EXHIBIT 1
FIRST AMENDMENT TO THE RIGHTS AGREEMENT
AND CERTIFICATION OF COMPLIANCE WITH SECTION 27 THEREOF
Pursuant to Section 27 of the Rights Agreement (the "Agreement") dated
as of May 21, 1998, between Dura Pharmaceuticals, Inc., a Delaware corporation
(the "Company"), and ChaseMellon Shareholder Services, L.L.C., a limited
liability company (the "Rights Agent"), the Company and the Rights Agent hereby
amend the Agreement as of December 10, 1998, as provided below.
1. CERTAIN DEFINITIONS. Section 1 of the Agreement shall be amended
to delete the definition of Continuing Directors.
2. ISSUE OF RIGHTS CERTIFICATES. Section 3(a) of the Agreement
shall be amended by replacing the phrase "a majority of the Continuing" in the
first sentence of the paragraph with the phrase "the Company's Board of".
3. FORM OF RIGHTS CERTIFICATES. Section 4(b)(iii)(B) of the
Agreement shall be amended by replacing the phrase "a majority of the
Continuing" with the phrase "the Board of".
4. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
Section 7(e)(iii)(B) shall be amended by replacing the phrase "a majority of the
Continuing" with the phrase "the Board of".
5. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF
RIGHTS. Section 11 shall be amended as follows:
(a) The phrase ",upon approval by a majority of the Continuing
Directors," which appears four times in subsection (a)(iii) and once in
subsection (d)(ii) shall be deleted.
(b) The phrase "a majority of the Continuing" in the second
sentence of subsection (b), and the first sentence of subsection (c) shall
be replaced with the phrase "the Board of".
(c) The phrase "a majority of the Continuing" in the second
sentence of subsection (d)(i) shall be replaced with the phrase "the
Company's Board of."
6. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. Section 14 (a) shall be
amended by deleting the phrase ", upon approval by a majority of the Continuing
Directors," in the last sentence of the paragraph.
7. ISSUANCE OF NEW RIGHTS CERTIFICATES. Section 22 shall be amended
by deleting the phrase "upon approval by a majority of the Continuing
Directors," in the first and second sentences of the paragraph.
8. REDEMPTION AND TERMINATION. Section 23 shall be amended as
follows:
(a) The phrase "a majority of the Continuing" in the first and
last sentences of subsection (a) and in the third sentence of subsection
(b) shall be replaced with the phrase "the Company's Board of". The
phrase "a majority of the Continuing" in the first sentence of subsection
(b) shall be replaced with the phrase "the Board of".
(b) The proviso in subsection (a) which reads "PROVIDED,
however, that, notwithstanding anything to the contrary contained in this
Section 23(a), the Company may not take any action pursuant to this Section
23(a) unless (x) at the time of the action of the Board of Directors of the
Company approving such redemption and the form of payment of the Redemption
Price, there are then in office not less than two Continuing Directors and
(y) such action is approved by a majority of the Continuing Directors then
in office" shall be deleted.
9. EXCHANGE. Section 24 shall be amended as follows:
(a) The phrase "a majority of the Continuing" in the first
sentence of each of subsection (a) and subsection (c) shall be replaced
with the phrase "the Company's Board of".
(b) The phrase ",upon approval by a majority of the Continuing
Directors," in the second sentence of subsection (c) shall be deleted.
10. SUPPLEMENTS AND AMENDMENTS. Section 27 shall be amended by
deleting the phrase ",upon approval by a majority of the Continuing Directors,"
in the first and second sentences of the paragraph.
11. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS. Section 29
shall be amended as follows:
(a) The phrase "or the Continuing Directors" in the last
sentence of subsection (a) shall be deleted; and
(b) Subsection (b) shall be deleted in its entirety.
12. SEVERABILITY. Section 31 shall be amended by deleting the phrase
",upon approval by a majority of the Continuing Directors," in the paragraph.
13. EXHIBIT C. Exhibit C shall be amended as follows: (i) the
phrase "a majority of the Continuing" in the second paragraph of Exhibit C
shall be replaced with the phrase "the Company's Board of", (ii) the phrase
"the Continuing Directors of" in the eleventh paragraph of Exhibit C shall be
deleted, (iii) the phrase "upon approval by a majority of the Continuing
Directors" in the first sentence of the thirteenth paragraph of Exhibit C
shall be
deleted, (iv) the word "Continuing" in the second sentence of the thirteenth
paragraph of Exhibit C shall be replaced with the phrase "Company's Board
of", and (v) the phrase "upon the approval of a majority of the Continuing
Directors" in the fourteenth paragraph of Exhibit C shall be deleted.
The undersigned officer of the Company, being an appropriate officer of the
Company and authorized to do so by resolution of the board of directors of the
Company dated as of December 10, 1998, hereby certifies to the Rights Agent that
these amendments are in compliance with the terms of Section 27 of the
Agreement.
DURA PHARMACEUTICALS, INC.
By: /s/ X. X. XXXXXXXX
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Name: X. X. Xxxxxxxx
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Title: Sr. Vice President
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Acknowledged and Agreed:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.,
as Rights Agent
By: /s/ XXXXXX XXXXXXX
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Name: Xxxxxx Xxxxxxx
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Title: Asst. Vice President
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