SECURITIES AND EXCHANGE COMMISSION
WASHINGTON , D.C. 20549
AMENDMENT 1 TO
SCHEDULE 13D
Under the Securities Exchange Act of 1934
ECOS GROUP, INC.
F/K/A EVANS ENVIRONMENTAL CORPORATION
-------------------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $.012 PER SHARE
---------------------------------------
(Title of Class of Securities)
299149
------
(CUSIP NUMBER)
--------------
STRATEGICA CAPITAL CORPORATION
1221 Brickell Avenue, Suite 2600
Miami, Florida 33131
(305)536-1440
Attn: Mr. Jack D. Burstein
with a copy to:
Richard N. Bernstein, Esquire
Cohen, Berke, Bernstein, Brodie & Kondell, P.A.
2601 South Bayshore Drive, Suite 1900
Miami, Florida 33133
(305)854-5900
------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
April 4, 1995
------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
statement because of Rule 13d- 1(b)(3) or (4), check the following box: [ ]
Check the following box if a fee is being paid with this statement. [ ]
<PAGE>
SCHEDULE 13D
CUSIP NO. 299149 Page 2 of 7 Pages
- --------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
STRATEGICA CAPITAL CORPORATION
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds*
00
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(E) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
DELAWARE
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares 2,543,318
Beneficially 8. Shared Voting Power
Owned By
Each 9. Sole Dispositive Power
Reporting 2,543,318
Person With 10. Shared Dispositive Power
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Reporting Person
2,543,318
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain
Shares* [ ]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
12.7%
- --------------------------------------------------------------------------------
14. Type of Reporting Person*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
<PAGE>
ITEM 1. SECURITY AND COMPANY.
The class of equity securities to which this Statement relates is the
Common Stock, par value $.012 per share (the "Common Stock"), of ECOS Group,
Inc., f/k/a Evans Environmental Corporation, a Colorado corporation (the
"Company"). The principal executive offices of the Company are located at 1000
Southern Boulevard, Suite 200, West Palm Beach, Florida 33405.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This Amendment No. 1 to Schedule 13D constitutes a filing pursuant
to Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Act"),
by Strategica Capital Corporation, a Delaware corporation ("Strategica"),
successor by merger to Strategica Capital Corporation, a Florida corporation,
and Strategica Group, Inc., a Florida corporation.
The officers and directors of Strategica are as follows: Jack D.
Burstein (President and Chairman of the Board of Directors); David J. Berger
(Executive Vice President and Director); Steven R. Cook (Executive Vice
President and Secretary); Mel Harris (Director); Tom Ireland (Director); and
Robert Sanders (Director).
(b) The business address for Strategica is 1221 Brickell Avenue, Suite
2600, Miami, Florida 33131.
(c) Strategica is engaged in the business of providing financial
consulting and in the business of providing or arranging loans and/or capital to
businesses.
(d) Neither Strategica, nor any of its officers and directors during
the last five years has been convicted in any criminal proceeding (excluding
traffic violations or similar misdemeanors).
(e) Neither Strategica, nor any of its officers and directors, has,
during the last five years, been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
(f) Strategica is a Delaware corporation.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
This Schedule 13D relates to Strategica's acquisition of certain
warrants, more fully described in Item 6 herein, none of which have been
exercised. Strategica intends to use its working capital to fund the purchase of
shares in the event that it exercises any of the warrants in the future. In
addition, pursuant to an Advisory and Equity Matters Agreement, dated August,
1995, the Company may pay Strategica certain fees in the form of Common Stock.
To date the Company has paid $24,000 of fees in the form of 80,000 shares of
Common Stock although not all certificates representing such stock have not yet
been received by Strategica.
3
<PAGE>
ITEM 4. PURPOSE OF TRANSACTION.
The warrants to purchase shares of Preferred Stock of the Company and
Common Stock of the Company were acquired by Strategica for investment purposes.
Other than as discussed herein, Strategica has no plans or proposals
which relate to or which would result in any of the actions specified in clauses
(a) through (i) of Item 4 of the instructions to Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE COMPANY.
(a) According to the Company's Form 10-Q for the three (3) months ended
September 30, 1996, there were 17,585,126 shares of Common Stock of the Company
issued and outstanding as of such date. As of the date hereof, Strategica has
80,000 outstanding shares of Common Stock and rights to acquire 2,463,318 shares
of Common Stock pursuant to certain warrants (collectively, the "Warrants").
Such securities aggregate 12.7% of the Common Stock of the Company on a fully
diluted basis after Strategica's acquisition of such shares.
In addition to the above-described interest in the securities of the
Company, Strategica believes that it is entitled to additional securities of the
Company pursuant to a letter agreement, dated August 1995, signed by the
Company, which grants Strategica certain anti-dilution rights. The Company,
however, has not acknowledged the enforceability of the agreement. If it is
determined that the agreement is enforceable, Strategica will be entitled to
acquire equity ownership of the Company equal to at least 37.7% of the Company's
outstanding Common Stock, Preferred Stock and warrants. As a result, based on
the number of shares of the Company's Common Stock outstanding as of September
30, 1996, Strategica believes that it is currently entitled to purchase
10,641,400 shares of the Company's Common Stock, in addition to other shares of
Preferred Stock and warrants.
(b) Strategica has the sole power to vote or direct the vote, and the
power to dispose or direct the disposition, of the shares of Common Stock of the
Company owned by it. Upon exercise of the Warrants and issuance of the shares of
Common Stock underlying the Warrants, Strategica shall have the sole power to
vote or to direct the vote, and to dispose or direct the disposition, of the
shares of Common Stock underlying the Warrants. Strategica has the sole power to
dispose or direct the disposition of the Warrants.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
4
<PAGE>
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE COMPANY.
On April 4, 1995, the Company and Strategica entered into a series of
agreements restructuring, in part, their financial relationship which arose out
of an Advisory Agreement dated as of July 11, 1994. As part of the
restructuring, Strategica consented to the Company's sale to a third party of
additional shares of its Common Stock and shares of its Class A Convertible
Preferred Stock ("Preferred Stock"). As anti-dilution consideration to
Strategica, the Company issued to Strategica warrants to subscribe for 190,432
(761,731 prior to the December 27, 1995 reverse split) shares of the Company's
Preferred Stock. Each share of Preferred Stock is convertible into 12 shares of
the Company's Common Stock.
Strategica has certain registration rights relating to the Company's
Common Stock. On October 11, 1996, the Company filed a Registration Statement on
Form S-3 with the Securities and Exchange Commission which included 2,460,193
shares of the Company's Common Stock underlying Strategica's Warrants.
Strategica also acquired warrants to purchase 3,125 (12,500 shares
prior to the December 27, 1995 reverse split) shares of Common Stock exercisable
only to the extent certain stock options are exercised.
On April 4, 1995, Strategica the Company and Strategica also amended
the Advisory Agreement dated June 16, 1994 to provide that the warrants issuable
to Strategica upon successful completion of each acquisition which Strategica
sources or to which Strategica contributes, as requested by the Company, be
increased from 50,000 shares of Common Stock to 100,000 shares of Common Stock
(200,000 and 400,000 respectively prior to the December 27, 1995 reverse split).
Also on April 4, 1995 the Company and Strategica amended the warrants
issued on July 11, 1994 relating to the issue of 175,000 (700,000 prior to the
December 27, 1995 reverse split) of the Common Stock to provide, among other
things, that the expiration period of such warrants be extended to January 11,
1999 or as late as January 11, 2002 under the same conditions that the warrants
for the Preferred Stock would be extended.
During the next several months, the aforesaid sale of Common Stock and
Preferred Stock to a third party in connection with the restructuring was not
consummated, although the Company has advised Strategica that certain shares may
be sold in a subsequent transaction.
In August, 1995 Strategica advised the Company with respect to a
comprehensive restructuring of its debt and as a consideration an Advisory and
Equity Matters letter agreement with respect to issuance to Strategica of
additional warrants, adjustment of warrants currently outstanding and payment
for advisory services was delivered to Strategica. The agreement provides that:
(i) if the Company issues any new equity securities under $4.00 per shares
($1.00 prior to the December 27, 1995 reverse split), Strategica will be issued
additional warrants
5
<PAGE>
convertible into the same proportion of equity ownership as outstanding prior to
such new issuance; (ii) Strategica's portion of equity ownership shall include
all preferred stock, warrants and Common Stock (and in no event will be less
than 37.7%); (ii) the exercise price of warrants to purchase Common Stock shall
be adjusted to the current market price with resets to market price, if lower,
at the end of each of the Company's fiscal quarter; (iv) the exercise prior of
the warrants to purchase preferred stock shall be adjusted to the current market
price of the common stock times twelve, with resets to market price, if lower,
at the end of each of the Company's fiscal quarter; and (v) certain fees could
be paid in non-cash consideration (which the Company elected on certain
occasions). Various discussions have ensued regarding, among other things, the
enforceability of this agreement. Although Strategic asserts this agreement is
enforceable, the Company has not yet acknowledged its enforceability.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
(a) Warrant certificate dated April 4, 1995 to subscribe for
761,731 shares of Series A Preferred Stock.
(b) Warrant certificate dated April 4 1995 to subscribe for 12,500
shares of Common Stock.
(c) Amendments dated April 4, 1995 to July 11, 1994 Warrant
certificates.
(d) Advisory and Equity Matters Agreement, dated August, 1995.
(e) Recapitalization Funding Facility Agreement.
(f) Form of Participation Agreement by and between Participants
and Strategica dated July 11, 1994.
(g) Schedule of funds provided by Participants.
(h) Amendment to Advisory Agreement, dated April 4, 1995.
(i) Schedule 13D: Issuer - Evans Environmental Corporation;
Reporting Person - Strategica Group, Inc.; Filing Date -
September 1994.
6
<PAGE>
SIGNATURE PAGE
After reasonable inquiry and to the best of our knowledge and belief,
the undersigned certify that the information set forth in this statement is
true, complete and correct.
STRATEGICA CAPITAL CORPORATION, a
Delaware Corporation
Dated: JANUARY 22, 1997 By: /S/ STEVEN R. COOK
---------------- ------------------
Print Name: STEVEN R. COOK
Title: EXECUTIVE VICE PRESIDENT
7
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
7.(a) Warrant certificate dated April 4, 1995 to subscribe for
761,731 shares of Series A Preferred Stock.
7.(b) Warrant certificate dated April 4 1995 to subscribe for 12,500
shares of Common Stock.
7.(c) Amendments dated April 4, 1995 to July 11, 1994 Warrant
certificates.
7.(d) Advisory and Equity Matters Agreement, dated August, 1995.
7.(e) Recapitalization Funding Facility Agreement.
7.(f) Form of Participation Agreement by and between Participants
and Strategica dated July 11, 1994.
7.(g) Schedule of funds provided by Participants.
7.(h) Amendment to Advisory Agreement, dated April 4, 1995.
7.(i) Schedule 13D: Issuer - Evans Environmental Corporation;
Reporting Person - Strategica Group, Inc.; Filing Date -
September 1994.
EXHIBIT 7(a)
- -------------------------------------------------------------------------------
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURTIES AS OF 1933, AS AMENDED ("SECURITIES ACT") OR
APPLICABLE STATE SECIJRITES LAWS ("STATE ACTS"). THIS WARRANT AND ANY SECURITIES
ISSUED UPON EXERCISE OF THIS WARRANT MAY NOT BE OFFERED FOR SALE, SOLD,
TRAAFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE
SECURITIES ACT AND APPLICABLE STATE ACTS UNLESS THE CORPORATION HAS RECEIVED AN
OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED.
- -------------------------------------------------------------------------------
EVANS ENVIRONMENTAL CORPORATION
WARRANT CERTIFICATE
Warrants to Subscriber April 4, 1995
for 761,731 shares of
Series A Preferred Stock
THIS CERTIFIES that, for value received, STRATEGICA CAPITAL CORPORATION, a
Delaware corporation, or its registered assigns (the Holder), is the registered
owner of 761,731 warrants (the "Warrants") of EVANS ENVIRONMENTAL CORPORATION, a
Colorado corporation (hereinafter referred to as the Corporation or the
"Company"). Each of the Warrants entities the Holder to purchase one duly
authorized, validly issued, fully paid and nonassessable share of nonvoting
Series A Convertible Preferred Stock, $.001 par value per share, of the
Corporation (the "Series A Preferred Stock"). Each share of Series A Preferred
Stock relating to a Warrant and/or each share of Series A Preferred Stock
underlying a Warrant may sometimes hereinafter be referred to as a "Warrant
Share."
SECTION 1. EXERCISE OF WARRANT. This Warrant may be exercised at any time
from the date hereof until and including January 11, 1999, 5:00 p.m., Miami,
Florida time (the "Expiration Date"). If the average of the closing bid and
asked prices of the Company's Common Stock for the ten (10) trading days (in
which the Company's Common Stock is traded) immediately prior to January 11,
1999, is less than $2.00 per share on the original Expiration Date, then the
Expiration Date shall be extended for one additional year to January 11, 2000
(the "First Extended Expiration Date). If such average immediately prior to
January 11, 2000, is less than $2.00 per share on the First Extended Expiration
Date, then the Expiration Date shall be extended for one additional year to
January 11, 2001 (the "Second Extended Expiration Date"). If such average
immediately prior to January 11, 2001, is less than $2.00 per share on
<PAGE>
the Second Extended Expiration Date, then the Expiration Date shall be extended
for one additional year to January 11, 2002. Subject to adjustment pursuant to
Section 4 below, the exercise price per share of the shares of Series A
Preferred Stock purchasable pursuant to this Warrant shall be equal to the
product of the "Market Price, as hereinafter defined, of the Company's common
stock, $.003 par value per share (the Common Stock") and the number of shares of
Common Stock into which a share of the Series A Preferred Stock is then
convertible up to a maximum of $0.675 per share (such price, as adjusted from
time to time, being hereinafter referred to as the "Exercise Price"). For
purposes of the preceding sentence, "Market Price shall be defined as the
average of the closing bid prices of the Company's Common Stock for the ten (10)
trading days, in which the Company's Common Stock is traded, immediately prior
to date of exercise.
