UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of
1934
Date of Report (Date of earliest event reported): December 22, 1998
UNITED SHIELDS CORPORATION
(Name of small business issuer in its charter)
Colorado 33-11062-D 84-1049047
(State or other (Commission (I.R.S. Employer
jurisdiction of file number) Identification No.)
incorporation or organization)
655 Eden Park Drive, Cincinnati, Ohio 45202
(Address of principal executive offices)
Registrant's telephone number, including area code (513) 241-7470
Item 1. CHANGE IN CONTROL OF REGISTRANT
On December 22, 1998, Trinity Capital Group, LLC ("TCG"), of which
William A. Frey III ("Frey") is Chief Manager, purchased a total of
5,278,882 shares of common stock of United Shields Corporation (the
"Company") held by T. J. Tully, the Company's sole Director,
Chairman and Chief Executive Officer, and certain related family
members (Gay N. Tully, James F. Tully, Andrew T. Tully and Nola E.
Tully, collectively with T.J. Tully, the "Tully Group") in exchange
for cash consideration of $527,889. In a separate transaction, on
November 18, 1998, Frey purchased 300,000 shares of the Company's
common stock held by James F. Tully in exchange for cash
consideration of $30,000.
In addition, in contemplation of the purchase of 5,278,882 shares of
common stock by Frey from the Tully Group on December 22, 1998, the
Company issued a warrant on November 30, 1998 to Frey to purchase
6,000,000 shares of the Company's common stock at $0.14 per share.
The warrant is immediately exercisable and expires on October 30,
2003. As a result of this transaction, the Company anticipates that
it will record a non-cash expense representing the value of the
warrant in an amount approximately equal to $450,000.
Further, effective January 1, 1999, the Company's Board of Directors has
elected Frey as Chairman of the Board of Directors and Chief Executive Officer.
T.J. Tully, who remains as a director, has been elected Vice Chairman. Donald
T. Zimmerman has been promoted to President and Chief Operating Officer and
elected to the Board of Directors.
The following table sets forth information with respect to the
beneficial ownership of shares of all classes of the Company's
voting securities as of December 22, 1998 of each executive officer,
each Director, and each stockholder known to be the beneficial owner
of 5% or more of any class of the Company's voting securities and
all officers and Directors as a group after giving effect to: (i)
the purchase of 5,278,882 shares of common stock from the Tully
Group, (ii) the purchase of 300,000 shares of common stock from
James F. Tully by Frey, (iii) the warrant issued to Frey to purchase
6,000,000 shares of common stock, and (iv) the Company's issuance of
4,000,000 shares of its common stock to NAVICAP Corporation
("NAVICAP") in exchange for a $1,000,000 reduction in the principal
amount of indebtedness to NAVICAP referred to in "Item 5. OTHER
EVENTS-Restructuring of Indebtedness to NAVICAP" below:
<TABLE>
<CAPTION>
Prior to Transaction set After Giving Effect to
forth herein Transactions set forth herein
------------------------ -----------------------------
Amount and Amount and
Nature of Percent Nature of Percent
Title of Name and Address of Beneficial of Beneficial of
Class Beneficial Owner Ownership Class Ownership Class
- --------- ------------------- ---------- --------- ------------ --------------
<S> <C> <C> <C> <C> <C>
Common William A. Frey, III 387,500(1) 3.1% 13,266,382(7) 55.3%
Stock Director, Chairman
and Chief Executive
Officer
Common T.J. Tully, Director 2,153,186(2) 16.9% 900,000(8) 5.2%
Stock and Vice Chairman
Common Donald T. Zimmerman, 400,000(3) 3.1% 400,000(3) 2.4%
Stock Director, President
and Chief Operating
Officer
Common Jeffrey A. Pakrosnis, 400,000(3) 3.1% 400,000(3) 2.4%
Stock Chief Financial
Officer
Common Granville G. Valentine, 97,550(4) 0.8% 97,550(4) 0.6%
Stock Senior Vice President
Common NAVICAP Corporation 1,744,780(5) 13.4% 5,444,780(9) 32.6%
Stock
Common Gay N. Tully 2,153,186(2) 16.9% 900,000(8) 5.2%
Stock
Common James F. Tully 1,912,886 15.2% 100,000 0.6%
Stock
Common Andrew T. Tully 1,106,405 8.8% 100,000 0.6%
Stock
Common Nola E. Tully 1,106,405 8.8% 100,000 0.6%
Stock
Common All Directors 3,050,736(6) 22.4% 15,063,932 59.0%
Stock and Officers
</TABLE>
(1) Includes 72,500 shares owned by William A. Frey III ("Frey"),
165,000 and 50,000 shares beneficially owned by Frey through Trinity
Fund VII, LLC and Trinity Healthcare Corporation, respectively, and
warrants to purchase an additional 100,000 shares of the Company's
common stock with an exercise price of $4.00 per share.
(2) Includes 1,040,981 shares owned by T.J. Tully, 912,205 shares
owned by Gay N. Tully and options to purchase an additional 200,000
shares of the Company's common stock with an exercise price of $0.75
per share granted pursuant to the Company's 1998 Long-Term Incentive
Plan ("1998 LTIP").
(3) Comprised of options to purchase 400,000 shares of the Company's
common stock with an exercise price of $0.53 per share granted
pursuant to the Company's 1998 LTIP.
(4) Includes 62,550 shares owned by Granville G. Valentine and
options to purchase an additional 35,000 shares of the Company's
common stock with an exercise price of $3.75 per share granted
pursuant to the Company's 1998 LTIP.
(5) Includes 1,214,270 shares owned by NAVICAP Corporation (f/k/a
Ramsay-Hughes), 65,320 shares owned by John Ramsay, 50,880 shares
owned by Gregory Pitner, each Directors, Officers and/or
shareholders of NAVICAP, 14,310 shares owned by other related
parties of NAVICAP, and warrants to purchase an additional 400,000
shares of the Company's common stock with an exercise price of $4.00
per share.
(6) Excludes 387,500 shares beneficially owned by Frey noted in (1)
above as Frey was neither a Director nor an Officer of the Company
prior to the transactions set forth herein.
