EXHIBIT 1.2
GENERAL BY-LAW
A by-law relating generally to the conduct of the business and
affairs of INTER.TAIN.NET INC. a company amalgamated under the laws of the
Province of Ontario
(herein called the "Corporation").
BE IT ENACTED as a by-law of the Corporation as follows:
1. INTERPRETATION
In this by-law and all other by-laws and resolutions of the
Corporation, unless the context otherwise requires:
1.01 "Act" means the Business Corporations Act, R.S.O. 1990, c.
B16, as amended from time to time, and any statute that may be
substituted therefore, and includes the Regulations made
pursuant thereto;
1.02 "appoint" includes "elect" and vice versa;
1.03 "articles" means the original or restated articles of
incorporation, articles of amalgamation, articles of
continuance, articles of reorganization, letters patent, or
other instrument of incorporation of the Corporation, as
amended from time to time.
1.04 "board" means the board of directors of the Corporation;
1.05 "by-laws" means all by-laws, including special by-laws, of the
Corporation as amended from time to time;
1.06 "Corporation" means this Corporation;
1.07 "meeting of shareholders" includes an annual meeting of
shareholders and a special meeting of shareholders;
1.08 "non-business day" means Saturday, Sunday and any other day
that is a holiday as defined in the Interpretation Act
(Ontario);
1.09 "recorded address" means, in the case of a shareholder, his
address as recorded in the securities register, and in the
case of joint shareholders, the address appearing in the
securities register in respect of such joint holding or the
first address so appearing if there are more than one; and in
the case of a director, officer, auditor or member of a
committee of the Board, his latest address as recorded in the
records of the Corporation;
1.10 "person" includes an individual, sole proprietorship,
partnership, unincorporated association, unincorporated
syndicate, unincorporated organization, trust, body corporate,
and a natural person in his capacity as trustee, executor,
administrator, or other legal representative;
1.11 "signing officer" means, in relation to any instrument, any
person authorized to sign the same on behalf of the
Corporation under this by-law or by a resolution passed
pursuant to this by-law;
1.12 "unanimous shareholders agreement" means a written agreement
among all the shareholders of the Corporation, or among all
such shareholders and a person who is not a shareholder, or a
written declaration of the beneficial owner of all of the
issued shares of the Corporation, that restricts, in whole or
in part, the powers of the directors to manage the business
and affairs of the Corporation, as from time to time amended;
-1-
In this by-law where the context requires words importing the
singular include the plural and vice versa and words importing gender include
masculine, feminine and neuter genders, and vice versa. All the words and terms
appearing in this by-law shall have the same definitions and application as in
the Act.
2. DIRECTORS
2.01 Powers
Subject to any unanimous shareholders agreement, the business
and affairs of the Corporation shall be managed or supervised by a board of
directors being composed of:
A variable board of not fewer than 1 and not more than 10
directors.
Subject to the foregoing, the number of directors may be
varied by a resolution of the directors within the minimum and maximum set in
the articles.
2.02 Resident Canadians
Except where the Corporation is a non-resident Corporation, a
majority of the directors shall be resident Canadians but where the Corporation
has only one or two directors, one director shall be a resident Canadian.
2.03 Qualifications
Any individual, whether a shareholder or not, may be a
director of the Corporation, except a person who:
2.03.1 is less than eighteen years of age;
2.03.2 is of unsound mind and has been so found by a court
in Canada or elsewhere;
2.03.3 has the status of a bankrupt;
2.04 Election and Term
The election of directors shall take place at the first
meeting of shareholders and at each succeeding annual meeting at which an
election of directors is required. Incumbent directors, if qualified, shall be
eligible for re-election. If an election of directors is not held at the proper
time the directors shall continue in office until their successors are elected.
2.05 Resignation
A director who is not named in the articles may resign from
office upon giving a written resignation to the Corporation and such resignation
becomes effective when received by the Corporation or at the time specified in
the resignation, whichever is later.
A director named in the articles shall not be permitted to
resign his office unless at the time the resignation is to become effective a
successor is elected or appointed.
2.06 Removal
Subject to clause (f) of section 120 of the Act, the
shareholders may, by ordinary resolution at an annual meeting remove any
director or directors from office before the expiration of his term and may, by
a majority of the votes cast at the meeting, elect any person in his place for
the remainder of his term.
2.07 Vacation of Office
A director ceases to hold office when he dies, is removed from
office by the shareholders, or ceases to have the necessary qualifications, or
earlier if he shall have submitted his resignation; in which last-mentioned
event
-2-
he shall cease to hold office at the later of (i) the time when such written
resignation is sent or delivered to the Corporation and (ii) the time, if any,
specified in such resignation as the effective time of such resignation.
