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Sherman Bernard C, et al. – ‘SC 13D’ on 12/29/03 re: Counsel Corp

On:  Monday, 12/29/03, at 4:26pm ET   ·   Accession #:  950136-3-3208   ·   File #:  5-48086

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

12/29/03  Sherman Bernard C                 SC 13D                 3:62K  Counsel Corp                      Capital Systems 01/FA
          Apotex Holdings Inc.
          Apotex Inc.
          Sherfam Inc.
          Sherman Foundation
          Sherman Holdings Inc.
          Shermco Inc.
          The Bernard Sherman 2000 Trust

General Statement of Beneficial Ownership   —   Schedule 13D
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: SC 13D      General Statement of Beneficial Ownership             21     66K 
 2: EX-99.A     Agreement Between Reporting Persons                    2±     9K 
 3: EX-99.B     Miscellaneous Exhibit                                  9     34K 


SC 13D   —   General Statement of Beneficial Ownership
Document Table of Contents

Page (sequential) | (alphabetic) Top
 
11st Page   -   Filing Submission
10Item 1. Security and Issuer
"Item 2. Identity and Background
14Item 3. Source and Amount of Funds or Other Consideration
"Item 4. Purpose of Transaction
15Item 5. Interest in Securities of the Issuer
16Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer
19Item 7. Material to be Filed as Exhibits
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SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. )* Counsel Corporation (Name of Issuer) Common Shares without par value (Title of Class of Securities) 22226R102 (CUSIP Number) Meyer F. Florence 150 Signet Drive Weston, Ontario, Canada M9L 1T9 (416) 749-9300 (Name, Address and Telephone Number of Person Authorized to Received Notices and Communications) December 19, 2003 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box /X/. NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
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SCHEDULE 13D CUSIP No. 22226R102 1) NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Bernard C. Sherman 2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) --- (b) X --- 3) SEC USE ONLY 4) SOURCE OF FUNDS (SEE INSTRUCTIONS) PF, SC 5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) --- 6) CITIZENSHIP OR PLACE OF ORGANIZATION Ontario, Canada NUMBER OF 7) SOLE VOTING POWER SHARES 579,150 BENEFICIALLY 8) SHARED VOTING POWER OWNED BY 11,834,550 EACH 9) SOLE DISPOSITIVE POWER REPORTING 579,150 PERSON WITH 10) SHARED DISPOSITIVE POWER 11,834,550 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 12,413,700 12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 21.2% 14) TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IN 2
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SCHEDULE 13D CUSIP No. 22226R102 1) NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) The Bernard Sherman 2000 Trust 2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) --- (b) X --- 3) SEC USE ONLY 4) SOURCE OF FUNDS (SEE INSTRUCTIONS) 5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) --- 6) CITIZENSHIP OR PLACE OF ORGANIZATION Ontario, Canada NUMBER OF 7) SOLE VOTING POWER SHARES 0 BENEFICIALLY 8) SHARED VOTING POWER OWNED BY 10,854,400 EACH 9) SOLE DISPOSITIVE POWER REPORTING 0 PERSON WITH 10) SHARED DISPOSITIVE POWER 10,854,400 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 10,854,400 12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 18.5% 14) TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) OO 3
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SCHEDULE 13D CUSIP No. 22226R102 1) NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Sherman Holdings Inc. 2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) --- (b) X --- 3) SEC USE ONLY 4) SOURCE OF FUNDS (SEE INSTRUCTIONS) 5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) --- 6) CITIZENSHIP OR PLACE OF ORGANIZATION Ontario, Canada NUMBER OF 7) SOLE VOTING POWER SHARES 0 BENEFICIALLY 8) SHARED VOTING POWER OWNED BY 10,854,400 EACH 9) SOLE DISPOSITIVE POWER REPORTING 0 PERSON WITH 10) SHARED DISPOSITIVE POWER 10,854,400 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 10,854,400 12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 18.5% 14) TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) HC, CO 4
