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Exhibit 4.3
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT") AND
APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM.
MED/WASTE, INC.
SAFETY DISPOSAL SYSTEM, INC.
THE XXXXX GROUP, INC.
SAFETY DISPOSAL SYSTEM OF
SOUTH CAROLINA, INC.
10% Convertible Redeemable Debenture Due July 1, 2000
No. R-_____ US$_________
Med/Waste. Inc., a Delaware corporation, Safety Disposal System,
Inc., a Florida corporation, The Xxxxx Group, Inc., an Ohio corporation and
Safety Disposal System of South Carolina, Inc., a South Carolina corporation
(collectively, the "Issuer"), for value received, hereby jointly and severally
promise to pay to _______________________________________________, or registered
assigns, the principal sum of ________________ (US$_________) Dollars on July 1,
2000 (the "Maturity Date"), and to pay interest thereon from the date of
issuance or from the most recent Interest Payment Date (as hereinafter defined)
to which interest has been paid, semi-annually in arrears on July I and January
I in each year, commencing the date hereof (each an "Interest Payment Date") at
the rate of ten (10%) percent per annum until the principal hereof is paid, and
(to the extent that the payment of such interest shall be legally enforceable)
at the rate of fifteen (15%) percent per annum on any overdue principal and on
any overdue installment of interest. The interest so payable, and punctually
paid, on any Interest Payment Date will be paid to the person (the "Registered
Holder") in whose name this Security is registered at the close of business on
June 15 or December 15 (whether or not a business day) as the case may be (each
a "Regular Record Date"), next preceding such Interest Payment Date. Interest
shall be computed on the basis of the actual number of days elapsed and the
actual number of days in the relevant period.
If this Security is converted into shares of common stock, $.001
par value per share, of Med/Waste, Inc. (the "Common Stock") pursuant to
Sections 10 or 11 below: (A) on or prior to the initial Regular Record Date,
interest shall be calculated through and including the date of conversion and
shall be paid on such date; or (B) after any (i) Interest Payment Date and on or
prior to the next Regular Record Date, interest whose Stated Maturity is on the
next Interest Payment Date shall be paid on the date of conversion calculated,
however, only through the date of conversion, and such interest shall be paid to
the Person in whose name this Security is registered at the close of business on
the date of conversion; or (ii) Regular Record Date and on or prior to the next
succeeding Interest Payment Date, interest whose Stated Maturity is on such
Interest Payment Date shall be paid on such Interest Payment Date calculated,
however, only through the date of conversion, notwithstanding such conversion,
and such interest shall be paid to the Person in whose name this Security is
registered at the close of business on such Regular Record Date.
Principal of this Security shall be payable at the earliest of
the Maturity Date, Redemption Date or Acceleration Date against surrender hereof
at the principal executive offices of the Issuer in the United States. Payments
of principal and of any interest on this Security shall be made in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of pubic and private debts. Payments of principal of this
Security shall be made against surrender hereof, and payments of interest on
this Security shall be made, in accordance with the foregoing and subject to
applicable laws and regulations, by check mailed on or before the due date for
such payment to the person entitled thereto at such person's address appearing
on the Security Register or to such other address as the Registered Holder may
have previously given notice to the Issuer in writing. Interest
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shall accrue and be payable on this Security through the earlier of the Maturity
Date or Redemption Date. If the principal on this Security is accelerated,
interest shall accrue and be payable until the date of payment. The Issuer
covenants that until this Security has been delivered to it for cancellation, or
monies sufficient to pay the principal of and interest in this Security have
been made available for payment and paid, it will at all times maintain at its
principal executive offices in the United States an office or agency for the
payment of the principal of and interest on the Securities as herein provided.
1. This Security is one of a duly authorized issue of securities
of the Issuer (herein called the "Securities"), designated as "10% Convertible
Redeemable Debentures Due July 1 2000", limited in aggregate principal amount to
$3,000,000. The Securities have been offered and sold pursuant to Med/Waste,
Inc.'s Confidential Private Placement Memorandum dated January 7, 1997 (the
"Memorandum").
The obligations of the Issuer hereunder are not secured by any
mortgage, pledge, encumbrance, security agreement or other security device and
only the full faith and credit of the Issuer are pledged for the payment of all
principal and interest due under this Security. The Securities are joint and
several direct, unconditional and general obligations of the Issuer and will
rank equally with all other evidences of unsecured and unsubordinated
indebtedness of the Issuer.
2. The Securities are issuable only in fully registered form and
in minimum authorized denominations of $10,000 and any integral multiple of
$1,000 in excess thereof.
3. So long as any Securities remain outstanding, the Issuer shall
maintain at its principal executives offices in the United States an office or
agency where Securities may be presented or surrendered for payment, where
Securities may be surrendered for registration of transfer or exchange, where
Securities may be surrendered for conversion pursuant to Sections 9 or 10
hereof, and where notices and demands to or upon the Issuer in respect of the
Securities may be served. The Issuer will at all times act as its own security
registrar and paying and transfer agent for such purposes and agrees to cause to
be kept at such office a register (the "Security Register") in which, subject to
such reasonable regulations as it may prescribe, the Issuer will provide for the
registration of Securities and registration of transfers of Securities. As of
the date this Security was originally issued, such principal executive offices
of the Issuer were located at 0000 X.X. 000xx Xxxxxx, Xxxxx X, Xxx Xxxxx,
Xxxxxxx 00000. The Issuer shall not change the location of its principal
executive offices unless Issuer provides all Registered Holders with no less
than thirty (30) days prior written notice.
The transfer of a Security is registrable on the Security
Register upon surrender of such Security at the principal executive offices of
Issuer duly endorsed by, or accompanies by a written instrument of transfer in
form reasonably satisfactory to the Issuer duly executed by, the Registered
Holder thereof, or the Registered Holder's attorney duly authorized in writing,
together with any certifications and re presentations which Issuer may
reasonably require to reflect compliance with all applicable securities laws,
rules and regulations and the due authorization of the transaction. Upon such
surrender of this Security for registration of transfer, the Issuer shall
execute and deliver, in the name of the designated transferee or transferees,
one or more new Securities, dated the date of the execution thereof, of any
authorized denominations and of a like tenor, form and aggregate principal
amount.
At the option of the Registered Holder, upon request confirmed in
writing, Securities may be exchanged for Securities of any authorized
denominations and of a like tenor, form and aggregate principal amount upon
surrender of the Securities to be exchanged at the principal executive offices
of the Issuer. Whenever any Securities are so surrendered for exchange, the
Issuer shall execute and deliver the Securities which the Registered Holder
making the exchange is entitled to receive. Any registration of transfer or
exchange will be effected only upon the Issuer being reasonably satisfied with
the documents of title and identity of the person making the request and subject
to compliance with applicable Federal and state securities laws.
