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                                                                     EXHIBIT 1.3

                           CERTIFICATE OF DESIGNATIONS


                                   ----------

                              WASTE SERVICES, INC.

             CERTIFICATE OF DESIGNATIONS OF THE POWERS, PREFERENCES
        AND OTHER SPECIAL RIGHTS OF THE SERIES A PREFERRED STOCK
                            AND THE QUALIFICATIONS,
                      LIMITATIONS AND RESTRICTIONS THEREOF

                         Pursuant to Section 151 of the
         General Corporation Law of the State of Delaware


      Waste Services, Inc. (the "CORPORATION"), a corporation organized and
existing under the General Corporation Law of the State of Delaware, does hereby
certify that, pursuant to the authority vested in the board of directors of the
Corporation (the "BOARD OF DIRECTORS") by its Certificate of Incorporation,
(hereinafter referred to as the "CERTIFICATE OF INCORPORATION"), and pursuant to
the provisions of Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors has duly approved and adopted the following
resolution (the "RESOLUTION"):


      RESOLVED, that, pursuant to the authority vested in the Board of Directors
by the Certificate of Incorporation, the Board of Directors does hereby create,
authorize and provide for the issue of Preferred Stock, par value $0.01 per
share, with an initial base amount of $1,000.00 per share (the "BASE AMOUNT"),
consisting of 100,000 shares, having the powers, preferences, and other special
rights and the qualifications, limitations and restrictions thereof that are set
forth in the Certificate of Incorporation and in this Resolution as follows:

      1.    DESIGNATION AND AMOUNT. There is hereby created out of the
authorized and unissued shares of preferred stock of the Corporation a class of
preferred stock designated as the "Series A Preferred Stock" and hereinafter
called the "Preferred Stock". The number of shares constituting such class shall
equal 100,000.

      2.    DIVIDENDS.

            (a) BASE DIVIDENDS. The holders of Preferred Stock shall be entitled
to receive out of funds legally available therefor cumulative cash dividends at
the rate of 17.75% per annum of the sum of (i) the Base Amount (as such Base
Amount shall be


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appropriately adjusted for any stock dividend, stock split, reclassification,
recapitalization, consolidation or similar event affecting the Preferred Stock)
plus (ii) all accumulated and unpaid dividends (as of the relevant compounding
date) plus (iii) the Incremental Amount (as defined in Section 5(d)), if any.
The Preferred Stock dividends shall be compounded quarterly and accrue quarterly
in arrears, based on the actual number of days elapsed in such period, from and
including the Issue Date to and including the first to occur of (i) the date on
which the Liquidation Preference is paid to the holder of such Preferred Stock
in connection with the liquidation of the Corporation or the redemption of such
Preferred Stock or (ii) the date on which such Preferred Stock is otherwise
acquired by the Corporation or no longer outstanding. The Board of Directors may
fix a record date for the determination of holders of Preferred Stock entitled
to receive payment of a dividend declared thereon, which record date shall be
not more than 60 days prior to the date fixed for the payment thereof (in
accordance with the terms of this Section 2). Such dividends will accrue whether
or not they have been declared and whether or not there are profits, surplus or
other funds of the Corporation legally available for the payment of dividends.
The Corporation shall not pay dividends on or make any other distribution on
Junior Stock (other than any dividend or distribution payable solely in Junior
Stock) until all accrued but unpaid dividends on the Preferred Stock have been
declared and fully paid or irrevocably set apart for payment. If at any time the
Corporation pays less than the total amount of dividends then accrued with
respect to the Preferred Stock, such payment shall be distributed pro rata among
the holders thereof based on the aggregate accrued but unpaid dividends on the
shares of Preferred Stock held by each such holder.

            (b) ADDITIONAL DIVIDENDS. After all accrued but unpaid dividends on
the Preferred Stock have been declared and paid or set apart pursuant to Section
2(a), if the Board of Directors shall elect to declare additional dividends on
the Common Stock (whether payable in cash, securities or other property) other
than dividends payable solely in shares of Common Stock, such additional
dividends shall be paid in equal amounts per share on all shares of the
Preferred Stock and the Common Stock, but with all holders of Preferred Stock
treated (for purposes of this determination) as if they held a number of shares
of Common Stock equal to the Liquidation Preference divided by the Applicable
Amount.

            (c) WITHHOLDING. The Corporation shall be authorized to deduct and
withhold any withholding taxes actually imposed under the Internal Revenue Code
of 1986, as amended, or any applicable provision of state, local or foreign tax
law, and any amounts so deducted and withheld shall be treated as distributed by
the Corporation to the holders of the Preferred Stock in accordance with the
terms hereof, PROVIDED, HOWEVER, that (i) no such withholding or deduction shall
be made in respect of any shares of Preferred Stock unless the Corporation
provides written notice to the holder of such shares at least 10 days prior to
such deduction and withholding and (ii) no such


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withholding or deduction shall be made to the extent the holder of such share
demonstrates, in a manner reasonably satisfactory to the Corporation, that no
such deduction and withholding is required or that deduction and withholding is
permitted at a reduced rate.

      3.    LIQUIDATION PREFERENCE. Upon any liquidation, dissolution or winding
up of the affairs of the Corporation (a "LIQUIDATION EVENT"), no distribution
shall be made to the holders of any Junior Stock unless, prior to the first such
distribution, the holders of the Preferred Stock shall have received
consideration of an amount per share equal to the greater of (i) the Liquidation
Preference per share on the date of payment, or (ii) the amount the holders of
Preferred Stock would receive if they held a number of shares of Common Stock
equal to the Liquidation Preference divided by the Applicable Amount. If the
assets distributable in any such event to the holders of the Preferred Stock are
insufficient to permit the payment to such holders of the full Liquidation
Preference to which they may be entitled, such assets shall be distributed
ratably among the holders of the Preferred Stock and all Parity Stock in
proportion to the full Liquidation Preference of the Preferred Stock and the
liquidation preference of such Parity Stock that each such holder would
otherwise be entitled to receive. For the avoidance of doubt, neither a Company
Sale nor a Change of Control shall be deemed to be a Liquidation Event for
purposes of this Section 3.