(7) Includes 372,500 shares owned by Frey, 165,000 and 50,000 shares
beneficially owned by Frey through Trinity Fund VII, LLC and Trinity
Healthcare Corporation, respectively, warrants held by Frey to
purchase an additional 400,000 and 6,000,000 shares of the Company's
common stock with exercise prices of $4.00 and $0.14 per share,
respectively, 5,278,882 shares beneficially owned by Frey through
Trinity Capital Group, LLC and an option held by Frey to purchase an
additional 1,000,000 shares of the Company's common stock with an
exercise price of $0.56 per share granted pursuant to the Company's
1998 LTIP.
(8) Includes 100,000 shares owned by T.J. Tully, 100,000 shares
owned by Gay N. Tully and options held by T.J. Tully granted
pursuant to the Company's 1998 LTIP to purchase an additional
200,000 and 500,000 shares of the Company's common stock with
exercise prices of $0.75 and $0.50 per share, respectively, the
latter grant of which was made in conjunction with the transaction
set forth in "Item 5. OTHER EVENTS-Sale of UNSC, Inc."
(9) Includes 5,214,270 shares owned by NAVICAP Corporation (f/k/a
Ramsay-Hughes), 65,320 shares owned by John Ramsay, 50,880 shares
owned by Gregory Pitner, each Directors, Officers and/or
shareholders of NAVICAP, 14,310 shares owned by other related
parties of NAVICAP, and warrants to purchase an additional 100,000
shares of the Company's common stock with an exercise price of $4.00
per share.
Item 5. OTHER EVENTS
Restructuring of Indebtedness to NAVICAP
Effective November 30, 1998, the Company and NAVICAP executed an
Amended and Restated Promissory Note to modify the terms of the
currently outstanding longer-term promissory note, which as of
November 30, 1998 was comprised of principal and accrued interest of
$2,440,363 and $289,137, respectively, as follows:
(i) The terms set forth in the Amended and Restated Promissory Note
with NAVICAP provide that accrued interest through November 30, 1998
along with interest for the period December 1, 1998 through December
25, 1998 shall be capitalized as additional principal, after which
time interest will then be payable quarterly at 12% per annum. This
Amended and Restated Promissory Note also provides for a maturity
date of October 30, 2003 and a conversion feature exercisable on or
before December 24, 1998 which allows for any amount of interest
and/or principal up to a maximum of $1,000,000 to be converted into
shares of the Company's common stock at a value of the greater of
$0.25 per share or the current market price on the date of
conversion. On December 4, 1998, NAVICAP exercised its option to
convert $1,000,000 of interest and principal due under the Amended
and Restated Promissory Note in exchange for 4,000,000 shares of the
Company's common stock. After giving effect to the capitalized
interest referred to above and the debt substitution referred to in
(ii) below, the face amount of the Amended and Restated Promissory
Note to NAVICAP is $1,542,203.
(ii) Substitution of $1,193,100 of the aggregate principal and
accrued interest owed to NAVICAP as of November 30, 1998 pursuant to
the longer-term promissory note to Frey ("Frey Note"). Further,
interest for the period December 1, 1998 through December 25, 1998
shall be capitalized as additional principal, after which time
interest will then be payable quarterly at 12% per annum. Also, the
Frey Note provides for a maturity date of October 30, 2003 and a
conversion feature, which allows for any amount of interest and/or
principal to be converted into shares of the Company's common stock
at a value of $0.14 per share. After giving effect to the
capitalized interest referred to above, the face amount of the Frey
Note is $1,203,043.
Acquisition of Additional Working Capital
On November 30, 1998, in anticipation of the transactions described
herein, Frey provided a short-term loan in the amount of $100,300 to
certain members of the Tully Group, which in turn was used for the
purpose of providing a short-term loan ("Tully Loans - 1") in the
same amount to the Company for additional working capital purposes.
The Tully Loans - 1 provide for interest at 11% per annum payable
monthly and a maturity date of February 28, 1999.
On December 22, 1998, in conjunction with the Frey's purchase of
shares of the Company's common stock from the Tully Group set forth
in "Item 1. CHANGE IN CONTROL OF REGISTRANT" above, the Tully Group
agreed to provide additional working capital to the Company in the
form of short-term loans ("Tully Loans - 2") in the amount of
$274,700. The Tully Loans - 2 also provide for interest at 11% per
annum payable monthly and a maturity date of February 28, 1999.
Sale of UNSC, Inc.
Effective November 30, 1998, the Company and T.J. Tully executed an
Agreement providing for the sale of 100% of the outstanding shares
of common stock of UNSC, Inc., a wholly-owned subsidiary of the
Company, to T.J. Tully for monetary consideration of $1 and the
grant of an option to T.J. Tully to purchase 500,000 shares of
the Company's common stock with an exercise price of $0.50 per share
pursuant to the 1998 LTIP.
UNSC, Inc. obtained from In-Flo Liquid Dispensing Corporation ("In-Flo") the
exclusive worldwide marketing rights to sell a collapsible
bottle. UNSC, Inc. was assigned the marketing rights and related
sales agreement by a related party, which was owned by T.J. Tully
and a related family member, both of which were majority
shareholders of the Company, prior to the transactions set forth in
Item 1 - CHANGE IN CONTROL OF REGISTRANT above. The Company paid
$115,000 for these rights which represented the cost to the related
party. The value of these rights was written-off at December 31,
1997 as UNSC, Inc.'s rights were now non-exclusive. The agreement
with In-Flo requires minimum purchase commitments of bottles during
each of the contract years as specified in the agreement in order to
maintain exclusive rights to sell the collapsible bottle. As of
December 31, 1997, UNSC, Inc. recorded $449,577 payable to In-Flo,
which represented the value of minimum purchase commitments for the
year then ended.
As of March 26, 1998, the Company received notice from In-Flo that
it believed UNSC, Inc. was in default of the above agreement as it
had not made any bottle purchases as of January 31, 1998. In-Flo
has stated that it has the right to terminate the agreement and the
right to demand liquidated damages in the amount of CDN $3,225,000
(approximately U.S. $2,206,000 as of December 31, 1997).
During 1998, the Company had not made any payments to In-Flo nor had
the Company recorded additional purchase commitments in light of the
above disputes and the on-going negotiations. As a result of this
transaction, the Company anticipates that it will record a non-cash
gain on the sale of the subsidiary in an amount approximately equal
to $430,000.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits:
(i) Limited Recourse Promissory Note dated November 30, 1998 between
William A. Frey III, T.J. Tully, Gay N. Tully and James F. Tully
(ii) Promissory Note dated November 30, 1998 between T.J. Tully and
United Shields Corporation
(iii) Promissory Note dated November 30, 1998 between Gay N. Tully
and United Shields Corporation
(iv) Promissory Note dated November 30, 1998 between James F. Tully
and United Shields Corporation
(v) Amended and Restated Promissory Note dated November 30, 1998
between NAVICAP Corporation and United Shields Corporation
(vi) Amended and Restated Promissory Note dated November 30, 1998
between William A. Frey III and United Shields Corporation
(vii) Agreement to Purchase UNSC, Inc. dated November 30, 1998
between United Shields Corporation and T.J. Tully
(viii) Warrant Agreement dated November 30, 1998 between William A.
