PROSPECTUS                                    FILED PURSUANT TO RULE 424(b)(3) 
                                                 REGISTRATION NO. 333-06971

                          THE SPECTRANETICS CORPORATION

                                 DEBT SECURITIES
                                 PREFERRED STOCK
                                  COMMON STOCK
                                 EQUITY WARRANTS
                                  DEBT WARRANTS

     The Spectranetics Corporation (the "Company"), directly or through 
agents, dealers, or underwriters designated from time to time, may offer, 
issue and sell, together or separately, up to $50,000,000 in the aggregate of 
(a) secured or unsecured debt securities (the "Debt Securities") of the 
Company, in one or more series, which may be either senior debt securities 
(the "Senior Debt Securities"), senior subordinated debt securities (the 
"Senior Subordinated Debt Securities") or subordinated debt securities (the 
"Subordinated Debt Securities"), (b) shares of preferred stock of the 
Company, par value $.001 per share (the "Preferred Stock"), in one or more 
series, (c) shares of common stock of the Company, par value $.001 per share 
(the "Common Stock"), (d) warrants to purchase Common Stock or Preferred 
Stock (the "Equity Warrants") or (e) warrants to purchase Debt Securities 
(the "Debt Warrants" and together with the Equity Warrants, the "Warrants"), 
or any combination of the foregoing, either individually or as units 
consisting of one or more of the foregoing, each on terms to be determined at 
the time of sale.  The Debt Securities may be issued as exchangeable and/or 
convertible Debt Securities exchangeable for or convertible into shares of 
Common Stock or Preferred Stock.  The Preferred Stock may also be 
exchangeable for and/or convertible into shares of Common Stock or another 
series of Preferred Stock.  The Debt Securities, the Preferred Stock, the 
Common Stock and the Warrants are collectively referred to herein as the 
"Securities."  When a particular series of Securities is offered, a 
supplement to this Prospectus (each a "Prospectus Supplement") will be 
delivered with this Prospectus.  The Prospectus Supplement will set forth the 
terms of the offering and sale of the offered Securities.

         THE PURCHASE OF THE SECURITIES INVOLVES CERTAIN MATERIAL RISKS.
                    SEE "RISK FACTORS" COMMENCING ON PAGE 4.

     Except as described more fully herein or as set forth in the Prospectus 
Supplement relating to any offered Debt Securities, the Indenture will not 
provide holders of Debt Securities protection in the event of a 
highly-leveraged transaction, reorganization, restructuring, merger or 
similar transaction involving the Company which could adversely affect 
holders of Debt Securities. See "Description of Debt Securities -- 
Consolidation, Merger and Sale of Assets."

     The Company's Common Stock is traded on the Nasdaq National Market under 
the symbol SPNC.  On June 24, 1996, the last reported sale price of the 
Common Stock as reported by Nasdaq was $5.125 per share.  The Company has not 
yet determined whether any of the Debt Securities, Preferred Stock or 
Warrants offered hereby will be listed on any exchange or over-the-counter 
market.  If the Company decides to seek listing of any such Securities, the 
Prospectus Supplement relating thereto will disclose such exchange or market. 
                              ____________________

  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 COMMIS-
          SION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
            ANY REPRESENTATION TO THE CONTRARY IS A FEDERAL OFFENSE.
                              ____________________

     The Securities may be sold directly by the Company, through agents 
designated from time to time or to or through underwriters or dealers.  The 
Company reserves the sole right to accept, and together with its agents, from 
time to time, to reject in whole or in part any proposed purchase of 
Securities to be made directly or through agents.  See "Plan of 
Distribution."  If any such agents or underwriters are involved in the sale 
of any Securities, the names of such agents or underwriters and any 
applicable fees, commissions or discounts will be set forth in the applicable 
Prospectus Supplement.

     This Prospectus may not be used to consummate sales of Securities unless 
accompanied by the applicable Prospectus Supplement.

                The date of this Prospectus is July 12, 1996.               



     IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR 
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE 
SECURITIES AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN 
MARKET.  SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

     IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP 
MEMBERS MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON STOCK 
ON THE NASDAQ NATIONAL MARKET IN ACCORDANCE WITH RULE 10b-6A UNDER THE 
SECURITIES ACT OF 1934.  SEE "PLAN OF DISTRIBUTION."

                            AVAILABLE INFORMATION

     The Company has filed with the Securities and Exchange Commission (the 
"Commission") a Registration Statement on Form S-3 (together with all 
amendments and exhibits thereto, the "Registration Statement") under the 
Securities Act of 1933, as amended (the "Securities Act"), with respect to 
the Securities offered hereby.  This Prospectus does not contain all of the 
information set forth in the Registration Statement, part of which has been 
omitted in accordance with the rules and regulations of the Commission.  For 
further information about the Company and the Securities offered hereby, 
reference is made to the Registration Statement, including the exhibits filed 
as a part thereof and otherwise incorporated therein.  Statements made in 
this Prospectus as to the contents of any document referred to herein are not 
necessarily complete, and in each instance reference is made to such document 
for a more complete description, and each such statement is qualified in its 
entirety by such reference.  

     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 periodic reports, proxy statements and other 
information with the Commission. The Registration Statement, including the 
exhibits thereto, as well as such reports and other information filed by the 
Company with the Commission, can be inspected, without charge, and copied at 
the public reference facilities maintained by the Commission at 450 Fifth 
Street, N.W., Room 1024, Washington D.C., 20549; 7 World Trade Center, New 
York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago, 
Illinois 60661.  Copies of such materials can be obtained from the Public 
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, 
D.C.  20549 at prescribed rates.  Reports and other information concerning 
the Company can also be inspected at the offices of the National Association 
of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C.  20006.  

                   INFORMATION INCORPORATED BY REFERENCE 

     The following documents filed by the Company with the Commission 
pursuant to the Exchange Act are incorporated by reference in this 
Prospectus: (1) the Company's Quarterly Report on Form 10-Q for the quarter 
ended March 31, 1996, (2) the Company's Annual Report on Form 10-K for the 
fiscal year ended December 31, 1995, and (3) all other documents subsequently 
filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act 
after the date of this Prospectus and before the termination of the offering, 
which shall be deemed to be a part hereof from the date of filing of such 
documents.  

     Any statement contained in a document incorporated or deemed to be 
incorporated by reference herein shall be deemed to be modified or superseded 
for purposes of this Prospectus to the extent that a statement contained 
herein or in any other subsequently filed document which also is incorporated 
or deemed to be incorporated by reference herein modifies or supersedes such 
statement. Any such statement so modified or superseded shall not be deemed, 
except as so modified or superseded, to constitute a part of this Prospectus.


                                       2 



     The Company will provide without charge to each person, including any 
beneficial owner, to whom this Prospectus is delivered, upon request, a copy 
of any documents incorporated into this Prospectus by reference (other than 
exhibits incorporated by reference into such document).  Requests for 
documents should be submitted to The Spectranetics Corporation, 96 Talamine 
Court, Colorado Springs, Colorado 80907, Attention: Secretary (telephone 
(719) 633-8333).  The information relating to the Company contained in this 
Prospectus does not purport to be comprehensive and should be read together 
with the information contained in the documents incorporated or deemed to be 
incorporated by reference herein. 

                                THE COMPANY

     The Spectranetics Corporation (the "Company") was formed as a Colorado 
corporation in 1984 and reincorporated as a Delaware corporation in 1986.  On 
June 10, 1994, the Company completed a merger with Advanced Interventional 
Systems, Inc. ("LAIS") in which LAIS became a wholly-owned subsidiary of the 
Company.  As a result of the merger with LAIS, the Company also acquired 
Polymicro Technologies, Inc. ("Polymicro"), a subsidiary of LAIS located in 
Phoenix, Arizona, which manufactures drawn silica glass products.  Effective 
as of December 29, 1995, LAIS was merged into the Company; Polymicro remains 
a subsidiary.

     The Company develops, manufactures and markets a proprietary excimer 
laser and proprietary disposable fiber optic delivery systems for the 
treatment of cardiovascular disorders.  Atherosclerosis, the primary cause of 
heart attacks, is the partial or total blockage of arteries due to 
accumulated plaque on the walls of arteries.  Cardiovascular disease is the 
leading cause of death in the United States, accounting for approximately one 
million, or one-half, of all deaths annually. According to the American Heart 
Association, 1,500,000 new cases of heart attacks or angina (chest pain due 
to heart disease) are reported each year.

     The Company's first prototype laser system was placed at the Texas Heart 
Institute in Houston in 1987.  The first clinical case as an adjunct to 
bypass surgery was performed in 1988.  The first Investigational Device 
Exemption (IDE) for percutaneous coronary laser angioplasty was received in 
May 1989.  In February 1991 the Company submitted a premarket approval 
application ("PMA") to the United States Food & Drug Administration ("FDA") 
for its CVX-300-Registered Trademark- excimer laser system and its 1.4 and 
1.7 millimeter diameter catheters.  FDA's panel conducted its public review 
in November 1991, which resulted in a unanimous recommendation for approval 
of use of the CVX-300-Registered Trademark- and the Company's 1.4 and 1.7 
millimeter diameter catheters.  In April 1992, the Company received a letter 
from the FDA indicating the approvability of its PMA submission.  On February 
19, 1993, FDA completed its review of the Company's PMA and issued an 
approval for the Company CVX-300-Registered Trademark- excimer laser system 
and the 1.4 and 1.7 millimeter diameter catheters for six different 
indications for use in the treatment of coronary artery disease.  With this 
approval the Company was able to expand its marketing in the United States 
beyond its investigational sites.

