<PAGE> 1
As filed with the Securities and Exchange Commission on February 6, 1998.
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
DURAMED PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 11-2590026
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
</TABLE>
7155 EAST KEMPER ROAD
CINCINNATI, OHIO 45249
(513) 731-9900
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
E. THOMAS ARINGTON
DURAMED PHARMACEUTICALS, INC.
7155 EAST KEMPER ROAD
CINCINNATI, OHIO 45249
(513) 731-9900
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPY TO:
TIMOTHY E. HOBERG
TAFT, STETTINIUS & HOLLISTER, LLP
1800 STAR BANK CENTER
425 WALNUT STREET
CINCINNATI, OHIO 45202
Approximate date of commencement of proposed sale to public: From time
to time after this Registration Statement shall become effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
<PAGE> 2
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box.
[X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
- ----------
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ] __________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
================================================================================================================================
Title of Amount to be Proposed Proposed Amount of
securities to be registered maximum maximum registration fee
registered offering price aggregate
per unit (1) offering price(1)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 4,130,252 shares $5.25 $21,683,823 $6,397
$.01 par value
per share
================================================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457(c) and based on the average of the high and low
prices of the Common Stock as reported on the Nasdaq National Market on
February 3, 1998.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE> 3
PROSPECTUS
4,130,252 SHARES
DURAMED PHARMACEUTICALS, INC.
COMMON STOCK
This Prospectus relates to up to 4,130,252 shares of the common stock,
$.01 par value (the "Common Stock"), of Duramed Pharmaceuticals, Inc. (the
"Company").
On February __, 1998, the closing price of the Common Stock as reported
on the Nasdaq National Market was $______ per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
All of the shares of Common Stock offered hereby (the "Shares") are
being sold for the accounts of and by the persons named under the caption
"Selling Shareholders." The Selling Shareholders have advised the Company that
these Shares may be sold from time to time on The Nasdaq Stock Market, in the
over-the-counter market or in negotiated transactions, in each case at prices
satisfactory to the seller. See "Plan of Distribution." The Company will not
receive any proceeds from the sale of the Shares.
The date of this Prospectus is February __, 1998.
<PAGE> 4
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 and may be available at the Commission's
Regional Offices at Suite 1400, Citicorp Center, 500 West Madison Street,
Chicago, Illinois 60661 and Suite 1300, 7 World Trade Center, New York, New York
10048. Copies of such materials may be obtained from the Public Reference
Section, Securities and Exchange Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549 at prescribed rates. The Commission also maintains an Internet web
site at http://www.sec.gov that contains reports, proxy statements and other
information filed electronically by the Company. This Prospectus does not
contain all the information set forth in the Registration Statement filed by the
Company with respect to the offering made hereby. Copies of the Registration
Statement are available from the Commission.
The Company's Common Stock is quoted on the Nasdaq National Market and
reports and other information concerning the Company also may be inspected and
copied at the offices of The Nasdaq Stock Market, Inc., 9513 Key West Avenue,
Rockville, Maryland 20850.
No person has been authorized to give any information or to make on
behalf of the Company or the Selling Shareholders any representations, other
than those contained in this Prospectus, in connection with the offer made
hereby, and, if given or made, any such other information or representation must
not be relied upon as having been authorized by the Company or the Selling
Shareholders. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, any security other than the securities offered
hereby, or an offer to sell or solicitation of an offer to buy such securities
in any jurisdiction in which such offer or solicitation is not qualified or to
any person to whom such offer or solicitation would be unlawful. Neither the
delivery of this Prospectus nor any sale made hereunder shall under any
circumstances create any implication that there has been no change in the
affairs of the Company since the date hereof.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents are incorporated by reference herein:
1. The Company's annual report on Form 10-K/A (Amendment No. 2)
for the year ended December 31, 1996;
2. The Company's quarterly reports on Form 10-Q/A (Amendment No.
1) for the quarter ended March 31, 1997 and on Forms 10-Q for
the quarters ended June 30, 1997 and September 30, 1997; and
its report on Form 8-K for February 5, 1998; and
3. The descriptions of the Company's Common Stock and related
Preferred Stock Purchase Rights contained in the Company's
Forms 8-A dated December 11, 1986 and January 11, 1989,
including any amendments or reports filed for the purpose of
updating such descriptions.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 subsequent to the date of
this Prospectus and prior to the termination of the offering made hereunder
shall be deemed to be incorporated herein by
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<PAGE> 5
reference and made a part hereof from the date of filing of such material. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the information incorporated by
reference herein (not including exhibits unless such exhibits are specifically
incorporated by reference into the information that this Prospectus
incorporates). Any request for delivery of such information should be directed
to Mr. Timothy J. Holt, Senior Vice President-Finance and Administration,
Duramed Pharmaceuticals, Inc., 7155 East Kemper Road, Cincinnati, Ohio 45249;
telephone (513) 731-9900.
THE COMPANY
Duramed Pharmaceuticals, Inc. currently manufactures and sells a line
of prescription generic drug products in tablet, capsule and liquid forms to
customers throughout the United States. Products sold by the Company include
those of its own manufacture and those which it markets under certain
arrangements with other drug manufacturers. The Company sells its products to
drug wholesalers, private label distributors, drug store chains, health
maintenance organizations, hospitals, nursing homes, retiree organizations, mail
order distributors, other drug manufacturers, mass merchandisers and
governmental agencies.
Duramed is a Delaware corporation formed in 1982. The address of the
principal executive offices of the Company is 7155 East Kemper Road, Cincinnati,
Ohio 45249 and its telephone number is (513) 731-9900.
USE OF PROCEEDS
The Company will receive none of the proceeds from the sale of the
Shares by the Selling Shareholders.
SELLING SHAREHOLDERS
The following information, regarding the number of shares of Common
Stock beneficially owned by the persons listed below as the Selling Shareholders
(the "Selling Shareholders") and the number of shares of the Common Stock being
offered for the account of each Selling Shareholder pursuant to this Prospectus,
has been provided to the Company by the Selling Shareholders.
