Exhibit 1.2
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▇▇▇▇▇▇ DEVELOPMENT CORPORATION II, INC.
(a Delaware corporation)
DURA PHARMACEUTICALS, INC.
(a Delaware corporation)
937,500 Units
Each Unit Consisting of
One Share of Callable Common Stock of ▇▇▇▇▇▇ Development Corporation II, Inc.
and One Warrant to Purchase
One-Fourth of One Share of Common Stock of Dura Pharmaceuticals, Inc.
INTERNATIONAL PURCHASE AGREEMENT
Dated: December __, 1997
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TABLE OF CONTENTS
SECTION 1. Representations and Warranties . . . . . . . . . . . . . . . 4
(a) Representations and Warranties by the Companies. . . . . . . 4
(i) Compliance with Registration Requirements. . . . . 5
(ii) Incorporated Documents . . . . . . . . . . . . . . 5
(iii) Independent Accountants. . . . . . . . . . . . . . 6
(iv) Financial Statements . . . . . . . . . . . . . . . 6
(v) No Material Adverse Change in Business . . . . . . 7
(vi) Good Standing of the Companies . . . . . . . . . . 7
(vii) Good Standing of Subsidiaries. . . . . . . . . . . 8
(viii) Capitalization . . . . . . . . . . . . . . . . . . 8
(ix) Authorization of Agreements. . . . . . . . . . . . 9
(x) Authorization and Description of Units . . . . . . 10
(xi) Registration or Similar Rights Waived. . . . . . . 11
(xii) Absence of Defaults and Conflicts. . . . . . . . . 11
(xiii) Compliance with Laws . . . . . . . . . . . . . . . 12
(xiv) Absence of Labor Dispute . . . . . . . . . . . . . 12
(xv) Absence of Proceedings . . . . . . . . . . . . . . 12
(xvi) Accuracy of Exhibits . . . . . . . . . . . . . . . 13
(xvii) Possession of Intellectual Property. . . . . . . . 13
(xviii) Absence of Further Requirements. . . . . . . . . . 14
(xix) Possession of Licenses and Permits . . . . . . . . 14
(xx) Title to Property. . . . . . . . . . . . . . . . . 14
(xxi) Compliance with Cuba Act . . . . . . . . . . . . . 15
(xxii) Investment Company Act . . . . . . . . . . . . . . 15
(xxiii) Environmental Laws . . . . . . . . . . . . . . . . 15
(xxiv) Taxes. . . . . . . . . . . . . . . . . . . . . . . 15
(xxv) Insurance. . . . . . . . . . . . . . . . . . . . . 16
(xxvi) Accounting Controls. . . . . . . . . . . . . . . . 16
(xxvii) Lock-up Agreements . . . . . . . . . . . . . . . . 16
(xxviii) Affiliate Transactions . . . . . . . . . . . . . . 16
(xxix) Distribution of Prospectuses . . . . . . . . . . . 16
(b) Officer's Certificates . . . . . . . . . . . . . . . . . . . 17
SECTION 2. Sale and Delivery to Managers; Closing . . . . . . . . . . . 17
(a) Initial International Units. . . . . . . . . . . . . . . . . 17
(b) International Option Units . . . . . . . . . . . . . . . . . 17
(c) Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(d) Denominations; Registration. . . . . . . . . . . . . . . . . 18
SECTION 3. Covenants of the Companies . . . . . . . . . . . . . . . . . 18
(a) Compliance with Securities Regulations and Commission
Requests . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(b) Filing of Amendments . . . . . . . . . . . . . . . . . . . . 19
(c) Delivery of Registration Statement . . . . . . . . . . . . . 19
i
(d) Delivery of Prospectuses . . . . . . . . . . . . . . . . . . 19
(e) Continued Compliance with Securities Laws. . . . . . . . . . 20
(f) Rule 158 . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(g) Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . 20
(h) Listing. . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(i) Restriction on Sale of Dura Common Stock . . . . . . . . . . 20
(j) Reporting Requirements . . . . . . . . . . . . . . . . . . . 21
SECTION 4. Payment of Expenses. . . . . . . . . . . . . . . . . . . . . 21
(a) Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(b) Termination of Agreement . . . . . . . . . . . . . . . . . . 21
SECTION 5. Conditions of Managers' Obligations. . . . . . . . . . . . . 22
(a) Effectiveness of Registration Statement. . . . . . . . . . . 22
(b) Opinion of Counsel for the Companies . . . . . . . . . . . . 22
(c) Opinion of Patent Counsel for the Companies. . . . . . . . . 22
(d) Opinion of Regulatory Counsel for the Companies. . . . . . . 22
(e) Opinion of Counsel for the Managers. . . . . . . . . . . . . 22
(f) Officers' Certificate. . . . . . . . . . . . . . . . . . . . 23
(g) Accountants' Comfort Letter. . . . . . . . . . . . . . . . . 23
(h) Bring-down Comfort Letter. . . . . . . . . . . . . . . . . . 23
(i) Approval of Listing. . . . . . . . . . . . . . . . . . . . . 23
(j) No Objection . . . . . . . . . . . . . . . . . . . . . . . . 23
(k) Lock-up Agreements . . . . . . . . . . . . . . . . . . . . . 24
(l) Purchase of Initial U.S. Units . . . . . . . . . . . . . . . 24
(m) Conditions to Purchase of International Option Units . . . . 24
(i) Officers' Certificate. . . . . . . . . . . . . . . 24
(ii) Opinions of Counsel for the Companies. . . . . . . 24
(iii) Opinion of Counsel for the Managers. . . . . . . . 24
(iv) Bring-down Comfort Letter. . . . . . . . . . . . . 24
(n) Additional Documents . . . . . . . . . . . . . . . . . . . . 24
(o) Termination of Agreement . . . . . . . . . . . . . . . . . . 25
SECTION 6. Indemnification. . . . . . . . . . . . . . . . . . . . . . . 25
(a) Indemnification of Managers. . . . . . . . . . . . . . . . . 25
(b) Indemnification of the Companies and Directors and Officers. 26
(c) Actions against Parties; Notification. . . . . . . . . . . . 26
(d) Settlement without Consent if Failure to Reimburse . . . . . 27
SECTION 7. Contribution . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 9. Termination of Agreement . . . . . . . . . . . . . . . . . . 29
(a) Termination; General . . . . . . . . . . . . . . . . . . . . 29
(b) Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 10. Default by One or More of the Managers . . . . . . . . . . . 29
SECTION 11. Default by the Companies . . . . . . . . . . . . . . . . . . 30
SECTION 12. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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SECTION 13. Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 14. Governing Law and Time . . . . . . . . . . . . . . . . . . . 31
SECTION 15. Effect of Headings . . . . . . . . . . . . . . . . . . . . . 31
SCHEDULES
Schedule A - List of Managers . . . . . . . . . . . . . . . . . . . . Sch A-1
Schedule B - Pricing Information. . . . . . . . . . . . . . . . . . . Sch B-1
Schedule C - List of Persons and Entities Subject to Lock-up. . . . . Sch C-1
EXHIBITS
Exhibit A - Form of Opinion of Counsel for Dura. . . . . . . . . . . . . A-1
Exhibit B - Form of Opinion of Intellectual Property
Counsel for Dura . . . . . . . . . . . . . . . . . . . . . . B-1
Exhibit C - Form of Opinion of U.S. Regulatory Counsel
for the Companies. . . . . . . . . . . . . . . . . . . . . . C-1
Exhibit D - Form of Lock-up Letter . . . . . . . . . . . . . . . . . . . D-1
iii
▇▇▇▇▇▇ DEVELOPMENT CORPORATION II, INC.
(a Delaware corporation)
DURA PHARMACEUTICALS, INC.
(a Delaware corporation)
937,500 Units
Each Unit Consisting of
One Share of Callable Common Stock of ▇▇▇▇▇▇ Development Corporation II, Inc.
and One Warrant to Purchase
One-Fourth of One Share of Common Stock of Dura Pharmaceuticals, Inc.
INTERNATIONAL PURCHASE AGREEMENT
--------------------------------
December __, 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
(as "Lead Manager")
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
(together, the "Managers")
c/o Merrill ▇▇▇▇▇ International
Ropemaker Place
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇▇ Development Corporation II, Inc., a Delaware corporation ("SDC
II"), and Dura Pharmaceuticals, Inc., a Delaware corporation ("Dura" and,
together with SDC II, the "Companies"), confirm their respective agreements
with ▇▇▇▇▇▇▇ ▇▇▇▇▇ International ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ Securities Corporation (together, the "Managers," which term shall
also include any underwriter substituted as hereinafter provided in Section
10 hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ is acting as representative (in such
capacity, the "Lead
Manager"), with respect to the issue and sale by the Companies, and the
purchase by the Managers, acting severally and not jointly, of the respective
number of units set forth in said Schedule A, each unit composed of one share
of callable common stock, par value $.001 per share, of SDC II ("SDC II
Common Stock") and one warrant (each a "Warrant") that will entitle the
registered owner thereof to purchase one-fourth of one share of common stock,
par value $.001 per share, of Dura ("Dura Common Stock") at a per share
exercise price as set forth in Schedule A hereto, pursuant to and subject to
certain adjustments as set forth in the Warrant certificate to be issued as
part of the Unit Certificate (as hereinafter defined), and with respect to
the grant by SDC II and Dura to the Managers, acting severally and not
jointly, of the option described in Section 2(b) hereof to purchase all or
any part of 140,625 additional units to cover over-allotments, if any. The
SDC II Common Stock and the Warrants will be paired for sale as units by SDC
II and Dura and then sold to the Managers. The aforesaid 937,500 units (the
"Initial International Units") to be purchased by the Managers and all or any
part of the 140,625 units subject to the option described in Section 2(b)
(the "International Option Units") are hereinafter called, collectively, the
"International Units."
It is understood that the Companies concurrently are entering into an
agreement dated the date hereof (the "U.S. Purchase Agreement") providing for
the offering by the Companies of an aggregate of 3,750,000 units composed of
one share of SDC II Common Stock and one Warrant (the "Initial U.S. Units")
through arrangements with certain underwriters in the United States and
Canada (the "U.S. Underwriters") for whom ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated and ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation
are acting as representatives (the "U.S. Representatives") and the grant by
the Companies to the U.S. Underwriters, acting severally and not jointly, of
an option to purchase all or any part of the U.S. Underwriters' pro rata
portion of up to 562,500 additional units composed of one share of SDC II
Common Stock and one Warrant solely to cover over-allotments, if any (the
"U.S. Option Units" and, together with the International Option Units, the
"Option Units"). The Initial U.S. Units and the U.S. Option Units are
hereinafter called the "U.S. Units." It is understood that the Companies are
not obligated to sell and the Managers are not obligated to purchase, any
Initial International Units unless all of the Initial U.S. Units are
contemporaneously purchased by the U.S. Underwriters.
