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As filed with the Securities and Exchange Commission on December 19, 1997.
Registration No. 333-_______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MED/WASTE, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
Delaware 65-0297759
<S> <C>
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
6175 N.W. 153rd Street, Suite 324
Miami Lakes, Florida 33014
(305) 819-8877
(Address including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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MICHAEL D. ELKIN
Vice President/Chief Financial Officer
MED/WASTE, INC.
6175 N.W. 153rd Street, Suite 324
Miami Lakes, Florida 33014
(305) 819-8877
(Name and address, including zip code, and telephone number,
including area code, of agents for service)
With a Copy to:
BRYAN W. BAUMAN, ESQ.
Wallace, Bauman, Fodiman & Shannon, P.A.
2222 Ponce de Leon Boulevard, Sixth Floor
Coral Gables, Florida 33134
(305) 444-9991
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Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement has become effective.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
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<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) SHARE(2) PRICE(2) REGISTRATION FEE
- ------------------------- ------------------ ------------------- ------------------ ------------------
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Common Stock, par value 2,872,013 $ 4.9375 $ 14,180,564 $ 4,298.00
$0.001 per share
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(1) Pursuant to Rule 416 as promulgated under the Securities Act of 1933,
as amended, there is also being registered such additional shares of
Common Stock as may become issuable pursuant to the anti-dilution
provisions of the Debentures or Warrants.
(2) Pursuant to Rule 457(c), the fee is calculated on the basis of the
average of the bid and asked prices on December 17, 1997 on the NASDAQ
Small Cap Market for the Common Stock
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 3
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
Subject to Completion, dated December 19, 1997
PROSPECTUS
2,872,013 Shares
MED/WASTE, INC.
Common Stock
This Prospectus relates to the public offering of up to 2,872,013
shares of common stock, $0.001 par value per share (the "Common Stock") of
Med/Waste, Inc. (the "Company"). All of the shares of Common Stock offered
hereby may be sold from time to time by the stockholders described herein (each
a "Selling Stockholder," collectively the "Selling Stockholders") in
transactions in which they and any broker-dealers through whom such Common Stock
are sold may be deemed to be underwriters within the meaning of the Securities
Act of 1933, as amended (the "Securities Act"), as more fully described herein.
The Selling Stockholders are not restricted in the price or prices at which they
may sell the Common Stock. Any commissions paid or concessions allowed to any
broker-dealer, and, if any broker-dealer purchases such Common Stock as
principal, any profits received on the resale of such shares, may be deemed to
be underwriting discounts and commissions under the Securities Act.
Of the Common Stock being registered hereby, 1,010,960 shares
are issuable upon conversion of 9% Convertible Redeemable Series A Preferred
Stock (the "Series A Preferred Stock") 1,600,002 shares of Common Stock issued
in connection with a private placement by the Company and 261,051 shares are
issuable upon exercise of warrants. Of such shares issuable upon exercise of
warrants, 101,104 shares are issuable upon exercise of common stock purchase
warrants (the "Series A Warrants"), 58,185 shares are issuable upon exercise of
common stock purchase warrants ("Common Warrants") and 101,762 shares are
issuable upon exercise of common stock purchase warrants (the "Placement
Warrants"). The Company will not receive any of the proceeds from the sale of
the Common Stock, but will pay the expenses incurred in registering the Common
Stock, including legal and accounting fees. All selling and other expenses
incurred by individual Selling Stockholders will be borne by such Selling
Stockholder. The Company would receive an aggregate of $1,133,631 in gross
proceeds from the exercise of the various classes of warrants described above.
Selling Stockholders will bear all other expenses of this offering, including
brokerage fees, any underwriting discounts or commissions.
Each share of Series A Preferred Stock is presently convertible
at any time at the option of the holders at the current conversion of $4.25
assuming the value of each share of Series A Preferred Stock at $100. See
"Description of Securities--Series A Preferred Stock" Each Series A Warrant
entitles the holder to purchase one (1) share of Common Stock at an exercise
price of $4.25 per share until October 31, 2002. Each Common Warrant entitles
the holder to purchase one (1) share of Common Stock at an exercise price of
$3.625 per share until December 8, 2002. Of the Placement Warrants, 70,180
Placement Warrants each entitle the holder to purchase one (1) share of Common
Stock at an exercise price of $5.00 per share until November 6, 2002 and 31,582
Placement Warrants each entitle the holder to purchase one (1) share of Common
Stock at $4.50 per share until December 8, 2002.
THE COMMON STOCK OFFERED HEREBY INVOLVES CERTAIN RISKS.
PROSPECTIVE PURCHASERS SHOULD CAREFULLY CONSIDER THE MATTERS SET FORTH UNDER THE
CAPTION "RISK FACTORS" LOCATED ON PAGE 4.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Common Stock is included for quotation on the NASDAQ Small Cap Market
("NASDAQ") under the symbol "MWDS." The last reported sale price of the Common
Stock on NASDAQ on December 17, 1997 was $4.9375 per share. As of December 17,
1997, the Company had 4,628,747 shares of Common Stock outstanding.
The date of this Prospectus is _____________, 1997.
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AVAILABLE INFORMATION
A Registration Statement on Form S-3, relating to the Common
Stock offered hereby has been filed with the Securities and Exchange Commission,
Washington, D.C. 20549 (the "Commission"). This Prospectus does not contain all
of the information set forth in the Registration Statement and the exhibits and
schedules thereto. Statements contained in this Prospectus as to the contents of
any contract or any other document referred to are not necessarily complete and
in each instance reference is made to the copy of such contract or other
documents filed as an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference. For further information with
respect to the Company and the Common Stock being offered hereby, reference is
made to the Registration Statement and the exhibits and schedules thereto. A
copy of the Registration Statement may be inspected by anyone without charge at
the public reference facilities of the Commission, Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549; New York Regional Office, Public Reference Room,
Seven World Trade Center, 13th Floor, New York, New York 10048; and Chicago
Regional Office, Suite 1400, 500 West Madison Street, Chicago, Illinois 60661.
The Commission maintains a World Wide Website that contains filings and other
information filed electronically with the Commission. The address of the
Commission's World Wide Web is http://www.sec.gov.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Commission. These reports, proxy statements and other information can be
inspected and copied at the public reference facilities of the Commission, Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549; New York Regional Office,
Public Reference Room, Seven World Trade Center, 13th Floor, New York, New York
10048; and Chicago Regional Office, Suite 1400, 500 West Madison Street,
Chicago, Illinois 60661. Copies of this material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The reports, proxy and other information may also be
viewed through the Commission's World Wide Website.
The Common Stock is included for quotation on the NASDAQ Small
Cap Market and these reports, proxy statements and other information concerning
the Company may also inspected at the office of the National Association of
Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
FORWARD-LOOKING STATEMENTS
Certain statements in this Prospectus and the documents
incorporated by reference herein may constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Uniform Act of 1995 (the
"Reform Act"). Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Company or industry results, to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among other things; the
Company's history of operations; the Company's highly competitive industry;
consummation of pending and future acquisitions; the business abilities and
judgment of the Company's personnel; the availability of qualified personnel;
changes in, or failure to comply with, governmental regulations; general and
business conditions; and other factors referenced in this Prospectus. See "Risk
Factors."
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DOCUMENTS INCORPORATED BY REFERENCE
The following documents heretofore filed by the Company with the
Commission under the Exchange Act are incorporated herein by reference: (i) the
Company's Annual Report on Form 10-KSB for the year ended December 31, 1996;
(ii) the Company's Quarterly Report on Form 10-QSB for the quarter ended March
31, 1997; (iii) the Company's Proxy Statement dated April 22, 1997 for the
Company's annual meeting of Shareholders held on June 10, 1997; (iv) the
Company's Quarterly Report on Form 10-QSBA for the quarter ended June 30, 1997;
(v) the Company Quarterly Report on Form 10-QSB for the quarter ended September
30, 1997; (vi) the Company's Current Report on Form 8-K for the event dated
September 25, 1997; (vii) the Company's Current Report on Form 8-KA for the
event dated September 25, 1997; (viii) the Company's Current Report on Form 8-K
for the event dated November 6, 1997; (ix) the Company's Current Report on Form
8-KA for the event dated November 6, 1997; and (x) the Company's Current Report
on Form 8-K for the event dated November 7, 1997.
All documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering made by this Prospectus, shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing these documents. Any statements contained in a
document incorporated by reference herein shall be deemed to be modified or
superseded for purposes hereof to the extent that a statement contained herein
(or in any other subsequently filed document which also is incorporated by
reference herein) modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed to constitute a part hereof except as
so modified or superseded. All information appearing in this Prospectus is
qualified in its entirety by the information and financial statements (including
notes thereto) appearing in the documents incorporated herein by reference.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (OTHER THAN EXHIBITS
THERETO) ARE AVAILABLE WITHOUT CHARGE, UPON WRITTEN OR ORAL REQUEST BY ANY
PERSON TO WHOM THIS PROSPECTUS HAS BEEN DELIVERED, FROM THE COMPANY. REQUESTS
SHOULD BE DIRECTED TO MICHAEL D. ELKIN, VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER, 6175 N.W. 153RD STREET, SUITE 324, MIAMI LAKES, FLORIDA 33014
(TELEPHONE: (305) 819-8874).
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THE COMPANY
Med/Waste, Inc. (the "Company") was incorporated in November 1991
under the laws of the State of Delaware. The Company provides medical waste
management services through its wholly owned subsidiaries, Safety Disposal
System, Inc. ("SDS"), Safety Disposal System of South Carolina, Inc. ("SDSSC"),
Safety Disposal System of Pennsylvania, Inc. ("SDSPA"), Safety Disposal System
of Georgia, inc. ("SDSGA") and Incendere, Inc. ("Incendere") and commercial
cleaning services through its wholly owned subsidiary, The Kover Group, Inc.
("Kover"). On November 25, 1997, the Company entered into a letter of intent to
sell 80% of Kover to Kover's president and chief executive officer, Phillip W.
Kubec. The closing is contingent upon Mr. Kubec obtaining bank financing for the
cash portion of the purchase price, as well as debenture holder and the Company
bank lender consent. See "Material Events."
SDS, SDSGA and Incendere provide collection, transportation,
treating, tracking and related services for the disposal of medical waste
throughout Delaware, Florida, Georgia, Maryland, New Jersey, North Carolina,
Pennsylvania, South Carolina, Tennessee and Virginia. SDS also sells or leases
turnkey autoclave treatment units for large quantity generators. SDSSC operates
an incineration facility in Hampton, South Carolina, which is permitted to treat
municipal, medical and special waste which the Company receives from generators
throughout the eastern United States. SDSSC mainly focuses on the treatment of
medical waste and to a lesser degree, special waste. SDSPA owns and operates a
medical waste autoclave treatment facility located in Marcus Hook, Pennsylvania.
Medical waste is generally any waste which may cause an
infectious disease or can reasonably be suspected of harboring pathogenic
organisms. Medical waste includes predominantly all material that comes in
contact with human and animal body fluids. The Company collects medical waste
from medical waste generators, including hospitals, clinics, medical and dental
offices, veterinarians, laboratories, funeral homes, home health agencies and
others. In addition to medical waste collection, the Company provides programs
to assist customers to promote safe handling of medical waste and comply with
federal and state requirements applicable to their operations. Special waste is
generally all non-residential waste which requires more stringent management
than municipal solid waste, but does not include medical or hazardous waste.
Nationally, most medical waste is disposed of by incineration.
However, more stringent government regulation and a generally negative public
attitude toward nearby incineration facilities have resulted in a declining
number of incineration disposal facilities. Relatively few newly permitted
incineration facilities have opened due to the significant cost of compliance
with new environmental legislation. The Company's incinerator is in compliance
with all federal and state regulations dealing with air pollution controls. The
incinerator is a waste to energy facility with a rated capacity for processing
up to 270 tons per day of special, medical and municipal waste. The facility is
currently permitted under South Carolina law to incinerate up to 200 tons per
day of waste both, liquid and solid.
The trend against incinerator facilities has encouraged the
development and commercial use of a variety of environmentally acceptable
alternative disposal techniques. The Company owns and operates a 48 ton
autoclave medical waste treatment facility located in Marcus Hook, Pennsylvania.
In addition, as part of its comprehensive medical waste services, the Company
supplies, installs and oversees the operations of on-site autoclaves at large
quantity generators, typically hospitals. The autoclaves treat the medical waste
through sterilization, allowing most of such waste to be handled and disposed of
as solid waste. Management believes that autoclaves can reduce each hospital's
medical waste by up to 90%, thus significantly reducing the expense of disposal
both due to decreased volume and the significant cost savings of disposing of
solid, versus medical waste. Hospitals either purchase or lease the autoclave
and related equipment. During the term of the lease the Company provides
maintenance and support of the autoclave on-site and collects the treated waste
and transports it for ultimate disposal at a local landfill.
Kover is engaged in the business of offering, selling and
servicing franchises for commercial building cleaning services through the trade
name "Coverall Cleaning Concepts". Kover is a service franchisor of Coverall
North America, Inc. ("CNA") in the metropolitan area of Cleveland, Ohio and
South Florida.
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Kover is a service franchisee of CNA. CNA operates a business
engaged in the offer and sale of three types of franchises, each of which is
related to commercial building cleaning services using the trade name
"Coverall". The three types of franchises are janitorial franchises, limited
area franchises and services franchises. Kover is a service franchisee of CNA in
the metropolitan areas of Cleveland, Ohio and South Florida. Kover has the
exclusive right to sell janitorial franchises using the Coverall Cleaning
Concept in these metropolitan areas. Kover is required to pay CNA royalty fees
of three to four and one-half percent of monthly revenues. Kover uses the
Coverall name, design and business plan to conduct and promote its independent
business of offering, selling and servicing janitorial franchises pursuant to
written agreements between Kover and its janitorial franchisees. Kover maintains
a small staff to perform emergency cleaning services and temporary cleaning
services for accounts being transferred from one franchisee to another. Most
cleaning services are provided to commercial customers through independent
franchisees.
Kover sells franchises for janitorial services in the
metropolitan territories of South Florida and Cleveland, Ohio. As of September
30, 1997, Kover had in operation approximately 245 janitorial franchises. As of
that date, CNA and its other service franchisees had an additional approximately
4,250 janitorial franchises in operation located in 15 states, as well as in
Canada, United Kingdom, South Africa, Spain and Thailand.
The Company is a Delaware corporation with its principal
executive offices located at 6175 N.W. 153rd Street, Suite 324, Miami Lakes,
Florida 33014. Its telephone number at such address is (305) 819-8877.
RISK FACTORS
An investment in the Common Stock offered hereby involves a
certain degree of risk. Prospective purchasers should carefully consider the
following risk factors, as well as all of the other information set forth
elsewhere in this Prospectus or incorporated by reference to the Prospectus,
before purchasing any shares of Common Stock offered hereby.
ACCUMULATED DEFICIT; NET LOSSES. The Company has incurred an
accumulated deficit of $(1,145,593) as of September 30, 1997. For the years
ended December 31, 1994, 1995 and 1996, the Company had net income (losses) of
($422,061), ($1,748,926) and $215,326, respectively. The net loss for the year
ended December 31, 1995 was primarily a result of a non-recurring charge for an
impairment loss of goodwill of $1,622,872. For the nine months ended September
30, 1997, the Company had consolidated net income of $724,139. The can be no
assurance that the Company's activities will generate sufficient cash flow to
sustain ongoing operations or that its operations will continue to be
profitable.
IMPACT OF GOVERNMENT REGULATION. The Company operates within the
medical waste disposal industry, which is subject to extensive and frequently
changing local, state and federal laws. This statutory and regulatory framework
imposes compliance burdens and risks on the Company, including requirements to
obtain and maintain government permits. The transport, treatment and disposal of
medical waste is subject to packaging, labeling, handling, notice and reporting
requirements, as well as requirements pertaining to transporter registration,
transportation handling procedures and the preparation of shipping papers. The
treatment and disposal of municipal and special waste are also subject to
extensive government regulation. State and local regulations vary from location
to location and constantly change. State and local regulations may pose
insurmountable barriers, financial or otherwise, to the opening and operation of
facilities in states where the Company intends to operate its business. The
Company believes that it is currently in compliance in all material respects
with all applicable laws and regulations governing its business and has all
appropriate government permits to operate its existing business, including those
required for the operation of its incineration facility and transfer stations.
However, the addition of new, or amendments to existing, statutes and
regulations could require the Company to continually modify its methods of
operations at costs that could be substantial. Further, since the Company
operates its own medical waste treatment facilities, it is subject to additional
permitting requirements at each such location. The permitting process is complex
and time consuming and is generally opposed by local residents. Even after
permits are issued, opposition groups may attempt to compel regulators through
court proceedings to modify permit conditions or reverse decisions with
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respect to the initial granting of permits. There can be no assurance that the
Company will be able, for financial reasons or otherwise, to comply with future
environmental and permitting laws either in its present market or in those
markets in which it intends to expand. Delays in the permitting process could
add significantly to the cost of developing a medical waste treatment facility
or transfer station and could have a material adverse effect on the Company's
business, financial condition and results of operations.
IMPORTANCE OF GOVERNMENT ENFORCEMENT OF ENVIRONMENTAL
REGULATIONS. The Company believes that its business prospects in the medical
waste disposal industry are significantly enhanced by the stringent enforcement
of handling, transportation, environmental preservation and clean-up
requirements by regulatory agencies. These laws and regulations are, and will
continue to be, a principal factor affecting demand for the Company's medical
waste management services. The intensity and breadth of present and future
regulation and supervision of medical waste disposal procedures and the impact
of technological changes on government regulation cannot be predicted. The level
of government enforcement is subject to constantly changing political and
budgetary pressures. A significant relaxation or reduction in government
enforcement could have a material adverse effect on the Company's business,
financial condition and results of operations.
INTENSE COMPETITION WITHIN INDUSTRY. The Company operates within
the intensely competitive medical waste disposal industry. Competition in the
industry has resulted in substantial price reductions in virtually all
geographic areas in which the Company operates. There can be no assurance that
competitive pressures within the industry will not result in continued or
accelerated price reductions. Substantial continued or accelerated price
reductions would have a material adverse effect on the Company's business,
financial condition and results of operations. The Company faces competition
from several national waste disposal companies and numerous regional and local
entities in its present locations and will in the future be confronted with such
competition in each location where it intends to expand. The Company's business
strategy involves, among other things, selling its services to customers who may
have established relationships with other medical waste management companies and
who may be reluctant to use the Company's services. Several of the Company's
competitors are larger and have substantially greater financial and other
resources than the Company and are well entrenched in their respective markets.
Among these competitors are Browning-Ferris Industries, Inc. ("BFI"), WMX
Technologies, Inc., Laidlaw Waste Systems, Inc., and USA Waste Services, Inc.
The Company's primary competitor is BFI. There can be no assurance that the
Company will be able to profitably compete with such other entities.
GROWTH STRATEGY DEPENDENT UPON ACQUISITIONS. The Company's growth
strategy depends, in part, on its ability to acquire other medical waste
management businesses. There can be no assurance the Company will be able to
continue to identify suitable businesses to acquire, successfully negotiate
their acquisition, or integrate their operations into the Company. The recent
consolidation in the medical waste industry may increase competition for the
acquisition of existing businesses and result in fewer acquisition opportunities
and higher purchase prices. Some of the Company's competitors for acquisitions
are larger and have significantly greater financial resources. Even if the
Company is successful in identifying suitable acquisition candidates, there can
be no assurances that the terms to complete such acquisitions would be
acceptable, or if acceptable, that the Company would have the financial
resources to pay the purchase price. The Company anticipates that future
acquisitions of other medical waste businesses will be made through payment of
cash, issuance of debt or equity securities, or a combination of these methods.
There can be no assurances that the Company will have sufficient resources
available, or if available, on terms acceptable to the Company. The Company may
need to raise additional equity or debt financing to complete such acquisitions.
Any additional equity financings may be dilutive to the Company's existing
shareholders. Debt financings, if available, may not be on terms acceptable to
the Company, if at all. The Company's failure to continue its growth strategy
could have a material adverse effect on the Company's business, financial
condition and results of operations.
POTENTIAL LIABILITY; INSURANCE. The medical waste disposal
industry involves potentially significant risks of statutory, contractual, tort
and common law liability. The failure of the Company to comply with applicable
laws or to manage medical waste in an environmentally sound manner could result
in environmental contamination, personal injury and property damage. The Company
maintains insurance which it considers sufficient to meet regulatory and
customer requirements and to protect the Company's operations.
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However, a partially or completely uninsured claim against the Company of
sufficient magnitude could have a material adverse impact on the Company's
operations. Certain federal and statutory laws impose strict, joint and several
liability on current and former owners and operators of facilities regarding the
release of hazardous substances and on generators and transporters of the
hazardous substances that are brought to such facilities. Responsible parties
may be liable for substantial waste site investigation and clean up costs as a
result of the occurrence of environmental contamination. If the Company was
found to be a responsible party for a particular site, it could be required to
pay the entire cost of waste site investigation and clean up, even though other
parties may also be liable. The Company's ability to obtain contribution from
other responsible parties may be limited by the Company's inability to identify
those parties and by their financial inability to contribute to investigation
and clean up costs. It is possible that in the future the Company may experience
difficulty in obtaining appropriate insurance at reasonable prices with
reasonable coverage, which could place the Company at a competitive
disadvantage. The inability to obtain necessary insurance coverage, or a
successful claim against the Company for which it does not have adequate
insurance, could have a material adverse impact on the Company's operations and
financial condition.
ALTERNATIVE TECHNOLOGIES; TECHNOLOGICAL OBSOLESCENCE. The medical
waste industry presents continuing opportunities for the development of
alternate treatment and disposal methods. Such methods may emphasize cost
efficiencies, reduction in the volume of waste generated, environmental factors
or both. The Company sells autoclave units to hospitals and other large
generators. The development and commercialization of alternative treatment or
disposal technologies that are more efficient or environmentally sound treatment
and disposal methods may have a material adverse effect on the Company's
operations. The Company is aware of certain new medical waste treatment and
disposal technologies including the production of reusable or degradable medical
products, which, if successfully developed and commercialized would have a
material adverse effect on the Company's business, financial condition and
results of operations.
SERVICE FRANCHISE AGREEMENTS. Kover operates as franchisee of
Coverall of North America, Inc. ("CNA") pursuant to Service Franchise Agreements
in each location. The Service Franchise Agreements contain a number of
restrictions and obligations on the part of Kover. The failure of Kover to
strictly comply with these requirements could result in the termination of such
franchises and have a material adverse effect on the Company's business,
financial condition and results of operations.
DEPENDENCE ON FRANCHISOR. CNA contributes to the development of
Kover and its operating systems, clinics, products and formulation of
strategies. The loss of the relationship with the CNA could have a material
adverse effect on Kover's operations and new product development efforts.
Further, the long term success of Kover is in part dependent upon the overall
success of the CNA janitorial system. Accordingly, to a certain extent, the
success of Kover is dependent on part upon the successful operations of CNA's
other franchisees, as well as upon the financial condition, management,
marketing and innovative abilities of CNA. Any event that creates adverse
publicity involving CNA operations may have an adverse impact on the Company,
regardless of whether the event involved Kover.
DEPENDENCE UPON PERSONNEL. The Company is dependent upon the
services of Daniel A. Stauber and Phillip W. Kubec. Mr. Stauber is president of
the Company and its wholly owned subsidiaries, SDS, SDSSC, SDSGA, Incendere and
SDSPA. Mr. Kubec is the president of the Company's wholly owned subsidiary,
Kover. The company has an employment agreement with Mr. Stauber which expires in
December 2001. Kover has an employment agreement with Mr. Kubec which expires in
June 1999. However, if either officer's services were to become unavailable to
the Company for any reason, it could have a material adverse effect on the
Company's business, financial results and results of operations. The Company
does not carry key man life insurance.
NO DIVIDENDS. The Company has never paid any cash dividends on
its Common Stock and does not anticipate paying cash in dividends in the
foreseeable future. The payment of dividends by the Company will depend on its
earnings, financial condition and other business and economic factors affecting
the Company at that time as the Board of Directors may consider relevant. The
Company currently intends to retain any earnings to provide for the development
and growth of the Company.
- 7 -
<PAGE> 10
ANTI-TAKEOVER PROVISIONS OF CHARTER AND BYLAWS. Certain
provisions of the Company's charter and by-laws may have the effect of making
more difficult or could delay attempts by others to obtain control of the
Company, even when these attempts may be beneficial to the interests of
stockholders. For example, the Company's charter and bylaws include advance
notice provisions, provisions that establish a classified Board of Directors,
and provisions that enable the Board of Directors without stockholder approval,
to issue up to 4,000,000 shares of preferred stock in one or more series having
terms fixed by the Board of Directors. As of the date of this Prospectus, the
Company has issued and outstanding 42,969 shares of Series A Preferred Stock. In
addition, the Delaware General Corporation Law contains provisions that may have
the effect of making it more difficult or delaying attempts by others to obtain
control of the Company.
"PENNY STOCK" RULES. The Company's Common Stock is presently
traded on the NASDAQ Small Cap Market. The NASDAQ Stock Market recently
increased the criteria for continued inclusion on the NASDAQ Small Cap Market.
If the Company fails to maintain such listing for its Common Stock, and no other
exclusion from the definition of "penny stock" under the Exchange Act is
available, then any broker engaging in a transaction in the Company's securities
would be required to provide any customer with a risk disclosure document and
the compensation of the broker/dealer in the transaction and monthly account
statements showing the market values of the Company's securities held in the
customer's accounts. The bid and offer quotations and compensation information
must be provided prior to effecting the transaction and must be contained on the
customer's confirmation. If brokers become subject to the "penny stock" rules
when engaging in transactions in the Company's securities, they would become
less willing to engage in such transactions, thereby making it more difficult
for purchasers to dispose of the shares of Common Stock.
NOTES RECEIVABLES FROM FRANCHISEES. Notes receivables from
Franchisees aggregated $2,142,775 and $2,426,992 as at December 31, 1996 and
September 30, 1997, respectively. In connection therewith, $82,441 and $56,853
are reflected as current liabilities (deferred revenue on franchise sales) as at
December 31, 1996 and September 30, 1997, respectively. Although the notes
receivables from franchisees are personally guaranteed by the individuals who
are franchisees, the ability of the franchisees to pay the notes may be
dependent upon the commercial cleaning services provided by the franchisees.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common
Stock by the Selling Stockholders. The Company would receive net proceeds
aggregating $1,133,631 upon exercise of the various classes of warrants, if all
such warrants, are exercised. Such proceeds will be added to the Company's
working capital and used for general corporate purposes.