-3-
<PAGE> 6
<TABLE>
<CAPTION>
Shares of
Shares of Common Stock
Shares of Common Common Stock to Be Owned
Name of Selling Stock Beneficially to Be After Completion of
Shareholder Owned Offered Hereby This Offering
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Shepherd Investments 2,165,628 2,040,126 125,502*
International Ltd. (1)
- -----------------------------------------------------------------------------------------------------------------------------------
Stark International (1) 2,165,628 2,040,126 125,502*
- -----------------------------------------------------------------------------------------------------------------------------------
Harlan Kleiman (2) 59,800 45,000 14,800*
- -----------------------------------------------------------------------------------------------------------------------------------
Steve Lamar (2) 6,100 5,000 1,100*
</TABLE>
- --------------------------
*Less than 1 percent.
(1) The number of shares shown in the column captioned "Shares of Common
Stock to Be Offered Hereby" for each holder identified by this note (1)
represents the holder's pro rata portion of (a) up to 3,580,252 shares
of Common Stock which may be acquired upon conversion of 120,000 shares
of the Company's 5% Cumulative Convertible Preferred Stock, Series F
(the "Series F Shares") and (b) up to 500,000 shares of Common Stock
which may be acquired upon exercise of Common Stock Purchase Warrants.
Series F Shares are convertible to shares of Common Stock, at the
option of a holder, at various conversion prices until February 4,
2000. One-half of the Series F Shares are convertible immediately with
the remaining half convertible after August 4, 1998. The conversion
price for the first half of the Series F Shares will be $7.30 per share
for at least the first six months. Thereafter, with respect to the
second half of the Series F Shares and any unconverted portion of the
first half, the conversion price will vary depending on the timing of
conversions and the market price of the Common Stock. The conversion
price will range from a premium to the market price, to a discount from
the market price of the Common Stock. Shares of Common Stock generally
will be issued upon conversion on a ratable basis. Depending upon the
timing of any holder's conversion, and the holder's applicable
Conversion Price, however, the number of shares of Common Stock
acquired and offered by that holder could be less or more than the
number indicated. The Common Stock Purchase Warrants, upon certain
circumstances, allow their holders to purchase shares of Common Stock
for a period of four years at a price of $5.74 per share.
(2) Shoreline Pacific, Institutional Finance Division of Financial West
Group ("Shoreline Pacific"), acted as placement agent for the Series F
Shares and, in that connection, received a commission as well as
warrants to purchase 50,000 shares of Common Stock (the "Shoreline
Warrants") at a price of $5.22 per share of Common Stock. Shoreline
Pacific subsequently assigned the Shoreline Warrants to these holders.
The number of shares shown in the column captioned "Shares of Common
Stock to Be Offered Hereby" for each holder represents shares issuable
upon exercise of the Shoreline Warrants. During 1995, 1996 and 1997,
Shoreline Pacific also acted as placement agent for the Company's
Series C, Series D and Series E Cumulative Convertible Preferred Stock.
Except as described above, none of the Selling Shareholders has, or in
the past has had, any position, office or relationship with the Company (other
than as a security holder) or any of its affiliates.
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<PAGE> 7
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling Shareholders
or their pledgees or donees. Such sales may be made on The Nasdaq Stock Market,
in the over-the-counter market or in negotiated transactions, at prices and on
terms then prevailing or at prices related to the then current market price or
at negotiated prices. The Shares may be sold by means of (a) purchases by a
broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus and/or (b) ordinary brokerage transactions
and transactions in which the broker solicits purchasers. In effecting sales,
brokers or dealers engaged by the Selling Shareholders may arrange for other
brokers or dealers to participate. Brokers or dealers will receive commissions
or discounts from the Selling Shareholders in amounts to be negotiated
immediately prior to the sale, which amounts will not be greater than that
normally paid in connection with ordinary trading transactions.
LEGAL MATTERS
The validity of the Common Stock offered hereby has been passed upon
for the Company by Taft, Stettinius & Hollister LLP, 1800 Star Bank Center,
Cincinnati, Ohio 45202. Timothy E. Hoberg, a partner of Taft, Stettinius &
Hollister LLP, is Assistant Secretary of the Company. Partners and associates of
that firm beneficially own approximately 26,000 shares of the Company's Common
Stock.
EXPERTS
The consolidated financial statements and schedule of Duramed
Pharmaceuticals, Inc. appearing in Duramed's Annual Report, as amended (Form
10-K/A(Amendment No. 2)) for the year ended December 31, 1996 have been audited
by Ernst & Young LLP, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such consolidated
financial statements and schedule are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
-5-
<PAGE> 8
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses to be incurred in
connection with the issuance and distribution of the securities being registered
hereby:
<TABLE>
<CAPTION>
<S> <C>
SEC registration fee................................ $ 6,397
Nasdaq National Market listing fee.................. 17,500
Accounting fees and expenses........................ 2,500
Legal fees and expenses............................. 7,500
Printing expenses................................... 500
Miscellaneous....................................... 1,000
-------
TOTAL..................................... $35,397
=======
</TABLE>
All of the above expenses other than the SEC registration fee and the
Nasdaq listing fee are estimates. The Company has agreed to pay all of these
expenses.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
allows indemnification by the Registrant to any person made or threatened to be
made a party to any proceedings, other than a proceeding by or in the right of
the Registrant, by reason of the fact that such person is or was a director,
officer, employee or agent of the Registrant, or is or was serving at the
request of the Registrant in a similar capacity with another corporation or
other entity, against expenses, including judgments and fines, if that person
acted in good faith and in a manner reasonably believed to be in or not opposed
to the best interests of the Registrant and, with respect to criminal actions,
in which that person has no reasonable cause to believe that such person's
conduct was unlawful. Similar provisions apply to actions brought by or in the
right of the Registrant, except that no indemnification shall be made in such
cases when the person shall have been adjudged to be liable to the Registrant
unless determined otherwise by the court in which the action was brought.
