SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
December 28, 1999
Waste Systems International, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 0-25998 95-420366
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
420 Bedford Street, Suite 300
Lexington, MA 02420
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code:
(781) 862-3000
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1
ITEM 5. OTHER EVENTS.
On December 28, 1999, Waste Systems International, Inc. (the "Company")
completed a $15 million private placement of Series D Preferred Stock. The
Company's press release announcing such event is attached hereto as Exhibit 99.1
and the Certificate of Designation of the Company's Series D Preferred Stock is
attached hereto as Exhibit 99.2.
Exhibits
99.1 Press Release of the Company dated December 28, 1999
99.2 Certificate of Designation of the Company's Series D Preferred Stock
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WASTE SYSTEMS INTERNATIONAL, INC.
Date: December 29, 1999 By: /s/ James L. Elitzak
----------------------------
James L. Elitzak
Vice President and Chief
Financial Officer
<PAGE>
Exhibit 99.1
Waste Systems International, Inc.
Lexington Office Park, 420 Bedford Street, Suite 300, Lexington, MA 02420
Tel: 781-862-3000; Fax 781-862-2929
FOR IMMEDIATE RELEASE:
Contacts: Waste Systems International, Inc.
Brian Norris, Director of Investor Relations
Tel: 781-862-3000
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WASTE SYSTEMS INTERNATIONAL, INC. ANNOUNCES
CLOSING OF PRIVATE PLACEMENT OF PREFERRED STOCK
Lexington, Massachusetts, December 28, 1999 - Waste Systems International, Inc.
("WSI") (NASDAQ: WSII), a fully integrated non-hazardous solid waste management
company, today announced that it has raised $15,000,000 through a private
placement of convertible preferred stock. The preferred stock carries a 10%
dividend which is payable in kind or cash at the option of the Company. The
preferred stock can be converted into shares of the Company's common stock at a
price of $6.00 per share at any time at the option of the holder and can be
mandatorily converted by the Company if its common stock closing price equals or
exceeds $9.00 for a period of twenty consecutive trading days. Finally, the
preferred stock is eligible to vote on an as-converted basis with the Company's
common stock and is redeemable at any time by the Company. The $6.00 conversion
price represents a 66% premium over the Company's common stock closing price of
$3.625 on Monday, December 27, 1999, the last business day prior to the
transaction closing.
Commenting on the announcement, Jim Elitzak, WSI's Vice President and Chief
Financial Officer said, "This private placement should be viewed by our existing
and prospective shareholders as another positive step in the Company's continued
growth and success. Most importantly, the proceeds of the private placement will
be used to support the Company's ongoing growth-related capital development
projects. These ventures include several landfill and transfer station
development projects throughout the Company's existing service markets. In
addition, this private placement, combined with the $16,000,000 offering
completed in the third quarter of this year, significantly improves the
Company's capital structure while once again affirming Wall Street's growing
level of interest in the Company."
WSI is a fully integrated non-hazardous solid waste management company. The
Company currently has operations in Eastern New England, Central Pennsylvania,
Vermont, Upstate New York, and Baltimore, Maryland / Washington D.C. which serve
approximately 73,000 commercial, industrial, and residential customers. The
Company is also evaluating other acquisitions and opportunities in the
Mid-Atlantic and Northeastern markets.
Certain matters discussed in the press release, including statements with regard
to acquisition and growth plans, and prospects, are "forward-looking statements"
intended to qualify for the safe harbors from liability established by the
Private Securities Litigation Reform Act of 1995. Forward-looking statements are
inherently uncertain and subject to risks. Such statements should be viewed with
caution. Among the important factors that could cause actual results to differ
materially from those indicated by such forward-looking statements are the
Company's history of losses, substantial increased leverage, uncertain ability
to finance the company's growth, ability to identify, acquire and integrate
acquisition targets, ability to manage growth, limitations on landfill
permitting and expansion, dependence on management, competition, geographic
concentration of operations, seasonality, environmental and government
regulations, potential environmental liability and adverse effect of
environmental regulation, potential adverse community relations, performance or
surety bonds and letters of credit, environmental impairment liability
insurance, adequacy of accruals for closure and post-closure costs, capital
expenditures, Year 2000 compliance, and the other risk factors detailed from
time to time in the Company's periodic reports and registration statements filed
with the Securities and Exchange Commission. The Company makes no commitment to
disclose any revisions to forward-looking statements, or any facts, events or
circumstances after the date hereof that may bear upon forward-looking
statements.