     On October 18, 1993, the Extreme-Registered Trademark- laser catheter 
received FDA approval.  This over-the-wire high performance catheter was the 
Company's first high performance metal rim tip catheter.  The Company 
received FDA approval in October 31, 1994 to market its VitesseTM C-II line 
of excimer laser angioplasty catheters.  This line of catheters incorporates 
a concentric, fast-exchange design for ease of access in tortuous coronary 
anatomy.  The Company also received ISO 9001 certification from the TUV 
Product Service GmbH (European equivalent to the FDA) which allowed the 
Company to market its products in the European Community within compliance of 
the EN 29 001/ISO 9001 and EN 46 001.  In May 1995, the Company received FDA 
approval to market its VitesseTM C-II and Extreme-Registered Trademark- 
excimer laser angioplasty catheters for use with Dymer-Registered Trademark- 
200+ systems, an excimer laser system manufactured by LAIS prior to its 
merger with the Company.  The approval of this "cross-coupler" device was 
designed to expand the therapeutic range of the Dymer-Registered Trademark- 
200+ systems to include the usage of all six excimer laser coronary 
indications.  While LAIS ceased manufacturing the Dymer-Registered Trademark- 
200+ systems after its merger with the Company in 1994, the Company continues 
to manufacture excimer laser catheters 

                                       3 



for use with the Dymer-Registered Trademark- 200+ systems still in service.  
On July 31, 1995, the Company received FDA approval to market the VitesseTM 
E-II excimer laser coronary angioplasty catheter.  This catheter was designed 
to treat lesions with eccentric characteristics within the six-indications 
group.

     The Company's principal executive offices are located at 96 Talamine 
Court, Colorado Springs, Colorado  80907, and its telephone number is (719) 
633-8333.

                                RISK FACTORS

     The stockholders of the Company currently are, and will continue to be, 
subject to the following risks.

CONTINUING LOSSES

     The Company has incurred net losses since inception in June 1984, and 
anticipates that net losses will continue in the foreseeable future.  At 
March 31, 1996, the Company had cumulative losses since inception of 
approximately $64.3 million.  There can be no assurance that the Company will 
be able to achieve increased sales or profitability.

QUARTERLY FLUCTUATIONS IN OPERATING RESULTS

     Results of operations for the Company have varied and may continue to 
fluctuate significantly from quarter to quarter and will depend upon numerous 
factors, including timing of regulatory approvals, market acceptance of 
products and new product introductions, implementation of health care 
reforms, changes in product mix between laser units and catheters, ability to 
manufacture products effectively and competition from other technologies.

LACK OF LIQUIDITY

     The operating activities of the Company continue to consume net cash.  
As of March 31, 1996, the Company had cash, cash equivalents and short term 
investments of $6.5 million.  Cash requirements (the net reduction in cash, 
cash equivalents and short-term investments) for the Company for 1995 equaled 
$1.1 million and $0.5 million in the first three months of 1996.  Management 
of the Company believes that elimination of duplicative expenses in 
consolidation of the business and other cost reduction programs previously 
implemented will provide the Company with sufficient cash liquidity through 
1996.  In order for cash flow from operating activities to be sufficient to 
sustain the Combined Company's operations beyond 1996, the Company must 
achieve increases in sales and reductions in expenses.  There can be no 
assurance that such increases in sales or reductions in expenses will occur 
or that they will be sufficient to maintain adequate cash to continue 
operations beyond 1996.

NO ASSURANCE THAT THE COMPANY WILL BE ABLE TO OBTAIN ADDITIONAL FINANCING

     The Company may require additional financing in the future.  Such 
financing, if required, may not be available on satisfactory terms, or at 
all, if the Company is unable to obtain sufficient funding from other sources 
on terms and prices acceptable to the Company, the Company's ability to make 
capital expenditures, compete effectively and withstand the effects of 
adverse market and economic conditions may be significantly impaired.  If the 
Company is able to obtain debt financing, there can be no assurance that the 
Company will have sufficient cash flow from operating activities to meet its 
debt service requirements.  Therefore, the Company may be required to meet 
its debt service requirements from other sources, such as the sale of 
additional equity and debt securities and the sale of selected assets.  To 
the extent the Company finances its future operations through the issuance of 
equity securities, existing stockholders may suffer dilution in net tangible 
book value per share. 



                                       4 



LIMITED OPERATING HISTORY; LIMITED MANUFACTURING EXPERIENCE

     The Company has a limited history of operations.  The Company received 
PMA from the FDA for its CVX-300-Registered Trademark- laser in 1993 and for 
LAIS' Dymer-Registered Trademark- 200+ system in 1992.  Accordingly the 
Company does not have substantial experience in manufacturing, marketing or 
selling its products in commercial quantities.  The Company does not have 
substantial experience manufacturing its products in the volumes that will be 
necessary for them to achieve profitability.  The Company may encounter 
difficulties in scaling up production of laser units and catheters and hiring 
and training additional qualified manufacturing personnel.  The occurrence of 
difficulties as the Company increases production volumes could lead to 
quarterly fluctuations in operating results and have a material adverse 
effect on its business, financial condition and results of operations.

UNCERTAIN MARKET ACCEPTANCE

     Excimer laser angioplasty technology is a relatively new procedure which 
competes with more established therapies, including balloon angioplasty and 
bypass surgery, and other evolving technologies, such as atherectomy and 
non-excimer laser technologies.  The cost of the CVX-300-Registered 
Trademark- laser system is significantly greater than the cost of therapeutic 
capital equipment required with balloon angioplasty catheters.  In addition, 
because excimer laser procedures are often followed by balloon angioplasty, 
the cost of the excimer laser angioplasty can be significantly greater than 
balloon angioplasty alone. Market acceptance of the laser angioplasty system 
also will depend, in part, on the Company's ability to establish within the 
medical community the clinical efficacy of excimer laser angioplasty.

     As a result of such factors, there can be no assurance that the 
marketplace will be receptive to the Company's laser angioplasty systems or 
that excimer laser angioplasty will be accepted over competing therapies.  
Failure of its products to achieve market acceptance would have a material 
adverse effect on the Company's businesses, financial condition and results 
of operations.

UNCERTAINTY OF IMPACT OF HEALTH CARE REFORM

     The federal government and certain states are investigating proposals to 
overhaul the United States health care system.  Some proposals include 
provisions of universal access to health care, reforming the payment 
methodology for health care goods and services by both the public (Medicare 
and Medicaid) and private sectors, and methods to control or reduce public 
and private spending on health care.  In addition, other legislative and 
industry groups are studying various health care issues.  The ultimate timing 
or effect such reforms may have on the Company cannot be predicted and no 
assurance can be given that any such reforms will not have a material adverse 
effect on the Company's revenues and earnings.  Short-term cost containment 
initiatives may vary substantially from long-term reforms and may impact the 
Company differently.

LIMITATIONS ON THIRD-PARTY REIMBURSEMENT

     The CVX-300-Registered Trademark- and Dymer-Registered Trademark- 200+ 
systems are generally purchased by hospitals, which then bill various 
third-party payors, such as government programs and private insurance plans, 
for the health care services provided to their parents.  Unlike balloon 
angioplasty and atherectomy, laser angioplasty requires the purchase of 
expensive capital equipment.  The FDA has required that the label for the 
CVX-300-Registered Trademark- system indicate that adjunctive balloon 
angioplasty was performed in the majority of the procedures submitted to the 
FDA in the Company's application for PMA.  This will require the purchase of 
both a laser catheter and a balloon catheter.  Payors may deny reimbursement 
for procedures they believe to be duplicative.  Payors may also deny 
reimbursement if they determine that a device used in a procedure was 
experimental, was used for a non-approved indication or was not used in 
accordance with established payor protocols regarding cost effective 
treatment methods.  There can be no assurance that laser angioplasty using 
the CVX-300-Registered Trademark- or the Dymer-Registered Trademark- 200+ 
systems will be considered cost effective by third-party payors, that 
reimbursement will be available or, if available, that 

                                       5 



payors' reimbursement policies will not adversely affect the Company's 
ability to sell its products on a profitable basis.  There are increasing 
pressures from many payor sources to control health care costs.  In addition, 
there are increasing pressures from public and private payors to limit 
increases in reimbursement rates for medical devices.  The market for the 
Company's products and the levels of revenues and profitability could also be 
adversely affected by changes in governmental and private third-party payors' 
policies or by recent federal legislation that reduces reimbursements under 
the capital cost pass-through system for the Medicare program.

COSTS AND UNCERTAINTY OF REGULATORY COMPLIANCE

     The Company's products and manufacturing activities are subject to 
vigorous regulation by the FDA and comparable state and foreign agencies.  
The process of complying with these regulations can be costly and time 
consuming.  Failure to comply with applicable regulatory requirements can 
result in, among other things, fines, suspensions of approvals, seizures or 
recalls of products, operating restrictions and criminal prosecutions.  
Furthermore, changes in existing regulations or adoption of new regulations 
could prevent the Company from obtaining, or affect the timing of, future 
regulatory approvals.  There can be no assurance that the FDA will approve 
the Company's current or future PMA supplements on a timely basis or at all.  
The absence of such approvals could have a material adverse effect on the 
Company's ability to generate future revenues.

INTENSE COMPETITION

     Completion in the market for the treatment of cardiovascular disease is 
intense and expected to increase.  Currently, the Company competes with 
manufacturers of balloon angioplasty devices, atherectomy devices, and other 
laser angioplasty systems and pharmaceutical products.  There can be no 
assurance that the Company's current and future competitors will not develop 
technologies and products that are more effective in treating cardiovascular 
disease than the Company's current products or future products, and that the 
Company's competitors, particularly large medical and pharmaceutical 
companies, have substantially greater financial, manufacturing, marketing and 
technical resources than the Company.

TECHNOLOGICAL CHANGE RESULTING IN PRODUCT OBSOLESCENCE

     Market acceptance and sales of the Company's products also could be 
adversely affected by technological changes.  The health care industry is 
characterized by rapid technological progress.  New developments are expected 
to continue at an accelerated pace in both industry and academia.  Many 
companies, some of which have substantially greater resources than the 
Company, are engaged in research and development with respect to methods of 
treatment and prevention of coronary artery disease.  These include 
pharmaceutical approaches as well as development of new or improved 
angioplasty, atherectomy or other devices.  The Company's products could be 
rendered obsolete as a result of future innovations in the treatment of 
coronary artery disease.

UNCERTAINTY RELATED TO PATENTS AND PROPRIETARY RIGHTS

     The Company holds patents, has licenses to use patents and has patent 
applications pending.  There can be no assurance that any patents currently 
applied for by the Company will be granted or that any patents held by the 
Company will be valid or sufficiently broad to protect the Company's 
technology or to provide them with any competitive advantage or will not be 
challenged or circumvented by competitors.  Termination of the licenses 
granted to the Company would have a material adverse effect on their 
business, financial condition and result of operations.

