1
EXHIBIT 3.2
[DRAFT NO. 2 AUGUST 22, 1997]
B Y E - L A W S
of
INTELLIGENT POLYMERS LIMITED
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(i)
TABLE OF CONTENTS
Bye-Law Page
1 Interpretation 1-3
2 Share Capital and Share Rights 3-4
3 Option to Acquire Common Shares 4-13
4 Voting Rights 13
5 Issue by Board of Authorised but Unissued Common Shares 13
6 Election of Board of Directors 14-15
7 Management of the Company 15
8 Power to appoint managing director or chief executive officer 15
9 Power to appoint manager 15
10 Power to authorise specific actions 15-16
11 Power to appoint attorney 16
12 Power to delegate to a committee 16
13 Power to appoint and dismiss employees 16
14 Power to borrow and charge property 16-17
15 Exercise of power to purchase shares of, or discontinue the Company 17
16 Defects in appointment of Directors 17
17 Alternate Directors 17-18
18 Removal of Directors 18
19 Vacancies on the Board 18-19
20 Notice of meetings of the Board 19
21 Quorum at meetings of the Board 19-20
22 Meetings of the Board 20
23 Unanimous written resolutions 20
24 Contracts and disclosure of Directors' interests 20-21
25 Remuneration of Directors 18-19
26 Officers of the Company 21
27 Appointment of Officers 21
28 Remuneration of Officers 21-22
29 Duties of Officers 22
30 Chairman of meetings 22
31 Register of Directors and Officers 22
32 Obligations of Board to keep minutes 22-23
33 Indemnification of Directors and Officers of the Company 23-24
34 Waiver of claim by Member 24
35 Notice of annual general meeting 24
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(ii)
36 Notice of special general meeting 24
37 Accidental omission of notice of general meeting 25
38 Meeting called on requisition of members 25
39 Short notice 25
40 Postponement of meetings 25-26
41 Quorum for general meeting 26
42 Adjournment of meetings 26
43 Attendance at meetings 26
44 Written resolutions 27-28
45 Attendance of Directors 28
46 Voting at meetings 28
47 Voting on show of hands 28
48 Decision of chairman 28-29
49 Demand for a poll 29-30
50 Seniority of joint holders voting 30
51 Instrument of proxy 30-31
52 Representation of corporations at meetings 31
53 Variation of rights, alteration of share capital and purchase of
shares of the Company 31-32
54 Registered holder of shares 32
55 Death of a joint holder 33
56 Share certificates 33-34
57 Calls on shares 34
58 Forfeiture of Shares 35
59 Contents of Register of Members 35
60 Inspection of Register of Members 35
61 Determination of record dates 36
62 Instrument of transfer 36
63 Transfers by joint holders 36-37
64 Representative of deceased Member 37
65 Registration on death or bankruptcy 37-38
66 Declaration of dividends by Board 38
67 Other distributions 38
68 Reserve fund 38
69 Deduction of amounts due to the Company 38
70 Issue of bonus shares 38-39
71 Records of account 39
72 Financial year end 39
73 Financial statements 40
74 Appointment of Auditor 40
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(iii)
75 Remuneration of Auditor 40
76 Vacation of office of Auditor 40
77 Access to books of the Company 40-41
78 Report of the Auditor 41
79 Notices to Members of the Company 41
80 Notices to joint Members 42
81 Service and delivery of notice 42
82 The seal 42
83 Manner in which seal is to be affixed 42
84 Winding-up/distribution by liquidator 43
85 Alteration of Bye-laws 43
5
INTERPRETATION
1. Interpretation
(1) In these Bye-laws the following words and expressions shall,
where not inconsistent with the context, have the following meanings
respectively:-
(a) "Act" means the Companies Act 1981 as amended from time to
time;
(b) "Alternate Director" means an alternate Director appointed
in accordance with these Bye-laws;
(c) "Auditor" includes any individual or partnership;
(d) "Board" means the Board of Directors appointed or
elected pursuant to these Bye-laws and acting by
resolution in accordance with the Act and these
Bye-laws or the Directors present at a meeting of
Directors at which there is a quorum;
(e) "Common Director" means a director appointed pursuant to
Bye-Law 6;
(f) "Company" means the company for which these Bye-laws are
approved and confirmed;
(g) "Director" means a director of the Company and shall include
an Alternate Director;
(h) "Biovail" means Biovail Corporation International or any
successor entity thereto;
(i) "the Majority Special Shareholders" means the Holder or
Holders of a majority of the Special Shares for the time
being in issue;
(j) "Member" or "Shareholder" means the person registered in the
Register of Members as the holder of shares in the Company
and, when two or more persons are so registered as joint
holders of shares, means the person whose name stands first
in the Register of Members as one of such joint holders or
all of such persons as the context so requires;
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(k) "notice" means written notice as further defined in these
Bye-laws unless otherwise specifically stated;
(l) "Officer" means any person appointed by the Board to hold an
office in the Company and includes, without limitation, a
person duly appointed as a member of a Committee of the
Board;
(m) "Register of Directors and Officers" means the Register of
Directors and Officers referred to in these Bye-laws;
(n) "Register of Members" means the Register of Members referred
to in these Bye-laws;
(o) "Secretary" means the person appointed to perform any or all
the duties of secretary of the Company and includes any
deputy or assistant secretary;
(p) "Special Director" means a director appointed pursuant to
Bye-Law 6;
(q) "Unit" means a unit consisting of one Common Share, par
value $0.01 per share of the Company and one Warrant to
purchase one common share, no par value, of Biovail; and
(r) "Unit Offering" means an offering of the Units defined
herein.
(2) In these Bye-laws, where not inconsistent with the context:-
(a) words denoting the plural number include the singular number
and vice versa;
(b) words denoting the masculine gender include the feminine
gender;
(c) words importing persons include companies, associations or
bodies of persons whether corporate or not;
(d) the word:-
(i) "may" shall be construed as permissive;
(ii) "shall" shall be construed as imperative; and
(e) unless otherwise provided herein words or expressions
defined in the Act shall bear the same meaning in these
Bye-laws.
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(3) Expressions referring to writing or written shall, unless the
contrary intention appears, include facsimile, printing, lithography,
photography and other modes of representing words in a visible form.
(4) Headings used in these Bye-laws are for convenience only and are
not to be used or relied upon in the construction hereof.
SHARE CAPITAL AND SHARE RIGHTS
2. (a) The authorised share capital of the Company is US$
divided into Common Shares ("Common Shares") of $0.01 par value
each and 12,000 Shares of $1.00 each (the "Special Shares").
(b) The assets available for distribution to shareholders in a
winding up shall be applied as follows and in the following
order of priority:-
(i) in payment to the Holders of the Common Shares of the
amounts paid up on such shares held by them respectively;
(ii) in payment to the Holders of the Special Shares of the
amounts paid up on such shares held by them respectively;
and
(iii) in distribution to the Holders of the Common Shares (or, if
no Common Shares shall have been issued since the adoption
of these Bye-Laws, to the Holders of the Special Shares) in
proportion to the numbers of such shares held by them
respectively.
(c) Unless no Common Shares shall have been issued since the adoption
of these Bye-Laws, the Special Shares shall not confer upon the
Holders thereof
(i) (save as provided in paragraph (b) of this Bye-Law) any
right to receive any dividend or other distribution, nor
any right or interest in the profits or assets of the
Company or
(ii) (save as provided in Bye-Laws 3(9)(ii) and 6) any right to
vote at general meetings.