# # #
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Exhibit 99.2
WASTE SYSTEMS INTERNATIONAL, INC.
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF A SERIES OF PREFERRED STOCK
(SERIES D CONVERTIBLE PREFERRED STOCK)
By Resolution of the Board of Directors
We, Philip Strauss, Chairman, President and Chief Executive
Officer, and Robert Rivkin, Executive Vice President Acquisitions, Treasurer and
Secretary, of Waste Systems International, Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"), in accordance with Section 151 of the Delaware General
Corporation Act, DO HEREBY CERTIFY:
That, pursuant to authority conferred upon the Board of
Directors of the Corporation by the Second Amended and Restated Certificate of
Incorporation of said Corporation, as amended, and pursuant to the provisions of
Section 151 of the Delaware General Business Corporation Act, said Board of
Directors on December 23, 1999 adopted a resolution providing for the
designations, preferences and relative, participating, optional or other rights,
and the qualifications, limitations or restrictions thereof, including, without
limiting the generality of the foregoing, such provisions as may be desired
concerning voting, redemption, dividends, dissolution or the distribution of
assets and conversion, of a series of preferred stock, which resolution is as
follows:
RESOLVED, that pursuant to the authority vested in the Board
of Directors of the Corporation in accordance with the provisions of the Second
Amended and Restated Certificate of Incorporation of the Corporation, as
amended, and pursuant to Section 151 of the Delaware General Corporation Law, a
series of preferred stock of the Corporation known as Series D Convertible
Preferred Stock (the "Series D Preferred Stock") be, and it hereby is, created,
classified and authorized, and the issuance thereof is provided for, and that
the designation and number of shares, and relative rights, preferences and
limitations thereof, shall be as set forth in the form attached hereto as
Exhibit A.
[Remainder of Page Intentionally Left Blank]
<PAGE>
EXHIBIT A
CERTIFICATE OF DESIGNATIONS
1. Designation. The shares of the series of Preferred Stock
shall be designated as "Series D Preferred Stock," and the number of shares
constituting such series shall be 20,500. The par value of the Series D
Preferred Stock shall be $.001 per share.
2. Dividends.
(a) The holders of shares of Series D Preferred Stock shall be
entitled, on a pari passu basis with the holders of outstanding shares of any
other series of Preferred Stock of the Corporation but in preference to the
holders of any and all other classes of capital stock of the Corporation, to
receive, when and if declared by the Board of Directors, out of funds legally
available therefore, cumulative dividends on the Series D Preferred Stock,
payable as described in Section 2(c) below, at a rate (the "Series D Dividend
Rate") per annum of ten percent (10%) of, as of the original issuance date of
the Series D Preferred Stock (the "Series D Preferred Original Issuance Date"),
the Initial Liquidation Preference (as defined below), or $100 per share of
Series D Preferred Stock, subject to proration for partial years on the basis of
a 365-day year, compounded semi-annually on January 1 and July 1 of each year
(the "Series D Preferred Cumulative Dividend"), subject to adjustment as
provided in Section 2(b) below. Such dividends will accumulate commencing as of
the Series D Preferred Original Issuance Date and shall be cumulative, to the
extent unpaid, whether or not they have been declared and whether or not the
Corporation may legally pay the dividends. Such dividends shall become due and
payable with respect to any shares of Series D Preferred Stock as provided in
Sections 3, 5 and 6 below. Dividends paid in an amount less than the total
amount of such dividends at the time accumulated and payable on all outstanding
shares of Series D Preferred Stock shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. So long as
any shares of Series D Preferred Stock are outstanding and the Series D
Convertible Cumulative Dividends have not been paid in full (i) no dividend
whatsoever (other than stock dividends) shall be paid or declared, and no
distribution shall be made, on any other capital stock of the Corporation
ranking with regard to dividend rights, rights upon liquidation or dissolution
or redemption rights junior to the Series D Preferred Stock and (ii) no shares
of capital stock of the Corporation ranking with regard to dividend rights,
rights upon liquidation or dissolution or redemption rights junior to the Series
D Preferred Stock shall be purchased, redeemed or required by the Corporation
and no monies shall be paid into or set aside or made available for a sinking
fund for the purchase, redemption or acquisition thereof.
