<PAGE>   1


                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                                     OF THE
                         SECURITIES EXCHANGE ACT OF 1934

<TABLE>
<S>                                                      <C>
For the Quarterly Period Ended March 31, 2001            Commission File Number 0-21054
</TABLE>

                           SYNAGRO TECHNOLOGIES, INC.
             (Exact name of Registrant as specified in its Charter)

                  DELAWARE                                 76-0511324
      (State or other jurisdiction of                     (IRS Employer
       incorporation or organization)                  Identification No.)

       1800 BERING DRIVE, SUITE 1000                  HOUSTON, TEXAS 77057
 (Address of principal executive offices)                 (Zip Code)

                                 (713) 369-1700
              (Registrant's telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant is
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                Yes [X]  No [ ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the latest practicable date.


                 CLASS                      OUTSTANDING AT MAY 11, 2001
     -----------------------------          ---------------------------
     Common stock, par value $.002                  19,435,781




<PAGE>   2




                           SYNAGRO TECHNOLOGIES, INC.

                                      INDEX


<TABLE>
<CAPTION>
                                                                         PAGE
                                                                         ----
<S>                                                                      <C>
   PART I  -- FINANCIAL INFORMATION

   Condensed Consolidated Balance Sheets as of March  31, 2001
      (Unaudited) and December 31, 2000 ...........................       3

   Condensed Consolidated Statements of Operations for the
      Three  Months Ended March  31, 2001 and 2000 (Unaudited) ....       4

   Condensed Consolidated Statements of Cash Flows for the
      Three  Months Ended March 31, 2001 and 2000 (Unaudited) .....       5

   Notes to Condensed Consolidated Financial Statements ...........       7

   Management's Discussion and Analysis of Financial
   Condition and Results of Operations ............................      14

   PART II -- OTHER INFORMATION ...................................      19
</TABLE>




                                       2
<PAGE>   3




                           SYNAGRO TECHNOLOGIES, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                             MARCH 31,       DECEMBER 31,
                                                                                2001             2000
                                                                           -------------    -------------
<S>                                                                        <C>              <C>
ASSETS
Current assets:
   Cash and cash equivalents ...........................................   $   2,292,128    $   4,597,420
   Restricted cash .....................................................       2,750,020        2,085,039
   Accounts receivable, net ............................................      49,191,895       50,073,651
   Note receivable, current portion ....................................         188,903          188,903
   Prepaid expenses and other current assets ...........................      10,042,543       10,385,755
                                                                           -------------    -------------
      Total current assets .............................................      64,465,489       67,330,768

Property, machinery & equipment, net ...................................     198,488,053      198,466,357

Other assets:
   Goodwill, net .......................................................     168,269,969      166,698,921
   Notes receivable, long-term portion .................................          16,527           16,527
   Other, net ..........................................................      10,099,020       11,308,019
                                                                           -------------    -------------
Total assets ...........................................................   $ 441,339,058    $ 443,820,592
                                                                           =============    =============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Current portion of long-term debt ...................................   $  13,029,042    $  11,450,380
   Notes payable to prior owners, current portion ......................         100,000          100,000
   Accounts payable and accrued expenses ...............................      43,369,324       41,676,473
                                                                           -------------    -------------
      Total current liabilities ........................................      56,498,366       53,226,853
Long-term liabilities:
   Long-term debt obligations ..........................................     268,084,511      273,482,224
   Notes payable to prior owners .......................................          50,000           75,000
   Other long-term liabilities .........................................       5,310,159          105,205
                                                                           -------------    -------------
      Total long-term liabilities ......................................     273,444,670      273,662,429

COMMITMENTS AND CONTINGENCIES

Redeemable Preferred Stock, 69,792.29 shares issued and
   outstanding, redeemable at $1,000 per share .........................      65,110,099       63,367,178
Stockholders' equity:
   Preferred stock, $.002 par value, 10,000,000 shares authorized,
      none issued and outstanding ......................................              --               --
   Common stock, $.002 par value, 100,000,000 shares authorized,
      19,435,781, shares and 19,435,781 issued and outstanding .........          38,872           38,872
   Additional paid in capital ..........................................     109,085,542      109,085,542
   Accumulated deficit .................................................     (59,532,943)     (55,560,282)
   Accumulated other comprehensive income ..............................      (3,305,548)              --
                                                                           -------------    -------------
      Total stockholders' equity .......................................      46,285,923       53,564,132
                                                                           -------------    -------------
Total liabilities and stockholders' equity .............................   $ 441,339,058    $ 443,820,592
                                                                           =============    =============
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.



                                       3
<PAGE>   4



                           SYNAGRO TECHNOLOGIES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                               THREE MONTHS ENDED MARCH 31,
                                                                                   2001            2000
                                                                               ------------    ------------
<S>                                                                            <C>             <C>
Sales .......................................................................  $ 58,795,142    $ 18,666,426
Cost of services ............................................................    45,575,711      15,092,223
                                                                               ------------    ------------
Gross profit ................................................................    13,219,431       3,574,203
Selling, general and administrative expenses ................................     5,102,544       2,479,920
Amortization of goodwill ....................................................     1,132,648         622,514
                                                                               ------------    ------------
   Income from operations ...................................................     6,984,239         471,769
                                                                               ------------    ------------
Other (income) expense:
   Other income, net ........................................................        (6,270)         (4,258)
   Interest expense, net ....................................................     7,359,564       2,089,908
                                                                               ------------    ------------
      Total other expenses, net .............................................     7,353,294       2,085,650
                                                                               ------------    ------------
Loss before provision for income taxes ......................................      (369,055)     (1,613,881)
   Provision for income taxes ...............................................            --              --
                                                                               ------------    ------------
Net loss before preferred stock dividends,
   noncash beneficial conversion charge, and
   cumulative effect of change in accounting for
   derivatives ..............................................................      (369,055)     (1,613,881)
Preferred stock dividends ...................................................     1,742,921         359,426
Noncash beneficial conversion charge ........................................            --      22,138,343
Cumulative effect of change in accounting for derivatives ...................     1,860,685              --
                                                                               ------------    ------------
Net loss applicable to common stock .........................................  $ (3,972,661)   $(24,111,650)
                                                                               ============    ============
Basic and diluted loss per share:
   Net loss before preferred stock dividends,
      noncash beneficial conversion charge, and
      cumulative effect of change in accounting for
      derivatives ...........................................................  $       (.02)   $       (.09)
   Preferred stock dividends ................................................  $       (.09)   $       (.02)
                                                                               ------------    ------------
      Subtotal ..............................................................  $       (.11)   $       (.11)
   Noncash beneficial conversion charge .....................................  $         --    $      (1.17)
   Cumulative effect of change in accounting for derivatives ................  $       (.10)   $         --
                                                                               ------------    ------------
Net loss per common share ...................................................  $       (.21)   $      (1.28)
                                                                               ============    ============
Weighted average shares outstanding, basic ..................................    19,435,781      18,863,475
Weighted average shares outstanding, diluted ................................    19,435,781      18,863,475
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.



                                       4
<PAGE>   5


                           SYNAGRO TECHNOLOGIES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                   THREE MONTHS ENDED MARCH 31,
                                                                                       2001            2000
                                                                                   ------------    ------------
<S>                                                                                <C>             <C>
Cash flow from operating activities:
   Net loss before preferred stock dividends,
      noncash beneficial conversion charge, and
      cumulative effect of change in accounting
      for derivatives ..........................................................   $   (369,055)   $ (1,613,881)
   Adjustment to reconcile net loss before
      preferred stock dividends, noncash beneficial conversion charge, and
      cumulative effect of change in accounting for derivatives to net cash
      provided by (used in) operating activities:
        Depreciation ...........................................................      3,289,132         953,332
        Amortization ...........................................................      1,539,235         622,514
        Gain on sale of property, machinery and
          equipment ............................................................         (6,270)         (4,257)
        (Increase) decrease in the following, excluding the effects
          of acquisitions:
        Accounts receivable ....................................................        185,241       3,041,336
        Prepaid expenses and other assets ......................................        100,449         607,075
        Accounts payable and accrued expenses ..................................      1,665,316      (2,223,928)
                                                                                   ------------    ------------
   Net cash provided by operating activities ...................................      6,404,048       1,382,191
                                                                                   ------------    ------------
Cash flows from investing activities:
      Purchase of businesses, net of cash acquired .............................             --     (49,451,716)
      Purchases of property, machinery and equipment ...........................     (3,389,611)       (886,362)
      Proceeds from sale of property, machinery and
        equipment ..............................................................         60,050          19,026
      Other ....................................................................       (836,283)             49
                                                                                   ------------    ------------
Net cash used in investing activities ..........................................     (4,165,844)    (50,319,003)
                                                                                   ------------    ------------
Cash flows from financing activities:
      Proceeds from debt .......................................................             --      85,821,746
      Payments on debt .........................................................     (3,115,623)    (50,906,470)
      Debt issuance costs ......................................................        (34,464)     (6,509,618)
      Increase in restricted cash ..............................................     (1,393,409)       (547,630)
      Issuance of preferred stock, net of offering costs .......................             --      22,006,036
      Exercise of options and warrants .........................................             --         126,250
                                                                                   ------------    ------------
   Net cash provided by (used in) financing activities .........................     (4,543,496)     49,990,314
                                                                                   ------------    ------------
Net increase (decrease) in cash and cash equivalents ...........................     (2,305,292)      1,053,502
Cash and cash equivalents, beginning of period .................................      4,597,420         180,633
                                                                                   ------------    ------------
Cash and cash equivalents, end of period .......................................   $  2,292,128    $  1,234,135
                                                                                   ============    ============
</TABLE>


         The accompanying notes are an integral part of these condensed
                       consolidated financial statements.



