CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PHILIPP BROTHERS CHEMICALS, INC.
(Under Section 805 of the Business Corporation Law)
The undersigned, being respectively the President and Secretary of
the below-named corporation, hereby certify as follows:
FIRST: The name of the Corporation is Philipp Brothers Chemicals,
Inc. (the "Corporation").
SECOND: The original certificate of incorporation of the Corporation
was filed by the Department of State on May 11, 1946 (such certificate of
incorporation, as amended and in effect thereafter, the "Certificate of
Incorporation").
THIRD: The Certificate of Incorporation is hereby amended to provide
that 25,000 shares of the Corporation's authorized and unissued Preferred Shares
(as defined in the Certificate of Incorporation) shall be designated as Series B
Redeemable Participating Preferred Shares (hereinafter referred to as the
"Series B Preferred Shares"), which shall have the following relative rights,
preferences and limitations, as fixed by the Corporation's Board of Directors
pursuant to authority granted to it under the Certificate of Incorporation and
as permitted by Section 502 of the Business Corporation Law:
1. Rank. (a) For purposes of this Certificate of
Amendment, the following capitalized terms shall have the following
meanings.
(i) "Senior Securities" shall mean, with respect to a
class or series of Preferred Stock, all equity securities issued by
the Corporation the terms of which specifically provide that such
equity securities rank senior in preference or priority to such
class or series of Preferred Stock with respect to dividend rights
or rights upon liquidation, dissolution or winding up of the affairs
of the Corporation.
(ii) "Parity Securities" shall mean, with respect to a
class or series of Preferred Stock, all equity securities issued by
the Corporation the terms of which specifically provide that such
equity securities rank on a parity, without preference or priority,
with such class or series of Preferred Stock with respect to
dividend rights or rights upon liquidation, dissolution or winding
up of the affairs of the Corporation, whether or not the dividend
rates, dividend payment dates or redemption or liquidation prices
per share or sinking fund provision, if any, of such equity
securities be different from those of such class or series of
Preferred Stock.
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(iii) "Junior Securities" shall mean, with respect to a
class or series of Preferred Stock, all equity securities issued by
the Corporation ranking junior in preference or priority to such
class or series of Preferred Stock with respect to dividend rights
or rights upon liquidation, dissolution or winding up of the affairs
of the Corporation, including but not limited to all Common Shares
(as defined in the Certificate of Incorporation) of the Corporation.
(b) The Series B Preferred Shares shall rank senior to
all Junior Securities, on a parity with all Parity Securities, and
junior to all Senior Securities, in each case with respect to
dividend rights or rights upon liquidation, dissolution or winding
up of the affairs of the Corporation; provided that (i) the Series B
Preferred Shares shall rank senior to the Series A Preferred Shares
(as defined in the Certificate of Incorporation) with respect to
dividend rights and on a parity with the Series A Preferred Shares
with respect to rights upon liquidation, dissolution or winding up
of the Corporation and (ii) the Series B Preferred Shares shall rank
on a parity with the Series C Preferred Shares with respect to
dividend rights and rights upon liquidation, dissolution or winding
up of the Corporation.
2. Dividends. (a) The holders of issued and outstanding
Series B Preferred Shares shall be entitled to receive, when, as and
if declared by the Board of Directors, cash dividends at an annual
rate equal to 15% of the Series B Liquidation Preference (as defined
below) (the "Series B Base Dividend"). In addition, the holders of
issued and outstanding Series B Preferred Shares shall be entitled
to participate with the Class A Common Shares (as defined in the
Certificate of Incorporation) and to receive, before any dividends
(whether in cash or in kind) are paid upon or set aside for the
Class A Common Shares, the same dividends (whether in cash or in
kind), as are distributed in respect of each Class A Common Share
(the "Series B Participating Dividend"). One Series B Preferred
Share shall be treated for purposes of such participation as being
equal to 0.5 (the "Series B Participation Number") shares of Class A
Common Shares. Holders of Series B Preferred Shares shall not be
entitled to any dividend, whether payable in cash or in kind, in
excess of full cumulative Series B Base Dividends and Series B
Participating Dividends, as specifically provided in this Article
THIRD. Series B Participation Dividends shall be paid at the same
time as and when dividends on the Class A Common Shares are paid to
holders of Class A Common Shares.
(b) Series B Base Dividends shall accrue on a daily
basis, cumulative from the date of issuance, and shall be payable
semi-annually in arrears on the last day of each June and December,
or, if such date is not a business day, the succeeding business day
(each, a "Series B Base Dividend Payment Date"). Series B Base
Dividends shall be computed on the basis of a 360-day year
consisting of twelve 30-day months. Series B Base Dividends shall
accrue and cumulate whether or not the Corporation has earnings or
profits, whether or not there are funds legally available for the
payment of dividends and whether or not dividends are declared.
Series B Base Dividends shall be paid to the holders of record of
Series B Preferred Shares as they appear on the records of the
Corporation at the close of business on the 15th day of the calendar
month in which the applicable Series B Base Dividend Payment Date
falls or on such other date designated
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by the Board of Directors for the payment of Series B Base Dividends
that is not more than 30 nor less than 10 days prior to such Series
B Dividend Payment Date. Any payment of a Series B Base Dividend
shall first be credited against the earliest accumulated but unpaid
Series B Base Dividend due with respect to such share that remains
payable.
(c) So long as any Series B Preferred Share is
outstanding, no dividend (other than a dividend in Common Shares of
the Corporation) shall be declared or paid or set aside for payment
or other distribution declared or made upon any Junior Securities of
any kind, nor shall any Junior Securities of any kind be redeemed,
purchased or otherwise acquired for any consideration (or any moneys
be paid to or made available for a sinking fund for the redemption
of any shares of any such securities) by the Corporation (except by
conversion into or exchange for other Junior Securities), unless, in
each case, full cumulative dividends on all the Series B Preferred
Shares have been or are contemporaneously declared and paid or are
declared and a sum sufficient for the payment thereof is set apart
for such payment for all past dividend periods and the then current
dividend period. If dividends are not paid in full or a sum
sufficient for such full payment is not so set apart upon the Series
B Preferred Shares, all dividends declared upon the Series B
Preferred Shares and any series of Parity Securities with respect to
dividends shall be declared pro rata so that the amount of dividends
declared per share of the Series B Preferred Shares and such series
of Parity Securities with respect to dividends shall in all cases
bear to each other the same ratio that accrued and unpaid dividends
per share on the Series B Preferred Shares and such series of Parity
Securities with respect to dividends bear to each other.
