Exhibit 3.2
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"COMPANY ACT"
ARTICLES
OF
HEMPTOWN CLOTHING INC.
TABLE OF CONTENTS
PART ARTICLES PAGE
PART 1 - DEFINITIONS AND CONSTRUCTION 1
PART 2 - SHARE CAPITAL 2
PART 3 - REGISTRATION OF MEMBERS AND SHARE CERTIFICATES 2
PART 4 - TRANSFER AND TRANSMISSION OF SHARES AND DEBENTURES 3
PART 5 - GENERAL MEETINGS 5
PART 6 - DIRECTORS 8
PART 7 - MANAGEMENT OF THE COMPANY 11
PART 8 - BORROWING AND MORTGAGING 12
PART 9 - SAFEGUARDING, INDEMNITY, ETC. OF DIRECTORS 12
PART 10 - EXECUTION OF DOCUMENTS 13
PART 11 - DIVIDENDS 14
PART 12 - NOTICES 14
PART 13 - PROHIBITION 15
"COMPANY ACT"
ARTICLES
OF
HEMPTOWN CLOTHING INC.
PART 1 - DEFINITIONS AND CONSTRUCTION
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1. In these Articles, except as the context otherwise requires:
(a) "board" means the board of directors for the time being of the
Company;
(b) "Company Act" means the Company Act (British Columbia) and
regulations thereunder from time to time in force;
(c) "registered address" of a member means the address of the
member as recorded in the Company's register of members;
(d) "registered address" of a director means the address of the
director as recorded in the Company's register of directors;
(e) words or expressions contained in these Articles bear the same
meaning as in the Company Act or any statutory modification
thereof in force on the date on which these Articles come into
effect;
(f) expressions referring to writing include printing, typewriting,
lithography, photography and any other means of presenting
language in visible and lasting form; and
(g) words importing the singular include the plural and vice versa,
words importing a male person include a female, and words
importing an individual include a corporation.
2. If any provision of these Articles is in whole or in part void,
illegal or invalid, the remaining provisions will be construed and take
effect as if every provision or part thereof which so offends had been
omitted.
3. If there is any conflict between the provisions of these Articles
and the Memorandum of the Company, the provisions of the Memorandum will
govern.
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PART 2 - SHARE CAPITAL
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4. The Company may allot and issue its shares at such times, in such
manner and to such persons, or class of persons, as the directors
determine.
5. The board will determine the price or consideration at or for which
the shares are to be allotted and issued.
6. Subject to the provisions of the Company Act, the Company may, by
resolution of the board, purchase any of its issued shares.
7. The Company may, by resolution of the board, redeem any of its
issued shares. If the Company proposes at its option to redeem some but
not all of the shares of any class, the board may, subject to the special
rights and restrictions attached to such class of shares, decide the
manner in which the shares to be redeemed shall be selected.
8. The Company may by ordinary resolution alter its Memorandum to
increase its authorized capital by:
(a) creating shares with par value or shares without par value or
both;
(b) increasing the number of shares of any class with par value or
shares of any class without par value or both; or
(c) increasing the par value of a class of shares with par value,
if no shares of that class are issued.
9. The Company may, to the extent permitted by law, pay a commission or
allow a discount to any person in consideration of his subscribing or
agreeing to subscribe, whether absolutely or conditionally, or procuring
or agreeing to procure subscriptions, whether absolute or conditional,
for shares in the capital of the Company.
PART 3 - REGISTRATION OF MEMBERS AND SHARE CERTIFICATES
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10. Except as these Articles otherwise provide, the Company and its
directors, officers and agents may treat the registered holder of a share
as the absolute owner thereof, and will not, except as required by
statute or as ordered by a court of competent jurisdiction, be bound to
recognize even when having notice thereof, any claim to, interest in, or
right in respect of such share on the part of any other person.
11. A share held in the names of two or more persons will be deemed to
be held jointly.
12. Except in the case of the personal representatives of, or trustees
of the estate of, a deceased member, the Company may refuse to register
more than three persons as joint holders of a share.
13. A share certificate may be delivered to a member entitled thereto by
mailing it by prepaid registered post in the manner provided in these
Articles for the giving of notices, or otherwise as directed by the
member in writing, and neither the Company nor its transfer agent will be
liable for any loss occasioned to a member or person claiming through a
member by reason that a share certificate so mailed or so otherwise sent
is not received by the addressee.
