IRREVOCABLE PROXY
AND
VOTING AGREEMENT
IRREVOCABLE PROXY AND VOTING AGREEMENT (this "Agreement"),
dated as of July 26, 1999, between Global Pharmaceutical Corporation, a Delaware
corporation ("Global"), and Chemical Company of Malaysia Berhad ("Seller"). This
Agreement shall be legally binding and effective when, and only when, an
executed copy of this Agreement, signed by Seller, is delivered to Global.
WHEREAS, concurrently herewith Global and Impax
Pharmaceuticals, Inc. ("Impax") are entering into an Agreement and Plan of
Merger (the "Merger Agreement");
WHEREAS, pursuant to the Merger Agreement, (i) Impax will be
merged with and into Global (collectively, the "Merger"), with Global surviving
the Merger (with the surviving corporation's name changed to Impax Laboratories,
Inc.), (ii) each issued and outstanding share of the common stock, Series A
Preferred Stock, Series B Preferred Stock and Series C Preferred Stock of Impax
will be converted into shares of the common stock, $.01 par value ("Global
Common Stock"), of Global, (iii) each issued and outstanding share of Series D
Preferred Stock of Impax will be converted into shares of Series 1 Preferred
Stock of Global, and (iv) each issued and outstanding share of Series D
Preferred Stock of Global will be converted into shares of Series 1 Preferred
Stock of Global.
WHEREAS, as of the date hereof, Seller owns beneficially and
of record, and has the power to vote, the classes and amounts of securities of
Impax set forth on Schedule A hereto, (the "Existing Securities," together with
securities of Impax acquired by Seller after the date hereof and prior to the
termination hereof, whether upon the exercise of warrants or options, conversion
of convertible securities or otherwise, collectively, referred to herein as the
"Impax Securities"); and
WHEREAS, as a condition to their willingness to enter into the
Merger Agreement, Global has required that Seller agree, and Seller has agreed,
to grant a proxy to vote the Impax Securities on the terms and conditions
provided for herein;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained, the
parties hereby agree as follows, with all capitalized terms used herein and not
otherwise defined herein having the respective meanings ascribed thereto in the
Merger Agreement:
1. Agreement to Vote; Proxy.
1.1 Voting. Seller hereby agrees that, during the time this
Agreement is in effect, at any meeting of the stockholders of Impax, however
called (including any adjournments or postponements thereof), Seller shall,
except as otherwise agreed to in writing by Global, (a) vote the Impax
Securities in favor of the Merger; (b) vote the Impax Securities against any
action or agreement that would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of Impax under
the Merger Agreement; and (c) vote the Impax Securities against any action or
agreement (other than the Merger Agreement or the transactions contemplated
thereby) that would impede, interfere with, delay, postpone or attempt to
discourage the Merger, including, but not limited to: (i) any extraordinary
corporate transaction, such as a merger, consolidation or other business
combination involving Impax or any of its affiliates, or a public offering of
securities of Impax; (ii) a sale or transfer of a material amount of assets of
Impax or any of its affiliates or a merger, recapitalization or liquidation of
Impax or any of its affiliates; (iii) any change in the management, board of
directors, or other significant personnel, of Impax; (iv) any change in the
present capitalization or dividend policy of Impax or any of its affiliates; or
(v) any material change in the corporate structure or business of Impax or any
of its affiliates. Seller agrees not to exercise any dissenters' rights he, she
or it may have under the California Corporation Code or otherwise with respect
to any of the Impax Securities.
1.2 Proxy. Seller hereby grants to Global a proxy to vote the
Impax Securities as indicated in Section 1.1 above. Seller intends this proxy to
be irrevocable and coupled with an interest and will take such further action or
execute such other instruments as may be necessary to effectuate the intent of
this proxy and hereby revokes any proxy previously granted by Seller with
respect to any of the Impax Securities.
2. Expiration. Global's right to vote the Impax Securities governed
hereby shall terminate upon the first to occur of (a) the Effective Time (as
defined in the Merger Agreement) of the Merger, (b) termination of the Merger
Agreement in accordance with its terms, and (c) written notice of termination of
this Agreement by Global to Seller. This Agreement shall remain in effect until
the Merger Agreement is terminated in accordance with its terms or the
consummation of the Merger.
