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EXHIBIT 10.12
JOINT VENTURE AGREEMENT
By and Between
MDS NORDION INC.
&
XXXXXXXX MICRO SCIENCE INTERNATIONAL, INC.
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TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS 2
ARTICLE 2 SCOPE AND DESCRIPTION OF JOINT VENTURE 5
ARTICLE 3 RELATIONSHIP OF THE JOINT VENTURERS 5
ARTICLE 4 CONTRIBUTIONS AND OBLIGATIONS TO THE VENTURE 6
ARTICLE 5 REPRESENTATIONS AND WARRANTIES 10
ARTICLE 6 INTELLECTUAL PROPERTY 12
ARTICLE 7 TERM AND TERMINATION OF JOINT VENTURE 13
ARTICLE 8 GENERAL TERMS AND CONDITIONS 14
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JOINT VENTURE AGREEMENT
This Joint Venture Agreement is made as of the ______ day of June, 1997.
BETWEEN: MDS NORDION INC.,
a corporation incorporated under the laws of Canada,
having a place of business at 000 Xxxxx Xxxx, Xxxxxx,
Xxxxxxx, Xxxxxx
"Nordion"
AND: XXXXXXXX MICRO SCIENCE INTERNATIONAL, INC.,
a corporation incorporated under the laws of Delaware,
having a place of business at 0000 Xxxxxx Xxxx, Xxx
Xxxxx, Xxxxxxxx, 00000-0000
"GMS"
Nordion and GMS are sometimes herein referred to collectively as the "Parties".
WHEREAS,
I Nordion has expertise and is a world leader in the design and supply of
gamma processing facilities and Cobalt-60;
II GMS has expertise and is the world leader in ethylene oxide sterilization
and management thereof;
III The Parties wish to enter into an agreement to collaborate in the
development, promotion and operation of a gamma processing facility in
Mexico City D.F., primarily for food and also for medical and other
irradiation processing;
IV The Parties seek to combine their expertise to promote and support the
benefits of irradiation processing;
V The Parties have agreed that the collaboration shall be conducted as a
company incorporated in Mexico to be formed by the Parties;
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VI The Parties are desirous of defining the terms, conditions, duties and
obligations of each party with respect to the funding, ownership,
organization and management of the joint venture and the manner of
allocating the work to be conducted and all other matters related or
incidental thereto.
NOW THEREFORE in consideration of the premises and the mutual covenants
set forth herein, the Parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions Whenever used in this Agreement, the following words and
terms shall have the respective meanings ascribed to them as follows:
(a) "Agreement" means this Agreement, the Schedules attached hereto
and all instruments supplemental hereto or in amendment or
confirmation hereof, "hereof", "hereto", and "hereunder" and similar
expressions mean and refer to this Agreement and not to any
particular Article or Section; "Article", "Section", "paragraph" or
"clause'' means and refers to the specified article, section,
paragraph or clause of this Agreement;
(b) "Business Day" means any day other than Saturday, Sunday or statutory
holiday in Mexico, the State of Illinois or in the Province of
Ontario, as the case may be;
(c) "Business of the Venture" means the acquisition, ownership,
management and operation of an Irradiation Facility in Mexico City,
D.F., Mexico, and such other facilities in Mexico as may be agreed
from time to time;
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(d) "Initial Business Plan" means the plan attached as Schedule C
describing the implementation of the Business of the Venture and
erection of the Irradiation Facility, detailed financial forecasts of
the projected business activities and operations of the Venture,
estimates of proposed expenditures, statement of objectives and
detailed plans with respect to the implementation of the Venture and
milestones to be achieved, as mutually agreed between the Parties.
The Initial Business Plan shall provide for not significantly less
than 16,000 pallets of product to be processed in each year of the
first two (2) years of operation of the Irradiation Facility and at
least 26,300 pallets in the third year of operation to be processed
at competitive commercial rates;
(e) "Irradiation Facility" means the gamma processing facility which is
described in Schedule B and is comprised of building(s), equipment
and Cobalt-60, consistent with the projections of the Initial
Business Plan in Schedule C;
(f) "Land" means the land described in Schedule A; and
(g) The "Venture" means the incorporated company to be formed in Mexico
pursuant to this Agreement.
1.2 Headings The division of this Agreement into articles and sections and
the insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation of this Agreement.
In this Agreement and unless the context otherwise requires, words importing the
singular number only shall include the plural and vice versa, words importing
the neuter gender shall include the masculine and feminine genders and words
importing persons shall include
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individuals, partnerships, associations, trusts, entities of all types,
unincorporated organizations and corporations.
1.3 Schedules The following Schedules annexed hereto are incorporated by
reference and are deemed to be part hereof.
A: Description of Land
B: Irradiation Facility
C: Initial Business Plan
D: Quote for Irradiator
E: Shareholder Agreement
F: Articles of Incorporation
1.4 Currency All payments required hereunder to be made and all currency
mentioned herein shall be in and refer to United States dollars, unless
otherwise specified.
ARTICLE 2
SCOPE AND DESCRIPTION OF JOINT VENTURE
2.1 The Parties shall incorporate a company in Mexico which will be
organized, managed and conducted in accordance with the laws of Mexico, this
Agreement and the Shareholders Agreement entered into by the Parties as of this
date ("Shareholders Agreement").
ARTICLE 3
RELATIONSHIP OF THE JOINT VENTURERS
3.1 Except as otherwise set out in this Agreement, any property of any type,
including but not limited to real, personal and intellectual property,
belonging to a Party which is used in
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connection with the performance of its obligations arising by virtue of this
Agreement shall remain the property of said Party and shall not be or become
the property of any other Party or the Venture.
3.2 No Agency Unless specifically provided otherwise herein or in the
Shareholders Agreement, neither Party shall be deemed to be the representative,
agent or employee of the other Party for any purpose whatsoever and no Party
shall have the authority or right to hold itself out as having the authority or
right to assume, create or undertake any obligation or incur any liability of
any kind whatsoever, express or implied, on behalf of or in the name of the
Venture or the other Party, without the express prior written consent of the
other Party. Neither Party shall have the authority or right or hold itself out
as having the authority or right to accept service of any legal process
addressed to or intended for the other Party.
3.3 No Borrowing No Party acting individually and without the consent of
the Board of Directors of the Venture shall have the right to borrow money on
behalf of or in the name of the Venture or the other Party or to pledge,
mortgage or otherwise encumber the assets or rights of the Venture or of the
other Party without the express prior written consent of the other Party.
3.4 Employees Unless otherwise provided in this Agreement or the Shareholders
Agreement, employees, agents or representatives of a Party who perform work and
services in relation to the Venture shall be and remain at all times employees,
agents, representatives of such Party and shall not at any time be deemed to be
the employees, agents or representatives of the other Party.
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ARTICLE 4
CONTRIBUTIONS AND OBLIGATIONS TO THE VENTURE
4.1 Obligations The Parties agree to make their contributions, to execute
the necessary agreements and documents and to meet their respective
responsibilities and obligations on a timely basis as set out herein. The
Parties recognize that taking into account uncertainties, it may be necessary
to amend certain aspects of the Initial Business Plan, which amendments will
require the advance written approval of the Parties.