                                       5
<PAGE>   6



                           SYNAGRO TECHNOLOGIES, INC.
          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS--(CONTINUED)
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                            THREE MONTHS ENDED
                                                 MARCH 31,
                                          -----------------------
                                             2001         2000
                                          ----------   ----------
<S>                                       <C>          <C>
Supplemental Cash Flow Information
Interest paid during the period .......   $5,458,523   $1,983,431
Taxes paid during the period ..........           --           --
</TABLE>


                   NONCASH INVESTING AND FINANCING ACTIVITIES

During 2000, the Company issued an aggregate of 57,746.93 shares of Series C,
Series D, and Series E Preferred Stock ("Preferred Stock) with an eight percent
dividend and beneficial conversion feature. The Company recognized both the
value of the dividend of $3,938,499 and the value of the beneficial conversion
feature of $37,045,268 ($22,128,000 through March 31, 2000) as a preferred stock
dividend and a noncash beneficial conversion charge, respectively.

During 2000, the Company issued an aggregate of 220,898 shares relating to
cashless exercises of certain warrants and options pursuant to an exemption from
registration under Rule 144 of the Securities Act.



                                       6
<PAGE>   7





                           SYNAGRO TECHNOLOGIES, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

(1)  BASIS OF PRESENTATION

GENERAL

The accompanying unaudited, condensed consolidated financial statements have
been prepared by Synagro Technologies, Inc. ("Synagro" or the "Company")
pursuant to the rules and regulations of the Securities and Exchange Commission.
These condensed consolidated financial statements reflect all normal recurring
adjustments which are, in the opinion of management, necessary for the fair
presentation of such financial statements for the periods indicated. Certain
information relating to the Company's organization and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles has been condensed or omitted in this Form 10-Q
pursuant to Rule 10-01 of Regulation S-X for interim financial statements
required to be filed with the Securities and Exchange Commission. However, the
Company believes that the disclosures herein are adequate to make the
information presented not misleading. The results for the three months ended
March 31, 2001, are not necessarily indicative of future operating results. It
is suggested that these financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's Annual Report
on Form 10-K, as amended, for the year ended December 31, 2000.

The accounting policies followed by the Company in preparing interim
consolidated financial statements are consistent with those described in the
"Notes to Consolidated Financial Statements" in the Company's Form 10-K, as
amended on April 30, 2001 for the year ended December 31, 2000.

The Company is engaged in the business of managing biosolids and other organic
materials for beneficial reuse throughout the United States. The Company's
services include, among other things, land application, compliance monitoring,
cleanout services, facilities operations and maintenance, and the marketing of
end products from the treatment of such materials.

ACCOUNTING PRONOUNCEMENTS

Effective January 1, 2001, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 133," Accounting for Derivative Instruments and Hedging
Activities," as amended by SFAS 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities," which requires that the Company
recognize all derivative instruments as asset or liabilities in its balance
sheet and measure them at their fair value. The statement also requires that
changes in the fair value of derivatives be recognized in earnings unless
specific hedge accounting criteria are met. The Company's derivatives consist of
interest rate swap agreements and option agreements related to hedging
requirements under its bank credit facility. The Company's option agreements do
not qualify for hedge accounting under SFAS 133. Changes in the fair value of
these derivatives will be recognized in earnings. The Company has determined the
interest rate swap agreements qualify for hedge accounting and has designated
these instruments as cash flow hedges of the Company's exposure to changes in
variable interest rates. The noncash transition adjustment related to the
adoption of this statement has been reflected as a "cumulative effect of change
in accounting for derivatives" of approximately $1,861,000 charged to net income
and approximately $2,058,000 charged to other comprehensive income included in
stockholders' equity. The liability related to these derivatives of
approximately $5,200,000 is reflected in other long-term liabilities at March
31, 2001.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company utilizes financial instruments, which inherently have some degree of
market risk due to interest rate fluctuations. Management is actively involved
in monitoring exposure to market risk and continues to develop and utilize
appropriate risk management techniques. The Company is not exposed to any other
significant market risks, including commodity price risk or foreign currency
exchange risk, from the use of derivative financial instruments. Management does
not currently use derivative financial instruments for trading or to speculate
on changes in commodity prices or foreign currency exchange rates.

(2)  ACQUISITIONS

2000 ACQUISITIONS

During 2000, the Company purchased Residual Technologies, Limited Partnership
and its affiliates (collectively "RESTEC"), Ecosytematics, Inc., Davis Water
Analysis, Inc., AKH Water Management, Inc., Rehbein, Inc, certain assets and
contracts of Whiteford Construction Company, Environmental Protection &
Improvement Company, Inc. ("EPIC"), and the Bio Gro Division of Waste
Management, Inc. ("Bio Gro") (collectively, the "2000 Acquisitions"). The 2000
Acquisitions were accounted for using the purchase



                                       7
<PAGE>   8


method of accounting. The preliminary allocation of the purchase prices, which
is subject to final adjustment, resulted in approximately $108,532,000 of
goodwill that is being amortized over 40 years. The assets acquired and
liabilities assumed relating to the 2000 Acquisitions are summarized as follows:


<TABLE>
<S>                                                      <C>
      Common stock shares issued ..................            1,325,000
                                                         ===============
      Fair value of common stock issued ...........      $     5,471,000
      Cash paid including transaction costs,
           net of cash acquired ...................          242,317,000
      Less: Fair value of net tangible assets
           acquired ...............................          139,256,000
                                                         ---------------
      Goodwill ....................................      $   108,532,000
                                                         ===============
</TABLE>


The following unaudited pro forma information for the periods set forth below
gives effect to the 2000 Acquisitions as if they had occurred at the beginning
of 2000. The unaudited pro forma information is presented for information
purposes only and is not necessarily indicative of actual results, which might
have occurred if the acquisitions had been made at the beginning of the periods
presented.

<TABLE>
<CAPTION>
                                                        THREE MONTHS ENDED
                                                          MARCH 31, 2000
                                                        ------------------
                                                           (UNAUDITED)
<S>                                                     <C>
Net sales .............................................   $ 59,186,040
Net income (loss) before Preferred Stock Dividends ....     (1,601,762)
Net earnings (loss) applicable to Common Stock ........     (3,191,386)
Net earnings (loss) per share..........................
     Basic ............................................          (0.17)
     Diluted ..........................................          (0.17)
</TABLE>


(3)  PREFERRED STOCK

PREFERRED STOCK

The Company is authorized to issue up to 10,000,000 shares of Preferred Stock,
which may be issued in one or more series or classes by the Board of Directors
of the Company. Each such series or class shall have such powers, preferences,
rights and restrictions as determined by resolution of the Board of Directors.
Series A Junior Participating Preferred Stock will be issued upon exercise of
the Stockholder Rights described below.

SERIES C REDEEMABLE PREFERRED STOCK

On January 26, 2000, the Company authorized 30,000 shares of Series C Preferred
Stock, par value $.002 per share. Upon approval by a majority of the Company's
shareholders and certain other conditions in March 2000, the Series C Preferred
Stock became convertible into Series D Preferred Stock at a rate of 1:1. The
Series C Preferred Stock is senior to the Common Stock or any other equity
securities of the Company. The liquidation value of each share of Series C
Preferred Stock is $1,000 per share ("Liquidation Value") plus accrued and
unpaid dividends. Dividends on each share of Series C Preferred Stock shall
accrue on a daily basis at the rate of eight percent per annum on aggregate
Liquidation Value plus accrued and unpaid dividends. The Series C Preferred
Stock has no voting rights. Shares of Series C Preferred Stock are subject to
mandatory redemption by the Company on January 26, 2010, at a price per share
equal to the Liquidation Value plus accrued and unpaid dividends.

On January 27, 2000, the Company issued 17,358.824 shares of Series C Preferred
Stock, par value $.002 per share, to GTCR Fund VII, L.P. and its affiliates for
$17,358,824. On February 4, 2000, the Company issued 419.4 shares of Series C
Preferred Stock to GTCR Fund VII, L.P. and its affiliates for $419,400. On March
24, 2000, the Company issued 225.000 shares of Series C Preferred Stock to GTCR
Fund VII, L.P. and its affiliates for $225,000. On March 27, 2000, the Company
issued 1,260.000 shares of Series C Preferred Stock to GTCR Fund VII, L.P. and
its affiliates for $1,260,000. The proceeds were used primarily to fund the 2000
Acquisitions. The Company also issued warrants to GTCR Fund VII, L.P. for a
nominal price in connection with the issuance of subordinated debt, which were
immediately exercised for 272.058 shares of Series C Preferred Stock. During
April 2000, all Series C Preferred Stock was converted to Series D Preferred
Stock.


                                       8
<PAGE>   9



SERIES D REDEEMABLE PREFERRED STOCK

On January 26, 2000, the Company authorized 32,000 shares of Series D Preferred
Stock, par value $.002 per share. The Series D Preferred Stock is convertible by
the holders into a number of shares of Common Stock computed by (i) the sum of
(a) the number of shares to be converted multiplied by the Liquidation Value and
(b) the amount of accrued and unpaid dividends by (ii) the conversion price then
in effect. The initial conversion price is $2.50 per share, provided that in
order to prevent dilution, the conversion price may be adjusted. The Series D
Preferred Stock is senior to the Common Stock or any other equity securities of
the Company. The liquidation value of each share of Series D Preferred Stock is
$1,000 per share ("Liquidation Value") plus accrued and unpaid dividends.
Dividends on each share of Series D Preferred Stock shall accrue on a daily
basis at the rate of 8 percent per annum on the aggregate Liquidation Value. The
Series D Preferred Stock is entitled to one vote per share. Shares of Series D
Preferred Stock are subject to mandatory redemption by the Company on January
26, 2010, at a price per share equal to the Liquidation Value plus accrued and
unpaid dividends.

On January 27, 2000, the Company issued 2,641.176 shares of Series D Preferred
Stock to GTCR Fund VII, L.P. and its affiliates for $2,641,176. The proceeds
were used primarily to fund the 2000 Acquisitions. The Company also issued
warrants to GTCR Fund VII, L.P. for a nominal price in connection with the
issuance of subordinated debt, which were immediately exercised for 2,857.143
shares of Series D Preferred Stock.

