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Incorporation Number:BC0978557
ARTICLES OF
ChitrChatr CommunicationsInc.
(The“Company”)
TABLE OFCONTENTS
1. Interpretation |
2. Shares and ShareCertificates |
3. Issue ofShares |
4. ShareRegisters |
5. ShareTransfers |
6. Transmission ofShares |
7. Purchase, Redeem or Otherwise AcquireShares |
8. BorrowingPowers |
9. Alterations |
10. Meetings ofShareholders |
11. Proceedings at Meetings ofShareholders |
12. Votes ofShareholders |
13. Directors |
14. Election and Removal ofDirectors |
15. AlternateDirectors |
16. Power and Duties ofDirectors |
17. Disclosure of Interest of Directors andOfficers |
18. Proceedings ofDirectors |
19. Committees |
20. Officers |
21. Indemnification |
22. Dividends |
23. Accounting, Records andReports |
24. Notices |
25. Seal |
26. Prohibitions |
27. Change of Registered and RecordsOffice |
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1. | INTERPRETATION |
1.1 | Definitions |
In these Articles, unless the context otherwiserequires:
(1) | "board of directors", "directors" and "board" mean the directors or sole director oftheCompany for the timebeing; |
(2) | "Business Corporations Act" means theBusiness Corporations Act(British Columbia) from time to time in force and all amendments thereto and includes all regulationsandamendments thereto made pursuant to thatAct; |
(3) | “Interpretation Act” means theInterpretation Act(British Columbia) from time to time in force and all amendments thereto and includes all regulations and amendments thereto made pursuant to thatAct; |
(4) | "legal personal representative" means the personal or other legal representative of the shareholder; |
(5) | “public company” means a companythat: |
(a) | is a reportingissuer; |
(b) | is a reporting issuerequivalent; |
(c) | has registered its securities under theSecurities Exchange Actof 1934 of the United States ofAmerica; |
(d) | has any of its securities, within the meaning of theSecurities Act, traded on or through the facilities of a securities exchange;or |
(e) | has any of its securities, within the meaning of theSecurities Act, reported through the facilities of a quotation and trade reportingsystem |
(6) | “reporting issuer” has the same meaning as in theSecuritiesAct; |
(7) | “reporting issuer equivalent” means a corporation that, under the laws of any Canadian jurisdiction other than British Columbia, is a Reporting Issuer or an equivalent of a ReportingIssuer; |
(8) | "registered address" of a shareholder means the shareholder's address as recorded in the central securities register of theCompany; |
(9) | "seal" means the seal of the Company, ifany; |
(10) | “Securities Act” means theSecurities Act(BritishColumbia); |
(11) | “SecuritiesExchangeActof1934”meanstheUnitedStatesSecuritiesExchangeAct |
of 1934, asamended.
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Business Corporations ActandInterpretation ActDefinitionsApplicable
The definitions in theBusiness Corporations Actand the definitions and rules of construction in theInterpretation Act, with the necessary changes, so far as applicable, and unless the context requires otherwise, apply to these Articles as if they were an enactment. If there is a conflict between a definition in theBusiness Corporations Actand a definition or rule in theInterpretation Actrelating to a term used in these Articles, the definition in theBusiness Corporations Actwill prevail in relation to the use of the term in these Articles. If there is a conflict between these Articles and theBusiness Corporations Act, theBusiness Corporations Actwillprevail.
2. | SHARES AND SHARECERTIFICATES |
2.1 | Authorized ShareStructure |
The authorized share structure of the Company consists of shares of the class or classes and series, if any, described in the Notice of Articles of theCompany.
2.2 | Form of ShareCertificate |
Each share certificate issued by the Company must comply with, and be signed as required by theBusiness CorporationsAct.
2.3 | Shareholder Entitled to Certificate orAcknowledgment |
Each shareholder is entitled, without charge, to (a) one share certificate representingtheshares of each class or series of shares registered in the shareholder's name or (b) a non- transferable written acknowledgment of the shareholder's right to obtain such a share certificate, provided that in respect of a share held jointly by several persons, the Company is not bound to issue more than one share certificate and delivery of a share certificate for a share to one of several joint shareholders or to one of the shareholders' duly authorized agents will be sufficient delivery toall.
2.4 | Delivery byMail |
Any share certificate or non-transferable written acknowledgment of a shareholder's right to obtain a share certificate may be sent to the shareholder by mail at the shareholder's registered address and neither the Company nor any director, officer or agent of the Company is liable for any loss to the shareholder because the share certificate or acknowledgement is lost in the mail orstolen.
2.5 | Replacement of Worn Out or Defaced Certificate orAcknowledgement |
If the directors are satisfied that a share certificate or a non-transferable written acknowledgment of the shareholder's right to obtain a share certificate is worn out or defaced, they must, on production to them of the share certificate or acknowledgment, as the case may be, and on such other terms, if any, as they thinkfit:
(1) | order the share certificate or acknowledgement, as the case may be, to be cancelled;and |
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(2) | issue a replacement share certificate or acknowledgement, as the case maybe. |
2.6 Replacement of Lost, Stolen or Destroyed Certificate orAcknowledgement
If a share certificate or a non-transferable written acknowledgement of a shareholder’s right to obtain a share certificate is lost, stolen or destroyed, a replacement share certificate or acknowledgement, as the case may be, must be issued to the person entitled to that share certificate or acknowledgement, as the case may be, if the directorsreceive:
(1) | proof satisfactory to them that the share certificate or acknowledgment is lost, stolen or destroyed;and |
(2) | any indemnity the directors consideradequate. |
2.7 Splitting ShareCertificates
If a shareholder surrenders a share certificate to the Company with a written request that the Company issue in the shareholder's name two or more share certificates, each representing a specified number of shares and in the aggregate representing the same number of shares as the share certificate so surrendered, the Company must cancel the surrendered share certificate and issue replacement share certificates in accordance with thatrequest.
2.8 CertificateFee
There must be paid to the Company, in relation to the issue of any share certificate under Articles 2.5, 2.6 or 2.7, the amount, if any and which must not exceed the amount prescribed under theBusiness Corporations Act, determined by thedirectors.
2.9 Recognition ofTrusts
Except as required by law or statute or these Articles, no person will be recognized bytheCompany as holding any share upon any trust, and the Company is not bound by or compelled in any way to recognize (even when having notice thereof) any equitable, contingent, future or partial interest in any share or fraction of a share or (except as by law or statute or these Articles provided or as ordered by a court of competent jurisdiction) any other rights in respect of any share except an absolute right to the entirety thereof in the shareholder.
3. ISSUEOFSHARES
3.1 | DirectorsAuthorized |
Subject to theBusiness Corporations Actand the rights of the holders of issued shares of the Company, the Company may issue, allot, sell or otherwise dispose of the unissued shares, and issued shares held by the Company, at the times, to the persons, including directors, in the manner, on the terms and conditions and for the issue prices (including any premium at which shares with par value may be issued) that the directors may determine. The issue price for a share with par value must be equal to or greater than the par value of theshare.
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3.2 Commissions andDiscounts
The Company may at any time, pay a reasonable commission or allow a reasonable discount to any person in consideration of that person purchasing or agreeing to purchase shares of the Company from the Company or any other person procuring or agreeing to procure purchasers for shares of theCompany.
3.3 Brokerage
The Company may pay such brokerage fee or other consideration as may be lawful for or in connection with the sale or placement of itssecurities.
3.4 Conditions ofIssue
Except as provided for by theBusiness Corporations Act, no share may be issued until it is fully paid. A share is fully paidwhen:
(1) | consideration is provided to the Company for the issue of the share by one or more of thefollowing: |
(a) | past services performed for theCompany; |
(b) | property;or |
(c) | money; |
(2) | and the value of the consideration received by the Company equals or exceedstheissue price set for the share under Article3.1. |
3.5 | Share Purchase Warrants, Options andRights |
Subject to theBusiness Corporations Act, the Company may issue share purchase warrants, options and rights upon such terms and conditions as the directors determine, which share purchase warrants, options and rights may be issued alone or in conjunction with debentures, debenture stock, bonds, shares or any other securities issued or created by the Company from time totime.
4. SHAREREGISTERS
4.1 | Central SecuritiesRegister |
As required by and subject to theBusiness Corporations Act, the Company must maintain in British Columbia a central securities register. The directors may, subject to theBusiness Corporations Act, appoint an agent to maintain the central securities register. The directors may also appoint one or more agents, including the agent which keeps the central securities register, as transfer agent for its shares or any class or series of its shares, as the case may be, and the same or another agent as registrar for its shares or such class or series ofitsshares, as the case may be. The directors may terminate such appointment of any agent at any time and may appoint another agent in itsplace.
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4.2 ClosingRegister
The Company must not at any time close its central securitiesregister.
