UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14C
INFORMATION STATEMENT PURSUANT TO SECTION 14(c)
OF THE SECURITIES EXCHANGE ACT OF 1934
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
[X] Definitive Information Statement
CHINA PHARMACEUTICALS CORPORATION
(Name of Registrant As Specified In Its Charter)
Payment of Filing Fee (Check the Appropriate Box):
[X] No fee required
[ ] $125.00 per Exchange Act Rule 0-11(c)(1)(ii) or 14c-5(g) and 0-11
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Check box if any party of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
CHINA PHARMACEUTICALS CORPORATION
UNITS 3207-08, 32/F, WEST TOWER, SHUN TAK CENTRE
168-200 CONNAUGHT ROAD CENTRAL, HONG KONG
NOTICE OF STOCKHOLDER ACTION BY WRITTEN CONSENT
TO ALL STOCKHOLDERS OF CHINA PHARMACEUTICALS CORPORATION:
The purpose of this letter is to inform you that we intend to take the
following action by written consent of our stockholders:
To reincorporate China Pharmaceuticals Corporation ("CPC") in the
British Virgin Islands by a merger of CPC with and into a newly-formed
wholly-owned British Virgin Islands subsidiary, known as "China Pharmaceuticals
International Corporation," which will result in:
o a change of domicile of CPC from the state of Delaware to the
British Virgin Islands, which means that the surviving corporation
will be governed by the laws of the British Virgin Islands;
o the change of our corporate name from China Pharmaceuticals
Corporation to China Pharmaceuticals International Corporation;
o your right to receive one share of common stock of China
Pharmaceuticals International Corporation ("CP International") for
each share of common stock of CPC owned by you as of the record
date of the reincorporation;
o the persons serving presently as executive officers and directors
of CPC will have the right to serve in their same respective
positions in CP International after the reincorporation;
o CP International's Memorandum of Association becoming the
certificate of incorporation of the surviving corporation; and
o CP International's Articles of Association becoming the by-laws of
the surviving corporation.
The holders of a majority of our outstanding common stock, owning
approximately 51.5% of the outstanding shares of our common stock, have executed
a written consent in favor of the action described above that is described in
greater detail in the Information Statement accompanying this notice. This
consent will satisfy the stockholder approval requirement for the proposed
action and allow us to take the proposed action on or about August 9, 2004.
WE ARE NOT ASKING FOR YOUR PROXY. Because the written consent of the
holders of a majority of our common stock satisfies any applicable stockholder
voting requirement of the Delaware General Corporation Law and our Certificate
of Incorporation and by-laws, we are not asking for a proxy and you are not
requested to send one.
The accompanying Information Statement is for information purposes only
and explains the terms of our proposed reincorporation. Please read the
accompanying Information Statement carefully.
July 19, 2004 By Order of the Board of Directors
/s/ Y.S. Kwok
Corporate Secretary
CHINA PHARMACEUTICALS CORPORATION
UNITS 3207-08, 32/F, WEST TOWER, SHUN TAK CENTRE
168-200 CONNAUGHT ROAD CENTRAL, HONG KONG
INFORMATION STATEMENT
JULY 19, 2004
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.
This Information Statement is being mailed on or about July 20, 2004 to
the stockholders of record of China Pharmaceuticals Corporation at the close of
business on July 7, 2004. This Information Statement is being sent to you for
information purposes only. No action is requested or required on your part.
This Information Statement is being furnished to you to inform you of
the adoption of resolutions by written consent by the holders of a majority of
the outstanding shares of our common stock, par value $0.0001 per share. The
resolutions adopted by these stockholders give us the authority to take the
following action:
To reincorporate China Pharmaceuticals Corporation ("CPC") in the
British Virgin Islands by a merger of CPC with and into a newly-formed
wholly-owned British Virgin Islands subsidiary, known as "China Pharmaceuticals
International Corporation," which will result in:
o a change of domicile of CPC from the state of Delaware to the
British Virgin Islands, which means that the surviving corporation
will be governed by the laws of the British Virgin Islands;
o the change of our corporate name from China Pharmaceuticals
Corporation to China Pharmaceuticals International Corporation;
o your right to receive one share of common stock of China
Pharmaceuticals International Corporation ("CP International") for
each share of common stock of CPC owned by you as of the record
date of the reincorporation;
o the persons serving presently as executive officers and directors
of CPC will have the right to serve in their same respective
positions in CP International after the reincorporation;
o CP International's Memorandum of Association becoming the
certificate of incorporation of the surviving corporation; and
o CP International's Articles of Association becoming the by-laws of
the surviving corporation.
The board of directors of CPC has adopted resolutions authorizing the
taking of the action described above and recommended that the stockholders adopt
resolutions approving this action.
As of the close of business on the record date, we had 46,160,733
shares of common stock outstanding. The common stock is our only class of
securities entitled to vote. Each outstanding share of common stock is entitled
to one vote per share.
The affirmative consent of the holders of a majority of our outstanding
common stock is required to approve the action described above in the absence of
a meeting of stockholders. The requisite stockholder approval of the action
described above was obtained by the execution of written consents in favor of
this action by the holders of approximately 51.5% of the outstanding shares of
common stock, allowing CPC to take the proposed action on or about August 9,
2004.
This Information Statement is first being mailed on or about July 20,
2004. This Information Statement constitutes notice to our stockholders of
corporate action by stockholders without a meeting as required by Section 228 of
the Delaware General Corporation Law.
China Pharmaceuticals Corporation Information Statement - Page 1
The expenses of mailing this Information Statement will be borne by
CPC. It is contemplated that brokerage houses, custodians, nominees, and
fiduciaries will be requested to forward this Information Statement to the
beneficial owners of our common stock held of record by these persons and that
we will reimburse them for their reasonable expenses incurred in this process.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information regarding the number of
shares of common stock of CPC, beneficially owned on July 7, 2004, by:
o each person who is known by CPC to beneficially own 5% or more of
the common stock of CPC; and
o each of the directors and executive officers of CPC.
PERCENT
NUMBER OF SHARES OF CLASS
NAME AND ADDRESS BENEFICIALLY OWNED (1)<F1> OWNED
China Merchants DiChain Investment Holdings Limited 20,772,330 45.0%
Units 3207-08, 32/F, West Tower, Shun Tak Centre
168-200 Connaught Road Central, Hong Kong
Anmer Capital Limited 6,407,110 13.9%
172 Kaixuan Road, Jianggan District, Hangzhou
Zhejiang Province, People's Republic of China
Good Achieve Investments Limited 3,005,064 6.5%
Room 4905, Office Tower, Convention Plaza
1 Harbour Road, Wanchai, Hong Kong
Aaron ZHU Xiaojun (2)<F2> 20,772,330 45.0%
Dr. FAN Di (2)<F2> 20,772,330 45.0%
KWOK Yam Sheung 0 --
- ---------------------
<FN>
(1)<F1> Based on 46,160,733 shares outstanding.
(2)<F2> China Merchants DiChain Investment Holdings Limited is the record owner
of these 20,772,330 shares of common stock of the registrant. Dr. FAN
Di, an officer and director of the registrant, is also a director of
China Merchants DiChain Investment Holdings Limited and both Dr. FAN Di
and Aaron ZHU Xiaojun, an officer and director of the registrant, are
directors of the sole controlling shareholder of China Merchants
DiChain Investment Holdings Limited. Accordingly, they are deemed to be
beneficial owners of these shares.
</FN>
REINCORPORATION IN THE BRITISH VIRGIN ISLANDS
Transaction: Reincorporation in the British Virgin Islands
Purpose: To provide greater flexibility and simplicity in corporate
transactions and tax benefits. For more information, see
"Background and Purpose of Reincorporation; Principal
Reasons for Reincorporation in the British Virgin
Islands."
The purpose of this Information Statement is to inform
holders of common stock of this corporate action.
China Pharmaceuticals Corporation Information Statement - Page 2
Record Date: July 7, 2004.
Method: Merger with and into our newly-formed, wholly-owned
subsidiary, China Pharmaceuticals International
Corporation. For more information, see "Background and
Purpose of Reincorporation; Principal Features of the
Reincorporation."
Exchange Ratios: One share of China Pharmaceuticals International
Corporation common stock, without par value, will be
issued for each share of our common stock held as of the
record date. For more information, see "Background and
Purpose of Reincorporation; Principal Features of the
Reincorporation."
Effective Date: August 9, 2004 (at least 20 days after mailing of this
Information Statement).
Right to Dissent: Under the Delaware General Corporation Law,
our Certificate of Incorporation and our By-Laws, holders
of our voting securities are not entitled to dissenters'
rights with respect to the reincorporation.
QUESTIONS AND ANSWERS
This Information Statement is first being sent to stockholders on or
about July 19, 2004. The following questions and answers are intended to respond
to frequently asked questions concerning our reincorporation in the British
Virgin Islands. These questions do not, and are not intended to, address all the
questions that may be important to you. You should carefully read the entire
Information Statement, as well as its exhibits.
Q: Why are we reincorporating in the British Virgin Islands and changing
our name?
A. We believe that the reincorporation in the British Virgin Islands
("BVI") will give us more flexibility and simplicity in various
corporate transactions. The BVI has adopted an International Business
Companies Act that allows for flexible and creative corporate
structures for international businesses. Further, BVI international
business companies are wholly exempt from BVI tax on its income. As
part of the reincorporation, CPC's name will be changed to that of its
subsidiary, China Pharmaceuticals International Corporation. In
addition, changing our name to China Pharmaceuticals International
Corporation will allow us to reflect the changing nature of our
business products worldwide.
Q: Why are we not holding a meeting of stockholders to approve the
reincorporation?
A: The board of directors has already approved the reincorporation plan
and has received the written consent of officers, directors and
affiliates that represent a majority of our outstanding shares of
common stock, without the need to solicit votes. Under Delaware law and
our Certificate of Incorporation, this transaction may be approved by
the written consent of a majority of the shares entitled to vote. Since
we have already received written consents representing the necessary
number of shares, a meeting is not necessary and represents a
substantial and avoidable expense.
Q: What are the principal features of the reincorporation?
A: The reincorporation will be accomplished by merging with and into our
newly-formed, wholly-owned subsidiary, China Pharmaceuticals
International Corporation ("CP International"). One new share of CP
International common stock will be issued for each outstanding share of
our common stock held by our stockholders on the effective date for the
reincorporation. Our shares will no longer be eligible to trade on the
over-the-counter bulletin board market. Shares of CP International will
be eligible to trade in their place beginning on or about the effective
date of the reincorporation under a new CUSIP number and trading symbol
that have not yet been assigned.
China Pharmaceuticals Corporation Information Statement - Page 3
Q: What are the differences between the laws of the British Virgin Islands
and Delaware?
A: There are certain differences between the laws of the state of Delaware
and the British Virgin Islands that impact your rights as a
stockholder. For information regarding the differences between the
corporate laws of the British Virgin Islands and the state of Delaware,
please see "Background and Purpose of Reincorporation; Differences
Between the Corporate Laws and Charter Documents Governing CPC and CP
International."
Q: How will the reincorporation affect my ownership?
A: Your ownership interest will not be affected by the reincorporation.
Q: How will the reincorporation affect our officers, directors and
employees?
A: Our officers and directors will become the officers and directors of CP
International. Our employees are presently employees of Zhejiang
University Pharmaceutical Company Limited, a subsidiary, and will
remain so after the effective date of the reincorporation.
Q: How will the reincorporation affect our business?
A: CPC will continue its business through CP International. CPC will cease
its corporate existence in the state of Delaware on the effective date
of the reincorporation.
Q: What do I do with my stock certificates?
A: Delivery of your certificates issued prior to the effective date of the
reincorporation will constitute "good delivery" of shares in
transactions subsequent to reincorporation. Certificates representing
shares of CP International will be issued with respect to transfers
completed after the reincorporation. New certificates will also be
issued upon the request of any stockholder, subject to normal
requirements as to proper endorsement, signature guarantee, if
required, and payment of applicable taxes.