2.08 Vacancies
Subject to the exceptions in section 124 of the Act, where a
vacancy occurs on the board, a quorum of the directors then in office may
appoint a person to fill the vacancy for the remainder of the term, except in
the case of a vacancy resulting from an increase in the number of directors or
the maximum number of directors required to be elected at any meeting of
shareholders, in which case a quorum of the board may appoint an additional
director if such appointment would not result in a total number of directors
greater than one and one third times the number of directors required to have
been elected at the last annual meeting of the shareholders.
If there is not a quorum of directors or if there has been a
failure to elect the number of directors required by the articles or in the case
of a variable board as required by special resolution, the directors then in
office shall forthwith call a special meeting of shareholders to fill the
vacancy and, if they fail to call a meeting or if there are no directors then in
office, the meeting may be called by any shareholder.
Where there is a vacancy in the board, the remaining directors
may exercise all the powers of the board so long as a quorum remains in office.
Where the corporation has only one director, that director may constitute a
meeting.
3. MEETINGS OF DIRECTORS
3.01 Place of meetings
Meetings of the board may be held at the registered office of
the Corporation or at any other place within or outside of Ontario but, except
where the Corporation is a non-resident corporation, or the articles or the
by-laws otherwise provide, in any financial year of the Corporation a majority
of the meetings of the board shall be held at a place within Canada.
3.02 Meetings by Communications Facilities
Where all the directors are present at or participating in the
meeting have consented thereto, any director may participate in a meeting of the
board by means of conference telephone, electronic or other communication
facilities as permit all persons participating in the meeting to communicate
with each other simultaneously and instantaneously and a director participating
in such a meeting by such means is deemed for the purposes of the Act and these
by-laws to be present at the meeting. Any such consent shall be effective
whether given before or after the meeting to which it relates and may be given
with respect to all board or committee meetings.
If a majority of the directors participating in such a meeting
are in Canada the meeting shall be deemed to have been held in Canada.
3.03 Calling of Meetings
Meetings of the board shall be held from time to time at such
place, at such time and on such day as the president or a vice-president who is
a director or any two directors may determine, and the secretary shall call
meetings when directed or authorized by the president or by a vice-president who
is a director or by any two directors.
Notice of every meeting so called shall be given to each
director not less than 48 hours (excluding any part of a Sunday and of a holiday
as defined by the Interpretation Act) before the time when the meeting is to be
held, except that no notice of meeting shall be necessary if all the directors
are present or if those absent have waived notice of or otherwise signified
their consent to the holding of such meeting.
A notice of a meeting of directors need not specify the
purpose of or the business to be transacted at the meeting except where the Act
requires such purpose or business to be specified.
-3-
3.04 Regular Meetings
The board may appoint a day or days in any month or months for
regular meetings at a place and hour to be named.
A copy of any resolution of the board fixing the place and
time of regular meetings of the board shall be sent to each director forthwith
after being passed, but no other notice shall be required for any such regular
meetings.
3.05 Attendance of Auditors
The auditors of the Corporation, if any, shall be entitled to
attend and be heard at meetings of the board, on matters relating to their
duties as auditors.
3.06 First Meeting of New Board
Each newly elected board may without notice hold its first
meeting for the purpose of organization and the election and appointment of
officers immediately following a meeting of shareholders at which such board is
elected, provided that a quorum of directors is present.
3.07 Quorum
Where the Corporation has only one director, that director may
constitute a quorum for the transaction of business at any meeting of the board.
Where the Corporation has two directors both directors of the
Corporation must be present at any meeting of the board to constitute a quorum.
Subject to the articles or by-laws of the Corporation a
majority of the number of directors or minimum number of directors required by
the articles constitutes a quorum at any meeting of directors but in no case
shall a quorum be less than two-fifths of the number of directors or less than
the minimum number of directors, as the case may be.
3.08 Resident Canadians
Directors shall not transact business at a meeting of the
board unless a majority of the directors present are resident Canadians.
However, directors may transact business at a meeting of the
board where a majority of resident Canadian directors is not present if,
3.08.1 a resident Canadian director who is unable to be
present approves in writing or by telephone or other
communications facilities the business transacted at
the meeting, and
3.08.2 a majority of resident Canadian directors would have
been present had the director been present at the
meeting.
3.09 Chairman
The Chairman of any meeting of the board shall be the first
mentioned of such of the following officers as have been appointed and is a
director and is present at the meeting:
3.09.1 Chairman of the Board,
3.09.2 President, or
-4-
3.09.3 A Vice-President who is a director.
If no such officer is present, the directors present shall
chose one of their number to be Chairman.
3.10 Votes to Govern
At all meetings of the board, every question shall be decided
by a majority of the votes cast on the question.
3.11 Casting Vote
In the case of an equality of votes on any question at a
meeting of the board, the Chairman of the meeting shall not be entitled to a
second or casting vote.
3.12 Disclosure of Interests in Contracts
Every director or officer of the Corporation who is a party to
a material contract or proposed material contract with the Corporation, or is a
director or officer or has a material interest in any corporation which is party
to a material contract or proposed material contract with the Corporation shall
disclose in writing to the Corporation or request to have entered in the minutes
of the meeting of directors the nature and extent of his interest as required by
section 132 of the Act.
