Document:

INDEX
OF EXHIBITS FILED WITH THE 2004 20-F

Item 19: Exhibits 

	
  1.1

  	
   

  	
  Memorandum and Articles of Association of
  SkyePharma PLC

  
	
  

  	
   

  	
  

  1.1.1

  	
   

  	
  

  Memorandum of Association of SkyePharma PLC**

  
	
  

  	
   

  	
  

  1.1.2

  	
   

  	
  

  Articles of Association of SkyePharma PLC, as amended on May 30, 2002***

  
	
  

  4.1

  	
   

  	
  

  Solaraze® Agreements with Bioglan

  
	
  

  	
   

  	
  

  4.1.1

  	
   

  	
  

  Licensing and manufacturing agreement for Europe dated March 13, 2000 between
  JagoTech AG and Bioglan Pharma PLC**+

  
	
  

  	
   

  	
  

  4.1.2

  	
   

  	
  

  Addendum agreement for the U.S. dated December 28, 2000 between JagoTech AG
  and Bioglan Pharma PLC**+

  
	
  

  4.2

  	
   

  	
  

  Directors and Officers Service Contracts

  
	
  

  	
   

  	
  

  4.2.1

  	
   

  	
  

  Contract of employment between the Company and Donald Nicholson dated
  February 28, 1996**

  
	
  

  	
   

  	
  

  4.2.2

  	
   

  	
  

  Contract of employment between the Company and Frank Condella dated February
  27, 2006

  
	
  

  	
   

  	
  

  4.2.3

  	
   

  	
  

  Contract of employment between the Company and Dr. Kenneth Cunningham dated
  March 1, 2006

  
	
   

  	
   

  	
  

  4.2.4

  	
   

  	
  

  Letter of appointment between the Company and Dr. Argeris (Jerry) Karabelas
  dated February 2, 2006

  
	
  

  	
   

  	
  

  4.2.5

  	
   

  	
  

  Proforma letter of appointment in respect of the appointment of Non-Executive
  Directors******

  
	
  

  4.3

  	
   

  	
  

  Share Purchase Plans

  
	
  

  	
   

  	
  

  4.3.1

  	
   

  	
  

  The SkyePharma PLC Deferred Share Bonus Plan***

  
	
  

  4.4

  	
   

  	
  

  Amendments to the 1996 Acquisition Agreement, dated April 7, 2000 and May 11,
  2000, between Dr Jacques Gonella and SkyePharma PLC*

  
	
  

  4.5

  	
   

  	
  

  Development and Marketing Strategic Alliance Agreement among Endo
  Pharmaceuticals Inc., SkyePharma Inc. and SkyePharma Canada Inc. dated as of
  December 31, 2002 ****+

  

 

 

 

 

	
  

  4.6

  	
   

  	
  

  License Agreement, dated March 20, 1998, between SmithKline Beecham plc (now
  part of GlaxoSmithKline plc), Jagotec AG and Jago Pharma AG*****+

  
	
  

  8.1

  	
   

  	
  

  List of SkyePharma PLC’s subsidiaries (See “Item 4: Information on the
  Company – Business Operations – Organizational Structure”)

  
	
  

  12.1

  	
   

  	
  

  Certification of Frank Condella filed pursuant to 17 CFR 240.13(a) – 14(a)

  
	
  

  12.2

  	
   

  	
  

  Certification of Donald Nicholson filed pursuant to 17 CFR 240.13(a) – 14(a)

  
	
  

  13.1

  	
   

  	
  

  Certification of Frank Condella filed pursuant to 17 CFR 240.13(a) – 14(b)
  and 18 U.S. C/1350(a) and (b)

  
	
  

  13.2

  	
   

  	
  

  Certification of Donald Nicholson filed pursuant to 17 CFR 240.13(a) – 14(b)
  and 18 U.S. C/1350(a) and (b)

  
	
  

  15.1

  	
   

  	
  

  Consent of Independent Registered Public Accounting Firm

  

	
  *

  	
   

  	
  Incorporated by reference to the Company’s Annual Report on Form 20-F
  for the financial year ended December 31, 1999 (Commission File No. 0-29860)

  	
   

  
	
  

  **

  	
   

  	
  

  Incorporated by reference to the Company’s Annual Report on Form 20-F for the
  financial year ended December 31, 2000 (Commission File No. 0-29860)

  	
   

  
	
  

  ***

  	
   

  	
  

  Incorporated by reference to the Company’s Annual Report on Form 20-F for the
  financial year ended December 31, 2001 (Commision File No. 0-29860)

  	
   

  
	
  

  ****

  	
   

  	
  

  Incorporated by reference to the Company’s Annual Report on Form 20-F for the
  financial year ended December 31, 2002 (Commision File No. 0-29860)

  	
   

  
	
  

  *****

  	
   

  	
  

  Incorporated by reference to the Company’s Annual Report on Form 20-F for the
  financial year ended December 31, 2003 (Commision File No. 0-29860)

  	
   

  
	
  

  ******

  	
   

  	
  

  Incorporated by reference to the Company’s Annual Report on Form 20-F for the
  financial year ended December 31, 2004 (Commision File No. 0-29860)

  	
   

  
	
  

  +

  	
   

  	
  

  Confidential treatment has been granted for portions of this document. The
  information omitted pursuant to such confidential treatment order has been
  filed separately with the SEC in accordance with Rule 24b-2 under the
  Securities Exchange Act of 1934, as amended (“Rule 24b-2”)

  	
   

  

 

 

 

Exhibit 4.2.2

 

	
   

  	
  STRINGER SAUL LLP

  

DATED 27 FEBRUARY 2006

(1)  SKYEPHARMA PLC

and

(2)  FRANK CONDELLA

SERVICE
AGREEMENT

17 Hanover
Square  London  W1S 1HU

Tel: 020 7917 8500  Fax: 020 7917 8555

This Agreement is
made on the 27 day of February 2006

BETWEEN:

1.                                       SKYEPHARMA PLC a company incorporated within England and
Wales (registered number company No.00107582) whose registered office is at 105
Piccadilly, London W1J 7NJ (the “Company”)

and

2.                                       FRANK CONDELLA of 405, Fairway Road, Ridgewood, New Jersey,
07450, USA, (“the Executive”)

IT IS
HEREBY AGREED AS FOLLOWS:

1                                         Interpretation

1.1                                 In
this Agreement the following words and expressions shall have the following
meanings:

                                               1.1.1                                                 “Group
Company” - a company which is from time to time a Subsidiary or a Holding
Company of the Company or a Subsidiary (other than the Company) of a Holding
Company of the Company

1.1.2                                                “Group”
the Company and any Group Companies from time to time;

1.1.3                                                “the
Board” - the board of directors from time to time of the Company including any
committee of the board duly appointed by it;

1.1.4                                                “Subsidiary”
and “Holding Company” - the meanings respectively ascribed thereto by s. 736 of
the Companies Act 1985 as originally enacted;

1.1.5                                                “the
ERA”- the Employment Rights Act 1996; and

1.1.6                                                “Termination
Date” means the date of termination of the Executive’s employment.

1.2                                 References
in this Agreement to statutes shall include any statute modifying, re-enacting,
extending or made pursuant to the same or which is modified, re-enacted, or
extended by the same.

1.3                                 Headings
are for ease of reference only and shall not be taken into account in the
construction of this Agreement.

2                                         Appointment

2.1                                 The
Company hereby appoints the Executive and the Executive agrees to serve the
Company as Chief Executive Officer. It is the intention that the Executive will
be appointed as a Director of the Company, by not later than 31 July 2006.
Any breach by the Company of the obligation to appoint the Executive as a
director by 31 July 2006 shall be regarded as a repudiatory breach of
contract by the Company.

2.2                                 If the Executive is unable to fully carry out
his duties for whatever reason the Company may, at its absolute discretion,
engage or employ any other person or persons to perform some or all of the
Executive’s duties on a temporary basis until the Executive is able fully to
resume the proper performance of his duties hereunder.

2.3                                 Nothing in this Agreement shall mean or be
deemed to mean that the Company is obliged to provide work to the Executive or
that the Executive has the right to perform services for the Company or the
Group Company.

3                                         Secondment

The Executive agrees to take on such additional roles
and hold such offices of the Company and of any Group Company and perform such
duties and fulfil such obligations for a Group Company for such periods as the
Company may require but such secondments shall not release the Executive or the
Company from their respective obligations under this Agreement.

4                                         Warranties on Appointment

4.1                                 The
following warranties will be deemed to be given by the Executive to the Company
on the date of this Agreement and the said warranties will be deemed to
continue to be accurate during the course of the Executive’s employment under
this Agreement until and unless he informs the Board in writing to the
contrary: -

                                               4.1.1                                                 to the
best of his knowledge he is physically and mentally fit to be employed by the
Company. He will disclose to the Board or to the Company’s nominated doctor any
information, which may lead the Company to believe otherwise. He hereby
consents to the disclosure of his medical records on request by the Company at
any time prior to or during the course of his employment hereunder;

                                               4.1.2                                                 he is
legally entitled to reside and work in the United Kingdom and will produce to
the Company (who will take copies of the same) before commencement of his
employment all documents that the Company reasonably requires to ensure its
compliance with the provisions of the
Asylum and Immigration Act 1996.

                                               4.1.3                                                 by
accepting the terms of this Agreement he will not thereby breach any express or
implied term of any other contract and he agrees to indemnify the Company
against all costs claims or demands suffered by it as a result of any such
breach or any allegation of such a breach;

                                               4.1.4                                                 he has
disclosed to the Board all information which might lead to a conflict between
his personal interests and the interests of the Company in the light of his
knowledge of the Company’s current plans and activities. The said declaration
includes without limitation a list of all his current substantial shareholdings
directorships, partnerships and appointments;

                                               4.1.5                                                 the
contents of his CV and any other documents which he has disclosed to the
Company concerning his past history are true;

4.1.6                                                he
holds and will continue to hold any qualifications which he has indicated to
the Company that he holds and any qualifications which the Company has
indicated to him as being necessary for the performance of his duties under
this Agreement;

4.1.7                                                he
knows of no circumstances which could either:

                                                                                                                        4.1.7.1                                                               lead
to a claim by a third party against the Company as a result of something done
by  him; or

4.1.7.2                                                               be
viewed by the Company as a breach by him of his obligations under any
employment agreement with the Company.

5                                         Term
of Appointment

5.1                                 Subject
to clause 18 hereof, the Executive’s employment shall commence on 1 March 2006
and continue until terminated by the Company giving to the Executive not less
than twelve months written notice, or by the Executive giving to the Company
not less than six months written notice.

5.2                                 Once
notice to terminate has been given by either party in accordance with clause
5.1 hereof, or any other purported termination of the Agreement by either party
or if notice of a shorter period than that required by clause 5.1 hereof has
been given, the Company reserves the right, exercisable in its absolute
discretion, to terminate the Executive’s employment by making a payment in lieu
of the notice required by clause 5.1 or any unexpired part of such notice.

5.3                                 Any
payment in lieu of notice shall consist of a sum equivalent to the Executive’s
basic salary (at the rate applicable at the date notice is given) and the
following benefits provided by the Company: car allowance, pension contributions,
and any insurance benefits which the Executive is receiving at the date notice
is given, or a payment of the monetary value in lieu thereof, for the notice
period required by clause 5.1 or any unexpired period thereof and shall be
subject to such statutory deductions as the Company is required to make. For
the avoidance of doubt, the payment in lieu of notice shall not include any
benefits not specified in this clause 5.3 or entitlement to annual or other
bonuses or any rights under the Company’s share plans from time to time.

5.4                                 The
Company reserves the right to make such payment in lieu of notice (or any part
thereof) in equal instalments at monthly intervals in advance during the relevant
period. The Executive undertakes to inform the Company in writing as soon as he
receives an offer of suitable alternative employment during the relevant period
and of the amount of the salary and benefits he will be entitled to receive and
to commence that employment as soon as is reasonably practicable. The Executive
agrees that the amount of the payment in lieu of notice shall be reduced or
extinguished by the gross amount of any monies payable and the value of any
benefits provided directly or indirectly to the Executive arising out of such
alternative employment with effect from the first day of his paid alternative
employment and the Executive undertakes to repay to the Company within 14 days
of receipt any monies paid in advance which relate to any period of paid
alternative employment. The Executive agrees to provide to the Company 

                                                within
14 days of written demand for the same written evidence (in a form reasonably
satisfactory to the Company) of salary and benefits received by the Executive
from his new employment during the relevant period.

5.5                                 In
the event that the employment of the Executive is terminated by the Company without
notice on or before 31 July 2006 (other than for one of the reasons
detailed in clause 18.1 hereof) the Company will pay to the Executive a lump
sum payment in lieu of 12 months’ notice within 28 days of the Termination Date.

5.6                                 In
the event that the employment of the Executive is terminated by the Company on
or after 1 August 2006 without notice (other than for one of the reasons
detailed in clause 18.1 hereof) the Company will pay to the Executive a lump
sum payment in lieu of 6 months’ notice within 28 days of the Termination Date
and the remaining balance of six months’ notice will be paid in instalments
starting 6 months after the Termination Date, pursuant to clause 5.4 above.