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All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Issuer, evidencing
the same debt, and entitled to the same benefits, as the Securities surrendered
upon such registration of transfer or exchange. No service or other charges
shall be made for any registration of transfer or exchange, but the Issuer may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Issuer may treat the person in whose name this Security is
registered as the owner hereof for all purposes, whether or not this Security be
overdue, and the Issuer shall not be affected by notice to the contrary.
4. In any case where the due date for the payment of the
principal of or interest on, any Security shall be at any place of payment a day
on which banking institutions are authorized or obligated by law to close, then
payment of principal or interest, as the case may be, need not be made on such
date at such place but may be made on the next succeeding day at such place
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 for such
payment, and interest shall accrue and be paid for the period through and
including the date of payment.
5. (a) The Issuer shall pay all stamp and other duties and taxes,
if any, which may be imposed by the United States or any political subdivision
thereof, any state or any political subdivision thereof or any other taxing
authority with respect to the issuance of the Securities.
(b) Except as specifically provided in this Security, the
Issuer shall not be required to make any payment with respect to any tax,
assessment or other governmental charge imposed by any government or any
political subdivision or taxing authorities thereof or therein.
6. The Issuer represents and warrants to the Registered Holder,
as follows:
(a) Each Issuer is a corporation duly organized, existing and
in good standing under the laws of its state of incorporation and has the
corporate power to conduct the business which it conducts and proposes to
conduct.
(b) The execution, delivery and performance of the Securities
by the Issuer will have been duly approved by the Board of Directors of each
Issuer and all other actions required to authorize and effect the offer and sale
of the Securities will have been duly taken and approved.
(c) The Securities and the Conversion Shares have been duly
and validly authorized. The Securities and Conversion Shares, when issued and
paid for in accordance with the terms hereof, will be fully paid and
non-assessable and valid and binding obligations of the Issuer (or Med/Waste,
Inc. in the case of the Conversion Shares) enforceable in accordance with their
respective terms.
(d) Med/Waste, Inc. will at all times that there are
Outstanding Securities have authorized and reserved a sufficient number of
shares of Common Stock to provide for conversion of the Securities into shares
of Common Stock.
(e) Issuer has obtained all licenses, permits and other
governmental authorizations necessary to the conduct of its business; such
licenses, permits and other governmental authorizations obtained are in full
force and effect; and Issuer is in all material respects complying therewith.
(f) Issuer knows of no pending or threatened legal or
governmental proceedings to which Issuer is a party which could materially
adversely affect the business, property, financial condition or operations of
the Issuer.
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(g) The Issuer is not in violation of or default under, nor
will the execution and delivery of the Securities, the issuance of the Common
Stock upon conversion of the Securities and the incurrence of the obligations
herein and therein set forth and the consummation of the transactions herein or
therein contemplated, result in a violation of, or constitute a default under
the certificate of incorporation or by-laws, the performance or observance of
any material obligations, agreement, covenant or condition contained in any
bond, debenture, note or other evidence or indebtedness or in any material
contract, indenture, mortgage, loan agreement, lease, joint venture or other
agreements or instrument to which any Issuer is a party or by which it or any of
its properties may be bound or in violation of any material order, rule,
regulation, writ, injunction or decree of any government, governmental
instrumentality or court, domestic or foreign.
(h) The financial information contained in the Memorandum
presents fairly the financial condition of the Issuer as of the date and for the
periods indicated.
7. Each Issuer hereby jointly and severally covenants and agrees
that for so long as any of the Securities shall remain outstanding:
(a) it will duly and punctually pay the principal of and any
interest on the Securities in accordance with the terms hereof,
(b) it will, on each due date for payment of the principal of
or any interest on any of the Securities, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
and any interest so becoming due until such sums shall have been paid to such
Persons;
(c) it will do or cause to be done all things necessary to
preserve and keep in full force and effect its existence, rights (charters and
statutory) and franchises;
(d) it will cause all material properties used or useful in
the conduct of its business or the business of its subsidiaries to be maintained
and kept in good condition, repair and working order and supplied with all
necessary equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the reasonable
judgment of the Issuer may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
PROVIDED, HOWEVER, that the foregoing shall not prevent the Issuer from
discontinuing the operation or maintenance of any such properties if such
discontinuance is, in the reasonable judgment of the Issuer, desirable in the
conduct of its business or the business of any of its subsidiaries, and not
disadvantageous in any material respect to the holders of Securities; and,
PROVIDED, FURTHER that the failure to comply herewith shall not be deemed a
breach hereof unless such failure would have a material adverse effect on the
business, financial condition or results of operations of such Issuer and its
subsidiaries, taken as a whole (a "Material Adverse Effect"),
(e) it will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (I) all taxes, assessments
and governmental charges levied or imposed upon the Issuer or any of its
subsidiaries, or upon the income, profits or property of the. Issuer or any
subsidiaries, and (ii) all lawful claims for labor, materials and supplies
which, if unpaid, might by law become a lien upon the property of the Issuer or
any subsidiaries- PROVIDED, HOWEVER, that the Issuer shall not be required to
pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings; and, PROVIDED, FURTHER, that the failure
to comply herewith shall not be deemed a breach if it would not have a Material
Adverse Effect;
(f) it shall not without the prior written consent of the
holders of at least sixty-six and two-thirds (66 2/3%) percent of the aggregate
principal amount of the Securities then Outstanding, materially alter the nature
of its business or that of its subsidiaries in any manner, or dispose of the
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business or assets of the Issuer or its subsidiaries, either as a whole or any
substantial part thereof, which would have a material adverse effect on (i) its
ability to perform its obligations under the Securities, or (ii) the business,
financial conditions or results of operations of the Issuer and its
subsidiaries;
(g) it shall furnish to each Registered Holder of Securities a
copy of all documents it is required to send to its shareholders at the time the
same are sent to shareholders, including, without limitation, annual reports and
proxy statements;
(h) as soon as it becomes aware of the same, it shall give
written notice to each Registered Holder of Securities of any event or
occurrence which by itself or with notice or lapse of time or both would entitle
the holders of the Securities to declare the principal of and any interest on
the Securities immediately due and payable pursuant to Section 14 hereof,
(i) it will promptly obtain and maintain from time to time all
authorizations, permits, approvals, consents, licenses and exemptions which are
required under any applicable law or regulation to enable it to perform all of
its payment, conversion (as to Med/Waste, Inc. only) and other material
obligations under the Securities or which may be required for the validity or
enforceability of the Securities; provided, however, that the failure to obtain
and maintain such authorizations, permits, approvals, consents, licenses and
exemptions as to material obligations other than payment and conversion shall
not constitute a breach of this provision unless such noncompliance materially
adversely affects the Issuer's ability to comply with its obligations under the
Securities;
(j) it will, and it will cause its subsidiaries to, duly and
punctually comply with and observe all statutes now or hereafter in force and
all ordinances, regulation and bylaws thereunder and all requirements and orders
of any government or other public authority; PROVIDED, however, that any
non-compliance with any such statute, ordinance, regulation or by-law shall not
constitute a breach of this provision unless such non-compliance materially
