U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996.
TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________ TO ________ .
Commission File No. 0-24490
AQUAGENIX, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 65-0419263
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6500 Northwest 15th Avenue, Fort Lauderdale, Florida 33309
(Address of principal executive offices)
(305) 975-7771
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past
90 days.
Yes X No
The number of shares outstanding of the issuer's Common Stock, $.01 Par Value,
as of May 2, 1995 was 3,226,558.
Transitional Small Business Disclosure Format: Yes No X
Page 1 of 65 Pages
Exhibit Index at Page 18
AQUAGENIX, INC.
FORM 10-QSB
INDEX
PART I. FINANCIAL INFORMATION PAGE
Item 1: Financial Statements
Consolidated Balance Sheets as of December 31, 1995
and March 31, 1996 (unaudited) 3
Consolidated Statements of Operations for the three months
ended March 31, 1995 and March 31, 1996 (unaudited) 4
Consolidated Statements of Cash Flows for the three
months ended March 31, 1995 and March 31, 1996
(unaudited) 5
Notes to Consolidated Financial Statements 6
Pro Forma Condensed Consolidated Balance Sheet as of
March 31, 1996 7
Pro Forma Condensed Consolidated Statement of Operations
for three months ended March 31, 1996 8
Item 2: Management's Discussion and Analysis or Plan of
Operation 9-13
PART II. OTHER INFORMATION 14-16
SIGNATURES 17
<TABLE>
<CAPTION>
AQUAGENIX, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, March 31,
Assets 1995 1996
<S> <C> <C> (Unaudited)
Current assets:
Cash and cash equivalents $ 687,183 $ 810,280
Marketable securities 639,095 0
Accounts receivable, net of allowance for doubtful
accounts of $40,632 and $29,529, respectively 997,567 761,703
Income tax receivable 618,003 486,239
Inventories 370,497 333,386
Net assets of discontinued operations 0 1,192,720
Prepaid expenses and other 254,575 180,054
Total current assets 3,566,920 3,764,382
Property and equipment, net 1,746,016 1,844,814
Intangible assets, net 3,222,013 3,177,583
Deferred financing costs, net 146,875 188,460
Other assets 93,239 73,439
Total assets $ 8,775,063 $ 9,048,678
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term debt $ 628,578 $ 575,077
Borrowings under credit agreements 522,317 404,415
Accounts payable 562,712 473,491
Net liabilities of discontinued operations 449,550 0
Other current liabilities 411,438 251,220
Total current liabilities 2,574,595 1,704,203
Long-term debt, net of current maturities 5,032,388 5,023,898
Total liabilities 7,606,983 6,728,101
Stockholders' equity:
Preferred stock, par value $.01, 1,000,000 shares
authorized, no shares issued and outstanding 0 0
Common stock, par value $.01, 10,000,000 shares
authorized, 3,210,367 and 3,215,273 shares issued
and outstanding, respectively 32,104 32,153
Additional paid-in capital 8,419,164 8,451,615
Retained earnings (deficit) (7,332,385) (6,163,191)
Unrealized gain on securities 49,197 0
Total stockholders' equity 1,168,080 2,320,577
Total liabilities and stockholders' equity $ 8,775,063 $ 9,048,678
The accompanying notes are an integral part of the Consolidated Financial Statements
</TABLE>
3
<TABLE>
<CAPTION>
AQUAGENIX, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
1995 1996
<S> <C> <C>
Revenues - Aquatic management operations $ 1,365,152 $ 2,252,634
Costs and expenses:
Costs of services 662,748 1,094,942
Selling, general and administrative 493,799 650,634
Depreciation and amortization 48,485 137,089
Total costs and expenses 1,205,032 1,882,665
Operating income 160,120 369,969
Interest income 69,139 41,311
Interest expenses (9,783) (160,790)
Income from continuing operations before income taxes 219,476 250,490
Income tax provision 45,600 0
Income from continuing operations 173,876 250,490
Discontinued operations:
Loss from environmental remediation business segme (9,491) 0
net of income taxes
Change in allowance for estimated phase-out and other
losses from environmental remediation 0 869,507
Net income $ 164,385 $ 1,119,997
Earnings per common and common equivalent shares:
Continuing operations - primary $ 0.05 $ 0.08
Continuing operations - assuming full dilution 0.05 0.08
Discontinued operations 0.00 0.26
Net income per common share 0.05 0.34
Weighted average common and common equivalent shares
outstanding:
Primary 3,216,886 3,354,026
Assuming full dilution 3,231,454 3,354,026
The accompanying notes are an interal part of the Consolidated Financial Statements
</TABLE>
4
<TABLE>
<CAPTION>
AQUAGENIX, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
________
Three Months Ended
March 31,
1995 1996
<S> <C> <C>
Cash flows from operating activities:
Net income $ 164,385 $ 1,119,997
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 48,485 137,089
(Gain) loss on sale of property and equipment (500) 12,011
Gain on sale of securities (3,035) 0
Provision for doubtful accounts 0 26,368
Discontinued operations (539,016) (1,620,200)
Net change in operating assets and liabilities 127,559 175,488
Net cash used in operating activities (202,122) (149,247)
Cash flows from investing activities:
Proceeds from sale of marketable securities 446,109 624,187
Proceeds from sale of property and equipment 500 10,196
Purchase of property and equipment (44,593) (206,598)
Net cash provided by investing activities 402,016 427,785
Cash flows from financing activities:
Repayments of credit agreements 0 (117,902)
Proceeds from other borrowings 1,144 0
Payments of notes payable and long-term debt (58,666) (70,039)
Issuance of common stock 0 32,500
Net cash used in financing activities (57,522) (155,441)
Cash and cash equivalents:
Increase 142,372 123,097
Beginning balance 270,847 687,183
Ending balance $ 413,219 $ 810,280
Supplemental cash flow information:
Cash paid for interest 9,783 56,623
Cash received for income tax refund 0 131,764
The accompanying notes are an integral part of the Consolidated Financial Statements
</TABLE>
5
AQUAGENIX, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements, as
of and for the three month periods ended March 31, 1995 and
March 31, 1996, do not include all disclosures provided in the
audited annual consolidated financial statements. These
unaudited consolidated financial statements should be read in
conjunction with the consolidated financial statements and the
footnotes thereto, together with management's discussion and analysis
of financial condition and results of operations, contained in the
Company's Annual Report on Form 10-KSB for the year ended
December 31, 1995 of Aquagenix, Inc. (the "Company"), as filed
with the Securities and Exchange Commission. The December 31,
1995 balance sheet was derived from audited consolidated
financial statements, but does not include all disclosures required
by generally accepted accounting principles.
In the opinion of management, the accompanying unaudited
consolidated financial statements contain all adjustments (which are
of a normal recurring nature) necessary for a fair presentation of the
financial position and results of operations. The results of
operations for the interim periods are not necessarily indicative of
the results to be expected for the full year.
2. Subsequent Event
On April 25, 1996, the Company sold certain assets and liabilities
of Haas Environmental Services, Inc. ("HES") to Heart
Environmental Services, Inc. (the "Buyer"), a New Jersey
corporation for a total consideration of $1,907,021. The aggregate
consideration comprises (i) $681,000 in cash, (ii) a three-year
promissory note of $600,000 issued by the Buyer, bearing interest
at 9% per annum and collaterized by the pledge of 499 shares of
the Buyer's Common Stock pursuant to a Stock Pledge Agreement,
(iii) the cancellation of total obligations due to H&H Investments
Corporation, Mr. Eugene M. Haas and Mr. Robert E. Haas
(collectively known as the "Haas Shareholders") which amounted
to $626,021. The consolidated results of the Company for 1996
will be positively impacted by approximately $1.5 million as a
result of the HES sale. The pro-forma condensed consolidated
balance sheet as of March 31, 1996 and the proforma condensed
consolidated income statement for the three months ended March
31, 1996 which give the full effect of the sale of HES based on
financial information available on April 25, 1996 and as if the HES
sale occurred on March 31, 1996 have been presented in the
following pages 7-8.
3. Earnings Per Share
Both primary and fully diluted earnings per common and common
equivalent shares were computed by dividing net income by the
weighted average number of shares outstanding after giving effect
to dilutive stock options and warrants to purchase common stock.
4. Income taxes
No income taxes have been provided for the three month period ended
March 31, 1996 since the company is utilizing a net operating loss
carried forward of approximately $2.6 million which expires in 2010
to offset taxable income.
<TABLE>
<CAPTION>
AQUAGENIX, INC. & SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
AS AT MARCH 31, 1996
PRO FORMA PRO FORMA
AQUAGENIX ADJUSTMENTS CONSOLIDATED
Assets
<S> <C> <C> <C>
Current assets excluding net assets of discontinued
operations 2,571,662 681,000<F1> 3,252,662
Net assets of discontinued operations 1,192,720 (650,507)<F2> 542,213
Property and equipment, net 1,844,814 1,844,814
Intangible assets, net 3,177,583 3,177,583
Other assets 261,899 600,000 <F3> 861,899
Total assets $9,048,678 630,493 9,679,171
Liabilities and Stockholders' Equity
Current liabilities 1,704,203 1,704,203
Long-term debts 5,023,898 5,023,898
Stockholders' equity 2,320,577 630,493 <F4> 2,951,070
Total liabilities and stockholders' equity $9,048,678 630,493 9,679,171
<FN>
<F1> Record cash proceeds from the HES Sale.
<F2> Record the sale of certain assets and liabilities of HES.
<F3> Record the promissory note receivable from Heart Environmental Services, Inc., the Buyer.
<F4> Record remaining gain from the HES Sale. Total positive impact on earnings amounted to approximately
$1.5 million, of which approximately $870,000 relates to the change in allowance for estimated phase-out and other
losses from environmental remediation segment.
</FN>
</TABLE>
7
<TABLE>
<CAPTION>
AQUAGENIX, INC. & SUBSIDIARIES
PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1996
PRO FORMA PRO FORMA
AQUAGENIX ADJUSTMENTS CONSOLIDATED
<S> <C> <C> <C>
Operating income 369,969 0 369,969
Income from continuing operations before income taxes 250,490 0 250,490
Income tax provision 0 0 0
Income from continuing operations 250,490 0 250,490
Discontinued operations:
Loss from environmental remediation business
segment, net of income taxes 0 0 0
Change in allowance for estimated phase-out and
other losses from environmental remediation
segment 869,507 630,4931<F1> 1,500,000
Net income $1,119,997 630,493 1,750,490
Earnings per common and common equivalent shares:
Continuing operations - primary $ 0.08 0.08
Continuing operations - assuming full dilution 0.08 0.08
Discontinued operations 0.26 0.45
Net income per common share 0.34 0.53
Weighted average common and common equivalent
shares outstanding:
Primary 3,354,026 3,354,026
Assuming full dilution 3,354,026 3,354,026
<FN>
<F1> Record remaining gain from the HES Sale.
</FN>
</TABLE>
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
General
Aquagenix, Inc. (the "Company"), through its wholly-owned subsidiary,
Environmental Waterway Management, Inc. ("EWM"), provides aquatic
and vegetation management services to both governmental and
commercial customers in Florida, Georgia, North and South Carolina. The
Company's continued emphasis on acquisitions has taken the Company
from a small privately held operation to the current largest provider of
aquatic and vegetation management services in the Southeastern United
States. The Company's operations have grown since 1994 as a result of
internal growth and the selective acquisition of privately held waterway
and vegetation management companies in Florida.
In November 1995, the Company approved a plan to dispose of the
environmental remediation segment which comprises the Company's other
two subsidiaries, Florida Underground Petroleum Tank Contractors, Inc.
("FUPTC") and Haas Environmental Services, Inc. ("HES").
Accordingly, the operations of the environmental remediation segment
have been accounted for as discontinued operations and the operating
losses and discontinuation expenses during the phase-out period have been
provided for in 1995. The operating results for 1996 include only the
continuing operations relating to the aquatic and vegetation managment
business.
Results of Operations
Three Months Ended March 31, 1995 Compared to Three Months Ended
March 31, 1996
Revenues. The Company's revenues increased by $887,482, or 65%,
from $1,365,152 during the three months ended March 31, 1995 to
$2,252,634 during the three months ended March 31, 1996. The increase
in revenues was primarily attributable to an increase in the number of
recurring waterway and industrial vegetation mangement contracts as well
as wetland planting contracts. Much of the growth in revenues resulted
from more intensive marketing efforts combined with an increasing trend
toward governmental outsourcing and the growing need to comply with
environmental laws and regulations. The acquisitions of AmerAquatic,
Inc. ("AmerAquatic Acquisition") and L&L Mosquito & Pest Control, Inc.
("L&L Acquisition") in last quarter of 1995 have further contributed to
this growth by enabling the Company to further expand its customer base
in Florida, northern Georgia, North Carolina and South Carolina.
Cost of services. Cost of services increased by $432,194, or 65.2%, from
$662,748 during the three months ended March 31, 1995 to $1,094,942
during the three months ended March 31, 1996. As a percentage of
revenues, cost of services has remained consistent at 49% for both the
quarters of 1995 and 1996.
