**Exhibit 1.2**

** **

**LES LABORATOIRES ÆTERNA INC.**

 

**CODE OFGENERAL BY-LAWS**

 

enacted in accordance with the provisionsof the *Canada Business Corporations Act*

 

Adopted on November 29, 1995

 

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**CODE OF GENERAL BY-LAWSOF THE CORPORATION**

** **

**TABLE OF CONTENTS**

 
|                            | **Page** |
|---------------------------------|----------|
|                            |     |
| **DEFINITIONS**                 |     |
|                            |     |
| **OFFICES  AND CORPORATE SEAL** |     |
|                            |     |
|                            | 1.       | Offices | 1 |
|                            | 2.       | Seal | 1 |
|                            |     |   |
| **SHAREHOLDERS**                |     |
|                            |     |
|                            | 3.       | Annual  Meetings | 2 |
|                            | 4.       | Special  Meetings | 2 |
|                            | 5.       | Place of  Meetings | 2 |
|                            | 6.       | Notice of  Meetings | 3 |
|                            | 7.       | Chairman | 4 |
|                            | 8.       | Quorum | 4 |
|                            | 9.       | Representation  at Meetings | 4 |
|                            | 10.      | Voting | 5 |
|                            | 11.      | Procedure at  Meetings | 6 |
|                            | 12.      | Scrutineers | 6 |
|                            | 13.      | Subsequent  Transferees | 6 |
|                            | 14.      | Addresses of  Shareholders | 6 |
|                            | 15.      | Signed  Resolution | 6 |
|                            |     |   |
| **BOARD  OF DIRECTORS**         |     |
|                            |     |
|                            | 16.      | Number | 7 |
|                            | 17.      | Election and  Term of Office | 7 |
|                            | 18.      | Vacancy | 7 |
|                            | 19.      | Replacement | 7 |
|                            | 20.      | Qualities  Required | 8 |
|                            | 21.      | Meetings and  Notices | 8 |
|                            | 22.      | Participation  by Technical Means | 9 |
|                            | 23.      | Quorum | 9 |
|                            | 24.      | Resignation | 9 |
|                            | 25.      | Removal | 9 |
|                            | 26.      | Remuneration | 9 |
|                            | 27.      | Signed  Resolutions | 10 |

 

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|                                           | 28.    | Powers of  Directors                          | 10 |
|------------------------------------------------|--------|-----------------------------------------------|----|
|                                           | 29.    | Irregularity                                  | 10 |
|                                           | 30.    | Power to  Allot Stock and Grant Options       | 10 |
|                                           | 31.    | Power to  Declare Dividends                   | 10 |
|                                           | 32.    | Use of  Property or Information               | 10 |
|                                           | 33.    | Conflicts of  Interest                        | 11 |
|                                           | 34.    | Contracts  with the Company                   | 11 |
|                                           |   |                                          |
| **MANAGEMENT**                                 |   |
|                                           |   |
|                                           | 37.    | Officers                                      | 12 |
|                                           | 38.    | Chairman of  the Board                        | 12 |
|                                           | 39.    | President                                     | 12 |
|                                           | 40.    | Vice-President                                | 12 |
|                                           | 41.    | Chief  Executive Officer or Managing Director | 12 |
|                                           | 42.    | Secretary                                     | 13 |
|                                           | 43.    | Treasurer                                     | 13 |
|                                           | 44.    | Comptroller                                   | 13 |
|                                           | 45.    | Removal,  Discharge and Resignation           | 13 |
|                                           | 46.    | Remuneration                                  | 14 |
|                                           |   |                                          |
| **COMMITTEES  OF THE BOARD OF DIRECTORS**      |   |
|                                           |   |
|                                           | 47.    | Election                                      | 14 |
|                                           | 48.    | Chairman,  Quorum and Procedure               | 14 |
|                                           | 49.    | Secretary                                     | 14 |
|                                           | 50.    | Powers                                        | 14 |
|                                           | 51.    | Proceedings  open to the Board                | 14 |
|                                           | 52.    | Meetings                                      | 14 |
|                                           | 53.    | Remuneration                                  | 14 |
|                                           | 54.    | Removal and  Replacement                      | 14 |
|                                           |   |                                          |
| **INDEMNIFICATION  OF DIRECTORS AND OFFICERS** |   |
|                                           |   |
|                                           | 55.    | Indemnity                                     | 15 |
|                                           | 56.    | Insurance                                     | 15 |
|                                           |   |                                          |
| **CAPITAL  STOCK**                             |   |
|                                           |   |
|                                           | 57.    | Share  Certificates and Stock Transfers       | 15 |
|                                           | 58.    | Securities  Register                          | 16 |
|                                           | 59.    | Transfer  Agents and Registrars               | 16 |
|                                           | 60.    | Record Date  and Closing of Books             | 16 |
|                                           | 61.    | Lost and  Destroyed Certificates              | 16 |

 

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| **FISCAL  YEAR AND AUDIT**                                  |   |
|-------------------------------------------------------------|--------|
|                                                        |   |
|                                                        | 62.    | Fiscal year | 17 |
|                                                        | 63.    | Audit | 17 |
|                                                        |   |   |   |
| **REPRESENTATION  OF THE CORPORATION FOR CERTAIN PURPOSES** |   |
|                                                        |   |
|                                                        | 64.    | Declaration | 17 |
|                                                        | 65.    | Representation  at Meetings | 17 |
|                                                        | 66.    | Signature of  Documents | 18 |
|                                                        | 67.    | Declarations  in Register | 18 |

 

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**CODE OF GENERAL BY-LAWSOF THE CORPORATION**

 

enacted in accordance with theprovisionsof the *Canada Business Corporations Act*

 

**DEFINITIONS**

 

For the purposes of these by-laws, unless otherwise provided, thefollowing terms or expressions have themeanings set forth hereinbelow:

 

·                                          “Act” means the *Canada BusinessCorporations Act*, R.S.C. (1985) ch. C-44; as well as any amendmentthat may be made thereto, and any statute that may be substituted therefor.