5. SHARETRANSFERS
5.1 | RegisteringTransfers |
A transfer of a share of the Company must not be registered unless the Company or the transfer agent or registrar for the class or series of share to be transferred hasreceived:
(1) | a duly signed instrument of transfer in respect of theshare; |
(2) | if a share certificate has been issued by the Company in respect of the share to be transferred, that sharecertificate; |
(3) | if a non-transferable written acknowledgement of the shareholder’s right to obtain a share certificate has been issued by the Company in respect of the share to be transferred, that acknowledgement;and |
(4) | such other evidence, if any, as the Company or the transfer agent or registrar for the class or series of share to be transferred may require to prove the title of the transferor or the transferor’s right to transfer the share, the due signing of the instrument of transfer and the right of the transferee to have the transferregistered. |
5.2 Form of Instrument ofTransfer
The instrument of transfer in respect of any share of the Company must be either in the form, if any, on the back of the Company's share certificates or in any other form that may be approved by the directors from time totime.
5.3 Transferor RemainsShareholder
Except to the extent that theBusiness Corporations Actotherwise provides, the transferor of shares is deemed to remain the holder of the shares until the name of the transferee is entered in a securities register of the Company in respect of thetransfer.
5.4 Signing of Instrument ofTransfer
If a shareholder, or his or her duly authorized attorney, signs an instrument of transfer in respect of shares registered in the name of the shareholder, the signed instrument of transfer constitutes a complete and sufficient authority to the Company and its directors, officersandagents to register the number of shares specified in the instrument of transfer or specified in any other manner, or, if no number is specified, all the shares represented by the share certificates or set out in the written acknowledgments deposited with the instrument of transfer:
(1) | in the name of the person named as transferee in that instrument of transfer;or |
(2) | if no person is named as transferee in that instrument of transfer, in the name of the person on whose behalf the instrument is deposited for the purpose of having the transferregistered. |
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5.5 Enquiry as to Title NotRequired
Neither the Company nor any director, officer or agent of the Company is bound to inquire into the title of the person named in the instrument of transfer as transferee or, if no person is named as transferee in the instrument of transfer, of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered or is liable for any claim related to registering the transfer by the shareholder or by any intermediate owner or holder of the shares, of any interest in the shares, of any share certificate representing such shares or of any written acknowledgment of a right to obtain a share certificate for such shares.
5.6 TransferFee
There must be paid to the Company or the Company’s transfer agent, in relation to the registration of any transfer, the amount, if any, determined by thedirectors.
6. TRANSMISSIONOFSHARES
6.1 | Legal Personal Representative Recognized onDeath |
In case of the death of a shareholder, the legal personal representative, or if the shareholder was a joint holder, the surviving joint holder, will be the only person recognized by the Company as having any title to the shareholder's interest in the shares. Before recognizing a person as a legal personal representative, the directors may require proof of appointment by a court of competent jurisdiction, a grant of letters probate, letters of administration or such other evidence or documents as the directors considerappropriate.
6.2 Rights of Legal PersonalRepresentative
The legal personal representative has the same rights, privileges and obligations that attach to the shares held by the shareholder, including the right to transfer the shares in accordance with these Articles, provided the documents required by theBusinessCorporationsActand the directors have been deposited with the Company. This Article 6.2 does not apply in the case of the death of a shareholder with respect to the shares registered in the shareholder’s name and the name of another person in jointtenancy.
7. PURCHASE,REDEEMOROTHERWISE ACQUIRESHARES
7.1 | Company Authorized to Purchase, Redeem or Otherwise AcquireShares |
Subject to Article 7.2, the special rights or restrictions attached to the shares of any class or series, theBusiness Corporations Act,and securities laws and regulations of general application, the Company may, if authorized by the directors, purchase, redeem or otherwise acquire any of its shares at the price and upon the terms specified in suchresolution.
7.2 Purchase WhenInsolvent
The Company must not make a payment or provide any other consideration to purchase, redeem or otherwise acquire any of its shares if there are reasonable grounds for believing that:
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(1) | the Company is insolvent;or |
(2) | making the payment or providing the consideration would render the Company insolvent. |
7.3 Sale and Voting of Purchased, Redeemed or Otherwise AcquiredShares
If the Company retains a share redeemed, purchased or otherwise acquired by it, the Company may sell, gift or otherwise dispose of the share, but, while such share is held bytheCompany,it:
(1) | is not entitled to vote the share at a meeting of itsshareholders; |
(2) | must not pay a dividend in respect of the share;and |
(3) | must not make any other distribution in respect of theshare. |
8. | BORROWINGPOWERS |
The Company, if authorized by the directors,may:
(1) | borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they considerappropriate; |
(2) | issue bonds, debentures and other debt obligations either outright or as securityforany liability or obligation of the Company or any other person and at such discounts or premiums and on such other terms as they considerappropriate; |
(3) | guarantee the repayment of money by any other person or the performance ofanyobligation of any other person;and |
(4) | mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of the present and future assets and undertaking of theCompany. |
9. ALTERATIONS
9.1 | Alteration of Authorized ShareStructure |
Subject to theBusiness Corporations Act, the Company may by directors resolution subdivideor consolidatealloranyofitsunissued,orfullypaidissued,sharesandifapplicable,alteritsNotice of Articles and, if applicable, Articles, accordingly; and subject to Article 9.2 and theBusiness CorporationsAct,theCompanymaybyordinaryresolution:
(1) | create one or more classes or series of shares or, if none of the shares of a class or series of shares are allotted or issued, eliminate that class or series ofshares; |
(2) | increase, reduce or eliminate the maximum number of shares that the Company is authorized to issue out of any class or series of shares or establish a maximum number of shares that the Company is authorized to issue out of any class or series of shares for which no maximum isestablished; |
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(3) | if the Company is authorized to issue shares of a class of share with parvalue: |
(a) | decrease the par value of those shares;or |
(b) | if none of the shares of that class of shares are allotted or issued, increasethepar value of thoseshares; |
(4) | change all or any of its unissued, or fully paid issued, shares with par value into shares without par value or any of its unissued shares without par value into shares withpar value; |
(5) | alter the identifying name of any of its shares;or |
(6) | otherwise alter its shares or authorized share structure when required or permitted to do so by theBusiness Corporations Actwhere it does not specify by a special resolution; |
and, if applicable, alter its Notice of Articles, and if applicable, its Articles,accordingly.
9.2 Special Rights orRestrictions
Subject to theBusiness Corporations Actand in particular those provisions of the Act relating to the rights of holders of outstanding shares to vote if their rights are prejudiced or interfered with, the Company may by ordinaryresolution:
(1) | create special rights or restrictions for, and attach those special rights or restrictions to, the shares of any class or series of shares, whether or not any or all of those shares have been issued;or |
(2) | vary or delete any special rights or restrictions attached to the shares of any class or series of shares, whether or not any or all of those shares have been issued and alter its Notice of Articles and Articlesaccordingly. |
9.3 Change ofName
The Company may by directors resolution authorize an alteration of its Notice of Articles in order to change itsname.
9.4 OtherAlterations
If theBusiness Corporations Actdoes not specify the type of resolution and these Articles do not specify another type of resolution, the Company may by ordinary resolution alter these Articles.
10. MEETINGSOFSHAREHOLDERS
10.1 | Annual GeneralMeetings |
Unless an annual general meeting is deferred or waived in accordance with theBusiness Corporations Act,the Company must hold its first annual general meeting within 18 months after the date on which it was incorporated or otherwise recognized, and after that must hold anannualgeneralmeetingatleastonceineachcalendaryearandnotmorethan15months
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after the last annual reference date at such time and place as may be determined bythedirectors.
10.2 Resolution Instead of Annual GeneralMeeting
If all the shareholders who are entitled to vote at an annual general meeting consent in writing by unanimous resolution under theBusiness Corporations Actto all of the business that is required to be transacted at that annual general meeting, the annual general meeting is deemed to have been held on the date of the unanimous resolution. The shareholders must, in any unanimous resolution passed under this Article 10.2, select as the Company's annual reference date a date that would be appropriate for the holding of the applicable annual generalmeeting.
10.3 Calling of Meetings ofShareholders
The directors may, whenever they think fit, call a meeting ofshareholders.
