAL STATEMENTS
Reports of Independent Auditors F-1
Balance Sheet as of December 31, 1998 F-2
Statement of Change in Stockholders' Equity
for the Period April 2 to December 31, 1998 F-3
Statement of Cash Flows for the Period
April 2 to December, 1998 F-4
Notes to Financial Statements - December 31, 1998 F-5
15
<PAGE>
BARRY I. HECHTMAN, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF
FLORIDA AND AMERICAN
INSTITUTE OF CPAS
8100 SW 81 DRIVE TELEPHONE: (305) 270-0014
SUITE 210 FAX: (305) 598-3695
MIAMI FLORIDA, 33143-6603 EMAIL: [email protected]
March 19, 1998
To the Board of Directors of
Ultrastrip Systems Inc.
P.O. Box 2173
Stuart, FL 34995
We have audited the accompanying balance sheet of Ultrastrip Systems Inc.
as of December 31, 1998 and the related statements of changes in
stockholders' equity and of cash flows for the period of April 2, 1998
(date of inception) to December 31, 1998. These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance whether the financial statements are free from
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Ultrastrip Systems Inc.
as of December 31, 1998, and the results of its cash flows for the period
of April 2, 1998 (date of inception) to December 31, 1998 in conformity
with generally accepted accounting principles.
/s/ BARRY I. HECHTMAN, P.A.
Barry I. Hechtman, P.A.
F-1
<PAGE>
ULTRASTRIP SYSTEMS INC.
BALANCE SHEET
DECEMBER 31, 1998
ASSETS
CURRENT ASSETS
Cash in Bank $24,384
Escrow Receivable 116,184
Prepaid Expenses 1,000
------------
TOTAL CURRENT ASSETS $141,568
PROPERTY AND EQUIPMENT
Furniture & Fixtures 770
Machinery 275,748
Office Equipment 21,874
------------
TOTAL ASSETS AT COST 298,392
OTHER ASSETS:
Start-up Costs 517,314
------------
TOTAL OTHER ASSETS 517,314
------------
TOTAL ASSETS $957,274
============
LIABILITIES AND
STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts Payable - Trade $6,020
Payroll Taxes Payable 15,601
------------
TOTAL LIABILITIES $21,621
STOCKHOLDERS' EQUITY Common Stock-$0.01 par value.
10,000,000 shares authorized.
9,224,495 shares issued
and outstanding. 92,245
Paid in Capital Surplus 843,408
------------
TOTAL STOCKHOLDERS' EQUITY 935,653
------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $957,274
============
See Accompanying Notes and Accountants' Report
Barry I. Hechtman, P.A.
F-2
<PAGE>
ULTRASTRIP SYSTEMS, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD OF APRIL 2, 1998 (DATE OF INCEPTION) TO DECEMBER 31, 1998
COMMON STOCK ADDITIONAL
---------------------- PAID-IN
SHARES AMOUNT CAPITAL
------ ------ -------
Restricted, Unregistered Common
Stock Issued for Cash 883,967 $ 8,840 $ 653,321
Restricted, Unregistered Common
Stock Issued for Services 8,264,188 82,642 -
Unrestricted, Unregistered Common
Stock Issued for Cash 76,340 763 190,087
------------ ------------ ------------
BALANCE AT DECEMBER 31, 1998 9,224,495 $ 92,245 $ 843,408
============ ============ ============
See Accompanying Notes and Accountants' Report
Barry I. Hechtman, P.A.
F-3
<PAGE>
ULTRASTRIP SYSTEMS, INC.
STATEMENT OF CASH FLOWS
FOR THE PERIOD OF APRIL 2, 1998 (DATE OF INCEPTION) TO DECEMBER 31, 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $0
ADJUSTMENTS:
Increase (Decrease) in Accounts Payable 6,020
Increase (Decrease) in Payroll Taxes Payable 15,601
Decrease (Increase) in Escrow Receivable (116,184)
Decrease (Increase) in Prepaid Expenses (1,000)
Decrease (Increase) in Start-up Costs (434,672)
-----------
NET CASH UTILIZED BY OPERATING ACTIVITIES (530,235)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Property, Plant & Equipment (298,392)
----------
NET CASH UTILIZED BY INVESTING ACTIVITIES (298,392)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of Common Stock 853,011
----------
NET CASH PROVIDED FROM FINANCING ACTIVITIES 853,011
-----------
NET INCREASE IN CASH 24,384
CASH & CERTIFICATES OF DEPOSITS BALANCE AT
APRIL 2, 1998 0
-----------
CASH & CERTIFICATES OF DEPOSITS BALANCE AT
DECEMBER 31, 1998 24,384
===========
See Accompanying Notes and Accountants' Report
Barry I. Hechtman, P.A.
F-4
<PAGE>
ULTRASTRIP SYSTEMS INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
This summary of significant accounting policies of Ultrastrip Systems Inc.
is presented to assist in understanding the Company's financial statements.
The financial statements and notes are representations of the Company's
management, who is responsible for their integrity and objectivity. These
accounting policies conform to generally accepted accounting principles and
have been consistently applied in the preparation of the financial
statements.
COMPANY'S ACTIVITIES AND OPERATING CYCLE
Ultrastrip Systems Inc. (the "Company") was incorporated under the
laws of the State of Florida on April 2, 1998.
The Company is currently in the "start-up" phase of operations, which
involves the acquisition of the equipment and capital to engage in
operations. The Company is an exclusive manufacturer and distributor of a
patented robotic high pressure waterjetting system for use in the heavy
marine and petroleum industries. The Company intends to supply robotic
hydroblasting contract services to shipyard and petroleum industry
customers. The equipment will also be made available for sale to customers
in these industries.
BASIS OF ACCOUNTING
The accompanying financial statements have been prepared on the accrual
method of accounting.
CASH AND CASH EQUIVALENTS
The Company considers cash and all highly liquid investments purchased with
an original or remaining maturity of less than three months at the date of
purchase to be cash equivalents.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Carrying amounts of certain of the Company's financial instruments
including cash and cash equivalents, accounts receivable, notes receivable,
and accrued liabilities approximate fair value because of their short
maturities.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these
estimates.
F-5
<PAGE>
PROPERTY AND EQUIPMENT
Property, plant and equipment are recorded at cost. Since the Company is
not ready to commence operations, depreciation will not be accrued until
the equipment is ready to be placed in service (See NOTE 3 - PROPERTY AND
EQUIPMENT).
INTANGIBLE ASSETS
Intangible assets will be amortized using the straight-line method over
estimated useful lives as follows once the Company begins operations:
Start-up expenses 5 years
INCOME TAXES
Since the Company is in the "start-up" phase of operations, all expenses
are being capitalized in order to match them against revenues in future
periods. When operations commence, the Company will amortize these expenses
over the next 5 years in accordance with Section 195 of the Internal
Revenue Code. Accordingly, a provision for Income Taxes has not been
accrued.
NOTE 2 - ESCROW(s) RECEIVABLE
Escrow(s) receivable consists of funds received from the sale of
restricted, unregistered stock still held in an attorney's escrow account
($51,184) and other deposits held in escrow which are due to be released by
the end of February ($65,000).
NOTE 3 - PROPERTY AND EQUIPMENT
The Company's first robotic unit for surface preparation has been
completed. The second unit is currently under construction and is scheduled
to be completed by March 8, 1999.
F-6
<PAGE>
NOTE 4 - START-UP COSTS
Start-up costs consist of expenses that management has elected to treat in
a manner similar to prepaid expenses in order to match these expenses with
the revenues that will be generated by them in later periods. Also included
in start-up costs is stock transferred to individuals affiliated with the
company as compensation for various legal, consulting and marketing
services (See NOTE 6 for further details).
Expenses that have been so categorized may be broken down as follows:
Advertising $36,199
Bank Charges 148
Charitable Donations 105
Consulting 5,150
Consulting-Related Party 156,065
Insurance 1,254
Internet Access 216
Legal & Professional 53,087
Licenses & Permits 9
Meals & Entertainment 10,740
Office Expense 10,466
Postage & Delivery 443
Printing & Stationery 3,277
Salaries - Officer 101,970
Seminar 5,921
Supplies 180
Taxes - Payroll 10,131
Travel 24,254
Telephone 4,701
Miscellaneous 10,356
Stock in exchange for Services 82,642
----------
Total Start-Up Costs $517,314
==========
NOTE 5 - COMMON STOCK TRANSACTIONS
During the period of April 2, 1998 (date of inception) to December 31,
1998, the Company issued 8,264,188 shares of restricted, unregistered
common stock to various shareholders and unrelated individuals for various
legal, consulting and marketing services. These issuances were valued at
approximately $82,642, which equals the stock's par value of $0.01 and
management's' estimate of the fair market value of the services provided.
The value of these issuances are reflected as a component of start-up costs
in the accompanying balance sheet.
During the period of April 2, 1998 (date of inception) to December 31,
1998, the Company conducted a private placement offering and sold 76,340
shares of unrestricted, unregistered common stock, for $2.50 per share.
Total proceeds received related to the offering were $190,850.
During the period of April 2, 1998 (date of inception) to December 31,
1998, the Company conducted a private placement offering and sold 883,967
shares of restricted, unregistered common stock. Total proceeds received
related to the offering were approximately $662,161.
Expenses related to the offerings were $6,152.
F-7
<PAGE>
NOTE 6 - RELATED PARTY TRANSACTIONS
COMPENSATION ARRANGEMENTS
The Company has entered into contracts with shareholders to provide
services for the corporation. Amounts paid under these contracts to date
and included as a component of start-up costs on the accompanying balance
sheet total $258,035 (consulting $156,065 and officer salaries $101,970).
Summaries of these contracts are as follows:
CONTRACT # 1 - OFFICER SALARY - The Company will pay the representative a
weekly sum of $2,500 through 12/31/98 which will be increased to $5,000
from 1/1/99 through 12/31/99. The representative will also receive a 2%
commission on any sales directly generated by the representative.
CONTRACT #2 - The Company will pay the representative a weekly sum of
$1,500 through 12/31/98 which will be increased to $2,000 from 1/1/99
through 12/31/99. The representative will also receive a 2% commission on
any sales directly generated by the representative.
CONTRACT #3 - The Company will pay the representative a weekly sum of $500
through 12/31/98. The representative will also receive a 2% commission on
any sales directly generated by the representative.
CONTRACT #4 - The Company will pay the representative a weekly sum of
$2,000 through 12/31/98. The representative will also receive a 2%
commission on any sales directly generated by the representative.
ROYALTY AGREEMENTS
The Company has entered into an option to purchase assets and licensing
agreement with a related corporation concerning the use and ownership of
U.S. Patent No. 5,628,271 issued on May 13, 1997 entitled Apparatus and
Method for Removing Coatings from the Hulls of Vessels using Ultra-high
Pressure Water (the "Patent"). Under the terms of the agreement, the
Company must pay $50,000 for each robotic unit produced. After payments of
$2,000,000 have been made to the related corporation for the production of
units, the Company has the option to buy the patent for an additional
$2,000,000. This purchase option expires June 18, 2018. If this option
should not be exercised, the Company still has the obligation to pay
royalty fees on each unit produced until the expiration of the agreement
(June 18, 2018).
F-8
EXHIBIT 2.1
ARTICLES OF INCORPORATION
OF
ULTRASTRIP SYSTEMS INC.
The undersigned subscriber to these Articles of Incorporation, a natural
person competent to contract, hereby forms a corporation under the laws of the
State of Florida.
ARTICLE I. NAME
The name of the Corporation shall be Ultrastrip Systems Inc. The principal
place of business shall be c/o Mirkin & Woolf, P.A., 1700 Palm Beach Lakes Blvd.
#580, West Palm Beach, Florida 33401.
ARTICLE II. NATURE OF BUSINESS
The Corporation may engage in or transact all lawful activities or
businesses permitted under the laws of the United States, the State of Florida,
or any other state, country, territory or nation.
ARTICLE III. CAPITAL STOCK
The total number of shares of capital stock of all classes which the
Corporation shall have authority to issue is ten million (10,000,000) shares of
common stock, $0.01 par value per share.
ARTICLE IV. ADDRESS
The street address of the initial registered office of the Corporation
shall be c/o Mirkin & Woolf, P.A., 1700 Palm Beach Lakes Blvd. #580, West
Palm Beach, Florida 33401 and
______________________________
Mark H. Mirkin, Esq.
Florida Bar No. 0464694
Mirkin & Woolf, P.A.
1700 Palm Beach Lakes Blvd. #580
West Palm Beach, FL 33401
Phone No. 561-687-4460
<PAGE>
the name of the initial registered agent of the Corporation at that address
is Mark H. Mirkin, Esq.
ARTICLE V. TERM OF EXISTENCE
The Corporation shall exist perpetually.
ARTICLE VI. DIRECTORS
The Corporation shall have one (1) director initially. The name and
address of the initial member of the Board of Directors are Dennis E.
McGuire, c/o Mirkin & Woolf, P.A., 1700 Palm Beach Lakes Blvd. #580, West
Palm Beach, Florida 33401.
ARTICLE VII. INCORPORATOR
The name and address of the incorporator to these Articles of
Incorporation are Mark H. Mirkin, Esq., 1700 Palm Beach Lakes Blvd. #580,
West Palm Beach, Florida 33401.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal on
this 2nd day of April, 1998.
s/ MARK H. MIRKIN
Mark H. Mirkin, Esq.
_____________________________
Mark H. Mirkin, Esq.
Florida Bar No. 0464694
Mirkin & Woolf, P.A.
1700 Palm Beach Lakes Blvd. #580
West Palm Beach, FL 33401
Phone No. 561-687-4460
-2-
<PAGE>
CERTIFICATE DESIGNATING PLACE OF BUSINESS
OR DOMICILE FOR THE SERVICE OF PROCESS
WITHIN THIS STATE, NAMING AGENT UPON WHOM
PROCESS MAY BE SERVED
The following is submitted in accordance with the requirements of Chapter
48.091, Florida Statutes:
ULTRASTRIP SYSTEMS INC., desiring to organize under the laws of the State
of Florida with its registered office address, as indicated in the Articles of
Incorporation, as c/o Mirkin & Woolf, P.A., 1700 Palm Beach Lakes Blvd. #580,
West Palm Beach, Florida 33401, has named MARK H. MIRKIN, ESQ. as its agent to
accept service of process within this State.
ACKNOWLEDGEMENT
Having been named to accept service of process for the above-stated
Corporation at the place designated in this Certificate, I hereby accept to act
in this capacity and agree to comply with the provisions of Chapter 48.091,
F.S., relative to keeping open said office.
s/ MARK H. MIRKIN
Mark H. Mirkin, Esq.
______________________________
Mark H. Mirkin, Esq.
Florida Bar No. 0464694
Mirkin & Woolf, P.A.
1700 Palm Beach Lakes Blvd. #580
West Palm Beach, FL 33401
Phone No. 561-687-4460
-3-
EXHIBIT 2.2
BYLAWS
Of
ULTRASTRIP SYSTEMS INC.
Adopted
APRIL 3, 1998
<PAGE>
TABLE OF CONTENTS
ARTICLE I. OFFICES
1.01 Principal and Business Offices 1
1.02 Registered Office 1
ARTILES II. SHAREHOLDERS
2.01 Annual Meeting 1
2.02 Special Meeting 1
2.03 Place of Meeting 1
2.04 Notice of Meeting 2
2.05 Closing of Transfer Books or Fixing
of Record Date 2
2.06 Voting Records 2
2.07 Quorum 3
2.08 Conduct of Meeting 3
2.09 Proxies 3
2.10 Voting of Shares 4
2.11 Voting of Shares by Certain Holders 4
(a) Other Corporations 4
(b) Legal Representatives and Fiduciaries 4
(c) Reciever 4
(d) Pledgees 4
(e) Subsidiaries 4
ARTICLE III. BOARD OF DIRECTORS
3.01 General Powers and Numbers 5
3.02 Tenure and Qualifications 5
3.03 Regular Meetings 5
3.04 Special Meetings 5
3.05 Notice of Meetings 5
3.06 Quorum 6
3.07 Manner of Acting 6
3.08 Conduct of Meetings 6
3.09 Vacancies 6
3.10 Compensation 6
3.11 Presumption of Assent 7
3.12 Committees 7
ARTICLE IV. OFFICERS
4.01 Number 7
4.02 Election and Term of Office 8
4.03 Removal 8
4.04 Vacancies 8
4.05 President 8
4.06 Vice Presidents 9
4.07 Secretary 9
i
<PAGE>
TABLE OF CONTENTS (Cont.)
ARTICLE IV. OFFICERS
4.08 Treasurer 9
4.09 Assistant Secretaries and Assistant Treasurers 10
4.10 Other Assistants and Acting Officers 10
4.11 Salaries 10
ARTICLE V. CONTRACTS, LOANS, CHECK AND DEPOSITS
5.01 Contracts 10
5.02 Loans 11
5.03 Checks, Drafts, etc. 11
5.04 Deposits 11
5.05 Voting of Securities Owned by this Corporation 11
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.01 Certificate for Sahres 12
6.02 Facsimile Signatures and Seal 12
6.03 Transfer of Shares 12
6.04 Restrictions on Transfer 12
6.05 Lost, Destroyed or Stolen Certificates 12
6.06 Consideration for Shares 13
6.07 Stock Regulations 13
ARTICLE VII. WAIVER OF NOTICE
ARTICLE VIII. CONSENT WITHOUT A MEETING
ARTICLE IX. INDEMNIFICATION
ARTICLE X. SEAL
ARTICLE XI. FISCAL YEAR
ARTICLE XII. AMENDMENTS
12.01 By Shareholders 14
12.02 By Directors 14
12.03 Implied Amendments 14
ii
<PAGE>
ARTICLE I. OFFICES
1.01. PRINCIPAL AND BUSINESS OFFICES. The corporation may have such
principal and other business offices, either within or outside the State of
Florida, as the Board of Directors may designate or as the business of the
corporation may require from time to time.
1.02. REGISTERED OFFICE. The registered office of the corporation
required by the Florida Business Corporation Act to be maintained in the State
of Florida may be, but need not be, identical with the principal office in the
State of Florida. The address of the registered office may be changed from time
to time by the Board of Directors or, if within the county, by the registered
agent. The business office of the registered agent of the corporation shall be
identical to such registered office.
ARTICLE II. SHAREHOLDERS
2.01. ANNUAL MEETING. The annual meeting of the shareholders shall
be held the last Wednesday of March in each year at 9:00 o'clock a.m., or at
such other time and date as may be fixed by or under the authority of the Board
of Directors, for the purpose of electing directors and for the transaction of
such other business as may come before the meeting. If the day fixed for the
annual meeting shall be a legal holiday in the State of Florida, such meeting
shall be held on the next succeeding business day. If the election of directors
shall not be held on the day designated herein, or fixed as herein provided, for
any annual meeting of the shareholders, or at any adjournment thereof, the Board
of Directors shall cause the election to be held at a special meeting of the
shareholders as soon thereafter as convenient.
2.02. SPECIAL MEETING. Special meetings of the shareholders, for any
purpose or purposes, unless otherwise prescribed by statute, may be called by
the President or the Board of Directors or by the person designated in the
written request of the holders of not less than one-tenth of all shares of the
corporation entitled to vote at the meeting.
2.03. PLACE OF MEETING. The Board of Directors may designate any
place either within or outside the State of Florida as the place of meeting for
any annual meeting or for any special meeting called by the Board of Directors.
A waiver of notice signed by all shareholders entitled to vote at a meeting may
designate any place, whether within or outside the State of Florida, as the
place for the holding of such meeting. If no designation is made, or if a
special meeting be otherwise called, the place of meeting shall be the principal
business office of the corporation in the State of Florida or such other
suitable place in the county of such principal office as may be designated by
the person calling such meeting, but any meeting may be adjourned to reconvene
at any place designated by vote of a majority of the
<PAGE>
shares represented thereat.
2.04. NOTICE OF MEETING. Written notice stating the place, day and
hour of the meeting and, in case of a special meeting, the purpose or purposes
for which the meeting is called, shall be delivered not less than ten (10) days
(unless a longer period is required by law) nor more than thirty (30) days
before the date of the meeting, either personally or by mail, by or at the
direction of the President, the Secretary, or the person(s) calling the meeting,
to each shareholder of record entitled to vote at such meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mail,
addressed to the shareholder at his or her address as it appears on the stock
record books of the corporation, with postage thereon prepaid.
2.05. CLOSING OF TRANSFER BOOK OR FIXING OF RECORD DATE. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders, or any adjournment thereof, or shareholders entitled to
receive payment of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of Directors may provide
that the stock transfer books shall be closed for a stated period but not to
exceed, in any case, thirty (30) days. If the stock transfer books shall be
closed for the purpose of determining shareholders entitled to notice of or to
vote at a meeting of shareholders, such books shall be closed for at least ten
(10) days immediately preceding such meeting. In lieu of closing the stock
transfer books, the Board of Directors may fix in advance a date as the record
date for any such determination of shareholders, such date in any case to be not
more than thirty (30) days and, in case of a meeting of shareholders, not less
than ten (10) days prior to the date on which the particular action requiring
such determination of shareholders is to be taken. If the stock transfer books
are not closed and no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of a dividend, the close of business on the date on
which notice of the meeting is mailed or on the date on which the resolution of
the Board of Directors declaring such dividend is adopted, as the case may be,
shall be the record date for such determination of shareholders. When a
determination of shareholders entitled to vote at any meeting of shareholders
has been made as provided in this section, such determination shall be applied
to any adjournment thereof except where the determination has been made through
the closing of the stock transfer books and the stated period of closing has
expired.
2.06. VOTING RECORDS. In the event the corporation issues its stock
to more than six (6) shareholders Section 607.0901 of the Florida Business
Corporation Act dealing with affiliated transactions and control-share
acquisitions shall apply.
