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EXHIBIT 3.4
SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
TWINLAB CORPORATION
Pursuant to Section 245 of the
General Corporation Law
of the State of Delaware
Twinlab Corporation, a corporation organized and existing under the
laws of the State of Delaware (the "Company"), hereby certifies as follows:
1. The Company was originally incorporated under the name "TLG
Laboratories Holding Corp." The present name of the Company is Twinlab
Corporation.
2. That the Certificate of Incorporation of the Company was filed in
the office of the Secretary of State of the State of Delaware on the 27th day
of February, 1996. An Amended and Restated Certificate of Incorporation was
filed on the 6th day of May, 1996 and a Certificate of Amendment to the Amended
and Restated Certificate of Incorporation was filed in the Office of the
Secretary of State of the State of Delaware on the 7th day of June 1996.
3. That this Second Amended and Restated Certificate of Incorporation
amends and restates in its entirety the Certificate of Incorporation of the
Company, as heretofore amended.
4. That the text of the Certificate of Incorporation, as heretofore
amended, is hereby amended and restated to read in its entirety as follows:
FIRST: The name of the Company is Twinlab Corporation.
SECOND: The address of the registered office of the Company in
Delaware is 1013 Centre Road, Wilmington, Delaware 19805, and the name of the
registered agent of the Company at such address is The Prentice-Hall
Corporation System, Inc., New Castle County.
THIRD: The purpose of the Company is to engage in any lawful
act or activity for which corporations may be organized under the General
Corporation Law of Delaware (the "GCL").
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FOURTH: The total number of shares of all classes of stock
which the Company shall have authority to issue is seventy-seven million
(77,000,000) of which two million (2,000,000) shall be designated Preferred
Stock, par value $.01 per share (hereinafter the "Preferred Stock"), and
seventy-five million (75,000,000) shall be designated Common Stock, par value
$1.00 per share (hereinafter the "Common Stock").
A. AUTHORITY OF BOARD OF DIRECTORS TO FIX DESIGNATIONS, POWERS, PREFERENCES,
RIGHTS, QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS OF SHARES OF
PREFERRED STOCK NOT FIXED HEREBY.
Shares of Preferred Stock may be issued from time to time, in one or more
series, as may from time to time be determined by the Board of Directors, each
of said series to be distinctly designated. All shares of any one series of
Preferred Stock shall be alike in every particular, except that there may be
different dates from which dividends, if any, thereon shall be cumulative, if
made cumulative. The voting powers, designations and preferences and the
relative, participating, optional or other special rights of each such series,
and the qualifications, limitations or restrictions thereof, if any, may differ
from those of any and all other series at any time outstanding; and, subject to
the provisions of subparagraph 1 of Paragraph C of this Article FOURTH, the
Board of Directors hereby is expressly granted authority to fix by resolution
or resolutions adopted prior to the issuance of any shares of a particular
series of Preferred Stock, the voting powers, designations and preferences, the
relative, participating, optional or other special rights and the
qualifications, limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(a) the distinctive designation of, and the number of shares of
Preferred Stock which shall constitute, such series, which number may be
increased (except where otherwise provided by the Board of Directors) or
decreased (but not below the number of shares thereof then outstanding) from
time to time by like action of the Board of Directors;
(b) the rate and times at which, and the terms and conditions on
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which, dividends, if any, on Preferred Stock of such series shall be paid, the
extent of the preference or relation, if any, of such dividends to the
dividends payable on any other class or classes or series of the same or any
other class or classes of stock of the Company and whether such dividends shall
be cumulative or non-cumulative;
(c) the right, if any, of the holders of Preferred Stock of such
series to convert the same into, or exchange the same for, shares of any other
class or classes or of any series of the same or any other class or classes of
stock of the Company and the terms and conditions of such conversion or
exchange;
(d) whether or not Preferred Stock of such series shall be subject
to redemption, and the redemption price or prices and the time or times at
which, and the terms and conditions on which, Preferred Stock of such series
may be redeemed;
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(e) the terms of the sinking fund or redemption or purchase account,
if any, to be provided for the Preferred Stock of such series;
(f) the restrictions, if any, on the issuance of shares of the same
or any other class or classes or of any series of the same or any other class
or classes of stock of the Company;
(g) the rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger, consolidation,
distribution or sale of assets, dissolution or winding-up of the Company; and
(h) the voting powers, if any, of the holders of such series of
Preferred Stock which, without limiting the generality of the foregoing, may be
equal to, more than or less than one vote per share and may include the right,
voting as a series by itself or together with other series of Preferred Stock
or all series of Preferred Stock as a class, or, together with any other class
or classes or series of any other class or classes of stock of the Company, to
elect one or more directors of the Company if there shall have been a default
in the payment of dividends on any one or more series of Preferred Stock or
under such other circumstances and on such conditions as the Board of Directors
may determine.
B. STATEMENT OF LIMITATIONS, RELATIVE RIGHTS AND POWERS IN RESPECT OF COMMON
STOCK.
1. Subject to the provisions of Paragraph D of this Article FOURTH,
after the requirements with respect to preferential dividends on the Preferred
Stock (fixed in accordance with the provisions of Paragraph A of this Article
Fourth), if any, shall have been met and after the Company shall have complied
with all the requirements, if any, with respect to the setting aside of sums as
sinking funds or redemption or purchase accounts for the Preferred Stock (fixed
in accordance with the provisions of Paragraph A of this Article Fourth), and
subject further to any other conditions which may be fixed in accordance with
the provisions of Paragraph A of this Article FOURTH, then and not otherwise
the holders of Common Stock shall be entitled to receive such dividends as may
be declared from time to time by the Board of Directors.
2. Subject to the provisions of Paragraph D of this Article FOURTH,
after distribution in full of the preferential amount, if any, to be
distributed to the holders of Preferred Stock in the event of voluntary or
involuntary liquidation, dissolution or winding-up of the Company, the holders
of the Common Stock, subject to the rights, if any, of the holders of Preferred
Stock to participate therein (fixed in accordance with the provisions of
Paragraph A of this Article Fourth), shall be entitled to receive all the
remaining assets of the Company, tangible and intangible, of whatever kind
available for distribution to stockholders ratably in proportion to the number
of shares of Common Stock held by them, respectively.
3. Except as may otherwise be required by law, by the provisions of this
Article FOURTH or by the provisions of such resolution or resolutions as may be
adopted by the
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Board of Directors pursuant to the provisions of Paragraph A of this Article
Fourth, each holder of Common Stock shall have one vote in respect of each
share of Common Stock held by him on all matters voted upon by the
stockholders.
C. OTHER PROVISIONS.
1. The relative powers, preferences and rights of each series of
Preferred Stock in relation to the powers, preferences and rights of each other
series of Preferred Stock shall, in each case, be as set forth in Paragraph D
of this Article Fourth or as may be fixed from time to time by the Board of
Directors in such resolution or resolutions as may be adopted pursuant to
authority granted in Paragraph A of this Article FOURTH and, except as provided
in Paragraph D of this Article Fourth, the consent, by class or series vote or
otherwise, of the holders of each of the series of Preferred Stock as are from
time to time outstanding shall not be required for the issuance by the Board of
Directors of any other series of Preferred Stock whether or not the powers,
preferences and rights of such other series shall be fixed by the Board of
Directors as senior to, or on a parity with, the powers, preferences and rights
of such outstanding series, or any of them; provided, however, that the Board
of Directors may provide in the resolution or resolutions as to any series of
Preferred Stock adopted pursuant to the provisions of Paragraph A of this
Article FOURTH that the consent of the holders of a majority (or such greater
proportion as shall be therein fixed) of the outstanding shares of such series
voting thereon shall be required for the issuance of any or all other series of
Preferred Stock.
2. Subject to the provisions of this Paragraph C and of Paragraph D of
this Article Fourth, shares of any series of Preferred Stock may be issued from
time to time as the Board of Directors of the Company shall determine, for such
consideration and upon such terms as the Board of Directors may determine,
provided, however, that, so long as any shares of Senior Preferred Stock or
Junior Preferred Stock (as each such term is defined in the introduction to
Paragraph D of this Article FOURTH) are outstanding, no shares of any other
series of Preferred Stock may be authorized or issued.
3. Shares of Common Stock may be issued from time to time as the Board
of Directors of the Company shall determine, for such consideration and upon
such terms as the Board of Directors may determine.
4. The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased from time
to time by the affirmative vote of the holders of a majority of the stock of
the Company entitled to vote thereon.
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D. ISSUED AND OUTSTANDING PREFERRED STOCK.
The Company has issued the following series of Preferred Stock:
(i) 14% Senior Cumulative Preferred Stock (the "Senior
Preferred Stock"), par value $0.01 per share, with a liquidation
preference of $1,000 per share, consisting of 156,410 authorized
shares; and
(ii) 11.25% Junior Cumulative Preferred Stock (the "Junior
Preferred Stock"), par value $0.01 per share, with a liquidation
preference of $1,000 per share, consisting of 140,090 authorized
shares;
each of the foregoing series of Preferred Stock having the designations,
preferences, relative, participating, optional and other special rights
and the qualifications, limitations and restrictions thereof that are set
forth in this Article FOURTH as follows:
1. DESIGNATIONS OF THE COMPANY'S 14% SENIOR CUMULATIVE PREFERRED STOCK.
Capitalized terms used in this Section 1 and not expressly defined in
the text of this Section 1 shall have the meanings set forth in paragraph (l)
of this Section 1 of this Paragraph D.
(a) Designations.
Pursuant to the terms of the Amended and Restated Certificate of
Incorporation of the Company as in effect immediately prior to the
filing of this Second Amended and Restated Certificate of
Incorporation, the Company created out of the authorized and unissued
shares of Preferred Stock of the Company a series of Preferred Stock
designated as the "14% Senior Cumulative Preferred Stock." The number
of shares constituting such series shall be 156,410 shares of Senior
Preferred Stock, consisting of an initial issuance of 30,000 shares
of Senior Preferred Stock plus additional shares of Senior Preferred
Stock which may be issued to pay dividends on the Senior Preferred
Stock if the Company elects to pay dividends in additional shares of
Senior Preferred Stock (in lieu of cash). The liquidation preference
of the Senior Preferred Stock shall be $1,000 per share.
(b) Rank.