10.4 Notice for Meetings ofShareholders
The Company must send notice of the date, time and location of any meeting of shareholders (including, without limitation, any notice specifying the intention to propose a resolution as an exceptional resolution, a special resolution or a special separate resolution, and any notice to consider approving amalgamation into a foreign jurisdiction, an arrangement or the adoption of an amalgamation agreement, and any notice of a general meeting, class meeting or series meeting), in the manner provided in these Articles, or in such other manner, if any, as may be prescribed by ordinary resolution (whether previous notice of the resolution has been given or not), to each shareholder entitled to attend the meeting, to each director and to the auditor of the Company, unless these Articles otherwise provide, at least the following number of days before themeeting:
(1) | if and for so long as the Company is a Public Company, 21days; |
(2) | otherwise, 10days. |
10.5 Notice of Resolution to Which Shareholders MayDissent
The Company must send to each of its shareholders, whether or not their shares carrytheright to vote, a notice of any meeting of shareholders at which a resolution entitling shareholders to dissent is to be considered specifying the date of the meeting and containing a statement advising of the right to send a notice of dissent together with a copy oftheproposed resolution at least the following number of days before themeeting:
(1) | if and for so long as the Company is a Public Company, 21days; |
(2) | otherwise, 10days. |
10.6 Record Date forNotice
The directors may set a date as the record date for the purpose of determining shareholders entitled to notice of any meeting of shareholders. The record date must not precede the date onwhichthemeetingistobeheldbymorethantwomonthsor,inthecaseofageneral
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meeting requisitioned by shareholders under theBusinessCorporationsAct,by more than four months. The record date must not precede the date on which the meeting is held by fewerthan:
(1) | if and for so long as the Company is a Public Company, 21days; |
(2) | otherwise, 10days. |
If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of themeeting.
10.7 Record Date forVoting
The directors may set a date as the record date for the purpose of determining shareholders entitled to vote at any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under theBusinessCorporationsAct,by more than four months. If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of themeeting.
10.8 Failure to Give Notice and Waiver ofNotice
The accidental omission to send notice of any meeting to, or the non-receipt of any noticeby,any of the persons entitled to notice does not invalidate any proceedings at that meeting.Anyperson entitled to notice of a meeting of shareholders may, in writing or otherwise, waive or reduce the period of notice of such meeting. Attendance of a person at a meeting of shareholders is a waiver of entitlement to notice of the meeting unless that person attendsthemeeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfullycalled.
10.9 Notice of Special Business at Meetings ofShareholders
If a meeting of shareholders is to consider special business within the meaning of Article 11.1, the notice of meetingmust:
(1) | state the general nature of the special business;and |
(2) | if the special business includes considering, approving, ratifying, adopting or authorizing any document or the signing of or giving of effect to any document, have attached to it a copy of the document or state that a copy of the document will be available for inspection byshareholders: |
(a) | at the Company's records office, or at such other reasonably accessible location in British Columbia as is specified in the notice;and |
(b) | during statutory business hours on any one or more specified days before the day set for the holding of themeeting. |
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11. PROCEEDINGSATMEETINGSOFSHAREHOLDERS
11.1 | SpecialBusiness |
At a meeting of shareholders, the following business is specialbusiness:
(1) | at a meeting of shareholders that is not an annual general meeting, all business is special business except business relating to the conduct of or voting at themeeting; |
(2) | at an annual general meeting, all business is special business except for thefollowing: |
(a) | business relating to the conduct of or voting at themeeting; |
(b) | consideration of any financial statements of the Company presented to the meeting; |
(c) | consideration of any reports of the directors orauditor; |
(d) | the setting or changing of the number ofdirectors; |
(e) | the election or appointment ofdirectors; |
(f) | the appointment of anauditor; |
(g) | the setting of the remuneration of anauditor; |
(h) | business arising out of a report of the directors not requiring the passing of a special resolution or an exceptionalresolution; |
(i) | any other business which, under these Articles or theBusinessCorporationsAct,may be transacted at a meeting of shareholders without prior notice of the business being given to theshareholders. |
11.2 SpecialMajority
The majority of votes required for the Company to pass a special resolution at a meeting of shareholders is 2/3 of the votes cast on theresolution.
11.3 Quorum
Subject to the special rights or restrictions attached to the shares of any class or series of shares, the quorum for the transaction of business at a meeting of shareholders isoneshareholder present in person (or, being a corporation, partnership, trust or other non- individual legal entity represented in accordance with the provisions of theBusinessCorporationsAct),or by proxy holding not less than one voting share of the Company entitled to be voted at themeeting.
11.4 One Shareholder May ConstituteQuorum
If there is only one shareholder entitled to vote at a meeting ofshareholders:
(1) | the quorum is one person who is, or who represents by proxy, that shareholder,and |
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(2) | that shareholder, present in person or by proxy, may constitutethemeeting. |
11.5 Other Persons MayAttend
In addition to those persons who are entitled to vote at a meeting of shareholders, the only other persons entitled to be present at the meeting are the directors, the president (if any), the secretary (if any), the assistant secretary (if any), any lawyer for the Company, the auditor of the Company and any other persons invited by the directors are entitled to attend any meeting of shareholders, but if any of those persons does attend a meeting of shareholders, that person is not to be counted in the quorum and is not entitled to vote at the meeting unless that person is a shareholder or proxy holder entitled to vote at themeeting.
11.6 Requirement ofQuorum
No business, other than the election of a chair of the meeting and the adjournment of the meeting, may be transacted at any meeting of shareholders unless a quorum of shareholders entitled to vote is present at the commencement of the meeting, but such quorum need not be present throughout themeeting.
11.7 Lack ofQuorum
If, within one-half hour from the time set for the holding of a meeting of shareholders, a quorum is notpresent:
(1) | in the case of a general meeting requisitioned by shareholders, the meeting is dissolved,and |
(2) | in the case of any other meeting of shareholders, the meeting stands adjourned to the same day in the next week at the same time andplace. |
11.8 Lack of Quorum at SucceedingMeeting
If, at the meeting to which the meeting referred to in Article 11.7(2) was adjourned, a quorum is not present within one-half hour from the time set for the holding of the meeting, the person or persons present and being, or representing by proxy, one or more shareholders entitled to attend and vote at the meeting shall be deemed to constitute aquorum.
11.9 Chair
The following individual is entitled to preside as chair at a meeting ofshareholders:
(1) | the chair of the board, if any;or |
(2) | if the chair of the board is absent or unwilling to act as chair of the meeting,thepresident, ifany. |
11.10 Election of AlternateChair
If, at any meeting of shareholders, there is no chair of the board or president present within 15 minutes after the time set for holding the meeting, or if the chair of the board and the president areunwillingtoactaschairofthemeeting,orifthechairoftheboardandthepresidenthave
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advised the secretary, if any, or any director present at the meeting, that they will not be present at the meeting, the directors present must choose one of their number or thelawyerfor the Company to be chair of the meeting or if all of the directors present decline to take the chair or fail to so choose or if no director or lawyer for the Company is present, the shareholders entitled to vote at the meeting who are present in person or by proxymaychoose any person present at the meeting to chair themeeting.
11.11 Adjournments
The chair of a meeting of shareholders may, and if so directed by the meeting must, adjourn the meeting from time to time and from place to place, but no business may be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment tookplace.
11.12 Notice of AdjournedMeeting
It is not necessary to give any notice of an adjourned meeting of shareholders or of the business to be transacted at an adjourned meeting of shareholders except that, when a meeting is adjourned for 30 days or more, notice of the adjourned meeting must be given as in the case of the originalmeeting.
11.13 Decisions by Show of Hands orPoll
Subject to theBusiness Corporations Act,every motion put to a vote at a meeting of shareholders will be decided on a show of hands unless a poll, before or on the declaration of the result of the vote by show of hands, is directed by the chair or demanded by at least one shareholder entitled to vote who is present in person or byproxy.
11.14 | Declaration ofResult |
The chair of a meeting of shareholders must declare to the meeting the decision on every question in accordance with the result of the show of hands or the poll, as the case may be, and that decision must be entered in the minutes of the meeting. A declaration of the chair that a resolution is carried by the necessary majority or is defeated is, unless a poll is directed by the chair or demanded under Article 11.13, conclusive evidence without proof of the number or proportion of the votes recorded in favour of or against theresolution.
11.15 | Motion Need Not beSeconded |
No motion proposed at a meeting of shareholders need be seconded unless the chair ofthemeeting rules otherwise, and the chair of any meeting of shareholders is entitled to propose or second amotion.
11.16 | CastingVote |
In case of an equality of votes, the chair of a meeting of shareholders does not, either on a show of hands or on a poll, have a second or casting vote in addition to the vote or votes to which the chair may be entitled as ashareholder.
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11.17 Manner of TakingPoll
Subject to Article 11.18, if a poll is duly demanded at a meeting ofshareholders:
(1) | the poll must betaken: |
(a) | at the meeting, or within seven days after the date of the meeting, as the chair of the meeting directs;and |
(b) | in the manner, at the time and at the place that the chair of the meetingdirects; |
(2) | the result of the poll is deemed to be the decision of the meeting at which the poll is demanded;and |
(3) | the demand for the poll may be withdrawn by the person who demandedit. |
11.18 Demand for Poll onAdjournment
A poll demanded at a meeting of shareholders on a question of adjournment must be taken immediately at themeeting.
