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 12, 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)
Page 1
ITEM 5. Other Events
On June 12, 1996, one of the directors of Aquagenix, Inc. (the
"Company"), namely Mr, Jeffrey T. Katz purchased 125,000 shares ("Shares") of
the common stock of the Company pursuant to the terms of a Subscription Agree-
ment,dated as of June 12, 1996, between the Company and Mr Jeffrey T. Katz.
The aggregate purchase price was $500,000, all of which has been received in
cash by the Company.
On June 27, 1996, the Company completed two additional equity private
placements of 125,000 shares ("Shares") each to Tarragona Fund, Inc and Alpha
Atlas Fund, Ltd, at a purchase price of $4.00 per Share. The total purchase
price for the two equity private placements was $1,000,000, all of which has
been received in cash by the Company.
All of the above 375,000 Shares have been acquired solely for invest-
ment purposes. The Shares have not been registered under the the Securities Act
of 1933,as amended, or the securities laws of any state, based upon an exemption
from such registration requirements for non-public offerings pursuant to an
exemption under the Act.The Shares may not be sold or transferred unless they
have been first registered under the Act and all applicable state securities
law, or unless exemptions from such registration provisions are permitted under
the said Act.
Page 2
ITEM 7. Pro Forma Financial Statements and Exhibits
(a) Pro Forma Consolidated Balance Sheet (Unaudited) of Aquagenix, Inc.
The following pro forma consolidated balance sheet as of May 31, 1996 give
effect the above-mentioned equity private placements completed in June 1996
and the acquisition of Aquatic and Right of Way Control, Inc. ("ARC") on
June 7, 1996, assuming the transactions took place at the end of the period
presented. The computation of the resulting pro forma net tangible assets as
of May 31, 1996 has been separately presented in the attached schedule.
Reference is made to the Stock Purchase Agreement, dated as of June 7, 1996,
by and among the Company, ARC and Ray Spirnock and Shirley Spirnock, the share-
holders of ARC, filed as Exhibit 10.81 to the Current Report on Form 8-K dated
June 7, 1996.
(b) Exhibits
10.82 Subscription Agreement, dated as of June 12, 1996, between the Company
and Mr Jeffrey T. Katz.
10.83 Subscription Agreement, dated as of June 28, 1996, between the Company
and Tarragona Fund, Inc.
10.84 Subscription Agreement, dated as of June 28, 1996, between the Company
and Alpha Atlas Fund, Ltd.
Page 3
AQUAGENIX, INC. & SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED)
AS AT MAY 31, 1996
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA PRO FORMA
Assets AQUAGENIX ADJUSTMENTS ADJUSTMENTS CONSOLIDATED
<S> <C> <S> (a) <C> (b) <C>
Current assets:
Cash and cash equivalents $ 704,032 1,500,000 98,779 2,302,811
Accounts receivable, net of allowance for doubtful acc 647,574 95,650 743,224
Income tax receivable 486,239 486,239
Inventories 450,609 450,609
Net assets of discontinued operations 1,347,640 1,347,640
Prepaid expenses and other 367,359 165 367,524
Total current assets 4,003,453 1,500,000 194,594 5,698,047
Property and equipment, net 1,841,249 48,414 1,889,663
Intangible assets, net 3,148,973 3,148,973
Deferred financing costs, net 209,948 209,948
Other assets 129,744 557 130,301
Total assets $ 9,333,367 1,500,000 243,565 11,076,932
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term debt $ 170,542 170,542
Borrowings under credit agreements 404,415 404,415
Accounts payable 847,969 86,993 934,962
Other current liabilities 113,240 2,813 116,053
Total current liabilities 1,536,166 0 89,806 1,625,972
Long-term debt, net of current maturities 5,263,979 5,263,979
Total liabilities 6,800,145 0 89,806 6,889,951
Stockholders' equity:
Common stock, par value 32,266 3,750 2,700 38,716
Additional paid-in capital 8,507,931 1,496,250 (2,100) 10,002,081
Retained earnings (deficit) (6,006,975) 153,159 (5,853,816)
Total stockholders' equity 2,533,222 1,500,000 153,759 4,186,981
Total liabilities and stockholders' equity $ 9,333,367 1,500,000 243,565 11,076,932
</TABLE>
Pro Forma Adjustments
(a) Record common stock issued in connection with certain equity private place-
ments in June 1996.
(b) Record the acquisition of Aquatic and Right of Way Control, Inc. pursuant
to the terms of a Stock Purchase Agreement, dated as of June 7, 1996 which
has been filed as Exhibit 10.81 to the Current Report on Form 8-K dated
June 7, 1996. The Company has accounted for the acquisition using the
pooling of interests method.
Page 4
AQUAGENIX, INC. & SUBSIDIARIES
COMPUTATION OF PRO FORMA NET TANGIBLE ASSETS
AS AT MAY 31 ,1996
Pro Forma Stockholders' Equity $ 4,186,981
Less: Goodwill (2,816,582)
Pro Forma Net Tangible Assets $ 1,370,399
Page 5
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 under-
signed, hereunto duly authorized.
