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FORM 8-A/A No. 2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
GLOBAL PHARMACEUTICAL CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 65-0403311
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(State of incorporation or organization) (I.R.S. Employer
Identification No.)
Castor & Kensington Avenue
Philadelphia, Pennsylvania 19124
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
- -------------------- -------------------------------
Not Applicable Not Applicable
If this Form relates to the registration of a class of securities
pursuant to Section 12(b) of the Exchange Act and is effective pursuant to
General Instruction A.(c), please check the following box. [ ]
If this Form relates to the registration of a class of securities
pursuant to Section 12(g) of the Exchange Act and is effective pursuant to
General Instruction A.(d), please check the following box. [ ]
Securities Act Registration file number to which this form relates:
33-99310-NY
-----------
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock
--------------------
(Title of Class)
<PAGE>
Item 1. Description of Registrant's Securities to be Registered
The description under the heading "Description of Capital
Stock" relating to the Registrant's Common Stock, $.01 par value per share,
and Preferred Stock, $.01 par value per share, on pages 56-58 of the
Prospectus, dated December 19, 1995, contained in Registrant's Registration
Statement on Form SB-2 (File No.33-99310-NY), is incorporated herein by
reference. The Board of Directors of the Registrant has subsequently
authorized and the Registrant has issued two series of its Preferred Stock, as
follows:
The Registrant has sold an aggregate of 13,350 shares of its Series A
Convertible Preferred Stock (the "Series A Preferred Stock") and approximately
50,000 shares of its Series B Convertible Preferred Stock (the "Series B
Preferred Stock" and, together with the Series A Preferred Stock, the
"Preferred Stock"). Holders of the Preferred Stock are entitled to receive,
prior to and in preference to any distribution of the assets or surplus funds
of the Registrant to the holders of Common Stock of the Registrant, the
Liquidation Value ($100.00 per share) for each share of Preferred Stock held
by such holders, in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Registrant. The Preferred
Stock may also be redeemed at the Liquidation Value at the option of the
holder, among other options, if the Registrant breaches or fails to comply
with its obligations under the respective Certificates of Designation or the
stock purchase agreements for the Series A Preferred Stock and the Series B
Preferred Stock. Without the affirmative vote or written consent of not less
than a majority of the outstanding shares of both the Series A Preferred Stock
and the Series B Preferred Stock, the Registrant cannot reclassify any Common
Stock into shares having any preference or priority as to assets that is
superior to or on a parity with any such preference or priority of the
Preferred Stock. The Registrant has further agreed to cause one member of its
Board of Directors to be a person designated by the holders of not less than a
majority of the outstanding shares of the Series B Preferred Stock. In
addition, the Preferred Stock is convertible at the option of each holder at
any time after the date of the issuance of the Preferred Stock into such
number of fully paid and nonassessable shares of the Registrant's Common Stock
as is determined by dividing the Liquidation Value by the Conversion Price (as
defined in the respective Certificates of Designation for the Series A
Preferred Stock and the Series B Preferred Stock).
-1-
0397467
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Item 2. Exhibits
1. Specimen certificate for Registrant's Common Stock.*
2. Restated Certificate of Incorporation of the Registrant.*
3. By-Laws of the Registrant, as amended to date.*
4. Certificate of the Designations, Powers, Preferences and Rights of
the Series A Convertible Preferred Stock of Global Pharmaceutical
Corporation.
5. Certificate of the Designations, Powers, Preferences and Rights of
the Series B Convertible Preferred Stock of Global Pharmaceutical
Corporation.
* Previously filed with the Commission as Exhibits to, and
incorporated herein by reference from, the Registrant's
Registration Statement on Form SB-2 (File No. 33-99310-NY).
<PAGE>
EXHIBIT 4
CERTIFICATE OF THE DESIGNATIONS, POWERS,
PREFERENCES AND RIGHTS
OF THE
SERIES A CONVERTIBLE PREFERRED STOCK
(Par Value $.01 Per Share)
of
GLOBAL PHARMACEUTICAL CORPORATION
--------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
--------------------
Global Pharmaceutical Corporation, a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"), by its President and Secretary,
DOES HEREBY CERTIFY:
FIRST: That, pursuant to authority expressly vested in the Board of
Directors of said corporation by the provisions of its Certificate of
Incorporation, as amended, the said Board of Directors duly adopted the
following resolution providing for the designation and issuance of sixty
thousand (60,000) shares of Series A Convertible Preferred Stock, $.01 par
value:
RESOLVED, that this Board of Directors, pursuant to authority
expressly vested in it by the provisions of the Certificate of Incorporation
of the Corporation, hereby authorizes the issue from time to time of a series
of Preferred Stock of the Corporation and hereby fixes the designation,
preferences and the relative, participating, optional or other rights, and the
qualifications, limitations or restrictions thereof, in addition to those set
forth in said Certificate of Incorporation, to be in their entirety as
follows:
Section 1. Number of Shares and Designation. Sixty thousand (60,000)
shares of the preferred stock, $.01 par value, of the Corporation are hereby
constituted as a series of preferred stock of the Corporation designated as
"Series A Convertible Preferred Stock" (the "Series A Preferred Stock").
Section 2. Liquidation Rights. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of each share of Series A Preferred Stock outstanding
on the date of such liquidation, dissolution or winding up of the affairs of
the Corporation shall be entitled
<PAGE>
to receive, prior to and in preference to any distribution of any of the
assets or surplus funds of the Corporation to the holders of the Common Stock
of the Corporation, par value $.01 per share (the "Common Stock"), or any
other class of Preferred Stock of the Corporation, by reason of their
ownership thereof, an amount equal to one hundred dollars ($100.00) per share
(the "Liquidation Value") of each share of Series A Preferred Stock held by
the holders (subject to adjustment for stock splits, combinations,
reclassifications or similar events affecting such shares).