Indemnifications are to be made by a majority vote of directors who are not
parties to the action or the written opinion of independent counsel or by the
stockholders or by the court. Section 145 also authorizes the Registrant to
purchase insurance against such liabilities.
The Registrant's Certificate of Incorporation provides that the
Registrant shall provide indemnification to the fullest extent permitted by
Section 145 of the General Corporation Law of the State of Delaware.
II-1
<PAGE> 9
ITEM 16. EXHIBITS.
The following Exhibits are filed as part of this Registration
Statement.
<TABLE>
<CAPTION>
Exhibit No.
-----------
<S> <C>
4.1 Certificate of Designation, Preferences and Rights of
Series A Preferred Stock*
4.2 Certificate of Designation, Preferences and Rights of
Series F Preferred Stock
5 Opinion of Counsel
23.1 Consent of Independent Auditors
23.2 Consent of Counsel (included in Exhibit 5)
24 Power of Attorney
</TABLE>
- -----------------
* Filed as an exhibit to the Company's Annual Report on Form
10-K for the year ended December 31, 1988 and incorporated
herein by reference.
ITEM 17. UNDERTAKINGS.
*(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement;
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the Registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the Registration Statement.
II-2
<PAGE> 10
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
*(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
*(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
- ------------------
* Paragraph references correspond to those of Item 512 of Regulation S-K.
II-3
<PAGE> 11
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN CINCINNATI, OHIO, AS OF THE 6TH DAY OF FEBRUARY, 1998
DURAMED PHARMACEUTICALS, INC.
BY: /s/ E. Thomas Arington
-------------------------------
E. Thomas Arington
Chairman of the Board,
President and Chief
Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED AS OF THE 6TH DAY OF FEBRUARY, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------- -----
<S> <C>
/s/ E. Thomas Arington Chairman of the Board, President and
- --------------------------- Chief Executive Officer
E. Thomas Arington (principal executive officer)
/s/ Timothy J. Holt Senior Vice President, Finance and
- ---------------------------
Timothy J. Holt Administration and Treasurer
(principal financial and accounting officer)
- --------------------------- Director
George W. Baughman
/s/ Derek G. Layton* President, Duramed Europe, Ltd. and Director
- ---------------------------
Derek G. Layton
/s/ Stanley L. Morgan* Director
- ---------------------------
Stanley L. Morgan
/s/ S. Sundararaman* Director and Secretary
- ---------------------------
S. Sundararaman
*Pursuant to Power of Attorney
/s/ Timothy J. Holt
- ---------------------------
Timothy J. Holt
Attorney-in-Fact
</TABLE>
II-4
<PAGE> 12
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
4.1 Certificate of Designation, Preferences and
Rights of Series A Preferred Stock*
4.2 Certificate of Designation, Preferences and
Rights of Series F Preferred Stock
5 Opinion of Counsel
23.1 Consent of Independent Auditors
23.2 Consent of Counsel (included in Exhibit 5)
24 Power of Attorney
- ---------------------------------
* Filed as an exhibit to the Company's Annual Report on Form 10-K for the
year ended December 31, 1988 and incorporated herein by reference.
<PAGE> 1
EXHIBIT 4.2
CERTIFICATE OF DESIGNATION OF THE
5% CUMULATIVE PREFERRED STOCK, SERIES F, OF
DURAMED PHARMACEUTICALS, INC.
Duramed Pharmaceuticals, Inc., a corporation organized and existing
under the laws of the State of Delaware (the "Company"), does hereby certify as
follows, pursuant to Section 151 of the Delaware General Corporation Law:
FIRST: That pursuant to authority vested in the Board of Directors of
the Company (the "Board") by Article IV of the Certificate of Incorporation of
the Company, the Board, at a meeting duly convened and held on the 22nd day of
January, 1998, adopted the resolution attached hereto as Exhibit 1, creating a
series consisting of One Hundred Twenty Thousand (120,000) shares of its
preferred stock, with a stated value of $100.00 per share, designated as 5%
Cumulative Convertible Preferred Stock, Series F.
SECOND: That such resolution of the Board, and the creation and
authorization thereby of the 5% Cumulative Convertible Preferred Stock, Series
F, were duly made by the Board pursuant to its authority as aforesaid and in
accordance with Section 151 of the Delaware General Corporation Law.
IN WITNESS WHEREOF, the Company has caused this Certificate of
Designation to be executed by its duly authorized agents as of this 3rd day of
February, 1998.
DURAMED PHARMACEUTICALS, INC.
/s/ Timothy J. Holt
------------------------------
By: Timothy J. Holt
Senior Vice President
ATTEST:
/s/ Timothy E. Hoberg
------------------------------
By: Timothy E. Hoberg
Assistant Secretary
<PAGE> 2
EXHIBIT 1
RESOLVED, that the Board hereby (a) authorizes the creation of the
120,000 shares of the 5% Cumulative Convertible Preferred Stock, Series F (the
"Series F Stock") with such final terms as may be approved by the Chairman of
the Board, and (b) authorizes and directs that the Company reserve and keep
available out of its authorized Common Stock the full number of shares of Common
Stock that may be delivered upon conversion of all outstanding shares of the
Series F Stock.
<PAGE> 3
Exhibit 1
TERMS OF 5% CUMULATIVE
STOCK, SERIES F
DURAMED PHARMACEUTICALS, INC. (the "Corporation")
1. Designation and Amount. There is hereby established a series of
Preferred Stock to be designated as the "5% Cumulative Stock, Series F" (the
"Series F Stock") and the number of shares which shall constitute such series
shall be 120,000 shares, with a stated value (the "Stated Value") of $100 per
share.