AQUAGENIX, INC.
Date: June 28, 1996 By: /s/ Helen Chia
Helen Chia, Chief Financial Officer
Page 6
INDEX TO EXHIBITS
Exhibit Description Pages
10.82 Subscription Agreement, dated as of June 12, 1-5
1996, between the Company and Mr Jeffrey
Katz.
10.83 Subscription Agreement, dated as of June 28, 1-6
1996, between the Company and Tarragona
Fund, Inc.
10.84 Subscription Agreement, dated as of June 28 1-6
1996, between the Company and Alpha Atlas
Fund, Ltd.
SUBSCRIPTION AGREEMENT
Aquagenix, Inc.
6500 N.W. 15th Avenue
Fort Lauderdale, Florida 33309
Gentlemen:
Pursuant to the discussion between Aquagenix, Inc., a Delaware
corporation (the "Company") and Jeffrey T. Katz (the "Undersigned"), the
Undersigned is writing to advise you of the following terms and conditions
under which the Undersigned hereby offers to subscribe (the "Offer") for
the purchase of One Hundred Twenty-Five Thousand (125,000) shares
("Shares") of Common Stock, par value $.01 per share, at a purchase
price of $4.00 per Share for an aggregate amount of $500,000.
1. Subscription. Subject to the terms and conditions
hereinafter set forth in this Subscription Agreement, the Undersigned
hereby offers to purchase the Shares for an aggregate purchase price of
$500,000.
If the Offer is accepted, the Shares shall be paid for by the
delivery of $500,000 by wire transfer payable to Aquagenix, Inc.,
BankAtlantic, 1750 East Sunrise Boulevard, Fort Lauderdale, Florida,
33304; ABA #267083763, Account #0055937302 and the certificate
evidencing the Shares shall be delivered to the Undersigned immediately
thereafter.
2. Representations and Warranties. In order to induce the
Company to accept this subscription, the Undersigned hereby represents
and warrants to, and covenants with, the Company as follows:
(a) The Undersigned has received and reviewed the
Company's Annual Reports on Form 10-KSB for the years ended
December 31, 1994 and December 31, 1995 (collectively the
"Disclosure Documents");
(b) The Undersigned has had a reasonable opportunity
to ask questions of and receive answers from the Company
concerning the Company and the Shares, and all such questions, if
any, have been answered to the full satisfaction of the
Undersigned;
(c) The Undersigned has such knowledge and expertise
in financial and business matters that the Undersigned is capable
of evaluating the merits and risks involved in an investment in the
Company;
(d) Except as set forth in the Disclosure Documents, no
representations or warranties have been made to the Undersigned
by or on behalf of the Company or any agent, employee or affiliate
of the Company and in entering into this transaction the Under-
signed is not relying upon any information, other than that
contained in the Disclosure Documents and the results of
independent investigation by the Undersigned;
(e) The Undersigned understands that (A) the Shares
have not been registered under the Act or the securities laws of
any state, based upon an exemption from such registration
requirements for non-public offerings pursuant to an exemption
under the Act; (B) the Shares are and will be "restricted securities",
as said term is defined in Rule 144 of the Rules and Regulations
promulgated under the Act; (C) the Shares may not be sold or
otherwise transferred unless they have been first registered under
the Act and all applicable state securities laws, or unless
exemptions from such registration provisions are available with
respect to said resale or transfer; (D) other than as set forth in the
Disclosure Documents, the Company is under no obligation to
register the Shares under the Act or any state securities laws, or to
take any action to make any exemption from any such registration
provisions available; (E) the certificates for the Note Shares and
the Warrant Shares will bear a legend to the effect that the transfer
of the securities represented thereby is subject to the provisions
hereof; and (F) stop transfer instructions will be placed with the
transfer agent for the Shares;
(f) The Undersigned is acquiring the Shares solely for
the account of the Undersigned, for investment purposes only, and
not with a view towards the resale or distribution thereof;
(g) The Undersigned will not sell or otherwise transfer
any of the Shares, or any interest therein, unless and until (i) said
Shares shall have first been registered under the Act and all
applicable state securities laws; or (ii) the Undersigned shall have
first delivered to the Company a written opinion of counsel (which
counsel and opinion (in form and substance) shall be reasonably
satisfactory to the Company), to the effect that the proposed sale or
transfer is exempt from the registration provisions of the Act and all
applicable state securities laws;
(h) The Undersigned has full power and authority to
execute and deliver this Subscription Agreement and to perform
the obligations of the Undersigned hereunder; and this Subscription
Agreement is a legally binding obligation of the Undersigned in
accordance with its terms;
(i) The Undersigned is an "accredited investor," as such
term is defined in Regulation D of the Rules and Regulations
promulgated under the Act and the Undersigned understands that
the Company has determined that the exemption from the
registration provisions of the Securities Act of 1933, as amended
(the "Act"), which is based upon non-public offerings are applicable
to the offer and sale of the Shares, based, in part, upon the
representations, warranties and agreements made by the
Undersigned herein and in the this Subscription Agreement.
