U.S. SECURITIES & 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) June 7, 1996
AQUAGENIX, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-24490 65-0419263
(State or other jurisdiction of (Commission File Number) (I.R.S.Employer
incorporation) Identification No.)
6500 Northwest 15th Avenue, Fort Lauderdale, Florida 33309
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (954) 975-7771
Not Applicable
(Former name or former address, if changed since last report)
ITEM 2. Acquisition of Assets
On June 7, 1996, Aquagenix, Inc. (the "Company") acquired 100% of the
voting common stock of Aquatic and Right of Way Control, Inc. ("ARC")
pursuant to the terms of a Stock Purchase Agreement, dated as of June 7,
1996 (the "Stock Purchase Agreement"), by and among the Company, ARC and
Ray Spirnock and Shirley Spirnock, the shareholders of ARC. The aggregate
purchase price was $1,500,000, of which $1,350,000 was paid by the
issuance of 270,000 shares of the Company's common stock to the former
shareholders of ARC and $150,000 was paid in cash. The cash portion was
funded out of cash flows from operations. The assets being acquired from
ARC comprise mainly recurring service contracts, accounts receivable and
industrial vegetation management equipment.
Based on the audited accounts for the year ended December 31, 1995, ARC
had total revenues and net income of approximately $1,100,000 and
$134,000, respectively. As at December 31, 1995, ARC had a net worth
of approximately $152,000. Revenues to be generated for the year
ending December 31, 1996 as a result of the ARC acquisition are expected
to be approximately $1,500,000. The ARC acquisition will be accounted
for by the pooling of interests method, whereby the common stock issued
as consideration will be recorded in an amount equal to the net book
value of the acquired assets and liabilities of ARC; thus no goodwill
will be recorded.
In connection with the acquisition, the Company has entered into a two-
year employment agreement with Ray Spirnock.
ARC was a leading provider of industrial vegetation and utility right of
way management services in Florida, Georgia and Alabama. These services
include the control of noxious weeds in the right of way areas adjacent
to distribution and transmission power lines. The Company intends to
continue the existing business and to further develop the industrial
vegetation and utility right of way management services conducted by ARC.
ITEM 7. Financial Statements and Pro Forma Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
It is currently impracticable to provide the financial information
required pursuant to Item 310 of Regulation S-B. This Report will be
amended within 60 days of the date this Report is filed to include
such financial information.
(b) Pro Forma Condensed Consolidated Financial Statements (Unaudited)
of Aquagenix, Inc.
It is currently impracticable to provide the pro forma financial
information required pursuant to Item 310(d) of Regulation S-B.
This Report will be amended within 60 days of the date this Report
is filed to include such pro forma financial information.
(c) Exhibit
10.81 Stock Purchase Agreement, dated as of June 7, 1996, by
and among the Company, ARC and Ray Spirnock and
Shirley Spirnock, the shareholders of ARC.
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: June 19, 1996 By: /s/ Helen Chia
Helen Chia,
Chief Financial Officer
STOCK EXCHANGE AGREEMENT
by and among
AQUAGENIX, INC.,
RAY A. SPIRNOCK AND SHIRLEY J. SPIRNOCK
AND
AQUATIC AND RIGHT OF WAY CONTROL, INC.
June 7, 1996
TABLE OF CONTENTS
1. Purchase and Sale.. . . . . . . . . . . . . . . 2
1.1 ARC Shares to be Sold . . . . . . . . 2
1.2 Amount and Payment of Purchase Price. 2
1.3 Payment of Purchase Price . . . . . . 2
1.4 Registration Rights . . . . . . . . . 3
1.5 Purchase Price Adjustment . . . . . . 3
2. The Closing.. . . . . . . . . . . . . . . . . . 3
3. Items to be Delivered at Closing. . . . . . . . 3
3.1 Selling Shareholder's Deliveries. . . 3
3.2 Aquagenix's Deliveries. . . . . . . . 4
3.3 Further Assurances. . . . . . . . . . 4
3.4 Confidentiality . . . . . . . . . . . 4
3.5 Standstill. . . . . . . . . . . . . . 5
4. Representations and Warranties of ARC and the Selling
Shareholders. . . . . . . . . . . . . . . . . . 6
4.1 Organization and Corporate Authority. 6
4.2 Charter, By-Laws and Minutes. . . . . 7
4.3 Authorization and Validity. . . . . . 7
4.4 No Violation. . . . . . . . . . . . . 8
4.5 Absence of Certain Changes. . . . . . 9
4.6 New Subsidiaries; Other Interests . . 10
4.7 Financial Statements. . . . . . . . . 11
4.9 Interests of Certain Affiliates . . . 15
4.10 Insurance . . . . . . . . . . . . . . 15
4.11 Names, Franchises, Permits, Etc . . . 15
4.12 Title to Assets . . . . . . . . . . . 16
4.13 Condition of Assets . . . . . . . . . 16
4.14 Leases; Contracts . . . . . . . . . . 16
4.15 Agreements. . . . . . . . . . . . . . 17
4.16 Employment Matters. . . . . . . . . . 17
4.17 Litigation. . . . . . . . . . . . . . 18
4.18 Finder's Fee. . . . . . . . . . . . . 19
4.19 Approvals . . . . . . . . . . . . . . 19
4.20 Licenses and Compliance with Law. . . 19
4.21 Trademarks, Tradenames, Etc. . . 19
4.22 Disclosures . . . . . . . . . . . . . 20
4.23 Books and Records . . . . . . . . . . 20
4.24 Environmental. . . . . . . . . . 20
4.25 Announcement . . . . . . . . . . 23
5. Representations of Aquagenix. . . . . . . . . . 23
5.1 Organization of Aquagenix and Corporate
Authority. . . . . . . . . . . . . . 23
5.2 Aquagenix's Authority . . . . . . . . 23
5.3 No Violation. . . . . . . . . . . . . 24
5.4 Approvals . . . . . . . . . . . . . . 24
6. Expenses. . . . . . . . . . . . . . . . . . . . 25
7. Survival of Representations and Warranties. . . 25
8. Covenants of Selling Shareholders . . . . . . . 25
8.1 Access to Information . . . . . . . . 25
8.2 Obtaining Consents. . . . . . . . . . 26
8.3 Covenant to Satisfy Conditions. . . . 26
8.4 Provide Information . . . . . . . . . 26
8.5 Non-Competition Agreements. . . . . . 26
8.6 Investment Intent . . . . . . . . . . 27
9. Conditions Precedent to the Obligations of Aquagenix 27
9.1 Representations and Warranties True . 27
9.2 No Obstructive Proceedings. . . . . . 27
9.3 Certificates, Documents, Financial Statements
and Due Diligence Inspection Satisfactory. 28
9.4 Performance . . . . . . . . . . . . . 28
9.5 Opinion of Counsel. . . . . . . . . . 28
9.6 Governmental Permits and Approvals Corporate
Resolutions. .. . . . . . . . . . . . 28
9.7 Third Party Consents. . . . . . . . . 29
9.8 Compliance Certificate. . . . . . . . 29
10. Conditions Precedent to the Obligations of Selling
Shareholder . . . . . . . . . . . . . . . . . . 29
10.1 Representations and Warranties True 29
10.2 No Obstructive Proceeding. . . . 29
10.3 Performance by Aquagenix . . . . 30
10.4 Compliance Certificate . . . . . 30
10.5 Opinion of Counsel . . . . . . . 30
11. Conduct of ARC's Business Pending the Closing . 30
11.1 Regular Course of Business. . . . . . 30
11.2 Amendments. . . . . . . . . . . . . . 30
11.3 Capital Changes; Dividends; Redemptions 31
11.4 Subsidiaries. . . . . . . . . . . . . 31
11.5 Organization. . . . . . . . . . . . . 31
11.6 Certain Changes . . . . . . . . . . . 31
11.7 Contracts . . . . . . . . . . . . . . 32
11.8 Insurance/Properties . . . . . . 32
11.9 Chemicals and Other Inventories . . . 33
11.10 Compliance with the Laws . . . . 33
11.11 Wrongful Action. . . . . . . . . 33
12. Termination . . . . . . . . . . . . . . . . . . 33
12.1 Termination . . . . . . . . . . . . . 33
12.2. Effect of Termination. . . . . . 33
13. Additional Agreements.. . . . . . . . . . . . . 34
13.1 Agreement Not to Compete. . . . . . . 34
14. Indemnification by Selling Shareholders.. . . . 37
14.1 Obligation of Selling Shareholders to Indemnify 37
14.2 Claims by Third Parties . . . . . . . 37
14.3 Defensive Claims by Third Parties 38
15. Indemnification by Aquagenix. . . . . . . . . . 39
15.1.Obligation of Aquagenix to Indemnify. 39
15.2 Claims by Third Parties. . . . . . . . . . 39
15.3 Defensive Claims by Third Parties. . . . . 40
16. General . . . . . . . . . . . . . . . . . . . . 41
16.1 Entire Agreement. . . . . . . . . . . 41
16.2 Separate Counterparts . . . . . . . . 41
16.3 Parties in Interest . . . . . . . . . 41
16.4 Assignment. . . . . . . . . . . . . . 41
16.5 Notices . . . . . . . . . . . . . . . 41
SCHEDULES
1.5 Purchase Price Adjustment
4.2 Charter, By-Laws and Minutes of ARC
4.3(d) Resolution of Board of Directors
4.6 New Subsidiaries; Other Interests
4.7(c) Undisclosed Liabilities
4.10 Insurance
4.14 Leases/Contracts
4.15 Agreements
4.16 Employment Agreement
4.17 Litigation
4.19 Employee Benefit Plans
4.24 Licenses
EXHIBITS
To Be Supplied By Section #
Exhibit A List of Shareholders Seller Preamble
Exhibit B Registration Rights Agreement Buyer 1.4
Exhibit C Legend for Restricted Securities Buyer 1.4
Exhibit D Financial Statements Seller 4.7
Exhibit E Non-Competition Agreements Buyer 8.5
<PAGE>
STOCK EXCHANGE AGREEMENT
THIS STOCK EXCHANGE AGREEMENT (the "Agreement") dated as
of June 7, 1996, by and among AQUAGENIX, INC. ("Aquagenix"), a
Delaware corporation, and the Individuals listed on Exhibit "A" annexed
hereto (collectively, the "Selling Shareholders"), who are the holders of all
outstanding shares of capital stock of Aquatic and Right of Way Control, Inc.
("ARC"), a Florida corporation.
WHEREAS, ARC is engaged in the business of providing algae and
aquatic weed control, industrial vegetation management, right of way and
terrestrial vegetation management (ARC's activities in pursuing the business
of providing algae and aquatic weed control, industrial vegetation
management, right of way and terrestrial vegetation management services
are herein referred to as the "Business"); and
WHEREAS, each of the Selling Shareholders desires to sell the
number of shares of the issued and outstanding capital stock of ARC set
forth opposite their name on Exhibit A annexed hereto which constitute
100% of the issued and outstanding shares of ARC. The foregoing shares
of capital stock are hereinafter collectively referred to as the "ARC Shares".
WHEREAS, this Agreement sets forth the terms and conditions upon
which the Selling Shareholders will sell the ARC Shares to Aquagenix, and
Aquagenix will purchase from the Selling Shareholders one hundred (100%)
percent of the ARC Shares.
In consideration of the mutual promises contained herein and
intending to be legally bound, the parties hereto covenant and agree as
follows:
1. Purchase and Sale.
1.1 ARC Shares to be Sold. Subject to the terms and conditions
of this Agreement, at the Closing each Selling Shareholder shall sell,
transfer, convey, assign and deliver to Aquagenix all the ARC Shares free
and clear of all liens, claims, charges and encumbrances of whatever nature.
The purchase price to be paid by Aquagenix and the terms and conditions
of such purchase shall be as specified in Section 1.2 and 1.3 hereof.
1.2 Amount and Payment of Purchase Price. Subject to the
terms and conditions of this Agreement, Aquagenix agrees to pay the Selling
Shareholders the purchase price, subject to adjustment, of One Million Five
Hundred Thousand Dollars ($1,500,000) (the "Purchase Price") payable on
the Closing Date. The terms of payment for the Aquagenix Purchase Price
shall be as set forth in Section 1.3 hereof.
