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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Pursuant to Sections 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 29, 1999
WHITNEY AMERICAN CORPORATION
(Exact name of registrant as specified in charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
0-22907 54-1956957
(Commission File Number) (I.R.S. Employer Identification Number)
8150 Leesburg Pike, Suite 1200, Vienna, Virginia 22182
(Address of Principal Executive Offices and Zip Code)
(703) 893-4106
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
Whitney American Corporation, a Delaware corporation ("Company"), entered
into and consummated the following Stock Exchange Agreements (collectively, the
"Exchange Agreements") dated March 6, 1998, among the Company and:
Kemron Environmental Services, Inc., a New York corporation ("Kemron"), and
its shareholders ("Kemron Exchange Agreement"), pursuant to which 3,500,000
shares of the Company (the "Kemron Exchange Shares") were issued to the
Kemron shareholders (the "Kemron Holders") to acquire Kemron, which
acquisition is referred to below as the "Kemron Exchange";
Coastline International, Inc., a Delaware corporation ("Coastline"), and its
shareholders ("Coastline Exchange Agreement"), pursuant to which 1,750,000
shares of the Company were issued to the Coastline shareholders in order to
acquire Coastline;
New Horizons, Inc., a Delaware corporation ("New Horizons"), and its
shareholders ("New Horizons Exchange Agreement"), pursuant to which
1,750,000 shares of the Company were issued to the New Horizons shareholders
in order to acquire New Horizons; and
Exeter Group, Inc., a Florida corporation ("Exeter"), and its shareholders
("Exeter Exchange Agreement"), pursuant to which 1,000,000 shares of the
Company were issued to the Exeter shareholders in order to acquire Exeter.
These transactions are sometimes collectively referred to below in this
report as the "Exchange." Of the four companies acquired, only Kemron had
significant assets and revenues. In connection with the Exchange, the Company
underwent a change of control. Subsequent to the Exchange, the Exeter, Coastline
and New Horizons Exchange Agreements all have been cancelled, and all but
190,973 of the 4,500,000 common shares of the Company issued to acquire those
three companies have been cancelled and returned to treasury.
UNWINDING and STOCK EXCHANGE AGREEMENT
The Company, Kemron and the Kemron Holders have entered into an Unwinding
and Stock Exchange Agreement dated November 29, 1999 (the "Unwinding
Agreement"), which provides for the unwinding and rescission of the Kemron
Exchange. The Unwinding Agreement will be consummated as soon as possible after
it is approved by the Company's shareholders at a special meeting called for
that purpose. Effective upon the consummation of the Unwinding Agreement, the
Kemron Exchange Agreement will be cancelled and the following things will be
done and occur:
(1) The 3,500,000 Kemron Exchange Shares will be surrendered by the Kemron
Holders to the Company for cancellation and returned to the status of
authorized but unissued shares;
(2) Ownership of the 315 shares of Kemron common stock will be returned to
the Kemron Holders;
(3) The Company will issue to Kemron 100,000 shares of its common stock in
settlement of certain sums expended by Kemron to date on the Company's
behalf;
(4) Kemron will deliver a general release of the Company;
(5) The Company will deliver a general release of Kemron;
(6) Kemron will deliver to the Company a written release of all liability
to Peoples Bank under a guarantee of the loan to the Gutierrez
Properties Limited Partnership;
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(7) The originals of the stock options granted by the Company to Juan J.
Gutierrez, John Dwyer and David Vandenberg will be cancelled;
(8) Juan J. Gutierrez, John S. Heishman, John M. Dwyer and David Vandenberg
will resign as officers and directors of the Company; and
(9) The number of members of the Company's board of directors will be
reduced from four to one, and Stephen M. Siedow will become the sole
director of the Company;
The Unwinding Agreement will constitute an unwinding and rescission of the
Exchange Agreement, not a repurchase of the Kemron Exchange Shares by the
Company. The unwinding of the Kemron Exchange and the issuance of the 100,000
settlement shares to Kemron will reduce the number of outstanding common shares
of the Company from the current 4,217,020 shares to 817,020 shares. Kemron and
the Kemron Holders entered into the Exchange for the purpose of becoming
publicly held, in the expectation that being public would make it easier to
raise funds and perhaps make it possible to acquire other companies and grow
assets and revenues through such further acquisitions. However, these supposed
advantages of being public have turned out to be illusory, and the Kemron
Holders no longer desire for Kemron to be part of a public company.
Following the unwinding of the Kemron Exchange, the Company will have no
revenues or significant assets, nor will the Company have any debts other than
the $105,000 owed to Stephen Siedow, a former officer and director of the
Company, and John Brasher, former Company counsel, in both cases for services
rendered and costs advanced to or on behalf of the Company. The Company will
then not have any business other than attempting to acquire another operating
company with assets and revenues.
STATUS OF SETTLEMENT SHARES. The 100,000 settlement shares to be issued at
closing to Kemron have not been and will not be registered under the Securities
Act of 1933 (the "Act") in reliance upon exemptions from registration provided
by Section 4(2) of the Act and under the securities laws of the State of
Virginia or any rules or regulations promulgated thereunder, on the grounds that
the offer, sale and issuance of the settlement shares is a transaction not
involving any public offering. The settlement shares will be restricted
securities as that term is defined in Rule 144 (a) of the General Rules and
Regulations under the Act and must be held indefinitely, unless they are
subsequently registered under the Act or an exemption from such registration
requirements is available for their resale. Every certificate evidencing the
settlement shares will, unless and until removed in accordance with law, bear a
customary form of investment legend which restricts transfer of the shares
except pursuant to registration under the Act or pursuant to an available
exemption from the Act's registration requirements.