3. The Undersigned understands that this subscription is not
binding upon the Company unless and until the Company accepts
it, which acceptance is at the sole discretion of the Company and is
to be evidenced by the Company's execution of this Subscription
Agreement where indicated.
4. The Undersigned agrees to indemnify the Company and
hold it harmless from and against any and all losses, damages, liabilities,
costs and expenses which it may sustain or incur in connection with the
breach by the Undersigned of any representation, warranty or covenant
made by the Undersigned herein.
5. Neither this Subscription Agreement nor any of the rights of
the Undersigned hereunder may be transferred or assigned by the
Undersigned.
6. This Subscription Agreement (i) may only be modified by a
written instrument executed by the Undersigned and the Company; and
(ii) sets forth the entire agreement of the Undersigned and the Company
with respect to the subject matter hereof; (iii) shall be governed by the
laws of the State of Florida applicable to contracts made and to be wholly
performed therein; and (iv) shall inure to the benefit of, and be binding
upon the Company and the Undersigned and its respective heirs, legal
representatives, successors and assigns.
7. Unless the context otherwise requires, all personal pronouns
used in this Subscription Agreement, whether in the masculine, feminine
or neuter gender, shall include all other genders.
8. All notices or other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered
personally or mailed by certified or registered mail, return receipt
requested, postage prepaid, as follows: if to the Undersigned, to 26 Lower
Shad Road, Pound Ridge, NY 10576 and if to the Company, to
Aquagenix, Inc., 6500 N.R. 15th Avenue, Fort Lauderdale, Florida 33309
or to such other address as the Company or the Undersigned shall have
designated to the other by like notice.
9. JURISDICTIONAL NOTICE
FOR FLORIDA RESIDENTS: EACH FLORIDA RESIDENT WHO
SUBSCRIBES FOR THE PURCHASE OF SECURITIES HEREIN HAS
THE RIGHT, PURSUANT TO SECTION 517.061(11)(A)(5) OF THE
FLORIDA SECURITIES ACT, TO WITHDRAW HIS SUBSCRIPTION FOR
THE PURCHASE AND RECEIVE A FULL REFUND OF ALL MOINES
PAID WITHIN THREE (3) BUSINESS DAYS AFTER THE EXECUTION
OF THE SUBSCRIPTION AGREEMENT OR PAYMENT FOR THE
PURCHASE HAS BEEN MADE, WHICHEVER IS LATER.
WITHDRAWAL WILL BE WITHOUT ANY FURTHER LIABILITY TO ANY
PERSON. TO ACCOMPLISH THIS WITHDRAWAL, A SUBSCRIBER
NEED ONLY SEND A LETTER OR TELEGRAM TO THE COMPANY AT
THE ADDRESS SET FORTH IN THIS CONFIDENTIAL TERM SHEET
INDICATING HIS INTENTION TO WITHDRAW.
FOR RESIDENTS OF ALL STATES: THE SHARES OFFERED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF CERTAIN
STATES AND ARE BEING OFFERED AND SOLD IN RELIANCE ON
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID
ACT AND SUCH LAWS. THE SHARES ARE SUBJECT IN VARIOUS
STATES TO RESTRICTIONS ON TRANSFERABILITY AND RESALE
AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. THE SHARES HAVE
NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION
OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE
FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE
MERITS OF THIS OFFERING OR THE ACCURACY OF ADEQUACY OF
THE CONFIDENTIAL TERM SHEET. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
10. No Waiver. Notwithstanding any of the representations,
warranties, acknowledgements or agreements made herein by the
Undersigned, the Undersigned does not thereby or in any manner waive
any rights granted to the Undersigned under federal or state securities
laws.
11. Revocation. The Undersigned agrees that he shall not
cancel, terminate or revoke this Subscription Agreement or any
agreement of the Undersigned made hereunder other than as set forth
under Section 9 above, and that this Subscription Agreement shall survive
the death or disability of the Undersigned.
12. Termination of Subscription Agreement. If the Company
elects to cancel this Subscription Agreement, provided that it returns to
the Undersigned, without interest and without deduction, all sums paid by
the Undersigned, this Offer shall be null and void and of no further force
and effect, and no party shall have any rights against any other party
hereunder.
13. Miscellaneous.
(a) This Subscription Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter
hereof and may be amended only by a writing executed by all parties.
(b) The provisions of this Subscription Agreement shall
survive the execution thereof.
14. Certification. The Undersigned certifies that he has read
this entire Subscription Agreement and that every statement on his part
made and set forth herein is true and complete.
IN WITNESS WHEREOF, the Undersigned has executed this
Subscription Agreement on the date his signature has been subscribed
and sworn to below.
Witness: /s/C.B. Pearlman /s/Jeffrey T. Katz
Jeffrey T. Katz
STATE OF FLORIDA )
)SS:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this 12 day
of June, 1996 by Jeffrey T. Katz, who is personally known to me or who
has produced ____________________ as identification and who did/did
not take an oath.