The Senior Preferred Stock shall, with respect to dividend
distributions and distributions upon the liquidation, winding up or
dissolution of the Company, rank senior to all classes of common
stock of the Company, and to each other class of capital stock or
series of preferred stock of the Company, including the Junior
Preferred Stock, now or hereafter created (collectively
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referred to with the common stock of the Company as "Junior
Securities"). The Senior Preferred Stock shall, with respect to
dividend distributions and distributions upon the liquidation,
winding up or dissolution of the Company, rank on a parity with any
class of capital stock or series of preferred stock of the Company
hereafter created which expressly provides that it ranks on a parity
with the Senior Preferred Stock as to dividend distributions and
distributions upon the liquidation, winding up or dissolution of the
Company ("Parity Securities"), provided that any such Parity
Securities that were not approved by the Holders of Senior Preferred
Stock in accordance with paragraph (f)(ii)(A) of this Section 1 shall
be deemed to be Junior Securities and not Parity Securities. The
Senior Preferred Stock shall, with respect to dividend distributions
and distributions upon the liquidation, winding up or dissolution of
the Company, rank junior to each class of capital stock or series of
preferred stock of the Company hereafter created which has been
approved by the Holders of Senior Preferred Stock in accordance with
paragraph (f)(ii)(B) of this Section 1 and which expressly provides
that it ranks senior to the Senior Preferred Stock as to dividend
distributions or distributions upon the liquidation, winding up or
dissolution of the Company ("Senior Securities").
(c) Dividends.
(i) Beginning on the date of issuance of shares of the Senior
Preferred Stock, the Holders of the outstanding shares of Senior
Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors, out of funds legally available
therefor, distributions in the form of cash dividends on each share
of Senior Preferred Stock, at a rate per annum equal to 14% of the
liquidation preference per share of the Senior Preferred Stock,
payable quarterly. All dividends shall be cumulative, whether or not
earned or declared, on a daily basis from the Preferred Stock Issue
Date and shall be payable quarterly in arrears on each Dividend
Payment Date, commencing on the first Dividend Payment Date after the
date of issuance of the Senior Preferred Stock, provided that if any
dividend payable on any Dividend Payment Date is not declared and
paid in full in cash on such Dividend Payment Date, the amount
payable as dividends on such Dividend Payment Date that is not paid
in cash on such Dividend Payment Date shall be paid by the Company in
additional fully paid and non-assessable shares (including fractional
shares, if applicable) of Senior Preferred Stock having an aggregate
liquidation preference equal to the amount of such dividends (rounded
to the nearest whole cent); it being understood that dividends shall
begin to accrue from such Dividend Payment Date on such additional
shares of Senior Preferred Stock whether such additional shares of
Senior Preferred Stock are issued on such date or any later date or
are never issued. The payment by the Company in such additional
shares of Senior Preferred Stock shall constitute full payment of
such dividend. Each distribution in the form of a dividend (whether
in cash or in additional shares of Senior Preferred Stock) shall be
payable to the Holders of Senior Preferred Stock of record as
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they appear on the stock books of the Company on such record dates,
not less than 10 nor more than 45 days preceding the related Dividend
Payment Date, as shall be fixed by the Board of Directors. So long as
any of the Blechman Brothers is a member of the Board of Directors,
any determination of the Board of Directors to pay any dividend on
the Senior Preferred Stock in cash shall be made by decision of a
majority of the Disinterested Directors; provided, however, that the
declaration and payment of cash dividends on the Senior Preferred
Stock shall be subject to contractual and other restrictions with
respect thereto and the legal availability of funds therefor.
Dividends shall cease to accrue in respect of shares of the Senior
Preferred Stock on the date of their redemption unless the Company
shall have failed to pay the relevant redemption price on the date
fixed for redemption.
(ii) All dividends paid with respect to shares of the Senior
Preferred Stock pursuant to paragraph (c)(i) of this Section 1 shall
be paid pro rata to the Holders thereof entitled thereto.
(iii) Dividends on account of arrears for any past Dividend
Period and dividends in connection with any optional redemption
pursuant to paragraph (e)(i) of this Section 1 may be declared and
paid at any time, without reference to any regular Dividend Payment
Date, to Holders of Senior Preferred Stock of record on such date,
not more than 45 days prior to the payment thereof, as may be fixed
by the Board of Directors.
(iv) No full dividends shall be declared by the Board of
Directors or paid or funds set apart for payment of dividends by the
Company on any Parity Securities for any period unless full
cumulative dividends shall have been or contemporaneously are
declared and paid in full, or declared and (in the case of dividends
payable in cash) a sum in cash set apart sufficient for such payment,
on the Senior Preferred Stock for all Dividend Periods terminating on
or prior to the date of payment of such full dividends on such Parity
Securities. If any dividends are not paid in full, as aforesaid,
upon the shares of the Senior Preferred Stock and any other Parity
Securities, all dividends declared upon shares of the Senior
Preferred Stock and any other Parity Securities shall be declared pro
rata based on the relative liquidation preference of the Senior
Preferred Stock and such Parity Securities. So long as any shares of
the Senior Preferred Stock are outstanding, the Company shall not
make any payment on account of, or set apart for payment money for a
sinking or other similar fund for, the purchase, redemption or other
retirement of, any of the Parity Securities or any warrants, rights,
calls or options exercisable for or convertible into any of the
Parity Securities, and shall not permit any corporation or other
entity directly or indirectly controlled by the Company to purchase
or redeem any of the Parity Securities or any such warrants, rights,
calls or options.
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(v) So long as any shares of Senior Preferred Stock are
outstanding, the Company shall not (A) declare, pay or set apart for
payment any dividend on any of the Junior Securities or make any
payment on account of, or set apart for payment money for a sinking
or other similar fund for, the purchase, redemption or other
retirement of, any of the Junior Securities or any warrants, rights,
calls or options exercisable for or convertible into any of the
Junior Securities (other than the repurchase, redemption or other
acquisition or retirement for value of Junior Securities (and any
warrants, rights, calls or options exercisable for or convertible
into such Junior Securities) held by certain employees of or
consultants or advisors to the Company or any of its Subsidiaries,
which repurchase, redemption or other acquisition or retirement shall
have been approved by a majority of the Outside Directors, provided
that such Junior Securities may only be repurchased, redeemed or
otherwise acquired or retired either in exchange for Junior
Securities or upon the termination, retirement, death or disability
of such employee, consultant or advisor), or (B) make any
distribution in respect thereof, either directly or indirectly, and
whether in cash, obligations or shares of the Company or other
property (other than distributions or dividends in Junior Securities
to the holders of Junior Securities), or (C) permit any corporation
or other entity directly or indirectly controlled by the Company to
purchase or redeem any of the Junior Securities or any such warrants,
rights, calls or options, unless in any such case referred to in
clause (A), (B) or (C) of this paragraph (c)(v) full cumulative
dividends determined in accordance herewith have been paid in full on
the Senior Preferred Stock and the action does not violate the
provisions of paragraph (f)(ii)(D) of this Section 1.
(vi) Dividends payable on shares of the Senior Preferred Stock
for any period less than a year shall be computed on the basis of a
360-day year of twelve 30-day months and the actual number of days
elapsed in the period for which payable. If any Dividend Payment Date
occurs on a day that is not a Business Day, any accrued dividends
otherwise payable on such Dividend Payment Date shall be paid on the
next succeeding Business Day.
(d) Liquidation Preference.
(i) Upon any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Company, the Holders
of shares of Senior Preferred Stock then outstanding shall be
entitled to be paid, out of the assets of the Company available for
distribution to its stockholders, $1,000 per share of Senior
Preferred Stock (the "liquidation preference"), plus an amount in
cash equal to accrued and unpaid dividends thereon to the date fixed
for liquidation, dissolution or winding up (including an amount equal
to a prorated dividend for the period from the last Dividend Payment
Date to the date fixed for liquidation, dissolution or winding up)
before any payment shall be made or any assets distributed to the
holders of any of the Junior Securities, including, without
limitation, Junior Preferred Stock or common stock of the
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Company. Except as provided in the preceding sentence, Holders of
shares of Senior Preferred Stock shall not be entitled to any
distribution in the event of liquidation, dissolution or winding up
of the affairs of the Company. If the assets of the Company are not
sufficient to pay in full the liquidation payments payable to the
Holders of outstanding shares of the Senior Preferred Stock and the
holders of all outstanding Parity Securities, then the holders of all
such shares shall share equally and ratably in such distribution of
assets of the Company in accordance with the amounts which would be
payable on such distribution if the amount to which the Holders of
outstanding shares of Senior Preferred Stock and the holders of
outstanding shares of all Parity Securities are entitled were paid in
full.
(ii) For the purposes of this paragraph (d), neither the sale,
conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the
property or assets of the Company nor the consolidation or merger of
the Company with or into one or more corporations or other entities
shall be deemed to be a liquidation, dissolution or winding up of the
affairs of the Company.
(e) Redemption.
(i) Optional Redemption
(A) The Company may (subject to contractual and other
restrictions with respect thereto and the legal availability of
funds therefor), at the option of the Company, redeem at any
time or from time to time, from any source of funds legally
available therefor, in whole or in part, in the manner provided
in paragraph (e)(iii) of this Section 1, any or all of the
shares of the Senior Preferred Stock, at a redemption price
equal to 100% of the liquidation preference per share plus,
without duplication, an amount in cash equal to all accrued and
unpaid dividends per share (including an amount in cash equal to
a prorated dividend for the period from the Dividend Payment
Date immediately prior to the Redemption Date to the Redemption
Date), provided that no optional redemption pursuant to this
paragraph (e)(i)(A) shall be authorized or made at any time when
the Company is making or required to make within the next 30
days, or purchasing shares of Senior Preferred Stock under, a
Change of Control Offer in accordance with the provisions of
paragraph (g) of this Section 1 and provided, further, that no
optional redemption of only a portion of the then outstanding
shares of Senior Preferred Stock shall be authorized or made at
any time when full cumulative dividends on the Senior Preferred
Stock for all past Dividend Periods have not been declared and
paid in full. So long as any of the Blechman Brothers is a
member of the Board of Directors, any determination of the Board
of Directors to redeem, at the option of the Company, any shares
of Senior
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Preferred Stock shall be made by decision of a majority of the
Disinterested Directors.
(B) In the event of a redemption pursuant to
paragraph (e)(i)(A) of this Section 1 of only a portion of the
then outstanding shares of the Senior Preferred Stock, the
Company shall effect such redemption as it determines, pro rata
according to the number of shares held by each Holder of Senior
Preferred Stock or by lot, as may be determined by the Company
in its sole discretion.
(ii) Mandatory Redemption. On May 1, 2007, the Company shall
redeem, from any source of funds legally available therefor, in the
manner provided in paragraph (e)(iii) of this Section 1, all of the
shares of the Senior Preferred Stock then outstanding at a redemption
price equal to 100% of the liquidation preference per share, plus,
without duplication, an amount in cash equal to all accrued and
unpaid dividends per share (including an amount equal to a prorated
dividend for the period from the Dividend Payment Date immediately
prior to the Redemption Date to the Redemption Date).
(iii) Procedures for Redemption.
