AGREEMENT
THIS AGREEMENT (“Agreement”), dated as of
November 19, 2008, is entered into by and between MDS Inc., a corporation
governed by the laws of Canada (the “Company”), Obrem Capital
Offshore Master, L.P. (“Obrem
Capital Offshore”) and Obrem Capital (QP), L.P. (“Obrem Capital (QP)” and,
together with Obrem Capital Offshore, the “Shareholders”).
WITNESSETH:
WHEREAS, one or more of the
Shareholders is the beneficial owner of 7,884,100 common shares of the Company
(each a “Common Share”),
which represents approximately 6.5% of the outstanding Common Shares;
and
WHEREAS, the Company and the
Shareholders desire to undertake the actions and agreements contained
herein.
NOW, THEREFORE, in
consideration of the sum of $1.00 and the mutual promises, representations,
warranties, respective covenants and agreements of the parties contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by each of the parties hereto, the parties hereto,
intending to be legally bound hereby, agree as follows:
ARTICLE 1
REPRESENTATIONS
AND WARRANTIES
1.1 Representations
and Warranties of the Shareholders
The
Shareholders represent and warrant to the Company that:
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(a)
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one
or more of the Shareholders is the registered and direct or indirect
beneficial owner of the Common
Shares,
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(b)
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each
of the Shareholders is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization and has all
requisite power and authority to execute and deliver this
Agreement,
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(c)
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this
Agreement has been duly executed and delivered by the Shareholders,
and
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(d)
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this
Agreement constitutes the valid and binding agreement of the Shareholders,
enforceable against the Shareholders in accordance with its terms, except
as may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, and similar laws relating to or affecting
creditors’ rights generally and general equitable principles (whether
considered in a proceeding in equity or at law), in each case now or
hereafter in effect.
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1.2 Representations
and Warranties of the Company
The
Company represents and warrants to the Shareholders that:
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(a)
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the
Company is duly organized, validly existing and in good standing under the
laws of Canada and has all requisite corporate power and authority to
execute and deliver this Agreement,
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(b)
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this
Agreement has been duly executed and delivered by the Company,
and
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(c)
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this
Agreement constitutes the valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as
may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, and similar laws relating to or affecting
creditors’ rights generally and general equitable principles (whether
considered in a proceeding in equity or at law), in each case now or
hereafter in effect.
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ARTICLE 2
COVENANTS
2.1 Covenants
of the Shareholders
Each of
the Shareholders agrees with the Company that, during the period commencing on
the date hereof and ending on the termination of this Agreement as provided in
Section 3.1, it shall not, and shall cause each of its directors, officers,
partners, members, employees, agents (acting in such capacity), directly or
indirectly controlled investment funds and any Person in whom the Shareholders
and/or such funds beneficially own and/or exercise control or direction over,
directly or indirectly, securities carrying more than 50% of the voting rights
of such Person (collectively, “Representatives”) not to, in
any manner, directly or indirectly, alone or in concert with
others:
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(a)
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propose
to any individual, corporation or other entity of any kind (each a "Person"), other than the
other Shareholder and its Representatives and the Company, that such
Person effect or seek to effect, encourage or seek to encourage, or
discourage or seek to discourage, any proxy contest, take-over bid,
amalgamation, merger, consolidation, acquisition, disposition, scheme,
arrangement, business combination or other extraordinary transaction
involving the Company or any of its subsidiaries or joint ventures or any
of their respective securities;
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(b)
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form,
join, encourage, influence, advise or in any way participate in a “group”
(within the meaning of Section 13(d)(3) of the United States Securities Exchange Act of
1934 (the “Exchange Act”)) or act
jointly or in concert (within the meaning of applicable Canadian
securities laws) with any Person (other than the other Shareholder) with
respect to the acquisition or voting of any securities of the Company or
otherwise in any manner agree, attempt, seek or propose to deposit any
securities of the Company or any securities convertible or exchangeable
into or exercisable for any such securities in any voting trust or similar
arrangement with any Person;
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(c)
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in
any way “solicit" any “proxies” (as such terms are defined in the Canada Business Corporations
Act (the “CBCA”) and applicable
Canadian securities laws, but excluding the exceptions provided in section
67 of the Regulations under the CBCA, paragraph (b) of subsection 68(1) of
the Regulations under the CBCA and paragraphs (i), (j) and (k)(ii) and
(iii) of the definition of “solicit” in section 1.1 of National Instrument
51-102 – Continuous
Disclosure Obligations of the Canadian Securities Administrators)
from the Company’s shareholders;
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(d)