Frey III and United Shields Corporation
(ix) Promissory Note dated December 22, 1998 between T.J. Tully and
United Shields Corporation
(x) Promissory Note dated December 22, 1998 between Gay N. Tully and
United Shields Corporation
(xi) Promissory Note dated December 22, 1998 between James F. Tully
and United Shields Corporation
(xii) Promissory Note dated December 22, 1998 between Andrew T.
Tully and United Shields Corporation
(xiii) Promissory Note dated December 22, 1998 between Nola E. Tully
and United Shields Corporation
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
UNITED SHIELDS CORPORATION:
By: /s/ William A. Frey III
William A. Frey III
Chairman of the Board and Chief Executive Officer
By: /s/ Donald T. Zimmerman
Donald T. Zimmerman
President and Chief Operating Officer
By: /s/ Jeffrey A. Pakrosnis
Jeffrey A. Pakrosnis
Vice President and Chief Financial Officer
Date: January 6, 1999
<PAGE>
Exhibit 10.1
LIMITED RECOURSE
PROMISSORY NOTE
$100,300.00 November 30, 1998
Cleveland, Tennessee
FOR VALUE RECEIVED, the undersigned, T. J. TULLY, GAY N.
TULLY, and JAMES F. TULLY, jointly and severally (herein
collectively called "Makers") promise to pay (subject to the
recourse limitations set forth below) to the order of WILLIAM A.
FREY III ("Payee"), Payee and any subsequent holder(s) hereof, being
hereinafter referred to collectively as ("Holder") without grace,
except as provided herein, at 2640 Peerless Road, Cleveland,
Tennessee 37312, or at such other place as Holder may designate to
Maker in writing from time to time the principal sum of One Hundred
Thousand Three Hundred Dollars ($100,300.00) or such lesser amounts
as may be outstanding from time to time hereunder, together with
interest thereon at the rate of eleven percent (11%) per annum on so
much thereof as is from time to time outstanding and unpaid from the
date hereof at the rate hereinafter set forth, in lawful money of
the United States of America which shall at the time of payment be
legal tender in payment of all debts and dues, public and private,
such principal to be paid on or before December 15,1998.
Failure to make any payment when due hereunder, any default in
any other document given in connection with this transaction, the
insolvency of the Makers, or any one of them, applies for or permits
the appointment of a receiver of his or her property, or any
insolvency action or proceeding whatsoever is commenced by or
against the Makers, or any one of them, and is not vacated within
forty-five (45) days of its commencement, any such event shall be
deemed a default hereunder and the Holder may, at his option,
declare all amounts to be immediately due and payable hereunder.
No waiver, consent or other agreement shall be deemed to have
been made by Payee or be binding upon the Holder of this Promissory
Note unless specifically made in writing.
The undersigned also hereby waives presentment for payment,
notice of demand, notice of nonpayment or dishonor, protest, notices
of protest, and all other notices in connection with delivery,
acceptance, performance, default or enforcement of payment of this
Promissory Note.
In the event the Payee retains an attorney to collect this
Note, by suit or otherwise, the Payee shall be entitled to recover
its reasonable costs and expenses, including reasonable attorney's
fees and court costs.
This Note is given in anticipation of the purchase of shares in
United Shields Corporation. At such time as the undersigned have
transferred 1,003,000 shares of stock in United Shields Corporation,
provided this occurs before December 30, 1998, this note shall be
marked "PAID IN FULL" and returned to the Makers. The Makers shall
have no further liability hereunder. The Makers agree to use their
best efforts to have a total of 5,278,885 shares of United Shields
transferred to the Payee at ten cents (.10) per share. This note
evidences the first payment to be made to the Makers for shares. As
shares are transferred, the Payee shall reimburse the Makers.
IN WITNESS WHEREOF, the undersigned have duly executed this
Note as of the date first above written.
MAKERS:
/s/ T.J.Tully
-----------------------------------
T. J. TULLY
/s/ Gay N. Tully
-----------------------------------
GAY N. TULLY
/s/ James F. Tully
-----------------------------------
JAMES F. TULLY
<PAGE>
Exhibit 10.2
PROMISSORY NOTE
$33,433.34 November 30, 1998
Cincinnati, Ohio
FOR VALUE RECEIVED, UNITED SHIELDS CORPORATION, a Colorado
corporation ("Maker") promises to pay to the order of T. J. TULLY
("Holder") the principal sum of $33,433.34 or such lesser amount as
may be outstanding from time to time hereunder, together with
interest thereon at the rate of eleven percent (11%) per annum on so
much thereof as is from time to time outstanding and unpaid from the
date hereof at the rate hereinafter set forth, in lawful money of
the United States of America which shall at the time of payment be
legal tender in payment of all debts and dues, public and private,
such principal to be paid on or before February 28, 1999.
Maker may repay this Note from time to time in whole or in part
without premium or penalty. All repayments shall be applied first
to accrued interest and then to principal.
Failure to make payment when due hereunder, the insolvency of the
Maker, or any insolvency action or proceeding whatsoever commenced
by or against Maker and is not vacated within 45 days of its
commencement, any such event shall be deemed a default hereunder and
the Holder may, at this option, declare all amounts to be
immediately due and payable hereunder.
In the event the Holder retains an attorney to collect this Note, by
suit or otherwise, the Holder shall be entitled to recover its
reasonable costs and expenses, including reasonable attorney's fees
and court costs.
Maker agrees that in any action on this Note or any instrument which
provides security for this Note, it waives to the fullest extent
allowed by law all requirements of diligence and collection,
presentment, notice of nonpayment, protest, notice of protest, suit
and all other conditions precedent in connection with the collection
and enforcement of this Note or any security for this Note. This
Note shall be governed by and interpreted in accordance with Ohio
law.
T. J. TULLY UNITED SHIELDS CORPORATION
/s/ T.J. Tully By: /s/ Jeffrey A. Pakrosnis
Title: Chief Financial Officer
<PAGE>
Exhibit 10.3
PROMISSORY NOTE
$33,433.33 November 30, 1998
Cincinnati, Ohio
FOR VALUE RECEIVED, UNITED SHIELDS CORPORATION, a Colorado
corporation ("Maker") promises to pay to the order of GAY N. TULLY
("Holder") the principal sum of $33,433.33 or such lesser amount as
may be outstanding from time to time hereunder, together with
interest thereon at the rate of eleven percent (11%) per annum on so
much thereof as is from time to time outstanding and unpaid from the
date hereof at the rate hereinafter set forth, in lawful money of
the United States of America which shall at the time of payment be
legal tender in payment of all debts and dues, public and private,
such principal to be paid on or before February 28, 1999.
