Shareholders Agreement - Infectio Diagnostic Inc., Cepheid and Aridia Corp.
SHAREHOLDERS AGREEMENT entered into as of the 4th day of February, 2000.
BETWEEN INFECTIO DIAGNOSTIC (I.D.I.) INC., a corporation incorporated under the
laws of the Province of Quebec ("IDI")
AND CEPHEID, a corporation incorporated under the laws of the state of
California ("Cepheid")
AND ARIDIA CORP., a corporation incorporated under the laws of the Province
of Nova Scotia ("Corporation")
WHEREAS the Corporation is a company incorporated under the Nova Scotia
Companies Act by Certificate of Incorporation dated the 4th day of February,
2000, and is qualified as a Nova Scotia Unlimited Liability Company;
WHEREAS the share capital of the Corporation consists of a limited number of
1,000,000 common shares of which 200 common shares have been issued and are
presently outstanding and registered as follows:
<TABLE>
<CAPTION>
NAME COMMON SHARES
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<S> <C>
IDI 100
Cepheid 100
</TABLE>
WHEREAS IDI and the Corporation have entered concurrently with the execution of
this Agreement into a License and Supply Agreement;
WHEREAS Cepheid and the Corporation have entered concurrently with the execution
of this Agreement into a License and Supply Agreement;
WHEREAS the parties wish to enter into this Agreement in order to record their
mutual understanding as to the manner in which the 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
INTERPRETATION
1.1 DEFINITIONS
The capitalized words and expressions used in this Agreement or in its
Schedules, or in any deed or agreement supplemental or ancillary hereto,
unless there be something in the subject or the context inconsistent
therewith, shall have the meanings respectively:
"AFFILIATE" shall mean any corporation or other business entity controlled
by or in common Control of a party. "Control" as used herein means
ownership directly or through one or more Affiliates, of fifty percent
(50%) or more of the shares of the share capital entitled to vote for the
election of directors, in the case of any corporation, or fifty percent
(50%) or more of the equity interests in the case of any other type of
legal entity, status as a general partner in any partnership, or any other
arrangement whereby a party controls or has the right to control the board
of directors or equivalent governing body of a corporation other entity.
"AUDITORS" means the auditors of the Corporation appointed pursuant to the
provisions of Section 3.6 hereof;
"BOARD" means the board of directors of the Corporation;
"BUSINESS DAY" means any day excluding Saturday, Sunday and any other day
which in the city of Quebec, Canada or in the State of California is a
legal holiday or a day on which financial institutions are authorized by
law or by local proclamation to close;
"CEPHEID DIRECTOR" means the Directors appointed pursuant to the
provisions of subsection 3.2.1 hereof;
"CEPHEID LICENSE" means the License and Supply Agreement between Cepheid
and the Corporation dated February 4, 2000;
"COLLABORATION AGREEMENT" means the Joint Technology and Collaboration
Agreement between IDI, Cepheid and the Corporation dated February 4, 2000;
"CONTROL" means ownership directly or through one or more Affiliates, of
fifty percent (50%) or more of the shares of the share capital entitled to
vote for the election of directors, in the case of any corporation, or
fifty percent (50%) or more of the equity interests in the case of any
other type of legal entity, status as a general partner in any
partnership, or any other arrangement whereby a party controls or has the
right to control the board of directors or equivalent governing body of a
corporation or other entity;
"DIRECTOR" or "DIRECTORS" means a member or the members of the Board;
"EFFECTIVE DATE" means February 4, 2000;
"FISCAL YEAR" shall have the meaning ascribed to such term in Section
3.2.8 hereof;
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"HEADS OF AGREEMENT" means the Heads of Agreement between IDI and Cepheid
dated August 5, 1999;
"IDI DIRECTORS" means the directors appointed pursuant to the provisions
of subsection 3.2.1 hereof;
"IDI LICENSE" means the License and Supply Agreement between IDI and the
Corporation dated February 4, 2000;
"LIEN" means any interest in property or the income or profits therefrom