Notwithstanding anything to the contrary in this Section 2(c),
Common Stock of the Corporation may be repurchased by the
Corporation as required by the Shareholders Agreement dated December
29, 1987, by and between the Corporation, Charles H. Bendheim, Jack
C. Bendheim and Marvin S. Sussman (the "Sussman Shareholders
Agreement"), as amended and in effect on the date of original
issuance of the Series B Preferred Shares, and as thereafter
amended, except for any amendment subsequent to the date of original
issuance of the Series B Preferred Shares which causes the terms of
such agreement to be less favorable in any respect to the
Corporation or the holders of the Series B Preferred Shares.
(d) If the Corporation subdivides or splits the
outstanding Class A Common Shares into a greater number of shares or
combines the outstanding Class A Common Shares into a smaller number
of shares, then the Series B Participation Number shall be adjusted,
effective immediately after the relevant effective date, so as to
represent the number of Class A Common Shares of the Corporation
which would be represented by the then applicable Series B
Participation Number upon the effective date of the subdivision,
split or combination. As soon as practicable, the Corporation shall
deliver by first class mail, postage prepaid, to each holder of
Series B Preferred Shares a notice, certified as true and correct by
an authorized person of the Corporation, stating the Series B
Participation Number after such adjustment, a brief statement of the
facts requiring such adjustment and the effective date of such
adjusted Series B Participation
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Number; provided that the failure of the Corporation to give such
notice shall not invalidate any corporate action by the Corporation.
3. Redemption.
(a) Optional Redemption. (i) During the period beginning
90 days before and ending 90 days after each anniversary of the date
of original issuance of the Series B Preferred Shares (the "Series B
Anniversary Period"), but only once per Series B Anniversary Period,
the Corporation may redeem all or part of the issued and outstanding
Series B Preferred Shares by payment in cash for each share of
Series B Preferred Share redeemed in an amount equal to the Series B
Liquidation Preference; provided, however, that if all Series C
Preferred Shares are not redeemed concurrently with the Series B
Preferred Shares during a Series B Anniversary Period, then, in lieu
of the foregoing, the amount to be paid in cash by the Corporation
in this Section 3(a)(i) in respect of Series B Preferred Shares to
be redeemed shall be an amount equal to (A) the Series B Liquidation
Preference, plus (B) an amount so that, combined with all other
payments made on the Series B Preferred Shares to be redeemed, a
holder of Series B Preferred Shares will have received an internal
rate of return of 20% on the purchase price of the Series B
Preferred Shares from the date of issuance to the date fixed for
redemption. Notwithstanding anything to the contrary, the Series B
Preferred Shares may be redeemed in part during a Series B
Anniversary Period only if the number of shares of Series B
Preferred Shares to be redeemed during such Series B Anniversary
Period is equal to or greater than 50% of the number of shares of
Series B Preferred Shares issued and outstanding on the first day of
the first Series B Anniversary Period, as adjusted for stock
dividends, subdivisions, splits, combinations or similar
transactions thereof.
(ii) During each period that is not a Series B
Anniversary Period (a "Non-Series B Anniversary Period"), but only
once per Non-Series B Anniversary Period, the Corporation may redeem
all or part of the issued and outstanding Series B Preferred Shares
by payment in cash for each share of Series B Preferred Share
redeemed in an amount equal to (A) the Series B Liquidation
Preference, plus (B) an amount equal to the dividends that would
have accrued after such redemption if such Series B Preferred Share
was redeemed on the anniversary of the date of original issuance of
the Series B Preferred Shares occurring in the Series B Anniversary
Period immediately following such Non-Series B Anniversary Period;
provided, however, that if all Series C Preferred Shares are not
redeemed concurrently with the Series B Preferred Shares during a
Non-Series B Anniversary Period, then, in lieu of the foregoing, the
amount to be paid in cash by the Corporation in this Section
3(a)(ii) in respect of Series B Preferred Shares to be redeemed
shall be an amount equal to (A) the Series B Liquidation Preference,
plus (B) an amount equal to the dividends that would have accrued
after such redemption if such Series B Preferred Share was redeemed
on the anniversary of the date of original issuance of the Series B
Preferred Shares occurring in the Series B Anniversary Period
immediately following such Non-Series B Anniversary Period, plus (C)
an amount so that, combined with all other payments made on the
Series B Preferred Shares to be redeemed, a holder of Series B
Preferred Shares will have received an internal rate of return of
20% on the purchase price of the Series B Preferred Shares from the
date of
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issuance to the anniversary of the date of original issuance of the
Series B Preferred Shares occurring in the Series B Anniversary
Period immediately following such Non-Series B Anniversary Period.
Notwithstanding anything to the contrary, the Series B Preferred
Shares may be redeemed in part during a Non-Series B Anniversary
Period only if the number of shares of Series B Preferred Shares to
be redeemed during such Non-Series B Anniversary Period is equal to
or greater than 50% of the number of shares of Series B Preferred
Shares issued and outstanding on the first day of the first Series B
Anniversary Period, as adjusted for stock dividends, subdivisions,
splits, combinations or similar transactions thereof.
(iii) The Board of Directors shall fix a record date for
the determination of the Series B Preferred Shares to be redeemed,
and such record date shall not be more than 30 days nor less than 10
days prior to the date of redemption. The Corporation shall deliver
by first class mail, postage prepaid, a notice of redemption not
less than 10 nor more than 30 days prior to the date of redemption,
addressed to the holders of record of the Series B Preferred Shares
as they appear in the records of the Corporation. No failure to give
such notice or any defect therein or in the mailing thereof shall
affect the validity of the proceedings for the redemption of any
Series B Preferred Shares except as to the holder to whom notice was
defective or not given. Each notice shall state the following: (A)
the record date and date of redemption; (B) the redemption price;
(C) the number of shares of Series B Preferred Stock to be redeemed;
(D) the place where the Series B Preferred Shares are to be
surrendered for payment of the redemption price; and (E) that
dividends on the shares to be redeemed will cease to accrue on such
redemption date. If less than all of the Series B Preferred Shares
held by any holder is to be redeemed, the notice mailed to such
holder shall also specify the number of shares of Series B Preferred
Shares held by such holder to be redeemed.