-2-
<PAGE>
2.07. QUORUM. Except as otherwise provided in the articles of
incorporation, a majority of the shares entitled to vote, represented in person
or by proxy, shall constitute a quorum at a meeting of shareholders but in no
event shall a quorum consist of less than one-third of the shares entitled to
vote at the meeting. When a specified item of business is required to be voted
on by a class or series of stock, a majority of the shares of such class or
series shall constitute a quorum for the transaction of such item of business by
that class or series. If a quorum is present, the affirmative vote of the
majority of the shares represented at the meeting and entitled to vote on the
subject matter shall be the act of the shareholders unless the vote of a greater
number or voting by classes is required by the Florida Business Corporation Act
or the articles of incorporation. If less than a quorum is represented at a
meeting, a majority of the shares so represented may adjourn the meeting from
time to time without further notice. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which might have
been transacted at the meeting as originally noticed. The shareholders present
at a duly organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum.
2.08. CONDUCT OF MEETINQS. The President, or in the President's
absence, a Vice President in the order provided under Section 4.06, and in their
absence, any person chosen by the shareholders present shall call the meeting of
the shareholders to order and shall act as chairman of the meeting, and the
Secretary shall act as secretary of all meetings of the shareholders, but, in
the absence of the Secretary, the presiding officer may appoint any other person
to act as secretary of the meeting.
2.09. PROXIES. At all meetings of shareholders, a shareholder
entitled to vote may vote in person or by proxy appointed in writing by the
shareholder or by his duly authorized attorney-in-fact. Such proxy shall be
filed with the Secretary before or at the time of the meeting. Unless otherwise
provided in the proxy or Section 607.101 of the Florida Business Corporation
Act, a proxy may be revoked at any time before it is voted, either by written
notice filed with the Secretary or the acting secretary of the meeting or by
oral notice given by the shareholder to the presiding officer during the
meeting. The presence of a shareholder who has filed a proxy shall not of itself
constitute a revocation. No proxy shall be valid after eleven (11) months from
the date of its execution, unless otherwise provided in the proxy. The Board of
Directors shall have the power and authority to make rules as to the validity
and sufficiency of proxies.
2.10. VOTING OF Shares. Each outstanding share shall be entitled
to one vote on each matter submitted to a vote at a
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meeting of shareholders, except to the extent that the voting rights of the
shares of any class or classes are enlarged, limited or denied by the articles
of incorporation.
2.11. VOTING OF SHARES BY CERTAIN HOLDERS.
(a) OTHER CORPORATIONS. Shares standing in the name of another
corporation, domestic or foreign, may be voted either in person or by proxy by
the president of such corporation or any other officer appointed by such
president. A proxy executed by any principal officer of such other corporation
or assistant thereto shall be conclusive evidence of the signer's authority to
act, in the absence of express notice to this corporation, given in writing to
the Secretary of this corporation, of the designation of some other person by
the Board of Directors or the bylaws of such other corporation.
(b) LEGAL REPRESENTATIVES AND FIDUCIARIES. Shares held by an adminis-
trator, executor, guardian, conservator or assignee for creditors may be voted
by such person, either in person or by proxy. Shares standing in the name of a
trustee may be voted by him or her, either in person or by proxy, but no trustee
shall be entitled to vote shares held by him or her without a transfer of such
shares into his or her name. Shares standing in the name of a fiduciary may be
voted by him or her, either in person or by proxy. A proxy executed by a
fiduciary shall be conclusive evidence of the signer's authority to act in the
absence of express notice given in writing to the Secretary that such manner of
voting is prohibited or otherwise directed by the document creating the
fiduciary relationship.
(c) RECEIVER. Shares standing in the name of a receiver may be voted by
such receiver, and shares held by or under the control of a receiver may be
voted by such receiver without the transfer thereof into his or her name if
authority to do so is contained in an appropriate court order pursuant to which
such receiver was appointed.
(d) PLEDGEES. A shareholder whose shares are pledged shall be entitled to
vote such shares in person or by proxy, until the shares have been transferred
into the name of the pledgee, and thereafter the pledgee or his or her nominee
shall be entitled to vote the shares so transferred.
(e) SUBSIDIARIES. Neither shares of the corporation's stock owned by
another corporation, the majority of the voting stock of which is owned or
controlled by it, nor shares of its own stock held by another corporation in a
fiduciary capacity shall be voted, directly or indirectly, at any meeting; and
such shares shall not be counted in determining the total number of outstanding
shares at any given time.
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ARTICLE III. BOARD OF DIRECTORS
3.01. GENERAL POWERS AND NUMBER. The business and affairs of the
corporation shall be managed by its Board of Directors. The number of directors
of the corporation initially shall be a minimum of one (1) but may be increased
to not more than nine (9) without amendment. The number of directors may be
increased or decreased from time to time by amendment to this Section adopted by
the shareholders or the Board of Directors but no decrease shall have the effect
of shortening the term of an incumbent director.
3.02. TENURE AND OUALIFICATIONS. Each director shall hold office
until the next annual meeting of shareholders and until the director's successor
shall have been elected, or until his or her prior death, resignation or
removal. Any director or the entire Board of Directors may be removed from
office, with or without cause, by affirmative vote of a majority of the
outstanding shares entitled to vote for the election of such director, or the
Board of Directors. A director may resign at any time by filing a written
resignation with the Secretary of the corporation. Directors need not be
residents of the State of Florida or shareholders of the corporation.
3.03. REGULAR MEETINGS. A regular meeting of the Board of Directors
shall be held, without other notice than this bylaw, immediately after the
annual meeting of shareholders, and each adjourned session thereof. The place of
such regular meeting shall be the same as the place of the meeting of
shareholders which precedes it, or such other suitable place as may be announced
at such meeting of shareholders. The Board of Directors may provide, by
resolution, the time and place, either within or outside the State of Florida,
for the holding of additional regular meetings without other notice than such
resolution.
3.04. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called by or at the request of the President or any two directors. The
persons calling any special meeting of the Board of Directors may fix any place,
either within or outside the State of Florida, as the place for holding any
special meeting of the Board of Directors called by them, and if no other place
is fixed the place of meeting shall be the principal business office of the
corporation in the State of Florida. Special meetings may be held by means of a
telephone conference circuit and connecting to such circuit shall constitute
presence at such meeting.
3.05. NOTICE OF MEETINGS. Notice of each meeting of the Board of
Directors (unless otherwise provided in or pursuant to Section 3.03) shall be
given by written notice delivered personally or mailed or given by telephone or
telegram to each director at his or her business or home address or at such
other ad-
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dress as such director shall have designated in writing filed with the
Secretary, in each case not less than 48 hours prior thereto. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mail
so addressed, with postage thereon prepaid. If notice be given by telegram, such
notice shall be deemed to be delivered when the telegram is delivered to the
telegraph company; if by telephone, at the time the call is completed. The
attendance of a director at a meeting shall constitute a waiver of notice of
such meeting, except where a director attends a meeting and objects thereat to
the transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting.
3.06. QUORUM. A majority of the number of directors as provided in
Section 3.01 shall constitute a quorum for the transaction of business at any
meeting of the Board of Directors, but a majority of the directors present
(though less than such quorum) may adjourn the meeting from time to time without
further notice.
3.07. MANNER OF ACTING. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors, unless the act of a greater number is required by the Florida
Business Corporation Act, the corporation's articles of incorporation or these
bylaws.
3.08. CONDUCT OF MEETINGS. The President, and in the President's
absence, a Vice President in the order provided under Section 4.06, and in their
absence, any director chosen by the directors present, shall call meetings of
the Board of Directors to order and shall chair the meeting. The Secretary of
the corporation shall act as secretary of all meetings of the Board of
Directors, but in the absence of the Secretary, the presiding officer may
appoint any assistant secretary or any director or other person present to act
as secretary of the meeting.
3.09. VACANCIES. Any vacancy occurring in the Board of Directors,
including a vacancy created by an increase in the number of directors, may be
filled until the next succeeding annual election by the affirmative vote of a
majority of the directors then in office, though less than a quorum of the Board
of Directors, provided that in case of a vacancy created by removal of a
director(s), the shareholders shall have the right to fill such vacancy at the
same meeting or any adjournment thereof.
3.10. COMPENSATION. The Board of Directors, by affirmative vote of a
majority of the directors then in office, and irrespective of any personal
interest of any of its members, may establish reasonable compensation of all
directors for services to the corporation as directors, officers or otherwise,
and the
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manner and time of payment thereof, or may delegate such authority to an
appropriate committee. The Board of Directors also shall have authority to
provide for or to delegate authority to an appropriate committee to provide for
reasonable pensions, disability or death benefits, and other benefits or
payments, to directors, officers and employees and to their estates, families,
dependents or beneficiaries on account of prior services rendered by such
directors, officers and employees to the corporation.
3.11. PRESUMPTION OF ASSENT. A director who is present at a meeting
of the Board of Directors or a committee thereof of which he is a member at
which action on any corporate matter is taken shall be presumed to have assented
to the action taken unless his dissent shall be entered in the minutes of the
meeting or unless he shall file his written dissent to such action with the
person acting as the secretary of the meeting before the adjournment thereof or
shall forward such dissent by registered mail to the Secretary of the
corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a director who voted in favor of such action.
3.12. COMMITTEES. The Board of Directors, by resolution adopted by
the affirmative vote of a majority of the number of directors as provided in
Section 3.01, may designate one or more committees, each committee to consist of
three or more directors elected by the Board of Directors, which to the extent
provided in said resolution as initially adopted, and as thereafter supplemented
or amended by further resolution adopted by a like vote, shall have and may
exercise, when the Board of Directors is not in session, the powers of the Board
of Directors in the management of the business and affairs of the corporation,
except action in respect to dividends to shareholders, election of the principal
officers or the filling of vacancies on the Board of Directors or committees
created pursuant to this Section. The Board of Directors may elect one or more
of its members as alternate members of any such committee who may take the place
of any absent member or members at any meeting of such committee, upon request
by the President or upon request by the chairman of such meeting. Each such
committee shall fix its own rules governing the conduct of its activities and
shall make such reports to the Board of Directors of its activities as the Board
of Directors may request.
ARTICLE IV. OFFICERS
4.01. NUMBER. The principal officers shall be a President, one or
more Vice Presidents (the number and designations to be determined by the Board
of Directors), a Secretary and a Treasurer, each of whom shall be elected by the
Board of Directors; the Board of Directors may elect a chairman who if so
elected shall be a principal officer. Any two or more offices may be held by the
same person. The Board of Directors may designate
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one of the Vice Presidents as the Executive Vice President. Such other officers
and assistant officers as may be deemed necessary may be elected or appointed by
the Board of Directors or the President.
4.02. ELECTION AND TERM OF OFFICE. The officers to be elected by the
Board of Directors shall be elected annually by the Board of Directors at the
first meeting of the Board of Directors held after each annual meeting of the
shareholders. If the election of officers shall not be held at such meeting,
such election shall be held as soon thereafter as conveniently may be. Each
officer shall hold office until his successor shall have been duly elected or
until his prior death, resignation or removal.
4.03. REMOVAL. Any officer or agent may be removed by the Board of
Directors whenever in its judgment the best interests of the corporation will be
served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Election or appointment shall not of
itself create contract rights.
4.04. VACANCIES. A vacancy in any principal office because of death,
resignation, removal, disqualification or otherwise, shall be filled by the
Board of Directors for the unexpired portion of the term.
4.05. PRESIDENT. The President shall be the principal executive
officer and, subject to the control of the Board of Directors, shall in general
supervise and control all of the business and affairs of the corporation. He or
she shall preside at all meetings of the shareholders and of the Board of
Directors. The President shall have authority, subject to such rules as may be
prescribed by the Board of Directors, to appoint such agents and employees of
the corporation as he or she shall deem necessary, to prescribe their powers,
duties and compensation, and to delegate authority to them. Such agents and
employees shall hold office at the discretion of the President. The President
shall have authority to sign, execute and acknowledge, on behalf of the
corporation, all deeds, mortgages, bonds, stock certificates, contracts, leases,
reports and all other documents or instruments necessary or proper to be
executed in the course of the corporation's regular business, or which shall be
authorized by resolution of the Board of Directors; and, except as otherwise
provided by law or the Board of Directors, the President may authorize any Vice
President or other officer or agent of the corporation to sign, execute and
acknowledge such documents or instruments in his or her place and stead. In
general he shall perform all duties incident to the office of President and such
other duties as may be prescribed by the Board of Directors from time to time.
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4.06. VICE PRESIDENTS. In the absence of the President, or in the
event of the President's death, inability or refusal to act, or in the event
for any reason it shall be impracticable for the President to act personally,
the Vice President (or in the event there be more than one Vice President, the
Vice Presidents in the order designated by the Board of Directors, or in the
absence of any designation, then in the order of their election) shall perform
the duties of the President, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the President. Any Vice President
may sign, with the Secretary or Assistant Secretary, certificates for shares
of the corporation, and shall perform such other duties and have such
authority as from time to time may be delegated or assigned to him or her by
the President or the Board of Directors. The execution of any instrument of
the corporation by any Vice President shall be conclusive evidence, as to
third parties, of the Vice President's authority to act in the stead of the
President.
4.07. SECRETARY. The Secretary shall: (a) keep the minutes of the
meetings of the shareholders and of the Board of Directors in one or more
books provided for that purpose; (b) see that all notices are duly given in
accordance with the provisions of these bylaws or as required by law; (c) be
custodian of the corporate records and of the seal of the corporation, if any,
and see that the seal of the corporation, if any, is affixed to all documents
which are authorized to be executed on behalf of the corporation under its
seal; (d) keep or arrange for the keeping of a register of the post office
address of each shareholder which shall be furnished to the Secretary by such
shareholder; (e) sign with the President, or a Vice President, certificates
for shares of the corporation, the issuance of which shall have been
authorized by resolution of the Board of Directors; (f) have general charge of
the stock transfer books of the corporation; and (g) in general perform all
duties incident to the office of Secretary and have such other duties and
exercise such authority as from time to time may be delegated or assigned to
him or her by the President or by the Board of Directors.
4.08. TREASURER. The Treasurer shall: (a) have charge and custody
of and be responsible for all funds and securities of the corporation; (b)
receive and give receipts for moneys due and payable to the corporation from
any source whatsoever, and deposit all such moneys in the name of the
corporation in such banks, trust companies or other depositories as shall be
selected in accordance with the provisions of Section 5.04; and (c) in general
perform all of the duties incident to the office of Treasurer and have such
other duties and exercise such other authority as from time to time may be
delegated or assigned to him or her by the President or by the Board of
Directors.
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4.09. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. There shall be
such number of Assistant Secretaries and Assistant Treasurers as the Board of
Directors or President from time to time authorizes. The Assistant Secretaries
may sign with the President or a Vice President certificates for shares of the
corporation the issuance of which shall have been authorized by a resolution of
the Board of Directors. The Assistant Secretaries and Assistant Treasurers, in
general, shall perform such duties and have such authority as from time to time
shall be delegated or assigned to them by the Secretary or the Treasurer,
respectively, or by the President or the Board of Directors.
4.10. OTHER ASSISTANTS AND ACTING OFFICERS. The Board of Directors
and the President shall have the power to appoint any person to act as assistant
to any officer, or as agent for the corporation in the officer's stead, or to
perform the duties of such officer whenever for any reason it is impracticable
for such officer to act personally, and such assistant or acting officer or
other agent so appointed by the Board of Directors or President shall have the
power to perform all the duties of the office to which that person is so
appointed to be assistant, or as to which he or she is so appointed to act,
except as such power may be otherwise defined or restricted by the Board of
Directors or President.
4.11. SALARIES. Salaries may be paid to the principal officers of
the corporation at the discretion of the Board of Directors, and if so paid,
shall be fixed from time to time by the Board of Directors or by a duly
authorized committee thereof, and no officer shall be prevented from receiving
such salary by reason of the fact that such officer is also a director of the
corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS
5.01. CONTRACTS. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute or deliver any
instrument in the name of and on behalf of the corporation, and such
authorization may be general or confined to specific instances. No contract or
other transaction between the corporation and one or more of its directors or
any other corporation, firm, association or entity in which one or more of its
directors are directors or officers or are financially interested, shall be
either void or voidable because of such relationship or interest or because such
director or directors are present at the meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such contract or
transaction or because the votes of the interested directors are counted for
such purpose, if (1) the fact of such relationship or interest is disclosed or
known to the Board of Directors or committee which authorizes, approves or
ratifies the contract or transaction by a vote or consent sufficient for the
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purpose without counting the votes or consents of such interested directors; or
(2) the fact of such relationship or interest is disclosed or known to the
shareholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or (3) the contract or
transaction is fair and reasonable to the corporation. Common or interested
directors may be counted in determining the presence of a quorum at a meeting of
the Board of Directors or a committee thereof which authorizes, approves or
ratifies such contract or transaction.
5.02. LOANS. No indebtedness for borrowed money shall be contracted
on behalf of the corporation and no evidences of such indebtedness shall be
issued in its name unless authorized by or under the authority of a resolution
of the Board of Directors. Such authorization may be general or confined to
specific instances.
5.03. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the corporation shall be signed by such officer(s), employees or agents
of the corporation and in such manner as shall from time to time be determined
by or under the authority of a resolution of the Board of Directors.
5.04. DEPOSITS. All funds of the corporation not otherwise employed
shall be deposited from time to time to the credit of the corporation in such
banks, trust companies or other depositories as may be selected by or under the
authority of a resolution of the Board of Directors.
5.05. VOTING OF SECURITIES OWNED BY THIS CORPORATION. Subject always
to the specific directions of the Board of Directors, (a) any shares or other
securities issued by any other corporation and owned or controlled by this
corporation may be voted at any meeting of security holders of such other
corporation by the President of this corporation if he or she is present, or in
the President's absence, by any Vice President of this corporation who may be
present, and (b) whenever, in the judgment of the President, or in the
President's absence, of any Vice President, it is desirable for this corporation
to execute a proxy or written consent with respect to any shares or other
securities issued by any other corporation and owned by this corporation, such
proxy or consent shall be executed in the name of this corporation by the
President or one of the Vice Presidents of this corporation, without necessity
of any authorization by the Board of Directors, affixation of corporate seal or
countersignature or attestation by another officer. Any person or persons
designated in the manner above stated as the proxy or proxies of this
corporation shall have full right, power and authority to vote the shares or
other securities issued by such other corporation and owned by this corporation
the same as such shares or other securities might be voted by this corporation.
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ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFERS
6.01. CERTIFICATE FOR SHARES. Certificates representing shares of
the corporation shall be in such form, consistent with law, as shall be
determined by the Board of Directors. Such certificates shall be signed by the
President. All certificates for shares shall be consecutively numbered or
otherwise identified. The name and address of the person to whom the shares
represented thereby are issued, with the number of shares and the date of issue,
shall be entered on the stock transfer books of the corporation. All
certificates surrendered to the corporation for transfer shall be cancelled and
no new certificate shall be issued until the former certificate for a like
number of shares shall have been surrendered and cancelled, except as provided
in Section 6.05.
6.02. FACSIMILE SIGNATURES AND SEAL. The seal of the corporation, if
the corporation has elected to have a seal, on any certificates for shares may
be a facsimile. The signature of the President upon a certificate may be a
facsimile if the certificate is manually signed on behalf of a transfer agent or
a registrar, other than the corporation itself or an employee of the
corporation.
6.03. TRANSFER OF SHARES. Prior to due presentment of a certificate
for shares for registration of transfer, the corporation may treat the
registered owner of such shares as the person exclusively entitled to vote, to
receive notifications and otherwise to have and exercise all the rights and
powers of an owner. Where a certificate for shares is presented to the
corporation with a request to register for transfer, the corporation shall not
be liable to the owner, or any other person suffering loss as a result of such
registration of transfer if (a) there were on or with the certificate the
necessary endorsements, and (b) the corporation had no duty to inquire into
adverse claims or has discharged any such duty. The corporation may require
reasonable assurance that said endorsements are genuine and effective and in
compliance with such other regulations as may be prescribed by or under the
authority of the Board of Directors.
6.04. RESTRICTIONS ON TRANSFER. The face or reverse side of each
certificate representing shares shall bear a conspicuous notation of any
restriction imposed by the corporation upon the transfer of such shares.
6.05. LOST, DESTROYED OR STOLEN CERTIFICATES. Where the owner claims
that his or her certificate for shares has been lost, destroyed or wrongfully
taken, a new certificate shall be issued in place thereof if the owner (a) so
requests before the corporation has notice that such shares have been acquired
by a bona fide purchaser, and (b) if required by the corporation, files with the
corporation a sufficient indemnity bond, and (c)
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satisfies such other reasonable requirements as may be prescribed by or under
the authority of the Board of Directors.
6.06. CONSIDERATION FOR SHARES. The shares of the corporation may be
issued for such consideration as shall be fixed from time to time by the Board
of Directors, provided that any shares having a par value shall not be issued
for a consideration less than the par value thereof. The consideration to be
paid for shares may be paid in whole or in part, in money, in other property,
tangible or intangible, or in labor or services actually performed for the
corporation. When payment of the consideration for which shares are to be issued
shall have been received by the corporation, such shares shall be deemed to be
fully paid and nonassessable by the corporation. No certificate shall be issued
for any share until such share is fully paid.
6.07. STOCK REGULATIONS. The Board of Directors shall have the power
and authority to make all such rules and regulations not inconsistent with the
statutes of the State of Florida as it may deem expedient concerning the issue,
transfer and registration of certificates representing shares of the
corporation.
ARTICLE VII. WAIVER OF NOTICE
Whenever any notice is required to be given under the provisions of
the Florida Business Corporation Act or under corresponding provisions of the
corporation's articles of incorporation or bylaws, a waiver thereof in writing,
signed at any time, whether before or after the time of the meeting, by the
person or persons entitled to such notice, shall be deemed equivalent to the
giving of such notice. Such waiver by a shareholder in respect of any matter of
which notice is required under any provision of the Florida Business Corporation
Act shall contain the same information as would have been required to be
included in such notice under any applicable provisions of said Law, except that
the time and place of meeting need not be stated.
ARTICLE VIII. CONSENT WITHOUT A MEETING
Any action required by the articles of incorporation or these bylaws
or any provisions of the Florida Business Corporation Act to be taken at a
meeting or any other action which may be taken at a meeting may be taken without
a meeting if a consent in writing setting forth the action so taken shall be
signed by the requisite number of shareholders or directors under law or all of
the members of a committee thereof entitled to vote with respect to the subject
matter thereof and such consent shall have the same force and effect as a vote.
