EXHIBIT 99.1
SHAREHOLDERS AGREEMENT
AMONG CERTAIN SHAREHOLDERS OF
DRAGON PHARMACEUTICALS INC.
.
.
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TABLE OF CONTENTS
SHAREHOLDERS AGREEMENT
ARTICLE 1 - INTERPRETATION...................................................... 1
1.1 Definitions............................................................ 1
1.2 Sections and Headings.................................................. 2
1.3 Number................................................................. 2
1.4 Schedules.............................................................. 3
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES...................................... 3
2.1 Full Power and Authority............................................... 3
2.2 Execution, Delivery and Performance.................................... 3
2.3 Valid and Binding Agreement............................................ 3
ARTICLE 3 - COOPERATION AMONG SHAREHOLDERS...................................... 3
3.1 General Purpose........................................................ 3
3.2 Committee.............................................................. 3
3.3 Carrying out of the Agreement.......................................... 6
3.4 No Interference with Discretion of Directors........................... 7
ARTICLE 4 - FILING.............................................................. 7
4.1 Filing Pursuant to Applicable Laws..................................... 7
ARTICLE 5 - GENERAL............................................................. 7
5.1 Amendments and Waivers................................................. 7
5.2 Assignment............................................................. 7
5.3 Termination............................................................ 8
5.4 Severability........................................................... 8
5.5 Equitable Remedies..................................................... 8
5.6 Notices................................................................ 8
5.7 Governing Law.......................................................... 9
5.8 Independent Legal Advice............................................... 9
5.9 Execution in Counterparts and by Fax................................... 9
SCHEDULE A NAMES OF SHAREHOLDERS WHO ARE PARTIES TO THIS AGREEMENT.............. A-1
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SHAREHOLDERS AGREEMENT
THIS AGREEMENT is made as of October 17, 2003 among certain shareholders (the
"Shareholders") of DRAGON PHARMACEUTICALS INC. (the "Corporation") whose names
are set out in Schedule A attached hereto.
WHEREAS:
A Each of the Shareholders holds certain shares in the capital of the
Corporation; and
B. Each of the Shareholders have agreed to enter into this Agreement as
being in their respective best interests and for the purpose of
providing for cooperation among the Shareholders in respect of their
shareholdings in the Corporation in order to facilitate the growth and
development of the Corporation and its business.
NOW, THEREFORE, THIS AGREEMENT WITNESSES that in consideration of the premises
and the mutual covenants and agreements herein contained the parties hereto
agree as follows:
ARTICLE 1 - INTERPRETATION
1.1 DEFINITIONS
In this Agreement, unless something in the subject matter or context is
inconsistent therewith:
(a) "Act" means Florida Business Corporation Act;
(b) "Agreement" means this agreement and all Schedules attached
hereto and all amendments made hereto and thereto by written
agreement between the Shareholders;
(c) "Board" means the board of Directors of the Corporation;
(d) "Business Day" means a day other than a Saturday, Sunday or
statutory holiday in British Columbia;
(e) "Common Shares" means shares of common stock of the
Corporation;
(f) "Communication" has the meaning set out in section 5.6;
(g) "Committee" means the committee of Shareholders formed
pursuant to section 3.2;
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(h) "Committee's view" or "Committee's decision" means the view or
decision of a Committee as evidenced by resolutions passed
pursuant to sections 3.2(d) or (e), as applicable;
(i) "Corporation" means Dragon Pharmaceutical Inc., a corporation
incorporated under the Act;
(j) "Directors" means the persons who are, from time to time,
elected or appointed directors of the Corporation and a
"Director" means any one of them;
(k) "Fundamental Matters" means one or more matters specified in
section 3.2(e);
(l) "Person" means any individual, partnership, joint venture,
syndicate, sole proprietorship, company or corporation with or
without share capital, trust, trustee, executor,
administrator, or other legal personal representatives,
regulatory body or agency, government or governmental agency,
authority or entity howsoever designated or constituted;
(m) "Representative" in respect of a Shareholder means the person
named under the heading "Representative and Contact" beside
such Shareholder as set out in Schedule A attached hereto;
(n) "Shareholders" means each of the shareholders named in
Schedule A attached hereto, together with such other persons
as may beneficially own Common Shares and become parties to
this Agreement, collectively, and "Shareholder" means any one
of such persons individually; and
(o) "Shareholders Group" means Shareholders Group A, B, C, D, E or
F specified in Schedule A and "Shareholders Groups" means all
of them.
