Conformed Copy
ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT, dated as of December 29, 2004 (this
"Agreement"), is made and entered into by and among Xxxx Ajnsztajn and Xxxxxx
Xxxxxxxxx (collectively referred to as the "Assignors") and SkyePharma PLC, a
company incorporated under the laws of England and Wales (the "Purchaser").
WHEREAS, the Assignors are stockholders in Astralis Ltd., a Delaware
corporation ("Astralis");
WHEREAS, the Assignors are two of the founders of Astralis Ltd. (each a
"Founder" and collectively, the "Founders") and as Founders possess certain
rights under the Stockholders Agreement, dated December 10, 2001, as amended on
January 20, 2004, between Astralis, the Purchaser, the Assignors and the other
signatories thereto (the "Stockholders Agreement"), including rights under
Section 2.1 and 2.2 of the Stockholders Agreement to nominate and designate
directors of Astralis.
WHEREAS, each Assignor desires to assign and transfer all of his rights
under Article II of the Stockholders Agreement (the "Governance Rights") to the
Purchaser and the Purchaser desires to assume all of the Governance Rights of
such Assignor and, upon the valid appointment of directors of Astralis nominated
by the Purchaser, to make a payment to the Assignors in newly issued ordinary
shares of the Purchaser upon the terms and subject to the conditions set forth
herein;
WHEREAS, concurrently with the execution of this Agreement, each
Assignor and the Purchaser are executing a Stock Purchase Agreement (the "Stock
Purchase Agreement") and Lock Up Agreement (the "Lock Up Agreement") pursuant to
which each Assignor has agreed to sell his shares of common stock of Astralis,
$0.0001 par value, to the Purchaser and the Purchaser has agreed to purchase
such shares upon the terms and subject to the conditions set forth therein;
WHEREAS, each Assignor and the Purchaser are entering into this
Agreement to provide for such assignment and transfer and to establish various
rights and obligations in connection therewith;
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
1. Assignment and Assumption
1.1 Prior Written Consent.
Pursuant to Section 4.6 of the Stockholders Agreement, the Purchaser
hereby consents to the assignment of each Assignor's Governance Rights under
Article II of the Stockholder Agreement.
1.2 Assignment.
Each Assignor hereby assigns and transfers to the Purchaser all of his
Governance Rights under Article II of the Stockholders Agreement. Such
assignment and transfer includes without limitation the assignment and transfer
of all rights to nominate Founders' Directors (as defined in the Stockholders
Agreement) pursuant to Section 2.1(c), to remove Founders' Directors by written
notice pursuant to Section 2.1(d), to appoint Founders' Directors to fill
vacancies on the board of directors pursuant to Section 2.1(e), to require
Astralis pursuant to Section 2.1(g) to use best efforts to ensure that the
rights under the Stockholders Agreement are effective, to require the other
signatories to the Stockholders Agreement to take action in accordance with
Section 2.2 and to send notices under Section 2.2(e). Such assignment and
transfer shall be effective immediately upon execution of this Agreement.
Each Assignor and the Purchaser hereby represent and agree that neither
Assignor has been or will be consulted by the Purchaser regarding, or otherwise
participate in, the selection of the Founder Directors to be appointed by the
Purchaser following the assignment and transfer pursuant hereto.
1.3 Assumption.
The Purchaser hereby agrees to assume all of the Governance Rights of
each Assignor with respect to and under Article II of the Stockholders Agreement
and hereby accepts the foregoing assignment and transfer, and expressly assumes
all Governance Rights of each Assignor under Article II of the Stockholders
Agreement. Such agreement, acceptance and assumption shall be effective
immediately upon execution of this Agreement.
1.4 Consideration.
In consideration of the assignment and transfer of the Governance
Rights of each Assignor under the Stockholders Agreement, subject to the
satisfaction of the conditions in Section 4, the Purchaser agrees to allot and
issue to the Assignors, credited as fully paid, the following number of new
SkyePharma Ordinary Shares of the Purchaser ("Assignment Shares"): to Xxxx
Ajnsztajn, 426,396 Assignment Shares; and to Xxxxxx Xxxxxxxxx, 121,827
Assignment Shares (with respect to each Assignor, the "Assignment Share
Consideration"). For purposes of this Agreement, "Assignment Shares" means
SkyePharma Ordinary Shares of nominal value of 10 p each, which class of stock
is traded on the London Stock Exchange under the symbol SKP.L. The Assignment
Shares will be allotted and issued to the Assignors within five (5) business
days of the date on which the conditions set forth in Section 4 are satisfied or
waived (such date on which the conditions therein are satisfied or waived, the
"Condition Satisfaction Date").
