TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE BVI BUSINESS COMPANIES ACT, 2004
ARTICLES OF ASSOCIATION
OF
TONGXIN INTERNATIONAL LTD.
INTERPRETATION
References in these Articles of Association ("ARTICLES") to the Act shall mean
the BVI Business Companies Act, 2004. The following Articles 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 the neuter and references to persons shall
include corporations and all legal entities capable of having a legal existence.
SHARES
1 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 a director 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 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.
2 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 a certificate.
SHARES AND VARIATION OF RIGHTS
3 Subject to the provisions of these Articles, the unissued shares of the
Company (whether forming part of the original or any increased authorised
shares) shall be at the disposal of the directors who may 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
directors may determine.
4 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 or
otherwise as the directors may from time to time determine.
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5 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 be
liable to be redeemed on such terms and in such manner as the directors
before or at the time of the issue of such shares may determine. At any
time after the consummation of a Business Combination (as defined in these
Articles), the directors may issue options, warrants or convertible
securities or securities of similar nature conferring the right upon the
holders thereof to subscribe for, purchase or receive any class of shares
or securities in the Company on such terms as it may from time to time
determine. Notwithstanding the foregoing, the directors may issue options,
warrants or convertible securities in connection with the Company's
initial public offering.
6 The directors may redeem any share issued by the Company at a premium.
7 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 the holders of not less than three-fourths of the issued
shares of any other class of shares which may be affected by such
variation.
8 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. Except as otherwise expressly provided in the resolution or
resolutions providing for the establishment of any class or series of
preferred shares, no vote of the holders of preferred shares or of the
holders of ordinary shares shall be a prerequisite to the issuance of any
shares of any class or series of the preferred shares authorized by and
complying with the conditions in the Memorandum or these Articles.
9 Except as required by the Act, no person shall be recognised by the
Company as holding any share upon any trust, and the Company shall not be
bound by or be compelled in any way to recognise (even when having notice
thereof) any equitable, contingent, future or partial interest in any
share or any interest in any fractional part of a share or (except as
provided by these Articles or by the Act) any other rights in respect of
any share except any absolute right to the entirety thereof by the
registered holder.
TRANSFER OF SHARES
10 Shares in the Company shall be transferred by a written instrument of
transfer signed by the transferor and containing the name and address of
the transferee. The instrument of transfer shall also be signed by the
transferee if registration as a holder of the shares imposes a liability
to the Company on the transferee. The instrument of transfer of a
registered share shall be sent to the Company for registration.
11 Subject to the Memorandum of Association, these Articles and to Section
54(5) of the Act, the Company shall, on receipt of an instrument of
transfer, enter the name of the
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transferee of the share in the register of members unless the directors
resolve to refuse or delay the registration of the transfer for reasons
that shall be specified in the resolution.
TRANSMISSION OF SHARES
12 Subject to Sections 52(2) and 53 of the Act, the executor or administrator
of a deceased member, the guardian of an incompetent member or the trustee
of a bankrupt member shall be the only person recognised by the Company as
having any title to his share, save that and only in the event of death,
incompetence or bankruptcy of any member or members of the Company as a
consequence of which the Company no longer has any directors or members,
then upon the production of any documentation which is reasonable evidence
of the applicant being entitled to:
(a) a grant of probate of the deceased's will, or grant of letters of
administration of the deceased's estate, or confirmation of the
appointment as executor or administrator (as the case may be), of a
deceased member's estate; or
(b) the appointment of a guardian of an incompetent member; or
(c) the appointment as trustee of a bankrupt member; or
(d) upon production of any other reasonable evidence of the applicant's
beneficial ownership of, or entitlement to the shares,
to the Company's registered agent in the British Virgin Islands together
with (if so requested by the registered agent) a notarised copy of the
share certificate(s) of the deceased, incompetent or bankrupt member, an
indemnity in favour of the registered agent and appropriate legal advice
in respect of any document issued by a foreign court, then the
administrator, executor, guardian or trustee in bankruptcy (as the case
may be) notwithstanding that their name has not been entered in the share
register of the Company, may by written resolution of the applicant,
endorsed with written approval by the registered agent, be appointed a
director of the Company or entered in the share register as the legal and
or beneficial owner of the shares.