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SCHEDULE 13D CUSIP No. 22226R102 1) NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Shermco Inc. 2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) --- (b) X --- 3) SEC USE ONLY 4) SOURCE OF FUNDS (SEE INSTRUCTIONS) 5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) --- 6) CITIZENSHIP OR PLACE OF ORGANIZATION Ontario, Canada NUMBER OF 7) SOLE VOTING POWER SHARES 0 BENEFICIALLY 8) SHARED VOTING POWER OWNED BY 10,854,400 EACH 9) SOLE DISPOSITIVE POWER REPORTING 0 PERSON WITH 10) SHARED DISPOSITIVE POWER 10,854,400 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 10,854,400 12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 18.5% 14) TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) HC, CO 5
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SCHEDULE 13D CUSIP No. 22226R102 1) NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Sherfam Inc. 2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) --- (b) X --- 3) SEC USE ONLY 4) SOURCE OF FUNDS (SEE INSTRUCTIONS) WC 5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) --- 6) CITIZENSHIP OR PLACE OF ORGANIZATION Ontario, Canada NUMBER OF 7) SOLE VOTING POWER SHARES 0 BENEFICIALLY 8) SHARED VOTING POWER OWNED BY 10,854,400 EACH 9) SOLE DISPOSITIVE POWER REPORTING 0 PERSON WITH 10) SHARED DISPOSITIVE POWER 10,854,400 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 10,854,400 12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 18.5% 14) TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) HC, CO 6
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SCHEDULE 13D CUSIP No. 22226R102 1) NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Apotex Holdings Inc. 2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) --- (b) X --- 3) SEC USE ONLY 4) SOURCE OF FUNDS (SEE INSTRUCTIONS) 5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) --- 6) CITIZENSHIP OR PLACE OF ORGANIZATION Ontario, Canada NUMBER OF 7) SOLE VOTING POWER SHARES 0 BENEFICIALLY 8) SHARED VOTING POWER OWNED BY 854,400 EACH 9) SOLE DISPOSITIVE POWER REPORTING 0 PERSON WITH 10) SHARED DISPOSITIVE POWER 854,400 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 854,400 12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.5% 14) TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) HC, CO 7
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SCHEDULE 13D CUSIP No. 22226R102 1) NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Apotex Inc. 2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) --- (b) X --- 3) SEC USE ONLY 4) SOURCE OF FUNDS (SEE INSTRUCTIONS) 5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) --- 6) CITIZENSHIP OR PLACE OF ORGANIZATION Ontario, Canada NUMBER OF 7) SOLE VOTING POWER SHARES 0 BENEFICIALLY 8) SHARED VOTING POWER OWNED BY 854,400 EACH 9) SOLE DISPOSITIVE POWER REPORTING 0 PERSON WITH 10) SHARED DISPOSITIVE POWER 854,400 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 854,400 12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.5% 14) TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) HC, CO 8
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SCHEDULE 13D CUSIP No. 22226R102 1) NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Sherman Foundation 2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) --- (b) X --- 3) SEC USE ONLY 4) SOURCE OF FUNDS (SEE INSTRUCTIONS) SC 5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) --- 6) CITIZENSHIP OR PLACE OF ORGANIZATION Ontario, Canada NUMBER OF 7) SOLE VOTING POWER SHARES 0 BENEFICIALLY 8) SHARED VOTING POWER OWNED BY 980,150 EACH 9) SOLE DISPOSITIVE POWER REPORTING 0 PERSON WITH 10) SHARED DISPOSITIVE POWER 980,150 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 980,150 12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.7% 14) TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) OO 9
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Item 1. Security and Issuer The title and class of equity security to which this statement relates is: Common Shares without par value ("Common Shares"). The name and address of the principal executive office of the issuer is: Counsel Corporation (the "Issuer"), Exchange Tower, Suite 1300, 130 King Street West, Toronto, Ontario, Canada M5X 1E3. Item 2. Identity and Background (a) This statement is being filed jointly by the following parties: (i) Bernard C. Sherman ("Dr. Sherman"), who directly owns 579,150 Common Shares of the Issuer, who has sole voting and dispositive control, as the sole trustee, of The Bernard Sherman 2000 Trust ("Sherman Trust"), who has voting and dispositive control, as president and a member, of Sherman Foundation ("Foundation") which directly owns 980,150 Common Shares of the Issuer, and who owns 99% of the outstanding capital stock of Sherman Holdings Inc. ("Sherman Holdings"); (ii) Sherman Trust which owns 99% of the common stock of Shermco Inc. ("Shermco"); (iii) Sherman Holdings which owns 99% of the preferred stock of Shermco; (iv) Shermco which owns all of the outstanding capital stock of Sherfam Inc. ("Sherfam"); (v) Sherfam which directly has beneficial ownership of 10,000,000 Common Shares issuable upon conversion of Preferred Shares, Series A of the Issuer and owns all the outstanding capital stock of Apotex Holdings Inc. ("Apotex Holdings"); (vi) Apotex Holdings which indirectly owns all of the outstanding capital stock of Apotex Inc. ("Apotex"); (vii) Apotex which directly owns 854,400 Common Shares of the Issuer; and (viii) the Foundation which directly owns 980,150 Common Shares of the Issuer (individually, a "Reporting Person" and, collectively, the "Reporting Persons").