EXCHANGE OFFER AGREEMENT
------------------------
THIS Exchange Offer Agreement (this "Agreement") is entered into as
of the 16th day of April, 2002, between WHITEWING LABS, INC., a corporation
organized under the laws of the State of Delaware ("Whitewing") and TOTAL FILTER
RECYCLING, INC., D.B.A. TOTAL RECYCLING SERVICES, a corporation organized under
the laws of the State of New Jersey ("TRS").
WHEREAS, the Boards of Directors of Whitewing and TRS each have
determined that it is advisable and in the best interests of each corporation
and their respective shareholders to effect an acquisition of TRS by Whitewing,
pursuant to which Whitewing shall make an exchange offer (the "Offer"), subject
to terms and conditions contained herein, to exchange 20 shares of its Common
Stock par value $0.001 per share (the "Whitewing Common Stock") for each share
of TRS Common Stock, no par value per share (the "TRS Common Stock"), tendered
by holders of TRS Common Stock (the "TRS Shareholders") upon the terms and
subject to the conditions set forth herein, such that upon consummation of the
Offer, TRS shall become a subsidiary of Whitewing pursuant to a tax free reverse
merger in accordance with I.R.C. 368;
WHEREAS, the TRS Shareholders are either "accredited investors" within
the meaning of Rule 501(a) of Regulation D of the rules promulgated by the
Securities and Exchange Commission (the "SEC") or are otherwise Exempted Persons
(as defined below in Section 1.3);
WHEREAS, immediately prior to the consummation of the Offer, certain
persons are subscribing (the "Subscription") to purchase shares of TRS Common
Stock pursuant to Subscription Agreements variously dated as of their respective
1
signatures (the "Subscription Agreement"), and such persons who have subscribed
for such shares of TRS Common Stock are eligible to participate in the Offer;
WHEREAS, by resolutions duly adopted, the respective Boards of
Directors of Whitewing and TRS have approved and adopted this Agreement and the
transactions contemplated hereby;
NOW THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements herein contained, the
parties hereto agree as follows:
ARTICLE I
THE OFFER
---------
1.1 CLOSING. The exchange of shares pursuant to the Offer and the closing
of the transactions contemplated herein (the "Closing") shall occur at the
offices of Xxxxxxxxxx & Xxxxxxxx LLC, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
at 10:00 A.M. local time on April 23, 2002, with the understanding that the
proceedings may not be substantially completed until the following day. In the
event the Closing does not occur on the said closing date due to no fault on the
part of Whitewing, TRS shall have the right to adjourn the Closing for a period
of up to 14 days by paying to Whitewing, at or before the close of business on
the closing date, an Adjournment Fee of $25,000. In the event the Closing does
not occur on the adjourned closing date, TRS shall have the right to further
adjourn the Closing for up to an additional 14 days by paying to Whitewing, at
or before the close of business on the adjourned closing date, a second
Adjournment Fee of $25,000. There shall be no further right of adjournment. All
such Adjournment Fees shall be deposited into Whitewing's cash account.
1.2 THE EXCHANGE. At the Closing, provided that each of the conditions
set forth in Articles V and VI hereof have been satisfied or waived and provided
that this Agreement shall not have been terminated in accordance with Section
2
8.4, Whitewing shall issue and exchange 20 shares of Whitewing Common Stock for
each share of TRS Common Stock validly and duly tendered pursuant to Section 1.3
of this Agreement.
1.3 TENDERING SHAREHOLDERS. Each TRS Shareholder that wishes to tender
their shares of TRS Common Stock pursuant to the Offer (a "Tendering
Shareholder") shall [unless such shareholder shall have subscribed for shares of
TRS Common Stock in the Subscription and shall have executed an Investor
Questionnaire in the form set forth as an Attachment to the Subscription
Agreement (the "Investor Questionnaire")] execute a Shareholder's Certificate in
the form set forth on Exhibit A hereto (a "Shareholder's Certificate"), and a
Stock Power in the form set forth on Exhibit B hereto (the "Stock Power" and
together with either of the Investor Questionnaire or the Shareholder's
Certificate, the "Shareholder Transmittal Forms") and shall submit such duly
executed Shareholder Transmittal Forms, together with original stock
certificate(s) for their shares of TRS Common Stock to:
Whitewing Labs, Inc.
c/o Xxxxxx Xxxxxx
000 Xxxxxxxx (Xxxxx 000)
Xxx Xxxx, XX 00000
no later than one day prior to the Closing, as the same may be adjourned by the
exercise, by TRS, of its right to adjourn the Closing in accordance with Section
1.1. The Shareholder's Certificate will require the Tendering Shareholder to
either (a) make a representation to the effect that he/she is an "accredited
investor" within the meaning of Rule 501(a) of Regulation D of the rules
promulgated by the SEC (an "Accredited Investor"), or (b) if the Tendering
Shareholder is not an Accredited Investor, make a representation to the effect
that they are not an "underwriter" or "dealer", as such terms are defined in
Sections 2(11) and 2(12) of the Securities Act, respectively, and that they have
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not acquired the Whitewing Common Stock received in the Offer pursuant to any
"public offering" as such term is used in Sections 4(2) of the Securities Act
(an "Exempted Person"). Any submission by a Tendering Shareholder of their
original TRS Common Stock certificate without the Shareholders Transmittal Forms
or vice versa shall not be considered due and valid tender of TRS Common Stock
pursuant to the Offer.
1.4 DIRECTORS. At the Closing, the persons listed on Schedule A
attached hereto shall be elected and shall begin serving as members of the Board
of Directors of Whitewing. All other directors of Whitewing not listed on
Schedule A shall have resigned at or prior to Closing.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF TRS
-------------------------------------
2. TRS represents and warrants to Whitewing that:
2.1 DUE ORGANIZATION, GOOD STANDING AND CORPORATE POWER. TRS is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and TRS has all requisite corporate
power and authority to own, lease and operate its properties and to carry on its
business as now being conducted, except where the failure to be so organized,
existing and in good standing or to have such power and authority could not
reasonably be expected to, individually or in the aggregate, have a material
adverse effect on TRS's business or TRS's ability to consummate the transactions
contemplated hereby. TRS is duly qualified or licensed to do business and is in
good standing in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification necessary, except in such jurisdictions where the failure to be so
qualified or licensed and in good standing could not reasonably be expected to,
individually or in the aggregate, have a material adverse effect on TRS.
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2.2 APPROVAL OF AGREEMENTS. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized and approved by the Directors of TRS, and no other corporate
proceedings on the part of TRS are necessary to authorize this Agreement or the
carrying out of the transactions contemplated hereby. TRS has the right, power
and authority to enter into this Agreement and consummate the transactions
contemplated hereby. Neither the execution and delivery of this Agreement, nor
the carrying out of the transactions contemplated hereby, will result in any
violation of or be in conflict with any instruments, laws, orders or
regulations, and no consent, approval or authorization of any lender, trustee,
security holder or governmental agency is required in connection with the
execution, delivery or performance by TRS of this Agreement. TRS is not subject
to any charter provision or By-Law, mortgage, lease, agreement, instrument,
order, judgment or decree, to which it is a party or by which it or its
properties are bound which would prevent or require the consent of any other
person for the consummation of the transactions contemplated by this Agreement.
2.3 NUMBER OF SHARES OF TRS COMMON STOCK OUTSTANDING. All issued and
outstanding shares of TRS Common Stock have been duly authorised and validly
issued and are fully paid and nonassessable. Effective upon Closing, there shall
be 1,400,000 shares of TRS Common Stock issued and outstanding. At Closing there
shall be no outstanding or authorized options, warrants, rights, subscriptions,
claims of any character, agreements, obligations, convertible or exchangeable
securities, or other commitments, contingent or otherwise, relating to shares of
capital stock or other equity interests of TRS, pursuant to which TRS is or may
become obligated to issue shares of its capital stock or other equity interests
or any securities convertible into, exchangeable for, or evidencing the right to
subscribe for, any shares of the capital stock or other equity interests of TRS.
