EXHIBIT 10.27
DEVELOPMENT AND SUPPLY AGREEMENT
THIS DEVELOPMENT AND SUPPLY AGREEMENT (the "Agreement") is made this
13th day of May, 2002, by and between METRO MACHINE CORP., a Virginia
corporation ("Metro"); and ULTRASTRIP SYSTEMS, INC., a Florida corporation.
RECITALS:
A. Metro is developing an advanced, state-of-the-art ship
enclosure, paint removal, and coating system which will
include, without limitation, the use of the Metro SPEEDE
drydock and the Metro CAPE system as currently being developed
by Metro (collectively, the "Metro Ship Coating System").
B. Upon completion of development of the Metro Ship Coating
System, Metro intends to use the Metro Ship Coating System in
its shipyard located in Norfolk, Virginia and to market and
sell the Metro Ship Coating System to other shipyards and ship
repair companies.
C. Ultrastrip has developed and is continuing to develop
prototype, robot operated, high pressure, water based, paint
removal equipment for use in ship paint removal operations,
which equipment employs 55,000 psi, 4 gpm technology
(collectively, the "Ultrastrip Paint Removal Equipment").
D. Metro desires to purchase from Ultrastrip a prototype paint
removal system which will consist of two (2) robots and
supporting Ultrastrip Paint Removal Equipment (collectively,
the "Ultrastrip Paint Removal System") for integration with
the Metro Ship Coating System and, in connection therewith, to
further develop, evaluate, refine, and test the prototype of
the Ultrastrip Paint Removal System.
E. Upon completion of development of the Ultrastrip Paint Removal
System and the integration of the Ultrastrip Paint Removal
System with the Metro Ship Coating System, Metro intends to
use the prototype of the Ultrastrip Paint Removal System in
its shipyard and to market and sell the Ultrastrip Paint
Removal System as part of the Metro Ship Coating System.
F. Metro and Ultrastrip desire to set forth in this Agreement
their agreements and understandings concerning the purchase by
Metro of a prototype of the Ultrastrip Paint Removal System,
the further development, evaluation, refinement, and testing
of the Ultrastrip Paint Removal System, the integration of the
Ultrastrip Paint Removal System with the Metro Ship Coating
System, and the subsequent marketing and sale of the
Ultrastrip Paint Removal System in connection with the
marketing and sale of the Metro Ship Coating System.
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AGREEMENT:
NOW, THEREFORE, in consideration of the mutual promises set forth
herein, the purchase price for the Prototype System to be paid by Metro to
Ultrastrip, and other good and valuable consideration, the adequacy and receipt
of which is hereby acknowledged, Metro and Ultrastrip hereby agree as follows.
1. Definitions:
(a) CAPE System. The environmentally compliant,
proprietary, encapsulating and processing system
under development by Metro for the coating of ship
hulls.
(b) "develop", "developed" or "development". The
cumulative process of the development, design,
redesign, fabrication, manufacture, installation,
analysis, testing, evaluation, and/or refinement of
any component, equipment or system pursuant to the
plans and specifications for such component,
equipment or system in order to meet or exceed the
product requirements for such component, equipment,
or system.
(c) Final Plans and Specifications. The final plans and
specifications for the Ultrastrip Paint Removal
System incorporating all changes in the system based
on the operation of the Prototype System and as
accepted and approved by Ultrastrip.
(d) Firewall Agreement. An agreement between Metro and
Ultrastrip providing to each party through its
independent certified public accountants protected
access to confidential financial information of the
other party.
(e) Improvements. Any changes, enhancements,
improvements, modifications or refinements made to
the Ultrastrip Paint Removal Equipment as a result of
the independent development efforts of Ultrastrip and
any changes, enhancements, improvements,
modifications or refinements made to the Ultrastrip
Paint Removal System based on or arising from the
development and performance of the Prototype System.
(f) Metro. Metro Machine Corp., a Virginia corporation.
(g) Metro Proprietary Information. All Proprietary
Information owned or possessed by Metro.
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(h) Metro Ship Coating System. The integrated system
developed by Metro for the enclosure, paint removal,
and coating of ships using Metro Proprietary
Information including, without limitation, the SPEEDE
drydock and the CAPE system.
(i) Pre-Operational Testing. (i) Electrical cold check of
all electrical components, equipment, and subsystems
of the Prototype System, (ii) rotational checks of
all motors, (iii) hydrostatic tests of all pipes and
pressure vessels of the Prototype System, (iv)
flushing of all pipes and pressure vessels of the
Prototype System, and (v) measurement and adjustment
of the mechanical alignment of all components,
equipment of the Prototype System and subsystems of
the Prototype System.