1.2 SECTIONS AND HEADINGS
The division of this Agreement into Articles and sections and the insertion of
headings are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement. The terms "this Agreement",
"hereof", "hereunder" and similar expressions refer to this Agreement and not to
any particular Article, section or other portion hereof and include any
agreement or instrument supplemental or ancillary hereto. Unless something in
the subject matter or context is inconsistent therewith, references herein to
Articles and sections are to Articles and sections of this Agreement.
1.3 NUMBER
Words importing the singular include the plural and vice versa, words importing
one gender shall include all genders and words importing persons shall include
corporations,
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individuals, partnerships, associations, trusts, unincorporated organizations or
other entities.
1.4 SCHEDULES
The following are the Schedules to this Agreement, which Schedules form a part
hereof:
Schedule A - Names of Shareholders who are party to this
Agreement
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES
Each Shareholder represents and warrants to the other Shareholders that:
2.1 FULL POWER AND AUTHORITY
It has full power and authority to enter into this Agreement and to perform its
obligations hereunder and, where applicable, all corporate and other actions
necessary for its due authorization, execution, delivery, and performance of
this Agreement have been duly taken.
2.2 EXECUTION, DELIVERY AND PERFORMANCE
The authorization, execution, delivery, and performance of this Agreement by it
do not and will not conflict with any other agreement or arrangements to which
it is a party or by which it is bound.
2.3 VALID AND BINDING AGREEMENT
This Agreement constitutes a valid and binding agreement, enforceable against it
in accordance with its terms.
ARTICLE 3 - COOPERATION AMONG SHAREHOLDERS
3.1 GENERAL PURPOSE
The Shareholders agree that the general purpose of their cooperation in
accordance with this Agreement is to create an interested group of shareholders
to hold the management of the Corporation accountable and thereby monitor and
facilitate the advancement of the interests of the Corporation as a whole and to
enhance value to all shareholders of the Corporation.
3.2 COMMITTEE
(a) The Shareholders agree that a committee (the "Committee")
shall be formed to represent their interests, to consider and
form views on matters regarding the Corporation and how best
to protect and enhance
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shareholders' value and to consider and form views on matters
regarding the Corporation requiring shareholders' approval.
(b) Unless the Committee otherwise determines, the Committee shall
be comprised of representatives of the six Shareholders
Groups. Such members of the Committee shall be appointed by
the six Shareholders Groups (namely, A, B, C, D, E and F) as
specified in Schedule A. A member of the Committee appointed
by a Shareholders Group may from time to time be changed by
that Shareholders Group by a written notice of that
Shareholders Group to the other Shareholders Group and such
change shall be effective 10 days after such notice has been
delivered. The initial members of the Committee as of the date
of this Agreement shall be as follows:
(i) Shareholder Group A - Xxxxx Xxxxx;
(ii) Shareholder Group B - Xxx Xxxxx Sun;
(iii) Shareholder Group C - Xxxx Xx;
(iv) Shareholder Group D - Xxxxxx Xxxx;
(v) Shareholder Group E - Xxx Xxx; and
(vi) Shareholder Group F - Xxx Xxxxx Sun
(c) Each member of the Committee shall have the following number
of votes specified below besides his Shareholder Group on all
decisions and resolutions of the Committee:
(i) Shareholder Group A - 1,470;
(ii) Shareholder Group B - 860;
(iii) Shareholder Group C - 1,030;
(iv) Shareholder Group D - 1,550;
(v) Shareholder Group E - 2,220; and
(vi) Shareholder Group F - 2,870
Total Votes - 10,000.