IT WILL NOT BE NECESSARY FOR OUR STOCKHOLDERS TO EXCHANGE THEIR
EXISTING STOCK CERTIFICATES FOR CERTIFICATES OF CP INTERNATIONAL.
OUTSTANDING STOCK CERTIFICATES OF CPC SHOULD NOT BE DESTROYED OR SENT
TO US.
Q: What if I have lost my certificate?
A: If you have lost your certificate, you can contact our transfer agent
to have a new certificate issued. You may be required to post a bond or
other security to reimburse us for any damages or costs if the
certificate is later delivered for sale of transfer. Our transfer agent
may be reached at:
Computershare Trust Company, Inc.
350 Indiana Street, Suite 800
Golden, Colorado 80401
(303) 262-0600
Q: Can I require CPC to purchase my stock?
A: No. Under Delaware law you are not entitled to appraisal and purchase
of your stock as a result of the reincorporation.
Q: Who will pay the costs of reincorporation?
A: We will pay all of the costs of reincorporation in the British Virgin
Islands, including distributing this Information Statement. We may also
pay brokerage firms and other custodians for their reasonable
China Pharmaceuticals Corporation Information Statement - Page 4
expenses for forwarding information materials to the beneficial owners
of our common stock. We do not anticipate contracting for other
services in connection with the reincorporation.
Q: Will I have to pay taxes on the new certificates?
A: We believe that the reincorporation is not a taxable event and that you
will be entitled to the same basis in the shares of CP International
that you had in our common stock. Everyone's tax situation is different
and you should consult with your personal tax advisor regarding the tax
effect of the reincorporation.
BACKGROUND AND PURPOSE OF REINCORPORATION
INTRODUCTION
The following discussion summarizes the important aspects of our
reincorporation in the British Virgin Islands. This summary does not include all
of the provisions of the Memorandum of Association or Articles of Association of
CP International, a copy of which is attached as Exhibit 2 to this Information
Statement. Copies of the Certificate of Incorporation and the by-laws of CPC are
available for inspection at our principal offices, and we will send copies to
stockholders upon request.
PRINCIPAL REASONS FOR REINCORPORATION IN THE BRITISH VIRGIN ISLANDS
We believe that the reincorporation in the British Virgin Islands will
provide a greater measure of flexibility and simplicity in corporate
transactions and reduce taxes and other costs of doing business. For many years,
the British Virgin Islands have followed a policy of encouraging incorporation
in that jurisdiction and, in furtherance of that policy, have adopted modern and
flexible corporate laws that are periodically updated and revised to meet
changing business needs. As a result, many corporations have initially chosen
the British Virgin Islands for their domicile or have subsequently
reincorporated in the British Virgin Islands in a manner similar to that which
we proposed. For a discussion of certain differences in stockholders' rights and
the powers of management under BVI and Delaware law, see "Differences Between
the Corporate Laws and Charter Documents Governing CPC and CP International."
PRINCIPAL FEATURES OF THE REINCORPORATION
The reincorporation in the British Virgin Islands will be effected by
our merger with and into CP International, a newly-formed, wholly-owned
subsidiary of CPC incorporated in the British Virgin Islands for this purpose.
CP International has not engaged in any activities except in connection with the
reincorporation. The mailing address of its principal offices and its telephone
number are Units 3207-08, 32/F, West Tower, Shun Tak Centre, 168-200 Connaught
Road Central, Hong Kong, 011 852 2255 0688. As part of its approval and
recommendation of the reincorporation, the board of directors of CPC has
approved, and recommended to our stockholders, and the holders of a majority of
our outstanding shares of common stock have adopted and approved, a Plan of
Merger pursuant to which CPC will be merged with and into CP International. The
full texts of the Plan of Merger and the Memorandum and Articles of Association
of CP International, the successor British Virgin Islands international business
company under which CPC's business will be conducted after the reincorporation,
are set forth as Exhibits 1 and 2, respectively. The discussion contained in
this Information Statement is qualified in its entirety by reference to such
Exhibits.
Upon the receipt by CPC of any required third party consents to the
reincorporation, and upon the filing of appropriate certificates of merger with
the Secretary of State of the State of Delaware and the BVI Registrar of
Companies, CPC will be merged with and into CP International pursuant to the
Plan of Merger, resulting in a change in CPC's jurisdiction of incorporation
from Delaware to the British Virgin Islands, and a change in our company's name
from China Pharmaceuticals Corporation to China Pharmaceuticals International
Corporation. We will then be subject to the BVI International Business Companies
Act and the Memorandum and Articles of Association of CP International, which
will replace CPC's Certificate of Incorporation, and by-laws. These changes may
alter the rights of stockholders of CPC. See "Differences Between the Corporate
Laws and Charter Documents Governing CPC and CP International." The text of the
Memorandum and Articles of Association of CP International is
China Pharmaceuticals Corporation Information Statement - Page 5
attached hereto as Exhibit 2. The effectiveness of the reincorporation and the
merger is conditioned upon the filing by both CPC and CP International of a
Certificate of Ownership and Merger with the state of Delaware and Articles of
Merger with the British Virgin Islands. We anticipate that the reincorporation
will become effective August 9, 2004, at least 20 days after the date of this
Information Statement. As a result of the reincorporation, CPC will cease its
corporate existence in the state of Delaware.
Upon completion of the reincorporation, each of our stockholders will
be entitled to receive one share of CP International common stock for each share
of our common stock he, she or it owns. Each share of CP International common
stock owned by us will be canceled and resume the status of authorized and
unissued CP International common stock.
IT WILL NOT BE NECESSARY FOR STOCKHOLDERS OF CPC TO EXCHANGE THEIR
EXISTING STOCK CERTIFICATES FOR CERTIFICATES OF CP INTERNATIONAL; OUTSTANDING
STOCK CERTIFICATES OF CPC SHOULD NOT BE DESTROYED OR SENT TO CPC. The common
stock of CP International will continue to be traded on the OTC Bulletin Board,
which will consider the existing stock certificates as constituting "good
delivery" in transactions subsequent to the reincorporation.
The Memorandum and Articles of Association of CP International are
different from our Certificate of Incorporation and By-Laws. Your rights as
stockholders may be affected by the reincorporation by, among other things, the
differences between the laws of the state of Delaware, which govern CPC and the
laws of the British Virgin Islands, which govern CP International. See the
information under "Differences between the Corporate Laws and Charter Documents
Governing CPC and CP International" for a summary of the differences between the
corporate laws of the state of Delaware and the British Virgin Islands.
The reincorporation will not result in any changes in our business,
management, assets, liabilities or net worth. CP International is currently our
wholly-owned subsidiary and, upon completion of the reincorporation, will
succeed by operation of law to all of our business, assets and liabilities. The
board of directors and officers of CP International will consist of the same
persons who are our directors and officers prior to the reincorporation. Our
daily business operations will continue at Units 3207-08, 32/F, West Tower, Shun
Tak Centre, 168-200 Connaught Road Central, Hong Kong.
CHANGE IN BY-LAWS
Upon the completion of the reincorporation, the Articles of Association
of CP International will become the by-laws of the surviving corporation. While
the Articles of Association of CP International are similar to the by-laws of
CPC, there are differences that may affect your rights as a stockholder.
DIFFERENCES BETWEEN THE CORPORATE LAWS AND CHARTER DOCUMENTS GOVERNING CPC AND
CP INTERNATIONAL
CPC is incorporated under the laws of the state of Delaware and CP
International is incorporated under the laws of the British Virgin Islands. On
consummation of the reincorporation, the stockholders of CPC, whose rights
currently are governed by Delaware law and CPC's Articles of Incorporation and
By-Laws, which were created pursuant to Delaware law, will become stockholders
of a British Virgin Islands international business company, CP International,
and their rights as stockholders will then be governed by British Virgin Islands
law and CP International's Memorandum and Articles of Association, which were
created under British Virgin Islands law.
Although the corporate statutes of Delaware and the British Virgin
Islands are similar, certain differences exist. The most significant
differences, in the judgment of the management of CPC, are summarized below.
Stockholders should refer to the corporate laws of the British Virgin Islands
and the Delaware General Corporation Law to understand how these laws apply to
CPC and CP International. Under British Virgin Islands law, holders of a
company's stock are referred to as "members," but for clarity, they are referred
to as "stockholders" in the following summary and elsewhere in this Information
Statement.
China Pharmaceuticals Corporation Information Statement - Page 6
CP INTERNATIONAL (BVI) CPC (DELAWARE)
Description of ordinary There is only one class of ordinary CPC common stock is the only class of
shares and common stock shares of CP International. common stock.
CP International is currently authorized CPC is currently authorized to issue
to issue up to 50,000 shares of $1.00 par 50,000,000 shares of common stock, with
value, but is amending its Memorandum a par value of $0.0001.
and Articles of Association to authorize
CP International to issue up to The holders of CPC common stock are
500,000,000 shares without par value. entitled to one vote for each share held of
record on all matters submitted to a
vote of stockholders.
The holders of ordinary shares are
entitled to one vote for each share held Holders of CPC common stock have no
of record on all matters submitted to the preemptive rights.
stockholders.
Holders of CP International ordinary
shares have no preemptive rights.
Description of preferred CP International is not authorized to The board of directors of CPC is
stock issue any preference shares. authorized to issue, without further
action by the stockholders, up to
1,000,000 shares of preferred stock,
$0.0001 par value per share, in one
or more series and to fix the rights,
preferences, privileges and restrictions
thereof. The board, without stockholder
approval, can issue preferred stock with
voting, conversion, or other rights that
could adversely affect the voting power
and other rights of the holders of common
stock. There are no shares of preferred
stock outstanding and CPC has to plans to
issue any of the preferred stock.
Annual meeting of British Virgin Islands law does not Delaware law requires annual meetings of
stockholders require an international business stockholders.
company, such as CP International, to
have an annual meeting.
China Pharmaceuticals Corporation Information Statement - Page 7
CP INTERNATIONAL (BVI) CPC (DELAWARE)
Special meeting of Under British Virgin Islands law, unless Under Delaware law, a special meeting of
stockholders otherwise provided by a company's stockholders may be called by the board of
memorandum of association or articles of directors or any other person authorized
association, special meetings of to do so in the certificate of
stockholders may be called by the incorporation or bylaws. CPC's bylaws
directors at any time. authorize the board of directors, the
chairman of the board, the president, or
Under British Virgin Islands law, stockholders holding shares in the
directors are required to call meetings aggregate entitled to cast not less than a
upon a written request from the majority of the votes at that meeting to
stockholders holding more than 50% of the call a special meeting of stockholders.
outstanding voting shares, unless the
memorandum of association or articles of
association provide for a lesser
percentage.
Action by written consent Under British Virgin Islands law, unless Under Delaware law, unless otherwise
in lieu of a stockholders' otherwise provided by a company's provided in the certificate of
meeting memorandum of association or articles of incorporation, stockholders may take
association, stockholders may take action by written consent in lieu of
action by written consent in lieu of voting at a stockholders meeting.
voting at a stockholders meeting.
Record date for Under British Virgin Islands law, the Under Delaware law and CPC's bylaws,
determining stockholders directors of a company may fix the date the record date for determining
and notice of meeting notice is given of a meeting as the stockholders of record at a meeting is a
record date for determining those shares date fixed by the directors that is not more
that are entitled to vote at the meeting. than sixty days nor less than ten days
before such meeting.
CP International's articles of CPC's bylaws provide that written notice
association provide that written notice of all meetings of stockholders, stating
of all meetings of stockholders, stating the time, place and date thereof, shall be
the place, date, time and general nature given no less than 10 nor more than 60
of the business to be conducted shall be days before the date on which the meeting
given at least 7 days before the date of is to be held to each stockholders
the proposed meeting to those persons entitled to vote at such meeting.
whose names appear as stockholders in the
share register of CP International on the
date of the notice and are entitled to
vote at the meeting. However, in general
a meeting of stockholders may be called
on shorter notice if at least 60% of the
total number of shares entitled to vote
on all matters to be considered at the
meeting waive the right to notice.
