EXHIBIT 2
AMENDMENT OF STOCK PURCHASE AGREEMENT
Amendment to the Stock Purchase Agreement made on 18 March 1996 between ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ and SkyePharma
PLC, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ("the Agreement")
WHEREAS, the Parties to the Agreement had discussions regarding the amendment of
the Agreement relating to the form of payment of such deferred consideration as
set out in the Agreement;
NOW, THEREFORE the parties hereby agree as follows:
1. The existing clause 2.2.5 of the Agreement shall be amended as follows:
"2.2.5 (h) Notwithstanding any of the above it shall be the Buyer's right
and in its sole discretion to make any due payment in respect of any
deferred consideration set out in this Clause 2.2.5 in freely tradable and
registered Ordinary Shares of 10p (ten ▇▇▇▇▇) of SkyePharma PLC.
The number of shares to be transferred shall be calculated on the basis of
the average of middle market price of the stock as traded on the London
Stock Exchange over the period of the 10 (ten) trading days prior to the
due date of the payment and by applying the closing average buying/selling
exchange rate for US Dollars into English Pounds as published by the
Financial Times on the last day prior to the due date of the payment.
2. In all other respects the Agreement shall remain in full force and effect
and shall not be deemed to be affected by this Amendment.
This document reflects the agreement reached between the Buyer and the Seller at
the occasion of the board meeting of the Buyer in London on March 31, 2000 and
approved by the board of the Buyer on that date.
Zurich/London, April 7, 2000
The Seller:
by ▇▇. ▇. ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
for the Seller
/s/ ▇▇. ▇. ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
pp ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
The Buyer:
SkyePharma PLC
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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AMENDED SETTLEMENT AGREEMENT
This Amended Settlement is an amendment to the Stock Purchase Agreement made on
18 March 1996 between ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ and SkyePharma PLC, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, as amended on
31 March 2000 ("the Agreement")
WHEREAS, the Parties to the Agreement had discussions regarding the settling of
certain deferred considerations owed by the Buyer to the Purchaser under the
Agreement; and
WHEREAS, the parties have executed a Settlement Agreement dated April 7, 2000
which they agreed to amend for certain technical reasons; and
NOW, THEREFORE the parties hereby agree as follows:
1. The Buyer agrees to pay and the Seller agrees to accept in full
satisfaction of all present and future claims under the Clauses 2.2.3 (GJT
Contract Fee), 2.2.4 (Inhalation Contract Fee) and 2.2.5 (Earn Out"),
including Sub-Clauses (a), (b), (c), (d), (e), (f) and (g) of the Agreement
the following compensation.
2. The Buyer shall issue to Seller as full and final compensation the
following number of shares of Buyer upon the following conditions happening
and being satisfied:
(a) 6,000,000 (Six Million) freely tradable and registered ordinary shares
of 10p (ten ▇▇▇▇▇) each within 10 (ten) days upon approval of this
Settlement Agreement by the General Meeting of Shareholders of the
Buyer, as further provided for in clause 3 below; and
(b) 12,000,000 (Twelve Million) new "A" Deferred Shares in the capital of
the Buyer credited as fully paid within 10 (ten) days from such
approval; and
(c) 12,000,000 (Twelve Million) new "B" Deferred Shares in the capital of
the Buyer credited as fully paid within 10 (ten) days from such
approval.
The "A" Deferred Shares and the "B" Deferred Shares shall confer upon the
holders thereto the rights and shall be subject to the restrictions set out
in the Schedule to this Agreement.
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3. The Parties agree to amend and modify section 9. of the Agreement as follows:
(a) In respect of section 9.1.1 of the Agreement: The Buyer shall be relieved
from the obligation to submit to the Seller the statements required under
section 9.1 of the Agreement. Instead, the Buyer shall submit to the Seller
within 30 (thirty) days of having become aware of the fact that any of the
conditions set forth in sections 1.4 or 2.4 of the Schedule hereto
prevails, a written notice to this effect, accompanied by copies of the
relevant documents establishing the relevant facts and circumstances.