13 The production to the Company of any document which is reasonable evidence
of:
(a) a grant of probate of the will, or grant of letters of
administration of the estate, or confirmation of the appointment as
executor, of a deceased member; or
(b) the appointment of a guardian of an incompetent member; or
(c) the trustee of a bankrupt member; or
(d) the applicant's legal and or beneficial ownership of the shares,
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shall be accepted by the Company even if the deceased, incompetent member
or bankrupt member is domiciled outside the British Virgin Islands if the
document is issued by a foreign court which had competent jurisdiction in
the matter. For the purposes of establishing whether or not a foreign
court had competent jurisdiction in such a matter the directors may obtain
appropriate legal advice. The directors may also require an indemnity to
be given by the executor, administrator, guardian or trustee in
bankruptcy.
14 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 shall for all purposes be deemed to be
a transfer of shares of the deceased, incompetent or bankrupt member and
the directors shall treat it as such.
15 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 the transferee of such share or shares and such request
shall likewise be treated as if it were a transfer.
16 What amounts to incompetence on the part of a person is a matter to be
determined by the court having regard to all the relevant evidence and the
circumstances of the case.
ACQUISITION OF OWN SHARES
17 Subject to the provisions of Article 98 and subject to the provisions of
the Act in this 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.
MEETINGS OF MEMBERS
18 The directors may convene meetings of the 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 entitled to exercise at least thirty (30) percent of the voting
rights in respect of the matter for which the meeting is requested.
Meetings of members shall take place at least annually (the "ANNUAL
MEETING").
19 Seven (7) days notice at the least specifying the place, the day and the
hour of the meeting and general nature of the business to be conducted
shall be given in the 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.
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20 Notwithstanding Article 20, a meeting of members held in contravention of
the requirement to give notice is valid if members holding a ninety (90)
percent majority of:
(a) the total voting rights on all the matters to be considered at the
meeting; or
(b) the votes of each class or series of shares where members are
entitled to vote thereon as a class or series together with an
absolute majority of the remaining votes,
have waived notice of the meeting and, for this purpose, the presence of a
member at the meeting shall be deemed to constitute waiver on his part.
21 The inadvertent failure of the directors to give notice of a meeting to a
member or the fact that a member has not received the notice, shall not
invalidate the meeting.
PROCEEDINGS AT MEETINGS OF MEMBERS
22 No business shall be transacted at any meeting unless a quorum of members
is present at the time when the meeting proceeds to business. A quorum
shall consist of the holder or holders present in person or by proxy
entitled to exercise at least fifty (50) percent of the voting rights 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.
23 If, within half an hour from the time appointed for the meeting, a quorum
is not present, the meeting shall be dissolved.
24 At every meeting the members present shall choose someone of their number
to be the chairman (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 member present at the meeting or failing any
member personally attending the meeting, the proxy present at the meeting
representing the oldest member of the Company, shall take the chair.
25 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.
26 At any meeting a resolution put to the vote of the meeting shall be
decided on a show of hands by a 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
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(b) by any member present in person or by proxy and holding not less
than one tenth of the total voting shares issued by the Company and
having the right to vote at the meeting.
27 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.
28 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.
29 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 MEMBERS
30 At any meeting of members whether on a show of 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.
31 Subject to the Memorandum of Association or these Articles, an action that
may be taken by members of the Company at a meeting of members may also be
taken by a resolution of members consented to in writing or by telex,
telegram, cable or other written electronic communication, without the
need for any notice.
32 If a committee is appointed for any member who is of unsound mind, that
member may vote by such committee.
33 If two or more persons are jointly entitled to a registered share or
shares and if more than one of such persons shall vote in person or by
proxy at any meeting of members or in accordance with the terms of Article
31, the vote of that person whose name appears first among such voting
joint holders in the share register shall alone be counted.
34 Votes may be given either personally or by proxy.
35 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.
36 Subject to Article 38 below, 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.
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37 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 owner 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 seven days of being so requested
failing which the vote or votes cast by such proxy shall be disregarded.
