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XXXXXX DEVELOPMENT CORPORATION II, INC.
(a Delaware corporation)
DURA PHARMACEUTICALS, INC.
(a Delaware corporation)
3,750,000 Units
Each Unit Consisting of
One Share of Callable Common Stock of Xxxxxx Development Corporation II, Inc.
and One Warrant to Purchase
One-Fourth of One Share of Common Stock of Dura Pharmaceuticals, Inc.
U.S. PURCHASE AGREEMENT
Dated: December __, 1997
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TABLE OF CONTENTS
SECTION 1. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 5
(a) Representations and Warranties by the Companies. . . . . . . . . 5
(i) Compliance with Registration Requirements. . . . . . 5
(ii) Incorporated Documents. . . . . . . . . . . . . . . . . . 6
(iii) Independent Accountants . . . . . . . . . . . . . . . . . 6
(iv) Financial Statements. . . . . . . . . . . . . . . . . . . 6
(v) No Material Adverse Change in Business. . . . . . . . . . 7
(vi) Good Standing of the Companies. . . . . . . . . . . . . . 8
(vii) Good Standing of Subsidiaries . . . . . . . . . . . . . . 8
(viii) Capitalization. . . . . . . . . . . . . . . . . . . . . . 9
(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. . . . . . . . . . . . . . . . . 13
(xv) Absence of Proceedings. . . . . . . . . . . . . . . . . . 13
(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 . . . . . . . . . . . . . . . . . . . . 15
(xxi) Compliance with Cuba Act. . . . . . . . . . . . . . . . . 15
(xxii) Investment Company Act. . . . . . . . . . . . . . . . . . 15
(xxiii) Environmental Laws. . . . . . . . . . . . . . . . . . . . 15
(xxiv) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(xxv) Insurance . . . . . . . . . . . . . . . . . . . . . . . . 16
(xxvi) Accounting Controls . . . . . . . . . . . . . . . . . . . 16
(xxvii) Lock-up Agreements. . . . . . . . . . . . . . . . . . . . 16
(xxviii)Affiliate Transactions. . . . . . . . . . . . . . . . . . 17
(xxix) Distribution of Prospectuses. . . . . . . . . . . . . . 17
(b) Officer's Certificates. . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing . . . . . . . . . 17
(a) Initial U.S. Units. . . . . . . . . . . . . . . . . . . . . . . . 17
(b) U.S. Option Units . . . . . . . . . . . . . . . . . . . . . . . . 17
(c) Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(d) Denominations; Registration . . . . . . . . . . . . . . . . . . . 18
SECTION 3. Covenants of the Companies. . . . . . . . . . . . . . . . . . . . 19
(a) Compliance with Securities Regulations and Commission
Requests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(b) Filing of Amendments. . . . . . . . . . . . . . . . . . . . . . . 19
(c) Delivery of Registration Statement. . . . . . . . . . . . . . . . 19
(d) Delivery of Prospectuses. . . . . . . . . . . . . . . . . . . . . 20
i
(e) Continued Compliance with Securities Laws . . . . . . . . . . . . 20
(f) Rule 158. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(g) Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . 21
(h) Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(i) Restriction on Sale of Dura Common Stock. . . . . . . . . . . . . 21
(j) Reporting Requirements. . . . . . . . . . . . . . . . . . . . . . 21
(k) Compliance with NASD Rules. . . . . . . . . . . . . . . . . . . . 22
SECTION 4. Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . . 22
(a) Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(b) Termination of Agreement. . . . . . . . . . . . . . . . . . . . . 22
SECTION 5. Conditions of U.S. Underwriters' Obligations. . . . . . . . . . . 23
(a) Effectiveness of Registration Statement . . . . . . . . . . . . . 23
(b) Opinion of Counsel for the Companies. . . . . . . . . . . . . . . 23
(c) Opinion of Patent Counsel for the Companies . . . . . . . . . . . 23
(d) Opinion of Regulatory Counsel for the Companies . . . . . . . . . 23
(e) Opinion of Counsel for the U.S. Underwriters. . . . . . . . . . . 23
(f) Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . 24
(g) Accountants' Comfort Letter . . . . . . . . . . . . . . . . . . . 24
