SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
---------------
Date of Report (Date of earliest event reported) April 25, 1996
AQUAGENIX, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-24490 65-0419263
(State or other jurisdiction (Commission (IRS Employer
or incorporation) File Number) Identification
No.)
6500 Northwest 15th Avenue, Fort Lauderdale, Florida 33309
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code (954) 973-9999
Not Applicable
(Former name or former address, if changed since last report)
Page 1
ITEM 2. DISPOSAL OF ASSETS
On April 25, 1996, Aquagenix, Inc. (the "Company") sold substantially
all of the assets and liabilities of Haas Environmental Services, Inc.
("HES") to Heart Environmental Services, Inc. (the "Buyer"), a New
Jersey corporation for a total consideration of $1,907,021. The
aggregate consideration comprises (i) $681,000 in cash, (ii) a
three-year promissory note of $600,000 issued by the Buyer, bearing
interest at 9% per annum and collaterized by the pledge of 499 shares
of the Buyer's Common Stock pursuant to a Stock Pledge Agreement, (iii)
the cancellation of the promissory note obligation of the Company of
$436,921 by H&H Investment Corporation, Mr. Eugene M. Haas and Mr.
Robert E. Haas (collectively known as the "Haas Shareholders"), also
the shareholders of the Buyer, (iv) the cancellation of the obligations
amounting to $100,000 by the Haas Shareholders pursuant to their
employment termination agreement, (v) the cancellation of the lease
obligations to the Haas Shareholders amounting to $62,700 in connection
to a office lease agreement, (vi) the cancellation of an equipment note
payable of $26,400 by the Haas Shareholders. The Company originally
incurred these obligations ((iii) to (vi)) in connection with the
acquisition of HES in February 1995.
In connection with the HES sale, the Company and the Haas Shareholders
entered into a lock-up agreement relating to the 219,000 shares of the
Company's common stock (the "Shares") owned by the Haas Shareholders.
The lock-up agreement provides that any sale or transfer of the Shares
by the Haas Shareholders will be restricted to an amount of not greater
than 20,000 Shares for every three-month period. As a result of the HES
sale, the Company has agreed not to pursue any claims against the Haas
Shareholders in connection with the Haas Acquisition in February 1995.
Reference is made to the Asset Purchase Agreement, dated as of April
25, 1996, among the Company, HES, the Buyer, the Haas Shareholders and
Haas Sand and Gravel, Inc., filed as an exhibit hereto, for further
information concerning the terms and conditions of the HES sale. The
Asset Purchase Agreement and such information are incorporated herein
by reference.
Page 2
ITEM 7. FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro Forma Condensed Consolidated Financial Statements
(Unaudited) of Aquagenix, Inc.
The following pro-forma condensed consolidated balance sheet
as of March 31, 1996 and the proforma condensed consolidated
income statement for the three months ended March 31, 1996
give effect the sale of HES, assuming the sale transaction
took place at the end of the period presented. The adjustments
were based on financial information available on April 25,
1996 which resulted in a net gain of approximately $1.5
million. The adjustments relating to the pro forma condensed
consolidated income statement for the year ended December 31,
1995 assume the transaction was consummated on February 28,
1995 which was the date that HES was acquired. The actual sale
took place on April 25, 1996.
The pro forma information is based on the historical financial
statements of the Company which had previously been
reclassified to separately present the discontinued
operations. Accordingly, the only proforma adjustments are to
eliminate the net assets of and net losses relating to HES and
to record the sale proceeds and the net gain arising from the
HES sale.
(c) Exhibit
10.76 Asset Purchase Agreement, dated as of April 25, 1996,
by and between Heart Environmental Services, Inc.,
H&H Investment Corporation, Eugene M. Haas, Robert E.
Haas, Haas Sand and Gravel, Inc., HES and the Company.
Page 3
AQUAGENIX, INC. & SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
AS AT MARCH 31, 1996
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
AQUAGENIX ADJUSTMENTS CONSOLIDATED
---------- ---------- ----------
<S> <C> <C> <C>
Assets
Current assets 2,571,662 681,000 (a) 3,252,662
Property and equipment, net 1,844,814 1,844,814
Intangible assets, net 3,177,583 3,177,583
Net assets of discontinued operations 1,192,720 (650,507)(b) 542,213
Other assets 261,899 600,000 (c) 861,899
---------- ---------- ----------
Total assets $9,048,678 630,493 9,679,171
========== ========== ==========
Liabilities and Stockholders' Equity
Current liabilities 1,704,203 1,704,203
Long-term debts 5,023,898 5,023,898
Stockholders' equity 2,320,577 630,493 (d) 2,951,070
---------- ---------- ----------
Total liabilities and stockholders' equity $9,048,678 630,493 9,679,171
========== ========== ==========
</TABLE>
(a) Record cash proceeds from the HES Sale.
(b) Record the sale of certain assets and liabilities of HES.
(c) Record the promissory note receivable from Heart Environmental
Services, Inc., the Buyer.
(d) Record remaining gain from the HES Sale. Total positive impact on
earnings amounted to approximately $1.5 million, of approximately
$870,000, relating to the change in allowance for estimated phase-out
and other losses from environmental remediation segment.
Page 4
AQUAGENIX, INC. & SUBSIDIARIES
PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1996
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
AQUAGENIX ADJUSTMENTS CONSOLIDATED
---------- ---------- ----------
<S> <C> <C> <C>
Operating income 369,969 369,969
---------- ----------
Income from continuing operations before income taxes 250,490 250,490
Income tax provision 0 0
---------- ---------- ----------
Income from continuing operations 250,490 0 250,490
Discontinued operations:
Loss from environmental remediation business segment, 0 0
net of income taxes
Change in allowance for estimated phase-out and other
losses from environmental remediation segment 869,507 630,493 (a) 1,500,000
---------- ---------- ----------
Net income $1,119,997 630,493 1,750,490
========== ========== ==========
Earnings (loss) per common and common equivalent shares:
Continuing operations - primary $ 0.08 0.08
Continuing operations - assuming full dilution 0.08 0.08
Discontinued operations 0.26 0.46
Weighted average common and common equivalent shares outstanding:
Primary 3,292,862 3,292,862
========== ==========
Assuming full dilution 3,292,862 3,292,862
========== ==========
</TABLE>
(a) Record remaining gain from the HES Sale.
Page 5
AQUAGENIX, INC. & SUBSIDIARIES
PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
AQUAGENIX ADJUSTMENTS CONSOLIDATED
----------- ----------- -----------
<S> <C> <C>
Operating loss (1,112,323) (1,112,323)
----------- -----------
Loss from continuing operations before income taxes (1,056,344) (1,056,344)
Income tax benefit (374,350) (374,350)
----------- ----------- -----------
Loss from continuing operations (681,994) 0 (681,994)
Discontinued operations:
Loss from environmental remediation business segment, (2,437,614) 2,000,544(a) (437,070)
net of income taxes
Loss on disposal of environmental remediation remediation
business segment (4,882,138) 3,930,020(b) (952,118)
----------- ----------- -----------
Net income $(8,001,746) 5,930,564 (2,071,182)
=========== =========== ===========
Loss per common and common equivalent shares:
Continuing operations $ (0.22) (0.22)
Discontinued operations (2.31) (0.44)
Weighted average common and common equivalent
shares outstanding: 3,166,768 3,166,768
=========== ===========
</TABLE>
(a) Loss relating to the operations of HES since its acquisition in March
1995.
(b) Loss on disposal of HES.
Page 6
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
AQUAGENIX, INC.
Date: May 8, 1996 By: /s/ Helen Chia
Helen Chia,
Chief Financial Officer
Page 7
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
HEART ENVIRONMENTAL SERVICES, INC.,
HAAS ENVIRONMENTAL SERVICES, INC.,
H & H INVESTMENT CORP.,
EUGENE M. HAAS,
ROBERT E. HAAS
HAAS SAND AND GRAVEL, INC.,
AND
AQUAGENIX, INC.
