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CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES C-4 PREFERRED STOCK
OF
BPC HOLDING CORPORATION
Pursuant to Section 151 of the Corporation Law
of the State of Delaware
I, James M. Kratochvil, Executive Vice President, Chief Financial
Officer, Treasurer and Secretary of BPC Holding Corporation (the "CORPORATION"),
a corporation organized and existing under the General Corporation Law of the
State of Delaware, in accordance with the provisions of Section 151 thereof, DO
HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors
by the Restated Certificate of Incorporation of the Corporation (as it may be
further amended or restated from time to time, the "RESTATED CERTIFICATE"), the
Board of Directors on May 9, 2001, adopted the following resolution creating a
series of 3,033 shares of Preferred Stock designated as Series C-4 Preferred
Stock:
RESOLVED, that pursuant to the authority vested in the Board by
ARTICLE FOURTH of the Restated Certificate and out of the Preferred Stock
authorized therein, the Board hereby authorizes that a series of Preferred Stock
of the Corporation be, and it hereby is, created and that the designation and
amount thereof and the voting powers (full or limited, or no voting powers),
preferences and relative participating, optional and other special rights of the
shares of such series, and the qualifications, limitations or restrictions
thereof are as follows:
Section 1. DESIGNATION AND AMOUNT; RANK.
(a) The shares of such series of Preferred Stock shall be designated
as the "SERIES C-4 PREFERRED STOCK" (the "SERIES C-4 PREFERRED STOCK") and the
number of shares initially constituting such series shall be 3,033, which number
may be decreased (but not increased) by the Board of Directors of the
Corporation (the "BOARD OF DIRECTORS") without a vote of stockholders; PROVIDED,
HOWEVER, that such number may not be decreased below the number of then
currently outstanding shares of Series C-4 Preferred Stock. The stated value and
liquidation preference per share (the "LIQUIDATION PREFERENCE") of the Series
C-4 Preferred Stock shall be $659.41, as adjusted from time to time pursuant to
the terms of the Merger Agreement.
(b) The Series C Preferred Stock (as defined in Section 2) shall
rank, with respect to the payment of dividends and the distribution of assets
upon dissolution, liquidation or winding up of the Corporation, junior to the
Series A Preferred Stock and the Series B Preferred Stock and prior to all
other Capital Stock of the Corporation (such other Capital Stock, other than
the Series A Preferred Stock and Series B Preferred Stock, being herein
referred to as the "JUNIOR STOCK").
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Section 2. DEFINITIONS.
Capitalized terms used herein shall have the meanings set forth in
this Section 2:
"AFFILIATE" means, with respect to any specified Person, any other
Person which, directly or indirectly, controls, is under common control with,
or is owned or controlled by, such specified Person. For purposes of this
definition, (i) "control" means, with respect to any specified Person, either
(x) the beneficial ownership of more than 30 percent of any class of equity
securities or (y) the power to direct the management or policies of the
specified Person through the ownership of voting securities, by contract,
voting agreement or otherwise and (ii) the terms "controlling", "control with"
and "controlled by", etc., shall have meanings correlative to the foregoing.
"BERRY" means Berry Plastics Corporation.
"BERRY CREDIT FACILITY" means the credit facility provided pursuant
to the Third Amended and Restated Financing and Security Agreement dated as of
May 9, 2000, by and among Berry, Bank of America, N.A. and the other Lenders
thereunder, as amended, modified, renewed, refunded, replaced or refinanced
from time to time which includes the addition, substitution or replacement of
any or all lenders thereunder under the same or any replacement agreement.
"BOARD OF DIRECTORS" has the meaning ascribed to such term in
Section 1(a).
"BPC SENIOR SUBORDINATED NOTES" means the 12-1/4% Senior
Subordinated Notes due 2004 and the 11% Senior Subordinated Notes due 2007
issued pursuant to the BPC Senior Subordinated Notes Indentures.
"BPC SENIOR SUBORDINATED NOTES INDENTURES" means, collectively, (i)
the Indenture dated as of April 21, 1994, among the Corporation and the other
Guarantors thereunder, Berry and United States Trust Corporation of New York,
as Trustee (the "Trustee"), (ii) the Indenture dated as of August 24, 1998,
among the Corporation and the other Guarantors thereunder, Berry and the
Trustee, and (iii) the Indenture dated as of July 6, 1999, among the
Corporation and the other Guarantors thereunder, Berry and the Trustee, as
each such Indenture may be amended and supplemented from time to time.