(d) All resolutions (except for resolutions in respect of
Fundamental Matters) of the Committee shall be considered
passed if such resolutions have been approved in writing
(which can be by facsimile) by members of the
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Committee in aggregate holding more than 5,100 votes,
calculated pursuant to section 3.2(c) above.
(e) All resolutions of the Committee in respect of the following
fundamental matters shall be considered passed if such
resolutions have been approved in writing (which can be by
facsimile) by members of the Committee in aggregate holding
more than 6,200 votes calculated pursuant to section 3.2(c)
above, provided that if the resolutions have been approved by
all members of the Committee except one, the resolutions shall
be considered passed:
(i) decisions or forming a Committee's view relating to
approval of the Corporation acquiring, subscribing
for or agreeing to purchase in any transactions or
series of related transactions, any securities or
interest in any Person or participate in any joint
venture or strategic alliance which requires
Shareholders approval;
(ii) decisions relating to approval of the Corporation
selling, transferring or otherwise disposing of all
or substantially all of its property, assets or
undertaking;
(iii) decisions or forming a Committee's view relating to
approval of the Corporation selling, transferring or
otherwise disposing of any substantial part of its
intellectual property or proprietary technology
outside its ordinary course of business;
(iv) decisions relating to approval of the Corporation
engaging in any merge or amalgamation with any other
Person that is not a direct or indirect wholly-owned
subsidiary of the Corporation;
(v) decisions relating to approval of the Corporation
materially changing its business from that being
carried on as at the date of this Agreement;
(vi) decisions or forming a Committee's view relating to
approval of the Corporation issuing or agreeing to
issue Securities which pursuant to applicable
corporate or securities legislation or rules of the
relevant stock exchange would require shareholders'
approval;
(vii) decisions or forming a Committee's view relating to
approval of the Corporation making any material
amendment, alteration, adoption to, or repeal, any
provision in its Articles, By-laws or any changes its
jurisdiction of existence; or
(viii) decisions or forming a Committee's view relating to
approval of the Corporation instituting any
proceeding for its liquidation,
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dissolution, winding-up or reorganization or file any
plan of arrangement under any statute or enter into
any transaction or scheme in furtherance thereof.
(f) In the event that any Shareholder within a Shareholder Group
for which a member of the Committee represents is determined
by a Committee's decision by 51% of the votes held by other
members of the Committee (excluding the votes held by that
member), to have a conflicting interest in a resolution to be
voted on by the Committee or the underlying matter, that
member ("Conflicting Member") whose Shareholders Group is
determined to have a conflicting interest shall abstain from
voting on that resolution and that resolution shall be
considered to be passed if it is approved by members of the
Committee (other than the Conflicting Member) in aggregate
holding 51% of the votes held by all members of the Committee
other than the Conflicting Member, provided that if the
resolution relates to a Fundamental Matter, the resolution
shall be considered to be passed if it is approved by members
of the Committee (other than the Conflicting Member) in
aggregate holding 62% of the votes.
(g) The Shareholders agree that the Committee shall have power and
capacity to pass resolutions of any type or content as it
deems appropriate in connection with the Corporation and the
Shareholder's interests and rights therein, including but not
limited to resolutions evidencing the Committee's view or
decision on:
(i) how voting rights attached to the Common Shares owned
by the Shareholders should be exercised in relation
to election or removal of Directors, transactions
involving the Corporation or any other business or
matters concerning the Corporation for which
shareholders' approval or view is relevant;
(ii) how other rights and power attached to the Common
Shares owned by the Shareholders should be exercised;
and
(h) Any member of the Committee is eligible to propose or move
resolutions to be considered by the Committee by giving
written notice to other members of the Committee at least
seven days before the proposed effective date of such
resolutions.