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OPTION TO ACQUIRE COMMON SHARES
3. (1) In this Bye-Law, the following expressions shall have the follow
meanings:-
an "Approved Opinion" a written opinion of legal advisors
to the Majority Special
Shareholders, if the Directors are
of the view that the import of such
opinion and the identity of such
legal advisors are reasonably
satisfactory;
"Available Funds" the sum of
(i) the aggregate amount of funds
received by the Company upon the
completion of the Unit Offering;
(ii) interest and all other income
earned from time to time as a
result of the temporary investment
of the funds described in clause
(i) of this definition or interest
or income thereon;
(iii) any other revenues received
by the Company from Biovail or any
other person under any agreements
between the Company, on the one
hand, and Biovail or such person,
on the other hand, whether of a
capital or income nature,
including, without limitation,
funds received by the Company
pursuant to Sections 4 and 9 of the
Development Contract;
(iv) after Regulatory Approval of
the Additional Product (as defined
in the Development Contract) in the
U.S.A. (or after the parties agree
not to pursue such approval), any
portion of the Litigation Reserve
(as defined in the Development
Contract), which was not expended
pursuant to Section 5.6 of the
Development Contract, less the sum
of
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(v) all necessary or appropriate
expenses incurred in operating the
business of the Company (other than
amounts paid under the Development
Contract), including, without
limitation, legal and
administrative expenses, amounts
paid by the Company from time to
time under the Services Agreement
dated October , 1997 among the
Company, Biovail Laboratories
Incorporated and Biovail and
reasonable reserves for present and
future obligations of the Company;
and
(vi) prior to regulatory approval
of the Additional Product, the
Litigation Reserve, and after
regulatory approval of the
Additional Product, that portion of
the Litigation Reserve that was
expended pursuant to Section 5.6 of
the Development Contract; and
(vii) an amount in respect of
working capital to be retained by
the Company as it shall determine
not in excess of US$1 million.
"Cash or Cash Equivalents" Cash or short term, highly liquid
investments that are:
(i) readily convertible to known
amounts of cash; and
(ii) so near their maturity that
they present insignificant risk of
changes in value because of changes
in interest rates but so that
generally only investments with
original maturities of three months
or less qualify under this
definition;
"Common Shareholder" A Holder for the time being of
Common Shares;
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"Designated Products" The products which the Board of the
Company, with the consent of
Biovail, may select pursuant to the
terms of the Development Contract;
"Development Contract" The development and licence
agreement dated , 1997
between the Company and Biovail
under which Biovail will use
diligent efforts to conduct
clinical development, final
product development, including
regulatory approval and
commercialisation of the Products
in accordance with the terms of
the Development
Contract;
"Directors' Notice" A notice given by the Directors
under paragraph (5) of this
Bye-Law;
"Dollars" or "$" Lawful currency of the United
States of America;
"Biovail Option" The right of Biovail to reject the
Company's exercise of the Licence
Option within 60 days of the
Company providing notice of its
exercise thereof upon payment by
Biovail, at the option of the
Company, of either (a) a one time
cash fee of US$25 million or (b)
base royalties of 10% of the net
sales price in respect of sales of
any relevant product in the United
States by Biovail or an Biovail
affiliate during the licence
period; provided however, the
Biovail Option may only be
exercised as to one product;
"Biovail Securities Common Shares of Biovail;
"the Exchange" The American Stock Exchange, Inc.
or The New York Stock Exchange or
such other major stock exchange as
shall be recognised by the Board of
Directors of the Company as an
approved stock exchange for the
purposes hereof;
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"Exercise Notice" A notice given by the Majority
Special Shareholders under
paragraph (2) of this Bye-Law;
"License Option" The Company's option to acquire a
license to sell and otherwise
market in the Unites States the
Products developed by Biovail under
the Development Contract on a
product-by-product basis and in the
case of any product for which
Biovail has manufacturing rights, a
license to manufacture;
"License Period" The longer of the expiration of any
patents covering the licensed
Product or, if there are no such
patents, for a period of ten years
from the date of the first
commercial sale of the Product;
"NASDAQ" The NASDAQ National Market System;
"Products" Shall have the meaning assigned to
that term in the Development
Contract as defined herein.
; and
"Purchase Option" The right of the Majority Special
Shareholders to purchase all, but
not less than all, of the Common
Shares of the Company outstanding
at the time such right is
exercised.
(2) The Majority Special Shareholders may at any time give an
Exercise Notice to the Company stating their intention of acquiring all of the
Common Shares for the time being in issue; such Exercise Notice may be given at
any time beginning on the closing date of the Unit Offering and ending on the
earlier of:-
(i) September 30, 2002; or
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(ii) the 90th day after the date the Company provides the
Majority Special Shareholders with quarterly financial
statements of the Company showing Cash or Cash Equivalents
of less than US$3 million (the "Financial Notice") although
Biovail may at its election extend such period by providing
additional funding for the continued development of all of
the Products (but in no event beyond September 30, 2002);
provided, however, if Biovail prior to such 90th day shall
provide written confirmation to the Company that Biovail
shall use commercially reasonable efforts, at no expense to
the Company beyond the Available Funds, to continue to
develop the Products for so long as Biovail continues to
use commercially reasonable efforts, but in no case beyond
September 30, 2002; or
(iii) On the 90th day after the Financial Notice, to the extent
Biovail has not either exercised the Purchase Option or
extended the termination date of the Purchase Option, the
Company and Biovail will commence negotiations (for a
maximum period of 60 days) as to the terms on which Biovail
might provide additional funding for any or all of the
Products, taking into account relevant issues such as the
amount and timing of such funding, possible alterations in
the Biovail Option price if the Biovail Option has not yet
been exercised or the possibility of granting Biovail a
renewed Biovail Option if the Biovail Option has been
exercised, and alterations in the royalty payment terms in
the event that Biovail does not ultimately choose to
exercise the Biovail Option. If the Company and Biovail
successfully negotiate new funding terms, the Purchase
Option can be extended but not beyond September 30, 2002.
The Exercise Notice, once given, shall not be withdrawn.
(3) The Exercise Notice shall state
(i) the consideration (expressed as an amount in cash in
Dollars to be given for each Common Share) which shall be
as follows:-
If the Common Shares are acquired Purchase Option
pursuant to the Purchase Option:- Exercise Price
-----------------------------------------------------------
Before October 1, 2000 US$ 39.06
On or after October 1, 2000 and on or US$ 48.83
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before September 30, 2001,
On or after October 1, 2001 and on
or before September 30, 2002, US$ 61.04
(ii) the form in which such consideration shall be discharged
shall be cash in Dollars save that, if Biovail Securities
or securities of a Majority Special Shareholder, if other
than Biovail, are listed on a national securities exchange
in the United States of America or admitted to unlisted
trading privileges or listed on NASDAQ, it may be wholly or
partially satisfied in Biovail Securities or the securities
of such other Majority Shareholder at the election of the
Majority Special Shareholders;
(iii) to the extent that such consideration is in the form of
Biovail Securities or the securities of such other Majority
Shareholder the amount expressed in cash in Dollars
represented thereby;
(iv) the name or names (if any) into which the Common Shares are
to be transferred; and
(v) The repurchase date.