 

·                                          “Resident Canadian” has the particular meaning ascribed to suchexpression by the Act.

 

·                                          “Ordinary Resolution” means a resolution adopted by the majority ofthe votes cast by the shareholders entitled to vote in the circumstancesconcerned, or signed by the aggregate of the shareholders.

 

·                                          “Special Resolution” means a resolution adopted by no less thantwo-thirds of the votes cast by the shareholders entitled to vote in thecircumstances concerned, or signed by the aggregate of the shareholders.

 

·                                          Auditor” means the auditor of the Corporation and includes a firm ofauditors.

 

**OFFICES AND CORPORATE SEAL**

 

1.                                       Offices. The Corporation may, inaddition to its registered office, establish elsewhere within or outside Canadasuch offices and agencies as the directors may from time to time determine.

 

2.                                       Seal. The seal of the Corporation shallbe circular in form and shall bear the name of the Corporation and the year ofits incorporation. If the Corporation has a name consisting of a separated orcombined French and English form, the seal of the Corporation may have both theFrench and English forms of the name, or the Corporation may have two (2) seals,equally valid, one (1) showing the French and the other the English formof the name. The president, or, if appointed, any vice-president, or, ifappointed, the chief executive officer, the comptroller, the secretary, thetreasurer or any other officer or director so authorized by the directors,shall have authority to affix

 

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the seal ofthe Corporation to any document requiring the same. The Corporation may, inaddition, have for use in any province other than that in which the registeredoffice of the Corporation is situate, or in any territory in Canada, or in anyplace outside Canada, an official seal which shall be a facsimile of the sealof the Corporation, with the addition on its face of the name of the province,territory or place where it is to be used and the Corporation may, by writing,authorize any person to affix the official seal to any deed or document to whichthe Corporation is a party in such province, territory or place.

 

Whenthe articles set forth the name of the Corporation in a language other thanFrench or English, for use outside Canada, the Corporation may, in view of suchuse, have a seal in circular form bearing the name of the Corporation in suchother language as well as the year of its incorporation and including the nameof the place where such name is to be used by the Corporation. The Corporationmay by writing authorize any person to affix such seal to any deed or documentto which it is a party in such place.

 

**SHAREHOLDERS**

 

3.                                       Annual Meetings. Subject to theprovisions of the Act, the annual meeting of the shareholders of theCorporation shall be held on such date in each year, at such time and, subjectto By-law Number 5, at such place as the board of directors may determine toreceive and consider the financial statements with the report of the auditor orauditors, to elect directors, to appoint an auditor or auditors and to fix orto authorize the board of directors to fix his or their remuneration and toconsider, deal with and dispose of such other business as may properly comebefore a meeting of shareholders.

 

Anyannual meeting may also constitute a special meeting to take cognizance anddispose of any matter of which a special meeting may take cognizance anddispose.

 

4.                                       Special Meetings. Special meetings ofthe shareholders may be called at any time by or by order of the president orthe board of directors of the Corporation and shall be called when one or moreshareholders who hold at least 20% of the outstanding voting shares so requestin accordance with the Act.

 

5.                                       Place of Meetings. Meetings of theshareholders shall be held at the registered office of the Corporation or atsuch other place as may be fixed by the board of directors. However, meetingsof the shareholders may not be held outside Canada unless all shareholdersentitled to vote thereat so agree in writing, by telegram, telecopy or cable,before or after they have been held or by attending the meetings in person,by proxyholder or in the case of a body corporate or an association by a representativeduly authorized in accordance with the provisions of By-law Number 9;nevertheless, a shareholder who attends a meeting held outside Canadais not deemed to have so agreed if he is

 

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present for the express purposeof objecting to the transaction of any business on the grounds that the meeting is not lawfully held.

 

6.                                       Notice of Meetings. Notice of eachannual meeting and of each special meeting of the shareholders shall bedelivered to the shareholders entitled to vote thereat, the directors andauditor or auditors or, in the discretion of the person charged with the givingof such notice, mailed by unregistered mail, postage prepaid, cabled,telecopied or telegrammed, addressed to such shareholders, directors andauditor or auditors at their respective addresses as they appear in the booksof the Corporation, not less than twenty-one (21) days and not more than fifty(50) days prior to the date fixed for such meeting. If the address of anyshareholder, director or auditor does not appear in the books of theCorporation, the notice may be sent as aforesaid to such address as the personsending the notice may consider to be most likely to reach such shareholder,director or auditor promptly.

 

Ashareholder and any other person entitled to attend a meeting of shareholdersmay waive such notice in writing, by telegram, telecopy or cable, before orafter the holding of such meeting or by attending the meeting in person, or, inthe case of shareholders, by proxyholder or in the case of a body corporate oran association by a representative duly authorized in accordance with the provisionsof By-law Number 9; nevertheless, a person who attends such a meeting is notdeemed to have waived the right to notice of the meeting when he so attends forthe express purpose of objecting to the transaction of any business on thegrounds that the meeting is not lawfully held.

 

Suchnotice shall indicate the time, date and place of each meeting. The notice ofan annual meeting may, but need not necessarily, set forth the nature of thebusiness that will constitute the agenda thereof, when any such meeting isconvened only to consider the financial statements and the auditor’s report, toelect the directors and to renew the term of office of the auditor. The noticeof a special meeting shall set forth:

 

(a)                                 the nature of the business that will constitute the agenda of themeeting in sufficient detail to enable the shareholders to form a reasonedjudgment thereon and

 

(b)                                the text of any special resolution to be submitted to the meeting.

 

Itis not necessary to give notice of the reconvening of an adjourned meetingother than by announcement at the earliest meeting that is adjourned; a newnotice of meeting is, however, required if the meeting of shareholders isadjourned one (1) or more times for an aggregate of thirty (30) days ormore.

