Exhibit 4.7
UNANIMOUS SHAREHOLDERS' AGREEMENT
ENTERED INTO in the City of Montreal, Province of Quebec, as of February 18,
2000.
AMONG: DRAXIS HEALTH INC., a corporation incorporated under the
laws of Canada, having its head office at 0000 Xxxxxxx
Xxxxx, Xxxxxxxxxxx, Xxxxxxx, X0X 0X0, acting and represented
herein by Xx. Xxxxxx Xxxxxx, its President and CEO, duly
authorized for the purposes hereof as he so declares;
("DHI")
AND: SGF SANTE INC., a company duly incorporated under the laws
of Quebec, having its head office at 600 de La Gauchetiere
Street West, Suite 1700, Xxxxxxxx, Xxxxxx, X0X 0X0, acting
and represented herein by Xxxxxxx Xxxxxxx, its President,
and by Xxxxxx Xxxxxx, its Secretary, duly authorized as they
so declare;
("SGF Sante")
AND: DRAXIS PHARMA INC., a corporation duly incorporated under
the laws of Canada, having its head office at 0000 Xxxx
Xxxxxx, 0xx Xxxxx, Xxxxxxxx, Xxxxxx, X0X 0X0, acting and
represented herein by Xxxxxx Xxxxxx, its President, duly
authorized for the purposes hereof as he so declares;
(the "Corporation")
AND: XXXXXX XXXXXX, businessman, residing at 000 Xxxxxxx, X'Xxx
Xxxxxx, Xxxxxx, X0X 0X0;
("Xxxxxx")
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AND: XXXXXXXX XXXXXX, businessman, residing at 000 XxxXxxxxx,
Xxxxxxxx, Xxxxxx, X0X 0X0;
("Barkat")
(Xxxxxx and Xxxxxx are sometimes collectively referred to as
"Management")
WHEREAS the Corporation is authorized to issue an unlimited number of Common
shares, of which 19,663,632 common shares are issued and outstanding and
registered in the names of the following shareholders:
SHAREHOLDER NUMBER AND CLASS OF SHARES
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DHI 13,000,000 common shares (66.11%)
SGF Sante 6,302,521 common shares (32.05%)
Management 361,111 common shares (1.84%)
WHEREAS the Parties hereto have agreed that it is in their best interests to set
forth certain terms and conditions governing the ownership, transfer and issue
of the Shares they currently hold in the share capital of the Corporation and of
any other subsequently issued Shares of the share capital of the Corporation and
to record their mutual understanding as to the manner in which certain affairs
of the Corporation shall be conducted and to provide for their respective rights
and obligations;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and other good and valuable consideration, the Parties
hereby agree as follows:
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ARTICLE 1
RECITALS, DEFINITIONS AND INTERPRETATION
1.1 RECITALS AND SCHEDULES. The recitals and the following schedules form
an integral part of this Agreement:
Schedule 1.1: Equity Participation Plan
Schedule 1.12: Intervention Form
Schedule 3.1.1: Business Plan
Schedule 3.1.17: Delegation of authority
Schedule 5.8.2: Loan
Schedule 9.4: Management Employment Contracts
1.2 DEFINITIONS. In this Agreement, unless something in the subject matter
or context is inconsistent therewith:
"ACCEPTABLE SECURITIES" means securities listed on an Acceptable Stock
Exchange, where, at the relevant time:
(i) such securities will be immediately freely tradeable in Canada
upon their acquisition;
(ii) the market capitalization of all such securities shall be not
less than $300,000,000 and such securities shall be widely
held;
(iii) such securities are securities of a company of which not less
than 40% of all its outstanding securities are so listed and
freely tradeable; and
(iv) there are not less than 40% of such freely tradeable
securities which were traded in the immediately preceding 12
months;
"ACCEPTABLE STOCK EXCHANGE" means the Toronto Stock Exchange, the New
York Stock Exchange or NASDAQ;
"ADDITIONAL RIGHT" has the meaning ascribed to it in section 5.7;
"AGREEMENT" means this shareholders' agreement including all attached
Schedules, as the same may be supplemented, amended, restated or
replaced from time to time;
"APPLICABLE LAW" means any domestic or foreign statute, law, ordinance,
regulation, by-law (zoning or otherwise) or order that applies to the
Corporation or its Subsidiaries;
"APPLICABLE FISCAL LAW" means the INCOME TAX ACT (Canada);
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"AUDITORS" means the auditors of the Corporation in office at the date
of the event by reason of which they are called upon to act hereunder,
duly commissioned with respect to the fiscal period concerned or,
failing this, any chartered accountant specifically designated by the
interested Parties for such purpose;
"BENEFICIARY(XXXX)" has the meaning ascribed to it in section 7.1;
"BOARD" has the meaning ascribed to such term in section 2.1 and
"BOARDS" means more than one of them;
"BUSINESS DAY" means a day other than a Saturday or Sunday, on which
Canadian chartered banks are open for the transaction of domestic
business in the City of Montreal, Province of Quebec;
"BUSINESS PLAN" has the meaning ascribed to it in subsection 3.1.1;
"CAPITAL AMOUNT" has the meaning ascribed to it in section 5.4;
"CBCA" means the CANADA BUSINESS CORPORATIONS ACT and the regulations
thereto as amended from time to time;
"CONTROL" (and "CONTROLLING") for a legal person means the holding, or
exercise of control or direction over, by a Person, directly or
indirectly, other than as a creditor only, of securities which grant it
more than 50% of the votes that may be cast for the election of the
directors of the legal person in question, (irrespective of whether or
not, at the time, shares of any other class or classes of such Person
shall have or might have voting power by reason of the happening of any
contingency);
"CONVERTIBLE SECURITY" means a security of a body corporate, including
a debt obligation, which is convertible into, exchangeable for or which
carries a right or obligation to purchase, one or more shares, voting
securities or participating securities of such body corporate
including, for greater certainty, options and warrants;
"DIRECTOR" or "DIRECTORS" means a member or members of the Boards;
"DISPOSE" (and "DISPOSITION") means to sell, transfer, exchange, give,
dispose of or otherwise assign in any manner whatsoever (including
without limitation the grant of rights with respect to property), or
any attempt to perform any of those operations;
"EMERGENCY ADVANCE" has the meaning ascribed to it in section 5.4;
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"ENCUMBER" means to hypothecate, mortgage, encumber with a charge,
lien, priority, appropriation or option or otherwise give as security
or encumber in any manner whatsoever, or any attempt to perform any of
those operations;
"EQUITY INVESTMENT" has the meaning ascribed to it in section 5.8.1;
"EQUITY PARTICIPATION PLAN" means the equity participation plan adopted
by the Corporation, a copy of which is attached hereto as Schedule 1.1;
"FAIR MARKET VALUE" of a Share means the fair market value of the
Corporation and its Subsidiaries, if any, as a whole, without any
discount such as, but not limited to, a discount for minority
interests, low liquidity or absence of market, divided by the number of
outstanding Shares of the Corporation at the relevant time. The fair
market value of the Corporation shall be established by Certified
Business Valuators selected among nationally-recognized accounting
firms following the request by the Corporation, DHI or SGF Sante
pursuant to the provisions of this Agreement. Each of DHI and SGF Sante
shall nominate such a valuator within 10 days of the above request and
the valuators shall have a period of 30 days following the expiry of
such 10-day delay to establish a fair market value of the Corporation.