(j) Proprietary Information. All confidential and
proprietary information, trade secrets, documents,
processes, systems, "know how", expertise, and
business and industrial practices owned or possessed
by a person in connection with such person's business
and affairs, in whatever medium, including, without
limitation, designs and drawings of such person's
products; manuals, and the information contained
therein; such person's methods and systems; names and
addresses of such person's suppliers; prices charged
and paid by such person; such person's technical
memoranda and data, research reports, manuals and
memoranda; comparative analyses of competitive
products; services and operating procedures of such
person; and any information, data or documents which
such person designates as trade secrets or as
confidential, whether or not any of the foregoing
qualify as "trade secrets" under applicable law.
Notwithstanding the foregoing, Proprietary
Information shall not include information which is or
becomes generally known to the public other than
through disclosure in violation of the provisions
concerning confidentiality set forth in Paragraph 9
of this Agreement.
(k) Prototype System. The prototype of the Ultrastrip
Paint Removal System, consisting of two (2) robots
and all required supporting Ultrastrip Paint Removal
Equipment employing 55,000 psi and 4 gpm water-based,
paint removal technology, as developed and continuing
to be developed exclusively by Ultrastrip and which
Metro intends to integrate with Metro systems and
technology as a part of the Metro Ship Coating
System.
(l) SPEEDE Drydock. The SPEEDE Drydock under development
by Metro which will enable Metro to be world
competitive in cost, schedule, and quality of
performance in the coating of ship hulls while
meeting all environmental laws and regulations.
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(m) Ultrastrip. Ultrastrip Systems, Inc., a Florida
corporation.
(n) Ultrastrip Paint Removal Equipment. The robot
operated, high pressure, water based, paint removal
equipment using 55,000 psi, 4 gpm technology as
developed and continuing to be developed by
Ultrastrip for use in ship paint removal operations.
(o) Ultrastrip Paint Removal System. A paint removal
system using two (2) Ultrastrip robots and all
required supporting Ultrastrip Paint Removal
Equipment as developed and continuing to be developed
by Ultrastrip for use in ship exterior hull paint
removal operations.
(p) Ultrastrip Proprietary Information. All Proprietary
Information owned or possessed by Ultrastrip.
2. Parties:
(a) Metro Machine Corp. ("Metro")
(b) Ultrastrip Systems, Inc. ("Ultrastrip")
3. Purpose:
(a) The purpose of this Agreement is to set forth the
respective duties and obligations of Metro and
Ultrastrip in connection with the development of the
Prototype System to be integrated as part of the
Metro Ship Coating System.
(b) During the term of this Agreement, Ultrastrip shall
have the following duties and obligations: (i)
fabricate, manufacture, and deliver to Metro one (1)
Prototype System for evaluation and testing by Metro
including, but not limited to, testing of the
feasibility of integrating the Prototype System with
the Metro Ship Coating System; (ii) improve the
design, plans, specifications, and method of
fabrication for the Ultrastrip Paint Removal System
based on the performance of the Prototype System for
use in connection with the Metro Ship Coating System;
(iii) incorporate technical advances and Improvements
in the Ultrastrip Paint Removal Equipment and the
Ultrastrip Paint Removal System into the Prototype
System; and (iv) fabricate and manufacture the
Ultrastrip Paint Removal System pursuant to the Final
Plans and Specifications based on the performance of
the Prototype System for marketing and sale to
customers for the Metro Ship Coating System including
the Ultrastrip Paint Removal System and the
Ultrastrip Paint Removal System without the Metro
Ship Coating System.
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(c) During the term of this Agreement, Ultrastrip shall
incorporate Improvements that arise from the
independent development of the Ultrastrip Paint
Removal Equipment by Ultrastrip into the Prototype
System as part of the technical service and support
to be provided by Ultrastrip to Metro pursuant to
Paragraph 7 of this Agreement. If Metro requests that
Ultrastrip modify or redesign the Prototype System or
incorporate Improvements proposed by Metro as a
result of the operation and performance of the
Prototype System, such request for modification or
redesign or incorporation of Improvements shall be
handled as a change order under this Agreement, and
shall be subject to the negotiation by Metro and
Ultrastrip of a mutually satisfactory amendment to
this Agreement covering price, time of performance,
and other matters.
(d) In connection with the development of the Prototype
System, Metro agrees to make available to Ultrastrip
personnel facilities at its shipyard located in
Norfolk, Virginia and to provide general assistance
to Ultrastrip personnel in connection with the
development of the Prototype System. In the event
that Metro personnel become aware of any potential
improvements in the design or fabrication of the
Ultrastrip Paint Removal Equipment or the Prototype
System, Metro shall provide information about such
potential improvements to Ultrastrip. Metro shall
provide any such information without charge to
Ultrastrip and without compensation to Metro in
further consideration of the performance by
Ultrastrip of its duties and obligations under the
Agreement. Any such Improvements shall become, be,
and remain the sole property of Ultrastrip; provided,
however, that Metro shall own the Improvements (but
not the intellectual property rights relating
thereto) that are incorporated directly in the
Prototype System purchased by Metro from Ultrastrip
pursuant to the provisions of this Agreement.