DATED
APRIL __, 1996
Page 1
TABLE OF CONTENTS
1. Sale and Purchase of Assets........................................ 2
1.1 Sale and Purchase of Assets............................... 2
1.2 Assignment of Contracts................................... 3
1.3 Obtaining Permits and Licenses............................ 5
1.4 Certain Liabilities and Litigation Assumed by Buyer....... 5
1.5 Cancellation of Obligations from February Agreement....... 6
2. Purchase Price..................................................... 6
2.1 Purchase Price............................................ 6
2.2 Payment of Purchase Price................................. 7
3. Closing............................................................ 8
3.1 Date of Closing........................................... 8
3.2 Termination............................................... 8
4. Representations and Warranties of Seller........................... 9
4.1 Organization, Standing and Authority of Seller............ 9
4.2 Authorization of Agreement. ............................ 10
4.3 Consents of Third Parties................................. 10
4.4 Taxes..................................................... 10
4.5 Litigation; Compliance with Laws.......................... 10
4.6 Real Property............................................. 11
4.7 Equipment. ............................................... 11
4.8 No Proprietary Rights..................................... 12
4.9 Insurance................................................. 12
5. Representations and Warranties of Buyer............................ 12
5.1 Buyer's Organization...................................... 12
5.2 Authorization of Agreement................................ 12
5.3 Consents of Third Parties................................. 13
5.4 Litigation................................................ 13
5.5 Financing................................................. 14
5.6 Access to Information and Investigation................... 15
5.7 "As Is"................................................... 15
6. Further Agreements of the Parties.................................. 15
6.1 Conduct of the Business Pending the Closing............... 15
6.2 Employee and Employee Benefit Matters at Closing.......... 15
6.3 Other Action.............................................. 16
Page i
6.4 Notices................................................... 16
6.5 Governmental Filings...................................... 16
6.6 Expenses.................................................. 17
6.7 Publicity................................................. 17
6.8 Transfer Taxes............................................ 17
6.9 Supplement to Disclosures................................. 17
6.10 Preservation of Records................................... 17
6.11 Certain Post-Closing Assistance by the Buyer.............. 18
6.12 Post Closing Assumption of Litigation..................... 18
7. Conditions of Closing.............................................. 18
7.1 Conditions Precedent to Obligations of Buyer.............. 18
7.2 Conditions Precedent to Obligations of Seller............. 19
8. Documents to be Delivered at the Closing........................... 20
8.1 Documents to be Delivered by Seller....................... 20
8.2 Documents to be Delivered by Buyer........................ 20
9. Indemnification and Related Matters................................ 22
9.1 Indemnification........................................... 22
9.2 Determination of Damages and Related Matters.............. 23
9.3 Time and Manner of Certain Claims......................... 24
9.4 Defense of Claims by Third Parties........................ 25
10.Miscellaneous and Other Matters.................................... 25
10.1 Bulk Sales Compliance..................................... 25
10.2 Finders................................................... 25
10.3 Entire Agreement.......................................... 26
10.4 Jurisdiction and Governing Law............................ 26
10.5 Schedules; Tables of Contents and Headings................ 26
10.6 Notices................................................... 27
Separability....................................................... 27
10.8 Waiver.................................................... 27
10.9 Binding Effect; Assignment................................ 27
10.10 Best Knowledge............................................ 28
10.11 Restrictions on Transferability........................... 28
10.12 Payment by Seller......................................... 28
10.13 Counterparts.............................................. 29
10.14 General Releases.......................................... 29
Page ii
THIS IS A DRAFT
NO AGREEMENT, ORAL OR WRITTEN, REGARDING
OR RELATING TO ANY OF THE MATTERS COVERED
BY THIS DRAFT HAS BEEN ENTERED INTO
BETWEEN THE PARTIES, EXCEPT FOR THE
CONFIDENTIALITY AGREEMENT REFERRED TO IN
SECTION 6.1. THIS DOCUMENT, IN ITS PRESENT
FORM OR AS IT MAY BE HEREAFTER REVISED BY
ANY PARTY, WILL NOT BECOME A BINDING
AGREEMENT OF THE PARTIES UNLESS AND UNTIL,
WITH ALL SCHEDULES AND EXHIBITS ATTACHED,
IT HAS BEEN SIGNED BY ALL PARTIES AND
COMPLETE SIGNED COPIES HAVE BEEN
EXCHANGED. THE EFFECT OF THIS LEGEND MAY
NOT BE CHANGED BY ANY ACTION OF THE
PARTIES.
ASSET PURCHASE AGREEMENT
The parties to this Asset Purchase Agreement dated April __, 1996 (this
"Agreement") are HEART ENVIRONMENTAL SERVICES, INC., a New Jersey corporation
("Buyer"), HAAS ENVIRONMENTAL SERVICES, INC., a New Jersey corporation
("Seller"), H & H INVESTMENT CORP., a New Jersey corporation ("H&H"), EUGENE M.
HAAS ("EH"), ROBERT E. HAAS ("RH"), HAAS SAND AND GRAVEL, INC. ("HAAS SAND AND
GRAVEL, INC.") and AQUAGENIX, INC., a Delaware corporation ("Aquagenix").
On February 28, 1995 Aquagenix, Seller, Haas Environmental Services,
Inc. ("HES"), as seller and EH and RH entered into an Asset Purchase Agreement
(the "February Agreement") relating to the purchase of certain assets and
assumption of certain liabilities of HES.
Page 1
The business of HES is environmental remediation, environmental
construction and to a lesser extent consulting and other related environmental
services business (the "Business").
With the execution of the February Agreement the parties also entered
into a NonCompetition Agreement, Employment Agreement, as amended, Pledge
Agreement, Escrow Agreement and Lease Agreement.
Seller wishes to sell, and Buyer wishes to purchase the Business
consisting of certain assets and assumption of all liabilities of the Business
as expressly set forth herein.
It is therefore agreed as follows:
1. Sale and Purchase of Assets.
1.1 Sale and Purchase of Assets. Subject to the terms and
conditions of this Agreement, at the closing referred to in Section 3
(the "Closing"), Seller shall sell, assign, transfer, convey and
deliver to Buyer, and Buyer shall purchase, acquire and accept from
Seller, free from all liens and encumbrances, all of the Seller's
right, title and interest in and to the Business and those assets used
in connection with the Business and with such changes, deletions or
additions thereto as may occur from the date hereof to the Closing in
the ordinary course of business and consistent with the terms and
conditions of this Agreement (the "Assets"), as follows:
(a) machinery, rolling stock, automobiles, equipment,
furnishings, furniture, office supplies, tools, and other
fixed assets owned by Seller and used in connection with the
Business (the "Equipment") as specified in Schedule 1.1(a);
Page 2
(b) contracts, agreements, leases, arrangements
and/or commitments of any kind which relate to the Business,
and are listed on Schedule 1.1(b) (the "Contracts");
(c) all files, books, records and documents relating
to the Business and presently maintained at the offices of
Seller;
(d) patents, trademarks, trade names, fictitious or
business names and applications therefor, trade secrets and
processes, non-competition covenants and other intangible
property which are owned by Seller and used in connection with
the Business other than Aquagenix or any derivative thereof,
as described in Schedule 1.1(d);
(e) authorizations and licenses which are held or
used in connection with the Business as described in Schedule
1.1(e);
(f) accounts receivable as described in Schedule
1.1(f); and
(g) accounts payable as described in Schedule 1.1(g).
1.2 Assignment of Contracts.
(a) Contracts Assignable Without Consent. Subject to
the provisions of this Section 1.2, Seller shall assign to
Buyer, and Buyer shall assume, as of the Closing Date, all of
the rights and obligations of Seller under the Contracts.
(b) Nonassignability. To the extent that any contract
or any claim, right or benefit arising thereunder or resulting
therefrom (the "Interests") is not capable of being sold,
assigned, transferred or conveyed without the approval,
consent or waiver of the other party thereto, or any third
person (including a government or governmental
Page 3
unit), or if such sale, assignment, transfer or conveyance or
attempted assignment, transfer or conveyance would constitute
a breach thereof or a violation of any law, decree, order,
regulation or other governmental edict, this Agreement shall
not constitute a sale, assignment, transfer or conveyance
thereof, or an attempted assignment, transfer or conveyance
thereof. It shall be the obligation of Buyer to obtain all
necessary approvals, consents or waivers, or to resolve any
such impediments to transfer as necessary to convey to Buyer
each such Interest as soon as practicable; provided, however,
that Seller shall not be obligated to pay any consideration
therefor nor shall the Purchase Price be adjusted.
(c) If Waivers or Consents Cannot be Obtained. Seller
shall not be responsible for any waivers or consents to the
extent however, that any of the approvals, consents, or
waivers referred to in Section 1.2(b) have not been obtained
as of the Closing, or until the impediments to transfer
referred to in Section 1.2(b) are resolved, Seller, at the
request of and expense of Buyer and without liability as to
Seller, shall, during the remaining term of such Interests,
use reasonable efforts, to (i) obtain the consent of any such
third party; (ii) cooperate with Buyer in any reasonable and
lawful arrangements designed to provide the benefits of such
Interests to Buyer so long as Buyer fully cooperates with
Seller in such arrangements and promptly reimburses Seller for
all payments made by Seller in connection therewith and
indemnifies Seller with respect thereto; and (iii) enforce, at
the request of Buyer and at the expense and for the account of
Buyer, any rights of Seller arising from such Interests
against such issuer thereof or the other party or parties
thereto (including the right to elect to
Page 4
terminate any such Interests in accordance with the terms
thereof upon the advice of, and indemnification from Buyer).
No liability shall attach to Seller and no adjustment shall be
made to the Purchase Price if waivers or consents cannot be
obtained.
1.3 Obtaining Permits and Licenses. Seller will assign,
transfer or convey to Buyer at the Closing those permits and licenses
which are held or used by Seller in connection with the Business and
can be assigned without having to obtain the consent of any third party
with respect thereto; provided, however, that Seller without any
liability will reasonably cooperate with Buyer in obtaining any third
party consents necessary to the assignment or transfer of any other
permits or licenses used or held by Seller in connection with the
Business which are so assignable or transferable. Buyer shall assume
all costs associated with the assignment or transfer of permits and
licenses.