The inadvertent failure of the directors to
give notice of a meeting to a stockholder
or the fact that a stockholder has not
received the notice does not invalidate the
meeting.
China Pharmaceuticals Corporation Information Statement - Page 8
CP INTERNATIONAL (BVI) CPC (DELAWARE)
Advance notice provisions CP International's articles of CPC's bylaws do not have any advance
for stockholder proposals association do not have any advance notice provisions for stockholder
and board nomination at any notice provisions for stockholder proposals or board nomination.
stockholder annual meetings proposals or board nomination.
Number of directors CP International's articles of CPC's bylaws provide that the number of
association provide that the number of directors as may be fixed from time to
directors shall be at least one, subject time by resolution of the board of
to any subsequent amendment to change the directors. There are currently two
number of directors. members of the board of directors of CPC.
Classified board of Under British Virgin Islands law, a Delaware law provides that a corporation's
directors company's board of directors may be board of directors may be divided into
divided into various classes with three classes with staggered terms of
staggered terms of office. office.
CP International's articles of Pursuant to CPC's bylaws, the directors are
association provide that directors may to be elected at each annual stockholders'
be elected by the stockholders or the meeting to hold office until the next annual
existing directors for such term as the meeting.
members of the directors may determine.
Removal of directors CP International's articles of CPC's bylaws provide that any director or
association provide that a director shall the entire board of directors may be
vacate office if the director (a) is removed, with or without cause, by the
removed by a resolution of the holders of a majority of the shares then
stockholders or directors; (b) becomes entitled to vote at an election of
bankrupt or makes any arrangement or directors.
composition with his creditors generally;
(c) becomes of unsound mind or of such
infirm health as to be incapable of
managing his affairs; or (d) resigns.
Board of director CP International's articles of Under Delaware law, vacancies and newly
vacancies association provide that any vacancy on created directorships may be filled by a
the board of directors may be filled majority of the directors then in office,
either by the stockholders or by the even though less than a quorum, unless
remaining directors. otherwise provided in the certificate of
incorporation or bylaws. The CPC bylaws
provide that vacancies on the board of
directors and newly created directorships
resulting from an increase in the authorized
number of directors may be filled by a
majority of the directors then in office,
although less than a quorum, or by the sole
remaining director.
China Pharmaceuticals Corporation Information Statement - Page 9
CP INTERNATIONAL (BVI) CPC (DELAWARE)
Limitation of liability of CP International's articles of CPC's certificate of incorporation
directors association provide that no director provides that, to the fullest extent
shall be liable for any loss, damage or permitted by Delaware law, no director
misfortune that may happen to, or be shall be personally liable to CPC or CPC's
incurred by the company in the execution stockholders for monetary damages for any
of the duties of his office or in breach of fiduciary duty by such director
relation thereto. as a director.
British Virgin Islands law, however, sets Under Delaware law, a corporation may not
the standard of care expected from every eliminate monetary liability for (a)
director in performing his functions, as breaches of the director's duty of loyalty
requiring that he act honestly and in to the corporation or its stockholders;
good faith with a view to the best (b) acts or omissions not in good faith or
interests of the company and exercise the involving intentional misconduct or a
care, diligence and skill that a knowing violation of law; (c) unlawful
reasonably prudent person would exercise dividends, stock repurchases or
in comparable circumstances. No redemptions; or (d) transactions from
provision in the company's memorandum or which the director received an improper
articles of association or in any personal benefit. Such provisions for the
agreement entered into by the company limitation of liability may not limit a
relieves a director from the duty to act director's liability for violation of, or
in accordance with the memorandum or otherwise relieve directors from, the
articles of association or from any necessity of complying with federal or
personal liability arising from his state securities laws, or affect the
management of the business and affairs of availability of nonmonetary remedies such
the company. as injunctive relief or rescission.
It should be noted, therefore, that in
addition to the statutory standard of
care imposed on directors, they are also
bound by the usual common law duty of
care in relation to the exercise of
their powers as directors.
Indemnification CP International's articles of CPC's certificate of incorporation and
association provide that every director bylaws provide for indemnification of each
or officer of the company shall be present and former director or officer of
entitled to be indemnified against all CPC to the full extent permitted by
losses or liabilities which he may Delaware law for any expenses, liability
sustain or incur in or about the and loss incurred in connection with any
execution of his duties of his office or action, suit, or proceeding, whether civil
otherwise in relation thereto. or criminal, administrative or
investigative that such person was or is
Such indemnity is subject to the made a party to or is threatened to be
limitations that a BVI company may only made a party to by reason of the fact that
indemnify a person if the person acted such person was serving (during his or her
honestly and in good faith with a view to tenure as director and/or officer of CPC)
the best interests of the company and, in at the request of CPC as a director,
the case of criminal proceedings, the officer, employee or agent of another
person had no reasonable cause to believe corporation or entity. The director or
that his conduct was unlawful. The officer is indemnified and held harmless
decision of the directors as to whether for all expenses, liability and loss,
the person acted appropriately is, in the including attorneys' fees, judgments,
absence of fraud, sufficient. fines, ERISA excise taxes or penalties and
amounts paid or to be paid in settlement
reasonably incurred in connection with
China Pharmaceuticals Corporation Information Statement - Page 10
CP INTERNATIONAL (BVI) CPC (DELAWARE)
such proceeding. Such officer or director
is entitled to be paid by CPC for expenses
incurred in defending any such action in
advance of its final disposition. The
director or officer must, as a condition to
such advancement, provide to CPC a written
undertaking that if a court determines that
the director or officer is not entitled to
indemnification by CPC, then the director or
officer shall repay to CPC all amounts so
advanced. CPC may maintain directors' and
officers' liability insurance.
Amendment of corporate Amendments to CP International's Amendments to the CPC certificate of
documents memorandum and articles of association incorporation may be made by resolution of
may be made by resolution of stockholders the board of directors followed by the
or directors. If the amendment is to be approval of the holders of a majority of
approved at a meeting of stockholders or the shares of CPC common stock then
directors, the affirmative vote of a simple outstanding.
majority is required - i.e., there must be
more votes in favor of the amendment than The bylaws of CPC may be amended or repealed
against it. If the amendment to be approved by the board of directors or by the
by consent in writing, the affirmative vote stockholders.
of the holders of a majority of the shares
entitled to vote or a majority of the
directors is required.
Stockholder votes on Under British Virgin Islands law, the Under Delaware law, the vote of a majority
certain transactions vote of a majority of the votes cast is of the outstanding shares of capital stock
generally required to approve each of the entitled to vote is generally required to
following transactions: (a) a merger or approve each of the following
other reorganization; (b) a sale of transactions: (a) a merger or other
substantially all of the assets of a reorganization; (b) a sale of
corporation; and (c) a voluntary substantially all of the assets of a
dissolution of the corporation. corporation; and (c) a voluntary
dissolution of the corporation.
DEFENSES AGAINST HOSTILE TAKEOVERS
INTRODUCTION. While the following discussion summarizes the reasons
for, and the operation and effects of, the principal provisions of CP
International's Memorandum and Articles of Association that management has
identified as potentially having an anti-takeover effect, it is not intended to
be a complete description of all potential anti-takeover effects, and it is
qualified in its entirety by reference to the full texts of CP International's
Memorandum and Articles of Association.
In general, the anti-takeover provisions of CP International's
Memorandum and Articles of Association are designed to minimize susceptibility
to sudden acquisitions of control that have not been negotiated with and
approved by CP International's board of directors. As a result, these provisions
may tend to make it more difficult to remove the incumbent members of the board
of directors. The provisions would not prohibit an acquisition of control of CP
International or a tender offer for all of CP International's capital stock. The
provisions are designed to discourage any tender offer or other attempt to gain
control of CP International in a transaction that is not approved by the board
of directors, by making it more difficult for a person or group to obtain
control of CP International in a short time and then impose its will on the
remaining stockholders. However, to the extent these
China Pharmaceuticals Corporation Information Statement - Page 11
provisions successfully discourage the acquisition of control of CP
International or tender offers for all or part of CP International's capital
stock without approval of the board of directors, they may have the effect of
preventing an acquisition or tender offer which might be viewed by stockholders
to be in their best interests.
Tender offers or other non-open market acquisitions of stock will
generally be made at prices above the prevailing market price of CP
International's stock. In addition, acquisitions of stock by persons attempting
to acquire control through market purchases may cause the market price of the
stock to reach levels that are higher than would otherwise be the case.
Anti-takeover provisions may discourage such purchases, particularly those of
less than all of CP International's stock, and may thereby deprive stockholders
of an opportunity to sell their stock at a temporarily higher price. These
provisions may therefore decrease the likelihood that a tender offer will be
made, and, if made, will be successful. As a result, the provisions may
adversely affect those stockholders who would desire to participate in a tender
offer. These provisions may also serve to insulate incumbent management from
change and to discourage not only sudden or hostile takeover attempts, but also
any attempts to acquire control that are not approved by the board of directors,
whether or not stockholders deem such transactions to be in their best
interests.
STOCKHOLDER MEETINGS. BVI law provides that stockholder meetings shall
be convened by the board of directors upon the written request of stockholders
holding more than 50% of the votes of the outstanding voting shares of the
company. CP International's Articles of Association provide that stockholder
meetings may be called only by the directors.
NUMBER OF DIRECTORS AND FILLING VACANCIES ON THE BOARD OF DIRECTORS.
BVI law requires that the board of directors of a corporation consist of one or
more members and that the number of directors shall be set by the corporation's
Articles of Association. CP International's Articles of Association provide that
the number of directors shall be not less than one, subject to any subsequent
amendment to change the number of directors. The power to determine the number
of directors is vested in the board of directors. The power to fill vacancies,
whether occurring by reason of an increase in the number of directors or by
resignation, is vested primarily in the board of directors.
ELECTION OF DIRECTORS. Under BVI law, there is no cumulative voting by
stockholders for the election of the directors. The absence of cumulative voting
rights effectively means that the holders of a majority of the stock voted at a
stockholders meeting may, if they so choose, elect all directors of CP
International, thus precluding a small group of stockholders from controlling
the election of one or more representatives to the board of directors.
FEDERAL INCOME TAX CONSEQUENCES OF THE REINCORPORATION
CPC believes that, for federal income tax purposes, no gain or loss
will be recognized by CPC, CP International, or the stockholders of CPC who
receive CP International common stock for their CPC common stock in connection
with the reincorporation. The adjusted tax basis of each whole share of CP
International common stock received by a stockholder CPC as a result of the
reincorporation will be the same as the stockholder's aggregate adjusted tax
basis in the shares of CPC common stock converted into such shares of CP
International common stock. A stockholder who holds CPC common stock will
include in his holding period for the CP International common stock that he
receives as a result of the reincorporation his holding period for CPC common
stock converted into such CP International common stock.
State, local or foreign income tax consequences to stockholders may
vary from the federal income tax consequences described above, and STOCKHOLDERS
ARE URGED TO CONSULT THEIR OWN TAX ADVISOR AS TO THE CONSEQUENCES TO THEM OF THE
REINCORPORATION UNDER ALL APPLICABLE TAX LAWS.
BOARD OF DIRECTORS' RECOMMENDATIONS
AND STOCKHOLDER APPROVALS
On July 5, 2004, our board of directors considered and unanimously
approved the reincorporation and recommended that the stockholders adopt the
Plan of Merger. The affirmative consent of the holders of a majority
China Pharmaceuticals Corporation Information Statement - Page 12
of CPC's issued and outstanding shares of common stock was required to approve
each of the actions described in this Information Statement in the absence of a
meeting of stockholders. The requisite stockholder approval of the
reincorporation was obtained by the execution of written consents in favor of
such action by the holders of a majority of our outstanding shares of common
stock without the need to solicit votes, allowing CPC to take the proposed
action on or about August 9, 2004.