(b) Mandatory Redemption. (i) On and at any time after
the Mandatory Redemption Right Date (as defined below), the Series B
Preferred Shares shall be subject to mandatory redemption by the
Corporation at the option and election of the holder thereof at a
price, payable in cash, for each share of Series B Preferred Share
redeemed in an amount equal to the Series B Liquidation Preference.
All shares of Series B Preferred Shares held by such holder electing
for redemption under this clause (b) shall be redeemed. The
"Mandatory Redemption Right Date" means the earlier to occur of (x)
the stated maturity or the earlier redemption in full of the
Corporation's Series A and Series B 9 7/8% Senior Subordinated Notes
due 2008 (the "Notes") or (y) a Change of Control (as defined in
Article FIFTH hereto, which definition is the same as that contained
in the Indenture, dated as of June 11, 1998, among Philipp Brothers
Chemicals, Inc., Chase Manhattan Bank, as Trustee, and the
guarantors named therein with respect to the Notes (the
"Indenture")).
(ii) The Corporation shall give notice to the holders of
record of Series B Preferred Shares of this mandatory redemption
right as soon as practicable after the Mandatory Redemption Right
Date, by first class mail, postage prepaid, at their addresses as
shown on the records of the Corporation. Each such notice shall
state: (A) that, on and after such Mandatory Redemption Right Date,
such holder has the right to require the
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Corporation to repurchase for cash all of such holder's Series B
Preferred Shares; (B) the redemption price as of the Mandatory
Redemption Right Date (it being understood that the actual
redemption price will be determined as of the date on which the
redemption occurs); (C) the place where the Series B Preferred
Shares are to be surrendered for payment of the redemption price;
and (D) that dividends on the shares to be redeemed will cease to
accrue as of the date such shares are redeemed.
(iii) The Corporation shall redeem each Series B
Preferred Share requested to be redeemed by the holder thereof
within 30 days of receipt by the Corporation of a notice from such
holder requesting such redemption. If the Corporation fails for any
reason to so redeem any one or more of the Series B Preferred Shares
so requested to be redeemed, then, immediately upon the expiration
of such 30-day period and for so long as the Corporation has not
redeemed all of such Series B Preferred Shares requested to be
redeemed, each Series B Preferred Share shall entitle the holder
thereof to the same voting rights to which each Class A Common Share
of the Corporation (and each share of any other capital stock of the
Corporation) entitles the holder thereof; provided, however, no
Series B Preferred Share shall entitle the holder thereof to any
voting rights with respect to the election and removal of directors.
The holders of Series B Preferred Shares shall vote together with
the Class A Common Shares (and with the shares of any other capital
stock of the Corporation).
(c) On and after the date of a redemption pursuant to
Sections 3(a) or (b), the Corporation shall pay the applicable
redemption price of a Series B Preferred Share to the holder thereof
in cash upon surrender of the certificates therefor (properly
endorsed or assigned for transfer, if the Board of Directors shall
so require and the notice shall so state); provided that if such
certificates are lost, stolen or destroyed, the Board of Directors
may require such holder to indemnify the Corporation, in a
reasonable amount and in a reasonable manner, prior to paying such
redemption price. From and after the applicable redemption date
(unless default shall be made by the Corporation in providing money
for the full payment of the redemption price), dividends on the
Series B Preferred Shares to be redeemed on such redemption date
shall cease to accrue, and said shares shall no longer be deemed to
be outstanding, and all rights of the holders thereof as
shareholders of the Corporation (except the right to receive from
the Corporation the redemption price) shall cease. In case fewer
than all the shares represented by any such certificate are to be
redeemed, a new certificate shall be issued representing the
unredeemed shares without cost to the holder thereof. Any Series B
Preferred Shares which shall at any time have been redeemed shall,
after such redemption, have the status of authorized but unissued
Preferred Shares, without designation as to series until such shares
are once more designated as part of a particular series by the Board
of Directors.
(d) Notwithstanding the foregoing, unless full
cumulative dividends on all Series B Preferred Shares shall have
been or contemporaneously are declared and paid or are declared and
a sum sufficient for the payment thereof is set apart for payment
for all past dividend periods and the then current dividend period,
(i) no Series B Preferred Shares may be redeemed unless all
outstanding Series B Preferred Shares are simultaneously redeemed in
accordance with this Section 3 and (ii) the Corporation shall
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not purchase or otherwise acquire directly or indirectly any Series
B Preferred Shares; provided, however, that the foregoing shall not
prevent the redemption on a pro rata basis of Series B Preferred
Shares in accordance with this Section 3 or the purchase or
acquisition of Series B Preferred Shares pursuant to a purchase or
exchange offer made on the same terms to holders of all outstanding
Series B Preferred Shares.
(e) If fewer than all of the outstanding Series B
Preferred Shares are to be redeemed, the Series B Preferred Shares
to be redeemed shall be selected pro rata (as nearly as may be
practicable without creating fractional shares) or by any other
equitable method determined by the Corporation.
4. Liquidation Rights. (a) Upon the voluntary or
involuntary liquidation, dissolution, or winding up of the
Corporation, each Series B Preferred Share shall entitle the holder
thereof to receive and to be paid out of the assets of the
Corporation available for distribution to its shareholders, before
any payment or distribution shall be made on any Junior Securities
with respect to the liquidation, dissolution, or winding up of the
Corporation, a stated value in the amount of $1,000, plus an amount
equal to all accrued and unpaid dividends to the date fixed for
payment thereof (collectively, the "Series B Liquidation
Preference").
(b) After the payment to the holders of Series B
Preferred Shares of the full amount of the liquidation distribution
to which they are entitled pursuant to Section 4(a), the holders of
Series B Preferred Shares as such shall have no right or claim to
any of the remaining assets of the Corporation.
(c) If, upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the amounts payable
with respect to the Series B Preferred Shares and any other Parity
Securities with respect to the liquidation, dissolution or winding
up of the Corporation are not paid in full, the holders of the
Series B Preferred Shares and of such other Parity Securities will
share ratably in any such distribution of assets of the Corporation
in proportion to the full respective values to which they are
entitled.
(d) Neither the sale of all or substantially all of the
property or business of the Corporation, nor the merger or
consolidation of the Corporation into or with any other corporation
or entity or the merger or consolidation of any other corporation or
entity into or with the Corporation, shall necessarily be deemed to
be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this Section 4.