CORPORATIONS ACTING BY REPRESENTATIVES AT MEETINGS
38 Any corporation or other form of corporate legal entity which is a member
of the Company may by resolution of its directors or other governing body
authorise such person as it thinks fit to act as its representative at any
meeting of the members or 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
39 Subject to any subsequent amendment to change the number of directors, the
number of the directors shall be not less than one or more than fifteen.
Subject to the provisions of Article 98, the Board of Directors shall be
divided into three classes: Class A, Class B and Class C. The number of
directors in each class shall be as nearly equal as possible.
40 The first director or directors shall be appointed by the registered agent
of the Company. At the first appointment of directors by the incorporator,
the incorporator shall elect a Class C director for a term expiring at the
Company's third Annual Meeting of Stockholders. The Class C director shall
then appoint additional Class A, Class B and Class C directors, as
necessary. The directors in Class A shall be elected for a term expiring
at the first Annual Meeting of Members, the directors in Class B shall be
elected for a term expiring at the second Annual Meeting of Members and
the directors in Class C shall be elected for a term expiring at the third
Annual Meeting of Members. Commencing at the first Annual Meeting of
Members, and at each annual meeting thereafter, directors elected to
succeed those directors whose terms expire shall be elected for a term of
office to expire at the third succeeding annual meeting of members after
their election. Except as the Act may otherwise require, in the interim
between annual meetings of members or special meetings of members called
for the election of directors and/or the removal of one or more directors
and the filling of any vacancy in that connection, newly created
directorships and any vacancies in the Board of Directors, including
unfilled vacancies resulting from the removal of directors for cause, may
be filled by the vote of a majority of the remaining directors then in
office, although less than a quorum, or by the sole remaining director.
All directors shall hold office until the expiration of their respective
terms of office and until their successors shall have been elected and
qualified. A director elected to fill a vacancy resulting from the death,
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resignation or removal of a director shall serve for the remainder of the
full term of the director whose death, resignation or removal shall have
created such vacancy and until his successor shall have been elected and
qualified.
41 Notwithstanding the provisions of Section 114 of the Act, each director
holds office until his successor takes office or until his earlier death,
resignation or removal by the members as per Article 40 or a resolution
passed by the majority of the remaining directors.
42 Except as the Act may otherwise require, in the interim between annual
meetings of members or special meetings of members called for the election
of directors and/or the removal of one or more directors and the filling
of any vacancy in that connection, newly created directorships and any
vacancies in the Board of Directors, including unfilled vacancies
resulting from the removal of directors for cause, may be filled by the
vote of a majority of the remaining directors then in office, although
less than a quorum (as defined in these Articles), or by the sole
remaining director.
43 A director elected to fill a vacancy resulting from the death, resignation
or removal of a director shall serve for the remainder of the full term of
the director whose death, resignation or removal shall have created such
vacancy and until his successor shall have been elected and qualified
44 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.
45 A director, by writing under his hand deposited at the registered office
of the Company, may from time to time appoint another director or another
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 Article 70 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.
46 The directors may, by resolution, fix the emolument of directors in
respect of services rendered or to be rendered in any capacity to the
Company. The directors may also be
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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.
47 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.
48 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.
49 The office of director shall be vacated if the director:
(a) is removed from office by resolution of members; or
(b) is removed from office by resolution of the directors of the
Company; or
(c) becomes disqualified to act as a director under Section 111 of the
Act.
50 (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 officer of, or otherwise
be 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 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 the 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 the
manner aforesaid.
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(c) No director shall be disqualified by his office from contracting
with the Company either as a 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 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 by reason of the fiduciary
relationship thereby established, provided the procedure in Article
50 (d) below is followed.
(d) A director of the Company shall, immediately after becoming aware of
the fact that he is interested in a transaction entered into or to
be entered into by the Company, disclose such interest to the board
of directors.
(e) A director of the Company is not required to comply with Article
50(d) above if:
(i) the transaction or proposed transaction is between the
director and the Company; and
(ii) the transaction or proposed transaction is or is to be entered
into in the ordinary course of the Company's business and on
usual terms and conditions.
(f) For the purposes of Article 50(d) above, a disclosure to the board
to the effect that a director is a member, director, officer or
trustee of another named company or other person and is to be
regarded as interested in any transaction which may, after the date
of the entry or disclosure, be entered into with that company or
person, is a sufficient disclosure of interest in relation to that
transaction.