(h) Bring-down Comfort Letter . . . . . . . . . . . . . . . . . . . . 24
(i) Approval of Listing . . . . . . . . . . . . . . . . . . . . . . . 25
(j) No Objection. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(k) Lock-up Agreements. . . . . . . . . . . . . . . . . . . . . . . . 25
(l) Purchase of Initial International Units . . . . . . . . . . . . . 25
(m) Conditions to Purchase of U.S. Option Units . . . . . . . . . . . 25
(i) Officers' Certificate. . . . . . . . . . . . . . . . . . . 25
(ii) Opinions of Counsel for the Companies. . . . . . . . . . . 25
(iii) Opinion of Counsel for the U.S. Underwriters . . . . . . . 25
(iv) Bring-down Comfort Letter. . . . . . . . . . . . . . . . . 26
(n) Additional Documents. . . . . . . . . . . . . . . . . . . . . . . 26
(o) Termination of Agreement. . . . . . . . . . . . . . . . . . . . . 26
SECTION 6. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 26
(a) Indemnification of U.S. Underwriters. . . . . . . . . . . . . . . 26
(b) Indemnification of the Companies, Directors and Officers. . . . . 27
(c) Actions against Parties; Notification . . . . . . . . . . . . . . 27
(d) Settlement without Consent if Failure to Reimburse. . . . . . . . 28
SECTION 7. Contribution. . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 9. Termination of Agreement. . . . . . . . . . . . . . . . . . . . . 30
(a) Termination; General. . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 1. Representations and Warranties. . . . . . . . . . . . . . . . . . 5
(a) Representations and Warranties by the Companies . . . . . . . . . 5
(i) Compliance with Registration Requirements. . . . . . . . . 5
ii
(ii) Incorporated Documents. . . . . . . . . . . . . . . . . . 6
(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. . . . . . . . . . . . . . . . . . . . . . 9
(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. . . . . . . . . . . . . . . . . . 13
(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 . . . . . . . . . . . . . . . . . . . . 15
(xxi) Compliance with Cuba Act. . . . . . . . . . . . . . . . . 15
(xxii) Investment Company Act. . . . . . . . . . . . . . . . . . 15
(xxiii) Environmental Laws. . . . . . . . . . . . . . . . . . . . 15
(xxiv) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(xxv) Insurance . . . . . . . . . . . . . . . . . . . . . . . . 16
(xxvi) Accounting Controls . . . . . . . . . . . . . . . . . . . 16
(xxvii) Lock-up Agreements. . . . . . . . . . . . . . . . . . . . 16
(xxviii)Affiliate Transactions. . . . . . . . . . . . . . . . . . 17
(xxix) Distribution of Prospectuses. . . . . . . . . . . . . . . 17
(b) Officer's Certificates. . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing . . . . . . . . . 17
(a) Initial U.S. Units. . . . . . . . . . . . . . . . . . . . . . . . 17
(b) U.S. Option Units . . . . . . . . . . . . . . . . . . . . . . . . 17
(c) Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(d) Denominations; Registration . . . . . . . . . . . . . . . . . . . 18
SECTION 3. Covenants of the Companies. . . . . . . . . . . . . . . . . . . . 19
(a) Compliance with Securities Regulations and Commission
Requests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(b) Filing of Amendments. . . . . . . . . . . . . . . . . . . . . . . 19
(c) Delivery of Registration Statement. . . . . . . . . . . . . . . . 19
(d) Delivery of Prospectuses. . . . . . . . . . . . . . . . . . . . . 20
(e) Continued Compliance with Securities Laws . . . . . . . . . . . . 20
(f) Rule 158. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(g) Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . 20
(h) Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
iii
(i) Restriction on Sale of Dura Common Stock. . . . . . . . . . . . . 21
(j) Reporting Requirements. . . . . . . . . . . . . . . . . . . . . . 21
SECTION 4. Payment of Expenses. . . . . . . . . . . . . . . . . . . . . . . 21
(a) Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(b) Termination of Agreement. . . . . . . . . . . . . . . . . . . . . 22
SECTION 5. Conditions of U.S. Underwriters' Obligations. . . . . . . . . . . 22
