EXHIBIT 3.2
THE COMPANIES LAW (REVISED)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
AMENDED
MEMORANDUM OF ASSOCIATION
OF
CHINA GRENTECH CORPORATION LIMITED
(adopted conditionally by special resolution passed on 25 August, 2005)
1. The name of the Company is CHINA GRENTECH CORPORATION LIMITED.
2. The Registered Office of the Company is situated at the offices of Codan
Trust Company (Cayman) Limited, Century Yard, Cricket Square, Hutchins
Drive, P.O. Box 2681GT, George Town, Grand Cayman, British West Indies.
3. The object for which the Company is established are unrestricted and shall
include, but without limitation:
(a) to act and to perform all the functions of a holding company in all its
branches and to co-ordinate the policy and administration of any subsidiary
company or companies wherever incorporated or carrying on business or of
any group of companies of which the Company or any subsidiary company is a
member or which are in any manner controlled directly or indirectly by the
Company;
(b) to act as an investment company and for that purpose to acquire and
hold upon any terms and, either in the name of the Company or that of any
nominee, shares, stock, debentures, debenture stock, annuities, notes,
mortgages, bonds, obligations and securities, foreign exchange, foreign
currency deposits and commodities, issued or guaranteed by any company
wherever incorporated or carrying on business, or by any government,
sovereign, ruler, commissioners, public body or authority, supreme,
municipal, local or otherwise, by original subscription, tender, purchase,
exchange, underwriting, participation in syndicates or in any other manner
and whether or not fully paid up, and to make payments thereon as called up
or in advance of calls or otherwise and to subscribe for the same, whether
conditionally or absolutely, and to hold the same with a view to
investment, but with the power to vary any investments, and to exercise and
enforce all rights and powers conferred by or incident to the ownership
thereof, and to invest and deal with the moneys of the Company not
immediately required upon such securities and in such manner as may be from
time to time determined.
4. The liability of each Shareholder is limited to the amount from time to
time unpaid on such Share(s) registered under the name of such Shareholder.
5. The authorised share capital of the Company is US$50,000 divided into
2,500,000,000 shares of US$0.00002 each.
6. The Company may amend this Memorandum of Association by a resolution of
Shareholders in accordance with the relevant provisions of the Articles of
Association.
7. Capitalised terms that are not defined in this Memorandum of Association
bear the same meanings as those given in the Articles of Association of the
Company.
THE COMPANIES LAW (REVISED)
COMPANY LIMITED BY SHARES
THE AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
OF
CHINA GRENTECH CORPORATION LIMITED
(Adopted conditionally by way of a special resolution passed on 25 August, 2005)
INDEX
SUBJECT Article No.
- ------- -----------
Table A 1
Interpretation 2
Share Capital 3
Alteration Of Capital 4-7
Share Rights 8-9
Variation Of Rights 10-11
Shares 12-15
Share Certificates 16-21
Lien 22-24
Calls On Shares 25-33
Forfeiture Of Shares 34-42
Register Of Members 43-44
Record Dates 45
Transfer Of Shares 46-51
Transmission Of Shares 52-54
Untraceable Members 55
General Meetings 56-58
Notice Of General Meetings 59-60
Proceedings At General Meetings 61-65
Voting 66-77
Proxies 78-83
Corporations Acting By Representatives 84
No Action By Written Resolutions Of Members 85
Board Of Directors 86
Retirement of Directors 87-88
Disqualification Of Directors 89
Executive Directors 90-91
Alternate Directors 92-95
Directors' Fees And Expenses 96
Directors' Interests 97-100
General Powers Of The Directors 101-106
Borrowing Powers 107-110
Proceedings Of The Directors 111-120
Audit Committee 121-123
Officers 124-127
Register of Directors and Officers 128
Minutes 129
Seal 130
Authentication Of Documents 131
Destruction Of Documents 132
Dividends And Other Payments 133-142
Reserves 143
Capitalisation 144-145
Subscription Rights Reserve 146
Accounting Records 147-151
Audit 152-157
Notices 158-160
-ii-
Signatures 161
Winding Up 162-163
Indemnity 164
Amendment To Memorandum and Articles of Association
And Name of Company 165
Information 166
-iii-
INTERPRETATION
TABLE A
1. The regulations in Table A in the Schedule to the Companies Law (Revised) do
not apply to the Company.
INTERPRETATION
2. (1) In these Articles, unless the context otherwise requires, the words
standing in the first column of the following table shall bear the meaning set
opposite them respectively in the second column.
WORD MEANING
---- -------
"Audit Committee" the audit committee of the Company formed by the
Board pursuant to Article 121 hereof, or any
successor audit committee.
"Auditor" the independent auditor of the Company which shall
be an internationally recognized firm of
independent accountants.
"Articles" these Articles in their present form or as
supplemented or amended or substituted from time
to time.
"Board" or "Directors" the board of directors of the Company or the
directors present at a meeting of directors of the
Company at which a quorum is present.
"capital" the share capital from time to time of the Company.
"clear days" in relation to the period of a notice, that period
excluding the day when the notice is given or
deemed to be given and the day for which it is
given or on which it is to take effect.
"clearing house" a clearing house recognised by the laws of the
jurisdiction in which the shares of the Company
(or depositary receipts therefor) are listed or
quoted on a stock exchange or interdealer
quotation system in such jurisdiction.
"Company" China GrenTech Corporation Limited.
"competent regulatory a competent regulatory authority in the territory
authority" where the shares of the Company (or depositary
receipts therefor) are listed or quoted on a stock
exchange or interdealer quotation system in such
territory.
-1-
"debenture" and include debenture stock and debenture stockholder
"debenture holder" respectively.
"Designated Stock the National Market of The Nasdaq Stock Market,
Exchange" Inc.
"dollars" and "$" dollars, the legal currency of the United States
of America.
"Exchange Act" the Securities Exchange Act of 1934, as amended.
"head office" such office of the Company as the Directors may
from time to time determine to be the principal
office of the Company.
"Law" The Companies Law, Cap. 22 (Law 3 of 1961, as
consolidated and revised) of the Cayman Islands.
"Member" a duly registered holder from time to time of the
shares in the capital of the Company.
"month" a calendar month.
"NASD" National Association of Securities Dealers.
"NASD Rules" the rules set forth in the NASD Manual.
"Notice" written notice unless otherwise specifically
stated and as further defined in these Articles.
"Office" the registered office of the Company for the time
being.
"ordinary resolution" a resolution shall be an ordinary resolution when
it has been passed by a simple majority of votes
cast by such Members as, being entitled so to do,
vote in person or, in the case of any Member being
a corporation, by its duly authorised
representative or, where proxies are allowed, by
proxy at a general meeting of which not less than
ten (10) clear days' Notice has been duly given;
"paid up" paid up or credited as paid up.
"Register" the principal register and where applicable, any
branch register of Members of the Company to be
maintained at such place within or outside the
Cayman Islands as the Board shall determine from
time to time.
"Registration Office" in respect of any class of share capital such
place as the Board may from time to time determine
to keep a branch register of Members in respect of
that class of share
-2-
capital and where (except in cases where the Board
otherwise directs) the transfers or other
documents of title for such class of share capital
are to be lodged for registration and are to be
registered.
"SEC" the United States Securities and Exchange
Commission.
"Seal" common seal or any one or more duplicate seals of
the Company (including a securities seal) for use
in the Cayman Islands or in any place outside the
Cayman Islands.
"Secretary" any person, firm or corporation appointed by the
Board to perform any of the duties of secretary of
the Company and includes any assistant, deputy,
temporary or acting secretary.
"special resolution" a resolution shall be a special resolution when it
has been passed by a majority of not less than
two-thirds of votes cast by such Members as, being
entitled so to do, vote in person or, in the case
of such Members as are corporations, by their
respective duly authorised representative or,
where proxies are allowed, by proxy at a general
meeting of which not less than ten (10) clear
days' Notice, specifying (without prejudice to the
power contained in these Articles to amend the
same) the intention to propose the resolution as a
special resolution, has been duly given. Provided
that, except in the case of an annual general
meeting, if it is so agreed by a majority in
number of the Members having the right to attend
and vote at any such meeting, being a majority
together holding not less than ninety-five (95)
per cent. in nominal value of the shares giving
that right and in the case of an annual general
meeting, if it is so agreed by all Members
entitled to attend and vote thereat, a resolution
may be proposed and passed as a special resolution
at a meeting of which less than ten (10) clear
days' Notice has been given;
a special resolution shall be effective for any
purpose for which an ordinary resolution is
expressed to be required under any provision of
these Articles or the Statutes.
"Statutes" the Law and every other law of the Legislature of
the Cayman Islands for the time being in force
applying to or affecting the Company, its
Memorandum of Association and/or these Articles.
"year" a calendar year.
-3-
(2) In these Articles, unless there be something within the subject or
context inconsistent with such construction:
(a) words importing the singular include the plural and vice versa;
(b) words importing a gender include both gender and the neuter;
(c) words importing persons include companies, associations and bodies of
persons whether corporate or not;
(d) the words:
(i) "may" shall be construed as permissive;
(ii) "shall" or "will" shall be construed as imperative;
(e) expressions referring to writing shall, unless the contrary intention
appears, be construed as including printing, lithography, photography
and other modes of representing words or figures in a visible form,
and including where the representation takes the form of electronic
display, provided that both the mode of service of the relevant
document or notice and the Member's election comply with all
applicable Statutes, rules and regulations;
(f) references to any law, ordinance, statute or statutory provision shall
be interpreted as relating to any statutory modification or
re-enactment thereof for the time being in force;
(g) save as aforesaid words and expressions defined in the Statutes shall
bear the same meanings in these Articles if not inconsistent with the
subject in the context;
(h) references to a document being executed include references to it being
executed under hand or under seal or by electronic signature or by any
other method and references to a notice or document include a notice
or document recorded or stored in any digital, electronic, electrical,
magnetic or other retrievable form or medium and information in
visible form whether having physical substance or not.
SHARE CAPITAL
3. (1) The share capital of the Company at the date on which these Articles come
into effect shall be divided into shares of a par value of $0.00002 each.
(2) Subject to the Law, the Company's Memorandum and Articles of
Association and, where applicable, the rules of the Designated Stock Exchange
and/or any competent regulatory authority, any power of the Company to purchase
or otherwise acquire its own shares shall be exercisable by the Board in such
manner, upon such terms and subject to such conditions as it thinks fit.
-4-
(3) No share shall be issued to bearer.
ALTERATION OF CAPITAL
4. The Company may from time to time by ordinary resolution in accordance with
the Law alter the conditions of its Memorandum of Association to:
(a) increase its capital by such sum, to be divided into shares of such
amounts, as the resolution shall prescribe;
(b) consolidate and divide all or any of its capital into shares of larger
amount than its existing shares;
(c) without prejudice to the powers of the Board under Article 12, divide
its shares into several classes and without prejudice to any special
rights previously conferred on the holders of existing shares attach
thereto respectively any preferential, deferred, qualified or special
rights, privileges, conditions or such restrictions which in the
absence of any such determination by the Company in general meeting,
as the Directors may determine provided always that, for the avoidance
of doubt, where a class of shares has been authorized by the Company
no resolution of the Company in general meeting is required for the
issuance of shares of that class and the Directors may issue shares of
that class and determine such rights, privileges, conditions or
restrictions attaching thereto as aforesaid, and further provided that
where the Company issues shares which do not carry voting rights, the
words "non-voting" shall appear in the designation of such shares and
where the equity capital includes shares with different voting rights,
the designation of each class of shares, other than those with the
most favourable voting rights, must include the words "restricted
voting" or "limited voting";
(d) sub-divide its shares, or any of them, into shares of smaller amount
than is fixed by the Memorandum of Association (subject, nevertheless,
to the Law), and may by such resolution determine that, as between the
holders of the shares resulting from such sub-division, one or more of
the shares may have any such preferred, deferred or other rights or be
subject to any such restrictions as compared with the other or others
as the Company has power to attach to unissued or new shares;
(e) cancel any shares which, at the date of the passing of the resolution,
have not been taken, or agreed to be taken, by any person, and
diminish the amount of its capital by the amount of the shares so
cancelled or, in the case of shares, without par value, diminish the
number of shares into which its capital is divided.
5. The Board may settle as it considers expedient any difficulty which arises in
relation to any consolidation and division under the last preceding Article and
in particular but without prejudice to the generality of the foregoing may issue
certificates in respect of fractions of shares or arrange for the sale of the
shares representing fractions and the distribution of the net proceeds of sale
(after deduction of the expenses of such sale) in due proportion amongst the
Members who would have been entitled to the fractions, and for this purpose the
Board may
-5-
authorise some person to transfer the shares representing fractions to their
purchaser or resolve that such net proceeds be paid to the Company for the
Company's benefit. Such purchaser will not be bound to see to the application of
the purchase money nor will his title to the shares be affected by any
irregularity or invalidity in the proceedings relating to the sale.
6. The Company may from time to time by special resolution, subject to any
confirmation or consent required by the Law, reduce its share capital or any
capital redemption reserve or other undistributable reserve in any manner
permitted by law.
7. Except so far as otherwise provided by the conditions of issue, or by these
Articles, any capital raised by the creation of new shares shall be treated as
if it formed part of the original capital of the Company, and such shares shall
be subject to the provisions contained in these Articles with reference to the
payment of calls and instalments, transfer and transmission, forfeiture, lien,
cancellation, surrender, voting and otherwise.
SHARE RIGHTS
8. Subject to the provisions of the Law, the rules of the Designated Stock
Exchange and the Memorandum and Articles of Association and to any special
rights conferred on the holders of any shares or class of shares, and without
prejudice to Article 12 hereof, any share in the Company (whether forming part
of the present capital or not) may be issued with or have attached thereto such
rights or restrictions whether in regard to dividend, voting, return of capital
or otherwise as the Board may determine, including without limitation on terms
that they may be, or at the option of the Company or the holder are, liable to
be redeemed on such terms and in such manner, including out of capital, as the
Board may deem fit.
9. Subject to the Law, any preferred shares may be issued or converted into
shares that, at a determinable date or at the option of the Company or the
holder if so authorised by its Memorandum of Association, are liable to be
redeemed on such terms and in such manner as the Company before the issue or
conversion may by ordinary resolution of the Members determine. Where the
Company purchases for redemption a redeemable share, purchases not made through
the market or by tender shall be limited to a maximum price as may from time to
time be determined by the Board, either generally or with regard to specific
purchases. If purchases are by tender, tenders shall comply with applicable
laws.