5.7                                 In
the event that the employment of the Executive is terminated by the Company on
or after 1 August 2006 on notice (other than for one of the reasons
detailed in clause 18.1 hereof) the Company will be entitled to place the
Executive on Garden Leave for up to 6 months (pursuant to clause 6 hereof), and
will pay to the Executive a lump sum payment in lieu of 6 months’ notice within
28 days of the Termination Date and the remaining balance of notice (if any)
will be paid in instalments starting 6 months after the Termination Date,
pursuant to clause 5.4 above.

5.8                                 For
the avoidance of doubt:

5.8.1                                                If
the Company terminates the Executive’s employment other than in accordance with
its rights under this Agreement any entitlement to damages for breach of
contract will be assessed on the normal common law principles (including the
Executive’s obligation to mitigate his loss); and

5.8.2                                                The
right of the Company to make a payment in lieu of notice does not give rise to
any right for the Executive to receive such a payment.

5.9                                 The
Executive’s continuous employment with the Company will begin on 1 March 2006.
No employment with a previous employer will count as part of the Executive’s
period of continuous employment with the Company.

5.10                          The
Executive’s employment will terminate automatically without notice being given
on his 65th birthday.

6                                         Garden
Leave Provision

6.1                                 The
Company reserves the right where either party to this Agreement gives notice
(including short or no notice) to terminate this Agreement or otherwise
purports to terminate the Executive’s employment, to:

6.1.1                                                exclude
the Executive from all or any of the Company or any Group Company’s places of
business; or

6.1.2                                                to
require him to attend one of the Group Company’s offices to carry out special
projects which are reasonably commensurate with his position and within his
skill and competence as directed by the Board; or

6.1.3                                                to
forbid him to contact the employees, clients or suppliers of the Company or any
Group Company, in relation to the business of the Company or any Group Company
with which he was concerned in the 12 months prior to being put on garden leave,

for period(s) of up
to 6 months of the Executive’s contractual notice period (the “Garden Leave
Period”).

6.2                                 Where
the Company exercises its rights under clause 6.1 above, it is relieved from
any obligation whatsoever to provide the Executive with work to do, or to allow
the Executive access to any premises of the Company or any Group Company, or to
have contact with or dealings with employees, clients or suppliers of the
Company or any Group Company in relation to the business of the Company or any
Group Company, or to allow the Executive to carry out his normal duties and the
Executive’s normal duties under this Agreement will be suspended during such
period.

6.3                                 During
any Garden Leave Period the Executive will, if requested, remain readily
contactable by providing telephone and other contact details and be available
to work for the Company save when the Executive is on holiday by prior
agreement with the Company.

6.4                                 During
the Garden Leave Period the Executive’s salary and all other contractual
benefits shall not cease to be payable or provided by reason only of the
Company exercising its rights pursuant to sub clauses 6.1 and 6.2 of this
Clause 6. The Executive’s holiday will continue to accrue during the Garden
Leave period subject to clause 6.6 hereof. This Clause shall not affect the
general right of the Company to suspend in accordance with Clause 20.2 nor
affect the rights and obligations of the parties prior to the service of such a
notice.

6.5                                 During
the Garden Leave Period the Executive remains an employee of the Company and is
bound by the terms of this Agreement (other than to perform work for the
Company unless specifically required to do so). In particular, the Executive
remains bound by his obligations of confidentiality, loyalty, good faith, and
exclusive service to the Company, including those obligations set out in clauses
7 which obligations, inter alia, preclude the Executive from taking up any
other employment during the Garden Leave Period if it would conflict with such
obligations.

6.6                                 The
Company reserves the right to require the Executive to take any accrued or
outstanding holiday entitlement during the Garden Leave period.

7                                         Powers,
Duties, Workplace and Working Hours

7.1                                 During
the continuance of his employment hereunder the Executive shall owe a duty of
fidelity and good faith to the Company which shall include the following:

7.1.1                                                unless
prevented by ill health or other unavoidable cause during Normal Working Hours
(as defined in clause 7.3) the Executive shall devote the whole of his working
hours and of his attention and abilities to carrying out his duties hereunder
and to the business of the Company and any Group Company, and use his best
endeavours to develop the business and interests of the Company and any Group
Company and will not extend, develop or evolve the business of the Company and
any Group Company other than through the Company and any Group Company and will
bring to the attention of the Company any relevant business opportunities for
the Company or any Group Company of which the Executive becomes aware;

7.1.2                                                the
Executive shall diligently and faithfully serve the Company and its Group
Companies to the best of his ability and carry out his duties in a proper and
efficient manner and use his best endeavours to promote and maintain the
interests and reputation of the Company and of its Group Companies;

7.1.3                                                the
Executive shall exercise such powers and perform such duties in relation to the
business of the Company and/or of its Group Companies as may from time to time
be vested in or assigned to him by the Board;

7.1.4                                                the
Executive shall comply with all reasonable requests and directions from time to
time given to him by the Board and with all rules and regulations from
time to time laid down by the Company concerning its employees;

7.1.5                                                the
Executive shall keep the Board promptly and fully informed (in writing if so
requested) of his conduct of the business or affairs of the Company and/or its
Group Companies and provide such explanations as the Board may reasonably
require;

7.1.6                                                the
Executive shall not at any time directly or indirectly and whether on his own
behalf or on behalf of any third party entice or encourage or seek to entice or
encourage any other employee of the Company or any other Company in the Group
to leave their employment;

7.1.7                                                the
Executive shall not at any time directly or indirectly and whether on his own
behalf or on behalf of any third party entice or encourage or seek to entice or
encourage any other consultant or contractor of the Company or any other
Company in the Group to leave their engagement;

7.1.8                                                the
Executive shall promptly disclose to the Board any of the following information
which comes into his possession during his employment:

7.1.8.1                                                               the
plans of any key or management employees to leave the Company or any Group
Company (whether alone or in concert with other employees);

7.1.8.2                                                               the
plans of any key or management employee (whether alone or in concert with other
employees) to join a competitor or to establish a business in competition with
the Company or any Group Company;

7.1.8.3                                                               any
steps taken by any employee to implement either of such plans in clause
7.1.8.1. and 7.1.8.2 above, including but not limited to any attempts to
approach or solicit clients or customers of the Company or any Group Company;

7.1.8.4                                                               the
misuse by any employee or any third party of any confidential information (as
defined in clause 17) belonging to the Company or any Group Company;

7.1.8.5                                                               the
misconduct of any employee or consultant or agent of the Company.

7.1.9                                                the
Executive shall be obliged to make disclosure under clause 7.1.6 notwithstanding
that to do so would involve disclosure of information pertaining to the
Executive’s own activities, including breaches by him of his contract of
employment;

7.1.10                                          not
at any time to knowingly make any untrue or misleading statements in any media
relating to the Company or any Group Companies or do anything that is harmful
to the Company or any Group Company or any employee, clients or suppliers;

7.1.11                                          inform
the Company Secretary of any change in his home address or telephone number,
bank or building society details (for payment purposes) relevant qualifications
and licences or any criminal charges or convictions.

7.2                                 Subject
to clauses 2.4 and 3 the Executive’s normal place of work shall be the Company’s
premises at 105 Piccadilly, London W1V and at such other places as may be
determined by the Board from time to time. The Company reserves the right to
require the Executive to change his normal place of work to such other premises
of the Company or Group Company within the United Kingdom or overseas as the
Company may from time to time require. The Executive will be required to travel
to such places (both within and outside the UK) in such manner and on such
occasions as the Company may from time to time be required for the proper
performance of his duties.

7.3                                 In
performing his duties, the Executive may be required to work outside the UK for
consecutive periods of one month or more. In that event, the Executive’s
remuneration will continue to be paid by the Company in accordance with this
Agreement and there will be no changes to his other benefits, save as may be
notified to him.

7.4                                 Subject
to clauses 2.4 and 3, the Executive’s normal working hours shall be five days
each week from 9 am to 5.30 pm with a one-hour break for lunch together with
such additional hours outside these hours as may be necessary for the proper
and efficient performance of the Executive’s duties. No 

                                                payment
will be made for any additional hours worked by the Executive, nor will time
off in lieu be permitted except with the agreement of the Board.

8                                         Working
Time Regulations Opt-Out

The Executive accepts
that by signing this agreement he has agreed that regulation 4(1) of the
Working Time Regulations 1998 (which limits the Executive’s working time to an
average of 48 hours for each 7 days) shall not apply. The Executive accepts
that this opt-out will be for an indefinite period but may be terminated by the
Executive giving 3 months written notice of termination of the opt-out to the
Company at any time

9                                         Restrictions
During Employment

The Executive shall not
during the continuance of his employment hereunder (whether during or outside
of his employment or his working hours) without the prior consent in writing of
the Board either alone or jointly with or on behalf of the another and whether
directly or indirectly and whether as principal, partner, agent, shareholder,
director, employee, consultant or otherwise howsoever shall not engage in,
carry on or be interested or concerned in any other business, trade,
profession, occupation or fee-earning activity which is similar to or competes
with or may compete with the business of the Company or any Group Company or
which may, in the opinion of the Board, cause a conflict of interest in
connection with the Executive’s duties to the Company or any Group Company. This
shall not preclude him from holding not more than three per cent of any class
of issued shares or other securities which are listed or dealt in on any
recognised stock exchange by way of bona fide investment only.

10                                  Remuneration

10.1                          During
his appointment the Company shall pay the Executive a basic salary at the rate
of £450,000 per annum which shall accrue from day to day. Salary will accrue
from day to day and shall be payable in equal monthly instalments in respect of
the current month, on or before the last day of each month or the nearest
working day thereto and shall be subject to all lawful deductions. The salary
shall be deemed to include any fees receivable by the Executive as a Director
of the Company or any Group Companies.

10.2                           For the
purposes of the ERA the Executive authorises the Company at any time during his
employment, and in any event upon termination howsoever arising, to deduct from
the Executive’s remuneration under this Agreement any sums from time to time
owed by him to the Company or any Group Company, including but not limited to
any outstanding loans, advances, excess holiday, the cost of repairing any
damage or loss of the Company’s property caused by the Executive (and of
recovering it) and any other monies owed by the Executive to the Company.

11                                  Expenses

The Company shall
reimburse to the Executive all travelling, hotel and other appropriate
accommodation, entertainment and other out-of-pocket expenses reasonably
incurred by him in the proper performance of his duties hereunder subject to
his compliance with the Company’s guidelines as amended from time to time
relating to expenses and to the production (if 

required) of receipts,
vouchers or other evidence of actual payment of the expenses. The Executive
shall be entitled to fly First Class within the USA.

12                                 Benefits

Pension

12.1                           The
Executive is eligible to participate in the Company’s stakeholder compliant
pension scheme (“the Scheme”) subject to the rules of the Scheme for the
time being in force. Brief details of the Scheme a can be obtained from the
Company Secretary. The Company reserves the right at any time to change the rules of
the Scheme, to terminate its participation in the Scheme or to substitute
another pension scheme.

12.2                           The
Company will pay contributions at the rate of an amount equivalent to 17.5% per
annum of the Executive’s basic salary to an Inland Revenue approved personal
pension scheme of his choice. The said contributions will be paid on a monthly
basis.

12.3                           There
is not a contracting-out certificate in force in respect of the Executive’s
employment.

Car Allowance 

12.4                           The
Executive will receive a car allowance of £11,000 per annum. This will be paid
in 12 equal monthly instalments net of tax and National Insurance contributions
with the Executive’s salary each month.

Life Assurance

12.5                           The
Company shall pay the premiums for providing the Executive with Life Assurance
cover of four times his annual salary payable under clause 10.1, subject to any
limits imposed by HM Revenue a & Customs from time to time, to the
approval of the Company’s insurers to provide such insurance on terms
considered reasonable by the Company and any terms and conditions they may
impose and to the rules of the Policy from time to time in force. The
Executive agrees to undergo a medical examination if required to obtain such
insurance cover.

Other Insurances

12.6                           During
the period of this Agreement, the Executive shall be entitled to participate in
any private medical expenses insurance, permanent health insurance and critical
illness insurance schemes which the Company may make available to employees of
the Executive’s status and which the Board expressly offer to the Executive. This
entitlement includes the right to elect to participate in either the Company
plan in the UK or in the United States of America.  Any such participation shall be subject to and
in accordance with the rules of the relevant scheme from time to time in
force and participation in any such scheme shall not affect the right of the
Company to terminate the employment under any other provision of this
Agreement.

12.7                           The
Company will have not liability to pay any benefit to the Executive under any
scheme referred to in clause 12 above, unless it first receives payment of the
benefit from the insurers of the benefits under the relevant scheme.

12.8                           Any
benefits provided by the Company or any Group Company to the Executive which
are not expressly referred to in this Agreement shall be regarded as ex gratia
and made at the absolute discretion of the Company and shall not confer any
contractual entitlement upon the Executive.