1.3 Payment of Purchase Price. The Purchase Price shall be
payable as follows:
(a) $150,000 in cash, payable by wire transfer to:
Mellon Bank
Pittsburgh, Pennsylvania
ABA Routing No.: 043000261
Credit: Merrill Lynch #101-1730
Account: Shirley J. Spirnock and Raymond A.Spirnock
Account No.: 772-44135
(b) $1,350,000 shall be payable by the issuance to the
Selling Shareholders of 270,000 shares ("Shares") of Aquagenix Common
Stock.
1.4 Registration Rights. The Selling Shareholders shall be
granted registration rights with respect to 270,000 Shares (the "Registrable
Shares") as set forth in the Registration Rights Agreement set forth in Exhibit
B. Pending the effectiveness of the Registration Statement, a legend shall
be placed on the Share Certificate in the form of Exhibit C.
1.5 Purchase Price Adjustment. The Purchase Price shall be
reduced in the event that any customer account shall be cancelled or
reduced between the date of this Contract and one hundred eighty (180)
days after Closing. The amount of the adjustment shall be $.75 for each
$1.00 of customer account value and the adjustment, if any, shall be made
first against the Registrable Shares, if available and thereafter against the
Selling Shareholders. Schedule 1.5 sets forth the customer account value
of the customer accounts for purposes of Purchase Price Adjustment.
2. The Closing.
The closing (the "Closing") shall take place on June 7, 1996 at 12:30
p.m. EST at the offices of Aquagenix, Inc., 6500 N.W. 15th Avenue, Fort
Lauderdale, Florida, or at such other place and time as agreed upon by the
parties.
3. Items to be Delivered at Closing.
3.1 Selling Shareholder's Deliveries. At the Closing, the Selling
Shareholders will deliver to Aquagenix:
(i) stock certificates evidencing the ARC Shares owned by the
Selling Shareholders, duly endorsed in blank and with all requisite stock
transfer and tax stamps affixed, transfer with signatures; and (ii) all such
opinions, contracts, resolutions, agreements and documents as are provided
for herein to be delivered by the Selling Shareholders to Aquagenix and such
other instruments, documents and agreements as Aquagenix may
reasonably request for the purpose of carrying out the transactions
contemplated by this Agreement.
3.2 Aquagenix's Deliveries. At the Closing, Aquagenix will deliver
or cause to be delivered to the Selling Shareholders (i) the cash portion of
the Share Purchase Price by wire transfer, (ii) the Aquagenix Shares, and (iii)
all such opinions, contracts, resolutions, agreements and documents as are
provided for herein to be delivered by Aquagenix to the Selling Shareholders.
3.3 Further Assurances. After the Closing, the Selling
Shareholders shall from time to time, at the request of Aquagenix and at
Aquagenix's expense, execute and deliver such other instruments and take
such other actions as Aquagenix may reasonably request, in order to more
effectively consummate the transactions contemplated hereby. After the
Closing, Aquagenix shall from time to time at the request of the Selling
Shareholders and at the Selling Shareholders' expense, execute and deliver
such other instruments and take such other actions as the Selling
Shareholders may reasonably request, in order to more effectively
consummate the transaction contemplated hereby.
3.4 Confidentiality. Each party hereto agrees that it will hold and
cause its affiliates, employees, auditors, attorneys, financial advisors,
bankers and other consultants, to hold in strict confidence, unless compelled
to disclose by judicial or administrative process, all documents and
information concerning the other party furnished to it by such other party or
their representatives in connection transactions contemplated by this
Agreement (except to the extent that such information can be shown to have
been furnished (i) previously known by the party to which it was furnished,
(ii) in the public domain through no fault of such party,(iii)lawfully acquired
from other sources by the party to which it was furnished), and each party
agrees that it will treat such information as the sole property of the party
furnishing such information and it will not use such information other than for
evaluating the transactions described herein or release or disclose such
information to any other person, except its employees, auditors, attorneys,
financial advisors, banks and other consultants and advisors in connection
with this Agreement. If the transactions contemplated by this Agreement are
not consummated, such confidence shall be maintained except to the extent
such information comes into the public domain through no fault of the party
required to hold it in confidence, and such information shall not be used to
the detriment of, or in relation to any investment in, the other party and all
such documents (including copies thereof) shall be returned to the other
party immediately upon the written request of such other party.
3.5 Standstill. The Selling Shareholders and ARC agree until
such time as this Agreement has been terminated in accordance with the
provisions of Section 12, that neither the Selling Shareholders nor ARC shall
initiate, solicit, or encourage, or use their respective best efforts to cause
a officer, director or employee, or any investment banker, attorney, accountant
or other agent retained by the Selling Shareholders or ARC to initiate, solicit
or encourage any proposal or offer to acquire all or any part of the business
and properties or capital stock of ARC or any of its subsidiaries, whether by
merger, purchase of assets, tender offer or otherwise. The Selling
Shareholders and ARC shall not provide any information to any other person,
firm or corporation for such a purpose and the Selling Shareholders and ARC
further agree that promptly hereafter they shall notify Aquagenix and any
other person, firm or corporation which hereafter express an interest in
acquiring the ARC Shares or any part of the business or assets of ARC that
the Selling Shareholders and ARC have entered into this Agreement and
have agreed not to discuss this matter further with any third party.
4. Representations and Warranties of ARC and the Selling Shareholders.
As a material inducement to Aquagenix to enter into and perform this
Agreement and complete the purchase of the ARC Shares, ARC and the
Selling Shareholders, jointly and severally make the representations and
warranties set forth in this Section 4, intending Aquagenix to rely, and
acknowledging that Aquagenix is relying, on such representations and
warranties in executing this Agreement and entering into the transactions
contemplated hereby:
4.1 Organization and Corporate Authority. ARC is a corporation
duly organized, validly existing and in good standing under the law of the
State of Florida with full corporate power and authority to own or lease and
use its properties and assets, and to carry on its business as now conducted.
ARC is qualified as a foreign corporation to do business in every other
jurisdiction where such qualification is necessary to conduct its business as
presently conducted.
4.2 Charter, By-Laws and Minutes. The copies of the Articles of
Incorporation and the By-Laws of ARC and minutes of meetings of its Board
of Directors and shareholders (or consents in lieu thereof), and any
shareholders' agreements among any or all shareholders of ARC, all as
furnished to Aquagenix (in the form attached as Schedule 4.2) are true,
correct and complete copies thereof.
4.3 Authorization and Validity.
(a) Each Selling Shareholder has the full right, power and
authority to enter into this Agreement and to sell, transfer and convey to
Aquagenix at the Closing the ARC Shares to be sold to Aquagenix by such
Selling Shareholder pursuant to this Agreement, and, upon consummation
of the transactions contemplated by this Agreement, Aquagenix will acquire
the ARC Shares free and clear of all covenants, conditions, restrictions,
voting trust arrangements, liens, claims, charges, encumbrances, options
and other rights of any kind including specifically but without limitation any
claim by Allen Higginbotham. Ray Spirnock and Shirley Spirnock shall
indemnify and hold harmless Aquagenix, its officer and directors, from any
claims, lawsuits or legal expenses associated with actions relating to
ownership or profit sharing of ARC.
(b) Each Selling Shareholder has good and marketable
title to the ARC Shares to be sold to Aquagenix by such Selling Shareholder
pursuant to this Agreement, free and clear of all covenants, conditions,
restrictions, voting trust arrangements, liens, claims, charges,
encumbrances, options and other rights of any kind.
(c) This Agreement constitutes the valid and binding
obligation of each Selling Shareholder, enforceable against such Selling
Shareholder in accordance with its terms.
(d) This Agreement has been duly and validly authorized
by all necessary corporate action and upon execution constitutes the valid
and legally binding obligations of ARC enforceable in accordance with their
respective terms. A copy of the Resolution is attached as Schedule 4.3(d).
4.4 No Violation.
(a) No Selling Shareholder or ARC is a party to, subject
to or bound by any agreement or judgment, order, writ, prohibition, injunction
or decree of any court or governmental body that would prohibit or prevent
the execution, delivery or performance of this Agreement by ARC or such
Selling Shareholder. Neither the execution, delivery or performance of this
Agreement, nor the consummation of the transactions contemplated hereby
will violate, or be in conflict with, or constitute a default (or an event which
with notice or lapse or time or both, would constitute a default) under, or
result in a termination of or accelerate the performance required, or cause
the acceleration of the maturity of any debt or obligation pursuant to,or result
in the creation or imposition of any security interest, lien or other
encumbrance upon any property or assets of any Selling Shareholder or
ARC under any agreement, commitment, indenture or other instrument to
which any Selling Shareholder or ARC is bound, or violate any statute or law
or any judgment, decree, order, award, regulation or rule of any court,
governmental authority or arbitration tribunal applicable any Selling
Shareholder or ARC.
(b) Neither the execution, delivery and performance of this
Agreement nor the consummation of the transactions contemplated hereby
will (i) violate any provision of the Articles of Incorporation or Bylaws of ARC
(ii) violate, or be in conflict with, or constitute a default (or an event which
with notice or lapse of time or both, would constitute a default) under, or give
rise to a right of termination of or result in the termination or accelerate the
performance required by or cause the acceleration of the maturity of any
debt or obligation pursuant to, or result in the creation or imposition of any
security interest, lien or other encumbrance upon any property or assets of
ARC under, any agreement, commitment, indenture or other instrument to
which ARC is a party or by which ARC is bound, or to which the property of
ARC is subject; (iii) violate any statute or law or any judgment, decree, order,
award, regulation or rule of any court, governmental authority or arbitration
tribunal applicable to ARC; or (iv) give rise to the right of termination by any
domestic or foreign governmental authority or tribunal of any license,
registration,certificate,right of authority to engage in business in such places
where ARC now does or has a right to engage in business or heretofore has
engaged in business.
4.5 Absence of Certain Changes. Since December 31, 1995,
ARC has not: (i) suffered any material adverse change in its working capital,
financial condition, assets, liabilities (absolute, accrued, contingent or
otherwise), reserves, business, operations or prospects; (ii) paid, discharged
or satisfied any claims,liabilities or obligations (absolute accrued,contingent
or otherwise) other than the payment, discharge or satisfaction in the
ordinary course of business and consistence with past practice; (iii) written
off as uncollectible any notes or accounts receivable; (iv) cancelled any
debts or waived any claims or rights of substantial value; (v) sold, transferred
or otherwise disposed of any of its properties or assets (personal or mixed,
tangible or intangible), except in the ordinary course of business and
consistent with past practice; (vi) granted any general increase in the
compensation of officers or employees (including any such increase
pursuant to any bonus, pension, profit or other profit sharing or other plan or
commitment) or any increase in the compensation payable or to become
payable to any officer, employee, except where such increase is customary
on a periodic basis; (vii) declared, paid or set aside for payment any dividend
or other distribution in respect of its capital stock or redeemed, purchased or
otherwise acquired, directly or indirectly, any shares of capital stock or other
securities of ARC; or (viii) agreed, whether in writing or otherwise,to take any
action described in this section.
4.6 New Subsidiaries; Other Interests. Except as set forth on
Schedule 4.6 attached hereto, ARC does not own, directly or indirectly, any
capital stock or other equity securities of any corporation nor have any direct
or indirect equity ownership interest in any business or entity nor is ARC
otherwise under any obligation to purchase or subscribe to any interest
income or make any loan or other advance other than business and travel
advances to employees in the ordinary course of business, to or any manner
make any investment in any person, business or entity.
4.7 Financial Statements.
(a) As contained in Exhibit D, Selling Shareholders have
heretofore delivered to Aquagenix: (i) an audited balance sheet of ARC as
of December 31, 1995, including statements of income, changes in
stockholders' equity for the year ending 1995 (the "Financial Statements"),
together with notes thereto, all prepared in accordance with generally
accepted accounting principals consistently applied and all audited by
Harman & Peaslee, P.A., Certified Public Accountants, in accordance with
generally accepted auditing standards, which reports upon the Financial
Statements are included as a part thereof; (ii) an unaudited balance sheet
of ARC as of March 31, 1996 (the "Most Recent Balance Sheet"), and
unaudited statements of income, changes in stockholders' equity for the
three (3) months then ended (the "Interim Financial Statements"). The
Financial Statements and Notes thereto and the Interim Financial Statements
and any Notes thereto fairly present the assets, liabilities and financial
condition as of the respective dates thereof, and such statements of income,
changes in stockholders' equity, statements of cash flows, and Notes
thereto,fairly present the results of operations for the period therein referred
to; all in accordance with generally accepted accounting principals
consistently applied throughout the periods involved.