14. A certificate for a share registered in the names of two or more
persons may be delivered to or to the direction of any one of them.
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PART 4 - TRANSFER AND TRANSMISSION OF SHARES AND DEBENTURES
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15. For the purpose of countersigning, issuing, registering,
transferring, cancelling and certifying the shares and share certificates
of the Company, the Company may appoint:
(a) a registrar;
(b) one or more transfer agents, one of whom may be the registrar;
and
(c) one or more branch transfer agencies and securities registrars
both in and outside British Columbia.
16. For the purpose of these Articles "instrument of transfer" means:
(a) such form of transfer as may appear on the back of the share
certificate representing the share proposed to be transferred;
or
(b) such form of separate transfer document as may from time to
time be in general use.
17. (1) In order to effect a transfer of a share:
(a) an instrument of transfer must be executed by the registered
holder of the share, or his attorney duly authorized in
writing;
(b) unless the proposed transferee has acquired the share through a
registrant and if the proposed transferee is not a member, the
directors may require the proposed transferee to execute an
acknowledgment that he agrees to become a member;
(c) the execution of the instrument of transfer and any
acknowledgment must be attested and validated as, in either
case, the board from time to time reasonably requires; and
(d) the certificate representing the share to be transferred, the
instrument of transfer and the acknowledgment, if required,
will be delivered to the Company's transfer agent or, if the
Company has no transfer agent, to the records office of the
Company.
(2) There shall be a separate instrument of transfer for each class
of shares proposed to be transferred.
(3) When the transfer agent or the Company receives, for the
purpose of a proposed share transfer, a duly executed instrument of
transfer, the Company and its directors, officers and agents, will:
(a) where the instrument of transfer designates the transferee; or
(b) where the instrument of transfer was executed and is delivered
in blank, and the person by or on whose behalf the instrument
of transfer is delivered designates in writing a transferee;
be entitled to treat the person so designated as the beneficial owner of,
(c) if the instrument of transfer is endorsed on a share
certificate, the number of shares represented by the
certificate or such lesser number as may be specified in the
instruments of transfer; or
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(d) if the instrument of transfer is not so endorsed, such number
of shares registered in the name of the transferor as are
represented by every unendorsed certificate deposited with the
Company or its transfer agent for the purpose of the transfer,
or such lesser number as may be specified in the instrument of
transfer;
and upon compliance with, and subject to all other provisions of these
Articles, the Company will cause the name of the proposed transferee to
be entered in the register of members of the Company as holder of each
such share.
18. A share may be registered in the name of a person as executor,
administrator, guardian, committee, curator or trustee of, or otherwise
as fiduciary for, a named person, trust or estate, and
(a) where application is made to issue or transfer a share to a
fiduciary, the Company will not be obliged to enquire into the
authority of the fiduciary, who will be presumed, as against
the Company, to be acting in accordance with his authority
unless, in the case of a transfer of a share, the transfer
proposed is from the person whose estate or interest is sought
to be represented;
(b) in the case of a transfer by a fiduciary, including a transfer
by a fiduciary to himself, the Company will not be obligated to
enquire into the authority of the fiduciary or the propriety of
the transaction or to ascertain whether the fiduciary continues
to occupy his office at the time of transfer;
(c) in all cases the Company will be entitled to act on an order of
a court of record, wherever constituted or having jurisdiction
in proceedings to which the registered holder appears from the
order to have been subject, directing a vesting or declaring
the ownership of shares, as evidenced by a copy of the order of
the court certified as such in accordance with the practice of
the court;
(d) any grant of letters probate or letters of administration or
order appointing a trustee, guardian, committee, curator or
directing a vesting or declaring the ownership of shares, dated
not more than one year before the date on which a copy of the
grant or order, certified in accordance with the practice of
the authority issuing the grant or order, received by the
Company or its transfer agent, will be deemed to be in full
force and effect and not to have been amended, revoked or
reversed, unless and until there is delivered to the transfer
agent of the Company or, if the Company has no transfer agent,
to the records office of the Company
(i) a certificate of a court of record appearing to have the
required jurisdiction, certified in accordance with the
practice of such court, that proceedings have been
commenced by way of appeal or otherwise to amend, revoke
or reserve the grant or order, or
(ii) a copy of an order of a court of record appearing to have
the necessary jurisdiction certified as aforesaid, by
which the earlier grant or order is amended, revoked or
reversed; and
(e) any certificate of a court of record, certified as aforesaid,
and delivered to the transfer agent of the Company or, if the
Company has no transfer agent, to the records office of the
Company, to the effect that any grant or order of that court of
the nature described in clause (d) remains in full force and
effect, and has not been amended, revoked or reversed and that
there is not outstanding with respect to the grant or order any
proceeding of the nature referred to in subclause (d)(i), will
create the same presumption as to the validity of the grant or
order as though the grant or order bore the same date as the
certificate.