(A) At least 15 days and not more than 60 days prior
to the date fixed for any redemption of the Senior Preferred
Stock, written notice of redemption (the "Redemption Notice")
shall be given by first-class mail, postage prepaid, to each
Holder of Senior Preferred Stock to be redeemed, at such
Holder's address as the same appears on the stock register of
the Company, provided that no failure to give such notice nor
any deficiency therein shall affect the validity of the
procedure for the redemption of any shares of Senior Preferred
Stock to be redeemed except as to the Holder or Holders to whom
the Company has failed to give said notice or except as to the
Holder or Holders whose notice was defective. The Redemption
Notice shall state: (1) whether the redemption is pursuant to
paragraph (e)(i) or (e)(ii) of this Section 1; (2) the
redemption price; (3) whether all or less than all the
outstanding shares of the Senior Preferred Stock are to be
redeemed and the total number of shares of the Senior Preferred
Stock being redeemed; (4) the number of shares of Senior
Preferred Stock held by the Holder that the Company intends to
redeem; (5) the date fixed for redemption; (6) that the Holder
is to surrender to the Company, at the place or places where
certificates for shares of Senior Preferred Stock are to be
surrendered for redemption, in the manner and at the price
designated, his certificate or certificates representing the
shares of Senior Preferred Stock to be redeemed; and (7) that
dividends on the shares of the Senior Preferred Stock to be
redeemed shall cease to accrue on such Redemption Date unless
the Company defaults in the payment of the redemption price.
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(B) Each Holder of Senior Preferred Stock shall
surrender to the Company the certificate or certificates
representing his shares of Senior Preferred Stock to be
redeemed, duly endorsed, in the manner and at the place
designated in the Redemption Notice, and on the Redemption Date
the full redemption price for such shares shall be payable in
cash to the Person whose name appears on such certificate or
certificates as the owner thereof, and each surrendered
certificate shall be canceled and retired. In the event that
less than all of the shares represented by any such certificate
are redeemed, a new certificate shall be issued representing the
unredeemed shares without cost to the Holder thereof.
(C) Unless the Company defaults in the payment in
full of the applicable redemption price, dividends on the shares
of Senior Preferred Stock called for redemption shall cease to
accrue on the Redemption Date, and the Holders of such shares
shall cease to have any further rights with respect thereto on
the Redemption Date, other than the right to receive the
redemption price, without interest.
(f) Voting Rights.
(i) The Holders of shares of the Senior Preferred Stock,
except as otherwise required under Delaware law or as set forth in
paragraph (f)(ii) below, shall not be entitled or permitted to vote
on any matter required or permitted to be voted upon by the
stockholders of the Company.
(ii) (A) So long as any shares of the Senior
Preferred Stock are outstanding, the Company shall not authorize
or issue any class or series of Parity Securities without the
affirmative vote or consent of Holders of at least a majority of
the outstanding shares of Senior Preferred Stock, voting or
consenting, as the case may be, separately as one class, given
in person or by proxy, either in writing or by resolution
adopted at an annual or special meeting, except that without the
approval of Holders of Senior Preferred Stock, the Company may
issue shares of Parity Securities in exchange for, or the
proceeds of which are used to redeem or repurchase, all shares
of Senior Preferred Stock then outstanding.
(B) So long as any shares of the Senior Preferred
Stock are outstanding, the Company shall not authorize or issue
any class or series of Senior Securities without the affirmative
vote or consent of Holders of at least a majority of the
outstanding shares of Senior Preferred Stock, voting or
consenting, as the case may be, separately as one class, given
in person or by proxy, either in writing or by resolution
adopted at an annual or special meeting.
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(C) So long as any shares of the Senior Preferred
Stock are outstanding, the Company shall not, without the
affirmative vote or consent of Holders of at least a majority of
the outstanding shares of Senior Preferred Stock, voting or
consenting, as the case may be, separately as one class, given
in person or by proxy, either in writing or by resolution
adopted at an annual or special meeting, (1) amend, alter or
repeal any of the provisions of the Certificate of Incorporation
or By-laws of the Company or of any certificate amendatory
thereof or supplemental thereto so as to affect adversely any of
the preferences, rights, powers or privileges of the Senior
Preferred Stock or of the holders thereof as such, (2) issue any
additional shares of Senior Preferred Stock (other than in
payment of dividends on the Senior Preferred Stock) or (3)
consolidate or merge with or into (whether or not the Company is
the surviving or resulting entity), or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all
of the properties or assets of the Company (or of the Company
and its Subsidiaries, taken as a whole) in one or more related
transactions, to another corporation, Person or entity unless
(x) all outstanding shares of Senior Preferred Stock will be
redeemed upon consummation of such transaction or (y) (I) the
Company is the surviving corporation or the entity formed by or
surviving any such consolidation or merger (if other than the
Company) or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made is a
corporation organized and existing under the laws of the United
States, any state thereof or the District of Columbia; (II) the
Senior Preferred Stock shall (q) be converted into or exchanged
for and shall become shares of such successor, transferee or
resulting corporation, having in respect of such successor,
transferee or resulting corporation the same preferences,
powers, rights and privileges that the Senior Preferred Stock
had immediately prior to such transaction or (r) if the Company
is the surviving corporation in such transaction, remain
outstanding with the same preferences, powers, rights and
privileges as it had immediately prior to such transaction; and
(III) the Company or the entity or Person formed by or surviving
any such consolidation or merger (if other than the Company) or
to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made, as the case may be,
shall have a Consolidated Net Worth immediately after the
transaction equal to or greater than the Consolidated Net Worth
of the Company immediately preceding the transaction (without
giving effect to any purchase accounting adjustments related to
such transaction). Notwithstanding the foregoing, the mergers of
Twin Laboratories Inc., Alvita Products, Inc., Twinlab Specialty
Corporation, Twinlab Export Corp., and B. Bros. Realty
Corporation into Natur-Pharma Inc., and the merger of Advanced
Research Press, Inc. with Natur-Pharma II Inc., a wholly-owned
subsidiary of Natur- Pharma Inc. (collectively, the "Mergers"),
in each case in connection
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with the consummation of the Stock Purchase and Sale Agreement,
dated as of March 5, 1996, among David Blechman, Jean Blechman,
Brian Blechman, Neil Blechman, Ross Blechman, Steve Blechman,
Dean Blechman, Stephen Welling, TLG Laboratories Holding Corp.,
Natur-Pharma Inc., and Green Equity Investors II, L.P., shall be
permitted. The affirmative vote or consent of Holders of at
least a majority of the outstanding shares of Senior Preferred
Stock, voting or consenting, as the case may be, separately as
one class, whether voting in person or by proxy, either in
writing or by resolution adopted at an annual or special meeting,
may waive compliance with any provision of this Section 1.
(D) So long as any shares of the Senior Preferred
Stock are outstanding, the Company shall not, without the
affirmative vote or consent of Holders of at least a majority of
the outstanding shares of Senior Preferred Stock, voting or
consenting, as the case may be, separately as one class, given
in person or by proxy, either in writing or by resolution
adopted at an annual or special meeting, (1) declare, pay or set
apart for payment any dividend on any of the Junior Securities
(other than dividends or distributions in Junior Securities to
the holders of Junior Securities) or make any payment on account
of, or set apart for payment money for a sinking or other
similar fund for, the purchase, redemption or other retirement
of, any of the Junior Securities or any warrants, rights, calls
or options exercisable for or convertible into any of the Junior
Securities (other than the repurchase, redemption or other
acquisition or retirement for value of Junior Securities (and
any warrants, rights, calls or options exercisable for or
convertible into such Junior Securities) held by certain
employees of or consultants or advisors to the Company or any of
its Subsidiaries, which repurchase, redemption or other
acquisition or retirement shall have been approved by a majority
of the Outside Directors, provided that such Junior Securities
may only be repurchased, redeemed or otherwise acquired or
retired either in exchange for Junior Securities or upon the
termination, retirement, death or disability of such employee,
consultant or advisor), or (2) make any distribution in respect
thereof, either directly or indirectly, and whether in cash,
obligations or shares of the Company or other property (other
than distributions or dividends in Junior Securities to the
holders of Junior Securities), or (3) permit any corporation or
other entity directly or indirectly controlled by the Company to
purchase or redeem any of the Junior Securities or any such
warrants, rights, calls or options. Notwithstanding the
foregoing provisions of this clause (D), the Company may,
without the approval of the Holders of the Senior Preferred
Stock, but subject to the provisions of paragraph (c)(v) of this
Section 1, (1) pay in cash the amount payable as dividends on
shares of Junior Preferred Stock on any Dividend Payment Date if
the entire amount of the dividends
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payable on the Senior Preferred Stock on such Dividend Payment
Date is also paid in cash and/or (2) pay a dividend or
distribution on Junior Securities in shares of the capital stock
of Advanced Research Press, Inc., a New York corporation.
(E) So long as any shares of the Senior Preferred
Stock are outstanding, without the affirmative vote or consent
of Holders of at least a majority of the outstanding shares of
Senior Preferred Stock, voting or consenting, as the case may
be, separately as one class, given in person or by proxy, either
in writing or by resolution adopted at an annual or special
meeting, neither the Company nor any of its Subsidiaries shall
enter into any transaction which violates the provisions of the
first sentence, or clause (2) of the second sentence, of Section
4.9 (Limitation on Transactions with Affiliates) of the
Indenture governing the 10 1/4% Senior Subordinated Notes of
Twin Laboratories Inc., as such Indenture is in effect on the
Preferred Stock Issue Date.
(F) Except as set forth in paragraphs (f)(ii))(A),
(f)(ii)(B) and (f)(ii)(C) above, (1) the creation, authorization
or issuance of any shares of any Junior Securities, Parity
Securities or Senior Securities, or (2) the increase or decrease
in the amount of authorized capital stock of any class or
series, including any preferred stock, shall not in either case
require the consent of Holders of Senior Preferred Stock and
shall not in either case, unless not complying with paragraphs
(f)(ii)(A) and (f)(ii)(B) above, be deemed to affect adversely
the rights, preferences, privileges or voting rights of Holders
of shares of Senior Preferred Stock.
(iii) In any case in which the Holders of shares of the Senior
Preferred Stock shall be entitled to vote pursuant to this paragraph
(f) or pursuant to Delaware law, each Holder of shares of the Senior
Preferred Stock shall, except as provided in paragraph (f)(iv) below,
be entitled to one vote for each share of Senior Preferred Stock
held.
(iv) In any case in which the Holders of shares of the Senior
Preferred Stock shall be entitled to vote pursuant to this paragraph
(f), shares of Senior Preferred Stock beneficially owned by Green
Equity Investors II, L.P. ("GEI"), David Blechman, Jean Blechman, any
of the Blechman Brothers, or any of their respective affiliates or
any other affiliate of the Company shall not be entitled to be voted
and, for purposes of this paragraph (f), shall not be deemed to be
outstanding; provided, however, that, for purposes of this paragraph
(f)(iv), no Person shall be deemed to be an affiliate of GEI or of
the Company solely by reason of the fact that such Person is a
limited partner of GEI.
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(g) Change of Control Offer.
Subject to contractual and other restrictions thereon, upon the
occurrence of a Change of Control, the Company shall make an offer (a
"Change of Control Offer") to each Holder of Senior Preferred Stock
to repurchase any or all of such Holder's shares of Senior Preferred
Stock at a purchase price in cash equal to 101.0% of the aggregate
liquidation preference thereof, plus, without duplication, an amount
equal to all accrued and unpaid dividends thereon (including an
amount equal to the prorated dividend for the period from the
Dividend Payment Date immediately prior to the date of repurchase to
the date of repurchase), if any, to the date of repurchase (the
"Change of Control Payment").