All of the preferential amounts to be paid to the holders of
the Series A Preferred Stock under this Section 2 shall be paid or set apart
for payment before the payment or setting apart for payment of any amount for,
or the distribution of any assets of the Corporation to, the holders of the
Common Stock or any other class of Preferred Stock in connection with such
liquidation, dissolution or winding up. After the payment or the setting apart
for payment to the holders of the Series A Preferred Stock of the preferential
amounts so payable to them and the preferential amounts payable to any other
classes of Preferred Stock, the holders of the Series A Preferred Stock shall
be entitled to receive, pro rata with the Common Stock, as if the Series A
Preferred Stock is converted into the number of shares of Common Stock into
which the Series A Preferred Stock is then convertible pursuant to Section
4(a), all remaining assets of the Corporation. If the assets or surplus funds
to be distributed to the holders of the Series A Preferred Stock are
insufficient to permit the payment to such holders of their full preferential
amount, the assets and surplus funds legally available for distribution shall
be distributed ratably among the holders of the Series A Preferred Stock in
proportion to the full preferential amount each such holder is otherwise
entitled to receive.
Section 3. Merger, Consolidation, Sale of Assets. Any merger or
consolidation of the Corporation with or into another corporation in which the
Corporation shall not survive, or the sale or transfer of all or substantially
all of the assets of the Corporation to another entity, or a merger or
consolidation in which the Corporation is the survivor but its Common Stock is
exchanged for stock, securities or property of another entity shall be treated
as a liquidation, dissolution or winding up of the Corporation and shall
entitle the holder of Series A Preferred Stock to receive at the closing, in
cash, securities or other property, amounts as specified in Section 2.
Section 4. Conversion into Common Stock. The holder of any shares of
the Series A Preferred Stock shall have conversion rights as follows (the
"Conversion Rights"):
(a) Right to Convert. Each share of Series A Preferred Stock shall
be convertible, without the payment of any additional consideration by the
holder thereof and at the option of the holder thereof, at any time after the
date of issuance of such share, at the office of the Corporation or any
transfer agent for the Series A Preferred Stock, into such number of fully
paid and nonassessable shares of Common Stock as is determined by dividing the
Liquidation Value by the Conversion Price, determined as hereinafter provided,
with respect to such shares. The Conversion Price shall be the lower of (a)
$5.00 per share (subject to adjustment pursuant to Section 7.2 of that certain
Series A Convertible Preferred Stock Purchase Agreement, dated August 12, 1997
(the "Purchase Agreement"), by and among the Corporation and the Purchasers
named therein) or (b) the average closing sale price (or if such price is
expressed as a
<PAGE>
bid and ask price, the closing bid price) of the Common Stock for the five
trading days immediately preceding the day on which the holder elects to
convert the Series A Preferred Stock; provided, however, that in no event
shall the Conversion Price be less than $3.00 per share. Notwithstanding the
foregoing, in the event that the Corporation, within eighteen months from the
Initial Closing (as such term is defined in the Purchase Agreement), issues
and sells not less than an aggregate of $1 million of additional shares of
Common Stock (or securities convertible into Common Stock) other than Excluded
Stock (as hereinafter defined) to financial investors (whether individual or
institutional) for a consideration per share of Common Stock of less than
$3.00, then and in such event, the Conversion Price in effect with respect to
the Series A Preferred Stock shall be reduced, concurrently with such issue,
to a price (calculated to the nearest cent) equal to the consideration per
share for which such additional shares are issued and sold. As used in this
Section 4(a), "Excluded Stock" shall mean (i) shares of Common Stock (or
securities convertible into Common Stock) or options for the purchase of
Common Stock issued, sold or granted by the Corporation to any of its
employees, directors or consultants pursuant to a bona fide employee stock
purchase, option or similar benefit plan or incentive program or other
compensation arrangement approved by the Board of Directors of the Corporation
or (ii) shares of Common Stock (or securities convertible into Common Stock)
issued, sold or granted to joint venturers, partnering entities or other
companies with which the Corporation has a relationship involving or
pertaining to product development, or the manufacturing, development,
marketing or repackaging of products or any analogous relationship. The
Conversion Price at which shares of Common Stock shall be deliverable upon
conversion of Series A Preferred Stock without the payment of any additional
consideration by the holder thereof, shall be subject to adjustment, in order
to adjust the number of shares of Common Stock into which the Series A
Preferred Stock is convertible, as provided in this Section 4.
(b) Mechanics of Conversion. No fractional shares of Common Stock
shall be issued upon conversion of the Series A Preferred Stock. In lieu of
any fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the then fair
market value of the Common Stock as determined by the Board of Directors in
good faith. Before any holder of Series A Preferred Stock shall be entitled to
receive certificates representing shares of Common Stock issuable upon
conversion of the Series A Preferred Stock, such holder shall surrender the
certificate or certificates therefor, duly endorsed, at the office of the
Corporation or of any transfer agent for the Series A Preferred Stock, and
shall give written notice to the Corporation at such office in the manner
specified in the Purchase Agreement (which notice shall be irrevocable once
tendered) that such holder elects to convert the same, and shall state therein
such holder's name or the name or names of such holder's nominees in which
such holder wishes the certificate or certificates for shares of Common Stock
to be issued. The Corporation shall, as soon as practicable after receipt of
the certificate(s) representing Series A Preferred Stock, issue and deliver at
such office to such holder of Series A Preferred Stock, or to such holder's
nominee or nominees, a certificate or certificates for the number of shares of
Common Stock to which such holder shall be entitled as aforesaid, together
with cash in lieu of any fraction of a share, and a certificate or
certificates for such shares of Series A Preferred Stock as were represented
by the certificates surrendered and not converted. Conversions pursuant to
Section 4(a) shall be deemed to have been made immediately prior to the close
of business on the date of such surrender of the shares
<PAGE>
of Series A Preferred Stock to be converted, and the person or persons
entitled to receive the shares of Common Stock issuable upon conversion shall
be treated for all purposes as the record holder or holders of such shares of
Common Stock on such date.