ARTICLE IX. INDEMNIFICATION
The corporation shall indemnify all directors and officers to the
fullest extent now or hereafter permitted by the
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Florida Statues. This bylaw shall not limit the rights of such persons or other
persons to indemnification as provided or permitted as a matter of law, under
the Florida Statutes or otherwise.
ARTICLE X. SEAL
The Board of Directors may provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the corporation
and the state of incorporation and the words "Corporate Seal."
ARTICLE XI. FISCAL YEAR
Except as the Board of Directors may otherwise determine, the fiscal
year of the corporation shall be the year ending on the last day of December of
each year.
ARTICLE XII. AMENDMENTS
12.01. BY SHAREHOLDERS. These bylaws may be altered, amended or
repealed and new bylaws may be adopted by the shareholders by affirmative vote
of not less than a majority of the shares present or represented at an annual or
special meeting of the shareholders at which a quorum is in attendance.
12.02. BY DIRECTORS. These bylaws may also be altered, amended or
repealed and new bylaws may be adopted by the Board of Directors by affirmative
vote of a majority of the number of directors present at any meeting at which a
quorum is in attendance; but no bylaw adopted by the shareholders shall be
amended or repealed by the Board of Directors if the bylaw so adopted so
provides.
12.03. IMPLIED AMENDMENTS. Any action taken or authorized by the
shareholders or by the Board of Directors which would be inconsistent with the
bylaws then in effect but is taken or authorized by affirmative vote of not less
than the number of shares or the number of directors required to amend the
bylaws so that the bylaws would be consistent with such action, shall be given
the same effect as though the bylaws had been temporarily amended or suspended
so far, but only so far, as is necessary to permit the specific action so taken
or authorized.
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EXHIBIT 2.3
CONSULTING AGREEMENT
This Business Consultant's Agreement ("Agreement") is entered into as of
(April 4, 1998) between (Ultrastrip Systems Inc.) a State Of Florida
Corporation, with its principal place of business at P.O. Box 2173 ( Stuart, Fl
34995) ("Client") and (Mike and Jean Cristoforo, a Sole Proprietorship) with its
principal place of business at 3665E SW. Quail Meadow Trail Palm City, Fl 34990,
("Consultant").
GENERAL
The Consultant is engaged in the business of providing start up
management, marketing, and selling services for various businesses considering
becoming a public corporation.
The Client desires to retain the Consultant to obtain individuals and
business entities to purchase it's products, manage it's company, and provide
the necessary services to the Client to become a publicly trading company.
In consideration for the mutual promises, covenants, and Agreements made
below, the parties, intending to be legally bound, agree as follows:
AGREEMENT
1. NON-EXCLUSIVE RIGHT TO SOLICIT
1.1 Subject to the provisions of Section 1.2, the Client grants to the
Consultant the non-exclusive right to solicit individuals and other business
entities on behalf of the Client with promotional, selling and marketing
materials for the Client's products.
1.2 The Consultant reserves the right to solicit those individuals and business
entities defined in Exhibit A attached.
2. TRADEMARKS AND TRADE NAMES. Client reserves all fights to the trade names and
trademarks and to any other commercial symbols that it may adopt or use ftom
time-to-time.
3. INDEPENDENT CONTRACTOR. The Consultant is not an employee of the Client for
any purpose whatsoever, but is an independent contractor, The Client is
interested only in the results obtained by the Consultant, that will have sole
control of the manner and means of performing under this Agreement. The Client
will not have the right to require the Consultant to do anything that would
jeopardize the relationship of independent contractor between the Client and the
Consultant. All expenses and disbursements incurred by the Consultant in
connection with this Agreement will be borne wholly and completely by the
Consultant. The
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Consultant does not have, nor will the Consultant hold itself out as having any
right, power or authority to create any contract or obligation, either express
or implied, on behalf of, or binding upon the Client, unless the Client will
consent to that in writing, The Consultant will have the right to appoint and
will be solely responsible for the Consultant's own solicitation force,
employees, agents and representatives, who will be at the Consultant's own risk,
expense and supervision and will not have any claim against the Client for
compensation or reimbursement. The Consultant may represent other products that
do not compete directly or indirectly with products covered by this Agreement
and may exercise the Consultant's own discretion in obtaining promotional,
selling and marketing services, hiring personnel and otherwise complying with
the terms of this Agreement.
4. ACCEPTANCE. Individuals, partnerships, corporations and other business
entities solicited by the Consultant to provide promotional, selling and
marketing services for the Client will be submitted to and subject to acceptance
by the Client. Only the Client may decide, in its sole discretion, whether to
accept or reject any individual or entity solicited by the Consultant. The
Client's acceptance is expressly conditioned upon such individual or entity
executing an Independent Sales Representative Agreement.
5. COMPENSATION AND COMMISSION. THE CLIENT WILL PAY THE CONSULTANT A FEE EQUAL
TO THE DIFFERENCE BETWEEN 2% OF THE NET AMOUNT OF THE CLIENT'S INVOICES TO
PURCHASERS AS DETERMINED ACCORDING TO EXHIBIT B ATTACHED. ADDITIONALLY, THE
CLIENT WILL PAY TO THE CONSULTANT A WEEKLY DRAW AS OUTLINED IN EXHIBIT B.
Despite anything to the contrary contained in this Agreement, the Client will
reimburse the Consultant for those certain extraordinary travel expenses
incurred by the Consultant and agreed upon by the Client and the Consultant
prior to the Consultant incurring such expenses.
6. BEST EFFORTS. The Consultant will use its best efforts to obtain contracts
for the sale of equipment, contract services, and distributor agreements, for
the Client and to solicit individuals, partnerships, corporations and other
business entities to perform such services for the Client.
7. TERM AND TERMINATION. The term of this Agreement will be for a period of 8
months from the date first written above. At the end of said period, it is the
intent of the parties to re-negotiate this Agreement; however, if a new contract
is not entered into, the Contractor will continue to receive its commissions
pursuant to Exhibit B the Compensation Agreement
8. MISREPRESENTATION. In the event the Consultant, at any time during its
association with the Client, will be guilty of gross negligence, intentional
misconduct or intentional misrepresentation, such negligence, misconduct or
misrepresentation will be deemed an immediate breach of this Agreement. Upon
such breach, or any other breach of this Agreement by the Consultant, this
Agreement will terminate immediately upon written notice by the Client, and the
Consultant will not be entitled to claim any compensation for damages for, in
respect of, or by reason of such termination.
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9. PROPRIETARY INFORMATION. The customers, business, products, technology,
business connections, customer lists, procedures, operations, techniques and
other aspects of the business of the Client are established at great expense and
protected as confidential information and trade secrets and provide the Client
with a substantial competitive advantage of selling its products. The Consultant
will have access to, and be entrusted with, trade secrets, confidential
information and proprietary information, and the Client would suffer great loss
and injury if the Consultant would disclose this information or use it to
compete with the Client. Consequently, the Consultant agrees that during its
relationship with the Client, and from then on, it will not, within the
geographic territory encompassed by the business of the Client at the
termination of that relationship, directly or indirectly, either individually or
as an employee, agent, partner, shareholder, or in any other capacity, use or
disclose, or cause to be used or disclosed, any trade secret, confidential
information or proprietary information acquired by the Consultant during its
relationship with the Client.
10. INDEMNIFICATION. The Consultant agrees to defend, indemnify, and hold the
Client harmless from any and all liabilities, losses, costs, damages, penalties
and any other expenses including attorneys fees arising directlv or indirectly,
either from the Consultant's acts or omissions or the Consultant's breach of any
obligation imposed or sought to be imposed by or according to this Agreement.
The Client will not be liable to the Consultant, or to anyone who may claim any
right due to a relationship with the Consultant, for any acts or omissions by
the Consultant in the performance of this Agreement or on the part of the
employees or agents of the Consultant. The Consultant will indemnify and hold
the Client free and harmless from any obligation, cost claim, judgment,
attorneys, fees, and attachments arising from, growing out of, or in any way
connected with the services rendered to the Client under the terms of this
Agreement.
11. GENERAL PROVISIONS
11.1 ASSIGNMENT. Except as set forth in this section, neither this Agreement nor
any rights under this Agreement, in whole or in part, will be assignable or
otherwise transferable by either party without the express written consent of
the other party. Any attempt by either party to assign any of its rights or
delegate any of its duties under this Agreement without the prior written
consent of the other party will be null and void. Subject to the above, this
Agreement will be binding upon and take effect for the benefit of the successors
and assigns of the parties to this Agreement.
11.2 WAIVER, AMENDMENT, MODIFICATION. No waiver, amendment or modification,
including those by custom, usage of trade, or course of dealing, of any
provision of this Agreement will be effective unless in writing and signed by
the party against whom such waiver, amendment or modification is sought to be
enforced. No waiver by any party of any default in performance by the other
party under this Agreement or of any breach or series of breaches by the other
party of any of the terms or conditions of this Agreement will constitute a
waiver of any subsequent default in performance under this Agreement or any
subsequent
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breach of any terms or conditions of that Agreement. Performance of any
obligation required of a party under this Agreement may be waived only by a
written waiver signed by a duly authorized officer of the other party, that
waiver will be effective only with respect to the specific obligation described
in that waiver.
11.3 FORCE MAJEURE. Neither party will be deemed in default of this Agreement to
the extent that performance of its obligations, or attempts to cure any breach,
are delayed or prevented by reason of circumstance beyond its reasonable
control, including without limitation fire, natural disaster, earthquake,
accident or other acts of God ("Force Majeure"), provided that the party seeking
to delay its performance gives the other written notice of any such Force
Majeure within 15 days after the discovery of the Force Majeure, and further
provided that such party uses its good faith efforts to cure the Force Majeure.
If there is a Force Majeure, the time for performance or cure will be extended
for a period equal to the duration of the Force Majeure. This Article will not
be applicable to any payment obligations of either party.
11.4 SETTLEMENT OF DISPUTES
11.4.1 Each party acknowledges and agrees that, if there is any breach of this
Agreement, including, without limitation, unauthorized use or disclosure of
Confidential Information or other Information of the other party, the
non-breaching party will suffer irreparable injury that cannot be compensated by
money damages, and therefore, will not have an adequate remedy at law.
Accordingly, if either party institutes an action or proceeding to enforce the
provisions of this Agreement, such party will be entitled to obtain such
injunctive relief, specific performance, or other equitable remedy from a court
of competent jurisdiction as may be necessary or appropriate to prevent or
curtail any such breach, threatened or actual. These will be in addition to and
without prejudice to such other rights as such party may have in law or in
equity.
11.4.2 Any dispute, controversy, or claim arising out of or related to this
Agreement, or the creation, validity, interpretation, breach, or termination of
this Agreement will be referred to mediation before, and as a condition
precedent to, the initiation of any adjudicative action or proceeding, including
arbitration. The mediation will be held in Stuart, Florida. Either party may
demand mediation in writing, serving on the other party a statement of the
dispute, controversy, or claim, and the facts relating to it, in reasonable
detail. Furthermore, if within thirty (30) days after such demand, the parties
have not agreed upon a mediator and commenced mediation, the matter will be
referred to arbitration under Section 11.4.3. Furthermore, if, within forty-five
(45) days after such demand the matter has not been resolved to the satisfaction
of both parties, then the matter will be refeffed to arbitration under Section 1
11.4.3.
11.4.3 Any dispute, controversy, or claim arising out of or related to this
Agreement, or the creation, validity, interpretation, breach, or termination of
this Agreement that has not been resolved amicably among the parties by
mediation under Section 11.4.2 will be submitted to
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binding arbitration using the following procedure:
11.4.4 The arbitration will be held in ( Stuart, Florida), before a panel of
three arbitrators. Either party may demand arbitration in writing, serving on
the other party a statement of the dispute, controversy, or claim, and the facts
relating to it, in reasonable detail, and the arbitrator nominated by that
party.
11.4.5 Within thirty (30) days after such demand, the other party will name its
arbitrator, and the two arbitrators named by the parties will, within ten (10)
days, select a third arbitrator,
11.4.6 The arbitration will be governed by the Commercial Arbitration Rules of
the American Arbitration Association (the "AAA"), except as expressly provided
in this Article. However, the arbitration will be administered by any
organization mutually agreed upon by the parties. If the parties are unable to
agree upon the organization to administer the arbitration, it will be
administered by the AAA. The arbitrators may not amend or disregard any
provision of this section.
11.4.7 The expenses of arbitration will be borne by the party against whom the
decision is rendered, or apportioned in accordance with the decision of the
arbitrators if there is a compromise decision. Judgment upon any award may be
entered in any court of competent jurisdiction. All notices from one party to
the other relating to any arbitration under this Agreement will be in writing
and will be effective if given in accordance with Section 11.11 below.
11.5 CUMULATIVE RIGHTS. Any specific right or remedy provided in this Agreement
will not be exclusive but will be cumulative upon all other rights and remedies
set forth in this section and allowed under applicable law.
11.6 GOVERNING LAW. This Agreement will be governed by the laws of the State
Florida applicable to Agreements made and fully performed in the State of
Florida by Florida residents. Disputes not resolved by mediation or arbitration
will be heard in the appropriate federal or state courts located in Martin
County,Florida.
11.7 ENTIRE AGREEMENT. The parties acknowledge that this Agreement expresses
their entire understanding and agreement, and that there have been no
warranties, representations, covenants or understandings made by either party to
the other except such as are expressly set forth in this section. The parties
further acknowledge that this Agreement supersedes, terminates and otherwise
renders null and void any and all prior agreements or contracts, whether written
or oral, entered into between both parties.
11.8 COUNTERPARTS. This Agreement may be executed in multiple counterparts, any
one of which will be deemed an original, but all of which will constitute one
and the same instrument.
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11.9 ATTORNEY FEES. If either party is required to retain the services of any
attorney to enforce or otherwise litigate or defend any matter or claim arising
out of or in connection with this Agreement, then the prevailing party will be
entitled to recover from the other party, in addition to any other relief
awarded or granted, its reasonable costs and expenses (including attorneys'
fees) incurred in the proceeding.
11.10 SEVERABILITY. If any provision of this Agreement is found invalid or
unenforceable under judicial decree or decision, the remainder will remain valid
and enforceable according to its terms.
11.11 NOTICES. All notices, demands or consents required or permitted under this
Agreement will be in writing and will be delivered, sent by facsimile or mailed
certified return receipt requested to the respective parties at the addresses
set forth above or at such other address as such party will specify to the other
party in writing. Any notice required or permitted to be given by the provisions
of this Agreement will be conclusively deemed to have been received on the day
it is delivered to that party by U.S. Mail with Acknowledgment of Receipt or by
any commercial courier providing equivalent acknowledgment of receipt.
Captions and section headings used in this Agreement are for convenience
only and are not a part of this Agreement and will not be used in construing it.
We have carefully reviewed this Agreement and agree to and accept its terms
and conditions. We are executing this Agreement as of the day and year first
written above.
CONTRACTOR CLIENT
s/ Mike Cristoforo s/ Dennis McGuire
s/ Jean Cristoforo
7
<PAGE>
EXHIBIT A
CUSTOMER LIST
1. All of the Shipyards and Shipmanagement Companies worlwide.
2. All of the Above Ground Storage Facilities and companies servicing those
industries.
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EXHIBIT B
REPRESENTATIVE'S COMPENSATION
1. The Representative's compensation for work performed under this Agreement
will be as follows: The Representative will be entitled to a total commission
for each individual sale of the Products arranged solely or jointly through the
Representative equal to 2 % percent of the net invoice of each sale. The
Representative will be paid a pro rata portion of each partial or total
payment(s) made by a customer on any individual sale equal to the applicable
commission percentage provided above.
The term "net invoice price" will mean the total invoice price that the
sale is invoiced to the customer, but excluding shipping and mailing costs,
taxes, insurance, any allowances or discounts granted to the customer and all
charges for installation or instruction.
1.1 The Client will pay to the Representative a weekly draw towards the above
fee of $2,000.00 for the period 4-2-98 thru 12/31/98. The total amount of the
draw will be deducted from the fee paid above at the end of each year.
2. There will be deducted from any sums due the Representative:
2.1 An amount equal to commissions previously paid or credited to the
Representative on sales where all or substantially all of the consideration
relating to that has since been returned to the customer or in the event only
a portion of such consideration has since been returned to the customer or
allowances have been credited to the customer by the Company, the pro rata
amount of previously paid or credited commissions on such returns or
allowances.
2.2 A pro rata amount of commissions previously paid or credited to the
Representative on sales where less than the total purchase price of the
Products is ultimately paid by the customer, whether by reason of the
customers bankruptcy, insolvency or for any other reason whatsoever, in the
Company's judgment, renders the account uncollectible in whole or in part, in
which event, if any sums are later realized upon the uncollectible account,
the Company will pay the Representative the percentage of comniission
applicable to the amount of the actual collection.
3. When an order received by the Company through the Representative has been
influenced by another of the Company's sales representatives, or the Product
is to be delivered outside of the Representative's business area, the Company
may, in its sole discretion, but will not be required to, designate a
commission split between the Representative and any one or more other
authorized sales representative(s), as the case may be. Any such commission
split may be discussed with the sales representatives involved, but the
Company will make any decision in its own sole discretion, and any such
decision will be final.
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CONSULTING AGREEMENT
This Business Consultant's Agreement ("Agreement") is entered into as of
(April 4, 1998) between (Ultrastrip Systems Inc.) a State Of Florida
Corporation, with its principal place of business at P.O. Box 2173 ( Stuart, Fl
34995) ("Client") and (Dennis McGuire, a Sole Proprietorship) with its principal
place of business at 716 E. Parkway Drive, Stuart, Fl, ("Consultant").
GENERAL
The Consultant is engaged in the business of providing start up
management, marketing, and selling services for various businesses considering
becoming a public corporation.
The Client desires to retain the Consultant to obtain individuals and
business entities to purchase it's products, manage it's company, and provide
the necessary services to the Client to become a publicly trading company.
In consideration for the mutual promises, covenants, and Agreements made
below, the parties, intending to be legally bound, agree as follows:
AGREEMENT
1. NON-EXCLUSIVE RIGHT TO SOLICIT
1.1 Subject to the provisions of Section 1.2, the Client grants to the
Consultant the non-exclusive right to solicit individuals and other business
entities on behalf of the Client with promotional, selling and marketing
materials for the Client's products.
1.2 The Consultant reserves the right to solicit those individuals and business
entities defined in Exhibit A attached.
2. TRADEMARKS AND TRADE NAMES. Client reserves all fights to the trade names and
trademarks and to any other commercial symbols that it may adopt or use ftom
time-to-time.
3. INDEPENDENT CONTRACTOR. The Consultant is not an employee of the Client for
any purpose whatsoever, but is an independent contractor, The Client is
interested only in the results obtained by the Consultant, that will have sole
control of the manner and means of performing under this Agreement. The Client
will not have the right to require the Consultant to do anything that would
jeopardize the relationship of independent contractor between the Client and the
Consultant. All expenses and disbursements incurred by the Consultant in
connection with this Agreement will be borne wholly and completely by the
Consultant. The
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Consultant does not have, nor will the Consultant hold itself out as having any
right, power or authority to create any contract or obligation, either express
or implied, on behalf of, or binding upon the Client, unless the Client will
consent to that in writing, The Consultant will have the right to appoint and
will be solely responsible for the Consultant's own solicitation force,
employees, agents and representatives, who will be at the Consultant's own risk,
expense and supervision and will not have any claim against the Client for
compensation or reimbursement. The Consultant may represent other products that
do not compete directly or indirectly with products covered by this Agreement
and may exercise the Consultant's own discretion in obtaining promotional,
selling and marketing services, hiring personnel and otherwise complying with
the terms of this Agreement.
4. ACCEPTANCE. Individuals, partnerships, corporations and other business
entities solicited by the Consultant to provide promotional, selling and
marketing services for the Client will be submitted to and subject to acceptance
by the Client. Only the Client may decide, in its sole discretion, whether to
accept or reject any individual or entity solicited by the Consultant. The
Client's acceptance is expressly conditioned upon such individual or entity
executing an Independent Sales Representative Agreement.
5. COMPENSATION AND COMMISSION. THE CLIENT WILL PAY THE CONSULTANT A FEE EQUAL
TO THE DIFFERENCE BETWEEN 2% OF THE NET AMOUNT OF THE CLIENT'S INVOICES TO
PURCHASERS AS DETERMINED ACCORDING TO EXHIBIT B ATTACHED. ADDITIONALLY, THE
CLIENT WILL PAY TO THE CONSULTANT A WEEKLY DRAW AS OUTLINED IN EXHIBIT B.
Despite anything to the contrary contained in this Agreement, the Client will
reimburse the Consultant for those certain extraordinary travel expenses
incurred by the Consultant and agreed upon by the Client and the Consultant
prior to the Consultant incurring such expenses.
6. BEST EFFORTS. The Consultant will use its best efforts to obtain contracts
for the sale of equipment, contract services, and distributor agreements, for
the Client and to solicit individuals, partnerships, corporations and other
business entities to perform such services for the Client.
7. TERM AND TERMINATION. The term of this Agreement will be for a period of 8
months from the date first written above. At the end of said period, it is the
intent of the parties to re-negotiate this Agreement; however, if a new contract
is not entered into, the Contractor will continue to receive its commissions
pursuant to Exhibit B the Compensation Agreement
8. MISREPRESENTATION. In the event the Consultant, at any time during its
association with the Client, will be guilty of gross negligence, intentional
misconduct or intentional misrepresentation, such negligence, misconduct or
misrepresentation will be deemed an immediate breach of this Agreement. Upon
such breach, or any other breach of this Agreement by the Consultant, this
Agreement will terminate immediately upon written notice by the Client, and the
Consultant will not be entitled to claim any compensation for damages for, in
respect of, or by reason of such termination.
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<PAGE>
9. PROPRIETARY INFORMATION. The customers, business, products, technology,
business connections, customer lists, procedures, operations, techniques and
other aspects of the business of the Client are established at great expense and
protected as confidential information and trade secrets and provide the Client
with a substantial competitive advantage of selling its products. The Consultant
will have access to, and be entrusted with, trade secrets, confidential
information and proprietary information, and the Client would suffer great loss
and injury if the Consultant would disclose this information or use it to
compete with the Client. Consequently, the Consultant agrees that during its
relationship with the Client, and from then on, it will not, within the
geographic territory encompassed by the business of the Client at the
termination of that relationship, directly or indirectly, either individually or
as an employee, agent, partner, shareholder, or in any other capacity, use or
disclose, or cause to be used or disclosed, any trade secret, confidential
information or proprietary information acquired by the Consultant during its
relationship with the Client.