4. Term: The term of the Agreement will be a period of sixteen
(16) years, beginning May 1, 2002.
5. Schedule of Performance:
(a) Ultrastrip will deliver the Prototype System to Metro
at its shipyard located in Norfolk, Virginia on or
before July 15, 2002.
(b) All Pre-Operational Testing of the Prototype System
will be completed, and all adjustments to the
Prototype System made, on or before August 15, 2002.
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(c) Ultrastrip acknowledges and agrees that time is of
the essence with respect to the performance of its
duties and obligations under Paragraph 5(b) above.
6. Price:
(a) The price for the Prototype System is Two Million
Dollars ($2,000,000). The purchase price for the
Prototype System is payable by Metro to Ultrastrip as
follows.
(b) Upon the execution of the Agreement by Metro and
Ultrastrip, Metro will pay to Ultrastrip a down
payment against the purchase price in the amount of
Five Hundred Thousand Dollars ($500,000). The balance
of the purchase price, less retainage in the amount
of ten (10) percent of the purchase price, will be
payable by Metro to Ultrastrip on the date of
delivery of the Prototype System to Metro at its
shipyard located in Norfolk, Virginia and the
acceptance by Metro of the Prototype System.
Acceptance of the Prototype System shall be deemed to
have occurred on the date when all components,
equipment, and subsystems comprising the Prototype
System have been delivered by Ultrastrip to Metro at
its shipyard located in Norfolk, Virginia in working
order. The components, equipment, and subsystems that
comprise the Prototype System are identified and
listed on EXHIBIT A attached to this Agreement and
hereby made a part hereof but also include any and
all other components, equipment, and subsystems
necessary to enable the Prototype System to perform
its intended function as designed by Ultrastrip, even
if such other components, equipment, and subsystems
are not listed on EXHIBIT A.
(c) Metro will pay one-half of the retainage to
Ultrastrip upon the completion to Metro's reasonable
satisfaction of Pre-Operational Testing for the first
robot that comprises part of the Prototype System and
the other one-half of the retainage upon the
completion to Metro's reasonable satisfaction of the
Pre-Operational Testing for the second robot that
comprises part of the Prototype System. Metro and
Ultrastrip shall establish by mutual agreement
reasonable protocols and test parameters and
objectives for the Pre-Operational Testing.
(d) Upon payment of the purchase price for the Prototype
System, Metro will own the Prototype System and will
have the right to use and market the Prototype System
as provided in this Agreement; provided, however,
that Ultrastrip shall continue to own all
intellectual property relating to the Ultrastrip
Paint Removal Equipment and the Ultrastrip Paint
Removal System as provided in Paragraph 10 of this
Agreement.
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7. Technical and Logistics Support and Service:
(a) During the term of this Agreement, Ultrastrip shall
provide technical and logistics assistance, support,
and service in connection with the development of the
Prototype System for use in connection with the Metro
Ship Coating System and the operation and use by
Metro of the Prototype System thereafter. Such
technical and logistics assistance, support, and
service shall include, without limitation, (i)
training of Metro personnel in the operation of the
Prototype System, (ii) testing of the components,
equipment, and subsystems of the Prototype System,
(iii) collection of test results and evaluation of
test data of the Prototype System, (iv) performing
maintenance on and repairs to the Prototype System,
(v) providing and installing spare parts for the
Prototype System, (vi) incorporating into the
Prototype System Improvements in the Ultrastrip Paint
Removal Equipment or the Ultrastrip Paint Removal
System resulting or arising from independent testing
by Ultrastrip and ongoing product development by
Ultrastrip, (vii) upon execution of a written change
order, incorporating into the Prototype System
Improvements requested by Metro as a resulting of the
further development of the Prototype System in
connection with the integration of the Prototype
System in the Metro Ship Coating System; and (viii)
redesign and modification services, if and when
necessary, as set forth in Paragraph 7(d) below.
(b) Metro will pay compensation to Ultrastrip for the
provision of technical and logistics assistance,
support, and service as follows. (i) During the
period of time from the date of this Agreement
through September 30, 2003, Metro will pay to
Ultrastrip an amount equal to the direct costs
incurred by Ultrastrip, plus an amount that is equal
to twenty-five percent (25%) of such direct costs to
cover Ultrastrip's general and administrative
expense, for all such technical and logistics
assistance, support, and service provided by
Ultrastrip to Metro during such period. (ii)
Beginning on October 1, 2003, and thereafter during
the term of this Agreement, Metro will pay to
Ultrastrip compensation for the provision of
technical and logistics assistance, support, and
service at a rate equal to the rate that Ultrastrip
charges to its best customers for similar technical
and logistics assistance, support and service. For
all such technical and logistics assistance, support,
and service (including redesign and modification
services when and if necessary as provided in
Paragraph 7(d) below), Ultrastrip will provide Metro
with an invoice, in form and detail reasonably
satisfactory to Metro, for such technical and
logistics assistance, support, and service provided
during the preceding calendar month, and Metro will
pay to Ultrastrip the amount of such invoice within
thirty (30) days of receipt by Metro.