Maker may repay this Note from time to time in whole or in part
without premium or penalty. All repayments shall be applied first
to accrued interest and then to principal.
Failure to make payment when due hereunder, the insolvency of the
Maker, or any insolvency action or proceeding whatsoever commenced
by or against Maker and is not vacated within 45 days of its
commencement, any such event shall be deemed a default hereunder and
the Holder may, at this option, declare all amounts to be
immediately due and payable hereunder.
In the event the Holder retains an attorney to collect this Note, by
suit or otherwise, the Holder shall be entitled to recover its
reasonable costs and expenses, including reasonable attorney's fees
and court costs.
Maker agrees that in any action on this Note or any instrument which
provides security for this Note, it waives to the fullest extent
allowed by law all requirements of diligence and collection,
presentment, notice of nonpayment, protest, notice of protest, suit
and all other conditions precedent in connection with the collection
and enforcement of this Note or any security for this Note. This
Note shall be governed by and interpreted in accordance with Ohio
law.
GAY N. TULLY UNITED SHIELDS CORPORATION
/s/ Gay N. Tully By: /s/ Jeffrey A. Pakrosnis
Title: Chief Financial Officer
<PAGE>
EXHIBIT 10.4
PROMISSORY NOTE
$33,433.33 November 30, 1998
Cincinnati, Ohio
FOR VALUE RECEIVED, UNITED SHIELDS CORPORATION, a Colorado
corporation ("Maker") promises to pay to the order of JAMES F. TULLY
("Holder") the principal sum of $33,433.33 or such lesser amount as
may be outstanding from time to time hereunder, together with
interest thereon at the rate of eleven percent (11%) per annum on so
much thereof as is from time to time outstanding and unpaid from the
date hereof at the rate hereinafter set forth, in lawful money of
the United States of America which shall at the time of payment be
legal tender in payment of all debts and dues, public and private,
such principal to be paid on or before February 28, 1999.
Maker may repay this Note from time to time in whole or in part
without premium or penalty. All repayments shall be applied first
to accrued interest and then to principal.
Failure to make payment when due hereunder, the insolvency of the
Maker, or any insolvency action or proceeding whatsoever commenced
by or against Maker and is not vacated within 45 days of its
commencement, any such event shall be deemed a default hereunder and
the Holder may, at this option, declare all amounts to be
immediately due and payable hereunder.
In the event the Holder retains an attorney to collect this Note, by
suit or otherwise, the Holder shall be entitled to recover its
reasonable costs and expenses, including reasonable attorney's fees
and court costs.
Maker agrees that in any action on this Note or any instrument which
provides security for this Note, it waives to the fullest extent
allowed by law all requirements of diligence and collection,
presentment, notice of nonpayment, protest, notice of protest, suit
and all other conditions precedent in connection with the collection
and enforcement of this Note or any security for this Note. This
Note shall be governed by and interpreted in accordance with Ohio
law.
JAMES F. TULLY UNITED SHIELDS CORPORATION
/s/ James F. Tully By: /s/Jeffrey A. Pakrosnis
Title: Chief Financial Officer
<PAGE>
AMENDED AND RESTATED EXHIBIT 10.5
PROMISSORY NOTE
$1,542,202.78 November 30, 1998
Cincinnati, Ohio
FOR VALUE RECEIVED, UNITED SHIELDS CORPORATION, a Colorado
corporation ("Maker") promises to pay to the order of NAVICAP
CORPORATION f/ka/ Ramsay-Hughes, Inc. ("Holder" or "NAVICAP") on
October 30, 2003 the principal sum of $1,542,202.78, which includes
accrued interest through December 25, 1998, or such lesser amount as
may be outstanding from time to time hereunder. In addition,
interest shall be paid to Holder at the rate of twelve percent (12%)
per annum on the principal amount of this Note from time to time
outstanding subsequent to December 25, 1998. Maker shall begin
making such interest payments on the outstanding balance of this
Note on March 26, 1999 and continuing on a quarterly basis in
accordance with Maker's fiscal calendar until the maturity date of
the Note on October 30, 2003.
Maker may repay this Note from time to time in whole or in part
without premium or penalty. All repayment shall be applied first to
accrued interest and then to principal.
This Note is given in partial substitution for that certain
Promissory Note of May 22, 1997, as amended by certain Promissory
Notes of December 1, 1997; December 29, 1997; March 30, 1998; August
26, 1998; and by letter agreement on November 16, 1998. This Note,
together with another Note of the same date hereof payable to
William A. Frey III, represents the principal and interest due under
the Promissory Note, as amended, as described in this paragraph as
of November 30, 1998. The principal of this Note represents
principal plus interest accrued to November 30, 1998, and interest
at the rate of twelve percent (12%) per annum on the outstanding
balance for the period from December 1, 1998 through December 25,
1998. William A. Frey III has upon the receipt of his Note canceled
and returned to NAVICAP the Note which NAVICAP had given to Trinity
Healthcare Corporation subsequently endorsed to William A. Frey III
in the same amount.
NAVICAP shall have the option on or before December 24, 1998 of
converting any amount of interest and/or principal due hereunder up
to a maximum of $1,000,000 for shares of Maker at a value of the
greater of: twenty-five cents (.25) per share; or the current
market price on the day of conversion. NAVICAP shall notify Maker
at least two (2) business days in advance of any election to convert
the principal or interest to shares.
NAVICAP releases (i) certain restrictions and rights it
previously had with respect to third party funding or free cash flow
received by Maker; and (ii) the pledge of the shares of USC by T. J.
Tully, Gay N. Tully and James F. Tully.
In the event the Payee retains an attorney to collect this
Note, by suit or otherwise, the Payee shall be entitled to recover
its reasonable costs and expenses, including reasonable attorney's
fees and court costs.
Maker agrees that in any action on this Note or any instrument
which provides security for this Note, it waives to the fullest
extent allowed by law all requirements of diligence and collection,
presentment, notice of nonpayment, protest, notice of protest, suit
and all other conditions precedent in connection with the collection
and enforcement of this Note or any security for this Note. This
Note shall be governed by and interpreted in accordance with Ohio
law.