2. Representations and Warranties of the Assignors
Each Assignor hereby represents and warrants to the Purchaser
that:
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(a) Execution and Delivery. This Agreement has been duly executed
and delivered by each Assignor and represents a valid and
binding obligation of such Assignor, enforceable in accordance
with its terms.
(b) Conflicts, Consents and Approvals. The compliance by such
Assignor with all of the provisions of this Agreement and the
consummation of the transactions contemplated herein will not
(i) conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any
contract, agreement or instrument to which such Assignor is a
party or by which such Assignor is bound, or to which any of
the property or assets of such Assignor is subject, or (ii)
violate any judgment, order, writ, injunction, decree,
statute, law, ordinance, rule or regulation applicable to such
Assignor or any of their respective properties or assets, or
require any notice, report or other filing to be made with, or
any consent, registration, approval, permit or authorization
to be obtained from, any Governmental Authority or third
party, except such consents or filings as have already been
duly and validly obtained or filed, or with respect to any
filings that must be made after the closing hereof, as will be
filed in a timely manner (except in cases (i) and (ii) where
such conflicts, breaches or violations of or defaults under
agreements or instruments or violations of statutes or
regulations or failures to obtain consents or make filings,
individually or in the aggregate, could not reasonably be
expected to have a material adverse effect on the ability of
such Assignor or the Purchaser to consummate the transactions
contemplated hereby). For the purposes of this Agreement,
"Governmental Authority" means any federal, national or state
government, political subdivision thereof or governmental or
regulatory authority, agency, board, bureau, commission, court
or self-regulatory organization.
(c) Investment Representations.
(i) Accredited Investor. Each Assignor is an "accredited
investor" (as such term is defined in Rule 501 of
Regulation D ("Regulation D") promulgated under the
Securities Act of 1933, as amended (the "Securities
Act")).
(ii) Purchaser Information. Each Assignor has adequate
information concerning the business and financial
condition of the Purchaser to make an informed
decision regarding the Assignment Share Consideration
and has independently and without reliance upon the
Purchaser or its agents made his own analysis and
decision to accept the Assignment Share Consideration
as consideration pursuant hereto. Each Assignor has
also had the opportunity to ask questions of and
receive answers from the Purchaser's management
regarding the terms and conditions of this
investment.
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(iii) Restricted Securities. Each Assignor acknowledges
that the Assignment Shares to be issued as Assignment
Share Consideration are "restricted securities" under
the Securities Act and have not been and will not be
registered under the Securities Act or the securities
laws of any state or other jurisdiction and cannot be
disposed of unless they are subsequently registered
under the Securities Act or an exemption from such
registration and any applicable state laws is
available, and will be subject to the additional
restrictions on and conditions to transfer contained
in Section 6 hereof.
(iv) Acquisition for Own Account. Each Assignor is
acquiring the Assignment Shares for the Assignor's
own account for investment only, and not with a view
to, or any present intention of, effecting a
distribution of such securities or any part thereof.
(v) No Brokers. No agent, broker, person or firm acting
on behalf of the Assignors is or will be entitled to
any advisory commission or broker's or finder's fee
in connection with this Agreement or any of the
transactions contemplated hereby.
(vi) Residence. The Assignors reside in the state or
country identified in Section 10 hereof.
3. Representations and Warranties of the Purchaser
The Purchaser hereby represents and warrants to, and agrees with, the
Assignors as follows:
(a) Organization and Existence. The Purchaser is a company duly
organized and validly existing under the laws of England and
Wales.
(b) Authorization, Execution and Delivery. The Purchaser has all
requisite corporate power and authority to execute this
Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution
and delivery of this Agreement have been, and the consummation
of the transactions contemplated hereby in connection with the
Closing, will have been duly authorized by all necessary
corporate action on the part of the Purchaser. This Agreement
has been duly executed and delivered by the Purchaser and this
Agreement constitutes the legal, valid, binding and
enforceable obligation of the Purchaser, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws
relating to creditors' rights and general principles of
equity.
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(c) Valid Issuance of Shares. Prior to the date on which the
Assignment Share Consideration is issued, the Purchaser will
have taken all necessary corporate action to permit it to
issue the Assignment Share Consideration. The Assignment
Shares, when issued, will be validly issued and fully paid up
and no further contributions in respect of such Assignment
Shares will be required to be made to the Purchaser by the
holder thereof, by reason solely of his being such holder, and
no stockholder of the Purchaser will have any preemptive right
of subscription or purchase in respect thereof.