The information contained in this Information Statement constitutes the
only notice any stockholder will be provided.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
None of our officers, directors or any of their respective affiliates
has any interest in any of the matters to be acted upon, as set forth in this
Information Statement.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the information and reporting requirements of the
Securities Exchange Act of 1934 and in accordance with this act, we file
periodic reports, documents and other information with the Securities and
Exchange Commission relating to our business, financial statements and other
matters. These reports and other information may be inspected and are available
for copying at the offices of the Securities and Exchange Commission, 450 Fifth
Street, N.W., Washington, DC 20549. Our SEC filings are also available to the
public from the SEC's website at http://www.sec.gov.
INCORPORATION OF FINANCIAL INFORMATION
Our Quarterly Report on Form 10-QSB for the quarterly period year ended
March 31, 2004 as filed with the U.S. Securities and Exchange Commission on May
20, 2004, and our Current Report on Form 8-K dated May 24, 2004 as filed on May
27, 2004 (Commission File No. 0-28879), are incorporated in their entirety by
reference into this Information Statement.
As the requisite stockholder vote for each of the actions described in
this Information Statement was obtained upon the delivery of written consents
from the holders of a majority of our outstanding shares of common stock, WE ARE
NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY. This
Information Statement is for informational purposes only. Please read this
Information Statement carefully.
By Order of the Board of Directors
/s/ Y. S. KWOK
-------------------------------------------
Y. S. Kwok, Corporate Secretary
July 19, 2004
INDEX OF EXHIBITS
Exhibit 1: Plan of Merger
Exhibit 2: Memorandum and Articles of Association of China Pharmaceuticals
International Corporation
China Pharmaceuticals Corporation Information Statement - Page 13
EXHIBIT 1
PLAN OF MERGER
PLAN OF MERGER
THIS PLAN OF MERGER (this "Plan of Merger") is made and entered into by
and between CHINA PHARMACEUTICALS CORPORATION, a Delaware corporation (the
"Parent"), and CHINA PHARMACEUTICALS INTERNATIONAL CORPORATION, an international
business company incorporated in the British Virgin Islands (the "Subsidiary" or
"Surviving Entity").
RECITALS
The Parent is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. The Parent is located at
Units 3207-8, 32/F, West Tower, Shun Tak Centre, 168-200 Connaught Road Central,
Hong Kong.
The Subsidiary is a corporation duly organized, validly existing and in
good standing under the laws of the British Virgin Islands. The Subsidiary is
located at Units 3207-8, 32/F, West Tower, Shun Tak Centre, 168-200 Connaught
Road Central, Hong Kong.
The Parent owns 100% of the issued and outstanding shares of the
Subsidiary.
The stockholder and/or board of director approvals and consents
required in accordance with the provisions of Section 253 of the General
Corporation Law of Delaware (the "DGCL") and Section VII of the British Virgin
Islands International Business Companies Act ("BVI IBCA") for the merger of the
Parent with and into the Subsidiary, upon the terms and conditions set forth in
this Plan of Merger, have been obtained.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and for the purpose of stating the
terms and conditions of the Merger, the mode of effectuating the same, and such
other details and provisions as are deemed desirable, the parties hereto have
agreed, and do hereby agree, subject to the terms and conditions hereinafter set
forth, as follows:
ARTICLE I
TERMS OF MERGER
1.1 MERGER. On the Effective Date of the Merger (as hereinafter
defined), in accordance with the DGCL and BVI IBCA, the Parent shall be merged
with and into the Subsidiary upon the terms and conditions set forth in the
subsequent provisions of this Plan of Merger (the "Merger").
1.2 FILINGS AND EFFECTIVENESS. The date and time when the Merger shall
become effective (the "Effective Date of the Merger") shall be when the
following actions have been completed: (i) the Certificate of Ownership and
Merger, the form of which is attached hereto as Exhibit A, is filed with the
Secretary of State of the State of Delaware; and (ii) the Articles of Merger,
the form of which is attached hereto as Exhibit B, is filed with the Registrar
of Companies of the British Virgin Islands; and upon the stated effective date
in such documents.
1.3 EFFECT OF MERGER. The Subsidiary, as the Surviving Entity in the
Merger, will continue to be governed by the laws of the British Virgin Islands
and the separate corporate existence of the Subsidiary and all of its rights,
privileges, immunities and franchises, public or private, and all of its duties
and liabilities as an international business company organized under the BVI
IBCA will continue unaffected and unimpaired by the Merger. At the close of
business on the Effective Date of the Merger, the existence of the Parent as a
distinct entity shall cease. At that time all rights, franchises and interests
of the Subsidiary and the Parent, respectively, in and to every type of
property, whether real, personal or mixed, and choices in action shall be
transferred to and vested in the Surviving Entity by virtue of the Merger
without any deed or other transfer. The Surviving Entity, without any order or
other action on the part of any court or otherwise, shall possess all and
singular the rights, privileges, powers and franchises, and shall be subject to
all the restrictions, disabilities and duties of the Parent and the Subsidiary,
and all property, whether real, personal or mixed, of the Parent and the
Subsidiary, and all debts due to the Parent and the Subsidiary on whatever
account, and all other things in action or belonging to each of said
corporations, shall be vested in the Surviving Entity.
Plan of Merger - page 1 of 4
All property, rights, privileges, powers and franchises, and
all and every other interest of the Parent or the Subsidiary as of the Effective
Date of the Merger, shall thereafter be the property of the Surviving Entity to
the same extent and effect as such was of the Parent and the Subsidiary,
respectively, prior to the Effective Date of the Merger, and the title to any
real estate vested by deed or otherwise in the Parent and the Subsidiary shall
not revert or be in any way impaired by reason of the Merger; provided, however,
that all rights of creditors and all liens upon any property of the Parent and
the Subsidiary shall thenceforth attach to the Surviving Entity and may be
enforced against it to the same extent as if said debts, liabilities, and duties
had been incurred or contracted by the Surviving Entity. Neither the rights of
creditors nor any liens or security interests upon the property of either of the
Parent or the Subsidiary shall be impaired by the Merger. The Surviving Entity
shall carry on business with the assets of the Parent and the Subsidiary. The
established offices and facilities of the Parent and the Subsidiary immediately
prior to the Merger shall become the established offices and facilities of the
Surviving Entity. All corporate acts, plans, policies, resolutions, approvals
and authorizations of the stockholders, Board of Directors, committees elected
or appointed by the Board of Directors, officers and agents of the Parent, which
were valid and effective immediately prior to the Merger shall be taken for all
purposes as the acts, plans, policies, resolutions, approvals and authorizations
of the Surviving Entity and shall be as effective and binding thereon as the
same were with respect to the Parent. The employees of the Parent shall become
the employees of the Surviving Entity and continue to be entitled to the same
rights and benefits that they enjoyed as employees of the Parent.
1.4 DISPOSITION AND CONVERSION OF SHARES. The mode of carrying the
Merger into effect and the manner and the disposition of the shares of the
Parent and the Subsidiary shall be as follows:
(a) SUBSIDIARY SHARES. Each share of common stock, without par
value, of the Subsidiary issued and outstanding immediately prior to
the Effective Date of the Merger shall, by virtue of the Merger and
without any action by the Subsidiary, the holder of such shares or by
any other person, be cancelled and returned to the status of authorized
but unissued shares, all rights in respect thereof shall cease to exist
and no shares of the Subsidiary common stock or other securities of the
Surviving Entity shall be issuable with respect thereto.
(b) PARENT SHARES. Each share of common stock, par value
$0.0001 per share, of the Parent issued and outstanding immediately
prior to the Effective Date of the Merger shall, by virtue of the
Merger and without any action by the Parent, the holder of such shares
or any other person, be converted into and exchanged for one fully paid
and nonassessable share of common stock, without par value, of the
Surviving Corporation.
(c) EXCHANGE OF CERTIFICATES. Each outstanding certificate
theretofore representing shares of Parent common stock shall be deemed
for all purposes to represent the number of whole shares of the
Subsidiary common stock into which such shares of Parent common stock
were converted in the Merger and the holder thereof shall not be
required to surrender such certificate for a certificate issued by the
Subsidiary. However, after the Effective Date of the Merger, each
holder of an outstanding certificate representing shares of the Parent
common stock may, at such stockholder's option and sole discretion,
surrender the same for cancellation to Computershare Trust Company,
Inc. as the sole stock transfer and registrar of the Parent common
stock and as exchange agent therefor (the "Exchange Agent"), and each
such holder shall be entitled to receive in exchange therefor a
certificate or certificates representing the number of shares of the
Subsidiary common stock into which the surrendered shares were
converted as herein provided. The registered owner on the books and
records of the Subsidiary or the Exchange Agent of any such outstanding
certificate representing shares of the Parent common stock shall, until
such certificate shall have been surrendered for transfer or conversion
or otherwise accounted for to the Surviving Entity or the Exchange
Agent, have and be entitled to exercise any voting and other rights
with respect to and to receive dividends and other distributions upon
the shares of common stock of the Surviving Entity represented by such
outstanding certificate as provided above. Each certificate
representing common stock of the Surviving Entity so issued in the
Merger shall bear the same legends, if any, with respect to the
restrictions on transferability as the certificates of the Parent so
converted and given in exchange therefor, unless otherwise determined
by the Board of Directors of the Surviving Entity in compliance with
applicable laws.
Plan of Merger - page 2 of 4
If any certificate for shares of Surviving Entity stock is to
be issued in a name other than that in which the certificate
surrendered in exchange therefor is registered, it shall be a condition
of issuance thereof that the certificate so surrendered shall be
properly endorsed and otherwise in proper form for transfer, that such
transfer otherwise be proper and that the person requesting such
transfer pay to the Exchange Agent any transfer or other taxes payable
by reason of issuance of such new certificate in a name other than that
of the registered holder of the certificate surrendered or establish to
the satisfaction of Surviving Entity that such tax has been paid or is
not payable.
(d) VALIDITY OF SUBSIDIARY COMMON STOCK. At the Effective Date
of the Merger, all shares of the Subsidiary common stock into which the
shares of the Parent common stock are to be converted pursuant to the
Merger shall be validly issued, fully paid and nonassessable and shall
be issued in full satisfaction of all rights pertaining to the
corresponding shares of the Parent common stock.
1.5 MEMORANDUM OF ASSOCIATION OF SURVIVING ENTITY. The Memorandum of
Association of the Subsidiary as in effect immediately prior to the Effective
Date of the Merger shall continue in full force and effect as the Memorandum of
Association of the Surviving Entity until duly amended in accordance with the
provisions thereof and applicable law.
1.6 ARTICLES OF ASSOCIATION OF SURVIVING ENTITY. The Articles of
Association of the Subsidiary as in effect immediately prior to the Effective
Date of the Merger shall continue in full force and effect as the Articles of
Association of the Surviving Entity until altered, amended or repealed as
provided in the Articles of Association or as provided by applicable law.
1.7 DIRECTORS AND OFFICERS OF SURVIVING ENTITY. The directors and
officers of the Parent as of the Effective Date of the Merger shall be and
become the directors and officers of the Surviving Entity, until their
successors shall be duly elected and qualified or until their sooner death,
resignation or removal.
1.8 ACCOUNTING MATTERS. The assets and liabilities of the Parent and
the Subsidiary, as of the Effective Date of the Merger, shall be taken upon the
books of the Surviving Entity at the amounts at which they shall be carried at
that time on the books of the Parent and the Subsidiary. The amount of the
capital surplus and earned surplus accounts of the Surviving Entity after the
Merger shall be determined by the Board of Directors of the Surviving Entity in
accordance with the laws of the British Virgin Islands and generally accepted
accounting principles.
ARTICLE II
GENERAL PROVISIONS
2.1 BINDING AGREEMENT. This Plan of Merger shall be binding upon
and shall inure to the benefit of the parties and their respective successors
and assigns.
2.2 AMENDMENTS. The Board of Directors of the Parent and the Subsidiary
may amend this Plan of Merger at any time prior to the Effective Date of the
Merger, provided that an amendment made subsequent to the adoption of this Plan
of Merger by the stockholders of either the Parent or the Subsidiary shall not:
(i) alter or change the amount or kind of shares, securities, cash, property
and/or rights to be received in exchange for or on conversion of all or any of
the shares of any class or series thereof of the Parent and the Subsidiary; (ii)
alter or change any term of the Memorandum of Association of the Surviving
Entity to be effected by the Merger; or (iii) alter or change any of the terms
and conditions of this Plan of Merger if such alteration or change would
adversely affect the holders of any class or series of capital stock of either
the Parent and the Subsidiary.