1.4 Certain Liabilities and Litigation Assumed by Buyer.
Effective as of the Closing, Buyer shall, without any further
responsibility or liability of or recourse to Seller, or its directors,
shareholders, affiliates, officers, employees, agents, consultants,
representatives, successors, transferees or assignees, absolutely and
irrevocably assume and shall be solely liable and responsible for, any
and all claims, liabilities and obligations of Seller, together with
all litigation at Buyer's expense as plaintiff or defendant in such
litigation, with respect to the Business or the Assets as they exist as
of the Closing Date and which without limitation are set forth on
Schedule 1.4, except as otherwise specifically set forth herein on
Schedule 1.4 (the "Assumed Liabilities").
Page 5
1.5 Cancellation of Obligations from February Agreement. As an
inducement for Seller to enter into this Agreement and as part of the
Purchase Price;
(a) H & H, EH and RH agree that they shall cancel all
obligations of Seller evidenced by a certain promissory note
("February 1995 Promissory Note") executed by Seller and
attached hereto;
(b) RH and EH agree that the employment agreement
between Seller and RH and EH (attached hereto) shall be
cancelled and all obligations of either party shall be waived;
(c) H & H, RH and EH agree that they shall cancel all
obligations of Seller with respect to the lease for premises
with B & G Properties attached hereto, upon a pro rata basis
from April 15, 1996;
(d) Haas Sand and Gravel, Inc. agrees that the lease
obligation of Seller to Haas Sand and Gravel, Inc. for a 580
Case Backhoe shall be waived;
(e) Buyer agrees to assume all obligations with
respect to the employment agreement with James Kerr.
1.6 Waiver of Non-Compete Obligations from February Agreement.
As part of this transaction, Seller shall waive and cancel the
non-compete obligation of H&H, EH and RH from the February Agreement.
2. Purchase Price.
2.1 Purchase Price.
(a) The purchase price for the Assets shall be One
Million Nine Hundred and Seven Thousand and Twenty-One Dollars
($1,907,021.00) consisting of
Page 6
(i) Six Hundred and Eighty-One Thousand Dollars payable in
cash ($681,000.00) (the "Closing Amount"), (ii) Six Hundred
Thousand Dollars ($600,000.00) payable by the issuance by the
Buyer of its promissory note ("April 1996 Promissory Note"),
in substantially the form of Exhibit "A" attached hereto,
which promissory note shall be secured by the pledge of 499
shares of the Buyer's Common Stock pursuant to the terms of a
Stock Pledge Agreement, in substantially the form of Exhibit
"B" attached hereto, (iii) the assumption by the Buyer of the
Assumed Liabilities, (iv) the cancellation by H & H, EH and RH
of the promissory note obligation of Seller of Four Hundred
Thirty-Six Thousand Nine Hundred Twenty-One Dollars
($436,921.00) (See Section 1.5(a)), (v) the cancellation by H
& H, EH and RH of the obligations pursuant to the employment
agreement in the amount of One Hundred Thousand Dollars
($100,000.00) (See Section 1.5(b)), (vi) the cancellation by H
& H, EH and RH of the lease obligations for real estate of
Sixty-Two Thousand Seven Hundred Dollars ($62,700.00) (see
Section 1.5(c)), and (vi) the cancellation by H & H, EH and RH
of lease the obligations for a backhoe of Twenty-Six Thousand
Four Hundred Dollars ($26,400.00) (see Section 1.5(d)) (the
"Purchase Price").
(b) Buyer agrees to the specific allocation of
purchase price as outlined by Seller in Schedule 2.1(b).
2.2 Payment of Purchase Price.
(a) At the Closing Buyer shall pay to Seller an
amount equal to Six Hundred and Fifty Thousand Dollars
($650,000.00) (the "Closing Amount") by wire transfer of
immediately available funds to an account designated by
Seller. The
Page 7
cancellation of obligations and other portions of the Purchase
Price shall be evidenced by appropriate documents of transfer.
(b) To the extent the accounts payable at the time of
Closing are more than One Hundred Thousand Dollars
($100,000.00) greater than the accounts receivable, the amount
in excess of One Hundred Thousand Dollars ($100,000.00) (the
"Excess") shall at the sole option of Seller be subtracted
from the Closing Amount or be added to the cash balances sold
to Buyer.
3. Closing.
3.1 Date of Closing. The Closing shall take place at the
offices of Atlas, Pearlman, Trop & Borkson, P.A. located at 200 East Las Olas
Boulevard, Suite 1900, Fort Lauderdale, Florida 33301 (or at such other place as
the parties may agree in writing) on April 19, 1996, or such other date mutually
designated by Seller and Buyer, but in no event later than ten (10) business
days after the date of this Agreement. The date on which the Closing is held is
referred to in this Agreement as the "Closing Date." At the Closing, the parties
shall execute and deliver the documents referred to in Section 8.
3.2 Termination.
(a) This Agreement may be terminated as follows:
(i) by mutual written agreement executed by
Seller and Buyer at any time prior to the Closing;
Page 8
(ii) by Buyer at any time prior to the
Closing, if any, of the conditions specified in
Section 7.1 shall not have been satisfied or waived
in writing by Buyer on or before Closing; or
(iii) by Seller at any time prior to the
Closing, if any, of the conditions specified in
Section 7.2 shall not have been satisfied or waived
in writing by Seller on or before Closing.
(b) Upon such termination neither the parties shall
have any liability or further obligation arising out of this
Agreement except for any liability resulting from its
breach of this Agreement prior to termination. Buyer's
obligations under Section 6.1 shall survive the termination of
this Agreement.
4. Representations and Warranties of Seller. Seller represents and
warrants to Buyer, and only as it relates to Sections 4.1, 4.2 and 4.3,
Aquagenix represents and warrants to Buyer, that:
4.1 Organization, Standing and Authority of Seller. Seller is
a corporation duly organized, validly existing and in good standing
under the laws of the state of its incorporation and has full corporate
power and authority to enter into and perform this Agreement. Seller is
qualified to do business and is in good standing in each jurisdiction
in which the nature of its business or the properties owned or leased
by it requires qualification, except where the failure to be so
qualified or in good standing would not have a material adverse effect
upon the businesses, operations, assets or financial condition of the
Business ("Material Adverse Effect").
Page 9
4.2 Authorization of Agreement. The execution, delivery and
performance of this Agreement by Seller have been duly authorized by
all necessary corporation action of Seller and this Agreement
constitutes the valid and binding obligation of Seller enforceable
against it in accordance with its terms, except to the extent
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights in general and subject to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
4.3 Consents of Third Parties. The execution, delivery and
performance of this Agreement by Seller will not (i) violate or
conflict with the constitutional documents of Seller or (ii) to the
knowledge of Seller constitute a violation of any law, regulation,
order, writ, judgment, injunction or decree applicable to Seller.
Seller assumes no obligation other than to use its best efforts to
assist Buyer after Closing to obtain third party consents and
approvals, if any.
4.4 Taxes. With respect to the operations of the Business
prior to the Closing, Seller has filed or will file on a timely basis
all tax returns, reports and declarations in connection with any
federal, state or local tax returns, reports and declarations in
connection with any federal, state or local tax required to be filed,
and Seller has paid or will pay all taxes due and payable in accordance
with such tax returns, reports and declarations.
4.5 Litigation; Compliance with Laws.
Page 10
(a) There are no judicial or administrative actions,
proceedings or investigations pending or, to the best of
Seller's knowledge, threatened, that question the validity of
this Agreement or any action taken or to be taken by Seller in
connection with this Agreement. There is no litigation,
proceeding or governmental investigation pending or, to the
best of Seller's knowledge, threatened, or any order,
injunction or decree outstanding, against Seller that, if
adversely determined, would individually or in the aggregate,
have a material adverse effect on Seller's ability to perform
its obligations under this Agreement.
(b) Except as disclosed in Schedule 1.4, there are no
judicial or administrative actions or proceeding pending
against Seller or, to the best knowledge of Seller, threatened
against Seller with respect to the Business.
4.6 Real Property. Schedule 1.1(b) sets forth a list of all of
the real property leases in effect as of the date hereof with respect
to the Business under which Seller is a lessee (collectively, the
"Leased Property"). Seller has made available to Buyer true, correct
and complete copies of all such leases, including all amendments,
modifications and renewals thereof.
4.7 Equipment. Except as provided on Schedule 4.7, Seller has
good title to, or holds by valid and existing lease, all of the
Equipment, free and clear of all Liens, other than (i) imperfections of
title, easements, pledges, charges, restrictions and encumbrances,
including without limitation, landlord's liens, mechanics' liens,
repairmen's liens and other similar liens, if any, that do not
materially detract from the value of the property subject thereto or
materially interfere with the manner in which it is currently
Page 11
being used in the Business or materially impair the operations of the
Business, and (ii) taxes and general and special assessments not in
default and payable without penalty or interest (liens of the type
referred to in clauses (i) through (iii) above being hereinafter
referred to as "Permitted Liens").
4.8 No Proprietary Rights. Seller is not a defendant in any
claim, suit, action or proceeding which involves a claim of
infringement of any Proprietary Rights, and does not have any knowledge
of any existing infringement by any other person of any Proprietary
Right.
4.9 Insurance. Listed on Schedule 4.9 are all insurance
policies pursuant to which Seller is insured as of the date of this
Agreement.
5. Representations and Warranties of Buyer. Buyer represents and
warrants to Seller as follows:
5.1 Buyer's Organization. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of New
Jersey and has the full corporate power and authority to enter into and
to perform this Agreement.