Selling, general and administrative. Selling, general and administrative
expense increased by $156,835, or 31.8%, from $493,799 during the three
months ended March 31, 1995 to $650,634 during the three months ended
March 31, 1996. The increase in selling, general and administrative
expenses was due mainly to higher travel expenses, personnel and facility
costs associated with the expanding operations and expenditures to support
the Company's infrastructure. As a percentage of revenues, such expenses
have decreased from 36.2% in 1995 to 28.9% in 1996. The improved
margin was attributable to operating efficiencies and economies of scale
achieved following the AmerAquatic and L&L Acquisitions and internal
growth experienced by the Company. Factors contributing to the
improved margin from the previous period include: reduced public
relations, payroll, travel and telephone expenses as a percentage of
revenues which was also partly due to the streamlining of corporate
operations.
Depreciation and amortization. Depreciation and amortization expense
increased from $48,485 in the first quarter of 1995 to $137,089 in the
first quarter of 1996. Such expense as a percentage of revenues increased
from 3.6% for the quarter ended March 31, 1995 to 6.09% for the
corresponding quarter in 1996. This increase reflected the depreciation of
the additional equipment acquired in connection with the AmerAquatic
Acquisition including the purchase of five "spra-buggies" costing $132,500
in the first quarter of 1996. In addition, there was an increase in
amortization relating to goodwill acquired from the AmerAquatic
Acquisition.
Interest income. Interest income decreased by $27,828, from $69,139
for the first quarter of 1995 to $41,311 for the corresponding quarter of
1996. The decrease in interest income was consistent with the lower
average balance of marketable securities in 1995 as compared to 1996.
Interest expense. Interest expense increased by $151,007 from $9,783
during the three months ended March 31, 1995 to $160,790 during the
three months ended March 31, 1996 primarily as a result of the 12.5%
Senior Secured Note of $5,000,000 issued in October 1995 to finance the
AmerAquatic Acquisition.
Discontinued operations. Other income was related principally to the
change in allowance for estimated phase-out and other losses for
discontinued operations.
Quarterly results. Income from continuing operations increased by
$76,614, or 44.1%, from $173,876 during the three months ended March
31, 1995 to $250,490 during the three months ended March 31, 1996.
There was no provision for income tax for the three months ended March
31, 1996 in view of the net operating loss carryforward. The first
quarter's results is a positive indication of the Company's optimism
towards the strategic decision to focus on its aquatic and vegetation
management business which management believes will continue to show
significant growth potential.
Liquidity and Capital Resources
Working capital. Working capital, which consists principally of cash,
accounts receivable and income tax receivable, was $1,441,875 at
December 31, 1995, compared to $867,459 at March 31, 1996. This
excluded the net assets/liabilities of discontinued operations. The
reduction in working capital was mainly attributable to the improvement
in the collection period for accounts receivable from 39 days at December
31, 1995 to 30 days at March 31, 1996, the liquidation of the marketable
securities and the refund of income tax of $131,764. Of the Company's
accounts receivable outstanding at December 31, 1995 and March 31
,1996, $140,693 (14%) and $ 115,950 (15%) were due from four
customers, respectively. At March 31, 1996, the Company's allowance for
doubtful debts was $29,529 which the Company believes is currently
adequate to cover anticipated losses based on prior experience.
At March 31, 1996, the Company has loan agreements with SunTrust
Bank, Miami, N.A. ("SunTrust") which provided for borrowings under a
revolving line of credit of up to $750,000, a 15-year loan in the principal
amount of $94,144 collaterized by certain real property and equipment
loans in the principal amounts of $90,624. At March 31, 1996, an
aggregate of $538,860 was oustanding under the loan agreeements, of
which $404,415 was outstanding under the line of credit, $90,341 was
outstanding under the 15-year loan and $44,104 was oustanding under
equipment loans. Advances under the line of credit are based on certain
borrowing formulas relating to eligible accounts receivable of EWM. The
receivables of the discontinued operations remain as pledged collateral to
this line of credit but cannot be used as part of the borrowing base under
the line. Interest accrues at 1.5% above prime for the line. This line of
credit expires in March 1997.
Cash flows from operating activities. For the three months ended
March 31, 1995, the Company's cash flows used in operations was
$202,122 as compared to $149,247 for the three months ended March 31,
1996. Of this total cash used in operating activities, $346,385 and
$601,446 were generated from continuing operations for the quarters
ended March 31, 1995 and 1996, respectively. The increase in cash flows
from continuing operations was attributable to the increased net income as
a result of internal growth and acquisitions.
Cash flows from investing activities. Cash provided by investing
activities in the first quarter of 1996 of $624,187 came from the
liquidation of marketable securities. This was partly offset by capital
expenditures of $206,598 for the three months ended March 31, 1996
which related mainly to the purchase of the "spra-buggies". In April 1996,
the Company has refinanced the capital expenditures in relation to the
"spra-buggies" with a commercial equipment financing company who has
approved an equipment financing line of $750,000, of which an initial
drawdown of $150,000 has been made. The Company is currently
negotiating a potential acquisition for the aquatic and vegetation
management business for approximately of $1.5 million which is expected
to be funded from borrowings. In line with its strategic objective of the
expansion of the aquatic and vegetation management business, the
Company will continue to evaluate potential acquisitions utilizing
primarily equity financing until the additional leverage from AmerAquatic
Acquisition is reduced.
Cash flows from financing activities. The Company repaid a total of
$187,941 of its borrowings during the first quarter of 1996.
Discontinued operations. During the three months ended March 31,
1996, the Company repaid all advances made to the discontinued
operations under the previous revolving line of credit with SunTrust which
amounted to approximately $818,000 and the long-term loan of
$1,975,000 to SunTrust which was used to finance the acquisition of HES.
The repayments were funded from the proceeds of the liquidation of
marketable securities and the loan from USL Capital Corporation. The
repayments of these liabilities combined with the other income of $869,507
taken up for the first quarter of 1996 which related principally to
the change in allowance for estimated phase-out and other losses resulted
in net assets of discontinued operations of $1,192,720 at March 31, 1996
compared to net liabilties of $449,550 at December 31, 1995.
The Company has been vigorously continuing its collection efforts in
order to improve the cash flows of its remediation segment until disposal.
Gross accounts receivable for the remediation segment, excluding a
long-term receivable of $1,048,222 at December 31, 1995 and $1,221,642 at
March 31, 1996, has decreased by $1,818,490 from $3,661,354 at
December 31, 1995 to $1,842,864 at March 31, 1996. The decrease was
mainly due to the transfer of the uncollected portion of the accounts
receivable of HES which amounted to approximately $1,188,000 back to
Mr. Eugene M. Haas and Mr. Robert E. Haas, pursuant to the Haas
Purchase Agreement dated as of February 28, 1995.
In March 1996, the Company entered into an agreement with SunTrust for
a one-year extension to February 10, 1997 of the loan of $760,000 (the
"FUPTC Loan") advanced under a revolving line of credit for FUPTC
relating to a specific remediation project. The new terms include a
monthly principal repayment of $5,000 and interest at 1-1/2% above prime.
The new maturity date of the loan will be the earlier of the receipt
of payments from the customer for the specific remediation project or
February 10, 1997. In addition, a principal repayment of $100,000 has
been negotiated to be made in May 1996 in order to release the pledge on
the accounts receivable of HES by SunTrust.
On April 25, 1996, the Company sold substantially all of the assets and
liabilities of HES to Heart Environmental Services, Inc. (the "Buyer"), a
New Jersey corporation for a total consideration of $1,907,021. The total
consideration comprises (i) $681,000 in cash, (ii) a three-year promissory
note of $600,000 issued by the Buyer, bearing interest at 9% per annum
and collaterized by the pledge of 499 shares of the Buyer's Common
Stock pursuant to a Stock Pledge Agreement, (iii) the cancellation of total
obligations due to H&H Investments Corporation, Mr. Eugene M. Haas
and Mr. Robert E. Haas (collectively known as the "Haas Shareholders")
which amounted to $626,021. In connection with the HES Sale, the
Company and the Haas Shareholders entered into a lock-up agreement
relating to the 219,000 shares of the Company's common stock (the
"Shares") owned by the Haas Shareholders. The lock-up agreement
provides that any sale or transfer of the Shares by the Haas Shareholders
will be restricted to an amount of not greater than 20,000 Shares for every
three-month period. As a result of the HES sale, the Company has agreed
not to pursue any claims against the Haas Shareholders in connection with
the Haas acquisition in February 1995. The consolidated results of the
Company for 1996 may be positively impacted by approximately $1.5
million as a result of the HES sale. The pro-forma condensed consolidated
balance sheet as of March 31, 1996 and the proforma condensed
consolidated income statement for the three months ended March 31, 1996
which give the full effect the sale of HES based on financial information
available on April 25, 1996 and as if the HES sale occurred on March 31,
1996 have been presented in the notes to the Consolidated Financial
Statements.
The proceeds from the HES sale have been used to repay a portion of the
loan from USL Capital which amounted to $405,722 which includes
$391,044 principal and $14,678 interest payments. The proceeds will also
be used for a principal repayment of the FUPTC Loan in the amount of
$100,000 in May 1996 as mentioned above and to settle certain remaining
liabilities of HES.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
On April 25, 1996, the Company sold substantially all of the assets and
liabilities of HES to Heart Environmental Services, Inc. (the "Buyer"),
a New Jersey corporation for a total consideration of $1,907,021. The
total consideration comprises (i) $681,000 in cash,
(ii) a three-year promissory note of $600,000 issued by the Buyer,
bearing interest at 9% per annum and collaterized by the pledge of 499
shares of the Buyer's Common Stock pursuant to a Stock Pledge Agreement,
(iii) the cancellation of the promissory note obligation of the Company
of $436,921 by H&H Investment Corporation, Mr. Eugene M. Haas and
Mr. Robert E. Haas (collectively known as the "Haas Shareholders"), also
the shareholders of the Buyer, (iv) the cancellation of the obligations
amounting to $100,000 by the Haas Shareholders pursuant to their
employment termination agreement, (v) the cancellation of the lease
obligations to the Haas Shareholders
amounting to $62,700 in connection to a office lease agreement,
(vi) the cancellation of an equipment note payable of $26,400 by the
Haas Shareholders. In connection with the HES sale, the Company and the
Haas Shareholders entered into a lock-up agreement relating to the
219,000 shares of the Company's common stock (the "Shares") owned by the
Haas Shareholders. The lock-up agreement provides that any sale or
transfer of the Shares by the Haas Shareholders will be restricted to an
amount of not greater than 20,000 Shares for every three-month period.
As a result of the HES sale, the Company has agreed not to pursue any
claims against the Haas Shareholders in connection with the Haas
acquisition in February 1995. Reference is made to the Asset Purchase
Agreement, dated as of April 25, 1996, among the Company, HES, the
Buyer, the Haas Shareholders and Haas Sand and Gravel, Inc., filed as
exhibit 10.76 to the Current Report on Form 8-K dated April 25 1996, for
further information concerning the terms and conditions of the HES sale.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit Description
10.77 First Amendment to Credit Agreement, Revolving Credit Note and
Re-affirmation and Ratification of Guaranty Agreements, dated
March 29, 1996 between SunTrust Bank, Miami, N.A. and the
Company
10.78 Amendment to Loan Agreement, Amended Promissory Note and Re-
affirmation and Ratification of Guaranty Agreements, dated as
of March 29, 1996 between SunTrust Bank, Miami, N.A. and FUPTC
10.79 Contract Between The South Florida Water Management District and
EWM, dated as of February 6, 1996
10.80 Amendment to Senior Secured Note and Warrant Purchase Agreement
between the Company and The Equitable Life Assurance Society of
the United States, dated as of December 15, 1995
27.1 Financial Data Schedule
(b) Reports on Form 8-K
During the quarter ended March 31, 1996, the registrant filed the
following report on Form 8-K:
(i) Current Report on Form 8-K dated March 8, 1996
(filed March 20, 1996) which reported the following events:
(a) the resignations of Mr. Alan Chesler and Mr.Robert Radler as
officers and directors of the Company,
(b) the election of Mr. Andrew Chesler as Chief Executive
Officer, President, Treasurer and Chairman of the Board of
the Company,
(c) election of Mr. Allen H. Stern as director of the Company,
(d) the anticipated consolidated net loss of approximately
$8,000,000 for the year ended December 31, 1995 which related
principally to losses associated with the discontinued
operations of the Company's environmental remediation
segment, and
(e) the award of a new contract with South Florida Water
Management District who has a budget of
$7,000,000 for aquatic and vegetation management services
relating to flood control, water supply and environmental
restoration.
The Company also filed a Current Report on Form 8-K dated April 25,
1996 on May 10 ,1996 which reported the sale of Haas Environmental
Services, Inc. to Heart Environmental Services, Inc. for a total
consideration of $1,907,021, to which reference has been made in this
Form 10-QSB.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
AQUAGENIX, INC.