     The Company is aware of other patents issued to and patent applications 
filed by individuals, partnerships, companies, universities and research 
institutions relating to laser and fiberoptic technologies, which, if valid 
and enforceable, may be infringed by the Company.  The Company has 

                                       6 



received notice from other parties regarding the existence of certain patents 
involving the use of lasers in the body.  Although the Company has not been 
sued by these parties, there can be no assurance that the Company will not be 
sued or that it would prevail in any such action.  Should the Company 
determine that it is necessary to obtain a license to such patents or 
proprietary technology, there can be no assurance that any such license would 
be available on favorable terms or at all, or that it would be able to 
develop or otherwise obtain alternative technology.

     It is the Company's policy to require its employees and consultants to 
execute a confidentiality agreement upon the commencement of an employment or 
consulting relationship with the Company.  Each agreement provides that all 
confidential information developed or made known to the individual during the 
course of the relationship will be kept confidential and not disclosed to 
third parties except in specified circumstances.  In the case of employees, 
the agreements provide that all inventions developed by the individual shall 
be the exclusive property of the Company, other than inventions unrelated to 
the Company's business and developed entirely on the employee's own time.  
There can be no assurance that these agreements will provide meaningful 
protection for the Company's trade secrets in the event of unauthorized use 
or disclosure of such information.

     Litigation concerning patents and proprietary rights could result in 
substantial cost to and diversion of effort by the Company.  Adverse findings 
in any proceeding could subject the Company to significant liability to third 
parties, require the Company to seek licenses from third parties and 
adversely affect the ability of the Company to manufacture and sell its 
products.

     The Company also relies on trade secrets and unpatented know-how to 
protect its proprietary technology, and the Company may be vulnerable to 
competitors who attempt to copy its products or to gain access to its trade 
secrets and know-how.

DEPENDENCE ON SUPPLIERS AND DISTRIBUTORS

     The glass rods used by the Company in the fabrication of optical fibers 
incorporated into catheters are currently available from a single source 
which holds worldwide patent rights on this material.  Any interruption in 
the supply of such glass rods could have a material adverse effect on its 
ability to manufacture catheters.

PRODUCT LIABILITY AND SUFFICIENCY OF INSURANCE COVERAGE

     The manufacture and sale of the Company's products entail the risk of 
product liability claims.  A successful claim brought against the Company 
could have a material adverse effect on the Company.  The Company maintains 
product liability insurance with coverage of $5.0 million per occurrence and 
an annual aggregate maximum of $5.0 million.  There can be no assurance that 
the coverage limits of its insurance policies will be adequate or that such 
insurance will be available in the future on acceptable terms, if at all.

DEPENDENCE ON KEY PERSONNEL

     The Company is dependent upon a limited number of key management and 
technical personnel, and the future success of the Company will depend in 
part upon its ability to attract and retain highly qualified personnel.  The 
Company will compete for such personnel with other companies, academic 
institutions, government entities and other organizations.  There can be no 
assurance that the Company will be successful in hiring or retaining 
qualified personnel.  Loss of key personnel or inability to hire or retain 
qualified personnel could have a material adverse effect on its business, 
financial condition and results of operations.



                                       7 



ANTI-TAKEOVER EFFECTS OF CERTAIN CHARTER PROVISIONS

     Each of the following provisions may have anti-takeover effects and may 
have a negative impact on the rights of the Company's stockholders and the 
value of the Company's Common Stock:

               PREFERRED STOCK ISSUANCE

     Up to five million shares of the Company's preferred stock may be issued 
in the future by the Company without further stockholder approval and upon 
such terms and conditions, and having such rights, privileges and 
preferences, as the Board of Directors may determine.  The rights of the 
holders of the Company Common Stock will be subject to, and may be adversely 
affect by, the rights of the holders of any preferred stock that may be 
issued in the future.  The issuance of preferred stock could have the effect 
of making it more difficult for a third party to acquire, or of discouraging 
a third party from acquiring, a majority of the outstanding voting stock of 
the Company.

               DELAWARE CORPORATION CODE SECTION 203

     Section 203 of the Delaware General Corporation Law prohibits a publicly 
held Delaware corporation from engaging in a business combination with an 
interested stockholder for a period of three years after the date of the 
transaction in which the person became an interested stockholder, unless 
certain conditions are met.  Section 203 has a negative impact on the ability 
of certain stockholders to effect business combinations with the Company.

               INABILITY OF STOCKHOLDERS TO CALL SPECIAL MEETING

     The Company's Certificate and Bylaws provide that special meetings of 
stockholders may be called only by the Board of Directors or a committee of 
the Board of Directors duly designated and authorized to call special 
meetings in a resolution of the Board of Directors or as may otherwise be 
specifically provided in the Company's Certificate.  This provision may limit 
the ability of the Company's stockholders to take actions not supported by 
the Board of Directors.

               AMENDMENT OR REPEAL OF BYLAWS

     The Company's Bylaws may be adopted, amended or repealed by the Board of 
Directors or by the affirmative vote of a majority of the outstanding shares 
of the Company's Common Stock entitled to vote.  The ability of the Board of 
Directors to amend the Bylaws to increase the number of directors may make it 
more difficult for the stockholders to change control of the Board of 
Directors.

POTENTIAL VOLATILITY OF STOCK PRICE

     The stock market has from time to time experienced significant price and 
volume fluctuations that are unrelated to the operating performance of 
particular companies.  In addition, the market price of the shares of the 
Company's Common Stock, similar to other health care companies, has been, and 
is likely to continue to be, highly volatile.  Factors such as fluctuations 
in operating results, announcements of technological innovations or new 
products by the Company or its competitors, governmental regulation, 
developments with respect to patents or proprietary rights, public concern as 
to the safety of products developed by the Company or others and general 
market conditions may have a significant effect on the market price of the 
Company's Common Stock.

LACK OF DIVIDENDS

     The Company has not declared or paid any dividends with respect to the 
Company's Common Stock.  It is not anticipated that the Company will pay any 
dividends in the foreseeable future.  In addition, there may be restrictions 
under state law on the ability of the Company to declare dividends.

                                       8 



NEGATIVE IMPACT OF CERTAIN ROYALTY PAYMENTS

     The Company is obligated under various licensing and royalty agreements 
which require the Company to pay royalties based on a percentage of net sales 
of certain products, subject to maximum amounts for certain agreements.  
Under one agreement, the Company is required to pay a minimum royalty of 
$20,500 per quarter in 1996, and quarterly amounts adjusted for changes in 
the consumer price index thereafter through 2010.  The agreements generally 
expire at various dates concurrent with the expiration dates of the 
respective patents.  Royalty expense under these agreements amounted to 
$481,000, $463,000 and $444,000 for the years ended December 31, 1995, 1994 
and 1993, respectively.

                               USE OF PROCEEDS

     The Company currently has no specific plans for the use of the net 
proceeds from the sale of Securities offered hereby.  However, the Company 
currently anticipates that any such net proceeds would be used for general 
corporate purposes, which may include but are not limited to working capital, 
capital expenditures, repayment of indebtedness and acquisitions.  When a 
particular series of Securities is offered, the Prospectus Supplement 
relating thereto will set forth the Company's intended use for the net 
proceeds received from the sale of such Securities.  Pending the application 
of the net proceeds, the Company expects to invest such proceeds in 
short-term, interest-bearing instruments or other investment-grade securities.

                   RATIOS OF EARNINGS TO FIXED CHARGES AND
                   EARNINGS TO COMBINED FIXED CHARGES AND
                          PREFERRED STOCK DIVIDENDS

     The following table sets forth the unaudited consolidated ratios of 
earnings to fixed charges and earnings to fixed charges and preferred stock 
dividends for the Company for the periods indicated.

                          Quarter
                           Ended
                          March 31,       Fiscal Year Ended December 31,
                          ---------------------------------------------------- 
                            1996         1995    1994    1993    1992    1991  
                            ----         ----    ----    ----    ----    ----  
Ratio of earnings to
fixed charges (1)                -           -       -        -       -       -

Ratio of earnings to
fixed charges and
preferred stock
dividend (1)                     -           -       -        -       -       -

Dollar amount of
coverage deficiency        $12,000     $65,000 $95,000 $157,000 $51,000 $42,000
_______________
(1)  For all periods represented, the Company's earnings were negative.

     For the purpose of calculating the ratio of earnings to fixed charges 
and the ratio of earnings to fixed charges and preferred stock dividends, 
earnings consist of income before income taxes and fixed charges (exclusive 
of preferred stock dividends).  For the purpose of calculating both ratios, 
fixed charges include interest expense, capitalized interest and that portion 
of rentals representative of an interest factor.  The Company did not 
distribute any preferred stock dividends during fiscal years 1991 to 1995 or 
the three months ended March 31, 1996.

                                       9 




                      GENERAL DESCRIPTION OF SECURITIES

     The Company directly or through agents, dealers, or underwriters 
designated from time to time, may offer, issue and sell, together or 
separately, up to $50,000,000 in the aggregate of (a) secured or unsecured 
debt securities (the "Debt Securities") of the Company, in one or more 
series, which may be either senior debt securities (the "Senior Debt 
Securities"), senior subordinated debt securities (the "Senior Subordinated 
Debt Securities") or subordinated debt securities (the "Subordinated Debt 
Securities"), (b) shares of preferred stock of the Company, par value $.001 
per share (the "Preferred Stock"), in one or more series, (c) shares of 
common stock of the Company, par value $.001 per share (the "Common Stock"), 
(d) warrants to purchase Common Stock or Preferred Stock (the "Equity 
Warrants") or (e) warrants to purchase Debt Securities (the "Debt Warrants" 
and together with the Equity Warrants, the "Warrants"), or any combination of 
the foregoing, either individually or as units consisting of one or more of 
the foregoing, each on terms to be determined at the time of sale. The Debt 
Securities may be issued as exchangeable and/or convertible Debt Securities 
exchangeable for or convertible into shares of Common Stock or Preferred 
Stock.  The Preferred Stock may also be exchangeable for and/or convertible 
into shares of Common Stock or another series of Preferred Stock. The Debt 
Securities, the Preferred Stock, the Common Stock and the Warrants are 
collectively referred to herein as the "Securities."  When a particular 
series of Securities is offered, a supplement to this Prospectus (each a 
"Prospectus Supplement") will be delivered with this Prospectus.  The 
Prospectus Supplement will set forth the terms of the offering and sale of 
the offered Securities.