10. INDEMNIFICATION. The Consultant agrees to defend, indemnify, and hold the
Client harmless from any and all liabilities, losses, costs, damages, penalties
and any other expenses including attorneys fees arising directlv or indirectly,
either from the Consultant's acts or omissions or the Consultant's breach of any
obligation imposed or sought to be imposed by or according to this Agreement.
The Client will not be liable to the Consultant, or to anyone who may claim any
right due to a relationship with the Consultant, for any acts or omissions by
the Consultant in the performance of this Agreement or on the part of the
employees or agents of the Consultant. The Consultant will indemnify and hold
the Client free and harmless from any obligation, cost claim, judgment,
attorneys, fees, and attachments arising from, growing out of, or in any way
connected with the services rendered to the Client under the terms of this
Agreement.
11. GENERAL PROVISIONS
11.1 ASSIGNMENT. Except as set forth in this section, neither this Agreement nor
any rights under this Agreement, in whole or in part, will be assignable or
otherwise transferable by either party without the express written consent of
the other party. Any attempt by either party to assign any of its rights or
delegate any of its duties under this Agreement without the prior written
consent of the other party will be null and void. Subject to the above, this
Agreement will be binding upon and take effect for the benefit of the successors
and assigns of the parties to this Agreement.
11.2 WAIVER, AMENDMENT, MODIFICATION. No waiver, amendment or modification,
including those by custom, usage of trade, or course of dealing, of any
provision of this Agreement will be effective unless in writing and signed by
the party against whom such waiver, amendment or modification is sought to be
enforced. No waiver by any party of any default in performance by the other
party under this Agreement or of any breach or series of breaches by the other
party of any of the terms or conditions of this Agreement will constitute a
waiver of any subsequent default in performance under this Agreement or any
subsequent
4
<PAGE>
breach of any terms or conditions of that Agreement. Performance of any
obligation required of a party under this Agreement may be waived only by a
written waiver signed by a duly authorized officer of the other party, that
waiver will be effective only with respect to the specific obligation described
in that waiver.
11.3 FORCE MAJEURE. Neither party will be deemed in default of this Agreement to
the extent that performance of its obligations, or attempts to cure any breach,
are delayed or prevented by reason of circumstance beyond its reasonable
control, including without limitation fire, natural disaster, earthquake,
accident or other acts of God ("Force Majeure"), provided that the party seeking
to delay its performance gives the other written notice of any such Force
Majeure within 15 days after the discovery of the Force Majeure, and further
provided that such party uses its good faith efforts to cure the Force Majeure.
If there is a Force Majeure, the time for performance or cure will be extended
for a period equal to the duration of the Force Majeure. This Article will not
be applicable to any payment obligations of either party.
11.4 SETTLEMENT OF DISPUTES
11.4.1 Each party acknowledges and agrees that, if there is any breach of this
Agreement, including, without limitation, unauthorized use or disclosure of
Confidential Information or other Information of the other party, the
non-breaching party will suffer irreparable injury that cannot be compensated by
money damages, and therefore, will not have an adequate remedy at law.
Accordingly, if either party institutes an action or proceeding to enforce the
provisions of this Agreement, such party will be entitled to obtain such
injunctive relief, specific performance, or other equitable remedy from a court
of competent jurisdiction as may be necessary or appropriate to prevent or
curtail any such breach, threatened or actual. These will be in addition to and
without prejudice to such other rights as such party may have in law or in
equity.
11.4.2 Any dispute, controversy, or claim arising out of or related to this
Agreement, or the creation, validity, interpretation, breach, or termination of
this Agreement will be referred to mediation before, and as a condition
precedent to, the initiation of any adjudicative action or proceeding, including
arbitration. The mediation will be held in Stuart, Florida. Either party may
demand mediation in writing, serving on the other party a statement of the
dispute, controversy, or claim, and the facts relating to it, in reasonable
detail. Furthermore, if within thirty (30) days after such demand, the parties
have not agreed upon a mediator and commenced mediation, the matter will be
referred to arbitration under Section 11.4.3. Furthermore, if, within forty-five
(45) days after such demand the matter has not been resolved to the satisfaction
of both parties, then the matter will be refeffed to arbitration under Section 1
11.4.3.
11.4.3 Any dispute, controversy, or claim arising out of or related to this
Agreement, or the creation, validity, interpretation, breach, or termination of
this Agreement that has not been resolved amicably among the parties by
mediation under Section 11.4.2 will be submitted to
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binding arbitration using the following procedure:
11.4.4 The arbitration will be held in ( Stuart, Florida), before a panel of
three arbitrators. Either party may demand arbitration in writing, serving on
the other party a statement of the dispute, controversy, or claim, and the facts
relating to it, in reasonable detail, and the arbitrator nominated by that
party.
11.4.5 Within thirty (30) days after such demand, the other party will name its
arbitrator, and the two arbitrators named by the parties will, within ten (10)
days, select a third arbitrator,
11.4.6 The arbitration will be governed by the Commercial Arbitration Rules of
the American Arbitration Association (the "AAA"), except as expressly provided
in this Article. However, the arbitration will be administered by any
organization mutually agreed upon by the parties. If the parties are unable to
agree upon the organization to administer the arbitration, it will be
administered by the AAA. The arbitrators may not amend or disregard any
provision of this section.
11.4.7 The expenses of arbitration will be borne by the party against whom the
decision is rendered, or apportioned in accordance with the decision of the
arbitrators if there is a compromise decision. Judgment upon any award may be
entered in any court of competent jurisdiction. All notices from one party to
the other relating to any arbitration under this Agreement will be in writing
and will be effective if given in accordance with Section 11.11 below.
11.5 CUMULATIVE RIGHTS. Any specific right or remedy provided in this Agreement
will not be exclusive but will be cumulative upon all other rights and remedies
set forth in this section and allowed under applicable law.
11.6 GOVERNING LAW. This Agreement will be governed by the laws of the State
Florida applicable to Agreements made and fully performed in the State of
Florida by Florida residents. Disputes not resolved by mediation or arbitration
will be heard in the appropriate federal or state courts located in Martin
County,Florida.
11.7 ENTIRE AGREEMENT. The parties acknowledge that this Agreement expresses
their entire understanding and agreement, and that there have been no
warranties, representations, covenants or understandings made by either party to
the other except such as are expressly set forth in this section. The parties
further acknowledge that this Agreement supersedes, terminates and otherwise
renders null and void any and all prior agreements or contracts, whether written
or oral, entered into between both parties.
11.8 COUNTERPARTS. This Agreement may be executed in multiple counterparts, any
one of which will be deemed an original, but all of which will constitute one
and the same instrument.
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11.9 ATTORNEY FEES. If either party is required to retain the services of any
attorney to enforce or otherwise litigate or defend any matter or claim arising
out of or in connection with this Agreement, then the prevailing party will be
entitled to recover from the other party, in addition to any other relief
awarded or granted, its reasonable costs and expenses (including attorneys'
fees) incurred in the proceeding.
11.10 SEVERABILITY. If any provision of this Agreement is found invalid or
unenforceable under judicial decree or decision, the remainder will remain valid
and enforceable according to its terms.
11.11 NOTICES. All notices, demands or consents required or permitted under this
Agreement will be in writing and will be delivered, sent by facsimile or mailed
certified return receipt requested to the respective parties at the addresses
set forth above or at such other address as such party will specify to the other
party in writing. Any notice required or permitted to be given by the provisions
of this Agreement will be conclusively deemed to have been received on the day
it is delivered to that party by U.S. Mail with Acknowledgment of Receipt or by
any commercial courier providing equivalent acknowledgment of receipt.
Captions and section headings used in this Agreement are for convenience
only and are not a part of this Agreement and will not be used in construing it.
We have carefully reviewed this Agreement and agree to and accept its terms
and conditions. We are executing this Agreement as of the day and year first
written above.
CONTRACTOR CLIENT
s/ Dennis McGuire s/ Dennis McGuire
7
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EXHIBIT A
CUSTOMER LIST
1. All of the Shipyards and Shipmanagement Companies worlwide.
2. All of the Above Ground Storage Facilities and companies servicing those
industries.
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EXHIBIT B
REPRESENTATIVE'S COMPENSATION
1. The Representative's compensation for work performed under this Agreement
will be as follows: The Representative will be entitled to a total commission
for each individual sale of the Products arranged solely or jointly through the
Representative equal to 2 % percent of the net invoice of each sale. The
Representative will be paid a pro rata portion of each partial or total
payment(s) made by a customer on any individual sale equal to the applicable
commission percentage provided above.
The term "net invoice price" will mean the total invoice price that the
sale is invoiced to the customer, but excluding shipping and mailing costs,
taxes, insurance, any allowances or discounts granted to the customer and all
charges for installation or instruction.
1.1 The Client will pay to the Representative a weekly draw towards the above
fee of $2,500.00 for the period 4-2-98 thru 12/31/98. Increasing to $5,000 per
week beginning 1/1/99 thru 12/31/99. The total amount of the draw will be
deducted from the fee paid above at the end of each year.
2. There will be deducted from any sums due the Representative:
2.1 An amount equal to commissions previously paid or credited to the
Representative on sales where all or substantially all of the consideration
relating to that has since been returned to the customer or in the event only
a portion of such consideration has since been returned to the customer or
allowances have been credited to the customer by the Company, the pro rata
amount of previously paid or credited commissions on such returns or
allowances.
2.2 A pro rata amount of commissions previously paid or credited to the
Representative on sales where less than the total purchase price of the
Products is ultimately paid by the customer, whether by reason of the
customers bankruptcy, insolvency or for any other reason whatsoever, in the
Company's judgment, renders the account uncollectible in whole or in part, in
which event, if any sums are later realized upon the uncollectible account,
the Company will pay the Representative the percentage of comniission
applicable to the amount of the actual collection.
3. When an order received by the Company through the Representative has been
influenced by another of the Company's sales representatives, or the Product
is to be delivered outside of the Representative's business area, the Company
may, in its sole discretion, but will not be required to, designate a
commission split between the Representative and any one or more other
authorized sales representative(s), as the case may be. Any such commission
split may be discussed with the sales representatives involved, but the
Company will make any decision in its own sole discretion, and any such
decision will be final.
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CONSULTING AGREEMENT
This Business Consultant's Agreement ("Agreement") is entered into as of
(April 4, 1998) between (LTItrastrip Systems Inc.) a State Of Florida
Corporation, with its principal place of business at P.O. Box 2173 ( Stuart, Fl
34995) ("Client") and (Kevin Grady, a Sole Proprietorship) with its principal
place of business at 14640 Marvin Lane Ft. Lauderdale FL, 33330, ("Consultant").
GENERAL
The Consultant is engaged in the business of providing start up
management, marketing, and selling services for various businesses considering
becoming a public corporation.
The Client desires to retain the Consultant to obtain individuals and
business entities to purchase it's products, manage it's company, and provide
the necessary services to the Client to become a publicly trading company.
In consideration for the mutual promises, covenants, and Agreements made
below, the parties, intending to be legally bound, agree as follows:
AGREEMENT
1. NON-EXCLUSIVE RIGHT TO SOLICIT
1.1 Subject to the provisions of Section 1.2, the Client grants to the
Consultant the non-exclusive right to solicit individuals and other business
entities on behalf of the Client with promotional, selling and marketing
materials for the Client's products.
1.2 The Consultant reserves the right to solicit those individuals and business
entities defined in Exhibit A attached.
2. TRADEMARKS AND TRADE NAMES. Client reserves all fights to the trade names and
trademarks and to any other commercial symbols that it may adopt or use ftom
time-to-time.
3. INDEPENDENT CONTRACTOR. The Consultant is not an employee of the Client for
any purpose whatsoever, but is an independent contractor, The Client is
interested only in the results obtained by the Consultant, that will have sole
control of the manner and means of performing under this Agreement. The Client
will not have the right to require the Consultant to do anything that would
jeopardize the relationship of independent contractor between the Client and the
Consultant. All expenses and disbursements incurred by the Consultant in
connection with this Agreement will be borne wholly and completely by the
Consultant. The
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Consultant does not have, nor will the Consultant hold itself out as having any
right, power or authority to create any contract or obligation, either express
or implied, on behalf of, or binding upon the Client, unless the Client will
consent to that in writing, The Consultant will have the right to appoint and
will be solely responsible for the Consultant's own solicitation force,
employees, agents and representatives, who will be at the Consultant's own risk,
expense and supervision and will not have any claim against the Client for
compensation or reimbursement. The Consultant may represent other products that
do not compete directly or indirectly with products covered by this Agreement
and may exercise the Consultant's own discretion in obtaining promotional,
selling and marketing services, hiring personnel and otherwise complying with
the terms of this Agreement.
4. ACCEPTANCE. Individuals, partnerships, corporations and other business
entities solicited by the Consultant to provide promotional, selling and
marketing services for the Client will be submitted to and subject to acceptance
by the Client. Only the Client may decide, in its sole discretion, whether to
accept or reject any individual or entity solicited by the Consultant. The
Client's acceptance is expressly conditioned upon such individual or entity
executing an Independent Sales Representative Agreement.
5. COMPENSATION AND COMMISSION. THE CLIENT WILL PAY THE CONSULTANT A FEE EQUAL
TO THE DIFFERENCE BETWEEN 2% OF THE NET AMOUNT OF THE CLIENT'S INVOICES TO
PURCHASERS AS DETERMINED ACCORDING TO EXHIBIT B ATTACHED. ADDITIONALLY, THE
CLIENT WILL PAY TO THE CONSULTANT A WEEKLY DRAW AS OUTLINED IN EXHIBIT B.
Despite anything to the contrary contained in this Agreement, the Client will
reimburse the Consultant for those certain extraordinary travel expenses
incurred by the Consultant and agreed upon by the Client and the Consultant
prior to the Consultant incurring such expenses.
6. BEST EFFORTS. The Consultant will use its best efforts to obtain contracts
for the sale of equipment, contract services, and distributor agreements, for
the Client and to solicit individuals, partnerships, corporations and other
business entities to perform such services for the Client.
7. TERM AND TERMINATION. The term of this Agreement will be for a period of 8
months from the date first written above. At the end of said period, it is the
intent of the parties to re-negotiate this Agreement; however, if a new contract
is not entered into, the Contractor will continue to receive its commissions
pursuant to Exhibit B the Compensation Agreement
8. MISREPRESENTATION. In the event the Consultant, at any time during its
association with the Client, will be guilty of gross negligence, intentional
misconduct or intentional misrepresentation, such negligence, misconduct or
misrepresentation will be deemed an immediate breach of this Agreement. Upon
such breach, or any other breach of this Agreement by the Consultant, this
Agreement will terminate immediately upon written notice by the Client, and the
Consultant will not be entitled to claim any compensation for damages for, in
respect of, or by reason of such termination.
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9. PROPRIETARY INFORMATION. The customers, business, products, technology,
business connections, customer lists, procedures, operations, techniques and
other aspects of the business of the Client are established at great expense and
protected as confidential information and trade secrets and provide the Client
with a substantial competitive advantage of selling its products. The Consultant
will have access to, and be entrusted with, trade secrets, confidential
information and proprietary information, and the Client would suffer great loss
and injury if the Consultant would disclose this information or use it to
compete with the Client. Consequently, the Consultant agrees that during its
relationship with the Client, and from then on, it will not, within the
geographic territory encompassed by the business of the Client at the
termination of that relationship, directly or indirectly, either individually or
as an employee, agent, partner, shareholder, or in any other capacity, use or
disclose, or cause to be used or disclosed, any trade secret, confidential
information or proprietary information acquired by the Consultant during its
relationship with the Client.
10. INDEMNIFICATION. The Consultant agrees to defend, indemnify, and hold the
Client harmless from any and all liabilities, losses, costs, damages, penalties
and any other expenses including attorneys fees arising directlv or indirectly,
either from the Consultant's acts or omissions or the Consultant's breach of any
obligation imposed or sought to be imposed by or according to this Agreement.
The Client will not be liable to the Consultant, or to anyone who may claim any
right due to a relationship with the Consultant, for any acts or omissions by
the Consultant in the performance of this Agreement or on the part of the
employees or agents of the Consultant. The Consultant will indemnify and hold
the Client free and harmless from any obligation, cost claim, judgment,
attorneys, fees, and attachments arising from, growing out of, or in any way
connected with the services rendered to the Client under the terms of this
Agreement.
11. GENERAL PROVISIONS
11.1 ASSIGNMENT. Except as set forth in this section, neither this Agreement nor
any rights under this Agreement, in whole or in part, will be assignable or
otherwise transferable by either party without the express written consent of
the other party. Any attempt by either party to assign any of its rights or
delegate any of its duties under this Agreement without the prior written
consent of the other party will be null and void. Subject to the above, this
Agreement will be binding upon and take effect for the benefit of the successors
and assigns of the parties to this Agreement.
11.2 WAIVER, AMENDMENT, MODIFICATION. No waiver, amendment or modification,
including those by custom, usage of trade, or course of dealing, of any
provision of this Agreement will be effective unless in writing and signed by
the party against whom such waiver, amendment or modification is sought to be
enforced. No waiver by any party of any default in performance by the other
party under this Agreement or of any breach or series of breaches by the other
party of any of the terms or conditions of this Agreement will constitute a
waiver of any subsequent default in performance under this Agreement or any
subsequent
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breach of any terms or conditions of that Agreement. Performance of any
obligation required of a party under this Agreement may be waived only by a
written waiver signed by a duly authorized officer of the other party, that
waiver will be effective only with respect to the specific obligation described
in that waiver.
11.3 FORCE MAJEURE. Neither party will be deemed in default of this Agreement to
the extent that performance of its obligations, or attempts to cure any breach,
are delayed or prevented by reason of circumstance beyond its reasonable
control, including without limitation fire, natural disaster, earthquake,
accident or other acts of God ("Force Majeure"), provided that the party seeking
to delay its performance gives the other written notice of any such Force
Majeure within 15 days after the discovery of the Force Majeure, and further
provided that such party uses its good faith efforts to cure the Force Majeure.
If there is a Force Majeure, the time for performance or cure will be extended
for a period equal to the duration of the Force Majeure. This Article will not
be applicable to any payment obligations of either party.
11.4 SETTLEMENT OF DISPUTES
11.4.1 Each party acknowledges and agrees that, if there is any breach of this
Agreement, including, without limitation, unauthorized use or disclosure of
Confidential Information or other Information of the other party, the
non-breaching party will suffer irreparable injury that cannot be compensated by
money damages, and therefore, will not have an adequate remedy at law.
Accordingly, if either party institutes an action or proceeding to enforce the
provisions of this Agreement, such party will be entitled to obtain such
injunctive relief, specific performance, or other equitable remedy from a court
of competent jurisdiction as may be necessary or appropriate to prevent or
curtail any such breach, threatened or actual. These will be in addition to and
without prejudice to such other rights as such party may have in law or in
equity.
11.4.2 Any dispute, controversy, or claim arising out of or related to this
Agreement, or the creation, validity, interpretation, breach, or termination of
this Agreement will be referred to mediation before, and as a condition
precedent to, the initiation of any adjudicative action or proceeding, including
arbitration. The mediation will be held in Stuart, Florida. Either party may
demand mediation in writing, serving on the other party a statement of the
dispute, controversy, or claim, and the facts relating to it, in reasonable
detail. Furthermore, if within thirty (30) days after such demand, the parties
have not agreed upon a mediator and commenced mediation, the matter will be
referred to arbitration under Section 11.4.3. Furthermore, if, within forty-five
(45) days after such demand the matter has not been resolved to the satisfaction
of both parties, then the matter will be refeffed to arbitration under Section 1
11.4.3.
11.4.3 Any dispute, controversy, or claim arising out of or related to this
Agreement, or the creation, validity, interpretation, breach, or termination of
this Agreement that has not been resolved amicably among the parties by
mediation under Section 11.4.2 will be submitted to
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binding arbitration using the following procedure:
11.4.4 The arbitration will be held in ( Stuart, Florida), before a panel of
three arbitrators. Either party may demand arbitration in writing, serving on
the other party a statement of the dispute, controversy, or claim, and the facts
relating to it, in reasonable detail, and the arbitrator nominated by that
party.
11.4.5 Within thirty (30) days after such demand, the other party will name its
arbitrator, and the two arbitrators named by the parties will, within ten (10)
days, select a third arbitrator,
11.4.6 The arbitration will be governed by the Commercial Arbitration Rules of
the American Arbitration Association (the "AAA"), except as expressly provided
in this Article. However, the arbitration will be administered by any
organization mutually agreed upon by the parties. If the parties are unable to
agree upon the organization to administer the arbitration, it will be
administered by the AAA. The arbitrators may not amend or disregard any
provision of this section.
11.4.7 The expenses of arbitration will be borne by the party against whom the
decision is rendered, or apportioned in accordance with the decision of the
arbitrators if there is a compromise decision. Judgment upon any award may be
entered in any court of competent jurisdiction. All notices from one party to
the other relating to any arbitration under this Agreement will be in writing
and will be effective if given in accordance with Section 11.11 below.
11.5 CUMULATIVE RIGHTS. Any specific right or remedy provided in this Agreement
will not be exclusive but will be cumulative upon all other rights and remedies
set forth in this section and allowed under applicable law.
11.6 GOVERNING LAW. This Agreement will be governed by the laws of the State
Florida applicable to Agreements made and fully performed in the State of
Florida by Florida residents. Disputes not resolved by mediation or arbitration
will be heard in the appropriate federal or state courts located in Martin
County,Florida.
11.7 ENTIRE AGREEMENT. The parties acknowledge that this Agreement expresses
their entire understanding and agreement, and that there have been no
warranties, representations, covenants or understandings made by either party to
the other except such as are expressly set forth in this section. The parties
further acknowledge that this Agreement supersedes, terminates and otherwise
renders null and void any and all prior agreements or contracts, whether written
or oral, entered into between both parties.