There are no outstanding obligations of TRS to repurchase, redeem or otherwise
5
acquire any outstanding securities of TRS. TRS has no outstanding bonds,
debentures, notes or other indebtedness the holders of which have the right to
vote (or convertible or exchangeable into or exercisable for securities the
holders of which have the right to vote) with the shareholders of TRS on any
matter.
2.4 TRS FINANCIAL STATEMENTS. The audited Balance Sheets and the
audited Income Statements for TRS for the periods ended December 31, 2000 and
December 31, 2001 (collectively, the "TRS Financial Statements") are each set
forth on Exhibits C and D, respectively. The TRS Financial Statements as of
their respective dates comply as to form in all material respects with
applicable accounting requirements and have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis during
the periods involved (except as may be indicated in the notes thereto) and
fairly and accurately present in all material respects the financial position of
TRS as of the dates thereof and the results of their operations for the periods
then ended.
2.5 NO MATERIAL ADVERSE CHANGE IN TRS. There shall have been no
material adverse change on the financial condition of TRS taken as a whole
between December 31, 2001 and the Closing Date, except that occurrences due to a
disruption of TRS's business solely as a result of the announcement of the
execution of this Agreement and the transactions proposed to be consummated by
this Agreement shall be excluded from consideration for purposes of material
adverse change herein.
2.6 BRING-DOWN OF REPRESENTATIONS. The representations and warranties
of TRS contained herein will be true and correct at and as of the Closing Date
as though made at and as of such date, except as affected by the transactions
contemplated by this Agreement or where intended by their context to be true
only as of the date hereof.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF WHITEWING
-------------------------------------------
3. Whitewing represents and warrants to TRS that:
3.1 DUE ORGANIZATION, GOOD STANDING AND CORPORATE POWER. Whitewing is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and Whitewing has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted, except where the failure to be so
organized, existing and in good standing or to have such power and authority
could not reasonably be expected to, individually or in the aggregate, have a
material adverse effect on Whitewing's business or Whitewing's ability to
consummate the transactions contemplated hereby. Whitewing is duly qualified or
licensed to do business and is in good standing in each jurisdiction in which
the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, except in such jurisdictions
where the failure to be so qualified or licensed and in good standing could not
reasonably be expected to, individually or in the aggregate, have a material
adverse effect on Whitewing.
3.2 APPROVAL OF AGREEMENTS. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized and approved by the Board of Directors of Whitewing, and no
other corporate proceedings on the part of Whitewing are necessary to authorize
this Agreement or the carrying out of the transactions contemplated hereby.
Whitewing has the right, power and authority to enter into this Agreement and
consummate the Offer contemplated hereby. Neither the execution and delivery of
this Agreement, nor the carrying out of the transactions contemplated hereby,
will result in any violation of or be in conflict with any instruments, laws,
7
orders or regulations, and no consent, approval or authorization of any lender,
trustee, security holder or governmental agency is required in connection with
the execution with the execution, delivery or performance by Whitewing of this
Agreement or the Offer. Whitewing is not subject to any charter provision or
By-Law, or any mortgage or lease, agreement, instrument, order, judgment or
decree to which it is a party or by which it or its properties are bound which
would prevent or require the consent of any other person for the consummation of
the transactions contemplated by this Agreement.
3.3 CAPITAL STOCK OF WHITEWING. The authorized capital stock of
Whitewing consists solely of 100,000,000 shares of Whitewing Common Stock, of
which at Closing there shall be 35,061,443 shares of Whitewing Common Stock duly
authorized, validly issued and outstanding, fully paid and nonassessable, and
preferred stock, none of which is outstanding. There are no pre-emptive rights
with respect to the Whitewing Common Stock. None of such shares has been issued
in violation of the Securities Act of 1933, as amended (the "Securities Act").
As of the Closing, there will be no outstanding options, warrants, or other
rights to subscribe for or purchase or otherwise acquire or to sell or otherwise
dispose of any securities of Whitewing, or any plans, contracts or commitments
providing for the issuance of or the granting of rights to acquire any capital
stock of Whitewing or securities convertible into or exchangeable for capital
stock of Whitewing, except options exercisable for a total of 1,200 shares at an
exercise price of $4.00 per share. There are no shares of capital stock of
Whitewing reserved for issuance by Whitewing.
3.4 WHITEWING FINANCIAL STATEMENTS AND SEC FILINGS. Whitewing has filed
all required reports, schedules, forms, statements and other documents (the
"Whitewing SEC Documents") with the SEC since the date that it became a
reporting company under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). As of their respective dates, the Whitewing SEC Documents
8
complied in all material respects with the requirements of the Securities Act or
the Exchange Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such Whitewing SEC Documents, and none of
the Whitewing SEC Documents when filed contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements herein, in light of the
circumstances under which they were made, not misleading. The financial
statements of Whitewing included in the Whitewing SEC Documents as of their
respective dates comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with generally accepted
accounting principles (except, in the case of unaudited statements, as permitted
by Form 10-Q of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly present in
all material respects the financial position of Whitewing as of the dates
thereof and the results of its operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal and recurring
year-end audit adjustments not material in amount). Except as reflected in the
financial statements of Whitewing included in the Whitewing SEC Documents,
Whitewing has no liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) which are required by generally accepted
accounting principles to be set forth on a consolidated balance sheet of
Whitewing or in the notes thereto other than any liabilities and obligations
incurred since December 31, 2001 in the ordinary course of business or which,
individually or in the aggregate, are not expected to have a material adverse
effect on Whitewing.
3.5. NO REGISTRATION REQUIRED. The issuance of Whitewing Common Stock
pursuant to the Offer and in accordance with the terms and conditions contained
herein, does not need to be registered by Whitewing under the Securities Act or
9
the Exchange Act, and the consummation of the Offer and the transactions
contemplated herein does not require the approval, consent or filing of any
forms with any applicable US or State governmental, regulatory or administrative
body.
3.6. WHITEWING CASH AT CLOSING. As of April 1, 2002, Whitewing shall
have not less than $450,000 in cash at hand and shall also be the holder of a
note receivable with a principal outstanding balance of $189,656 (the "Note
Receivable"). To the best knowledge of the management of Whitewing, the
outstanding principal balance of, and all accrued interest payments due under,
the Note Receivable are collectible in full, and without any likelihood of a
default thereunder.
3.7. OPERATION PENDING CLOSING. Pending the Closing, Whitewing shall
expend no monies other than that which is reasonable and necessary or required
by law to maintain its charter in good standing, to comply with requirements of
law, to retain its integrity as a public company, and to maintain its Officers
and Directors insurance policy in force.
3.8. BRING-DOWN OF REPRESENTATIONS. The representations and warranties
of Whitewing contained herein will be true and correct at and as of the Closing
Date as though made at and as of such date, except as affected by the
transactions contemplated by this Agreement or where intended by their context
to be true only as of the date hereof.
ARTICLE IV
ADDITIONAL AGREEMENTS
---------------------
4. REGISTRATION RIGHTS AGREEMENT.
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a. On the Closing Date, Whitewing and some of the Tendering
Shareholders who have recently acquired their TRS Common Stock for cash
consideration or, after January 1, 2002 exchanged debt instruments of TRS for
TRS Common Stock (collectively, the "Contributing Shareholders") shall have
executed the Registration Rights Agreement substantially in the form attached
hereto as Exhibit E, pursuant to which Whitewing shall agree to, within 90 days
of the Closing Date, register under the Securities Act and the Exchange Act
those shares issued to the Contributing Shareholders pursuant to the Offer.
b. On or before the Closing Date, Whitewing, W-Net, Inc., Xxxxxx X.