adversely affects the Issuer's ability to comply with its obligations under the
Securities;
(k) it shall permit any representative of any Registered Holder
or Holders of at least $500,000 aggregate principal amount of the Securities to
make inspections of, and to report on, the property of, and business operations
being carried out by, the Issuer or any of its subsidiaries upon reasonable
notice and at reasonable times;
(l) it shall maintain and keep in force with reputable insurers
and in adequate amounts, property, casualty, third party liability, business
interruption and all such other insurances as would prudently be effected and
maintained in the case of a company carrying on a business similar to that of
the Issuer and its subsidiaries;
(m) it shall not:
(i) declare or pay any cash dividends on its
Common Stock or purchase, redeem or otherwise acquire or retire
for value any shares of Common Stock;
(ii) consolidate with or merge into any other
Person, where the Issuer is not the surviving corporation or
convey, transfer, lease or otherwise dispose of all or
substantially all of its assets, except in compliance with the
terms and conditions set forth in Section 10(d)(iv) below;
(iii) create any new stock option plans, amend any
existing stock option plans to authorize additional stock options
or otherwise issue options to purchase shares of Common Stock or
other securities convertible into shares of Common
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Stock (other than pursuant to existing stock option plans),
except that the Issuer may issue stock options to employees,
whether pursuant to a new stock option plan, amendment to an
existing plan or otherwise, to purchase up to 500,000 shares of
Common Stock;
(iv) issue or otherwise create any Indebtedness of
the Issuer and its subsidiaries senior in ranking to the
Securities in the aggregate to exceed $5,000,000; provided,
however, that the $5,000,000 limit shall not apply with respect
to: (A) Indebtedness created in connection with the lease of
Autoclaves to customers which are secured by operating leases and
the Autoclaves themselves and by no other assets of the Issuer,
(B) Indebtedness in connection with acquisitions of assets where
the security for such Indebtedness is limited to the acquired
assets, and (C) Indebtedness existing in entities that are
acquired by the Issuer, provided that such Indebtedness is not
extended to any other assets of the Issuer;
(v) except for loans existing at January 1, 1997
as disclosed in the Memorandum, make any loans to any officers,
directors or shareholders beneficially owning five (5%) percent
or more of the Common Stock ("5% Holders") or amend any existing
loan to increase the principal balance or extend the payment
terms thereof, provided, however, that the Issuer may, in the
aggregate, make loans of up to $250,000 to officers, directors
and 5% Holders not including loans outstanding as of the date
hereof,
(vi) sell, gift, transfer, assign or otherwise
issue shares of Common Stock to any officer, director or 5%
Holder, unless: (A) issued pursuant to a stock option existing at
January 1, 1997; (B) issued for cash at a purchase price equal to
or greater than the closing bid price for the Common Stock on the
day prior to issuance; or (C) issued to an officer, director or
5% Holder as payment for services rendered where the Board of
Directors has reasonably determined the value of such services
and sets forth its determination in a resolution;
(vi) create, purchase or otherwise acquire any
new subsidiary, unless such subsidiary shall contemporaneously
with such creation, purchase or acquisition become a primary
obligor on all Outstanding Securities and send to all Registered
Holders written confirmation thereof,
(vii) incur or otherwise be liable for any
Contingent Obligation, other than with respect to the other
Issuers or in connection with the leasing of Autoclaves; or
(ix) invest in the securities of any Person other
than the subsidiaries except for short-term government
obligations and money market accounts.
8. (a) As soon as possible after the Final Closing (as defined in
the Memorandum), but in no event later than six (6) months after the Initial
Closing (as defined in the Memorandum) (regardless of whether the maximum number
of Securities shall have been sold), Med/Waste, Inc. shall, at its sole cost and
expense, file a registration statement on the appropriate form under the 1933
Act with the Securities and Exchange Commission ("SEC") covering all of the
Conversion Shares and such additional shares of Common Stock that may be issued
pursuant to the anti-dilution rights contained in the Securities and as set
forth in this Section 8(a) (collectively, the "Registrable Securities"), time
being of the essence. Med/Waste, Inc. will use its best efforts to have such
registration statement declared effective as soon as possible thereafter, and
shall keep such registration statement current and effective for at least three
(3) years from the effective date thereof or until such earlier date as all of
the Registrable Securities registered pursuant to such registration statement
shall have been sold or
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otherwise transferred. Notwithstanding anything to the contrary contained
herein, if such registration statement shall not be declared effective within
six (6) months after the Initial Closing (regardless of whether the maximum
number of Securities shall have been sold), then the Conversion Price shall be
reduced (and concomitantly the number of shares of Common Stock issuable upon
the conversion of the Securities shall increase) by the percentage resulting
from multiplying five (5%) percent by the number of months, or any part thereof,
beyond said six (6) month period until the initial registration statement
described herein covering the Registrable Securities is declared effective.
(b) In the event Med/Waste, Inc. effects any registration
under the 1933 Act of any Registrable Securities pursuant to Paragraphs 8(a)
above or 8(g) below, the Issuer shall indemnify, to the extent permitted by law,
and hold harmless any Registered Holder whose Registrable Securities are
included in such registration statement (each, a "Seller"), any underwriter, any
officer, director, employee or agent of any Seller or underwriter, and each
other person, if any, who controls any Seller or underwriter within the meaning
of Section 15 of the 1933 Act, against any losses, claims, damages or
liabilities, judgment, fines, penalties, costs and expenses, joint or several,
or actions in respect thereof (collectively, the "Claims"), to which each such
indemnified party becomes subject, under the 1933 Act or otherwise, insofar as
such Claims arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration statement or
prospectus or any amendment or supplement thereto or any document filed under a
state securities or blue sky law (collectively, the "Registration Documents") or
insofar as such Claims arise out of or are based upon the omission or alleged
omission to state in any Registration Document a material fact required to be
stated therein or necessary to make the statements made therein not misleading,
and will reimburse any such indemnified party for any legal or other expenses
reasonably incurred by such indemnified party in investigating or defending any
such Claim; provided that the Issuer shall not be liable in any such case to the
extent such Claim is based upon an untrue statement or alleged untrue statement
of a material fact or omission or alleged omission of a material fact made in
any Registration Document in reliance upon and in conformity with written
information furnished to Med/Waste, Inc. by or on behalf of any indemnified
party specifically for use in the preparation of such Registration Document.
(c) In connection with any registration statement in which any
Seller is participating, each Seller, severally and not jointly, shall
indemnify, to the extent permitted by law, and hold harmless Med//Waste, Inc.,
each of its directors, each of its officers who have signed the registration
statement each other person, if any, who controls Med/Waste, Inc. within the
meaning of Section 15 of the 1933 Act, each other Seller and each underwriter,
any officer, director, employee or agent of any such other Seller or underwriter
and each other person, if any, who controls such other Seller or underwriter
within the meaning of Section 15 of the 1933 Act against any Claims to which
each such indemnified party may become subject under the 1933 Act or otherwise,
insofar as such Claims (or actions in respect thereof) are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
Registration Document or insofar as any Claims are based upon the omission or
alleged omission to state in any Registration Document a material fact required
to be stated therein or necessary to make the statements made therein not
misleading, and will reimburse any such indemnified party for any legal or other
expenses reasonably incurred by such indemnified party in investigating or
defending any such claim; provided, however, that such indemnification or
reimbursement shall be payable only if, and to the extent that, any such Claim
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any Registration Document in reliance
upon and in conformity with written information furnished to Med/Waste, Inc. by
the Seller specifically for use in the preparation thereof.
