AMENDED AND RESTATED UNANIMOUS
SHAREHOLDERS' AGREEMENT
Amended and restated unanimous shareholders' agreement dated January 15, 2001
among B. TWELVE, INC. (herein "B 12" or the "Corporation"), ▇▇. ▇▇▇ ▇▇▇▇▇▇
("▇▇▇▇▇▇"), CREDIFINANCE CAPITAL CORP. ("Credifmance"), NEW RESEARCHES
CORPORATION ("NRC"), LIFMAC, S.A. ("Lifmac"), ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ("Benarroch"),
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"), ▇▇ ▇▇▇▇-▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇"), ▇▇▇▇▇▇'▇ CROSSING
(Rupert's Crossing") and MEDAREX, INC. ("Medarex").
WHEREAS:
1. ▇▇▇▇▇▇, Credifinance, NRC, Lifmac, Benarroch, MacAdam, Berger, Rupert's
Crossing and Medarex are the registered and beneficial owners of all
the outstanding shares in the capital of the Corporation.
2. ▇▇▇▇▇▇, NRC, Credifinance and ▇▇▇▇▇▇ hold options and/or warrants to
acquire additional common shares of the Corporation as described below.
3. The authorized capital of the Corporation consists of 25,000,000 shares
of common stock ("Common Shares") and 1,000,000 shares of preferred
stock ("Preferred Shares").
4. On the date hereof, there are issued and outstanding 3,808,100 Common
Shares, 250,000 Preferred Shares and 2,250,000 Common Share
Options/Warrants which are legally and beneficially owned by and
recorded on the Corporation's books as follows:
NAME OF PREFERRED COMMON COMMON SHARE
SHAREHOLDER SHARES SHARES OPTIONS/WARRANTS
----------- ------ ------ ----------------
▇▇. ▇▇▇ ▇▇▇▇▇▇ Nil 314,525 1,200,000
Credifinance Nil 255,000 Nil
New Researches Corporation 250,000 2,385,000 250,000
Lifinac, S.A. Nil 260,000 Nil
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Nil 14,525 Nil
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Nil 14,525 Nil
▇▇. ▇▇▇▇-▇▇▇ ▇▇▇▇▇▇ Nil 114,525 400,000
Rupert's Crossing Nil 50,000 Nil
Credifinance, in trust Nil Nil 400,000
Medarex, Inc. Nil 400,000 Nil
5. The Preferred Shares are convertible into an equal number of Common
Shares on the earlier to occur of (i) an Initial Public Offering (as
hereinafter defined), (ii) the completion of a reverse-take-over
transaction (resulting in a publicly quoted or exchange listed
company), (iii) a minimum $3,000,000 private equity financing based on
a $10,000,000 valuation and (iv) the merger of the Corporation with
another corporation or the sale of substantially all the assets of the
Corporation (in both cases having a minimum transaction value of
$10.000,000). Each Common Share issued on conversion shall be coupled
with a three (3) month warrant to subscribe for an additional Common
Share at an exercise price of $1.00 per Common Share.
6. The Corporation and the Shareholders hereto further acknowledge and
agree that the Corporation will be creating and implementing a stock
incentive plan (the "Stock Option Plan") whereby directors, officers,
employees and service providers of and to the Corporation (other than
▇▇▇▇▇▇ in the event that he still holds
options referred to in Recital 4 above) will be eligible to acquire
Common Shares (at fair market value) in an amount not to exceed 10% of
the Common Shares outstanding from time to time.
7. The Corporation and the Shareholders have entered into this Agreement
to establish their respective rights and obligations in respect of the
issued and unissued shares of the Corporation, the management and
conduct of its business and various other matters hereinafter set
forth.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the respective
covenants and agreements hereinafter contained 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 covenant and agree with each
other as follows:
ARTICLE 1-INTERPRETATION
1.1 DEFINED TERMS
As used in this Agreement, the following tens have the following
meanings:
"Act" means the Florida Business Corporations Act as may be amended
from time to time, and shall be deemed to be any act substituted
therefor.
"Affiliate" means an "affiliate" as that ten is defined in the Act and,
for the purposes of such definition, the definition of "Subsidiary"
provided herein shall apply.
"Agreement" means this agreement and all schedules attached hereto and
any and all amendments made hereto by written agreement among the
parties hereto.
"AICPA" means the American Institute of Certified Public Accountants.
"Annual Business Plan" has the meaning specified in Section 6.1.
"Arm's Length" has the meaning specified to such term by the US
Internal Revenue Code.
"Articles" means the Articles of Incorporation attached to the
Certificate of Incorporation of the Corporation as may be amended or
restated from time to time.
"Associate" means an "associate" as that ten is defined in the
Securities Act of 1933.
"Bylaws" means the bylaws of the Corporation from time to time in force
and effect.
"Business" has the meaning specified in Section 4.1.
"Business Day" means any day other than Saturday, Sunday or a day on
which banks are closed for business in Florida.
"Business Plan" means the business plan pertaining to the conduct of
the Corporation's Business prepared by the Corporation, a copy of which
is attached as Schedule "A" hereto.
"Common Shares" means the shares of common stock in the capital of the
Corporation.
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"Control" has the meaning specified thereto in the Act as in effect on
the date hereof and without reference to any amendments thereto after
the date hereof.
"Directors", "Board of Directors" and "Board" means the persons who
are, from time to time, duly elected as directors of the Corporation.
"Expert" means a national accounting firm to be agreed upon by the
Corporation, Credifinance, NRC and Medarex within 5 days after any one
gives notice to the others of its desire to appoint an expert or, if
they are unable to agree, then "Expert" means PricewaterhouseCoopers,
Certified Public Accountants, or an affiliate thereof, or if none of
the foregoing is able or willing to accept an appointment to undertake
any valuation of Shares under and as contemplated in this Agreement,
then "Expert" shall mean Deloitte & Touche, Certified Public
Accountants, or an affiliate thereof.
"Fair Market Value" means, for the purposes of valuation by the Expert
hereunder, the highest cash price in terms of money which would be
obtained as at the date specified in the applicable Section hereof if
all the Shareholders of the Corporation sold all of their respective
Shares in an open and unrestricted market (recognizing that the Shares
are securities of a corporation which cannot offer its securities to
the public) without compulsion to a willing and knowledgeable purchaser
acting at arms' length and where in determining such Fair Market Value:
(1) the value of each Common Share is based on the value of all Common
Shares; (2) no diminution or accretion in value is attributed to any
majority or minority interest (other than in determining Fair Market
Value for a purchase by the Corporation from a trustee in bankruptcy);
(3) the value of any insurance on the life of any shareholder or
employee and the proceeds of such insurance shall be excluded; (4) the
value of all intangible and unrecorded assets is included; and (5) the
value of each Prefer -red Share shall be equal to the redemption price
for such share set forth in the Articles.
"Initial Public Offering" means the closing of an offering or offerings
pursuant to a receipted prospectus under the United States Securities
Act of 1933, as amended, or similar document filed under other
applicable securities laws in the United States or Canada, covering the
offer and sale of Common Shares for the account of the Corporation to
the public in which the Common Shares are listed on a major North
American stock exchange (excluding The Canadian Venture Exchange,
Montreal Exchange, Bulletin Board and any Canadian unlisted market) or
The NASDAQ Stock Market.
"Person" means an individual, partnership, corporation or other entity.
"Preferred Shares" means the shares of preferred stock in the capital
of the Corporation.
"Progress Report" has the meaning specified in Section 6.1.
"Prospective Customers" shall mean, for the purposes of Article 8,
Persons canvassed or solicited by the Corporation at any time up to the
date upon which a Person ceases to be a Shareholder, officer, director
or an employee of the Corporation.
"Related Parties" means Shareholders and Persons related to
Shareholders as the term "related" is defined in the US Internal
Revenue Code and "Related Party" shall mean any one of such parties.
"Senior Management Group" means initially, ▇▇▇▇▇▇ and ▇▇▇▇▇▇, but shall
include all future senior offcers of the Corporation appointed by the
Board.
"Shareholders" means collectively ▇▇▇▇▇▇, Credifinance, NRC, Lifrnac,
Benarroch, MacAdam, Berger, Rupert's Crossing and Medarex and any
person to whom a Shareholder transfers any Shares, or to whom
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Shares are issued, in accordance with the terms of this Agreement and
"Shareholder" means, individually, any one of them.
"Shares" means collectively the Common Shares and the Preferred Shares.
"Stock Option Plan" has the meaning set forth in the recitals to this
Agreement.
"Subsidiary" means a corporation controlled by the Corporation and on
the date hereof includes B Twelve Limited, an Ontario company.
Notwithstanding the definition of "Subsidiary", a corporation that is
consolidated with the Corporation for accounting purposes shall be
deemed to be a Subsidiary for all purposes hereof.
"Territory" means all countries who are members of the United Nations.
The provision of a Table of Contents, the division of this Agreement
into Articles and Sections and the insertion of headings are for
convenient reference only and are not to affect its interpretation.
1.2 GENDER AND NUMBER. Any reference in this Agreement to gender includes
all genders and words importing the singular number only shall include
the plural and vice versa.
1.3 Governing Law. This Agreement shall be governed and interpreted and
enforced in accordance with the laws of the State of Florida and the
United States federal laws applicable therein.