(A) Within 30 days following any Change of Control, the Company
shall mail a notice to each Holder of Senior Preferred Stock stating:
(1) that the Change of Control Offer is being made pursuant to this
paragraph (g) and that all shares of Senior Preferred Stock duly
tendered will be accepted for payment; (2) the purchase price and the
purchase date, which shall be no sooner than 30 nor later than 60
days from the date such notice is mailed (the "Change of Control
Payment Date"); (3) that any shares not tendered will continue to
accrue dividends; (4) that, unless the Company defaults in the
payment of the Change of Control Payment, dividends on all shares of
Senior Preferred Stock accepted for payment pursuant to the Change of
Control Offer shall cease to accrue on the Change of Control Payment
Date; (5) that Holders electing to have any shares of Senior
Preferred Stock repurchased pursuant to a Change of Control Offer
will be required to surrender such shares, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the shares of
Senior Preferred Stock, completed, or transfer by book-entry
transfer, to the Company or its transfer agent at the address
specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date; (6) that
Holders will be entitled to withdraw their election if the Company or
the transfer agent, as the case may be, receives, not later than the
close of business on the third Business Day preceding the Change of
Control Payment Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the number of shares of
Senior Preferred Stock delivered for repurchase, and a statement that
such Holder is withdrawing his election to have such shares
repurchased; and (7) that Holders whose shares of Senior Preferred
Stock are being repurchased only in part will be issued new shares of
Senior Preferred Stock equal in liquidation preference to the
unpurchased portion of the shares of Senior Preferred Stock
surrendered (or transferred by book-entry transfer), which
unpurchased portion must be equal to $1,000 in liquidation preference
or an integral multiple thereof.
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(B) On the Change of Control Payment Date, the Company shall,
to the extent lawful, (1) accept for payment all shares of Senior
Preferred Stock or portions thereof properly tendered pursuant to the
Change of Control Offer, and (2) deposit with the Company or its
transfer agent an amount equal to the Change of Control Payment in
respect of all shares of Senior Preferred Stock or portions thereof
so tendered. The Company or its transfer agent, as the case may be,
shall promptly mail to each Holder of shares of Senior Preferred
Stock so tendered the Change of Control Payment for such shares or
portions thereof. The Company shall promptly issue a certificate
representing shares of Senior Preferred Stock and mail (or cause to
be transferred by book entry) to each Holder a new certificate
representing shares of Senior Preferred Stock equal in liquidation
preference to any unpurchased portion of such shares surrendered by
such Holder, if any; provided, that each such certificate shall
represent shares having a liquidation preference of $1,000 or an
integral multiple thereof. The Company shall announce to its
stockholders the results of the Change of Control Offer on or as soon
as practicable after the Change of Control Payment Date.
(C) The Company shall comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of shares of Senior
Preferred Stock in connection with a Change of Control.
(h) Conversion or Exchange.
The Holders of shares of Senior Preferred Stock shall not have any
rights or obligations to convert such shares into or exchange such shares
for shares of any other class or classes or of any other series of any
class or classes of Capital Stock of the Company or any other securities
of the Company.
(i) Preemptive Rights.
No shares of Senior Preferred Stock shall have any rights of
preemption whatsoever as to any securities of the Company, or any
warrants, rights or options issued or granted with respect thereto,
regardless of how such securities or such warrants, rights or options may
be designated, issued or granted.
(j) Reissuance of Senior Preferred Stock.
Shares of Senior Preferred Stock that have been issued and reacquired
in any manner, including shares purchased or redeemed, shall (upon
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compliance with any applicable provisions of the laws of Delaware) have
the status of authorized but unissued shares of Preferred Stock of the
Company undesignated as to series and, subject to the provisions of
paragraph (f) of this Section 1, may be designated or redesignated and
issued or reissued, as the case may be, as part of any series of Preferred
Stock of the Company, provided that such shares may not in any event be
reissued as Senior Preferred Stock (other than in payment of dividends on
Senior Preferred Stock).
(k) Business Day.
If any payment, redemption or exchange shall be required by the terms
hereof to be made on a day that is not a Business Day, such payment,
redemption or exchange shall be made on the immediately succeeding
Business Day.
(l) Definitions.
As used in this Section 1, the following terms shall have the
following meanings (with terms defined in the singular having comparable
meanings when used in the plural and vice versa), unless the context
otherwise requires:
"Affiliate" of any specified Person means 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"), as used
with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of
voting securities, by agreement or otherwise; provided that beneficial
ownership of 10.0% or more of the voting securities of a Person shall be
deemed to be control.
"Blechman Brothers" means Brian Blechman, Dean Blechman, Neil
Blechman, Ross Blechman and Steve Blechman.
"Board of Directors" means the Board of Directors of the Company.
"Business Day" means any day other than a Legal Holiday.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership,
partnership interests (whether general or limited) and (iv) 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, the
issuing Person.
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"Certificate of Incorporation" means the Company's Certificate of
Incorporation.
"Change of Control" means (i) any merger or consolidation of New Twin
or the Company with or into any Person or any sale, transfer or other
conveyance, whether direct or indirect, of all or substantially all of the
assets of either New Twin or the Company, on a consolidated basis, in one
transaction or a series of related transactions, if, immediately after
giving effect to such transaction, any "person" or "group," other than any
Excluded Person or Excluded Persons, is or becomes the "beneficial owner"
(as such terms are used for purposes of Sections 13(d) and 14(d) of the
Exchange Act, whether or not applicable), directly or indirectly, of more
than 50% of the total voting power in the aggregate normally entitled to
vote in the election of directors, managers, or trustees, as applicable,
of the transferee or surviving entity, (ii) any "person" or "group" other
than an Excluded Person or Excluded Persons, is or becomes the "beneficial
owner," directly or indirectly, of more than 50% of the total voting power
in the aggregate of all classes of Capital Stock of New Twin then
outstanding normally entitled to vote in elections of directors, provided
that any "person or "group" will be deemed to "beneficially own" any
Capital Stock of New Twin held by the Company so long as such person or
group "beneficially owns," directly or indirectly, in the aggregate a
majority of the Capital Stock of the Company then outstanding normally
entitled to vote in elections of directors, or (iii) during any period of
12 consecutive months after the Merger Date, individuals who at the
beginning of any such 12-month period constituted the board of directors
of either New Twin or the Company (together, in each case, with any new
directors whose election by such board or whose nomination for election by
the shareholders of New Twin was approved by LGP or a Related Party of LGP
or by the Excluded Persons or by a vote of a majority 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 the board of
directors of New Twin or the Company then in office, as applicable.
"Company" means this corporation.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common stockholders of
such Person and its consolidated Subsidiaries as of such date plus (ii)
the respective amounts reported on the balance sheet of such Person and
its consolidated Subsidiaries as of such date with respect to any series
of preferred stock (other than Disqualified Stock) that by its terms is a
Junior Security, determined in accordance with GAAP.
"Disinterested Directors" means directors who are not Affiliates of
LGP or Persons designated by GEI and its Affiliates pursuant to the
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Stockholders Agreement among GEI, the Blechman Brothers, Stephen Welling
and the Company as in effect on the Preferred Stock Issue Date.
"Disqualified Stock" means any Capital Stock which, by its terms (or
by the terms of any security into which it is convertible or for which it
is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the option of the holder thereof, in whole
or in part, on or prior to May 1, 2007.
"Dividend Payment Date" means each February 1, May 1, August 1 and
November 1 following the Preferred Stock Issue Date.
"Dividend Period" means the Initial Dividend Period and, thereafter,
each Quarterly Dividend Period.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.
"Excluded Person" means collectively or individually Green Equity
Investors II, L.P., David Blechman, Jean Blechman and the Blechman
Brothers, and their respective Related Parties.
"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 from
time to time.
"Holder" means a Person in whose name a share of Senior Preferred
Stock is registered.
"Initial Dividend Period" means the dividend period commencing on the
Preferred Stock Issue Date and ending on the day before the first Dividend
Payment Date to occur thereafter.
"Junior Preferred Stock" means the Company's 11.25% Junior Cumulative
Preferred Stock, par value $0.01 per share, with a liquidation preference
of $1,000 per share, consisting of 140,090 shares.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York are authorized by law, regulation or
executive order to remain closed.
"LGP" means Leonard Green & Partners, L.P.
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"Merger Date" means the date of the consummation of the Mergers.
"New Twin" means Natur-Pharma Inc. (to be renamed Twin Laboratories
Inc.), as such entity will exist from and after the consummation of the
Mergers.
"Outside Directors" means directors other than the Blechman Brothers,
their parents or their descendants who are not officers or employees of
the Company or of any of its Subsidiaries.
"Person" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company,
trust, unincorporated organization or government or agency or political
subdivision thereof (including any subdivision or ongoing business of any
such entity or substantially all of the assets of any such entity,
subdivision or business).
"Preferred Stock Issue Date" means the date on which the Senior
Preferred Stock is originally issued by the Company under this Section 1.
"Quarterly Dividend Period" shall mean the quarterly period
commencing on each February 1, May 1, August 1, and November 1 and ending
on the day before the following Dividend Payment Date.
"Redemption Date" with respect to any shares of Senior Preferred
Stock, means the date on which such shares of Senior Preferred Stock are
redeemed by the Company.
"Related Party" means (i) with respect to any Excluded Person, (A)
any controlling stockholder, 80% or more owned Subsidiary, or spouse or
immediate family member (in the case of an individual) of such Excluded
Person or (B) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or persons holding an 80% or
more controlling interest of which consist of such Excluded Person and/or
such other persons referred to in the immediately preceding clause (A),
and (ii) only with respect to Green Equity Investors II, L.P. (and in
addition to the persons described in the foregoing clause (i)) any
partnership or corporation which is managed by or controlled by LGP or any
affiliate thereof. For the purposes of this definition "control" of any
Person shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities or by contract
or otherwise.
"SEC" means the Securities and Exchange Commission.
"Senior Preferred Stock" means the Company's 14% Senior Cumulative
Preferred Stock.
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"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50.0% of the total
voting power of shares of Capital Stock 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 such Person or one or more of the other Subsidiaries of
that Person (or a combination thereof).
"Voting Stock" of any Person means the Capital Stock of such Person
with voting power, under ordinary circumstances, to elect directors of
such Person.
(m) Application of Definitions.
The definitions of terms in this Section 1 shall apply solely to such
terms as used in this Section 1.
2. DESIGNATIONS OF THE COMPANY'S 11.25% JUNIOR CUMULATIVE PREFERRED STOCK.
Capitalized terms used in this Section 2 and not expressly defined in
the text of this Section 2 shall have the meanings set forth in paragraph
(l) of this Section 2 of this Paragraph D.