(b) In respect of section 9.1.2 of the Agreement: The audit rights granted to
the Seller under section 9.1.2 of the Agreement shall be limited to the
audit of such documents, files and items which are necessary to establish
whether the conditions set forth sections 1.4 or 2.4 of the Schedule hereto
are prevailing or not.
(c) In respect of Section 9.2 of the Agreement. The provisions of section 9.2
of the Agreement shall cease to apply with effect from the date of issue of
the shares referred to in clauses 2.(b) and 2.(c) above.
(d) In respect of sections 9.3 and 9.4 of the Agreement: The further
obligations of the Buyer shall be limited to any such commitments,
obligations, actions or undertakings which are reasonably necessary or
useful as to facilitate the conditions set forth in sections 2.(b) and
2.(c) to be satisfied, in particular to enable, support and protect ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ in launching and successfully marketing and distributing the
products mentioned in sections 1.4 or 2.4 of the Schedule hereto.
(e) In respect of section 9.5 of the Agreement: The damages payable by the
Buyer for a breach of the obligations in section 9.4 of the Agreement, as
amended by the terms of this Settlement Agreement, shall be limited to the
issuance of the shares remaining outstanding to be issued pursuant to
sections 2.(b) and 2.(c) above.
4. Upon receipt of the shares set forth in clause 2 above and/or upon the
conditions set forth in clause 2. above not prevailing prior to May 3,
2006, as the case may be, all claims and entitlements of the Seller under
the clauses 2.2.3., 2.2.4 and 2.2.5 of the Agreement shall be deemed fully
paid and satisfied. In the event that any of the conditions set forth in
clause 2. above shall not prevail or be satisfied prior to May 3, 2006
(subject to the above exception), the Seller shall not be entitled to any
other or additional compensation.
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5. This Settlement Agreement is contingent upon the approval of the Buyer's
shareholders to be sought in a General Meeting convened following the
publication of the Buyer's annual results for 1999 at which any necessary
changes to the Buyer's Articles of Association to create the "A" Deferred
Shares and the "B" Deferred Shares will be submitted for the approval of
the shareholders.
6. All other applicable provisions of the Agreement, including the clauses
11.15 (applicable law) and 11.17 (dispute resolution) of the Agreement
shall also apply to this Settlement Agreement.
7. This document constitutes an amended version of the Settlement Agreement
between the parties dated April 7, 2000 which reflected the agreement
reached between the Buyer and the seller at the occasion of the board
meeting of the Buyer in London on March 31, 2000 and approved by the board
of the Buyer on that date. By this Amended Settlement Agreement the
Settlement Agreement dated April 7, 2000 is substituted.
Zurich/London, May 11, 2000
The Seller:
/s/ ▇▇. ▇. ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
pp ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
The Buyer:
SkyePharma PLC
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
The Schedule (see attached)
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THE SCHEDULE
In this Schedule "the Company" means SkyePharma PLC
1 The "A" Deferred Shares ("the "A" Shares") shall have a nominal value of
10p (ten ▇▇▇▇▇) and shall confer upon the holders thereof the rights, and
be subject to the restrictions, as follows:
1.1 Income
The "A" Shares shall not confer any right to participate in any profits
of the Company.
1.2 Capital
(a) On a winding up or other return of capital payable by reference to
a record date on or after 4 May 2006 each "A" Share shall entitle
the holder thereof to receive the nominal value thereof if and
only if the holders of ordinary shares in the capital of the
Company have received the sum of L1,000,000 (One Million Pounds
Sterling) per ordinary share.
(b) On a return of capital whether on a liquidation or otherwise)
payable by reference to a record date on or before 3 May 2006 and
prior to the First Relevant Event then the "A" Shares shall
provisionally rank pari passu with the Ordinary Shares save that
no distribution shall be made to the holders of the "A" Shares
until the happening on or prior to 3 May 2006 of the First
Relevant Event. If the First Relevant Event shall not have
happened on or prior to 3 May 2006 then the rights of the "A"
Shares shall revert to those set out in paragraph (a) above and
the capital provisionally allocated to the "A" Shares shall belong
to the holders of the Ordinary Shares.