"BUSINESS DAY" means any day other than Saturday, Sunday or a day on
which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
"BY-LAWS" means the by-laws of the Corporation, as they may be
amended or restated from time to time.
"CAPITAL LEASE OBLIGATION" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital
lease that would at such time be required to be capitalized on a balance sheet
prepared in accordance with GAAP.
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"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) equity of such Person, including, without
limitation, any preferred stock, and with respect to partnerships, partnership
interests (whether general or limited) and any other interest or participation
that confers on a Person the right to receive a share of the profits and
losses of, or distributions of assets of, such partnership, but excluding any
debt securities convertible into such equity.
"CLASS B NON-VOTING COMMON STOCK" means the nonvoting Class B Common
Stock, par value $.01 per share, of the Corporation.
"CLOSING DATE" has the meaning ascribed to such term in the Merger
Agreement.
"COMMON STOCK" means the Common Stock, of all classes, of the
Corporation.
"CONVERSION PRICE" means $226 per share, subject to adjustment
pursuant to the terms hereof.
"CORPORATION" means BPC Holding Corporation, a Delaware corporation.
"DGCL" means the General Corporation Law of the State of Delaware,
as in effect from time to time.
"DISQUALIFIED STOCK" has the meaning set forth in the BPC Senior
Subordinated Notes Indenture which is dated July 6, 1999.
"DIVIDEND ACCRUAL DATE" means the last day of March, June, September
and December in each year.
"DIVIDEND PERIOD" means each quarterly period ending on a Dividend
Accrual Date.
"DIVIDEND RATE" means, with respect to each share of Series C
Preferred Stock, a rate of 14.00% per annum.
"EVENT OF NONCOMPLIANCE" means the failure of the Corporation to
perform, observe, or comply with any covenant, agreement, obligation, or
restriction required hereunder, after giving effect to any grace period
provided herein.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXISTING INDEBTEDNESS" means Indebtedness of the Corporation and
its Subsidiaries (including, without limitation, the Berry Credit Facility,
the Senior Secured Notes and the BPC Senior Subordinated Notes) in existence
on the Closing Date, and including any Indebtedness incurred in connection
with the refinancing, substitution or replacement of any such Indebtedness in
existence on the Closing Date.
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"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect on the Issue Date.
"GUARANTEE" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness.
"HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against
fluctuations in interest rates.
"INDEBTEDNESS" means, with respect to any Person, any indebtedness
of such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or representing
Capital Lease Obligations or the balance deferred and unpaid of the purchase
price of any property or representing Hedging Obligations, except any such
balance that constitutes an accrued expense or trade payable, if and to the
extent any of the foregoing indebtedness (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP, and also includes, to the extent not
otherwise included, the Guarantee of any Indebtedness of such Person or any
other Person.
"INTERNATIONAL" means Atlantic Equity Partners International II,
L.P.
"ISSUE DATE" means the Closing Date or such later date on which
shares of Series C Preferred Stock were issued by the Corporation pursuant to
the Merger Agreement.
"JUNIOR PAYMENT" has the meaning ascribed to such term in Section
6.1(a).
"JUNIOR STOCK" has the meaning ascribed to such term in Section
1(b).
"LIQUIDATION PREFERENCE" has the meaning ascribed to such term in
Section 1(a).
"MERGER AGREEMENT" means the Agreement and Plan of Reorganization
dated as of the Closing Date among the Corporation, Pescor, Inc., a Delaware
corporation, Pescor Plastics, Inc., a Texas corporation, and its shareholders.
"OFFICER" means the President, any Executive Vice President, any
Vice President, the Treasurer, the Assistant Treasurer, the Secretary or the
Assistant Secretary of the Corporation, as applicable.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers.
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"PERSON" means any individual, corporation, general or limited
partnership, joint venture, association, limited liability company, joint
stock company, trust, business trust, bank, trust company, estate (including
any beneficiaries thereof), unincorporated organization, cooperative,
association or governmental branch, authority, agency or political subdivision
thereof.