(a) Designations.
Pursuant to the terms of the Amended and Restated Certificate of
Incorporation of the Company as in effect immediately prior to the filing
of this Second Amended and Restated Certificate of Incorporation, the
Company created out of the authorized and unissued shares of Preferred
Stock of the Company a series of Preferred Stock designated as the "11.25%
Junior Cumulative Preferred Stock." The number of shares constituting such
series shall be 140,090 shares of Junior Preferred Stock, consisting of an
initial issuance of 37,000 shares of Junior Preferred Stock plus
additional shares of Junior Preferred Stock which may be issued to pay
dividends on the Junior Preferred Stock if the Company pays dividends in
additional shares of Junior Preferred Stock (in lieu of cash). The
liquidation preference of the Junior Preferred Stock shall be $1,000 per
share.
(b) Rank.
The Junior Preferred Stock shall, with respect to dividend
distributions and distributions upon the liquidation, winding up or
dissolution of the Company, rank senior to all classes of common stock of
the Company, and to each other class of capital stock or series of
preferred stock of the Company hereafter created the terms of which do not
expressly provide that it ranks
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senior to or on a parity with the Junior Preferred Stock as to dividend
distributions and distributions upon the liquidation, winding up or
dissolution of the Company (collectively referred to with the common stock
of the Company as "Junior Securities"). The Junior Preferred Stock shall,
with respect to dividend distributions and distributions upon the
liquidation, winding up or dissolution of the Company, rank on a parity
with any class of capital stock or series of preferred stock of the
Company hereafter created which expressly provides that it ranks on a
parity with the Junior Preferred Stock as to dividend distributions and
distributions upon the liquidation, winding up or dissolution of the
Company ("Parity Securities"), provided that any such Parity Securities
that were not approved by the Holders of Junior Preferred Stock in
accordance with paragraph (f)(ii)(A) of this Section 2 shall be deemed to
be Junior Securities and not Parity Securities. The Junior Preferred Stock
shall, with respect to dividend distributions and distributions upon the
liquidation, winding up or dissolution of the Company, rank junior to the
Senior Preferred Stock and to each class of capital stock or series of
preferred stock of the Company hereafter created which has been approved
by the Holders of Junior Preferred Stock in accordance with paragraph
(f)(ii)(B) of this Section 2 and which expressly provides that it ranks
senior to the Junior Preferred Stock as to dividend distributions or
distributions upon the liquidation, winding up or dissolution of the
Company (collectively referred to with the Senior Preferred Stock as
"Senior Securities").
(c) Dividends.
(i) Beginning on the date of issuance of shares of the Junior
Preferred Stock, the Holders of the outstanding shares of Junior
Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors, out of funds legally available
therefor, distributions in the form of cash dividends on each share
of Junior Preferred Stock, at a rate per annum equal to 11.25% of the
liquidation preference per share of the Junior Preferred Stock,
payable quarterly. All dividends shall be cumulative, whether or not
earned or declared, on a daily basis from the Preferred Stock Issue
Date and shall be payable quarterly in arrears on each Dividend
Payment Date, commencing on the first Dividend Payment Date after the
date of issuance of the Junior Preferred Stock, provided that if any
dividend payable on any Dividend Payment Date is not declared and
paid in full in cash on such Dividend Payment Date, the amount
payable as dividends on such Dividend Payment Date that is not paid
in cash on such Dividend Payment Date shall be paid by the Company in
additional fully paid and non-assessable shares (including fractional
shares, if applicable) of Junior Preferred Stock having an aggregate
liquidation preference equal to the amount of such dividends (rounded
to the nearest whole cent); it being understood that dividends shall
begin to accrue from such Dividend Payment Date on such additional
shares of Junior Preferred Stock whether such additional shares of
Junior Preferred
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Stock are issued on such date or any later date or are never issued.
The payment by the Company in such additional shares of Junior
Preferred Stock shall constitute full payment of such dividend. Each
distribution in the form of a dividend (whether in cash or in
additional shares of Junior Preferred Stock) shall be payable to the
Holders of Junior Preferred Stock of record as they appear on the
stock books of the Company on such record dates, not less than 10 nor
more than 45 days preceding the related Dividend Payment Date, as
shall be fixed by the Board of Directors. So long as any of the
Blechman Brothers is a member of the Board of Directors, any
determination of the Board of Directors to pay any dividend on the
Junior Preferred Stock in cash shall be made by decision of a
majority of the Disinterested Directors; provided, however, that the
declaration and payment of cash dividends on the Junior Preferred
Stock shall be subject to contractual and other restrictions with
respect thereto and the legal availability of funds therefor.
Dividends shall cease to accrue in respect of shares of the Junior
Preferred Stock on the date of their redemption unless the Company
shall have failed to pay the relevant redemption price on the date
fixed for redemption. Notwithstanding the foregoing provisions of
this paragraph (c)(i), so long as any shares of Senior Preferred
Stock are outstanding, no dividends on the Junior Preferred Stock
shall be paid in cash except to the extent permitted by the
provisions of Section 1 of Part A of this Article FOURTH.
(ii) All dividends paid with respect to shares of the Junior
Preferred Stock pursuant to paragraph (c)(i) of this Section 2 shall
be paid pro rata to the Holders thereof entitled thereto.
(iii) Dividends on account of arrears for any past Dividend
Period and dividends in connection with any optional redemption
pursuant to paragraph (e)(i) of this Section 2 may be declared and
paid at any time, without reference to any regular Dividend Payment
Date, to Holders of Junior Preferred Stock of record on such date,
not more than 45 days prior to the payment thereof, as may be fixed
by the Board of Directors.
(iv) No full dividends shall be declared by the Board of
Directors or paid or funds set apart for payment of dividends by the
Company on any Parity Securities for any period unless full
cumulative dividends shall have been or contemporaneously are
declared and paid in full, or declared and (in the case of dividends
payable in cash) a sum in cash set apart sufficient for such payment,
on the Junior Preferred Stock for all Dividend Periods terminating on
or prior to the date of payment of such full dividends on such Parity
Securities. If any dividends are not paid in full, as aforesaid,
upon the shares of the Junior Preferred Stock and any other Parity
Securities, all dividends declared upon shares of the Junior
Preferred Stock and any other Parity Securities shall be declared pro
rata based on the relative liquidation preference of the Junior
Preferred Stock and such Parity Securities. So long as any shares of
the Junior Preferred Stock are outstanding, the Company shall
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not make any payment on account of, or set apart for payment money
for a sinking or other similar fund for, the purchase, redemption or
other retirement of, any of the Parity Securities or any warrants,
rights, calls or options exercisable for or convertible into any of
the Parity Securities, and shall not permit any company or other
entity directly or indirectly controlled by the Company to purchase
or redeem any of the Parity Securities or any such warrants, rights,
calls or options.
(v) So long as any shares of Junior Preferred Stock are
outstanding, the Company shall not (A) declare, pay or set apart for
payment any dividend on any of the Junior Securities or make any
payment on account of, or set apart for payment money for a sinking
or other similar fund for, the purchase, redemption or other
retirement of, any of the Junior Securities or any warrants, rights,
calls or options exercisable for or convertible into any of the
Junior Securities (other than the repurchase, redemption or other
acquisition or retirement for value of Junior Securities (and any
warrants, rights, calls or options exercisable for or convertible
into such Junior Securities) held by certain employees of or
consultants or advisors to the Company or any of its Subsidiaries,
which repurchase, redemption or other acquisition or retirement shall
have been approved by a majority of the Outside Directors, provided
that such Junior Securities may only be repurchased, redeemed or
otherwise acquired or retired either in exchange for Junior
Securities or upon the termination, retirement, death or disability
of such employee, consultant or advisor), or (B) make any
distribution in respect thereof, either directly or indirectly, and
whether in cash, obligations or shares of the Company or other
property (other than distributions or dividends in Junior Securities
to the holders of Junior Securities), or (C) permit any corporation
or other entity directly or indirectly controlled by the Company to
purchase or redeem any of the Junior Securities or any such warrants,
rights, calls or options, unless in any such case referred to in
clause (A), (B) or (C) of this paragraph (c)(v) full cumulative
dividends determined in accordance herewith have been paid in full on
the Junior Preferred Stock and the action does not violate the
provisions of paragraph (f)(ii)(D) of this Section 2.
(vi) Dividends payable on shares of the Junior Preferred Stock
for any period less than a year shall be computed on the basis of a
360-day year of twelve 30-day months and the actual number of days
elapsed in the period for which payable. If any Dividend Payment Date
occurs on a day that is not a Business Day, any accrued dividends
otherwise payable on such Dividend Payment Date shall be paid on the
next succeeding Business Day.
(d) Liquidation Preference.
(i) Upon any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Company, subject to
the provisions of Section 1(d) of Part A of this Article FOURTH, the
Holders of shares of Junior
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Preferred Stock then outstanding shall be entitled to be paid, out of
the assets of the Company available for distribution to its
stockholders, $1,000 per share of Junior Preferred Stock (the
"liquidation preference"), plus an amount in cash equal to accrued
and unpaid dividends thereon to the date fixed for liquidation,
dissolution or winding up (including an amount equal to a prorated
dividend for the period from the last Dividend Payment Date to the
date fixed for liquidation, dissolution or winding up) before any
payment shall be made or any assets distributed to the holders of any
of the Junior Securities, including, without limitation, common stock
of the Company. Except as provided in the preceding sentence, Holders
of shares of Junior Preferred Stock shall not be entitled to any
distribution in the event of liquidation, dissolution or winding up
of the affairs of the Company. If the assets of the Company are not
sufficient to pay in full the liquidation payments payable to the
Holders of outstanding shares of the Junior Preferred Stock and the
holders of all outstanding Parity Securities, then the holders of all
such shares shall share equally and ratably in such distribution of
assets of the Company in accordance with the amounts which would be
payable on such distribution if the amount to which the Holders of
outstanding shares of Junior Preferred Stock and the holders of
outstanding shares of all Parity Securities are entitled were paid in
full.
(ii) For the purposes of this paragraph (d), neither the sale,
conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the
property or assets of the Company nor the consolidation or merger of
the Company with or into one or more companies or other entities
shall be deemed to be a liquidation, dissolution or winding up of the
affairs of the Company.
(e) Redemption.
(i) Optional Redemption
(A) The Company may (subject to contractual and other
restrictions with respect thereto and the legal availability of
funds therefor), at the option of the Company, redeem at any
time or from time to time, from any source of funds legally
available therefor, in whole or in part, in the manner provided
in paragraph (e)(iii) of this Section 2, any or all of the
shares of the Junior Preferred Stock, at a redemption price
equal to 100% of the liquidation preference per share plus,
without duplication, an amount in cash equal to all accrued and
unpaid dividends per share (including an amount in cash equal to
a prorated dividend for the period from the Dividend Payment
Date immediately prior to the Redemption Date to the Redemption
Date), provided that no optional redemption pursuant to this
paragraph (e)(i)(A) shall be authorized or made at any time when
the Company is making or required to make within the next 30
days, or purchasing
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shares of Junior Preferred Stock under, a Change of Control
Offer in accordance with the provisions of paragraph (g) of this
Section 2 and provided, further, that no optional redemption of
only a portion of the then outstanding shares of Junior
Preferred Stock shall be authorized or made at any time when
full cumulative dividends on the Junior Preferred Stock for all
past Dividend Periods have not been declared and paid in full.
