Exhibit 99.1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (hereinafter the "Agreement") is made
this 26th day of February, 2003, by and between Xxxxxxxx Xxxxx 00 Xxxx Xxxxx
Xxxx Xxxxxxxx, XX 00000 hereinafter referred to as "Perry" and Xxxxx Dancer 00
Xxxxxxx Xxxx Xxxxxxxxx, XX 00000 hereinafter referred to as "Dancer"
hereinafter together referred to as "Seller"
and
Whitewing Environmental Corp.
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
hereinafter referred to as "Buyer"
W I T N E S S E T H:
WHEREAS, the Seller is the registered and beneficial owner of one
hundred (100) shares of the stock (hereinafter the "Stock") of Advanced Recovery
Solutions, Inc., a Delaware Corporation (hereinafter the "Corporation")
constituting fifty (50%) percent of all the issued and outstanding capital stock
of the Corporation; and
WHEREAS, the Buyer is the registered and beneficial owner of one
hundred (100) shares of the stock of Advanced Recovery Solutions, Inc., a
Delaware Corporation (hereinafter the "Corporation") constituting the remaining
fifty (50%) percent of all the issued and outstanding capital stock of the
Corporation; and
WHEREAS, the Buyer desires to purchase from Seller, and the Seller
desires to sell to Buyer, the Stock for an aggregate purchase price defined
below payable in the manner provided herein, subject to, and in accordance with
the terms and conditions of this Agreement, resulting in the Buyer holding 100%
of the issued and outstanding capital stock of the Corporation; and
WHEREAS Seller, Buyer, and the Corporation are parties to a
Shareholders' Agreement, dated September 19, 2001 (the "Agreement Date"),
governing the stock of the Corporation (the "Shareholders Agreement");
WHEREAS the Shareholders Agreement provides that, during the period
commencing 18 months from the Agreement Date until September 19, 2004, Perry may
demand that Buyer purchase his shares in the Corporation, and that, if Perry
does not make such demand, then Buyer shall purchase Perry's shares in the
Corporation on or about September 19, 2004;
WHEREAS the Shareholders Agreement further provides that, at any time
after the period commencing 18 months from the Agreement Date, Dancer may demand
that Buyer purchase her shares in the Corporation;
WHEREAS the Shareholders Agreement further provides that: (i) the
purchase price for Perry's and Dancer's shares in the Corporation would be "the
agreed value per share, on the valuation date, multiplied by the number of
shares to be purchased;" (ii) "[t]he agreed value per share shall be the value
of the Corporation divided by the number of shares issued and outstanding;" and
(iii) "[t]he value of the Corporation shall be determined by applying a multiple
of 4 times the corporate earnings before interest, taxes, depreciation and
amortization (EBITDA) on the valuation date" as that term is defined in the
Shareholders Agreement;
WHEREAS the parties intend that the purchase price under this Agreement
shall, at a minimum, equal the value of the purchase price that would have been
paid to Perry and Dancer under the Shareholders Agreement;
WHEREAS the parties understand that the component of the purchase price
under this Agreement consisting of 2,000,000 shares of Whitewing common stock is
based on the parties' expectation that the shares of Whitewing will appreciate
significantly due to the capital that Whitewing intends to inject into the
Corporation following the execution of this Agreement;
NOW THEREFORE, in consideration of the facts recited hereinabove and
the mutual promises and covenants set forth herein, and desiring to be legally
bound hereby, the parties hereto agree as follows:
1. PURCHASE AND SALE OF STOCK.
Buyer hereby purchases from the Seller and the Seller hereby sells to the Buyer
of one hundred (100) shares of the stock of the Corporation subject to the terms
and conditions as provided in this Agreement. The date on which the stock is
transferred shall sometimes be referred to hereinafter as the "Closing Date."
2. PURCHASE PRICE & Payment.
The Purchase Price for the Stock is payable by the Buyer to the Seller on the
Closing Date as follows:
2.1. At closing, Two Million (2,000,000) Shares of the Common Stock of
Whitewing Environmental Corp.
2.2. $250,000.00 cash payable as follows:
2.2.1. Cash at closing in the amount of fifty thousand
($50,000.00) dollars;
2.2.2. Buyer shall execute and deliver to the Seller a
promissory note in the form attached hereto as Exhibit A (the "Note and
Security Agreement") in the principal amount of $173,121.56 bearing the
following terms:
a. 36 months with monthly payments of $5,555.56
b. 7.5% interest.
c. Payments commence on a certain date 6 months after
closing.
d. 5% late payment penalty for payments made more than
15 days from their due date. e. 2% per month interest
on payments over 30 days overdue.
f. Security in the form of 100 shares of ARS. Security
provisions shall provide that for every two thousand
five hundred ($2,500.00) dollars in payments, one (1)
shares of stock shall be released from escrow to the
Buyer. Upon the delivery of the final payment, all
shares shall be released to the Buyer. Upon default
that is not cured within the time frames set forth in
the Note, the shares then remaining in escrow shall
be released to the Seller.
