Exhibit 1.2
BY-LAW NO. 5
A by-law relating generally to the
transaction of the business and affairs of
INTERNET LIQUIDATORS INTERNATIONAL INC.
ARTICLE 1. DEFINITIONS
(1) Definitions - In this by-law and in all other by-laws of the Corporation
unless the context otherwise requires:
(1) "Act" means the Business Corporations Act (Ontario) R.S.O. 1990 c.B.
17, as from time to time amended, and a reference to a particular provision
or part of the Act shall be deemed to be a reference to such provision or
part as the same may thereafter from time to time be amended or
supplemented;
(2) "Board" means the board of directors of the Corporation; and
(3) "Corporation" means Internet Liquidators International Inc.
(2) Expressions Defined in Act - Save as aforesaid, words and expressions
defined in the Act have the same meanings when used herein.
(3) Interpretation - Words importing the singular number include the plural and
vice versa; words importing gender include the masculine, feminine and
neuter genders; and words importing persons include individuals, bodies
corporate, partnerships, trust and unincorporated organizations.
ARTICLE 2. BOARD NUMBER
Where the Articles of the Corporation provide for a minimum and maximum
number of directors, the number of directors and the number to be elected at the
annual meeting shall be the number fixed by special resolution of the
shareholders or by resolution of the directors from time to time.
ARTICLE 3. BUSINESS OF THE CORPORATION
(1) Registered Office - Until changed in accordance with the Act, the
registered office of the Corporation shall be at the City of Mississauga in
the Province of Ontario and at such location therein as the Board may from
time to time determine.
(2) Financial Year - Until changed by the Board, the financial year of the
Corporation shall end on the 30th day of November in each year.
ARTICLE 4. MEETINGS OF SHAREHOLDERS
(1) Annual Meetings - The annual meeting of shareholders shall be held at such
time in each year and, subject to section 4(c), at such place as the Board,
the Chairman of the Board or the President may from time to time determine,
for the purpose of considering the financial statements and reports
required by the Act to be placed before the annual meeting, electing
directors, appointing auditors and for the transaction of such other
business as may properly be brought before the meeting.
(2) Special Meetings - The Board, the Chairman of the Board or the President
shall have power to call a special meeting of shareholders at any time.
(3) Place of Meetings - Meetings of shareholders shall be held at the
registered office of the Corporation or at such other place in or outside
Ontario as the directors determine.
(4) Notice of Meetings - Notice of the time and place of each meeting of
shareholders shall be given in the manner provided in section 6(a) not less
than 21 nor more than 50 days before the date of the meeting to each
director, to the auditor and to each shareholder who at the close of
business on the record date for notice is entered in the securities
register as the holder of one or more shares carrying the right to vote at
the meeting. Notice of a meeting of shareholders called for any purpose
other than consideration of the financial statements and auditor's report,
election of directors and reappointment of the incumbent auditor shall
state the nature of such business in sufficient detail to permit the
shareholders to form a reasoned judgment thereon and shall state the text
of any special resolution to be submitted to the meeting. A shareholder and
any other person entitled to attend a meeting of shareholders may in any
manner waive notice of or otherwise consent to a meeting of shareholders.
(5) List of Shareholders Entitled to Notice - For every meeting of
shareholders, the Corporation shall prepare a list of shareholders entitled
to receive notice of the meeting, arranged in alphabetical order and
showing the number of shares entitled to vote at the meeting held by each
shareholder. If a record date for the meeting is fixed pursuant to section
4(f), the shareholders listed shall be those registered at the close of
business on such record date. If no record date is fixed, the shareholders
listed shall be those registered at the close of business on the day
immediately preceding the day on which notice of the meeting is given, or
where no such notice is given, on the day on which the meeting is held. The
list shall be available for examination by any shareholder during usual
business hours at the registered office of the
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Corporation or at the place where the securities register is maintained and
at the meeting for which the list was prepared. Where a separate list of
shareholders has not been prepared, the names of persons appearing in the
securities register at the requisite time as the holder of one or more
shares carrying the right to vote at such meeting shall be deemed to be a
list of shareholders.
(6) Record Date for Notice - The Board may fix in advance a date, preceding the
date of any meeting of shareholders by not more than 50 days and not less
than 35 days, as a record date for the determination of the shareholders
entitled to notice of the meeting. If a record date is fixed, unless notice
thereof is waived in writing by every holder of a share of the class or
series affected whose name is set out in the share register at the close of
business on the day the directors fix the record date, notice thereof
shall, not less than seven days before the date so fixed, be given in the
manner provided in the Act. If no record date is so fixed, the record date
for the determination of the shareholders entitled to notice of the meeting
shall be the close of business on the day immediately preceding the day on
which the notice is given or if no notice is given, the day on which the
meeting is held.