VARIATION OF RIGHTS
10. Subject to the Law and without prejudice to Article 8, all or any of the
special rights for the time being attached to the shares or any class of shares
may, unless otherwise provided by the terms of issue of the shares of that
class, from time to time (whether or not the Company is being wound up) be
varied, modified or abrogated with the sanction of a special resolution passed
at a separate general meeting of the holders of the shares of that class. To
every such separate general meeting all the provisions of these Articles
relating to general meetings of the Company shall, mutatis mutandis, apply, but
so that:
(a) the necessary quorum (whether at a separate general meeting or at its
adjourned meeting) shall be a person or persons (or in the case of a
Member being a corporation, its duly authorized representative)
together holding or representing
-6-
by proxy not less than one-third in nominal value of the issued shares
of that class;
(b) every holder of shares of the class shall be entitled on a poll to one
vote for every such share held by him; and
(c) any holder of shares of the class present in person or by proxy or
authorised representative may demand a poll.
11. The special rights conferred upon the holders of any shares or class of
shares shall not, unless otherwise expressly provided in the rights attaching to
or the terms of issue of such shares, be deemed to be varied, modified or
abrogated by the creation or issue of further shares ranking pari passu
therewith.
SHARES
12. (1) Subject to the Law, these Articles and, where applicable, the rules of
the Designated Stock Exchange and without prejudice to any special rights or
restrictions for the time being attached to any shares or any class of shares,
the unissued shares of the Company (whether forming part of the original or any
increased capital) shall be at the disposal of the Board, which may offer,
allot, grant options over or otherwise dispose of them to such persons, at such
times and for such consideration and upon such terms and conditions as the Board
may in its absolute discretion determine but so that no shares shall be issued
at a discount. In particular and without prejudice to the generality of the
foregoing, the Board is hereby empowered to authorize by resolution or
resolutions from time to time the issuance of one or more classes or series of
preferred shares and to fix the designations, powers, preferences and relative,
participating, optional and other rights, if any, and the qualifications,
limitations and restrictions thereof, if any, including, without limitation, the
number of shares constituting each such class or series, dividend rights,
conversion rights, redemption privileges, voting powers, full or limited or no
voting powers, and liquidation preferences, and to increase or decrease the size
of any such class or series (but not below the number of shares of any class or
series of preferred shares then outstanding) to the extent permitted by Law.
Without limiting the generality of the foregoing, the resolution or resolutions
providing for the establishment of any class or series of preferred shares may,
to the extent permitted by law, provide that such class or series shall be
superior to, rank equally with or be junior to the preferred shares of any other
class or series.
(2) Neither the Company nor the Board shall be obliged, when making or
granting any allotment of, offer of, option over or disposal of shares, to make,
or make available, any such allotment, offer, option or shares to Members or
others with registered addresses in any particular territory or territories
being a territory or territories where, in the absence of a registration
statement or other special formalities, this would or might, in the opinion of
the Board, be unlawful or impracticable. Members affected as a result of the
foregoing sentence shall not be, or be deemed to be, a separate class of members
for any purpose whatsoever. Except as otherwise expressly provided in the
resolution or resolutions providing for the establishment of any class or series
of preferred shares, no vote of the holders of preferred shares of or ordinary
shares shall be a prerequisite to the issuance of any shares of any class or
series of the preferred shares authorized by and complying with the conditions
of the Memorandum and Articles of Association.
-7-
(3) The Board may issue options, warrants or convertible securities or
securities of similar nature conferring the right upon the holders thereof to
subscribe for, purchase or receive any class of shares or securities in the
capital of the Company on such terms as it may from time to time determine.
13. The Company may in connection with the issue of any shares exercise all
powers of paying commission and brokerage conferred or permitted by the Law.
Subject to the Law, the commission may be satisfied by the payment of cash or by
the allotment of fully or partly paid shares or partly in one and partly in the
other.
14. Except as required by law, no person shall be recognised by the Company as
holding any share upon any trust and the Company shall not be bound by or
required in any way to recognise (even when having notice thereof) any
equitable, contingent, future or partial interest in any share or any fractional
part of a share or (except only as otherwise provided by these Articles or by
law) any other rights in respect of any share except an absolute right to the
entirety thereof in the registered holder.
15. Subject to the Law and these Articles, the Board may at any time after the
allotment of shares but before any person has been entered in the Register as
the holder, recognise a renunciation thereof by the allottee in favour of some
other person and may accord to any allottee of a share a right to effect such
renunciation upon and subject to such terms and conditions as the Board
considers fit to impose.
SHARE CERTIFICATES
16. Every share certificate shall be issued under the Seal or a facsimile
thereof and shall specify the number and class and distinguishing numbers (if
any) of the shares to which it relates, and the amount paid up thereon and may
otherwise be in such form as the Directors may from time to time determine. No
certificate shall be issued representing shares of more than one class. The
Board may by resolution determine, either generally or in any particular case or
cases, that any signatures on any such certificates (or certificates in respect
of other securities) need not be autographic but may be affixed to such
certificates by some mechanical means or may be printed thereon.
17. (1) In the case of a share held jointly by several persons, the Company
shall not be bound to issue more than one certificate therefor and delivery of a
certificate to one of several joint holders shall be sufficient delivery to all
such holders.
(2) Where a share stands in the names of two or more persons, the person
first named in the Register shall as regards service of notices and, subject to
the provisions of these Articles, all or any other matters connected with the
Company, except the transfer of the shares, be deemed the sole holder thereof.
18. Every person whose name is entered, upon an allotment of shares, as a Member
in the Register shall be entitled, without payment, to receive one certificate
for all such shares of any one class or several certificates each for one or
more of such shares of such class upon payment for every certificate after the
first of such reasonable out-of-pocket expenses as the Board from time to time
determines.
-8-
19. Share certificates shall be issued within the relevant time limit as
prescribed by the Law or as the Designated Stock Exchange may from time to time
determine, whichever is the shorter, after allotment or, except in the case of a
transfer which the Company is for the time being entitled to refuse to register
and does not register, after lodgment of a transfer with the Company.
20. (1) Upon every transfer of shares the certificate held by the transferor
shall be given up to be cancelled, and shall forthwith be cancelled accordingly,
and a new certificate shall be issued to the transferee in respect of the shares
transferred to him at such fee as is provided in paragraph (2) of this Article.
If any of the shares included in the certificate so given up shall be retained
by the transferor a new certificate for the balance shall be issued to him at
the aforesaid fee payable by the transferor to the Company in respect thereof.
(2) The fee referred to in paragraph (1) above shall be an amount not
exceeding the relevant maximum amount as the Designated Stock Exchange may from
time to time determine provided that the Board may at any time determine a lower
amount for such fee.
21. If a share certificate shall be damaged or defaced or alleged to have been
lost, stolen or destroyed a new certificate representing the same shares may be
issued to the relevant Member upon request and on payment of such fee as the
Company may determine and, subject to compliance with such terms (if any) as to
evidence and indemnity and to payment of the costs and reasonable out-of-pocket
expenses of the Company in investigating such evidence and preparing such
indemnity as the Board may think fit and, in case of damage or defacement, on
delivery of the old certificate to the Company provided always that where share
warrants have been issued, no new share warrant shall be issued to replace one
that has been lost unless the Board has determined that the original has been
destroyed.
LIEN
22. The Company shall have a first and paramount lien on every share (not being
a fully paid share) for all moneys (whether presently payable or not) called or
payable at a fixed time in respect of that share. The Company shall also have a
first and paramount lien on every share (not being a fully paid share)
registered in the name of a Member (whether or not jointly with other Members)
for all amounts of money presently payable by such Member or his estate to the
Company whether the same shall have been incurred before or after notice to the
Company of any equitable or other interest of any person other than such member,
and whether the period for the payment or discharge of the same shall have
actually arrived or not, and notwithstanding that the same are joint debts or
liabilities of such Member or his estate and any other person, whether a Member
of the Company or not. The Company's lien on a share shall extend to all
dividends or other moneys payable thereon or in respect thereof. The Board may
at any time, generally or in any particular case, waive any lien that has arisen
or declare any share exempt in whole or in part, from the provisions of this
Article.
23. Subject to these Articles, the Company may sell in such manner as the Board
determines any share on which the Company has a lien, but no sale shall be made
unless some sum in respect of which the lien exists is presently payable, or the
liability or engagement in respect of which such lien exists is liable to be
presently fulfilled or discharged nor until the expiration of fourteen (14)
clear days after a notice in writing, stating and demanding payment
-9-
of the sum presently payable, or specifying the liability or engagement and
demanding fulfilment or discharge thereof and giving notice of the intention to
sell in default, has been served on the registered holder for the time being of
the share or the person entitled thereto by reason of his death or bankruptcy.
24. The net proceeds of the sale shall be received by the Company and applied in
or towards payment or discharge of the debt or liability in respect of which the
lien exists, so far as the same is presently payable, and any residue shall
(subject to a like lien for debts or liabilities not presently payable as
existed upon the share prior to the sale) be paid to the person entitled to the
share at the time of the sale. To give effect to any such sale the Board may
authorise some person to transfer the shares sold to the purchaser thereof. The
purchaser shall be registered as the holder of the shares so transferred and he
shall not be bound to see to the application of the purchase money, nor shall
his title to the shares be affected by any irregularity or invalidity in the
proceedings relating to the sale.
CALLS ON SHARES
25. Subject to these Articles and to the terms of allotment, the Board may from
time to time make calls upon the Members in respect of any moneys unpaid on
their shares (whether on account of the nominal value of the shares or by way of
premium), and each Member shall (subject to being given at least fourteen (14)
clear days' Notice specifying the time and place of payment) pay to the Company
as required by such notice the amount called on his shares. A call may be
extended, postponed or revoked in whole or in part as the Board determines but
no member shall be entitled to any such extension, postponement or revocation
except as a matter of grace and favour.
26. A call shall be deemed to have been made at the time when the resolution of
the Board authorising the call was passed and may be made payable either in one
lump sum or by instalments.
27. A person upon whom a call is made shall remain liable for calls made upon
him notwithstanding the subsequent transfer of the shares in respect of which
the call was made. The joint holders of a share shall be jointly and severally
liable to pay all calls and instalments due in respect thereof or other moneys
due in respect thereof.
28. If a sum called in respect of a share is not paid before or on the day
appointed for payment thereof, the person from whom the sum is due shall pay
interest on the amount unpaid from the day appointed for payment thereof to the
time of actual payment at such rate (not exceeding twenty per cent. (20%) per
annum) as the Board may determine, but the Board may in its absolute discretion
waive payment of such interest wholly or in part.
29. No Member shall be entitled to receive any dividend or bonus or to be
present and vote (save as proxy for another Member) at any general meeting
either personally or by proxy, or be reckoned in a quorum, or exercise any other
privilege as a Member until all calls or instalments due by him to the Company,
whether alone or jointly with any other person, together with interest and
expenses (if any) shall have been paid.
30. On the trial or hearing of any action or other proceedings for the recovery
of any money due for any call, it shall be sufficient to prove that the name of
the Member sued is
-10-
entered in the Register as the holder, or one of the holders, of the shares in
respect of which such debt accrued, that the resolution making the call is duly
recorded in the minute book, and that notice of such call was duly given to the
Member sued, in pursuance of these Articles; and it shall not be necessary to
prove the appointment of the Directors who made such call, nor any other matters
whatsoever, but the proof of the matters aforesaid shall be conclusive evidence
of the debt.
31. Any amount payable in respect of a share upon allotment or at any fixed
date, whether in respect of nominal value or premium or as an instalment of a
call, shall be deemed to be a call duly made and payable on the date fixed for
payment and if it is not paid the provisions of these Articles shall apply as if
that amount had become due and payable by virtue of a call duly made and
notified.
32. On the issue of shares the Board may differentiate between the allottees or
holders as to the amount of calls to be paid and the times of payment.
33. The Board may, if it thinks fit, receive from any Member willing to advance
the same, and either in money or money's worth, all or any part of the moneys
uncalled and unpaid or instalments payable upon any shares held by him and upon
all or any of the moneys so advanced (until the same would, but for such
advance, become presently payable) pay interest at such rate (if any) as the
Board may decide. The Board may at any time repay the amount so advanced upon
giving to such Member not less than one month's Notice of its intention in that
behalf, unless before the expiration of such notice the amount so advanced shall
have been called up on the shares in respect of which it was advanced. Such
payment in advance shall not entitle the holder of such share or shares to
participate in respect thereof in a dividend subsequently declared.
FORFEITURE OF SHARES
34. (1) If a call remains unpaid after it has become due and payable the Board
may give to the person from whom it is due not less than fourteen (14) clear
days' Notice:
(a) requiring payment of the amount unpaid together with any interest
which may have accrued and which may still accrue up to the date of
actual payment; and
(b) stating that if the Notice is not complied with the shares on which
the call was made will be liable to be forfeited.
(2) If the requirements of any such Notice are not complied with, any share
in respect of which such Notice has been given may at any time thereafter,
before payment of all calls and interest due in respect thereof has been made,
be forfeited by a resolution of the Board to that effect, and such forfeiture
shall include all dividends and bonuses declared in respect of the forfeited
share but not actually paid before the forfeiture.
35. When any share has been forfeited, notice of the forfeiture shall be served
upon the person who was before forfeiture the holder of the share. No forfeiture
shall be invalidated by any omission or neglect to give such Notice.
-11-
36. The Board may accept the surrender of any share liable to be forfeited
hereunder and, in such case, references in these Articles to forfeiture will
include surrender.
37. Any share so forfeited shall be deemed the property of the Company and may
be sold, re-allotted or otherwise disposed of to such person, upon such terms
and in such manner as the Board determines, and at any time before a sale,
re-allotment or disposition the forfeiture may be annulled by the Board on such
terms as the Board determines.
38. A person whose shares have been forfeited shall cease to be a Member in
respect of the forfeited shares but nevertheless shall remain liable to pay the
Company all moneys which at the date of forfeiture were presently payable by him
to the Company in respect of the shares, with (if the Directors shall in their
discretion so require) interest thereon from the date of forfeiture until
payment at such rate (not exceeding twenty per cent. (20%) per annum) as the
Board determines. The Board may enforce payment thereof if it thinks fit, and
without any deduction or allowance for the value of the forfeited shares, at the
date of forfeiture, but his liability shall cease if and when the Company shall
have received payment in full of all such moneys in respect of the shares. For
the purposes of this Article any sum which, by the terms of issue of a share, is
payable thereon at a fixed time which is subsequent to the date of forfeiture,
whether on account of the nominal value of the share or by way of premium, shall
notwithstanding that time has not yet arrived be deemed to be payable at the
date of forfeiture, and the same shall become due and payable immediately upon
the forfeiture, but interest thereon shall only be payable in respect of any
period between the said fixed time and the date of actual payment.