2.3 FURTHER ASSURANCES. From time to time, as and when required by the
Subsidiary or by its successors or assigns, there shall be executed and
delivered on behalf of the Parent such deeds and other instruments, and there
shall be taken or caused to be taken by the Parent such further and other
actions, as shall be appropriate or necessary in order to vest or perfect in or
conform of record or otherwise by the Surviving Entity the title to and
possession of all the property, rights, privileges, powers, franchises, assets,
immunities and authority of the Parent and otherwise to carry out the purposes
of this Plan of Merger. The officers and directors of the
Plan of Merger - page 3 of 4
Subsidiary are fully authorized in the name and on behalf of the Parent or
otherwise to take any and all such action and to execute and deliver any and all
such deeds or other instruments.
2.4 ABANDONMENT. At any time before the Effective Date of the Merger,
this Plan of Merger may be terminated and the Merger may be abandoned for any
reason whatsoever by the Board of Directors of either the Parent or the
Subsidiary, or by both, by the adoption of appropriate resolutions and written
notification thereof to the other party to the Merger, notwithstanding the
approval of this Plan of Merger by the stockholders of the Parent or Subsidiary,
or by both. In the event of the termination of this Plan of Merger and the
abandonment of the Merger pursuant to the provisions of this Section, this Plan
of Merger shall become void and have no effect, without any liability on the
part of either of the Parent or the Subsidiary or their respective officers,
directors or shareholders in respect thereof.
2.5 GOVERNING LAW. This Plan of Merger shall be construed, interpreted
and enforced in accordance with and governed by the laws of the State of
Delaware and, so far as applicable, the merger provisions of the BVI ICBA.
IN WITNESS WHEREOF, this Plan of Merger is hereby executed upon behalf
of each of the parties thereto as of the date set forth below.
China Pharmaceuticals Corporation
Dated: By:
-------------------- --------------------------------------------
Aaron ZHU Xiaojun, President
China Pharmaceuticals International Corporation
Dated: By:
--------------------- --------------------------------------------
Dr. Di FAN, Director
Plan of Merger - page 4 of 4
Exhibit A
Certificate of Ownership And Merger
To Be Filed With The Secretary Of
State Of The State of Delaware
CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
CHINA PHARMACEUTICALS CORPORATION
INTO
CHINA PHARMACEUTICALS INTERNATIONAL CORPORATION
(PURSUANT TO SECTION 253 OF THE DELAWARE GENERAL CORPORATION LAW)
China Pharmaceuticals Corporation, a corporation organized and existing under
the laws of the state of Delaware, DOES HEREBY CERTIFY:
FIRST: That it was organized pursuant to the provisions of the
Delaware General Corporation Law on January 2, 2001.
SECOND: That it owns 100% of the outstanding shares of capital stock
of China Pharmaceuticals International Corporation, an
international business company organized pursuant to the
provisions of the British Virgin Islands International
Business Companies Act, on November 25, 2003.
THIRD: That its Board of Directors, by unanimous written consent
executed on July 5, 2004, determined to merge the corporation
into said China Pharmaceuticals International Corporation and
did adopt the following resolutions:
RESOLVED, that this corporation, China Pharmaceuticals
Corporation, merge itself into China Pharmaceuticals
International Corporation, which corporation, China
Pharmaceuticals International Corporation, assumes all of the
obligations of China Pharmaceuticals Corporation; and
RESOLVED FURTHER, that the terms and conditions of the merger
are as follows: (a) upon completion of the merger, the holders
of the common stock, par value $0.0001, of China
Pharmaceuticals Corporation shall receive an equivalent number
of shares of the common stock, without par value, of China
Pharmaceuticals International Corporation and shall have no
further claims of any kind or nature; and (b) all of the
common stock, without par value, of China Pharmaceuticals
International Corporation held by China Pharmaceuticals
Corporation shall be surrendered and cancelled; and
RESOLVED FURTHER, that the Board of Directors deems the
foregoing resolutions advisable and proposes that the
stockholders of this corporation, China Pharmaceuticals
Corporation, approve the foregoing resolution in the form of
written consent in lieu of a meeting.
FOURTH: That this merger has been approved by the holders of at least
a majority of the outstanding shares of common stock of this
corporation, China Pharmaceuticals Corporation, by written
consent in lieu of a meeting.
FIFTH: That the Effective Date of this merger shall be August 9,
2004.
IN WITNESS WHEREOF, said China Pharmaceuticals Corporation has caused this
Certificate to be signed by Aaron ZHU Ziaojun, an authorized officer this ___
day of July, 2004.
By:
---------------------------------------
Name: Aaron ZHU Xiaojun
Title: President
Exhibit B
Articles of Merger
To Be Filed with the Registrar of Companies
Of the British Virgin Islands
ARTICLES OF MERGER
MERGING
CHINA PHARMACEUTICALS CORPORATION
INTO
CHINA PHARMACEUTICALS INTERNATIONAL CORPORATION
(PURSUANT TO SECTION VII OF THE BRITISH VIRGIN ISLANDS
INTERNATIONAL BUSINESS COMPANIES ACT)
China Pharmaceuticals Corporation, a corporation organized and existing under
the laws of the state of Delaware, DOES HEREBY CERTIFY:
FIRST: That it was organized pursuant to the provisions of the
Delaware General Corporation Law on January 2, 2001.
SECOND: That it owns 100% of the outstanding shares of capital stock
of China Pharmaceuticals International Corporation, an
international business company incorporated under the
provisions of the British Virgin Islands International
Business Companies Act, on November 25, 2003.
THIRD: That its Board of Directors, by unanimous written consent
executed on July 5, 2004, determined to merge the corporation
into said China Pharmaceuticals International Corporation and
did adopt the following resolutions:
RESOLVED, that this corporation, China Pharmaceuticals
Corporation, merge itself into China Pharmaceuticals
International Corporation, which corporation, China
Pharmaceuticals International Corporation, assumes all of the
obligations of China Pharmaceuticals Corporation; and
RESOLVED FURTHER, that the terms and conditions of the merger
are as follows: (a) upon completion of the merger, the holders
of the common stock, par value $0.0001, of China
Pharmaceuticals Corporation shall receive an equivalent number
of shares of the common stock, without par value, of China
Pharmaceuticals International Corporation and shall have no
further claims of any kind or nature; and (b) all of the
common stock, without par value, of China Pharmaceuticals
International Corporation held by China Pharmaceuticals
Corporation shall be surrendered and cancelled; and
RESOLVED FURTHER, that the Board of Directors deems the
foregoing resolutions advisable and proposes that the
stockholders of this corporation, China Pharmaceuticals
Corporation, approve the foregoing resolution in the form of
written consent in lieu of a meeting.
FOURTH: That this merger has been approved by the holders of at least
a majority of the outstanding shares of common stock of this
corporation, China Pharmaceuticals Corporation, by written
consent in lieu of a meeting.
FIFTH: That the Effective Date of this merger shall be August 9,
2004.
IN WITNESS WHEREOF, said China Pharmaceuticals Corporation has caused this
Certificate to be signed by Aaron ZHU Xiaojun, an authorized officer this ___
day of July, 2004.
By:
----------------------------------------
Name: Aaron ZHU Ziaojun
Title: President
EXHIBIT 2
MEMORANDUM AND ARTICLES OF ASSOCIATION OF
CHINA PHARMACEUTICALS INTERNATIONAL CORPORATION
IBC No. 569163
territory of the british virgin islands
the international business companies act, cap. 291
MEMORANDUM AND ARTICLES OF ASSOCIATION OF
CHINA PHARMACEUTICALS INTERNATIONAL CORPORATION
INCORPORATED 25 November 2003
Amendment registered on 14 April, 2004
TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE INTERNATIONAL BUSINESS COMPANIES ACT, CAP. 291
MEMORANDUM OF ASSOCIATION OF
CHINA PHARMACEUTICALS INTERNATIONAL CORPORATION
1. The Name of the Company is CHINA PHARMACEUTICALS INTERNATIONAL
CORPORATION.
2. The Registered Office of the Company will be situate at Palm Grove House,
P.O. Box 438, Road Town, Tortola, British Virgin Islands or at such other
place within the British Virgin Islands as the directors may from time to
time determine.
3. The Registered Agent of the Company will be Equity Trust (BVI) Limited,
Palm Grove House, P.O. Box 438, Road Town, Tortola, British Virgin Islands
or such other person or company being a person or company entitled to act
as a registered agent as the directors may from time to time determine.
4. The Objects for which the Company is established are:
(1) To buy, sell, underwrite, invest in, exchange or otherwise acquire,
and to hold, manage, develop, deal with and turn to account any
bonds, debentures, shares (whether fully paid or not), stocks,
options, commodities, futures, forward contracts, notes or
securities of governments, states, municipalities, public
authorities or public or private limited or unlimited companies in
any part of the world, precious metals, gems, works of art and other
articles of value, and whether on a cash or margin basis and
including short sales, and to lend money against the security of any
of the aforementioned property.
(2) To buy, own, hold, subdivide, lease, sell, rent, prepare building
sites, construct, reconstruct, alter, improve, decorate, furnish,
operate, maintain, reclaim or otherwise deal with and/or develop
land and buildings and otherwise deal in real estate in all its
branches, to make advances upon the security of land or houses or
other property or any interest therein, and whether erected or in
course of erection and whether on first mortgage or charge or
subject to a prior mortgage or mortgages or charge or charges, and
to develop land and buildings as may seem expedient but without
prejudice to the generality of the foregoing.
(3) To borrow or raise money by the issue of debentures, debenture stock
(perpetual or terminable), bonds, mortgages, or any other securities
founded or based upon all or any of the assets or property of the
Company or without any security and upon such terms as to priority
or otherwise as the Company shall think fit.
(4) To guarantee loans and to lend money with or without guarantee or
security to any persons, firms or corporations.
(5) To engage in any other business or businesses whatsoever, or in any
acts or activities, which are not prohibited under any law for the
time being in force in the British Virgin Islands.
1
(6) To do all such other things as are incidental to or the Company may
think conducive to the attainment of all or any of the above
objects.
And it is hereby declared that the intention is that each of the objects
specified in each paragraph of this clause shall, except where otherwise
expressed in such paragraph, be an independent main object and be in
nowise limited or restricted by reference to or inference from the terms
of any other paragraph or the name of the Company.
5. (1) The Company has no power to :
(a) carry on business with persons resident in the British
Virgin Islands;
(b) own an interest in real property situate in the British
Virgin Islands, other than a lease referred to in
paragraph (e) of subsection (2);
(c) carry on banking or trust business, unless it is
licensed under the Banks and Trust Companies Act, 1990;
(d) carry on business as an insurance or reinsurance
company, insurance agent or insurance broker, unless it
is licensed under an enactment authorizing it to carry
on that business;
(e) carry on the business of company management unless it
is licensed under the Company Management Act, 1990; or
(f) carry on the business of providing the registered
office or the registered agent for companies
incorporated in the British Virgin Islands.
(2) For purposes of paragraph (a) of subsection (1), the company
shall not be treated as carrying on business with persons
resident in the British Virgin Islands by reason only that:
(a) it makes or maintains deposits with a person carrying
on banking business within the British Virgin Islands;
(b) it makes or maintains professional contact with
solicitors, barristers, accountants, bookkeepers, trust
companies, administration companies, investment
advisers or other similar persons carrying on business
within the British Virgin Islands;
(c) it prepares or maintains books and records within the
British Virgin Islands;
(d) it holds, within the British Virgin Islands, meetings
of its directors or members;
(e) it holds a lease of property for use as an office from
which to communicate with members or where books and
records of the company are prepared or maintained;
(f) it holds shares, debt obligations or other securities
in a company incorporated under the international
Business Companies Act or under the Companies Act; or
2
(g) shares, debt obligations or other securities in the
company are owned by any person resident in the British
Virgin Islands or by any company incorporated under the
International Business Companies Act or under the
Companies Act.