 

Thesignature to any notice of meeting may be written, stamped, typewritten,printed or otherwise mechanically reproducedthereon.

 

Acertificate of the secretary or of any other duly authorized officer of theCorporation in office at the time of the making of the certificate or of anyofficer, transfer agent or registrar of transfers of shares of the Corporationshall be conclusive evidence of the delivery, mailing, cabling,

 

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telecopying ortelegramming of such notice of meeting and shall be binding on every personentitled to receive notice thereof.

 

7.                                       Chairman. The president of theCorporation, or such other person as may from time to time be appointed for thepurpose by the board of directors, shall preside at meetings of shareholders.

 

8.                                       Quorum. A quorum of shareholders ispresent at an annual or special meeting of shareholders, regardless of thenumber of persons present in person at the meeting, if the holder or holders ofshares representing at least twenty percent (20%) of the outstanding votingshares at such meeting are present in person or represented in accordance withBy-law Number 9 hereinbelow.

 

Ifa quorum is present at the opening of the meeting, the shareholders present orrepresented may proceed-with the business of the meeting, notwithstanding thefact that a quorum is not present throughout the meeting.

 

Ifa quorum is not present within thirty (30) minutes of the time for which suchmeeting is convened, the shareholders present or represented shall adjourn themeeting to another time and place but may not transact any other business.

 

Ifa quorum is reached at the reconvening of the meeting so adjourned, the meetingmay then proceed to examine and dispose of the business for which it wascalled. If at the time of the reconvening of the meeting so adjourned there isnot a quorum, the meeting shall again be adjourned or, if the time limits setforth in By-law Number 6 have expired, a new meeting shall be called.

 

Inthe case where the Act, the articles or any by-law of the Corporation requireor permit the vote by class of holders of a given class of shares of the sharecapital of the Corporation, the quorum at any meeting will be one or morepersons representing twenty percent (20%) of the outstanding shares of suchclass. If the quorum is not reached within thirty (30) minutes of the time forwhich such a meeting of a class of shareholders is convened, the shareholdersof the class who are present or represented shall adjourn such meeting toanother date and place, but they may not deal with any other business. If thequorum is reached at the reconvening of the meeting so adjourned, the meetingmay them proceed to consider and dispose of the matters for which it had beenconvened.. If the quorum is not reached at the resumption of the adjournedmeeting, such meeting shall again be adjourned or, if the time limits set outin By-Law Number 6 have expired, a new meeting shall be convened.

 

9.                                       Representation at Meetings. Shareholdersshall be entitled to vote in person or, if a body corporate or an association,by a representative duly authorized by resolution of the board of directors orthe board of directors of such body corporate or association. Shareholdersshall also be entitled to vote by proxyholder or by one or more alternativeproxyholders, who need not be shareholders; the proxyholder shall attend themeeting, vote thereat and otherwise act in the manner and to the extentauthorized and with the authority conferred by the proxy.

 

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Aproxy shall be signed by the shareholder or by his agent authorized in writingand such signature need not be witnessed.

 

Aproxy is valid only at the meeting in respect of which it is given or anyreconvening thereof.

 

Theinstrument appointing a proxyholder may, except in cases where the Actotherwise provides, be in the following form or in any other appropriate form:

 

“I/We,the undersigned, shareholders of Les Laboratoires Æterna Inc., hereby appointand constitute                   or, failing him,                (or                  ),my/our agent(s), representative(s) and proxies with full power andauthority to attend, vote and otherwise act for me/us on my/our behalf and inmy/our stead at the annual (or special) meeting of the shareholders of theCorporation, which takes place at              onthe              dayof               19    (20    ) and at anyadjournment thereof, with full power of substitution; I/we, the undersigned,hereby revoke any other proxy given by me/us, the undersigned, which may beused at any meeting or any adjournment thereof. The agent, representative andproxyholder hereby appointed and constituted is authorized to sign all waiversof the notice concerning the aforementioned meeting and all adjournmentsthereof.

 

Giventhis            dayof           19     (20     ).”

 

Theboard of directors may, in the notice of a meeting of shareholders set forth adate and a time, which shall not be prior to over 48 hours, excluding Saturdaysand statutory holidays, to the meeting or its reconvening in the event ofadjournment, a date prior to which the proxies to be used at such meeting shallbe deposited with the Corporation or its agent

 

Theboard of directors may also permit particulars of proxies for use at or inconnection with any such meeting which have been deposited with the Corporationor its agent at a place other than the place of such meeting to be cabled,telecopied or telegrammed to the secretary of the Corporation prior to such meeting.In such event, such proxies, if otherwise in order, shall be valid and anyvotes cast in accordance therewith shall be counted.

 

10.                                 Voting. Every question submitted to anymeeting of shareholders shall be decided by a show of hands unless a voice voteor a vote by secret ballot is ordered or required in the manner set out in theparagraphs hereinbelow.

 

Thechairman of any meeting may, in his discretion, order a voice vote or secretballot. Moreover, any shareholder or its representative may, either before orafter any vote by a show of hands, require a voice vote or secret ballot on anyquestion at any time before or after a vote by a show of hands is taken. Such ademand for a ballot may be withdrawn.

 

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Ifat any meeting a secret ballot is to be taken, it shall be taken in such mannerand either at once or after adjournment as the chairman directs. The result ofa secret ballot shall be deemed to be a resolution of the meeting at which theballot was taken whether or not a vote by a show of hands or a voice vote wastaken on the same question.

 

Atall meetings of shareholders, every shareholder entitled to vote thereat,whether present in person or represented, shall be entitled to one vote foreach voting share at such meeting; if, however, pursuant to the Act or thearticles of the Corporation another ratio of voting rights is established, thevoting rights shall be as determined by such other ratio.

