EXHIBIT 4.4
WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of December 22, 1997, between DURA
PHARMACEUTICALS, INC., a Delaware corporation ("Dura"), and CHASEMELLON
SHAREHOLDER SERVICES L.L.C., as warrant agent (the "Warrant Agent"), in favor
of each person who acquires from time to time warrants (the "Warrants") to
purchase shares of Dura's Common Stock, $.001 par value per share (the "Warrant
Shares"), issued in the offering of units (the "Units"), each Unit consisting of
one share of common stock, $.001 par value per share ("▇▇▇▇▇▇ ▇▇ Common Stock"),
of ▇▇▇▇▇▇ DEVELOPMENT CORPORATION II, INC., a Delaware corporation ("▇▇▇▇▇▇
Corp. II"), and one Warrant, made pursuant to a registration statement on
Forms S-l/S-3 (Nos. 333-37673 and 333-37673-01) (the "Registration
Statement") filed by Dura and ▇▇▇▇▇▇ Corp. II with the Securities and Exchange
Commission (the "Commission").
Section 1. APPOINTMENT OF WARRANT AGENT. Dura hereby appoints the Warrant
Agent to act as agent for Dura in accordance with the instructions set forth
herein, and the Warrant Agent hereby accepts such appointment, upon the terms
and conditions hereinafter set forth.
Section 2. CERTAIN DEFINITIONS. As used herein, the following terms shall
have the following meanings:
"ACCELERATION DATE" means the first date upon which an Acceleration Event
occurs; PROVIDED, HOWEVER, that, if approval of the stockholders of Dura is
required in connection with such Acceleration Event, Acceleration Date means the
date of such stockholder approval.
"ACCELERATION EVENT" means the occurrence of, or the execution of a
definitive agreement by Dura with respect to, any of the following events: (i)
any capital reorganization of Dura or reclassification of the Common Stock
(other than a subdivision, combination or reclassification of the outstanding
Common Stock for which adjustment is provided in paragraphs (i), (ii), (iv) and
(v) of Section 13(a) hereof and other than a change in the par value of the
Common Stock or an increase in the authorized capital stock of Dura not
involving the issuance of any shares thereof), (ii) any consolidation of Dura
with, or merger of Dura with or into, any other person (including any
individual, partnership, joint venture, corporation, trust or group thereof)
other than (a) a consolidation or merger pursuant to which the stockholders of
Dura immediately prior to such consolidation or merger own more than 50% of the
outstanding securities having power to vote in the election of directors after
such consolidation or merger or (b) a consolidation or merger by Dura with a
subsidiary of Dura in which Dura is the continuing corporation for which
adjustment is provided in Section 13 hereof, (iii) any sale, lease, transfer or
conveyance of all or substantially all of the assets of Dura (other than a sale,
lease, transfer or conveyance of such assets to an Affiliate (within the meaning
of the Securities Act)) or (iv) the announcement or commencement by any "person
" or " group" (within the meaning of Section 13 (d) and Section 14(d) of the
Exchange Act) other than with respect to a consolidation or merger pursuant to
clause (ii) above, of a BONAFIDE tender offer or exchange offer in accordance
with the rules and
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regulations of the Exchange Act to purchase, or the acquisition of securities of
Dura, such that after such acquisition or proposed purchase, the acquiror
"beneficially owns" or would "beneficially own" (as defined in Rule 13d-3 under
the Exchange Act) securities of Dura representing 30% percent or more of the
combined voting power of Dura's then outstanding securities having power to vote
in the election of directors.
"CLOSING PRICE" means the closing price per share of Common Stock on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading or, if not listed or traded on any such exchange, on the
Nasdaq National Market or if not listed or traded on any such exchange or the
Nasdaq National Market, the average of the last bid and asked prices per share
on the Nasdaq over-the-counter system or, if such quotations are not available,
the fair market value as reasonably determined by the Board of Directors of Dura
or any committee of such Board.
"COMMON STOCK" means (i) the class of stock designated as the Common Stock,
$.001 par value per share, of Dura on the date hereof or (ii) any other class of
stock resulting from successive changes or reclassifications of such shares
consisting solely of changes in par value, or from par value to no par value, or
from no par value to par value. Unless the context requires otherwise, all
references to Common Stock and Warrant Shares in this Agreement and in the
Warrant Certificates shall, in the event of an adjustment pursuant to Section 13
hereof, be deemed to refer also to any other securities or property then
issuable upon exercise of the Warrants as a result of such adjustment.
"ELIGIBLE INSTITUTION" shall have the meaning set forth in Section 8(c)
hereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXERCISE PRICE" shall have the meaning set forth in Section 5(b) hereof.
"EXERCISE PERIOD" means the period during which the Warrants may be
exercised as set forth in Section 5(a) hereof.
"EXPIRATION DATE" shall have the meaning set forth in Section 5(a) hereof.
"HOLDERS" shall have the meaning set forth in Section 4(b) hereof.
"NASD" means the National Association of Securities Dealers, Inc.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SEPARATION DATE" shall have the meaning set forth in Section 5(a) hereof.
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"STOCK PURCHASE OPTION" means the option by Dura to purchase all (but not
less than all) of the shares of ▇▇▇▇▇▇ Corp. II Common Stock as set forth in
Article V of the ▇▇▇▇▇▇ Corp. II Charter.
"WARRANT CERTIFICATE" shall have the meaning set forth in Section 3(a)
hereof.
"WARRANT REGISTER" means the books and records kept by the Warrant Agent
for the registration, and the registration of transfer, of the Warrant
Certificates in which shall be registered the names and addresses of Holders of
Warrants evidenced by Warrant Certificates in registered form and the
certificate numbers and denominations of such Warrant Certificates.
Section 3. FORM OF WARRANT CERTIFICATE: PURCHASE PRICE: SEPARATION FROM
▇▇▇▇▇▇ CORP. II COMMON STOCK.
(a) The certificates evidencing the Warrants (the "Warrant Certificates"),
and the forms of election to purchase Warrant Shares and of assignment to be
printed on the reverse thereof, shall be substantially in the form set forth in
Exhibit A hereto and may have such letters, numbers or other marks of
identification or designation and such legends, summaries or endorsements
printed, lithographed or engraved thereon as Dura reasonably deems appropriate
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law, any rule or regulation related thereto, or with
any rule or regulation of the NASD, the Nasdaq National Market or any securities
exchange on which the Warrants may from time to time be listed.
(b) Each Warrant shall entitle the Holder thereof to purchase one-fourth
of a Warrant Share upon the exercise thereof at the applicable Exercise Price,
subject to adjustment as provided in Section 13 hereof, during the Exercise
Period; PROVIDED, HOWEVER, that the Warrants are exercisable only for whole
shares; cash will be paid in lieu of fractional shares in accordance with
Section 5(e) hereof. Each Warrant Certificate shall be executed on behalf of
Dura by the manual or facsimile signature of the present or any future President
or any officer of Dura, under its corporate seal, affixed or in facsimile,
attested by the manual or facsimile signature of the present or any future
Secretary or Assistant Secretary of Dura. Warrants shall be dated as of the
date of their initial issue.