- 8 -
<PAGE> 11
MATERIAL EVENTS
Material Acquisitions.
On November 6, 1997, the Company purchased a 2.9 acre industrial
site located in Marcus Hook, Pennsylvania, together with related autoclave
equipment used at such site, from K.S. Processing Company, Inc. (the "KS
Facility"). The KS Facility is a medical waste autoclave treatment center
operated by Bonham Management Group, Inc. ("BMG"), a Virginia corporation. On
November 10, 1997, the Company purchased certain of the assets of BMG, including
the right to manage the KS Facility.
The KS Facility consists of two (2) 25 ton per day autoclaves, a
10,000 square foot processing center and a 2,400 square foot administrative
building. The KS Facility receives medical waste from generators located
throughout New York, New Jersey, Connecticut, Pennsylvania, Maryland and
Virginia. The KS Facility currently operates at full capacity. The KS Facility
is currently the only medical waste autoclave facility in Pennsylvania. The
current permitting process for medical waste treatment facilities in
Pennsylvania is a costly, time consuming and politically difficult procedure.
The Company does not anticipate that any additional autoclave or incinerator
permits will be issued by the Pennsylvania Department of Environmental
Protection in the near future.
On November 7, 1997, the Company purchased 100% of the capital
stock of Incendere, Inc., a Virginia corporation ("Incendere"). At the time of
the acquisition, Incendere was a wholly owned indirect subsidiary of Republic
Industries, Inc., a Delaware corporation ("Republic").
Incendere is in the medical waste management services business
and collects medical waste from generators located in the states of Delaware,
Georgia, Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina and
Virginia. Incendere's assets include accounts receivables, inventory and
supplies, equipment, vehicles, machinery, furniture, fixtures, leasehold
improvements, leases of real property and intangible assets used in connection
with the collection of medical waste. Such assets remain intact following the
acquisition, except that the Company assigned 50% of the accounts receivable to
Republic as part of the Agreement. The Company is paid a fee from Republic for
the collection of such assigned receivables. Republic agreed to assume and
satisfy all liabilities of Incendere incurred prior to the closing other than
accounts payables and certain designated obligations. As a result of the
transaction, Incendere became a wholly owned subsidiary of the Company.
Pending Disposition.
On November 25, 1997, the Company entered into a letter of intent
to sell 80% of its wholly owned janitorial subsidiary, Kover, to Kover's
president and chief executive officer, Phillip W. Kubec. The Company had
purchased Kover from Mr. Kubec in July 1994. In connection with such sale, the
Company would receive $2,160,000, payable $1,200,000 in cash at closing and the
balance in a promissory note (the "Note"). The Note would be secured by the
capital stock of Kover and would be payable over five years. the Note would be
subordinate to Kover's bank financing. The closing is contingent upon Mr. Kubec
obtaining bank financing for the cash portion of the purchase price, as well as
debenture holder and Company bank lender consent. In addition, Kover is a
primary obligor on the Debentures. Mr. Kubec and his lender require the release
of Kover from the obligations of all of the debentures issued by the Company
and its subsidiaries, including Kover as a condition of the closing.
- 9 -
<PAGE> 12
SELLING STOCKHOLDERS
An aggregate of up to 2,872,013 shares may be offered by certain
Selling Stockholders. The following table sets forth as of December 8, 1997,
certain information with respect to the Selling Stockholders, based on
information provided by the Selling Stockholders. No Selling Stockholder owns
one percent (1%) or more of the Company's outstanding Common Stock prior to this
Offering, except as indicated below. Beneficial ownership after the Offering
will depend on the number of shares sold by each Selling Stockholder, but
assumes all shares being offered are sold. The Company will not receive any of
the proceeds from the sale of these shares.
<TABLE>
<CAPTION>
SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
NAME AND ADDRESS OF SELLING STOCKHOLDER OWNED PRIOR TO OFFERING AFTER OFFERING
- ---------------------------------------------- -------------------------- SHARES BEING -------------------------
SHARES PERCENT OFFERED(2) NUMBER PERCENT(2)
-------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
75 West Phase 1 Partnership 38,737(3) * 5,882 32,855 *
3578 NW 97th Blvd.
Gainesville, FL 32606
75 West Phase II, Inc. 38,737(4) * 5,882 32,855 *
3578 NW 97th Blvd.
Gainesville, FL 32606
A. Raymond Abt 2,352(5) * 2,352 -- *
14463 Washington Boulevard
University Heights, OH 44118
Robert W. Allen 28,858(6) * 11,764 17,094 *
2400 Balleybunion Road
Center Valley, PA 18034
Applebaum Family Limited Partnership 3,529(7) * 3,529 -- *
4 Birnawoods Lane
St. Louis, MO 63132
Gary P. Arnold 4,705(8) * 4,705 -- *
4028 SW Trail Road
Tualatin, OR 97062
Jude Aririguzo 2,352(9) * 2,352 -- *
2924 Morgan Avenue
Bronx, NY 10469
Baker-Hazel 4,705(10) * 4,705 -- *
Funeral Home Corporate Investment Fund
5555 Philadelphia Dr.
Dayton, OH 45415
Baker-Hazel 4,705(11) * 4,705 -- *
Funeral Home Employee Pension Plan
5555 Philadelphia Dr.
Dayton, OH 45415
John Bertsch 3,529(12) * 3,529 -- *
1655 Steele Avenue, SW
Grand Rapids, MI 49507
Joseph M. Billy 2,352(13) * 2,352 -- *
253 Lafayette Avenue
Passaic, NJ 07055
Bart Birnbaum 15,727(14) * 2,352 13,375 *
8015 SW 15 Street
Miami, FL 33144
</TABLE>
- 10 -
<PAGE> 13
<TABLE>
<CAPTION>
SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
NAME AND ADDRESS OF SELLING STOCKHOLDER OWNED PRIOR TO OFFERING AFTER OFFERING
- ---------------------------------------------- -------------------------- SHARES BEING -------------------------
SHARES PERCENT OFFERED(2) NUMBER PERCENT(2)
-------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Francis A. Bonanno 5,882(15) * 5,882 -- *
1797 Kylemore Court
Dayton, OH 45459
John Bradley 5,211(16) * 5,211 -- *
One Citizens Federal Centre, Suite 1600
Dayton, Ohio 45402
Richard Buchakijian 2,352(17) * 2,352 -- *
85 Beaver Street
c/o Reliable Brands
Albany, NY 12207
Peter Burns 28,149(18) * 18,918 9,231 *
100 Wall Street, 10th Floor
New York, N.Y. 10005
John F. and Pamela S. Carroll 5,718(19) * 5,718 -- *
3691 Fawn Run Dr.
Cincinnati, OH 45241
Phillip E. Casey & Betty Casey 14,429(20) * 5,882 8,547 *
3435 Bayshore Blvd. # 601
Tampa, FL 33629
Corbert L. Clark 4,705(21) * 4,705 -- *
433 N.W. Front Street
Walnut Ridge, AR 72476
Charles Schwab, Custodian FBO: 4,705(22) * 4,705 -- *
Robert Colaizzi IRA
1958 Summit Park Drive, Suite 500
Orlando, FL 32810
Conner & Murphy 57,178(23) 1.23 57,178 -- *
7777 Washington Village Dr., Suite 290
Centerville, OH 45459
Tim Cornell, IRA 5,718(24) * 5,718 -- *
One Citzens Federal Centre, Suite 1600
Dayton, OH 45402
Joseph D'Amadeo 53,013(25) 1.14 31,489 21,524 *
100 Wall Street, 10th Floor
New York, N.Y.
Robert L. and Tracey H. DeBruyn 2,352(26) * 2,352 -- *
2030 Pierre
Manhattan, KS 66502
Dolphin Offshore Partners, L.P. 690,590(27) 14.49 571,787 118,803 2.01
c/o Dolphin Management
129 East 17th Street
New York, N.Y. 10007
James P. Ebersole, Sr. 2,352(28) * 2,352 -- *
3635 Green Acres Place Drive
Garden District No. 334
Bossier City, LA 71111
</TABLE>
- 11 -
<PAGE> 14
<TABLE>
<CAPTION>
SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
NAME AND ADDRESS OF SELLING STOCKHOLDER OWNED PRIOR TO OFFERING AFTER OFFERING
- ---------------------------------------------- -------------------------- SHARES BEING -------------------------
SHARES PERCENT OFFERED(2) NUMBER PERCENT(2)
-------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
EBS Microcap Partners, LP 41,100(29) * 41,100 -- *
7777 Washington Village Dr., Suite 210
Dayton, OH 45459-3976
EBS Partners, L.P. 115,737(30) 2.46 115,737 -- *
7777 Washington Village Drive, Suite 210
Dayton, OH 45459
The Equity Group Inc. Profit Sharing Plan & 23,529(31) * 23,529 -- *
Trust
800 Third Avenue, 36th Floor
New York, NY 10022
John C. Ernst Revocable Trust 17,647(32) * 17,647 -- *
875 Copperfield Lane
Tipp City, OH 45371
Michael E. Ervin MD 9,411(33) * 9,411 -- *
626 West David Road
Dayton, OH 45429
Margaret & Albert J. Esposito 2,352(34) * 2,352 -- *
44 Thornhedge Rd.
Bellport, NY 11713
John Eubel - Mutual Fund/Keogh PS Voluntary 7,058(35) * 7,058 -- *
3821 St. Andrews Drive
Fairborn, OH 45324-9718
Harry M. Farnham III or Cynthia Farnham 5,882(36) * 5,882 -- *
7006 McKamy Boulevard
Dallas, TX 75248
Denis Fortin 28,858(37) * 11,764 17,094 *
26 Brookside Drive
Easton, CT 06612
Keith M. Ganzer 2,352(38) * 2,352 -- *
704 Colorado Avenue
Bridgeport, CT 06605
B. Kent Garlinghouse 14,429(39) * 5,882 8,547 *
2001 SW Wildwood Lane
Topeka, KS 66611
Gem City 10,588(40) * 10,588 -- *
Emergency Associates, Inc. Pension Trust FBO
Richard Coalson, M.D.
171 Walnut Grove Dr.
Centerville, OH 45458
Gem City 5,882(41) * 5,882 -- *
Emergency Associates, Inc. Pension Trust FBO
Robert A. Uptmor, M.D.
1223 Waterwyck Trail
Centerville, OH 45458
Ben Genet 5,882(42) * 5,882 -- *
3870 N. 40th Avenue
Hollywood, FL 33021
</TABLE>
- 12 -
<PAGE> 15
<TABLE>
<CAPTION>
SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
NAME AND ADDRESS OF SELLING STOCKHOLDER OWNED PRIOR TO OFFERING AFTER OFFERING
- ---------------------------------------------- -------------------------- SHARES BEING -------------------------
SHARES PERCENT OFFERED(2) NUMBER PERCENT(2)
-------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
James Gerchow 14,429(43) * 5,882 8,547 *
64177 Rommell Road
Sturgis, MI 49091
David Gilbertson 7,058(44) * 7,058 -- *
2434 Como Avenue
St. Paul, MN 55108
Linda K. Goldenberg 8,727(45) * 2,352 6,375 *
177 North Village Way
Jupiter, FL 33459
Jack C. Goldstein and Leslie S. Goldstein, 2,352(46) * 2,352 -- *
Joint Tenants WROS
16 Sugarberry Circle
Houston, TX 77024
Jean B. Gordon 7,148(47) * 7,148 -- *
6676 Egg Court, Apt. D
Dublin, OH 43017
John R. Graham, Trustee 2,352(48) * 2,352 -- *
1512 Country Club Place
Manhattan, KS 66502
Donald Gross 2,352(49) * 2,352 -- *
23 Par Court
North Hills, NY
Grover, Ciment, Weinstein, Stauber & 113,727(50) 2.44 38,370 75,357 1.28
Friedman, P.A. Money Purchase Pension Plan
and Trust F.B.O. Robert Grover
777 Arthur Godfrey Road, 2nd Floor
Miami Beach, FL 33140
Kettering Anesthesia 5,882(51) * 5,882 -- *
Assoc. P & P/S Retirement Plan FBO Augustus
A. Gullett
2085 S. Linda Drive
Bellbrook, OH 45305
David Gutridge 14,295(52) * 14,295 -- *
1611 Runnymeade Road
Dayton, OH 45419
Douglas E. Hailey 55,524(53) 1.17 46,293 9,231 *
100 Wall Street, 10th Floor
New York, N.Y. 10005
Bradley Hausfeld 7,148(54) * 7,148 -- *
400 Cherokee Drive
Dayton, OH 45427
Tom Hausfeld 7,148(55) * 7,148 -- *
400 Cherokee Drive
Dayton, OH 45427
Ervin Hendricks 5,882(56) * 5,882 -- *
371 Robert P. Jeans Road
Easly, SC 29640
</TABLE>
- 13 -
<PAGE> 16
<TABLE>
<CAPTION>
SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
NAME AND ADDRESS OF SELLING STOCKHOLDER OWNED PRIOR TO OFFERING AFTER OFFERING
- ---------------------------------------------- -------------------------- SHARES BEING -------------------------
SHARES PERCENT OFFERED(2) NUMBER PERCENT(2)
-------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Hilltop Offshore Limited 12,229(57) * 12,229 -- *
45 W. 45th Street, Suite 905
New York, NY 10036
Hilltop Partners, L.P. 54,409(58) 1.16 54,409 -- *
45 W. 45th Street, Suite 905
New York, NY 10036
Robert J. Holtgreive Individual Retirement 7,058(59) * 7,058 -- *
Account
3925 36th Street NW
Canton, OH 44718
Billy P. Hudson 2,352(60) * 2,352 -- *
326 Quail Ridge Road
Franklin, KY 42134
Paine Webber as IRA Custodian for Frank D. 9,474(61) * 5,882 3,592 *
Hutchinson, III
63 Covington Lane
Palm Coast, FL 32137
Industrial Grinding 4,705(62) * 4,705 -- *
Profit Sharing Plan U/A 10/01/84
2306 Ontario Ave.
Dayton, OH 45414
Lawrence K. Jackson & 4,705(63) * 4,705 -- *
Eileen M. Jackson
10650 Robert Drive
Chagrin Falls, OH 44022-4140
Ronnie Johnson 23,529(64) * 23,529 -- *
135 Calloway Lane
Union Grove, NC 28689
Howard Kalka 5,882(65) * 5,882 -- *
2 Knolls Dr.
Old Westbury, NY 11568
Felice M. Kantor 5,882(66) * 5,882 -- *
740 Oakwood Ave.
Dayton, OH 45419
Dr. Neil Kantor IRA R/O 5,882(67) * 5,882 -- *
740 Oakwood Avenue
Dayton, OH 45419
Dale Kaplan-Stein 38,737(68) * 11,764 26,973 *
Robert Kaplan-Stein
13429 NW 32 Place
Gainesville, FL 32606
Dale Sue Kaplan-Stein, IRA 38,737(69) * 6,329 32,408 *
13429 NW 32 Place
Gainesville, FL 32606
</TABLE>
- 14 -
<PAGE> 17
<TABLE>
<CAPTION>
SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
NAME AND ADDRESS OF SELLING STOCKHOLDER OWNED PRIOR TO OFFERING AFTER OFFERING
- ---------------------------------------------- -------------------------- SHARES BEING -------------------------
SHARES PERCENT OFFERED(2) NUMBER PERCENT(2)
-------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Richard N. Kappel/Alicia L. Kappel 11,764(70) * 11,764 -- *
328 Narrows Trace
Xenia, OH 45385
Leslie Kaser 2,352(71) * 2,352 -- *
806 Appollo Avenue, Box 327
Osborne, KS 67473
Richard J. Kasten 4,705(72) * 4,705 -- *
1705 Clover Drive
Palatine, IL 60067-4637
The Key Group Inc. 28,589(73) * 28,589 -- *
19 Durham Drive
Dix Hills, NY 11746-5310
Lawrence Klein Revocable Living Trust 5,718(74) * 5,718 -- *
1973 West Alex-Bell Road
Dayton, OH 45459
Thomas & Paula Kreusch 14,295(75) * 14,295 -- *
525 Windsor Park Drive
Dayton, OH 45459
Lancer Offshore, Inc. 581,212(76) 12.61 414,546 166,666 2.82
Kaya, Flamboyan 9
P.O. Box 812
Willmstad Curacao
Netherlands Antilles
Lancer Voyager Fund 157,243(77) 3.41 157,243 -- *
Charlotte House
Charlotte Street
Nassau, Bahamas
Brian Scott Larson & Debra Lynn Larson, JT 14,429(78) * 5,882 8,547 *
3890 Davis Canyon Road
San Luis Obispo, CA 93405-8022
Ken Lawson 200(79) * 200 -- *
100 Wall Street, 10th Floor
New York, N.Y. 10005
Gustave L. Levinson 11,764(80) * 11,764 -- *
1200 Merriman Road
Akron, OH 44313
Ronald N. Magruder 23,529(81) * 23,529 -- *
203 Kensington Park
Nashville, TN 37215
James D. Matlock IRA 8,235(82) * 8,235 -- *
6888 Oakwood Grove
Houston, TX 77040
David F. McCartney 5,770(83) * 2,352 3,418 *
P.O. Box 1192
Paris, TN 38242
</TABLE>
- 15 -
<PAGE> 18
<TABLE>
<CAPTION>
SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
NAME AND ADDRESS OF SELLING STOCKHOLDER OWNED PRIOR TO OFFERING AFTER OFFERING
- ---------------------------------------------- -------------------------- SHARES BEING -------------------------
SHARES PERCENT OFFERED(2) NUMBER PERCENT(2)
-------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Martin McCarty, Richman & Wright Co. LPA 7,058(84) * 7,058 -- *
26 North Wright Avenue
Fairborn, OH 45324
Donald B. And Jacqueline M. McCulloch 7,480(85) * 2,352 5,128 *
820 Oakmere Place
North Muskegon, MI 49445
Anthony R. Medici 2,352(86) * 2,352 -- *
37 Remington Drive
Edison, NJ 08070
Norman V. Meintel, IRA 5,718(87) * 5,718 -- *
5184 Pondoray Place
Dayton, OH 45440-2419
John E. Meyer 28,235(88) * 28,235 -- *
2520 Elam Road
Xenia, OH 45385
Patricia L. Meyer 4,705(89) * 4,705 -- *
616 Autumn Creek Drive
Fairborn, OH 45324
MH Capital Partners 21,442(90) * 21,442 -- *
237 Park Avenue, Suite 801
New York, NY 10017
Miami Valley 4,705(91) * 4,705 -- *
Worldwide Inc. 401(k) Pension Plan
P.O. Box 2408
Dayton, OH 45401
Mark Mickley 5,718(92) * 5,718 -- *
812 Country Club Drive
Howard, OH 43028
Rudolph Miles 3,529(93) * 3,529 -- *
3905 Flamingo
El Paso, TX 79902
R. Mike Miller 3,529(94) * 3,529 -- *
28 Chelian Key
Bellew, WA 98006
Steven A. Miller, 4,705(95) * 4,705 -- *
C.E. Liesner TTEE Steven A. Miller &
Cathy E. Liesner Rev. Tr. U/A 3/30/94
5990 Munger Road
Dayton, OH 45459
Thomas P. Morrissey 4,705(96) * 4,705 -- *
236 W. Detweiller Dr.
Peoria, IL 61615
James R. Murphy 5,718(97) * 5,718 -- *
7777 Washington Village Dr., Suite 290
Centerville, OH 45459
</TABLE>
- 16 -
<PAGE> 19
<TABLE>
<CAPTION>
SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
NAME AND ADDRESS OF SELLING STOCKHOLDER OWNED PRIOR TO OFFERING AFTER OFFERING
- ---------------------------------------------- -------------------------- SHARES BEING -------------------------
SHARES PERCENT OFFERED(2) NUMBER PERCENT(2)
-------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Douglas B. Odell 2,352(98) * 2,352 -- *
3 Imperial Landing
Westport, CT 06880
Richard Oh 4,712(99) * 2,712 2,000 *
100 Wall Street, 10th Floor
New York, N.Y. 10005
M. Orlandini 7,148(100) * 7,148 -- *
124 Gregg Parkway
Columbia, SC 29206
Fred Ostad 2,352(101) * 2,352 -- *
320 E. 65th Street, 619
New York, NY 10021
P-G Line, Inc. Corporate Investment 5,882(102) * 5,882 -- *
5154 Wesley Way
Columbus, OH 43214-7502
Vincent Palmieri 5,000(103) * 2,500 2,500 *
100 Wall Street, 10th Floor
New York, N.Y. 10005
Robert G. Paul 9,411(104) * 9,411 -- *
1965 Mornington Lane # 14
Cleveland Heights, OH 44106
Dubuque Bank & Trust Co., TTEE Dubuque 11,058(105) * 11,058 -- *
Orthopaedic Surgeons PC PS FBO James A.
Pearson
15002 West Station Road
East DuBuque, IL 61025
Thomas J. Pedrick Pension Plan 4,705(106) * 4,705 -- *
784 Northbridge Lane
Worthington, OH 43235
S.R. Penn, Jr. 28,858(107) * 11,764 17,094 *
P.O. Box 248
Columbia City, IN 46725
Donald L. Phlipot 10,588(108) * 10,588 -- *
2520 Deep Hollow Lane
Dayton, OH 45419-1305
R & D Investment Partnership, L.P. 115,737(109) 2.46 115,737 -- *
3821 St. Andrews Drive
Fairborn, OH 45324-9718
The R Trust 4,767(110) * 4,767 -- *
45 W. 45th Street, Suite 905
New York, NY 10036
Louis Randle 2,352(111) * 2,352 -- *
P.O. Box 681248
Indianpolis, IN 46268
</TABLE>
- 17 -
<PAGE> 20
<TABLE>
<CAPTION>
SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
NAME AND ADDRESS OF SELLING STOCKHOLDER OWNED PRIOR TO OFFERING AFTER OFFERING
- ---------------------------------------------- -------------------------- SHARES BEING -------------------------
SHARES PERCENT OFFERED(2) NUMBER PERCENT(2)
-------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
David Random 4,705(112) * 4,705 -- *
54-6 Oak Street
Beverly Farms, MA 01915
The Rebecca Trust 2,280(113) * 2,280 -- *
45 W. 45th Street, Suite 905
New York, NY 10036
Michael E. Recca 50,945(114) 1.12 36,176 14,769 *
100 Wall Street, 10th Floor
New York, N.Y. 10005
Karl Reeves 775(115) * 350 425 *
100 Wall Street, 10th Floor
New York, N.Y. 10005
First Trust National Association Trustee 2,352(116) * 2,352 -- *
Dorsey & Whitney Master Trust FBO Rein
P.O. Box 64488
St. Paul, MN 55164
Ronald Reshefsky 4,705(117) * 4,705 -- *
7842 Afton Villa Court
Boca Raton, FL 33433
Aubrey L. Roberts IRA 5,647(118) * 5,647 -- *
P.O. Box 1521
Abilene, TX 79604
Thomas L. Ross 4,941(119) * 4,941 -- *
& Verna A. Ross TTEE FBO The Ross Family
Trust
Route 1, Box 170
Pelkie, MI 49958-9743
Edwin L. Ryan, Jr. Individual Retirement 11,763(120) * 7,058 4,705 *
Account
1974 Woodson Ct.
Dayton, OH 45459
Edwin L. Ryan, Jr. 11,763(121) * 4,705 7,058 *
1974 Woodson Ct.
Dayton, OH 45459
Jeffrey L. Sadar and 2,352(122) * 2,352 -- *
Barbara A. Sadar
6640 Ridgebury Boulevard
Mayfield Heights, OH 44124
Robert Schroeder 6,250(123) * 1,250 5,000 *
100 Wall Street, 10th Floor
New York, N.Y. 10005
Lawrence S. Smith 2,352(124) * 2,352 -- *
273 Dolly Road
Contoocook, NH 03229
William C. Smith Jr. 2,352(125) * 2,352 -- *
17650 A.L. Philpott Highway
Martinsville, VA 24112
</TABLE>
- 18 -
<PAGE> 21
<TABLE>
<CAPTION>
SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
NAME AND ADDRESS OF SELLING STOCKHOLDER OWNED PRIOR TO OFFERING AFTER OFFERING
- ---------------------------------------------- -------------------------- SHARES BEING -------------------------
SHARES PERCENT OFFERED(2) NUMBER PERCENT(2)
-------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
George Souaid 11,064(126) * 11,064 -- *
1111 Crandon Boulevard B 1201
Key Biscayne, FL 33149
Gordon Souaid 5,182(127) * 5,182 -- *
406 Holiday Drive
Hallandale, FL 33009
Robert G. Souaid 21,427(128) * 21,427 -- *
6440 North Bay Road
Miami Beach, FL 33141-4516
MidAm/Investment & Trust Services, Custodian 18,823(129) * 18,823 -- *
For: Spangler Candy & Related Companies
Retirement Plan
400 N. Portland Street
Bryan, OH 43506
Sharon Feldman Stauber 27,583(130) * 19,036 8,547 *
4080 N. 41st Street
Hollywood, FL 33021
Grover, Ciment, Weinstein, Stauber & 119,610(131) 2.47 44,253 75,357 1.28
Friedman, P.A. Money Purchase Pension Plan
and Trust F.B.O. Sherwin Stauber
4607 Meridian Avenue
Miami Beach, FL 33140
Arthur D. Sterling 11,764(132) * 11,764 -- *
3000 Northmoor Trail
Michigan City, IN 46360
MLPF & S Cust. 7,058(133) * 7,058 -- *
FBO Robert R. Strempel IRA
2 Marsh Winds Island
Hilton Head Island, SC 29926
Alice V. Suttman 7,148(134) * 7,148 -- *
6665 Tifton Green Trail
Centerville, OH 45459
Alice V. Suttman IRA 4,705(135) * 4,705 -- *
6665 Tifton Green Trail
Centerville, OH 45459
Dr. Herbert Swerdlow 4,705(136) * 4,705 -- *
15300 SW 81 Avenue
Miami, FL 33157
Eugene Szczepanski 14,429(137) * 5,882 8,547 *
35 Highland Avenue
Worthington, OH 43085
James L. Tadych 11,764(138) * 11,764 -- *
T & C Market
205 N. Main Street
Brillion, WI 54110
Taglich Brothers, D'Amadeo, Wagner & 196,527(139) 4.22 16,939 179,588 3.04
Company, Incorporated
100 Wall Street, 10th Floor
New York, NY 10005
</TABLE>
- 19 -
<PAGE> 22
<TABLE>
<CAPTION>
SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
NAME AND ADDRESS OF SELLING STOCKHOLDER OWNED PRIOR TO OFFERING AFTER OFFERING
- ---------------------------------------------- -------------------------- SHARES BEING -------------------------
SHARES PERCENT OFFERED(2) NUMBER PERCENT(2)
-------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Michael Taglich 88,696(140) 1.91 47,752 40,944 *
100 Wall Street
New York, NY 10005
Michael Taglich IRA 88,696(141) 1.91 6,823 81,873 1.39
100 Wall Street
New York, NY 10005
Robert F. Taglich 88,696(142) 1.91 54,575 34,121 *
100 Wall Street, 10th Floor
New York, NY 10005
Raybourne Thompson, Jr. Personal Portfolio 29,176(143) * 29,176 -- *
1001 Fannin, Suite 3227
Houston, TX 77002-6760
William R. Thompson 6,823(144) * 6,823 -- *
3573 Springdale Drive
Dayton, OH 45419
EMJAY Co. F.B.O. Thuemling Industrial 5,882(145) * 5,882 -- *
Products
P.O. Box 17909
Milwaukee, WI 53217
Arthur M. Toback 5,182(146) * 5,182 -- *
Lakeway Drive
Brewster, NY 10509
Lois A. Vickers 9,176(147) * 9,176 -- *
539 East Washington Street
Chagrin Falls, OH 44022
Milton J. Wallace and 418,007(148) 8.53 5,882 412,125 6.65
Regina T. Wallace, Joint Tenants
2222 Ponce De Leon Blvd, # 600
Coral Gables, FL 33134
Grover, Ciment, Weinstein, Stauber & 113,728(149) 2.44 37,991 75,737 1.28
Friedman, P.A. Money Purchase Pension Plan
and Trust F.B.O. Marvin Weinstein
777 Arthur Godfrey Road, 2nd Floor
Miami Beach, FL 33140
George H. Welsh 8,235(150) * 8,235 -- *
Revocable Living Trust Dtd. 8/1/90 - Trust B
6717 Tifton Green Trail
Centerville, OH 45459-6225
Billy A. West 8,235(151) * 8,235 -- *
Trust Billy A. West Trustee
3841 St. Andrews Drive
Fairborn, OH 45324
Wheat First Butcher Singer, Inc. 12,000(152) * 12,000 -- *
7777 Washington Village Drive, Suite 210
Dayton, OH 45459
</TABLE>
- 20 -
<PAGE> 23
<TABLE>
<CAPTION>
SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
NAME AND ADDRESS OF SELLING STOCKHOLDER OWNED PRIOR TO OFFERING AFTER OFFERING
- ---------------------------------------------- -------------------------- SHARES BEING -------------------------
SHARES PERCENT OFFERED(2) NUMBER PERCENT(2)
-------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Richard Wick 7,148(153) * 7,148 -- *
2306 Ontario Avenue
Dayton, OH 45414
Gem City 7,058(154) * 7,058 -- *
Emergency Associates, Inc. Pension Trust FBO
Craig F. Williams, M.D.