(g) Subject to Section 125(1) of the Act, the failure by a director to
comply with Article 50(d) does not affect the validity of a
transaction entered into by the director or the Company.
OFFICERS
51 The directors of the Company may, by 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/or 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 modifications 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
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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.
52 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.
53 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 DIRECTORS
54 The business of the Company shall be managed by the 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 necessary for managing and for directing and supervising, the
business and affairs of the Company as are not by the Act or by these
Articles required to be exercised by the members subject to any delegation
of such powers as may be authorised by these Articles and permitted by the
Act 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 Articles nor shall such
requirement invalidate any prior act of the directors which would have
been valid if such requirement had not been made.
55 The board of directors may entrust to and confer upon any director or
officer any of the powers exercisable by it 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. Subject to the
provisions of Section 110 of the Act, the directors may delegate any of
their powers to committees consisting of such member or members of their
body as they think fit. Any committees so formed shall in the exercise of
powers so delegated conform to any regulations that may be imposed on it
by the directors or the provisions of the Act.
56 The directors may from time to time by power of attorney appoint any
company, firm or person or body of persons 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 Articles) and for such period and subject to such conditions
as the directors think fit.
57 Any director who is a body corporate may appoint any person its duly
authorised representative for the purpose of representing it at meetings
of the directors and of transacting any of the business of the directors.
58 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,
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endorsed or otherwise executed as the case may be, in such manner as the
directors shall from time to time by resolution determine.
59 The directors may:
59.1 exercise all the powers of the Company to borrow money and to mortgage or
charge its undertakings and property, 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; and
59.2 where the Company is a wholly-owned subsidiary, the directors may in
exercising their powers or performing their duties, act in a manner which
the directors believe is in the best interests of the Company's holding
company even though it may not be in the best interests of the Company.
60 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 of
directors there shall be only one continuing director, he shall be
authorised to act alone only for the purpose of appointing another
director.
PROCEEDINGS OF DIRECTORS
61 The meetings of the board of directors and any committee thereof shall be
held at such place or places as the directors shall decide.
62 The directors may elect a chairman (the "CHAIRMAN OF THE BOARD OF
DIRECTORS") of their meeting and determine the period for which he is to
hold office. If no such Chairman of the Board of Directors is elected, or
if at any meeting the Chairman of the Board of Directors is not present at
the time appointed for holding the meeting, the directors present may
choose one of their number to be Chairman of the Board of Directors for
the meeting. If the directors are unable to choose a Chairman of the Board
of Directors, for any reason, then the oldest director present at the
meeting shall preside as the Chairman of the Board of Directors.
63 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 in 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 record in writing and sign a note of
memorandum of all matters requiring a resolution of the directors. Such
note or memorandum shall constitute sufficient evidence of such resolution
for all purposes.
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64 A director shall be given not less than three (3) days notice of a meeting
of the directors.
65 Notwithstanding Article 64, a meeting of directors held in contravention
of Article 64 is 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.
66 The inadvertent failure to give notice of a meeting to a director, or the
fact that a director has not received the notice shall not invalidate the
meeting.
67 A meeting of the 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 (2), or in the case of only one director a minimum of one (1).
68 If within half an hour from the time appointed for the meeting a quorum is
not present, the meeting shall be dissolved.
69 Any one or more members of the board of directors or any committee thereof
may participate in a meeting of such board of directors 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. Participating by such means shall constitute presence in
person at a meeting.
70 A resolution 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 telefax or other written or 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
71 Subject to the provisions of the Act, the Company may indemnify against
all expenses, including legal fees, and against all judgments, fines and
amounts paid in settlement and reasonably incurred in connection with
legal, administrative or investigative proceedings any person who:
(a) is or was a party or is threatened to be made a party to any
threatened, pending or completed proceedings, whether civil,
criminal, administrative or investigative, by reason of the fact
that the person is or was a director of the Company; or
(b) is or was, at the request of the Company, serving as a director of,
or in any other capacity is or was acting for, another company or a
partnership, joint venture, trust or other enterprise.