(a) Effectiveness of Registration Statement . . . . . . . . . . . . . 22
(b) Opinion of Counsel for the Companies. . . . . . . . . . . . . . . 22
(c) Opinion of Patent Counsel for the Companies . . . . . . . . . . . 23
(d) Opinion of Regulatory Counsel for the Companies . . . . . . . . . 23
(e) Opinion of Counsel for the U.S. Underwriters. . . . . . . . . . . 23
(f) Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . 23
(g) Accountants' Comfort Letter . . . . . . . . . . . . . . . . . . . 24
(h) Bring-down Comfort Letter . . . . . . . . . . . . . . . . . . . . 24
(i) Approval of Listing . . . . . . . . . . . . . . . . . . . . . . . 24
(j) No Objection. . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(k) Lock-up Agreements. . . . . . . . . . . . . . . . . . . . . . . . 24
(l) Purchase of Initial International Units . . . . . . . . . . . . . 24
(m) Conditions to Purchase of U.S. Option Units . . . . . . . . . . . 24
(i) Officers' Certificate. . . . . . . . . . . . . . . . . . . 24
(ii) Opinions of Counsel for the Companies. . . . . . . . . . . 25
(iii) Opinion of Counsel for the U.S. Underwriters . . . . . . . 25
(iv) Bring-down Comfort Letter. . . . . . . . . . . . . . . . . 25
(n) Additional Documents. . . . . . . . . . . . . . . . . . . . . . . 25
(o) Termination of Agreement. . . . . . . . . . . . . . . . . . . . . 25
SECTION 6. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 26
(a) Indemnification of U.S. Underwriters. . . . . . . . . . . . . . . 26
(b) Indemnification of the Companies and Directors and Officers . . . 26
(c) Actions against Parties; Notification . . . . . . . . . . . . . . 27
(d) Settlement without Consent if Failure to Reimburse. . . . . . . . 27
SECTION 7. Contribution. . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 9. Termination of Agreement. . . . . . . . . . . . . . . . . . . . . 29
(a) Termination; General. . . . . . . . . . . . . . . . . . . . . . . 29
(b) Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 10. Default by One or More of the U.S. Underwriters . . . . . . . . . 30
SECTION 11. Default by the Companies. . . . . . . . . . . . . . . . . . . . . 31
SECTION 12. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 13. Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 14. Governing Law and Time. . . . . . . . . . . . . . . . . . . . . . 32
SECTION 15. Effect of Headings. . . . . . . . . . . . . . . . . . . . . . . . 32
SCHEDULES
iv
Schedule A - List of U.S. Underwriters. . . . . . . . . . . . . . . . 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
v
XXXXXX DEVELOPMENT CORPORATION II, INC.
(a Delaware corporation)
DURA PHARMACEUTICALS, INC.
(a Delaware corporation)
3,750,000 Units
Each Unit Consisting of
One Share of Callable Common Stock of Xxxxxx Development Corporation II, Inc.
and One Warrant to Purchase
One-Fourth of One Share of Common Stock of Dura Pharmaceuticals, Inc.
U.S. PURCHASE AGREEMENT
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December __, 1997
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES CORPORATION
as U.S. Representatives of the several U.S. Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Xxxxxx 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 Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx ("Xxxxxxx
Xxxxx") and each of the other U.S. Underwriters named in
Schedule A hereto (collectively, the "U.S. Underwriters", which term shall
also include any underwriter substituted as hereinafter provided in Section
10 hereof), for whom Xxxxxxx Xxxxx and Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation are acting as representatives (in such capacity, the
"U.S. Representatives"), with respect to the issue and sale by the Companies,
and the purchase by the U.S. Underwriters, 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 B 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 U.S. Underwriters, acting
severally and not jointly, of the option described in Section 2(b) hereof to
purchase all or any part of 562,500 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 U.S.