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19. The Company or its registrar or transfer agent may refuse to
recognize the transfer of a share to an infant, bankrupt or person
suffering mental infirmity.
20. Where a transfer of a share is completed by registration in the
register of members of the Company, the instrument of transfer and any
accompanying acknowledgment will be retained by the Company or its
transfer agent but where the Company declines to complete a proposed
transfer of a share the instrument of transfer, share certificate and
other documentation deposited for the purpose of the transfer will, on
demand, be returned to the person depositing the same, or other person
entitled thereto.
21. There must be paid to the Company or its transfer agent in respect
of the registration of any transfer or transmission such fee as the board
determines.
22. (1) The personal representative of a deceased member (not being one
of several joint holders) will be the only person recognized by the
Company as having any title to a share registered in the name of the
deceased.
(2) On the death of one of joint registered holders of a share, the
survivor or survivors will be the only person or persons recognized by
the Company as having any title to or interest in the share.
23. The Company may, if authorized by a debenture or any trust indenture
pursuant to which a registered debenture has been issued, cause to be
kept one or more branch registers of its debenture holders.
PART 5 - GENERAL MEETINGS
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24. General meetings of the Company will be held at such time and place,
in accordance with the Company Act and these Articles as the board
determines.
25. (1) Notice of a meeting is sufficient if it specifies the place,
the day and the hour of the meeting and the general nature of any
business to be considered at the meeting.
(2) Notice of a meeting will be deemed to be delivered on the next
business day following the day on which it was mailed or forwarded.
26. The accidental omission to give notice of a general meeting to, or
the non-receipt of such notice by, any of the persons entitled to receive
the notice will not invalidate any proceedings of that meeting or any
meeting adjourned therefrom.
27. The quorum for the transaction of business at a general meeting is
two members or proxy holders representing two members or one member and a
proxy holder representing another member present at the commencement of
the meeting.
28. Unless a quorum is present at the commencement of a general meeting,
no business may be transacted other than the selection of the chairman
and the adjournment or termination of the meeting.
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29. If by half an hour after the time appointed for a general meeting a
quorum is not present, the meeting, if convened upon requisition, will be
terminated, and in any other case will stand adjourned to the same day in
the next week at the same time and place, or to such later date, other
time or other place as the chairman specifies on the adjournment, and if
at the adjourned meeting a quorum is not present by half an hour after
the time appointed for the meeting, the members present will be a quorum.
30. The chairman of a general meeting will be:
(a) the chairman of the board, if any; or
(b) if there is no such chairman or if he is absent or unwilling to
act, the president; or
(c) so failing the president, a director or person present chosen
by the directors; or
(d) if no such director is chosen and willing to act, any
individual present as a member, proxy holder, or representative
of a corporate member or another person present who is duly
chosen by the individuals so present.
31. (1) The chairman may, with the consent of the meeting at which a
quorum is present, and will in pursuance of a resolution to that effect,
adjourn the meeting from time to time and from place to place, but no
business will be transacted at an adjourned meeting other than the
business left unfinished at the meeting from which the adjournment takes
place.
(2) No notice need be given of an adjournment or of the business to
be conducted at an adjourned meeting unless the meeting is adjourned for
more than 31 days, in which case not less than 10 days' notice of the
adjourned meeting must be given.
32. (1) All business at meetings will be conducted by poll unless a
show of hands is specified.
(2) A member entitled to vote at a general meeting may, by means of
a proxy, appoint a proxy holder and such proxy holder will be entitled to
attend, speak and vote on a show of hands and on a poll for the member
and on his behalf at the meeting subject only to any limitation imposed
on the authority of the proxy holder by the proxy.