(b) The Series D Dividend Rate shall be increased by one quarter of one
percent (0.25%) on the first day of each calendar quarter commencing with
January 1, 2001.
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11
(c) Dividends payable on the Series D Preferred Stock shall,
when paid, be paid by issuing a number of fully paid and non-assessable shares
of Series D Preferred Stock (including fractional shares thereof) having an
aggregate Liquidation Preference equal to the amount of such dividends;
provided, however, that such dividends may be paid, in whole or in part, in cash
at the option of the Board of Directors in their sole discretion. All dividends
paid with respect to shares of the Series D Preferred Stock pursuant to this
Section 2 shall be paid pro rata to the holders thereof. Declaration and payment
of such dividends shall be made twice each year, payable on January 1 and July 1
of each year, unless otherwise determined by the Board of Directors.
(d) All numbers relating to the calculation of dividends pursuant to
this Section 2 shall be subject to equitable adjustment in the event of any
stock split, combination, reorganization, recapitalization, reclassification or
other similar event involving a change in the Series D Preferred Stock.
3. Liquidation, Dissolution or Winding Up.
(a) Upon the occurrence of any of the following events (each a
"Liquidation Event"), the holders of each share of Series D Preferred Stock
outstanding shall be entitled to be paid out of the assets of the Corporation
available for distribution to stockholders, whether such assets are capital,
surplus, or earnings, and before any payment shall be made to the holders of any
class of Common Stock or of any stock ranking on liquidation junior to the
Series D Preferred Stock, an amount equal to (i) $1,000 per share of Series D
Preferred Stock held by such holder (appropriately adjusted for any stock split,
stock combination, stock dividend or similar recapitalization with respect to
the Series D Preferred Stock) (the "Initial Liquidation Preference") plus (ii)
any accrued but unpaid dividends to which such holder is then entitled, if any,
pursuant to Section 2 hereof (the sum of clauses (i) and (ii) being referred to
as the "Series D Liquidation Amount"): (i) a liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary; or (ii) any transaction
or series of transactions involving: (A) the sale, transfer, conveyance,
exchange or other disposition, other than in the usual and regular course of
business, of all or substantially all of the consolidated assets or properties
of the Corporation to one or more persons or entities who are not affiliates of
the Corporation, or (B) the sale, transfer, conveyance, exchange or other
disposition (including, without limitation, by merger or consolidation) of all
or substantially all of the Common Stock to one or more persons or entities who
are not affiliates of the Corporation. If upon any liquidation, dissolution, or
winding up of the Corporation, the assets to be distributed to the holders of
the Series D Preferred Stock under the foregoing sentence shall be insufficient
to permit payment to such holders of the full Series D Liquidation Amount, then
all of the assets of the Corporation available for distribution to such holders
under such sentence shall be distributed to such holders pro rata, so that each
holder receives that portion of the assets available for distribution as the
number of shares of Series D Preferred Stock held by such holder bears to the
total number of shares of Series D Preferred Stock then outstanding.
<PAGE>
4. Voting Rights. Except as otherwise expressly provided
herein or as required by law, the holder of each share of Series D Preferred
Stock shall be entitled to vote on all matters. Each share of Series D Preferred
Stock shall entitle the holder thereof to such number of votes per share as
shall equal the number of shares of Common Stock into which each share of Series
D Preferred Stock is then convertible. Except as otherwise provided herein or
required by law, the holders of shares of the Series D Preferred Stock and the
Common Stock shall vote together as a single class on all matters.
5. Conversion. The holders of the Series D Preferred Stock and
the Corporation shall have the following conversion rights:
(a) Subject to and in compliance with the provisions of this
Section 5, any shares of the Series D Preferred Stock may, at the option of the
holder, be converted at any time or from time to time into fully-paid and
non-assessable shares of Common Stock. The number of shares of Common Stock to
which a holder of the Series D Preferred Stock shall be entitled upon conversion
shall be the product obtained by multiplying the Applicable Conversion Rate
(determined as provided in Section 5(b)) by the number of shares of Series D
Preferred Stock being converted. For purposes of this Section 5, the number of
shares of Series D Preferred Stock being converted shall include shares of
Series D Preferred Stock that would be issuable in payment of any accrued and
unpaid dividends at the time of conversion.