SHAREHOLDER APPROVAL REQUIRED. Because Kemron amounts to all or
substantially all of the assets of the Company, the unwinding of the Kemron
Exchange may constitute a "bulk sale" under Section 271 of the Delaware General
Corporation Law, which would require the prior approval of the Company's
shareholders to be sought at a special meeting of the Company's shareholders
anticipated to be held on January 20, 2000, for that purpose. The Kemron
Holders, who in the aggregate hold 3,500,000 of the 4,217,020 common shares of
the Company issued and outstanding, are expected to vote in favor of the
Unwinding Agreement, which would of course assure its approval.
INDEMNITY OBLIGATIONS. In the Unwinding Agreement, Kemron and the Kemron
Holders each agree to defend, indemnify and hold the Company harmless from and
against any and all losses, liabilities, damages, costs or expenses (including
reasonable attorney's fees, penalties and interest) arising from or incurred as
a result of (i) any false statement, representation or warranty made by Kemron
or the Kemron Holders in the Unwinding Agreement, or (ii) the breach of any
agreement or covenant made by Kemron or a Kemron Holder in the Unwinding
Agreement, or (iii) the Peoples Bank loan to Gutierrez Properties Limited
Partnership, which was guaranteed by the Company.
Under the terms of the Unwinding Agreement, the Company agrees to defend,
indemnify and hold Kemron and the Kemron Holders harmless from and against any
and all losses, liabilities, damages, costs or expenses (including reasonable
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attorney's fees, penalties and interest) arising from or incurred as a result of
(i) any false statement, representation or warranty made by the Company in the
Unwinding Agreement, or (ii) the breach of any agreement or covenant made by the
Company in the Unwinding Agreement; provided, that the Company shall have no
liability to indemnify Kemron Holders, InterAmerica Technologies, Inc., Juan J.
Gutierrez, John M. Dwyer and David Vandenberg for any alleged false statement,
representation or warranty that such person knew or reasonably should have known
was false at the time of consummation of the Unwinding Agreement, or for the
breach of any covenant or agreement by the Company in the Unwinding Agreement
that such person knew or reasonably should have known could not be performed by
the Company at the time of consummation of the Unwinding Agreement.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements. Not required.
(b) Pro Forma Financial Information. Not required.
(c) Exhibits:
2.1 Unwinding and Stock Exchange Agreement dated
November 29, 1999, among the Company, Kemron
Environmental Services, Inc., and the shareholders
of Kemron Environmental Services, Inc. ..................... 1
1 Included as part of this report.
2 Incorporated by reference to another registration statement,
report or document.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report on Form 8-K to be signed on its behalf by
the undersigned, thereunto duly authorized.
DATED: December 10, 1999
WHITNEY AMERICAN CORPORATION
/s/ Juan J. Gutierrez
-------------------------------------------------
Juan J. Gutierrez, Chief Executive Officer
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EXHIBIT 2.1
UNWINDING AND STOCK EXCHANGE AGREEMENT
This Agreement is entered into as of this 29th day of November, 1999,
among:
WHITNEY AMERICAN CORPORATION, a Delaware corporation ("WHAM");
KEMRON ENVIRONMENTAL SERVICES, INC. ("KEMRON"), a New York corporation,
wholly owned by WHAM; and Juan J. Gutierrez, InterAmerica Technologies
Inc., John Dwyer, David Vandenberg, David Bumgarner, Marilyn Zumbro, Sally
A. Roy and Oscar Cabrisses, all of whom are shareholders of WHAM (the
"Rescinding Shareholders").
R E C I T A L S:
A. WHAM entered into and subsequently consummated a Stock Exchange Agreement
dated March 6, 1998 (the "Exchange Agreement"), with KEMRON and the
Rescinding Shareholders, who then were the shareholders of KEMRON, which
provided for an exchange of shares (the "Exchange") in which WHAM acquired
all of the issued and outstanding shares of KEMRON from the Rescinding
Shareholders, and WHAM issued and delivered to the Rescinding Shareholders
an aggregate of 3,500,000 shares of the common stock of WHAM (the "Exchange
Shares"). As a result of the Exchange, KEMRON became a wholly owned
subsidiary of WHAM. Because WHAM had no operating activities, the Exchange
was treated as a reverse acquisition with WHAM acting as a holding company
for KEMRON, without operations of its own. The parties now desire to unwind
and rescind the Exchange as if it never occurred.
B. The Exchange Shares were issued and delivered to the Rescinding
Shareholders, as follows:
<TABLE>
<CAPTION>
Exchange Current
Name Shares Holdings
---------------- --------- ---------
<S> <C> <C>
Juan J. Gutierrez 2,222,223 2,222,223
InterAmerica Technologies Inc. 877,778 877,778
John Dwyer 166,666 166,666
David Vandenberg 166,666 166,666
David Bumgarner 44,444 44,444
Marilyn Zumbro 11,111 11,111
Sally A. Roy 5,556 5,566
Oscar Cabrisses 5,556 5,566
--------- ---------
TOTALS 3,500,000 3,500,000
========= =========
</TABLE>
C. At the same time it acquired KEMRON, WHAM acquired three other companies in
stock-for-stock exchanges pursuant to stock exchange agreements
substantially identical to the
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Exchange Agreement: WHAM acquired Coastline International, Inc., a Delaware
corporation ("Coastline") upon the issuance of 1,750,000 shares of WHAM
common stock to Coastline's shareholders ("Coastline Agreement"); Wham
acquired New Horizons, Inc., a Delaware corporation ("New Horizons"), upon
the issuance of 1,750,000 shares of WHAM common stock to New Horizon's
shareholders ("New Horizons Agreement"); and WHAM acquired Exeter Group,
Inc., a Florida corporation ("Exeter"), upon the issuance of 1,000,000
shares of WHAM common stock to Exeter's shareholders ("Exeter Agreement").