4.2 Nordion Contribution Nordion shall provide to the Venture:
i) 40% of the Venture's initial capital requirements to a maximum
of US$2,400,000, paid in cash or in kind and all of which shall
be in equity.
ii) For the first twelve (12) months of commercial operation of the
Irradiation Facility, training and on-site supervision to
fulfill customary initial training requirements for such a
facility. Thereafter, Nordion agrees to provide on-going
training as required by the Venture on terms to be agreed upon
by Nordion and the Venture.
iii) As reasonably requested by the Venture and deemed appropriate
by Nordion, marketing, sales, quality assurance and other areas
of expertise, in order to assist the Venture to develop, assess
and exploit the commercial potential and opportunities
available to the Venture. Nordion will also actively promote
the Venture in seminars and printed materials as appropriate.
4.3 Nordion Obligations Nordion shall provide the following to the Venture,
on the terms set forth herein:
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(i) Except as the Parties otherwise agree, an irradiator capable of
meeting the operational needs and growth projections set forth
in the Initial Business Plan and which shall be designed
pursuant to and consistent with the specifications set out in
Nordion's quotation attached as Schedule D. The purchase price
payable by the Venture for the irradiator will be equal to
Nordion's actual direct labor, material and direct production
support costs plus 10%. In addition, reasonable and customary
out-of-pocket travel and site accommodation expenses incurred by
Nordion during installation of the irradiator, shall be to the
account of the Venture.
(ii) Cobalt-60 and replenishment Cobalt-60 in the form of Nordion
double encapsulated C-188 sources. The purchase price for the
Cobalt-60 payable by the Venture shall be the lesser of: (i) the
lowest price for similar quantities of Cobalt-60 available to
any customer of Nordion under a multi-year contract anywhere in
the world, including any discounts or rebates available to such
customer or (ii) the average price for similar quantities of
Cobalt-60 sold or delivered to any of Nordion's ten largest
customers within the preceding and succeeding six (6) months
from the date of any order to Nordion from the Venture. In
addition, normal and customary transport costs, container
rental, and installation shall be to the Venture's account.
Nordion shall accept the return and appropriately handle and
dispose of or recycle all Cobalt-60 sold to the Venture and the
Venture shall pay to Nordion the then-current charges for such
return.
4.4 GMS Contribution GMS shall provide to the Venture:
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i) 60% of the Venture's initial capital requirements to a maximum
of US$3,600,000, payable in cash or in kind and all of which
shall be in equity.
ii) As reasonably requested by the Venture and deemed appropriate by
GMS marketing, sales, quality assurance and other areas of
expertise, in order to assist the Venture to develop, assess
and exploit the commercial potential and opportunities
available to the Venture. GMS will also actively promote the
Venture in seminars and printed materials.
4.5 GMS Obligations GMS shall provide the following to the Venture, on the
terms set forth herein:
i) The Venture will employ and pay the compensation of Xxxxx del
Xxxxxx Xxxxx, who is currently General Manager of GMS's Mexican
Affiliate. It is anticipated that after the Venture is formed,
Ms. del Xxxxxx Xxxxx will continue to provide services to GMS
and its Mexican Affiliate. In such event, the Venture shall
invoice GMS and GMS shall pay the amount of Ms. del Xxxxxx
Xxxxx'x compensation for the time she spends on GMS services.
4.6 Venture Responsibility The Venture shall be responsible for all costs
incurred by and associated with the Business of the Venture and shall
purchase its irradiator and Cobalt-60 requirements from Nordion pursuant
to Section 4.3. Pursuant to the Initial Business Plan, the Venture shall
purchase the Land and components for and build and manage the Irradiation
Facility. All right, title and interest in and to the Land and Irradiation
Facility shall belong to the
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Venture. The Parties shall use best efforts to ensure that all resources
acquired by the Venture shall be at or below fair market value.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.1 Representations of Nordion Nordion represents and warrants that:
(a) Nordion is a corporation duly organized, validly existing and
in good standing under the laws of Canada, and has all necessary
corporate powers to own its properties, and carry on its business as
now owned and operated;
(b) The execution and delivery of this Agreement and the consummation
by Nordion of the transactions described herein have been duly
authorized, and no further corporate action or authorization is
necessary in connection therewith;
(c) There are no actions, notices, claims, demands or other
proceedings, pending or threatened, before any court against Nordion
at the date of execution of this Agreement which would have a
material adverse affect on Nordion's ability to carry out its
obligations under this Agreement;
(d) To the best of Nordion's knowledge, the specifications set forth
in Schedule D will and the facility is sized to reasonably and cost
effectively provide for the operation and growth of the Business as
provided in Schedules B & C, except as otherwise instructed in
writing by GMS;
(e) Neither the execution, delivery or performance of this Agreement
and the related documentation contemplated herein, nor the
consummation of the transactions contemplated herein, violates any
laws or any act, decision, agreement or contract binding or
benefiting Nordion, nor modifies the effects thereof.
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5.2 GMS represents and warrants that:
(a) GMS is a corporation duly organized and validly existing and in
good standing under the laws of Delaware, and has all necessary
corporate powers to own its properties and carry on business as now
owned and operated;
(b) The execution and delivery of this Agreement and the consummation
by GMS of the transactions described herein, have been duly
authorized and no further corporate action or authorization is
necessary in connection therewith;
(c) There are no actions, notices, claims, demands or other
proceedings, pending or threatened, before any court against GMS at
the date of execution of this Agreement which would have a material
adverse affect on GMS's ability to carry out its obligations under
this Agreement;
(d) Neither the execution, delivery or performance of this Agreement
and the related documentation contemplated herein, nor the
consummation of the transactions contemplated herein, violates any
laws or any act, decision, agreement or contract binding or
benefiting GMS, nor modifies the effects thereof.
ARTICLE 6
INTELLECTUAL PROPERTY
6.1 Ownership and Use of Documents All documents produced for or by the
Venture shall be owned by the Venture. Notwithstanding the foregoing any
documentation and/or plans containing proprietary information belonging to
either Party hereunder shall remain the property of such Party and shall be
maintained in strict confidence by the other Party to whom such proprietary
information is disclosed.
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ARTICLE 7
TERM AND TERMINATION OF JOINT VENTURE
7.1 Termination This Agreement shall take effect as of the date first
written above and shall remain in force until terminated, by mutual agreement
of the Parties, or if only one of the Parties is a Shareholder of the Venture,
or at the election of a Party, exercised by giving written notice to the other
Party, upon the occurrence of any of the following events of default:
(a) If a Party (the "Defaulting Party") fails to observe or perform
any material covenant, condition or representation contained in this
Agreement or the Shareholders Agreement which results in a material
adverse effect for the Venture or the other Party, and after notice
in writing has been given by the other Party (the "Non-Defaulting
Party") to the Defaulting Party, specifying such default, with
reasonable particulars and requiring the Defaulting Party to remedy
such non-performance or non-observance and the Defaulting Party does
not do so within a period of thirty (30) calendar days or such longer
period as the Non-Defaulting Party may specify, or is reasonable in
the circumstances provided the Defaulting Party is proceeding to
remedy such default with all due diligence and such default has not
continued for longer than one hundred eighty (180) calendar days.