NAVICAP CORPORATION UNITED SHIELDS CORPORATION
By:/s/ Gregory A. Pitner By:/s/ Jeffrey A. Pakrosnis
Title:Chief Executive Officer Title:Chief Financial Officer
The undersigned acknowledge that as of December 4, 1998,
NAVICAP has exercised its option to convert $1,000,000 of principal
for 4,000,000 shares of United Shields Corporation. The principal
is accordingly reduced to $542,202.78 and United Shields Corporation
shall cause the shares to be issued to NAVICAP.
NAVICAP CORPORATION UNITED SHIELDS CORPORATION
By:/s/ Gregory A. Pitner By:/s/ Jeffrey A. Pakrosnis
Title: Chief Executive Officer Title: Chief Financial Officer
<PAGE>
AMENDED AND RESTATED EXHIBIT 10.6
PROMISSORY NOTE
$1,203,042.50 November 30, 1998
Cincinnati, Ohio
FOR VALUE RECEIVED, UNITED SHIELDS CORPORATION, a Colorado
corporation ("Maker") promises to pay to the order of WILLIAM A.
FREY III ("Payee" or "Frey"), Payee and any subsequent holder(s)
hereof (being hereafter referred to collectively as "Holder")
without grace, except as provided herein, at 2640 Peerless Road,
Cleveland, Tennessee 37312, or such other place as Holder may
designate to Maker in writing from time to time, on October 30, 2003
the principal sum of $1,203,042.50, which includes accrued interest
through December 25, 1998, or such lesser amount as may be
outstanding from time to time hereunder. In addition, interest
shall be paid to Holder at the rate of twelve percent (12%) per
annum on the principal amount of this Note from time to time
outstanding subsequent to December 25, 1998. Maker shall begin
making such interest payments on the outstanding balance of this
Note on March 26, 1999 and continuing on a quarterly basis in
accordance with Maker's fiscal calendar until the maturity date of
the Note on October 30, 2003.
Maker may repay this Note from time to time in whole or in part
without premium or penalty. All repayment shall be applied first to
accrued interest and then to principal.
This Note is given in partial substitution for that certain
Promissory Note between Maker and NAVICAP Corporation of May 22,
1997, as amended by certain Promissory Notes of December 1, 1997;
December 29, 1997; March 30, 1998; August 26, 1998; and by letter
agreement on November 16, 1998. This Note, together with another
Note of the same date hereof payable to NAVICAP Corporation
represents the principal and interest due under the Promissory Note,
as amended, as described in this paragraph as of November 30, 1998.
The principal of this Note represents a portion of the principal
plus interest accrued to December 25, 1998. This Note represents
the same amount of indebtedness which was owed by NAVICAP to the
Payee herein and the Payee has surrendered that Note to NAVICAP, and
in substitution, has taken this Note from the Maker hereof. Maker
was given credit for the principal and interest due on a Note of
even date herewith to NAVICAP. The total indebtedness of Maker is
the same but is now evidenced by two (2) Notes.
Holder shall have the option of converting any amount of
interest and/or principal due hereunder for shares of Maker at a
value of fourteen cents (.14) per share. Holder shall notify Maker
at least ten (10) business days in advance of any election to
convert the principal or interest to shares.
Holder releases (i) certain restrictions and rights it
previously had with respect to third party funding or free cash flow
received by Maker; and (ii) the pledge of the shares of USC by T. J.
Tully, Gay N. Tully and James F. Tully all as set forth in the
original Note, as amended.
In the event the Payee retains an attorney to collect this
Note, by suit or otherwise, the Payee shall be entitled to recover
its reasonable costs and expenses, including reasonable attorney's
fees and court costs.
Maker agrees that in any action on this Note or any instrument
which provides security for this Note, it waives to the fullest
extent allowed by law all requirements of diligence and collection,
presentment, notice of nonpayment, protest, notice of protest, suit
and all other conditions precedent in connection with the collection
and enforcement of this Note or any security for this Note. This
Note shall be governed by and interpreted in accordance with Ohio
law.
UNITED SHIELDS CORPORATION
By:/s/ William A. Frey III By:/s/Jeffrey A. Pakrosnis
----------------------
William A. Frey III Title:Chief Financial Officer<PAGE>
AGREEMENT TO PURCHASE EXHIBIT 10.7
UNSC, INC.
(a Nevada corporation)
For the consideration of $1.00, T.J. Tully hereby purchases from
United Shields Corporation the capital stock of UNSC, Inc. (a Nevada
corporation), a wholly-owned subsidiary of United Shields
Corporation, which holds the In-Flo (of Canada) contract.
As an inducement to T.J. Tully to purchase such capital stock,
United Shields Corporation hereby grants Mr. Tully an option to
purchase 500,000 shares of United Shields Corporation common stock
at a price per share of $0.50. Mr. Tully may exercise the option by
delivering written notice of exercise and the purchase price to
United Shields Corporation at anytime within three years of the date
of this agreement. Mr. Tully will have the right to assign this
option in whole or in part to his wife, children or brother or a
combination of them.
AGREED:
UNITED SHIELDS CORPORATION
T.J. Tully
/s/ T. J. Tully By: /s/Jeffrey A. Pakrosnis
Jeffrey A. Pakrosnis
Its: Chief Financial Officer
Date: November 30, 1998
<PAGE>
EXHIBIT 10.8
THE SECURITY EVIDENCED HEREBY MAY NOT BE TRANSFERRED EXCEPT (I) IN
ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH 1 HEREOF AND (II) WITH
EITHER (A) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH TRANSFER MAY BE LAWFULLY MADE WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933 OR (B) SUCH REGISTRATION.
COMMON STOCK PURCHASE WARRANT
To Purchase 6,000,000 Shares of
Common Stock of United Shields Corporation
November 30, 1998
THIS CERTIFIES THAT, in consideration for its payment of $1.00 and
other good and valuable consideration received by United Shields
Corporation (the "Company"), William A. Frey, III ("Initial Holder")
or its registered assigns is entitled to subscribe for and purchase
from the Company at any time after the date hereof to and including
November 30, 2003, 6,000,000 shares of the Company's Common Stock
with a par value of $.001 per share ("Common Stock" or "Shares") at
a price of $0.14 per share.
This Common Stock Purchase Warrant is subject to the following
provisions, terms and conditions:
1. Exercise; Transferability. The rights represented by this
Warrant may be exercised by the holder hereof, in whole or in part
(but not as to a fractional Share), by written notice of exercise
delivered to the Company 20 days prior to the intended date of
exercise and by the surrender of this Warrant (properly endorsed if
required) at the principal office of the Company and upon payment to
it by check of the purchase price for such Shares. This Warrant may
be transferred, or divided into two or more warrants of smaller
denominations (collectively, the "Warrants").