2.3. Allocation of the Purchase Price. The purchase price shall be
allocated as follows:
Xxxxxxxx Xxxxx - 56%
Xxxxx Dancer - 20%
Xxxxxx XxXxxxxx - 16%
Xxxxx Xxxxxxxxx - 8%
3. EFFECT ON SHAREHOLDER'S AGREEMENT - CORPORATE GOVERNANCE.
3.1. At closing, Seller will deliver a written consent to the
termination of the existing Shareholder's Agreement.
3.2. The Parties will execute a Director's consent to amend Article IV,
Section 1 of the Corporation's By-Laws to provide for a board of up to 5
individuals.
3.3. Perry and Dancer shall each have the right to name one member of
the board. At the end of their respective employment terms, such right will
terminate.
4. CONDITIONS TO SELLER'S CONSUMMATION OF THE SALE.
Seller's obligation to consummate the sale is subject to the satisfaction of, or
waiver pursuant to Section 11.8 below, of the following conditions:
4.1. Injection of $200,000.00 of working capital into the Corporation
by Buyer within 30 days of signing of this Agreement. Buyer to be credited for
amounts injected after the execution of the Letter of Intent dated January 17,
2002;
4.2. Agreement to hire sales assistant immediately;
4.3. Execution of a mutually acceptable Employment Contract for
Xxxxxxxx Xxxxx for a term of three years;
4.4. Execution of a mutually acceptable Employment Contract for Xxxxx
Dancer for a term of three years;
4.5. Agreement on the form of documents to affect the transaction
including, but not limited to, stock transfer documents and promissory notes.
4.6. At closing, the delivery by the Company to Xxxxxxxx Xxxxx, in his
capacity as President of Cellutech, Inc., of the following:
4.6.1. full and final payment for equipment purchase
(approximately $28,000.00)
4.6.2. full and final payment for inventory (approximately
$31,000.00)
5. EFFECT OF SATISFACTION OF PRE-CLOSING CONDITIONS.
Upon acceptance of the items set forth in the pre-closing conditions described
in section 4 above, all prior defaults of any agreements between the parties by
Buyer shall be deemed cured and any remedies or choses in action accruing to
Seller shall be deemed waived. This cure of default and waiver of remedies shall
not constitute a precedent, nor bind the Seller to a waiver of any other term,
provision or condition of this or any other agreement or any other succeeding
breach of the same or any other term, provision or condition hereof.
6. REPRESENTATIONS AND WARRANTIES OF BUYER.
In connection with the transaction contemplated by this Agreement, Buyer makes
the following representations and warranties, which shall be true and correct as
of the date hereof, except as affected by any transactions contemplated by this
Agreement:
6.1. Authorization. The Buyer is a Delaware Corporation with full power
and authority, as reflected in appropriate resolutions of its board of
directors, to carry out the transactions contemplated by this Agreement.
6.2. Binding Obligation. This Agreement constitutes a legal, valid, and
binding obligation of the Buyer, enforceable in accordance with its terms and
conditions, except as such enforceability may be limited by laws of bankruptcy,
or reorganization, moratorium or other similar laws affecting creditors' rights
generally.
6.3. Purchase of Stock Not for Resale Purposes. Buyer is not purchasing
the stock with a view to, or for resale in connection with, any distribution of
securities, and Buyer has no intention of selling, assigning, pledging, giving,
transferring or otherwise disposing of any of the Stock.
7. REPRESENTATIONS AND WARRANTIES OF SELLER.
In connection with the transactions contemplated by this Agreement, Seller makes
the following representations and warranties, which shall be true and correct as
of the date hereof:
7.1. Authorization. The Sellers are individual persons over the age of
eighteen (18) years with full power and authority to carry out the transactions
contemplated by this Agreement.
7.2. Authorized and Issued Shares. Seller owns one hundred (100) shares
of common stock of the Corporation. Said one hundred (100) shares have been
validly issued to Seller, without violation of any preemptive rights, and
presently outstanding and are fully paid and non-assessable, and are owned of
record and beneficially by the Seller.
