<PAGE> 1
As filed with the Securities and Exchange Commission
on June 5, 1996
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
SEPRACOR INC.
(Exact name of registrant as specified in its charter)
DELAWARE 22-2536587
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
111 LOCKE DRIVE, MARLBOROUGH, MASSACHUSETTS 01752
(Address of Principal Executive Offices) (Zip Code)
1991 DIRECTOR STOCK OPTION PLAN
(Full title of the plan)
TIMOTHY J. BARBERICH
SEPRACOR INC.
111 LOCKE DRIVE
MARLBOROUGH, MASSACHUSETTS 01752
(Name and address of agent for service)
(508) 481-6700
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price offering registration
registered registered per share price fee
- ---------- ---------- --------- ------------ ------------
<S> <C> <C> <C> <C>
Common Stock, 75,000 $14.44(1) $1,083,000(1) $374.00
$.10 par shares
value
</TABLE>
- --------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee, and
based upon the average of the high and low prices of the Common Stock on
the Nasdaq National Market on May 30, 1996 in accordance with Rules 457(c)
and 457(h) of the Securities Act of 1933.
================================================================================
<PAGE> 2
Statement of Incorporation by Reference
Except as otherwise set forth below, this Registration Statement on
Form S-8 incorporates by reference the contents of the Registration Statement
on Form S-8, File No. 33-44808, relating to the Registrant's 1991 Director
Stock Option Plan (the "Initial Registration Statement").
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3 of the Initial Registration Statement is amended and restated
in its entirety as follows:
Item 3. Incorporation of Certain Documents by Reference.
-----------------------------------------------
The Registrant is subject to the informational and reporting
requirements of Sections 13(a), 14, and 15(d) 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 following documents, which are filed with the
Securities and Exchange Commission, are incorporated in this Prospectus by
reference.
(1) The Registrant's latest annual report filed pursuant to
Section 13(a) or 15(d) of the Exchange Act, or the latest prospectus
filed pursuant to Rule 424(b) under the Securities Act of 1933 (as
amended, the "Securities Act"), that contains audited financial
statements for the Registrant's latest fiscal year for which such
statements have been filed.
(2) All other reports filed pursuant to Section 13(a) or 15(d)
of the Exchange Act since the end of the fiscal year covered by the
document referred to in (1) above.
(3) The description of the Common Stock, par value $.10 per
share ("Common Stock"), contained in a registration statement filed
under the Exchange Act, including any amendment or report filed for the
purpose of updating such description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14, and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all shares of Common Stock
offered hereby have been sold or which deregisters all shares of Common Stock
then remaining unsold, shall be deemed to be incorporated by reference herein
and to be part hereof from the date of the filing of such documents.
Item 9 of the Initial Registration Statement is amended and restated in
its entirety as follows:
Item 9. Undertakings.
------------
1. The Company hereby undertakes.
(a) 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;
(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; and
(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 (i) and (ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Company
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
(b) That, for the purpose of determining any liability under
the Securities Act, 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.
(c) 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.
2. The Company hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) 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 in the initial
bona fide offering thereof.
3. Insofar as indemnification for liabilities arising under the
Securities Act 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
Securities 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
Securities Act and will be governed by the final adjudication of such issue.
<PAGE> 3
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-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Marlborough, Commonwealth of Massachusetts on the 5th
day of June, 1996.
SEPRACOR INC.
By: /s/ Timothy J. Barberich
------------------------
Timothy J. Barberich
President and
Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of Sepracor Inc. hereby
severally constitute Timothy J. Barberich and Susan W. Murley, Esq. and each of
them singly, our true and lawful attorneys with full power to them, and each of
them singly, to sign for us and in our names in the capacities indicated below,
the Registration Statement on Form S-8 filed herewith and any and all subsequent
amendments to said Registration Statement, and generally to do all such things
in our names and behalf in our capacities as officers and directors to enable
Sepracor Inc. to comply with all requirements of the Securities and Exchange
Commission, hereby ratifying and confirming our signatures as they may be signed
by said attorneys, or any of them, to said Registration Statement and any and
all amendments thereto.
-3-
<PAGE> 4
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Signature Title Date
- --------- ----- ----
/s/ Timothy J. Barberich
- ------------------------- President, Chief )
Timothy J. Barberich Executive Officer )
and Director )
(Principal Executive )
Officer) )
)
/s/ David P. Southwell )
- ------------------------- Chief Financial )
David P. Southwell Officer (Principal )
Financial Officer) )
)
/s/ Robert F. Scumaci )
- ------------------------- Senior Vice President, )
Robert F. Scumaci Finance and )
Administration and )
Treasurer )
(Principal Accounting )
Officer) )
)
)
/s/ James G. Andress Director )
- ------------------------- )
James G. Andress )
)
)
) June 5, 1996
)
/s/ Digby W. Barrios Director )
- ------------------------- )
Digby W. Barrios )
)
)
)
/s/ Robert J. Cresci Director )
- ------------------------- )
Robert J. Cresci )
)
)
)
/s/ Robert F. Johnston Director )
- ------------------------- )
Robert F. Johnston )
)
)
)
/s/ Keith Mansford Director )
- ------------------------- )
Keith Mansford )
)
)
)
/s/ James F. Mrazek Director )
- ------------------------- )
James F. Mrazek )
)
)
)
/s/ Alan A. Steigrod Director )
- ------------------------- )
Alan A. Steigrod )
-4-
<PAGE> 5
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
4.1 Restated Certificate of Incorporation of the Registrant, as
amended
4.2 * Amended and Restated By-Laws of the Registrant, as amended
4.3 * Specimen Certificate of Common Stock of the Registrant
5 Opinion of Hale and Dorr
23.1 Consent of Hale and Dorr (included in Exhibit 5)
23.2 Consent of Coopers & Lybrand L.L.P.
24 Power of Attorney (included in the signature pages of this
Registration Statement)
- -------------------------
* Incorporated herein by reference from the Registrant's Registration
Statement on Form S-1 (File No. 33-41653).
-5-
<PAGE> 1
Exhibit 4.1
RESTATED CERTIFICATE OF INCORPORATION
OF
SEPRACOR INC.
Victor H. Woolley and Mark G. Borden, being the duly elected Vice
President, Finance and Secretary, respectively, of Sepracor Inc., a corporation
organized and existing under and by virtue of the laws of the State of Delaware,
do hereby certify as follows:
1. The name of the corporation is Sepracor Inc. (hereinafter called the
"Corporation").
The date of filing of its original Certificate of incorporation with
the Secretary of State was January 27, 1984.
2. That by vote of the Board of Directors of the Corporation at a
meeting held on October 29, 1991, and in accordance with Section 245 of the
General Corporation Law of Delaware, the Board of Directors adopted a resolution
setting forth the proposed Restated Certificate of Incorporation of the
Corporation.
3. This Restated Certificate of Incorporation only restates and
integrates and does not further amend the Corporation's Restated Certificate of
Incorporation and there is no discrepancy between such provisions and the
provisions of this Restated Certificate of Incorporation.
FIRST: The name of the corporation is Sepracor Inc. (hereinafter
called the "Corporation").
SECOND: The registered office of the Corporation is Corporation
Trust Center, 1209 Orange Street, in the City of Wilmington, in the County of
New Castle, in the State of Delaware. The name of its registered agent at that
address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of Delaware.
FOURTH: The aggregate number of shares which the Corporation shall
have authority to issue is 26,000,000 of which (i) 25,000,000 shares shall be
Common Stock, $0.10 par value per share ("Common Stock"), and (ii) 1,000,000
shares shall be Preferred Stock, $1.00 par value per share ("Preferred Stock").
<PAGE> 2
A. PREFERRED STOCK
Preferred Stock may be issued from time to time in one or more series,
each of such series to have such terms as stated or expressed herein and in the
resolution or resolutions providing for the issue of such series adopted by the
Board of Directors of the Corporation as hereinafter provided. Any shares of
Preferred Stock which may be redeemed, purchased or acquired by the Corporation
may be reissued except as otherwise provided by law. Different series of
Preferred Stock shall not be construed to constitute different classes of shares
for the purposes of voting by classes unless expressly provided.
Authority is hereby expressly granted to the Board of Directors from
time to time to issue the Preferred Stock in one or more series, and in
connection with the creation of any such series, by resolution or resolutions
providing for the issue of the shares thereof, to determine and fix such voting
powers, full or limited, or no voting powers, and such designations, preferences
and relative participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, including without
limitation thereof, dividend rights, conversion rights, redemption privileges
and liquidation preferences, as shall be stated and expressed in such
resolutions, all to the full extent now or hereafter permitted by the General
Corporation Law of Delaware. Without limiting the generality of the foregoing,
the resolutions providing for issuance of any series of Preferred Stock may
provide that such series shall be superior or rank equally or be junior to the
Preferred Stock of any other series to the extent permitted by law. Except as
otherwise provided in this Restated Certificate of Incorporation, no vote of the
holders of the Preferred Stock or Common Stock shall be a prerequisite to the
designation or issuance of any shares of any series of the Preferred Stock
authorized by and complying with the conditions of this Restated Certificate of
Incorporation, the right to have such vote being expressly waived by all present
and future holders of the capital stock of the Corporation."
B. COMMON STOCK.
1. General. The voting, dividend and liquidation rights of the holders
of the Common Stock are subject to and qualified by the rights of the holders
of the Preferred Stock.
2. Voting. The holders of the Common stock are entitled to one vote for
each share held at all meetings of stockholders (and written actions in lieu of
meetings). There shall be no cumulative voting.
-2-
<PAGE> 3
3. Dividends. Dividends may be declared and paid on the Common Stock
from funds lawfully available therefor as and when determined by the Board of
Directors and subject to any preferential dividend rights of any then
outstanding Preferred Stock.
4. Liquidation. Upon the dissolution or liquidation of the Corporation,
whether voluntary or involuntary, holders of Common Stock will be entitled to
receive all assets of the Corporation available for distribution to its
stockholders, subject to any preferential rights of any then outstanding
Preferred Stock.
FIFTH: To the fullest extent permitted by the Delaware General
Corporation Law, as it exists or may be amended, a director of the Corporation
shall be not liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director.
SIXTH: The election of directors need not be by written ballot
unless the by-laws so provide.
SEVENTH: The Board of Directors of the Corporation is authorized and
empowered from time to time in its discretion to make, alter, amend or repeal
by-laws of the Corporation, except as such power may be restricted or limited by
the General Corporation Law of the State of Delaware.
EIGHTH: Whenever any compromise or arrangement is proposed between
this Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agrees to any compromise or arrangement and to
any reorganization of this Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or
-3-
<PAGE> 4
class of stockholders of this Corporation, as the case may be, and also on this
Corporation.
NINTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation in the
manner now or hereafter prescribed by law, and all rights and powers conferred
herein on stockholders, directors and officers are subject to this reserved
power.
TENTH: This Article is inserted for the management of the business
and for the conduct of the affairs of the Corporation, and it is expressly
provided that it is intended to be in furtherance and not in limitation or
exclusion of the powers conferred by the statutes of the State of Delaware.
1. Number of Directors. The number of directors which shall constitute
the whole Board of Directors shall be determined by resolution of a majority of
the Board of Directors, but in no event shall be less than three. The number of
directors may be decreased at any time and from time to time by a majority of
the directors then in office, but only to eliminate vacancies existing by reason
of the death, resignation, removal or expiration of the term of one or more
directors. The directors shall be elected at the annual meeting of stockholders
by such stockholders as have the right to vote on such election. Directors need
not be stockholders of the Corporation.
2. Classes of Directors. The Board of Directors shall be and is divided
into three classes: Class I, Class II and Class III. No one class shall have
more than one director more than any other class. If a fraction is contained in
the quotient arrived at by dividing the authorized number of directors by three,
then, if such fraction is one-third, the extra director shall be a member of the
Class I and, if such fraction is two-thirds, one of the extra directors shall be
a member of Class I and the other extra director shall be a member of Class II,
unless otherwise provided for from time to time by resolution adopted by a
majority of the Board of Directors.
3. Election of Directors. Elections of directors need not be by written
ballot except as and to the extent provided in the
By-laws of the Corporation.
4. Terms of Office. Each director shall serve for a term ending on the
date of the third annual meeting following the annual meeting at which such
director was elected; provided, however, that each initial director in Class I
shall serve for a term ending on the date of the annual meeting next following
the end of the Corporation's fiscal year ending December 31, 1993;
-4-
<PAGE> 5
each initial director in Class II shall serve for a term ending on the date of
the annual meeting next following the end of the Corporation's fiscal year
ending December 31, 1992; and each initial director in Class III shall serve for
a term ending on the date of the annual meeting next following the end of the
Corporation's fiscal year ending December 31, 1991.