(b) If a Party or the Venture is dissolved, files a voluntary
petition in bankruptcy, receivership or insolvency or similar
proceedings are commenced by or against it or there is the
appointment by a court of a temporary or permanent receiver, trustee,
custodian or similar administration, which is not relieved within
sixty (60)
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calendar days of its institution or there is an assignment for the
benefit of creditors.
(c) The winding up of the Venture pursuant to order by a competent
authority order against the Venture or against one or both of the
Parties.
ARTICLE 8
GENERAL TERMS AND CONDITIONS
8.1 Notices All notices, requests, demands and other communications shall,
(in the absence of any specific provision to the contrary) be in writing and
delivered or sent by pre-paid registered mail or telecopy to the following
respective addresses:
to Nordion: 000 Xxxxx Xxxx
Xxxxxx, Xxxxxxx, Xxxxxx
X0X XX0
Attention: Vice President, Market Development
To GMS: 0000 Xxxxxx Xxxx,
Xxx Xxxxx, Xxxxxxxx, X.X.X.
00000-0000
Attention: President
with a copy to:
Xxx Xxxxxxxx Xxxxxx
Xxxxx, XX 00000-0000
U.S.A.
Attention: General Counsel
In the event that it may be reasonably anticipated that, due to any strike,
lockout, or similar event involving an interruption in postal service, any
payment or communication will be received by the addressee later than the tenth
(10th) day following the mailing date, then the mailing of any
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such payment or communication as aforesaid shall not be an effective means of
sending the same, but rather any payment or communication must then be sent by
an alternative means of transportation which may be reasonably anticipated will
cause the payment or communication to be received reasonably expeditiously by
the addressee and which will provide written proof of receipt. A Party may from
time to time change its address herein by providing notice to the other Parties
in accordance with this Section.
8.2 Entire Agreement Unless otherwise set out, this Agreement constitutes
the entire agreement between the Parties relating to the subject matter herein
and supersedes any and all prior agreements, negotiations, representations and
understandings whether written or oral between the Parties relating to its
subject matter. This Agreement may not be modified in any manner except by a
further written agreement signed by duly authorized officers or representatives
of each of the Parties.
8.3 Further Assurances The Parties hereto hereby covenant and agree that
they and their respective heirs, executors, administrators, successors and
assigns and nominees shall, with reasonable diligence, do all such things and
provide all such reasonable assurances and cause the Venture, as may be
reasonably required, to consummate the transactions contemplated hereby, and
each Party hereto shall provide such further documents or instruments required
by the other Party as may be reasonably necessary or desirable to effect the
purpose of this Agreement and carry out its provisions.
8.4 Waiver The failure of any Party to this Agreement to enforce at any
time any of the provisions of this Agreement or any of its rights in respect
thereto or to insist upon strict adherence to any term of this Agreement will
not be considered to be a waiver of such provision, right or term or in any way
to affect the validity of this Agreement or deprive the applicable
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Party of the right thereafter to insist upon strict adherence to that term or
any other term of this Agreement. The exercise by any Party of any of its
rights provided by this Agreement will not preclude or prejudice such Party
from exercising any other right it may have by reason of this Agreement or
otherwise, irrespective of any previous action or proceeding taken by it
hereunder. Any waiver by any Party hereto of the performance of any of the
provisions of this Agreement will be effective only if in writing and signed by
a duly authorized representative of such Party.
8.5 Indemnity Nordion and GMS shall indemnify and hold the other harmless
from and against any and all expenses, liabilities, debts, costs, claims and
demands, (including without limitation, reasonable attorney's fees) incurred as
a result of any negligent act, conduct, or omission of the responsible party or
breach of this Agreement by the responsible party, which relates to the
performance of its duties arising under this Agreement.
8.6 No Partnership Nothing in this Agreement shall be deemed in any way or
for any purpose to constitute any party a partner of any other party to this
Agreement in the conduct of any business or otherwise.
8.7 Successors and Assigns This Agreement is not assignable by any party
except insofar as its Equity Securities are transferred in accordance with its
provisions. The provisions of this Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective heirs, executors,
administrators, committees, successors, receivers, trustees in bankruptcy or
other legal representatives and each and every person so bound shall make,
execute and deliver all documents necessary to carry out this Agreement.
8.8 Time of the Essence Time shall be of the essence of this Agreement.
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8.9 Separate Counterparts This Agreement may be executed in one or more
counterparts, each of which when so executed and delivered shall be deemed to
be an original and such counterparts together shall constitute one and the same
instrument.
8.10 Severability Each and every provision of this Agreement shall be
treated as separate and distinct and in the event of any provision hereof being
declared invalid such provision shall be deemed to be severable and all other
provisions hereof shall remain in full force and effect.
8.11 Force Majeure No Party shall be in default hereunder by reason of its
delay in the performance or failure to perform any of its obligations hereunder,
such delay or failure, without limiting the generality of the following, is
caused by strike, acts of God or the public enemy, unavailability of raw
materials, riots, acts of terrorism, interference by civil or military
authorities, decisions of competent authorities, compliance with government
laws, rules and regulations, or any fault beyond its reasonable control.
8.12 Governing Law This Agreement and the rights, and obligations and
relations of the Parties hereto, shall be governed and construed in accordance
with the laws of the State of New York and the Federal laws applicable therein
(but without giving effect to any conflict of law rules). The Parties hereto
agree that the Federal District courts of the U.S.A., Southern District of New
York shall have jurisdiction to enter any action or other legal proceedings
based on any provisions of this Agreement. Each Party does hereby attorn to the
jurisdiction of the courts of the State of New York, U.S.A.
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The Parties have executed this Agreement as of the date first appearing
above.
MDS NORDION INC.
by: /s/ Xxxxx X. Xxxxxx
------------------------------------------
Xxxxx X. Xxxxxx
Vice President
Market Development Division
by: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Xxxxx X. Xxxxxxxx
Vice President, General Counsel
and Corporate Secretary
XXXXXXXX MICRO SCIENCE INTERNATIONAL, INC.
by: /s/ Xxxxx X. Xxxx
------------------------------------------
Xxxxx X. Xxxx
President - CEO
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SHAREHOLDER AGREEMENT
By and Between
MDS NORDION INC.
&
XXXXXXXX MICRO SCIENCE INTERNATIONAL, INC.