securing an obligation owed to, or a claim by, a Person other than the
owner (which for the purposes hereof shall include a possessor under a
title retention agreement and a lessee under a lease hereinbelow
described) of such property, whether such interest is based on civil law,
common law, statute or contract, and including but not limited to any
security interest, hypothec, mortgage, pledge, lien, claim, charge,
cession, transfer, assignment, encumbrance, title retention agreement,
lessor's interest under a lease which would be capitalized on a balance
sheet of the owner of such property or analogous interest in, of or on any
property or the income or profits therefrom of a Person;
"PERSON OR PERSON" means any individual, company, corporation,
partnership, firm, trust, sole proprietorship, government or entity
howsoever designated or constituted;
"SHARES" means shares in the share capital of the Corporation which have
been issued and are outstanding at any time and from time to time;
"SHAREHOLDERS" means the parties to this Agreement and each Person to whom
any Shares may at any time and from time to time be issued, each
transferee of Shares and the respective representatives, administrators,
successors and assigns of each of the above-mentioned Persons;
"THIS AGREEMENT", the "AGREEMENT", "HERETO", "HEREIN", "HEREBY",
"HEREUNDER" and similar expressions mean or refer to this Shareholders
Agreement as amended from time to time and any indenture, agreement or
instrument supplemental or ancillary hereto or in implementation hereof,
and the expressions "SECTION", "SUBSECTION" and "CLAUSE" followed by a
number or letter mean and refer to the specified section, subsection or
paragraph of this Agreement;
1.2 GENERAL INTERPRETATION
Unless there be something in the subject or the context inconsistent
therewith, words importing the singular only shall include the plural and
vice versa, and words importing the masculine gender shall include the
feminine gender, and vice versa, and all references to dollars shall mean
Canadian dollars, the legal currency of Canada.
1.3 DIVISION INTO ARTICLES
The division of this Agreement into articles, sections, subsections,
paragraphs and subparagraphs and the insertion of titles are only meant to
be reference and do not affect the meaning or the interpretation of this
Agreement.
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1.4 ACCOUNTING PRINCIPLES
All calculations required to be made under the terms hereof and all
financial statements shall be prepared in accordance with the generally
accepted accounting principles applied in Canada on a consistent basis.
1.5 GOVERNING LAW
This Agreement and the interpretation and enforcement thereof shall be
governed by the laws of the Province of Quebec without regard to any
conflicts of law principles and the federal laws of Canada applicable
therein.
ARTICLE 2
PURPOSE OF THE CORPORATION
2.1 PURPOSE OF THE CORPORATION
The Corporation was created by IDI and Cepheid in order to engage
primarily in the business of developing, producing and exploiting a series
of innovative human diagnostic systems and products for rapid
identification of pathogens responsible for human infectious diseases
based on the integration of proprietary technologies of IDI and Cepheid.
ARTICLE 3
ORGANIZATION AND MANAGEMENT OF THE CORPORATION
3.1 SHAREHOLDERS
The Shareholders shall each vote all Shares from time to time held by each
of them and otherwise exercise their rights as Shareholders and, to the
extent permitted by applicable law, cause their respective nominees to the
Board to act, so that at all times the general provisions of the by-laws
and the conditions, restrictions, limitations and prohibitions on the
business and corporate affairs of the Corporation set forth in this
Agreement shall apply and be given full effect.
3.2 GENERAL BY-LAWS
The Articles of Association of the Corporation shall provide for the
following continuing provisions with respect to the organization and
management of the Corporation:
3.2.1 Number of Directors
The Board shall consist of 6 Directors who shall be nominated and
elected as follows:
(a) IDI shall be entitled to nominate and have elected 3 Directors
(the "IDI Directors"); and
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(b) Cepheid shall be entitled to nominate and have elected 3
Directors (the "Cepheid Directors").