Date: May 13, 1996 By: /s/ Andrew P. Chesler
Andrew P. Chesler,
Chairman of the Board,
Chief Executive Officer,
President and Treasurer
(Principal Executive Officer)
Date: May 13, 1996 By: /s/ Helen Chia
Helen Chia,
Chief Financial Officer
(Principal Financial and
Accounting Officer)
Exhibit Index
Sequentially
Exhibit Number Description Numbered Page
10.77 First Amendment to Credit Agreement, 19-31
Revolving Credit Note and Re-affirmation
and Ratification of Guaranty Agreements,
dated March 29, 1996 between SunTrust
Bank, Miami, N.A. and the Company
10.78 Amendment to Loan Agreement, Amended 32-45
Promissory Note and Re-affirmation and
Ratification of Guaranty Agreements, dated
dated as of March 29, 1996 between SunTrust
Bank, Miami, N.A. and FUPTC
10.79 Contract Between The South Florida Water 46-60
Management District and EWM, dated as of
February 6, 1996
10.80 Amendment to Senior Secured Note and 61-64
Warrant Purchase Agreement between the
Company and The Equitable Life Assurance
Society of the United States, dated as of
December 15, 1995
27.1 Financial Data Schedule 65
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT, is made and
entered into as of the 29 day of March , 1996, by and between
AQUAGENIX, INC., a Delaware corporation (the "Borrower") and
SUNTRUST BANK, MIAMI, N.A., f/k/a SunBank/Miami, N.A. (the
"Lender").
RECITALS:
A. Borrower and Lender have heretofore as of August 11, 1995
entered into a Credit Agreement (the "Agreement").
B. Subject to the terms of the Agreement, the Lender agreed
to make Revolving Credit Loans (as defined in the Agreement) up to
the amount of $3,000,000.00 to the Borrower for a period as defined
in the Agreement. As a result, Borrower did execute and deliver to
Lender a Revolving Credit Note dated August 11, 1995 in the amount
of $3,000,000.00 (the "Note").
C. Borrower and Lender have agreed to modify and amend the
Agreement.
NOW THEREFORE, in consideration of good and valuable
consideration, the receipt of which is expressly acknowledged, the
parties agree as follows.
1. The above recitals are true and correct and are
incorporated herein verbatim.
2. The Agreement is hereby modified and amended as follows:
A. The first paragraph of Section 2.1. The Revolving Credit
Loans. is amended to read as follows:
"The Lender agrees, on the terms of this Agreement, to
make Revolving Credit Loans up to the amount of
$750,000.00 to the Borrower for a period terminating on
the earlier of the Termination Date or the termination in
full of the Revolving Credit Commitment of the Lender
pursuant to Section 7 hereof, on a revolving basis, at
such times and, subject to the next paragraph and Section
2.2 below, in such amounts as the Borrower may request
solely for the purposes of providing Revolving Credit
Loans to Environmental Waterway Management, Inc., a
Florida corporation ("EWM") which is a wholly owned
Subsidiary of Borrower. No Revolving Credit Loans shall
be made to Borrower for the benefit of Borrower or any
other Subsidiary of Borrower now in existence or
hereinafter created and Borrower may borrow, repay and
re-borrow from time to time for the benefit of EWM for a
period from the date of this First Amendment to and
including the earlier of the Termination Date or the
termination in full of the Revolving Credit Commitment
pursuant to Section 7 hereof."
B. The fourth paragraph of Section 2.1 of the Agreement is
hereby deleted.
C. The first sentence of the fifth paragraph of Section 2.1
of the Agreement is hereby amended to read as follows:
"The proceeds of the Revolving Credit Loans shall be used
exclusively for the short term working capital needs of
EWM to financing the inventory and accounts of EWM and
for no other purpose."
All other provisions of this fifth paragraph shall remain in
full force and effect as if set forth herein verbatim.
D. The following sentence is added to the end of Section 2.2
of the Agreement:
"No proceeds of any Revolving Credit Loan(s) made
hereunder shall be used for the benefit of Borrower
and/or any Subsidiary of Borrower other than EWM."
E. Section 2.5 Guidance Facility Loans. is hereby deleted.
F. Section 4.1.1. is modified to read as follows:
"The executed Renewal Note in the principal amount of
$750,000.00 dated of even date herewith.
G. Section 5.4 of the Agreement is modified to read as
follows:
"5.4 Furnish to Lender within 14 days after the 15th and
the end of each month, (i) Borrowing Base Certificates,
in form acceptable to Lender; and, (ii) an Accounts
Receivable Aging from each Subsidiary."
H. Section 5 of the Agreement is amended to add a
subparagraph 5.9 which shall read as follows:
"5.9 The Borrower as well as any Subsidiary shall
maintain throughout the term of this Agreement, pollution
insurance in the minimum amount of $1,000,000.00 per
occurrence."
I. Section 6.9 of the Agreement is modified to read as
follows:
"6.9 Pay total annual compensation to Robert Radler,
Alan Chesler, or Andrew Chesler, not to exceed
$168,000, $158,000.00 or $175,000.00 respectively. No
other executive or employee may be paid total annual
compensation exceeding $175,000.00. Such compensation
includes salary, cash bonus and insurance."
J. The Defined Terms as contained in Annex I to Credit
Agreement are in part amended as follows:
(i) "Guidance Facility Commitment" Deleted.
(ii) "Lender" shall mean SunTrust Bank, Miami, N.A., a
national banking association.
(iii) "Prime Rate" shall mean the annual interest rate
announced by SunTrust Banks of Florida, Inc. from time to time, as
the prime rate (which interest rate is only a bench mark, is purely
discretionary and is not necessarily the best or lowest rate
charged borrowing customers of any subsidiary of SunTrust Banks of
Florida, Inc.). Any change in the Prime Rate shall be effective at
the beginning of the Business Day on which such change is
announced.
(iv) "Revolvinq Credit Commitment" shall mean, at the
time any determination thereof is to be made, the obligation of the
Lender to make Revolving Credit Loans pursuant to Section 2 hereof,
or, where the context so requires, $750,000.00.
(v) "Termination Date" shall be March 31, 1997.
3. Defined Terms. All capitalized terms used in this First
Amendment and not otherwise defined herein shall have the meanings
given such terms in the Agreement, as such terms may be amended by
the terms of this First Amendment, and any subsequent amendments,
modifications or restatements of said Agreement.
4. Borrower represents and warrants to Lender that:
(a) It has the power and authority to execute and
deliver and to perform its obligations hereunder as well as any
obligation contained in any instrument executed incident hereto or
to the Agreement.
(b) The execution and performance by Borrower of the
First Amendment and any document incident hereto have been
authorized by all requisite corporate action and will not violate
or be in conflict or result in a breach of any indenture, agreement
or other instrument to which the Borrower is a party or by which it
or any of its property is bound, or any order, writ, injunction or
decree of any court or governmental instrumentality.
5. Borrower represents and warrants to Lender that: (i) it
has no claims or offsets arising out of the Agreement or any
document incident thereto; (ii) the execution of this First
Amendment will not impair the lien of the Security Agreement dated
August 11, 1995 or any Financing Statement incident thereto; (iii)
the execution of this First Amendment will not affect or release
the liability of any party or parties whomsoever who may now or
hereafter be liable under or on account of the Note or any
modifications, renewals or amendments thereto.
6. Should any stamp, excise or intangible taxes or levies
become payable in respect of the execution, delivery or performance
of this First Amendment or any other instrument or document to be
delivered hereunder or any modification thereof, the Borrower shall
pay the same and hold the Lender harmless with respect thereto.
7. Except as specifically amended by the terms of this First
Amendment, the Agreement is hereby confirmed and shall remain in
full force and effect.
8. THE LENDER AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR
IN CONNECTION WITH THIS FIRST AMENDMENT AND ANY AGREEMENT CONTEMPLATED
TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER
PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER ENTERING
INTO THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereunto have caused this
First Amendment to be executed by their respective officers
thereunto duly authorized as of the date first above written.
/s/Bruce C. Blaise Aquagenix, Inc., a Delaware
Witness Bruce C. Blaise Corporation
/s/Rose Edens By /s/Andrew Chesler
Witness Rose Edens Print Andrew Chesler
As its President
Corporate Seal
/s/Bruce C. Blaise SunTrust Bank, Miami, N.A.
Witness Bruce C. Blaise
/s/Rose Edens By John Thompson, V.P.
Witness Rose Edens Print John Thompson
As its Vice President
STATE OF FLORIDA )
COUNTY OF DADE )
The foregoing instrument was acknowledged before me this 29
day of March, 1996, by Andrew Chesler as President of Aquagenix,
Inc., a Delaware corporation who has produced FL Driver's Licence
as identification and who did not take an oath.
/s/Sandra J. Baptiste Sjostrom
NOTARY PUBLIC, STATE OF FLORIDA
Name: Sandra J. Baptiste Sjostrom
Commission No.:
STATE OF FLORIDA)
COUNTY OF DADE )
The foregoing instrument was acknowledged before me this 29
day of March, 1996, by John Thompson as Vice President of SunTrust,
Miami, N.A. a national banking association who is personally known
and who did not take an oath.
/s/Sandra J. Baptiste Sjostrom_
NOTARY PUBLIC, STATE OF FLORIDA
Name: Sandra J. Baptiste Sjostrom
Commission No.:
RENEWAL
REVOLVING CREDIT NOTE
$750,000.00 Miami, Florida
March 29, 1996
For value received, AQUAGENIX, INC., a Delaware
corporation (the "Borrower"), which maintains its principal place
of business at 6500 N.W. 15th Avenue, Ft. Lauderdale, Fl. 33309,
hereby promises to pay to the order of SUNTRUST BANK, MIAMI, N.A.
(the "Lender"), on March 31, 1997, at its banking office located at
1111 Lincoln Road, Miami Beach, Florida 33139 (or at such other
address as the Lender shall designate in writing to the Borrower),
the principal sum of Seven Hundred Fifty Thousand Dollars
($750,000.00), or the aggregate unpaid principal amount of all
loans evidenced by this Revolving Credit Note made by the Lender to
the Borrower pursuant to Section 2 of the Credit Agreement (as
amended by First Amendment to Credit Agreement of even date)
hereinafter referred to, whichever is less, in lawful money of the
United States of America, and to pay interest on the unpaid
principal balance hereof in like money at such office from the date
hereof until the principal hereof shall have become due and payable
by acceleration or otherwise, at the rate per annum equal to the
Prime Rate plus one and one half percent (1.5k) per annum. "Prime
Rate" shall be defined to mean the annual interest rate announced
by SunTrust Banks of Florida, Inc., from time to time, as the prime
rate (which interest rate is only a bench mark, is purely
discretionary and is not necessarily the best or lowest rate
charged borrowing customers of any subsidiary bank of SunTrust
Banks of Florida, Inc.). Any change in the Prime Rate shall be
effective at the beginning the business day on which such change is
announced.
Interest payments on this Note shall be paid monthly in
arrears, commencing on April 1, 1996 and continuing monthly on the
1st day of each month thereafter until this Note is paid in full,
and at maturity. Interest on this Note shall be computed on the
actual number of days elapsed over a 360-day year; i.e., l/360th of
a full year's interest shall accrue for each day any loan evidenced
by this Note is outstanding.
If the principal of this Note or any portion hereof and, to
the extent permitted by law, interest hereon shall not be paid when
due, whether by acceleration or otherwise, the same shall bear
interest for any period during which the same shall be overdue at
a rate per annum equal to the highest rate permitted by Florida law
and payable on demand.
This Note is the Note relating to the Revolving Credit Commitment
defined to in the Credit Agreement, dated as of August 11, 1995 and
as amended by First Amendment to Credit Agreement dated of even date
herewith (said Credit Agreement as amended, as heretofore and from
time to time hereafter modified and amended is referred to herein as
the "Credit Agreement"), between the Borrower and the Lender. Each
holder hereof is entitled to the benefits and security provided
thereby or referred to therein, to which Credit Agreement reference
is hereby made for a statement thereof. Reference is made to such
Credit Agreement for rights as to prepayment hereof and the
acceleration of the maturity hereof.
The Borrower hereby agrees to pay all costs incurred by any holder
hereof, including reasonable attorney's fees (Including those for appellate
proceedings), incurred in connection with any Event of Default (as defined
in the Credit Agreement), or in connection with the collection or
attempted collection or enforcement hereof, or in connection with the
protection of any collateral given as security for the payment hereof,
whether or not legal proceedings may have been instituted.
All parties to this Note, including the Borrower and any sureties,
endorsers or guarantors, hereby waive presentment for payment, demand,
protest, notice of dishonor, notice of acceleration of maturity, and all
defenses on the ground of extension of time for payment hereof, and agree
to continue and remain bound for the payment of principal, interest, and
all other sums payable hereunder, notwithstanding any change or changes by
way of release, surrender, exchange or substitution of any security for
this Note or by way of any extension or extensions of time for payment of
principal or interest; and all such parties waive all and every kind of
notice of such change or changes and agree that the same may be made
without notice to or consent of any of them. The rights and remedies of
the holder as provided herein shall be cumulative and concurrent and may
be pursued singularly, successively or together at the sole discretion of
the holder, and may be exercised as often as occasion therefor shall occur,
and the failure to exercise any such right or remedy shall in no event be
construed as a waive or release of the same.