(3) A proxy must be in writing, dated the date on which it is
executed, must be executed by the member or his attorney authorized in
writing or if the member is a corporation, by a duly authorized officer
or attorney of the corporation and, if to apply to less than all the
shares registered in the name of the member, must specify the number of
shares to which it is to apply.
(4) A proxy holder may be appointed to act for a member at every
annual or other general meeting, or at one or more annual or other
general meetings that may be held within such period of time from the
date of the proxy, accordingly as the proxy specifies.
(5) A proxy will, to the extent that it is inconsistent with
another proxy of an earlier date, be deemed to revoke such other proxy.
(6) A vote given in accordance with the terms of a proxy is not
invalidated by the previous death, bankruptcy or mental infirmity of the
member giving the proxy unless written notice of the death, bankruptcy or
infirmity is received by the chairman before the declaration of the
result of the vote.
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(7) The board may make regulations providing for the deposit of
proxies at specified places and at specified times before meetings and
adjourned meetings of the Company, and providing for particulars of such
proxies to be cabled or telegraphed or sent in writing before the meeting
or adjourned meeting to the Company or to any agent of the Company
appointed for the purpose of receiving such particulars, and providing
that particulars so received will be as effective as though the proxies
themselves were deposited.
(8) Every proxy may be revoked by an instrument in writing executed
by the member or his attorney authorized in writing or, where the member
is a corporation, by a duly authorized officer or attorney of the
corporation, and delivered to the records office of the Company at any
time up to and including the last business day preceding the day of the
meeting or any adjournment thereof at which the proxy is to be used, or
to the chairman of the meeting or any adjournment thereof.
33. A proxy, other than one required by law to be in particular form,
will be substantially in the following form:
"The undersigned hereby appoints , of
(or failing him , of
) as proxy holder for the undersigned to
attend, speak and vote for and on behalf of the undersigned in
respect of all (or ) shares registered in the
name of the undersigned at the general meeting of the Company
to be held on the day of , 19 , and at
any adjournment thereof.
Signed this day of , 19 .
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(Signature of Member)"
34. A corporation which is a member and is not a subsidiary of the
Company may, by instrument under the hand of its duly authorized officer
or attorney, appoint a representative who, until his appointment is in
like manner terminated, will be entitled to attend meetings, act and
vote, both on a show of hands and on a poll, either in person or by
proxy, and other wise exercise the rights of membership of the
corporation appointing him and will, for all purposes in connection with
any meeting of the Company other than the giving of notice, be reckoned
as a member holding the shares registered in the name of such
corporation.
35. Any one of the joint holders of a share may vote in respect of the
share at a general meeting, either personally or by proxy holder, as if
he were solely entitled thereto, and if more than one of the joint
holders is present or represented by proxy holder or corporate
representative that one of them whose name appears first on the register
of members in respect of the share, or his proxy holder or
representative, will alone be entitled to vote in respect thereof.
36. A member for whom a committee has been duly appointed may vote,
whether on a show of hands or on a poll, by his committee and the
committee may appoint a proxy holder.
37. (1) A poll demanded on the election of a chairman or on a question
of adjournment will be taken forthwith and without an intervening
adjournment.
(2) The demand for a poll and the carrying out of a poll will not,
unless the chairman so rules, prevent the continuance of a meeting for
the transaction of business other than that on which the poll is
demanded.
38. On a poll a person entitled to more than one vote need not use all
his votes or cast all the votes he uses in the same way.
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39. In the case of an equality of votes, whether on a show of hands or
on a poll, the chairman may not exercise a casting vote.
40. The chairman may move, propose or second a resolution.
41. The chairman of a meeting of shareholders will have regard to
accepted rules of parliamentary procedure, except that
(a) the chairman will have absolute authority over matters of
procedure and there will be no appeal from his ruling, but if
the chairman deems it advisable to dispense with the rules of
parliamentary procedure at any general meeting or part thereof,
he must so state and must state clearly the rules under which
the meeting or the appropriate part thereof will be conducted;
(b) any dispute as to the admission or rejection of a vote will be
determined by the chairman and his determination will be final
and conclusive;
(c) if disorder arises which prevents continuation of the business
of the meeting, the chairman may quit the chair and announce
the adjournment of the meeting, and upon his so doing, the
general meeting is, notwithstanding Article 30, immediately
adjourned;
(d) the chairman may require anyone to leave the meeting who is not
a registered shareholder entitled to vote at the meeting or
proxy holder for or corporate representative of such a
shareholder; and
(e) a resolution or motion will be considered for vote only if
proposed by a shareholder, proxy holder or representative of a
corporate shareholder, or the chairman (except for a nomination
for election of directors or appointment of auditors).