      4.    REDEMPTION.

            (a) FINAL REDEMPTION. On the date that is the twelfth anniversary of
the Original Issue Date of the shares of Preferred Stock (the "FINAL REDEMPTION
DATE"), the Corporation shall redeem for cash out of funds legally available
therefor all of the Preferred Stock held by each holder for a price per share
equal to the Liquidation Preference.

            (b) OPTIONAL REDEMPTION. Until the third anniversary of any Issue
Date, subject to the limitations set forth in Section 6.15 of the Subscription
Agreement and applicable law, the Corporation may at its option (except as
otherwise provided in Section 5(c)) redeem for cash out of funds legally
available therefor all or a portion of the Preferred Stock held by each holder
for a price per share equal to the Liquidation Preference (any such partial
redemption to be effected pro rata according to the number of shares held by
each holder of Preferred Stock); PROVIDED, HOWEVER, that for purposes of this
sentence, the Liquidation Preference shall be calculated using the third
anniversary of such Issue Date as the relevant date of determination and
assuming no cash dividends were paid (other than cash dividends that were
actually declared and paid). After the third anniversary of any Issue Date and
prior to the occurrence of a Change of Control, the Corporation may redeem for
cash out of funds legally available therefor all or a portion of the Preferred
Stock held by each holder for a price per share


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equal to the Liquidation Preference (any such partial redemption to be effected
pro rata according to the number of shares held by each holder of Preferred
Stock). Notwithstanding anything herein to the contrary, the Corporation shall
not redeem less than all of the Preferred Stock pursuant to this Section 4(b) if
as a result of any such redemption less than 5,000 shares of Preferred Stock
would be outstanding.

            (c) CHANGE OF CONTROL OFFER TO REDEEM. Upon the occurrence of a
Change of Control, the Corporation shall (unless the Corporation prior to or
contemporaneously with such Change of Control redeems all of the Preferred Stock
pursuant to Section 4(b) hereof) make an offer to redeem for cash out of funds
legally available therefor all of the Preferred Stock held by each holder for a
price per share equal to the Liquidation Preference multiplied by 101.0%.

            (d) MECHANICS OF REDEMPTION. In the case of a redemption pursuant to
Section 4(a) or (b), the Corporation shall give written notice to each holder of
Preferred Stock at least 20 days and no more than 60 days prior to the scheduled
Redemption Date, stating that it will redeem Preferred Stock as provided herein,
such notice to be addressed to each holder of Preferred Stock at the address as
it appears on the stock transfer books of the Corporation and to specify the
Redemption Date and the number of shares to be redeemed. In the case of a
redemption pursuant to Section 4(c), the Corporation shall, to the extent
practicable, give written notice to each holder of Preferred Stock at least 20
days and no more than 60 days prior to the Change of Control, stating that it
will redeem Preferred Stock as provided herein if the holders of the Preferred
Stock elect to have their Preferred Stock redeemed as provided herein, such
notice to be addressed to each holder of Preferred Stock at the address as it
appears on the stock transfer books of the Corporation and to specify the
Redemption Date and the number of shares to be redeemed. Any notice of
redemption by the Corporation under Section 4(b) or 4(c) may be contingent upon
a Change of Control. Each holder of outstanding shares of Preferred Stock may
elect to have its shares redeemed upon a Change of Control in accordance with
Section 4(c) above if the election of such holder is delivered to the
Corporation (and not revoked) in the 20 day period following the giving of the
notice by the Corporation described in the immediately preceding sentence. On or
after the Redemption Date, unless postponed or waived as provided below, each
holder of Preferred Stock shall surrender a certificate or certificates
representing the number of shares of the Preferred Stock to be redeemed as
stated in the notice provided by the Corporation. Notwithstanding the foregoing,
in the case of a redemption pursuant to Section 4(a) above, upon written request
from the Corporation, the holders of a Majority of the Preferred Stock to which
any Final Redemption Date applies shall have the right to postpone such Final
Redemption Date or waive (on a pro rata basis) the obligation of the
Corporation to redeem all or part of the Preferred Stock on such Final
Redemption Date, by written notice given to the Corporation.


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            (e) AVAILABLE FUNDS. For the purpose of determining whether funds
are legally available for a redemption of Preferred Stock as provided herein,
the Corporation shall value its assets in accordance with applicable law and
shall revalue its assets at a higher amount to the extent reasonable and
appropriate if permitted by such applicable law for such purpose. If on any
Redemption Date funds of the Corporation legally available therefor shall be
insufficient to redeem all the Preferred Stock required to be redeemed as
provided herein, funds to the extent legally available shall be used for such
purpose and the Corporation shall effect such redemption pro rata according to
the number of shares held by each holder of Preferred Stock. The redemption
requirements provided hereby shall be continuous, so that if on any Redemption
Date such requirements shall not be fully discharged, without further action by
any holder of Preferred Stock funds legally available shall be applied therefor
until such requirements are fully discharged.

      5.    VOTING; COMPANY SALE.

            (a) DIRECTORS. Subject to Section 8, the holders of the Preferred
Stock who are Kelso Parties or their Affiliates shall have the exclusive right,
voting together as a single class without regard to series, to elect two
directors of the Corporation as follows: (i) one director for so long as 5,000
or more shares of Preferred Stock are owned by the Kelso Parties or their
Affiliates and (ii) a second director for so long as 25,000 or more shares of
Preferred Stock are owned by the Kelso Parties or their Affiliates. The holders
of the Preferred Stock, voting together as a single class without regard to
series, shall cause the first and the second director, as applicable, to resign
from the Board of Directors if, subsequent to their respective appointments, the
number of shares of Preferred Stock owned by the Kelso Parties or their
Affiliates falls below 25,000 in the case of the second director, or 5,000 in
the case of the first director.