(b) SEC Requirements. Selling Shareholders
acknowledge that Aquagenix is a publicly held company and that the
Financial Statements and Interim Financial Statements for ARC conform to
the requirements of Regulation S-X and other requirements of the Securities
and Exchange Commission.
(c) Undisclosed Liabilities. ARC has no liability, duty
or obligation, including obligations under liability claims, or other tort,
contractual claims or obligations, to employees, or otherwise, and ARC
has not committed any act or omission, and no event has occurred and no
condition exists, which could give rise to such a liability, which is not
disclosed or reflected in the Financial Statements or the Notes thereto,
whether current, long-term, fixed, contingent, or otherwise and which
would be required to be reflected, disclosed or accrued on the Financial
Statements, (under FASB 5) in accordance with GAAP. ARC has no
other such liability, duty or obligation, whether fixed, contingent or
otherwise. Without limiting the foregoing and other than the "Allen
Higginbotham lawsuit" styled as Allen H. Higginbotham Inc. v. Aquatic and
Right of Way Control, Inc., a Florida corporation, Raymond Spirnock and
Shirley Spirnock ("Allen Higginbotham lawsuit"), Hillsborough County,
Florida, Thirteenth Judicial Circuit, Case No.: 96-3400, Division East, (i)
no claim has been threatened or asserted by any present or former
employee, customer or client of ARC regarding any act or omission of
either ARC or its personnel, nor has any claim been threatened or
asserted by any person regarding any violation by either ARC or its
personnel of any laws or any rules, guidelines, policies or regulations of
any governmental agency or state regulatory authority, (ii) no event has
occurred and no condition exists that might give rise to any such claim,
and (iii) ARC and the Selling Shareholders have no knowledge of any
event or condition which might lead them to believe that any such claim
might be asserted.
(d) Accounting Changes. ARC has not since
inception, changed its accounting practices, methods or principles in any
respect. Since January 1, 1996, there has not (i) been any material
adverse change in the assets, business, operations, liabilities (absolute,
accrued, contingent or otherwise), prospects or financial condition of ARC
other than as reflected on the Interim Financial Statements.
(e) Internal Controls. ARC maintains internal controls
with respect to its books, records, finances, customer accounts and other
operations which are adequate under state regulatory rules and
regulations and are in accordance with standard industry practices.
(f) Capitalization. ARC's authorized capitalization
consists of one thousand (1,000) shares of common stock having One
($1.00) Dollar par value, of which six hundred (600) shares are issued and
outstanding. All issued and outstanding shares of capital stock of ARC
are validly issued, fully paid and non-assessable. Except as set forth on
Schedule 4.7(c) there are no outstanding (a) securities convertible into or
exchangeable for the shares of capital stock of ARC; (b) options, warrants
or other rights to purchase or subscribe to shares of capital stock of ARC
or securities convertible into or exchangeable for shares of capital stock of
ARC; or (iii) contracts, commitments, agreements, understandings or
arrangements of any kind relating to the issuance of any capital stock of
ARC, any such convertible or exchangeable securities or any such
options, warrants or rights.
4.8 Taxes.
(a) Filing and Payment. ARC has filed all federal, state,
local and other tax returns which are required to be filed by it and which
have become due and has paid all taxes shown thereon, including without
limitation all taxes on properties, income, business and occupation,
licenses, sales and payrolls, and none of the assets or properties of ARC
are subject to any lien or charge for taxes, except statutory liens for taxes
not yet due. For purposes of this Agreement, "Taxes" shall mean all
taxes, charges, fees, levies and other assessments however
denominated, including any interest, penalties or additions to tax that may
become payable in respect thereof, imposed by any governmental body,
including, without limiting the generality of the foregoing, all net income,
gross income, payroll, withholding, unemployment insurance, social
security, sales, use, excise, franchise, gross receipts, occupation, real and
personal property, stamp, transfer, workers' compensation, ad valorem,
profits, license, employment, estimated, severance and other taxes,
customs, duties, fees, assessments or charges of any kind whatever.
"Tax" shall mean any one of the foregoing.
(b) Audits. No federal income, state excise or business
or occupation Tax returns of the ARC have been audited by the Internal
Revenue Service or other applicable authorities, and the ARC has not
granted any power of attorney to any person to represent it before the
Internal Revenue Service or other applicable authorities. No federal or
state Tax liabilities have been assessed or proposed which remain
unpaid. ARC is unaware of any basis upon which any assessment for a
material amount of additional Taxes of ARC could be made.
(c) Withholding. All Taxes which ARC is required by
law to withhold or collect have been withheld or collected and have been
paid over to the proper governmental authorities or are properly held by
ARC for such payment, and all withholdings, collections or other
payments payable in connection therewith as of the dates of the Financial
Statements, are fully reflected or disclosed in the balance sheets included
as part of the Financial Statements as at such dates and for the periods
then ended. No waivers of statutes of limitations with respect to any Tax
returns of ARC nor extensions of time for the assessment of any tax have
been given which are now in effect.
(d) Transfer Taxes; Transferee Tax Liability. No
transfer Taxes are or will be due and payable as a result of the sale of the
ARC Shares or the transactions contemplated hereby.
4.9 Interests of Certain Affiliates. No officer, director,
shareholder or employee of ARC has any loan, other obligation or other
transaction outstanding and owing from ARC or for which ARC is or may
be liable under guaranty or otherwise. 4.9.0.0.0.0.1 Insurance. ARC
does not carry directors' and officers' liability insurance. Exhibit 4.10,
provides a list of all insurance policies maintained by ARC, the nature of
the policy, the deductible and the term of such policy, and except as set
forth in Schedule 4.10, ARC has no other insurance policies. Schedule
4.10 also contains a description of claims against ARC that are currently
unsettled or uncompromised (whether insured or uninsured or in litigation
or not).
4.10 Names, Franchises, Permits, Etc. ARC has not infringed
or violated in any way any software or other license, or any trademark,
trade name, copyright, trade secret right or contractual relationship of
others, or received any notice, claim or protest respecting any such
violation or infringement.
4.11 Title to Assets. ARC owns good and marketable title to all
the properties and assets of the type required to be reflected on the Most
Recent Balance Sheet which it purports to own (whether personal or
mixed, tangible or intangible). All such properties and assets are free and
clear of all title defects or objections, liens, claims, charges, security
interest or other encumbrances of any nature whatsoever, including,
without limitation, leases, chattel mortgages, conditional sales contracts,
collateral security agreements and other title or interest retention
agreements. The rights, properties and other assets presently owned,
leased or licensed by ARC and described elsewhere in this Agreement
include all rights, properties and other assets necessary to permit ARC to
conduct its business in all material respects in the same general manner
as its business has been conducted since inception. To the extent that
any assets set forth in the Financial Statements are owned by the Selling
Shareholders or any other third party, title to such assets shall be good
and marketable and such assets shall be transferred by appropriate
conveyance of title with any costs associated therewith (tag fees, transfer
taxes, etc.) being borne by the Selling Shareholders.
4.12 Condition of Assets. The equipment, machinery and all
other tangible assets of ARC are in good operating condition and repair,
subject only to ordinary wear and tear and are all adequate for the use to
which they are being put. None of such equipment or machinery is in
need of maintenance or repair except for ordinary, routine maintenance
and repairs which are not material in nature or cost.
4.13 Leases; Contracts. Schedule 4.14 sets forth all leases
pursuant to which ARC leases real or personal property for its facilities of
operations. Such agreements are in good standing and valid and
enforceable in accordance with their respective terms, and there are no
existing defaults or events of default by ARC or, to the best knowledge of
ARC, by any other party thereto or events which with notice or lapse of
time or both would constitute defaults or events of default under or with
respect to any of such agreements. ARC has not received any notice of
any default or claim of default with respect to any such agreements or
knows of any fact or circumstance which might constitute or give rise to
such a claim.
4.14 Agreements. Schedule 4.15 sets forth any material
contract or arrangement to which ARC is a party or by or to which it or its
assets, properties or business are bound or subject, whether oral or
written.
All of the agreements set forth in Schedule 4.15 are valid,
binding, enforceable agreements in full force and effect. ARC is not in
default under any of them (nor is any other party to any of such
agreements, nor does any condition exist which with notice or lapse of
time or both would constitute a default thereunder). To the knowledge of
ARC and the Selling Shareholders, there has been no threatened
cancellation or termination of any Material Contract. ARC is not a party
to, nor are the assets of ARC subject to or bound by or affected by, any
provision of any order of any court or other agency of government or any
indenture, agreement or other instrument or commitment which adversely
effects the operations of ARC.
4.15 Employment Matters. Except as described in Schedule
4.16 ARC is not a party to any employment agreement or agreement to
lend to, or guarantee any loan to any employee or agreement relating to a
bonus, severance pay or similar plan, agreement, arrangement or
understanding. ARC has incurred no liability, or taken or failed to take,
any action which will result in any liability in respect of any failure to
comply with the Fair Labor Standards Act or any other applicable laws
dealing with minimum wages or maximum hours for any employees, and
all payments due from ARC on account of its employee health and welfare
insurance, holiday and vacation pay and similar benefits have been paid.
ARC is not a party to any collective bargaining agreement governing its
employees. There is no pending or threatened election for union
representation of ARC's employees. The Selling Shareholders have
heretofore delivered to Aquagenix complete and correct copies of all
Employment and Consulting Agreements to which ARC is a party or by
which it is bound as currently in effect.
4.16 Litigation. Except as described in Schedule 4.17, no
action, suit, order, judgment, injunction, award or proceeding of any kind
has been filed or commenced, or, to the knowledge of ARC, is threatened,
before any court, commission, agency or other administrative authority
against ARC or which questions or challenges the validity of this
Agreement or any action taken or to be taken by ARC or by any Selling
Shareholder pursuant to this Agreement or in connection with the
transactions contemplated hereby which could be anticipated to materially
and adversely affect ARC's performance or consummation of the
transactions contemplated hereunder or the financial condition of ARC;
and (ii) to the best knowledge of the Selling Shareholders and ARC, there
is no basis for any such suit, proceeding or investigation. ARC is not
subject to any unsatisfied judgment, order or decree entered in any law
suit or proceeding.
4.17 Finder's Fee. ARC has not incurred any obligation of any
kind whatsoever to any party for a finder's fee in connection with the
transactions contemplated by this Agreement.
4.18 Approvals. No approval, waiver, authorization, order,
license or consent of or registration, qualification or filing with or
notification to any governmental or regulatory authority, agency or other
person or entity is required in connection with or as a condition of the
execution, delivery or performance by ARC or the Selling Shareholders of
this Agreement or any related agreements.
4.19 Licenses and Compliance with Law. ARC has had and
continues to have all federal, state and local licenses and permits required
to transact its business and, is in compliance with all applicable federal,
state and local laws, regulations, and guidelines applicable to ARC's
business. ARC has accurately and timely filed all reports, claims and
other filings required to be filed in connection with all federal, state and
local laws and regulations governing the business of ARC. No validation
review or program integrity review related to ARC has been conducted by
any federal, state or local governmental agency and, no such review is
scheduled, pending or threatened against or affecting ARC or the
consummation of the transactions contemplated hereby.
4.20 Trademarks, Tradenames, Etc. There are no trademarks,
tradenames, copyrights, registrations, technology, know how and process
(the "Intellectual Property") necessary for the operation of ARC's business
as presently conducted. Any loss or expiration of any such Intellectual
Property would not have a material adverse effect on the financial
condition of ARC; and the use of such Intellectual Property by ARC does
not infringe on the rights of any person.
4.21 Disclosures. No representations or warranties contained
in this Agreement and no statements contained in any financial
statements, the Schedules or in any Exhibits, or any certificate delivered
to Aquagenix pursuant to the provisions hereof, contains or will contain
any untrue statement of a material fact or omits or will omit to state any
material fact necessary, in order to make the statements contained herein
or therein not misleading and in order to fully and fairly provide the
information required to be provided in any such document.
4.22 Books and Records. The books and records of ARC are
complete and correct and have been maintained in accordance with
sound business practices, including, but not limited to, the maintenance of
an adequate system of internal control.