(4) The amount of Biovail Securities or securities of such other
Majority Special Shareholder as provided in Section 3(ii) above which shall be
taken to represent a certain amount in cash in Dollars shall be calculated by
reference to the average of the closing price of the relevant Biovail Securities
or such other securities on the Exchange or such other principal exchange on
which the relevant Biovail Securities or such other securities are then traded
or, if there is no such exchange, the average of the last sales prices quoted on
NASDAQ or if the relevant Biovail Securities or such other securities are not
quoted on NASDAQ the average of the bid prices quoted on NASDAQ over the five
trading days immediately preceding the date on which the Exercise Notice is
given;
(5) Within 14 days of the giving of the Exercise Notice the Directors
shall give a Directors' Notice to each Common Shareholder setting forth the
contents of the Exercise Notice, the procedure to be followed by him for
delivery to or upon the order of Biovail the appropriate instruments of transfer
and/or certificates, or other security instruments or evidence of title to the
relevant Common Shares, the procedure to be followed for the discharge of the
consideration and the last date for delivery of the instruments and/or
certificates, or other security instruments or evidence as aforesaid (which
shall be the repurchase date as set forth in the Exercise Notice or such other
date as may be selected by the Majority Special Shareholders), and the Directors
may at their discretion supply to the Common Shareholders any appropriate
instruments of transfer for execution.
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(6) On or before such last date for delivery, the Majority Special
Shareholders shall deposit with the Company or make other appropriate
arrangements as designated by the Directors for delivering the consideration for
the Common Shares in the form of cash and/or (as the case may be) Biovail
Securities or any combination of the foregoing or appropriate instruments of
title or conferring a right to obtain title thereto in a form capable of being
passed on to the Common Shareholders and the Company shall upon or as soon as
may be after the said date pay, deliver, transfer or otherwise make available
the said consideration to the Common Shareholders.
(7) In the event of any Common Shareholder failing to deliver the
appropriate instruments of transfer and/or certificates, or other security
instruments or evidence of title as referred to in paragraph (5) of this
Bye-Law, the Company shall execute an instrument of transfer over the relevant
Common Shares and register the same and such transfer to or upon the order of
the Majority Special Shareholders and such registration shall be valid and
binding upon the Common Shareholder as if he had validly executed such transfer
(notwithstanding the death or insanity of the Common Shareholder) and the
Company shall hold the attributable part of the consideration upon trust for the
Common Shareholder subject to the Common Shareholder providing the Directors
with satisfactory evidence of title to such Common Shares but so that if at the
expiry of two years following the said last date for delivery the Common
Shareholder shall not have furnished such evidence as aforesaid the Company
shall thereupon hold such consideration upon trust for the Majority Special
Shareholders and thereafter such Common Shareholder shall have no right to
receive any consideration for and shall not otherwise have any rights with
respect to such Common Shares.
(8) The Directors shall within 45 days after the end of each calendar
quarter furnish to the Majority Special Shareholders financial statements in
relation to the Company's affairs including a balance sheet as at the end of the
relevant calendar quarter.
(9) Unless the last date on which the Exercise Notice may be given
shall have passed without the Exercise Notice having been given:-
(i) no resolution of the Company in general meeting or of
the Directors or of a Committee of the Directors nor any
act or deed on the Company's behalf shall (notwithstanding
anything to the contrary in these Bye-Laws) be effective
without the prior sanction in writing of the Majority
Special Shareholders if the result of such resolution, act
or deed would be to authorise or permit the Company to:
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(A) allot or issue any shares or other securities or any
right which confers or may confer a right to any such
allotment or issue;
(B) reduce the Company's share capital in any way;
(C) borrow money or incur any indebtedness of a kind
which would be deemed to be moneys borrowed if
immediately thereafter the aggregate amount for the
time being remaining undischarged of all moneys
borrowed as aforesaid by the Group (exclusive of
moneys borrowed by any member of the Group from and
for the time being owing to any other member thereof)
would exceed $1,000,000. For the purposes of this
Bye-Law "the Group" shall mean the Company and all
companies in which the Company beneficially owns
directly or indirectly a majority of nominal value of
the share capital for the time being in issue;
(D) sell or otherwise dispose of or lien the whole or any
part of the undertaking or assets of the Company;
(E) declare or pay a dividend or make any other
distribution to the Shareholders;
(F) amalgamate with any other body corporate; or
(G) alter or remove any part of this Bye-Law 3; and
(ii) on any resolution to wind up the Company the Special Shares
for the time being in issue shall confer on the Holders
thereof a number of votes equal to the total number of votes
conferred by the Common Shares for the time being in issue.
(10) If the consideration to be given for the Common Shares is wholly
or partly in the form of Biovail Securities as aforesaid, the Majority Special
Shareholders shall be obliged to register such Biovail Securities with the
United States Securities and Exchange Commission unless there shall be an
Approved Opinion to the effect that such registration is not necessary.
VOTING RIGHTS
4. At a general meeting of the Company every holder of Common Shares
shall, on a show of hands be entitled to one vote, and on a poll, shall be
entitled to one vote for every share held by him. Save as otherwise provided in
these Bye-Laws, the holders of Special Shares shall not be entitled to attend
or vote at a General Meeting of the Company.
ISSUE BY BOARD OF AUTHORISED BUT UNISSUED COMMON SHARES
5. Without prejudice to any special rights conferred on the holders of any
existing shares or class of shares and subject to the provisions of the
Companies Acts, the Board may in
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its discretion, at any time, and from time to time, issue or cause to be issued
all or any part of the authorised but unissued Common Shares of the Company, if
any, for consideration of such character and value as the Board shall in its
absolute discretion from time to time fix or determine.
ELECTION OF BOARD OF DIRECTORS
6. Election of Board of Directors
(1) The business of the Company shall be managed and conducted by the
Board. The number of directors shall be determined and elected at each Annual
General Meeting in accordance with the following Bye-Laws and subject to the
Companies Act and these Bye-Laws, such directors shall serve until re-elected or
their successors are appointed at the next Annual General Meeting.
(2) The Majority Special Shareholders shall be entitled at the First
General Meeting and at each Annual General Meeting of the Members thereafter to
nominate and elect one (1) director who shall be called a "Special Director".
The Majority Special Shareholders may also nominate and elect one (1) alternate
director who shall serve as Alternate to the Special Director and shall be
called the "Special Alternate Director". The Majority Special Shareholders shall
be entitled from time to time to remove any such Special Director or Special
Alternate Director and to nominate and elect another Special Director or Special
Alternate Director in their place or in place of the Special Director or Special
Alternate Director who shall for any cause vacate their office.
(3) The holders of a majority of the Common Shares of the Company
shall have the same right as the holder of the Special Shares for the nomination
and election of such number of Directors as they shall determine who shall be
known as "Common Directors". For the purposes of this Bye-Law, the Special
Shares and the Common Shares shall each be deemed to be non-voting with respect
only to the election of the directors nominated to the Board by the Majority
Special Shareholders and the holders of a majority of the Common Shares
respectively.
(4) The Special Shares and the Common Shares shall each hold a class
meeting for the purpose of electing the Special Directors and the Common
Directors, respectively, at which a quorum will be more than thirty three
percent (33%) of the Special Shares or the Common Shares, as the case may be,
represented in person or by proxy.