42. The Company by ordinary resolution may, from time to time, adopt any
Rules of Order which shall, insofar as not inconsistent with the Company
Act or these Articles, govern the conduct of general meetings.
PART 6 - DIRECTORS
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43. The subscribers to the Memorandum shall be the first directors. The
directors to succeed the first directors and the number of directors may
be determined in writing by the subscribers to the Memorandum. The
number of directors may be changed from time to time by ordinary
resolution, at an annual general meeting, or by special resolution at any
other meeting at which directors are to be elected, but shall never be
less than one while the Company is not a reporting company and three if
the Company is or becomes a reporting company.
44. (1) At each annual general meeting of the Company directors will be
elected to hold office commencing at the termination, or earlier
adjournment, of the meeting at which they have been elected.
(2) If the number of eligible persons nominated for election as
directors is equal to or less than the number of directors to be elected,
no vote will be required and those nominated will be deemed elected by
acclamation.
(3) A retiring director is eligible for re-election.
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45. The office of a director will terminate:
(a) on his resignation;
(b) on his removal from office as provided in the Company Act;
(c) on his ceasing to be qualified as a director under the Company
Act; or
(d) on the adjournment or termination of the annual general meeting
which next follows his election or appointment and at which a
director is elected but he is not appointed.
46. (1) The board may appoint any individual qualified to act as a
director to the board to fill any casual vacancy in the board.
(2) A vacancy resulting from an increase in the number of directors
will be deemed not to be a casual vacancy unless, but will be deemed to
be a casual vacancy if, the vacancy is not filled by the shareholders at
the meeting at which the increase is authorized.
(3) Any vacancy on the board that has not been filled by an
appointment made by the board may be filled by an appointment made by
ordinary resolution.
(4) The board may appoint one or more additional directors of the
Company but the number of additional directors so appointed shall not
exceed one-third of the number of directors elected or appointed at the
last general meeting.
47. A person who is not a member who becomes a director is deemed to
have agreed to be bound by the provisions of these Articles to the same
extent as a member.
48. (1) A director will be paid such reasonable travelling, lodging,
subsistence and other expenses as he incurs in or about the business of
the Company.
(2) The remuneration of the directors may from time to time be
fixed by the board subject to any limitations established by ordinary
resolution, and may, in the case of a director who is also an officer or
employee of the Company, be in addition to any remuneration to which he
is entitled as such an officer or employee.
(3) If a director performs any professional or other service for
the Company that, in the opinion of the board, is outside the ordinary
duties of a director, or if he is otherwise specially occupied in or
about the Company's business, he may be paid a special remuneration to be
fixed by the board or, at the option of the director, by the Company in
general meeting.
(4) Remuneration of a director payable on a periodic basis will be
deemed to accrue from day to day.
(5) Except as restricted by ordinary resolution, the board may
cause the Company to pay a gratuity, pension or allowance on retirement
to any director who has held any salaried office or place of profit with
the Company, or to his widow or dependents and may make contributions to
any fund for, and pay premiums for the purchase or provision of, any such
gratuity, pension or allowance.
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49. (1) A director (in this Article called "appointor") may appoint any
other director, member or non-member as an alternate director.
(2) An appointment of an alternate will not be effective until an
instrument in writing signed by the appointor, or a telegram, telecopy,
telex or cable dispatched by the appointor, declaring the appointment, is
received by the Company.
(3) An appointor may revoke an appointment of his alternate by
notice in writing, telegram, telecopy, telex or by cable delivered to the
Company.
(4) The appointment of an alternate terminates if the appointor or
the alternate ceases to be a director.
(5) A director may act as alternate for more than one director and
will be entitled at a meeting of the board to cast one vote for each
director for whom he is the alternate in addition to the vote to which he
is entitled as a director in his own right.
(6) Unless otherwise determined by the board, an alternate will not
be counted as representing his appointor in determining whether a quorum
is present.
50. The directors may meet together at such places, or convene meetings
by telephone, and adjourn and otherwise regulate their meetings and
proceedings as they see fit.
51. A director may at any time, and the secretary upon the request of
the director will, convene a meeting of the board.