Notary Public:
Sign /s/ Kirsten E. Johnson
Print Kirsten E. Johnson
State of Florida at Large (Seal)
My Commission Expires: March 14,1999
Commission # CC 445227
Accepted as of the 12 day of June, 1996
AQUAGENIX, INC.
By: /s/ Andrew Chesler
Andrew P. Chesler President
SUBSCRIPTION AGREEMENT
Aquagenix, Inc.
6500 N.W. 15th Avenue
Fort Lauderdale, Florida 33309
Gentlemen:
Pursuant to the discussion between Aquagenix, Inc., a Delaware
corporation (the "Company") and Tarragona Fund, Inc. (the "Undersigned"),
the Undersigned is writing to advise you of the following terms and conditions
under which the Undersigned hereby offers to subscribe (the "Offer") for the
purchase of One Hundred Twenty-Five Thousand (125,000) shares
("Shares") of Common Stock, par value $.01 per share, at a purchase price
of $4.00 per Share for an aggregate amount of $500,000.
1. Subscription. Subject to the terms and conditions hereinafter
set forth in this Subscription Agreement, the Undersigned hereby offers to
purchase the Shares for an aggregate purchase price of $500,000.
If the Offer is accepted, the Shares shall be paid for by the
delivery of $500,000 by wire transfer payable to Aquagenix, Inc.,
BankAtlantic, 1750 East Sunrise Boulevard, Fort Lauderdale, Florida, 33304;
ABA #267083763, Account #0055937302 and the certificate evidencing the
Shares shall be delivered to the Undersigned immediately thereafter.
2. Representations and Warranties.
(i) In order to induce the Company to accept this subscription, the
Undersigned hereby represents and warrants to, and covenants with, the
Company as follows:
(a) The Undersigned has received and reviewed the
Company's Annual Reports on Form 10-KSB for the years ended
December 31, 1994 and December 31, 1995 and the Form 10-QSB
for the quarter ended March 31, 1996 and the Proxy for the fiscal year
ended December 31, 1995 (collectively the "Disclosure Documents");
(b) The Undersigned has had a reasonable opportunity to
ask questions of and receive answers from the Company concerning
the Company and the Shares, and all such questions, if any, have
been answered to the full satisfaction of the Undersigned;
(c) The Undersigned has such knowledge and expertise in
financial and business matters that the Undersigned is capable of
evaluating the merits and risks involved in an investment in the
Company;
(d) Except as set forth herein and in the Disclosure
Documents, no representations or warranties have been made to the
Undersigned by or on behalf of the Company or any agent, employee
or affiliate of the Company and in entering into this transaction the
Undersigned is not relying upon any information, other than that
contained in the Disclosure Documents and the results of
independent investigation by the Undersigned;
(e) The Undersigned understands that (A) the Shares have
not been registered under the Act or the securities laws of any state,
based upon an exemption from such registration requirements for
non-public offerings pursuant to an exemption under the Act; (B) the
Shares are and will be "restricted securities", as said term is defined
in Rule 144 of the Rules and Regulations promulgated under the Act;
(C) the Shares may not be sold or otherwise transferred unless they
have been first registered under the Act and all applicable state
securities laws, or unless exemptions from such registration
provisions are available with respect to said resale or transfer; (D)
other than as set forth in the Disclosure Documents and this
Subscription Agreement, the Company is under no obligation to
register the Shares under the Act or any state securities laws, or to
take any action to make any exemption from any such registration
provisions available; (E) the certificates for the Shares will bear a
legend to the effect that the transfer of the securities represented
thereby is subject to the provisions hereof; and (F) stop transfer
instructions will be placed with the transfer agent for the Shares;
(f) The Undersigned is acquiring the Shares solely for the
account of the Undersigned, for investment purposes only, and not
with a view towards the resale or distribution thereof;
(g) The Undersigned will not sell or otherwise transfer any
of the Shares, or any interest therein, unless and until (i) said Shares
shall have first been registered under the Act and all applicable state
securities laws; or (ii) the Undersigned shall have first delivered to the
Company a written opinion of counsel (which counsel and opinion (in
form and substance) shall be reasonably satisfactory to the
Company), to the effect that the proposed sale or transfer is exempt
from the registration provisions of the Act and all applicable state
securities laws;
(h) The Undersigned is a corporation duly organized under
the laws of Panama; has full power and authority to execute and
deliver this Subscription Agreement and to perform the obligations of
the Undersigned hereunder; and this Subscription Agreement is a
legally binding obligation of the Undersigned in accordance with its
terms;
(i) The Undersigned is an "accredited investor," as such
term is defined in Regulation D of the Rules and Regulations
promulgated under the Act and the Undersigned understands that the
Company has determined that the exemption from the registration
provisions of the Securities Act of 1933, as amended (the "Act"),
which is based upon non-public offerings are applicable to the offer
and sale of the Shares, based, in part, upon the representations,
warranties and agreements made by the Undersigned herein and in
the this Subscription Agreement.