6649 Stamford Place
Centerville, OH 45459
Ann W. Williamson 3,529(155) * 3,529 -- *
P.O. Box 86
Meridan, MS 39302-0086
Retirement Accounts & Co. FBO Stuart H. 11,727(156) * 11,727 -- *
Winston
P.O. Box 173785
Denver, CO 80217-3785
Paul R. Winter 2,352(157) * 2,352 -- *
1910 E. 86th Street
Bloomington, MN 55425
Wolfson Equities 7,930(158) * 7,930 -- *
45 W. 45th Street, Suite 905
New York, NY 10036
Wolfson Family Trust 6,011(159) * 6,011 -- *
45 W. 45th Street, Suite 905
New York, New York 10036
Wolfson Grandchildren Trust 1,658(160) * 1,658 -- *
45 W. 45th Street, Suite 905
New York, NY 10036
Zev W. Wolfson IRA Rollover 10,778(161) * 10,778 -- *
One State Street Plaza
New York, NY 10004
John R. Worthington 9,411(162) * 9,411 -- *
1801 Pennsylvania Avenue, N.W.
Washington, D.C. 20006-3606
EBS Asset Management 528,235(163) 11.01 528,235 -- *
7777 Washington Village Drive, Suite 210
Dayton, OH 45459
</TABLE>
- ----------------------------------------
* Less than one percent.
(1) Based upon 4,628,747 shares of Common Stock outstanding. Each
beneficial owner's percentage is determined by assuming that Series A
Preferred Stock and warrants that are held by such person (but not
those held by any other person) have been converted or exercised,
respectively.
(2) Based upon 5,900,758 shares of Common Stock to be outstanding
assuming that all Series A Preferred Stock and warrants have been
converted or exercised, respectively.
(3) Includes (i) 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; (ii) 5,882 shares of Common Stock
owned by 75 West Phase II, Inc.; (iii) 20,644 shares of Common Stock
owned by Dale and Robert Kaplan Stein and (iv) 6,329 shares of Common
Stock owned by the Dale-Sue Kaplan-Stein IRA.
- 21 -
<PAGE> 24
(4) Includes (i) 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; (ii) 5,882 shares of common stock
owned by 75 West Phase I Partnership; (iii) 20,644 shares of common
stock owned by Dale and Robert Kaplan Stein and (iv) 6,329 shares of
common stock owned by the Dale-Sue Kaplan-Stein IRA.
(5) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(6) Includes (i) 11,764 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock and (ii) 17094 shares underlying 10%
convertible redeemable debentures ("Debentures").
(7) Includes 3,529 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(8) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(9) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(10) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(11) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(12) Includes 3,529 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(13) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(14) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(15) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(16) Includes (i) 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 101 shares of Common Stock
issuable upon exercise of Common Warrants.
(17) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(18) Includes (i) 8,078 shares of Common Stock underlying Series A Warrants;
(ii) 10,840 shares of Common Stock issuable upon exercise of Placement
Warrants; and (iii) 9,231 shares of Common Stock issuable upon exercise
of other warrants.
(19) Includes 201 shares of Common Stock issuable upon exercise of Common
Warrants.
(20) Includes (i) 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and 8,547 shares of common stock
issuable upon conversion of Debentures.
(21) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(22) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(23) Includes 2,006 shares of Common Stock issuable upon exercise of Common
Warrants
(24) Includes 201 shares of Common Stock issuable upon exercise of Common
Warrants
(25) Includes (i) 16,962 shares of Common Stock issuable upon exercise of
Series A Warrants; (ii) 14,527 shares of Common Stock issuable upon
exercise of Placement Warrants; (iii) 4,585 shares of Common Stock
issuable upon exercise of other warrants; and (iv) 16,939 shares of
Common Stock beneficially owned by Taglich Brothers, D'Amadeo and
Company, Incorporated, of which Mr. D'Amadeo is a principal.
(26) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(27) Includes (i) 20,063 shares of Common Stock issuable upon exercise of
Common Warrants; and (ii) 118,803 shares issuable upon conversion of
Debentures.
(28) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(29) Includes (i) 28,235 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 451 shares of Common Stock
issuable upon exercise of Common Warrants.
(30) Includes (i) 80,000 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 1,254 shares of Common
Stock issuable upon exercise of Common Warrants.
- 22 -
<PAGE> 25
(31) Includes 23,529 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(32) Includes 17,647 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(33) Includes 9,411 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(34) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(35) Includes 7,058 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(36) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(37) Includes (i) 11,764 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 17,094 shares of Common
Stock issuable upon conversion of Debentures.
(38) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(39) Includes (i) 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 8,547 shares of Common
Stock issuable upon conversion of Debentures.
(40) Includes 10,588 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(41) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(42) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(43) Includes (i) 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 8,547 shares of Common
Stock issuable upon conversion of Debentures.
(44) Includes 7,058 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(45) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(46) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(47) Includes 251 shares of Common Stock issuable upon exercise of Common
Warrants.
(48) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(49) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(50) Includes (i) 17,646 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 727 shares of Common Stock
issuable upon exercise of Common Warrants.
(51) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(52) Includes 502 shares of Common Stock issuable upon exercise of Common
Warrants.
(53) Includes (i) 23,300 shares of Common Stock issuable upon exercise of
Series A Warrants; (ii) 22,993 shares of Common Stock issuable upon
exercise of Placement Warrants; and (iii) 9,231 shares of Common Stock
issuable upon exercise of other Warrants.
(54) Includes 251 shares of Common Stock issuable upon exercise of Common
Warrants.
(55) Includes 251 shares of Common Stock issuable upon exercise of Common
Warrants.
(56) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(57) Includes 429 shares of Common Stock issuable upon exercise of Common
Warrants.
(58) Includes 1,909 shares of Common Stock issuable upon exercise of Common
Warrants.
(59) Includes 7,058 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(60) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(61) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
- 23 -
<PAGE> 26
(62) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(63) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(64) Includes 23,529 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(65) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(66) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(67) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(68) Includes (i) 11,764 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; (ii) 5,882 shares of Common Stock
owned by 75 West Phase I Partnership; (iii) 5,882 shares of Common
Stock owned by 75 West Phase II, Inc.; and (iv) 6,329 shares of Common
Stock owned by the Dale-Sue Kaplan-Stein IRA.
(69) Includes (i) 6,329 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; (ii) 5,882 shares of Common Stock
owned by 75 West Phase I Partnership; (iii) 5,882 shares of Common
Stock owned by 75 West Phase II, Inc.; and (iv) 20,644 shares of Common
Stock owned by Dale and Robert Kaplan Stein.
(70) Includes 11,764 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(71) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(72) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(73) Includes 1,003 shares of Common Stock issuable upon exercise of Common
Warrants.
(74) Includes 201 shares of Common Stock issuable upon exercise of Common
Warrants.
(75) Includes 502 shares of Common Stock issuable upon exercise of Common
Warrants.
(76) Includes 14,546 shares of Common Stock issuable upon exercise of
Common Warrants.
(77) Includes 5,518 shares of Common Stock issuable upon exercise of Common
Warrants.
(78) Includes (i) 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 8,547 shares of Common
Stock issuable upon conversion of Debentures.
(79) Includes 200 shares of Common Stock issuable upon exercise of Series A
Warrants.
(80) Includes 11,764 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(81) Includes 23,529 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(82) Includes 8,235 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(83) Includes (i) 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 3,418 shares of Common
Stock issuable upon conversion of Debentures.
(84) Includes 7,058 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(85) Includes (i) 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 5,128 shares of Common
Stock issuable upon conversion of Debentures.
(86) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(87) Includes 201 shares of Common Stock issuable upon exercise of Common
Warrants.
(88) Includes 28,235 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(89) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(90) Includes 752 shares of Common Stock issuable upon exercise of Common
Warrants.
(91) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
- 24 -
<PAGE> 27
(92) Includes 201 shares of Common Stock issuable upon exercise of Common
Warrants.
(93) Includes 3,529 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(94) Includes 3,529 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(95) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(96) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(97) Includes 201 shares of Common Stock issuable upon exercise of Common
Warrants.
(98) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(99) Includes (i) 1,212 shares of Common Stock issuable upon exercise of
Series A Warrants; (ii) 1,500 shares of Common Stock issuable upon
exercise of Placement Warrants; and (iii) 2,000 shares of Common Stock
issuable upon exercise of other warrants.
(100) Includes 251 shares of Common Stock issuable upon exercise of Common
Warrants.
(101) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(102) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(103) Includes (i) 1,000 shares of Common Stock issuable upon exercise of
Series A Warrants; (ii) 1,500 shares of Common Stock issuable upon
exercise of Placement Warrants; and (iii) 2,500 shares of Common Stock
issuable upon exercise of other warrants.
(104) Includes 9,411 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(105) Includes 11,058 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(106) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(107) Includes (i) 11,764 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 17,094 shares of Common
Stock issuable upon conversion of Debentures.
(108) Includes 10,588 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(109) Includes (i) 80,000 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 1,254 shares of Common
Stock issuable upon exercise of Common Warrants.
(110) Includes 167 shares of Common Stock issuable upon conversion of
Debentures.
(111) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(112) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(113) Includes 80 shares of Common Stock issuable upon exercise of
Debentures.
(114) Includes (i) 16,078 shares of Common Stock issuable upon exercise of
Series A Warrants; (ii) 20,098 shares of Common Stock issuable upon
exercise of Placement Warrants; and (iii) 14,769 shares of Common Stock
issuable upon exercise of other warrants.
(115) Includes (i) 350 shares of Common Stock issuable upon exercise of
Series A Warrants; and (ii) 4,253 shares of Common Stock issuable upon
exercise of other warrants.
(116) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(117) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(118) Includes 5,647 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(119) Includes 4,941 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(120) Includes (i) 7,058 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 4,705 shares of Common
Stock beneficially by Edwin L. Ryan, Jr.
- 25 -
<PAGE> 28
(121) Includes (i) 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and 7,058 shares of Common Stock
beneficially by Edwin L. Ryan, Jr. Individual Retirement Account.
(122) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(123) Includes (i) 1,250 shares of Common Stock issuable upon exercise of
Placement Warrants; and (ii) 5,000 shares of Common Stock issuable upon
exercise of other warrants.
(124) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(125) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(126) Includes (i) 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 182 shares of Common Stock
issuable upon exercise of Common Warrants.
(127) Includes 182 shares of Common Stock issuable upon exercise of Common
Warrants.
(128) Includes (i) 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 545 shares of Common Stock
issuable upon exercise of Common Warrants.
(129) Includes 18,823 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(130) Includes (i) 11,764 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; (ii) 145 shares of Common Stock
issuable upon exercise of Common Warrants; and (iii) 8,547 shares of
Common Stock issuable upon conversion of Debentures. Ms. Stauber is the
sister-in-law of Daniel A. Stauber, President and Chief Executive
Officer of the Company.
(131) Includes (i) 23,529 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 727 shares of Common Stock
issauble upon exercise of Common Warrants. Mr. Stauber is the father of
Daniel A. Stauber, President and Chief Executive Officer of the
Company.
(132) Includes 11,764 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(133) Includes 7,058 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(134) Includes 251 shares of Common Stock issuable upon exercise of Common
Warrants.
(135) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(136) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(137) Includes (i) 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 8,547 shares of Common
Stock issuable upon conversion of Debentures.
(138) Includes 11,764 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(139) Includes (i) 594 shares of Common Stock issuable upon exercise of
Common Warrants; (ii) 71,757 shares of Common Stock beneficially owned
by Michael Taglich, a principal of such company; (iii) 71,757 shares of
Common Stock beneficially owned by Robert Taglich, a principal of such
company; and (iv) 36,074 shares of Common Stock beneficially owned by
Joseph D'Amadeo, a principal of such company.
(140) Includes (i) 2,588 shares of Common Stock issuable upon conversion of
Shares of Series A Preferred Stock; (ii) 16,962 shares of Common Stock
issuable upon exercise of Series A Warrants; (iii) 14,527 shares of
Common Stock issuable upon exercise of Placement Warrants; (iv) 13,675
shares of Common Stock issuable upon conversion of Debentures; (v)
6,823 shares of Common Stock beneficially owned by Michael Taglich,
IRA; (vi) 16,939 shares of Common Stock beneficially owned by Taglich
Brothers, D'Amedeo, Wagner & Company, Incorporated; and (vii) 17,182
shares of Common Stock issuable upon exercise of other warrants.
(141) Includes (i) 6,823 shares of Common Stock issuable upon conversion of
Series A Preferred Stock; (ii) 64,934 shares of Common Stock
beneficially owned by Michael Taglich, individually; and (iii) 16,939
shares of Common Stock beneficially owned by Taglich Brothers,
D'Amedeo, Wagner & Company, Incorporated.
(142) Includes (i) 9,411 shares of Common Stock issuable upon conversion of
Series A Preferred Stock (ii) 16,962 shares of Common Stock issuable
upon exercise of Series A Warrants; (iii) 14,527 shares of Common Stock
issuable upon exercise of Placement Warrants; (iv) 13,675 shares of
Common Stock
- 26 -
<PAGE> 29
issuable upon conversion of Debentures; (v) 16,939 shares of Common
Stock beneficially owned by Taglich Brothers, D'Amedeo, Wagner &
Company; (vi) 17,182 shares of Common Stock issuable upon exercise of
other warrants.
(143) Includes 29,176 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(144) Includes 6,823 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(145) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(146) Includes 182 shares of Common Stock issuable upon exercise of Common
Warrants.
(147) Includes 9,176 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(148) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; (ii) 9,375 shares of Common Stock
beneficially owned by a corporation of which Mr. Wallace is president,
director and a controlling shareholder; (iii) 2,500 shares owned by his
wife as custodian for a minor child; and (iv) 297,250 shares of Common
Stock issuable upon exercise of options. Mr. Wallace is Chairman of the
Board of the Company.
(149) Includes (i) 17,647 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 727 shares of Common Stock
issuable upon exercise of Common Warrants.
(150) Includes 8,235 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(151) Includes 8,235 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(152) Includes 12,000 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(153) Includes 251 shares of Common Stock issuable upon exercise of Common
Warrants.
(154) Includes 7,058 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(155) Includes 3,529 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(156) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(157) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(158) Includes 278 shares of Common Stock issuable upon exercise of Common
Warrants.
(159) Includes 211 shares of Common Stock issuable upon exercise of Common
Warrants.
(160) Includes 58 shares of Common Stock issuable upon exercise of Common
Warrants.
(161) Includes 378 shares of Common Stock issuable upon exercise of Common
Warrants.
(162) Includes 9,411 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(163) Includes (i) 7,058 shares of Common Stock beneficially owned by
Robert J. Holtgreive; (ii) 80,000 shares of Common Stock beneficially
owned by R&D Investment Partners, LP; (iii) 4,705 shares of Common
Stock beneficially owned by Baker-Hazel Funeral Home; (iv) 4,705 shares
of Common Stock beneficially owned by Baker-Hazel Funeral Home Employee
Pension Plan; (v) 8,235 shares of Common Stock beneficially owned by
Billy A. West Trust; (vi) 80,000 shares of Common Stock beneficially
owned by EBS Partners, LP; (vii) 4,705 shares of Common Stock
beneficially owned by Hilliard Lyons Custodian for Thomas J. Pedrick;
(viii) 8,235 shares of Common Stock beneficially owned by James D.
Matlock IRA; (ix) 29,176 shares of Common Stock beneficially owned
by Raybourne Thompson, Jr.; (x) 5,882 shares of Common Stock
beneficially owned by Gem City Emergency Associates, Inc. Pension Trust
FBO Robert A. Uptmor, M.D.; (xi) 10,588 shares of Common Stock
beneficially owned by Gem City Emergency Associates, Inc. Pension Trust
FBO Richard Coalson, M.D.; (xii) 5,647 shares of Common Stock
beneficially owned by Aubrey L. Roberts IRA; (xiii) 7,058 shares of
Common Stock beneficially owned by Gem City Emergency Associates, Inc.
Pension Trust FBO Craig F. Williams, M.D.; (xiv) 11,764 shares
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of Common Stock beneficially owned by Richard N. Kappel / Alicia L.
Kappel; (xv) 10,588 shares of Common Stock beneficially owned by
Donald L. Phlipot; (xvi) 7,058 shares of Common Stock beneficially
owned by MLPF & S Cust. FBO Robert R. Strempel IRA; (xvii) 5,882
shares of Common Stock beneficially owned by P-G Line Inc. Corporate
Investment; (xviii) 5,882 shares of Common Stock beneficially owned by
Kettering Anesthesia Assoc. P & P/S Retirement Plan FBO Augustus A.
Gullett; (xix) 4,705 shares of Common Stock beneficially owned by
Industrial Grinding Profit Sharing Plan U/A 10/01/84; (xx) 4,705
shares of Common Stock beneficially owned by Edwin L. Ryan, Jr.; (xxi)
12,000 shares of Common Stock beneficially owned by EBS Asset
Management P/S Plan; (xxii) 17,647 shares of Common Stock beneficially
owned by Custodian for John C. Ernst Revocable Trust; (xxiii) 11,058
shares of Common Stock beneficially owned by Dubuque Bank & Trust Co.,
TTEE Dubuque Orthopaedic Surgeons PC PS FBO James A. Pearson; (xxiv)
6,823 shares of Common Stock beneficially owned by William R.
Thompson; (xxv) 9,176 shares of Common Stock beneficially owned by
Custodian for Lois A. Vickers Personal Portfolio; (xxvi) 4,705 shares
of Common Stock beneficially owned by Miami Valley Worldwide Inc.
401(K) Pension Plan; (xxvii) 18,823 shares of Common Stock
beneficially owned by MidAm / Investment & Trust Services Custodian
for Spangler Candy & Related Companies Retirement Plan; (xxviii) 5,882
shares of Common Stock beneficially owned by Francis A. Bonanno;
(xxix) 7,058 shares of Common Stock beneficially owned by John Eubel -
Mutual Fund/Keogh PS Voluntary; (xxx) 4,705 shares of Common Stock
beneficially owned by Alice V. Suttman; (xxxi) 5,882 shares of Common
Stock beneficially owned by Felice M. Kantor; (xxxi) 4,705 shares of
Common Stock beneficially owned by Lawrence K. Jackson & Eileen M.
Jackson Personal Joint Portfolio; (xxxii) 7,058 shares of Common Stock
beneficially owned by Martin, McCarty, Richman & Wright Co. LPA;
(xxxiii) 7,058 shares of Common Stock beneficially owned by Edwin L.
Ryan, Jr.; (xxxiv) 9,411 shares of Common Stock beneficially owned by
Michael E. Ervin, MD; (xxxv) 4,941 shares of Common Stock beneficially
owned by Thomas L. Ross & Verna A. Ross TTEE; (xxxvi) 8,235 shares of
Common Stock beneficially owned by George H. Welsh Revocable Living
Trust Dtd. 8/1/90 - Trust B; (xxxvii) 5,882 shares of Common Stock
beneficially owned by Dr. Neil Kanto IRA Rollover; (xxxviii) 28,235
shares of Common Stock beneficially owned by John E. Meyer; (xxxix)
4,705 shares of Common Stock beneficially owned by Steven A. Miller,
C.E. Liesner TTEE Steven A. Miller & Cathy E. Liesner Rev. Tr. U/A
3/30/94; (xl) 4,705 shares of Common Stock beneficially owned by
Patricia L. Meyer; (xli) 28,235 shares of Common Stock beneficially
owned by EBS Microcap Partners, L.P.; and (xlii) 4,705 shares of
Common Stock beneficially owned by Robert Colaizzi.
The number of shares of Common Stock which may actually be sold by the
Selling Stockholders will be determined from time to time by them and will
depend upon a number of factors, including the price of the shares from time to
time. Because the Selling Stockholders may offer all or none of the shares that
they hold and because the offering contemplated by this Prospectus is not being
underwritten, no estimate can be given as to the number of shares that will be
held by the Selling Stockholders.
There are no material relationships between any of the Selling
Stockholders and the Company or any of its predecessors or affiliates, nor have
any such material relationships existed within the past three (3) years, except
as indicated in the footnotes above.
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DESCRIPTION OF SECURITIES
The Company has 26,000,000 shares of authorized Common Stock, par value
$0.001 per share, of which 4,628,747 shares of Common Stock are issued and
outstanding, and 4,000,000 shares of preferred stock, of which 42,969 shares of
Series A Preferred Stock are outstanding. Assuming the conversion of all shares
of Series A Preferred Stock and exercise of the warrants, the Company would have
5,900,758 shares of Common Stock outstanding.
COMMON STOCK. Each share of Common Stock is entitled to one vote either
in person or by proxy in all matters that can be voted upon by the holders
thereof at any and all meetings of the stockholders. The holders of Common Stock
(i) have equal ratable rights to dividends from funds legally available
therefore when, as and if declared by the Board of Directors of the Company;
(ii) are entitled to share ratably in all of the assets of the Company available
for distribution to holders of Common Stock upon liquidation, dissolution or
winding up of the affairs of the Company, after the satisfaction of all
liabilities of the Company any liquidation preference granted to the holders of
any class of Preferred Stock then outstanding, if any; (iii) do not have any
preemptive, subscriptive or conversion rights; and (iv) do not have any
redemption or sinking fund provisions applicable thereto.
The Certificate of Incorporation does not provide for cumulative
voting. Therefore, stockholders do not have the right to aggregate their votes
for the election of directors and, accordingly, stockholders holding more than
50% of the shares of Common Stock outstanding can elect all of the directors.
PREFERRED STOCK. The Company is authorized to issue 4,000,000 shares of
preferred stock, without designation, par value $.01 per share. The certificate
of incorporation grants the board of directors the right to cause the Company to
issue, from time to time, all or part of the preferred shares remaining
undesignated in one or more series, and to fix the number of shares of preferred
stock and determine or alter for each series, the voting powers, full, limited,
or none, and other designations, preferences, or relative, participating,
optional or other special rights and such qualifications, limitations, or
restrictions thereof.
SERIES A PREFERRED STOCK
GENERAL. The Series A Preferred Stock has been authorized as a series
consisting of 60,000 shares, of which 42,969 shares are presently outstanding.
DIVIDENDS. Holders of the Series A Preferred Stock are entitled to
cumulative preferential dividends payable quarterly in cash on April 1, July 1,
October 1 and January 2 of each year at the rate of $9.00 per share per annum.
Through and including July 1, 1998 (the "Initial Period"), the Company has the
option to pay such dividends in cash or in shares of Series A Preferred Stock.
The shares of Series A Preferred Stock payable as dividends during the Initial
Period will be valued at $100.00, except that if the average closing price of
the Common Stock for the twenty (20) consecutive trading day period ending five
(5) days (the "Market Price") prior to the dividend record date is less than the
Conversion Price, as defined below, the value shall equal the Market Price times
the quotient of (i)$100.00 and (ii) the Conversion Price. Thereafter, dividends
are payable in cash, except that if the Company is unable to pay cash dividends,
it shall pay dividends in shares of Series A Preferred Stock with a value equal
to 80% of the lesser of (a) $100.00 or (b) the Market Price times the quotient
of (i) $100.00 and (ii) the Conversion Price. Whenever dividends are paid in
shares of Series A Preferred Stock, the Company shall not issue fractional
shares of Series A Preferred Stock, such fractional amount being payable in
cash. Commencing July 1, 2000, the annual dividend rate will increase by $2.50
per quarter up to a maximum dividend of $24.00 per annum (i.e., the October 1,
2000 quarterly dividend shall have a cumulative amount of $11.50 per annum.
