EXHIBIT 2
ARTICLES OF AMENDMENT
CERTIFICATE OF DESIGNATION
of
13% SERIES C PREFERRED STOCK
of
HI-RISE RECYCLING SYSTEMS, INC.
(Pursuant to Section 607.0602 of the
Florida Business Corporation Act)
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Hi-Rise Recycling Systems, Inc., a corporation organized and existing
under the Business Corporation Act of the State of Florida (hereinafter called
the "Corporation"), hereby certifies that the following resolution was adopted
by the Board of Directors of the Corporation as required by Section 607.0602 of
the Business Corporation Act by unanimous written consent dated as of June 28,
2000:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Articles of
Incorporation of the Corporation, the Board of Directors hereby creates a series
of Preferred Stock, par value $.01 per share (the "Preferred Stock"), of the
Corporation and hereby states the designation and number of shares, and fixes
the relative rights, preferences, and limitations thereof as follows:
13% Series C Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall be
designated as "13% Series C Preferred Stock" (the "Series C Preferred Stock")
and the number of shares constituting the Series C Preferred Stock shall be 50.
Such number of shares may be increased or decreased by resolution of the Board
of Directors; provided, that no decrease shall reduce the number of shares of
Series C Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation convertible into Series C
Preferred Stock.
Section 2. Rank. The Series C Preferred Stock shall rank: (i) prior to
all of the Corporation's Common Stock, par value $.01 per share (the "Common
Stock"); (ii) prior to any class or series of capital stock of the Corporation
hereafter created specifically ranking by its terms junior to any Series C
Preferred Stock of whatever subdivision (collectively, with the
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Common Stock, "Junior Securities"), and (iii) junior to the Corporation's Series
B Convertible Preferred Stock, $.01 par value (the "Series B Preferred Stock"),
in each case as to distributions of assets upon liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary. So long as any
shares of Series C Preferred Stock shall be outstanding, the Corporation shall
not authorize or issue shares of any other class or series of stock ranking
prior to the Series C Preferred Stock or any shares of any other class or series
of stock ranking on parity with the Series C Preferred Stock ("Parity
Securities"), in each case in the distribution of assets of the Corporation on
any liquidation, dissolution or winding-up of the Corporation without first
obtaining the consent or approval of the holders of all the outstanding shares
of Series C Preferred Stock.
Section 3. Dividends and Distributions. The holders of the Series C
Preferred Stock shall be entitled to receive, out of funds of the Corporation
legally available for payment cumulative cash dividends, payable quarterly in
arrears, at the rate per share of 13% per annum of the Liquidation Preference
(as hereinafter defined), payable in cash. Dividends on the Series C Preferred
Stock shall accrue from the date of issuance or thereafter, from the most recent
date on which dividends were payable, and shall be payable quarterly on March
31, June 30, September 30 and December 31 of each year (each a "Dividend Payment
Date"), commencing on June 30, 2000; provided, however, that if any such day is
a non-business day, the Dividend Payment Date will be the next business day.
Each declared dividend shall be payable to holders of record as they appear at
the close of business on the stock books of the Corporation on March 15, June
15, September 15 and December 15 of each year (each of such dates a "Record
Date"). Quarterly dividend periods (each a "Dividend Period") shall commence on
and include the 1st day of January, April, July and October of each year and
shall end on and include the day next preceding the next following Dividend
Payment Date.
(a) No dividends shall be declared or paid or set apart for
payment on any Common Stock, Parity Securities or Junior Securities during any
quarterly period unless full dividends on the Series C Preferred Stock for all
Dividend Periods ending prior to or during such quarterly period have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof is set apart for such payment. When dividends are not so paid in
full (or a sum sufficient for such full payment is not so set apart) upon the
Series C Preferred Stock and any other Parity Securities, dividends upon the
Series C Preferred Stock and dividends on such other Parity Securities payable
during such quarterly period shall be declared pro rata so that the amount of
such dividends so payable per share on the Series C Preferred Stock and such
other Parity Securities shall in all cases bear to each other the same ratio
that full dividends on the shares of Series C Preferred Stock and full
dividends, if any, on shares of such other Parity Securities, bear to each
other. If full dividends on the Series C Preferred Stock have not been declared
and paid or set apart for payment, no dividend or distribution, other than in
shares of Junior Securities, may be declared, set aside or paid on any shares of
Junior Securities. Holders of the Series C Preferred Stock shall not be entitled
to any dividends, whether payable in cash, property or stock, in excess of the
dividends provided for herein. No interest or sum of money in lieu of interest
shall be payable in respect of any declared dividend payment or payments on the
Series C Preferred Stock which may be in arrears. As used herein, the phrase
"set apart" in respect of the payment of dividends shall require deposit of any
funds in a bank or trust company
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in a separate deposit account maintained for the benefit of the holders of the
Series C Preferred Stock.
Section 4. Voting Rights. The holders of Series C Preferred Stock will
have no voting rights except as required by law, except that the affirmative
vote of the holders of a majority of the outstanding shares of Series C
Preferred Stock is necessary for the issuance of Senior Securities or Parity
Securities, the authorization or issuance of securities convertible into such
Senior Securities or Parity Securities, or the amendment to the Corporation's
Articles of Incorporation so as to adversely affect the Series C Preferred
Stock, or waiver of any other covenants.
Section 5. Conversion. The shares of Series C Preferred Stock shall not
be convertible.
Section 6. Redemption.
(a) Optional Redemption. The Series C Preferred Stock may be
redeemed, in whole or in part, at the option of the Corporation at any time at
the Redemption Price (as defined in subsection (b) below), together with accrued
and unpaid dividends, if any, to the date of redemption.