(d) Any person entitled to indemnification under Paragraphs
8(b) or 8(c) above shall notify promptly the indemnifying party in writing of
the commencement of any Claim if a claim for indemnification in respect thereof
is to be made against an indemnifying party under this Paragraph 8(d), but the
omission of such notice shall not relieve the indemnifying party from any
liability which it may
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have to any indemnified party otherwise than under Paragraph 8(b) or 8(c) above,
except to the extent that such failure shall materially adversely affect any
indemnifying party or its rights hereunder. In case any action is brought
against the indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it chooses, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party; and, after notice from
the indemnifying party to the indemnified party that it so chooses, the
indemnifying party shall not be liable for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
(i) if the indemnifying party fails to take reasonable' steps necessary to
defend diligently the Claim within twenty (20) days after receiving notice from
the indemnified party that the indemnified party believes it has failed to do
so; (ii) if the indemnified party who is a defendant in any action or proceeding
which is also brought against the indemnifying party reasonably shall have
concluded that there are legal defenses available to the indemnified party which
are not available to the indemnifying party; or (iii) if representation of both
parties by the same counsel is otherwise inappropriate under applicable
standards of professional conduct, the indemnified party shall have the right to
assume or continue its own defense as set forth above (but with no more than one
firm of counsel for all indemnified parties in each jurisdiction, except to the
extent any indemnified party or parties reasonably shall have concluded that
there are legal defenses available to such party or parties which are not
available to the other indemnified parties or to the extent representation of
all indemnified parties by the same counsel is otherwise inappropriate under
applicable standards of professional conduct) and the indemnifying party shall
be liable for any reasonable expenses therefor; provided, that no indemnifying
party shall be subject to any liability for any settlement of a Claim made
without its consent (which may not be unreasonably withheld, delayed or
conditioned). If the indemnifying party assumes the defense of any Claim
hereunder, such indemnifying party shall not enter into any settlement without
the consent of the indemnified party if such settlement attributes liability to
the indemnified party (which consent may not be unreasonably withheld, delayed
or conditioned).
(e) If for any reason the indemnity provided in Paragraphs
8(b) or 8(c) above is unavailable, or is insufficient to hold harmless, an
indemnified party, then the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of any Claim in such
proportion as is appropriate to reflect the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other from
the transactions contemplated by this Agreement. If, however, the allocation
provided in the immediately preceding sentence is not permitted by applicable
law, or if the indemnified party failed to give the notice required by Paragraph
8(d) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
indemnifying party and the indemnified party as well as any other relevant
equitable considerations. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or
payable in respect of any Claim shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such Claim. Notwithstanding the foregoing, no
underwriter or controlling person thereof, if any, shall be required to
contribute, in respect of such underwriter's participation as an underwriter in
the offering, any amount in excess of the amount by which the total price at
which the Registrable Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000
Xxx) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The obligation of any underwriters to
contribute pursuant to this paragraph (e) shall be several in proportion to
their respective underwriting commitments and not joint.
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(f) The provisions of Paragraphs 8(b) through 8(e) of this
Agreement shall be in addition to any other rights to indemnification or
contribution which any indemnified party may have pursuant to law or contract
and shall remain operative and in full force and effect regardless of any
investigation made or omitted by or on behalf of any indemnified party and shall
survive the transfer of the Registrable Securities by any such party.
(g) The Registered Holders shall have certain "piggyback"
registration rights with respect to the Registrable Securities as hereinafter
provided:
A. If at any time after. the date of the Initial Closing,
Med/Waste, Inc. shall file with the SEC a registration statement under the 1933
Act registering any shares of Common Stock owned by any person or entity,
Med/Waste, Inc. shall give' written notice to each Registered Holder thereof
prior to such filing.
B. Within fifteen (15) days after such notice from
Med/Waste, Inc., each Registered Holder shall give written notice to Med/Waste,
Inc. whether or not the Registered Holder desires to have all of the Registered
Holder's Registrable Securities included in the registration statement. If a
Registered Holder fails to give such notice within such period, such Registered
Holder shall not have the right to have such Registered Holder's Registrable
Securities registered pursuant to such registration statement. If a Registered
Holder gives such notice, then Med/Waste, Inc. shall include such Registered
Holder's Registrable Securities in the registration statement at Med/Waste,
Inc.'s sole cost and expense, subject to the remaining terms of this Paragraph
8(g).
C. If the registration statement relates to an
underwritten offering, and the underwriter shall determine in writing that the
total number of shares of, Common Stock to be included in the offering,
including the Registrable Securities, shall exceed the amount which the
underwriter deems to be appropriate for the offering, the number of shares of
the Registrable Securities shall be reduced in the same proportion as the
remainder of the shares in the offering and each Registered Holder's Registrable
Securities included in such registration statement will be reduced
proportionately. For this purpose, if other securities in the registration
statement are derivative securities, their underlying shares shall be included
in the computation. The Registered Holders shall enter into such agreements as
may be reasonably required by the underwriters and the Registered Holders shall
pay to the underwriters commissions relating to the sale of their respective
Registrable Securities.
D. The Registered Holders shall have two (2) opportunities
to have the Registrable Securities registered under this Paragraph 8(g).
E. The Registered Holder shall furnish in writing to
Med/Waste, Inc. such information. as Med/Waste, Inc. shall reasonably require in
connection with a registration statement.
(h) If and whenever Med/Waste, Inc. is required by the
provisions of this Paragraph 8 to use its best efforts to register any
Registrable Securities under the 1933 Act, Med/Waste, Inc. shall, as
expeditiously as possible under the circumstances:
A. Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective as soon as possible and remain
effective.
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10
B. Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement current and to
comply with the provisions of the 1933 Act, and any regulations promulgated
thereunder, with respect to the sale or disposition of all Registrable
Securities covered by the registration statement required to effect the
distribution of the securities, but in no event shall Med/Waste, Inc. be
required to do so for a period of more than three (3) years following the
effective date of the registration statement.
C. Furnish to the Sellers participating in the offering,
copies (in reasonable quantities) of summary, preliminary, final, amended or
supplemented prospectuses, in conformity with the requirements of the 1933 Act
and any regulations promulgated thereunder, and other documents as reasonably
may be required in order to facilitate the disposition of the securities, but
only while Med/Waste, Inc. is required under the provisions hereof to keep the
registration statement current.