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(c) Ultrastrip acknowledges and agrees that Ultrastrip's
direct costs shall be subject to review by Metro's
independent certified public accountants pursuant to
the provisions of a Firewall Agreement between Metro
and Ultrastrip. The provisions of this paragraph
shall only be applicable to Ultrastrip's direct costs
incurred during the period of time beginning on the
date of execution of this Agreement and continuing
through October 1, 2003.
(d) Ultrastrip agrees that it will provide technical and
logistics assistance, support, and service throughout
the term of this Agreement. If, as a result of
Improvements in the Ultrastrip Paint Removal
Equipment and/or the Ultrastrip Paint Removal System,
consumables and/or spare parts are no longer
available for a particular component, item of
equipment, or subsystem, Ultrastrip agrees, at
Metro's cost and expense, to redesign and modify the
Prototype System so that Ultrastrip will be able to
continue to provide technical and logistics
assistance, support, and service with currently
available consumables and spare parts.
8. Marketing and Sale of the Ultrastrip Paint Removal System:
(a) Ultrastrip grants to Metro the non-exclusive right,
without payment to Ultrastrip of any further
development fee, licensing fee, royalty or other
compensation, to market the Ultrastrip Paint Removal
System in connection with the marketing of the Metro
Ship Coating System. Ultrastrip agrees to provide
such assistance and support in connection with
Metro's marketing effort as Metro may reasonably
request.
(b) Ultrastrip further grants to Metro the right to
include in its marketing and promotional materials
references to the Ultrastrip Paint Removal System as
developed in connection with the development of the
Metro Ship Coating System.
(c) Notwithstanding the provisions of Paragraph 8(a) and
8(b) above, Ultrastrip shall have the right to
approve the descriptions of the Ultrastrip Paint
Removal System and any other of its products
described by Metro in Metro's marketing brochures,
advertising, sales presentations, and other materials
prepared by or for Metro.
(d) For each Metro customer who desires to purchase the
Ultrastrip Paint Removal System, Ultrastrip agrees to
sell the Ultrastrip Paint Removal System, together
with a license and the right to use the system, to
each such Metro customer in accordance with normal
business practices (including that such customer
shall meet Ultrastrip's standard credit check
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criteria). Ultrastrip shall incorporate such
reasonable changes or modifications to the Ultrastrip
Paint Removal System as are necessary to customize
the system for use by such Metro customer. The
purchase price for any Ultrastrip Paint Removal
System purchased by a Metro customer shall not be
greater than the lowest purchase price for comparable
Ultrastrip Paint Removal Equipment that Ultrastrip
has sold to any of its other customers during six (6)
month period preceding the date of such sale,
adjusted to include charges for any additional
equipment, training, modifications, and other parts
or services specially requested by such Metro
customer. The purchase price for the Ultrastrip Paint
Removal System shall include the price of the system,
the additional cost of any customized features or
modifications requested by the Metro customer, the
delivery of the system to the Metro customer, and the
provision of training and technical assistance,
support, and service to the Metro customer.
(e) In consideration of the favorable pricing to be
provided by Ultrastrip as set forth in Paragraph 8(d)
above, Metro agrees that if a Metro customer
purchases the Ultrastrip Paint Removal System as part
of the Metro Ship Coating System, Metro will not xxxx
up the cost of the Ultrastrip Paint Removal System in
its price quotation to its customer for the Metro
Paint Removal System.
(f) For each Metro customer who desires to purchase the
Ultrastrip Paint Removal System without the Metro
Ship Coating System, Ultrastrip may impose its
standard sales terms and conditions in connection
with such purchase; provided, however, that
Ultrastrip agrees to sell the Ultrastrip Paint
Removal System at a price not lower than the price of
the Ultrastrip Paint Removal System set forth in
Paragraph 8(d) above.
9. Confidentiality:
(a) Ultrastrip will keep confidential all Metro
Proprietary Information throughout the term of the
Agreement and thereafter.
(b) Ultrastrip will not disclose any Metro Proprietary
Information to any person, without the prior written
consent of Metro, except as follows: (i) Ultrastrip
may disclose Metro Proprietary Information in
judicial or administrative proceedings to the extent
that Ultrastrip is legally compelled to disclose such
information, provided that Ultrastrip shall have
given Metro prior written notice of such required
disclosure of and shall have afforded Metro the
opportunity to obtain an appropriate protective order
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or other assurance satisfactory to Metro of
confidential information] treatment for the
information required to be disclosed; (ii) Ultrastrip
may make such disclosure of Metro Proprietary
Information to which Metro has given its prior
written consent, and (iii) Ultrastrip may make
disclosure of Metro Proprietary Information to
Ultrastrip's employees, directors, officers,
representatives and advisors who need to know such
information as an incident to performing hereunder,
in each case provided that such person or entity to
whom the information is disclosed agrees in writing
and in a form approved and enforceable by Metro to
keep such information confidential, and provided that
Ultrastrip shall be responsible to Metro for any
breach of the confidentiality provisions of this
Agreement by any such persons or entities to whom it
has disclosed Metro Proprietary Information..