7.3. Title to Shares. The Seller has legal title to, beneficial
ownership of, and full power and authority to sell to Buyer the Stock as
contemplated by this Agreement, free and clear of all liens, encumbrances,
restrictions, equities charges, claims, defects of title, options or other
purchase rights.
7.4. Liabilities. As of the date hereof, the Seller has disclosed to
Buyer all material liabilities of any nature whatsoever, whether fixed or
contingent, of the Corporation.
7.5. Litigation. The Corporation is not a party to any suit or any
administrative, arbitration or other legal action or proceeding; and the Seller
has no knowledge or belief nor any information which would give rise to a
belief, that any litigation or other legal action, notice of violation or other
proceeding is threatened against the Corporation or its business, properties,
and assets.
7.6. Loss of Customers/Material Adverse Change in Business. The Seller
has received no notice or information from customers, suppliers or other persons
that the Corporation will lose any customers after the Closing Date (as defined
in Section 10.1 below).
7.7. Tax Notices. The Corporation has not received any notices from the
Internal Revenue Service or the Delaware Division of Taxation that states or
implies that the Corporation has in any way violated a statute, rule or
regulation of either entity. The Seller has no knowledge or belief nor any
information which would give rise to a belief that a violation is threatened
against the Corporation.
7.8. All Information Accurate. All of the ledgers, notes, minutes, tax
returns, records and other documents pertaining to the Corporation have been
delivered to Buyer by Seller. Seller represents that to the best of seller's
knowledge all said information accurately and fairly reflects the financial
condition and general status of the Corporation in all material respects.
7.9. No Stock Options. There are no outstanding stock options, stock
warrants, stock rights or agreements of any nature which would actually or
potentially permit the Seller or any other person to acquire any issued or
un-issued shares of Stock of the Corporation.
7.10. Tax Returns Filed. All of the tax returns which were required to
be filed on behalf of the Corporation, including, but not limited to, year end
tax returns, quarterly tax, estimated income tax returns, sales tax returns, and
federal and state payroll tax returns were in fact filed by the Corporation in a
manner satisfactory to the Internal Revenue Service and the New Jersey Division
of Taxation and all taxes due thereon where paid in full.
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties set forth in Section 6 above and Section 7
above shall survive the occurrence of the Closing for a period of two (2) years.
9. THE BUYER'S SET-OFF.
In the event that the Buyer should incur any liabilities, deficiencies, costs,
expenses, damages or losses, including without limitation reasonable attorney's
fees as a result of (i) any breach of the representations and warranties
contained in Section 7 above, or (ii) any default by the Seller in the
performance of any of the covenants and/or agreements made by the Seller herein,
such liabilities, deficiencies, costs, expenses, damages or losses (hereinafter
referred to as "Liabilities"), Buyer shall have the right to set-off, recoup,
and recover such Liabilities (such set-off, recoupment, and recovery hereinafter
referred to as the "Buyer's Set-Off"), pro rata and in equal amounts, from and
against the next succeeding payments due pursuant to the Note, such payments
being reduced, dollar-for-dollar, by the amount of the Buyers Set-Off shall be
credited dollar-for-dollar in Seller's favor against Seller's obligations to
indemnify and hold harmless.
10. CLOSING.
10.1. Time and Place of Closing. Closing with respect to this
transaction shall be held at the offices of Buyer, 000 Xxxxx Xxxxxx, Xxxxxxxxxx,
Xxx Xxxxxx, at 2:00 P.M. on the 26th day of February, 2003 (the "Closing Date").
10.2. Effect of Closing on Shareholders Agreement. As of the date of
closing, any shareholders agreement then in existence by and between the Sellers
shall be cancelled by the parties and shall thereafter be of no further force or
effect with respect to the parties.
10.3. Items to be Delivered at Closing.
10.3.1. Buyer will deliver to Seller the following:
a. Letter of instruction to Whitewing's transfer agent
authorizing issuance of shares pursuant to paragraph
2.1 above
b. Payment pursuant to the terms of paragraph 2.2 above;
c. Promissory Note pursuant to the terms of paragraph
2.2.2 above;
d. Appropriate form of indemnification and hold harmless
agreement with respect to any personal guarantees
made on behalf of Advanced Recovery Solutions by
Sellers, in the form attached hereto as Exhibit C
("Indemnification Agreement").
e. Employment Contract for Xxxxxxxx Xxxxx in the form
attached hereto as Exhibit D ("Perry Employment
Agreement").
f. Employment Contract for Xxxxx Dancer in the form
attached hereto as Exhibit E ("Dancer Employment
Agreement").