3.2.2 Meetings of Directors
Subject to the provisions of applicable law, the following
procedures shall apply to meetings of Directors of the Corporation
(a) Regular meetings of the Board shall be held at least 4 times
per year, with a minimum period of 2 months and a maximum
period of 3 months between each meetings. Other meetings of
the Board shall be held at such time as may be requested by
any Director;
(b) A meeting of the Board may be called by any Director, provided
at least 3 Business Days prior written notice is sent to all
Directors. A Director may waive notice of a meeting of the
Board, and the attendance of a Director at a meeting shall
constitute a waiver of notice of the meeting (except where a
Director attends a meeting for the express purpose of
objecting to the transaction of business on the grounds that
the meeting is not properly called) Meetings may be held by
conference telephone call;
(c) A quorum of a meeting of the Board shall consist of 6
Directors;
3.2.3 Unanimous Vote to Govern - Directors' Meetings
All decisions of the Board shall be decided by the unanimous vote of
all the Directors present in person.
3.2.4 Ostensible Authority
No officer or Director of the Corporation may enter into any
contract for or on behalf of the Corporation which involves the
payment or obligation by the Corporation of an aggregate amount in
excess of $10,000, or has an aggregate term (including any renewal
term or extended term) of more than 12 months, without the prior
approval of the Board, evidenced by resolution of the said Board.
The Shareholders shall take the appropriate measures to ensure that
the officers and the Directors of the Corporation comply with this
provision.
3.2.5 Business transaction
Until any vacancy on the Board is filled in accordance with Section
3.4, the Directors shall not transact any business.
3.2.6 Meetings of Shareholders
A meeting of the Shareholders may be called by the Board, provided
at least 10 Business Days prior written notice is sent to the
Shareholders. A Shareholder may waive notice of a meeting of the
Shareholders, and the attendance of a Shareholder at a meeting shall
constitute a waiver of notice of the meeting (except where a
Shareholder attends a meeting for the express purpose of objecting
to the transaction of business on the grounds that the meeting is
not properly called).
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3.2.7 Quorum of Meetings of Shareholders
A quorum of a meeting of the Shareholders of the Corporation shall
consist of all the Shareholders.
3.2.8 Fiscal Year
The fiscal year end of the Corporation shall be December 31 of each
year.
3.2.9 Amendment or repeal
The Directors shall not make, amend or repeal any by-laws except if
the Shareholders have unanimously voted for such by-law, amendment
or repeal.
3.3 FIRST DIRECTORS
The first IDI Directors shall be:
Dr. Michel. G. Bergeron
Dr. Pierre Coulombe
Mr. Jacques Millette
and the first Cepheid Directors shall be:
Mr. Thomas L. Gutshall
Mr. Cris McReynolds
Dr. Kurt Petersen.
3.4 ELECTION, REMOVAL AND VACANCIES
The Shareholders shall each vote the Shares from time to time held by each
of them and otherwise exercise their rights to ensure that Directors are
elected or appointed and maintained in office and vacancies on the Board
are filled in conformity with the provisions of Section 3.2.1 hereof. Each
of the Shareholders shall have the right to remove any Director previously
proposed by it and, if requested to do so, the other Shareholder shall
vote the Shares from time to time held by it for the removal of any such
Director and in favor of any substitute proposed by the Shareholder
requesting such removal.
3.5 OFFICERS
The officers of the Corporation shall be:
Dr. Pierre Coulombe President
Mr. Thomas L. Gutshall Chairman of the Board
Mr. Francois Duchesneau Secretary
and such other officers as may be appointed from time to time by the
Board. The officers of the Corporation shall be appointed annually.
3.6 AUDITOR
PricewaterhouseCoopers LLP shall be the auditors of the Corporation. Each
of the Shareholders may from time to time request the auditors to perform,
at the cost of such Shareholder, accounting and auditing tasks in addition
to those functions that the auditors would ordinarily perform.