3.13 Resolution in Lieu of Meeting
A resolution in writing, signed by all the directors entitled
to vote on that resolution at a meeting of directors or a committee of
directors, is as valid as if it had been passed at a meeting of directors or
committee of directors. A copy of every such resolution shall be kept with the
minutes.
3.14 Delegation
Directors may appoint from their number a managing director
who is a resident Canadian or a committee of directors and delegate to such
managing director or committee any of the powers of the directors.
If the directors appoint a committee of directors, a majority
of the members of the committee must be resident Canadians.
Unless otherwise determined by the board, each committee shall
have the power to fix its quorum at not less than a majority of its members, to
elect its chairman and to regulate its procedure.
4. REMUNERATION AND INDEMNIFICATION
4.01 Remuneration
Subject to the articles, the by-laws or any unanimous
shareholders agreement, the board may fix the remuneration of the directors.
Such remuneration shall be in addition to any salary or
professional fees payable to a director who serves the Corporation in any other
capacity.
In addition, directors shall be paid sums in respect of their
out-of-pocket expenses incurred in attending board, committee or shareholders'
meetings or otherwise in respect of the performance by them of their duties as
the board may from time to time determine.
4.02 Limitation of Liability
No director or officer shall be liable for the acts, receipts,
neglects or defaults of any other director or officer or employee, or for
joining in any receipt or other act for conformity, or for any loss, damage or
expense happening to the Corporation through the insufficiency or deficiency of
title to any property acquired for or on behalf
-5-
of the Corporation, or for the insufficiency or deficiency of any security in or
upon which any of the monies of the Corporation shall be invested, or for any
loss or damage arising from the bankruptcy, insolvency or tortious acts of any
person with whom any of the monies, securities or effects of the Corporation
shall be deposited, or for any loss occasioned by any error of judgment or
oversight on his part, or for any other loss, damage or misfortune whatever
which shall happen in the execution of the duties of his office or in relation
thereto, unless the same are occasioned by his own willful neglect or default;
provided that nothing herein shall relieve any director or officer from the duty
to act in accordance with the Act or from liability for any breach thereof.
4.03 Indemnity of Directors and Officers
Except as provided in section 136 of the Act, every director
and officer of the Corporation, every former director or officer of the
Corporation or a person who acts or acted at the Corporation's request as a
director or officer of a body corporate of which the Corporation is or was a
shareholder or creditor, and his heirs and legal representatives shall, from
time to time, be indemnified and saved harmless by the Corporation from and
against all costs, charges and expenses, including an amount paid to settle an
action or satisfy a judgment, reasonably incurred by him in respect of any
civil, criminal or administrative action or proceeding to which he is made a
party by reason of being or having been a director or officer of such
Corporation or body corporate if,
4.03.1 he acted honestly and in good faith with a view to
the best interests of the Corporation; and
4.03.2 in the case of a criminal or administrative action or
proceeding that is enforced by a monetary penalty, he
had reasonable grounds for believing that his action
was lawful.
4.04 Insurance
Subject to the limitations contained in the Act, the
Corporation may purchase and maintain such insurance for the benefit of its
directors and officers as such, as the board may from time to time determine.
5. OFFICERS
5.01 Election or Appointment
At the first meeting of the board after each election of
directors, the board shall elect or appoint a president, and a secretary and if
deemed advisable may appoint one or more vice-presidents, a general manager, a
treasurer and such other officers as the board may determine including one or
more assistants to any of the officers so appointed.
None of the said officers need be a director or shareholder.
Any two of the said offices may be held by the same person. If
the same person holds the office of secretary and treasurer, he may, but need
not, be known as the secretary-treasurer.
5.02 Term, Remuneration and Removal
The terms of employment and remuneration of all officers
elected or appointed by the board (including the president) shall be determined
from time to time by resolution of the board.
The fact that an officer or employee is a director or
shareholder of the Corporation shall not disqualify him from receiving such
remuneration as may be determined.
All officers, in the absence of agreement to the contrary,
shall be subject to removal by resolution of the board at any time with or
without cause, without prejudice to such officer's rights under any employment
contract. Otherwise each officer elected or appointed by the board shall hold
office until his or her successor is elected or appointed.
-6-
5.03 President
The president shall be the chief executive officer of the
Corporation.
He shall, if present, preside at all meetings of the
shareholders and of the board of directors and shall be charged with the general
supervision of the business and affairs of the Corporation except the power to
do anything referred to in sub-section 127(3) of the Act.
Except where the board has appointed a general manager or
managing director, the president shall also have the powers and be charged with
the duties of that office except the power to do anything referred to in
sub-section 127(3) of the Act.
5.04 Vice-President
The vice-president, or if there are more than one, the
vice-presidents in order of seniority (as determined by the board) shall be
vested with all the powers and shall perform all the duties of the president in
the absence or disability or refusal to act of the president, except that he
shall not preside at meetings of the directors or shareholders unless he is
qualified to attend meetings of directors or shareholders as the case may be.