&
NGS
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Table of Contents
Page
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ARTICLE 1 INTERPRETATION................................................. 2
1.1 Definitions.................................................... 2
1.2 Limitation of Directors' and Officers' Liability............... 4
ARTICLE 2 MANAGEMENT..................................................... 5
2.1 Carrying out of the Agreement.................................. 5
2.2 Directors...................................................... 5
2.3 Removal and Replacement of Nominees............................ 5
2.4 Board Meetings................................................. 6
2.5 Function of the Board of Directors............................. 6
2.6 Actions Requiring Social Resolution............................ 7
2.7 Significant Expenditures....................................... 8
ARTICLE 3 RECORDS AND REPORTING.......................................... 8
3.1 Books and Records.............................................. 8
3.2 Fiscal Year.................................................... 8
3.3 Auditor or Accountant.......................................... 9
3.4 Reporting...................................................... 9
ARTICLE 4 TRANSFER AND DISPOSITION OF EQUITY SECURITIES.................. 10
4.1 Restriction on Transfer........................................ 10
4.2 Shareholder Consent............................................ 10
4.3 Transfers to Affiliates........................................ 10
4.4 Right of First Refusal......................................... 11
4.5 GMS Call....................................................... 12
4.6 Exercise of the Call; Supply Agreement......................... 12
4.7 Nordion Put.................................................... 14
4.8 Closing........................................................ 14
4.9 Insolvency of a Shareholder.................................... 15
ARTICLE 5 GENERAL SALE PROVISIONS........................................ 15
5.1 Sale Provisions................................................ 15
5.2 Conditions of Closing.......................................... 16
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5.3 Indebtedness of Seller to Corporation.......................... 16
5.4 Indebtedness of Corporation to Seller; Seller's Guaranties..... 17
5.5 Agreement Binding on Transferees............................... 17
5.6 Continuing Obligations......................................... 17
ARTICLE 6 ADDITIONAL ISSUE OF EQUITY SECURITIES.......................... 18
6.1 Pre-emptive Right.............................................. 18
6.2 Offer to Others................................................ 19
ARTICLE 7 CONFIDENTIALITY................................................ 19
7.1 Provision of Information....................................... 19
7.2 Maintenance of Confidentiality................................. 19
7.3 Survival....................................................... 20
ARTICLE 8 GENERAL........................................................ 20
8.1 Notices........................................................ 20
8.2 No Partnership................................................. 21
8.3 Successors and Assigns......................................... 21
8.4 Time of the Essence............................................ 22
8.5 Further Assurances............................................. 22
8.6 Separate Counterparts.......................................... 22
8.7 Share Certificates............................................. 22
8.8 Subdivision, Consolidation, etc. of Equity Securities.......... 23
8.9 Conflict....................................................... 23
8.10 Force Majeure.................................................. 23
8.11 Entire Agreement............................................... 24
8.12 Waiver......................................................... 24
8.13 Severability................................................... 24
8.14 Governing Law.................................................. 25
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SHAREHOLDERS AGREEMENT
THIS AGREEMENT made as of the ____ day of June, 1997
AMONG: MDS NORDION INC.,
a corporation incorporated under the laws of Canada;
having a place of business at 000 Xxxxx Xxxx,
Xxxxxx, Xxxxxxx, Xxxxxx. X0X 0X0
"Nordion"
AND: XXXXXXXX MICRO SCIENCE INTERNATIONAL, INC.,
a company incorporated under the laws of Delaware
having a place of business at 0000
Xxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxx 00000-0000
"GMS"
AND:
a company to be incorporated under the laws of Mexico,
having a place of business at
the "Corporation"
WHEREAS:
I GMS and Nordion have entered into a Joint Venture Agreement dated as of
the ____ day of June, 1997 (the "Joint Venture Agreement") for the purpose
of development, promotion and operation of a gamma processing facility in
Mexico, primarily for food and also for medical and other irradiation
processing;
II GMS and Nordion have agreed that such collaboration shall be conducted by
the Corporation as an incorporated joint venture, under the name NGS, Inc.
or such other name as the Parties agree;
III the authorized capital of the Corporation consists of an unlimited number
of Common Shares;
IV at the date hereof, all of the issued and outstanding Common Shares of the
Corporation are owned by the Shareholders as follows:
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Number Subscription % Common
Shareholders of Common Shares Value Shares
Nordion 400 40
GMS 600 60
V the Shareholders have agreed to enter into this Agreement for the purpose
of providing for the management of the Corporation and the issue or
transfer of the securities of the Corporation.
NOW THEREFORE in consideration of the mutual
covenants and agreements contained in this Agreement and other good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged) the Parties hereto agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions
In this Agreement the following terms shall have the following meanings:
(a) "Act" means the Mexican Corporations Act and any statute that may be
substituted therefor, as from time to time amended, and the regulations
thereto and any regulations that may be substituted therefor, as from time
to time amended.
(b) "Affiliate" means a body corporate which, now or hereafter, directly or
indirectly through one or more intermediaries controls, or is controlled
by, or is under common control with the Shareholders. The term "control"
means the possession, directly or indirectly, of the
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power to direct or cause the direction of the management and policies of a
body corporate, whether through the ownership of more than 50% of the votes
that may be cast to elect the directors, by contract or otherwise.
(c) "Articles" means the Articles of Incorporation or Association of the
Corporation, issued under the Act, as amended.
(d) "Business of the Corporation" means the acquisition, ownership,
management and operation of an irradiation facility in Mexico City, D.F.,
Mexico and such other facilities in Mexico as may be agreed from time to
time.
(e) "Business Day" means any day other than Saturday, Sunday or statutory
holiday in Mexico, the State of Illinois or the Province of Ontario, as
the case may be.
(f) "Business Plan" means detailed financial forecast of the projected
business activities and operations of the Corporation, estimates of
proposed expenditures, statement of objectives and detailed plans with
respect to the implementation and operation of the Business of the
Corporation.
(g) "By-laws" means the by-laws of the Corporation as amended from time to
time.
(h) "Common Shares" means the fully participating shares of the Corporation
issued and outstanding from time to time, carrying the right, inter alia,
to vote in all circumstances, to receive dividends as and when declared by
the board of directors and to receive the remaining property of the
Corporation on dissolution.
(i) "Confidential Information" means any trade or industrial secret, patent,
know-how, managing, marketing and pricing information, customer lists and
customer confidential information, technical expertise or non-public
information of any other sort as may from time to time be acquired or
developed.
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(j) "Equity Securities" means the Shares and any rights, warrants, options or
other instruments entitling the holder, whether or not on a contingency,
to acquire Shares from the Corporation, and any instruments convertible,
whether or not on a contingency, into any of the foregoing.
(k) "Shareholders" means GMS and Nordion, and Shareholder means either one of
them and any person to whom Shares are transferred or issued in accordance
with the terms of this Agreement provided in each case such person has
signed Schedule A hereto.
(l) "Shares" means the Common Shares and other voting shares of the
Corporation.
(m) "Special Resolution" means a resolution approved by holders of Shares to
which are attached not less than 75% of the votes corresponding to all
Shares having voting rights in the circumstances, expressed by votes to be
cast at a meeting of Shareholders duly called to consider such resolution,
or by a resolution in writing signed by all Shareholders.
Capitalized terms used in this Agreement and not otherwise defined herein
shall have the definitions ascribed to them in the Joint Venture Agreement
dated __________ by and between Nordion and GMS.
1.2 Limitation of Directors' and Officers' Liability
To the extent that this Agreement specifies that certain matters may only
be addressed or approved by the Shareholders, the discretion and the powers of
the directors of the Corporation to manage and to supervise the management of
the Business of the Corporation with respect to such matters are, to the extent
permitted by law, correspondingly restricted and the directors are thereby
relieved of their duties and liabilities.
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ARTICLE 2
MANAGEMENT
2.1 Carrying out of the Agreement
Each of the Shareholders shall at all times vote and act as a Shareholder
and in all other respects carry out and cause the Corporation to carry out the
provisions of this Agreement. No Shareholder shall take any action contrary to
the provisions of this Agreement.
Each of the Shareholders, to the extent that it is permitted by law to
bind its nominee(s) to do so, shall cause its nominee(s), as a director of the
Corporation, to act and vote as a director in order that the provisions of this
Agreement shall be carried out.