1.4 SEVERABILITY. Each provision of this Agreement is intended to be
severable. If any provision hereof is illegal or invalid, such
provision shall be deemed to be severed and deleted herefrom and such
illegality and invalidity shall not affect the validity or
enforceability of the remainder hereof.
1.5 Currency. All references to dollars in this Agreement shall be to U.S.
dollars.
1.6 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement among
the parties hereto with regard to the subject matter hereof and
supersedes all prior agreements, understandings, representations or
warranties, negotiations and discussions, whether oral or written,
among the parties hereto with respect thereto, including without
limitation any agreements among the shareholders of the Corporation
entered into prior to the date hereof, which are hereby terminated.
1.7 Amendment. No amendment of this Agreement shall be binding unless in
writing and signed by all of the parties hereto.
1.8 Waiver. No waiver by any party hereto of any breach of any of the
provisions of this Agreement shall take effect or be binding upon such
party unless in writing and signed by such party. Unless otherwise
provided therein, such waiver shall not limit or affect the rights of
such party with respect to any other breach.
1.9 Time of Essence. Time shall be of the essence of this Agreement.
1.10 Further Acts. The parties hereto agree to execute and deliver such
further and other documents and perform and cause to be performed such
further and other acts and things as may be necessary or desirable in
order to give full effect to this Agreement and every part hereof.
1.11 Accounting Principles. References in this Agreement to generally
accepted accounting principles shall be deemed to be the generally
accepted accounting principles from time to time approved by the AICPA,
or any
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successor institute, applicable as of the date on which such
calculation is made or required to be made in accordance with generally
accepted accounting principles.
ARTICLE 2 - TERM OF AGREEMENT
2.1 Term. Subject to Section 13.2, this Agreement shall come into force and
effect on the date hereof and shall terminate on the earlier of
a) the date on which only one Shareholder holds Shares;
b) the date this Agreement is terminated by written agreement of
the parties hereto;
c) the date upon which there shall occur an Initial Public
Offering;
d) the date upon which all of the Shares are acquired by a
reporting issuer within the meaning of the Securities Act of
1933; and
e) the sale of all of the Shares of the Corporation to a third
party in compliance with this Agreement.
ARTICLE 3 - IMPLEMENTATION OF AGREEMENT
3.1 Shareholder Covenants. Each of the Shareholders covenants and agrees
that it shall vote or cause to be voted the Shares of the Corporation
owned by it to accomplish and give effect to the terms and conditions
of this Agreement and that it shall otherwise act in accordance with
the provisions and intent of this Agreement.
3.2 CONFLICT. Subject to the provisions of the Act, in the event of any
conflict between the provisions of this Agreement and the Articles and
the Bylaws, the provisions of this Agreement shall govern. The parties
hereto acknowledge and agree that as the date hereof conflicts may
exist between this Agreement and the Articles and the Bylaws. Each of
the Shareholders agrees to vote or cause to be voted the Shares owned
by it so as to cause the Articles or the Bylaws to be amended to
resolve each such conflict and any other conflicts in favour of the
provisions of this Agreement.
3.3 Covenants by the Corporation. The Corporation consents to the terms of
this Agreement and hereby covenants with each of the other parties
hereto that it will at all times during the term of this Agreement be
governed by the terms and provisions hereof in carrying on its business
and affairs, and each of the Shareholders shall vote or cause to be
voted their respective Shares of the Corporation to cause the
Corporation to fulfil its foregoing covenants.
ARTICLE 4 - CORPORATION'S BUSINESS AND PURPOSE
4.1 Business and Purpose. The business and purpose of the Corporation is to
conduct activities in the biotechnology and pharmaceutical areas. The
Corporation's primary objective is to focus its research activities on
the discovery and the development of therapeutic products which
maximize the utility and application of its platform technologies and
provide an integrated approach for the treatment and/or management of
human lift threatening diseases or other serious disorders.
ARTICLE 5 - DIRECTORS AND SHAREHOLDERS
5.1 Number of Directors. The Corporation shall, unless otherwise agreed in
writing by those Shareholders holding at least sixty (60) percent of
all Shares, have a minimum of three (3) and a maximum of seven (7)
directors.
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5.2 Nomination and Election of Directors.
a) Nomination. Until changed by a resolution of the Shareholders,
the directors of the Corporation shall be ▇▇. ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇-▇▇▇ ▇▇▇▇▇▇.
b) Indemnity. The Corporation hereby indemnifies each Director
and his or her heirs and legal representatives against all
costs, charges and expenses, including an amount paid to
settle an action or satisfy a judgment, reasonably incurred by
him or her in respect of any civil, criminal or administrative
proceeding to which he or she is made a party by reason of
being or having been a director of the Corporation provided
(i) he or she acted honestly and in good faith with a view to
the best interests of the Corporation; and (ii) in the case of
a criminal or administrative proceeding that is enforced by a
monetary penalty, he or she had reasonable grounds for
believing that his or her conduct was lawful.
5.3 Term of Office. The term of office of a Director shall commence on the
date of that individual's election to the Board and shall terminate at
the close of the next following annual meeting of the Shareholders, or
until their successors are elected.
5.4 POWERS AND DUTIES OF DIRECTORS. Subject to the Act and the provisions
hereof, the Directors shall manage or supervise the Corporation's
Business except as such authority may be delegated by the Directors
from time to time, and in exercising such authority the Directors and
their delegates shall conduct the Corporation's Business or cause it to
be conducted in all material respects in accordance with the Business
Plan (as such plan may be amended from time to time) unless the parties
hereto shall otherwise agree in writing.
5.5 INSURANCE. The Corporation shall arrange director's insurance coverage
for the Directors of the Corporation on terms and conditions and in an
amount acceptable to NRC.
5.6 BOARD MEETINGS. The Board shall meet at least once every two months.
Any Director shall be entitled to convene a meeting of Directors upon
notice given as specified in Section 5.7.
5.7 EXERCISE OF AUTHORITY.
a) QUORUM. Unless otherwise agreed to in writing by all of the
Directors, but always subject to the Act and subsection
5.7(b), a quorum of any meeting of the Board shall consist of
a majority of Directors.
b) PROCEEDING WITHOUT QUORUM. Notwithstanding the provisions of
subsection 5.7(a), if proper original notice of a meeting of
the Board, specifying the business to be transacted at the
meeting, is given and a quorum of Directors is not present,
then a meeting of the Board may thereafter be held on 48 hours
written notice of the second meeting to transact the business
set forth in the original notice and, subject to the Act, any
members of the Board present at that meeting shall constitute
a quorum for the transaction of the business set out in the
original notice in respect of that meeting and such business
may be transacted by a majority vote of those Directors in
attendance at the meeting.
c) Notice. Unless all of the Directors are present (except where
a Director attends a meeting for the express purpose of
objecting to the transaction of any business on the grounds
that the meeting is not lawfully called) or those absent waive
notice, no meeting of Directors shall be validly convened
unless 48 hours' written notice thereof is given in accordance
with the provisions of the Bylaws.
d) Content of Notice. No resolution with respect to any matter
may be put to any meeting of the Board unless the notice of
the meeting contains reasonable detail of the matter or unless
all of the Directors
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either are present and do not object to the matter being put
to the meeting or otherwise waive the provisions of this
subsection 5.7(d).
e) Voting. Except as otherwise herein provided, decisions of the
Board shall be effective only if approved by a majority of the
votes cast at a meeting of the Directors or by written
resolution signed by all of the Directors.
f) Compensation Committee. The Board shall appoint a Compensation
Committee and shall delegate the responsibility for making
decisions relating to compensation of all senior employees of
the Corporation to such Compensation Committee. The
Compensation Committee shall consist of three (3) members, one
of whom shall be a nominee of NRC, one of whom shall be ▇▇▇▇▇▇
(provided that ▇▇▇▇▇▇ shall be prohibited from voting on
matters relating to his own compensation) and one of whom
shall be independent of management. In order to be effective,
all decisions of the Compensation Committee shall be made by a
unanimous vote of its members entitled to vote at a meeting or
in writing.
g) AUDIT COMMITTEE. The Board shall appoint an Audit Committee
and shall delegate the responsibility for the review and
approval of the financial statements of the Corporation to
such Audit Committee. The Audit Committee shall consist of
three (3) members, one of whom shall be ▇▇▇▇▇▇, one of whom
shall be a nominee of NRC and one of whom shall be independent
of management. In order to be effective, all decisions of the
Audit Committee shall be made by a unanimous vote of its
members at a meeting or in writing.
h) Scientific Advisory Board/Committee. The Board shall appoint a
Scientific Advisory Board/Committee and shall delegate the
responsibility to it for the review of the research and
development of the Corporation's platform technology.
i) Other Committees. The Board shall have the right to appoint
such other committee(s) as it deems necessary and in so doing,
shall delegate specific responsibilities to such committee(s).
5.8 Senior Officers.
a) The Corporation shall have six (6) months following the date
of this Agreement to retain the services of a Chief Financial
Officer and/or Chief Operating Officer acceptable to NRC and
if the Corporation fails to do so, NRC shall have the right
following such six (6) month period to appoint such Chief
Financial Officer and/or Chief Operating Officer of the
Corporation in its sole discretion.
b) Throughout the currency of this Agreement, members of the
Senior Management Group may be compensated as determined by
the Compensation Committee.