Xxxxx and Xxxxxxx Xxxxxxxx shall have executed the Registration Rights Agreement
substantially in the form annexed hereto as Exhibit F, pursuant to which
Whitewing shall agree to, within 90 days of the Closing Date, register under the
Securities Act and the Exchange Act the shares which each of Messrs. Xxxxx and
Xxxxxxxx and W-Net, Inc. hold in Whitewing.
ARTICLE V
CONDITIONS TO WHITEWING'S CONSUMMATION OF THE OFFER
---------------------------------------------------
5. Whitewing's obligation to consummate the Offer is subject to the satisfaction
of, or waiver pursuant to Section 8.3 of the following conditions:
5.1 COMPLETION OF FUNDRAISING BY TRS. TRS shall have successfully
raised $600,000 or more in new equity financing.
5.2 95% ACCEPTANCE OF THE OFFER. Prior to the Closing, the shareholders
of TRS shall have validly tendered into the Offer in accordance with the terms
of Section 1.3 hereof, a number of shares of TRS Common Stock that in the
aggregate represents at least ninety five percent (95%) of the total amount of
issued and outstanding TRS Common Stock.
5.3 TENDERING SHAREHOLDERS MUST EXECUTE SHAREHOLDER'S CERTIFICATE. Each
Tendering Shareholder shall have duly and validly executed the Shareholders
Transmittal Forms.
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5.4 ACCURACY OF TRS REPRESENTATIONS AND WARRANTIES. The representations
and warranties of TRS in this Agreement shall be correct in all material
respects when made and at the time of Closing. At Closing, TRS shall deliver to
Whitewing an Officer's Certificate dated the Closing Date, in a form of Exhibit
G hereto, certifying as to (a) the accuracy of the TRS representations contained
herein, (b) the satisfaction of the condition set forth in Section 5.1 hereof,
(c) the satisfaction of the condition set forth in Section 5.2 hereof and (d)
the satisfaction of the condition set forth in Section 5.3 hereof. TRS shall
also deliver at Closing a Secretary's Certificate certifying as to the Board
Resolutions approving the Offer and the transactions contemplated herein and
also as to the incumbency of the TRS officer executing the TRS Officer's
Certificate.
ARTICLE VI
CONDITIONS TO TRS'S CONSUMMATION OF THE OFFER
---------------------------------------------
6. TRS's obligation to consummate the Offer is subject to the satisfaction of,
or waiver pursuant to Section 8.3 of the following conditions:
6.1 ACCURACY OF WHITEWING REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Whitewing in this Agreement shall be correct
in all material respects when made and at the time of Closing. At Closing,
Whitewing shall deliver to TRS an Officer's Certificate dated the Closing Date,
in a form of Exhibit I hereto, certifying as to the accuracy of the Whitewing
representations contained herein. Whitewing shall also deliver at Closing a
Secretary's Certificate substantially in the form of Exhibit J certifying as to
the Board Resolutions approving the Offer and the transactions contemplated
herein and also as to the incumbency of the Whitewing officer executing the
Whitewing Officer's Certificate.
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ARTICLE VII
SURVIVAL; INDEMNIFICATION
-------------------------
7.1 SURVIVAL. All representations, warranties, covenants and agreements
contained in this Agreement, or in any schedule or exhibit hereto, or other
writing delivered pursuant hereto, shall survive the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby, but
no claims for breach thereof may be brought except as provided below in this
Section 7.
7.2 INDEMNIFICATION. Each of Whitewing and TRS (each, an "Indemnifying
Party") agrees to indemnify and hold harmless each of the other parties hereto,
and their respective officers, directors, employees and agents (individually, an
"Indemnified Party" and collectively, the "Indemnified Parties") at all times
against and in respect of all losses, liabilities, obligations, damages,
deficiencies, actions, suits, proceedings, demands, assessments, orders,
judgments, costs and expenses (including the reasonable fees and disbursement of
attorneys, whether incurred in disputes between the parties or in disputes with
third parties, or otherwise) of any kind or nature whatsoever (collectively,
"Losses"), to the extent sustained, suffered or incurred by or made against any
Indemnified Party, to the extent based upon, or arising out of or in connection
with, (i) any breach of any representation or warranty made by the Indemnifying
Party in this Agreement; or (ii) any breach of any covenant or agreement made by
the Indemnifying Party in this Agreement (such claims under clauses (i) and (ii)
being hereinafter collectively referred to as "Indemnifiable Claims").
7.3 NOTICE; DEFENSE OF CLAIMS. Promptly after receipt by an Indemnified
Party of notice of any Indemnifiable Claim, the Indemnified Party shall give
notice thereof in writing the Indemnifying Party, but the omission so to notify
the Indemnifying Party promptly will not relieve the Indemnifying Party from any
13
liability except to the extent that the Indemnifying Party shall have been
prejudiced as a result of the failure or delay in giving such notice. Such
notice shall state the information then available regarding the amount and
nature of such Indemnifiable Claim, and shall specify the provision or
provisions of this Agreement upon which such Indemnifiable Claim is based. If
within thirty (30) days after receiving such notice the Indemnifying Party gives
written notice to the Indemnified Party stating that it disputes and intends to
defend against the Indemnifiable Claim so asserted, at its own cost and expense,
then counsel for the defense shall be selected by the Indemnifying Party
(subject to the consent of the Indemnified Party which consent shall not be
unreasonably withheld) and the Indemnifying Party shall not be required to make
any payment with respect to such Indemnifiable Claim as long as it is conducting
a good faith and diligent defense at its won expense; PROVIDED, HOWEVER, that
the assumption of defense of any such matters by the Indemnifying Party shall
relate solely to the claim, liability or expense that is subject to
indemnification. The Indemnifying Party shall have the right, with the consent
of the Indemnified Party, which consent shall not be unreasonably withheld, to
settle all indemnifiable matters related to claims by third parties which are
susceptible of being settled provided its obligation to indemnify the
Indemnified Party therefor will be fully satisfied. The Indemnifying Party shall
keep the Indemnified Party apprised of the status of the Indemnifiable Claim and
any resulting suit, proceeding or enforcement action and shall furnish the
Indemnified Party with all documents and information that the Indemnified Party
shall reasonably request. Notwithstanding anything herein stated, the
Indemnified Party shall at all times have the right to participate fully in such
defense at its own expense directly or through counsel, provided, however, if
the named parties to the action or proceeding include both the Indemnifying
Party and the Indemnified Party and representation of both parties by the same
counsel would constitute a conflict of interest, the expense of one firm of
14
separate counsel for all Indemnified Parties shall be paid for by the
Indemnifying Party. If no such notice of intent to dispute and defend is given
by the Indemnifying Party, the Indemnified Party shall, at the expense of the
Indemnifying Party, undertake the defense of (with counsel selected by the
Indemnified Party), and shall have the right to compromise or settle (exercising
reasonable business judgment) such Indemnifiable Claim. If such Indemnifiable
Claim is one that by its nature cannot be defended solely by the Indemnifying
Party, then the Indemnified Party shall make available all information and
assistance that the Indemnifying Party may reasonably request and shall
cooperate with the Indemnifying Party in such defense.
ARTICLE VIII
MISCELLANEOUS
-------------
8.1 FURTHER ASSURANCES. Whitewing and TRS shall execute and deliver or
cause to be executed and delivered to one another such further instruments,
documents, and conveyances and shall take such other action as may be reasonably
required to more effectively carry out the terms and provisions of this
Agreement, the Offer and the transactions contemplated hereby.
8.2 AMENDMENT OF AGREEMENT. Whitewing and TRS may at any time amend,
modify, and supplement this Agreement in such manner as may be mutually agreed
upon by them in writing at any time.