5.2 Authorization of Agreement. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by Buyer have been duly authorized by all necessary
corporate action of Buyer and this Agreement constitutes the valid and
binding obligation of Buyer enforceable against it in accordance with
its terms, except to the extent enforceability may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement
of creditors'
Page 12
rights in general and subject to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
5.3 Consents of Third Parties. The execution, delivery and
performance of this Agreement by Buyer will not (i) violate or conflict
with the constitutional documents of Buyer; (ii) conflict with, or
result in the breach or termination of, or constitute a default under
(whether with notice or lapse of time or both), or accelerate or permit
the acceleration of the performance required by, any indenture,
mortgage, lien, lease, agreement, commitment or other instrument or any
order, judgment or decree, to which Buyer is a party or by which it or
its properties are bound; or (iii) constitute a violation of any law,
regulation, order, writ, judgment, injunction or decree applicable to
Buyer, other than violations, conflicts, breaches, terminations,
accelerations and defaults specified in the foregoing clauses (ii) and
(iii) which could not reasonably be expected to have a material adverse
effect on Buyer's ability to perform its obligations under this
Agreement.
5.4 Litigation. There are no judicial or administrative
actions, proceedings or investigations pending or, to the best of
Buyer's knowledge, threatened, that question the validity of this
Agreement or any action taken or to be taken by Buyer in connection
with this Agreement. There is no litigation, proceeding or governmental
investigation pending or, to the best of Buyer's knowledge, threatened,
or any order, injunction or decree outstanding, against the Buyer that,
if adversely determined, would have a material adverse effect upon
Buyer's ability to perform its obligations under this Agreement.
Page 13
5.5 Financing. As of the Closing Date, after giving effect to
the consummation of the transaction contemplated hereby and the
incurrence of any indebtedness in connection therewith: (i) Buyer will
be "solvent"; (ii) the cash flow from the operations of Buyer will be
sufficient to provide cash necessary to repay its indebtedness,
including indebtedness incurred in connection with the transaction
contemplated by this Agreement, as all such indebtedness matures; (iii)
Buyer will not have indebtedness beyond its ability to pay as such
indebtedness matures; (iv) Buyer does not intend to, or believe that it
will, incur indebtedness beyond its ability to pay such indebtedness as
it matures; (v) in consummating the transaction contemplated by this
Agreement, Buyer does not intend to disturb, delay, hinder or defraud
either present or future creditors or other persons to which Buyer is
or will become, on or after the Closing Date, indebted; (vi) Buyer
will not be engaged in a business or transaction for which the assets
remaining constitute unreasonably small capital with which to operate;
and (vii) Buyer is not "insolvent" as that term is defined in the
United States Bankruptcy Act and/or the Uniform Fraudulent Transfer
Act. For purposes hereof, "solvent" means that the sum of the value of
the person's or entity's assets, at both fair value or fair saleable
value, exceeds its indebtedness and other probable liabilities. For
purposes hereof, "indebtedness" means all obligations and liabilities
of the person or entity, whether matured or unmatured, liquidated or
unliquidated, disputed or undisputed, secured or unsecured,
subordinated, absolute, fixed or contingent, including, without
limitation, any guarantee of indebtedness of a third party, and whether
or not reduced to judgment.
Page 14
5.6 Access to Information and Investigation. Prior to the date
hereof, Buyer, together with RH and EH has had the opportunity to make
such investigation of the business and properties of Seller as Buyer
may desire, and Seller has given to Buyer and its representatives the
property, books, commitments, agreements, records, files and personnel
of Seller, and Seller has furnished to Buyer during that period all
copies of documents and information concerning the Business as Buyer
may reasonably request subject to applicable law.
5.7 "As Is". Except for the representation and warranties made
by Seller herein and subject to the Schedule Buyer is acquiring the
Business and the Assets "As Is".
6. Further Agreements of the Parties.
6.1 Conduct of the Business Pending the Closing. Until the
Closing, Seller shall operate its business in the ordinary course.
6.2 Employee and Employee Benefit Matters at Closing. On the
Closing Date, Buyer agrees to employ and/or continue to provide benefit
entitlements for (as the case may be) the Employees at the same
compensation levels and on substantially the same terms and conditions
of employment in effect as of the Closing Date. Buyer hereby agrees to
indemnify Seller from any and all termination or severance liability
(including, without limitation, any liability related to or arising out
of the Worker Adjustment and Retraining Notification Act, 29 U.S.C.
2101 et seq. and any applicable state and local laws) with respect to
employees of Seller who are employed by Seller as of the Closing Date.
It is further agreed that Seller may, at its sole discretion, terminate
Page 15
the employment of Laura Paul, Carl Jacot and/or Carmen Colanero prior
to Closing, and in such event, Seller shall be responsible for all
liabilities, if any, in connection with such termination, including
severance pay.
6.3 Other Action. Each of the parties shall use its best
efforts to cause the fulfillment at the earliest practicable date but,
in any event, prior to the Closing Date, of all of the conditions to
their respective obligations to consummate the transactions under this
Agreement.
6.4 Notices. Each party shall promptly notify the other party
in writing of, and furnish to such party any information that such
party may reasonably request with respect to, the occurrence of any
event or the existence of any state of facts that would (a)
result in the party's representations and warranties not being true if
they were made at any time prior to or as of the Closing Date, or (b)
impair the party's ability to perform its obligations under this
Agreement.
6.5 Governmental Filings. As promptly as practicable after the
execution of this Agreement, each party shall, in cooperation with the
other, but at its own expense, file any reports or notifications and
pay any fees that may be required to be paid by it under applicable law
including filings under the HER Act with the Federal Trade Commission
and the Antitrust Division of the Department of Justice, and shall
furnish to the other all such information in its possession as may be
necessary for the completion of the reports or notifications to be
filed by the other. Each party will use its good-faith best efforts to
obtain any early termination of the applicable waiting period,
Page 16
and shall promptly make any further filings pursuant thereto that may
be necessary, proper or advisable.
6.6 Expenses. Except as otherwise specifically provided in
this Agreement, Buyer and Seller shall bear their own respective
expenses incurred in connection with this Agreement and in connection
with all obligations required to be performed by each of them under
this Agreement.
6.7 Publicity. Buyer must receive written approval from Seller
prior to issuing any press release with regard to this transaction and
Seller requires no approvals prior to issuing any press release with
regard to this transaction.
6.8 Transfer Taxes. Any sales taxes, real property transfer
taxes recording fees or any other taxes payable inclusive of
documentary taxes in the approximate amount of Three Thousand Five
Hundred Dollars ($3,500.00) as a result of the sale of the Assets shall
be paid by Buyer.
6.9 Supplement to Disclosures. For purposes of determining the
accuracy of the representations and warranties of Seller contained in
Article 4 and the fulfillment of the conditions precedent set forth in
Section 7.1(a), the Schedules delivered by Seller shall be deemed to
include only that information contained therein on the date of this
Agreement and as the same may be amended or supplemented by Seller with
Buyer's consent (which shall not be unreasonably withheld) prior to the
Closing Date.
6.10 Preservation of Records. Buyer agrees, at its own expense
that it (a) shall preserve and keep the records of Seller for a period
of seven years form the Closing, or for any longer periods as may be
required by any government agency or
Page 17
ongoing litigation, and (b) shall make such records available to Seller
as may be reasonably required by Seller. In the event Buyer wishes to
destroy such records after the time specified above, it shall first
give sixty (60) days' prior written notice to Seller and Seller shall
have the right at its option and expense, upon prior written notice
given to Buyer within that sixty (60) day period, to take possession of
the records within ninety (90) days after the date of Seller's notice
to Buyer.
6.11 Certain Post-Closing Assistance by the Buyer. Buyer
agrees to cause the appropriate personnel, at no cost or expense to
Seller, to prepare all customary accounting, tax, employment,
benefits-related and similar reports for Seller for periods up to the
Closing Date which are reasonably requested by Seller.
6.12 Post Closing Assumption of Litigation. In defending the
interests of Seller or the interests of the Business for which Buyer
has assumed responsibility, Buyer at its own cost and expense may
settle or compromise any claim provided that Seller does not sustain
any loss or expense.
7. Conditions of Closing.
7.1 Conditions Precedent to Obligations of Buyer. The
obligation of Buyer to consummate the purchase under this Agreement is
subject to the fulfillment, prior to or at the Closing, of each of the
following conditions (any or all of which may be waived by Buyer):
(a) all representations and warranties of Seller
contained in this Agreement shall be true and correct in all
material respects, at and as of the time of the Closing with
the same effect as though made again at, and as of, that time;
Page 18
(b) Seller shall have performed and complied in all
material respects with all obligations and covenants required
by this Agreement to be performed or complied with by Seller
prior to or at the Closing, including the delivery to Buyer
prior to Closing of all Schedules required pursuant hereto,
except for Schedules 1.1(f) and 1.1(g) which shall be
delivered at Closing and shall be attached hereto and made a
part hereof at the time of Closing along with all Schedules
pursuant to this Agreement;
(c) no provisions of any applicable law or regulation
shall prohibit, and there shall not be in effect any
injunction or restraining order issued by a court of competent
jurisdiction in any action or proceeding against the
consummation of the sale and purchase of the Assets pursuant
to this Agreement.