"PREFERRED STOCK" means the preferred stock, par value $0.01 per
share, of the Corporation.
"REDEMPTION DATE" means the date of any redemption of the Series C
Preferred Stock pursuant to Section 8.
"SALE OF THE CORPORATION" means the sale of the Corporation to one
or more Persons that are not Affiliates of any of the Corporation's
stockholders or the Corporation in a single or series of related transactions
pursuant to which the acquiring Person or Persons acquire (i) all of the
outstanding capital stock of the Corporation (whether by way of sale,
transfer, merger, consolidation or otherwise) or (ii) all or substantially all
of the assets of the Corporation and its subsidiaries, taken as a whole.
"SENIOR SECURED NOTES" means the 12-1/2% senior secured notes issued
by the Corporation pursuant to the terms of the Senior Secured Notes
Indenture.
"SENIOR SECURED NOTES INDENTURE" means the Indenture dated as of
June 18, 1996, between the Corporation and First Trust of New York, National
Association, as trustee, regarding the Senior Secured Notes as the same may be
modified and supplemented, and in effect from time to time.
"SENIOR STOCK" means the Series A Preferred Stock, the Series B
Preferred Stock and any stock of the Corporation ranking prior to, or on a
parity with, the Series C Preferred Stock either with respect to the payment of
dividends or the distribution of assets, whether upon liquidation or otherwise.
"SERIES A PREFERRED STOCK" means, collectively, the Series A Senior
Cumulative Exchangeable Preferred Stock of the Corporation and the Series A-1
Senior Cumulative Preferred Stock of the Corporation.
"SERIES B PREFERRED STOCK" means the Series B Cumulative Preferred
Stock of the Corporation.
"SERIES C PREFERRED STOCK" means, collectively, the Series C-1
Preferred Stock, the Series C-2 Preferred Stock, the Series C-3 Preferred
Stock, the Series C-4 Preferred Stock and the Series C-5 Preferred Stock of
the Corporation.
"SERIES C-1 PREFERRED STOCK" means the Series C-1 Preferred Stock of
the Corporation.
"SERIES C-2 PREFERRED STOCK" means the Series C-2 Preferred Stock of
the Corporation.
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"SERIES C-3 PREFERRED STOCK" means the Series C-3 Preferred Stock of
the Corporation.
"SERIES C-5 PREFERRED STOCK" means the Series C-5 Preferred Stock of
the Corporation.
"SERIES D PREFERRED STOCK" means the Series D Preferred Stock of the
Corporation.
"SUBSIDIARY" means, with respect to any Person, any corporation,
association, partnership or other business entity of which more than 50% of
the total voting power of shares of Capital Stock or other interests
(including partnership interests) entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by (i)
such Person, (ii) such Person and one or more Subsidiaries of such Person or
(iii) one or more Subsidiaries of such Person. Unless otherwise specified
herein, each reference to a Subsidiary shall refer to a Subsidiary of the
Corporation.
"SUCCESSOR CORPORATION" has the meaning ascribed to such term in
Section 6.5(b).
Section 3. DIVIDENDS AND DISTRIBUTIONS.
(a) The holders of shares of Series C Preferred Stock, in preference
to the holders of shares of Junior Stock but subject to the preferences of the
Series A Preferred Stock and the Series B Preferred Stock, shall be entitled
to receive cumulative dividends at the Dividend Rate on the Liquidation
Preference plus all theretofore accrued and unpaid dividends, compounded
quarterly, and no more, when and as declared by the Board of Directors, out of
funds legally available for that purpose. Such dividends shall accrue
quarterly on each Dividend Accrual Date, commencing on June 30, 2001, and
shall be paid in cash only (i) if, when and as declared by the Board of
Directors, out of funds legally available for that purpose, or (ii) upon
redemption as provided in Section 8. In the event that dividends are paid on
the Class B Non-Voting Common Stock, the holders of the Series C Preferred
Stock which is convertible into Class B Non-Voting Common Stock on the date
such dividend is paid shall be entitled to receive such dividend on an
as-converted to common stock basis.