39. A declaration by a Director or the Secretary that a share has been forfeited
on a specified date shall be conclusive evidence of the facts therein stated as
against all persons claiming to be entitled to the share, and such declaration
shall (subject to the execution of an instrument of transfer by the Company if
necessary) constitute a good title to the share, and the person to whom the
share is disposed of shall be registered as the holder of the share and shall
not be bound to see to the application of the consideration (if any), nor shall
his title to the share be affected by any irregularity in or invalidity of the
proceedings in reference to the forfeiture, sale or disposal of the share. When
any share shall have been forfeited, notice of the declaration shall be given to
the Member in whose name it stood immediately prior to the forfeiture, and an
entry of the forfeiture, with the date thereof, shall forthwith be made in the
register, but no forfeiture shall be in any manner invalidated by any omission
or neglect to give such notice or make any such entry.
40. Notwithstanding any such forfeiture as aforesaid the Board may at any time,
before any shares so forfeited shall have been sold, re-allotted or otherwise
disposed of, permit the shares forfeited to be bought back upon the terms of
payment of all calls and interest due upon and expenses incurred in respect of
the share, and upon such further terms (if any) as it thinks fit.
41. The forfeiture of a share shall not prejudice the right of the Company to
any call already made or instalment payable thereon.
42. The provisions of these Articles as to forfeiture shall apply in the case of
non-payment of any sum which, by the terms of issue of a share, becomes payable
at a fixed time, whether on account of the nominal value of the share or by way
of premium, as if the same had been payable by virtue of a call duly made and
notified.
-12-
REGISTER OF MEMBERS
43. (1) The Company shall keep in one or more books a Register of its Members
and shall enter therein the following particulars, that is to say:
(a) the name and address of each Member, the number and class of shares
held by him and the amount paid or agreed to be considered as paid on
such shares;
(b) the date on which each person was entered in the Register; and
(c) the date on which any person ceased to be a Member.
(2) The Company may keep an overseas or local or other branch register of
Members resident in any place, and the Board may make and vary such regulations
as it determines in respect of the keeping of any such register and maintaining
a Registration Office in connection therewith.
44. The Register and branch register of Members, as the case may be, shall be
open to inspection for such times and on such days as the Board shall determine
by Members without charge or by any other person, upon a maximum payment of
$2.50 or such other sum specified by the Board, at the Office or such other
place at which the Register is kept in accordance with the Law or, if
appropriate, upon a maximum payment of $1.00 or such other sum specified by the
Board at the Registration Office. The Register including any overseas or local
or other branch register of Members may, after notice has been given by
advertisement in an appointed newspaper or any other newspapers in accordance
with the requirements of the Designated Stock Exchange or by any electronic
means in such manner as may be accepted by the Designated Stock Exchange to that
effect, be closed at such times or for such periods not exceeding in the whole
thirty (30) days in each year as the Board may determine and either generally or
in respect of any class of shares.
-13-
RECORD DATES
45. For the purpose of determining the Members entitled to notice of or to vote
at any general meeting, or any adjournment thereof, or entitled to express
consent to corporate action in writing without a meeting, or entitled to receive
payment of any dividend or other distribution or allotment of any rights, or
entitled to exercise any rights in respect of any change, conversion or exchange
of shares or for the purpose of any other lawful action, the Board may fix, in
advance, a date as the record date for any such determination of Members, which
date shall not be more than sixty (60) days nor less than ten (10) days before
the date of such meeting, nor more than sixty (60) days prior to any other such
action.
If the Board does not fix a record date for any general meeting, the
record date for determining the Members entitled to a notice of or to vote at
such meeting shall be at the close of business on the day next preceding the day
on which notice is given, or, if in accordance with these Articles notice is
waived, at the close of business on the day next preceding the day on which the
meeting is held. If corporate action without a general meeting is to be taken,
the record date for determining the Members entitled to express consent to such
corporate action in writing, when no prior action by the Board is necessary,
shall be the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the Company by delivery to
its head office. The record date for determining the Members for any other
purpose shall be at the close of business on the day on which the Board adopts
the resolution relating thereto.
A determination of the Members of record entitled to notice of or to
vote at a meeting of the Members shall apply to any adjournment of the meeting;
provided, however, that the Board may fix a new record date for the adjourned
meeting.
TRANSFER OF SHARES
46. Subject to these Articles, any Member may transfer all or any of his shares
by an instrument of transfer in the usual or common form or in a form prescribed
by the Designated Stock Exchange or in any other form approved by the Board and
may be under hand or, if the transferor or transferee is a clearing house or its
nominee(s), by hand or by machine imprinted signature or by such other manner of
execution as the Board may approve from time to time.
47. The instrument of transfer shall be executed by or on behalf of the
transferor and the transferee provided that the Board may dispense with the
execution of the instrument of transfer by the transferee in any case which it
thinks fit in its discretion to do so. Without prejudice to the last preceding
Article, the Board may also resolve, either generally or in any particular case,
upon request by either the transferor or transferee, to accept mechanically
executed transfers. The transferor shall be deemed to remain the holder of the
share until the name of the transferee is entered in the Register in respect
thereof. Nothing in these Articles shall preclude the Board from recognising a
renunciation of the allotment or provisional allotment of any share by the
allottee in favour of some other person.
48. (1) The Board may, in its absolute discretion, and without giving any reason
therefor, refuse to register a transfer of any share (not being a fully paid up
share) to a person of whom it does not approve, or any share issued under any
share incentive scheme for employees upon which a restriction on transfer
imposed thereby still subsists, and it may also, without
-14-
prejudice to the foregoing generality, refuse to register a transfer of any
share to more than four joint holders or a transfer of any share (not being a
fully paid up share) on which the Company has a lien.
(2) The Board in so far as permitted by any applicable law may, in its
absolute discretion, at any time and from time to time transfer any share upon
the Register to any branch register or any share on any branch register to the
Register or any other branch register. In the event of any such transfer, the
shareholder requesting such transfer shall bear the cost of effecting the
transfer unless the Board otherwise determines.
(3) Unless the Board otherwise agrees (which agreement may be on such terms
and subject to such conditions as the Board in its absolute discretion may from
time to time determine, and which agreement the Board shall, without giving any
reason therefor, be entitled in its absolute discretion to give or withhold), no
shares upon the Register shall be transferred to any branch register nor shall
shares on any branch register be transferred to the Register or any other branch
register and all transfers and other documents of title shall be lodged for
registration, and registered, in the case of any shares on a branch register, at
the relevant Registration Office, and, in the case of any shares on the
Register, at the Office or such other place at which the Register is kept in
accordance with the Law.
49. Without limiting the generality of the last preceding Article, the Board may
decline to recognise any instrument of transfer unless:-
(a) a fee of such maximum sum as the Designated Stock Exchange may
determine to be payable or such lesser sum as the Board may from time
to time require is paid to the Company in respect thereof;
(b) the instrument of transfer is in respect of only one class of share;
(c) the instrument of transfer is lodged at the Office or such other place
at which the Register is kept in accordance with the Law or the
Registration Office (as the case may be) accompanied by the relevant
share certificate(s) and such other evidence as the Board may
reasonably require to show the right of the transferor to make the
transfer (and, if the instrument of transfer is executed by some other
person on his behalf, the authority of that person so to do); and
(d) if applicable, the instrument of transfer is duly and properly
stamped.
50. If the Board refuses to register a transfer of any share, it shall, within
two months after the date on which the transfer was lodged with the Company,
send to each of the transferor and transferee notice of the refusal.
51. The registration of transfers of shares or of any class of shares may, after
notice has been given by advertisement in an appointed newspaper or any other
newspapers or by any other means in accordance with the requirements of the
Designated Stock Exchange to that effect be suspended at such times and for such
periods (not exceeding in the whole thirty (30) days in any year) as the Board
may determine.
-15-
TRANSMISSION OF SHARES
52. If a Member dies, the survivor or survivors where the deceased was a joint
holder, and his legal personal representatives where he was a sole or only
surviving holder, will be the only persons recognised by the Company as having
any title to his interest in the shares; but nothing in this Article will
release the estate of a deceased Member (whether sole or joint) from any
liability in respect of any share which had been solely or jointly held by him.
53. Any person becoming entitled to a share in consequence of the death or
bankruptcy or winding-up of a Member may, upon such evidence as to his title
being produced as may be required by the Board, elect either to become the
holder of the share or to have some person nominated by him registered as the
transferee thereof. If he elects to become the holder he shall notify the
Company in writing either at the Registration Office or Office, as the case may
be, to that effect. If he elects to have another person registered he shall
execute a transfer of the share in favour of that person. The provisions of
these Articles relating to the transfer and registration of transfers of shares
shall apply to such notice or transfer as aforesaid as if the death or
bankruptcy of the Member had not occurred and the notice or transfer were a
transfer signed by such Member.
54. A person becoming entitled to a share by reason of the death or bankruptcy
or winding-up of a Member shall be entitled to the same dividends and other
advantages to which he would be entitled if he were the registered holder of the
share. However, the Board may, if it thinks fit, withhold the payment of any
dividend payable or other advantages in respect of such share until such person
shall become the registered holder of the share or shall have effectually
transferred such share, but, subject to the requirements of Article 75(2) being
met, such a person may vote at meetings.
UNTRACEABLE MEMBERS
55. (1) Without prejudice to the rights of the Company under paragraph (2) of
this Article, the Company may cease sending cheques for dividend entitlements or
dividend warrants by post if such cheques or warrants have been left uncashed on
two consecutive occasions. However, the Company may exercise the power to cease
sending cheques for dividend entitlements or dividend warrants after the first
occasion on which such a cheque or warrant is returned undelivered.
(2) The Company shall have the power to sell, in such manner as the Board
thinks fit, any shares of a Member who is untraceable, but no such sale shall be
made unless:
(a) all cheques or warrants in respect of dividends of the shares in
question, being not less than three in total number, for any sum
payable in cash to the holder of such shares in respect of them sent
during the relevant period in the manner authorised by the Articles of
the Company have remained uncashed;
(b) so far as it is aware at the end of the relevant period, the Company
has not at any time during the relevant period received any indication
of the existence of the Member who is the holder of such shares or of
a person entitled to such shares by death, bankruptcy or operation of
law; and
-16-
(c) the Company, if so required by the rules governing the listing of
shares on the Designated Stock Exchange, has given notice to, and
caused advertisement in newspapers to be made in accordance with the
requirements of, the Designated Stock Exchange of its intention to
sell such shares in the manner required by the Designated Stock
Exchange, and a period of three months or such shorter period as may
be allowed by the Designated Stock Exchange has elapsed since the date
of such advertisement.
For the purpose of the foregoing, the "relevant period" means the
period commencing twelve (12) years before the date of publication of the
advertisement referred to in paragraph (c) of this Article and ending at the
expiry of the period referred to in that paragraph.
(3) To give effect to any such sale the Board may authorise some person to
transfer the said shares and an instrument of transfer signed or otherwise
executed by or on behalf of such person shall be as effective as if it had been
executed by the registered holder or the person entitled by transmission to such
shares, and the purchaser shall not be bound to see to the application of the
purchase money nor shall his title to the shares be affected by any irregularity
or invalidity in the proceedings relating to the sale. The net proceeds of the
sale will belong to the Company and upon receipt by the Company of such net
proceeds it shall become indebted to the former Member for an amount equal to
such net proceeds. No trust shall be created in respect of such debt and no
interest shall be payable in respect of it and the Company shall not be required
to account for any money earned from the net proceeds which may be employed in
the business of the Company or as it thinks fit. Any sale under this Article
shall be valid and effective notwithstanding that the Member holding the shares
sold is dead, bankrupt or otherwise under any legal disability or incapacity.
GENERAL MEETINGS
56. An annual general meeting of the Company shall be held in each year other
than the year of the Company's incorporation at such time and place as may be
determined by the Board.
57. Each general meeting, other than an annual general meeting, shall be called
an extraordinary general meeting. General meetings may be held at such times and
in any location in the world as may be determined by the Board.
58. Only a majority of the Board or the Chairman of the Board may call
extraordinary general meetings, which extraordinary general meetings shall be
held at such times and locations (as permitted hereby) as such person or persons
shall determine.
NOTICE OF GENERAL MEETINGS
59. (1) An annual general meeting and any extraordinary general meeting may be
called by not less than ten (10) clear days' Notice but a general meeting may be
called by shorter notice, subject to the Law, if it is so agreed:
(a) in the case of a meeting called as an annual general meeting, by all
the Members entitled to attend and vote thereat; and
-17-
(b) in the case of any other meeting, by a majority in number of the
Members having the right to attend and vote at the meeting, being a
majority together holding not less than ninety-five per cent. (95%) in
nominal value of the issued shares giving that right.
(2) The notice shall specify the time and place of the meeting and, in case
of special business, the general nature of the business. The notice convening an
annual general meeting shall specify the meeting as such. Notice of every
general meeting shall be given to all Members other than to such Members as,
under the provisions of these Articles or the terms of issue of the shares they
hold, are not entitled to receive such notices from the Company, to all persons
entitled to a share in consequence of the death or bankruptcy or winding-up of a
Member and to each of the Directors and the Auditors.
60. The accidental omission to give Notice of a meeting or (in cases where
instruments of proxy are sent out with the Notice) to send such instrument of
proxy to, or the non-receipt of such Notice or such instrument of proxy by, any
person entitled to receive such Notice shall not invalidate any resolution
passed or the proceedings at that meeting.
PROCEEDINGS AT GENERAL MEETINGS
61. (1) All business shall be deemed special that is transacted at an
extraordinary general meeting, and also all business that is transacted at an
annual general meeting, with the exception of:
(a) the declaration and sanctioning of dividends;
(b) consideration and adoption of the accounts and balance sheet and the
reports of the Directors and Auditors and other documents required to
be annexed to the balance sheet;
(c) the election of Directors;
(d) appointment of Auditors (where special notice of the intention for
such appointment is not required by the Law) and other officers;
(e) the granting of any mandate or authority to the Directors to offer,
allot, grant options over or otherwise dispose of the unissued shares
in the capital of the Company representing not more than 20 per cent.
(20%) in nominal value of its existing issued share capital; and
(f) the granting of any mandate or authority to the Directors to
repurchase securities of the Company.
(2) No business other than the appointment of a chairman of a meeting shall
be transacted at any general meeting unless a quorum is present at the
commencement of the business. At any general meeting of the Company, two (2)
Members entitled to vote and present in person or by proxy or (in the case of a
Member being a corporation) by its duly authorised representative representing
not less than a majority in nominal value of the total
-18-
issued voting shares in the Company throughout the meeting shall form a quorum
for all purposes.
62. If within thirty (30) minutes (or such longer time not exceeding one hour as
the chairman of the meeting may determine to wait) after the time appointed for
the meeting a quorum is not present, the meeting shall stand adjourned to the
same day in the next week at the same time and place or to such time and place
as the Board may determine. If at such adjourned meeting a quorum is not present
within half an hour from the time appointed for holding the meeting, the meeting
shall be dissolved.
