Registration of Securities (General Form) — Form 10 Filing Table of Contents
Document/ExhibitDescriptionPagesSize
1: 10-12G Registration of Securities (General Form) HTML 1.79M
2: EX-2.1 Plan of Acquisition, Reorganization, Arrangement, HTML 85K
Liquidation or Succession
19: EX-2.10 Plan of Acquisition, Reorganization, Arrangement, HTML 109K
Liquidation or Succession
3: EX-2.2 Plan of Acquisition, Reorganization, Arrangement, HTML 49K
Liquidation or Succession
4: EX-2.3 Plan of Acquisition, Reorganization, Arrangement, HTML 50K
Liquidation or Succession
5: EX-2.4 Plan of Acquisition, Reorganization, Arrangement, HTML 50K
Liquidation or Succession
6: EX-2.5 Plan of Acquisition, Reorganization, Arrangement, HTML 44K
Liquidation or Succession
7: EX-2.6 Plan of Acquisition, Reorganization, Arrangement, HTML 211K
Liquidation or Succession
8: EX-2.7 Plan of Acquisition, Reorganization, Arrangement, HTML 215K
Liquidation or Succession
9: EX-2.8 Plan of Acquisition, Reorganization, Arrangement, HTML 282K
Liquidation or Succession
10: EX-2.8.1 Plan of Acquisition, Reorganization, Arrangement, HTML 37K
Liquidation or Succession
11: EX-2.8.2 Plan of Acquisition, Reorganization, Arrangement, HTML 39K
Liquidation or Succession
12: EX-2.8.3 Plan of Acquisition, Reorganization, Arrangement, HTML 29K
Liquidation or Succession
13: EX-2.8.4 Plan of Acquisition, Reorganization, Arrangement, HTML 45K
Liquidation or Succession
14: EX-2.8.5 Plan of Acquisition, Reorganization, Arrangement, HTML 54K
Liquidation or Succession
15: EX-2.8.5A Plan of Acquisition, Reorganization, Arrangement, HTML 21K
Liquidation or Succession
16: EX-2.8.6 Plan of Acquisition, Reorganization, Arrangement, HTML 24K
Liquidation or Succession
17: EX-2.8.7 Plan of Acquisition, Reorganization, Arrangement, HTML 180K
Liquidation or Succession
18: EX-2.9 Plan of Acquisition, Reorganization, Arrangement, HTML 112K
Liquidation or Succession
20: EX-3.1.1 Articles of Incorporation/Organization or By-Laws HTML 47K
21: EX-3.1.2 Articles of Incorporation/Organization or By-Laws HTML 44K
22: EX-3.1.3 Articles of Incorporation/Organization or By-Laws HTML 71K
23: EX-3.2 Articles of Incorporation/Organization or By-Laws HTML 112K
24: EX-4.1 Instrument Defining the Rights of Security Holders HTML 18K
33: EX-4.10 Instrument Defining the Rights of Security Holders HTML 41K
34: EX-4.10.1 Instrument Defining the Rights of Security Holders HTML 25K
35: EX-4.11 Instrument Defining the Rights of Security Holders HTML 40K
36: EX-4.11.1 Instrument Defining the Rights of Security Holders HTML 26K
37: EX-4.11.2 Instrument Defining the Rights of Security Holders HTML 28K
38: EX-4.11.3 Instrument Defining the Rights of Security Holders HTML 27K
39: EX-4.11.4 Instrument Defining the Rights of Security Holders HTML 27K
40: EX-4.12 Instrument Defining the Rights of Security Holders HTML 358K
41: EX-4.13 Instrument Defining the Rights of Security Holders HTML 166K
42: EX-4.14 Instrument Defining the Rights of Security Holders HTML 93K
43: EX-4.15 Instrument Defining the Rights of Security Holders HTML 48K
44: EX-4.16 Instrument Defining the Rights of Security Holders HTML 84K
25: EX-4.2 Instrument Defining the Rights of Security Holders HTML 18K
26: EX-4.3 Instrument Defining the Rights of Security Holders HTML 18K
27: EX-4.4 Instrument Defining the Rights of Security Holders HTML 225K
28: EX-4.5 Instrument Defining the Rights of Security Holders HTML 80K
29: EX-4.6 Instrument Defining the Rights of Security Holders HTML 125K
30: EX-4.7 Instrument Defining the Rights of Security Holders HTML 104K
31: EX-4.8 Instrument Defining the Rights of Security Holders HTML 165K
32: EX-4.9 Instrument Defining the Rights of Security Holders HTML 73K
45: EX-10.1 Material Contract HTML 86K
58: EX-10.10 Material Contract HTML 76K
59: EX-10.11 Material Contract HTML 30K
60: EX-10.12 Material Contract HTML 22K
61: EX-10.13 Material Contract HTML 37K
62: EX-10.14 Material Contract HTML 39K
46: EX-10.2 Material Contract HTML 83K
47: EX-10.3 Material Contract HTML 166K
48: EX-10.4 Material Contract HTML 49K
49: EX-10.5 Material Contract HTML 65K
50: EX-10.5.1 Material Contract HTML 146K
51: EX-10.6 Material Contract HTML 69K
52: EX-10.7 Material Contract HTML 295K
53: EX-10.7.1 Material Contract HTML 82K
54: EX-10.7.2 Material Contract HTML 118K
55: EX-10.7.3 Material Contract HTML 56K
56: EX-10.8 Material Contract HTML 110K
57: EX-10.9 Material Contract HTML 44K
63: EX-16.1 Letter re: Change in Certifying Accountant HTML 25K
64: EX-21.1 Subsidiaries of the Registrant HTML 20K
EX-3.1.3 — Articles of Incorporation/Organization or By-Laws
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF
SERIES B PREFERRED STOCK
OF
PURE EARTH, INC.