 

Theacts of the shareholders, their representatives and their proxyholders castinga majority of the votes in respect of shares so represented shall be the actsof the shareholders, except where a greater majority than a simple majority isrequired by the Act or the articles of the Corporation.

 

11.                                 Procedure at Meetings. The chairman ofany meeting of shareholders shall conduct the procedure thereat in all respectsand his decision on all matters, including, but without in any manner limitingthe generality of the foregoing, any question regarding the validity orinvalidity of any proxy, shall be conclusive and binding upon the shareholders.

 

Adeclaration by the chairman at any meeting that a resolution has been carriedor carried unanimously or carried by any particular majority or lost or notcarried by a particular majority shall be conclusive evidence of the fact.

 

Thedirectors of the Corporation are entitled, in such sole capacity, to attendmeetings of the shareholders and speak thereat.

 

12.                                 Scrutineers. The chairman of any meetingof shareholders may appoint two persons, who may but need not be directors,officers, employees or shareholders of the Corporation, to act as scrutineersat such meeting.

 

13.                                 Subsequent Transferees. Every personwho, by operation of the Act, transfer or any other means whatsoever, becomesentitled to any share, shall be bound by every notice given in respect of suchshare which, prior to the entry of his name and address on the register, isgiven to the person whose name appears on the register at the time such noticeis sent.

 

14.                                 Addresses of Shareholders. Everyshareholder shall furnish the Corporation with an address to or at which allcorporate notices intended for such shareholder may be sent as provided inBy-law Number 6.

 

15.                                 Signed Resolution. Except in cases prohibitedby the Act, a resolution in writing signed by all the shareholders entitled tovote on that resolution at a meeting of shareholders is as valid as if it hadbeen cast at a meeting of the shareholders.

 

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Acopy of every resolution referred to in the preceding paragraph shall be keptwith the minutes of the meetings of shareholders.

 

**BOARD OF DIRECTORS**

 

16.                                 Number. The board of directors shall becomposed of such number of directors as may be determined from time to time bythe directors, subject to the minimum number and the maximum number ofdirectors set out in the articles of the Corporation.

 

17.                                 Election and Term of Office. Except (i) ifthe articles of the Corporation provide for cumulative-voting, in which casethe provisions of the Act in such respect apply, (ii) when the articlesconfer upon the holders of a class or a series of shares the exclusive right toelect one or more directors, in which case, the provisions of the articlesshall prevail, (iii) when the appointment of a director to an office ofdirector that has become vacant is otherwise provided for, or (iv) whenthe election of additional directors is otherwise provided for, in which casethe relevant provisions of the articles shall apply, each director shall beelected by a majority of votes cast at the annual meeting at which an electionof directors is required. A vote by secret ballot shall not be necessary forthe election of the directors of the Corporation unless it is required byperson attending and entitled to vote at the meeting at which such electiontakes place.

 

Eachdirector so elected shall hold office until the election of his successorexcept in the case of a resignation or if his office becomes vacant by death orotherwise.

 

18.                                 Vacancy. The office of a director shallbe automatically vacated:

 

(a)                                  if he dies;

 

(b)                                 if he resigns his office, at the time such resignation takes effect;

 

(c)                                  if he is removed in accordance with the Act and no one is appointedto replace him at the meeting of the shareholders during which he is soremoved;

 

(d)                                 ceases to be qualified as a director.

 

19.                                 Replacement. Subject to the provisionsof the Act, if a vacancy occurs on the board of directors, including a vacancycaused by an increase in the number of directors, the remaining directors, ifthey constitute a quorum, may appoint a qualified person to fill such avacancy, or the unexpired term of office. In the absence of a quorum, theremaining direcotrs shall immediately convene a special meeting of thedirectors in order to fill such vacancy, in accordance with section 111 of theAct.

 

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20.          Qualities Required. No personshall be qualified for election as a director if he is less than eighteen (18)years of age; if he is of unsound mind and has been so found by a court inCanada or elsewhere; if he is not an individual; if he has the status of abankrupt, or if a court prohibits him from holding the office of director. Adirector need not be a shareholder. A majority of the directors shall becomposed of Resident Canadians, unless otherwise set forth in the Act. If theCorporation is a corporation that makes a public distribution of itssecurities, at least two-thirds of its directors shall not be officers oremployees of the Corporation or its subsidiaries. A retiring director, if isotherwise qualified, shall be eligible for re-election.

 

21.          Meetings and Notices.Immediately after the annual meeting of shareholders in each year, a meeting ofthe directors who are then present shall be held without further notice,provided a quorum is present, for the appointment of the officers of the Corporation;such meeting may transact such other business as may properly come before it.

 

Meetingsof the board of directors may be called by or by the order of the chairman ofthe board, if any, or, by or by the order of the president of the Corporationor, by or by the order of a vice-president of the Corporation, if he is also adirector, or, by or by the order of any two directors, and may be held at anyplace within or outside Canada. Notice specifying the place, date and time ofeach such meeting shall be delivered to each director or left at his residenceor place of business, or shall be mailed by unregistered mail, postage prepaid,or telegrammed, telecopied or cabled to each director at his respective addressas it appears in the books of the Corporation at least two days prior to thedate fixed for such meeting. If the address of any director does not appear inthe books of the Corporation, then such notice may be sent as aforesaid to suchaddress as the person sending the notice may consider to be most likely toreach such director promptly.

 

Theboard of directors may from time to time provide for the holding of regularmeetings of the board of directors at such place, within or outside Canada,with or without notice, as may be determined by a resolution passed to sucheffect.

 

Exceptin respect of questions or matters set forth in section 153(3) of the Act,including *inter alia*, the declaration ofdividends, the issue of securities, the acquisition of shares issued by theCorporation, the approval of the annual financial statements, vacancies on theboard of directors or in the office of auditor and the adoption, amendment orrevocation of the by-laws.