            (b) APPROVALS. Without the consent of the holders of a Majority of
the Preferred Stock, voting separately as a single class without regard to
series, in person or by proxy, either in writing without a meeting or at a
special or annual meeting of stockholders, the Corporation shall not, and shall
not permit any Subsidiary to:

            (i) alter or change the powers, rights or preferences of the
Preferred Stock; increase or decrease the number of authorized shares or the par
value of the Preferred Stock; reclassify any Junior Stock or Parity Stock into
Senior Stock; authorize, create or issue any class or series of Senior Stock
(including Acquired Senior Stock), or any securities directly or indirectly
convertible into or exchangeable for any Senior Stock; or amend or repeal any
provision of, or add any provision to, the Corporation's Certificate of
Incorporation or By-Laws in a manner that could reasonably be expected to affect
adversely the powers, rights or preferences of the Preferred Stock, PROVIDED,
HOWEVER, that the issuance of any Parity Stock or Junior Stock, without
otherwise altering


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or modifying the terms of the Preferred Stock, will not be deemed to affect
adversely the powers, rights or preferences of the Preferred Stock;

            (ii) except in connection with the Migration, apply any of the
Corporation's assets to the redemption, retirement, purchase, repurchase or
other acquisition, directly or indirectly, through subsidiaries or otherwise, of
any capital stock or Options or Convertible Securities in excess of $100,000 in
any 12 month period;

            (iii) create, incur, assume, guarantee or otherwise become directly
or indirectly liable for Indebtedness (including Acquired Indebtedness), after
the date hereof, other than Permitted Indebtedness, if at such time or as a
result thereof the Debt Leverage Ratio exceeds or would exceed 4.00:1; PROVIDED,
HOWEVER, from and after such time as consolidated EBITDA for the preceding four
fiscal quarters exceeds $75 million for at least two consecutive quarters, such
Debt Leverage Ratio shall automatically increase to 4.50:1;

            (iv) authorize, create, issue, assume, guarantee or otherwise become
directly or indirectly liable for or obligated in respect of Parity Stock
(including Acquired Parity Stock) or any securities directly or indirectly
convertible into or exchangeable for any Parity Stock, after the date hereof,
other than Permitted Parity Stock, if at such time or as a result thereof the
Preferred Leverage Ratio exceeds or would exceed 5.50:1; PROVIDED, HOWEVER, from
and after such time as consolidated EBITDA for the preceding four fiscal
quarters exceeds $75 million for at least two consecutive quarters, such
Preferred Leverage Ratio shall automatically increase to 6.50:1; PROVIDED,
FURTHER, that to the extent (i) EBITDA is being calculated on a pro forma basis
for a proposed acquisition for purposes of the immediately preceding proviso,
(ii) the Corporation can demonstrate that financial data is not reasonably
available and cannot reasonably be obtained for more than the preceding four
fiscal quarters with respect to the pro forma portion of such EBITDA, and (iii)
the requisite financial data is available for the preceding four fiscal quarters
to calculate the pro forma portion of such EBITDA (such four quarters of the pro
rata portion, the "APPLICABLE PRO FORMA EBITDA"), then the Applicable Pro Forma
EBITDA may be added to the EBITDA otherwise calculated for purposes of the
immediately preceding proviso and the test set forth in the immediately
preceding proviso shall be applied for one quarter rather than two consecutive
quarters;

            (v) enter into any transaction or series of related transactions
with any Affiliate of the Corporation other than a Wholly-Owned Subsidiary
involving payments by or to the Corporation or any of its Affiliates in excess
of $100,000 in any 12 month period, other than employment agreements, grants of
stock options or other equity compensation or other employee benefits, in each
case in the ordinary course of business, and other than the transactions
described on Schedule A hereto;


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            (vi) enter into any other line of business other than businesses
substantially similar or related to the Corporation's and its Subsidiaries'
existing businesses; or

            (vii) liquidate, dissolve or wind up, voluntarily or involuntarily,
or appoint a liquidator, trustee or receiver for, the Corporation.

            (c) COMPANY SALE. Subject to Section 8, if the Preferred Stock has
not been fully redeemed by the sixth anniversary of the Original Issue Date, in
order to generate the funds required to redeem the Preferred Stock, the holders
of a Majority of the Preferred Stock shall have the right to request that the
Board of Directors initiate a Sale Process. If a Company Sale has not occurred
between the Original Issue Date and the sixth anniversary of the Original Issue
Date, holders of a Majority of the Preferred Stock may, at any time following
such sixth anniversary of the Original Issue Date, notify the Corporation in
writing that they wish the Corporation to initiate a Sale Process (such notice,
a "SALE NOTICE"). After receipt of a Sale Notice, the Board of Directors and the
Corporation shall initiate a Sale Process as soon as practicable. The Board of
Directors and the Corporation shall, subject to applicable securities laws and
confidentiality obligations, consult regularly and in good faith with the Kelso
Parties regarding the status of the Sale Process, but the Kelso Parties shall
have no right to participate in or otherwise approve any aspect of the Sale
Process other than participating in the Sale Process as a potential purchaser to
the extent permitted by the Board of Directors. The Corporation shall use its
reasonable best efforts to consummate a Company Sale and redeem all outstanding
Preferred Stock pursuant to Section 4(b) by a date 8 months subsequent to the
date on which a Sale Notice was delivered to the Corporation (such subsequent
date, the "SALE DATE"). Holders of a Majority of the Preferred Stock may waive,
delay or extend the obligations set forth in this Section 5(c) in writing. The
Corporation shall not be required to consummate a Company Sale if and only to
the extent that, the Board of Directors of the Corporation determines in good
faith (after consultation with outside legal counsel) that consummation of a
Company Sale, in light of the circumstances existing at such time and the terms
of this Certificate of Designations, would be inconsistent with its fiduciary
duties under applicable law; PROVIDED, HOWEVER, that this sentence shall not be
deemed to limit in any way the Corporation's other obligations set forth in this
Section 5(c); PROVIDED, FURTHER, HOWEVER, that, for the avoidance of doubt, any
failure to consummate a Company Sale and redeem all outstanding Preferred Stock
in accordance with the terms of this Section 5(c) pursuant to the "fiduciary
out" set forth in this sentence or for any other reason shall constitute a
failure to comply with the Corporation's material obligations for purposes of
Section 5(d) and shall give rise to the payment obligations set forth therein.