Participation in Share
Plans and Bonus Arrangements

12.9                           The
Executive shall be entitled to participate in any bonus or share plan operated
by the Company from time to time at a level commensurate with his position in
the Company subject always to the rules of the relevant plan from time to
time. For the avoidance of doubt and without prejudice to the generality of the
foregoing the Executive will currently be entitled to participate in the
following arrangements:-

The SkyePharma PLC
Deferred Share Bonus Plan;

The SkyePharma PLC
2004 Long-Term Incentive Plan; and

The SkyePharma PLC
International Share Purchase Plan.

Under the SkyePharma PLC Deferred Share Bonus Plan the Executive’s
current maximum annual bonus potential will be 100% of his basic annual salary
from time to time.

Special Share
Purchase & Matching Clause

12.10                     The Company
requires Executives at this level to hold a significant number of shares in the
capital of the Company. In the case of the Chief Executive Officer, the target
for share ownership is shares in the Company with an aggregate purchase price
of 3 x the Executive’s annual salary (as specified in clause 10.1), such target
to be achieved within 3 years of the date his employment with the Company
started. If the Executive acquires ordinary shares in the Company during the
period commencing on 6th February 2006 and finishing prior to 24th February 2006, the number of shares
acquired during this period with an aggregate purchase price up to a maximum of
1/3rd of the Executive’s salary as set out in Clause
10.1 of this Agreement (the “Executive Shares”), shall qualify for an award of
shares provided by the Company (“Matching Shares”). The Company will grant an
award of Matching Shares as soon as practicable after the acquisition of the
Executive Shares. The maximum Matching Share award shall be 2 Matching Shares
for every Executive Share. The minimum Matching Share award shall be one
Matching Share for every Executive Share. Matching Shares shall be released as
follows:-

12.10.1                                    50%
of the total number of Matching Shares granted shall be released to the
Executive on the first anniversary of their date of grant subject to the
Executive satisfying the following conditions:-

12.10.1.1                                                   continued
employment by a Group Company over this period; and

12.10.1.2                                                   retention
of his associated Executive Shares over this period;

12.10.2                                    the
balance of Matching Shares not released in accordance with clause 12.10.1 above
shall be released to the Executive on the 

                                                                        second
anniversary of their date of grant subject to the Executive satisfying the
following conditions:-

12.10.2.1                                                   continued
employment by a Group Company over this period; and

12.10.2.2                                                   retention
of his associated Executive Shares over this period.

It should be noted that
this Clause is a summary of the Share Purchase & Matching Agreement.
If there is any conflict between this Clause and the terms of the Share
Purchase & Matching Agreement, the terms of the Share Purchase &
Matching Agreement shall have precedence. In the event that the Executive’s employment
is terminated by the Company (other than for one of the reasons detailed in
clause 18.1 hereof) the Company will ensure that shares purchased by the Executive
between 6 and 24 February 2006 shall be matched by the Company on a one
for one basis.

13                                  Holidays

13.1                           The Company’s
holiday year runs from 1 January to 31 December (“Holiday Year”).

13.2                           In
addition to normal bank and other public holidays in England, the Executive
shall be entitled in every Holiday Year to 25 working days paid holiday which
shall be calculated pro rata, to be taken at such time or times as may be
approved by the Chairman of the Board (“the Chairman”). As much notice as
possible should be given and no firm arrangements made until the Chairman’s agreement
has been given. For the purposes of the Working Time Regulations, the Executive
is required to take a minimum of 20 days holiday (pro rata) including normal
bank and public holidays in England in each Holiday Year.

13.3                           The
Executive may, with the consent of the Chairman, carry forward up to 5 days of
his annual holiday entitlement to the next Holiday Year. No payment in lieu of
untaken holiday entitlement will be made except in accordance with clause 13.4.

13.4                           Paid
holiday entitlement shall accrue at the rate of 2.08 working days per month of
completed service in each calendar year and on the determination of his
employment hereunder the Executive shall be entitled to pay in lieu of
outstanding holiday entitlement in respect of that calendar year or shall be
required to repay to the Company for holiday taken in excess of his actual
entitlement and for the purposes of this clause the basis of calculation shall
be 1/260 annual salary for each day’s holiday entitlement. The Company reserves
the right to require the Executive to take any accrued unused holiday
entitlement during his period of notice.

13.5                           The
Executive may not convert a period of holiday into a period of absence due to
sickness or injury if he becomes incapacitated immediately before or during a
period of holiday, without the prior agreement of the Board.

13.6                           If the
Executive is dismissed and the principal reason for his dismissal is misconduct
or if the Executive fails to give sufficient notice to terminate his
employment, the Executive will not be entitled to any payment in lieu of any 

                                                accrued
holiday entitlement in excess of the statutory minimum to which he is entitled
under the Working Time Regulations 1998.

14                                  Incapacity

14.1                           If the
Executive is absent from work due to illness or accident he shall notify the
Chairman as soon as possible and if this incapacity continues for seven or more
consecutive days he shall on the seventh day of such absence and on each succeeding
seventh day submit a doctor’s certificate to the Company. In the event that any
doctors’ certificate is for a period in excess of seven days, the Executive
shall not be required to submit a further certificate until the date when the
existing certificate expires. If the Executive is absent from work for less
than seven days, the Company may require the Executive to provide a sickness
report form as evidence of his illness or incapacity.

14.2                           Without
prejudice to the Company’s right to terminate this Agreement pursuant to clause
18.2, if the Executive is absent from work due to Incapacity duly notified and
certified in accordance with clause 14.1 the Company will pay the Executive’s
remuneration and benefits due under this Agreement for a maximum of a total
aggregate period of 90 working days in any period of 12 calendar months. Thereafter,
the payment of remuneration and provision of benefits shall be at the absolute
discretion of the Company. Exercise of discretion on one occasion, shall not
imply a contractual entitlement.

14.3                           The
remuneration paid under clause 14.2 for absence due to Incapacity shall include
any statutory sick pay (SSP) payable and when this is exhausted shall be
reduced by the amount of social security sickness benefit or other benefits
recoverable by the Executive (whether or not recovered). For SSP purposes the
Executive’s qualifying days are Monday to Friday.

14.4                           For the
purposes of clauses 14.2 and 14.3 above, “Incapacity” shall mean any illness,
accident or other likely cause but excluding any illness or accident caused by
the Executive’s own negligence which prevents the Executive from performing his
duties hereunder.

14.5                           The
Company reserves the right to require the Executive at any time to submit
himself for examination by a doctor appointed by the Company at the Company’s
expense.

14.6                           If the
Executive is caused to be incapable of performing his duties and
responsibilities hereunder by a third party and the Company wishes to bring an
action against such third party the Executive will (at the Company’s expense)
provide all such assistance and co-operation as the Company may reasonable
require for the purpose of prosecuting such an action.

15                                  Inventions
and Improvements

15.1                           If the
Executive creates or discovers or participates in the creation or discovery of
any inventions or Intellectual Property during the course of his employment
with the Company, the Executive shall promptly give to the Company full details
of such inventions or Intellectual Property and if such inventions or
Intellectual Property in the opinion of the Company relate to or are capable of
being used in the business for the time being carried on by the Company or any
Group Company or if such inventions or Intellectual Property shall be an
invention belonging to the employer as defined in 

                                                Section 39
(1) of the Patents Act 1977, then without
prejudice to any other right of the Company or any Group Company any such
inventions or Intellectual Property shall be the absolute property of the
Company and the Executive shall forthwith and from time to time both during his
employment and thereafter at the request and expense of the Company:

15.1.1                                          give
and supply all such information, data, drawings and assistance as may be
necessary to enable the Company to exploit such inventions or Intellectual
Property to the best advantage;

15.1.2                                          execute
all documents and do all things which may be necessary or desirable for
obtaining patent or other protection for the inventions or Intellectual
Property in such parts of the world as may be specified by the Company and for
vesting the same in the Company or as it may direct;

15.1.3                                          not
do any act or fail to do any act which might invalidate or adversely affect any
inventions or Intellectual Property.

15.2                           The
Executive irrevocably appoints the Company to be his attorney in his name and
on his behalf to sign execute or do any such instrument or thing and generally
to use his name for the purpose of giving to the Company (or its nominee) the
full benefit of the provisions of this clause 15 and in favour of any third
party a certificate in writing signed by any director or the Secretary of the
Company that any instrument or act falls within the authority conferred by this
clause shall be conclusive evidence that such is the case.

15.3                           The
Executive waives all of his moral rights as defined in the Copyright
Designs and Patents Act 1988 in respect of any acts of the Company
or any acts of third parties done with the Company’s authority in relation to
the inventions and Intellectual Property which are the property of the Company
(or are the property of the Company by virtue of clause 15.2 hereof).

15.4                           Rights
and obligations under this clause shall continue in force after termination of
this Agreement in respect of inventions or Intellectual Property made or
discovered during the Executive’s employment under this Agreement and shall be
binding upon his representatives.

15.5                           Any
legal proceedings issued by the Company or any Group Company in respect of any
infringement or dispute or threatened dispute or infringement will be conducted
at the Company’s discretion and expense and the Executive agrees to give all
reasonable assistance in any such legal proceedings.

15.6                           In this
clause 15, “Intellectual Property” includes letters patent, trade marks,
service marks, trade names, designs, utility models, copyrights (existing and
future), design rights, applications for registration of any of the foregoing
and the right to apply for them in any part of the world, moral rights,
inventions, improvements to procedures, confidential information, know-how, and
rights of like nature arising or subsisting anywhere in the world, in relation
to all of the foregoing, whether registered or unregistered.

16                                 Restrictions
after Employment

16.1                           For
the purposes of this clause the following definitions shall apply:

“Business”
shall mean the business of the
Company carried on by the Company at the Termination Date and during the period
of 12 months prior thereto in which the Executive had been involved
during the course of his employment at any time within a period of 12 months
before the Termination Date and any
other business of the Company or any Group Company carried on during
such period in which the Executive was involved during the course of his
employment at any time within a period of 12 months before the Termination
Date;.

“Client” shall mean any
person, firm, company or organisation to whom the Company or any Group Company
has supplied Services or with whom they have entered into licensing and/or
collaboration arrangements in relation to the Business within a period of 12
months before the Termination Date and with whom or which, during such period
the Executive had significant dealings in the course of the Executive’s
employment by the Company or any Group Company at any time within a period of
12 months before the Termination Date;

“Prospective Client”
means any potential client with whom, to the Executive’s knowledge the Company
or any Group Company has been in active negotiations for the supply of
Services, or in connection with licensing or collaboration arrangements at any
time within a period of 6 months before the Termination Date;

“Services” means any
product or service (including, without limitation, licensing and collaboration
arrangements) developed or being developed or marketed sold or provided by the
Company during the 12 months immediately preceding the Termination Date with
which the Executive’s duties were concerned or for which the Executive was
responsible or which was provided to the Executive’s knowledge during the 12
months immediately preceding the Termination Date;

“Supplier” shall mean the
suppliers of technical consultancy services, specialist laboratory equipment,
and/or the manufacturers of specialist raw materials and components to the Company
or any Group Company with whom the Executive had significant dealings, in the
course of his employment within a period of 6 months before the Termination
Date;

“Termination Date” shall
mean the date of termination of the Executive’s employment.

16.2                           In
order to protect the legitimate business of the Company and any Group Company
with which the Executive shall be significantly involved during the course of
his employment, the Executive hereby undertakes that (without the prior written
consent of the Board) he shall not:

16.2.1                  for a period of 6
months after the Termination Date whether directly or indirectly in any
capacity whatsoever (on his own behalf or on behalf of any other person, firm
or company) solicit or entice away or seek to solicit or entice away from the
Company or any Group Company whether by means of the supply of names or
expressing 

                                                                        views
on suitability or otherwise, any person who is and was at the Termination Date
employed or engaged by the Company or any Group Company:

16.2.1.1                                                         as
a Director;

16.2.1.2                                                         as
a member of the Executive committee or as one of the direct reports to the
Executive committee; or

16.2.1.3                                                         in
a business development capacity;

and with whom the
Executive had dealings, in the course of his employment, within a period of 6
months before the Termination Date;

16.2.2                                          for
a period of 6 months after the Termination Date whether directly or indirectly
in any capacity whatsoever (whether on the Executive’s own behalf or on behalf
of any other person, firm or company) solicit or seek in any capacity
whatsoever any business, order or custom for any services which are competitive
with the Services from any Client or otherwise interfere with the relationship
between the Company or any Group Company and any Client;

16.2.3                                          for
a period of 3 months after the Termination Date whether directly or indirectly
in any capacity whatsoever (whether on the Executive’s own behalf or on behalf
of any other person, firm or company) solicit or seek in any capacity
whatsoever any business, order or custom for any services which are competitive
with the Services from any Prospective Client or otherwise interfere with the
relationship between the Company or any Group Company and any Prospective
Client;

16.2.4                                          for
a period of 6 months after the Termination Date whether directly or indirectly
in any capacity whatsoever (whether on the Executive’s own behalf or on behalf
of any other person, firm or company) seek to entice away from the Company or
otherwise interfere with the terms of dealing or the relationship between the
Company and any Group Company and any Supplier;

16.2.5                                          for
a period of 6 months after the Termination Date whether directly or indirectly
in any capacity whatsoever (whether on the Executive’s own behalf or on behalf
of any other person, firm or company) carry on or be directly or indirectly
engaged or concerned or interested whether as principal agent, shareholder,
employee, consultant or otherwise in any business or concern which provides
services competitive with the Services and which competes with (or which is
intended once operational to compete with) the Business;

16.2.6                  for a period of
6 months after the Termination Date not to be employed or engaged by a Client
or a Prospective Client of the Company in any capacity in which the Board believes
that the Executive’s knowledge of the confidential information of the Company (as
defined in clause 17 of this agreement) may prejudice the interests of the
Company or any Group Company.