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make
or be the proponent of any shareholder proposal, whether pursuant to
section 137 of the CBCA or
otherwise;
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(e)
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(1)
call or seek to call a meeting of shareholders, including requisitioning
the Board to call a meeting of shareholders pursuant to section 143 of the
CBCA or otherwise, (2) seek representation on the Board on its behalf or
on behalf of any other Person, or (3) seek the removal of any member of
the Board;
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(f)
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make
any public proposal or request with respect to: (A) an extraordinary
corporate transaction, such as a merger, reorganization or liquidation,
involving the Company or any of its subsidiaries or joint ventures; (B) a
sale or transfer of a material amount of assets of the Company or any of
its subsidiaries or joint ventures; (C) any change in the Board or
management of the Company, including any plans or proposals to change the
number or term of directors or to fill any existing vacancies on the
Board; (D) any material change in the capitalization or dividend policy of
the Company; (E) any other material change in the Company’s business or
corporate structure; (F) changes in the Company’s articles, by-laws or
instruments corresponding thereto or other actions which may impede the
acquisition of control of the Company by any Person; (G) causing a class
of securities of the Company to be delisted from, or to cease to be
authorized to be quoted on, any stock exchange or quotation system on
which any of the securities of the Company are listed or posted for
trading or quoted, as applicable, at the relevant time; (H) a class of
equity securities of the issuer becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Exchange Act; or (I) any
action similar to any of those enumerated in this paragraph
(f);
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(g)
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seek
to have the Company amend or modify any provisions of the Company’s
articles or by-laws or waive, amend, modify or terminate the Amended and
Restated Shareholder Protection Rights Agreement dated as of March 9,
2006, between the Company and CIBC Mellon Trust Company, as the same may
otherwise be amended, supplemented or replaced from time to
time;
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(h)
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(A)
make, (B) in any way seek to make, or (C) take any action that is designed
to require the Company or any other Person under applicable Canadian or
U.S. securities laws or stock exchange rules to make, any public statement
or disclosure (including, without limitation, in the case of the
Shareholders, by way of amendment to the Shareholders’ previous filings
pursuant to Rule 13D under the Exchange Act), whether oral, by way of
press release or otherwise, concerning the Company (which for purposes of
this section shall include the Company’s subsidiaries and joint venture
interests), including without limitation, the Company’s securities (other
than disclosure that is required by applicable Canadian and/or U.S.
securities laws as a result of changes in the number of Common Shares held
by the Shareholders from time to time), business, affairs, operations,
results of operations, plans, prospects, and the Company’s directors,
officers or employees (provided that the Shareholders may make public
disclosure of this Agreement as is required by applicable Canadian and
U.S. securities laws); or
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(i)
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request
the Company or any of its representatives (including the Board), directly
or indirectly, to release any of the Shareholders from, amend or waive any
provision of this Agreement;
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provided
that nothing in this Agreement shall xxxxxx the Shareholders' ability to vote
their Common Shares as they see fit.
ARTICLE 3
TERMINATION
3.1 Termination
The
provisions of this Agreement shall remain in full force and effect until the
earlier of:
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(a)
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the
date immediately after the annual meeting of the shareholders of the
Company in 2009 (including any adjournment or postponement thereof);
and
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(b)
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April
30, 2009.
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ARTICLE 4
GENERAL
4.1 Notices
All
notices, requests, claims, demands and other communications hereunder shall be
in writing and shall be deemed to have been duly given to a party if delivered
in person or sent by overnight delivery (providing proof of delivery) to the
party at the following addresses (or at such other address for a party as shall
be specified by like notice) on the date of delivery, or if by facsimile, upon
confirmation of receipt:
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If
to the Company:
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0000
Xxxxxxxx Xxxx. East
Suite
300, West Tower
Mississauga,
Ontario L4W 4V9
Attention: General
Counsel
Telephone: 416.213.4255
Facsimile:
416.213.4222
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If
to the Shareholders and any of their Representatives:
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c/o
Obrem Capital Management, LLC
000
Xxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx, XX 00000
Attention: Xxxxxx
Xxxxxxxxxxxxx
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
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4.2 No
Third-Party Beneficiaries
Nothing
in this Agreement, whether express or implied, is intended to or shall confer
any rights, benefits or remedies under or by reason of this Agreement on any
Persons other than the parties and their respective successors and permitted
assigns, nor is anything in this Agreement intended to relieve or discharge the
obligation or liability of any third Persons to any party, nor shall any
provisions give any third Persons any right or subrogation over or action
against any party.