52. (1) Notice of a meeting of the board must be given to each director
at least forty-eight (48) hours before the time fixed for the meeting.
(2) Notice may be given verbally, personally or by telephone, or in
writing, personally or by delivery through the post, or telegraph, or by
any other means of communication in common usage.
(3) When notice of a meeting is given to a director other than
personally, it will be addressed to him at his registered address as
shown in the Company's register of directors.
(4) Where the board has established a fixed time and place for
holding regular meetings of the board and holds such a meeting
accordingly, no notice of the next meeting to be so held need be given to
any director.
(5) No notice need be given to a director of a meeting of the board
at which he is appointed or which immediately follows a general meeting
at which he is elected or appointed.
53. The board may act notwithstanding any vacancy in its body, so long
as the number of directors in office is not reduced below the number
fixed as the quorum of the board.
54. The board may from time to time fix the quorum necessary for the
transaction of business and until so fixed the quorum will be a majority
of the number last elected at the annual general meeting.
55. The chairman of the board, if any, or in his absence or if there is
no chairman of the board, the president, will be chairman of each meeting
of the board, but if at any meeting neither the chairman of the board nor
the president is, within fifteen minutes after the time appointed for
holding the meeting, present and willing to act, the directors present
may choose one of their number to be chairman of the meeting.
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56. A meeting of directors at which a quorum is present is competent to
exercise all or any of the authorities, powers and discretions for the
time being vested in or exercisable by the board generally.
57. Questions arising at a meeting of the board will be decided by a
majority of votes.
58. In the case of an equality of votes, the chairman will have a second
or casting vote.
59. A director who is interested in a proposed contract or transaction
or other business to be considered or conducted at a meeting of the board
and who has disclosed his interest in accordance with the provisions of
the Company Act will be counted in the quorum at any meeting of the board
at which the proposed contract or transaction or such other business is
considered, approved or otherwise acted upon.
60. The board may on such terms as it sees fit, delegate any of its
powers to committees each consisting of one or more directors, which will
function in such manner as the board from time to time directs.
61. (1) If the Company is a reporting company, the board will elect
annually from among its number an audit committee to be composed of not
fewer than three directors of whom a majority shall not be officers or
employees of the Company or its affiliates.
(2) The audit committee, if appointed, will review the annual
audited financial statements of the Company before, and will comment
thereon when, such statements are submitted to the board for its
approval.
62. (1) All appointments of officers will be made upon such terms and
conditions and at such remuneration, whether by way of salary, fee,
commission, participation in profits, or otherwise as the board
determines, and every such appointment will be subject to termination at
the pleasure of the board, but without prejudice to any right that may
thereby arise under any contract.
(2) The appointment of an officer will not terminate merely by
reason that all or any of the members of the board by which he was
appointed have ceased to be directors at an annual general meeting or
otherwise, unless he has thereby ceased to hold the qualification for his
office.
PART 7 - MANAGEMENT OF THE COMPANY
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63. (1) The board may exercise all such powers and do all such acts and
things as the Company may exercise and do and which are not by these
Articles or otherwise lawfully directed or required to be exercised or
done by the Company in general meeting, but subject nevertheless to the
provision of these Articles and all laws affecting the Company and to any
rules, not inconsistent with these Articles, made from time to time by
the Company in general meeting; but no such rule will invalidate any
prior act of the board that would have been valid if the rule had not
been made.
(2) The board may appoint a management committee from among its
members to conduct certain matters on its behalf.
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PART 8 - BORROWING AND MORTGAGING
---------------------------------
64. The board may from time to time at its discretion authorize the
Company to borrow any sum of money for the purposes of the Company and
may raise or secure the repayment of such sum or the performance of any
other obligation of the Company in such manner and upon such terms and
conditions in all respects as the board thinks fit, and without limiting
the generality of the foregoing, by the issue of bonds, debentures, or
other instruments, or any mortgage or charge, whether specific or
floating, or other security on the undertaking of the whole or any part
of the property of the Company, both present and future.
65. The board may make any such bond, debenture, or other instrument,
mortgage or charge, or any other security by its terms assignable free
from any equity between the Company and the person to whom it is issued,
or any other person who lawfully acquires the same by assignment,
purchase or otherwise.