If a vice-president exercises any such duty or power, the
absence or inability of the president shall be presumed with reference thereto.
A vice-president shall also perform such duties and exercise
such powers as the president may from time to time delegate to him or the board
may prescribe.
5.05 General Manager
The general manager, if one is appointed, shall have the
general management and direction, subject to the authority of the board and the
supervision of the president, of the Corporation's business and affairs and the
power to appoint and remove any and all officers, employees and agents of the
Corporation not elected or appointed directly by the board and to settle the
terms of their employment and remuneration but shall not have the power to do
any of the things set forth in sub-section 127(3) of the Act.
If and so long as the general manager is a director, he may
but need not be known as the managing director.
5.06 Secretary
The secretary shall attend all meetings of the directors,
shareholders and committees of the board and shall enter or cause to be entered
in books kept for that purpose minutes of all proceedings at such meetings; he
shall give, or cause to be given, when instructed, notices required to be given
to shareholders, directors, auditors and members of committees; he shall be the
custodian of the stamp or mechanical device generally used for affixing the
corporate seal of the Corporation and of all books, papers, records, documents
and other duties as may from time to time be prescribed by the board.
5.07 Treasurer
The treasurer shall keep, or cause to be kept proper
accounting records as required by the Act; he shall deposit or cause to be
deposited all monies received by the Corporation in the Corporation's bank
account; he shall, under direction of the board, supervise the safekeeping of
securities and the disbursements of the funds of the Corporation;
5.07.1 he shall render to the board, whenever required, an
account of all his transactions as treasurer and of
the financial position of the Corporation;
5.07.2 and he shall perform such other duties as may from
time to time be prescribed by the board.
-7-
5.08 Other Officers
The duties of all other officers of the Corporation shall be
such as the terms of their engagement call for or the board requires of them.
Any of the powers and duties of an officer to whom an
assistant has been appointed may be exercised and performed by such assistant,
unless the board otherwise directs.
5.09 Variation of Duties
From time to time the board may vary, add to or limit the
powers and duties of any officer or officers, but shall not delegate to any
officer any of the powers set forth in sub-section 127(3) of the Act.
5.10 Agents and Attorneys
The board shall have power from time to time to appoint agents
or attorneys for the Corporation in or out of Ontario with such powers of
management or otherwise (including the power to sub-delegate) as may be thought
fit.
5.11 Fidelity Bonds
The board may require such officers, employees and agents of
the Corporation as it deems advisable to furnish bonds for the faithful
performance of their duties, in such form and with such surety as the board may
from time to time prescribe.
6. MEETINGS OF SHAREHOLDERS
6.01 Annual Meetings
The directors shall call the first annual meeting of
shareholders not later than eighteen months after the Corporation comes into
existence and subsequently not later than fifteen months after holding the last
preceding annual meeting.
The annual meeting of shareholders of the Corporation shall be
held at such time and on such day each year as the board may from time to time
determine, for the purpose of receiving the reports and statements required by
the Act to be laid before the annual meeting, electing directors, appointing
auditors and fixing or authorizing the board to fix their remuneration, and for
the transaction of such other business as may properly be brought before the
meeting.
6.02 Special Meetings
The board may at any time call a special meeting of
shareholders for the transaction of any business which may properly be brought
before such meeting of shareholders.
All business transacted at an annual meeting of shareholders,
except consideration of financial statements, auditor's report, election of
directors and reappointment of the incumbent auditor, is deemed to be special
business.
6.03 Place of Meeting
Meetings of shareholders shall be held at the registered
office of the Corporation, or at such other place within or outside Ontario as
the board from time to time determines.
-8-
6.04 Notice of Meeting
Notice of the time and place of each meeting of shareholders
shall be sent not less than 10 days and not more than 50 days before the date of
the meeting to the auditor of the Corporation (if any), to each director, and to
each person whose name appears on the records of the Corporation at the close of
business on the day next preceding the giving of the notice as a shareholder
entitled to vote at the meeting.
6.05 Notice of a special meeting of shareholders shall state:
6.05.1 the nature of the business to be transacted at the
meeting in sufficient detail to permit the
shareholder to form a reasonable judgment thereon;
and
6.05.2 the text of any special resolution or by-law to be
submitted to the meeting.
-9-
6.06 Persons Entitled to be Present
The only persons entitled to attend a meeting of shareholders
shall be those entitled to vote thereat, the directors and the auditors of the
Corporation and others who although not entitled to vote are entitled or
required to be present at the meeting.
Any other persons may be admitted only on the invitation of
the chairman of the meeting or with the consent of the meeting.
6.07 Record Date for Notice
The board may fix in advance a time and date, preceding the
date of any meeting of shareholders by not more than 50 days and not fewer than
10 days, as the record date for the determination of the shareholders entitled
to notice of the meeting. If no such record date for notice is fixed by the
board, the record date for notice shall be at the close of business on the day
next preceding the day on which notice is given.