8.3 WAIVER. Any of the terms or conditions of this Agreement, except
for the conditions set forth in Sections 5.2 and 5.3 hereof, may be waived at
any time prior to the Closing by the party which is entitled to the benefit
thereof. No waiver on the part of any of the parties hereto of any term,
provision or condition hereof or breach thereof shall constitute a precedent,
nor bind any party hereto to a waiver of any other term, provision or condition
of this Agreement or any other or succeeding breach of the same or any other
term, provision of condition hereof.
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8.4 TERMINATION. This Agreement may be terminated and the Offer
abandoned at any time by (i) Whitewing or TRS, upon notice to the other party,
if the Offer is not completed by April 30, 2002, or (ii) the mutual consent of
Whitewing and TRS.
8.5 NOTICES. Any notices to be given pursuant to this Agreement shall
be in writing and shall be deemed to have been given at the time when mailed by
registered or certified mail, return receipt requested, or by overnight delivery
service requiring signature of the receiving party, or when delivered in person,
or upon receipt of a facsimile transmission, provided that the recipient has
specifically acknowledged by telephone receipt of such facsimile transmission,
addressed to the address below stated of the party to which notice is given, or
to such changed address as such party may have fixed by notice:
IF TO TRS:
---------
Xxxxxx X. Xxxxxxx, General Counsel
Total Recycling Services
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 0000000
IF TO WHITEWING:
Xxxxxx Xxxxxx, Chairman
000 Xxxxxxxx (Xxxxx 000)
Xxx Xxxx, XX 00000
with a copy to:
Xxxxx X. Xxxxxxxx, Esq.
Xxxxxxxxxx & Xxxxxxxx LLC
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
provided, however, that any notice of change of address shall be effective only
upon receipt.
8.6 ASSIGNMENT. This Agreement shall not be assigned by any party
without the consent of each other party. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
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8.7 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be an original, but all of which shall be deemed to be one and
the same instrument. Facsimile versions of signed documents shall be deemed to
be original documents for purpose of the Closing.
8.8 HEADINGS. The headings of this Agreement are for convenience of
reference only and shall not affect in any manner any of the terms and
conditions hereof.
8.9 PUBLICITY. No party shall issue any press release or make any
public statement regarding the transactions contemplated hereby, without the
prior approval of the other parties, which will not be unreasonably withheld;
except that if, after discussion between the parties or their counsel, in the
opinion of any party's counsel, such party is required under any applicable law
or regulation to make a public statement or announcement, such party shall be
permitted to issue the legally required statement or announcement. 8.10
GOVERNING LAW. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to any principles
of conflicts of law.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers on the day and year first
above written.
WHITEWING LABS, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-----------------------------------------
Xxxxxx X. Xxxxx, Xx.
President
TOTAL FILTER RECYCLING, INC.,
D.B.A. TOTAL RECYCLING SERVICES
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-----------------------------------------
Xxxxxx X. Xxxxxx, Xx.
President
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SCHEDULE A
LIST OF DIRECTORS OF WHITEWING FOLLOWING CLOSING
Members of the Board of Directors:
1. Xxxxxx Xxxxxx (Chairman)
2. Xxxxxx Xxxxxx, Jr.
3. Xxxxx Xxxxx
4. Xxxxxx Xxxxx
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LIST OF EXHIBITS
EXHIBIT A SHAREHOLDER'S CERTIFICATE AND ACCREDITED INVESTOR
REPRESENTATIONS
EXHIBIT B STOCK POWER
EXHIBIT C AUDITED FINANCIAL STATEMENTS FOR TRS FOR THE PERIOD ENDED
DECEMBER 31, 2000
EXHIBIT D AUDITED FINANCIAL STATEMENTS FOR TRS FOR THE PERIOD ENDED
DECEMBER 31, 2001
EXHIBIT E REGISTRATION RIGHTS AGREEMENT--Certain TRS Shareholders
EXHIBIT F REGISTRATION RIGHTS AGREEMENT--Certain Whitewing Shareholders
EXHIBIT G TRS OFFICER'S CERTIFICATE
EXHIBIT H TRS SECRETARY'S CERTIFICATE
EXHIBIT I WHITEWING OFFICER'S CERTIFICATE
EXHIBIT J WHITEWING SECRETARY'S CERTIFICATE
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EXHIBIT A
Shareholder's Certificate and Accredited Investor Representation
The purpose of this Certificate is to provide information to Whitewing Labs,
Inc., a Delaware corporation ("Whitewing"), regarding your qualifications to
exchange shares of Common Stock of Total Filter Recycling, Inc. d/b/a Total
Recycling Services, a New Jersey corporation ("TRS") for shares of common stock,
par value $.001 per share of Whitewing (the "Whitewing Common Stock"), pursuant
to an Exchange Offer (the "Offer") on the terms and conditions more fully set
forth in the Exchange Offer Agreement, dated April [ ], 2002 between Whitewing
and TRS (the "Agreement").
The Whitewing Common Stock is being offered in the Offer without registration
under the Securities Act of 1933, as amended (the "Act"), or the securities laws
of any state. Under the Act and/or certain State Laws, Whitewing may be required
to determine that an individual meets certain suitability requirements before
exchanging the Whitewing Common Stock to such individual or entity. Please note
that (i) Whitewing and its counsel will rely upon the information contained
therein for purposes of such determination, and (ii) the Whitewing Common Stock
will not be registered under the Act nor under the securities laws of any state
in reliance upon exemptions from the registration provisions thereof.
Pursuant to Section 1.3 of the Agreement, you must either certify that you are
an "accredited investor" pursuant to Part A hereof, or make the representations
in Part B hereof. If you have any questions concerning this Questionnaire,
please call Xxxxx X. Xxxxxxxx, Esq. at: (000) 000-0000.
Your answers will be kept confidential. However, by signing this Questionnaire,
you agree that Whitewing may present it to such parties as it deems appropriate
if called upon to establish Whitewing's entitlement to an exemption under the
Act or any applicable State Laws.
Part A - If you are an accredited investor - please check the provisions that
apply
I am an accredited investor (as defined in Rule 501(a) of Regulation D
of the rules promulgated under the Act) because (check each appropriate
description):
__________ I am a natural person whose individual net worth, or joint
net worth with my spouse, exceeds $1,000,000.
_________ I am a natural person who had individual income exceeding
$200,000 in each of the two most recent years or joint income with my
spouse exceeding $300,000 in each of those years and I have a
reasonable expectation of reaching the same income level in the current
year.
__________ I am an accredited investor for the following reasons:
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Part B If you are not an accredited investor, and have not completed Part A -
please note that by signing at the bottom of this form you are making the
following representation.
I hereby represent and warrant that:
1. I am not an "underwriter" or "dealer", as such terms are defined in
Sections 2(11) and 2(12) of the Act, respectively; and
2. I shall not receive Whitewing Common Stock pursuant to any "public
offering" as such term is used in Sections 4(2) of the Act.
The foregoing responses are complete and accurate to the best of my knowledge
and belief. I will provide such further information as may be requested by
Whitewing to verify my responses. I will notify Whitewing in writing regarding
any material change in my responses prior to the closing of the Offer. Absent
such notification, the issuance of Whitewing Common Stock in my name shall be
deemed to be an automatic affirmation by me of the truth and accuracy or the
statements and information set forth above.
Dated:
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Name of prospective shareholder
(please type or print)
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Signature of prospective shareholder
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Name of Spouse, Joint Tenant, Tenant in Common, or
other signer (please type or print)
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Signature of Spouse, Joint Tenant, Tenant in Common or
other Signature, if required
EXHIBIT B
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STOCK POWER
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For Value Received, _ __, _______________________ , of __ hereby sell, assign,
and transfer unto WHITEWING LABS, INC., a corporation organized under the laws
of the State of Delaware ("Whitewing") _____________ shares of the Common Stock
with no par value of TOTAL FILTER RECYCLING, INC., D.B.A. TOTAL RECYCLING
SERVICES, a corporation organized under the laws of the State of New Jersey
("TRS") standing in _________________ name on the books of TRS represented by
Certificate(s) No. _________________ herewith, and do hereby irrevocably
constitute and appoint Xxxxxxx Xxxxxx, Secretary of TRS and/or Xxxxxx X.