SERIES E REDEEMABLE PREFERRED STOCK

On June 14, 2000, the Company authorized 55,000 shares of Series E Preferred
Stock, par value $.002 per share. The Series E Preferred Stock is convertible by
the holders into a number of shares of Common Stock computed by (i) the sum of
(a) the number of shares to be converted multiplied by the Liquidation Value and
(b) the amount of accrued and unpaid dividends by (ii) the conversion price then
in effect. The initial conversion price is $2.50 per share, provided that in
order to prevent dilution, the conversion price may be adjusted. The Series E
Preferred Stock is senior to the Common Stock or any other equity securities of
the Company. The liquidation value of each share of Series E Preferred Stock is
$1,000 per share ("Liquidation Value") plus accrued and unpaid dividends.
Dividends on each share of Series E Preferred Stock shall accrue on a daily
basis at the rate of 8 percent per annum on the aggregate Liquidation Value. The
Series E Preferred Stock is entitled to one vote per share. Shares of Series E
Preferred Stock are subject to mandatory redemption by the Company on January
26, 2010, at a price per share equal to the Liquidation Value plus accrued and
unpaid dividends.

On June 15, 2000, the Company issued 6,840 shares of Series E Preferred Stock to
GTCR Fund VII, L.P. and its affiliates for $6,840,000. The proceeds were used
primarily to fund the acquisition of EPIC. The Company also issued warrants to
GTCR Fund VII, L.P. for a nominal price in connection with the issuance of
subordinated debt, which were immediately exercised for 1,400.00 shares of
Series E Preferred Stock.

On August 14, 2000, the Company issued 25,768.744 shares of Series E Preferred
Stock to GTCR Fund VII, L.P. and its affiliates, and 3,233.788 shares to
TCW/Crescent Lenders. Additionally, the Company issued 2,589.635 and 229.88
warrants to GTCR Fund VII, L.P. and Affiliates, and TCW/Crescent Lenders,
respectively, in connection with the issuance of the preferred stock; these were
immediately converted into Series E Preferred Stock. The proceeds of
approximately $29,003,000 were used to partially fund the Bio Gro acquisition.

NONCASH BENEFICIAL CONVERSION

The Series D and Series E Preferred Stock, including Series C Preferred Stock
that were converted into Series D Preferred Stock (see above), the warrants
issued in connection with the subordinated debt and warrants issued in
connection with the issuance of Preferred Stock, which were exercised for
Series C Preferred Stock, Series D Preferred Stock, and Series E Preferred
Stock, are convertible into shares of the Company's common stock at $2.50 per
share. This conversion price of $2.50 was below the market price of the
Company's common stock at the dates of issuance. Financial accounting rules
require that the Company record a "noncash beneficial conversion charge" for the
difference between the market price and the conversion price at the date of
issuance of this preferred stock. Accordingly, during 2000, the Company
recognized the value of this beneficial conversion feature of approximately
$37,045,000 ($22,128,000 through March 31, 2000) as a noncash beneficial
conversion charge at the dates of issuance. The value of such preferred stock
dividend has no impact on the Company's cash flows, but reduces basic and
diluted earnings applicable to holders of Common Stock. Additionally, future
issuances of Series D and Series E Preferred Stock and warrants related to
subordinated debt and issuance of Preferred Stock may result in noncash
beneficial conversions valued in future periods recognized as noncash beneficial
conversion charges.




                                       9
<PAGE>   10



(4)  STOCKHOLDERS' RIGHTS PLAN

In December 1996, the Company adopted a stockholders' rights plan (the "Rights
Plan"). The Rights Plan provides for a dividend distribution of one preferred
stock purchase right ("Right") for each outstanding share of the Company's
common stock, to stockholders of record at the close of business on January 10,
1997. The Rights Plan is designed to deter coercive takeover tactics and to
prevent an acquirer from gaining control of the Company without offering a fair
price to all of the Company's stockholders. The Rights will expire on December
31, 2006.

Each Right entitles stockholders to buy one one-thousandth of a newly issued
share of Series A Junior Participating Preferred Stock of the Company at an
exercise price of $10. The Rights are exercisable only if a person or group
acquires beneficial ownership of 15 percent or more of the Company's common
stock or commences a tender or exchange offer which, if consummated, would
result in that person or group owning 15 percent or more of the common stock of
the Company. However, the Rights will not become exercisable if common stock is
acquired pursuant to an offer for all shares which a majority of the board of
directors determines to be fair to and otherwise in the best interests of the
Company and its stockholders. If, following an acquisition of 15 percent or more
of the Company's common stock, the Company is acquired by that person or group
in a merger or other business combination transaction, each Right would then
entitle its holder to purchase common stock of the acquiring company having a
value of twice the exercise price. The effect will be to entitle the Company
stockholder to buy stock in the acquiring company at 50 percent of its market
price.

The Company may redeem the Rights at $.001 per Right at any time on or prior to
the tenth business day following the acquisition of 15 percent or more of its
common stock by a person or group or commencement of a tender offer for such 15
percent ownership.

In connection with the issuance of the Series C Preferred Stock, Series D
Preferred Stock, and Series E Preferred Stock to GTCR Fund VII, L.P. and its
affiliates, the Board of Directors waived the application of the rights plan.

(5)  DEBT

Long-term debt obligations consist of the following:

<TABLE>
<CAPTION>
                                                                                          MARCH 31,       DECEMBER 31,
                                                                                            2001             2000
                                                                                        -------------    -------------
<S>                                                                                     <C>              <C>
Credit facility - acquisition and term loans ........................................   $ 182,527,777    $ 185,499,999
Subordinated debt ...................................................................      52,760,393       52,760,393
Maryland Energy Financing Administration Limited Obligation Solid
    Waste Disposal Revenue Bonds, 1996 series -
       Revenue bonds due 2001 to 2005 at stated interest rates of 5.45% to 5.85% ....      12,195,000       12,195,000
       Term revenue bond due 2010 at stated interest rate of 6.30% ..................      16,295,000       16,295,000
       Term revenue bond due 2016 at stated interest rate of 6.45% ..................      22,360,000       22,360,000
       Less:  Restricted cash .......................................................      (6,269,657)      (5,541,229)
Capital lease obligations ...........................................................         600,081          626,819
Other notes payable .................................................................         644,959          736,622
                                                                                        -------------    -------------
       Total debt, net of restricted cash ...........................................     281,113,553      284,932,604
Less:
    Current maturities ..............................................................      13,029,042       11,450,380
                                                                                        -------------    -------------
       Long-term debt, net of current maturities ....................................   $ 268,084,511    $ 273,482,224
                                                                                        =============    =============
</TABLE>




                                       10
<PAGE>   11
CREDIT FACILITY

On January 27, 2000, the Company entered into a $110 million amended and
restated Senior Credit Agreement (the "Senior Credit Agreement") by and among
the Company, Bank of America, N.A., and certain other lenders to fund working
capital for acquisitions, to refinance existing debt, to fund capital
expenditures and other general corporate purposes. The Senior Credit Agreement
bears interest at LIBOR or prime plus a margin based on a pricing schedule as
set out in the Senior Credit Agreement. The Senior Credit Agreement was
subsequently syndicated on March 15, 2000, to a banking group, and the capacity
was increased to $120 million. The Senior Credit Agreement was amended and
resyndicated on August 14, 2000, to a banking group, and the capacity was
increased to $230 million. The loan commitments under the Senior Credit
Agreement are as follows:

     (i.)   Revolving Loans up to $30,000,000 outstanding at any one time;

     (ii.)  Term A Loans (which, once repaid, may not be reborrowed) of
            $50,000,000;

     (iii.) Term B Loans (which, once repaid, may not be reborrowed) of
            $100,000,000;

     (iv.)  Acquisition Loans up to $50,000,000 outstanding at any one time
            available on a revolving basis prior to August 14, 2001, provided
            that certain approvals are obtained and certain financial ratios are
            met; and

     (v.)   Letters of credit issuable by the Company up to $20,000,000 as a
            subset of the Revolving Loans. At March 31, 2001, the Company had
            approximately $1,426,000 of letters of credit outstanding.

The amounts borrowed under the Senior Credit Agreement are subject to repayment
as follows:

Period Ending December 31,
<TABLE>
<CAPTION>
                  REVOLVING    TERM A    TERM B    ACQUISITION
                    LOANS       LOANS    LOANS        LOANS
                  ---------    ------    ------    ------------
<S>               <C>          <C>       <C>       <C>
2000 ..........          --      5.00%      .50%              0%
2001 ..........          --     15.00%     1.00%              0%
2002 ..........          --     22.50%     1.00%           5.00%
2003 ..........          --     17.50%     1.00%           6.67%
2004 ..........          --     20.00%     1.00%          11.67%
2005 ..........      100.00%    20.00%     1.00%          76.66%
2006 ..........          --        --     94.50%             --
                  ---------    ------    ------    ------------
                     100.00%   100.00%   100.00%         100.00%
                  =========    ======    ======    ============

</TABLE>



The Senior Credit Agreement includes mandatory repayment provisions related to
excess cash flows, proceeds from certain asset sales, debt issuances and equity
issuances, all as defined in the Senior Credit Agreement. These mandatory
repayment provisions may also reduce the available commitment for Revolving
Loans and Acquisition Loans. The Senior Credit Agreement contains standard
covenants including compliance with laws, limitations on capital expenditures,
restrictions on dividend payments, limitations on mergers and compliance with
certain financial covenants. The Company believes that it is in compliance with
those covenants as of March 31, 2001. The Senior Credit Agreement is secured by
all the assets of the Company and expires on July 27, 2006. As of March 31,
2001, the Company has borrowed approximately $182,528,000 ($45,024,000 of Term A
Loans, $96,618,000 of Term B Loans, and $40,886,000 of Acquisition Loans), which
was primarily used to refinance existing debt, partially fund the 2000
Acquisitions, and to retire bonds acquired in the RESTEC purchase. As of March
31, 2001, and May 11, 2001, the Company has approximately $38,000,000 and
$30,200,000, respectively, of unused borrowings under the Senior Credit
Agreement, of which $17,826,000 and $10,026,000, respectively, is available for
borrowing based on the maximum senior debt to cash flow ratio included in the
Senior Credit Agreement.