11.19 Chair Must ResolveDispute
In the case of any dispute as to the admission or rejection of a vote given on a poll, the chair of the meeting must determine the dispute, and his or her determination made in good faith is final andconclusive.
11.20 Casting ofVotes
On a poll, a shareholder entitled to more than one vote need not cast all the votes in the same way.
11.21 Demand forPoll
No poll may be demanded in respect of the vote by which a chair of a meeting of shareholders iselected.
11.22 Demand for Poll Not to Prevent Continuance ofMeeting
The demand for a poll at a meeting of shareholders does not, unless the chair of the meeting so rules, prevent the continuation of a meeting for the transaction of any business other than the question on which a poll has beendemanded.
11.23 Retention of Ballots andProxies
The Company must, for at least three months after a meeting of shareholders, keep each ballot cast on a poll and each proxy voted at the meeting, and, during that period, make them available for inspection during normal business hours by any shareholder or proxyholder entitled to vote at the meeting. At the end of such three month period, the Companymaydestroy such ballots andproxies.
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12. VOTESOFSHAREHOLDERS
12.1 | Number of Votes by Shareholder or byShares |
Subject to any special rights or restrictions attached to any shares and to the restrictions imposed on joint shareholders under Article12.3:
(1) | on a vote by show of hands, every person present who is a shareholder or proxy holder and entitled to vote on the matter has one vote;and |
(2) | on a poll, every shareholder entitled to vote on the matter has one vote in respect of each share entitled to be voted on the matter and held by that shareholder andmayexercise that vote either in person or byproxy. |
12.2 Votes of Persons in RepresentativeCapacity
A person who is not a shareholder may vote at a meeting of shareholders, whether on a show of hands or on a poll, and may appoint a proxy holder to act at the meeting, if, before doing so, the person satisfies the chair of the meeting, or the directors, that the person is a legal personal representative or a trustee in bankruptcy for a shareholder who is entitled to vote at themeeting.
12.3 Votes by JointHolders
If there are joint shareholders registered in respect of anyshare:
(1) | any one of the joint shareholders may vote at any meeting of shareholders,eitherpersonally or by proxy, in respect of the shares as if that joint shareholder were solely entitled to it;or |
(2) | if more than one of the joint shareholders is present at any meeting of shareholders, personally or by proxy and more than one of them votes in respect of that share, then only the vote of the joint shareholder present whose name stands first on the central securities register in respect of the share will becounted. |
12.4 Legal Personal Representatives as JointShareholders
Two or more legal personal representatives of a shareholder in whose sole name any share is registered are, for the purposes of Article 12.3, deemed to be joint shareholders registered in respect of thatshare.
12.5 Representative of a CorporateShareholder
If a corporation, that is not a subsidiary of the Company, is a shareholder, that corporation may appoint a person to act as its representative at any meeting of shareholders oftheCompany,and:
(1) | for that purpose, the instrument appointing a representativemust: |
(a) | be received at the registered office of the Company or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least thenumberofbusinessdaysspecifiedinthenoticeforthereceiptofproxies, |
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or if no number of days is specified, two business days before the day set for the holding of the meeting or any adjourned meeting;or
(b) | be provided, at the meeting or any adjourned meeting, to the chair of the meeting or any adjourned meeting to a person designated by the chair of the meeting or adjournedmeeting; |
(2) | if a representative is appointed under this Article12.5: |
(a) | the representative is entitled to exercise in respect of and at that meeting the same rights on behalf of the corporation as that corporation could exercise if it were a shareholder who is an individual, including, without limitation, the right to appoint a proxy holder;and |
(b) | the representative, if present at the meeting, is to be counted for the purpose of forming a quorum and is deemed to be a shareholder present in person at themeeting. |
Evidence of the appointment of any such representative may be sent to the Company by written instrument, fax or any other method of transmitting legibly recordedmessages.
12.6 Proxy Provisions Do Not Apply to AllCompanies
If and for so long as the Company is a Public Company or a pre-existing reporting company which has the Statutory Reporting Company Provisions as part of its Articles or to which the Statutory Reporting Company Provisions apply, Articles 12.7 to 12.15 apply only insofar as they are not inconsistent with any securities legislation in any province or territory of Canada or in the federal jurisdiction of the United States or in any state of the United States that is applicable to the Company insofar as they are not inconsistent with the regulations and rules made and promulgated under that legislation and all administrative policy statements, blanket order and rulings, notices and other administrative directions issued by securities commissions or similar authorities appointed under thatlegislation.
12.7 Appointment of ProxyHolders
Every shareholder of the Company, including a corporation that is a shareholder but not a subsidiary of the Company, entitled to vote at a meeting of shareholders of the Company may, by proxy, appoint one or more (but not more than five) proxy holders to attend and act at the meeting in the manner, to the extent and with the powers conferred by theproxy.
12.8 Alternate ProxyHolders
A shareholder may appoint one or more alternate proxy holders to act in the place of an absent proxyholder.
12.9 When Proxy Holder Need Not BeShareholder
A person must not be appointed as a proxy holder unless the person is a shareholder, although a person who is not a shareholder may be appointed as a proxy holderif.
(1) | the person appointing the proxy holder is a corporation or a representative ofa |
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corporation appointed under Article12.5;
(2) | the Company has at the time of the meeting for which the proxy holder is to be appointed only one shareholder entitled to vote at themeeting; |
(3) | or the shareholders present in person or by proxy at and entitled to vote at the meeting for which the proxy holder is to be appointed, by a resolution on whichtheproxy holder is not entitled to vote but in respect of which the proxy holder is to be counted in the quorum, permit the proxy holder to attend and vote at the meeting;or |
(4) | the Company is a PublicCompany. |
12.10 Deposit ofProxy
A proxy for a meeting of shareholdersmust:
(1) | be received at the registered office of the Company or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice, or if no number of days is specified, two business days before the day set for the holding of the meeting or any adjourned meeting;or |
(2) | unless the notice provides otherwise, be provided, at the meeting or any adjourned meeting, to the chair of the meeting or adjourned meeting or to a person designated by the chair of the meeting or the adjournedmeeting. |
A proxy may be sent to the Company by written instrument, fax or any other method of transmitting legibly recorded messages, including through Internet or telephone voting or by email, if permitted by the notice calling the meeting or the information circular for themeeting.
12.11 Validity of ProxyVote
A vote given in accordance with the terms of a proxy is valid notwithstanding the death or incapacity of the shareholder giving the proxy and despite the revocation of the proxy ortherevocation of the authority under which the proxy is given, unless notice in writing of that death, incapacity or revocation isreceived:
(1) | at the registered office of the Company, at any time up to and including the last business day before the day set for the holding of the meeting or any adjourned meeting at which the proxy is to be used;or |
(2) | at the meeting or any adjourned meeting by the chair of the meeting or adjourned meeting, before any vote in respect of which the proxy has been given, has been taken. |
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12.12 Form ofProxy
A proxy, whether for a specified meeting or otherwise, must be either in the following form or in any other form approved by the directors or the chair of themeeting:
[nameofcompany]
(the“Company”)
The undersigned, being a shareholder of the Company, hereby appoints[name]or,failing that person,[name],asproxy holder for the undersigned to attend, act and vote for and on behalf of the undersigned at the meeting of shareholdersofthe Company to be held on[month,day, year]and at any adjournment of thatmeeting.
Numberofsharesinrespectofwhich this proxyisgiven (ifnonumberisspecified, thenthis proxy if given in respect of all shares registered in the name of theshareholder):
Signed[month,day,year]
[Signatureofshareholder]
[Nameofshareholderprinted]
12.13 Revocation ofProxy
Subject to Article 12.14, every proxy may be revoked by an instrument in writing that is received:
(1) | at the registered office of the Company at any time up to and including the last business day before the day set for the holding of the meeting or any adjourned meeting at which the proxy is to be used;or |
(2) | at the meeting or any adjourned meeting, by the chair of the meeting or adjourned meeting, before any vote in respect of which the proxy has been given, has been taken. |
12.14 Revocation of Proxy Must BeSigned
An instrument referred to in Article 12.13 must be signed asfollows:
(1) | if the shareholder for whom the proxy holder is appointed is an individual, the instrument must be signed by the shareholder or his or her legal personal representative or trustee inbankruptcy; |
(2) | if the shareholder for whom the proxy holder is appointed is a corporation, the instrument must be signed by the corporation or by a representative appointed for the corporation under Article12.5. |
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12.15 Production of Evidence of Authority toVote
The chair of any meeting of shareholders may, but need not, inquire into the authority of any person to vote at the meeting and may, but need not, demand from that person production of evidence as to the existence of the authority tovote.