WHAM's acquisitions of Coastline, New Horizons and Exeter have subsequently
been unwound or cancelled, and a total of 4,309,027 (all but 190,973) of
the 4,500,000 shares issued to acquire those three companies have to date
been cancelled and returned to treasury. WHAM no longer has any ownership
interest in or claim to Coastline, New Horizons or Exeter.
D. Between March 6, 1998 and the date of closing this Agreement, WHAM has
incurred and may yet incur various expenses, costs and fees, such as legal
and accounting fees and other costs and expenses associated with the
rescission or cancellation of the acquisitions of Coastline, New Horizons
and Exeter, and for pursuing legal actions against former shareholders of
Coastline and New Horizons, and other miscellaneous costs and expenses on
WHAM's behalf (the "WHAM Expenses"). Inasmuch as KEMRON was the only WHAM
subsidiary with operations and assets, all such expenses were paid by
KEMRON on behalf of WHAM.
E. Pursuant to a Unanimous Written Consent of Directors dated March 12, 1998,
Juan J. Gutierrez, John Dwyer and David Vandenberg were granted 350,000,
25,000 and 25,000 stock options to purchase common shares of WHAM,
respectively (the "Stock Options"), none of which have been exercised or
attempted to be exercised.
F. WHAM had 362,515 common shares outstanding prior to the acquisitions of
KEMRON, Coastline, New Horizons and Exeter, and WHAM currently has
4,217,020 shares of common stock issued and outstanding. WHAM owns 315
shares of the common stock of KEMRON, which it acquired from the Rescinding
Shareholders and which is all of the capital stock of KEMRON issued and
outstanding (the "KEMRON Shares").
G. WHAM has signed as a secondary guarantor of a Peoples Bank loan to the
Gutierrez Properties Limited Partnership (the "Partnership Guarantee").
H. WHAM, KEMRON and the Rescinding Shareholders now desire to enter into and
consummate a transaction in which, among other things, the Rescinding
Shareholders will surrender the Exchange Shares held by them to WHAM for
cancellation, and the KEMRON Shares will be returned by WHAM to the
Rescinding Shareholders.
NOW THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties set forth below, the parties agree as follows:
1. Unwind the Exchange Agreement and Return the Exchange Shares. It is the
desire of the respective Boards of Directors of WHAM and KEMRON as well as of
the Rescinding Shareholders to do all the things called for herein, including to
cancel the Exchange Agreement and
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in effect unwind the Exchange with the same effect as if the Exchange never
occurred and simultaneously complete an exchange of common shares in which,
among other things:
(a) The Rescinding Shareholders will surrender to WHAM all of the
3,500,000 Exchange Shares issued to them, all of which are still outstanding and
held by the Rescinding Shareholders, which upon receipt by WHAM shall be
cancelled; and
(b) WHAM will transfer and deliver to the Rescinding Shareholders the
original stock certificates evidencing the KEMRON Shares which never have been
cancelled, totalling 315 shares of the common stock of KEMRON.
2. Manner of Consummating Transaction. On the effective date of this
Agreement:
(a) All certificates evidencing the 3,500,000 Exchange Shares issued and
outstanding in the name of the Rescinding Shareholders shall be surrendered by
them to WHAM for cancellation, and upon WHAM's receipt of such certificates the
Exchange Shares shall be promptly cancelled on the transfer books of WHAM and
resume the status of authorized and unissued shares.
(b) The ten certificates evidencing the 315 shares of KEMRON stock
previously owned and issued in the name of the Rescinding Shareholders (that is,
the KEMRON Shares) shall be returned by WHAM to the individual Rescinding
Shareholders. The returned Kemron Shares are identified below by their original
number and in the denominations shown below:
<TABLE>
<CAPTION>
Certificate Number Rescinding Shareholder Number of Shares
------------------ ---------------------- ----------------
<S> <C> <C>
1 Juan J. Gutierrez 200
5 InterAmerica Technologies, Inc. 79
2 & 7 John Dwyer 15
3 & 8 David Vandenberg 15
9 David Bumgarner 4
10 Marilyn Zumbro 1
11 Sally A. Roy 1/2
12 Oscar Cabrisses 1/2
---
Total 315
===
</TABLE>
(c) WHAM shall issue to KEMRON an aggregate of 100,000 shares of WHAM's
$.0001 par value common stock in full payment and settlement of all of the WHAM
Expenses incurred through the date of consummation of this Agreement (the
"Settlement Shares").
(d) The Exchange Agreement (including but not limited to Kemron's
guarantee of $105,000 in WHAM payables to John Brasher and Stephen Siedow) shall
be cancelled in its entirety without liability to any party thereto. No party to
the Exchange Agreement shall after the date of cancellation have any liability
to another party by virtue of any provision of the Exchange Agreement.
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(e) The Stock Options granted to Juan J. Gutierrez, John Dwyer and David
Vandenberg pursuant to the Unanimous Written Consent of Directors dated March
12, 1998, also shall be cancelled and the originals thereof surrendered to WHAM.