* For each of the corporations (or trust or foundation ) listed above, the following is a list of each executive officer, director and person controlling such corporation and each executive officer and director of any corporation or other person ultimately in control of such corporation (or trust or foundation): (i) Sherman Trust: Sole Trustee: Bernard C. Sherman (ii) Sherman Holdings: Directors: Bernard C. Sherman Michael ("Meyer") F. Florence Officers: Bernard C. Sherman President and Secretary Michael F. Florence Vice President (iii) Shermco: Directors: Bernard C. Sherman Michael F. Florence Jack M. Kay R. Craig Baxter ---------- *Neither the present filing nor anything contained herein shall be construed as an admission that any Reporting Person constitutes a "person" for any purpose other than Section 13(d) of the Act. 10
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Officers: Bernard C. Sherman Chief Executive Officer and Chairman Michael F. Florence President Jack M. Kay Vice President R. Craig Baxter Vice President, Secretary and Treasurer (iv) Sherfam: Directors: Bernard C. Sherman Michael F. Florence Jack M. Kay R. Craig Baxter Officers: Bernard C. Sherman Chairman Michael F. Florence President Jack M. Kay Vice President R. Craig Baxter Vice President, Secretary and Treasurer (v) Apotex Holdings: Directors: Bernard C. Sherman Michael F. Florence R. Craig Baxter Officers: Bernard C. Sherman President Michael F. Florence Vice President R. Craig Baxter Secretary and Treasurer (vi) Apotex: Directors: Bernard C. Sherman Jack M. Kay Officers: Bernard C. Sherman Chief Executive Officer and Chairman Jack M. Kay President and Chief Operating Officer Michael F. Florence Vice President Honey Sherman Vice President R. Craig Baxter Vice President, Secretary and Treasurer (vii) Foundation: Directors: Bernard C. Sherman Jack M. Kay Anthony Miezlaiskis Officers: Bernard C. Sherman President Jack M. Kay Secretary Anthony Miezlaiskis Treasurer 11
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(b) The principal office or residence address of each of the persons listed in Item 2(a) above is as follows: (i) Sherman Trust, Sherman Holdings, Shermco, Sherfam, Apotex Holdings, Apotex and Foundation each have a principal business and office address at 150 Signet Drive, Weston, Ontario, Canada M9L 1T9. (ii) Dr. Sherman has a principal office address at 150 Signet Drive, Weston, Ontario, Canada M9L 1T9. (iii) Michael F. Florence has a principal office address at 150 Signet Drive, Weston, Ontario, Canada M9L 1T9. (iv) Jack M. Kay has a principal office address at 150 Signet Drive, Weston, Ontario, Canada M9L 1T9. (v) R. Craig Baxter has a principal office address at 150 Signet Drive, Weston, Ontario, Canada M9L 1T9. (vi) Honey Sherman has a principal office address at 150 Signet Drive, Weston, Ontario, Canada M9L 1T9. (vii) Anthony Miezlaiskis has a principal office address at 150 Signet Drive, Weston, Ontario, Canada M9L 1T9. (c) The principal business of each of the persons listed in Item 2(a) above is as follows: (i) Sherman Trust: Family Trust (ii) Sherman Holdings: Holding Company (iii) Shermco: Holding Company (iv) Sherfam: Holding Company (v) Apotex Holdings: Holding Company (vi) Apotex : Pharmaceutical and Holding Company (vii) Foundation: Private Foundation (viii) Bernard C. Sherman: Dr. Sherman is Chief Executive Officer and Chairman of the Board of Apotex, a Canadian manufacturer of generic and brand name drugs. He is also Chairman of the Board of Cangene Corporation, sole trustee of Sherman Trust, 12