7.2 Conditions Precedent to Obligations of Seller. The
obligation of Seller to consummate the sale under this Agreement is
subject to the fulfillment, prior to or at the Closing, of each of the
following conditions (any or all of which may be waived by Seller):
(a) all representations and warranties of Buyer
contained in this Agreement shall be true and correct in all
material respects at and as of the time of the Closing with
the same effect as though made again at, and as of, that time;
(b) Buyer shall have performed and complied in all
material respects with all obligations and covenants required
by this Agreement to be performed or complied with by Buyer
prior to or at the Closing;
(c) no provision of any applicable law of regulation
shall prohibit, and there shall not be in effect any
injunction or restraining order issued by a court of
Page 19
competent jurisdiction in any action or proceeding against the
consummation of the sale and purchase of the Assets pursuant
to this Agreement.
8. Documents to be Delivered at the Closing.
8.1 Documents to be Delivered by Seller. At the Closing,
Seller shall deliver, or cause to be delivered, to Buyer the following:
(a) one or more executed deeds, bills or sale,
instruments of assignment or certificates of title, dated the
Closing Date, transferring to Buyer all of Seller's right,
title and interest in and to the Assets together with
possession of the Assets;
(b) an assignment and assumption of the assignable
Contracts;
(c) a copy of resolutions of the board of directors
and shareholder of Seller and Aquagenix authorizing the
execution, delivery and performance of this Agreement by
Seller and a certificate of the secretary or assistant
secretary of Seller, dated the Closing Date, that such
resolutions were duly adopted and are in full force and
effect;
(d) the Mutual Release;
(e) such other certificates, documents and
instruments as Buyer may have reasonably requested in
connection with the transaction contemplated hereby.
8.2 Documents to be Delivered by Buyer. At the Closing, Buyer
shall deliver to Seller the following:
Page 20
(a) payment and evidence of the wire transfer, made
as follows: to Aquagenix, Inc., BankAtlantic, 1750 East
Sunrise Boulevard, Fort Lauderdale, Florida, 33304; ABA
#267083763, Account #0055937302;
(b) February 1995 Promissory Note marked satisfied;
(c) cancellation of Employment Agreement;
(d) documents evidencing the assignment and
assumption of the assignable Contracts and the assumption of
the Assumed Liabilities in accordance with Section 1.4, as
required;
(e) documents evidencing agreement by EH and RH not
to sell more than 20,000 shares of Aquagenix, Inc. during any
three month period;
(f) a copy of the resolutions of the board of
directors of Buyer authorizing the execution, delivery and
performance of this Agreement by Buyer, and a certificate of
its secretary or assistant secretary, dated the Closing Date,
that such resolutions were duly adopted and are in full force
and effect;
(g) a Solvency Certificate;
(h) the April 1996 Promissory Note, in substantially
the form as Exhibit "A" attached hereto;
(i) the Stock Pledge Agreement, in substantially the
form as Exhibit "B" attached hereto;
(j) the Mutual Release;
Page 21
(k) releases with respect to the various leases,
promissory note, employment agreement and all other matters
not otherwise specified in this Agreement; and
(l) such other certificates, documents and
instruments as Seller may have reasonably requested in
connection with the transaction contemplated hereby.
9. Indemnification and Related Matters.
9.1 Indemnification.
(a) Subject to the provisions of this Article 9,
Seller and Aquagenix, Inc. agrees to indemnify and hold Buyer
and its affiliates, predecessors, successors and assigns (and
their respective officers, directors, employees and agents)
harmless from and against all actions, suits, proceedings,
claims, demands, assessments, judgments, damages, costs and
expenses, including reasonable attorneys' fees, arising or
resulting from the following:
(i) a breach of any representation or
warranty on the part of Seller under the terms of
this Agreement or any other document executed by
Seller pursuant hereto;
(ii) non-fulfillment of any agreement on the
part of Seller under the terms of this Agreement or
any other document executed by Seller pursuant
hereto; and
(iii) environmental claims for work
performed by Seller during the period February 15,
1995 to the date of Closing.
Page 22
(b) Subject to the provisions of this Article 9,
Buyer agrees to indemnify and hold Seller, Aquagenix and its
affiliates, predecessors, successors and assigns (and their
respective officers, directors, employees and agents) harmless
from and against all actions, suits, proceedings, claims,
demands, assessments, judgments, damages, costs and expenses,
including reasonable attorneys' fees arising or resulting from
the following:
(i) a breach of any representation or
warranty on the part of Buyer under the terms of this
Agreement or any other documents executed by Buyer
pursuant hereto;
(ii) non-fulfillment of any agreement on the
part of Buyer under the terms of this Agreement or
any other document executed by Buyer pursuant hereto;
and
(iii) any and all actions, suits and
proceedings commenced or any other claims or demand
asserted against Seller with respect to the Business
(including product liability and product warranty
claims).
9.2 Determination of Damages and Related Matters. Seller and
Buyer agree that, except as specifically set forth in this Agreement
(including the Schedules and Exhibits and any other documents executed
pursuant hereto), neither party (including its representatives) has
made or shall have liability for any representation or warranty,
express or implied, in connection with the transactions contemplated by
this Agreement, including, in the case of Seller and its
representatives, any representation or warranty, express or implied, as
to the accuracy or completeness of any information
Page 23
regarding the Business. Buyer acknowledges and agrees that Buyer and
its representatives have the experience and knowledge to evaluate the
business, financial condition, assets and liabilities of the Business;
that Buyer and its representatives have had access to such of the
information and documents and to such of the real property, fixtures
and tangible personal property of the Business as Buyer and its
representatives shall have requested to see and/or review; that Buyer
and its representatives have had a full opportunity to meet with
appropriate management and employees of Seller to discuss the Business
and Assets; and that, in determining to acquire the Business and
Assets, Buyer has made its own investigation into, and based thereon
Buyer has formed an independent judgment concerning, the Business and
the Assets. It is therefore expressly understood and agreed that,
except as specifically set forth in this Agreement, Buyer accepts the
condition of the Assets "AS IS, WHERE IS" without any representation,
warranty or guarantee, express or implied as to merchantability,
fitness for a particular purpose or otherwise as to the condition,
size, extent, quantity, type or value of such property.
9.3 Time and Manner of Certain Claims. Except as otherwise
expressly provided herein, Seller and Buyer shall be liable for damages
for breach of warranty set forth in Articles 4 or 5 of this Agreement,
respectively, and asserted under Section 9.1(a)(i) or Section
9.1(b)(i), respectively, only to the extent that notice of a claim
therefor complying with the requirements of this Section is asserted by
the other in writing and delivered prior to the expiration of a period
ending three (3) months from the Closing Date. Any notice of a claim
shall state specifically the facts giving rise to the alleged
Page 24
basis for the claim and the amount of liability asserted against the
other party by reason of the claim.
9.4 Defense of Claims by Third Parties. If any claim is made
against Buyer or Seller that, if sustained, would give rise to a
liability of the other under this Agreement, Buyer or Seller, as the
case may be, shall promptly cause notice of the claim to be delivered
to the other and shall afford the other and its counsel, at the other's
sole expense, the opportunity to defend or settle the claim. If such
notice and opportunity are not given to the other, of if any claim is
compromised or settled without its consent, no liability shall be
imposed upon the other by reason of such claim.
10. Miscellaneous and Other Matters.
10.1 Bulk Sales Compliance. Buyer hereby waives compliance by
Seller with the provisions of the Bulk Sales Law of any state which may
be applicable to this transaction. In consideration of such waiver,
Seller agrees to defend and indemnify Buyer against and hold it
harmless from any and all loss, liability, claims, damages or expense
(including reasonable attorneys' fees) arising out of or resulting from
such noncompliance, provided that such the loss, liability, claim,
damage or expense was not caused by Buyer's conduct of the Business.
10.2 Finders. Buyer and Seller respectively represent and
warrant that they have not employed or utilized the services of any
broker or finder in connection with this Agreement or the transactions
contemplated by it. Seller shall indemnify and hold Buyer harmless from
and against any and all claims for brokers' commissions made by any
party as a result of this Agreement and the transaction contemplated
hereunder to
Page 25
the extent that any such commission was incurred, or alleged to have
been incurred, by, through or under Seller. Buyer shall indemnify and
hold Seller harmless from and against any and all claims for brokers'
commissions made by any party as a result of this Agreement and
transaction contemplated hereunder to the extent that any such
commission was incurred, or alleged to have been incurred, by, through
or under Buyer.
10.3 Entire Agreement. This Agreement (with its Schedules and
Exhibits) together with the existing confidentiality agreement between
the parties contains, and is intended as, a complete statement of all
of the terms of the arrangements between the parties with respect to
the matters provided for, supersedes andy previous agreements and
understandings between the parties with respect to those matters
(except as otherwise provided in Section 6.1), and cannot be changed or
terminated orally.
10.4 Jurisdiction and Governing Law. Seller and Buyer each
hereby consent to personal jurisdiction in any action brought with
respect to this Agreement and the transactions contemplated hereunder
in any federal or state court within the State of New Jersey and agree
that service of process may be accomplished pursuant to the provisions
of Section 10.6 below. This Agreement will be governed by and construed
in accordance with the law of the State of New Jersey without giving
effect to conflicts of law principles thereof.
