Annex D
TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE BVI BUSINESS COMPANIES ACT, 2004
ARTICLES OF ASSOCIATION
OF
TONGXIN INTERNATIONAL, LTD.
INTERPRETATION
1 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
2 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.
3 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
4 Subject to the provisions of the Memorandum of Association and 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, and in the absence of fraud the decision of the directors as to
the value of the consideration received by the Company in respect of the issue
is conclusive unless a question of law is involved.
5 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.
6 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.
7 Shares in the Company may be issued for money, services rendered, personal
property, an estate in real property, a promissory note or other binding
obligation to contribute money or property or any combination of the foregoing
as shall be determined by a resolution of directors.
8 A share issued by the Company upon conversion of, or in exchange for, another
share or a debt obligation or other security in the Company, shall be treated
for all purposes as having been issued for money equal to the consideration
received or deemed to have been received by the Company in respect of the other
share, debt obligation or security.
9 The Company may issue fractions of a share and a fractional share shall have
the same corresponding fractional liabilities, limitations, preferences,
privileges, qualifications, restrictions, rights and other attributes of a whole
share of the same class or series of shares.
10 The directors may redeem any share issued by the Company at a premium.
11 If at any time the Company is authorised to issue shares of more than one
class 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 a
majority of the issued shares of that class and the holders of a majority of the
issued shares of any other class of shares which may be affected by such
variation.
12 The rights conferred upon the holders of the shares of any class issued with
preferred or other rights shall not, unless otherwise expressly provided by the
terms of issue of the shares of that class, be deemed to be varied by the
creation or issue of further shares ranking pari passu therewith.
13 Except as required by the Act, no person shall be recognized 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 recognize (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
14 Subject to any limitations in the Memorandum of Association, 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.
15 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 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
16 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 recognized 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 notarized copy of the share
certificate(s) of the deceased, incompetent or bankrupt member, an indemnity in
favor 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.
17 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,
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.
18 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.
19 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.
20 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
21 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.
22 No purchase, redemption or other acquisition of shares shall be made unless
the directors determine that immediately after the purchase, redemption or other
acquisition the Company will be able to pay its debts as they fall due and the
value of the assets of the Company exceeds its liabilities.
23 Shares that the Company purchases, redeems or otherwise acquires pursuant to
the preceding Regulation may be cancelled or held as treasury shares except to
the extent that such shares are in excess of 80 percent of the issued shares of
the Company in which case they shall be cancelled but they shall be available
for reissue.
24 Subject to the provisions to the contrary in;
(a) the Memorandum of Association or these Articles;
(b) the designations, powers, preferences, rights, qualifications, limitations
and restrictions with which the shares were issued; or
(c) the subscription agreement for the issue of the shares;
the Company may not purchase, redeem or otherwise acquire its own shares without
the consent of members whose shares are to be purchased, redeemed or otherwise
acquired.
MEETINGS OF MEMBERS
25 Any action required or permitted to be taken by the members must be effected
at a duly called meeting (as described in Regulations 28, 29 and 30) of the
members entitled to vote on such action and may not be effected by written
resolution.
26 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 fifty (50) percent of the
voting rights in respect of the matter for which the meeting is requested.
27 An annual meeting of members for election of directors and for such other
business as may come before the meeting shall be held each year at such date and
time as may be determined by the directors.
28 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.
29 The directors may fix the record date for determining those shares that are
entitled to vote at the meeting.
30 Notwithstanding Article 28, 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 in person or by proxy at the meeting shall be deemed to constitute waiver
on his part.
31 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.
32 A member shall be deemed to be present at a meeting of members if he
participates by telephone or other electronic means and all members
participating in the meeting are able to hear each other.
33 The following shall apply in respect of joint ownership of shares:
(a) if two or more persons hold shares jointly each of them may be present in
person or by proxy at a meeting of members and may speak as a member;
(b) if only one of the joint owners is present in person or by proxy he may
vote on behalf of all joint owners; and
(c) if two or more of the joint owners are present in person or by proxy they
must vote as one.
PROCEEDINGS AT MEETINGS OF MEMBERS
34 No business shall be transacted at any meeting unless a quorum of members is
present at the time when the meeting proceeds to business. Save as set out in
Regulation 35 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.
35 If, within two hours from the time appointed for the meeting, a quorum is not
present, the meeting, if convened upon the requisition of members, shall be
dissolved; in any other case it shall stand adjourned to the next business day
at the same time and place or to such other time and place as the directors may
determine, and if at the adjourned meeting there are present within one hour
from the time appointed for the meeting in person or by proxy not less than one
third of the votes of the shares or each class or series of shares entitled to
vote on the resolutions to be considered by the meeting, those present shall
constitute a quorum but other wise the meeting shall be dissolved.