11.8 COUNTERPARTS. This Agreement may be executed in multiple counterparts, any
one of which will be deemed an original, but all of which will constitute one
and the same instrument.
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11.9 ATTORNEY FEES. If either party is required to retain the services of any
attorney to enforce or otherwise litigate or defend any matter or claim arising
out of or in connection with this Agreement, then the prevailing party will be
entitled to recover from the other party, in addition to any other relief
awarded or granted, its reasonable costs and expenses (including attorneys'
fees) incurred in the proceeding.
11.10 SEVERABILITY. If any provision of this Agreement is found invalid or
unenforceable under judicial decree or decision, the remainder will remain valid
and enforceable according to its terms.
11.11 NOTICES. All notices, demands or consents required or permitted under this
Agreement will be in writing and will be delivered, sent by facsimile or mailed
certified return receipt requested to the respective parties at the addresses
set forth above or at such other address as such party will specify to the other
party in writing. Any notice required or permitted to be given by the provisions
of this Agreement will be conclusively deemed to have been received on the day
it is delivered to that party by U.S. Mail with Acknowledgment of Receipt or by
any commercial courier providing equivalent acknowledgment of receipt.
Captions and section headings used in this Agreement are for convenience
only and are not a part of this Agreement and will not be used in construing it.
We have carefully reviewed this Agreement and agree to and accept its terms
and conditions. We are executing this Agreement as of the day and year first
written above.
CONTRACTOR CLIENT
s/ Kevin P. Grady s/ Dennis McGuire
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EXHIBIT A
CUSTOMER LIST
1. All of the Shipyards and Shipmanagement Companies worlwide.
2. All of the Above Ground Storage Facilities and companies servicing those
industries.
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EXHIBIT B
REPRESENTATIVE'S COMPENSATION
1. The Representative's compensation for work performed under this Agreement
will be as follows: The Representative will be entitled to a total commission
for each individual sale of the Products arranged solely or jointly through the
Representative equal to 2 % percent of the net invoice of each sale. The
Representative will be paid a pro rata portion of each partial or total
payment(s) made by a customer on any individual sale equal to the applicable
commission percentage provided above.
The term "net invoice price" will mean the total invoice price that the
sale is invoiced to the customer, but excluding shipping and mailing costs,
taxes, insurance, any allowances or discounts granted to the customer and all
charges for installation or instruction.
1.1 The Client will pay to the Representative a weekly draw towards the above
fee of $500.00 for the period 8-1-98 thru 12/31/98. The total amount of the draw
will be deducted from the fee paid above at the end of each year.
2. There will be deducted from any sums due the Representative:
2.1 An amount equal to commissions previously paid or credited to the
Representative on sales where all or substantially all of the consideration
relating to that has since been returned to the customer or in the event only a
portion of such consideration has since been returned to the customer or
allowances have been credited to the customer by the Company, the pro rata
amount of previously paid or credited commissions on such returns or allowances.
2.2 A pro rata amount of commissions previously paid or credited to the
Representative on sales where less than the total purchase price of the Products
is ultimately paid by the customer, whether by reason of the customers
bankruptcy, insolvency or for any other reason whatsoever, in the Company's
judgment, renders the account uncollectible in whole or in part, in which event,
if any sums are later realized upon the uncollectible account, the Company will
pay the Representative the percentage of comniission applicable to the amount of
the actual collection.
3. When an order received by the Company through the Representative has been
influenced by another of the Company's sales representatives, or the Product is
to be delivered outside of the Representative's business area, the Company may,
in its sole discretion, but will not be required to, designate a commission
split between the Representative and any one or more other authorized sales
representative(s), as the case may be. Any such commission split may be
discussed with the sales representatives involved, but the Company will make any
decision in its own sole discretion, and any such decision will be final.
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CONSULTING AGREEMENT
This Business Consultant's Agreement ("Agreement") is entered into as of
(April 4, 1998) between (Ultrastrip Systems Inc.) a State Of Florida
Corporation, with its principal place of business at P.O. Box 2173 ( Stuart, Fl
34995) ("Client") and (Jacqueline McGuire, a Sole Proprietorship) with its
principal place of business at 716 E. Parkway Drive, Stuart, Fl, ("Consultant").
GENERAL
The Consultant is engaged in the business of providing start up
management, marketing, and selling services for various businesses considering
becoming a public corporation.
The Client desires to retain the Consultant to obtain individuals and
business entities to purchase it's products, manage it's company, and provide
the necessary services to the Client to become a publicly trading company.
In consideration for the mutual promises, covenants, and Agreements made
below, the parties, intending to be legally bound, agree as follows:
AGREEMENT
1. NON-EXCLUSIVE RIGHT TO SOLICIT
1.1 Subject to the provisions of Section 1.2, the Client grants to the
Consultant the non-exclusive right to solicit individuals and other business
entities on behalf of the Client with promotional, selling and marketing
materials for the Client's products.
1.2 The Consultant reserves the right to solicit those individuals and business
entities defined in Exhibit A attached.
2. TRADEMARKS AND TRADE NAMES. Client reserves all fights to the trade names and
trademarks and to any other commercial symbols that it may adopt or use ftom
time-to-time.
3. INDEPENDENT CONTRACTOR. The Consultant is not an employee of the Client for
any purpose whatsoever, but is an independent contractor, The Client is
interested only in the results obtained by the Consultant, that will have sole
control of the manner and means of performing under this Agreement. The Client
will not have the right to require the Consultant to do anything that would
jeopardize the relationship of independent contractor between the Client and the
Consultant. All expenses and disbursements incurred by the Consultant in
connection with this Agreement will be borne wholly and completely by the
Consultant. The
2
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Consultant does not have, nor will the Consultant hold itself out as having any
right, power or authority to create any contract or obligation, either express
or implied, on behalf of, or binding upon the Client, unless the Client will
consent to that in writing, The Consultant will have the right to appoint and
will be solely responsible for the Consultant's own solicitation force,
employees, agents and representatives, who will be at the Consultant's own risk,
expense and supervision and will not have any claim against the Client for
compensation or reimbursement. The Consultant may represent other products that
do not compete directly or indirectly with products covered by this Agreement
and may exercise the Consultant's own discretion in obtaining promotional,
selling and marketing services, hiring personnel and otherwise complying with
the terms of this Agreement.
4. ACCEPTANCE. Individuals, partnerships, corporations and other business
entities solicited by the Consultant to provide promotional, selling and
marketing services for the Client will be submitted to and subject to acceptance
by the Client. Only the Client may decide, in its sole discretion, whether to
accept or reject any individual or entity solicited by the Consultant. The
Client's acceptance is expressly conditioned upon such individual or entity
executing an Independent Sales Representative Agreement.
5. COMPENSATION AND COMMISSION. THE CLIENT WILL PAY THE CONSULTANT A FEE EQUAL
TO THE DIFFERENCE BETWEEN 2% OF THE NET AMOUNT OF THE CLIENT'S INVOICES TO
PURCHASERS AS DETERMINED ACCORDING TO EXHIBIT B ATTACHED. ADDITIONALLY, THE
CLIENT WILL PAY TO THE CONSULTANT A WEEKLY DRAW AS OUTLINED IN EXHIBIT B.
Despite anything to the contrary contained in this Agreement, the Client will
reimburse the Consultant for those certain extraordinary travel expenses
incurred by the Consultant and agreed upon by the Client and the Consultant
prior to the Consultant incurring such expenses.
6. BEST EFFORTS. The Consultant will use its best efforts to obtain contracts
for the sale of equipment, contract services, and distributor agreements, for
the Client and to solicit individuals, partnerships, corporations and other
business entities to perform such services for the Client.
7. TERM AND TERMINATION. The term of this Agreement will be for a period of 8
months from the date first written above. At the end of said period, it is the
intent of the parties to re-negotiate this Agreement; however, if a new contract
is not entered into, the Contractor will continue to receive its commissions
pursuant to Exhibit B the Compensation Agreement
8. MISREPRESENTATION. In the event the Consultant, at any time during its
association with the Client, will be guilty of gross negligence, intentional
misconduct or intentional misrepresentation, such negligence, misconduct or
misrepresentation will be deemed an immediate breach of this Agreement. Upon
such breach, or any other breach of this Agreement by the Consultant, this
Agreement will terminate immediately upon written notice by the Client, and the
Consultant will not be entitled to claim any compensation for damages for, in
respect of, or by reason of such termination.
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9. PROPRIETARY INFORMATION. The customers, business, products, technology,
business connections, customer lists, procedures, operations, techniques and
other aspects of the business of the Client are established at great expense and
protected as confidential information and trade secrets and provide the Client
with a substantial competitive advantage of selling its products. The Consultant
will have access to, and be entrusted with, trade secrets, confidential
information and proprietary information, and the Client would suffer great loss
and injury if the Consultant would disclose this information or use it to
compete with the Client. Consequently, the Consultant agrees that during its
relationship with the Client, and from then on, it will not, within the
geographic territory encompassed by the business of the Client at the
termination of that relationship, directly or indirectly, either individually or
as an employee, agent, partner, shareholder, or in any other capacity, use or
disclose, or cause to be used or disclosed, any trade secret, confidential
information or proprietary information acquired by the Consultant during its
relationship with the Client.
10. INDEMNIFICATION. The Consultant agrees to defend, indemnify, and hold the
Client harmless from any and all liabilities, losses, costs, damages, penalties
and any other expenses including attorneys fees arising directlv or indirectly,
either from the Consultant's acts or omissions or the Consultant's breach of any
obligation imposed or sought to be imposed by or according to this Agreement.
The Client will not be liable to the Consultant, or to anyone who may claim any
right due to a relationship with the Consultant, for any acts or omissions by
the Consultant in the performance of this Agreement or on the part of the
employees or agents of the Consultant. The Consultant will indemnify and hold
the Client free and harmless from any obligation, cost claim, judgment,
attorneys, fees, and attachments arising from, growing out of, or in any way
connected with the services rendered to the Client under the terms of this
Agreement.
11. GENERAL PROVISIONS
11.1 ASSIGNMENT. Except as set forth in this section, neither this Agreement nor
any rights under this Agreement, in whole or in part, will be assignable or
otherwise transferable by either party without the express written consent of
the other party. Any attempt by either party to assign any of its rights or
delegate any of its duties under this Agreement without the prior written
consent of the other party will be null and void. Subject to the above, this
Agreement will be binding upon and take effect for the benefit of the successors
and assigns of the parties to this Agreement.
11.2 WAIVER, AMENDMENT, MODIFICATION. No waiver, amendment or modification,
including those by custom, usage of trade, or course of dealing, of any
provision of this Agreement will be effective unless in writing and signed by
the party against whom such waiver, amendment or modification is sought to be
enforced. No waiver by any party of any default in performance by the other
party under this Agreement or of any breach or series of breaches by the other
party of any of the terms or conditions of this Agreement will constitute a
waiver of any subsequent default in performance under this Agreement or any
subsequent
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breach of any terms or conditions of that Agreement. Performance of any
obligation required of a party under this Agreement may be waived only by a
written waiver signed by a duly authorized officer of the other party, that
waiver will be effective only with respect to the specific obligation described
in that waiver.
11.3 FORCE MAJEURE. Neither party will be deemed in default of this Agreement to
the extent that performance of its obligations, or attempts to cure any breach,
are delayed or prevented by reason of circumstance beyond its reasonable
control, including without limitation fire, natural disaster, earthquake,
accident or other acts of God ("Force Majeure"), provided that the party seeking
to delay its performance gives the other written notice of any such Force
Majeure within 15 days after the discovery of the Force Majeure, and further
provided that such party uses its good faith efforts to cure the Force Majeure.
If there is a Force Majeure, the time for performance or cure will be extended
for a period equal to the duration of the Force Majeure. This Article will not
be applicable to any payment obligations of either party.
11.4 SETTLEMENT OF DISPUTES
11.4.1 Each party acknowledges and agrees that, if there is any breach of this
Agreement, including, without limitation, unauthorized use or disclosure of
Confidential Information or other Information of the other party, the
non-breaching party will suffer irreparable injury that cannot be compensated by
money damages, and therefore, will not have an adequate remedy at law.
Accordingly, if either party institutes an action or proceeding to enforce the
provisions of this Agreement, such party will be entitled to obtain such
injunctive relief, specific performance, or other equitable remedy from a court
of competent jurisdiction as may be necessary or appropriate to prevent or
curtail any such breach, threatened or actual. These will be in addition to and
without prejudice to such other rights as such party may have in law or in
equity.
11.4.2 Any dispute, controversy, or claim arising out of or related to this
Agreement, or the creation, validity, interpretation, breach, or termination of
this Agreement will be referred to mediation before, and as a condition
precedent to, the initiation of any adjudicative action or proceeding, including
arbitration. The mediation will be held in Stuart, Florida. Either party may
demand mediation in writing, serving on the other party a statement of the
dispute, controversy, or claim, and the facts relating to it, in reasonable
detail. Furthermore, if within thirty (30) days after such demand, the parties
have not agreed upon a mediator and commenced mediation, the matter will be
referred to arbitration under Section 11.4.3. Furthermore, if, within forty-five
(45) days after such demand the matter has not been resolved to the satisfaction
of both parties, then the matter will be refeffed to arbitration under Section 1
11.4.3.
11.4.3 Any dispute, controversy, or claim arising out of or related to this
Agreement, or the creation, validity, interpretation, breach, or termination of
this Agreement that has not been resolved amicably among the parties by
mediation under Section 11.4.2 will be submitted to
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binding arbitration using the following procedure:
11.4.4 The arbitration will be held in ( Stuart, Florida), before a panel of
three arbitrators. Either party may demand arbitration in writing, serving on
the other party a statement of the dispute, controversy, or claim, and the facts
relating to it, in reasonable detail, and the arbitrator nominated by that
party.
11.4.5 Within thirty (30) days after such demand, the other party will name its
arbitrator, and the two arbitrators named by the parties will, within ten (10)
days, select a third arbitrator,
11.4.6 The arbitration will be governed by the Commercial Arbitration Rules of
the American Arbitration Association (the "AAA"), except as expressly provided
in this Article. However, the arbitration will be administered by any
organization mutually agreed upon by the parties. If the parties are unable to
agree upon the organization to administer the arbitration, it will be
administered by the AAA. The arbitrators may not amend or disregard any
provision of this section.
11.4.7 The expenses of arbitration will be borne by the party against whom the
decision is rendered, or apportioned in accordance with the decision of the
arbitrators if there is a compromise decision. Judgment upon any award may be
entered in any court of competent jurisdiction. All notices from one party to
the other relating to any arbitration under this Agreement will be in writing
and will be effective if given in accordance with Section 11.11 below.
11.5 CUMULATIVE RIGHTS. Any specific right or remedy provided in this Agreement
will not be exclusive but will be cumulative upon all other rights and remedies
set forth in this section and allowed under applicable law.
11.6 GOVERNING LAW. This Agreement will be governed by the laws of the State
Florida applicable to Agreements made and fully performed in the State of
Florida by Florida residents. Disputes not resolved by mediation or arbitration
will be heard in the appropriate federal or state courts located in Martin
County,Florida.
11.7 ENTIRE AGREEMENT. The parties acknowledge that this Agreement expresses
their entire understanding and agreement, and that there have been no
warranties, representations, covenants or understandings made by either party to
the other except such as are expressly set forth in this section. The parties
further acknowledge that this Agreement supersedes, terminates and otherwise
renders null and void any and all prior agreements or contracts, whether written
or oral, entered into between both parties.
11.8 COUNTERPARTS. This Agreement may be executed in multiple counterparts, any
one of which will be deemed an original, but all of which will constitute one
and the same instrument.
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11.9 ATTORNEY FEES. If either party is required to retain the services of any
attorney to enforce or otherwise litigate or defend any matter or claim arising
out of or in connection with this Agreement, then the prevailing party will be
entitled to recover from the other party, in addition to any other relief
awarded or granted, its reasonable costs and expenses (including attorneys'
fees) incurred in the proceeding.
11.10 SEVERABILITY. If any provision of this Agreement is found invalid or
unenforceable under judicial decree or decision, the remainder will remain valid
and enforceable according to its terms.
11.11 NOTICES. All notices, demands or consents required or permitted under this
Agreement will be in writing and will be delivered, sent by facsimile or mailed
certified return receipt requested to the respective parties at the addresses
set forth above or at such other address as such party will specify to the other
party in writing. Any notice required or permitted to be given by the provisions
of this Agreement will be conclusively deemed to have been received on the day
it is delivered to that party by U.S. Mail with Acknowledgment of Receipt or by
any commercial courier providing equivalent acknowledgment of receipt.
Captions and section headings used in this Agreement are for convenience
only and are not a part of this Agreement and will not be used in construing it.
We have carefully reviewed this Agreement and agree to and accept its terms
and conditions. We are executing this Agreement as of the day and year first
written above.
CONTRACTOR CLIENT
s/ Jacqueline McGuire s/ Dennis McGuire
7
<PAGE>
EXHIBIT A
CUSTOMER LIST
1. All of the Shipyards and Shipmanagement Companies worlwide.
2. All of the Above Ground Storage Facilities and companies servicing those
industries.
8
<PAGE>
EXHIBIT B
REPRESENTATIVE'S COMPENSATION
1. The Representative's compensation for work performed under this Agreement
will be as follows: The Representative will be entitled to a total commission
for each individual sale of the Products arranged solely or jointly through the
Representative equal to 2 % percent of the net invoice of each sale. The
Representative will be paid a pro rata portion of each partial or total
payment(s) made by a customer on any individual sale equal to the applicable
commission percentage provided above.
The term "net invoice price" will mean the total invoice price that the
sale is invoiced to the customer, but excluding shipping and mailing costs,
taxes, insurance, any allowances or discounts granted to the customer and all
charges for installation or instruction.
1.1 The Client will pay to the Representative a weekly draw towards the above
fee of $1,500.00 for the period 4-2-98 thru 12/31/98. Increasing to $2,000 per
week beginning 1/1/99 thru 12/31/99. The total amount of the draw will be
deducted from the fee paid above at the end of each year.
2. There will be deducted from any sums due the Representative:
2.1 An amount equal to commissions previously paid or credited to the
Representative on sales where all or substantially all of the consideration
relating to that has since been returned to the customer or in the event only a
portion of such consideration has since been returned to the customer or
allowances have been credited to the customer by the Company, the pro rata
amount of previously paid or credited commissions on such returns or allowances.
2.2 A pro rata amount of commissions previously paid or credited to the
Representative on sales where less than the total purchase price of the Products
is ultimately paid by the customer, whether by reason of the customers
bankruptcy, insolvency or for any other reason whatsoever, in the Company's
judgment, renders the account uncollectible in whole or in part, in which event,
if any sums are later realized upon the uncollectible account, the Company will
pay the Representative the percentage of comniission applicable to the amount of
the actual collection.
3. When an order received by the Company through the Representative has been
influenced by another of the Company's sales representatives, or the Product is
to be delivered outside of the Representative's business area, the Company may,
in its sole discretion, but will not be required to, designate a commission
split between the Representative and any one or more other authorized sales
representative(s), as the case may be. Any such commission split may be
discussed with the sales representatives involved, but the Company will make any
decision in its own sole discretion, and any such decision will be final.
9
- -207- ORGANIZED UNDER THE LAWS OF SHARES
THE STATE OF FLORIDA -100,000-
ULTRASTRIP SYSTEMS INC.
THIS CERTIFIES THAT __________________________________________ is hereby issued
________________ fully paid and non-assessable Shares of the Capital Stock of
the above named Corporation transferrable only on the books of the Corporation
by the holder hereof in person or by duly authorized Attorney upon surrender of
this Certificate properly endorsed.
IN WITNESS WHEREOF, the said Corporation has caused this Certificate to be
signed by its duly authorized officers and its Corporate Seal to be hereunto
affixed this ______________ day of ______________ A.D., 19____
_____________________________________ _______________________________
SECRETARY PRESIDENT
See legend on reverse
- --------------------------------------------------------------------------------
For Value Received, __________ hereby sell, assign and transfer unto
___________ ________________________________ Shares represented by the within
Certificate, and do hereby irrevocably constitute and appoint
____________________________ Attorney to transfer the said Shares on the books
of the within named Corporation with full power of substitution in the premises.
In presence of _______________________________
_______________________________
NOTICE: THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
The securities represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of 1933 or
applicable state laws. Such securities may not be sold, transferred,
pledged or hypothecated unless the registration provisions of said Act and
laws have been complied with or unless the Corporation has received an
opinion of its counsel that such registration is not required.
EXHIBIT 2.5
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR APPLICABLE STATE SECURITIES LAW. THESE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ASSIGNED OR OTHERWISE DISPOSED OF, AND NO TRANSFER OF THE
SECURITIES WILL BE MADE BY THE COMPANY OR ITS TRANSFER AGENT IN THE ABSENCE OF
SUCH REGISTRATION OR AN OPTION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
ULTRASTRIP SYSTEMS INC.
COMMON STOCK PURCHASE WARRANT
ULTRASTRIP SYSTEMS INC., a Florida corporation (the "Company"), hereby agrees
that, for value received, MIRKIN & WOOLF, P.A., a Florida professional
association, or its assigns, is entitled, subject to the terms set forth below,
to purchase from the Company at any time or from time to time before 4:30 p.m.,
Florida time, on April 30, 2001 four hundred thirteen thousand four hundred
fifty (413,450) shares of the $.0l par value common stock of the Company, at an
exercise price of two dollars and fifty cents ($2.50) per share, subject to
adjustment as provided herein.