(b) (i) In the event that after the Series D Convertible
Original Issuance Date the closing bid price of the Corporation's Common Stock
on the Nasdaq National Market (or, in the event that such security is not traded
on the Nasdaq National Market, such other national or regional securities
exchange or automated quotation system upon which such security is listed and
principally traded or, if no such price is available, the per share market value
of the Common Stock as determined by a nationally recognized investment banking
firm or other nationally recognized financial adviser retained by the
Corporation for such purpose) is equal to or greater than 150% of the Applicable
Conversion Value for a period of any twenty (20) successive trading days, the
Corporation may, at its option, within thirty (30) days following the twentieth
(20th) successive trading day, effect the automatic conversion of shares of
Series D Preferred Stock, in whole or in part, at the Applicable Conversion
Rate. With respect to any automatic conversion of fewer than all the outstanding
shares of Series D Preferred Stock, the number of shares to be converted shall
be determined by the Board of Directors and the shares to be converted shall be
selected pro rata. If the foregoing condition has been satisfied and the
Corporation has elected to effect the automatic conversion of shares of Series D
Preferred Stock, it shall deliver a notice to that effect by overnight delivery
service to each holder of shares of Series D Preferred Stock. The conversion
will be effective five (5) days after the delivery of such notice in accordance
with the provisions of Section 5(b)(ii) below.
<PAGE>
(ii) Upon the occurrence of the events specified in Section (5)(b)(i), the
outstanding shares of Series D Preferred Stock to be converted shall be
converted automatically without any further action by the holders of such shares
and whether or not the certificates representing such shares are surrendered to
the Corporation or its transfer agent, provided, however, that the Corporation
shall not be obligated to issue certificates evidencing the shares of Common
Stock issuable upon such conversion unless certificates evidencing such shares
of the Series D Preferred Stock being converted are either delivered to the
Corporation or any transfer agent, as hereinafter provided, or the holder
notifies the Corporation or any transfer agent as hereinafter provided, that
such certificates have been lost, stolen or destroyed and executes an agreement
satisfactory to the Corporation to indemnify the Corporation from any loss
incurred by it in connection therewith.
Upon the occurrence of the automatic conversion of any outstanding
shares of Series D Preferred Stock, the holders of such Series D Preferred Stock
shall surrender the certificates representing such shares at the office of the
Corporation or of any transfer agent for the Common Stock. Thereupon, there
shall be issued and delivered to each such holder, promptly at such office and
in his name as shown on such surrendered certificate or certificates, a
certificate or certificates for the number of shares of Common Stock into which
the shares of the Series D Preferred Stock converted were convertible on the
date on which such automatic conversion occurred.
(c) The conversion rate in effect at any time (the "Applicable
Conversion Rate") shall equal the quotient obtained by dividing (i) the sum of
$1,000 plus the per share accrued but unpaid dividends on the Series D Preferred
Stock at the time of conversion by (ii) the Applicable Conversion Value,
calculated as hereinafter provided.
(d) The Applicable Conversion Value in effect initially, and
until first adjusted in accordance with Section 5(e), shall be $6.00.
(e) Upon the happening of an Extraordinary Common Stock Event
(as hereinafter defined), the Applicable Conversion Value shall, simultaneously
with the happening of such Extraordinary Common Stock Event, be adjusted by
dividing the then effective Applicable Conversion Value by a fraction, the
numerator of which shall be the number of shares of Common Stock of all classes
outstanding immediately after such Extraordinary Common Stock Event and the
denominator of which shall be the number of shares of Common Stock of all
classes outstanding immediately prior to such Extraordinary Common Stock Event,
and the quotient so obtained shall thereafter be the Applicable Conversion
Value. The Applicable Conversion Value, as so adjusted, shall be readjusted in
the same manner upon the happening of any successive Extraordinary Common Stock
Event or Events. "Extraordinary Common Stock Event" shall mean (i) the issue of
additional shares of Common Stock of any class as a dividend or other
distribution on outstanding Common Stock, (ii) the subdivision of outstanding
shares of Common Stock of any class into a greater number of shares of Common
Stock, or (iii) the combination of outstanding shares of Common Stock of any
class into a smaller number of shares of Common Stock.