66. The board may authorize the issue of any such bond, debenture, or
other instrument, or mortgage or charge or other security at a discount,
premium or otherwise, and with special or other rights or privileges as
to redemption, surrender, drawings, allotment of or conversion into or
exchange for shares, attendance at general meetings of the Company, and
otherwise as the board determines at or before the time of issue.
PART 9 - SAFEGUARDING, INDEMNITY, ETC. OF DIRECTORS
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67. A director of the Company may be or become a director or officer of,
or otherwise interested in, any corporation promoted by the Company or in
which the Company is interested, as shareholder or otherwise, or any
corporation which owns or controls shares of the Company, and will not be
liable to account to the Company for any remuneration or other benefit
received by him as a director or officer of, or from his interest in,
such other corporation.
68. A director may hold any office or place of profit under the Company
in conjunction with his directorship for such period and on such
arrangement as to remuneration and otherwise as the board determines, and
no director or proposed director is disqualified by that relationship
from contracting with the Company either with regard to his tenure of
such other office or place of profit, or as vendor, purchaser or
otherwise, nor is a director so contracting or being so interested liable
to account to the Company for any profit realized by any such arrangement
or contract, by reason only that the director holds that office or of the
fiduciary relationship thereby established.
69. (1) The Company will indemnify every person who is or was a
director of the Company or is or was serving at the request of the
Company as a director of another corporation of which the Company is or
was a shareholder, and may to the extent that the board determines
indemnify any person who is or was an officer, employee or agent of the
Company or is or was serving at the request of the Company as the
officer, employee or agent of another corporation or partnership, joint
venture, trust or other enterprise, and the heirs and personal
representatives of any such person, against all costs, charges and
expenses actually incurred by him, including an amount paid to settle an
action or satisfy a judgment in a civil, criminal or administrative
action or proceeding whether brought by the Company, by such other
corporation, partnership, joint venture, trust or other enterprise, or by
any other person, and whether or not he is made a party by reason of his
having so been or having so served as a director, officer, employee or
agent, if
(a) he acted honestly and in good faith with a view to the best
interests of the Company or such other corporation,
partnership, joint venture, trust or other enterprise, and
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(b) in the case of a criminal or administrative action or
proceeding, he had reasonable grounds for believing that his
conduct was lawful.
(2) The Company may also indemnify any such person or any other
person in such other circumstances and to such extent as the law allows.
70. The indemnification provided by this Part is applicable only to the
extent that it does not duplicate any right, indemnity or reimbursement
which the person claiming such indemnification has received or will
receive otherwise than under this Part.
71. No director, and to the extent approved by the directors no officer,
employee or agent for the time being of the Company, will be liable for
the act, receipt, neglect or default of any other director, officer,
employee or agent, or for joining in any receipt or act for the sake of
conformity, or for any loss, damage or expense sustained or incurred by
the Company through the insufficiency or deficiency of title to any
property acquired for or on behalf of the Company, or for the
insufficiency or deficiency of any security in or upon which any of the
monies of or belonging to the Company are placed out or invested, or for
any loss or damage arising from the bankruptcy, insolvency or wrongful
act of any person, firm or corporation with whom or which any monies,
securities or effects are lodged or deposited, or for any other loss,
damage or misfortune whatever which may happen in the execution of the
duties of his office or trust or in relation thereto, unless the same
happens by or through his own wilful neglect or default.
72. The directors may rely upon the accuracy of any statement of fact
represented by an officer of the Company to be correct or upon statements
in a written report of the auditor of the Company, and will not be liable
for any loss or damage resulting from their authorizing payment of any
dividend or otherwise acting or declining to act in good faith in
reliance on any such statement.
73. The directors may cause the Company to purchase and maintain
insurance for the benefit of any person who is or may be entitled to
indemnification under Article 68 against any expense or liability from
which he is or may be so entitled to be indemnified and may secure such
right of indemnification by mortgage or other charge upon all or any part
of the real and personal property of the Company, and any action taken by
the board under this paragraph will not require approval or confirmation
by the members.
PART 10 - EXECUTION OF DOCUMENTS
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74. The board may adopt a common seal for the Company and may, from time
to time, adopt a new common seal and will provide for the safe custody of
the common seal.
75. The Company may have an official seal for use in any other province,
territory, state or country.