5. Allocation of Directors Among Classes in the Event of Increases or
Decreases in the Number of Directors. In the event of any increase or decrease
in the authorized number of directors, (i) each director then serving as such
shall nevertheless continue as a director of the class of which he is a member
until the expiration of his current term or his prior death, retirement or
resignation and (ii) the newly created or eliminated directorships resulting
from such increase or decrease shall be apportioned by the Board of Directors
among the three classes of directors so as to ensure that no one class has more
than one director more than any other class. To the extent possible, consistent
with the foregoing rule, any newly created directorships shall be added to those
classes whose terms of office are to expire at the latest dates following such
allocation, and any newly eliminated directorships shall be subtracted from
those classes whose terms of office are to expire at the earliest dates
following such allocation, unless otherwise provided for from time to time by
resolution adopted by a majority of the directors then in office, although less
than a quorum.
6. Tenure. Notwithstanding any provisions to the contrary contained
herein, each director shall hold office until his successor is elected and
qualified, or until his earlier death, resignation or removal.
7. Vacancies. Any vacancy in the Board of Directors, however occurring,
including a vacancy resulting from an enlargement of the Board, may be filled
only by vote of a majority of the directors then in office, although less than a
quorum, or by a sole remaining director. A director elected to fill a vacancy
shall be elected for the unexpired term of his predecessor in office, if
applicable, and a director chosen to fill a position resulting from an increase
in the number of directors shall hold office until the next election of the
class for which such director shall have been chosen and until his successor is
elected and qualified, or until his earlier death, resignation or removal.
8. Quorum. A majority of the total number of the whole Board of
Directors shall constitute a quorum at all meetings of the Board of Directors.
In the event one or more of the directors shall be disqualified to vote at any
meeting, then the required quorum shall be reduced by one for each such director
so disqualified; provided, however, that in no case shall less than
-5-
<PAGE> 6
one-third (1/3) of the number so fixed constitute a quorum. In the absence of a
quorum at any such meeting, a majority of the directors present may adjourn the
meeting from time to time without further notice other than announcement at the
meeting, until a quorum shall be present.
9. Action at Meeting. At any meeting of the Board of Directors at which
a quorum is present, the vote of a majority of those present shall be sufficient
to take any action, unless a different vote is specified by law or the
Corporation's Restated Certificate of Incorporation or By-Laws.
10. Removal. Any one or more or all of the directors may be removed,
with or without cause, by the holders of at least seventy- five percent (75%) of
the shares then entitled to vote at an election of directors.
11. Stockholder Nominations and Introduction of Business, Etc. Advance
notice of stockholder nominations for election of directors and other business
to be brought by stockholders before a meeting of stockholders shall be given in
the manner provided in the By-Laws of the Corporation.
12. Amendments to Article. Notwithstanding any other provisions of law,
this Restated Certificate of Incorporation or the Corporation's Amended and
Restated By-Laws, and notwithstanding the fact that a lesser percentage may be
specified by law, the affirmative vote of the holders of at least seventy-five
percent (75%) of the votes which all the stockholders would be entitled to cast
at any annual election of directors or class of directors shall be required to
amend or repeal, or to adopt any provision inconsistent with, this Article
TENTH."
ELEVENTH: Until the closing of a firm commitment, underwritten public
offering of the Corporation's Common Stock (a "Public Offering"), any action
required or permitted to be taken at any annual or special meeting of
stockholders of the Corporation may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth the action so
taken, is signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote on such action were present
and voted. Prompt notice of the taking of corporate action without a meeting by
less than unanimous written consent shall be given to those stockholders who
have not consented in writing. Effective upon the closing of a Public Offering,
stockholders of the Corporation may not take any action by written consent in
lieu of a meeting. Notwithstanding any other provision of law, this Restated
Certificate of Incorporation or the Corporation's By-laws, as
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<PAGE> 7
amended, and notwithstanding the fact that a lesser percentage may be
specified by law, the affirmative vote of the holders of at least seventy-five
percent (75%) of the votes which all the stockholders would be entitled to cast
at any annual election of directors or class of directors shall be required to
amend or repeal, or to adopt any provision inconsistent with this Article
ELEVENTH.
TWELFTH: Special meetings of stockholders may be called at any time by
the President or by the Chairman of the Board of Directors. Business transacted
at any special meeting of stockholders shall be limited to matters relating to
the purpose or purposes stated in the notice of meeting. Notwithstanding any
other provision of law, this Restated Certificate of Incorporation or the
Corporation's Amended and Restated By-laws, and notwithstanding the fact that a
lesser percentage may be specified by law, the affirmative vote of the holders
of at least seventy-five percent (75%) of the votes which all stockholders would
be entitled to cast at any annual election of directors or class of directors
shall be required to amend or repeal, or to adopt any provision inconsistent
with this Article TWELFTH."
THIRTEENTH: 1. Actions, Suits and Proceedings Other than by or in the
Right of the Corporation. The Corporation shall indemnify each person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation), by
reason of the fact that he is or was, or has agreed to become, a director or
officer of the Corporation, or is or was serving, or has agreed to serve, at the
request of the Corporation, as a director, officer or trustee of, or in a
similar capacity with, another corporation, partnership, joint venture, trust or
other enterprise (including any employee benefit plan) (all such persons being
referred to hereafter as an "Indemnitee"), or by reason of any action alleged to
have been taken or omitted in such capacity, against all expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him or on his behalf in connection with such action, suit
or proceeding and any appeal therefrom, if he acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best interests of
the Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in, or not opposed to, the best interests of the
Corporation, and, with respect to any criminal
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<PAGE> 8
action or proceeding, had reasonable cause to believe that his conduct was
unlawful. Notwithstanding anything to the contrary in this Article, except as
set forth in Section 6 below, the Corporation shall not indemnify an Indemnitee
seeking indemnification in connection with a proceeding (or part thereof)
initiated by the Indemnitee unless the initiation thereof was approved by the
Board of Directors of the Corporation.
2. Actions or Suits by or in the Right of the Corporation. The
Corporation shall indemnify any Indemnitee who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that he is or was, or has agreed to become, a director or
officer of the Corporation, or is or was serving, or has agreed to serve, at the
request of the Corporation, as a director, officer or trustee of, or in a
similar capacity with, another corporation, partnership, joint venture, trust or
other enterprise (including any employee benefit plan), or by reason of any
action alleged to have been taken or omitted in such capacity, against all
expenses (including attorneys' fees) and amounts paid in settlement actually and
reasonably incurred by him or on his behalf in connection with such action, suit
or proceeding and any appeal therefrom, if he acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best interests of
the Corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of such liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses (including attorneys' fees)
which the Court of Chancery of Delaware or such other court shall deem proper.
3. Indemnification for Expenses of Successful Party. Notwithstanding
the other provisions of this Article, to the extent that an Indemnitee has been
successful, on the merits or otherwise, in defense of any action, suit or
proceeding referred to in Sections 1 and 2 of this Article, or in defense of any
claim, issue or matter therein, or on appeal from any such action, suit or
proceeding, he shall be indemnified against all expenses (including attorneys'
fees) actually and reasonably incurred by him or on his behalf in connection
therewith. Without limiting the foregoing, if any action, suit or proceeding is
disposed of, on the merits or otherwise (including a disposition without
prejudice), without (i) the disposition being adverse to the Indemnitee, (ii) an
adjudication that the Indemnitee was liable to the Corporation, (iii) a plea of
guilty or nolo contendere by the
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<PAGE> 9
Indemnitee, (iv) an adjudication that the Indemnitee did not act in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, and (v) with respect to any criminal proceeding,
an adjudication that the Indemnitee had reasonable cause to believe his conduct
was unlawful, the Indemnitee shall be considered for the purposes hereof to
have been wholly successful with respect thereto.
4. Notification and Defense of Claim. As a condition precedent to his
right to be indemnified, the Indemnitee must notify the Corporation in writing
as soon as practicable of any action, suit, proceeding or investigation
involving him for which indemnity will or could be sought. With respect to any
action, suit, proceeding or investigation of which the Corporation is so
notified, the Corporation will be entitled to participate therein at its own
expense and/or to assume the defense thereof at its own expense, with legal
counsel reasonably acceptable to the Indemnitee. After notice from the
Corporation to the Indemnitee of its election so to assume such defense, the
Corporation shall not be liable to the Indemnitee for any legal or other
expenses subsequently incurred by the Indemnitee in connection with such claim,
other than as provided below in this Section 4. The Indemnitee shall have the
right to employ his own counsel in connection with such claim, but the fees and
expenses of such counsel incurred after notice from the Corporation of its
assumption of the defense thereof shall be at the expense of the Indemnitee
unless (i) the employment of counsel by the Indemnitee has been authorized by
the Corporation, (ii) counsel to the Indemnitee shall have reasonably concluded
that there may be a conflict of interest or position on any significant issue
between the Corporation and the Indemnitee in the conduct of the defense of such
action or (iii) the Corporation shall not in fact have employed counsel to
assume the defense of such action, in each of which cases the fees and expenses
of counsel for the Indemnitee shall be at the expense of the Corporation, except
as otherwise expressly provided by this Article. The Corporation shall not be
entitled, without the consent of the Indemnitee, to assume the defense of any
claim brought by or in the right of the Corporation or as to which counsel for
the Indemnitee shall have reasonably made the conclusion provided for in clause
(ii) above.
5. Advance of Expenses. Subject to the provisions of Section 6 below,
in the event that the Corporation does not assume the defense pursuant to
Section 4 of this Article of any action, suit, proceeding or investigation of
which the Corporation receives notice under this Article, any expenses
(including attorneys' fees) incurred by an Indemnitee in defending a civil or
criminal action, suit, proceeding or investigation or any appeal therefrom shall
be paid by the Corporation in advance of the final disposition of such matter,
provided, however, that the payment of
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<PAGE> 10
such expenses incurred by an Indemnitee in advance of the final disposition of
such matter shall be made only upon receipt of an undertaking by or on behalf of
the Indemnitee to repay all amounts so advanced in the event that it shall
ultimately be determined that the Indemnitee is not entitled to be indemnified
by the Corporation as authorized in this Article. Such undertaking may be
accepted without reference to the financial ability of such person to make such
repayment.
6. Procedure for Indemnification. In order to obtain indemnification or
advancement of expenses pursuant to Section 1, 2, 3 or 5 of this Article, the
Indemnitee shall submit to the Corporation a written request, including in such
request such documentation and information as is reasonably available to the
Indemnitee and is reasonably necessary to determine whether and to what extent
the Indemnitee is entitled to indemnification or advancement of expenses. Any
such indemnification or advancement of expenses shall be made promptly, and in
any event within 60 days after receipt by the Corporation of the written request
of the Indemnitee, unless with respect to requests under Section 1, 2 or 5 the
Corporation determines, by clear and convincing evidence, within such 60-day
period that the Indemnitee did not meet the applicable standard of conduct set
forth in Section 1 or 2, as the case may be. Such determination shall be made in
each instance by (a) a majority vote of a quorum of the directors of the
Corporation consisting of persons who are not at that time parties to the
action, suit or proceeding in question ("disinterested directors"), (b) if no
such quorum is obtainable, a majority vote of a committee of two or more
disinterested directors, (c) a majority vote of a quorum of the outstanding
shares of stock of all classes entitled to vote for directors, voting as a
single class, which quorum shall consist of stockholders who are not at that
time parties to the action, suit or proceeding in question, (d) independent
legal counsel (who may be regular legal counsel to the Corporation), or (e) a
court of competent jurisdiction.
7. Remedies. The right to indemnification or advances as granted by
this Article shall be enforceable by the Indemnitee in any court of competent
jurisdiction if the Corporation denies such request, in whole or in part, or if
no disposition thereof is made within the 60-day period referred to above in
Section 6. Unless otherwise provided by law, the burden of proving that the
Indemnitee is not entitled to indemnification or advancement of expenses under
this Article shall be on the Corporation. Neither the failure of the Corporation
to have made a determination prior to the commencement of such action that
indemnification is proper in the circumstances because the Indemnitee has met
the applicable standard of conduct, nor an actual determination by the
Corporation pursuant to Section 6 that the Indemnitee has not met such
applicable standard of conduct, shall be a defense to the
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<PAGE> 11
action or create a presumption that the Indemnitee has not met the applicable
standard of conduct. The Indemnitee's expenses (including attorneys' fees)
incurred in connection with successfully establishing his right to
indemnification, in whole or in part, in any such proceeding shall also be
indemnified by the Corporation.
8. Subsequent Amendment. No amendment, termination or repeal of this
Article or of the relevant provisions of the General Corporation Law of Delaware
or any other applicable laws shall affect or diminish in any way the rights of
any Indemnitee to indemnification under the provisions hereof with respect to
any action, suit, proceeding or investigation arising out of or relating to any
actions, transactions or facts occurring prior to the final adoption of such
amendment, termination or repeal.