Anything herein to the contrary notwithstanding, the obligations of
the borrower under this Note shall be subject to the limitation that
payments of interest to the Lender shall not be required to the extent that
receipt of any such payment by the Lender would be contrary to provisions
of law applicable to the Lender (if any) which limit the maximum rate of
interest which may be charged or collected by the Lender; provided,
however, that nothing herein shall be construed to limit the Lender to
presently existing maximum rates of interest, if any increased interest
rate is hereafter permitted by reason of applicable federal or state
legislation. In the event that the Borrower make any payment of interest,
fees or other charges, however dominated, pursuant to this Note, which
payment causes the interest paid to the Lender to exceed the maximum rate
of interest permitted by applicable law, any excess over such maximum shall
be applied in reduction of the principal balance owed to the Lender as of
the date of such payment, or if such excess exceeds the amount of
principal owed to the Lender as of the date of such payment, the difference
shall be paid by the Lender to the Borrower.
THE Borrower HEREBY, AND THE Lender BY ITS ACCEPTANCE OF THIS
NOTE, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT
EITHER OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS NOTE OR THE CREDIT AGREEMENT AND ANY
AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH
OR THEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE Lender MAKING
THE LOAN EVIDENCED BY THIS NOTE.
This Note shall be governed by and construed ln accordance
with the laws of the State of Florida.
Florida Underground Petroleum Tank Contractors, Inc. (a wholly
owned subsidiary of Borrower has this date executed and delivered
to Lender a promissory note in the principal amount of $760,000.00.
Any default in the terms of such promissory note shall be deemed a
default hereunder and Lender shall have the absolute right to
demand payment in full of all sums due and owing hereunder.
IN WITNESS WHEREOF, the Borrower has caused this Note to
be executed the day and year first above written.
Aquagenix, Inc., a Delaware
Corporation
By: Andrew Chesler______________
Andrew Chesler
President
(Corporate Seal)
STATE OF FLORIDA )
COUNTY OF DADE )
The foregoing promissory note in the principal amount of
$750,000.00 was executed before me this 29 day of March, 1996 by
Andrew Chesler as President of Aquagenix, Inc., a Delaware
corporation and has produced FL. DR. License as identification and
did not take an oath.
Sandra J. Baptiste Sjostrom________
NOTARY PUBLIC, State of Florida
Print: Sandra J. Baptiste Sjostrom
Commission #:
RE-AFFIRMATION AND RATIFICATION OF GUARANTY
AGREEMENTS
THIS RE-AFFIRMATION AND RATIFICATION OF GUARANTY
AGREEMENTS is made and entered into this 29 day of March, 1996 by
ANDREW CHESLER, ALAN CHESLER, ROBERT RADLER,
ENVIRONMENTAL WATERWAY MANAGEMENT, INC., a Florida
corporation, HASS ENVIRONMENTAL SERVICES, INC., a New Jersey
corporation, and FLORIDA UNDERGROUND PETROLEUM TANK
CONTRACTORS, INC., a Florida corporation, hereinafter collectively called
"Guarantors".
RECITALS:
A. On August 11, 1995, Guarantors each executed and
delivered to SunBank/Miami, N.A., a national banking association,
n/k/a SUNTRUST BANK, MIAMI, N.A. ("Lender") separately executed
Guaranty Agreements ("Guaranties").
B. The Guaranties guaranteed a revolving credit loan in the
principal amount of $3,000,000.00 loan dated August 11, 1995 (the
"Loan") made by Lender to Aquagenix, Inc., a Delaware corporation
("Borrower").
C. Borrower has requested Lender to agree to various
modifications of the loan documents relating to the Loan and Lender
has agreed to the same, subject to Guarantors re-affirming and
ratifying their obligations as set forth in the Guaranties.
NOW, THEREFORE, in consideration of these presents, Guarantors
agree as follows:
1. The above recitals are true and correct.
2. Guarantors have each had the opportunity to review the
(i) First Amendment to Credit Agreement (the "First Amendment");
and, (ii) the Revolving Credit Note in the amount of $750,000.00
each dated of even date herewith.
3. Guarantors hereby ratify and re-affirm the Guaranties as
if they were executed on this date and further re-affirm and ratify
that such Guaranties continue to apply to the Credit Agreement
dated as of August 11, 1995 and as amended by the First Amendment
as well as to any document executed incident thereto.
4. The corporate Guarantors named above hereby affirm that
each have the corporate power to execute this Agreement and further
that appropriate authority has been granted to the party executing
this agreement on behalf of such corporate Guarantors.
5. Guarantors represent and warrant to Lender that they have
no claims or offsets arising out of the Guaranties or any document
executed incident thereto. Guarantors represent and warrant to
Lender that the execution of this Agreement, the First Amendment or
the Renewal Revolving Credit Note will not release in any way the
Guarantors from any obligation set forth in the Guaranties.
6. GUARANTORS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
RE-AFFIRM THEIR WAIVER OF THE RIGHT THEY MAY HAVE TO A
TRIAL BY JURY AS SET FORTH IN THE GUARANTIES.
IN WITNESS WHEREOF, the parties have hereunto set their hands
and seals to be affixed hereto on the day and year first set forth
above.
Witnesses as to all:
/s/Kimberly Floyd /s/Andrew Chesler
Witness Kimberly Floyd Andrew Chesler
/s/Robin Miller /s/Alan Chesler
Witness Robin Miller Alan Chesler
/s/Robert Radler
Robert Radler
Environmental Waterway
Management, Inc.
By /s/Andrew Chesler
Print Andrew Chesler
As its President
Haas Environmental
Services, Inc.
By /s/Andrew Chesler
Print Andrew Chesler
As its Vice President
Florida Underground Petroleum
Tank Contractors, Inc.
By /s/Andrew Chesler
Print Andrew Chesler
As its Vice President
STATE OF FLORIDA )
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this 29
day of March, 1996 by Andrew Chesler who produced (known to me)
as identification and who did not take an oath.
/s/Kirsten E. Johnson
NOTARY PUBLIC, STATE OF FLORIDA
Name: Kirsten E. Johnson
Commission:
STATE OF FLORIDA)
COUNTY OF BROWARD)
The foregoing instrument was acknowledge before me this 29
day of March, 1996 by Alan Chesler who who produced (known to me)
as identification and who did not take an oath.
/s/Kirsten E. Johnson
NOTARY PUBLIC, STATE OF FLORIDA
Name: Kirsten E. Johnson
Commission:
STATE OF FLORIDA)
COUNTY OF BROWARD)
The foregoing instrument was acknowledge before me this 29
day of March, 1996 by Robert Radler who who produced (known to me)
as identification and who did not take an oath.
/s/Kirsten E. Johnson
NOTARY PUBLIC, STATE OF FLORIDA
Name: Kirsten E. Johnson
Commission:
STATE OF FLORIDA)
COUNTY OF BROWARD)
The foregoing instrument was acknowledge before me this 29
day of March, 1996 by Andrew Chesler as President of Environmental Waterway
Management, Inc., a Florida corporation who has produced (known to me)
as identification and who did not take an oath.
/s/Kirsten E. Johnson
NOTARY PUBLIC, STATE OF FLORIDA
Name: Kirsten E. Johnson
Commission:
STATE OF FLORIDA)
COUNTY OF BROWARD)
The foregoing instrument was acknowledge before me this 29
day of March, 1996 by Andrew Chesler as Vice President of Florida Underground
Petroleum Tank Contractors, Inc., a Florida corporation who has produced
(known to me) as identification and who did not take an oath.
/s/Kirsten E. Johnson
NOTARY PUBLIC, STATE OF FLORIDA
Name: Kirsten E. Johnson
Commission:
STATE OF FLORIDA)
COUNTY OF BROWARD)
The foregoing instrument was acknowledge before me this 29
day of March, 1996 by Andrew Chesler as Vice President of Haas Environmental
Services, Inc., a New Jersey corporation who has produced (known to me) as
identification and who did not take an oath.
/s/Kirsten E. Johnson
NOTARY PUBLIC, STATE OF FLORIDA
Name: Kirsten E. Johnson
Commission:
AMENDMENT TO LOAN AGREEMENT
THIS AMENDMENT TO LOAN AGREEMENT is dated as of the day of
29, March, 1996, by and between FLORIDA UNDERGROUND PETROLEUM
TANK CONTRACTORS, INC., a Florida corporation ("Borrower") and
SUNTRUST BANK, MIAMI, N.A., a national banking association. f/k/a
SunBank/Miami, N.A. ("Lender").
RECITALS
A. Borrower and Lender entered into a Loan Agreement dated as
of the 10th day of February, 1995 (the "Agreement").
B. Borrower and Lender have agreed to certain modifications
to such Agreement.
NOW, THEREFORE, in consideration of the recitals, and of the
mutual covenants and agreements set forth below, Borrower and
Lender agree as follows:
1. The above recitals are true and correct and are incorporated herein by
reference.
2. The Agreement is amended as follows:
A. Section 1 Recitals, sub paragraph (b) is amended to read
as follows:
(b) Lender has issued its commitment letter to Borrower
dated October 12, 1994 and has further amended the same by letter
dated March 11, 1996 (collectively the "Commitment Letter"), the
terms and conditions of which to the extent not modified hereby are
incorporated herein by reference.
B. Section 2. Definitions is amended in part as follows:
(j) Guarantors. Aquagenix, Inc., a Delaware corporation,
Alan Chesler, Andrew Chesler, Robert Radler, Environmental Waterway
Management, Inc., a Florida corporation, Haas Environmental
Services, Inc., a New Jersey corporation and any future subsidiary
of Aquagenix, Inc.
(l) Note. The Renewal and Amended Promissory Note of
even date herewith from Borrower to the order of Lender in the
principal amount of $760,000.00 evidencing the Loan.
C. Section 12, is amended to add the following sub
paragraph:
(n) Income Tax Returns. Within thirty (30) days of
filing, Borrower shall provide to Lender a complete copy of its
corporate tax return, or, if extended, a copy of the extension
request.
D. Section 15, is amended to add the following sub-
paragraph:
(s) Release. While the receivables of Borrower and Haas
Environmental Services, Inc. ("Haas") are pledged to Lender as
collateral for the loan, it is understood, that in the event of
sale of Borrower and or sale of Haas by its parent Aquagenix, such
receivables of Borrower shall be released as collateral upon
receipt by Lender of a principal reduction of $380,000.00.
3. Defined Terms. All capitalized terms used in this
Amendment and not otherwise defined herein shall have the meanings
given such terms in the Agreement, as such terms may be amended by
the terms of this Amendment, and any subsequent amendments,
modifications or restatements of said Agreement
4. Borrower represents and warrants to Lender that:
(a) It has the power and authority to execute and
deliver and to perform its obligations hereunder as well as any
obligation contained in any instrument executed incident hereto or
to the Agreement.
(b) The execution and performance by Borrower of this
Amendment and any document incident hereto have been authorized by
all requisite corporate action and will not violate or be in
conflict or result in a breach of any indenture, agreement or other
instrument to which the Borrower is a party or by which it or any
of its property is bound, or any order, writ, injunction or decree
of any court or governmental instrumentality.
5. Borrower represents and warrants to Lender that : (i) it
has no claims or offsets arising out of the Agreement or any
document incident thereto; (ii) the execution of this Amendment
will not impair the lien of the Security Agreement dated as of
February 10, 1995 or any Financing Statement incident thereto;
(iii) the execution of this Amendment will not affect or release
the liability of any party or parties whomsoever who may now or
hereafter be liable under or on account of the Note or any
modifications, renewals or amendments thereto.
6. Should any stamp, excise or intangible taxes or levies
become payable in respect of the execution, delivery or performance
of this Amendment or any other instrument or document to be
delivered hereunder or any modification thereof, the Borrower shall
pay the same and hold the Lender harmless with respect thereto.
7. Except as specifically amended by this Amendment, the
Agreement is hereby confirmed and shall remain in full force and
effect.
8. LENDER AND BORROWER HEREBY KNOWINGLY,VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AMENDMENT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED
IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER ENTERING INTO
THIS AMENDMENT.
IN WITNESS WHEREOF, the parties have hereunto caused this
Amendment to be executed by their respective officers thereunto
duly Authorized as of the date above first written.
/s/Rose Edens Florida Underground Petroleum Tank
Witness Rose Edens Contractors, Inc.
/s/Bruce C.Blaise By /s/Andrew Chesler
Witness Bruce C. Blaise Print Andrew Chesler
As its Exec. Vice President
Corporate seal
/s/Bruce C. Blaise SunTrust Bank, Miami, N.A.