Xxxxxxx, Vice President and General Counsel of TRS, to transfer the said stock
on the books of TRS with full power of substitution in the premises.
Signed:
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Name Printed:
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Dated: _______________________, 2002
In Presence of:
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NOTICE: The signature(s) to this assignment must correspond with the name as
written upon the face of the certificate, in every particular, without
alteration, or any change whatsoever.
EXHIBITS C & D
WAIVED
EXHIBIT E
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made as of
April 16, 2002 by and between WHITEWING LABS, INC., a corporation organized and
existing under the laws of the State of California (the "Corporation"), and the
undersigned purchasers of the Corporation's Common Stock (the "Investors").
WITNESSETH:
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WHEREAS, immediately prior to the execution of this agreement the
Investors were holders of Common Stock, par value $0.01 per share (the "TRS
Common Stock") of Total Filter Recycling, Inc., d.b.a. Total Recycling Services,
a corporation organized under the laws of the State of New Jersey ("TRS");
WHEREAS, on the date hereof, the Investors have exchanged their shares
of TRS Common Stock for shares of common stock, par value $0.001 per share, of
the Corporation (the "Common Stock"), pursuant to an exchange offer (the
"Offer") under the terms and conditions of an Exchange Offer Agreement dated as
of April 16, 2002 (the "Exchange Offer Agreement");
Whereas, in connection with the Offer and pursuant to the Exchange
Offer Agreement, the Corporation has agreed to grant the Investors certain
rights with respect thereto, which rights are more fully set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and valuable
consideration set forth herein, and intending to be legally bound hereby, the
parties agree as follows:
Section 1. CERTAIN DEFINITIONS
As used in this Agreement, unless the context otherwise requires:
"HOLDER" shall mean any of the Investors owning of record Registrable
Securities that have not been sold to the public.
"REGISTRABLE SECURITIES" shall mean (a) all the shares of Common Stock
issued or issuable upon the conversion of shares of the Common Stock that are
now owned or may hereafter be acquired by any Holder or its permitted successors
and assigns, and any other shares of Common Stock acquired by such Holder; and
(b) any shares of Common Stock of the Corporation issued (or issuable upon
conversion or exercise of any warrant, right or other security which is issued
as) a dividend or other distribution with respect to, or in exchange for or in
replacement of all such shares of Common Stock described in clause (a) of this
definition; excluding in all cases, however, (i) any Registrable Securities sold
pursuant to registration under the Securities Act or (ii) any Registrable
Security sold pursuant to Rule 144 (or similar or successor rule) promulgated
under the Securities Act.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended from
time.
DEMAND REGISTRATION.
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2.1 REGISTRATION OF REGISTRABLE SECURITIES. Within ninety (90)
days after the date hereof, the Corporation shall effect, as soon as
practicable, the registration under the Securities Act of all Registrable
Securities, subject only the limitations of this Section 2.
2.2 REGISTRATION PROCEDURES. Whenever any Registrable
Securities are to be registered pursuant to this Agreement, the Corporation
shall use commercially reasonable efforts to effect the registration of such
Registrable Securities (including the registration of Common Stock held by a
holder of Registrable Securities requesting registration as to which the
Corporation has received reasonable assurances that only Registrable Securities
shall be distributed to the public), and pursuant thereto the Corporation shall
as expeditiously as possible:
(a) Prepare and file with the Securities and Exchange
Commission a registration statement with respect to such Registrable Securities
and use its best efforts to cause such registration statement to become
effective (provided that before filing a registration statement or prospectus or
any amendments or supplements thereto, the Corporation shall furnish to the
counsel selected by the holders of a majority of the Registrable Securities
covered by such registration statement copies of all such documents proposed to
be filed, which documents shall be subject to the review and comment of such
counsel);
(b) Notify each holder of Registrable Securities of the
effectiveness of each registration statement filed hereunder;
(c) Use commercially reasonable efforts to register or qualify
such Registrable Securities under such other securities or blue sky laws of such
jurisdictions as may be necessary to effect registration as any Holder
reasonably requests (provided that the Corporation shall not be required to (a)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subsection, (b) subject itself to
taxation in any such jurisdiction, or (c) consent to general service of process
in any such jurisdiction);
(d) Notify each potential seller of such Registrable
Securities, at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, of the happening of any event as a result of
which the prospectus included in such registration statement contains an untrue
statement of a material fact or omits any fact necessary to make the statements
therein not misleading, and, at the request of any Holder that is a potential
seller of Registrable Securities pursuant to such prospectus, the Corporation
shall prepare a supplement or amendment to such prospectus so that, as
thereafter delivered to the Investors of such Registrable Securities, such
prospectus shall not contain an untrue statement of a material fact or omit to
state any fact necessary to make the statements therein not misleading;
(e) Cause all such Registrable Securities to be listed
alongside other shares of Common Stock on the over the counter bulletin board of
the Nasdaq Stock Market;
(f) Provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement;
(g) If any such registration or comparable statement refers to
any Holder by name or otherwise as the Holder of any securities of the
Corporation and if, in its sole and exclusive judgment, such Holder is or might
be deemed to be an underwriter or a controlling person of the Corporation, such
Holder shall have the right to require (a) the insertion therein of language, in
form and substance satisfactory to such Holder and presented to the Corporation
in writing, to the effect that the holding by such Holder of such securities is
not to be construed as a recommendation by such Holder of the investment quality
of the Corporation's securities covered thereby and that such holding does not
imply that such Holder shall assist in meeting any future financial requirements
of the Corporation, or (b) in the event that such reference to such Holder by
name or otherwise is not required by the Securities Act or any similar federal
statute then in force, the deletion of the reference to such Holder; PROVIDED
that with respect to this clause (b) such Holder shall furnish to the
Corporation an opinion of counsel to such effect, which opinion and counsel
shall be reasonably satisfactory to the Corporation;
(h) In the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any common stock included in such registration statement, the Corporation shall
use its best efforts promptly to obtain the withdrawal of such order;
(i) Use its best efforts to cause such Registrable Securities
covered by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary; and
Notwithstanding the foregoing, the Corporation may postpone the filing of any
registration statement required hereunder for a reasonable period of time, not
to exceed one hundred and twenty (120) days in the aggregate during any
twelve-month period, if the Corporation has been advised by legal counsel that
such filing would require a special audit or the disclosure of material
nonpublic information or a material impending transaction or other matter and
the Corporation's Board of Directors determines reasonably and in good faith
that such disclosure would be inappropriate or inadvisable.
2.3 REGISTRATION EXPENSES. (a) All expenses incident to the
Corporation's performance of or compliance with this SECTION 2, including
without limitation all registration and filing fees, fees and expenses of
compliance with securities or blue sky laws, printing expenses, messenger and
delivery expenses, fees and disbursements of custodians, and fees and
disbursements of counsel for the Corporation and all independent certified
public accountants, underwriters and other Persons retained by the Corporation
(all such expenses being herein called "REGISTRATION EXPENSES"), shall be borne
as provided in this Section, except that the Corporation shall, in any event,
pay its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any regularly scheduled annual audit or quarterly review, the
expense of any liability insurance and the expenses and fees for listing the
securities to be registered on each securities exchange on which similar
securities issued by the Corporation are then listed or on the NASD automated
quotation system.
(b) To the extent Registration Expenses are not required to
be paid by the Corporation, each holder of securities included in any
registration hereunder shall pay those Registration Expenses allocable to the
registration of such holder's securities so included, and any Registration
Expenses not so allocable shall be borne by all sellers of securities included
in such registration in proportion to the aggregate selling price of the
securities to be so registered.