So long as any of the Blechman Brothers is a member of the Board
of Directors, any determination of the Board of Directors to
redeem, at the option of the Company, any shares of Junior
Preferred Stock shall be made by decision of a majority of the
Disinterested Directors.
(B) In the event of a redemption pursuant to
paragraph (e)(i)(A) of this Section 2 of only a portion of the
then outstanding shares of the Junior Preferred Stock, the
Company shall effect such redemption as it determines, pro rata
according to the number of shares held by each Holder of Junior
Preferred Stock or by lot, as may be determined by the Company
in its sole discretion.
(ii) Mandatory Redemption. On May 1, 2008, the Company shall
redeem from any source of funds legally available therefor, in the
manner provided in paragraph (e)(iii) of this Section 2, all of the
shares of the Junior Preferred Stock then outstanding at a redemption
price equal to 100% of the liquidation preference per share, plus,
without duplication, an amount in cash equal to all accrued and
unpaid dividends per share (including an amount equal to a prorated
dividend for the period from the Dividend Payment Date immediately
prior to the Redemption Date to the Redemption Date).
(iii) Procedures for Redemption.
(A) At least 15 days and not more than 60 days prior
to the date fixed for any redemption of the Junior Preferred
Stock, written notice of redemption (the "Redemption Notice")
shall be given by first-class mail, postage prepaid, to each
Holder of Junior Preferred Stock to be redeemed, at such
Holder's address as the same appears on the stock register of
the Company, provided that no failure to give such notice nor
any deficiency therein shall affect the validity of the
procedure for the redemption of any shares of Junior Preferred
Stock to be redeemed except as to the Holder or Holders to whom
the Company has failed to give said notice or except as to the
Holder or Holders whose notice was defective. The Redemption
Notice shall state: (1) whether the redemption is pursuant to
paragraph (e)(i) or (e)(ii) of this Section 2; (2) the
redemption price; (3) whether all or less than all the
outstanding shares of the Junior Preferred Stock are to be
redeemed and the total number of shares of the Junior Preferred
Stock being redeemed; (4) the
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number of shares of Junior Preferred Stock held by the Holder
that the Company intends to redeem; (5) the date fixed for
redemption; (6) that the Holder is to surrender to the Company,
at the place or places where certificates for shares of Junior
Preferred Stock are to be surrendered for redemption, in the
manner and at the price designated, his certificate or
certificates representing the shares of Junior Preferred Stock
to be redeemed; and (7) that dividends on the shares of the
Junior Preferred Stock to be redeemed shall cease to accrue on
such Redemption Date unless the Company defaults in the payment
of the redemption price.
(B) Each Holder of Junior Preferred Stock shall
surrender to the Company the certificate or certificates
representing his shares of Junior Preferred Stock to be
redeemed, duly endorsed, in the manner and at the place
designated in the Redemption Notice, and on the Redemption Date
the full redemption price for such shares shall be payable in
cash to the Person whose name appears on such certificate or
certificates as the owner thereof, and each surrendered
certificate shall be canceled and retired. In the event that
less than all of the shares represented by any such certificate
are redeemed, a new certificate shall be issued representing the
unredeemed shares without cost to the Holder thereof.
(C) Unless the Company defaults in the payment in
full of the applicable redemption price, dividends on the shares
of Junior Preferred Stock called for redemption shall cease to
accrue on the Redemption Date, and the Holders of such shares
shall cease to have any further rights with respect thereto on
the Redemption Date, other than the right to receive the
redemption price, without interest.
(f) Voting Rights.
(i) The Holders of shares of the Junior Preferred Stock,
except as otherwise required under Delaware law or as set forth in
paragraph (f)(ii) below, shall not be entitled or permitted to vote
on any matter required or permitted to be voted upon by the
stockholders of the Company.
(ii) (A) So long as any shares of the Junior Preferred
Stock are outstanding, the Company shall not authorize or issue
any class or series of Parity Securities without the affirmative
vote or consent of Holders of at least a majority of the
outstanding shares of Junior Preferred Stock, voting or
consenting, as the case may be, separately as one class, given
in person or by proxy, either in writing or by resolution
adopted at an annual or special meeting, except that without the
approval of Holders of Junior Preferred Stock, the Company may
issue shares of Parity Securities in exchange for, or the
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proceeds of which are used to redeem or repurchase, all shares
of Junior Preferred Stock then outstanding.
(B) So long as any shares of the Junior Preferred
Stock are outstanding, the Company shall not authorize or issue
any class or series of Senior Securities (other than the Senior
Preferred Stock), or issue any additional shares of Senior
Preferred Stock subsequent to the Preferred Stock Issue Date
(other than in payment of dividends on the Senior Preferred
Stock), without the affirmative vote or consent of Holders of at
least a majority of the outstanding shares of Junior Preferred
Stock, voting or consenting, as the case may be, separately as
one class, given in person or by proxy, either in writing or by
resolution adopted at an annual or special meeting.
(C) So long as any shares of the Junior Preferred
Stock are outstanding, the Company shall not, without the
affirmative vote or consent of Holders of at least a majority of
the outstanding shares of Junior Preferred Stock, voting or
consenting, as the case may be, separately as one class, given
in person or by proxy, either in writing or by resolution
adopted at an annual or special meeting, (1) amend, alter or
repeal any of the provisions of the Certificate of Incorporation
or By-laws of the Company or of any certificate amendatory
thereof or supplemental thereto so as to affect adversely any of
the preferences, rights, powers or privileges of the Junior
Preferred Stock or of the holders thereof as such, (2) issue any
additional shares of Junior Preferred Stock (other than in
payment of dividends on the Junior Preferred Stock) or (3)
consolidate or merge with or into (whether or not the Company is
the surviving or resulting entity), or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all
of the properties or assets of the Company (or of the Company
and its Subsidiaries, taken as a whole) in one or more related
transactions, to another corporation, Person or entity unless
(x) all outstanding shares of Junior Preferred Stock will be
redeemed upon consummation of such transaction or (y) (I) the
Company is the surviving corporation or the entity formed by or
surviving any such consolidation or merger (if other than the
Company) or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made is a
corporation organized and existing under the laws of the United
States, any state thereof or the District of Columbia; (II) the
Junior Preferred Stock shall (q) be converted into or exchanged
for and shall become shares of such successor, transferee or
resulting corporation, having in respect of such successor,
transferee or resulting corporation the same preferences,
powers, rights and privileges that the Junior Preferred Stock
had immediately prior to such transaction or (r) if the Company
is the surviving corporation in such transaction, remain
outstanding with the same preferences, powers, rights and
privileges as it had
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immediately prior to such transaction; and (III) the Company or
the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which
such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made, as the case may be, shall have
a Consolidated Net Worth immediately after the transaction equal
to or greater than the Consolidated Net Worth of the Company
immediately preceding the transaction (without giving effect to
any purchase accounting adjustments related to such
transaction). Notwithstanding the foregoing, the mergers of
Twin Laboratories Inc., Alvita Products, Inc., Twinlab Specialty
Corporation, Twinlab Export Corp., and B. Bros. Realty
Corporation into Natur- Pharma Inc., and the merger of Advanced
Research Press, Inc. with Natur-Pharma II Inc., a wholly-owned
subsidiary of Natur- Pharma Inc. (collectively, the "Mergers"),
in each case in connection with the consummation of the Stock
Purchase and Sale Agreement, dated as of March 5, 1996, among
David Blechman, Jean Blechman, Brian Blechman, Neil Blechman,
Ross Blechman, Steve Blechman, Dean Blechman, Stephen Welling,
TLG Laboratories Holding Corp., Natur-Pharma Inc., and Green
Equity Investors II, L.P., shall be permitted. The affirmative
vote or consent of Holders of at least a majority of the
outstanding shares of Junior Preferred Stock, voting or
consenting, as the case may be, separately as one class, whether
voting in person or by proxy, either in writing or by resolution
adopted at an annual or special meeting, may waive compliance
with any provision of this Section 2.
(D) So long as any shares of the Junior Preferred
Stock are outstanding, the Company shall not, without the
affirmative vote or consent of Holders of at least a majority of
the outstanding shares of Junior Preferred Stock, voting or
consenting, as the case may be, separately as one class, given
in person or by proxy, either in writing or by resolution
adopted at an annual or special meeting, (1) declare, pay or set
apart for payment any dividend on any of the Junior Securities
(other than dividends or distributions in Junior Securities to
the holders of Junior Securities) or make any payment on account
of, or set apart for payment money for a sinking or other
similar fund for, the purchase, redemption or other retirement
of, any of the Junior Securities or any warrants, rights, calls
or options exercisable for or convertible into any of the Junior
Securities (other than the repurchase, redemption or other
acquisition or retirement for value of Junior Securities (and
any warrants, rights, calls or options exercisable for or
convertible into such Junior Securities) held by certain
employees of or consultants or advisors to the Company or any of
its Subsidiaries, which repurchase, redemption or other
acquisition or retirement shall have been approved by a majority
of the Outside Directors, provided that such Junior Securities
may only be repurchased, redeemed or
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otherwise acquired or retired either in exchange for Junior
Securities or upon the termination, retirement, death or
disability of such employee, consultant or advisor), or (2) make
any distribution in respect thereof, either directly or
indirectly, and whether in cash, obligations or shares of the
Company or other property (other than distributions or dividends
in Junior Securities to the holders of Junior Securities), or
(3) permit any corporation or other entity directly or
indirectly controlled by the Company to purchase or redeem any
of the Junior Securities or any such warrants, rights, calls or
options. Notwithstanding the foregoing provisions of this
clause (D), the Company may, without the approval of the Holders
of the Junior Preferred Stock, but subject to the provisions of
paragraph (c)(v) of this Section 2, pay a dividend or
distribution on Junior Securities in shares of the capital stock
of Advanced Research Press, Inc., a New York corporation.
(E) Except as set forth in paragraphs (f)(ii))(A),
(f)(ii)(B) and (f)(ii)(C) above, (1) the creation, authorization
or issuance of any shares of any Junior Securities, Parity
Securities or Senior Securities, or (2) the increase or decrease
in the amount of authorized capital stock of any class or
series, including any preferred stock, shall not in either case
require the consent of Holders of Junior Preferred Stock and
shall not in either case, unless not complying with paragraphs
(f)(ii)(A) and (f)(ii)(B) above, be deemed to affect adversely
the rights, preferences, privileges or voting rights of Holders
of shares of Junior Preferred Stock.