If the difference between the values so established is less than 15% of
the higher value, the fair market value of the Corporation shall then
mean the average of the values submitted by such valuators within the
delays referred to above. If such difference is equal to or greater
than 15% of the higher value, DHI and SGF Sante shall immediately name
a third Certified Business Valuator selected at random among the
following: Line Xxxxxxx of Xxxxxx Xxxxxxxx, Xxxxxxx Xxxxxx of
Pricewaterhouse Coopers, Xxxxx Xxxxxxxx of Ernst & Young and Xxxxxxx
Xxxxxxx of Xxxxxx Xxxxxx, it being understood that in the event any of
such individuals is not available for selection or refuses to act or is
no longer with the same firm, then a replacement individual of
comparable experience and qualification shall be substituted from the
same firm. The third such valuator shall have a period of 10 days to
choose between the two above-mentioned valuations. The fair market
value of the Corporation shall then mean the value chosen by such third
valuator. The Fair Market Value determined in accordance with the
foregoing shall be final and not subject to appeal or arbitration
pursuant to this Agreement and shall be binding upon the Shareholders
and the Corporation. If either party fails to appoint a valuator
within the above-mentioned 10-day period, the determination by the
valuator who is appointed by the other party shall be final. Each
opposing party shall bear the costs of the valuator it nominates. The
costs of a third valuator, if any, shall be borne by the party whose
value is not chosen by the third valuator;
"FULLY-PARTICIPATING SHAREHOLDER" has the meaning ascribed to it in
section 5.7;
"GAAP" means generally accepted accounting principles from time to time
approved by the Canadian Institute of Chartered Accountants, or any
successor institute, applicable as at the date on which any calculation
or determination is required to be made in accordance with generally
accepted accounting principles, and where the Canadian Institute of
Chartered
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Accountants includes a recommendation in its Handbook concerning the
treatment of any accounting matter, such recommendation shall be
regarded as the only generally accepted accounting principle
applicable to the circumstances that it covers;
"GOOD FAITH OFFER" means an offer:
(i) which is addressed in writing by a Third Party to a
Shareholder for the Disposition of all, and not less than all,
of the Shares and Convertible Securities held by such
Shareholder;
(ii) where the purchase price of the Shares and Convertible
Securities, if any, is payable as follows:
A) not less than 75% in cash; and
B) not more than 25% in Acceptable Securities; for the
purposes of exercising the rights of first refusal
pursuant to section 6.5 of this Agreement, such
portion of the purchase price which is payable in
Acceptable Securities shall be deemed to be payable
in cash and to be equal to the Market Price of the
Acceptable Securities as at the date immediately
preceding the date of the Good Faith Offer;
(iii) in respect of which there accrues to the Shareholder no
collateral benefit other than the purchase price of the Shares
and Convertible Securities; and
(iv) which contains no unusual conditions for transactions of the
type contemplated and no conditions which one or more of the
Parties, as the case may be, would be unable to meet;
"INCLUDING" means "including without limitation" and the term
"including" shall not be construed to limit any general statement which
it follows to the specific or similar items or matters immediately
following it;
"INTER-COMPANY ARRANGEMENTS" has the meaning ascribed to it in
subsection 3.1.13;
"LOAN" has the meaning ascribed to it in section 5.8.2;
"MARKET PRICE" for securities listed on an Acceptable Stock Exchange
means the price, net of all brokerage and transaction fees normally
anticipated for the sale of such securities by reputable investment
firms, determined as follows:
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(i) except as provided in subparagraphs (ii) or (iii),
(A) if the Acceptable Stock Exchange provides a closing price,
an amount equal to the weighted average of the closing price
of securities of that class on the Acceptable Stock Exchange
for each trading day on which there was a closing price for
the period of 30 trading days immediately preceding the date
on which the market price is being determined (the "relevant
period"), and
(B) if the Acceptable Stock Exchange does not provide a
closing price, but provides only the highest and lowest prices
of securities traded, an amount equal to the weighted average
of the averages of the highest and lowest prices of the
securities of that class for each of the trading days on which
there were highest and lowest prices for the relevant period,
(ii) if there has been trading of the securities of the class on
the Acceptable Stock Exchange on fewer than half of the
trading days for the relevant period, the average, weighted by
number of trading days, of the following amounts established
for each trading day of the relevant period,
(A) the simple average of the bid and ask price for each
trading day on which there was no trading, and
(B) either
(I) the weighted average of the closing price of the
securities of that class for each trading day on
which there has been trading, if the Acceptable Stock
Exchange provides a closing price, or
(II) the weighted average of the averages of the
highest and lowest prices of the securities of that
class for each trading day on which there has been
trading, if the Acceptable Stock Exchange provides
only the highest and lowest prices of securities
traded on a trading day, or
(iii) if there has been no trading of the securities of the class on
the Acceptable Stock Exchange on any of the trading days
during the relevant period, the Market Price shall be deemed
to be nil;
where there is more than one Acceptable Stock Exchange, the Market
Price shall be determined by reference to the Acceptable Stock Exchange
in Canada if there is one or, if there is no Acceptable Stock Exchange
in Canada, by reference to the Acceptable Stock Exchange on which the
greatest volume of trading in the securities occurred during the
relevant period;
"MERCK FROSST AGREEMENT" means the agreement entered into as of June
12, 0000 xxxxx Xxxxx Xxxxxx Xxxxxx Inc., the Corporation, DHI and
Draximage Inc.;
"NON-PARTICIPATING SHAREHOLDER" has the meaning ascribed to it in
section 5.7;
"PARTICIPATING SHAREHOLDERS" has the meaning ascribed to it in section
5.7;
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"PARTICIPATION RIGHT" has the meaning ascribed to it in section 5.4;
"PARTIES" means, collectively, the Shareholders and the Corporation;
"PARTLY-PARTICIPATING SHAREHOLDER" has the meaning ascribed to it in
section 5.7;
"PERSON" shall be broadly interpreted and includes an individual, body
corporate, partnership, joint venture, trust, association,
unincorporated organization, the Crown, any Governmental Authority or
any other entity recognized by law;
"PRIME RATE" means, for each day, the rate of interest charged by the
principal banker of the Corporation expressed in annual percentage,
published, advertised and commonly known from time to time as the
reference rate on which the rates of interest of such financial
institution are based in connection with commercial loans granted in
Canada;
"PRO RATA BASIS" means the proportion that the number of participating
and voting Shares held by each Shareholder bears to the total number of
outstanding voting and participating Shares, in both cases on a
non-diluted basis;
"RELATED PARTY" with respect to another Person means (i) a Person
who/which does not deal at arm's length with this other Person or with
any of the Persons described in subparagraphs (ii) to (vi) inclusively
of this definition, within the meaning of the Applicable Fiscal Law;
(ii) a Person who/which is an "associate" in relation to this other
Person under the CANADA BUSINESS CORPORATIONS ACT; (iii) a Person in
relation to whom/which this other Person is an "associate" under the
CANADA BUSINESS CORPORATION ACT; (iv) a Subsidiary of this other
Person; (v) a Person in relation to whom/which this other Person is a
Subsidiary or (vi) a Person who/which is an "affiliate" of this other
Person under the CANADA BUSINESS CORPORATIONS ACT;
"SHARE" means any share of any class or series of the share capital of
the Corporation, as the case may be;
"SHARE PRICE" has the meaning ascribed to it in section 5.6;
"SHAREHOLDERS" means DHI, SGF Sante, Management and any other Person
which becomes a holder of Shares of the Corporation;
"SUBSCRIPTION AGREEMENT" means the Subscription Agreement entered into
between SGF Sante and the Corporation as of the date hereof, pursuant
to which SGF Sante subscribed for 6,302,521 common shares of the
Corporation;
"SUBSIDIARY" means, with respect to any Person, any other Person of
which more than 50% of the outstanding stock having ordinary voting
power of such other Person (irrespective of
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whether or not, at the time, stock of any other class or classes of
such other Person shall have or might have voting power by reason of
the happening of any contingency) is at the time directly or indirectly
owned by the first mentioned Person, or by one or more of its
subsidiaries;
"THIRD PARTY" means any Person who is neither a Shareholder, the
Corporation, an Affiliate of the Corporation nor a Related Party of a
Shareholder, the Corporation or an Affiliate; and
"TSE" means the Toronto Stock Exchange;
"$" means Canadian dollars.
1.3 EXTENDED MEANINGS. Words importing the singular number include the
plural and vice versa and words importing the masculine gender include
the feminine and neuter genders.
1.4 INTERPRETATION NOT AFFECTED BY HEADINGS. The division of this Agreement
into articles and the insertion of headings are for convenience and
reference only and shall not affect the construction or interpretation
of this Agreement.
1.5 APPLICABLE LAW. This Agreement shall be deemed to have been made in the
Province of Quebec and shall be interpreted in accordance with an
governed by the laws of Quebec and the laws of Canada applicable
therein.
1.6 FUNDS. All dollar amounts referred to in this Agreement are in lawful
money of Canada.
1.7 CALCULATIONS. All calculations and financial documents required to be
made or produced under or pursuant to this Agreement shall be made or
produced in accordance with GAAP consistently applied.
1.8 SEVERABILITY. If any provision of this Agreement shall be held invalid
or unenforceable in any jurisdiction, such invalidity or
unenforceablity shall attach only to such provision in such
jurisdiction and shall not in any manner affect or render invalid or
unenforceable such provision in any other jurisdiction or any other
provision of this Agreement in any jurisdiction.
1.9 BUSINESS DAY. In the event that any action to be taken hereunder falls
on a day which is not a Business Day, then such action shall be taken
on the next succeeding Business Day.
1.10 PREAMBLE. The preamble forms an integral part of this Agreement.
1.11 PARAMOUNTCY. If any provision of this Agreement conflicts with the
articles or any by-laws of the Corporation, a Subsidiary or any
shareholders agreement executed among any (but not all) of the Parties
hereto dealing with any matter referred to herein, the provisions of
this
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Agreement shall prevail and the Parties undertake and covenant to take
and cause to be taken all actions necessary to amend such articles,
by-laws or other agreement so as to eliminate any conflict.
1.12 INTERVENTION. Any new shareholder of the Corporation not a Party to
this Agreement at the date hereof, including any transferee to whom
Shares or Convertible Securities are transferred by a Shareholder and
any new shareholder acquiring newly issued treasury Shares or
Convertible Securities shall, prior to being registered as a
shareholder or security holder of the Corporation, sign a declaration,
in the form set out in Schedule 1.12, pursuant to which he shall become
a party to this Agreement and shall agree to be bound by the terms and
conditions hereof to the same effect as if originally named in this
Agreement as a party hereto; in the case of a transfer, the transferor
shall stipulate that such obligation of the transferee is a condition
precedent to the validity of the transfer to be made and shall notify
the Corporation of the transfer.
ARTICLE 2
BOARDS OF DIRECTORS
2.1 NUMBER OF DIRECTORS. The board of directors of each of the Corporation
and any of its Subsidiaries (the "Board"), at all times, shall consist
of 3 Directors who shall be nominated and elected in accordance with
the provisions of this Agreement.
2.2 COMPOSITION OF THE BOARDS. DHI shall be entitled to nominate two
representatives as members of each Board and SGF Sante shall be
entitled to nominate one representative as a member of each Board.
Unless either DHI or SGF Sante decides otherwise with respect to that
part of a meeting relating specifically to his performance or to his
remuneration, the president, from time to time, of the Corporation
shall be entitled to receive notice of and attend meetings of the
Boards as an observer, with the right to be heard and to have his views
and comments minuted, but no right to vote.
2.3 VACANCIES. Any vacancy on a Board shall be filled to give effect to the
scheme of representation established in section 2.2.