Underwriters. The aforesaid 3,750,000 units (the "Initial U.S. Units") to be
purchased by the U.S. Underwriters and all or any part of the 562,500 units
subject to the option described in Section 2(b) (the "U.S. Option Units") are
hereinafter called, collectively, the "U.S. Units".
It is understood that the Companies concurrently are entering into an
agreement dated the date hereof (the "International Purchase Agreement")
providing for the offering by the Companies of an aggregate of 937,500 units
composed of one share of SDC II Common Stock and one Warrant (the "Initial
International Units") through arrangements with certain underwriters outside
the United States and Canada (the "Managers") for whom Xxxxxxx Xxxxx
International is acting as lead manager (the "Lead Manager") and the grant by
the Companies to the Managers, acting severally and not jointly, of an option
to purchase all or any part of the Managers' pro rata portion of up to
140,625 additional units composed of one share of SDC II Common Stock and one
Warrant solely to cover over-allotments, if any (the "International Option
Units" and, together with the U.S. Option Units, the "Option Units"). The
Initial International Units and the International Option Units are
hereinafter called the "International Units". It is understood that the
Companies are not obligated to sell and the U.S. Underwriters are not
obligated to purchase, any Initial U.S. Units unless all of the Initial
International Units are contemporaneously purchased by the Managers.
The U.S. Underwriters and the Managers 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 Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated (in such capacity, the "Global Coordinator").
2
The Companies understand that the U.S. Underwriters propose to make a
public offering of the U.S. Units as soon as the U.S. Representatives deem
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 and the U.S. Underwriters agree that up to [_______] shares
of the Initial U.S. Units to be purchased by the U.S. Underwriters (the
"Reserved Units") shall be reserved for sale by the U.S. Underwriters to
certain eligible employees and persons having business relationships with the
Companies, as part of the distribution of the U.S. Units by the U.S.
Underwriters, subject to the terms of this Agreement, the applicable rules,
regulations and interpretations of the National Association of Securities
Dealers, Inc. and all other applicable laws, rules and regulations. To the
extent that such Reserved Units are not orally confirmed for purchase by such
eligible employees and persons having business relationships with the
Companies by the end of the first business day after the date of this
Agreement, such Reserved Units may be offered to the public as part of the
public offering contemplated hereby.
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 U.S. Units (the "Form of U.S. Prospectus") and one relating
to the International Units (the "Form of International 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
3
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 U.S.
Prospectus and Form of International 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 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 U.S. Prospectus and the final Form of International 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 "U.S. Prospectus" and the "International
Prospectus", respectively, and, collectively, the "Prospectuses". If Rule
434 is relied on, the term "U.S. Prospectus" and "International Prospectus"
shall refer to the preliminary U.S. Prospectus dated December 1, 1997 and the
preliminary International 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 U.S. Prospectus, the
International 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 ("XXXXX").
Prior to the Closing Time (as defined), Dura intends to acquire all of
the outstanding capital stock of Xxxxxx 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
4
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.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANIES. The Companies
jointly and severally represent and warrant to each U.S. Underwriter 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 U.S. Underwriter, 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 U.S. 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 U.S. 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 U.S.
Prospectus made in reliance upon and in conformity with information
furnished to the Companies in writing by any U.S. Underwriter through
Xxxxxxx Xxxxx expressly for use in the Registration Statement or the U.S.
Prospectus.
5
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 XXXXX, except to the extent permitted by Regulation S-T.
(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
6
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 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
7
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 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
8
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.
(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 "Xxxxxx 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
International 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).
9
(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 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 U.S. Underwriters pursuant to this
Agreement and to the Managers pursuant to the International 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 International 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 U.S. Underwriters
pursuant to this Agreement and to the Managers pursuant to the
International 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 International 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
10
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
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
International 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 International 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 International 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
11
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 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 International
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 International 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
12
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.
(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
International 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
13
with Dura's or such Subsidiary's business may infringe any patent,
trademark, service xxxx, 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 (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 International 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 International 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
14
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.