(d) London Stock Exchange. Notwithstanding the restrictions set
forth in Section 6, the Purchaser represents and warrants to
each Assignor that upon admission of the Assignment Shares to
be issued as consideration hereunder to each Assignor pursuant
to Section 1.4 above to listing on the Official List
maintained by the UK Listing Authority and to trading on the
London Stock Exchange ("Admission") (i) the Assignment Shares
(A) will be readily and immediately saleable on the London
Stock Exchange; (B) will not need to be registered on the
London Stock Exchange; (C) will not need to be held for any
period or length of time prior to said sale; and (ii) there is
nothing in the laws of the United Kingdom that will prevent
the Assignors from selling the Assignment Shares immediately
following Admission on the London Stock Exchange. Purchaser
undertakes to obtain the Admission of the Assignment Shares
within 15 business days following Condition Satisfaction Date.
The Purchaser further undertakes to provide each Seller with a
copy of the documents submitted by the Purchaser to obtain
Admission within 2 business days following such submission and
to notify in writing each Assignor within two (2) business
days following its receipt of confirmation of Admission.
4. Conditions to Obligations of the Purchaser
The obligation of the Purchaser to deliver the Assignment Share
Consideration is subject to the satisfaction of the following conditions no
later than February 28, 2005, 5pm EST, any of which may be waived in whole or in
part by the Purchaser:
(a) The Astralis board of directors shall have validly appointed
two additional directors nominated by the Purchaser pursuant
to the Governance Rights to the board of directors of Astralis
(the "Additional SkyePharma Directors") . "Validly appointed"
for these purposes includes completion by Astralis of all
corporate action necessary in the determination of the
Purchaser to effectuate the appointment of the Additional
SkyePharma Directors; and
(b) No litigation or other formal proceeding shall have been
instituted by any person or threatened by any Governmental
Authority seeking to enjoin the assignment of the Governance
Rights or seeking damages in respect thereof, or otherwise
affecting the ability of the Purchaser to appoint the
Additional SkyePharma Directors and no injunction or temporary
restraining order shall have been issued in respect thereof.
(c) The compliance by the parties with the provisions of this
Agreement or the consummation of the transactions contemplated
herein shall not result in any conflict with, or result in a
violation or breach of, any provision of the Articles of
Incorporation or of the by-laws of Astralis.
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5. Reversion of Governance Rights
The Governance Rights assigned by the Assignors to the Purchaser shall
automatically revert to the Assignors without any further action required by the
parties if: (i) either the Purchaser fails to nominate two additional directors
pursuant to the Governance Rights on or before January 31, 2005, 5pm EST or the
appointment of the Additional Skye Directors pursuant to such Governance Rights
does not become effective on or before February 28, 2005, 5pm EST and (ii) the
Purchaser does not purchase the Sellers' Shares (as such term is defined in the
Stock Purchase Agreement) pursuant to the Stock Purchase Agreement. Upon such
reversion, the provisions of Section 1.4 hereof and any obligation the Purchaser
would otherwise have to deliver the Assignment Share Consideration shall
terminate. The Purchaser shall provide written notice of its nominations to
Assignors within 48 hours of submitting its nominations to Astralis. The
Purchaser shall also provide written notice to Assignors within 48 hours of any
notice to Purchaser of the appointment of the Additional Skye Directors. The
dates and times set forth in Sections 4 and 5 may be extended only with the
written consent of each of the parties hereto.
6. Restrictions on Transfer
The Assignment Share Consideration is subject to the lock-up provisions
contained in the Assignment Share Consideration Lock Up Agreements. The
Assignment Share Consideration Lock Up Agreements will be entered into by each
Assignor with effect from the Condition Satisfaction Date. The Lock-Up period
shall begin on the Condition Satisfaction Date. Without limiting the foregoing,
each Assignor agrees that, until such time as such Assignor has sold all of his
Assignment Shares in accordance with this Agreement, such Assignor shall sell
securities of the Purchaser only in compliance with the provisions of this
Agreement and only through one of two brokers which shall be nominated in
writing by the Purchaser from time to time upon written request by an Assignor
to sell any such (the "Appointed Brokers"). The Purchaser shall provide its
nominations to the relevant Assignor within three (3) business days of receipt
of the Assignor's written request. In connection with any sale, the Seller shall
choose, in its discretion, one of the Appointed Brokers to effect such sale, and
shall negotiate the terms of any sale with such broker.