4.23 Environmental.
(a) Except as set forth on Schedule 4.24, ARC has
obtained all permits, licenses, and other authorizations (collectively, the
"Licenses") which are required in connection with the conduct of the
Business under all applicable Environmental Laws (as defined below) and
regulations relating to pollution or protection of the environment, including
Environmental Laws and regulations relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes into the environment
(including without limitation, ambient air, surface water, groundwater, or
land) or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of pollutants,
contaminants, chemicals or industrial, toxic or hazardous substances or
wastes.
(b) Except as set forth in Schedule 4.24(a), ARC is in
compliance in all material respects in the conduct of the Business with all
terms and conditions of the Licenses and is in compliance in all material
respects with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables
contained in the Environmental Laws or contained in any regulation, code,
plan, order, decree, judgment, injunction, notice (written or verbal) or
demand letter issued, entered, promulgated or approved thereunder.
(c) Except as set forth on Schedule 4.24(c), ARC has
not received any written or verbal notice of, any past, present or future
events, conditions, circumstances, activities, practices, incidents, actions
or plans which would interfere with or prevent compliance or continued
compliance with any Environmental Laws or any regulations, code, order,
decree, judgment, injunction, notice (written or verbal) or demand letter
issued, entered, promulgated or approved thereunder, or which would
give rise to any common law or legal liability, or otherwise form the basis
of any claim, action, demand, suit, proceeding, hearing, study or
investigation, based on or related to the ARC's manufacture, processing,
storage, distribution, use, treatment, disposal, transport or handling or the
emission, discharge, release or threatened release into the environment,
of any pollutant, contaminant, chemical or industrial, toxic or hazardous
substance or waste.
(d) Except as set forth on Schedule 4.24(d), there is no
civil, criminal or administrative action, suit, demand, claim, hearing, notice
or demand letter, notice of violation, investigation or proceeding pending
or to the best knowledge of the Selling Shareholders, threatened against
ARC, in connection with the conduct of the Business relating in any way to
any Environmental Laws or regulation, injunction, notice or demand letter
issued, entered, promulgated or approved thereunder.
(e) For purposes of this Agreement, "Environmental
Laws" means collectively, all federal, state and local environmental laws,
common laws, statutes, rules and regulations including, without limitation,
the Comprehensive Environmental Response, Compensation and Liability
Act (42 U.S.C. Sec. 9061 et seq.), as amended, the Hazardous Materials
Transportation Act (49 U.S.C. Sec. 1801 et seq.), as amended, the
Resource Conservation and Recovery Act (42 U.S.C. Sec. 6901 et seq.),
as amended, the Federal Water Pollution Control Act (33 U.S.C. Sec.
1251 et seq.), as amended, the Safe Drinking Water Act (42 U.S.C. Sec.
300f et seq.), as amended, the Clean Air Act (42 U.S.C. Sec. 7401 et
seq.), as amended, the Toxic Substances Control Act (15 U.S.C. Sec.
2601 et seq.), as amended, the Federal Emergency Planning and
Community Right-to-Know Act (42 U.S.C. Sec. 11001 et seq.), as
amended, any so-called "superfund" or "super-lien" law and such statutes
and ordinances as may be enacted by state and local governments with
jurisdiction over any real property now or ever owned or leased by ARC or
any real property upon which ARC now conducts or has ever conducted
its Business and any permits, licenses, authorizations, variances,
consents, approvals, directives or requirements of, and any agreements
with, any governments, departments, commissions, boards, courts,
authorities, agencies, officials and officers applicable to such real property
or the use thereof and regulating, relating to, or imposing liability or
standards of conduct concerning any pollutant, contaminant, chemical or
industrial, toxic or hazardous substance or waste.
4.24 Announcement. No announcement with respect to this
Contract or the substance thereof shall be made by ARC and the Selling
Shareholders unless Aquagenix shall consent prior thereto.
5. Representations of Aquagenix.
As a material inducement to ARC and Selling Shareholders to
enter into and perform this Agreement, Aquagenix makes the
representations and warranties set forth in this Section 5.
5.1 Organization of Aquagenix and Corporate
Authority. Aquagenix is a corporation duly organized, validly existing and
in good standing under the laws of the State of Florida, with full corporate
power and authority to own or lease and use its properties and assets, to
carry on its business as such business is now conducted, to execute and
deliver this Agreement and any related agreements to which it is or will
become a party at the Closing, and to carry out the transactions
contemplated hereby and thereby.
5.2 Aquagenix's Authority. This Agreement and any related
agreements to which Aquagenix is a party and the transactions
contemplated hereby and thereby have been duly and validly authorized
by all necessary corporate action in respect thereof on the part of
Aquagenix. This Agreement and any related agreements to which it is a
party have been duly executed and delivered and constitute, valid and
legally binding obligations of Aquagenix, enforceable in accordance with
their respective terms.
5.3 No Violation. Neither the execution and delivery by
Aquagenix of this Agreement or any of the related agreements to which
Aquagenix is a party, nor consummation of the transactions herein or
therein contemplated, nor compliance with the terms, conditions and
provisions hereof or thereof, conflict with or violate any provision of law
applicable to Aquagenix, or the charter or By-Laws of Aquagenix or result
in a violation or default in any provision of any law, regulation, order, writ,
injunction or decree of any court or governmental agency or authority or of
any agreement or instrument to which Aquagenix is a party or by which
Aquagenix is bound or to which Aquagenix is subject, or constitute a
default thereunder or result in the imposition of any lien, charge,
encumbrance or security interest of any nature whatsoever upon any of
Aquagenix's assets pursuant to the terms of any such agreement or
instrument.
5.4 Approvals. No approval, waiver, authorization, order,
license or consent of or registration, qualification or filing with or notice to
any governmental or regulatory authorities, agency or other person or
entity is required in connection with or as a condition of the execution,
delivery or performance by Aquagenix of this Agreement and the related
agreements to which it is a party.
6. Expenses.
The parties to this Agreement shall bear their respective direct and
indirect expenses incurred with the preparation, negotiation, execution
and performance of this Agreement and the transactions contemplated
hereby, whether or not the transactions contemplated hereby are
consummated, including without limitation all fees and expenses of
agents, representative's counsel and accountants. Except Aquagenix
agrees to pay Harman & Peaslee, P.A. for 1995 year-end audit.
7. Survival of Representations and Warranties.
The respective representative warranties of the parties contained
herein or any certificates delivered prior to at the Closing shall not be
deemed waived or otherwise affected by any investigation made by any
other party hereto. Each and every such representation, warranty,
covenant and agreement shall survive the execution and delivery hereof
and the Closing hereunder for a period of two (2) years. 7.0.0.0.0.0.0.1.
Covenants of Selling Shareholders. Selling Shareholders
hereby covenant and agree with Aquagenix:
7.1 Access to Information. The Selling Shareholders shall until
the earlier to occur of the Closing or the termination of this Agreement
pursuant to Section 12 hereof, cause ARC to afford Aquagenix, its
counsel, accountants and other representatives and advisors full access
to the operations, offices, properties, books and records of ARC, including
but not limited to all books of account, corporate and tax records, material
contracts and agreements, filings with any regulatory authority, litigation
files (except for any files that may be the subject of privilege), patent and
trademark records, engineering and technology reports. Aquagenix shall
have the right to review any and all papers of ARC's accountants, and
shall have full opportunity to make such investigations as it shall desire to
make of the affairs of ARC; and the Selling Shareholders will cause the
officers, accountants and representatives of ARC to furnish such
additional financial, operating and other information as Aquagenix shall
from time to time reasonably request.
7.2 Obtaining Consents. Selling Shareholders shall use their
best efforts, and shall cause ARC to use its best efforts, to obtain prior to
the Closing all consents, approvals and authorizations necessary to the
consummation of the transactions contemplated hereby and will delivery
(or cause ARC to deliver) to Aquagenix copies of such consents promptly
after it is obtained.
7.3 Covenant to Satisfy Conditions. Each Selling Shareholder
shall use his best efforts to ensure that the conditions set forth in Article 8
hereof are satisfied.
7.4 Provide Information. The Selling Shareholders each
agree promptly to inform and advise ARC of any fact or situation which, is
or could be reasonably expected to result in a violation of any
representation and warranty contained in herein.
7.5 Non-Competition Agreements. ARC and Selling
Shareholders shall cause to be delivered two (2) business days prior to
closing restrictive covenants for all employees in the form of Exhibit E.
7.6 Investment Intent. The Selling Shareholders shall acquire
the Shares for investment purposes and not with a view toward resale or
distribution except that the Registrable Shares shall be subject to resale
pursuant to a registration statement to be filed for such Shares pursuant
to the Registration Rights Agreement.
8. Conditions Precedent to the Obligations of Aquagenix.
The obligations of Aquagenix to consummate this Agreement and
the transactions contemplated hereby are subject to the satisfaction at or
before the Closing of those conditions imposed upon ARC and the Selling
Shareholders, any of which Aquagenix may in its sole discretion waive.
8.1 Representations and Warranties True. All of the
representations and warranties of ARC and the Selling Shareholders
contained in herein shall be true as of the date of this Agreement, and
shall be deemed to have been made again at and as of the Closing, and
shall be true at and as of the Closing. ARC and the Selling Shareholders
shall have performed or complied in all material respects with all
covenants and conditions required by this Agreement to be performed or
complied with prior to or at the Closing.
8.2 No Obstructive Proceedings. No action or proceedings
other than the Allen Higginbotham lawsuit shall have been instituted
against, and no order, decree or judgment of any court, agency,
commission or governmental authority shall be subsisting against ARC or
the Selling Shareholders which seek, to, or would, render it unlawful as of
the Closing to effect the transactions set forth herein in accordance with
the terms hereof, and no such action shall seek damages in a material
amount by reason of the transactions contemplated hereby. Also, no
legal objection to the transactions contemplated by this Agreement shall
have been received from or threatened by any governmental department
or agency.
8.3 Certificates, Documents, Financial Statements and Due
Diligence Inspection Satisfactory. All certificates, Financial Statements
and documents delivered by ARC and the Selling Shareholders pursuant
to this Agreement shall be satisfactory in form and substance to
Aquagenix and its counsel acting reasonably and in good faith. ARC shall
deliver to Aquagenix an unaudited balance sheet and related financial
statements as of a date 30 days prior to Closing, which shall be in form
and substance satisfactory to Aquagenix. Aquagenix shall be satisfied, as
determined in its sole discretion, that its due diligence inspection of ARC
and the Selling Shareholders has revealed no reason why Aquagenix
should not consummate the transactions contemplated by this Agreement.
8.4 Performance. Each Selling Shareholder shall have
performed and complied with all covenants, obligations and conditions
required by this Agreement to be performed or complied with either prior
to or at the Closing.
8.5 Opinion of Counsel. The Selling Shareholders have
furnished to Aquagenix an opinion of its counsel, acceptable to
Aquagenix, dated the date of the Closing, substantially in the form set
forth in Exhibit 9.5 hereto.
8.6 Governmental Permits and Approvals Corporate
Resolutions. Any and all permits and approvals from any governmental
or regulatory body required for the lawful consummation of the Closing
shall have been obtained.
8.7 Third Party Consents. All necessary consents, permits
and approvals, which may be required in connection with the performance
by ARC and each Selling Shareholder of their obligations under this
Agreement or the continuation of any agreements by ARC after the
Closing shall be obtained.
8.8 Compliance Certificate. Aquagenix shall have received a
certificate signed by the President or a Vice President and the Secretary
of ARC dated as of the Closing and satisfactory in form and substance to
Aquagenix substantially in the form of Exhibit 9.8 hereof.
9. Conditions Precedent to the Obligations of Selling
Shareholder.
The obligations of Selling Shareholders to consummate this
Agreement and the transactions contemplated hereby are subject to the
satisfaction at or before the Closing of each and every one of the following
conditions, any of which Selling Shareholders may, in their sole discretion
waive.
9.1 Representations and Warranties True. All of the
representations and warranties mae by Aquagenix contained herein shall
be true as of the date of this Agreement, shall be deemed to have been
made again at and as of the date of Closing; and shall be true at and as of
the date of Closing; Aquagenix shall have performed and complied with all
covenants and conditions required by this Agreement to be performed or
complied with by it prior to or at the Closing.