(c) As set forth in Section 8 hereof, until the Separation Date, a Warrant
may not be divided or combined with other Warrants or exchanged, assigned or
transferred apart from the share of the ▇▇▇▇▇▇ Corp. II Common Stock with which
it was initially sold as a Unit.
Section 4. REGISTRATION AND COUNTERSIGNATURE.
(a) The Warrant Agent shall maintain the Warrant Register. The Warrant
Certificates shall be countersigned by the Warrant Agent and shall not be valid
for any purpose unless so
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countersigned. The Warrant Certificates shall be so countersigned, however, by
the Warrant Agent and shall be delivered by the Warrant Agent, notwithstanding
whether the persons whose manual or facsimile signatures appear thereon as
proper officers of Dura shall have ceased to be such officers at the time of
such countersignature or delivery.
(b) Prior to due presentment for registration or transfer of the Warrant
Certificates, Dura and the Warrant Agent may deem and treat the registered
holder (a "Holder") thereof as the absolute owner of the Warrant Certificates
(notwithstanding any notation of ownership or other writing made thereon by
anyone other than Dura or the Warrant Agent), for the purpose of any exercise
thereof and for all other purposes, and neither Dura nor the Warrant Agent shall
be affected by any notice to the contrary.
Section 5. DURATION AND EXERCISE OF WARRANTS.
(a) Warrants may be exercised at any time or from time to time on or after
the earliest of (i) January 1, 2000, (ii) the exercise by Dura of the Stock
Purchase Option, (iii) the termination of the Stock Purchase Option with respect
to Dura and (iv) an Acceleration Date (such earliest date being referred to
herein as the "Separation Date") and will expire at 5:00 p.m., New York City
time, on December 31, 2002 (the "Expiration Date"). Upon the Expiration Date,
all rights evidenced by the Warrants shall cease and the Warrants shall become
void.
(b) Subject to the provisions of this Agreement, the Holder of each
Warrant shall have the right to purchase from Dura (and Dura shall issue and
sell to such Holder) the number of fully paid and nonassessable Warrant Shares
set forth on such Holder's Warrant Certificate (or such number of Warrant Shares
as may result from adjustments made from time to time as provided in this
Agreement) at the price of $_______ per Warrant Share in lawful money of the
United States of America (such exercise price per Warrant Share, as adjusted
from time to time as provided herein, being referred to herein as the "Exercise
Price"), upon (i) surrender of the Warrant Certificates to Dura at the office of
the Warrant Agent designated by the Warrant Agent for such purpose with the
exercise form on the reverse thereof duly completed and signed by the Holder or
Holders thereof or by a duly appointed legal representative thereof or by a duly
authorized attorney, such signature to be guaranteed by an Eligible Institution
(as defined in Section 8(c) hereof) if such guarantee is required by the terms
of the Warrant Certificate, and (ii) payment, in lawful money of the United
States of America, of the Exercise Price for the Warrant Share or Warrant Shares
in respect of which such Warrant is then exercised. The Exercise Price payable
upon exercise of any Warrant may be paid only by certified or, at the option of
the Holder, official bank check payable to the order of Dura. Upon surrender of
the Warrant Certificate, and payment of the Exercise Price, Dura shall issue and
cause to be delivered with all reasonable dispatch to or upon the written order
of the Holder of such Warrant and in such name or names as such Holder may
designate, a certificate or certificates for the number of Warrant Shares so
purchased upon the exercise of such Warrants, together with cash or check,
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at Dura's option, in respect of any fraction of a Warrant Share issuable upon
such surrender pursuant to Section 5(e) hereof. The Warrant Agent shall deliver
on a weekly basis all funds received upon exercise of the Warrants to Dura, ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Senior Vice President
and Chief Financial Officer.
(c) Each person in whose name any certificate for Warrant Shares is issued
upon the exercise of Warrants shall for all purposes be deemed to have become
the holder of record of the Warrant Shares represented thereby, and such
certificate shall be dated the date upon which the Warrant Certificate
evidencing such Warrants was duly surrendered and payment of the Exercise Price
(and any applicable transfer taxes pursuant to Section 10 hereof) was made;
PROVIDED, HOWEVER, that if the date of such surrender and payment is a date upon
which the Common Stock transfer books of Dura are closed, such person shall be
deemed to have become the record holder of such Warrant Shares on, and such
certificate shall be dated, the next succeeding business day on which the Common
Stock transfer books of Dura are open.
(d) In the event that, during the Exercise Period, fewer than all of the
Warrants represented by a Warrant Certificate are exercised, a new Warrant
Certificate, duly executed by Dura, will be issued for the remaining number of
Warrants exercisable pursuant to the Warrant Certificate so surrendered, and the
Warrant Agent shall countersign and deliver such new Warrant Certificate to the
Holder of such unexercised Warrants pursuant to the provisions of this Section 5
and of Section 4 hereof.
(e) No fractional shares of Common Stock or scrip shall be issued to any
Holder in connection with the exercise of a Warrant. Instead of any fractional
shares of Common Stock that would otherwise be issuable to such Holder, Dura
shall pay to such Holder a cash adjustment in respect of such fractional
interest in an amount equal to that fractional interest of the then current
Closing Price on the date of exercise per share of Common Stock.
(f) The number of Warrant Shares to be received upon the exercise of a
Warrant and the price to be paid for a Warrant Share are subject to adjustment
from time to time as hereinafter set forth.
(g) Warrants not exercised on or prior to the Expiration Date shall become
void and all rights in respect thereof shall cease as of such time.
Section 6. RESERVATION OF WARRANT SHARES; STOCK CERTIFICATES. Dura shall
at all times reserve, for issuance and delivery upon exercise of the Warrants,
such number of Warrant Shares or other shares of capital stock of Dura as may be
issuable from time to time upon exercise of the Warrants. All such shares shall
be duly authorized and, when issued upon such exercise and receipt by Dura of
payment in full of the Exercise Price, shall be validly issued, fully paid and
nonassessable, free and clear of all liens, security interests, charges and
other encumbrances or
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restrictions on sale and free and clear of all preemptive rights. The Warrant
Agent is hereby irrevocably authorized to requisition, from time to time from
the transfer agent for the Common Stock, stock certificates issuable upon
exercise of outstanding Warrants. Dura will supply such transfer agent with
duly executed stock certificates for such purpose. All Warrant Certificates
surrendered upon exercise shall be cancelled by the Warrant Agent and shall
thereafter be delivered to Dura or otherwise disposed of in a manner
satisfactory to Dura. Unless all Warrants shall have been exercised prior to
5:00 P.M., New York City time, on the Expiration Date, the Warrant Agent shall
certify to Dura, as of the close of business on the Expiration Date, the total
aggregate number of Warrants then outstanding, and thereafter no shares of
Common Stock shall be subject to reservation in respect of such Warrants. Dura
shall keep a copy of this Agreement on file with its transfer agent and with
every transfer agent for any shares of Common Stock.