(j) Funding of this Subscription Agreement shall be made
by wire transfer of funds on or before 2:30 P.M. on Friday, June 28, 1996.
(ii) In order to induce the undersigned to enter into this
Subscription Agreement, the Company hereby represents and warrants to,
and covenants with the Company, as follows:
(a) The Company is a corporation duly organized under the laws
of Delaware; has full power and authority to execute and
deliver this Subscription Agreement and perform its obligations
hereunder, and this Agreement is a legally binding obligation
of the Company in accordance with its terms.
(b) The Shares when issued and paid for in accordance with the
terms of this Subscription Agreement will be validly issued and
fully paid and non-assessable; the holders thereof will not be
subject to any personal liability as such holders; all corporate
action required to be taken for the authorization, issuance sale
of the Shares has been duly and validly taken.
(c) The execution and delivery of the Subscription Agreement
does not (i) conflict with or will conflict with, result in a material
breach of, or constitute a default under (x) the articles or
bylaws of the Company; (y) any material contract, indenture
mortgage, deed of trust or other material agreement or
instrument to which the Company is a party or by which any of
the properties or assets of the Company may be bound.
(d) The Company has filed with the Securities and Exchange
Commission ("SEC") Disclosure Documents which reports
were timely filed and which reports do not contain any material
misstatements of facts or omit to state any material facts.
Since the date of filing of the last such report there has been
no material adverse change in the business or financial
condition of the Company. Except as disclosed in the
Disclosure Documents, there are no pending or threatened
litigations or other proceedings which could have a material
adverse effect on the business or financial condition of the
Company, except as described on Schedule 1 hereto.
3. Undertaking to Register Shares. The Company shall file a
registration statement for the Shares within thirty days from the date hereof
and will use its best efforts to cause such registration statement to become
effective six (6) months from the date of this Subscription Agreement.
Notwithstanding anything to the contrary contained herein, if the
Registration Statement for the Shares shall not have become effective within
the time period specified in this Paragraph 3 (the "Registration Date"), the
Company shall for no consideration issue an additional 9,375 shares of Common
Stock to the Undersigned on the Registration Date and an additional 1,562.50
Shares of Common Stock each month thereafter until the Registration
Statement shall be effective.
The Undersigned agrees that the Shares are subject to restriction as
to their disposition until the effective date of the Registration Statement. In
particular, the Undersigned agrees that it will not, without the prior written
consent of the Company, sell, assign, pledge, hypothecate, transfer or
otherwise dispose of, directly or indirectly, the Shares prior to termination of
such six month period. The Undersigned will permit all certificates
evidencing the Shares to be endorsed with the appropriate restrictive
legends, and will consent to the placement of appropriate stock transfer
instructions with the transfer agent of the Company relating to this
restriction.
4. The Undersigned understands that this subscription is not
binding upon either party unless and until accepted by both parties, which
acceptance is at the sole discretion of each party and is to be evidenced by
each party's execution of this Subscription Agreement where indicated.
5. Each party agrees to indemnify the other and hold it harmless
from and against any and all losses, damages, liabilities, costs and expenses
which it may sustain or incur in connection with the breach by the other party
of any representation, warranty or covenant made by the other party herein.
6. Neither this Subscription Agreement nor any of the rights of the
Undersigned hereunder may be transferred or assigned by the Undersigned.
7. This Subscription Agreement (i) may only be modified by a
written instrument executed by the Undersigned and the Company; and (ii)
sets forth the entire agreement of the Undersigned and the Company with
respect to the subject matter hereof; (iii) shall be governed by the laws of the
State of Florida applicable to contracts made and to be wholly performed
therein; and (iv) shall inure to the benefit of, and be binding upon the
Company and the Undersigned and its respective successors and assigns.
8. All notices or other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally
or mailed by certified or registered mail, return receipt requested, postage
prepaid, as follows: if to the Undersigned, to Tarragona, Inc., c/o Maitland &
Co., Skardia House, Finch Road, Box 75, Douglas, Isle of Man, IM99 1EP,
with a copy to Alpha Investment Management, Inc. 499 Park Avenue, New
York, New York 10022, and if to the Company, to Aquagenix, Inc., 6500
N.W. 15th Avenue, Fort Lauderdale, Florida 33309 or to such other address
as the Company or the Undersigned shall have designated to the other by
like notice.