36 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.
37 At any meeting of members, only such business shall be conducted as shall
have been brought before such meeting:
(a) by or at the direction of the Chairman of the Board of Directors (as
defined in Regulation 84); or
(b) by any member who is a holder of record at the time of the giving of the
notice provided for in Regulation 28 who is entitled to vote at the meeting
and who complies with the procedures set out in Regulation 43.
38 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.
39 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
(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.
40 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 favor of or against such resolution.
41 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.
42 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.
43 For business to be properly brought to the annual meeting of members by a
member, the member must have given timely written notice thereof, either by
personal delivery or by prepaid registered post to the secretary of the Company
(the "Secretary") at the principal executive offices of the Company. To be
timely, a member's notice must be
received at the principal executive offices of the Company, not less than 120
days in advance of the first anniversary of the date that the Company's (or the
Company's predecessor's) proxy statement was sent to members in connection with
the previous year's annual meeting of members, except that if no annual meeting
was held in the previous year or the date of the annual meeting is more than 30
calendar days earlier than the date of the prior year's annual meeting, notice
by a member to be timely must be received not later than the close of business
on the tenth day following the day on which the date of the annual meeting is
publicly announced (including by disclosure in a press release or in a document
filed with the Securities and Exchange Commission). For the purposes of this
Article 43, any adjournment(s) or postponement(s) of the original meeting
whereby the meeting will reconvene within 30 days from original date shall be
deemed, for purposes of notice, to be a continuation of the original meeting and
no business may be brought before any reconvened meeting unless such timely
notice of such business was given to the Secretary for the meeting as original
scheduled. A member's notice to the Secretary shall set out as to each matter
that the member wishes to be brought before the meeting of members:
(i) a brief description of the business desired to be brought before the
meeting;
(ii) the name and address of record of the member proposing such business;
(iii) the class and number of shares of the Company which are beneficially owned
by such member;
(iv) any material interest of such member in such business; and
(v) if the member intends to solicit proxies in support of such member's
proposal, a representation to that effect.
44 Notwithstanding the a foregoing, nothing in Regulation 43 shall be
interpreted or construed to require the inclusion of information about any such
proposal in any proxy statement distributed by, at the direction of, or on
behalf of, the directors. The chairman of a meeting of members shall, if the
facts so warrant, determine and declare to the meeting that business was not
properly brought before the meeting in accordance with the provisions of this
Regulation 44 and, if he should so determine, he shall so declare to the meeting
and any such business not properly brought before the meeting shall not be
transacted. However, the notice requirements set out in Regulation 43 shall be
deemed satisfied by a member if the member has notified the Company of his
intention to present a proposal at a meeting of members and such member's
proposal has been included in a proxy statement that has been distributed by, at
the direction of, or on behalf of, the directors to solicit proxies for such
meeting; provided that, if such member does not appear or send a qualified
representative, as determined
by the chairman of the meeting, to present such proposal at such meeting, the
Company need not present such proposal for a vote at such meeting
notwithstanding that proxies in respect of such vote may have been received by
the Company.
VOTES OF MEMBERS
45 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.
46 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.
47 If a committee is appointed for any member who is of unsound mind, that
member may vote by such committee.
48 Any person other than an individual 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 Company or of any
class of members of the Company, and the person so authorised shall be entitled
to exercise the same powers on behalf of the person which he represents as that
person could exercise if it were an individual
member of the Company.
49 Votes may be given either personally or by proxy.
50 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.
51 Subject to Article 53 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.
52 The instrument appointing a proxy shall be in writing under the hand of the
appointer or in electronic form signed by 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.
53 Directors of the Company may attend and speak with members of the Company and
at any separate meeting of the holders of any class or series of shares in the
Company.
54 No business of the Company shall be conducted at a meeting of members except
in accordance with the provisions of these Regulations 34 to 55.
CORPORATIONS ACTING BY REPRESENTATIVES AT MEETINGS
55 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.
(A) DIRECTORS
56 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 requirements of the Memorandum of Association, the directors may by a
resolution of directors, amend this Regulation 57 to change the number of
directors.
57 Subject to Regulation 57 to change the number of directors, the continuing
directors may act, notwithstanding any casual vacancy in their body, so long as
there remain in office not less than the prescribed minimum of directors duly
qualified to act, but if the
number falls below the prescribed minimum, the remaining directors shall not act
except for the purpose of filling such vacancy.