Section 7. TRANSFER AND REGISTRATION OF THE WARRANTS AND WARRANT SHARES.
(a) The Warrants and the Warrant Shares, and any interest in either, may
be sold, assigned, pledged, encumbered or in any other manner transferred or
disposed of, in whole or in part, only in accordance with Section 8 hereof and
in compliance with applicable United States federal and state securities laws
and the terms and conditions hereof.
(b) The Warrants and the Warrant Shares have been registered under the
Securities Act pursuant to the Registration Statement. Dura covenants and
agrees:
(i) it will prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective
through the termination of the Exercise Period or until such earlier time as no
Warrants remain outstanding;
(ii) as expeditiously as possible, to register or qualify the
Warrants and the Warrant Shares under the securities or "Blue Sky" laws of each
jurisdiction in which such registration or qualification is necessary; and
(iii) to pay all expenses incurred by Dura in complying with this
Section 7(b), including, without limitation (A) all registration and filing
fees, (B) all printing expenses, (C) all fees and disbursements of counsel and
independent public accountants for Dura, (D) all NASD and "Blue Sky" fees and
expenses (including fees and expenses of counsel in connection with any "Blue
Sky" surveys) and (E) the entire expense of any special audits incident to or
required in connection with any such registration.
Section 8. EXCHANGE, TRANSFER OR ASSIGNMENT OF WARRANTS.
(a) Through the Separation Date, a Warrant may not be divided or combined
with other
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Warrants or exchanged, assigned or transferred apart from the share of ▇▇▇▇▇▇
Corp. II Common Stock with which it was initially sold as a Unit. Until the
occurrence of the Separation Date, the Warrant Agent will not record an
exchange, assignment or transfer of a Warrant Certificate in the Warrant
Register without certification by ▇▇▇▇▇▇ Corp. II that the holder has
transferred its ▇▇▇▇▇▇ Corp. II Common Stock to the assignee named on the
Warrant Assignment Form printed on the reverse of the Warrant Certificate.
(b) After the Separation Date, Warrants may be exchanged, at the option of
the Holder thereof, upon presentation and surrender to the Warrant Agent of the
Warrant Certificate evidencing such Warrants, for other Warrant Certificates of
different denominations, entitling the Holder or Holders thereof to purchase in
the aggregate the same number of Warrant Shares as did such surrendered Warrant
Certificate. Subject to the preceding sentence, a Warrant Certificate may be
divided or combined with other Warrant Certificates that carry the same rights
upon presentation thereof at the office of the Warrant Agent, together with
written notice signed by the Holder or Holders thereof specifying the names and
denominations in which new Warrant Certificates are to be issued.
(c) After the Separation Date, Warrants may be assigned or transferred, at
the option of the Holder thereof, upon surrender of the Warrant Certificates
evidencing such Warrants to the Warrant Agent, accompanied (if so required by
Dura or the Warrant Agent) by a written instrument or instruments of transfer in
form satisfactory to Dura and the Warrant Agent, duly executed by such Holder or
by a duly authorized representative or attorney, such signature to be guaranteed
by a commercial bank or trust company having an office in the United States, by
a broker or a dealer that is a member of the NASD or by a member of a national
securities exchange (any such entity, an "Eligible Institution"). Upon any such
registration of transfer, a new Warrant Certificate shall be issued to the
transferee and the surrendered Warrant Certificate shall be cancelled by the
Warrant Agent. Warrant Certificates so cancelled shall be delivered by the
Warrant Agent to Dura from time to time or otherwise disposed of by the Warrant
Agent in a manner satisfactory to Dura.
(d) Any transfer, exchange or assignment of Warrants (including any new
Warrants issued pursuant to Section 11 hereof) shall be without charge (other
than the cost of any transfer tax) to the Holder and any new Warrant or Warrants
issued pursuant to this Section 8 shall be dated the date hereof.
Section 9. REMOVAL OF LEGEND. Through the Separation Date, each Warrant
Certificate shall bear the following legend:
UNTIL DECEMBER 31, 1999 OR SUCH EARLIER DATE ON WHICH THIS LEGEND IS
REMOVED PURSUANT TO SECTION 9 OF THE WARRANT AGREEMENT, DATED AS
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OF ABOUT _______________, 1997, BETWEEN DURA PHARMACEUTICALS, INC. AND
CHASEMELLON SHAREHOLDER SERVICES, AS WARRANT AGENT, THE WARRANTS
REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED SEPARATELY,
SPLIT UP, COMBINED OR EXCHANGED, BUT MAY ONLY BE TRANSFERRED, SPLIT
UP, COMBINED OR EXCHANGED TOGETHER WITH THE SHARES OF CALLABLE COMMON
STOCK OF ▇▇▇▇▇▇ DEVELOPMENT CORPORATION II, INC. WITH WHICH SUCH
WARRANTS WERE SOLD AS A UNIT.
After the Separation Date, any Holder of Warrants may surrender the Warrant
Certificate evidencing such Warrants to the Warrant Agent, whereupon the Warrant
Agent shall execute and deliver to such Holder a new Warrant Certificate,
without the legend set forth in this Section 9, entitling such Holder to
purchase the same number of Warrant Shares as provided for by such surrendered
Warrant Certificate. Dura shall supply the Warrant Agent with Warrant
Certificates that do not bear such legend for use after the Separation Date.
Section 10. PAYMENT OF TAXES. Dura shall pay all documentary stamp taxes
attributable to the original issuance of the Warrants and of Warrant Shares;
PROVIDED, HOWEVER, that Dura shall not be required to (a) pay any tax which may
be payable in respect of any transfer involving the transfer and delivery of
Warrant Certificates or the issuance or delivery of certificates for Warrant
Shares in a name other than that of the Holder of the Warrant Certificate
surrendered upon the exercise of a Warrant or (b) issue or deliver any
certificate for Warrant Shares upon the exercise of any Warrants until any such
tax required to be paid under clause (a) shall have been paid, all such tax
being payable by the Holder of such Warrant at the time of surrender.
Section 11. MUTILATED OR MISSING WARRANT CERTIFICATES. In the event that
any Warrant Certificate shall be mutilated, lost, stolen or destroyed, Dura may
in its discretion issue, and the Warrant Agent may countersign and deliver, upon
the request of the Holder of the Warrants evidenced by such Warrant Certificate,
in exchange for and upon cancellation of any such mutilated Warrant Certificate,
or in substitution for any such lost, stolen or destroyed Warrant Certificate, a
new Warrant Certificate of like tenor and evidencing the same number of Warrant
Shares as were evidenced by such mutilated, lost, stolen or destroyed Warrant
Certificate, but only upon receipt of evidence satisfactory to the Warrant Agent
of such loss, theft or destruction of such Warrant Certificate and an indemnity,
if requested, reasonably satisfactory to it. An applicant for such substitute
Warrant Certificate shall also comply with such other reasonable regulations and
pay such other reasonable charges as Dura or the Warrant Agent may prescribe.