2.4 INDEMNIFICATION. (a) the Corporation agrees to indemnify,
to the extent permitted by law, each holder of Registrable Securities, its
officers and directors and each Person who controls such holder (within the
meaning of the Securities Act) against all losses, claims, damages, liabilities
and expenses caused by any untrue or alleged untrue statement of material fact
contained in any registration statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto, or any omission or alleged omission
of a material fact required to be stated therein, or necessary to make the
statements therein not misleading, except insofar as the same are caused by or
contained in any information furnished in writing to the Corporation by such
holder expressly for use therein, or by such holder's failure to deliver a copy
of the registration statement or prospectus or any amendments or supplements
thereto after the Corporation has furnished such holder with a sufficient number
of copies of the same.
(b) In connection with any registration statement in which a
holder of Registrable Securities is participating, each such holder shall
furnish to the Corporation in writing such information and affidavits as the
Corporation reasonably requests for use in connection with any such registration
statement or prospectus and, to the extent permitted by law, shall indemnify the
Corporation, its directors and officers and each Person who controls the
Corporation (within the meaning of the Securities Act) against any losses,
claims, damages, liabilities and expenses resulting from any untrue or alleged
untrue statement of material fact contained in the registration statement,
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto, or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
only to the extent that such untrue statement or omission is contained in any
information or affidavit so furnished in writing by such holder expressly for
use in such registration statement or prospectus; PROVIDED that the obligation
to indemnify shall be individual, not joint and several, for each holder and
shall be limited to the net amount of proceeds received by such holder from the
sale of Registrable Securities pursuant to such registration statement.
(c) Any Person entitled to indemnification hereunder shall (a)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification (provided that the failure to give prompt
notice shall not impair any Person's right to indemnification hereunder to the
extent such failure has not prejudiced the indemnifying party), and (b) unless
in the written opinion of legal counsel to such indemnified or indemnifying
parties a conflict of interest between such indemnified and indemnifying parties
exists with respect to such claim, permit such indemnifying party to assume the
defense of such claim with counsel reasonably satisfactory to the indemnified
party. If such defense is assumed, the indemnifying party shall not be subject
to any liability for any settlement made by the indemnified party without its
consent (but such consent shall not be unreasonably withheld). An indemnifying
party who is not entitled to, or elects not to, assume the defense of a claim
shall not be obligated to pay the fees and expenses of more than one counsel for
all parties indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim.
(d) The indemnification provided for under this Agreement
shall remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified party or any officer, director or controlling
Person of such indemnified party and shall survive the transfer of securities.
The Corporation also agrees to make such provisions, as are reasonably requested
by any indemnified party, for contribution to such party in the event the
Corporation's indemnification is unavailable for any reason.
2.5 PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No person may
participate in any registration hereunder which is underwritten unless such
person (a) agrees to sell such person's securities on the basis provided in any
underwriting arrangements approved by the person or persons entitled hereunder
to approve such arrangements, and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements; PROVIDED that no
holder of Registrable Securities included in any underwritten registration shall
be required to make any representations or warranties to the Corporation or the
underwriters (other than representations and warranties regarding such holder
and such holder's intended method of distribution) or to undertake any
indemnification obligations to the Corporation or the underwriters with respect
thereto, except as otherwise provided in this SECTION 2.
ENTIRE AGREEMENT. This Agreement sets forth the entire understanding
between the Corporation and the Investors pertaining to its subject matter and
supersedes and replaces all prior oral or written agreements between the
Corporation and the Investors pertaining to such subject matter.
Section 4. AMENDMENTS. The terms of this Agreement may be
amended, and the observance of any term herein may be waived, but only with the
written consent of the Corporation and the Investors.
Section 5. NOTICES GENERALLY. Any notice, request, consent,
other communication or delivery pursuant to the provisions hereof shall be in
writing and shall be sent by one of the following means: (i) by registered or
certified first class mail, postage prepaid, return receipt requested; (ii) by
facsimile transmission with confirmation of receipt; (iii) by overnight courier
service; or (iv) by personal delivery, and shall be properly addressed:
IF TO THE CORPORATION:
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Whitewing Labs Inc.
000 Xxxxxxxx (Xxxxx 000)
Xxx Xxxx, XX 00000
Attn. Xxxxxx Xxxxxx, Chairman
with a copy to:
Xxxxx X. Xxxxxxxx, Esq.
Xxxxxxxxxx & Xxxxxxxx LLC
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
IF TO THE INVESTORS:
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At the last record address of each Investor as appears on the
books of the Corporation.
Section 6. SUCCESSORS AND ASSIGNS. This Agreement shall bind
and inure to the benefit of and be enforceable by the parties hereto and their
respective permitted successors and assigns.
Section 7. GOVERNING LAW. In all respects, including all
matters of construction, validity and performance, this Agreement and the
obligations arising hereunder shall be governed by, and construed and enforced
in accordance with, the laws of the State of New York applicable to contracts
made and performed in such State.
Section 8. COUNTERPARTS. This Agreement may be executed in any
number of counterparts (including by facsimile), each of which when executed and
delivered shall be an original, but which counterparts together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the Effective Date by their respective authorized officers as set
forth below. WHITEWING LABS, INC.
By:
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Name:
Title:
INVESTORS
Per annexed Investor Signature Page
INVESTOR SIGNATURE PAGE
1. ______________________________
2. ______________________________
3. ______________________________
4. ______________________________
5. ______________________________
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31. ______________________________
32. ______________________________
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35. ______________________________
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40. ______________________________
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EXHIBIT F
REGISTRATION RIGHTS AGREEMENT
(Certain Whitewing Shareholders)
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made as of
April 15, 2002 by and between WHITEWING LABS, INC., a corporation organized and
existing under the laws of the State of Delaware(the "Corporation"), and W-NET,
INC., XXXXXX X. XXXXX, XX. and XXXXXXX XXXXXXXX (the "Selling Stockholders").
WITNESSETH:
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WHEREAS, the Selling Stockholders are sellers of Common Stock, par
value $0.001 per share (the "Whitewing Common Stock") of the Corporation; and
WHEREAS, paragraph 6 of the letter of intent between the Corporation
and Total Filter Recycling, Inc. d.b.a Total Recycling Services, a corporation
organized under the laws of the State of New Jersey ("TRS") dated January 31,
2002 provides that the parties enter into this Agreement in connection with the
acquisition of TRS by the Corporation;
NOW, THEREFORE, in consideration of the mutual promises and valuable
consideration set forth herein, and intending to be legally bound hereby, the
parties agree as follows:
Section 1. CERTAIN DEFINITIONS
As used in this Agreement, unless the context otherwise requires:
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended from time.
"SELLING STOCKHOLDER" shall mean any of the Selling Stockholders
owning of record Registerable Securities that have not been sold to the public.
"REGISTERABLE SECURITIES" shall mean shares of Whitewing Common
Stockheld on the date hereof, as follows:
W-Net, Inc.: 3,468,000 shares
Xxxxxx X. Xxxxx, Xx.: 203,500 shares
Xxxxxxx X. Xxxxxxxx: 203,500 Shares
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended from
time.
SECTION 2. DEMAND REGISTRATION.
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2.1 REGISTRATION OF REGISTERABLE SECURITIES. As soon as
practicable, but not more than ninety (90) days after the closing of the
acquisition of TRS by the Corporation, the Corporation shall effect the
registration under the Securities Act and the Exchange Act of all Registerable
Securities, subject only the limitations of this Section 2.