6.08 Meetings Without Notice
A meeting of shareholders may be held at any time and at any
place permitted by the Act or the articles or the by-laws without notice or on
shorter notice than that provided for herein and proceedings thereat shall not
thereby be invalidated:
6.08.1 if all the shareholders entitled to vote thereat are
present in person or represented by proxy or if those
not so present or represented by proxy have received
notice or before or after the meeting or the time
prescribed for notice thereof, in writing waive
notice of or accept short notice of such meeting, and
6.08.2 if the auditors, if any, and the directors are
present or if those not present have received notice
or, before or after the time prescribed for notice
thereof, in writing waive notice of or accept notice
of such meeting.
6.09 Quorum
The holders of not less than twenty-five (25%) percent of the
shares entitled to vote at a meeting of shareholders present in person or by
proxy constitutes a quorum for the transaction of business at any meeting of
shareholders.
6.10 One Shareholder Meeting
If the Corporation has only one shareholder, or only one
shareholder of any class or series of shares, the shareholder present in person
or by proxy constitutes a meeting.
-10-
6.11 Right to Vote
At any meeting of shareholders, unless the articles otherwise
provide, each share of the Corporation entitles the holder thereof to one vote
at a meeting of shareholders.
6.12 Joint Shareholders
Where two or more persons hold the same share or shares
jointly, any one of such persons present at a meeting of shareholders may in the
absence of the others vote the shares but, if two or more of such persons who
are present in person or by proxy, vote, they shall vote as one on the shares
jointly held by them.
6.13 Record Date for Voting
The board may fix in advance a time and date, preceding the
date of any meeting of shareholders by not more than 2 days, excluding
non-business days, as the record date for the determination of the shareholders
entitled to vote at the meeting. Such date shall be specified in the notice
calling the meeting. Where no record date is so fixed, the record date for
voting shall be the time of the taking of the vote.
6.14 Proxies
Every shareholder entitled to vote at a meeting of
shareholders may by means of a proxy appoint a proxy holder or one or more
alternate proxy holders who are not required to be shareholders to attend and
act at the meeting in the manner and to the extent authorized by the proxy and
with the authority conferred by the proxy.
A proxy shall be in writing and executed by the shareholder or
by his attorney authorized in writing.
Subject to the requirements of the Act the instrument may be
in such form as the directors from time to time prescribe or in such other form
as the chairman of the meeting may accept as sufficient.
It shall be deposited with the Corporation before any vote is
taken under its authority, or at such earlier time not exceeding 48 hours,
excluding non-business days, and in such manner as the board by resolution
prescribes. An instrument appointing a proxy shall be acted upon only if, prior
to the time so fixed and specified in the notice calling the meeting, it shall
have been so deposited.
6.15 Scrutineers
At each meeting of shareholders one or more scrutineers may be
appointed by a resolution of the meeting or by the chairman with the consent of
the meeting to serve at the meeting.
Such scrutineers need not be shareholders of the Corporation.
6.16 Votes to Govern
Unless otherwise required by the Act, or the articles or
by-laws of the Corporation, all questions proposed for the consideration of the
shareholders at a meeting shall be decided by a majority of the votes cast
thereon.
6.17 Show of Hands
At all meetings of shareholders every question shall be
decided by a show of hands unless a ballot thereon be required by the chairman
or be demanded by a shareholder or proxyholder present and entitled to vote.
Upon a show of hands every person present and entitled to
vote, has one vote regardless of the number of shares he represents.
After a show of hands has been taken upon any question, the
chairman may require or any shareholder or proxyholder present and entitled to
vote may demand a ballot thereon.
-11-
Whenever a vote by show of hands shall have been taken upon a
question, unless a ballot therein be so required or demanded, a declaration by
the chairman that the vote upon the question has been carried or carried by a
particular majority or not carried and an entry to that effect in the minutes of
the meeting shall be prima facie evidence of the fact without proof of the
number or proportion of the votes recorded in favour of or against the question.
The result of the vote so taken and declared shall be the
decision of the Corporation on the question.
A demand for a ballot may be withdrawn at any time prior to
the taking of the ballot.
6.18 Ballots
If a ballot is required by the chairman of the meeting or is
demanded and the demand is not withdrawn, a ballot upon the question shall be
taken in such a manner as the chairman of the meeting directs.
6.19 Personal Representative
If the shareholder of record is deceased, his personal
representative, upon filing with the secretary of the meeting sufficient proof
of his appointment, shall be entitled to exercise the same voting rights at any
meeting of shareholders as the shareholder of record would have been entitled to
exercise if he were living and for the purposes of the meeting shall be
considered a shareholder. If there is more than one personal representative, the
provisions regarding joint shareholders shall apply.
-12-
6.20 Adjournment
The chairman of a meeting of shareholders may, with the
consent of the meeting and subject to such conditions as the meeting may decide,
adjourn the meeting from time to time and from place to place.