6. The shares in the Company shall be issued in the currency of the United
States of America.
7. The authorised capital of the Company is USD 50,000 divided into 50,000
registered shares with a par value of USD 1.00 each.
8. Shares in the Company may only be issued as registered shares and may not
be exchanged for shares issued to bearer.
9. The shares shall be divided into such number of classes and series as the
directors shall by resolution from time to time determine and until so
divided shall comprise one class and series.
10. The directors shall by resolution have the power to issue any class or
series of shares that the Company is authorised to issue in its capital,
original or increased, with or subject to any designations, powers,
preferences, rights, qualifications, limitations and restrictions.
11. The Company shall by a resolution of members or by a resolution of the
directors have the power to amend or modify any of the conditions
contained in this Memorandum of Association and to increase or reduce the
authorised capital of the Company in any way which may be permitted by
law.
3
(intentionally left blank)
4
WE, the undersigned Registered Agent, subscribe our name to this Memorandum of
Association.
================================================================================
NAME, ADDRESS AND DESCRIPTION OF SUBSCRIBER
================================================================================
EQUITY TRUST (BVI) LIMITED
Palm Grove House
P.O. Box 438
Road Town, Tortoa
British Virgin Islands
M. FEVRIER (Sgd.)
------------------------------
Registered Agent
Authorised Signatory
================================================================================
DATED 25 November 2003
WITNESS to the above signature: N. HULL (Sgd.)
Road Town
Tortola
British Virgin Islands
5
(intentionally left blank)
6
TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE INTERNATIONAL BUSINESS COMPANIES ACT, CAP. 291
ARTICLES OF ASSOCIATION OF
CHINA PHARMACEUTICALS INTERNATIONAL CORPORATION
1. References in these Articles to the Act shall mean
The International Business Companies Act, Cap. 291.
The following Regulations shall constitute the
Articles of the Company. In these Articles words
and expressions defined in the Act shall have the
same meaning and, unless otherwise required by the
context, the singular shall include the plural and
vice-versa, the masculine shall include the
feminine and neuter and references to persons shall
include corporations and all legal entities capable
of having a legal existence.
SHARES 2. The authorised capital of the Company is USD 50,000
divided into 50,000 registered shares with a par
value of USD 1.00 each.
3. Every person whose name is entered as a member in
the share register being the holder of registered
shares shall, without payment, be entitled to a
certificate signed by two directors or two officers
or by one director and one officer of the Company
or under the common seal of the Company with or
without the signature of any director or officer of
the Company specifying the share or shares held and
the par value thereof, provided that in respect of
a registered share, or shares, held jointly by
several persons the Company shall not be bound to
issue more than one certificate, and delivery of a
certificate for a share to one of several joint
holders shall be sufficient delivery to all.
4. If a certificate is worn out or lost it may be
renewed on production of the worn- out certificate,
or on satisfactory proof of its loss together with
such indemnity as the directors may reasonably
require. Any member, receiving a share certificate
shall indemnify and hold the Company and its
officers harmless from any loss or liability which
it or they may incur by reason of wrongful or
fraudulent use or representation made by any person
by virtue of the possession of such certificate.
SHARE CAPITAL 5. Subject to the provisions of these Articles, the
AND VARIATION unissued shares of the Company (whether forming
OF RIGHTS part of the original or any increased capital) and
treasury shares (if any) shall be at the disposal
of the directors who may, without limiting or
affecting any rights previously conferred on the
holders of any existing shares or class or series
of shares, offer, allot, grant options over or
otherwise dispose of them to such persons at such
times and for such consideration, being not less
than the par value of the shares being disposed
of, and upon such terms and conditions as the
Company may, by resolution of the directors,
determine.
6. No shares of the Company may be issued until the
consideration in respect of the shares is fully
paid, and when issued the share is for all purposes
fully paid and nonassessable save that a share
issued for a promissory note or other written
obligation for payment of a debt may be issued
subject to forfeiture in the manner prescribed in
Regulation 18.
7
7. Shares of the Company shall be issued for money,
services rendered, personal property (including
other shares, debt obligations or other securities
in the Company), an estate in real property, a
promissory note or other binding obligation, to
contribute money or property, or any combination
thereof.
8. Without prejudice to any special rights previously
conferred on the holders of any existing shares or
class of shares, any share in the Company may be
issued with such preferred, deferred or other
special rights or such restrictions, whether in
regard to dividend, voting, return of capital or
otherwise as the directors may from time to time
determine.
9. Subject to the provisions of the Act in this
regard, shares may be issued on the terms that they
are redeemable, or, at the option of the Company,
are liable to be redeemed on such terms and in such
manner as the directors before or at the time of
the issue of the shares may determine.
10. The directors may redeem any such share at a
premium.
11. If at anytime the share capital is divided into
different classes of shares, the rights attached to
any class (unless otherwise provided by the terms
of issue of the shares of that class) may, whether
or not the Company is being wound up, be varied
with the consent in writing of the holders of not
less than three- fourths of the issued shares of
that class and of any other class of shares which
may be affected by such variation.
12. The rights conferred upon the holders of the shares
of any class issued with preferred or other rights
shall not, unless otherwise expressly provided by
the terms of issue of the shares of that class, be
deemed to be varied by the creation or issue of
further shares ranking pari passu therewith.
13. Except as required by law, the persons named in the
share register shall be recognised by the Company
as holding the equitable, contingent, future or
partial interest in any share or any interest in
any fractional part of a share or (except only as
by these Regulations or by law otherwise provided)
any other rights in respect of any share thereof by
the registered holder.
TRANSFER OF 14. Shares in the Company may be transferred by a
SHARES written instrument signed by the transferor and
containing the name and address of the transferee
or in such other manner or form and subject to such
evidence as the directors shall consider
appropriate. No transfer of shares shall be
recognised unless the transfer has been approved by
the Board of Directors.
TRANSMISSION 15. The personal representatives, guardian or trustee
OF SHARES as the case may be of a deceased, incompetent or
bankrupt sole holder of a share shall be the only
persons recognised by the Company as having any
title to the share. In the case of a share
registered in the names of two or more holders, the
survivor or survivors, and the personal
representative, guardian or trustee as the case may
be of the deceased, incompetent or bankrupt holder
or holders, shall be the only persons recognised by
the Company as having any title to the share but
they shall not be entitled to exercise any rights
as a member of the Company until they have
proceeded as set forth in the following two
Regulations.
16. Any person becoming entitled by operation of law or
otherwise to a share or shares in consequence of
the death, incompetence or bankruptcy of any member
may be registered as a member upon such evidence
being produced as may reasonably be required by the
directors. An application by any such person to be
registered as a member for all purposes shall be
deemed to be a transfer of shares of the deceased,
incompetent or bankrupt member and the directors
shall treat it as such.
8
17. Any person who has become entitled to a share or
shares in consequence of the death, incompetence or
bankruptcy of any member may, instead of being
registered himself, request in writing that some
person to be named by him be registered as a
transferee of such share or shares and such request
shall likewise be treated as if it were a transfer.
FORFEITURE 18. Where shares of the company are issued for a
OF SHARES promissory note or other written binding
obligation to contribute money or property and
the terms of the promissory note or other written
binding obligation are not met:
(i) Written notice specifying a date for
payment to be made shall be served on
the member who defaults in making
payment pursuant to the promissory note
or other written binding obligation to
pay a debt;
(ii) The written notice referred to in (i)
above shall name a further date not
earlier than the expiration of 14 days
from the date of service of the notice
on or before which the payment required
by the notice is to be made and shall
contain a statement that in the event
of non-payment at or before the time
named in the notice the shares, or any
of them, in respect of which payment is
not made will be liable to be
forfeited;
(iii) Where notice has been issued and the
requirements of the notice have not
been complied with, the directors may,
at any time before tender of payment,
by resolution of directors forfeit and
cancel the shares to which the notice
relates;
and the Company shall have no obligation to refund
any monies to the member whose shares have been
cancelled and that member shall be discharged from
any further obligation to the Company.
ACQUISITION 19. Subject to the provisions of the Act in this
OF OWN SHARES regard, the directors may, on behalf of the
Company, purchase, redeem or otherwise acquire any
of the Company's own shares for such consideration
as they consider fit, and either cancel or hold
such shares as Treasury shares. The directors may
dispose of any shares held as Treasury shares on
such terms and conditions as they may from time to
time determine. Shares may be purchased or
otherwise acquired in exchange for newly issued
shares in the Company.
ALTERATION IN 20. Subject to the terms of any resolution passed for
CAPITAL the purpose of increasing the authorised capital of
the Company, such increased capital may be divided
into shares of such respective amounts, and with
such rights or privileges (if any) as may be
thought expedient.
21. Any capital raised by the creation of new shares
shall be considered as part of the original
capital, and shall be subject to the same
provisions as if it had been part of the original
capital.
22. The Company may by resolution:
(a) consolidate and divide all or any of its share
capital into shares of larger amount than its
existing shares;
(b) cancel any shares which, at the date of the
passing of the resolution, have not been taken
or agreed to be taken by any person and
diminish the amount of its authorised share
capital by the amount of the shares so
cancelled;
9
(c) sub-divide its shares or any of them into
shares of smaller amount than is fixed by the
Memorandum of Association and so that subject
to the provisions of Regulation 11 the
resolution whereby any share is sub-divided
may determine that as between the holders of
the shares resulting from such sub-division
one or more of the shares may have such
preferred or other special rights over or may
have such qualified or deferred rights or be
subject to any such restrictions as compared
with the other or others as the Company has
power to attach to unissued or new shares;
(d) subject to any confirmation or consent
required by law, reduce its authorised and
issued share capital or any capital redemption
reserve fund or any share premium account in
any manner.
23. Where any difficulty arises in regard to any
consolidation and division under this regulation
the directors may settle the same as. they think
expedient.
MEETINGS OF 24. The directors may convene meetings of the members
MEMBERS of the Company at such times and in such manner and
places as the directors consider necessary or
desirable, and they shall convene such a meeting
upon the written request of members holding more
than 50 per cent of the votes of the outstanding
voting shares in the Company.
25. Seven days' notice at the least specifying the
place, the day and the hour of the meeting and the
general nature of the business to be conducted
shall be given in manner hereinafter mentioned to
such persons whose names on the date the notice is
given appear as members in the share register of
the Company and are entitled to vote at the
meeting.
26. A meeting of the members shall be deemed to have
been validly held, notwithstanding that it is held
in contravention of the requirement to give notice
in Regulation 25, if notice of the meeting is
waived by at least 60 per cent in number of the
members having a right to attend and vote at the
meeting; and for this purpose, the presence of a
member at the meeting shall be deemed to constitute
waiver on his part.
27. The inadvertent failure of the directors to give
notice of a meeting to a member or attorney as the
case may be, or the fact that a member or attorney
has not received the notice, does not invalidate
the meeting.
PROCEEDINGS AT 28. No business shall be transacted at any meeting
MEETINGS OF unless a quorum of members is present at the time
MEMBERS when the meeting proceeds to business. A quorum
shall consist of the holder or holders present in
person or by proxy of not less than one-third of
the shares of each class or series of shares
entitled to vote as a class or series thereon and
the same proportion of the votes of the remaining
shares entitled to vote thereon.
29. If within half an hour from the time appointed for
the meeting a quorum is not present, the meeting
shall be dissolved.
30. At every meeting the members present shall choose
some one of their number to be the Chairman. If the
members are unable to choose a Chairman for any
reason, then the person representing the greatest
number of voting shares present at the meeting
shall preside as Chairman failing which the oldest
individual person shall take the chair.
31. The Chairman may, with the consent of the meeting,
adjourn any meeting from time to time, and from
place to place, but no business shall be transacted
at any adjourned meeting other than the business
left unfinished at the meeting from which the
adjournment took place.
10
32. At any meeting a resolution put to the vote of the
meeting shall be decided on a show of hands by
simple majority unless a poll is (before or on the
declaration of the result of the show of hands)
demanded:
(a) by the Chairman; or
(b) by any member or members present in person or
by proxy.