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7. Management of the Company
(1) In managing the business of the Company, the Board may exercise
all such powers of the Company as are not, by statute or by these Bye-laws,
required to be exercised by the Company in general meeting subject,
nevertheless, to these Bye-laws, the provisions of any statute and to such
directions as may be prescribed by the Company in general meeting.
(2) No regulation or alteration to these Bye-laws made by the Company
in general meeting shall invalidate any prior act of the Board which would have
been valid if that regulation or alteration had not been made.
(3) The Board may procure that the Company pays all expenses incurred
in promoting and incorporating the Company.
8. Power to appoint managing director or chief executive officer
The Board may from time to time appoint one or more Directors to the
office of managing director or chief executive officer of the Company who shall,
subject to the control of the Board, supervise and administer all of the general
business and affairs of the Company.
9. Power to appoint manager
The Board may appoint a person to act as manager of the Company's day
to day business and may entrust to and confer upon such manager such powers and
duties as it deems appropriate for the transaction or conduct of such business.
10. Power to authorise specific actions
The Board may from time to time and at any time authorise any company,
firm, person or body of persons to act on behalf of the Company for any specific
purpose and in connection therewith to execute any agreement, document or
instrument on behalf of the Company.
11. Power to appoint attorney
The Board may from time to time and at any time by power of attorney
appoint any company, firm, person or body of persons, whether nominated directly
or indirectly by the Board, to be an attorney of the Company for such purposes
and with such powers, authorities and discretions (not exceeding those vested in
or exercisable by the Board) and for such period and subject to such conditions
as it may think fit and any such power of attorney may contain such provisions
for the protection and convenience of persons dealing with any such attorney as
the Board may think fit and may also authorise any such attorney to sub-delegate
all or any of the powers, authorities and discretions so vested in the attorney.
Such attorney
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may, if so authorised under the seal of the Company, execute any
deed or instrument under such attorney's personal seal with the same effect as
the affixation of the seal of the Company.
12. Power to delegate to a committee
The Board may delegate any of its powers to a committee appointed by
the Board which may consist partly or entirely of non-Directors and every such
committee shall conform to such directions as the Board shall impose on them.
13. Power to appoint and dismiss employees
The Board may appoint, suspend or remove any manager, secretary, clerk,
agent or employee of the Company and may fix their remuneration and determine
their duties.
14. Power to borrow and charge property
The Board may exercise all the powers of the Company to borrow money
and to mortgage or charge its undertaking, property and uncalled capital, or any
part thereof, and may issue debentures, debenture stock and other securities
whether outright or as security for any debt, liability or obligation of the
Company or any third party.
15. Exercise of power to purchase shares of or discontinue the Company
(1) The Board may exercise all the powers of the Company to purchase
all or any part of its own shares pursuant to Section 42A of the Act.
(2) The Board may exercise all the powers of the Company to
discontinue the Company to a named country or jurisdiction outside Bermuda
pursuant to Section 132G of the Act.
16. Defects in appointment of Directors
All acts done bona fide by any meeting of the Board or by a committee
of the Board or by any person acting as a Director shall, notwithstanding that
it be afterwards discovered that there was some defect in the appointment of any
Director or person acting as aforesaid, or that they or any of them were
disqualified, be as valid as if every such person had been duly appointed and
was qualified to be a Director.
17. Alternate Directors
(1) Any general meeting of the Company may elect a person or persons
to act as a Director in the alternative to any one or more of the Directors of
the Company or may authorise
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the Board to appoint such Alternate Directors. Unless the Members otherwise
resolve, any Director may appoint a person or persons to act as a Director in
the alternative to himself or herself by notice in writing deposited with the
Secretary. Any person so appointed shall have all the rights and powers of the
Director or Directors for whom such person is appointed in the alternative
provided that such person shall not be counted more than once in determining
whether or not a quorum is present.
(1) An Alternate Director shall be entitled to receive notice of all
meetings of the Board and to attend and vote at any such meeting at which a
Director for whom such Alternate Director was appointed in the alternative is
not personally present and generally to perform at such meeting all the
functions of such Director for whom such Alternate Director was appointed.
(2) An Alternate Director shall cease to be such if the Director for
whom such Alternate Director was appointed ceases for any reason to be a
Director but may be re-appointed by the Board as alternate to the person
appointed to fill the vacancy in accordance with these Bye-laws.
18. Removal of Directors
(1) Subject to any provision to the contrary in these Bye-laws, the
Members may, at any special general meeting convened and held in accordance with
these Bye-laws, remove a Director provided that the notice of any such meeting
convened for the purpose of removing a Director shall contain a statement of the
intention so to do and be served on such Director not less than 14 days before
the meeting and at such meeting such Director shall be entitled to be heard on
the motion for such Director's removal.
(2) A vacancy on the Board created by the removal of a Director under
the provisions of subparagraph (1) of this Bye-law may be filled by the Members
at the meeting at which such Director is removed and, in the absence of such
election or appointment, the Board may fill the vacancy.
19. Vacancies on the Board
(1) The Board shall have the power from time to time and at any time
to appoint any person as a Director to fill a vacancy on the Board occurring as
the result of the death, disability, disqualification or resignation of any
Director and to appoint an Alternate Director to any Director so appointed.
(2) The Board may act notwithstanding any vacancy in its number but,
if and so long as its number is reduced below the number fixed by these Bye-laws
as the quorum necessary
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for the transaction of business at meetings of the Board, the continuing
Directors or Director may act for the purpose of (i) summoning a general meeting
of the Company or (ii) preserving the assets of the Company.
(3) The office of Director shall be vacated if the Director:-
(a) is removed from office pursuant to these Bye-laws or is
prohibited from being a Director by law;
(b) is or becomes bankrupt or makes any arrangement or
composition with his creditors generally;
(c) is or becomes of unsound mind or dies;
(d) resigns his or her office by notice in writing to the
Company.
20. Notice of meetings of the Board
(1) A Director may, and the Secretary on the requisition of a
Director shall, at any time summon a meeting of the Board.
(2) Notice of a meeting of the Board shall be deemed to be duly given
to a Director if it is given to such Director verbally in person or by telephone
or otherwise communicated or sent to such Director by post, cable, telex,
telecopier, facsimile or other mode of representing words in a legible and
non-transitory form at such Director's last known address or any other address
given by such Director to the Company for this purpose.
21. Quorum at meetings of the Board
The quorum necessary for the transaction of business at a meeting of
the Board shall be two Directors.
22. Meetings of the Board
(1) The Board may meet for the transaction of business, adjourn and
otherwise regulate its meetings as it sees fit.
(2) Directors may participate in any meeting of the Board by means of
such telephone, electronic or other communication facilities as permit all
persons participating in the meeting to communicate with each other
simultaneously and instantaneously, and participation in such a meeting shall
constitute presence in person at such meeting.
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(3) A resolution put to the vote at a meeting of the Board shall be
carried by the affirmative votes of a majority of the votes cast and in the case
of an equality of votes the resolution shall fail.
23. Unanimous written resolutions
A resolution in writing signed by all the Directors which may be in
counterparts, shall be as valid as if it had been passed at a meeting of the
Board duly called and constituted, such resolution to be effective on the date
on which the last Director signs the resolution. For the purposes of this
Bye-law only, "Director" shall not include an Alternate Director.