1.3 Voting
The "A" Shares shall not confer upon the holders thereof the right to
receive notice of or attend or vote at any general meeting of the
Company.
1.4 Redesignation
Each "A" Share shall (unless the Company has previously served an "A"
Redemption Notice) be automatically redesignated as an ordinary share on
the date falling 30 days after the first commercial sale of Paroxetine/
Paxil in combination with Geomatrix Technology by SmithKline ▇▇▇▇▇▇▇ PLC
("SB") or any sub licensee or contract partner of SB under a licence
agreement dated 20 March 1996 ("the First Relevant Event".
1.5 Redemption
1.5.1 Within 14 days of the occurrence of the First Relevant Event the
Company may serve written notice (an "A" Redemption Notice) on the
holders of the "A" Shares that it intends to redeem all (and not
part only) of such shares in accordance with the following
provisions and that it requires the delivery to it of all
certificates for the "A" Shares.
1.5.2 Upon receipt of an "A" Redemption Notice each registered holder of
"A" Shares to surrender at the holders risk to the Company the
certificate for the shares held by him which are to be redeemed so
that they may be cancelled.
1.5.3 Upon the later of surrender of the relevant share certificates or
the date 30 days after the First Relevant Event the Company will
pay to the holder of those shares the amount payable in respect of
the redemption.
1.5.4 Upon the redemption of the "A" Shares the Company will pay in
respect of each share so redeemed an amount per "A" Share equal to
the average of the middle market closing price of an ordinary
share as traded on the London Stock Exchange over the
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period of the ten trading days ending on the day 30 days after the
First Relevant Event, as taken from the Stock Exchange Daily
Official List for those days.
1.6 Takeover offers
In the event that prior to the First Relevant Event and prior to 3 May
3006 more than fifty per cent in nominal value of the issued ordinary
share capital of the Company is acquired by a person or persons acting in
concert pursuant to an offer for such shares ("the Ordinary Offer") then
the following provisions shall apply:
1.6.1 If the consideration for the Ordinary Offer is the issue of
ordinary shares of the Purchaser listed on a recognised investment
exchange (as defined in Section 207 Financial Services Act 1985)
then the holders of the "A" Shares shall be entitled to receive an
offer (at the election of the purchaser) under which the purchaser
either:
1.6.1.1 offers to acquire the "A" Shares as if they had
already been redesignated as ordinary shares of the
Company on the same terms as the Ordinary Offer;
1.6.1.2 offers to acquire the "A" Shares in exchange for a
new class of deferred share in the purchaser with the
same rights (mutatis mutandis) as those of the "A"
Shares (including this provision and including in
particular the right for each such share to be
redesignated as an ordinary share in the purchase on
the happening of the First Relevant Event on or prior
to 3 May 2006). The number of such shares of the
purchaser to be issued shall be calculated by
applying the same fact or which applied in the
Ordinary Offer.
In the event that a holder of "A" Shares shall fail to accept
either offer then the Redemption Value for each such share
following the happening of the First Relevant Event on or prior to
3 May 2006 shall be the value attributed to an ordinary share of
the Company in the Ordinary Offer.
1.6.2 In any other case the holders of the "A" Shares shall be entitled
to receive an offer that the purchaser will pay or otherwise give
value to the holders of the "A" Shares as if they had already been
redesignated as ordinary shares on the same terms as the Ordinary
Offer SAVE THAT such consideration shall be contingent upon the
happening of the First Relevant Event on or prior to 3 May 2006.
If a holder of "A" Shares shall fail to accept such offer, the
Redemption Value for each such share following the happening of
the First Relevant Event on or prior to 3 May 2006 shall be the
value attributed to an ordinary share of the Company in the
Ordinary Offer.