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3.7 ACCOUNTING
The books of account and all other financial records of the Corporation
shall be kept and maintained at all times at the principal business office
of the Corporation in the Province of Quebec. The Shareholders, or their
agents, representatives and employees, shall be entitled to have access to
and inspect all such books and records during normal business hours. They
shall also be entitled, at their own expense, to obtain copies of such
books and records.
3.8 CORPORATION
The Corporation agrees to carry out and be bound by the provisions of this
Agreement as it applies to it to the fullest extent permitted by law.
3.9 UNITED STATES TAX STATUS
The Corporation shall make any election requested by Cepheid regarding its
status as a corporation or a partnership for United Sates tax purposes.
ARTICLE 4
RESTRICTIONS ON TRANSFER OF SHARES AND EXIT RIGHTS
4.1 GENERAL RESTRICTION ON TRANSFER
No Shareholder may sell, transfer, alienate or otherwise dispose or divest
itself of or create, incur, assume or suffer to exist any Lien on all or
part of its Shares except in conformity with the provisions of this
Article 4.
4.2 EXIT RIGHTS
Each of the Shareholders (the "Petitioner") shall be entitled at any time
after 18 months after the Effective Date to send a written notice to the
other Shareholder and the Corporation requesting the winding up of the
Corporation (the "Winding up Notice"). The Shareholders and the
Corporation agree in advance that the winding up of the Corporation shall
be effective 6 months after the receipt by the other Shareholder and the
Corporation of the Winding up Notice.
4.3 EFFECT OF WINDING UP NOTICE
Upon the receipt by the other Shareholder and the Corporation of a Winding
up Notice, the other Shareholder and the Corporation shall have 30 days to
notify in writing the Petitioner that they will collaborate to wind up the
Corporation, in which case the winding up of the Corporation shall be
effective 180 days after receipt of the Winding up Notice.
4.3.1 Rules of voluntary winding up
If the other Shareholder and the Corporation have agreed to
collaborate to voluntary wind up the Corporation, the following
rules shall apply:
(a) The Shareholders and the Corporation shall take all acts
necessary or useful to voluntary wind up the Corporation
within 180 days after the receipt of the Winding up Notice.
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(b) The Corporation shall carry on business until 180 days after
receipt by a Shareholder and the Corporation of the Winding up
Notice. At the expiration of the 180 day period, the
Corporation shall cease to carry on business except to the
extent necessary for the finalization of the winding up of the
Corporation.
(c) During the 180 day period, the Corporation shall take all
appropriate measures to complete the sale of any Collaborative
Products and Products to third party pursuant to any then
outstanding agreements and the Shareholders agree to negotiate
in good faith to restructure any agreements to which the
Corporation was a party for the distribution and sale of the
Collaborative Products and Products or to put in place new
agreements to enable continued supply of the Collaborative
Products and Products sold by the Corporation to a third party
distributor after the Corporation has ceased to carry on
business.
4.3.2 Expiration of the 180 day period
At the expiration of the 180 day period:
(a) The Corporation shall cease to use IDI Intellectual Property
and Cepheid Intellectual Property.
(b) IDI shall have a fully paid-up, worldwide license under
Cepheid Intellectual Property to use, offer to sell and sell
products based upon Cepheid Intellectual Property in the
Field, which license shall be in conformity with the terms and
conditions of the Cepheid License.
(c) Cepheid shall have a fully paid-up worldwide license under IDI
Intellectual Property to use, offer to sell and sell products
based upon IDI Intellectual Property in the Field, which
license shall be in conformity with the terms and conditions
of the IDI License.
(d) Cepheid and IDI will negotiate in good faith for supply
agreements pursuant to which IDI would supply Cepheid with IDI
Products and Cepheid would supply IDI with Cepheid Products.