(7) Meetings Without Notice - A meeting of shareholders may be held without
notice at any time and place permitted by the Act:
(1) if all the shareholders entitled to vote thereat are present in person
or represented by proxy or if those not present or represented by proxy
waive notice of or otherwise consent to such meeting being held; and
(2) if the auditors and the directors are present or waive notice of or
otherwise consent to such meeting being held.
At such a meeting any business may be transacted which the Corporation at a
meeting of shareholders may transact. If the meeting is held at a place outside
Canada, shareholders not present or represented by proxy, but who have waived
notice of or otherwise consented to such meeting, shall also be deemed to have
consented to the meeting being held at such place.
(8) Chairman, Secretary and Scrutineers - The chairman of any meeting of
shareholders shall be the first mentioned of such of the following officers
as have been appointed and who is present at the meeting: Chairman of the
Board, President or a Vice-President who is a director. If no such officer
is present within 15 minutes from the time fixed for holding the meeting,
the persons present and entitled to vote shall choose one of their members
to be chairman. If the Secretary of the Corporation is absent, the chairman
shall appoint some person, who need not be a shareholder, to act as
secretary of the meeting. If desired, one or more scrutineers, who need not
be shareholders, may be appointed by a resolution or by the chairman with
the consent of the meeting.
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(9) Persons Entitled to be Present - The only persons entitled to be
present at a meeting of shareholders shall be those entitled to vote
thereat, the directors and auditors of the Corporation and others who,
although not entitled to vote, are entitled or required under any provision
of the Act or the articles or by-laws to be present at the meeting. Any
other person may be admitted only on the invitation of the chairman of the
meeting or with the consent of the meeting.
(10) Quorum - A quorum for the transaction of business at any meeting of
shareholders shall be the lesser of the number of shareholders or two
persons present in person, each being a shareholder or representative duly
authorized in accordance with the Act entitled to vote thereat or a duly
appointed proxy for a shareholder so entitled (and together holding or
representing by proxy not less than 20% of the outstanding shares of the
Corporation entitled to vote at the meeting). If a quorum is present at the
opening of the meeting, the shareholders present in person or by proxy may
proceed with the business of the meeting even if a quorum is not present
throughout the meeting.
(11) Right to Vote - Subject to the provisions of the Act as to authorized
representatives of any other body corporate, at any meeting of shareholders
in respect of which the Corporation has prepared the list referred to in
section 4(e), every person who is named in such list shall be entitled to
vote the shares shown thereon opposite his name, except:
(1) where the Corporation has fixed a record date in respect of such
meeting pursuant to section 4(f), to the extent that any such person has
transferred any of his shares after such record date and the transferee
either produces properly endorsed share certificates or otherwise
established that he owns such shares and demands, on or before the
commencement of the meeting, that his name be included in the list before
the meeting; or
(2) where the Corporation has not fixed a record date in respect of
such meeting pursuant to section 4(f), to the extent that any such person
has transferred any of his shares after the date on which the list referred
to in section 4(e) is prepared and the transferee, either produces properly
endorsed share certificates or otherwise establishes that he owns such
shares and demands, on or before the commencement of the meeting, that his
name be included in the list before the meeting,
in either of which cases the transferee is entitled to vote his shares at the
meeting.
In the absence of a list prepared as aforesaid in respect of a meeting of
shareholders, every person shall be entitled to vote at the meeting whose name
appears in the securities register as the holder of one or more shares carrying
the right to vote at such meeting.
(12) Proxies - Every shareholder entitled to vote at a meeting of shareholders
may appoint a proxyholder, or one or more alternate proxyholders, who need
not be shareholders, to
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attend and act at the meeting in the manner and to the extent authorized
and with the authority conferred by the proxy. A proxy shall be in writing
executed by the shareholder or his attorney and shall conform with the
requirements of the Act.
(13) Time for Deposit of Proxies - The Board may specify in a notice calling a
meeting of shareholders a time, preceding the time of such meeting by not
more than 48 hours exclusive of non-business days, before which time
proxies to be used at such meeting must be deposited. A proxy shall be
acted upon only if, prior to the time so specified, it shall have been
deposited with the Corporation or an agent thereof specified in such notice
or, if no such time is specified in such notice, unless it has been
received by the Secretary of the Corporation or by the chairman of the
meeting or any adjournment thereof prior to the time of voting.