(c) Adjustment to Conversion Price for Stock Splits, Combinations,
Dividends and Distributions.
(i) Stock Splits and Combinations. In the event the
Corporation shall at any time or from time to time effect a
subdivision of the outstanding Common Stock, the Conversion Price
then in effect immediately before that subdivision shall be
proportionately decreased, and, conversely, in the event the
Corporation shall at any time or from time to time combine the
outstanding shares of Common Stock, the Conversion Price then in
effect immediately before the combination shall be proportionately
increased. Any adjustment pursuant to this Section 4(c)(i) shall
become effective at the close of business on the date the
subdivision or combination becomes effective.
(ii) Dividends and Distributions of Common Stock. In the
event the Corporation at any time or from time to time shall make or
issue, or fix a record date for the determination of holders of
Common Stock entitled to receive, a dividend or other distribution
payable in additional shares of Common Stock, then and in each such
event the Conversion Price then in effect shall be decreased as of
the time of such issuance or, in the event such a record date shall
have been fixed, as of the close of business on such record date, by
multiplying the Conversion Price then in effect by a fraction:
(x) the numerator of which shall be the total
number of shares of Common Stock issued and outstanding
immediately prior to the time of such issuance or the close
of business on such record date, and
(y) the denominator of which shall be the total
number of shares of Common Stock issued and outstanding
immediately prior to the time of such issuance or the close
of business on such record date plus the number of shares of
Common Stock issuable in payment of such dividend or
distribution;
provided, however, if such record date shall have been fixed and
such dividend is not fully paid or if such distribution is not fully
made on the date fixed therefor, the Conversion Price shall be
recomputed accordingly as of the close of business on such record
date and thereafter the Conversion Price shall be adjusted pursuant
to this Section 4(c)(ii) as of the time of actual payment of such
dividends or distributions.
(iii) Other Dividends and Distributions. In the event the
Corporation at any time or from time to time shall make or issue, or
fix a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in
securities of the
<PAGE>
Corporation other than shares of Common Stock, then and in each such
event provision shall be made so that the holders of the Series A
Preferred Stock shall receive upon conversion thereof, in addition
to the number of shares of Common Stock receivable thereupon, the
amount of securities of the Corporation that they would have
received had their Series A Preferred Stock been converted into
Common Stock on the date of such event and had thereafter, during
the period from the date of such event to and including the
conversion date, retained such securities receivable by them as
aforesaid during such period giving application to all adjustments
called for during such period under this Section 4 with respect to
the rights of holders of the Series A Preferred Stock.
(d) Adjustment for Reclassification, Exchange or Substitution. If
the Common Stock issuable upon the conversion of the Series A Preferred Stock
shall be changed into the same or a different number of shares of any class or
classes of stock, whether by capital reorganization, reclassification, or
otherwise (other than a subdivision or combination of shares or stock dividend
provided for in Section 4(c), or a reorganization, merger, consolidation or
sale of assets provided for in Section 3, then and in each such event the
holder of each share of Series A Preferred Stock shall have the right
thereafter to convert such share into the kind and amount of shares of stock
and other securities and property receivable upon such reorganization,
reclassification, or other change, by holders of the number of shares of
Common Stock into which such shares of Series A Preferred Stock might have
been converted immediately prior to such reorganization, reclassification, or
change, all subject to further adjustment as provided in this Section 4.
(e) No Impairment. The Corporation shall not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms to be observed or performed under this Section 4 by the
Corporation but shall at all times in good faith assist in the carrying out of
all the provisions of this Section 4 and in the taking of all such action as
may be necessary or appropriate in order to protect the conversion rights of
the holders of the Series A Preferred Stock that by its terms is convertible
against impairment.
(f) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price of the Series A Preferred
Stock pursuant to this Section 4, the Corporation at its expense shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof and furnish to each holder of the Series A Preferred Stock a
certificate setting forth such adjustment or readjustment and showing in
detail the facts upon which such adjustment or readjustment is based. The
Corporation shall, upon the written request at any time of any holder of such
Series A Preferred Stock, furnish or cause to be furnished to such holder a
like certificate setting forth (i) such adjustments and readjustments, (ii)
the Conversion Price at the time in effect, and (iii) the number of shares of
Common Stock and the amount, if any, of other property which at the time would
be received upon the conversion of the Series A Preferred Stock.
<PAGE>
(g) Notices of Record Date. In the event of any taking by the
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend which is the same as cash dividends paid
in previous quarters) or other distribution, the Corporation shall mail to
each holder of Series A Preferred Stock, at least ten (10) days prior to the
date specified herein, a notice specifying the date on which any such record
is to be taken for the purpose of such dividend or distribution.
(h) Common Stock Reserved. The Corporation shall reserve and keep
available out of its authorized but unissued Common Stock such number of
shares of Common Stock as shall from time to time be sufficient to effect
conversion of the Series A Preferred Stock. If the Conversion Price of the
Series A Preferred Stock is at any time less than the par value of the Common
Stock, the Corporation shall cause to be taken such action (whether by
lowering the par value of the Common Stock, by converting the Common Stock
from par value to no par value, or otherwise) as will permit the conversion of
the Series A Preferred Stock without any additional payment by the holder
thereof and the issuance of the Common Stock, which Common Stock, upon
issuance, will be fully paid and nonassessable.
Section 5. Redemption.