Witness Bruce C. Blaise
By /s/John Thompson
/s/Rose Edens Print John Thompson
Witness Rose Edens As its Vice President
STATE OF FLORIDA )
COUNTY OF DADE )
The foregoing instrument was acknowledged before me this 29 day March,
1996, by Andrew Chesler as Executive Vice President of Florida
Underground Petroleum Tank Contractors, Inc., a Florida corporation who
has produced FL Drivers Licencse as identification and who did not
take an oath.
/s/Sandra J Baptiste Sjostrom
Notary public, State of Florida
Name Sandra J Baptiste Sjostrom
Commission No.:
RENEWED AND AMENDED PROMISSORY NOTE
The capitalized and defined terms used in this Promissory Note
(hereinafter referred to as this "Note") shall have the following
meanings:
HOLDER: SunTrust Bank, Miami, N.A., f/k/a SunBank/Miami, N.A., a
national banking association, its successors and/or assigns, having
an address at 1111 Lincoln Road, Miami Beach, Florida 33139, Attn:
Commercial Loans Department.
MAKER: Florida Underground Petroleum Tank Contractors, Inc., a
Florida corporation, whose address is 6500 N.W. 1 5th Avenue, Ft.
Lauderdale, Florida 33309.
EFFECTIVE DATE: Effective as of March 29, 1996
PLACE OF EXECUTION: Miami, Florida
PRINCIPAL AMOUNT: Seven Hundred Sixty Thousand and NO/100
Dollars (U.S. $760,000.00)
INTEREST RATE: A rate per annum of simple interest equal to one and
one half percent per annum (1.5W) in excess of the rate from time
to time published or announced by SunTrust Banks of Florida, Inc.
as its prime rate ("Prime Rate") (but not necessarily the best or
lowest rate charged borrowing customers of SunTrust Banks of
Florida, Inc.), changing when and as the Prime Rate changes.
PAYMENT DATE: Beginning on May 1, 1996 and on the 1st day of each
month thereafter, until the Due Date, as provided hereinbelow.
DUE DATE: The earlier to occur of (a) the Florida Department of
Environmental Protection ("FDEP") remits final reimbursement to the
Maker or the Holder for the environmental remediation to be
performed pursuant to that certain Remedial Action Plan Phase I,
dated March 25, 1994 (the "RAP"), as approved by the State of
Florida pursuant to that certain letter from the FDEP, dated June
10, 1994, (b) the Maker receives final payment pursuant to that
certain Environmental Services Contract (the "Environmental
Services Contract") entered into by and between Riverfront
Associates, a Florida general partnership, the Maker and Wingerter
Environmental Incorporated, a Florida corporation, (c) the
Environmental Services Contract is terminated for any reason
whatsoever, or (d) February 10, 1997.
SECURITY: All assets of Maker, including, without limitation, all
of Maker's rights under the Environrnental Services Contract, all
of Maker's rights to receive reimbursements from the FDEP regarding
environmental remediation to be perforrned pursuant to the RAP and
Borrower's lien rights on the property located at 35 S.E. Fifth
Street, Miami, Florida, all as more particularly described in the
Security Agreement and the Assignment dated of even date herewith
executed by the Maker in favor of the Holder together with all
other documents which may now or hereafter evidence and/or secure
this Note, together with all future modifications, amendments,
extensions, or renewals thereof (collectively, the "Security
Documents")
FOR VALUE RECEIVED, the undersigned Maker, jointly and severally if
more than one, hereby promises to pay to the order of Holder, in
immediately available funds of the United States of America, or in
such other manner or at such other place as the then holder of this
Note may designate, the Principal Amount of Seven Hundred Sixty
Thousand and NO/00 Dollars (U.S. $760,000.00) or so much thereof as
shall from time to time have been advanced pursuant to the Loan
Agreement dated as of February 10, 1995 and as amended by First
Amendment to Loan Agreement dated of even date herewith
(collectively, the "Loan Agreement") between the Maker and the
Holder, together with interest on the unpaid balance of said sum at
the Interest Rate and based upon a 360-day year.
Principal and interest shall be payable in lawful money of the
United States of America at the offlce of the Holder, or at such
other place as the Holder may designate in writing, as follows:
(i) Maker shall make monthly payments of interest at the
Interest Rate on the unpaid principal balance outstanding from time
to time, commencing on May 1, 1996 and on each Payment Date
thereafter through and including the Due Date;
(ii) Maker shall make monthly principal payments of at least
$5,000.00 per month at the same time it makes the payments of
interest described above; and
(iii) Notwithstanding anything contained herein to the
contrary, the outstanding Principal Amount of this Note with all
monies advanced under the Loan Agreement and all accrued and unpaid
interest, shall be due and payable on the Due Date.
The Maker may prepay this Note in whole or in part at any time
prior to maturity without premiurn or penalty. Unless expressly
specified otherwise by Maker in writing at time of remittance of
any payment due hereunder, any partial prepayment will be applied
first to the payment of interest, late charges, fees and accrued
interest thereon, and then to unpaid principal. No prepayment shall
affect Maker's obligation to timely make payments in accordance
with the terms hereof.
If any payment of interest or princlpal is not paid on or
before the fifth (5th) day after which it is due, or if any
monetary Event of Default (as defined in the Loan Agreement) has
occurred or is continuing beyond the fifth (5th) day after which it
is due under any instrument by which this Note is, or may hereafter
be, secured, the Holder, at its option, shall be entitled to
collect a late charge equivalent to five (5W) percent of the amount
then due and, further, at the option of the Holder, the entire
principal balance, and interest then accrued, whether or not
otherwise then due, shall become immediately due and payable, and,
whether or not the Holder has exercised said option, interest shall
accrue on the entire principal balance, and interest then accrued,
at the maximum rate permitted by law until fully paid or, if the
Holder has not exercised said option, for the duration of such
Event of Default. No consent or assent, express or implied, to any
monetary breach of one or more of the covenants and agreements of
this Note or the Security Documents shall be deemed to be a waiver
of any succeeding monetary breach.
If any nonmonetary Event of Default has occurred or is
continuing under any Security Documents, the entire principal
balance, and interest then accrued, whether or not otherwise then
due, shall, at the option of the Holder, become immediately due and
payable within fifteen (15) days after Holder's delivery or mailing
of demand or notice to the attention of Maker, as provided in the
Loan Agreement, at the last address of Maker on the records of
Holder, and whether or not the Holder has exercised said option,
interest shall accrue on the entire principal balance, and interest
then accrued, at the maximum rate permitted by law until fully paid
or, if the Holder has not exercised said option, for the duration
of such event of default. No consent or assent, express or implied,
to any nonmonetary breach of one or more of the covenants and
agreements of this Note shall be deemed to be a waiver of any
succeeding nonmonetary breach.
Maker hereby authorizes Holder, if and to the extent payments
of principal and/or interest owing under this Note are not made
when due, to setoff and charge against the accounts of the Maker
maintained with or at Holder any payments of principal and/or
interest from any of Maker's accounts, without any need to first
notify Maker with respect thereto. Holder shall deliver Maker a
written statement indicating amounts so deducted or setoff;
provided however, that Holder's failure to give such notice shall
not affect the validity of such deduction or setoff.
In the event any payment made by Maker hereunder is not
honored or is otherwise returned by Holder to Maker because it is
incomplete, inaccurate, or deficient in any manner whatsoever, then
Maker agrees to pay Holder a fee of $25.00 for each such returned
payment, which fee shall be in addition to (and not in lieu of) any
other applicable late charges and fees, and whLch $25.00 fee shall
not constitute "interest" for purposes of computing the default
rate of interest hereunder.
No assent or consent, express or implied, to any breach
(whether monetary or nonmonetary or whether material or immaterial)
of one or more of the covenants and agreements of this Note as set
forth herein or in the Security Documents shall be deemed to be a
waiver of any succeeding or other such breach. The remedies of
Holder as provided herein and in the Security Documents shall be
cumulative and concurrent, and may be pursued singly, successively
or together, at the sole discretion of Holder, and may be exercised
as often as occasion therefor shall arise. No act of omission or
commission of Holder, including, specifically, any failure to
exercise any right, remedy or recourse, shall be effective unless
it is set forth in a written document executed by Holder and then
only to the extent specifically recited therein. A waiver or
release with reference to one event shall not be construed as
continuing, as a bar to, or as a waiver or release of, any
subsequent right, remedy or recourse as to any subsequent event.
Notwithstanding anything contained herein, or in any
instrument by which this Note may be secured, to the contrary, no
provision contained herein or therein which purports to obligate
the undersigned to pay any amount of interest or any fees, costs or
expenses which are in excess of the maximum permitted by applicable
law, shall be effective to the extent it calls for the payments of
any interest or other amount in excess of such maximum. Any such
excess shall, at the option of the Holder, either be paid to Maker
or be credited to principal, and, in the event the outstanding
principal obligation hereunder shall have been satisfied, any
excess remaining thereafter shall be returned to Maker.
Maker, and all sureties, endorsers, and guarantors of this
Note, hereby (a) waive demand, presentment for payment, notice of
nonpayment, protest, notice of protest and all other notice, filing
of suit and diligence in collecting this Note, in enforcing any of
the security rights or in proceeding against the Security; (b)
agree to any substitution, exchange, addition or release of any of
the Security or the addition or release of any party or person
primarily or secondarily liable hereon; (c) agree that Holder shall
not be required first to institute any suit, or to exhaust his,
their or its remedies against Maker or any other person or party to
become liable hereunder or against the Security in order to enforce
payment of this Note; (d) consent to any extension, rearrangement,
renewal or postponement of time of payment of this Note and to any
other indulgence with respect hereto without notice, consent or
consideration to any of the foregoing; (e) agree and promise to pay
all reasonable costs and expenses, including attorneys' fees and
disbursements (whether suit be brought or not, and at all
pre-trial, trial and appellate levels, including, without
limitation, in connection with any bankruptcy proceedings) incurred
by the Holder in connection with any default or in any proceeding
to protect or enforce any provision of this Note, the Security
Documents, or any instrument by which the Note is secured, whether
or not suit be brought; and (f) agree that, notwithstanding the
occurrence of any of the foregoing (except the express written
release by Holder of any such person), they shall be, and shall at
all times relevant hereto remain, jointly and severally, directly
and primarily, liable for all sums due under this Note and the
Security Documents.
This Note is secured by the Security Documents and all other
documents which may now or hereafter evidence and/or secure this
Note, together with all future modifications, amendments,extensions,
or renewals thereof.
This Note and each of the Security Documents securing the same
are to be governed by the laws of the State of Florida. Terms used
herein which are defined in the Security Documents but which are
not otherwise defined herein have the same definition as set forth
in the Security Documents. In the event of any conflict between the
terms set forth in this Note and the Security Documents, the terms
as described and set forth in this Note shall control.
If more than one, all obligations and agreements of the
undersigned Maker(s) are joint and several.
Nothing contained herein shall be deemed to limit any rights,
powers or privileges which the Holder may have by reason of it
being a national banking association pursuant to any law of the
State of Florida or of the United States, or any rule, regulation
or order of any departrnent or agency thereof, and nothing herein
shall be deemed to make unlawful any transaction or conduct by the
Holder which is lawful pursuant to, or which is permitted by, any
of the foregoing.
THIS NOTE RENEWS AND AMENDS THAT CERTAIN PROMISSORY NOTE
DATED AS OF FEBRUARY 10, 1995 IN THE PRINCIPAL AMOUNT OF $760,000.00.
AQUAGENIX, INC. (THE PARENT OF MAKER) HAS THIS DATE EXECUTED
AND DELIVERED TO HOLDER A PROMISSORY NOTE IN THE AMOUNT OF $760,000.00.
ANY DEFAULT IN SUCH NOTE SHALL BE DEEMED A DEFAULT HEREUNDER.
MAKER AND HOLDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE ANY RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THE NOTE OR ANY OF THE SECURITY DOCUMENTS, OR ANY AGREEMENT OR
INSTRUMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION THEREWITH, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN)
OR ACTIONS OF ANY KIND BY EITHER PARTY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE HOLDER TO MARE THE LOAN EVIDENCED HEREBY.
IN WITNESS WHEREOF, the undersigned Maker(s) has executed this
Note as of the date first above written.
Florida Underground Petroleum Tank
Contractors, Inc a Florida corporation
By /s/Andrew Chesler
Print Andrew Chesler
As its Executice Vice President
Corporate Seal
RE-AFFIRMATION AND RATIFICATION OF GUARANTY
AGREEMENTS
THIS RE-AFFIRMATION AND RATIFICATION OF GUARANTY AGREEMENTS
is made and entered into this 29th day of March, 1996 by ANDREW CHESLER,
ALAN CHESLER, ROBERT RADLER, ENVIRONMENTAL WATERWAY MANAGEMENT, INC., a
Florida corporation, HASS ENVIRONMENTAL SERVICES, INC., a New Jersey
corporation, and AQUAGENIX, INC., a Delaware Corporation, hereinafter
collectively called "Guarantors".