D. Use its best efforts to register or qualify the
Registrable Securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions of the United States as the
Sellers participating in the offering shall reasonably request, and do any and
all other acts and things which may be reasonably necessary to enable each
participating Seller to consummate the disposition of the Registrable Securities
in such jurisdictions.
E. Notify each Seller selling Registrable Securities, at
any time when a prospectus relating to any such Registrable Securities covered
by such registration statement is required to be delivered under the 1933 Act,
of Med/Waste, Inc.'s becoming aware that the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing, and promptly prepare and furnish to each such
Seller selling Registrable Securities a reasonable number of copies of a
prospectus supplemented or amended so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing.
F. As soon as practicable after the effective date of the
registration statement, and in any event within eighteen (18) months thereafter,
make generally available to Sellers participating in the offering an earnings
statement (which need not be audited) covering a period of at least twelve (12)
consecutive months beginning after the effective date of the registration
statement which earnings statement shall satisfy the provisions of Section 11(a)
of the 1933 Act, including, at Med/Waste, Inc.'s option, Rule 158 thereunder. To
the extent that Med/Waste, Inc. files such information with the SEC in
satisfaction of the foregoing, Med/Waste, Inc. need not deliver the above
referenced earnings statement to Seller.
G. Upon request, deliver promptly to counsel of each
Seller participating in the offering copies of all correspondence between the
SEC and Med/Waste, Inc., its counsel or auditors and all memoranda relating to
discussions with the SEC or its staff with respect to the registration statement
and permit each such Seller to do such investigation at such Seller's sole cost
and expense, upon reasonable advance notice, with respect to information
contained in or omitted from the registration statement as it deems reasonably
necessary. Each Seller agrees that it will use its best efforts not to interfere
unreasonably with Med/Waste, Inc.'s business when conducting any such
investigation and each Seller shall keep any such information received pursuant
to this Paragraph G confidential.
H. Provide a transfer agent and registrar located in the
United States for all such Registrable Securities covered by such registration
statement not later than the effective date of such registration statement.
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11
I. List the Registrable Securities covered by such
registration statement on such exchanges and/or on the NASDAQ as the Common
Stock is then currently listed upon.
J. Pay all Registration Expenses incurred in connection
with a registration of Registrable Securities, whether or not such registration
statement shall become effective- provided that each Seller shall pay all
underwriting discounts, commissions and transfer taxes, and their own counsel
fees, if any, relating to the sale or disposition of such Seller's Registrable
Securities pursuant to a registration statement. As used herein, "Registration
Expenses" means any and all reasonable and customary expenses incident to
performance of or compliance with the registration rights set forth herein,
including, without limitation, (i) all SEC and stock exchange or National
Association of Securities Dealers, Inc. registration and filing fees, (ii) all
fees and expenses of complying with state securities or blue sky laws (including
reasonable fees and disbursements of counsel for the underwriters in connection
with blue sky qualifications of the Registrable Securities but no other expenses
of the underwriters or their counsel), (iii) all printing, messenger and
delivery expenses, and (iv) the reasonable fees and disbursements of counsel for
Med/Waste, Inc. and Med/Waste, Inc.'s independent public accountants.
(i) Med/Waste, Inc. acknowledges that there is no
adequate remedy at law for failure by it to comply with the
provisions of this Paragraph 8 and that such failure would not be
adequately compensable in damages, and therefore agrees that its
agreements contained in this Paragraph 8 may be specifically
enforced. In the event that Med/Waste, Inc. shall fail to file
such registration statement when required pursuant to Paragraph
8(a) above or to keep any registration statement effective as
provided in this Paragraph or otherwise fails to comply with its
obligations and agreements in this Paragraph 8, then, in addition
to any other rights or remedies the Registered Holders may have
at law or in equity, including without limitation, the right of
rescission, the Issuer shall indemnify and hold harmless the
Registered Holders from and against any and all manner or loss
which they may incur as a result of such failure. In addition,
the Issuer shall also reimburse the Registered Holders for any
and all reasonable legal fees and expenses incurred by them in
enforcing their rights pursuant to this Paragraph 8, regardless
of whether any litigation was commenced.
9. The Issuer can redeem all, but not less than all, Outstanding
Securities at the Redemption Price at any time after December 31, 1997, provided
that on the- day that the Redemption Notice is given by the Issuer to a
Registered Holders of the Outstanding Securities and on the Redemption Date, the
following conditions are satisfied: (i) the Conversion Shares have been
registered by Med/Waste, Inc. pursuant to the 1933 Act as provided for in
Section 8 of the Securities and such registration is then currently effective-
and (ii) the average of the closing bid price per share 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 Med/Waste, Inc.'s Common Stock then trades, during
twenty (20) trading days out of the thirty (30) consecutive trading days ending
five (5) trading days prior to the' date the Redemption Notice is sent, is at
least two hundred (200%) percent per share of the Conversion Price. Any notice
to redeem ("Redemption Notice") must be given to all Registered Holders no less
than thirty (30) days nor more than forty-five (45) days prior to the date set
forth for redemption ("Redemption Date"). The Redemption Price shall equal the
sum of: (a) the face amount of the Securities; (b) all accrued and unpaid
interest through and including the Redemption Date; and (c) a redemption fee
equal to (I) ten (10%) percent of the face amount of the Securities, if the
Redemption Date is prior to January 1, 1999; or (II) five (5%) percent of the
face amount of the Securities if the Redemption Date is at any time from January
1, 1999 to June 30, 2000. For purposes hereof, the term "Conversion Shares"
shall mean the shares of Common Stock which the Registered Holder would be
entitled to receive upon conversion of Securities pursuant to Section 10 below
or forced conversion pursuant to Section 11 below.
10. (a) Each Registered Holder of Securities may at any time and
from time to time, commencing thirty (30) days after the original issuance of
the Securities, convert all or any amount of
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12
the principal amount of the Securities then owned by such Registered Holder into
shares of Common Stock of Med/Waste, Inc. at a conversion price equal to $3.25
per share of Common Stock, subject to adjustment as provided in this Section 10.
Notwithstanding the giving by the Issuer of the Redemption Notice, the
Registered Holder may exercise the Registered Holder's conversion rights set
forth in this Section 10 at any time up to one (1) business day prior to the
Redemption Date.
(b) The conversion right granted in Section 10(a) hereof
may be exercised only by a Registered Holder of Securities, in whole or in part,
by the surrender of the certificate or certificates representing the Securities
to be converted at the principal executive offices of the Issuer against
delivery of that number of shares of whole Common Stock as shall be computed by
dividing the face amount of the Securities being converted by the Conversion
Price on the Conversion Date. At the time of conversion of Securities, the
Issuer shall pay in cash to the Registered Holder thereof an amount equal to all
accrued and unpaid interest, if any, to and including the Conversion Date. Each
Security surrendered for conversion shall be endorsed by the Registered Holder.