10.3.2. Seller will deliver to Buyer the following:
a. Endorsed share certificates from the Sellers granting
Xxxxxx X. Xxxxxxx, Buyer's agent and attorney, power
of attorney to transfer shares to Buyer on the books
of the Corporations;
b. Appropriate indemnifications from Seller regarding
claims, liabilities, and litigation;
c. Executed Agreement effecting termination of
Shareholder's Agreement.
d. Executed director's consent to amend Article IV,
Section 1 of the Corporation's By-Laws to provide for
a board of up to 5 individuals.
11. GENERAL PROVISIONS.
11.1. Headings. The headings of this Agreement are for convenient
reference only and shall not affect in any manner any of the terms and
conditions hereof.
11.2. Governing Law. This Agreement shall be deemed to be made in the
State of New Jersey and shall be governed and construed in accordance with the
laws of the State of New Jersey.
11.3. Notices. All notices and/or communications required or permitted
under this Agreement shall be in writing and shall be deemed to have been duly
given at the time when mailed by registered or certified mail, return receipt
requested, or by overnight delivery services requiring signature of the
receiving party, or when delivered in person, or upon a receipt of a facsimile
transmission (provided that the recipient specifically acknowledged receipt of
such facsimile by return 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.
11.3.1. If to TRS:
Xxxxxx X. Xxxxxxx, Esq.
Whitewing Environmental Corp.
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
11.3.2. If to Perry:
Xxxxxxxx Xxxxx
Complete Spill Solutions
000 Xxxxxxxxxx Xxxxxx, Xxxx 0
Xxxxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
11.3.3. If to Dancer:
Xxxxx Dancer
Complete Spill Solutions
000 Xxxxxxxxxx Xxxxxx, Xxxx 0
Xxxxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
11.4. 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.
11.5. Entire Agreement. This Agreement contains the entire Agreement of
the parties hereto with respect to the transaction contemplated herein and
supersedes all other written or oral provisions, negotiations, commitments and
understandings.
11.6. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, successors and
assigns, provided that neither the benefits nor obligations may be assigned
without the express written consent of the other party.
11.7. Amendment/Modification. This Agreement may be amended, modified,
or supplemented only by an agreement in writing signed by all of the parties.
11.8. Waiver. Any of the terms or conditions of this Agreement may be
waived at any time prior to the Closing by the party that is entitled to the
benefit thereof. No waiver on the party 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 succeeding breach of the same or any
other term, provision or condition hereof.
11.9. Further Assurances. Each of the parties shall, from time to time,
at the reasonable request of the other party or of said party's representative,
execute, acknowledge or deliver in proper form, and document, instrument,
agreement or other writing necessary to perfect the consummation of the
Agreement in accordance with the terms herein. All costs in connection with the
aforementioned shall be borne by the party requesting the execution,
acknowledgement or delivery of the document, instrument, agreement or other
writing.
11.10. Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and
such instrument, for convenience and recital purposes, shall be deemed to have
been made, executed and delivered as of the date first above written,
irrespective of the time or times when the same or any counterparts hereof may
be made, executed and delivered. Facsimile versions of signed documents shall be
deemed to be original documents for the purpose of closing.
11.11. Severable. It is the intention of the parties that the
provisions of this Agreement shall be enforced to the fullest extent permissible
under the laws and public policies of each jurisdiction in which such
enforcement is sought, but that the unenforceability (or the modification to
conform with such laws or public policies) of any provisions hereof, shall not
render unenforceable or impair the remainder of this Agreement. Accordingly, if
any provision of this Agreement shall be determined to be invalid or
unenforceable, either in whole or in part, this Agreement shall be deemed
amended to delete or modify, as necessary, the offending provision and to alter
the balance of this Agreement in order to render the same valid and enforceable
to the fullest extent permissible.
11.12. Professional Expenses. All expenses for legal and other
professional services rendered for the benefit of the seller in connection with
the transactions contemplated in the Agreement shall be paid by the Seller. All
expenses for legal and other professional services to Buyer in connection with
the transactions contemplated in the Agreement shall be paid by Buyer.
IN WITNESS WHEREOF, Buyer and Seller have duly executed this Agreement
as of the day and year first above written.
WITNESS:
Whitewing Environmental Corp.
/s/ Xxxxxx Xxxxx By: /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxx, Secretary Xxxxxx Xxxxxx, Chairman
/s/ Xxxxxxxx Xxxxx
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Xxxxxxxx Xxxxx
/s/ Xxxxx Dancer
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Xxxxx Dancer