VOTING RIGHTS. The holders of the Series A Preferred Stock are entitled
to vote, on all matters in which holders of Common Stock are entitled to vote,
voting together with the Common Stock without regard to class. The holders of
the Series A Preferred Stock have the number of votes that they would have had
assuming conversion of the Series A Preferred Stock into Common Stock as of the
record date for the meeting of the Company's shareholders. The holders of the
Series A Preferred Stock are entitled to receive all communications sent by the
Company to the holders of Common Stock. The holders of Series A Preferred Stock
are entitled to vote as a separate class on the issuance of any class of equity
securities which ranks equal
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to or senior to the Series A Preferred Stock, or to change or repeal any of the
express terms of the Series A Preferred Stock. When voting as a separate class,
the affirmative vote of not less than two-thirds of the outstanding shares of
Series A Preferred Stock are required for approval of such matters.
LIQUIDATION. On any liquidation, dissolution, or winding up of the
Company, after payment of all creditors of the Company, the holders of Series A
Preferred Stock have the right to receive out of the remaining assets of the
Company, before the holders of any other equity interest in the Company are
entitled to receive anything, the sum of $100.00 per share, plus any accrued and
unpaid dividends.
VOLUNTARY CONVERSION. Each share of Series A Preferred Stock is
convertible at each holder's option into shares of Common Stock, at any time
prior to the effective date of the forced conversion or redemption at the
conversion rate of $4.25 per share, subject to adjustment (the "Conversion
Price"). The Conversion Price is protected against dilution by adjustment of the
conversion rate upon the occurrence of certain events, such as stock dividends
and distributions, stock splits, recapitalization, mergers, consolidations and
the issuance of Common Stock, or options or rights to subscribe for securities
convertible into or exchangeable for Common Stock. The Company will not issue
fractional shares of Common Stock upon conversion of the Series A Preferred
Stock but will pay a cash adjustment for any such fraction. In the event of a
merger, consolidation or sale of all or substantially all of the assets of the
Company, the holders of the Series A Preferred Stock shall have a right to
convert into shares of Common Stock immediately prior to the change of control
at a price equal to the lesser of (i) the Conversion Price or (ii) the price per
share of Common Stock in the change of control transaction.
FORCED CONVERSION. The Company has the right to force conversion of the
Series A Preferred Stock into shares of Common Stock at any time after issuance
of the Series A Preferred Stock, provided that on the day that notice of forced
conversion is given and on the Forced Conversion Date (as defined below) the
following conditions are satisfied: (i) the underlying Common Stock has been
registered pursuant to the Act and such registration is then currently
effective; and (ii) the average of the closing bid price of the Common Stock as
listed on the National Association of Security Dealers Automated Quotation
System ("NASDAQ"), the New York Stock Exchange ("NYSE"), the American Stock
Exchange ("ASE") or wherever the Company's Common Stock then trades, is at least
175% of the Conversion Price for twenty (20) trading days within a thirty (30)
consecutive trading day period. Any notice of forced conversion must be given to
all holders no less than thirty (30) days nor more than forty-five (45) days
prior to the date set forth for conversion (the "Forced Conversion Date"). On
the Forced Conversion Date, the Company shall pay to all registered holders of
Series A Preferred Stock all accrued and unpaid dividends through and including
the Forced Conversion Date.
REDEMPTION. The Company has the right to redeem all of the shares of
Series A Preferred Stock commencing thirty (30) months after the Final Closing
Date, upon thirty (30) days notice at a price of $100.00 per share, plus accrued
and unpaid cumulative dividends to the date of redemption. Holders of Series A
Preferred Stock called for redemption may exercise their right to convert any or
all such shares into Common Stock at any time prior to the close of business on
the day set for redemption of such shares. After the redemption date, such
holders' right to convert their shares of Series A Preferred Stock called for
redemption will cease and such holders will be entitled only to the redemption
price of such shares.
WARRANTS.
In connection with the private placement of the Series A Preferred
Stock, the Company issued Series A Warrants to purchase 101,104 shares of Common
Stock exercisable until October 31, 2002 at an initial exercise price of $4.25
per share to the placement agent of the private placement conducted in October
1997. The Series A Warrant exercise price is subject to certain adjustment
provisions as described below. The placement agent distributed the Series A
Warrants to various employees and agents of the placement agent.
In connection with a private placement of Common Stock, the Company
issued an aggregate of 58,185 Common Warrants to the purchasers of such Common
Stock. Each Common Warrant entitles the holder to purchase one share of common
stock at an exercise price of $3.625 per share until December 8, 2002. In
connection with the private placement of Common Stock, the Company issued
Placement Warrants to purchase 101,762 shares of Common Stock. Of the Placement
Warrants, 70,180 Placement Warrants each
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entitle the holder to purchase one (1) share of Common Stock at an exercise
price of $5.00 per share until November 6, 2002 and 31,582 Placement Warrants
each entitle the holder to purchase one (1) share of Common Stock at $4.50 per
share until December 8, 2002. The warrant exercise price is subject to certain
adjustment provisions as described below. The placement agent distributed the
warrants to various employees and agents of the placement agent.
The Company is not required to issue fractional shares upon exercise of
any warrants, but may make cash payments thereof, based on the then market price
of the Common Stock. No holder of any warrants will be entitled to vote, receive
dividends, or be deemed the holder of the Common Stock until such time as the
warrants shall have been duly exercised and payment of the purchase price shall
have been made. Shares of Common Stock issued upon the exercise of the warrants
and on payment of the purchase price will be legally issued, fully paid and
non-assessable.
The warrants are subject to equitable adjustment upon certain events,
which include (i) the issuance of Common Stock as a dividend on the outstanding
Common Stock; (ii) subdivisions, combinations, and reclassifications of Common
Stock; (iii) mergers, consolidations and similar events; (iv) the issuance of
Common Stock for a price less than the lesser of the market price of the Common
Stock or the exercise price of the Warrants. The holders of the warrants have
certain demand and piggy-back registration rights as described below.
REGISTRATION RIGHTS. The Company has agreed to prepare and file with
the SEC a registration statement (the "Registration Statement") on the
appropriate form under the Act, with respect to the shares of Common Stock
issued or issuable upon conversion of the Series A Preferred Stock, as well as
the shares of Common Stock issuable upon the exercise of the Series A Warrants
by December 31, 1997. The Company will use its best efforts to have the
Registration Statement become effective and to keep such Registration Statement
effective for a period of three (3) years following December 31, 1997. If the
Registration Statement is not filed within sixty (60) days or is not declared
effective by February 28. 1998, the Conversion Price shall be reduced (and
concomitantly the number of shares of Common Stock issuable upon conversion or
exercise of the Series A Preferred Stock and Series A Warrants, respectively
shall increase) by two (2%) percent for each month, or any part thereof, beyond
the respective periods, as applicable, until the Registration Statement is filed
or declared effective. Holders of Series A Preferred Stock also have certain
"piggy-back" registration rights regarding the underlying Common Stock, subject
to certain restrictions.
The Company agreed to register the shares of Common Stock issued in the
private placement completed on December 8, 1997, as well as the shares of Common
Stock issuable upon the exercise of the Common Warrants and Placement Warrants
pursuant to the Act by December 21, 1997. If such Registration Statement was not
declared effective by March 21, 1998, the holders of such Common Stock shall be
entitled to receive an additional five (5%) shares for each month, or any part
thereof, beyond the respective periods. The Company agreed to pay all costs of
registration.
CERTAIN ANTI-TAKEOVER PROVISION
Certain provisions of the Company's charter and by-laws, as well as
certain provisions of Delaware law, could have the effect of deterring
takeovers. The Board of Directors believes that the provisions of the Company's
charter and by-laws described below are prudent and in the best interests of the
Company and its stockholders. Although these provisions may discourage a future
takeover attempt in which stockholders might receive a premium for their shares
over the then current market price and may make removal of incumbent management
more difficult, the Board of Directors believes that the benefits of these
provisions outweigh their possible disadvantages. Management is not aware of any
current effort to effect a change in control of the Company.
Section 203 of the Delaware General Corporation Law ("Section 203")
restricts certain transactions between a corporation organized under Delaware
law (or its majority-owned subsidiaries) and any person holding fifteen percent
(15%) or more of the corporation's outstanding voting stock, together with the
affiliates or associates of such person (an "Interested Stockholder"). Section
203 prevents, for a period of three (3) years following the date that a person
becomes an Interested Stockholder, the following types of transaction
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("Business Combinations") between the corporation and the Interested Stockholder
(unless certain conditions, described below, are met): (a) mergers or
consolidations, (b) sales, leases, exchanges or other transfers of ten percent
(10%) or more of the aggregate assets of the corporation, (c) issuance or
transfers by the corporation of any stock of the corporation which would have
the effect of increasing the Interested Stockholder's proportionate share of the
stock of any class or series of the corporation, (d) any other transaction which
has the effect of increasing the proportionate share of the stock of any class
or series of the corporation which is owned by the Interested Stockholder, and
(e) receipt by the Interested Stockholder of the benefit (except proportionately
as a stockholder) of loans, advances, guarantees, pledges or other financial
benefits provided by the corporation.
The three-year ban does not apply if either the proposed transaction or
the transaction by which the Interested Stockholder became an Interested
Stockholder is approved by the Board of Directors of the corporation prior to
the date such stockholder became an Interested Stockholder. Additionally, an
Interested Stockholder may avoid the statutory restriction if, upon the
consummation of the transaction whereby such stockholder became an Interested
Stockholder, the stockholder owns at least 855 of the outstanding voting stock
of the corporation without regard to those shares owned by the corporation's
officers and directors or certain employee stock plans. In addition, any
transaction is exempt from the statutory ban if it is proposed at a time when
the corporation has proposed, and a majority of certain continuing directors of
the corporation have approved, a transaction with a party who is not an
Interested Stockholder of the corporation (or who becomes such with board
approval) if the proposed transaction involves (a) certain merger or
consolidations involving the corporation, (b) a sale or other transfer of over
fifty percent (50%) of the aggregate assets of the corporation, or (c) a tender
or exchange offer for fifty percent (50%) or more of the outstanding voting
stock of the corporation.
A corporation may, at its option, exclude itself from the coverage of
Section 203 by amending its charter or by-laws by action of its stockholders to
exempt itself from coverage, provided that such by-law or charter amendment
shall not become effective until twelve (12) months after the date it is
adopted. The Company has not adopted such a charter or by-law amendment.
Included in the rights of any series of preferred stock which may be
set by the Board of Directors may be voting rights, if any. It is possible that
the Board of Directors could authorized and issue to persons, including existing
management, a series of preferred stock with class voting rights which might
have the effect of discouraging a takeover attempt or a tender offer. Any such
issuance would have to be made for a valid business purpose and for adequate
consideration from the recipient of the preferred stock.
The Company's by-laws contain provisions relating to notice of
stockholder meetings which would prohibit a stockholder from nominating a person
for the Board of Directors or proposing certain actions relating to the
Company's business without advance written notice to the Company. Such written
notice must be a minimum of thirty (30) days prior to a stockholders' meeting
and must contain specific information about the nominee and the stockholder who
makes such nomination or proposal.
DIVIDEND POLICY. The Company has never paid any cash dividends on its
Common Stock and does not anticipate paying cash dividends in the foreseeable
future. The payment of dividends by the Company will depend on its earnings,
financial condition, and other business and economic factors affecting the
Company at that time as the Board of Directors may consider relevant. The
Company currently intends to retain any earnings to provide for the development
and growth of the Company.
TRANSFER AGENT. The Transfer Agent for the Common Stock is Continental
Stock Transfer and Trust Company, 2 Broadway, New York, New York.
INDEMNIFICATION
DELAWARE GENERAL CORPORATION LAW. Section 145 of the Delaware General
Corporation Law ("GCL") empowers a corporation to indemnify a director, officer,
employee, or agent who is, or is threatened to be, made a party to any
threatened, pending, or completed action, suit or proceeding, whether civil,
criminal, administrative, or investigative by reason of the fact that he is or
was a director, officer, employee, or agent
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of the corporation or is, or was, serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise (including an employee benefit plan),
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlements actually and reasonably incurred by him in connection with such
action, suit, or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
No indemnification may be made in respect to any claim, issue, or
matter brought by or in the right of the corporation as to which such person
shall have been adjudged to be liable for negligence or misconduct in the
performance of his duty to the corporation unless and only to the extent that
the Court of Chancery of the State of Delaware or the court in which such action
or suit was brought shall determine that, despite the adjudication of liability
but in view of all of the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the court shall deem
proper.
The indemnification provided in Section 145 is not exclusive of any
other right of indemnification. A corporation is empowered to purchase and
maintain insurance on behalf of such persons against any liability asserted
against them in such capacities, whether or not the corporation would have the
right to indemnification against such liabilities under Section 145.
Subsection (b)(7) of Section 102 of the GCL empowers a corporation to
eliminate or limit the personal liability of a director to such corporation or
its stockholders for monetary damages for breach of fiduciary duty as a director
other than (i) for any breach of a director's duty of loyalty to the corporation
or its stockholders; (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law;(iii) under Section
174 of the GCL (which provides that under certain circumstances directors shall
be jointly and severally liable for willful or negligent violations of
provisions regarding the unlawful payment of dividends or unlawful stock
repurchases or redemptions; or (iv) for any transaction from which the director
derived an improper personal benefit.
CHARTER. Article NINTH of the Company's Charter has adopted the
provisions of GCL Section 102(b)(7). Article TENTH of the Company's Charter
provides that the Company shall indemnify all persons entitled to be indemnified
by GCL 145, including officers and directors, to the fullest extent permitted by
such statute.
SECURITIES AND EXCHANGE COMMISSION POLICY. Insofar as indemnification
for liabilities arising under the Securities Act of 1933, as amended, may be
permitted to directors, officers and controlling persons of the Company, the
Company has been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
PLAN OF DISTRIBUTION
This Prospectus, as appropriately amended or supplemented from time to
time may be used from time to time by the Selling Stockholders, or their
transferees, to offer and sell the Common Stock in transactions in which the
Selling Stockholders and any broker-dealer through whom any of the shares of
Common Stock are sold may be deemed to be underwriters within the meaning of the
Securities Act. The Company will receive none of the proceeds from any such
sales. The Company would receive an aggregate of $1,133,631 in gross proceeds if
all warrants are exercised. There presently are no arrangements or
understandings, formal or informal, pertaining to the distribution of the Common
Stock.
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<PAGE> 36
The Company anticipates that resales of the Common Stock by the Selling
Stockholders will be effected from time to time on the open market in ordinary
brokerage transactions on the NASDAQ-Small Cap Market ("NASDAQ"), on which the
Common Stock is included for quotation, in the over-the-counter market, or in
private transactions (which may involve block transactions). The Common Stock
will be offered for sale at market prices prevailing at the time of sale or at
negotiated prices and on terms to be determined when the agreement to sell is
made or at the time of sale, as the case may be. The Common Stock may be offered
directly, through agents designated from time to time, or through brokers or
dealers. A member firm of the NASD may be engaged to act as a Selling
Stockholder's agent in the sale of the Common Stock by a Selling Stockholder
and/or may acquire Common Stock as principal. Member firms participating in such
transactions as agent may receive commissions from Selling Stockholders (and, if
they act as agent for the purchaser of such Common Stock, from such purchaser),
such commissions computed in appropriate cases in accordance with the applicable
rates of the NASDAQ, which commissions may be at negotiated rates where
permissible. Sales of the Common Stock by the member firm may be made on the
NASDAQ from time to time at prices related to prices then prevailing. Any such
sales may be by block trade.
Participating broker-dealers may agree with Selling Stockholders to
sell a specified number of shares at a stipulated price per share and, to the
extent such broker dealer is unable to do so acting as agent for the Selling
Stockholder to purchase as principal any unsold shares at the price required to
fulfill the broker-dealer's commitment to the Selling Stockholder. In addition
or alternatively, Common Stock may be sold by the Selling Stockholders, and/or
by or through the broker-dealers in special offerings, exchange distributions,
or secondary distributions pursuant to and in compliance with the governing
rules of the NASDAQ, and in connection therewith commissions in excess of the
customary commission prescribed by the rules of such securities exchange may be
paid to participating broker-dealers, or, in the case of certain secondary
distributions, a discount or concession from the offering price may be allowed
to participating broker-dealers in excess of such customary commission.
Broker-dealers who acquire Common Stock as principal may thereafter resell such
Common Stock from time to time in transactions (which may involve cross and
block transactions and which may involve sales to and through other
broker-dealers, including transactions of the nature described in the preceding
two sentences) on the NASDAQ, in negotiated transactions, or otherwise, at
market prices prevailing at the time of sale or at negotiated prices, and in
connection with such resales may pay to or receive commissions from the
purchasers of such shares. Upon the Company's being notified by a Selling
Stockholder that a particular offer to sell the Common Stock is made, a material
arrangement has been entered into with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution, or secondary
distribution, or any block trade has taken place, to the extent required, a
supplement to this Prospectus will be delivered together with this Prospectus
and filed pursuant to Rule 424(b) under the Securities Act setting forth with
respect to such offer or trade the terms of the offer or trade; including (i)
the number of Common Stock involved, (ii) the price at which the Common Stock
were sold, (iii) any participating brokers, dealers, agents or member firm
involved, (iv) any discounts, commissions and other items paid as compensation
from, and the resulting net proceeds to, the Selling Stockholder, (v) that such
broker-dealers did not conduct any investigation to verify the information set
out in this Prospectus, and (vi) other facts material to the transaction.
Shares of Common Stock may be sold directly by the Selling Stockholders
or through agents designated by the Selling Stockholders from time to time.
Unless otherwise indicated in the supplement to this Prospectus, any such agent
will be acting on a best efforts basis for the period of its appointment.
The Selling Stockholders and any brokers, dealers, agents, member firm
or others that participate with the Selling Stockholders in the distribution of
the Common Stock may be deemed to be "underwriters" within the meaning of the
Securities Act, and any commissions or fees received by such persons and any
profit on the resale of the Common Stock purchased by such person may be deemed
to be underwriting commissions or discounts under the Securities Act.
The Selling Stockholders will be subject to the applicable provisions
of the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, including without limitation Regulation M, which
provisions may limit the timing of purchases and sales of any of the Common
Stock by the Selling Stockholders. All of the foregoing may affect the
marketability of the Common Stock.
- 34 -
<PAGE> 37
The Company will pay substantially all the expenses incident to this
offering of the Common Stock by the Selling Stockholder to the public other than
brokerage fees, commissions and discounts of underwriters, dealers or agents.
In order to comply with certain states' securities laws, if applicable,
the Common Stock will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In addition, in certain states the Common Stock may
not be sold unless the Common Stock has been registered or qualified for sale in
such state or an exemption from registration or qualification is available and
the Company or Selling Stockholders comply with the applicable requirements.
LEGAL MATTERS
The validity of the Common Stock offered by this Prospectus has been
passed upon by Wallace, Bauman, Fodiman & Shannon, P.A., Coral Gables, Florida.
Milton J. Wallace a shareholder of the law firm, beneficially owns 418,007
shares of the Company's Common Stock, including 5,882 shares of Common Stock
underlying Series A Preferred Stock. Other shareholders of such law firm
beneficially own an aggregate of 22,816 shares of Common Stock.
EXPERTS
The consolidated financial statements included in the Company's Annual
Report on Form 10-KSB for the Year ended December 31, 1996 incorporated by
reference in this Prospectus have been audited by BDO Seidman, LLP, independent
certified public accountants to the extent and for the periods set forth in
their report incorporated herein by reference, and are incorporated herein in
reliance upon such report given upon the authority of said firm as experts in
auditing and accounting.
- 35 -
<PAGE> 38
<TABLE>
<CAPTION>
<S> <C>
- -------------------------------------------------- -------------------------------------------
No dealer, salesman or other person has been
authorized to give any information or to make any
representations other than those contained or
incorporated by reference in this Prospectus, and
if given or made, such information or
representations must not be relied upon as having
been authorized by the Company. Neither the MED/WASTE, INC.
delivery of this Prospectus nor any sale made
hereunder shall under any circumstances create
any implication that there has been no change in
the affairs of the Company since the date hereof.
This Prospectus does not constitute an offer or ---------------------
solicitation by anyone in any jurisdiction in which
the person making such offer or solicitation is not PROSPECTUS
qualified to do so or to anyone whom it is
unlawful to make such offer or solicitation. ---------------------
2,872,013
Shares of
COMMON STOCK
($.001 par value)
TABLE OF CONTENTS
PAGE
-----
AVAILABLE INFORMATION...........................2
FORWARD-LOOKING STATEMENTS......................2
DOCUMENTS INCORPORATED BY REFERENCE.............3
THE COMPANY.....................................4
RISK FACTORS....................................5
USE OF PROCEEDS.................................8
MATERIAL EVENTS.................................9
SELLING STOCKHOLDERS...........................10
DESCRIPTION OF SECURITIES......................29 __________, 1997
INDEMNIFICATION................................32
PLAN OF DISTRIBUTION...........................33
LEGAL MATTERS..................................35
EXPERTS........................................35
- -------------------------------------------------- -------------------------------------------
</TABLE>
<PAGE> 39
Part II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF INSURANCE AND DISTRIBUTION
The following sets forth the estimated expenses and costs in connection
with the issuance and distribution of securities being registered hereby. All
such expenses will be borne by the Company.
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission Registration Fee................... $ 4,298.00
Accounting Fees and Expenses.......................................... 2,000.00*
Legal Fees and Expenses............................................... 10,000.00*
Printing expenses..................................................... 2,000.00
Miscellaneous......................................................... 1,702.00*
----------
Total................................................................. $20,000.00
==========
</TABLE>
- ---------------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article TENTH of the Company's Certificate of Incorporation
provides for indemnification of the Company's officers and directors to the
fullest extent permitted by Section 145 of the Delaware General Corporation Law
(the "DGCL"). Section 145 of the DGCL provides for indemnification of directors
and officers from and against expenses (including attorney's fees), judgments,
fines and amounts paid in settlement reasonably incurred by them in connection
with any civil, criminal, administrative or investigative claim or proceeding
(including civil actions brought as derivative actions by or in the right of the
corporation but only to the extent of expenses reasonably incurred in defending
or settling such action) in which they may become involved by reason of being a
director or officer of the corporation if the director or officer acted in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interest of the corporation and, in addition, in criminal actions, if
he had no reasonable cause to believe his conduct to be unlawful. If, in an
action brought by or in the right of the corporation, the director or officer is
adjudged to be liable for negligence or misconduct in the performance of his
duty, he will only be entitled to this indemnity as the court finds to be
proper. Persons who are successful in defense of any claim against them are
entitled to indemnification as of right against expenses actually and reasonably
incurred in connection therewith. In all other cases, indemnification shall be
made (unless otherwise ordered by a court) only if the board of directors,
acting by a majority vote of a quorum of disinterested directors, independent
legal counsel or holders of a majority of the shares entitled to vote,
determines that the applicable standard of conduct has been met. Section 145
also provides this indemnity for directors and officers of a corporation who, at
the request of the corporation, act as directors, officers, employees or agents
of other corporations, partnerships or other enterprises.
Article NINTH of the Company's Certificate of Incorporation
limits the liability of the Company's directors to the Company or its
stockholders to the fullest extent permitted by the DGCL. Section 102(b)(7) of
the DGCL provides that personal monetary liabilities of a director for breaches
of his fiduciary duties as a director may not be eliminated with regard to any
breach of the duty of loyalty, failing to act in good faith, intentional
misconduct or knowing violation of law, payment of an unlawful dividend,
approval of an illegal stock repurchase, or obtainment of an improper personal
benefit. Such a provision has no affect on the availability of equitable
remedies, such as an injunction or recision, for breach of fiduciary duty.
The employment agreements of certain officers contain a provision
requiring indemnification of such officer to the fullest extent permitted by
law.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted for directors, officers and controlling persons
of the Company pursuant to the foregoing, or otherwise, the Company has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for
(i)
<PAGE> 40
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of the
Company in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
Certain of the following exhibits are filed herein and certain others,
designated by an asterisk (*) were previously filed in the registration
statement.
EXHIBIT NO. DESCRIPTION
- ----------- -----------
4.1 Form of 9% Convertible Redeemable Series A Preferred Stock
4.2 Form of Series A Warrant
4.3 Forms of Common Warrant
4.4 Form of Placement Warrant
5 Opinion of Wallace, Bauman, Fodiman & Shannon, P.A., regarding
the legality of the Common Stock.
23.1 Consent of BDO Seidman, LLP
23.2 Consent of Wallace, Bauman, Fodiman & Shannon, P.A.(included in
Exhibit 5 above).
24 Power of Attorney (included on signature page of registration
statement).
ITEM 17. UNDERTAKINGS.
(a) The Registrant hereby undertakes:
(1) To file, during any period in which offers
or sales are being made, a post-effective
amendment to this registration statement:
(i) To include any prospectus required
by Section 10(a)(3) of the Act;
(ii) To reflect in the prospectus any
facts or events arising after the
effective date of the registration
statement (or the most recent
post-effective amendment thereof)
which, individually or in the
aggregate, represent a fundamental
change in the information set forth
in the registration statement; and
(iii) To include any material information
with respect to the plan of
distribution not previously disclosed
in the registration statement or any
material change to such information in
the registration statement;
Provided, however, that Paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply
if the information required to the included in a post-effective amendment by
those Paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Securities and Exchange Act of
1934, as amended (the "Exchange Act"), that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any
liability under the Act, each such post-effective
amendment shall be deemed to be a new
registration statement
(ii)
<PAGE> 41
relating to the securities offered therein, and
the offering of such securities at that time
shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities
being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Act, each
filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in the
registration statement shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising
under the Act may be permitted to directors, officers
and controlling persons of the registrant has been
advised that in the opinion of the Securities and
Exchange Commission such indemnification is against
public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other
than the payment by the registrant of expenses
incurred or paid by a director, officer or
controlling person of the registrant in the
successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling
person in connection with the securities being
registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as
expressed in the Act and will be governed by the
final adjudication of such issue.
(iii)
<PAGE> 42
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 1 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Miami Lakes, State of
Florida, on the 18th day of December, 1997.
MED/WASTE, INC., a Delaware corporation
By: /s/ Daniel A. Stauber
-----------------------------------
DANIEL A. STAUBER
President/Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following person in the capacities and
on the dates indicated.