If the closing bid price per share of the Company's Common Stock for ten
(10) consecutive trading days, in which the Company's Common Stock is traded
(the "Mandatory Market Price), equals or exceeds $1.50 per share at any times
during the first four years from, the date hereof, the Holder shall, at the
option of the Company, exercise up to 10% of the original number of Warrants
during each of the first and second years from the date hereof and up to 25% of
the original number of Warrants during each of the third and fourth year from
the date hereof. If the Holder is not required to exercise the maximum number of
Warrants for any given year, then the unexercised number shall be added to the
maximum number for the succeeding year of the term of the Warrants. The Holder,
at its option in each instance of required exercise, may exercise one-half or
more of the number of Warrants specified in the Companys notice to the Holder
for cash and surrender the balance of such number of Warrants to the Company in
exchange for the number of Warrant Shares equal to (x) the number of Warrant
Shares as to which the Warrants are being surrendered multiplied by (y) a
fraction, the numerator of which is the Mandatory Market Price less the Exercise
Price of the Warrant Shares and the denominator of which is the Mandatory Market
Price of the Warrant Shares. The Company shall give the Holder written notice of
the Company's exercise of each option to require mandatory exercise of
outstanding Warrants within five (5) business days after the occurrence of
events triggering the Company's right to exercise such option. If the Company
does not timely give the Holder such notice and the Mandatory Market Price falls
below $1.50 per share, then the Company's right to exercise each such option
shall lapse for the time being and shall reoccur each time the Mandatory Market
Price again equals or exceeds $1.50 per share until the Company exercises each
such option.
The rights represented by this Warrant shall be exercised by the holder
hereof, in whole or in part, but not as to a fractional share of Series A
Preferred Stock, by the surrender of this Warrant (properly endorsed) at the
office of the Corporation or its transfer agent, and by payment to the
Corporation of the Exercise Price in cash or by wire transfer, for each share
being purchased. Upon the exercise of this Warrant, a certificate or
certificates for the shares of Series A Preferred Stock so purchased, registered
in the name of the holder, shall be promptly delivered to the holder hereof
within a reasonable time. The person in whose name any certificate for shares of
Series A Preferred Stock is issued upon exercise of this Warrant
-2-
<PAGE>
shall for all purposes be deemed to have become the holder of record of such
shares on the date on which the Warrant was surrendered and payment of the
Exercise Price and any applicable taxes was made, except that, if the date of
such surrender and payment is a date on which the stock transfer books of the
Corporation are closed, such person shall be deemed to have become the holder of
such shares at the close of business on the next succeeding date on which the
stock transfer books are open.
SECTION 2. TRANSFER. DIVISION AND COMBINATION.
(a) Neither the Warrants or the Warrant Shares may be sold, assigned or
otherwise transferred prior to July 11, 1995 to any person other than an
officer, managing director or affiliate of Holder. Transfer of this Warrant and
all rights hereunder, in whole or in part, is registrable on the books of the
Corporation to be maintained for such purpose, upon surrender of this Warrant at
the principal office of the Corporation, together with the Assignment Form
annexed hereto duly executed by the Holder or his agent or attorney and funds
sufficient to pay any stock transfer taxes payable upon the making of such
transfer. Upon such surrender and payment the Corporation shall execute and
deliver a new Warrant or Warrants in the name of the assignee or assignees and
in the denomination specified in such instrument of assignment, and this Warrant
shall promptly be canceled. A Warrant may be exercised by a new Holder for the
purchase of shares of Series A Preferred Stock without having a new Warrant
issued.
(b) This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office or agency of the Corporation,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued, signed by Holder or his agent or attorney.
Subject to compliance with subparagraph (a) above, as to any transfer which may
be involved in such division or combination, the Corporation shall execute and
deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be
divided or combined in accordance with such notice.
(c) The Corporation shall prepare, issue and deliver at its own expense
(other than stock transfer taxes) the new Warrant or Warrants under this Section
2.
(d) The Corporation agrees to maintain, at its aforesaid office or
agency, books for the registration and the registration of transfer of the
Warrants.
(e) In the case of all dividends or other distributions of the
Corporation to the holders of its Common Stock or any series of preferred stock
with respect to which there is a taking of a record of such holders, the
Corporation will in each such case take such a record and will take such record
as of the close of business on a business day. The Corporation will not at any
time, except upon dissolution, liquidation or winding up of the Corporation,
close its stock transfer books or warrant transfer books so as to result in
preventing or delaying the exercise or transfer of any warrant.
-3-
<PAGE>
SECTION 3. ADJUSTMENT OF NUMBER OF SHARES SUBJECT TO WARRANT. Upon any
adjustment of the Exercise Price pursuant to Sections 4(a) or 4(b) hereof, the
holder of this Warrant shall thereafter be entitled to purchase, at the adjusted
Exercise Price, the number of shares (calculated to the nearest tenth of a
share) obtained by multiplying the Exercise Price in effect immediately prior to
such adjustment by the number of shares purchasable pursuant hereto immediately
prior to such adjustment and dividing the product thereof by the Exercise Price
resulting from such adjustment.
SECTION 4. ADJUSTMENT OF EXERCISE PRICE.
(a) If the Corporation shall hereafter split, subdivide or combine its
Common Stock, then the Exercise Price shall be proportionately adjusted so that
the holder of this Warrant shall receive the equivalent number of shares, at the
equivalent cost per share, as if this Warrant was exercised and the Series A
Preferred Stock converted on the date immediately preceding such split,
subdivision or combination of the Corporations Common Stock.
(b) If the Corporation shall pay a dividend with respect to the Common
Stock or make any other distribution with respect to the Common Stock payable in
shares of Common Stock, then the Exercise Price shall be adjusted, from and
after the date of determination of the shareholders entitled to receive such
dividend or distribution, to that price determined by multiplying the Exercise
Price in effect immediately prior to such date of determination by a fraction
(i) the numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution, and (ii) the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution.
(c) Upon any such adjustment of the Exercise Price pursuant to this
Section, then and in each such case the Corporation shall give written notice
thereof to Holder stating the Exercise Price resulting from such adjustment and
the number of shares of Series A Preferred Stock thereafter purchasable under
this Warrant and setting forth in reasonable detail the method of calculation
and the facts upon which such calculation is based.
SECTION 5. RECLASSIFICATION. MERGER. ETC. In the case of any
reclassification of the Common Stock or in the case of any consolidation or
merger of the Corporation with or into another corporation (other than a merger
with another corporation in which the Corporation is the surviving corporation
and which does not result in any reclassification of the Common Stock) or in the
case of any sale of all or substantially all of the assets of the Corporation,
then the Corporation, or such successor or purchasing corporation, as the case
may be, shall execute a new certificate, providing that the holder of this
Warrant shall have the right to exercise such new Warrant and upon such exercise
to receive, in lieu of each share of Common Stock theretofore issuable upon
conversion of the Series A Preferred Stock issuable upon exercise of this
Warrant, the number and kind of shares of stock, other securities, money or
property receivable upon such reclassification, consolidation, merger or sale of
assets by a holder of
-4-
<PAGE>
shares of the Common Stock with respect to one share of Common Stock. Such new
Warrant certificate shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for herein. The
provisions of this Section shall similarly apply to successive
reclassifications, consolidations, mergers or sales of assets.
SECTION 6. STOCK TO BE RESERVED. The Corporation will at all times reserve
and keep available out of its authorized Series A Preferred Stock or its
treasury shares thereof, solely for the purpose of issue upon the exercise of
this Warrant as herein provided, such number of shares of Series A Preferred
Stock as shall then be issuable upon the exercise of this Warrant. The
Corporation will at all times also reserve and keep available out of its
authorized Common Stock or its treasury shares thereof, solely for the purpose
of issue upon the conversion of the Series A Preferred Stock as shall then be
issuable upon the exercise of this Warrant as herein provided, such number of
shares of Common Stock as shall then be issuable upon the conversion of the
Series A Preferred Stock issuable upon the exercise of this Warrant. The
Corporation covenants that all shares of Series A Preferred Stock and Common
Stock which shall be so issued shall be duly and validly issued and fully paid
and nonassessable and free from all taxes, liens and charges with respect to the
issue thereof. The Corporation will take all such action as may be necessary to
assure that all such shares of Series A Preferred Stock or Common Stock may be
so issued without violation of any applicable law or regulation, or of any
requirements of any national securities exchange upon which the Common Stock of
the Corporation may be listed. The Corporation has not granted and will not
grant any right of first refusal with respect to shares issuable upon exercise
of this Warrant, and there are no preemptive rights associated with such shares.
SECTION 7. NO STOCKHOLDER RIGHTS OR LIABILITIES. This Warrant shall not
entitle the holder hereof to any voting rights or other rights as a stockholder
of the Corporation. No provision hereof, in the absence of affirmative action by
the holder hereof to purchase shares of Series A Preferred Stock, and no mere
enumeration herein of the rights or privileges of the holder hereof, shall give
rise to any liability of such holder for the Exercise Price or as a shareholder
of the Corporation, whether such liability is asserted by the Corporation or by
creditors of the Corporation.
SECTION 8. FRACTIONAL SHARES. No fractional shares shall be issued upon
the exercise of this Warrant, but the Company shall pay the holder an amount
equal to the fair market value of such fractional share of Series A Preferred
Stock in lieu of each fraction of a share otherwise called for upon any exercise
of this Warrant. For purposes of this Warrant, the fair market value of a share
of Series A Preferred Stock shall be determined with reference to the underlying
shares of Common Stock into which it is convertible as follows:
(a) If the Common Stock is listed on a National Securities Exchange or
admitted to unlisted trading privileges on such exchange or listed for trading
on the Nasdaq system, the current market value shall be the last reported sale
price of the Common Stock on such exchange or system on the last business day
prior to the date of exercise of this Warrant
-5-
<PAGE>
or on such day the average of the closing bid and asked prices for such day on
such exchange or system, as applicable; or
(b) If the Common Stock is not so listed or admitted to unlisted
trading privileges, the current market value shall be the mean of the last
reported bid and ask prices reported by the National Quotation Bureau, Inc. on
the last business day prior to the date of the exercise of this Warrant; or
(c) If the Common Stock is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so reported, the current
market value shall be an amount, not less than book value thereof as at the end
of the most recent fiscal year of the Company ending prior to the date of the
exercise of the Warrant, determined in such reasonable manner as may be
prescribed by the Board of Directors of the Company.
SECTION 9. REGISTRATION RIGHTS. Neither the Warrant, the Warrant Shares or
the shares of Common Stock into which the Warrant Shares are convertible (the
Warrant Common Shares") have been registered under the Securities Act of 1933,
as amended (the "Securities Act").
9.1 Whenever the Company proposes to file under the Securities Act a
Registration Statement relating to any of its Common Stock, whether on its own
behalf or on behalf of any holders of Common Stock of the Company, the Company
shall, at least thirty (30) days prior to such filing, give written notice of
such proposed filing to Holder. Upon receipt by the Company not more than thirty
(30) days after such notice of a written request from Holder for registration of
Warrant Common Shares issuable upon the conversion of the Series A Preferred
Stock issuable upon exercise of the Warrants by Holder or held by Holder, the
Company shall (A) include in such registration statement or in a separate
registration statement concurrently filed, and shall use its best efforts to
cause such registration statement to become effective with respect to, the
Warrant Common Shares as to which Holder requests registration and (B) if such
proposed registration is in connection with an underwritten offering of Common
Stock for the benefit of the Company, upon request of Holder, use its best
efforts to cause the managing underwriter therefor to include in such offering
the Warrant Common Shares as to which Holder requests such inclusion, on terms
and conditions comparable to those of the securities offered on behalf of the
Company. Holder shall cooperate with the Company in the preparation of such
Registration Statement, to the extent required to furnish information concerning
the Holder therein. Notwithstanding the foregoing, this Section 9.1 shall not be
applicable to registration statements of the Company filed pursuant to Form S-8
or Form S-4.