13. DIRECTORS
13.1 | First Directors, Number ofDirectors |
The first directors are the persons designated as directors of the Company in the Notice of Articles that applies to the Company when it is recognized under theBusinessCorporationsAct. The number of directors, excluding additional directors appointed under Article 14.8, is setat:
(1) | subject to paragraphs (2) and (3), the number of directors that is equal to the number of the Company's firstdirectors; |
(2) | if the Company is a Public Company, the greater of three and the most recently setof: |
(a) | the number of directors set by ordinary resolution (whether or not previous notice of the resolution was given);and |
(b) | the number of directors set under Article14.4; |
(3) | if the Company is not a Public Company, the most recently setof: |
(a) | the number of directors set by ordinary resolution (whether or not previous notice of the resolution was given);and |
(b) | the number of directors set under Article14.4. |
13.2 Change in Number ofDirectors
If the number of directors is set under Articles 13.1(2)(a) or13.1(3)(a):
(1) | the shareholders by ordinary resolution may elect or appoint the directors needed to fill any vacancies in the board of directors up to thatnumber; |
(2) | if the shareholders do not elect or appoint the directors needed to fill any vacancies in the board of directors up to that number contemporaneously with the setting of that number, then the directors, subject to Article 14.8, may appoint, directors to fill those vacancies. |
13.3 Directors' Acts Valid DespiteVacancy
An act or proceeding of the directors is not invalid merely because fewer than the number of directors set or otherwise required under these Articles is inoffice.
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13.4 Qualifications ofDirectors
A director is not required to hold a share in the capital of the Company as qualification for his or her office but must be qualified as required by theBusinessCorporationsActto become, act or continue to act as adirector.
13.5 Remuneration ofDirectors
The directors are entitled to the remuneration for acting as directors, if any, as the directors may from time to time determine. If the directors so decide, the remuneration of the directors, if any, will be determined by the shareholders. That remuneration may be in addition toanysalary or other remuneration paid to any officer or employee of the Company as such, who is also adirector.
13.6 Reimbursement of Expenses ofDirectors
The Company must reimburse each director for the reasonable expenses that he or shemayincur in and about the business of theCompany.
13.7 Special Remuneration forDirectors
If any director performs any professional or other services for the Company that intheopinion of the directors are outside the ordinary duties of a director, or if any director is otherwise specially occupied in or about the Company's business, he or she may be paid remuneration fixed by the directors, or, at the option of that director, fixed by ordinary resolution, and such remuneration may be either in addition to, or in substitution for,anyother remuneration that he or she may be entitled toreceive.
13.8 Gratuity, Pension or Allowance on Retirement ofDirector
Unless otherwise determined by ordinary resolution, the directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to any director who has heldanysalaried office or place of profit with the Company or to his or her spouse or dependantsandmay make contributions to any fund and pay premiums for the purchase or provision ofanysuch gratuity, pension orallowance.
14. ELECTIONANDREMOVALOFDIRECTORS
14.1 | Election at Annual GeneralMeeting |
At every annual general meeting and in every unanimous resolution contemplated by Article 10.2:
(1) | the shareholders entitled to vote at the annual general meeting for the election of directors must elect, or in the unanimous resolution appoint, a board of directors consisting of the number of directors set by such resolution or for the time beingsetunder these Articles;and |
(2) | all directors cease to hold office immediately before the election or appointment of directors under paragraph (1), but are eligible for re-election orre-appointment. |
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14.2 Consent to be aDirector
No election, appointment or designation of an individual as a director is validunless:
(1) | that individual consents to be a director in the manner provided for in theBusiness CorporationsAct; |
(2) | that individual is elected or appointed at a meeting at which the individual is present and the individual does not refuse, at the meeting, to be a director;or |
(3) | with respect to first directors, the designation is otherwise valid under theBusiness CorporationsAct. |
14.3 Failure to Elect or AppointDirectors
If:
(1) | the Company fails to hold an annual general meeting or all the shareholders who are entitled to vote at an annual general meeting fail to pass the unanimous resolution contemplated by Article 10.2, on or before the date by which the annual general meeting is required to be held under theBusiness Corporations Act;or |
(2) | the shareholders fail, at the annual general meeting or in the unanimous resolution contemplated by Article 10.2, to elect or appoint anydirectors; |
then each director then in office continues to hold office until the earlier of:
(3) | the date on which his or her successor is elected or appointed;and |
(4) | the date on which he or she otherwise ceases to hold office under theBusiness Corporations Actor theseArticles. |
14.4 Places of Retiring Directors NotFilled
If, at any meeting of shareholders at which there should be an election of directors,theplaces of any of the retiring directors are not filled by that election, those retiring directors who are not re-elected and who are asked by the newly elected directors to continue in office will, if willing to do so, continue in office to complete the number of directors for the time being set pursuant to these Articles until further new directors are elected at a meeting of shareholders convened for that purpose. If any such election or continuance of directors does not result in the election or continuance of the number of directors for the time being set pursuant to these Articles, the number of directors of the Company is deemed to be set at the number of directors actually elected or continued inoffice.
14.5 Directors May Fill CasualVacancies
Any casual vacancy occurring in the board of directors may be filled by thedirectors.
14.6 Remaining Directors Power toAct
The directors may act notwithstanding any vacancy in the board of directors. If the Company hasfewerdirectorsinofficethanthenumbersetpursuanttotheseArticlesasthequorumof
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directors, the directors may act for the purpose of appointing directors up to that number or of summoning a meeting of shareholders for the purpose of filling any vacancies on the board of directors or, subject to theBusiness Corporations Act, for any other purpose.
14.7 Shareholders May FillVacancies
The shareholders may elect or appoint additional directors to the board of directors by ordinaryresolution.
14.8 AdditionalDirectors
Notwithstanding Articles 13.1 and 13.2, between annual general meetings or unanimous resolutions contemplated by Article 10.2, the directors may appoint one or more additional directors, but the number of additional directors appointed under this Article 14.8 must not at any timeexceed:
(1) | one-third of the number of first directors, if, at the time of the appointments, one or more of the first directors have not yet completed their first term of office;or |
(2) | in any other case, one-third of the number of the current directors who were elected or appointed as directors other than under this Article14.8. |
Any director so appointed ceases to hold office immediately before the next election or appointment of directors under Article 14.1(1), but is eligible for re-election orre-appointment.
14.9 Ceasing to be aDirector
A director ceases to be a directorwhen:
(1) | the term of office of the directorexpires; |
(2) | the directordies; |
(3) | the director resigns as a director by notice in writing provided to the Company or a lawyer for the Company;or |
(4) | the director is removed from office pursuant to Articles 14.10 or14.11. |
14.10 Removal of Director byShareholders
The Company may remove any director before the expiration of his or her term of office by ordinary resolution. In that event, the shareholders may elect, or appoint by ordinary resolution, a director to fill the resulting vacancy. If the shareholders do not elect or appoint a director to fill the resulting vacancy contemporaneously with the removal, then the directors may appoint or the shareholders may elect, or appoint by ordinary resolution, a director to fill thatvacancy.
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14.11 Removal of Director byDirectors
The directors may remove any director before the expiration of his or her term of office ifthedirector is convicted of an indictable offence, or if the director ceases to be qualified to act as a director of a company and does not promptly resign, and the directors may appoint a director to fill the resultingvacancy.
15. ALTERNATEDIRECTORS
15.1 | Appointment of AlternateDirector |
Any director (an “appointor”) may by notice in writing received by the Company appoint any person (an “appointee”) who is qualified to act as a director to be his or her alternate to act in his or her place at meetings of the directors or committees of the directors at which the appointor is not present unless (in the case of an appointee who is not a director) the directors have reasonably disapproved the appointment of such person as an alternate director and have given notice to that effect to his or her appointor within a reasonable time after the notice of appointment is received by theCompany.
15.2 Notice ofMeetings
Every alternate director so appointed is entitled to notice of meetings of the directors and of committees of the directors of which his or her appointor is a member and to attend and vote as a director at any such meetings at which his or her appointor is notpresent.
15.3 Alternate for More than One Director AttendingMeetings
A person may be appointed as an alternate director by more than one director, and an alternate director:
(1) | will be counted in determining the quorum for a meeting of directors once for each of his or her appointors and, in the case of an appointee who is also a director, once more in thatcapacity; |
(2) | has a separate vote at a meeting of directors for each of his or her appointors and, in the case of an appointee who is also a director, an additional vote in thatcapacity; |
(3) | will be counted in determining the quorum for a meeting of a committee of directors once for each of his or her appointors who is a member of that committee and, in the case of an appointee who is also a member of that committee as a director, once more in that capacity;and |
(4) | has a separate vote at a meeting of a committee of directors for each of his or her appointors who is a member of that committee and, in the case of an appointee who is also a member of that committee as a director, an additional vote in thatcapacity. |
15.4 ConsentResolutions
Every alternate director, if authorized by the notice appointing him or her, may sign in place of his or her appointor any resolutions to be consented to inwriting.