Med/Waste, Inc. will transmit the Common Stock certificates issuable upon
conversion of any Securities and a certificate representing the balance of the
Securities to the Registered Holder via express courier within three (3)
business days after the Conversion Date. The term "Conversion Date" shall mean
the date the original Notice of Conversion and Securities being converted are
received by the Issuer. The term "Notice of Conversion" shall mean the written
notice from the Registered Holder to the Issuer.
(c) All Common Stock which may be issued upon conversion
of the Securities will, upon issuance, be duly issued, fully paid and
non-assessable and free from all taxes, hens, and charges with respect to the
issue thereof At all times that any Securities are Outstanding, Med/Waste, Inc.
shall have authorized and shall have reserved for the purpose of issuance upon
such conversion into Common Stock of all Securities, a sufficient number of
shares of Common Stock to provide for the conversion of all Outstanding
Securities at the then effective Conversion Price. Without limiting the
generality of the foregoing, if, at any time, the Conversion Price is decreased
or increased, the number of shares of Common Stock authorized and reserved for
issuance by Med/Waste, Inc. upon the conversion of the Securities shall be
proportionately increased or decreased, as the case may be.
(d) The Initial Conversion Price is $3.25 per share of
Common Stock ("Initial Conversion Price"). The Initial Conversion Price shall be
adjusted as provided for below in this Section 10(d) (the Initial Conversion
Price, and the Initial Conversion Price, as thereafter then adjusted, shall be
referred to as the "Conversion Price") and the Conversion Price from time to
time shall be further adjusted as provided for below in this Section 10(d). Upon
each adjustment of the Conversion Price, the Registered Holders of the
Securities shall thereafter be entitled to receive upon conversion, at the
Conversion Price resulting from such adjustment, the number of shares of Common
Stock obtained by dividing the face amount of the Securities being converted by
the Conversion Price, as then adjusted. The Conversion Price shall be adjusted
as follows:
(i) In the case of any amendment to the
Certificate of incorporation of Med/Waste, Inc. 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
Securities shall be adjusted so as to provide that upon
conversion thereof the Registered Holder shall receive,
in lieu of each 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 Securities 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 10. The provisions of this
Subsection 10(d)(i) shall apply in the same manner to
successive reclassifications, changes, consolidations and
mergers.
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13
(ii) If Med/Waste, Inc. 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.
(iii) In case Med/Waste, Inc. 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 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 Med/Waste, Inc. for such
issuance, sale or distribution (such consideration, if other than
cash, as reasonably determined by the Board of Directors of
Med/Waste, Inc. including a majority of the Directors who are not
officers or employees of Med/Waste, Inc. 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
"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
Med/Waste, Inc. shall issue or otherwise sell or distribute
shares of Common Stock.
(iv) If any capital reorganization or
reclassification of the capital stock of Med/Waste, Inc., or any
consolidation or merger of Med/Waste, Inc. with another
corporation or entity, or the sale of all or substantially all of
Med/Waste, Inc.'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 10(d)(iv)),
lawful and adequate provisions shall be made whereby the
Registered Holders 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
conversion of Securities under this Section 10 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
Registered 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 Securities) 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
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14
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 Securities,
in the event of a merger or consolidation of Med/Waste, Inc. 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 Med/Waste,
Inc., is greater or lesser than the number of shares of Common
Stock of Med/Waste, Inc. 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
Med/Waste, Inc. Med/Waste, Inc. shall not effect any such
consolidation, merger or sale, unless, prior to the consummation
thereof, the successor corporation (if other than Med/Waste,
Inc.) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume by written
instrument executed and mailed or delivered to the Registered
Holders, the obligation to deliver to such Registered Holders
such shares of stock, securities, other evidence of equity
ownership or assets as, in accordance with the foregoing
provisions, such Registered 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 Med/Waste,
Inc., Med/Waste, Inc. 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 Registered Holders of
Securities shall have been given a reasonable opportunity to then
elect to receive upon the conversion of Securities 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) Whenever the Conversion Price shall be adjusted
pursuant to Section 10(d) hereof, Med/Waste, Inc. 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 Med/Waste, Inc. made any determination
hereunder), and the Conversion Price after giving effect to such adjustment, and
shall cause copies of such certificates to be mailed (by first-class mail,
postage prepaid) to each Registered Holder of Securities. Med/Waste, Inc. shall
make such certificate and mail it to each such holder promptly after each
adjustment.
(f) No fractional Common Stock shall be issued in
connection with any conversion (or forced conversion, if applicable) of
Securities, but in lieu of such fractional shares, the Issuer shall make a cash
payment therefor equal in amount to the product of the applicable fraction
multiplied by the Conversion Price then in effect.
11. All, but not less than all, of the principal amount of the
Outstanding Securities are convertible, at the option of Med/Waste, Inc., into
shares of Common Stock at the Conversion Price, provided that on the day that
the Conversion Notice is given by Med/Waste, Inc. to all Registered Holders and
on the Forced Conversion Date, the following conditions are satisfied: (i) the
Conversion Shares have been registered by Med/Waste, Inc. pursuant to the 1933
Act as provided for in Section 8 of the Securities and such registration is then
currently effective; and (ii) the average of the closing bid price per share of
the Common Stock, as listed on NASDAQ, the NYSE, the ASE or wherever Med/Waste
Inc.'s Common Stock then trades, during twenty (20) trading days out of the
thirty (30) consecutive trading days ending five (5) trading days prior to the
date the Forced Conversion Notice is sent, is at least two hundred (200%)
percent of the Conversion Price. Any notice of Conversion ("Forced
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15
Conversion Notice") must be given by Med/Waste, Inc. to all Registered 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 Issuer shall pay to all Registered Holders of Securities,
all accrued and unpaid interest on the Securities through and including the
Forced Conversion Date.
12. If any mutilated Security is surrendered to the Issuer, the
Issuer shall execute and deliver in exchange therefor a new Security of like
tenor and principal amount, bearing a number not contemporaneously outstanding.
If there is delivered to the Issuer (a) evidence to its
reasonable satisfaction of the destruction, loss or, theft of any Security and
(b) such reasonable security or indemnity as may be required by it to save it
harmless, then, in the absence of notice to the Issuer that such Security has
been acquired by a bona fide purchaser, the Issuer shall execute and deliver in
lieu of any such destroyed, lost or stolen Security a new Security of like tenor
and principal amount and bearing a number not contemporaneously outstanding.
Upon the issuance of any new Security under this Section 12, the
Issuer 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 Security issued pursuant to this Section 12 in lieu of
any destroyed, lost or stolen Security, shall constitute an original additional
contractual obligation of the Issuer, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone.
Any new Security delivered pursuant to this Section 12 shall be
so dated that neither gain nor loss in interest shall result from such exchange.
The provisions of this Section 12 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 Securities.