RECITALS:
A. As of February 10, 1995, Guarantors each executed and
delivered to SunBank/Miami, N.A., a national banking association,
n/k/a SUNTRUST BANK, MIAMI, N.A. ("Lender") separately executed
Guaranty Agreements ("Guaranties").
B. The Guaranties guaranteed a revolving credit loan in the
principal amount of $760,000.00 loan dated as of February 10, 1995 (the
"Loan") made by Lender to Florida Underground Petroleum Tank
Contractors, Inc., a Florida Corporation ("Borrower").
C. Borrower has requested Lender to agree to various
modifications of the loan documents relating to the Loan and Lender
has agreed to the same, subject to Guarantors re-affirming and
ratifying their obligations as set forth in the Guaranties.
NOW, THEREFORE, in consideration of these presents, Guarantors
agree as follows:
1. The above recitals are true and correct.
2. Guarantors have each had the opportunity to review the
(i) First Amendment to Credit Agreement (the "First Amendment");
and, (ii) the Revolving Credit Note in the amount of $760,000.00
each dated of even date herewith.
3. Guarantors hereby ratify and re-affirm the Guaranties as
if they were executed on this date and further re-affirm and ratify
that such Guaranties continue to apply to the Credit Agreement
dated as of February 10, 1995 and as amended by the First Amendment
as well as to any document executed incident thereto.
4. The corporate Guarantors named above hereby affirm that
each have the corporate power to execute this Agreement and further
that appropriate authority has been granted to the party executing
this agreement on behalf of such corporate Guarantors.
5. Guarantors represent and warrant to Lender that they have
no claims or offsets arising out of the Guaranties or any document
executed incident thereto. Guarantors represent and warrant to
Lender that the execution of this Agreement, the First Amendment or
the Renewal Revolving Credit Note will not release in any way the
Guarantors from any obligation set forth in the Guaranties.
6. GUARANTORS HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY RE-AFFIRM THEIR WAIVER OF THE RIGHT
THEY MAY HAVE TO A TRIAL BY JURY AS SET FORTH IN THE
GUARANTIES.
IN WITNESS WHEREOF, the parties have hereunto set their hands
and seals to be affixed hereto on the day and year first set forth
above .
Witnesses as to all:
/s/Kimberly Floyd /s/Andrew Chesler
Witness Kimberly Floyd Andrew Chesler
/s/Alan Chesler
Alan Chesler
/s/Robin Miller
Witness Robin Miller /s/Robert Radler
Robert Radler
Environmental Waterway
Management, Inc.
By /s/Andrew Chesler
Print Andrew Chesler
As its President
Hass Environmental
Services, Inc.
By /s/Andrew Chesler
Print Andrew Chesler
As its Vice President
Aquagenix, Inc.
By /s/Andrew Chesler
Print Andrew Chesler
As its President
STATE OF FLORIDA )
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this 29th
day of March, 1996 by Andrew Chesler who produced (Known to me)
as identification and who did not take an oath.
/s/Kirsten E. Johnson
NOTARY PUBLIC, STATE OF FLORIDA
Name: Kirsten E. Johnson
Commission No:
STATE OF FLORIDA )
COUNTY OFBROWARD )
The foregoing instrument was acknowledged before me this 29th
day of March, 1996 by Alan Chesler who produced (Known to me)
as identification and who did not take an oath.
/s/Kirsten E. Johnson
NOTARY PUBLIC, STATE OF FLORIDA
Name: Kirsten E. Johnson
Commission No:
STATE OF FLORIDA )
COUNTY OFBROWARD )
The foregoing instrument was acknowledged before me this 29th
day of March, 1996 by Robert Radler who produced (Known to me)
as identification and who did not take an oath.
/s/Kirsten E. Johnson
NOTARY PUBLIC, STATE OF FLORIDA
Name: Kirsten E. Johnson
Commission No:
STATE OF FLORIDA )
COUNTY OFBROWARD )
The foregoing instrument was acknowledged before me this 29th
day of March, 1996 by Andrew Chesler as President of Environmental
Waterway Management, Inc., a Florida Corporation who has produced
(Known to me) as identification and who did not take an oath.
/s/Kirsten E. Johnson
NOTARY PUBLIC, STATE OF FLORIDA
Name: Kirsten E. Johnson
Commission No:
STATE OF FLORIDA )
COUNTY OFBROWARD )
The foregoing instrument was acknowledged before me this 29th
day of March, 1996 by Andrew Chesler as Vice President of Aquagenix,
Inc., a Delaware Corporation who has produced (Known to me) as
identification and who did not take an oath.
/s/Kirsten E. Johnson
NOTARY PUBLIC, STATE OF FLORIDA
Name: Kirsten E. Johnson
Commission No:
STATE OF FLORIDA )
COUNTY OFBROWARD )
The foregoing instrument was acknowledged before me this 29th
day of March, 1996 by Andrew Chesler as Vice President of Haas
Environmental Services, Inc., a New Jersey Corporation who has
produced (Known to me) as identification and who did not take an
oath.
/s/Kirsten E. Johnson
NOTARY PUBLIC, STATE OF FLORIDA
Name: Kirsten E. Johnson
Commission No:
CONTRACT
BETWEEN THE
SOUTH FLORIDA WATER MANAGEMENT DISTRICT
AND
ENVIRONMENTAL WATERWAY MANAGEMENT, INC.
This CONTRACT is entered into on February 6, 1996,
between "the Parties," the South Florida Water
Management District, a public corporation of the State
of Florida ("the DISTRICT"), and Environmental Waterway
Management, Inc., a Florida Corporation, FEID Number
65-0226856, ("the CONTRACTOR").
WITNESSETH THAT:
WHEREAS, the DISTRICT is a public corporation of the
State of Florida, created by Florida Legislature and
given those powers and responsibilities enumerated in
Chapter 373, Florida Statutes to include entering into
contracts with public agencies, private corporations or
other persons; and
WHEREAS, the DISTRICT solicited for the services of a
CONTRACTOR to provide crews and supplies for Melaleuca
control; and
WHEREAS, the CONTRACTOR has submitted a proposal in
response to the DISTRICT'S solicitation for such goods
and services: and
WHEREAS, the CONTRACTOR represents that it is qualified
and willing to provide said goods and services; and the
DISTRICT wishes to enter into a CONTRACT with the
CONTRACTOR; and
WHEREAS, the CONTRACTOR warrants and represents that it
has no obligation or indebtedness that would impair its
ability to fulfill the terms and conditions of this
CONTRACT; and
WHEREAS, the Governing Board of the DISTRICT, at its
December 14, 1995 meeting, has awarded this CONTRACT to
the CONTRACTOR;
NOW THEREFORE, the DISTRICT and the CONTRACTOR, in
consideration of the mutual benefits flowing from each
to the other, do hereby agree as follows:
Contract No. C-7564 - Page 1 of 11
ARTICLE 1- STATEMENT OF WORK
1.1 The CONTRACTOR shall, to the satisfaction of the
DISTRICT, fully and timely perform all work items
described in the "Statement of Work," attached hereto
as Exhibit "A," and made a part of this CONTRACT. The
DISTRICT shall authorize work under this CONTRACT with
Work Orders, a copy attached hereto as Exhibit "B" and
made a part of this CONTRACT. Each Work Order shall
specify the work to be performed. The not to exceed
amount for each Work Order shall be the only basis for
reimbursement to the CONTRACTOR. The DISTRICT shall pay
the CONTRACTOR the amount for each executed Work Order
upon receipt and acceptance of the required tasks and
deliverables. The DISTRICT guarantees no minimum amount
of work to be performed by CONTRACTOR under the
CONTRACT.
ARTICLE 2 - TERM OF THE CONTRACT
2.1 The period of performance of this CONTRACT shall
commence on the date of this and continue through
December 31, 1998.
2.2 The parties agree that time is of the essence in
the performance of each and every obligation under this
CONTRACT.
ARTICLE 3 - COMPENSATION/CONSIDERATION
3.1 As consideration for providing the goods and
services required by this CONTRACT, the DISTRICT shall
pay the CONTRACTOR in accordance with the hourly rates
and expenses as specified and attached hereto as
Exhibit "C" and made a part of this CONTRACT.
Compensation for performance shall be based upon
completion of authorized Work Orders performed under
this CONTRACT. The total amount of consideration for
this CONTRACT shall not exceed Five Million Four
Hundred Thousand Dollars and No Cents ($5,400,000.00).
3.2 The amount expended under this CONTRACT for the
DISTRICT'S fiscal year ending September 30, 1996, shall
not exceed One Million Eight Hundred Dollars and No
Cents ($1,800,000.00). Further funding of this CONTRACT
is subject to DISTRICT Governing Board budgetary
appropriation for the following DISTRICT fiscal
year(s). In the event the DISTRICT does not approve
funding for future fiscal years, this CONTRACT shall
terminate upon expenditure of the current funding,
notwithstanding other provisions in this CONTRACT to
the contrary. The DISTRICT will notify the CONTRACTOR
in writing after the adoption of the final DISTRICT
budget for each subsequent fiscal year if funding is
not approved for this CONTRACT.
3.3 The CONTRACTOR, by executing this CONTRACT,
certifies to truth-in-negotiation, specifically,
that wage rates and other factual unit costs
Contract No. C-7564 - Page 2 of 11
supporting the consideration are accurate, complete,
and current at the time of contracting. The CONTRACTOR
agrees that the DISTRICT may adjust the consideration
for this CONTRACT to exclude any significant sums by
which the consideration was increased due to
inaccurate, incomplete, or non-current wage rates and
other factual unit costs. The DISTRICT shall make any
such adjustment within one (1) year following the
termination of this CONTRACT.
ARTICLE 4 - INVOICING AND PAYMENT
4.1 The CONTRACTOR'S invoices shall reference the
DISTRICT'S Contract Number C-7564 and WORK ORDER Number
and shall be sent to the following address:
South Florida Water Management District
Attn: Division of Procurement and Contract
Administration
P.O. Box 24680
3301 Gun Club Road
West Palm Beach, FL 334164680
The CONTRACTOR should not submit invoices to any other
address at the
DISTRICT.
4.2 Invoices shall itemize the date the services were
rendered, the hours worked and describe the goods and
services, including crew size, provided for each day
billed for the period during which the CONTRACTOR
worked. Invoices for reimbursement of herbicides and
adjuvants shall be accompanied by the copies of
receipts for the materials' purchase. Invoices shall be
accompanied by the required "Daily Report Form"
attached hereto as Exhibit "D" and made a part of this
CONTRACT. Invoices shall also be accompanied by the
Minority Business Utilization Report, attached hereto
as Exhibit "E" and made a part of this CONTRACT.
4.3 The DISTRICT shall pay the full amount of the
invoice within thirty (30) days of receipt and
acceptance, provided the CONTRACTOR has performed the
work according to the terms and conditions of this
CONTRACT. However, failure by the CONTRACTOR to follow
the foregoing instructions shall result in an
unavoidable delay of payment by the DISTRICT.
4.4 Any early payment discount offered by the
CONTRACTOR shall be clearly indicated on the invoice,
including the percentage of the discount and the time
period for which the discount is valid. The DISTRICT
reserves the option to accept such early payment
discounts.
4.5 The CONTRACTOR fully understands and agrees that
the DISTRICT shall not pay for any obligation or
expenditure made by the CONTRACTOR
Contract No. C-7564 - Page 3 of 11
prior to the commencement date of this CONTRACT, unless
the DISTRICT authorizes such payment in writing.
ARTICLE 5 - PROJECT MANAGEMENT/NOTICE
5.1 The Project Manager for the DISTRICT is Francois
Laroche, at 3301 Gun Club Road, West Palm Beach, FL,
telephone (407) 687-6193. The Project Manager for the
CONTRACTOR is Elroy Timmer, at 6500 NW 15th Ave., Fort
Lauderdale, FL 33309, telephone (305) 969-8000. The
parties shall direct all matters arising in connection
with the performance of this CONTRACT, other than
invoices and notices, to the attention of the Project
Managers for attempted resolution or action. The
Project Managers shall be responsible for overall
coordination and oversight relating to the performance
of this CONTRACT.
5.2 All notices, demands, or other communications to
the CONTRACTOR under this CONTRACT shall be in writing
and shall be sent by certified mail to:
Environmental Waterway Management, Inc.
6500 NW 15th Ave.
Fort Lauderdale, FL 33309
All notices to the DISTRICT under this CONTRACT shall
be in writing and sent by certified mail to:
South Florida Water Management District
Attn: Division of Procurement and Contract
Administration
3301 Gun Club Road
P. O. Box 24680
West Palm Beach, FL 33416-4680
The CONTRACTOR shall also provide a copy of all notices
to the DISTRICT'S Project Manager. All notices required
by this CONTRACT shall be considered delivered upon
receipt. Should either party change its address,
written notice of such new address shall promptly be
sent to the other party.
All correspondence to the DISTRICT under this CONTRACT
shall reference the DISTRICT'S Contract Number C-7564.