The Managers and the U.S. Underwriters are hereinafter collectively
called the "Underwriters", the Initial U.S. Units and the Initial
International Units are hereinafter collectively called the "Initial Units",
and the U.S. Units and the International Units are hereinafter collectively
called the "Units."
The Underwriters concurrently will enter into an Intersyndicate Agreement
of even date herewith (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the Underwriters under the
direction of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated (in such capacity, the "Global Coordinator").
2
The Companies understand that the Managers propose to make a public
offering of the International Units as soon as the Lead Manager deems
advisable after this Agreement has been executed and delivered.
Each Unit initially will be represented by a certificate representing one
or more Warrants and one or more shares of SDC II Common Stock (a "Unit
Certificate"). Each Unit will be transferable only as a whole and as
described in the Prospectuses (as hereinafter defined) through December 31,
1999 or such earlier date on which the Purchase Option (as defined in the
Prospectuses) is exercised or expires unexercised, after which date the
Warrants and the SDC II Common Stock will trade separately; PROVIDED,
HOWEVER, that such separation date will be accelerated upon the occurrence of
an Acceleration Event (as defined in the Prospectuses) with respect to Dura.
The SDC II Common Stock, the Warrants and the U.S. Units are more fully
described in the Registration Statement (as hereinafter defined) and the
Prospectuses.
The Companies have filed with the Securities and Exchange Commission (the
"Commission") a combined registration statement (Nos. 333-37673 and
333-37673-01) covering the registration of the U.S. Units under the
Securities Act of 1933, as amended (the "1933 Act"), including the related
preliminary prospectus or prospectuses, (a) with respect to SDC II, on Form
S-1, relating to the SDC II Common Stock comprising a portion of the U.S.
Units, and (b) with respect to Dura, on Form S-3, relating to the Warrants
comprising a portion of the U.S. Units, the Dura Common Stock underlying the
Warrants and the Dura Common Stock issuable upon exercise of the Purchase
Option. Promptly after execution and delivery of this Agreement, the
Companies will either (i) prepare and file a prospectus in accordance with
the provisions of Rule 430A ("Rule 430A") of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") and paragraph (b)
of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if the
Companies have elected to rely upon Rule 434 ("Rule 434") of the 1933 Act
Regulations, prepare and file a term sheet (a "Term Sheet") in accordance
with the provisions of Rule 434 and Rule 424(b). Two forms of prospectus are
to be used in connection with the offering and sale of the Units: one
relating to the International Units (the "Form of International Prospectus")
and one relating to the U.S. Units (the "Form of U.S. Prospectus"). The Form
of International Prospectus is identical to the Form of U.S. Prospectus,
except for the front cover and back cover pages, the information under the
caption "Underwriting", the inclusion in the "Prospectus Summary" section of
the Form of International Prospectus of a paragraph under the caption "United
States Taxation of Non-U.S. Persons" and the exclusion in the Form of
International Prospectus of a section under the caption "United States
Federal Income Tax Consequences." The information included in any such
prospectus or in any such Term Sheet, as the case may be, that was omitted
from such registration statement at the time it became effective but that is
deemed to be part of such registration statement at the time it became
effective (A) pursuant to paragraph (b) of Rule 430A is referred to as "Rule
430A Information" or (B) pursuant to paragraph (d) of Rule 434 is referred to
as "Rule 434 Information." Each Form of International Prospectus and Form of
U.S. Prospectus used before such registration statement became effective, and
any prospectus that omitted, as applicable, the Rule 430A Information or the
Rule 434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a "preliminary
3
prospectus." Such registration statement, including the exhibits thereto,
schedules thereto, if any, and the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it
became effective and including the Rule 430A Information and the Rule 434
Information, as applicable, is herein called the "Registration Statement."
Any registration statement filed pursuant to Rule 462(b) of the 1933 Act
Regulations is herein referred to as the "Rule 462(b) Registration
Statement," and after such filing the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. The final Form of
International Prospectus and the final Form of U.S. Prospectus, including the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, in the forms first furnished to the Underwriters for use
in connection with the offering of the Units (the "Unit Offering") are herein
called the "International Prospectus" and the "U.S. Prospectus,"
respectively, and, collectively, the "Prospectuses." If Rule 434 is relied
on, the term "International Prospectus" and "U.S. Prospectus" shall refer to
the preliminary International Prospectus dated December 1, 1997 and the
preliminary U.S. Prospectus dated December 1, 1997, respectively, each
together with the applicable Term Sheet and all references in this Agreement
to the date of such Prospectuses shall mean the date of the applicable Term
Sheet. For purposes of this Agreement, all references to the Registration
Statement, any preliminary prospectus, the International Prospectus, the U.S.
Prospectus or any Term Sheet or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("▇▇▇▇▇").
Prior to the Closing Time (as defined), Dura intends to acquire all of
the outstanding capital stock of ▇▇▇▇▇▇ Development Corporation ("SDC") for
an aggregate purchase price of approximately $45.7 million, payable in cash,
shares of Dura Common Stock, or any combination thereof (the "SDC Purchase").
All references in this Agreement to financial statements and schedules
and other information which is "contained", "included" or "stated" in the
Registration Statement, any preliminary prospectus (including the Form of
U.S. Prospectus and the Form of International Prospectus) or the Prospectuses
(or other references of like import) shall be deemed to mean and include all
such financial statements and schedules and other information which is
incorporated by reference in the Registration Statement, any preliminary
prospectus (including the Form of U.S. Prospectus and the Form of
International Prospectus) or the Prospectuses, as the case may be; and all
references in this Agreement to amendments or supplements to the Registration
Statement, any preliminary prospectus or the Prospectuses shall be deemed to
mean and include the filing of any document under the Securities Exchange Act
of 1934 (the "1934 Act") which is incorporated by reference in the
Registration Statement, such preliminary prospectus or the Prospectuses, as
the case may be.
4
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANIES. The Companies
jointly and severally represent and warrant to each Manager as of the date
hereof, as of the Closing Time referred to in Section 2(c) hereof, and as of
each Date of Delivery (if any) referred to in Section 2(b) hereof, and agree
with each Manager, as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. Dura meets the
requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Companies, are contemplated by the Commission, and any request on the part
of the Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto become
effective and at the Closing Time (and, if any International Option Units
are purchased, at the Date of Delivery), the Registration Statement, the
Rule 462(b) Registration Statement and any amendments and supplements
thereto complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and did not and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. Neither of the Prospectuses nor any
amendments or supplements thereto, at the time the Prospectuses or any
amendments or supplements were issued and at the Closing Time (and, if any
International Option Units are purchased, at the Date of Delivery),
included or will include an untrue statement of a material fact or omitted
or will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. If Rule 434 is used, the Companies will comply with
the requirements of Rule 434. The representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or the International Prospectus made in reliance
upon and in conformity with information furnished to the Companies in
writing by any Manager through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the
Registration Statement or the International Prospectus.
Each preliminary prospectus and the prospectuses filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectuses delivered to the Underwriters
for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
5
(ii) INCORPORATED DOCUMENTS. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the
Prospectuses, when they became effective or at the time they were or
hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations or the Securities Exchange Act of 1934 (the "1934 Act") and the
rules and regulations of the Commission thereunder (the "1934 Act
Regulations"), as applicable, and, when read together with the other
information in the Prospectuses, at the time the Registration Statement
became effective, at the time the Prospectuses were issued and at the
Closing Time (and, if any U.S. Option Units are purchased, at the Date of
Delivery), did not and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(iii) INDEPENDENT ACCOUNTANTS. Deloitte & Touche LLP, which are
reporting upon the audited financial statements and supporting schedules
with respect to Dura, Spiros Development Corporation ("SDC") and SDC II
incorporated by reference or included in the Registration Statement, are
independent accountants as required by the 1933 Act and the 1933 Act
Regulations.
(iv) FINANCIAL STATEMENTS. (A) The financial statements of Dura
incorporated by reference or included in the Registration Statement and the
Prospectuses, together with the related schedules and notes, present fairly
the financial position of Dura (and, for relevant periods consistent with
the Commission's rules and regulations, Dura's Subsidiaries (as defined in
clause (vii) below)) at the dates indicated and the statements of
operations, shareholders' equity and cash flows of Dura (and, for relevant
periods consistent with the Commission's rules and regulations, each of the
Subsidiaries) for the periods specified; except as otherwise stated in the
Registration Statement, said financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP") applied
on a consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Registration Statement present fairly in
accordance with GAAP the information required to be stated therein. The
selected financial data and summary financial information for Dura and the
Subsidiaries included in the Prospectuses present fairly in accordance with
GAAP the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements of Dura and the
Subsidiaries included in the Registration Statement. Other than the
financial statements and schedules referred to in this paragraph (iv), no
other financial statements or schedules are required to be included in the
Registration Statement or incorporated therein by reference.
(B) The financial statements of SDC included in the Registration
Statement and the Prospectuses, together with the related schedules and
notes, present fairly the financial position of SDC at the dates indicated
and the statements of operations, shareholders' equity and cash flows of
SDC for the periods specified; EXCEPT AS OTHERWISE
6
STATED IN THE REGISTRATION STATEMENT, said financial statements have been
prepared in conformity with GAAP applied on a consistent basis throughout
the periods involved.
(C) The financial statements of SDC II included in the Registration
Statement and the Prospectuses, together with the related schedules and
notes, present fairly the financial position of SDC II at the date
indicated; except as otherwise stated in the Registration Statement, said
financial statements have been prepared in conformity with GAAP.
(D) The pro forma financial statements and the related notes thereto
included in the Registration Statement and the Prospectuses or incorporated
therein by reference present fairly in accordance with GAAP the information
shown therein, have been prepared in accordance with the Commission's rules
and guidelines with respect to pro forma financial statements and have been
properly compiled on the bases described therein, and the assumptions used
in the preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and circumstances
referred to therein.