9. JURISDICTIONAL NOTICE
FOR FLORIDA RESIDENTS: EACH FLORIDA RESIDENT WHO
SUBSCRIBES FOR THE PURCHASE OF SECURITIES HEREIN HAS THE
RIGHT, PURSUANT TO SECTION 517.061(11)(A)(5) OF THE FLORIDA
SECURITIES ACT, TO WITHDRAW HIS SUBSCRIPTION FOR THE
PURCHASE AND RECEIVE A FULL REFUND OF ALL MOINES PAID
WITHIN THREE (3) BUSINESS DAYS AFTER THE EXECUTION OF THE
SUBSCRIPTION AGREEMENT OR PAYMENT FOR THE PURCHASE HAS
BEEN MADE, WHICHEVER IS LATER. WITHDRAWAL WILL BE WITHOUT
ANY FURTHER LIABILITY TO ANY PERSON. TO ACCOMPLISH THIS
WITHDRAWAL, A SUBSCRIBER NEED ONLY SEND A LETTER OR
TELEGRAM TO THE COMPANY AT THE ADDRESS SET FORTH IN THIS
CONFIDENTIAL TERM SHEET INDICATING HIS INTENTION TO
WITHDRAW.
FOR RESIDENTS OF ALL STATES: THE SHARES OFFERED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF CERTAIN STATES AND
ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS
FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH
LAWS. THE SHARES ARE SUBJECT IN VARIOUS STATES TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID
ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE SHARES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION,
ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES
PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR
THE ACCURACY OF ADEQUACY OF THE CONFIDENTIAL TERM SHEET.
ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
10. No Waiver. Notwithstanding any of the representations,
warranties, acknowledgements or agreements made herein by the
Undersigned, the Undersigned does not thereby or in any manner waive any
rights granted to the Undersigned under federal or state securities laws.
11. Revocation. The Undersigned agrees that he shall not cancel,
terminate or revoke this Subscription Agreement or any agreement of the
Undersigned made hereunder other than as set forth under Section 9 above,
and that this Subscription Agreement shall survive the death or disability of
the Undersigned.
12. Miscellaneous.
(a) This Subscription Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter
hereof and may be amended only by a writing executed by all parties.
(b) The provisions of this Subscription Agreement shall
survive the execution thereof.
IN WITNESS WHEREOF, the Undersigned has executed this
Subscription Agreement on the date his signature has been subscribed and
sworn to below.
TARRAGONA FUND, INC.
By: /s/P.J. Wentzel
P.J. Wentzel, Director
By: /s/R.L. Worsdale
R.L. Wentzel, Director
Accepted as of the 28 day
of June, 1996
AQUAGENIX, INC.
By: /s/ Andrew Chesler
Andrew P. Chesler, President
SCHEDULE 1
NASDAQ, by letter dated April 3, 1996, advised the Company that as of
December 31, 1995 they had failed to maintain the requisite
net worth for listing on the NASDAQ National Market System. The Company
was granted until July 1, 1996, to correct the deficiency. With the funding of
this Subscription Agreement, together with other financing, obtained by the
Company and the disposition of certain assets relating to the remediation
business, the Company will have complied with the requirements of
NASDAQ National Market System. Filing will be made with NASDAQ to
evidence compliance.
If for any reason the Company had failed to comply their listing would
be moved to the SmallCap rather than National Market System.
SUBSCRIPTION AGREEMENT
Aquagenix, Inc.
6500 N.W. 15th Avenue
Fort Lauderdale, Florida 33309
Gentlemen:
Pursuant to the discussion between Aquagenix, Inc., a Delaware
corporation (the "Company") and Alpha Atlas Holdings, LDC (the
"Undersigned"), the Undersigned is writing to advise you of the following
terms and conditions under which the Undersigned hereby offers to
subscribe (the "Offer") for the purchase of One Hundred Twenty-Five
Thousand (125,000) shares ("Shares") of Common Stock, par value $.01 per
share, at a purchase price of $4.00 per Share for an aggregate amount of
$500,000.
1. Subscription. Subject to the terms and conditions hereinafter
set forth in this Subscription Agreement, the Undersigned hereby offers to
purchase the Shares for an aggregate purchase price of $500,000.
If the Offer is accepted, the Shares shall be paid for by the
delivery of $500,000 by wire transfer payable to Aquagenix, Inc.,
BankAtlantic, 1750 East Sunrise Boulevard, Fort Lauderdale, Florida, 33304;
ABA #267083763, Account #0055937302 and the certificate evidencing the
Shares shall be delivered to the Undersigned immediately thereafter.