2.2 Directors
Until changed in accordance with the terms hereof, the Corporation shall
have a board of directors consisting of five (5) members comprised of three (3)
nominees of GMS and two (2) nominees of Nordion, all of whom shall serve
without compensation and five (5) alternate directors comprised of three (3)
nominees of GMS and two (2) nominees of Nordion, all of whom shall serve
without compensation.
2.3 Removal and Replacement of Nominees
Any Shareholder entitled to a nominee shall be entitled to remove such
nominee by notice to the nominee and to the Corporation. Any vacancy occurring
by reason of the death, disqualification, inability to act, resignation or
removal of any director, shall only be filled by the Shareholder whose nominee
was so affected so as to maintain a board of directors consisting of the number
of nominees specified in Section 2.2. Should such vacancy occur, the
Shareholder whose nominee has ceased to be a director shall use its best
efforts to replace such nominee within thirty (30) days of resignation or
removal.
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2.4 Board Meetings
Meetings of the board of directors of the Corporation shall be called by
the Chairman or the Secretary upon the reasonable request of any Shareholder or
director. No less frequently than annually, the Chairman of the board of
directors of the Corporation shall request that management of the Corporation
report to the board with respect to the current status of operations of the
Corporation and with respect to all material developments or planned action
involving the Corporation and shall present to the meeting full current
financial information. Subject as hereinafter provided, the ordinary quorum
for any meeting of the board of directors shall not be less than four (4)
directors, consisting of at least one nominee of each Shareholder. In the
event all of a Shareholder's nominated directors fail to attend two
consecutively called meetings on the same or similar agenda, the quorum shall
be three (3). Unless otherwise set out, all decisions made at such meetings
shall be made by majority rule. The board of directors of the Corporation
shall prepare and maintain minutes of each meeting of the board of directors,
which shall be signed and each page initialed by the Chairman and the Secretary
and shall be provided to each of the Shareholders within a reasonable period.
The board of directors shall designate a Chairman and a Secretary.
2.5 Function of the Board of Directors
The role of the representatives on the board of directors shall be to
consult on all matters affecting the Corporation as a whole. The board of
directors shall, except as expressly otherwise provided in this Agreement, be
responsible for and shall be empowered to function in respect of the following:
i) review and advise regarding an annual Business Plan(s) for the
operation and commercialization of the Irradiation Facility;
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ii) the exercise of control and decision making and general
policy matters related to the Corporation.
2.6 Actions Requiring Social Resolution
No action shall be taken, by the Corporation with respect to the following
matters without the majority approval of the board of directors and the
Shareholders by way of Special Resolution:
i) approval of any material change to the Initial Business Plan;
ii) any direct or indirect participation in, or establishment by,
the Corporation of any business other than the Business of the
Corporation, or any material change in the nature and purpose of the
Business of the Corporation, or the undertaking of any material
action, gratuitous act or transaction not in the ordinary course of
business;
iii) any amendment to the Articles or By-laws of the Corporation,
including but not limited to capital increases, except as otherwise
required by law;
iv) any amalgamation, spin-off, or merger of the Corporation with
any other body corporate or any reorganization of corporate
ownership structure, including, but not limited to any continuance
of or arrangement for or any dissolution, liquidation, winding up or
spin-off of the Corporation,
v) any sale, lease, exchange or other disposition of fifty
percent (50%) or more of the value of the assets or property of the
Corporation;
vi) the lending of money by the Corporation or the providing of
any guarantee or indemnity obligations by the Corporation, where the
value of each of such is greater than US$10,000, other than product
and service warranties issued in the ordinary course of the Business
of the Corporation;
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vii) any contract or transaction with a Shareholder, Affiliate or
any other person which is not at arms length;
viii) execution of technology agreements, granting of licenses or
sublicenses of patents, trade marks or technical information;
ix) any significant change in accounting practices and policies;
x) approval of annual budgets which strive to reflect the
Business Plan and achieve the profit objectives of the Corporation.
2.7 Significant Expenditures
Any expenditure by the Corporation in excess of $400,000 shall require a
Special Resolution unless GMS contributes additional equity in the Corporation
equal to the amount of such expenditure over $400,000.
ARTICLE 3
RECORDS AND REPORTING
3.1 Books and Records
Notwithstanding any contrary provision in the By-laws, the Corporation
shall at all times maintain at its registered office proper books and records
in accordance with generally accepted Mexican accounting principles and such
books and records shall accurately reflect the Corporation's operations and
financial position in accordance with recognized international accounting
standards. Such records and supporting documentation shall be, at all times,
available for inspection by the Shareholders, or their designees, during normal
business hours and without interfering with the normal course of business of
the Corporation.
3.2 Fiscal Year
The fiscal year of the Corporation in each year shall end on December 31.
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3.3 Auditor or Accountant
The auditors of the Corporation shall be KPMG or such auditors or
accountants as the Shareholders shall from time to time appoint.
3.4 Reporting
The Corporation shall, and the board of directors shall cause the officers
of the Corporation to, prepare and provide to the Shareholders:
(a) at least sixty (60) days prior to the end of each fiscal year, a
report on the progress made relating to the Business of the
Corporation as of the date of the report and activities for the
forthcoming 12-month period in U.S. dollars;
(b) within forty-five (45) days after the end of each quarter, a balance
sheet, profit and loss statement and cash-flow statement, shown in
U.S. dollars and indicating in detail how the Corporation has
performed relative to the Business Plan and comparable periods in
prior fiscal years;
(c) within one hundred and twenty (120) days of the end of each fiscal
year, audited financial statements, approved by the board of
directors;
(d) at least sixty (60) days prior to the end of each fiscal year a
Business Plan for the ensuing fiscal year; and
(e) such other information, accounts, data and projections as any
director may reasonably request from time to time.
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ARTICLE 4
TRANSFER AND DISPOSITION OF EQUITY SECURITIES
4.1 Restriction on Transfer
No Equity Securities of the Corporation or any interest therein shall be
sold, assigned, exchanged, transferred, disposed of, encumbered, pledged,
mortgaged, hypothecated, given, devised or bequeathed, directly or indirectly,
and no agreement or commitment shall be made to do any of the same except in
each case (i) with the approval of a Special Resolution or (ii) pursuant to the
applicable provisions of this Agreement, and any attempt to do so without such
consent or other than pursuant to such provisions or such agreements shall be
void and, because the Parties hereto acknowledge the inadequacy of monetary
damages in such circumstances, shall be subject to specific performance and
injunctive relief at the request of other Parties hereto.
4.2 Shareholder Consent
The Shareholders shall vote the Shares of the Corporation owned by them,
to approve as required by the Articles, any transfer of Equity Securities made
in accordance with the provisions of this Agreement.
4.3 Transfers to Affiliates
With the consent of the other Shareholders, which may not be unreasonably
withheld, all or part, of the Equity Securities held by a Shareholder may be
transferred to an Affiliate of such Shareholder. The transferee Shareholder
shall execute Schedule A hereto before such transfer can be effective.