10.5 Schedules; Tables of Contents and Headings. Any matter
disclosed on any Schedule to this Agreement shall be deemed to have
been disclosed on all other Schedules to this Agreement to the extent
that it should have been disclosed on such other Schedule. The table of
contents and section headings of this Agreement and titles
Page 26
given to Schedules to this Agreement are for reference purposes only
and are to be given no effect in the construction of interpretation of
this Agreement.
10.6 Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed given when delivered
personally (including by confirmed legible telecopier transmission) or
mailed by certified mail, return receipt requested, to the parties at
the principal office or resident address for each (or to such address
as a party may have specified by notice given to the other party
pursuant to this provision).
10.7 Separability. In the event that any provision hereof
would, under applicable law, be invalid or enforceable in any respect,
such provision shall be construed by modifying or limiting it so as to
be valid and enforceable to the maximum extent compatible with, and
permissible under, applicable law. The invalidity or unenforceability
of any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement which shall
remain in full force and effect.
10.8 Waiver. Any party may waive compliance by another with
any of the provisions of this Agreement. No waiver of any provision
shall be construed as a waiver of any other provision. Any waiver must
be in writing.
10.9 Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties and their
respective successors and permitted assigns. Nothing in this Agreement
shall create or be deemed to create any third party beneficiary rights
in any person or entity not a party to this Agreement. No assignment
Page 27
of this Agreement or of any rights or obligation hereunder may be made
by either party (by operation of law or otherwise) without the prior
written consent of the other and any attempted assignment without the
required consent shall be void; provided, however, that no such consent
shall be required of Buyer or Seller to assign part or all of its
rights under this Agreement to one or more of its subsidiaries or
affiliates, but no such assignment by Buyer or Seller of its rights or
obligations hereunder shall relieve Buyer or Seller of any of its
obligations under any of such Agreements to the other.
10.10 Best Knowledge. As used in this Agreement "to the best
of Seller's knowledge" or words of similar import shall mean actual
knowledge possessed by an executive officer of Seller and "to the best
of Buyer's knowledge" or words of similar import shall mean actual
knowledge possessed by an executive officer of Buyer.
10.11 Restrictions on Transferability. H & H, RH, EH and
Seller have agreed that the 219,000 shares of Common Stock of Aquagenix
received pursuant to the February Agreement may not be sold or
transferred by H & H, RH, EH unless in accordance with Rule 144 of the
Securities Act of 1933, as amended, or other applicable exemptions from
registration of securities, and any such sales or transfers shall be
made of no more than 20,000 shares per every three month quarter.
10.12 Payment by Seller. At Closing Seller shall pay Haas Sand
and Gravel Twenty-Six Thousand Four Hundred Dollars ($26,400.00) as a
Closing adjustment.
Page 28
10.13 Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original, but which together
shall constitute one and the same Agreement.
10.14 General Releases. Except for any claims or liabilities
arising from representations and warranties set forth herein as well as
obligations and undertakings made or assumed by the parties herein, the
parties shall exchange a mutual release in the form of Exhibit "C"
("Mutual Release") with respect to the February Agreement and all other
matter arising prior to the date hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
HAAS ENVIRONMENTAL SERVICES, INC. HEART ENVIRONMENTAL SERVICES, INC.
By: /s/ Andrew Chasler By: /s/ Eugene M. Haas
Its: President Its: President
H & H INVESTMENT CORP. HAAS AND AND GRAVEL, INC.
By: /s/ Eugene M. Haas By: /s/ Robert S. Haas
Its: President Its: ???
AQUAGENIX, INC. /s/ Eugene M. Haas
Eugene M. Haas
By: /s/ Andrew Chasler
Its: President /s/ Robert E. Haas
Robert E. Haas
Page 29
BILL OF SALE
Haas Environmental Services, Inc., a New Jersey corporation ("Seller")
for good and valuable consideration pursuant to the terms and conditions of the
Asset Purchase Agreement of even date herewith ("Agreement"), the receipt and
sufficiency of which is hereby acknowledged, hereby sells, transfers, assigns,
conveys and delivers to Heart Environmental Services, Inc., a New Jersey
corporation ("Purchaser") and Purchaser hereby purchases, accepts and acquires
from Seller, all of the Assets of the Seller as defined in the Agreement
(hereinafter referred to collectively as the "Assets").
TO HAVE AND TO HOLD all of the Assets hereby sold, transferred,
assigned and conveyed unto Purchaser, its successors and assigns, to itself, and
their own use and behalf forever.
AND, for the consideration aforesaid, Seller hereby constitutes and
appoints Purchaser, its successors and assigns, the true and lawful attorney or
attorneys of Seller with full power of substitution, for Seller and in its name
and stead or otherwise, by and on behalf of and for the benefit of Purchaser,
its successors and assigns, to demand and receive from time to time any and all
of the Assets hereby assigned, transferred and conveyed, and to give receipts
and releases for and in respect of the same and any part thereof, and from time
to time to institute and prosecute in the name of Seller or otherwise, but at
the expense and for the benefit of Purchaser, its successors and assigns, any
and all proceedings at law, in equity or otherwise which Purchaser, its
successors and assigns, may deem proper in order to collect, assert, or enforce
any claim, right or title of any kind in and to the Assets hereby assigned,
transferred and conveyed and to defend and compromise any and all actions, suits
or proceedings in respect of any of the Assets and to do all such acts and
things in relation thereto as Purchaser, its successors or assigns, shall deem
desirable; and Seller hereby declares that the appointment made and the powers
hereby granted are coupled with an interest and are and shall be irrevocable by
Seller in any manner or for any reason.
AND, for the consideration aforesaid, Seller for itself and its
successors and assigns has covenanted and by this Bill of Sale does covenant
with Purchaser, its successors and assigns, that it and its successors and
assigns, will do, execute and deliver, or will cause to be done, executed and
delivered, all such further acts, transfers, assignments, conveyances, powers of
attorney and assurances, for the better assuring, conveying and confirming unto
Purchaser, its successors and assigns, all and singular the entire right, title
and interest in the Assets hereby sold, transferred, assigned and conveyed as
Purchaser, its successors or assigns, shall reasonably require.
AND, for the consideration aforesaid, Seller covenants and agrees that
in the event that (i) any property, assets or rights covered in this Bill of
Sale cannot be transferred or assigned by it without the consent of or notice to
a third party and in respect of which any necessary consent or notice has not as
of the date hereof been
Page 1
given or obtained, or (ii) any such property, assets or rights are
non-assignable in their nature and will not pass by this Bill of Sale, the
beneficial interest in and to the same will in any event pass to the Purchaser,
as the case may be; and the Seller covenants and agrees (a) to hold, and hereby
declares that it holds, such property assets or rights in trust for, and for the
benefit of, the Purchaser, (b) to use all reasonable means to obtain and to
secure such consent and give such notice as may be required to effect a valid
transfer or transfers of such property, assets or rights, and (c) to make or
complete such transfer or transfers as soon as reasonably possible.
AND, for the consideration aforesaid, Seller further agrees that it
will at any time and from time to time, at the request of the Purchaser, execute
and deliver to the Purchaser all other and further instruments reasonably
necessary to vest in the Purchaser the right, title and interest in or to any of
the Assets which this instrument purports to transfer to the Purchaser.
This Bill of Sale and the covenants and agreements herein contained
shall inure to the benefit of Purchaser, its successors and assigns, and shall
be binding upon Seller, its successors and assigns.
IN WITNESS WHEREOF, Seller has caused these presents to be executed as
of the 24th day of April, 1996.
HAAS ENVIRONMENTAL SERVICES, INC.
By: ________________________________
Andrew Chesler, President
STATE OF FLORIDA )
: SS
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this ____ day of
April, 1996 by Andrew Chesler, President of Haas Environmental Services, Inc.
who is personally known to me or have produced ____________________ as
identification and who did/did not take an oath.
Notary Public:
sign ______________________________
print ______________________________
My Commission Expires:
Page 2
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement is dated this 25th day of
April, 1996 (the "Effective Date"), by and between Haas Environmental Services,
Inc., a New Jersey corporation (the "Seller") and Heart Environmental Services,
Inc. (the "Purchaser") and relates to the assignment of rights, obligations and
understandings between the Seller and the Purchaser and the assumption of the
obligations and liabilities thereunder by the Purchaser.
R E C I T A L S
WHEREAS, in connection with the terms and conditions of the Asset
Purchase Agreement of even date herewith ("Agreement"), the Assets of the
Seller, as defined in the Agreement, are being conveyed, transfered, sold and
assigned to the Purchaser and the Assumed Liabilities of the Seller, as defined
in the Agreement, are being assumed by the Purchaser.
NOW THEREFORE, for good and valuable consideration pursuant to the
Agreement, the parties agree as follows:
1. The above recitals are true, correct, and are herein incorporated by
reference.
2. The Purchaser hereby agrees to assume all of the Assumed Liabilities in
connection with any and all Assets of the Seller and to fulfill all of the
responsibilities, commitments and obligations of the Seller thereunder. The
Purchaser further agrees to indemnify and hold the Seller harmless from any and
all claim, loss, damage, fine assessment, penalty, and other expenses, including
reasonable attorneys fees and costs, both at the trial and appellate level,
arising out the Assets.