4.3 Governing
Law
This
Agreement shall be governed by and construed and enforced in accordance with the
laws of the Province of Ontario and the federal laws of Canada applicable
therein, without giving effect to the conflicts of law provisions thereof. Any
disputes arising out of or in connection with this Agreement shall be
adjudicated in the Courts of Ontario. Each party hereto irrevocably submits (and
the Shareholders shall cause the Representatives to submit) to the personal
jurisdiction of such court for the purposes of any such suit, action,
counterclaim or proceeding arising out of this Agreement (collectively, a “Suit”). Each of the parties
hereto hereby waives and agrees not to assert by way of motion, as a defense or
otherwise in any such Suit, any claim that it is not subject to jurisdiction of
the above court, that such Suit is brought in an inconvenient forum, or the
venue of such Suit is improper.
Each of
the parties hereby agrees (and the Shareholders shall cause the Representatives
to accept) that service of all writs, process and summonses in any Suit may be
made upon such party or Representative by mail to the address as provided in
this Agreement. Nothing herein shall in anyway be deemed to limit the ability of
any party to serve any such writs, process or summonses in any other matter
permitted by applicable law.
4.4 Assignment;
Successors
This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties and their respective successors and permitted
assigns. No party to this Agreement may assign its rights or delegate
its obligations under this Agreement, whether by operation of law or
otherwise.
4.5 Amendments;
Waivers
Subject
to applicable law, this Agreement may only be amended pursuant to a written
agreement executed by all the parties, and no waiver of compliance with any
provision or condition of this Agreement and no consent provided for in this
Agreement shall be effective unless evidenced by a written instrument executed
by the party against whom such waiver or consent is to be
effective. No waiver of any term or provision of this Agreement shall
be construed as a further or continuing waiver of such term or provision or any
other term or provision.
4.6 Entire
Agreement
This
Agreement constitutes the entire agreement of all the parties and supersedes any
and all prior and contemporaneous agreements, memoranda, arrangements and
understandings, both written and oral, between the parties, or any of them, with
respect to the subject matter hereof. No representation, warranty,
promise, inducement or statement of intention has been made by any party which
is not contained in this Agreement and no party shall be bound by, or be liable
for, any alleged representation, promise, inducement or statement of intention
not contained herein or therein. The parties expressly disclaim
reliance on any information, statements, representations or warranties regarding
the subject matter of this Agreement other than the terms of this
Agreement.
4.7 Counterparts
To
facilitate execution, this Agreement may be executed in any number of
counterparts (including by facsimile transmission), each of which shall be
deemed to be an original, but all of which together shall constitute one binding
agreement on the parties, notwithstanding that not all parties are signatories
to the same counterpart.
4.8 Specific
Performance
The
parties agree that irreparable damage would occur in the event any of the
provisions of this Agreement were not performed in accordance with the terms
hereof and that the parties are entitled to an injunction or specific
performance of the terms hereof in addition to any other remedies at law or in
equity.
4.9 Effect
of Termination
This
Article 4 shall survive the termination of any of the provisions this
Agreement. No termination of this Agreement shall relieve any party
hereto from liability for any breach of this Agreement prior to such
termination.
IN WITNESS WHEREOF, the
parties have duly executed this Agreement as of the date first above
written.
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By:
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/s/
Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx
X. Xxxxxx
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Title: EVP
Finance & CFO
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OBREM
CAPITAL OFFSHORE MASTER, L.P.
By
Obrem Capital (GP), LLC,
its
General Partner
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By:
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/s/
Xxxxxx Xxxxxxxxxxxxx
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Name: Xxxxxx
Xxxxxxxxxxxxx
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Title: Managing
Member
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OBREM
CAPITAL (QP), L.P.
By
Obrem Capital (GP), LLC,
its
General Partner
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By:
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/s/
Xxxxxx Xxxxxxxxxxxxx
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Name: Xxxxxx
Xxxxxxxxxxxxx
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Title: Managing
Member
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