2 The "B" Deferred Shares ("▇▇▇ "▇" Shares") shall have a nominal value of
10p (ten ▇▇▇▇▇) and shall confer upon the holders thereof the rights, and
be subject to the restrictions, as follows:
2.1 Income
The "B" Shares shall not confer any right to participate in any profits
of the Company.
2.2 Capital
(a) On a winding up or other return of capital payable by reference to
a record date on or after 4 May 2006 each "B" Share shall entitle
the holder thereof the right to receive the nominal value thereof
if and only if the holders of ordinary shares in the capital of
the Company have received the sum of L1,000,000 (One Million
Pounds Sterling) per ordinary share.
(b) On a return of capital (whether on a liquidation or otherwise)
payable by reference to a record date on or before 3 May 2006 and
prior to the Second Relevant Event then the "B" Shares. shall
provisionally rank pari passu with the Ordinary Shares save that
no
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distribution shall be made to the holders of the "B" Shares until
the happening on or prior to 3 May 2006 of the Second Relevant
Event. If the Second Relevant Event shall not have happened on or
prior to 3 May 2006 then the rights of the "B" Shares shall revert
to those set out in paragraph (a) above and the capital
provisionally allocated to the "B" Shares shall belong to the
holders of the Ordinary Shares.
2.3 Voting
The "B" Shares shall not confer upon the holders thereof the right to
receive notice of or attend or vote at any general meeting of the
Company.
2.4 Redesignation
Each "B" Share shall (unless the Company has previously served an "B"
Redemption Notice) be automatically redesignated as an ordinary share on
the date thirty days after receipt by the Company of a royalty statement
from SB stating that the reported sales of Paroxetine/Paxil in
combination with the Geomatrix Technology marketed by SB or a sub-
licensee or contract partner of SB during any calendar year ending prior
to 1 January 2006 exceed US $1,000,000,000 (One Billion US Dollars) or
during the period 1 January 2006 to 3 May 2006 (both dates inclusive)
exceed US $337,000,000 (Three Hundred and Thirty Seven Million US
Dollars) ("the Second Relevant Event").
2.5 Redemption
2.5.1 Within 14 days of the occurrence of the Second Relevant Event the
Company may serve written notice (an "B" Redemption Notice) on the
holders of the "B" Shares that it intends to redeem all (and not
part only) of such shares in accordance with the following
provisions and that it requires the delivery to it of all
certificates for the "B" Shares.
2.5.2 Upon receipt of an "B" Redemption Notice each registered holder of
"B" Shares to surrender at the holders risk to the Company the
certificate for the shares held by him which are to be redeemed so
that they may be cancelled.
2.5.3 Upon the later of surrender of the relevant share certificates or
the date 30 days after the Second Relevant Event the Company will
pay to the holder of those shares the amount payable in respect of
the redemption.
2.5.4 Upon the redemption of the "B" Shares the Company will pay in
respect of each share so redeemed an amount per "B" Share equal to
the average of the middle market closing price of an ordinary
share as traded on the London Stock Exchange over the period of
the ten trading days ending on the day 30 days after the Second
Relevant Event, as taken from the Stock Exchange Daily Official
List for those days.
2.6 Takeover offers
In the event that prior to the Second Relevant Event and prior to 3 May
2006 more than fifty per cent in nominal value of the issued ordinary
share capital of the Company is acquired by a person or persons acting in
concert pursuant to an offer for such shares ("the Ordinary Offer") then
the following provisions shall apply:
2.6.1 If the consideration for the Ordinary Offer is the issue of
ordinary shares of the Purchaser listed on a recognised investment
exchange (as defined in Section 207 Financial Services Act 1985)
then the holders of the "B" Shares shall be entitled to receive an
offer (at the election of the purchaser) under which the purchaser
either:
2.6.1.1 offers to acquire the "B" Shares as if they had
already been redesignated as ordinary shares of the
Company on the same terms as the Ordinary Offer;
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2.6.1.2 offers to acquire the "B" Shares in exchange for a
new class of deferred share in the purchaser with the
same rights (mutatis mutandis) as those of the "B"
Shares (including this provision and including in
particular the right for each such share to be
redesignated as an ordinary share in the purchaser on
the happening of the Second Relevant Event on or
prior to 3 May 2006). The number of such shares of
the purchaser to be issued shall be calculated by
applying the same fact or which applied in the
Ordinary Offer.