Pursuant to Section 151 of the General Corporation Law of the State of Delaware
Pure Earth, Inc., a corporation organized and existing under the General Corporation Law of
the State of Delaware (the “Corporation”), in accordance with the provisions of Section 103
thereof, DOES HEREBY CERTIFY:
That pursuant to the authority vested in the Board of Directors of the Corporation (the
“Board of Directors”) in accordance with the provisions of the Amended and Restated
Certificate of Incorporation of the Corporation, the Board of Directors on March 2, 2008 adopted
the following resolution authorizing and designating a series of 20,000 shares of Preferred Stock
designated as “Series B Preferred Stock”:
RESOLVED, that, pursuant to the authority vested in the Board of Directors of the Corporation
in accordance with the provisions of Paragraph FOURTH, subparagraph (b), of the Amended and
Restated Certificate of Incorporation of the Corporation, the Board of Directors hereby fixes the
powers, designations, preferences and relative, participating, optional and other special rights,
and the qualifications, limitations and restrictions, of a series of preferred stock as set forth
below:
(1) Defined Terms. For purposes of this Certificate of Designations, Preferences and
Rights (this “Certificate of Designations”), the following capitalized terms have the
meanings given to them below:
“Acquisition” means any transaction or series of related transactions, consummated on
or after the date hereof, by which any one or more of the Corporation and any Subsidiaries of the
Corporation acquire (i) any parcel or a group of related parcels of real property, (ii) a fixed
asset or group of related fixed assets, (iii) the assets of any Person or any going business,
division thereof or line of business, or (iv) the Capital Stock, by direct purchase, combination,
merger or otherwise, of any Person.
“Additional Shares” has the meaning given to it in Section (4)(c).
“Bankruptcy Code” means 11 U.S.C. §§ 101 etseq., as amended from time
to time, and any successor statute, and all regulations from time to time promulgated thereunder.
“Board of Directors” has the meaning given to it in the introductory paragraphs
hereof.
“Business Day” means any day except a Saturday, Sunday, a legal holiday or other day
on which commercial banks in Chicago, Illinois or Philadelphia, Pennsylvania are authorized by law
to close.
“Capital Stock” means (i) with respect to any Person that is a corporation, any and
all shares, interests or equivalents in capital stock (whether voting or nonvoting and whether
common or preferred) of such corporation, and (ii) with respect to any Person that is not a
corporation, any and all partnership, membership, limited liability Corporation or other equity
interests of such Person; and in each case, any and all warrants, rights or options to purchase any
of the foregoing.
“Certificate of Designations” has the meaning given to it in Section (1).
“Certificate of Incorporation” means the Corporation’s Amended and Restated
Certificate of Incorporation, as the same may be further amended, modified or restated from time to
time not in contravention of the terms hereof. All references in this Certificate of Designations
to the Certificate of Incorporation shall be deemed to include a reference to this Certificate of
Designations.
“Common Stock” means the Corporation’s common stock, having a par value of $.001 per
share.
“Control” means, with respect to any Person, the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise; and the terms “Controlled”
and “Controlling” have correlative meanings.
“Controlled Investment Affiliate” means , with respect to any Person, any other Person
(including, without limitation, any fund or investment vehicle) that (i) directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under common Control with
the Person specified and (ii) is organized primarily for the purpose of making equity or debt
investments in one or more companies.
“Corporation” has the meaning given to it in the introductory paragraph hereof.
“Corporation Parties” means the Corporation, the Corporation’s Subsidiaries, and any
parent holding company of the Corporation, collectively.
“Coupon” has the meaning given to it in Section (4)(a).