(f) KEMRON shall at the closing of these transactions forgive and forever
discharge all expenses it has paid on behalf of WHAM for no consideration other
than as is set forth in this Agreement, the sufficiency of which KEMRON
acknowledges. KEMRON shall deliver to WHAM a release for all WHAM expenses and
any interest due or imputed on the WHAM Expenses and a general release of all
liability, and WHAM shall deliver to KEMRON a general release of all liability.
(g) All of WHAM's liability whatsoever under the Partnership Guarantee
shall be cancelled, as evidenced by a release from the obligee bank.
3. Restricted Status of Settlement Shares. The following provisions are
applicable to the Settlement Shares:
(a) The Settlement Shares issuable to KEMRON have not been registered
under the Securities Act of 1933 (the "Act") in reliance upon exemptions from
registration provided by Section 4(2) of the Act or under the securities laws of
the State of Virginia or any rules or regulations promulgated thereunder, on the
grounds that the offer, sale and issuance of the Settlement Shares is a
transaction not involving any public offering. The Settlement Shares are
restricted securities as that term is defined in Rule 144 (a) of the General
Rules and Regulations under the Act and must be held indefinitely, unless they
are subsequently registered under the Act or an exemption from such registration
requirements is available for their resale.
(b) Certificates evidencing the Settlement Shares shall, unless and until
removed in accordance with law, bear a restrictive legend substantially in the
following form:
The shares represented by this certificate have not been registered under
the Securities Act of 1933, as amended (the "Act"), and are restricted
securities as that term is defined in Rule 144 under the Act. These shares
may not be offered for sale, sold or otherwise transferred except pursuant
to an effective registration statement under the Act, or pursuant to an
exemption from registration under the Act.
4. Restricted Status of KEMRON Shares. The Rescinding Shareholders each
acknowledge that the KEMRON Shares have not been registered under the Act or the
securities laws of any state and will be subject to the same restrictions on
transfer and disposition applicable to the Settlement Shares as set forth in the
immediately preceding paragraph.
5. Waiver of Damages or Compensation. The parties agree and acknowledge
that upon consummating the transaction herein contemplated,
(a) WHAM is not owed any money or thing of value by KEMRON, but if it
should be determined that WHAM is owed any money or thing of value by KEMRON as
of the closing, such debt shall be offset and satisfied in full by KEMRON's
cancellation of the WHAM expenses;
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(b) The Rescinding Shareholders at closing will not be owed any money or
thing of value by WHAM, and they each forever waive the right to claim any
salary, commissions, payments, money or other damages or recompense of any kind
whatsoever from WHAM;
(c) The Rescinding Shareholders forever waive any equity interest or other
right or interest whatsoever in or to WHAM, including any future value which the
surrendered Exchange Shares might ever have had; and
(d) KEMRON forever waives any right to collect the WHAM expenses and
waives any equity interest or other rights or interest whatsoever in or to WHAM,
including any future value which the surrendered WHAM Shares might ever have
had.
6. Representations and Warranties of WHAM. WHAM represents and warrants
to KEMRON and the Rescinding Shareholders that the KEMRON Shares will be
transferred to the Rescinding Shareholders free and clear of any claim of a
third party, or any lien, claim or other encumbrance whatsoever, whether created
voluntarily or arising by law or otherwise.
7. Representations and Warranties of KEMRON. KEMRON represents and
warrants to WHAM that:
(a) KEMRON acknowledges that the Settlement Shares to be issued by WHAM
are restricted securities as above described and will be subject to significant
restrictions on transfer, and KEMRON is taking the Settlement Shares for
investment, without any intention of making any distribution, public offering or
resale of such shares.
8. Representations and Warranties of the Rescinding Shareholders. The
Rescinding Shareholders severally represent and warrant to WHAM that:
(a) They have not been solicited (within the meaning of the Securities
Exchange Act of 1934) by any person to enter into or sign this Agreement.
(b) The Exchange Shares being surrendered by him, her or it for
cancellation are and at the time of closing will be free and clear of any claim
of a third party, or any lien, claim or other encumbrance whatsoever, whether
created voluntarily or arising by law or otherwise.
(c) The Rescinding Shareholders each acknowledge that the KEMRON Shares to
be transferred and delivered to them are restricted securities as above
described and will be subject to significant restrictions on transfer, each is
taking the KEMRON Shares for investment, without any intention of making any
distribution, public offering or resale of such shares, and each acknowledges
that KEMRON is not a public company and that there will not be any market for
the KEMRON Shares.
(d) The Rescinding Shareholders each acknowledge that he, she or it is
intimately familiar with the results of operations and financial condition of
KEMRON, each has carefully reviewed all filings by WHAM with the Securities and
Exchange Commission since the Exchange.
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(e) No Rescinding Shareholder is owed any compensation for services,
damages or expenses incurred or for any other thing by WHAM, and WHAM is not
liable to them for any thing whatsoever. Each Rescinding Shareholder is entering
into this Agreement of his, her or its own free will, free of any duress or
pressure whatsoever.
9. Representations and Warranties of Gutierrez, Dwyer and Vandenberg. In
addition to any other representations and warranties made herein, Juan J.
Gutierrez, John Dwyer and David Vandenberg represent and warrant to WHAM that:
(a) They have at all times since the Exchange been in control of the
boards of directors of WHAM and KEMRON and have been the principal executive
officers of WHAM and KEMRON and are familiar with the respective results of
operations, financial condition and commitments of WHAM and KEMRON, and each
represents and warrants to WHAM that the representations and warranties of WHAM
made in this Agreement are true and correct in all material respects and that no
legal or other impediment exists which would prevent or impair WHAM from
carrying out its obligations under this Agreement.