13. A meeting of holders of the Securities may be called at any
time and from time to time to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
the Securities to be made, given or taken by holders of Securities or to modify,
amend or supplement the terms of the Securities as hereinafter provided. Notice
of every meeting of holders of Securities, setting forth the time and the place
of such meeting and in general terms the action proposed to be taken at such
meeting, shall be given as provided for in the terms of the Securities, not less
than fifteen (15) nor more than sixty (60) days prior to the date fixed for the
meeting. Such meetings may be called at any time for any such purpose by the
Issuer or by the holders of at least twenty-five (25%) percent in the aggregate
principal amount of the Outstanding Securities by, in the case of the holders,
written request to the Issuer setting forth in reasonable detail the action
proposed to be taken at the meeting. Upon receipt of any such request, the
Issuer shall call such meeting for such purposes by giving notice thereof.
To be entitled to vote at any meeting of holders of Securities, a
person shall be a registered holder of Outstanding Securities or a person duly
appointed by an instrument in writing as proxy for such a holder. The persons
entitled to vote more than fifty (50%) percent in principal amount of the
Outstanding Securities shall constitute a quorum. The Issuer may make such
reasonable and customary regulations as it shall deem advisable for any meeting
of holders of Securities with respect to the appointment of proxies in respect
of holders of Securities, the record date for determining the registered owners
of Securities who are entitled to vote at such meeting (which date shall be set
forth in the notice calling such meeting hereinabove referred to and which shall
be not less than fifteen (15) nor more than sixty (60) days prior to such
meeting), the adjournment and chairmanship of such meeting, the appointment and
duties of inspectors of votes, the submission and examination of proxies,
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16
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall deem appropriate.
At any meeting of holders of Securities duly called and held as
specified above, upon the affirmative vote, in person or by proxy thereunto duly
authorized in writing, of the Registered Holders of not less than sixty-six and
two-thirds (66 2/3%) percent in aggregate principal amount of Outstanding
Securities, or with the written consent of the Registered Holders of not less
than sixty-six and two-thirds (66 2/3%) percent in aggregate principal amount of
Outstanding Securities, the Issuer may modify, amend or supplement the terms of
the Securities in any way, and the holders of Securities may make, take or give
any request, demand, authorization, direction, notice, consent, waiver or other
action provided by the terms of the Securities to be made, given or taken by
holders of Securities; PROVIDED, HOWEVER, that no such action may, without the
consent of Registered Holders of Securities owning eighty (80%) percent or more
in the aggregate principal amount of Outstanding Securities affected thereby,
(a) change the due date for the payment of the principal of or any installment
of interest on any Security, (b) reduce the principal amount of any Security,
the portion of such principal amount which is payable upon acceleration of the
maturity of such Security or the interest rate thereon, (c) change the coin or
currency in which or the required places at which payment with respect to
interest or principal in respect of Securities is payable, (d) permit the Issuer
to redeem the Securities (other than as specifically provided in this Security),
or (e) reduce the proportion of the principal amount of Securities the vote or
consent of the holders of which is necessary to modify, amend or supplement the
terms and conditions of the Securities or to make, take or give any request,
demand, authorization, direction, notice, consent, waiver or other' action
provided hereby or thereby to be made, taken or given.
Any instrument given by or on behalf of any Registered Holder of
a Security in connection with any consent to or vote for any such modification,
amendment, supplement, request, demand, authorization, direction, notice,
consent, waiver or other action will be irrevocable once given and will be
conclusive and binding on all subsequent holders of such Security or any
Security issued directly or indirectly in exchange or substitution therefor or
in lieu thereof Any such modification, amendment, supplement, request, demand,
authorization, direction, notice, consent, waiver or other action will be
conclusive and binding on all holders of Securities, whether or not they have
given such consent or cast such vote, and whether or not notation of such
modification, amendment, supplement, request, demand, authorization, direction,
notice, consent, waiver or other action is made upon the Securities. Notice of
any modification or amendment of, supplement to, or request, demand,
authorization, direction, notice, consent, waiver or other action with respect
to the Securities shall be given to each registered holder of Securities
affected thereby, in all cases as provided herein.
Securities executed and delivered after the effectiveness of any
such modification, amendment, supplement, request, demand, authorization,
direction, notice, consent, waiver or other action shall bear a notation in the
form reasonably approved by the Issuer as to any matter provided for in such
modification, amendment, supplement, request, demand, authorization, direction,
notice, consent, waiver or other action. New Securities modified to conform to
any such modification, amendment, supplement, request, demand, authorization,
direction, notice, consent, waiver or other action may be prepared by the Issuer
and executed and delivered in exchange for Outstanding Securities.
For purposes of the provisions of the Securities, any Security
executed and delivered by the Issuer shall, as of any date of determination, be
deemed to be "Outstanding", EXCEPT:
(a) Securities theretofore cancelled by the Issuer or
delivered to the Issuer for conversion or cancellation or held by the Issuer for
reissuance but not reissued by the Issuer; or
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17
(b) Securities that have become due and payable at
Maturity or otherwise and with respect to which monies sufficient to pay the
principal thereof and any interest thereon shall have been made available to the
Registered Holders thereof, or
(c) Securities in lieu of or in substitution for which
other Securities shall have been authenticated and delivered pursuant to the
terms of the Securities;
PROVIDED, HOWEVER that in determining whether the Registered Holders of the
requisite principal amount of Outstanding Securities are present at a meeting of
holders of Securities for quorum purposes or have consented to or voted in favor
of any request, demand, authorization, direction, notice, consent, waiver,
amendment, modification or supplement hereunder, Securities owned directly or
indirectly by the Issuer or any Affiliate of the Issuer shall be disregarded and
deemed not to be Outstanding.
14. Where the terms of the Securities provide for notice to the
holders of any event, such notice shall be sufficiently given if given in
writing and mailed, first class postage prepaid, to each Registered Holder
affected by such event, at his address as it appears in the register for the
Securities. Any notice may be waived in writing by the Person entitled thereto,
either before or after the event, and such waiver shall be equivalent of such
notice.