24. Contracts and disclosure of Directors' interests
(1) Any Director, or any Director's firm, partner or any company with
whom any Director is associated, may act in a professional capacity for the
Company and such Director or such Director's firm, partner or such company shall
be entitled to remuneration for professional services as if such Director were
not a Director, provided that nothing herein contained shall authorise a
Director or Director's firm, partner or such company to act as Auditor of the
Company.
(2) A Director who is directly or indirectly interested in a contract
or proposed contract or arrangement with the Company shall declare the nature of
such interest as required by the Act.
(3) Following a declaration being made pursuant to this Bye-law, and
unless disqualified by the chairman of the relevant Board meeting, a Director
may vote in respect of any contract or proposed contract or arrangement in which
such Director is interested and may be counted in the quorum at such meeting.
25. Remuneration of Directors
The remuneration, (if any) of the Directors shall be determined by the
Company in general meeting and shall be deemed to accrue from day to day. The
Directors may also be paid all travel, hotel and other expenses properly
incurred by them in attending and returning from meetings of the Board, any
committee appointed by the Board, general meetings of the Company, or in
connection with the business of the Company or their duties as Directors
generally.
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OFFICERS
26. Officers of the Company
The Officers of the Company shall consist of a President and a Vice
President or a Chairman and a deputy Chairman, a Secretary and such additional
Officers as the Board may from time to time determine all of whom shall be
deemed to be Officers for the purposes of these bye-laws.
27. Appointment of Officers
(1) The Board shall, as soon as possible after the statutory meeting
of Members and after each annual general meeting appoint a President and Vice
President or a Chairman and Deputy Chairman who shall be Directors.
(2) The Secretary and additional Officers, if any, shall be appointed
by the Board from time to time.
28. Remuneration of Officers
The Officers shall receive such remuneration as the Board may from
time to time determine.
29. Duties of Officers
The Officers shall have such powers and perform such duties in the
management, business and affairs of the Company as may be delegated to them by
the Board from time to time.
30. Chairman of meetings
Unless otherwise agreed by a majority of those attending and entitled
to attend and vote thereat, the Chairman, if there be one, and if not the
President shall act as chairman at all meetings of the Members and of the Board
at which such person is present. In their absence the Deputy Chairman or Vice
President, if present, shall act as chairman and in the absence of all of them
a chairman shall be appointed or elected by those present at the meeting and
entitled to vote.
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31. Register of Directors and Officers
The Board shall cause to be kept in one or more books at the
registered office of the Company a Register of Directors and Officers and shall
enter therein the particulars required by the Act.
MINUTES
32. Obligations of Board to keep minutes
(1) The Board shall cause minutes to be duly entered in books provided
for the purpose:
(a) of all elections and appointments of Officers;
(b) of the names of the Directors present at each meeting of
the Board and of any committee appointed by the Board; and
(c) of all resolutions and proceedings of general meetings of
the Members, meetings of the Board, meetings of managers
and meetings of committees appointed by the Board.
(2) Minutes prepared in accordance with the Act and these bye-laws
shall be kept by the Secretary at the registered office of the Company.
INDEMNITY
33. Indemnification of Directors and Officers of the Company
(1) The Directors, the Secretary and other Officers for the time being
being of the Company and the liquidator or trustees (if any) for the time being
acting in relation to any of the affairs of the Company and every one of them,
and their heirs, executors and administrators, shall be indemnified and secured
harmless out of the assets of the Company from and against all actions, costs,
charges, losses, damages and expenses which they or any of them, their heirs,
executors or administrators, shall or may incur or sustain by or by reason of
any act done, concurred in or omitted in or about the execution of their duty,
or supposed duty, or in their respective offices or trusts, and none of them
shall be answerable for the acts, receipts, neglects or defaults of the others
of them or for joining in any receipts for the sake of conformity, or for any
bankers or other persons with whom any moneys or effects belonging to the
Company shall or may be lodged or deposited for safe custody, or for
insufficiency or deficiency of any security upon which any moneys of or
belonging to the Company shall be placed out on or invested, or for any other
loss, misfortune or damage which may happen in
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the execution of their respective offices or trusts, or in relation thereto,
PROVIDED THAT this indemnity shall not extend to any matter in respect of any
fraud or dishonesty which may attach to any of said persons.
(2) Expenses incurred in defending a civil or criminal action, suit or
proceeding shall be paid by the Company in advance of the final disposition of
such action, suit or proceeding as authorised by the Board in the specific
case upon receipt of an undertaking by or on behalf of any Director,
Secretary, Officer, Liquidator or Trustee to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the Company
as authorised in these bye-laws or otherwise pursuant to the laws of Bermuda.
34. Waiver of claim by Member
Each Member agrees to waive any claim or right of action such Member
might have, whether individually or by or in the right of the Company, against
any Director or Officer on account of any action taken by such Director or
Officer, or the failure of such Director or Officer to take any action in the
performance of his duties with or for the Company, PROVIDED THAT such waiver
shall not extend to any matter in respect of any fraud or dishonesty which may
attach to such Director or Officer.
MEETINGS
35. Notice of annual general meeting
The annual general meeting of the Company shall be held in each year
other than the year of incorporation at such time and place as the President or
the Chairman or any two Directors or any Director and the Secretary or the
Board shall appoint. At least ten (10) days notice of such meeting shall be
given to each Member stating the date, place and time at which the meeting is
to be held, that the election of Directors will take place thereat, and as far
as practicable, the other business to be conducted at the meeting.
36. Notice of special general meeting
The President or the Chairman or any two Directors or any Director and
the Secretary or the Board may convene a special general meeting of the Company
whenever in their judgment such a meeting is necessary, upon not less than five
days' notice which shall state the date, time, place and the general nature of
the business to be considered at the meeting.
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37. Accidental omission of notice of general meeting
The accidental omission to give notice of a general meeting to, or the
non-receipt of notice of a general meeting by, any person entitled to receive
notice shall not invalidate the proceedings at that meeting.
38. Meeting called on requisition of Members
Notwithstanding anything herein, the Board shall, on the requisition
of Members holding at the date of the deposit of the requisition not less than
one-tenth of such of the paid-up share capital of the Company as at the date of
the deposit carries the right to vote at general meetings of the Company,
forthwith proceed to convene a special general meeting of the Company and the
provisions of Section 74 of the Act shall apply.
39. Short notice
A general meeting of the Company shall, notwithstanding that it is
called by shorter notice than that specified in these bye-laws, be deemed to
have been properly called if it is so agreed by (i) all the Members entitled to
attend and vote thereat in the case of an annual general meeting; and (ii) by a
majority in number of the Members having the right to attend and vote at the
meeting, being a majority together holding not less than 95% in nominal value
of the shares giving a right to attend and vote thereat in the case of a
special general meeting.
40. Postponement of meetings
The Secretary may postpone any general meeting called in accordance
with the provisions of these bye-laws (other than a meeting requisitioned under
these bye-laws) provided that notice of postponement is given to each Member
before the time for such meeting. Fresh notice of the date, time and place for
the postponed meeting shall be given to each Member in accordance with the
provisions of these bye-laws.