(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,
15
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 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 U.S. Underwriters the agreements, in the form of Exhibit D hereto,
of the persons and
16
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 Xxxxxxx Xxxxx, 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, 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 U.S. Representatives.
(b) OFFICER'S CERTIFICATES. Any certificate signed by any officer of Dura
or any Subsidiary or SDC II, delivered to the Global Coordinator, the U.S.
Representatives or to counsel for the U.S. Underwriters shall be deemed a
representation and warranty by Dura or SDC II, as the case may be, to each U.S.
Underwriter as to the matters covered thereby.
SECTION 2. SALE AND DELIVERY TO U.S. UNDERWRITERS; CLOSING.
(a) INITIAL U.S. 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 U.S.
Underwriter, and each U.S. Underwriter, severally and not jointly, agrees to
purchase from the Companies, at the price per Unit set forth in Schedule B, the
number of Initial U.S. Units set forth in Schedule A opposite the name of such
U.S. Underwriter, plus any additional number of Initial U.S. Units that such
U.S. Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) U.S. 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 U.S. Underwriters, severally and not jointly, to purchase up to an
additional 562,500 Units at the same price per Unit set forth in Schedule B for
the Initial U.S. 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
17
covering over-allotments which may be made in connection with the offering
and distribution of the Initial U.S. Units upon notice by the Global
Coordinator to the Companies setting forth the number of U.S. Option Units as
to which the several U.S. Underwriters are then exercising the option and the
time and date of payment and delivery for such U.S. 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 U.S. Option Units, each of the U.S. Underwriters, acting
severally and not jointly, will purchase that proportion of the total number
of U.S. Option Units then being purchased which the number of Initial U.S.
Units set forth in Schedule A opposite the name of such U.S. Underwriter
bears to the total number of Initial U.S. 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
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, 000 Xxxx X Xxxxxx, Xxxxx 0000, Xxx Xxxxx,
Xxxxxxxxxx 00000, 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 U.S. Option Units are
purchased by the U.S. Underwriters, payment of the purchase price for, and
delivery of certificates for, such U.S. 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 U.S. Representatives of certificates for the respective accounts of the
U.S. Underwriters of certificates for the U.S. Units to be purchased by them.
It is understood that each U.S. Underwriter has authorized the U.S.
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Initial U.S. Units and the U.S. Option
Units, if any, that it has agreed to purchase. Xxxxxxx Xxxxx, individually and
not as representative of the U.S. Underwriters, may (but shall not be obligated
to) make payment of the purchase price for the Initial U.S. Units or the U.S.
Option Units, if any, to be purchased by any U.S. Underwriter 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 U.S. Underwriter from its
obligations hereunder.
(d) DENOMINATIONS; REGISTRATION. Certificates for the Initial U.S. Units
and the U.S. Option Units, if any, shall be in such denominations and registered
in such names as the U.S.
18
Representatives 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 U.S. Units and the U.S. Option Units, if any,
will be made available for examination and packaging by the U.S. Underwriters
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 U.S. Underwriter as follows:
(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 U.S.
Underwriters shall object.
(c) DELIVERY OF REGISTRATION STATEMENT. The Companies have furnished
or will deliver to the U.S. Representatives and counsel for the U.S.
Underwriters, 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)
19
and signed copies of all consents and certificates of experts, and will
also deliver to the U.S. Representatives, without charge, a conformed
copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the U.S. Underwriters.
The copies of the Registration Statement and each amendment thereto
furnished to the U.S. Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(d) DELIVERY OF PROSPECTUSES. The Companies have delivered to each
U.S. Underwriter, without charge, as many copies of each preliminary
prospectus as such U.S. Underwriter 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 U.S. Underwriter, without charge,
during the period when the U.S. Prospectus is required to be delivered
under the 1933 Act or the 1934 Act, such number of copies of the U.S.
Prospectus (as amended or supplemented) as such U.S. Underwriter may
reasonably request. The U.S. Prospectus and any amendments or supplements
thereto furnished to the U.S. Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, 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 International 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 U.S. Underwriters 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 U.S. Underwriters such number of
copies of such amendment or supplement as the U.S. Underwriters 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
20
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.