5. Voting Rights. (a) Holders of Series B Preferred
Shares will have no voting rights, except as set forth below or as
otherwise required by law from time to time.
(b) So long as any Series B Preferred Shares are
outstanding, the Corporation shall not take any of the following
actions, without the prior consent or affirmative vote of the
holders of at least two-thirds of all Series B Preferred Shares then
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issued and outstanding, given in person or by proxy, either in
writing or at a meeting called therefor (such holders of Series B
Preferred Shares voting separately as a class):
(i) any amendment, alteration or change to the rights,
preferences, privileges or powers of any Series B Preferred Share in
any manner (whether by merger, consolidation, reclassification or
otherwise) that adversely affects any shares thereof or present or
future holders thereof;
(ii) any authorization, creation (by way of merger,
consolidation, reclassification or otherwise) or issuance of any
Senior Securities or Parity Securities of any kind;
(iii) any amendment, repeal or alteration of this
Certificate of Amendment, the Certificate of Incorporation or Bylaws
in any manner (by way of merger, consolidation, reclassification or
otherwise) that adversely affects the present or future holders of
the Series B Preferred Shares; or
(iv) any understanding, agreement or contract to do any
of the foregoing.
FOURTH: The Certificate of Incorporation is hereby further amended
to provide that 20,000 shares of the Corporation's authorized and unissued
Preferred Shares shall be designated as Series C Redeemable Participating
Preferred Shares (hereinafter referred to as the "Series C Preferred Shares"),
which shall have the following relative rights, preferences and limitations, as
fixed by the Corporation's Board of Directors pursuant to authority granted to
it under the Certificate of Incorporation and as permitted by Section 502 of the
Business Corporation Law:
1. Rank. (a) The terms "Senior Securities," "Parity
Securities" and Junior Securities" shall have the meanings given to
them in Section 1(a) of Article THIRD hereinabove.
(b) The Series C Preferred Shares shall rank senior to
all Junior Securities, on a parity with all Parity Securities, and
junior to all Senior Securities, in each case with respect to
dividend rights or rights upon liquidation, dissolution or winding
up of the affairs of the Corporation; provided that (i) the Series C
Preferred Shares shall rank senior to the Series A Preferred Shares
with respect to dividend rights and on a parity with the Series A
Preferred Shares with respect to rights upon liquidation,
dissolution or winding up of the Corporation and (ii) the Series C
Preferred Shares shall rank on a parity with the Series B Preferred
Shares with respect to dividend rights and rights upon liquidation,
dissolution or winding up of the Corporation.
2. Dividends. (a) The holders of issued and outstanding
Series C Preferred Shares shall be entitled to receive, when, as and
if declared by the Board of Directors, cash dividends at an annual
rate equal to 15% of the Series C Liquidation Preference (as defined
below) (the "Series C Base Dividend"). In addition, the holders of
issued and outstanding Series C Preferred Shares shall be entitled
to participate with the
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Class A Common Shares and to receive, before any dividends (whether
in cash or in kind) are paid upon or set aside for the Class A
Common Shares, the same dividends (whether in cash or in kind) as
are distributed in respect of each Class A Common Share (the "Series
C Participating Dividend"). One Series C Preferred Share shall be
treated for purposes of such participation as being equal to 0.5
(the "Series C Participation Number") shares of Class A Common
Shares. Holders of Series C Preferred Shares shall not be entitled
to any dividend, whether payable in cash or in kind, in excess of
full cumulative Series C Base Dividends and Series C Participating
Dividends, as specifically provided in this Article FOURTH. Series C
Participation Dividends shall be paid at the same time as and when
dividends on Class A Common Shares are paid to holders of Class A
Common Shares.
(b) Series C Base Dividends shall accrue on a daily
basis, cumulative from the date of issuance, and shall be payable
semi-annually in arrears on the last day of each June and December,
or, if such date is not a business day, the succeeding business day
(each, a "Series C Base Dividend Payment Date"). Series C Base
Dividends shall be computed on the basis of a 360-day year
consisting of twelve 30-day months. Series C Base Dividends shall
accrue and cumulate whether or not the Corporation has earnings or
profits, whether or not there are funds legally available for the
payment of dividends and whether or not dividends are declared.
Series C Base Dividends shall be paid to the holders of record of
Series C Preferred Shares as they appear on the records of the
Corporation at the close of business on the 15th day of the calendar
month in which the applicable Series C Base Dividend Payment Date
falls or on such other date designated by the Board of Directors for
the payment of Series C Base Dividends that is not more than 30 nor
less than 10 days prior to such Series C Dividend Payment Date. Any
payment of a Series C Base Dividend shall first be credited against
the earliest accumulated but unpaid Series C Base Dividend due with
respect to such share that remains payable.
(c) So long as any Series C Preferred Share is
outstanding, no dividend (other than a dividend in Common Shares of
the Corporation) shall be declared or paid or set aside for payment
or other distribution declared or made upon any Junior Securities of
any kind, nor shall any Junior Securities of any kind be redeemed,
purchased or otherwise acquired for any consideration (or any moneys
be paid to or made available for a sinking fund for the redemption
of any shares of any such securities) by the Corporation (except by
conversion into or exchange for other Junior Securities), unless, in
each case, full cumulative dividends on all the Series C Preferred
Shares have been or are contemporaneously declared and paid or are
declared and a sum sufficient for the payment thereof is set apart
for such payment for all past dividend periods and the then current
dividend period. If dividends are not paid in full or a sum
sufficient for such full payment is not so set apart upon the Series
C Preferred Shares, all dividends declared upon the Series C
Preferred Shares and any series of Parity Securities with respect to
dividends shall be declared pro rata so that the amount of dividends
declared per share of the Series C Preferred Shares and such series
of Parity Securities with respect to dividends shall in all cases
bear to each other the same ratio that accrued and unpaid
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dividends per share on the Series C Preferred Shares and such series
of Parity Securities with respect to dividends bear to each other.
Notwithstanding anything to the contrary in this Section 2(c),
Common Stock of the Corporation may be repurchased by the
Corporation as required by the Sussman Shareholders Agreement (as
defined in Article THIRD), as amended and in effect on the date of
original issuance of the Series C Preferred Shares, and as
thereafter amended, except for any amendment subsequent to the date
of original issuance of the Series C Preferred Shares which causes
the terms of such agreement to be less favorable in any respect to
the Corporation or the holders of the Series C Preferred Shares.