<PAGE>
(f) In the event the Corporation shall make or issue, or fix a
record date for the determination of holders of Common Stock entitled to
receive, a dividend or other distribution payable in securities of the
Corporation other than shares of Common Stock (other than in connection with a
rights offering with respect to Preferred Stock which has substantially the same
terms, rights, privileges and preferences as the Series D Preferred Stock, which
rights offering is consummated on or before September 30, 2000), then and in
each such event lawful and adequate provision shall be made so that the holders
of Series D Preferred Stock shall receive upon conversion thereof in addition to
the number of shares of Common Stock receivable thereupon, the number of
securities of the Corporation which they would have received had their Series D
Preferred Stock been converted into Common Stock on the date of such event and
had they thereafter, during the period from the date of such event to and
including the date of conversion of their Series D Preferred Stock, retained
such securities receivable by them as aforesaid during such period, giving
application to all adjustments called for during such period under this Section
5 with respect to the rights of the holders of the Series D Preferred Stock.
(g) If the Common Stock issuable upon the conversion of the
Series D Preferred Stock shall be changed into the same or a different number of
shares of any class or classes of stock, whether by reclassification or
otherwise, then and in each such event the holder of each share of Series D
Preferred Stock shall have the right thereafter to convert such share into the
kind and amount of shares of stock and other securities and property receivable
upon such reorganization, reclassification or other change, by holders of the
number of shares of Common Stock into which such shares of Series D Preferred
Stock might have been converted immediately prior to such reorganization,
reclassification or other change, all subject to further adjustment as provided
herein.
(h) Unless such transaction is a Liquidation Event (in which
case Section 3(a) shall apply and this Section 5(h) shall not apply), if at any
time or from time to time there shall be a capital reorganization of the Common
Stock or a merger or consolidation of the Corporation with or into another
corporation or the sale of all or substantially all of the Corporation's
properties and assets to any other person, then, as a part of and as a condition
to the effectiveness of such reorganization, merger, consolidation or sale,
lawful and adequate provision shall be made so that the holders of the Series D
Preferred Stock shall thereafter be entitled to receive upon conversion of the
Series D Preferred Stock the number of shares of stock or other securities or
property of the Corporation or of the successor corporation resulting from such
merger or consolidation or sale, to which a holder of such number of shares of
Common Stock deliverable upon conversion would have been entitled to receive had
the conversion of such holder's shares of Series D Preferred Stock been effected
immediately prior to such capital reorganization, merger, consolidation, or
sale. In any such case, appropriate provisions shall be made with respect to the
rights of the holders of the Series D Preferred Stock after the reorganization,
merger, consolidation or sale to the end that the provisions of this Section 5
(including without limitation provisions for adjustment of the Applicable
Conversion Value and the number of shares purchasable upon conversion of the
Series D Preferred Stock) shall thereafter be applicable, as nearly as may be,
with respect to any shares of stock, securities or assets to be deliverable
thereafter upon the conversion of the Series D Preferred Stock.
<PAGE>
Each holder of Series D Preferred Stock upon the occurrence of
a capital reorganization, merger or consolidation of the Corporation or the sale
of all or substantially all of its assets and properties as such events are more
fully set forth in the first paragraph of this Section 5(h) and with respect to
which Section 5(h) applies, shall have the option of (i) requiring redemption by
the Corporation on the effective date of such event of all (but not less than
all) of the shares of Series D Preferred Stock held by such holder for an amount
per share equal to the Series D Liquidation Amount (the "Transaction Redemption
Price") or (ii) electing treatment of its shares of Series D Preferred Stock
under the first paragraph of this Section 5(h), notice of which election shall
be submitted in writing to the Corporation at its principal offices no later
than ten (10) days before the effective date of such event provided that any
such notice shall be effective if given not later than ten (10) days after the
date of the Corporation's notice to shareholders with respect to such event.
(i) In each case of an adjustment or readjustment of the
Applicable Conversion Rate, the Corporation will furnish each holder of Series D
Preferred Stock with a certificate, prepared by the Chief Financial Officer of
the Corporation, showing such adjustment or readjustment, and stating in detail
the facts upon which such adjustment or readjustment is based.