3.3 CARRYING OUT OF THE AGREEMENT
The Shareholders shall at all times promptly:
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(a) vote all their respective Common Shares (or if more
convenient, execute written power of attorney or proxies as
requested by the Committee's decision); and
(b) take all such steps as may be reasonably within their powers,
including executing and delivering to the Committee powers of
attorney in respect of all rights attached to the Common
Shares owned by the Shareholders as requested by the
Committee;
so as to fully implement the Committee's decision and the terms of this
Agreement.
3.4 NO INTERFERENCE WITH DISCRETION OF DIRECTORS
Nothing in this Agreement is intended to interfere with or in any way affect or
xxxxxx the discretion of the Board or individual Directors of the Corporation
and it is hereby acknowledged by all parties that any member of the Committee
who also happens to be a Director of the Corporation shall have full and
unfettered discretion in exercising his power or duties as a Director of the
Corporation and no provision under this Agreement shall or shall be construed to
amount to fettering of or in any way affecting the exercise of such discretion
or power or performance of such duty by a Director of the Corporation.
ARTICLE 4 - FILING
4.1 FILING PURSUANT TO APPLICABLE LAWS
The parties agree to complete, provide information, execute and file all forms,
documents or instruments required by applicable laws in relation to the
execution of this Agreement and matters related thereto, including but not
limited to Form 13D or 13G required under the Securities Xxxxxxxx Xxx 0000 and
all parties hereto shall cooperate with each other to effect such required
filing within the required period and share the costs associated with such
filings and compliance.
ARTICLE 5 - GENERAL
5.1 AMENDMENTS AND WAIVERS
No amendment to this Agreement shall be valid or binding unless set forth in
writing and duly executed by all parties hereto. No waiver of any breach of any
provision of this Agreement shall be effective or binding unless made in writing
and signed by the party purporting to give the same and, unless otherwise
provided in the written waiver, shall be limited to the specific breach waived.
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5.2 ASSIGNMENT
Except as otherwise provided herein, none of the parties hereto may assign such
party's rights or obligations under this Agreement without the prior written
consent of all of the other parties hereto.
5.3 TERMINATION
This Agreement shall terminate upon:
(a) the written agreement of all of the Shareholders;
(b) the dissolution or bankruptcy of the Corporation or the making
by the Corporation of an assignment under the provisions of
the Bankruptcy and Insolvency Act (Canada); or
(c) the date which is upon the expiry of 24 months from the date
of this Agreement.
5.4 SEVERABILITY
If any provision of this Agreement is determined to be invalid or unenforceable
in whole or in part, such invalidity or unenforceability shall attach only to
such provision or part thereof and the remaining part of such provision and all
other provisions hereof shall continue in full force and effect and the parties
will use their best efforts to substitute for any provision that is invalid,
illegal or unenforceable in any jurisdiction a valid and enforceable provision
which achieves to the greatest possible the economic, legal and commercial
objectives of such invalid, illegal or unenforceable provision of this Agreement
and, failing agreement of the parties on such a substitution within 30 days
after the finding of the court, arbitrator or Governmental Authority, any party
may refer the matter for dispute in the Court.
5.5 EQUITABLE REMEDIES
Each party to this Agreement consents to the granting of specific performance
and injunctive or other equitable relief to each other party to this Agreement
in respect of any actual or threatened breach of this Agreement, without proof
of actual damages.