                       DESCRIPTION OF DEBT SECURITIES

     The following description sets forth certain general terms and 
provisions of the Debt Securities to which any Prospectus Supplement may 
relate.  The particular terms of the Debt Securities offered by any 
Prospectus Supplement and the extent, if any, to which such general 
provisions do not apply to the Debt Securities so offered will be described 
in the Prospectus Supplement relating to such Debt Securities.

     Debt Securities may be issued from time to time in series under an 
indenture, and one or more indentures supplemental thereto (collectively, the 
"Indenture"), between the Company and a trustee to be identified in the 
applicable Prospectus Supplement (the "Trustee").  The terms of the Debt 
Securities will include those stated in the Indenture and those made part of 
the Indenture by reference to the Trust Indenture Act of 1939 (the "TIA") as 
in effect on the date of the Indenture.  The Debt Securities will be subject 
to all such terms, and potential investors of the Debt Securities are 
referred to the Indenture and the TIA for a statement thereof.  The following 
summary of certain provisions of the Indenture does not purport to be 
complete and is qualified in its entirety by reference to the Indenture, 
including the definitions therein of certain terms used below.  As used under 
this caption, unless the context otherwise requires, "Offered Debt 
Securities" shall mean the Debt Securities offered by this Prospectus and the 
accompanying Prospectus Supplement.

GENERAL

     The Indenture will provide for the issuance of Debt Securities in series 
and will not limit the principal amount of Debt Securities which may be 
issued thereunder.  In addition, except as may be provided in the Prospectus 
Supplement relating to such Debt Securities, the Indenture will not limit the 
amount of additional indebtedness the Company may incur.

     The applicable Prospectus Supplement or Prospectus Supplements will 
describe the following terms of the series of Offered Debt Securities in 
respect of which this Prospectus is being delivered:  (1) the title of the 
Offered Debt Securities; (2) whether the Offered Debt Securities are Senior 
Debt Securities, Senior Subordinated Debt Securities or Subordinated Debt 
Securities or any 


                                      10 



combination thereof; (3) any limit upon the aggregate principal amount of the 
Offered Debt Securities; (4) the date or dates on which the principal of the 
Offered Debt Securities is payable; (5) the rate or rates at which the 
Offered Debt Securities will bear interest, if any, or the manner in which 
such rate or rates are determined; (6) the date or dates from which any such 
interest will accrue, the interest payment dates on which any such interest 
on the Offered Debt Securities will be payable and the record dates for the 
determination of holders to whom interest is payable; (7) the place or places 
where the principal of and any interest on the Offered Debt Securities will 
be payable; (8) the obligation of the Company, if any, to redeem, purchase or 
repay the Offered Debt Securities in whole or in part pursuant to any sinking 
fund or analogous provisions or at the option of the holders and the price or 
prices at which and the period and periods within which and the terms and 
conditions upon which the Offered Debt Securities shall be redeemed, 
purchased or repaid pursuant to such obligation; (9) the denominations in 
which any Offered Debt Securities will be issuable, if other than 
denominations of U.S. $1,000 and any integral multiple thereof; (10) if other 
than the principal amount thereof, the portion of the principal amount of the 
Offered Debt Securities of the series which will be payable upon declaration 
of the acceleration of the maturity thereof; (11) any addition to or change 
in the covenants which apply to the Offered Debt Securities; (12) any Events 
of Default with respect to the Offered Debt Securities, if not otherwise set 
forth under "Events of Default"; (13) whether the Offered Debt Securities 
will be issued in whole or in part in global form; the terms and conditions, 
if any, upon which such global Offered Debt Securities may be exchanged in 
whole or in part for other individual securities, and the depositary for the 
Offered Debt Securities; (14) the terms and conditions, if any, upon which 
the Offered Debt Securities shall be exchanged for or converted into other 
securities or property; (15) the nature and terms of the security for any 
secured Offered Debt Securities; and (16) any other terms of the Offered Debt 
Securities which terms shall not be inconsistent with the provisions of the 
Indenture.

     Debt Securities may be issued at a discount from their principal amount 
("Original Issue Discount Securities").  Federal income tax considerations 
and other special considerations applicable to any such Original Issue 
Discount Securities will be described in the applicable Prospectus Supplement.

     Debt Securities may be issued in bearer form, with or without coupons. 
Federal income tax considerations and other special considerations applicable 
to bearer securities will be described in the applicable Prospectus 
Supplement.

     Unless otherwise indicated in this Prospectus or a Prospectus 
Supplement, the Debt Securities will not have the benefit of any covenants 
that limit or restrict the Company's business or operations, the pledging of 
the Company's assets or the incurrence of indebtedness by the Company.

STATUS OF DEBT SECURITIES 

     The Senior Debt Securities will be unsubordinated obligations of the 
Company and will rank on a parity with all other unsecured and unsubordinated 
indebtedness of the Company.

     The obligations of the Company pursuant to Senior Subordinated Debt 
Securities will be subordinate in right of payment, to the extent and in the 
manner set forth in the Indenture, to all Senior Indebtedness of the Company. 
Except to the extent set forth in the Prospectus Supplement, "Senior 
Indebtedness" of the Company is defined to mean the principal of, and 
premium, if any, and any interest (including interest accruing subsequent to 
the commencement of any proceeding for the bankruptcy or reorganization of 
the Company under any applicable bankruptcy, insolvency or similar law now or 
hereafter in effect) on (a) all indebtedness of the Company whether 
heretofore or hereafter incurred (i) for borrowed money or (ii) in connection 
with the acquisition by the Company or a subsidiary of assets other than in 
the ordinary course of business, for the payment of which the Company is 
liable directly or indirectly by guarantee, letter of credit, obligation to 
purchase or acquire or otherwise, or the payment of which is secured by a 
lien, charge or encumbrance on assets acquired by the Company, (b) 
amendments, modifications, renewals, extensions and deferrals of any such 

                                      11 



indebtedness, and (c) any indebtedness issued in exchange for any such 
indebtedness (clauses (a) through (c) hereof being collectively referred to 
herein as "Debt"); provided, however, that the following will not constitute 
Senior Indebtedness with respect to Senior Subordinated Debt Securities: (1) 
any Debt as to which, in the instrument evidencing such Debt or pursuant to 
which such Debt was issued, it is expressly provided that such Debt is 
subordinate in right of payment to all Debt of the Company not expressly 
subordinated to such Debt; (2) any Debt which by its terms refers explicitly 
to the Senior Subordinated Debt Securities and states that such Debt shall 
not be senior in right of payment; and (3) any Debt of the Company in respect 
of the Senior Subordinated Debt Securities or any Subordinated Debt 
Securities.  The Company will not issue Debt which is subordinated in right 
of payment to any other Debt of the Company and which is not expressly made 
pari passu with, or subordinate and junior in right of payment to, the Senior 
Subordinated Debt Securities.

     The obligations of the Company pursuant to Subordinated Debt Securities 
will be subordinate in right of payment to all Senior Indebtedness of the 
Company and to any Senior Subordinated Debt Securities; provided, however, 
that the following will not constitute Senior Indebtedness with respect to 
Subordinated Debt Securities: (1) any Debt as to which, in the instrument 
evidencing such Debt or pursuant to which such Debt was issued, it is 
expressly provided that such Debt is subordinate in right of payment to all 
Debt of the Company not expressly subordinated to such Debt; and (2) any Debt 
of the Company in respect of Subordinated Debt Securities and any Debt which 
by its terms refers explicitly to the Subordinated Debt Securities and states 
that such Debt shall not be senior in right of payment.

     No payment pursuant to the Senior Subordinated Debt Securities or the 
Subordinated Debt Securities, as the case may be, may be made unless all 
amounts of principal, premium, if any, and interest then due on all 
applicable Senior Indebtedness of the Company shall have been paid in full or 
if there shall have occurred and be continuing beyond any applicable grace 
period a default in any payment with respect to any such Senior Indebtedness, 
or if there shall have occurred any event of default with respect to any such 
Senior Indebtedness permitting the holders thereof to accelerate the maturity 
thereof, or if any judicial proceeding shall be pending with respect to any 
such default.  However, the Company may make payments pursuant to the Senior 
Subordinated Debt Securities or the Subordinated Debt Securities, as the case 
may be, if a default in payment or an event of default with respect to the 
Senior Indebtedness permitting the holder thereof to accelerate the maturity 
thereof has occurred and is continuing and judicial proceedings with respect 
thereto have not been commenced within a certain number of days of such 
default in payment or event of default.  Upon any distribution of the assets 
of the Company upon dissolution, winding-up, liquidation or reorganization, 
the holders of Senior Indebtedness of the Company will be entitled to receive 
payment in full of principal, premium, if any, and interest (including 
interest accruing subsequent to the commencement of any proceeding for the 
bankruptcy or reorganization of the Company under any applicable bankruptcy, 
insolvency or similar law now or hereafter in effect) before any payment is 
made on the Senior Subordinated Debt Securities or Subordinated Debt 
Securities, as applicable.  By reason of such subordination, in the event of 
insolvency of the Company, holders of Senior Indebtedness of the Company may 
receive more, ratably, and holders of the Senior Subordinated Debt Securities 
or Subordinated Debt Securities, as applicable, having a claim pursuant to 
the Senior Subordinated Debt Securities or Subordinated Debt Securities, as 
applicable, may receive less, ratably, than the other creditors of the 
Company.  Such subordination will not prevent the occurrence of any event of 
default (an "Event of Default") in respect of the Senior Subordinated Debt 
Securities or the Subordinated Debt Securities.

     If the Company offers Debt Securities, the applicable Prospectus 
Supplement will set forth the aggregate amount of outstanding indebtedness, 
if any, as of the most recent practicable date that by the terms of such Debt 
Securities would be senior to such Debt Securities.  The applicable 
Prospectus Supplement will also set forth any limitation on the issuance by 
the Company of any additional senior indebtedness.