“Event of Noncompliance” means any of the following events:
(a) any Corporation Party shall fail to (x) pay or set aside any sums for the payment of any
dividends (in cash or in kind) under the terms of the Investment Documents when due or payable, or
(y) redeem the Series B Preferred Stock in accordance with the Investment Documents, and in the
case of either (x) or (y), such failure continues for two Business Days after the Corporation is
provided with notice thereof by the Investors;
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(b) The Corporation or any other Corporation Party shall fail to observe, perform or comply
with any condition, covenant or agreement contained in (i) Section 2.6 of the Investment Agreement
and such failure shall continue unremedied for a period of five Business Days, (ii) Sections 5.1,
5.2(a) or 5.8 of the Investment Agreement for a period of two Business Days, (iii) Sections
5.2(e)(i), 5.3(i) or 5.10 of the Investment Agreement or in Article VI or Article VII of the
Investment Agreement for any period or (iv) Section 5.2 (other than Sections 5.2(a) and 5.2(e)(i))
of the Investment Agreement and (in the case of this clause (iv) only) such failure shall continue
unremedied for a period of ten Business Days after the earlier of (y) the date on which the
Corporation acquires Knowledge thereof and (z) the date on which written notice thereof is
delivered by any Investor to the Corporation;
(c) the Corporation or any other Corporation Party shall fail to observe, perform or comply
with any condition, covenant or agreement contained in the Investment Agreement or any of the other
Investment Documents other than those enumerated in paragraph (a) and (b) above, and such failure
(i) by the express terms of such Investment Document, constitutes an Event of Noncompliance, or
(ii) shall continue unremedied for any grace period specifically applicable thereto or, if no grace
period is specifically applicable, for a period of 30 days after the earlier of (y) the date on
which a Responsible Officer of the Corporation acquires knowledge thereof and (z) the date on which
written notice thereof is delivered by any holder of Series B Preferred Stock to the Corporation;
(d) any representation or warranty made or deemed made by or on behalf of the Corporation or
any other Corporation Party in the Investment Agreement, any of the other Investment Documents or
in any certificate, instrument, report or other document furnished at any time in connection
herewith or therewith shall prove to have been incorrect, false or misleading in any material
respect as of the time made, deemed made or furnished;
(e) the Corporation or any other Corporation Party shall (i) file a voluntary petition or
commence a voluntary case seeking liquidation, winding-up, reorganization, dissolution,
arrangement, readjustment of debts or any other relief under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to controvert in a timely and appropriate manner, any petition or case of
the type described in paragraph (f) below, (iii) apply for or consent to the appointment of or
taking possession by a custodian, trustee, receiver or similar official for or of itself or all or
a substantial part of its properties or assets, (iv) fail generally, or admit in writing its
inability, to pay its debts generally as they become due, (v) make a general assignment for the
benefit of creditors or (vi) take any corporate action to authorize or approve any of the
foregoing;
(f) any involuntary petition or case shall be filed or commenced against the Corporation or
any other Corporation Party seeking liquidation, winding-up, reorganization, dissolution,
arrangement, readjustment of debts, the appointment of a custodian, trustee, receiver or similar
official for it or all or a substantial part of its properties or any other relief under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, and such petition or case shall continue undismissed and unstayed for a period
of 60 days; or an order, judgment or decree approving or ordering any of the foregoing shall be
entered in any such proceeding; and
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(g) after it has been initially executed, the “Guaranty” (as defined and as executed in
connection with the Investment Agreement) shall for any reason cease to be in full force and effect
as to any guarantor thereunder, or any such guarantor or any Person acting on its behalf shall deny
or disaffirm such guarantor’s obligations thereunder.
“Existing Preferred Stock” means the Corporation’s previously issued “Series A
Preferred Stock, 10% Coupon” but only such stock issued for an aggregate purchase price up to
$1,000,000.
“Fundamental Asset Transaction” means any sale, assignment, lease, conveyance,
exchange, transfer, sale-leaseback or other disposition of more than 50% of the assets, business or
properties of the Corporation and its Subsidiaries, on a consolidated basis, whether in one or a
series of related transactions, whether or not in the ordinary course of business and whether or
not directly or indirectly or through the sale or other disposition of equity securities of any of
the Subsidiaries of the Corporation.
“Investment Agreement” means that certain Investment Agreement, dated as of the
Original Issue Date, between the Corporation and Fidus Mezzanine Capital, L.P., as such agreement
may be amended, restated, replaced or otherwise modified from time to time.
“Investment Documents” has the meaning assigned to such term in the Investment
Agreement.
“Junior Securities” has the meaning given to it in Section (3).
“Key Person Event” means the failure of (i) Brent Kopenhaver to serve as Chief
Financial Officer of the Corporation with at least the duties and responsibilities customarily
associated with such title, (ii) Mark Alsentzer to serve as Chief Executive Officer of the
Corporation with at least the duties and responsibilities customarily associated with such title,
(iii) each of Brent Kopenhaver and Mark Alsentzer to serve as a director on the board of directors
of each of the Corporation and its Subsidiaries, (iv) Brent Kopenhaver ceasing to beneficially own
at least 134,000 shares of Common Stock (subject to equitable adjustment for stock splits, stock
dividends and similar events) or (v) Mark Alsentzer ceasing to beneficially own 1,919,000 shares of
Common Stock (subject to equitable adjustment for stock splits, stock dividends and similar
events).
“Knowledge” of the Corporation means facts or circumstances within the actual
conscious awareness of Mark Alsentzer, Brent Kopenhaver or the President of any Subsidiary of the
Corporation or subunit of a Subsidiary of the Corporation for which a President has been appointed.
Liquidation Value” on any date means, with respect to any share of Series B Preferred
Stock, the sum of (i) the Original Per Share Purchase Price and (ii) the aggregate of all dividends
accrued and unpaid on such share. For the avoidance of doubt, dividends that have been paid
in-kind but for which new shares of Series B Preferred Stock have not been issued shall be deemed
to be unpaid for the purposes of determining the Liquidation Value of a share of Series B Preferred
Stock.