2.4 ELECTION. The parties hereto shall vote at all meetings of shareholders
of the Corporation and otherwise exercise their rights and take or
cause to be taken all measures to ensure that Directors are elected or
appointed and maintained in office and vacancies on each Board are
filled in conformity with the provisions of sections 2.1, 2.2 and 2.3
hereof and, in particular, to appoint the nominee(s) designated by a
party hereto in case of vacancy or replacement.
2.5 UNDERTAKINGS. Each Party hereto shall at all times carry out and use
its best efforts to cause the Corporation and its Subsidiaries and, to
the extent permitted by Applicable Law, its
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nominees on each Board to carry out the provision of this Agreement.
Each Party hereto shall duly and punctually do, or cause to be done,
all such things, including without limitation, voting or causing to be
voted all the shares held by such Party as shall be necessary or
desirable to give effect to this Agreement.
2.6 QUORUM AT BOARD MEETINGS. The quorum at meetings of the Boards shall
consist of a majority of the Directors in office, provided that each
such majority must include the director nominated by SGF Sante. If a
quorum is not reached at any meeting, that meeting may be adjourned by
the Directors attending to a date no earlier than the third Business
Day following the date of the original meeting date and no later than 6
Business Days after such original meeting date, in which case, provided
notice of such adjourned meeting has been given to all Directors as
soon as possible, the quorum shall be constituted by the Directors
present. Directors may attend meetings in person or by telephone.
2.7 CHAIRMAN AND CASTING VOTE. One of the Directors nominated to the Board
by DHI shall be chosen as chairman of the Board provided such Director
is present at the meeting and DHI continues to hold more than 50% of
the outstanding Shares. No chairman of any meeting of a Board shall
have a second or casting vote.
2.8 BOARD MEETINGS. Each Board shall hold meetings not less than 4 times in
each fiscal year, the respective Board meetings taking place
consecutively on the same day at the same place as the meeting of the
board of directors of the Corporation, which quarterly meetings shall
take place within 45 days of the end of each quarter of the financial
year, except the fourth quarter when it shall take place within 75 days
of the year end. Each Director shall be reimbursed his out-of-pocket
expenses to attend each meeting of the Boards.
2.9 NOTICE OF BOARD MEETINGS. Notices of meetings of the Board shall be
sent not less than 10 days in advance. They shall be accompanied by a
brief but complete summary of all business on the agenda of the
meeting. Not later than five days prior to the date of the meeting,
each Director shall have received copies of all documents necessary or
useful to allow the Directors to make an informed decision.
ARTICLE 3
CONDUCT OF THE AFFAIRS OF THE CORPORATION
AND ITS SUBSIDIARIES
3.1 MAJOR DECISIONS. Notwithstanding any other provision of this Agreement
but subject to section 3.3, no obligation of the Corporation will be
binding on it, and no action will be taken by or with respect to the
Corporation in respect of any of the matters set forth below, without
the prior written approval of both DHI and SGF Sante; the powers of
each of the
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Boards are restricted accordingly, this Agreement constituting a
unanimous shareholders' agreement in accordance with subsection 146(2)
CBCA:
3.1.1 any change to the fundamental nature of the Corporation or of
the business it carries on from time to time, except as set
out in the existing 5-year business plan (which includes a
capital expenditure and financing plan) (the "Business Plan")
annexed hereto as Schedule 3.1.1;
3.1.2 the approval of any amendment to the Business Plan;
3.1.3 the adoption or modification of annual operating budgets,
capital expenditure budgets and research and development
budgets of the Corporation, including, without limitation, all
inter-company charges among the Corporation and its
Affiliates, and the authorization of any derogations from such
budgets which, in the case of the operating or capital
expenditure budget, as the case may be, exceed individually or
in the aggregate 10% of the amounts provided under the main
headings of the operating budget or globally under the capital
expenditure budget, as the case may be;
3.1.4 the adoption or material modification of the annual marketing
plant of the Corporation;
3.1.5 any amendment to the articles of the Corporation;
3.1.6 the adoption, amendment or repeal of a by-law of the
Corporation;
3.1.7 the allotment, issue, redemption or repurchase of Shares,
Convertible Securities or the entering into of any agreement
or the making of an offer or the granting of any right or
option which may constitute an undertaking to do any of the
foregoing transaction or any amendment to the existing Equity
Participation Plan or the adoption of a new share option plan
for the purchase of Shares for the benefit of management or
employees of the Corporation or a Subsidiary of the
Corporation;
3.1.8 the voluntary liquidation, dissolution or winding-up of the
Corporation, its consolidation, amalgamation, reorganization,
association or merger with another Person, or the creation of
a Subsidiary of the Corporation;
3.1.9 the filing by the Corporation of a petition in bankruptcy, the
Disposition its property in favour of its creditors or the
filing of a proposal pursuant to any law relating to
insolvency or protection from creditors or the filing of a
compromise or an arrangement or a proposal, as well as the
selection of a trustee in bankruptcy, if required;
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3.1.10 the institution or contestation of any legal proceeding material
to the business and operations of the Corporation or the settlement
of any such legal proceeding (excluding, in both cases, actions on
accounts and lawsuits in respect of the rights and obligations of
the Parties pursuant to this Agreement or otherwise);
3.1.11 the approval of transactions out of the ordinary course of
business of the Corporation, including, without limiting the
generality of the foregoing, the following:
(a) any sale, acquisition or lease of immovable property;
(b) the borrowing of money or the giving of security where the
total amount, in each case, exceeds, singly or in the
aggregate, $500,000 in any one year;
(c) the granting of any loan (other than those contemplated in
the Corporation's Equity Participation Plan) or the making of
any investment by the Corporation or the granting of any
guarantee by the Corporation in favour of a Third Party;
(d) the Alienation or Disposition of a substantial part of the
assets of the Corporation or the granting by the Corporation
of an option to the same effect;
(e) the acquisition of capital assets where the total
consideration of the capital project as a whole exceeds
$500,000;
(f) the acquisition of an interest in another corporation,
partnership, firm or business;
3.1.12 the entering into, modification or termination of any contract for
the purchase of raw materials or the sale of products where the term
of such contract, including any renewal options in favour of the
other party, exceeds three years or where the total consideration
thereunder exceeds $5,000,000 and the entering into, modification or
termination of any material technological transfer or material
licensing agreement;
3.1.13 the approval of, modification or termination of any agreements or
other arrangements ("Inter-company Arrangements") between the
Corporation and a Person which is a Related Party to the
Corporation; such Inter-company Arrangements must be reflected in
writing;
3.1.14 the approval of the annual audited consolidated and
non-consolidated financial statements of the Corporation;
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3.1.15 the annual appointment or the hiring of the president or the
hiring of any management employee reporting directly to the
president;
3.1.16 the adoption, replacement, repeal or modification of any
remuneration policy and the payment of any remuneration which is
not in accordance with such a duly adopted policy; for the purposes
of this subsection, the expression "remuneration" includes any
Directors' fees and tokens;
3.1.17 the repeal of or modification to the delegation of authority by
the Board to officers and other management of the Corporation as set
out in Schedule 3.1.17;
3.1.18 any decision to change the date of the end of the financial year
of the Corporation from December 31 of each year to another date.
Unless DHI and SGF Sante have otherwise given their express written
consent, in order to obtain the prior written consent required under this
section 3.1, the Chief Executive Officer of the Corporation shall send to
each of DHI and SGF Sante a notice describing the decision or action
requiring its consent and the date at which such consent must be given
along with all the documentation necessary to make a decision (the
"Notice"). To indicate their consent or refusal, DHI and SGF Sante must
notify the Corporation within 10 days following the receipt of the Notice
of their consent or refusal (the "Reply Notice"). If the Corporation has
not received Reply Notices within the aforementioned delay, DHI or SGF
Sante, as the case may be, shall be deemed not to have consented to the
request of the Corporation. In the event of an emergency, the
aforementioned delay shall be three Business Days and the Notice shall set
forth the nature of the emergency.
3.2 DISAGREEMENT. In the event DHI and SGF Sante do not agree on a matter
listed in section 3.1 above, the STATUS QUO will prevail until the dispute
is resolved by agreement between them. Only those matters referred to in
subsections 3.1.10, 3.1.13 and 3.1.14 may, if one of DHI or SGF Sante
considers that it would not be in the best interests of the Corporation to
all the STATUS QUO to prevail, be submitted to arbitration in accordance
with the provisions of this Agreement. In rendering a decision with respect
to any such matter, the arbitrator(s) shall only consider the best
interests of the Corporation.
3.3 INTER-COMPANY ARRANGEMENTS. Prior to the making of any Inter-company
Arrangement involving the Corporation, the nature of the contract, the
parties thereto and any Person receiving any commission or consideration
in respect of the proposed contract shall be fully disclosed to DHI and
SGF Sante and each Party shall disclose to DHI and SGF Sante any material
interest in the proposed contract or the identity of any Related Party or
any Third Party who would receive any commission or consideration in
respect thereof. The consent of the Shareholder with an interest in any
such Related Party shall not be required in respect of any resolution
relating thereto, and no representative of any such interested Shareholder
on a Board shall be entitled to vote in respect of any resolution relating
thereto. Subject to
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section 3.4, the determination of the rights to be asserted and course
of action to be taken by the Corporation, if any, with respect to an
Inter-company Arrangement, shall be made without the participation,
approval or consent of any Shareholder having a direct or indirect interest
in such Related Party, and the Directors and other Shareholder in making
any determination with respect thereto shall act strictly in the best
interests of the Corporation.