1. EXERCISE OF WARRANT. The purchase rights granted by this Warrant shall be
exercised (in minimum quantities of 100 shares) by the holder surrendering this
Warrant with the form of exercise document attached hereto duly executed by such
holder, to the Company at its principal office, accompanied by a check payable
to the order of the Company for the purchase price payable in respect of the
shares being purchased. If less than all of the shares purchasable hereunder are
purchased, the Company will, upon such exercise, execute and deliver to the
holder hereof a new Warrant (dated the date hereof) evidencing the number of
shares not so purchased. As soon as practicable after the exercise of this
Warrant and payment of the purchase price, the Company will cause to be issued
in the name of and delivered to the holder hereof, or as such holder may direct,
a certificate or certificates representing the shares purchased upon such
exercise, The Company may require that such certificate or certificates contain
on the face thereof a legend substantially as follows:
"The transfer of the shares represented by this certificate is restricted
pursuant to the terms of a Common Stock Purchase Warrant dated April 3,
1998 issued by Ultrastrip Systems Inc., a copy of which is available for
inspection at the offices of Ultrastrip Systems Inc. Transfer may not be
made except in accordance with the terms of the Common Stock Purchase
Warrant. In addition, no sale, offer to sell or transfer of the shares
represented by this certificate shall be made unless a Registration
Statement under the Securities Act of 1933, as amended (the "Act"), with
respect to such shares is then in effect or an exemption from the
registration requirements of the Act is then in fact applicable to such
shares."
<PAGE>
2. NEGOTIABILITY AND TRANSFER. This Warrant is issued upon the following terms,
to which each holder hereof consents and agrees:
(a) Until this Warrant is duly transferred on the books of the Company,
the Company may treat the registered holder of this Warrant as the absolute
owner hereof for all purposes without being affected by any notice to the
contrary.
(b) Each successive holder of this Warrant, or of any portion of the
rights represented thereby, shall be bound by the terms and conditions set forth
herein.
3. ANTI-DILUTION ADJUSTMENTS. If the Company shall at any time hereafter
subdivide or combine its outstanding shares of common stock, or declare a
dividend payable in common stock, the exercise price hereof in effect
immediately prior to the subdivision, combination or record date for such
dividend payable in common stock shall forthwith be proportionately increased,
in the case of combination, or proportionately decreased, in the case of
subdivision or declaration of a dividend payable in common stock, and the number
of shares purchasable upon exercise of this Warrant immediately preceding such
event shall be changed to the number determined by dividing the then current
exercise price by the exercise price as adjusted after such subdivision,
combination or dividend payable in common stock and against the number of shares
purchasable upon the exercise of this Warrant immediately preceding such event,
so as to achieve an exercise price and number of shares purchasable after such
event proportional to such exercise price and number of shares purchasable
immediately preceding such event.
No fractional shares are to be issued upon the exercise of the Warrant, but the
Company shall pay a cash adjustment in respect of any fraction of a share which
would otherwise be issuable in an amount equal to the same fraction of the
market price per share of common stock on the day of exercise as determined in
good faith by the Company.
In case of any capital reorganization or any reclassification of the common
stock of the Company, or in the case of any consolidation with or merger of the
Company into or with another entity or the sale of all or substantially all of
its assets to another entity, which is effected in such a manner that the
holders of common stock shall be entitled to receive stock, securities or assets
with respect to or in exchange for common stock, then, as a part of such
reorganization, reclassification, consolidation,
-2-
<PAGE>
merger or sale, as the case may be, lawful provision shall be made so that the
holder of the Warrant shall have the right thereafter to receive, upon the
exercise hereof, the kind and amount of shares of stock or other securities or
property which the holder would have been entitled to receive if, immediately
prior to such reorganization, reclassification, consolidation, merger or sale,
the holder had held the number of shares which were then purchasable upon the
exercise of the Warrant. In any such case, appropriate adjustment (as determined
in good faith by the Board of Directors of the Company) shall be made in the
application of the provisions set forth herein with respect to the rights and
interest thereafter of the holder of the warrant, to the end that the provisions
set forth herein (including provisions with respect to adjustments of the
exercise price) shall thereafter be applicable, as nearly as reasonably may be,
in relation to any shares of stock or other property thereafter deliverable upon
the exercise of the Warrant.
When any adjustment is required to be made in the exercise price, initial or
adjusted, the Company shall forthwith determine the new exercise price, and (a)
prepare and retain on file a statement describing in reasonable detail the
method used in arriving at the new exercise price, and (b) cause a copy of such
statement to be mailed to the holder of the Warrant as of a date within ten
(10)days after the date when the circumstances giving rise to the adjustment
occurred.
4. REGISTRATION RIGHTS. Prior to making any disposition of the Warrant or of any
shares purchased upon exercise of the Warrant, the holder will give written
notice to the Company describing briefly the manner of any such proposed
disposition. The holder will not make any such disposition until (i) the Company
has notified him that, in the opinion of its counsel, registration under the Act
is not required with respect to such disposition, or (ii) a Registration
Statement covering the proposed distribution has been filed by the Company and
has become effective. The Company agrees that, upon receipt of written notice
from the holder hereof with respect to such proposed distribution, it will use
its best efforts, in consultation with the holder's counsel, to ascertain as
promptly as possible whether or not registration is required, and will advise
the holder promptly with respect thereto, and the holder will cooperate in
providing the Company with information necessary to make such determination.
If, at any time prior to the expiration of five (5) years from the date hereof,
the Company shall propose to file any Registration Statement (other than on
Forms S-4, S-8 or any other similarly inappropriate form of Registration
Statement) under the Act covering a public offering of the Company's securities,
it will notify the holder hereof at least thirty (30) days prior to each such
filing and will include in the Registration Statement (to the extent permitted
by applicable regulation), the shares pur-
-3-
<PAGE>
chased by the holder or purchasable by the holder upon the exercise of the
Warrant to the extent requested by the holder hereof. Notwithstanding the
foregoing, the number of shares of the holder of the Warrant proposed to be
registered thereby shall be reduced pro rata with any other selling shareholder
(other than the Company) upon the reasonable request of the managing underwriter
of such offering. If the Registration Statement filed pursuant to such thirty
(30) day notice has not become effective within six (6) months following the
date such notice is given to the holder hereof, the Company must again notify
such holder in the manner provided above.
At any time prior to the expiration of five (5) years from the date hereof, and
provided that a registration statement on Form S-3 (or its equivalent) is then
available to the Company, and on a one-time basis only, if the holder of the
Warrant and/or the shares acquired upon exercise of the Warrant requests the
registration of the shares on Form S-3 (or its equivalent), the Company shall
promptly thereafter use its best efforts to effect the registration under the
Act of all such shares which such holder requests in writing to be so
registered, and in a manner corresponding to the methods of distribution
described in such holder's request.
All expenses of any such registrations referred to in this Section 4 shall be
borne by the Company.
Upon effectiveness of a Registration Statement which includes common stock
purchased or purchasable upon the exercise of this Warrant in accordance with a
valid demand under this Section 4, the rights under this Warrant of the holders
to make another such demand shall terminate. Each purchaser or transferee of a
portion of this Warrant is responsible to determine whether his or her demand
rights under this paragraph have been terminated by such an exercise. Any
Warrants issued upon transfers subsequent to such an exercise shall have all of
the demand registration provisions under this Section 4 deleted.
The Company will mail to each record holder, at the last known post office
address, written notice of any exercise of the rights granted under this
paragraph 4, by certified or registered mail, return receipt requested, and each
holder shall have twenty (20) days from the date of deposit of such notice in
the U.S. Mail to notify the Company in writing whether such holder wishes to
join in such exercise.
The Company will furnish the holder hereof with a reasonable number of copies of
any prospectus included in such filings and will amend or supplement the same as
required during the period of required use thereof. The Company will maintain,
at its expense, the effectiveness of any Registration Statement filed by the
Company, whether or not at the request of the holder hereof, for at least
-4-
<PAGE>
six (6) months following the effective date thereof.
In the case of the filing of any Registration Statement, and to the extent
permissible under the Act and controlling precedent thereunder, the Company and
the holder hereof shall provide cross indemnification agreements to each other
in customary scope covering the accuracy and completeness of the information
furnished by each.
The holder of the Warrant agrees to cooperate with the Company in the
preparation and filing of any such Registration Statement, and in the furnishing
of information concerning the holder for inclusion therein, or in any efforts by
the Company to establish that the proposed sale is exempt under the Act as to
any proposed distribution.
5. RIGHT TO CONVERT.
(a) The holder of this Warrant shall have the right to require the Company
to convert this Warrant (the "Conversion Right") at any time prior to its
expiration, into common stock as provided for in this Section 5. Upon exercise
of the Conversion Right, the Company shall deliver to the holder (without
payment by the holder of any exercise price) that number of shares of common
stock equal to the quotient obtained by dividing (x) the value of the Warrant at
the time the Conversion Right is exercised (determined by subtracting the
exercise price for one Warrant share in effect immediately prior to the exercise
of the Conversion Right from the Fair Market Value (as determined below) for one
Warrant share immediately prior to the exercise of the Conversion Right) by (y)
the Fair Market Value of one share of common stock immediately prior to the
exercise of the Conversion Right.
(b) The Conversion Right may be exercised by the holder, at any time or
from time to time, prior to its expiration, on any business day, by delivering a
written notice (the "Conversion Notice") to the Company at the offices of the
Company exercising the Conversion Right and specifying (i) the total number of
shares of common stock the holder will purchase pursuant to such conversion, and
(ii) a place and a date not less than five (5) nor more than twenty (20)
business days from the date of the Conversion Notice for the closing of such
purchase.
(c) At any closing under Section 5(b) hereof, (i) the holder will
surrender the Warrant, (ii) the Company will deliver to the holder a certificate
or certificates for the number of shares of common stock issuable upon such
conversion, together with cash in lieu of any fraction of a share, and (iii) the
Company will deliver to the holder a new Warrant representing the number of
shares, if any, with respect to which the Warrant shall not have been converted.
-5-
<PAGE>
(d) "Fair Market Value" of a share of common stock as of a particular date
(the "Determination Date") shall mean:
(i) If the Company's common stock is traded on an exchange or is
quoted on The Nasdaq National Market or The Nasdaq SmallCap Market, then the
average closing or last sale prices, respectively, reported for the ten (10)
business days immediately preceding the Determination Date.
(ii) If the Company's common stock is not traded on an exchange or
on The Nasdaq National Market or The Nasdaq SmallCap Market, but is traded in
the over-the-counter market, then the average of the closing bid and asked
prices reported for the ten (10) business days immediately preceding the
Determination Date.
(iii) If the Company's common stock is not publicly traded and there
has been a bona fide sale for cash on an arm's-length basis within forty-five
(45) days prior to the Determination Date of such common stock by the Company
privately to one or more investors unaffiliated with the Company (a
"Qualifying Sale") , then the most recent such sales price; and
(iv) If the Company's common stock is not publicly traded and there
has been no Qualifying Sale, then the appraised fair market value of such
stock as determined by mutual agreement of the Company and the holder of the
Warrant; if the parties cannot agree on such valuation, then each of the
Company and the holder shall select an arbitrator and such arbitrators shall
select a third, and such three arbitrators shall determine (in accordance with
the Commercial Arbitration Rules of the American Arbitration Association, such
expenses to be borne equally by the parties) the fair market value (without
any discount for lack of marketability or minority interest) of a share of
common stock of the Company.
6. NOTICES. The Company shall mail to the registered holder of the Warrant, at
his or her last known post office address appearing on the books of the
Company, not less than fifteen (15) days prior to the date on which (a) a
record will be taken for the purpose of determining the holders of common
stock entitled to dividends (other than cash dividends) or subscription
rights, or (b) a record will be taken (or in lieu thereof, the transfer books
will be closed) for the purpose of determining the holders of common stock
entitled to notice of and to vote at a meeting of shareholders at which any
capital reorganization, reclassification of common stock, consolidation,
merger, dissolution, liquidation, winding up or sale of substantially all of
the Company's assets shall be considered and acted upon.
7. RESERVATION OF COMMON STOCK. A number of shares of common stock
sufficient to provide for the exercise of the warrant and the shares of common
stock included therein upon the basis herein
-6-
<PAGE>
set forth shall at all times be reserved for the exercise hereof.
8. MISCELLANEOUS. Whenever reference is made herein to the issue or sale of
shares of common stock, the terms "common stock" or "shares" shall include any
stock of any class of the Company other than preferred stock that has a fixed
limit on dividends and a fixed amount payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company.
The Company will not, by amendment of its Articles of Incorporation or through
reorganization, consolidation, merger, dissolution or sale of assets, or by any
other voluntary act or deed, avoid or seek to avoid the observance or
performance of any of the covenants, stipulations or conditions to be observed
or performed hereunder by the Company, but will, at all times in good faith,
assist, insofar as it is able, in the carrying out of all provisions hereof and
in the taking of all other action which may be necessary in order to protect the
rights of the holder hereof against dilution.
Upon written request of the holder of this Warrant, the Company will promptly
provide such holder with a then current written list of the names and addresses
of all holders of warrants originally issued under the terms of, and concurrent
with, this Warrant.
The representations, warranties and agreements herein contained shall survive
the exercise of this Warrant. References to the "holder of" include the
immediate holder of shares purchased on the exercise of this Warrant, and the
word "holder" shall include the plural thereof. This Warrant shall be
interpreted under the laws of the State of Florida.
All shares or other securities issued upon the exercise of the Warrant shall be
validly issued, fully paid and non-assessable, and the Company will pay all
taxes in respect of the issuer hereof.
Notwithstanding anything contained herein to the contrary, the holder of this
Warrant shall not be deemed a shareholder of the Company for any
purpose-whatsoever until and unless this Warrant is duly exercised or converted.
IN WITNESS WHEREOF, this Warrant has been duly executed by Ultrastrip Systems
Inc., as of the 3rd day of April, 1998.
ULTRASTRIP SYSTEMS INC.
By: S/ DENNIS E. MCGUIRE
Dennis E. McGuire, President
-7-
EXHIBIT 2.6
OPTION TO PURCHASE ASSSTS AND LICENSE AGREEMENT
OPTION TO PURCHASE ASSETS AND LICENSE AGREEMENT made this 19th day of June, 1998
by and between ULTRASTRIP SYSTEMS INC., Florida corporation ("Ultrastrip") , and
AMCLEAN, INC., a Florida corporation ("Amclean").
RECITALS:
A. Amclean owns as assignee from inventor Dennis E. McGuire U.S. Patent No.
5,628,271 issued on May 13,1997 entitled Apparatus and Method for Removing
Coatings from the Hulls of Vessels using Ultra-high Pressure Water (the
"Patent") .
B. Ultrastrip desires to commercialize the invention which is the subject of the
patent (the "Invention") and to acquire the patent.
C. The parties desire to set forth their business agreement herein.
NOW THEREFORE, based on the foregoing and in consideration of the mutual
obligations and covenants hereinafter set forth, the parties agree as follows:
1. GRANT OF OPTION. Amclean hereby grants Ultrastrip the option (the "Option")
to acquire the Patent and related materials including, without limitation, all
tangible and intangible assets, devices, instruments, components, intellectual
properties, know-how, tooling, drawings, engineering drawings, process
instructions, quality assurance tests, inventory, materials, supplier lists,
vendor lists and related items (collectively, the "Assets") sufficient to enable
Ultrastrip to commence production of an apparatus embodying the Invention.
2. OPTION FEE. Ultrastrip hereby pays Amclean a fee (the "Option FEE") of one
hundred dollars for the option and commits to pay Amclean fifty thousand dollars
($50,000) each time Ultrastrip, acting pursuant to the License defined and
described in Section 12 below, manufactures an apparatus embodying the invention
and is fully paid therefor, until a maximum of two million dollars ($2,000,000)
shall have been paid by Ultrastrip to Amclean (the "Maximum").
3. OPTION TERM. The term of the option (the "Option Period") shall commence on
the date hereof and expire ten (10) years herefrom, unless extended by mutual
written agreement of the parties hereto or in the event of exercise of the
Option by Ultrastrip.
4. OPTION EXERCISE. The Option may be exercised at any time during the Option
Period after the Maximum shall have been paid by written notice from Ultrastrip
to Amclean specifying a date for closing the transaction (the "Closing Date"),
which shall occur at least ten (10) days but no more than sixty (60) days
subsequent to the date of notice.
5. PURCHASE OF ASSETS. Upon the exercise of the Option, and subject to all the
conditions herein and the performance by each of the parties hereto of their
respective obligations hereunder, Ultrastrip shall purchase
<PAGE>
from Amclean, and Amclean shall assign to Ultrastrip, on the Closing Date, all
of Amclean's right, title and interest in the Assets (the "Closing") .
6. NON-ASSUMPTION OF LIABILITIES. Ultrastrip shall not assume, discharge or be
liable for any debts, liabilities or obligations of Amclean including, without
limitation, any liabilities or obligations of Amclean to its creditors or equity
owners; liabilities or obligations of Amclean with respect to any transactions;
taxes or other liabilities or obligations of Amclean incurred in connection with
the grant of the Option or sale of the Assets pursuant to this Agreement; or
contingent liabilities or obligations of Anclean.
7. PURCHASE PRICE. The purchase price for the Assets to be acquired upon
exercise of the Option shall be two million dollars ($2,000,000).
8. CLOSING DETAILS.
(a) The Closing shall take place at the principal office of Ultrastrip at
9:00 a.m. on the Closing Date.
(b) At the Closing, Amclean shall deliver to Ultrastrip such bills of
sale, endorsements, assignments and other good and sufficient instruments of
conveyance and transfer in form satisfactory to Ultrastrip's counsel and
containing full warranties of title, as shall be effective to vest in Ultrastrip
good, absolute and marketable title to the Assets, free and clear of all liens,
charges, encumbrances and restrictions whatsoever and all other data relating to
the Assets.
(c) Simultaneously with the delivery of the documents required by
subsection (b) above, Amclean shall take all such steps as may be requisite to
put Ultrastrip in actual possession, operation and control of the Assets.
(d) All applicable sales, transfer, documentary, use, filing and other
taxes and fees that may be due or payable as a result of the conveyance,
assignment, transfer and delivery of the Assets shall be paid by Amclean subject
to its right in good faith to contest the validity or amount thereof by proper
proceedings at its expense.
(e) From time to time through the first anniversary of the Closing, at the
request and expense of Ultrastrip, Amclean shall execute and deliver to
Ultrastrip such other instruments of conveyance and transfer and take such other
action as Ultrastrip may reasonably require more effectively to convey, transfer
to and vest in Ultrastrip, and to put Ultrastrip in possession of, the Assets.
9. REPRESENTATIONS AND WARRANTIES OF AMCLEAN. Amclean hereby represents and
warrants to Ultrastrip as follows;
(a) Amclean is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida and has all requisite power and
authority to carry on its business as it is presently being conducted, to enter
into this Agreement and to carry out and perform the provisions hereof.
(b) During the Option Period, Amclean shall not sell, assign, convey,
transfer, mortgage, pledge, subject to lien, charge or encumbrance or grant a
security interest in any of the Assets or fail to pay any legitimate debt,
obligation or claim.
2
<PAGE>
(c) Except as set forth on attached Schedule 9 (c), there are no actions,
suits or proceedings pending or threatened against Amclean that could materially
adversely affect any of its properties or rights, at law or in equity, or before
any governmental agency or instrumentality, domestic or foreign, nor is Amclean
or any of its officers or directors aware of any facts which to its or their
knowledge might result in any such action, suit or proceeding. Amclean is not in
default with respect to any order or decree of any court or of any such
governmental agency or instrumentality by which it is bound.
(d) Except as set forth on attached Schedule 9 (d), Amclean is not in
violation of any material term or provision of any charter, bylaw, mortgage,
indenture, contract, agreement, lease, instrument, judgment, decree, order,
statute, rule or regulation by which it is bound. The execution and delivery of
and performance and compliance with the provisions of this Agreement will not
result in the violation of or be in conflict with or constitute a default under
any such provision or result in the creation of any mortgage, lien, encumbrance
or charge upon any of the Assets.
(e) The granting of the Option and the related potential transfer of the
Assets have been approved and consented to by the Board of Directors of Amclean
and by the requisite number of holders of its outstanding capital stock and all
action required by any applicable law or otherwise by the owners of Amclean with
regard to such transfer of the Assets by Amclean has been appropriately
authorized.
(f) Amclean has good, absolute and marketable title to the Assets, not
subject to any lease, mortgage, pledge, lien, charge, security interest,
encumbrance or restriction whatsoever. The tangible components of the Assets are
in good condition and repair.
(g) Amclean has no knowledge of any claim or reason to believe that it is
or may be infringing or otherwise acting adversely to the rights of any person
under or in respect of any patent, trademark, service mark, trade name,
copyright, license or other similar intangible right. Amclean is not obligated
or under any liability whatsoever to make any payments by way of royalties, fees
or otherwise to any owner or licensee of or other claimant to any patent,
trademark, trade name, copyright or other intangible asset with respect to the
use thereof or in connection with the conduct of its business or otherwise.
10. CONDUCT OF BUSINESS. During the Option Period, Amclean will not enter into
any contracts or make any commitments affecting the Assets without the express
prior written consent of Ultrastrip.
11. REPRESENTATIONS AND WARRANTIES OF ULTRASTRIP. Ultrastrip hereby represents
and warrants to Amclean as follows:
(a) Ultrastrip is duly organized, validly existing and in good standing
under the laws of the State of Florida and has been duly authorized and
empowered to execute, deliver and perform any documents or obligations
contemplated herein in connection with the purchase of the Assets hereunder.
(b) Neither the execution of any of such documents nor the performance of
any of the obligations contemplated therein will constitute a default under or
conflict with or result in a breach or violation of the terms, conditions or
provisions of any agreement, contract, instrument, law, order, judgment, decree,
award, ordinance, regulation, rule or other legal restriction to which Ultra-
strip is or at the Closing will be a party or by which any of its properties is
or will then be bound.
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(c) Ultrastrip shall execute any documents reasonably requested by
Amclean's counsel to complete its acquisition of the Assets should it exercise
the option.
(d) All agreements and documents, when executed and delivered by
Ultrastrip, shall constitute valid and legally binding obligations enforceable
in accordance with their respective terms.
12. LICENSE.
(a) During the Option Period Amclean grants unto Ultrastrip an exclusive
worldwide fully-paid license to make, have made, use, exploit and otherwise
commercialize the Patent and the Invention. Ultrastrip may grant sublicenses
hereunder. Ownership rights to any developments or improvements of the
invention, whether patentable or not, made by Ultrastrip and not infringing on
any claims of the Patent, shall rest solely in Ultrastrip.
(b) Amclean shall maintain the Patent so as to maintain the viability of
the license herein granted.