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“Mandatory Redemption Event” has the meaning given to it in Section (6)(b).
“Original Issue Date” means the date on which the first share of Series B Preferred
Stock is issued.
“Original Per Share Purchase Price” means $1,000 per share, as adjusted to reflect
stock splits, combinations, recapitalizations and similar events.
“Person” means any natural person, corporation, limited liability company,
professional association, limited partnership, general partnership, joint stock company, joint
venture, association, company, trust, bank, trust company, land trust, business trust or other
organization, whether or not a legal entity, and any government or agency or political subdivision
thereof.
“Redemption Price” the Liquidation Value of the shares of Series B Preferred Stock
being redeemed or repaid multiplied by the “Applicable Redemption Percentage” set forth
below either in the table or the proviso thereto:
Applicable Redemption
Percentage
On or prior to the first anniversary
of the Original Issue Date
103
%
After the first anniversary but on
or prior to the third anniversary of
the Original Issue Date
102
%
Thereafter
100
%
; provided, however, that with respect to any shares of Series B Preferred Stock
redeemed pursuant to Section (6)(d) (or Section 2.7(d) of the Investment Agreement), the Applicable
Redemption Percentage shall be 100%.
“Required Holders” means, at any time, Persons holding outstanding shares of Series B
Preferred Stock representing more than 50% of the aggregate Liquidation Value, at such time, of all
outstanding shares of Series B Preferred Stock.
“Responsible Officer” means, with respect to any Corporation Party, the president, the
chief executive officer, the chief financial officer, any executive officer, limited liability
company manager or any other financial officer of such Corporation Party, and any other officer or
similar official thereof responsible for the administration of the obligations of such Corporation
Party in respect of the Investment Agreement or any other Investment Document.
“Sale of the Corporation” means (i) any Person or group of Persons acting in concert
as a partnership or other group becoming, as a result of a tender or exchange offer, open market
purchases, privately negotiated purchases or otherwise, the beneficial owner of outstanding
Capital Stock of the Corporation having 50% or more of the Total Voting Power of the
Corporation or (ii) the consummation of a Fundamental Asset Transaction.
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“Series B Preferred Stock” has the meaning given to it in Section (2).
“Subsidiary” means, with respect to any Person, any corporation, limited liability
company, limited partnership or other entity of which securities or other ownership interests
having ordinary voting power to elect a majority of the board of directors or other Persons
performing similar functions are at the time directly or indirectly owned by such Person. Unless
otherwise specified, the term Subsidiary shall refer to a Subsidiary of the Corporation.
“Total Voting Power” means , with respect to any Person, the total number of votes
which may be cast in the election of directors of such Person at any meeting of stockholders of
such Person if all securities entitled to vote in the election of directors of such Person (on a
fully diluted basis, assuming the exercise, conversion or exchange of all rights, warrants, options
and securities exercisable for, exchangeable for or convertible into, such voting securities) were
present and voted at such meeting (other than votes that may be cast only upon the happening of a
contingency).
“Wholly Owned” means, with respect to any Subsidiary of any Person, that 100% of the
outstanding Capital Stock of such Subsidiary is owned, directly or indirectly, by such Person.
(2) Designation and Amount. A series of 20,000 shares of preferred stock of the
Corporation is hereby authorized and designated as “Series B Preferred Stock” (the “Series B
Preferred Stock”).
(3) Rank. The Series B Preferred Stock shall, with respect to dividend rights and
rights upon a liquidation, dissolution or winding up, rank prior to all classes of or series of
common stock and preferred stock of the Corporation and each other class of capital stock of the
Corporation, including without limitation the Common Stock but excluding the Existing Preferred
Stock (as to which the Series B Preferred Stock shall rank junior with respect to dividend rights
and rights upon a liquidation, dissolution or winding up). All capital stock and other equity
securities of the Corporation to which the Series B Preferred Stock ranks senior or prior (whether
with respect to dividends or upon a liquidation, dissolution or winding up or otherwise), including
the Common Stock but, for the avoidance of doubt, excluding the Existing Preferred Stock, are
collectively referred to herein as “Junior Securities.” The definition of Junior
Securities also shall include any rights or options exercisable for or convertible into any of the
Junior Securities.
(4) Dividends.
(a) The holders of shares of Series B Preferred Stock shall be entitled to receive cumulative
quarterly dividends, payable in cash or payable in kind, at the option of the Corporation as
provided herein, at the rate of 14% per annum (the “Coupon”). The dividends on the Series
B Preferred Stock shall be payable quarterly in arrears on the last day of each March, June,
September and December (unless such day is not a Business Day, in which event on the next
succeeding Business Day). The Coupon shall be paid in cash, except that other than upon
and during the continuance of an Event of Noncompliance, the Corporation may elect to pay a
portion of the Coupon equal to 4% per annum in kind (as more particularly described below in this
Section (4)). If a dividend payment is not paid solely in cash, the aggregate cash payment being
made shall be allocated pro rata among the holders of the Series B Preferred Stock based on the
Liquidation Value of the shares of Series B Preferred Stock held by them respectively. All
dividends on the Series B Preferred Stock shall be cumulative from the date of issue of such shares
of Series B Preferred Stock, whether or not there shall be funds of the Corporation legally
available for the payment of such dividends.