(b) Dividends payable pursuant to Section 3(a) shall begin to accrue
and be cumulative from the Issue Date, whether or not earned or declared and
whether or not there exists profits, surplus or other funds legally available
for the payment of dividends. The amount of dividends payable for any period
shorter or longer than a full Dividend Period, including the first Dividend
Period, shall be determined on the basis of twelve 30-day months and a 360-day
year. Dividends paid on the shares of Series C Preferred Stock, including
dividends paid in an amount less than the total amount of such dividends at
the time accrued and payable on such shares, shall be allocated PRO RATA on a
share-by-share basis among all such shares at the time outstanding. The Board
of Directors may fix a record date for the determination of holders of shares
of Series C Preferred Stock entitled to receive payment of a dividend declared
thereon, which record date shall be no more than 60 days nor less than 10 days
prior to the date fixed for the payment thereof. If no record date is fixed,
the record date for determining holders of shares
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of Series C Preferred Stock entitled to receive payment of a dividend declared
thereon shall be at the close of business on the day on which the Board of
Directors declares such dividend.
Section 4. LIQUIDATION, DISSOLUTION OR WINDING UP.
(a) In the event of any liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, the holders of shares of
Series C Preferred Stock shall be entitled to receive, out of the assets of
the Corporation available for distribution to its stockholders, subject in all
events to the prior rights of the Series A Preferred Stock and the Series B
Preferred Stock, an amount equal to the greater of (i) the Liquidation
Preference per share of such series of Series C Preferred Stock plus all
accrued and unpaid dividends thereon (whether or not declared) to the date of
such payment and (ii) the amount such holders would be entitled to receive
upon such liquidation if such holders had converted all of the Series C
Preferred Stock into Class B Non-Voting Common Stock and Series D Preferred
Stock in accordance with and subject to the eligibility criteria set forth in
Section 7 hereof, and no distribution shall be made to the holders of shares
of Junior Stock upon liquidation, dissolution or winding up unless, prior
thereto, the holders of shares of Series C Preferred Stock shall have received
the foregoing amount (whether or not the declaration or payment of such
dividends is legally permissible or is prohibited by any agreement or
instrument to which the Corporation is subject). If, upon any such
liquidation, dissolution or winding up, the assets of the Corporation
available for distribution to the holders of Series C Preferred Stock shall be
insufficient to pay such holders the full amounts to which they shall be
entitled pursuant to this Section 4, the shares of Series C Preferred Stock
shall share ratably in any distribution of assets according to the respective
amounts which would be payable with respect to the shares held by them upon
such distribution if all amounts payable on or with respect to said shares
were paid in full.
(b) Neither the consolidation, merger or other business combination
of the Corporation with or into any other Person or Persons nor the sale,
lease, exchange or conveyance of all or any part of the property, assets or
business of the Corporation, shall be deemed to be a liquidation, dissolution
or winding up of the Corporation for purposes of this Section 4.
Section 5. VOTING RIGHTS.
Except for any voting rights provided by law, the holders of shares of
Series C Preferred Stock shall have no voting rights and their consent shall not
be required for the taking of any corporate action.
Section 6. RESTRICTIVE COVENANTS.
For so long as any shares of Series C Preferred Stock shall be
outstanding, and unless the consent or approval of a greater number of shares
shall then be required by law, without first obtaining the consent or approval
of the holders of at least a majority of the shares of Series C Preferred Stock
then outstanding, voting as a single class:
6.1 LIMITATION ON JUNIOR PAYMENTS.
(a) Subject to Section 6.1(b), the Corporation shall not, directly
or indirectly, (i) declare, pay, or set apart for payment on any Junior Stock,
any dividend or make any
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distribution on or in respect of Junior Stock (including any payment in
connection with any merger or consolidation involving the Corporation or any of
its Subsidiaries), except dividends or distributions payable in shares (other
than Disqualified Stock) of the classes or series upon which such dividends are
declared or paid, or payable in shares of Common Stock with respect to Junior
Stock other than Common Stock, together with cash in lieu of fractional shares,
or (ii) purchase, redeem, retire or otherwise acquire for value any Junior Stock
(any such dividend, distribution, purchase, redemption, or other acquisition
being herein referred to as a "JUNIOR PAYMENT").