(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 International 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.
21
(k) COMPLIANCE WITH NASD RULES. The Companies hereby agree that they
will ensure that the Reserved Units will be restricted as required by the
National Association of Securities Dealers, Inc. (the "NASD") or the NASD
rules from sale, transfer, assignment, pledge or hypothecation for a period
of three months following the date of this Agreement. The U.S.
Underwriters will notify the Companies as to which persons will need to be
so restricted. At the request of the Underwriters, the Companies will
direct the transfer agent to place a stop transfer restriction upon such
securities for such period of time. Should the Companies release, or seek
to release, from such restrictions any of the Reserved Units, the Companies
agree to reimburse the U.S. Underwriters for any reasonable expenses
(including, without limitation, legal expenses) they incur in connection
with such release.
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 U.S. Underwriters and the
Managers, (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 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 NASD of the terms of the sale of the Units, (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 and (xii) all
costs and expenses of the U.S. Underwriters, including the fees and
disbursements of counsel for the U.S. Underwriters, in connection with matters
related to the Reserved Units that are designated by the Companies for sale to
employees and others having a business relationship with the Companies.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the U.S.
Representatives in accordance with the provisions of Section 5, Section 9(a)(i)
or Section 11, the Companies shall reimburse the U.S. Representatives for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the U.S. Underwriters.
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SECTION 5. CONDITIONS OF U.S. UNDERWRITERS' OBLIGATIONS. The
obligations of the several U.S. Underwriters 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 U.S.
Underwriters. 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 U.S.
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, counsel for Dura and SDC
II, in form and substance satisfactory to counsel for the U.S.
Underwriters, and, to the extent provided in Exhibit A hereto, Xxxxxxxx X.
Xxxxxxxx, General Counsel for Dura, together with signed or reproduced
copies of such letters for each of the other U.S. Underwriters, to the
effect set forth in Exhibit A hereto.
(c) OPINION OF PATENT COUNSEL FOR THE COMPANIES. At Closing Time,
the U.S. Representatives shall have received the favorable opinion, dated
as of Closing Time, of Lyon & Lyon LLP (solely with respect to patents
concerning the Xxxxxx products), patent counsel for the Companies, in form
and substance satisfactory to counsel for the U.S. Underwriters, together
with signed or reproduced copies of such letter for each of the other U.S.
Underwriters, to the effect set forth in Exhibit B hereto.
(d) OPINION OF REGULATORY COUNSEL FOR THE COMPANIES. At Closing
Time, the U.S. Representatives shall have received the favorable opinion,
dated as of Closing Time, of Kleinfeld, Xxxxxx and Xxxxxx, regulatory
counsel for the Companies, in form and substance satisfactory to counsel
for the U.S. Underwriters, together with signed or reproduced copies of
such letter for each of the other U.S. Underwriters, to the effect set
forth in Exhibit C hereto.
(e) OPINION OF COUNSEL FOR THE U.S. UNDERWRITERS. At Closing Time,
the U.S. Representatives shall have received the favorable opinion, dated
as of Closing Time, of
23
Shearman & Sterling, counsel for the U.S. Underwriters, together with signed
or reproduced copies of such letter for each of the other U.S. Underwriters,
with respect to the 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
U.S. Representatives. 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 U.S.
Representatives 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 U.S. Representatives shall have received from Deloitte
& Touche LLP a letter, dated such date, in form and substance satisfactory
to the U.S. Representatives, together with signed or reproduced copies of
such letter for each of the other U.S. Underwriters, containing statements
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 U.S.
Representatives 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
24
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 U.S.
Underwriters 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 INTERNATIONAL UNITS. Contemporaneously with
the purchase by the U.S. Underwriters of the Initial U.S. Units under this
Agreement, the Managers shall have purchased the Initial International
Units under the International Purchase Agreement.