9.2 Whenever one or more registered holders of a majority of the
Warrants or Warrant Common Shares issued as of the date hereof pursuant to a
certain Advisory Agreement effective as of July 11, 1994 between Strategica
Group, Inc., a Florida corporation and predecessor by merger to the Holder, or
its designees and the Company shall make a written request to the Company to
register under the Securities Act Warrant Common Shares either
-6-
<PAGE>
issuable upon the conversion of Series A Preferred Stock issuable upon exercise
of the Warrants or held by such holders, the Company shall within ten (10) days
after such request is received promptly give written notice to the Holder
stating the estimated approximate date of filing such registration statement,
and shall thereupon promptly use its best efforts to file a registration
statement (and thereafter use its best efforts to cause such registration) with
respect to all Warrant Common Shares issuable upon conversion of Series A
Preferred Stock issuable upon exercise of the Warrants by Holder or held by
Holder as soon as reasonably practical after the date of receipt of such notice
by the Company. The Company shall not be required at its expense to effect more
than one registration statement pursuant to this Section 9.2. Notwithstanding
anything to the contrary contained herein, in the event that Holder exercises
its registration rights under this Section 9.2 on or prior to the date that is
three (3) months prior to the Expiration Date or any Extended Expiration Date
and the registration of the subject Warrant Common Shares issuable upon
conversion of Series A Preferred Stock issuable upon exercise of the Warrants or
held by such holders shall not have been declared effective by the Securities
and Exchange Commission (the SEC) pursuant to the Securities Act on or prior to
the date that is five (5) business days prior to such Expiration Date or
Extended Expiration Date, then the Expiration Date or Extended Expiration Date
shall be extended to the date that is five (5) business days following such
effective date.
9.3 If the Corporation is required by the provisions of this Section 9
to use its best efforts to effect the registration of any of its securities
under the Securities Act, the Corporation will, as expeditiously as is possible:
(a) Prepare and file with the SEC a registration statement with
respect to such securities and use its best efforts to cause such registration
statement to become and remain effective.
(b) Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective and to comply
with the provisions of the Securities Act with respect to the sale or other
disposition of all securities covered by such registration statement whenever
the Holder of such securities shall desire to transfer the same.
(c) Furnish to the Holder such number of copies of a summary
prospectus or other prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other
documents, as the Holder may reasonably request in order to facilitate the
transfer of the securities owned by such Holder.
(d) Use its best efforts to register or qualify the securities
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions within the United States as Holder shall request
(provided that the Company shall not be required to pay registration or
qualification expense for more than ten (10) states to be
-7-
<PAGE>
designated by Holder) and do such other reasonable acts and things as may be the
transfer in such jurisdictions of the securities owned by Holder.
(e) Furnish, at the request of the Holder requesting registration
of Warrant Common Shares, on the date that such Warrant Common Shares are
delivered to the underwriters for sale pursuant to such registration or, if such
Warrant Common Shares are not being sold through underwriters, on the date that
the registration statement with respect to such shares becoming effective, (1)
an opinion, dated such date, of the outside counsel representing the Corporation
for the purposes of such registration, addressed to the underwriters, if any,
and if such Warrant Common Shares are not being sold through underwriters, then
to the holders making such request, stating that such registration statement has
become effective under the Securities Act and that (i) to the best knowledge of
such counsel, no stop order suspending the effectiveness thereof has been issued
and no proceedings for that purpose have been instituted or are pending or
contemplated under the Securities Act, (ii) the registration statement, the
related prospectus, and each amendment or supplement thereto, comply as to form
in all material respects with the requirements of the Securities Act and the
applicable rules and regulations of the SEC thereunder (except that such counsel
need express no opinion as to financial statements contained therein), (iii)
such counsel has no reason to believe that either the registration statement or
the prospectus, or any amendment or supplement thereto, contains any untrue
statement of a material fact required to be stated therein or necessary to make
the statements therein not misleading, (iv) the descriptions in the registration
statement or the prospectus, or any amendment or supplement thereto, of all
legal matters and contracts and other legal documents or instruments are
accurate and fairly present the information required to be shown, and (v) such
counsel does not know of any legal or governmental proceedings, pending or
contemplated, required to be described in the registration statement or
prospectus, or any amendment or supplement thereto, which are not described as
required, nor of any contracts or documents or instruments of a character
required to be described in the registration statement or prospectus, or any
amendment or supplement thereto, or to be filed as exhibits to the registration
statement which are not described and filed or incorporated by reference as
required; and (2) a letter dated such date, from the independent certified
public accountants of the Corporation, addressed to the underwriters, if any,
and if such Warrant Common Shares are not being sold through underwriters, then
to the Holders making such request, stating that they are independent certified
public accountants within the meaning of the Securities Act and that, in the
opinion of such accountants, the financial statements and other financial data
of the Corporation included in the registration statement or the prospectus, or
any amendment or supplement thereto, comply as to form in all material respects
with the applicable accounting requirements of the Securities Act. Such opinion
of counsel shall additionally cover such other legal matters with respect to the
registration in respect of which such opinion is being given as the Holders may
reasonably request. Such letter from the independent certified public
accountants shall additionally cover such other, financial matters (including
information as to the period ending not more than five (5) business days prior
to the date of such letter) with respect to the registration in respect of which
such letter is being given as the Holders may reasonably request.
-8-
<PAGE>
(f) Otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC.
9.4 The Holder of the securities being so registered agrees to pay all
of the underwriting discounts and commissions with respect to the securities
owned by them being registered. The Company will pay all other costs and
expenses in connection with a registration statement to be filed pursuant to
Section 9 hereof including, without limitation, registration fees, the
reasonable fees and expenses of counsel for the Company and Holder, the fees and
expenses of its accountants and all other costs and expenses incident to the
preparation, printing and filing under the Securities Act of any such
registration statement, each prospectus and all amendments and supplements
thereto, the costs incurred in connection with the qualification of such
securities for sale in not more than ten (10) states as Holder has designated,
including fees and disbursements of counsel for the Company, and the costs of
supplying a reasonable number of copies of the registration statement, each
preliminary prospectus, final prospectus and any supplements or amendments
thereto to the Holder.
9.5 The Company agrees to enter into an appropriate cross-indemnity
agreement with any underwriter (as defined in the Securities Act) for the Holder
in connection with the filing of a registration statement pursuant to Section
9.1 hereof.
9.6 If the Company shall file any registration statement including
therein all or any part of the Warrant Common Shares either issuable upon
conversion of Series A Preferred Stock issuable upon exercise of the Warrants by
Holder or held by Holder, the Company and the Holder shall enter into an
appropriate cross-indemnity agreement whereby the Company shall indemnify and
hold harmless the Holder against any losses, claims, damages or liabilities (or
actions in respect thereto arising out of or based upon any untrue statement or
alleged untrue statement of any material fact contained in such registration
statement, or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make statements therein not
misleading unless such statement or omission was made in reliance upon and in
conformity with written information furnished or required to be furnished by the
Holder, and the Holder shall (to the extent of and limited to the amount of net
proceeds received by the Holder from the sale of Warrant Common Shares)
indemnify and hold harmless the Company, each of its directors and officers who
have signed the registration statement and each person, if any, who controls the
Company, within the meaning of the Securities Act against any losses, claims,
damages or liabilities (or actions in respect thereof) arising out of or based
upon any untrue statement or alleged untrue statement of any material fact
contained in such registration statement, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
statements therein not misleading, if the statement or omission was made in
reliance upon and in conformity with written information furnished or required
to be furnished by the Holder expressly for use in such registration statement.
-9-
<PAGE>
9.7 Nothing herein shall be construed to require any of the holders who
may desire to include any securities in any registration statement referred to
in Section 9.1 hereof to exercise their Warrants prior to the effective date of
registration statement and such holders, at their option, to the extent
permissible by law, may exercise the Warrants against payment of the proceeds of
the sale of such securities pursuant to a registration statement.
9.8 Until the shares shall be sold or capable of sale without
registration under the Securities Act, the Company at its expense will file such
post-effective amendments as may be necessary to make available for use a
prospectus meeting the requirements of the Securities Act, including, without
limitation, Section 10(a)(3). The Company will cause copies of such prospectus
to be delivered to any person exercising the warrant or selling the shares as
may be required by the Securities Act and the rules and regulations of the SEC.
SECTION 10. INVESTMENT REPRESENTATION AND LEGEND. Each holder, by
acceptance of this Warrant, represents and warrants to the Corporation that the
Holder is acquiring the Warrant and the securities issuable upon exercise
hereof, unless at the time of exercise a registration statement under the
Securities Act is effective with respect to such securities, for investment
purposes only and not with a view towards the resale or other distribution
thereof.
The Holder, by acceptance of this Warrant, agrees that the Corporation may
affix, unless the shares subject to this Warrant are registered at the time of
exercise, the following legend to certificates for securities issued upon
exercise of this Warrant:
The securities represented by this certificate have been issued in
reliance upon the representation of the holder that they have been
acquired for investment and not with a view toward the resale or
other distribution thereof, and have not been registered under the
Securities Act of 1933 (the "Securities Act) or applicable state
securities laws ("State Acts") and may not be offered, sold,
transferred, encumbered or otherwise disposed of unless there is an
effective registration statement under the Securities Act and the
applicable State Acts or unless in the opinion of counsel acceptable
to the Corporation, such registration is not required.
SECTION 11. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this
Warrant is lost, stolen, mutilated or destroyed, the Corporation may, on such
terms as to indemnity or otherwise as it may in its discretion reasonably impose
(which shall, in the case of a mutilated Warrant, include the surrender
thereof), issue a new Warrant of like denomination and tenor as the Warrant so
lost, stolen, mutilated or destroyed. Any such new Warrant shall constitute an
original contractual obligation of the Corporation, whether or not the allegedly
lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable by
anyone.
-10-
<PAGE>
SECTION 12. PAYMENT OF TAXES. The Company will pay all taxes, if any,
attributable to the transfer and/or issuance of the Warrants, the Warrant Shares
and the Warrant Common Shares.
SECTION 13. NOTICES. All notices, requests, demands and other
communications relating to this Warrant Certificate shall be in writing,
addressed, if to the registered owner hereof, to it at the address furnished by
the registered owner to the Company, and, if to the Company, to it at Fourth
Floor, 99 S.E. Fifth Street, Miami, Florida 33131, or to such other address as
any party shall notify the other party in writing, and shall be effective, in
the case of written notice by first class certified mail, postage prepaid, three
(3) days after placement into the mails, in the case of written notice by
express mail or other overnight courier, the day after placement with that
service, And, in the case of notice by confirmed telex, facsimile transmission,
telegram or cable, on the same day as sent.
SECTION 14. BINDING EFFECT. This Warrant Certificate shall be binding
upon and inure, to the sole and exclusive benefit of the Company, its successors
and assigns and the registered holder or holders from time to time of the
Warrants, the Warrant Shares and the Warrant Common Shares.
SECTION 15. SUPPLYING INFORMATION. The Corporation shall cooperate
with the Holder in supplying such information as may be necessary for the Holder
to complete and file any information reporting forms presently or hereafter
required by the SEC as a condition to the availability of an exemption from the
Securities Act for the sale of any Warrant, Warrant Shares or Warrant Common
Shares.
SECTION 16. FILINGS. The Corporation will deliver to Holder promptly
upon their becoming available one copy of each report, notice or proxy statement
sent by the Corporation to its stockholders generally, and of each regular or
periodic report (pursuant to the Securities Exchange Act of 1934, as amended)
and any registration statement, prospectus or written communication (other than
transmittal letters) (pursuant to the Securities Act), filed by the Corporation
with (i) the SEC or (ii) any securities exchange on which shares of Common Stock
are listed.
SECTION 17. SUCCESSORS AND ASSIGNS. This Warrant and the rights
evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Corporation and Holder. The provisions of this Warrant are
intended to be for the benefit of all Holders from time to time of this Warrant,
and shall be enforceable by any such Holder.
SECTION 18. AMENDMENT. This Warrant may not be modified or amended
except by written agreement of the parties.
SECTION 19. HEADING. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
-11-
<PAGE>
SECTION 20. GOVERNING LAW. THIS WARRANT CERTIFICATE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF FLORIDA, WITHOUT
REFERENCE TO THE CONFLICTS OF LAWS PRINCIPLES OF THE STATE OF FLORIDA.
-12-
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Warrant on and as of
the day and year first above written.
EVANS ENVIRONMENTAL CORPORATION
a Colorado corporation
By: /s/ SCOTT E. SALPETER
---------------------------------
Scott E. Salpeter, Vice President
[EXECUTION PAGE TO WARRANT CERTIFICATE]
-13-
<PAGE>
WARRANT EXERCISE FORM
The undersigned hereby irrevocably elects to exercise the within Warrant to the
extent of purchasing _____ shares of Series A Convertible Preferred Stock of
Evans Environmental Corporation, a Colorado corporation, and hereby makes
payment of $___________ in payment therefor.
____________________________
Signature
____________________________
Signature, if jointly held
_____________________________
Date
INSTRUCTIONS FOR ISSUANCE OF STOCK
----------------------------------
(if other than to the registered holder of the within Warrant)
Name_________________________________________________________________________
(Please typewrite or print in block letters)
Address_______________________________________________________________________
______________________________________________________________________________
Social Security or Taxpayer Identification Number_____________________________
And if said number of shares shall not be all the shares exchangeable or
purchasable under the within Warrant, a new Warrant is to be issued in the name
of the undersigned for the balance remaining of the shares purchasable
thereunder.
<PAGE>
ASSIGNMENT FORM
---------------
FOR VALUE RECEIVED, ____________________________ hereby sells, assigns
and transfers unto ______________________________________________, the right to
purchase Series A Preferred Stock of Evans Environmental Corporation, a Colorado
corporation, represented by this Warrant to the extent of shares as to which
such right is exercisable and does hereby irrevocably constitute and
appoint________________________________________ Attorney, to transfer the same
on the books of the Company with full power of substitution in the premises.