In the event that a holder of "B" Shares shall fail to accept either
offer then the Redemption Value for each such share following the
happening of the Second Relevant Event on or prior to 3 May 2006 shall be
the value attributed to an ordinary share of the Company in the Ordinary
Offer.
2.6.2 In any other case the holders of the "B" Shares shall be entitled
to receive an offer that the purchaser will pay or otherwise give
value to the holders of the "B" Shares as if they had already been
redesignated as ordinary shares on the same terms as the Ordinary
Offer SAVE THAT such consideration shall be contingent upon the
happening of the Second Relevant Event on or prior to 3 May 2006.
If a holder of "B" Shares shall fail to accept such offer, the
Redemption Value for each such share following the happening of
the Second Relevant Event on or prior to 3 May 2006 shall be the
value attributed to an ordinary share of the Company in the
Ordinary Offer.
3 With effect from 4 November 2006, or, if later, the date on which any
dispute as to whether the First Relevant Event or the Second Relevant
Event respectively has occurred is resolved pursuant to paragraph 4 below
("▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Dates") the following provisions shall apply to such of
the "A" Shares and "B" Shares as shall not have been redesignated as
ordinary shares (such shares being referred to in this paragraph as
"Deferred Shares"):
3.1 The Company shall have irrevocable authority to appoint any person to
execute on behalf of the holders of the Deferred Shares a transfer/
cancellation of the Deferred Shares and/or an agreement to transfer/
cancel the same, without making any payment to the holders of the
Deferred Shares to such person or persons as the Company may determine as
custodian thereof and, pending such transfer and/or cancellation and/or
purchase, to retain the certificate for such shares. The Company may, at
its option at any time after the Repurchase Date, purchase all or any of
the Deferred Shares then in issue, at a price not exceeding one ▇▇▇▇▇ for
all the Deferred Shares so purchased or may cancel such shares by way of
reduction of capital for no consideration.
3.2 Neither the passing by the Company of any resolution for the cancellation
of the Deferred Shares for no consideration by means of a reduction of
capital requiring the confirmation of the Court nor the obtaining by the
Company nor the making by the Court of any order confirming any such
reduction of capital nor the becoming effective of any such order shall
constitute a variation, modification or abrogation of the rights
attaching to the Deferred Shares and accordingly the Deferred Shares may
at any time be cancelled for no consideration by means of a reduction of
capital effected in accordance with the Act without sanction of the part
of the holders of the Deferred Shares.
4 Any dispute between the Company and any holder of the "A" Shares or the
"B" Shares as to whether, and if so when, the First Relevant Event or the
Second Relevant Event has occurred or as to the amount payable on
redemption thereof shall be referred at the request of either party to
such dispute to the auditors of the Company for the time being for
determination. The Company shall provide the auditors with all necessary
information to enable them to make their determination and in reaching
their decision the auditors shall act as experts and not as arbitrators.
The finding of the auditors shall be final and binding on the parties and
the costs of the auditors shall be borne by the parties to the dispute in
such proportion as the auditors shall in their absolute discretion
determine.
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5 For the purposes of the foregoing provisions "Geomatrix Technology" shall
have the meaning ascribed thereto in a Stock Purchase Agreement dated 18
March 1996 between Dr J ▇▇▇▇▇▇▇ (1) and the Company (2).
6 If the Company's ordinary shares shall be subdivided or consolidated
between the issue of the "A" Shares and the "B" Shares and their
respective redesignation as ordinary shares then the rights of the "A"
Shares and the "B" Shares shall be adjusted in such manner as the
auditors of the Company (acting as experts and not as arbitrators) shall
determine.
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