SUBORDINATED DEBT

On January 27, 2000, the Company entered into an agreement with GTCR Capital
providing up to $125 million in subordinated debt financing to fund acquisitions
and for certain other uses, in each case as approved by the Board of Directors
of the Company and GTCR Capital. The agreement was amended on August 14, 2000,
allowing, among other things, for GTCR Capital to syndicate a portion of the
commitment. The loans bear interest at an annual rate of 12 percent paid
quarterly and provide warrants that are convertible into Preferred Stock at $.01
per warrant. The unpaid principal plus unpaid and accrued interest must be paid
in full by January 27, 2008. The agreement contains general and financial
covenants. As of March 31, 2001, the Company has borrowed approximately
$52,760,000 of indebtedness


                                       11
<PAGE>   12

under the terms of the agreement, which was used to partially fund the 2000
Acquisitions. Warrants to acquire 9,225.839 shares of Series C, D, and E
Preferred Stock were issued in connection with these borrowings. These warrants
were immediately exercised.

REVENUE BONDS

The revenue bonds (the "Revenue Bonds") and the term revenue bonds (the "Term
Revenue Bonds") (collectively, the "Project Revenue Bonds") were issued in 1996
by the Maryland Energy Financing Administration pursuant to the Maryland Energy
Financing Act. The Company assumed all obligations associated with project
revenue bonds in connection with its acquisition of Bio Gro. The proceeds of the
Project Revenue Bonds were loaned pursuant to a June 1996 financing agreement
for the purposes of financing the costs of the construction of thermal
operations located in Baltimore County, Maryland, at the site of Baltimore's
Back River Wastewater Treatment Plant and in the City of Baltimore, Maryland, at
the site of Baltimore's Patapsco Wastewater Treatment Plant. Both facilities
were in operation prior to 1998.

The Project Revenue Bonds are primarily secured by the pledge of revenues and
assets related to the Company's Back River and Patapsco thermal facilities. The
underlying service contracts between the Company and the City of Baltimore
("Baltimore") obligated the Company to design, construct and operate the thermal
facilities and obligated Baltimore to deliver biosolids for processing at the
thermal facilities. The Company and Baltimore have agreed that Baltimore will
deposit all payments made by Baltimore to the Company under the service
contracts directly with a trustee for the purpose of maintaining a reserve fund
to service debt requirements.

The Project Revenue Bonds can be redeemed at the option of the Company at any
time on or after December 1, 2006, subject to redemption prices specified in the
financing agreement. The Project Revenue Bonds can be redeemed at the option of
the Company under certain extraordinary conditions, as defined in the financing
agreement. Additionally, the Term Revenue Bonds are subject to mandatory sinking
fund requirements prior to final maturity, beginning on December 1, 2006.

Synagro Baltimore, Inc. ("SBI"), a wholly owned subsidiary of the Company, has
guaranteed the performance of services under the underlying service agreements
with the City of Baltimore. Waste Management, Inc., under the terms of the Bio
Gro Acquisition purchase agreement, is currently guaranteeing the performance of
services under the underlying service agreements. The Company is required to pay
Waste Management, Inc. $500,000 a year beginning in 2005 thereafter until the
bonds are fully extinguished or the guarantee is removed. Neither SBI nor Waste
Management has guaranteed payment of debt service on the Project Revenue Bonds.

Restricted cash represents monies held by First Union National Bank (the
"Trustee") for the loan agreement between the Maryland Energy Financing
Administration and SBI. As a requirement of the loan agreement, SBI must meet
the requirements stipulated per the agreement dated June 1, 1996. The loan,
based on the terms of the related indenture, requires that certain monies be
placed in restricted fund accounts to be used for various designated purposes
(i.e., debt service reserve funds, bond funds, etc.). The debt service reserve
fund has been presented net of long-term debt in the March 31, 2001, balance
sheet. Monies in the funds will remain restricted until such time as the related
loan matures or is paid off, whichever occurs first. SBI was in compliance with
the reserve requirements as of March 31, 2001.

At March 31, 2001, the Project Revenue Bonds were collateralized by property,
plant and equipment with a net book value of approximately $61,696,000 and
restricted cash of approximately $9,020,000, of which approximately $6,270,000
is netted against long-term debt and the difference is shown as restricted cash.

INTEREST RATE RISK

Total debt at March 31, 2001, and May 11, 2001, included approximately
$182,528,000 and $190,328,000, respectively, in floating rate debt attributed to
the bank credit facility borrowings at an average interest rate of 7.91 percent.
As a result, the Company's annual interest cost in 2001 will fluctuate based on
short-term interest rates. The Company has entered into interest rate swap
agreements establishing a maximum fixed Libor rate on $96,000,000 of floating
rate debt at an average interest rate of 6.45 percent and separate option
agreements in order to manage risk and reduce exposure to interest rate
fluctuations as required under the Company's bank credit facility. The Company
has designated its interest rate swap agreements as effective cash flow hedges.
The impact on annual cash flow of a ten percent change in the floating rate
would be approximately $410,000 after taking into consideration the hedge
agreement.

(6) COMMITMENTS AND CONTINGENCIES

LITIGATION

Synagro's business activities are subject to environmental regulation under
federal, state and local laws and regulations. In the ordinary course of
conducting its business activities, Synagro becomes involved in judicial and
administrative proceedings involving governmental authorities at the federal,
state and local levels. Synagro believes that these matters will not have a
material adverse



                                       12
<PAGE>   13

effect on its results of operations or financial condition. However, the outcome
of any particular proceeding cannot be predicted with certainty. Synagro is
under various regulations to procure licenses and permits to conduct its
operations. These licenses and permits are subject to periodic renewal without
which the Company's operations could be adversely affected. Also, there can be
no assurance that regulatory requirements will not change to the extent that it
would materially affect Synagro's consolidated financial statements.

The Company is a defendant in a lawsuit in which the plaintiff claims that the
death of an individual was allegedly caused by certain biosolids disposed of by
a wholly owned subsidiary of the Company. The litigation is currently in the
discovery phase concerning causation. The Company plans to file a motion
challenging causation. Trial is currently scheduled for February 2002. The
Company is vigorously defending itself in the litigation. Synagro cannot predict
the ultimate outcome of the matter at this time. The extent of damages, if any,
in this action has not been determined and although the Company is confident in
its position, the ultimate outcome of the foregoing litigation cannot be
determined at this time.

AZURIX CORP.

The Company is involved in two related lawsuits with Azurix Corp. ("Azurix").
These cases arise from disputes between the Company and Azurix. The events
giving rise to the lawsuits began when Synagro and Azurix entered into a
confidentiality agreement, giving Azurix access to confidential and proprietary
information about Synagro for purposes of evaluating potential transactions
between the parties, including an equity investment (through a subscription
agreement) by Azurix in Synagro to provide the equity capital for business
acquisitions and a possible merger between the two companies. Subsequently,
Synagro and Azurix supplemented the confidentiality agreement by mutually
consenting to the terms and conditions of a standstill agreement under which
Azurix agreed, among other things, not to pursue, for a specified period and in
the absence of Synagro's consent, the acquisition of companies that Synagro had
targeted for acquisition. Synagro believes that Azurix breached its obligations
to Synagro under the confidentiality and standstill agreements, as well as the
subscription agreement.

The Company filed a suit on November 1, 1999, (the "Texas Suit") seeking
injunctive relief, actual and exemplary damages, and attorneys' fees against
Azurix for violations of the standstill agreement and certain confidentiality
agreements governing Azurix's ability to use confidential and proprietary
information provided to Azurix by the Company. On May 9, 2000, the Company filed
a First Amended Petition in which the Company seeks monetary damages, attorneys'
fees and costs of court against Azurix for breaches of the subscription
agreement and certain confidentiality and standstill agreements. Trial in the
Texas Suit is scheduled to begin in September 2001.

Azurix filed a suit on October 29, 1999, (the "Delaware Suit") seeking
injunctive relief, declaratory relief relating to Azurix's obligations under the
standstill agreement and the stock subscription agreement entered into between
the Company and Azurix, and attorneys' and experts' fees. The Company believes
Azurix filed the Delaware Suit in an attempt to have the Company's dispute with
Azurix tried in Delaware (nonjury) rather than in Texas (jury). The Company
subsequently filed a motion with the Delaware Court to dismiss or stay the
Delaware Suit pending the resolution of the Texas Suit, which was granted in
part by a decision of the Delaware Court, on February 3, 2000, to stay the
Delaware Suit. Azurix's efforts to appeal the Delaware Court's ruling have been
denied. On August 4, 2000, Azurix filed a First Amended Answer and Counterclaim
in the Texas Suit asserting allegations of fraud, breaches of contract, and
tortious interference and seeking money damages, exemplary damages, attorneys'
fees and costs of court.

The parties are currently taking and scheduling depositions. The extent of the
damages, if any, in either action has not been determined and although the
Company is confident in its position, the ultimate outcome of the foregoing
litigation cannot be determined at this time.

RIVERSIDE COUNTY

The Company operates a composting facility in Riverside County, California,
under a conditional use permit ("CUP") that expires January 1, 2010. The CUP
conditions allow for a reduction in material intake and the CUP life in the
event of noncompliance with the CUP terms and conditions. On September 15, 1999,
the Company received a preliminary injunction restraining and enjoining the
County of Riverside ("County") from restricting intake of biosolids at the
Company's Riverside composting facility based upon a June 22, 1999, order of the
Board of Supervisors of the County.

The Company has complained that its due process rights were being affected
because the County was improperly administering the odor protocol in the CUP.
Among its complaints, the Company alleges that the County was using untrained
observers to detect odor violations and that those observers were not using
scientific methods to distinguish among different sources of odors and the
levels of odor magnitude. The Court elected not to grant the Company's request
for a preliminary injunction on those issues. Rather, those issues will be
addressed during the underlying lawsuit that is still pending against the County
of Riverside.



                                       13
<PAGE>   14

The Company has taken the position that certain alleged odor violations asserted
by the County staff during the pending litigation were not appropriate under the
CUP. On certain of those instances, the Company has declined to reduce its
intake of biosolids. The County alleges that the odor "violations," as well as
Company's actions in not reducing intake, could reduce the term of the CUP to
January 2002. The Company disagrees and is challenging the County's position in
the lawsuit. The Company has amended the Complaint to add a claim of violation
of the Company's civil rights under U.S.C. Section 1983 based upon the County's
unfair treatment of the Company.