9. Other Rights. The indemnification and advancement of expenses
provided by this Article shall not be deemed exclusive of any other rights to
which an Indemnitee seeking indemnification or advancement of expenses may be
entitled under any law (common or statutory), agreement or vote of stockholders
or disinterested directors or otherwise, both as to action in his official
capacity and as to action in any other capacity while holding office for the
Corporation, and shall continue as to an Indemnitee who has ceased to be a
director or officer, and shall inure to the benefit of the estate, heirs,
executors and administrators of the Indemnitee. Nothing contained in this
Article shall be deemed to prohibit, and the Corporation is specifically
authorized to enter into, agreements with officers and directors providing
indemnification rights and procedures different from those set forth in this
Article. In addition, the Corporation may, to the extent authorized from time to
time by its Board of Directors, grant indemnification rights to other employees
or agents of the Corporation or other persons serving the Corporation and such
rights may be equivalent to, or greater or less than, those set forth in this
Article.
10. Partial Indemnification. If an Indemnitee is entitled under any
provision of this Article to indemnification by the Corporation for some or a
portion of the expenses (including attorneys' fees), judgments, fines or amounts
paid in settlement actually and reasonably incurred by him or on his behalf in
connection with any action, suit, proceeding or investigation and any appeal
therefrom but not, however, for the total amount thereof, the Corporation shall
nevertheless indemnify the Indemnitee for the portion of such expenses
(including attorneys' fees), judgments, fines or amounts paid in settlement to
which the Indemnitee is entitled.
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<PAGE> 12
11. Insurance. The Corporation may purchase and maintain insurance, at
its expense, to protect itself and any director, officer, employee or agent of
the Corporation or another corporation, partnership, joint venture, trust or
other enterprise (including any employee benefit plan) against any expense,
liability or loss incurred by him in any such capacity, or arising out of his
status as such, whether or not the Corporation would have the power to indemnify
such person against such expense, liability or loss under the General
Corporation Law of Delaware.
12. Merger or Consolidation. If the Corporation is merged into or
consolidated with another corporation and the Corporation is not the surviving
corporation, the surviving corporation shall assume the obligations of the
Corporation under this Article with respect to any action, suit, proceeding or
investigation arising out of or relating to any actions, transactions or facts
occurring prior to the date of such merger or consolidation.
13. Savings Clause. If this Article or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each Indemnitee as to any expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement in
connection with any action, suit, proceeding or investigation, whether civil,
criminal or administrative, including an action by or in the right of the
Corporation, to the fullest extent permitted by any applicable portion of this
Article that shall not have been invalidated and to the fullest extent permitted
by applicable law.
14. Definitions. Terms used herein and defined in Section 145(h) and
Section 145(i) of the General Corporation Law of Delaware shall have the
respective meanings assigned to such terms in such Section 145(h) and Section
145(i).
15. Subsequent Legislation. If the General Corporation Law of Delaware
is amended after adoption of this Article to expand further the indemnification
permitted to Indemnitees, then the Corporation shall indemnify such persons to
the fullest extent permitted by the General Corporation Law of Delaware, as so
amended.
This Restated Certificate of Incorporation supersedes and takes the
place of the heretofore existing Restated Certificate of Incorporation of this
Corporation and any and all amendments, certificates and supplements thereto, if
any.
IN WITNESS WHEREOF, said Sepracor Inc. has caused this Restated
Certificate of Incorporation to be signed by Victor H.
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<PAGE> 13
Woolley, its Vice President, Finance, and attested by Mark G. Borden, its
Secretary, this 17th day of December, 1991.
By: /s/ Victor H. Woolley
-----------------------
Victor H. Woolley
Vice President, Finance
ATTEST:
/s/ Mark G. Borden
- -----------------------------
Mark G. Borden, Secretary
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<PAGE> 14
CERTIFICATE OF OWNERSHIP AND MERGER
merging
IBF Biotechnics Inc.,
a Delaware corporation
into
Sepracor Inc.,
a Delaware corporation
Sepracor Inc., a corporation organized and existing under the laws of
the State of Delaware (the "Corporation"), does hereby certify:
FIRST: That the Corporation was incorporated on the 27th day of
January, 1984, pursuant to the General Corporation Law of
the State of Delaware.
SECOND: That the Corporation owns all of the outstanding shares of the
only class of authorized capital stock of IBF Biotechnics Inc., a corporation
incorporated on December 8, 1986, pursuant to the General Corporation Law of the
State of Delaware.
THIRD: That the Corporation, by the following resolutions of its Board
of Directors, duly adopted at a Meeting of the Board of Directors on November
24, 1992, determined to merge IBF Biotechnics Inc. into the Corporation:
RESOLVED: That the Corporation, being the holder of 100% of the
authorized and outstanding capital stock of IBF
Biotechnics Inc., a Delaware corporation ("IBF"), hereby
approves and authorizes the merger of IBF with and into
the Company (the "IBF Merger") pursuant to Section 253
of the Delaware General Corporation Law, such merger to
be effective upon the filing of a Certificate of
Ownership and Merger with the Secretary
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<PAGE> 15
of State of Delaware, and that the Company hereby assumes
all of the obligations of IBF which the Company is required
to assume under Delaware law.
FURTHER
RESOLVED: That the Restated Certificate of Incorporation of the
Company, as amended, shall be the Certificate of
Incorporation of the Company as of the effective date of
the IBF Merger.
FURTHER
RESOLVED: That the appropriate officers of the Company be, and each of
them acting singly hereby is, authorized to execute all such
documents and instruments as they or any of them deem
necessary or appropriate to effectuate the purposes of the
foregoing resolutions.
IN WITNESS WHEREOF, Sepracor Inc. has caused this Certificate to be
signed by its President and attested by its Secretary, this 21st day of
December, 1992.
By: /s/ Timothy J. Barberich
-------------------------
Timothy J. Barberich,
President
ATTEST:
By:/s/ Mark G. Borden
------------------
Mark G. Borden
Secretary
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<PAGE> 16
Certificate of Designations of the Preferred Stock
of
Sepracor Inc.
To be Designated
Series A Convertible Preferred Stock
Sepracor, Inc., a Delaware corporation (the "Corporation"), pursuant to
authority conferred on the Board of Directors of the Corporation by the
Certificate of Incorporation and in accordance with the provisions of Section
151 of the General Corporation law of the State of Delaware, certifies that the
Board of Directors of the Corporation, by unanimous written consent in lieu of a
meeting, duly adopted the following resolution:
RESOLVED: That, pursuant to the authority expressly granted to and
vested in the Board of Directors of the Corporation in accordance with the
provisions of its Certificate of Incorporation, a series of Preferred Stock of
the Corporation be and hereby is established, consisting of 80,000 shares, to be
designated "Series A Convertible Preferred Stock" (hereinafter "Series A
Preferred Stock"); that the Board of Directors be and hereby is authorized to
issue such shares of Series A Preferred Stock from time to time and for such
consideration and on such terms as the Board of Directors shall determine; and
that, subject to the limitations provided by law and by the Certificate of
Incorporation, the powers, designations, preferences and relative,
participating, optional or other special rights of, and the qualifications,
limitations or restrictions upon, the Series A Preferred Stock shall be as
follows:
Eighty Thousand (80,000) shares of the authorized and unissued
Preferred Stock of the Corporation ("Series Preferred Stock") are hereby
designated "Series A Convertible Preferred Stock" (the "Series A Preferred
Stock") with the following rights, preferences, powers, privileges and
restrictions, qualifications and limitations.
1. Dividends.
(a) The Corporation shall not declare or pay any distributions
(as defined below) on shares of Common Stock until the holders of the Series A
Preferred Stock then outstanding shall have first received, or simultaneously
receive, a dividend on each
<PAGE> 17
outstanding share of Series A Preferred Stock in an amount at least equal to the
product of (i) the per share amount, if any, of the dividends or other
distribution to be declared, paid or set aside for the Common Stock, multiplied
by (ii) the number of shares of Common Stock into which such shares of Series A
Preferred Stock is then convertible.
(b) For purposes of this Section 1, unless the context
requires otherwise, "distribution" shall mean the transfer of cash, securities
or property without consideration, whether by way of dividend or otherwise,
payable other than in Common Stock or other securities of the Corporation, or
the purchase or redemption of shares of the Corporation (other than repurchases
of Common Stock held by employees or directors of, or consultants to, the
Corporation upon termination of their employment or services pursuant to
agreements providing for such repurchase and other than redemptions in
liquidation or dissolution of the Corporation) for cash, securities or property,
including any such transfer, purchase or redemption by a subsidiary of this
Corporation.
2. Liquidation, Dissolution or Winding Up.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of shares of Series A
Preferred Stock then outstanding shall be entitled to be paid out of the assets
of the Corporation available for distribution to its stockholders, after and
subject to the payment in full of all amounts required to be distributed to the
holders of any other class or series of stock of the Corporation ranking on
liquidation prior and in preference to the Series A Preferred Stock
(collectively referred to as "Senior Preferred Stock"), but before any payment
shall be made to the holders of Common Stock or any other class or series of
stock ranking on liquidation junior to the Series A Preferred Stock (such Common
Stock and other stock being collectively referred to as "Junior Stock") by
reason of their ownership thereof, an amount equal to $63.00 per share, together
with dividends or distributions required to be declared under Section 1(a). If
upon any such liquidation, dissolution or winding up of the Corporation the
remaining assets of the Corporation available for distribution to its
stockholders shall be insufficient to pay the holders of shares of Series A
Preferred Stock the full amount to which they shall be entitled, the holders of
shares of Series A Preferred Stock and any class or series of stock ranking on
liquidation on a parity with the Series A Preferred Stock shall hare ratably in
any distribution of the remaining assets and funds of the Corporation in
proportion to the respective amounts which would otherwise be payable in respect
of the shares held by them upon such distribution if all amounts payable on or
with respect to such shares were paid in full.
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<PAGE> 18
(b) After the payment of all preferential amounts required to
be paid to the holders of Senior Preferred Stock, Series A Preferred Stock and
any other class or series of stock of the Corporation ranking on liquidation on
a parity with the Series A Preferred Stock, upon the dissolution, liquidation or
winding up of the Corporation, the holders of shares of Junior Stock then
outstanding shall be entitled to receive the remaining assets and funds of the
Corporation available for distribution to its stockholders.
(c) In the event of any merger or consolidation of the
Corporation into or with another corporation (except one in which the holders of
capital stock of the Corporation immediately prior to such merger or
consolidation continue to hold at least 60% by voting power of the capital stock
of the surviving corporation), or the sale of all or substantially all of the
assets of the Corporation where the consideration payable to the holders of
Series A Preferred Stock (in the case of a merger or consolidation), or the
consideration payable to such holders, together with all other available assets
of the Corporation (in the case of an asset sale), is less than $63.00 per share
of Series A Preferred Stock, then, if the holders of at least a majority of the
then outstanding shares of Series A Preferred Stock so elect by giving written
notice thereof to the Corporation at least three days before the effective date
of such event, then such merger, consolidation or asset sale shall be deemed to
be a liquidation of the Corporation, and all consideration payable to the
stockholders of the Corporation (in the case of a merger or consolidation), or
all consideration payable to the Corporation, together with all other available
assets of the Corporation (in the case of an asset sale), shall be distributed
to the holders of capital stock of the Corporation in accordance with
Subsections 2(a) and 2(b) above. The Corporation shall promptly provide to the
holders of shares of Series A Preferred Stock such information concerning the
terms of such merger, consolidation or asset sale and the value of the assets of
the Corporation as may reasonably be requested by the holders of Series A
Preferred Stock in order to assist them in determining whether to make such an
election. The amount deemed distributed to the holders of Series A Preferred
Stock upon any such merger or consolidation shall be the cash or the value of
the property, rights or securities distributed to such holders by the acquiring
person, firm or other entity. The value of such property, rights or other
securities shall be reasonably determined by the Board of Directors of the
Corporation. If no notice of the election permitted by this Subsection (c) is
given, the provisions of Subsection 4(i) shall apply. Any other merger or
consolidation of the Corporation into or with another corporation shall not be
deemed to be a liquidation, dissolution, or winding up of the Corporation for
purposes of this Section 2.
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<PAGE> 19
3. Voting.
(a) Each holder of outstanding shares of Series A Preferred
Stock shall be entitled to the number of votes equal to the number of whole
shares of Common Stock into which the shares of Series A Preferred Stock held by
such holder are then convertible (as adjusted form time to time pursuant to
Section 4 hereof), at each meeting of stockholders of the Corporation (and
written actions of stockholders in lieu of meetings) with respect to any and all
matters presented to the stockholders of the Corporation for their action or
consideration. Except as provided by law, or by the provisions establishing any
other series of Series Preferred Stock, holders of Series A Preferred Stock and
of any other outstanding series of Series Preferred Stock shall vote together
with the holders of Common Stock as a single class.
(b) Without the consent of the holders of majority of the
Series A Preferred Stock, the Corporation shall not enter into any merger or
consolidation (except one in which the holders of capital stock of the
Corporation immediately prior to such merger or consolidation continue to hold
at least 60% by voting power of the capital stock of the surviving corporation)
or the sale of substantially all the assets of the Corporation where the
consideration payable to the holders of the Series A Preferred Stock shall have
a value less than $63.00 per share, in the same form as the consideration being
given to the majority of shares of Common Stock with the value being determined
by an independent appraiser.