33. Unless a poll be so demanded, a declaration by the
Chairman that a resolution has, on a show of hands,
been carried, and an entry to that effect in the
book containing the minutes of the proceedings of
the Company, shall be sufficient evidence of the
fact, without proof of the number or proportion of
the votes recorded in favour of or against such
resolution.
34. If a poll is duly demanded it shall be taken in
such manner as the Chairman directs, and the result
of the poll shall be deemed to be the resolution of
the meeting at which the poll was demanded. The
demand for a poll may be withdrawn.
35. In the case of an equality of votes, whether on a
show of hands, or on a poll, the Chairman of the
meeting at which the show of hands takes place, or
at which the poll is demanded, shall be entitled to
a second or casting vote.
VOTES OF 36 At any meeting of members whether on a show of
MEMBERS hands or on a poll every holder of a voting share
present in person or by proxy shall have one vote
for every voting share of which he is the holder.
37. A resolution which has been notified to all members
for the time being entitled to vote and which has
been approved by a majority of the votes of those
members in the form of one or more documents in
writing or by facsimile, telex, telegram, cable or
other written electronic communication shall
forthwith, without the need for any notice, become
effectual as a resolution of the members.
38. If a committee be appointed for any member who is
of unsound mind he may vote by his committee.
39. If two or more persons are jointly entitled to a
share or shares:
(a) each of them may be present in person or by
proxy at a meeting of members and may speak as
a member;
(b) if only one of them is present in person or by
proxy, he may vote on behalf of all of them;
and
(c) if two or more are present in person or by
proxy, they must vote as one.
40. Votes may be given either personally or by proxy.
41. The instrument appointing a proxy shall be produced
at the place appointed for the meeting before the
time for holding the meeting at which the person
named in such instrument proposes to vote.
42. An instrument appointing a proxy shall be in such
form as the Chairman of the meeting shall accept as
properly evidencing the wishes of the member
appointing the proxy.
11
43. The instrument appointing a proxy shall be in
writing under the hand of the appointer unless the
appointer is a corporation or other form of legal
entity other than one or more individuals holding
as joint owners in which case the instrument
appointing a proxy shall be in writing under the
hand of an individual duly authorised by such
corporation or legal entity to execute the same.
The Chairman of any meeting at which a vote is cast
by proxy so authorised may call for a notarially
certified copy of such authority which shall be
produced within 7 days of being so requested or the
vote or votes cast by such proxy shall be
disregarded.
CORPORATIONS OR 44. Any corporation or other form of corporate legal
TRUSTS ACTING BY entity which is a member of the Company may by
REPRESENTATIVES AT resolution of its directors or other governing body
MEETINGS authorise such person as it thinks fit to act as
its representative at any meeting of the members or
of any class of members of the Company, and the
person so authorised shall be entitled to exercise
the same powers on behalf of the corporation which
he represents as that corporation could exercise if
it were an individual member of the Company.
DIRECTORS 45. Subject to any subsequent amendment to change the
number of directors, the number of the directors
shall be not less than one.
46. The first directors shall be elected by the
subscriber(s) to the Memorandum. Thereafter,
additional directors may be elected either by the
members or the existing directors for such term as
the members or the directors may determine.
47. Each director holds office until his successor
takes office or until his earlier death,
resignation or removal.
48. A vacancy arising in the board of directors may be
filled either by the members or by the remaining
directors.
49. A director shall not require a share qualification,
but nevertheless shall be entitled to attend and
speak at any meeting of the members and at any
separate meeting of the holders of any class of
shares in the Company.
50. A director by writing under his hand deposited at
the Registered Office of the Company may from time
to time appoint another director or any other
person to be his alternate. Every such alternate
shall be entitled to be given notice of meetings of
the directors and to attend and vote as a director
at any such meeting at which the director
appointing him is not personally present and
generally at such meeting to have and exercise all
the powers, rights, duties and authorities of the
director appointing him. Every such alternate shall
be deemed to be an officer of the Company and shall
not be deemed to be an agent of the director
appointing him. If undue delay or difficulty would
be occasioned by giving notice to a director of a
resolution of which his approval is sought in
accordance with Regulation 75 his alternate (if
any) shall be entitled to signify approval of the
same on behalf of that director. The remuneration
of an alternate shall be payable out of the
remuneration payable to the director appointing
him, and shall consist of such portion of the last-
mentioned remuneration as shall be agreed between
such alternate and the director appointing him. A
director by writing under his hand deposited at the
Registered Office of the Company may at any time
revoke the appointment of an alternate appointed by
him. If a director shall die or cease to hold the
office of director, the appointment of his
alternate shall thereupon cease and terminate.
12
51. The directors may, by resolution, fix the
emoluments of directors in respect of services
rendered or to be rendered in any capacity to the
Company. The directors may also be paid such
travelling, hotel and other expenses properly
incurred by them in attending and returning from
meetings of the directors, or any committee of the
directors or meetings of the members, or in
connection with the business of the Company as
shall be approved by resolution of the directors.
52. Any director who, by request, goes or resides
abroad for any purposes of the Company or who
performs services which in the opinion of the Board
go beyond the ordinary duties of a director, may be
paid such extra remuneration (whether by way of
salary, commission, participation in profits or
otherwise) as shall be approved by resolution of
the directors.
53. The Company may pay to a director who at the
request of the Company holds any office (including
a directorship) in, or renders services to any
company in which the Company may be interested,
such remuneration (whether by way of salary,
commission, participation in profits or otherwise)
in respect of such office or services as shall be
approved by resolution of the directors.
54. The office of director shall be vacated if the
director:
(a) is removed from office by a resolution of
members or by a resolution of directors, or
(b) becomes bankrupt or makes any arrangement or
composition with his creditors generally, or
(c) becomes of unsound mind, or of such infirm
health as to be incapable of managing his
affairs, or
(d) resigns his office by notice in writing to the
Company.
55. (a) A director may hold any other office or
position of profit under the Company (except
that of auditor) in conjunction with his
office of director, and may act in a
professional capacity to the Company on such
terms as to remuneration and otherwise as the
directors shall arrange.
(b) A director may be or become a director or
other officer of, or otherwise interested in
any company promoted by the Company, or in
which the Company may be interested, as a
member or otherwise, and no such director
shall be accountable for any remuneration or
other benefits received by him as director or
officer or from his interest in such other
company. The directors may also exercise the
voting powers conferred by the shares in any
other company held or owned by the Company in
such manner in all respects as they think fit,
including the exercise thereof in favour of
any resolutions appointing them, or any of
their number, directors or officers of such
other company, or voting or providing for the
payment of remuneration to the directors or
officers of such other company. A director may
vote in favour of the exercise of such voting
rights in manner aforesaid, notwithstanding
that he may be, or be about to become, a
director or officer of such other company, and
as such in any other manner is, or may be,
interested in the exercise of such voting
rights in manner aforesaid.
(c) No director shall be disqualified by his
office from contracting with the Company,
either as vendor, purchaser or otherwise, nor
shall any such contract or arrangement entered
into by or on behalf of the Company in which
any director shall be in any way interested be
voided, nor shall
13
any director so contracting or being so
interested be liable to account to the Company
for any profit realised by any such contract
or arrangement, by reason of such director
holding that office or of the fiduciary
relationship thereby established. The nature
of a director's interest must be declared by
him at the meeting of the directors at which
the question of entering into the contract or
arrangement is first taken into consideration,
and if the director was not at the date of
that meeting interested in the proposed
contract or arrangement, or shall become
interested in a contract or arrangement after
it is made, he shall forthwith after becoming
so interested advise the Company in writing of
the fact and nature of his interest. A general
notice to the directors by a director that he
is a member of a specified firm or company,
and is to be regarded as interested in any
contract or transaction which may, after the
date of notice, be made with such firm or
company shall (if such director shall give the
same at a meeting of the directors, or shall
take reasonable steps to secure that the same
is brought up and read at the next meeting of
directors after it is given) be a sufficient
declaration of interest in relation to such
contract or transaction with such firm or
company. A director may be counted as one of a
quorum upon a motion in respect: of any
contract or arrangement which he shall make
with the Company, or in which he is so
interested as aforesaid, and may vote upon
such motion.
OFFICERS 56. The directors of the Company may, by a resolution
of directors, appoint officers of the Company at
such times as shall be considered necessary or
expedient, and such officers may consist of a
President, one or more Vice- Presidents, a
Secretary and a Treasurer and such other officers
as may from time to time be deemed desirable. The
officers shall perform such duties as shall be
prescribed at the time of their appointment subject
to any modification in such duties as may be
prescribed by the directors thereafter, but in the
absence of any specific allocation of duties it
shall be the responsibility of the President to
manage the day to day affairs of the Company, the
Vice-Presidents to act in order of seniority in the
absence of the President but otherwise to perform
such duties as may be delegated to them by the
President, the Secretary to maintain the registers,
minute books and records (other than financial
records) of the Company and to ensure compliance
with all procedural requirements imposed on the
Company by applicable law, and the Treasurer to be
responsible for the financial affairs of the
Company.
57. Any person may hold more than one office and no
officer need be a director or member of the
Company. The officers shall remain in office until
removed from office by the directors whether or not
a successor is appointed.
58. Any officer who is a body corporate may appoint any
person its duly authorised representative for the
purpose of representing it and of transacting any
of the business of the officers.
POWERS OF 59. The business of the Company shall be managed by the
DIRECTORS directors who may pay all expenses incurred
preliminary to and in connection with the formation
and registration of the Company, and may exercise
all such powers of the Company as are not by the
Act or by these Regulations required to be
exercised by the members subject to any delegation
of such powers as may be authorised by these
Regulations and to such requirements as may be
prescribed by resolution of the members. But no
requirement made by resolution of the members shall
prevail if it be inconsistent with these
Regulations nor shall such requirement invalidate
any prior act of the directors which would have
been valid if such requirement had not been made.
14
60. The Board of Directors may entrust to and confer
upon any director or officer any of the powers
exercisable by it, except such powers as are
exercisable under the Act by resolutions of the
directors upon such terms and conditions and with
such restrictions as it thinks fit, and either
collaterally with, or to the exclusion of, its own
powers, and may from time to time revoke, withdraw,
alter or vary all or any of such powers. The
directors may delegate any of their powers to
committees consisting of such member or members of
their body as they think fit; any committee so
formed shall in the exercise of the powers so
delegated conform to any regulation that may be
imposed on it by the directors.
61. The directors may from time to time and at any time
by power of attorney appoint any company, firm or
person or body of persons, whether nominated
directly or indirectly by the directors, to be the
attorney or attorneys 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
Regulations) and for such period and subject to
such conditions as they may think fit, and any such
powers of attorney may contain such provisions for
the protection and convenience of persons dealing
with any such attorney as the directors may think
fit and may also authorise any such attorney to
delegate all or any of the powers, authorities and
discretions vested in him.
62. Any director who is a body corporate may appoint
any person its duly authorised representative for
the purpose of representing it at Board Meetings
and of transacting any of the business of the
directors.
63. All cheques, promissory notes, drafts, bills of
exchange and other negotiable instruments and all
receipts for monies paid to the Company, shall be
signed, drawn, accepted, endorsed or otherwise
executed, as the case may be, in such manner as the
directors shall from time to time by resolution
determine.
64. The directors may exercise all the powers of the
Company to borrow money and to mortgage or charge
its undertakings, property and uncalled capital or
any part thereof, to issue debentures, debenture
stock and other securities whenever money is
borrowed or as security for any debt, liability or
obligation of the Company or of any third party.
65. The continuing directors may act notwithstanding
any vacancy in their body, save that if the number
of directors shall have been fixed at two or more
persons and by reason of vacancies having occurred
in the Board there shall be only one continuing
director he shall be authorised to act alone only
for the purpose of appointing another director.
PROCEEDINGS OF 66. The meetings of the Board of Directors and any
DIRECTORS committee thereof shall be held at such place or
places as the directors shall decide.