No trial date has been set at this time and discovery is still ongoing. If the
site is closed, the Company may incur additional costs related to contractual
agreements and site closure. Additionally, goodwill and certain assets may be
impaired. Total goodwill associated with the operations is approximately
$14,128,000 at March 31, 2001. The financial impact associated with a site
closure cannot be reasonably estimated at this time. Although the Company feels
that its case is meritorious, the ultimate outcome cannot be determined at this
time.

OTHER

There are various other lawsuits and claims pending against Synagro that have
arisen in the normal course of Synagro's business and relate mainly to matters
of environmental, personal injury and property damage. The outcome of these
matters is not presently determinable but, in the opinion of management, the
ultimate resolution of these matters will not have a material adverse effect on
the consolidated financial condition or results of operations of Synagro. It is
reasonably possible, however, that a change in Synagro's estimate of its
probable liability with respect to these matters could occur.

(7) COMPREHENSIVE INCOME

The Company's comprehensive income for the three months ended March 31, 2001 and
2000, is summarized as follows:

<TABLE>
<CAPTION>
                                                                          2001            2000
                                                                      ------------    ------------
<S>                                                                   <C>             <C>
Net loss applicable to common stock ...............................   $ (3,972,661)   $(24,111,650)
Other comprehensive income (loss)
    Cumulative effect of change in accounting for derivatives .....     (2,058,208)             --
    Change in fair value of derivatives ...........................     (1,170,526)             --
    Reclassification adjustment to earnings .......................        (76,814)             --
                                                                      ------------    ------------
       Subtotal ...................................................     (3,305,548)             --
                                                                      ------------    ------------
Comprehensive income (loss) .......................................   $ (7,278,209)   $(24,111,650)
                                                                      ============    ============
</TABLE>


(8) EARNINGS (LOSS) PER COMMON SHARE

Basic earnings per share ("EPS") are computed by dividing net income applicable
to common stock by the weighted average number of common shares outstanding for
the period. Diluted EPS is computed by dividing net income before preferred
stock dividends by the total of the weighted average number of common shares
outstanding for the period, the weighted average number of shares of common
stock that would be issued assuming conversion of the Company's preferred stock,
and other common stock equivalents for options and warrants outstanding
determined using the treasury stock method. Basic and diluted EPS are the same
and the diluted shares used in computing diluted EPS excludes shares assuming
conversion of the Company's preferred stock and common stock equivalents for
options and warrants outstanding determined using the treasury stock method
totaling 29,135,136 and 7,514,876 for the three months ended March 31, 2001 and
2000, respectively, because diluted earnings per share was less dilutive than
basic earnings per share ("antidilutive").

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

The following discussion should be read in conjunction with the consolidated
historical and pro forma combined financial statements of the Company and
related notes thereto included elsewhere in this Form 10-Q and the Annual Report
on Form 10-K, as amended for the year ended December 31, 2000. This discussion
contains forward-looking statements regarding the business and industry of the
Company within the meaning of the Private Securities Litigation Reform Act of
1995. These statements are based on the current plans and expectations of the
Company and involve risks and uncertainties that could cause actual future
activities and results of operations to be materially different from those set
forth in the forward-looking statements.

The Company is a national provider of residuals management services. The Company
currently performs services for municipalities, local agencies and private
industry and has historically engaged in acquisitions as part of its growth
strategy. The timing


                                       14
<PAGE>   15

and magnitude of acquisitions and assimilation costs may materially affect
future operating results. Accordingly, the operating results for any period may
not necessarily be indicative of the results that may be achieved for any
subsequent period.

HISTORICAL RESULTS AND OPERATIONS

<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED MARCH 31,
                                                                      2001            2000
                                                                  ------------    ------------
<S>                                                               <C>             <C>
Sales .........................................................   $ 58,795,142    $ 18,666,426
Cost of services ..............................................     45,575,711      15,092,223
                                                                  ------------    ------------
Gross profit ..................................................     13,219,431       3,574,203

Selling, general and administrative expenses ..................      5,102,544       2,479,920
Amortization of goodwill ......................................      1,132,648         622,514
                                                                  ------------    ------------
    Income from operations ....................................      6,984,239         471,769
                                                                  ------------    ------------
Other (income) expense:
    Other income, net .........................................         (6,270)         (4,258)
    Interest expense, net .....................................      7,359,564       2,089,908
                                                                  ------------    ------------
       Total other expenses, net ..............................      7,353,294       2,085,650
                                                                  ------------    ------------
Income (loss) before provision for income taxes ...............       (369,055)     (1,613,881)
     Provision for income taxes ...............................             --              --
                                                                  ------------    ------------
Net income (loss) before preferred stock dividend,
    noncash beneficial conversion charge, and
    cumulative effect of change in accounting for
    derivatives ...............................................       (369,055)     (1,613,881)
Preferred stock dividend ......................................      1,742,921         359,426
Noncash beneficial conversion charge ..........................             --      22,138,343
Cumulative effect of change in accounting for derivatives .....      1,860,685              --
                                                                  ------------    ------------
Net income (loss) applicable to common stock ..................   $ (3,972,661)   $(24,111,650)
                                                                  ============    ============
</TABLE>


For the three months ended March 31, 2001, net sales were approximately
$58,795,000 compared to approximately $18,666,000 for the three months ended
March 31, 2000, representing an increase of approximately $40,129,000 or 215
percent. The increase for the three months ended March 31, 2001, relates
primarily to the full-year impact of acquisitions that closed throughout fiscal
2000.

Cost of services and gross profit for the three months ended March 31, 2001,
were approximately $45,576,000 and approximately $13,219,000, respectively,
compared with approximately $15,092,000 and approximately $3,574,000,
respectively, for the three months ended March 31, 2000, resulting in gross
profit as a percentage of sales increasing to 22.5 percent in 2001 from 19.1
percent in 2000. The increase in gross profit for the three months ended March
31, 2001, relates to the 2000 Acquisitions. The gross profit percent increase
relates to the addition of higher margin facilities operations and management
services resulting from certain acquisitions completed in 2000.

Selling, general and administrative expenses were approximately $5,103,000 for
the three months ended March 31, 2001, compared to approximately $2,480,000 for
the three months ended March 31, 2000, representing an increase of approximately
$2,623,000. The increase for the three months ended March 31, 2001, relates
primarily to the full-year impact of acquisitions that closed throughout fiscal
2000. Selling, general and administrative costs decreased from 13.3 percent of
sales to 8.7 percent of sales due to cost reductions resulting from integration
of certain acquired operations and leverage of certain fixed administrative
costs over significantly higher sales.

Amortization of goodwill was approximately $1,133,000 for the three months ended
March 31, 2001, compared to approximately $623,000 for the three months ended
March 31, 2000, representing an increase of approximately $510,000. The increase
relates to additional goodwill resulting from the 2000 Acquisitions.

Other expenses, net were approximately $7,353,000 for the three months ended
March 31, 2001, compared to approximately $2,086,000 for the three months ended
March 31, 2001, representing an increase of approximately $5,267,000. The
increase relates to interest expense associated with the debt incurred to fund
the 2000 Acquisitions.

As a result of the foregoing, net loss (before preferred stock dividends and
change in accounting for derivatives) of approximately $369,000, or $0.02 loss
per share, was reported for the three months ended March 31, 2001, compared to a
net loss of approximately $1,614,000 before preferred stock dividends, noncash
conversion charge and change in accounting for derivatives, or $0.09 loss per
share, for the three months ended March 31, 2000.



                                       15
<PAGE>   16

LIQUIDITY AND CAPITAL RESOURCES

The Company has historically financed its operations principally through the
sale of equity and debt securities, a credit facility and through funds provided
by operating activities.

During 2000, the Company completed the 2000 Acquisitions for aggregate
consideration of approximately $242,317,000. The transactions were accounted for
using the purchase method of accounting. The preliminary allocation of purchase
prices resulted in approximately $108,532,000 of goodwill that is being
amortized over 40 years.

The Company purchased capital assets during the three months ended March 31,
2001, in the amount of approximately $3,390,000 and sold capital assets with
proceeds totaling approximately $60,050.

As of March 31, 2001, the Company had current maturities on long-term debt of
approximately $13,129,000, as compared to approximately $11,550,380 at December
31, 2000. The Company's total long-term debt was approximately $281,264,000 at
March 31, 2001, reflecting a decrease of approximately $3,844,000 over December
31, 2000. This decrease is due primarily to principal payments made on the Bank
of America facility on March 31, 2001.

On January 27, 2000, the Company entered into a $110 million amended and
restated Senior Credit Agreement (the "Senior Credit Agreement") by and among
the Company, Bank of America, N.A., and certain other lenders to fund working
capital for acquisitions, to refinance existing debt to fund capital
expenditures and other general corporate purposes. The Senior Credit Agreement
bears interest at LIBOR or prime plus a margin based on a pricing schedule as
set out in the Senior Credit Agreement. The Senior Credit Agreement was
subsequently syndicated on March 15, 2000, to a banking group, and the capacity
was increased to $120 million. The Senior Credit Agreement was amended and
resyndicated on August 14, 2000, to a banking group, and the capacity was
increased to $230 million. The loan commitments under the Senior Credit
Agreement are as follows:

         (i.)    Revolving Loans up to $30,000,000 outstanding at any one time;

         (ii.)   Term A Loans (which, once repaid, may not be reborrowed) of
                 $50,000,000;

         (iii.)  Term B Loans (which, once repaid, may not be reborrowed) of
                 $100,000,000;

         (iv.)   Acquisition Loans up to $50,000,000 outstanding at any one time
                 available on a revolving basis prior to August 14, 2001,
                 provided that certain approvals are obtained and certain
                 financial ratios are met; and

         (v.)    Letters of credit issuable by the Company up to $20,000,000 as
                 a subset of the Revolving Loans. At May 11, 2001, the Company
                 had approximately $1,576,000 letters of credit outstanding.