Dated:_______________, 199____
_______________________________
Signature
_______________________________
Signature, if jointly held
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURTIES AS OF 1933, AS AMENDED ("SECURITIES ACT") OR
APPLICABLE STATE SECIJRITES LAWS ("STATE ACTS"). THIS WARRANT AND ANY SECURITIES
ISSUED UPON EXERCISE OF THIS WARRANT MAY NOT BE OFFERED FOR SALE, SOLD,
TRAAFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE
SECURITIES ACT AND APPLICABLE STATE ACTS UNLESS THE CORPORATION HAS RECEIVED AN
OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED.
EVANS ENVIRONMENTAL CORPORATION
WARRANT CERTIFICATE
Warrants to Subscriber April 4, 1995
for 12,500 shares of
Common Stock
THIS CERTIFIES that, for value received, Strategica Capital Corporation, a
Delaware corporation, or its registered assigns (the "Holder"), is the
registered owner of 12,500 warrants (the "Warrants") of EVANS ENVIRONMENTAL
CORPORATION, a Colorado corporation (hereinafter refereed to as the
"Corporation" or the "Company"). Each of the Warrants entitles the Holder to
purchase, after the satisfaction of the condition precedent to each such
purchase, one duly authorized, validly issued, fully paid and nonassessable
share of voting common stock, $.003 par value per share, of the Corporation (the
"Common Stock"). Each share of Common Stock relating to a Warrant and/or each
share of Common Stock underlying a Warrant may sometimes hereinafter be referred
to as a "Warrant Share."
Section 1. Exercise of Warrant. These Warrants may be exercised at any time
from the date hereof, to the extent that the condition precedent specified in
the next paragraph of this section is satisfied, until and including January 11,
1999, 5:00 p.m., Miami, Florida time (the "Expiration Date"). If the average of
the closing bid and asked prices of the Company's Common Stock for the ten (10)
trading days (in which the Company's Common Stock is traded) immediately prior
to January 11, 1999, is less than $2.00 per share on the original Expiration
Date, then the Expiration Date shall be extended for one additional year to
January 11, 2000 (the "First Extended Expiration Date"). If such average
immediately prior to January 11, 2000, is less than $2.00 per share on the First
Extended Expiration Date, then the Expiration Date shall be extended for one
additional year to January 11, 2001 (the "Second Extended Expiration
<PAGE>
Date"). If such average immediately prior to January 11, 2001, is less than
$2.00 per share on the Second Extended Expiration Date, then the Expiration Date
shall be extended for one additional year to January 11, 2002. Subject to
adjustment pursuant to Section 4 below, the exercise price per share of the
shares of Common Stock purchasable pursuant to this Warrant shall be equal to
the "Market Price," as hereinafter defined, of the Company's Common Stock (such
price, as adjusted from time to time, being hereinafter referred to as the
"Exercise Price"). For purposes of the preceding sentence, "Market Price shall
be defined as the average of the closing bid prices of the Company's Common
Stock for the ten (10) trading days, in which the Company's Common Stock is
traded, immediately prior to date of exercise.
These Warrant are exercisable only to the extent that shares of Common
Stock have been issued by the Company as a result of the exercise of stock
options pursuant to any of the following agreements and then only at a rate of
0.25 shares of Common Stock for every share of Common Stock so issued:
(a) Option Agreement dated March 1, 1993, between the Company and Jorge
Diaz with respect to 10,000 shares of the Company's Common Stock.
(b) Option Agreement dated December 1, 1993, between the Company and
Stephen Kravitz with respect to 10,000 shares of the Company's
Common Stock.
(c) Option Agreement dated December 1, 1993, between the Company and
William L. Young with respect to 30,000 shares of the Company's
Common Stock.
The options granted pursuant to the foregoing agreements all expire on or before
April 28, 1997. Therefore, if none of the options are exercised, these Warrants
expire on April 28, 1997; otherwise such number of these Warrants are
exercisable for the periods described in the first paragraph of this section as
are equal to the number of shares of Common Stock for which the condition
precedent in this paragraph has been fulfilled. The Company shall give the
Holder written notice of the exercise of options pursuant to any of the
foregoing agreements within five (5) business days after the occurrence of such
exercise. Such notice shall specify the number of shares of Common Stock that
were issued upon such exercise and the number of these Warrants that have become
exercisable as a result of such exercise.
If the closing bid price per share of the Company's Common Stock for ten
(10) consecutive trading days, in which the Company's Common Stock is traded
(the "Mandatory Market Price"), equals or exceeds $1.50 per share at any times
during the first four years from the date hereof, the Holder shall, at the
option of the Company, exercise up to 10% of the original number of Warrants
during each of the first and second years from the date hereof and up to 25% of
the original number of Warrants during each of the third and fourth year from
the date hereof. If the Holder is not required to exercise the maximum number of
Warrants for any given year, then the unexercised number shall be added to the
maximum number for the succeeding year of the term of the Warrants. The Holder,
at its option in each instance of
-2-
<PAGE>
required exercise, may exercise one-half or more of the number of Warrants
specified in the Company's notice to the Holder for cash and surrender the
balance of such number of Warrants to the Company in exchange for the number of
Warrant Shares equal to (x) the number of Warrant Shares as to which the
Warrants are being surrendered multiplied by (y) a fraction, the numerator of
which is the Mandatory Market Price less the Exercise Price of the Warrant
Shares and the denominator of which is the Mandatory Market Price of the Warrant
Shares. The Company shall give the Holder written notice of the Company's
exercise of each option to require mandatory exercise of outstanding Warrants
within five (5) business days after the occurrence of events triggering the
Company's right to exercise such option. If the Company does not timely give the
Holder such notice and the Mandatory Market Price falls below $1.50 per share,
then the Company's right to exercise each such option shall lapse for the time
being and shall reoccur each time the Mandatory Market Price again equals or
exceeds $1.50 per share until the Company exercises each such option.
The rights represented by this Warrant shall be exercised by the holder
hereof, in whole or in part, but not as to a fractional share of Common Stock,
by the surrender of this Warrant (properly endorsed) at the office of the
Corporation or its transfer agent, and by payment to the Corporation of the
Exercise Price in cash or by wire transfer, for each share being purchased. Upon
the exercise of this Warrant, a certificate or certificates for the shares of
Common Stock so purchased, registered in the name of the holder, shall be
promptly delivered to the holder hereof within a reasonable time. The person in
whose name any certificate for shares of Common Stock is issued upon exercise of
this Warrant shall for all purposes be deemed to have become the holder of
record of such shares on the date on which the Warrant was surrendered and
payment of the Exercise Price and any applicable taxes was made, except that, if
the date of such surrender and payment is a date on which the stock transfer
books of the Corporation are closed, such person shall be deemed to have become
the holder of such shares at the close of business on the next succeeding date
on which the stock transfer books are open.
Section 2. TRANSFER. DIVISION AND COMBINATION.
(a) Neither the Warrants or the Warrant Shares may be sold,
assigned or otherwise transfey 11, 1995 to any person other than an officer,
managing director or affiliate of Holder. Transfer of this Warrant and all
rights hereunder, in whole or in part, is registrable on the books of the
Corporation to be maintained for such purpose, upon surrender of this Warrant at
the principal office of the Corporation, together with the Assignment Form
annexed hereto duly executed by the Holder or his agent or attorney and funds
sufficient to pay any stock transfer taxes payable upon the making of such
transfer. Upon such surrender and payment the Corporation shall execute and
deliver a new Warrant or Warrants in the name of the assignee or assignees and
in the denomination specified in such instrument of assignment, and this Warrant
shall promptly be canceled. A Warrant may be exercised by a new Holder for the
purchase of shares of Common Stock without having a new Warrant issued.
-3-
<PAGE>
(b) This Warrant may be divided or combined with other Warrants
upon presentation hereof at the aforesaid office or agency of the Corporation,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued, signed by Holder or his agent or attorney.
Subject to compliance with subparagraph (a) above, as to any transfer which may
be involved in such division or combination, the C~tion shall execute and
deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be
divided or combined in accordance with such notice.
(c) The Corporation shall prepare, issue and deliver at its own
expense (other than stock transfer taxes) the new Warrant or Warrants under this
Section.
(d) The Corporation agrees to maintain, at its aforesaid office
or agency, books for the registration and the registration of transfer of the
Warrants.
(e) In the case of all dividends or other distributions of the
Corporation to the holders of its Common Stock with respect to which any
provision of Section 3 refers to the taking of a record of such holders, the
Corporation will in each such case take such a record and will take such record
as of the close of business on a business day. The Corporation will not at any
time, except upon dissolution, liquidation or winding up of the Corporation,
close its stock transfer books or warrant transfer books so as to result in
preventing or delaying the exercise or transfer of any warrant.
Section 3. ADJUSTMENT OF NUMBER OF SHARES SUBIECT TO WARRANT. Upon any
adjustment of the Exercise Price pursuant to Sections 4(a) or 4(b) hereof, the
holder of this Warrant shall thereafter be entitled to purchase, at the adjusted
Exercise Price, the number of shares (calculated to the nearest tenth of a
share) obtained by multiplying the Exercise Price in effect immediately prior to
such adjustment by the number of shares purchasable pursuant hereto immediately
prior to such adjustment and dividing the product thereof by the Exercise Price
resulting from such adjustment.
Section 4. ADJUSTMENT OF EXERCISE PRICE.
(a) If the Corporation shall hereafter split, subdivide or
combine its Common Stock, then the Exercise Price shall be proportionately
adjusted so that the holder of this Warrant shall receive the equivalent number
of shares, at the equivalent cost per share, as if this Warrant was exercised on
the date immediately preceding such split, subdivision or combination of the
Corporation's Common Stock.
(b) If the Corporation shall pay a dividend with respect to the
Common Stock or make any other distribution with respect to the Common Stock
payable in shares of Common Stock, then the Exercise Price shall be adjusted,
from and after the date of determination of the shareholders entitled to receive
such dividend or distribution, to that price determined by multiplying the
Exercise Price in effect immediately prior to such date of determination by a
-4-
<PAGE>
fraction (i) the numerator of which shall be the total number of shares of
Common Stock outstanding immediately prior to such dividend or distribution, and
(ii) the denominator of which shall be the total number of shares of Common
Stock outstanding immediately after such dividend or distribution.
(c) Upon any such adjustment of the Exercise Price pursuant to
this Section, then and in each such case the Corporation shall give written
notice thereof to Holder stating the Exercise Price resulting from such
adjustment and the number of shares of Common Stock thereafter purchasable under
this Warrant and setting forth in reasonable detail the method of calculation
and the facts upon which such calculation is based.
Section 5. RECLASSIFICATION, MERGER, ETC. In the case of any
reclassification of the Common Stock or in the case of any consolidation or
merger of the Corporation with or into another corporation (other than a merger
with another corporation in which the Corporation is the surviving corporation
and which does not result in any reclassification of the Common Stock) or in the
case of any sale of all or substantially all of the assets of the Corporation,
then the Corporation, or such successor or purchasing corporation, as the case
may be, shall execute a new certificate, providing that the holder of this
Warrant shall have the right to exercise such new Warrant and upon such exercise
to receive, in lieu of each share of Common Stock theretofore issuable upon
exercise of this Warrant, the number and kind of shares of stock, other
securities, money or property receivable upon such reclassification,
consolidation, merger or sale of assets by a holder of shares of the Common
Stock with respect to one share of Common Stock. Such new Warrant certificate
shall provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for herein. The provisions of this
Section shall similarly apply to successive reclassifications, consolidations,
mergers or sales of assets.
Section 6. STOCK TO BE RESERVED. The Corporation will at all times reserve
and keep available out of its authorized Common Stock or its treasury shares,
solely for the purpose of issue upon the exercise of this Warrant as herein
provided, such number of shares of Common Stock as shall then be issuable upon
the exercise of this Warrant. The Corporation covenants that all shares of
Common Stock which shall be so issued shall be duly and validly issued and fully
paid and nonassessable and free from all taxes, liens and charges with respect
to the issue thereof. The Corporation will take all such action as may be
necessary to assure that all such shares of Common Stock may be so issued
without violation of any applicable law or regulation, or of any requirements of
any national securities exchange upon which the Common Stock of the Corporation
may be listed. The Corporation has not granted and will not grant any right of
first refusal with respect to shares issuable upon exercise of this Warrant, and
there are no preemptive rights associated with such shares
Section 7. NO STOCKHOLDER RIGHTS OR LIABILITIES. This Warrant shall not
entitle the holder hereof to any voting rights or other rights as a stockholder
of the Corporation. No provision hereof, in the absence of affirmative action by
the holder hereof to purchase shares
-5-
<PAGE>
of Common Stock, and no mere enumeration herein of the rights or privileges of
the holder hereof, shall give rise to any liability of such holder for the
Exercise Price or as a shareholder of the Corporation, whether such liability is
asserted by the Corporation or by creditors of the Corporation.
Section 8. FRACTIONAL SHARES. No fractional shares shall be issued upon the
exercise of this Warrant, but the Company shall pay the holder an amount equal
to the fair market value of such fractional share of Common Stock in lieu of
each fraction of a share otherwise called for upon any exercise of this Warrant.