2. Representations and Warranties.
(i) In order to induce the Company to accept this subscription, the
Undersigned hereby represents and warrants to, and covenants with, the
Company as follows:
(a) The Undersigned has received and reviewed the
Company's Annual Reports on Form 10-KSB for the years ended
December 31, 1994 and December 31, 1995 and the Form 10-QSB
for the quarter ended March 31, 1996 and the Proxy for the fiscal year
ended December 31, 1995 (collectively the "Disclosure Documents");
(b) The Undersigned has had a reasonable opportunity to
ask questions of and receive answers from the Company concerning
the Company and the Shares, and all such questions, if any, have
been answered to the full satisfaction of the Undersigned;
(c) The Undersigned has such knowledge and expertise in
financial and business matters that the Undersigned is capable of
evaluating the merits and risks involved in an investment in the
Company;
(d) Except as set forth herein and in the Disclosure
Documents, no representations or warranties have been made to the
Undersigned by or on behalf of the Company or any agent, employee
or affiliate of the Company and in entering into this transaction the
Undersigned is not relying upon any information, other than that
contained in the Disclosure Documents and the results of
independent investigation by the Undersigned;
(e) The Undersigned understands that (A) the Shares have
not been registered under the Act or the securities laws of any state,
based upon an exemption from such registration requirements for
non-public offerings pursuant to an exemption under the Act; (B) the
Shares are and will be "restricted securities", as said term is defined
in Rule 144 of the Rules and Regulations promulgated under the Act;
(C) the Shares may not be sold or otherwise transferred unless they
have been first registered under the Act and all applicable state
securities laws, or unless exemptions from such registration
provisions are available with respect to said resale or transfer; (D)
other than as set forth in the Disclosure Documents and this
Subscription Agreement, the Company is under no obligation to
register the Shares under the Act or any state securities laws, or to
take any action to make any exemption from any such registration
provisions available; (E) the certificates for the Shares will bear a
legend to the effect that the transfer of the securities represented
thereby is subject to the provisions hereof; and (F) stop transfer
instructions will be placed with the transfer agent for the Shares;
(f) The Undersigned is acquiring the Shares solely for the
account of the Undersigned, for investment purposes only, and not
with a view towards the resale or distribution thereof;
(g) The Undersigned will not sell or otherwise transfer any
of the Shares, or any interest therein, unless and until (i) said Shares
shall have first been registered under the Act and all applicable state
securities laws; or (ii) the Undersigned shall have first delivered to the
Company a written opinion of counsel (which counsel and opinion (in
form and substance) shall be reasonably satisfactory to the
Company), to the effect that the proposed sale or transfer is exempt
from the registration provisions of the Act and all applicable state
securities laws;
(h) The Undersigned is a corporation duly organized under
the laws of the Cayman Islands; has full power and authority to
execute and deliver this Subscription Agreement and to perform the
obligations of the Undersigned hereunder; and this Subscription
Agreement is a legally binding obligation of the Undersigned in
accordance with its terms;
(i) The Undersigned is an "accredited investor," as such
term is defined in Regulation D of the Rules and Regulations
promulgated under the Act and the Undersigned understands that the
Company has determined that the exemption from the registration
provisions of the Securities Act of 1933, as amended (the "Act"),
which is based upon non-public offerings are applicable to the offer
and sale of the Shares, based, in part, upon the representations,
warranties and agreements made by the Undersigned herein and in
the this Subscription Agreement.
(j) Funding of this Subscription Agreement shall be made
by wire transfer of funds on or before 2:30 P.M. on Friday, June 28, 1996.
(ii) In order to induce the undersigned to enter into this
Subscription Agreement, the Company hereby represents and warrants to,
and covenants with the Company, as follows:
(a) The Company is a corporation duly organized under the laws
of Delaware; has full power and authority to execute and
deliver this Subscription Agreement and perform its obligations
hereunder, and this Agreement is a legally binding obligation
of the Company in accordance with its terms.
(b) The Shares when issued and paid for in accordance with the
terms of this Subscription Agreement will be validly issued and
fully paid and non-assessable; the holders thereof will not be
subject to any personal liability as such holders; all corporate
action required to be taken for the authorization, issuance sale
of the Shares has been duly and validly taken.
(c) The execution and delivery of the Subscription Agreement
does not (i) conflict with or will conflict with, result in a material
breach of, or constitute a default under (x) the articles or
bylaws of the Company; (y) any material contract, indenture
mortgage, deed of trust or other material agreement or
instrument to which the Company is a party or by which any of
the properties or assets of the Company may be bound.
(d) The Company has filed with the Securities and Exchange
Commission ("SEC") Disclosure Documents which reports
were timely filed and which reports do not contain any material
misstatements of facts or omit to state any material facts.
Since the date of filing of the last such report there has been
no material adverse change in the business or financial
condition of the Company. Except as disclosed in the
Disclosure Documents, there are no pending or threatened
litigations or other proceedings which could have a material
adverse effect on the business or financial condition of the
Company, except as described on Schedule 1 hereto.
3. Undertaking to Register Shares. The Company shall file a
registration statement for the Shares within thirty days from the date hereof
and will use its best efforts to cause such registration statement to become
effective six (6) months from the date of this Subscription Agreement.
Notwithstanding anything to the contrary contained herein, if the
Registration Statement for the Shares shall not have become effective within
the time period specified in this Paragraph 3 (the "Registration Date"), the
Company shall for no consideration issue an additional 9,375 Shares of
Common Stock to the Undersigned on the Registration Date and an additional
1,562.5 Shares of Common Stock each month thereafter until the Registration
Statement shall become effective.
The Undersigned agrees that the Shares are subject to restriction as
to their disposition until the effective date of the Registration Statement. In
particular, the Undersigned agrees that it will not, without the prior written
consent of the Company, sell, assign, pledge, hypothecate, transfer or
otherwise dispose of, directly or indirectly, the Shares prior to termination of
such six month period. The Undersigned will permit all certificates
evidencing the Shares to be endorsed with the appropriate restrictive
legends, and will consent to the placement of appropriate stock transfer
instructions with the transfer agent of the Company relating to this
restriction.