(d) If the Corporation subdivides or splits the
outstanding Class A Common Shares into a greater number of shares or
combines the outstanding Class A Common Shares into a smaller number
of shares, then the Series C Participation Number shall be adjusted,
effective immediately after the relevant effective date, so as to
represent the number of Class A Common Shares of the Corporation
which would be represented by the then applicable Series C
Participation Number upon the effective date of the subdivision,
split or combination. As soon as practicable, the Corporation shall
deliver by first class mail, postage prepaid, to each holder of
Series C Preferred Shares a notice, certified as true and correct by
an authorized person of the Corporation, stating the Series C
Participation Number after such adjustment, a brief statement of the
facts requiring such adjustment and the effective date of such
adjusted Series C Participation Number; provided that the failure of
the Corporation to give such notice shall not invalidate any
corporate action by the Corporation.
3. Redemption.
(a) Optional Redemption. (i) During the period beginning
90 days before and ending 90 days after the third anniversary, and
each anniversary thereafter, of the date of original issuance of the
Series C Preferred Shares (the "Series C Anniversary Period"), but
only once per Series C Anniversary Period, the Corporation may
redeem all, but not less than all, of the issued and outstanding
Series C Preferred Shares by payment in cash for each share of
Series C Preferred Share redeemed in an amount equal to (A) the
Series C Liquidation Preference, plus (B) a pro rata amount equal to
the product of the Equity Value (as defined below) multiplied by the
Applicable Percentage (as defined below) as of the record date for
such redemption (the "Equity Value Amount").
(ii) During each period that is after the first Series C
Anniversary Period but is not a Series C Anniversary Period (a
"Non-Series C Anniversary Period"), but only once per Non-Series C
Anniversary Period, the Corporation may redeem all, but not less
than all, of the issued and outstanding Series C Preferred Shares by
payment in cash for each share of Series C Preferred Share redeemed
in an amount equal to (A) the Series C Liquidation Preference, plus
(B) an amount equal to the dividends that would have accrued after
such redemption if such Series C Preferred Share was redeemed on the
anniversary of the date of original issuance of the Series C
Preferred Shares occurring in the Series C Anniversary Period
immediately following such Non-Series C Anniversary Period, plus (C)
the Equity Value Amount.
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(iii) "Equity Value" shall mean an amount equal to (A)
the sum of (x) the product obtained by multiplying 7.5 by the
greater of either the Corporation's trailing EBITDA (as defined
below) for the most recent four full fiscal quarters (such period,
the "Last Period") or the average of the Corporation's trailing
EBITDA for the Last Period and the Corporation's EBITDA for the four
full fiscal quarters immediately preceding the Last Period plus (y)
the Corporation's cash and marketable securities, and minus (B) all
outstanding indebtedness, minority interests, preferred stock,
accrued environmental reserves, accrued currency reserves, accrued
indebtedness for the Net Revenues Payment (as defined in Article
FIFTH hereto, which definition is the same as that contained in
Section 2.6(b) of the Asset Purchase Agreement, among Pfizer, Inc.,
a Delaware corporation, the other Asset Selling Corporations (as
defined therein), and the Corporation, dated as of September 28,
2000 (the "Pfizer Agreement"))), and accrued indebtedness for Gross
Profit Excluding Virginiamycin (as defined in Article FIFTH hereto,
which definition is the same as that contained in Section 1.1 of the
Pfizer Agreement). For each relevant fiscal quarter, the calculation
of Equity Value and all of its components (including but not limited
to the components of EBITDA) shall be based on figures that are
reflected in (and only to the extent reflected in) the consolidated
balance sheet and consolidated statements of income and cash flows
of the Corporation as of and for such fiscal quarter, all of which
must be prepared in accordance with generally accepted accounting
principles consistently applied and audited by nationally recognized
independent public accountants.
"EBITDA" shall mean, for any period, (x) the sum of
income, all depreciation expenses, all amortization expenses, and
any other non-cash expenses but excluding (y) all extraordinary
losses, all interest expenses (net of interest income), all charges
against income for federal, state and local taxes, all non-recurring
expenses or charges, and extraordinary non-recurring gains, in each
case based upon (and only to the extent reflected in) the audited
financial statements of the Corporation used in calculating "Equity
Value" in the immediately preceding paragraph; provided that, unless
otherwise agreed to by a majority the holders of Series C Preferred
Shares, payments for all earnout and royalty payments and all
management fees shall be excluded from EBITDA.
"Applicable Percentage" shall mean, with respect to a
redemption pursuant to Section 3(a) during a Series C Anniversary
Period or a Non-Series C Anniversary Period or with respect to the
calculation of Capital Stock Transaction Amount (as defined herein),
the percentage listed below opposite the period in which the
redemption occurs or in which the consummation of the Capital Stock
Transaction occurs, respectively:
<PAGE>
12
Period Percentage
------ ----------
September 1, 2003 to February 28, 2004 14.00%
February 29, 2004 to February 28, 2005 18.00%
March 1, 2005 to February 28, 2006 22.00%
March 1, 2006 to February 28, 2007 25.00%
March 1, 2007 to February 28, 2008 27.50%
February 29, 2008 and thereafter 30.00%
(iv) The Board of Directors shall fix a record date for
the determination of the Series C Preferred Shares to be redeemed,
and such record date shall not be more than 30 days nor less than 10
days prior to the date of redemption. The Corporation shall deliver
by first class mail, postage prepaid, a notice of redemption not
less than 10 nor more than 30 days prior to the date of redemption,
addressed to the holders of record of the Series C Preferred Shares
as they appear in the records of the Corporation. No failure to give
such notice or any defect therein or in the mailing thereof shall
affect the validity of the proceedings for the redemption of any
Series C Preferred Shares except as to the holder to whom notice was
defective or not given. Each notice shall state the following: (A)
the record date and date of redemption; (B) the redemption price;
(C) the number of shares of Series C Preferred Stock to be redeemed;
(D) the place where the Series C Preferred Shares are to be
surrendered for payment of the redemption price; and (E) that
dividends on the shares to be redeemed will cease to accrue on such
redemption date.
(v) The Corporation may not redeem any share of Series C
Preferred Shares pursuant to this Section 3(a) if any share of
Series B Preferred Shares is outstanding, unless all outstanding
shares of Series B Preferred Shares are redeemed concurrently with
such redemption of Series C Preferred Shares.