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President of Sherman Holdings, Chief Executive Officer and Chairman of Shermco, Chairman of Sherfam, President of Apotex Holdings and President of Foundation. (ix) Michael F. Florence: Mr. Florence has been President of Sherfam since 1989. He is also a director and Vice President of Sherman Holdings, a director and President of Shermco, a director and Vice President of Apotex Holdings and Vice President of Apotex. Mr. Florence and Dr. Sherman are brothers-in-law. (x) Jack M. Kay: Mr. Kay is President of Apotex. He is also a director of Shermco and Sherfam. (xi) R. Craig Baxter: Mr. Baxter is a director and Vice President, Secretary and Treasurer of Shermco. He is also a director and Vice President, Secretary and Treasurer of Sherfam, a director and Secretary and Treasurer of Apotex Holdings and Vice President, Secretary and Treasurer of Apotex. (xii) Honey Sherman is Vice President of Apotex. Ms. Sherman is the spouse of Dr. Sherman. (xiii) T. Miezlaiskis is Treasurer of Foundation. (d) During the past five years, none of the Reporting Persons or, to the best knowledge and belief of the Reporting Persons, any of the persons listed in Item 2(a) above has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) During the past five years, none of the Reporting Persons or, to the best knowledge and belief of the Reporting Persons, any of the persons listed in Item 2(a) above has been or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation relating to such laws. (f) The place of organization or citizenship of each of the persons listed in Item 2(a) above is as follows: (i) Sherman Trust: Trust formed under the laws of Ontario, Canada (ii) Sherman Holdings: Ontario Business Corporation (iii) Shermco: Ontario Business Corporation (iv) Sherfam: Ontario Business Corporation (v) Apotex Holdings: Ontario Business Corporation (vi) Apotex: Ontario Business Corporation (vii) Foundation: Foundation formed under the laws of British Columbia (viii) Dr. Sherman: Ontario, Canada 13
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(ix) Michael F. Florence: Ontario, Canada (x) Jack M. Kay: Ontario, Canada (xi) R. Craig Baxter: Ontario, Canada (xii) Honey Sherman: Ontario, Canada (xiii) T. Miezlaiskis: Ontario, Canada Item 3. Source and Amount of Funds or Other Consideration The Reporting Persons filed a Schedule 13G on October 23, 2003 to report the ownership of an aggregate of 2,334,800 Common Shares (1,076,400 of which were issuable upon maturity of the Issuer's 6% Convertible Unsecured Subordinated Debentures due October 31, 2003 (the "Debentures")). This Schedule 13D is being filed to report the acquisition of beneficial ownership of an additional 10,000,000 Common Shares by the Reporting Persons through the purchase on December 19, 2003 by Sherfam in a private placement (the "Placement") of 10,000,000 Preferred Shares, Series A of the Issuer ("Preferred Shares") for an aggregate purchase price of US$15,000,000, which Preferred Shares are convertible into Common Shares. The source of funds with which Sherfam acquired the Preferred Shares in the Placement was from working capital. From November 17 through November 19, 2003 Dr. Sherman purchased an aggregate of 78,900 Common Shares in open market transactions for an aggregate purchase price of US$101,662. Dr. Sherman used his personal funds in effecting such purchases. Also, the Issuer had commenced a cash tender offer to purchase all of the $40,861,000 aggregate principal amount of the Debentures outstanding (the "Tender Offer"). Pursuant to the Trust Indenture under which the Debentures were issued, the aggregate principal amount of any Debentures not tendered in the Tender Offer were to be paid on maturity in Common Shares. Holders of the Debentures that elected not to tender their Debentures into the Tender Offer were entitled to receive 690 Common Shares per US$1,000 principal amount of Debentures on maturity. Accordingly, on October 31, 2003, (i) as the holder of an aggregate of US$725,000 principal amount of Debentures, Dr. Sherman received 500,250 Common Shares and (ii) as the holder of an aggregate of US$835,000 principal amount of Debentures, Foundation received 576,150 Common Shares. Item 4. Purpose of Transaction The Reporting Persons acquired the Common Shares of the Issuer to which this Schedule 13D relates solely for investment purposes. Other than the right to designate a director of the Issuer which right Sherfam has not yet exercised and the possible acquisition of additional Common Shares upon conversion of any Preferred Shares issued to Sherfam in lieu of cash dividends on the Preferred Shares, the Reporting Persons do not have any present plans or proposals which relate to or would result in actions referred in clauses (a) through (j) of Item 4 of Schedule 13D. Each of the Reporting Persons expects to evaluate on an ongoing basis the Issuer's financial condition, business, operations and prospects, the market price of the Common Shares, conditions in the securities markets generally, general economic conditions and other factors. Accordingly, each Reporting Person reserves the right to change its plans and intentions at any time, as it deems appropriate. In particular, any Reporting Person may purchase additional Common Shares, or may sell or otherwise dispose of all or portions of the Common Shares beneficially owned by such Reporting Person, in public and private transactions and/or may enter into privately negotiated derivative transactions with institutional counterparts to hedge the market risk of some or all of its positions in, or to obtain greater exposure to, the Common Shares or other securities. Any such Transactions may be effected at any time or from time to time, subject to any applicable limitations imposed on the sale of any of their Common Shares by the Act and by applicable Canadian law. See "Item 6." 14