(b) The provisions of Section 6.1(a) shall not prohibit: (i) any
purchase or redemption of Capital Stock of the Corporation made by exchange for,
or out of the proceeds of the substantially concurrent sale of, Capital Stock of
the Corporation (other than Disqualified Stock and other than Capital Stock
issued or sold to a Subsidiary); (ii) the repurchase, redemption or other
acquisition or retirement for value of Capital Stock of the Corporation pursuant
to any management equity subscription, stockholder or stock option agreement;
and (iii) any repurchase of Capital Stock from an "SBIC HOLDER" pursuant to the
Restated Certificate.
6.2 AMENDMENT OF FINANCING DOCUMENTS.
The Corporation will not amend or supplement the Senior Secured Notes
or the Senior Secured Notes Indenture, as in effect on the Closing Date (or
enter into any refinancing or replacement thereof, or any new financing
agreement) if such amended or supplemented or new financing agreement would
contain covenants that are more restrictive with respect to the ability of the
Corporation to perform its obligations set forth herein, or in the Merger
Agreement (only to the extent that such covenants relate to the Corporation's
obligations to the holders of the Preferred Stock), than those currently set
forth under the terms of the Existing Indebtedness or any document relating to
any class of Capital Stock of the Corporation.
6.3 SENIOR STOCK.
Except as may be required in order to comply with the terms and
provisions relating to the Series A Preferred Stock or the Series B Preferred
Stock, the Corporation shall not (i) authorize, create or issue any class or
series, or any shares of any class or series, of Senior Stock, unless the
proceeds from such issuance are used to redeem or repurchase all (but not less
than all) of the then outstanding shares of Series C Preferred Stock and Series
D Preferred Stock pursuant to the terms and conditions set forth herein and in
the Merger Agreement; (ii) reclassify any shares of capital stock of the
Corporation into shares of Senior Stock; or (iii) authorize or issue any
security exchangeable for, convertible into, or evidencing the right to purchase
any shares of Senior Stock.
6.4 RESTATED CERTIFICATE; BY-LAWS.
The Corporation shall not amend, alter or repeal the Restated
Certificate or By-Laws to alter or change the preferences, rights or powers of
the Series C Preferred Stock so as to affect the holders of the Series C
Preferred Stock adversely, to otherwise impair the rights of the holders of
Series C Preferred Stock, or to increase the authorized number of shares of
Series C Preferred Stock.
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6.5 MERGER AND CONSOLIDATION.
The Corporation shall not consolidate with or merge with or into, or
convey, transfer, lease or sell all or substantially all its assets to, any
Person, unless:
(a) All outstanding shares of Series C Preferred Stock are purchased
as a part of such transaction at a per share price of not less than the
Liquidation Preference of each such share plus all accrued and unpaid dividends
thereon through the date of such purchase; or
(b) (i) the Corporation is the surviving corporation or, if the
surviving corporation is not the Corporation, the resulting, surviving or
transferee Person (the "SUCCESSOR CORPORATION") shall be a corporation organized
and existing under the laws of the United States of America, any State thereof
or the District of Columbia and (x) the Successor Corporation (if not the
Corporation) shall expressly assume, by an amendment to the Merger Agreement in
form and substance satisfactory to the holders of at least 51% of all
outstanding shares of Series C Preferred Stock as of the date of such
assumption, all the obligations of the Corporation thereunder relating to the
Series C Preferred Stock, and (y) the Series C Preferred Stock shall be
converted or exchanged for and shall become shares of such Successor
Corporation, having in respect of such Successor Corporation the same powers,
preferences and relative participating, optional or other special rights, and
the qualifications, limitations or restrictions thereto, that the Series C
Preferred Stock had immediately prior to such transaction; and
(ii) the Corporation shall have delivered to the holders of the
Series C Preferred Stock an Officers' Certificate stating that such
consolidation, merger, transfer or lease complies with this Section 6.5.
The Successor Corporation shall succeed to, and be substituted for, and may
exercise every right and power of, the Corporation to the extent set forth in
the Merger Agreement, but in the case of a lease of all or substantially all its
assets, the Corporation shall not be released from its obligations with respect
to the Series C Preferred Stock.