58 The first director or directors shall be appointed by the registered agent of
the Company. Thereafter, the directors shall be appointed by the members or the
directors for such terms as the members or directors may determine and may be
removed by a resolution of the majority of the members of the Company, being for
the purposes of this Regulation 59 only, an affirmative vote of the holders of
66 2/3 percent or more of the outstanding votes of the shares entitled to vote
thereon or by a resolution of directors.
59 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 Regulation 59 or a resolution passed by the
majority of the remaining directors.
60 A vacancy in the board of directors may be filled by a resolution of members
or a resolution passed by the majority of the remaining directors.
61 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. A director must be
an individual.
62 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 92 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.
63 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 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.
64 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.
65 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.
66 (a) Nominations of persons for election to the Board of Directors shall be
made only at a meeting of members and only:
(i) by or at the direction of the directors; or
(ii) by a member entitled to vote for the election of directors who complies
with the notice
procedures set out below.
(b) Such nominations, other than those made by or at the direction of the
directors, shall be made pursuant to timely notice in writing to the Secretary.
To be timely, a member's notice must be received at the principal executive
offices of the Company not less than 120 days in advance of the first
anniversary of the date that the Company's (or the Company's predecessor's)
proxy statement was sent to members in connection with the previous year's
annual meeting of members, except that if no annual meeting was held in the
previous year or the date of the annual meeting is more than 30 calendar days
earlier than the date of the prior year's annual meeting, notice by a member to
be timely must be received not later than the close of business on the tenth day
following the day on which the date of the annual meeting is publicly announced
(including by disclosure in a press release or in a document filed with the
Securities and Exchange Commission).. For the purposes of this Regulation 67,
any adjournment or postponement of the original meeting whereby the meeting will
reconvene within 30 days from the original date shall be deemed for the purposes
of this notice to be a continuation of the original meeting and no nominations
by a member of persons to be elected directors of the Company may be made at any
such reconvened meeting unless pursuant to a notice which was timely for the
meeting on the date original scheduled. Each such notice shall set out
(i) the name and address of the member who intends to make the nomination and
of the persons to be nominated.
(ii) a representation that the member is a holder of record of shares in the
Company entitled to vote at such meeting and that he intends to appear in
person or by proxy at the meeting to nominate the persons specified in the
notice;
(iii) a description of all arrangements or understandings between the member and
each nominee and any other person (naming such person) pursuant to which
the nominations are to be made by the member.
(iv) such other information regarding each nominee proposed by such member as
would have been required to be included in a proxy statement filed pursuant
to the proxy rules of the United States Securities and Exchange Commission,
had each nominee been nominated, or intended to be nominated, by the
directors;
(v) the consent of each nominee to serve as a director of the Company if so
elected; and
(vi) if the member intends to solicit proxies in support of such member's
nominees, a representation to that effect.
67 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;
(c) becomes disqualified to act as a director under Section 111 of the Act;
(d) absent from meetings of the directors for six consecutive months without
leave of the board of directors, provided that the directors shall have
power to grant any director leave of absence for any or an indefinite
period;
(e) if he dies; or
(f) if he becomes of unsound mind.
68 (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.
(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 Regulation 69 (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 Regulation 69 (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 Regulation 69(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 Regulation 69(d) does not affect the validity of a
transaction entered into by the director or the Company.
OFFICERS
69 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 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.
70 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.
71 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.
(B) MANAGING DIRECTORS
72 The directors may from time to time and by resolution of directors appoint
one or more of their number to be a managing director or joint managing director
and may, subject to any contract between him or them and the Company, from time
to time terminate his or their appointment and appoint another or others in his
or their place or places.
73 A director appointed in terms of the provisions of Regulation 75 to the
office of managing director of the Company may be paid, in addition to the
remuneration payable in terms of Regulation 66, such remuneration not exceeding
a reasonable maximum in each year in respect of such office as may be determined
by a disinterested quorum of the directors.
74 The directors may from time to time, by resolution of directors, entrust and
confer upon a managing director for the time being such of the powers and
authorities vested in them as they think fit, save that no managing director
shall have any power or authority with respect to the matters requiring a
resolution of directors under
the Act.
POWERS OF DIRECTORS
75 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.
76 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.
77 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.
78 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.
79 All cheques, promissory notes, drafts, bills of exchange and other negotiable
instruments and all receipts for monies paid to the Company, shall be signed,
drawn, accepted, endorsed or otherwise executed as the case may be, in such
manner as the directors shall from time to time by resolution determine.
80 The directors may 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.
81 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
82 The meetings of the board of directors and any committee thereof shall be
held at such place or places as the directors shall decide.