7. SHARES
7.01 Allotment
Subject to any unanimous shareholders agreement, the board may
from time to time issue or grant options to purchase the whole or any part of
the authorized and unissued shares of the Corporation at such time and to such
persons and for such consideration as the board shall determine, provided that
no share shall be issued until it is fully paid as prescribed by the Act.
7.02 Commissions and Discounts
The board may, at any time after the approval of this by-law,
by the shareholders, and from time to time thereafter, authorize the payment of
commissions or the allowance of discounts to persons in consideration of their
subscribing or agreeing to subscribe, whether absolutely or conditionally, for
such shares, but no commission or discount shall exceed 25 per cent of the
amount of the subscription price.
7.03 Lien for Indebtedness
Subject to the Act, the Corporation has a lien on shares
registered in the name of a shareholder or his legal representative for any debt
of the shareholder to the Corporation.
The Corporation may enforce the lien by:
7.03.1 in the case of redeemable shares, redeeming the
shares at their redemption price; and
7.03.2 in the case of all other shares by purchasing such
shares at their book value for cancellation or for
re-sale;
and by applying the value of such shares so determined to the debt of the
shareholder.
In enforcing the lien as aforesaid the Corporation shall not
be obliged to redeem or purchase all of the shares of that class but only the
shares subject to the lien.
In electing to enforce the lien in this manner the Corporation
shall not prejudice or surrender any other rights of enforcement of the lien
which may in law be available to it or any other remedy available to the
Corporation for collection of the debt or any part thereof.
7.04 Share Certificates
Every holder of one or more shares of the Corporation is
entitled, at his option, to a share certificate, or to a non-transferable
written acknowledgment of his right to obtain a share certificate, stating the
number and class or a series of shares held by him as shown on the records of
the Corporation.
Share certificates and acknowledgments of a shareholder's
rights to a share certificate shall be in such form as the board shall from time
to time approve.
The share certificate shall be signed manually by at least one
director or officer of the Corporation or by or on behalf of the registrar or
transfer agent and any additional signatures required on the share certificate
may be printed or otherwise mechanically reproduced thereon and such share
certificates need not be under the corporate seal; provided, that unless the
board otherwise orders, certificates representing shares in respect of which a
registrar or transfer agent (which terms shall include a branch registrar and/or
transfer agent) has been appointed shall not be valid if issued during such
appointment unless countersigned by or on behalf of such registrar and/or
transfer agent. The corporate seal of the Corporation and the signature of one
of the signing officers or, in the case of share certificates
-13-
which are not valid unless countersigned by or on behalf of a registrar and/or
transfer agent, the signatures of both officers may be printed, engraved,
lithographed or otherwise mechanically reproduced upon share certificates and
every such share signature shall for all purposes be deemed to be the signature
of the officer whose signature it reproduces and shall be binding upon the
Corporation. A share certificate executed as aforesaid shall be valid
notwithstanding that one or both of the officers whose signature (whether manual
or facsimile) appears thereon no longer holds office at the date of issue or
delivery of the certificate.
7.05 Replacement of Share Certificates
The board or any officer or agent assigned by the board may in
its or his discretion direct the issue of a new share certificate in lieu of and
upon cancellation of a share certificate that has been mutilated or in
substitution for a share certificate that has been lost, apparently destroyed or
wrongfully taken on payment of such fee, not exceeding $3.00, and on such terms
as to indemnity, reimbursement of expenses and evidence of loss and of title as
the board may from time to time prescribe, whether generally or in any
particular case.
7.06 Transfer Agent and Registrar
The board may from time to time appoint a registrar to
maintain the securities register and a transfer agent to maintain the register
of transfers and may also appoint one or more branch registrars to maintain
branch security registers and one or more branch transfer agents to maintain
branch registers of transfers, but one person may be appointed both registrar
and transfer agent.
The board may at any time terminate any such appointment.
-14-
7.07 Registrars and Transfer Agents
Subject to the provisions of the Act, no transfer of shares
shall be registered in a register of transfers or branch register of transfers
except on the surrender of the certificate representing such shares with a
transfer endorsed thereon or delivered therewith duly executed by the registered
holder or by his attorney or successor duly appointed, together with such
assurance or evidence of signature, identification and authority to transfer as
the board may from time to time prescribe, and upon payment of all applicable
taxes, compliance with such restrictions on transfer as are authorized by the
articles and satisfaction of any lien referred to herein.
7.08 Non-recognition of Trusts
The Corporation shall be entitled to treat the registered holder of any
share as the absolute owner thereof and accordingly shall not, except as ordered
by a court of competent jurisdiction or as required by statute, be bound to see
to the execution of any trust, whether express, implied or constructive, in
respect of any share or to recognize any claim to or interest in such share on
the part of any person, other than the registered holder thereof.
7.09 Joint Shareholders
If two or more persons are registered as joint holders of any
share, the Corporation shall not be bound to issue more than one certificate in
respect thereof, and delivery of such certificates to one of such persons shall
be sufficient delivery to all of them.