6.6 NOTIFICATION OF CERTAIN EVENTS.
The Corporation shall mail to each holder of record of the Series C
Preferred Stock, within 30 days after the occurrence thereof, written notice in
the form of an Officers' Certificate of (i) the occurrence of any Event of
Noncompliance, and (ii) any failure by the Corporation to observe any covenant
specified herein or any covenant in the Merger Agreement that relates to the
Preferred Stock.
6.7 DISTRIBUTIONS OF JUNIOR STOCK.
Except as otherwise provided for in SECTION 6.1(B), for so long as the
Common Stock of the Corporation is not registered pursuant to Section 12 or 15
of the Exchange Act, any dividends, distributions or other payments made on or
in respect of Junior Stock shall be held by holders of Junior Stock in trust for
the benefit of the holders of Series C Preferred Stock and shall be remitted to
the holders of Series C Preferred Stock, on a pro-rata basis with respect to
their respective Liquidation Preference, until each holder of Series C Preferred
Stock has received an amount equal to its respective per share Liquidation
Preference plus all accrued and
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unpaid dividends; PROVIDED, HOWEVER, that the provisions of this Section 6.7
shall be subject in all respects to the preferences of the Series A Preferred
Stock and Series B Preferred Stock as in effect on the Closing Date including,
without limitation, the right of the holders of Series A Preferred Stock and
Series B Preferred Stock to receive distributions or other payments made in
respect of Junior Stock.
Section 7. CONVERSION.
(a) Upon the terms set forth in this Section 7, each holder of
shares of Series C-4 Preferred Stock shall have the right, at such holder's
option, at any time and from time to time during the period beginning on
December 31, 2004 and ending on the date that a Sale of the Corporation is
consummated (such period being referred to herein as the "Conversion Period"),
to convert the Series C-4 Preferred Stock as follows: the number of shares of
Series C-4 Preferred Stock to be converted shall convert into (i) an equal
number of shares of Class B Non-Voting Common Stock (subject to adjustment
pursuant to Section 10.7 of the Merger Agreement) plus (ii) a number of shares
of Series D Preferred Stock determined pursuant to the following formula:
A = B -- 2.26 C
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100
Where:
A = the number of shares of Series D Preferred Stock received upon the
conversion;
B = the aggregate Liquidation Preference of the Series C Preferred Stock
being converted by the holder; and
C = the number of shares of Class B Non-Voting Common Stock to be received
by such holder upon the conversion.
PROVIDED, HOWEVER, that the terms of this SECTION 7(A) is subject to adjustment
pursuant to and in accordance with Section 10.7 of the Merger Agreement. The
accrued but unpaid dividends on any shares of C-4 Preferred Stock converted in
accordance herewith shall become accrued but unpaid dividends on the Series D
Preferred Stock received upon such conversion, such dividends to be attributed
to such Series D Preferred Stock on a pro rata basis. The Corporation shall give
at least 10 Business Days' prior written notice of a Sale of the Corporation to
each holder of shares of Series C-4 Preferred Stock, in the manner set forth in
paragraph (e) below. The holder of any shares of Series C-4 Preferred Stock may
exercise the conversion right pursuant to this Section 7(a) by delivering to the
Corporation the certificate for the shares to be converted, duly endorsed or
assigned in blank or to the Corporation (if required by it), accompanied by
written notice stating that the holder elects to convert such shares. The holder
may also state in such notice that such conversion is conditioned upon the
consummation of the Sale of the Corporation and, in the event that the Sale of
the Corporation is not consummated, the Series C-4 Preferred Stock shall be
reissued to the holder in exchange for the shares of Class B Non-Voting Common
Stock and Series D Preferred Stock and any cash paid for fractional shares.
Conversion shall be deemed to have been effected on the date set forth on the
new stock certificates (each such date being referred to herein as a "Conversion
Date").
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(b) As promptly as practicable after the conversion of any shares of
Series C-4 Preferred Stock into Class B Non-Voting Common Stock and Series D
Preferred Stock under Section 7(a) above, the Corporation shall issue and
deliver to or upon the written order of such holder, to the place designated by
such holder, a certificate or certificates for the number of full shares of
Class B Non-Voting Common Stock and Series D Preferred Stock to which such
holder is entitled, and a cash amount in respect of any fractional interest in a
share of Class B Non-Voting Common Stock or Series D Preferred Stock as provided
in Section 7(c) below. Upon conversion of only a portion of the number of shares
covered by a certificate representing shares of Series C-4 Preferred Stock
surrendered for conversion, the Corporation shall issue and deliver to or upon
the written order of the holder of the certificate so surrendered for
conversion, at the expense of the Corporation, a new certificate covering the
number of shares of Series C-4 Preferred Stock representing the unconverted
portion of the certificate so surrendered.