2. Issuance of Shares. The Company agrees that the Shares
purchasable hereunder shall be and are deemed to be issued to the
record holder hereof as of the close of business on the date on
which this Warrant shall have been surrendered and the payment made
for such shares as aforesaid. Subject to the provisions of the next
succeeding paragraph, certificates for the Shares so purchased shall
be delivered to the holder hereof within a reasonable time, not
exceeding ten days after the rights represented by this Warrant
shall have been so exercised, and, unless this Warrant has expired,
a new Warrant representing the number of Shares, if any, with
respect to which this Warrant shall not then have been exercised
shall also be delivered to the holder hereof within such time.
Notwithstanding the foregoing, however, the Company shall not be
required to deliver any certificate for Shares upon exercise of this
Warrant, except in accordance with the provisions, and subject to
the limitations, of paragraph 7 hereof.
3. Covenants of Company. The Company covenants and agrees that all
Shares issued upon the exercise of the rights represented by this
Warrant will, upon issuance, be duly authorized and issued, fully
paid, nonassessable and free from all taxes, liens and charges with
respect to the issue thereof, and, without limiting the generality
of the foregoing, the Company covenants and agrees that it will from
time to time take all such action as may be required to assure that
the par value per share of Common Stock is at all times equal to or
less than the then effective purchase price per share of the Common
Stock issuable pursuant to this Warrant. The Company further
covenants and agrees that, during the period within which the rights
represented by this Warrant may be exercised, the Company will at
all times have authorized, and reserved for the purpose of issue or
transfer upon exercise of the subscription rights evidenced by this
Warrant, a sufficient number of shares of its Common Stock to
provide for the exercise of the rights represented by this Warrant.
4. Anti-Dilution Adjustments. The above provisions are, however,
subject to the following:
(a) In case the Company shall at any time hereafter subdivide or
combine the outstanding shares of Common Stock or declare a dividend
payable in common stock, the exercise price of this Warrant 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 decreased,
in the case of subdivision or dividend payable, in Common Stock, and
each share of Common Stock purchasable upon exercise of this Warrant
shall be changed to the number determined by dividing the then
current exercise price by the exercise price as adjusted after the
subdivision, combination or dividend payable in common stock.
(b) No fractional Shares are to be issued upon the exercise of this
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.
(c) If any capital reorganization or reclassification of the
capital stock of the Company, or consolidation or merger of the
Company with another corporation, or the sale of all or
substantially all of its assets to another corporation shall be
effected in such a way that 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 condition of such
reorganization, reclassification, consolidation, merger or sale
lawful and adequate provision shall be made whereby the holder
hereof shall thereafter have the right to purchase and receive, upon
the basis and upon the terms and conditions specified in this
Warrant and in lieu of the shares of Common Stock of the Company
immediately theretofore purchasable and receivable upon the exercise
of the rights represented hereby, such stock, securities or assets
as may be issued or payable with respect to or in exchange for a
number of outstanding shares of such Common Stock equal to the
number of shares of such stock immediately theretofore purchasable
and receivable upon the exercise of the rights represented hereby
had such reorganization, reclassification, consolidation, merger or
sale not taken place, and in any such case appropriate provisions
shall be made with respect to the rights and interests of the holder
of this Warrant to the end that the provisions hereof (including
without limitation provisions for adjustments of the Warrant
purchase price and of the number of Shares purchasable upon the
exercise of this Warrant) shall thereafter be applicable, as nearly
as may be, in relation to any shares of stock, securities or assets
thereafter deliverable upon the exercise hereof. The Company shall
not effect any such consolidation, merger or sale unless prior to
the consummation thereof the successor corporation (if other than
the Company) resulting from such consolidation or merger, or the
corporation purchasing such assets, shall assume by written
instrument executed and mailed to the registered holder hereof at
the last address of such holder appearing on the books of the
Company, the obligation to deliver to such holder such shares of
stock, securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to purchase.
(d) Upon any adjustment of the Warrant purchase price under Section
4(c) above, then, and in each such case, the Company shall give
written notice thereof, by first class mail, postage prepaid,
addressed to the registered holder of this Warrant at the address of
such holder as shown on the books of the Company, which notice shall
state the Warrant purchase price resulting from such adjustment and
the increase or decrease, if any, in the number of Shares
purchasable at such price upon the exercise of this Warrant, setting
forth in reasonable detail the method of calculation and the facts
upon which such calculation is based.
5. Common Stock. As used herein, the term "Common Stock" shall
mean and include the Company's presently authorized shares of Common
Stock and shall also include any capital stock of any class of the
Company hereafter authorized which shall not be limited to fixed sum
or percentage in respect of the rights of the holders thereof to
participate, in dividends or in the distribution, dissolution or
winding up of the Company.
6. No Voting Rights. This Warrant shall not entitle the holder
hereof to any voting rights or other rights as a shareholder of the
Company.
7. Notice of Transfer of Warrant or Resale of Shares. The holder
of this Warrant, by acceptance hereof, agrees to give written notice
to the Company before transferring any Shares issued upon the
exercise hereof ("Warrant Shares"), of such holders intention to do
so, describing briefly the manner of any proposed transfer.
Promptly upon receiving such written notice, the Company shall
present copies thereof to the Company's counsel and to counsel to
the original purchaser of this Warrant. If in the opinion of each
such counsel the proposed transfer may be effected without
registration or qualification (under any federal or state law), the
Company, as promptly as practicable, shall notify such holder of
such opinions, whereupon such holder shall be entitled to transfer
the Warrant Shares or to dispose of shares of common stock received
upon the previous exercise hereof in accordance with the notice
delivered by such holder to the Company, provided that an
appropriate legend may be endorsed on this Warrant or the
certificates for such Warrant Shares respecting restrictions upon
transfer thereof necessary or advisable in the opinion of counsel
satisfactory to the Company to prevent further transfers which would
be in violation of Section 5 of the Securities Act of 1933.
If, in the reasonable opinion of either of the counsel referred to
in this paragraph 7, the proposed transfer or disposition described
in the written notice given pursuant to this paragraph 7 may not be
effected without registration or qualification of the Warrant
Shares, the Company shall promptly give written notice thereof to
the holder hereof, and such holder will limit its activities in
respect to such Proposed transfer or disposition as, in the opinion
of both such counsel, are permitted by law.