16.3                           After
the termination of the Executive’s employment, for any reason whatsoever the
Executive shall not for any reason represent himself as still connected with
the Company or any Group Company or as still authorised to conduct business on
behalf of the Company or any Group Company.

16.4                           The
periods of the restrictions referred to in the sub-clauses of clause 16.2 above
shall in each case be reduced by the period during which the Company exercises
its right to place the Executive on garden leave pursuant to Clause 6 hereof.

16.5                           The
Executive agrees and undertakes that in the event of receiving an offer of
employment or engagement during the continuance of this Agreement or during the
continuance in force of any of the restrictions set out in the clause 16, he
will forthwith provide to the offeror a copy of the restrictions in this
Agreement.

16.6                           Each of
the restrictions in the sub-clauses of this clause shall be construed as
separate and individual restrictions and shall each be capable of being severed
without prejudice to the other restrictions or the remaining provisions of this
Agreement.

17                                  Confidential
Information

17.1                           In
addition and without prejudice to the Executive’s common law obligations to
keep information secret the Executive shall not (except for the purpose of
properly performing his duties hereunder or with the prior express written
consent of the Company or unless ordered to do so by a Court) during his
employment or after its termination use, disclose or communicate and shall use
all reasonable endeavours to prevent the improper use, disclosure or
communication of:

17.1.1                                          any
information of a confidential nature (including but not limited to information
regarding the business, inventions or Intellectual Property, confidential unpublished information about
the business, accounts, finances, trading, data, surveys or results of any
trials, product formulations, details or lists of Clients or Prospective
Clients and their contact details and their requirements, the prices charged to
and terms of business with the Company’s suppliers, future strategies,
marketing and sales plans, sales forecasts, product information, marketing
plans and sales forecasts, financial information, results and forecasts (save
to the extent that these are included in published audited accounts) business
development plans and strategies, commercial strategies, any information which
has been given to the Company in confidence by any of it’s Clients, Suppliers
or other persons, details of employees, and contractors, software, marketing
strategies of the Company or any Group Company;

17.1.2                                          any
confidential report or research undertaken by or for the Company or any Group
Company during the course of his employment;

17.1.3                  any information
designated as confidential by the Company or any Group Company or which to his
knowledge has been supplied to 

                                                                        the
Company or any Group Company subject to an obligation of confidentiality.

17.2                           In this
clause “information” and “confidential report or research” refer to
confidential information and confidential reports and research which came to
the knowledge of the Executive during the course of his employment.

17.3                           In
order to protect the Company’s confidential information, the Executive agrees
that he will not at any time make or arrange to have made any copy, abstract,
summary or precis of the whole or any part of any document, computer programme
or record belonging to the Company except when required to do so for the
purpose of properly performing his duties hereunder, and the Executive
acknowledges that any such copy, disk, programme, abstract, summary or precis
shall belong to the Company and shall be delivered up to the Company on
termination of his employment.

17.4                           The
restrictions contained in this clause shall cease to apply with respect to any
information, confidential report or research which comes into the public domain
otherwise than through an unauthorised disclosure by the Executive or a third
party or to information which is required to be disclosed by operation of law.

17.5                           The
Executive shall not without the prior written consent of the Board either
directly or indirectly publish any opinion, fact or material or deliver any
lecture or address or participate in the making of any film radio broadcast or
television transmission or communicate with any representative of the media or
any third party relating to the business affairs of the Company or any Group
Company or to any of its officers, employees, clients, suppliers, agents or
shareholders. Notwithstanding the foregoing, nothing in this clause 17 prevents
the Executive from communicating with the media about the business affairs of
the company or any group company, in so far as such communication would
ordinarily be expected from a person holding the office of Chief Executive of a
company of the nature of the Company. For the purposes of this clause “media”
shall include television (terrestrial, satellite and cable) radio, internet,
newspapers and other journalistic publications.

18                                  Termination

18.1                           If the
Executive commits any fundamental breach of the Agreement, including without
limitation any of the following:

18.1.1                                          the
Executive is adjudged bankrupt or enters into any composition or arrangement
with or for the benefit of his creditors including a voluntary arrangement
under the Insolvency Act 1986;

18.1.2                                          the
Executive shall commit any act of material dishonesty whether relating to the
Company, any Group Company, an employee or otherwise where such act of
dishonesty materially undermines the trust and confidence between the Executive
and the Company;

18.1.3                                          the
Executive is guilty of any serious misconduct or commits any serious or (having
been given notice in writing) persistent breach of any of his obligations to
the Company or any Group Company (whether under this Agreement or otherwise) or
refuses or neglects 

                                                                        to
comply with any reasonable and lawful orders or directions given to him by the
Board;

18.1.4                                          the
Executive shall be convicted of any criminal offence (other than an offence
under the road traffic legislation in the United Kingdom or elsewhere for which
a penalty other than imprisonment (either immediate or suspended) is imposed)
or other than one which in the opinion of the Board does not adversely affect
his position as a director;

18.1.5                                          the
Executive is guilty of any serious mis-conduct tending in the reasonable
opinion of the Board to prejudicially affect the interests or reputation of the
Company or any Group Company;

18.1.6                                          The
Executive shall perform his duties in a manner which falls substantially below
acceptable levels of competence, after being given due and proper warning;

18.1.7                                          being
suspended/disqualified by any relevant regulatory authority which would prevent
the Executive from carrying out his duties;

18.1.8                                          the
Executive shall be or become prohibited by law from being a director;

18.1.9                                          the
Executive shall resign as a director of the Company or any Group Company
without the consent of the Board;

then the Company shall be
entitled by written notification  to the
Executive to forthwith determine his employment under this Agreement. In the
event of termination pursuant to this sub-clause 18.1 the Executive shall have
no claim against the Company or any Group Company for pay in lieu of notice or
damages or otherwise by reason of such termination. The provisions of this
sub-clause 18.1 are without prejudice to any rights, which the Company may have
at common law to terminate the employment of the Executive summarily.

18.2                          Notwithstanding
Clause 5.1, the Company may terminate this Agreement by notice of not less than
one week plus the statutory minimum notice given at any time whilst the
Executive is incapacitated by ill health or accident from performing his duties
under this Agreement and he has been so incapacitated for any period of more
than 6 months or for periods aggregating 9 months in the preceding period of 24
months, provided that the Company shall withdraw any such notice if during the
currency of the notice the Executive returns to full time duties and provides a
medical practitioner’s certificate satisfactory to the Board to the effect that
he has fully recovered his health and no recurrence of his illness or
incapacity can reasonably be anticipated;

18.3                          Upon
whichever is the first to occur of (a) the Company exercising its rights
pursuant to Clause 6 (Garden Leave),
and requesting the Executive’s resignation,(b) termination howsoever
arising of his employment and/or this Agreement, or (c) upon request, the
Executive shall immediately tender his resignation from all offices he holds in
the Company and in any Group Company without prejudice to any other rights
accruing to either party hereto and without claim for compensation. In the
event of the Executive 

                                               failing
so to resign as required herein, the Company is hereby irrevocably authorised
to appoint some person in his name and on his behalf to sign and deliver such
resignations.

18.4                           After
the termination of the Executive’s employment hereunder he shall not at any
time thereafter represent himself as being in any way connected with or
interested in the business of or employed by the Company or any Group Company
other than as a shareholder; or use for trade or other purposes the name of the
Company or any Group Company or any name capable of confusion therewith other
than as a shareholder.

18.5                           The
Executive will both during and at any time after the termination of his
employment under this Agreement provide the Company or any Group Company with
such assistance as it may require in the conduct of such proceedings in any
Court, Tribunal or other body of competent jurisdiction as may arise in respect
of which the Company or any Group Company or its or their legal advisers
believe the Executive may be able to provide assistance. The Company shall pay
the Executive’s reasonable expenses necessarily incurred in providing such
assistance.

18.6                           The termination of the
Executive’s employment hereunder for whatever reason shall not affect those
terms of this Agreement which are expressed to have effect thereafter and shall
be without prejudice to any accrued rights or remedies of the parties.

18.7                           Save as otherwise expressly
provided in this Agreement, upon termination of the Executive’s employment
howsoever arising the Executive shall have no rights as a result of this
Agreement or any alleged breach of this Agreement to any compensation under or
in respect of any share or bonus plan in which he may participate or have
received grants or allocations at or before the Termination Date. Any rights
which he may have under such plans shall be exclusively governed by the rules of
such plans.

18.8                           The Executive agrees that
after termination, howsoever occurring, he will not make or publish any
adverse, derogatory, misleading or untrue comments on the Company or any member
of the Group, and members of their respective Board of Directors or any of
their employees and agrees that he will not take part in any conduct conducive
or potentially conducive to the bringing of the Company or any member of the
Group its directors and/or employees into disrepute.

19                                  Return
of Company Property

19.1                           Upon
whichever is the first to occur of (a) the Company exercising its rights
pursuant to Clause 6 or (b) termination howsoever arising of his
employment and/or this Agreement, the Executive shall subject to clause 20.2
upon demand:

19.1.1                                          deliver
up to the Company Secretary all property in his possession or under his control
belonging to the Company or any Group Company including but nor limited to all
motor cars, credit cards, keys and passes, equipment, details of client
records, Company manuals, records made by the Executive in the course of his
employment, address lists, address books, diaries, computer lists, disks,
programmes and software, correspondence, documents, 

                                                                        books,
papers, files, records, training records and reports and other property or
material belonging to or relating to the business of the Company and any Group
Company or their suppliers or clients which may have come into his possession,
custody or control in the course of or in consequence of his employment (and
whether or not belonging to the Company or any Group Company) and the Executive
shall not be entitled to and shall not retain any copies thereof in whatever
form

19.1.2                                          irrevocably
delete any information belonging to the Company or any Group Company from any
computer system in his possession or under his control which computer system is
not directly or indirectly the property of the Company or any Group Company.

19.2                           The
Executive will, on being requested to do so, send to the Company addressed to
the Board a signed statement confirming that he has complied with the
obligations in clause 19.1 above.

19.3                           Where
the Company exercises its rights pursuant to Clause 6 the Executive shall not
be obliged to return any property provided to him as a contractual benefit. The
Executive shall return such property forthwith on the termination of this
Agreement.

20                                  Grievance
and Disciplinary Procedure

20.1                           The
Executive is subject to the Company’s disciplinary rules and disciplinary
procedures in force from time to time. Such rules and procedures shall not
form part of the Executive’s contract of employment.

20.2                           The
Company reserves the right to suspend the Executive for the purposes of
investigating any allegation of misconduct or breach of this Agreement. The
period of suspension shall not normally exceed one month. Whilst suspended the
Executive shall continue to be entitled to his salary and all other contractual
benefits. During any period of suspension pursuant to this clause the Executive
shall not, except with the prior written consent of the Board attend any
premises of the Company or any Group Company, conduct any business on behalf of
the Company or any Group Company or contact any employee or customer of the
Company or any Group Company.

20.3                           If the
Executive wishes to seek redress of any grievance relating to his employment he
should refer such grievance to the Board. Appeal against warnings issued under
the disciplinary or performance improvement procedures should be notified to
the Company Secretary, in writing, within five working days of receipt of the
warning setting out in full the grounds of the Executive’s appeal.

21                                  Data
Protection

The Executive agrees to acquaint himself with and
abide by the Company’s Data Protection Policy from time to time in force,
breach of which will be treated as a serious disciplinary matter, which may
result in his dismissal.

22                                  Share
Dealings

22.1                           The Executive shall comply, where relevant, with
every rule of law, every 

                                                requirement of the London Stock Exchange and every regulation of the Company from time to
time in force in relation to dealings in shares, debentures or other securities
of the Company or any Group Company and unpublished price sensitive information
affecting the shares, debentures or other securities of any other company and,
in relation to overseas dealings, the Executive shall also comply with all laws
of the state and all regulations of the stock exchange, market or dealing
system in which such dealings take place.

22.2                           The Executive shall not (and shall procure so far
as he is able that his spouse and children shall not) deal or become or cease
to be interested (within the meaning of Part I of Schedule XIII to the
Companies Act 1985) in any securities of the Company except in accordance with
any Company rules or guidelines from time to time relating to securities transactions
by directors.

23                                  Reconstruction
or Amalgamation

If the employment of the
Executive under this Agreement is terminated by reason of the liquidation of
the Company for the purpose of reconstruction or amalgamation and the Executive
is offered reasonable alternative employment with any concern or undertaking
resulting from the reconstruction or amalgamation on terms and conditions not
less favourable than the terms of this Agreement then the Executive shall have
no claim against the Company in respect of the termination of his employment
under this Agreement.