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(b) Dividends paid in cash or in kind shall be computed on the basis of a 360 day year
consisting of twelve 30-day months, based on the Liquidation Value of each applicable share of
Series B Preferred Stock. In respect of dividends paid in kind, subject to Section (4)(c), (i) the
amount of the dividend shall automatically accrete to the Liquidation Value in accordance with
Section (5), and (ii) such non-cash dividend payments shall compound quarterly on each dividend
payment date until paid in cash. Notwithstanding the foregoing, upon and during the continuance of
an Event of Noncompliance, at the election of the Required Holders delivered in writing to the
Corporation, the holders of the Series B Preferred Stock shall be entitled to receive additional
dividends in cash at a rate of 4% per annum (calculated on the basis of a 360-day year consisting
of twelve 30-day months).
(c) At the written request of any holder of shares of Series B Preferred Stock, the
Corporation shall be required to issue additional shares of Series B Preferred Stock
(“Additional Shares”) with respect to the payment of dividends previously accreted to the
Liquidation Value of outstanding shares of the Series B Preferred Stock of such holder pursuant to
Section (4)(a) above. The Additional Shares shall be identical to all other shares of Series B
Preferred Stock except that the Original Issue Date with respect to such shares shall be the date
such Additional Shares are actually issued. In such cases, the number of Additional Shares to be
issued as payment of such previously accreted dividends shall be equal to the amount of accreted
dividends being paid by the issuance of Additional Shares divided by the Original Per Share
Purchase Price, carried out to five decimal points for fractional shares. Upon the issuance of
Additional Shares to such holder, the amount of accreted dividends on outstanding shares of the
Series B Preferred Stock of such holder shall be reduced by the amount of the accreted dividend
paid by the issuance of Additional Shares pursuant to this Section (4)(c).
(d) Holders of shares of Series B Preferred Stock shall not be entitled to any dividends,
whether payable in cash, property or stock, in excess of the cumulative dividends, as herein
provided, on the Series B Preferred Stock. Except as provided in this Section (4), no interest, or
sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments
on the Series B Preferred Stock that may be in arrears.
(e) In the event that the Corporation shall choose to pay a portion of any dividend in cash
and a portion in kind, such payment shall be allocated pro rata based upon the aggregate
Liquidation Value of all shares of Series B Preferred Stock entitled to payment of such dividends.
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(5) Liquidation Preference. In the event of any liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, after any payment or distribution of the
assets of the Corporation (whether capital or surplus) is made to or set apart for the holders
of the Existing Preferred Stock as provided in the Certificate of Incorporation relating thereto,
but before any payment or distribution of the assets of the Corporation (whether capital or
surplus) shall be made to or set apart for the holders of Junior Securities, the holders of the
shares of Series B Preferred Stock shall be entitled to receive an amount in cash equal to the
Liquidation Value of each such share. Except as provided in the proceeding sentences, holders of
shares of Series B Preferred Stock shall not be entitled to any distribution in the event of a
liquidation, dissolution or winding up of the Corporation. If, upon any liquidation, dissolution
or winding up of the Corporation, the assets of the Corporation, or proceeds thereof, distributable
among the holders of the shares of Series B Preferred Stock (after satisfaction of the amounts owed
to holders of the Existing Preferred Stock) shall be insufficient to pay in full such preferential
amount, then such assets, or the proceeds thereof, shall be distributed among the holders of shares
of Series B Preferred Stock ratably in accordance with the respective amounts that would be payable
on such shares of Series B Preferred Stock if all amounts payable thereon were paid in full. For
the purposes of this Section (5), a Sale of the Corporation or a Key Person Event shall be deemed
to be a liquidation, dissolution and winding up of the Corporation and any shares of Series B
Preferred Stock redeemed in connection therewith shall be redeemed pursuant to Section (6). After
payment shall have been made in full to the holders of the Series B Preferred Stock, as provided in
this Section (5), the other series or class or classes of the Corporation shall be entitled to
receive any and all assets remaining to be paid or distributed, and the holders of the Series B
Preferred Stock shall not be entitled to share therein.
(6) Redemption.
(a) On Redemption Date. The Corporation shall redeem, at the Redemption Price, any
and all outstanding shares of Series B Preferred Stock of each holder thereof on the Redemption
Date.
(b) Other Mandatory Redemption. The Corporation shall redeem, at the Redemption
Price, the outstanding shares of Series B Preferred Stock of each holder thereof, in whole or in
part at the option of such holder, upon the occurrence of any of the following: (i) a Sale of the
Corporation, (ii) a Key Person Event, (iii) an Event of Noncompliance or (iv) the protective
provisions set forth in Section (7) ceasing to be applicable and effective with respect to the
Series B Preferred Stock (each, a “Mandatory Redemption Event”).