(c) Metro will keep confidential all Ultrastrip
Proprietary Information throughout the term of the
Agreement and thereafter.
(d) Metro will not disclose any Ultrastrip Proprietary
Information to any person without the prior written
consent of Ultrastrip except as follows: (i) Metro
may disclose Ultrastrip Proprietary Information in
judicial or administrative proceedings to the extent
that Metro is legally compelled to disclose such
information, provided that Metro shall have given
Ultrastrip prior written notice of such required
disclosure of and shall have afforded Ultrastrip the
opportunity to obtain an appropriate protective order
or other assurance satisfactory to Ultrastrip of
confidential information] treatment for the
information required to be disclosed; (ii) Metro may
make such disclosure of Ultrastrip Proprietary
Information to which Ultrastrip has given its prior
written consent, and (iii) Metro may make disclosure
of Ultrastrip Proprietary Information to Metro's
employees, directors, officers, representatives and
advisors who need to know such information as an
incident to performing hereunder, in each case
provided that such person or entity to whom the
information is disclosed agrees in writing and in a
form approved and enforceable by Ultrastrip to keep
such information confidential, and provided that
Metro shall be responsible to Ultrastrip for any
breach of the confidentiality provisions of this
Agreement by any such persons or entities to whom it
has disclosed Ultrastrip Proprietary Information.
(e) Metro and Ultrastrip shall each have the right to
xxxx or require to be marked such party's Proprietary
Information "confidential", and the other party shall
be obligated to maintain and preserve the
confidentiality of any such Proprietary Information
so marked in accordance with the provisions of this
Agreement.
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(f) The confidentiality obligations of each of Ultrastrip
and Metro will extend to the shareholders, members,
directors, officers, employees, agents, and
contractors of each party, and all such persons must
agree to keep confidential all such Proprietary
Information.
10. Ownership of Intellectual Property:
(a) Metro acknowledges and agrees that, as between
Ultrastrip and Metro, Ultrastrip owns (including the
rights to license, patent, sell, and use) the
Ultrastrip Paint Removal Equipment, the Ultrastrip
Paint Removal System, and all Proprietary Information
relating thereto, and possesses the right to license
and use the Ultrastrip Paint Removal Equipment and
the Ultrastrip Paint Removal System. Metro further
acknowledges and agrees that any Improvements of the
Ultrastrip Paint Removal Equipment or the Ultrastrip
Paint Removal System that may arise during or in
connection with the development of the Prototype
System for use with the Metro Ship Coating System
are, and shall remain, the product and property of
Ultrastrip.
(b) Ultrastrip acknowledges and agrees that, as between
Metro and Ultrastrip, Metro owns (including the
rights to license, patent, sell, and use) the Metro
Ship Coating System and all Proprietary Information
relating thereto (including, without limitation, the
CAPE System and the SPEEDE Drydock, but otherwise
excluding the Ultrastrip Paint Removal Equipment and
the Ultrastrip Paint Removal System and the
Ultrastrip Proprietary Information relating thereto
which remain the property of Ultrastrip), and
possesses the right to license and use the Metro Ship
Coating System. Ultrastrip further acknowledges and
agrees that any Improvements of the Metro Ship
Coating System (including, without limitation, the
CAPE System, the SPEEDE Drydock, and the Prototype
System, but otherwise excluding any Improvements in
the Ultrastrip Paint Removal Equipment and the
Ultrastrip Paint Removal System and the Ultrastrip
Proprietary Information relating thereto which remain
the property of Ultrastrip) that may arise during or
in connection with the further development of the
Metro Ship Coating System are and shall remain the
product and property of Metro.
(c) (c) At no time during or after the term of this
Agreement shall Metro reverse engineer, manufacture,
or have manufactured for itself or any of its
customers, except by Ultrastrip under the terms of
this Agreement, the Ultrastrip Paint Removal
Equipment or the Ultrastrip Paint Removal System (or
any part thereof that includes Proprietary
Information or technology owned by Ultrastrip).
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Notwithstanding the foregoing limitation, Ultrastrip
acknowledges and agrees that if Ultrastrip does not
provide technical and logistics assistance, support
and service as required under Paragraph 7 above,
Metro shall have the right to procure technical and
logistics assistance, support, and service from
another source, and shall have the right, to the
extent necessary to provide for the continuing
maintenance, operation, and repair of the Prototype
System, to fabricate and manufacture, or to have
fabricated and manufactured, components, equipment,
or subsystems necessary for such maintenance,
operation, and repair.