                                      12 



CONVERSION RIGHTS 

     The terms, if any, on which Debt Securities of a series may be exchanged 
for or converted into shares of Common Stock or Preferred Stock will be set 
forth in the Prospectus Supplement relating thereto.

EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT 

     Unless otherwise specified in the applicable Prospectus Supplement, 
payment of principal, premium, if any, and any interest on the Debt 
Securities will be payable, and the exchange of and the transfer of Debt 
Securities will be registerable, at the office of the Trustee or at any other 
office or agency maintained by the Company for such purpose subject to the 
limitations of the Indenture.  Unless otherwise indicated in the applicable 
Prospectus Supplement, the Debt Securities will be issued in denominations of 
U.S. $1,000 or integral multiples thereof.  No service charge will be made 
for any registration of transfer or exchange of the Debt Securities, but the 
Company may require payment of a sum sufficient to cover any tax or other 
governmental charge imposed in connection therewith.

BOOK-ENTRY DEBT SECURITIES 

     The Debt Securities of a series may be issued in the form of one or more 
Global Securities (the "Global Securities") that will be deposited with a 
depositary ("Depositary") or its nominee identified in the applicable 
Prospectus Supplement.  In such a case, one or more Global Securities will be 
issued in a denomination or aggregate denominations equal to the portion of 
the aggregate principal amount of outstanding Debt Securities of the series 
to be represented by such Global Security or Securities.  Each Global 
Security will be deposited with such Depositary or nominee or a custodian 
therefor and will bear a legend regarding the restrictions on exchanges and 
registration of transfer thereof referred to below and any such other matters 
as may be provided for pursuant to the applicable Indenture.

     Notwithstanding any provision of the Indenture or any Debt Security 
described herein, no Global Security may be transferred to, or registered or 
exchanged for Debt Securities registered in the name of, any person other 
than the Depositary for such Global Security or any nominee of such 
Depositary, and no such transfer may be registered, unless (i) the Depositary 
has notified the Company that it is unwilling or unable to continue as 
Depositary for such Global Security or has ceased to be qualified to act as 
such as required by the applicable Indenture, (ii) the Company executes and 
delivers to the Trustee an order that such Global Security shall be so 
transferable, registrable and exchangeable, and such transfers shall be 
registrable, or (iii) there shall exist such circumstances, if any, as may be 
described in the applicable Prospectus Supplement.  All Debt Securities 
issued in exchange for a Global Security or any portion thereof will be 
registered in such names as the Depositary may direct.

     The specific terms of the depositary arrangement with respect to any 
portion of a series of Debt Securities to be represented by a Global Security 
will be described in the applicable Prospectus Supplement.  The Company 
expects that the following provisions will apply to depositary arrangements.

     Unless otherwise specified in the applicable Prospectus Supplement, Debt 
Securities which are to be represented by a Global Security to be deposited 
with or on behalf of a Depositary will be represented by a Global Security 
registered in the name of such Depositary or its nominee.  Upon the issuance 
of such Global Security and the deposit of such Global Security with or on 
behalf of the Depositary for such Global Security, the Depositary will 
credit, on its book-entry registration and transfer system, the respective 
principal amounts of the Debt Securities represented by such Global Security 
to the accounts of institutions that have accounts with such Depositary or 
its nominee ("participants").  The accounts to be credited will be designated 
by the underwriters or agents of such Debt Securities or by the Company, if 
such Debt Securities are offered and sold directly by the 

                                      13 



Company.  Ownership of beneficial interests in such Global Security will be 
limited to participants or persons that may hold interests through 
participants.  Ownership of beneficial interests by participants in such 
Global Security will be shown on, and the transfer of that ownership interest 
will be effected only through, records maintained by the Depositary or its 
nominee for such Global Security.  Ownership of beneficial interests in such 
Global Security by Persons that hold through participants will be shown on, 
and the transfer of that ownership interest within such participant will be 
effected only through, records maintained by such participant.  The laws of 
some jurisdictions require that certain purchasers of securities take 
physical delivery of such securities in certificated form.  The foregoing 
limitations and such laws may impair the ability to transfer beneficial 
interests in such Global Securities.

     So long as the Depositary for a Global Security, or its nominee, is the 
registered owner of such Global Security, such Depositary or such nominee, as 
the case may be, will be considered the sole owner or holder of the Debt 
Securities represented by such Global Security for all purposes under the 
Indenture.  Unless otherwise specified in the applicable Prospectus 
Supplement, owners of beneficial interests in such Global Security will not 
be entitled to have Debt Securities of the series represented by such Global 
Security registered in their names, will not receive or be entitled to 
receive physical delivery of Debt Securities of such series in certified form 
and will not be considered the holders thereof for any purposes under the 
Indenture. Accordingly, each person owning a beneficial interest in such 
Global Security must rely on the procedures of the Depositary and, if such 
person is not a participant, on the procedures of the participant through 
which such person owns its interest, to exercise any rights of a holder under 
the Indenture.  If the Company requests any action of holders or an owner of 
a beneficial interest in such Global Security desires to give any notice or 
take any action a holder is entitled to give or take under the Indenture, the 
Depositary will authorize the participants to give such notice or take such 
action, and participants would authorize beneficial owners owning through 
such participants to give such notice or take such action or would otherwise 
act upon the instructions of beneficial owners owning through them.

     Notwithstanding any other provisions to the contrary in the Indenture, 
the rights of the beneficial owners of the Debt Securities to receive payment 
of the principal and premium, if any, of and interest on such Debt 
Securities, on or after the respective due dates expressed in such Debt 
Securities, or to institute suit for the enforcement of any such payment on 
or after such respective dates, shall not be impaired or affected without the 
consent of the beneficial owners.

     Principal of and any interest on a Global Security will be payable in 
the manner described in the applicable Prospectus Supplement.

CONSOLIDATION, MERGER AND SALE OF ASSETS 

     The Company, without the consent of any holders of outstanding Debt 
Securities, may not consolidate with or merge into, or sell, assign, 
transfer, lease, convey or otherwise dispose of all or substantially all of 
its property or assets to any person unless (a) the Company is the surviving 
corporation or the entity or the person formed by or surviving any such 
consolidation or merger (if other than the Company) or to which such sale, 
assignment, transfer, lease, conveyance or other disposition shall have been 
made is a corporation organized and existing under the laws of the United 
States, any state thereof or the District of Columbia; (b) the entity or 
person formed by or surviving any such consolidation or merger (if other than 
the Company) or the entity or person to which such sale, assignment, 
transfer, lease, conveyance or other disposition shall have been made assumes 
all the obligations of the Company under the Debt Securities and the 
Indenture; and (c) immediately prior to and after the transaction no Default 
or Event of Default exists.



                                      14 



     Except as may be described in a Prospectus Supplement applicable to a 
particular series of Debt Securities, there are no covenants or other 
provisions in the Indenture providing for a put or increased interest or 
otherwise that would afford holders of Debt Securities additional protection 
in the event of a recapitalization transaction, a change of control of the 
Company or a highly leveraged transaction.

COVENANTS OF THE COMPANY 

     The applicable Prospectus Supplement will describe any material 
covenants in respect of a series of Offered Debt Securities.  Other than the 
covenants of the Company included in the Indenture as described above or as 
described in the applicable Prospectus Supplement, the Indenture will not 
provide holders of Debt Securities protection in the event of a 
highly-leveraged transaction, reorganization, restructuring, merger or 
similar transaction involving the Company which could adversely affect 
holders of Debt Securities.

EVENTS OF DEFAULT 

     Unless otherwise specified in the applicable Prospectus Supplement, the 
following will constitute Events of Default under the Indenture with respect 
to Debt Securities of any series:  (a) failure to pay principal of any Debt 
Security of that series when due and payable at maturity, upon redemption or 
otherwise; (b) failure to pay any interest on any Debt Security of that 
series when due, and the Default continues for 30 days; (c) an Event of 
Default, as defined in the Debt Securities of that series, occurs and is 
continuing, or the Company fails to comply with any of its other agreements 
in the Debt Securities of that series or in the Indenture with respect to 
that series and the Default continues for the period and after the notice 
provided therein (and described below); and (d) certain events of bankruptcy, 
insolvency or reorganization.  A Default under clause (c) above is not an 
Event of Default with respect to a particular series of Securities until the 
Trustee or the holders of at least 25% in principal amount of the then 
outstanding Securities of that series notify the Company of the Default and 
the Company does not cure the Default within 30 days after receipt of the 
notice.  The notice must specify the Default, demand that it be remedied and 
state that the notice is a "Notice of Default."

     If an Event of Default with respect to outstanding Debt Securities of 
any series (other than an Event or Default relating to certain events of 
bankruptcy, insolvency or reorganization) shall occur and be continuing, 
either the Trustee or the holders of at least 25% in principal amount of the 
outstanding Debt Securities of that series by notice, as provided in the 
Indenture, may declare the unpaid principal amount (or, if the Debt 
Securities of that series are Original Issue Discount Securities, such lesser 
amount as may be specified in the terms of that series) of, and any accrued 
and unpaid interest on, all Debt Securities of that series to be due and 
payable immediately.  However, at any time after a declaration of 
acceleration with respect to Debt Securities of any series has been made, but 
before a judgment or decree based on such acceleration has been obtained, the 
holders of a majority in principal amount of the outstanding Debt Securities 
of that series may, under certain circumstances, rescind and annul such 
acceleration.  For information as to waiver of defaults, see "Modification 
and Waiver" below.

     The Indenture will provide that, subject to the duty of the Trustee 
during an Event of Default to act with the required standard of care, the 
Trustee will be under no obligation to exercise any of its rights or powers 
under the applicable Indenture at the request or direction of any of the 
holders, unless such holders shall have offered to the Trustee reasonable 
security or indemnity. Subject to certain provisions, including those 
requiring security or indemnification of the Trustee, the holders of a 
majority in principal amount of the outstanding Debt Securities of any series 
will have the right to direct the time, method and place of conducting any 
proceeding for any remedy available to the Trustee, or exercising any trust 
or power conferred on the Trustee, with respect to the Debt Securities of 
that series.

                                      15 



     The Company will be required to furnish to the Trustee under the 
Indenture annually a statement as to the performance by the Company of its 
obligations under that Indenture and as to any default in such performance.