24                                  General

24.1                           No
failure or delay by the Company in exercising any right, power or privilege
under this Agreement shall operate as a waiver thereof nor shall any single or
partial exercise by the Company of any right, power or privilege preclude any
further exercise thereof or the exercise of any other right, power or
privilege.

24.2                           There
are no collective agreements which directly affect the terms and conditions of
the Executive’s employment.

25                                  Notices

25.1                           Any
notice or other communication given or made under this Agreement shall be in
writing and may be delivered to the relevant party or sent by first class
prepaid letter to the address of that party specified in this Agreement or to
that party’s facsimile number thereat or at such other address or facsimile
number as may be notified by that party from time to time for this purpose. Service
at the last notified address or facsimile number shall be effective for the
purposes of this Agreement notwithstanding the fact that either party may
subsequently have changed its address or facsimile number without having
notified the other party under the provisions of this clause.

25.2                           Unless
the contrary shall be proved each such notice or communication shall be deemed
to have been given or made and delivered, if by letter, 72 hours after posting
and, if by delivery or facsimile, when respectively delivered or transmitted.

26                                  Other
Agreements

This
Agreement supersedes all other agreements other than those expressly referred
to in this Agreement whether written or oral between the Company or any Group
Company and the Executive relating to the employment of the Executive and the
Executive acknowledges and warrants to the Company that he is not entering into
this Agreement in reliance on any representation not expressly set out herein.

27                                  Governing
Law

This
Agreement shall be governed by and construed in all respects in accordance with
English law and the parties agree to submit to the non-exclusive jurisdiction
of the English courts as regards any claim or matter arising in respect of this
Agreement.

28                                  Power
Of Attorney

The
Executive hereby appoints the Company to act as his attorney with authority in
his name and on his behalf to execute any deed or instrument and/or any such
thing and generally to use his name for the purposes of resigning as a director
of the Company and taking such steps as are necessary to implement the
Executive’s obligation under clause 15. The Executive hereby declares that this
Power of Attorney is given to secure his obligations under this Agreement and
shall be irrevocable in accordance with Section 4 of the Powers of
Attorney Act 1971.

29                                  Execution

This
Agreement may be executed in two or more counterparts and the counterparts shall
together constitute one agreement provided that each party has executed one or
more counterparts.

In witness whereof
this Agreement has been duly executed by the parties as a deed the day and year
first above written.

	
  Executed by as a deed

  	
  )

  	
   

  
	
  by SKYEPHARMA PLC

  	
  )

  	
  . . . . . . . . . . . . . . . . . . . . . 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  . . . . . . . . . . . . . . . . . . . . . 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Director/Secretary

  
	
   

  	
   

  	
   

  
	
  Signed and
  delivered as a deed

  	
  )

  	
   

  
	
  by the said FRANK CONDELLA

  	
  )

  	
   

  
	
  in the presence
  of:

  	
  )

  	
   

  

 

Witness signature:

Witness name:

Witness address:

Witness
occupation:Exhibit
4.2.3

	
   

  	
  STRINGER SAUL LLP

  

DATED 1 MARCH 2006

(1)  SKYEPHARMA PLC

and

(2)  DR KENNETH
CUNNINGHAM

SERVICE
AGREEMENT

17 Hanover
Square  London  W1S 1HU

Tel: 020 7917 8500  Fax: 020 7917 8555

This Agreement is made on
the 1 day of March 2006

BETWEEN:

1.                                       SKYEPHARMA PLC a company incorporated within England and
Wales (registered number company No.00107582) whose registered office is at 105
Piccadilly, London W1J 7NJ (the “Company”)

and

2.                                       DR KENNETH CUNNINGHAM of Springwood House, Penn Road,
Beaconsfield, Buckinghamshire HP9 2TS (“the
Executive”)

IT IS
HEREBY AGREED AS FOLLOWS:

1                                         Interpretation

1.1                                 In
this Agreement the following words and expressions shall have the following
meanings:

1.1.1                                                “Group
Company” - a company which is from time to time a Subsidiary or a Holding
Company of the Company or a Subsidiary (other than the Company) of a Holding
Company of the Company

1.1.2                                                “Group”
the Company and any Group Companies from time to time;

1.1.3                                                “the
Board” - the board of directors from time to time of the Company including any
committee of the board duly appointed by it;

1.1.4                                                “Subsidiary”
and “Holding Company” - the meanings respectively ascribed thereto by s. 736 of
the Companies Act 1985 as originally enacted;

1.1.5                                                “the
ERA”- the Employment Rights Act 1996; and

1.1.6                                                “Termination
Date” means the date of termination of the Executive’s employment.

1.2                                 References
in this Agreement to statutes shall include any statute modifying, re-enacting,
extending or made pursuant to the same or which is modified, re-enacted, or
extended by the same.

1.3                                 Headings
are for ease of reference only and shall not be taken into account in the
construction of this Agreement.

2                                         Appointment

2.1                                 The
Company hereby appoints the Executive and the Executive agrees to serve the
Company as Chief Operating Officer or in such position as the Board may specify
from time to time in its absolute discretion. It is the intention that the
Executive will be appointed as a Director of the Company by not later than 31 July 2006.
Any breach by the Company of the obligation to 

                                                appoint
the Executive as a director by 31 July 2006 shall be regarded as a
repudiatory breach of contract by the Company.

2.2                                 The Company may from time to time appoint any
other person or persons to act jointly with the Executive.

2.3                                 If the Executive is unable to fully carry out
his duties for whatever reason the Company may, at its absolute discretion,
engage or employ any other person or persons to perform some or all of the
Executive’s duties on a temporary basis until the Executive is able fully to
resume the proper performance of his duties hereunder.

2.4                                 Nothing in this Agreement shall mean or be
deemed to mean that the Company is obliged to provide work to the Executive or
that the Executive has the right to perform services for the Company or the
Group Company.

3                                         Secondment

The Company shall be entitled to second the Executive’s
services on a full or part time basis to any Group Company and the Executive
shall hold such offices of the Company and of any Group Company and perform
such duties and fulfil such obligations for a Group Company for such periods as
the Company may require but such secondments shall not release the Executive or
the Company from their respective obligations under this Agreement.

4                                         Warranties On Appointment

4.1                                 The
following warranties will be deemed to be given by the Executive to the Company
on the date of this Agreement and the said warranties will be deemed to
continue to be accurate during the course of the Executive’s employment under
this Agreement until and unless he informs the Board in writing to the
contrary: -

4.1.1                                                to
the best of his knowledge he is physically and mentally fit to be employed by
the Company. He will disclose to the Board or to the Company’s nominated doctor
any information, which may lead the Company to believe otherwise. He hereby
consents to the disclosure of his medical records on request by the Company at
any time prior to or during the course of his employment hereunder;

4.1.2                                                he
is legally entitled to reside and work in the United Kingdom and will produce
to the Company (who will take copies of the same) before commencement of his
employment all documents that the Company reasonably requires to ensure its
compliance with the provisions of the
Asylum and Immigration Act 1996.

4.1.3                                                by
accepting the terms of this Agreement he will not thereby breach any express or
implied term of any other contract and he agrees to indemnify the Company
against all costs claims or demands suffered by it as a result of any such
breach or any allegation of such a breach;

4.1.4                                                he
has disclosed to the Board all information which might lead to a conflict
between his personal interests and the interests of the Company in the light of
his knowledge of the Company’s current plans and activities. The said
declaration includes without limitation a list of all his current substantial
shareholdings directorships, partnerships and appointments;

4.1.5                                                the
contents of his CV and any other documents which he has disclosed to the
Company concerning his past history are true;

4.1.6                                                he
holds and will continue to hold any qualifications which he has indicated to
the Company that he holds and any qualifications which the Company has indicated
to him as being necessary for the performance of his duties under this
Agreement;

4.1.7                                                he
knows of no circumstances which could either:

4.1.7.1                                                               lead
to a claim by a third party against the Company as a result of something done
by  him; or

4.1.7.2                                                               be
viewed by the Company as a breach by him of his obligations under any
employment agreement with the Company.

5                                         Term
of Appointment

5.1                                 Subject
to clause 18 hereof, the Executive’s employment shall commence on 24 April 2006
and continue until terminated by the Company giving to the Executive not less
than twelve months written notice, or by the Executive giving to the Company
not less than six months written notice.

5.2                                 Once
notice to terminate has been given by either party in accordance with clause
5.1 hereof, or any other purported termination of the Agreement by either party
or if notice of a shorter period than that required by clause 5.1 hereof has
been given, the Company reserves the right, exercisable in its absolute
discretion, to terminate the Executive’s employment by making a payment in lieu
of the notice required by clause 5.1 or any unexpired part of such notice.

5.3                                 Any
payment in lieu of notice shall consist of a sum equivalent to the Executive’s
basic salary (at the rate applicable at the date notice is given) and the
following benefits provided by the Company: car allowance, pension contributions,
and any insurance benefits which the Executive is receiving at the date notice
is given, or a payment of the monetary value in lieu thereof, for the notice
period required by clause 5.1 or any unexpired period thereof and shall be
subject to such statutory deductions as the Company is required to make. For
the avoidance of doubt, the payment in lieu of notice shall not include any
benefits not specified in this clause 5.3, or entitlement to annual or other
bonuses or any rights under the Company’s share plans from time to time.

5.4                                 The
Company reserves the right to make such payment in lieu of notice (or any part
thereof) in equal instalments at monthly intervals in advance during 

                                                the
relevant period. The Executive undertakes to inform the Company in writing as
soon as he receives an offer of suitable alternative employment during the
relevant period and of the amount of the salary and benefits he will be
entitled to receive and to commence that employment as soon as is reasonably
practicable. The Executive agrees that the amount of the payment in lieu of
notice shall be reduced or extinguished by the gross amount of any monies
payable and the value of any benefits provided directly or indirectly to the
Executive arising out of such alternative employment with effect from the first
day of his paid alternative employment and the Executive undertakes to repay to
the Company within 14 days of receipt any monies paid in advance which relate
to any period of paid alternative employment. The Executive agrees to provide
to the Company within 14 days of written demand for the same written evidence
(in a form reasonably satisfactory to the Company) of salary and benefits
received by the Executive from his new employment during the relevant period.

5.5                                 In
the event that the employment of the Executive is terminated by the Company
without notice on or before 31 July 2006 (other than for one of the
reasons detailed in clause 18.1 hereof) the Company will pay to the Executive a
lump sum payment in lieu of 12 months’ notice within 28 days of the Termination
Date.

5.6                                 In
the event that the employment of the Executive is terminated by the Company on
or after 1 August 2006 without notice (other than for one of the reasons
detailed in clause 18.1 hereof) the Company will pay to the Executive a lump
sum payment in lieu of 6 months’ notice within 28 days of the Termination Date
and the remaining balance of six months’ notice will be paid in instalments
starting 6 months after the Termination Date, pursuant to clause 5.4 above.

5.7                                 In
the event that the employment of the Executive is terminated by the Company on
or after 1 August 2006 on notice (other than for one of the reasons detailed
in clause 18.1 hereof) the Company will be entitled to place the Executive on
Garden Leave for up to 6 months (pursuant to clause 6 hereof), and will pay to
the Executive a lump sum payment in lieu of 6 months’ notice within 28 days of
the Termination Date and the remaining balance of notice (if any) will be paid
in instalments starting 6 months after the Termination Date, pursuant to clause
5.4 above.

5.8                                 For
the avoidance of doubt:

5.8.1                                                If
the Company terminates the Executive’s employment other than in accordance with
its rights under this Agreement any entitlement to damages for breach of
contract will be assessed on the normal common law principles (including the
Executive’s obligation to mitigate his loss); and

5.8.2                                                The
right of the Company to make a payment in lieu of notice does not give rise to
any right for the Executive to receive such a payment.

5.9                                 The
Executive’s continuous employment with the Company will begin on 24 April 2006.
No employment with a previous employer will count as part of the Executive’s
period of continuous employment with the Company.

5.10                          The
Executive’s employment will terminate automatically without notice being given
on his 65th birthday.

6                                         Garden
Leave Provision

6.1                                 The
Company reserves the right where either party to this Agreement gives notice
(including short or no notice) to terminate this Agreement or otherwise
purports to terminate the Executive’s employment, to:

6.1.1                                                exclude
the Executive from all or any of the Company or any Group Company’s places of
business; or

6.1.2                                                to
require him to attend one of the Group Company’s offices to carry out special
projects which are reasonably commensurate with his position and within his
skill and competence as directed by the Board; or

6.1.3                                                to
forbid him to contact the employees, clients or suppliers of the Company or any
Group Company, in relation to the business of the Company or any Group Company
with which he was concerned in the 12 months prior to being put on garden leave

for period(s) of up
to 6 months of the Executive’s contractual notice period (the “Garden Leave
Period”).