            (d) DAMAGES.

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            (i) Notwithstanding anything herein to the contrary (including,
without limitation, Section 4(b)), if the Corporation does not for any reason
comply with any of its material obligations set forth in Section 5(c), upon
written notice from holders of a Majority of the Preferred Stock, the
Corporation shall be obligated to pay, and all outstanding Preferred Stock shall
become due and payable on the first anniversary of the Sale Date (the "SALE
REDEMPTION DATE") for, an amount equal to the Liquidation Preference per share
as of the date of payment multiplied by 1.20. Such amount shall become due and
payable upon delivery of such notice by wire transfer of immediately available
funds to accounts indicated in written instructions from the respective holders
of the Preferred Stock.

            (ii) Notwithstanding anything herein to the contrary (including,
without limitation, Section 4(b)), if the Corporation does not for any reason
comply with any of its material obligations set forth in Sections 5(a) or (b)
and does not cure any such failure to comply within 30 days of delivery of
written notice from holders of a Majority of the Preferred Stock, the
Liquidation Preference per share shall be increased by an amount equal to the
Liquidation Preference per share immediately prior to such adjustment multiplied
by .20 (the amount of such increase in the Liquidation Preference, the
"INCREMENTAL AMOUNT"). For the avoidance of doubt, the Corporation may redeem
any shares of Preferred Stock pursuant to Section 4(b) hereof at any time prior
to the Sale Redemption Date without any premium thereon except to the extent set
forth in Section 4(b).

            (e) COMPLIANCE CERTIFICATES; NOTICE OF DEFAULT. Within 45 days
following the end of each fiscal year (and if the Corporation has incurred or
otherwise become obligated with respect to any Indebtedness other than
borrowings in the ordinary course of business consistent with past practice
under a revolving credit facility or issued or otherwise become obligated with
respect to any Parity Stock during any fiscal quarter, within 45 days following
the end of such fiscal quarter), the Corporation shall deliver to the holders of
a Majority of the Preferred Stock a certificate, signed by the Chief Financial
Officer and the principal accounting officer of the Corporation, in form
reasonably satisfactory to the holders of a Majority of the Preferred Stock,
stating that since the Original Issue Date there has been no breach or default
of, or failure to perform any of the Corporation's obligations under, this
Certificate of Designations, together with all calculations, in reasonable
detail, necessary to make such determination (including, without limitation,
calculations regarding compliance with Sections 5(b)(iii) and (iv)). The
Corporation shall deliver to the holders of a Majority of the Preferred Stock
written notice of any breach or default of, or failure to perform any of the
Corporation's obligations under, this Certificate of Designations within 3
business days of the date on which an officer of the Corporation obtains
knowledge thereof.


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            (f) MIGRATION FAILURE. Notwithstanding anything herein to the
contrary, if the Migration has not been consummated on or before the Migration
Outside Date (as defined in the Subscription Agreement), other than as a result
of an Excusing Event (as defined in the Subscription Agreement), the dividend
rate applicable to the Preferred Stock then in effect shall be increased by
1.00% to 18.75% from and after such date, and shall thereafter be similarly
increased by an additional 1.00% on the last day of each month thereafter during
which such Migration shall not have been consummated; PROVIDED, HOWEVER, that in
no event shall the dividend rate be increased by more than 12%; provided,
further, that the dividend rate shall be reduced to 17.75% for all periods from
and after the date of reduction upon the consummation of the Migration. For the
avoidance of doubt, any dividends accrued during any period that the dividend
rate shall have been increased pursuant to the immediately preceding sentence
shall not thereafter be reduced regardless of whether the dividend rate shall be
reduced pursuant to the last proviso of the immediately preceding sentence. A
Majority of the Preferred Stock may waive, delay or extend the obligations set
forth in this Section 5(f) in writing.

      6.    NO REISSUANCE OF PREFERRED STOCK. No share or shares of Preferred
Stock acquired by the Corporation by reason of redemption, purchase, conversion
or otherwise shall be reissued, and, upon such event, all such shares shall
resume the status of authorized but unissued shares of preferred stock.

      7.    REGISTER. The Corporation shall keep a register of the holders of
shares of Preferred Stock.

      8.    TRANSFER. The Kelso Parties shall not transfer any shares of
Preferred Stock other than to an Affiliate of a Kelso Party or to the
Corporation: (i) unless the Corporation provides its prior written consent, not
to be unreasonably withheld or delayed; and (ii) until the third anniversary of
the Original Issue Date, if, as a result of such transfer, the Kelso Parties
would hold in the aggregate less than a Majority of the Preferred Stock,
PROVIDED, HOWEVER, that the Corporation may waive the transfer restriction in
this clause (ii) in writing. No holder of Preferred Stock other than the Kelso
Parties shall have the right, unless the Corporation otherwise agrees in
writing, to appoint directors pursuant to Section 5(a) or to participate in any
request that the Corporation initiate a Sale Process pursuant to Section 5(c);
PROVIDED, HOWEVER, that if any such holder of Preferred Stock that is not a
Kelso Party is not entitled to the foregoing right to appoint directors pursuant
to this sentence, the shares of Preferred Stock held by such holder shall be
entitled to vote on all matters together with the Common Stock on the basis of
one vote per share.