4.4 APPLICATION TO THE COURT
If the other Shareholder and/or the Corporation have (i) failed within the
30 day period set forth in Subsection 4.3.1 to notify the Petitioner that
they will collaborate in the winding up of the Corporation, (ii) notified
the Petitioner that they will not collaborate in the winding up of the
Corporation, or (iii) notified the Petitioner that they will collaborate
in the winding up of the Corporation but failed to do so at the
satisfaction of the Petitioner, then the parties hereby irrevocably agree
that upon application to the Trial Division of the Supreme Court of the
Province of Nova Scotia, the Court shall render an order for winding up of
the Corporation according to the rules set forth in Section 4.3 and in
accordance with the Companies Winding Up Act (Nova Scotia).
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4.5 SALE, MERGER AND ACQUISITION OF CONTROL
In addition to the Exit Rights provided in Section 4.2 and following, a
Shareholder may send at any time a Winding up Notice to the other
Shareholder and the Corporation in the event of (i) the transfer or sale
of all or substantially all of the asset of the other Shareholder, (ii)
the merger of the other Shareholder with a third party; (except for
mergers solely for the purpose of changing the legal domicile of a party)
or (iii) the acquisition by a third party of the Control of the other
Shareholder and the provisions of Sections 4.3 and 4.4 shall apply to any
such Winding up Notice.
4.6 NO REGISTRATION
Without prejudice to any other recourses that may be exercised in such a
case, any Lien created, incurred, assumed or suffered to exist, directly
or indirectly, in contravention of this Agreement, and any sale, transfer,
assignment, alienation or other disposition of the Shares effected in
contravention hereof (whether directly or indirectly) shall, for all
intents and purposes, with regard to the other Shareholder and the
Corporation, be null, void and without effect and shall not be registered
in the books of the Corporation, any such registration being without
effect
4.7 LEGEND OF SHARE CERTIFICATES
All of the share certificates of the share capital of the Corporation
shall bear the following conspicuous inscription:
"Ownership, conveyance and encumbrance of the Shares represented by
this certificate are subject to the terms of the Shareholders
Agreement dated February 4, 2000."
4.8 DEFINITIONS
All terms used in this Article 4 which are defined in the Collaboration
Agreement, the IDI License and the Cepheid License are used herein with
the meanings defined therein.
ARTICLE 5
CONFIDENTIALITY
5.1 UNDERTAKING
The Shareholders hereby acknowledge and agree that they have been and will
be given access to or otherwise come into contact with information
relating to the businesses, operations, properties, assets, liabilities
and financial conditions of the Corporation, of business partners of the
Corporation, of a Shareholder or of a shareholder of a Shareholder,
including without limitation, information relating to business plans and
ideas, trade secrets, invention, processes, methods, know-how, policies,
materials, results of operations, financial and statistical information,
personnel data and customer, supplier and price lists, which are
considered by
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the Corporation, the business partner of the Corporation, the Shareholder
or the shareholder of a Shareholder, as the case may be, to be valuable,
secret and confidential (hereinafter referred to as the "Confidential
Information"). Each of the Shareholders hereby agrees that it will not,
for any purpose, at any time that it is a Shareholder and for a period of
5 years following the date upon which it ceases to be a Shareholder, allow
one of its shareholders, directors, officers, employees or agents during
the same period, to make public, disclose, divulge, furnish, transfer,
sell, release or otherwise make available to any Person, firm,
association, partnership, syndicate, company or corporation any of the
Confidential Information or otherwise use any of the Confidential
Information or allow any of the Confidential Information to be used for
any purpose other than, during the period during which a party hereto
remains a Shareholder, for the purposes of advancing the interests of and
for the entire benefit of the Corporation.
The foregoing non-use and non-disclosure obligations assumed by each party
shall not apply to information which (i) was in its possession prior to
the date of execution of the Heads of Agreement, (ii) is disclosed to it
by a third party not bound by obligations of confidentiality to the party
disclosing the information or to any third party, or (iii) is generally
available to the public.