(c) Upon conversion, the Corporation shall not issue fractional
shares of its Class B Non-Voting Common Stock or Series D Preferred Stock and
shall distribute cash in lieu of such fractional shares. In such a case, the
Corporation shall pay a cash adjustment in respect of such fractional interest
in an amount equal to the product of (i) (A) in the case of Class B Non-Voting
Common Stock, the fair market value of one share of Class B Non-Voting Common
Stock as determined in good faith by the Board or (B) in the case of Series D
Preferred Stock, the liquidation preference of a share of Series D Preferred
Stock and (ii) such fractional interest.
All shares of Class B Non-Voting Common Stock and Series D Preferred
Stock which may be issued in connection with the conversion provisions set forth
herein will, upon issuance by the Corporation, be validly issued, fully paid and
nonassessable and free from all taxes, liens or charges with respect thereto.
Any notice required by the provisions of this Section 7 to be given
the holders of shares of Series C Preferred Stock shall be deemed given three
Business Days after deposit in the United States mail, if sent via first class
certified mail, return receipt requested and postage paid, and addressed to each
holder or record at his address appearing on the stock books of the Corporation
or if sent by E-mail to the E-mail address in the Corporation's records.
(d) If, at any time after the Issue Date,
(i) the number of shares of Class B Non-Voting Common Stock
outstanding is increased by a stock dividend payable in shares of Class B
Non-Voting Common Stock or by a subdivision or split-up of shares of Class
B Non-Voting Common Stock, then, following the record date for the
determination of holders of Class B Non-Voting Common Stock entitled to
receive such stock dividend, subdivision or split-up (or if no record date
is set, the date such stock dividend, subdivision of stock split is
consummated), the Conversion Price shall be appropriately decreased so that
the number of shares of Class B Non-Voting Common Stock issuable on
conversion of each share of Series C Preferred Stock shall be increased in
proportion to such increase in outstanding shares; or
(ii) the number of shares of Class B Non-Voting Common Stock
outstanding is decreased by a combination of the outstanding shares of
Class B Non-
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Voting Common Stock, then, following the record date for such combination,
the Conversion Price shall be appropriately increased so that the number of
shares of Class B Non-Voting Common Stock issuable on conversion of each
share of Series C Preferred Stock shall be decreased in proportion to such
decrease in outstanding shares.
All calculations under this paragraph shall be made to the nearest .0001.
(e) Whenever the Conversion Price shall be adjusted as provided in
paragraph (d) above, the Corporation shall make available for inspection during
regular business hours, at its principal executive offices or at such other
place as may be designated by the Corporation, a statement, signed by its chief
executive officer, showing in detail the facts requiring such adjustment and the
Conversion Price that shall be in effect after such adjustment. The Corporation
shall also cause a copy of such statement to be sent by first class certified
mail, return receipt requested and postage prepaid, to each holder of Series C
Preferred Stock at such holder's address appearing on the Corporation's records.
Where appropriate, such copy may be given in advance and may be included as part
of any notice required to be mailed under the provisions of paragraph (f) below.
(f) If the Corporation shall propose to take any action of the types
described in paragraph (d) above, the Corporation shall give notice to each
holder of shares of Series C Preferred Stock, in the manner set forth in
paragraph (e) above, which notice shall specify the record date, if any, with
respect to any such action and the date on which such action is to take place.
Such notice shall also set forth such facts with respect thereto as shall be
reasonably necessary to indicate the effect of such action (to the extent such
effect may be known at the date of such notice) on the Conversion Price. In the
case of any action which would require the fixing of a record date, such notice
shall be given at least 10 days prior to the date so fixed, and in case of all
other action, such notice shall be given at least 10 days prior to the taking of
such proposed action. Failure to give such notice, or any defect therein, shall
not affect the legality or validity of any such action.