2. Dividends.
(a) General. The holders of the Series F Stock shall be
entitled to receive, when and as declared by the Board of Directors out of funds
legally available therefor, cumulative preferential cash dividends, at the rate
of 5% of the Stated Value per annum from the date of issuance (with appropriate
proration for any partial dividend period). Such cumulative dividends shall be
payable quarterly in arrears on the fifteenth day of each January, April, July
and October, commencing April, 1998.
(b) Dividends Cumulative. Dividends on the Series F Stock
shall accrue and be cumulative from the date of issuance, whether or not earned
and whether or not in any dividend period there shall be surplus or net profits
of the Corporation legally available for the payment of such dividends.
(c) Equality of Shares. No dividend shall be declared or set
apart for any shares of the Series F Stock for any period unless at the same
time a like proportionate dividend for the same period shall be declared or set
apart for all shares of the Series F Stock then outstanding and entitled to
receive such dividend.
(d) Restrictions with Respect to Junior Shares. So long as any
shares of the Series F Stock shall remain outstanding, no dividend shall be
declared or paid or set apart for payment on the common stock of the Corporation
(the "Common Stock") or any other series of Preferred Stock unless full
dividends (including interest on any accumulations of dividends) on all
outstanding shares of Series F Stock shall have been paid in full for all past
dividend periods and the dividends on all outstanding shares of Series F Stock
for the then current dividend period shall have been paid or declared and
sufficient funds set apart for payment thereof.
3. Liquidation Preference.
(a) General. The Series F Stock shall be preferred over the
Common Stock and any other class or series of stock ranking junior to the Series
F Stock in either payment of dividends or liquidation (all such junior classes
or series of stock including, without limitation, the Common Stock, hereinafter
referred to collectively as the "Junior Stock"). In the event of any liquidation
or dissolution or winding up of the Corporation, the holders of the Series F
Stock shall be entitled to receive, after payment or provision for payment of
the debts and other liabilities of the Corporation, out of the assets of the
Corporation available for distribution to its shareholders, the Stated Value of
the Series F Stock (to the extent not previously converted) plus all accumulated
and unpaid dividends before any distribution of the assets shall be made to the
holders of the Common Stock
<PAGE> 4
or any other class or series of Junior Stock or any other series of Preferred
Stock subsequent to the Series F Stock.
(b) Merger or Consolidation. Neither the merger or
consolidation of the Corporation with another corporation nor the sale or lease
of all or substantially all of the assets of the Corporation shall be deemed to
be a liquidation or dissolution or winding up of the Corporation.
(c) Notice Required. Written notice of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation, stating the payment date and the place where the distributable
amount shall be payable and stating the anticipated amount of any such
distributable amount, shall be given by mail, postage prepaid, not less than
thirty (30) days prior to the payment date stated therein, to the holders of
record of the Series F Stock at their respective addresses as the same shall
then appear on the books of the Corporation.
4. Conversion.
(a) General. Shares of Series F Stock may be converted at the
option of the holder thereof, or otherwise as provided below, into fully paid
and nonassessable shares of Common Stock of the Corporation by dividing the
aggregate Stated Value of the shares of Series F Stock to be converted (plus
accrued but unpaid dividends thereon) by the applicable conversion price as
determined below:
(i) On and prior to the Release Date up to 50% of the
Shares of Series F Stock (allocated pro-rata among the
initial holders thereof) (the "First Fifty Percent")
may be converted into shares of Common Stock at the
Closing Conversion Price.
(ii) Following the Release Date the shares of Series F
Stock will be convertible into the Common Stock as
follows:
(a) Any shares of the First Fifty Percent which have
not been converted prior to the Release Date
(allocated pro-rata among the initial holders thereof)
may be converted into Common Stock at the lesser of
the Closing Conversion Price or the following: (i) for
days 181 to 240 after the Closing Date, 90% of the
Market Price; (ii) for days 241 to 300 after the
Closing Date, 85% of the Market Price; (iii) for days
301 to maturity after the Closing Date, 80% of the
Market Price.
(b) The shares of Series F Stock other than the First
Fifty Percent may be converted into the Common Stock
at the least of the Reset Conversion Price, the
Maximum Conversion Price or the following: (i) for
days 181 to 240 after the Closing Date, 90% of the
Market Price; (ii) for days 241 to 300 after the
Closing Date, 85% of the Market Price;
- 4 -
<PAGE> 5
(iii) for days 301 to maturity after the Closing Date,
80% of the Market Price.
(iii) Notwithstanding the foregoing, in the event that the
Corporation extends the Release Date beyond the 180th
day following the Closing Date: the percentages set
forth in (b)(i-iii) above will each be reduced by 2%;
and, in the event that the average closing bid price of
the Common Stock over the 20 consecutive trading days
immediately preceding the date of the Release Date
Extension Notice to holders is not greater than 150% of
the Closing Price, the percentages set forth in
(a)(i-iii) also will each be reduced by 2%.
(iv) In the event that the Market Price is below $3.35
per Common Share (the "$3.35 Price") upon
requested conversion(s) of shares of Series F Stock,
the Corporation will have the option of satisfying the
notice of conversion in either (i) the number of
shares of Common Stock to which the holder(s) are
entitled, or (ii) cash in an amount equal to the
product of (a) the number of shares of Common
Stock that would otherwise be issued pursuant to the
notice of conversion, times (b) the closing bid price
of the shares of Common Stock on the trading day
prior to the date that the notice of conversion is
tendered.
(v) Beginning on the Release Date, if the 20 trading day
average closing bid price of the Common Stock (as
reported by Bloomberg, L.P.) (the "20 Day Average")
is greater than 300% of the Closing Price, the
Corporation shall have the option to convert all
outstanding shares of the Series F Stock into
Common Stock, upon 10 trading days notice to each
holder of Series F Stock, at the lowest then
applicable conversion prices. The 20 Day Average
bid price of the Common Stock must be greater than
300% of the Closing Price on the date of such
notice.