(a) Redemption at the Option of the Corporation. The Corporation, at
the option of the Board of Directors, may, at any time and from time to time
upon written notice (which notice shall specify the date and place of
redemption and the number of shares and the certificate numbers thereof which
are to be redeemed) given not less than twenty (20) nor more than ninety (90)
days prior to the date fixed for redemption, redeem all or any part of the
outstanding shares of the Series A Preferred Stock by paying therefor in cash
the Liquidation Value for each share, provided that the closing sale price (or
if such price is expressed as a bid and ask price, the closing bid price) of
the Common Stock for a consecutive twenty (20)-day trading period ending not
more than ten (10) days prior to the date of such notice is twelve dollars
($12.00) or more. At least two business days prior to the redemption date
specified in such notice, each holder of the Series A Preferred Stock may give
the Corporation written instructions with respect to the application of funds
legally available for redemption of such holder's shares of the Series A
Preferred Stock.
(b) Redemption at the Option of the Holder. In the event that the
Corporation breaches or fails to comply with its obligations under this
Certificate of Designations or the Purchase Agreement, which breach or failure
is material or has a material adverse effect on the business or prospects of
the Corporation, and such breach or failure of compliance continues for a
period of thirty (30) days after notice thereof has been given to the
Corporation, then each holder of shares of the Series A Preferred Stock shall
be entitled to compel the Corporation to redeem any or all of such holder's
shares of the Series A Preferred Stock; provided that such redeeming holder
shall have given written notice thereof to the Corporation at least forty-five
(45) days prior to the requested date of redemption. Such notice shall state
the number of shares of the Series A Preferred Stock to be redeemed. On or
after the redemption date, as specified in such notice, the holder requesting
redemption shall surrender such holder's certificate for the number of shares
to be redeemed as stated in the notice to the Corporation. On such redemption
date, to the extent the Corporation shall have funds
<PAGE>
legally available therefor, the Corporation shall redeem the shares of the
Series A Preferred Stock requested to be redeemed at the Liquidation Value. To
the extent there are insufficient funds legally available for redemption of
all shares of the Series A Preferred Stock requested to be redeemed, legally
available funds shall be applied to each holder's shares of the Series A
Preferred Stock pro rata in accordance with the number of shares requested to
be redeemed by each holder of shares of the Series A Preferred Stock, and each
holder's shares shall be redeemed in accordance with the instructions received
from such holder or, if no instructions are received from a holder, such
holder's shares of the Series A Preferred Stock shall be redeemed pro rata in
accordance with the number of shares of the Series A Preferred Stock held by
such holder. As soon as practicable, the Corporation shall give written notice
to each holder of shares of the Series A Preferred Stock redeemed or to be
redeemed indicating the number of shares redeemed or to be redeemed and the
certificate numbers thereof. If less than all of the shares of the Series A
Preferred Stock requested to be redeemed are redeemed, all unredeemed shares
shall remain outstanding and shall be entitled to all the rights and
preferences of outstanding shares of the Series A Preferred Stock hereunder.
In case less than all 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) Legally Available Funds. For the purpose of determining whether
funds are legally available for redemption of shares of the Series A Preferred
Stock as provided herein, the Corporation shall value its assets at the
highest amount permissible under applicable law. If on any redemption date
funds of the Corporation legally available therefor shall be insufficient to
redeem all the shares of the Series A Preferred Stock required to be redeemed
as provided herein, funds to the extent legally available shall be used for
such purpose and the Corporation shall apply such funds to each holder's
shares of the Series A Preferred Stock pro rata according to the number of
shares held by each holder of the Series A Preferred Stock and each holder's
shares shall be redeemed in accordance with the instructions received from
such holder or, if no instructions are received from a holder, such holder's
shares of the Series A Preferred Stock shall be redeemed pro rata in
accordance with the number of shares of the Series A Preferred Stock held by
such holder.
(d) Failure to Redeem. In the event the Corporation fails to redeem
any shares of the Series A Preferred Stock pursuant to Section 5(a) because it
does not have funds legally available for such redemption, the shares for
which redemption is required but which are not redeemed shall remain
outstanding, and shall be entitled to all the rights and preferences of
outstanding shares of the Series A Preferred Stock hereunder. In such event,
the Corporation shall use its best efforts to effect the required redemption
and the Corporation's redemption obligation shall be discharged as soon as the
Corporation is able to discharge such obligation.
(e) Termination of Conversion. In the event the Corporation has
mailed written notice of redemption to the holders of record of shares of the
Series A Preferred Stock in accordance with the terms of Section 5(a) hereof,
the holder's right to convert such shares called for redemption shall cease at
the close of business on the redemption date, unless the Corporation defaults
in the payment of the redemption price.
<PAGE>
Section 6. Voting Rights. In addition to the voting rights required
by the laws of the State of Delaware and by Section 7, the holders of shares
of Series A Preferred Stock shall vote, as a single class with all other
stockholders of the Corporation, on all matters voted on by the stockholders
of the Corporation, with each such holder of Series A Preferred Stock entitled
to the number of votes equal to the number of shares of Common Stock into
which such holder's shares would then be convertible. Except as set forth
herein, or as otherwise provided by law, holders of Series A Preferred Stock
shall have no special voting rights and their consent shall not be required
for taking any corporate action.
Section 7. Covenants. So long as any of the shares of Series A
Preferred Stock authorized hereby shall be outstanding, the Corporation shall
not, without first obtaining the affirmative vote or written consent of not
less than a majority of such outstanding shares of Series A Preferred Stock:
(a) amend or repeal any provision of, or add any provision
to, the Corporation's Certificate of Incorporation or By-laws if such action
would alter or change the preferences, rights, privileges or powers of, or
the restrictions provided for the benefit of, the Series A Preferred Stock;
(b) reclassify any Common Stock into shares having any
preference or priority as to assets superior to or on a parity with any such
preference or priority of the Series A Preferred Stock; or
(c) create or issue any securities of the Corporation which
have equity features and which rank on a parity with or senior to the Series
A Preferred Stock upon liquidation or other distribution of assets.