4. Optional Conversion. The holders 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, at the option of the holder thereof, at any time and from
time to time, and without the payment of additional consideration by the holder
thereof, into such number of fully paid and nonassessable shares of Common Stock
as is determined by dividing $63.00 by the Conversion Price (as defined below)
in effect at the time of conversion. The "Conversion Price" shall initially be
$6.30. Such initial Conversion Price, and the rate at which shares of Series A
Preferred Stock may be converted into shares of Common Stock, shall be subject
to adjustment as provided below.
(b) Fractional Shares. 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
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<PAGE> 20
such fraction multiplied by the then fair market value of the Common Stock.
(c) Mechanics of Conversion.
(i) In order for a holder of Series A Preferred Stock
to convert shares of Series A Preferred Stock into shares of Common Stock, such
holder shall surrender the certificate or certificates for such shares of Series
A Preferred Stock, at the office of the transfer agent for the Series A
Preferred Stock (or at the principal office of the Corporation if the
Corporation serves as its own transfer agent), together with written notice that
such holder elects to convert all or any number of the shares of the Series A
Preferred Stock represented by such certificate or certificates. Such notice
shall state such holder's name or the names of the nominees in which such holder
wishes the certificate or certificates for shares of Common Stock to be issued.
If required by the Corporation, certificates surrendered for conversion shall be
endorsed or accompanied by a written instrument or instruments of transfer, in
form satisfactory to the Corporation, duly executed by the registered holder or
his or its attorney duly authorized in writing. The date of receipt of such
certificates and notice by the transfer agent (or by the Corporation if the
Corporation serves as its own transfer agent) shall be the conversion date
("Conversion Date"). The Corporation shall, as soon as practicable after the
Conversion Date, issue and deliver at such office to such holder of Series A
Preferred Stock, or to his or its nominees, a certificate or certificates for
the number of shares of Common Stock to which such holder shall be entitled,
together with cash in lieu of any fraction of a share.
(ii) The Corporation shall at all times when the Series
A Preferred Stock shall be outstanding, reserve and keep available out of its
authorized but unissued stock, for the purpose of effecting the conversion of
the Series A Preferred Stock, such number of its duly authorized shares of
Common Stock as shall from time to time be sufficient to effect the conversion
of all outstanding Series A Preferred Stock. Before taking any action which
would cause an adjustment reducing the Conversion Price below the then par value
of the shares of Common Stock issuable upon conversion of the Series A Preferred
Stock, the Corporation will take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Corporation may validly and
legally issue fully paid and nonassessable shares of Common Stock at such
adjusted Conversion Price.
(iii) Upon any such conversion, no adjustment of the
Conversion Price shall be made for any declared or accrued but unpaid dividends
on the Series A Preferred Stock surrendered for conversion or on the Common
Stock delivered upon conversion.
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<PAGE> 21
(iv) All shares of Series A Preferred Stock which shall
have been surrendered for conversion as herein provided shall no longer be
deemed to be outstanding and all rights with respect to such shares, including
the rights, if any, to receive notices and to vote, shall immediately cease and
terminate on the Conversion Date, except only the right of the holders thereof
to receive shares of Common Stock in exchange therefor and payment of any
dividends declared but unpaid thereon. Any shares of Series A Preferred Stock so
converted shall be retired and cancelled and shall not be reissued, and the
Corporation (without the need for stockholder action) may from time to time take
such appropriate action as may be necessary to reduce the authorized Series A
Preferred Stock accordingly.
(v) The Corporation shall pay any and all issue and
other taxes that may be payable in respect of any issuance or delivery of shares
of Common Stock upon conversion of shares of Series A Preferred Stock pursuant
to this Section 4. The Corporation shall not, however, be required to pay any
tax which may be payable in respect of any transfer involved in the issuance and
delivery of shares of Common Stock in a name other than that in which the shares
of Series A Preferred Stock so converted were registered, and no such issuance
or delivery shall be made unless and until the person or entity requesting such
issuance has paid to the Corporation the amount of any such tax or has
established, to the satisfaction of the Corporation, that such tax has been
paid.
(d) Adjustments to Conversion Price for Diluting Issues:
(i) Special Definitions. For purposes of this
Subsection 4(d), the following definitions shall apply:
(A) "Option" shall mean rights, options or
warrants to subscribe for, purchase or otherwise acquire Common Stock or
Convertible Securities, excluding options described in subsection 4(d)(i)(D)(V)
below.
(B) "Original Issue Price" shall mean the date on
which a share of Series A Preferred Stock was first issued.
(C) "Convertible Securities" shall mean any
evidences of indebtedness, shares or other securities directly or indirectly
convertible into or exchangeable for Common Stock.
(D) "Additional Shares of Common Stock" shall
mean all shares of Common Stock issued (or, pursuant to Subsection
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<PAGE> 22
4(d)(iii) below, deemed to be issued) by the Corporation after the Original
Issue Date, other than shares issued or issuable:
(E) "Common Stock" shall be deemed to include
equity security having rights to receive dividends or distributions (including
liquidation) not limited to a fixed sum or percentage of the purchase price
therefor. The price at which such securities are deemed issued for purposes of
this Section 4(d) shall take into account as appropriate the relationship
between the terms thereof and the terms of the Series A Preferred Stock.
(I) upon exercise of any warrants or
options or conversion of any
convertible securities of the
Corporation outstanding prior to the
Original Issuance Date;
(II) as a dividend or distribution on
Series A Preferred Stock;
(III) by reason of a dividend, stock
split, split-up or other
distribution on shares of Common
Stock that is covered by Subsection
4(e) or 4(f) below;
(IV) in connection with the acquisition
by the Corporation of another
corporation of business;
(V) to employees or directors of, or
consultants to, the Corporation or
any subsidiary as approved by the
Board of Directors of the
Corporation, or
(VI) to pharmaceutical companies or other
strategic partners in connection
with a licensing, development, joint
venture or similar arrangement
between the Corporation and such
company or partner.
(ii) No Adjustment of Conversion Price. No adjustment
in the number of shares of Common Stock into which the Series A Preferred Stock
is convertible shall be made, by adjustment in the applicable Conversion Price
thereof: (a) unless the consideration per share (determined pursuant to
Subsection 4(d)(v)) for an Additional Share of Common Stock issued or deemed
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<PAGE> 23
to be issued by the Corporation is less than the applicable Conversion Price in
effect on the date of, and immediately prior to, the issue of such Additional
Shares, or (b) if prior to such issuance, the Corporation receives written
notice from the holders of at least a majority of the then outstanding shares of
Series A Preferred Stock agreeing that no such adjustment shall be made as the
result of the issuance of Additional Shares of Common Stock.
(iii) Issue of Securities Deemed Issue of Additional
Shares of Common Stock. If the Corporation at any time or from time to time
after the Original Issue Date shall issue any Options or Convertible Securities
or shall fix a record date for the determination of holders of any class of
securities entitled to receive any such Options or Convertible Securities, then
the maximum number of shares of Common Stock (as set forth in the instrument
relating thereto without regard to any provision contained therein for a
subsequent adjustment of such number) issuable upon the exercise of such Options
or, in the case of Convertible Securities and Options therefor, the conversion
or exchange of such Convertible Securities, shall be deemed to be Additional
Shares of Common Stock issued as of the time of such issue or, in case such a
record date shall have been fixed, as of the close of business on such record
date, provided that Additional Shares of Common Stock shall not be deemed to
have been issued unless the consideration per share (determined pursuant to
Subsection 4(d)(v) hereof) of such Additional Shares of Common Stock would be
less than the applicable Conversion Price in effect on the date of and
immediately prior to such issue, or such record date, as the case may be, and
provided further that in any such case in which Additional Shares of Common
Stock are deemed to be issued:
(A) No further adjustment in the Conversion Price
shall be made upon the subsequent issue of Convertible Securities or shares of
Common Stock upon the exercise of such Options or conversion or exchange of such
Convertible Securities;
(B) If such Options or Convertible Securities by
their terms provide, with the passage of time or otherwise, for any increase or
decrease in the consideration payable to the Corporation, upon the exercise,
conversion or exchange thereof, the Conversion Price computed upon the original
issue thereof (or upon the occurrence of a record date with respect thereto),
and any subsequent adjustments based thereon, shall, upon any such increase or
decrease becoming effective, be recomputed to reflect such increase or decrease,
as applicable, insofar as it affects such Options or the rights or conversion or
exchange under such Convertible Securities;
-8-
<PAGE> 24
(C) Upon the expiration or termination of any
unexercised Option, the Conversion Price shall not be readjusted; and
(D) No readjustment pursuant to clause (B) above
shall have the effect of increasing the Conversion Price to an amount which
exceeds the lower of (i) the Conversion Price on the original adjustment date,
or (ii) the Conversion Price that would have resulted from any issuances of
Additional Shares of Common Stock between the original adjustment date and such
readjustment date.
(iv) Adjustment of Conversion Price Upon Issuance of
Additional Shares of Common Stock. In the event the Corporation shall at any
time after the Original Issue Date issue Additional Shares of Common Stock
(including Additional Shares of Common Stock deemed to be issued pursuant to
Subsection 4(d)(iii), but excluding shares issued as a dividend or distribution
as provided in Subsection 4(f) or upon a stock split or combination as provided
in Subsection 4(e)), without consideration or for a consideration per share less
than the applicable Conversion Price in effect on the date of and immediately
prior to such issue, then and in such event, such Conversion Price shall be
reduced, concurrently with such issue, to a price equal to the consideration per
share received by the Corporation for the issue of the Additional Shares of
Common Stock (determined pursuant to Subsection 4(d)(v)).
(v) Determination of Consideration. For purposes of
this Subsection 4(d), the consideration received by the Corporation for the
issue of any Additional Shares of Common Stock shall be computed as follows:
(A) Cash and Property: Such consideration shall:
(I) insofar as it consists of cash, be
computed at the aggregate of cash received by the Corporation, excluding amounts
paid or payable for accrued interest or accrued dividends;
(II) insofar as it consists of property
other than cash, be computed at the fair market value thereof at the time of
such issue, as reasonably determined by the Board of Directors, and
(III) in the event Additional Shares of
Common Stock are issued together with other shares or securities or other assets
of the Corporation for consideration which covers both, be the proportion of
such consideration so received,
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<PAGE> 25
computed as provided in clauses (I) and (II) above, as reasonably determined by
the Board of Directors.
(B) Options and Convertible Securities. The
consideration per share received by the Corporation for Additional Shares of
Common Stock deemed to have been issued pursuant to Subsection 4(d)(iii),
relating to Options and Convertible Securities, shall be determined by dividing
(x) the total amount, if any, received or
receivable by the Corporation as consideration for the issue of such Options or
Convertible Securities, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment of such
consideration) payable to the Corporation upon the exercise of such Options or
the conversion or exchange of such Convertible Securities, or in the case of
Options for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities, by
(y) the maximum number of shares of Common
Stock (as set forth in the instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of such number) issuable
upon the exercise of such Options or the conversion or exchange of such
Convertible Securities.
(e) Adjustment for Stock Splits and Combinations. If the
Corporation shall at any time or from time to time after the Original Issue Date
effect a subdivision of the outstanding Common Stock, the Conversion Price then
in effect immediately before that subdivision shall be proportionately
decreased. If the Corporation shall at any time or from time to time after the
Original Issue Date effect a subdivision of the Series A Preferred Stock, the
Conversion Price then in effect immediately before that subdivision shall be
proportionately increased. If the Corporation shall at any time or from time to
time after the Original Issue Date combine the outstanding shares of Common
Stock, the Conversion Price then in effect immediately before the combination
shall be proportionately increased. If the Corporation shall at any time or from
time to time after the Original Issue Date combine the outstanding shares of
Series A Preferred Stock, the Conversion Price then in effect immediately before
the combination shall be proportionately decreased. Any adjustment under this
paragraph shall become effective at the close of business on the date the
subdivision or combination becomes effective.
-10-
<PAGE> 26
(f) Adjustment for Certain Dividends and Distributions. In the
event the Corporation at any time, or from time to time after the Original Issue
Date 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 for the Series A Preferred Stock 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 for the Series A Preferred Stock then in effect by a fraction:
(1) 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
(2) 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
therefore, the Conversion Price for the Series A Preferred Stock shall be
recomputed accordingly as of the close of business on such record date and
thereafter the Conversion Price for the Series A Preferred Stock shall be
adjusted pursuant to this paragraph as of the time of actual payment of such
dividends or distributions; and provided further, however, that no such
adjustment shall be made if the holders of Series A Preferred Stock
simultaneously receive a dividend or other distribution of shares of Common
Stock in a number equal to the number of shares of Common Stock as they would
have received if all outstanding shares of Series A Preferred Stock had been
converted into Common Stock on the date of such event.