Any shares of Series F Stock not converted into Common Stock or
redeemed as provided in Section 6 prior to 24 months after the Closing Date
shall be automatically redeemed on such date, without any action of the holder
thereof, for cash at the Stated Amount thereof, plus all accrued and unpaid
dividends.
The following terms used herein shall have the stated meanings:
"Closing Conversion Price" means 140% of the Closing Price.
"Closing Date" means the day on which the closing of the first purchase
of shares of Series F Stock is completed.
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<PAGE> 6
"Closing Price" when used with respect to the Common Stock means the
average closing bid price of the Common Stock over the five trading day
period ending on the trading day prior to the Closing Date.
The "Market Price" per share of Common Stock on any date shall be
deemed to be the Volume Weighted Average Price of the Common Stock as
reported by Bloomberg LP during any two consecutive trading day period
selected by the holder during the twenty trading day period ending on
the day prior to the date the holder gives notice of conversion.
The "Maximum Conversion Price" means a per share of Common Stock price
equal to 200% of the Closing Price.
"Release Date" means the first trading day following the date that is
180 days from the Closing Date; provided, however, that on any date up
through the 150th day following the Closing Date, the Corporation shall
have the non-revocable option on one occasion to extend the Release
Date up to the 240th day following the Closing Date upon written notice
to the holders of the shares of Series F Stock ("Release Date Extension
Notice").
"Reset Conversion Price" means the 20 trading day average closing bid
price of the Common Stock (as reported by Bloomberg, L.P.) ending on
the trading day prior to the Release Date.
"Valuation Period" means any of the five day, two day and twenty day
periods referred to in the above definitions.
Notwithstanding the foregoing, the maximum number of shares of Common
Stock which the Corporation may be required to issue upon conversion of the
shares of Series F Stock (the "Maximum Number of Shares of Common Stock") shall
not exceed, with respect to each holder of Series F Stock, such holder's ratable
share of 3,580,252 shares of Common Stock ("Ratable Share"). Each holder's
Ratable Share shall be calculated prior to converting such holder's shares of
Series F Stock. Any shares of Series F Stock transferred shall carry with them
the related Ratable Share. Any remaining Shares of a holder's Ratable Share
which are not required to convert fully such holder's shares shall be
reallocated to the other holders in proportion to such other holder's ratable
ownership and shall be available for conversion by the other holders of Series F
Stock. After the issuance of the Maximum Number of Shares of Common Stock to any
holder, the Corporation shall have the option of either issuing additional
shares of Common Stock upon conversion of those shares of Series F Stock that
remain outstanding (subject to compliance with applicable rules of regulatory or
self-regulatory organization) or of determining that such shares of Series F
Stock shall instead be subject to redemption as provided in Section 6 hereof.
(b) Adjustments. Once fixed, the Closing Conversion Price, the
Reset Conversion Price, the $3.35 Price, the Maximum Conversion Price, the
Maximum Number of Shares of Common Stock and the kind and amounts of securities
and property for which the shares of Series F Stock may be converted shall be
subject to adjustment from time to time as follows:
(i) If, at any time after the issuance of the Series F
Stock, the Corporation shall (A) declare or pay a dividend, or make a
distribution, to all holders of its Common Stock in shares of Common Stock, (B)
subdivide its
- 6 -
<PAGE> 7
outstanding shares of Common Stock into a greater number of shares, (C) combine
its outstanding shares of Common Stock into a smaller number of shares, or (D)
issue by reclassification of its shares of Common Stock (other than a
subdivision or combination thereof or a change in par value) any securities, the
Closing Conversion Price, the Reset Conversion Price, the $3.35 Price, the
Maximum Conversion Price and the Maximum Number of Shares of Common Stock in
effect immediately prior to such action shall be adjusted so that the holder of
any share of Series F Stock thereafter surrendered for conversion shall be
entitled to receive the kind and number of shares of Common Stock of the
Corporation and/or other securities which he would have owned or been entitled
to receive immediately following such action had such share of Series F Stock
been converted immediately prior thereto. Any adjustment made pursuant to this
Paragraph (b)(i) shall become effective immediately after the record date in the
case of a dividend or distribution and shall become effective immediately after
the effective date in the case of a subdivision, combination or
reclassification.
(ii) If, at any time after the date of issuance of the
Series F Stock, the Corporation shall distribute to all or substantially all
holders of its Common Stock either (A) evidences of indebtedness or assets
(excluding cash dividends or distributions) or (B) any other securities of the
Corporation or any rights, warrants or options to subscribe for, purchase or
otherwise acquire securities of the Corporation in a transaction not covered by
Paragraph (b)(i) above (any of which are referred to herein as "Other
Securities"), then and in any such case the Corporation shall either distribute
such Other Securities to the holders of the Series F Stock or reserve for the
benefit of the holders of the Series F Stock such amount of such Other
Securities as the holders of all Series F Stock then outstanding would have
owned or been entitled to receive immediately following such action had the
shares of Series F Stock been converted into shares of Common Stock immediately
prior thereto. In addition, the Corporation shall either distribute to, or
reserve for the benefit of, the holders of the Series F Stock any principal,
interest, dividends or other property payable with respect to such Other
Securities as and when such interest, dividends or other property is distributed
to the holders of Common Stock. If such a reserve is made, as and when each such
share of Series F Stock is converted, the holder of such share shall be entitled
to receive from the Corporation his share of such Other Securities together with
the principal, interest, dividends or other property payable with respect
thereto.
(iii) In the case of an adjustment pursuant to
Paragraphs (i) or (ii) above during a Valuation Period, the relevant price of
the Common Stock shall be proportionally adjusted.