9.2 No Obstructive Proceeding. No action or proceedings
shall have been instituted against, and no order, decree or judgment of
any court, agency, commission or governmental authority shall be
subsisting against Aquagenix which seeks to, or would, render it unlawful
as of the Closing to affect the transactions set forth herein in accordance
with the terms hereof, and no such action shall seek damages in a
material amount by reason of the transactions contemplated hereby.
Also, no legal objection to the transactions contemplated by this
Agreement shall have been received from or threatened by any
governmental department or agency.
9.3 Performance by Aquagenix. Aquagenix shall have
performed and complied with all agreements and conditions required by
this Agreement to be performed or complied with by them either prior to or
at the Closing.
9.4 Compliance Certificate. The Selling Shareholders shall
have received a certificate signed by the President or a Vice President
and the Secretary of Aquagenix dated as of the Closing, reasonably
satisfactory in form and substance to ARC substantially in the form of
Exhibit 10.4 hereof.
9.5 Opinion of Counsel. Buyers shall have furnished to ARC
and the Selling Shareholders an opinion of its counsel, acceptable to ARC
and the Selling Shareholders dated the day of this Closing substantially in
the form set forth in Exhibit 10.5 hereof.
10. Conduct of ARC's Business Pending the Closing.
Pending the Closing, and except as otherwise expressly consented
to or approved by Aquagenix in writing:
10.1 Regular Course of Business. ARC will carry on its
business in the ordinary course of business consistent with past practice.
10.2 Amendments. No change or amendment shall be made in
the certificate of incorporation or bylaws of ARC.
10.3 Capital Changes; Dividends; Redemptions. ARC will not
issue or sell any shares of capital stock or other securities acquired
directly or indirectly, by redemption or otherwise, any such capital stock;
reclassify or split up any such capital stock, declare or pay any dividends
thereon in cash, securities or other property or make any other distribution
with respect thereto; or grant or enter into any options, warrants, calls or
commitments of any kind with respect thereto.
10.4 Subsidiaries. ARC will not organize any new subsidiary,
acquire any capital stock or other equity securities of any other
corporation or acquire any entity or ownership interest in any business.
10.5 Organization. ARC shall use its best efforts to preserve
its corporate existence and business organization substantially intact,
including his present relationship with the material customers.
10.6 Certain Changes. Except as may be expressly provided
in writing or elsewhere in this Agreement, ARC will not: (i) borrow any
funds or incur, or assume or become subject to, whether directly or by
way of guarantee or otherwise, any obligation or liability (absolute or
contingent); (ii) discharge or satisfy any claim, liability or obligation
(absolute, accrued, contingent or otherwise), in excess of $5,000; (iii)
prepay any obligation having a fixed maturity of more than 60 days from
the date such obligation was issued or incurred; (iv) permit or allow any of
its property or assets (personal or mixed, tangible or intangible) to be
subject to any pledge, lien or encumbrance; (v) cancel any debts or waive
any claims or rights of substantial value or sell, transfer or otherwise
dispose of any of its properties or assets; (vi) (A) grant any general
increase in the compensation of officers or employees (including any such
increase pursuant to any bonus, pension, profit sharing or other plan, or
commitment or fringe benefit) or (B) any increase in the compensation
payable or to become payable to any employee other than increases
required by an existing agreement which is set forth in the schedules to
this Agreement; (vii) make any single capital expenditure commitment in
excess of $5,000 for additions to its property, plant or equipment or make
aggregate capital expenditures and commitments in excess of $5,000 for
additions to its property, plant or equipment; (viii) pay, loan or advance
any amount to, or sell, transfer or lease its properties or assets to, or enter
into an agreement or arrangement with or for the benefit of, any of its
officers, directors, or shareholders or any affiliate or associate of any of its
officers, directors or shareholders; (ix) agree, whether in writing or
otherwise to do any of the foregoing; and (x) compromise any claim or
lawsuit or institute any action or proceeding involving ARC or any of its
properties or assets in excess of $5,000.
10.7 Contracts. ARC will not enter into any joint venture,
contract or other agreement involving payments of more than $5,000 per
annum or in the aggregate more than $5,000.
10.8 Insurance/Properties. ARC shall continue to insure, at
individual and aggregate limits and scope of coverage not less than those
contained in ARC's current insurance policies, its business and operations
and all property, real, personal and mixed, owned or leased by ARC, with
financial responsible insurance companies against all ordinary and
insurable risks consistent with past practice. All such property shall be
used, operated, maintained and repairs in a customary manner.
10.9 Chemicals and Other Inventories. ARC shall maintain
sufficient chemical and other inventories as historically maintained in the
ordinary course of business.
10.10 Compliance with the Laws. ARC shall duly comply with all
laws applicable to it and its properties, operations, business and
employees.
10.11 Wrongful Action. ARC shall neither enter into any
transaction, take any action or fail to take any action which results in, or
could reasonably expect it to result in a breach of any of the
representations, warranties, disclosure agreements or covenants of the
Selling Shareholders or ARC contained in this Agreement, the exhibits
hereto or any document delivered pursuant to this Agreement.
11. Termination.
11.1 Termination. This Agreement and the transactions
contemplated hereby may be terminated prior to the Closing by mutual
consent of Aquagenix and the Selling Shareholders.
11.2. Effect of Termination. In the event of termination pursuant
to Section 12.1, the transactions contemplated by this Agreement shall be
terminated without further action by Aquagenix or the Selling
Shareholders. If the transactions contemplated by this Agreement are
terminated as provided herein:
(a) Each party will redeliver all documents, work papers
and other material of any other party relating to the transactions
contemplated hereby, whether so obtained before or after the execution
hereof to the party furnishing the same;
(b) All confidential information received by any party
hereto with respect to the business of any other party shall be treated as
confidential in accordance with Section 3.4 of this Agreement; and
(c) No party hereto shall have any liability or further
obligation to any other party to this Agreement (i) except as stated in
Sections 3.4, 6.1 and Section 12 and (ii) except that if such termination
results from the willful failure of any party to fulfill a condition to
performance of any other party or to perform a covenant contained in this
Agreement or from a material or willful breach by any party to this
Agreement, such party shall be fully liable for any and all damages, costs
and expenses (including but not limited to reasonable counsel fees)
sustained or incurred by the other parties hereto.
12. Additional Agreements.
12.1 Agreement Not to Compete.
(a) During the period commencing on the date hereof
and ending eight (8) years therefrom, each Selling Shareholder
individually, hereby covenants and agree that they will not, directly or
indirectly: (i) as an individual proprietor, partner, stockholder, officer,
employee, director, consultant, agent, joint venturer, investor, lender, or in
any other capacity whatsoever, alone or in association with others, own,
manage, operate, control or participate in the ownership, management,
operation or control of, or work for or permit the use of his name by, or be
connected in any manner with, any "Prohibited Activities" (which shall
mean algae and aquatic weed control, industrial vegetation management,
right of way and terrestrial vegetation management business including but
not limited to wetland planting, upland planting, wetland management,
maintenance of lakes and roadside applications) in the states of Florida,
Georgia, South Carolina, North Carolina and Alabama and in any other
county and state where the Company conducts business during the
restricted period, or (ii) otherwise solicit or attempt to solicit any customers
or employees or potential customers of Aquagenix or ARC.
(b) The restrictions against competition set forth in
subsection (a) above are considered by the parties to be reasonable for
the purposes of protecting the legitimate business interests of Aquagenix
and to ensure Aquagenix obtains the benefit of its bargain hereunder.
Accordingly, it is the desire and intent of the parties that the provisions of
subsection (a) be enforced to the fullest extent permissible under the laws
and public policies of each jurisdiction in which enforcement is sought. If
any provisions of subsection (a) are adjudicated to be invalid, void or
unenforceable, the invalid, void or unenforceable provisions shall be
deemed amended (with respect only to the jurisdiction in which such
adjudication is made) in such manner as to render them enforceable and
to effectuate as nearly as possible the original intentions and agreement
of the parties. In the event of any breach of the covenants set forth in
subsection (a), the running of the non-compete period described therein
shall be tolled for so long as such breach continues.
(c) The Selling Shareholders acknowledge that
Aquagenix would be irreparably injured and that monetary damages
would not provide an adequate remedy to Aquagenix in the event of a
breach or threatened breach of the provisions of subsection (a).
Accordingly, the Selling Shareholders agree that, in addition to any other
remedy available to Aquagenix, Aquagenix shall be entitled to seek
injunctive, specific performance and other equitable relief to prevent or
restrain the breach or threatened breach of subsection (a), and Aquagenix
shall be entitled to receive reimbursement from the Selling Shareholders
for all reasonable attorneys' fees and expenses incurred by Aquagenix in
enforcing these provisions if it is the prevailing party. If the Selling
Shareholders are the prevailing party, the Selling Shareholders shall be
entitled to receive reimbursement from the Company for all reasonable
attorneys' fees and expenses incurred by the Selling Shareholders.
(d) If Aquagenix takes any action at law or in equity to
enforce the provisions of this Section 13(d), the prevailing party shall be
entitled to all fees, costs and expenses, including attorneys' fees, trial and
appellate level,in connection with such enforcement from the non-prevailing
party.
(e) In the event that any Selling Shareholder shall be in
violation of the aforementioned restrictive covenants, then the time
limitation thereof with respect to the defaulting party shall be extended for
a period of time equal to the period of time during which breach or
breaches should occur; and in the event Aquagenix should be required to
seek relief from a court of competent jurisdiction, then the covenant shall
be extended for a period of time equal to the pendency of such
proceeding, including appeals.
13. Indemnification by Selling Shareholders.
13.1 Obligation of Selling Shareholders to Indemnify. Each
Selling Share-holder jointly and severally agrees to indemnify, defend and
hold harmless Aquagenix and its directors, officers, employees, affiliates
and assigns ("Aquagenix Indemnitees") from and against any losses,
liabilities, damages, deficiencies, all suits, proceedings, investigations,
claims, charges, assessments, costs or expenses (including, but not
limited to interest, penalties and reasonable attorneys' fees and
disbursements) incurred or suffered by the Aquagenix Indemnitees or any
of them, whether suit is instituted or not, and, if instituted, whether at any
trial and appellate level, and whether raised by the parties hereto or any
third party ("Loss") based upon, arising out of or otherwise due to:
(a) any false and inaccurate representation or warranty
made by or on behalf of the Selling Shareholders contained in this
Agreement or in any document or other writing delivered pursuant to this
Agreement;
(b) Any breach or default in the performance, covenant
or agreement of Selling Shareholders contained in this Agreement or in
any document or other writing delivered pursuant to this Agreement;
(c) Facts or circumstances existing on or prior to the
Closing Date which give rise to claims by any third parties against
Aquagenix, Aquagenix Indemnitees or ARC, including (but not limited to)
any claims arising from any service rendered by ARC.
13.2 Claims by Third Parties. Promptly after receipt by
Aquagenix of any demand, claim or circumstances which, with the lapse
of time, would give rise to a claim or the commencement (or threatened
commencement) of any action, proceeding or investigation (an "Asserted
Liability") that may result in a Loss, Aquagenix shall properly give written
notice thereof (the "Claims Notice") to the Selling Shareholders The
Claims Notice shall describe the Asserted Liability in reasonable detail,
and shall indicate the amount (if stated) of the Loss that has been or may
be suffered by Aquagenix. If no written objection is received or, if
received or agreement is reached as to the amount of such loss,
Aquagenix shall thereupon have the right to recover the amount of such
claim, from the Selling Shareholders.
13.3 Defensive Claims by Third Parties. If a third party claim is
asserted which might result in a Loss giving rise to payment or
indemnification under Section 14.1, Aquagenix shall, with reasonable
promptness, provide the Selling Shareholders notice of any such claim,
make available to the Selling Shareholders all information (within
Aquagenix's knowledge or control) relevant material to such claim and
otherwise keep the Selling Shareholders informed of the progress of any
defense, settlement or the disposition of the claim. The Selling
Shareholders shall fully cooperate in the defense, settlement or other
disposition of such claim; provided that any failure on the part of
Aquagenix to comply with this section shall not affect Aquagenix's right to
receive indemnification or payment under this Section 14, unless such
failure shall cause material prejudice to the Selling Shareholders. The
Selling Shareholders shall have the right to participate in the defense,
settlement or other disposition of any claim in which one or more Selling
Shareholders is named as a party and to be represented in the
proceedings related to such claim by their own legal counsel; provided
that such counsel is approved by Aquagenix (which approval shall not be
unreasonably withheld) and all costs and expenses of such counsel are
born by the Selling Shareholders.