5.9 Directors Fees. Any Director who is independent of the Corporation
shall be entitled to an annual fee of $2,000 and a fee of $200 for each
meeting attended by such Director plus reasonable expenses incurred in
attending such meeting, upon presentation of receipts therefor.
5.10 Extraordinary Matters. Notwithstanding any provision to the contrary in
the Articles, the Bylaws or this Agreement, the following matters shall
require the written approval of the Shareholders holding sixty-six and
two-thirds (66 2/3's) of the Shares in addition to any requirements
required by law:
a) the taking or institution of any proceedings for the
winding-up, reorganization or dissolution of the Corporation
or any of its Affiliates;
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b) the making of an assignment for the benefit of any creditors
of the Corporation or of any of its Affiliates;
c) the amalgamation, consolidation, merger of, or the entering
into of any agreement to amalgamate, consolidate or merge, the
Corporation with any corporation, partnership, joint venture
or firm, or the continuance or corporate reorganization of the
Corporation of any kind or the purchase of any securities of
any Person;
d) the sale, lease, exchange or other disposition of all or
substantially all of the assets of the Corporation or of any
of its Affiliates or any sale, lease, exchange, or other
disposition of any such assets out of the ordinary course of
business;
e) the sale of any shares held by the Corporation in any of its
Subsidiaries;
f) the issuance of any shares by any Subsidiary;
g) the purchase or redemption by the Corporation of any Shares
other than as expressly provided in this Agreement;
h) the declaration, payment or setting aside for payment of any
dividend, the distribution of any surplus or earnings, the
return of any capital, the repayment or retirement of any
indebtedness of the Corporation to any Shareholder, or any
other payment or distribution of assets of the Corporation to
any Shareholder, other than to or in favour of NRC (as a
holder of Preferred Shares).
i) the amendment of the Articles or Bylaws (other than as
contemplated by Section 3.2 hereof);
j) the guarantee or indemnification by the Corporation of, or the
grant of security by the Corporation for, the debts or
obligations of any corporation, partnership, joint venture,
firm or person;
k) the making of any loans with, the granting of any other
financial assistance to or the entering into of any agreements
with any Shareholder or Associate of such Shareholder;
1) the amendment of any provision of this Agreement;
m) other than as set forth in Section 5.8 for the Senior
Management Group, the payment of any advance, salary, bonus,
consulting fee, management fee, incentive compensation or
bonus or other payment to any Director, former director,
officer, Shareholder, employee or Affiliate (excluding the
market value of goods sold or services provided in the
ordinary course of business) of the Corporation or to any
person related by blood, adoption or marriage to any of the
foregoing or to any corporation not dealing at Arm's Length
with any such person or the creation of any agreement which
would obligate the Corporation to make any such payment,
except to the extent that such fees, bonuses or other payments
constitute normal remuneration payable to bona fide employees
of the Corporation and have been specifically approved in
connection with the Annual Business Plan;
n) the acquisition or agreement to acquire any capital asset, any
lease or agreement to lease of real or personal property or
any acquisition or agreement to acquire property which is not
contemplated by the Business Plan as may be amended, if at
all, or by the duly approved Annual Business Plan or which
would exceed the aggregate amount approved by the Business
Plan (or by the duly approved Annual Business Plan) for such
matters;
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o) any material change in the Corporation's Business or the
taking of any action which may lead to or result in such
material change;
p) the incorporation or acquisition of any corporation that would
be an Affiliate of the Corporation:
q) the hypothecation, mortgage, pledge or any act otherwise
encumbering the Corporation's assets or any of them except as
may be required by bankers in connection with the
Corporation's normal banking activities and arranged lines of
credit;
r) the issuance or allotment of Shares or the granting of any
right, option or privilege to acquire any Shares, other than
as contemplated in this Agreement;
s) any change in the number of issued and outstanding shares in
the capital of the Corporation or any increase or reduction in
the capitalization of the Corporation, including, without
limitation, byway of any split, conversion or exchange of
Shares; and
t) any amendment, modification or termination of any agreements
between the Corporation and any of its Subsidiaries.
5.11 SUBSIDIARIES AND AFFILIATES. The provisions of Section 5.10 shall apply
mutatis mutandis to any Subsidiary of the Corporation.
5.12 MEETINGS OF SHAREHOLDERS. The quorum for the transaction of business at
any meeting of the Shareholders shall be two persons present in person
or by proxy holding at least 50% of the Shares entitled to vote at the
meeting. No meeting shall continue with the transaction of business in
the absence of a quorum.
Subject to Section 5.10, all questions before the Shareholders shall be
decided by a majority of those voting. The Chairman of the meeting of
the Shareholders shall be decided by a majority of those voting. The
Chairman of the meeting of the Shareholders will not have a second or
deciding vote.
Notwithstanding the provisions of this subsection 5.12, if proper
notice of a meeting of the Shareholders is given and a quorum of
Shareholders is not present, then a meeting of the Shareholders may
thereafter be held on 48 hours written notice of the second meeting to
transact the business set forth in the original notice and, subject to
the Bylaws and the Act, any Shareholders present at that meeting shall
constitute a quorum for the transaction of the business set out in the
original notice in respect of that meeting and such business may be
transacted by a majority of voting Shares of Shareholders in attendance
at the meeting.
5.13 Key Person Insurance. The Corporation covenants with the Shareholders
that the Corporation will insure and keep insured the life of ▇▇▇▇▇▇
under a policy of "key person life insurance" in the amount of
$1,000,000 with the Corporation as the sole beneficiary under such
policy.
5.14 Auditors. The Board shall have the responsibility of selecting auditors
for the Corporation, subject to the approval of NRC.
5.15 STOCK OPTIONS AND WARRANTS. The Corporation hereby discloses that there
are no outstanding stock options or warrants, other than those listed
in the recitals to this Agreement.
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ARTICLE 6 - FINANCIAL & ACCOUNTING PRACTICES
6.1 Financial Information.
a) The Corporation shall deliver to all Shareholders within
forty-five (45) days of the financial year end of the
Corporation one copy of its annual financial statements, which
shall be prepared on a consolidated basis and be audited by
independent auditors of the Corporation. Such statements shall
include a balance sheet and a statement of income, retained
earnings and changes in financial position, together with all
supporting schedules and working papers. Such financial
statements shall be signed by an authorized officer of the
Corporation and shall be accompanied by a report of the
auditors of the Corporation (which report shall not be
qualified).
b) The Corporation shall furnish to its Shareholders no later
than thirty (30) days prior to the end of the financial year
ending March 31, 2000, and thereafter no later than thirty
(30) days prior to the end of each financial year an Annual
Business Plan for the next financial year which shall consist
of the detailed budget for such financial year providing
information supplementary to and consistent with the Business
Plan (as same may be amended from time to time). For the
purposes of this Agreement, "ANNUAL BUSINESS PLAN" means, for
any financial year, monthly detailed pro forma balance sheets,
income statements and statements of changes in financial
position for the Corporation prepared in accordance with
generally accepted accounting principles on a consolidated
basis and approved by its Board of Directors together with
such explanations, notes and information which in the
reasonable opinion of the Corporation explain and supplement
the information so provided and a capital expenditure plan
indicating the nature and amount of capital expenditures
proposed to be incurred in such financial year.
c) The Corporation shall also provide its Shareholders a monthly
financial report within thirty (30) days after the end of each
month which report shall consist of a balance sheet and income
statement, including year-to-date information.
d) The Corporation shall also deliver to each of its Shareholders
within thirty (30) days after the end of each financial
quarter one copy of its unaudited quarterly financial
statements which shall be prepared on a consolidated basis and
shall include the balance sheet and statements of income,
retained earnings and changes in financial position, together
with all supporting schedules and notes to the financial
statements; and
e) The Corporation shall also furnish to each of its Shareholders
within thirty (30) days after the end of each financial
quarter a Progress Report. For purposes of this Agreement,
"Progress Report" means, for the period in question, a written
report describing and summarizing the activities being
undertaken by the Corporation, which report shall include a
summary of all progress made toward established scientific and
corporate milestones and any recommendation to change any such
milestones, if necessary.
6.2 Maintain Books. The Corporation shall maintain accurate and complete
books and records of all transactions, receipts, expenses, assets and
liabilities of the Corporation in accordance with generally accepted
accounting principles, consistently applied as approved and adopted by
the Board.
6.3 Review of Books. The Shareholders agree that NRC, Medarex and
Credifmance shall, at its own expense, be entitled to appoint a
representative, agent or designee to review, on reasonable notice, all
books, documents and records of the Corporation and shall be entitled
to make copies thereof for their oven purposes. NRC and its respective
representatives, agents and designees shall have the right to discuss
at any time with management
10
personnel of the Corporation, such matters pertaining to the financial
position, operations, investments and financings as may be of interest
to NRC or such representative, agent or designee from time to time.
6.4 FISCAL YEAR. The fiscal year of the Corporation shall end on the 31 st
day of March in each year, or such other date as is agreed to by the
Board.