Any such new Warrant Certificate shall constitute an original contractual
obligation of Dura, whether or not the allegedly mutilated, lost, stolen or
destroyed Warrant Certificate shall be enforceable by any person at any time
thereafter.
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Section 12. NO STOCK RIGHTS: LIMITATION OF LIABILITY. No Holder of any
Warrant shall, by virtue thereof, be entitled to the rights of a stockholder of
Dura, unless and until exercise of such Warrant has occurred. No provisions of
any Warrant or of this Agreement, in the absence of affirmative action by the
Holder of any such Warrant to exercise such Warrant, and no mere enumeration
herein of the rights or privileges of such Holder, shall give rise to any
liability of such Holder for the Exercise Price or as a stockholder of Dura,
whether such liability is asserted by Dura or by its creditors.
Section 13. ANTIDILUTION PROVISIONS.
(a) The Exercise Price and the number of Warrant Shares that may be
purchased upon the exercise of a Warrant shall be subject to change or
adjustment from time to time as follows:
(i) STOCK DIVIDENDS AND STOCK SPLITS. If at any time during the
Exercise Period (A) Dura shall fix a record date for the issuance of any
dividend payable in shares of Common Stock or (B) the number of shares of Common
Stock shall have been increased by a subdivision or split-up of shares of Common
Stock, then, on the record date fixed for the determination of holders of Common
Stock entitled to receive such dividend or immediately after the effective date
of such subdivision or split-up, as the case may be, the number of shares to be
delivered upon exercise of any Warrant will be appropriately increased so that
each Holder thereafter will be entitled to receive the number of shares of
Common Stock that such Holder would have owned immediately following such action
had such Warrant been exercised immediately prior thereto, and the Exercise
Price will be appropriately adjusted. The time of occurrence of an event giving
rise to an adjustment made pursuant to this Section 13(a)(i) shall, in the case
of a stock dividend, be deemed to be the record date thereof and shall, in the
case of a subdivision or split-up, be deemed to be the effective date thereof.
(ii) COMBINATION OF STOCK. If the number of shares of Common Stock
outstanding at any time during the Exercise Period is decreased by a combination
of the outstanding shares of Common Stock, then, immediately after the effective
date of such combination, the number of shares of Common Stock to be delivered
upon exercise of any Warrant shall be appropriately decreased so that the Holder
of such Warrant thereafter will be entitled to receive the number of shares of
Common Stock that such Holder would have owned immediately following such action
had such Warrant been exercised immediately prior thereto, and the Exercise
Price shall be appropriately adjusted.
(iii) REORGANIZATION. If, at any time during the Exercise Period,
any capital reorganization of Dura, or any reclassification of the Common Stock,
or any consolidation of Dura with, or merger of Dura with or into, any other
person or any sale, lease or other transfer of all or substantially all of the
assets of Dura to any other person (including any individual, partnership, joint
venture, corporation, trust or group thereof) shall be effected in such a way
that
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upon consummation of such transaction the holders of the Common Stock shall be
entitled to receive stock, securities or assets with respect to or in exchange
for Common Stock, then, upon exercise of any Warrant in accordance with the
terms of this Agreement and the Warrant Certificate, the Holder of such Warrant
shall have the right to receive the kind and amount of stock, securities or
assets receivable upon such reorganization, reclassification, consolidation,
merger or sale, lease or other transfer by a holder of the number of shares of
Common Stock that such Holder would have been entitled to receive upon exercise
of such Warrant pursuant to Section 3 hereof had such Warrant been exercised
immediately prior to such reorganization, reclassification, consolidation,
merger or sale, lease or other transfer, subject to additional adjustments that
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section 13(a).
(iv) SPECIAL DIVIDENDS. If, at any time during the Exercise Period
(other than in a dissolution or liquidation), Dura shall distribute to holders
of Common Stock evidences of indebtedness of Dura, securities or other assets
(other than cash dividends payable out of retained earnings) by way of a
dividend on outstanding shares of Common Stock, then the Exercise Price shall be
adjusted so that immediately after the date fixed by Dura as the record date in
respect of such distribution, such Exercise Price shall equal the price
determined by multiplying the Exercise Price in effect immediately prior to the
close of business on the record date for the determination of the stockholders
entitled to receive such distribution by a fraction, (A) the numerator of which
shall be the Closing Price on such record date less the then fair market value
as determined reasonably and in good faith by the Board of Directors of Dura of
the portion of the securities or other assets distributed applicable to one
share of Common Stock and (B) the denominator of which shall be such Closing
Price. Such adjustment shall become effective on such record date. In such
case, no adjustment shall be made to the number of Warrant Shares to be received
upon the exercise of a Warrant.
(v) RIGHTS OFFERING. If, at any time during the Exercise Period,
Dura shall issue or sell or fix a record date for the issuance of rights,
options, warrants or convertible or exchangeable securities to all holders of
Common Stock entitling the holders thereof to subscribe for or purchase Common
Stock (or securities convertible into or exchangeable for Common Stock), in any
such case, at a price per share (or having a conversion price per share) that,
together with the value (if for consideration other than cash, as reasonably
determined in good faith by the Board of Directors of Dura) of any consideration
paid for any such rights, options, warrants or convertible or exchangeable
securities, is greater than the Exercise Price and less than the Closing Price
on the date of such issuance or sale or on such record date, as the case may be,
then, immediately after the date of such issuance or sale or on such record
date, the number of shares to be delivered upon exercise of the Warrants shall
be appropriately increased so that the Holder, thereafter during the Exercise
Period, shall be entitled to receive the number of shares of Common Stock
determined by multiplying the number of shares such Holder would have been
entitled to receive immediately before the date of such issuance or sale or such
record date by
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a fraction, (A) the numerator of which shall be the number of shares of Common
Stock outstanding on such date plus the number of additional shares of Common
Stock offered for subscription or purchase (or into which the convertible or
exchangeable securities so offered are initially convertible or exchangeable)
and (B) the denominator of which shall be the number of shares of Common Stock
outstanding on such date plus the number of shares of Common Stock that the
aggregate offering price of the total number of shares so offered for
subscription or purchase (or the aggregate initial conversion price of the
convertible securities so offered) would purchase at such Closing Price, and the
Exercise Price shall be appropriately adjusted. The time of occurrence of an
event giving rise to an adjustment pursuant to this Section 13(v) shall, in the
case of a dividend, be the record date and shall, in the case of an issuance or
sale, be the date of such issuance or sale.