The amounts borrowed under the Senior Credit Agreement are subject to repayment
as follows:

<TABLE>
<CAPTION>
                                    REVOLVING    TERM A    TERM B    ACQUISITION
                                     LOANS        LOANS     LOANS       LOANS
                                    ---------    ------    ------    -----------
Period Ending December 31,
<S>                                 <C>          <C>       <C>       <C>
2000 ............................          --      5.00%      .50%             0%
2001 ............................          --     15.00%     1.00%             0%
2002 ............................          --     22.50%     1.00%          5.00%
2003 ............................          --     17.50%     1.00%          6.67%
2004 ............................          --     20.00%     1.00%         11.67%
2005 ............................      100.00%    20.00%     1.00%         76.66%
2006 ............................          --        --     94.50%            --
                                    ---------    ------    ------    -----------
                                       100.00%   100.00%   100.00%        100.00%
                                    =========    ======    ======    ===========
</TABLE>


                                       16
<PAGE>   17

The Senior Credit Agreement includes mandatory repayment provisions related to
excess cash flows, proceeds from certain asset sales, debt issuances and equity
issuances, all as defined in the Senior Credit Agreement. These mandatory
repayment provisions may also reduce the available commitment for Revolving
Loans and Acquisition Loans. The Senior Credit Agreement contains standard
covenants including compliance with laws, limitations on capital expenditures,
restrictions on dividend payments, limitations on mergers and compliance with
certain financial covenants. The Company believes that it is in compliance with
those covenants. The Senior Credit Agreement is secured by all the assets of the
Company and expires on July 27, 2006. As of March 31, 2001, the Company has
borrowed approximately $182,528,000 ($45,024,000 of Term A Loans, $96,618,000 of
Term B Loans, and $ 40,886,000 of Acquisition Loans), which was primarily used
to refinance existing debt, partially fund the 2000 Acquisitions, and defease
bonds acquired in the RESTEC purchase. As of March 31, 2001 and May 11, 2001,
the Company has approximately $38,000,000 and $30,200,000, respectively, of
unused borrowings under the Senior Credit Agreement, of which $17,826,000 and
$10,026,000, respectively, is available for borrowing based on the maximum
senior debt to cash flow ratio included in the Senior Credit Agreement.

On January 27, 2000, the Company entered into an agreement with GTCR Capital
providing up to $125 million in subordinated debt financing to fund acquisitions
and for certain other uses, in each case as approved by the Board of Directors
of the Company and GTCR Capital. The agreement was amended on August 14, 2000,
allowing, among other things, for GTCR Capital to syndicate a portion of the
commitment. The loans bear interest at an annual rate of 12 percent paid
quarterly and provide warrants that are convertible into Preferred Stock at $.01
per warrant. The unpaid principal plus unpaid and accrued interest must be paid
in full by January 27, 2008. The agreement contains general and financial
covenants. As of May 11, 2001, the Company has borrowed approximately
$52,760,000 of indebtedness under the terms of the agreement, which was used to
partially fund the 2000 Acquisitions. Warrants to acquire 9,225.839 shares of
Series C, D, and E Preferred Stock were issued in connection with these
borrowings. These warrants were immediately exercised.

During August 2000, the Company assumed certain revenue bonds in connection with
the Bio Gro Acquisition. The revenue bonds (the "Revenue Bonds") and the term
revenue bonds (the "Term Revenue Bonds") (collectively, the "Project Revenue
Bonds") were issued in 1996 by the Maryland Energy Financing Administration
pursuant to the Maryland Energy Financing Act. The proceeds of the Project
Revenue Bonds were loaned to the Company pursuant to a June 1996 financing
agreement for the purposes of financing the costs of the construction of the
Company's thermal operations located in Baltimore County, Maryland, at the site
of Baltimore's Back River Wastewater Treatment Plant and in the City of
Baltimore, Maryland, at the site of Baltimore's Patapsco Wastewater Treatment
Plant. Both facilities were in operation prior to 1998.

The Project Revenue Bonds are primarily secured by the pledge of revenues and
assets related to the Company's Back River and Patapsco thermal facilities. The
underlying service contracts between the Company and Baltimore obligated the
Company to design, construct and operate the thermal facilities and obligated
Baltimore to deliver biosolids for processing at the thermal facilities. The
Company and Baltimore have agreed that Baltimore will deposit all payments made
by Baltimore to the Company under the service contracts directly with a trustee
for the purpose of maintaining a reserve fund to service debt requirements.

At March 31, 2001, the Project Revenue Bonds were collateralized by property,
plant and equipment with a net book value of approximately $61,696,000 and
restricted cash of approximately $9,020,000.

The Project Revenue Bonds can be redeemed at the option of the Company at any
time on or after December 1, 2006, subject to redemption prices specified in the
financing agreement. The Project Revenue Bonds can be redeemed at the option of
the Company under certain extraordinary conditions, as defined in the financing
agreement. Additionally, the Term Revenue Bonds are subject to mandatory sinking
fund requirements prior to final maturity, beginning on December 1, 2006.

Synagro Baltimore, Inc. ("SBI"), a wholly owned subsidiary of the Company, has
guaranteed the performance of services under the underlying service agreements
with the City of Baltimore. Waste Management, Inc., under the terms of the Bio
Gro Acquisition purchase agreement, is currently guaranteeing the performance of
services under the underlying service agreements. The Company is required to pay
Waste Management, Inc. $500,000 a year beginning in 2005 thereafter until the
bonds are fully extinguished or the guarantee is removed. Neither SBI nor Waste
Management has guaranteed payment of debt service on the Project Revenue Bonds.

Restricted cash represents monies held by First Union National Bank (the
"Trustee)" for the loan agreement between the Maryland Energy Financing
Administration and SBI. As a requirement of the loan agreement, SBI must meet
the requirements stipulated per the



                                       17
<PAGE>   18

agreement dated June 1, 1996. The loan, based on the terms of the related
indenture, requires that certain monies be placed in restricted fund accounts to
be used for various designated purposes (i.e., debt service reserve funds, bond
funds, etc.). The debt service reserve fund has been presented net of debt in
the accompanying balance sheets. Monies in the funds will remain restricted
until such time as the related loan matures or is paid off, whichever occurs
first. SBI was in compliance with the reserve requirements as of March 31, 2001.

At March 31, 2001, the Company had working capital of approximately $7,967,000.
Accounts receivable, prepaid expenses and other current assets decreased by
approximately $882,000 during the three months ended March 31, 2001, primarily
due to a reduction in prepaid insurance and reduced accounts receivable due to
seasonality. The Company evaluates the collectibility of its receivables based
on a specific account-by-account review. The Company had allowances of
approximately $2,101,000 at March 31, 2001. Accounts payable and accrued
expenses increased by approximately $1,693,000 during the three months ended
March 31, 2001, primarily as a result of additional accrued interest. The
Company believes its cash requirements for 2001 can be met with existing cash,
cash flows from operations and its borrowing availability under the Senior
Credit Agreement.

The Company has undergone significant restructuring throughout the last three
years, including changes in senior management and refinancing of its
indebtedness. As a result of these changes, management believes the Company is
better positioned to respond to opportunities in the residuals market.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company utilizes financial instruments, which inherently have some degree of
market risk due to interest rate fluctuations. Management is actively involved
in monitoring exposure to market risk and continues to develop and utilize
appropriate risk management techniques. The Company is not exposed to any other
significant market risks, including commodity price risk or foreign currency
exchange risk, from the use of derivative financial instruments. Management does
not currently use derivative financial instruments for trading or to speculate
on changes in commodity prices or foreign currency exchange rates.

INTEREST RATE RISK

Total debt at March 31, 2001, and May 11, 2001, included approximately
$182,528,000 and $190,328,000, respectively, in floating rate debt attributed to
the bank credit facility borrowings at an average interest rate of 7.91 percent.
As a result, the Company's annual interest cost in 2001 will fluctuate based on
short-term interest rates. The Company has entered into interest rate swap
agreements establishing a maximum fixed LIBOR rate on $96,000,000 of floating
rate debt at an average interest rate of 6.45 percent and separate option
agreements in order to manage risk and reduce exposure to interest rate
fluctuations as required under the Company's bank credit facility. The impact on
annual cash flow of a ten percent change in the floating rate would be
approximately $410,000 after taking into consideration the hedge agreement.

At May 11, 2001, the Company's fixed rate debt had a book value and fair market
value of approximately $99,464,000.



                                       18
<PAGE>   19


                           PART II - OTHER INFORMATION

ITEM 1.

LITIGATION

Synagro's business activities are subject to environmental regulation under
federal, state and local laws and regulations. In the ordinary course of
conducting its business activities, Synagro becomes involved in judicial and
administrative proceedings involving governmental authorities at the federal,
state and local levels. Synagro believes that these matters will not have a
material adverse effect on its results of operations or financial condition.
However, the outcome of any particular proceeding cannot be predicted with
certainty. Synagro is under various regulations to procure licenses and permits
to conduct its operations. These licenses and permits are subject to periodic
renewal without which the Company's operations could be adversely affected.
Also, there can be no assurance that regulatory requirements will not change to
the extent that it would materially affect Synagro's consolidated financial
statements.

The Company is a defendant in a lawsuit in which the plaintiff claims that the
death of an individual was allegedly caused by certain biosolids disposed of by
a wholly owned subsidiary of the Company. The litigation is currently in the
discovery phase concerning causation. The Company plans to file a motion
challenging causation. Trial is currently scheduled for February 2002. The
Company is vigorously defending itself in the litigation. Synagro cannot predict
the ultimate outcome of the matter at this time. The extent of damages, if any,
in this action has not been determined and although the Company is confident in
its position, the ultimate outcome of the foregoing litigation cannot be
determined at this time.

AZURIX CORP.

The Company is involved in two related lawsuits with Azurix Corp. ("Azurix").
These cases arise from disputes between the Company and Azurix. The events
giving rise to the lawsuits began when Synagro and Azurix entered into a
confidentiality agreement, giving Azurix access to confidential and proprietary
information about Synagro for purposes of evaluating potential transactions
between the parties, including an equity investment (through a subscription
agreement) by Azurix in Synagro to provide the equity capital for business
acquisitions and a possible merger between the two companies. Subsequently,
Synagro and Azurix supplemented the confidentiality agreement by mutually
consenting to the terms and conditions of a standstill agreement under which
Azurix agreed, among other things, not to pursue, for a specified period and in
the absence of Synagro's consent, the acquisition of companies that Synagro had
targeted for acquisition. Synagro believes that Azurix breached its obligations
to Synagro under the confidentiality and standstill agreements, as well as the
subscription agreement.