11. Patents:
(a) Ultrastrip represents and warrants to Metro that
Ultrastrip owns or has the unconditional and
unrestricted legal right to use the Ultrastrip Paint
Removal Equipment and the Ultrastrip Paint Removal
System and that, with respect to such equipment and
system, the performance by Ultrastrip of its
obligations under this Agreement does not and will
not infringe upon any intellectual property owned,
used or held by a third party in any way relating to
such equipment and system. Ultrastrip shall use
commercially reasonable efforts at all times to
prosecute and maintain all Ultrastrip intellectual
property and to pay all application, renewal, and
registration costs relating thereto.
(b) Ultrastrip shall defend, at its cost and expense, any
suit brought against Metro or a Metro customer,
claiming that the use and incorporation of the
Ultrastrip intellectual property and/or the
Ultrastrip Paint Removal Equipment or the Ultrastrip
Paint Removal System infringes upon any intellectual
property held by a third party. Ultrastrip shall pay
all damages and costs, finally awarded against Metro
in any such suit, and in the event that the use and
incorporation of the Ultrastrip intellectual property
and/or the Ultrastrip Paint Removal Equipment or the
Ultrastrip Paint Removal System or any portion
thereof is held to infringe or abridge any
intellectual property and the use of the Ultrastrip
Paint Removal Equipment or the Ultrastrip Paint
Removal System is enjoined, Ultrastrip shall have the
option of procuring for Metro or Metro's customer the
right to continue using the Ultrastrip Paint Removal
Equipment and the Ultrastrip Paint Removal System,
replacing the same with a non-infringing product of
equal quality and capability, or modifying the
Ultrastrip Paint Removal Equipment and/or the
Ultrastrip Paint Removal System so as to avoid
infringement. Notwithstanding the foregoing, the
obligations of Ultrastrip under this paragraph shall
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not extend to any claim or suit that arises solely
from any modification of the Prototype System that
has not been made in accordance with the provisions
of this Agreement.
(c) Metro represents and warrants to Ultrastrip that
Metro owns or has the unconditional and unrestricted
legal right to use the CAPE System and the SPEEDE
Drydock and that, with respect to such system and
drydock, the performance by Ultrastrip of its
obligations under this Agreement does not and will
not infringe upon any intellectual property owned,
used or held by a third party in any way relating to
such system and drydock. Metro shall use commercially
reasonable efforts at all times to prosecute and
maintain all Metro intellectual property and to pay
all application, renewal, and registration costs
relating thereto.
(d) Metro shall defend, at its cost and expense, any suit
brought against Ultrastrip of an Ultrastrip customer,
claiming that the use and incorporation of the Metro
intellectual property and/or the CAPE System or the
SPEEDE Drydock infringes upon any intellectual
property held by a third party. Metro shall pay all
damages and costs, finally awarded against Ultrastrip
in any such suit, and in the event that the use and
incorporation of the Metro intellectual property
and/or the CAPE System or the SPEEDE Drydock or any
portion thereof is held to infringe or abridge any
intellectual property and the use of the CAPE System
or the SPEEDE Drydock is enjoined, Metro shall have
the option of procuring the right to continue using
the CAPE System or the SPEEDE Drydock, replacing the
same with a non-infringing product of equal quality
and capability, or modifying the CAPE System or the
SPEEDE Drydock so as to avoid infringement.
12. Indemnification:
(a) Ultrastrip agrees to indemnify, defend, and hold
harmless Metro for loss or liability arising from the
negligent acts or omissions of Ultrastrip or its
employees, agents or contractors unless such loss or
liability is caused by the negligence of Metro or its
employees, agents or contractors. Ultrastrip further
agrees to indemnify, defend, and hold harmless Metro
from damage to property and/or injury to persons
including death caused by a defect in the design or
manufacture of the Ultrastrip Paint Removal
Equipment, the Ultrastrip Paint Removal System,
and/or the Prototype System; provided, however, that
Ultrastrip shall not have any obligation to indemnify
Metro for damage to property and/or injury to persons
including death caused by any modification of the
Prototype System that has not been made in accordance
with the provisions of this Agreement.
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(b) Metro agrees to indemnify, defend, and hold harmless
Ultrastrip for loss or liability arising from the
negligent acts or omissions of Metro or its
employees, agents or contractors unless such loss or
liability is caused by the negligence of Ultrastrip
or its employees, agents or contractors. Metro
further agrees to indemnify, defend, and hold
harmless Ultrastrip from damage to property and/or
injury to persons including death caused by a defect
in the design or manufacture of the Metro Ship
Coating System.
13. Limitation of Liability:
(a) Except as set forth above in Paragraph 12, neither
Ultrastrip nor Metro will be liable to the other
party for indirect, special, incidental or
consequential damages.