63. The chairman of the Company shall preside as chairman at every general
meeting. If at any meeting the chairman is not present within fifteen (15)
minutes after the time appointed for holding the meeting, or is not willing to
act as chairman, the Directors present shall choose one of their number to act,
or if one Director only is present he shall preside as chairman if willing to
act. If no Director is present, or if each of the Directors present declines to
take the chair, or if the chairman chosen shall retire from the chair, the
Members present in person or by proxy and entitled to vote shall elect one of
their number to be chairman.
64. The chairman may adjourn the meeting from time to time and from place to
place, but no business shall be transacted at any adjourned meeting other than
the business which might lawfully have been transacted at the meeting had the
adjournment not taken place. When a meeting is adjourned for fourteen (14) days
or more, at least seven (7) clear days' notice of the adjourned meeting shall be
given specifying the time and place of the adjourned meeting but it shall not be
necessary to specify in such notice the nature of the business to be transacted
at the adjourned meeting and the general nature of the business to be
transacted. Save as aforesaid, it shall be unnecessary to give notice of an
adjournment.
65. If an amendment is proposed to any resolution under consideration but is in
good faith ruled out of order by the chairman of the meeting, the proceedings on
the substantive resolution shall not be invalidated by any error in such ruling.
In the case of a resolution duly proposed as a special resolution, no amendment
thereto (other than a mere clerical amendment to correct a patent error) may in
any event be considered or voted upon.
VOTING
66. Subject to any special rights or restrictions as to voting for the time
being attached to any shares by or in accordance with these Articles, at any
general meeting on a show of hands every Member present in person (or being a
corporation, is present by a duly authorised representative), or by proxy shall
have one vote and on a poll every Member present in person or by proxy or, in
the case of a Member being a corporation, by its duly authorised representative
shall have one vote for every fully paid share of which he is the holder but so
that no amount paid up or credited as paid up on a share in advance of calls or
instalments is treated for the foregoing purposes as paid up on the share.
Notwithstanding anything contained in these Articles, where more than one proxy
is appointed by a Member which is a clearing house (or its nominee(s)), each
such proxy shall have one vote on a show of hands. A resolution put to the vote
of a meeting shall be decided on a show of hands unless voting by way of a poll
is required by he rules of the Designated Stock Exchange or (before or on the
declaration of the result of the show of hands or on the withdrawal of any other
demand for a poll) a poll is demanded:
-19-
(a) by the chairman of such meeting; or
(b) by at least three Members present in person or in the case of a Member
being a corporation by its duly authorised representative or by proxy
for the time being entitled to vote at the meeting; or
(c) by a Member or Members present in person or in the case of a Member
being a corporation by its duly authorised representative or by proxy
and representing not less than one-tenth of the total voting rights of
all Members having the right to vote at the meeting; or
(d) by a Member or Members present in person or in the case of a Member
being a corporation by its duly authorised representative or by proxy
and holding shares in the Company conferring a right to vote at the
meeting being shares on which an aggregate sum has been paid up equal
to not less than one-tenth of the total sum paid up on all shares
conferring that right.
A demand by a person as proxy for a Member or in the case of a Member
being a corporation by its duly authorised representative shall be deemed to be
the same as a demand by a Member.
67. Unless a poll is duly demanded and the demand is not withdrawn, a
declaration by the chairman that a resolution has been carried, or carried
unanimously, or by a particular majority, or not carried by a particular
majority, or lost, and an entry to that effect made in the minute book of the
Company, shall be conclusive evidence of the facts without proof of the number
or proportion of the votes recorded for or against the resolution.
68. If a poll is duly demanded the result of the poll shall be deemed to be the
resolution of the meeting at which the poll was demanded. The Company shall only
be required to disclose the voting figures on a poll if such disclosure is
required by the rules of the Designated Stock Exchange.
69. A poll demanded on the election of a chairman, or on a question of
adjournment, shall be taken forthwith. A poll demanded on any other question
shall be taken in such manner (including the use of ballot or voting papers or
tickets) and either forthwith or at such time (being not later than thirty (30)
days after the date of the demand) and place as the chairman directs. It shall
not be necessary (unless the chairman otherwise directs) for notice to be given
of a poll not taken immediately.
70. The demand for a poll shall not prevent the continuance of a meeting or the
transaction of any business other than the question on which the poll has been
demanded, and, with the consent of the chairman, it may be withdrawn at any time
before the close of the meeting or the taking of the poll, whichever is the
earlier.
71. On a poll votes may be given either personally or by proxy.
72. A person entitled to more than one vote on a poll need not use all his votes
or cast all the votes he uses in the same way.
-20-
73. All questions submitted to a meeting shall be decided by a simple majority
of votes except where a greater majority is required by these Articles or by the
Law. In the case of an equality of votes, whether on a show of hands or on a
poll, the chairman of such meeting shall be entitled to a second or casting vote
in addition to any other vote he may have.
74. Where there are joint holders of any share any one of such joint holder may
vote, either in person or by proxy, in respect of such share as if he were
solely entitled thereto, but if more than one of such joint holders be present
at any meeting the vote of the senior who tenders a vote, whether in person or
by proxy, shall be accepted to the exclusion of the votes of the other joint
holders, and for this purpose seniority shall be determined by the order in
which the names stand in the Register in respect of the joint holding. Several
executors or administrators of a deceased Member in whose name any share stands
shall for the purposes of this Article be deemed joint holders thereof.
75. (1) A Member who is a patient for any purpose relating to mental health or
in respect of whom an order has been made by any court having jurisdiction for
the protection or management of the affairs of persons incapable of managing
their own affairs may vote, whether on a show of hands or on a poll, by his
receiver, committee, curator bonis or other person in the nature of a receiver,
committee or curator bonis appointed by such court, and such receiver,
committee, curator bonis or other person may vote on a poll by proxy, and may
otherwise act and be treated as if he were the registered holder of such shares
for the purposes of general meetings, provided that such evidence as the Board
may require of the authority of the person claiming to vote shall have been
deposited at the Office, head office or Registration Office, as appropriate, not
less than forty-eight (48) hours before the time appointed for holding the
meeting, or adjourned meeting or poll, as the case may be.
(2) Any person entitled under Article 53 to be registered as the holder of
any shares may vote at any general meeting in respect thereof in the same manner
as if he were the registered holder of such shares, provided that forty-eight
(48) hours at least before the time of the holding of the meeting or adjourned
meeting, as the case may be, at which he proposes to vote, he shall satisfy the
Board of his entitlement to such shares, or the Board shall have previously
admitted his right to vote at such meeting in respect thereof.
76. No Member shall, unless the Board otherwise determines, be entitled to
attend and vote and to be reckoned in a quorum at any general meeting unless he
is duly registered and all calls or other sums presently payable by him in
respect of shares in the Company have been paid.
77. If:
(a) any objection shall be raised to the qualification of any voter; or
(b) any votes have been counted which ought not to have been counted or
which might have been rejected; or
(c) any votes are not counted which ought to have been counted;
the objection or error shall not vitiate the decision of the meeting
or adjourned meeting on any resolution unless the same is raised or pointed out
at the meeting or, as the case may be, the adjourned meeting at which the vote
objected to is given or tendered or at which
-21-
the error occurs. Any objection or error shall be referred to the chairman of
the meeting and shall only vitiate the decision of the meeting on any resolution
if the chairman decides that the same may have affected the decision of the
meeting. The decision of the chairman on such matters shall be final and
conclusive.
PROXIES
78. Any Member entitled to attend and vote at a meeting of the Company shall be
entitled to appoint another person as his proxy to attend and vote instead of
him. A Member who is the holder of two or more shares may appoint more than one
proxy to represent him and vote on his behalf at a general meeting of the
Company or at a class meeting. A proxy need not be a Member. In addition, a
proxy or proxies representing either a Member who is an individual or a Member
which is a corporation shall be entitled to exercise the same powers on behalf
of the Member which he or they represent as such Member could exercise.
79. The instrument appointing a proxy shall be in writing under the hand of the
appointor or of his attorney duly authorised in writing or, if the appointor is
a corporation, either under its seal or under the hand of an officer, attorney
or other person authorised to sign the same. In the case of an instrument of
proxy purporting to be signed on behalf of a corporation by an officer thereof
it shall be assumed, unless the contrary appears, that such officer was duly
authorised to sign such instrument of proxy on behalf of the corporation without
further evidence of the facts.
80. The instrument appointing a proxy and (if required by the Board) the power
of attorney or other authority (if any) under which it is signed, or a certified
copy of such power or authority, shall be delivered to such place or one of such
places (if any) as may be specified for that purpose in or by way of note to or
in any document accompanying the notice convening the meeting (or, if no place
is so specified at the Registration Office or the Office, as may be appropriate)
not less than forty-eight (48) hours before the time appointed for holding the
meeting or adjourned meeting at which the person named in the instrument
proposes to vote or, in the case of a poll taken subsequently to the date of a
meeting or adjourned meeting, not less than twenty-four (24) hours before the
time appointed for the taking of the poll and in default the instrument of proxy
shall not be treated as valid. No instrument appointing a proxy shall be valid
after the expiration of twelve (12) months from the date named in it as the date
of its execution, except at an adjourned meeting or on a poll demanded at a
meeting or an adjourned meeting in cases where the meeting was originally held
within twelve (12) months from such date. Delivery of an instrument appointing a
proxy shall not preclude a Member from attending and voting in person at the
meeting convened and in such event, the instrument appointing a proxy shall be
deemed to be revoked.
81. Instruments of proxy shall be in any common form or in such other form as
the Board may approve (provided that this shall not preclude the use of the
two-way form) and the Board may, if it thinks fit, send out with the notice of
any meeting forms of instrument of proxy for use at the meeting. The instrument
of proxy shall be deemed to confer authority to demand or join in demanding a
poll and to vote on any amendment of a resolution put to the meeting for which
it is given as the proxy thinks fit. The instrument of proxy shall, unless the
contrary is stated therein, be valid as well for any adjournment of the meeting
as for the meeting to which it relates.
-22-
82. A vote given in accordance with the terms of an instrument of proxy shall be
valid notwithstanding the previous death or insanity of the principal, or
revocation of the instrument of proxy or of the authority under which it was
executed, provided that no intimation in writing of such death, insanity or
revocation shall have been received by the Company at the Office or the
Registration Office (or such other place as may be specified for the delivery of
instruments of proxy in the notice convening the meeting or other document sent
therewith) two hours at least before the commencement of the meeting or
adjourned meeting, or the taking of the poll, at which the instrument of proxy
is used.
83. Anything which under these Articles a Member may do by proxy he may likewise
do by his duly appointed attorney and the provisions of these Articles relating
to proxies and instruments appointing proxies shall apply mutatis mutandis in
relation to any such attorney and the instrument under which such attorney is
appointed.
CORPORATIONS ACTING BY REPRESENTATIVES
84. (1) Any corporation which is a Member 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 at any meeting of any class of
Members. The person so authorised shall be entitled to exercise the same powers
on behalf of such corporation as the corporation could exercise if it were an
individual Member and such corporation shall for the purposes of these Articles
be deemed to be present in person at any such meeting if a person so authorised
is present thereat.
(2) If a clearing house (or its nominee(s)), being a corporation, is a
Member, it may authorise such persons as it thinks fit to act as its
representatives at any meeting of the Company or at any meeting of any class of
Members provided that the authorisation shall specify the number and class of
shares in respect of which each such representative is so authorised. Each
person so authorised under the provisions of this Article shall be deemed to
have been duly authorised without further evidence of the facts and be entitled
to exercise the same rights and powers on behalf of the clearing house (or its
nominee(s)) as if such person was the registered holder of the shares of the
Company held by the clearing house (or its nominee(s)) including the right to
vote individually on a show of hands.
(3) Any reference in these Articles to a duly authorised representative of
a Member being a corporation shall mean a representative authorised under the
provisions of this Article.
NO ACTION BY WRITTEN RESOLUTIONS OF MEMBERS
85. Any action required or permitted to be taken at any annual or extraordinary
general meetings of the Company may be taken only upon the vote of the Members
at an annual or extraordinary general meeting duly noticed and convened in
accordance with these Articles and the Law and may not be taken by written
resolution of Members without a meeting.
-23-
BOARD OF DIRECTORS
86. (1) Unless otherwise determined by the Company in general meeting, the
number of Directors shall not be less than two (2). There shall be no maximum
number of Directors unless otherwise determined from time to time by the Members
in general meeting. The Directors shall be elected or appointed in the first
place by the subscribers to the Memorandum of Association or by a majority of
them and thereafter in accordance with this Article and shall hold office until
their successors are elected or appointed.
(2) Subject to the Articles and the Law, the Company may by ordinary
resolution elect any person to be a Director either to fill a casual vacancy or
as an addition to the existing Board.
(3) The Directors shall have the power from time to time and at any time to
appoint any person as a Director to fill a casual vacancy on the Board or as an
addition to the existing Board. Any Director so appointed by the Board shall
hold office only until the next following annual general meeting of the Company
and shall then be eligible for re-election.
(4) No Director shall be required to hold any shares of the Company by way
of qualification and a Director who is not a Member shall be entitled to receive
notice of and to attend and speak at any general meeting of the Company and of
all classes of shares of the Company.
(5) Subject to any provision to the contrary in these Articles, a Director
may be removed by way of an ordinary resolution of the Members at any time
before the expiration of his period of office notwithstanding anything in these
Articles or in any agreement between the Company and such Director (but without
prejudice to any claim for damages under any such agreement).
(6) A vacancy on the Board created by the removal of a Director under the
provisions of subparagraph (5) above may be filled by the election or
appointment by ordinary resolution of the Members at the meeting at which such
Director is removed or by the affirmative vote of a simple majority of the
remaining Directors present and voting at a Board meeting.
(7) The Company may from time to time in general meeting by ordinary
resolution increase or reduce the number of Directors but so that the number of
Directors shall never be less than two (2).
RETIREMENT OF DIRECTORS
87. (1) Notwithstanding any other provisions in the Articles, at each annual
general meeting one-third of the Directors for the time being (or, if their
number is not a multiple of three (3), the number nearest to but not less than
one-third) shall retire from office by rotation provided that every Director
shall be subject to retirement at least once every three years.
(2) A retiring Director shall be eligible for re-election and shall
continue to act as a Director throughout the meeting at which he retires. The
Directors to retire by rotation shall include (so far as necessary to ascertain
the number of directors to retire by rotation) any
-24-
Director who wishes to retire and not to offer himself for re-election. Any
further Directors so to retire shall be those of the other Directors subject to
retirement by rotation who have been longest in office since their last
re-election or appointment and so that as between persons who became or were
last re-elected Directors on the same day those to retire shall (unless they
otherwise agree among themselves) be determined by lot. Any Director appointed
pursuant to Article 86(2) or Article 86(3) shall not be taken into account in
determining which particular Directors or the number of Directors who are to
retire by rotation.