41. Quorum for general meeting
At any general meeting of the Company two persons present in person
and representing in person or by proxy in excess of 33% of the total issued
voting shares in the Company throughout the meeting shall form a quorum for the
transaction of business, PROVIDED that if the Company shall at any time have
only one Member, one Member present in person or by proxy shall form a quorum
for the transaction of business at any general meeting of the Company held
during such time. If within half an hour from the time appointed for the
meeting a quorum is not present, the meeting shall stand adjourned to the same
day one week later, at the same time and place or to such other day, time or
place as the Secretary may determine.
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42. Adjournment of meetings
The chairman of a general meeting may, with the consent of the Members
at any general meeting at which a quorum is present (and shall if so directed),
adjourn the meeting. Unless the meeting is adjourned to a specific date and
time, fresh notice of the date, time and place for the resumption of the
adjourned meeting shall be given to each Member in accordance with the
provisions of these bye-laws.
43. Attendance at meetings
Members may participate in any general meeting by means of such
telephone, electronic or other communication facilities as permit all persons
participating in the meeting to communicate with each other simultaneously and
instantaneously, and participation in such a meeting shall constitute presence
in person at such meeting.
44. Written resolutions
(1) Subject to subparagraph (6), anything which may be done by
resolution of the Company in general meeting or by resolution of a meeting of
any class of the Members of the Company, may, without a meeting and without
any previous notice being required, be done by resolution in writing signed by,
or, in the case of a Member that is a corporation whether or not a company
within the meaning of the Act, on behalf of, all the Members who at the date
of the resolution would be entitled to attend the meeting and vote on the
resolution.
(2) A resolution in writing may be signed by, or, in the case of a Member
that is a corporation whether or not a company within the meaning of the Act,
on behalf of, all the Members, or any class thereof, in as many counterparts as
may be necessary.
(3) For the purposes of this Bye-law, the date of the resolution is the
date when the resolution is signed by, or, in the case of a Member that is a
corporation whether or not a company within the meaning of the Act, on behalf
of, the last Member to sign and any reference in any Bye-law to the date of
passing of a resolution is, in relation to a resolution made in accordance with
this Bye-law, a reference to such date.
(4) A resolution in writing made in accordance with this Bye-law is as
valid as if it had been passed by the Company in general meeting or by a
meeting of the relevant class of Members, as the case may be, and any reference
in any Bye-law to a meeting at which a resolution is passed or to Members
voting in favour of a resolution shall be construed accordingly.
(5) A resolution in writing made in accordance with this Bye-law shall
constitute minutes for the purposes of Sections 81 and 82 of the Act.
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(6) This Bye-law shall not apply to:
(a) a resolution passed pursuant to Section 89(5) of the Act; or
(b) a resolution passed for the purpose of removing a Director
before the expiration of his term of office under these bye-laws.
45. Attendance of Directors
The Directors of the Company shall be entitled to receive notice of
and to attend and be heard at any general meeting.
46. Voting at meetings
(1) Subject to the provisions of the Act and these bye-laws, any
question proposed for the consideration of the Members at any general meeting
shall be decided by the affirmative votes of a majority of the votes cast in
accordance with the provisions of these bye-laws and in the case of an equality
of votes the resolution shall fail.
(2) No Member shall be entitled to vote at any general meeting unless
such Member has paid all the calls on all shares held by such Member.
47. Voting on show of hands
At any general meeting a resolution put to the vote of the meeting shall,
in the first instance, be voted upon by a show of hands and, subject to any
rights or restrictions for the time being lawfully attached to any class of
shares and subject to the provisions of these bye-laws, every Member present in
person and every person holding a valid proxy at such meeting shall be entitled
to one vote and shall cast such vote by raising his or her hand.
48. Decision of chairman
At any general meeting a declaration by the chairman of the meeting
that a question proposed for consideration has, on a show of hands, been
carried, or carried unanimously, or by a particular majority, or lost, and an
entry to that effect in a book containing the minutes of the proceedings of the
Company shall, subject to the provisions of these bye-laws, be conclusive
evidence of that fact.
49. Demand for a poll
(1) Notwithstanding the provisions of the immediately preceding two
bye-laws, at any general meeting of the Company, in respect of any
question proposed for the consideration
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of the Members (whether before or on the declaration of the result of a show
of hands as provided for in these bye-laws), a poll may be demanded by any of
the following persons:-
(a) the chairman of such meeting; or
(b) at least three Members present in person or represented by
proxy; or
(c) any Member or Members present in person or represented by
proxy and holding between them not less than one-tenth of the
total voting rights of all the Members having the right to vote
at such meeting; or
(d) any Member or Members present in person or represented by proxy
holding shares in the Company conferring the right to vote at
such meeting, being shares on which an aggregate sum has been
paid up equal to not less than one-tenth of the total sum paid
up on all such shares conferring such right.
(2) Where, in accordance with the provisions of subparagraph (1) of this
Bye-law, a poll is demanded, subject to any rights or restrictions for the
time being lawfully attached to any class of shares, every person present at
such meeting shall have one vote for each share of which such person is the
holder or for which such person holds a proxy and such vote shall be counted
in the manner set out in sub-paragraph (4) of this Bye-Law or in the case of
a general meeting at which one or more Members are present by telephone in
such manner as the chairman of the meeting may direct and the result of such
poll shall be deemed to be the resolution of the meeting at which the poll was
demanded and shall replace any previous resolution upon the same matter which
has been the subject of a show of hands.
(3) A poll demanded in accordance with the provisions of subparagraph (1)
of this Bye-law, for the purpose of electing a chairman or on a question of
adjournment, shall be taken forthwith and a poll demanded on any other
question shall be taken in such manner and at such time and place as the
chairman may direct and any business other than that upon which a poll has
been demanded may be proceeded with pending the taking of the poll.
(4) Where a vote is taken by poll, each person present and entitled to
vote shall be furnished with a ballot paper on which such person shall record
his or her vote in such manner as shall be determined at the meeting having
regard to the nature of the question on which the vote is taken, and each
ballot paper shall be signed or initialled or otherwise marked so as to
identify the voter and the registered holder in the case of a proxy. At the
conclusion of the poll, the ballot papers shall be examined and counted by a
committee of not less than two Members or proxy holders appointed by the
chairman for the purpose and the result of the poll shall be declared by the
chairman.
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50. Seniority of joint holders voting
In the case of joint holders the vote of the senior who tenders a
vote, whether in person or by proxy, shall be accepted to the exclusion of the
votes of the other joint holders, and for this purpose seniority shall be
determined by the order in which the names stand in the Register of Members.
51. Instrument of proxy
The instrument appointing a proxy shall be in writing under the hand
of the appointor or of the appointor's attorney duly authorised in writing, or
if the appointor is a corporation, either under its seal, or under the hand of
a duly authorised officer or attorney. The decision of the chairman of any
general meeting as to the validity of any instrument of proxy shall be final.
52. Representation of corporations at meetings
A corporation which is a Member may, by written instrument, authorise
such person as it thinks fit to act as its representative at any meeting of the
Members and the person so authorised shall be entitled to exercise the same
powers on behalf of the corporation which such person represents as that
corporation could exercise if it were an individual Member. Notwithstanding the
foregoing, the chairman of the meeting may accept such assurances as he or she
thinks fit as to the right of any person to attend and vote at general meetings
on behalf of a corporation which is a Member.
53. Variation of rights, alteration of share capital and purchase of shares of
the Company
(1) Subject to the provisions of Sections 42 and 43 of the Act any
preference shares may be issued or converted into shares that, at a
determinable date or at the option of the Company, are liable to be redeemed on
such terms and in such manner as the Company before the issue or conversion may
by resolution of the Members determine.