83 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.
84 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.
85 A director shall be given not less than three (3) days notice of a meeting of
the directors.
86 Notwithstanding Regulation 88, a meeting of directors held in contravention
of Regulation 884 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.
87 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.
88 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-half of the total number of directors unless there are only 2
directors in which case the quorum shall be 2.
89 If within half an hour from the time appointed for the meeting a quorum is
not present, the meeting shall be dissolved.
90 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.
91 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.
COMMITTEES
92 The directors may, by resolution of directors, designate one or more
committees, each consisting of one or more directors.
93 Each committee of directors has such powers and authorities of the directors,
including the power and
authority to affix the Seal, as are set forth in the resolution of directors
establishing the committee, except that no committee has any power or authority
to amend the Memorandum of Association or these Articles, to appoint directors
or fix their emoluments or to appoint officers or agents of the Company.
94 The meeting and proceedings of each committee of directors consisting of 2 or
more directors shall be governed mutatis mutandis by the provisions of these
Articles regulating the proceedings of directors so far as the same are not
superseded by any provisions in the resolution establishing the committee.
(ii) INDEMNITY
95 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.
(b) CONFLICT OF INTERESTS
96 No agreement or transaction between the Company and one or more of its
directors or any person in which any director has a financial interest or to
whom any director is related, including as a director of that other person, is
void or voidable for this reason only or by reason only that the director is
present at the meeting of directors or at the meeting of the committee of
directors that approves the agreement or transaction or that the vote or consent
of the director is counted for that purpose if the material facts of the
interest of each director in the agreement or transaction and his interest in or
relationship to any other party to the agreement or transaction are disclosed in
good faith or are known by the other directors.
97 A director who has an interest in any particular business to be considered at
a meeting of directors or members may be counted for purposes of determining
whether the meeting is duly constituted.
SEAL
98 The directors shall provide for the safe custody of the common seal (if any)
of the Company. The common seal when affixed to any instrument except as
provided in Regulation 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.
(c) DISTRIBUTIONS
99 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.
100 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.
101 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.
102 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.
103 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.
104 No distribution shall bear interest against the Company and no distribution
shall be paid on treasury shares or shares held by another company of which the
Company holds, directly or indirectly, shares having more than 50 percent of the
vote in electing directors.
105 A share issued as a distribution by the Company shall be treated for all
purposes as having been issued for money equal to the surplus that is
transferred to capital upon the issue of the share.
(d)COMPANY RECORDS
106 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.
107 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.
108 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 Regulation 110; and
(b) minutes of meetings and resolutions of directors and committees of
directors maintained in accordance with Regulation 110.
109 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 Regulation 115 or a
copy of the register of members;
(c) the register of directors maintained in accordance with Regulation 115 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
(e) a copy of the register of charges kept by the Company pursuant to Section
162(1) of the Act.
110 (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.
111 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.
112 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.
113 The records, documents and registers required by Articles 108 to 114
inclusive shall be open to the inspection of the directors at all times.
114 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.
(i) AUDIT
115 The members may by resolution call for the accounts of the Company to be
examined by an auditor.
116 The directors may be resolution determine the audit committee to be
appointed by them at such remuneration as may from time to time be agreed, to be
solely responsible for selecting the independent accountants to audit the
Company's financial records.
117 The Company may by resolution of members call for the directors to prepare
periodically a profit and loss account and a balance sheet. The profit and loss
account and balance sheet shall be drawn up so as to give respectively a true
and fair view of the profit and loss of the Company for the financial period and
a true and fair view of the state of affairs of the Company as at the end of the
financial period.
118 The auditor may be a member of the company but no director or officer shall
be eligible during his continuance in office.
119 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.
120 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.
(ii) NOTICES
121 Any notice, information or written statement required to be given to members
shall be served by mail addressed to
each member at the address shown in the share register.
122 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.
123 Any notice, if served by post, shall be deemed to have been served within
five 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.
(iii) PENSION AND SUPERANNUATION FUND
124 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.
(iv) WINDING UP
125 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
126 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
directors or the members.
CONTINUATION
127 The Company may by resolution of members or by a resolution passed
unanimously by all directors of the Company continue as a company incorporated
under the laws of a jurisdiction outside the British Virgin Islands in the
manner provided under those laws.
We,
________________________________________________________________________________
________________________________________________________________________________
________________________________________________ in our capacity as registered
agent for the Company hereby apply to the Registrar for the incorporation of the
Company this _____ day of ________ 2007.
Incorporator
_____________________________________
_____________________________________
Authorised Signatory
_____________________________________