(vi) NO ADJUSTMENTS TO EXERCISE PRICE. No adjustment of the Exercise
Price in accordance with the provisions of paragraph (i), (ii), (iii), (iv) or
(v) above shall be made in an amount of less than $.01; PROVIDED, HOWEVER, that
the amount by which any adjustment is not made by reason of the provisions of
this Section shall be carried forward and taken into account at the time of any
subsequent adjustment in the Exercise Price.
(vii) READJUSTMENTS, ETC. If an adjustment is made under paragraph
(i), (ii), (iii), (iv) or (v) above, and the event to which the adjustment
relates does not occur, then any adjustments in the Exercise Price or Warrant
Shares that were made in accordance with such paragraphs shall be adjusted back
to the Exercise Price and the number of Warrant Shares that were in effect
immediately prior to the record date for such event.
(b) NO IMPAIRMENT, CERTAIN EVENTS.
(i) Dura shall not, by amendment of its Certificate of Incorporation
or through any reorganization, reclassification, consolidation, merger, sale,
lease or transfer of assets, issuance or sale of securities or any other action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed under this Section 13 by Dura, but will at all times in
good faith assist in the carrying out of all the provisions of this Section 13
and in the taking of all such action as may be necessary or appropriate in order
to protect the rights of the Holders against impairment.
(ii) If any event occurs as to which the provisions of paragraph (a)
of this Section 13 are not strictly applicable but with respect to which, in the
reasonable, good faith opinion of Dura, an adjustment of the Exercise Price, and
the number of Warrant Shares issuable upon the exercise of a Warrant, would
fairly protect the exercise rights of the Holders in accordance with the basic
intent and principles of such provisions or as to which an adjustment pursuant
to such provisions, if strictly applied, would not fairly protect the purchase
rights of the Holders in accordance with the basic intent and principles of such
provisions, then Dura shall make any
12
computation required under this Section 13(b)(ii) with respect to any such
adjustment on a basis consistent with the basic intent and principles
established by the provisions of this Section 13, necessary to preserve, without
dilution, the exercise rights of the Holders. Dura shall appoint a firm of
independent certified public accountants (which may be the regular auditors of
Dura) of recognized national standing, which firm shall review the computation
of Dura prepared pursuant to this Section 13(b)(ii) and prepare a report signed
by such firm, which shall be provided to Dura and which shall acknowledge that
the adjustment calculation prepared by Dura is arithmetically correct. Such
report shall be conclusive evidence of the correctness of the computation made
under this Section 13(b)(ii). Upon receipt of such report, Dura shall forthwith
cause to be made, or shall act to prevent, the adjustments described in such
calculation.
Section 14. OFFICER'S CERTIFICATE. Whenever the number of Warrant Shares
that may be purchased upon exercise of the Warrant is adjusted as required by
the provisions of this Agreement, Dura shall file forthwith with the Warrant
Agent and with its Secretary or Assistant Secretary at its principal office an
officer's certificate indicating the adjusted number of Warrant Shares that may
be purchased upon exercise of a Warrant and the adjusted Exercise Price,
determined as herein provided, and setting forth in reasonable detail the facts
requiring such adjustment and the manner of computing such adjustment. Each
such officer's certificate shall be made available at all reasonable times for
inspection by the Holders. Dura shall, forthwith after each such adjustment,
cause a copy of such officer's certificate to be mailed to the Holders. The
Warrant Agent may rely on such certificate without further inquiry and shall not
be deemed to have knowledge of any adjustment unless and until it shall have
received such certificate.
Section 15. NOTICE OF CERTAIN EVENTS. In the event that, at any time
during the period commencing on the Separation Date and ending on the last day
of the Exercise Period:
(a) Dura shall pay any dividend on Common Stock that is payable in stock,
or make any distribution (other than regular cash dividends) to the holders of
Common Stock;
(b) Dura authorizes the issuance to all holders of Common Stock of rights
or warrants to subscribe for or purchase shares of Common Stock or any other
subscription rights or warrants;
(c) Dura authorizes the distribution to all holders of Common Stock of any
of Dura's assets, including evidences of its indebtedness or assets (other than
cash dividends payable out of retained earnings);
(d) there shall be any capital reorganization or reclassification of the
capital stock of Dura or consolidation or merger of Dura with another person
(other than a consolidation or merger of Dura with a subsidiary of Dura in which
Dura is the surviving or continuing corporation and there is no change with
respect to the Common Stock), or sale, conveyance or transfer of all or
substantially all of Dura's property and assets (other than a sale, conveyance
or transfer of such
13
assets to an Affiliate (within the meaning of the Securities Act));
(e) there shall be a voluntary or involuntary dissolution, liquidation,
bankruptcy, assignment for the benefit of creditors or winding up of Dura; or
(f) Dura shall propose to take any other action, or any other event
occurs, that would require an adjustment pursuant to Section 13 hereof of the
Exercise Price or the number of Warrant Shares that may be purchased upon the
exercise of a Warrant;
then Dura will cause to be mailed to the Holder by first-class mail addressed to
such Holder at the address appearing in the Warrant Register, at least twenty
(20) days (or ten (10) days in any case specified in clauses (a), (b) or (c)
above) before the applicable record or effective date hereinafter specified, a
notice stating (A) the date as of which the holders of Common Stock of record
entitled to receive any such dividends, rights, warrants or distributions are to
be determined or (B) the date on which any such consolidation, merger,
conveyance, transfer, 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 will be entitled to exchange their shares of Common Stock for
securities or other property, if any, deliverable upon such reorganization,
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding-up.
Section 16. ACCELERATION EVENT. In case of any Acceleration Event, Dura
shall, as a condition precedent to the consummation of the transaction
constituting, or announced as, such Acceleration Event, cause effective
provisions to be made so that the Holder of a Warrant shall have the right
immediately thereafter, by exercising such Warrant, to purchase during the
Exercise Period the aggregate amount and kind of shares of stock and other
securities and property that were receivable upon such Acceleration Event by a
holder of the number of shares of Common Stock that would have been received
immediately prior to such Acceleration Event upon exercise of such Warrant. Any
such provisions shall require adjustments in respect of such shares of stock and
other securities and assets and other property that shall be as nearly
equivalent as may be practicable to the adjustments provided for in such
Warrant. The foregoing provisions of this Section 16 shall similarly apply to
successive Acceleration Events. Dura shall, at least twenty (20) days prior to
the Acceleration Date relating to any Acceleration Event (or if such
Acceleration Event was beyond the control of Dura, and Dura did not have
knowledge thereof twenty (20) days prior to such Acceleration Date, as soon as
practicable thereafter), cause to be mailed to the Holders a notice describing
in reasonable detail such Acceleration Event and informing the Holders of the
date the Exercise Period will commence and that the Holders may exercise
Warrants at any time during the Exercise Period.