      9.    AMENDMENT AND WAIVER. Upon written request of the Corporation, the
holders of a Majority of the Preferred Stock in their sole discretion may amend,
waive, delay or extend in writing any provision of this Certificate of
Designations to the extent


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permitted by applicable law. The foregoing rights to amend, waive, delay or
extend shall be in addition to any such rights otherwise set forth in this
Certificate of Designations or pursuant to applicable law.

      10.   MERGERS, CONSOLIDATIONS. In case of any consolidation or merger of
the Corporation with or into another entity, the Corporation shall require the
surviving entity to assume all of the agreements and obligations of the
Corporation hereunder. This Section 10 shall similarly apply to successive
consolidations or mergers.

      11.   DEFINITIONS. As used in this Certificate of Designations, the
following terms shall have the following meanings (with terms defined in the
singular having comparable meanings when used in the plural and vice versa),
unless the context otherwise requires:


      "ACQUIRED INDEBTEDNESS" means Indebtedness of a Person (i) existing at the
time such Person becomes a Subsidiary, (ii) assumed in connection with the
acquisition of assets from such Person or (iii) existing at the time such Person
is merged, consolidated, amalgamated or otherwise combined with the Corporation.
Acquired Indebtedness shall be deemed to be incurred on the date of the related
acquisition of assets from any Person, the date the acquired Person becomes a
Subsidiary or the date of any such merger, consolidation, amalgamation or other
combination. Acquired Indebtedness shall exclude Indebtedness assumed by the
Corporation or any Subsidiary in connection with and as a direct result of the
Migration.


      "ACQUIRED PARITY STOCK" means Parity Stock (i) existing at the time any
Person becomes a Subsidiary or (ii) existing at the time any Person is merged,
consolidated, amalgamated or otherwise combined with the Corporation. Acquired
Parity Stock shall be deemed to be issued on the date the acquired Person
becomes a Subsidiary or the date of any such merger, consolidation, amalgamation
or other combination.


      "ACQUIRED SENIOR STOCK" means Senior Stock (i) existing at the time any
Person becomes a Subsidiary or (ii) existing at the time any Person is merged,
consolidated, amalgamated or otherwise combined with the Corporation. Acquired
Senior Stock shall be deemed to be issued on the date the acquired Person
becomes a Subsidiary or the date of any such merger, consolidation, amalgamation
or other combination.


      "AFFILIATE" of a Person means a Person that directly or indirectly through
one or more intermediaries, controls, is controlled by, or is under common
control with, the first Person.


      "APPLICABLE AMOUNT" means $3.93; PROVIDED, HOWEVER, that if the
Corporation subdivides, combines or reclassifies any class of Common Stock or
undertakes any


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similar event with respect to any Common Stock, the Applicable Amount will be
proportionately reduced or increased or adjusted on a proportionate basis, it
being understood that the intent of any such adjustment would be to preserve the
relative per share equivalency of the shares of Common Stock and Preferred Stock
that exists on the date hereof for purposes of computing the dividend rights
under Section 2 hereof and the liquidation rights under Section 3 hereof.


      "AVAILABLE AMOUNT" means (i) up to and including December 31, 2003 (unless
extended pursuant to Section 9), the U.S. Dollar Equivalent of C$30,000,000 by
which the commitments under the Credit Agreement may be increased, less (a) any
portion of such right to increase the commitments that is irrevocably cancelled
or expired, less (b) any portion of such right to increase the commitments that
becomes committed, and (ii) thereafter, $0.


      "BANK CREDIT FACILITY" means a reasonably customary senior bank credit
facility (i) under which all of the lenders share pro rata in a first priority
lien in substantially all of the assets of the Corporation and its Subsidiaries,
(ii) which is comprised of a revolving credit facility, an amortizing term loan,
additional borrowings under a customary revolving credit facility (including
under letter of credit facilities, swing line facilities and bankers acceptance
facilities) and any combination of the foregoing, and (iii) which does not
include, without limitation, any Securities Offering; PROVIDED, HOWEVER, that
(a) participation by one or more Persons that are not banks shall not by itself
prevent any such facility form being a Bank Credit Facility and (b) if customary
bank promissory notes are issued to the lenders under such facility such
issuance shall not by itself prevent such facility from being a Bank Credit
Facility.


      "CHANGE OF CONTROL" means any of the following events: (i) the merger or
consolidation of the Corporation with or into another Person or the merger or
consolidation of another Person with or into the Corporation, or the sale of all
or substantially all of the Corporation's assets to another Person, other than a
transaction following which (A) in the case of a merger or consolidation,
holders of the securities that represented 100% of the combined voting power of
the outstanding voting securities of the Corporation immediately prior to such
transaction and any series of related transactions own at least 51% of the
voting power of the outstanding securities generally entitled to vote of the
surviving person in such merger or consolidation immediately after such
transaction and any series of related transactions or (B) in the case of a sale
of assets transaction, the transferee Person becomes a Wholly-Owned Subsidiary
of either the Corporation, a Wholly-Owned Subsidiary of the Corporation, or a
combination of the Corporation and its Wholly-Owned Subsidiaries; (ii) the
acquisition by any Person or group of Persons, acting jointly or otherwise in
concert, other than the Permitted Holders, of legal or beneficial ownership of
30% or more of the outstanding shares of Common Stock of the Corporation; or
(iii) during any 12-month period, individuals who at the


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beginning of such period constituted the Board of Directors, including directors
appointed pursuant to Section 5(a), (together with any new directors whose
election by the Board of Directors or whose nominations for election by the
Corporation's stockholders were approved by a vote of a majority of the
directors who either were directors at the beginning of such period or whose
election or nomination was previously so approved) cease for any reason to
constitute a majority of the Board of Directors. Notwithstanding the foregoing,
the Migration and the transactions entered into in connection therewith shall
not constitute or give rise to a Change of Control.