6.5 OBLIGATIONS OF A PUBLIC COMPANY. The Corporation acknowledges that
Medarex is a public company and that the Corporation shall cause its
officers, directors, employees, auditors and other professional
advisors to provide Medarex and its respective officers, directors,
employees, auditors and other professional advisors with reasonable
access on prior written notice and during normal business hours to
financial and other information which is reasonably requested regarding
the Corporation and its Subsidiaries, and to otherwise co-operate
reasonably with Medarex, and its officers, directors, employees,
auditors and other professional advisors to enable Medarex to satisfy
the reporting and other obligations imposed on Medarex by the
Securities Exchange Commission ("SEC") and any other regulatory
authorities to the extent that Medarex is subject to such laws and
regulations.
ARTICLE 7 - SALE AND ISSUANCE OF SHARES
7.1 SALE AND ISSUE RESTRICTIONS.
a) Except as otherwise set forth in this Agreement, none of the
Shareholders may sell, grant an option to sell, encumber,
pledge or create a security interest in or otherwise deal with
any of its Shares in the Corporation provided however that
Shares may be pledged to the banker of the Corporation from
time to time as security for indebtedness of the Corporation
owed to such banker.
b) No proposed dealing with any Shares (including the issuance
thereof) in violation of this Agreement shall be valid, and
the Corporation shall not record or transfer any of the Shares
dealt with in violation of this Agreement in the records of
the Corporation nor shall any voting rights attached to such
Shares be exercised, nor shall any dividends be paid on such
Shares during the period of such violation. Such
disqualification shall be in addition to and not in lieu of
any other remedies to enforce the provisions of this
Agreement.
c) Notwithstanding anything else herein contained, every transfer
of all or a portion of the Shares held by a Shareholder, and
any issue of Shares by the Corporation, in addition to the
requirements of the Articles, shall be subject to the
condition that the proposed transferee, or holder, if not
already bound by this Agreement, shall first enter into an
agreement with the other parties hereto to be bound hereby.
For greater certainty, but without limiting the foregoing,
each of the Shareholders shall be bound by the provisions of
this Agreement in respect of any Shares which may be acquired
by such Shareholder after the date hereof in accordance with
the provisions of this Agreement.
7.2 Offer. If at any time a Shareholder or group of Shareholders, acting in
concert (hereinafter collectively referred to as the "Selling
Shareholder"), desires to sell to a third party with whom the Selling
Shareholder is dealing at Arm's Length all but not less than all of the
Shares of the Selling Shareholder, the Selling Shareholder shall obtain
from the third party a bona fide offer in writing which offer shall be
irrevocable for a period of 45 days (hereinafter in this Section 7.2
and Sections 7.3, 7.4 and 7.5 referred to as the "Offer") which it is
ready and willing to accept, to purchase all of the Shares for the
amount thereof set forth in the Offer by cash or certified cheque and
shall give notice in writing to the other Shareholders of the receipt
of the Offer within 10 days thereof together with a copy thereof. The
Offer may but need not also provide for the purchase of indebtedness
owed by the Corporation to the Selling Shareholder. 11
11
7.3 Tag-Along and Purchase Rights. If NRC is not a Selling Shareholder,
under Section 7.2, NRC shall have the right to elect, by notice in
writing to the Selling Shareholder, within 30 days from the date of
receipt of a copy of the Offer, to:
a) as a condition precedent to any sale of the Shares by the
Selling Shareholder, require the third party to amend the
Offer to provide for the purchase of that number of Shares
which are the subject matter of the Offer such that each of
the Selling Shareholder and NRC shall sell from their
respective holdings of Shares a fraction of the number of
Shares which are the subject matter of the Offer, which
fractions shall have as their numerators, in the case of
Selling Shareholder, the number of Shares held by the Selling
Shareholder, and in the case of NRC, the number of Shares held
by NRC, and the denominator of both such fractions shall be
the sum of the number of Shares held by the Selling
Shareholder and NRC, for the same price per Share, and at the
same time and on the same terms and conditions as contained in
the Offer, in which case NRC shall become a "Selling
Shareholder" for purposes of this Article 7; or
b) if the Selling Shareholder is not NRC, as a condition
precedent to any sale of the Shares by the Selling
Shareholder, require the third party to amend the Offer to
provide for the purchase of all of the Shares (or such lesser
number as is the subject matter of the Offer) held by NRC, for
the same price per Share, and at the same time and on the same
terms and conditions as contained in the Offer, in which case
NRC shall become a "Selling Shareholder" for purposes of this
ARTICLE 7.
7.4 RIGHT OF FIRST REFUSAL. Except in the case where Section 7.6 or Section
7.9 shall apply, the other Shareholders shall have the irrevocable
right, exercisable by written notice given to the Selling Shareholder
within 30 days after the giving of the notice by the Selling
Shareholder, to purchase all but not less than all of the Shares of the
Selling Shareholder or, if NRC has exercised its option set forth in
Section 7.3, the number of Shares of the initial Selling Shareholder
and of NRC which are the subject matter of the Offer (in either case,
the "Selling Shareholders Shares"), and, if provided for in the Offer,
indebtedness owed by the Corporation to the Selling Shareholder on the
terms and conditions and for the amount set forth in the Offer by cash
or certified cheque pro rata in proportion to their respective holdings
of Shares (or in such other proportions as they may agree among
themselves). In the event that one or more of the Shareholders elects
to purchase his or its pro rata proportion of the Selling Shareholders
Shares and, if applicable, indebtedness owed to the Selling Shareholder
and one or more of the Shareholders declines to elect to so purchase,
the Shareholder(s) electing to so purchase shall have the further right
and option, exercisable by notice in writing within 5 days of being
notified by the Selling Shareholder that one or more of the
Shareholders has declined to so purchase, to purchase the remaining
Selling Shareholders Shares and, if applicable, indebtedness owed to
the Selling Shareholder on the same terms and conditions and for the
amount set forth in the Offer by cash or certified cheque pro rata in
proportion to their respective holdings of Shares of such Shareholders
(or in such other proportions as they may agree among themselves). If
there shall remain Shares which no Shareholder has elected to purchase,
notwithstanding that one or more Shareholders has elected to purchase
Selling Shareholders Shares pursuant to this Section 7.4, the right of
any Shareholders to acquire the Selling Shareholders Shares and, if
applicable, the indebtedness owed to the Selling Shareholder shall be
null and void and the provisions of Section 7.5 shall apply.
7.5 Sale of Shares. Right of First Refusal Not Exercised. If following
compliance with Section 7.4 there shall remain Shares which no
Shareholder has elected to purchase, the Selling Shareholder shall
accept the Offer and complete the transaction with the said third party
in accordance with the terms and conditions of such third party's Offer
and the parties hereby agree to take all steps and proceedings required
to have such third party entered on the books of the Corporation as a
shareholder and, if applicable, as a debtholder of the Corporation,
provided that if the sale of such Shares to the third party is not
completed, the provisions of Article 7 shall again apply to any
proposed sale of Shares. The Selling Shareholder is hereby irrevocably
appointed the agent and attorney of the Shareholders and each of them
for the purposes of effecting registration of the third party 12
12
as a Shareholder of the Corporation. The Board of Directors or the
Shareholders (including the Selling Shareholder), as the case may be,
before consenting to the transfer of the purchased Shares to the
third party, shall require proof that the sale took place in
accordance with the third party's Offer and the Board of Directors
shall refuse the recording of the transfer of the purchased Shares
which may have been sold otherwise than in accordance with the
provisions of such Offer and of this Agreement.
7.6 DRAG-ALONG RIGHTS. If any of the Shareholders receive a Take-Over Bid,
as hereinafter defined, which such Shareholder(s) wish to accept, such
recipient Shareholder(s) shall forthwith provide a copy of the
Take-Over Bid to the other Shareholders together with a notice that he,
she or it wishes to invoke the provisions of this Section 7.6 in which
case if Shareholders holding not less than 60% of the total number of
issued and outstanding Shares wish to accept such Take-Over Bid, such
Shareholders shall have the right to require the other Shareholders, on
10 days notice in writing to such other Shareholders, to sell all of
the Shares held by them to the third party pursuant to the terms of the
Take-Over Bid for the amount set forth in the Take-Over Bid. The
Corporation is hereby irrevocably appointed the agent and attorney of
all the Shareholders and each of them for the purposes of effecting
registration of the third party as a Shareholder and, if applicable,
debtholder of the Corporation in completing the sale of the Shares of
such other Shareholders to the third party in accordance with this
Section 7.6. For purposes hereof, "TAKE-OVER BID" shall mean an offer
for all of the Shares made by a third party dealing at Arm's Length
with all of the Shareholders and the Corporation which complies with
the following:
a) the purchase price shall in no event be less than $3.00 and
shall be paid in cash or, certified cheque or bank draft, in
full, at the closing;
b) the Take-Over Bid must provide for a purchase of the Preferred
Shares at a price which is the greater of (i) the amount per
Preferred Share as would have been payable had all Preferred
Shares been converted to Common Shares pursuant to the
provisions of the Articles immediately prior to the purchase
and (ii) redemption price per Preferred Share contained in the
Articles;
c) the Take-Over Bid shall not provide for the provision of
management, consulting or other fees, the payment for any
non-competition covenant, or the payment of salary which NRC
in its sole discretion determines to be reasonably
attributable to the purchase price as opposed to, fair
consideration for future services to be rendered by the
Shareholders or any of their Affilites, including the
purchaser, or any other Person with whom the Shareholder does
not deal at arm's length. In addition, no other consideration
may be paid by the offeror or its Affiliates otherwise than as
set forth in the offer;
d) NRC shall be required to represent and wan-ant only that (i)
its Shares are owned by it with a good and marketable title
thereto, free and clear of any liens, charges, mortgages and
encumbrances, (ii) it has the power to convey the Shares, and
e) the liability of NRC under the purchase agreement including,
without limitation, liability for a breach of representation
or warranty or for a claim under an indemnity shall be several
and not joint and several and shall not, under any
circumstances, exceed the lesser of its pro rata proportion of
any claim and the purchase price payable to NRC ; and
f) the Take-Over Bid shall contain no provision which would
prevent or restrict NRC's ability to make investments in any
business.