Section 17. LISTING ON SECURITIES EXCHANGES. Dura will list on each
national securities exchange or, if not so listed, will list for quotation on
the Nasdaq National Market, or such other
14
over-the-counter quotation system on which any Common Stock may at any time be
listed, all shares of the Common Stock from time to time issuable upon the
exercise of the Warrants, and will maintain such listing so long as any other
shares of Common Stock are so listed; and Dura shall so list on each national
securities exchange or the Nasdaq National Market, or such other over-the-
counter quotation system, and shall maintain such listing of, any other shares
of capital stock of Dura issuable upon the exercise of the Warrants if and so
long as any shares of capital stock of the same class are listed on such
national securities exchange or are traded on the Nasdaq National Market or such
over-the-counter quotation system. Any such listing or quotation will be at
Dura's expense.
Section 18. AVAILABILITY OF INFORMATION. Dura will comply with all
applicable periodic public information reporting requirements of the Commission
to which it may from time to time be subject.
Section 19. WARRANT AGENT.
(a) MERGER, CONSOLIDATION OR CHANGE OF NAME OF WARRANT AGENT.
(i) Any corporation into which the Warrant Agent may be merged or
with which it may be consolidated, or any corporation resulting from any merger
or consolidation to which the Warrant Agent shall be a party, or any corporation
succeeding to the corporate trust business of the Warrant Agent, shall be the
successor to the Warrant Agent hereunder without the execution or filing of any
paper or any further act on the part of any of the parties hereto; PROVIDED,
HOWEVER, that such successor corporation must be otherwise eligible for
appointment as a Warrant Agent hereunder. In the event that at the time such
successor to the Warrant Agent shall succeed to the agency created by this
Agreement any of the Warrant Certificates shall have been countersigned but not
delivered, any such successor to the Warrant Agent may adopt the
countersignature of such predecessor Warrant Agent and deliver such Warrant
Certificates so countersigned; and in the event that at the time of such
succession any of the Warrant Certificates shall not have been countersigned,
any such successor to the Warrant Agent may countersign such Warrant
Certificates either in the name of such predecessor Warrant Agent or in the name
of such successor Warrant Agent; and in any event, all such Warrant Certificates
shall have the full force and effect provided in such Warrant Certificates and
in this Agreement.
(ii) In the case that at any time the name of the Warrant Agent shall
be changed and at such time one or more of the Warrant Certificates shall have
been countersigned but not delivered, the Warrant Agent may adopt the
countersignature under its prior name and deliver Warrant Certificates so
countersigned; in the event that at that time one or more of the Warrant
Certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior name or in its changed
name; and in all such cases such Warrant Certificates shall have the full force
and effect provided in such Warrant Certificates and in this
15
Agreement.
(b) DUTIES OF WARRANT AGENT. The Warrant Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by which the Holders, by their acceptance of Warrants, and Dura, shall be bound:
(i) The Warrant Agent shall not be responsible for any failure of
Dura to comply with any of the covenants to be complied with by Dura that are
contained in this Agreement or in the Warrant Certificates.
(ii) The Warrant Agent may consult at any time with counsel
satisfactory thereto, and the Warrant Agent shall incur no liability or
responsibility to Dura or to any Holder in respect of any action taken, suffered
or omitted by the Warrant Agent hereunder in good faith and in accordance with
the opinion or the advice of such counsel, provided that the Warrant Agent shall
have exercised reasonable care in the selection and continued employment of such
counsel.
(iii) The Warrant Agent shall incur no liability or responsibility to
Dura or to any Holder for any action taken in reliance on any notice,
resolution, waiver, consent, order, certificate or other paper, document or
instrument believed by the Warrant Agent to be genuine and to have been signed,
sent or presented by the party or parties thereto.
(iv) Dura shall (A) pay to the Warrant Agent reasonable compensation
for all services rendered by the Warrant Agent in the execution of this
Agreement, (B) reimburse the Warrant Agent for all expenses, taxes (other than
taxes based on such Warrant Agent's net income), governmental charges, and other
charges of any kind and nature, incurred by the Warrant Agent in the performance
of this Agreement, (C) advance to the Warrant Agent, upon request, funds to pay
cash in lieu of fractional shares of Common Stock issuable upon exercise of
Warrants and (D) indemnify the Warrant Agent and save it harmless against any
and all losses, expenses or liabilities, including judgments, costs and counsel
fees, arising out of or in connection with its agency under this Agreement,
except as a result of its negligence or bad faith. In no case shall the
Warrant Agent be liable for special, indirect, incidental or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits), unless such loss or damages arise as a result of the
Warrant Agent's gross negligence or intentional misconduct.
(v) The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action likely to involve
the incurrence by the Warrant Agent of expenses unless Dura or one or more
Holders shall have furnished the Warrant Agent with reasonable security and
indemnity for any costs and expenses which may be incurred. All rights of
action under this Agreement or under any of the Warrants may be enforced by the
Warrant Agent without the possession of any of the Warrants or the production
thereof at any trial or other proceeding relative thereto, and any such action,
suit or proceeding instituted by the Warrant Agent shall be brought in its name
as Warrant Agent, and any recovery of judgment shall be for the ratable benefit
of the Holders, as their respective rights or interests may appear.
16
(vi) The Warrant Agent and any stockholder, director, officer or
employee of the Warrant Agent may buy, sell or deal in any of the Warrants or
other securities of Dura, or become pecuniarily interested in any transaction in
which Dura may be interested or contract with or lend money or otherwise act as
fully and freely as though it were not the Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for Dura or for any other legal entity.
(vii) The Warrant Agent shall act hereunder solely as agent, and its
duties shall be determined solely by the provisions hereof. The Warrant Agent
shall not be liable for any actions which it may take or refrain from taking, in
connection with this Agreement, except as result from its own gross negligence
or bad faith.
(viii) The Warrant Agent shall make copies of this Agreement available
for inspection at its principal offices at _________________________ during
normal business hours and shall provide copies to Holders upon their written
request.
(c) CHANGE OF WARRANT AGENT. The Warrant Agent may resign and be
discharged from its duties under this Agreement by providing both (i) written
notice to Dura and (ii) written notice, sent at the Company's expense by
first-class mail, postage prepaid, to each Holder at such Holder's address
appearing in the Warrant Register, which notice shall specify a date when such
resignation shall take effect and shall be sent at least two weeks prior to the
date so specified. If the Warrant Agent shall resign or otherwise become
incapable of acting, Dura shall appoint a successor thereto. If Dura shall
fail to make such appointment within a period of thirty (30) days after
receiving written notification of such resignation or incapacity by the Warrant
Agent or by any Holder (which Holder shall, with such notice, submit Warrant
Certificates held thereby for inspection by Dura), then any Holder may apply to
any court of competent jurisdiction for the appointment of a successor to the
Warrant Agent. Pending appointment of a successor to the Warrant Agent, either
by Dura or by a court, the duties of the Warrant Agent shall be carried out by
Dura. After such appointment, the successor Warrant Agent shall be vested with
such powers, rights, duties and responsibilities as such Warrant Agent would
have been vested had such Warrant Agent been named originally as Warrant Agent
hereunder, without further act or deed. The former Warrant Agent shall deliver
and transfer to the successor Warrant Agent any property at the time held by
such former Warrant Agent hereunder and shall execute and deliver any further
assurance, conveyance, act or deed necessary therefor. Failure to provide any
notice called for in this Section 19, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Warrant
Agent or the appointment of a successor Warrant Agent.