88. No person other than a Director retiring at the meeting shall, unless
recommended by the Directors for election, be eligible for election as a
Director at any general meeting unless a Notice signed by a Member (other than
the person to be proposed) duly qualified to attend and vote at the meeting for
which such notice is given of his intention to propose such person for election
and also a Notice signed by the person to be proposed of his willingness to be
elected shall have been lodged at the head office or at the Registration Office
provided that the minimum length of the period, during which such Notice(s) are
given, shall be at least seven (7) days and that the period for lodgment of such
Notice(s) shall commence no earlier than the day after the dispatch of the
notice of the general meeting appointed for such election and end no later than
seven (7) days prior to the date of such general meeting.
DISQUALIFICATION OF DIRECTORS
89. The office of a Director shall be vacated if the Director:
(1) resigns his office by notice in writing delivered to the Company at the
Office or tendered at a meeting of the Board;
(2) becomes of unsound mind or dies;
(3) without special leave of absence from the Board, is absent from
meetings of the Board for six consecutive months and the Board resolves that his
office be vacated; or
(4) becomes bankrupt or has a receiving order made against him or suspends
payment or compounds with his creditors;
(5) is prohibited by law from being a Director; or
(6) ceases to be a Director by virtue of any provision of the Statutes or
is removed from office pursuant to these Articles.
EXECUTIVE DIRECTORS
90. The Board may from time to time appoint any one or more of its body to be a
managing director, joint managing director or deputy managing director or to
hold any other employment or executive office with the Company for such period
(subject to their continuance as Directors) and upon such terms as the Board may
determine and the Board may revoke or terminate any of such appointments. Any
such revocation or termination as aforesaid shall be without prejudice to any
claim for damages that such Director may have against the Company or the Company
may have against such Director. A Director appointed to an office
-25-
under this Article shall be subject to the same provisions as to removal as the
other Directors of the Company, and he shall (subject to the provisions of any
contract between him and the Company) ipso facto and immediately cease to hold
such office if he shall cease to hold the office of Director for any cause.
91. An executive director appointed to an office under Article 90 hereof shall
receive such remuneration (whether by way of salary, commission, participation
in profits or otherwise or by all or any of those modes) and such other benefits
(including pension and/or gratuity and/or other benefits on retirement) and
allowances as the Board may from time to time determine, and either in addition
to or in lieu of his remuneration as a Director.
ALTERNATE DIRECTORS
92. Any Director may at any time by Notice delivered to the Office or head
office or at a meeting of the Directors appoint any person (including another
Director) to be his alternate Director. Any person so appointed shall have all
the rights and powers of the Director or Directors for whom such person is
appointed in the alternative provided that such person shall not be counted more
than once in determining whether or not a quorum is present. An alternate
Director may be removed at any time by the body which appointed him and, subject
thereto, the office of alternate Director shall continue until the happening of
any event which, if we were a Director, would cause him to vacate such office or
if his appointer ceases for any reason to be a Director. Any appointment or
removal of an alternate Director shall be effected by Notice signed by the
appointor and delivered to the Office or head office or tendered at a meeting of
the Board. An alternate Director may also be a Director in his own right and may
act as alternate to more than one Director. An alternate Director shall, if his
appointor so requests, be entitled to receive notices of meetings of the Board
or of committees of the Board to the same extent as, but in lieu of, the
Director appointing him and shall be entitled to such extent 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 exercise and discharge all
the functions, powers and duties of his appointor as a Director and for the
purposes of the proceedings at such meeting the provisions of these Articles
shall apply as if he were a Director save that as an alternate for more than one
Director his voting rights shall be cumulative.
93. An alternate Director shall only be a Director for the purposes of the Law
and shall only be subject to the provisions of the Law insofar as they relate to
the duties and obligations of a Director when performing the functions of the
Director for whom he is appointed in the alternative and shall alone be
responsible to the Company for his acts and defaults and shall not be deemed to
be the agent of or for the Director appointing him. An alternate Director shall
be entitled to contract and be interested in and benefit from contracts or
arrangements or transactions and to be repaid expenses and to be indemnified by
the Company to the same extent mutatis mutandis as if he were a Director but he
shall not be entitled to receive from the Company any fee in his capacity as an
alternate Director except only such part, if any, of the remuneration otherwise
payable to his appointor as such appointor may by Notice to the Company from
time to time direct.
94. Every person acting as an alternate Director shall have one vote for each
Director for whom he acts as alternate (in addition to his own vote if he is
also a Director). If his appointor is for the time being absent from the
People's Republic of China or otherwise not available or unable to act, the
signature of an alternate Director to any resolution in writing of
-26-
the Board or a committee of the Board of which his appointor is a member shall,
unless the notice of his appointment provides to the contrary, be as effective
as the signature of his appointor.
95. An alternate Director shall ipso facto cease to be an alternate Director if
his appointor ceases for any reason to be a Director, however, such alternate
Director or any other person may be re-appointed by the Directors to serve as an
alternate Director PROVIDED always that, if at any meeting any Director retires
but is re-elected at the same meeting, any appointment of such alternate
Director pursuant to these Articles which was in force immediately before his
retirement shall remain in force as though he had not retired.
DIRECTORS' FEES AND EXPENSES
96. The Directors shall receive such remuneration as the Board may from time to
time determine. Each Director shall be entitled to be repaid or prepaid all
traveling, hotel and incidental expenses reasonably incurred or expected to be
incurred by him in attending meetings of the Board or committees of the board or
general meetings or separate meetings of any class of shares or of debenture of
the Company or otherwise in connection with the discharge of his duties as a
Director.
DIRECTORS' INTERESTS
97. A Director may:
(a) hold any other office or place of profit with the Company (except that
of Auditor) in conjunction with his office of Director for such period
and upon such terms as the Board may determine. Any remuneration
(whether by way of salary, commission, participation in profits or
otherwise) paid to any Director in respect of any such other office or
place of profit shall be in addition to any remuneration provided for
by or pursuant to any other Article;
(b) act by himself or his firm in a professional capacity for the Company
(otherwise than as Auditor) and he or his firm may be remunerated for
professional services as if he were not a Director;
(c) continue to be or become a director, managing director, joint managing
director, deputy managing director, executive director, manager or
other officer or member of any other company promoted by the Company
or in which the Company may be interested as a vendor, shareholder or
otherwise and (unless otherwise agreed) no such Director shall be
accountable for any remuneration, profits or other benefits received
by him as a director, managing director, joint managing director,
deputy managing director, executive director, manager or other officer
or member of or from his interests in any such other company. Subject
as otherwise provided by these Articles the Directors may exercise or
cause to be exercised the voting powers conferred by the shares in any
other company held or owned by the Company, or exercisable by them as
Directors of such other company in such manner in all respects as they
think fit (including the exercise thereof in favour of any resolution
appointing themselves or any of
-27-
them directors, managing directors, joint managing directors, deputy
managing directors, executive directors, managers or other officers of
such company) or voting or providing for the payment of remuneration
to the director, managing director, joint managing director, deputy
managing director, executive director, manager or other officers of
such other company and any Director may vote in favour of the exercise
of such voting rights in manner aforesaid notwithstanding that he may
be, or about to be, appointed a director, managing director, joint
managing director, deputy managing director, executive director,
manager or other officer of such a company, and that as such he is or
may become interested in the exercise of such voting rights in manner
aforesaid.
Notwithstanding the foregoing, no "Independent Director" as defined in
NASD Rules or in Rule 10A-3 under the Exchange Act, and with respect of whom the
Board has determined constitutes an "Independent Director" for purposes of
compliance with applicable law or the Company's listing requirements, shall
without the consent of the Audit Committee take any of the foregoing actions or
any other action that would reasonably be likely to affect such Director's
status as an "Independent Director" of the Company.
98. Subject to the Law and to these Articles, no Director or proposed or
intending Director shall be disqualified by his office from contracting with the
Company, either with regard to his tenure of any office or place of profit or as
vendor, purchaser or in any other manner whatever, nor shall any such contract
or any other contract or arrangement in which any Director is in any way
interested be liable to be avoided, nor shall any Director so contracting or
being so interested be liable to account to the Company or the Members for any
remuneration, profit or other benefits realised by any such contract or
arrangement by reason of such Director holding that office or of the fiduciary
relationship thereby established provided that such Director shall disclose the
nature of his interest in any contract or arrangement in which he is interested
in accordance with Article 99 herein. Any such transaction that would reasonably
be likely to affect a Director's status as an "Independent Director", or that
would constitute a "related party transaction" as defined by Item 7.N of Form
20F promulgated by the SEC, shall require the approval of the Audit Committee.
99. A Director who to his knowledge is in any way, whether directly or
indirectly, interested in a contract or arrangement or proposed contract or
arrangement with the Company shall declare the nature of his interest at the
meeting of the Board at which the question of entering into the contract or
arrangement is first considered, if he knows his interest then exists, or in any
other case at the first meeting of the Board after he knows that he is or has
become so interested. For the purposes of this Article, a general Notice to the
Board by a Director to the effect that:
(a) he is a member or officer of a specified company or firm and is to be
regarded as interested in any contract or arrangement which may after
the date of the Notice be made with that company or firm; or
(b) he is to be regarded as interested in any contract or arrangement
which may after the date of the Notice be made with a specified person
who is connected with him;
shall be deemed to be a sufficient declaration of interest under this
Article in relation to any such contract or arrangement, provided that no such
Notice shall be effective
-28-
unless either it is given at a meeting of the Board or the Director takes
reasonable steps to secure that it is brought up and read at the next Board
meeting after it is given.
100. Following a declaration being made pursuant to the last preceding two
Articles, subject to any separate requirement for Audit Committee approval under
applicable law or the listing rules of the Company's Designated Stock Exchange,
and unless disqualified by the chairman of the relevant Board meeting, a
Director may vote in respect of any contract or proposed contract or arrangement
in which such Director is interested and may be counted in the quorum at such
meeting.
GENERAL POWERS OF THE DIRECTORS
101. (1) The business of the Company shall be managed and conducted by the
Board, which may pay all expenses incurred in forming and registering the
Company and may exercise all powers of the Company (whether relating to the
management of the business of the Company or otherwise) which are not by the
Statutes or by these Articles required to be exercised by the Company in general
meeting, subject nevertheless to the provisions of the Statutes and of these
Articles and to such regulations being not inconsistent with such provisions, as
may be prescribed by the Company in general meeting, but no regulations made by
the Company in general meeting shall invalidate any prior act of the Board which
would have been valid if such regulations had not been made. The general powers
given by this Article shall not be limited or restricted by any special
authority or power given to the Board by any other Article.
(2) Any person contracting or dealing with the Company in the ordinary
course of business shall be entitled to rely on any written or oral contract or
agreement or deed, document or instrument entered into or executed as the case
may be by any two of the Directors acting jointly on behalf of the Company and
the same shall be deemed to be validly entered into or executed by the Company
as the case may be and shall, subject to any rule of law, be binding on the
Company.
(3) Without prejudice to the general powers conferred by these Articles it
is hereby expressly declared that the Board shall have the following powers:
(a) To give to any person the right or option of requiring at a future
date that an allotment shall be made to him of any share at par or at
such premium as may be agreed.
(b) To give to any Directors, officers or employees of the Company an
interest in any particular business or transaction or participation in
the profits thereof or in the general profits of the Company either in
addition to or in substitution for a salary or other remuneration.
(c) To resolve that the Company be deregistered in the Cayman Islands and
continued in a named jurisdiction outside the Cayman Islands subject
to the provisions of the Law.
102. The Board may establish any regional or local boards or agencies for
managing any of the affairs of the Company in any place, and may appoint any
persons to be members of
-29-
such local boards, or any managers or agents, and may fix their remuneration
(either by way of salary or by commission or by conferring the right to
participation in the profits of the Company or by a combination of two or more
of these modes) and pay the working expenses of any staff employed by them upon
the business of the Company. The Board may delegate to any regional or local
board, manager or agent any of the powers, authorities and discretions vested in
or exercisable by the Board (other than its powers to make calls and forfeit
shares), with power to sub-delegate, and may authorise the members of any of
them to fill any vacancies therein and to act notwithstanding vacancies. Any
such appointment or delegation may be made upon such terms and subject to such
conditions as the Board may think fit, and the Board may remove any person
appointed as aforesaid, and may revoke or vary such delegation, but no person
dealing in good faith and without notice of any such revocation or variation
shall be affected thereby.
103. The Board may by power of attorney appoint any company, firm or person or
any fluctuating body of persons, whether nominated directly or indirectly by the
Board, 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 Board under these Articles) and for such period and subject
to such conditions as it may think fit, and any such power of attorney may
contain such provisions for the protection and convenience of persons dealing
with any such attorney as the Board may think fit, and may also authorise any
such attorney to sub-delegate all or any of the powers, authorities and
discretions vested in him. Such attorney or attorneys may, if so authorised
under the Seal of the Company, execute any deed or instrument under their
personal seal with the same effect as the affixation of the Company's Seal.
104. The Board may entrust to and confer upon a managing director, joint
managing director, deputy managing director, an executive director or any
Director 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 or vary all or
any of such powers but no person dealing in good faith and without notice of
such revocation or variation shall be affected thereby.
105. All cheques, promissory notes, drafts, bills of exchange and other
instruments, whether negotiable or transferable or not, and all receipts for
moneys paid to the Company shall be signed, drawn, accepted, endorsed or
otherwise executed, as the case may be, in such manner as the Board shall from
time to time by resolution determine. The Company's banking accounts shall be
kept with such banker or bankers as the Board shall from time to time determine.
106. (1) The Board may establish or concur or join with other companies (being
subsidiary companies of the Company or companies with which it is associated in
business) in establishing and making contributions out of the Company's moneys
to any schemes or funds for providing pensions, sickness or compassionate
allowances, life assurance or other benefits for employees (which expression as
used in this and the following paragraph shall include any Director or
ex-Director who may hold or have held any executive office or any office of
profit under the Company or any of its subsidiary companies) and ex-employees of
the Company and their dependants or any class or classes of such person.
(2) The Board may pay, enter into agreements to pay or make grants of
revocable or irrevocable pensions or other benefits to employees and
ex-employees and their dependants, or
-30-
to any of such persons, including pensions or benefits additional to those, if
any, to which such employees or ex-employees or their dependants are or may
become entitled under any such scheme or fund as mentioned in the last preceding
paragraph. Any such pension or benefit may, as the Board considers desirable, be
granted to an employee either before and in anticipation of or upon or at any
time after his actual retirement, and may be subject or not subject to any terms
or conditions as the Board may determine.
BORROWING POWERS
107. The Board may exercise all the powers of the Company to raise or borrow
money and to mortgage or charge all or any part of the undertaking, property and
assets (present and future) and uncalled capital of the Company and, subject to
the Law, to issue debentures, bonds and other securities, whether outright or as
collateral security for any debt, liability or obligation of the Company or of
any third party.
108. Debentures, bonds and other securities may be made assignable free from any
equities between the Company and the person to whom the same may be issued.