(m) CONDITIONS TO PURCHASE OF U.S. OPTION UNITS. In the event that
the U.S. Underwriters exercise their option provided in Section 2(b) hereof
to purchase all or any portion of the U.S. 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 U.S. Representatives 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 Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, counsel for the
Companies, Lyon & Lyon, patent counsel for the Companies, and
Kleinfeld, Xxxxxx and Xxxxxx, regulatory counsel for the Companies,
each in form and substance satisfactory to counsel for the U.S.
Underwriters, dated such Date of Delivery, relating to the U.S. 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 U.S. UNDERWRITERS. The
favorable opinion of Shearman & Sterling, counsel for the U.S.
Underwriters, dated such Date of Delivery, relating to the U.S. Option
Units to be purchased on such Date
25
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 U.S. Representatives
and dated such Date of Delivery, substantially in the same form and
substance as the letter furnished to the U.S. Representatives 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 U.S. Underwriters 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 U.S. Representatives
and counsel for the U.S. Underwriters.
(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 U.S. Option Units, on a Date of Delivery which is after the Closing
Time, the obligations of the U.S. Underwriters to purchase the relevant
U.S. Option Units, may be terminated by the U.S. Representatives 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 U.S. UNDERWRITERS. The Companies, jointly and
severally, agree to indemnify and hold harmless each U.S. Underwriter and each
person, if any, who controls any U.S. Underwriter 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 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
26
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 Xxxxxxx Xxxxx),
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 U.S. Underwriter through the U.S. Representatives 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 U.S. Prospectus (or any amendment or supplement thereto).
(b) INDEMNIFICATION OF THE COMPANIES, DIRECTORS AND OFFICERS. Each U.S.
Underwriter 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
U.S. prospectus or the U.S. Prospectus (or any amendment or supplement thereto)
in reliance upon and in conformity with written information furnished to the
Companies by such U.S. Underwriter through the U.S. Representatives expressly
for use in the Registration Statement (or any amendment thereto) or such
preliminary prospectus or the U.S. Prospectus (or any amendment or supplement
thereto).
(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
27
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 Xxxxxxx Xxxxx, 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.
(e) INDEMNIFICATION FOR RESERVED UNITS. In connection with the offer and
sale of the Reserved Units, the Companies agree, promptly upon a request in
writing, to indemnify and hold harmless the U.S. Underwriters from and against
any and all losses, liabilities, claims, damages and expenses incurred by them
as a result of the failure of eligible directors, officers, employees, business
associates and related persons of the Companies to pay for and accept delivery
of Reserved Units which, by the end of the first business day following the date
of this Agreement, were subject to a properly confirmed agreement to purchase.
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
28
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 U.S. Underwriters 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 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 U.S. Underwriters 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
U.S. Underwriters 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 U.S. Underwriters, in each case as
set forth on the cover of the U.S. 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 U.S.
Underwriters 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 U.S. Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Companies and the U.S. Underwriters 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 U.S. Underwriters 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 U.S.
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
29
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) 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 U.S.
Underwriter 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 U.S.
Underwriter, and each director of each of the Companies, each officer of 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 U.S. Underwriters' respective obligations to
contribute pursuant to this Section are several in proportion to the number
of Initial U.S. 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 U.S.
Underwriter or controlling person, or by or on behalf of the Companies, and
shall survive delivery of the Units to the U.S. Underwriters.
SECTION 9. TERMINATION OF AGREEMENT.
(a) TERMINATION; GENERAL. The U.S. Representatives 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 U.S.
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 U.S. Representatives,
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
30
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 U.S. UNDERWRITERS. If one or
more of the U.S. Underwriters 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 U.S. Representatives shall
have the right, within 24 hours thereafter, to make arrangements for one or
more of the non-defaulting U.S. Underwriters, 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
U.S. Representatives 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 U.S.
Underwriters 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 U.S. Underwriters, 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
U.S. Underwriters to purchase and of the Companies to sell the U.S. Option
Units to be purchased and sold on such Date of Delivery shall terminate
without liability on the part of any non-defaulting U.S. Underwriter.
No action taken pursuant to this Section 10 shall relieve any defaulting
U.S. Underwriter 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
U.S. Underwriters to purchase and the Companies to sell the relevant U.S.