MODIFICATION AND WAIVER 

     Subject to certain exceptions, the Company and the Trustee may amend the 
Indenture or the Debt Securities with the written consent of the holders of a 
majority in principal amount of the then outstanding Debt Securities of each 
series affected by the amendment with each series voting as a separate class. 
The holders of a majority in principal amount of the then outstanding Debt 
Securities of any series may also waive compliance in a particular instance 
by the Company with any provision of the Indenture with respect to the Debt 
Securities of that series; provided, however, that without the consent of 
each holder of Debt Securities affected, an amendment or waiver may not (i) 
reduce the percentage of the principal amount of Debt Securities whose 
holders must consent to an amendment or waiver; (ii) reduce the rate or 
change the time for payment of interest on any Debt Security; (iii) reduce 
the principal of or change the fixed maturity of any Debt Security, or alter 
the redemption provisions which respect thereto; (iv) make any Debt Security 
payable in money other than that stated in the Debt Security; (v) make any 
change in the provisions concerning waivers of Default or Events of Default 
by holders or the rights of holders to recover the principal of or interest 
on any Debt Security; or (vi) waive a default in the payment of the principal 
of, or interest on, any Debt Security, except as otherwise provided in the 
Indenture.  The Company and the Trustee may amend the Indenture or the Debt 
Securities without notice to or the consent of any holder of a Debt Security: 
(i) to cure any ambiguity, defect or inconsistency; (ii) to comply with the 
Indenture's provisions with respect to successor corporations; (iii) to 
comply with any requirements of the Commission in connection with the 
qualification of the Indenture under the TIA; (iv) to provide for Debt 
Securities in addition to or in place of certificated Debt Securities; (v) to 
add to, change or eliminate any of the provisions of the Indenture in respect 
of one of more series of Debt Securities, provided, however, that any such 
addition, change or elimination (A) shall neither (1) apply to any Debt 
Security of any series created prior to the execution of such amendment and 
entitled to the benefit of such provision, nor (2) modify the rights of a 
holder of any such Debt Security with respect to such provision, or (B) shall 
become effective only when there is no outstanding Debt Security of any 
series created prior to such amendment and entitled to the benefit of such 
provision; (vi) to make any change that does not adversely affect in any 
material respect the interest on any holder; or (vii) to establish additional 
series of Debt Securities as permitted by the Indenture.

     Subject to certain exceptions, the holders of a majority in principal 
amount of the then outstanding Debt Securities of any series, by notice to 
the Trustee, may waive an existing Default or Event of Default and its 
consequences except a Default or Event of Default in the payment of the 
principal of or interest on any Debt Security with respect to the Debt 
Securities of that series.

TERMINATION OF THE COMPANY'S OBLIGATIONS UNDER THE DEBT SECURITIES AND THE 
INDENTURE

     Except as otherwise described below, the Company may terminate its 
obligations under the Debt Securities and the Indenture with respect to the 
Debt Securities if:

     (a)  all previously authenticated and delivered (other than destroyed, 
lost or stolen Debt Securities which have been replaced or Debt Securities 
which are paid or Debt Securities for whose payment money or securities has 
theretofore been held in trust and thereafter repaid to the Company) have 
been delivered to the Trustee for cancellation and the Company has paid all 
sums payable by it under the Indenture; or

     (b)  (1) the Debt Securities mature within one year; and


                                      16 



          (2) the Company irrevocably deposits in trust with the Trustee 
during such one-year period, under the terms of an irrevocable trust 
agreement in form and substance satisfactory to the Trustee, as trust funds 
solely for the benefit of the holders of Debt Securities for that purpose, 
money or U.S. Government Obligations, or a combination thereof, with the U.S. 
Government Obligations maturing as to principal and interest in such amounts 
and at such times as are sufficient, without consideration of any 
reinvestment of such interest, to pay principal of and interest on the Debt 
Securities to maturity and to pay all other sums payable by it under the 
Indenture; or 

     (c)  (1) the Company irrevocably deposits in trust with the Trustee 
under the terms of an irrevocable trust agreement in form and substance 
satisfactory to the Trustee, as trust funds solely for the benefit of the 
holders of Debt Securities for that purpose, money or U.S. Government 
Obligations, or a combination thereof, with the U.S. Government Obligations 
maturing as to principal and interest in such amounts and at such times as 
are sufficient, without consideration of any reinvestment of such interest, 
to pay principal of and interest on the Debt Securities to maturity;

          (2)  The Company shall have delivered to the Trustee (A) a ruling 
directed to the Trustee received from the Internal Revenue Service to the 
effect that the holders of the Debt Securities will not recognize income, 
gain or loss for federal income tax purposes as a result of the Company's 
exercise of its option under this clause (c) and will be subject to federal 
income tax on the same amount and in the same manner and at the same times as 
would have been the case if such option had not been exercised, or (B) an 
opinion of counsel to the same effect as the ruling described in subclause 
(A) above accompanied by a ruling to that effect published by the Internal 
Revenue Service, unless there has been a change in the applicable federal 
income tax law since the date of the Indenture such that a ruling from the 
Internal Revenue Service is no longer required;

          (3)  The Company has paid or caused to be paid all sums then 
payable by the Company under the Indenture; and

          (4)  the Company has delivered to the Trustee an officers' 
certificate and an opinion of counsel, each stating that all conditions 
precedent provided for in this clause (c) relating to termination of 
obligations of the Company have been complied with.

     The Company's obligations under sections of the Indenture relating to 
the registrar and the paying agent, their obligations, the maintenance of a 
list of holders, transfers of Debt Securities, replacement of securities, 
payment (together with payment obligations under the Debt Securities), 
compensation and indemnity of the Trustee, replacement of the Trustee and 
repayment to the Company of excess money held by the Trustee or the paying 
Agent, shall survive until the Debt Securities are no longer outstanding.  If 
the ruling from the Internal Revenue Service or opinion of counsel referred 
to in clause (c)(2) above is based on or assumes that the Company's payment 
obligations under the Indenture or its payment obligations under the Debt 
Securities will continue (or is silent with respect thereto), then such 
discharge shall constitute only a "covenant defeasance" and, consequently, 
the Company shall remain liable for the payment of the Debt Securities.  
However, if and when a ruling from the Internal Revenue Service or opinion of 
counsel referred to in clause (c)(2) above is able to be provided 
specifically without regard to, and not in reliance upon, the continuance of 
the Company's payment obligations under the Indenture and its payment 
obligations under the Debt Securities, then the Company's payment obligations 
under the Indenture and the Debt Securities shall cease upon delivery to the 
Trustee of such ruling or opinion of counsel and compliance with the other 
conditions precedent provided for in clause (c) above relating to the 
satisfaction and discharge of the Indenture.  In such a case (a "legal 
defeasance") holders would be able to look only to the trust fund for payment 
of principal or interest on the Debt Securities.



                                      17 



REGARDING THE TRUSTEES

     The Trustee with respect to the first series of Debt Securities, if any, 
will be identified in the Prospectus Supplement relating to such Debt 
Securities.  Other Trustees may be designated for any subsequent series of 
Debt Securities.  The Indenture and provisions of the TIA incorporated by 
reference therein, contain certain limitations on the rights of the Trustee, 
should it become a creditor of the Company, to obtain payment of claims in 
certain cases, or to realize on certain property received in respect of any 
such claim, as security or otherwise.  The Trustee and its affiliates engage 
in, and will be permitted to continue to engage in, other transactions with 
the Company and its affiliates; PROVIDED, HOWEVER, that if it acquires any 
conflicting interest (as defined), it must eliminate such conflict or resign. 

     The holders of a majority in principal amount of the then outstanding 
Debt Securities of any series will have the right to direct the time, method 
and place of conducting any proceeding for exercising any remedy available to 
the Trustee.  The TIA and the Indenture provide that in case an Event of 
Default shall occur (and be continuing), the Trustee will be required, in the 
exercise of its rights and powers, to use the degree of care and skill of a 
prudent man in the conduct of his own affairs.  Subject to such provision, 
the Trustee will be under no obligation to exercise any of its rights or 
powers under the Indenture at the request of any of the holders of the Debt 
Securities issued thereunder, unless they have offered to the Trustee 
indemnity satisfactory to it.

                      DESCRIPTION OF PREFERRED STOCK

     The following description of the terms of the Preferred Stock sets forth 
certain general terms and provisions of the Preferred Stock to which any 
Prospectus Supplement may relate.  Certain other terms of any series of the 
Preferred Stock offered by any Prospectus Supplement will be described in 
such Prospectus Supplement.  The description of certain provisions of the 
Preferred Stock set forth below and in any Prospectus Supplement does not 
purport to be complete and is subject to and qualified in its entirety by 
reference to the Company's Articles of Incorporation, as amended (the 
"Articles of Incorporation"), and the certificate of designation (a 
"Certificate of Designation") relating to each series of the Preferred Stock 
which will be filed with the Commission and incorporated by reference in the 
Registration Statement of which this Prospectus is a part at or prior to the 
time of the issuance of such series of the Preferred Stock.  As of March 31, 
1996, the Company had no shares of Preferred Stock outstanding.

GENERAL

     The Company has the authority to issue up to 5,000,000 shares of 
preferred stock, $.001 par value per share ("preferred stock of the Company," 
which term, as used herein, includes the Preferred Stock offered hereby).  
Under the Articles of Incorporation, the Board of Directors of the Company is 
authorized without further stockholder action to designate and provide for 
the issuance of such shares of preferred stock of the Company, in one or more 
series, with such voting powers, full or limited, and with such designations, 
preferences and relative participating, optional or other special rights, and 
qualifications, limitations or restrictions thereof, as shall be stated in 
the resolution or resolutions providing for the issue of a series of such 
stock adopted, at any time or from time to time, by the Board of Directors of 
the Company (as used herein the term "Board of Directors of the Company" 
includes any duly authorized committee thereof).  