(iii) In any case in which the Holders of shares of the Junior
Preferred Stock shall be entitled to vote pursuant to this paragraph
(f) or pursuant to Delaware law, each Holder of shares of the Junior
Preferred Stock shall be entitled to one vote for each share of
Junior Preferred Stock held.
(g) Change of Control Offer.
Subject to contractual and other restrictions thereon, upon the
occurrence of a Change of Control, the Company shall make an offer (a
"Change of Control Offer") to each Holder of Junior Preferred Stock
to repurchase any or all of such Holder's shares of Junior Preferred
Stock at a purchase price in cash equal to 101.0% of the aggregate
liquidation preference thereof, plus, without duplication, an amount
equal to all accrued and unpaid dividends thereon (including an
amount equal to the prorated dividend for the period from the
Dividend Payment Date immediately prior to the date of repurchase to
the date of repurchase), if any, to the date of repurchase (the
"Change of Control Payment").
(A) Within 30 days following any Change of Control,
the Company shall mail a notice to each Holder of Junior
Preferred Stock
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stating: (1) that the Change of Control Offer is being made
pursuant to this paragraph (g) and that all shares of Junior
Preferred Stock duly tendered will be accepted for payment; (2)
the purchase price and the purchase date, which shall be no
sooner than 30 nor later than 60 days from the date such notice
is mailed (the "Change of Control Payment Date"); (3) that any
shares not tendered will continue to accrue dividends; (4) that,
unless the Company defaults in the payment of the Change of
Control Payment, dividends on all shares of Junior Preferred
Stock accepted for payment pursuant to the Change of Control
Offer shall cease to accrue on the Change of Control Payment
Date; (5) that Holders electing to have any shares of Junior
Preferred Stock repurchased pursuant to a Change of Control
Offer will be required to surrender such shares, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of
the shares of Junior Preferred Stock, completed, or transfer by
book-entry transfer, to the Company or its transfer agent at the
address specified in the notice prior to the close of business
on the third Business Day preceding the Change of Control
Payment Date; (6) that Holders will be entitled to withdraw
their election if the Company or the transfer agent, as the case
may be, receives, not later than the close of business on the
third Business Day preceding the Change of Control Payment Date,
a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the number of shares of Junior
Preferred Stock delivered for repurchase, and a statement that
such Holder is withdrawing his election to have such shares
repurchased; and (7) that Holders whose shares of Junior
Preferred Stock are being repurchased only in part will be
issued new shares of Junior Preferred Stock equal in liquidation
preference to the unpurchased portion of the shares of Junior
Preferred Stock surrendered (or transferred by book-entry
transfer), which unpurchased portion must be equal to $1,000 in
liquidation preference or an integral multiple thereof.
(B) On the Change of Control Payment Date, the
Company shall, to the extent lawful, (1) accept for payment all
shares of Junior Preferred Stock or portions thereof properly
tendered pursuant to the Change of Control Offer, and (2)
deposit with the Company or its transfer agent an amount equal
to the Change of Control Payment in respect of all shares of
Junior Preferred Stock or portions thereof so tendered. The
Company or its transfer agent, as the case may be, shall
promptly mail to each Holder of shares of Junior Preferred Stock
so tendered the Change of Control Payment for such shares or
portions thereof. The Company shall promptly issue a certificate
representing shares of Junior Preferred Stock and mail (or cause
to be transferred by book entry) to each Holder a new
certificate representing shares of Junior Preferred Stock equal
in liquidation preference to any unpurchased portion of such
shares surrendered by such Holder, if any;
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provided, that each such certificate shall represent shares
having a liquidation preference of $1,000 or an integral
multiple thereof. The Company shall announce to its stockholders
the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
(C) The Company shall comply with the requirements of
Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of
shares of Junior Preferred Stock in connection with a Change of
Control.
(h) Conversion or Exchange
The Holders of shares of Junior Preferred Stock shall not have
any rights or obligations to convert such shares into or exchange
such shares for shares of any other class or classes or of any other
series of any class or classes of Capital Stock of the Company or any
other securities of the Company.
(i) Preemptive Rights.
No shares of Junior Preferred Stock shall have any rights of
preemption whatsoever as to any securities of the Company, or any
warrants, rights or options issued or granted with respect thereto,
regardless of how such securities or such warrants, rights or options
may be designated, issued or granted.
(j) Reissuance of Junior Preferred Stock.
Shares of Junior Preferred Stock that have been issued and
reacquired in any manner, including shares purchased or redeemed,
shall (upon compliance with any applicable provisions of the laws of
Delaware) have the status of authorized but unissued shares of
Preferred Stock of the Company undesignated as to series and, subject
to the provisions of paragraph (f) of this Section 2, may be
designated or redesignated and issued or reissued, as the case may
be, as part of any series of Preferred Stock of the Company, provided
that such shares may not in any event be reissued as Senior Preferred
Stock (other than in payment of dividends on Senior Preferred Stock)
or as Junior Preferred Stock (other than in payment of dividends on
Junior Preferred Stock).
(k) Business Day.
If any payment, redemption or exchange shall be required by the
terms hereof to be made on a day that is not a Business Day, such
payment,
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redemption or exchange shall be made on the immediately succeeding
Business Day.
(l) Definitions.
As used in this Section 2, the following terms shall have the
following meanings (with terms defined in the singular having
comparable meanings when used in the plural and vice versa), unless
the context otherwise requires:
"Affiliate" of any specified Person means 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"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether
through the ownership of voting securities, by agreement or
otherwise; provided that beneficial ownership of 10.0% or more of the
voting securities of a Person shall be deemed to be control.
"Blechman Brothers" means Brian Blechman, Dean Blechman, Neil
Blechman, Ross Blechman and Steve Blechman.
"Board of Directors" means the Board of Directors of the
Company.
"Business Day" means any day other than a Legal Holiday.
"Capital Stock" means (i) in the case of a corporation,
corporate stock, (ii) in the case of an association or business
entity, any and all shares, interests, participations, rights or
other equivalents (however designated) of corporate stock, (iii) in
the case of a partnership, partnership interests (whether general or
limited) and (iv) 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, the issuing Person.
"Certificate of Incorporation" means the Company's Certificate
of Incorporation.
"Change of Control" means (i) any merger or consolidation of New
Twin or the Company with or into any Person or any sale, transfer or
other conveyance, whether direct or indirect, of all or substantially
all of the assets of either New Twin or the Company, on a
consolidated basis, in one transaction or a series of related
transactions, if, immediately after giving effect to such
transaction, any "person" or "group," other than any Excluded Person
or Excluded Persons, is or becomes the "beneficial owner" (as such
terms are used for purposes of Sections 13(d) and 14(d) of the
Exchange Act,
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whether or not applicable), directly or indirectly, of more than 50%
of the total voting power in the aggregate normally entitled to vote
in the election of directors, managers, or trustees, as applicable,
of the transferee or surviving entity, (ii) any "person" or "group"
other than an Excluded Person or Excluded Persons, is or becomes the
"beneficial owner," directly or indirectly, of more than 50% of the
total voting power in the aggregate of all classes of Capital Stock
of New Twin then outstanding normally entitled to vote in elections
of directors, provided that any "person or "group" will be deemed to
"beneficially own" any Capital Stock of New Twin held by the Company
so long as such person or group "beneficially owns," directly or
indirectly, in the aggregate a majority of the Capital Stock of the
Company then outstanding normally entitled to vote in elections of
directors, or (iii) during any period of 12 consecutive months after
the Merger Date, individuals who at the beginning of any such
12-month period constituted the board of directors of either New Twin
or the Company (together, in each case, with any new directors whose
election by such board or whose nomination for election by the
shareholders of New Twin was approved by LGP or a Related Party of
LGP or by the Excluded Persons or by a vote of a majority 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 the board of directors of New Twin or the Company then in
office, as applicable.
"Company" means this corporation.
"Consolidated Net Worth" means, with respect to any Person as of
any date, the sum of (i) the consolidated equity of the common
stockholders of such Person and its consolidated Subsidiaries as of
such date plus (ii) the respective amounts reported on the balance
sheet of such Person and its consolidated Subsidiaries as of such
date with respect to any series of preferred stock (other than
Disqualified Stock) that by its terms is a Junior Security,
determined in accordance with GAAP.
"Disinterested Directors" means directors who are not Affiliates
of LGP or Persons designated by Green Equity Investors II, L.P.
("GEI") and its affiliates pursuant to the Stockholders Agreement
among GEI, the Blechman Brothers, Stephen Welling and the Company as
in effect on the Preferred Stock Issue Date.
"Disqualified Stock" means any Capital Stock which, by its terms
(or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event,
matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder
thereof, in whole or in part, on or prior to May 1, 2008.
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"Dividend Payment Date" means each February 1, May 1, August 1
and November 1 following the Preferred Stock Issue Date.
"Dividend Period" means the Initial Dividend Period and,
thereafter, each Quarterly Dividend Period.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder.
"Excluded Person" means collectively or individually Green
Equity Investors II, L.P., David Blechman, Jean Blechman and the
Blechman Brothers, and their respective Related Parties.
"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 from time to time.
"Holder" means a Person in whose name a share of Junior
Preferred Stock is registered.
"Initial Dividend Period" means the dividend period commencing
on the Preferred Stock Issue Date and ending on the day before the
first Dividend Payment Date to occur thereafter.
"Junior Preferred Stock" means the Company's 11.25% Junior
Cumulative Preferred Stock.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York are authorized by law,
regulation or executive order to remain closed.
"LGP" means Leonard Green & Partners, L.P.
"Merger Date" means the date of the consummation of the Mergers.
"New Twin" means Natur-Pharma Inc. (to be renamed Twin
Laboratories Inc.), as such entity will exist from and after the
consummation of the Mergers.
"Outside Directors" means directors other than the Blechman
Brothers, their parents or their descendants who are not officers or
employees of the Company or of any of its Subsidiaries.
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"Person" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company,
trust, unincorporated organization or government or agency or
political subdivision thereof (including any subdivision or ongoing
business of any such entity or substantially all of the assets of any
such entity, subdivision or business).
"Preferred Stock Issue Date" means the date on which the Junior
Preferred Stock is originally issued by the Company under this
Section 1.
"Quarterly Dividend Period" shall mean the quarterly period
commencing on each February 1, May 1, August 1, and November 1 and
ending on the day before the following Dividend Payment Date.
"Redemption Date" with respect to any shares of Junior Preferred
Stock, means the date on which such shares of Junior Preferred Stock
are redeemed by the Company.
"Related Party" means (i) with respect to any Excluded Person,
(A) any controlling stockholder, 80% or more owned Subsidiary, or
spouse or immediate family member (in the case of an individual) of
such Excluded Person or (B) any trust, corporation, partnership or
other entity, the beneficiaries, stockholders, partners, owners or
persons holding an 80% or more controlling interest of which consist
of such Excluded Person and/or such other persons referred to in the
immediately preceding clause (A), and (ii) only with respect to Green
Equity Investors II, L.P. (and in addition to the persons described
in the foregoing clause (i)) any partnership or corporation which is
managed by or controlled by LGP or any affiliate thereof. For the
purposes of this definition "control" of any Person shall mean the
possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether
through the ownership of voting securities or by contract or
otherwise.
