EXHIBIT 10.9
AGREEMENT TO DEFER
CONVERSION OF PREFERRED STOCKS
THIS AGREEMENT, entered into on this 2nd day of April, 2003,
is by and among 3CI COMPLETE COMPLIANCE CORPORATION (the "Company"), a Delaware
corporation, WASTE SYSTEMS, INC. ("WSI"), a Delaware corporation, and
STERICYCLE, INC. ("Stericycle"), a Delaware corporation and the owner of 100% of
the capital stock of WSI.
WHEREAS, WSI owns 100% of the outstanding shares of the Series
B Convertible Preferred Stock, $1.00 par value ("Series B Preferred Stock"), and
Series C Convertible Preferred Stock, $1.00 par value ("Series C Preferred
Stock" and, together with the Series B Preferred Stock, the "Preferred Stock" or
"Preferred Stocks"), of the Company; and
WHEREAS, under the terms of the respective Certificates of
Designation of the Series B and Series C Preferred Stock on file with the
Secretary of State of Delaware, the Preferred Stocks will be automatically
converted into shares of the Common Stock, $0.01 par value ("Common Stock"), of
the Company on April 6, 2003; and
WHEREAS, a disagreement has arisen between WSI and Stericycle,
on the one hand, and the Company, on the other hand, regarding the number of
shares of Common Stock, $0.01 par value ("Common Stock") of the Company into
which the Preferred Stock is convertible (the "Conversion Rate"); and
WHEREAS, the 269th Judicial District Court of Xxxxxx County,
Texas (the "Court") entered a judgment approving the terms of the Settlement
Agreement by and between Xxxxx X. Xxxx, et al, and Waste Systems, Inc., 3CI
Complete Compliance Corporation, et al, dated July 17, 1997, under which the
Series B Preferred Stock was approved and issued, and such Court retains
jurisdiction for purposes of enforcing the terms of the Settlement Agreement,
including the terms of the Series B Preferred Stock; and
WHEREAS, the Board of Directors of the Company has determined
that it is in the best interests of the Company to file a declaratory judgment
action with such Court and request the Court to determine the Conversion Rate;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, and for other good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged by each party, the
parties hereto covenant and agree as follows:
1. Deferral of Conversion of Preferred Stocks. Until such time
as a Final Determination (defined hereinafter) occurs setting forth the
appropriate Conversion Rate:
a. Stericycle agrees to cause WSI, and WSI agrees,
not to exercise any right WSI may have to convert the
Preferred Stocks into Common Stock of the Company;
b. The Company, WSI and Stericycle agree that no
automatic conversion of the Preferred Stocks shall occur or
otherwise be deemed to have occurred, notwithstanding any
contrary provision of the respective Certificates of
Designation governing the Series B Preferred Stock and Series
C Preferred Stock; and
c. The Company, WSI and Stericycle agree that the
Company shall not be obligated to, and shall not, issue any
Common Stock upon conversion of the Preferred Stocks, and that
the Company shall be entitled to and shall direct its transfer
agent not to record any issue of Common Stock upon, or on
account of, conversion of any of the Preferred Stocks.
2. Conversion Upon a Final Determination. On the date on which
the Final Determination occurs setting forth the Conversion Rate to be
applicable upon conversion of the Preferred Stocks (the "Settled Conversion
Rate"):
a. The Company, WSI and Stericycle agree that the
Series B Preferred Stock and the Series C Preferred Stock (i)
shall automatically, without any further action on the part of
the parties hereto, be converted into that number of shares of
Common Stock as shall be calculated based on the Settled
Conversion Rate, and (ii) shall be deemed to have been
converted for all purposes effective on and as of April 6,
2003; and
b. The Company shall be obligated to and agrees
promptly thereafter to direct its transfer agent to issue that
number of shares of Common Stock upon conversion of the
Preferred Stocks as shall be calculated based on the Settled
Conversion Rate, and to deliver to WSI a certificate or
certificates, registered in the name of WSI, representing in
the aggregate that number of shares of Common Stock.