2.2 REGISTRATION PROCEDURES. Whenever any Registerable
Securities are to be registered pursuant to this Agreement, the Corporation
shall use commercially reasonable efforts to effect the registration of such
Registerable Securities, subject to Section 2.1, and the Corporation shall as
expeditiously as possible:
(a) Prepare and file with the Securities and Exchange
Commission a registration statement with respect to such Registerable Securities
and use its best efforts to cause such registration statement to become
effective (provided that before filing a registration statement or prospectus or
any amendments or supplements thereto, the Corporation shall furnish to the
counsel selected by the Selling Stockholders of a majority of the Registerable
Securities covered by such registration statement copies of all such documents
proposed to be filed, which documents shall be subject to the review and comment
of such counsel);
(b) Notify each Selling Stockholder of Registerable Securities
of the effectiveness of each registration statement filed hereunder;
(c) Use commercially reasonable efforts to register or qualify
such Registerable Securities under such other securities or blue sky laws of
such jurisdictions as may be necessary to effect registration as any Selling
Stockholder reasonably requests (provided that the Corporation shall not be
required to(a) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this subsection, (b) subject
itself to taxation in any such jurisdiction, or (c) consent to general service
of process in any such jurisdiction);
(d) Notify each Selling Stockholder who holds unsold
Registerable Securities, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any event
as a result of which the prospectus included in such registration statement
contains an untrue statement of a material fact or omits any fact necessary to
make the statements therein not misleading, and, at the request of any Selling
Stockholder that is a potential seller of Registerable Securities pursuant to
such prospectus, the Corporation shall prepare a supplement or amendment to such
prospectus so that, as thereafter delivered to the Selling Stockholders of such
Registerable Securities, such prospectus shall not contain an untrue statement
of a material fact or omit to state any fact necessary to make the statements
therein not misleading;
(e) Cause all such Registerable Securities to be listed
alongside other shares of Whitewing Common Stock on the over the counter
bulletin board of the Nasdaq Stock Market;
(f) Continuously engage a transfer agent and registrar for all
such Registerable Securities;
(g) If any such registration or comparable statement refers to
any Selling Stockholder by name or otherwise as the Selling Stockholder of any
securities of the Corporation and if, in its sole and exclusive judgment, such
Selling Stockholder is or might be deemed to be an underwriter or a controlling
person of the Corporation, such Selling Stockholder shall have the right to
require (a) the insertion therein of language, in form and substance
satisfactory to such Selling Stockholder and presented to the Corporation in
writing, to the effect that the holding by such Selling Stockholder of such
securities is not to be construed as arecommendation by such Selling Stockholder
of the investment quality of the Corporation's securities covered thereby and
that such holding does not imply that such Selling Stockholder shall assist in
meeting any future financial requirements of the Corporation, or (b) in the
event that such reference to such Selling Stockholder by name or otherwise is
not required by the Securities Act or any similar federal statute then in force,
the deletion of the reference to such Selling Stockholder; PROVIDED that with
respect to this clause (b) such Selling Stockholder shall furnish to the
Corporation an opinion of counsel to such effect, which opinion and counsel
shall be reasonably satisfactory to the Corporation;
(h) In the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any common stock included in such registration statement, the Corporation shall
use its best efforts promptly to obtain the withdrawal of such order;
(i) Use its best efforts to cause such Registerable Securities
covered by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary; and
Notwithstanding the foregoing, the Corporation may postpone the filing of any
registration statement required hereunder for a reasonable period of time, not
to exceed one hundred and twenty (120) days in the aggregate during any
twelve-month period, if the Corporation has been advised by legal counsel that
such filing would require a special audit or the disclosure of material
nonpublic information or a material impending transaction or other matter and
the Corporation's Board of Directors determines reasonably and in good faith
that such disclosure would be harmful to the Corporation's business or prospects
(financial or otherwise).
2.3 REGISTRATION EXPENSES. All expenses incident to the
Corporation's performance of or compliance with this SECTION 2, including
without limitation all registration and filing fees, fees and expenses
ofcompliance with securities or blue sky laws, printing expenses, messenger and
delivery expenses, fees and disbursements of custodians, and fees and
disbursements of counsel for the Corporation and all independent certified
public accountants, underwriters and other Persons retained by the Corporation
(all such expenses being herein called "REGISTRATION EXPENSES"), shall be borne
as provided in this Section, except that the Corporation shall, in any event,
pay its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any regularly scheduled annual audit or quarterly review, the
expense of any liability insurance and the expenses and fees for listing the
securities to be registered on each securities exchange on which similar
securities issued by the Corporation are then listed or on the NASD automated
quotation system.
2.4 INDEMNIFICATION. (a) the Corporation agrees to indemnify,
to the extent permitted by law, each Selling Stockholder of Registerable
Securities against all losses, claims, damages, liabilities and expenses caused
by any untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto, or any omission or alleged omission of a material
fact required to be stated therein, or necessary to make the statements therein
not misleading, except insofar as the same are caused by or contained in any
information furnished in writing to the Corporation by such Selling Stockholder
expressly for use therein, or by such Selling Stockholder's failure to deliver a
copy of the registration statement or prospectus or any amendments or
supplements thereto after the Corporation has furnished such Selling Stockholder
with a sufficient number of copies of the same..
(b) In connection with any registration statement in which a
Selling Stockholder of Registerable Securities is participating, each such
Selling Stockholder shall furnish to the Corporation in writing such information
and affidavits as the Corporation reasonably requests for use in connection with
any such registration statement or prospectus and, to the extent permitted by
law, shall indemnify the Corporation, its directors and officers and each Person
who controls the Corporation (within the meaning of the Securities Act) against
any losses, claims, damages, liabilities and expenses resulting from any untrue
or alleged untrue statement of material fact contained in the registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto, or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but only to the extent that such untrue statement or omission is
contained in any information or affidavit so furnished in writing by such
Selling Stockholder expressly for use in such registration statement or
prospectus; PROVIDED that the obligation to indemnify shall be individual, not
joint and several, for each Selling Stockholder and shall be limited to the net
amount of proceeds received by such Selling Stockholder from the sale of
Registerable Securities pursuant to such registration statement.
(c) Any Person entitled to indemnification hereunder shall (a)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification (provided that the failure to give prompt
notice shall not impair any Person's right to indemnification hereunder to the
extent such failure has not prejudiced the indemnifying party), and (b) unless
in the written opinion of legal counsel to such indemnified or indemnifying
parties a conflict of interest between such indemnified and indemnifying parties
exists with respect to such claim, permit such indemnifying party to assume the
defense of such claim with counsel reasonably satisfactory to the indemnified
party. If such defense is assumed, the indemnifying party shall not be subject
to any liability for any settlement made by the indemnified party without its
consent (but such consent shall not be unreasonably withheld). An indemnifying
party who is not entitled to, or elects not to, assume the defense of a claim
shall not be obligated to pay the fees and expenses of more than one counsel for
all parties indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim.
(d) The indemnification provided for under this Agreement
shall remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified party or any officer, director or controlling
Person of such indemnified party and shall survive the transfer of securities.
The Corporation also agrees to make such provisions, as are reasonably requested
by any indemnified party, for contribution to such party in the event the
Corporation's indemnification is unavailable for any reason.
Section 2.5. CONSEQUENCES OF FAILURE TO REGISTER. In the event
the Corporation willfully fails to fails to satisfy the requirement of Section
2.2(a) within the time period provided, and said default continues for ten (10)
business days following notice to cure, the Corporation shall promptly issue to
each of the Selling Stockholders such number of additional shares of the
Corporation's common stock as is determined by multiplying the number of
Registerable Shares owned by such Selling Stockholder by twenty-five percent,
which shares shall be added to and become Registerable Securities which the
Corporation, without being relieved of its obligations under this Section 2,
shall be required to include in the registration statement required hereby. Each
such subsequent failure to satisfy the requirements of Section 2.2(a), as
determined in consecutive periods of ninety (90) days shall reinvoke the
provisions of this Section 2.5, which shall be applied anew.