POWER OF ATTORNEY
We, the undersigned, do hereby severally constitute and appoint
DANIEL A. STAUBER and MICHAEL D. ELKIN, and each or either of time, our true and
lawful attorneys and agents, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments or post-effective amendments to this Registration Statement
(including post-effective amendments or any abbreviated registration statement,
and any amendments thereto, filed pursuant to Rule 462(b) increasing the amount
of securities for which registration is being sought), and to file the same with
all exhibits thereto, and all other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys and agents, and
each of either of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys and agents, and each of them, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ---------- ----- ----
<S> <C> <C>
/s/ Milton J. Wallace Chairman December 18, 1997
- ------------------------------------
Milton J. Wallace
/s/ Daniel A. Stauber Director, President and Chief Executive December 18, 1997
- ------------------------------------ Officer
Daniel A. Stauber
/s/ Michael D. Elkin Vice President and Chief Financial Officer December 18, 1997
- ------------------------------------
Michael D. Elkin
/s/ William F. Bonham Director December 18, 1997
- ------------------------------------
William F. Bonham
/s/ Richard R. Green Director December 18, 1997
- ------------------------------------
Richard R. Green
/s/ Phillip W. Kubec Director December 18, 1997
- ------------------------------------
Phillip W. Kubec
/s/ Kendrick Meek Director December 18, 1997
- ------------------------------------
Kendrick Meek
/s/ Arthur Shapiro Director December 18, 1997
- ------------------------------------
Arthur G. Shapiro, M.D.
Director December __, 1997
- ------------------------------------
William Dolan, D.D.S.
</TABLE>
(iv)
<PAGE> 1
Exhibit 4.1
CERTIFICATE
OF
MED/WASTE, INC.
I, the undersigned, DANIEL A. STAUBER, as President of MED/WASTE,
INC., a corporation organized and existing under the laws of the State of
Delaware (hereinafter referred to as the "Corporation") hereby certify and
affirm the following:
1. The name of the Corporation is MED/WASTE, INC.
2. The Board of Directors, pursuant to Section 151 of the
Delaware General Corporation laws adopted a resolution
establishing the Designation, Preferences Limitations,
and relative Rights of the Series A Preferred Stock,
Callable, Convertible Series as set forth on Exhibit "A"
attached hereto.
3. The foregoing resolution was adopted by the Board of
Directors in accordance with ss. 151 of the Delaware
General Corporation Laws and shall become effective and
constitutes an amendment to the Corporation's Certificate
of Incorporation upon the proper filing of this
instrument with the Delaware Secretary of State.
4. Shareholder approval is not required pursuant to the
Delaware General Corporation Laws.
IN WITNESS WHEREOF, the undersigned has execute this Certificate
of MED/WASTE, INC., this 26th day of September, 1997.
MED/WASTE, INC., a Delaware corporation
By: /s/ Daniel A. Stauber
-------------------------------------
DANIEL A. STAUBER, President
I CERTIFY, that DANIEL A. STAUBER, personally known to me to be
the same persons whose names are subscribed to the foregoing instrument, this
day personally appeared before me as the President of MED/WASTE, INC., and he
acknowledged that he has executed the foregoing instrument fully and voluntarily
for the use and purpose therein expressed.
SWORN TO AND SUBSCRIBED before me this 26th day of September,
1997.
My Commission Expires:
August 4, 2001
/s/ Bryan W. Bauman
-----------------------------------
NOTARY PUBLIC, STATE OF FLORIDA
Print Name: Bryan W. Bauman
------------------------
Commission No.: CC663143
--------------------
<PAGE> 2
CERTIFICATE OF ADOPTION OF RESOLUTIONS
OF THE
BOARD OF DIRECTORS
OF
MED/WASTE, INC.
AMENDING THE MED/WASTE, INC. CERTIFICATE OF INCORPORATION TO PROVIDE FOR THE
DESIGNATION, PREFERENCES, RIGHTS, QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS THEREOF, OF THE SERIES A PREFERRED STOCK, 9% REDEEMABLE
CONVERTIBLE SERIES
-----------------------------
MED/WASTE, INC., a Delaware corporation (the "Corporation"), hereby
certifies that pursuant to the authority vested in the Board of Directors of the
Corporation by the provisions of its Certificate of Incorporation, and by the
provisions of The General Corporation Law of the State of Delaware, the Board of
Directors adopted the following resolution:
RESOLVED, there is hereby created a series of preferred stock, $.10
par value, of the Corporation, consisting of 60,000 shares of the
authorized, but unissued preferred stock and designated the "Series
A Preferred Stock" (hereinafter referred to as the "Series A"); and
that to the extent that the terms, relative rights, preferences,
qualifications and limitations of the Series A are not fixed and
determined by the Articles of Incorporation of the Corporation, as
amended, they hereby are fixed and determined as follows:
SECTION 5. DIVIDENDS
(a) CUMULATIVE DIVIDENDS. From and after the date of issuance of
any shares of Series A, the holders of the Series A shall be entitled to receive
in cash, when and as declared by the Board of Directors, cumulative preferential
dividends at the rate of $9.00 per share, payable quarterly on the 2nd day of
January and the 1st days of April, July and October in each year to holders of
record of Series A as of the fifteenth (15th) day of the month immediately
preceding the month in which a quarterly dividend is due (each a "Dividend
Record Date"). The first dividend payment due on October 1, 1997 shall be
declared and paid on a pro rata basis for the period such shares of Series A are
outstanding. Through the dividend payable July 1, 1998 (the "Initial Period")
the Company has the option to pay such dividends in cash or in shares of Series
A. The shares of Series A payable in dividends during the Initial Period shall
be valued at $100.00, except that if the average closing price of the Common
Stock for the twenty (20) consecutive trading day period ending five (5) days
prior to the Dividend Record Date (the "Market Price") is less than the
Conversion Price, the value shall equal the Market Price times the quotient of
(i)$100.00 and (ii) the Conversion Price. Whenever dividends are paid in shares
of Series A, the Company shall not issue fractional shares; rather, the Company
shall pay cash in lieu thereof. Thereafter, dividends are payable in cash,
except that if the Company is unable to pay cash dividends, it shall pay
dividends in shares of Series A with a value equal to 80% of the lesser of (a)
$100.00 and (b) the Market Price times the quotient of (i) $100.00 and (ii) the
Conversion Price. Commencing July 1, 2000, the dividend rate will increase by
2.5% per quarter up to a maximum dividend of $24.00 per annum (i.e., the October
1, 2000 quarterly dividend will be increased to $11.50 per annum).
(b) PREFERENCE OF DIVIDENDS. In the event that dividends shall not
have been fully paid or declared and set apart for payment on all shares of
Series A, the amount of the deficiency (without interest) shall be fully paid
before any dividends shall be declared or paid on any shares of Common Stock or
any other equity security which is junior to the Series A. If any dividends are
paid on any of the Series A at any time in an aggregate amount less than the
total dividends then accumulated and payable on all shares of Series A entitled
to dividends then outstanding, the amount to be distributed shall be paid on
each series of Series A entitled to dividends in the proportion that the
dividends then accumulated and payable on each such series bear to the total
dividends accumulated and payable on all outstanding shares of Series A entitled
to dividends.
- 2 -
<PAGE> 3
(c) DATE OF PAYMENT. In any case where the due date for the payment
of dividends on the Series A shall be on a day on which banking institutions are
authorized or obligated by law to close, the payment of dividends need not be
made on such date, but may be made on the next succeeding day which is not a day
on which banking institutions are authorized or obligated by law to close, with
the same force and effect as if made on the date of such payment, and dividends
shall accrue and be paid for the period through and including the date of
payment.
SECTION 6. PRIORITY. All shares of the Series A shall rank on a
parity with each other and shall be preferred to the Common Stock of the
Corporation, and any other class of stock of the Corporation, as to the payment
of dividends and the distribution of assets upon the liquidation, dissolution or
winding up of the Corporation. The Corporation shall have the right to create
other classes of preferred stock which shall rank below the Series A without the
consent of the holders of the Series A.
SECTION 7. VOLUNTARY CONVERSION RIGHTS.
(a) VOLUNTARY CONVERSION Each holder of Series A shall have the
right at any time, and from time to time, at the holder's option, to convert all
or any portion of such holder's shares of Series A into fully paid and
non-assessable full shares of Common Stock of the Corporation at the Conversion
Price, determined as hereinafter provided, in effect at the time of conversion,
each share of the Series A being taken at $100.00 per share for the purposes of
such conversion. The initial Conversion Price is $4.25 per share of Common Stock
("Initial Conversion Price"). The Initial Conversion Price shall be adjusted as
provided for below in Section 5 (the Initial Conversion Price, and the Initial
Conversion Price as thereafter then adjusted, shall be referred to as the
"Conversion Price"). Upon each adjustment of the Conversion Price, the holders
of the Series A shall thereafter be entitled to receive upon conversion, at the
Conversion Price, resulting from such adjustments, the number of shares of
Common Stock obtained by multiplying $100.00 times the number of shares of
Series A being converted and divide such amount by the Conversion Price, as then
adjusted.
(b) METHOD OF CONVERSION. In order to convert shares of the Series
A into Common Stock, the holder thereof shall surrender the certificate or
certificates therefor, duly endorsed in blank at the principal office of the
Corporation or its transfer agent, if any, or at such other office or offices,
located in the United States as the Board of Directors may designate, and give
written notice to the Corporation at said office that he elects to convert said
shares. Shares of the Series A shall be deemed to have been converted as of the
date (hereinafter called the "Conversion Date") of receipt by the Corporation of
the surrender of such shares for conversion as provided above, and the person or
persons entitled to receive the Common Stock issuable upon such conversion shall
be treated for all purposes as the record holder or holders of such Common Stock
on such date. As soon as practicable on or after the Conversion Date but in no
event more than five (5) business days thereafter, the Corporation will deliver
by Federal Express or other nationally recognized overnight delivery service to
the address of the holders who submitted the Series A for conversion, a
certificate or certificates for the number of full shares of Common Stock
issuable upon such conversion, together with cash in lieu of any fraction of a
share, as hereinafter provided, to the person or persons entitled to receive the
same.
(c) CONVERSION PRIOR TO REDEMPTION. In case shares of the Series A
are called for redemption, the right to convert such shares shall cease and
terminate at the close of business on the date fixed for redemption, unless
default shall be made in payment of the amount due on such redemption.
SECTION 8. FORCED CONVERSION RIGHTS. The Company shall have the
right to force conversion all, but not less than all, of the Series A into
shares of Common Stock; provided however, that on the day that notice is given
and on the Forced Conversion Date (as defined below) the following conditions
are satisfied: (i) the Common Stock underlying the Series A has been registered
pursuant to the Securities Act of 1933, as amended (the "Act") and such
registration is then currently effective; and (ii) the average of the closing
bid price of the Common Stock as listed on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ"), the New York Stock
Exchange ("NYSE"), the American Stock Exchange ("ASE") or wherever the Company's
Common Stock then trades, is at least 175% of the Conversion
- 3 -
<PAGE> 4
Price for twenty (20) trading days within a thirty (30) consecutive trading day
period. Any notice of forced conversion must be given to all holders no less
than thirty (30) days nor more than forty-five (45) days prior to the date set
forth for conversion (the "Forced Conversion Date"). On the Forced Conversion
Date, the Corporation shall pay to all registered holders of the Series A, all
accrued and unpaid dividends through and including the Forced Conversion Date.
SECTION 9. ANTI-DILUTION ADJUSTMENTS. The Conversion Price shall be
adjusted as follows:
(a) AMENDMENT TO THE CERTIFICATE OF INCORPORATION. In the case of
any amendment to the Certificate of Incorporation of the Corporation to change
the designation of the Common Stock or the rights, privileges, restrictions or
conditions in respect to the Common Stock or division of the Common Stock, the
Series A shall be adjusted so as to provide that upon conversion thereof the
registered holder shall receive, in lieu of shares of Common Stock theretofore
issuable upon such conversion, the kind and amount of shares, other securities,
money and property receivable upon such designation, change or division by such
holder issuable upon such conversion had the conversion occurred immediately
prior to such designation, change or division. The Series A shall be deemed
thereafter to provide for adjustments which shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Section 5. The provisions
of this Subsection 5(a) shall apply in the same manner to successive
reclassifications, changes, consolidations and mergers.
(b) STOCK SPLITS; STOCK DIVIDENDS. If the Corporation shall at any
time subdivide its outstanding shares of Common Stock into a greater number of
shares of Common Stock, or declare a dividend or make any other distribution
upon the Common Stock payable in shares of Common Stock, the Conversion Price in
effect immediately prior to such subdivision or dividend or other distribution
shall be proportionately reduced, and conversely, in case the outstanding shares
of Common Stock shall be combined into a smaller number of shares of Common
Stock, the Conversion Price in effect immediately prior to such combination
shall be proportionately increased.
(c) ISSUANCE OF ADDITIONAL SECURITIES. In case the Corporation
shall issue or otherwise sell or distribute shares of Common Stock for a
consideration per share in cash or property less than the lesser of the then
effective Conversion Price or the Additional Issuance Market Price (as defined
below), the Conversion Price then in effect shall be reduced by multiplying such
Conversion Price by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such issuance, sale or
distribution plus the number of shares of Common Stock which the aggregate
consideration received by the Corporation for such issuance, sale or
distribution (such consideration, if other than cash, as reasonably determined
by the Board of Directors of the Corporation, including a majority of the
Directors who are not officers or employees of the Corporation or any of its
subsidiaries, whose determination shall be described in a resolution of the
Board of Directors) would purchase at the Conversion Price per share and the
denominator shall be the number of shares of Common Stock outstanding
immediately after giving effect to such issuance, sale or distribution. The term
"Additional Issuance Market Price" shall mean the average of the closing bid
price for the Common Stock for the five (5) consecutive trading days ending two
(2) trading days prior to the relevant date that the Corporation shall issue or
otherwise sell or distribute shares of Common Stock. Notwithstanding anything
herein to the contrary, no adjustment shall be made to the Conversion Price upon
the exercise of any outstanding options, warrants or other rights to purchase
Common Stock or upon conversion of any securities or other rights convertible
into Common Stock, which options, warrants, securities or other rights were
outstanding prior to the initial issuance of any shares of Series A.
(d) REORGANIZATION OR RECLASSIFICATION. If any capital
reorganization or reclassification of the capital stock of the Corporation, or
any consolidation or merger of the Corporation with another corporation or
entity, or the sale of all or substantially all of the Corporation's assets to
another corporation or other entity shall be effected in such a way that holders
of shares of Common Stock shall be entitled to receive stocks, securities, other
evidence of equity ownership or assets with respect to or in exchange for shares
of Common Stock, then, as a condition of such reorganization, reclassification,
consolidation, merger or sale (except as otherwise provided below in this
Subsection 5(d), lawful and adequate provisions shall be made whereby the
holders shall thereafter have the right to receive upon the basis and upon the
terms and conditions specified
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<PAGE> 5
herein, such shares of stock, securities, other evidence of equity ownership or
assets as may be issued or payable with respect to or in exchange for a number
of outstanding shares of such Common Stock equal to the number of shares of
Common Stock immediately theretofore purchasable and receivable upon the
conversion of Series A had such reorganization, reclassification, consolidation,
merger or sale not taken place, and in any such case appropriate provisions
shall be made with respect to the rights and interests of the holders to the end
that the provisions hereof (including, without limitation, provisions for
adjustments of the Conversion Price and of the number of shares of Common Stock
receivable upon the conversion of Series A) shall thereafter be applicable, as
nearly as may be, in relation to any shares of stock, securities, other evidence
of equity ownership or assets thereafter deliverable upon the exercise hereof
(including an immediate adjustment, by reason of such consolidation or merger,
of the Conversion Price to the value for the Common Stock reflected by the terms
of such consolidation or merger if the value so reflected is less than the
Conversion Price in effect immediately prior to such consolidation or merger).
Subject to the terms of the Series A, in the event of a merger or consolidation
of the Corporation with or into another corporation or other entity as a result
of which the number of shares of Common Stock of the surviving corporation or
other entity issuable to holders of Common Stock of the Corporation, is greater
or lesser than the number of shares of Common Stock of the Corporation
outstanding immediately prior to such merger or consolidation, then the
Conversion Price in effect immediately prior to such merger or consolidation
shall be adjusted in the same manner as though there were a subdivision or
combination of the outstanding shares of Common Stock of the Corporation. The
Corporation shall not effect any such consolidation, merger or sale, unless,
prior to the consummation thereof, the successor corporation (if other than the
Corporation) resulting from such consolidation or merger or the corporation
purchasing such assets shall assume by written instrument executed and mailed or
delivered to the holders, the obligation to deliver to such holders such shares
of stock, securities, other evidence of equity ownership or assets as, in
accordance with the foregoing provisions, such holders may be entitled to
receive or otherwise acquire. If a purchase, tender or exchange offer is made to
and accepted by the holders of more than fifty (50%) percent of the outstanding
shares of Common Stock of the Corporation, the Corporation shall not effect any
consolidation, merger or sale with the person having made such offer or with any
affiliate of such person, unless prior to the consummation of such
consolidation, merger or sale the holders of Series A shall have been given a
reasonable opportunity to then elect to receive upon the conversion of Series A,
the amount of stock, securities, other evidence of equity ownership or assets
then issuable with respect to the number of shares of Common Stock of the
Corporation in accordance with such offer.
(e) CHANGE OF CONTROL. In case the Corporation shall, at any time
prior to conversion of the shares of Series A, consolidate or merge with any
other corporation or transfer all or substantially all of its assets to any
other corporation, then the Corporation shall, as a condition precedent to such
transaction, cause effective provision to be made so that the holder hereof upon
the exercise of this Series A after the effective date of such transaction shall
be entitled to receive the kind and amount of shares, evidences of indebtedness
and/or other securities or property receivable on such transaction by a holder
of the number of shares of Common Stock as to which each share of Series A was
convertible immediately prior to such transaction (without giving effect to any
restriction upon such exercise); and, in any such case, appropriate provision
shall be made with respect to the rights and interest of the holders of Series A
to the end that the provisions of the Series A shall thereafter be applicable
(as nearly as may be practicable) with respect to any shares, evidences of
indebtedness or other securities or assets thereafter deliverable upon
conversion of the Series A. Upon the occurrence of any event described in this
Section 5(d), the holders of the Series A Preferred Stock shall have the right
to convert into shares of Common Stock immediately prior to the change of
control at a price equal to the lesser of (i) the Conversion Price or (ii) the
price per share of Common Stock payable in the change of control transaction.
(f) ADJUSTMENT TO CONVERSION PRICE. The term "Conversion Price" as
used herein shall mean the Conversion Price specified in this certificate, until
the occurrence of an event stated in Section 5 and thereafter shall mean said
price, as adjusted from time to time herein.
(g) RECORD OF CONVERSION PRICE. Whenever the shares of Common Stock
or other types of securities or assets receivable upon conversion of the Series
A shall be adjusted as provided in this Section 5, the Corporation shall
forthwith obtain and file with its corporate records a certificate or letter
from a firm of independent public accountants of recognized standing setting
forth the computation and the adjusted number
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<PAGE> 6
of shares of Common Stock or other securities or assets resulting from such
adjustments, and a copy of such certificate or letter shall be mailed to the
holders hereof. Any such certificate or letter shall be conclusive evidence as
to the correctness of the adjustment or adjustments referred to therein and
shall be available for inspection by any holders of the Series A on any day
during normal business hours.
(h) NOTICE. In case:
(i) the Corporation shall declare a dividend (or any other
distribution) on its Common Stock payable in Common Stock of the Corporation; or
(ii) the Corporation shall declare a dividend (or any other
distribution) on its Common Stock payable in cash of the Corporation; or
(iii) any reclassification of Common Stock or any
consolidation, merger, conveyance of the property of the Corporation as an
entirety, or substantially as an entirety, dissolution, liquidation or winding
up shall be effected by the Corporation;
then the Corporation shall mail, or cause to be mailed by the Corporation's
transfer agent, if any, for the Series A and to the holders of record of the
outstanding shares of the Series A, at least thirty (30) days, but not more than
sixty (60) days, prior to the applicable record date hereinafter specified, a
notice stating (A) the date on which a record is to be taken for the purpose of
such dividend, distribution or rights, or, if a record is not to be taken, the
date as of which the holders of Common Stock of record to be entitled to such
dividend, distribution or right are to be determined, or (B) the date on which
such reclassification, consolidation, merger, conveyance, dissolution,
liquidation or winding up is expected to become effective, and the date as of
which it is expected that holders of Common Stock of record shall be entitled to
exchange the certificates representing their shares of Common Stock for
securities or other property deliverable upon such reclassification,
consolidation, merger, conveyance, dissolution, liquidation or winding up.
SECTION 10. RESERVATION OF SHARES OF COMMON STOCK.
(a) RESERVATION OF SHARES. The Corporation shall at all times
reserve and keep available. out of its authorized but unissued Common Stock, for
the purpose of effecting the conversion of the shares of the Series A, the full
number of shares of Common Stock then deliverable upon the conversion of all
shares of the Series A then outstanding. If shares of the Common Stock of the
Corporation are listed on any securities exchange, the Corporation shall make
application for the listing thereon, on notice of issuance, of the shares of
Common Stock deliverable upon the conversion of the outstanding shares of the
Series A and shall use its best efforts to effect such listing.
(b) FRACTIONAL SHARES. No fractional shares of Common Stock are to
be issued upon conversion. The Corporation shall pay a cash adjustment out of
surplus in respect to any fraction of a share which would otherwise be issuable,
in an amount equal to the fair market value of the Common Stock which shall be
the same fraction of the last price per share at which the Common Stock was sold
on any principal stock exchange on which such stock is then listed or admitted
to trading, prior to the opening of business on the conversion date, or if no
sale of such stock takes place on such day on such exchange, the average of the
closing bid and asked prices on such day as officially quoted on such exchange,
or if such stock shall not at the time be listed or admitted to trading on any
stock exchange, the average of the last bid and asked prices for such stock on
such day in the over-the-counter market as reported on NASDAQ prior to the
opening of business on the conversion date, or, if the Common Stock is not then
included in NASDAQ, as furnished by the National Quotation Bureau, Inc. or if
such firm is not at the time engaged in the business of reporting such prices,
as furnished by any firm then engaged in such business or by any member of the
National Association of Securities Dealers, Inc., selected by the Corporation.
If the Common Stock is not then publicly traded, fair market value shall be
determined in good faith by the Corporation's Board of Directors.
(c) TRANSFER TAXES. The Corporation will pay any and all transfer
taxes that may be payable in respect of the issue or delivery of shares of
Common Stock on conversion of shares of the Series A pursuant hereto. The
Corporation shall not, however, be required to pay any tax which may be payable
in
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<PAGE> 7
respect of transfer involved in the issue and delivery of shares of Common Stock
in a name other than that in which the shares of the Series A so converted were
registered, and no such issue or delivery shall be made unless and until the
person requesting such issue has paid to the Corporation the amount of any such
tax, or has established, to the satisfaction of the Corporation, that such tax
has been paid.
(d) COMMON STOCK. For the purpose of this Section, the term "Common
Stock" shall include any stock of any class of the Corporation which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, and which is not subject to redemption by the Corporation. Shares
of Common Stock shall be only such shares which have no preference in respect of
dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation and which are not
subject to redemption by the Corporation; provided that if at any time there
shall be more than one such resulting class, the shares of each such class then
so issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassification.
(e) STATUS OF COMMON STOCK. All Common Stock that may be issued
upon conversion of the Series A will, upon issuance, be duly issued, fully paid
and non-assessable and free from all taxes, liens and charges with respect to
the issuance thereof.
SECTION 11. VOTING.
(a) VOTING. The holders of the Series A shall be entitled to vote,
on all matters in which holders of Common Stock are entitled to vote, voting
together with the Common Stock without regard to class. The holders of the
Series A shall have the number of votes that they would have had assuming
conversion of the Series A into Common Stock as of the record date for the
meeting of the Corporation's holders of Common Stock. The holders of the Series
A shall be entitled to receive all communications sent by the Corporation to the
holders of Common Stock. Except as provided in Section 7(c) or by Delaware law,
holders of shares of the Series A shall not be entitled to vote as a separate
class.
(b) NO CUMULATIVE VOTING. The holders of shares of the Series A
shall not have the right of cumulative voting in an election of directors.
(c) VOTING AS A SEPARATE CLASS. The Corporation shall not, without
the consent (given by vote at a meeting called for that purpose) of the holders
of two-thirds of the shares of the Series A then outstanding, voting as a
separate class:
(i) create, authorize or issue any stock ranking equal to or
senior to the Series A as to dividends or distributions, or any obligation or
security convertible into shares of any such senior stock; or
(ii) amend, alter, change, or repeal any of the express
terms of the Series A.
SECTION 12. REDEMPTION.
(a) REDEMPTION. Commencing thirty (30) months following the first
issuance of the shares of Series A, the Company may redeem the Series A in whole
at any time at the option of the Corporation by resolution of its Board of
Directors, at a redemption price of $100.00 per share, plus accrued and unpaid
dividends if any, to the date fixed for redemption.
(b) NOTICE OF REDEMPTION. Notice of redemption of the shares of the
Series A shall be given by certified mail, return receipt requested, postage
prepaid, not less than 30 nor more than 45 days prior to the date fixed for
redemption, to each holder of the Series A, at his last address appearing on the
books of the Corporation; but no failure to receive such a notice by any holder,
so long as mailed in accordance with the provisions herein, shall affect the
validity of the proceedings for the redemption of any shares of the Series A so
to be redeemed. Each notice of redemption of shares of the Series A shall state:
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<PAGE> 8
(i) the redemption date,
(ii) the redemption price,
(iii) the Conversion Price on the date of the notice,
(iv) that on the redemption date the redemption price will
become due and payable upon each share of the Series A to be redeemed and the
right to convert each such share shall cease as of the close of business on the
redemption date, unless default shall be made in the payment of the redemption
price, and
(v) the place or places where certificates for such shares
of the Series A to be redeemed are to be surrendered for conversion or for
payment of the redemption price.
(c) CONVERSION PRIOR TO THE REDEMPTION. At any time prior to the
redemption date and after notice of redemption shall be given, to each holder of
the Series A shall be entitled to convert all or any portion of such holders'
Series A into Common Stock based on the Conversion Price.