(b) WHAM has made all filings required by the Securities Exchange Act of
1934 to the best of their knowledge.
(c) WHAM is not liable for damages or otherwise to New Horizons, Inc., a
Delaware corporation, Coastline International, Inc., a Delaware corporation,
Exeter Group, Inc., a Florida corporation, Hector Hernandez, Charles Colburn or
Heatherlynn Colburn, and that all former disputes with such companies and
persons have been completely settled and discharged. For all purposes of this
Agreement, InterAmerica Technologies, Inc. shall be deemed to know and have all
information that is known by or in the possession of its principal shareholder,
Juan J. Gutierrez.
(d) WHAM has not done any business in its name or had any operations other
than passively serving as the holding company for KEMRON. Except for the
Partnership Guarantee and certain settlement agreements entered into in relation
to Coastline, New Horizons and Exeter, WHAM has not executed any contracts in
its name since the Exchange. Other than its executive officers, WHAM has no
employees or agents, and no officer or director of WHAM has received or is
entitled to any salary for acting as an officer or director of WHAM.
(e) Since the Exchange WHAM has not taken and through the date of closing
under this Agreement will not take funds or anything of value from any investor,
whether in the form of debt, equity or otherwise, and no person has been
promised or is entitled to receive from WHAM any capital stock or any note or
other debt instrument evidencing funds or any thing of value given or loaned.
Except for 25,000 shares of common stock issued to John D. Brasher, Jr. on May
30, 1999, for legal services, since the Exchange WHAM has not issued and through
the date of closing under this Agreement will not issue any shares of its
capital stock, any shares convertible into or exchangeable for its capital
stock, nor any option or other right entitling any person to acquire shares of
its capital stock.
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(f) There are no claims, actions, suits, proceedings or investigations
pending or threatened against or affecting WHAM in any governmental department,
commission, board, bureau, agency or other instrumentality, domestic or foreign,
or arbitration tribunal or other forum. WHAM is not subject to any judgment,
injunction, court order, decree or similar order of a court or other body. WHAM
is not in violation of any state or federal law, rule or regulation.
(g) Except for Delaware franchise taxes and other routine governmental
charges that may have become owed since the Exchange, WHAM has no obligations,
debts, payables or liabilities (whether direct, contingent or otherwise), except
for debts owed to Stephen M. Siedow and John D. Brasher Jr. totalling $105,000
before imputation of any interest.
(h) WHAM is not indebted to, and has not guaranteed payment of any sum on
behalf of, KEMRON or any current or past employee, officer or director of WHAM
or KEMRON or any Rescinding Shareholder for any sum, with the exception of
serving as secondary guarantor under the Partnership Guarantee.
(i) WHAM is not liable for any income, excise, unemployment, social
security, or other taxes whatever and all required tax returns or reports of
WHAM have been duly filed.
10. Indemnification.
(a) Indemnification by KEMRON and Rescinding Shareholders. Kemron and the
Rescinding Shareholders each agree to defend, indemnify and hold WHAM harmless
from and against any and all losses, liabilities, damages, costs or expenses
(including reasonable attorney's fees, penalties and interest) arising from or
incurred as a result of (i) any false statement, representation or warranty made
by KEMRON or the Rescinding Shareholders in this Agreement, or (ii) the breach
of any agreement or covenant made by KEMRON or a Rescinding Shareholder in this
Agreement, or (iii) the Peoples Bank loan to Gutierrez Properties Limited
Partnership.
(b) Indemnification by WHAM. WHAM agrees to defend, indemnify and hold
KEMRON and the Rescinding Shareholders harmless from and against any and all
losses, liabilities, damages, costs or expenses (including reasonable attorney's
fees, penalties and interest) arising from or incurred as a result of (i) any
false statement, representation or warranty made by WHAM in this Agreement, or
(ii) the breach of any agreement or covenant made by WHAM in this Agreement;
provided, that WHAM shall have no liability to indemnify Rescinding Shareholders
InterAmerica Technologies, Inc., Juan J. Gutierrez, John Dwyer and David
Vandenberg for any false statement, representation or warranty that such person
knew or reasonably should have known was false at the time of consummation of
this Agreement, or for the breach of any covenant or agreement by WHAM that such
person knew or reasonably should have known could not be performed at the time
of consummation of this Agreement.
(c) Survival of Covenants and Warranties. The representations, warranties,
covenants and agreements made by KEMRON and the Rescinding Shareholders on the
one hand, and by WHAM on the other hand, and the parties' indemnity obligations
shall survive the closing of this Agreement and any releases of liability
delivered at closing and shall be fully enforceable at law or in equity against
such other party and its successors and assigns for a period of one year after
the closing.
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Any investigation at any time made by or on behalf of (or any disclosure to) any
party hereto shall not diminish in any respect whatsoever its right to rely on
the representations and warranties of the other party hereto.
(d) Notice of Claims. WHAM agrees to give prompt written notice to KEMRON
and the Rescinding Shareholders each agree to give prompt written notice to
WHAM, of any claim against the party giving notice which might give rise to a
claim by it against the other party hereto based upon the indemnity provisions
above, stating the nature and basis of the claim and the actual or estimated
amount thereof; provided, however, that failure to give such notice will not
affect the obligation of the indemnifying party unless, and only to the extent
that, the indemnifying party is actually prejudiced thereby.