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4.4 Right of First Refusal
In the event that any Shareholder (the "Offeror") shall receive a bona
fide offer from a third party to purchase all but not less than all of the
Equity Securities of the Corporation owned by such Shareholder, it shall give
written notice to the other Shareholder ("Offeree") of its intention to accept
such offer (the "Selling Notice"). Such Selling Notice shall include a copy of
the third party offer to purchase, the number andoclass of the Equity
Securities subject of the offer (hereinafter in this Section 4.4 called the
"Offered Equity Securities"), the price offered by the third party which the
Offeror is prepared to accept and any other terms and conditions, provided that
such terms and conditions must not be contrary to the provisions of Article 5
of this Agreement. By delivering a Selling Notice, the Offeror represents and
warrants to the Offeree that there is no direct or indirect supplementary
consideration (whether or not in the nature of tangible or intangible assets,
money, property, securities or other benefits) to be received by the third
party or any other person in connection with such offer and that such offer is
not made as part of or in connection with any other transaction. Unless the
other Shareholder otherwise agrees, the following provisions shall govern such
purchase and sale:
(a) the Selling Notice shall be deemed to be an offer by the
Offeror, irrevocable within the time hereinafter specified for
acceptance, to sell the Offered Equity Securities to the Offeree
under the same terms and conditions offered by the third party;
(b) within thirty (30) days after receipt of the Selling Notice,
the Offeree may give to the Offeror a notice of acceptance;
(c) if the Offeree does not accept to purchase the Offered Equity
Securities, or is not prepared to purchase all the Offered Equity
Securities, then the Offeror may sell
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all the Offered Equity Securities to the third party, provided that
such sale must close within sixty (60) days after Offeree's receipt
of the Selling Notice and the Offeror must provide the Offeree with
a certificate that the transaction closed on the same terms and
conditions as were contained in the Selling Notice.
4.5 GMS Call
At any time, at least five (5) years after the effective date of this
agreement, GMS, at its option, may notify Nordion, by written notice ("Call
Notice"), that it elects to purchase all, but not less than all, of the Equity
Securities held by Nordion (the "Call"). The call price for such Equity
Securities shall be determined as the aggregate of:
i) the greater of the price paid by Nordion for the initial
purchase of the Equity Securities of the Corporation or the fair
market value of such Equity Securities on the date of receipt of the
Call Notice, as agreed, or failing agreement, as determined by a
mutually agreed recognized appraiser, and
ii) a premium equal to 20% of the amount determined in paragraph
i) above.
Upon delivery of the Call Notice by GMS to Nordion, Nordion shall be
obligated to sell, and GMS shall be obligated to purchase, such Equity
Securities, on the date specified in the notice and Nordion shall deposit the
Equity Securities with the Secretary.
4.6 Exercise of the Call; Supply Agreement
In the event GMS exercises its Call to purchase all but not less than all
of the Equity Securities held by Nordion, GMS undertakes that GMS and its
controlled entities shall purchase from Nordion and Nordion shall sell to GMS
all of GMS's and its controlled entities' requirements for irradiation
equipment and Cobalt-60 (provided Nordion can supply such Cobalt-60 and
irradiation equipment in accordance with GMS specifications), pursuant to the
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terms and conditions of a Supply Agreement agreed to by the parties on this
date and attached as Schedule C. Key elements of the Supply Agreement include:
i) the purchase price for the irradiation equipment shall be the lesser
of fair market value or the price determined based on Nordion's
actual direct labour, material and direct production support costs
plus ten per cent (10%);
ii) the purchase price for Cobalt-60 shall be the lowest price paid over
the previous twenty-four (24) month period by a customer of Nordion
other than GMS and/or its controlled entities for similar quantities
of Cobalt 60 sold or delivered. Notwithstanding the foregoing,
Nordion may exclude one such sale within the preceding twenty-four
(24) month period from the determination of the lowest price. If no
such similar quantities have been sold or delivered, the purchase
price shall be the lesser of fair market value or the purchase price
for the next larger quantity so sold or delivered;
iii) GMS shall act reasonably in providing its specifications for such
Cobalt-60 and irradiation equipment;
iv) out-of-pocket travel, site accommodation, installation, transports
costs and container rental shall be to GMS's account;
v) for goods, services and equipment other than Cobalt-60, the delivered
cost (including taxes and all costs listed in 4.6 iv) above) must be
less than or equal to a competitive quote to supply comparable goods,
services or equipment;
vi) GMS shall have no obligations under the Supply Agreement to purchase
the requirements for Cobalt-60 and irradiation equipment for
companies it acquires after the date of this Agreement for so long as
the acquired company is obligated
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to make such purchases under contracts in effect at the time the Call
is exercised; and
vii) Nordion shall accept the return and appropriately handle and
dispose of or recycle all Cobalt-60 sold to the Corporation or to
GMS and/or its controlled entities and the GMS and/or its controlled
entities shall pay to Nordion the then-current charges for such
return.
GMS agrees that it will not, directly or indirectly, take any action to
circumvent this section. This right and obligation shall survive termination
of this agreement by means of GMS's exercising its call. In the event Nordion
cannot meet GMS's specifications or Nordion's pricing is greater than permitted
under 4.6 v) above, GMS shall be free to purchase such goods, services or
equipment from third parties.
4.7 Nordion Put
At any time at least five (5) years after the effective date of this
agreement and upon one (1 ) year's prior written notice, Nordion, at its
option, may notify GMS by a second written notice ("Put Notice") within
eighteen months after the initial notice, that it elects that GMS purchase all,
but not less than all, of the Equity Securities held by Nordion (the "Put").
The Put price for such Equity Securities shall be as outlined on Schedule B.
Upon delivery of the Put Notice by Nordion to GMS, Nordion shall be obligated
to sell and GMS shall be obligated to purchase, the Equity Securities and
Nordion shall deposit the Equity Securities with the Secretary.
4.8 Closing
The closing date for the purchase of the Equity Securities, subject of the
Put or Call, shall not be less than thirty (30) calendar days nor more than
sixty (60) calendar days after the receipt of the Put Notice or Call Notice.
On the closing date, Nordion shall deliver the Equity Securities
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to GMS free and clear of all liens, charges and encumbrances, upon receipt of
the Put or Call price. All Mexican taxes on such sale shall be paid by the
appropriate party according to local custom.
4.9 Insolvency of a Shareholder
i) If a Party makes an assignment for the benefit of creditors
or is adjudicated a bankrupt under any bankruptcy or insolvency law,
which is not dismissed within sixty (60) calendar days thereof, the
other Party shall have the right, by providing written notice to
such Party or its representative within thirty (30) calendar days of
such assignment or adjudication, to acquire, in consideration of the
payment of $1.00, all but not less than all, of the Equity
Securities beneficially owned by such Party. The transfer of such
Equity Securities shall be effected promptly after receipt of such
notice.
ii) If a Party defaults in transferring such Equity Securities to
the other Party as provided in paragraph i) above, the Secretary of
the Corporation is authorized and directed to cause the name of the
transferee to be entered in the registers of the Corporation as the
holder of such Equity Securities. After its name has been entered
in the registers of the Corporation in exercise of the aforesaid
power, the validity of the proceedings shall not be subject to
question by any person. On such registration, the transferor shall
cease to have any right to, or in respect of such Equity Securities.