3. The Purchaser shall assume, pay, perform and discharge all debts,
obligations, contracts, and liabilities of the Seller of any kind, character, or
description, whether accrued, absolute, contingent or otherwise (and regardless
of whether reflected or reserved against the Seller's balance sheet, books of
account, and records), all as they exist as of the date hereof.
4. This Agreement shall be governed by the laws of the State of Florida. This
Agreement may be signed in counterparts.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date written above.
Haas Environmental Services, Inc.
By: _______________________________
Andrew Chesler, President
Page 1
Heart Environmental Services, Inc.
By: _______________________________
Eugene M. Haas, President
STATE OF FLORIDA )
)SS:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this _____ day of
April, 1996, by Andrew Chesler, as President of Haas Environmental Services,
Inc., a New Jersey corporation, on behalf of the corporation. He or she is
personally known to me or has produced __________________ as identification and
did/did not take an oath.
Notary Public:
sign ______________________________
print______________________________
State of Florida at Large (Seal)
My Commission Expires:
STATE OF FLORIDA )
)SS:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this ____ day of
April, 1996, by Eugene M. Haas, as President of Heart Environmental Services,
Inc., a New Jersey corporation., on behalf of the company. He or she is
personally known to me or has produced ________________________ as
identification and did/did not take an oath.
Notary Public:
sign _______________________________
print_______________________________
State of Florida at Large (Seal)
My Commission Expires:
Page 2
GENERAL MUTUAL RELEASE
This General Mutual Release is made by and between Aquagenix, Inc., a
Delaware corporation ("Aquagenix"), Haas Environmental Services, Inc., a New
Jersey corporation ("Haas"), H&H Investment Corp., a New Jersey corporation
("H&H"), Haas Sand and Gravel, Inc., a New Jersey corporation ("HSGI"), Eugene
M. Haas ("EH") and Robert E. Haas ("RH") this 25th day of April, 1996.
1. Aquagenix and Haas, for and in consideration of the sum of Ten
($10.00), and other good and valuable considerations, received from H&H, HSGI,
EH and RH, the receipt whereof is hereby acknowledged, has remised, released and
forever discharged, and by this General Mutual Release does for its successors
and assigns, completely and totally remise and forever discharge H&H, HSGI, EH
and RH, and its successors, and assigns of and from any and all manner of action
and actions, cause and causes of actions, suits, debts, dues, sums of money,
accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, judgments,
extent, executions, claims and demands whatsoever, in law or in equity, which
against them it has ever had, now or by reason of any matter, cause or thing
whatsoever, from the beginning of the world to the date of this General Mutual
Release and more particularly by reason of all claims that were or could have
been asserted, or arising from the Asset Purchase Agreement dated February 28,
1996 by and between the parties to this General Mutual Release.
2. H&H, HSGI, EH and RH, for and in consideration of the sum of Ten
($10.00), and other good and valuable considerations, received from Aquagenix
and
Page 1 of 5
Haas, the receipt whereof is hereby acknowledged, has remised, released and
forever discharged, and by this General Mutual Release does for its successors
and assigns, completely and totally remise and forever discharge Aquagenix and
Haas, and its successors, and assigns of and from any and all manner of action
and actions, cause and causes of actions, suits, debts, dues, sums of money,
accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, judgments,
extent, executions, claims and demands whatsoever, in law or in equity, which
against them it has ever had, now or by reason of any matter, cause or thing
whatsoever, from the beginning of the world to the date of this General Mutual
Release and more particularly by reason of all claims that were or could have
been asserted, or arising from the Asset Purchase Agreement dated February 28,
1996 by and between the parties to this General Mutual Release.
Dated this 25th day of April, 1996.
In the Presence of:
HAAS ENVIRONMENTAL SERVICES,
INC., a New Jersey corporation
By:________________________________
Andrew Chesler, President
AQUAGENIX, INC., a Delaware H&H INVESTMENT, INC., a New
corporation New Jersey corporation
By:_____________________________ By:________________________________
Andrew Chesler, President and Eugene M. Haas, President
Chief Executive Officer
Page 2 of 5
HAAS SAND AND GRAVEL, INC.,
a New Jersey corporation
By:________________________________
Robert E. Haas, President
___________________________________ ___________________________________
ROBERT E. HAAS EUGENE M. HAAS
STATE OF FLORIDA )
)SS:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this _____ day of
April, 1996 by Andrew Chesler as President of Haas Environmental Services, Inc.,
a New Jersey corporation, on behalf of the corporation. He or she is personally
known to me or has produced ______________________ as identification and did/did
not take an oath.
Notary Public:
sign _______________________________
print________________________________
State of Florida at Large (Seal)
My Commission Expires:
STATE OF FLORIDA )
)SS:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this _____ day of
April, 1996 by Andrew Chesler as President and Chief Executive Officer of
Aquagenix, Inc., a Delaware corporation, on behalf of the corporation. He or she
is personally known to me or has produced ______________________ as
identification and did/did not take an oath.
Notary Public:
sign _______________________________
print________________________________
State of Florida at Large (Seal)
My Commission Expires:
Page 3 of 5
STATE OF FLORIDA )
)SS:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this _____ day of
April, 1996 by Eugene M. Haas as President of H&H Investment, Inc., a New Jersey
corporation, on behalf of the corporation. He or she is personally known to me
or has produced ______________________ as identification and did/did not take an
oath.
Notary Public:
sign _______________________________
print_______________________________
State of Florida at Large (Seal)
My Commission Expires:
STATE OF FLORIDA )
)SS:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this _____ day of
April, 1996 by Robert E. Haas as President of Haas Sand and Gravel, Inc., a New
Jersey corporation, on behalf of the corporation. He or she is personally known
to me or has produced ______________________ as identification and did/did not
take an oath.
Notary Public:
sign _______________________________
print_______________________________
State of Florida at Large (Seal)
My Commission Expires:
Page 4 of 5
STATE OF FLORIDA )
)SS:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this _____ day of
April, 1996 by ROBERT E. HAAS, who is personally known to me or who has produced
________________ as identification and who did/did not take an oath.
Notary Public:
sign _______________________________
print_______________________________
State of Florida at Large (Seal)
My Commission Expires:
STATE OF FLORIDA )
)SS:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this _____ day of
April, 1996 by EUGENE M. HAAS, who is personally known to me or who has produced
________________ as identification and who did/did not take an oath.
Notary Public:
sign _______________________________
print_______________________________
State of Florida at Large (Seal)
My Commission Expires:
Page 5 of 5
PROMISSORY NOTE
$600,000 Broward County, Florida
Dated as of: April 25, 1996
FOR VALUE RECEIVED, Heart Environmental Services, Inc., a New Jersey
corporation, having offices at One Linda Lane, Vincentown, N.J. ("Maker"),
promises to pay to Haas Environmental Services, Inc., a New Jersey corporation,
having offices at 6500 Northwest 15th Avenue, Fort Lauderdale, FL 33309, or
assigns ("Holder") the principal sum of Six Hundred Thousand and No/100 Dollars
($600,000.00), at the annual interest rate of nine Percent (9%) per annum for a
period of three years.
The interest and principal of this Note shall be payable as hereinafter
provided.
Interest for the first year commencing on the date hereof and
continuing until the first anniversary date hereof shall accrue and such accrued
interest in the amount of $67,500 shall be added to the first installment
payment. Quarterly payments shall be due to the Holder in equal installments of
Thirty-Eight Thousand and Five Hundred Dollars ($38,500), commencing fifteen
(15) months from the date of this Note and continuing on each consecutive
quarter thereafter for two years, after which the balance of principal with
interest thereon shall be due and payable, assuming timely payment of all prior
quarterly installments. To the extent any portion of the principal is unpaid at
the date of the third anniversary of this Note ("Maturity" or "Maturity Date"),
that sum plus accrued interest shall comprise a "balloon" principal payment due
and payable at Maturity.
This Note may be prepaid without premium or penalty, at any time, in
whole or in part with accrued interest to the date of prepayment. All payments
on this Note shall be applied first to the payment of accrued interest and the
balance shall be applied to the principal.
All installments of principal and interest are payable at such place as
the Holder hereof may, from time to time, designate in writing, in lawful money
of the United States of America. If any of said installments of principal and/or
interest shall not be paid within fifteen (15) days after due, or if Maker is in
default under any of its obligations under that certain "Assets Purchase
Agreement" of even date herewith between Maker and Holder, then the entire
unpaid principal sum shall become due and payable at once at the option of the
Holder of this Note.
Should it become necessary to collect the sum due under this Note
through an attorney, Maker hereby agrees to pay all costs of collection,
including a reasonable attorney's fee. Said reasonable attorney's fee shall
include fees for services rendered in all appellate proceedings. Maker waives
presentment for payment and protest for
Page 1
nonpayment of this Note, and trial by jury in connection with the enforcement of
collection of this Note.
This Note may not be assigned by the Holder at any time.
The terms of this Note are binding upon any successor in interest to
Maker.
This Agreement is secured by the pledge of 499 shares of the Common
Stock of the Maker, pursuant to the terms and conditions of a Stock Pledge
Agreement of even date herewith. This Agreement shall be construed pursuant to
the laws of the State of Florida.