3.4 INTER-COMPANY REVIEW COMMITTEE. Notwithstanding section 3.2 and
notwithstanding the fact that Inter-company Arrangements may contain
provisions for the resolution of disputes by arbitration, prior to
submitting any dispute to arbitration, any dispute regarding an
Inter-company Agreement shall first by referred to an inter-company review
committee. Such committee will be composed of one Director of the
Corporation nominated by DHI, one Director of the Corporation nominated by
SGF Sante, the president from time to time of the Corporation and one
representative of the Related Party who/which is the other party to the
arrangement. The committee will only have the power and authority to
recommend a course of action to the Board of the Corporation.
3.5 REPORTS. A report listing all inter-company charges among the
Corporation and its Related Parties for the immediately preceding financial
year shall be presented annually to the Board for ratification no later
than the 60th day following the end of the financial year. Such report
shall include (i) the names of all employees of the Corporation who
provided services to a Related Party of the Corporation and a description
of the nature and extent of such services and charges therefor, and (ii)
details of all transfers of funds between the Corporation and Persons
who/which are Related Parties thereto, including their purpose and amounts.
3.6 REIMBURSEMENT OF ADVANCES. Notwithstanding the foregoing, it is
expressly agreed that the Corporation shall reimburse the existing
interest bearing advances from DHI in accordance with the agreement with
respect thereto entered into as of the date hereof between DHI and the
Corporation.
3.7 APPLICATION TO SUBSIDIARIES. This Article 3, except for section 3.6,
shall apply MUTATIS MUTANDIS to the conduct of the affairs and business of
each Subsidiary of the Corporation.
3.8 LEGEND. The share certificates or, if applicable, the Convertible
Securities certificates issued or to be issued by the Corporation and its
Subsidiaries shall bear a legend that the shares or, if applicable, the
convertible securities evidenced thereby, are subject to the terms and
conditions of a unanimous shareholders' agreement and that these shares or,
if applicable, these convertible securities, cannot be Disposed of or
Alienated except in accordance with the provisions of this Agreement.
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ARTICLE 4
SHAREHOLDERS' MEETINGS
4.1 QUORUM. The quorum at meetings of the Shareholders shall consist of
Shareholders present, in person or by proxy, representing not less than
51% of the issued and outstanding Shares entitled to vote at such
meeting provided that such Shareholders present, in person or by proxy,
include each of DHI and SGF Sante. If a quorum is not reached at such
meeting, that meeting may be adjourned by the Shareholders attending to
a date no earlier than the third Business Day following the date of the
original meeting date and no later than 6 Business Days after such
original meeting date, in which case, provided notice of such adjourned
meeting has been given to all Shareholders as soon as possible, the quorum
shall be constituted by the Shareholders present.
4.2 MEETINGS. There shall be a Shareholders' meeting at the head office of
the Corporation at least once a year. The chairman of the Board of DPI
shall chair the meeting provided DHI is present and continues to hold
more than 50% of the outstanding Shares.
4.3 NOTICES OF MEETING. Notices of meetings of the Shareholders shall be sent
not less than 10 days in advance, each Shareholder hereby waiving its
right to the longer notice period provided by Applicable Law. All
notices of meetings of the Shareholders shall be accompanied by a brief
but complete summary of all business on the agenda of the meeting. Not
later than five days prior to the date of the meeting, each Shareholder
shall have received copies of all documents necessary or useful to
allow the Shareholders to make an informed decision.
4.4 AUDITORS. The appointment of Auditors shall require the approval of both
DHI and SGF Sante. In the absence of agreement between them, the
provision of section 3.2 shall apply MUTATIS MUTANDIS.
4.5 BY-LAWS. The Shareholders shall, to the extent necessary or appropriate,
adopt or cause to be adopted a By-law of the Corporation and of each of
its Subsidiaries to give effect to the provisions of this Agreement.
ARTICLE 5
ADDITIONAL FINANCING
5.1 ADDITIONAL SUBSCRIPTION. When and if the conditions set out in
subparagraphs (i) and (ii) under heading "Capital Expenditure Plan -
Second Lyophilization Unit" of the Business Plan attached hereto as
Schedule 5.1 are met, DHI and SGF Sante agree to subscribe for the
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following additional common shares of the Corporation at a subscription
price per share equal to approximately $1.19:
NUMBER AND AGGREGATE
SUBSCRIBER CLASS OF SHARES SUBSCRIPTION PRICE
DHI 840,336 common shares $ 1,000,000
SGF Sante 420,168 common shares 500,000
The provisions of the Subscription Agreement shall apply, MUTATIS
MUTANDIS, to such subscription by SGF Sante. Such subscription
accompanied by payment in full of the subscription price will take
place within five Business Days of the receipt by the Shareholders of a
written notice from the Corporation attesting to the fulfillment of the
last of the above-mentioned conditions in the Business Plan, the
Corporation hereby agreeing to send such notice as soon as it is aware
of the fulfillment of such condition. Upon receipt of the subscription
price therefor, the Corporation shall immediately cause such shares
to be issued and allotted. In full or partial satisfaction of the
subscription price by DHI, any amount then owing by the corporation to
DHI may, at the option of SGF Sante, be set off against such subscription
price.
5.2 NO FURTHER FINANCING. Except as provided in section 5.1, no Shareholder
shall be required to invest additional funds in the Corporation.
5.3 SUBSCRIPTION RIGHTS. In the event the additional Subscription as provided
in section 5.1 takes place, the Management Shareholders shall be
entitled (but are not obliged) to subscribe for a number of additional
common shares of the Corporation at a subscription price per share
equal to $1.19 such that the percentage of outstanding Shares each such
Management Shareholder owns after the subscriptions referred to herein
and in section 5.1 is equal to the percentage of outstanding Shares
each such Management Shareholder owned immediately before such
subscriptions, in both cases calculated on a non-diluted basis. For
greater certainty, such right to subscribe is limited to common shares
of the Corporation only without any attached warrants. Such rights
shall be exercised within 30 days of the subscription referred to in
section 5.1 by written notice to the Corporation accompanied by payment
in full, the whole subject to such additional terms, conditions and
benefits as are contained in the Corporation's Equity Participation
Plan and which pertain to the foregoing.
5.4 PARTICIPATION RIGHTS. In the event an injection of funds in the
Corporation becomes necessary in order to prevent cessation or material
curtailment of its activities, including, without limitation, in order
to prevent the Corporation being in default under its material
agreements (including pursuant to financial covenants), to prevent a
petition in bankruptcy being filed against the Corporation or to
prevent a seizure of a substantive portion of its assets, and provided
the Corporation has exhausted all other avenues and recourses and no
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sources of conventional financing are available. As soon as this
situation becomes apparent to either DHI or SGF Sante, either of them
shall immediately advise the other and the Corporation of the situation
notifying each of the amount of financing required ("Capital Amount").
DHI and SGF Sante shall thereupon have the right to make such amounts
available to the Corporation in the proportion that the number of
voting and participating Shares held by each is to the total number of
outstanding voting and participating Shares held by both (the
"Participation Right") as follows. Subject to the eventual exercise of the
Participation Rights and Additional Rights in accordance with the
following, either DHI or SGF Sante may advance all or part of the
Capital Amount to the Corporation to provide emergency funds as
required (the "Emergency Advance"), on the same conditions as the Loan,
such Emergency Advance to be reimbursed in part and/or converted into
an Equity Investment and/or Loan, as the case may be, in accordance
with the following.
5.5 NOTICE. To allow the exercise of the rights set forth in section 5.4
above, either DHI or SGF Sante shall give to the other a written notice
which shall refer to (i) the Capital Amount the Corporation requires
and (ii) the amount of each such Participation Right.
5.6 PERIOD FOR EXERCISE OF PARTICIPATION RIGHTS. If DHI and SGF Sante wish to
exercise their respective Participation Right in full, they shall,
within 45 days of the receipt of the notice set out in section 5.5,
advise each other and the Corporation of such intention, in writing,
and within the expiry of such 45-day period, subject to section 5.8,
invest the full amount of their Participation Right in equity voting
shares of the Corporation at a price per share determined in accordance
with section 5.9 (the "Share Price").
5.7 ADDITIONAL RIGHTS. In the event either DHI or SGF Sante does not exercise
its Participation Rights in full accordance with section 5.6 (either a
"Non-Participating Shareholder" or a "Partly-Participating Shareholder",
as the case may be), the Corporation shall immediately send a notice to
the the other Shareholder if the latter has advised the Corporation of
its intention to exercise its Participation Rights in full (the
"Fully-Participating Shareholder") setting out the balance of the
Capital Amount remaining unsubscribed. The Fully-Participating
Shareholder shall then have the additional right (the "Additional
Right") to make such balance available to the Corporation. The
Fully-Participating Shareholder that wishes to exercise its Additional
Rights shall do so by sending a written notice to the Corporation
within five days of its receipt of the above notice from the
Corporation indicating the maximum amount it is willing to advance to the
Corporation on account of its Additional Rights.