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Item 5. Interest in Securities of the Issuer (a) and (b) [Enlarge/Download Table] Amount Sole Power to Shared Power to Reporting Person Beneficially Percent of Sole Power to Vote Shared Power to Vote Dispose or Direct Dispose or Direct Owned (1) Class or Direct the Vote or Direct the Vote the Disposition of the Disposition of 1. Dr. Sherman 12,413,700(2) 21.2 579,150 11,834,550(2) 579,150 11,834,550(2) 2. Sherman Trust 10,854,400(2) 18.5 0 10,854,400(2) 0 10,854,400(2) 3. Sherman Holdings 10,854,400(2) 18.5 0 10,854,400(2) 0 10,854,400(2) 4. Shermco 10,854,400(2) 18.5 0 10,854,400(2) 0 10,854,400(2) 5. Shermfam 10,854,400(2) 18.5 0 10,854,400(2) 0 10,854,400(2) 6. Apotex Holdings 854,400 1.5 0 854,400 0 854,400 7. Apotex 854,400 1.5 0 854,400 0 854,400 8. Foundation 980,150 1.7 0 980,150 0 980,150 (1) By virtue of the relationships described in Item 2(a) above, Dr. Sherman, Sherman Trust, Sherman Holdings and Shermco may be deemed to possess indirect beneficial ownership of the Common Shares beneficially owned by Sherfam and Apotex. By virtue of the relationships described in Item 2(a) above, Apotex Holdings may be deemed to possess indirect beneficial ownership of the Common Shares beneficially owned by Apotex. By virtue of the relationships described in Item 2(a) above, Dr. Sherman may be deemed to possess indirect beneficial ownership of the Common Shares beneficially owned by Foundation. (2) 10,000,000 of such Common Shares are issuable upon conversion of the Preferred Shares. The filing of this statement by Sherman Trust, Sherman Holdings, Shermco and Apotex Holdings shall not be construed as an admission that any of Sherman Trust, Sherman Holdings, Shermco and Apotex Holdings, is, for the purposes of Section 13(d) of the Act, the beneficial owner of any securities covered by this statement. Because of the relationships described in Item 2(a) above, the Reporting Persons may be deemed to constitute a "group" within the meaning of Rule 13d-5 under the Act, and as such, each member of the group would be deemed to beneficially own, in the aggregate, all the shares of Common Stock held by members of the group. The Reporting Persons disclaim membership in a group. (c) The following purchase or sales of Common Shares have been made by the Reporting Persons in the past sixty days: 15
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[Enlarge/Download Table] Amount of Nature of Reporting Person Date of the Transaction Securities Involved Price Per Share Transaction Effected ---------------- ----------------------- ------------------------ --------------- --------------------- Dr. Sherman October 31, 2003 500,250 Common Shares Issued upon conversion of From Issuer US$725,000 principal amount of Debentures Foundation October 31, 2003 576,150 Common Shares Issued upon conversion of From Issuer US$835,000 principal amount of Debentures Dr. Sherman November 17, 2003 45,400 Common Shares $1.28 Open Market Purchase Dr. Sherman November 18, 2003 29,500 Common Shares $1.30 Open Market Purchase Dr. Sherman November 19, 2003 4,000 Common Shares $1.30 Open Market Purchase Sherfam December 19, 2003 10,000,000 Common Shares Issuable upon conversion of From Issuer 10,000,000 Preferred Shares (d) No person other than the Reporting Persons, with respect to the Common Shares beneficially owned by each of them, has any right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Common Shares. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer There are no contracts, arrangements, understandings or relationships (legal or otherwise) among the Reporting Persons and any other person with respect to the securities of the Issuer except for those set forth below: The Issuer has agreed with Sherfam that, as long as any Preferred Shares remain outstanding, except with Sherfam's prior written consent, the Issuer will not issue, or agree to issue, (a) any shares having rights equal or superior to the Preferred Shares or (b) any shares of the Issuer at a price less than US$1.50 per share or other securities of the Issuer entitling the holder thereof to acquires shares of the Issuer at a price less than US$1.50 per such security or share. The foregoing restriction does not apply to the exercise or conversion of securities issued prior to December 19, 2003 and to shares issued pursuant to employee option and benefit plans. The Issuer has agreed with Sherfam that, as long as any Preferred Shares are owned by Sherfam, Sherfam has the right to nominate Dr. Sherman (or such other individual acceptable to the Issuer and Sherfam) for election by the Issuer's shareholders as a director of the Issuer. If requested by Sherfam, the Issuer has agreed, in the interim, to increase the size of the Issuer's board of directors and appoint Dr. Sherman (or such other individual) as a director of the Issuer. Sherfam has not exercised this right as of the date of this Schedule 13D. Sherfam has agreed with the Issuer that until December 19, 2006 Sherfam will not sell, otherwise transfer, pledge or create a security interest in the Preferred Shares or the Common Shares issued upon conversion of the Preferred Shares. Notwithstanding the foregoing, transfers to "affiliates," "related persons" or "associates" (as such terms are defined by the Business Corporations 16
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Act (Ontario)) of Sherfam or to Dr. Sherman, his family members, trusts the beneficiaries of which include the foregoing permitted transferees or a charitable foundation of which Dr. Sherman is a trustee are permitted. The Issuer has agreed with Sherfam that, as long as any Preferred Shares remain outstanding, dividends declared by the Issuer on the Common Shares may not exceed US$0.09 per share per annum (on a non-cumulative basis). The Issuer has agreed that it will not declare or pay any dividends on the Common Shares, nor set aside funds for such purposes, if the Issuer is in default of its dividend or redemption obligations on the Preferred Shares. The Issuer has granted Sherfam the right, with certain exceptions, to include all or any part of the Common Shares issuable upon conversion of the Preferred Shares in any registration statement filed by the Issuer with the Securities and Exchange Commission (the "SEC") offering Common Shares for its own account. The Issuer has agreed not to grant U.S. registration rights equal to or superior to the foregoing rights granted Sherfam. The Issuer has agreed with Sherfam that the Issuer will not amend or otherwise alter any provisions of the Issuer's articles which adversely affect the holders of the Preferred Shares without the approval of the holders of the Preferred Shares. The Issuer has agreed with Sherfam that the Preferred Shares shall have the following rights: (i) Voting: In addition to the voting rights provided under applicable law, on all matters submitted to a vote of holders of Common Shares, a holder of Preferred Shares is entitled to the number of votes equal to the number of Common Shares into which the Preferred Shares are convertible (whether or not so converted) and in all ways have voting rights and powers equal to the Common Shares. (ii) Dividends: Holders of Preferred Shares are entitled to dividends on such Preferred Shares in priority to all other shares of the Issuer. Cumulative preferential dividends payable in cash at the rate of 6% per year calculated on the aggregate subscription price of such shares are to be paid. If (i) the Issuer does not pay all or any part of the cash dividend within seven days after any dividend payment date and (ii) the volume weighted average trading price of the Common Shares on the Toronto Stock Exchange ("TSX") for the five most recent days on which the Common Shares traded on the TSX ending on the trading day immediately prior to the relevant dividend payment date is equal to or less than US$1.76, the Issuer shall pay the accrued and unpaid dividends by way of a stock dividend payable in additional Preferred Shares. Notwithstanding the foregoing, the number of Preferred Shares issued as a stock dividend, when combined with the number of Common Shares issued in respect of accrued and unpaid dividends on conversion of the Preferred Shares cannot exceed 2,000,000 shares, subject to adjustment for subdivisions or consolidation of the Common Shares or Preferred Shares. In such case, the dividend shall be payable in cash and compound at the rate of 6% per year. No dividends may be declared or paid or set apart for any other shares of the Issuer if the Issuer fails to pay any of the aforementioned dividends to the holders of the Preferred Shares. (iii) Liquidation: In the event of the liquidation, dissolution or winding up of the Issuer, holders of the Preferred Shares are entitled to receive prior and in 17