(j) To exercise its conversion privilege as provided in
Section 5(a) above, a holder of Series D Preferred Stock shall surrender the
certificate or certificates representing the shares being converted to the
Corporation at its principal office or to the transfer agent for the Common
Stock and shall give written notice to the Corporation at that office that such
holder elects to convert such shares. Such notice shall also state the name or
names (with address or addresses) in which the certificate or certificates for
shares of Common Stock issuable such conversion shall be issued. The certificate
or certificates for shares of Series D Preferred Stock surrendered for
conversion shall be accompanied by proper assignment thereof to the Corporation
or in blank. The date on which such written notice is received by the
Corporation together with the certificate or certificates representing the
shares of Series D Preferred Stock being converted, shall be the "Conversion
Date." As promptly as practicable after the Conversion Date, the Corporation
shall issue and shall deliver to each holder of the shares of Series D Preferred
Stock being converted, or on its written order, a certificate or certificates
for the number of full shares of Common Stock issuable upon the conversion of
such shares of Series D Preferred Stock in accordance with the provisions of
this Section 5 and cash as provided in Section 5(k), in respect of any fraction
of a share of Common Stock issuable upon such conversion. Such conversion shall
be deemed to have been effected immediately prior to the close of business on
the Conversion Date, and at such time the rights of the holder as holder of the
converted shares of Series D Preferred Stock shall cease and the person or
persons in whose name or names any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to have
become the holder or holders of record of shares of Common Stock represented
thereby.
(k) No fractional shares of Common Stock or scrip representing
fractional shares shall be issued upon conversion of Series D Preferred Stock.
Instead of any fractional shares of Common Stock which would otherwise be
issuable upon conversion of Series D Preferred Stock, the Corporation shall pay
to the holder of the shares of Series D Preferred Stock which were converted a
cash adjustment in respect of such fraction in an amount equal to the same
fraction of the market price per share of the Common Stock (as determined in a
manner prescribed by the Board of Directors) at the close of business on the
Conversion Date.
<PAGE>
(l) In the event some but not all of the shares of Series D
Preferred Stock represented by a certificate or certificates surrendered by a
holder are converted, the Corporation shall execute and deliver to or on the
order of the holder, at the expense of the Corporation, a new certificate
representing the number of shares of Series D Preferred Shares which were not
converted.
(m) The Corporation shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock, solely for
the purpose of effecting the conversion of the shares of the Series D Preferred
Stock, such number of its shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of the Series D
Preferred Stock (without regard to Section 5(a)(ii)), and if at any time the
number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the conversion of all then outstanding shares of the Series D
Preferred Stock, the Corporation shall take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purpose.
6. Redemption.
(a) Call Redemption. The Corporation may redeem, at the option
of the Corporation in its sole discretion, to the extent it has funds legally
available therefor, in whole but not in part, all of the shares of Series D
Preferred Stock then outstanding (the "Call Redemption") at a price per share
equal to:
(i) through and including the first anniversary of
the Series D Preferred Original Issuance Date, 105% multiplied by the Series D
Liquidation Amount, and
(ii) after the first anniversary of the Series D
Preferred Original Issuance Date, the Series D Liquidation Amount, (as the case
may be, the "Call Redemption Price"). The term "Redemption Price" as used
herein refers to each of the Call Redemption Price, the Transaction
Redemption Price and the Series D Liquidation Amount payable upon a redemption
in connection with a Liquidation Event.
<PAGE>
(b) Notice of Call Redemption. Notice of the Call Redemption
of shares of Series D Preferred Stock, specifying the time and place of
redemption and the Redemption Price (the "Redemption Notice"), shall be sent by
overnight delivery service to each holder of Series D Preferred Stock to be
redeemed, at the address for such holder shown on the Corporation's record not
more than sixty (60) nor less than thirty (30) days prior to the Redemption Date
(as hereinafter defined). Each such Redemption Notice shall state: (i) the
Redemption Date; (ii) the Redemption Price (as hereinafter defined); (iii) the
manner and place or places at which payment for the shares of Series D Preferred
Stock offered for redemption will be made, presentation and surrender to the
Corporation of the certificates evidencing the shares being redeemed; (iv) that
dividends on the shares of Series D Preferred Stock being redeemed shall cease
to accrue on the Redemption Date unless the Corporation defaults in the payment
of the Redemption Price; and (v) that the rights of holders of Series D
Preferred Stock as stockholder of the Corporation with respect to shares being
redeemed shall terminate as of the Redemption Date unless the Corporation
defaults in the payment of the Redemption Price. Upon mailing any such
Redemption Notice, the Corporation shall become obligated to redeem at the
Redemption Price on the applicable Redemption Date all shares of Series D
Preferred Stock therein specified.
(c) Redemption Date. The Corporation shall fix the date for
the Call Redemption no earlier than thirty (30) but not more than sixty (60)
days after the Redemption Notice is sent as set forth in Section 6(b) hereof.