14. Indemnification by Aquagenix
14.1. Obligation of Aquagenix to Indemnify. Aquagenix hereby
agrees to indemnify, defend and hold harmless Selling Shareholders from
and against any losses, liabilities, damages, deficiencies, lawsuits,
proceedings, investigations, claims, charges, assessments, costs or
expenses, including interest, penalties and reasonable attorneys fees and
disbursements incurred or suffered by the Selling Shareholders, whether
a suit is instituted or not, and if instituted, whether any trial at appellate
level and whether raised by the parties hereto or any third party loss
based upon, rising out of, or otherwise due to (a) any false or inaccurate
representation or warranty made by or on behalf of Aquagenix contained
in this Agreement or in any document or otherwise pursuant to this
Agreement; (b) any breach or default in the performance, covenant or
agreement of Aquagenix contained in this Agreement or in any document
or other writing delivered pursuant to this Agreement; (c) facts or
circumstances existing on or prior to the closing date which give rise to
claims by any third parties against Aquagenix, including, but not limited to,
any claims arising from any service rendered by Aquagenix.
14.2 Claims by Third Parties. Promptly after receipt by Selling
Shareholders of any demand, claim or circumstances which the lapse of
time would give rise to a claim with a commencement (or threatened
commencement) of any action, proceeding or investigation (and asserted
liability), that may result in a loss, Selling Shareholders shall promptly give
written notice thereof (of claims notice) to Aquagenix. The claims notice
shall describe the asserted liability in reasonable detail, shall indicate the
amount, if stated, of the loss that has been or may be suffered by Selling
Shareholders. If no written objection is received, or if received agreement
is reached as to the amount of such loss, Selling Shareholders shall
thereon have the right to recover the amount of such claim from
Aquagenix.
14.3 Defensive Claims by Third Parties. If a third party claim is
asserted which might result in a loss giving rise to payment or
indemnification under Section 15.1, Selling Shareholders shall, with
reasonable promptness, provide Aquagenix notice of any such claim,
make available to Aquagenix all information, within Selling Shareholders
knowledge or control, relevant material to such claim and otherwise keep
Aquagenix informed of the progress of any defense, settlement or
disposition of the claim. Aquagenix shall fully cooperate in defense,
settlement, or other disposition of such claim; provided that any failure on
the part of Selling Shareholders to comply with this section shall not effect
Selling Shareholders' right to receive indemnification or payment under
this Section 15 unless such failure shall cause material prejudice to
Aquagenix. Aquagenix shall have the right to participate in the defense,
settlement or other disposition of any claim in which Aquagenix or its
related company is named as a party to be represented in the
proceedings related to such claim by its own legal counsel, provided that
such counsel is approved by Selling Shareholders (which approval shall
not be unreasonably withheld) and all costs and expenses for such
counsel are borne by Aquagenix.
15. General
15.1 Entire Agreement. All Exhibits and Schedules hereto shall
be deemed to be incorporated into and made a part of this Agreement.
This Agreement, together with the Exhibits and Schedules hereto, and
any related agreements contain the entire agreement among the parties
and there are no agreements, representations, or warranties by any of the
parties hereto which are not set forth herein. This Agreement may not be
amended or revised except by a writing signed by all parties hereto.
15.2 Separate Counterparts. This Agreement may be
executed in several identical counterparts, all of which when taken
together shall constitute but one instrument.
15.3 Parties in Interest. This Agreement is binding on and shall
inure to the benefit of the parties and their respective heirs and permitted
successors and assigns. Nothing in this Agreement is intended to confer
any right or remedy or by reason of this Agreement on any person other
than the Selling Shareholder or Aquagenix and their respective heirs,
successors and permitted assigns.
15.4 Assignment. This Agreement may not be assigned by the
Selling Shareholders. Aquagenix may assign this Agreement to
Aquagenix or any affiliate wholly owned by Aquagenix without consent of
the Selling Shareholders and such assignment shall not in any way effect
the terms, conditions or enforceability of this Agreement.
15.5 Notices. All notices hereunder shall be in writing and shall
be delivered or mailed by registered or certified mail, postage and fees
prepaid, to the party to be notified at the party's address shown below.
Notices which are hand delivered shall be effective on delivery. Notices
which are mailed shall be effective on the fifth day after mailing.
Aquagenix, Inc.
6500 N.W. 15th Avenue
Fort Lauderdale, Florida 33309
Attention: Andrew Chesler
With a copy to:
Atlas, Pearlman, Trop & Borkson, P.A.
200 East Las Olas Boulevard
Suite 1900
Fort Lauderdale, Florida 33301
Attn: Charles B. Pearlman
Selling Shareholders:
140 South Wiggins Road
Plant City, Florida 33566
Attn: Raymond A. Spirnock and Shirley J. Spirnock
With a copy to:
Frost, O'Toole & Saunders
395 South Central Avenue
Bartow, Florida 33830
15.6 Gender. All pronouns used herein shall include the
masculine, feminine and neuter gender, as the context requires.
15.7 Governing Law. The execution, interpretation, and
performance of this Agreement shall be governed by the laws of the State
of Florida, not including its law of conflict of laws, which apply to contracts
executed and performed solely in Florida.
15.8 Jurisdiction.
(a) Jurisdiction. Any suit, action or proceeding, whether
claim or counterclaim, arising out of or relating to this Agreement or any
related agreement or which in any way relates, directly or indirectly, to the
Sale or the dealings of the parties with respect thereto, shall be instituted
solely in the Circuit Court for the 17th Judicial Circuit in and for Broward
County, Florida, or the United States District Court for the Southern
District of Florida, and each party irrevocably consents and submits to the
jurisdiction and venue of such courts. Each party also irrevocably
appoints and constitutes the Secretary of the State of Florida as its agent
to accept and acknowledge on its or his behalf all service of process in
connection with any such matter and irrevocably waives any objection
which it may now or hereinafter have to the venue of any suit, action or
proceeding brought in such court and any claim that such court is an
inconvenient forum. Each party further agrees that service of process in
accordance with this paragraph shall be deemed in every respect effective
and valid personal service of process upon it or him.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed all as of the day and year first above
written.
AQUAGENIX, INC.
By: /s/Andrew Chesler
Name: Andrew Chesler
Title: Chairman of the Board
SELLING SHAREHOLDERS:
/s/Raymond A. Spirnock
Raymond A. Spirnock
/s/Shirley J. Spirnock
Shirley J. Spirnock
AQUATIC AND RIGHT OF WAY CONTROL, INC.
By: /s/Raymond A. Spirnock
Name: Raymond A. Spirnock
Title: President
EXHIBIT "B"
Registration Rights Agreement
REGISTRATION RIGHTS AGREEMENT, dated as of June 7, 1996,
between Aquagenix, Inc., a Delaware corporation (the "Company"), and
Aquatic Right of Way Control, Inc., a Florida
corporation (hereinafter referred to as "ARC").
1. Registration Under the Securities Act of 1933. None of the Shares
have been registered for purposes of public distribution under the Securities
Act of 1933.
As used herein, the term "Registrable Security" means 250,000 Common
Shares of the Company (the "Shares") and any shares of Common Stock issued upon
any stock split or stock dividend in respect of such Shares; provided, however,
that with respect to any particular Registrable Security, such security shall
cease to be a Registrable Security when, as of the date of determination, (i) it
has been effectively registered under the Act or (ii) it has ceased to be
outstanding. The term "Registrable Securities" means any and/or all of the
securities falling within the foregoing definition of a "Registrable Security."
2. Registration Rights. Within thirty (30) days of the closing of the
ARC (as defined) transaction, the Company shall prepare a Registration Statement
on Form S-3 (or comparable) and use its best efforts to effect the registration
under the Act of the Registrable Securities,at the Company's sole cost and ex-
pense provided that (a)the holders of the Registrable Securities (the "Holders")
shall pay any and all (i) underwriting and broker-dealer discounts, commissions
and non-accountable expenses of any underwriter or broker-dealer in connection
with the sale of the Registrable Securities,(ii)the fees and expenses of any
legal counsel selected by the Holders to represent them in connection with the
sales of the Registrable Securities and, (iii) all transfer, income and other
taxes, and (b) the Holders shall furnish the Company with such appropriate
information in connection therewith as the Company shall reasonably request in
writing.
3. Covenants with Respect to Registration.
(a) The Company shall pay all costs, fees and expenses in
connection with the Registration Statements filed pursuant hereto including,
without limitation, the Company's legal and accounting fees, printing expenses,
and blue sky fees and expenses.
(b) The Company will take all necessary action which may be
required in qualifying or registering the Registrable Securities included in a
Registration Statement, for offering and sale under the securities or blue sky
laws of such states as are requested by the holders of such securities, pro-
vided, however, that in no event shall the Company be required to register the
Registrable Securities in any state in which such registration would cause the
Company to be obligated to qualify to do business in such state or to execute a
general consent to service or process.
(c) The Company shall indemnify any Holder of the
Registrable Securities to be sold pursuant to any Registration Statement and any
underwriter or person deemed to be an underwriter under the Act and each person,
if any, who controls such Holder or underwriter or person deemed to be an
underwriter within the meaning of Section 15 of the Act or Section 20(a) of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), against all loss,
claim, damage,expense or liability(including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which any
of them may become subject under the Act, the Exchange Act or otherwise,
insofar as such losses, claims, damages, expenses or liabilities (or actions in
respect thereof)arise out of or are based upon(i)any untrue statement or alleged
untrue statement of a material fact contained in such Registration Statement or
any preliminary or final prospectus constituting a part thereof or any amendment
or supplement thereto (collectively, the "Offering Documents"), or (ii) the
omission or alleged omission by the Company to state in the Offering Documents
a material fact required to be stated therein or necessary to make the state-
ments therein, in light of the circumstances under which they were made, not
misleading; provided, however, that the Company will not be liable in any such
case to any one of the Holder(s) to the extent that any such loss, claim,damage,
expense or liability arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with written information furnished to the Company by such
Holder for use in the preparation of the Offering Documents.
(d) Any holder of Registrable Securities to be sold pursuant to
a registration statement,and its successors and assigns,shall severally,and not
jointly,indemnify the Company,its officers and directors and each person,if any,
who controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, against all loss, claim, damage, expense or liability
(including all expenses reasonably incurred in investigating, preparing or
defending against any claim whatsoever) to which they may become subject under
the Act, the Exchange Act or otherwise, insofar as such losses, claims, damages,
expenses or liabilities (or actions in respect thereof) arise out of or are
based upon(i)any untrue statement or alleged untrue statement of a material
fact contained in the Offering Documents,or(ii)the omission or alleged
omission to state in the Offering Documents a material fact required to be
stated therein or necessary to make the statements therein,in light of the
circumstances under which they were made,not misleading;but in each case,
only if and to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon or in
conformity with written information furnished to the Company by such Holder
specifically for use in the preparation of the Offering Documents.
(e) If the indemnification provided for herein is unavailable to
any indemnified party in respect to any losses, claims, damages, liabilities or
expenses referred to therein,then the indemnifying party,in lieu of indemnifying
such indemnified party, will contribute to the amount paid or payable by such
indemnified party, as a result of such losses, claims, damage, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the Company on the one hand, and of the Holder of the Registrable Securities who
seeks contribution or from whom contribution is sought on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims,damages,liabilities or expenses as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand, and such
Holder of the Registrable Securities on the other hand, will be determined with
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission to state a fact relates to information
supplied by the Company or the Holder, and their relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission, provided, however, that amount which such Holder of Registrable
Securities shall be required to contribute pursuant to this subparagraph (e)
shall not be in excess of the amount received by the Holder from the sale of
its securities.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, as of the day and year first above written.
AQUAGENIX, INC.
By: /s/Andrew Chesler
Name: Andrew Chesler
Title: Chairman of the Board
Aquatic and Right of Way Control, Inc.