(iv) All calculations under this Section 4 shall be
made to the nearest one-tenth of a cent or to the nearest one thousandth of a
share, as the case may be. No adjustment shall be required unless such
adjustment would result in an increase or decrease of at least one percent (1%)
of the Closing Conversion Price, the Reset Conversion Price, the $3.35 Price,
the Maximum Conversion Price and the Maximum Number of Shares of Common Stock;
provided, however, that any adjustments which by reason of this subparagraph
(iii) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment.
(v) Whenever the Closing Conversion Price, the Reset
Conversion Price, the $3.35 Price, the Maximum Conversion Price and the Maximum
Number of Shares of Common Stock are adjusted or Other Securities
- 7 -
<PAGE> 8
are reserved as herein provided, the Corporation shall mail or cause to be
mailed a copy of a statement, verified by its independent certified public
accountants, setting forth the required adjustments or the nature and amount of
Other Securities, as the case may be, to each person who is a registered holder
of Series F Stock at such person's last address as the same appears on the books
of the Corporation. Each adjustment shall remain in effect until a subsequent
adjustment is required hereunder. Failure to give or receive such notice or any
defect therein shall not affect the legality or validity of any action taken.
Following any adjustment to the Closing Conversion Price, the Reset Conversion
Price, the $3.35 Price, the Maximum Conversion Price and the Maximum Number of
Shares of Common Stock, the holders of the Series F Stock shall be entitled, by
themselves or through attorneys or accountants retained by them, to inspect the
books and records of the Corporation in order to verify such adjustment. Such
inspection shall be at the expense of the holders of the Series F Stock
requesting such inspection unless such inspection reveals an error in the
adjustment equal to 5% or more of the Closing Conversion Price, the Reset
Conversion Price, the $3.35 Price, the Maximum Conversion Price or the Maximum
Number of Shares of Common Stock, in which case the Corporation shall promptly
reimburse the holders for all expenses incurred in connection therewith.
(vi) If at any time, as a result of an adjustment made
pursuant to Paragraph (ii) above, the holders of Series F Stock shall become
entitled to receive upon conversion any Other Securities, thereafter the number
of such Other Securities receivable upon conversion of the Series F Stock and
the price of the Other Securities shall be subject to adjustment from time to
time and in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to Series F Stock contained in Paragraphs (i) and (ii),
above.
(c) Merger or Consolidation. In case of a merger or
consolidation of the Corporation with or into another corporation, or the sale
or transfer of all, or substantially all, of the property or assets of the
Corporation, the holders of shares of Series F Stock shall thereafter have the
right to convert each of such shares into the kind and amount of shares of stock
or other securities and property (including cash) receivable (the
"Consideration") upon such merger, consolidation or sale by a holder of the
number of shares of Common Stock (whether whole or fractional) into which such
shares of Series F Stock might have been converted immediately prior to such
merger, consolidation or sale (all of which Consideration shall be reserved and
become payable upon conversion in the same manner as for Other Securities
pursuant to Paragraph (b)(ii) above and shall be adjusted as provided in
Paragraph (b) above), and shall have no other conversion rights under these
provisions and, in addition, the Corporation shall reserve, on a current basis
as and when distributed, for payment upon conversion, in the same manner as
required for Other Securities pursuant to Paragraph (b)(ii) above, any interest,
dividends, other stock, securities or property distributable with respect to the
Consideration, the same as if such shares of Series F Stock had been converted
immediately prior to such merger, consolidation, or sale of assets; and
effective provision shall be made in the charter of the resulting or surviving
corporation or otherwise, so that the provisions set forth herein for the
adjustment of the conversion terms of the Series F Stock shall thereafter be
applicable, as nearly as reasonably may be, to any of the Consideration
deliverable upon conversion of Series F Stock remaining outstanding or other
convertible preferred stock received in place thereof. Any such resulting or
surviving corporation shall expressly assume the obligation to deliver the
Consideration, upon the exercise of the conversion right, (and, to that end,
shall reserve sufficient Consideration to issue, distribute
- 8 -
<PAGE> 9
and/or pay the holders of the Series F Stock as if all such stock were
converted) as holders of Series F Stock remaining outstanding, or other
convertible preferred stock received by such holders in place thereof, shall be
entitled to receive pursuant to the provisions hereof, and to make provision for
protection of conversion rights as above provided. In the event a merger or
consolidation occurs prior to the Release Date, all of the shares of Series F
Stock shall thereupon become convertible at the lesser of the Closing Conversion
Price or 90% of the 5 day average closing bid price prior to the closing of such
merger, consolidation, or sale of assets.
(d) Notices. If, at any time while shares of Series F Stock
are outstanding, the Corporation shall (i) declare a dividend (or any other
distribution) on its Common Stock, other than in cash, or (ii) reclassify its
Common Stock (other than through a subdivision or combination thereof or a
change in par value) or become a party to any consolidation or merger or sale or
transfer of all or substantially all of the assets of the Corporation, for which
approval of the holders of its stock is required, then the Corporation shall
cause to be mailed to registered holders of Series F Stock by registered or
certified mail, at their last addresses as they shall appear on the books of the
Corporation, at least thirty (30) days prior to the applicable record date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend or distribution, or, if a record is not
to be taken, the date as of which holders of Common Stock of record to be
entitled to such dividend or distribution are to be determined, or (y) the date
on which any such reclassification, consolidation, merger, sale or transfer is
expected to become effective, and the date as of which it is expected that
holders of record of Common Stock shall be entitled to exchange their Common
Stock for securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, sale or transfer. Failure to give or
receive the notice required by this Paragraph (d) or any defect therein shall
not affect the legality or validity of any such dividend, distribution,
reclassification, consolidation, merger, sale, transfer or other action.