5.8 EQUITY INVESTMENT AND LOAN. Following the exercise of the Participation
Rights and the Additional Rights, DHI and SGF Sante, as the case may be,
shall thereupon immediately:
5.8.1 if they are both Fully-Participating Shareholders, invest the
whole of their Participation Rights by subscribing for voting and
participating Shares at a price per Share equal to the Share Price
(the "Equity Investment);
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5.8.2 if one is a Partly-Participating Shareholder and the other is a
Fully-Participating Shareholder, the Partly-Participating
Shareholder shall invest the whole of the amount which it has
agreed to invest by way of an Equity Investment, and the
Fully-Participating Shareholder shall (i) invest the proportion
of its Participation Rights determined in section 5.11 by way of
an Equity Investment, and (ii) advance the balance of its
Participation Rights and, as the case may be, its Additional
Rights to the Corporation (the "Loan") as a loan with the terms
and conditions set out in Schedule 5.8.2; or
5.8.3 if one is a Non-Participating Shareholder, the other shall
invest the whole of the amount which it has agreed to invest by
way of a Loan,
provided that neither shall be obliged to make any investment hereunder
unless the whole of the Capital Amount shall be made available to the
Corporation as a result of the exercise of the Participation Rights and
Additional Rights. Any amount owing on account of capital and interest
pursuant to an Emergency Advance shall be converted into such Equity
Investment and/or Loan and the portion of an Emergency Advance not so
converted shall thereupon be reimbursed to the lender with interest.
5.9 SHARE PRICE. The Share Price shall be equal to the Fair Market Value
of the Shares on the date of the notice set out in section 5.5 and the
Corporation shall immediately give the notice provided in the definition
of "Fair Market Value" in Article 1 of this Agreement.
5.10 ISSUE OF SHARES. All the Shares subscribed pursuant to sections 5.6
and 5.8 above shall be fully paid and non-assessable upon their issue
by the Corporation, which shall take place immediately following the
establishment of the Share Price and, provided the Corporation shall
have received their subscription price in full within the period
provided in each said section, the Corporation shall remit to the
Shareholders a certificate representing the Shares they subscribed for.
5.11 AMOUNT OF EQUITY INVESTMENTS. The proportion of the Participation
Rights to be invested in the Equity Investment in accordance with
subsection 5.8.2 shall be determined pursuant to the following formula:
A
---
B
where:
A = the amount of the Participation Rights which are exercised by
the Partly-Participating Shareholder
B = the total Participation Rights of the Partly-Participating
Shareholder.
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5.12 RIGHTS OF MANAGEMENT SHAREHOLDERS. In the event that amounts have been
invested in the Corporation by way of an Equity Investment or Loan in
accordance with the foregoing, each of the Management Shareholders
shall be entitled to acquire from each DHI and SGF Sante the portion of
their respective Equity Investment and Loan determined in accordance
with the following formula at a price equal to their cost:
Q x R x S
where:
Q = the percentage of Shares held by the Management Shareholder on
a Pro Rata Basis immediately before the Equity Investment and
Loan
R = the aggregate Equity Investment and Loan of both DHI and SGF
Sante
S = the proportion the number of Shares held by either DHI or SGF
Sante, as the case may be, immediately before the Equity
Investment and Loan bore to the total number of Shares held by
DHI and SGF Sante together immediately before the Equity
Investment and Loan.
Such acquisition rights shall be exercised within 30 days of the
completion of the Equity Investment and Loan by written notice to each
of DHI and SGF Sante accompanied by payment in full. It is expressly
agreed that the rights under this section 5.12 replace the pre-emptive
rights provided for in the Equity Participation Plan which would
otherwise have been available in respect of the Equity Investment.
ARTICLE 6
RESTRICTIONS ON DISPOSITION OF SHARES
AND RIGHTS OF FIRST REFUSAL
6.1 GENERAL RESTRICTION ON DISPOSITION. Except as expressly provided in
this Agreement, the Shareholders shall not Encumber or Dispose of their
Shares or Convertible Securities without the previous written consent
of DHI and SGF Sante, which may be arbitrarily withheld.
6.2 MERCK FROSST AGREEMENT. Nothing in this Agreement shall be interpreted
or applied so as to modify or limit in any way the rights granted to
Merck Frosst Canada Inc. under the Merck Frosst Agreement, it being
expressly agreed that such rights prevail over the rights of the
Parties under this Agreement.
6.3 EQUITY PARTICIPATION PLAN. The Parties expressly acknowledge that the
Management Shareholders benefit from certain rights (including
piggy-back rights in certain cases) and
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are subject to certain obligations (including drag along obligations in
certain cases) under provisions of the Equity Participation Plan and
agree to be bound by such provisions and, to the extent applicable, to
carry out any obligations incumbent on a Party pursuant to such
provisions (including the obligation to give notice to Management
Shareholders of certain Dispositions of Shares, as the case may be). To
the extent necessary, the provisions of this Agreement shall be
interpreted and applied so as to give effect to such rights and
obligations. In the case of an irreconcilable inconsistency between the
provisions of the Equity Participation Plan and the provisions of this
Agreement, the latter shall prevail.
6.4 RIGHT OF FIRST OPPORTUNITY. Subject to section 6.5, if, at any time
after December 31, 2002, either of DHI or SGF Sante (the "Seller")
wishes to Dispose of all and not less than all of its Shares and
Convertible Securities (the "Offered Shares") to a Third Party, it
first shall offer to the other (the "Offeree") an opportunity to
purchase such Shares and Convertible Securities in accordance with the
following provisions:
6.4.1 the Seller first shall give the Offeree an opportunity to
purchase all of the Offered Shares at a price in cash to be
stipulated by the Seller in a written notice ("Notice of
Intent") to be given to the Offeree.
6.4.2 Within 90 days of receipt of the Notice of Intent, the Offeree
shall give the Seller written notice of its acceptance of the
offer to purchase all of the Offered Shares ("Notice of
Acceptance") or written notice of its refusal of the said offer
("Notice of Refusal"). In the event that the Offeree fails to
give either of the notices contemplated in this paragraph within
the prescribed delays, it shall be deemed to have given a Notice
of Refusal.
6.4.3 In the event that the Offeree gives a Notice of Acceptance, the
purchase of the Offered Shares shall take place on the 3rd day
following receipt of the Notice of Acceptance at 10:00 A.M.
Montreal time at the registered office of the Corporation or
such other date, time and place as may be agreed in writing by
the Seller and the Offeree (the "Closing").
6.4.4 In the event that the Offeree gives a Notice of Refusal or is
deemed to have given a Notice of Refusal, the Seller may Dispose
of all and not less than all of the Offered Shares to a Third
Party:
(a) for a consideration not less than 75% of which consists of
cash and not more than 25% of which consists of Acceptable
Securities, provided the cash equivalent of the aggregate
of such consideration is not less than 90% of the prices
stipulated in the Notice of Intent; for such purposes, the
cash equivalent of any Acceptable Securities included as
part of the consideration shall be equal to their Market
Price at the time of the Third-Party Closing under
subsection 6.4.5;
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(b) and on terms no more favourable to the Third Party than those
offered to the Offeree.
6.4.5 The Seller shall not Dispose of the Offered Shares to a Third
Party unless:
(a) the sale to the Third Party takes place and is completed
within six months of receipt of Notice of Refusal or the
date upon which Notice of Refusal was deemed to have been
given (the "Third-Party Closing");
(b) the consideration and terms of the sale respect the
provisions of subsection 6.4.4; and
(c) the Third Party becomes a party to this Agreement and agrees
and undertakes to respect and be bound by its provisions.
6.5 RIGHT OF FIRST REFUSAL. If at any time after December 31, 2002 either
of DHI or SGF Sante (the "Seller") wishes to Dispose of all and
not less than all of the Shares and Convertible Securities to a Third
Party pursuant to a Good Faith Offer (the "Offered Shares"), it first
shall offer to the other (the "Offeree") an opportunity to purchase such
Shares and Convertible Securities in accordance with the following
provisions:
6.5.1 The Seller first shall give the Offeree an opportunity to
purchase all of the Offered Shares for the consideration
stipulated in the Good Faith Offer by written notice ("Notice of
Intent") to the Offeree accompanied by a copy of the Good Faith
Offer.
6.5.2 Within 90 days of receipt of the Notice of Intent, the Offeree
shall give the Seller written notice of its acceptance of the
offer to purchase the Offered Shares ("Notice of Acceptance")
or written notice of its refusal of the said offer ("Notice of
Refusal"). In the event that the Offeree fails to give either of
the notices contemplated in this paragraph within the prescribed
delays, it shall be deemed to have given a Notice of Refusal.
6.5.3 In the event that the Offeree gives a Notice of Acceptance for
all of the Offered Shares, the purchase of the Offered Shares
shall take place on the 3rd day following receipt of the Notice
of Acceptance at 10:00 A.M. Montreal time at the registered office
of the Corporation or such other date, time and place as may be
agreed in writing by the Seller and the Offeree (the "Closing").
6.5.4 In the event that the Offeree gives a Notice of Refusal or is
deemed to have given a Notice of Refusal, the Seller may Dispose of
all and not less than all of the Offered Shares to the Third Party
pursuant to the Good Faith Offer for the consideration and on terms
no more favourable to the Third Party than those set out in the
Good Faith Offer.
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6.5.5 The Seller shall not Dispose of the Offered Shares to a Third
Party pursuant to the Good Faith Order unless:
(a) the sale to the Third Party takes place and is completed
within 120 days of receipt of Notice of Refusal or the date upon
which Notice of Refusal was deemed to have been given
(the "Third-Party Closing");
(b) the consideration and terms of the sale respect the
provisions of subsection 6.5.4; and
(c) the Third Party becomes a party to this Agreement and agrees
and undertakes to respect and be bound by its provisions.
6.6 EXCEPTION IN FAVOUR OF SGF SANTE. The provisions of sections 6.1,
6.4 and 6.5 shall not apply to any Disposition by SGF Sante to
any other entity ultimately controlled by the government of the province
of Quebec provided the acquiror agrees and undertakes to respect and be
bound by the provisions of this Agreement.