(d) RIGHTS FOLLOWING REDEMPTION. If notice of redemption shall have
been duly given as provided in Section 8(b), and if, on the redemption date,
funds necessary for such redemption have been deposited in trust with a bank or
trust company, or have been set aside, in trust, by the Corporation, for the
purpose of redeeming shares of the Series A, the shares of the Series A called
for redemption shall, as of the close of business on the redemption date, no
longer be transferable on the books of the Corporation and shall no longer be
deemed to be outstanding, the right to receive dividends thereon shall cease to
accrue, and all rights with respect to such shares so called for redemption
shall terminate, except only the right of the holders thereof to receive the
redemption price, without interest thereon, upon surrender of the certificates
for such shares.
(e) REDEMPTION PRICE. In case any holder of shares of the Series A
which shall have been redeemed shall not, within three years of the date of
redemption thereof, claim the amount deposited in trust for the redemption of
such shares, the bank or trust company with which such funds were deposited,
upon request of the Corporation, shall pay over to the Corporation such
unclaimed amount and shall thereupon be relieved of all responsibility in
respect thereof. The Corporation shall not be required to hold the amount so
paid over to it, or any amount theretofore set aside by it, in trust after such
three-year period, separate and apart from its other funds, and thereafter the
holders of such shares of the Series A shall look only to the Corporation for
payment of the redemption price thereof, without interest. All liability of the
Corporation to any holder of shares of the Series A for payment of the
redemption price for shares of the Series A called for redemption shall cease
and terminate as of the close of business on the fourth anniversary of the
redemption date for such shares.
(f) CANCELLATION OF SHARES. Shares of the Series A redeemed
pursuant to this Section 8 shall be canceled by the Corporation and thereafter
shall be authorized and unissued shares of preferred stock, undesignated as to
series, subject to reissuance by the Corporation as shares of any series of
preferred stock other than the Series A.
SECTION 13. LIQUIDATION.
(a) LIQUIDATION PREFERENCE. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation
(hereinafter collectively called "liquidation"), before any amount shall be paid
to or set aside for, or any assets shall be distributed among, the holders of
shares of Common Stock or of any other equity security of the Corporation, each
holder of a share of the Series A shall be entitled to receive out of the assets
of the Corporation or the proceeds thereof a preferential payment in an amount
equal to $100.00 per share, plus the amount of accrued and unpaid dividends on
such share, if any, and no more.
(b) PROPORTIONAL RIGHTS. In the event the amount available for
distribution as liquidation preference payments to holders of the Series A and
any other stock ranking on a parity therewith is insufficient to pay the full
amount of their respective preferences, such amount shall be divided among and
paid to such
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<PAGE> 9
holders ratably in proportion to the respective amounts which would be payable
to such holders if their respective liquidation preferences were to be paid in
full.
(c) INSUFFICIENT FUNDS. In the event any liquidation preference
payment to be made on the shares of the Series A shall amount in the aggregate
to less than $100.00 per share plus accrued and unpaid dividends, the
Corporation in its discretion may require the surrender of certificates for
shares of the Series A and issue a replacement certificate or certificates, or
it may require the certificates evidencing the shares in respect of which such
payments are to be made to be presented to the Corporation, or its agent, for
notation thereon of the amounts of the liquidation preference payments made in
respect of such shares. In the event a certificate for shares of the Series A on
which payment of one or more partial liquidation preferences has been made is
presented for exchange or transfer shall bear an appropriate notation as to the
aggregate amount of liquidation preference payments theretofore made in respect
thereof.
(d) MERGER OR SALE. Neither the consolidation or merger of the
Corporation with or into any other corporation or corporations, nor the sale or
transfer by the Corporation of all or any part of its assets, shall be deemed to
be a liquidation of the Corporation for the purposes of this Section 9.
SECTION 14. REPLACEMENT CERTIFICATES.
(a) MUTILATED CERTIFICATE. If any mutilated certificate of Series A
is surrendered to the Corporation, the Corporation shall execute and deliver in
exchange therefor a new certificate for Series A of like tenor and principal
amount, bearing a number no contemporaneously outstanding.
(b) DESTROYED, LOST OR STOLEN CERTIFICATE. If there is delivered to
the Corporation (i) evidence to its reasonable satisfaction of the destruction,
loss or theft of any certificate of Series A and (ii) such reasonable security
or indemnity as may be required by it to save it harmless, then, in the absence
of notice to the Corporation that such certificate of Series A has been acquired
by a bona fide purchaser, the Corporation shall execute and deliver in lieu of
any such destroyed, lost or stolen certificate of Series A, a new certificate of
Series A of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
(c) STATUS OF NEW CERTIFICATE. Upon the issuance of any new
certificate of Series A under this Section 10, the Corporation may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses connected therewith.
Every new certificate of Series A issued pursuant to this Section 10 in lieu of
any destroyed, lost or stolen certificate of Series A, shall constitute an
original additional contractual obligation of the Corporation, whether or not
the destroyed, lost or stolen certificate of Series A shall be at any time
enforceable by anyone. Any new certificate for Series A delivered pursuant to
this Section 10 shall be so dated that neither gain nor loss in interest shall
result from such exchange. The provisions of this Section 10 are exclusive and
shall preclude (to the extent lawful) all other rights and remedies with respect
to the replacement or payment of mutilated, destroyed, lost or stolen
certificate of Series A.
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<PAGE> 10
CERTIFICATE
OF
MED/WASTE, INC.
I, the undersigned, DANIEL A. STAUBER, as President of MED/WASTE,
INC., a corporation organized and existing under the laws of the State of
Delaware (hereinafter referred to as the "Corporation") hereby certify and
affirm the following:
15. The name of the Corporation is MED/WASTE, INC.
16. On June 10, 1997, the Board of Directors, pursuant to
Section 151 of the Delaware General Corporation laws
adopted a resolution establishing the Designation,
Preferences Limitations, and relative Rights of the
Series A Preferred Stock, Callable, Convertible Series
(the "Series A Designation"). The Series A Designation
was filed with the secretary of State of Delaware on
August 12, 1997.
17. As of September 26, 1997, no shares of Series A were
outstanding. On September 26, 1997, the Board of
Directors, pursuant to Section 151 of the Delaware
General Corporation laws adopted a resolution amending
the Series A Designation in the form of Exhibit "A"
attached hereto.
18. The foregoing amendment to the Series A Designation was
adopted by the Board of Directors in accordance with ss.
151 of the Delaware General Corporation Laws and shall
become effective and constitutes an amendment to the
Corporation's Certificate of Incorporation upon the
proper filing of this instrument with the Delaware
Secretary of State.
19. Shareholder approval is not required pursuant to the
Delaware General Corporation Laws.
IN WITNESS WHEREOF, the undersigned has executed this Certificate
of MED/WASTE, INC., this 30th day of September, 1997.
MED/WASTE, INC., a Delaware corporation
By: /s/ Daniel A. Stauber
-------------------------------------
DANIEL A. STAUBER, President
I CERTIFY, that DANIEL A. STAUBER, personally known to me to be
the same persons whose names are subscribed to the foregoing instrument, this
day personally appeared before me as the President of MED/WASTE, INC., and he
acknowledged that he has executed the foregoing instrument fully and voluntarily
for the use and purpose therein expressed.
SWORN TO AND SUBSCRIBED before me this 30th day of September,
1997.
My Commission Expires:
August 4, 2001
/s/ Bryan W. Bauman
-----------------------------------
NOTARY PUBLIC, STATE OF FLORIDA
Print Name: Bryan W. Bauman
------------------------
Commission No.: CC663143
--------------------
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<PAGE> 11
CERTIFICATE OF ADOPTION OF RESOLUTIONS
OF THE
BOARD OF DIRECTORS
OF
MED/WASTE, INC.
AMENDING THE DESIGNATION, PREFERENCES, RIGHTS, QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS THEREOF,
OF THE SERIES A PREFERRED STOCK, 9% REDEEMABLE CONVERTIBLE SERIES
-----------------------------
MED/WASTE, INC., a Delaware corporation (the "Corporation"), hereby
certifies that pursuant to the authority vested in the Board of Directors of the
Corporation by the provisions of its Certificate of Incorporation, and by the
provisions of The General Corporation Law of the State of Delaware, the Board of
Directors adopted the following resolution:
RESOLVED, the designation of the Series A Preferred Stock is hereby
amended by adding the following paragraph 11 to as follows:
SECTION 11. RIGHT TO EXCHANGE Provided that at least 35,000 shares
of Series A are sold prior to October 31, 1997, in the event that the
Corporation shall at any time prior to March 30, 1998, engage in a private
placement (an "Additional Placement") of any of its securities (the "Other
Securities"), the Corporation shall in accordance with the provisions set forth
herein, offer to each holder of the Series A, the right to exchange (the
"Exchange") their shares of Series A for the Other Securities. The term "Other
Securities" shall not include non-convertible debt instruments issued by the
Corporation (whether or not warrants are also issued in connection therewith).
The Corporation shall give each Investor written notice (the "Exchange Notice")
promptly after completion of the Additional Placement. The Exchange Notice shall
include a description of all of the terms and conditions relating to the Other
Securities (including the aggregate amount sold) and, if the Other Securities
were offered and sold pursuant to a written disclosure document, the Exchange
Notice shall include a copy of the written disclosure document. Each Investor
shall have fifteen (15) days after the Exchange Notice to determine whether to
participate in the Exchange. Any Investor that does not provide timely written
notice to the Corporation of their determination to participate in the Exchange
shall be deemed to have elected not to participate in the Exchange. In order to
properly elect to participate in the Exchange, an Investor must send written
notice of election to the Corporation at its principal offices and the Investor
must include their original certificate for Series A with such notice.
Immediately following the expiration of the fifteen (15) day election period,
the Corporation shall issue to the Investors that have properly elected to
participate in the Exchange, the Other Securities based on the purchase price
that was originally paid to the Corporation for the tendered shares of Series A.
For purposes of the Exchange, the purchase price of each share of Series A is
taken at $100. For example, if an Investor owns 500 shares at $50,000 and the
Investor has elected to participate in the Exchange, such Investor shall
receive, in exchange for the Investors' shares of Series A, $50,000 of Other
Securities, as valued in the Additional Placement. The Other Securities to be
issued to Investors that have elected to participate in the Exchange will be in
addition to the Other Securities sold in the Additional Placement and will not
reduce the aggregate number of Other Securities sold or the aggregate purchase
price received by the Corporation in connection with the Additional Placement.
Concurrently with the closing of the Exchange, the Corporation shall pay in cash
to each Investor that will receive Other Securities, all accrued and unpaid
dividends through the date the Exchange is consummated, on the Shares of Series
A being Exchanged.
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<PAGE> 1
Exhibit 4.2
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED ("1933 ACT") OR ANY STATE SECURITIES
LAWS AND SHALL NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED, OR
OTHERWISE TRANSFERRED, WHETHER OR NOT FOR CONSIDERATION, BY THE HOLDER
EXCEPT UPON THE ISSUANCE TO THE COMPANY OF A FAVORABLE OPINION OF ITS
COUNSEL OR THE SUBMISSION TO THE COMPANY OF SUCH OTHER EVIDENCE AS MAY
BE SATISFACTORY TO COUNSEL FOR THE COMPANY, IN EITHER CASE, TO THE
EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE 1933 ACT
AND APPLICABLE STATE SECURITIES LAWS.
MED/WASTE, INC.
Common Stock Purchase Warrant
to
Purchase ______ Shares
of
Common Stock
This Common Stock Purchase Warrant is issued to:
by MED/WASTE, INC., a Delaware corporation (hereinafter called the "Company",
which term shall include its successors and assigns).
FOR VALUE RECEIVED and subject to the terms and conditions hereinafter
set out, the registered holder of this Warrant as set forth on the books and
records of the Company (the "Holder") is entitled upon surrender of this Warrant
to purchase from the Company
(_______) fully paid and nonassessable shares of
Common Stock, $.001 par value (the "Common Stock"), at the Exercise Price (as
defined below) per share.
This Warrant shall expire at the close of business on October 30, 2002.
1. (a) The right to purchase shares of Common Stock represented by this
Warrant may be exercised by the Holder, in whole or in part, by the surrender of
this Warrant (properly endorsed if required) at the principal office of the
Company at 3890 N.W. 132nd Street, Suite K, Opa Locka, Florida 33054 (or such
other office or agency of the Company as it may designate by notice in writing
to the Holder at the address of the Holder appearing on the books of the
Company), and upon payment to the Company, by cash or by certified check or bank
draft, of the Exercise Price for such shares. The Company agrees that the shares
of Common Stock so purchased shall be deemed to be issued to the Holder as the
record owner of such shares of Common Stock as of the close of business on the
date on which this Warrant shall have been
<PAGE> 2
surrendered and payment made for such shares of Common Stock as aforesaid.
Certificates for the shares of Common Stock so purchased (together with a cash
adjustment in lieu of any fraction of a share) shall be delivered to the Holder
within a reasonable time, not exceeding five (5) business days, after the rights
represented by this Warrant shall have been so exercised, and, unless this
Warrant has expired, a new Warrant representing the number of shares of Common
Stock, if any, with respect to which this Warrant shall not then have been
exercised, in all other respects identical with this Warrant, shall also be
issued and delivered to the Holder within such time, or, at the request of the
Holder, appropriate notation may be made on this Warrant and the same returned
to the Holder.
(b) This Warrant may be exercised to acquire, from and after the
date hereof, the number of shares of Common Stock set forth on the first page
hereof; provided, however, the right hereunder to purchase such shares of Common
Stock shall expire at the close of business on October 30, 2002.
2. This Warrant is being issued by the Company to Taglich Brothers,
D'Amadeo, Wagner & Company, Incorporated ("Taglich Brothers"), or its designee,
pursuant to a Preferred Stock Placement Agreement between the Company and
Taglich Brothers dated as of September 30, 1997 (the "Placement Agreement"), as
amended, whereby the Company agreed to issue a five (5) year warrant exercisable
at the Exercise Price per share to Taglich Brothers, or its designee, equal to
ten (10%) percent of the total number of shares of Common Stock issuable upon
the conversion of the Series A 9% convertible redeemable preferred stock sold by
Taglich Brothers in a Private Placement pursuant to the Company's Confidential
Private Placement Memorandum dated August 5, 1997 (the "Memorandum"), as amended
by First Amendment dated September 24, 1997 and Second Amendment dated October
15, 1997.
3. The Company covenants and agrees that all Common Stock upon issuance
against payment in full of the Exercise Price by the Holder pursuant to this
Warrant will be validly issued, fully paid and nonassessable and free from all
taxes, liens and charges with respect to the issue thereof; and, without
limiting the generality of the foregoing, the Company covenants and agrees that
it will take from time to time all such action as may be requisite to assure
that the par value per share of the Common Stock is at all times equal to or
less than the then effective Exercise Price. The Company further covenants and
agrees that during the period within which the rights represented by this
Warrant may be exercised, the Company will have at all times authorized, and
reserved for the purpose of issue or transfer upon exercise of the rights
evidenced by this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise of the rights represented by this Warrant, and will
procure at its sole expense upon each such reservation of shares the listing
thereof (subject to issuance or notice of issuance) on all stock exchanges on
which the Common Stock is then listed or inter-dealer trading systems on which
the Common Stock is then traded. The Company will take all such action as may be
necessary to assure that 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 may be listed or
inter-dealer trading system on which the Common Stock is then traded. The
Company will not take any action which would result in any adjustment in the
number of shares of Common Stock purchasable hereunder if the total number of
shares of
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<PAGE> 3
Common Stock issuable pursuant to the terms of this Warrant after such action
upon full exercise of this Warrant and, together with all shares of Common Stock
then outstanding and all shares of Common Stock then issuable upon exercise of
all options and other rights to purchase shares of Common Stock then
outstanding, would exceed the total number of shares of Common Stock then
authorized by the Company's Certificate of Incorporation, as then amended.
4. The Initial Exercise Price is $4.25 per share of Common Stock
("Initial Exercise Price"). The Initial Exercise Price shall be adjusted as
provided for below in this Section 4 (the Initial Exercise Price, and the
Initial Exercise Price, as thereafter then adjusted, shall be referred to as the
"Exercise Price") and the Exercise Price from time to time shall be further
adjusted as provided for below in this Section 4. Upon each adjustment of the
Exercise Price, the Holder shall thereafter be entitled to receive upon exercise
of this Warrant, at the Exercise Price resulting from such adjustment, the
number of shares of Common Stock obtained by (i) multiplying the Exercise Price
in effect immediately prior to such adjustment by the number of shares of Common
Stock purchasable hereunder immediately prior to such adjustment, and (ii)
dividing the product thereof by the Exercise Price resulting from such
adjustment. The Exercise Price shall be adjusted as follows:
(i) In the case of any amendment to the
Certificate of Incorporation of the Company to change
the designation of the Common Stock or the rights,
privileges, restrictions or conditions in respect to
the Common Stock or division of the Common Stock, this
Warrant shall be adjusted so as to provide that upon
exercise thereof, the Holder shall receive, in lieu of
each Common Stock theretofore issuable upon such
exercise, the kind and amount of shares, other
securities, money and property receivable upon such
designation, change or division by the Holder issuable
upon such exercise had the exercise occurred
immediately prior to such designation, change or
division. This Warrant shall be deemed thereafter to
provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments
provided for in this Section 4. The provisions of this
Subsection 4(i) shall apply in the same manner to
successive reclassifications, changes, consolidations
and mergers.
(ii) If the Company shall at any time subdivide
its outstanding shares of Common Stock into a greater
number of shares of Common Stock, or declare a dividend
or make any other distribution upon the Common Stock
payable in shares of Common Stock, the Exercise Price
in effect immediately prior to such subdivision or
dividend or other distribution shall be proportionately
reduced, and conversely, in case the outstanding shares
of Common Stock shall be combined into a smaller number
of shares of Common Stock, the Exercise Price in effect
immediately prior to such combination shall be
proportionately increased.
(iii) In case the Company shall issue or
otherwise sell or distribute shares of Common Stock
for a consideration per share in cash or property
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<PAGE> 4
less than the lesser of the Exercise Price then in
effect or the Market Price (as defined below), the
Exercise Price then in effect shall be reduced by
multiplying such Exercise Price by a fraction, the
numerator of which shall be the number of shares of
Common Stock outstanding immediately prior to such
issuance, sale or distribution plus the number of
shares of Common Stock which the aggregate
consideration received by the Company for such
issuance, sale or distribution (such consideration, if
other than cash, as reasonably determined by the Board
of Directors of the Company including a majority of the
Directors who are not officers or employees of the
Company or any of its Subsidiaries, whose determination
shall be described in a resolution of the Board of
Directors) would purchase at the Exercise Price per
share and the denominator shall be the number of shares
of Common Stock outstanding immediately after giving
effect to such issuance, sale or distribution. The term
"Market Price" shall mean the average of the closing
bid price for the Common Stock for the five (5)
consecutive trading days ending two (2) trading days
prior to the relevant date that the Company shall issue
or otherwise sell or distribute shares of Common Stock.
(iv) If any capital reorganization or
reclassification of the capital stock of the Company,
or any consolidation or merger of the Company with
another corporation or entity, or the sale of all or
substantially all of the Company's assets to another
corporation or other entity shall be effected in such a
way that holders of shares of Common Stock shall be
entitled to receive stocks, securities, other evidence
of equity ownership or assets with respect to or in
exchange for shares of Common Stock, then, as a
condition of such reorganization, reclassification,
consolidation, merger or sale (except as otherwise
provided below in this Section 4), lawful and adequate
provisions shall be made whereby the Holder shall
thereafter have the right to receive upon the basis and
upon the terms and conditions specified herein, such
shares of stock, securities, other evidence of equity
ownership or assets as may be issued or payable with
respect to or in exchange for a number of outstanding
shares of such Common Stock equal to the number of
shares of Common Stock immediately theretofore
purchasable and receivable upon the exercise of this
Warrant under this Section 4 had such reorganization,
reclassification, consolidation, merger or sale not
taken place, and in any such case appropriate
provisions shall be made with respect to the rights and
interests of the Holder to the end that the provisions
hereof (including, without limitation, provisions for
adjustments of the Exercise Price and of the number of
shares of Common Stock receivable upon the exercise of
this Warrant) shall thereafter be applicable, as nearly
as may be, in relation to any shares of stock,
securities, other evidence of equity ownership or
assets thereafter deliverable upon the exercise hereof
(including an immediate adjustment, by reason of such
consolidation or merger, of the Exercise Price to the
value for the Common Stock reflected by the terms of
such consolidation or merger if the value so reflected
is less than the Exercise
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<PAGE> 5
Price in effect immediately prior to such consolidation
or merger). Subject to the terms of this Warrant, in
the event of a merger or consolidation of the Company
with or into another corporation or other entity as a
result of which the number of shares of common stock of
the surviving corporation or other entity issuable to
holders of Common Stock of the Company, is greater or
lesser than the number of shares of Common Stock of the
Company outstanding immediately prior to such merger or
consolidation, then the Exercise Price in effect
immediately prior to such merger or consolidation shall
be adjusted in the same manner as though there were a
subdivision or combination of the outstanding shares of
Common Stock of the Company. The Company shall not
effect any such consolidation, merger or sale, unless,
prior to the consummation thereof, the successor
corporation (if other than the Company) resulting from
such consolidation or merger or the corporation
purchasing such assets shall assume by written
instrument executed and mailed or delivered to the
Holder, the obligation to deliver to the Holder such
shares of stock, securities, other evidence of equity
ownership or assets as, in accordance with the
foregoing provisions, the Holder may be entitled to
receive or otherwise acquire. If a purchase, tender or
exchange offer is made to and accepted by the holders
of more than fifty (50%) percent of the outstanding
shares of Common Stock of the Company, the Company
shall not effect any consolidation, merger or sale with
the Person having made such offer or with any Affiliate
of such Person, unless prior to the consummation of
such consolidation, merger or sale the Holder of this
Warrant shall have been given a reasonable opportunity
to then elect to receive upon the exercise of this
Warrant the amount of stock, securities, other evidence
of equity ownership or assets then issuable with
respect to the number of shares of Common Stock of the
Corporation in accordance with such offer.
Whenever the Exercise Price shall be adjusted pursuant to this
Section 4, the Company shall issue a certificate signed by its President or Vice
President and by its Treasurer, Assistant Treasurer, Secretary or Assistant
Secretary, setting forth, in reasonable detail, the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated (including a description of the basis on which the Board of
Directors of the Company made any determination hereunder), and the Exercise
Price after giving effect to such adjustment, and shall cause copies of such
certificates to be mailed (by first-class mail, postage prepaid) to the Holder
of this Warrant. The Company shall make such certificate and mail it to the
Holder promptly after each adjustment.
No fractional Common Stock shall be issued in connection with
any exercise of this Warrant, but in lieu of such fractional shares, the Company
shall make a cash payment therefor equal in amount to the product of the
applicable fraction multiplied by the Exercise Price then in effect.
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<PAGE> 6
5. In the event the Company grants rights to all shareholders to
purchase Common Stock, the Holder shall have the same rights as if this Warrant
had been exercised immediately prior to such grant.
6. The Holder shall, with respect to the shares of Common Stock issuable
upon the exercise of this Warrant, have the registration rights and "piggy back"
registration rights set forth in the Placement Agreement. Such registration
rights and "piggy back" registration rights are incorporated herein by this
reference as if such provisions had been set forth herein in full.
7. This Warrant need not be changed because of any change in the
Exercise Price or in the number of shares of Common Stock purchased hereunder.
8. The terms defined in this paragraph, whenever used in this Warrant,
shall, unless the context otherwise requires, have the respective meanings
hereinafter specified. The term "Common Stock shall mean and include the
Company's Common Stock, $0.001 par value per share, authorized on the date of
the original issue of this Warrant and shall also include in case of any
reorganization, reclassification, consolidation, merger or sale of assets of the
character referred to in paragraph 4 hereof, the stock, securities or assets
provided for in such paragraph. The term "Company" shall also include any
successor corporation to MED/WASTE, INC. by merger, consolidation or otherwise.
The term "outstanding" when used with reference to Common Stock shall mean at
any date as of which the number of shares thereof is to be determined, all
issued shares of Common Stock, except shares then owned or held by or for the
account of the Company. The term "1933 Act" shall mean the Securities Act of
1933, as amended, or any similar Federal statute, and the rules and regulations
of the Securities and Exchange Commission, or any other Federal agency then
administering such Securities Act, thereunder, all as the same shall be in
effect at the time.
9. This Warrant is exchangeable, upon the surrender hereby by the Holder
at the office or agency of the Company, for new Warrants of like tenor
representing in the aggregate the right to subscribe for and purchase the number
of shares of Common Stock which may be subscribed for and purchased hereunder,
each of such new Warrants to represent the right to subscribe for and purchase
such number of shares of Common Stock as shall be designated by the Holder at
the time of such surrender. Upon receipt of evidence satisfactory to the Company
of the loss, theft, destruction or mutilation of this Warrant or any such new
Warrants and, in the case of any such loss, theft, or destruction, upon delivery
of a bond of indemnity, reasonably satisfactory to the Company, or, in the case
of any such mutilation, upon surrender or cancellation of this Warrant or such
new Warrants, the Company will issue to the Holder a new Warrant of like tenor,
in lieu of this Warrant or such new Warrants, representing the right to
subscribe for and purchase the number of shares of Common Stock which may be
subscribed for and purchased hereunder.
10. The Company agrees to use its best efforts to file timely all
reports required to be filed by it pursuant to Sections 13 or 15 of the
Securities Exchange Act of 1934, as amended, and to provide such information as
will permit the Holder to sell this Warrant or any shares of
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<PAGE> 7
Common Stock acquired upon exercise of this Warrant in accordance with Rule 144
under the 1933 Act.
11. The Company will at no time close its transfer books against the
transfer of this Warrant or of any shares of Common Stock issued or issuable
upon the exercise of this Warrant in any manner which interferes with the timely
exercise of this Warrant. This Warrant shall not entitle the Holder to any
voting rights or any rights as a stockholder of the Company. The rights and
obligations of the Company, of the Holder, and of any holder of shares of Common
Stock issuable hereunder, shall survive the exercise of this Warrant.
12. This Warrant sets forth the entire agreement of the Company and the
Holder of the Common Stock issuable upon the exercise of this Warrant with
respect to the rights of the Holder and the Common Stock issuable upon the
exercise of this Warrant, notwithstanding the knowledge of such Holder of any
other agreement or the provisions of any agreement, whether or not known to the
Holder and the Company represents that there are no agreements inconsistent with
the terms hereof or which purport in any way to bind the Holder of this Warrant
or the Common Stock.