Each Assignor further agrees that he shall not, prior to two years
after the issue of the Assignment Share Consideration, offer, sell, contract to
sell or otherwise dispose of or deliver any Assignment Shares constituting the
Assignment Share Consideration unless: (i) the Assignment Shares are sold
outside the United States in a transaction complying with Regulation S under the
Securities Act, including through the facilities of the London Stock Exchange
provided that neither such Assignor nor anyone acting on his behalf knows that
the transaction has been prearranged with a buyer in the United States; or (ii)
the Assignment Shares are sold in a transaction that does not require
registration under the Securities Act or any applicable laws and regulations of
the states of the United States governing the offer and sale of securities and,
prior to and as a condition to the execution of the offer, sale or delivery,
such Assignor has furnished to the Purchaser an opinion of counsel satisfactory
to the Purchaser to such effect, unless the Purchaser waives receipt of such
opinion. Furthermore, each Assignor acknowledges that the Purchaser shall place
upon each certificate representing the Assignment Share Consideration, a legend
substantially in the following form:
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"The securities represented by this certificate have been
issued without registration or qualification under the
Securities Act of 1933, as amended (the "Securities Act"), or
any applicable state securities laws. Such securities may not
be sold, assigned, transferred or otherwise disposed of unless
(i) the securities represented by this certificate are sold
outside the United States in a transaction complying with
Regulation S, including through the facilities of the London
Stock Exchange provided that neither the holder or anyone
acting on the holder's behalf knows that the transaction has
been prearranged with a buyer in the United States; or (ii)
the shares are sold in a transaction that does not require
registration under the Securities Act or any applicable laws
and regulations of the states of the United States governing
the offer and sale of securities, and prior to the offer,
sale, or delivery, the holder has furnished to SkyePharma an
opinion of counsel satisfactory to SkyePharma to such effect."
7. Indemnification
7.1 Indemnification by the Assignors
Each Assignor hereby agrees to indemnify and hold harmless the
Purchaser and its respective affiliates, directors, officers and employees
(collectively, the "Purchaser Indemnified Parties") from and against any and all
liabilities, judgments, claims, settlements, losses, damages, reasonable fees
(including attorneys' and other experts' fees and disbursements), liens, taxes,
penalties, obligations and expenses (collectively, "Losses") incurred or
suffered by any such person arising from, by reason of or in connection with any
misrepresentation or breach of any representation, warranty or covenant of such
Assignor contained in this Agreement or any certificate or other document
delivered by such Assignor under this Agreement. This indemnification provision
shall be in addition to the rights of the Purchaser to bring an action against
such Assignor for breach of any term of this Agreement.
7.2 Indemnification by the Purchaser
The Purchaser hereby agrees to indemnify and hold harmless each
Assignor from and against any and all Losses incurred or suffered by any such
person arising from, by reason of or in connection with any misrepresentation or
breach of any representation, warranty or covenant of the Purchaser contained in
this Agreement or any certificate or other document delivered by the Purchaser
under this Agreement. This indemnification provision shall be in addition to the
rights of each Assignor to bring an action against the Purchaser for breach of
any term of this Agreement.
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7.3 Limitation
Notwithstanding the foregoing, the obligations to indemnify and hold
harmless pursuant to Sections 7.1 and 7.2 shall in each case be limited to an
aggregate amount equal to $50,000.
8. Survival of Representations, Warranties and Agreements
Notwithstanding any investigation conducted or notice or knowledge
obtained by or on behalf of any party hereto, the respective representations,
indemnities, covenants and warranties of the Purchaser and the Assignors shall
survive the execution of this Agreement, the Condition Satisfaction Date hereof,
the delivery of the Assignment Shares and/or termination of this Agreement prior
thereto.
9. Expenses
Each of the Assignors and the Purchaser shall bear his or its own
expenses in connection with the preparation for and consummation of the
transactions contemplated by this Agreement.
10. Notices
All notices, advices and communications to be given or otherwise made
to any party to this Agreement shall be deemed to be sufficient if contained in
a written instrument delivered in person, by courier or by telecopier, or by
electronic mail, with a copy thereof to be sent by mail (as aforesaid) within 24
hours of such electronic mail, addressed to such party at the address set forth
below or at such other address as may hereafter be designated in writing by the
addressee to the addresser listing all parties:
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if to the Assignors, to:
Mr. Xxxx Ajnsztajn
000 Xxxxxx Xxxx
Xxxxxxxxxxxxx, XX 00000
and
Xx. Xxxxxx Xxxxxxxxx--Resident of Venezuela c/o Xxxxxxxx X.
Xxxxxxx, Esq. The Galleria 0 Xxxxxx Xxxxxx Xxx Xxxx, Xxx
Xxxxxx 00000
with a copy to:
Xxxxxxxx X. Xxxxxxx, Esq.