8. Registration Rights. (a) If the Company proposes to claim an
exemption under Section 3(b) for a public offering of any of its
securities or to register under the Securities Act of 1933 (except
by a registration statement on a form that does not permit the
inclusion of shares by its security holders) any of its securities,
it will give written notice to all registered holders of Warrants,
and all registered holders of shares of Shares acquired upon the
exercise of Warrants, of its intention to do so and, on the written
request of any registered holders given within 20 days after receipt
of any such notice (which request must be made on or before November
30, 2004 and which notice shall specify the Warrant Shares intended
to be sold or disposed of by such registered holder and describe the
nature of any proposed sale or other disposition thereof), the
Company will use its best efforts to cause all such Warrant Shares,
the registered holders of which shall have requested the
registration or qualification thereof, to be included in such
notification or registration statement proposed to be filed by the
Company. All expenses of such offering, except the fees of special
counsel and brokers' commissions to such holders, shall be borne by
the Company.
(b) The Company shall indemnify the holder of this Warrant and of
any Shares issued or issuable hereunder, its officers and directors,
and any person who controls such Warrant holder or such holder of
Shares within the meaning of Section 15 of the Securities Act of
1933, against all losses, claims, damages and liabilities caused by
any untrue statement of a material fact contained in any
registration statement, prospectus, notification or offering
circular (and as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or any preliminary
prospectus relating to the registration or qualification of the
Warrant Shares or caused by any omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading except insofar as such losses,
claims, damages or liabilities are caused by any untrue statement or
omission contained in information furnished in writing to the
Company by such Warrant holder or such holder of Warrant Shares
expressly for use therein, and each such holder by its acceptance
hereof severally agrees that it will indemnify and hold harmless the
Company and each of its officers who signs such registration
statement and each of its directors and each person, if any, who
controls the Company within the meaning of Section 15 of the
Securities Act of 1933 with respect to losses, claims, damages or
liabilities which are caused by any untrue statement or omission
contained in information furnished in writing to the Company by such
holder expressly for use therein.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer and this Warrant to be dated November
30, 1998.
UNITED SHIELDS CORPORATION
By:/s/ Jeffrey A. Pakrosnis
Its: Chief Financial Officer
<PAGE>
UNITED SHIELDS CORPORATION
TO: __________________________________
PURCHASE FORM -- To be executed by the Registered Holder in Order to
Exercise the Warrant.
The undersigned hereby irrevocably elects to exercise the attached
Warrant Certificate to purchase for cash, ___________________ of the
Shares issuable upon the exercise of such Warrant, and requests that
certificates for such shares shall be issued in the name of:
_______________________________________
(Name)
_______________________________________
(Address)
_____________________________________
(Tax ID No.)
_______________________________________
(Signature)
ASSIGNMENT FORM - To be Executed By the Registered Holder in Order
to Transfer the Warrant.
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers _________ of the Warrants represented by the attached
Warrant Certificate unto_____________________________
_______________________________________________________ (please
print or type name and address including postal zip code of
assignee) having the Social Security or other identifying number of
________________________, and does irrevocably constitute and
appoint ____________________________ attorney to transfer the
Warrant Certificate on the records of the Company with full power of
substitution in the premises.
Date:______________, 19___.________________________________________
Transfer Signature
PLEASE NOTE: The signature(s) to the Purchase Form or the
Assignment Form must correspond to the name as written upon the face
of the Warrant Certificate in every particular without alteration or
enlargement of any change whatsoever.
<PAGE>
EXERCISE NOTICE
The undersigned Warrant holder hereby irrevocably elects to exercise
the attached Warrant Certificate. The Warrant is hereby exercised
for _________________ shares and is accompanied by a check in the
amount of $___________ to cover the exercise price thereof.
Date:_________________ ______________________________________
(Name)
______________________________________
(Address)
______________________________________
(Tax ID No.)
______________________________________
(Signature)
<PAGE>
EXHIBIT 10.9
PROMISSORY NOTE
$33,691.66 December 22, 1998
Cincinnati, Ohio
FOR VALUE RECEIVED, UNITED SHIELDS CORPORATION, a Colorado
corporation ("Maker") promises to pay to the order of T. J. TULLY
("Holder") the principal sum of $33,691.66 or such lesser amount as
may be outstanding from time to time hereunder, together with
interest thereon at the rate of eleven percent (11%) per annum on so
much thereof as is from time to time outstanding and unpaid from the
date hereof at the rate hereinafter set forth, in lawful money of
the United States of America which shall at the time of payment be
legal tender in payment of all debts and dues, public and private,
such principal to be paid on or before February 28, 1999.
Maker may repay this Note from time to time in whole or in part
without premium or penalty. All repayments shall be applied first
to accrued interest and then to principal.
Failure to make payment when due hereunder, the insolvency of the
Maker, or any insolvency action or proceeding whatsoever commenced
by or against Maker and is not vacated within 45 days of its
commencement, any such event shall be deemed a default hereunder and
the Holder may, at this option, declare all amounts to be
immediately due and payable hereunder.
In the event the Holder retains an attorney to collect this Note, by
suit or otherwise, the Holder shall be entitled to recover its
reasonable costs and expenses, including reasonable attorney's fees
and court costs.
Maker agrees that in any action on this Note or any instrument which
provides security for this Note, it waives to the fullest extent
allowed by law all requirements of diligence and collection,
presentment, notice of nonpayment, protest, notice of protest, suit
and all other conditions precedent in connection with the collection
and enforcement of this Note or any security for this Note. This
Note shall be governed by and interpreted in accordance with Ohio
law.
T. J. TULLY UNITED SHIELDS CORPORATION
/s/ T. J. Tully By: /s/ Jeffrey A. Pakrosnis
Title: Chief Financial Officer
<PAGE>
EXHIBIT 10.10
PROMISSORY NOTE
$24,691.68 December 22, 1998
Cincinnati, Ohio
FOR VALUE RECEIVED, UNITED SHIELDS CORPORATION, a Colorado
corporation ("Maker") promises to pay to the order of GAY N. TULLY
("Holder") the principal sum of $24,691.68 or such lesser amount as
may be outstanding from time to time hereunder, together with
interest thereon at the rate of eleven percent (11%) per annum on so
much thereof as is from time to time outstanding and unpaid from the
date hereof at the rate hereinafter set forth, in lawful money of
the United States of America which shall at the time of payment be
legal tender in payment of all debts and dues, public and private,
such principal to be paid on or before February 28, 1999.
Maker may repay this Note from time to time in whole or in part
without premium or penalty. All repayments shall be applied first
to accrued interest and then to principal.
Failure to make payment when due hereunder, the insolvency of the
Maker, or any insolvency action or proceeding whatsoever commenced
by or against Maker and is not vacated within 45 days of its
commencement, any such event shall be deemed a default hereunder and
the Holder may, at this option, declare all amounts to be
immediately due and payable hereunder.