7.7 RIGHTS OF PURCHASER. Any purchaser of Shares from any Shareholder in
accordance with the provisions of this Agreement shall be entitled to
all of the benefits accruing to such Shareholder hereunder and shall be
subject to the obligations of such Shareholder hereunder. 13
13
7.8 Ranking of Shares. Notwithstanding anything herein contained to the
contrary, no offer for the purchase of the Shares shall be made by a
party hereto or considered or accepted by a party hereto unless the
purchase price contained in the offer attributable to each Preferred
Share is the greater of (i) the amount per Preferred Share as would
have been payable had all Preferred Shares been converted to Common
Shares pursuant to the provisions of the Articles immediately prior to
the purchase and (ii) redemption price per Preferred Share contained in
the Articles.
ARTICLE 8 - NON-COMPETITION
8.1 Non-Competition. For the period ending on the second anniversary of the
date that any Shareholder ceases directly or indirectly to be a
Shareholder (the "RESTRICTED PERIOD"), such Shareholder, other than NRC
and Medarex, shall not, on his or her own behalf or on behalf of or in
connection with any Person, directly or indirectly, in any capacity
whatsoever including as an employer, employee, mandatary, principal,
agent, joint venturer, partner, shareholder or other equity holder,
independent contractor, licensor, licensee, franchiser, franchisee,
distributor, consultant, supplier, trustee or by and through any
corporation, company, cooperative, partnership, trust, entity with
juridical personality, unincorporated association or otherwise carry
on, be engaged in, have any financial or other interest in or be
otherwise commercially involved in any endeavour, activity or business
in all or part of the Territory which:
a) Subject to the provisions of Section 8.6, is substantially the
same as or in competition with the Corporation's Business or
the Subsidiaries' Business; or
b) In any way involves the acquisition, reorganization or
consolidation of Persons engaged in the Corporation's Business
or the Subsidiaries' Business.
8.2 NON-SOLICITATION OF CUSTOMERS. For the period ending on the second
anniversary of the date that any Shareholder ceases directly or
indirectly to be a Shareholder, such Shareholder, other than NRC and
Medarex, shall not, on his or her own behalf or on behalf of or in
connection with any other Person, directly or indirectly, in any
capacity whatsoever including as an employer, employee, mandatary,
principal, agent, joint venturer, partner, shareholder or other equity
holder, independent contractor, licensor, licensee, franchiser,
franchisee, distributor, consultant, supplier, cooperative,
partnership, trust, entity with juridical personality, unincorporated
association or otherwise in connection with the Corporation's Business
or the Subsidiaries' Business:
a) Canvass or solicit the custom of (or procure or assist the
canvassing or soliciting of the custom of) any customer of the
Corporation or its Subsidiaries;
b) Accept (or procure or assist the acceptance of) any business
from any customer of the Corporation or its Subsidiaries;
c) Canvass or solicit the custom of (or procure or assist the
canvassing or soliciting of the custom of) any Prospective
Customer:
d) Accept (or procure or assist the acceptance of) any business
from any Prospective Customer;
e) Supply (or procure or assist the supply of) any goods or
services to any customer of the Corporation or its
Subsidiaries; or
f) Supply (or procure or assist the supply of) any goods or
services to any Prospective Customer.
14
8.3 Non-Solicitation of Employees. For the period ending on the second
anniversary of the date that any Shareholder ceases directly or
indirectly to be a Shareholder, such Shareholder shall not, on his or
her own behalf or on behalf of or in connection with any other Person,
directly or indirectly, in any capacity whatsoever including as an
employer, employee, mandatary, principal, agent, joint venturer,
partner, shareholder or other equity holder, independent contractor,
licensor, licensee, franchiser, franchisee, distributor, consultant,
supplier, trustee, or by and through any corporation, company,
cooperative, partnership, trust, entity with juridical personality,
unincorporated association or otherwise:
a) Employ, offer employment to or solicit the employment or
engagement of or otherwise entice away from the employment of
the Corporation or the Subsidiaries any individual who is
employed by the Corporation at the time that such person
ceases to be a Shareholder whether or not such individual
would commit any breach of his contract or terms of employment
by leaving the employ of the Corporation or the Subsidiaries,
or
b) Procure or assist any Person to employ, offer employment or
solicit the employment or engagement of or otherwise entice
away from the employment of the Corporation or the
Subsidiaries any individual who is employed by the Corporation
or the Subsidiaries at the time that such person ceases to be
a Shareholder whether or not such individual would commit any
breach of his contract or terms of employment by leaving the
employ of the Corporation or the Subsidiaries.
8.4 Non-Interference. Such Shareholder ceasing directly or indirectly to be
a Shareholder shall not on its own behalf or on behalf of or in
connection with any other Person, directly or indirectly, in any
capacity whatsoever including as an employer, employee, mandatary,
principal, agent, joint venturer, partner, shareholder or other equity
holder, independent contractor, licensor, licensee, franchiser,
franchisee, distributor, consultant, supplier, trustee, or by and
through any corporation, company, cooperative, partnership, trust,
entity with judicial personality, unincorporated association or
otherwise, interfere or attempt to interfere with the Corporation's
Business or the Subsidiaries' Business or persuade or attempt to
persuade any customer, Prospective Customer, employee or supplier of
the Corporation or any of the Subsidiaries to discontinue or alter such
Person's relationship with the Corporation or any of the Subsidiaries.
8.5 PORTFOLIO EXCEPTION. Such Person ceasing to be a Shareholder and the
shareholders of such Shareholder shall not be in default under this
Agreement by virtue of his holding as a passive investor not more than
five percent (5%) of the issued and outstanding shares of a
corporation, the shares of which are listed on a recognized stock
exchange within the Territory and with which such Person has no other
connection whatsoever.
8.6 PROVISO. Nothing in this Article 8 shall derogate from a Shareholder's
obligation to comply with Article 13 of this Agreement.
ARTICLE 9 - REPRESENTATIONS AND WARRANTIES
9.1 General. Each Shareholder hereby represents and warrants to each of the
other Shareholders and to the Corporation that such Shareholder:
a) is neither a party to nor bound by any agreement regarding the
ownership of its Shares, other than this Agreement or an
agreement to effect a transfer of Shares in accordance with
the terms of this Agreement;
b) is not a party to, bound by or subject to any indenture,
mortgage, lease, agreement, instrument, charter or bylaw
provision, statute, regulation, order, judgment, decree or law
which would be violated, contravened or breached by, or under
which any default would occur as a result of the execution and
15
delivery by such Shareholder of this Agreement or the
performance by such Shareholder of any of the terms hereof;
and
c) owns its Shares beneficially and as of record with good and
marketable title thereto free and clear of all legal rights
and encumbrances.
9.2 THE CORPORATION. The Corporation hereby represents and warrants to each
Shareholder that, as at the date of this Agreement:
a) the Corporation is a Florida corporation;
b) the Corporation carries on no business other than the
Corporation's Business;
c) there are no outstanding options or agreements by the
Corporation to issue securities in the capital of the
Corporation and no understandings capable of becoming such
agreements, other than those options described in the recitals
to this Agreement; and
d) the recitals to this Agreement are true and correct.
ARTICLE 10 - ADDITIONAL CAPITAL
10.1 RELATED PARTY Loans. All loans from any Related Party shall be made on
commercially reasonable terms and conditions.
a) Such loans are hereby expressly subordinated, to the extent
and in the manner provided in this Section 10.1, without any
further action or documentation whatsoever being necessary to
give effect to such subordination, in right of payment to the
prior payment in FULL OF ALL other obligations of the
Corporation for borrowed money, including without limitation
the Preferred Shares, all charges and security interests
created thereby and all indebtedness, liabilities and
obligations secured thereby (collectively, the "OTHER
INDEBTEDNESS").
b) In the event of any insolvency or bankruptcy proceedings, or
any receivership, liquidation, reorganization or other similar
proceedings relative to the Corporation or to its property or
assets, or in the event of any proceedings for voluntary
liquidation, dissolution or other winding-up of the
Corporation, whether or not involving insolvency or
bankruptcy, or any marshaling of the assets and liabilities of
the Corporation (collectively referred to as a "PROCEEDING"),
the holders of Other Indebtedness shall be entitled to receive
payment in full of all the Other Indebtedness before any
lending Related Party shall be entitled to receive any payment
or distribution of any kind or character, whether in cash,
property or securities which may be payable or deliverable in
any such event in respect of his, her or its Related Party
loan.
c) Upon any payment or distribution of assets of the Corporation
referred to in this Section 10.1, any lending Related Party
shall be entitled to call for and rely upon a certificate,
addressed to such lending Related Party, of the person making
any such payment or distribution for the purpose of
ascertaining the persons entitled to participate in such
distribution, the holders of Other Indebtedness and other
indebtedness of the Corporation, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and
all other facts pertinent thereto or to this Section 10.1.