(g) The Corporation shall at all times during which the Series C
Preferred Stock shall be outstanding, reserve and keep available out of its
authorized but unissued stock, for the purpose of effecting the conversion of
the Series C Preferred Stock, such number of its duly authorized shares of Class
B Non Voting Common Stock and Series D Preferred Stock as shall from time to
time be sufficient to effect the conversion of all outstanding Series C
Preferred Stock.
Section 8. REDEMPTION.
(a) To the extent permitted under the terms of Existing
Indebtedness, the Series A Preferred Stock and the Series B Preferred Stock,
the Corporation shall redeem the Series C Preferred Stock in accordance with
the terms of Section 8(b) in the event of (i) the consummation of any
transaction that results in International owning, directly or indirectly,
immediately after the consummation of such transaction, less than two-thirds
of the Common Stock of the Corporation currently held by International, (ii)
the sale by Berry of all or substantially all of its assets to an unrelated
third party, (iii) the consummation of a registered public offering, or a
series of such public offerings, of Common Stock of the Corporation or
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Berry under the Securities Act of 1933, as amended, which result in aggregate
net cash proceeds to the Corporation or Berry of $50,000,000 or greater during
any one-year period, or (iv) the redemption in full of the Series A Preferred
Stock and Series B Preferred Stock and payment in full of all dividends payable
with respect thereto. The redemption price shall be at a price per share equal
to the Liquidation Preference plus all accrued and unpaid dividends thereon
through the date of the consummation of the redemption.
(b) Notice of any redemption of shares of Series C Preferred Stock
pursuant to this Section 8 shall be mailed not less than 10 Business Days nor
more than 60 days prior to the Redemption Date to each holder of shares of
Series C Preferred Stock to be redeemed, at such holder's address as it appears
on the transfer books of the Corporation. Each such notice shall state: (A) the
Redemption Date, (B) the place or places where the redemption price will be paid
(if other than the principal executive offices of the Corporation), (C) if less
than all the shares held by any holder are to be redeemed pursuant to paragraph
(a), the number of shares to be redeemed from such holder and (D) that dividends
on the shares of Series C Preferred Stock to be redeemed will cease to accrue on
the Redemption Date. In order to facilitate the redemption of shares of Series C
Preferred Stock, the Board of Directors may fix a record date for the
determination of shares of Series C Preferred Stock to be redeemed, not more
than 60 days nor less than 30 days prior to the applicable Redemption Date. In
the case of the redemption of less than all the outstanding shares of Series C
Preferred Stock pursuant to paragraph (a), (1) the shares to be redeemed shall
be selected PRO RATA among all holders of shares of Series C Preferred Stock on
the basis of the number of shares so held and (2) if fewer than all shares
represented by any certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares without cost to the holder thereof.
(c) Notice having been mailed as specified in Section 8(b), and
provided that on or before the Redemption Date specified in such notice all
funds necessary for such redemption shall have been set aside by the
Corporation, separate and apart from its other funds, in trust for the PRO RATA
benefit of the holders of the shares so called for redemption, so as to be and
to continue to be available therefor, then, from and after the Redemption Date,
dividends on the shares of Series C Preferred Stock called for redemption shall
cease to accrue and said shares shall no longer be deemed to be outstanding, and
all rights of the holders thereof set forth herein and otherwise as stockholders
of the Corporation (except the right to receive from the Corporation the
redemption price in accordance with this Section 8) shall cease.
Section 9. REACQUIRED SHARES.
Any shares of Series C Preferred Stock redeemed, purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be retired
and canceled promptly after the acquisition thereof, and, if necessary to
provide for the lawful redemption or purchase of such shares, the capital
represented by such shares shall be reduced in accordance with the DGCL. All
such shares shall upon their cancellation become authorized but unissued shares
of Preferred Stock and may be reissued as part of another series of Preferred
Stock (subject to any applicable limitations set forth herein).
* * * * *
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IN WITNESS WHEREOF, I have executed and subscribed this Certificate of
Designation, Preferences and Rights and do affirm the foregoing as true under
the penalties of perjury this 14th day of May, 2001.
/s/ James M. Kratochvil
-----------------------
James M. Kratochvil
Executive Vice President,
Chief Financial Officer
Treasurer and Secretary
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