6.2                                 Where
the Company exercises its rights under clause 6.1 above, it is relieved from
any obligation whatsoever to provide the Executive with work to do, or to allow
the Executive access to any premises of the Company or any Group Company, or to
have contact with or dealings with employees, clients or suppliers of the
Company or any Group Company in relation to the business of the Company or any
Group Company, or to allow the Executive to carry out his normal duties and the
Executive’s normal duties under this Agreement will be suspended during such
period.

6.3                                 During
any Garden Leave Period the Executive will, if requested, remain readily
contactable by providing telephone and other contact details and be available
to work for the Company save when the Executive is on holiday by prior
agreement with the Company.

6.4                                 During
the Garden Leave Period the Executive’s salary and all other contractual
benefits shall not cease to be payable or provided by reason only of the
Company exercising its rights pursuant to sub clauses 6.1 and 6.2 of this
Clause 6. The Executive’s holiday will continue to accrue during the Garden
Leave period subject to clause 6.6 hereof. This Clause shall not affect the
general right of the Company to suspend in accordance with Clause 20.2 nor
affect the rights and obligations of the parties prior to the service of such a
notice.

6.5                                 During
the Garden Leave Period the Executive remains an employee of the Company and is
bound by the terms of this Agreement (other than to perform work for the
Company unless specifically required to do so). In particular, the Executive
remains bound by his obligations of confidentiality, loyalty, good faith, and
exclusive service to the Company, including those obligations set out in
clauses 7 which obligations, inter alia, preclude the Executive from taking up
any other employment during the Garden Leave Period if it would conflict with
such obligations.

6.6                                 The
Company reserves the right to require the Executive to take any accrued or
outstanding holiday entitlement during the Garden Leave period.

7                                         Powers,
Duties, Workplace and Working Hours

7.1                                 During
the continuance of his employment hereunder the Executive shall owe a duty of
fidelity and good faith to the Company which shall include the following:

7.1.1                                                unless
prevented by ill health or other unavoidable cause during Normal Working Hours
(as defined in clause 7.3) the Executive shall devote the whole of his working
hours and of his attention and abilities to carrying out his duties hereunder
and to the business of the Company and any Group Company, and use his best
endeavours to develop the business and interests of the Company and any Group
Company and will not extend, develop or evolve the business of the Company and
any Group Company other than through the Company and any Group Company and will
bring to the attention of the Company any relevant business opportunities for
the Company or any Group Company of which the Executive becomes aware;

7.1.2                                                the
Executive shall diligently and faithfully serve the Company and its Group
Companies to the best of his ability and carry out his duties in a proper and
efficient manner and use his best endeavours to promote and maintain the
interests and reputation of the Company and of its Group Companies;

7.1.3                                                the
Executive shall exercise such powers and perform such duties in relation to the
business of the Company and/or of its Group Companies as may from time to time
be vested in or assigned to him by the Board;

7.1.4                                                the
Executive shall comply with all reasonable requests and directions from time to
time given to him by the Board and with all rules and regulations from
time to time laid down by the Company concerning its employees;

7.1.5                                                the
Executive shall keep the Board promptly and fully informed (in writing if so
requested) of his conduct of the business or affairs of the Company and/or its
Group Companies and provide such explanations as the Board may reasonably
require;

7.1.6                                                the
Executive shall not at any time directly or indirectly and whether on his own
behalf or on behalf of any third party entice or encourage or seek to entice or
encourage any other employee of the Company or any other Company in the Group
to leave their employment;

7.1.7                                                the
Executive shall not at any time directly or indirectly and whether on his own
behalf or on behalf of any third party entice or encourage or seek to entice or
encourage any other consultant or contractor of the Company or any other
Company in the Group to leave their engagement;

7.1.8                                                the
Executive shall promptly disclose to the Board any of the following information
which comes into his possession during his employment:

7.1.8.1                                                               the
plans of any employees to leave the Company or any Group Company (whether alone
or in concert with other employees);

7.1.8.2                                                               the
plans of any employee (whether alone or in concert with other employees) to
join a competitor or to establish a business in competition with the Company or
any Group Company;

7.1.8.3                                                               any
steps taken by any employee to implement either of such plans in clause
7.1.8.1. and 7.1.8.2 above, including but not limited to any attempts to
approach or solicit clients or customers of the Company or any Group Company;

7.1.8.4                                                               the
misuse by any employee or any third party of any confidential information (as
defined in clause 17) belonging to the Company or any Group Company;

7.1.8.5                                                               the
misconduct of any employee or consultant or agent of the Company.

7.1.9                                                the
Executive shall be obliged to make disclosure under clause 7.1.6 notwithstanding
that to do so would involve disclosure of information pertaining to the
Executive’s own activities, including breaches by him of his contract of
employment;

7.1.10                                          not
at any time to knowingly make any untrue or misleading statements in any media
relating to the Company or any Group Companies or do anything that is harmful
to the Company or any Group Company or any employee, clients or suppliers;

7.1.11                                          inform
the Company Secretary of any change in his home address or telephone number,
bank or building society details (for payment purposes) relevant qualifications
and licences or any criminal charges or convictions.

7.2                                 Subject
to clauses 2.4 and 3 the Executive’s normal place of work shall be the Company’s
premises at 105 Piccadilly, London W1V 9FN but the Company reserves the right
to require the Executive to change his normal place of work to such other
premises of the Company or Group Company within the Home Counties of the United
Kingdom as the Company may from time to time require. The Executive will be
required to travel to such places (both within and outside the UK) in such
manner and on such occasions as the Company may from time to time be required
for the proper performance of his duties.

7.3                                 In
performing his duties, the Executive may be required to work outside the UK for
consecutive periods of up to two months. In that event, the Executive’s
remuneration will continue to be paid by the Company in accordance with this
Agreement and there will be no changes to his other benefits, save as may be
notified to him.

7.4                                 Subject
to clauses 2.4 and 3, the Executive’s normal working hours shall be five days
each week from 9 am to 5.30 pm with a one-hour break for lunch together with
such additional hours outside these hours as may be necessary for the proper
and efficient performance of the Executive’s duties. No payment will be made
for any additional hours worked by the Executive, nor will time off in lieu be
permitted except with the agreement of the Board.

8                                         Working
Time Regulations Opt-Out

The Executive accepts
that by signing this agreement he has agreed that regulation 4(1) of the
Working Time Regulations 1998 (which limits the Executive’s working time to an
average of 48 hours for each 7 days) shall not apply. The Executive accepts that
this opt-out will be for an indefinite period but may be terminated by the
Executive giving 3 months written notice of termination of the opt-out to the
Company at any time

9                                         Restrictions
During Employment

The Executive shall not
during the continuance of his employment hereunder (whether during or outside
of his employment or his working hours) without the prior consent in writing of
the Board either alone or jointly with or on behalf of the another and whether
directly or indirectly and whether as principal, partner, agent, shareholder,
director, employee, consultant or otherwise howsoever shall not engage in,
carry on or be interested or concerned in any other business, trade,
profession, occupation or fee-earning activity which is similar to or competes
with or may compete with the business of the Company or any Group Company or
which may, in the opinion of the Board, cause a conflict of interest in
connection with the Executive’s duties to the Company or any Group Company. This
shall not preclude him from holding not more than three per cent of any class
of issued shares or other securities which are listed or dealt in on any
recognised stock exchange by way of bona fide investment only.

10                                  Remuneration

10.1                          During
his appointment the Company shall pay the Executive a basic salary at the rate
of £250,000 per annum which shall accrue from day to day. Salary will accrue
from day to day and shall be payable in equal monthly 

                                               instalments
in respect of the current month, on or before the last day of each month or the
nearest working day thereto and shall be subject to all lawful deductions. The
salary shall be deemed to include any fees receivable by the Executive as a
Director of the Company or any Group Companies.

10.2                           For the
purposes of the ERA the Executive authorises the Company at any time during his
employment, and in any event upon termination howsoever arising, to deduct from
the Executive’s remuneration under this Agreement any sums from time to time
owed by him to the Company or any Group Company, including but not limited to
any outstanding loans, advances, excess holiday, the cost of repairing any
damage or loss of the Company’s property caused by the Executive (and of
recovering it) and any other monies owed by the Executive to the Company.

11                                  Expenses

The Company shall
reimburse to the Executive all travelling, hotel, entertainment and other
out-of-pocket expenses reasonably incurred by him in the proper performance of
his duties hereunder subject to his compliance with the Company’s guidelines as
amended from time to time relating to expenses and to the production (if
required) of receipts, vouchers or other evidence of actual payment of the
expenses.

12                                 Benefits

Pension

12.1                           The
Executive is eligible to participate in the Company’s stakeholder compliant
pension scheme (“the Scheme”) subject to the rules of the Scheme for the
time being in force. Brief details of the Scheme a can be obtained from the
Company Secretary. The Company reserves the right at any time to change the rules of
the Scheme, to terminate its participation in the Scheme or to substitute
another pension scheme.

12.2                           The
Company will pay contributions at the rate of an amount equivalent to 17.5% per
annum of the Executive’s basic salary to an Inland Revenue approved personal
pension scheme of his choice.

12.3                           There
is not a contracting-out certificate in force in respect of the Executive’s
employment.

Car Allowance 

12.4                           The
Executive will receive a car allowance of £9,000 per annum. This will be paid
in 12 equal monthly instalments net of tax and National Insurance contributions
with the Executive’s salary each month.

Life Assurance

12.5                           The
Company shall pay the premiums for providing the Executive with Life Assurance
cover of four times his annual salary payable under clause 10.1, subject to any
limits imposed by HM Revenue a & Customs from time to time, to the
approval of the Company’s insurers to provide such insurance on terms 

                                                considered
reasonable by the Company and any terms and conditions they may impose and to
the rules of the Policy from time to time in force. The Executive agrees
to undergo a medical examination if required to obtain such insurance cover.

Other Insurances

12.6                           During
the period of this Agreement, the Executive shall be entitled to participate in
any private medical expenses insurance, permanent health insurance and critical
illness insurance schemes which the Company may make available to employees of
the Executive’s status and which the Board expressly offer to the Executive. Any
such participation shall be subject to and in accordance with the rules of
the relevant scheme from time to time in force and participation in any such
scheme shall not affect the right of the Company to terminate the employment
under any other provision of this Agreement.

12.7                           The
Company will have not liability to pay any benefit to the Executive under any
scheme referred to in clause 12 above, unless it first receives payment of the
benefit from the insurers of the benefits under the relevant scheme.

12.8                           Any
benefits provided by the Company or any Group Company to the Executive which
are not expressly referred to in this Agreement shall be regarded as ex gratia
and made at the absolute discretion of the Company and shall not confer any
contractual entitlement upon the Executive.

Participation in Share
Plans and Bonus Arrangements

12.9                           The
Executive shall be entitled to participate in any bonus or share plan operated
by the Company from time to time at a level commensurate with his position in
the Company subject always to the rules of the relevant plan from time to
time. For the avoidance of doubt and without prejudice to the generality of the
foregoing the Executive will currently be entitled to participate in the
following arrangements:-

The SkyePharma PLC
Deferred Share Bonus Plan;

The SkyePharma PLC
2004 Long-Term Incentive Plan; and

The SkyePharma PLC
International Share Purchase Plan.

Under the SkyePharma PLC Deferred Share Bonus Plan the Executive’s
current maximum annual bonus potential will be 100% of his basic annual salary
from time to time.

Special Share
Purchase & Matching Clause

12.10                     The Company
requires executives at this level to hold a significant number of shares in the
capital of the Company. In the case of the Chief Operating Officer, the target
for share ownership is shares in the Company with an aggregate purchase price
of 2 x the Executive’s annual salary (as specified in clause 10.1), such target
to be achieved within 3 years of the date his employment with the Company
started. If the Executive acquires ordinary shares in the Company during 

                                                the
period commencing on 6 February 2006 and finishing prior to 24 February 2006,
the number of shares acquired during this period with an aggregate purchase
price up to a maximum of 1/3rd of the Executive’s salary as set out in Clause
10.1 of this Agreement (the “Executive Shares”), shall qualify for an award of
shares provided by the Company (“Matching Shares”). After completion of this
Agreement, the Company will grant an award of Matching Shares as soon as
practicable after the acquisition of the Executive Shares. The maximum Matching
Share award shall be 2 Matching Shares for every Executive Share. The minimum
Matching Share award shall be one Matching Share for every Executive Share.  Matching Shares shall be released as follows:-

12.10.1                                    50%
of the total number of Matching Shares granted shall be released to the
Executive on the first anniversary of their date of grant subject to the
Executive satisfying the following conditions:-

12.10.1.1                                                   continued
employment by a Group Company over this period; and

12.10.1.2                                                   retention
of his associated Executive Shares over this period;

12.10.2                                    the
balance of Matching Shares not released in accordance with clause 12.10.1 above
shall be released to the Executive on the second anniversary of their date of
grant subject to the Executive satisfying the following conditions:-

12.10.2.1                                                   continued
employment by a Group Company over this period; and

12.10.2.2                                                   retention
of his associated Executive Shares over this period.