d) Subject to the payment in full of all Other Indebtedness, any
lending Related Party shall be subrogated to the rights of the
holders of Other Indebtedness to receive payments and
distribution of assets of the Corporation in respect of and on
account of Other Indebtedness, to the extent of the
application
16
thereto of moneys or other assets which would have been
received by such lending Related Party but for the provisions
of Section 10.1, until the principal of and interest on the
Other Indebtedness shall be paid in full. No payment or
distribution of assets of the Corporation to the lending
Related Party which would be payable or distributable to the
holder of Other Indebtedness pursuant to this Section 10.1
shall (to the extent paid over to or held for the account of
holders of Other Indebtedness), as between the Corporation,
its creditors (other than the holders of0ther Indebtedness)
and such lending Related Party, be deemed to be a payment by
the Corporation to or on account of such lending Related
Party, it being understood that the provisions of this Section
10.1 are, and are intended, solely for the purpose of defining
the relative tights of the lending Related Party, on the one
hand, and the holders of the Other Indebtedness on the other
hand. Nothing contained in this Section 10.1 is intended to or
shall impair, as between the Corporation and its creditors
(other than the holders of Other Indebtedness and the lending
Related Party), the obligation of the Corporation, which is
unconditional and absolute, to pay to the lending Related
Party the principal of and interest on his, her or its Related
▇▇▇▇▇ loan and any other amounts payable under his, her or its
Related Party loan as and when the same shall become due and
payable in accordance with the terms hereof, or to affect the
relative tights of the lending Related ▇▇▇▇▇ and creditors of
the Corporation, other than the holders of the Other
Indebtedness, nor shall anything herein or therein prevent the
lending Related ▇▇▇▇▇ from exercising all remedies otherwise
permitted by applicable law upon default under his, her or its
Related ▇▇▇▇▇ loan subject to the rights, if any under this
Section 10.1, of the holders of Other Indebtedness upon the
exercise of any such remedy.
e) In the event that, notwithstanding the foregoing provisions of
this Section 10.1, the lending Related Party shall have
received any payment after a Proceeding has commenced before
all Other Indebtedness has been paid in FULL, THE lending
Related ▇▇▇▇▇ shall hold such payment in trust for the benefit
of the holders of Other Indebtedness and shall forthwith upon
the completion of the Proceeding pay such payment over to such
holders of Other Indebtedness for application against unpaid
Other Indebtedness.
f) For greater certainty, this Section 10.1 shall not be
construed so as to prevent the lending Related ▇▇▇▇▇ from
receiving and retaining any payments on account of his, her or
its Related Party loan which are made (A) in a manner that is
consistent with the terms of his, her or its Related Party
loan and (B) at any time when no event of default, as defined
in any Other Indebtedness or the instrument creating the same,
has occurred and is continuing and in respect of which notice
has been given by or on behalf of the holders of Other
Indebtedness to the Corporation and the Related Party. Until
written notice shall be given to the Related ▇▇▇▇▇ by or on
behalf of any holder of any Other Indebtedness of the
occurrence of any default with respect to such Other
Indebtedness or the existence of any other facts which would
have the result that any payment with respect of any Related
▇▇▇▇▇ loan would be in contravention of the provisions of this
Section 10.1, the lending Related Party shall be entitled to
assume that no such default has occurred, or that no such
facts exist.
g) The holders of Other Indebtedness shall be entitled to rely
and shall be third ▇▇▇▇▇ beneficiaries of the provisions of
this Section 10. 1.
h) The provisions of this Section 10.1 shall have no application
to loans made by NRC to the Corporation.
10.2 FUTURE DEBT FINANCING. If the Corporation requires additional capital
by way of debt, it shall first advise NRC of its requirements in
writing. Upon receiving such notice, NRC shall have 10 days within
which to notify the Corporation if it wishes to provide the required
financing on such terms and conditions as may be negotiated between
such parties. During that time, the Corporation shall provide to NRC,
at its request, all such information as NRC may reasonably require to
make its determination. In the event that the parties are unable
17
to agree upon the terms of the financing within such 45 day period, the
Corporation shall deliver, within 5 days following the expiry of such
45 day period, a term sheet outlining the terms and conditions upon
which it would be prepared to proceed with the financing. NRC shall
have a further period of 5 days within which to accept or reject the
terns of financing. In the event that either NRC rejects the terms of
financing or fails to give notice within the prescribed time period as
aforesaid, the Corporation shall be free to pursue obtaining its debt
financing with other Persons on terms no less favourable to the
Corporation or more favourable to such Persons than those set forth in
the tern sheet provided to NRC .
10.3 FUTURE EQUITY FINANCINGS. If the Corporation requires additional
capital by way of equity, the Corporation shall provide written notice
to the Shareholders specifying the terms and conditions of the proposed
equity issue including the amount of financing to be raised, the type
of security to be issued, the price per security to be issued and the
target completion date. Each Shareholder shall have the irrevocable
right, exercisable by written notice given to the Corporation within 15
days after the giving of above notice by the Corporation, to
participate in the equity financing on a pro rata basis based on the
number of Shares held by such Shareholder on the terms and conditions
set forth by the Corporation. In the event that one or more
Shareholders elects to subscribe for his or its pro rata proportion of
the proposed equity issue and one or more Shareholders declines to so
subscribe, the Shareholder(s) electing to so subscribe shall have the
further right and option, exercisable by notice in writing within 5
days of being notified by the Corporation that one or more Shareholders
has declined to so subscribe, to subscribe for the remaining equity on
the same terms and conditions as set forth by the Corporation in
proportion to their respective holdings of Shares (or in such other
proportions as they may agree among themselves). The foregoing
procedure shall be repeated as often as is necessary until the equity
issue is fully subscribed or until there remains equity which no
Shareholder has elected to subscribe for. If there remains equity which
no Shareholder has elected to subscribe for, the Corporation may elect
to proceed with the equity financing in an amount equal to the amount
subscribed for under this Section 10.3 or decline to proceed and to
pursue its equity capital requirements through other sources on terms
and conditions no more favourable than the terms and conditions
specified to the Shareholders.
10.4 EXCEPTIONS TO PRE-EMPTIVE RIGHTS. Notwithstanding Section 10.3 hereof,
no Shareholder shall have any rights thereunder in respect of
a) the issue of any options or shares of the Corporation pursuant
to a stock option plan for employees and other persons
approved by the Board of Directors, or pursuant to option or
other agreemen(pound) with employees of the Corporation
approved by the Board of Directors (or the Compensation
Committee) and in each case consented to in accordance with
Section 5.10 hereof;
b) shares issued as a stock dividend or pursuant to the exercise
of conversion privileges, options (including options under the
Stock Option Plan) or rights previously granted by the
Corporation in accordance with Section 10.3; or
c) the issue of any shares of the Corporation under the exercise
of any warrants or option agreements described in the recitals
to this Agreement.
ARTICLE 11 - DEMAND AND PIGGYBACK REGISTRATION RIGHTS
11.1 a) Each of the Shareholders may, at any time after the completion
by the Corporation of an Initial Public Offering, on its own
or in conjunction with one or more other Shareholders' request
the Corporation in writing (a "Request") to register Shares
owned by such Shareholder(s) under the United States
Securities Act (if, at such time, the Corporation has
previously registered any Shares under the United States
Securities Act). Upon receipt of such Request, subject to the
provisions of Subsection 11.1 (b) hereof, the Corporation
shall use all reasonable efforts to cause the Shares specified
in the Request to be registered or qualified for distribution,
as the case may be in accordance with the following
18
provisions of this Article 11 as soon as reasonably
practicable so as to permit the sale thereof and in connection
therewith prepare and file, in such appropriate form as the
Corporation in its discretion shall determine, a registration
statement under the United States Securities Act to effect
such registration and seek to have such registration statement
become effective as promptly as practicable; provided however,
that each such Request shall: (i) specify the number of Shares
proposed to be offered and sold, (ii) express the present
intention of the Shareholder(s) making the Request to offer or
cause the offering of such Shares for distribution, (iii)
describe the nature or method required by such Shareholder(s)
in respect of the proposed offer and sale thereof and (iv)
contain the undertaking of such Shareholder(s) to provide all
such information and materials and take all such action within
its control and knowledge as may be required in order to
permit the Corporation to comply with all applicable
requirements of the SEC and to obtain any desired acceleration
of the effective date of such registration if applicable. Upon
any registration becoming effective or any Shares becoming
qualified for distribution, as the case may be pursuant to
this Article 11, the Corporation shall use its reasonable
commercial efforts to keep such registration statement or
prospectus, as the case maybe, current for a period of 120
days.
b) The Corporation shall not be required to register any Shares
or qualify any distribution pursuant to Subsection 11.1 (a)
hereof more often than once in any six (6) month period and,
in any event, unless the proposed aggregate sale price of the
Shares specified in the Request is greater than $1,000,000.
c) The Corporation shall be entitled, no more than once in any
twelve (12) month period, to postpone, for a period of time
(which shall not exceed 60 days without the consent of a
majority of the Shareholders who have made a Request (the
"Majority Requesting Shareholders")), the Request for a demand
offering under this Section 11.1 (which postponement shall
also apply for the purposes of Section 11.2) if the
Corporation determines, in the good faith exercise of its
reasonable business judgment, that such Request could
materially interfere with a bona fide financing, acquisition
or other material business plans of the Corporation or would
require disclosure of non-public information, the PREMATURE
disclosure of which could materially, negatively and adversely
affect the Corporation or such transaction. If the Corporation
postpones the demand offering requested under this Section
11.1, the Corporation shall promptly (but not later than three
Business Days following the determination to postpone the
demand offering) notify the Shareholders who have delivered a
Request, as well as the Demanding Shareholders (as hereinafter
defined), if applicable, of the determination to postpone the
demand offering and of the facts on which such determination
is based. If the Corporation postpones the demand offering
requested under this Section 11.1, the Corporation shall
promptly (but not later than three Business Days afterwards)
notify the Shareholders who have delivered a Request, as well
as the Demanding Shareholders (as hereinafter defined), if
applicable, when the events or circumstances permitting such
postponement have ended and at that time shall proceed with
the demand offering as requested and in accordance with this
Agreement. If the Corporation shall postpone the demand
offering pursuant to this Subsection 11.1(c), then any related
Request may thereafter be withdrawn by the Shareholder(s)
giving notice of withdrawal to the Corporation. Upon such
withdrawal, the withdrawn Request shall not count as an
exercise of the demand registration rights granted herein.