Option Units, as the case may be, either the U.S. Representatives 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 "U.S. Underwriter" includes any person substituted for a U.S. Underwriter
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.
31
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 U.S.
Underwriters shall be directed to the U.S. Representatives at Xxxxx Xxxxx,
Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of Xxxx Xxxxxx;
notices to either of the Companies shall be directed to them at:
Dura Pharmaceuticals, Inc.
0000 Xxxxxxx Xxxxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000- 4204
Attn: Xxxxxxxx X. Xxxxxxxx
with a copy to:
Xxxxxxx, Phleger & Xxxxxxxx LLP
000 Xxxx "X" Xxxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxx
SECTION 13. PARTIES. This Agreement shall inure to the benefit of and
be binding upon the U.S. Underwriters 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
U.S. Underwriters 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 U.S. Underwriters
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 U.S. Underwriter 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.
32
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 U.S. Underwriters, Dura and SDC II in accordance
with its terms.
Very truly yours,
DURA PHARMACEUTICALS, INC.
By: __________________________
Title:
XXXXXX DEVELOPMENT CORPORATION II, INC.
By: __________________________
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES CORPORATION
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: ______________________________
Authorized Signatory
For themselves and as U.S. Representatives of the other U.S. Underwriters
named in Schedule A hereto.
33
SCHEDULE A
Name of U.S. Underwriter Number of
------------------------ Initial U.S.
Units
-----
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated...............................................
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation..........
-----------
Total.................................................. -----------
-----------
Sch A - 1
SCHEDULE B
XXXXXX DEVELOPMENT CORPORATION II, INC.
DURA PHARMACEUTICALS, INC.
3,750,000 Units
Each Unit Consisting of
One Share of Callable Common Stock of Xxxxxx 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 U.S. Unit, determined as
provided in Section 2, shall be $____.
2. The purchase price per U.S. Unit to be paid by the U.S. Underwriters
shall be $____, being an amount equal to the initial public offering price set
forth above less $____per U.S. 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]
Sch C - 1
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 "Xxxxxx 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
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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 Xxxxxx XX of, and the performance by Xxxxxx
XX 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 Xxxxxx XX, or, to our knowledge, any judgment, order
or decree of any governmental body, agency or court having jurisdiction over
Xxxxxx XX 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
Xxxxxx XX, to which Xxxxxx XX 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
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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, Xxxxxx & Xxxxxx and Xxxxxxxx X.
Xxxxxxxx, 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).
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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 Xxxxxx and to certain uses of the Xxxxxx product necessary
to conduct the business of Dura and Xxxxxx Corp. II as described in the
Prospectuses. With regard to the business presently and as proposed to be
conducted by Dura and Xxxxxx Corp. II relating to the Xxxxxx 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 Xxxxxx product.
(ii) To the extent that the statements relating to the Xxxxxx product
contained in the Registration Statement and Prospectuses under the
subheadings "Risk Factors--Business Risks Related to Xxxxxx Corp. II and
Dura--Uncertainty Regarding Patents and Proprietary Technology;
Unpredictability of Patent Protection - Xxxxxx Corp. II," "Risk Factors -
Business Risks Related to Xxxxxx Corp. II and Dura" and the first paragraph
of "Business of Xxxxxx 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 Xxxxxx
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
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES CORPORATION
as Representatives of the several
Underwriters to be named in the
within mentioned Purchase Agreement
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: Proposed Public Offering by Dura Pharmaceuticals, Inc. and Xxxxxx
Development Corporation II
Ladies and Gentlemen:
The undersigned, a stockholder and/or officer and/or director of Dura
Pharmaceuticals, Inc. ("Dura") understands that Xxxxxxx Xxxxx & Co. ("Xxxxxxx
Xxxxx") and Xxxxxxxxx, Xxxxxx & Xxxxxxxx ("DLJ") propose to enter into a
Purchase Agreement (the "Purchase Agreement") with Dura and Xxxxxx
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 Xxxxxxx Xxxxx, 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: ________________________
Print Name: ________________________