(b) Mandatory Redemption. Any and all outstanding shares of
Series C Preferred Stock shall be redeemed by the Corporation no later than
October 31, 2001. The date of any redemption under subsections (a) and (b) shall
be a "Redemption Date". The price at which the Series C Preferred Stock shall be
redeemed pursuant to subsections (a) and (b) shall be $10,000 per share (the
"Redemption Price"), plus accrued and unpaid dividends.
(c) Insufficient Funds for Redemption.
(i) If the funds of the Corporation legally available for
redemption of the Series C Preferred Stock on any Redemption Date are
insufficient to redeem all the shares of Series C Preferred Stock to be so
redeemed on such Redemption Date, the holders of shares of Series C Preferred
Stock shall share ratably in any funds legally available for redemption of such
shares according to the respective amounts which would be payable with respect
to the number of shares owned by them if the shares to be so redeemed on such
Redemption Date were redeemed in full. The shares of Series C Preferred Stock
not redeemed shall remain outstanding and entitled to all rights and preferences
provided herein.
(ii) At any time thereafter when additional funds of the
Corporation are legally available for the redemption of such shares of Series C
Preferred Stock, such funds will be used, as soon as practicable but no later
than the end of the next succeeding fiscal quarter, to redeem the balance of
such shares, or such portion thereof for which funds are then legally available,
on the basis set forth above.
(d) Redemption Notice. At least 15 days prior to any Redemption
Date, written notice (hereinafter referred to as the "Redemption Notice") shall
be mailed, first class or
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certified mail, postage prepaid, by the Corporation to each holder of record of
shares of Series C Preferred Stock which are to be redeemed, at its address
shown on the records of the Corporation; provided, however, that the
Corporation's failure to give such Redemption Notice as to any holder shall not
affect its obligation to redeem the shares of Series C Preferred Stock as
provided in this Section 6 hereof as to such holder. The Redemption Notice shall
contain the following information:
(i) the Redemption Date and the Redemption Price, as
applicable; and
(ii) that the holder is to surrender to the Corporation, at
the place designated therein, its certificate or certificates representing the
shares of Series C Preferred Stock to be redeemed.
(e) Surrender of Certificates. Each holder of Series C Preferred
Stock shall surrender the certificate(s) representing such shares to the
Corporation at the place designated in the Redemption Notice, and thereupon the
Redemption Price for such shares as set forth in this Section 6 shall be paid to
the order of the person whose name appears on such certificate(s) and each
surrendered certificate shall be canceled and retired.
The rights of redemption of the holders of Series C Preferred Stock are
subject to the rights and preferences of any class or series of preferred stock
that may be designated to be senior to, or on parity with, the Series C
Preferred Stock.
Section 7. Liquidation, Dissolution or Winding Up.
(a) In the event of any liquidation, dissolution or winding up of
the Corporation, either voluntary or involuntary, the holders of shares of
Series C Preferred Stock shall be entitled to receive, prior and in preference
to any distribution to holders of Junior Securities but in parity which any
distribution to holders of Parity Securities, an amount per share equal to
$10,000 (the "Liquidation Preference"), plus any and all accrued and unpaid
dividends. The payment of the Liquidation Preference shall be made after the
satisfaction of all distributions to holders of other series of preferred stock,
if any, which are expressly senior in liquidation preference to the Series C
Preferred Stock, including without limitation the Series B Preferred Stock
(collectively, the "Senior Payments"). If after the satisfaction of all Senior
Payments, the assets and funds to be distributed among the holders of shares of
Series C Preferred Stock and Parity Securities shall be insufficient to permit
the payment to such holders of the full preferential amounts due to the holders
of shares of Series C Preferred Stock and Parity Securities, respectively, then
the entire assets and funds of the Corporation legally available for
distribution shall be distributed among the holders of shares of Series C
Preferred Stock and Parity Securities, pro rata, based on the respective
liquidation amounts to which each such series of stock is entitled by the
Corporation's Articles of Incorporation and any certificate of designation of
preferences.
(b) Upon the completion of the distribution required by
subsection 7(a) above, if assets remain in the Corporation, they shall be
distributed to holders of Parity Securities (unless holders of Parity Securities
have received distributions pursuant to subsection 7(a)) and
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Junior Securities in accordance with the Corporation's Articles of
Incorporation, including any duly adopted certificate(s) of designation of
preferences.
(c) A consolidation or merger of the Corporation with or into any
other corporation or corporations, or a sale, conveyance or disposition of all
or substantially all of the assets of the Corporation or the effectuation by the
Corporation of a transaction or series of related transactions in which more
than 50% of the voting power of the Corporation is disposed of, shall not be
deemed to be a liquidation, dissolution or winding up within the meaning of this
Section 7.
Section 8. Consolidation, Merger, etc. In the event of a merger,
reorganization, recapitalization or similar event of or with respect to the
Corporation (a "Corporate Change") (other than a Corporate Change in which all
or substantially all of the consideration received by the holders of the
Corporation's equity securities upon such Corporate Change consists of cash or
assets other than securities issued by the acquiring entity or any affiliate
thereof), the Series C Preferred Stock shall be assumed by the acquiring entity.
Section 9. Amendment. The Articles of Incorporation of the Corporation
shall not be amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series C Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of at least a
majority of the outstanding shares of Series C Preferred Stock, voting together
as a single class.
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IN WITNESS WHEREOF, this Articles of Amendment has been executed on
behalf of the Corporation by its President this ____ day of June, 2000.
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President
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