(2) If at any time 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
three-fourths of the issued shares of that class or with the sanction of a
resolution passed by a majority of the votes cast at a separate general meeting
of the holders of the shares of the class in accordance with Section 47 (7) of
the Act. 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.
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(3) The Company may from time to time by resolution of the Members
change the currency denomination of, increase, alter or reduce its share
capital in accordance with the provisions of Sections 45 and 46 of the Act.
Where, on any alteration of share capital, fractions of shares or some other
difficulty would arise, the Board may deal with or resolve the same in such
manner as it thinks fit including, without limiting the generality of the
foregoing, the issue to Members, as appropriate, of fractions of shares and/or
arranging for the sale or transfer of the fractions of shares of Members.
(4) The Company may from time to time purchase its own shares in
accordance with the provisions of Section 42A of the Act.
54. Registered holder of shares
(1) The Company shall be entitled to treat the registered holder of
any share as the absolute owner thereof and accordingly shall not be bound to
recognise any equitable or other claim to, or interest in, such share on the
part of any other person.
(2) Any dividend, interest or other moneys payable in cash in respect
of shares may be paid by cheque or draft sent through the post directed to the
Member at such Member's address in the Register of Members or, in the case of
joint holders, to such address of the holder first named in the Register of
Members, or to such person and to such address as the holder or joint holders
may in writing direct. If two or more persons are registered as joint holders
of any shares any one can give an effectual receipt for any dividend paid in
respect of such shares.
55. Death of a joint holder
Where two or more persons are registered as joint holders of a share or
shares then in the event of the death of any joint holder or holders the
remaining joint holder or holders shall be absolutely entitled to the said
share or shares and the Company shall recognise no claim in respect of the
estate of any joint holder except in the case of the last survivor of such
joint holders.
56. Share certificates
(1) Every Member shall be entitled to a certificate under the seal of
the Company (or a facsimile thereof) specifying the number and, where
appropriate, the class of shares held by such Member and whether the same are
fully paid up and, if not, how much has been paid thereon. The Board may by
resolution determine, either generally or in a particular case, that any or all
signatures on certificates may be printed thereon or affixed by mechanical
means.
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(2) Each certificate issued in respect of the Common Shares shall bear
the following legend endorsed thereon:-
"The securities of Intelligent Polymers Limited, a Bermuda company
("Intelligent Polymers") evidenced hereby are subject to an option of the
holder or holders of a majority of the Special Shares of Intelligent Polymers,
as described in the bye-laws of Intelligent Polymers, to purchase such
securities at an agreed upon price, exercisable by notice at any time beginning
on the closing date of the Unit Offering and ending on the earlier of (i)
September 30, 2002 and (ii) the 90th day after the date that Intelligent
Polymers provides such holder or holders with quarterly financial statements of
Intelligent Polymers showing cash or cash equivalents of less than US$4
million. Copies of the bye-laws of Intelligent Polymers are available at the
registered office of Intelligent Polymers at Clarendon House, 2 Church Street,
Hamilton, Bermuda, and will be furnished to any shareholder of Intelligent
Polymers on request and without cost.
Until October , 1999 or such earlier date as the Purchase Option is
exercised or expires unexercised (the "Separation Date"), the shares
represented by this Certificate may be traded, exchanged or otherwise
transferred only together with the Warrant of Biovail Corporation International
issued herewith. The holder hereof may, but need not, submit this Certificate
for the removal of this legend after the Separation Date."
(3) The Company shall be under no obligation to complete and deliver a
share certificate unless specifically called upon to do so by the person to
whom such shares have been allotted.
(4) If any such certificate shall be proved to the satisfaction of the
Board to have been worn out, lost, mislaid or destroyed the Board may cause a
new certificate to be issued and request an indemnity for the lost certificate
if it sees fit.
57. Calls on shares
(1) The Board may from time to time make such calls as it thinks fit
upon the Members in respect of any monies unpaid on the shares allotted to or
held by such Members and, if a call is not paid on or before the day appointed
for payment thereof, the Member may at the discretion of the Board be liable to
pay the Company interest on the amount of such call at such rate as the Board
may determine, from the date when such call was payable up to the actual date
of payment. The joint holders of a share shall be jointly and severally liable
to pay all calls in respect thereof.
(2) The Board may, on the issue of shares, differentiate between the
holders as to the amount of calls to be paid and the times of payment of such
calls.
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58. Forfeiture of shares
(1) If any Member fails to pay, on the day appointed for payment
thereof, any call in respect of any share allotted to or held by such Member,
the Board may, at any time thereafter during such time as the call remains
unpaid, direct the Secretary to forward to such Member a notice of forfeiture
for non-payment of call..
(2) If the requirements of such notice are not complied with, any such
share may at any time thereafter before the payment of such call and the
interest due in respect thereof be forfeited by a resolution of the Board to
that effect, and such share shall thereupon become the property of the Company
and may be disposed of as the Board shall determine.
(3) A Member whose share or shares have been forfeited as aforesaid
shall, notwithstanding such forfeiture, be liable to pay to the Company all
calls owing on such share or shares at the time of the forfeiture and all
interest due thereon.
REGISTER OF MEMBERS
59. Contents of Register of Members
The Board shall cause to be kept in one or more books a Register of
Members and shall enter therein the particulars required by the Act.
60. Inspection of Register of Members
The Register of Members shall be open to inspection at the registered
office of the Company on every business day, subject to such reasonable
restrictions as the Board may impose, so that not less than two hours in each
business day be allowed for inspection. The Register of Members may, after
notice has been given by advertisement in an appointed newspaper to that
effect, be closed for any time or times not exceeding in the whole thirty days
in each year.
61. Determination of record dates
Notwithstanding any other provision of these bye-laws, the Board may fix
any date as the record date for:
(a) determining the Members entitled to receive any dividend; and
(b) determining the Members entitled to receive notice of and to
vote at any general meeting of the Company.
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TRANSFER OF SHARES
62. Instrument of transfer
(1) An instrument of transfer shall be in the usual common form or in
such other form as the Board may accept. Such instrument of transfer shall be
signed by or on behalf of the transferor and transferee provided that, in the
case of a fully paid share, the Board and/or the Company's duly appointed
Registrar and Transfer Agent may accept the instrument signed by or on behalf
of the transferor alone. The transferor shall be deemed to remain the holder of
such share until the same has been transferred to the transferee in the
Register of Members.
(2) The Board and/or the Company's duly appointed Registrar and
Transfer Agent may refuse to recognise any instrument of transfer unless it is
accompanied by the certificate in respect of the shares to which it relates and
by such other evidence as the Board may reasonably require to show the right of
the transferor to make the transfer.
63. Transfers by joint holders
The joint holders of any share or shares may transfer such share or
shares to one or more of such joint holders, and the surviving holder or
holders of any share or shares previously held by them jointly with a deceased
Member may transfer any such share to the executors or administrators of such
deceased Member.