By: /s/Raymond A. Spirnock
Name: Raymond A. Spirnock
Title: President
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and
entered into June 7, 1996 and effective as of the same date (the "Effective
Date"), between AQUAGENIX, INC., a Delaware corporation (the "Company"),
whose principal place of business is 6500 N.E. 15th Avenue, Fort Lauderdale,
Florida 33309, and Ray Spirnock, an individual (the "Employee"), whose address
is 140 South Wiggins Road, Plant City, Florida 33566.
R E C I T A L S
A. The Company provides, through its wholly owned subsidiaries, aquatic
management and maintenance services ("Business/Business Activities").
B. The Company has established a valuable reputation and goodwill in its
Business, with experience in all aspects of the Company and the Company's
Business.
C. The Employee has experience in the Business.
D. The Employee has been actively engaged in the operations of Aquatic and
Right of Way Control, Inc. ("ARC") as an officer, director and shareholder.
E. The Company desires to employ the Employee and the Employee desires
to be so employed, subject to the terms and conditions of this Agreement.
F. The Employee, by virtue of the Employee's employment with the
Company will become familiar with and possess the manner, methods, trade
secrets and other confidential information pertaining to the Company's Business,
including the Company's client base.
NOW, THEREFORE, in consideration of the mutual agreements herein
made, the Company and the Employee do hereby agree as follows:
1. Recitals. The above recitals are true, correct, and are herein
incorporated by reference.
2. Employment. The Company hereby employs the Employee and
the Employee hereby accepts such employment, upon the terms and conditions
hereinafter set forth.
3. Duties During Employment Period. During the "Term" (including
any renewals thereof) as defined in Section 5 of this Agreement, the Employee
shall diligently devote 80% of the Employee's full time and efforts to the
business and affairs of the Company and shall have such duties as determined and
assigned by and at the direction of the Company's Vice President of Sales or
President, to whom the Employee shall directly report; and shall devote full
attention and render exclusive, full time services to the Company and shall be
employed solely by the Company according to the terms and conditions of this
Agreement.
4. Compensation and Benefits.
a. Salary. The Employee shall be paid a base salary (the
"Base Salary"), payable monthly,at an annual rate of no less than Fifty Thousand
Dollars ($50,000) per year.
b. Bonus. As additional compensation, the Employee shall
receive a bonus ("Bonus") as determined by the Company's President based upon
a percentage of five(5%)percent of the burdened job cost profits of new accounts
brought to the Company by the Employee subsequent to the date hereof ("New
Accounts") as determined by the Company under its cost analysis methods as
updated from time to time by the Company. Such bonus shall continue to be paid
for a period of up to three (3) years after the termination of employment here-
under in accordance with the Company's cost analysis methods as updated from
time to time.
c. Employee Benefits. The Employee shall be entitled to
participate in all benefit programs of the Company currently existing or here-
after made available to salaried employees, except that Employee agrees not to
participate in the health insurance provided by the Company to its other
employees.
d. Health Insurance. The Company shall reimburse Employee
for health insurance to the extent of the average cost for health insurance pro-
vided by the Company to its other employees.
e. Vacation. During each fiscal year of the Company, the
Employee shall be entitled to four (4) weeks of vacation time to be utilized or
paid for each year, or accrue and carry over into the following year; provided
however, that the Employee shall evidence reasonable judgment with regard to
appropriate vacation scheduling.
f. Business Expense Reimbursement. The Employee shall be
entitled to receive proper reimbursement for all reasonable, out-of-pocket
expenses incurred directly by the Employee (in accordance with the policies and
procedures established by the Company for its employees), in performing services
hereunder, provided the Employee properly accounts therefor.
g. Automobile Expenses. The Company shall provide the
Employee with an automobile or an automobile allowance of Five Hundred
($500) Dollars per month at the option of Company. The Company shall also be
responsible for all expenses in connection with such automobile including,but
not limited to,routine maintenance,insurance and gas and the Company shall also
reimburse Employee for the use of his personal automobile for business purposes
at the rate determined by the Company from time to time.
5. Term. The Term of employment hereunder will commence on the
Effective Date as set forth above and end two (2) years from the Effective Date
("Term"), unless terminated pursuant to Section 6 of this Agreement, and
thereafter this Agreement may be renewed upon terms and conditions mutually
agreed to by the parties hereto ("Renewal Term"). Thereafter this Agreement may
be renewed at the mutual consent of both parties.
6. Consequences of Termination of Employment.
a. Termination by the Company for Cause.
(1) Nothing herein shall prevent the Company from
terminating Employment for "Cause," as hereinafter defined. The
Employee shall continue to receive salary only for the period ending with
the date of such termination as provided in this Section 6(a). Any rights
and benefits the Employee may have in respect of any other compensation
shall be determined in accordance with the terms of such other
compensation arrangements or such plans or programs.
(2) "Cause" shall mean (A) committing or participating
in an injurious act of fraud, gross neglect, misrepresentation,
embezzlement or dishonesty against the Company; (B) committing or
participating in any other injurious act or omission wantonly, willfully,
recklessly or in a manner which was grossly negligent against the
Company, monetarily or otherwise; (C) refusing to perform in any
material respect any of the Employee's obligations hereunder at the time
and in the manner set forth herein; (D) engaging in a criminal enterprise
involving moral turpitude;(E)an act or acts (I) constituting a felony under
the laws of the United States or any state thereof or(II)if applicable,loss
of a Florida and Georgia state or federal license required for the Employee
to perform the Employee's material duties or responsibilities for the
Company; provided, however, that this Subsection 6(a)(2)(E) shall not be
applicable if such loss of license shall not be a result of any actions or
inactions outside the Employee's control; (F) any assignment of this
Agreement by the Employee in violation of Section 19 of this Agreement;
or (G) breach of the Stock Purchase Agreement
(3) Notwithstanding anything else contained in this
Agreement, this Agreement will not be deemed to have been terminated
for Cause unless and until there shall have been delivered to the Employee
a notice of termination stating that the Employee committed one of the
types of conduct set forth in this Section 6(a) contained in this Agreement
and specifying the particulars thereof.
b. Termination by the Company Other than for Cause. The
foregoing notwithstanding, the Company may terminate the Employee's
employment for whatever reason it deems appropriate; provided, however, that in
the event such termination is not based on Cause, as provided in Section 6(a)
above, the Company may terminate at any time and the Employee shall have no
further obligation to perform the duties to the Company, as described in
Section 3 of this Agreement, and shall immediate vacate from the premises and
relinquishall keys, and Confidential Information (as hereinafter defined) to the
Company;provided that subject to the provisions set forth herein and
specifically asdescribed in this Section 6 and Sections 7 and 8 of this
Agreement, the Employeeshall receive Severance Compensation from the Company
pursuant to Section 6(e)of this Agreement from the date of such termination.
c. Voluntary Termination. In the event the Employee
terminates the Employee's employment on the Employee's own volition prior to
the expiration of the Term or Renewal Term of this Agreement, such termination
shall constitute a voluntary termination and in such event the Employee shall be
limited to the same rights and benefits as provided in connection with Section
6(a).
d. Death. In the event of the death of the Employee during the
Term or Renewal Term of the Agreement, salary and bonus described in 4b hereof
shall be paid to the Employee's designated beneficiary,or,in the absence of such
designation,to the estate or other legal representative of the Employee only for
the period ending with the date of death and the Company will have no further
obligations to the Employee or to the Employee's designated beneficiary, or, in
the absence of such designation, to the estate or other legal representative of
the Employee.
e. Severance Compensation. Subject to compliance by the
Employee of the provisions of Sections 7 and 8 of this Agreement or as otherwise
provided in this Agreement, in the event of any termination of Employee's
employment Without Cause under Section 6(c), following the effective date of the
Employee's effective date of termination of his employment, the Employee shall
continue to receive(1)the base salary which existed at the time of the Employees
termination of this Agreement (the "Severance Compensation") for a period of six
(6) months thereafter; (2) all accrued but unused vacation through the date of
termination,(3)the Employee's pro-rata share of the Bonus for the year,(payable
through month-end of the last full month prior to the date of termination);and
(4 each and every one of the benefits of a employee of the Company which existed
at the time of the Employee's termination (collectively the "Severance
Compensation and Benefits").
7. Covenant Not to Compete. Employee acknowledges and
recognizes the highly competitive nature of Company's Business and that the
goodwill, continued patronage, and specifically the names and addresses of the
Company's clients which includes any persons, partnerships, corporations,
professional associations or other organizations for whom the Company has
performed Business Activities (the "Company Clients") constitute a substantial
asset of the Company having been acquired through considerable time, money and
effort. Employee further acknowledges and recognizes that during the course of
the Employee's employment, Employee will receive specialized training, specific
knowledge of Company's Business, access to trade secrets and Confidential
Information, as defined in Section 8, participate in business and hiring
decisions, and that it would be impossible for Employee to work for a
competitor without using and divulging this valuable confidential information.
That Employee acknowledges that Company is without an adequate remedy at law in
the event this covenant is violated. Employee further acknowledges that this
covenant not to compete is an independent covenant within this Agreement. This
covenant shall survive this Agreement and shall be treated as an independent
covenant for the purposes of enforcement. The Employee recognizes that the
terms of this covenant are reasonable and necessary for the protection of the
Company's business because the value of Employee's services will be enhanced
by his association with Company. Provided the Company is not in a material
breach of the Agreement, Employee agrees to the following:
a. that for a period of twenty four (24) months after
termination of the Employee's employment under this Agreement or any Renewal
Term or extension thereof (the "Restricted Period"), for whatever reason and
anywhere within 100 miles of any Point of Presence (POP) of the Company (the
"Restricted Area"), Employee will not, individually or in conjunction with
others,directly or indirectly, engage in any Business Activities other than on
behalf of the Company and as agreed by the Company and Employee, whether as an
officer, director, proprietor, employer, employee, partner, independent
contractor, investor (other than as a holder of less than 1% of the outstanding
capital stock of a publicly traded corporation), consultant, advisor, agent or
otherwise.
b. That during the Restricted Period and within the Restricted
Area, Employee will not, indirectly or directly, compete with the Company by
soliciting, inducing or influencing any of the Company's Clients which have a
business relationship with the Company at any time during the Restricted Period
to discontinue or reduce the extent of such relationship with the Company.
c. That during the Restricted Period and within the Restricted
Area, Employee will not(a)directly or indirectly recruit or solicit any employee
or agent of the Company to discontinue such employment or agency relationship
with the Company, or (b) employ or seek to employ, or cause or permit any
business which competes directly or indirectly with the Business of the Company
(the "Competitive Business") to employ or seek to employ for any Competitive
Business any person who is then (or was at any time within six (6) months prior
to the date Employee or the Competitive Business employs or seeks to employ such
person) employed by the Company.
d. That during the Restricted Period, Employee will not
interfere with, disrupt or attempt to disrupt any past, present or prospective
relationship, contractual or otherwise, between the Company and any Company's
Clients, Employees or Agents.
e. If the Employee shall be subject to the terms of any other
non-compete terms or provisions with Employer and those terms shall be more
restrictive than those set forth herein, the more restrictive terms to Employee
shall prevail.