ARTICLE 6 - INDEMNIFICATION & INSURANCE
6.1 For value received, which is hereby acknowledged,
the CONTRACTOR shall defend, indemnify, save, and hold
the DISTRICT, its agents, assigns, and employees,
harmless from any and all claims or causes of action,
including without limitation, all damages, losses,
liabilities, expenses, costs, and attorney's fees
related to such claims, resulting from any negligent or
intentional act or
Contract No. C-7564 - Page 4 of 11
omission, or the violation of any federal, state, or
local law or regulation, by the CONTRACTOR, its
subcontractors, agents, assigns, invitees, or employees
in connection with this CONTRACT. The CONTRACTOR
further acknowledges that it is solely responsible for
ensuring its compliance and the compliance of its
subcontractors, agents, assigns, invitees and employees
with the terms of this CONTRACT.
6.2 The CONTRACTOR shall procure and maintain; through
the term of this CONTRACT, insurance coverage
reflecting, at a minimum, the limits and coverage
conditions identified on the DISTRICT'S Certificate of
Insurance, attached hereto as Exhibit "F," and made a
part of this CONTRACT. The coverage required shall
extend to all employees and subcontractors of the
CONTRACTOR. The attached DISTRICT Certificate of
Insurance shall be completed in full, indicating the
producer, insured, carrier's name and Best rating,
policy numbers and effective and expiration dates of
each type of coverage required. The Certificate shall
be signed by the insurance carrier's authorized
representative.
6.3 The CONTRACTOR shall require appropriate personal
protective equipment in all operations where there is
exposure to hazardous conditions.
6.4 The CONTRACTOR shall instruct employees required
to handle or use toxic materials or other harmful
substances regarding their safe handling and use,
including instruction on the potential hazards,
personal hygiene and required personal protective
measures. A Material Safety Data Sheet (MSDS) shall be
provided by the CONTRACTOR to the DISTRICT on each
chemical product used.
6.5 The CONTRACTOR shall comply with the standards and
regulations set forth by the Occupational Safety and
Health Administration (OSHA), the Florida Department of
Labor and Employment Security and all other appropriate
federal, state, local or DISTRICT safety and health
standards.
6.6 The CONTRACTOR shall initiate and maintain an
accident prevention program which shall include, but
shall not be limited to, establishing and supervising
programs for the education and training of employees in
the recognition, avoidance, and prevention of unsafe
conditions and acts.
6.7 The DISTRICT assumes no duty with regard to the
supervision of the CONTRACTOR and the CONTRACTOR shall
remain solely responsible for compliance with all
safety requirements and for the safety of all persons
and property at the site of contract performance.
Contract No C-7564 - Page 5 or 11
ARTICLE 7 - TERMINATION/REMEDIES
7.1 If either party fails to fulfill its obligations
under this CONTRACT in a timely and proper manner, the
other party shall have the right to terminate this
CONTRACT by giving written notice of any deficiency.
The party in default shall then have ten (10) calendar
days from receipt of notice to correct the deficiency.
If the defaulting party fails to correct the deficiency
within this time, this CONTRACT shall terminate at the
expiration of the ten (10) day time period.
7.2 The DISTRICT may terminate this CONTRACT at
any time for convenience upon thirty (30) calendar days
prior written notice to the CONTRACTOR. The performance
of work under this CONTRACT may be terminated by the
DISTRICT in accordance with this clause in whole, or
from time to time in part, whenever the DISTRICT shall
determine that such termination is in the best interest
of the DISTRICT . Any such termination shall be
effected by delivery to the CONTRACTOR of a Notice of
Termination specifying the extent to which performance
of work under the CONTRACT is terminated, and the date
upon which such termination becomes effective.
In the event of termination, the DISTRICT shall
compensate the CONTRACTOR for all authorized and
accepted work performed through the termination date.
The DISTRICT shall be relieved of any and all future
obligations hereunder, including but not limited to
lost profits and consequential damages, under this
CONTRACT. The DISTRICT may withhold all payments to the
CONTRACTOR for such work until such time as the
DISTRICT determines the exact amount due to the
CONTRACTOR.
7.3 In the event the CONTRACTOR is found not in
compliance with environmental rules or regulations
regarding the handling and application of herbicides,
the DISTRICT may terminate this CONTRACT. Any such
termination shall be effected in the same manner as
stated in paragraph 7.2 above.
7.4 If either party initiates legal action, including
appeals, to enforce this CONTRACT, the prevailing party
shall be entitled to recover a reasonable attorney's
fee, based upon the fair market value of the services
provided.
7.5 In the event a dispute arises which the project
managers cannot resolve between themselves, the parties
shall have the option to submit to non-binding
mediation. The mediator or mediators shall be
impartial, shall be selected by the parties, and the
cost of the mediation shall be borne equally by the
parties. The mediation process shall be confidential to
the extent permitted by law.
7.6 The CONTRACTOR understands and acknowledges that the
DISTRICT anticipates that the Florida Department of
Environmental Protection shall reimburse sixty percent
(60%) of the DISTRICT'S expenditures under this
CONTRACT. In the event such funding becomes
unavailable, that shall be good
Contract No. C-7564 - Page 6 of 11
and sufficient cause for the DISTRICT to terminate the
CONTRACT pursuantto paragraph 7.2 above.
ARTICLE 8 - RECORDS RETENTION/OWNERSHIP
8.1 The CONTRACTOR shall maintain records and the
DISTRICT shall have inspection and audit rights as
follows:
A. Maintenance of Records: The CONTRACTOR
shall maintain all financial and non-financial records
and reports directly or indirectly related to the
negotiation or performance of this CONTRACT including
supporting documentation for any service rates,
expenses, research or reports. Such records shall be
maintained and made available for inspection for a
period of five years from completing performance and
receiving final payment under this CONTRACT.
B. Examination of Records: The DISTRICT or
its designated agent shall have the right to examine
in. accordance with generally accepted governmental
auditing standards all records directly or indirectly
related to this CONTRACT. Such examination may be made
only within five years from the date of final payment
under this CONTRACT and upon reasonable notice, time
and place.
C. Extended Availability of Records for
Legal Disputes: In the event that the DISTRICT should
become involved in a legal dispute with a third party
arising from performance under this CONTRACT, the
CONTRACTOR shall extend the period of maintenance for
all records relating to the CONTRACT until the final
disposition of the legal dispute, and all such records
shall be made readily available to the DISTRICT.
8.2 All documents, including, but not limited to,
technical reports, research notes, scientific data and
computer programs in draft and final form including the
source code and object code, which are developed by the
CONTRACTOR in connection with this CONTRACT, may be
utilized by the DISTRICT in its normal course of
business. DISTRICT use may include, but shall not be
limited to, reproduction, distribution and preparation
of derivative works.
ARTICLE 9 - STANDARDS OF COMPLIANCE
9.1 The CONTRACTOR, its employees, subcontractors or
assigns, shall comply with all applicable federal,
state, and local laws and regulations relating to the
performance of this CONTRACT. The DISTRICT undertakes
no duty to ensure such compliance, but will attempt to
advise the CONTRACTOR, upon request, as to any such
laws of which it has present knowledge.
9.2 The CONTRACTOR hereby assures that no person shall
be
Contract No. C-7564 - Page 7 of 11
discriminated against on the grounds of race, color,
creed, national origin, handicap, age, or sex, in any
activity under this CONTRACT. The CONTRACTOR shall take
all measures necessary to effectuate these assurances.
9.3 The laws of the State of Florida shall govern all
aspects of this CONTRACT. In the event it is necessary
for either party to initiate legal action regarding
this CONTRACT, venue shall be in the Fifteenth Judicial
Circuit for claims under state law and in the Southern
District of Florida for any claims which are
justiciable in federal court.
9.4 The CONTRACTOR, by its execution of this CONTRACT,
acknowledges and attests that neither he, nor any of
his suppliers, subcontractors, or consultants who shall
perform work which is intended to benefit the DISTRICT,
is a convicted vendor or, if the CONTRACTOR or any
affiliate of the CONTRACTOR has been convicted of a
public entity crime, a period longer than 36 months has
passed since that person was placed on the convicted
vendor list. The CONTRACTOR further understands and
accepts that this CONTRACT shall be either voidable by
the DISTRICT or subject to immediate termination by the
DISTRICT, in the event there is any misrepresentation
or lack of compliance with the mandates of Section
287.133, F.S. The DISTRICT, in the event of such
termination, shall not incur any liability to the
CONTRACTOR for any work or materials furnished.
9.5 The CONTRACTOR shall not be exempted from paying
Florida State Sales and Use taxes to the appropriate
governmental agencies or for payment by theCONTRACTOR
to suppliers for taxes on materials used to fulfill its
contractual obligations with the DISTRICT. The
CONTRACTOR shall be responsible and liable for the
payment of all of its FICA/Social Security and other
taxes resulting from this CONTRACT.
9.6 The CONTRACTOR warrants that it has not employed
or retained any person, other than a bona fide employee
working solely for the CONTRACTOR, to solicit or secure
this CONTRACT. Further the CONTRACTOR warrants that it
has not paid or agreed to pay any person, other than a
bona fide employee working solely for the CONTRACTOR,
any fee, commission, percentage, gift, or other
consideration contingent upon or resulting from the
awarding or making of this CONTRACT. For breach of this
provision, the DISTRICT may terminate this CONTRACT
without liability and, at its discretion, deduct or
otherwise recover the full amount of such fee,
commission, percentage, gift, or other consideration.
9.7 The CONTRACTOR shall allow public access to all
project documents and materials in accordance with the
provisions of Chapter 119, Florida Statutes. Should the
CONTRACTOR assert any exemptions to the requirements of
Chapter 119 and related Statutes, the burden of
establishing such exemption, by way of injunctive or
other relief as provided by law, shall be upon the
CONTRACTOR.
Contract No. C-7564 - Page 8 of 11
ARTICLE 10 - RELATIONSHIP BETWEEN THE PARTIES
10.1 The CONTRACTOR is an independent contractor and is
not an employee or agent of the DISTRICT. Nothing in
this CONTRACT shall be interpreted to establish any
relationship other than that of an independent
contractor, between the DISTRICT and the CONTRACTOR,
its employees, agents, subcontractors, or assigns,
during or after the performance of this CONTRACT. The
CONTRACTOR is free to provide similar services for
others.
10.2 The CONTRACTOR shall not assign, delegate, or
otherwise transfer its rights and obligations as set
forth in this CONTRACT without the prior written
consent of the DISTRICT. Any attempted assignment in
violation of this provision shall be void.
10.3 The CONTRACTOR shall not pledge the DISTRICT'S
credit or make the DISTRICT a guarantor of payment or
surety for any contract, debt, obligation, judgment,
lien, or any form of indebtedness.
ARTICLE 11 - GENERAL PROVISIONS
11.1 Notwithstanding any provisions of this CONTRACT to
the contrary, the parties shall not be held liable for
any failure or delay in the performance of this
CONTRACT that arises from fires, floods, strikes,
embargoes, acts of the public enemy, unusually severe
weather, outbreak of war, restraint of Government,
riots, civil commotion, force majeure, act of God, or
for any other cause of the same character which is
unavoidable through the exercise of due care and beyond
the control of the parties. Failure to perform shall be
excused during the continuance of such circumstances,
but this CONTRACT shall otherwise remain in effect.
This provision shall not apply if the "Statement of
Work" of this CONTRACT specifies that performance by
CONTRACTOR is specifically required during the
occurrence of any of the events herein mentioned.
11.2 The DISTRICT actively encourages the participation
of Minority-owned and Woman- owned Business Enterprises
in the DISTRICT'S procurement and contracting activity.
The CONTRACTOR shall take all necessary and reasonable
steps to ensure that Minority-owned and Woman-owned
Enterprises have the maximum opportunity to compete for
and perform on work related to this CONTRACT. At any
time during the term of this CONTRACT, the DISTRICT may
request information on the minority participation of
this CONTRACT and may request the CONTRACTOR to
increase its efforts and volume of awards to certified
minority firms relative to the agreed upon commitment.
The CONTRACTOR has agreed to a minimum MBE first tier
sub-consultant participation level of fifteen percent
(15%) of the total contract value .
Contract No. C-7564 - Page 9 ot 11
11.3 Prior to engaging in any discussions with the news
media pertaining to this CONTRACT, the CONTRACTOR shall
notify the DISTRICT'S Office of Government and Public Affairs.
This includes news releases, media requests for interviews,
feature articles, fact sheets, or promotional materials.
11.4 A key element of the DISTRICT'S mission is
environmental protection and enhancement. In
furtherance of this mission:
A. The DISTRICT encourages the CONTRACTOR to use
recycled paper for all reports, notices and
correspondence, which are prepared as part of
this CONTRACT. All reports generated in
connection with this CONTRACT shall be
printed on both sides of the paper on which
it is prepared. The DISTRICT further
encourages the CONTRACTOR to purchase
recycled paper for use in its operations if
recycled paper is reasonably cost competitive
with virgin paper. "Reasonably cost
competitive" means that recycled paper is no
more than 10% more expensive than the
alternative.