(v) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectuses, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of Dura and the
Subsidiaries (as defined below), considered as one enterprise, whether or
not arising in the ordinary course of business (a "Dura Material Adverse
Effect"), (B) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of SDC, whether or not arising in the ordinary course of business
(an "SDC Material Adverse Effect"), (C) there has been no material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of SDC II, whether or not arising in
the ordinary course of business (an "SDC II Material Adverse Effect"),
(D) there have been no transactions entered into by Dura or any Subsidiary,
SDC or SDC II, other than in the ordinary course of business, which are
material with respect to Dura and the Subsidiaries, considered as one
enterprise, SDC or SDC II, respectively, and (D) there has been no dividend
or distribution of any kind declared, paid or made by each of SDC, SDC II
or Dura, on any class of its respective capital stock. As used in this
Agreement on the date hereof, a "Material Adverse Effect" shall mean both a
Dura Material Adverse Effect and an SDC Material Adverse Effect.
(vi) GOOD STANDING OF THE COMPANIES. (A) Dura has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectuses and to enter into and perform its obligations
under this Agreement; and Dura is duly qualified as a foreign corporation
to transact business and is in good standing in each other jurisdiction in
which such
7
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
or to be in good standing would not result in a Dura Material Adverse
Effect.
(B) SDC II has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware and
has corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectuses and to enter
into and perform its obligations under this Agreement; and SDC II is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or to be in good standing
would not result in an SDC II Material Adverse Effect.
(vii) GOOD STANDING OF SUBSIDIARIES. Dura Delivery Systems,
Inc., a Delaware corporation ("DDSI"), Health Script Pharmacy Services,
Inc., a Colorado corporation ("Health Script"), Healthco Solutions, Inc., a
Colorado corporation ("Healthco"), HS Wholesaler, Inc., a Colorado
corporation ("HS Wholesaler"), Scandi Acquisition Corp., a Delaware
corporation ("Scandi"), DCI, Ltd., a corporation organized under the laws
of the Cayman Islands ("DCI"), Dura (Bermuda) Trading Company Ltd., a
corporation organized under the laws of Bermuda ("Dura (Bermuda)") are the
only subsidiaries of Dura (DDSI, Health Script, Healthco, HS Wholesaler,
Scandi, DCI, Dura (Bermuda) and, unless otherwise indicated, SDC, are
hereinafter referred to as the "Subsidiaries"). Except for the
Subsidiaries, neither Dura nor any Subsidiary owns any shares of stock or
any other equity securities of any corporation or has any equity interests
in any firm, partnership, association or other entity other than 775,193
shares of Common Stock of Trega Biosciences, Inc. and 754,799 shares of
Common Stock of Cosmederm Technologies, Inc., each held by Dura. Each
Subsidiary has been duly organized and is validly existing as a corporation
in good standing under the laws of the jurisdiction of its incorporation,
has corporate power and authority to own, lease and operate its properties
and conduct its business as described in the Prospectuses and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good standing
would not result in a Material Adverse Effect; all of the issued and
outstanding capital stock of each Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and (other than with
respect to SDC) is owned solely by Dura or another Subsidiary free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity; none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or similar rights of
any securityholder of such Subsidiary arising by operation of law, under
the charter or by-laws of such Subsidiary or under any agreement to which
Dura or such Subsidiary is a party.
8
(B) Upon the consummation of the SDC Purchase, all of the outstanding
shares of capital stock of SDC will be owned by Dura free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity.
(viii) CAPITALIZATION. The authorized, issued and outstanding
capital stock of each of Dura and SDC II is as set forth in the
Prospectuses under the column "Actual" under the captions "Dura
Capitalization" and "▇▇▇▇▇▇ Corp. II Capitalization", respectively (except,
in the case of Dura, for subsequent issuances, if any, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectuses or incorporated by reference therein or pursuant to the
exercise of convertible securities, warrants or options referred to in the
Prospectuses or incorporated by reference therein). The shares of issued
and outstanding capital stock of each of Dura and SDC II have been duly
authorized and validly issued and are fully paid and non-assessable; none
of the outstanding shares of capital stock of Dura or SDC II was issued in
violation of the preemptive or other similar rights of any securityholder
of Dura or SDC II, respectively, arising by operation of law, under the
charter or by-laws of Dura or SDC II, as the case may be, or under any
agreement to which Dura or SDC II is a party. Except as disclosed in the
Prospectuses or incorporated by reference therein, there are no outstanding
options, warrants or other rights calling for the issuance of, and no
commitments, plans or arrangements to issue, any shares of capital stock of
Dura, SDC II or any Subsidiary or any security convertible into or
exchangeable for capital stock of Dura, SDC II or any Subsidiary.
(ix) AUTHORIZATION OF AGREEMENTS. (A) This Agreement and the U.S.
Purchase Agreement have been duly authorized, executed and delivered by
each of Dura and SDC II.
(B) The Warrant Agreement (as hereinafter defined) has been duly
authorized by Dura, and when executed and delivered by Dura and the Warrant
Agent thereunder, will constitute a valid and binding agreement of Dura,
enforceable against Dura in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(C) Each of the Development Agreement, the Technology Agreement, the
Albuterol and Product Option Agreement, the Manufacturing and Marketing
Agreement and the Services Agreement (each as defined in the Prospectuses,
and collectively referred to herein as the "Transaction Agreements") has
been duly authorized by Dura and SDC II and, in the case of the Technology
Agreement, Dura, SDC II, SDC and DDSI, and when executed and delivered by
Dura and SDC II, and, in the case of the Technology Agreement, Dura, SDC
II, SDC and DDSI, will constitute valid and binding agreements of each of
Dura, SDC II, SDC and DDSI, as the case may be, enforceable
9
against Dura, SDC II, SDC and DDSI in accordance with their terms,
except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law).
(x) AUTHORIZATION AND DESCRIPTION OF UNITS. (A) The SDC II Common
Stock to be issued by SDC II as a component of the Units has been duly
authorized for issuance and sale to the Managers pursuant to this Agreement
and to the U.S. Underwriters pursuant to the U.S. Purchase Agreement,
respectively, and, when issued and delivered by SDC II against payment of
the purchase price therefor as provided in this Agreement and the U.S.
Purchase Agreement, respectively, will be validly issued, fully paid and
non-assessable; the SDC II Common Stock conforms in all material respects
to the statements relating thereto contained in the Prospectuses and such
description conforms to the rights set forth in the instruments defining
the same; no holder of SDC II Common Stock will be subject to personal
liability by reason of being such a holder; and the issuance of the SDC II
Common Stock is not subject to the preemptive or other similar rights of
any securityholder of SDC II.
(B) The Warrants to be issued as a component of the Units have been
duly authorized by Dura for issuance and sale to the Managers pursuant to
this Agreement and to the U.S. Underwriters pursuant to the U.S. Purchase
Agreement, respectively, and, when duly executed, issued and delivered by
Dura and duly countersigned by the Warrant Agent (as hereinafter defined)
in the manner provided for in the Warrant Agreement (the "Warrant
Agreement") to be entered into between Dura and ChaseMellon Shareholder
Services, as warrant agent (the "Warrant Agent"), and, when issued and
delivered by Dura against payment of the purchase price therefor as
provided in this Agreement and the U.S. Purchase Agreement, respectively,
will constitute valid and binding obligations of Dura, entitled to the
benefits of the Warrant Agreement, and will be enforceable in accordance
with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law); such
Warrants are not subject to the preemptive rights of any stockholder of
Dura.
(C) Dura shall have available such number of shares of Dura Common
Stock deliverable upon exercise of the Warrants as is sufficient to permit
the exercise in full of the Warrants. All shares of Dura Common Stock
issued upon exercise of the Warrants, when issued and paid for in
accordance with the terms of the Warrant Agreement, will be duly
authorized, validly issued, fully paid and nonassessable; shares of Dura
Common Stock are not subject to the preemptive rights of any stockholder of
10
Dura; and all corporate action required to be taken for such authorization,
issue and sale of the Dura Common Stock will have been validly and
sufficiently taken upon the issuance of the Warrants; such shares of Dura
Common Stock conform in all material respects to the descriptions thereof
contained or incorporated by reference in the Prospectuses and all
corporate action required to be taken for the authorization, issue and sale
of such shares of Dura Common Stock has been validly and sufficiently
taken.
(xi) REGISTRATION OR SIMILAR RIGHTS WAIVED. There are no persons with
registration or other similar rights to have any securities registered
pursuant to the Registration Statement or otherwise registered by the
Companies under the 1933 Act who have not waived such rights.
(xii) ABSENCE OF DEFAULTS AND CONFLICTS. (A) Neither Dura nor
any Subsidiary is in violation of its charter or by-laws or in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which Dura or any Subsidiary is a party or by which it or any of them may
be bound, or to which any of the property or assets of Dura or any
Subsidiary is subject (collectively, "Agreements and Instruments") except
for such defaults that would not result in a Material Adverse Effect; and
the execution, delivery and performance of each of this Agreement, the U.S.
Purchase Agreement, the Warrant Agreement and the Transaction Agreements by
Dura, SDC and DDSI, as the case may by, the issuance and delivery of the
Warrants and the issuance of shares of Dura Common Stock upon the exercise
of the Warrants and the consummation by Dura, SDC and DDSI, as the case may
be, of the transactions contemplated in this Agreement, the U.S. Purchase
Agreement, the Warrant Agreement and the Transaction Agreements and in the
Registration Statement (including the issuance and sale of the Warrants as
part of the Units) and compliance by Dura, SDC and DDSI, as the case may
be, with their respective obligations under this Agreement, the U.S.
Purchase Agreement, the Warrant Agreement and each of the Transaction
Agreements to which they are a party have been duly authorized by all
necessary corporate action and do not and will not, whether with or without
the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of Dura or any Subsidiary pursuant
to, the Agreements and Instruments (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not result in a
Material Adverse Effect), nor will such action result in any violation of
the provisions of the charter or by-laws of Dura or any Subsidiary or any
applicable material law, statute, rule, regulation, judgment, order, writ
or decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over Dura or any Subsidiary or any of their
assets, properties or operations. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note, debenture
or other evidence of indebtedness (or any person acting on such holder's
11
behalf) the right to require the repurchase, redemption or repayment of all
or a portion of such indebtedness by Dura or any Subsidiary.