(b) Mandatory Redemption. (i) On and at any time after
the Mandatory Redemption Right Date (as defined in Article THIRD),
the Series C Preferred Shares shall be subject to mandatory
redemption by the Corporation at the option and election of the
holder thereof at a price, payable in cash, for each share of Series
C Preferred Share redeemed in an amount equal to (A) the Series C
Liquidation Preference, plus (B) the Equity Value Amount. All shares
of Series C Preferred Shares held by such holder electing for
redemption under this clause (b) shall be redeemed.
(ii) The Corporation shall give notice to the holders of
record of Series C Preferred Shares of this mandatory redemption
right as soon as practicable after the Mandatory Redemption Right
Date, by first class mail, postage prepaid, at their addresses as
shown on the records of the Corporation. Each such notice shall
state: (A) that, on and after such Mandatory Redemption Right Date,
such holder has the right to require the Corporation to repurchase
for cash all of such holder's Series C Preferred Shares; (B) the
redemption price as of the Mandatory Redemption Right Date (it being
understood that the actual redemption price will be determined as of
the date on which the redemption occurs); (C) the place where the
Series C Preferred Shares are to be surrendered for payment of the
redemption price; and (D) that dividends on the shares to be
redeemed will cease to accrue as of the date such shares are
redeemed.
<PAGE>
13
(iii) The Corporation shall redeem each Series C
Preferred Share requested to be redeemed by the holder thereof
within 30 days of receipt by the Corporation of a notice from such
holder requesting such redemption. If the Corporation fails for any
reason to so redeem any one or more of the Series C Preferred Shares
so requested to be redeemed, then, immediately upon the expiration
of such 30-day period and for so long as the Corporation has not
redeemed all of such Series C Preferred Shares requested to be
redeemed, each Series C Preferred Share shall entitle the holder
thereof to the same voting rights to which each Class A Common Share
of the Corporation (and each share of any other capital stock of the
Corporation) entitles the holder thereof; provided, however, no
Series C Preferred Share shall entitle the holder thereof to any
voting rights with respect to the election and removal of directors.
The holders of Series C Preferred Shares shall vote together with
the Class A Common Shares (and with the shares of any other capital
stock of the Corporation).
(c) Capital Stock Transaction Adjustment. (i) The
Corporation may not effect (A) any recapitalization of the
Corporation or reclassification of any capital stock of the
Corporation, (B) any consolidation, merger or combination of the
Corporation with or into another corporation or entity, (C) any sale
or conveyance of all or substantially all of the assets of the
Corporation to any person or entity as a result of which holders of
any capital stock of the Corporation shall be entitled to receive
cash, stock, securities or other property with respect to or in
exchange for such capital stock, (D) any initial public offering of
any capital stock of the Corporation, or (E) any redemption,
acquisition or other purchase of any Junior Securities or Parity
Securities (other than Series B Preferred Shares or Series C
Preferred Shares) of the Corporation (collectively, a "Capital Stock
Transaction"), unless (x) the amount of the Series C Liquidation
Preference is increased by the Capital Stock Transaction Amount (as
defined below), if any, with respect to all outstanding Series C
Preferred Shares as of the date of the consummation of the Capital
Stock Transaction, and (y) if such Capital Stock Transaction occurs
during the one-year period following the redemption of any Series C
Preferred Shares, then immediately prior to or concurrently with the
consummation of the Capital Stock Transaction, the Corporation pays
in cash the Capital Stock Transaction Amount, if any, to each person
or entity that was the last holder of record of a Series C Preferred
Share that was redeemed during the 360-day period preceding the date
of the consummation of such Capital Stock Transaction. "Capital
Stock Transaction Amount" means a pro rata amount equal to the
excess, if any, of (1) the aggregate value of the outstanding
shares, fully diluted, of all classes of Common Stock of the
Corporation based on, but immediately prior to the consummation of,
the Capital Stock Transaction multiplied by the Applicable
Percentage as of the date of the consummation of the Capital Stock
Transaction over (2) the Equity Value Amount immediately prior to
the consummation of the Capital Stock Transaction.
(ii) The Corporation shall deliver by first class mail,
postage prepaid, a notice of entering into a Capital Stock
Transaction as soon as practicable and in any event not less than 20
days prior to the date of consummation thereof, addressed to the
holders of record of the Series C Preferred Shares and, if clause
(y) of subsection (i) is applicable, such former holders of record
of the Series C Preferred Shares, as they appear in the
<PAGE>
14
records of the Corporation. Each notice shall state the following:
(A) a brief description of the Capital Stock Transaction and (B), if
applicable, the Capital Stock Transaction Amount and the method of
calculation therefor.
(d) On and after the date of a redemption pursuant to
Sections 3(a) or (b), the Corporation shall pay the applicable
redemption price of a Series C Preferred Share to the holder thereof
in cash upon surrender of the certificates therefor (properly
endorsed or assigned for transfer, if the Board of Directors shall
so require and the notice shall so state); provided that if such
certificates are lost, stolen or destroyed, the Board of Directors
may require such holder to indemnify the Corporation, in a
reasonable amount and in a reasonable manner, prior to paying such
redemption price. From and after the applicable redemption date
(unless default shall be made by the Corporation in providing money
for the full payment of the redemption price), dividends on the
Series C Preferred Shares to be redeemed on such redemption date
shall cease to accrue, and said shares shall no longer be deemed to
be outstanding, and all rights of the holders thereof as
shareholders of the Corporation (except the right to receive from
the Corporation the redemption price and any Capital Stock
Transaction Amount) shall cease. In case fewer than all the shares
represented by any such certificate are to be redeemed, a new
certificate shall be issued representing the unredeemed shares
without cost to the holder thereof. Any Series C Preferred Shares
which shall at any time have been redeemed shall, after such
redemption, have the status of authorized but unissued Preferred
Shares, without designation as to series until such shares are once
more designated as part of a particular series by the Board of
Directors.