 

Nonotice of the date, time and place of any meeting of the board of directorsneed be given to any director who waives notice thereof, either in writing, bytelegram, by telecopy or by cable before or after the holding thereof or who ispresent thereat; nevertheless, a director’s presence at such meeting shall notconstitute a waiver of notice if the director so attends for the expresspurpose of objecting to the transaction of any business on the grounds that themeeting is not lawfully constituted.

 

Itis not necessary to give notice of the reconvening of an adjourned meeting ifthe date, time and place of the reconvening of such meeting are announced atthe initial meeting.

 

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22.          Participation by Technical Means.The directors may, if all are in agreement, participate in a meeting of theboard of directors using technical means, including the telephone, enabling allparticipants to communicate orally amongst themselves. A director participatingin a meeting using such means shall be deemed to have attended the meeting.

 

23.          Quorum. A majority of thenumber of directors of whom the board is composed shall constitute a quorum fora meeting of the board of directors. When the quorum is reached, the directorsmay exercise their powers notwithstanding any vacancy on the board; however, nomatter shall be dealt with unless the number of directors present who areResident Canadians is as set out in the Act.

 

Questions raised at any meeting of thedirectors shall be decided by a majority of the votes of the directors present.In the case of an equality of votes, the chairman of the board shall beentitled to one (1) casting vote.

 

24.          Resignation. A director mayresign at any time from his office, by sending his written resignation to thepresident or the secretary of the Corporation at the Corporation’s head officeor by remitting such written resignation at a meeting of the board ofdirectors. The resignation shall take effect on the date of its sending or itsremittance or on such subsequent date as may be indicated therein.

 

25.          Removal. Subject to the articlesof the Corporation, any director may be removed by Ordinary Resolution at aspecial meeting of the shareholders. The removal, as well as the election, of adirector shall be at the discretion of the shareholders. It may be done at anytime and need not be based on any particular reasons, whether serious or not.Neither the Corporation nor the shareholders voting in favour or the removalshall incur any liability toward a director by the mere fact of his removal,even if there be no grounds therefor. A director who is informed of hisimminent removal may, in a written declaration, set forth to the Corporationthe reason for his objection to such removal, and the Corporation shall forwardsuch written declaration to the shareholders entitled to vote in thecircumstances concerned.

 

26.          Remuneration. The remunerationto be paid to the directors shall be as fixed by resolution of the board ofdirectors from time to time or by a committee to which the directors maydelegate the power to so do. Such remuneration shall be in addition to thesalary or remuneration received as such by an officer, an employee or asupplier of services to the Corporation who is also a director. The directorsmay also be reimbursed for such travelling and other expenses as may be incurredby them in connection with the business of the Corporation. In addition, thedirectors may, by resolution, provide special remuneration to any director whoundertakes on behalf of the Corporation any special service other than the worka director is normally required to perform for the Corporation.

 

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27.          Signed Resolutions. Aresolution in writing signed by all the directors entitled to vote on that resolutionat a meeting of the directors or of a committee of the board of directors is asvalid as if it had been passed at a meeting of the directors or of a committeeof the board of directors.

 

Acopy of every resolution referred to in the preceding paragraph shall be keptwith the minutes of the meetings of the directors or of a committee of theboard of directors.

 

28.          Powers of Directors. Thedirectors of the Corporation shall manage and administer the business andaffairs of the Corporation and shall exercise all such powers and authority asthe Corporation is authorized to exercise pursuant to the Act, the articles andthe by-laws and as are not by the Act, the articles or the by-laws required tobe exercised exclusively by the shareholders or with the consent thereof.

 

29.          Irregularity. Notwithstandingthat it be afterwards discovered that there was some defect in the election ofthe board of directors or the appointment of the officers of the Corporation ornotwithstanding the discovery of an apparent irregularity in the election ofany person acting as director or in his qualification, all acts of the board ofdirectors or of any person acting as director or officer shall be as valid andbinding upon the Corporation as if every such board or person had been dulyelected or appointed and had been duly qualified.

 

30.          Power to Allot Stock and GrantOptions. Subject to the provisions of the articles of the Corporationrestricting the issue and allotment of the shares of the capital stock of theCorporation, the board of directors may, from time to time, acceptsubscriptions, allot, issue all or part of the unissued shares of theCorporation, grant options in respect of such shares or otherwise disposethereof to such persons, on such terms and conditions and for suchconsideration and in such manner not contrary to the Act or the articles of theCorporation as the directors think fit.

 

31.                               Powerto Declare Dividends. The board of directors may,from time to time as it may deem advisable and to the extent permitted by theAct, declare and pay to the shareholders, according to their rights, dividendsin money or property or in the form of shares of the Corporation.

 

Transfersof shares shall not transfer the right to dividends declared thereon before theregistration of such transfers. In the event that two or more persons areregistered as joint holders of any share, any one of such persons may giveeffective acquittance for all dividends in respect of such share.

 

32.          Use of Property or Information.Any director is required, in the exercise of his duties, to act with integrityand good faith in the best interests of the Corporation. He may not, inparticular, mingle or use the property of the Corporation or any information heobtains by reason of his duties, for his profit or for the profit of a thirdparty, unless he is expressly and specifically authorized to so do by theshareholders of the Corporation.

 

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33.          Conflicts of Interest. Eachdirector shall avoid placing himself in a situation of conflict between hispersonal interest and his obligations as a director of the Corporation.

 

Heshall promptly disclose to the Corporation any interest he has in anyundertaking or association that is likely to place him in a situation ofconflict of interest, as well as the rights he may assert there against,indicating, should such be the case, the nature and value thereof.

 

Suchdisclosure of interest shall be entered in the minutes of the meetings of theboard of directors or the resolution signed in its place and stead.

 

Atthe request of the president or any director, the director placed in asituation of conflict of interest shall leave the meeting while the board ofdirectors discusses such matter.