(B) SDC II is not in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other agreement or
instrument to which SDC II is a party or by which it may be bound, or to
which any of the property or assets of SDC II is subject (collectively,
"SDC II Agreements and Instruments") except for such defaults that would
not result in an SDC II Material Adverse Effect; and the execution,
delivery and performance of each of this Agreement, the U.S. Purchase
Agreement and the Transaction Agreements by SDC II and the consummation by
SDC II of the transactions contemplated herein, therein and in the
Registration Statement (including the issuance and sale of the SDC II
Common Stock as part of the Units and the use of the proceeds from the sale
of the Units as described in the Prospectuses under the caption "Use of
Proceeds") and compliance by SDC II with its obligations under this
Agreement, the U.S. Purchase Agreement and each of the Transaction
Agreements have been duly authorized by all necessary corporate action and
do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or
default or SDC II Repayment Event (as defined below) under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of SDC II pursuant to, the SDC II Agreements and
Instruments (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not result in an SDC II Material Adverse
Effect), nor will such action result in any violation of the provisions of
the charter or by-laws of SDC II or any applicable material law, statute,
rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over SDC II or any of its assets, properties or operations.
As used herein, an "SDC II Repayment Event" means any event or condition
which gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such
indebtedness by SDC II.
(xiii) COMPLIANCE WITH LAWS. Except as set forth in the
Prospectuses, Dura and the Subsidiaries and SDC II are in compliance in all
material respects with all applicable laws, statutes, ordinances, rules or
regulations, the enforcement of which, individually or in the aggregate,
would be reasonably expected to have a Material Adverse Effect or an SDC II
Material Adverse Effect, as the case may be.
(xiv) ABSENCE OF LABOR DISPUTE. No labor dispute with the
employees of Dura or any Subsidiary exists or, to the knowledge of Dura, is
imminent, and Dura is not aware of any existing or imminent labor
disturbance by the employees of any of its or any Subsidiary's principal
suppliers, manufacturers, customers or contractors, which, in either case,
may reasonably be expected to result in a Dura Material Adverse Effect or
an SDC II Material Adverse Effect.
12
(xv) ABSENCE OF PROCEEDINGS. There is no action, suit, proceeding,
inquiry or investigation (except applications for regulatory approval for
marketing of pharmaceutical products) before or brought by any court or
governmental agency or body, domestic or foreign, now pending or, to the
knowledge of either Dura or SDC II, threatened against or affecting Dura or
any Subsidiary or SDC II that is required to be disclosed in the
Registration Statement or that might reasonably be expected to have a
Material Adverse Effect, or an SDC II Material Adverse Effect, or which
might reasonably be expected to materially and adversely affect the
properties or assets of either Dura and the Subsidiaries (other than SDC),
considered as one enterprise, or SDC II or SDC, as the case may be, or the
consummation of the transactions contemplated in this Agreement, the U.S.
Purchase Agreement, the Warrant Agreement and the Transaction Agreements or
the performance by Dura or SDC II of its obligations hereunder or
thereunder; the aggregate of all pending legal or governmental proceedings
to which Dura or any Subsidiary or SDC II, as the case may be, is a party
or which affect any of their respective property or assets is subject which
are not described in the Registration Statement, including ordinary routine
litigation incidental to its business, could not reasonably be expected to
result in a Material Adverse Effect or an SDC II Material Adverse Effect,
as the case may be.
(xvi) ACCURACY OF EXHIBITS. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectuses or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been described and filed as
required.
(xvii) POSSESSION OF INTELLECTUAL PROPERTY. (A) Except as set
forth in the Prospectuses, each of Dura and the Subsidiaries owns or
possesses adequate licenses or other rights to use the patents, patent
rights, licenses, inventions, copyrights, know how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), which are necessary for the operation
of their businesses as presently conducted except where the failure to so
own or have the right to use would not have a Material Adverse Effect.
Except as disclosed in the Prospectuses, nothing has come to the attention
of Dura or the Subsidiaries to the effect that (1) any product, process,
method, substance, part or other material presently contemplated to be sold
by or employed by Dura or any of the Subsidiaries in connection with Dura's
or such Subsidiary's business may infringe any patent, trademark, service
▇▇▇▇, trade name, copyright, license or other right owned by others,
(2) there is pending or threatened any claim or litigation against or
affecting Dura and the Subsidiaries contesting their right to sell or use
any such product, process, method, substance, part or other material or
(3) there is, or there is pending, any patent, invention, device,
application or any applicable statute, law, rule, regulation, standard or
code, in the case of each of clause (1), (2) or (3) above, which could have
Material Adverse Effect.
(B) SDC II will, to the extent provided for in the Technology
Agreement, have the right to use all patents, patent rights, licenses,
inventions, copyrights, know how
13
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures) owned or
controlled by Dura or the Subsidiaries, which are necessary for the
operation of its business as described in the Prospectuses. SDC II has
not received any notice of proceedings relating to revocation or
modification of any such licenses, permits, certificates, consents,
orders, approvals or authorizations which singularly or in the
aggregate, if the subject of an unfavorable ruling or finding, could
have a SDC II Material Adverse Effect.
(xviii) ABSENCE OF FURTHER REQUIREMENTS. (A) No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Companies of their
obligations under this Agreement, the U.S. Purchase Agreement, the Warrant
Agreement and the Transaction Agreements, in connection with the offering,
issuance, sale and delivery of the shares of SDC II Common Stock, the
Warrants or the shares of Dura Common Stock deliverable upon exercise of
the Warrants or the consummation of the transactions contemplated by this
Agreement, the U.S. Purchase Agreement, the Warrant Agreement and the
Transaction Agreements, except such as have been already obtained or as may
be required under the 1933 Act or the 1933 Act Regulations and foreign or
state securities or blue sky laws.
(B) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency is necessary or required for the consummation by SDC
and DDSI of the transactions contemplated by this Agreement, except such as
have already been obtained.
(xix) POSSESSION OF LICENSES AND PERMITS. Dura and the
Subsidiaries and SDC II possess such permits, licenses, approvals, consents
and other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies material to the conduct of the business now operated by Dura, the
Subsidiaries and SDC II, respectively; Dura and the Subsidiaries and SDC II
are in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or in the
aggregate, have a Material Adverse Effect or a SDC II Material Adverse
Effect, as the case may be; all of the Governmental Licenses are valid and
in full force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full force
and effect would not have a Material Adverse Effect or a SDC II Material
Adverse Effect, as the case may be; and neither Dura nor any Subsidiary nor
SDC II has received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a Material Adverse Effect or an SDC II Material Adverse
Effect; provided, however, that no FDA approval has been received with
respect to products that Dura, the Subsidiaries or SDC II currently are not
permitted to market.
14
(xx) TITLE TO PROPERTY. Dura and the Subsidiaries have good and
marketable title to all material properties and assets owned by Dura and
the Subsidiaries, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or encumbrances of any kind
except such as (a) are described or incorporated by reference in the
Prospectuses or (b) do not, singly or in the aggregate, materially affect
the value of such property and do not interfere with the use made and
proposed to be made of such property by Dura or the affected Subsidiaries,
as the case may be; and all properties held under lease by Dura or any
Subsidiary are held under valid, subsisting and enforceable leases.
(B) SDC II has good and marketable title to all material properties
and assets described in the Prospectuses as owned by it, free and clear of
all mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (a) are described in the
Prospectuses or (b) do not, singly or in the aggregate, materially affect
the value of such property and do not interfere with the use made and
proposed to be made of such property by SDC II.
(xxi) COMPLIANCE WITH CUBA ACT. Dura has complied with, and is
and will be in compliance with, the provisions of that certain Florida act
relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
(xxii) INVESTMENT COMPANY ACT. Neither of the Companies is and,
upon the issuance and sale of the Units as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectuses,
will not be an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment Company
Act of 1940, as amended (the "1940 Act").
(xxiii) ENVIRONMENTAL LAWS. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, result in a
Dura Material Adverse Effect, (A) neither Dura nor any Subsidiary is in
material violation of any federal, state, local or foreign law, rule,
regulation, ordinance or any judicial or administrative interpretation
thereof, including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) Dura and the
Subsidiaries have all permits, authorizations and approvals required under
any applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or, to the best knowledge of Dura,
threatened administrative, regulatory or judicial actions, suits, demands,
demand
15
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against
Dura or any of the Subsidiaries and (iv) to the best knowledge of Dura,
there are no events or circumstances that could form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by
any private party or governmental body or agency, against or affecting
Dura or any Subsidiary relating to Hazardous Materials or any
Environmental Laws.
(xxiv) TAXES. Dura and the Subsidiaries have filed all federal,
state, local and foreign tax returns that are required to be filed or have
duly requested extensions thereof and have paid all taxes required to be
paid by any of them and any related assessments, fines or penalties, except
for any such tax, assessment, fine or penalty that is being contested in
good faith and by appropriate proceedings; and adequate charges, accruals
and reserves have been provided for in the financial statements referred to
in Section 1(a)(iv)(A) above in respect of all federal, state, local and
foreign taxes for all periods as to which the tax liability of Dura or any
Subsidiary has not been finally determined or remains open to examination
by applicable taxing authorities.
(xxv) INSURANCE. Dura and the Subsidiaries carry or are entitled
to the benefits of insurance in such amounts and covering such risks as is
generally maintained by companies of established repute engaged in the same
or similar business and all such insurance is in full force and effect.
(xxvi) ACCOUNTING CONTROLS. Dura and the Subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (A) transactions are executed in accordance with
management's general and specific authorizations; (B) transactions are
recorded as necessary to permit preparations of financial statements in
conformity with GAAP and to maintain accountability for assets; (C) access
to assets is permitted only in accordance with management's general or
specific authorizations; and (D) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(xxvii) LOCK-UP AGREEMENTS. The Companies have obtained and delivered
to the Managers the agreements, in the form of Exhibit D hereto, of the
persons and entities named in Schedule C annexed hereto to the effect that
each such person will not, for a period of 90 days from the date of this
Agreement and except as otherwise provided in their respective agreement,
without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly,
offer to sell, grant any option for the sale of, or otherwise dispose of
any shares of Dura Common Stock or any securities convertible into or
exercisable for shares of Dura Common Stock owned by such person or entity
or with respect to which such person has the power of disposition.
(xxviii) AFFILIATE TRANSACTIONS. No relationship, direct or indirect,
exists between or among any of Dura or any affiliate of Dura, on the one
hand, and any director,
16
officer, shareholder, customer or supplier of any of them, on the other
hand, which is required by the 1933 Act or by the 1933 Act Regulations to
be described in the Registration Statement or the Prospectuses and which
is not so described or is not described as required or is not
incorporated by reference therein.
(xxix) DISTRIBUTION OF PROSPECTUSES. The Companies have not
distributed and, prior to the later to occur of (A) Closing Time and (B)
completion of the distribution of the Units, will not distribute any
prospectus (as such term is defined in the 1933 Act and the 1933 Act
Regulations) in connection with the offering and sale of the Units other
than the Registration Statement, any preliminary prospectus, the
Prospectuses or other materials, if any, permitted by the 1933 Act or by
the 1933 Act Regulations and approved by the Lead Manager.