Section 8. Status of Converted or Reacquired Stock. Any shares of
Series A Preferred Stock purchased, redeemed or otherwise acquired by the
Corporation in any manner whatsoever, and any shares of Series A Preferred
Stock converted pursuant to Section 4 hereof shall be retired and cancelled
promptly after the acquisition or conversion thereof. All such shares shall
upon their cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock subject
to the conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, or in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.
SECOND: That said determination of the designation, preferences and
the relative, participating, optional or other rights, and the qualifications,
limitations or restrictions thereof, relating to said Series A Convertible
Preferred Stock, was duly made by the Board of Directors pursuant to the
provisions of the Certificate of Incorporation of the Corporation, as amended,
and in accordance with the provisions of Section 151 of the General
Corporation Law of the State of Delaware, as amended.
IN WITNESS WHEREOF, Global Pharmaceutical Corporation has caused
this Certificate of Designations to be executed this 12th day of August, 1997.
Attest: Global Pharmaceutical Corporation
By: /s/ Cornel C. Spiegler By: /s/ Max L. Medelsohn
- -------------------------------- ----------------------------------------
Name: Cornel C. Spiegler Name: Max L. Medelsohn
- -------------------------------- ----------------------------------------
Title: Secretary Title: President/Chief Executive Officer
- -------------------------------- ----------------------------------------
<PAGE>
EXHIBIT 5
CERTIFICATE OF THE DESIGNATIONS, POWERS,
PREFERENCES AND RIGHTS
OF THE
SERIES B CONVERTIBLE PREFERRED STOCK
(Par Value $.01 Per Share)
of
GLOBAL PHARMACEUTICAL CORPORATION
----------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
----------------------------
Global Pharmaceutical Corporation, a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"), by its President and Secretary,
DOES HEREBY CERTIFY:
FIRST: That, pursuant to authority expressly vested in the Board of
Directors of said corporation by the provisions of its Certificate of
Incorporation, as amended, the said Board of Directors duly adopted the
following resolution providing for the designation and issuance of fifty
thousand (50,000) shares of Series B Convertible Preferred Stock, $.01 par
value:
RESOLVED, that this Board of Directors, pursuant to authority
expressly vested in it by the provisions of the Certificate of Incorporation
of the Corporation, hereby authorizes the issue from time to time of a series
of Preferred Stock of the Corporation and hereby fixes the designation,
preferences and the relative, participating, optional or other rights, and the
qualifications, limitations or restrictions thereof, in addition to those set
forth in said Certificate of Incorporation, to be in their entirety as
follows:
Section 1. Number of Shares and Designation. Fifty thousand (50,000)
shares of the preferred stock, $.01 par value, of the Corporation are hereby
constituted as a series of preferred stock of the Corporation designated as
"Series B Convertible Preferred Stock" (the "Series B Preferred Stock").
Section 2. Liquidation Rights. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of each share of Series B Preferred Stock outstanding
on the date of such liquidation, dissolution or winding up of the affairs of
the Corporation shall be entitled to receive, prior to and in preference to
any distribution of any of the assets or surplus
<PAGE>
funds of the Corporation to the holders of the Common Stock of the
Corporation, par value $.01 per share (the "Common Stock"), or any other class
of Preferred Stock of the Corporation, except for the Corporation's Series A
Convertible Preferred Stock (the "Series A Preferred Stock"), whose
liquidation rights shall be pari passu with those of the Series B Preferred
Stock, by reason of their ownership thereof, an amount equal to one hundred
dollars ($100.00) per share (the "Liquidation Value") of each share of Series
B Preferred Stock held by the holders (subject to adjustment for stock splits,
combinations, reclassifications or similar events affecting such shares).
All of the preferential amounts to be paid to the holders of the
Series B Preferred Stock under this Section 2 shall be paid or set apart for
payment before the payment or setting apart for payment of any amount for, or
the distribution of any assets of the Corporation to, the holders of the
Common Stock or any other class of Preferred Stock (except for the Series A
Preferred Stock, whose liquidation rights shall be pari passu, with those of
the Series B Preferred Stock) in connection with such liquidation, dissolution
or winding up. After the payment or the setting apart for payment to the
holders of the Series B Preferred Stock of the preferential amounts so payable
to them and, the preferential amounts payable to any other classes of
Preferred Stock, the holders of the Series B Preferred Stock, together with
the holders of the Series A Preferred Stock, sha11 be entitled to receive, pro
rata with the Common Stock, as if the Series B Preferred Stock and the Series
A Preferred Stock are converted into the number of shares of Common Stock into
which the Series B Preferred Stock and the Series A Preferred Stock are then
convertible pursuant to Section 4(a), all remaining assets of the Corporation.
If the assets or surplus funds to be distributed to the holders of the Series
B Preferred Stock and the Series A Preferred Stock are insufficient to permit
the payment to such holders of their full preferential amount, the assets and
surplus funds legally available for distribution shall be distributed ratably
among the holders of the Series B Preferred Stock and the Series A Preferred
Stock in proportion to the full preferential amount each such holder is
otherwise entitled to receive.
Section 3. Merger, Consolidation, Sale of Assets. Any merger or
consolidation of the Corporation with or into another corporation in which the
Corporation shall not survive, or the sale or transfer of all or
substantially all of the assets of the Corporation to another entity, or a
merger or consolidation in which the Corporation is the survivor but its
Common Stock is exchanged for stock, securities or property of another entity
shall be treated as a liquidation, dissolution or winding up of the
Corporation and shall entitle the holder of Series B Preferred Stock to
receive at the closing, in cash, securities or other property, amounts as
specified in Section 2.