TRANSMISSION OF SHARES
64. Representative of deceased Member
In the case of the death of a Member, the survivor or survivors where
the deceased Member was a joint holder, and the legal personal representatives
of the deceased Member where the deceased Member was a sole holder, shall be
the only persons recognised by the Company as having any title to the deceased
Member's interest in the shares. Nothing herein contained shall release the
estate of a deceased joint holder from any liability in respect of any share
which had been jointly held by such deceased Member with other persons. Subject
to the provisions of Section 52 of the Act, for the purpose of this Bye-law,
legal personal representative means the executor or administrator of a deceased
Member or such other person as the Board may in its absolute discretion decide
as being properly authorised to deal with the shares of a deceased Member.
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65. Registration on death or bankruptcy
Any person becoming entitled to a share in consequence of the death or
bankruptcy of any Member may be registered as a Member upon such evidence as
the Board may deem sufficient or may elect to nominate some person to be
registered as a transferee of such share, and in such case the person becoming
entitled shall execute in favour of such nominee an instrument of transfer in
the usual common form. On the presentation thereof to the Board, accompanied by
such evidence as the Board may require to prove the title of the transferor,
the transferee shall be registered as a Member but the Board shall, in either
case, have the same right to decline or suspend registration as it would have
had in the case of a transfer of the share by that Member before such Member's
death or bankruptcy, as the case may be.
DIVIDENDS AND OTHER DISTRIBUTIONS
66. Declaration of dividends by the Board
The Board may, subject to these bye-laws and in accordance with Section
54 of the Act, declare a dividend to be paid to the Members, in proportion to
the number of shares held by them, and such dividend may be paid in cash or
wholly or partly in specie in which case the Board may fix the value for
distribution in specie of any assets.
67. Other distributions
The Board may declare and make such other distributions (in cash or in
specie) to the Members as may be lawfully made out of the assets of the
Company.
68. Reserve fund
The Board may from time to time before declaring a dividend set aside,
out of the surplus or profits of the Company, such sum as it thinks proper as a
reserve fund to be used to meet contingencies or for equalising dividends or
for any other special purpose.
69. Deduction of Amounts due to the Company
The Board may deduct from the dividends or distributions payable to
any Member all monies due from such Member to the Company on account of calls
or otherwise.
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CAPITALISATION
70. Issue of bonus shares
(1) The Board may resolve to capitalise any part of the amount for the
time being standing to the credit of any of the Company's share premium or
other reserve accounts or to the credit of the profit and loss account or
otherwise available for distribution by applying such sum in paying up unissued
shares to be allotted as fully paid bonus shares pro rata to the Members.
(2) The Company may capitalise any sum standing to the credit of a
reserve account or sums otherwise available for dividend or distribution by
applying such amounts in paying up in full partly paid shares of those Members
who would have been entitled to such sums if they were distributed by way of
dividend or distribution.
ACCOUNTS AND FINANCIAL STATEMENTS
71. Records of account
The Board shall cause to be kept proper records of account with
respect to all transactions of the Company and in particular with respect to:-
(a) all sums of money received and expended by the Company and the
matters in respect of which the receipt and expenditure relates;
(b) all sales and purchases of goods by the Company; and
(c) the assets and liabilities of the Company.
Such records of account shall be kept at the registered office of the Company
or, subject to Section 83 (2) of the Act, at such other place as the Board
thinks fit and shall be available for inspection by the Directors during normal
business hours.
72. Financial year end
The financial year end of the Company may be determined by resolution
of the Board and failing such resolution shall be 31st December in each year.
73. Financial statements
Subject to any rights to waive laying of accounts pursuant to Section
88 of the Act, financial statements as required by the Act shall be laid before
the Members in general meeting.
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AUDIT
74. Appointment of Auditor
Subject to Section 88 of the Act, at the annual general meeting or at
a subsequent special general meeting in each year, an independent
representative of the Members shall be appointed by them as Auditor of the
accounts of the Company. Such Auditor may be a Member but no Director, Officer
or employee of the Company shall, during his or her continuance in office, be
eligible to act as an Auditor of the Company.
75. Remuneration of Auditor
The remuneration of the Auditor shall be fixed by the Company in
general meeting or in such manner as the Members may determine.
76. Vacation of office of Auditor
If the office of Auditor becomes vacant by the resignation or death of
the Auditor, or by the Auditor becoming incapable of acting by reason of
illness or other disability at a time when the Auditor's services are required,
the Board shall, as soon as practicable, convene a special general meeting to
fill the vacancy thereby created.
77. Access to books of the Company
The Auditor shall at all reasonable times have access to all books
kept by the Company and to all accounts and vouchers relating thereto, and the
Auditor may call on the Directors or Officers of the Company for any
information in their possession relating to the books or affairs of the
Company.
78. Report of the Auditor
(1) Subject to any rights to waive laying of accounts or appointment
of an Auditor pursuant to Section 88 of the Act, the accounts of the Company
shall be audited at least once in every year.
(2) The financial statements provided for by these bye-laws shall be
audited by the Auditor in accordance with generally accepted auditing
standards. The Auditor shall make a written report thereon in accordance with
generally accepted auditing standards and the report of the Auditor shall be
submitted to the Members in general meeting.
(3) The generally accepted auditing standards referred to in
subparagraph (2) of this Bye-law may be those of a country or jurisdiction
other than Bermuda. If so, the financial
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statements and the report of the Auditor must disclose this fact and name
such country or jurisdiction.
NOTICES
79. Notices to Members of the Company
A notice may be given by the Company to any Member either by
delivering it to such Member in person or by sending it to such Member's
address in the Register of Members or to such other address given for the
purpose. For the purposes of this Bye-law, a notice may be sent by mail,
courier service, cable, telex, telecopier, facsimile or other mode of
representing words in a legible and non-transitory form.
80. Notices to joint Members
Any notice required to be given to a Member shall, with respect to any
shares held jointly by two or more persons, be given to whichever of such
persons is named first in the Register of Members and notice so given shall be
sufficient notice to all the holders of such shares.
81. Service and delivery of notice
Any notice shall be deemed to have been served at the time when the
same would be delivered in the ordinary course of transmission and, in proving
such service, it shall be sufficient to prove that the notice was properly
addressed and prepaid, if posted, and the time when it was posted, delivered to
the courier or to the cable company or transmitted by telex, facsimile or other
method as the case may be.
SEAL OF THE COMPANY
82. The seal
The seal of the Company shall be in such form as the Board may from
time to time determine. The Board may adopt one or more duplicate seals for use
outside Bermuda.
83. Manner in which seal is to be affixed
The seal of the Company shall not be affixed to any instrument except
attested by the signature of a Director and the Secretary or any two Directors,
or some other person appointed by the Board for the purpose, provided that any
Director, or Officer, may affix the seal of the Company attested by such
Director or Officer's signature only to any authenticated copies of
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these Bye-laws, the incorporating documents of the Company, the minutes of any
meetings or any other documents required to be authenticated by such Director
or Officer.
WINDING-UP
84. Winding-up/distribution by liquidator
If the Company shall be wound up the liquidator may, with the sanction
of a resolution of the 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 or she 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, with the like sanction, vest
the whole or any part of such assets in trustees upon such trusts for the
benefit of the Members as the liquidator shall think fit, but so that no Member
shall be compelled to accept any shares or other securities or assets whereon
there is any liability.
ALTERATION OF BYE-LAWS
85. Alteration of Bye-laws
Subject to the provisions of Bye-law 3 hereof, no Bye-law shall be
rescinded, altered or amended and no new Bye-law shall be made until the same
has been approved by a resolution of the Board and by a resolution of the
Members.