The Company filed a suit on November 1, 1999, (the "Texas Suit") seeking
injunctive relief, actual and exemplary damages, and attorneys' fees against
Azurix for violations of the standstill agreement and certain confidentiality
agreements governing Azurix's ability to use confidential and proprietary
information provided to Azurix by the Company. On May 9, 2000, the Company filed
a First Amended Petition in which the Company seeks monetary damages, attorneys'
fees and costs of court against Azurix for breaches of the subscription
agreement and certain confidentiality and standstill agreements. Trial in the
Texas Suit is scheduled to begin in September 2001.

Azurix filed a suit on October 29, 1999, (the "Delaware Suit") seeking
injunctive relief, declaratory relief relating to Azurix's obligations under the
standstill agreement and the stock subscription agreement entered into between
the Company and Azurix, and attorneys' and experts' fees. The Company believes
Azurix filed the Delaware Suit in an attempt to have the Company's dispute with
Azurix tried in Delaware (nonjury) rather than in Texas (jury). The Company
subsequently filed a motion with the Delaware Court to dismiss or stay the
Delaware Suit pending the resolution of the Texas Suit, which was granted in
part by a decision of the Delaware Court, on February 3, 2000, to stay the
Delaware Suit. Azurix's efforts to appeal the Delaware Court's ruling have been
denied. On August 4, 2000, Azurix filed a First Amended Answer and Counterclaim
in the Texas Suit asserting allegations of fraud, breaches of contract, and
tortious interference and seeking money damages, exemplary damages, attorneys'
fees and costs of court.

The parties are currently taking and scheduling depositions. The extent of the
damages, if any, in either action has not been determined and although the
Company is confident in its position, the ultimate outcome of the foregoing
litigation cannot be determined at this time.

RIVERSIDE COUNTY

The Company operates a composting facility in Riverside County, California,
under a conditional use permit ("CUP") that expires January 1, 2010. The CUP
conditions allow for a reduction in material intake and the CUP life in the
event of noncompliance with the



                                       19
<PAGE>   20

CUP terms and conditions. On September 15, 1999, the Company received a
preliminary injunction restraining and enjoining the County of Riverside
("County") from restricting intake of biosolids at the Company's Riverside
composting facility based upon a June 22, 1999, order of the Board of
Supervisors of the County.

The Company has complained that its due process rights were being affected
because the County was improperly administering the odor protocol in the CUP.
Among its complaints, the Company alleges that the County was using untrained
observers to detect odor violations and that those observers were not using
scientific methods to distinguish among different sources of odors and the
levels of odor magnitude. The Court elected not to grant the Company's request
for a preliminary injunction on those issues. Rather, those issues will be
addressed during the underlying lawsuit that is still pending against the County
of Riverside.

The Company has taken the position that certain alleged odor violations asserted
by the County staff during the pending litigation were not appropriate under the
CUP. On certain of those instances, the Company has declined to reduce its
intake of biosolids. The County alleges that the odor "violations," as well as
Company's actions in not reducing intake, could reduce the term of the CUP to
January 2002. The Company disagrees and is challenging the County's position in
the lawsuit. The Company has amended the Complaint to add a claim of violation
of the Company's civil rights under U.S.C. Section 1983 based upon the County's
unfair treatment of the Company.

No trial date has been set at this time and discovery is still ongoing. If the
site is closed, the Company may incur additional costs related to contractual
agreements and site closure. Additionally, goodwill and certain assets may be
impaired. Total goodwill associated with the operations is approximately
$14,128,000 at March 31, 2001. The financial impact associated with a site
closure cannot be reasonably estimated at this time. Although the Company feels
that its case is meritorious, the ultimate outcome cannot be determined at this
time.

OTHER

There are various other lawsuits and claims pending against Synagro that have
arisen in the normal course of Synagro's business and relate mainly to matters
of environmental, personal injury and property damage. The outcome of these
matters is not presently determinable but, in the opinion of management, the
ultimate resolution of these matters will not have a material adverse effect on
the consolidated financial condition or results of operations of Synagro. It is
reasonably possible, however, that a change in Synagro's estimate of its
probable liability with respect to these matters could occur.

ITEM 6.  FINANCIAL STATEMENTS, EXHIBITS AND REPORTS ON FORM 8-K

(A)  Exhibit Index



                                       20
<PAGE>   21


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

    SYNAGRO TECHNOLOGIES, INC.

    Date:   May 11, 2001                    By:      /s/ Ross M. Patten
                                                --------------------------------
                                                     Chief Executive Officer

    Date:   May 11, 2001                    By:      /s/ Paul Withrow
                                                --------------------------------
                                                     Chief Financial Officer




                                       21
<PAGE>   22

                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
    EXHIBIT
    NUMBER                                          DESCRIPTION
    -------                                         -----------
<S>           <C>
      3.1     Restated Certificate of Incorporation of Synagro Technologies, Inc. (the "Company") dated August 16,
              1996. (Exhibit 3.1 to the Company's Post-Effective Amendment No. 1 to Registration Statement No.
              33-95028, dated October 25, 1996, is incorporated herein by reference.)

      3.2     Bylaws of the Company dated August 5, 1996. (Exhibit 3.2 to the Company's Post-Effective Amendment No. 1
              to Registration Statement No. 33-95028, dated October 25, 1996, is incorporated herein by reference.)

      4.1     Specimen Common Stock Certificate of the Company. (Exhibit 4.1 to the Company's Registration Statement
              on Form 10, dated December 29, 1992, is incorporated herein by reference.)

      4.2     Specimen Warrant Certificate of the Company. (Exhibit 4.2 to the Company's Registration Statement on
              Form S-1 (No. 33-95028), dated July 27, 1995, and as amended, is incorporated herein by reference.)

      4.3     Rights Agreement, dated as of December 20, 1996, between the Company and Intercontinental Registrar &
              Transfer Agency, Inc., as Rights Agent, which includes as Exhibit A thereto the Synagro Technologies,
              Inc. Statement of Designations, Preferences, Limitations and Relative Rights of its Series A Junior
              Participating Preferred Stock, and as Exhibit C thereto the Form of Rights Certificate. (Incorporated by
              reference to Exhibit No. 4.1 to Registrant's Registration Statement on Form 8-A dated December 27,
              1996.)

      4.4     Certificate of Designation, Preferences, Rights and Limitations of Series B Preferred Stock of Synagro
              Technologies, Inc. (Exhibit 4.4 to the Company's Annual Report on Form 10-K for the year ended 1997, is
              incorporated herein by reference.)

      4.5     Registration Rights Agreement dated as of March 31, 1998, among the Company, Environmental Opportunities
              Fund, L.P., Environmental Fund (Cayman), L.P. and other purchasers of the Company's Series B Preferred
              Stock as listed on Exhibit A thereto. (Exhibit 4.5 to the Company's Annual Report on Form 10-K for the
              year ended 1997, is incorporated herein by reference.)

      4.6     Specimen Series B Preferred Stock Certificate. (Exhibit 4.6 to the Company's Annual Report on Form 10-K
              for the year ended 1997, is incorporated herein by reference.)

      4.7     Certificate of Designations, Preferences and Rights of Series C Convertible Preferred Stock of Synagro
              Technologies, Inc. (Exhibit 2.4 to the Company's Current Report on Form 8-K, dated February 17, 2000, is
              herein incorporated by reference.)

      4.8     Certificate of Designations, Preferences and Rights of Series D Convertible Preferred Stock of Synagro
              Technologies, Inc. (Exhibit 2.5 to the Company's Current Report on Form 8-K, dated February 17, 2000, is
              herein incorporated by reference.)

      4.9     Certificate of Designations, Preferences and Rights of Series E Convertible Preferred Stock of Synagro
              Technologies, Inc. (Exhibit 2.3 to the Company's Current Report on Form 8-K, dated June 30, 2000, is
              herein incorporated by reference.)

      4.10    Amended and Restated Warrant Agreement, dated August 14, 2000, by and between Synagro Technologies, Inc.
              and GTCR Capital Partners, L.P. (Exhibit 2.6 to the Company's Current Report on Form 8-K, dated August
              28, 2000, is herein incorporated by reference.)

      4.11    TCW/Crescent Warrant Agreement dated August 14, 2000, by and among Synagro Technologies, Inc. and
              TCW/Crescent Mezzanine partners II, L.P., TCW/Crescent Mezzanine Trust II, TCW Leveraged Income Trust,
              L.P., TCW Leveraged Income Trust II, L.P., and TCW Leveraged Income Trust IV, L.P. (Exhibit 2.5 to the
              Company's Current Report on Form 8-K, dated August 28, 2000, is herein incorporated by reference.)
</TABLE>



                                       22
<PAGE>   23

<TABLE>
<S>           <C>
      4.12    Form of Stock Purchase Warrant (Exhibit 2.7 to the Company's Current Report on Form 8-K, dated August
              28, 2000, is herein incorporated by reference.)

      4.13    Amended and Restated Registration Agreement dated August 14, 2000, by and between Synagro Technologies,
              Inc., GTCR Fund VII. L.P., GTCR Co-Invest, L.P., GTCR Capital Partners, L.P., TCW/Crescent Mezzanine
              Partners II, L.P., TCW/Crescent Mezzanine Trust II, TCW Leveraged Income Trust, L.P., TCW Leveraged
              Income Trust II, L.P., and TCW Leverage Income Trust IV, L.P. (Exhibit 2.8 to the Company's Current
              Report on Form 8-K, dated August 28, 2000, is herein incorporated by reference.)

      4.14    Stockholders Agreement dated August 14, 2000, by and between Synagro Technologies Inc., GTCR Fund VII,
              L.P., GTCR Co-Invest, L.P., GTCR Capital Partners, L.P., TCW/Crescent Mezzanine Partners II, L.P.,
              TCW/Crescent Mezzanine Trust II, TCW Leveraged Income Trust, L.P., TCW Leveraged Income Trust II, L.P.,
              and TCW Leveraged Income Trust IV, L.P. (Exhibit 2.9 to the Company's Current Report on Form 8-K, dated
              August 28, 2000, is herein incorporated by reference.)

