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EXHIBIT 10.6
SECOND OMNIBUS AMENDMENT
This SECOND OMNIBUS AMENDMENT dated as of April 28, 1998 is between
SmithKline Xxxxxxx Corporation, a Pennsylvania corporation ("SBC"), SmithKline
Xxxxxxx Inc., a Canadian corporation (successor by merger to SmithKline Xxxxxxx
Pharma Inc., a Canadian corporation) ("SBI"), SmithKline Xxxxxxx Properties,
Inc., a Delaware corporation ("SB Properties") and SmithKline Xxxxxxx
Inter-American Corporation, a Delaware corporation ("IAC") (collectively SBC,
SBI, SB Properties and IAC are referred to herein as the "Vendor") and Connetics
Corporation, a Delaware corporation (the "Company").
RECITALS
A. The Company and Vendor entered into an Asset Purchase Agreement
dated December 2, 1996 (the "Asset Purchase Agreement") pursuant to which the
Company acquired from Vendor on December 31, 1996 all rights to Ridaura(R), a
pharmaceutical product;
B. In connection with such transaction, the Company and SB
Properties entered into a Stock Issuance Agreement dated December 31, 1996 (the
"Equity Agreement") and the Company issued to SBC a Secured Promissory Note
dated December 31, 1996, which was amended on November 11, 1997 (the "Note");
C. On December 18, 1997, the Company and Vendor entered into an
Omnibus Amendment pursuant to which certain amendments were made to the Asset
Purchase Agreement, the Equity Agreement and the Note (the "December 1997
Amendment"); and
D. The Company and Vendor wish to make certain further changes to
the obligations contained in the Equity Agreement and the Note.
AGREEMENT
NOW THEREFORE, the parties hereto agree as follows:
1. Amendment to Secured Promissory Note. Section 2 of the Note is
hereby amended to read in its entirety as follows (with any undefined
capitalized terms having the meanings given in the Note):
"Maker promises to make payments of principal under this Note on
the following dates (each a "Payment Date"):
July 1, 1998 $1,100,000
October 1, 1998 $1,100,000
January 4, 1999 $2,500,000
April 1, 1999 $ 800,000
July 1, 1999 $ 800,000
October 1, 1999 $ 700,000
January 3, 2000 $1,500,000
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April 1, 2000 $1,500,000
On each Payment Date in addition to the payment of principal set
forth above for such Payment Date, the Maker shall pay the Payee
interest on all principal amounts outstanding under the Note (except no
interest shall accrue for the principal amounts due after January 4,
1999 until such date) for the period from the immediately prior Payment
Date through the day preceding the current Payment Date at the Interest
Rate (as defined below), calculated on the basis of actual days and a
360-day year. The "Interest Rate" shall be equal to the sum of (a) the
prime rate as publicly announced by Citibank NA from time to time plus
(b) 2% in the case of each Payment Date prior to and including January
4, 1999 or 3% in the case of each other Payment Date."
2. Deferred Purchase Price. The parties acknowledge that Section
2.1(c) of the Equity Agreement (as amended by the December 1997 Amendment)
resulted in a reduction in the number of shares of the Company's Common Stock
otherwise issuable to SB Properties. To compensate SB Properties for this
reduction, the Company agrees to pay SB Properties the amount of $308,311 within
five (5) days of the execution of this Second Omnibus Amendment. Such payment
shall constitute the full remaining consideration owed to SB Properties pursuant
to the Equity Agreement. Therefore, the parties agree that Section 4.2 of the
Asset Purchase Agreement shall remain in effect as provided in the original
Asset Purchase Agreement and shall not be amended as provided in Section 1.3 of
the December 1997 Amendment. Section 1.3 of the December 1997 Amendment is
expressly superseded by this Section 2.
3. Filing of S-3 Registration Statement. With regard to the
registration statement on Form S-3 that the Company is obligated to file and
effect pursuant to Article 3 of the Equity Agreement, the Company shall use its
best efforts to prepare and file such registration statement on or before June
12, 1998, subject to the terms and conditions of Article 3 of the Equity
Agreement.
4. Miscellaneous. Except as set forth in this Second Omnibus
Amendment, the provisions of the Equity Agreement, the Asset Purchase Agreement
and the Note shall continue in effect without change. This Second Omnibus
Amendment may be executed in counterparts.
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IN WITNESS WHEREOF this Second Omnibus Amendment has been executed by
the parties hereto as of the date first above written.
SMITHKLINE XXXXXXX CORPORATION
By: /s/ Xxxxxx Xxxxxx
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Title: Secretary
SMITHKLINE XXXXXXX PROPERTIES, INC.
By: /s/ Xxxxxx Xxxxxx
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Title: Vice President
SMITHKLINE XXXXXXX INC.
By: /s/ Xxxxxx Xxxxxx
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Title: Attorney
SMITHKLINE XXXXXXX INTER-AMERICAN
CORPORATION
By: /s/ Xxxxxx Xxxxxx
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Title: Vice President
CONNETICS CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
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Title: President and Chief Executive Officer
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