13. INDEMNIFICATION.
(a) Amclean shall, and hereby agrees to, indemnify and hold Ultrastrip
harmless against and in respect of any damages, as hereinafter defined, suffered
by Ultrastrip arising from:
(i) Any inaccurate representation or warranty made by Amclean in or
under this Agreement;
(ii) breach or default in the performance by Amclean of any of the
covenants to be performed by it hereunder; and
(iii) any debts, liabilities or obligations of Amclean, whether
accrued, absolute, contingent or otherwise, due or to become due, existing
on the Closing that encumber or may encumber the Assets.
(b) Ultrastrip shall, and hereby agrees to, indemnify and hold Amclean
harmless against and in respect of any damages, as hereinafter defined, suffered
Amclean arising from:
(i) any inaccurate representation or warranty made by Ultrastrip in
or under this Agreement; or
(ii) breach or default in the performance by Ultrastrip of any of
the covenants to be performed by it hereunder.
(c) "Damages" as used herein shall include any claims, actions, demands,
losses, costs, expenses, liabilities (joint or several), penalties and damages,
including counsel fees incurred in investigating or in attempting to avoid the
same or oppose the imposition thereof.
(d) Each of the parties hereto agrees that promptly upon receipt by it of
notice of any demand, assertion, claim, action or proceeding, judicial or
otherwise, with respect to any matter as to which the other has agreed to
indemnify it under the provisions of this Agreement, the party receiving such
notice ("the "Indemnified Party") shall give prompt notice thereof in writing to
the other (the "Indemnifying Party") together, in each instance, with a
statement of such information respecting such demand,
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assertion, claim, action or proceeding as the Indemnified Party shall then have.
The Indemnifying Party reserves the right to contest and defend by all
appropriate legal or other proceedings any demand. assertion, claim, action or
proceeding with respect to which it has been called upon to indemnify the
Indemnified Party under the provisions of this Agreement; provided, however,
that:
(i) notice of the intention to contest shall be delivered to the
Indemnified Party within five (5) business days from the date of receipt
by the Indemnifying Party of notice of the assertion of such demand,
assertion, claim, action or proceeding;
(ii) the Indemnifying Party shall pay all costs and expenses of such
contest, including all attorneys, and accountants' fees and the cost of
any bond required by law to be posted in connection with such contest; and
(iii) such contest shall be conducted by reputable attorneys
employed by the Indemnifying Party at its cost and expense, but the
Indemnified Party shall have the right to participate in such proceedings
and to be represented by attorneys of its own choosing, at its own cost
and expense.
If after such opportunity the Indemnifying Party does not elect to contest, or
does not contest, in any such proceedings, the Indemnifying Party shall be bound
by the results obtained by the Indemnified Party, including without 1imitation
any out-of-court settlement or compromise.
If the Indemnifying Party elects to contest any demand, assertion or claim, it
shall not be obligated to make any payments to the Indemnified Party with
respect thereto until the legal remedies available to either party, as the case
may be, with respect to such demand, assertion or claim shall have been
exhausted.
If requested by the Indemnifying Party, the Indemnified Party agrees to
cooperate with the Indemnifying Party in contesting any demand, assertion or
claim which the Indemnifying Party elects to contest, or, if appropriate, in the
making of any counterclaim or demand against the person asserting such demand,
assertion or claim or any cross-complaint against any person; but the
Indemnifying Party shall reimburse the Indemnified Party for any expenses
incurred by the Indemnified Party in so cooperating with the Indemnifying Party.
If such counterclaim or cross-complaint results in receipt by the Indemnified
Party of amounts in excess of the amount which is subject to any such demand,
assertion or claim, such excess shall first be applied to the payment of the
reasonable costs and expenses of the Indemnifying Party incurred in connection
with such contest, counterclaim or cross-complaint, and the balance retained by
the Indemnified Party.
14. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in and made pursuant to this Agreement shall survive until
the first anniversary of the termination of the Option Period.
15. MISCELLANEOUS.
(a) This Agreement may only be amended or modified by an instrument in
writing executed by Ultrastrip and Amclean.
(b) Any notices or other communications required or permitted hereunder
shall be sufficiently given if delivered personally or sent by registered or
certified mail, postage prepaid, addressed to:
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To Amclean: Matthew L. Jones, Ezq.
Jones & Madden
759 S. Federal Highway #212
Stuart, FL 34994
To Ultrastrip: Dennis S. McGuire
Ultrastrip Systems Inc.
P.O. Box 2173
Stuart, FL 34995
or to such other address as shall be furnished in writing by either party to the
other and shall be deemed to have been given as of the date so personally
delivered or three (3) days after being deposited in the United States mail,
postage pre-paid, as the case may be.
(c) The laws of the State of Florida, both substantive and remedial, shall
govern the validity of this Agreement, the construction of its terms and the
interpretation of the rights and duties of the parties.
(d) Section headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
(e) All the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of, and be enforceable by, Amclean and Ultrastrip and
their successors and valid assigns. Amclean may not assign this Agreement, in
whole or in part.
(f) This Agreement constitute the entire agreement between the parties
hereto, and there are no agreements, understandings, restrictions, warranties or
representations between the parties other than those set forth herein.
6
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreempnt on the day and year
first above written.
Witnesses: AMCLEAN, INC.
s/ Melissa C. Shacker By: s/ Jacqueline McGuire
Name: Jacqueline McGuire
Title: Pres.
ULTRA5TRIP SYSTEMS INC.
s/ Melissa C. Shacker By: s/ Dennis E. McGuire, Pres.
Dennis E. McGuire, President
EXHIBIT 2.7
UNITED STATES DEPARTMENT OF COMMERCE
FILING RECEIPT PATENT AND TRADEMARK OFFICE
ASSISTANT SECRETARY AND COMMISSIONER
[SEAL] OF PATENTS AND TRADEMARKS
WASHINGTON, D.C. 20231
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<CAPTION>
APPLICATION NUMBER FILING DATE GRP ART UNIT FIL FEE REC'D ATTORNEY DOCKET NO. DRWGS TOT CL IND CL
- ------------------ ----------- ------------ ------------- ------------------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
08/854,384 05/12/97 3102 $385.00 22560-Y 7 20 3
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
GARY M NATH
NATH & ASSOCIATES
1835 K STREET NW
SUITE 750
WASHINGTON DC 20006-1203
Receipt is acknowledged of this nonprovisional patent Application. It will be
considered in its order and you will be notified as to the results of the
examination. Be sure to provide the U.S. APPLICATION NUMBER, FILING DATE, NAME
OF APPLICANT, and TITLE OF INVENTION when inquiring about this application. Fees
transmitted by check or draft are subject to collection. Please verify the
accuracy of the data presented on this receipt. If an error is noted on this
Filing Receipt, please write to the Application Processing Division's Customer
Correction Branch within 10 days of receipt. Please provide a copy of the Filing
Receipt with the changes noted thereon.
Applicant(s)
DENNIS MCGUIRE, STUART, FL.
CONTINUING DATA AS CLAIMED BY APPLICANT-
THIS APPLN IS A CON OF 08/408,382 03/22/95 PAT 5,628,2761
FOREIGN FILING LICENSE GRANTED 10/08/97 *SMALL ENTITY*
TITLE
APPARATUS AND METHOD FOR REMOVING COATINGS FROM THE HULLS OF VESSELS USING
ULTRA-HIGH PRESSURE WATER
PRELIMINARY CLASS: 114
<PAGE>
<TABLE>
<S> <C>
UNITED STATES PATENT [19] [ii] Patent Number: 5,628,271
McGuire [45] Date of Patent: May 13, 1997
- -------------------------------------------------------------------------------------------------------------------------
[54] APPARATUS AND METHOD FOR 4,690,092 9/1987 Rabuse.
REMOVING COATINGS FROM THE HULLS 4,697,536 10/1987 Hirata.
OF VESSELS USING ULTRA-HIGH 4,789,037 12/1988 Kneebone.
PRESSURE WATER 4,809,383 3/1989 Urakami.
4.890,567 1/1990 Caduff.
4,926,775 5/1990 Andorsen.
[75] Inventor: Dennis McGuire, Stuart, Fla. 4,997,052 3/1991 Urakami.
5,007,210 4/1991 Urakami.
[73} Assignee: Amclean, Inc., Stuart, Fla. 5,028,O04 7/1991 Hammelman ........................... 15/322
5,048,445 9/1991 Lever et al. .
[21] Appl. No.: 408,382 5,175,222 12/1992 Betso et al. .
5,287,584 2/1994 Skinner.
[22] Filed: Mar. 22, 1995 5,321,869 6/1994 Kaempf .............................. 15/322
[51] Int. Cl.(6) ................. B63B 59/08 FOREIGN PATENT DOCUMENTS
[52] U.S. Cl. .............. 114/222; 239/251
[58] Field of Search ....... 114/222, 144 A; 268782 11/1987 Japan ............................... 108/901
239/251;15/1.7,322; 180/234,901 679131 12/1991 Switzerland ......................... 114/222
[56] References Cited PRIMARY EXAMINER--SHERMAN BASINGER
Attorney, Agent, or Firm--Nath & Associates; Gary M. Nath
U.S. PATENT DOCUMENTS [57] ABSTRACT
2,241,722 6/1941 Hurlbert, Jr.
3,035,655 5/1962 Lee ......... 180/234 A method and apparatus for removing coatings from the hull
3,436,261 4/1969 Mitchell. of a ship using a steered magnet vehicle supported by the
3,609,612 9/1971 Gibbling. adhesion force only of a permanent magnet to the surface to
3,638,600 2/1972 Modrey. be treated. Using an ultra-high pressure water jet system and
3,682,265 8/1972 Jorapla et al. . method for removing coatings. paint. deposits. organic and
3,689,927 9/1972 Boston ..... 114/144 A inorganic from hulls without harming the substrate material
3,777,834 12/1973 Hiraoka et al. . and to provide a superior surface for the application of
3,922,991 12/1975 Woods. subsequent coatings.
4,168,562 9/1979 Maasberg ..... 15/322
4,574,722 4/1985 Orita et al. .
4,674,949 6/1987 Kroczynski. 10 Claims, 4 Drawing Sheets
</TABLE>
<PAGE>
APPARATUS AND METHOD FOR
REMOVING COATINGS FROM THE HULLS
OF VESSELS USING ULTRA-HIGH
PRESSURE WATER
BACKGROUND OF THE INVENTION
1. Field of the Invention
The present invention pertains to a method for the removal of surface
coatings from various surfaces. In particular this invention pertains to a
method of using ultra-high pressure water to remove surface coatings, including
paint to expose the metal hulls of ships. A remotely controlled platform having
a ferro-magnetic and motive means moves the ultra-high pressure nozzles about
the surface to be treated. An alternate embodiment of the invention incorporates
a recycling and waste disposal system whereby the water is recovered the coating
particulate removed and the water reused as an abrasive.
2. Description of the Prior Art
The marine environment is extremely demanding on coatings applied to hulls
or other bodies, which are submerged for long periods of time. The corrosive
properties of salt water are well known and in this hostile environment even the
most durable coating must be replaced periodically.
The degree of surface roughness of submerged portions of ships has a great
effect on both ship fuel efficiency and the speed which can be achieved at a
given propeller revolution rate. Roughness can be caused by marine growth
("fouling") degradation of full coatings, and deterioration of unpainted
surfaces such as propeller blades. For commercial, private or military ships,
losses in ship performance can have a variety of consequences, both financial
and in terms of meeting scheduled arrival dates.
Although the following examples are for a VLCC Very Large Crude Carrier; an
oil tanker, with the following typical approximate specification: 272,000 tons
deadweight; total engine horsepower (at 90 RPM propeller rate): 32,700 hp
examples could be given for any size or type of marine craft. A typical trip for
a VLCC is from the U.S. Gulf Coast to the eastern end of the Mediterranean Sea.
This round trip normally takes about 40 days. However, with an increased surface
roughness causing a loss in peak speed of only 1 knot (nautical mile per hour).
2 1/2 days would be added to the trip.
Considering the effect of surface roughness on efficiency for a VLCC, each
increase of 1RPM in propeller rotation rate corresponds to an increase in ship
speed of about 0.15 knot. Thus, a roughness caused loss of one know would
require an increase of about 6.7 RPM to maintain the same ship speed (i.e., to
overcome the increased ship resistance). This increased propeller speed requires
20 tons (metric ton) per day of extra fuel.
Marine engineers estimate that an increase in the average roughness of a
ship's hull of about 30 microns (peak-to-peak RMS roughness) can cause a drop in
peak achievable speed of about one percent. A new gull can have a surface
roughness of about 160 micron and a deteriorating coating can be about 280
micron. This roughness increase could cause a four percent drop, which for a
typical 16 knot VLCC peak speed is a loss of about 0.64 knots.
The foregoing clearly demonstrates the economic importance of maintaining
the submerged surfaces of ships in as smooth a condition as is practical.
Therefore providing a means to maintain surface smoothness of ships is a
practical and economical objective for ship owners.
Fouling of ship bottoms not only reduces fuel efficiency thus increasing
operating costs, but also attacks the integrity of the coating which leads to
corrosion and metal fatigue. Corrosion damage to hulls can lead to costly
repairs, loss of operating time and if unchecked, to the premature scrapping of
the vessel. Environmental laws hamper-fouling prevention by limiting the types
of paint which may be used especially those containing organotin/tributylin and
cuprous oxides which are most effective in controlling calcareous fouling. Thus,
because the most effective preventive measures against fouling are unavailable
it has become necessary to replace coatings more frequently. The coatings, which
can be applied under current laws, need a superior surface finish in order to
extend the life of the coating on the surface. Astute ship owners realize a
superior surface finish extends the life of the coatings and reduces dry-dock
time and expenses in the future.
There are presently three existing cleaning methods which are used for
cleaning ship's hulls:
1. Chemical paint strippers are currently used to remove small patches on a
ship's hull as is required for non-destructive testing and access cuts.
This method is unsuitable for cleaning the entire ship's hull and it
creates large amounts of toxic waste for each area cleared;
2. Abrasive grit blasting is used for cleaning the entire hull. Current
hull cleaning methods using abrasive grit generate tons of abrasive that
must be detoxified if used on the organic paint, and millions of gallons
of water that must be treated annually. Satisfactory methods have not
been developed to manage the organic waste during the application of the
paint removal of spent paints in dry-dock prior to repainting, and
detoxification of the grit and other wastes generated during the present
abrasive blasting method used; and
3. High pressure water jet systems which use water pressures of less than
10,000 psi are usually applied by a hand held nozzle. The prior art
water nozzles lacked sufficient pressure, typically less than 10,000 PSI
to completely remove paint from the surface of a hull. Another major
disadvantage of prior art rotary water jets is the slow rate at which
multiple layers, or very hard coatings can be removed.
To fully remove coatings from hull it is necessary to construct platforms
for operators from wooden bars or rods, or by suspending gondolas or cradles or
the like from above, when blasting. Thus, the operators must work by hand on
such platforms located at a considerable height. For this reason, the operation
is dangerous and, in addition to this, the efficiency of removal is extremely
low. To overcome this disadvantage, various steered vehicles have been proposed.
However, such vehicles heretofore proposed have proved to be unsatisfactory, for
example, in that when the vehicle is driven over a surface having a certain
curvature instead of a flat plane of a structural member, it is not possible to
obtain a sufficient adhesion force for supporting its weight and further that it
tended to sometimes damage the operation surface due to the contact pressure
exerted between the vehicle and the operation surface.
Some vehicles use permanent magnet means and/or electromagnet means mounted
thereon, and are driven my magnetic belts provided on both sides of the vehicle.
Changing the direction of travel of a vehicle of this type requires remarkable
skills as the apparatus has the tendency of slipping at the contact area either
of the right or left belts during the turn of the vehicle owing to the change in
the contact pressure between the vehicle and the wall surface.
Some examples of the prior art are:
Hirosha et al U.S. Pat no. 3.777.834 discloses a magnet vehicle supportedly
adhered to and adapted to run over an inclined wall surface of a structural
member made of a strong magnetic material such as iron and steel, characterized
in that the vehicle can be altered of its direction of travel as desired on the
surface.
Woods U.S. Pat. No. 3.92.991 discloses an apparatus for cleaning relatively
large, flat, ferro-metallic surfaces of corrosion, scale, paint and undesirable
marine growths, the apparatus having high pressure fluid blasting assembly,
magnetic attachment device, driving motor, and a signal generating and receiving
system for guiding the apparatus along the surface to be cleaned.
Cadutt U.S. Pat. No. 4.890.567 discloses a robotically operated device using
an ultrasonic transducer for the cleaning of ship's hulls. The device may also
be used for spraying paints or other chemicals on the sides of ships' hulls. The
device includes a housing having an open face adapted to confront a ship's hull
and apparatus disposed in the housing for impinging a flow of fluid through the
open face onto the ship's hull. An ultrasonic transducer is disposed in the
housing for impinging a flow of ultrasonic energy through the open face onto the
ship's hull. Apparatus connected to the outside of the housing retains the
housing on the ship's hull and moves the housing on the ship's hull. In an
additional embodiment, apparatus for spraying paint or other chemicals on a
ship's hull is disposed in the housing.
Andosen U.S. Pat. No. 4.926.775 discloses a cleaning apparatus for use under
water, particularly for cleaning vertical surfaces which are foulded by marine
organisms. One or more nozzles for spraying water at high pressure at a surface
to be cleaned are arranged on a rotary disc-shaped unit where the rotation axis
is intended to be generally perpendicular to the surface which is to be cleaned.
The nozzles are obliquely located in a circular plane so that the rotating unit
can rotate. Beyond the periphery of the rotating unit there is a casing which
forms an annular chamber with an outlet which is at least partly directed away
from the surface which is to be cleaned. The annular chamber is formed from two
generally cylindrical or truncated conical casing units which are positioned at
a radial distance from each other with their internal ends concentric with
respect to the nozzle holder.
Rabuse U.S. Pat. No. 4.690.092 discloses an aquatic scrubbing device for
attachment to an underwater ferromagnetic surface incorporates a carriage, at
least two independently energizable electromagnets supported by the carriage for
rotation about mutually parallel axes, and at least one drive motor for rotating
the electromagnets relative to the carriage, whereby alternative energization of
the electromagnets and the drive motors will cause a walking motion of the
carriage when attached to the ferro-magnetic surface, the device incorporating
rotable scrubbers for removing aquatic growths from that surface.
Lever et al U.S. Pat. No. 5.048.445 discloses providing a fluid jet system
for underwater maintenance of a ship hull. The fluid jet system includes an open
frame cart having a high pressure fluid nozzle manifold for cleaning and
smoothing the submerged hull of the ship. One or more thruster assemblies are
provided on the cart for deploying the cart through the water, advancing the
cart along the hull and maintaining the cart in contact with the hull. Control
of the thruster assembly and fluid flow manifold can be effected from either
longitudinal end of the cart. Flexible fluid flow lines interconnect the cart to
one or more remote sources of pressurized fluid so that the cart is
independently operable. A system for deploying the cart is further provided and
includes the necessary high pressure pumps, devices for hose deployment and
retrieval, and diver supplies. Finally, a system of underwater maintenance of
ship performance is provided whereby the condition of the hull of the ship is
monitored and areas to be cleaned and smoothed re determined in order of
priority based upon projected improvement to ship performance.
Hirana U.S. Pat. No. 4.697.536 provides for vessels and the like which
require cleaning either periodically or when ever a need arises to remove
various living things such as seaweed's and shells or contaminants such as oil
for the sake of appearance and proper performance. Divers were conventionally
employed to manually remove them one by one using a scraper as one means to
remove such substances. Such manual operation is, however, extremely
inefficient, involving great amounts of time and labor especially for large
ships. The main body of a cleaning apparatus is pressed against an underwater
object to be cleaned by means of impellers which are provided substantially at
the center of the main body and driven to rotate, whereby cleaning brushes which
are provided at the bottom of the cleaning apparatus concentrically with the
impellers are rotated to remove substances adherent to the object while the
cleaning apparatus is manipulated to run on the object's surface. Two pairs of
an impeller and a brush are provided in parallel at the normal angle to the
direction of forward and backward movement of the cleaning apparatus. The
impellers and the brushes are driven the same driving source as they are
connected to the impellers by means of a universal joint.
Urakami U.S. Pat. No. 4.809.383 discloses a device capable of adhering to a
wall surface by suction by the pressure of an ambient fluid and treating the
wall surface, which comprises a pressure receiver member and a partion defining
a pressure reduction zone in cooperation with the pressure receiver member and
the wall surface. In one aspect, the partition has a sealing function of
preventing inflow of a large amount of an outside fluid into the pressure
reduction zone, and a treating function of treating the wall surface by being
moved in a required manner. In another aspect, the partition has the above
sealing function, and a travelling function of moving the device, by being
rotated about an axis of rotation slightly inclined to an axis which is
substantially perpendicular to the wall surface.
Okita et al U.S. Pat. No. 4.574.772 discloses an underwater cleaning
apparatus having a carrier, a plurality of wheels for shifting the position of
the carrier along a submerged surface, a plurality of rotary brushes carried by
the carrier and adapted to clean the submerged surface, and a source of power
for rotating the rotary brushes. The apparatus further comprises flexible
partion wall members for transmitting torque to the rotary brushes and forming
reduced pressure chambers communicated with spaces formed by bristles of
respective rotary brushes. As the rotary brushes rotate, the rotary brushes and
the partition wall members in combination serve to provide vacuum to produce a
force to press the carrier through the wheels onto the submerged surface to be
cleaned. In addition, each of the rotary brushes are allowed to individually
follow the configuration of the surface thanks to the flexibility of the
partition wall members.
In view of the substantial cost and time savings afforded by maintaining the
submerged surfaces of ships in as smooth a condition as possible and by avoiding
frequent dry docking and in view of the problems with previous systems for ship
hull paint removal, it is an object of the invention to provide a system and
method for removing coatings from the metal substrate of a hull.