Any one of such persons may give effectual receipts for the
certificate issued in respect thereof or for any dividends, bonus, return of
capital or other money payable or warrant issuable in respect of such share.
7.10 Deceased Shareholders
In the event of the death of a holder, or one of the joint
holders, of any share, the Corporation shall not be required to make any entry
in the register of shareholders in respect thereof or to make payment of any
dividends thereon except upon production of all such documents as may be
required by law and upon compliance with the reasonable requirements of the
Corporation and its transfer agent.
8. DIVIDENDS
8.01 Declaration
Subject to the Act and the articles, the board may declare and
the Corporation may pay a dividend to the shareholders according to their
respective rights in the Corporation.
Such a dividend may be paid by issuing fully paid shares of
the Corporation or may be paid in money or property.
8.02 Payment
A dividend payable in cash shall be paid by cheque drawn on
the Corporation's bankers or one of them to the order of each registered holder
of shares of the class in respect of which it has been declared, and mailed by
ordinary mail postage prepaid to such registered holder at his last address
appearing on the records of the Corporation. In the case of joint holders the
cheque shall, unless such joint holders otherwise direct, be made payable to the
order of all of such joint holders and if more than one address appears on the
books of the Corporation in respect of such joint holding the cheque shall be
mailed to the first address so appearing. The mailing of such cheque as
aforesaid shall satisfy and discharge all liability for the dividend to the
extent of the sum represented thereby, unless such cheque be not paid on
presentation.
8.03 Non-Receipt of Cheque
In the event of the non-receipt of any cheque for a dividend
by the person to whom it is so sent as aforesaid, the Corporation on proof of
such non-receipt and upon satisfactory indemnity being given to it shall issue
to such person a replacement cheque for a like amount.
-15-
8.04 Record Date for Dividends and Rights
The board may fix in advance a date as a record date for the
determination of the persons entitled to receive payment of any dividend or to
receive any warrant or other evidence of right to subscribe for securities of
the Corporation. In every such case only such persons as shall be shareholders
of record at the close of business on the record date so fixed shall be entitled
to receive payment of such dividend or to receive such warrant or other evidence
of such right notwithstanding the transfer or issue of any shares after the
record date so fixed.
8.05 Purchase of Business as of Past Date
Where any business is purchased by the Corporation as from a
past date (whether such date be before or after the incorporation of the
Corporation) upon terms that the Corporation shall as from that date take
profits or losses as the case may be shall, at the discretion of the directors
be credited or debited wholly or in part to revenue account, and in that case
the amount so credited or debited shall, for the purpose of ascertaining the
fund available for dividends, be treated as a profit or loss arising from the
business of the Corporation.
8.06 Unclaimed Dividends
Any dividend unclaimed after a period of six years from the
date on which the same has been declared to be payable shall be forfeited and
shall revert to the Corporation.
-16-
9. FINANCIAL YEAR
The first financial year of the Corporation shall terminate on
a date to be determined by the directors of the Corporation thereafter on the
anniversary date therefore in each year, until changed by resolution of the
directors of the Corporation.
10. NOTICES
10.01 Method of Giving Notice
Any notice, communication or other document to be given by the
Corporation to a shareholder, director, officer, or auditor of the Corporation
under any provision of the Act, the articles or by-laws shall be sufficiently
given if delivered personally to the person to whom it is to be given, or if
delivered to his recorded address or if mailed to him at his recorded address by
prepaid ordinary mail or if sent to him at his recorded address by any means of
any prepaid transmitted or recorded communication. Notices to directors may be
given if transmitted by fax.
A notice so delivered shall be deemed to have been given when
it is delivered personally or delivered to the recorded address as aforesaid or
faxed as aforesaid.
A notice so mailed shall be deemed to have been given when
deposited in a post office or public letter box or appropriate communication
company or agency or its representative for dispatch and shall be deemed to have
been received on the fourth day after so depositing; and a notice so sent by any
means of transmitted or recorded communication shall be deemed to have been
received on the fifth day after so depositing; The secretary may change or cause
to be changed the recorded address of any shareholder, director, officer or
auditor of the Corporation in accordance with any information believed by him to
be reliable. The recorded address of a director shall be his latest address as
shown in the records of the Corporation or in the most recent notice filed under
the Corporations Information Act, whichever is the more current.
10.02 Computation of Time
In computing the date when notice must be given under any
provision of the articles or by-laws requiring a specified number of days'
notice of any meeting or other event, the date of giving the notice shall,
unless otherwise provided, be included.
10.03 Omissions and Errors
The accidental omission to give any notice to any shareholder,
director, officer, or auditor, or the non-receipt of any notice by any
shareholder, director, officer, or auditor or any error in any notice not
affecting the substance thereof shall not invalidate any action taken at any
meeting held pursuant to such notice or otherwise founded thereon.