ARTICLE 5
GENERAL SALE PROVISIONS
5.1 Sale Provisions
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A Party who sells any Equity Securities pursuant to the provisions of this
Agreement (the "Seller") shall be deemed to warrant to the other Party who
purchases such Equity Securities (the "Buyer") that, at the time of closing of
the transaction of purchase and sale in question, (a) the Seller shall have
good and marketable title to such Equity Securities and (b) the Buyer will
acquire such Equity Securities free and clear of any encumbrance of any kind,
and in addition the Seller shall indemnify and save the Buyer harmless against
any loss suffered by the Buyer as a result of there being any encumbrance upon
or any defect in the title of the Seller to such Equity Securities.
5.2 Conditions of Closing
At the time of closing of any purchase of Equity Securities of the
Corporation as set forth in this Agreement, the Seller shall present such
authorizing resolutions, orders and other instruments as counsel for the Buyer
shall reasonably consider necessary to effect and evidence a valid transfer of
such Equity Securities; and the Buyer shall pay for such Equity Securities by
wire transfer or certified cheque. If the Seller fails to comply with the
requirements set out in this Section, the Buyer shall, in addition to its other
rights and remedies, including its right to specific performance, be entitled
to rescind and shall have an action for damages.
5.3 Indebtedness of Seller to Corporation
If, on the date of closing of any sale and purchase of Equity Securities
of the Corporation, the Seller is indebted to the Corporation in an amount
recorded on the books of the Corporation and verified by the auditor or
accountant of the Corporation, as the case may be, then unless otherwise agreed
in writing between the Corporation and the Seller, the Buyer shall pay the
purchase price payable therefor by it to the Corporation by presenting and
delivering to the Secretary of the Corporation at the time of closing of such
purchase and sale, the purchase price
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for such Equity Securities and the Corporation shall apply the total purchase
price proceeds to repayment of the indebtedness of the Seller to the
Corporation. If such proceeds exceed such indebtedness, the Corporation shall
pay the excess over to the Seller at the time of closing of such purchase and
sale. In the event that the Seller sells all of the Equity Securities of the
Corporation owned by him and the indebtedness of the Seller to the Corporation
exceeds the proceeds of such sale, then the Seller shall at the date of closing
pay the balance of such indebtedness to the Corporation to retire such
indebtedness.
5.4 Indebtedness of Corporation to Seller; Seller's Guaranties
If, as of the date of closing of a sale and purchase of Equity Securities
of the Corporation to a Party pursuant to Article 4, the Corporation is
indebted to the Seller or the Seller is the guarantor of any indebtedness of
the Corporation, the Corporation or the purchasing Party shall, no later than
the time of closing, repay such indebtedness at its face value with interest
(notwithstanding the terms of such indebtedness), or assume or arrange for the
assumption of such guaranty.
5.5 Agreement Binding on Transferees
No Equity Securities of the Corporation shall be effectively issued, sold,
transferred, disposed of or conveyed, whether pursuant to any provision of
Article 4 or otherwise, until the proposed transferee or purchaser executes
Schedule A. Upon the proposed transferee or purchaser so doing, such
agreements shall inure to the benefit of and be binding upon such transferee or
purchaser.
5.6 Continuing Obligations
Any Party who sells to a person, other than its Affiliate, all of the
Equity Securities of the Corporation owned by it in accordance with the terms
of this Agreement shall thereafter be
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released and discharged from the further performance of all of its covenants and
obligations and shall have no rights hereunder from and after the date of such
sale and compliance by the transferee with Section 5.5 except for those
obligations set out in Section 7.2 and the Supply Agreement, which by their
terms, are to survive any such sale or ceasing to be a Shareholder.
ARTICLE 6
ADDITIONAL ISSUE OF EQUITY SECURITIES
6.1 Pre-emptive Right
In the event that the Corporation wishes at any time hereafter to issue
any Equity Securities, it shall offer them for purchase to all Shareholders by
notice given to each such Shareholder. Such notice shall set forth a
description of the Equity Securities to be offered, the purchase price and the
purchase date which shall be a date not earlier than forty-five (45) days after
the date of such notice. Upon receipt of such notice, each such Shareholder
shall have the right to subscribe for and purchase a number of such Equity
Securities determined by multiplying the total number of Equity Securities
offered by a fraction, the numerator of which, shall be the number of Shares
owned by such Shareholder at the date of such notice and the denominator of
which shall be the total number of Shares outstanding as at the date of such
notice. Such right shall be exercised by the Shareholder by giving notice of
acceptance to the Corporation within thirty (30) calendar days after receipt of
the notice from the Corporation. In the event that the Shareholder does
exercise such right, it shall subscribe, purchase and pay for such Equity
Securities on the purchase date set forth in the notice of the Corporation. If
the Shareholders do not subscribe for their respective proportions, the
unsubscribed Equity Securities shall be used to satisfy the subscriptions of
such Shareholders for Equity Securities in excess of
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their proportion, but no Shareholder shall be bound to take any such Equity
Securities in excess of the amount desired.
6.2 Offer to Others
If any of the Equity Securities of any issue are not subscribed for, the
Corporation may, upon Special Resolution during the period of sixty (60) days
following the expiry of the offer to the Shareholders, offer any of the Equity
Securities not taken up by the Shareholders to any other person, provided that
the price at which such Equity Securities may be allotted and issued shall not
be less than the subscription price offered to the Shareholders and the terms
of payments shall not be more favorable than the terms offered to the
Shareholders.
ARTICLE 7
CONFIDENTIALITY
7.1 Provision of Information
Each Party as appropriate shall provide Confidential Information regarding
certain aspects of their respective businesses to the other and the Corporation
as may be reasonably required so as to permit the performance of the
obligations arising under the terms of the Joint Venture Agreement.
7.2 Maintenance of Confidentiality
Each Party shall receive and maintain Confidential Information in the
strictest of confidence and shall only use such information for the limited
purpose of enabling their respective officers, employees, representatives and
directors to fulfill their respective obligations hereunder and under the Joint
Venture Agreement and shall not disclose such information or any part thereof
to any other person or entity without the prior written consent of the party
providing such information, provided that no consent shall be required for
disclosure of such information to
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the accountants and solicitors for each of the Shareholders. The following
information shall not constitute Confidential Information and not be deemed
industrial secrets:
(a) information which at the time of disclosure is generally
available to the public;
(b) information which, after disclosure, becomes generally
available to the public through no fault of the receiving party;
(c) information which the receiving party can show was in its
possession prior to the disclosure and which was not acquired
directly or indirectly from the other party;
(d) information which the receiving party can show was received
by it after the time of disclosure from any third party without any
obligation of confidentiality and which was not acquired from the
other party.
7.3 Survival
The obligations in this Article 7 shall survive termination or ceasing to
be a Shareholder under this Agreement for a period of five (5) years.
ARTICLE 8
GENERAL
8.1 Notices
All notices, requests, demands and other communications shall, (in the
absence of any specific provision to the contrary) be in writing and delivered
or sent by pre-paid registered mail to the following respective addresses:
to Nordion: 000 Xxxxx Xxxx
Xxxxxx, Xxxxxxx, Xxxxxx
K2KIX8
Attention - Vice President, Market Development
To GMS- 0000 Xxxxxx Xxxx,
Xxx Xxxxx, XX 00000-0000
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U.S.A.