8. Non-Disclosure of Confidential Information.
a. Employee acknowledges that the Company's trade secrets,
private or secret processes, methods and ideas, as they exist from time to time,
customer lists and information concerning the Company's products, services,
business records and plans,inventions,product design information,price structure
and pricing, discounts, costs,computer programs and listings, source code and/or
subject code, copyright, trademark, proprietary information, formulae,protocols,
forms, procedures,training methods,development,technical information, know-how,
show-how, new product and service development, advertising budgets, past,
present and future marketing, activities and procedures,method for operating the
Company's Business, credit and financial data concerning the Company and the
Company's Clients and client lists,which client lists shall not only mean one or
more of the names and addresses of the clients of the Company but it shall also
encompass any and all information whatsoever regarding them, including their
needs, and marketing, advertising, promotional and sales strategies, sales
presentations, research information, revenues, acquisitions, practices and plans
and information which is embodied in written or otherwise recorded form, and
other information of a confidential nature not known publicly or by other
companies selling to the same markets and specifically including information
which is mental, not physical (collectively, the "Confidential Information") are
valuable, special and unique assets of the Company, access to and knowledge of
which have been provided to Employee by virtue of Employee's association with
the Company. In light of the highly competitive nature of the industry in which
the Company's business is conducted, Employee agrees that all Confidential
Information, heretofore or in the future obtained by Employee as a result of
Employee's association with the Company shall be considered confidential.
b. The Employee agrees that the Employee shall (1) hold in
confidence and not disclose or make available to any third party any such
Confidential Information obtained directly or constructively from the Company,
unless so authorized in writing by the Company;(2)exercise all reasonable
efforts to prevent third parties from gaining access to the Confidential
Information; (3) not use, directly or indirectly, the Confidential Information
in any respect of its business, except as necessary to evaluate the information
in order to perform the Employee's duties and responsibilities to the Company;
(4) restrict the disclosure or availability of the Confidential Information to
those who have read and understand this Agreement and who have a need to know
the information in order to achieve the purposes of this Agreement without the
prior consent of the Company; (5) not copy or modify any Confidential
Information without prior written consent of the Company; provided, however,
that such copy or modification of any Confidential Information does not include
any modifications or copying which would otherwise prevent the Employee from
performing his/her duties and responsibilities to the Company; (6) take such
other protective measures as may be reasonably necessary to preserve the
confidentiality of the Confidential Information; and (7) relinquish and require
all of its employees to relinquish all rights it may have in any matter, such
as drawings, documents, models, samples, photographs, patterns, templates,
molds, tools or prototypes,which may contain, embody or make use of the
Confidential Information;promptly deliver to the Company any such matter as
the Company may direct at any time; and not retain any copies or other
reproductions thereof.
c. Employee further agrees (1) that Employee shall promptly
disclose in writing to the Company all ideas, inventions, improvements and
discoveries which may be conceived, made or acquired by Employee as the direct
or indirect result of the disclosure by the Company of the Confidential
Information to Employee; (2) that all such ideas, inventions, improvements and
discoveries conceived, made or acquired by Employee. alone or with the
assistance of others, relating to the Confidential Information, shall be the
property of the Company and shall be treated as Confidential Information in
accordance with the provisions hereof and that Employee shall not acquire any
intellectual property rights under this Agreement except the limited right to
use set forth in this Agreement; (3) that Employee shall assist in the
preparation and execution of all applications, assignments and other documents
which the Company may deem necessary to obtain patents, copyrights and the like
in the United States and in jurisdictions foreign thereto, and to otherwise
protect the Company.
d. Excluded from the Confidential Information, and therefore
not subject to the provisions of this Agreement, shall be any information which
the Employee can show (1) at the time of disclosure, is in the public domain as
evidenced by printed publications; (2) after the disclosure, enters the public
domain by way of printed publication through no fault of the Employee; (3) by
written documentation was in its possession at the time of disclosure and which
was not acquired directly or indirectly from the Company; or (4) by written
documentation was acquired, after disclosure, from a third party who did not
receive it from the Company, and who had the right to disclose the information
without any obligation to hold such information confidential. The foregoing
exceptions shall apply only from and after the date that the information becomes
generally available to the public or is disclosed to the Employee by a third
party,respectively.Specific information shall not be deemed to be within the
foregoing exceptions merely because it is embraced by more general information
in the public domain. Additionally, any combination of features shall not be
deemed to be within the foregoing exceptions merely because individual features
are in the public domain. If the Employee intends to avail himself of any of
the foregoing exceptions, the Employee shall notify the Company in writing of
his intention to do so and the basis for claiming the exception.
e. Upon written request of the Company, Employee shall
return to the Company all written materials containing the Confidential
Information. Employee shall also deliver to the Company written statements
signed by Employee certifying all materials have been returned within five (5)
days of receipt of the request.
9. Covenants as Essential Elements of this Agreement; Survival of
Covenants. It is understood by and between the parties hereto that the
foregoing covenants by Employee contained in Sections 7 and 8 of this Agreement
shall be construed to be agreements independent of any other element of
Employee's relationship with the Company.The existence of any other claim or
cause of action, whether predicated on any other provision in this Agreement,
or otherwise, as a result of the relationship between the parties, shall not
constitute a defense to the enforcement of the covenants in this Agreement
against Employee.
10. Remedies and Enforcement.
a. Employee acknowledges and agrees that the Company's
remedy at law for a breach or threatened breach of any of the provisions of
Sections 7 or 8 herein would be inadequate and the breach shall be per se deemed
as causing irreparable harm to the Company. In recognition of this fact, in the
event of a breach by Employee of any of the provisions of Sections 7 or 8,
Employee agrees that, in addition to any remedy at law available to the Company,
including, but not limited to monetary damages, the Company, posting a bond in
the amount to be determined by the court or magistrate, shall be entitled to
obtain equitable relief in the form of specific performance, temporary
restraining order, temporary or permanent injunction or any other equitable
remedy which may then be available to the Company.
b. If Employee violates the restrictions set forth in this
Agreement, then the duration of the restrictions under Sections 7 or 8 shall be
extended for an amount of time equal to the number of days that Employee
violated the Agreement until the date that the Company obtain an order enjoining
the Employee from said violation.
c. In the event that, despite the express agreement of
Employee and Company, any provision stated herein shall be determined by any
court or other tribunal of competent jurisdiction to be unenforceable for any
reason whatsoever, the parties agree that the provision shall be interpreted to
extend only over the maximum period of time for which it may be enforceable;
and/or over the maximum geographical area as to which it may be enforceable,
and/or to the maximum extent in any and all other respects as to which it may be
enforceable, all as determined by such court or tribunal.
d. In the event that Employee challenges this Agreement and
an injunction is issued staying the implementation of the restrictions imposed
herein, the time remaining on the restrictions shall be tolled until the
challenge is resolved by final adjudication, settlement or otherwise, except
that the time remaining on the restrictions shall not be tolled during any
period in which Employee is unemployed. If a court finds in favor of Company,
the restrictions will be imposed for the amount of time that remains on the
restrictions at the time they were tolled, or at the time of the court's
decision of the restrictions were not tolled, as the case may be.
e. The provisions of Sections 7 and 8 of this Agreement, as
well as the period of time, geographical areas and types and scope of restric-
tions of Employee's activities specified herein are intended to be divisible;
and, in the event any provision herein shall be deemed invalid or unenforceable
in any respect, as to any one or more periods of time, geographical areas,
business or activities, the remaining provisions shall not thereby be affected
but shall remain in full force and effect; and this Agreement shall be deemed
to be amended without further action by the parties hereto to the extent
necessary to render it valid and enforceable.
f. The Employee further acknowledges and agrees that in the
event of a breach, or threatened breach of the provisions of Sections 7 or 8,the
Company will suffer immediate and irreparable harm which said harm is
presumed to occur, and that Company shall be entitled to receive from a court of
competent jurisdiction, a temporary restraining order with notice to Employee,as
well as the entry of a preliminary and permanent injunction. Said right to an
injunction shall be in addition to and not in limitation of any other rights or
remedies Company may have for damages or otherwise.
g. It is further expressly understood and agreed that the
provisions of this Agreement shall apply whether this Agreement is terminated by
Company or Employee or upon its expiration or termination.
h. If the Employee breaches this provision and the Company
seeks an injunction or other legal remedy to interpret or enforce this covenant,
then the non-prevailing party agrees to pay all reasonable attorneys' fees and
costs of the Company both for the trial and any appeal.
i. Nothing herein contained shall be construed as prohibiting
the Company from pursuing any other remedies available to it for such breach or
threatened breach.
11. Key Man Life Insurance. The Employee agrees to submit to a
physical examination in connection with key man life insurance the Company
intends to secure within thirty (30) days of notification of same.
12. Attorneys' Fees. The Employee agrees that in the event that the
Company is required to engage an attorney to enforce the terms of the covenants
in Sections 7 or 8 of this Agreement, the unsuccessful party shall pay all costs
and expenses of the prevailing party's attorney or firm, whether or not a
complaint or suit is filed with any court of competent jurisdiction.
13. Freedom to Contract. The Employee represents and warrants that
the Employee has the right to negotiate and enter into this Agreement, and the
grant of the rights herein granted and that this Agreement does not breach,
interfere with or conflict with any other contractual agreement, covenant not to
compete, option, right of first refusal,or other existing business relationship.
Employee acknowledges that this representation is a material inducement to
Company entering into this Agreement and in the event Employee breaches this
warranty, Employee agrees to indemnify and hold harmless Company from any
and all claims, actions, losses, damages, including but not limited to,
reasonable ttorneys' fees and costs.
14. Effect on Prior Agreements. This Agreement supersedes any and
all prior or written agreements in their entirety between the parties, which
shall be void and of no further force and effect after the date of this
Agreement.
15. Notices. Any notice required or permitted to be given under the
terms of this Agreement shall be sufficient if in writing and if sent postage
prepaid by registered or certified mail, return receipt requested, by overnight
delivery, by courier; or by confirmed telecopy, in the case of the Employee to
the Employee's last place of business or residence as shown on the records of
the Company, or in the case of the Company to its principal office as set forth
in the introductory paragraph, or such other place as it may designate.
16. Waiver. Unless agreed in writing, the failure of either party, at any
time, to require performance by the other of any provisions hereunder shall not
affect its right thereafter to enforce the same, nor shall a waiver by either
party of any breach of any provision hereof be taken or held to be a waiver of
any other preceding or succeeding breach of any term or provision of this Agree-
ment. No extension of time for the performance of any obligation or act shall
be deemed to be an extension of time for the performance of any other
obligation or act hereunder.
17. Complete Agreement. This Agreement contains the entire
agreement between the parties hereto with respect to the contents hereof and
supersedes all prior agreements and understandings between the parties with
respect to such matters, whether written or oral. Neither this Agreement nor any
term or provision hereof may be changed, waived, discharged or amended in any
manner other than by an instrument in writing, signed by the party against which
the enforcement of the change, waiver, discharge or amendment is sought.
18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one agreement.
19. Binding Effect/Assignment. This Agreement shall be binding
upon the parties hereto, their heirs, legal representatives, successors and
assigns. This Agreement shall not be assignable by the Employee but shall be
assignable by the Company in connection with the sale, transfer or other
disposition of its business or to any of the Company's affiliates controlled
by or under common control with the Company. In the event of a sale, transfer
or other disposition of the Company's business to a non-affiliate, the Employee
has the right to consent to an assignment of this Agreement or terminate
pursuant to Section 6(c) herein.
20. Governing Law and Venue. This Agreement shall become valid
when executed and accepted by Company at its offices in Broward County,
Florida. The parties agree that it shall be deemed made and entered into in the
State of Florida and shall be governed and construed under and in accordance
with the laws of the State of Florida without giving effect to any principles of
conflicts of law. Company and Employee acknowledge and agree that the U.S.
District for the Southern District of Florida, or if such court lacks juris-
diction, the 17th Judicial Circuit (or its successor) in and for Broward County,
Florida, shall be the exclusive venue and proper forum in which to adjudicate
any case or controversy arising either, directly or indirectly, under or in
connection with this Agreement and the parties further agree that, in the event
of litigation arising out of or in connection with this Agreement in these
courts, they will not contest or challenge the jurisdiction or venue of these
courts. Employee further agrees that he must bring an action arising out of the
this Agreement within six (6) months from the date of accrual of cause of action
or forever be barred from bringing said action.
21. Headings. The headings of the sections are for convenience only and
shall not control or affect the meaning or construction or limit the scope or
intent of any of the provisions of this Agreement.
22. Survival. Any termination of this Agreement shall not affect the
ongoing provisions of this Agreement which shall survive such termination in
accordance with their terms.
23. Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein. If any
court determines that any provision of Sections 7 or 8 hereof is unenforceable
because of the duration or scope of such provision, such court shall have the
power to reduce the scope or duration of such provision, as the case may be,
and, in its reduced form, such provision shall then be enforceable.
24. Construction. This Agreement shall be construed within the fair
meaning of each of its terms and not against the party drafting the document.
THE PARTIES TO THIS AGREEMENT HAVE READ THIS
AGREEMENT, UNDERSTAND ITS TERMS AND CONDITIONS, HAVE
HAD THE OPPORTUNITY TO CONSULT WITH INDEPENDENT COUNSEL
OF THEIR OWN CHOICE AND AGREE TO BE BOUND BY ITS TERMS
AND CONDITIONS.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written in Broward County, Florida.
AQUAGENIX, INC.
By: /s/Andrew P. Chesler
Andrew P. Chesler,
President
EMPLOYEE
/s/Ray Spirnock
Ray Spirnock