109. Any debentures, bonds or other securities may be issued at a discount
(other than shares), premium or otherwise and with any special privileges as to
redemption, surrender, drawings, allotment of shares, attending and voting at
general meetings of the Company, appointment of Directors and otherwise.
110. (1) Where any uncalled capital of the Company is charged, all persons
taking any subsequent charge thereon shall take the same subject to such prior
charge, and shall not be entitled, by notice to the Members or otherwise, to
obtain priority over such prior charge.
(2) The Board shall cause a proper register to be kept, in accordance with
the provisions of the Law, of all charges specifically affecting the property of
the Company and of any series of debentures issued by the Company and shall duly
comply with the requirements of the Law in regard to the registration of charges
and debentures therein specified and otherwise.
PROCEEDINGS OF THE DIRECTORS
111. The Board may meet for the despatch of business, adjourn and otherwise
regulate its meetings as it considers appropriate. Questions arising at any
meeting shall be determined by a majority of votes. In the case of any equality
of votes the chairman of the meeting shall have an additional or casting vote.
112. A meeting of the Board may be convened by the Secretary on request of a
Director or by any Director. The Secretary shall convene a meeting of the Board
of which notice may be given in writing or by telephone or in such other manner
as the Board may from time to time determine whenever he shall be required so to
do by the president or chairman, as the case may be, or any Director.
113. (1) The quorum necessary for the transaction of the business of the Board
may be fixed by the Board and, unless so fixed at any other number, shall be two
(2). An alternate
-31-
Director shall be counted in a quorum in the case of the absence of a Director
for whom he is the alternate provided that he shall not be counted more than
once for the purpose of determining whether or not a quorum is present.
(2) Directors may participate in any meeting of the Board by means of a
conference telephone or other communications equipment through which all persons
participating in the meeting can communicate with each other simultaneously and
instantaneously and, for the purpose of counting a quorum, such participation
shall constitute presence at a meeting as if those participating were present in
person.
(3) Any Director who ceases to be a Director at a Board meeting may
continue to be present and to act as a Director and be counted in the quorum
until the termination of such Board meeting if no other Director objects and if
otherwise a quorum of Directors would not be present.
114. The continuing Directors or a sole continuing Director may act
notwithstanding any vacancy in the Board but, if and so long as the number of
Directors is reduced below the minimum number fixed by or in accordance with
these Articles, the continuing Directors or Director, notwithstanding that the
number of Directors is below the number fixed by or in accordance with these
Articles as the quorum or that there is only one continuing Director, may act
for the purpose of filling vacancies in the Board or of summoning general
meetings of the Company but not for any other purpose.
115. The Chairman of the Board shall be the chairman of all meetings of the
Board. If the Chairman of the Board is not present at any meeting within five
(5) minutes after the time appointed for holding the same, the Directors present
may choose one of their number to be chairman of the meeting.
116. A meeting of the Board at which a quorum is present shall be competent to
exercise all the powers, authorities and discretions for the time being vested
in or exercisable by the Board.
117. (1) The Board may delegate any of its powers, authorities and discretions
to committees (including, without limitation, the Audit Committee), consisting
of such Director or Directors and other persons as it thinks fit, and they may,
from time to time, revoke such delegation or revoke the appointment of and
discharge any such committees either wholly or in part, and either as to persons
or purposes. Any committee so formed shall, in the exercise of the powers,
authorities and discretions so delegated, conform to any regulations which may
be imposed on it by the Board.
(2) All acts done by any such committee in conformity with such
regulations, and in fulfilment of the purposes for which it was appointed, but
not otherwise, shall have like force and effect as if done by the Board, and the
Board (or if the Board delegates such power, the committee) shall have power to
remunerate the members of any such committee, and charge such remuneration to
the current expenses of the Company.
118. The meetings and proceedings of any committee consisting of two or more
members shall be governed by the provisions contained in these Articles for
regulating the meetings and proceedings of the Board so far as the same are
applicable and are not superseded by any regulations imposed by the Board under
the last preceding Article, indicating, without
-32-
limitation, any committee charter adopted by the Board for purposes or in
respect of any such committee.
119. A resolution in writing signed by all the Directors except such as are
temporarily unable to act through ill-health or disability shall (provided that
such number is sufficient to constitute a quorum and further provided that a
copy of such resolution has been given or the contents thereof communicated to
all the Directors for the time being entitled to receive notices of Board
meetings in the same manner as notices of meetings are required to be given by
these Articles) be as valid and effectual as if a resolution had been passed at
a meeting of the Board duly convened and held. Such resolution may be contained
in one document or in several documents in like form each signed by one or more
of the Directors and for this purpose a facsimile signature of a Director shall
be treated as valid.
120. All acts bona fide done by the Board or by any committee or by any person
acting as a Director or members of a committee, shall, notwithstanding that it
is afterwards discovered that there was some defect in the appointment of any
member of the Board or such committee or person acting as aforesaid or that they
or any of them were disqualified or had vacated office, be as valid as if every
such person had been duly appointed and was qualified and had continued to be a
Director or member of such committee.
AUDIT COMMITTEE
121. Without prejudice to the freedom of the Directors to establish any other
committees, for so long as the shares of the Company (or depositary receipts
therefor) are listed or quoted on the Designated Stock Exchange, the Board shall
establish and maintain an Audit Committee as a committee of the Board, the
composition and responsibilities of which shall comply with the NASD Rules and
the rules and regulations of the SEC.
122. (1) The Board shall adopt a formal written audit committee charter and
review and assess the adequacy of the formal written charter on an annual basis.
(2) The Audit Committee shall meet at least once every financial quarter,
or more frequently as circumstances dictate.
123. For so long as the shares of the Company (or depositary receipts therefor)
are listed or quoted on the Designated Stock Exchange, the Company shall conduct
an appropriate review of all related party transactions on an ongoing basis and
shall utilize the Audit Committee for the review and approval of potential
conflicts of interest. Specially, the Audit Committee shall approve any
transaction or transactions between the Company and any f the following parties:
(i) any shareholder owning an interest in the voting power of the Company or any
subsidiary of the Company that gives such shareholder significant influence over
the Company or any subsidiary of the Company, (ii) any director or executive
officer of the Company or any subsidiary of the Company and any relative of such
director or executive officer, (iii) any person in which a substantial interest
in the voting power of the Company is owned, directly or indirectly, by any
person described in (i) or (ii) or over which such a person is able to exercise
significant influence, and (iv) any affiliate (other than a subsidiary) of the
Company.
-33-
OFFICERS
124. (1) The officers of the Company shall consist of the Chairman of the Board,
the Directors and Secretary and such additional officers (who may or may not be
Directors) as the Board may from time to time determine, all of whom shall be
deemed to be officers for the purposes of the Law and these Articles.
(2) The Directors shall, as soon as may be after each appointment or
election of Directors, elect amongst the Directors a chairman and if more than
one Director is proposed for this office, the election to such office shall take
place in such manner as the Directors may determine.
(3) The officers shall receive such remuneration as the Directors may from
time to time determine.
125. (1) The Secretary and additional officers, if any, shall be appointed by
the Board and shall hold office on such terms and for such period as the Board
may determine. If thought fit, two or more persons may be appointed as joint
Secretaries. The Board may also appoint from time to time on such terms as it
thinks fit one or more assistant or deputy Secretaries.
(2) The Secretary shall attend all meetings of the Members and shall keep
correct minutes of such meetings and enter the same in the proper books provided
for the purpose. He shall perform such other duties as are prescribed by the Law
or these Articles or as may be prescribed by the Board.
126. The officers of the Company shall have such powers and perform such duties
in the management, business and affairs of the Company as may be delegated to
them by the Directors from time to time.
127. A provision of the Law or of these Articles requiring or authorising a
thing to be done by or to a Director and the Secretary shall not be satisfied by
its being done by or to the same person acting both as Director and as or in
place of the Secretary.
REGISTER OF DIRECTORS AND OFFICERS
128. The Company shall cause to be kept in one or more books at its Office a
Register of Directors and Officers in which there shall be entered the full
names and addresses of the Directors and Officers and such other particulars as
required by the Law or as the Directors may determine. The Company shall send to
the Registrar of Companies in the Cayman Islands a copy of such register, and
shall from time to time notify to the said Registrar of any change that takes
place in relation to such Directors and Officers as required by the Law.
MINUTES
129. (1) The Board shall cause minutes to be duly entered in books provided for
the purpose:
(a) of all elections and appointments of officers;
-34-
(b) of the names of the Directors present at each meeting of the Directors
and of any committee of the Directors;
(c) of all resolutions and proceedings of each general meeting of the
Members, meetings of the Board and meetings of committees of the Board
and where there are managers, of all proceedings of meetings of the
managers.
(2) Minutes shall be kept by the Secretary at the Office.
SEAL
130. (1) The Company shall have one or more Seals, as the Board may determine.
For the purpose of sealing documents creating or evidencing securities issued by
the Company, the Company may have a securities seal which is a facsimile of the
Seal of the Company with the addition of the word "Securities" on its face or in
such other form as the Board may approve. The Board shall provide for the
custody of each Seal and no Seal shall be used without the authority of the
Board or of a committee of the Board authorised by the Board in that behalf.
Subject as otherwise provided in these Articles, any instrument to which a Seal
is affixed shall be signed autographically by one Director and the Secretary or
by two Directors or by such other person (including a Director) or persons as
the Board may appoint, either generally or in any particular case, save that as
regards any certificates for shares or debentures or other securities of the
Company the Board may by resolution determine that such signatures or either of
them shall be dispensed with or affixed by some method or system of mechanical
signature. Every instrument executed in manner provided by this Article shall be
deemed to be sealed and executed with the authority of the Board previously
given.
(2) Where the Company has a Seal for use abroad, the Board may by writing
under the Seal appoint any agent or committee abroad to be the duly authorised
agent of the Company for the purpose of affixing and using such Seal and the
Board may impose restrictions on the use thereof as may be thought fit. Wherever
in these Articles reference is made to the Seal, the reference shall, when and
so far as may be applicable, be deemed to include any such other Seal as
aforesaid.
AUTHENTICATION OF DOCUMENTS
131. Any Director or the Secretary or any person appointed by the Board for the
purpose may authenticate any documents affecting the constitution of the Company
and any resolution passed by the Company or the Board or any committee, and any
books, records, documents and accounts relating to the business of the Company,
and to certify copies thereof or extracts therefrom as true copies or extracts,
and if any books, records, documents or accounts are elsewhere than at the
Office or the head office the local manager or other officer of the Company
having the custody thereof shall be deemed to be a person so appointed by the
Board. A document purporting to be a copy of a resolution, or an extract from
the minutes of a meeting, of the Company or of the Board or any committee which
is so certified shall be conclusive evidence in favour of all persons dealing
with the Company upon the faith thereof that such resolution has been duly
passed or, as the case may be, that such minutes or extract is a true and
accurate record of proceedings at a duly constituted meeting.
-35-
DESTRUCTION OF DOCUMENTS
132. (1) The Company shall be entitled to destroy the following documents at the
following times:
(a) any share certificate which has been cancelled at any time after the
expiry of one (1) year from the date of such cancellation;
(b) any dividend mandate or any variation or cancellation thereof or any
notification of change of name or address at any time after the expiry
of two (2) years from the date such mandate variation cancellation or
notification was recorded by the Company;
(c) any instrument of transfer of shares which has been registered at any
time after the expiry of seven (7) years from the date of
registration;
(d) any allotment letters after the expiry of seven (7) years from the
date of issue thereof; and
(e) copies of powers of attorney, grants of probate and letters of
administration at any time after the expiry of seven (7) years after
the account to which the relevant power of attorney, grant of probate
or letters of administration related has been closed;
and it shall conclusively be presumed in favour of the Company that
every entry in the Register purporting to be made on the basis of any such
documents so destroyed was duly and properly made and every share certificate so
destroyed was a valid certificate duly and properly cancelled and that every
instrument of transfer so destroyed was a valid and effective instrument duly
and properly registered and that every other document destroyed hereunder was a
valid and effective document in accordance with the recorded particulars thereof
in the books or records of the Company. Provided always that: (1) the foregoing
provisions of this Article shall apply only to the destruction of a document in
good faith and without express notice to the Company that the preservation of
such document was relevant to a claim; (2) nothing contained in this Article
shall be construed as imposing upon the Company any liability in respect of the
destruction of any such document earlier than as aforesaid or in any case where
the conditions of proviso (1) above are not fulfilled; and (3) references in
this Article to the destruction of any document include references to its
disposal in any manner.
(2) Notwithstanding any provision contained in these Articles, the
Directors may, if permitted by applicable law, authorise the destruction of
documents set out in sub-paragraphs (a) to (e) of paragraph (1) of this Article
and any other documents in relation to share registration which have been
microfilmed or electronically stored by the Company or by the share registrar on
its behalf provided always that this Article shall apply only to the destruction
of a document in good faith and without express notice to the Company and its
share registrar that the preservation of such document was relevant to a claim.
-36-
DIVIDENDS AND OTHER PAYMENTS
133. Subject to the Law, the Company in general meeting or the Board may from
time to time declare dividends in any currency to be paid to the Members but no
dividend shall be declared in excess of the amount recommended by the Board.
134. Dividends may be declared and paid out of the profits of the Company,
realised or unrealised, or from any reserve set aside from profits which the
Directors determine is no longer needed. The Board may also declare and pay
dividends out of share premium account or any other fund or account which can be
authorised for this purpose in accordance with the Law.
135. Except in so far as the rights attaching to, or the terms of issue of, any
share otherwise provide:
(a) all dividends shall be declared and paid according to the amounts paid
up on the shares in respect of which the dividend is paid, but no
amount paid up on a share in advance of calls shall be treated for the
purposes of this Article as paid up on the share; and
(b) all dividends shall be apportioned and paid pro rata according to the
amounts paid up on the shares during any portion or portions of the
period in respect of which the dividend is paid.
136. The Board may from time to time pay to the Members such interim dividends
as appear to the Board to be justified by the profits of the Company and in
particular (but without prejudice to the generality of the foregoing) if at any
time the share capital of the Company is divided into different classes, the
Board may pay such interim dividends in respect of those shares in the capital
of the Company which confer on the holders thereof deferred or non-preferential
rights as well as in respect of those shares which confer on the holders thereof
preferential rights with regard to dividend and provided that the Board acts
bona fide the Board shall not incur any responsibility to the holders of shares
conferring any preference for any damage that they may suffer by reason of the
payment of an interim dividend on any shares having deferred or non-preferential
rights and may also pay any fixed dividend which is payable on any shares of the
Company half-yearly or on any other dates, whenever such profits, in the opinion
of the Board, justifies such payment.
137. The Board may deduct from any dividend or other moneys payable to a Member
by the Company on or in respect of any shares all sums of money (if any)
presently payable by him to the Company on account of calls or otherwise.
