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Unisphere obtains financing, consolidates central Canadian scrap tire market

Unisphere Waste Conversion Ltd. (Unisphere), a leading edge environmental solutions provider, is pleased to announc...


Unisphere Waste Conversion Ltd. (Unisphere), a leading edge environmental solutions provider, is pleased to announce the closing of over C$3.1 million gross proceeds in the private placements of units described in the press release dated January 28, 2004. Each unit was priced at $0.35 and consists of one common share in the capital of Unisphere and one common share purchase warrant, with each full warrant exercisable into one common share of Unisphere for a period of 12 months at C$0.40 per share. In addition, Westwind Partners Inc. has an option to offer additional units which would take the aggregate gross proceeds to a total C$4 million, exercisable at any time up to 30 days after the date of closing. The common shares issued pursuant to the private placement are subject to a four month hold period.<br>
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In addition to the equity financing discussed above, Unisphere has successfully completed with Quest Capital Corp. (Quest) the first tranche of the secured bridge loan described in the press release dated January 28, 2004 for gross proceeds of C$1.6 million.<br>
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Proceeds from the combined financings were used to complete the acquisition of all of the shares of each of EnviroTire Technologies Ltd. (EnviroTire) and Glidepath Manufacturing Industries Inc. (Glidepath) and the acquisition from Entireco Inc. (Entireco) of the rights to negotiate the acquisition of scrap tires located at two sites in the Province of Quebec as described in the press release dated January 28, 2004. The balance will be used for working capital purposes and fees and expenses.<br>

The above-mentioned acquisitions secure Unisphere’s position as a leading solutions provider for Canada’s used tire problem as well as providing a solid base in the North American Scrap Tire Market. The combined group of companies supports the vertical integration strategy that Unisphere has put in place, making it one of the largest crumbing and tire recycling companies in Canada. The next phase (Phase II) of acquisition will further support this strategy.<br>
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1. EnviroTire and Glidepath Share Purchases<br>
EnviroTire’s state-of-the-art facility in Brampton, Ontario, can transform up to four tonnes of scrap tires into exceptional quality crumb rubber every hour. The process recycles 100 per cent of the tire, producing nylon fiber and steel as secondary products. This facility represents tremendous advantages over other tire recycling options as its mechanical grinding system reduces the tire to salable crumb rubber in an ecologically acceptable fashion. The company has a number of contracts with purchasers of crumb rubber in Ontario. Additional information can be found on the company’s website at: http://www.envirotire.com<br>
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Glidepath has the technology to produce molded rubber goods including shoe soles and floor tiles. The unique and proprietary compounding technology, combined with its strength in raw material sourcing, allows Glidepath to provide customers unsurpassed value and quality. The major raw material for Glidepath molded rubber goods is derived from recycled crumb rubber through an exclusive arrangement with EnviroTire. Additional information can be found on the company’s website at: ww.glidepathinc.com<br>
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2. Entireco Asset Purchase<br>
As described in the press release dated January 28, 2004, Unisphere has acquired from Entireco the rights to negotiate the acquisition of scrap tires located at two sites in the Province of Quebec and has issued three convertible debentures in an aggregate principal amount of approximately $2.5 million. The debentures are convertible at any time during their term into common shares of Unisphere at an initial conversion price of C$0.38. Of these debentures, approximately $1.5 million will mature on the third anniversary of the closing date, and the conversion price of these debentures will increase to $0.50 following the second anniversary of the closing date. The remaining $1 million matures 12 months from the closing date.<br>
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3. Bridge Financing<br>
As security for the bridge loan, Unisphere has granted to Quest a security interest in all of its assets and undertaking. Further, as additional security, a significant shareholder of Unisphere has pledged to Quest 8,250,000 common shares of Unisphere, the majority of which are currently subject to an escrow agreement entered into pursuant to the rules and policies of the TSX Venture Exchange.<br>
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As described in the press release dated January 28, 2004, Unisphere has issued to Quest 463,158 common shares of Unisphere for the first tranche advance. The common shares issued to Quest are subject to a four month hold period; however, an existing shareholder of Unisphere has arranged with Quest for a share-for-share exchange whereby these shares are to be exchanged for freely tradable shares of Unisphere.<br>
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4. Next Steps and Phase II<br>
Upon completion of the second tranche advance of the Quest financing, Unisphere will acquire the land and building located at 650 Riverview Drive in Chatham, a 320,000 square foot building on 32 acres of real estate. The acquisition of this property is subject to the completion of certain conditions precedent. This property is the headquarters to Wellington Polymer Technology Inc. (Wellington Polymer) and Chatham Rubber Manufacturing Corporation (Chatham Rubber).<br>
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Phase II is the acquisition by Unisphere of Wellington Polymer and Chatham Rubber, as described in the press releases dated January 28, 2004 and November 20, 2003. As a result of the Phase I closing, the Phase II letters of intent have become legally binding for a short period of time on their respective vendors.<br>
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Wellington Polymer is an alternative roofing manufacturer generating Enviroshake(TM), a competitive product made from recycled tires and other waste streams that replicates the look of a cedar shake. The unique product has been profiled in a number of trade magazines and promoted by home renovation experts such as Bob Vila. Additional information can be found on the company’s website at: www.enviroshake.com<br>
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Chatham Rubber has state of the art shredding and crumbing equipment and is adding additional equipment to meet the increasing demand for product. Chatham Rubber Manufacturing Corporation will contribute crumbing operations in Ontario to the Unisphere group with long term contracts, such as Enviroshake(TM), and long term supply agreements with several large manufacturers and other distribution channels.<br>
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Unisphere Waste Conversion Ltd. is a Canadian environmental solutions company, committed to becoming the global leader in tire recycling through vertical integration, producing value-added products, renewable energy, and reusable raw materials.<br>
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The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release. Some of the statements contained in this release are forward-looking statements, such as estimates and statements that describe the Company’s future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements. Important factors that could cause actual results to differ materially from Unisphere’s expectations are disclosed under the heading “Risk Factors” in its 2003 Annual Report as well as in its 2003 Annual Information Form (AIF) both of which are filed with Canadian regulators on SEDAR.<br>
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This news release does not constitut
e an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the U
nited States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.<br>
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For further information, please contact Unisphere Waste Conversion Ltd., John Wypich, 84 Avenue Road, Toronto, Ontario M5R 2H2, 416-966-4555.<br>
Info@unisphere.ca<br>
www.unisphere.ca <br>


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