15. In the event of:
(a) default in the payment of any interest on any Security
for a period of ten (10) days after Maturity; or
(b) default in the payment of the principal of any
Security at Maturity; or
(c) the breach by the Issuer of any of the representations
and warranties set forth in Section 6 of the Securities; or
(d) default in the performance or breach of any other
material covenant or agreement contained in the Securities for a period of
thirty (30) days after the date on which written notice of such default
requiring the Issuer to remedy the same and stating that such notice is a
"Notice of Default", shall first have been given to the Issuer by a Registered
Holder or Holder(s) owning fifteen (15%) percent or more of Securities; or
(e) default under one or more bonds, debentures, notes or
other evidence of Indebtedness in excess of $500,000 in the aggregate, whether
such Indebtedness is secured or unsecured and whether such Indebtedness now
exists or shall hereinafter be created, which has not been cured within a period
of thirty (30) days; or
(f) any misstatement of a material fact in the Memorandum
or omission of a material fact necessary to make the information in the
Memorandum not misleading (regardless of any investigation made by any
Registered Holders); or
(g) the entry by a court having jurisdiction of (i) a
decree or order for relief in respect of the Issuer in an involuntary case or
proceeding under any applicable bankruptcy, insolvency, reorganization or other
similar law or (ii) a decree or order adjudging the Issuer a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Issuer under any
applicable law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Issuer or of any
substantial part of the property of the Issuer, or ordering the winding up or
liquidation of the affairs of the Issuer, and any such decree or order for
relief or any such other decree or order shall continue unstayed and in effect
for a period of sixty (60) consecutive days, or
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18
(h) commencement by any Issuer of a voluntary case or
proceeding under any applicable bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by the Issuer to the entry of a decree or order for
relief in respect of the Issuer in an involuntary case or proceeding under any
applicable bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against the
Issuer, or the filing by the Issuer of a petition or answer or consent seeking
reorganization or relief under any such applicable law, or the consent by the
Issuer to the filing of such petition or to the appointment of or the taking
possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or other similar official of the Issuer or of any substantial part of its
property, or the making by the Issuer of an assignment for the benefit of
creditors, or the taking of action by the Issuer in furtherance of any such
action;
a Registered Holder or Registered Holders owning fifteen (15%) percent or more
of the Securities may, at their option, declare the principal of this Security
and the interest accrued hereon to be due and payable immediately (such date
being the "Acceleration Date") by written notice to the Issuer at its principal
executive offices, and unless all such defaults shall have been cured by the
Issuer prior to receipt of such written notice, the principal of this Security
and the interest accrued thereon shall become and be immediately due and
payable.
16. This Security shall be governed by and construed in
accordance with the laws of New York without regard to the conflicts-of-laws
principles thereof The Issuer hereby irrevocably (a) submits to the exclusive
jurisdiction of, and agrees that any action, suit or other proceeding at law, in
equity or otherwise, shall only be brought in the Supreme Court, New York
County, or Federal District Court for the Southern District of New York, for the
purpose of any such suit, action or other proceeding arising out of or based
upon this Agreement or the transactions contemplated hereby ("Action"); (b)
waives, to the extent not prohibited by applicable law, rule or regulation, and
agrees not to assert, by way of motion, as a defense or otherwise, in any such
Action, ,any claim that any such person is not subject personally to the
jurisdiction of the aforementioned courts, that its property is exempt or immune
from attachment or execution, that any such action brought in the aforementioned
court is brought in an inconvenient forum, that the venue of any such action
brought in the aforementioned court is improper, or that this Agreement, or the
transactions contemplated hereby enforced in or by such court, and (c) consents
to service of process in any such Action by recognized overnight courier
service. Nothing herein shall affect the right to serve process ion any other
manner permitted by law.
17. In any Action to protect the rights of the Registered Holders
or to collect on this Security, the Issuer shall pay the reasonable attorneys
fees and costs of the Registered Holder.
18. The following terms shall have the meaning ascribed to them
below: "Affiliate" means any Person directly or indirectly controlling,
controlled by or under direct or indirect control with another Person.
"Contingent Obligations", as applied to any Person, means
any direct or indirect liability, contingent or otherwise, of that Person (i)
with respect to any Indebtedness, lease, dividend or other obligation of another
if the primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the account of
that person, unpaid bankers' acceptances, bankers' assurances or guarantees or
similar items, or (iii) under any Interest Rate Protection Agreement or any
long-term foreign currency exchange contract, currency swap agreement, currency
futures contract, currency option contract, synthetic capital or similar
arrangement designed to protect the Person entering into the same against
fluctuations in currency values. Contingent Obligations shall include, without
limitation, (A) the direct or indirect guaranty, endorsement, co-making,
discounting with recourse or sale with recourse by such Person of the obligation
of another, (B) the obligation to make
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19
take-or-pay or similar payments if required regardless of non-performance by any
other party or parties to an agreement, and (C) any liability of such Person for
the obligations of another through any agreement (contingent or otherwise) (x)
to purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise), (y) to maintain the solvency, any balance sheet item, level of
income or financial condition of another, or (z) to make take-or-pay or similar
payments if required regardless of non-performance by any other party or parties
to an agreement (provided that, in the case of any agreement described under
Sub-clauses (C)(x) or (C)(y) of this sentence, the primary purpose or intent
thereof is as described in the preceding sentence). The amount of any Contingent
Obligation of a Person shall be equal to the amount of the obligation so
guaranteed or otherwise supported, subject to any limitation as to amount
contained in the instrument or agreement creating or evidencing such Contingent
Obligation; or in the case of Contingent Obligations referred to in clause (iii)
above, the xxxx-to-market value of such Contingent Obligation at the relevant
date of determination.
"Control" means possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, wether through the ownership of voting securities, by contract or
otherwise.
"Indebtedness" of any Person means, at any date of
determination, without duplication, (i) all obligations of such Person for
borrowed money, (ii) that portion of obligations with respect to Capital Leases
that is properly classified as a liability on a balance sheet of such Person in
conformity with GAAP, (iii) notes payable and drafts accepted of such Person
representing extensions of credit whether or not representing obligations for
borrowed money, (iv) any obligation of such Person owed for all or any part of
the deferred price of the property or services, which price or obligation is (x)
due more than (or has not been discharged prior to) three (3) months from the
date of incurrence of the obligation in respect thereof, or (y) evidenced by a
note, instrument or other written agreement, (v) all Contingent Obligations of
such Person, and (vi) all indebtedness of the type described in clauses (i)
through (v) above that is secured by any Lien on any property or asset owned or
held by such person (provided that the amount of such indebtedness included as
Indebtedness under this clause (vi) shall not exceed the market value of the
property or asset subject to such Lien).
"Lien" means any mortgage, pledge, hypothecation, security
interest, encumbrance, charge or lien (statutory or otherwise) or assignment,
deposit arrangement or other preferential arrangement in respect of an interest
in property intended to secure, support or otherwise assure payment of an
obligation (including, without limitation, any conditional sale or other title
retention agreement and any lease having substantially the same economic effect
as the foregoing).
"Maturity" when used with respect to any Security, means
the date on which the principal of such Security or an installment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration or acceleration, call for redemption or otherwise.
"Person" means any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, institution, public benefit corporation, entity or government
(whether Federal, state, county, city, municipal or otherwise, including without
limitation, any instrumentality, division, agency, body or department thereof).
"Stated Maturity" when used with respect to any Security
or any installment of interest thereon, means the date specified in such
Security as the fixed date on which the principal of such Security or such
installment of interest is due and payable.
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20
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
duly executed and it corporate seal to be affixed hereto.
Dated: January 27, 1997
MED/WASTE, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------
XXXXXX X. XXXXXXX
President
[Corporate Seal]
SAFETY DISPOSAL SYSTEM, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------
XXXXXX X. XXXXXXX
President
[Corporate Seal]
THE XXXXX GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------
XXXXXX X. XXXXXXX
President
[Corporate Seal]
SAFETY DISPOSAL SYSTEM OF SOUTH
CAROLINA, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------
XXXXXX X. XXXXXXX
President
[Corporate Seal]
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