For purposes of this Warrant, the fair market value of a share of Common Stock
shall be determined as follows:
(a) If the Common Stock is listed on a National Securities
Exchange or admitted to unlisted trading privileges on such exchange or listed
for trading on the Nasdaq system, the current market value shall be the last
reported sale price of the Common Stock on such exchange or system on the last
business day prior to the date of exercise of this Warrant or on such day the
average of the closing bid and asked prices for such day on such exchange or
system, as applicable; or
(b) If the Common Stock is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so reported, the current
market value shall be the mean of the last reported bid and ask prices reported
by the National Quotation Bureau, Inc. on the last business day prior to the
date of the exercise of this Warrant; or
(c) If the Common Stock is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so reported, the current
market value shall be an amount, not less than book value thereof as at the end
of the most recent fiscal year of the Company ending prior to the date of the
exercise of the Warrant, determined in such reasonable manner as may be
prescribed by the Board of Directors of the Company.
Section 9. REGISTRATION RIGHTS. Neither the Warrant nor the Warrant
Shares have been registered under the Securities A ct of 1933, as amended (the
"Securities Act").
9.1 After January 1, 1995, whenever the Company proposes to file
under the Securities Act a Registration Statement relating to any of its Common
Stock, whether on its own behalf or on behalf of any holders of Common Stock of
the Company, the Company shall, at least thirty (30) days prior to such filing,
give written notice of such proposed filing to Holder. Upon receipt by the
Company not more than thirty (30) days after such notice of a written request
from Holder for registration of Warrant Shares issuable upon exercise of the
Warrants by Holder or held by Holder, the Company shall (A) include in such
registration statement or in a separate registration statement concurrently
filed, and shall use its best
-6-
<PAGE>
efforts to cause such registration statement to become effective with respect
to, the Warrant Shares as to which Holder requests registration and ('3) if such
proposed registration is in connection with an underwritten offering of Common
Stock for the benefit of the Company, upon request of Holder, use its best
efforts to cause the managing underwriter therefor to include in such offering
the Warrant Shares as to which Holder requests such inclusion, on terms and
conditions comparable to those of the securities offered on behalf of the
Company. Holder shall cooperate with the Company in the preparation of such
Registration Statement, to the extent required to furnish information concerning
the Holder therein. Notwithstanding the foregoing, this Section 9.1 shall not be
applicable to registration statements of the Company filed pursuant to Form S-8
or S-4.
9.2 Whenever one or more registered holders of a majority of the
Warrants or Warrant Shares issued as of the date hereof pursuant to a certain
Advisory Agreement effective as of July 11, 1994 between Strategica Group, Inc.
or its designees and the Company shall make a written request to the Company to
register under the Securities Act Warrant Shares either issuable upon exercise
of the Warrants or held by such holders, the Company shall within ten (10) days
after such request is received promptly give written notice to holder stating
the estimated approximate date of riling such registration statement, and shall
thereupon promptly use its best efforts to file a registration statement (and
thereafter use its best efforts to cause such registration) with respect to all
Warrant Shares issuable upon exercise of the Warrants by Holder or held by
Holder as soon as reasonably practical after the date of receipt of such notice
by the Company. The Company shall not be required at its expense to effect more
than one registration statement pursuant to this Section 9.2. Notwithstanding
anything to the contrary contained herein, in the event that Holder exercises
its registration rights under this Section 9.2: (a) on or prior to October 13,
1995, and the registration of the subject Warrant Shares issuable upon exercise
of the Warrants or held by such holders shall not have been declared effective
by the Securities and Exchange Commission (the SEC) pursuant to the Securities
Act on or prior to January 5, 1996, then the $1.25 per share Exercise Price
shall be extended to the date that is five (5) business days following such
effective date; or (1)) on or prior to April 12, 1997, and the registration of
the subject Warrant Shares issuable upon exercise of the Warrants or held by
such holders shall not have been declared effective by the SEC pursuant to the
Securities Act on or prior to July 7, 1997, then the Expiration Date shall be
extended to the date that is five (5) business days following such effective
date.
9.3 If the Corporation is required by the provisions of this
Section 9 to use its best efforts to effect the registration of any of its
securities under the Securities Act, the Corporation will, as expeditiously as
is possible:
(a) Prepare and file with the SEC a registration statement with
respect to such securities and use its best efforts to cause such registration
statement to become and remain effective.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the sale or
other disposition of all securities covered by such registration statement
whenever the Holder of such securities shall desire to transfer the same.
-7-
<PAGE>
(c) Furnish to the Holder such number of copies of a summary
prospectus or other prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other
documents, as the Holder may reasonably request in order to facilitate the
transfer of the securities owned by such Holder.
(d) Use its best efforts to register or qualify the securities
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions within the United States as Holder shall request
(provided that the Company shall not be required to pay registration or
qualification expense for more than ten (10) states to be designated by Holder)
and do such other reasonable acts and things as may be the transfer in such
jurisdictions of the securities owned by Holder.
(e) Furnish, at the request of the Holder requesting
registration of Warrant Shares, on the date that such Warrant Shares are
delivered to the underwriters for sale pursuant to such registration or, if such
Warrant Shares are not being sold through underwriters, on the date that the
registration statement with respect to such shares becoming effective, (1) an
opinion, dated such date, of the outside counsel representing the Corporation
for the purposes of such registration, addressed to the underwriters, if any,
and if such Warrant Shares are not being sold through underwriters, then to the
holders making such request, stating that such registration statement has become
effective under the Securities Act and that (i) to the best knowledge of such
counsel, no stop order suspending the effectiveness thereof has been issued and
no proceedings for that purpose have been instituted or are pending or
contemplated under the Securities Act, (ii) the registration statement, the
related prospectus, and each amendment or supplement thereto, comply as to form
in all material respects with the requirements of the Securities Act and the
applicable rules and regulations of the SEC thereunder (except that such counsel
need express no opinion as to financial statements contained therein), (iii)
such counsel has no reason to believe that either the registration statement or
the prospectus, or any amendment or supplement thereto, ,contains any untrue
statement of a material fact required to be stated therein or necessary to make
the statements therein not misleading, (iv) the descriptions in the registration
statement or the prospectus, or any amendment or supplement thereto, of all
legal matters and contracts and other legal documents or instruments are
accurate and fairly present the information required to be shown, and (v) such
counsel does not know of any legal or governmental proceedings, pending or
contemplated, required to be described in the registration statement or
prospectus, or any amendment or supplement thereto, which are not described as
required, nor of any contracts or documents or instruments of a character
required to be described in the registration statement or prospectus, or any
amendment or supplement thereto, or to be filed as exhibits to the registration
statement which are not described and filed or incorporated by reference as
required; and (2) a letter dated such date, from the independent certified
public accountants of the Corporation, addressed to the underwriters, if any,
and if such Warrant Shares are not being sold through underwriters, then to the
Holders making such request, stating that they are independent certified public
accountants within the meaning of the Securities Act and that, in the opinion of
such accountants, the financial statements and other financial data of the
Corporation included in the registration statement or the prospectus, or any
-8-
<PAGE>
amendment or supplement thereto, comply as to form in all material respects with
the applicable accounting requirements of the Securities Act. Such opinion of
counsel shall additionally cover such other legal matters with respect to the
registration in respect of which such opinion is being given as the Holders may
reasonably request. Such letter from the independent certified public
accountants shall additionally cover such other, financial matters (including
information as to the period ending not more than five (5) business days prior
to the date of such letter) with respect to the registration in respect of which
such letter is being given as the Holders may reasonably request.
(f) Otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC.
9.4 The Holder of the securities being so registered agrees to
pay all of the underwriting discounts and commissions with respect to the
securities owned by them being registered. The Company will pay all other costs
and expenses in connection with a registration statement to be filed pursuant to
Section 9 hereof including, without limitation, registration fees, the
reasonable fees and expenses of counsel for the Company and Holder, the fees and
expenses of its accountants and all other costs and expenses incident to the
preparation, printing and filing under the Securities Act of any such
registration statement, each prospectus and all amendments and supplements
thereto, the costs incurred in connection with the qualification of such
securities for sale in not more than ten (10) states as Holder has designated,
including fees and disbursements of counsel for the Company, and the costs of
supplying a reasonable number of copies of the registration statement, each
preliminary prospectus, final prospectus and any supplements or amendments
thereto to the Holder.
9.5 The Company agrees to enter into an appropriate
cross-indemnity agreement with any underwriter (as defined in the Securities
Act) for the Holder in connection with the filing of a registration statement
pursuant to Section 9.1 hereof.
9.6 If the Company shall file any registration statement
including therein all or any part of the Warrant Shares either issuable upon
exercise of the Warrants by Holder or held by Holder, the Company and the Holder
shall enter into an appropriate cross-indemnity agreement whereby the Company
shall indemnify and hold harmless the Holder against any losses, claims, damages
or liabilities (or actions in respect thereto arising out of or based upon any
untrue statement or alleged untrue statement of any material fact contained in
such registration statement, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
statements therein not misleading unless such statement or omission was made in
reliance upon and in conformity with written information furnished or required
to be furnished by the Holder, and the Holder shall (to the extent of and
limited to the amount of net proceeds received by the Holder from the sale of
Warrant Shares) indemnify and hold harmless the Company, each of its directors
and officers who have signed the registration statement and each person, if any,
who controls the Company, within the meaning of the Securities Act against any
losses, claims, damages or liabilities (or actions in respect thereof)
-9-
<PAGE>
arising out of or based upon any untrue statement or alleged untrue statement of
any material fact contained in such registration statement, or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make statements therein not misleading, if the statement or
omission was made in reliance upon and in conformity with written information
furnished or required to be furnished by the Holder expressly for use in such
registration statement.
9.7 Nothing herein shall be construed to require any of the
holders who may desire to include any securities in any registration statement
refereed to in Section 9.1 hereof to exercise their Warrants prior to the
effective date of registration statement and such holders, at their option, to
the extent permissible by law, may exercise the Warrants against payment of the
proceeds of the sale of such securities pursuant to a registration statement.
9.8 Until the shares shall be sold or capable of sale without
registration under the Securities Act, the Company at its expense will file such
post-effective amendments as may be necessary to make available for use a
prospectus meeting the requirements of the Securities Act, including, without
limitation, Section 1O(a)(3). The Company will cause copies of such prospectus
to be delivered to any person exercising the warrant or selling the shares as
may be required by the Securities Act and the rules and regulations of the SEC.
Section 10. INVESTMENT REPRESENTATION AND LEGEND. Each holder, by
acceptance of this Warrant, represents and warrants to the Corporation that the
Holder is acquiring the Warrant and the securities issuable upon exercise
hereof, unless at the time of exercise a registration statement under the
Securities Act is effective with respect to such securities, for investment
purposes only and not with a view towards the resale or other distribution
thereof.
The Holder, by acceptance of this Warrant, agrees that the Corporation may
affix, unless the shares subject to this Warrant are registered at the time of
exercise, the following legend to certificates for securities issued upon
exercise of this Warrant:
The securities represented by this certificate have been issued in
reliance upon the representation of the holder that they have been
acquired for investment and not with a view toward the resale or other
distribution thereof, and have not been registered under the
Securities Act of 1933 (the Securities Act") or applicable state
securities laws ("State Acts") and may not be offered, sold,
transferred, encumbered or otherwise disposed of unless there is an
effective registration statement under the Securities Act and the
applicable State Acts or unless in the opinion of counsel acceptable
to the Corporation, such registration is not required.
Section 11. LOST, STOLEN. MUTILATED OR DESTROYED WARRANT. If this Warrant
is lost, stolen, mutilated or destroyed, the Corporation may, on such terms as
to indemnity or otherwise
-10-
<PAGE>
as it may in its discretion reasonably impose (which shall, in the case of a
mutilated Warrant, include the surrender thereof), issue a new Warrant of like
denomination and tenor as the Warrant so lost, stolen, mutilated or destroyed.
Any such new Warrant shall constitute an original contractual obligation of the
Corporation, whether or not the allegedly lost, stolen, mutilated or destroyed
Warrant shall be at any time enforceable by anyone.
Section 12. PAYMENT OF TAXES. The Company will pay all taxes, if any,
attributable to the transfer and/or issuance of the Warrants and the Warrant
Shares.
Section 13. NOTICES. All notices, requests, demands and other
communications relating to this Warrant Certificate shall be in writing,
addressed, if to the registered owner hereof, to it at the address furnished by
the registered owner to the Company, and, if to the Company, to it at 2600 S.W.
Third Avenue, Second Floor, Miami, Florida 33129-2383, or to such other address
as any party shall notify the other party in writing, and shall be effective, in
the mails, of written notice by first class certified mail, postage prepaid,
three (3) days after placement into the mails, in the case of written notice by
express mail or other overnight courier, the day after placement with that
service, And, in the case of notice by confirmed telex, facsimile transmission,
telegram or cable, on the same day as sent.
Section 14. BINDING EFFECT. This Warrant Certificate shall be binding upon
and inure to the sole and exclusive benefit of the Company, its successors and
assigns and the registered holder or holders from time to time of the Warrants
and the Warrant Shares.
Section 15. SUPPLYING INFOMATION. The Corporation shall cooperate with the
Holder in supplying such information as may be necessary for the Holder to
complete and file any information reporting forms presently or hereafter
required by the SEC as a condition to the availability of an exemption from the
Securities Act for the sale of any Warrant or Warrant Shares.