Section 4. Conversion into Common Stock. The holder of any shares of
the Series B Preferred Stock shall have conversion rights as follows (the
"Conversion Rights");
(a) Right to Convert. Each share of Series B Preferred Stock shall be
convertible, without the payment of any additional consideration by the holder
thereof and at the option of the holder thereof, at any time after the date of
issuance of such share, at the office of the Corporation or any transfer agent
for the Series B Preferred Stock, into such number of fully paid and
nonassessable shares of Common Stock as is determined by dividing the
Liquidation Value by the Conversion Price, determined as
<PAGE>
hereinafter provided, with respect to such shares. The Conversion Price shall
be the lower of (a) $2.75 per share (subject to adjustment pursuant to Section
7.2 of that certain Series B Convertible Preferred Stock Purchase Agreement,
to be executed on or about December 1, 1997 (the "Purchase Agreement), by and
among the Corporation and the Purchasers named therein) or (b) the average
closing sale price (or if such price is expressed as a bid and ask price, the
closing bid price) of the Common Stock for the five trading days immediately
preceding the day on which the holder elects to convert the Series B Preferred
Stock; provided, however, that in no event shall the Conversion Price be less
than $2.00 per share. Notwithstanding the foregoing, in the event that the
Corporation, within eighteen months from the Initial Closing (as such term is
defined in the Purchase Agreement), issues and sells not less than an
aggregate of $1 million of additional shares of Common Stock (or securities
convertible into Common Stock) other than Excluded Stock (as hereinafter
defined) to financial investors (whether individual or institutional) for a
consideration per share of Common Stock of less than $2.75, then and in such
event, the Conversion Price in effect with respect to the Series B Preferred
Stock shall be reduced, concurrently with such issue, to a price (calculated
to the nearest cent) equal to the consideration per share for which such
additional shares are issued and sold. As used in this Section 4(a), "Excluded
Stock" shall mean (i) shares of Common Stock (or securities convertible into
Common Stock) or options for the purchase of Common Stock issued, sold or
granted by the Corporation to any of its employees, directors or consultants
pursuant to a bona fide employee stock purchase, option or similar benefit
plan or incentive program or other compensation arrangement approved by the
Board of Directors of the Corporation or (ii) shares of Common Stock (or
securities convertible into Common Stock) issued, sold or granted to joint
venturers, partnering entities or other companies with which the Corporation
has a relationship involving or pertaining to product development, or the
manufacturing, development, marketing or repackaging of products or any
analogous relationship. The Conversion Price at which shares of Common Stock
shall be deliverable upon conversion of Series B Preferred Stock without the
payment of any additional consideration by the holder thereof, shall be
subject to adjustment, in order to adjust the number of shares of Common Stock
into which the Series B Preferred Stock is convertible, as provided in this
Section 4.
(b) Mechanics of Conversion. No fractional shares of Common Stock
shall be issued upon conversion of the Series B Preferred Stock. In lieu of
any fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the then fair
market value of the Common Stock as determined by the Board of Directors in
good faith. Before any holder of Series B Preferred Stock shall be entitled to
receive certificates representing shares of Common Stock issuable upon
conversion of the Series B Preferred Stock, such holder shall surrender the
certificate or certificates therefor, duly endorsed, at the office of the
Corporation or of any transfer agent for the Series B Preferred Stock, and
shall give written notice to the, Corporation at such office in the manner
specified in the Purchase Agreement (which notice shall be irrevocable once
tendered) that such holder elects to convert the same, and shall state therein
such holder's name or the name or names of such holder's nominees in which
such holder wishes the certificate or certificates for shares of Common Stock
to be issued. The Corporation shall, as soon as practicable after receipt of
the certificate(s) representing Series B Preferred Stock, issue and deliver at
such office to such holder of Series B Preferred Stock, or to such holder's
nominee or nominees, a certificate or certificates for the number of shares of
Common Stock to
<PAGE>
which such holder shall be entitled as aforesaid, together with cash in lieu
of any fraction of a share, and a certificate or certificates for such shares
of Series B Preferred Stock as were represented by the certificates
surrendered and not converted. Conversions pursuant to Section 4(a) shall be
deemed to have been made immediately prior to the close of business on the
date of such surrender of the shares of Series B Preferred Stock to be
converted, and the person or persons entitled to receive the shares of Common
Stock issuable upon conversion shall be treated for all purposes as the record
holder or holders of such shares of Common Stock on such date.
(c) Adjustment to Conversion Price for Stock Splits, Combinations,
Dividends and Distributions.
(i) Stock Splits and Combinations. In the event the
Corporation shall at any time or from time to time effect a
subdivision of the outstanding Common Stock, the Conversion Price
then in effect immediately before that subdivision shall be
proportionately decreased, and, conversely, in the event the
Corporation shall at any time or from time to time combine the
outstanding shares of Common Stock, the Conversion Price then in
effect immediately before the combination shall be proportionately
increased. Any adjustment pursuant to this Section 4(c)(i) shall
become effective at the close of business on the date the subdivision
or combination becomes effective.
(ii) Dividends and Distributions of Common Stock. In the
event the Corporation at any time or from time to time shall make or
issue, or fix a record date for the determination of holders of
Common Stock entitled to receive, a dividend or other distribution
payable in additional shares of Common Stock, then and in each such
event the Conversion Price then in effect shall be decreased as of
the time of such issuance or, in the event such a record date shall
have been fixed, as of the close of business on such record date, by
multiplying the Conversion Price then line effect by a fraction:
(x) the numerator of which shall be the total
number of shares of Common Stock issued and outstanding
immediately prior to the time of such issuance or the close
of business on such record date, and
(y) the denominator of which shall be the total
number of shares of Common Stock issued and outstanding
immediately prior to the time of such issuance or the close
of business on such record date plus the number of shares
of Common Stock issuable in payment of such dividend or
distribution;
provided, however, if such record date shall have been fixed and such
dividend is not fully paid or if such distribution is not fully made
on the date fixed therefor, the Conversion Price shall be recomputed
accordingly as of the close of business on such record date and
thereafter the Conversion Price shall be adjusted pursuant to this
Section 4(c)(ii) as of the time of actual payment of such dividends
or distributions.