(14) Joint Shareholders - If two or more persons hold shares jointly, any one of
them present in person or represented by proxy at a meeting of shareholders
may, in the absence of the other or others, vote the shares; but if two or
more of those persons are present in person or represented by proxy and
vote, they shall vote as one on the shares jointly held by them.
(15) Votes to Govern - At any meeting of shareholders every question shall,
unless otherwise required by the articles or by-laws or by law, be
determined by the majority of the votes cast on the question. In case of an
equality of votes either upon a show of hands or upon a poll, the chairman
of the meeting shall be entitled to a second or casting vote.
(16) Show of Hands - Subject to the provisions of the Act, any question at a
meeting of shareholders shall be decided by a show of hands unless a ballot
thereon is required or demanded as hereinafter provided. Upon a show of
hands every person who is present and entitled to vote shall have one vote.
Whenever a vote by show of hands shall have been taken upon a question,
unless a ballot thereon is so required or demanded, a declaration by the
chairman of the meeting that the vote upon the question has been carried or
carried by a particular majority or not carried and an entry to that effect
in the minutes of the meeting shall be prima facie evidence of the fact
without proof of the number or proportion of the votes recorded in favour
of or against any resolution or other proceeding in respect of the said
question, and the result of the vote so taken shall be the decision of the
shareholders upon the said question.
(17) Ballots - On any question proposed for consideration at a meeting of
shareholders, and whether or not a show of hands has been taken thereon,
any shareholder or proxyholder entitled to vote at the meeting may require
or demand a ballot. A ballot so required or demanded shall be taken in such
manner as the chairman shall direct. A requirement or demand for a ballot
may be withdrawn at any time prior to the taking of the ballot. If a ballot
is taken each person present shall be entitled, in respect of the shares
which he is entitled to vote at the meeting upon the question, to that
number of votes provided by the Act or the articles, and the result of the
ballot so taken shall be the decision of the shareholders upon the said
question.
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(18) Adjournment - If a quorum is not present at or within 15 minutes from the
opening of a meeting of shareholders, the shareholders present may adjourn
the meeting to a fixed time and place but may not transact any other
business. If a meeting of shareholders is adjourned for less than 30 days,
it shall not be necessary to give notice of the adjourned meeting, other
than by announcement at the earliest meeting that is adjourned. If a
meeting of shareholders is adjourned by one or more adjournments for an
aggregate of 30 days or more, notice of the adjourned meeting shall be
given as for an original meeting.
(19) Resolution in Writing - Subject to the Act, a resolution in writing signed
by all the shareholders entitled to vote on that resolution at a meeting of
shareholders is as valid as if it has been passed at a meeting of the
shareholders.
(20) Only One Shareholder - Where the Corporation has only one shareholder or
only one holder of any class or series of shares, the shareholder present
in person or by proxy constitutes a meeting.
ARTICLE 5. MEETINGS OF DIRECTORS
(1) First Meeting - Immediately after the annual meeting of shareholders in
each year, a meeting of such of the newly elected directors as are then
present may be held (provided that they shall constitute a quorum) without
notice, for the appointment of officers of the Corporation and the
transaction of such other business as may come before the meeting.
(2) Notice - Subject to the foregoing and to the provisions of any resolution
of the Board, meetings of the Board may be called at any time by the
Chairman of the Board, the President or any two directors and notice of the
time and place for holding any meeting of the Board shall be given at least
forty-eight hours prior to the time fixed for the meeting. Any meeting so
called may be held at the registered office of the Corporation or such
other place as the Board may determine in or outside Ontario.
(3) Abbreviated Notice - In any case when it is considered by the Chairman of
the Board or the President in his discretion to be a matter of urgency that
a directors' meeting be convened, he may give notice of a meeting of
directors by telegraph or telephone not less than one hour before such
meeting is to be held and such notice shall be adequate for the meeting so
convened.
(4) Quorum - The quorum for the transaction of business of any meeting of the
Board shall be a majority of the number of directors or minimum number of
directors, as the case may be.
(5) Chairman - The chairman of any meeting of the Board shall be the first
mentioned of such of the following officers as have been appointed and who
is a director and is
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present at the meeting: Chairman of the Board, President or Vice-President.