14. Termination For Cause:
(a) Metro shall have the right to terminate the Agreement
if Ultrastrip does not proceed, at all times,
diligently with the performance of its obligations
under this.
(b) Ultrastrip shall have the right to terminate the
Agreement if Metro does not proceed, at all times,
diligently with the performance of its obligations
under this Agreement.
(c) Each party will have the right to terminate the
Agreement if either party breaches its agreements
concerning the obligation to keep confidential
Proprietary Information.
15. Relationship of the Parties:
(a) Each party to this Agreement is an independent
contractor under this Agreement, and nothing in this
Agreement is intended to constitute either party an
agent, representative, joint venturer, partner,
employee or affiliate of the other for any purpose
whatsoever. Each party shall hold itself out to third
parties only as an independent contractor of the
other.
(b) (b) Notwithstanding anything in this Agreement that
implies the contrary, the rights granted each of the
parties under this Agreement are non-exclusive
rights, and provided that each party shall comply
with the confidentiality and ownership rights of the
other party as provided herein, such party may enter
into contracts, agreements and arrangements with
third parties, whether or not in competition with the
other party to this Agreement, and without any
obligation to present to any party to this Agreement
the opportunity to participate in a transaction
contemplated with any third party.
14
16. Specific Performance: Each party to this Agreement
acknowledges and agrees that any breach or threatened breach
of any of the provisions of Paragraph 9 "Confidentiality" or
Paragraph 10 "Ownership of Intellectual Property" could not be
adequately remedied by monetary damages, and therefore that
such provisions shall be enforceable by temporary and
permanent injunction, in addition to all other remedies that
may be available under this Agreement, by law and in equity.
17. Costs: Each party shall bear its own costs in connection with
the negotiation of and entry into this Agreement and the
performance of its obligations under this Agreement.
18. Publicity: Except as otherwise required by applicable law or
regulations (including, without limitation, the regulations of
the Securities and Exchange Commission), no information
concerning this Agreement or the development of the Prototype
System shall be released by either party for publication,
advertising or for any other purpose without the prior written
approval of the other party.
19. Notices: Any notice required or permitted to be given under
this Agreement shall be sufficient if in writing and if
hand-delivered or sent by certified or registered mail, return
receipt requested, or nationally recognized overnight courier
service to the following addresses:
If to Metro:
Metro Machine Corp.
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: President
If to Ultrastrip:
Ultrastrip Systems, Inc.
0000 XX Xxxxxx Xxxxxxx
Xxxxxx, Xxxxxxx 00000
Attention: President
All notices including a notice of change of address will be
deemed effective upon receipt by the party being notified.
15
20. Headings: The section headings contained herein are for
reference purposes only and shall not in any way affect the
meaning and interpretation of this Agreement.
21. Attorney's Fees: If any party is required to enforce this
Agreement, whether or not through litigation, the prevailing
party shall be entitled to receive reasonable attorneys' fees
and all costs incurred in connection with such enforcement,
including fees and costs of appeal. A party shall not be
deemed to have prevailed if the party takes a nonsuit in any
litigation filed by such party or such litigation or dispute
is otherwise resolved adversely to such party.
22. Disputes: Either party may give the other party written notice
of any dispute not resolved in the normal course of business.
The party shall attempt in good faith to resolve any disputes
arising out of or relating to this Agreement promptly by
negotiation between executives of each party who have the
authority to settle and resolve the controversy. If the
dispute has not been resolved within sixty (60) days of
written notice, then either party may initiate non-binding
mediation of the dispute.
23. Force Majeure: If Ultrastrip suffers delay in performance due
to any cause beyond its reasonable control, including, but not
limited to, acts of God, act or failure to act of any
government, act or omission by Metro, or fire, flood, or
sabotage, the time of performance shall be extended for a
period of time equal to the period of delay experienced by
Ultrastrip. Ultrastrip shall give Metro notice in writing
within a reasonable time after Ultrastrip becomes aware of any
such delay and a written estimate of the period of time the
delay is reasonably expected to continue.
24. Binding Effect; Assignment: The terms of this Agreement shall
be binding upon and inure to the benefit of, and shall be
enforceable by, the respective successors and permitted
assigns of each of the parties hereto. This Agreement may not
be assigned by either party without the prior written consent
of the other party hereto, or except in a transaction in which
the assignee has acquired by merger, consolidation, stock
purchase, asset purchase or otherwise, substantially all of
the assets and business of the assigning party.
25. Severability: The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the
other provisions hereof, and this Agreement shall be construed
in all respects as if such invalid or unenforceable provisions
were omitted.
26. Waiver: The waiver or inaction by a party of a breach of any
condition or covenant of this Agreement by the other party
shall not be construed as a waiver of any subsequent breach
nor shall it constitute a waiver of the non-breaching party's
rights hereunder.
16
27. Counterparts and Facsimile Signatures: This Agreement may be
executed in counterparts, and each counterpart shall
constitute an original of this Agreement and no party shall be
required to account for more than one copy of this Agreement.