Any date upon which a redemption is to occur in accordance with this Section 6
or Section 5(h) hereof or in connection with a Liquidation Event is referred to
as a "Redemption Date."
(d) Payment and Surrender. On the Redemption Date, the full
Redemption Price shall become payable in cash for the shares of Series D
Preferred Stock being redeemed on such Redemption Date. As a condition of
payment of the Redemption Price, each holder of Series D Preferred Stock must
surrender the certificate or certificates representing the shares of Series D
Preferred Stock being redeemed to the Corporation in the manner and at the place
designated in the Redemption Notice or in the event such certificate or
certificates have been lost, stolen or destroyed, must execute an agreement
satisfactory to the Corporation to indemnify the Corporation from any loss
incurred by it in connection therewith. Each surrendered certificate shall be
canceled and retired. In the event some but not all of the shares of Series D
Preferred Stock represented by a surrendered certificate are redeemed, the
Corporation will execute and deliver to the holder a new certificate
representing the number of shares of Series D Preferred Stock which were not
redeemed. All redemption payments will be made to the holders of the shares
being redeemed.
(e) Termination. On any Redemption Date, dividends on the
Series D Preferred Stock redeemed shall cease to accumulate, and all rights of
holders of such redeemed shares shall terminate, except for the right to receive
the Redemption Price; provided, however, that in the event that shares of Series
D Preferred Stock are unable to be redeemed and continue to be outstanding in
accordance with Section 6(f), such shares shall continue to be entitled to
dividends thereon as provided in Sections 2 and 6(f) (and shall continue to be
entitled to such other rights, including the conversion rights set forth in
Section 5 hereof, as set forth herein) until the date on which such shares are
actually redeemed by the Corporation.
<PAGE>
(f) Restrictions on Redemption. Notwithstanding anything
herein to the contrary, the Series D Preferred Stock will not be redeemed
(including, without limitation, in accordance with Section 5(h) or in connection
with a Liquidation Event) unless prior to or concurrently with such redemption
both (i) either (A) all obligations under the Loan and Security Agreement dated
as of July 21, 1999 (as amended from time to time) among the Corporation,
certain of its subsidiaries and The Howard Bank, N.A., as lender, and the other
lenders from time to time party thereto (collectively, the "Lender") shall have
been paid and satisfied in full, or (B) the Lender shall have consented to such
redemption and (ii) either (A) all of the Corporation's 11 1/2% Senior Notes due
2006 issued under the Indenture dated as of March 2, 1999 (as supplemented from
time to time) among the Corporation and Bank of New York, as successor trustee
to IBJ Whitehall Bank & Trust Company, shall have been redeemed in full, (B) the
Corporation has complied with the Indenture Sections 1012 and 1013 of the
Indenture or (C) the Corporation obtains the requisite consent of the holders of
such Senior Notes to such redemption. If the Corporation fails for any reason to
redeem shares for which redemption is required pursuant to Section 5(h), this
Section 6 or in connection with a Liquidation Event, including without
limitation due to a prohibition of such redemption under this Section 6(f), then
during the period from the applicable Redemption Date through the date on which
such shares are redeemed, the applicable Series D Dividend Rate shall, at the
end of each calendar quarter, increase by 1% per annum until the Redemption
Price (as so increased) is paid in full, subject to a maximum rate of 18% per
annum.
7. Restrictions and Limitations.
(a) Corporate Action. Except as expressly provided herein or
as required by law, so long as any shares of Series D Preferred Stock remain
outstanding, the Corporation shall not without the approval by vote or written
consent (which written consent need not be unanimous) by the holders of at least
fifty-one percent (51%) of the then outstanding shares of Series D Preferred
Stock, voting as a separate class:
(i) authorize or issue, or obligate itself to authorize or issue, any
equity security senior to or on parity with the Series D Preferred Stock as to
liquidation preferences, dividend rights, redemption rights or voting rights
(except for common stock as to voting rights);
(ii) merge or consolidate with any other corporation, or sell, assign,
lease or otherwise dispose of or voluntarily part with the control of (whether
in one transaction or in a series of transactions) all, or substantially all, of
its assets (whether now owned or hereinafter acquired), or consent to any
liquidation, dissolution, winding up, reorganization or recapitalization of the
Corporation, or permit any subsidiary to do any of the foregoing, except for (A)
any wholly-owned subsidiary may merge into or consolidate with or transfer
assets to any other wholly-owned subsidiary, and (B) any wholly-owned subsidiary
may merge into or transfer assets to the Corporation; or
(iii) amend, restate, modify or alter the certificate of incorporation or
the by-laws of the Corporation in any way which adversely affects the rights of
the holders of the Series D Preferred Stock.