138. No dividend or other moneys payable by the Company on or in respect of any
share shall bear interest against the Company.
139. Any dividend, interest or other sum payable in cash to the holder of shares
may be paid by cheque or warrant sent through the post addressed to the holder
at his registered address or, in the case of joint holders, addressed to the
holder whose name stands first in the Register in respect of the shares at his
address as appearing in the Register or addressed to such person and at such
address as the holder or joint holders may in writing direct. Every such cheque
or warrant shall, unless the holder or joint holders otherwise direct, be made
payable to the order of the holder or, in the case of joint holders, to the
order of the holder whose name
-37-
stands first on the Register in respect of such shares, and shall be sent at his
or their risk and payment of the cheque or warrant by the bank on which it is
drawn shall constitute a good discharge to the Company notwithstanding that it
may subsequently appear that the same has been stolen or that any endorsement
thereon has been forged. Any one of two or more joint holders may give effectual
receipts for any dividends or other moneys payable or property distributable in
respect of the shares held by such joint holders.
140. All dividends or bonuses unclaimed for one (1) year after having been
declared may be invested or otherwise made use of by the Board for the benefit
of the Company until claimed. Any dividend or bonuses unclaimed after a period
of six (6) years from the date of declaration shall be forfeited and shall
revert to the Company. The payment by the Board of any unclaimed dividend or
other sums payable on or in respect of a share into a separate account shall not
constitute the Company a trustee in respect thereof.
141. Whenever the Board or the Company in general meeting has resolved that a
dividend be paid or declared, the Board may further resolve that such dividend
be satisfied wholly or in part by the distribution of specific assets of any
kind and in particular of paid up shares, debentures or warrants to subscribe
securities of the Company or any other company, or in any one or more of 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 issue
certificates in respect of fractions of shares, disregard fractional
entitlements or round the same up or down, and may fix the value for
distribution of such specific assets, or any part thereof, and may determine
that cash payments shall be made to any Members upon the footing of the value so
fixed in order to adjust the rights of all parties, and may vest any such
specific assets in trustees as may seem expedient to the Board and may appoint
any person to sign any requisite instruments of transfer and other documents on
behalf of the persons entitled to the dividend, and such appointment shall be
effective and binding on the Members. The Board may resolve that no such assets
shall be made available to Members with registered addresses in any particular
territory or territories where, in the absence of a registration statement or
other special formalities, such distribution of assets would or might, in the
opinion of the Board, be unlawful or impracticable and in such event the only
entitlement of the Members aforesaid shall be to receive cash payments as
aforesaid. Members affected as a result of the foregoing sentence shall not be
or be deemed to be a separate class of Members for any purpose whatsoever.
142. (1) Whenever the Board or the Company in general meeting has resolved that
a dividend be paid or declared on any class of the share capital of the Company,
the Board may further resolve either:
(a) that such dividend be satisfied wholly or in part in the form of an
allotment of shares credited as fully paid up, provided that the
Members entitled thereto will be entitled to elect to receive such
dividend (or part thereof if the Board so determines) in cash in lieu
of such allotment. In such case, the following provisions shall apply:
(i) the basis of any such allotment shall be determined by the Board;
(ii) the Board, after determining the basis of allotment, shall give
not less than ten (10) days' Notice to the holders of the
relevant shares of the right of election accorded to them and
shall send with such notice forms
-38-
of election and specify the procedure to be followed and the
place at which and the latest date and time by which duly
completed forms of election must be lodged in order to be
effective;
(iii) the right of election may be exercised in respect of the whole
or part of that portion of the dividend in respect of which the
right of election has been accorded; and
(iv) the dividend (or that part of the dividend to be satisfied by the
allotment of shares as aforesaid) shall not be payable in cash on
shares in respect whereof the cash election has not been duly
exercised ("the non-elected shares") and in satisfaction thereof
shares of the relevant class shall be allotted credited as fully
paid up to the holders of the non-elected shares on the basis of
allotment determined as aforesaid and for such purpose the Board
shall capitalise and apply out of any part of the undivided
profits of the Company (including profits carried and standing to
the credit of any reserves or other special account, share
premium account, capital redemption reserve other than the
Subscription Rights Reserve) as the Board may determine, such sum
as may be required to pay up in full the appropriate number of
shares of the relevant class for allotment and distribution to
and amongst the holders of the non-elected shares on such basis;
or
(b) that the Members entitled to such dividend shall be entitled to elect
to receive an allotment of shares credited as fully paid up in lieu of
the whole or such part of the dividend as the Board may think fit. In
such case, the following provisions shall apply:
(i) the basis of any such allotment shall be determined by the Board;
(ii) the Board, after determining the basis of allotment, shall give
not less than ten (10) days' Notice to the holders of the
relevant shares of the right of election accorded to them and
shall send with such notice forms of election and specify the
procedure to be followed and the place at which and the latest
date and time by which duly completed forms of election must be
lodged in order to be effective;
(iii) the right of election may be exercised in respect of the whole
or part of that portion of the dividend in respect of which the
right of election has been accorded; and
(iv) the dividend (or that part of the dividend in respect of which a
right of election has been accorded) shall not be payable in cash
on shares in respect whereof the share election has been duly
exercised ("the elected shares") and in lieu thereof shares of
the relevant class shall be allotted credited as fully paid up to
the holders of the elected shares on the basis of allotment
determined as aforesaid and for such purpose the Board shall
capitalise and apply out of any part of the undivided profits of
the Company (including profits carried and standing to the credit
of any reserves or other special account, share premium account,
capital
-39-
redemption reserve other than the Subscription Rights Reserve) as
the Board may determine, such sum as may be required to pay up in
full the appropriate number of shares of the relevant class for
allotment and distribution to and amongst the holders of the
elected shares on such basis.
(2) (a) The shares allotted pursuant to the provisions of paragraph (1)
of this Article shall rank pari passu in all respects with shares
of the same class (if any) then in issue save only as regards
participation in the relevant dividend or in any other
distributions, bonuses or rights paid, made, declared or
announced prior to or contemporaneously with the payment or
declaration of the relevant dividend unless, contemporaneously
with the announcement by the Board of their proposal to apply the
provisions of sub-paragraph (a) or (b) of paragraph (2) of this
Article in relation to the relevant dividend or contemporaneously
with their announcement of the distribution, bonus or rights in
question, the Board shall specify that the shares to be allotted
pursuant to the provisions of paragraph (1) of this Article shall
rank for participation in such distribution, bonus or rights.
(b) The Board may do all acts and things considered necessary or
expedient to give effect to any capitalisation pursuant to the
provisions of paragraph (1) of this Article, with full power to
the Board to make such provisions as it thinks fit in the case of
shares becoming distributable in fractions (including provisions
whereby, in whole or in part, fractional entitlements are
aggregated and sold and the net proceeds distributed to those
entitled, or are disregarded or rounded up or down or whereby the
benefit of fractional entitlements accrues to the Company rather
than to the Members concerned). The Board may authorise any
person to enter into on behalf of all Members interested, an
agreement with the Company providing for such capitalisation and
matters incidental thereto and any agreement made pursuant to
such authority shall be effective and binding on all concerned.
(3) The Company may upon the recommendation of the Board by ordinary
resolution resolve in respect of any one particular dividend of the Company that
notwithstanding the provisions of paragraph (1) of this Article a dividend may
be satisfied wholly in the form of an allotment of shares credited as fully paid
up without offering any right to shareholders to elect to receive such dividend
in cash in lieu of such allotment.
(4) The Board may on any occasion determine that rights of election and the
allotment of shares under paragraph (1) of this Article shall not be made
available or made to any shareholders with registered addresses in any territory
where, in the absence of a registration statement or other special formalities,
the circulation of an offer of such rights of election or the allotment of
shares would or might, in the opinion of the Board, be unlawful or
impracticable, and in such event the provisions aforesaid shall be read and
construed subject to such determination. Members affected as a result of the
foregoing sentence shall not be or be deemed to be a separate class of Members
for any purpose whatsoever.
-40-
(5) Any resolution declaring a dividend on shares of any class, whether a
resolution of the Company in general meeting or a resolution of the Board, may
specify that the same shall be payable or distributable to the persons
registered as the holders of such shares at the close of business on a
particular date, notwithstanding that it may be a date prior to that on which
the resolution is passed, and thereupon the dividend shall be payable or
distributable to them in accordance with their respective holdings so
registered, but without prejudice to the rights inter se in respect of such
dividend of transferors and transferees of any such shares. The provisions of
this Article shall mutatis mutandis apply to bonuses, capitalisation issues,
distributions of realised capital profits or offers or grants made by the
Company to the Members.
RESERVES
143. (1) The Board shall establish an account to be called the share premium
account and shall carry to the credit of such account from time to time a sum
equal to the amount or value of the premium paid on the issue of any share in
the Company. Unless otherwise provided by the provisions of these Articles, the
Board may apply the share premium account in any manner permitted by the Law.
The Company shall at all times comply with the provisions of the Law in relation
to the share premium account.
(2) Before recommending any dividend, the Board may set aside out of the
profits of the Company such sums as it determines as reserves which shall, at
the discretion of the Board, be applicable for any purpose to which the profits
of the Company may be properly applied and pending such application may, also at
such discretion, either be employed in the business of the Company or be
invested in such investments as the Board may from time to time think fit and so
that it shall not be necessary to keep any investments constituting the reserve
or reserves separate or distinct from any other investments of the Company. The
Board may also without placing the same to reserve carry forward any profits
which it may think prudent not to distribute.
CAPITALISATION
144. The Company may, upon the recommendation of the Board, at any time and from
time to time pass an ordinary resolution to the effect that it is desirable to
capitalise all or any part of any amount for the time being standing to the
credit of any reserve or fund (including a share premium account and capital
redemption reserve and the profit and loss account) whether or not the same is
available for distribution and accordingly that such amount be set free for
distribution among the Members or any class of Members who would be entitled
thereto if it were distributed by way of dividend and in the same proportions,
on the footing that the same is not paid in cash but is applied either in or
towards paying up the amounts for the time being unpaid on any shares in the
Company held by such Members respectively or in paying up in full unissued
shares, debentures or other obligations of the Company, to be allotted and
distributed credited as fully paid up among such Members, or partly in one way
and partly in the other, and the Board shall give effect to such resolution
provided that, for the purposes of this Article, a share premium account and any
capital redemption reserve or fund representing unrealised profits, may be
applied only in paying up in full unissued shares of the Company to be allotted
to such Members credited as fully paid.
-41-
145. The Board may settle, as it considers appropriate, any difficulty arising
in regard to any distribution under the last preceding Article and in particular
may issue certificates in respect of fractions of shares or authorise any person
to sell and transfer any fractions or may resolve that the distribution should
be as nearly as may be practicable in the correct proportion but not exactly so
or may ignore fractions altogether, and may determine that cash payments shall
be made to any Members in order to adjust the rights of all parties, as may seem
expedient to the Board. The Board may appoint any person to sign on behalf of
the persons entitled to participate in the distribution any contract necessary
or desirable for giving effect thereto and such appointment shall be effective
and binding upon the Members.
SUBSCRIPTION RIGHTS RESERVE
146. The following provisions shall have effect to the extent that they are not
prohibited by and are in compliance with the Law:
(1) If, so long as any of the rights attached to any warrants issued by
the Company to subscribe for shares of the Company shall remain
exercisable, the Company does any act or engages in any transaction
which, as a result of any adjustments to the subscription price in
accordance with the provisions of the conditions of the warrants,
would reduce the subscription price to below the par value of a share,
then the following provisions shall apply:
(a) as from the date of such act or transaction the Company shall
establish and thereafter (subject as provided in this Article)
maintain in accordance with the provisions of this Article a reserve
(the "Subscription Rights Reserve") the amount of which shall at no
time be less than the sum which for the time being would be required
to be capitalised and applied in paying up in full the nominal amount
of the additional shares required to be issued and allotted credited
as fully paid pursuant to sub-paragraph (c) below on the exercise in
full of all the subscription rights outstanding and shall apply the
Subscription Rights Reserve in paying up such additional shares in
full as and when the same are allotted;
(b) the Subscription Rights Reserve shall not be used for any purpose
other than that specified above unless all other reserves of the
Company (other than share premium account) have been extinguished and
will then only be used to make good losses of the Company if and so
far as is required by law;
(c) upon the exercise of all or any of the subscription rights represented
by any warrant, the relevant subscription rights shall be exercisable
in respect of a nominal amount of shares equal to the amount in cash
which the holder of such warrant is required to pay on exercise of the
subscription rights represented thereby (or, as the case may be the
relevant portion thereof in the event of a partial exercise of the
subscription rights) and, in addition, there shall be allotted in
respect of such subscription rights to the exercising warrantholder,
credited as fully paid, such additional nominal amount of shares as is
equal to the difference between:
(i) the said amount in cash which the holder of such warrant is
required to pay on exercise of the subscription rights
represented thereby (or, as the
-42-
case may be, the relevant portion thereof in the event of a
partial exercise of the subscription rights); and
(ii) the nominal amount of shares in respect of which such
subscription rights would have been exercisable having regard to
the provisions of the conditions of the warrants, had it been
possible for such subscription rights to represent the right to
subscribe for shares at less than par and immediately upon such
exercise so much of the sum standing to the credit of the
Subscription Rights Reserve as is required to pay up in full such
additional nominal amount of shares shall be capitalised and
applied in paying up in full such additional nominal amount of
shares which shall forthwith be allotted credited as fully paid
to the exercising warrantholders; and
(d) if, upon the exercise of the subscription rights represented by any
warrant, the amount standing to the credit of the Subscription Rights
Reserve is not sufficient to pay up in full such additional nominal
amount of shares equal to such difference as aforesaid to which the
exercising warrantholder is entitled, the Board shall apply any
profits or reserves then or thereafter becoming available (including,
to the extent permitted by law, share premium account) for such
purpose until such additional nominal amount of shares is paid up and
allotted as aforesaid and until then no dividend or other distribution
shall be paid or made on the fully paid shares of the Company then in
issue. Pending such payment and allotment, the exercising
warrantholder shall be issued by the Company with a certificate
evidencing his right to the allotment of such additional nominal
amount of shares. The rights represented by any such certificate shall
be in registered form and shall be transferable in whole or in part in
units of one share in the like manner as the shares for the time being
are transferable, and the Company shall make such arrangements in
relation to the maintenance of a register therefor and other matters
in relation thereto as the Board may think fit and adequate
particulars thereof shall be made known to each relevant exercising
warrantholder upon the issue of such certificate.
(2) Shares allotted pursuant to the provisions of this Article shall rank
pari passu in all respects with the other shares allotted on the relevant
exercise of the subscription rights represented by the warrant concerned.
Notwithstanding anything contained in paragraph (1) of this Article, no fraction
of any share shall be allotted on exercise of the subscription rights.