(e) Notwithstanding the foregoing, unless full
cumulative dividends on all Series C Preferred Shares shall have
been or contemporaneously are declared and paid or are declared and
a sum sufficient for the payment thereof is set apart for payment
for all past dividend periods and the then current dividend period,
(i) no Series C Preferred Shares may be redeemed unless all
outstanding Series C Preferred Shares are simultaneously redeemed in
accordance with this Section 3 and (ii) the Corporation shall not
purchase or otherwise acquire directly or indirectly any Series C
Preferred Shares; provided, however, that the foregoing shall not
prevent the purchase or acquisition of Series C Preferred Shares
pursuant to a purchase or exchange offer made on the same terms to
holders of all outstanding Series C Preferred Shares.
4. Liquidation Rights. (a) Upon the voluntary or
involuntary liquidation, dissolution, or winding up of the
Corporation, each Series C Preferred Share shall entitle the holder
thereof to receive and to be paid out of the assets of the
Corporation available for distribution to its shareholders, before
any payment or distribution shall be made on any Junior Securities
with respect to the liquidation, dissolution, or winding up of the
Corporation, (i) a stated value in the amount of $1,000 (as adjusted
by the Capital Stock Transaction Amount, if any), plus an amount
equal to all accrued and unpaid dividends to the date fixed for
payment thereof (collectively, the "Series C Liquidation
Preference"), plus (ii) the Equity Value Amount.
<PAGE>
15
(b) After the payment to the holders of Series C
Preferred Shares of the full amount of the liquidation distribution
to which they are entitled pursuant to Section 4(a), the holders of
Series C Preferred Shares as such shall have no right or claim to
any of the remaining assets of the Corporation.
(c) If, upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the amounts payable
with respect to the Series C Preferred Shares and any other Parity
Securities with respect to the liquidation, dissolution or winding
up of the Corporation are not paid in full, the holders of the
Series C Preferred Shares and of such other Parity Securities will
share ratably in any such distribution of assets of the Corporation
in proportion to the full respective values to which they are
entitled.
(d) Neither the sale of all or substantially all of the
property or business of the Corporation, nor the merger or
consolidation of the Corporation into or with any other corporation
or entity or the merger or consolidation of any other corporation or
entity into or with the Corporation, shall necessarily be deemed to
be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this Section 4.
5. Voting Rights. (a) Holders of Series C Preferred
Shares will have no voting rights, except as set forth below or as
otherwise required by law from time to time.
(b) So long as any Series C Preferred Shares are
outstanding, the Corporation shall not take any of the following
actions, without the prior consent or affirmative vote of the
holders of at least two-thirds of all Series C Preferred Shares then
issued and outstanding, given in person or by proxy, either in
writing or at a meeting called therefor (such holders of Series C
Preferred Shares voting separately as a class):
(i) any amendment, alteration or change to the rights,
preferences, privileges or powers of any Series C Preferred Share in
any manner (whether by merger, consolidation, reclassification or
otherwise) that adversely affects any shares thereof or present or
future holders thereof;
(ii) any authorization, creation (by way of merger,
consolidation, reclassification or otherwise) or issuance of any
Senior Securities or Parity Securities of any kind;
(iii) any amendment, repeal or alteration of this
Certificate of Amendment, the Certificate of Incorporation or Bylaws
of the Corporation in any manner (by way of merger, consolidation,
reclassification or otherwise) that adversely affects the present or
future holders of the Series C Preferred Shares; or
(iv) any understanding, agreement or contract to do any
of the foregoing.
<PAGE>
16
FIFTH: The following terms, as used in this Certificate of
Amendment, shall have the definitions set forth below.
1. Definition of Change of Control. "Change of Control" means the
occurrence of any of the following events after the date of filing this
Certificate of Amendment: (i) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act) (other than one or more Permitted
Holders) is or becomes (including by merger, consolidation or otherwise) the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to have beneficial ownership of all shares
that such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of 50%
or more of the voting power of the total outstanding Voting Stock of the
Corporation; (ii) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors of the
Corporation (together with any new directors whose election to such Board of
Directors, or whose nomination for election by the stockholders of the
Corporation, was approved by a vote of 66-2/3% of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of such Board of Directors of the Corporation
then in office; (iii) the approval by the holders of Capital Stock of the
Corporation of any plan or proposal for the liquidation or dissolution of the
Corporation as a whole and not any Restricted Subsidiary or Guarantor (whether
or not otherwise in compliance with the terms of the Indenture); or (iv) the
sale or other disposition (other than by way of merger or consolidation) of all
or substantially all of the Capital Stock or assets of the Corporation and its
Restricted Subsidiaries taken as a whole to any person or group (as defined in
Rule 13d-5 of the Exchange Act) (other than to one or more of the Permitted
Holders) as an entirely or substantially as an entirety in one transaction or a
series or related transactions, unless the "beneficial owners" of the Voting
Stock of such Person immediately prior to such transaction own, directly or
indirectly, more than 50% of the total voting power of such Person immediately
after such transaction.
As used in the above definition of "Change of Control" and in the
definitions that follow, the following terms have the meanings set forth below:
"Affiliates" means, with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person. For purposes of
this definition, "control" (including, with correlative meanings, the
terms "controlling," "controlled by" and "under common control with") of
any Person means the possession, directly or indirectly, 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 agreement
or otherwise.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents
of or interests in (however designated) corporate stock or other equity
participations, including partnership interests, whether general or
limited, of such Person, including any Preferred Stock.
<PAGE>
17
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder.
"Guarantor" means (i) the domestic Subsidiaries of the Corporation
on the Issue Date, (ii) each of the Corporation's Restricted Subsidiaries
which become Restricted Subsidiaries after the Issue Date and which are
organized in the United States, and (iii) each of the Corporation's
Restricted Subsidiaries that in the future executes a supplemental
indenture in which such Restricted Subsidiary agrees to be bound by the
terms of the Indenture as a Guarantor.
"Issue Date" means the date on which the Notes are first issued
under this Indenture.
"Permitted Holders" means (i) Jack Bendheim; (ii) each of his
spouse, siblings, ancestors, descendants (whether by blood, marriage or
adoption, and including stepchildren) and the spouses, siblings, ancestors
and descendants (whether by blood, marriage or adoption, and including
stepchildren) of such natural persons, the beneficiaries, estates and
legal representatives of any of the foregoing, the trustee of any bona
fide trust of which any of the foregoing, individually or in the
aggregate, are the majority in interest beneficiaries or grantors, and any
corporation, partnership, limited liability company or other Person in
which any of the foregoing, individually or in the aggregate, own or
control a majority in interest; and (iii) all Affiliates controlled by the
individual named in clause (i) above.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company,
trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Preferred Stock" as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over Capital Stock of any other class of such
Person.