5.6 NOTICES
Any demand, notice or other communication (a "Communication") to be given in
connection with this Agreement shall be given in writing and may be given by
personal delivery, by registered mail or by transmittal by fax addressed to the
recipient at addresses as specified in writing by each of the parties hereunder
on the date of this Agreement or to such other address, fax number or individual
as may be designated by notice by any party to the other from time to time. Any
Communication given by personal delivery shall be conclusively deemed to have
been given on the day of actual
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delivery thereof (or the next Business Day if such day is not a Business Day)
and, if given by registered mail, on the 5th Business Day following the deposit
thereof in the mail and, if given by fax, on the day of transmittal thereof
(or the next Business Day if such day is not a Business Day). If the party
giving any Communication knows or ought reasonably to know of any difficulties
with the postal system which might affect the delivery of mail, any such
Communication shall not be mailed but shall be given by personal delivery or by
fax.
5.7 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of
the Province of British Columbia.
5.8 INDEPENDENT LEGAL ADVICE
Each of the parties hereto acknowledges that they have jointly retained XxXxxxxx
Xxxxxxxx LLP to draft this Agreement and they have been advised that they may
wish to seek independent legal advice with respect to the execution of this
Agreement and all related documentation and each party confirms that it does not
require or it does not wish to seek independent legal advice and such party
enters into this Agreement by such party's own free will and voluntarily without
any coercion or duress or influence, having been imposed upon such party by any
of the parties hereto.
5.9 EXECUTION IN COUNTERPARTS AND BY FAX
This Agreement may be executed in multiple counterparts and by fax and each such
executed counterpart shall be deemed an original for all purposes and all of
which together shall constitute one and the same Agreement.
IN WITNESS WHEREOF the parties have executed this Agreement.
THE DS FAMILY TRUST
Per: /s/ Xxxxx Xxxxx
___________________________________
Name: Xxxxx Xxxxx
Title: Trustee
LI & FANG ENTERPRISES LTD.
Per: /s/ Xxxxx Xxxxx
___________________________________
Name: Xxxxx Xxxxx
Title: Authorized Person
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/s/ Xxxxx Xxx Lung
___________________________________
XXXXX XXX LUNG
YUKON HEALTH ENTERPRISES LIMITED
Per: /s/ Sun Xxx Xxxxx
______________________________
Name: Sun Xxx Xxxxx
Title: Director
/s/ Xxxxx En Xxx Xx
___________________________________
XXXXX EN XXX XX
/s/ Xxxxx Xxxx Xxx Xxx
___________________________________
XXXXX XXXX XXX XXX
FAITH EQUITY LIMITED.
Per: /s/ Xxxxxx Xxxx Zen
______________________________
Name: Xxxxxx Xxxx Zen
Title: Director
GLOBAL EQUITIES OVERSEAS LIMITED
Per: /s/ Xxxxxx Xxxx
______________________________
Name: Xxxxxx Xxxx
Title: Director
GOLDPAC INVESTMENT PARTNERS LTD.
Per: /s/ Xxx Xxx
______________________________
Name: Xxx Xxx
Title: Authorized Signatory
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CHOW TAI FOOK NOMINEE LIMITED
Per: /s/ Xxxxx Xxx Xxx
___________________________________
Name: Xxxxx Xxx Pui
Title: Director
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SCHEDULE A
NAMES OF SHAREHOLDERS WHO ARE PARTIES TO THIS AGREEMENT
Shareholder Group
Name of Shareholder to which it belongs Representative
------------------- ------------------- --------------
The DS Family Trust A Xxxxx Xxxxx
Li & Fang Enterprises Ltd. A Xxxxx Xxxxx
Xxxxx Xxx Lung A Xxxxx Xxxxx
Yukon Health Enterprises Limited B Xx. Xxx Xxxxx Sun
Xxxxx Xx Xxx Xx C Xxxx Xx
Xxxxx Xxxx Xxx Xxx C Xxxx Xx
Faith Equity Limited D Xxxxxx Xxxx
Global Equities Overseas Limited D Xxxxxx Xxxx
Goldpac Investment Partners Ltd. E Xxx Xxx
Chow Xxx Xxxx Nominee Limited F Xx. Xxx Xxxxx Sun
A-1