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preference to any distribution of any of the assets and property of the Issuer to the holders of all other classes of the Issuer, an amount equal to the aggregate subscription price for the Preferred Shares plus all accrued and unpaid cumulative dividends on the Preferred Shares. (iv) Conversion: The Preferred Shares are convertible, at the option of the holders thereof, at any time after December 19, 2003, into Common Shares on a one-for-one basis, subject to adjustment for unpaid dividends and standard anti-dilution provisions involving share dividends, combinations or subdivisions of the Common Shares, reclassification and reorganization. The maximum aggregate number of Common Shares which may be issued on conversion of any accrued and unpaid dividends on the Preferred Shares so converted, when combined with Preferred Shares issued as a stock dividend in respect of accrued and unpaid dividends on the Preferred Shares, cannot exceed 2,000,000 shares, subject to adjustment for any subdivisions or consolidations of the Common Shares or Preferred Shares. The Issuer has the right to require conversion of the Preferred Shares at any time after December 19, 2004 as follows: (i) 25% of the Preferred Shares must be converted if the Common Shares have not traded at or below US$3.00 on the TSX for 30 consecutive trading days; (ii) An additional 25% of the Preferred Shares must be converted if the Common Shares have not traded at or below US$3.50 on the TSX for 30 consecutive trading days; (iii) An additional 25% of the Preferred Shares must be converted if the Common Shares have not traded at or below US$3.75 on the TSX for 30 consecutive trading days; and (iv) An additional 25% of the Preferred Shares must be converted if the Common Shares have not traded at or below US$4.00 on the TSX for 30 consecutive trading days. The Issuer's right to require conversion as described above must be exercised within 15 days of such right arising. Failure to so exercise the right leaves the Issuer with no further rights in respect of such 30 consecutive trading day period but such right will be available for any subsequent trading day period. (v) Redemption: At any time, and from time to time, on or after January 1, 2009, holders of the Preferred Shares have the right to request the Issuer to redeem all, or any part of, the Preferred Shares at a redemption price equal to the aggregate subscription price paid for the Preferred Shares plus all accrued and unpaid cumulative dividends in respect of such Preferred Shares, except for those Preferred Shares for which the Issuer has required conversion as described above. 18
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The foregoing descriptions in this Schedule 13D of the Preferred Shares are qualified in their entirety by reference to the SCHEDULE "A", as filed with the Ontario Ministry of Consumer and Commercial Relations, a copy of which is filed as Exhibit B hereto and is incorporated herein by reference. Item 7. Material to be Filed as Exhibits A copy of the agreement between the Reporting Persons that this Schedule 13D is filed on behalf of each of them is attached hereto as Exhibit A. A copy of SCHEDULE "A" described in Item 6 above is attached hereto as Exhibit B. 19
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Signature. After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: December 29, 2003 /s/ Bernard C. Sherman ---------------------- Bernard C. Sherman THE BERNARD SHERMAN 2000 TRUST By: /s/ Bernard C. Sherman ---------------------- Bernard C. Sherman Sole Trustee SHERMAN HOLDINGS INC. By: /s/ Bernard C. Sherman ---------------------- Bernard C. Sherman President SHERMCO INC. By: /s/ Bernard C. Sherman ---------------------- Bernard C. Sherman Chairman SHERFAM INC. By: /s/ Bernard C. Sherman ---------------------- Bernard C. Sherman Chairman APOTEX HOLDINGS INC. By: /s/ Bernard C. Sherman ---------------------- Bernard C. Sherman President APOTEX INC. By: /s/ Bernard C. Sherman ---------------------- Bernard C. Sherman Chairman SHERMAN FOUNDATION By: /s/ Bernard C. Sherman ---------------------- Bernard C. Sherman President 20
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EXHIBIT INDEX EXHIBIT DESCRIPTION ------- ----------- A Agreement Between Reporting Persons B SCHEDULE "A" 21

Dates Referenced Herein   and   Documents Incorporated by Reference

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This ‘SC 13D’ Filing    Date First  Last      Other Filings
1/1/0918
12/19/0616
12/19/0418
Filed on:12/29/03203,  4
12/19/031183,  4
11/19/0314
10/31/03143
10/23/0314SC 13D/A,  SC 13G
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