(b) OFFICER'S CERTIFICATES. Any certificate signed by any officer of Dura
or any Subsidiary or SDC II, delivered to the Global Coordinator, the Lead
Manager or to counsel for the Managers shall be deemed a representation and
warranty by Dura or SDC II, as the case may be, to each Manager as to the
matters covered thereby.
SECTION 2. SALE AND DELIVERY TO MANAGERS; CLOSING.
(a) INITIAL INTERNATIONAL UNITS. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Companies, severally and not jointly, agree to sell to each Manager,
and each Manager, severally and not jointly, agrees to purchase from the
Companies, at the price per Unit set forth in Schedule B, the number of Initial
International Units set forth in Schedule A opposite the name of such Manager,
plus any additional number of Initial International Units that such Manager may
become obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) INTERNATIONAL OPTION UNITS. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Companies, acting severally and not jointly,
hereby grant an option to the Managers, severally and not jointly, to purchase
up to an additional 140,625 Units at the same price per Unit set forth in
Schedule B for the Initial International Units. The option hereby granted will
expire 30 days after the date hereof and may be exercised in whole or in part
from time to time only for the purpose of covering over-allotments which may be
made in connection with the offering and distribution of the Initial
International Units upon notice by the Global Coordinator to the Companies
setting forth the number of International Option Units as to which the several
Managers are then exercising the option and the time and date of payment and
delivery for such International Option Units. Any such time and date of
delivery (a "Date of Delivery") shall be determined by the Global Coordinator,
but shall not be later than seven full business days after the exercise of said
option, nor in any event prior to the Closing Time, as hereinafter defined. If
the option is exercised as to all or any portion of the International Option
Units, each of the Managers, acting severally and not jointly, will purchase
that proportion of the total number of International Option Units then being
purchased which the number of Initial International Units
17
set forth in Schedule A opposite the name of such Manager bears to the total
number of Initial International Units, subject in each case to such
adjustments as the Global Coordinator in its discretion shall make to
eliminate any sales or purchases of fractional Units.
(c) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Initial U.S. Units shall be made at the offices of
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as shall be agreed upon by the Global
Coordinator and the Companies, at 7:00 A.M. (California time) on the third
(fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given day)
business day after the date hereof (unless postponed in accordance with the
provisions of Section 10), or such other time not later than ten business days
after such date as shall be agreed upon by the Global Coordinator and the
Companies (such time and date of payment and delivery being herein called
"Closing Time").
In addition, in the event that any or all of the International Option Units
are purchased by the Managers, payment of the purchase price for, and delivery
of certificates for, such International Option Units shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Global Coordinator and the Companies, on each Date of Delivery as specified in
the notice from the Global Coordinator to the Companies.
Payment shall be made to the Companies by wire transfer of immediately
available funds to a bank account designated by the Companies, against
delivery to the Lead Manager of certificates for the respective accounts of
the Managers of certificates for the International Units to be purchased by
them. It is understood that each Manager has authorized the Lead Manager,
for its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Initial International Units and the International
Option Units, if any, that it has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇,
individually and not as representative of the Managers, may (but shall not be
obligated to) make payment of the purchase price for the Initial
International Units or the International Option Units, if any, to be
purchased by any Manager whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Manager from its obligations hereunder.
(d) DENOMINATIONS; REGISTRATION. Certificates for the Initial
International Units and the International Option Units, if any, shall be in such
denominations and registered in such names as the Lead Manager may request in
writing at least one full business day before the Closing Time or the relevant
Date of Delivery, as the case may be. The certificates for the Initial
International Units and the International Option Units, if any, will be made
available for examination and packaging by the Managers in The City of New York
not later than 10:00 A.M. (Eastern time) on the business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. COVENANTS OF THE COMPANIES. Each of the Companies covenants
with each Manager as follows:
18
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS.
The Companies, subject to Section 3(b), will comply with the requirements
of Rule 430A or Rule 434, as applicable, and will notify the Global
Coordinator immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectuses or any amended
Prospectuses shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to
the Prospectuses or for additional information and (iv) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the qualification of
the Units for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. The Companies
will promptly effect the filings necessary pursuant to Rule 424(b) and will
take such steps as they deem necessary to ascertain promptly whether the
form of prospectus transmitted for filing under Rule 424(b) was received
for filing by the Commission and, in the event that it was not, will
promptly file such prospectus. The Companies will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) FILING OF AMENDMENTS. The Companies will give the Global
Coordinator notice of their intention to file or prepare any amendment to
the Registration Statement (including any filing under Rule 462(b)), any
Term Sheet or any amendment, supplement or revision to either the
prospectus included in the Registration Statement at the time it became
effective or to the Prospectuses, whether pursuant to the 1933 Act, the
1934 Act or otherwise, will furnish the Global Coordinator with copies of
any such documents a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file or use any such
document to which the Global Coordinator or counsel for the Managers shall
object.
(c) DELIVERY OF REGISTRATION STATEMENT. The Companies have furnished
or will deliver to the Lead Manager and counsel for the Managers, without
charge, signed copies of the Registration Statement as originally filed and
of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to
be incorporated by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the Lead Manager, without
charge, a conformed copy of the Registration Statement as originally filed
and of each amendment thereto (without exhibits) for each of the Managers.
The copies of the Registration Statement and each amendment thereto
furnished to the Managers will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T.
(d) DELIVERY OF PROSPECTUSES. The Companies have delivered to each
Manager, without charge, as many copies of each preliminary prospectus as
such
19
Manager reasonably requested, and the Companies hereby consent to the use
of such copies for purposes permitted by the 1933 Act. The Companies
will furnish to each Manager, without charge, during the period when the
International Prospectus is required to be delivered under the 1933 Act
or the 1934 Act, such number of copies of the International Prospectus
(as amended or supplemented) as such Manager may reasonably request. The
International Prospectus and any amendments or supplements thereto
furnished to the Managers will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Companies will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
the 1934 Act Regulations so as to permit the completion of the distribution
of the Units as contemplated in this Agreement, the U.S. Purchase Agreement
and in the Prospectuses. If at any time when a prospectus is required by
the 1933 Act to be delivered in connection with sales of the Units, any
event shall occur or condition shall exist as a result of which it is
necessary, in the opinion of counsel for the Managers or for the Companies,
to amend the Registration Statement or amend or supplement any Prospectus
in order that the Prospectuses will not include any untrue statements of a
material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances
existing at the time any such Prospectus is delivered to a purchaser, or if
it shall be necessary, in the opinion of such counsel, at any such time to
amend the Registration Statement or amend or supplement any Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Companies will promptly prepare and file with the
Commission, subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectuses comply with such requirements, and the
Companies will furnish to the Managers such number of copies of such
amendment or supplement as the Managers may reasonably request.
(f) RULE 158. The Companies will timely file such reports pursuant
to the 1934 Act as are necessary in order to make generally available to
their securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(g) USE OF PROCEEDS. SDC II will use the net proceeds received by it
from the sale of the Units in the manner specified in the Prospectuses
under "Use of Proceeds."
(h) LISTING. The Companies will use their best efforts to effect and
maintain the quotation of the Units on the Nasdaq National Market and will
file with the Nasdaq National Market all documents and notices required by
the Nasdaq National Market of companies that have securities that are
traded in the over-the-counter market and quotations for which are reported
by the Nasdaq National Market.
20
(i) RESTRICTION ON SALE OF DURA COMMON STOCK. During a period of 90
days from the date of the Prospectuses, Dura will not, without the prior
written consent of the Global Coordinator, (i) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase or otherwise transfer or dispose of any shares of
Dura Common Stock or any securities convertible into or exercisable or
exchangeable for shares of Dura Common Stock or file any registration
statement under the 1933 Act with respect to any of the foregoing or
(ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of Dura Common Stock whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by
delivery of shares of Dura Common Stock or such other securities, in cash
or otherwise. The foregoing sentence shall not apply to (A) the Units to
be sold hereunder or under the U.S. Purchase Agreement, (B) any shares of
Dura Common Stock issued by Dura upon the exercise of an option or warrant
or the conversion of a security outstanding on the date hereof and referred
to in, or incorporated by reference into, the Prospectuses, (C) any shares
of Dura Common Stock issued or options to purchase Dura Common Stock
granted pursuant to existing employee benefit plans of Dura referred to in,
or incorporated by reference into, the Prospectuses or (D) any shares of
Dura Common Stock issued to stockholders of SDC in connection with the
acquisition of all of the outstanding stock of SDC pursuant to a
registration statement on Form S-3 filed with the Commission on October 15,
1997, as amended (No. 333-37955).
(j) REPORTING REQUIREMENTS. The Companies, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act
and the 1934 Act Regulations.
SECTION 4. PAYMENT OF EXPENSES.
(a) EXPENSES. SDC II will pay or cause to be paid all expenses incident
to the performance of the Companies' obligations under this Agreement,
including (i) the preparation, printing and filing of the Registration
Statement (including financial statements and exhibits) as originally filed
and of each amendment thereto, (ii) the preparation, printing and delivery to
the Underwriters of this Agreement, any Agreement among Underwriters, the
Warrant Agreement and such other documents as may be required in connection
with the offering, purchase, sale, issuance or delivery of the Units, (iii)
the preparation, issuance and delivery of the certificates for the Units to
the Underwriters, including any stock or other transfer taxes and any stamp
or other duties payable upon the sale, issuance or delivery of the Units to
the Underwriters and the transfer of the Units between the Managers and the
U.S. Underwriters, (iv) the fees and disbursements of the Companies' counsel,
accountants and other advisors, (v) the fees and disbursements of SDC's
counsel, accountants and other advisors, (vi) the printing and delivery to
the Underwriters of copies of each preliminary prospectus, any Term Sheets
and of the Prospectuses and any amendments or supplements thereto, (vii) the
preparation, printing and
21
delivery to the Underwriters of copies of the Blue Sky Survey and any
supplement thereto, (viii) the fees and expenses of any transfer agent or
registrar for the Units, (ix) all charges of the Warrant Agent, (x) the
filing fees incident to, and the reasonable fees and disbursements of counsel
to the Underwriters in connection with, the review by the National
Association of Securities Dealers, Inc. (the "NASD") of the terms of the sale
of the Units, and (xi) the fees and expenses incurred in connection with the
listing of the Units, the SDC II Common Stock and the Warrants on the Nasdaq
National Market.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the Lead
Manager in accordance with the provisions of Section 5, Section 9(a)(i) or
Section 11, the Companies shall reimburse the Managers for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Managers.