<PAGE>
(b) Amendments to Charter. The Corporation shall not amend its
Certificate of Incorporation without the approval, by vote or written consent
(which written consent need not be unanimous), by the holders of at least sixty
percent (60%) of the then outstanding shares of Series D Preferred Stock, if
such amendment would adversely affect any of the rights, preferences, privileges
of or limitations provided for herein for the benefit of any shares of Series D
Preferred Stock. Without limiting the generality of the preceding sentence, the
Corporation will not amend its Certificate of Incorporation without the approval
by the holders of at least sixty percent (60%) of the then outstanding shares of
Series D Preferred Stock if such amendment would:
(i) change the relative seniority rights of the
holders of Series D Preferred Stock as to the payment of dividends in relation
to the holders of any other capital stock of the Corporation, or create any
other class or series of capital stock entitled to seniority as to the payment
of dividends in relation to the holders of Series D Preferred Stock;
(ii) reduce the amount payable to the holders of
Series D Preferred Stock upon the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, or change the relative seniority
of the liquidation preferences of the holders of Series D Preferred Stock to the
rights upon liquidation of the holders of other capital stock of the Corporation
or change the dividend rights of the holders of Series D Preferred Stock;
(iii) cancel or modify the rights of the holders of the
Series D Preferred Stock provided for in this Section 7.
8. No Reissuance of Series D Preferred Stock. No share or shares
of the Series D Preferred Stock acquired by the Corporation by reason of
redemption, purchase or otherwise shall be reissued, and all such shares shall
be canceled, retired, and eliminated from the shares which the Corporation shall
be authorized to issue. The Corporation may from time to time take such
appropriate corporate action as may be necessary to reduce the authorized number
of shares of the Series D Preferred Stock accordingly.
9. Notices of Record Date. In the event (i) the Corporation
establishes a record date to determine the holders of any class of securities
who are entitled to receive any dividend or other distribution, or (ii) there
occurs any capital reorganization of the Corporation, any reclassification or
recapitalization of the capital stock of the Corporation, any Liquidation Event,
any merger or consolidation of the Corporation, and any transfer of all or
substantially all of the assets of the Corporation to any other corporation, or
any other entity or person, or any voluntary or involuntary dissolution,
liquidation or winding up of the Corporation, the Corporation shall mail to each
holder of Series D Preferred Stock at least twenty (20) days prior to such
record date or such transaction, as the case may be, a notice specifying (a) the
date of any such record date for the purpose of such dividend or distribution
and a description of such dividend or distribution, (b) the date on which any
such reorganization, reclassification, recapitalization, Liquidation Event,
transfer, consolidation, merger, dissolution, liquidation or winding up is
expected to become effective, and (c) the time, if any, that is to be fixed, as
to when the holders of record of Common Stock (or other securities) shall be
entitled to exchange their shares of Common Stock (or other securities) for
securities or other property deliverable upon such reorganization,
reclassification, recapitalization, Liquidation Event, transfer, consolidation,
merger, dissolution, liquidation or winding up.
<PAGE>
10. Other Rights. Except as otherwise provided in this
resolution or as otherwise may be required by law, each share of Series D
Preferred Stock and each share of Common Stock shall be identical in all
respects, shall have the same powers, preferences and rights, without preference
of any such class or share over any other such class or share, and shall be
treated as a single class of stock for all purposes.
[Signature page to follow.]
<PAGE>
IN WITNESS WHEREOF, Waste Systems International, Inc., has
caused this certificate to be executed under seal by Philip Strauss, its
Chairman, President and Chief Executive Officer, and Robert Rivkin, its
Executive Vice President - Acquisitions, Treasurer and Secretary, as of the 27th
day of December, 1999.
WASTE SYSTEMS INTERNATIONAL, INC.
By: /s/ Philip Strauss
Name: Philip Strauss
Title: Chairman, President and Chief
Executive Officer
By: /s/ Robert Rivkin
Name: Robert Rivkin
Title: Executive Vice President - Acquisitions,
Treasurer and Secretary