Section 16. FILINGS. The Corporation will deliver to Holder promptly upon
their becoming available one copy of each report, notice or proxy statement sent
by the Corporation to its stockholders generally, and of each regular or
periodic report pursuant to the Securities Exchange Act of 1934, as amended) and
any registration statement, prospectus or written communication (other than
transmittal letters) pursuant to the Securities Act), filed by the Corporation
with (i) the SEC or (ii) any securities exchange on which shares of Common Stock
are listed.
Section 17. SUCCESSORS AND ASSIGNS. This Warrant and the rights evidenced
hereby shall inure to the benefit of and be binding upon the successors of the
Corporation and Holder. The provisions of this Warrant are intended to be for
the benefit of all Holders from time to time of this Warrant, and shall be
enforceable by any such Holder.
-11-
<PAGE>
Section 18. AMENDMENT. This Warrant may not be modified or amended except
by written agreement of the parties.
Section 19. HEADINGS. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
Section 20. GOVERNING LAW. THIS WARRANT CERTIFICATE SHALL BE CONSTRUED IN
ACCORDANCE WIIH AND GOVERNED BY THE LAWS OF THE STATE OF FLORIDA, WITHOUT
REFRENCE TO THE CONFLICTS OF LAWS PRINCIPLES OF THE STATE OF FLORIDA.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-12-
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Warrant on and as of
the day and year first above written.
EVANS ENVIRONMENTAL CORPORATION
a Colorado corporation
By: /s/ SCOTT E. SALPETER
-----------------------------------
Scott E. Salpeter, Vice President
[EXECUTION PAGE TO WARRANT CERTIFICATE]
-13-
<PAGE>
WARRANT EXERCISE FORM
The undersigned hereby irrevocably elects to exercise the within Warrant to
the extent of purchasing _____ shares of Series A Convertible Preferred Stock of
Evans Environmental Corporation, a Colorado corporation, and hereby makes
payment of $___________ in payment therefor.
----------------------------
Signature
----------------------------
Signature, if jointly held
-----------------------------
Date
INSTRUCTIONS FOR ISSUANCE OF STOCK
----------------------------------
(if other than to the registered holder of the within Warrant)
Name__________________________________________________________________________
(Please typewrite or print in block letters)
Address_______________________________________________________________________
______________________________________________________________________________
Social Security or Taxpayer Identification Number_____________________________
And if said number of shares shall not be all the shares exchangeable or
purchasable under the within Warrant, a new Warrant is to be issued in the name
of the undersigned for the balance remaining of the shares purchasable
thereunder.
<PAGE>
ASSIGNMENT FORM
---------------
FOR VALUE RECEIVED, ____________________________ hereby sells, assigns and
transfers unto ______________________________________________, the right to
purchase Series A Preferred Stock of Evans Environmental Corporation, a Colorado
corporation, represented by this Warrant to the extent of shares as to which
such right is exercisable and does hereby irrevocably constitute and
appoint________________________________________ Attorney, to transfer the same
on the books of the Company with full power of substitution in the premises.
Dated:_______________, 199____
----------------------------
Signature
----------------------------
Signature, if jointly held
AMENDMENT TO WARRANT CERTIFICATE
THIS AMENDMENT TO WARRANT CERTIFICATE (the "Amendment") relates to a
certain Warrant Certificate dated July 11, 1994, (the "Warrant Certificate")
granted by EVANS ENVIRONMENTAL CORPORATION, a Colorado corporation, to
STRATEGICA CAPITAL CORPORATION, a Florida corporation, with respect to 350,000
shares of Evans' common stock.
Section 1 of the Warrant Certificate is hereby amended in its entirety to
read as follows:
"Section 1. Exercise of Warrant. This Warrant may be exercised at any
time from the date hereof until and including January 11, 1999, 5:00
P.M., Miami, Florida time (the "Expiration Date"). If the average of
the closing bid and asked prices of the Company's Common Stock for the
ten (10) trading days (in which the Company's Common Stock is traded)
immediately prior to January 11, 1999, is less than $2.00 per share on
the original Expiration Date, then the Expiration Date shall be
extended for one additional year to January 11, 2000 (the "First
Extended Expiration Date"). If such average immediately prior to
January 11, 2000, is less than $2.00 per share on the First Extended
Expiration Date, then the Expiration Date shall be extended for one
additional year to January 11, 2001 (the "Second Extended Expiration
Date"). If such average immediately prior to January 11, 2001, is less
than $2.00 per share on the Second Extended Expiration Date, then the
Expiration Date shall be extended for one additional year to January
11, 2002. Subject to adjustment pursuant to Section 4 below, the
exercise price of the shares of Common Stock purchasable pursuant to
this Warrant shall be $0.675 per share (such price, as adjusted from
time to time, being hereinafter referred to as the "Exercise Price").
The rights represented by this Warrant may be exercised by the holder
hereof, in whole or in part, but not as to a fractional share of
Common Stock, by the surrender of this Warrant (properly endorsed) at
the office of the Corporation or its transfer agent, and by payment to
the Corporation of the Exercise Price in cash or by wire transfer, for
each share being purchased. Upon the exercise of this Warrant, a
certificate or certificates for the shares of Common Stock so
purchased, registered in the name of the holder, shall be promptly
delivered to the holder hereof within a reasonable time. The person in
whose name any certificate for shares of Common Stock is issued upon
exercise of this Warrant shall for all purposes be deemed to have
become the holder of record of such shares on the date on which the
Warrant was surrendered and
<PAGE>
payment of the Exercise Price and any applicable taxes was made,
except that, if the date of such surrender and payment is a date on
which the stock transfer books of the Corporation are closed, such
person shall be deemed to have become the holder of such shares at the
close of business on the next succeeding date on which the stock
transfer books are open."
Except as amended hereby, the terms and conditions of the Warrant
Certificate shall remain the same and in full force and effect.
IN WITNESS WHEREOF, this Amendment has been executed as of this 4th day of
April, 1995.
EVANS ENVIRONMENTAL CORPORATION
a Colorado corporation
By: /s/ SCOTT E. SALPETER
----------------------------
Scott E. Salpeter
Vice President
STRATEGICA CAPITAL CORPORATION,
a Delaware corporation,
Successor by Merger to
STRATEGICA CAPITAL CORPORATION,
a Florida corporation
By:_____________________________
Steven R. Cook
Executive Vice President
-2-
<PAGE>
payment of the Exercise Price and any applicable taxes was made,
except that, if the date of such surrender and payment is a date on
which the stock transfer books of the Corporation are closed, such
person shall be deemed to have become the holder of such shares at the
close of business on the next succeeding date on which the stock
transfer books are open.
Except as amended hereby, the terms and conditions of the Warrant
Certificate shall remain the same and in full force and effect.
IN WITNESS WHEREOF, this Amendment has been executed as of this 4th day of
April, 1995.
EVANS ENVIRONMENTAL CORPORATION,
a Colorado corporation
By:____________________________
Scott E. Salpeter
Vice President
STRATEGICA CAPITAL CORPORATION,
a Delaware corporation,
Successor by Merger to
STRATEGICA CAPITAL CORPORATION,
a Florida corporation
By: /s/ STEVEN R. COOK
----------------------------
Steven R. Cook
Executive Vice President
-3-
<PAGE>
AMENDMENT TO WARRANT CERTIFICATE
THIS AMENDMENT TO WARRANT CERTIFICATE (the Amendment) relates to a certain
Warrant Certificate dated July 11, 1994 (the "Warrant Certificate"), granted by
EVANS ENVIRONMENTAL CORPORATION, a Colorado corporation, to STRATEGICA GROUP,
INC., a Florida corporation, with respect to 350,000 shares of Evans' common
stock.
Section 1 of the Warrant Certificate is hereby amended in its entirety to read
as follows:
Section 1. Exercise of Warrant. This Warrant may be exercised at any time from
the date hereof until and including January 11, 1999, 5:00 P.M., Miami, Florida
time (the "Expiration Date"). If the average of the closing bid and asked prices
of the Companys Common Stock for the ten (10) trading days (in which the
Company's Common Stock is traded) immediately prior to January 11, 1999, is less
than $2.00 per share on the original Expiration Date, then the Expiration Date
shall be extended for one additional year to January 11, 2000 (the "First
Extended Expiration Date"). If such average immediately prior to January 11,
2000, is less than $2.00 per share on the First Extended Expiration Date, then
the Expiration Date shall be extended for one additional year to January 11,
2001 (the "Second Extended Expiration Date). If such average immediately prior
to January 11, 2001, is less than $2.00 per share on the Second Extended
Expiration Date, than the Expiration Date shall be extended for one additional
year to January 11, 2002. Subject to adjustment pursuant to Section 4 below, the
exercise price of the shares of Common Stock purchasable pursuant to this
Warrant shall be $0.675 per share (such price, as adjusted from time to time,
being hereinafter referred to a. the "Exercise Price"). The rights represented
by this Warrant may be exercised by the holder hereof, in whole or in part, but
not as to a fractional share of Common Stock, by the surrender of this Warrant
(properly endorsed) at the office of the Corporation or its transfer agent, and
by payment to the Corporation of the Exercise Price in cash or by wire transfer,
for each share being purchased. Upon the exercise of this Warrant, a certificate
or certificates for the shares of Common Stock so purchased, registered in the
name of the holder, shall be promptly delivered to the holder hereof within a
reasonable time. The person in whose name any certificate for share. of Common
Stock is issued upon exercise of this Warrant shall for all purposes be deemed
to have become the holder of record of such shares on the date on which the
Warrant
<PAGE>
was surrendered and payment of the Exercise Price and any applicable taxes was
made, except that, if the date of such surrender and payment is a date on which
the stock transfer books of the Corporation are closed, such person shall be
deemed to have become the holder of such shares at the close of business on the
next succeeding date on which the stock transfer books are open.
Except as amended hereby, the terms and conditions of the Warrant Certificate
shall remain the same and in full force and effect.
IN WITNESS WHEREOF, this Amendment has been executed as of this ______ day of
April, 1995.
EVANS ENVIRONMENTAL CORPORATION,
a Colorado corporation
By:_____________________________________
Scott E. Salpeter,
Vice President
STRATEGICA CAPITAL CORPORATION,
a Delaware corporation,
Successor by Merger to
STRATEGICA GROUP, INC.,
a Florida corporation
By:_____________________________________
Steven R. Cook,
Executive Vice President
Except as amended hereby, the terms and conditions of the Warrant Certificate
shall remain the same and in full force and effect.
IN WITNESS WHEREOF, this Amendment has been executed as of this ______ day of
April, 1995.
EVANS ENVIRONMENTAL CORPORATION,
a Colorado corporation
By:_____________________________________
Scott E. Salpeter,
Vice President
STRATEGICA CAPITAL CORPORATION,
a Delaware corporation,
Successor by Merger to
STRATEGICA GROUP, INC.,
<PAGE>
a Florida corporation
By:_____________________________________
Steven R. Cook,
Executive Vice President
Advisory and Equity Matters
Evans Environmental Corporation
August, 1995
1. An antidilution agreement will be implemented which provides that if Evans
issues any new equity securities, Strategicas preferred stock will be
convertible into the same proportion of equity ownership as outstanding
prior to such new issuance. Strategicas proportion of equity ownership
shall include all preferred stock, warrants and common stock (and in no
event will be less than 37.7%).
2. The exercise price of warrants and conversion price of preferred stock
shall be adjusted to the current market price with resets to market price,
if lower, at the end of each Evans fiscal quarter.
3. At Evans option, 50% of past due advisory fees and 50% of fees for the
next 26 months may be prepaid in Evans restricted common stock valued at
$.075. The balance of past due fees should be paid currently.
AGREED AND ACCEPTED:
EVANS ENVIRONMENTAL CORPORATION
By: /s/ CHARLES EVANS
----------------------------
Charles Evans, Chairman
Recapitalization Funding Facility
Evans Environmental Corporation
August, 1995
Overview: Evans has achieved breakeven operations but has tax
and vendor obligations which threaten stability.
A new credit facility will enable settling these
obligations with payments substantially in excess
of liquidation or long term collection levels. If
negotiated settlements are not achieved, the line
will provide sufficient post bankruptcy funding to
rebuild value. Although funding is not available
under the present Strategica line due to Evans
defaults, such defaults would be redefined to
permit a comprehensive restructuring.
Amount: $400,000
Collateral: Same as existing Strategica line.
Maturity: Same as existing Strategica line.
Rate: Same as existing Strategica line until six months
from execution of an IRS settlement. Thereafter
additional consideration will be granted equal to
2.5% of equity ownership per month until all
Strategica debt is repaid in full.
Conditions precedent: Evans retains tax counsel experienced in corporate
tax settlements. Evans raises at least $300,000 of
equity for cash proceeds. Satisfactory tax and
vendor liabilities are achieved.
Use of Proceeds: Up to $250,000 To fund the Internal Revenue
Service settlement. Any
settlement in excess of
$250,000 is subject to approval
by Strategica and further
conditioned upon securing
satisfactory vendor settlements.
Up to $100,000 Fund vendor settlements such
that resultant payable are
reduced by at least $1,000,000
and in a form acceptable to
Strategica.
Up to $ 50,000 Restructuring counsel.
Note: Uses of equity capital raised will be
restricted to working capital purposes
approved by Strategica.