SECTION 5. CONDITIONS OF MANAGERS' OBLIGATIONS. The obligations of the
several Managers hereunder are subject to the accuracy of the representations
and warranties of the Companies contained in Section 1 hereof or in certificates
of any officer of the Companies or any Subsidiary delivered pursuant to the
provisions hereof, to the performance by the Companies of their covenants and
other obligations hereunder, and to the following further conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement, including any Rule 462(b) Registration Statement has become
effective and at Closing Time no stop order suspending the effectiveness
of the Registration Statement shall have been issued under the 1933 Act
or proceedings therefor initiated or threatened by the Commission, and
any request on the part of the Commission for additional information
shall have been complied with to the reasonable satisfaction of counsel
to the Managers. A prospectus containing the Rule 430A Information shall
have been filed with the Commission in accordance with Rule 424(b) (or a
post-effective amendment providing such information shall have been filed
and declared effective in accordance with the requirements of Rule 430A)
or, if the Companies have elected to rely upon Rule 434, a Term Sheet
shall have been filed with the Commission in accordance with Rule 424(b).
(b) OPINION OF COUNSEL FOR THE COMPANIES. At Closing Time, the Lead
Manager shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for Dura and SDC II, in
form and substance satisfactory to counsel for the Managers, and, to the
extent provided in Exhibit A hereto, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General Counsel
for Dura, together with signed or reproduced copies of such letters for the
other Manager, to the effect set forth in Exhibit A hereto.
(c) OPINION OF PATENT COUNSEL FOR THE COMPANIES. At Closing Time,
the Lead Manager shall have received the favorable opinion, dated as of
Closing Time, of Lyon & Lyon LLP (solely with respect to patents concerning
the ▇▇▇▇▇▇ products), patent counsel for the Companies, in form and
substance satisfactory to counsel for the Managers, together with signed or
reproduced copies of such letter for the other Manager, to the effect set
forth in Exhibit B hereto.
22
(d) OPINION OF REGULATORY COUNSEL FOR THE COMPANIES. At Closing
Time, the Lead Manager shall have received the favorable opinion, dated as
of Closing Time, of Kleinfeld, ▇▇▇▇▇▇ and ▇▇▇▇▇▇, regulatory counsel for
the Companies, in form and substance satisfactory to counsel for the
Managers, together with signed or reproduced copies of such letter for the
other Manager, to the effect set forth in Exhibit C hereto.
(e) OPINION OF COUNSEL FOR THE MANAGERS. At Closing Time, the Lead
Manager shall have received the favorable opinion, dated as of Closing
Time, of Shearman & Sterling, counsel for the Managers, together with
signed or reproduced copies of such letter for the other Manager, with
respect to issuance and sale of the Units and other related matters as the
Representatives may reasonably require. In giving such opinion, such counsel
may rely, as to all matters governed by the laws of jurisdictions other than
the law of the State of New York and the federal law of the United States
upon the opinions of counsel satisfactory to the Lead Manager. Such counsel
may also state that, insofar as such opinion involves factual matters, they
have relied, to the extent they deem proper, upon certificates of officers
of the Companies and the Subsidiaries and certificates of public officials.
(f) OFFICERS' CERTIFICATE. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectuses, any Dura Material Adverse Effect,
SDC Material Adverse Effect or SDC II Material Adverse Effect, whether or
not arising in the ordinary course of business, and the Lead Manager shall
have received a certificate of the President or a Vice President of Dura
and of the chief financial or chief accounting officer of Dura, and the
President or a Vice President of SDC II and of the chief financial or chief
accounting officer of SDC II, dated as of the Closing Time, to the effect
that (i) there has been no such material adverse effect, (ii) the
representations and warranties of Dura and SDC II set forth in Section 1(a)
hereof are true and correct with the same force and effect as though
expressly made at and as of the Closing Time, (iii) each of Dura and SDC II
shall have complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to Closing Time, and (iv) no
stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or are
pending or are contemplated by the Commission.
(g) ACCOUNTANTS' COMFORT LETTER. At the time of the execution of
this Agreement, the Lead Manager shall have received from Deloitte & Touche
LLP a letter, dated such date, in form and substance satisfactory to the
Lead Manager, together with signed or reproduced copies of such letter for
the other Manager, containing statements
23
and information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and
the Prospectuses.
(h) BRING-DOWN COMFORT LETTER. At Closing Time, the Lead Manager
shall have received from Deloitte & Touche LLP a letter, dated as of
Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (g) of this Section 5, except that
the specified date referred to shall be a date not more than three business
days prior to Closing Time.
(i) APPROVAL OF LISTING. At Closing Time, the Units shall have been
approved for inclusion in the Nasdaq National Market, subject only to
official notice of issuance.
(j) NO OBJECTION. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(k) LOCK-UP AGREEMENTS. At the date of this Agreement, the Managers
shall have received an agreement substantially in the form of Exhibit D
hereto signed by the persons listed on Schedule C hereto.
(l) PURCHASE OF INITIAL U.S. UNITS. Contemporaneously with the
purchase by the Managers of the Initial International Units under this
Agreement, the U.S. Underwriters shall have purchased the Initial U.S.
Units under the U.S. Purchase Agreement.
(m) CONDITIONS TO PURCHASE OF INTERNATIONAL OPTION UNITS. In the
event that the Managers exercise their option provided in Section 2(b)
hereof to purchase all or any portion of the International Option Units,
the representations and warranties of the Companies contained herein and
the statements in any certificates furnished by the Companies and any
Subsidiary hereunder shall be true and correct as of each Date of Delivery
and, at the relevant Date of Delivery, the Lead Manager shall have
received:
(i) OFFICERS' CERTIFICATE. A certificate, dated such Date of
Delivery, of the President or a Vice President of each of the
Companies and of the chief financial or chief accounting officer of
each of the Companies confirming that the certificate delivered at the
Closing Time pursuant to Section 5(f) remains true and correct as of
such Date of Delivery.
(ii) OPINIONS OF COUNSEL FOR THE COMPANIES. The favorable
opinions of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the
Companies, Lyon & Lyon, patent counsel for the Companies, and
Kleinfeld, ▇▇▇▇▇▇ and ▇▇▇▇▇▇, regulatory counsel for the Companies,
each in form and substance satisfactory to counsel for the Managers,
dated such Date of Delivery, relating to the International Option
Units to be purchased on such Date of Delivery and otherwise to the
same effect as the opinions required by Sections 5(b), 5(c) and 5(d).
(iii) OPINION OF COUNSEL FOR THE MANAGERS. The favorable opinion
of Shearman & Sterling, counsel for the Managers, dated such Date of
Delivery, relating to the International Option
24
Units to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(e).
(iv) BRING-DOWN COMFORT LETTER. A letter from Deloitte &
Touche LLP, in form and substance satisfactory to the Lead Manager and
dated such Date of Delivery, substantially in the same form and
substance as the letter furnished to the Lead Manager pursuant to
Section 5(h), except that the "specified date" in the letter furnished
pursuant to this paragraph shall be a date not more than five days
prior to such Date of Delivery.
(n) ADDITIONAL DOCUMENTS. At Closing Time and at each Date of
Delivery, counsel for the Managers shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them
to pass upon the issuance and sale of the Units as herein contemplated, or
in order to evidence the accuracy of any of the representations or
warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Companies in connection with the issuance
and sale of the Units as herein contemplated shall be reasonably
satisfactory in form and substance to the Managers and counsel for the
Managers.
(o) TERMINATION OF AGREEMENT. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the purchase
of International Option Units, on a Date of Delivery which is after the
Closing Time, the obligations of the Managers to purchase the relevant
International Option Units, may be terminated by the Lead Manager by notice
to the Companies at any time at or prior to Closing Time or such Date of
Delivery, as the case may be, and such termination shall be without
liability of any party to any other party except as provided in Section 4
and except that Sections 1, 6, 7 and 8 shall survive any such termination
and remain in full force and effect.
SECTION 6. INDEMNIFICATION.
(a) INDEMNIFICATION OF MANAGERS. The Companies, jointly and severally,
agree to indemnify and hold harmless each Manager and each person, if any, who
controls any Manager within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or the omission or
25
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact included in any preliminary prospectus or the Prospectuses
(or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Companies; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇ ▇▇▇▇▇), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Companies by
any Manager through the Lead Manager expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
International Prospectus (or any amendment or supplement thereto).
(b) INDEMNIFICATION OF THE COMPANIES, DIRECTORS AND OFFICERS. Each
Manager severally agrees to indemnify and hold harmless the Companies, their
directors, each of their officers who signed the Registration Statement, and
each person, if any, who controls either of the Companies within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section 6, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions, made
in the Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or any preliminary
international prospectus or the International Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Companies by such Manager through the Lead Manager expressly
for use in the Registration Statement (or any amendment thereto) or such
preliminary prospectus or the International Prospectus (or any amendment or
supplement thereto).
26
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Companies. An indemnifying party
may participate at its own expense in the defense of any such action; PROVIDED,
HOWEVER, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. CONTRIBUTION. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute
to the aggregate amount of such losses, liabilities, claims, damages and
expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Companies on the one hand and the Managers on the other hand from the
offering of the Units pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion
as is appropriate
27
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Companies on the one hand and of the Managers
on the other hand in connection with the statements or omissions that
resulted in such losses, liabilities, claims, damages or expenses, as well as
any other relevant equitable considerations.
The relative benefits received by the Companies on the one hand and the
Managers on the other hand in connection with the offering of the Units
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Units pursuant
to this Agreement (before deducting expenses) received by the Companies and
the total underwriting discount received by the Managers, in each case as set
forth on the cover of the International Prospectus, or, if Rule 434 is used,
the corresponding location on the Term Sheet, bear to the aggregate initial
public offering price of the Units as set forth on such cover.
The relative fault of the Companies on the one hand and the Managers on
the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Companies or by the Managers and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Companies and the Managers agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Managers were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no U.S. Underwriter
shall be required to contribute any amount in excess of the amount by which
the total price at which the Units underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which
such Manager has otherwise been required to pay by reason of any such untrue
or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls a Manager
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as such Manager, and each director of
each of the Companies, each officer of
28
each of the Companies who signed the Registration Statement, and each person,
if any, who controls the Companies within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Companies. The Managers' respective obligations to
contribute pursuant to this Section are several in proportion to the number
of Initial International Units set forth opposite their respective names in
Schedule A hereto and not joint.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Companies or any Subsidiary
submitted pursuant hereto, shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of any Manager
or controlling person, or by or on behalf of the Companies, and shall survive
delivery of the Units to the Managers.
