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EXHIBIT 2
[LETTERHEAD OF AXCAN]
June 22, 2000
Perseus-Soros BioPharmaceutical Fund LP
888 Seventh Avenue
New York, New York 10106
Attention: Dennis Purcell
RE: BOARD OF DIRECTORS OF AXCAN PHARMA INC.
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Dear Sir:
We understand that you currently intend, subject to the terms and
conditions of that certain Stock Purchase Agreement (the "Agreement"), dated the
date hereof, between Axcan Pharma Inc. ("Axcan") and Perseus-Soros
BioPharmaceutical Fund LP ("PS"), to purchase an aggregate of 2,500,000 shares
of common stock of Axcan as part of Axcan 's current U.S. Offering. The
undersigned hereby agrees with PS that, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and subject to the
consummation of the transactions contemplated by the Agreement (the date of such
event, the "Closing Date"), that PS shall have the following rights:
1. From and after the Closing Date, so long as PS or its affiliates hold,
in the aggregate, at least: (i) 6.0% of the outstanding common stock of
Axcan (the "Common Stock"); or (ii) 1.25 million shares of the Common
Stock (with appropriate adjustment made for any stock dividend,
split-up or subdivision or any combination or reclassification made or
effected subsequent to the Closing Date) (the "Consultation Period"):
(1) PS shall be able to appoint a non-voting representative to attend
meetings of the Board of Directors of Axcan, to change the
representative so appointed at any time and, upon the resignation of
such representative for any reason, to reappoint such a representative,
and PS shall be entitled to receive a copy of any materials to be
distributed or discussed at such meetings at the same time as provided
to members of the Board of Directors; (2) During the Consultation
Period, PS shall be entitled, from time to time, to make proposals,
recommendations and suggestions to Axcan relating to the business and
affairs of Axcan; (3) During the Consultation Period, Axcan shall
permit PS at all reasonable times and at PS's expense, to discuss
Axcan's
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business and affairs with its officers and directors; and (4) During
the Consultation Period, Axcan shall permit PS, at all reasonable times
and at PS's expense, to visit Axcan's properties. Anything in this
paragraph 1 to the contrary notwithstanding, the rights granted to PS
under this paragraph 1 shall be suspended during any period of time
during which Axcan's Board of Directors consists of at least one
director designated by PS. Notwithstanding anything to the contrary in
the foregoing, at all times prior to the next annual meeting of
shareholders of Axcan expected to take place in February 2001, PS shall
have those rights set forth in this paragraph 1. The PS representative
shall agree to be subject to the same obligations with respect to
confidential information as a member of the Board is subject to
pursuant to applicable law.
2. At Axcan's next annual meeting, Axcan (or its Board of Directors or a
committee thereof) shall nominate, unanimously recommend to its
stockholders and use its best efforts to elect one person designated by
PS (the "PS Director") as a candidate for the Board of Directors of
Axcan, provided, however, that said designee must be reasonably
acceptable to Axcan. Axcan agrees and acknowledges that Dennis Purcell,
so long as he is still affiliated with PS, is reasonably acceptable to
Axcan's Board of Directors.
3. At all times after the next annual meeting of shareholders of Axcan, so
long as PS or its affiliates hold, in the aggregate, at least 6.0% of
the outstanding Common Stock (with appropriate adjustment made for any
stock dividend, split-up or subdivision or any combination or
reclassification made or effected subsequent to the Closing Date), PS
shall be entitled to exercise the right provided in 2 in respect of
each subsequent meeting of shareholders.
If at any time while a PS Director is serving on the Board of Directors
of Axcan, a vacancy is created on the Board of Directors by reason of the
incapacity, death, removal or resignation of the PS Director, then PS shall
designate an individual (who shall be reasonably acceptable to Axcan) who shall
be elected to fill the vacancy.
Any amendment of this letter agreement must be in writing. This letter
agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
Notwithstanding anything to the contrary contained herein, PS can
terminate this letter agreement at anytime after the date hereof by providing
written notice (the "Termination Notice") to Axcan. Upon receipt by Axcan of the
Termination Notice, PS shall no longer have the rights set forth herein.
This letter agreement shall be governed by and construed in accordance
with the laws of New York, without regard to the principles of conflicts of law
of any jurisdiction.
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Yours truly,
/s/ David W. Mims
David W. Mims,
Executive Vice-President and
Chief Operating Officer
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