B. The DISTRICT encourages the CONTRACTOR to
preserve and protect the environment and to
conserve natural resources by promoting
energy, water, and refuse conservation
programs.
11.5 In the event any provisions of this CONTRACT shall
conflict, or appear to conflict, the CONTRACT,
including all exhibits, attachments and all documents
specifically incorporated by reference, shall be
interpreted as a whole to resolve any inconsistency.
11.6 Failures or waivers to insist on strict
perforrnance of any covenant, condition, or provision
of this CONTRACT by the parties, their successors and
assigns shall not be deemed a waiver of any of its
rights or remedies, nor shall it relieve the other
party from performing any subsequent obligations
strictly in accordance with the terms of this CONTRACT.
No waiver shall be effective unless in writing and
signed by the party against whom enforcement is sought.
Such waiver shall be limited to provisions of this
CONTRACT specifically referred to therein and shall not
be deemed a waiver of any other provision. No waiver
shall constitute a continuing waiver unless the writing
states otherwise.
11.7 Should any term or provision of this CONTRACT be
held, to any extent, invalid or unenforceable, as
against any person, entity or circumstance during the
term hereof, by force of any statute, law, or ruling of
any forum of competent jurisdiction, such invalidity
shall not affect any other term or provision of this
CONTRACT, to the extent that the CONTRACT shall remain
operable, enforceable and in full force and effect to
the extent permitted by law.
11.8 This CONTRACT may be amended only with the written
approval of the parties hereto.
Contract No. C-7564 - Page 10 of 11
11.9 This CONTRACT states the entire understanding and agreement
between the parties and supersedes any and all written or oral
representations, statements, negotiations,or agreements previously
existing between the parties with respect to the subject matter of
this CONTRACT. The CONTRACTOR recognizes that any representations,
statements or negotiations made by DISTRICT staff do not suffice to
legally bind the DISTRICT in a contractual relationship unless they
have been reduced to writing and signed by an authorized DISTRICT
representative. This CONTRACT shall inure to the benefit of and shall
be binding upon the parties, their respective assigns, and successors
in interest.
IN WlTNESS WHEREOF, the parties or their duly authorized representatives
hereby execute this CONTRACT on the date first written above.
Legal Form Approved
SFWMD Office of Counsel SOUTH FLORIDA WATER MANAGEMENT
DISTRICT, BY ITS GOVERNING BOARD
By /s/James D. Young
(for) Deputy Executive Director
ENVIRONMENTAL WATERWAY
MANAGEMENT, INC.
By:/s/Andrew Chesler
Title: President
Contract No. C-7564 - Page 1 of 11
EXHIBIT "A"
STATEMENT OF WORK
I. INTRODUCTION
Melaleuca quinquenervia (Cav.) Blake, also known as the cajeput, punk,
paperbark, and tea-tree, is a hardwood (Myrtaceae) species native to Australia
which has become established as an invasive pest species in vital wetland areas
of South Florida. This species is well-adapted to grow in these wetland areas
since it tolerates indefinite flooding, and it has no known natural control
organisms. Its spread is further accelerated when fire and/or frost stimulate
seed release on newly-exposed soils. Newly-germinated seed may survive flooding
and the multiple layers of fire-resistant bark protect trees from death after
wildfire or intentional land management burns.
As part of the overall management plan for melaleuca elimination in South
Florida, the District initiated several melaleuca control projects in the
Water Conservation Areas and in Lake Okeechobee. At the present time
herbicides are the primary melaleuca control tools used by the District. The
method of herbicide application is currently restricted to direct tree
application. This involves completely peeling the bark around the
circumference of the tree, exposing the cambium for direct herbicide
application. Melaleuca seedlings in mixed plant communities are currently
hand-pulled in an effort to minimize the impact of herbicide on the sawgrass
and other non-target vegetation. Pulled seedlings are left hanging on the
native vegetation or in a pile to reduce the possibility of regrowth. Broadcast
application of certain herbicides may control Melaleuca and may be used in
instances of dense melaleuca monoculture.
This contract is for the provision of crews, equipment and supplies for
melaleuca control within District managed lands, particularly the Water
Conservation Areas, Lake Okeechobee, the Buffer Strip, and along District
canal banks and rights-of-way (see District map attached as Appendix A).
Methods of control includes, but are not limited to: direct tree injections,
and broadcast applications of herbicide solutions and manual removal of
seedlings.
II. SCOPE OF WORK
Work performance will consist of furnishing all labor and equipment
and performing all operations for treating melaleuca and other exotic nuisance
trees on lands managed by the District. Ground crews can be transported by
trucks, airboats or helicopter, (the helicopter will be provided by the District
under a separate contract). Once on site ground crews will perform treatments
of single trees, saplings and seedlings. Each ground crew will consist of one
supervisor and several applicators, (6 - 8 applicators). The ground supervisor
must be a licensed herbicide applicator and will be responsible for data
collection, herbicide application and inventory, herbicide safety procedures,
and crew supervision. The ground crew supervisor must
Page 1 of 4, Exhibit "A". Contract No. C-7564
also have navigation equipment such as a hand-held Global Positioning
System (G.PS.) unit, to mark areas of treatment for future references.
Ideally, all trees must be treated and treatment sites recorded in a one square
mile area before proceeding further. Melaleuca and other exotic trees shall be
treated in accordance with guidelines established for each site by the
District's project manager.
III. WORK BREAKDOWN STRUCTURE
1- Ground crews will proceed as follows:
a. Mature trees, outliers and small stands.
Each applicator will be equipped with a machete and a spray bottle
containing herbicide. Each individual mature tree will be completely
girdled and the exposed cambium sprayed with herbicide. The cut must
be least one foot above the expected water level and should angle
downward. The tree bark must not be removed in order to create a
pocket to protect the herbicide in rain events. Small trees can be cut
off at least one foot above the expected water level and the herbicide
applied directly on the stump. However, bigger trees 3" DBH and up
must be left standing to avoid navigation hazards to airboat traffic.
The herbicide shall be sprayed into the exposed areas until thoroughly
wet, runoff of herbicide to the ground must not occur.
b. Seedlings and saplings.
Seedlings and saplings will be hand-pulled and left hanging on other
vegetation or put in a pile to reduce the possibility of resprouting.
When conditions dictate, seedlings and saplings can be treated with
herbicide using a back-pack sprayer.
2- The contractor will strictly adhere to all herbicide label application,
precautionary and safety statements, as well as the District's General
Safety Standards attached hereto as Appendix B.
3- Data collection.
The ground crew Supervisor is responsible for collecting the following
data: treatment date, treatment location (longitude & latitude), number
of trees and seedlings treated per applicator, herbicide volume used,
number of applicators, hours worked, and weather condition. This data will
be recorded on the "Daily Report Form" attached as Exhibit "C."
Page 2 ot 4, Exhibit "A". Contract No C-7564
4- Supplies and other equipment.
a. The contractor will be responsible for providing applicators
with all supplies and equipment for melaleuca control,
including back pack sprayers and blowers, machetes, spray
bottles, safety equipment, etc.
b. Air boats/ and all terrain vehicles may be required to
transport crews and supplies to and from treatment sites.
Such transportation shall be the responsibility of the
contractor.
c. Communications equipment to be provided by the contractor
shall include: mirrors, radios (District band if possible),
beeper, and cellular telephones.
d. All herbicide will be purchased by the contractor as recommended
by District staff. The District shall reimburse the contractor
for costs for such herbicide.
5- Inspection.
a. The District reserves the right to inspect, at any time upon
notice to the contractor, the contractor's procedures, spray
system, spray solution, and other ancillary equipment, and
to approve operating personnel. Inspection, however, will not
relieve the contractor of any obligations or responsibilities
nor will it transfer any liability to the District.
IV. DELIVERABLES
1- Deliverables will be the data listed above submitted on a 3.5"
computer disk (preferably WordPerfect format) with the monthly invoice and
the completed "Daily Report Forms" identified as Exhibit "C." The original
"Daily Report Form" data sheet must be submitted to the District, and the
contractor must keep a copy on file.
2- Invoices are to be submitted to the District monthly within ten working
days after the end of the month of work. Invoices are to include a summary
of all data collected and completed District forms for the billing period.
3- The District staff may perform biweekly inspections and approval of all
work being performed in conjunction with acceptance of the deliverables
listed above.
4- A final report compiling data of all work performed by the contractor
must be submitted to the District with the final invoice.
V. TIME SCHEDULE AND TIME FRAMES
The District does not guarantee any minimum amount of work, nor the extent of
services and goods required for the treatment of melaleuca. The District expects
the majority of the work to
Page 3 ot 4. Exhibit "A". Contract No C-7564
be completed between November 1 through June 30. Weather and site conditions
may interfere with the time schedule. Work Orders will be issued prior to the
commencement of any work.
The District will inform the contractor of the schedule as work progresses.
However the District may halt work at any time, upon written notice. The
contractor will preferably work four 10-hour days per week. Other combination
of hours and days will be allowed as long as the schedule is approved by the
District.
VI. PROJECT LOCATION
The District intend to control melaleuca throughout all District managed land.
However, the majority of the work be in the Water Conservation Areas and in Lake
Okeechobee. Treatment sites shall be laid out in one square-mile sections on map
coordinates supplied to the contractor. The sections will be treated
systematically as directed by District staff. Crews must be available for pick
up by the District supplied helicopter at a location close to the work site.
Pick up and drop off points shall be designated by District staff.
Page 4 of 4, Exhibit "A". Contract No. C-7564
Aquagenix, Inc.
6500 Northwest 15th Avenue
Fort Lauderdale, Florida 33309
March 20, 1996
The Equitable Life Assurance Society
of the United States
787 Seventh Avenue
New York, New York 10019
Re: $5,000,000 12.50% Senior Secured Notes of Aquagenix, Inc. due October
31, 2003
Ladies and Gentlemen:
Reference is made to that certain Amended And Restated Senior Secured
Note and Warrant Purchase Agreement among you and the undersigned, dated as
of December 15, 1995 (the "Agreement"). Terms used herein and not defined
shall have the respective meanings ascribed to them in the Agreement.
This will confirm our mutual agreement that the Agreement is modified in
the following respects:
1. Amendment to Section 7.4. Section 7.4 of the Agreement is
hereby amended by adding thereto a new initial sentence which shall
read in its entirety as follows:
The Company shall maintain Consolidated EBITDA of not
less than $300,000 for each and every fiscal quarter of 1996.
2. Amendment to Section 7.5. Section 7.5 to the Agreement is
hereby amended by deleting "$4,000,000" which appears in the right-hand
column of the table therein opposite the year 1996, and substituting thereof
"$1,000,000".
Except as specifically amended hereby, the Agreement shall
remain in full force and effect.
If the foregoing correctly states our agreement, kindly sign a counterpart
of this letter in the space provided and return a fully signed copy to the
undersigned whereupon the Agreement shall be deemed amended in accordance
with this letter.
Very truly yours,
AQUAGENIX, INC.
By: /s/Andrew Chesler
Its Chief Executive Officer
& President
Environmental Waterway Management, Inc., Florida Underground Petroleum Tank
Contractors, Inc. And Haas Environmental Services, Inc. each consent to the
foregoing amendments, and reaffirm their respective obligations under the
Subsidiary Guaranties and the Subsidiary Security Agreements.
ENVIRONMENTAL WATERWAY
MANAGEMENT, INC.
By: /s/ Andrew Chesler
Its President
FLORIDA UNDERGROUND PETROLEUM TANK
CONTRACTORS, INC.
By: /s/Andrew Chesler
Its Executive Vice President
HAAS ENVIRONMENTAL SERVICES, INC.
By: /s/Andrew Chesler
Its Executive Vice President
Accepted and agreed to
The Equitable Life Assurance Society
of the United States
By /s/William Gobbo, Jr.
Its Investment Officer
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<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS AS OF MARCH 31, 1996 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 810,280
<SECURITIES> 0
<RECEIVABLES> 791,232
<ALLOWANCES> (29,529)
<INVENTORY> 333,386
<CURRENT-ASSETS> 3,764,382
<PP&E> 2,305,556
<DEPRECIATION> (460,742)
<TOTAL-ASSETS> 9,048,678
<CURRENT-LIABILITIES> 1,704,203
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<COMMON> 8,483,768
<OTHER-SE> (6,163,191)
<TOTAL-LIABILITY-AND-EQUITY> 9,048,678
<SALES> 0
<TOTAL-REVENUES> 2,252,634
<CGS> 0
<TOTAL-COSTS> 1,094,942
<OTHER-EXPENSES> 761,355
<LOSS-PROVISION> 26,368
<INTEREST-EXPENSE> 119,479
<INCOME-PRETAX> 250,490
<INCOME-TAX> 0
<INCOME-CONTINUING> 250,490
<DISCONTINUED> 869,507
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<NET-INCOME> 1,119,997
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