It should be noted that
this Clause is a summary of the Share Purchase & Matching Agreement.
If there is any conflict between this Clause and the terms of the Share
Purchase & Matching Agreement, the terms of the Share Purchase &
Matching Agreement shall have precedence. In the event that the Executive’s
employment is terminated by the Company (other than for one of the reasons
detailed in clause 18.1 hereof) the Company will ensure that shares purchased
by the Executive between 6 and 24 February 2006 shall be matched by the Company
on a one for one basis.

13                                  Holidays

13.1                           The Company’s
holiday year runs from 1 January to 31 December (“Holiday Year”).

13.2                           In
addition to normal bank and other public holidays in England, the Executive
shall be entitled in every Holiday Year to 25 working days paid holiday which
shall be calculated pro rata, to be taken at such time or times as may be
approved by the Chairman of the Board (“the Chairman”). As much notice as
possible should be given and no firm arrangements made until the Chairman’s agreement
has been given. For the purposes of the Working Time Regulations, the Executive
is required to take a minimum of 20 

                                                days
holiday (pro rata) including normal bank and public holidays in England in each
Holiday Year.

13.3                           The
Executive may, with the consent of the Chairman, carry forward up to 5 days of
his annual holiday entitlement to the next Holiday Year. No payment in lieu of
untaken holiday entitlement will be made except in accordance with clause 13.4.

13.4                           Paid
holiday entitlement shall accrue at the rate of 2.08 working days per month of
completed service in each calendar year and on the determination of his
employment hereunder the Executive shall be entitled to pay in lieu of
outstanding holiday entitlement in respect of that calendar year or shall be
required to repay to the Company for holiday taken in excess of his actual
entitlement and for the purposes of this clause the basis of calculation shall
be 1/260 annual salary for each day’s holiday entitlement. The Company reserves
the right to require the Executive to take any accrued unused holiday
entitlement during his period of notice.

13.5                           The
Executive may not convert a period of holiday into a period of absence due to
sickness or injury if he becomes incapacitated immediately before or during a
period of holiday, without the prior agreement of the Board.

13.6                           If the
Executive is dismissed and the principal reason for his dismissal is misconduct
or if the Executive fails to give sufficient notice to terminate his
employment, the Executive will not be entitled to any payment in lieu of any
accrued holiday entitlement in excess of the statutory minimum to which he is
entitled under the Working Time Regulations 1998.

14                                  Incapacity

14.1                           If the
Executive is absent from work due to illness or accident he shall notify the
Chairman as soon as possible and if this incapacity continues for seven or more
consecutive days he shall on the seventh day of such absence and on each
succeeding seventh day submit a doctor’s certificate to the Company. If the
Executive is absent from work for less than seven days, the Company may require
the Executive to provide a sickness report form as evidence of his illness or
incapacity.

14.2                           Without
prejudice to the Company’s right to terminate this Agreement pursuant to clause
18.2, if the Executive is absent from work due to Incapacity duly notified and
certified in accordance with clause 14.1 the Company will pay the Executive’s
remuneration and benefits due under this Agreement for a maximum of a total
aggregate period of 90 working days in any period of 12 calendar months. Thereafter,
the payment of remuneration and provision of benefits shall be at the absolute
discretion of the Company. Exercise of discretion on one occasion, shall not
imply a contractual entitlement.

14.3                           The
remuneration paid under clause 14.2 for absence due to Incapacity shall include
any statutory sick pay (SSP) payable and when this is exhausted shall be
reduced by the amount of social security sickness benefit or other benefits
recoverable by the Executive (whether or not recovered). For SSP purposes the
Executive’s qualifying days are Monday to Friday.

14.4                           For the
purposes of clauses 14.2 and 14.3 above, “Incapacity” shall mean any illness,
accident or other likely cause but excluding any illness or accident caused by
the Executive’s own negligence which prevents the Executive from performing his
duties hereunder.

14.5                           The
Company reserves the right to require the Executive at any time to submit
himself for examination by a doctor appointed by the Company at the Company’s
expense.

14.6                           If the
Executive is caused to be incapable of performing his duties and
responsibilities hereunder by a third party and the Company wishes to bring an
action against such third party the Executive will (at the Company’s expense)
provide all such assistance and co-operation as the Company may reasonable
require for the purpose of prosecuting such an action.

15                                  Inventions
and Improvements

15.1                           If the
Executive creates or discovers or participates in the creation or discovery of
any inventions or Intellectual Property during the course of his employment
with the Company, the Executive shall promptly give to the Company full details
of such inventions or Intellectual Property and if such inventions or Intellectual
Property in the opinion of the Company relate to or are capable of being used
in the business for the time being carried on by the Company or any Group
Company or if such inventions or Intellectual Property shall be an invention
belonging to the employer as defined in Section 39 (1) of the Patents Act 1977, then without prejudice to any other right
of the Company or any Group Company any such inventions or Intellectual
Property shall be the absolute property of the Company and the Executive shall
forthwith and from time to time both during his employment and thereafter at
the request and expense of the Company:

15.1.1                                          give
and supply all such information, data, drawings and assistance as may be
necessary to enable the Company to exploit such inventions or Intellectual
Property to the best advantage;

15.1.2                                          execute
all documents and do all things which may be necessary or desirable for
obtaining patent or other protection for the inventions or Intellectual
Property in such parts of the world as may be specified by the Company and for
vesting the same in the Company or as it may direct;

15.1.3                                          not
do any act or fail to do any act which might invalidate or adversely affect any
inventions or Intellectual Property.

15.2                           The
Executive irrevocably appoints the Company to be his attorney in his name and
on his behalf to sign execute or do any such instrument or thing and generally
to use his name for the purpose of giving to the Company (or its nominee) the
full benefit of the provisions of this clause 15 and in favour of any third
party a certificate in writing signed by any director or the Secretary of the
Company that any instrument or act falls within the authority conferred by this
clause shall be conclusive evidence that such is the case.

15.3                           The
Executive waives all of his moral rights as defined in the Copyright
Designs and Patents Act 1988 in respect of any acts of the Company
or any acts of third parties done with the Company’s authority in relation to
the inventions and Intellectual Property which are the property of the Company
(or are the property of the Company by virtue of clause 15.2 hereof).

15.4                           Rights
and obligations under this clause shall continue in force after termination of
this Agreement in respect of inventions or Intellectual Property made or
discovered during the Executive’s employment under this Agreement and shall be
binding upon his representatives.

15.5                           Any
legal proceedings issued by the Company or any Group Company in respect of any
infringement or dispute or threatened dispute or infringement will be conducted
at the Company’s discretion and expense and the Executive agrees to give all
reasonable assistance in any such legal proceedings.

15.6                           In this
clause 15, “Intellectual Property” includes letters patent, trade marks,
service marks, trade names, designs, utility models, copyrights (existing and
future), design rights, applications for registration of any of the foregoing
and the right to apply for them in any part of the world, moral rights,
inventions, improvements to procedures, confidential information, know-how, and
rights of like nature arising or subsisting anywhere in the world, in relation
to all of the foregoing, whether registered or unregistered.

16                                 Restrictions
After Employment

16.1                           For
the purposes of this clause the following definitions shall apply:

“Business”
shall mean the business of the
Company carried on by the Company at the Termination Date and during the period
of 12 months prior thereto in which the Executive had been involved
during the course of his employment at any time within a period of 12 months
before the Termination Date and any
other business of the Company or any Group Company carried on during
such period in which the Executive was involved during the course of his
employment at any time within a period of 12 months before the Termination
Date;.

“Client” shall mean any
person, firm, company or organisation to whom the Company or any Group Company
has supplied Services or with whom they have entered into licensing and/or
collaboration arrangements in relation to the Business within a period of 12
months before the Termination Date and with whom or which, during such period
the Executive had significant dealings in the course of the Executive’s
employment by the Company or any Group Company at any time within a period of
12 months before the Termination Date;

“Prospective Client”
means any potential client with whom, to the Executive’s knowledge the Company
or any Group Company has been in active negotiations for the supply of
Services, or in connection with licensing or collaboration arrangements at any
time within a period of 6 months before the Termination Date;

“Services” means any
product or service (including, without limitation, licensing and collaboration
arrangements) developed or being developed or marketed sold or provided by the
Company during the 12 months immediately preceding the Termination Date with
which the Executive’s duties were concerned or for which the Executive was
responsible or which was provided to the Executive’s knowledge during the 12
months immediately preceding the Termination Date;

“Supplier” shall mean the
suppliers of technical consultancy services, specialist laboratory equipment,
and/or the manufacturers of specialist raw materials and components to the
Company or any Group Company with whom the Executive had significant dealings,
in the course of his employment within a period of 6 months before the
Termination Date;

“Termination Date” shall
mean the date of termination of the Executive’s employment.

16.2                           In
order to protect the legitimate business of the Company and any Group Company
with which the Executive shall be significantly involved during the course of
his employment, the Executive hereby undertakes that (without the prior written
consent of the Board) he shall not:

16.2.1                                          for
a period of six months after the Termination Date whether directly or
indirectly in any capacity whatsoever (on his own behalf or on behalf of any
other person, firm or company) solicit or entice away or seek to solicit or
entice away from the Company or any Group Company whether by means of the
supply of names or expressing views on suitability or otherwise, any person who
is and was at the Termination Date employed or engaged by the Company or any
Group Company:

16.2.1.1                                                         as
a Director;

16.2.1.2                                                         as
a member of the Executive committee or as one of the direct reports to the
Executive committee; or

16.2.1.3                                                         in
a business development capacity;

and with whom the
Executive had dealings, in the course of his employment, within a period of 6
months before the Termination Date;

16.2.2                                          for
a period of 6 months after the Termination Date whether directly or indirectly
in any capacity whatsoever (whether on the Executive’s own behalf or on behalf
of any other person, firm or company) solicit or seek in any capacity
whatsoever any business, order or custom for any services which are competitive
with the Services from any Client or otherwise interfere with the relationship
between the Company or any Group Company and any Client;

16.2.3                                          for
a period of 3 months after the Termination Date whether directly or indirectly
in any capacity whatsoever (whether on the Executive’s own behalf or on behalf
of any other person, firm or 

                                                                        company)
solicit or seek in any capacity whatsoever any business, order or custom for any
services which are competitive with the Services from any Prospective Client or
otherwise interfere with the relationship between the Company or any Group
Company and any Prospective Client;

16.2.4                                          for
a period of 6 months after the Termination Date whether directly or indirectly
in any capacity whatsoever (whether on the Executive’s own behalf or on behalf
of any other person, firm or company) seek to entice away from the Company or
otherwise interfere with the terms of dealing or the relationship between the
Company and any Group Company and any Supplier;

16.2.5                                          for
a period of 6 months after the Termination Date whether directly or indirectly
in any capacity whatsoever (whether on the Executive’s own behalf or on behalf
of any other person, firm or company) carry on or be directly or indirectly
engaged or concerned or interested whether as principal agent, shareholder,
employee, consultant or otherwise in any business or concern which provides
services competitive with the Services and which competes with (or which is
intended once operational to compete with) the Business;

16.2.6                                          for
a period of 6 months after the Termination Date not to be employed or engaged
by a Client or a Prospective Client of the Company in any capacity in which the
Board believes that the Executive’s knowledge of the confidential information
of the Company (as defined in clause 17 of this agreement) may prejudice the
interests of the Company or any Group Company.

16.3                           After
the termination of the Executive’s employment, for any reason whatsoever the
Executive shall not for any reason represent himself as still connected with
the Company or any Group Company or as still authorised to conduct business on
behalf of the Company or any Group Company.

16.4                           The
periods of the restrictions referred to in the sub-clauses of clause 16.2 above
shall in each case be reduced by the period during which the Company exercises
its right to place the Executive on garden leave pursuant to Clause 6 hereof.

16.5                           The
Executive agrees and undertakes that in the event of receiving an offer of
employment or engagement during the continuance of this Agreement or during the
continuance in force of any of the restrictions set out in the clause 16, he
will forthwith provide to the offeror a copy of the restrictions in this
Agreement.

16.6                           Each of
the restrictions in the sub-clauses of this clause shall be construed as
separate and individual restrictions and shall each be capable of being severed
without prejudice to the other restrictions or the remaining provisions of this
Agreement.

17                                  Confidential
Information

17.1                           In
addition and without prejudice to the Executive’s common law obligations to
keep information secret the Executive shall not (except for the purpose of
properly performing his duties hereunder or with the prior express written
consent of the Company or unless ordered to do so by a Court) during his
employment or after its termination use, disclose or communicate and shall use
all reasonable endeavours to prevent the improper use, disclosure or communication
of:

17.1.1                                          any
information of a confidential nature (including but not limited to information
regarding the business, inventions or Intellectual Property, confidential unpublished information about
the business, accounts, finances, trading, data, surveys or results of any
trials, product formulations, details or lists of Clients or Prospective
Clients and their contact details and their requirements, the prices charged to
and terms of business with the Company’s suppliers, future strategies, marketing
and sales plans, sales forecasts, product information, marketing plans and
sales forecasts, financial information, results and forecasts (save to the
extent that these are included in published audited accounts) business
development plans and strategies, commercial strategies, any information which
has been given to the Company in confidence by any of it’s Clients, Suppliers
or other persons, details of employees, and contractors, software, marketing
strategies of the Company or any Group Company;

17.1.2                                          any
confidential report or research undertaken by or for the Company or any Group
Company during the course of his employment;

17.1.3                                          any
information designated as confidential by the Company or any Group Company or
which to his knowledge has been supplied to the Company or any Group Company
subject to an obligation of confidentiality.