If all such officers be absent or unable or refuse or fail to act, the
directors present may choose a chairman from among their number. The
chairman at any meeting may vote as a director.
(6) Votes to Govern - At all meetings of the Board every question shall be
decided by a majority of the votes cast on the question. In the case of an
equality of votes the chairman of the meeting shall be entitled to a second
or casting vote.
ARTICLE 6. NOTICES
(1) Method of Giving Notice - Any notice (which term includes any communication
or document) to be given (which term includes sent, delivered or served)
pursuant to the Act, the regulations thereunder, the articles, the by-laws
or otherwise to a shareholder, director, officer, auditor or member of a
committee of the Board shall be sufficiently given if delivered personally
to the person to whom it is to be given or if delivered to his recorded
address or if mailed to him at his recorded address by prepaid ordinary or
air mail or if sent to him at his recorded address by any means of prepaid
transmitted or recorded communication. A notice so delivered shall be
deemed to have been given when it is delivered personally or to the
recorded address as aforesaid; a notice so mailed shall be deemed to have
been given when deposited in a post office or public letter box; and a
notice so sent by any means of transmitted or recorded communication shall
be deemed to have been given when dispatched or delivered to the
appropriate communication company or agency or its representative for
dispatch. The Secretary may change or cause to be changed the recorded
address of any shareholder, director, officer, auditor or member of a
committee of the Board in accordance with any information believed by him
to be reliable.
(2) Notice to Joint Shareholder - If two or more persons are registered as
joint holders of any share, any notice shall be addressed to all of such
joint holders but notice to one of such persons shall be sufficient notice
to all of them.
(3) Computation of Time - In computing the date when notice must be given under
any provision requiring a specified number of days' notice of any meeting
or other event, the date of sending the notice shall be included and the
date of the meeting or other event shall both be excluded.
(4) Undelivered Notices - If any notice given to a shareholder pursuant to
section 4(a) is returned on three consecutive occasions because he cannot
be found, the Corporation shall not be required to give any further notices
to such shareholder until he informs the Corporation in writing of his new
address.
(5) Omissions and Errors - The accidental omission to give any notice to any
shareholder, director, officer, auditor or member of a committee of the
Board or the non-receipt of any notice by any such person or any error in
any notice not affecting the substance thereof
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shall not invalidate any action taken at any meeting held pursuant to such
notice or otherwise founded thereon.
(6) Persons Entitled by Death or Operation of Law - Every person who, by
operation of law, transfer, death of a shareholder or any other means
whatsoever, shall become entitled to any share, shall be bound by every
notice in respect of such share which shall have been duly given to the
shareholder from whom he derives his title to such share prior to his name
and address being entered on the securities register (whether such notice
was given before or after the happening of the event upon which he became
so entitled) and prior to his furnishing to the Corporation the proof of
authority or evidence of his entitlement prescribed by the Act.
(7) Waiver of Notice - Any shareholder (or his duly appointed proxyholder),
director, officer, auditor or member of a committee of the Board may at any
time waive the sending of any notice or waive or abridge the time for any
notice, required to be given to him under any provision of the Act, the
regulations thereunder, the articles, the by-laws or otherwise and such
waiver or abridgement shall cure any default in the giving or in the time
of such notice, as the case may be. Any such waiver or abridgement shall be
in writing except a waiver of notice of a meeting of shareholders or of the
Board which may be given in any manner.
ARTICLE 7. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Corporation shall indemnify a director or officer of the Corporation, a
former director or officer of the Corporation, or a person who acts or acted at
the Corporation's request as a director or officer of a body corporate of which
the Corporation is or was a shareholder or creditor, and his heirs and legal
representatives, against all costs, charges and expenses, including an amount
paid to settle an action or satisfy a judgment, reasonably incurred by him in
respect of any civil, criminal or administrative action or proceeding to which
he or she is made a party by reason of being or having been a director or
officer of the Corporation or body corporate, if:
(a) he or she acted honestly and in good faith with a view to the best
interests of the Corporation; and
(1) in the case of a criminal or administrative action or proceeding
that is enforced by a monetary penalty, he or she had reasonable
grounds for believing that his or her conduct was lawful.
ARTICLE 8. EFFECTIVE DATE
This by-law shall come into force and effect when enacted by the Board,
subject to the Act, whereupon this by-law shall repeal and replace By-law Number
1 of the Corporation, without prejudice to any action previously taken pursuant
to such by-law.
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Enacted by the Board the 16th day of September , 1996.
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Secretary