(e) Right to Defend. In the event that any action, suit or proceeding is
brought against any person indemnified above ("Action") and a party to this
Agreement may have liability under the indemnification provisions above, the
indemnifying party shall have the right, at its sole cost and expense, to defend
the Action in the name of or on behalf of the party indemnified and, in
connection with any such Action, the parties agree to render to each other such
assistance as may reasonably be required in order to ensure the proper and
adequate defense of the Action; provided, however, that an indemnified party
shall have the right to retain its own counsel, with the fees and expenses to be
paid by the indemnifying party, if representation of such indemnified party by
the counsel retained by the indemnifying party would be inappropriate because of
actual or potential differing interests between such indemnified party and any
other party represented by such counsel. Neither party hereto shall make any
settlement of any claim which might give rise to liability of the other party
under the indemnification provisions contained herein without the written
consent of such other party, which consent such other party covenants shall not
be unreasonably withheld.
11. Other Agreements. The parties further agree that:
(a) The parties each agree to take such further actions and execute such
other documents as may be necessary to carry out the intent and purpose of this
Agreement, including but not limited to confirming in writing matters that are
set forth in this Agreement.
(b) In order that WHAM is assured of information that may be needed to
prepare financial statements or other financial information for the three years
respectively ended May 31, 2000, 1999 and 1998 (the "Audit Periods"), KEMRON and
Rescinding Shareholder agree that KEMRON shall, for a period of three years
following the date of this Agreement, make all of its financial books and
records relating to the Audit Periods available to WHAM upon request for
examination and copying.
(c) At the closing, Rescinding Shareholders Juan J. Gutierrez, John Dwyer,
and David Vandenberg shall resign in writing from all directorships and officer
positions held by them. In addition, John Heishman, Director and
Secretary/Treasurer of WHAM shall also resign said positions at the closing.
Secretary/Treasurer, John Heishman shall, immediately prior to resigning,
execute minutes of the WHAM Board of Director's Meeting whereby the board
reduces the WHAM Board of Directors from seven members to one member and appoint
Stephen M. Siedow as the sole director of WHAM.
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<PAGE>
12. Reliance by Transfer Agent. Every current and future transfer agent
and registrar of parent's common stock may rely upon this Agreement as authority
for the cancellation of the Exchange Shares and their return to the status of
authorized and unissued shares.
13. Closing. Closing of the transactions contemplated in this Agreement
shall occur when:
(a) the Rescinding Shareholders deliver to WHAM all original certificates
evidencing the Exchange Shares;
(b) WHAM delivers to the Rescinding Shareholders the original certificates
evidencing the 315 KEMRON Shares;
(c) Kemron delivers to WHAM a written release of the WHAM Expenses and any
interest due or imputed on the expenses and a general release of all liability;
(d) WHAM delivers to KEMRON a general release of all liability;
(e) the originals of the Stock Options are delivered to WHAM by Rescinding
Shareholders Juan J. Gutierrez, John Dwyer and David Vandenberg;
(f) the original resignations of Rescinding Shareholders Juan J.
Gutierrez, John Dwyer and David Vandenberg and the resignation of non-
shareholder John Heishman and the minutes of the meeting of the Board of
Directors required by Section 11(c) of this Agreement are delivered to WHAM;
(g) KEMRON delivers to WHAM a satisfactory release from Peoples Bank of
all liability and obligations of WHAM under the Partnership Guarantee;
(h) WHAM will deliver to KEMRON a copy of the WHAM director minutes
approving execution and performance of this Agreement;
(i) KEMRON will deliver to WHAM a copy of the KEMRON director minutes
approving execution and performance of this Agreement;
(j) The originals or copies of all settlement or other agreements entered
into by WHAM with New Horizons, Inc., a Delaware corporation, Coastline
International, Inc., a Delaware corporation, Exeter Group, Inc., a Florida
corporation, Hector Hernandez, Charles Colburn, Heatherlynn Colburn or Michael
Goldberg, or any such persons or entities, and copies of all documents and
exhibits filed in any lawsuits against such persons or entities by WHAM or
against WHAM by any of such persons or entities;
(k) The originals or copies of all agreements, contracts, understandings,
agreements in principle, letters of intent and memoranda entered into or signed
by WHAM since the Exchange; and
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<PAGE>
(l) All original corporate records of WHAM, including but not limited to
articles, bylaws, all reports and other documents filed with the Delaware
Secretary of State or any other secretary of state, minutes of shareholder and
director proceedings, stock plans, stock option plans, benefit plans and other
records in every form, electronic or otherwise.
14. Miscellaneous Provisions.
(a) John D. Brasher, Jr. to Serve as Closing Agent. The parties agree that
John D. Brasher Jr., an Attorney who formerly was counsel to WHAM, shall act as
closing agent for the parties, and all parties acknowledge and waive any
potential conflict of interest arising from his multiple status as former WHAM
counsel, WHAM shareholder and closing agent. No party to this Agreement has been
given any legal advice by Mr. Brasher nor has he acted as attorney to any party
in connection with this Agreement. Certificates evidencing the Exchange Shares
and the KEMRON Shares shall be sent to Mr. Brasher, who shall cancel the
Exchange Shares and deliver the KEMRON Shares as herein called for at the
closing.
All of the documents and things required by closing shall be delivered to
Mr. Brasher for delivery as herein called for. Mr. Brasher shall not be liable
to any party except for fraud, gross negligence or willful misconduct.