Dated: April 25, 1996 MAKER:
Heart Environmental Services, Inc.
By:_________________________________
Eugene M. Haas, President.
Page 2
STOCK PLEDGE AGREEMENT
THIS AGREEMENT is made as of April 25, 1996, between Heart
Environmental Services, Inc., a New Jersey corporation having offices at
_________________________ ("Heart"), Eugene M. Haas ("Pledgor") and Haas
Environmental Services, Inc., a New Jersey corporation having offices at 6500
Northwest 15th Avenue, Fort Lauderdale, FL 33309, ( "Secured Party"). The
Secured Party is selling and delivering to the Pledgor all of its assets a
portion of the payment for which is to be made pursuant to a certain Promissory
Note in the aggregate principal amount of $600,000.00, of even date herewith
("Note").
To induce the Secured Party to make the sale and to accept the Note,
the Pledgor has agreed to secure, to the extent hereinafter set forth, the
performance of all of the obligations under the Note and has agreed that the
Secured Party be granted a valid first and prior lien on the Pledged Stock, as
hereinafter defined, and to that end the Pledgor and the Secured Party desire to
enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and covenants contained herein, the parties hereto agree as follows:
SECTION 1. Pledge. As collateral security for the due, punctual and
full performance of all obligations under the Note, the Pledgor hereby pledges,
hypothecates, assigns, transfers, sets over and delivers to the Secured Parties,
and grants to the Secured Parties for its benefit a security interest in 219,000
shares of common stock of the Pledgor owned by the Pledgor (the "Pledged
Stock"), registered in the name of the Pledgor, accompanied by a duly-executed
stock power endorsed in blank and in proper form for transfer, the receipt of
which stock certificate is hereby acknowledged by the Secured Parties. The
certificate for the Pledged Stock and the duly-executed stock power endorsed in
blank and in proper form for transfer, will be held by counsel for the Secured
Party, or other designee, until the Note is paid in full or otherwise satisfied.
SECTION 2. Event of Default. An Event of Default is defined as any one
or more of the following if not cured within fifteen (15) days following receipt
by the Pledgor of a written notice from the Secured Parties: (a) the failure of
the Pledgor to make payment of principal and/or of interest on the Note when and
as the same shall become due and payable or (b) the breach of any covenant of
the Pledgor contained herein or (c) the breach of any covenant of the Pledgor
contained in the Asset Purchase Agreement of even date herewith.
SECTION 3. Remedies on Default. Upon the occurrence of an Event of
Default, the Secured Parties shall have available to it the remedies provided
therefor by the Uniform Commercial Code of the State of Florida, Chapters 670
through 680, inclusive,
Page 1
as may be amended from time to time, of the Florida Statutes. At the option of
the Secured Party and in lieu of a sale of the Pledged Stock, such Pledged Stock
may be cancelled and such cancellation shall be liquidated damages.
SECTION 4. Successors and Assigns. All the terms, provisions,
conditions and covenants herein contained shall be binding upon and shall inure
to the benefit of the respective successors, assigns, heirs, estates, executors,
administrators, legal representatives and devisees of the Pledgor and the
Secured Parties.
SECTION 5. Further Assurances. The Pledgor agrees to do such further
acts and to execute and deliver such additional agreements and instruments as
the Secured Parties may at any time reasonably request in connection with the
administration or enforcement of this Pledge Agreement or related to the Pledged
Stock or any part thereof or in order to better assure and confirm unto the
Secured Parties their rights, powers and remedies hereunder.
SECTION 6. Termination. This Pledge Agreement shall terminate as to the
Pledgor when all of the Pledgor's obligations secured hereby have been fully
paid and performed at which time the Secured Parties shall cause to be
reassigned and redelivered to the Pledgor, against receipt, such of the Pledged
Stock (if any) to the Secured Parties hereunder as shall not have been sold,
released or otherwise applied by the Secured Parties pursuant to the terms
hereof and shall still be held by the Secured Parties hereunder, together with
appropriate instruments of reassignment and release.
SECTION 7. Amendment; Waiver.
(a) This Pledge Agreement may be amended, modified, waived or
terminated only by written agreement of the Pledgor and the Secured
Parties.
(b) No waiver by the Secured Parties of any breach or default
by the Pledgor hereunder shall be deemed a waiver of any other breach
or default.
SECTION 8. Counterparts. This Agreement may be executed in any number
of counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
SECTION 9. Governing Law. This Pledge Agreement, and the authority,
liabilities, duties and obligations of the Secured Parties hereunder, shall be
determined in accordance with and governed by the laws of the State of Florida.
SECTION 10. Section Headings. The Section headings in this Pledge
Agreement are for convenience only and shall not affect the construction hereof.
Page 2
SECTION 11. Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if (a)
delivered personally, (b) sent by nationally-recognized overnight courier or (c)
sent by certified mail, postage prepaid, return receipt requested, to the
address for each first above written or to such other address as the party to
whom notice is to be given may have furnished to each other party in writing in
accordance herewith. Any such communication shall be deemed to have been given
(i) when delivered if personally delivered, (ii) on the Business Day (as
hereinafter defined) after dispatch if sent by nationally-recognized, overnight
courier and (iii) on receipt, if sent by mail. As used herein, "Business Day"
means a day that is not a Saturday, Sunday or a day on which banking
institutions in Fort Lauderdale, Florida are not required to be open.
IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be fully executed and delivered as of the day and year first above
written.
SECURED PARTY:
Heart Environmental Services, Inc. Haas Environmental Services, Inc.,
a New Jersey corporation a New Jersey corporation
By: _______________________ By: _________________________
Eugene M. Haas, President Andrew Chesler, President
PLEDGOR
By: ________________________
Eugene M. Haas
STATE OF __________ )
)SS:
COUNTY OF _________ )
The foregoing instrument was acknowledged before me this 25th day of
April, 1996 by Eugene M. Haas who is personally known to me or who has produced
_________________ as identification and who did/did not take an oath.
Notary Public:
sign ________________________________
print________________________________
State of Florida at Large (Seal)
My Commission Expires:
Page 3
STATE OF __________ )
)SS:
COUNTY OF _________ )
The foregoing instrument was acknowledged before me this ____ day of
April, 1996 by Andrew Chesler who is personally known to me or who has produced
___________________ as identification and who did under penalty of perjury take
an oath and attest as to the foregoing.
Notary Public:
sign ________________________________
print________________________________
State of Florida at Large (Seal)
My Commission Expires:
STATE OF __________ )
)SS:
COUNTY OF _________ )
The foregoing instrument was acknowledged before me this 25th day of
April, 1996 by Eugene M. Haas, president of Heart Environmental Services, Inc.
who is personally known to me or who has produced _________________ as
identification and who did/did not take an oath.
Notary Public:
sign ________________________________
print________________________________
State of Florida at Large (Seal)
My Commission Expires:
Page 4
LOCK-UP AGREEMENT
This Lock-Up Agreement is made by and between Aquagenix, Inc., a
Delaware corporation (the "Company"), H&H Investment, Inc., a New Jersey
corporation ("Shareholder"), Eugene M. Haas and Robert E. Haas, each officers
and directors of the Shareholder.
1. The Shareholder is the record owner of an aggregate of 219,000
shares ("Shares") of the common stock, $.01 par value, ("Common Stock") of
Aquagenix, Inc., a Delaware corporation.
2. By virtue of the execution of this letter agreement (the
"Agreement"), and as an inducement for the Company and Haas Environmental
Services, Inc. ("Haas") to enter into the Asset Purchase Agreement of even date
herewith, the Shareholder hereby agrees with you as follows:
(a) The Shareholder has full power and authority to enter into
this Agreement to restrict the transferability and saleability of its
shares of Common Stock as provided herein.
(b) The Shareholder owns the Shares of Common Stock free and
clear of any and all liens and encumbrances.
(c) The Shareholder's compliance with the terms and conditions
of this Agreement will not conflict with any instrument or agreement
pertaining to such Shares of Common Stock and will not conflict with,
result in a breach of, or constitute a default under any instrument to
which the Shareholder is a party.
(d) The Shareholder, its successors or assigns will not offer,
transfer or sell any of the Shares of Common Stock presently owned by
it unless (i) in accordance with Rule 144 of the Securities Act of
1933, as amended, and the applicable exemptions from registration of
securities, (ii) any such sale or transfer of the Shares of Common
Stock are made in an amount not greater than 20,000 Shares of Common
Stock per every three month quarter, and (iii) five (5) days prior
written notification of any sale or transfer of the Shares of Common
Stock is given to the Company
(e) The Shareholder further agrees that appropriate stop
transfer orders will be placed against the future transfer of the
Shares of Common Stock with the Company's transfer agent in accordance
with the restrictions herein set forth.
Page 1
IN WITNESS WHEREOF, the parties hereto have executed this Lock-Up
Agreement as of April 25, 1996.
AQUAGENIX, INC., a Delaware H&H INVESTMENT, INC., a New
corporation New Jersey corporation
By: _____________________________ By: ________________________________
Andrew Chesler, President and Eugene M. Haas, President
Chief Executive Officer
________________________________
EUGENE M. HAAS
________________________________
ROBERT E. HAAS
Page 2