3. Representations and Warranties of Seller. Seller hereby represents
and warrants to Global as follows:
3.1 Ownership of Impax Securities. On the date hereof, the
Existing Securities are owned of record and beneficially by Seller. Seller has
sole voting power, without restrictions, with respect to all of the Existing
Securities. Except for this Agreement, Seller has not granted any options,
warrant or other right to purchase or acquire from such Seller any interest in
any Existing Securities.
3.2 Power, Binding Agreement. Seller has the legal capacity,
power and authority to enter into and perform all of his, her or its obligations
under this Agreement. The execution, delivery and performance of this Agreement
by Seller will not violate any other agreement to which Seller is a party,
including, without limitation, any voting agreement, shareholders' agreement,
partnership agreement or voting trust. This Agreement has been duly and validly
executed and delivered by Seller and constitutes a valid and binding obligation
of Seller enforceable against Seller in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, moratorium and similar
laws affecting creditors' rights and remedies generally.
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3.3 No Conflicts. The execution and delivery of this Agreement
do not, and the consummation of the transactions contemplated hereby will not,
conflict with or result in any violation of, or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a material benefit
under, any provision of any loan or credit agreement, note, bond, mortgage,
indenture, lease, or other agreement, instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Seller or any of his, her or its properties or assets. No consent,
approval, order or authorization of, or registration, declaration, or filing
with, any governmental entity or public body or authority is required by or with
respect to the execution and delivery of this Agreement by Seller and the
consummation by Seller of the transactions contemplated hereby.
3.4 Seller's Qualifications and Other Matters.
(i) Seller is an Accredited Investor, as that term is defined in Rule
501(a) of Regulation D, as promulgated by the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended.
(ii) Seller has received a copy of the prospectus, dated December 19,
1995, of Global relating to Global's initial public offering of Global Common
Stock, a copy of Global's Annual Report on Form 10-KSB for the year ended
December 31, 1998, a copy of Global's quarterly report on Form 10-QSB for the
quarter ended March 31, 1999, a copy of the draft Merger Agreement with all
draft Schedules and Exhibits attached thereto and such information relating to
Impax as Seller has requested (collectively, "Written Information") and, prior
to signing this Agreement, Seller has carefully reviewed the Written
Information. No oral representations have been made or oral information
furnished to Seller in connection with the Merger which were in any way
inconsistent with the Written Information. Seller has been fully informed of
negotiations relating to and terms of the Merger Agreement and understands the
business in which Impax and Global, respectively, are and will be engaged and
has such knowledge and experience in financial and business matters, including
knowledge and experience in the pharmaceutical industry, that Seller is capable
of evaluating the merits and risks of the Merger and an investment in the Global
Common Stock, and making an informed investment decision with respect thereto.
Seller has such knowledge and experience in financial and business affairs and
is capable of determining the information necessary to make an informed
decision, requesting such information and utilizing the information he or she
has received to evaluate the merits and risks of the Merger and an investment in
the Global Common Stock. Seller has received such information concerning Global
and Impax and the transactions contemplated by the Merger Agreement, and all
such other information, as he, she or it has deemed necessary or appropriate to
evaluate the merits and risks of the Merger and an investment in the Global
Common Stock and to make such a decision. Further, Seller is a significant
stockholder of Impax and, as such, has been given the opportunity to review the
financial condition of, and is fully familiar with, the business, operations,
prospects and plans of Impax.
(iii) Seller has had an opportunity to review and discuss the
transactions contemplated by the Merger Agreement with his or her advisors and
management of Impax and Global.
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4. Certain Covenants of Seller. Seller hereby covenants and agrees as
follows:
4.1 Restriction on Transfer, Proxies and Non-Interference.
Seller hereby agrees, while this Agreement is in effect, and except as
contemplated hereby, not to, (i) sell, transfer, pledge, encumber, assign or
otherwise dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Impax Securities, (ii) grant any
proxies, deposit any Impax Securities into a voting trust or enter into a voting
agreement with respect to any Impax Securities or (iii) take any action that
would make any representation or warranty of Seller contained herein untrue or
incorrect or have the effect of preventing or disabling Seller from performing
his, her or its obligations under this Agreement.
4.2 Non Solicitation. Seller agrees not to enter into
negotiations with, or solicit offers from, any party (other than Global)
regarding the sale of capital stock or assets of Impax or the merger,
consolidation or other combination of Impax with any other person or entity.