(b) Notices. Every notice, request and instruction required or permitted
under this Agreement shall be in writing and, except as otherwise permitted
herein, shall be delivered by registered or certified mail, telegram or cable,
overnight air courier or other messenger service which requires the receiver's
signature and regularly retains its delivery receipts, or by personal delivery,
if to a Rescinding Shareholder, in care of KEMRON, and if to WHAM or KEMRON,
then as follows:
to WHAM: prior to Closing, to KEMRON
After closing, to:
------------------
12373 E. Cornell Avenue
Aurora, Colorado 80014
ATTN: Stephen M. Siedow
to KEMRON: 8150 Leesburg Pike, Suite 1200
Vienna, VA 22182
ATTN: Juan J. Gutierrez
to Closing Agent: 90 Madison Street, Suite 707
Denver, Colorado 80206
or to any subsequent address provided by a party or such other persons in
accordance with this Section.
(c) Expenses. Each party shall bear its own costs and expenses in
connection with this
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<PAGE>
Agreement, and no party shall be liable to any other party for any costs or
expenses incurred in connection with this Agreement.
(d) Benefit. This Agreement shall be binding upon and inure to the
benefit of WHAM and KEMRON and the Rescinding Shareholders, and their respective
heirs, successors, assigns and legal representatives. Nothing in this Agreement
is intended, expressly or impliedly, to confer any benefit, right or remedy upon
any person other than the parties and as set forth in this Section, except as
may otherwise be explicitly set forth in this Agreement.
(e) Governing Law; etc. This Agreement shall be governed by and construed
in accordance with the laws of the State of Colorado and shall be interpreted as
if all parties participated equally in its drafting. Headings appearing in this
Agreement are employed for convenience of reference only and shall not be
considered in interpreting this Agreement.
(f) Modification; Entire Agreement. This Agreement may not be amended or
supplemented except by an agreement in writing signed by WHAM, KEMRON and the
Rescinding Shareholders. This Agreement contains the entire agreement between
the parties.
(g) Waiver. Any party may waive the satisfaction of any one or more
conditions precedent to its obligations hereunder and may waive any other rights
hereunder. Any such waiver must be in writing, signed by the party making the
waiver and clearly identify the condition precedent or other right being waived.
No such waiver shall operate as a subsequent waiver of any other condition
precedent or other right.
(h) Severability. In the event any provision of this Agreement is deemed
to be unenforceable for any reason, such provision shall not invalidate the
remaining portion of this Agreement, which if possible shall be enforced as if
such unenforceable provision never were written.
(i) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be considered an original, but all of which
together shall constitute one and the same instrument.
(j) Authorization. Every party represents and warrants to every other
party that he, she or it has full power and authority to enter into and perform
this Agreement in accordance with its terms, and if the party is a corporation
or other entity, that the execution and performance of this Agreement has been
authorized by all requisite action of its board of directors or equivalent
governing body.
(k) Effectiveness and Closing. This Agreement shall be effective among
the parties when fully signed and notarized. Closing shall occur as promptly as
possible after the shareholders of WHAM have considered and approved this
Agreement. A meeting of the WHAM shareholders shall be called as soon as
possible and asked to approve the execution and performance of this Agreement.
IN WITNESS WHEREOF, the undersigned parties have executed this Agreement,
and
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<PAGE>
WHAM and KEMRON have initialed every preceding page, effective as of the
date first above written.
WHITNEY AMERICAN CORPORATION KEMRON ENVIRONMENTAL
SERVICES, INC.
By /s/ Juan J. Gutierrez By /s/ Juan J. Gutierrez
---------------------------------- ---------------------------------
Juan J. Gutierrez, President Juan J. Gutierrez, President
Page 12
<PAGE>
RESCINDING SHAREHOLDERS' SIGNATURE PAGE
to
UNWINDING AND STOCK EXCHANGE AGREEMENT
Dated November 29, 1999
InterAmerica Technologies, Inc.
By /s/ Juan J. Gutierrez X /s/ Juan J. Gutierrez
----------------------------------- ------------------------------
Juan J. Gutierrez, President Juan J. Gutierrez
X /s/ John Dwyer X /s/ David Vandenberg
------------------------------------ ------------------------------
John Dwyer David Vandenberg
X /s/ David Bumgarner X /s/ Marilyn Zumbro
------------------------------------ ------------------------------
David Bumgarner Marilyn Zumbro
X /s/ Sally A. Roy X /s/ Oscar Cabrisses
------------------------------------ ------------------------------
Sally A. Roy Oscar Cabrisses
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<PAGE>
NOTARIAL ACKNOWLEDGMENTS
STATE OF VIRGINIA )
) .ss
COUNTY OF FAIRFAX )
I HEREBY CERTIFY that before me, a Notary Public duly commissioned and
qualified in and for the above stated jurisdiction, personally came and appeared
Juan J. Gutierrez, known to me to be the President of WHITNEY AMERICAN
CORPORATION, a Delaware corporation, who after being duly sworn declared that he
executed the foregoing UNWINDING AND STOCK EXCHANGE AGREEMENT as his free act
and deed, and that the statements therein set forth are true and correct.
Sworn to and Subscribed on November 29, 1999.
/s/ Sharon M. Hotchkiss October 31, 2003
X.............................. Commission Expires:........................
Notary Public
(SEAL)
STATE OF VIRGINIA )
) .ss
COUNTY OF FAIRFAX )
I HEREBY CERTIFY that before me, a Notary Public duly commissioned and
qualified in and for the above stated jurisdiction, personally came and appeared
Juan J. Gutierrez, known to me to be the President of KEMRON ENVIRONMENTAL
SERVICES, INC., a New York corporation, who after being duly sworn declared that
he executed the foregoing UNWINDING AND STOCK EXCHANGE AGREEMENT as his free act
and deed, and that the statements therein set forth are true and correct.
Sworn to and Subscribed on November 29, 1999.