11.2 a) If at any time after the completion of an Initial Public
Offering, one or more Shareholder(s) proposes to deliver a
Request to the Corporation (in this Article 11, the "Demanding
Shareholders"), the Demanding Shareholders shall,
contemporaneously with its delivery of a Request to the
Corporation, give written notice (the "Offer Notice") to the
other Shareholders (the "PARTICIPATING SHAREHOLDERS") SETTING
forth the same information asset out in the Request. Upon
receipt of an Offer Notice, the Participating Shareholders
shall be entitled, on written notice (the "Participating
Notice") to the Corporation and the Demanding Shareholder(s),
within ten days after receipt of the Offer Notice, to send
notice to the Corporation and the Demanding Shareholder(s)
specifying the
19
number of Shares which the Participating Shareholder wishes to
have registered under the registration or qualified under the
prospectus referred to in the Request. Upon receipt by the
Corporation of one or more Participating Notices from
Participating Shareholder(s), the Corporation shall, subject
to the provisions of Section 11.2(b) hereof, use all
reasonable efforts to cause the Shares specified in the
Participating Notice(s) to be registered or qualified for
distribution, as the case may be, so as to permit the sale
thereof contemporaneously with the registration or
qualification of the Shares of the Demanding Shareholder
pursuant to its Request in the same manner and on the same
terms and conditions as the Shares of the Demanding
Shareholder.
b) If the underwriter(s) or agent(s) retained by the Demanding
Shareholder(s) in connection with the sale of Shares pursuant
to a registration or qualification referred to in this Article
11, if any, advises that, in its sole opinion, the inclusion
in such registration or qualification of any or all of Shares
proposed to be included by one or more of the Participating
Shareholder(s) as stated in the Participating Notice(s) would
not be appropriate, then the number of Shares of all such
Shareholder(s) to be included in such registration shall be
reduced to such number (including nil) as such underwriter(s)
or agent(s) advises could be included in such registration or
qualification without interfering with the successful
marketing of the Shares proposed to be sold by the Demanding
Shareholder and the Participating Shareholder(s) under such
registration or qualification or the price at which such
Shares would be sold and each Demanding Shareholder and
Participating Shareholder shall be entitled to sell up to its
Proportionate Amount (which for these purposes is the
proportion which the number of Shares beneficially owned by it
bears to the number of Shares owned by all of the Demanding
Shareholders and Participating Shareholders) of the number, if
any, which such underwriter(s) or agent(s) advised would be
able to be sold by such Shareholders without adversely
affecting the successful and profitable marketing of the
Shares proposed to be sold by the Demanding and Participating
Shareholders.
11.3 a) In addition to the rights provided in Sections 11.1 and 11.2
hereof, at any time after the completion of an Initial Public
Offering, the Corporation shall, as soon as reasonably
practicable but in any event not less than 15 days prior to
the filing of any registration statement under the United
States Securities Act relating to the public offering of
Shares or any security of the Corporation convertible into or
exercisable for any Shares, by the Corporation or any of its
shareholders, give written notice of such proposed filing and
of the proposed date thereof to each of the Shareholders who
at such time own at least 5% of the outstanding
fully-participating shares of the Corporation, and if, on or
before the 5th day following the date on which such notice is
given, the Corporation shall receive a written request that
the Corporation include among the securities covered by such
registration statement or prospectus the Shares owned by any
of such Shareholders (or such part thereof proposed by any of
them) for offering for sale in a manner and on terms set forth
in such request, the Corporation shall include such Shares in
such registration statement or prospectus, if filed, so as to
permit such Shares to be sold or disposed of in the manner and
on the terms of the offering thereof set forth in such
request;
b) Notwithstanding the foregoing. if the underwriter(s) or
agent(s) retained by the Corporation in connection with the
proposed public offering, if any, advises at any time that, in
its sole opinion, the inclusion in the proposed offering, of
Shares owned by the Senior Management Group, proposed to be
included in such offering would not be appropriate then the
Senior Management Group shall be deemed to have withdrawn
their respective notices requesting that such Shares be
included in the proposed offering; and
c) Notwithstanding the provisions of Subsection 11.3(a), but
subject to Subsection 11.3(b), if the underwriter(s) or
agent(s) retained by the Corporation in connection with the
proposed offering, if any, advises at any time that, in its
sole opinion, the inclusion in such offering of Shares owned
by
20
the Shareholders proposed to be included in such offering
would not be advisable, then the maximum number of Shares
owned by the Shareholders proposed to be included in such
offering shall be reduced to such number (including nil) as
such underwriter(s) or agent(s), in its sole discretion,
advises could be included in such offering without adversely
affecting the successful and profitable marketing of the
Shares proposed to be issued by the Corporation or the price
at which such Shares would be sold, and each Shareholder shall
be entitled to sell up to its Proportionate Amount (which for
these purposes is the proportion which the number of Shares
beneficially owned by it bears to the number of Shares owned
by all of the Shareholders) of the number, if any, which such
underwriter or agent advised would be able to be sold by such
Shareholders without adversely affecting the successful and
profitable marketing of the Shares proposed to be issued by
the Corporation or the price at which such Shares would be
sold.
d) Notwithstanding Section 11.3 (a) the Corporation shall not be
required to include in the registration statement or
prospectus contemplated by Section 11.3 (a) any shares
requested to be so included by any Shareholder unless the
proposed aggregate sale price of the securities proposed to be
offered by the Corporation and the Shares of the Shareholders
that would otherwise be included in such registration
statement or prospectus is at least $2.5 million;
11.4 The Corporation shall be responsible for the preparation of any
registration statement, prospectus, agreements or documents and related
papers and filings in connection with this Article 11 hereof and except
to the extent otherwise required by law (including, without limitation,
the policies or rules of any applicable securities regulation
authority), shall pay all expenses relating to such registration,
provided however, that each of the Shareholders hereby agrees to be
liable for and pay directly its own legal fees and disbursements, if
any, and any underwriting discounts and commissions applicable to any
sale of Shares by the applicable Shareholder.
11.5 a) In connection with any offering of Shares registered or
qualified pursuant to this Agreement, the Corporation:
(i) shall furnish to each of the Shareholders such number
of copies of any prospectus (including any
preliminary prospectus) or registration statement and
prospectus or registration statement supplement or
amendment as it may reasonably request in order to
effect the offering and sale of Shares to be offered
and sold, but only while the Corporation shall be
required under the provisions of this Agreement to
cause the registration statement or prospectus to
remain current; and
(ii) shall take such action as shall be necessary to
qualify the shares covered by such registration under
such provincial, blue sky or other U.S. state or
Canadian securities laws for offer and sale as the
Shareholder shall reasonably request. If requested in
connection with an offering in accordance with
Section 11.1 or 11.2 hereof the Corporation shall
enter into an underwriting agreement with a
nationally recognized investment banking firm or
firms selected by the Shareholders requesting the
registration of their Shares and approved by the
Corporation (which approval will not be unreasonably
withheld) containing representations, warranties,
indemnities and agreements then customarily included
by an issuer in underwriting agreements with respect
to secondary distributions.
b) In connection with any offering of Shares registered pursuant
to this Agreement, the Corporation shall, subject to
applicable law:
(i) furnish each of the Shareholders requesting the
registration of its Shares, at the Corporation's
expense, with unlegended certificates representing
ownership of the Shares being sold in such
denominations as such Shareholder shall request: and
21
(ii) instruct the transfer agent and registrar of the
Shares to release any stop transfer orders with
respect to the Shares being sold.