13. The validity, interpretation and performance of this Warrant and
each of its terms and provisions shall be governed by the laws of the State of
New York.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer under its corporate seal and to be dated October 31,
1997.
MED/WASTE, INC.
By:_______________________________________
Name: Daniel A. Stauber
Title: President
[CORPORATE SEAL]
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<PAGE> 1
Exhibit 4.3
THIS WARRANT AND THE SECURITIES ISSUABLE BY THE COMPANY UPON THE
EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), AND THE
WARRANT MAY NOT BE EXERCISED BY OR ON BEHALF OF ANY U.S. PERSON UNLESS
REGISTERED UNDER THE 1933 ACT OR AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
A PERSON EXERCISING THIS WARRANT MUST DELIVER TO THE COMPANY: (I) A
WRITTEN CERTIFICATION IN FORM ACCEPTABLE TO THE COMPANY TO THE EFFECT
THAT IT IS NOT A U.S. PERSON AND THE WARRANT IS NOT BEING EXERCISED ON
BEHALF OF A U.S. PERSON; OR (II) A WRITTEN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT THE WARRANT AND THE
SHARES OF COMMON STOCK ISSUABLE BY THE COMPANY UPON THE EXERCISE OF THE
WARRANT HAVE BEEN REGISTERED UNDER THE 1933 ACT OR ARE EXEMPT FROM
REGISTRATION THEREUNDER. "U.S. PERSON" HAS THE MEANING GIVEN TO THAT
TERM IN REGULATION S UNDER THE 1933 ACT.
MED/WASTE, INC.
Common Stock Purchase Warrant
to
Purchase Shares
of
Common Stock
This Common Stock Purchase Warrant is issued to:
by MED/WASTE, INC., a Delaware corporation (hereinafter called the "Company",
which term shall include its successors and assigns).
FOR VALUE RECEIVED and subject to the terms and conditions hereinafter
set out, the registered holder of this Warrant as set forth on the books and
records of the Company (the "Holder") is entitled upon surrender of this Warrant
to purchase from the Company
( ) fully paid and nonassessable shares of Common Stock, $.001 par
value (the "Common Stock"), at the Exercise Price (as defined below) per share.
This Warrant shall expire at the close of business on November 6, 2002.
<PAGE> 2
1. (a) The right to purchase shares of Common Stock represented by this
Warrant may be exercised by the Holder, in whole or in part, by the surrender of
this Warrant (properly endorsed if required) at the principal office of the
Company at 3890 N.W. 132nd Street, Suite K, Opa Locka, Florida 33054 (or such
other office or agency of the Company as it may designate by notice in writing
to the Holder at the address of the Holder appearing on the books of the
Company), and upon payment to the Company, by cash or by certified check or bank
draft, of the Exercise Price for such shares. The Company agrees that the shares
of Common Stock so purchased shall be deemed to be issued to the Holder as the
record owner of such shares of Common Stock as of the close of business
on the date on which this Warrant shall have been surrendered and payment made
for such shares of Common Stock as aforesaid. Certificates for the shares of
Common Stock so purchased (together with a cash adjustment in lieu of any
fraction of a share) shall be delivered to the Holder within a reasonable time,
not exceeding five (5) business days, after the rights represented by this
Warrant shall have been so exercised, and, unless this Warrant has expired, a
new Warrant representing the number of shares of Common Stock, if any, with
respect to which this Warrant shall not then have been exercised, in all other
respects identical with this Warrant, shall also be issued and delivered to the
Holder within such time, or, at the request of the Holder, appropriate notation
may be made on this Warrant and the same returned to the Holder.
(b) Notwithstanding the foregoing, this Warrant may only be
exercised by or on behalf of the Holder if the Holder (i) certifies to the
Company in form acceptable to the Company that it is not in the United States or
a U.S. Person or exercising the Warrant for the account of or benefit of, or for
resale to, a U.S. Person or a person in the United States; or (ii) delivers to
the Company a written opinion of counsel to the effect that the Warrant and the
Common Stock issuable upon exercise thereof have been registered under the 1933
Act and applicable state securities laws or are exempt from registration.
(c) This Warrant may be exercised to acquire, from and after the
date hereof, the number of shares of Common Stock set forth on the first page
hereof; provided, however, the right hereunder to purchase such shares of Common
Stock shall expire at the close of business on November 6, 2002.
2. This Warrant is being issued by the Company to the Holder pursuant to
Common Stock Purchase Agreement dated the date hereof between the Company and
the Holder (the "Purchase Agreement").
3. The Company covenants and agrees that all Common Stock upon issuance
against payment in full of the Exercise Price by the Holder pursuant to this
Warrant will be validly issued, fully paid and nonassessable and free from all
taxes, liens and charges with respect to the issue thereof; and, without
limiting the generality of the foregoing, the Company covenants and agrees that
it will take from time to time all such action as may be requisite to assure
that the par value per share of the Common Stock is at all times equal to or
less than the then effective Exercise Price. The Company further covenants and
agrees that during the period within which the rights represented by this
Warrant may be exercised, the Company will have at all times
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<PAGE> 3
authorized, and reserved for the purpose of issue or transfer upon exercise of
the rights evidenced by this Warrant, a sufficient number of shares of Common
Stock to provide for the exercise of the rights represented by this Warrant, and
will procure at its sole expense upon each such reservation of shares the
listing thereof (subject to issuance or notice of issuance) on all stock
exchanges on which the Common Stock is then listed or inter-dealer trading
systems on which the Common Stock is then traded. The Company will take all such
action as may be necessary to assure that 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 may
be listed or inter-dealer trading system on which the Common Stock is then
traded. The Company will not take any action which would result in any
adjustment in the number of shares of Common Stock purchasable hereunder if the
total number of shares of Common Stock issuable pursuant to the terms of this
Warrant after such action upon full exercise of this Warrant and, together with
all shares of Common Stock then outstanding and all shares of Common Stock then
issuable upon exercise of all options and other rights to purchase shares of
Common Stock then outstanding, would exceed the total number of shares of Common
Stock then authorized by the Company's Certificate of Incorporation, as then
amended.
4. The Initial Exercise Price is $3.625 per share of Common Stock
("Initial Exercise Price"). The Initial Exercise Price shall be adjusted as
provided for below in this Section 4 (the Initial Exercise Price, and the
Initial Exercise Price, as thereafter then adjusted, shall be referred to as the
"Exercise Price") and the Exercise Price from time to time shall be further
adjusted as provided for below in this Section 4. Upon each adjustment of the
Exercise Price, the Holder shall thereafter be entitled to receive upon exercise
of this Warrant, at the Exercise Price resulting from such adjustment, the
number of shares of Common Stock obtained by (i) multiplying the Exercise Price
in effect immediately prior to such adjustment by the number of shares of Common
Stock purchasable hereunder immediately prior to such adjustment, and (ii)
dividing the product thereof by the Exercise Price resulting from such
adjustment. The Exercise Price shall be adjusted as follows:
(i) In the case of any amendment to the
Certificate of Incorporation of the Company to
change the designation of the Common Stock or
the rights, privileges, restrictions or
conditions in respect to the Common Stock or
division of the Common Stock, this Warrant shall
be adjusted so as to provide that upon exercise
thereof, the Holder shall receive, in lieu of
each Common Stock theretofore issuable upon such
exercise, the kind and amount of shares, other
securities, money and property receivable upon
such designation, change or division by the
Holder issuable upon such exercise had the
exercise occurred immediately prior to such
designation, change or division. This Warrant
shall be deemed thereafter to provide for
adjustments which shall be as nearly equivalent
as may be practicable to the adjustments
provided for in this Section 4. The provisions
of this Subsection 4(i) shall apply in the same
manner to successive reclassifications, changes,
consolidations and mergers.
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<PAGE> 4
(ii) If the Company shall at any time
subdivide its outstanding shares of Common Stock
into a greater number of shares of Common Stock,
or declare a dividend or make any other
distribution upon the Common Stock payable in
shares of Common Stock, the Exercise Price in
effect immediately prior to such subdivision or
dividend or other distribution shall be
proportionately reduced, and conversely, in case
the outstanding shares of Common Stock shall be
combined into a smaller number of shares of
Common Stock, the Exercise Price in effect
immediately prior to such combination shall be
proportionately increased.
(iii) In case the Company shall issue or
otherwise sell or distribute shares of Common
Stock for a consideration per share in cash or
property less than the lesser of the Exercise
Price then in effect or the Market Price (as
defined below), the Exercise Price then in
effect shall be reduced by multiplying such
Exercise Price by a fraction, the numerator of
which shall be the number of shares of Common
Stock outstanding immediately prior to such
issuance, sale or distribution plus the number
of shares of Common Stock which the aggregate
consideration received by the Company for such
issuance, sale or distribution (such
consideration, if other than cash, as reasonably
determined by the Board of Directors of the
Company including a majority of the Directors
who are not officers or employees of the Company
or any of its Subsidiaries, whose determination
shall be described in a resolution of the Board
of Directors) would purchase at the Exercise
Price per share and the denominator shall be the
number of shares of Common Stock outstanding
immediately after giving effect to such
issuance, sale or distribution. The term "Market
Price" shall mean the average of the closing bid
price for the Common Stock for the five (5)
consecutive trading days ending two (2) trading
days prior to the relevant date that the Company
shall issue or otherwise sell or distribute
shares of Common Stock.
(iv) If any capital reorganization or
reclassification of the capital stock of the
Company, or any consolidation or merger of the
Company with another corporation or entity, or
the sale of all or substantially all of the
Company's assets to another corporation or other
entity shall be effected in such a way that
holders of shares of Common Stock shall be
entitled to receive stocks, securities, other
evidence of equity ownership or assets with
respect to or in exchange for shares of Common
Stock, then, as a condition of such
reorganization, reclassification, consolidation,
merger or sale (except as otherwise provided
below in this Section 4), lawful and adequate
provisions shall be made whereby the Holder
shall thereafter have the right to receive upon
the basis and upon the terms and conditions
specified herein, such shares of stock,
securities, other evidence of equity ownership
or assets as may be issued or payable with
respect to or in exchange for a number of
outstanding shares of such Common Stock equal to
the number of shares of Common Stock immediately
theretofore purchasable and receivable upon the
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<PAGE> 5
exercise of this Warrant under this Section 4
had such reorganization, reclassification,
consolidation, merger or sale not taken place,
and in any such case appropriate provisions
shall be made with respect to the rights and
interests of the Holder to the end that the
provisions hereof (including, without
limitation, provisions for adjustments of the
Exercise Price and of the number of shares of
Common Stock receivable upon the exercise of
this Warrant) shall thereafter be applicable, as
nearly as may be, in relation to any shares of
stock, securities, other evidence of equity
ownership or assets thereafter deliverable upon
the exercise hereof (including an immediate
adjustment, by reason of such consolidation or
merger, of the Exercise Price to the value for
the Common Stock reflected by the terms of such
consolidation or merger if the value so
reflected is less than the Exercise Price in
effect immediately prior to such consolidation
or merger). Subject to the terms of this
Warrant, in the event of a merger or
consolidation of the Company with or into
another corporation or other entity as a result
of which the number of shares of common stock of
the surviving corporation or other entity
issuable to holders of Common Stock of the
Company, is greater or lesser than the number of
shares of Common Stock of the Company
outstanding immediately prior to such merger or
consolidation, then the Exercise Price in effect
immediately prior to such merger or
consolidation shall be adjusted in the same
manner as though there were a subdivision or
combination of the outstanding shares of Common
Stock of the Company. The Company shall not
effect any such consolidation, merger or sale,
unless, prior to the consummation thereof, the
successor corporation (if other than the
Company) resulting from such consolidation or
merger or the corporation purchasing such assets
shall assume by written instrument executed and
mailed or delivered to the Holder, the
obligation to deliver to the Holder such shares
of stock, securities, other evidence of equity
ownership or assets as, in accordance with the
foregoing provisions, the Holder may be entitled
to receive or otherwise acquire. If a purchase,
tender or exchange offer is made to and accepted
by the holders of more than fifty (50%) percent
of the outstanding shares of Common Stock of the
Company, the Company shall not effect any
consolidation, merger or sale with the Person
having made such offer or with any Affiliate of
such Person, unless prior to the consummation of
such consolidation, merger or sale the Holder of
this Warrant shall have been given a reasonable
opportunity to then elect to receive upon the
exercise of this Warrant the amount of stock,
securities, other evidence of equity ownership
or assets then issuable with respect to the
number of shares of Common Stock of the
Corporation in accordance with such offer.
Whenever the Exercise Price shall be adjusted pursuant to this
Section 4, the Company shall issue a certificate signed by its President or Vice
President and by its Treasurer, Assistant Treasurer, Secretary or Assistant
Secretary, setting forth, in reasonable detail, the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
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<PAGE> 6
was calculated (including a description of the basis on which the Board of
Directors of the Company made any determination hereunder), and the Exercise
Price after giving effect to such adjustment, and shall cause copies of such
certificates to be mailed (by first-class mail, postage prepaid) to the Holder
of this Warrant. The Company shall make such certificate and mail it to the
Holder promptly after each adjustment.
No fractional Common Stock shall be issued in connection with
any exercise of this Warrant, but in lieu of such fractional shares, the Company
shall make a cash payment therefor equal in amount to the product of the
applicable fraction multiplied by the Exercise Price then in effect.
5. In the event the Company grants rights to all shareholders to
purchase Common Stock, the Holder shall have the same rights as if this Warrant
had been exercised immediately prior to such grant.
6. The Holder shall, with respect to the shares of Common Stock issuable
upon the exercise of this Warrant, have the registration rights set forth in the
Purchase Agreement. Such registration rights are incorporated herein by this
reference as if such provisions had been set forth herein in full.
7. This Warrant need not be changed because of any change in the
Exercise Price or in the number of shares of Common Stock purchased hereunder.
8. The terms defined in this paragraph, whenever used in this Warrant,
shall, unless the context otherwise requires, have the respective meanings
hereinafter specified. The term "Common Stock shall mean and include the
Company's Common Stock, $0.001 par value per share, authorized on the date of
the original issue of this Warrant and shall also include in case of any
reorganization, reclassification, consolidation, merger or sale of assets of the
character referred to in paragraph 4 hereof, the stock, securities or assets
provided for in such paragraph. The term "Company" shall also include any
successor corporation to MED/WASTE, INC. by merger, consolidation or otherwise.
The term "outstanding" when used with reference to Common Stock shall mean at
any date as of which the number of shares thereof is to be determined, all
issued shares of Common Stock, except shares then owned or held by or for the
account of the Company. The term "1933 Act" shall mean the Securities Act of
1933, or any similar Federal statute, and the rules and regulations of the
Securities and Exchange Commission, or any other Federal agency then
administering such Securities Act, thereunder, all as the same shall be in
effect at the time.
9. This Warrant is exchangeable, upon the surrender hereby by the Holder
at the office or agency of the Company, for new Warrants of like tenor
representing in the aggregate the right to subscribe for and purchase the number
of shares of Common Stock which may be subscribed for and purchased hereunder,
each of such new Warrants to represent the right to subscribe for and purchase
such number of shares of Common Stock as shall be designated by the Holder at
the time of such surrender. Upon receipt of evidence satisfactory to the Company
of the loss, theft, destruction or mutilation of this Warrant or any such new
Warrants and, in the case of any
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<PAGE> 7
such loss, theft, or destruction, upon delivery of a bond of indemnity,
reasonably satisfactory to the Company, or, in the case of any such mutilation,
upon surrender or cancellation of this Warrant or such new Warrants, the Company
will issue to the Holder a new Warrant of like tenor, in lieu of this Warrant or
such new Warrants, representing the right to subscribe for and purchase the
number of shares of Common Stock which may be subscribed for and purchased
hereunder.
10. The Company agrees to use its best efforts to file timely all
reports required to be filed by it pursuant to Section 13 or 15 of the
Securities Exchange Act of 1934, as amended, and to provide such information as
will permit the Holder to sell this Warrant or any shares of Common Stock
acquired upon exercise of this Warrant in accordance with Rule 144 under the
1933 Act.
11. The Company will at no time close its transfer books against the
transfer of this Warrant or of any shares of Common Stock issued or issuable
upon the exercise of this Warrant in any manner which interferes with the timely
exercise of this Warrant. This Warrant shall not entitle the Holder to any
voting rights or any rights as a stockholder of the Company. The rights and
obligations of the Company, of the Holder, and of any holder of shares of Common
Stock issuable hereunder, shall survive the exercise of this Warrant.
12. This Warrant sets forth the entire agreement of the Company and the
Holder of the Common Stock issuable upon the exercise of this Warrant with
respect to the rights of the Holder and the Common Stock issuable upon the
exercise of this Warrant, notwithstanding the knowledge of such Holder of any
other agreement or the provisions of any agreement, whether or not known
to the Holder and the Company represents that there are no agreements
inconsistent with the terms hereof or which purport in any way to bind the
Holder of this Warrant or the Common Stock.
13. The validity, interpretation and performance of this Warrant and
each of its terms and provisions shall be governed by the laws of the State of
New York.
-7-
<PAGE> 8
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer under its corporate seal and to be dated November 7,
1997.
MED/WASTE, INC.
By:_______________________________________
Name: Daniel A. Stauber
Title: President
[CORPORATE SEAL]
-8-
<PAGE> 9
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED ("1933 ACT") OR ANY STATE SECURITIES
LAWS AND SHALL NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED, OR OTHERWISE
TRANSFERRED, WHETHER OR NOT FOR CONSIDERATION, BY THE HOLDER EXCEPT UPON
THE ISSUANCE TO THE COMPANY OF A FAVORABLE OPINION OF ITS COUNSEL OR THE
SUBMISSION TO THE COMPANY OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY
TO COUNSEL FOR THE COMPANY, IN EITHER CASE, TO THE EFFECT THAT ANY SUCH
TRANSFER SHALL NOT BE IN VIOLATION OF THE 1933 ACT AND APPLICABLE STATE
SECURITIES LAWS.
MED/WASTE, INC.
Common Stock Purchase Warrant
to
Purchase Shares
of
Common Stock
This Common Stock Purchase Warrant is issued to:
by MED/WASTE, INC., a Delaware corporation (hereinafter called the "Company",
which term shall include its successors and assigns).
FOR VALUE RECEIVED and subject to the terms and conditions hereinafter
set out, the registered holder of this Warrant as set forth on the books and
records of the Company (the "Holder") is entitled upon surrender of this Warrant
to purchase from the Company
( ) fully paid and nonassessable shares of Common Stock,
$.001 par value (the "Common Stock"), at the Exercise Price (as defined below)
per share.
This Warrant shall expire at the close of business on November 6, 2002.
1. (a) The right to purchase shares of Common Stock represented by this
Warrant may be exercised by the Holder, in whole or in part, by the surrender of
this Warrant (properly endorsed if required) at the principal office of the
Company at 3890 N.W. 132nd Street, Suite K, Opa Locka, Florida 33054 (or such
other office or agency of the Company as it may designate by notice in writing
to the Holder at the address of the Holder appearing on the books of the
Company), and upon payment to the Company, by cash or by certified check or bank
draft, of the Exercise Price for such shares. The Company agrees that the shares
of Common Stock so purchased shall be deemed to be issued to the Holder as the
record owner of such shares of Common Stock as of the close of business Stock as
of the close of business on the date on which
<PAGE> 10
this Warrant shall have been surrendered and payment made for such shares of
Common Stock as aforesaid. Certificates for the shares of Common Stock so
purchased (together with a cash adjustment in lieu of any fraction of a share)
shall be delivered to the Holder within a reasonable time, not exceeding five
(5) business days, after the rights represented by this Warrant shall have been
so exercised, and, unless this Warrant has expired, a new Warrant representing
the number of shares of Common Stock, if any, with respect to which this Warrant
shall not then have been exercised, in all other respects identical with this
Warrant, shall also be issued and delivered to the Holder within such time, or,
at the request of the Holder, appropriate notation may be made on this Warrant
and the same returned to the Holder.
(b) This Warrant may be exercised to acquire, from and after
the date hereof, the number of shares of Common Stock set forth on the first
page hereof; provided, however, the right hereunder to purchase such shares of
Common Stock shall expire at the close of business on November 6, 2002.
2. This Warrant is being issued by the Company to the Holder pursuant
to Common Stock Purchase Agreement dated the date hereof between the Company and
the Holder (the "Purchase Agreement").
3. The Company covenants and agrees that all Common Stock upon issuance
against payment in full of the Exercise Price by the Holder pursuant to this
Warrant will be validly issued, fully paid and nonassessable and free from all
taxes, liens and charges with respect to the issue thereof; and, without
limiting the generality of the foregoing, the Company covenants and agrees that
it will take from time to time all such action as may be requisite to assure
that the par value per share of the Common Stock is at all times equal to or
less than the then effective Exercise Price. The Company further covenants and
agrees that during the period within which the rights represented by this
Warrant may be exercised, the Company will have at all times authorized, and
reserved for the purpose of issue or transfer upon exercise of the rights
evidenced by this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise of the rights represented by this Warrant, and will
procure at its sole expense upon each such reservation of shares the listing
thereof (subject to issuance or notice of issuance) on all stock exchanges on
which the Common Stock is then listed or inter-dealer trading systems on which
the Common Stock is then traded. The Company will take all such action as may be
necessary to assure that 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 may be listed or
inter-dealer trading system on which the Common Stock is then traded. The
Company will not take any action which would result in any adjustment in the
number of shares of Common Stock purchasable hereunder if the total number of
shares of Common Stock issuable pursuant to the terms of this Warrant after such
action upon full exercise of this Warrant and, together with all shares of
Common Stock then outstanding and all shares of Common Stock then issuable upon
exercise of all options and other rights to purchase shares of Common Stock then
outstanding, would exceed the total number of shares of Common Stock then
authorized by the Company's Certificate of Incorporation, as then amended.
-10-
<PAGE> 11
4. The Initial Exercise Price is $3.625 per share of Common Stock
("Initial Exercise Price"). The Initial Exercise Price shall be adjusted as
provided for below in this Section 4 (the Initial Exercise Price, and the
Initial Exercise Price, as thereafter then adjusted, shall be referred to as the
"Exercise Price") and the Exercise Price from time to time shall be further
adjusted as provided for below in this Section 4. Upon each adjustment of the
Exercise Price, the Holder shall thereafter be entitled to receive upon exercise
of this Warrant, at the Exercise Price resulting from such adjustment, the
number of shares of Common Stock obtained by (i) multiplying the Exercise Price
in effect immediately prior to such adjustment by the number of shares of Common
Stock purchasable hereunder immediately prior to such adjustment, and (ii)
dividing the product thereof by the Exercise Price resulting from such
adjustment. The Exercise Price shall be adjusted as follows:
(i) In the case of any amendment to the
Certificate of Incorporation of the Company to change
the designation of the Common Stock or the rights,
privileges, restrictions or conditions in respect to
the Common Stock or division of the Common Stock, this
Warrant shall be adjusted so as to provide that upon
exercise thereof, the Holder shall receive, in lieu of
each Common Stock theretofore issuable upon such
exercise, the kind and amount of shares, other
securities, money and property receivable upon such
designation, change or division by the Holder issuable
upon such exercise had the exercise occurred
immediately prior to such designation, change or
division. This Warrant shall be deemed thereafter to
provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments
provided for in this Section 4. The provisions of this
Subsection 4(i) shall apply in the same manner to
successive reclassifications, changes, consolidations
and mergers.
(ii) If the Company shall at any time subdivide
its outstanding shares of Common Stock into a greater
number of shares of Common Stock, or declare a dividend
or make any other distribution upon the Common Stock
payable in shares of Common Stock, the Exercise Price
in effect immediately prior to such subdivision or
dividend or other distribution shall be proportionately
reduced, and conversely, in case the outstanding shares
of Common Stock shall be combined into a smaller number
of shares of Common Stock, the Exercise Price in effect
immediately prior to such combination shall be
proportionately increased.
(iii) In case the Company shall issue or
otherwise sell or distribute shares of Common Stock for
a consideration per share in cash or property less than
the lesser of the Exercise Price then in effect or the
Market Price (as defined below), the Exercise Price
then in effect shall be reduced by multiplying such
Exercise Price by a fraction, the numerator of which
shall be the number of shares of Common Stock
outstanding immediately prior to such issuance, sale or
distribution plus the number of shares of Common Stock
which the aggregate consideration received by the
Company for such
-11-
<PAGE> 12
issuance, sale or distribution (such consideration, if
other than cash, as reasonably determined by the Board
of Directors of the Company including a majority of the
Directors who are not officers or employees of the
Company or any of its Subsidiaries, whose determination
shall be described in a resolution of the Board of
Directors) would purchase at the Exercise Price per
share and the denominator shall be the number of shares
of Common Stock outstanding immediately after giving
effect to such issuance, sale or distribution. The term
"Market Price" shall mean the average of the closing
bid price for the Common Stock for the five (5)
consecutive trading days ending two (2) trading days
prior to the relevant date that the Company shall issue
or otherwise sell or distribute shares of Common Stock.