(g) Prohibition on Certain Dividends and Distributions. The
Corporation shall not, at any time or from time to time after the Original Issue
Date for the Series A Preferred Stock, 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, unless the holders of Series A Preferred Stock simultaneously
receive a dividend or other distribution of such securities in an amount equal
to the amount of such securities as they would have received if all outstanding
shares of Series A
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<PAGE> 27
Preferred Stock had been converted into Common Stock on the date of such event.
(h) 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 above, or a reorganization, merger, consolidation, or sale of
assets provided for below), then and in each such event the holder of each such
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 herein.
(i) Adjustment for Merger or Reorganization, etc. In case of
any consolidation or merger of the Corporation with or into another corporation
or the sale of all or substantially all of the assets of the Corporation to
another corporation, each share of Series A Preferred Stock shall thereafter be
convertible (or shall be converted into a security which shall be convertible)
into the kind and amount of shares of stock or other securities or property to
which a holder of the number of shares of Common Stock of the Corporation
deliverable upon conversion of such Series A Preferred Stock would have been
entitled upon such consolidation, merger or sale; and, in such case, appropriate
adjustment (as reasonably determined by the Board of Directors) shall be made in
the application of the provisions in this Section 4 set forth with respect to
the rights and interest thereafter of the holders of the Series A Preferred
Stock, to the end that the provisions set forth in this Section 4 (including
provisions with respect to changes in and other adjustments of the Conversion
Price) shall thereafter be applicable, as nearly as reasonably may be, in
relation to any shares of stock or other property thereafter deliverable upon
the conversion of the Series A Preferred Stock.
(j) No Impairment. The Corporation will 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 hereunder by the Corporation, but
will at all times in good faith assist in the carrying out of all the provisions
of this Section 4 and in the
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<PAGE> 28
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 against
impairment. If any event occurs as to which the provisions of this Section 4 are
not applicable or if applicable would not fairly protect the rights of the
holders of Series A Preferred Stock in accordance with the essential intent and
principles of such provisions, the application of such provisions will be
adjusted in accordance with such essential intent and principles so as to
protect such rights, but in no event shall the Conversion Price be increased.
(k) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price 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
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 Series A Preferred Stock, furnish or cause to be furnished
to such holder a similar certificate setting forth (i) such adjustments and
readjustments, (ii) the Conversion Price then in effect, and (iii) the number of
shares of Common Stock and the amount, if any, of other property which then
would be received upon the conversion of Series A Preferred Stock.
(l) Notice of Record Date. In the event:
(i) that the Corporation declares a dividend (or any
other distribution) on its Common Stock payable in
Common Stock or other securities of the
Corporation;
(ii) that the Corporation subdivides or combines its
outstanding shares of Common Stock;
(iii) of any reclassification of the Common Stock of the
Corporation (other than a subdivision or
combination of its outstanding shares of Common
Stock or a stock dividend or stock distribution
thereon), or of any consolidation or merger of the
Corporation into or with another corporation, or
of the sale of all or substantially all of the
assets of the Corporation; or
(iv) of the involuntary or voluntary dissolution,
liquidation or winding upon of the Corporation;
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<PAGE> 29
then the Corporation shall cause to be filed at its principal office or at the
office of the transfer agent of the Series A Preferred Stock, and shall cause to
be mailed to the holders of the Series A Preferred Stock at their last addresses
as shown on the records of the Corporation or such transfer agent, at least ten
days prior to the date specified in (A) below or twenty days before the date
specified in (B) below, a notice stating
(A) the record date of such dividend, distribution,
subdivision or combination, or, if a record is not to
be taken, the date as of which the holders of Common
Stock of record to be entitled to such dividend,
distribution, subdivision or combination are to be
determined, or
(B) the date on which such reclassification,
consolidation, merger, sale, dissolution,
liquidation or winding up is expected to become
effective, and the date as of which it is expected
that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock
for securities or other property deliverable upon
such reclassification, consolidation, merger,
sale, dissolution or winding up.
5. Mandatory Conversion.
(a) All outstanding shares of Series A Preferred Stock
shall automatically be converted into shares of Common Stock, at the then
effective conversion rate, upon the earlier of (i) September 30, 2004 or (ii)
upon written notice by the Corporation to the holders of Series A Preferred
Stock (which notice may not be delivered prior to September 30, 1995) following
a period of twenty (20) consecutive trading days in which the lst reported sales
price of the Common Stock on the Nasdaq National Market (or a national
securities exchange) equals or exceeds 160% of the then effective Conversion
Price (the "Mandatory Conversion Date").
(b) All holders of record of shares of Series A Preferred
Stock will be given written notice of the Mandatory Conversion Date and the
place designated for mandatory conversion of all such shares of Series A
Preferred Stock pursuant to this Section 5. Such notice shall be sent by first
class or registered mail, postage prepaid, to each record holder of Series A
Preferred Stock at such holder's address last shown on the records of the
transfer agent for the Series A Preferred Stock (or the records of the
Corporation, if it serves as its own transfer agent). Upon receipt of such
notice, each holder of shares of Series A Preferred Stock shall surrender his or
its certificate or
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<PAGE> 30
certificates for all such shares to the Corporation at the place designated in
such notice, and shall thereafter receive certificates for the number of shares
of Common Stock to which such holder is entitled pursuant to this Section 5. On
the Mandatory Conversion Date, all rights with respect to the Series A Preferred
Stock so converted, including the rights, if any, to receive notices and vote,
will terminate, except only the rights of the holders thereof, upon surrender of
their certificate or certificates therefor, to receive certificates for the
number of shares of Common Stock into which such Series A Preferred Stock has
been converted, and payment of any declared but unpaid dividends thereon and any
dividends or distributions required to be declared under Section 1(a). If so
required by the Corporation, certificates surrendered for conversion shall be
endorsed or accompanied by written instrument or instruments of transfer, in
form satisfactory to the Corporation, duly executed by the registered holder or
by his or its attorney duly authorized in writing. As soon as practicable after
the Mandatory Conversion Date and the surrender of the certificate or
certificates for Series A Preferred Stock, the Corporation shall cause to be
issued and delivered to such holder, or on his or its written order, a
certificate or certificates for the number of full shares of Common Stock
issuable on such conversion in accordance with the provisions hereof and cash as
provided in Subsection 4(b) in respect of any fraction of a share of Common
Stock otherwise issuable upon such conversion.
(c) All certificates evidencing shares of Series A Preferred
Stock which are required to be surrendered for conversion in accordance with the
provisions hereof shall, from and after the Mandatory Conversion Date, be deemed
to have been retired and cancelled and the shares of Series A Preferred Stock
represented thereby converted into Common Stock for all purposes,
notwithstanding the failure of the holder or holders thereof to surrender such
certificates on or prior to such date. The Corporation may thereafter take such
appropriate action (without the need for stockholder action) as may be necessary
to reduce the authorized Series A Preferred Stock accordingly.
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
affixed hereto and this Certificate of Amendment to be signed by its President
and attested to by its Assistant Secretary this 30th day of September, 1994.
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<PAGE> 31
SEPRACOR, INC.
By: /s/ Timothy J. Barberich
------------------------
ATTEST:
/s/ Victor Woolley
- ---------------------------------
Assistant Secretary
[Corporate Seal]
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<PAGE> 32
CERTIFICATE OF CORRECTION
FILED TO CORRECT CERTAIN ERRORS IN
THE CERTIFICATE OF DESIGNATIONS OF
THE PREFERRED STOCK OF
SEPRACOR INC.
TO BE DESIGNATED
SERIES A CONVERTIBLE PREFERRED STOCK
FILED IN THE OFFICE OF THE SECRETARY OF STATE OF DELAWARE ON SEPTEMBER 30, 1994.
SEPRACOR INC., a corporation organized and existing under and by virtue
of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
1. The name of the corporation is Sepracor Inc.
2. The Certificate of Designations of the Preferred Stock of
Sepracor Inc. to be designated Series A Convertible Preferred
Stock was filed with the Secretary of State of the State of
Delaware on September 30, 1994 and that said certificate
requires corrections permitted by subsection (f) of Section
103 of the General Corporation Law of the State of Delaware.
3. The inaccuracies or defects of said certificate to be
corrected are as follows:
(a) Certain words were inadvertently omitted from
Subsection (b) of Section 3;
(b) A typographical error is included in Subsection
(d)(i)(D)(I) of Section 4;
(c) Subsection (d)(i)(E) of Section 4 was
inadvertently located within subsection (d)(i)(D);
(d) The final page of said certificate was
inadvertently numbered as page 15.
In order to correct said inaccuracies or defects, the following shall
occur:
(a) Subsection (b) of Section 3 shall read in its
entirety:
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<PAGE> 33
Without the consent of the holders of a majority of the shares
of Series A Preferred Stock then outstanding, the Corporation
shall not enter into any merger or consolidation (except one
in which the holders of capital stock of the Corporation
immediately prior to such merger or consolidation continue to
hold at least 60% by voting power of the capital stock of the
surviving corporation) or the sale of substantially all the
assets of the Corporation where the consideration payable to
the holders of the Series A Preferred Stock shall have a value
less than $63.00 per share in the same form as the
consideration being given to the majority of shares of Common
Stock with the value being determined by an independent
appraiser.";
(b) The words "Original Issuance Date" in
Subsection (d)(i)(D)(I) of Section 4 shall be
changed to "Original Issue Date.";
(c) Subsection (d)(i)(E) of Section 4, shall be
relocated to immediately follow
subsection (d)(i)(D)(VI) of Section 4;
(d) The final page shall be renumbered as page 16.
IN WITNESS WHEREOF, said Sepracor Inc. has caused this certificate to
be signed by Timothy J. Barberich, its President, and attested by Victor H.
Woolley, its Assistant Secretary, this 28 day of October, 1994.
SEPRACOR INC.
By: /s/ Timothy J. Barberich
------------------------
President
ATTEST:
By: /s/ Victor Woolley
-------------------
Assistant Secretary
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<PAGE> 34
CERTIFICATE OF DESIGNATIONS, PREFERENCES,
AND RELATIVE, PARTICIPATING, OPTIONAL AND
OTHER SPECIAL RIGHTS OF PREFERRED STOCK
AND QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS THEREOF
OF
SERIES B REDEEMABLE EXCHANGEABLE PREFERRED STOCK
OF
SEPRACOR INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
Sepracor Inc., a Delaware corporation (the "Corporation"), certifies
that pursuant to the authority contained in Article FOURTH of its Restated
Certificate of Incorporation (the "Certificate of Incorporation") and in
accordance with the provisions of Section 151 of the General Corporation Law of
the State of Delaware, the Board of Directors of the Corporation, at a meeting
duly called and held, at which a quorum was present and acting throughout, duly
adopted the following resolution, which resolution remains in full force and
effect on the date hereof:
RESOLVED, that there is hereby established a series of authorized
Preferred Stock having a par value of $1.00 per share, which series shall be
designated "Series B Redeemable Exchangeable Preferred Stock" (hereinafter
"Series B Preferred Stock"), shall consist of 312,500 shares and shall have the
following powers, preferences and relative, participating, optional and other
special rights, and qualifications, limitations and restrictions thereof:
1. Dividends. Holders of shares of Series B Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available therefor, an annual cash dividend of $1.92 per share,
payable on each March 8 after the date of issuance of Series B Preferred Stock
until March 8, 2000. Such dividends shall accrue from day to day and shall be
cumulative from the date of issuance of each share of Series B Preferred Stock,
whether or not declared. After March 8, 2000, no dividends shall accrue on
outstanding shares of Series B Preferred Stock. Dividends will be payable to
holders of record as they appear on the stock records of the Corporation on such
<PAGE> 35
record dates, not more than 60 days preceding the applicable payment date, as
shall be fixed by the Board of Directors of the Corporation. Dividends payable
for any partial period shall be calculated on the basis of a 360-day year, and
accrued but unpaid dividends shall not bear interest.
2. Liquidation, Dissolution or Winding Up: Certain Mergers and
Consolidations.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of shares of Series B
Preferred Stock then outstanding shall be entitled to be paid out of the assets
of the Corporation available for distribution to its stockholders, after and
subject to payment in full of all amounts required to be distributed to any
class or series of stock of the Corporation ranking on liquidation prior and in
preference to the Series B Preferred Stock (such stock being collectively
referred to as the "Senior Preferred Stock"), but before any payment shall be
made to the holders of the common stock, par value $0.10 per share, of the
Corporation ("Common Stock") or any other class or series of stock ranking on
liquidation junior to the Series B Preferred Stock (such Common Stock and other
stock being collectively referred to as "Junior Stock") by reason of their
ownership thereof, an amount equal to $16.00 per share (subject to appropriate
adjustment in the event of any stock dividend, stock split, combination or other
similar recapitalization affecting such shares), plus any dividends declared or
accrued but unpaid on such shares. The Series A Convertible Preferred Stock of
the Corporation (the "Series A Preferred Stock") shall rank on liquidation on a
parity with the Series B Preferred Stock. If upon any such liquidation,
dissolution or winding up of the Corporation the remaining assets of the
Corporation available for distribution to the stockholders shall be insufficient
to pay the holders of shares of Series A Preferred Stock and Series B Preferred
Stock the full amount to which they shall be entitled, the holders of shares of
Series A Preferred Stock, Series B Preferred Stock and any class or series of
stock ranking on liquidation on a parity with the Series A Preferred Stock and
the Series B Preferred Stock shall share ratably in any distribution of the
remaining assets and funds of the Corporation in proportion to the respective
amounts which would otherwise be payable in respect of the shares held by them
upon such distribution if all amounts payable on or with respect to such shares
were paid in full.