11.6 a) In the event of any qualification of Shares pursuant to this
Article 1 I hereof, the Corporation shall hold harmless and
indemnify each of the Shareholders, any of the Shareholders'
officers, directors and employees (collectively, the
"INDEMNIFIED PARTIES") FROM and against any losses, claims,
damages or liabilities to which any of them may be subject
under any applicable securities laws or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact
contained in any prospectus or registration statement under
which such Shares were distributed, or any document incidental
to the qualification or sale of such Shares, or which arise
out of or are based upon the omission or alleged omission to
state therein any material fact required to be stated therein
or necessary to make the statement not misleading, or any
violation by the Corporation of any applicable securities laws
relating to action or inaction required by the Corporation in
connection with such qualification or sale under such
securities laws; provided, however, that the Corporation will
not be liable in any case to any extent that any such loss,
claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or
alleged omission made in any such prospectus, registration
statement or document in reliance upon and in conformity with
information furnished to the Corporation by any of Indemnified
Parties, specifically for use in the preparation thereof.
b) The Shareholders agree to indemnify and hold harmless the
Corporation, and each of its officers, directors, employees
and each person, if any, who controls the Corporation within
the meaning of either Section 15 of the United States
Securities Act, or Section 20 of the United States Exchange
Act, to the same extent as the foregoing indemnity from the
Corporation to the Shareholders, but only with respect to
information furnished in writing to the Corporation by the
Shareholder expressly for use in any registration statement or
prospectus contemplated in this Article 11. This indemnity
agreement SHALL SURVIVE THE TRANSFER of such Shares by the
Shareholder and will be in addition to any liability that the
Shareholder may otherwise have.
c) Each of the Indemnified Parties shall, promptly after receipt
of notice of the commencement of any action against such
Indemnified Party in respect of which indemnity may be sought
pursuant to Subsection 11.6(a) hereof, notify the Corporation
in writing of the commencement thereof. The omission of any
Indemnified Party so to notify the Corporation of any such
action shall not relieve the Corporation from any liability in
respect of such action which it may have to such Corporation
on account of the indemnity pursuant to Subsection I 1.6(a)
hereof unless the Corporation was prejudiced by such omission,
and in no event shall relieve the Corporation from any other
liability which it may have to such Indemnified Party. In case
any such action shall be brought against an Indemnified Party
and it shall notify the Corporation of the commencement
thereof the Corporation shall be entitled to assume the
defense thereof, with counsel satisfactory to such Indemnified
Party, and after notice from the Corporation to such
Indemnified Party of its election so to assume the defense
thereof the Corporation shall not be liable to such
Indemnified Party under Subsection 11.6(a) hereof for any
legal or other expenses subsequently incurred by such
Indemnified Party in connection with the defense thereof other
than reasonable costs of investigation. No admission of
liability shall be made by the Indemnified Party without the
consent of the Corporation. If after having been notified by
the Indemnified Party of the commencement of any action
against such Indemnified Party in respect of which indemnity
may be sought, the Corporation fails to assume the defense of
such suit on behalf of the Indemnified Party within 10 days of
receiving notice thereof, the Indemnified Party shall have the
right to employ counsel in respect of the defense of such suit
and the fees and expenses of such counsel shall be at the
expense of the Corporation.
22
ARTICLE 12 - GENERAL MATTERS
12.1 No AGENCY OR PARTNERSHIP. Nothing contained in this Agreement shall
make or constitute any party the representative, agent, principal or
partner of any other party and it is understood that no party has the
capacity to make commitments of any kind whatsoever or incur
obligations or liabilities binding upon any other party.
12.2 Notice. Any notice, direction or other communication to be given under
this Agreement shall be in writing and given by delivering it or
sending it by telecopy or other similar form of recorded communication
addressed:
If to the Corporation at: B. Twelve, Inc
c/o ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier (▇▇▇) ▇▇▇-▇▇▇▇
If to ▇▇▇▇▇▇ at: ▇▇. ▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to Credifinance at: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier. (▇▇▇) ▇▇▇-▇▇▇▇
If to NRC at: New Researches Corporation
▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇-▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ Woodtli
Telephone: (▇▇▇▇) ▇▇▇ ▇▇▇▇
Telecopier (▇▇▇▇) ▇▇▇ ▇▇▇▇
If to Benarroch: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇-▇-▇▇▇▇▇▇▇▇
If to MacAdam: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Grace Street, P.O. Box 1288 Port
Dover, Ontario
NOA 1 NO
23
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to ▇▇▇▇▇▇: ▇▇. ▇▇▇▇-▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to Lifmac: Lifinac, S.A.
▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇
Attention: ▇▇. ▇. ▇▇▇▇▇▇▇
Telephone: ▇▇-▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇-▇▇-▇▇▇-▇▇▇▇
If to Rupert's Crossing: Rupert's Crossing
1580 Guiness House
727 7'(degree) Avenue S.W.
Calgary, Alberta
T2P OZ5
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
If to Medarex: Medarex, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ #▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President & General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Any such communication shall be deemed to have been validly and
effectively given (i) if personally delivered, on the date of such
delivery if such date is a Business Day and such delivery was made
prior to 4:00 p.m. (Toronto time) and otherwise on the next Business
Day, or (ii) if transmitted by telecopy or similar means of recorded
communication on the Business Day following the date of transmission.
Any Party may change its address for service from time to time by
notice given in accordance with the foregoing and any subsequent notice
shall be sent to such Party at its changed address.
12.3 ENDORSEMENT OF SHARE CERTIFICATES. Any and all certificates
representing Shares now or hereafter beneficially owned by the
Shareholders during the term of this Agreement shall have endorsed
thereon, in bold type, the following legend:
"The securities evidenced by this certificate are subject to
the terms of and disposition and transfer of such securities
is restricted in accordance with, the provisions of an amended
and restated unanimous shareholders' agreement made as of
January 15, 2001 made between the Corporation and each and all
of the holders of shares. A copy of the said agreement,
together with all amendments and
24
supplements thereto, is available for inspection from the
Secretary of the Corporation on request and without charge at
its registered office."
12.4 Assignment. Neither this Agreement nor any rights or obligations
hereunder are assignable by the parties hereto without the prior
written consent of the other parties hereto, subject to the rights of
Shareholders to sell their Shares pursuant to the terms of this
Agreement and provided that the purchaser of such Shares agrees to be
bound hereby. This Agreement shall enure to the benefit of and be
binding upon the parties hereto and their respective heirs, executors,
legal personal representatives, successors and permitted assigns.
COUNTERPARTS AND FACSIMILE. This Agreement may be executed in any
number of counterparts and all such counterparts taken together shall
be deemed to constitute one and the same instrument. Any Party may
execute this Agreement by facsimile which shall be deemed for all
purposes to be an original.
12.6 PUBLICITY. Notwithstanding Section 13.1, NRC, Medarex and Credifinance
shall have their respective right to disclose to whomsoever in any
manner their ownership of shares in the capital of the Corporation and
the debt owing (if any) by the Corporation to them.
ARTICLE 13 - CONFIDENTIALITY ARTICLE
13.1 CONFIDENTIALITY. The parties hereto agree to treat all information,
data, reports and other records ("information") relating to the
Corporation's Business as confidential and will not disclose such
information to any other person other than their legal advisors or
auditors without the prior written consent of the other parties;
provided, however, that no Shareholder shall be liable for any such
disclosure of such information of such Shareholder if such information:
a) becomes generally available to the public other than as a
result of a disclosure by the Shareholder or its
representatives in violation of this Agreement;
b) was available to the Shareholder on a non-confidential basis
without violation of this Agreement prior to its disclosure by
the Corporation or its representatives;
c) becomes available to the Shareholder on a non-confidential
basis without violation of this Agreement from a source other
than the Corporation or its representatives provided that such
source is not bound by a confidentiality agreement with the
Corporation or a duty of confidentiality to or in respect of
the Corporation to the knowledge of the Shareholder; or
d) is required by law to be disclosed by the Shareholder,
provided that the Shareholder first notifies the Corporation
that it believes it is required to disclose such information
and it allows the Corporation a reasonable period of time to
contest the disclosure of such information.
Nothing in this Section or elsewhere in this Agreement shall be
construed so as to prevent or limit Credifinance's ability to issue
news releases or otherwise release or disclose information in
accordance with its obligations pursuant to applicable law as a public
corporation.
25
13.2 Survival. The terms of this Article 13 and of Article 8 shall survive
any termination of this Agreement without limit as to time.
IN WITNESS WHEREOF the Parties have caused this Agreement to be
executed by their respective duly authorized officer.
B. TWELVE, INC. CREDIFINANCE CAPITAL CORP.
Per: /s/ ▇▇. ▇▇▇ ▇▇▇▇▇▇ Per: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------- ---------------------------------
Authorized Signing Officer Authorized Signing Officer
President & CEO
NEW RESEARCHERS CORPORATION LIFMAC, S.A.
Per: /s/ [Illegible] Per: /s/ [Illegible]
------------------------------- ---------------------------------
Authorized Signing Officer Authorized Signing Officer
MEDAREX, INC. RUPERT'S CROSSING
Per: /s/ [Illegible] Per: /s/ [Illegible]
------------------------------- ---------------------------------
Authorized Signing Officer Authorized Signing Officer
/s/ [Illegible] /s/ [Illegible]
----------------------------------- -------------------------------------
Witness ▇▇. ▇▇▇ ▇▇▇▇▇▇
/s/ [Illegible] /s/ [Illegible]
----------------------------------- -------------------------------------
Witness ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ [Illegible] /s/ [Illegible]
----------------------------------- -------------------------------------
Witness ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ [Illegible] /s/ [Illegible]
----------------------------------- -------------------------------------
Witness ▇▇▇▇-▇▇▇ ▇▇▇▇▇▇
26