      "COMMITTED AMOUNT" means $76,500,000, increased by any portion of the
Available Amount that becomes committed under the Credit Agreement, as such
amount may be reduced from time to time as provided in clause (ii) of the
definition of Permitted Indebtedness.


      "COMMON STOCK" means the common stock, par value $0.01 per share, of the
Corporation together with any other class or series of common stock, whether
voting or non-voting, of the Corporation issued after the Original Issue Date.


      "COMPANY SALE" means a sale, conveyance or other disposition of the
Corporation, whether by merger, consolidation, sale of all or substantially all
of the Corporation's assets or sale of capital stock, including any issuance or
transfer of capital stock of the Corporation to any Person. Notwithstanding the
foregoing, the Migration and the transactions entered into in connection
therewith shall not constitute or give rise to a Company Sale.


      "CONVERTIBLE SECURITIES" means any evidences of indebtedness, shares of
capital stock (other than Common Stock) or other securities convertible into or
exchangeable for, directly or indirectly, shares of Common Stock.


      "CREDIT AGREEMENT" means that certain Credit Agreement, dated as of June
27, 2002 and as amended from time to time, between Capital Environmental
Resource, Inc. and Bank of America, N.A. (Canada Branch), as Administrative
Agent, Canadian Imperial Bank of Commerce, as Managing Agent, and various
Lenders (as defined therein).


      "DEBT LEVERAGE RATIO" means, on any day, the ratio of (a) Indebtedness of
the Corporation and its Subsidiaries on a consolidated basis as of the date of
determination, to (b) EBITDA of the Corporation and its Subsidiaries on a
consolidated basis for the preceding four fiscal quarters most recently ended.
For the avoidance of doubt, Permitted Indebtedness shall not be excluded from
Indebtedness for purposes of calculating this Debt Leverage Ratio or otherwise.


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      "DISQUALIFIED STOCK" means any class of capital stock or series of
preferred stock that by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable, in either case at the option of
the holder thereof) or otherwise (a) matures or is mandatorily redeemable
pursuant to a sinking fund obligation or otherwise, (b) is or may become
redeemable or repurchaseable at the option of the holder thereof, in whole or in
part (other than as a result of a Change of Control), or (c) is convertible or
exchangeable at the option of the holder thereof for Indebtedness or
Disqualified Stock, on or prior to, in the case of clause (a), (b) or (c), the
Final Redemption Date.


      "EBITDA" means, for any period, an amount calculated on a consolidated
basis for the Corporation and its Subsidiaries, equal to (a) the sum of net
income for such period determined in accordance with GAAP, plus the following to
the extent deducted in computing net income for such period: (i) the provision
for taxes based on income or profits or utilized in computing net loss, (ii)
interest expense, (iii) depreciation, (iv) amortization of intangibles, (v) any
extraordinary non-cash loss (vi) any loss in respect of foreign currency, (vii)
any loss from the sale of fixed assets and (vii) any non-cash charge for
management compensation expense, MINUS (b) (i) any extraordinary non-cash gain
(ii) any gain in respect of foreign currency, (iii) any gain from the sale of
fixed assets and (iv) any non-cash gain for management compensation expense, in
each case to the extent added in computing net income for such period. EBITDA
shall be calculated on a pro forma basis for acquisitions and divestitures in
accordance with GAAP and Regulation S-X promulgated by the Securities and
Exchange Commission, including cost savings to the extent permitted to be
included by GAAP and Regulation S-X. From the Original Issue Date until the date
12 months following the commencement of operations of the Omni Landfill, EBITDA
shall be increased by the Omni Landfill Adjustment.


      "GAAP" means U.S. generally accepted accounting principles
applied on a consistent basis.


      "INDEBTEDNESS" means, with respect to any Person, at any date, without
duplication, (i) all obligations of such Person for borrowed money, including,
without limitation, all principal, interest, premiums, fees, expenses,
overdrafts and penalties with respect thereto, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of any
property or services, except trade payables incurred in the ordinary course of
business, (iv) all obligations of such Person to reimburse any bank or other
Person in respect of amounts paid under a letter of credit or similar
instrument, (v) all obligations of such Person as lessee which are required to
be capitalized in accordance with GAAP and (vi) all Indebtedness of any other
Person of the type referred to in clauses (i) to (v) above directly or
indirectly guaranteed by such Person or secured by any assets of such Person.
Notwithstanding anything herein to the contrary, Indebtedness shall not include
(i) the Preferred Stock or any Junior Stock, Parity Stock or Senior Stock,


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(ii) Indebtedness of the Corporation to Wholly-Owned Subsidiaries of the
Corporation and Indebtedness of Wholly-Owned Subsidiaries of the Corporation to
the Corporation or to other Wholly-Owned Subsidiaries of the Corporation, (iii)
the obligations of the Corporation or any Subsidiary in respect of undrawn
letters of credit supporting post-closure obligations, or (iv) undrawn and
unfunded surety bonds or performance bonds, undrawn letters of credit supporting
such surety bonds or performance bonds and undrawn letters of credit supporting
municipal service contracts. In addition to the forgoing, but without
duplication, Indebtedness shall include for all purposes both the Available
Amount and the Committed Amount, whether or not such amounts are outstanding.


      "ISSUE DATE" means (i) the Original Issue Date for shares of Preferred
Stock that are issued on such date, and (ii) such later date on which shares of
Preferred Stock are issued after the Original Issue Date.


      "JUNIOR STOCK" means any class of capital stock or series of preferred
stock, whether presently outstanding or hereafter issued, other than Parity
Stock or Senior Stock.


      "KELSO PARTIES" means KIA VI, KEP VI and their respective Affiliates.


      "KEP VI" means KEP VI, LLC, a Delaware limited liability company.