 

34.          Contracts with the Company. Adirector or an officer may, even in performing his duties, be a party to amaterial contract with the Corporation, or be a director, an officer or aholder of a material interest in a body corporate that is a party to suchcontract. He shall then disclose, in writing to the Corporation, in accordancewith section 120 of the Act, the nature and extent of his interest in suchcontract, or request that same be entered in the minutes of the meetings of theboard of directors, even if such contract, in connection with the normalbusiness activity of the Corporation, does not require the approval of eitherthe directors or the shareholders. A general notice that the director orofficer is a director, an officer or a holder of a material interest in a bodycorporate, and that he is to be considered as having an interest in anycontract entered into with it, shall constitute sufficient disclosure for thepurposes of this by-law.

 

Adirector who is so interested in a contract shall abstain from the discussionand voting on this resolution to have the contract approved, unless thecontract is one set out in section 120(5) of the Act, namely a contractrelating primarily to the remuneration or indemnification of such director oris entered into with an affiliate of the Corporation.

 

Atthe request of the president or any director, the interested director shallleave the meeting while the board of directors discusses and votes on thecontract concerned.

 

Neitherthe Company nor any of its shareholders may contest the validity of a contractentered into with a director or an officer of the Corporation, or with a bodycorporate in which such director or officer is a director, an officer or aholder or a material interest, for such sole reasons, as long as such directoror officer has disclosed its interest as aforementioned, the board of directorsor the shareholders of the Corporation have approved the contract and suchcontract was, at such time, equitable for the Corporation.

 

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**MANAGEMENT**

 

35.                                Officers. The management of the Corporation shall be composed of suchofficers as the board of directors may from time to time deem necessary toappoint, including the chairman of the board of directors, if appointed, thepresident, one of more vice-presidents, the managing director or the chiefexecutive officer, the comptroller, the secretary and the treasurer. Subject tothe powers which, pursuant to the Act, may be exercised only by the board ofdirectors, the president and, if appointed, the other officers of theCorporation shall exercise respectively the powers and authority and performsuch duties as may from to time be prescribed by the board of directors inaddition to those specified in this regulation. The same person may hold two ormore offices in the management of the Corporation. No officer of theCorporation, with the exception of the chairman of the board of directors, ifany, the managing director, if appointed, and the president, need be a directorof the Corporation.

 

The board of directors may also from time totime appoint other agents, officers and employees of the Corporation, within oroutside Canada, who may be given such titles and who shall exercise such powersand authority (including the power of sub-delegation) and perform such managerialduties or other duties as the board of directors may from time to timedetermine.

 

In case of the absence of any officer oremployee of the Corporation or for any other reason that the directors may deemsufficient, the board of directors may delegate temporarily the powers andauthority of such officer or employee to any other officer, employee ordirector of the Corporation.

 

36.                                Chairmanof the Board. The chairman of the board shallpreside at all meetings of the board of directors and shall exercise such otherpowers and authority and perform such other duties which the directors may fromtime to time prescribe.

 

37.                                President. The president is the principal officer of the Corporation and,subject to the control of the board of directors, shall supervise, administerand manage the business and affairs of the Corporation generally. The presidentshall preside at all meetings of the shareholders, unless otherwise determinedby the board of directors, and in the event of the absence, inability orfailure of the chairman of the board to act, the president, or in the event ofits absence, one of the vice- presidents, shall preside at all meetings of theboard of directors. The president shall exercise such other powers andauthority and perform such other duties as may from time to time be prescribedby the directors of the Corporation.

 

38.                                Vice-President. The vice-president, or if more than one, the vice-presidents,shall exercise such powers and authority and perform such duties as may. fromtime to time be prescribed by the board of directors or the president.

 

39.                                ChiefExecutive Officer or Managing Director. The chiefexecutive officer shall, subject to the control of the president, manage theoperations of the Corporation generally, and shall exercise such other powersand authority and perform such other duties as may from time to time be prescribedby the board of directors.

 

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Themanaging director shall be a Resident Canadian and a director. The board ofdirectors may delegate to such managing director all of the powers of the boardexcept the powers that a managing director is not entitled to exercise pursuantto the Act.

 

40.          Secretary. The secretary shallattend to the giving of all notices of the Corporation. He shall keep theminutes of all meetings of the board of directors, all the committees of theboard of directors in a book or books to be kept for that purpose. He shallkeep in safe custody the corporate seal of the Corporation. He shall have chargeof the records of the Corporation including books containing the names andaddresses of the members of the board of directors of the Corporation, togetherwith copies of all reports made by the Corporation and such other books andpapers as the board of directors may direct. He shall be responsible for thekeeping and filing of all books, reports, certificates and all other documentsrequired by the Act to be kept and filed by the Corporation. He shall besubject to the control of the president and shall exercise such other powersand authority and perform such other duties as may from time to time beprescribed by the board of directors or the president.

 

Assistant-secretaries may perform any of theduties of the secretary.

 

41.          Treasurer. The treasurer shallhave general charge of the finances of the Corporation. He shall deposit allmoneys and other valuable effects of the Corporation in the name and to thecredit of the Corporation in such banks or other depositories as the board ofdirectors may from time to time designate; he shall render to the president andto the board of directors, whenever so directed, an account of the financialsituation of the Corporation and of all his transactions as treasurer; as soonas possible after the close of each fiscal year he shall prepare and submit tothe president and to the board of directors a like report for such fiscal year.He shall have charge and custody of and be responsible for the keeping of thebooks of account. He shall be subject to the control of the president and shallexercise such other powers and authority and perform such other duties as mayfrom time to time be prescribed by the board of directors or by the president.

 

Assistant-treasurers may perform any of theduties of the treasurer.

 

42.          Comptroller. The comptrollershall, subject to the control of the president and treasurer, exercise suchpowers and authority as may from time to time be prescribed by the board ofdirectors, the president or the treasurer, failing which he shall act as thechief accounting officer of the Corporation.