Section 3. ENTIRE AGREEMENT.This Agreement sets forth the
entire understanding between understanding between the Corporation and the
Selling Stockholders pertaining to its subject matter and supersedes and
replaces all prior oral or written agreements between the Corporation and the
Selling Stockholders pertaining to such subject matter.
Section 4. AMENDMENTS. The terms of this Agreement may be
amended, and the observance of any term herein may be waived, but only with the
written consent of the Corporation and the Selling Stockholders.
Section 5. NOTICES GENERALLY. Any notice, request, consent,
other communication or delivery pursuant to the provisions hereof shall be in
writing and shall be sent by one of the following means: (i) by registered or
certified first class mail, postage prepaid, return receipt requested; (ii) by
facsimile transmission with confirmation of receipt; (iii) by overnight courier
service; or (iv) by personal delivery, and shall be properly addressed:
IF TO THE CORPORATION:
---------------------
Whitewing Labs Inc.
000 Xxxxxxxx (Xxxxx 000)
Xxx Xxxx, XX 00000
Attn. Xxxxxx Xxxxxx, Chairman
with a copy to:
Xxxxx X. Xxxxxxxx, Esq.
Xxxxxxxxxx & Xxxxxxxx LLC
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
IF TO THE SELLING STOCKHOLDERS:
------------------------------
At the last record address of each Investor as appears on the
books of the Corporation.
SECTION 6. SUCCESSORS AND ASSIGNS. THIS AGREEMENT SHALL BIND
AND INURE TO THE BENEFIT OF AND BE ENFORCEABLE BY THE PARTIES HERETO AND THEIR
RESPECTIVE PERMITTED SUCCESSORS AND ASSIGNS.
SECTION 7. GOVERNING LAW. IN ALL RESPECTS, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE
OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND PERFORMED IN SUCH STATE.
Section 8. COUNTERPARTS. This Agreement may be executed in any
number of counterparts (including by facsimile), each of which when executed and
delivered shall be an original, but which counterparts together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the Effective Date by their respective authorized officers as set
forth below. WHITEWING LABS, INC.
By:
-----------------------------------
Name:
Title:
SELLING STOCKHOLDERS
W-NET, INC.
By:
---------------------------
Xxxxx Xxxxxx, Pres.
---------------------------
XXXXXX X. XXXXX, XX.
---------------------------
XXXXXXX XXXXXXXX
EXHIBIT G
TOTAL FILTER RECYCLING, INC
OFFICER'S CERTIFICATE
I, Xxxxxx X. Xxxxxx, Xx., being the duly elected and acting President of TOTAL
FILTER RECYCLING, INC. D.B.A. TOTAL RECYCLING SERVICES, a corporation organized
under the laws of the State of New Jersey ("TRS"), hereby certify pursuant to
Section 5.4 of the Exchange Offer Agreement dated April ____, 2002 between
WHITEWING LABS, INC., a corporation organized under the laws of the State of
Delaware ("Whitewing") and TRS (the "Agreement") as follows:
1. The representations and warranties of TRS set forth at Article II of
the Agreement were true and correct in all material respects on the
date of the Agreement and are true and correct in all material respects
on the date hereof;
2. TRS has successfully completed a funding round of new equity financing
in the amount of $600,000 or more;
3. Shares representing at least 95% of the total amount of issued and
outstanding TRS Common Stock have been duly and validly tendered into
the Offer by TRS Shareholders prior to the Expiration Date in
accordance with the terms of the Offer; and
4. Each Tendering Shareholder has duly and validly executed the
Shareholder Transmittal Forms.
Capitalized terms used herein shall have the same meaning ascribed to them in
the Agreement unless otherwise defined herein
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of April, 2002.
TOTAL FILTER RECYCLING, INC.
By: ___________________________
XXXXXX X. XXXXXX, XX.
President
EXHIBIT H
TOTAL FILTER RECYCLING, INC.
SECRETARY'S CERTIFICATE
I, Xxxxxxx Xxxxxx, hereby certify pursuant to Section 5.4 of the Exchange Offer
Agreement, dated April ___, 2002 (the "Agreement") between TOTAL FILTER
RECYCLING, INC. D.B.A. TOTAL RECYCLING SERVICES, a corporation organized under
the laws of the State of New Jersey ("TRS") and WHITEWING LABS, INC., a
corporation organized under the laws of the State of Delaware, that I am the
duly elected, qualified and acting Secretary of TRS, and that as such, I am
authorized to execute and deliver this certificate in the name and on behalf of
TRS and further certify on behalf of TRS as follows:
1. Attached hereto as Schedule A is a true and correct copy of the
resolutions adopted by the Board of Directors of TRS on April ___,
2002 and such resolutions have not been amended, rescinded, or
modified and are in full force and effect as of the date hereof,
and constitute all of the resolutions adopted by the Board of
Directors of TRS or any committee thereof concerning the
transactions contemplated by the Agreement.
2. Xxxxxx X. Xxxxxx, has been at all times since January 1, 2002 a
duly elected officer of TRS and the signature of such person
appearing opposite his name below is his genuine signature:
NAME: POSITION: SIGNATURE:
----- --------- ----------
Xxxxxx X. Xxxxxx, Xx. President __________________________
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of April, 2002.
TOTAL FILTER RECYCLING, INC.
By: ___________________________
XXXXXXX XXXXXX
Secretary
EXHIBIT I
WHITEWING LABS, INC.
OFFICER'S CERTIFICATE
I, Xxxxxx X. Xxxxx, Xx., being the duly elected and acting President of
WHITEWING LABS, INC., a corporation organized under the laws of the State of
Delaware ("Whitewing"), hereby certify pursuant to Section 6.1 of the Exchange
Offer Agreement, dated April ___, 2002 between TOTAL FILTER RECYCLING, INC.
D.B.A. TOTAL RECYCLING SERVICES, a corporation organized under the laws of the
State of New Jersey ("TRS") and Whitewing (the "Agreement"), as follows:
1. The representations and warranties of Whitewing set forth in Article
III of the Agreement were true and correct in all material respects on
the date of the Agreement and are true and correct in all material
respects on the date hereof.
Capitalized terms used herein shall have the same meaning ascribed to them in
the Agreement unless otherwise defined herein
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of April, 2002.
WHITEWING LABS, INC.
By: ___________________________
XXXXXX X. XXXXX, XX.
President
EXHIBIT J
WHITEWING LABS, INC.
SECRETARY'S CERTIFICATE
I, Xxxxx Xxxxxxxxxx, hereby certify pursuant to Section 6.1 of the Exchange
Offer Agreement dated as of April ,2002 (the "Agreement") between WHITEWING
LABS, INC., a corporation organized under the laws of the State of Delaware
("Whitewing") and TOTAL FILTER RECYCLING, INC. D.B.A. TOTAL RECYCLING SERVICES,
a corporation organized under the laws of the State of New Jersey, that I am the
duly elected, qualified and acting Secretary of Whitewing, and that as such, I
am authorized to execute and deliver this certificate in the name and on behalf
of Whitewing and further certify on behalf of Whitewing as follows:
3. Attached hereto as Schedule A is a true and correct copy of the
resolutions adopted by the Board of Directors of Whitewing on April
___, 2002 and such resolutions have not been amended, rescinded, or
modified and are in full force and effect as of the date hereof, and
constitute all of the resolutions adopted by the Board of Directors of
Whitewing or any committee thereof concerning the transactions
contemplated by the Agreement.
4. Xxxxxx X. Xxxxx, Xx., has been at all times since January 1, 2002 a
duly elected officer of Whitewing and the signature of such person
appearing opposite his name below is his genuine signature:
NAME: POSITION: SIGNATURE
----- --------- ---------
Xxxxxx X. Xxxxx, Xx. President _____________________
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of April, 2002.
WHITEWING LABS, INC.
By: ___________________________
XXXXX XXXXXXXXXX
Acting Secretary