      "KIA VI" means Kelso Investment Associates VI, L.P., a Delaware limited
partnership.


      "LIQUIDATION PREFERENCE" of any share of Preferred Stock means the sum of
$1,000 (as such amount shall be appropriately adjusted for any stock dividend,
stock split, reclassification, recapitalization, consolidation or similar event
affecting such Preferred Stock) plus the amount of any accrued but unpaid
dividends on such share as of any date of determination.


      "MAJORITY OF THE PREFERRED STOCK" means more than 50% of the outstanding
shares of Preferred Stock.


      "MIGRATION" shall have the meaning given to such term in the
Subscription Agreement.


      "OMNI EBITDA" means the aggregate EBITDA generated by the operation of the
Omni Landfill since the date of commencement of operations at the Omni Landfill,
as determined by management of the Corporation and reasonably acceptable to
holders of a Majority of the Preferred Stock.


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      "OMNI LANDFILL" shall have the meaning given to such term in the
Subscription Agreement.


      "OMNI LANDFILL ADJUSTMENT" means an amount equal to the difference between
(A) the Omni EBITDA, multiplied by a fraction equal to (i) 365 divided by (ii)
the number of days that at any relevant date of determination will have elapsed
since the Omni Landfill commenced operations, less (B) the Omni EBITDA.
Notwithstanding the foregoing, prior to March 31, 2004, for purposes of
determining whether the Corporation is permitted to issue Parity Stock without
obtaining the approval required pursuant to Section 5(b)(iv), Omni Landfill
Adjustment means the greater of (i) the amount calculated pursuant to the first
sentence of this definition, and (ii) $12,000,000 or, if the transaction
specified in that certain letter, dated the Original Issue Date, from the
Corporation to KIA VI and KEP VI and referencing this defined term has been
consummated at such time, $17,000,000.


      "OPTIONS" means rights, options or warrants to subscribe for, purchase or
otherwise acquire, directly or indirectly, shares of Common Stock, including,
without limitation, Convertible Securities.


      "ORIGINAL ISSUE DATE" means the first date on which any share of Preferred
Stock is issued by the Corporation under this Certificate of Designations.


      "PARITY STOCK" means any class of capital stock or series of preferred
stock hereafter created by the Board of Directors (i) that is not Disqualified
Stock and (ii) the terms of which expressly provide that such class or series
shall rank on a parity with the Preferred Stock as to the payment of dividends
or the distribution of assets.


      "PARITY STOCK OBLIGATIONS" means the aggregate liquidation preference plus
all accrued and unpaid dividends, interest and other obligations of the
Corporation and its Subsidiaries pursuant to the terms of any Parity Stock.


      "PERMITTED HOLDERS" means (a) David Sutherland-Yoest (in this definition,
the "PRIMARY PERMITTED HOLDER"); (b) the spouse of the Primary Permitted Holder
(including any widow or widower); (c) any lineal descendant of the Primary
Permitted Holder (treating for this purpose, any legally adopted descendant as a
lineal descendant); (d) the estate of any Person listed in clauses (a) to (c);
(e) any trust primarily for the benefit of the lineal descendants of the Primary
Permitted Holder, spouses of such lineal descendants, the Primary Permitted
Holder himself, or his spouse; (f) the Kelso Parties and their Affiliates; and
(g) any and all corporations during such time as they are directly or indirectly
controlled by any one or more of the foregoing.


<Page>


      "PERMITTED INDEBTEDNESS" means: (i) Indebtedness incurred by the
Corporation and its Subsidiaries under the Credit Agreement (such agreement, as
amended to the date hereof, and as the same may be amended, restated,
supplemented or otherwise modified from time to time); PROVIDED, HOWEVER, that
if the Credit Agreement is amended, restated, supplemented or otherwise modified
in a manner such that it no longer meets the definition of a Bank Credit
Facility, such amendment, restatement, supplement or other modification shall be
considered a refinancing of the Credit Agreement for purposes of subsection (ii)
of this definition and the proviso therein; (ii) Indebtedness to the extent
incurred by the Corporation and its Subsidiaries to refinance and replace the
Credit Agreement; PROVIDED, HOWEVER, that, to the extent any Bank Credit
Facility (including, without limitation, the Credit Agreement) is replaced by
Indebtedness that is not incurred under a Bank Credit Facility ("NON-BANK
INDEBTEDNESS"), the amount of such Non-Bank Indebtedness shall, for purposes of
its initial incurrence, be considered Permitted Indebtedness, but any
refinancing of such Non-Bank Indebtedness (and any refinancing thereof) shall
not thereafter be considered Permitted Indebtedness under this clause (ii) (and
the Committed Amount shall thereafter be reduced to the extent such Non-Bank
Indebtedness is incurred to replace or refinance Indebtedness under a Bank
Credit Facility); and (iii) additional Indebtedness of the Company and its
Subsidiaries in an aggregate principal amount not to exceed $5.0 million at any
one time outstanding. Notwithstanding anything herein to the contrary, the
amount of Permitted Indebtedness under clauses (i) and (ii) shall not exceed, in
the aggregate, the Committed Amount.


      "PERMITTED PARITY STOCK" means Parity Stock to the extent applied to
redeem the Preferred Stock.


      "PERSON" means an individual, partnership, limited partnership, limited
liability company, unlimited liability company, corporation, trust,
unincorporated organization, government, governmental agency or governmental
subdivision or similar entity.


      "PREFERRED LEVERAGE RATIO" means, on any day, the ratio of (a)
Indebtedness plus Senior Stock Obligations plus Parity Stock Obligations of the
Corporation and its Subsidiaries on a consolidated basis as of the date of
determination, to (b) EBITDA of the Corporation and its Subsidiaries on a
consolidated basis for the preceding four fiscal quarters most recently ended.
For the avoidance of doubt, Permitted Indebtedness and Permitted Parity Stock
shall not be excluded from Indebtedness and Parity Stock Obligations,
respectively, for purposes of calculating this Preferred Leverage Ratio or
otherwise.