"Restricted Subsidiary" means each direct or indirect Subsidiary of
the Corporation other than an Unrestricted Subsidiary.
"Subsidiary" of a Person means (i) any corporation more than 50% of
the outstanding voting power of the Voting Stock of which is owned or
controlled, directly or indirectly, by such Person or by one or more other
Subsidiaries of such Person, or by such Person and one or more other
Subsidiaries thereof, or (ii) any limited partnership of which such Person
or any Subsidiary of such person is a general partner, or (iii) any other
person (other than a corporation or limited partnership) in which such
Person or one or more other Subsidiaries of such Person, or such Person
and one or more other Subsidiaries thereof, directly or indirectly, have
more than 50% of the outstanding
<PAGE>
18
partnership or similar interests or have the power, by contract or
otherwise, to direct or cause the direction of the policies, management
and affairs thereof.
"Unrestricted Subsidiary" means any Subsidiary of the Corporation
designated as such pursuant to and in compliance with Section 4.14 of the
Indenture and not redesignated a Restricted Subsidiary in compliance with
such Section.
"Voting Stock" of a Person means Capital Stock of such Person of the
class pursuant to which the holders thereof have the general voting power
under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such Person (irrespective of whether or
not at the time stock of any other class or classes shall have or might
have voting power by reason of the happening of any contingency).
2. Definition of Net Revenues Payment. "Net Revenues Payment" means
Net Virginiamycin Revenues for the most recently completed Measurement Period.
In the above definition of "Net Revenues Payment" and in the
definitions that follow, the following terms have the meanings set forth below:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control
with, such Person at any time during the period for which the
determination of affiliation is being made.
"Closing Date" means the date on which the closing of the
transactions contemplated by the Pfizer Agreement occurs.
"Measurement Period" means the three (3)-month period commencing on
the first day of the month following the month in which the Closing Date
occurs and ending on the last day of the month that is three (3) months
after the month in which the Closing Date occurs, and each of the nineteen
(19) successive three (3)-month periods thereafter commencing on the first
day of the month following the most recently completed Measurement Period
and ending on the last day of the month in which the fifth anniversary of
the Closing Date occurs.
"Net Virginiamycin Revenues" means the gross invoice value of all
sales of Virginiamycin by the Corporation and/or its Affiliates to third
parties, net of (regardless of the period to which any such items apply)
(i) all applicable bona fide trade and volume discounts and rebates and
allowances to customers accrued on such sales and (ii) credits,
allowances, refunds, returns and adjustments actually granted to customers
on account of spoiled, damaged, outdated or returned goods; provided that
in the event sales of Virginiamycin are bundled with other products of the
Corporation, the portion of the gross invoice value derived from the sale
of the bundled products attributable to Virginiamycin for purposes hereof
shall be in proportion to the most recent published sales price for
Virginiamycin as compared to the most recent published sales price for the
other bundled products. Net Virginiamycin Revenues also shall include net
royalty payments, fees and other payments relating to Virginiamycin
received by the Corporation
<PAGE>
19
and/or its Affiliates from licensees or distributors of Virginiamycin and
other third parties appointed by the Corporation serving a similar
function. Notwithstanding the foregoing, there shall not be included in
"Net Virginiamycin Revenues" sales of Virginiamycin by the Corporation
and/or its Affiliates to Pfizer, Inc. and/or its Affiliates pursuant to
the arrangements relating to Egypt, Algeria and India entered into by the
parties pursuant to the terms of the Pfizer Agreement.
"Person" means an individual, a corporation, a partnership, an
association, a trust or other entity or organization.
"Products" means certain feed additive products listed on Schedule 1
of the Pfizer Agreement.
"Virginiamycin" means any of the Products which contain as their
active ingredient the composite virginiamycin antibiotic.
3. Definition of Gross Profit Excluding Virginiamycin. "Gross Profit
Excluding Virginiamycin" means net sales (gross sales less returns and
allowances) by the Corporation and/or its Affiliates to third parties less its
and/or their actual cost of sales (standard cost plus manufacturing variances
and the impact of inventory revaluations) for all Products, excluding
Virginiamycin, and any extensions, improvements, substitutes or replacements
therefor, in each case that contain the same active ingredients as are used in
the Products, excluding Virginiamycin; provided, however, that gross profit in
respect of any products acquired by the Corporation or its Affiliates after the
Closing Date containing the same active ingredients as are used in the Products
(excluding Virginiamycin) shall not be included in such calculation if the
acquired products are sold under a trademark or brand name other than those
included in the Trademark Rights acquired by the Corporation hereunder. Gross
Profit Excluding Virginiamycin also shall include net royalty payments, fees and
other payments relating to the foregoing Products (including the aforementioned
extensions, improvements, substitutes or replacements) received by the
Corporation and/or its Affiliates from licensees and distributors of the
foregoing Products and other third parties appointed by the Corporation serving
a similar function. For purposes of determining cost of sales, the manufacturing
variances and the impact of inventory revaluations shall be appropriately
allocated between Virginiamycin and the other Products based on specific
identification, if feasible, or any other reasonable method that results in a
fair and equitable allocation.
In the above definition of "Gross Profit Excluding Virginiamycin,"
the term "Trademark Rights" means registered and unregistered trademarks,
service marks, brand names and certification marks set forth on Schedule 5.12 of
the Pfizer Agreement, and the goodwill associated with the foregoing and
registrations in any jurisdiction of, and applications in any jurisdiction to
register, the foregoing, including any extension, modification or renewal of any
such registration or application. Other capitalized terms contained in this
Section 3 of Article FIFTH not otherwise defined in this Section 3 of Article
FIFTH shall have the meanings ascribed thereto in Section 2 of Article FIFTH.
<PAGE>
20
SIXTH: These amendments to the Certificate of Incorporation were
authorized and approved by the Board of Directors of the Corporation at a
meeting duly held therefor.
[Rest of page intentionally left blank]
<PAGE>
21
IN WITNESS WHEREOF, the undersigned are authorized to act on behalf
of the Corporation and have signed and executed this Certificate of Amendment,
in their respective capacities as indicated below, on November 30, 2000.
/s/
----------------------------------------
Jack C. Bendheim, President
/s/
----------------------------------------
Joseph M. Katzenstein, Secretary