The Galleria
0 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxxxx 00000
Telecopier: 000-000-0000
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if to the Purchaser, to:
SkyePharma PLC
000 Xxxxxxxxxx
Xxxxxx, Xxxxxxx, X0X 0XX
Attention: Finance Director
Telecopier: x00-00-0000-0000
with a copy to:
Xxxxxxxx & Xxxxxxxx XXX
0 Xxx Xxxxxx Xxxx
Xxxxxx, Xxxxxxx, XX0X 0XX
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Telecopier: x00-00-0000-0000
or to such other address as the party to whom notice is to be given may have
furnished to the other parties hereto in writing in accordance herewith. Any
such notice or communication shall be deemed to have been delivered and received
(i) in the case of personal delivery or delivery by telecopier, on the date of
such delivery and (ii) in the case of nationally-recognized overnight courier,
on the second business day after the date when sent. As used in this section,
"business day" shall mean any day other than a day on which banking institutions
in the State of New York are legally closed, or authorized to close, for
business.
11. Successors and Assigns
Except as otherwise expressly provided herein, this Agreement shall
bind and inure to the benefit of the parties hereto and the respective
successors and permitted assigns of the parties hereto. Neither this Agreement,
nor the rights and obligations hereunder, is assignable by any party hereto
(except to a successor-in-interest by operation of law) without the prior
written consent of the others. Any such purported assignment made without such
prior written consent shall be null and void. No person other than the parties
hereto and their respective successors and permitted assigns shall have any
rights or claims under this Agreement.
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12. Entire Agreement
This Agreement and the other writings or documents referred to herein
or delivered pursuant hereto which form a part hereof contain the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior and contemporaneous arrangements or understandings with
respect thereto.
13. Amendments
The terms and provisions of this Agreement may be amended only with the
written consent of each of the parties hereto. Any provision hereof may be
waived in writing by the party or parties entitled to enforce such provision. No
delay in exercising any right, power or privilege hereunder will operate as a
waiver thereof, nor will any waiver on the part of any party of any right, power
or privilege hereunder operate as a waiver of any other right, power or
privilege hereunder nor will any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder.
14. Termination
This Agreement may be terminated by the mutual written consent of each
party hereto. This Agreement may be terminated by the Purchaser if either
Assignor is in material breach of this Agreement and such breach is not cured
within ten days following the delivery of written notice thereof. This Agreement
may be terminated by either Assignor if the Purchaser is in material breach of
this Agreement and such breach is not cured within ten days following the
delivery of written notice thereof. Such termination right may be exercised only
by the delivery of written notice of such termination by the terminating party
to the other party and such termination will not relieve any party of liability
for its prior breach.
15. Publicity
The Assignors shall not issue or cause the publication of any press
release or other public announcement with respect to this Agreement and the
transactions contemplated hereby without the express prior written consent of
the Purchaser.
16. Counterparts
This Agreement may be executed in any number of separate counterparts,
and each such counterpart shall be deemed to be an original instrument, but all
such counterparts together shall constitute but one agreement.
17. Headings
The headings of the various sections of this Agreement and of the
schedules have been inserted for convenience of reference only and shall not be
deemed to be a part of this Agreement.
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18. Governing Law; Submissions to Jurisdiction
This Agreement shall be construed in accordance with the laws of the
State of New Jersey, without regard to conflict of law provisions thereof. Each
party hereto agrees that any action or proceeding in respect of any claim
arising out of or related to this agreement or the transactions contained in and
contemplated by this Agreement, whether in tort or contract or at law or in
equity, may be instituted in any state or federal court located in Newark or
Trenton, New Jersey (the "New Jersey Courts") and solely in connection with
claims arising under this Agreement or the transactions contained in or
contemplated by this Agreement (i) submits to the non-exclusive jurisdiction of
the New Jersey Courts, (ii) waives any objection to laying venue in any such
action or proceeding in the New Jersey Courts, (iii) waives any objection that
the New Jersey Courts are an inconvenient forum or do not have jurisdiction over
any party hereto, (iv) waives any right to a trial by jury and (v) agrees that
service of process upon such party in any such action or proceeding shall be
effective if notice is given in accordance with Section 10 of this Agreement.
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IN WITNESS WHEREOF, this Assignment Agreement has been duly
executed and delivered on behalf of the parties as of the date first written
above.
Xxxx Ajnsztajn
/s/ Xxxx Ajnsztajn
---------------------------------
Xxxxxx Xxxxxxxxx
/s/ Xxxxxx Xxxxxxxxx
---------------------------------
SkyePharma PLC
By: /s/ Xxxxxx Xxxxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Finance Director
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