-17-
10.04 Notice to Joint Shareholders
All notices with respect to any shares registered in more than
one name may if more than one address appears on the records of the Corporation
in respect of such joint holding, be given to such joint shareholders at the
first address so appearing, and notice so given shall be sufficient notice to
all the holders of such shares.
10.05 Persons Entitled by Death or Operation of Law
Every person who by the operation of law, by transfer or the
death of a shareholder or otherwise becomes entitled to shares, is bound by
every notice in respect of such shares which has been duly given to the
registered holder of such shares prior to his name and address being entered on
the records of the Corporation.
10.06 Waiver of Notice
Any shareholder (or his duly appointed proxy) director,
officer or auditor may waive any notice required to be given under the articles
or by-laws of the Corporation and such waiver, whether given before or after the
meeting or other event of which notice is required to be given shall cure any
default in the giving of such notice.
10.07 Signatures of Notice
The signatures to any notice to be given by the Corporation
may be written, stamped, typewritten or printed or partly written, stamped,
typewritten or printed.
11. EXECUTION OF DOCUMENTS
11.01 Signing Officers
Deeds, transfers, assignments, contracts and obligations of
the Corporation may be signed by the President, Secretary or Treasurer.
Notwithstanding this, the board may at any time and from time
to time direct the manner in which and the person or persons by whom any
particular deed, transfer, contract or obligation or any class of deeds,
transfers, contracts or obligations may be signed.
Any person authorized to sign any document may affix the
corporate seal thereto.
11.02 Effective Date
This by-law comes into force upon confirmation by the
shareholders of the Corporation in accordance with the Act, and the amalgamation
of the Corporation and Biroco Kirkland Mines Limited.
-18-
12. MISCELLANEOUS
12.01 Corporate Seal
The Corporation may have one or more different corporate seals
which may be adopted or changed from time to time by the board, on which the
name of the Corporation appears in the language or one or more of the languages
set out in the articles.
12.02 Banking Arrangements
The banking business of the Corporation, including without
limitation the borrowing of money and the giving of security therefor, shall be
transacted with such banks, trust companies or other bodies corporate or
organizations as may from time to time be designated by or under the authority
of the board. Such banking business, or any part thereof, shall be transacted
under such agreements, instructions and delegations of powers as the board may
from time to time prescribe.
12.03 Voting Rights in Other Bodies Corporate
The signing officers of the Corporation may execute and
deliver instruments of proxy and arrange for the issuance of voting certificates
or other evidence of the right to exercise the voting rights attaching to any
securities held by the Corporation. Such instruments, certificates or other
evidences shall be in favour of such person or persons as may be determined by
the officers signing or arranging for them. In addition, the board may from time
to time direct the manner in which and the person or persons by whom any
particular voting rights or class of voting rights may or shall be exercised.
12.04 Withholding Information from Shareholders
No shareholder shall be entitled to discovery of any
information respecting any details or conduct of the Corporation's business
which, in the opinion of the board, it would be inexpedient in the interests of
the shareholders or the Corporation to communicate to the public. The board may
from time to time determine whether and to what extent and at what time and
place and under what conditions or regulations the accounts, records and
documents of the Corporation or any of them shall be open to the inspection of
the shareholders and no shareholder shall have any right of inspecting any
account, record or document of the Corporation except as conferred by the Act or
authorized by the board or by resolution passed at a general meeting of the
shareholders.
13. DIVISIONS
13.01 Creation and Consolidation of Divisions
The board may cause the business and operations of the
Corporation or any part thereof to be divided or to be segregated into one or
more divisions upon such basis, including without limitation, character or type
of operation, geographical territory, product manufactured or service rendered,
as the board may consider appropriate in each case. The board may also cause the
business and operations of any such division to be further divided into
sub-units to be consolidated upon such basis as the board may consider
appropriate in each case.
13.02 Name of Division
Subject to compliance with law, any division or its sub-units
may be designated by such name as the board may from time to time determine and
may transact business under such name in legible characters on all contracts,
invoices, negotiable instruments and orders for goods and services issued or
made by or on behalf of the Corporation.
-19-
13.03 Officers of Division
From time to time the board, or if authorized by the board,
the president, may appoint one or more officers for any division, prescribe
their powers and duties and settle their terms of employment and remuneration.
The board or, if authorized by the board, the president may remove at its or his
pleasure any officer so appointed, without prejudice to such officer's rights
under any employment contract. Officers of divisions or their sub-units shall
not, as such, be officers of the Corporation.
14. REPEAL OF PRIOR BY-LAWS
All prior by-laws of the corporation are hereby repealed
effective upon amalgamation of the Company with Biroco Kirkland Mines Limited.
The foregoing General By-law of the Corporation, being a
by-law relating generally to the regulation of the business and affairs of the
Corporation, was approved by the shareholders at the Shareholder Meeting on
March 4, 1996.
/s/ Robert Stikeman
---------------------------------
Robert Stikeman
Assistant Secretary
-20-