The Corporation shall give written notice to the holders of Series B Preferred Stock of (A) the
expected occurrence of any Mandatory Redemption Event arising under clause (i) of the definition
thereof not less than thirty (30) nor more than sixty (60) days prior to the proposed closing date
thereof, describing in reasonable detail such transaction, including the proposed closing and
payment date with respect thereto, and (B) the occurrence of a Key Person Event specified in clause
(ii) above and an Event of Noncompliance specified in clause (iii) above within ten (10) days of
obtaining Knowledge or receiving notice of such occurrence. To have shares of Series B Preferred
Stock redeemed, the holders thereof must give written notice to the Corporation after the
occurrence of a Mandatory Redemption Event, demanding redemption and specifying the number of
shares to be redeemed. With respect to the events specified in clause (i) of the definition of
“Mandatory Redemption Event,” each holder of Series B Preferred Stock must deliver such notice to
the Corporation within twenty (20) days after receiving notice from
the Corporation as to any such event. Upon receipt of any proper redemption demand from a holder
of Series B Preferred Stock, the Corporation covenants and agrees that it will redeem the shares of
Series B Preferred Stock or the portion thereof held by such holder subject to redemption. The
closing date for any redemption due to the occurrence of an event specified in clause (i) of the
definition of “Mandatory Redemption Event” shall not be later than the closing date of such event.
The closing date for a redemption due to any other Mandatory Redemption Event shall occur within
ten (10) Business Days of the Corporation’s receipt of the redemption demand.
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The obligation of the Corporation to redeem the Series B Preferred Stock pursuant to this Section
(6)(b) is subject to the occurrence of the Mandatory Redemption Event in respect of which such
offers and acceptances shall have been made. In the event that such Mandatory Redemption Event
does not occur on or prior to the proposed redemption date in respect thereof, the redemption shall
be deferred until and shall be made upon the date on which such Mandatory Redemption Event occurs.
The Corporation shall keep each holder of Series B Preferred Stock reasonably and timely informed
of (i) any such deferral of the date of redemption, (ii) the date on which such Mandatory
Redemption Event and the redemption are expected to occur, and (iii) any determination by the
Corporation that efforts to effect such Mandatory Redemption Event have ceased or been abandoned
(in which case the offers and acceptances made pursuant to this Section in respect of such
Mandatory Redemption Event shall be deemed rescinded).
(c) Optional Redemption. To the extent the Corporation shall have funds legally
available for such payment, the Corporation shall have the right at any time and from time to time,
upon the notice provided for below, to redeem, at the Redemption Price, the outstanding shares of
Series B Preferred Stock in whole or in part; provided that if less than all of the outstanding
shares of Series B Preferred Stock are to be redeemed, the Corporation shall redeem a pro rata
portion of each holder’s shares of Series B Preferred Stock. In the event of such an optional
redemption, the Corporation shall give the holders of Series B Preferred Stock irrevocable (other
than as provided below) written notice of such redemption not less than forty-five (45) days prior
to the redemption date, specifying (i) the redemption date, (ii) the number of shares of Series B
Preferred Stock to be redeemed on such date, (iii) the redemption price, (iv) the place or places
where certificates for such shares are to be surrendered for payment of the redemption price, (v)
that dividends on the shares to be redeemed will cease to accrue on such redemption date, and (vi)
stating that such redemption is to be made pursuant to this Section (6)(d) (or Section 2.7(c) of
the Investment Agreement); provided, however, that the Corporation may withdraw such offer at any
time prior to the redemption date so long as any of the rights of any holder of Series B Preferred
Stock shall not have been prejudiced in any material respect by reliance upon such offer of
redemption.
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(d) Certain Acquisitions. In addition to the optional redemption rights in Section
ARTICLE I(6)(c), in the event that (1) the Corporation requests, in writing, that the holders of
Series B Preferred Stock consent to a contemplated Acquisition, (2) the Corporation gives at least
20 days prior written notice of such contemplated Acquisition prior to the consummation thereof and
the Corporation provides prior to consummation of such contemplated Acquisition all financial and
due diligence information regarding the contemplated Acquisition reasonably requested by the
holders of Series B Preferred Stock prior to such consummation, (3) the Required Holders notify the
Corporation, in writing, that they will not
provide such consent and (4) the Corporation actually consummates such Acquisition, to the
extent the Corporation shall have funds legally available for such payment, the Corporation shall
have the right, upon the notice provided for below, to redeem, at the Redemption Price, the
outstanding shares of Series B Preferred Stock in whole but not in part. In the event of such an
optional redemption, the Corporation shall give the holders of Series B Preferred Stock irrevocable
(other than as provided below) written notice of such redemption not more than ten days following
the consummation of such Acquisition, specifying (i) the redemption date, which shall not be more
than 30 days following the consummation of such Acquisition, (ii) the number of shares of Series B
Preferred Stock to be redeemed on such date, (iii) the redemption price, (iv) the place or places
where certificates for such shares are to be surrendered for payment of the redemption price, (v)
that dividends on the shares to be redeemed will cease to accrue on such redemption date, and (vi)
stating that such redemption is to be made pursuant to this Section (6)(d) (or Section 2.7(c) of
the Investment Agreement); provided, however, that the Corporation may withdraw
such offer at any time prior to the redemption date so long as any of the rights of any holders of
Series B Preferred Stock shall not have been prejudiced in any material respect by reliance upon
such offer of redemption.