67. The directors may elect a Chairman of their
meetings and determine the period for which he is
to hold office; but if no such Chairman is elected,
or if at any meeting the Chairman is not present at
the time appointed for holding the same, the
directors present may choose one of their number to
be Chairman of the meeting.
68. The directors may meet together for the dispatch of
business, adjourn and otherwise regulate their
meetings as they think fit. Questions arising at
any meeting shall be decided by a majority of
votes; in case of an equality of votes the Chairman
shall have a second or casting vote. A director may
at any time summon a meeting of the directors. If
the Company shall have only one director the
provisions hereinafter contained for meetings of
the directors shall not apply but such sole
director shall have full power to represent and act
for the Company in all matters and in lieu of
minutes of a meeting shall
15
record in writing and sign a note or memorandum of
all matters requiring a resolution of the
directors. Such note or memorandum shall constitute
sufficient evidence of such resolution for all
purposes.
69. A director shall be given not less than three days
notice of a meeting of the directors.
70. Notwithstanding Regulation 69 above, a meeting of
directors held in contravention of that Regulation
shall be valid if a majority of the directors
entitled to vote at the meeting have waived the
notice of the meeting; and, for this purpose, the
presence of a director at the meeting shall be
deemed to constitute waiver on his part.
71. The inadvertent failure to give notice of a meeting
to a director, or the fact that a director has not
received the notice, does not invalidate the
meeting.
72. A meeting of directors is duly constituted for all
purposes if at the commencement of the meeting
there are present in person or by alternate not
less than one-third of the total number of
directors with a minimum of two.
73. if within half an hour from the time appointed for
the meeting a quorum is not present the meeting
shall be dissolved.
74. Any one or more members of the Board of Directors
or any committee thereof may participate in a
meeting of such Board or committee by means of a
conference telephone or similar communications
equipment allowing all persons participating in the
meeting to hear each other at the same time.
Participation by such means shall constitute
presence in person at a meeting.
75. A resolution which has been notified to all
directors and which has been approved by a majority
of the directors for the time being entitled to
receive notice of a meeting of the directors or of
a committee of the directors and taking the form of
one or more documents in writing or by facsimile,
telex, telegram, cable or other written electronic
communication shall be as valid and effectual as if
it had been passed at a meeting of the directors or
of such committee duly convened and held, without
the need for any notice.
INDEMNITY 76. Subject to the provisions of the Act and of any
other statute for the time being in force every
director or other officer of the Company shall be
entitled to be indemnified out of the assets of the
Company against all losses or liabilities which he
may sustain or incur in or about the execution of
the duties of his office or otherwise in relation
thereto, and no director or other officer shall be
liable for any loss, damage or misfortune which may
happen to, or be incurred by the Company in the
execution of the duties of his office, or in
relation thereto.
SEAL 77. The directors shall provide for the safe custody of
the common seal of the Company. The common seal
when affixed to any instrument, except as provided
in Regulation 3, shall be witnessed by a director
or any other person so authorised from time to time
by the directors. The directors may provide for a
facsimile of the common seal and approve the
signature of any director or authorised person
which may be reproduced by printing or other means
on any instrument and it shall have the same force
and validity as if the seal had been affixed to
such instrument and the same had been signed as
hereinbefore described. An imprint of the common
seal shall be kept at the Registered Office of the
Company.
DIVIDENDS AND 78. The directors may by resolution declare a dividend
RESERVES but no dividend shall be declared and paid except
out of surplus and unless the directors determine
that immediately after the payment of the
dividend:-
16
(a) the Company will be able to satisfy its
liabilities as they become due in the ordinary
course of its business; and
(b) the realisable value of the assets of the
Company will not be less than the sum of its
total liabilities, other than deferred taxes,
as shown in the books of account, and its
capital.
79. Dividends when and if declared may be paid to one
class of holder to the exclusion of the holders of
other classes, or in unequal amounts to holders of
the various classes of shares.
80. Dividends may be declared and paid in money, shares
or other property.
81. In computing the surplus for the purpose of
resolving to declare and pay a dividend, the
directors may include in their computation the net
unrealised appreciation of the assets of the
Company.
82. The directors may from time to time pay to the
members such interim dividends as appear to the
directors to be justified by the surplus of the
Company.
83. Subject to the rights of holders of shares entitled
to special rights as to dividends, all dividends
shall be declared and paid according to the par
value of the shares in issue, excluding those
shares which are held by the Company as Treasury
shares at the date of declaration of the dividend.
84. The directors may, before recommending any
dividend, set aside out of the profits of the
Company such sums as they think proper as a reserve
or reserves which shall, at the discretion of the
directors, be applicable for meeting contingencies,
or for any other purpose to which the profits of
the Company may be properly applied, and pending
such application may, at the like discretion,
either be employed in the business of the Company
or be invested in such investments as the directors
may from time to time think fit.
85. If several persons are registered as joint holders
of any share, any of them may give effectual
receipt for any dividend or other monies payable on
or in respect of the share.
86. Notice of any dividend that may have been declared
shall be given to each member in manner hereinafter
mentioned and all dividends unclaimed for three
years after having been declared may be forfeited
by the directors for the benefit of the Company.
87. No dividend shall bear interest against the
Company.
BOOKS AND 88. The Company shall keep such accounts and records as
RECORDS the directors consider necessary or desirable in
order to reflect the financial position of the
Company.
89. The Company shall keep minutes of all meetings of
directors, members, committees of directors,
committees of officers and committees of members,
and copies of all resolutions consented to by
directors, members, committees of directors,
committees of officers and committees of members.
90. The books, records and minutes required by
Regulations 88 and 89 shall be kept at the
Registered Office of the Company or at such other
place as the directors determine, and shall be open
to the inspection of the directors at all times.
17
91. The directors shall from time to time determine
whether and to what extent and at what times and
places and under what conditions or regulations the
books, records and minutes of the Company or any of
them shall be open to the inspection of members not
being directors, and no member (not being a
director) shall have any right of inspecting any
book, record, minute or document of the Company
except as conferred by Law or authorised by
resolution of the directors.
AUDIT 92. The directors may by resolution call for the
accounts of the Company to be examined by an
auditor or auditors to be appointed by them at such
remuneration as may from time to time be agreed.
93. The auditor may be a member of the Company but no
director or officer shall be eligible during his
continuance in office.
94. Every auditor of the Company shall have a right of
access at all times to the books of account and
vouchers of the Company, and shall be entitled to
require from the officers of the Company such
information and explanations as he thinks necessary
for the performance of his duties.
95. The report of the auditor shall be annexed to the
accounts upon which he reports, and the auditor
shall be entitled to receive notice of, and to
attend, any meeting at which the Company's audited
profit and loss account and balance sheet is to be
presented.
NOTICES 96. Any notice, information or written statement
required to be given to members shall be served by
mail (airmail services if available) addressed to
each member at the address shown in the share
register.
97. All notices directed to be given to the members
shall, with respect to any share to which persons
are jointly entitled, be given to whichever of such
persons is named first in the share register, and
notice so given shall be sufficient notice to all
the holders of such share.
98. Any notice, if served by post, shall be deemed to
have been served within ten days of posting, and in
proving such service it shall be sufficient to
prove that the letter containing the notice was
properly addressed and put into the Post Office.
PENSION AND 99. The directors may establish and maintain or procure
SUPERANNUATION the establishment and maintenance of any non-
FUNDS contributory or contributory pension or
superannuation funds for the benefit of, and give
or procure the giving of donations, gratuities,
pensions, allowances or emoluments to any person
who are or were at any time in the employment or
service of the Company or any company which is a
subsidiary of the Company or is allied to or
associated with the Company or with any such
subsidiary, or who are or were at any time
directors or officers of the Company or of any such
other company as aforesaid or who hold or held any
salaried employment or office in the Company or
such other company, or any persons in whose welfare
the Company or any such other company as aforesaid
is or has been at any time interested, and to the
wives, widows, families and dependents of any such
person, and may make payments for or towards the
insurance of any such persons as aforesaid, and may
do any of the matters aforesaid either alone or in
conjunction with any such other company as
aforesaid. A director holding any such employment
or office shall be entitled to participate in and
retain for his own benefit any such donation,
gratuity, pension, allowance or emolument.
18
WINDING UP 100. If the Company shall be wound up, the Liquidator
may, in accordance with a resolution of members,
divide amongst the members in specie or in kind the
whole or any part of the assets of the Company
(whether they shall consist of property of the same
kind or not) and may for such purpose set such
value as he deems fair upon any property to be
divided as aforesaid and may determine how such
division shall be carried out as between the
members or different classes of members. The
Liquidator may vest the whole or any part of such
assets in trustees upon such trusts for the benefit
of the contributories as the Liquidator shall think
fit, but so that no member shall be compelled to
accept any shares or other securities whereon there
is any liability.
ARBITRATION 101. Whenever any difference arises between the Company
on the one hand and any of the members, their
executors, administrators or assigns on the other
hand touching the true intent and construction or
the incidence or consequences of these presents or
of the Act touching anything done or executed
omitted or suffered in pursuance of the Act or
touching any breach or alleged breach or otherwise
relating to the premises or to these presents or to
any Act affecting the Company or to any of the
affairs of the Company such difference shall unless
the parties agree to refer the same to a single
arbitrator be referred to two arbitrators one to be
chosen by each of the parties to the difference and
the arbitrators shall before entering on the
reference appoint an umpire.
102. If either party to the reference makes default in
appointing an arbitrator either originally or by
way of substitution (in the event that an appointed
arbitrator shall die, be incapable of acting or
refuse to act) for ten days after the other party
has given him notice to appoint the same such other
party may appoint an arbitrator to act in the place
of the arbitrator of the defaulting party.
AMENDMENT TO 103. The Company may alter or modify the conditions
ARTICLES contained in these Regulations as originally
drafted or as amended from time to time by a
resolution of members or by a resolution of
directors.
19
WE, the undersigned Registered Agent, subscribe our name to these Articles of
Association.
================================================================================
NAME, ADDRESS AND DESCRIPTION OF SUBSCRIBER
================================================================================
EQUITY TRUST (BVI) LIMITED
Palm Grove House
P.O. Box 438
Road Town, Tortoa
British Virgin Islands
M. FEVRIER (Sgd.)
------------------------------
Registered Agent
Authorised Signatory
================================================================================
DATED 25 November 2003
WITNESS to the above signature: N. HULL (Sgd.)
-----------------------------
Road Town
Tortola
British Virgin Islands
20
IBC NO. 569163
CHINA PHARMACEUTICALS INTERNATIONAL CORPORATION
(Incorporated in the British Virgin Islands)
CERTIFIED TRUE COPY OF THE RESOLUTIONS ADOPTED BY THE DIRECTORS PURSUANT TO THE
ARTICLES OF ASSOCIATION OF CHINA PHARMACEUTICALS INTERNATIONAL COPRORATION (THE
"COMPANY") AT THE MEETING OF THE BOARD OF DIRECTORS OF THE COMPANY DULY CONVENED
AND HELD ON THE 30TH DAY OF JUNE 2004
- --------------------------------------------------------------------------------
AMENDMENT TO MEMORANDUM & ARTICLES OF ASSOCIATION OF CHINA PHARMACEUTICALS
INTERNATIONAL CORPORATION
RESOLVED That, pursuant to Clause 11 of the Company's Memorandum of
Association, Clause 7 of the Company's Memorandum of
Association be deleted in its entirety and the following be
substituted in lieu thereof:
"7. The authorized capital represented by the shares of the
Company is US$50,000.00. There shall be one class and one
series of shares made up of 500,000,000 shares of common stock
without par value."
RESOLVED That, pursuant to Clause 103 of the Company's Articles of
Association, Clause 2 of the Company's Articles of Association
be deleted in its entirety and the following be substituted in
lieu thereof:
"2. The authorized capital represented by the shares of the
Company is US$50,000.00. There shall be one class and one
series of shares made up of 500,000,000 shares of common stock
without par value."
Dated this 30th day of June, 2004.
/s/ AARON XIAOJUN ZHU
- --------------------------------
Aaron Xiaojun ZHU
Director