 

43.          Removal, Discharge and Resignation.The directors may, by the affirmative vote of the majority of the board ofdirectors, remove any officer with or without cause at any time, unless theresolution or contract providing for his appointment stipulates otherwise. Anyagent or employee who is not an officer of the Corporation may be discharged bythe president or any other officer autorized by the president, with or withoutcause at any time, unless the contract providing for his employment stipulatesotherwise. Any officer may resign as such at any time by remitting his

 

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resignation inwriting to the president or secretary of the Corporation or at a meeting of theboard of directors, unless otherwise agreed to the contrary.

 

44.           Remuneration. Theremuneration, if any, to be paid to all of the officers shall be fixed fromtime to time by a resolution of the board of directors.

 

**COMMITTEES OF THE BOARD OF DIRECTORS**

 

45.           Election. The board ofdirectors may, from time to time, appoint from amongst their number committeesof the board of directors, however designated, containing such proportion ofResident Canadians as may be required by the Act.

 

46.           Chairman, Quorum and Procedure.Any committee of the board of directors shall have power to appoint a chairmanand a vice-chairman, to fix its quorum, which quorum shall consist of not lessthan a majority of its members, and to determine its procedure.

 

47.           Secretary. The secretary ofthe Corporation shall act as secretary of each committee of directors unlesssome other secretary be appointed by the committee.

 

48.           Powers. The board of directorsmay delegate to any such committee of the board of directors any of the powersof the board except those which pursuant to the Act a committee of the board ofdirectors has no authority to exercise.

 

49.           Proceedings open to the Board.All proceedings of committees of the board of directors shall be open to theexamination of the board of board of directors of the Corporation and shall bereported to the board of directors if and when the board of directors sodirects.

 

50.           Meetings. Meetings ofcommittees of the board of directors may be held at the registered office ofthe Corporation or at such other place within or outside Canada as a committeemay from time to time determine. Meetings of a committee may be called by or bythe order of the president, the chairman of the committee, the vice-chairman orany two members thereof.

 

51.           Remuneration. The members of acommittee of the board of directors shall be entitled to receive suchremuneration for their services as members of the committee as the directorsmay from time to time determine.

 

52.           Removal and Replacement. Thedirectors may from time to time remove any member of a committee of the boardof directors from office.

 

The board of directors may also from time totime fill any vacancy which may occur in the membership of a committee.

 

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**INDEMNIFICATION OF DIRECTORS AND OFFICERS**

 

53.                                Indemnity. Subject to the limitations provided by the Act, the Corporationshall indemnify a director or an officer of the Corporation, a former directoror officer of the Corporation or a person who acts or acted at the Corporation’srequest as a director or officer of a body corporate of which the Corporationis or was a shareholder or creditor, and his heirs and legal representatives,against all costs, losses, charges and expenses, including an amount paid tosettle an action or satisfy a judgment, reasonably incurred by him in respectof any civil, criminal or administrative action or proceeding to which he ismade a party by reason of being or having been a director or officer of theCorporation or such body corporate, provided:

 

(a)                                he acted honestly and in good faith in the best interests of theCorporation; and

 

(b)                                 in the case of a criminal or an administrative action or proceedingthat is enforced by a monetary penalty, he had reasonable grounds to believethat his conduct was lawful.

 

The directors of the Corporation are herebyauthorized to indemnify from time to time any director or other person who hasassumed or is about to assume in the normal course of business any liabilityfor the Corporation or for any corporation controlled by the Corporation, andto secure such director or other person against any loss by the pledge of allor part of the movable or immovable property of the Corporation through thecreation of a hypothec or any other real right in all or part of such propertyor in any other manner.

 

54.                               Insurance. To the extent permitted by the Act, the Corporation may purchaseand maintain insurance for the benefit of any person referred to above againstany such liability as the board of directors may from time to time determine.

 

**CAPITAL STOCK**

** **

55.                               ShareCertificates and Stock Transfers. Certificatesrepresenting shares of the share capital of the Corporation shall bear thesignature of the president or a vice-president and the secretary. The signatureof the president or vice-president may be engraved, lithographed or otherwisemechanically reproduced thereon and the signature of the secretary may also beengraved, lithographed or otherwise mechanically reproduced. Any certificatesbearing the- facsimile reproduction of the signatures of such authorizedofficers shall be deemed to have been manually signed by them and shall be asvalid to all intents and purposes as if it had been so manually signednotwithstanding that the persons whose signatures are so reproduced shall haveceased to be officers of the Corporation

 

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on the date ofsuch certificate or at the time that it is issued. Each share certificate shallinclude all restrictions pertaining to its transfer and all other notationsrequired by the Act.

 

56.           Securities Register. A centralsecurities register shall be maintained by the Corporation or its agent at theregistered office or at any other place in Canada designated by the directors.The directors may from time to time provide that one (1) or more branchsecurities registers shall be maintained at such places within Canada orelsewhere as may be designated by a resolution and may appoint officers oragents to maintain the same and to effect and record therein transfers ofshares of the share capital of the Corporation.

 

57.           Transfer Agents and Registrars.Agents of the Corporation charged with the maintenance of the central and/orbranch securities registers may be designated as transfer agents and/orregistrars of transfers, according to their functions. The board of directorsmay at any time terminate the appointment of such transfer agents and/orregistrars.

 

58.           Record Date and Closing of Books.Subject to compliance with the Act pertaining to notification, the directorsmay fix in advance, by resolution, a date not exceeding fifty (50) dayspreceding the date for payment of a dividend or the date for the allotment ofrights or the date when any change or conversion or exchange of shares of theshare capital of the Corporation shall go into effect as the record date forthe determination of the shareholders entitled to receive payment of suchdividend, the allotment of such rights or the exercise of such rights in respectof such change, conversion or exchange of the share capital of the Corporationwith the effect that only the shareholders of record on the date so fixed bythe directors shall be entitled to receive payment of such dividend orallotment of rights or to exercise such rights, as the case may be,notwithstanding a transfer of any shares on the books of the Corporation aftersuch record date.