5.2 SURVIVAL
The undertaking set forth in Section 5.1 shall survive and continue in
full force the winding up of the Corporation.
ARTICLE 6
MISCELLANEOUS
6.1 SUCCESSORS AND 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, successors assigns and each and every
Person so bound shall make, execute and deliver all documents necessary to
carry out this Agreement.
6.2 NOTICES
Any notice or other communication to be given hereunder may be effectively
given to a party by delivering the same at the addresses hereinafter set
forth or by sending the same by prepaid registered mail, prepaid courier
or telecopy or e-mail (in the case of telecopy or e-mail with confirmation
of receipt) to such party at such addresses. Any notice so mailed shall be
deemed to have been received on the third Business Day following the
mailing thereof and if given by delivery or telecopy the same shall be
deemed to have been received upon delivery or upon transmission. The
mailing and telecopy address of the parties for the purpose hereof shall
be:
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(a) as to the Corporation:
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Aridia Corp.
2050 Rene-Levesque Blvd. West
4th floor
Sainte-Foy, Quebec
G1V 2K8
Attention: Dr. Pierre Coulombe
Facsimile: (418) 681-5254
And copy to: Thomas L. Gutshall
Facsimile: (408) 541-4192
(b) as to IDI:
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Infectio Diagnostic (I.D.I.) Inc.
2050 Rene-Levesque Blvd. West
4th floor
Sainte-Foy, Quebec
G1V 2K8
Attention: Dr. Pierre Coulombe
Facsimile: (418) 681-5254
(c) as to Cepheid:
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Cepheid
1190 Borregas Avenue
Sunnyvale, CA, 94089-1302
Attention: Thomas L. Gutshall
Facsimile: (408) 541-4192
6.3 WAIVERS
The rights and remedies of the Shareholders under this Agreement shall be
cumulative and not exclusive of any rights or remedies which they would
otherwise have and no failure or delay by any Shareholder in exercising
any right shall operate as a waiver thereof, not shall any single or
partial exercise of any power or right preclude its other or further
exercise or the exercise of any other power or right.
6.4 AMENDMENTS
This Agreement may be amended only by written agreement duly executed by
all the parties hereto.
6.5 TIME OF ESSENCE
Time shall be of the essence of this Agreement.
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6.6 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.
6.7 SEVERABILITY
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof in that jurisdiction or affecting the validity
or unenforceability of such provision in any other jurisdiction.
6.8 REPLACEMENT OF HEADS OF AGREEMENT
The present Agreement replaces and supersedes the Heads of Agreement and
all other verbal or oral agreements, understandings and undertakings
between the parties hereto relating to the transaction contemplated
herein.
6.9 LANGUAGE
The parties hereto have expressly required that this Agreement and all
deeds, documents and notice relating thereto be drafted in the English
Language. Les parties aux presentes ont expressement exige que la presente
convention et tous les autres contrats, documents ou avis qui y sont
afferents soient rediges en langue anglaise.
6.10 CONFLICT
In the event of any conflict between the provisions of this Agreement on
the one hand and the Memorandum and Articles of Association on the other,
the provisions of this Agreement shall govern. Each Shareholder agrees to
vote or cause to be voted the Shares owned by him as necessary so as to
cause the Memorandum and Articles of Association to be amended to resolve
any such conflict in favor of the provisions of this Agreement.
IN WITNESS WHEREOF this Agreement has been executed on the date
hereinabove first set forth.
INFECTIO DIAGNOSTIC (I.D.I.) INC. ARIDIA CORP.
Per: /s/ DR. PIERRE COULOMBE Per: /s/ DR. PIERRE COULOMBE
---------------------------- -----------------------------
Dr. Pierre Coulombe Dr. Pierre Coulombe
CEPHEID
Per: /s/ THOMAS L. GUTSHALL
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Thomas L. Gutshall
Per: /s/ THOMAS L. GUTSHALL
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Thomas L. Gutshall