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SEAL
72 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 Article 2, shall be witnessed by a director or officer of the Company
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 common seal has been affixed to such instrument and
the same had been signed as hereinbefore described.
DISTRIBUTIONS
73 Subject to the provisions of the Act, the directors of a Company may, by
resolution, authorise a distribution by the Company at a time, and of an
amount, and to any members they think fit if they are satisfied, on
reasonable grounds, that the Company will, immediately after the
distribution, satisfy the solvency test as stipulated in Section 56 of the
Act.
74 Subject to the rights of the holders of shares entitled to special rights
as to distributions, all distributions 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 distribution.
75 The directors may, before recommending any distribution, set aside out of
the profits of the Company such sums as they think proper as a reserve or
reserves which shall, at their 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.
76 If several persons are registered as joint holders of any share, any of
them may give effectual receipt for any distribution or other monies
payable on or in respect of the share.
77 Notice of any distribution that may have been declared shall be given to
each member in manner hereinafter mentioned and all distributions
unclaimed for three years after having been declared may be forfeited by
the directors for the benefit of the Company.
78 No distribution shall bear interest against the Company.
COMPANY RECORDS
79 The Company shall keep records that:
(a) are sufficient to show and explain the Company's transactions; and
(b) will, at any time, enable the financial position of the Company to
be determined with reasonable accuracy.
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80 The Company shall keep:
(a) minutes of all meetings of:
(i) directors,
(ii) members,
(iii) committees of directors, and
(iv) committees of members;
(b) copies of all resolutions consented to by:
(i) directors,
(ii) members,
(iii) committees of directors, and
(iv) committees of members;
(c) an imprint of the common seal at the registered office of the
Company.
81 The Company shall keep the following records at the office of its
registered agent or at such other place or places, within or outside the
British Virgin Islands, as the directors may determine:
(a) minutes of meetings and resolutions of members and of classes of
members maintained in accordance with Article 80; and
(b) minutes of meetings and resolutions of directors and committees of
directors maintained in accordance with Article 80.
82 The Company shall keep the following documents at the office of its
registered agent:
(a) the Memorandum of Association and Articles of the Company;
(b) the register of members maintained in accordance with Article 85 or
a copy of the register of members;
(c) the register of directors maintained in accordance with Article 84
or a copy of the register of directors;
(d) copies of all notices and other documents filed by the Company in
the previous ten years; and
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(e) a copy of the register of charges kept by the Company pursuant to
Section 162(1) of the Act.
83 (a) Where the Company keeps a copy of the register of members or the
register of directors at the office of its registered agent, it
shall
(i) within 15 days of any change in the register, notify the
registered agent, in writing, of the change; and
(ii) provide the registered agent with a written record of the
physical address of the place or places at which the original
register of members or the original register of directors is
kept.
(b) Where the place at which the original register of members or the
original register of directors is changed, the Company shall provide
the registered agent with the physical address of the new location
of the records within 14 days of the change of location.
84 The Company shall keep a register to be known as a register of directors
containing the names and addresses of the persons who are directors of the
Company, the date on which each person whose name is entered in the
register was appointed as a director of the Company, the date on which
each person named as a director ceased to be a director of the Company,
and such other information as may be prescribed.
85 The Company shall maintain an accurate and complete register of members
showing the full names and addresses of all persons holding registered
shares in the Company, the number of each class and series of registered
shares held by such person, the date on which the name of each member was
entered in the register of members and where applicable, the date such
person ceased to hold any registered shares in the Company.
86 The records, documents and registers required by Articles 79 to 85
inclusive shall be open to the inspection of the directors at all times.
87 The directors shall from time to time determine whether and to what extent
and at what times and places and under what conditions the records,
documents and registers 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 records, documents or
registers of the Company except as conferred by the Act or authorised by
resolution of the directors.
AUDIT
88 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.
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89 The auditor may be a member of the company but no director or officer
shall be eligible during his continuance in office.
90 Every auditor of the Company shall have a right of access at all times to
the books of accounts 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.
91 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
92 Any notice, information or written statement required to be given to
members shall be served by mail (air-mail service if available) addressed
to each member at the address shown in the share register.
93 All notices directed to be given to the members shall, with respect to any
registered shares 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 shares.
94 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
mailed with the postage prepaid.