AGREED AND ACCEPTED:
EVANS ENVIRONMENTAL CORPORATION
By:/S/ CHARLES EVANS
---------------------------
Charles Evans, Chairman
PARTICIPATION AGREEMENT
This Participation Agreement ("Agreement") made as of July 11, 1994
by and between STRATEGICA CAPITAL CORPORATION, a Florida corporation
("Strategica") and _________________________________________________________
("Participant")
WHEREAS, Strategica is the owner or holder of record of the interest or
other property identified in Exhibit "A" attached hereto and incorporated herein
(the Property); and
WHEREAS, Strategica owns or holds the interest in the Property for
itself or for itself and for certain participants with Strategica in the
Property, whether now in existence or hereafter determined; and
WHEREAS, unless otherwise determined by Strategica in its discretion,
Strategica shall own or hold said interest in the Property for Strategica and
any such participants as may from time to time exist, in lieu of said interest
being owned or held in the name of Strategica and each of the participants; and
WHEREAS, Strategica may continue to own and hold such interest in its
own name or in the name of any person or entity selected by Strategica to be its
agent or designee, and, if so determined by Strategica, such interest in the
Property may be transferred to the name of any designee or agent of Strategica
or to any person or entity under contract with Strategica, at any time as
directed by Strategica; and
WHEREAS, the interest in the Property shall be owned or held by or at
the direction of Strategica for and on behalf of the Participant and all other
participants, subject, however, to the terms of this Agreement; and
WHEREAS, the parties hereto desire and intend to formulate and establish
their respective obligations, rights and remedies regarding their interest in
the Property;
NOW, THEREFORE, in consideration of the covenants and promises
hereinafter contained, and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto do covenant
and agree as follows:
1. The above recitals are correct and are incorporated into this
Agreement.
<PAGE>
2. $2,500,000 was funded or committed by Strategica to be funded to
acquire the Property (the Property Commitment). Pursuant to this Agreement,
Participant hereby acquires a participation interest (the Participation
Interest) in the Property for $100,000 (the Participation Price). The
Participation price shall be paid to Strategica or funded as directed by
Strategica upon demand. The Participation Interest in the Property currently
represents a 4% interest in the Property, which percentage was determined by a
fraction, the numerator of which shall be the Participation price and the
denominator of which shall be the Property Commitment (whether or not said total
amount has actually been fullY funded or is ever fully funded). The
Participation Interest may, in accordance with this Agreement, change and
readjust from time to time as set forth in this Agreement.
3. As of the date hereof, various parties may own participation
interests in the Property as a participant with Strategica. From time to time in
its discretion, Strategica may assign, sell or convey additional participations
in the property and Strategica may acquire certain of the participation
interests in the Property from participants who desire to dispose of heir
interest or any part thereof. Further, and from time to time in its discretion,
Strategica may acquire all or any part of the interest of any other person or
entity In any of the assets or underlying property forming a part of the
Property or may participate further in any sale of any interest owned by others
in the Property. Further, anD from time to time in Strategicas discretion, the
Participant shall fund, on a PRO RATA basis as demanded by Strategica,
additional amounts in connection with the Property, whether to protect its
interest in the Property or otherwise and, in such event, the respective
positions of the participants in the Property shall be automatically readjusted
proportionately.
4. By participating in the Property, the Participant acknowledges and
agrees that Strategica may, from time to time, receive funds in connection with
the Property in the form of interest payments and principal repayments, and that
a PRO RATA portion of the said funds received shall be paid to Participant on
the monies funded to acquire their interest in the Property until the monies
advanced by Participant are fully repaid. From those payments, Participant shall
receive its PRO RATA share thereof. Notwithstanding anything to the contrary
herein, however, Participant shall only be entitled to receive PRO RATA interest
accruing after the date of purchase of its Participation Interest. After the
participation prices paid by all participants in the property are fully repaid,
together with interest thereon, any cash, gain, benefits and ownership derived
from or in connection with the Property shall be split equally between
Strategica Group, (Group) on the one hand and Strategica together with all
<PAGE>
participants on the other hand. The Participant further acknowledges that it
shall not be entitled to share in any portion of the cash, gain, benefits and
ownership on this investment in the Property as to any benefit and interest
which inures to Group. Further, any equity ownership in the project or business
which is a part of the property shall vest immediately one-half in Group and
one-half in Strategica together with all participants in the Property.
5. Strategica shall have the right to administer the Property, subject
to any rights of others as determined by Strategica, and to make such advances
as may be required pursuant to the provisions of any agreement from time to time
in effect pertaining to the Property. Any and all funds advanced by Strategica
shall be on a PRO RATa basis with Participant and all other participants in the
interest in the Property held in the names of Strategica.
6. The participation of each participant in the Property shall be PRO
RATA and no participant shall have priority over another participant. The
parties hereto shall share proportionately in the receipt of principal as paid
by the borrower, in conformity with the proportion which their respective
contributions from time to time bear in relation to the total amount of money
contributed by all parties.
7. In its discretion, Strategica alone shall act for all participants in
connection with the property. All decisions of Strategica in connection with the
Property shall be binding on all participants without the need for any consent
of any of the participants. Strategica shall make all decisions regarding the
administration of funds and the payment or distribution of monies to
participants and shall have the right to approve or disapprove any request of
any person or entity in connection with the Property without consultation or
permission of any of the participants. The Participant acknowledges that
Strategica may, and hereby authorizes Strategica to, refinance the project or
business which is the subject of the Property and to increase the debt on such
property and, in connection therewith, to grant equity interests and other forms
of compensation to the lender and any mortgage broker involved with such
refinancing. In such event, the Participant acknowledges and accepts a dilution
of its interest in the Property provided, however, that any such dilution shall
be uniform to all participants.
8. Strategica shall have custody and maintain possession, on behalf of
itself and the participants, of all documents relating to the Property and to
Strategicas interest in the Property.
<PAGE>
9. In its discretion, Strategica may make, or consent to, any
modification or alteration of any documents relating to the Property or make or
consent to any release of any person or entity or collateral which supports the
Property, or waive any claim or remedy under any loan document or consent to the
creation of any junior or inferior liens against the Property or any assets
pertaining thereto. Strategica need not deliver any notice of any proposed
action or receive the approval of any participant before approving, or as a
condition to approving, any such action.
10. Participant may not sell, assign, convey, pledge or hypothecate its
interest in the Property without Strategicas prior written consent in its
discretion.
11. Strategica shall have the right to collect the principal of, and any
interest due on, and any other sums payable under, or in connection with the
Property or any loan document pertaining thereto and all other items due or
collectible in connection with the Property and any related loan documents as
the same become due, collectible or payable. Strategica, subject to the rights
of Group, shall promptly account for and pay to the Participant the Participants
proportionate share of all amounts paid to Strategica. All such payments or
collections shall be remitted to participants office at the location provided in
writing to Strategica or at the location designated on the books of Strategica.
12. Strategica shall decide upon the exercise of any and all rights and
remedies in connection with the Property, the security therefor, and any legal
action to be taken. Strategica may, but shall not be obligated to, seek the
consent of any action to be taken in connection with the Property and, upon any
such request, the Participant shall, within 10 days of such request, notify
Strategica of any response to the request. Failure to timely deliver a complete
response to the request shall be deemed an approval of the request. If
Strategica and Participant or any of the other participants fail to achieve
mutuality of consent with respect to any decision relating to the Property for
which Strategica shall have made a request, including any decision which relates
to a matter affecting the Property or the project or business pertaining to the
Property, or any security therefor, or any action to be taken in connection
therewith, Strategica shall be free to act in its discretion and the parties
agree to hold Strategica and its officers, directors and consultants harmless in
connection with any such action taken by Strategica.
13. Strategica shall at all times maintain accurate books of account and
records reflecting the respective interests in the Property. Such books and
records shall be kept in a manner accessible at Strategicas principal office for
inspection by duly
<PAGE>
authorized representatives or examining authorities of the Participant
upon request during business hours.
14. Nothing herein shall be deemed to have created a joint venture or
partnership between the parties; and neither of the parties shall be obligated
for the acts or omissions of the other in any matter or transaction whatsoever,
except as expressly provided herein.
15. If any trustee or other designee of Strategica acquires the fee
simple title to the land and improvements, whether by foreclosure or acceptance
of a deed in lieu thereof, it is agreed that such acquisition is for convenience
only and that the respective proportionate interests of the parties shall apply
to the ownership thereof, each being deemed to have an undivided interest in the
portion of the Property therein (but not in Groups portion therein); and all
gains or losses resulting from the sale thereof and all other sums received or
costs reasonably incurred in connection with the ownership, operation and
maintenance of the property shall be shared ratably in accordance with the
respective undivided interests of the participants. During the period of any
ownership of the property by Strategica or its designee and in the event of any
sale of the property in which a purchase money loan shall be taken as part of
the consideration, this Agreement shall continue in full force and effect and
shall govern the rights and obligations of the parties.
16. Except as specifically set forth herein, no party to this Agreement
has made any express or implied warranties of any kind and neither shall be
liable to the other for any loss not due to its own intentional misconduct, but
all losses shall be borne ratably by all participants in accordance with their
respective interests in the Property and the security therefor.
17. Strategica and its officers, directors, employees, consultants,
counsel, agents and affiliates (collectively, Affiliates) shall not be liable to
participant or, if applicable, to any officer, director or shareholder of a
Participant, for any error of judgment or mistake of law or any loss or damage
with respect to the Property or the matters contemplated by this Agreement or as
to any deployment of funds in connection with the Property or the security
therefor or the matters contemplated by this Agreement or arising from any act
or omission of Strategica or any of its Affiliates in the performance of any of
its rights or obligations hereunder, unless such loss or damage is the result of
bad faith gross negligence or willful misconduct. The term Affiliates shall
include and officer or Strategica who acted as trustee for Strategica, and
Group, and any of their respective Affiliates.
<PAGE>
18. The Participant, together with the other participants, shall
indemnify and hold harmless, to the extent permitted by law, Strategica and any
of the Affiliates, who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding whether civil,
criminal, administrative or investigative (including any action by or in the
right of any participant), by reason of any acts or omissions or alleged acts or
omissions arising out of the activities of such person, if such activities were
performed in good faith either on behalf of Strategica or any of the Affiliates
or in furtherance of the interest of Strategica or any of the Affiliates, and in
a manner reasonably believed by such person to be within the scope of the
authority conferred by this Agreement or by law against losses, damages or
expenses for which such person has not otherwise been reimbursed (including, but
not limited to, accountants and attorneys fees, judgments, fines and amounts
paid in settlement) actually and reasonably incurred by such person in
connection with such action, suit or proceeding, so long as such person was
found not guilty of bad faith willful misconduct under such contract, and, with
respect to any criminal action or proceedings, his conduct was not determined to
be unlawful by final unappealable judgment of a court of competent jurisdiction.
19. This Agreement shall be construed in accordance with the laws of the
State of Florida, without giving effect to the principals of conflicts of laws
and may not be modified except by a writing signed by the parties or their
successors in interest. This Agreement shall inure to the benefits of and shall
be binding upon the parties and their respective successors and assigns, but
nothing herein shall be deemed an authorization to any of the parties to assign
its rights and obligations hereunder, except has hereinbefore expressly
provided.
20. All notices, demands, requests or other communications which may be
or are required to be given, served or sent by any party to the other shall be
in writing and shall be deemed to have been properly given or sent by hand
delivery, federal express or other overnight courier, or by certified or
registered mail, postage prepaid, to the party at the address given previously
herein.
21. No party to this Agreement shall have any obligation to perform
under this provisions of this Agreement until and unless all parties hereto have
executed same.
22. This Agreement may be executed in counterparts, each of which shall
be considered an original.
23. The prevailing party in any litigation shall be entitled to recover
attorneys fees and costs at all judicial levels and proceedings.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Participation
Agreement the day and year first above written.
WITNESSES: STRATEGICA CAPITAL CORPORATION
/ILLEGIBLE/ BY:JACK D. BURSTEIN (SEAL)
-----------------------
/ILLEGIBLE/ JACK D. BURSTEIN
/ILLEGIBLE/ _____________________________________
/ILLEGIBLE/
<PAGE>
EXHIBIT "A" TO PARTICIPATION AGREEMENT
DESCRIPTION OF PROPERTY
All advances by Strategica Capital Corporation to Evans Environmental
Corporation and related security interests in assets, contractual agreements and
equity ownership currently existing or hereafter created.
Strategica Capital Corporation agreed to loan up to $2,500,000 to Evans
Environmental Corporation under certain circumstances.
Evans Participants
May, 1996
Berger-IRA, Adolf J. $ 22,798
Burstein, Gilda 45,595
Burstein, Gilda - Cust 912
Burstein, Lisa 912
Burstein, Rose - Trustee 45,595
Duenas, Elena 34,196
Duenas, Roberto 34,196
Frank - IRA, Howard 91,190
Kalin, Morton 22,798
Miller, Robert B. 22,798
Miller - IRA, Leonard 22,798
Sanders, Evelyn 34,196
--------
Total $377,983
--------
AMENDMENT TO ADVISORY AGREEMENT
THIS AMENDMENT TO ADVISORY AGREEMENT (the "Amendment") relates to a
certain Advisory Agreement dated June 16, 1994, between EVANS ENVIRONMENTAL
CORPORATION, a Colorado corporation, and STRATEGICA GROUP, INC., a Florida
corporation (the "Advisory Agreement").
