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Mr. Terrance G. Pinto
<br />Director of Utilities Services
<br />Indian River County, Florida
<br />1840 25th Street
<br />Vero Beach, Florida 32960
<br />Re:. DMNCO w. Indian River County
<br />November 18, 1996
<br />86a 99 f-*'Ilc 944
<br />AMERICAN
<br />CONSULTATION
<br />SERVICES,
<br />INC.
<br />311 AVENUE OF THE AMERICAS - SUITE 212
<br />NEW YORK„NEW YORK 10{)1:
<br />TEL 212 073.1600
<br />FAX 112 673-1641
<br />Dear Mr. Pinto:
<br />I
<br />This communication is forwarded, at your specific request, as a result of certain press inquiries
<br />relative to the "withdrawal” of Marvin L. Slomowitz ("MLS") as a principal from the company
<br />developing the above project.
<br />Your attention is directed to the AM that the MLS withdrawal follows a default by MLS in remitting
<br />the agreed consideration for the capital shares of this special purpose development company. The
<br />spar were allocated, by formula, upon condition that MLS would perform cerrain agreed acts in
<br />regar to the project. During the period between March and November, 1996 ("organizational
<br />peri .), MLS was repeatedly advised that no capital shares could be issued, to him, until he met his
<br />finaaciei, and other, obligations as agreed to with the remaining principals of D3tIVCO. It appears
<br />that MLS discovered his inability to comply with the understanding and consequently voluntarily
<br />withdrew. Ifa subsequent statements to the press were merely an effort to dilute the impact of his
<br />default
<br />The Jernaming principals of INRIVCO had recently become suspect of the inability of MLS to
<br />co y, as agreed, and consequently in and about October, 1996 began arranging for standby
<br />sources for the contribution of the equity capital, which was the agreed obligation of MLS. During
<br />the entire organizational period the remaining principals naw to it that every financial obligation of
<br />this company was met and every detail for the orderly continuance of the project was accounted for.
<br />To date, the remaining prmcq)Ws have advanced all of the capital necessary, for the orderly conduct
<br />of this project and, in addition, have guaranteed certain other financial arrangements, without
<br />participation by MLS.
<br />The Quality of the project, the first ofirs kind kn the United States, and the financial depth of the joint
<br />ventc}re participants (hereinafter discussed). allow for sign ficaat interest by a number of other
<br />propped financial participants. Discussions with these entities continue. In the meandmc, it has
<br />becoMe increasingly obvious that the need for equity finding, for this project, has become greatly
<br />reduced by virtue of the financial mvestmews of the remaining principals and the economies which
<br />were practiced during the organizational period As a result, the amount of equity funding in regard
<br />to, this project, has become substantially reduced. Discussions with proposed equity investors
<br />continue to date due to the decision to undertake three additional similar projects.
<br />At all times during the organizational period, and prior thereto, arrangements have been in place to
<br />provide the financing of the entire construction program for the project. These project financing
<br />programs remain under active consideration by both GE Capital Corporation ("GE Capital") and
<br />Gnmtal & Co., Incorporated ("Gtlmtak"). Appropriate written confirmations have been received from
<br />both companies. The communication fim GE Capital constituted a portion of the original Response
<br />to Request for Proposal (MRFP"). Needles to say, definitive commitmems cannot be issued until
<br />execlltinn- i f the proposed contract between Indian River County ("IRC") and INRIVCO.
<br />project team assembled for INRIVCO is comprised of several entities. All are joint venture
<br />paiapants. The organizational chart, for this project, is forwarded herewith. Included as principal
<br />&i&=QW1 SM401 CMM A121- ("PSG") of Houn0n, Texas - a wholly owned subsidiary of Air &
<br />t
<br />W er Technology ("AWT") (a corporation traded on the American Stock Exchange), which is is
<br />tum majority controlled by Compagnie Generale des Eaux ("CGE"). CGE is the largest municipal
<br />semen company in the world with revenues of more than S34 billion and a net worth of
<br />approximately S17 billion. CWs US operations have annual revenues of over S1 billion and
<br />approximately 8,000 employees. PSG provides cost effective services to operate and maintain waste
<br />treatment facilities and manage bio -solids disposal programs. Since 1978 PSG has been operating,
<br />maintaining and managing waste facilities in this country. PSG presently operates state-of-the-art
<br />composting facilities, more large complex facilities across the United Stases than any of its
<br />competitors including, the entire water and wastewater system serving the Commonwealth of Puerto
<br />Rico. Additionally, PSG operates waste treatment plants in New Orleans, LA; four plants in
<br />Oklahoma City, OR; Brockton, MA Cranston, RI: New Bedford, MA, Fall River, MA; Houston,
<br />TX; Winter Garden, FL; West Haven, CT; Schenectady NY; and Bristol, TTI. In 1988 PSG was
<br />se" to act as the operations and maintenance consultant to Raiser Engineers for the new multi-
<br />billion dollar Boston Harbor clean up project. Additionally, PSG has unequaled waste disposal
<br />experience throughout the United States. CGE and their affiliates operate more than 50 solid waste
<br />material recovery, shredding densified fiuel pellets, composting and co -composting facilities
<br />throughout Europe and Asia. The financial background of AWT, has previously been submitted in
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<br />November 26, 1996
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