(3) The provision of this Article as to the establishment and maintenance
of the Subscription Rights Reserve shall not be altered or added to in any way
which would vary or abrogate, or which would have the effect of varying or
abrogating the provisions for the benefit of any warrantholder or class of
warrantholders under this Article without the sanction of a special resolution
of such warrantholders or class of warrantholders.
(4) A certificate or report by the auditors for the time being of the
Company as to whether or not the Subscription Rights Reserve is required to be
established and maintained and if so the amount thereof so required to be
established and maintained, as to the purposes for which the Subscription Rights
Reserve has been used, as to the extent to which it has been used to make good
losses of the Company, as to the additional nominal amount of shares required to
be allotted to exercising warrantholders credited as fully paid, and as to any
other matter
-43-
concerning the Subscription Rights Reserve shall (in the absence of manifest
error) be conclusive and binding upon the Company and all warrantholders and
shareholders.
ACCOUNTING RECORDS
147. The Board shall cause true accounts to be kept of the sums of money
received and expended by the Company, and the matters in respect of which such
receipt and expenditure take place, and of the property, assets, credits and
liabilities of the Company and of all other matters required by the Law or
necessary to give a true and fair view of the Company's affairs and to explain
its transactions.
148. The accounting records shall be kept at the Office or, at such other place
or places as the Board decides and shall always be open to inspection by the
Directors. No Member (other than a Director) shall have any right of inspecting
any accounting record or book or document of the Company except as conferred by
law or authorised by the Board or the Company in general meeting.
149. Subject to Article 150, a printed copy of the Directors' report,
accompanied by the balance sheet and profit and loss account, including every
document required by law to be annexed thereto, made up to the end of the
applicable financial year and containing a summary of the assets and liabilities
of the Company under convenient heads and a statement of income and expenditure,
together with a copy of the Auditors' report, shall be sent to each person
entitled thereto at least ten (10) days before the date of the general meeting
and laid before the Company at the annual general meeting held in accordance
with Article 56 provided that this Article shall not require a copy of those
documents to be sent to any person whose address the Company is not aware or to
more than one of the joint holders of any shares or debentures.
150. Subject to due compliance with all applicable Statutes, rules and
regulations, including, without limitation, the rules of the Designated Stock
Exchange, and to obtaining all necessary consents, if any, required thereunder,
the requirements of Article 149 shall be deemed satisfied in relation to any
person by sending to the person in any manner not prohibited by the Statutes, a
summary financial statement derived from the Company's annual accounts and the
directors' report which shall be in the form and containing the information
required by applicable laws and regulations, provided that any person who is
otherwise entitled to the annual financial statements of the Company and the
directors' report thereon may, if he so requires by notice in writing served on
the Company, demand that the Company sends to him, in addition to a summary
financial statement, a complete printed copy of the Company's annual financial
statement and the directors' report thereon.
151. The requirement to send to a person referred to in Article 149 the
documents referred to in that article or a summary financial report in
accordance with Article 150 shall be deemed satisfied where, in accordance with
all applicable Statutes, rules and regulations, including, without limitation,
the rules of the Designated Stock Exchange, the Company publishes copies of the
documents referred to in Article 149 and, if applicable, a summary financial
report complying with Article 150, on the Company's computer network or in any
other permitted manner (including by sending any form of electronic
communication), and that person has agreed or is deemed to have agreed to treat
the publication or receipt of such documents in such manner as discharging the
Company's obligation to send to him a copy of such documents.
-44-
AUDIT
152. Subject to applicable law and rules of the Designated Stock Exchange:
(1) At the annual general meeting or at a subsequent extraordinary general
meeting in each year, the Members shall appoint an auditor to audit the accounts
of the Company and such auditor shall hold office until the Members appoint
another auditor. Such auditor may be a Member but no Director or officer or
employee of the Company shall, during his continuance in office, be eligible to
act as an auditor of the Company.
(2) A person, other than a retiring Auditor, shall not be capable of being
appointed Auditor at an annual general meeting unless notice in writing of an
intention to nominate that person to the office of Auditor has been given not
less than fourteen (14) days before the annual general meeting and furthermore,
the Company shall send a copy of any such notice to the retiring Auditor.
(3) The Members may, at any general meeting convened and held in accordance
with these Articles, by special resolution remove the Auditor at any time before
the expiration of his term of office and shall by ordinary resolution at that
meeting appoint another Auditor in his stead for the remainder of his term.
153. Subject to the Law the accounts of the Company shall be audited at least
once in every year.
154. The remuneration of the Auditor shall be fixed by the Board.
155. If the office of auditor becomes vacant by the resignation or death of the
Auditor, or by his becoming incapable of acting by reason of illness or other
disability at a time when his services are required, the Directors shall fill
the vacancy and determine the remuneration of such Auditor.
156. The Auditor shall at all reasonable times have access to all books kept by
the Company and to all accounts and vouchers relating thereto; and he may call
on the Directors or officers of the Company for any information in their
possession relating to the books or affairs of the Company.
157. The statement of income and expenditure and the balance sheet provided for
by these Articles shall be examined by the Auditor and compared by him with the
books, accounts and vouchers relating thereto; and he shall make a written
report thereon stating whether such statement and balance sheet are drawn up so
as to present fairly the financial position of the Company and the results of
its operations for the period under review and, in case information shall have
been called for from Directors or officers of the Company, whether the same has
been furnished and has been satisfactory. The financial statements of the
Company shall be audited by the Auditor in accordance with generally accepted
auditing standards. The Auditor shall make a written report thereon in
accordance with generally accepted auditing standards and the report of the
Auditor shall be submitted to the Members in general meeting. The generally
accepted auditing standards referred to herein may be those of a country or
-45-
jurisdiction other than the Cayman Islands. If so, the financial statements and
the report of the Auditor should disclose this act and name such country or
jurisdiction.
NOTICES
158. Any Notice or document, whether or not, to be given or issued under these
Articles from the Company to a Member shall be in writing or by cable, telex or
facsimile transmission message or other form of electronic transmission or
communication and any such Notice and document may be served or delivered by the
Company on or to any Member either personally or by sending it through the post
in a prepaid envelope addressed to such Member at his registered address as
appearing in the Register or at any other address supplied by him to the Company
for the purpose or, as the case may be, by transmitting it to any such address
or transmitting it to any telex or facsimile transmission number or electronic
number or address or website supplied by him to the Company for the giving of
Notice to him or which the person transmitting the notice reasonably and bona
fide believes at the relevant time will result in the Notice being duly received
by the Member or may also be served by advertisement in appropriate newspapers
in accordance with the requirements of the Designated Stock Exchange or, to the
extent permitted by the applicable laws, by placing it on the Company's website
and giving to the member a notice stating that the notice or other document is
available there (a "notice of availability"). The notice of availability may be
given to the Member by any of the means set out above. In the case of joint
holders of a share all notices shall be given to that one of the joint holders
whose name stands first in the Register and notice so given shall be deemed a
sufficient service on or delivery to all the joint holders.
159. Any Notice or other document:
(a) if served or delivered by post, shall where appropriate be sent by
airmail and shall be deemed to have been served or delivered on the
day following that on which the envelope containing the same, properly
prepaid and addressed, is put into the post; in proving such service
or delivery it shall be sufficient to prove that the envelope or
wrapper containing the notice or document was properly addressed and
put into the post and a certificate in writing signed by the Secretary
or other officer of the Company or other person appointed by the Board
that the envelope or wrapper containing the notice or other document
was so addressed and put into the post shall be conclusive evidence
thereof;
(b) if sent by electronic communication, shall be deemed to be given on
the day on which it is transmitted from the server of the Company or
its agent. A notice placed on the Company's website is deemed given by
the Company to a Member on the day following that on which a notice of
availability is deemed served on the Member;
(c) if served or delivered in any other manner contemplated by these
Articles, shall be deemed to have been served or delivered at the time
of personal service or delivery or, as the case may be, at the time of
the relevant despatch or transmission; and in proving such service or
delivery a certificate in writing signed by the Secretary or other
officer of the Company or other person
-46-
appointed by the Board as to the act and time of such service,
delivery, despatch or transmission shall be conclusive evidence
thereof; and
(d) may be given to a Member either in the English language or the Chinese
language, subject to due compliance with all applicable Statutes,
rules and regulations.
160. (1) Any Notice or other document delivered or sent by post to or left at
the registered address of any Member in pursuance of these Articles shall,
notwithstanding that such Member is then dead or bankrupt or that any other
event has occurred, and whether or not the Company has notice of the death or
bankruptcy or other event, be deemed to have been duly served or delivered in
respect of any share registered in the name of such Member as sole or joint
holder unless his name shall, at the time of the service or delivery of the
notice or document, have been removed from the Register as the holder of the
share, and such service or delivery shall for all purposes be deemed a
sufficient service or delivery of such Notice or document on all persons
interested (whether jointly with or as claiming through or under him) in the
share.
(2) A notice may be given by the Company to the person entitled to a share
in consequence of the death, mental disorder or bankruptcy of a Member by
sending it through the post in a prepaid letter, envelope or wrapper addressed
to him by name, or by the title of representative of the deceased, or trustee of
the bankrupt, or by any like description, at the address, if any, supplied for
the purpose by the person claiming to be so entitled, or (until such an address
has been so supplied) by giving the notice in any manner in which the same might
have been given if the death, mental disorder or bankruptcy had not occurred.
(3) Any person who by operation of law, transfer or other means whatsoever
shall become entitled to any share shall be bound by every notice in respect of
such share which prior to his name and address being entered on the Register
shall have been duly given to the person from whom he derives his title to such
share.
SIGNATURES
161. For the purposes of these Articles, a cable or telex or facsimile or
electronic transmission message purporting to come from a holder of shares or,
as the case may be, a Director, or, in the case of a corporation which is a
holder of shares from a director or the secretary thereof or a duly appointed
attorney or duly authorised representative thereof for it and on its behalf,
shall in the absence of express evidence to the contrary available to the person
relying thereon at the relevant time be deemed to be a document or instrument in
writing signed by such holder or Director in the terms in which it is received.
WINDING UP
162. (1) The Board shall have power in the name and on behalf of the Company to
present a petition to the court for the Company to be wound up.
-47-
(2) A resolution that the Company be wound up by the court or be wound up
voluntarily shall be a special resolution.
163. (1) Subject to any special rights, privileges or restrictions as to the
distribution of available surplus assets on liquidation for the time being
attached to any class or classes of shares (i) if the Company shall be wound up
and the assets available for distribution amongst the Members of the Company
shall be more than sufficient to repay the whole of the capital paid up at the
commencement of the winding up, the excess shall be distributed pari passu
amongst such members in proportion to the amount paid up on the shares held by
them respectively and (ii) if the Company shall be wound up and the assets
available for distribution amongst the Members as such shall be insufficient to
repay the whole of the paid-up capital such assets shall be distributed so that,
a nearly as may be, the losses shall be borne by the Members in proportion to
the capital paid up, or which ought to have been paid up, at the commencement of
the winding up on the shares held by them respectively.
(2) If the Company shall be wound up (whether the liquidation is voluntary
or by the court) the liquidator may, with the authority of a special resolution
and any other sanction required by the Law, divide among the Members in specie
or kind the whole or any part of the assets of the Company and whether or not
the assets shall consist of properties of one kind or shall consist of
properties to be divided as aforesaid of different kinds, and may for such
purpose set such value as he deems fair upon any one or more class or classes of
property and may determine how such division shall be carried out as between the
Members or different classes of Members. The liquidator may, with the like
authority, vest any part of the assets in trustees upon such trusts for the
benefit of the Members as the liquidator with the like authority shall think
fit, and the liquidation of the Company may be closed and the Company dissolved,
but so that no contributory shall be compelled to accept any shares or other
property in respect of which there is a liability.
(3) In the event of winding-up of the Company in the People's Republic of
China, every Member of the Company who is not for the time being in the People's
Republic of China shall be bound, within 14 days after the passing of an
effective resolution to wind up the Company voluntarily, or the making of an
order for the winding-up of the Company, to serve notice in writing on the
Company appointing some person resident in the People's Republic of China and
stating that person's full name, address and occupation upon whom all summonses,
notices, process, orders and judgements in relation to or under the winding-up
of the Company may be served, and in default of such nomination the liquidator
of the Company shall be at liberty on behalf of such Member to appoint some such
person, and service upon any such appointee, whether appointed by the Member or
the liquidator, shall be deemed to be good personal service on such Member for
all purposes, and, where the liquidator makes any such appointment, he shall
with all convenient speed give notice thereof to such Member by advertisement as
he shall deem appropriate or by a registered letter sent through the post and
addressed to such Member at his address as appearing in the register, and such
notice shall be deemed to be service on the day following that on which the
advertisement first appears or the letter is posted.
-48-
INDEMNITY
164. (1) The Directors, Secretary and other officers and every Auditor for the
time being of the Company and the liquidator or trustees (if any) for the time
being acting in relation to any of the affairs of the Company and everyone of
them, and everyone of their heirs, executors and administrators, shall be
indemnified and secured harmless out of the assets and profits of the Company
from and against all actions, costs, charges, losses, damages and expenses which
they or any of them, their or any of their heirs, executors or administrators,
shall or may incur or sustain by or by reason of any act done, concurred in or
omitted in or about the execution of their duty, or supposed duty, in their
respective offices or trusts; and none of them shall be answerable for the acts,
receipts, neglects or defaults of the other or others of them or for joining in
any receipts for the sake of conformity, or for any bankers or other persons
with whom any moneys or effects belonging to the Company shall or may be lodged
or deposited for safe custody, or for insufficiency or deficiency of any
security upon which any moneys of or belonging to the Company shall be placed
out on or invested, or for any other loss, misfortune or damage which may happen
in the execution of their respective offices or trusts, or in relation thereto;
PROVIDED THAT this indemnity shall not extend to any matter in respect of any
fraud or dishonesty which may attach to any of said persons.
(2) Each Member agrees to waive any claim or right of action he might have,
whether individually or by or in the right of the Company, against any Director
on account of any action taken by such Director, or the failure of such Director
to take any action in the performance of his duties with or for the Company;
PROVIDED THAT such waiver shall not extend to any matter in respect of any fraud
or dishonesty which may attach to such Director.
AMENDMENT TO MEMORANDUM AND ARTICLES OF ASSOCIATION
AND NAME OF COMPANY
165. No Article shall be rescinded, altered or amended and no new Article shall
be made until the same has been approved by a special resolution of the Members.
A special resolution shall be required to alter the provisions of the Memorandum
of Association or to change the name of the Company.
INFORMATION
166. No Member shall be entitled to require discovery of or any information
respecting any detail of the Company's trading or any matter which is or may be
in the nature of a trade secret or secret process which may relate to the
conduct of the business of the Company and which in the opinion of the Directors
it will be inexpedient in the interests of the members of the Company to
communicate to the public.
-49-