6.7 GENERAL EXCEPTION. The provisions of sections 6.1, 6.4 and 6.5 shall not
be applicable if a Shareholder Disposes of or Alienates all or part of
the Shares or Convertible Securities, if any, he/it holds, and the
Directors shall authorize (or, for further clarity, the Shareholders shall
cause any of their representatives acting as Directors to authorize) the
said Disposition or Alienation notwithstanding any other provisions in the
articles or by-laws of the Corporation (other than those necessary for the
maintenance of its closed company status within the meaning of the
SECURITIES ACT (Quebec)), the whole without prior authorization from the
other Shareholders, provided that this Disposition or Alienation be made
to, or in favour of, a Person wholly-owned by such Shareholder or in
respect of which such Shareholder holds the entirety of beneficial
interest in or in favour of a Person by whom or by which the Shareholder
is wholly-owned, in all cases, subject to the following conditions:
6.7.1 that the assignee (i) confirm to the other Shareholders and to
the Corporation its irrevocable consent to be bound by the
provisions of this Agreement by transmitting to them an intervention
duly executed, (ii) succeed this Shareholder in all its rights,
benefits, obligations and responsibilities under this Agreement and
(iii) be substituted for this Shareholder as completely as if the
assignee were named in each provision of this Agreement and
undertake not to issue shares of its share capital or Convertible
Securities to a Person other than the assignor without the prior
written consent of the other Shareholders, which consent may be
given or refused at their entire discretion;
6.7.2 that the Shares and Convertible Securities, if any, thus Disposed
of or Alienated remain subject to the provisions of this Agreement
in the hands of the said assignee;
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6.7.3 that the Shareholder remain bound by this Agreement and undertake
not to Dispose of or Alienate all or any part of the Shares of the
assignee that it will hold without having obtained the prior written
consent of the other Shareholders, which consent may be given or
refused at their entire discretion.
ARTICLE 7
PIGGY-BACK RIGHTS
7.1 NOTICE OF PIGGY-BACK RIGHT. If, after complying with the conditions of
Article 6, DHI (the "Vendor") may Dispose of the Offered Shares to a Third
Party (the "Buyer"), then the Vendor shall so notify SGF Sante
(the "Beneficiary") and inform it of the identity of the Buyer and, in the
case of an offer not triggered by a Good Faith Offer, the terms and
conditions of the sale.
7.2 PIGGY-BACK RIGHT. The Beneficiary shall then be entitled (the
"Piggy-Back Right") to require the Buyer to purchase all and not less than
all of the Beneficiary's Shares and Convertible Securities, as the case
may be, (the "Piggy-Back Securities").
7.3 CONDITIONS. The purchase by the Buyer of the Piggy-Back Securities
shall be made for the same consideration, on the same terms and in full
compliance with the terms and conditions of the sale by the Vendor.
7.4 EXERCISE OF PIGGY-BACK RIGHT. The Beneficiary must exercise its
Piggy-Back Right by giving notice to the Vendor (indicating the Piggy-Back
Securities) within 20 days following receipt of the notice transmitted
under section 7.1, failing which the Beneficiary, as the case may be,
shall be deemed to have waived its Piggy-Back Right.
7.5 DISPOSITION OF PIGGY-BACK SECURITIES. The Vendor may Dispose of the
Offered Shares to the Buyer only on the condition that the Buyer purchase
the Piggy-Back Securities at the same time as it purchases the Offered
Shares for the same consideration, on the same terms and in full
compliance with the terms and conditions of the sale by the Vendor.
7.6 EXPIRY OF PERIOD. If the Disposition to the Buyer in accordance with
these provisions is not completed within the delay provided in Article 6,
the Vendor may not longer Dispose of the Offered Shares to the Buyer and,
if it still wishes to Dispose of them, must re-offer them in accordance
with Articles 6 and 7.
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ARTICLE 8
PUT AND CALL SHARES OF THE CORPORATION
8.1 PUT AND CALL. At any time after the fifth anniversary of the date
hereof, subject to the provisions of section 8.10:
8.1.1 SGF Sante may, from time to time, require DHI to purchase from
it (the "Put"), all and not less than all of the Shares and
Convertible Securities of the Corporation owned by SGF Sante
(the "Put Shares"); and
8.1.2 subject further to the provisions of section 8.4, DHI may, from
time to time, require SGF Sante to sell to it (the "Call") all
and not less than all of the Shares and Convertible Securities
of the Corporation owned by SGF Sante (the "Call Shares"),
at a price equal to the Fair Market Value thereof as of the date of the
giving of the Put Notice or Call Notice, as the case may be, described
in section 8.2.
8.2 NOTICE. SGF Sante shall exercise the Put by giving a written notice
(the "Put Notice") to DHI of its intent to do so, accompanied by the
notice referred to in the definition of Fair Market Value in Article 1.
DHI shall exercise the Call by giving a written notice (the "Call
Notice") to SGF Sante of its intent to do so, accompanied by the notice
referred to in the definition of Fair Market Value in Article 1.
8.3 OVERRIDE. In the event of the exercise of the Put, DHI may, at its
sole option and notwithstanding section 8.4, within five days of the
receipt of the Put Notice, exercise the Call, in which case the Call
shall override the Put and the Put Notice shall be considered to have
been withdrawn.
8.4 CONDITIONS OF EXERCISE OF THE CALL. Notwithstanding section 8.1, DHI
shall not be entitled to exercise the Call unless:
8.4.1 sales of the Corporation on a consolidated basis for the four
consecutive completed fiscal quarters immediately preceding the
date of the giving of the Call Notice equal or exceed
$42,000,000; and
8.4.2 the retained earnings of the Corporation on a consolidated basis
as at the end of the quarter immediately preceding the date of
the giving of the Call Notice equal or exceed $4,000,000.
8.5 PAYMENT TERMS. Payment of the Fair Market Value of the Put Shares and
the Call Shares, as the case may be, may be made by any combination, at
DHI's sole discretion, of cash and newly issued, fully-paid common
shares of DHI listed on the TSE provided that the portion
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of the price payable by way of the issue of common shares of DHI shall
not exceed 40% of the total purchase price for the Put Shares and Call
Shares, as the case may be. For such purposes, the common shares of DHI
shall have a value equal to their Market Price as at the date of the
giving of the Put Notice or Call Notice, as the case may be, and must be
freely tradeable in Canada within 60 days of their issue.
8.6 SPECIAL CALL. At any time after the first anniversary of the date
hereof, DHI may, from time to time, require SGF Sante to sell to it
(the "Special Call") all and not less than all of the Shares and
Convertible Securities of the Corporation owned by SGF Sante (the
"Special Call Shares") at a price determined in accordance with section
8.9 (the "Special Call Price").
8.7 SPECIAL CALL NOTICE. DHI shall exercise the Special Call by giving a
written notice (the "Special Call Notice") to SGF Sante of its intent
to do so, accompanied by the notice referred to in the definition of
Fair Market Value in Article 1.
8.8 PAYMENT OF SPECIAL CALL PRICE. The Payment of the Special Call Price
shall be made in cash only.
8.9 SPECIAL CALL PRICE. The price of the Special Call Shares shall be
equal to the greater of:
8.9.1 the Fair Market Value thereof as of the date of the giving of
the Special Call Notice plus a premium equal to 10% of such Fair
Market Value; and
8.9.2 the amount which would provide SGF Sante with a 25%, pre-tax,
annual compound rate of return on all sums invested by SGF Sante
in the Corporation, calculated from the date of such
investment(s) to the closing pursuant to section 8.11, together
with a reimbursement of all such investment(s).
8.10 CHANGE OF CONTROL PROVISIONS.
8.10.1 For the purposes of this Article 8, a "Non-Recommended Change of
Control of DHI" means any transaction whereby shares of DHI
representing more than 75% of the total outstanding voting
rights attached to shares of DHI are ultimately acquired,
directly or indirectly, by any Person or group of Related
Parties without majority approval by the board of directors of
DHI;
8.10.2 For the purposes of this Article 8, a "Change of Control of SGF
Sante" means any transaction whereby Control of SGF Sante is
ultimately acquired, directly or indirectly, by any one other
than the Government of Quebec;
8.10.3 In the event of a Non-Recommended Change of Control of DHI, SGF
Sante's Put, as described above, would become immediately
exercisable, notwithstanding the
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delay set out in section 8.1. for a period of 60 days
immediately following such Non-Recommended Change of Control of
DHI;
8.10.4 In the event of a Change of Control of SGF Sante, DHI's Call, as
described above, would become immediately exercisable,
notwithstanding the delay set out in section 8.1, for a period
of 60 days immediately following such Change of Control of SGF
Sante and it would not be subject to the provisions of section
8.4.
For greater certainty, the respective rights of DHI and SGF Sante
pursuant to sections 8.1 and 8.6 remain in full force and effect
notwithstanding any failure to exercise rights pursuant to subsections
8.10.3 or 8.10.4.
8.11 CLOSING. The purchase of the Put Shares, the Call Shares or the
Special Call Shares, as the case may be, by DHI shall take place on the
3rd Business Day following the determination of the Fair Market Value,
at 10:00 A.M., Montreal time, at the registered office of the
Corporation or such other date, time and place as may be agreed in
writing by SGF Sante and DHI.