(e) Redemption or Purchase Price. With respect to any shares of Series B Preferred
Stock to be redeemed or repurchased under this Section 6(e), the Corporation shall pay to the
holders of the Series B Preferred Stock being redeemed or purchased an amount in cash equal to the
Redemption Price of the Series B Preferred Stock being redeemed or purchased. The Corporation also
shall pay in cash to the holders of Series B Preferred Stock at the time of such redemption all
accrued and unpaid fees, charges and other amounts owed by any Corporation Party to such holders
pursuant to the Investment Documents. If the Corporation is unable or shall fail to discharge its
obligation to redeem all outstanding shares of Series B Preferred Stock at the time required
pursuant to this Section (6), (i) the Corporation shall discharge such redemption or purchase
obligation as soon thereafter as possible and the amounts payable in connection with such
redemption or purchase shall bear interest at a per annum rate of 18%, subject to quarterly
compounding, from and after the date redemption is required pursuant to this Section (6).
(f) Effect of Redemption; Certificates. Upon the redemption of shares of Series B
Preferred Stock and payment of the redemption price therefor, dividends shall no longer accrue on
such shares of Series B Preferred Stock hereunder. In case fewer than all the shares represented
by any certificate representing shares of Series B Preferred Stock are redeemed, a new certificate
shall be issued representing the unredeemed shares without cost to the holder thereof.
(7) Protective Provisions. In addition to any other rights provided by law, and
except as permitted hereby with respect to Series B Preferred Stock, except where the vote or
written consent of the holders of a greater number of shares is required by law or by another
provision of this Certificate of Designations, without first obtaining the affirmative vote or
written consent of the Required Holders, voting as a separate class, the Corporation shall not, and
as applicable shall not permit any of its Subsidiaries to:
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(a) amend or repeal any provision of, or add any provision to, the Corporation’s Certificate
of Incorporation or Bylaws, or file any certificate of designations,
preferences, limitations and relative rights of any series of preferred stock, if such action
would be adverse to the interests of the holders of Series B Preferred Stock (which prohibition
shall include, without limitation, the prohibition of the taking of any action in breach of any
other protective equity provisions or negative covenants applicable in favor of the holders of the
Series B Preferred Stock) or otherwise amend or alter any rights, preferences or privileges of the
Series B Preferred Stock;
(b) (i) create or authorize the creation, increase or decrease the authorized, or increase the
issued (except as provided in Section (4)(c)) amount, of any class or series of shares of stock of
the Corporation, unless the class or series of stock (x) ranks junior to the Series B Preferred
Stock (including without limitation, as to dividends, right to receive a redemption payment and the
distribution of assets upon liquidation), (y) except for the Existing Preferred Stock, does not
have any redemption obligation that could arise prior to the date that is the first anniversary of
the Redemption Date and (z) does not in any manner adversely affect the terms, designations,
powers, preferences or other rights of the holders of Series B Preferred Stock, or (ii) create or
authorize any obligation or security convertible into shares of any class or series of stock,
unless such class or series of stock ranks junior to the Series B Preferred Stock (including
without limitation, as to dividends, right to receive a redemption payment and the distribution of
assets upon liquidation) and does not in any manner adversely affect the terms, designations,
powers, preferences or other rights of the holders of Series B Preferred Stock, regardless of
whether any such creation, authorization or increase shall be by means of amendment to the
Certificate of Incorporation, filing of a certificate of designations thereto, or by merger,
consolidation or otherwise;
(c) with respect to any non-Wholly Owned Subsidiary, the Corporation will not permit such
Subsidiary to create or issue any Capital Stock to Persons other than the Corporation and its
Subsidiaries except for common equity interests with (i) no rights, preferences or privileges over
any other class or series of Capital Stock of such Subsidiary, (ii) no redemption or repurchase
obligations by the Corporation and its Subsidiaries, (iii) no rights by the holders thereof to
block or veto dividends or distributions on the Capital Stock of such Subsidiary, and (iv) only the
right to share in a pro rata portion of the profits and losses of such Subsidiary based on the
ratio of the amount invested and the fair market value of the Capital Stock of such Subsidiary at
the time of such investment.