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15.5 Alternate Director anAgent
Every alternate director is deemed to be the agent of his or herappointor.
15.6 Revocation or Amendment of Appointment of AlternateDirector
An appointor may at any time, by notice in writing received by the Company, revoke or amend the terms of the appointment of an alternate director appointed by him orher.
15.7 Ceasing to be an AlternateDirector
The appointment of an alternate director ceaseswhen:
(1) | his or her appointor ceases to be a director and is not promptly re-elected or re- appointed; |
(2) | the alternate directordies; |
(3) | the alternate director resigns as an alternate director by notice in writing provided to the Company or a lawyer for theCompany; |
(4) | the alternate director ceases to be qualified to act as a director;or |
(5) | the term of his appointment expires, or his or her appointor revokes the appointment of the alternatedirector. |
15.8 Remuneration and Expenses of AlternateDirector
The Company may reimburse an alternate director for the reasonable expenses that would be properly reimbursed if he or she were a director, and the alternate director is entitled to receive from the Company such proportion, if any, of the remuneration otherwise payable to the appointor as the appointor may from time to timedirect.
16. | POWERS AND DUTIES OFDIRECTORS |
16.1 | Powers ofManagement |
The directors must, subject to theBusiness CorporationsActand these Articles, manage or supervise the management of the business and affairs of the Company and have the authority to exercise all such powers of the Company as are not, by theBusiness CorporationsActor by these Articles, required to be exercised by the shareholders of the Company.
16.2 Appointment of Attorney ofCompany
The directors may from time to time, by power of attorney or other instrument, under seal if so required by law, appoint any person to be the attorney of the Company for such purposes, and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the directors under these Articles and excepting the power to fill vacancies in the board of directors, to remove a director, to change the membership of, or fill vacancies in, any committee of the directors, to appoint or remove officers appointed by the directors and to declare dividends) and for such period, and with such remuneration and subject to such conditions as the directors may think fit. Any such power of attorney may containsuch
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provisions for the protection or convenience of persons dealing with such attorney asthedirectors think fit. Any such attorney may be authorized by the directors to sub-delegate all or any of the powers, authorities and discretions for the time being vested in him orher.
16.3 Setting Remuneration ofAuditor
The directors may set the remuneration of the Company's auditor from time to time without shareholderapproval.
17. DISCLOSURE OF INTEREST OF DIRECTORS ANDOFFICERS
17.1 | Obligation to Account forProfits |
A director or senior officer who holds a disclosable interest (as that term is used in theBusiness Corporations Act)in a contract or transaction into which the Company has entered or proposes to enter is liable to account to the Company for any profit that accrues to the director or senior officer under or as a result of the contract or transaction only if and to the extent provided in theBusiness CorporationsAct.
17.2 Restrictions on Voting by Reason ofInterest
A director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter is not entitled to vote on any directors' resolution to approve that contract or transaction, unless all the directors have a disclosable interest in that contract or transaction, in which case any or all of those directors may vote on such resolution.
17.3 Interested Director Counted inQuorum
A director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter and who is present at the meeting of directors at which the contract or transaction is considered for approval may be counted in the quorum at the meeting whether or not the director votes on any or all of the resolutions considered at the meeting.
17.4 Disclosure of Conflict of Interest orProperty
A director or senior officer who holds any office or possesses any property, right or interest that could result, directly or indirectly, in the creation of a duty or interest that materially conflicts with that individual's duty or interest as a director or senior officer, must disclose the nature and extent of the conflict as required by theBusinessCorporationsAct.
17.5 Director Holding Other Office in theCompany
A director may hold any office or place of profit with the Company, other than the office of auditor of the Company, in addition to his or her office of director for the period and on the terms (as to remuneration or otherwise) that the directors maydetermine.
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17.6 NoDisqualification
No director or intended director is disqualified by his or her office from contracting with the Company either with regard to the holding of any office or place of profit the director holds with the Company or as vendor, purchaser or otherwise, and no contract or transaction entered into by or on behalf of the Company in which a director is in any way interested is liable to be voided for thatreason.
17.7 Professional Services by Director orOfficer
Subject to theBusinessCorporationsAct,a director or officer, or any person in which a director or officer has an interest, may act in a professional capacity for the Company, except as auditor of the Company, and the director or officer or such person is entitled to remuneration for professional services as if that director or officer were not a director or officer.
17.8 Director or Officer in OtherCorporations
A director or officer may be or become a director, officer or employee of, or otherwise interested in, any person in which the Company may be interested as a shareholder or otherwise, and, subject to theBusinessCorporationsAct,the director or officer isnotaccountable to the Company for any remuneration or other benefits received by him or her as director, officer or employee of, or from his or her interest in, such otherperson.
18. PROCEEDINGSOFDIRECTORS
18.1 | Meetings ofDirectors |
The directors may meet together for the conduct of business, adjourn and otherwise regulate their meetings as they think fit, and meetings of the directors held at regular intervals may be held at the place, at the time and on the notice, if any, as the directors may from time to time determine.
18.2 Voting atMeetings
Questions arising at any meeting of directors are to be decided by a majority of votes and, in the case of an equality of votes, the chair of the meeting has a second or castingvote.
18.3 Chair ofMeetings
The following individual is entitled to preside as chair at a meeting ofdirectors:
(1) | the chair of the board, ifany; |
(2) | in the absence of the chair of the board, the president, if any, if the president is a director;or |
(3) | any other director chosen by the directorsif: |
(a) | neither the chair of the board nor the president, if a director, is present at the meeting within 15 minutes after the time set for holding themeeting; |
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(b) | neither the chair of the board nor the president, if a director, is willing to chair the meeting;or |
(c) | the chair of the board and the president, if a director, have advised the secretary, if any, or any other director, that they will not be present at the meeting. |
18.4 Meetings by Telephone or Other CommunicationsMedium
A director may participate in a meeting of the directors or of any committee of the directors in person or by telephone if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other. A director may participate in a meeting of the directors or of any committee of the directors by a communications medium other than telephone if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other and if all directors who wish to participate in the meeting agree to such participation. A director who participates in a meeting in a manner contemplated by thisArticle
18.4 is deemed for all purposes of theBusinessCorporationsActand these Articles to be present at the meeting and to have agreed to participate in thatmanner.
18.5 Calling ofMeetings
A director may, and the secretary or an assistant secretary of the Company, if any, on the request of a director must, call a meeting of the directors at anytime.
18.6 Notice ofMeetings
Other than for meetings held at regular intervals as determined by the directors pursuant to Article 18.1, reasonable notice of each meeting of the directors, specifying the place, dayandtime of that meeting must be given to each of the directors and the alternate directors byanymethod set out in Article 24.1 or orally or bytelephone.
18.7 When Notice NotRequired
It is not necessary to give notice of a meeting of the directors to a director or an alternate directorif:
(1) | the meeting is to be held immediately following a meeting of shareholders at which that director was elected or appointed, or is the meeting of the directors at which that director is appointed;or |
(2) | the director or alternate director, as the case may be, has waived notice of the meeting. |
18.8 Meeting Valid Despite Failure to GiveNotice
The accidental omission to give notice of any meeting of directors to, or the non-receipt ofanynotice by, any director or alternate director, does not invalidate any proceedings at that meeting.
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18.9 Waiver of Notice ofMeetings
Any director or alternate director may send to the Company a document signed by him orherwaiving notice of any past, present or future meeting or meetings of the directors and may at any time withdraw that waiver with respect to meetings held after that withdrawal. After sending a waiver with respect to all future meetings and until that waiver is withdrawn, no notice of any meeting of the directors need be given to that director and, unless the director otherwise requires by notice in writing to the Company, to his or her alternate director, and all meetings of the directors so held are deemed not to be improperly called or constituted by reason of notice not having been given to such director or alternate director. Attendance of a director or alternate director at a meeting of the directors is a waiver of notice of the meeting unless that director or alternate director attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.
18.10 Quorum
The quorum necessary for the transaction of the business of the directors may be set by the directors and, if not so set, is deemed to be set at the two (2) directors in office or, if the number of directors is set at one, is deemed to be set at one director, and that director may constitute ameeting.
18.11 Validity of Acts Where AppointmentDefective
Subject to theBusiness Corporations Act,an act of a director or officer is not invalid merely because of an irregularity in the election or appointment or a defect in the qualification of that director orofficer.