     The Preferred Stock shall have the dividend, liquidation, redemption and 
voting rights set forth below unless otherwise provided in a Prospectus 
Supplement relating to a particular series of the Preferred Stock.  Reference 
is made to the Prospectus Supplement relating to the particular series of the 
Preferred Stock offered thereby for specific terms, including:  (i) the 
designation and stated value per share of such Preferred Stock and the number 
of shares offered; (ii) the amount of liquidation preference per share; (iii) 
the initial public offering price at which such Preferred Stock will be 
issued; 

                                      18 



(iv) the dividend rate (or method of calculation), the dates on which 
dividends shall be payable and the dates from which dividends shall commence 
to cumulate, if any; (v) any redemption or sinking fund provisions; (vi) any 
conversion or exchange rights; (vii) whether depositary shares representing 
shares of such Preferred Stock will be offered and, if so, the fraction of a 
share of such Preferred Stock represented by each depositary share; and 
(viii) any additional voting, dividend, liquidation, redemption, sinking fund 
and other rights, preferences, privileges, limitations and restrictions.

     The Preferred Stock will, when issued, be fully paid and nonassessable 
and will have no preemptive rights.  The rights of the holders of each series 
of the Preferred Stock will be subordinate to those of the Company's general 
creditors.

DIVIDEND RIGHTS

     Holders of the Preferred Stock of each series will be entitled to 
receive, when, as and if declared by the Board of Directors of the Company, 
out of funds of the Company legally available therefor, cash dividends on 
such dates and at such rates as are set forth in, or as are determined by the 
method described in, the Prospectus Supplement relating to such series of the 
Preferred Stock.  Such rate may be fixed or variable or both.  Each such 
dividend will be payable to the holders of record as they appear on the stock 
books of the Company on such record dates, fixed by the Board of Directors of 
the Company, as specified in the Prospectus Supplement relating to such 
series of Preferred Stock.

     Such dividends may be cumulative or noncumulative, as provided in the 
Prospectus Supplement relating to such series of Preferred Stock.  If the 
Board of Directors of the Company fails to declare a dividend payable on a 
dividend payment date on any series of Preferred Stock for which dividends 
are noncumulative, then the right to receive a dividend in respect of the 
dividend period ending on such dividend payment date will be lost, and the 
Company will have no obligation to pay any dividend for such period, whether 
or not dividends on such series are declared payable on any future dividend 
payment dates. Dividends on the shares of each series of Preferred Stock for 
which dividends are cumulative will accrue from the date on which the Company 
initially issues shares of such series.

     Unless otherwise specified in the applicable Prospectus Supplement, so 
long as the shares of any series of the Preferred Stock are outstanding, 
unless (i) full dividends (including if such Preferred Stock is cumulative, 
dividends for prior dividend periods) have been paid or declared and set 
apart for payment on all outstanding shares of the Preferred Stock of such 
series and all other classes and series of preferred stock of the Company 
(other than Junior Stock, as defined below) and (ii) the Company is not in 
default or in arrears with respect to the mandatory or optional redemption or 
mandatory repurchase or other mandatory retirement of, or with respect to any 
sinking or other analogous funds for, any shares of Preferred Stock of such 
series or any shares of any other preferred stock of the Company of any class 
or series (other than Junior Stock), the Company may not declare any 
dividends on any shares of Common Stock of the Company or any other stock of 
the Company ranking as to dividends or distributions of assets junior to such 
series of Preferred Stock (the Common Stock and any such other stock being 
herein referred to as "Junior Stock"), or make any payment on account of, or 
set apart money for, the purchase, redemption or other retirement of, or for 
a sinking or other analogous fund for, any shares of Junior Stock or make any 
distribution in respect thereof, whether in cash or property or in 
obligations of stock of the Company, other than in Junior Stock which is 
neither convertible into, nor exchangeable or exercisable for, any securities 
of the Company other than Junior Stock.

LIQUIDATION PREFERENCES

     Unless otherwise specified in the applicable Prospectus Supplement, in 
the event of any liquidation, dissolution or winding up of the Company, 
whether voluntary or involuntary, the holders of each series of the Preferred 
Stock will be entitled to receive out of the assets of the Company 

                                      19 



available for distribution to stockholders, before any distribution of assets 
is made to the holders of Common Stock or any other shares of stock of the 
Company ranking junior as to such distribution to such series of the 
Preferred Stock, the amount set forth in the Prospectus Supplement relating 
to such series of the Preferred Stock.  If, upon any voluntary or involuntary 
liquidation, dissolution or winding up of the Company, the amounts payable 
with respect to the Preferred Stock of any series and any other shares of 
preferred stock of the Company (including any other series of the Preferred 
Stock) ranking as to any such distribution on a parity with such series of 
the Preferred Stock are not paid in full, the holders of the Preferred Stock 
of such series and of such other shares of preferred stock of the Company 
will share ratably in any such distribution of assets of the Company in 
proportion to the full respective preferential amounts to which they are 
entitled.  After payment to the holders of the Preferred Stock of each series 
of the full preferential amounts of the liquidating distribution to which 
they are entitled, unless otherwise provided in the applicable Prospectus 
Supplement, the holders of each such series of the Preferred Stock will be 
entitled to no further participation in any distribution of assets by the 
Company.

REDEMPTION

     A series of the Preferred Stock may be redeemable, in whole or from time 
to time in part, at the option of the Company, and may be subject to 
mandatory redemption pursuant to a sinking fund or otherwise, in each case 
upon terms, at the times and at the redemption prices set forth in the 
Prospectus Supplement relating to such series.  Shares of the Preferred Stock 
redeemed by the Company will be restored to the status of authorized but 
unissued shares of preferred stock of the Company.

     In the event that fewer than all of the outstanding shares of a series 
of the Preferred Stock are to be redeemed, whether by mandatory or optional 
redemption, the number of shares to be redeemed will be determined by lot or 
pro rata (subject to rounding to avoid fractional shares) as may be 
determined by the Company or by any other method as may be determined by the 
Company in its sole discretion to be equitable.  From and after the 
redemption date (unless default is made by the Company in providing for the 
payment of the redemption price plus cumulated and unpaid dividends, if any) 
dividends will cease to accumulate on the shares of the Preferred Stock 
called for redemption and all rights of the holders thereof (except the right 
to receive the redemption price plus accumulated and unpaid dividends, if 
any) will cease.

     Unless otherwise specified in the applicable Prospectus Supplement, so 
long as any dividends on shares of any series of the Preferred Stock or any 
other series of preferred stock of the Company ranking on a parity as to 
dividends and distribution of assets with such series of the Preferred Stock 
are in arrears, no shares of any such series of the Preferred Stock or such 
other series of preferred stock of the Company will be redeemed (whether by 
mandatory or optional redemption) unless all such shares are simultaneously 
redeemed, and the Company will not purchase or otherwise acquire any such 
shares; PROVIDED, HOWEVER, that the foregoing will not prevent the purchase 
or acquisition of share shares pursuant to a purchase or exchange offer made 
on the same terms to holders of all such shares outstanding.

CONVERSION AND EXCHANGE RIGHTS

     The terms, if any, on which shares of Preferred Stock of any series may 
be exchanged for or converted into shares of Common Stock or another series 
of Preferred Stock will be set forth in the Prospectus Supplement relating 
thereto. Such terms may include provisions for conversion, either mandatory, 
at the option of the holder, or at the option of the Company, in which case 
the number of shares of Common Stock or the number of shares of another 
series of Preferred Stock to be received by the holders of Preferred Stock 
would be calculated as of a time and in the manner stated in the Prospectus 
Supplement.

                                      20 



VOTING RIGHTS

     Except as indicated in a Prospectus Supplement relating to a particular 
series of the Preferred Stock, or except as required by applicable law, the 
holders of the Preferred Stock will not be entitled to vote for any purpose.

                         DESCRIPTION OF COMMON STOCK

     The Company has authority to issue up to 25,000,000 shares of Common 
Stock, par value $.001 per share.  As of May 3, 1996, there were 18,380,652 
shares of Common Stock issued and outstanding.  The holders of Common Stock 
are entitled to one vote per share on all matters to be voted on by 
shareholders, including the election of directors.  Shareholders are not 
entitled to cumulative voting rights, and, accordingly, the holders of a 
majority of the shares voting for the election of directors can elect the 
entire Board if they choose to do so and, in that event, the holders of the 
remaining shares will not be able to elect any person to the Board of 
Directors.

     The holders of Common Stock are entitled to receive such dividends, if 
any, as may be declared from time to time by the Board of Directors, in its 
discretion, from funds legally available thereof and subject to prior 
dividend rights of holders of any shares of preferred stock of the Company 
which may be outstanding.  Upon liquidation or dissolution of the Company 
subject to prior liquidation rights of the holders of preferred stock of the 
Company, the holders of Common Stock are entitled to receive on a pro rata 
basis the remaining assets of the Company available for distribution.  
Holders of Common Stock have no preemptive or other subscription rights, and 
there are no conversion rights or redemption or sinking fund provisions with 
respect to such shares.  Norwest Bank Minnesota, N.A., acts as transfer agent 
and registrar for the Common Stock.

                           DESCRIPTION OF WARRANTS

          The Company may issue Warrants to purchase Debt Securities ("Debt 
Warrants"), as well as Warrants to purchase Preferred Stock or Common Stock 
("Equity Warrants") (together, the "Warrants").  Warrants may be issued 
independently or together with any Securities and may be attached to or 
separate from such Securities.  The Warrants are to be issued under warrant 
agreements (each a "Warrant Agreement") to be entered into between the 
Company and a bank or trust company, as warrant agent (the "Warrant Agent"), 
all as shall be set forth in the Prospectus Supplement relating to Warrants 
being offered pursuant thereto.  As of May 3, 1996, the Company had no 
Warrants outstanding.

DEBT WARRANTS

     The applicable Prospectus Supplement will describe the terms of Debt 
Warrants offered thereby, the Warrant Agreement relating to such Debt 
Warrants and the debt warrant certificates representing such Debt Warrants 
("Debt Warrant Certificates"), including the following:  (1) the title of 
such Debt Warrants; (2) the aggregate number of such Debt Warrants; (3) the 
price or prices at which such Debt Warrants will be issued; (4) the 
designation, aggregate principal amount and terms of the Debt Securities 
purchasable upon exercise of such Debt Warrants, and the procedures and 
conditions relating to the exercise of such Debt Warrants; (5) the 
designation and terms of any related Debt Securities with which such Debt 
Warrants are issued, and the number of such Debt Warrants issued with each 
such Debt Security; (6) the date, if any, on and after which such Debt 
Warrants and the related Debt Securities will be separately transferable; (7) 
the principal amount of Debt Securities purchasable upon exercise of each 
Debt Warrant; (8) the date on which the right to exercise such Debt Warrants 
will commence, and the date on which such right will expire; (9) the maximum 
or minimum number of such Debt Warrants which may be exercised at any time; 
(10) a discussion of any material federal income 

                                      21 



tax considerations; and (11) any other terms of such Debt Warrants and terms, 
procedures and limitations relating to the exercise of such Debt Warrants.