SECTION 9. TERMINATION OF AGREEMENT.
(a) TERMINATION; GENERAL. The Lead Manager may terminate this
Agreement, by notice to the Companies, at any time at or prior to Closing
Time (i) if there has been, since the time of execution of this Agreement or
since the respective dates as of which information is given in the
International Prospectus, any Dura Material Adverse Effect or SDC II Material
Adverse Effect, whether or not arising in the ordinary course of business, or
(ii) if there has occurred any material adverse change in the financial
markets in the United States or the international financial markets, any
outbreak of hostilities or escalation thereof or other calamity or crisis or
any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Lead Manager,
impracticable to market the Units or to enforce contracts for the sale of the
Units, or (iii) if trading in any securities of the Companies has been
suspended or materially limited by the Commission or the Nasdaq National
Market, or if trading generally on the American Stock Exchange or the New
York Stock Exchange or in the Nasdaq National Market has been suspended or
materially limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or
by such system or by order of the Commission, the NASD or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either Federal or New York or California authorities.
(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section 9, such termination shall be without liability of any party to any
other party except as provided in Section 4 hereof, and provided further that
Sections 1, 6, 7 and 8 shall survive such termination and remain in full
force and effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE MANAGERS. If one or more of
the Managers shall fail at Closing Time or a Date of Delivery to purchase the
Units which it or they are obligated to purchase under this Agreement (the
"Defaulted Units"), the Lead Manager shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the
29
non-defaulting Managers, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Units in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Lead Manager shall not
have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Units does not exceed 10% of the
number of Units to be purchased on such date, the non-defaulting Managers
shall be obligated, each severally and not jointly, to purchase the full
amount thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all
non-defaulting Managers, or
(b) if the number of Defaulted Units exceeds 10% of the number of
Units to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after Closing Time, the obligation of the
Managers to purchase and of the Companies to sell the International Option
Units to be purchased and sold on such Date of Delivery shall terminate
without liability on the part of any non-defaulting Manager.
No action taken pursuant to this Section 10 shall relieve any defaulting
Manager from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after
Closing Time, which does not result in a termination of the obligation of the
Managers to purchase and the Companies to sell the relevant International
Option Units, as the case may be, either the Managers or the Companies shall
have the right to postpone Closing Time or the relevant Date of Delivery, as
the case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectuses or in any
other documents or arrangements. As used herein, the term "Manager" includes
any person substituted for a Manager under this Section.
SECTION 11. DEFAULT BY THE COMPANIES. If the Companies shall fail at
Closing Time or at the Date of Delivery to sell the number of Units that they
are obligated to sell hereunder, then this Agreement shall terminate without
any liability on the part of any nondefaulting party; PROVIDED, HOWEVER, that
the provisions of Sections 1, 4, 6, 7 and 8 shall remain in full force and
effect. No action taken pursuant to this Section 11 shall relieve the
Companies from liability, if any, in respect of such default.
SECTION 12. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Managers shall be directed to the Lead Manager at Ropemaker Place, ▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ attention of _________; notices
to either of the Companies shall be directed to them at:
Dura Pharmaceuticals, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇- 4204
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ "▇" ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
SECTION 13. PARTIES. This Agreement shall inure to the benefit of and
be binding upon the Managers and the Companies and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Managers and the Companies and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and
7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the Managers and the
Companies and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Units from
any Manager shall be deemed to be a successor by reason merely of such
purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT
AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
SECTION 15. EFFECT OF HEADINGS. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
31
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to each of Dura and SDC II a counterpart
hereof, whereupon this instrument, along with all counterparts, will become a
binding agreement among the Managers, Dura and SDC II in accordance with its
terms.
Very truly yours,
DURA PHARMACEUTICALS, INC.
By:
-------------------------
Title:
▇▇▇▇▇▇ DEVELOPMENT CORPORATION II, INC.
By:
-------------------------
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
By:
-------------------------
Authorized Signatory
32
SCHEDULE A
Number
of Initial
International
Name of Manager Units
--------------- -----
▇▇▇▇▇▇▇ ▇▇▇▇▇ International . . . . . . . . . . . . . . . .
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation . . . .
------------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . ------------
------------
Sch A-1
SCHEDULE B
▇▇▇▇▇▇ DEVELOPMENT CORPORATION II, INC.
DURA PHARMACEUTICALS, INC.
937,500 Units
Each Unit Consisting of
One Share of Callable Common Stock of ▇▇▇▇▇▇ Development Corporation II, Inc.
and One Warrant to Purchase
One-Fourth of One Share of Common Stock of Dura Pharmaceuticals, Inc.
1. The initial public offering price per International Unit, determined
as provided in Section 2, shall be $______.
2. The purchase price per International Unit to be paid by the Managers
shall be $______, being an amount equal to the initial public offering price
set forth above less $______ per International Unit.
3. The exercise price of the Warrants shall be $_______ per share of Dura
Common Stock.
Sch B-1
SCHEDULE C
[List of persons and entities
subject to lock-up]
EXHIBIT A
FORM OF OPINION OF COUNSEL FOR DURA, SDC II and SDC
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
[For purposes of this opinion, to be delivered at the Closing Time, the
term "Subsidiaries" includes SDC.]
(i) Each of Dura and SDC II has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware.
(ii) Each of Dura and SDC II has full corporate power and authority to
own or lease its properties and conduct its business as described in the
Registration Statement and Prospectuses and, to enter into and perform its
obligations under the U.S. Purchase Agreement and the International Purchase
Agreement.
(iii) Each of Dura and SDC II is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or leasing
of property or the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a Dura Material Adverse
Effect or a SDC II Material Adverse Effect, as the case may be (which opinion
as to Dura may be given by the General Counsel of Dura).
(iv) The authorized capital stock of Dura conforms as to legal matters in
all material respects to the description thereof contained in the Registration
Statement and Prospectuses. The authorized and outstanding shares of capital
stock of Dura are as set forth under the caption "Capitalization" and have
been duly and validly authorized and issued, are fully paid and non-assessable,
and are not subject to any preemptive rights (the opinion called for by the
last sentence of this paragraph (iv) may be given by the General Counsel of
Dura).
(v) The authorized, capital stock of SDC II conforms as to legal matters
in all material respects to the descriptions thereof contained in the
Registration Statement and Prospectuses under the caption "▇▇▇▇▇▇ Corp. II
Capital Stock".
(vi) The outstanding shares of Special Common Stock of SDC II are as set
forth under the caption "Capitalization" and have been duly and validly
authorized and issued, are, to our knowledge, fully paid and nonassessable, and
are not subject to any preemptive rights.
(vii) The Warrant Agreement has been duly authorized, executed and
delivered by Dura and constitutes a legal, valid and binding obligation of
Dura, enforceable against Dura in accordance to its terms.
A-1
(viii) The issuance of the Warrants has been duly authorized by Dura and,
when duly executed, issued and delivered by Dura and countersigned by the
Warrant Agent and when payment of the purchase price for the Units has been
made, the Warrants will constitute valid and binding obligations of Dura
entitled to the benefits of the Warrant Agreement. The Warrants are not
subject to the preemptive rights of any stockholder of Dura. The Warrants
conform as to legal matters in all material respects to the description
thereof contained in the Registration Statement and the Prospectuses under
the caption "Description of the Warrants."
(ix) The shares of Dura Common Stock issuable upon exercise of the
Warrants have been duly and validly reserved for the issuance and, when and
if issued upon such exercise and upon payment of the exercise price, in
accordance with the terms of the Warrant Agreement, will be duly and validly
authorized and issued, will be fully paid and nonassessable, and will not be
subject to any preemptive or similar rights of any stockholder of Dura.
(x) The issuance of the SDC II Common Stock has been duly authorized and,
when issued and paid for as part of the Units as contemplated by the Purchase
Agreements, will be validly issued, fully paid and non-assessable. Such SDC II
Common Stock is not subject to the preemptive or similar rights of any
stockholder of SDC II.
(xi) To our knowledge, the Subsidiaries, are Dura's sole subsidiaries. Each
Subsidiary has been duly incorporated and is validly existing as a corporation
in good standing under the laws of the jurisdiction of its incorporation, has
corporate power and authority to own or lease its properties and to conduct its
business as described in the Registration Statement and Prospectuses and is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Dura Material Adverse Effect; all of the issued and outstanding
capital stock of each Subsidiary and SDC has been duly and validly authorized
and issued, are fully paid and non-assessable and, to the best of our knowledge
and information is owned by Dura free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; and none of the
outstanding shares of capital stock of any Subsidiary was issued in violation
of the preemptive rights of any securityholder of such Subsidiary (the opinion
called for by the last sentence of this paragraph (xi) may be given by the
General Counsel of Dura).
(xii) Each of the U.S. Purchase Agreement and the International Purchase
Agreement has been duly authorized, executed and delivered by Dura and SDC II.
(xiii) The Registration Statement, including any Rule 462(b) Registration
Statement, has become effective under the Act. Any required filing of the
Prospectuses pursuant to Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b). To our knowledge, no stop order
proceedings suspending the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement have been instituted or threatened or are
pending under the Act.
A-2
(xiv) All descriptions in the Prospectuses of agreements and other
instruments to which Dura, SDC II or the Subsidiaries are a party are accurate
in all material respects. We know of no agreements required to be filed or
described in the Prospectuses which are not so filed or described. To our
knowledge, no breach or default exists under any agreement or instrument to
which Dura, SDC II or any Subsidiary is a party and which is filed as an
Exhibit to the Registration Statement or incorporated by reference therein (the
opinion called for by the last two sentences of this paragraph (xiv) may be
given by the General Counsel of Dura and SDC II).
(xv) The form of certificate used to evidence the Units complies in all
material respects with all applicable statutory requirements, and the
requirements of the Nasdaq National Market.
(xvi) To our knowledge, there is no legal or governmental proceeding
pending or threatened to which Dura, any Subsidiary or SDC II is a party or
to which any of the properties of Dura, any Subsidiary or SDC II is subject
that is required to be described in the Registration Statement or the
Prospectuses and is not so described, or of any statute or regulation,
contract or other document that is required to be described in the
Registration Statement or the Prospectuses or to be filed as an exhibit to
the Registration Statement that is not described or filed as required.