18.12 Consent Resolutions inWriting
A resolution of the directors or of any committee of the directors may be passed without a meeting:
(1) | in all cases, if each of the directors entitled to vote on the resolution consents to it in writing;or |
(2) | in the case of a resolution to approve a contract or transaction in respect of which a director has disclosed that he or she has or may have a disclosable interest, if each of the directors who have not made such a disclosure consents in writing totheresolution. |
A consent in writing under this Article may be by signed document, fax, email or any other method of transmitting legibly recorded messages. A consent in writing may be in two or more counterparts which together are deemed to constitute one consent in writing. A resolution of the directors or of any committee of the directors passed in accordance with this Article 18.12 is effective on the date stated in the consent in writing or on the latest date stated on any counterpart and is deemed to be a proceeding at a meeting of directors or of the committee of the directors and to be as valid and effective as if it had been passed at a meeting of the directors or of the committee of the directors that satisfies all the requirements of theBusiness Corporations Actand all the requirements of these Articles relating to meetings of the directors or of a committee of thedirectors.
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19. | COMMITTEES |
19.1 | Appointment and Powers of ExecutiveCommittee |
The directors may, by resolution, appoint an executive committee consisting of the director or directors that they consider appropriate, and this committee has, during the intervals between meetings of the board of directors, all of the directors’ powers,except:
(1) | the power to fill vacancies in the board ofdirectors; |
(2) | the power to removedirectors; |
(3) | the power to change the membership of, or fill vacancies in, any committee ofthedirectors;and |
(4) | such other powers or restrictions, if any, as may be set out in the resolution or subsequent directors’resolution. |
19.2 Appointment and Powers of OtherCommittee
The directors may, byresolution:
(1) | appoint one or more committees (other than the executive committee) consisting of the director or directors that they considerappropriate; |
(2) | delegate to a committee appointed under paragraph (1) any of the directors' powers, except: |
(a) | the power to fill vacancies in the board ofdirectors; |
(b) | the power to remove adirector; |
(c) | the power to change the membership of, or fill vacancies in, any committee of the directors;and |
(d) | the power to appoint or remove officers appointed by the directors;and |
(3) | make any delegation referred to in paragraph (2) subject to the conditions set out in the resolution or any subsequent directors'resolution. |
19.3 Obligations ofCommittees
Any committee appointed under Article 19.1 or 19.2, in the exercise of the powers delegated to it,must:
(1) | conform to any rules that may from time to time be imposed on it by the directors;and |
(2) | report every act or thing done in exercise of those powers at such times as the directors mayrequire. |
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19.4 Powers ofBoard
The directors may, at any time, with respect to a committee appointed under Articles 19.1 or 19.2:
(1) | revoke or alter the authority given to the committee, or override a decision made by the committee, except as to acts done before such revocation, alteration oroverriding; |
(2) | terminate the appointment of, or change the membership of, the committee;and |
(3) | fill vacancies in thecommittee. |
19.5 CommitteeMeetings
Subject to Article 19.2(1) and unless the directors otherwise provide in the resolution appointing the committee or in any subsequent resolution, with respect to a committee appointed under Article 19.1 or19.2:
(1) | the committee may meet and adjourn as it thinksproper; |
(2) | the committee may elect a chair of its meetings but, if no chair of a meeting is elected, or if at a meeting the chair of the meeting is not present within 15 minutes after the time set for holding the meeting, the directors present who are members of the committee may choose one of their number to chair themeeting; |
(3) | a majority of the members of the committee constitutes a quorum of the committee;and |
(4) | questions arising at any meeting of the committee are determined by a majority of votes of the members present, and in case of an equality of votes, the chair ofthemeeting does not have a second or castingvote. |
20. OFFICERS
20.1 | Directors May AppointOfficers |
The directors may, from time to time, appoint such officers, if any, as the directors determine and the directors may, at any time, terminate any suchappointment.
20.2 Functions, Duties and Powers ofOfficers
The directors may, for eachofficer:
(1) | determine the functions and duties of theofficer; |
(2) | entrust to and confer on the officer any of the powers exercisable by the directors on such terms and conditions and with such restrictions as the directors think fit;and |
(3) | revoke, withdraw, alter or vary all or any of the functions, duties and powers oftheofficer. |
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20.3 Qualifications
No officer may be appointed unless that officer is qualified in accordance with theBusinessCorporations Act.One person may hold more than one position as an officer of the Company. Any person appointed as the chair of the board or as the managing director must be a director. Any other officer need not be adirector.
20.4 Remuneration and Terms ofAppointment
All appointments of officers are to be made on the terms and conditions and attheremuneration (whether by way of salary, fee, commission, participation in profits or otherwise) that the directors thinks fit and are subject to termination at the pleasure of the directors, and an officer may in addition to such remuneration be entitled to receive, after he or she ceases to hold such office or leaves the employment of the Company, a pension orgratuity.
21. INDEMNIFICATION
21.1 | Definitions |
In this Article21:
(1) | “eligible party”, in relation to a company, means an individualwho: |
(a) | is or was a director, alternate director or officer of theCompany; |
(b) | is or was a director, alternate director or officer of anothercorporation |
(i) | at a time when the corporation is or was an affiliate of the Company,or |
(ii) | at the request of the Company;or |
(c) | at the request of the Company, is or was, or holds or held a position equivalent to that of, a director, alternate director or officer of a partnership, trust, joint venture or other unincorporatedentity; |
and includes, except in the definition of “eligible proceeding”, and s. 163(1)(c) and (d) and s. 165 of theBusiness Corporations Act, the heirs and personal or other legal representatives of that individual;
(2) | “eligible penalty” means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, an eligibleproceeding; |
(3) | “eligible proceeding” means a legal proceeding or investigative action, whether current, threatened, pending or completed, in which an eligible party or any of the heirsandlegal personal representatives of the eligible party, by reason of the eligible party being or having been a director or alternate director or officer of, or holding or having held a position equivalent to that of a director, alternative director or officer of, the Company or an affiliate of theCompany: |
(a) | is or may be joined as a party;or |
(b) | isormaybeliablefororinrespectofajudgment,penaltyorfinein,orexpenses |
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related to, theproceeding;
(4) | “expenses” has the meaning set out in theBusinessCorporationsAct. |
21.2 Mandatory Indemnification of EligibleParties
Subject to theBusiness Corporations Act,the Company must indemnify each eligible party and his or her heirs and legal personal representatives against all eligible penalties to which such person is or may be liable, and the Company must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by such person in respect of that proceeding. Each eligible party is deemed to have contracted with the Company on the terms of the indemnity contained in this Article21.2.
21.3 Indemnification of OtherPersons
Subject to any restrictions in theBusinessCorporations Act,the Company may indemnify any person.
21.4 | Non-Compliance withBusiness CorporationsAct |
The failure of an eligible party to comply with theBusinessCorporationsActor these Articles does not invalidate any indemnity to which he or she is entitled under thisPart.
21.5 Company May PurchaseInsurance
The Company may purchase and maintain insurance for the benefit of any eligible party(orhis or her heirs or legal personal representatives)who:
(1) | is or was a director, alternate director, officer, employee or agent of theCompany; |
(2) | is or was a director, alternate director, officer, employee or agent of a corporation at a time when the corporation is or was an affiliate of theCompany; |
(3) | at the request of the Company, is or was a director, alternate director, officer, employee or agent of a corporation or of a partnership, trust, joint venture or other unincorporatedentity; |
(4) | at the request of the Company, holds or held a position equivalent to that of a director, alternate director or officer of a partnership, trust, joint venture or other unincorporated entity; |
against any liability incurred by him or her as an eligibleparty.
22. DIVIDENDS
22.1 | Payment of Dividends Subject to SpecialRights |
The provisions of this Article 22 are subject to the rights, if any, of shareholders holding shares with special rights as todividends.
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22.2 Declaration ofDividends
Subject to theBusinessCorporationsAct,the directors may from time to time declare and authorize payment of such dividends as they may deemadvisable.
22.3 No NoticeRequired
The directors need not give notice to any shareholder of any declaration under Article22.2.
22.4 RecordDate
The directors may set a date as the record date for the purpose of determining shareholders entitled to receive payment of a dividend. The record date must not precede the date on which the dividend is to be paid by more than two months. If no record date is set, the record date is 5 p.m. on the date on which the directors pass the resolution declaring thedividend.
22.5 Manner of PayingDividend
A resolution declaring a dividend may direct payment of the dividend wholly or partly in cash or by the distribution of specific assets or of fully paid shares or of bonds, debentures or other securities of the Company or any other corporation, or in any one or more of thoseways.
22.6 Settlement ofDifficulties
If any difficulty arises in regard to a distribution under Article 22.5, the directors may settle the difficulty as they deem advisable, and, in particular,may:
(1) | set the value for distribution of specificassets; |
(2) | determine that cash payments in substitution for all or any part of the specific assets to which any shareholders are entitled may be paid to any shareholders on the basis of the value so fixed in order to adjust the rights of all parties;and |
(3) | vest any such specific assets in trustees for the persons entitled to the dividend. |
22.7 When DividendPayable
Any dividend may be made payable on such date as is fixed by thedirectors.