      "REDEMPTION DATE" means, with respect to any shares of Preferred Stock,
the date on which the Corporation redeems such shares of Preferred Stock.


<Page>



      "SALE PROCESS" means a process reasonably designed to solicit for the
benefit of the Corporation and all of its stockholders offers from third parties
who wish to acquire the Corporation or its assets in a transaction that would
constitute a Company Sale, it being understood that, notwithstanding anything
herein to the contrary, such process shall include the engagement of investment
bankers or other financial advisors and the provision of access to personnel and
information in a manner that is customary for such transactions, unless a
Majority of the Preferred Stock otherwise agrees.


      "SECURITIES OFFERING" means any Indebtedness consisting of bonds,
debentures, notes (other than customary bank promissory notes under a Bank
Credit Facility) or other similar debt securities issued in a public offering or
a private placement.


      "SENIOR STOCK" means any class of capital stock or series of preferred
stock hereafter created by the Board of Directors (i) that is Disqualified Stock
or (ii) the terms of which expressly provide that such class or series shall
rank senior to the Preferred Stock as to the payment of dividends or the
distribution of assets.


      "SENIOR STOCK OBLIGATIONS" means the aggregate liquidation preference plus
all accrued and unpaid dividends, interest and other obligations of the
Corporation and its Subsidiaries pursuant to the terms of any Senior Stock.


      "SUBSCRIPTION AGREEMENT" means the Preferred Subscription Agreement, dated
as of May 6, 2003, among the Corporation, Capital Environmental Resource Inc.,
KIA VI and KEP VI.


      "SUBSIDIARY" means (i) a corporation of which 50% or more of the combined
voting power of the outstanding voting capital stock is owned, directly or
indirectly, by the Corporation, by one or more Subsidiaries, or by the
Corporation and one or more Subsidiaries, (ii) a partnership of which the
Corporation, one or more Subsidiaries, or the Corporation and one or more
Subsidiaries, directly or indirectly, is the general partner and/or has the
power to direct the policies, management and affairs of such partnership or
(iii) any other Person in which the Corporation, one or more Subsidiaries, or
the Corporation and one or more Subsidiaries, directly or indirectly, has at
least a 50% interest and/or power to direct the policies, management and affairs
thereof.


      "U.S. DOLLAR EQUIVALENT" means, as of the date of any determination, the
equivalent amount in U.S. Dollars based on the rate quoted by Bank of America or
the agent bank under a Bank Credit Facility of the Corporation at the time for
the purchase of U.S. Dollars in accordance with its customary procedures at
10:30 a.m. (New York time) on the date of determination.


<Page>



      "WHOLLY-OWNED SUBSIDIARY" of a Person means any Subsidiary of such Person
of which securities or other ownership interests representing 100% of the equity
and 100% of the ordinary voting power (or 100% of the general partnership or
membership interests) are, at the time any determination is being made, owned by
such Person or one or more Wholly-Owned Subsidiaries of such Person or by such
Person and one or more Wholly-Owned Subsidiaries of such Person.

      12.   DISTRIBUTION UPON INSOLVENCY. Prior to the Migration, in the event
of (i) any distribution to the creditors of the Corporation (a) in a liquidation
or dissolution of the Corporation or any of its Subsidiaries, (b) in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Corporation or any of its Subsidiaries or its property, (c) upon
an assignment for the benefit of creditors or (d) upon any marshaling of the
assets of any such entity (each, a "BANKRUPTCY DISTRIBUTION") and (ii) the
invalidity of any guarantee (or any lien securing such guarantee) from the
Corporation or any Subsidiary to holders of Indebtedness under the Credit
Agreement (other than as amended to include the Corporation or any Subsidiary
party to any such guarantee as a borrower) or under any refinancing or
replacement thereof that constitutes a Bank Credit Facility that does not
include the Corporation or any Subsidiary party to any such guarantee as a
borrower (a "SENIOR CREDIT AGREEMENT"), then the holders of Indebtedness under
any Senior Credit Agreement, shall be entitled to receive payment in full in
cash of all such Indebtedness before the holders of the Preferred Stock and,
until such Indebtedness is paid in full in cash, any Bankruptcy Distribution to
which the holders of Preferred Stock would be entitled, but for the provisions
of this Section 12, shall be made to the holders of such Indebtedness. In the
event any holder of Preferred Stock receives any Bankruptcy Distribution with
respect to the Preferred Stock in contravention of the immediately preceding
sentence of this section, such Bankruptcy Distribution shall be held in trust
for the benefit of, and shall be paid forthwith over and delivered, to the
holders of Indebtedness under such Senior Credit Agreement for application to
such Indebtedness. The provisions of this Section 12 shall not be amended or
modified without the prior written consent of the administrative agent under
such Senior Credit Agreement who shall be entitled to enforce the provisions of
this section directly against the holders of the Preferred Stock.
Notwithstanding anything herein to the contrary, the administrative agent and
the holders of Indebtedness under any Senior Credit Agreement shall take
reasonable efforts to enforce their rights and collect their Indebtedness
against Capital Environmental Resources Inc. and each of its Subsidiaries and
any other borrower under any such Senior Credit Agreement prior to or
simultaneously with their enforcing the rights set forth in this Section 12
against the holders of the Preferred Stock. Each holder of Preferred Stock
shall, by accepting ownership of such Preferred Stock, agree to be bound by the
provisions of this Section 12.


      REMAINDER OF PAGE INTENTIONALLY LEFT BLANK



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IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designations
to be signed by the undersigned this 6th day of May, 2003.

                                     WASTE SERVICES, INC.



                                     By: /s/ Thomas E. Durkin
                                        ---------------------------------------
                                        Name:  Thomas E. Durkin III
                                        Title: Secretary