<PAGE>
(iii) Other Dividends and Distributions. In the event the
Corporation at any time or from time to time shall make or issue, or
fix a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in
securities of the Corporation other than shares of Common Stock, then
and in each such event provision shall be made so that the holders of
the Series B Preferred Stock shall receive upon conversion thereof,
in addition to the number of shares of Common Stock receivable
thereupon, the amount of securities of the Corporation that they
would have received had their Series B Preferred Stock been converted
into Common Stock on the date of such event and had thereafter,
during the period from the date of such event, to and including the
conversion date, retained such securities receivable by them as
aforesaid during such period giving application to all adjustments
called for during such period under this Section 4 with respect to
the rights of holders of the Series B Preferred Stock.
(d) Adjustment for Reclassification, Exchange or Substitution. If the
Common Stock issuable upon the conversion of the Series B Preferred Stock
shall be changed into the same or a different number of shares of any class or
classes of stock, whether by capital reorganization, reclassification, or
otherwise (other than a subdivision or combination of shares or stock dividend
provided for in Section 4(c), or a reorganization, merger, consolidation or
sale of assets provided for in Section 3, then and in each such event the
holder of each share of Series B Preferred Stock shall have the right
thereafter to convert such share into the kind and amount of shares of stock
and other securities and property receivable upon such reorganization,
reclassification, or other change, by holders of the number of shares of
Common Stock into which such shares of Series B Preferred Stock might have
been converted immediately prior to such reorganization, reclassification, or
change, all subject to further adjustment as provided in this Section 4.
(e) No Impairment. The Corporation shall not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms to be observed or performed under this Section 4 by the
Corporation but shall at all times in good faith assist in the carrying out of
all the provisions of this Section 4 and in the taking of all such action as
may be necessary or appropriate in order to protect the conversion rights of
the holders of the Series B Preferred Stock that by its terms is convertible
against impairment.
(f) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price of the Series B Preferred
Stock pursuant to this Section 4, the Corporation at its expense shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof and furnish to each holder of the Series B Preferred Stock a
certificate setting forth such adjustment or readjustment and showing in
detail the facts upon which such adjustment or readjustment is based. The
Corporation shall, upon the written request at any time of any holder of such
Series B Preferred Stock, furnish or cause to be furnished to such holder a
like certificate setting forth (i) such adjustments and readjustments, (ii) the
Conversion Price at the time in effect, and (iii) the number of shares of
Common Stock
<PAGE>
and the amount, if any, of other property which at the time would be received
upon the conversion of the Series B Preferred Stock.
(g) Notices of Record Date. In the event of any taking by the
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend which is the same as cash dividends paid
in previous quarters) or other distribution, the Corporation shall mail to
each holder of Series B Preferred Stock, at least ten (10) days prior to the
date specified herein, a notice specifying the date on which any such record
is to be taken for the purpose of such dividend or distribution.
(h) Common Stock Reserved. The Corporation shall reserve and keep
available out of its authorized but unissued Common Stock such number of
shares of Common Stock as shall from time to time be sufficient to effect
conversion of the Series B Preferred Stock. If the Conversion Price of the
Series B Preferred Stock is at any time less than the par value of the Common
Stock, the Corporation shall cause to be taken such action (whether by
lowering the par value of the Common Stock, by converting the Common Stock
from par value to no par value, or otherwise) as will permit the conversion of
the Series B Preferred Stock without any additional payment by the holder
thereof and the issuance of the Common Stock, which Common Stock, upon
issuance, will be fully paid and nonassessable.
Section 5. Redemption.
(a) Redemption at the Option of the Corporation. The Corporation, at
the option of the Board of Directors, may, at any time and from time to time
upon written notice (which notice shall specify the date and place of
redemption and the number of shares and the certificate numbers thereof which
are to be redeemed) given not less than twenty (20) nor more than ninety (90)
days prior to the date fixed for redemption, redeem all or any part of the
outstanding shares of the Series B Preferred Stock by paying therefor in cash
the Liquidation Value for each share, provided that the closing sale price (or
if such price is expressed as a bid and ask price, the closing bid price)
of the Common Stock for a consecutive twenty (20)-day trading period ending not
more than ten (10) days prior to the date of such notice is ten dollars
($10.00) or more. At least two business days prior to the redemption date
specified in such notice, each holder of the Series B Preferred Stock may give
the Corporation written instructions with respect to the application of funds
legally available for redemption of such holder's shares of the Series B
Preferred Stock.
(b) Redemption at the Option of the Holder. In the event that the
Corporation breaches or fails to comply with its obligations under this
Certificate of Designations or the Purchase Agreement, which breach or
failure is material or has a material adverse effect on the business or
prospects of the Corporation, and such breach or failure of compliance
continues for a period of thirty (30) days after notice thereof has been
given to the Corporation, then each holder of shares of the Series B Preferred
Stock shall be entitled to compel the Corporation to redeem any or all of such
holder's shares of the Series B Preferred Stock; provided that such redeeming
holder shall have given written notice thereof to the Corporation at least
forty-five (45) days prior to the requested date of redemption. Such notice
shall state the number of shares of the Series B Preferred Stock to be
redeemed. On or after the redemption date, as specified
<PAGE>
in such notice, the holder requesting redemption shall surrender such holder's
certificate for the number of shares to be redeemed as stated in the notice to
the Corporation. On such redemption date, to the extent the Corporation shall
have funds legally available therefor, the Corporation shall redeem the shares
of the Series B Preferred Stock requested to be redeemed at the Liquidation
Value. To the extent there are insufficient funds legally available for
redemption of all shares of the Series B Preferred Stock and the Series A
Preferred Stock, if any, requested to be redeemed, legally available funds
shall be applied to each holder's shares of the Series B Preferred Stock pro
rata in accordance with the number of shares requested to be redeemed by each
holder of shares of the Series B Preferred Stock and the Series A Preferred
Stock, if any, and each holder's shares shall be redeemed in accordance with
the instructions received from such holder or, if no instructions are received
from a holder, such holder's shares of the Series B Preferred Stock shall be
redeemed pro rata in accordance with the number of shares of the Series B
Preferred Stock and the Series A Preferred Stock, if any, held by such holder.