17.2                           In this
clause “information” and “confidential report or research” refer to
confidential information and confidential reports and research which came to
the knowledge of the Executive during the course of his employment.

17.3                           In
order to protect the Company’s confidential information, the Executive agrees
that he will not at any time make or arrange to have made any copy, abstract,
summary or precis of the whole or any part of any document, computer programme
or record belonging to the Company except when required to do so for the
purpose of properly performing his duties hereunder, and the Executive
acknowledges that any such copy, disk, programme, abstract, summary or precis
shall belong to the Company and shall be delivered up to the Company on
termination of his employment.

17.4                           The
restrictions contained in this clause shall cease to apply with respect to any
information, confidential report or research which comes into the public domain
otherwise than through an unauthorised disclosure by the Executive 

                                                or
a third party or to information which is required to be disclosed by operation
of law.

17.5                           The
Executive shall not without the prior written consent of the Board either
directly or indirectly publish any opinion, fact or material or deliver any
lecture or address or participate in the making of any film radio broadcast or
television transmission or communicate with any representative of the media or
any third party relating to the business affairs of the Company or any Group
Company or to any of its officers, employees, clients, suppliers, agents or
shareholders. For the purposes of this clause “media” shall include television
(terrestrial, satellite and cable) radio, internet, newspapers and other
journalistic publications.

18                                  Termination

18.1                           If the
Executive commits any fundamental breach of the Agreement, including without
limitation any of the following:

18.1.1                                          the
Executive is adjudged bankrupt or enters into any composition or arrangement
with or for the benefit of his creditors including a voluntary arrangement
under the Insolvency Act 1986;

18.1.2                                          the
Executive shall commit any act of dishonesty whether relating to the Company,
any Group Company, an employee or otherwise;

18.1.3                                          the
Executive is guilty of any serious misconduct or commits any serious or (having
been given notice in writing) persistent breach of any of his obligations to
the Company or any Group Company (whether under this Agreement or otherwise) or
refuses or neglects to comply with any reasonable and lawful orders or
directions given to him by the Board;

18.1.4                                          the
Executive shall be convicted of any criminal offence (other than an offence
under the road traffic legislation in the United Kingdom or elsewhere for which
a penalty other than imprisonment (either immediate or suspended) is imposed)
or other than one which in the opinion of the Board does not adversely affect
his position as a director;

18.1.5                                          the
Executive is guilty of any serious mis-conduct tending in the reasonable
opinion of the Board to prejudicially affect the interests or reputation of the
Company or any Group Company;

18.1.6                                          the
Executive shall fail, after due and proper warning, to perform his duties
competently;

18.1.7                                          being
suspended/disqualified by any relevant regulatory authority which would prevent
the Executive from carrying out his duties;

18.1.8                                          the
Executive shall be or become prohibited by law from being a director;

18.1.9                                          the
Executive shall resign as a director of the Company or any Group Company
without the consent of the Board;

then the Company shall be
entitled by written notification  to the
Executive to forthwith determine his employment under this Agreement. In the
event of termination pursuant to this sub-clause 18.1 the Executive shall have
no claim against the Company or any Group Company for pay in lieu of notice or
damages or otherwise by reason of such termination. The provisions of this
sub-clause 18.1 are without prejudice to any rights, which the Company may have
at common law to terminate the employment of the Executive summarily.

18.2                          Notwithstanding
Clause 5.1, the Company may terminate this Agreement by notice of not less than
one week plus the statutory minimum notice given at any time whilst the
Executive is incapacitated by ill health or accident from performing his duties
under this Agreement and he has been so incapacitated for any period of more
than 6 months or for periods aggregating 9 months in the preceding period of 24
months, provided that the Company shall withdraw any such notice if during the
currency of the notice the Executive returns to full time duties and provides a
medical practitioner’s certificate satisfactory to the Board to the effect that
he has fully recovered his health and no recurrence of his illness or
incapacity can reasonably be anticipated;

18.3                          Upon
whichever is the first to occur of (a) the Company exercising its rights
pursuant to Clause 6 [Garden Leave]
and requesting the Executive’s resignation, (b) termination howsoever
arising of his employment and/or this Agreement, or (c) upon request, the
Executive shall immediately tender his resignation from all offices he holds in
the Company and in any Group Company without prejudice to any other rights
accruing to either party hereto and without claim for compensation. In the
event of the Executive failing so to resign as required herein, the Company is
hereby irrevocably authorised to appoint some person in his name and on his
behalf to sign and deliver such resignations.

18.4                           After
the termination of the Executive’s employment hereunder he shall not at any
time thereafter represent himself as being in any way connected with or
interested in the business of or employed by the Company or any Group Company
other than as a shareholder; or use for trade or other purposes the name of the
Company or any Group Company or any name capable of confusion therewith other
than as a shareholder.

18.5                           The
Executive will both during and at any time after the termination of his employment
under this Agreement provide the Company or any Group Company with such
assistance as it may require in the conduct of such proceedings in any Court,
Tribunal or other body of competent jurisdiction as may arise in respect of
which the Company or any Group Company or its or their legal advisers believe
the Executive may be able to provide assistance. The Company shall pay the
Executive’s reasonable expenses necessarily incurred in providing such
assistance.

18.6                           The termination of the
Executive’s employment hereunder for whatever reason shall not affect those
terms of this Agreement which are expressed to 

                                                have
effect thereafter and shall be without prejudice to any accrued rights or
remedies of the parties.

18.7                           Upon termination of the
Executive’s employment howsoever arising the Executive shall have no rights as
a result of this Agreement or any alleged breach of this Agreement to any
compensation under or in respect of any share or bonus plan in which he may
participate or have received grants or allocations at or before the Termination
Date. Any rights which he may have under such plans shall be exclusively
governed by the rules of such plans.

18.8                           The Executive agrees that
after termination, howsoever occurring, he will not make or publish any adverse,
derogatory, misleading or untrue comments on the Company or any member of the
Group, and members of their respective Board of Directors or any of their
employees and agrees that he will not take part in any conduct conducive or
potentially conducive to the bringing of the Company or any member of the Group
its directors and/or employees into disrepute.

19                                  Return
of Company Property

19.1                           Upon
whichever is the first to occur of (a) the Company exercising its rights
pursuant to Clause 6 or (b) termination howsoever arising of his
employment and/or this Agreement, the Executive shall subject to clause 20.2
upon demand:

19.1.1                                          deliver
up to the Company Secretary all property in his possession or under his control
belonging to the Company or any Group Company including but nor limited to all
motor cars, credit cards, keys and passes, equipment, details of client
records, Company manuals, records made by the Executive in the course of his
employment, address lists, address books, diaries, computer lists, disks, programmes
and software, correspondence, documents, books, papers, files, records,
training records and reports and other property or material belonging to or
relating to the business of the Company and any Group Company or their
suppliers or clients which may have come into his possession, custody or
control in the course of or in consequence of his employment (and whether or
not belonging to the Company or any Group Company) and the Executive shall not
be entitled to and shall not retain any copies thereof in whatever form

19.1.2                                          irrevocably
delete any information belonging to the Company or any Group Company from any
computer system in his possession or under his control which computer system is
not directly or indirectly the property of the Company or any Group Company.

19.2                           The
Executive will, on being requested to do so, send to the Company addressed to
the Board a signed statement confirming that he has complied with the
obligations in clause 19.1 above.

19.3                           Where
the Company exercises its rights pursuant to Clause 6 the Executive shall not
be obliged to return any property provided to him as a contractual 

                                                benefit.
The Executive shall return such property forthwith on the termination of this
Agreement.

20                                  Grievance
and Disciplinary Procedure

20.1                           The Executive
is subject to the Company’s disciplinary rules and disciplinary procedures
in force from time to time. Such rules and procedures shall not form part
of the Executive’s contract of employment.

20.2                           The
Company reserves the right to suspend the Executive for the purposes of
investigating any allegation of misconduct or breach of this Agreement. The
period of suspension shall not normally exceed one month. Whilst suspended the
Executive shall continue to be entitled to his salary and all other contractual
benefits. During any period of suspension pursuant to this clause the Executive
shall not, except with the prior written consent of the Board attend any
premises of the Company or any Group Company, conduct any business on behalf of
the Company or any Group Company or contact any employee or customer of the
Company or any Group Company.

20.3                           If the
Executive wishes to seek redress of any grievance relating to his employment he
should refer such grievance to the Board. Appeal against warnings issued under
the disciplinary or performance improvement procedures should be notified to
the Company Secretary, in writing, within five working days of receipt of the
warning setting out in full the grounds of the Executive’s appeal.

21                                  Data
Protection

The Executive agrees to acquaint himself with and
abide by the Company’s Data Protection Policy from time to time in force,
breach of which will be treated as a serious disciplinary matter, which may
result in his dismissal.

22                                  Share
Dealings

22.1                           The Executive shall comply, where relevant, with
every rule of law, every requirement of the London Stock Exchange and every regulation of the Company from time to
time in force in relation to dealings in shares, debentures or other securities
of the Company or any Group Company and unpublished price sensitive information
affecting the shares, debentures or other securities of any other company and,
in relation to overseas dealings, the Executive shall also comply with all laws
of the state and all regulations of the stock exchange, market or dealing
system in which such dealings take place.

22.2                           The Executive shall not (and shall procure so far
as he is able that his spouse and children shall not) deal or become or cease
to be interested (within the meaning of Part I of Schedule XIII to the
Companies Act 1985) in any securities of the Company except in accordance with
any Company rules or guidelines from time to time relating to securities
transactions by directors.

23                                  Reconstruction
or Amalgamation

If the employment of the
Executive under this Agreement is terminated by reason of the liquidation of
the Company for the purpose of reconstruction or 

amalgamation and the
Executive is offered reasonable alternative employment with any concern or
undertaking resulting from the reconstruction or amalgamation on terms and
conditions not less favourable than the terms of this Agreement then the
Executive shall have no claim against the Company in respect of the termination
of his employment under this Agreement.

24                                  General

24.1                           No failure
or delay by the Company in exercising any right, power or privilege under this
Agreement shall operate as a waiver thereof nor shall any single or partial
exercise by the Company of any right, power or privilege preclude any further
exercise thereof or the exercise of any other right, power or privilege.

24.2                           There
are no collective agreements which directly affect the terms and conditions of
the Executive’s employment.

25                                  Notices

25.1                           Any
notice or other communication given or made under this Agreement shall be in
writing and may be delivered to the relevant party or sent by first class
prepaid letter to the address of that party specified in this Agreement or to
that party’s facsimile number thereat or at such other address or facsimile
number as may be notified by that party from time to time for this purpose. Service
at the last notified address or facsimile number shall be effective for the
purposes of this Agreement notwithstanding the fact that either party may
subsequently have changed its address or facsimile number without having
notified the other party under the provisions of this clause.

25.2                           Unless
the contrary shall be proved each such notice or communication shall be deemed
to have been given or made and delivered, if by letter, 72 hours after posting
and, if by delivery or facsimile, when respectively delivered or transmitted.

26                                  Other
Agreements

This
Agreement supersedes all other agreements other than those expressly referred
to in this Agreement whether written or oral between the Company or any Group
Company and the Executive relating to the employment of the Executive and the
Executive acknowledges and warrants to the Company that he is not entering into
this Agreement in reliance on any representation not expressly set out herein.

27                                  Governing
Law

This Agreement shall be governed by and
construed in all respects in accordance with English law and the parties agree
to submit to the non-exclusive jurisdiction of the English courts as regards
any claim or matter arising in respect of this Agreement.

28                                  Power
Of Attorney

The
Executive hereby appoints the Company to act as his attorney with authority in
his name and on his behalf to execute any deed or instrument and/or any such
thing and generally to use his name for the purposes of resigning as a director
of the Company and taking such steps as are necessary to implement the
Executive’s obligation under clause 15. The Executive hereby declares that this
Power of Attorney is given to secure his obligations under this Agreement and
shall be irrevocable in accordance with Section 4 of the Powers of
Attorney Act 1971.

29                                  Execution

This
Agreement may be executed in two or more counterparts and the counterparts
shall together constitute one agreement provided that each party has executed
one or more counterparts.

In witness whereof
this Agreement has been duly executed by the parties as a deed the day and year
first above written.

	
  Executed by as a deed

  	
  )

  	
   

  
	
  by SKYEPHARMA PLC)

  	
  )

  	
  . . . . . . . . . . . . . . . . . . . . . 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  . . . . . . . . . . . . . . . . . . . . . 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Director/Secretary

  
	
   

  	
   

  	
   

  
	
  Signed and
  delivered as a deed

  	
  )

  	
   

  
	
  by the said KENNETH CUNNINGHAM

  	
  )

  	
   

  
	
  in the presence
  of:

  	
  )

  	
   

  

 

Witness signature:

Witness name:

Witness address:

Witness
occupation:

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