22.8 Dividends to be Paid in Accordance with Number ofShares
All dividends on shares of any class or series of shares must be declared and paid according to the number of such sharesheld.
22.9 Receipt by JointShareholders
If several persons are joint shareholders of any share, any one of them may give an effective receipt for any dividend, bonus or other money payable in respect of theshare.
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22.10 Dividend Bears NoInterest
No dividend bears interest against theCompany.
22.11 FractionalDividends
If a dividend to which a shareholder is entitled includes a fraction of the smallest monetary unit of the currency of the dividend, that fraction may be disregarded in making payment of the dividend and that payment represents full payment of thedividend.
22.12 Payment ofDividends
Any dividend or other distribution payable in cash in respect of shares may be paid by cheque, made payable to the order of the person to whom it is sent, and mailed to the registered address of the shareholder, or in the case of joint shareholders, to the registered address of the joint shareholder who is first named on the central securities register, or totheperson and to the address the shareholder or joint shareholders may direct in writing. The mailing of such cheque will, to the extent of the sum represented by the cheque (plustheamount of the tax required by law to be deducted), discharge all liability for the dividend unless such cheque is not paid on presentation or the amount of tax so deducted is not paid to the appropriate taxingauthority.
22.13 Capitalization of Retained Earnings orSurplus
Notwithstanding anything contained in these Articles, the directors may from time to time capitalize any retained earnings or surplus of the Company and may from time to time issue, as fully paid, shares or any bonds, debentures or other securities of the Company as a dividend representing the retained earnings or surplus so capitalized or any partthereof.
23. ACCOUNTING,RECORDSANDREPORTS
23.1 | Recording of FinancialAffairs |
The directors must cause adequate accounting records to be kept to record properlythefinancial affairs and condition of the Company and to comply with theBusinessCorporationsAct.
23.2 Inspection of AccountingRecords
Unless the directors determine otherwise, or unless otherwise determined by ordinary resolution, no shareholder of the Company is entitled to inspect or obtain a copy of any accounting records of theCompany.
24. NOTICES
24.1 | Method of GivingNotice |
Unless theBusiness CorporationsActor these Articles provides otherwise, a notice, statement, report or other record required or permitted by theBusinessCorporationsActorthese Articles to be sent by or to a person may be sent by any one of the followingmethods:
(1) | mail addressed to the person at the applicable address for that person asfollows: |
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(a) | for a record mailed to a shareholder, the shareholder's registeredaddress; |
(b) | for a record mailed to a director or officer, the prescribed address for mailing shown for the director or officer in the records kept by the Company orthemailing address provided by the recipient for the sending of that record or records of thatclass; |
(c) | in any other case, the mailing address of the intendedrecipient; |
(2) | delivery at the applicable address for that person as follows, addressed to theperson: |
(a) | for a record delivered to a shareholder, the shareholder's registeredaddress; |
(b) | for a record delivered to a director or officer, the prescribed address for delivery shown for the director or officer in the records kept by the Company orthedelivery address provided by the recipient for the sending of that record or records of thatclass; |
(c) | in any other case, the delivery address of the intendedrecipient; |
(3) | sending the record by fax to the fax number provided by the intended recipient forthesending of that record or records of thatclass; |
(4) | sending the record by email to the email address provided by the intended recipient for the sending of that record or records of that class;or |
(5) | physical delivery to the intendedrecipient. |
24.2 Deemed Receipt ofMailing
A notice, statement, report or other record thatis:
(1) | mailed to a person by ordinary mail to the applicable address for that person referred to in Article 24.1 is deemed to be received by the person to whom it was mailed on the day, Saturdays, Sundays and holidays excepted, following the date ofmailing; |
(2) | faxed to a person to the fax number provided by that person, referred to in Article 24.1, is deemed to be received by the person to whom it was faxed on the day itwasfaxed;and |
(3) | e-mailed to a person to the e-mail address provided by that person referred to in Article 24.1 is deemed to be received by the person to whom it was e-mailed on the day it wase-mailed. |
24.3 Certificate ofSending
A certificate signed by the secretary, if any, or other officer of the Company or of any other person acting in that capacity on behalf of the Company stating that a notice, statement, report or other record was addressed as required by Article 24.1, prepaid and mailed or otherwise sent as permitted by Article 24.1, is conclusive evidence of thatfact.
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24.4 Notice to JointShareholders
A notice, statement, report or other record may be provided by the Company to the joint shareholders of a share by providing the notice to the joint shareholder first named in the central securities register in respect of theshare.
24.5 Notice to Legal Representative andTrustees
A notice, statement, report or other record may be provided by the Company to the persons entitled to a share in consequence of the death, bankruptcy or incapacity of a shareholderby:
(1) | mailing the record, addressed tothem: |
(a) | by name, by the title of the legal personal representative of the deceased or incapacitated shareholder, by the title of trustee of the bankrupt shareholder or by any similar description;and |
(b) | at the address, if any, supplied to the Company for that purpose by the persons claiming to be so entitled;or |
(2) | if an address referred to in paragraph (1)(b) has not been supplied to the Company, by giving the notice in a manner in which it might have been given if the death, bankruptcy or incapacity had notoccurred. |
24.6 UndeliveredNotice
If on two consecutive occasions a notice, statement, report or other record is sent to a shareholder pursuant to Article 24.1 and on each of those occasions any such record is returned because the shareholder cannot be located, the Company shall not be required to send any further records to the shareholder until the shareholder informs the Company in writing of his or her newaddress.
25. SEAL
25.1 | Who May AttestSeal |
Except as provided in Articles 25.2 and 25.3, the Company's seal, if any, must not be impressed on any record except when that impression is attested by the signaturesof:
(1) | any twodirectors; |
(2) | any officer, together with anydirector; |
(3) | if the Company only has one director, that director;or |
(4) | any one or more directors or officers or persons as may be determined by the directors. |
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25.2 SealingCopies
For the purpose of certifying under seal a certificate of incumbency of the directors or officers of the Company or a true copy of any resolution or other document, despite Article 25.1, the impression of the seal may be attested by the signature of any director or officer, or the signature of any other person as may be determined by thedirectors.
25.3 Mechanical Reproduction ofSeal
The directors may authorize the seal to be impressed by third parties on share certificates or bonds, debentures or other securities of the Company as they may determine appropriate from time to time. To enable the seal to be impressed on any share certificates or bonds, debentures or other securities of the Company, whether in definitive or interim form, on which facsimiles of any of the signatures of the directors or officers of the Company are, in accordance with theBusiness CorporationsActor these Articles, printed or otherwise mechanically reproduced, there may be delivered to the person employed to engrave, lithograph or print such definitive or interim share certificates or bonds, debentures or other securities one or more unmounted dies reproducing the seal and the chair of the board or any senior officer together with the secretary, treasurer, secretary-treasurer, an assistant secretary, an assistant treasurer or an assistant secretary-treasurer may in writing authorize such person to cause the seal to be impressed on such definitive or interim share certificates or bonds, debentures or other securities by the use of such dies. Share certificates or bonds, debentures or other securities to which the seal has been so impressed are for all purposes deemed to be under and to bear the seal impressed onthem.
26. | PROHIBITIONS |
26.1 | Definitions |
In this Article26:
(1) | "designated security"means: |
(a) | a voting security of theCompany; |
(b) | a security of the Company that is not a debt security and that carries a residual right to participate in the earnings of the Company or, on the liquidation or winding up of the Company, in its assets;or |
(c) | a security of the Company convertible, directly or indirectly, into a security described in paragraph (a) or(b); |
(2) | "security" has the meaning assigned in theSecurities Act(BritishColumbia); |
(3) | "voting security" means a security of the Companythat: |
(a) | is not a debt security,and |
(b) | carries a voting right either under all circumstances or under some circumstances that have occurred and arecontinuing. |
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26.2 Application
Article 26.3 does not apply to the Company if and for so long as it is a Public Company or a pre-existing reporting company which has the Statutory Reporting Company Provisions as part of its Articles or a company to which the Statutory Reporting Company Provisionsapply.
26.3 Consent Required for Transfer of Shares or DesignatedSecurities
No share or designated security may be sold, transferred or otherwise disposed of without the consent of any one director or officer of theCompany.
27. Change Of Registered And RecordsOffice
The Company may appoint or change its registered and records offices, or either of them, and the agent responsible therefore, at any time by resolution of the directors. After the appointment of the first registered or records office agent, such agent may terminateitsappointment pursuant to theBusiness CorporationsAct.