"SEC" means the Securities and Exchange Commission.
"Senior Preferred Stock" means the Company's 14% Senior
Cumulative Preferred Stock, par value $.01 per share, with a
liquidation preference of $1,000 per share, consisting of 156,410
shares.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50.0% of the
total voting power of shares of Capital Stock 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 such Person or one or more of
the other Subsidiaries of that Person (or a combination thereof).
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"Voting Stock" of any Person means the Capital Stock of such
Person with voting power, under ordinary circumstances, to elect
directors of such Person.
(m) Application of Definitions.
The definitions of terms in this Section 2 shall apply solely to
such terms as used in this Section 2.
FIFTH: In furtherance and not in limitation of the powers
conferred by the laws of the State of Delaware:
The Board of Directors shall have the right and is expressly
authorized to adopt, amend, alter, change or repeal provisions of the By-Laws
of the Company. In addition, the By-laws may be amended or repealed at any
annual meeting of stockholders, or any special meeting of stockholders called
for such purpose, by the affirmative vote of at least sixty percent (60%) of
the total votes eligible to be cast on such amendment or repeal by holders of
stock entitled to vote thereon; provided, however, that if the Board of
Directors recommends that stockholders approve such amendment or repeal at such
meeting of stockholders, such amendment or repeal shall only require the
affirmative vote of a majority of the total votes eligible to be cast by
holders of stock entitled to vote thereon.
SIXTH: Whenever a compromise or arrangement is proposed
between the Company and its creditors or any class of them and/or between the
Company and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Company or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed for the Company under the
provisions of Section 291 of Title 8 of the GCL, or on the application of
trustees in dissolution of or any receiver or receivers appointed for the
Company under the provisions of Section 279 of Title 8 of the GCL, order a
meeting of the creditors or class of creditors, and/or of the stockholders or
class of stockholders of the Company, as the case may be, to be summoned in
such manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of the Company, as the case may be, agree
to any compromise or arrangement and to any reorganization of the Company as a
consequence of such compromise or arrangement, the said compromise or
arrangement and the said reorganization shall, if sanctioned by the court to
which the said application has been made, be binding on all the creditors or
class of creditors, and/or on all the stockholders or class of stockholders, of
the Company, as the case may be, and also on the Company.
SEVENTH:
(a) Except to the extent prohibited in Article 11.7 of the
Stock Purchase and Sale Agreement dated as of March 5, 1996, as amended, among
David Blechman, Jean Blechman, Brian Blechman, Neil Blechman, Ross Blechman,
Steve Blechman, Dean Blechman, Stephen Welling, the Company, Natur-Pharma Inc.
and Green
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Equity Investors II, L.P. (the "Purchase Agreement"), with respect to the
Stockholder Indemnitors (as such term is defined in the Purchase Agreement),
the Company shall to the fullest extent permitted by Delaware law, as in effect
from time to time (but, in the case of any amendment of the GCL of the State of
Delaware, only to the extent that such amendment permits the Company to provide
broader indemnification rights than said law permitted the Company to provide
prior to such amendment), indemnify each person who is or was a director or
officer of the Company or of any of its wholly-owned subsidiaries at any time
on or after May 7, 1996 who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding, or
was or is involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a "proceeding"), by reason of the
fact that on or after such date he or she is or was a director, officer,
employee or agent of the Company or of any of its subsidiaries, or is or was at
any time on or after such date serving, at the request of the Company, as a
director, officer, employee or agent of any other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise in any capacity
against all expense, liability and loss (including, but not limited to,
attorneys' fees, judgments, fines, excise taxes or penalties (with respect to
any employee benefit plan or otherwise), and amounts paid or to be paid in
settlement) incurred or suffered by such director or officer in connection with
such proceeding; provided, however, that, except as provided in Paragraph (e)
of this Article SEVENTH, the Company shall not be obligated to indemnify any
person under this Article SEVENTH in connection with a proceeding (or part
thereof) if such proceeding (or part thereof) was not authorized by the Board
of Directors of the Company and was initiated by such person against (i) the
Company or any of its subsidiaries, (ii) any person who is or was a director,
officer, employee or agent of the Company or any of its subsidiaries and/or
(iii) any person or entity which controlled, is or was controlled by, or under
common control with, the Company or has or had business relations with the
Company or any of its subsidiaries.
(b) The right to indemnification conferred in this Article
SEVENTH shall be a contract right, shall continue as to a person who has ceased
to be a director or officer of the Company or of any of its wholly-owned
subsidiaries and shall inure to the benefit of his or her heirs, executors and
administrators, and shall include the right to be paid by the Company the
expenses incurred in connection with the defense or investigation of any such
proceeding in advance of its final disposition; provided, however, that if and
to the extent that Delaware law so requires, the payment of such expense in
advance of the final disposition of a proceeding shall be made only upon
delivery to the Company of an undertaking, by or on behalf of such director or
officer or former director or officer, to repay all amounts so advanced if it
shall ultimately be determined that such director or officer or former director
or officer is not entitled to be indemnified by the company.
(c) The Company's obligation to indemnify and to pay expenses
in advance of the final disposition of a proceeding under this Article SEVENTH
shall arise, and all rights and protections granted to directors and officers
under this Article SEVENTH shall vest, at the time of the occurrence of the
transaction or event to which any proceeding relates, or at the time that the
action or conduct to which any proceeding relates was first
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taken or engaged in (or omitted to be taken or engaged in), regardless of when
any proceeding is first threatened, commenced or completed.
(d) Notwithstanding any other provision of this Second Amended
and Restated Certificate of Incorporation or the By-laws of the Company, no
action by the Company, either by amendment to or repeal of this Article SEVENTH
or the By-laws of the Company or otherwise shall diminish or adversely affect
any right or protection granted under this Article SEVENTH to any director or
right of protection granted under this Article SEVENTH to any director or
officer or former director or officer of the Company or of any of its
wholly-owned subsidiaries which shall have become vested as aforesaid prior to
the date that any such amendment, repeal or other corporate action is taken.
(e) If a claim for indemnification and/or for payment of
expenses in advance of the final disposition of a proceeding arising under this
Article SEVENTH is not paid in full by the Company within thirty days after a
written claim has been received by the Company, the claimant may at any time
thereafter bring suit against the Company to recover the unpaid amount of the
claim and, if successful in whole or in part, the claimant shall be entitled to
be paid also the expense of prosecuting such claim.
(f) The right to indemnification of expenses incurred in
connection with the defense or investigation of a proceeding in advance of its
final disposition conferred in this Article SEVENTH shall not be exclusive of
any other right which any person may have or hereafter acquire under any
statute, provision of this Second Amended and Restated Certificate of
Incorporation, By-laws, agreement, vote of stockholders or disinterested
directors or otherwise.
(g) In addition to the persons specified in subsection (a) of
this Article SEVENTH, the Company may indemnify all others persons to the
fullest extent permitted by Delaware law.
EIGHTH:
(a) The business and affairs of the Company shall be managed by
or under the direction of the Board of Directors except as otherwise provided
herein or required by law.
(b) Election of directors need not be by written ballot unless
the By-laws of the Company shall so provide.
(c) Subject to such number of directors, if any, who may be
elected by the holders of any series of Preferred Stock, the number of
directors of the Company shall be as fixed from time to time by resolution duly
adopted by the Board of directors, but in no event shall such number of
directors be less than eight (8). Directors shall hold office until their
successors are duly elected and qualified or until their earlier death,
disqualification, resignation or removal.
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Notwithstanding the foregoing, whenever pursuant to the
provisions of such resolution or resolutions as may be adopted by the Board of
Directors pursuant to the provisions of Paragraph A of Article FOURTH of this
Second Amended and Restated Certificate of Incorporation, the holders of any
one or more series of Preferred Stock shall have the right, voting separately
as a series or together with holders of other such series, to elect directors
at an annual or special meeting of stockholders, the election, term of office,
filling of vacancies and other features of such directorships shall be governed
by the terms of this Second Amended and Restated Certificate of Incorporation
and any certificate of designations applicable thereto.
During any period when the holders of any series of Preferred
Stock have the right to elect additional directors as provided for or fixed
pursuant to the provisions of such resolution or resolutions as may be adopted
by the Board of Directors pursuant to the provisions of Paragraph A of Article
FOURTH hereof, then upon commencement and for the duration of the period during
which such right continues: (i) the then otherwise total authorized number of
directors of the Company shall automatically be increased by such specified
number of directors, and the holders of such Preferred Stock shall be entitled
to elect the additional directors so provided for or fixed pursuant to said
provisions, and (ii) each such additional director shall serve until such
director's successor shall have been duly elected and qualified, or until such
director's right to hold such office terminates pursuant to said provisions,
whichever occurs earlier, subject to such director's earlier death,
disqualification, resignation or removal. Except as otherwise provided by the
Board in the resolution or resolutions establishing such series, whenever the
holders of any series of Preferred Stock having such right to elect additional
directors are divested of such right pursuant to the provisions of such stock,
the terms of office of all such additional directors elected by the holders of
such stock, or elected to fill any vacancies resulting from the death,
resignation, disqualification or removal of such additional directors, shall
forthwith terminate and the total number of directors of the Company shall be
reduced accordingly.
Subject to the rights, if any, of the holders of any series of
Preferred Stock to elect directors and to remove any director whom such holders
have the right to elect, any director or the entire Board of Directors
(including persons elected by directors to fill vacancies in the Board of
Directors) may be removed, with or without cause, by a majority of the votes
eligible to be cast by stockholders entitled to vote at an election of
directors.
NINTH: A director of the Company shall not be personally
liable to the Company or its stockholders for monetary damages for breach of
fiduciary duty as a director, except: (i) for any breach of the director's duty
of loyalty to the Company or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the GCL or (iv) for any transaction from which
the director derived any improper personal benefit. If the GCL of the State of
Delaware is amended after approval by the stockholders of this Article NINTH
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to further eliminate or limit the personal liability of directors, then the
liability of a director of the Company shall be eliminated or limited to the
fullest extent permitted by the GCL of the State of Delaware, as so amended. No
amendment to or repeal of this Article NINTH shall adversely affect any right
or protection of a director of the Company existing at the time of such
amendment or repeal.
TENTH: The Company expressly elects not be governed by
Section 203 of the GCL.
5. This Second Amended and Restated Certificate of Incorporation
was duly adopted by the Board of Directors in accordance with the provisions of
Sections 242 and 245 of the General Corporation Law of Delaware and it was duly
adopted by the unanimous written consent of the stockholders in accordance with
the provisions of Section 228 of the GCL.
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IN WITNESS WHEREOF, the Company has caused this Second Amended and
Restated Certificate of Incorporation to be signed by its President on this
day of , 1996.
TWINLAB CORPORATION
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