ARTICLE 9
NON-COMPETITION
9.1 NON-COMPETITION COVENANTS. Each of DHI and SGF Sante undertakes in
favour of the other Shareholders, the Corporation and its Subsidiaries
for so long as they or any Person which is a Related Party of any of
them remains a Shareholder of the Corporation whether directly or
indirectly, alone or in partnership or in association or jointly with
any other Person, as principal, agent, shareholder, lender, guarantor,
employee, partner, consultant or subcontractor or in any other manner,
not to:
9.1.1 have an interest, direct or indirect, which enables it to
exercise Control and direction over any commercial activities
which include the manufacture of sterile biopharmaceutical
products or lyophilics in North America (the "Activities"); or
9.1.2 solicit, interfere or endeavor to direct or entice away from the
Corporation or its Subsidiaries any customer, client, supplier
or any Persons in the habit of dealing with the Corporation or
its Subsidiaries on the relevant date or other customers,
clients, suppliers or Person, approached by the Corporation or
its Subsidiaries during the year preceding the end of such
Shareholder's relationship with the Corporation or its
Subsidiaries; or
9.1.3 encourage any employee, consultant, officer or Director of the
Corporation or its Subsidiaries or of a Person offering
management services to the Corporation or its
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Subsidiaries to leave the Corporation or employ or solicit for
employment any employee, consultant, officer or Director who is at
the time of employment or solicitation employed or rendered services
to the Corporation, its Subsidiaries or to a Person offering
management services to the Corporation or its Subsidiaries.
9.2 EXTRAORDINARY REMEDIES. Each of DHI and SGF Sante acknowledges that its
failure to respect its commitments and obligations set out in section 9.1
would cause the Corporation and its Subsidiaries sufficient prejudice to
justify, in addition to the consequences contemplated in Article 9,
recourse to the remedies of injunction and seizure before judgment.
9.3 REASONABLE SCOPE. Each of DHI and SGF Sante recognizes that the
restrictions contemplated in section 9.1 are reasonable and valid,
particularly with regard to their duration, their extent and the Persons
contemplated thereby, and that these restrictions are essential in order
to enable the Corporation and its Subsidiaries to protect their position
adequately in the field where they carry on business, operate or pursue
their activities and therefore exempts DHI and SGF Sante, the Corporation
and its Subsidiaries from establishing the validity of these restrictions
before any arbitration board or other court.
9.4 MANAGEMENT UNDERTAKINGS. Each of Xxxxxx and Xxxxxx undertakes in favour
of the other Shareholders, the Corporation and its Subsidiaries to
respect the non-compete and non-solicitation obligations incumbent on
them pursuant to their respective employment contracts with the
Corporation, copies of which are attached as Schedule 9.4, as if such
obligations were incorporated in this Agreement.
9.5 LIMITATION OF SCOPE. The Parties acknowledge that if the extent of any
restriction contained in this Article 9 is judged to be unreasonable,
which is not the opinion of the Parties on the date hereof, such a
restriction shall then be applicable up to the maximum permitted by the
Applicable Law and the Parties hereby agree and accept that the extent of
this restriction may be modified accordingly by any arbitration board or
other court within the context of any procedure to enforce and give
effect to such restriction.
ARTICLE 10
CONFIDENTIALITY
10.1 The Shareholders agree, as long as such information or knowledge is not
part of the public domain or required to be disclosed in accordance with
Applicable Laws, not to disclose, publish or reveal in any manner
whatsoever and to whomever (except to duly authorized representatives,
agents, advisers and professionals employed by them or hired in
connection with their activities as Parties to this Agreement), any
information or knowledge which is valuable to the Corporation, secret and
confidential concerning the business operated by the
-29-
Corporation or its Subsidiaries, including, without limiting the
generality of the foregoing, trade secrets, inventions, software,
computer programs, patents, licences, manufacturing processes,
know-how, customer lists or contracts of the Corporation or its
Subsidiaries, the Shareholders and the Shareholders hereby expressly
acknowledging that such trade secrets, inventions, software, computer
programs, patents, licences, manufacturing processes, know-how,
customer lists or contracts and all other information which are
valuable to the Corporation, secret and confidential concerning the
business operated by the Corporation or its Subsidiaries have been
disclosed to them on a confidential basis.
ARTICLE 11
ARBITRATION
11.1 CHOICE OF ARBITRATION. Subject to section 11.11 below, any claim
arising in respect of the present Agreement which is challenged, any
controversy or dispute regarding the execution of the present
Agreement, including its annulment, as well as any dispute with regard
to the interpretation or application of the present Agreement must be
submitted to arbitration to the exclusion of the courts, the whole in
accordance with the procedure hereinafter established.
11.2 NOTICE TO ARBITRATE. Any party or parties to the present Agreement
wishing to submit a claim, conflict, dispute or disagreement
(collectively a "Dispute") to arbitration must forward to the other
parties to the Dispute a written notice (hereinafter referred to as
"Notice to Arbitrate"), containing a reasonably detailed description of
the claim, conflict, dispute or disagreement and the nomination of an
arbitrator.
11.3 CHOICE OF SECOND ARBITRATOR. Within 10 days of the receipt of Notice
to Arbitrate, the other party or parties involved in the Dispute shall
name a second arbitrator and send a notice to this effect to the party
or parties making the submission, the first-named arbitrator and to the
second-named arbitrator; in the absence of such a notice, the
first-named arbitrator shall be the sole arbitrator and section 11.10
inclusively shall apply MUTATIS MUTANDIS.
11.4 CHOICE OF THIRD ARBITRATOR. The two arbitrators appointed in
accordance with the above procedure shall, within 10 days following the
appointment of the second arbitrator, name a third arbitrator who shall
be a member in good standing of the Quebec Bar and will act as
President of the Arbitration Committee; if the first two arbitrators
fail to agree on a third arbitrator, either one or both may apply to a
judge of the Superior Court of the Province of Quebec, District of
Montreal, to appoint the third arbitrator.
11.5 CHOICE OF SINGLE ARBITRATOR. In order to minimize costs, the parties
involved in any dispute may agree, in writing, to appoint a single
arbitrator in which event a notice of such appointment shall be sent to
the arbitrator in question; sections 11.6 to 11.10 inclusively shall
apply MUTATIS MUTANDIS to such sole arbitrator.
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11.6 HEARING AND AWARD. The hearing shall be held in Montreal. The date of
hearing must be held within 30 days of the appointment of the third
arbitrator. The award of the board of arbitrators must be rendered in
writing and served to the parties within 90 days following the hearing.
Any such award (including with respect to the payment of fees and
disbursements related to the arbitration) which is rendered shall be
final, binding and without appeal, and shall become executory as a
judgement against the parties upon homologation.
11.7 PROCEDURE AND EVIDENCE. Notice shall be given by the arbitrators, in
writing, of the time and place of any hearings except where such
hearings are adjourned by the arbitrators in the presence of both of
the parties hereto. In the conduct of the hearing and particularly in
the taking of testimony or other evidence in the course thereof, the
arbitrators shall be bound by the rules of law applying to the
competence, relevance and materiality of witnesses and testimony in the
courts of the Province of Quebec and the rules of procedure set out in
the CODE OF CIVIL PROCEDURE OF QUEBEC. The arbitrators shall have full
power and authority to permit, before or during any hearing, any
amendment to the arbitration submission requested by the parties so
submitting as well as any cross-demand by the other party or parties.
11.8 RESPECT OF DELAYS. In the event that the arbitration hearing is not
held, or the arbitration award is not rendered, within the respective
delays set out above, the arbitrators, upon the receipt of a written
notice to this effect from any party to the arbitration, shall no
longer have jurisdiction to decide the matter submitted to them, and
any party may thereupon take all steps to submit the matter to
arbitration once again pursuant to these rules of procedure.
11.9 REPLACEMENT OF ARBITRATORS. In the event that one or more of such
arbitrators resigns, refuses to act, withdraws, dies or otherwise
becomes unable to fulfill the duties imposed upon him, then his place
shall be filled by the parties originally naming him or if named by the
other arbitrators, his place shall be filled by an appointment made by
them; if no replacement has been named within 15 days following the
date upon which the parties were advised of such failure to act, the
vacancy may be filled by a judge of the Superior Court of the Province
of Quebec, District of Montreal, upon motion by one of the parties.
11.10 SUPPLETIVE PROVISIONS. The parties to these presents agree that the
provisions presently in effect of the CODE OF CIVIL PROCEDURE OF QUEBEC
shall receive suppletive application to any arbitration proceeding
undertaken or held by virtue of the present agreement. In the event of
a contradiction between the provisions of this Article 11 and the
provisions of the aforementioned sections of the CODE OF CIVIL
PROCEDURE OF QUEBEC, the provisions of this Article 11 shall have
precedence.
11.11 EXCEPTIONS TO ARBITRATION. Notwithstanding the provisions of this
Article 11, any party shall be entitled to commence procedures in a
court of law in order to obtain injunctive or attachment relief against
a defaulting party.
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11.12 LANGUAGE. Each party to the arbitration shall be entitled to use
English or French at its or his sole discretion. The arbitrator(s) shall be
bilingual and able to communicate in both English and French.
ARTICLE 12
MISCELLANEOUS
12.1 SUCCESSORS AND PERMITTED ASSIGNS. The provisions of this Agreement
shall, except as otherwise provided herein, enure to the benefit of and be
binding upon the Parties hereto and their respective representatives,
administrators, successors and permitted assigns and each and every person so
bound shall make, execute and deliver all documents necessary to carry out
this Agreement.
12.2 NO ASSIGNMENT. Except as set forth in sections 6.6 and 6.7, no Party
may assign its rights or obligations under this Agreement without the express
written consent of all other parties.
12.3 NOTICES. All communications, notices and demands required or permitted
hereunder shall be in writing and shall be deemed to have been duly given
upon personal delivery, including delivery by courier or facsimile (with
proof of receipt) to the addresses set forth below:
IF TO SGF SANTE:
SGF SANTE INC.