Section 20. IDENTITY OF TRANSFER AGENT. Forthwith upon the appointment
after the date hereof of any transfer agent for the Common Stock, or of any
subsequent transfer agent for shares of the Common Stock, Dura will file with
the Warrant Agent a statement setting forth the name
17
and address of such transfer agent.
Section 21. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of Dura, the Warrant Agent or any of the Holders
shall bind and inure to the benefit of their respective successors, assigns,
heirs and personal representatives.
Section 22. TERMINATION. This Agreement shall terminate at 5:00 p.m., New
York City time, on the Expiration Date or upon such earlier date on which all
Warrants have been exercised or redeemed, except that the Warrant Agent shall
account to Dura for all cash held by it at 5:00 p.m., New York City time, on
such Expiration Date or such other date.
Section 23. HEADINGS. The headings of sections of this Agreement have
been inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
Section 24. AMENDMENTS. This Agreement may be amended only by both (i)
the written consent of Dura and (ii) the affirmative vote or the written consent
of Holders holding not less than two-thirds in interest of the then outstanding
Warrants; PROVIDED, HOWEVER, that, except as expressly provided herein, this
Agreement may not be amended to change (a) the Exercise Price, (b) the Exercise
Period, (c) the number or type of securities to be issued upon the exercise of
the Warrants or (d) the provisions of this Section 24, without the consent of
each Holder.
Section 25. COUNTERPARTS. This Agreement may be executed in any number of
counterparts each of which when so executed shall be deemed to be an original,
but all of which taken together shall constitute one and the same agreement.
Section 26. NOTICES.
(a) Any notice required by the provisions of this Agreement to be provided
to Dura by the Warrant Agent or by any Holder shall be deemed given if deposited
in the United States mail, first class postage prepaid, addressed (until another
address is filed in writing by Dura with the Warrant Agent) as follows:
Dura Pharmaceuticals Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
(b) Any notice required by the provisions of this Agreement to be provided
to the Warrant Agent by Dura or by any Holder shall be deemed given if deposited
in the United States mail, first class postage prepaid, addressed (until another
address is filed in writing by the
18
Warrant Agent with Dura or notice of the address of a successor Warrant Agent is
provided pursuant to this Agreement) as follows:
ChaseMellon Shareholder Services
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:___________________________
(c) Any notice required by the provisions of this Agreement to be provided
to any Holder by Dura or by the Warrant Agent shall be deemed given if deposited
in the United States mail, first class postage prepaid, addressed to such Holder
at its address set forth in the Warrant Register. Any notice given in
conformity with this Section 26 shall be deemed effective three (3) days after
mailing.
Section 27. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any person or corporation, other than Dura, the Warrant
Agent and the Holders, any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of
Dura, the Warrant Agent and the Holders.
Section 28. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement to
be signed by its duly authorized officers.
DURA PHARMACEUTICALS, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
Title: Sr. VP
---------------------------------------
CHASEMELLON SHAREHOLDER SERVICES, as
Warrant Agent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------
Title: Asst. Vice President
---------------------------------------
EXHIBIT A
FORM OF WARRANT CERTIFICATE
UNTIL THIS LEGEND IS REMOVED PURSUANT TO SECTION 9 OF THE WARRANT AGREEMENT,
DATED ON OR ABOUT _______________, 1997, BETWEEN DURA PHARMACEUTICALS,INC. AND
CHASEMELLON SHAREHOLDER SERVICES, AS WARRANT AGENT, THE WARRANTS REPRESENTED BY
THIS CERTIFICATE MAY NOT BE TRANSFERRED SEPARATELY, SPLIT UP, COMBINED OR
EXCHANGED, BUT MAY ONLY BE TRANSFERRED, SPLIT UP, COMBINED OR EXCHANGED TOGETHER
WITH THE SHARES OF CALLABLE COMMON STOCK OF ▇▇▇▇▇▇ DEVELOPMENT CORPORATION II,
INC. WITH WHICH SUCH WARRANTS WERE SOLD AS A UNIT.
VOID AFTER 5:00 P.M., Warrant No.______________
NEW YORK CITY TIME, ON Warrants_________________
DECEMBER 31, 2002
CUSIP _____________
DURA PHARMACEUTICALS, INC.
Warrants to Purchase Shares of Common Stock
THIS CERTIFIES THAT, FOR VALUE RECEIVED,
_______________, or registered assigns, is the registered holder of the number
of Warrants (the "Warrants") set forth above. Each Warrant entitles the holder
thereof to purchase from Dura Pharmaceuticals, Inc., a Delaware corporation
("Dura"), subject to the terms and conditions hereinafter set forth and in the
Warrant Agreement hereinafter referred to, one fully paid and nonassessable
share of Common Stock, par value $.001 per share, of Dura (the "Common Stock").
The Warrants may be exercised at any time or from time to time on or after the
first to occur of (i) January 1, 2000, (ii) the exercise by Dura of the Stock
Purchase Option, (iii) the termination of the Stock Purchase Option with respect
to Dura and (iv) an Acceleration Date (as defined in the Warrant Agreement)
(such earliest date being referred to herein as the "Separation Date") and will
expire at 5:00 p.m., New York City time, on December 31, 2002] (the "Expiration
Date"). Upon the Expiration Date, all rights evidenced by the Warrants shall
cease and the Warrants shall become void. Subject to the provisions of the
Warrant Agreement, the holder of each Warrant shall have the right to purchase
from Dura until the Expiration Date (and Dura shall issue and sell to such
holder of a Warrant) one-third of one fully paid and nonassessable share of
Common Stock (a "Warrant Share") at an exercise price (the "Exercise Price") of
$_______ per share upon surrender of this Warrant Certificate to Dura at the
office of the Warrant Agent (as defined in the Warrant Agreement) designated by
the Warrant Agent for such purpose with the form of election to purchase
appearing on this Warrant Certificate duly completed and signed, together with
payment of the Exercise Price by certified or official bank
A-2
check payable to the order of Dura.
The Exercise Price and the number of Warrant Shares that may be purchased
upon the exercise of the Warrants and the number of Warrants outstanding are
subject to change or adjustment upon the occurrence of certain events set forth
in the Warrant Agreement.
REFERENCE IS MADE TO THE PROVISIONS OF THIS WARRANT CERTIFICATE SET FORTH
ON THE REVERSE SIDE HEREOF, AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH ON THE FRONT OF THIS CERTIFICATE.
This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent.