(e) Exercise of Conversion Rights. The holder of any shares of
Series F Stock may exercise his option to convert such shares into shares of
Common Stock only by surrendering for such purpose to the Corporation the
certificates representing the shares to be converted, accompanied or preceded by
written notice (which may be transmitted by telecopier) that such holder elects
to convert such shares in accordance with the provisions of this Section 4. Said
notice shall also state the name or names (with addresses) in which the
certificate or certificates for shares of Common Stock which shall be issuable
on such conversion shall be issued. Each certificate or certificates surrendered
for conversion shall, unless the shares issuable on conversion are to be issued
in the same name as that in which such certificate or certificates are
registered, be accompanied by instruments of transfer, in form satisfactory to
the Corporation, duly executed by the holder or his duly authorized attorney.
Each conversion shall be deemed to have been effected on the date on which such
notice shall have been received by the Corporation as aforesaid, provided that
the certificates to which such notice relates are received by the Corporation no
later than the fifth business day following the date of receipt of such notice,
and the person or persons in whose name or names any certificate or certificates
for shares of Common Stock shall be issuable upon such conversion shall be
deemed to have become on said date the holder or holders of record of the shares
represented thereby notwithstanding that the transfer books of the Corporation
may then be closed or that certificates representing such shares of Common Stock
shall not then be actually delivered to
- 9 -
<PAGE> 10
such person. Within three business days after receipt of the certificates
representing the shares to be converted and the notice of conversion, the
Corporation shall issue and deliver to the person or persons entitled to receive
the same a certificate or certificates representing the number of shares of
Common Stock issuable upon such conversion and shall pay or cause the payment of
such Other Securities or Consideration or other property as may be payable upon
conversion pursuant to Paragraphs (b)(iii) or (c) of this Section 4. The
Corporation understands that a delay in the conversion pursuant to this
Paragraph (e) beyond the time frame provided in the previous sentence could
result in economic loss to the holder exercising his option to convert shares
into Common Stock. As compensation to the holder for such loss, and not as a
penalty, the Corporation agrees to pay liquidated damages to the holder for late
conversion pursuant to this Paragraph (e) in the amount of one percent (1%) of
the requested conversion amount, per day, beginning on the eighth (8th) business
day from the date of receipt by the Corporation of the certificates representing
the shares to be converted and the notice of the conversion pursuant to this
Paragraph (e). Any such amounts shall be paid in U.S. dollars.
(f) Fractional Shares. No fractional shares of Common Stock
shall be issued in connection with the conversion of shares of Series F Stock
into Common Stock. Instead of any fractional share of Common Stock which would
otherwise be issuable on conversion, the Corporation shall pay a cash adjustment
with respect to such fractional share computed on the basis of the then current
fair market value of the Common Stock, as determined in good faith by the
Corporation's Board of Directors.
(g) Tax on Conversion. The issuance of stock certificates on
conversions of shares of Series F Stock shall be made without charge to
converting shareholders for any tax in respect of the issuance thereof except
any tax on the income or gain derived by the converting shareholders as a result
of the issuance thereof. The Corporation shall not, however, be required to pay
any tax which may be payable in respect of any registration of transfer involved
in the issue and delivery of stock in any name other than that of the holder of
the shares of Series F Stock converted, and the Corporation shall not be
required to so issue or deliver any stock certificate unless and until the
person or persons requesting the registration of transfer shall have paid to the
Corporation the amount of such tax or shall have established to the satisfaction
of the Corporation that such tax has been paid.
(h) Securities Reserved. The Corporation shall at all times
reserve and keep available out of its authorized Common Stock (and any Other
Securities or Consideration or property) the full number of shares of Common
Stock (and any Other Securities or Consideration or property) deliverable upon
the conversion of all outstanding shares of Series F Stock. Upon the Closing
Date, the Corporation will reserve 3,580,252 shares of Common Stock for issuance
upon conversion of the Series F Stock, and an additional 500,000 shares of
Common Stock for issuance upon exercise of Warrants issued to the holders of the
Series F Stock on the Closing Date. The Corporation shall not enter into any
agreement or take any action which would impair or restrict its legal authority
to issue such shares of Common Stock, Other Securities or Consideration or
property upon conversion or to defeat in any way the right of the holders of the
Series F Stock to receive such consideration upon conversion. In addition,
whenever the Corporation is required to reserve any interest, dividends or other
property payable upon conversion of the Series F Stock, the Corporation shall,
as to cash, deposit
- 10 -
<PAGE> 11
such amounts in one or more separate accounts for the sole benefit of the
holders of the Series F Stock upon conversion and, as to other property,
physically segregate or otherwise set such property aside in such a manner as to
protect the rights of the holders of the Series F Stock to the receipt of such
property upon conversion.
(i) Effect of Conversion. All shares of Series F Stock which
shall have been converted into shares of Common Stock shall assume the status of
authorized but unissued shares of Preferred Stock undesignated as to series.
5. Voting Rights.
No holder of Series F Stock shall be entitled to vote on any
matter submitted to the shareholders of the Corporation for their vote, waiver,
release or other action, except as may be otherwise expressly required by law.
6. Redemption.
Within five days after issuance by the Corporation of the
Maximum Number of Shares of Common Stock upon conversion of shares of Series F
Stock, the Corporation shall provide notice of such event to registered holders
of Series F Stock, at their last known addresses as they shall appear on the
books of the Corporation. Effective the date of such mailing, holders of shares
of Series F Stock which then remain outstanding may cause such shares to be
redeemed by the Corporation at an amount equal to the Redemption Value (as
hereinafter defined) of such shares; provided that the Corporation may instead
permit the conversion of such shares of Series F Stock into shares of Common
Stock pursuant to Section 4(a) hereof. The holder of any shares of Series F
Stock may exercise his option to redeem such shares only by surrendering for
such purpose to the Corporation the certificates representing the shares to be
redeemed, accompanied or preceded by written notice (which may be transmitted by
telecopier) that such holder elects to redeem such shares in accordance with the
provisions of this Section 6. Said notice also shall state the name or names
(with addresses) in which any shares of Series F Stock represented by the
certificates surrendered which are not to be redeemed shall be re-issued. Each
redemption shall be deemed to have been effective on the date on which such
notice shall have been received by the Corporation as aforesaid, provided that
the certificates to which such notice relates are received by the Corporation no
later than the third business day following the date of receipt of such notice.