PENSION AND SUPERANNUATION FUND
95 The directors may establish and maintain or procure the establishment and
maintenance of any non-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 persons
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 persons, and make payments for or towards the insurance of 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.
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WINDING UP
96 The Company may be voluntarily liquidated under Part XII of the Act if it
has no liabilities and it is able to pay its debts as they become due. 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 such 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 trust for the benefit of
the contributors 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.
AMENDMENT TO ARTICLES
97 The Company may alter or modify the conditions contained in these Articles
as originally drafted or as amended from time to time by a resolution of
the members (or by resolution of the directors only where such amendment
is required to provide for the rights conferred by Preferred Shares on
their holders pursuant to Clause 7(d) of the Memorandum).
BUSINESS COMBINATION
98 The following provisions 98.1 through 98.4 and Article 40 shall terminate
upon the consummation of any "Business Combination," and may not be
amended during the "Target Business Acquisition Period." A "Business
Combination" shall mean the acquisition by the Company, whether by merger,
share capital exchange, asset or share acquisition or other similar type
of transaction, of one or more operating businesses ("Target Business")
which has its primary operating facilities located in the People's
Republic of China or in India. The "Target Business Acquisition Period"
shall mean the period commencing from the effectiveness of the
registration statement filed in connection with the initial public
offering ("IPO") of the Company's parent corporation, Asia Automotive
Acquisition Corp., a Delaware corporation ("AAAC") up to and including the
first to occur of (a) a Business Combination; or (b) the Termination Date
(defined below).
98.1 Prior to the consummation of any Business Combination, the Company shall
submit such Business Combination to its shareholders for approval
regardless of whether the Business Combination is of a type which normally
would require such shareholder approval under the Act. In the event that a
majority of the IPO Shares (defined below) cast at the meeting to approve
the Business Combination are voted for the approval of such Business
Combination, the Company shall be authorized to consummate the Business
Combination; provided that the Company shall not consummate any Business
Combination if the holders of 20% or more of the IPO Shares exercise their
redemption rights described in Article 98.2 below.
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98.2 In the event that a Business Combination is approved in accordance with
the above Article 98.1 and is consummated by the Company, any shareholder
of the Company holding Ordinary Shares in the IPO ("IPO Shares") who voted
against the Business Combination may, contemporaneously with such vote,
demand that the Company redeem his IPO Shares into cash. If so demanded,
the Company shall, promptly after consummation of the Business
Combination, redeem such shares into cash at a per share redemption price
equal to the quotient determined by dividing (i) the amount in the Trust
Fund (as defined below), inclusive of any interest thereon, calculated as
of two business days prior to the consummation of the Business
Combination, by (ii) the total number of IPO Shares held by such holder.
"Trust Fund" shall mean the trust account established by AAAC at the
consummation of AAAC's IPO and into which a certain amount of the net
proceeds of the IPO are deposited.
98.3 In the event that the Company does not consummate a Business Combination
by the later of (i) 18 months after the consummation of the IPO or (ii) 24
months after the consummation of the IPO in the event that either a letter
of intent, an agreement in principle or a definitive agreement to complete
a Business Combination was executed but was not consummated within such 18
month period (such later date being referred to as the "Termination
Date"), the officers of the Company shall take all such action necessary
to liquidate and dissolve the Company as soon as reasonably practicable.
In the event that the Company is so wound-up and subsequently liquidated,
only the holders of IPO Shares shall be entitled to receive pro rata
liquidating distributions and the Company shall pay no liquidating
distributions with respect to any other shares of the Company.
98.4 A holder of IPO Shares shall be entitled to receive distributions from the
Trust Fund only in the event of a liquidation of the Company or in the
event he demands redemption of his shares in accordance with Article 98.2
above. In no other circumstances shall a holder of IPO Shares have any
right or interest of any kind in or to the Trust Fund.
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We, Maples Finance BVI Limited of Kingston Chambers, P.O. Box 173, Road Town,
Tortola, British Virgin Islands in our capacity as registered agent for the
Company hereby apply to the Registrar for the incorporation of the Company this
[ ]th day of February, 2008.
Incorporator
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Jose Santos
Authorised Signatory
Maples Finance BVI Limited