(b) After the payment of all preferential amounts required to
be paid to the holders of Senior Preferred Stock, Series A Preferred Stock,
Series B Preferred Stock and any other class or series of stock of the
Corporation ranking on liquidation on a parity with the Series B Preferred
Stock, upon the
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<PAGE> 36
dissolution, liquidation or winding up of the Corporation, the
holders of shares of Junior Stock then outstanding shall be entitled to receive
the remaining assets and funds of the Corporation available for distribution to
its stockholders.
(c) At least 20 days prior to the date of any dissolution,
liquidation or winding up of the Corporation, the Corporation shall give notice
thereof in the manner provided by Section 5(c) hereof in order to permit the
holders of Series B Preferred Stock to exercise their right to exchange such
shares before their Exchange Rights (as defined in Section 5 hereof) terminate.
(d) In the event of any merger or consolidation pursuant to
which holders of outstanding shares of Common Stock exchange such shares for
cash, property and/or securities of another corporation or entity (a "Qualified
Merger"), then such merger or consolidation shall be deemed to be a liquidation
of the Corporation for purposes of this Section 2.
3. Voting. Except as otherwise required by law, holders of Series B
Preferred Stock shall not be entitled to any voting rights by virtue of such
ownership.
4. Restriction on Creation of Certain Senior Shares. So long as any
Series B Preferred Stock shall be outstanding, the Corporation shall not,
without the prior written approval of holders of a majority of the Series B
Preferred Stock then outstanding, create any class or series of stock ranking,
as to payment of dividends or liquidation preference, equal or prior to the
Series B Preferred Stock if the terms of such stock in any way restrict the
Corporation's ability to comply with the powers, preferences and special rights
of the Series B Preferred Stock other than in connection with the operation of
the preference upon liquidation, dissolution or winding up (or deemed
liquidation) of such other class or series of stock as set forth in Section 2
hereof.
5. Optional Exchange. The holders of Series B Preferred Stock shall
have exchange rights as follows (the "Exchange Rights"):
(a) Right to Exchange.
(i) At any time after the earlier of (A) 20 days prior to
March 8, 2000, (b) the date, prior to March 8, 2000, on which the shares of
common stock, $0.01 par value per share (the "BioSepra Common Stock"), of
BioSepra Inc., a Delaware corporation ("BioSepra") have a closing price as
reported by the Wall Street Journal (or if the Wall Street Journal is not then
being
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<PAGE> 37
published, publications of similar reliability and repute), greater than 112.5%
of the Exchange Price (as determined in accordance with the provisions of this
Section 5), (C) 20 days prior to a BioSepra Event (as defined in Subsection
5(a)(ii) below), (D) 20 days prior to the date of any redemption made pursuant
to Section 6 or 7 hereof or (E) 20 days prior to the date of any dissolution,
liquidation or winding up of the Corporation pursuant to Section 2 hereof,
subject to funds legally available therefor, each share of Series B Preferred
Stock shall be exchangeable, at the option of the holder thereof, and without
the payment of additional consideration by the holder thereof, for such number
of outstanding shares of BioSepra Common Stock held by the Corporation (the
"Owned BioSepra Common Stock") as is determined by dividing $16.00 by the
Exchange Price (as defined below) in effect at the time of exchange. The
"Exchange Price" shall initially be $16.00. Such initial Exchange Price, and the
rate at which shares of Series B Preferred Stock may be exchanged for shares of
BioSepra Common Stock, shall be subject to adjustment as provided below. No
declared or accrued but unpaid dividends shall be paid upon such exchange.
(ii) In the event of a Change of Control of BioSepra, as
defined in Section 7(b) hereof (a "BioSepra Event"), the Exchange Rights may be
exercised at the option of each holder of Series B Preferred Stock prior to the
effectiveness of the BioSepra Event pursuant to the following:
(A) The Corporation shall use its best efforts to
provide written notice to each holder of Series B Preferred Stock at least 20
days prior to the date on which the BioSepra Event is expected to become
effective, notifying such holder of (I) the date on which the BioSepra Event is
expected to become effective and (II) the date as of which the holders of record
of BioSepra Common Stock shall be entitled to any consideration to be paid to
such holders pursuant to the BioSepra Event; and
(B) Subsequent to the receipt of such written
notice pursuant to clause (A) above by each holder of Series B Preferred Stock,
the Corporation and each holder of such stock shall use their respective best
efforts to effectuate such an optional exchange (pursuant to the provisions of
Subsection 5(a)(i) hereof and Section 5(c) hereof) to insure that those holders
of Series B Preferred Stock who exercise their Exchange Rights shall be holders
of BioSepra Common Stock prior to the effectiveness of the BioSepra Event.
(iii) In the event of a notice of any redemption of shares
of Series B Preferred Stock pursuant to Sections 6 or 7 hereof, the Exchange
Rights of the holders of the shares
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<PAGE> 38
designated for redemption shall terminate at the close of business on the second
full day preceding the date fixed for redemption, unless the redemption price is
not paid when due, in which case the Exchange Rights for such shares shall
continue until such price is paid in full. In the event of a liquidation of the
Corporation pursuant to Section 2 hereof, the Exchange Rights shall terminate at
the close of business on the first full day preceding the date fixed for the
payment of any amounts distributable on liquidation to the holders of Series B
Preferred Stock.
(iv) With respect solely to shares of BioSepra Common
Stock obtained pursuant to an exchange governed by Sections 5(a)(i)(B) or
5(a)(i)(C) above, holders of such shares of BioSepra Common Stock shall, upon
such exchange, provide a proxy to the Board of Directors of the Corporation or
their designees (expiring on March 8, 2000) for the voting of such shares with
respect to any vote of the stockholders of BioSepra regarding any BioSepra
Event.
(b) Fractional Shares. No fractional share of BioSepra Common
Stock shall be issued upon exchange 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
effective Exchange Price.
(c) Mechanics of an Optional Exchange.
(i) In order for each holder of Series B Preferred
Stock to exchange shares of Series B Preferred Stock for shares of BioSepra
Common Stock, such holder shall surrender the certificate or certificates for
such shares of Series B Preferred Stock at the principal office of the
Corporation, together with written notice to the Corporation that such holder
elects to exchange all or any number of the shares of Series B Preferred Stock
represented by such certificate or certificates. Such notice shall state such
holder's name or the names of the nominees in which such holder wishes the
certificate or certificates for shares of BioSepra Common Stock to be issued. If
required by the Corporation, certificates surrendered for exchange shall be
endorsed or accompanied by a written instrument or instruments of transfer, in
form reasonably satisfactory to the Corporation, duly executed by the registered
holder or his or its attorney duly authorized in writing. The date of receipt of
such certificates and notice by the Corporation shall be the exchange date (the
"Exchange Date"). The Corporation shall, as soon as practicable after the
Exchange Date, deliver at such office to such holder of Series B Preferred
Stock, or to his or its nominees, a certificate or certificates for the number
of shares of BioSepra Common Stock to which such
-5-
<PAGE> 39
holder shall be entitled, together with cash in lieu of any fraction of a share.
On and after the Exchange Date, such holder or his or its nominees shall be
deemed to be the record owner of such shares of BioSepra Common Stock and have
all the rights appertaining thereto.
(ii) The Corporation shall at all times when the Series
B Preferred Stock shall be outstanding, reserve for the purpose of effecting the
exchange of the Series B Preferred Stock, such number of its shares of BioSepra
Common Stock as shall from time to time be sufficient to effect the exchange of
all outstanding Series B Preferred Stock.
(iii) All shares of Series B Preferred Stock which shall
have been surrendered for exchange as herein provided shall no longer be deemed
to be outstanding and all rights with respect to such shares, including the
right, if any, to receive notices and to vote, shall immediately cease and
terminate on the Exchange Date, except only the right of the holders thereof to
receive certificates representing shares of BioSepra Common Stock in exchange
therefor. Any shares of Series B Preferred Stock so exchanged shall be retired
and cancelled and shall not be reissued, and the Corporation (without the need
for stockholder action) may from time to time take such appropriate action as
may be necessary to reduce the authorized Series B Preferred Stock accordingly.
(d) Adjustments to Exchange Price for Diluting Issues:
(i) Special Definitions. For purposes of this Section
5(d), the following definitions shall apply:
(A) "Option" shall mean rights, options or
warrants to subscribe for, purchase or otherwise acquire BioSepra Common Stock
or Exchangeable Securities (as defined below), excluding options granted to
persons described in Subsection 5(d)(i)(D)(IV) hereof.
(B) "Original Issue Date" shall mean March 8,
1995.
(C) "Exchangeable Securities" shall mean any
evidences of indebtedness, shares or other securities directly or indirectly
convertible into or exchangeable for BioSepra Common Stock.
(D) "Additional Shares of BioSepra Common Stock"
shall mean all shares of BioSepra Common Stock issued (or, pursuant to
Subsection 5(d)(iii) hereof, deemed to be issued) by
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<PAGE> 40
BioSepra after the Original Issue Date, other than shares issued or issuable:
(I) upon exercise of any warrants or
options or conversion of any
convertible securities of BioSepra
outstanding immediately prior to the
Original Issue Date;
(II) by reason of a dividend, stock split,
split-up or other distribution on
shares of BioSepra Common Stock that
is covered by Subsection 5(e) or 5(f)
hereof;
(III) in connection with the acquisition by
BioSepra of another corporation or
business;
(IV) to employees or directors of, or
consultants to, BioSepra or any
subsidiary as approved by the Board of
Directors of BioSepra; or
(V) to pharmaceutical companies or other
strategic partners in connection with
a licensing, development, joint
venture or similar arrangement between
BioSepra and such company or partner.
(E) The BioSepra Common Stock shall be deemed to
include any equity security having rights to receive dividends or distributions
(including liquidation) not limited to a fixed sum or percentage of the purchase
price therefor.
(F) "Initial Shares Outstanding" shall mean the
number of shares of BioSepra Common Stock issued and outstanding immediately
prior to an adjustment of the Exchange Price pursuant to Subsection 5(d)(iv)
hereof.
(ii) No Adjustment of Exchange Price. No adjustment in
the number of shares of BioSepra Common Stock into which the Series B Preferred
Stock is exchangeable shall be made, by adjustment in the applicable Exchange
Price thereof: (a) unless the consideration per share (determined pursuant to
Subsection 5(d)(v) hereof) for an Additional Share of BioSepra Common Stock
issued or deemed to be issued by BioSepra is less than the applicable Exchange
Price in effect on the date of, and immediately prior to, the issue of such
Additional Shares, or
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<PAGE> 41
(b) if prior to such issuance, the Corporation receives written notice from the
holders of at least a majority of the then outstanding shares of Series B
Preferred Stock agreeing that no such adjustment shall be made as the result of
the issuance of Additional Shares of BioSepra Common Stock.
(iii) Issue of Securities Deemed Issue of Additional
Shares of BioSepra Common Stock.
If BioSepra at any time or from time to time after the Original Issue
Date shall issue any Options or Exchangeable Securities or shall fix a record
date for the determination of holders of any class of securities entitled to
receive any such options or Exchangeable Securities, then the maximum number of
shares of BioSepra Common Stock (as set froth in the instrument relating thereto
without regard to any provision contained therein for a subsequent adjustment of
such number) issuable upon the exercise of such Options or, in the case of
Exchangeable Securities and Options therefor, the conversion or exchange of such
Exchangeable Securities, shall be deemed to be Additional Shares of BioSepra
Common Stock issued as of the time of such issue or, in case such a record date
shall have been fixed, as of the close of business on such record date, provided
that Additional Shares of BioSepra Common Stock shall not be deemed to have been
issued unless the consideration per share (determined pursuant to Subsection
5(d)(v) hereof) of such Additional Shares of BioSepra Common Stock would be less
than the applicable Exchange Price in effect on the date of and immediately
prior to such issue, or such record date, as the case may be, and provided
further that in any such case in which Additional Shares of BioSepra Common
Stock are deemed to be issued:
(A) No further adjustment in the Exchange Price
shall be made upon the subsequent issue of Exchangeable Securities or shares of
BioSepra Common Stock upon the exercise of such Options or conversion or
exchange of such Exchangeable Securities;
(B) If such Options or Exchangeable Securities by
their terms provide, with the passage of time or otherwise, for any increase or
decrease in the consideration payable to the Corporation, upon the exercise,
conversion or exchange thereof, the Exchange Price computed upon the original
issue thereof (or upon the occurrence of a record date with respect thereto),
and any subsequent adjustments based thereon, shall, upon any such increase or
decrease becoming effective, be recomputed to reflect such increase or decrease,
as applicable, insofar as it affects such Options or the rights of conversion or
exchange under such Exchangeable Securities;
-8-
<PAGE> 42
(C) Upon the expiration or termination of any
unexercised Option, the Exchange Price shall not be readjusted; and
(D) No readjustment pursuant to clause (B) above
shall have the effect of increasing the Exchange Price to an amount which
exceeds the lower of (I) the Exchange Price on the original adjustment date, or
(II) the Exchange Price that would have resulted from any issuances of
Additional Shares of BioSepra Common Stock between the original adjustment date
and such readjustment date.