This Warrant Certificate shall be governed by and construed in accordance
with the laws of the State of California.
IN WITNESS WHEREOF, Dura has caused this Warrant Certificate to be executed
by its duly authorized officers.
Dated: ____________, 1997 DURA PHARMACEUTICALS, INC.
By:
---------------------------
Title:
------------------------
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES,
as Warrant Agent
By:
--------------------------------
Authorized Signature
A-3
[REVERSE SIDE]
DURA PHARMACEUTICALS, INC.
This Warrant Certificate is subject to all of the terms and conditions of
the Warrant Agreement, dated on or about ___________, 1997 (the "Warrant
Agreement"), between Dura and the Warrant Agent, to all of which terms and
conditions the registered holder of the Warrant consents by acceptance hereof.
The Warrant Agreement is incorporated herein by reference and made a part hereof
and reference is made to the Warrant Agreement for a full description of the
rights, limitations of rights, obligations, duties and immunities of the Warrant
Agent, Dura and the registered holders of Warrant Certificates. Copies of the
Warrant Agreement are available for inspection at the principal office of the
Warrant Agent or may be obtained upon written request addressed to the Warrant
Agent at its principal office in _________________.
Dura shall not be required upon the exercise of the Warrants evidenced by
this Warrant Certificate to issue fractional shares, but shall make adjustment
therefore in cash on the basis of the current market value of any fractional
interest as provided in the Warrant Agreement.
Dura has agreed to cause a registration statement under the Securities Act
of 1933, as amended, covering the Warrants and Warrant Shares to be effective
through the termination of the Exercise Period (as defined in the Warrant
Agreement) or until such earlier time as no Warrants remain outstanding, and to
register or qualify the Warrants and the Warrant Shares to be delivered upon
exercise of the Warrants under the laws of each jurisdiction in which such
registration or qualification is necessary.
The Warrants evidenced by this Warrant Certificate may not be divided or
combined with other Warrants or exchanged, assigned or transferred apart from
the shares of ▇▇▇▇▇▇ Development Corp. II, Inc. Callable Common Stock with which
they were sold as a Unit to the public until the Separation Date. After the
Separation Date, this Warrant Certificate may be exchanged, at the option of the
holder upon presentation and surrender hereof to the Warrant Agent, for other
Warrant Certificates of different denominations, entitling the holder hereof to
purchase in the aggregate the same number of Warrant Shares, but without the
legend that appears hereon. After the Separation Date, Warrants may be assigned
or transferred upon surrender of this Warrant Certificate to the Warrant Agent,
accompanied (if so required by Dura or the Warrant Agent) by the form of
assignment appearing on this Warrant Certificate duly completed and signed,
whereupon the Warrant Agent shall execute and deliver to the transferee a new
Warrant Certificate entitling the transferee to purchase the same number of
Warrant Shares, but without the legend that appears hereon. If the Warrants
evidenced by this Warrant Certificate shall be exercised in part, the holder
hereof shall be
A-4
entitled to receive upon surrender hereof another Warrant Certificate or
Certificates evidencing the number of Warrants not so exercised.
The holder of this Warrant Certificate shall not, by virtue hereof, be
entitled to any of the rights of a stockholder in Dura, either at law or in
equity, and the rights of the holder are limited to those expressed in the
Warrant Agreement.
If this Warrant Certificate shall be surrendered for exercise within any
period during which the transfer books for the Common Stock are closed for
any purpose, Dura shall not be required to make delivery of certificates for
shares purchasable upon such transfer until the date of the reopening of said
transfer books.
Each holder of this Warrant Certificate, by accepting the same, consents
and agrees with Dura, the Warrant Agent and with every other holder of a Warrant
Certificate that:
(a) this Warrant Certificate is transferable on the registry books of
the Warrant Agent only upon the terms and conditions set forth in the Warrant
Agreement; and
(b) Dura and the Warrant Agent may deem and treat the person in whose
name this Warrant Certificate is registered as the absolute owner hereof
(notwithstanding any notation of ownership or other writing hereon made by
anyone other than Dura or the Warrant Agent) for all purposes whatever and
neither Dura nor the Warrant Agent shall be affected by any notice to the
contrary.
This Warrant Certificate shall not be valid or enforceable for any purpose
until it shall have been countersigned by the Warrant Agent.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common UNIF GIFT MIN ACT - __________ Custodian __________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right under Uniform Gifts to Minors
of survivorship and not Act
as tenants in common --------------------------------------
(State)
Additional abbreviations may also be used though not in the above list.
A-5
ELECTION TO PURCHASE
(To be executed upon exercise of Warrant)
Dated___________, _____
The undersigned hereby irrevocably exercises this Warrant to purchase _____
shares of Common Stock and herewith makes payment of $___________ in payment of
the Exercise Price thereof on the terms and conditions specified in this Warrant
Certificate, surrenders this Warrant Certificate and all right, title, and
interest therein to Dura and directs that the Warrant Shares deliverable upon
the exercise of such Warrants be registered in the name and at the address
specified below and delivered thereto.
Name:
---------------------------------------------------------------------------
(Please Print)
Name:
---------------------------------------------------------------------------
City, State and Zip Code:
-------------------------------------------------------
If such number of Warrant Shares is less than the aggregate number of
Warrant Shares purchasable hereunder, the undersigned requests that a new
Warrant Certificate representing the balance of such Warrant Shares to be
registered in the name and at the address specified below and delivered thereto.
Name:
---------------------------------------------------------------------------
(Please Print)
Address:
------------------------------------------------------------------------
City, State and Zip Code:
-------------------------------------------------------
Taxpayer's Identification or Social Security Number:
----------------------------
Signature(s)
-----------------------
-----------------------
NOTE: The above signature(s) must correspond with the name as written upon the
face of this Warrant Certificate in every particular, without alteration or
enlargement or any change whatsoever. If the certificate representing the
Warrant Shares or any Warrant Certificate representing Warrants not exercised is
to be registered in a name other than that in which this Warrant Certificate is
registered, the signature of the holder hereof must be guaranteed.
Signature(s) Guaranteed:
-----------------------------
A-6
ASSIGNMENT
FOR VALUE RECEIVED, ____________ hereby sells, assigns and transfers to:
Name:
---------------------------------------------------------------------------
(Please Print)
Address:
------------------------------------------------------------------------
City, State and Zip Code:
-------------------------------------------------------
Taxpayer's Identification or Social Security Number:
----------------------------
the right to purchase up to _____ Warrant Shares represented by this Warrant and
does hereby irrevocably constitute and appoint _______________ to transfer said
Warrant on behalf of Dura, with full power of substitution in the premises.
Dated:__________, __ __________________________________
__________________________________
Signature(s) of registered Holder
NOTE: The above signature(s) must correspond with the name as written upon the
face of this Warrant Certificate in every particular, without alteration or
enlargement or any change whatsoever.
Signature(s) Guaranteed:
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