As soon as practicable, the Corporation shall give written notice to each
holder of shares of the Series B Preferred Stock redeemed or to be redeemed
indicating the number of shares redeemed or to be redeemed and the certificate
numbers thereof. If less than all of the shares of the Series B Preferred Stock
requested to be redeemed are redeemed, all unredeemed shares shall remain
outstanding and shall be entitled to all the rights and preferences of
outstanding shares of the Series B Preferred Stock hereunder. In case less
than all 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) Legally Available Funds. For the purpose of determining whether
funds are legally available for redemption of shares of the Series B Preferred
Stock as provided herein, the Corporation shall value its assets at the
highest amount permissible under applicable law. If on any redemption date
funds of the Corporation legally available therefor shall be insufficient to
redeem all the shares of the Series B Preferred Stock and the Series A
Preferred Stock required to be redeemed as provided herein, funds to the
extent legally available shall be used for such purpose and the Corporation
shall apply such funds to each holder's shares of the Series B Preferred Stock
pro rata according to the number of shares held by each holder of the Series B
Preferred Stock and the Series A Preferred Stock, and, each holder's shares
shall be redeemed in accordance with the instructions received from such
holder or, if no instructions are received from a holder, such holder's shares
of the Series B Preferred Stock shall be redeemed pro rata in accordance with
the number of shares of the Series B Preferred Stock and the Series A
Preferred Stock held by such holder.
(d) Failure to Redeem. In the event the Corporation fails to redeem
any shares of the Series B Preferred Stock pursuant to Section 5(a) because it
does not have funds legally available for such redemption, the shares for
which redemption is required but which are not redeemed shall remain
outstanding, and shall be entitled to all the rights and preferences of
outstanding shares of the Series B Preferred Stock hereunder. In such event,
the Corporation shall use its best efforts to effect the required redemption
and the Corporation's redemption obligation shall be discharged as soon as
Corporation is able to discharge such obligation.
(e) Termination of Conversion. In the event the Corporation has
mailed written notice of redemption to the holders of record of shares of the
Series B Preferred
<PAGE>
Stock in accordance with the terms of Section 5(a) hereof, the holder's right
to convert such shares called for redemption shall cease at the close of
business on the redemption date, unless the Corporation defaults in the
payment of the redemption price.
Section 6. Voting Rights. In addition to the voting rights required
by the laws of the State of Delaware and by Section 7, the holders of shares
of Series B Preferred Stock shall vote, as a single class with all other
stockholders of the Corporation, on all matters voted on by the stockholders
of the Corporation, with each such holder of Series B Preferred Stock entitled
to the number of votes equal to the number of shares of Common Stock into
which such holder's shares would then be convertible, Except as set forth
herein or in the Purchase Agreement, or as otherwise provided by law, holders
of Series B Preferred Stock shall have no special voting rights and their
consent shall not be required for taking any corporate action.
Section 7. Covenants. So long as any of the shares of Series B
Preferred Stock authorized hereby shall be outstanding, the Corporation shall
not, without first obtaining the affirmative vote or written consent of not
less than, a majority of such outstanding shares of Series B Preferred Stock:
(a) amend or repeal any provision of, or add any provision
to, the Corporation's Certificate of Incorporation or By-laws if such
action would alter or change the preferences, rights, privileges or
powers of, or the restrictions provided for the benefit of, the
Series B Preferred Stock;
(b) reclassify any Common Stock into shares having any
preference or priority as to assets superior to or on a parity with
any such preference or priority of the Series B Preferred Stock; or
(c) create or issue any securities of the Corporation which
have equity features and which rank on a parity with or senior to the
Series B Preferred Stock upon liquidation or other distribution of
assets.
Section 8. Status of Converted or Reacquired Stock. Any shares of
Series B Preferred Stock purchased, redeemed or otherwise acquired by the
Corporation in any manner whatsoever, and any shares of Series B Preferred
Stock converted pursuant to Section 4 hereof shall be retired and cancelled
promptly after the acquisition or conversion thereof. All such shares shall
upon their cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock subject
to the conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, or in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.
SECOND: That said determination of the designation, preferences and
the relative, participating, optional or other rights, and the qualifications,
limitations or restrictions thereof, relating to said Series B Convertible
Preferred Stock, was duly made by the Board of Directors pursuant to the
provisions of the Certificate of Incorporation of the Corporation, as amended,
and in accordance with the provisions of Section 151 of the General
Corporation Law of the State of Delaware, as amended.
<PAGE>
IN WITNESS WHEREOF, Global Pharmaceutical Corporation has caused this
Certificate of Designations to be executed this 26th day of November, 1997.
Attest: Global Pharmaceutical Corporation
BY: /s/ Cornel C. Spiegler BY: /s/ Max L. Mendelsohn
----------------------- ------------------------------------
Name: Cornel C. Spiegler Name: Max L. Mendelsohn
--------------------- ----------------------------------
Title:Secretary Title: President/Chief Executive Officer
--------------------- ----------------------------------
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereto duly authorized.
GLOBAL PHARMACEUTICAL CORPORATION
By: /s/ Max L. Mendelsohn
-------------------------------------
Max L. Mendelsohn
President and Chief Executive Officer
Dated: December 5, 1997