(iv) Adjustment of Exchange Price Upon Issuance of
Additional Shares of BioSepra Common Stock.
In the event BioSepra shall at any time after the Original Issue Date
issue Additional Shares of BioSepra Common Stock (including Additional Shares of
BioSepra Common Stock deemed to be issued pursuant to Subsection 5(d)(iii)
hereof, but excluding shares issued upon a stock split or combination as
provided in Section 5(e) hereof or as a dividend or distribution as provided in
Section 5(f) hereof), without consideration or for a consideration per share
less than the applicable Exchange Price in effect on the date of and immediately
prior to such issue, then and in such event, such Exchange Price shall be
reduced, concurrently with such issue, to a price equal to the greater of (i)
$12.00 (as proportionately adjusted in the event the Exchange Price is or has
been subject to adjustment pursuant to Sections 5(e) or 5(f) hereof) and (ii)
such Exchange Price multiplied by a fraction, the numerator of which is the
Initial Shares Outstanding and the denominator of which is the Initial Shares
Outstanding plus the number of such Additional Shares of BioSepra Common Stock.
(v) Determination of Consideration. For purposes of
this Section 5(d), the consideration received by BioSepra for the issue of any
Additional Shares of BioSepra Common Stock shall be computed as follows:
(A) Cash and Property: Such consideration shall:
(I) insofar as it consists of cash, be
computed at the aggregate of cash received by BioSepra, excluding amounts paid
or payable for accrued interest or accrued dividends;
(II) insofar as it consists of property
other than cash, be computed at the fair market value thereof at the time of
such issue, as reasonably determined by the Board of Directors of BioSepra; and
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<PAGE> 43
(III) in the event Additional Shares of
BioSepra Common Stock are issued together with other shares or securities or
other assets of BioSepra for consideration which covers both, be the proportion
of such consideration so received, computed as provided in clauses (I) and (II)
above, as reasonably determined by the Board of Directors of BioSepra.
(B) Options and Exchangeable Securities. The
consideration per share received by BioSepra for Additional Shares of BioSepra
Common Stock deemed to have been issued pursuant to Subsection 5(d)(iii) hereof,
relating to Options and Exchangeable Securities, shall be determined by
dividing:
(x) the total amount, if any, received or
receivable by BioSepra as consideration for the issue of such Options or
Exchangeable Securities, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment of such
consideration) payable to BioSepra upon the exercise of such Options or the
conversion or exchange of such Exchangeable Securities, or in the case of
Options for Exchangeable Securities, the exercise of such Options for
Exchangeable Securities and the conversion or exchange of such Exchangeable
Securities, by
(y) the maximum number of shares of
BioSepra Common Stock (as set forth in the instruments relating thereto, without
regard to any provision contained therein for a subsequent adjustment of such
number) issuable upon the exercise of such Options or the conversion or exchange
of such Exchangeable Securities.
(e) Adjustment for Stock Splits and Combinations. If BioSepra
shall at any time or from time to time after the Original Issue Date effect a
subdivision of the outstanding BioSepra Common Stock, the Exchange Price then in
effect immediately before that subdivision shall be proportionately decreased.
If BioSepra shall at any time or from time to time after the Original Issue Date
combine the outstanding shares of BioSepra Common Stock, the Exchange Price then
in effect immediately before the combination shall be proportionately increased.
Any adjustment under this Section 5(e) shall become effective at the close of
business on the date the subdivision or combination becomes effective.
(f) Adjustment for Certain Dividends and Distributions. In the
event BioSepra at any time, or from time to time after the Original Issue Date
shall make or issue, or fix a record date for the determination of holders of
BioSepra Common Stock entitled to receive, a dividend or other distribution
payable in additional shares of BioSepra Common Stock, then and in each such
event the
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<PAGE> 44
Exchange Price for the Series B Preferred Stock 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 Exchange Price for the Series B Preferred Stock then in effect
by a fraction:
(x) the numerator of which shall be the total number
of shares of BioSepra 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 BioSepra 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
BioSepra Common Stock issuable in payment of such dividend or
distribution;
provided, however, that 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 Exchange Price for the Series B Preferred Stock shall be
recomputed accordingly as of the close of business on such record date and
thereafter the Exchange Price for the Series B Preferred Stock shall be adjusted
pursuant to this Section 5(f) as of the time of actual payment of such dividends
or distributions.
(g) Adjustments for Other Dividends and Distributions. In the
event BioSepra at any time after the Original Issue Date shall make or issue, or
fix a record date for the determination of holders of BioSepra Common stock
entitled to receive, a dividend or other distribution payable in securities of
BioSepra other than shares of BioSepra Common Stock, then and in each such event
the Corporation shall make provision so that the holders of the Series B
Preferred Stock shall receive upon exchange thereof in addition to the number of
shares of BioSepra Common Stock receivable thereupon, the amount of securities
of BioSepra that they would have received had the Series B Preferred Stock been
exchanged for BioSepra Common Stock immediately prior to the date of such event
and had they thereafter, during the period from the date of such event to and
including the Exchange 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 5(g) with respect to the rights of the
holders of Series B Preferred Stock.
(h) Adjustment for Reclassification, Exchange or Substitution.
If the BioSepra Common Stock issuable upon the exchange of the Series B
Preferred Stock shall be changed into the
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<PAGE> 45
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 above, or a
reorganization, merger, consolidation, or sale of assets provided for below),
then and in each such event the holder of each such share of Series B Preferred
Stock shall have the right thereafter to exchange 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 BioSepra Common Stock for which such shares of Series B Preferred
Stock might have been exchanged immediately prior to such reorganization,
reclassification, or change, all subject to further adjustment as provided
herein.
(i) Adjustment for Merger or Reorganization, etc. In case of
any consolidation or merger of BioSepra with or into another corporation or the
sale of all or substantially all of the assets of BioSepra to another
corporation, each share of Series B Preferred Stock shall thereafter be
exchangeable (or shall be exchanged for a security which shall be exchangeable)
for the kind and amount of shares of stock or other securities or property to
which a holder of the number of shares of BioSepra Common Stock deliverable upon
exchange of such Series B Preferred Stock would have been entitled upon such
consolidation, merger or sale.
(j) No Impairment. Without limiting the foregoing, the
Corporation shall use its best efforts to cause BioSepra to carry out all the
provisions of this Section 5 and to cause BioSepra to take all such action as
may be necessary or appropriate in order to protect the Exchange Rights of the
holders of Series B Preferred Stock against impairment.
(k) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Exchange Price pursuant to this Section 5, the
Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
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.
6. Optional Redemption.
(a) Qualified Merger. At any time after the date on which the
Corporation has entered into a definitive agreement relating to a Qualified
Merger (as defined in Section 2(d) hereof), the Corporation may redeem all, but
not less than all, of the Series B Preferred Stock by paying a redemption price
of
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<PAGE> 46
$16.00 plus any declared or accrued but unpaid dividends in cash, for each share
of Series B Preferred Stock then redeemed.
(b) Notice of Section 6(a) Redemption. At least 10 days prior
to the date fixed for any redemption of Series B Preferred Stock pursuant to
Section 6(a) hereof, the Corporation shall provide written notice of the
redemption of Series B Preferred Stock to each holder of record of Series B
Preferred Stock to be redeemed, notifying such holder of the election of the
Corporation to redeem such shares, specifying the redemption date, the time and
date at which such holder's Exchange Rights (pursuant to Section 5 hereof), if
any, as to such shares terminate (which shall be the close of business on the
second full day preceding the redemption date) and the section of this
resolution pursuant to which such redemption is being made and calling upon such
holder to surrender to the Corporation, in the manner and at the place
designated, his or its certificate or certificates representing the shares to be
redeemed (such notice is hereinafter referred to as the "Redemption Notice"). On
or prior to the redemption date, each holder of Series B Preferred Stock to be
redeemed shall surrender his or its certificate or certificates representing
such shares to the Corporation, in the manner and at the place designated in the
Redemption Notice, and thereupon the redemption price of such shares shall be
payable to the order of the person whose name appears on such certificate or
certificates as the owner thereof and each surrendered certificate or
certificates as the owner thereof and each surrendered certificate shall be
cancelled. From and after such redemption date, unless there shall have been a
default in payment of the redemption price, all rights of the holders of Series
B Preferred Stock designated for redemption in the Redemption Notice as holders
of Series B Preferred Stock (except the right to receive the redemption price,
and interest thereon at the rate of 10% per annum if the redemption price is not
paid when due, upon surrender of their certificate or certificates) shall cease
with respect to such shares, and such shares shall not thereafter be transferred
on the books of the Corporation or be deemed to be outstanding for any purpose
whatsoever. Notwithstanding the foregoing, if said 10% rate of interest is in
excess of the rate permitted under applicable usury laws, said rate shall be
reduced to the maximum interest rate permissible under said usury laws.
7. Mandatory Redemption.
(a) March 8, 2000 and Notice Thereof. The Corporation shall,
on March 8, 2000, redeem for cash all outstanding shares of Series B Preferred
Stock at a redemption price equal to $16.00 per share, plus any dividends
declared or accrued but unpaid thereon. The notice provisions of Section 6(b)
hereof shall apply to a mandatory redemption pursuant to this Section 7(a).
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<PAGE> 47
(b) Change of Control of BioSepra Inc. If, at any time on or
prior to March 8, 2000, there is a Change of Control (as defined below) of
BioSepra, the Corporation (or any successor in interest to the Corporation)
shall, no later than five business days after such Change of Control, redeem for
cash all outstanding shares of Series B Preferred Stock at a redemption price
equal to one of the following:
(i) $25.60 per share of Series B Preferred Stock if
the BioSepra Market Capitalization (as defined below) is $120,031,950 or less;
(ii) $32.00 per share of Series B Preferred Stock if
the BioSepra Market Capitalization is between $120,031,950 and $168,044,730; or
(iii) $48.00 per share of Series B Preferred Stock if
the BioSepra Market Capitalization is $168,044,730 or more.
No declared or accrued but unpaid dividends with respect to the
Series B Preferred Stock shall be paid upon a redemption made pursuant to this
Section 7(b).
A "Change of Control" of BioSepra shall occur or be deemed to have
occurred if any of the following events occur: (A) any "person," as such term is
used in Section 13(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), (other than the Corporation (or its successor), Beckman
Instruments, Inc. (or its affiliate) or a holder of Series B Preferred Stock (or
an affiliate of such holder), any trustee or other fiduciary holding securities
under an employee benefit plan of BioSepra, or any corporation owned directly or
indirectly by the stockholders of BioSepra in substantially the same proportion
as their ownership of stock of BioSepra) is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of BioSepra representing 30% or more of the combined voting power of
BioSepra's then outstanding securities and the Corporation is not or ceases to
be the beneficial owner of securities of BioSepra representing a greater
percentage of such combined voting power than held by such person; (B)
individuals who, as of March 8, 1995, constitute at least a majority of the
Board of Directors of BioSepra (as of the date hereof, the "Incumbent Board")
cease for any reason to constitute at least a majority of the Board of Directors
of BioSepra, provided that any person becoming a director subsequent to March 8,
1995 whose election, or nomination for election by BioSepra's stockholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board (other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or
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<PAGE> 48
threatened election contest relating to the election of the directors of
BioSepra, as such terms are used in Rule 14a-11 of Regulation 14A under the
Exchange Act) shall be, for purposes hereof, considered as though such person
were a member of the Incumbent Board; (C) the stockholders of BioSepra approve a
merger or consolidation of BioSepra with any other corporation (other than
Beckman Instruments, Inc. (or its affiliate) or a holder of Series B Preferred
Stock (or an affiliate of such holder)), other than (I) a merger or
consolidation which would result in the voting securities of BioSepra
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than a majority of the combined voting power of the
voting securities of BioSepra or such surviving entity outstanding immediately
after such merger or consolidation or (II) a merger or consolidation effected to
implement a recapitalization of BioSepra (or similar transaction) in which no
"person" (as hereinabove defined) acquires more than 30% of the combined voting
power of BioSepra's then outstanding securities; or (D) the stockholders of
BioSepra approve a plan of complete liquidation of BioSepra or an agreement for
the sale or disposition by BioSepra of all or any substantial portion of
BioSepra's assets; provided, however, that unless one or more of the events or
conditions specified above shall have occurred, a change of control of the
Corporation pursuant to a merger, consolidation, sale of stock or assets, or
otherwise, without more shall not be deemed to be a Change of Control of
BioSepra.