(d) directly or indirectly, declare or make any dividend payment, or make any other
distribution of cash, property or assets, in respect of any of its Capital Stock or any warrants,
rights or options to acquire its Capital Stock, or purchase, redeem, retire or otherwise acquire
for value any shares of its Capital Stock or any warrants, rights or options to acquire its Capital
Stock or set aside funds for any of the foregoing, except that:
(i) the Corporation and any of its Subsidiaries may do any of the forgoing in respect of the
Series B Preferred Stock as provided in the Investment Documents or the Existing Preferred Stock;
(ii) the Corporation and any of its Subsidiaries may declare and make dividend payments or
other distributions payable solely in its Common Stock;
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(iii) each Subsidiary of the Corporation may declare and make dividend payments or other
distributions to the Corporation or to another Subsidiary of the Corporation that is a “Subsidiary
Guarantor” (as defined in the Investment Agreement), in each case to the extent not prohibited
under applicable “Requirements of Law” (as defined in the Investment Agreement);
(iv) each non-Wholly Owned Subsidiary may declare and make dividend payments or other
distributions to its equity holders other than the Corporation Parties on a pro rata basis based on
respective equity interests held to the extent of available excess cash flow from operations, in
each case to the extent not prohibited under applicable “Requirements of Law” (as defined in the
Investment Agreement); and
(v) so long as no Event of Noncompliance shall have occurred and be continuing or would result
therefrom, the Corporation may purchase, redeem, retire or otherwise acquire shares of its Capital
Stock (or options or rights to acquire its Capital Stock) held by former officers, directors or
employees following termination of service or employment, in an aggregate cash amount not exceeding
$100,000 during any fiscal year or $500,000 for all such purchases, redemptions, retirements and
acquisitions from and after the “Closing Date” (as defined in the Investment Agreement).
(e) voluntarily or involuntarily liquidate, dissolve or wind up its existence or business;
(f) amend the provisions of this Section (7); or
(g) agree to take any of the actions set forth in the foregoing subparagraphs (a) through (f);
provided, however, that the foregoing protective provisions shall forever cease to
apply if the Corporation redeems or purchases shares of Series B Preferred Stock immediately after
which the aggregate Liquidation Value of the outstanding Series B Preferred Stock is less than ten
percent of the aggregate Liquidation Value of the outstanding Series B Preferred Stock on the
Original Issuance Date, and any subsequent increases in Liquidation Value, including, without
limitation, any increases resulting from accrued dividends, shall not reinstate such protective
provisions.
Any actions taken in violation of the restrictions contained in this Section (7) shall be null
and void and shall be outside of the legal and corporate power or authority of the Corporation, its
officers or directors, and its shareholders.
(8) Voting Rights. The holders of record of shares of Series B Preferred Stock shall
not be entitled to any voting rights as a shareholder of the Corporation except as provided by
applicable law.
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(9) Subordination; Payment Restrictions. Any payment to any holder of Series B
Preferred Stock under or on account of the obligations under the Investment Documents (the
“Subordinated Obligations”) is hereby expressly subordinated to the extent and in the
manner set forth in this Section (9) to the payment in full of the indebtedness (the “Senior
Indebtedness”) of
the Corporation to Wells Fargo Bank, National Association (“Wells Fargo”), under a
Credit and Security Agreement dated as of October 24, 2006, as amended, by and between the
Corporation, Wells Fargo, as agent, and the lenders thereunder from time to time (such lenders
collectively, the “Senior Lenders”) as the same may hereafter be further amended,
supplemented or restated from time to time (the “Credit Agreement”). The payment rights of
each holder of Series B Preferred Stock shall continue to be subordinated to the Senior
Indebtedness on the terms set forth in this Certificate of Designations even if the Senior
Indebtedness is deemed unsecured, under-secured, subordinated, avoided or disallowed under the
United States Bankruptcy Code or other applicable law.
(a) Until all of the Senior Indebtedness has been paid in full, no holder of Series B
Preferred Stock shall, without the prior written consent of the Senior Lenders holding a majority
of the Senior Indebtedness, receive or accept any payment from the Corporation under or on account
of the obligations under the Investment Documents, or exercise any right of or permit any setoff
with respect to the Subordinated Obligations, except that the holders of Series B Preferred Stock
may accept (i) scheduled quarterly dividends (but not prepayments) to be paid under the Certificate
of Designations of even date herewith, except upon the occurrence and during the continuance of an
event of default under the Credit Agreement either immediately before or following any such payment
and (ii) any payment made out of funds held in any New Equity Account (as defined in the Credit
Agreement as in effect on the date hereof).
(b) If any holder of Series B Preferred Stock receives any payment that such holder is not
entitled to receive under the provisions of this Certificate of Designations, such holder will hold
the amount so received in trust for the Senior Lenders and will forthwith turn over such payment to
the Senior Lenders in the form received (except for the endorsement of such holder where necessary)
for application to the Senior Indebtedness (whether or not due), in such manner of application as
the Senior Lenders may deem appropriate. If a holder of Series B Preferred Stock exercises any
right of setoff which such holder is not permitted to exercise under the provisions of this
Certificate of Designations, such holder will promptly pay over to the Senior Lenders, in
immediately available funds, an amount equal to the amount of the claims or obligations offset.
(c) Each Senior Lender shall be a third party beneficiary entitled to enforce the provisions
of this Section (9).
(d) Upon the Corporation’s entry into any other secured credit facility in replacement of or
in addition to the Senior Indebtedness, whether with the Senior Lenders or one or more substitute
lenders, each holder of Series B Preferred Stock agrees to enter into documentation with the
Corporation and such lenders providing the lenders with substantially the same subordination and
other rights as are held by the Senior Lenders pursuant to this Section (9).
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IN WITNESS WHEREOF, Pure Earth, Inc. caused this Certificate of Designations to be signed and
attested by the undersigned this 4th day of March, 2008.