(xvii) The statements in the Registration Statement under Item 14,
to the extent that such statements constitute matters of law, summaries of
documents contained therein or summaries of legal matters have been prepared
by or reviewed by us and are correct in all material respects.
(xviii) The September 30, 1997 offer and sale of 1,000 shares of SDC II
common stock with an aggregate value of $1,000 by SDC II to Dura was exempt
from the registration requirements of Section 5 of the Securities Act of 1933,
as amended, by virtue of Section 4(2) and/or Regulation D promulgated
thereunder.
(xix) None of Dura, any Subsidiary or SDC is in violation of its charter
or by-laws and no default by Dura or any subsidiary exists in the due
performance or observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument that is described or referred to
in the Registration Statement or the Prospectuses or filed or incorporated by
reference as an exhibit to the Registration Statement (which opinion as to
Dura may be given by the General Counsel of Dura).
(xx) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority
or agency, domestic or foreign, (other than under the Act and the 1933 Act
Regulations, which have been obtained, or as may be required under the
securities or blue sky laws of the various states, as to which no opinion is
requested or given) is necessary or required in connection with the due
authorization, execution and delivery of the U.S. Purchase Agreement or for the
offering, issuance, sale or delivery of the Units, the SDC II Common Stock,
the Warrants, or the Dura Common Stock issuable upon exercise of the Warrants.
(xxi) The execution, delivery by Dura of, and the performance by Dura of its
obligations under the U.S. Purchase Agreement or the International Purchase
Agreement and the Warrant Agreement and the issuance and sale of the Units
contemplated thereby will not contravene any provision of applicable law or the
certificate of incorporation or bylaws of Dura or any Subsidiaries, or, to our
knowledge, any judgment, order
A-3
or decree of any governmental body, agency or court having jurisdiction over
Dura or any of its property or any Subsidiaries or any of their property, or,
to our knowledge, constitute a breach or default or a Dura Repayment Event
(as defined in section 1(a)(xi) of the U.S. Purchase Agreement) under any
agreement or other instrument binding upon Dura or any of the Subsidiaries,
to which Dura or any of the Subsidiaries is a party and filed as an exhibit
to the Registration Statement or an Incorporated Document.
(xxii) The execution, delivery by ▇▇▇▇▇▇ ▇▇ of, and the performance by ▇▇▇▇▇▇
▇▇ of its obligations under the U.S. Purchase Agreement and the International
Purchase Agreement and the issuance and sale of the Units contemplated thereby
will not contravene any provision of applicable law or the certificate of
incorporation or bylaws of ▇▇▇▇▇▇ ▇▇, or, to our knowledge, any judgment, order
or decree of any governmental body, agency or court having jurisdiction over
▇▇▇▇▇▇ ▇▇ or any of its property, or, to our knowledge, constitute a breach or
default or a SDC II Repayment Event (as defined in section 1(a)(xii) of the U.S.
Purchase Agreement) under any agreement or other instrument binding upon
▇▇▇▇▇▇ ▇▇, to which ▇▇▇▇▇▇ ▇▇ is a party and filed as an exhibit to the
Registration Statement or an Incorporated Document.
(xxiii) Each of the Major Agreements has been duly authorized, executed and
delivered by Dura, SDC, DDSI and SDC II as applicable.
(xxiv) To our knowledge, no holders of securities of Dura have rights
against Dura which have not been waived to the registration of shares of Dura
Common Stock or other securities, because of the filing of the Registration
Statement by Dura or the offering contemplated thereby (this opinion may be
given by the general counsel of Dura).
(xxv) The Units have been duly authorized for quotation on the Nasdaq
National Market, upon notice of official issuance.
(xxvi) The statements in the Registration Statement and Prospectuses under
the caption "United States Federal Income Tax Consequences" and "United States
Taxation of Non-U.S. Persons" to the extent they constitute matters of law or
legal conclusions with respect thereto, have been prepared or reviewed by us
and are correct in all material respects.
(xxvii) Neither Dura nor SDC II is an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
1940 Act.
In addition to the foregoing, (i) we believe that each of the
Incorporated Documents (except for financial statements and schedules and
other financial data included therein or omitted therefrom, as to which no
opinion is requested or given), when they became effective or were filed with
the Commission, as the case may be, complied as to form when filed with the
Commission in all material respects with the requirements of the Act and the
1934 Act, as applicable, and the rules and regulations of the Commission
thereunder; (ii) we believe that the Registration Statement, the Prospectuses
and each amendment or supplement to the Registration Statement and
Prospectuses (except for financial statements and schedules and other
financial data included or incorporated by reference therein or omitted
therefrom, as to which no opinion is requested or given), as of their
respective effective or issue dates, complied as to form in all material
respects with the requirements of the Act and the applicable rules and
regulations of the Commission thereunder; (iii) we confirm that nothing has
come to our attention that has caused us to conclude that (except for
financial statements and schedules and other financial data included or
incorporated by reference therein or omitted therefrom, as to which we need
make no statement) the Registration Statement or any amendment thereto,
including the Rule 430A Information and Rule 434 Information (if applicable),
at the time such Registration Statement or any such amendment became
effective, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
A-4
to make the statements therein, in the lights of the circumstances under
which they were made, not misleading or that (except for financial statements
and schedules and other financial data included or incorporated by reference
therein or omitted therefrom, as to which we need make no statement) the
Prospectuses, on the date hereof, include an untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made
not misleading.
In rendering such opinion, such counsel may rely (A) upon the
opinions of Lyon & Lyon and Kleinfeld, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Esq. With respect to the matters opined upon by each, and (B), as
to matters of fact (but not as to legal conclusions), to the extent they deem
proper, on certificates of responsible officers of Dura or SDC II and public
officials. Such opinion shall be subject to standard limitations, exclusions,
qualifications and assumptions. Such opinion shall not state that it is to
be governed or qualified by, or that it is otherwise subject to, any
treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).
A-5
EXHIBIT B
EXHIBIT B
FORM OF OPINION OF PATENT COUNSEL
FOR DURA AND SDC II DELIVERED PURSUANT TO SECTION 5(C)
(i) Dura owns U.S. patents and U.S. Foreign patent applications
which are directed to ▇▇▇▇▇▇ and to certain uses of the ▇▇▇▇▇▇ product
necessary to conduct the business of Dura and ▇▇▇▇▇▇ Corp. II as described in
the Prospectuses. With regard to the business presently and as proposed to
be conducted by Dura and ▇▇▇▇▇▇ Corp. II relating to the ▇▇▇▇▇▇ product as
described in the Registration Statement and the Prospectuses, and, except as
described therein, we have not received any notice of infringement of or
conflict with, and does not otherwise know of any basis for notice of any
such infringement of or conflict with, asserted rights of others with respect
to any patents, trademarks, service marks, trade names, copyrights,
technology or know-how relating to the ▇▇▇▇▇▇ product.
(ii) To the extent that the statements relating to the ▇▇▇▇▇▇ product
contained in the Registration Statement and Prospectuses under the
subheadings "Risk Factors--Business Risks Related to ▇▇▇▇▇▇ Corp. II and
Dura--Uncertainty Regarding Patents and Proprietary Technology;
Unpredictability of Patent Protection - ▇▇▇▇▇▇ Corp. II," "Risk Factors
- Business Risks Related to ▇▇▇▇▇▇ Corp. II and Dura" and the first paragraph
of "Business of ▇▇▇▇▇▇ Corp. II -- Patents" refer to opinions of counsel or
matters of law, patents or patent applications or purport to summarize the
status of litigation or the provisions of statutes, regulations, contracts,
agreements or other documents, such statements (A) have been prepared or
reviewed by us and accurately reflect the status of any such patent
applications, litigation, the provisions purported to be summarized and any
of our opinions and (B) do not contain any untrue statements of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
EXHIBIT C
FORM OF OPINION OF REGULATORY COUNSEL
FOR DURA AND SDC II
TO BE DELIVERED PURSUANT
TO SECTION 5(d)
(i) The descriptions in the Registration Statement of the statutes,
regulations and legal or governmental proceedings or procedures relating to
the FDA and the approval process relating to the products of Dura and SDC II
are accurate in all material respects and are a fair summary of those
statutes, regulations, proceedings or procedures.
(ii) Nothing has come to our attention that leads us to believe that the
descriptions of federal laws, regulations or rules relating to the
manufacture or sale of Dura's products and the approval process relating
thereto contained in the Registration Statement and the Prospectuses,
including, without limitation, the portions of the Registration Statement and
Prospectuses entitled "Risk Factors - Business Risks Related to ▇▇▇▇▇▇ Corp,
II and Dura - Government Regulation; No Assurance of FDA Approval," and
"Business of Dura - Government Regulation," contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statement therein not misleading.
EXHIBIT D
October , 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
as Representatives of the several
Underwriters to be named in the
within mentioned Purchase Agreement
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Proposed Public Offering by Dura Pharmaceuticals, Inc. and ▇▇▇▇▇▇
Development Corporation II
Ladies and Gentlemen:
The undersigned, a stockholder and/or officer and/or director of Dura
Pharmaceuticals, Inc. ("Dura") understands that ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. ("▇▇▇▇▇▇▇
▇▇▇▇▇") and ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ ("DLJ") propose to enter into a
Purchase Agreement (the "Purchase Agreement") with Dura and ▇▇▇▇▇▇ Development
Corporation II ("SDC II") that will provide for the public offering of units
comprised of the common stock of SDC II and warrants to purchase Dura's common
stock (the "Securities"). In recognition of the benefit that such an offering
will confer upon the undersigned as a stockholder and/or officer and/or director
of Dura, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees with each
underwriter to be named in the Purchase Agreement that, during a period of
ninety (90) days from the date of the Purchase Agreement, the undersigned will
not, without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly,
(i) sell, offer to sell, pledge, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option, right or
warrant for the sale of, or otherwise dispose of or transfer any shares of
Dura's common stock (the "Dura Common Stock"), or any securities convertible
into or exchangeable or exercisable for Dura Common Stock, whether now owned or
hereafter acquired by the undersigned, or with respect to which the undersigned
has or hereafter acquires the power of disposition, or file, participate in, or
request the filing of any registration statement under the Securities Act of
1933, as amended, with respect to any of the foregoing or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part,
directly or indirectly, the economic consequence of ownership of Dura
Common Stock, whether any such swap or transaction is to be settled by delivery
of Dura Common Stock or other securities, in cash or otherwise.
Very truly yours,
Signature:
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Print Name:
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