76. Neither the common seal nor an official seal will be impressed on
any document or instrument except
(a) pursuant to the authorization of a resolution of the board,
which authorization may extend to the sealing of a particular
document or instrument, one or more documents and instruments
meeting a description, or to all documents and instruments to
be executed under seal, or
(b) by the secretary or an assistant secretary for the purpose of
certifying copies of or extracts from the Memorandum or
Articles of the Company, minutes of meetings or resolutions of
the shareholders or board or committees of the board or any
instrument executed or issued by the Company.
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77. The signature of any officer or director of the Company, that is, by
authority of the board, printed, lithographed, engraved or otherwise
reproduced upon any instrument or document (including any negotiable
instrument) to be signed, executed or issued by the Company or by any of
its officers or directors, and any instrument or document on which the
signature of any such person is so reproduced, will be as valid as if the
signature had been affixed manually by such person, and will be so valid
notwithstanding that, at the time of the issue or delivery of the
instrument or document, the person whose signature is so reproduced is
deceased, has ceased to hold the office giving rise to his authority or
is otherwise incapacitated from personally signing such instrument or
document.
PART 11 - DIVIDENDS
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78. Except as otherwise provided by special rights or restrictions
attached to any shares, all dividends will be declared according to the
number of shares held.
79. Dividends may be paid out of any of the surplus accounts of the
Company.
80. No notice of the declaration of any dividend need be given to any
member, and no dividend will bear interest against the Company.
81. A resolution declaring a dividend may direct payment of the dividend
wholly or partly by the distribution of specific assets or of paid-up
shares, bonds, debentures or debenture stock of the Company, or in any
one or more such ways, and where any difficulty arises in regard to the
distribution, the board may settle the same as it thinks expedient, and
in particular may fix the value for distribution of specific assets, and
may determine that cash payments shall be made to members upon the
footing of the values so fixed or in lieu of fractional shares, bonds,
debentures or debenture stock, in order to adjust the rights of all
parties, and may vest any such specific assets in trustees upon such
trusts for the persons entitled as may seem expedient to the board.
82. The Company may retain the dividends payable on a share in respect
of which a fiduciary is entitled to become a member until the fiduciary
becomes the registered holder of such share.
83. Any dividend or other monies payable in cash in respect of a share
may be paid by cheque or warrant sent through the post to the registered
holder of the share in like manner as provided in these Articles for the
giving of notices, or to such person and to such address as the holder or
joint holders, as the case may be, in writing direct.
84. Any one of two or more joint holders may give effectual receipts for
any dividend or other monies payable or assets distributable in respect
of a share held by them as joint holders.
PART 12 - NOTICES
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85. A notice may be given or a document delivered by the Company to a
member or director, either personally or by sending it through the post
to him in a prepaid letter, envelope or wrapper addressed to the member
or director at his registered address.
86. Notice may be given or a document delivered by the Company to the
joint holders of a share by giving the notice or delivering the document
to the joint holder first named in the register of members in respect of
the share.
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87. A notice may be given or a document delivered by the Company to a
person claiming entitlement to a share in consequence of the death,
bankruptcy or mental infirmity of a member, by sending it through the
post in a prepaid letter, envelope or wrapper addressed to such person by
name, or by suitable title as representing the deceased, bankrupt or
mentally infirm member, at the address, if any, supplied to the Company
for the purpose by such person, or, until an address has been so
supplied, by giving the notice or delivering the document in any manner
in which the same might have been given or delivered if the death,
bankruptcy or mental infirmity had not occurred.
88. A notice or document sent through the post to or left at the
registered address of a member will, notwithstanding that the member is
then deceased and whether or not the Company or its agent has notice of
his decease, be deemed to have been duly given or delivered in respect of
any share registered in the name of the member and will for all purposes
of these Articles be deemed sufficiently given or delivered to his
personal representatives and to any person jointly interested with the
member in any such share.
PART 13 - PROHIBITION
---------------------
89. So long as the Company is a non-reporting Company, no shares may be
transferred except with the consent of the directors who may in their
absolute discretion refuse to register the transfer of any share and no
transfer shall be entered in the register of members without the prior
approval of the directors.
90. Subject to Article 90, and so long as the Company is a non-reporting
Company, no invitation will be made to the public to subscribe for any
share or securities of the Company and the number of members shall be
limited to fifty.
91. The directors of the Company may permit additional members to the
Company where exemptions under the appropriate securities law permit the
addition of further members without the issue of a prospectus.