(iv) If any capital reorganization or
reclassification of the capital stock of the Company,
or any consolidation or merger of the Company with
another corporation or entity, or the sale of all or
substantially all of the Company's assets to another
corporation or other entity shall be effected in such a
way that holders of shares of Common Stock shall be
entitled to receive stocks, securities, other evidence
of equity ownership or assets with respect to or in
exchange for shares of Common Stock, then, as a
condition of such reorganization, reclassification,
consolidation, merger or sale (except as otherwise
provided below in this Section 4), lawful and adequate
provisions shall be made whereby the Holder shall
thereafter have the right to receive upon the basis and
upon the terms and conditions specified herein, such
shares of stock, securities, other evidence of equity
ownership or assets as may be issued or payable with
respect to or in exchange for a number of outstanding
shares of such Common Stock equal to the number of
shares of Common Stock immediately theretofore
purchasable and receivable upon the exercise of this
Warrant under this Section 4 had such reorganization,
reclassification, consolidation, merger or sale not
taken place, and in any such case appropriate
provisions shall be made with respect to the rights and
interests of the Holder to the end that the provisions
hereof (including, without limitation, provisions for
adjustments of the Exercise Price and of the number of
shares of Common Stock receivable upon the exercise of
this Warrant) shall thereafter be applicable, as nearly
as may be, in relation to any shares of stock,
securities, other evidence of equity ownership or
assets thereafter deliverable upon the exercise hereof
(including an immediate adjustment, by reason of such
consolidation or merger, of the Exercise Price to the
value for the Common Stock reflected by the terms of
such consolidation or merger if the value so reflected
is less than the Exercise Price in effect immediately
prior to such consolidation or merger). Subject to the
terms of this Warrant, in the event of a merger or
consolidation of the Company with or into another
corporation or other entity as a result of which the
number of shares of common stock of the surviving
corporation or other entity issuable to holders of
Common Stock of the Company, is greater or lesser than
the number of shares of Common Stock of the
-12-
<PAGE> 13
Company outstanding immediately prior to such merger or
consolidation, then the Exercise Price in effect
immediately prior to such merger or consolidation shall
be adjusted in the same manner as though there were a
subdivision or combination of the outstanding shares of
Common Stock of the Company. The Company shall not
effect any such consolidation, merger or sale, unless,
prior to the consummation thereof, the successor
corporation (if other than the Company) resulting from
such consolidation or merger or the corporation
purchasing such assets shall assume by written
instrument executed and mailed or delivered to the
Holder, the obligation to deliver to the Holder such
shares of stock, securities, other evidence of equity
ownership or assets as, in accordance with the
foregoing provisions, the Holder may be entitled to
receive or otherwise acquire. If a purchase, tender or
exchange offer is made to and accepted by the holders
of more than fifty (50%) percent of the outstanding
shares of Common Stock of the Company, the Company
shall not effect any consolidation, merger or sale with
the Person having made such offer or with any Affiliate
of such Person, unless prior to the consummation of
such consolidation, merger or sale the Holder of this
Warrant shall have been given a reasonable opportunity
to then elect to receive upon the exercise of this
Warrant the amount of stock, securities, other evidence
of equity ownership or assets then issuable with
respect to the number of shares of Common Stock of the
Corporation in accordance with such offer.
Whenever the Exercise Price shall be adjusted pursuant to this
Section 4, the Company shall issue a certificate signed by its President or Vice
President and by its Treasurer, Assistant Treasurer, Secretary or Assistant
Secretary, setting forth, in reasonable detail, the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated (including a description of the basis on which the Board of
Directors of the Company made any determination hereunder), and the Exercise
Price after giving effect to such adjustment, and shall cause copies of such
certificates to be mailed (by first-class mail, postage prepaid) to the Holder
of this Warrant. The Company shall make such certificate and mail it to the
Holder promptly after each adjustment.
No fractional Common Stock shall be issued in connection with
any exercise of this Warrant, but in lieu of such fractional shares, the Company
shall make a cash payment therefor equal in amount to the product of the
applicable fraction multiplied by the Exercise Price then in effect.
5. In the event the Company grants rights to all shareholders to
purchase Common Stock, the Holder shall have the same rights as if this Warrant
had been exercised immediately prior to such grant.
6. The Holder shall, with respect to the shares of Common Stock
issuable upon the exercise of this Warrant, have the registration rights set
forth in the Purchase Agreement. Such
-13-
<PAGE> 14
registration rights are incorporated herein by this reference as if such
provisions had been set forth herein in full.
7. This Warrant need not be changed because of any change in the
Exercise Price or in the number of shares of Common Stock purchased hereunder.
8. The terms defined in this paragraph, whenever used in this Warrant,
shall, unless the context otherwise requires, have the respective meanings
hereinafter specified. The term "Common Stock shall mean and include the
Company's Common Stock, $0.001 par value per share, authorized on the date of
the original issue of this Warrant and shall also include in case of any
reorganization, reclassification, consolidation, merger or sale of assets of the
character referred to in paragraph 4 hereof, the stock, securities or assets
provided for in such paragraph. The term "Company" shall also include any
successor corporation to MED/WASTE, INC. by merger, consolidation or otherwise.
The term "outstanding" when used with reference to Common Stock shall mean at
any date as of which the number of shares thereof is to be determined, all
issued shares of Common Stock, except shares then owned or held by or for the
account of the Company. The term "1933 Act" shall mean the Securities Act of
1933, or any similar Federal statute, and the rules and regulations of the
Securities and Exchange Commission, or any other Federal agency then
administering such Securities Act, thereunder, all as the same shall be in
effect at the time.
9. This Warrant is exchangeable, upon the surrender hereby by the
Holder at the office or agency of the Company, for new Warrants of like tenor
representing in the aggregate the right to subscribe for and purchase the number
of shares of Common Stock which may be subscribed for and purchased hereunder,
each of such new Warrants to represent the right to subscribe for and purchase
such number of shares of Common Stock as shall be designated by the Holder at
the time of such surrender. Upon receipt of evidence satisfactory to the Company
of the loss, theft, destruction or mutilation of this Warrant or any such new
Warrants and, in the case of any such loss, theft, or destruction, upon delivery
of a bond of indemnity, reasonably satisfactory to the Company, or, in the case
of any such mutilation, upon surrender or cancellation of this Warrant or such
new Warrants, the Company will issue to the Holder a new Warrant of like tenor,
in lieu of this Warrant or such new Warrants, representing the right to
subscribe for and purchase the number of shares of Common Stock which may be
subscribed for and purchased hereunder.
10. The Company agrees to use its best efforts to file timely all
reports required to be filed by it pursuant to Section 13 or 15 of the
Securities Exchange Act of 1934, as amended, and to provide such information as
will permit the Holder to sell this Warrant or any shares of Common Stock
acquired upon exercise of this Warrant in accordance with Rule 144 under the
1933 Act.
11. The Company will at no time close its transfer books against the
transfer of this Warrant or of any shares of Common Stock issued or issuable
upon the exercise of this Warrant in any manner which interferes with the timely
exercise of this Warrant. This Warrant shall not entitle the Holder to any
voting rights or any rights as a stockholder of the Company. The rights
-14-
<PAGE> 15
and obligations of the Company, of the Holder, and of any holder of shares of
Common Stock issuable hereunder, shall survive the exercise of this Warrant.
12. This Warrant sets forth the entire agreement of the Company and the
Holder of the Common Stock issuable upon the exercise of this Warrant with
respect to the rights of the Holder and the Common Stock issuable upon the
exercise of this Warrant, notwithstanding the knowledge of such Holder of any
other agreement or the provisions of any agreement, whether or not known to the
Holder and the Company represents that there are no agreements inconsistent with
the terms hereof or which purport in any way to bind the Holder of this Warrant
or the Common Stock.
13. The validity, interpretation and performance of this Warrant and
each of its terms and provisions shall be governed by the laws of the State of
New York.
-15-
<PAGE> 16
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer under its corporate seal and to be dated November 7,
1997.
MED/WASTE, INC.
By:_______________________________________
Name: Daniel A. Stauber
Title: President
[CORPORATE SEAL]
-16-
<PAGE> 1
Exhibit 4.4
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED ("1933 ACT") OR ANY STATE SECURITIES
LAWS AND SHALL NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED, OR OTHERWISE
TRANSFERRED, WHETHER OR NOT FOR CONSIDERATION, BY THE HOLDER EXCEPT UPON
THE ISSUANCE TO THE COMPANY OF A FAVORABLE OPINION OF ITS COUNSEL OR THE
SUBMISSION TO THE COMPANY OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY
TO COUNSEL FOR THE COMPANY, IN EITHER CASE, TO THE EFFECT THAT ANY SUCH
TRANSFER SHALL NOT BE IN VIOLATION OF THE 1933 ACT AND APPLICABLE STATE
SECURITIES LAWS.
MED/WASTE, INC.
Common Stock Purchase Warrant
to
Purchase Shares
of
Common Stock
This Common Stock Purchase Warrant is issued to:
by MED/WASTE, INC., a Delaware corporation (hereinafter called the "Company",
which term shall include its successors and assigns).
FOR VALUE RECEIVED and subject to the terms and conditions hereinafter
set out, the registered holder of this Warrant as set forth on the books and
records of the Company (the "Holder") is entitled upon surrender of this Warrant
to purchase from the Company
( ) fully paid and nonassessable shares of Common Stock,
$.001 par value (the "Common Stock"), at the Exercise Price (as defined below)
per share.
This Warrant shall expire at the close of business on December 8, 2002.
1. (a) The right to purchase shares of Common Stock represented by this
Warrant may be exercised by the Holder, in whole or in part, by the surrender of
this Warrant (properly endorsed if required) at the principal office of the
Company at 3890 N.W. 132nd Street, Suite K, Opa Locka, Florida 33054 (or such
other office or agency of the Company as it may designate by notice in writing
to the Holder at the address of the Holder appearing on the books of the
Company), and upon payment to the Company, by cash or by certified check or bank
draft, of the Exercise Price for such shares. The Company agrees that the shares
of Common Stock so purchased shall be deemed to be issued to the Holder as the
record owner of such shares of Common Stock as of the close of business
<PAGE> 2
Stock as of the close of business on the date on which this Warrant shall have
been surrendered and payment made for such shares of Common Stock as aforesaid.
Certificates for the shares of Common Stock so purchased (together with a cash
adjustment in lieu of any fraction of a share) shall be delivered to the Holder
within a reasonable time, not exceeding five (5) business days, after the rights
represented by this Warrant shall have been so exercised, and, unless this
Warrant has expired, a new Warrant representing the number of shares of Common
Stock, if any, with respect to which this Warrant shall not then have been
exercised, in all other respects identical with this Warrant, shall also be
issued and delivered to the Holder within such time, or, at the request of the
Holder, appropriate notation may be made on this Warrant and the same returned
to the Holder.
(b) This Warrant may be exercised to acquire, from and after
the date hereof, the number of shares of Common Stock set forth on the first
page hereof; provided, however, the right hereunder to purchase such shares of
Common Stock shall expire at the close of business on December 8, 2002.
2. This Warrant is being issued by the Company to the Holder pursuant
to Common Stock Purchase Agreement dated the date hereof between the Company and
the Holder (the "Purchase Agreement").
3. The Company covenants and agrees that all Common Stock upon issuance
against payment in full of the Exercise Price by the Holder pursuant to this
Warrant will be validly issued, fully paid and nonassessable and free from all
taxes, liens and charges with respect to the issue thereof; and, without
limiting the generality of the foregoing, the Company covenants and agrees that
it will take from time to time all such action as may be requisite to assure
that the par value per share of the Common Stock is at all times equal to or
less than the then effective Exercise Price. The Company further covenants and
agrees that during the period within which the rights represented by this
Warrant may be exercised, the Company will have at all times authorized, and
reserved for the purpose of issue or transfer upon exercise of the rights
evidenced by this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise of the rights represented by this Warrant, and will
procure at its sole expense upon each such reservation of shares the listing
thereof (subject to issuance or notice of issuance) on all stock exchanges on
which the Common Stock is then listed or inter-dealer trading systems on which
the Common Stock is then traded. The Company will take all such action as may be
necessary to assure that 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 may be listed or
inter-dealer trading system on which the Common Stock is then traded. The
Company will not take any action which would result in any adjustment in the
number of shares of Common Stock purchasable hereunder if the total number of
shares of Common Stock issuable pursuant to the terms of this Warrant after such
action upon full exercise of this Warrant and, together with all shares of
Common Stock then outstanding and all shares of Common Stock then issuable upon
exercise of all options and other rights to purchase shares of Common Stock then
outstanding, would exceed the total number of shares of Common Stock then
authorized by the Company's Certificate of Incorporation, as then amended.
-2-
<PAGE> 3
4. The Initial Exercise Price is $4.50 per share of Common Stock
("Initial Exercise Price"). The Initial Exercise Price shall be adjusted as
provided for below in this Section 4 (the Initial Exercise Price, and the
Initial Exercise Price, as thereafter then adjusted, shall be referred to as the
"Exercise Price") and the Exercise Price from time to time shall be further
adjusted as provided for below in this Section 4. Upon each adjustment of the
Exercise Price, the Holder shall thereafter be entitled to receive upon exercise
of this Warrant, at the Exercise Price resulting from such adjustment, the
number of shares of Common Stock obtained by (i) multiplying the Exercise Price
in effect immediately prior to such adjustment by the number of shares of Common
Stock purchasable hereunder immediately prior to such adjustment, and (ii)
dividing the product thereof by the Exercise Price resulting from such
adjustment. The Exercise Price shall be adjusted as follows:
(i) In the case of any amendment to the
Certificate of Incorporation of the Company to change
the designation of the Common Stock or the rights,
privileges, restrictions or conditions in respect to
the Common Stock or division of the Common Stock, this
Warrant shall be adjusted so as to provide that upon
exercise thereof, the Holder shall receive, in lieu of
each Common Stock theretofore issuable upon such
exercise, the kind and amount of shares, other
securities, money and property receivable upon such
designation, change or division by the Holder issuable
upon such exercise had the exercise occurred
immediately prior to such designation, change or
division. This Warrant shall be deemed thereafter to
provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments
provided for in this Section 4. The provisions of this
Subsection 4(i) shall apply in the same manner to
successive reclassifications, changes, consolidations
and mergers.
(ii) If the Company shall at any time subdivide
its outstanding shares of Common Stock into a greater
number of shares of Common Stock, or declare a dividend
or make any other distribution upon the Common Stock
payable in shares of Common Stock, the Exercise Price
in effect immediately prior to such subdivision or
dividend or other distribution shall be proportionately
reduced, and conversely, in case the outstanding shares
of Common Stock shall be combined into a smaller number
of shares of Common Stock, the Exercise Price in effect
immediately prior to such combination shall be
proportionately increased.
(iii) In case the Company shall issue or
otherwise sell or distribute shares of Common Stock for
a consideration per share in cash or property less than
the lesser of the Exercise Price then in effect or the
Market Price (as defined below), the Exercise Price
then in effect shall be reduced by multiplying such
Exercise Price by a fraction, the numerator of which
shall be the number of shares of Common Stock
outstanding immediately prior to such issuance, sale or
distribution plus the number of shares of Common Stock
which the aggregate consideration received by the
Company for such issuance, sale or distribution (such
consideration, if other than cash, as reasonably
-3-
<PAGE> 4
determined by the Board of Directors of the Company
including a majority of the Directors who are not
officers or employees of the Company or any of its
Subsidiaries, whose determination shall be described in
a resolution of the Board of Directors) would purchase
at the Exercise Price per share and the denominator
shall be the number of shares of Common Stock
outstanding immediately after giving effect to such
issuance, sale or distribution. The term "Market Price"
shall mean the average of the closing bid price for the
Common Stock for the five (5) consecutive trading days
ending two (2) trading days prior to the relevant date
that the Company shall issue or otherwise sell or
distribute shares of Common Stock.
(iv) If any capital reorganization or
reclassification of the capital stock of the Company,
or any consolidation or merger of the Company with
another corporation or entity, or the sale of all or
substantially all of the Company's assets to another
corporation or other entity shall be effected in such a
way that holders of shares of Common Stock shall be
entitled to receive stocks, securities, other evidence
of equity ownership or assets with respect to or in
exchange for shares of Common Stock, then, as a
condition of such reorganization, reclassification,
consolidation, merger or sale (except as otherwise
provided below in this Section 4), lawful and adequate
provisions shall be made whereby the Holder shall
thereafter have the right to receive upon the basis and
upon the terms and conditions specified herein, such
shares of stock, securities, other evidence of equity
ownership or assets as may be issued or payable with
respect to or in exchange for a number of outstanding
shares of such Common Stock equal to the number of
shares of Common Stock immediately theretofore
purchasable and receivable upon the exercise of this
Warrant under this Section 4 had such reorganization,
reclassification, consolidation, merger or sale not
taken place, and in any such case appropriate
provisions shall be made with respect to the rights and
interests of the Holder to the end that the provisions
hereof (including, without limitation, provisions for
adjustments of the Exercise Price and of the number of
shares of Common Stock receivable upon the exercise of
this Warrant) shall thereafter be applicable, as nearly
as may be, in relation to any shares of stock,
securities, other evidence of equity ownership or
assets thereafter deliverable upon the exercise hereof
(including an immediate adjustment, by reason of such
consolidation or merger, of the Exercise Price to the
value for the Common Stock reflected by the terms of
such consolidation or merger if the value so reflected
is less than the Exercise Price in effect immediately
prior to such consolidation or merger). Subject to the
terms of this Warrant, in the event of a merger or
consolidation of the Company with or into another
corporation or other entity as a result of which the
number of shares of common stock of the surviving
corporation or other entity issuable to holders of
Common Stock of the Company, is greater or lesser than
the number of shares of Common Stock of the Company
outstanding immediately prior to such merger or
consolidation, then the Exercise Price in effect
immediately prior to such
-4-
<PAGE> 5
merger or consolidation shall be adjusted in the same
manner as though there were a subdivision or
combination of the outstanding shares of Common Stock
of the Company. The Company shall not effect any such
consolidation, merger or sale, unless, prior to the
consummation thereof, the successor corporation (if
other than the Company) resulting from such
consolidation or merger or the corporation purchasing
such assets shall assume by written instrument executed
and mailed or delivered to the Holder, the obligation
to deliver to the Holder such shares of stock,
securities, other evidence of equity ownership or
assets as, in accordance with the foregoing provisions,
the Holder may be entitled to receive or otherwise
acquire. If a purchase, tender or exchange offer is
made to and accepted by the holders of more than fifty
(50%) percent of the outstanding shares of Common Stock
of the Company, the Company shall not effect any
consolidation, merger or sale with the Person having
made such offer or with any Affiliate of such Person,
unless prior to the consummation of such consolidation,
merger or sale the Holder of this Warrant shall have
been given a reasonable opportunity to then elect to
receive upon the exercise of this Warrant the amount of
stock, securities, other evidence of equity ownership
or assets then issuable with respect to the number of
shares of Common Stock of the Corporation in accordance
with such offer.
Whenever the Exercise Price shall be adjusted pursuant to this
Section 4, the Company shall issue a certificate signed by its President or Vice
President and by its Treasurer, Assistant Treasurer, Secretary or Assistant
Secretary, setting forth, in reasonable detail, the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated (including a description of the basis on which the Board of
Directors of the Company made any determination hereunder), and the Exercise
Price after giving effect to such adjustment, and shall cause copies of such
certificates to be mailed (by first-class mail, postage prepaid) to the Holder
of this Warrant. The Company shall make such certificate and mail it to the
Holder promptly after each adjustment.
No fractional Common Stock shall be issued in connection with
any exercise of this Warrant, but in lieu of such fractional shares, the Company
shall make a cash payment therefor equal in amount to the product of the
applicable fraction multiplied by the Exercise Price then in effect.
5. In the event the Company grants rights to all shareholders to
purchase Common Stock, the Holder shall have the same rights as if this Warrant
had been exercised immediately prior to such grant.
6. The Holder shall, with respect to the shares of Common Stock
issuable upon the exercise of this Warrant, have the registration rights set
forth in the Purchase Agreement. Such registration rights are incorporated
herein by this reference as if such provisions had been set forth herein in
full.
7. This Warrant need not be changed because of any change in the
Exercise Price or in the number of shares of Common Stock purchased hereunder.
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<PAGE> 6
8. The terms defined in this paragraph, whenever used in this Warrant,
shall, unless the context otherwise requires, have the respective meanings
hereinafter specified. The term "Common Stock shall mean and include the
Company's Common Stock, $0.001 par value per share, authorized on the date of
the original issue of this Warrant and shall also include in case of any
reorganization, reclassification, consolidation, merger or sale of assets of the
character referred to in paragraph 4 hereof, the stock, securities or assets
provided for in such paragraph. The term "Company" shall also include any
successor corporation to MED/WASTE, INC. by merger, consolidation or otherwise.
The term "outstanding" when used with reference to Common Stock shall mean at
any date as of which the number of shares thereof is to be determined, all
issued shares of Common Stock, except shares then owned or held by or for the
account of the Company. The term "1933 Act" shall mean the Securities Act of
1933, or any similar Federal statute, and the rules and regulations of the
Securities and Exchange Commission, or any other Federal agency then
administering such Securities Act, thereunder, all as the same shall be in
effect at the time.
9. This Warrant is exchangeable, upon the surrender hereby by the
Holder at the office or agency of the Company, for new Warrants of like tenor
representing in the aggregate the right to subscribe for and purchase the number
of shares of Common Stock which may be subscribed for and purchased hereunder,
each of such new Warrants to represent the right to subscribe for and purchase
such number of shares of Common Stock as shall be designated by the Holder at
the time of such surrender. Upon receipt of evidence satisfactory to the Company
of the loss, theft, destruction or mutilation of this Warrant or any such new
Warrants and, in the case of any such loss, theft, or destruction, upon delivery
of a bond of indemnity, reasonably satisfactory to the Company, or, in the case
of any such mutilation, upon surrender or cancellation of this Warrant or such
new Warrants, the Company will issue to the Holder a new Warrant of like tenor,
in lieu of this Warrant or such new Warrants, representing the right to
subscribe for and purchase the number of shares of Common Stock which may be
subscribed for and purchased hereunder.
10. The Company agrees to use its best efforts to file timely all
reports required to be filed by it pursuant to Section 13 or 15 of the
Securities Exchange Act of 1934, as amended, and to provide such information as
will permit the Holder to sell this Warrant or any shares of Common Stock
acquired upon exercise of this Warrant in accordance with Rule 144 under the
1933 Act.
11. The Company will at no time close its transfer books against the
transfer of this Warrant or of any shares of Common Stock issued or issuable
upon the exercise of this Warrant in any manner which interferes with the timely
exercise of this Warrant. This Warrant shall not entitle the Holder to any
voting rights or any rights as a stockholder of the Company. The rights and
obligations of the Company, of the Holder, and of any holder of shares of Common
Stock issuable hereunder, shall survive the exercise of this Warrant.
12. This Warrant sets forth the entire agreement of the Company and the
Holder of the Common Stock issuable upon the exercise of this Warrant with
respect to the rights of the Holder and the Common Stock issuable upon the
exercise of this Warrant, notwithstanding the knowledge of such Holder of any
other agreement or the provisions of any agreement, whether or not known
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<PAGE> 7
to the Holder and the Company represents that there are no agreements
inconsistent with the terms hereof or which purport in any way to bind the
Holder of this Warrant or the Common Stock.
13. The validity, interpretation and performance of this Warrant and
each of its terms and provisions shall be governed by the laws of the State of
New York.
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<PAGE> 8
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer under its corporate seal and to be dated December 9,
1997.
MED/WASTE, INC.
By:_______________________________________
Name: Daniel A. Stauber
Title: President
[CORPORATE SEAL]
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<PAGE> 1
Exhibit 5.1
[LETTERHEAD OF WALLACE, BAUMAN, FODIMAN & SHANNON, P.A.]
December 17, 1997
Med/Waste, Inc.
3890 N.W. 132nd Street, Suite K
Opa Locka, Florida 33053
Re: MED/WASTE, INC.
REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
We have acted as counsel to Med/Waste, Inc., a Delaware
corporation (the "Company"), in connection with the preparation and filing of
the registration statement on Form S-3 (the "Registration Statement"), with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Act") and the prospectus contained therein with
respect to the public offering of up to 2,872,013 shares of the Company's common
stock, par value $0.001 (the "Shares"). All of the Shares are being offered on
behalf of certain selling stockholders (the "Selling Stockholders"). In
connection with the registration of the Shares, you have requested our opinion
with respect to the matters set forth below.
For purposes of this opinion, we have reviewed the Registration
Statement. In addition, we have examined the originals or copies certified or
otherwise identified to our satisfaction of: (i) the Company's Certificate of
Incorporation, as amended to date; (ii) the By-laws of the Company, as amended
to date; (iii) records of the corporate proceedings of the Company as we deemed
necessary or appropriate as a basis for the opinions set forth herein; and (iv)
those matters of law as we have deemed necessary or appropriate as a basis for
the opinions set forth herein. We have not made any independent review or
investigation of the organization, existence, good standing, assets, business or
affairs of the Company, or of any other matters. In rendering our opinion, we
have assumed without inquiry the legal capacity of all natural persons, the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, the conformity to original documents of all documents submitted to
us as certified or photostatic copies and the authenticity of the originals of
these documents submitted to us as copies.
We have not undertaken any independent investigation to determine
facts bearing on this opinion, and no inference as to the best of our knowledge
of facts based on an independent investigation should be drawn from this
representation. Further, our opinions, as hereinafter expressed, are subject to
the following exceptions, limitations and qualifications: (i) the effect of
bankruptcy, insolvency, fraudulent conveyance, reorganization, arrangement,
moratorium or other similar laws now or hereafter in effect relating to or
affecting the rights and remedies of creditors; and (ii) the effect of general
principles of equity, whether enforcement is considered in a proceeding in
equity or at law and the discretion of the court before which any proceeding
therefore may be brought.
We are admitted to the practice of law only in the State of
Florida and, accordingly, we do not purport to be experts on the laws of any
other jurisdiction nor do we express an opinion as
<PAGE> 2
Med/Waste, Inc.
December 17, 1997
Page 2
to the laws of jurisdictions other than the laws of the State of Florida and the
General Corporation Law of the State of Delaware, as currently in effect.
On the basis of, and in reliance upon, the foregoing, and subject
to the qualifications contained herein, we are of the opinion that:
1. the shares of common stock being sold by the selling
shareholders that are presently outstanding have been duly authorized, legally
issued, fully paid and none assessable; and
2. the shares of Common Stock being sold by the selling
shareholders upon exercise of the warrants or conversion of Series A Preferred
Stock, as more fully described in the Registration Statement will be duly
authorized, legally issued, fully paid and none assessable when the warrants are
exercised and the exercise price is paid to the Company or such shares of Series
A Preferred Stock have been surrendered for conversion.
We hereby consent to your filing this opinion as an exhibit to
the Registration Statement and to the reference to our firm contained under the
heading "Legal Matters."
This opinion is rendered only to you and is solely for your
benefit in connection with the transactions covered hereby. This opinion may not
be relied upon by you for any other purpose or furnished, or quoted to, or
relied upon by any other person, firm or corporation for any purpose without our
prior express written consent.
Respectfully submitted,
WALLACE, BAUMAN,
FODIMAN & SHANNON, P.A.
/s/ Bryan W. Bauman
BRYAN W. BAUMAN
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Med/Waste, Inc. and Subsidiaries
Miami, Florida
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement of our report dated March 7,
1997, relating to the consolidated financial statements of Med/Waste, Inc. and
Subsidiaries appearing in the Company's Annual Report on Form 10-KSB for the
year ended December 31, 1996.
We also consent to the reference to us under the caption "Experts" in the
Prospectus.
Miami, Florida
December 18, 1997 BDO Seidman, LLP