4. The Undersigned understands that this subscription is not
binding upon either party unless and until accepted by both parties, which
acceptance is at the sole discretion of each party and is to be evidenced by
each party's execution of this Subscription Agreement where indicated.
5. Each party agrees to indemnify the other and hold it harmless
from and against any and all losses, damages, liabilities, costs and expenses
which it may sustain or incur in connection with the breach by the other party
of any representation, warranty or covenant made by the other party herein.
6. Neither this Subscription Agreement nor any of the rights of the
Undersigned hereunder may be transferred or assigned by the Undersigned.
7. This Subscription Agreement (i) may only be modified by a
written instrument executed by the Undersigned and the Company; and (ii)
sets forth the entire agreement of the Undersigned and the Company with
respect to the subject matter hereof; (iii) shall be governed by the laws of the
State of Florida applicable to contracts made and to be wholly performed
therein; and (iv) shall inure to the benefit of, and be binding upon the
Company and the Undersigned and its respective successors and assigns.
8. All notices or other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally
or mailed by certified or registered mail, return receipt requested, postage
prepaid, as follows: if to the Undersigned, c/o International Fund
Administration, Ltd., 48 Par La Ville Road, Suite 464, Hamilton HM11
Bermuda and if to the Company, to Aquagenix, Inc., 6500 N.W. 15th Avenue,
Fort Lauderdale, Florida 33309 or to such other address as the Company or
the Undersigned shall have designated to the other by like notice.
9. JURISDICTIONAL NOTICE
FOR FLORIDA RESIDENTS: EACH FLORIDA RESIDENT WHO
SUBSCRIBES FOR THE PURCHASE OF SECURITIES HEREIN HAS THE
RIGHT, PURSUANT TO SECTION 517.061(11)(A)(5) OF THE FLORIDA
SECURITIES ACT, TO WITHDRAW HIS SUBSCRIPTION FOR THE
PURCHASE AND RECEIVE A FULL REFUND OF ALL MOINES PAID
WITHIN THREE (3) BUSINESS DAYS AFTER THE EXECUTION OF THE
SUBSCRIPTION AGREEMENT OR PAYMENT FOR THE PURCHASE HAS
BEEN MADE, WHICHEVER IS LATER. WITHDRAWAL WILL BE WITHOUT
ANY FURTHER LIABILITY TO ANY PERSON. TO ACCOMPLISH THIS
WITHDRAWAL, A SUBSCRIBER NEED ONLY SEND A LETTER OR
TELEGRAM TO THE COMPANY AT THE ADDRESS SET FORTH IN THIS
CONFIDENTIAL TERM SHEET INDICATING HIS INTENTION TO
WITHDRAW.
FOR RESIDENTS OF ALL STATES: THE SHARES OFFERED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF CERTAIN STATES AND
ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS
FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH
LAWS. THE SHARES ARE SUBJECT IN VARIOUS STATES TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID
ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE SHARES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION,
ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES
PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR
THE ACCURACY OF ADEQUACY OF THE CONFIDENTIAL TERM SHEET.
ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
10. No Waiver. Notwithstanding any of the representations,
warranties, acknowledgements or agreements made herein by the
Undersigned, the Undersigned does not thereby or in any manner waive any
rights granted to the Undersigned under federal or state securities laws.
11. Revocation. The Undersigned agrees that he shall not cancel,
terminate or revoke this Subscription Agreement or any agreement of the
Undersigned made hereunder other than as set forth under Section 9 above,
and that this Subscription Agreement shall survive the death or disability of
the Undersigned.
12. Miscellaneous.
(a) This Subscription Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter
hereof and may be amended only by a writing executed by all parties.
(b) The provisions of this Subscription Agreement shall
survive the execution thereof.
IN WITNESS WHEREOF, the Undersigned has executed this
Subscription Agreement on the date his signature has been subscribed and
sworn to below.
ALPHA ATLAS HOLDINGS, LDC
By: /s/Douglas Siebierski
V.P., Alpha Investment Management, Inc.
Accepted as of the 28 day
of June, 1996
AQUAGENIX, INC.
By: /s/ Andrew Chesler
Andrew P. Chesler President
SCHEDULE 1
NASDAQ, by letter dated April 3, 1996, advised the Company that as
of December 31, 1995 they had failed to maintain the requisite net worth for
listing on the NASDAQ National Market System. The Company was granted
until July 1, 1996, to correct the deficiency. With the funding of this
Subscription Agreement, together with other financing, obtained by the
Company and the disposition of certain assets relating to the remediation
business, the Company will have complied with the requirements of
NASDAQ National Market System. Filing will be made with NASDAQ to
evidence compliance.
If for any reason the Company had failed to comply with their listing
requirements, the Company would be moved to the SmallCap rather than
National Market System.