3. Definition of Final Determination. For purposes of this
Agreement, a "Final Determination" shall mean that date on which the judicial
judgment as to the appropriate Conversion Rate shall become final and
nonappealable, in which case such determination of the Court, or such other
judicial court as may appropriate or necessary, shall become the Settled
Conversion Rate.
4. Notices. Any notice, designation, consent, approval or
other communication required or permitted to be given pursuant to the provisions
of this Agreement ("Notice") shall be given in writing and shall be sent by
certified or registered mail, Federal Express, overnight courier, or telecopier,
addressed as follows:
If to the Company: 3CI Complete Compliance Corporation
0000 X. Xxxxx Xxxxxxx Xxxxxxx
Xxxxx Xxxxxxx, Xxxxx 00000
Attention: Xxx Xxxx, Chief Financial Officer
Tel. No.: (000) 000-0000 #000
Fax No.: (000) 000-0000
If to WSI: Waste Systems, Inc.
c/o Stericycle, Inc.
00000 Xxxxx Xxxxx Xxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
Attention: Mr. Xxxxx X. X. ten Xxxxx
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
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If to Stericycle: Stericycle, Inc.
00000 Xxxxx Xxxxx Xxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
Attention: Mr. Xxxxx X. X. ten Xxxxx
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
Any party may, by Notice given in accordance with the
provisions of this Section 4, designate any further or different address to
which subsequent Notices shall be sent pursuant to the provisions of this
Agreement. Any Notice shall be deemed to have been given on the date such Notice
shall have been delivered. If such delivery shall be made on a Saturday, Sunday
or holiday, said notice shall be deemed to have been given on the next
succeeding business day.
5. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, legal representatives and assigns, but shall not be assignable by
any party hereto without the written consent of all of the other parties hereto.
Except for the persons specified in the preceding sentence, this Agreement is
not intended to confer on any person not a party hereto any rights or remedies
hereunder.
6. Governing Law. This Agreement shall be governed by and
construed under the law of the State of Texas, without giving effect to any
choice of law or other conflict of law provision or rule (whether of the State
of Texas or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Texas.
7. Further Assurances. Each of the parties hereto shall
hereafter execute and deliver such further instruments and do such further acts
and things as may be required or necessary to carry out the intent and purposes
of this Agreement and which are not otherwise inconsistent with any of the terms
of this Agreement.
8. Entire Agreement; Modification or Waiver. This Agreement
embodies the entire agreement and understanding among the parties with respect
to the subject matter hereof and supersedes any and all prior agreements and
understandings relating to the subject matter hereof. No amendment, modification
or waiver of this Agreement or any provision hereof shall be binding or
effective for any purpose unless it is made in a writing signed by all of the
parties hereto. No course of dealing between the parties shall be deemed to
affect or to modify, amend or discharge any provision or term of this Agreement.
No delay by any party to or any beneficiary of this Agreement in the exercise of
any of its or his rights or remedies shall operate as a waiver thereof, and no
single or partial exercise by any party to or any beneficiary of this Agreement
of any such right or remedy shall preclude any other or further exercise
thereof. A waiver of any right or remedy on any one occasion shall not be
construed as a bar to or waiver of any such right or remedy on any other
occasion.
9. Counterparts. This Agreement may be executed in two or more
identical counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
10. Interpretation. Headings to sections herein are for
convenience of reference only and are not intended to be a part or to affect the
meaning or interpretation of this Agreement. The language used in this Agreement
will be deemed to be the language chosen by the parties hereto to express their
common intent, and no rule of strict construction will be applied against any
party.
[THE NEXT FOLLOWING PAGE IS THE SIGNATURE PAGE.]
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IN WITNESS WHEREOF, the parties have duly executed this
Agreement on the date and year first above written.
3CI COMPLETE COMPLIANCE
CORPORATION
By: /s/ Xxxxx X. Xxxx
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Its: Chief Financial Officer
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WASTE SYSTEMS, INC.
By: /s/ Xxxx X. Xxxxxx
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Its: President
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STERICYCLE, INC.
By: /s/ Xxxx X. Xxxxxx
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Its: President & CEO
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