/s/ Sharon M. Hotchkiss October 31, 2003
X................................. Commission Expires:.........................
Notary Public
(SEAL)
<PAGE>
NOTARIAL ACKNOWLEDGMENTS
STATE OF VIRGINIA )
) ss.
COUNTY OF FAIRFAX )
I HEREBY CERTIFY that before me, a Notary Public duly commissioned and
qualified in and for the above stated jurisdiction, personally came and appeared
Juan J. Gutierrez, who after being duly sworn declared that he/she executed the
foregoing UNWINDING AND STOCK EXCHANGE AGREEMENT as his/her free act and deed,
and that the statements therein set forth are true and correct.
Sworn to and Subscribed on November 29, 1999.
/s/ Sharon M. Hotchkiss October 31, 2003
X................................ Commission Expires:..........................
Notary Public
(SEAL)
STATE OF VIRGINIA )
) ss.
COUNTY OF FAIRFAX )
I HEREBY CERTIFY that before me, a Notary Public duly commissioned and
qualified in and for the above stated jurisdiction, personally came and appeared
Juan J. Gutierrez, known to me to be the President of INTERAMERICA TECHNOLOGIES,
INC., a Washington, D.C. corporation, who after being duly sworn declared that
he executed the foregoing UNWINDING AND STOCK EXCHANGE AGREEMENT as his free act
and deed, and that the statements therein set forth are true and correct.
Sworn to and Subscribed on November 29, 1999.
/s/ Sharon M. Hotchkiss October 31, 2003
X............................... Commission Expires:..........................
Notary Public
(SEAL)
<PAGE>
NOTARIAL ACKNOWLEDGMENTS
STATE OF ___________________ )
) ss.
COUNTY OF __________________ )
I HEREBY CERTIFY that before me, a Notary Public duly commissioned and
qualified in and for the above stated jurisdiction, personally came and appeared
JOHN DWYER, who after being duly sworn declared that he/she executed the
foregoing UNWINDING AND STOCK EXCHANGE AGREEMENT as his/her free act and deed,
and that the statements therein set forth are true and correct.
Sworn to and Subscribed on November 29, 1999.
/s/ Shannon K. Hyland June 18, 2001
X........................... Commission Expires:...........................
Notary Public
(SEAL)
<PAGE>
NOTARIAL ACKNOWLEDGMENTS
STATE OF ___________________ )
) ss.
COUNTY OF __________________ )
I HEREBY CERTIFY that before me, a Notary Public duly commissioned and
qualified in and for the above stated jurisdiction, personally came and appeared
DAVID VANDENBERG, who after being duly sworn declared that he/she executed the
foregoing UNWINDING AND STOCK EXCHANGE AGREEMENT as his/her free act and deed,
and that the statements therein set forth are true and correct.
Sworn to and Subscribed on November 29, 1999.
/s/ Lucinda Sue Arnold June 16, 2002
X............................... Commission Expires:.........................
Notary Public
(SEAL)
<PAGE>
NOTARIAL ACKNOWLEDGMENTS
STATE OF ____________________ )
) ss.
COUNTY OF ___________________ )
I HEREBY CERTIFY that before me, a Notary Public duly commissioned and
qualified in and for the above stated jurisdiction, personally came and appeared
DAVID BUMGARNER, who after being duly sworn declared that he/she executed the
foregoing UNWINDING AND STOCK EXCHANGE AGREEMENT as his/her free act and deed,
and that the statements therein set forth are true and correct.
Sworn to and Subscribed on November 29, 1999.
/s/ Lucinda Sue Arnold June 16, 2002
X................................. Commission Expires:........................
Notary Public
(SEAL)
STATE OF ___________________ )
) ss.
COUNTY OF __________________ )
I HEREBY CERTIFY that before me, a Notary Public duly commissioned and
qualified in and for the above stated jurisdiction, personally came and appeared
MARILYN ZUMBRO, who after being duly sworn declared that he/she executed the
foregoing UNWINDING AND STOCK EXCHANGE AGREEMENT as his/her free act and deed,
and that the statements therein set forth are true and correct.
Sworn to and Subscribed on November 29, 1999.
/s/ Lucinda Sue Arnold June 16, 2002
X............................. Commission Expires:............................
Notary Public
(SEAL)
<PAGE>
NOTARIAL ACKNOWLEDGMENTS
STATE OF ___________________ )
) ss.
COUNTY OF __________________ )
I HEREBY CERTIFY that before me, a Notary Public duly commissioned and
qualified in and for the above stated jurisdiction, personally came and appeared
SALLY A. ROY, who after being duly sworn declared that he/she executed the
foregoing UNWINDING AND STOCK EXCHANGE AGREEMENT as his/her free act and deed,
and that the statements therein set forth are true and correct.
Sworn to and Subscribed on November 29, 1999.
/s/ Sharon M. Hotchkiss October 31, 2003
X.............................. Commission Expires:..........................
Notary Public
(SEAL)
STATE OF ____________________ )
) ss.
COUNTY OF ___________________ )
I HEREBY CERTIFY that before me, a Notary Public duly commissioned and
qualified in and for the above stated jurisdiction, personally came and appeared
OSCAR CABRISSES, who after being duly sworn declared that he/she executed the
foregoing UNWINDING AND STOCK EXCHANGE AGREEMENT as his/her free act and deed,
and that the statements therein set forth are true and correct.
Sworn to and Subscribed on November 29, 1999.
/s/ Sharon M. Hotchkiss October 31, 2003
X.............................. Commission Expires:..........................
Notary Public
(SEAL)