4.3 Additional Securities. Seller hereby agrees, while this
Agreement is in effect, to promptly notify Global of the number of any new
shares of Common Stock, and/or other securities of Impax, or any of its
subsidiaries or affiliates, as the case may be, with respect to which Seller
acquires voting rights after the date hereof.
5. Conversion of Impax Securities. Seller hereby agrees to convert all
of its Series C Preferred Stock of Impax into Common Stock of Global, and all of
its Series D Preferred Stock of Impax into Series 1 Preferred Stock of Global,
in accordance with the Articles of Incorporation of Impax, and Sections 2.01(b)
and 2.01(c) of the Agreement and Plan of Merger, dated as of July 26, 1999,
between Global and Impax (the "Merger Agreement"). Such conversions of the
Series C Preferred Stock and Series D Preferred Stock shall be automatic and
shall occur, without any further action on the part of the Seller,
simultaneously with and as of the Effective Time, as defined in the Merger
Agreement.
6. Further Assurances. From time to time, at the other party's request
and without further consideration, each party hereto shall execute and deliver
such additional documents and take all such further action as may be necessary
or desirable to consummate and make effective, in the most expeditions manner
practicable, the transactions contemplated by this Agreement.
7. Miscellaneous.
7.1 Entire Agreement; Assignment. This Agreement (i)
constitutes the entire agreement (other than the other agreements entered into
which are referenced in the Merger Agreement) among the parties with respect to
the subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof and (ii) shall not be assigned by operation of law or
otherwise.
7.2 Amendments. This Agreement may not be modified, amended,
altered or supplemented, except upon the execution and delivery of a written
agreement executed by the parties hereto.
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7.3 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram or
telecopy (followed by confirmation of receipt thereof), or by mail (registered
or certified mail, postage prepaid, return receipt requested) or by any courier
service, such as Federal Express, providing proof of delivery. All
communications hereunder shall be delivered to the respective parties at the
following addresses:
If to the Seller: Chemical Company of Malaysia Berhad
Wisma Xxxx Xxxxx
00 Xxxxx Xxxx Xxxx
X.X. Xxx 00000
00000 Xxxxx Xxxxxx
Malaysia
with a copy to: ____________________________________
____________________________________
____________________________________
If to Global: Global Pharmaceutical Corporation
Xxxxxx & Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000-0000
with a copy to: Fulbright & Xxxxxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxx, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
7.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to its conflicts of laws rules.
7.5 Specific Performance. Each of the parties hereto
recognizes and acknowledges that a breach by it of any covenants or agreements
contained in this Agreement will cause the other party to sustain damages for
which it would not have an adequate remedy at law for money damages and,
therefore, each of the parties hereto agrees that in the event of any such
breach the aggrieved party shall be entitled to the remedy of specific
performance of such covenants and agreements and injunctive and other equitable
relief in addition to any other remedy to which it may be entitled, at law or in
equity.
7.6 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but both of
which shall constitute one and the same Agreement.
7.7 Descriptive Headings. The descriptive headings used herein
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
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7.8 Severability. Whenever possible, each provision or portion
of any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
IN WITNESS WHEREOF, Global and Seller have caused this
Agreement to be duly executed as of the day and year first above written.
GLOBAL PHARMACEUTICAL CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxx
-----------------------------
Title: President & CEO
----------------------------
CHEMICAL COMPANY OF MALAYSIA
BERHAD
By: /s/ Oh Xxx Xxx
-------------------------------
Name: Oh Xxx Xxx
-----------------------------
Title: Group Executive Director
----------------------------
ACCEPTED AND AGREED TO:
IMPAX PHARMACEUTICALS, INC.
By: /s/ Xxxxx Xxx
------------------------
Name: Xxxxx Xxx
----------------------
Title: President
---------------------
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IRREVOCABLE PROXY AND VOTING AGREEMENT
SCHEDULE A
Name of Impax Owner: Chemical Company of Malaysia Berhad
Impax Shares Owned As-Converted
----- ------------ ------------
Common Stock _________ _________
Series A Preferred Stock _________ _________
Series B Preferred Stock _________ _________
Series C Preferred Stock 491,115 861,111
Series D Preferred Stock 800,000 800,000
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