     Debt Warrant Certificates will be exchangeable for new Debt Warrant 
Certificates of different denominations, and Debt Warrants may be exercised 
at the corporate trust office of the Warrant Agent or any other office 
indicated in the Prospectus Supplement.  Prior to the exercise of their Debt 
Warrants, holders of Debt Warrants will not have any of the rights of holders 
of the Debt Securities purchasable upon such exercise and will not be 
entitled to payment of principal of or any premium or interest on the Debt 
Securities purchasable upon such exercise.

EQUITY WARRANTS

     The applicable Prospectus Supplement will describe the following terms 
of Equity Warrants offered thereby:  (1) the title of such Equity Warrants; 
(2) the Securities (i.e. Preferred Stock or Common Stock) for which such 
Equity Warrants are exercisable; (3) the price or prices at which such Equity 
Warrants will be issued; (4) if applicable, the designation and terms of the 
Preferred Stock or Common Stock with which such Equity Warrants are issued, 
and the number of such Equity Warrants issued with each such share of 
Preferred Stock or Common Stock; (5) if applicable, the date on and after 
which such Equity Warrants and the related Preferred Stock or Common Stock 
will be separately transferable; (6) if applicable, a discussion of any 
material federal income tax considerations; and (7) any other terms of such 
Equity Warrants, including terms, procedures and limitations relating to the 
exchange and exercise of such Equity Warrants.

     Holders of Equity Warrants will not be entitled, by virtue of being such 
holders, to vote, to consent, to receive dividends, to receive notice as 
stockholders with respect to any meeting of stockholders for the election of 
directors of the Company or any other matter, or to exercise any rights 
whatsoever as stockholders of the Company.

     The exercise price payable and the number of shares of Common Stock of 
Preferred Stock purchasable upon the exercise of each Equity Warrant will be 
subject to adjustment in certain events, including the issuance of a stock 
dividend to holders of Common Stock or Preferred Stock or a stock split, 
reverse stock split, combination, subdivision or reclassification of Common 
Stock or Preferred Stock.  In lieu of adjusting the number of shares of 
Common Stock or Preferred Stock purchasable upon exercise of each Equity 
Warrant, the Company may elect to adjust the number of Equity Warrants.  No 
adjustments in the number of shares purchasable upon exercise of the Equity 
Warrants will be required until cumulative adjustments require an adjustment 
of at least 1% thereof.  The Company may, at its option, reduce the exercise 
price at any time.  No fractional shares will be issued upon exercise of 
Equity Warrants, but the Company will pay the cash value of any fractional 
shares otherwise issuable. Notwithstanding the foregoing, in case of any 
consolidation, merger, or sale or conveyance of the property of the Company 
as an entirety or substantially as an entirety, the holder of each 
outstanding Equity Warrant shall have the right to the kind and amount of 
shares of stock and other securities and property (including cash) receivable 
by a holder of the number of shares of Common Stock of Preferred Stock into 
which such Equity Warrant was exercisable immediately prior thereto.

EXERCISE OF WARRANTS

     Each Warrant will entitle the holder to purchase for cash such principal 
amount of Securities at such exercise price as shall in each case be set 
forth in, or be determinable as set forth in, the Prospectus Supplement 
relating to the Warrants offered thereby.  Warrants may be exercised at any 
time up to the close of business on the expiration date set forth in the 
Prospectus Supplement relating to the Warrants offered thereby.  After the 
close of business on the expiration date, unexercised Warrants will become 
void.

                                      22 



     Warrants may be exercised as set forth in the Prospectus Supplement 
relating to the Warrants offered thereby.  Upon receipt of payment and the 
warrant certificate properly completed and duly executed at the corporate 
trust office of the Warrant Agent or any other office indicated in the 
Prospectus Supplement, the Company will, as soon as practicable, forward the 
Securities purchasable upon such exercise.  If less than all of the Warrants 
represented by such warrant certificate are exercised, a new warrant 
certificate will be issued for the remaining Warrants. 

































                                      23 



                             PLAN OF DISTRIBUTION

     The Company may sell the Securities to one or more underwriters for 
public offering and sale in the United States or Canada by them or may sell 
the Securities to investors directly or through agents.  Any such underwriter 
or agent involved in the offer and sale of Securities will be named in the 
applicable Prospectus Supplement.  The Company has reserved the right to sell 
Securities directly to investors on its own behalf in those jurisdictions 
where and in such manner as it is authorized to do so.

     Underwriters may offer and sell Securities at a fixed price or prices, 
which may be changed, at market prices prevailing at the time of sale, at 
prices related to such prevailing market prices, or at negotiated prices.  
The Company also may, from time to time, authorize dealers, acting as the 
Company's agents, to offer and sell Securities upon the terms and conditions 
as are set forth in the applicable Prospectus Supplement.  In connection with 
the sale of Securities, underwriters may receive compensation from the 
Company in the form of underwriting discounts or commissions and may also 
receive commissions from purchasers of the Securities for whom they may act 
as agent.  Underwriters may sell Securities to or through dealers, and such 
dealers may receive compensation in the form of discounts, concessions or 
commissions from the underwriters and/or commissions from the purchasers for 
whom they may act as agent.

     Any underwriting compensation paid by the Company to underwriters or 
agents in connection with the offering of Securities, and any discounts, 
concessions or commissions allowed by underwriters to participating dealers, 
will be set forth in the applicable Prospectus Supplement.  Dealers and 
agents participating in the distribution of Securities may be deemed to be 
underwriters, and any discounts and commissions received by them and any 
profit realized by them on resale of the Securities may be deemed to be 
underwriting discounts and commissions.  Underwriters, dealers and agents may 
be entitled, under agreements entered into with the Company, to 
indemnification against and contribution toward certain civil liabilities, 
including liabilities under the Securities Act of 1933.

     If so indicated in the Prospectus Supplement, the Company will authorize 
dealers acting as the Company's agents to solicit offers by certain 
institutions to purchase the Securities from the Company at the public 
offering price set forth in the applicable Prospectus Supplement pursuant to 
delayed delivery contracts ("Contracts") providing for payment and delivery 
on the date or dates stated in such Prospectus Supplement.  Each Contract 
will be for an amount not less than the amounts stated in the applicable 
Prospectus Supplement. Institutions with whom Contracts, when authorized, may 
be made include commercial and savings banks, insurance companies, pension 
funds, investment companies, educational and charitable institutions, and 
other institutions but will in all cases be subject to the approval of the 
Company.  Contracts will not be subject to any conditions except (i) the 
purchase by the institution of the Securities covered by its Contract shall 
not at the time of delivery be prohibited under the laws of any jurisdiction 
in the United States to which such institution is subject, and (ii) if the 
Securities are being sold to underwriters, the Company shall have sold to 
such underwriters the total amount specified in the applicable Prospectus 
Supplement.  A commission indicated in the applicable Prospectus Supplement 
will be paid to underwriters and agents soliciting purchases of Securities 
pursuant to Contracts accepted by the Company.

     The rules of the Commission generally prohibit underwriters and other 
members of the selling group from making a market in the Company's Common 
Stock during the "cooling off" period immediately preceding the commencement 
of sales in the offering.  The Commission has, however, adopted an exemption 
from these rules that permits passive market making under certain conditions. 
These rules permit an underwriter or other member of the selling group to 
continue to make a market in the Company's Common Stock subject to the 
conditions, among others, that its bid not exceed the highest bid by a market 
maker not connected with the offering and that its net purchases on any one 
trading day not exceed prescribed limits.  Pursuant to these exemptions, 
certain underwriters and other 

                                      24 



members of the selling group may engage in passive market making in the 
Company's Common Stock during the cooling off period.

                               LEGAL MATTERS 

     Certain legal matters with respect to the Securities offered hereby will 
be passed upon for the Company by Latham & Watkins, San Francisco, 
California. Certain legal matters will be passed upon for any agents or 
underwriters by counsel for such agents or underwriters identified in the 
applicable Prospectus Supplement.

                                  EXPERTS 

     The financial statements of The Spectranetics Corporation as of December 
31, 1995 and 1994, and for each of the years in the three-year period ended 
December 31, 1995 have been incorporated by reference herein and in the 
registration statement in reliance upon the report of KPMG Peat Marwick LLP, 
independent certified public accountants, incorporated by reference herein, 
and upon the authority of said firm as experts in accounting and auditing. 

















                                      25 



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     NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE 
ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THIS 
OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR 
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING 
BEEN SO AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER.  THIS PROSPECTUS DOES 
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY BY 
ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER TO SELL IS NOT AUTHORIZED, OR 
IN WHICH THE PERSON IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS 
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS 
PROSPECTUS NOR ANY SALE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY 
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE 
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY 
TIME SUBSEQUENT TO ITS DATE.

                           _______________________


                              TABLE OF CONTENTS

                                                                    PAGE

Available Information............................................     2 
Information Incorporated by Reference............................     2 
The Company......................................................     3 
Risk Factors.....................................................     4 
Use of Proceeds..................................................     9 
Ratios of Earnings to Fixed Charges and Earnings to Combined 
 Fixed Charges and Preferred Stock Dividends.....................     9 
General Description of Securities................................    10 
Description of Debt Securities...................................    10 
Description of Preferred Stock...................................    18 
Description of Common Stock......................................    21 
Description of Warrants..........................................    21 
Plan of Distribution.............................................    24 
Legal Matters....................................................    25 
Experts..........................................................    25




                             THE SPECTRANETICS
                                CORPORATION
 

                                $50,000,000


                              DEBT SECURITIES
                              PREFERRED STOCK
                               COMMON STOCK
                              EQUITY WARRANTS
                               DEBT WARRANTS












                              ____________________

                                   PROSPECTUS
                              ____________________




                                  July 12, 1996


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