 

59.           Lost and Destroyed Certificates.The directors may, upon such terms and conditions as to indemnity and otherwiseas they may deem advisable, direct that a new certificate or certificates ofshares be issued to replace any certificate or certificates of sharestheretofore issued by the Corporation that have been worn out, lost, stolen ordestroyed. The board of directors, when authorizing the issue of such newcertificate or certificates, may, in their discretion, and as a conditionprecedent thereto, require the owner of such worn-out, lost, stolen ordestroyed certificate or his legal representatives to give to the Corporationand/or transfer agent or transfer agents and to such registrar or registrars,as may be authorized or required to countersign such new certificate orcertificates, a bond in such sum as they may direct, as indemnity against anyclaim that may be made against them or either of them for or in respect of theshares represented by such certificates alleged to have been worn out, lost,stolen or destroyed.

 

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**FISCAL YEAR AND AUDIT**

 

60.          Fiscal Year. The period for thefiscal year of the Corporation shall be determined from time to time by thedirectors.

 

61.          Audit. Except in casesotherwise prescribed by the Act, the shareholders, at each annual meeting,shall appoint an auditor or auditors to hold office until the next annualmeeting and until the appointment of his or their successor or successors,unless he or they resign or his or their office becomes vacant by his or theirdeath. At least once in every fiscal year, such auditor or auditors shall examinethe accounts of the Corporation and the financial statements to be presented atthe annual meeting and shall report thereon to the shareholders. The auditor’sremuneration shall be fixed by the audit committee or the board of directors,if such power is not exercised by the shareholders.

 

Theauditor shall be independent of the Corporation, its affiliates or theirdirectors or officers, in accordance with the Act. The auditor may be removedat any time by the shareholders in a special meeting. A vacancy created by theremoval of the auditor may be filled by the shareholders, at the meeting atwhich the auditor was removed, or, if not so filled, by the board of directors.Any other vacancy in the office of auditor will be filled by the board of directors,in accordance with section 166 of the Act.

 

**REPRESENTATION OF THE CORPORATION FOR CERTAINPURPOSES**

 

62.          Declaration. The president, anyvice-president, the managing director, the chief executive officer, thecomptroller, the secretary and the treasurer or any one of them or any otherofficer or person thereunto authorized by the directors is authorized andempowered to make answer for the Corporation to all writs, orders andinterrogatories upon articulated facts issued out of any Court, to answer and/oroppose for and on behalf of the Corporation all seizures and to declare for andon behalf of the Corporation to writs of attachment by manner of garnishment inwhich the Corporation is garnishee, to make all affidavits and sworndeclarations in connection therewith or in connection with any judicialproceedings to which the Corporation is a party, to make petitions forwinding-up, sequestration or bankruptcy against any debtor of the Corporation,to attend and vote at all meetings of creditors of the Corporation’s debtorsand to grant proxies in connection therewith.

 

63.          Representation at Meetings. Thepresident, any vice-president, the managing director, the chief executiveofficer, the secretary and the treasurer, or any one of them or any otherperson thereunto authorized by the chairman of the board shall represent theCorporation, attend and vote at any meeting of shareholders or members of anyfirm, company, corporation or syndicate in which the Corporation holds sharesor is otherwise interested, and any action taken and/or vote cast by them orone of them at any such meeting shall be deemed to be the act and/or vote ofthe Corporation.

 

Anytwo of the president, any vice-president, the managing director, the chiefexecutive officer, the secretary and the treasurer shall moreover be empoweredto authorize any person (whether an officer of the Corporation or not) toattend, vote and otherwise act at all meetings of

 

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shareholdersor members of any firm, company, corporation or syndicate in which theCorporation holds shares or is otherwise interested, and for this purpose, suchofficers shall be authorized to execute and to deliver from time to time forand on behalf and in the name of the Corporation a proxy in such form and termsas such officers see fit, including therein, but without in any way limiting orrestricting the generality of the foregoing, provision for the appointment of asubstitute proxyholder and the revocation of all proxies given by theCorporation prior thereto with respect to any such meeting.

 

64.          Signature of Documents. Thecontracts, documents, written acts, including acquittances and discharges,requiring the signature of the Corporation may be validly signed by thepresident alone, or by one person designated by the president and hence bebinding on the Corporation: any vice- president, the managing director or thechief executive officer, the secretary and the treasurer. The board ofdirectors may also designate any other person to sign and deliver on behalf ofthe Corporation all contracts, documents and written acts, and suchauthorization may be given by resolution in general or specific terms.

 

65.          Declarations in Register. Thedeclarations to filed with the Inspector General of Financial Institutions inaccordance with the *Act respecting the legalpublicity of sole proprietorships, partnerships and legal persons*shall be signed by the president, any director of the Corporation, or any otherperson authorized for such purpose by resolution of the board of directors. Anydirector who has ceased to hold such office as a result of his dismissal orremoval or who is otherwise authorized to sign on behalf of the Corporation andfile an amending declaration to the effect that he has ceased to be a director,commencing fifteen (15) days after the date on which such cessation occurred,unless he receives proof that the Corporation has filed such a declaration.

 

 
|   | /s/ Éric  Dupont                  |
|--------|----------------------------------------|
|   | Éric Dupont                       |
|   | President  and Chief Executive Officer |

 

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**ATTESTATION**

 

Je,soussigné, Luc Dupont, Vice-président, Opérations et Finances et secrétaire deLes Laboratoires Æterna Inc., certifie par la présente que le document joint àla présente attestation constitue une copie exacte et conforme du code de règlementsgénéraux de Les Laboratoires ) Æterna Inc.

 

MONTRÉAL,ce 19e jour de décembre 1995

 

 
|   | /s/ Luc  Dupont |
|--------|-----------------|
|   | Luc Dupont      |

 

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