SUMMARY OF THE INVENTION
A preferred embodiment of this invention is an apparatus for removing
coatings from the ferro-magnetic hulls of ships, comprising body means having a
frame means and a cowling means, seal means on said cowling means for providing
selling contact between said apparatus and said hull, motor means, steering
means, a plurality of magneticcally tractive, steerable motive means connected
to said motor means, wherein said motor means drives said pluraliity of
magnetically tractive steerable motive means, ultra high pressure water jet
means attached to said body means, said ultra-high pressure waer means directed
toward said ship hull, and a conduit means passing through said cowling means
and communicating with said ultra-high pressure means directed toward said ship
hull, and a conduit means passing through said cowling means and communicating
with said ultra-high pressure water means for the passage of ultra-high pressure
water, and with said motor means.
After preferred embodiment of the apparatus for removing coatings from the
ferro-magnetic hulls of ships comprises body means having a frame means and a
cowling means, a seal means on said cowling means for providing sealing contact
between said apparatus and said hull, a motor means, wherein said motor means is
an electric motor and further having an electrical power transmission means
contained within said conduit and further comprises a gearbox, a plurality of
drive shafts having a first and second ends, a plurality of universal joints
having a first and second end said universal joint first end connected to said
gearbox and said universal joint second end connected to said drive shaft first
end, and wherein said drive shaft second end is attached to said magnetically
tractive motive means, a steering means, wherein said steering means is by means
of remote control radio signals received by said steering means, a plurality of
magnetically tractive, steerable motive means connected to said motor means,
wherein said motor means drives said plurality of magnetically tractive
steerable motive means and wherein said magnetically tractive steerable motive
means comprises eight wheels in four pairs, wherein each wheel is independently
steerable, a ultra-high pressure water jet means attached to said body means,
said utra-high pressure water means directed toward said ship hull, wherein the
ultra-high pressure water jet means consists of a t least one rotatable nozzle
having orifices, and wherein said water pressure is at least about 30,000 PSI
and preferably at least about 35,000 PSI, said ultra-high pressure water jet
means having a circular outer sheath, having inner and outer walls and distal
and proximate ends, said outer sheath being disposed about said nozzle, said
outer sheath inner wall and the exterior of said nozzle defining a generally
conical chamber open at both ends, said outer sheath distal end having a water
sealing means to retain said high pressure water after impingement, a suction
means, said circular outer sheath proximate end attached to said suction means
for removing said water after impingement, a conduit means passing through said
cowling means and communicating with said ultra-high pressure water means for
the passage of ultra-high pressure water, and said motor means, a water
collection means for collecting said ultra-high pressure water after impingement
on said hull and said coating particles removed from said hull, a particle
separating means for separating said water from said surface coating particles,
a transferring means to transfer said water and said coating particles to said
particle separating means from said water collection means, a particulate
collecting means for collecting said coating particles, a water storage means
for holding said water for reuse as an abrasive after separating said coating
particles, a pumping means to pump said water to said water storage means, a
recycling means for transferring water from the water storage means to the water
jet after removal of said particulate of surface coatings.
A preferred method for removing surface coatings from a metal vessel hull
comprises providing a nozzle for directing ultra-high pressure water against the
full of a ship, said nozzle mounted to the body of magnetically tractive,
steerable, motorized platform, providing ultra-high pressure water and power to
said motorized platform via a conduit, and steering said motorized platform via
a steering means to move said motorized platform supporting said ultra-high
pressure nozzle over the hull of the ship while said ultra-high pressure water
removes said coating and where said ultra high pressure water is at least 30,000
PSI and most preferably at least about 35,000 PSI.
Another preferred method for removing surface coatings, including pain from
a metal vessel hull comprises providing a nozzle for directing ultra-high
pressure water against the hull of a ship, said nozzle mounted to the body of
magnetically tractive steerable, motorized platform, providing ultra high
pressure water and power to said motorized platform via a conduit, and steering
said motorized platform via a steering means to move said motorized platforms
supporting said ultra-high pressure nozzle over the hull of the ship while said
ultra-high pressure water removes said coating and where said ultra-high
pressure water is at least about 30,000 PSI and most preferably at least about
35,000 PSI collecting said ultra-high pressure water after impingement on said
hull and containing coating particles removed from said hull by collecting
means, separating said water from said coating particles by means of a particle
separating mean, transferring said water and said coating particles to said
particle separating means from said water collection means by a transferring
means, collecting said particulate by means of a particulate collecting means,
storing said water in a water storage means for holding said water for reuse as
an abrasive after separating said coating particulate, pumping said water to
said water storage means by means of a water pumping means, and recycling said
water by a recycling means for transferring water from said water storage means
to the water jet after removal of said particulate of surface coatings.
Other objects, features and advantages of the present invention will become
apparent to those skilled in the art from the following detailed description and
attached drawings.
BRIEF DESCRIPTION OF THE DRAWINGS
FIG. 1 is a view of a ship in drydock with the coatings being removed.
FIG. 2. Is an elevation view of the motorized tractive platform, with
cowling and skirt.
FIG.3. is a cutaway view of the motorized tractive platform.
FIG.4 is an overhead view of the motorized platform with cowling, skirt or
umbilical. FIG.5 is a cross sectional view of the nozzle assembly.
FIG. 6 is a frontal view of FIG. 5 along the lines 6-6
FIG. 7 is a schematic of the coating removal and recycling system.
DETAILED DESCRIPTION OF THE
PREFERRED EMBODIMENTS
The present inventive subject matter relates to removing surface coatings
from a hull of a vessel and more particularly to removing the surface coating
all the way to the bare metal surface, also referred to as the "white metal".
The process basically involves the use of water at very high pressures which
when directed to the hull strips away all surface coating layers. A remotely
controlled platform having a ferro-magnetic and motive means moves the
ultra-high pressure nozzles about the surface to be treated. As used herein the
term "surface coating" refers to all materials that are adhered o the white
metal and include without limitation, paint, salt, minerals, rust, dirt, plant
and animal growth matter such as algae and barnacles, welding material and
materials used to patch the surface of the hulls to prevent water leads, and
mixtures thereof.
The present invention provides a steered magnet vehicle which can alter its
direction of travel with high reliability, ease, and in a considerably
restricted area. The magnetic vehicle which can be supported on a structural
member by the adhesion force only of a permenent magnet means. tHis invention
also enables the use of a ultra-high pressure water jet system and method for
removing coatings, paint, deposits, organic and inorganic from hulls without
harming the substrate material and to provide a superior surface for the
application of subsequent coatings. This invention improves on standard water
jet technology, which uses direct impingement of the water to loosen and remove
the coating by directing complimentary streams of water whereby the surface is
cleaned not only by the blase effect of the water but also by the tangential
water forces of the concentric circles which is more efficient than removing
coatings only by direct impingement. Additionally, the present invention reduces
the amount of waste product that is environmentally hazardous. Water is the sole
abrasive and as such it can be filtered, the hazardous particulate removed, and
then recycled and returned to be reused as a stripper or disposed of without
polluting the environment. Thus, hull stripping, which previously produced tons
of contaminated abrasive and required expensive hauling of the contaminate to an
approved landfill for disposal, now only produces a few fifty-five gallon drums
of stripped paint which is more readily disposed of.
Further, it has been found that not only is there no noticeable damage to
the full surface, but the cleaning operation itself is accomplished very
efficiently, and the hull surface is virtually free of contaminants. Traditional
methods of stripping paint from the ship often times scored the metal substrate,
leaving peaks and valleys on the surface of the metal. Coats of paint
subsequently applied to the metal adhered to the peaks, leaving gaps between the
paint and the substrate which weaken the adhesive strength of the coating. The
present invention does not score the surface of the metal, thus allowing uniform
adhesion.
The present invention also removes contaminants, especially chlorides and
sulfides, preventing the future encroachment of rust on the cleaned area which
also improves the adhesion characteristics of paint coatings subsequently
applied to the stripped metal. Traditional abrasive blasting leaves surface
steel with chloride levels higher than the present process. Furthermore,
traditional abrasive blasting produces chloride levels of 20 micrograms per
cubic centimeter, as compared to less than 10 and preferably less than 5
micrograms per cubic centimeter with the present process. It is recognized that
there is a direct correlation between coatings failures and high salt levels.
The more salt remaining on a prepared surface, the lower the adhesion levels,
and the shorter the life of the coating. The present process removed 7 more salt
and surface contaminants than traditional abrasive blasting and significantly
extends the life of the coating. As such, the present process is: (1) less
expensive than traditional abrasive blasting: (2) faster than traditional
abrasive blasting: (3) produces a far superior surface than traditional abrasive
blasting: and (4) significantly extends the life of coatings and reduces drydock
time.
FIG.1 depicts ship 1 in drydock 2 where coating 3 is to be removed from a
metal hull. A motorized, steerable, magnetically tractive platform 4 supports
the ultra-high pressure water nozzle 20 and moves it about the surface to be
treated. Umbilical cable 5 provides power and ultra-high pressure water and
vacuum suction to platform 4 from support structure 6.
FIG. 2 is and exterior elevational view of motorized, steerable,
magnetically tractive platform 4 umbilical cable 5 attaches platform 4 by means
of rotable and flexible connector 12. Connector 12 freely moves so that
umbilical cable 5 will hang vertically from the platform to the floor of drydock
2. Thus allowing for unimpeded passage of high pressure water and power up to
platform 4. And return of the water after use with particulate matter. Umbilical
cable 5 carries the ultra high pressure water, vacuum, electricalutility and
pneumatic lines. Cowling 14 is a lightweight shell, made of fiberglass, which
covers platform 4 skirt 10 is attached to the base of cowling 14 and is made of
any flexible material such as rubber, nylon, silicone resins and plastics which
will provide a generally watertight seal between skirt 10 and the ship hull. The
purpose of skirt 10 is to capture any excess water not suctioned by the vacuum
system described below.
FIG. 3 is a cutaway view of platform 4 wherein nozzle 20 is shown. Umbilical
cable 5 has conduit 22 for carrying ultra-high pressure water to nozzle 20.
After the ultra-high pressure water has impinged on ship 1 the water, and any
particulate suspended therein, are collected via suction line 24 for recycling.
Electrical power enters via cable 26. If pneumatic power is required to operate
platform 4 a pneumatic cable is added to umbicical cable 5.
FIG. 4 depicts platform 4 without cowling 14 and skirt 10. Platform 4 is
made of lightweight aluminum or stainless steel, having a load bearing capacity
of about two hundred pounds. Nozzle 20 is inserted into aperture 66. In
crossbeam 28. Motor 30 drives wheels 34 which are steered by steering units 32.
The steering unit 32 may receive signals via control wires or via radio control
signals for a remote unit. The radio signals which are received and interpreted
by the steering unit 32 direct the apparatus to travel over the hull of the
ship, thereby allowing the apparatus to alter its direction with a high degree
of reliability and ease, even in confined spaces. The apparatus can be directed
from a location away from the ship being cleaned, thereby offering an increased
degree of safety to the operator. The steering unit 32 may receive signals via
control wires or via radio signals from the remote unit. A preferred embodiment
of wheels 34 are 4 1/4" by 2 1/2" three pole neodymium-iron-boron having a
holding power in excess of two thousand pounds. Motor 30 should provide
sufficient power to move a combined vehicle weight of two hundred pounds and
overcome the static intertia of the magnetic tractive force of wheels 34. A
preferred embodiment uses a 24 V DC permanent magnet electric motor producing
4000 RPM, an integrated gearbox having gearing to the output shaft of motor 10
of spiral bevel gear to reduce the TPM by a factor of 40 to 1, and turn a
wormgear drive, producing sufficient torque to overcome the magnetic tractive
force. Universal joints, not shown, connect the drive shaft to the gearbox to
allow for flexibility and contact between the drive shaft and gearing during
motion of the device over the hull. Methods which can be used to drive platform
4 need not be limited to that described above. Pneumatic or hydraulic motors are
also alternator sources of power and wheels 34 can be directly driven from one
motor for each pair. One motor for multiple pairs of wheels or one motor for all
wheels.
FIG. 5 is cutaway view of ultra-high pressure water nozzle 20. Nozzle 20
consists of outer sheath 30. The inner wall of which and exterior of the
rotating section 32 defining a generally conical chamber for suctioning and
collecting the water after impingement. Including any coating particles removed
and suspended in the water seal 42 consisting of synthetic or natural fibers,
rubber, silicon resins or any other suitable material to retain the high
pressure water after impingement. Until removal by section. Rotating section 32
contains orifices 36. Connected to high pressure water after impingement input
line 22.
The central axis of each individual orifice 36. Is oblique to central axis
of nozzle 20. By selecting the lateral displacement of orifice 36. In
combination with the orifice oblique angle. The individual annular streams of
pressurized water can be converged at a focal point to remove paint from the
surface through direct and transverse force vectors. By carefully controlling
the angles at which orifices 36 are positioned. And the rotational forces
resulting therefrom. it is possible to utilize ultra-high water pressure to
effectively clean the working surface being treated. Because the forward thrust
of the water suffers some. Efficiency loss through the nozzle the greater the
thrust of the water streams on the working surface. The force of the water
leaving the orifices 36 causes rotating section 32 to spin about bearing 40. An
alternate embodiment uses compressed air or an electric motor to spin nozzle
rotating section 32.
The water jet is directed at ship 1 at sufficient pressure until the surface
coating including paint. Is totally removed and bare "white metal" remains. The
water jet should be at a pressure which is greater than 30,000 psi and it has
been found that a preferred practical renege is between 35,000 and 60,000 psi.
even though still higher pressure may also be used with caution.
For the procedures described herein. The diameter of the rotating nozzle
section 32 is preferably in the range of about eight inches to sixteen inches
with a preferred diameter of twelve inches. The diameter of twelve inches. The
distance between the orifice opening 44 on the nozzle rotating section 32 and
the surface of the substance to be cleaned is preferably such that the water
velocity at impact is sufficient to remove at least a majority of the coating
material within the water stream impact pattern provided by single pass of one
nozzle 20. To accomplish this result. The discharge velocity at the orifice
opening 44 is preferably sufficient to provide a water velocity at least about
1.500 ft/sec.. Higher impact velocities may be desirable and may be achieved by
increasing the water pressure for example up to about 3,000 ft/sec. By achieving
these velocities it is possible to clean the surface of the ship hull at a rate
of about 150 to about 400 ft2/hour. And preferably from about 200 to 300
ft2/hour. A plurality of nozzles 20 arranged to discharge a plurality of water
jets to increase coverage of the area to be stripped. The water flow utilized
can be as low as about five gallons per minute and as high as fifty gallons per
minute.
FIG 6 is one example of orifice 44 configuration. Nozzles configured with
orifices with the greatest oblique angle farthest from the centerline of the
nozzle 48 have constantly diverging streams of water. This configuration
provides the maximum coverage per sweep of the nozzle 20 but may not provide
sufficient cutting action for very deep or hard coatings. Nozzles with the
orifices 44 having the lesser oblique angles farthest from centerline 48 will
have water streams that coverage before diverging. This configuration will
provide the maximum cutting action, however over a smaller area.
FIG 7 depicts the preferred embodiment which includes a recycling system for
the water and waste disposal. The recycling system may be integrated into the
drydock 2 structure or inserted in a water-tight container 6 for use on site to
avoid degradation. The water is pressurized by pumping means 58 which may be any
conventional high compression pump desired. Important characteristics of high
pressure water pump 58 include its capacity and horsepower. Which are closely
related to the flow rate and pressure at which water is ejected through the
nozzle 20. Rotating nozzle section 32 in conjunction with a ultra -high pressure
pump 58 will provide sufficient pressure to remove the paint while minimizing
the reactive thrust of the water leaving the nozzle opening to backward motion
pressure enable lower tractive forces to hold platform 4 to the hull 1. Without
being limited to particular ultra high pressure pump system. It should be
recognized any commercially available positive displacement.pump such as a
plunger may be used herein. An exemplary plunger pump would be one that is rated
5.5 gpm ( 20.82 Ipm) at 30,000 psi (2.075 bar).
Particulate blasted from the ship hull during cleaning are vacuum removed by
lines 24 and section created by the intake of pump 52. The output pressure of
pump 52 sends the water and particulate to filter means 54 to remove the
particles form the water. Filtering means 54 may be any standard design capable
of handling large volumes of liquid containing suspended particles. The
particles of paint are collected in waste storage tank 56. For further
processing and handling. The water is transferred by pump 53 to holding tank 62
to be used again as a stripper agent. Additional water may be added to holding
tank 62 via water inlet 80 as required. The particulate matter is removed from
waste storage tank 56 via hopper 68 for proper hazardous waste disposal. When
needed during cleaning the water is removed from holding tank 62 and passed by
pump 58 to nozzle 20 to be applied to the hull surface to be treated.
The above combination of a movable platform and ultra-high pressure water
jet coating removal results in a superior cleaning rate which is less labor
intensive and a :cleaner" surface to apply the next coating to.
While the above description has been towards a method paint from the surface
of the hull of a waterborne vessel. It is within the scope of the present
invention to remove paint from other surfaces such as rolling stock,
automobiles, trucks, aircraft, storage tanks, or other structures that would
benefit from ultra-high water pressure cleaning
The invention being thus described. It will be obvious that the same may be
varied in many ways. Such variations are not to be regarded as departure from
the spirit and scope of the invention and all such modifications are intended to
be included within he scope of the following claims.
What is claimed is:
1. An apparatus for removing coatings from the ferromagnetic hull of ships,
comprising:
body means having a frame means and a cowling means; steal means on said
cowling means for providing sealing
body means having a frame means and a cowling means; seal means on said
cowling means for providing sealing contact between said apparatus and
said hull;
motor means;
steering means;
a plurality of magnetically tractive, steerable motive means connected to
said motor means wherein said motor means drives said plurality of
magnetically tractive steerable motive means;
ultra-high pressure water jet means attached to said body means, said
ultra-high pressure water means directed toward said ship hull:
conduit means passing through said cowling means and communicating with
a) said ultra-high pressure water means for the passage of ultra-high
pressure water. and
b) with said motor means;
a water collection means for collecting the water after impingement on
said hull along with the coating particles removed from said hull;
particulate collecting means for collecting said coating particles;
water storage means for holding water for reuse as an abrasive after
separating said coating particles; and pumping means to pump the water
to said water storage means.
2. The apparatus of claim 1. Further comprising
a recycling means to the water jet after removal of said coating particles
of surface coatings.
3. A method for removing surface coatings from a metal vessel hull. Which
comprises;
providing a rotating nozzle for directing an ultra-high pressure water
stream against the hull of a ship, said rotating nozzle being mounted to
the body of a steerable, motorized platform, said platform being
supported by a plurality of magnetically tractive wheels. said nozzle
comprises a liner member having a plurality of equidistant, radically
arranged orifices each connected to a supply of high pressure water an
outer sheath extending longitudinally over said inner member. Conical
area defined by the inner walls of said outer sheath and the exterior
surface of said inner member, whereby said conical area forms a chamber
for suctioning water and coating particles removed from said vessel hull
during the cleaning process;
providing ultra-high pressure water and power to said motorized platform via
a conduit: and steering said motorized platform via a conduit; and
steering means to move said motorized platform supporting said ultrahigh
pressure nozzle over the hull of the ship while said ultra-high pressure
water stream removes said surface coatings.
4. The method of claim 3. Wherein said ultra-high pressure water is
delivered at pressures between 30,000 PSI and about 35,000 PSI inclusive.
5. The method of claim 4. Further comprising: collecting said ultra-high
pressure water after impingement on said hull via said chamber defined in said
rotating nozzle, said water containing coating particles removed from said hull
by collecting means;
separating said water from said coating particles by means of a particle
separating means;
transferring said water and said coating particles to said particle
separating means from said water collection means by a transferring
means;
collecting said particulate by means of particulate collecting means;
storing said water in a water storage means for holding said water for reuse
as an abrasive after separating said coating particulate;
pumping said water to said water storage means by means of water pumping
means;
a recycling means for transferring water form said water storage means to
the rotating nozzle after removal of said particulate of surface
coatings; and
directing the ultra-high pressure water stream to remove the surface coating
from said vessel hull to fully expose the hull metal substance.
6. The method of claim 3. Further comprising:
collecting said ultra-high pressure water after impingement on said hull via
said chamber defined in said rotating nozzle, said water containing
coating particles removed from said hull by collecting means:
transferring said water and said coating particles to said particle
separating means from said water collection means by a transferring
means;
collecting said particulate by means of a particulate collecting means;
storing said water in a water storage means for nothing said water for reuse
as an abrasive after separating said coating particulate; pumping said
water to said water storage means but means of a water pumping means;
and
a recycling means for transferring water from said water storage means to
the rotating nozzle after removal of said particulate of surface
coatings.
7. An apparatus for removing coatings from the ferromagnetic hulls of ships,
comprising:
body means having a frame means and a cowling means: seal means on said
cowling means for providing sealing contact between said apparatus and
said hull;
motor means;
steering means;
a plurality of magnetically tractive. Steerable motive means connected to
said motor means. Wherein said motor means drives said plurality of
magnetically tractive steerable motive means;
ultra-high pressure water jet means attached to said body means, said
ultra-high pressure water means directed toward said ship hull and
comprising at least one rotatable nozzle having a rotatable symmetrical
housing having a central axis. Proximate and distal ends and further
having a central conduit for the passage of pressurized water and
plurality of orifices in said housing distal end wherein each of said
orifices is connected to said central conduit by a radial port. Wherein
the orifices have a central axis which is oblique to the central axis of
said housing and wherein the passage of the water through said orifice
forms an annular stream of water, the amount, the trust of said annular
stream imparting a rotational force to said housing, and said oblique
angle of said orifice central axis directs the stream of pressurized
water to a working surface wherein said annular streams cooperatively
score said working surface; and
conduit means passing through said cowling means and communicating with
a) said ultra-high pressure water means for the passage of ultra-high
pressure water, and
b) with said motor means.
8.The apparatus of claim 7. Wherein said nozzle further comprises:
a circular outer sheath, having inner and outer wall and distal and
proximate ends, said outer sheath being disposed about said nozzle
housing, said outer sheath inner wall and the exterior of said nozzle
housing defining a generally conical chamber, said outer sheath distal
end having a water sealing means to retain said high pressure water
impingement; and
a suction means, said circular outer sheath proximate end attached to said
suction means for removing the water.
9. The apparatus of claim 8. Wherein said water sealing means is comprised
of natural synthetic bristles.
10.The apparatus of claim 8. Where said water sealing means is comprised of
at least one of the group of rubber, nylon, silicone resins and plastics.