This Agreement may be executed by facsimile signatures of each
party sent by facsimile transmission to the other party.
28. Exhibits and Schedules: The exhibits and schedules to this
Agreement form an integral part of, and are incorporated into,
this Agreement.
29. Entire Agreement: This Agreement contains the entire agreement
of the parties and may be changed only by an agreement in
writing signed by all parties hereto.
30. Governing Law: This Agreement and any amendments hereto shall
be construed in accordance with the laws of the State of New
York.
[signatures of the parties appear on the following pages]
17
IN WITNESS WHEREOF, Metro and Ultrastrip have hereunto set their hands
and seals as of the day and year first written above.
METRO MACHINE CORP.
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------
Title: Chairman-CEO
[SEAL]
18
IN WITNESS WHEREOF, Metro and Ultrastrip have hereunto set their hands
and seals as of the day and year first written above.
ULTRASTRIP SYSTEMS, INC.
By:/s/ Xxxxxx X. Xxxxxxx
--------------------------------
Title: President
[SEAL]
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EXHIBIT A
List of Components, Equipment and Subsystems of the Prototype System
--------------------------------------------------------------------
The Prototype System includes:
Four (4) ISO-Containers, Lloyd's registered CSC 20' x 8' x 8'6", sound
proofed, housing control panel, 55,000 psi, 4 gpm UHP, 75HP vacuum,
enviro-filtration unit capable of 10 gpm filtration, with flocculent tank and
cyclone tank
Two (2) Paint particle dewatering box
Two (2) M-2000 robotic vehicles with operator remote control unit, and
250' tether, which includes electrical, UHP and vacuum hoses.
Each UltraStrip Paint Removal System includes the following equipment:
01- M2000 control panel - robot control system, includes the operator's
remote control unit
02- 20ft x 8ft x 8ft 6in high: CSC rated shipping container
03- 75HP vacuum: vacuum is tuned for the M2000 operation
04- Cyclone tank: High efficiency holding tank and paint separation
unit
05- Transfer pump: Air powered sludge transfer
06- Envirofiltration unit: 10 gpm high efficiency filtration system,
total effluent filter
07- Flocculent tank: 2 stage flocculent dousing
08- Paint particle dewatering box
00- X0000 robot: complete unit
10- Umbilical: 250ft power and control tether
11- Vacuum and UHP Hose: 250ft.
12- UltraStrip UHP Pump 55K psi @ 4 gpm twin intensifier
M2000 Technical and Performance Features
Magnetic Air Gap -- Magnetic adhesion of the vehicle incorporates
patented, permanent magnet, air gap technology. Under normal operation, the
magnetic assembly does not come in contact with the working surface.
Vehicle Brakes - All vehicle motors have internal, fail-safe brakes.
Brakes are instantly activated upon a power loss or operator-initiated Emergency
Stop.
Vehicle Speed -- Vehicle is capable of achieving a linear speed of zero
to twenty inches per second on any surface orientation.
Vehicle Wheels- Wheels used on the vehicle are high traction and
non-marring.
00
Xxxxxxx Xxxxx --The vehicle incorporates a four-wheel drive and
four-wheel steering assembly. Each wheel has independent traction control. (The
vehicle does not use skid steer.)
Vehicle Operating Radius- The vehicle is capable of navigating on
convex and concave surfaces of 1.8m (72 inches) in radius.
Vehicle Speed Control -The vehicle is capable of precise speed control
on all surface orientations (vertical, flat, inverted, curved) without the use
of lifting cables. (The vehicle will not jog or skid).
Vacuum -The extraction vacuum is capable of continuous operation.
Minimum vacuum requirements are 15"hg. and 1800 CFM at a 200' distance.
Emergency Stop Safety - The vehicle utilizes Emergency-stop circuitry
so that the operator can instantly halt vehicle motion and high-pressure water
flow at any time. In addition, the vehicle will automatically halt if unsafe
magnetic adhesion conditions are sensed. The vehicle operator can override the
E-stop for short periods in low adhesion conditions.
Weight Lifting Capacity - - the vehicle alone (without vacuum and water
hoses) is capable of a 500 lb. accessory dead lift on a vertical
surface.
Cut Path - -The vehicle's cutting, cleaning path is 15".
Adjustable Cutting Head Height - - Cutting head height is remotely
operated and is adjustable to allow for full coating removal, sweeping, sweeping
and spotting operations.
Cutting Head Maintenance: The vehicle's cutting head raises and locks
in place for easy and safe access without detaching or removing the vehicle from
the vessel's hull.
Sealing - A flexible, compliant seal captures effluent on all surfaces.
Dimensions and Weight- Vehicle dimensions are 1.71m long x 0.69m wide
(at shroud) x 0.56m high; 67" long x 27" wide (at shroud) x 22" high
Weight: 222kg / 490lb (not including hoses and tether).
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