The reference to "Two hundred thousand (200,000) warrants" in the first
sentence of Section 4.03 of the Advisory Agreement is hereby changed to "Four
hundred thousand (400,000) warrants."
Except as amended hereby, the terms and conditions of the Loan Agreement
shall remain the same and in full force and effect.
IN WITNESS WHEREOF, this Amendment has been executed as of this 4th day
of April, 1995.
EVANS ENVIRONMENTAL CORPORATION,
a Colorado corporation
By:/S/ SCOTT E. SALPETER
---------------------
Scott E. Salpeter,
Vice President
STRATEGICA CAPITAL CORPORATION,
a Delaware corporation,
Successor by Merger to
STRATEGICA GROUP, INC.,
a Florida corporation
By:______________________________
Steven R. Cook,
Executive Vice President
<PAGE>
AMENDMENT TO ADVISORY AGREEMENT
THIS AMENDMENT TO ADVISORY AGREEMENT (the "Amendment")
relates to a certain Advisory Agreement dated June 16, 1994,
between EVANS ENVIRONMENTAL CORPORATION, a Colorado corporation,
and STRATEGICA GROUP, INC., a Florida corporation (the "Advisory
Agreement").
The reference to "Two hundred thousand (200,000) warrants" in the first
sentence of Section 4.03 of the Advisory Agreement hereby changed to "Four
hundred thousand (400,000) warrants."
Except as amended hereby, the terms and conditions of the Loan Agreement
shall remain the same and in full force and effect.
IN WITNESS WHEREOF, this Amendment has been executed as of this 4th day
of April, 1995.
EVANS ENVIRONMENTAL CORPORATION
a Colorado corporation
By:_____________________________
Scott E. Salpeter
Vice President
STRATEGICA CAPITAL CORPORATION,
a Delaware corporation,
Successor by Merger to
STRATEGICA GROUP, INC.,
a Florida corporation
By:/S/ STEVEN R. COOK
------------------
Steven R. Cook,
Executive vice President
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
EVANS ENVIRONMENTAL CORPORATION
-------------------------------
(Name of Issuer)
Common Stock. par value $.003 per share
---------------------------------------
(Title of Class of Securities)
299149
--------------
(CUSIP Number)
Strategica Group, Inc.
Strategica Capital Corporation
1221 Brickell Avenue
Suite 2600
Miami, Florida 33131
(305) 536-1440
Attn.: Mr. Jack D. Burstein
with a copy to:
James S. Cassel, P.A.
Broad and Cassel
201 South Biscayne Boulevard
Suite 3000
Miami, Florida 33131
(305) 373-9400
----------------------------------------------------------
Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
July 11, 1994
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
statement because of Rule 13d- 1(b)(3) or (4), check the following box: []
Check the following box if a fee is being paid with this statement. [xl
<PAGE>
SCHEDULE 13D
CUSIP NO. 299149 PAGE 2 OF 9 PAGES
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
STRATEGICA GROUP, INC.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
FLORIDA
7 SOLE VOTING POWER
NUMBER OF 350,000
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH
REPORTING
PERSON 9 SOLE DISPOSITIVE POWER
WITH 350,000
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
350,000
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.4%
14 TYPE OF REPORTING PERSON
CO
SEE INSTRUCTIONS BEFORE FILLING OUT!
SEC 1746 (9-88) 2 of 9
<PAGE>
SCHEDULE 13D
CUSIP NO. 299149 PAGE 3 OF 9 PAGES
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
STRATEGICA CAPITAL CORPORATION
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
FLORIDA
7 SOLE VOTING POWER
NUMBER OF 350,000
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH
REPORTING
PERSON 9 SOLE DISPOSITIVE POWER
WITH 350,000
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
350,000
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.4%
14 TYPE OF REPORTING PERSON
CO
SEE INSTRUCTIONS BEFORE FILLING OUT!
SEC 1746 (9-88) 3 of 9
<PAGE>
ITEM 1. SECURITY AND COMPANY.
The class of equity securities to which this Statement relates is the
common stock, par value $.003 per share (the "Common Stock"), of Evans
Environmental Corporation, a Colorado corporation (the "Company"). The principal
executive offices of the Company are located at 2600 S.W. Third Avenue, Second
Floor, Miami1 Florida 33129-2383.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This statement on Schedule 13D constitutes a filing pursuant to
Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Act"), by
Strategica Group, Inc., a Florida corporation ("Strategica Group"), and
Strategica Capital Corporation, a Florida corporation ("Strategica Capital")
(Strategica Group and Strategica Capital are hereinafter sometimes referred to
collectively as the "Strategica Companies"). Information with respect to
Strategica Group and Strategica Capital is given solely by each such company,
and neither has responsibility for the accuracy or completeness of information
supplied by the other company.
The officers and directors of Strategica Group are as follows: Jack D.
Burstein (President, Chief Executive Officer and Director); Steven R. Cook
(Executive Vice President, Secretary and Director) Mel Harris (Director); and
Tom Ireland (Director).
The officers and directors of Strategica Capital are as follows: Jack D.
Burstein (President and Chairman of the Board of Directors); Steven R. Cook
(Vice President and Secretary); Mel Harris (Director); Tom Ireland (Director);
Steve Fossett (Director); and Robert Sanders (Director).
(b) The business address for each of the Strategica Companies is 1221
Brickell Avenue, Suite 2600, Miami, Florida 33131.
(c) Strategica Group is engaged in the business of providing financial
consulting services. Strategica Capital is engaged in the business of providing
loans and capital to businesses.
(d) Neither of the Strategica Companies, nor any of their officers and
directors, has, during the last five years, been convicted in any criminal
proceeding (excluding traffic violations or similar misdemeanors).
(e) Neither of the Strategica Companies, nor any of their officers and
directors, has, during the last five years, been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
-4-
<PAGE>
(f) Each of the Strategica Companies is a Florida corporation.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On June 16, 1994, the Company and Strategica Group entered into an
advisory agreement (the "Advisory Agreement") which provides for Strategica
Group to render consulting services to the Company for a period of five years.
In consideration for services to be rendered under the Advisory Agreement, the
Company agreed to pay Strategica Group a monthly fee in the amount of $8,000. In
addition, Strategica Group is to receive the following transactional fees: 3%
for debt sourced, 5% for equity sourced, 5% of the gross consideration for
acquisitions or sales (up to fifty percent (50%) of which may be paid, at the
Company's election, in the form of marketable Common Stock) and fees in
connection with debt restructuring for an acquired company in an amount to be
agreed upon at the time of the transaction.
Moreover, in connection with the successful completion, as defined in
the Advisory Agreement, of certain services, the Company is required to issue to
Strategica Group and its designees warrants to purchase shares of Common Stock
of the Company. On July 11, 1994, the Company issued warrants to purchase
700,000 shares of Common Stock in connection with the successful completion of a
standby credit facility to be used for acquisitions or other special services.
On the same date, pursuant to contractual arrangements between the Strategica
Companies unrelated to the arrangements between Strategica Group and the
Company, half of these warrants were assigned to Strategica Capital. The
warrants are immediately exercisable at a price of $1.25 per share for a period
of 18 months and thereafter at a price of $2.00 per share for a second period of
18 months, at which time the warrants expire. In the event that the price of the
Company's Common Stock for the ten trading days immediately prior to the initial
18 month term is less than $3.00 per share, then the exercise price shall remain
$1.25 through and including the date of expiration of the warrants.
In addition, the Company is obligated to issue (i) warrants to purchase
600,000 shares of Common Stock if Strategica Group is successful in assisting
the Company in obtaining an accounts receivable factoring facility to be used in
connection with the Florida Petroleum Tank Remediation Program, and (ii)
warrants to purchase 200,000 shares of Common Stock upon successful completion
of each acquisition which Strategica Group sources or to which Strategica Group
contributes as requested by the Company. These warrants are exercisable at a
price of 105% of the average bid price of the Company's Common Stock for the ten
trading days prior to the transaction. The warrants are exercisable after twelve
months and expire 36 months from the date of issuance.
All warrants are not transferable for a period of one year from issuance
other than to an officer, managing director or affiliate of the respective
holders thereof.
The Company is required to include the shares of Common Stock underlying
all of the above-described warrants in any registration statement other than a
registration statement on
-5-
<PAGE>
Form S-4 or Form S-8 filed by the Company after January 1, 1995 and to
keep the registration statement effective for the life of the warrants. In
addition, at the request of the holders of a majority of the warrants, the
Company is required to register for resale, at the Company's expense, the shares
of Common Stock underlying the warrants. In the event the warrants are exercised
on or prior to October 13, 1995, and the registration statement is not declared
effective on or prior to January 5, 1996, then the $1.25 exercise price shall be
extended to a date which is five days after the effective date of the
registration statement. Similarly, in the event the warrants are exercised on or
prior to April 12, 1997 and the registration statement is not declared effective
on or prior to July 7, 1997, then the expiration date of the warrants shall be
extended to a date which is five days after the effective date of the
registration statement.
In July 1994, the Company established a $2,500,000 subordinated line of
credit with Strategica Capital. This line of credit, which is subordinated to
the Company's commercial banking facility, expires July 1996 and bears interest
at 15%. This facility is secured by a first lien on the outstanding stock of all
of the Company's subsidiaries and a second lien on the assets of the Company and
its subsidiaries.
To date, neither of the Strategica Companies has exercised any of the
above-described warrants. The Strategica Companies intend to utilize their
respective working capital to fund the purchase of shares in the event of the
exercise any warrants in the future, if at all.
ITEM 4. PURPOSE OF TRANSACTION.
The warrants to purchase shares of Common Stock of the Company were
acquired by each of the Strategica Companies for investment purposes. Either or
both of the Strategica Companies may, subject to market conditions and their
respective assessments of the business prospects of the Company, acquire Common
Stock of the Company from time to time, through the exercise of additional
warrants to be granted under the Advisory Agreement or otherwise and open market
and/or privately negotiated transactions, as each may determine in its sole
discretion.
Other than as discussed above, the Strategica Companies have no plans or
proposals which relate to or which would result in any of the actions specified
in clauses (a) through (j) of Item 4 of the instructions to Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE COMPANY.
(a) According to the Company's report on Form 10-QSB for the quarter
ended June 30, 1994, as of July 31, 1994, there were 9,932,867 shares of Common
Stock issued and outstanding. As of the date hereof, each of the Strategica
Companies has the right to acquire 350,000 shares, or 3.4%, of the Common Stock
of the Company. By virtue of their relationship with one another, pursuant to
Rule 13d-3 of the Act, Strategica Group and Strategica Capital may be deemed to
beneficially own shares of Common Stock beneficially owned by the other,
-6-
<PAGE>
although each company expressly disclaims beneficial ownership of securities
owned by the other company. If each of the Strategica Companies is deemed to
beneficially own the securities owned by the other, then, as a group, they
beneficially own 700,000 shares, or 6.6%, of the Common Stock of the Company.
The Strategica Companies have no present intention to act in concert with
respect to the acquisition or disposition of warrants or shares of Common Stock
of the Company, although there can be no assurance that they will not determine
to act in concert in the future.
(b) Each of Strategica Group and Strategica Capital have the sole power
to vote or direct the vote of the shares of Common Stock underlying the warrants
owned by them, and the power to dispose or direct the disposition of the
warrants and shares of Common Stock underlying the warrants. Neither Strategica
Group nor Strategica Capital shares the power to vote or to direct the vote of
the shares of Common Stock underlying the warrants, or the power to dispose or
direct the disposition of the warrants or the shares of Common Stock underlying
the warrants.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE COMPANY.
None, except the matters described in response to Items 3 and 5(a)
hereinabove.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
(a) Advisory Agreement, dated June 16, 1994, by and between Strategica
Group, Inc. and Evans Environmental Corporation.
(b) Joint Filing Agreement pursuant to Rule 13d-l(f) of the Act.
-7-
<PAGE>
SIGNATURE PAGE
After reasonable inquiry and to the best of our knowledge and belief,
the undersigned certify that the information set forth in this statement is
true, complete and correct.
STRATEGICA GROUP, INC., a Florida
Corporation
Dated: September __, 1994 By:/S/ STEVEN R. COOK
------------------------------
Print Name: STEVEN R. COOK
Title: EXECUTIVE VICE PRESIDENT
STRATEGICA CAPITAL CORPORAITON, a
Florida corporation
Dated: September __, 1994 By:/S/ STEVEN R. COOK
------------------------------
Print Name: STEVEN R. COOK
Title: EXECUTIVE VICE PRESIDENT
-8-
<PAGE>
JOINT FILING AGREEMENT
(Pursuant to Rule 13d-1(f))
The undersigned hereby agree that the Schedule 13D to which this
agreement is attached is, and any amendments will be, filed with the U.S.
Securities and Exchange Commission on behalf of each of the undersigned. This
agreement may be executed in any number of counterparts, each of which shall be
deemed an original but all together shall constitute one and the same agreement.
STRATEGICA GROUP, INC., a Florida
Corporation
Dated: September __, 1994 By:/S/ STEVEN R. COOK
------------------------------
Print Name: STEVEN R. COOK
Title: EXECUTIVE VICE PRESIDENT
STRATEGICA CAPITAL CORPORAITON, a
Florida corporation
Dated: September __, 1994 By:/S/ STEVEN R. COOK
------------------------------
Print Name: STEVEN R. COOK
Title: EXECUTIVE VICE PRESIDENT
-9-
