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EXHIBIT 4.2
CERTIFICATE OF THE DESIGNATION, PREFERENCES,
RIGHTS AND LIMITATIONS OF
SERIES C PREFERRED STOCK
OF
ENVIRONMENTAL SAFEGUARDS, INC.
Environmental Safeguards, Inc. (hereinafter referred to as the
"Corporation" or "Company"), a corporation organized and existing under the
laws of the State of Nevada,
DOES HEREBY CERTIFY:
That, the Articles of Incorporation of the Corporation authorizes the
issuance of 10,000,000 shares of Preferred Stock, $.001 par value per share,
and expressly vests in the Board of Directors of the Corporation the authority
to issue any or all of said shares in one or more series and by resolution or
resolutions to establish the designation, number, full or limited voting
powers, or the denial of voting powers, preferences and relative, participating,
optional, and other special rights and the qualifications, limitations,
restrictions and other distinguishing characteristics of each series to be
issued:
RESOLVED, that pursuant to the authority conferred upon the Board of
Directors by the Articles of Incorporation, the Series C Preferred Stock, par
value $.001("Series C Preferred Stock"), is hereby authorized and created, said
series to consist of up to 400,000 shares, with a stated value of $10.00 per
share. The voting powers, preferences and relative, participating, optional and
other special rights, and the qualifications, limitations or restrictions
thereof shall be as follows:
1. DIVIDENDS ON SERIES C PREFERRED STOCK
(a) The holders of Series C Preferred Stock shall be
entitled to receive out of funds legally available therefor, dividends
in an annual amount equal to the prime rate plus one and one-half
percent (1 1/2%) as reported by NationsBank of Maryland, N.A. on the
outstanding stated value of the Series C Preferred Stock (which
initially is $4,000,000.00). The dividends shall be calculated as of
the last day of each quarter, and shall be payable quarterly in
arrears (the "Dividend Payment") with the first quarterly payment due
for the quarter ending March 31, 1998. The Dividend Payment is due
five (5) days after the close of each quarter. The initial dividend
shall accrue from the date of issuance of the Series C Preferred Stock
and shall be payable with the quarterly payment for the quarter ending
March 31, 1998.
2. NO CONVERSION OF SERIES C PREFERRED STOCK INTO COMMON STOCK
The Series C Preferred Stock is not convertible into the
Corporation's Common Stock.
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3. NO VOTING OF SERIES C PREFERRED STOCK
Except as required by law, each holder of Series C Preferred
Stock shall not be entitled to vote on any matters.
4. LIQUIDATION RIGHTS
(a) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the holders
of shares of Series C Preferred Stock then outstanding shall be
entitled to receive out of assets of the Corporation available for
distribution to stockholders, before any distribution of assets is
made to holders of any other class of capital stock of the Corporation,
except Series B Convertible Preferred Stock, an amount equal to $10.00
per share, plus accumulated and unpaid dividends thereon to the date
fixed for distribution ("Liquidation Amount").
(b) A consolidation or merger of the Corporation (in the
event that the Corporation is not the surviving entity) or sale of all
or substantially all of the corporation's assets shall be regarded as
a liquidation, dissolution or winding up of the affairs of the
Corporation within the meaning of this Section 4. In the event of such
a liquidation as contemplated by this Section 4(b), the holders of
Series C Preferred Stock shall be entitled to receive an amount equal
to the Liquidation Amount.
(c) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation which
involves the distribution of assets other than cash, the Corporation
shall promptly engage competent independent appraisers to determine
the value of the assets to be distributed to the holders of shares of
this Series C Preferred Stock other preferred stock, and the holders
of shares of Common Stock. The Corporation shall, upon receipt of such
appraiser's valuation, give prompt written notice to each holder of
shares of Series C Preferred Stock of the appraiser's valuation.
5. REDEMPTION AT THE DISCRETION OF THE CORPORATION
(a) The Corporation, at its sole discretion, may redeem
any and/or all of the shares of Series C Preferred Stock as may be
outstanding from time to time (the "Redemption Date"), upon thirty
days written notice to holders (the "Redemption Notice").
(b) The Redemption Price (the "Redemption Price") for
each share of Series C Preferred Stock shall be $10.00, plus
accumulated and unpaid dividends thereon to the date fixed for
redemption.
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(c) The notice required by clause 5(a) above shall be
delivered by the Corporation to each holder of record of Series C
Preferred Stock, at such holder's address as shown on the records of
the Corporation; provided, however, that the Corporation's failure to
give such Redemption Notice shall in no way affect the Corporation's
right to redeem the Series C Preferred Stock.
(d) The Redemption Notice shall contain the following
information:
(i) the Redemption Date and the Redemption Price;
and
(ii) the number of shares of Series C Preferred
Stock being redeemed.
(e) Surrender of Certificates. Each holder of shares of
Series C Preferred Stock to be redeemed 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 5 shall
be paid to the order of the person whose name appears in such
certificate(s) and each surrendered certificate shall be canceled and
retired. In the event some but not all of the shares of Series C
Preferred Stock represented by a certificate(s) surrendered by a
holder are being redeemed, 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 C
Preferred Stock which were not redeemed.
(f) All shares of Series C Preferred Stock so redeemed
shall have the status of authorized but unissued Series C Preferred
Stock, but such shares so redeemed shall not be reissued as shares of
the series of Series C Preferred Stock created hereby.
IN WITNESS WHEREOF, ENVIRONMENTAL SAFEGUARDS, INC. has caused its
corporate seal to be hereunto affixed and this certificate to be signed by
JAMES S. PERCELL, its president, and RONALD BIANCO, its assistant secretary,
this ___ day of ________________, 1997.
ENVIRONMENTAL SAFEGUARDS, INC.
By
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JAMES S. PERCELL, president
By
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RONALD BIANCO, Assistant Secretary
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THE STATE OF TEXAS )
)
COUNTY OF HARRIS )
BEFORE ME, the undersigned authority, on this day personally appeared
James S. Percell, known to me to be the person whose name is subscribed to the
foregoing instrument and acknowledged to me that he executed the same for the
purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL of office this _____ day of December,
1997.
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NOTARY PUBLIC IN AND FOR
THE STATE OF TEXAS
THE STATE OF TEXAS )
)
COUNTY OF HARRIS )
BEFORE ME, the undersigned authority, on this day personally appeared
Ronald Bianco, known to me to be the person whose name is subscribed to the
foregoing instrument and acknowledged to me that he executed the same for the
purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL of office this _____ day of December, 1997.
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NOTARY PUBLIC IN AND FOR
THE STATE OF TEXAS
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