Attention: President
with a copy to:
Xxx Xxxxxxxx Xxxxxx
Xxxxx, XX 00000-0000
U.S.A.
Attention: General Counsel
In the event that it may be reasonably anticipated that, due to any strike,
lockout, or similar event involving an interruption in postal service, any
payment or communication will be received by the addressee later than the tenth
(10th) day following the mailing date, then the mailing of any such payment or
communication as aforesaid shall not be an effective means of sending the same,
but rather any payment or communication must then be sent by an alternative
means of transportation which may be reasonably anticipated will cause the
payment or communication to be received reasonably expeditiously by the
addressee and which will provide written proof of receipt. A Party may from
time to time change its address herein by providing notice to the other Parties
in accordance with this Section.
8.2 No Partnership
Nothing in this Agreement shall be deemed in any way or for any purpose to
constitute any party a partner of any other party to this Agreement in the
conduct of any business or otherwise.
8.3 Successors and Assigns
This Agreement is not assignable by any party except insofar as its Equity
Securities are transferred in accordance with its provisions. The provisions
of this Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective heirs, executors,
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administrators, committees, successors, receivers, trustees in bankruptcy or
other legal representatives and each and every person so bound shall make,
execute and deliver all documents necessary to carry out this Agreement.
8.4 Time of the Essence
Time shall be of the essence of this Agreement.
8.5 Further Assurances
The Parties hereto hereby covenant and agree that they and their
respective heirs, executors, administrators, successors and assigns and
nominees shall execute and deliver such further and other instruments,
agreements and writings and shall cause such meetings to be held, resolutions
passed and by-laws enacted, exercise their vote and influence, do and perform
and cause to be done and performed, such further and other acts and things that
may be reasonably necessary or desirable in order to give full effect to this
Agreement and every part of it, and for the purpose of ensuring that the
directors of the Corporation shall exercise their powers as members of the
board consistently with the provisions of this Agreement and for the purpose of
effectuating the same.
8.6 Separate Counterparts
This Agreement may be executed in one or more counterparts, each of which
when so executed and delivered shall be deemed to be an original and such
counterparts together shall constitute one and the same instrument.
8.7 Share Certificates
All certificates evidencing Shares of the Corporation and all Equity
Securities held by any of Shareholders shall have the following legend endorsed
thereon forthwith after the execution of this Agreement:
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"The Corporation is bound by and the securities evidenced by this
certificate are subject to, and the disposition and transfer of such securities
are restricted by a shareholders' agreement dated as of the day of June, 1997."
8.8 Subdivision, Consolidation, etc. of Equity Securities
The provisions of this Agreement relating to Equity Securities of the
Corporation shall apply mutatis mutandis to any shares into which such Equity
Securities or any of them may be converted or changed, or to any Equity
Securities resulting from a reclassification, subdivision or consolidation of
any Equity Securities, and also to any Equity Securities of the Corporation
which are received by the holders of Equity Securities as a stock dividend, and
to any Equity Securities and also to any Equity Securities of the Corporation
which are received by the holders of Equity Securities as a stock split or
stock dividend, and to any Equity Securities or other securities of the
Corporation or of any successor body corporate which may be received by the
holders of Equity Securities on an amalgamation, reorganization, merger or
combination of the Corporation.
8.9 Conflict
In the event of any conflict or inconsistency between this Agreement and
the Joint Venture Agreement, the Articles, By-laws or resolutions passed by the
Corporation as of the date hereof, the provisions of this Agreement shall
prevail.
8.10 Force Majeure
No Party shall be in default hereunder by reason of its delay in the
performance or failure to perform any of its obligations hereunder, if such
delay or failure, without limiting the generality of the following, is caused
by strike, acts of God or the public enemy, unavailability of the supply of raw
materials, riots, acts of terrorism, interference by civil or military
authorities,
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compliance with government laws, rules and regulations, decisions of competent
authorities or any fault beyond its reasonable control.
8.11 Entire Agreement
Unless otherwise set out, this Agreement constitutes the entire agreement
between the Parties relating to the subject matter herein and supersedes any
and all prior agreements, negotiations, representations and understandings
whether written or oral between the Parties relating to its subject matter.
This Agreement may not be modified in any manner except by a further written
agreement signed by duly authorized officers or representatives of each of the
Parties.
8.12 Waiver
The failure of any Party to this Agreement to enforce at any time any of
the provisions of this Agreement or any of its rights in respect thereto or to
insist upon strict adherence to any term of this Agreement will not be
considered to be a waiver of such provision, right or term or in any way to
affect the validity of this Agreement or deprive the applicable Party of the
right thereafter to insist upon strict adherence to that term or any other term
of this Agreement. The exercise by any Party of any of its rights provided by
this Agreement will not preclude or prejudice such Party from exercising any
other right it may have by reason of this Agreement or otherwise, irrespective
of any previous action or proceeding taken by it hereunder. Any waiver by any
Party hereto of the performance of any of the provisions of this Agreement will
be effective only if in writing and signed by a duly authorized representative
of such Party.
8.13 Severability
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Each and every provision of this Agreement shall be treated as separate
and distinct and in the event of any provision hereof being declared invalid
such provision shall be deemed to be severable and all other provisions hereof
shall remain in full force and effect.
8.14 Governing Law
This Agreement and the rights, and obligations and relations of the
Parties hereto, shall be governed and construed in accordance with the laws of
the State of New York and the Federal laws applicable therein (but without
giving effect to any conflict of law rules). The Parties hereto agree that the
Federal District courts of the U.S.A., Southern District of New York, shall
have jurisdiction to enter any action or other legal proceedings based on any
provisions of this Agreement. Each Party does hereby attorn to the
jurisdiction of the courts of the State of New York, U.S.A.
47
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IN WITNESS WHEREOF the parties have executed this Agreement as of the date
first written above.
MDS NORDION INC.
by: /s/ Xxxxx X. Xxxxxx
---------------------------
Xxxxx X. Xxxxxx
Vice President
Market Development Division
by: /s/ Xxxxx X. Xxxxxxxx
---------------------------
Xxxxx X. Xxxxxxxx
Vice President, General Counsel
and Corporate Secretary
XXXXXXXX MICRO SCIENCE INTERNATIONAL, INC.
by: /s/ Xxxxx X. Xxxx
---------------------------
Xxxxx X. Xxxx
President-CEO
48
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SCHEDULE A TO SHAREHOLDERS AGREEMENT
The undersigned hereby agree to be bound by the provisions of this
Agreement as though an original signatory thereto.
---------------------------------
Name of New Shareholder
By:
------------------------------
Authorized Signer
49
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SCHEDULE B TO SHAREHOLDERS AGREEMENT
The Put Price shall be determined by multiplying the US dollar value of
Nordion's initial investment in the Corporation by a fraction, the numerator of
which is the cumulative actual sales of food irradiation services by the
Corporation for the first five (5) years of sales by the Corporation after
commissioning of the Mexican facility and the denominator of which is
US$5,605,000, which is the cumulative sales of food irradiation services
projected in the Initial Business Plan for the same five (5) year period,
provided that the value of such fraction is less than or equal to one (1). In
the event the fraction is greater than 1, the Put Price shall be equal to the
amount of Nordion's initial investment in the Corporation.