      4.15    Form of TCW/Crescent Warrant (Exhibit 2.10 to the Company's Current Report on Form 8-K, dated August 28,
              2000, is herein incorporated by reference.)

      4.16    Form of GTCR Warrant (Exhibit 2.11 to the Company's Current Report on Form 8-K, dated August 28, 2000,
              is herein incorporated by reference.)

      10.1    Synagro Technologies, Inc. Subscription Agreement, dated as of March 31, 1998, among the Company,
              Environmental Opportunities Fund, L.P., Environment Opportunities Fund (Cayman), L.P. and other
              purchasers of the Company's Series B Preferred Stock as listed on Exhibit A thereto. (Exhibit 10.1 to
              the Company's Annual Report on Form 10-K for the year ended 1997, is incorporated herein by reference.)

      10.2    Form of Indemnification Agreement. (Appendix F to the Company's Proxy Statement on Schedule 14A for
              Annual Meeting of Stockholders, dated May 9, 1996, is incorporated herein by reference.)

      10.3    Amended and Restated 1993 Stock Option Plan dated August 5, 1996. (Exhibit 4.1 to the Company's
              Registration Statement on Form S-8 (No. 333-64999), dated September 30, 1998, is incorporated herein by
              reference.)

      10.4    Amended and Restated Credit Agreement dated January 27, 2000, by and among Synagro Technologies, Inc.,
              Bank of America, N.A., Canadian Imperial Bank of Commerce, and certain other lenders. (Exhibit 2.4 to
              the Company's Current Report on Form 8-K, dated August 28, 2000, is herein incorporated by reference.)

      10.5    Agreement and Plan of Merger dated October 20, 1999, by and among Synagro Technologies, Inc., RESTEC
              Acquisition Corp., New England Treatment Company Inc., Paul A. Toretta, Frances A. Guerrera, Frances A.
              Guerrera, as executrix of the Estate of Richard J. Guerrera, and Frances A. Guerrera and Robert Dionne,
              as Co-Trustee of the Richard J. Guerrera Revocable Trust under Agreement dated November 2, 1998, as
              amended by that certain Letter Amendment dated January 7, 2000, and that certain Second Amendment to
              Agreement and Plan of Merger dated January 26, 2000. (Exhibit 2.1, 2.3 and 2.4 to the Company's Current
              Report on Form 8-K, dated February 11, 2000, are herein incorporated by reference.)

      10.6    Purchase and Sale Agreement dated October 20, 1999, by and among Synagro Technologies, Inc., Paul A.
              Toretta, Eileen Toretta, as Trustee of the Paul A. Toretta 1998 Grant, Frances A. Guerrera, Frances A.
              Guerrera, as executrix of the Estate of Richard J. Guerrera, and Frances A. Guerrera and Robert Dionne,
              as Co-Trustees of the Richard J. Guerrera Revocable Trust under Agreement dated November 2, 1998, as
              amended by that certain Letter Amendment dated January 7, 2000, and that certain Second Amendment to
              Purchase and Sale Agreement and dated January 26, 2000. (Exhibit 2.2, 2.3 and 2.5 to the Company's
              Current Report on Form 8-K, dated February 11, 2000, are herein incorporated by reference.)

      10.7    Stock Purchase Agreement dated October 20, 1999, by and among Synagro Technologies, Inc., Christopher J.
              Schrader and Kathleen Schrader. (Exhibit 2.1 to the Company's Current Report on Form 8-K, dated February
              22, 2000, is herein incorporated by reference.)
</TABLE>



                                       23
<PAGE>   24

<TABLE>
<S>           <C>

      10.8    Asset Purchase Agreement dated October 26, 1999, by and between Synagro Technologies, Inc. and Whiteford
              Construction Co., Inc. (Exhibit 2.1 to the Company's Current Report on Form 8-K, dated April 10, 2000,
              is herein incorporated by reference.)

      10.9    Amendment No. 1 to the Asset Purchase Agreement dated March 24, 2000, by and between Synagro
              Technologies, Inc. and Whiteford Construction Co., Inc. (Exhibit 2.2 to the Company's Current Report on
              Form 8-K, dated April 10, 2000, is herein incorporated by reference.)

      10.10   Stock Purchase Agreement dated October 26, 1999, by and among Synagro Technologies, Inc., Gerald L.
              Rehbein and Gordon W. Rehbein. (Exhibit 2.3 to the Company's Current Report on Form 8-K, dated April 10,
              2000, is herein incorporated by reference.)

      10.11   Amendment No. 2 to the Stock Purchase Agreement dated March 27, 2000, by and among Synagro Technologies,
              Inc., Gerald L. Rehbein and Gordon W. Rehbein. (Exhibit 2.5 to the Company's Current Report on Form 8-K,
              dated April 10, 2000, is herein incorporated by reference.)

      10.12   Earnout Agreement dated March 27, 2000, by and among Synagro Technologies, Inc., Gerald L. Rehbein and
              Gordon W. Rehbein. (Exhibit 2.6 to the Company's Current Report on Form 8-K, dated April 10, 2000, is
              herein incorporated by reference.)

      10.13   Stock Purchase Agreement dated March 31, 2000, by and between Synagro Technologies, Inc. and Compost
              America Holding Company, Inc. (Exhibit 2.1 to the Company's Current Report on Form 8-K, dated June 30,
              2000, is incorporated herein by reference.)

      10.14   Earnout Agreement dated June 15, 2000, by and among Synagro Technologies, Inc. and Compost America
              Holding Company, Inc. (Exhibit 2.2 to the Company's Current Report on Form 8-K, dated June 30, 2000, is
              incorporated herein by reference.)

      10.15   Purchase Agreement dated January 27, 2000, by and between Synagro Technologies, Inc. and GTCR Fund VII,
              L.P. (Exhibit 2.1 to the Company's Current Report on Form 8-K, dated February 17, 2000, is herein
              incorporated by reference.)

      10.16   Professional Services Agreement, dated January 27, 2000, by and between Synagro Technologies, Inc. and
              GTCR Fund VII, L.P. (Exhibit 2.7 to the Company's Current Report on Form 8-K, dated February 17, 2000,
              is herein incorporated by reference.)

      10.17   Senior Subordinated Loan Agreement, dated January 27, 2000, by and among Synagro Technologies, Inc.,
              certain subsidiary guarantors and GTCR Capital Partners, L.P. (Exhibit 2.2 to the Company's Current
              Report on Form 8-K, dated February 17, 2000, is herein incorporated by reference.)

      10.18   Amended and Restated Monitoring Agreement dated August 14, 2000, by and between Synagro Technologies,
              Inc., GTCR Golder Rauner, L.L.C., and TCW/Crescent Mezzanine Partners II, L.P., TCW/Crescent Mezzanine
              Trust II, TCW Leveraged Income Trust, L.P., TCW Leveraged Income Trust II, L.P., and TCW Leveraged
              Income Trust IV, L.P. (Exhibit 2.12 to the Company's Current Report on Form 8-K, dated August 28, 2000,
              is herein incorporated by reference.)

      10.19   First Amendment to Senior Subordinated Loan Agreement dated March 6, 2000, by and among Synagro
              Technologies, Inc., Bank of America, N.A., Canadian Imperial Bank of Commerce, and various financial
              institutions.

      10.20   Employment Agreement dated February 19, 1999, by and between Synagro Technologies, Inc. and Ross M.
              Patten. (Exhibit 10.20 to the Company's Current Report on Form 10-K/A, dated April 30, 2001, is herein
              incorporated by reference.)
</TABLE>


                                       24
<PAGE>   25

<TABLE>
<S>           <C>
      10.21   Employment Agreement dated February 19, 1999, by and between Synagro Technologies, Inc. and Mark A.
              Rome. (Exhibit 10.21 to the Company's Current Report on Form 10-K/A, dated April 30, 2001, is herein
              incorporated by reference.)


      10.22   Employment Agreement dated February 19, 1999, by and between Synagro Technologies, Inc. and Alvin L.
              Thomas II. (Exhibit 10.22 to the Company's Current Report on Form 10-K/A, dated April 30, 2001, is
              herein incorporated by reference.)

      10.23   Employment Agreement dated May 10, 1999, by and between Synagro Technologies, Inc. and J. Paul Withrow.
              (Exhibit 2.11 to the Company's Current Report on Form 8-K, dated February 17, 2000, is herein
              incorporated by reference.)

      10.24   Employment Agreement dated August 11, 2000, by and between Synagro Technologies, Inc. and Mark A.
              Weidman. (Exhibit 10.24 to the Company's Current Report on Form 10-K/A, dated April 30, 2001, is herein
              incorporated by reference.)

      10.25   Amendment Concerning Employment Rights dated January 27, 2000, by and between Synagro Technologies, Inc.
              and Ross M. Patten. (Exhibit 2.8 to the Company's Current Report on Form 8-K, dated February 17, 2000,
              is herein incorporated by reference.)

      10.26   Amendment Concerning Employment Rights dated January 27, 2000, by and between Synagro Technologies, Inc.
              and Mark A. Rome. (Exhibit 2.9 to the Company's Current Report on Form 8-K, dated February 17, 2000, is
              herein incorporated by reference.)

      10.27   Amendment Concerning Employment Rights dated January 27, 2000, by and between Synagro Technologies, Inc.
              and Alvin L. Thomas, II. (Exhibit 2.10 to the Company's Current Report on Form 8-K, dated February 17,
              2000, is herein incorporated by reference.)

      10.28   Amendment Concerning Employment Rights dated January 27, 2000, by and between Synagro Technologies, Inc.
              and J. Paul Withrow. (Exhibit 2.12 to the Company's Current Report on Form 8-K, dated February 17, 2000,
              is herein incorporated by reference.)

      10.29   2000 Stock Option Plan dated October 31, 2000. (Exhibit A to the Company's Proxy Statement on Schedule
              14A for Annual Meeting of Stockholders, dated September 28, 2000, is herein incorporated by reference.)
</TABLE>

                                       25