X/X XXXXXXX XXXXXXXX XX XXXXXXXXXXX XX XXXXXX
000 de La Gauchetiere West
Suite 1700
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: The Secretary
Fax: (000) 000-0000
IF TO DHI:
DRAXIS HEALTH INC.
0000 Xxxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxx
X0X 0X0
Attention: The Secretary
Fax: 000-000-0000
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IF TO XXXXXX:
Xx. Xxxxxx Xxxxxx
000 Xxxxxxx
X'Xxx Xxxxxx, Xxxxxx
X0X 0X0
Fax: (000) 000-0000
IF TO BARKAT:
Xx. Xxxxxxxx Xxxxxx
146 XxxXxxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Fax: (000) 000-0000
IF TO THE CORPORATION:
DRAXIS PHARMA INC.
00000 XxxxxXxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: President
Fax: (000) 000-0000
Each of the Parties shall be entitled to specify different or additional
addresses by giving written notice to the other Parties in the manner
set forth herein.
12.4 AMENDMENTS. This Agreement may be amended only by written agreement
duly executed by all the Parties hereto.
12.5 TERMINATION.
12.5.1 This Agreement shall cease and terminate on the occurrence of
any of the following events, namely:
(a) the bankruptcy or receivership of the Corporation, or the
issue, with respect to the Corporation, by the CBCA Director
of a certificate of dissolution pursuant to Section 211(15)
and Section 262 CBCA or any similar provisions enacted in
substitution therefor;
(b) a written agreement of termination executed by all the
Parties hereto;
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(c) when and if the aggregate number of Shares and Convertible
Securities owned by either DHI or SGF Sante or their
respective successors or permitted assigns represents less
than 10% of the total outstanding Shares and Convertible
Securities; or
(d) when and if the aggregate number of Shares and Convertible
Securities owned by DHI and SGF Sante or their respective
successors or permitted assigns together is insufficient to
enable them, together, to Control the Corporation.
12.6 TIME OF ESSENCE. Time shall be of the essence of this Agreement.
12.7 COUNTERPARTS. This Agreement may be executed in one or more counterparts
each of which when so executed shall be deemed to be an original and such
counterparts together shall constitute but one of the same instrument.
12.8 LANGUAGE. This Agreement is executed by all Parties hereto both in
French and in English. The Parties hereto expressly agree that in case of
any misunderstanding, conflict or controversy between them with respect to
one of the provisions of this Agreement, the French version and the
English version of this Agreement shall have equal value and neither of
them shall prevail.
IN WITNESS WHEREOF, this Agreement has been executed on the date
hereinabove first set forth.
DRAXIS HEALTH INC.
Per: /s/ Xx. Xxxxxx Xxxxxx
-------------------------------
Xx. Xxxxxx Xxxxxx, President
SGF SANTE INC.
Per: /s/ Xxxxxxx Xxxxxxx
--------------------------------
Xxxxxxx Xxxxxxx
Per: /s/ Xxxxxx Xxxxxx
--------------------------------
Xxxxxx Xxxxxx
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DRAXIS PHARMA INC.
Per: /s/ Xxxxxx Xxxxxx
-----------------------------------
Xxxxxx Xxxxxx, President
/s/ Xxxxxx Xxxxxx
-----------------------------------
XXXXXX XXXXXX
/s/ Xxxxxxxx Xxxxxx
-----------------------------------
XXXXXXXX XXXXXX
DRAXIS PHARMA INC. DRAFT
DELEGATION OF AUTHORITY FEBRUARY 7, 2000
------------------------------------------------------------------------------
DEFINITION OF POSITIONS
SGF and DHI SGF Sante Inc. and DRAXIS Health Inc.
Board Board of Draxis Pharma Inc.
President President of Draxis Pharma Inc.
C.F.O. Chief Financial Officer of Draxis Pharma Inc.
(Initially, C.F.O. of DRAXIS Health Inc. will be
acting C.F.O. of Draxis Pharma Inc.)
Director Reports directly to President of Draxis Pharma Inc.
Manager Reports directly to Directors
MOST SENIOR APPROVAL REQUIRED
------------------------------------------------
REF. TO SGF
S/HER &
BASIC ELEMENTS OF MANAGEMENT PROCESS AGREEMENT MANAGER DIRECTOR C.F.O. PRESIDENT BOARD DHI
----------------------------------------------------------------- --------- ------- -------- ------ --------- ----- ---
A. GENERAL MANAGEMENT
A.1 Changes to fundamental nature of business 3.1.1 o
A.2 Management organization structure o
A.3 Annual business plan (Including: scope, goals, objectives, 3.1.2 o
organization, resources, budget, 5 year projections,
capital plan, etc.) and changes thereto
B. CAPITAL EXPENDITURES
B.1 Capital expenditures other than as described in 3.1.11
(see Schedule 1)
B.2 Disposal or write-off of fixed assets other than as o
described in 3.1.11 (a) and (d)
C. OPERATIONS
C.1 Derogation from annual operating or capital budgets by > 3.1.3 o
10%
C.2 Contracts as described in 3.1.12 3.1.12 o
C.3 Contracts and commitments other than those described in
3.1.11 (see Schedule 1)
C.4 Transactions outside of the normal course of business as 3.1.11 o
listed in 3.1.11
C.5 Modifications to basic technologies and process equipment o
in place or to quality standards established
Page 1 of 4
MOST SENIOR APPROVAL REQUIRED
------------------------------------------------
REF. TO SGF
S/HER &
BASIC ELEMENTS OF MANAGEMENT PROCESS AGREEMENT MANAGER DIRECTOR C.F.O. PRESIDENT BOARD DHI
----------------------------------------------------------------- --------- ------- -------- ------ --------- ----- ---
C.6 Modifications to equipment or installations non-related to o
technology or process, and within limitations of specific
delegation for capital expenditures
C.7 Modifications to programs for training, health, safety, o
environment, emergencies, etc.
D. SALES AND MARKETING
D.1 Annual marketing plan (Including: volume, sales, discount, 3.1.4 o
credit terms, publicity, alliances, etc.) and material
changes thereto
D.2 Changes in marketing strategies and policies o
D.3 Corporate communications materials (including web site) o
E. HUMAN RESOURCES
E.1 Changes to remuneration policy as provided for in 3.1.16 3.1.16 o
E.2 Changes to general human resource policies other than as o
provided for in 3.1.16 (Including salary, benefits, pension,
bonus plan, hiring, relationship with employees, vacations,
overtime, health and safety, etc.)
E.3 Hiring, annual appointment and employment terms of 3.1.15 o
President
E.4 Approval of President's expense reports o
E.5 Entering into or changes to collective agreement o
E.6 Hiring, promotion, changes to terms of employment
(including salary) and termination of (including severance
pay):
o First line management reporting directly to President 3.1.15 o
o Second line management o
o Other employees o
o Temporary personnel o
E.7 Setting of annual objectives and administration of annual
bonus plan including annual performance reviews:
o President o
o First line of management o
o Second line management o
o Other salaried employees o
E.8 Approval of last pay for a terminated employee o
Page 2 of 4
MOST SENIOR APPROVAL REQUIRED
------------------------------------------------
REF. TO SGF
S/HER &
BASIC ELEMENTS OF MANAGEMENT PROCESS AGREEMENT MANAGER DIRECTOR C.F.O. PRESIDENT BOARD DHI
----------------------------------------------------------------- --------- ------- -------- ------ --------- ----- ---
F. REGULATORY AND ENVIRONMENTAL
F.1 Regulatory policies o
F.2 Responses to regulatory authorities o
F.3 General compliance o
G. INSURANCE
G.1 Insurance and risk management policies o
G.2 Insurance programs o
H. INTERCOMPANY ARRANGEMENTS
H.1 Establishment of or changes to any inter-company 3.1.13 o
(i.e. non-arm's length) arrangements
I. FINANCE
I.1 Internal control procedures o
I.2 Financial reporting systems o
I.3 Bank signing authority (see Schedule 1) o
I.4 Investment as described in 3.1.11(c) 3.1.11 o
I.5 Investments other than as described in 3.1.11(c) (see o
Schedule 2)
I.6 Interest rate and foreign exchange policies o
I.7 Opening/closing of bank accounts o
I.8 Incurrence of debt as described in 3.1.11(b) 3.1.11 o
I.9 Establishment of/changes to credit facilities other than o
those described in 3.1.11(b)
I.10 Annual audited financial statements 3.1.14 o
I.11 Accounting principles, methods and conventions o
I.12 Appointment of auditors 4.4 o
I.13 Audit fees plan o
I.14 Statutory reporting (incl. Income tax, RRQ, CSST, o
payroll, etc)
I.15 Change in year-end 3.1.18 o
J. TAXES
J.1 Tax policy and planning o
J.2 Compliance o
K. LEGAL
K.1 Initiation, contestation or settlement of material legal 3.1.10 o
Page 3 of 4
MOST SENIOR APPROVAL REQUIRED
------------------------------------------------
REF. TO SGF
S/HER &
BASIC ELEMENTS OF MANAGEMENT PROCESS AGREEMENT MANAGER DIRECTOR C.F.O. PRESIDENT BOARD DHI
----------------------------------------------------------------- --------- ------- -------- ------ --------- ----- ---
proceeding
K.2 Initiation, contestation or settlement of any other legal o
proceeding
K.3 Appointment of corporate legal counsel o
K.4 Share transactions as described in 3.1.7 3.1.7 o
K.5 Minutes of Board meetings o
L. OTHER
L.1 Changes to delegation of authority as described herein 3.1.17 o
Page 4 of 4