In the event the Holder retains an attorney to collect this Note, by
suit or otherwise, the Holder shall be entitled to recover its
reasonable costs and expenses, including reasonable attorney's fees
and court costs.
Maker agrees that in any action on this Note or any instrument which
provides security for this Note, it waives to the fullest extent
allowed by law all requirements of diligence and collection,
presentment, notice of nonpayment, protest, notice of protest, suit
and all other conditions precedent in connection with the collection
and enforcement of this Note or any security for this Note. This
Note shall be governed by and interpreted in accordance with Ohio
law.
GAY N. TULLY UNITED SHIELDS CORPORATION
/s/ Gay N. Tully By: /s/ Jeffrey A. Pakrosnis
Title: Chief Financial Officer
<PAGE>
EXHIBIT 10.11
PROMISSORY NOTE
$73,816.66 December 22, 1998
Cincinnati, Ohio
FOR VALUE RECEIVED, UNITED SHIELDS CORPORATION, a Colorado
corporation ("Maker") promises to pay to the order of JAMES F. TULLY
("Holder") the principal sum of $73,816.66 or such lesser amount as
may be outstanding from time to time hereunder, together with
interest thereon at the rate of eleven percent (11%) per annum on so
much thereof as is from time to time outstanding and unpaid from the
date hereof at the rate hereinafter set forth, in lawful money of
the United States of America which shall at the time of payment be
legal tender in payment of all debts and dues, public and private,
such principal to be paid on or before February 28, 1999.
Maker may repay this Note from time to time in whole or in part
without premium or penalty. All repayments shall be applied first
to accrued interest and then to principal.
Failure to make payment when due hereunder, the insolvency of the
Maker, or any insolvency action or proceeding whatsoever commenced
by or against Maker and is not vacated within 45 days of its
commencement, any such event shall be deemed a default hereunder and
the Holder may, at this option, declare all amounts to be
immediately due and payable hereunder.
In the event the Holder retains an attorney to collect this Note, by
suit or otherwise, the Holder shall be entitled to recover its
reasonable costs and expenses, including reasonable attorney's fees
and court costs.
Maker agrees that in any action on this Note or any instrument which
provides security for this Note, it waives to the fullest extent
allowed by law all requirements of diligence and collection,
presentment, notice of nonpayment, protest, notice of protest, suit
and all other conditions precedent in connection with the collection
and enforcement of this Note or any security for this Note. This
Note shall be governed by and interpreted in accordance with Ohio
law.
JAMES F. TULLY UNITED SHIELDS CORPORATION
/s/ James F. Tully By: /s/ Jeffrey A. Pakrosnis
Title: Chief Financial Officer
<PAGE>
EXHIBIT 10.12
PROMISSORY NOTE
$71,250.00 December 22, 1998
Cincinnati, Ohio
FOR VALUE RECEIVED, UNITED SHIELDS CORPORATION, a Colorado
corporation ("Maker") promises to pay to the order of ANDREW T.
TULLY ("Holder") the principal sum of $71,250.00 or such lesser
amount as may be outstanding from time to time hereunder, together
with interest thereon at the rate of eleven percent (11%) per annum
on so much thereof as is from time to time outstanding and unpaid
from the date hereof at the rate hereinafter set forth, in lawful
money of the United States of America which shall at the time of
payment be legal tender in payment of all debts and dues, public and
private, such principal to be paid on or before February 28, 1999.
Maker may repay this Note from time to time in whole or in part
without premium or penalty. All repayments shall be applied first
to accrued interest and then to principal.
Failure to make payment when due hereunder, the insolvency of the
Maker, or any insolvency action or proceeding whatsoever commenced
by or against Maker and is not vacated within 45 days of its
commencement, any such event shall be deemed a default hereunder and
the Holder may, at this option, declare all amounts to be
immediately due and payable hereunder.
In the event the Holder retains an attorney to collect this Note, by
suit or otherwise, the Holder shall be entitled to recover its
reasonable costs and expenses, including reasonable attorney's fees
and court costs.
Maker agrees that in any action on this Note or any instrument which
provides security for this Note, it waives to the fullest extent
allowed by law all requirements of diligence and collection,
presentment, notice of nonpayment, protest, notice of protest, suit
and all other conditions precedent in connection with the collection
and enforcement of this Note or any security for this Note. This
Note shall be governed by and interpreted in accordance with Ohio
law.
ANDREW T. TULLY UNITED SHIELDS CORPORATION
/s/ Andrew T. Tully By: /s/ Jeffrey A. Pakrosnis
Title: Chief Financial Officer
<PAGE>
EXHIBIT 10.13
AMENDED AND RESTATED
PROMISSORY NOTE
$71,250.00 December 22, 1998
Cincinnati, Ohio
FOR VALUE RECEIVED, UNITED SHIELDS CORPORATION, a Colorado
corporation ("Maker") promises to pay to the order of NOLA E. TULLY
("Holder") the principal sum of $71,250.00 or such lesser amount as
may be outstanding from time to time hereunder, together with
interest thereon at the rate of eleven percent (11%) per annum on so
much thereof as is from time to time outstanding and unpaid from the
date hereof at the rate hereinafter set forth, in lawful money of
the United States of America which shall at the time of payment be
legal tender in payment of all debts and dues, public and private,
such principal to be paid on or before February 28, 1999.
Maker may repay this Note from time to time in whole or in part
without premium or penalty. All repayments shall be applied first
to accrued interest and then to principal.
Failure to make payment when due hereunder, the insolvency of the
Maker, or any insolvency action or proceeding whatsoever commenced
by or against Maker and is not vacated within 45 days of its
commencement, any such event shall be deemed a default hereunder and
the Holder may, at this option, declare all amounts to be
immediately due and payable hereunder.
In the event the Holder retains an attorney to collect this Note, by
suit or otherwise, the Holder shall be entitled to recover its
reasonable costs and expenses, including reasonable attorney's fees
and court costs.
Maker agrees that in any action on this Note or any instrument which
provides security for this Note, it waives to the fullest extent
allowed by law all requirements of diligence and collection,
presentment, notice of nonpayment, protest, notice of protest, suit
and all other conditions precedent in connection with the collection
and enforcement of this Note or any security for this Note. This
Note shall be governed by and interpreted in accordance with Ohio
law.
NOLA E. TULLY UNITED SHIELDS CORPORATION
/s/ Nola E. Tully By: /s/ Jeffrey A. Pakrosnis
Title: Chief Financial Officer