"BioSepra Market Capitalization" shall mean, for the purpose of this
Section 7(b), the product of (A) the BioSepra Share Price (as defined below) and
(B) the number of shares issued and outstanding of BioSepra Common Stock plus
the number of shares issuable upon the exercise, conversion or exchange of
outstanding options, warrants, convertible or exchangeable securities or other
rights to acquire shares of BioSepra Common Stock, whether vested or unvested.
The "BioSepra Share Price" shall mean the average closing price per
share of BioSepra Common Stock, as reported by the Wall Street Journal (or if
the Wall Street Journal is not then being published, publications of similar
reliability and repute), for the three consecutive trading days immediately
preceding a Change of Control.
(c) Notice of Section 7(b) Redemption. The Corporation shall
provide written notice of the redemption of the Series B Preferred Stock
pursuant to Section 7(b) hereof to each holder of record of Series B Preferred
Stock to be redeemed as soon as possible, but no less than three calendar days,
prior to the date on which such redemption is to be made. Except as provided in
the
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<PAGE> 49
preceding sentence, the notice provisions of Section 6(b) hereof shall apply
to a mandatory redemption pursuant to Section 7(b) hereof.
8. Early Redemption at Election of Holders.
(a) Upon the written request of the holders of a majority of
the then outstanding shares of Series B Preferred Stock (the "Majority
Requesting Holder(s)") received by the Corporation at least 90 days prior to
Monday, March 10, 1997, on March 10, 1997 and on each of the first, second and
third anniversaries thereof (each such date being referred to hereinafter as an
"Early Redemption Date", the Corporation will redeem from each holder of shares
of Series B Preferred Stock, at a price per share as set forth below, subject to
appropriate adjustment in the event of any stock dividend, stock split,
combination or other similar recapitalization affecting such shares (the "Early
Redemption Price"), the following respective portions of the number of shares of
Series B Preferred Stock held by each such holder on the applicable Early
Redemption Date:
<TABLE>
<CAPTION>
Portion of the Then Outstanding
Shares of
Series B Preferred Per Share
Redemption Date Stock to be Redeemed Redemption Price
- --------------- -------------------- ----------------
<S> <C> <C>
March 10, 1997 25% $17.98
March 10, 1998 33 1/3% $19.06
March 10, 1999 50% $20.20
March 10, 2000 All then outstanding shares $21.41
of Series B Preferred Stock
</TABLE>
No declared or accrued but unpaid dividends with respect to the
Series B Preferred Stock shall be paid upon a redemption made pursuant to this
Section 8(a).
(b) No later than 20 days after receipt of the written notice
from the Majority Requesting Holder(s) pursuant to Section 8(a) hereof, the
Corporation shall provide written notice of the applicable early redemption of
Series B Preferred Stock to each other holder of record of such stock, notifying
such holder of the election of the Majority Requesting Holder(s) to redeem such
shares, the Early Redemption Price and the applicable Early Redemption Date.
(c) From and after such applicable Early Redemption Date,
unless there shall have been a default in payment of the applicable Early
Redemption Price, all rights of each holder (except the right to receive the
applicable Early Redemption Price, and interest thereon at the rate of 10% per
annum if the
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<PAGE> 50
applicable Early Redemption Price is not paid when due, upon presentation and
surrender of their certificate or certificates) shall cease with respect to such
shares, and such shares shall not thereafter be transferred on the books of the
Corporation or be deemed to be outstanding for any purpose whatsoever.
Notwithstanding the foregoing, if said 10% rate of interest is in excess of the
rate permitted under applicable usury laws, said rate shall be reduced to the
maximum interest rate permissible under said usury laws.
9. Deposit of Redemption Price. With respect to any redemption made
pursuant to Sections 6, 7 or 8 hereof, on or prior to the applicable redemption
date, the Corporation shall deposit the redemption price of all applicable
shares of Series B Preferred Stock with a bank or trust company having aggregate
capital and surplus in excess of $500,000,000 as a trust fund for the benefit of
the holders of Series B Preferred Stock, with irrevocable instructions and
authority to the bank or trust company to pay the redemption price for such
shares to their respective holders on or after the redemption date upon receipt
of notification from the Corporation that such holder has surrendered his or its
share certificate to the Corporation. The balance of any monies deposited by the
Corporation pursuant to this Section 9 remaining unclaimed at the expiration of
one year following the redemption date shall thereafter be returned to the
Corporation upon its request expressed in a resolution of its Board of
Directors.
10. Purchase of Series B Preferred Stock. Nothing herein contained
shall prevent or restrict the purchase by the Corporation, from time to time
either at public or private sale, of the whole or any part of the Series B
Preferred Stock at such price or prices as the holders of Series B Preferred
Stock and the Corporation may mutually agree upon, subject to the provisions of
applicable law.
11. Funds Legally Available. If the funds of the Corporation legally
available for redemption of Series B Preferred Stock on a redemption date are
insufficient to redeem the shares of Series B Preferred Stock required to be
redeemed on such date, those funds which are legally available will be used to
redeem the maximum possible number of such shares of Series B Preferred Stock
ratably on the basis of the number of shares of Series B Preferred Stock which
would be redeemed on such date if the funds of the Corporation legally available
therefor had been sufficient to redeem all shares of Series B Preferred Stock.
At any time thereafter when additional funds of the Corporation become legally
available for the redemption of Series B Preferred Stock, such funds will be
used, at the end of the next succeeding fiscal quarter, to redeem the balance of
the shares which the Corporation
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<PAGE> 51
was theretofore obligated to redeem, ratably on the basis set forth in the
preceding sentence. Without limiting the foregoing, the Corporation shall be in
default when any amounts due to be paid on a redemption date are not legally
available. Holders of such unredeemed shares of Series B Preferred Stock shall
have the right to receive the applicable redemption price and interest thereon
at the rate of 10% per annum for the period in which the Corporation is
obligated to redeem such shares. If said 10% rate of interest is in excess of
the rate permitted under applicable usury laws, said rate shall be reduced to
the maximum interest rate permissible under said usury laws.
12. Cancellation and Subsequent Reduction of Authorized Series B
Preferred Stock. Any Series B Preferred Stock redeemed pursuant to this
resolution will be cancelled and will not under any circumstances be reissued,
sold or transferred and the Corporation may from time to time take such
appropriate action as may be necessary to reduce the authorized Series B
Preferred Stock accordingly.
13. Notices. All notices, requests, consents and other communications
made pursuant to this resolution shall be in writing and shall be delivered by
hand, telecopy (if confirmed) or mailed by first-class certified or registered
mail, return receipt requested, postage prepaid. Such notices shall be deemed to
have been made upon dispatch to the appropriate addressee, except for such
notices that are delivered by first-class certified or registered mail, in which
case such notices shall be deemed to have been made upon receipt by the
appropriate addressee. Notice to each holder of Series B Preferred Stock shall
be sent in each case to the telecopy number or address last shown on the records
of the Corporation for such holder. Notice to the Corporation shall be sent in
each case to the telecopy number or address of an appropriate addressee located
at the Corporation's principal office.
IN WITNESS WHEREOF, the Corporation has caused its corporate
seal to be affixed hereto and this Certificate to be duly executed by Timothy J.
Barberich, its President, this day of March, 1995.
SEPRACOR INC.,
a Delaware corporation
By: /s/ Timothy J. Barberich
------------------------
Timothy J. Barberich
President
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<PAGE> 52
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
SEPRACOR INC.
Sepracor Inc., a corporation organized and existing under and by virtue
of the General Corporation Law of the State of Delaware (the "Corporation"),
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of said Corporation, at a meeting
duly called and held on February 14, 1995, as filed with the minutes of the
Board of Directors, duly adopted a resolution pursuant to Section 242 of the
General Corporation Law of the State of Delaware proposing and declaring
advisable the following amendment to the Restated Certificate of Incorporation
of the Corporation:
RESOLVED: That the first paragraph of Article FOURTH of the
Corporation's Restated Certificate of Incorporation be
amended to read in its entirety as follows:
FOURTH: The total number of shares of all classes of
stock which the Corporation has authority to issue is
thirty-six million shares (36,000,000) consisting of
thirty-five million (35,000,000) shares of common stock,
$.10 par value per share ("Common Stock"), and one
million (1,000,000) shares of Preferred Stock, $1.00 par
value per share ("Preferred Stock").
SECOND: That the foregoing Amendment to the Corporation's
Restated Certificate of Incorporation was adopted by the holders of a majority
of the outstanding shares of Common Stock and
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<PAGE> 53
Series A Convertible Preferred Stock at the Corporation's Annual Meeting of
Stockholders held on May 17, 1995 pursuant to notice duly given.
IN WITNESS WHEREOF, Sepracor Inc. has caused this Certificate to be
signed by Timothy J. Barberich, its President, and attested by Victor H.
Woolley, its Secretary, this 17th day of May, 1995.
SEPRACOR INC.
By: /s/ Timothy J. Barberich
-------------------------
Timothy J. Barberich
Its: President
ATTEST:
BY: /s/ Victor Woolley
------------------
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<PAGE> 54
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
SEPRACOR INC.
Sepracor Inc., a corporation organized and existing under and by virtue
of the General Corporation Law of the State of Delaware (the "Corporation"),
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of said Corporation, in a Written
Action in Lieu of Meeting dated as of March 27, 1996, duly adopted a resolution
pursuant to Section 242 of the General Corporation Law of the State of Delaware
("Delaware Law") proposing and declaring advisable the following amendment to
the Restated Certificate of Incorporation of the Corporation:
RESOLVED: That the first paragraph of Article FOURTH of the
Restated Certificate of Incorporation, as amended, be
amended to read in its entirety as follows:
FOURTH: The total number of shares of all classes of
stock which the Corporation has authority to issue is
forty-one million shares (41,000,000) consisting of
forty million (40,000,000) shares of common stock, $.10
par value per share ("Common Stock"), and one million
(1,000,000) shares of Preferred Stock, $1.00 par value
per share ("Preferred Stock").
SECOND: That the foregoing Amendment to the Corporation's
Restated Certificate of Incorporation, as amended, was adopted by the holders of
a majority of the outstanding shares of Common
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<PAGE> 55
Stock at the Corporation's Annual Meeting of Stockholders held on May 15, 1996
pursuant to notice duly given.
IN WITNESS WHEREOF, Sepracor Inc. has caused this Certificate to be
signed by Robert F. Scumaci, its Senior Vice President this 16th day of May,
1996.
SEPRACOR INC.
By: /s/ Robert F. Scumaci
-------------------------------
Robert F. Scumaci
Its: Senior Vice President
END
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<PAGE> 1
EXHIBIT 5
June 5, 1996
Sepracor Inc.
111 Locke Drive
Marlborough, Massachusetts 01752
Re: 1991 Director Stock Option Plan
Gentlemen:
We have assisted in the preparation of a Registration Statement on Form
S-8 (the "Registration Statement") to be filed on June 5, 1996 with the
Securities and Exchange Commission relating to 75,000 shares of the Common
Stock, $.10 par value per share ("Shares"), of Sepracor Inc., a Delaware
corporation (the "Company"), issuable under the Company's 1991 Director Stock
Option Plan (the "Plan").
We have examined the Restated Certificate of Incorporation, as amended,
and the Amended and Restated By-laws of the Company and originals, or copies
certified to our satisfaction, of all pertinent records of the meetings of the
directors and stockholders of the Company, the Registration Statement and such
other documents relating to the Company as we have deemed material for the
purposes of this opinion.
In our examination of the foregoing documents, we have assumed the
genuineness of all signatures and the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents
submitted to us as copies and the authenticity of the originals of such latter
documents.
Based upon and subject to the foregoing, we are of the opinion that the
Company has duly authorized for issuance the Shares, and the Shares, when
issued and paid for in accordance with the terms of the Plan and at a price per
share in excess of the par value per share for such Shares, will be legally
issued, fully-paid and nonassessable.
WASHINGTON, DC BOSTON, MA MANCHESTER, NH
- --------------------------------------------------------------------------------
HALE AND DORR IS A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
<PAGE> 2
Sepracor Inc.
June 5, 1996
Page 2
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission in connection with the Registration Statement.
This opinion is based upon currently existing statutes, rules,
regulations and judicial decisions, and we disclaim any obligation to advise
you of any change in any of these sources of law or subsequent legal or factual
developments which might affect any matters or opinions set forth herein.
Please note that we are opining only as to the matters expressly set
forth herein, and no opinion should be inferred as to any other matters.
Very truly yours,
/s/ HALE AND DORR
--------------------
HALE AND DORR
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement of
Sepracor Inc. on Form S-8, relating to the 1991 Director Stock Option Plan, of
our report dated February 27, 1996, except as to the information contained in
Notes K and S, for which the date is March 29, 1996, on our audits of the
consolidated financial statements and financial statement schedule of Sepracor
Inc.
/s/ COOPERS & LYBRAND L.L.P.
-----------------------------
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
May 31, 1996