Within three business days after receipt of the certificates representing the
shares to be redeemed and the notice of redemption, the Corporation shall issue
and deliver to the person or persons entitled to receive the same the Redemption
Value of the shares to be redeemed. The Redemption Value of the shares of Series
F Stock being redeemed shall be calculated by dividing the aggregate Stated
Value of such shares by the conversion price (as provided in Section 4(a)) which
would be applicable if such shares were being converted into shares of common
stock as provided in Section 4(a) on the date of redemption and multiplying the
result by the Market Price (as defined in Section 4(a)) per share of Common
Stock on the date of redemption, plus any accrued and unpaid dividends.
7. Amendment.
Notwithstanding the provisions of Section 5 above, so long as
any share of Series F Stock is outstanding, the Articles of Incorporation of the
- 11 -
<PAGE> 12
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series F Stock so as to
affect them adversely without the affirmative vote of the holders of a majority
of the outstanding shares of Series F Stock, voting separately as a class.
- 12 -
<PAGE> 1
EXHIBITS 5 and 23.2
Taft, Stettinius & Hollister LLP
1800 Star Bank Center
425 Walnut Street
Cincinnati, Ohio 45202-3957
February 6, 1998
Securities & Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sir or Madam:
We have acted as counsel for Duramed Pharmaceuticals, Inc. (the
"Company") in connection with its filing of a Registration Statement on Form S-3
concerning the registration of up to 4,130,252 shares of common stock, $.01 par
value (the "Common Stock"), which may be sold by the Selling Shareholders
identified in the Registration Statement. The shares of Common Stock being
registered may be issued by the Company upon conversion of outstanding shares of
the Company's 5% Cumulative Convertible Preferred Stock, Series F, and upon
exercise of certain outstanding warrants.
It is our opinion that the registration of the shares of Common Stock
covered by the Registration Statement and the issuance of such shares have been
duly authorized by all necessary corporate action by the Company. The shares of
Common Stock which may be issued and sold will be, when issued in accordance
with the terms and conditions of the agreements providing for their issuance,
legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an Exhibit to the
aforesaid Registration Statement and to the reference to our firm under the
caption "Legal Matters" in the Prospectus.
Yours very truly,
/s/ Taft, Stettinius & Hollister LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Duramed
Pharmaceuticals, Inc., for the registration of 4,130,252 shares of its common
stock.
We also consent to the incorporation by reference therein of our report dated
March 27, 1997, except for Notes LM, as to which the dates are May 5, 1997 and
June 4, 1997 respectively, with respect to the consolidated financial
statements and schedule of Duramed Pharmaceuticals, Inc., for the years ended
December 31, 1996, 1995 and 1994, included in the Annual Report, as amended
(Form 10-K/A(Amendment No. 2)) for 1996 filed with the Securities and Exchange
Commission.
ERNST & YOUNG LLP
Cincinnati, Ohio
February 5, 1998
<PAGE> 1
EXHIBITS 5 and 23.2
Taft, Stettinius & Hollister LLP
1800 Star Bank Center
425 Walnut Street
Cincinnati, Ohio 45202-3957
February 6, 1998
Securities & Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sir or Madam:
We have acted as counsel for Duramed Pharmaceuticals, Inc. (the
"Company") in connection with its filing of a Registration Statement on Form S-3
concerning the registration of up to 4,130,252 shares of common stock, $.01 par
value (the "Common Stock"), which may be sold by the Selling Shareholders
identified in the Registration Statement. The shares of Common Stock being
registered may be issued by the Company upon conversion of outstanding shares of
the Company's 5% Cumulative Convertible Preferred Stock, Series F, and upon
exercise of certain outstanding warrants.
It is our opinion that the registration of the shares of Common Stock
covered by the Registration Statement and the issuance of such shares have been
duly authorized by all necessary corporate action by the Company. The shares of
Common Stock which may be issued and sold will be, when issued in accordance
with the terms and conditions of the agreements providing for their issuance,
legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an Exhibit to the
aforesaid Registration Statement and to the reference to our firm under the
caption "Legal Matters" in the Prospectus.
Yours very truly,
/s/ Taft, Stettinius & Hollister LLP
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
We, the undersigned directors of Duramed Pharmaceuticals, Inc., hereby
appoint E. Thomas Arington and Timothy J. Holt, or either of them, our true and
lawful attorneys and agents, to do any and all acts and things in our name and
on our behalf in our capacities indicated below, which said attorneys and
agents, or each of them, may deem necessary or advisable to enable said
corporation to comply with the Securities Act of 1933, as amended, and any
rules, regulations, and requirements of the Securities and Exchange Commission,
in connection with a Registration Statement on Form S-3 relating to the
registration of shares of the Common Stock of the corporation to be offered by
certain Selling Shareholders, including, without limitation, power and authority
to sign for us, or any of us, in our names in the capacities indicated below,
such Registration Statement as well as any and all amendments (including
post-effective amendments) thereto, and we hereby ratify and confirm all that
said attorneys and agents, or each of them, shall do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Power
of Attorney has been signed below by the following persons in the capacities
indicated as of the 4th day of February, 1998.
<TABLE>
<CAPTION>
Signatures Title
- ---------- -----
<S> <C>
/s/ E. Thomas Arington Director
- ------------------------------
E. Thomas Arington
- ------------------------------ Director
George W. Baughman
/s/ Derek G. Layton Director
- ------------------------------
Derek G. Layton
/s/ Stanley L. Morgan Director
- ------------------------------
Stanley L. Morgan
/s/ S. Sundararaman Director
- ------------------------------
S. Sundararaman
</TABLE>
