EXHIBIT 1.2
BY-LAW NO. 1
------------
A by-law relating generally to the conduct of the business and affairs of
BREAKWATER RESOURCES LTD.
(herein called the "Corporation")
CONTENTS
1. Interpretation
2. Directors
3. Meetings of Directors 4. Remuneration and Indemnification 5. Officers 6.
Meetings of Shareholders 7. Shares 8. Dividends 9. Fiscal Year 10. Notices 11.
Execution of Documents 12. Effective Date 13. Repeal
BE IT ENACTED as a by-law of the Corporation as follows:
1. INTERPRETATION
--------------
1.01 In this by-law and all other by-laws and resolutions of the
Corporation, unless the context otherwise requires:
(a) "Act" means the CANADA BUSINESS CORPORATIONS ACT together with
the Regulations made pursuant thereto and any statute or
regulations that may be substituted therefor as amended from
time to time;
(b) "articles" means the articles of continuance of the
Corporation as amended or restated from time to time;
(c) "board" means the board of directors of the Corporation;
(d) "by-laws" means this by-law and all other by-laws of the
Corporation as amended from time to time, and from time to
time in force and effect;
1
(e) "Corporation" means this Corporation;
(f) "meeting of shareholders" means any meeting of shareholders,
whether annual or special; and "special meeting of
shareholders" means a special meeting of all shareholders
entitled to vote at an annual meeting of shareholders and a
meeting of any class or classes of shareholders entitled to
vote on the question at issue;
(g) "person" includes an individual, partnership, association,
body corporate, trustee, executor, administrator or legal
representative;
(h) "recorded address" means, in the case of a shareholder, his
address as recorded in the shareholders' register; and, in the
case of joint shareholders, the address appearing in the
shareholders' register in respect of such joint holding or the
first address so appearing if there are more than one; and, in
the case of a director, officer, auditor or member of a
committee of the board, his or her latest address recorded in
the records of the Corporation; and
(i) "unanimous shareholder agreement" shall have the meaning
ascribed to such term under the Act.
1.02 In this by-law where the context requires, words importing the singular
include the plural and vice versa and words importing gender include
the masculine, feminine and neuter genders.
1.03 Save as aforesaid, words and expressions defined in the Act shall have
the same meanings when used herein.
2. DIRECTORS
---------
2.01 POWERS - Subject to any unanimous shareholder agreement, the board of
directors shall manage, or supervise the management of, the business
and affairs of the Corporation.
Until changed in accordance with the Act, the board shall consist of
not fewer than the minimum number and not more than the maximum number
of directors provided for in the articles.
2
2.02 QUALIFICATIONS - No person shall be qualified for election as a
director if he or she is less than 18 years of age: if he or she is of
unsound mind and has been so found by a court in Canada or elsewhere;
if he or she is not an individual; or if he or she has the status of a
bankrupt.
2.03 ELECTION AND TERM - The election of directors shall take place at the
first meeting of shareholders and at each succeeding annual meeting at
which an election of directors is required. The directors shall hold
office for an expressly stated term, which shall expire not later than
the close of the third annual meeting of shareholders following the
election. A director not elected for an expressly stated term ceases to
hold office at the close of the first annual meeting of shareholders
following his or her election. Incumbent directors, if qualified, shall
be eligible for re-election. If an election of directors is not held at
the proper time, the incumbent directors shall continue in office until
their successors are elected.
2.04 REMOVAL - Subject to the provisions of the Act, the shareholders may,
by resolution passed by a majority of the votes cast at a special
meeting of shareholders duly called for that purpose, remove any
director before the expiration of his or her term of office and may, by
a majority of votes cast at the meeting, elect any person in his or her
stead for the remainder of his or her term, failing which such vacancy
may be filled by the board.
2.05 VACATION OF OFFICE - A director ceases to hold office when he or she
dies; he or she is removed from office by the shareholders; he or she
ceases to be qualified for election as a director; or his or her
written resignation is sent or delivered to the Corporation, or if a
time is specified in such resignation, at the time so specified,
whichever is later.
2.06 VACANCIES - Subject to the provisions of the Act, a quorum of the board
may fill a vacancy in the board, except a vacancy resulting from a
failure to elect the number or minimum number of directors required by
the articles. If there is not a quorum of directors, or if there has
been a failure to elect the number or minimum number of directors
required by the articles, the directors then in office shall forthwith
call a special meeting of shareholders to fill the vacancy, and, if
they fail to do so or if there are no directors then in office, the
meeting may be called by any shareholder.
3. MEETINGS OF DIRECTORS
---------------------
3.01 PLACE OF MEETINGS - Meetings of the board of directors may be held at
any place in or outside Canada.
3
3.02 QUORUM - A majority of the number of directors or minimum number of
directors required by the articles constitutes a quorum at any meeting
of directors, and, notwithstanding any vacancy among the directors, a
quorum of directors may exercise all the powers of the directors.
3.03 RESIDENT CANADIANS - Directors shall not transact business at a meeting
of directors unless at least 25% of the directors present are resident
Canadians, provided however, if the Corporation has less than four
directors at least one director must be a resident Canadian.
3.04 Notwithstanding Section 3.03, directors may transact business at a
meeting of directors where the number of resident Canadian directors is
not present if,
(a) a resident Canadian director who is unable to be present
approves in writing or by telephonic, electronic or other
communications facilities the business transacted of the
meeting; and
(b) the required number of resident Canadian directors would have
been present had that director been present at the meeting.
3.05 CALLING OF MEETINGS - Meetings of the board shall be held from time to
time at such place, at such time and on such day as the chairman of the
board, the managing director, the president or any two directors may
determine, and the secretary shall call meetings when so directed or
authorized.
3.06 NOTICE OF MEETING - Notice of the time and place of every meeting so
called shall be given to each director not less than 48 hours before
the time when the meeting is to be held, except that no notice of a
meeting shall be necessary if all the directors are present or if those
absent have waived notice of or otherwise signified their consent to
the holding of such meeting. A notice of a meeting of directors need
not specify the purpose of or the business to be transacted at the
meeting except where the Act requires such purpose or business to be
specified, including any proposal to:
(a) submit to the shareholders any question or matter requiring
approval of the shareholders;
(b) fill a vacancy among the directors or in the office of an
auditor;
(c) issue securities;
4
(d) declare dividends;
(e) purchase, redeem or otherwise acquire shares of the
Corporation;
(f) pay a commission for the sale of shares;
(g) approve a management proxy circular;
(h) approve a take-over bid circular or directors' circular;
(i) approve any annual financial statements; or
(j) adopt, amend or repeal by-laws.
3.06 REGULAR MEETINGS - The board may appoint a day or days in any month or
months for regular meetings at a place and hour to be named. A copy of
any resolution of the board fixing the place and time of regular
meetings of the board shall be sent to each director forthwith after
being passed, but no other notice shall be required for any such
regular meetings except where the Act requires the purpose thereof or
the business to be transacted thereof to be specified.
3.07 FIRST MEETING OF NEW BOARD - Each newly elected board may without
notice hold its first meeting following a meeting of shareholders at
which such board is elected, provided that a quorum of directors is
present.
3.08 VOTES TO GOVERN - At all meetings of the board, every question shall be
decided by a majority of the votes cast on the question.
3.09 CASTING VOTE - In the case of an equality of votes on any question at a
meeting of the board, the chairman of the meeting shall not be entitled
to a second or casting vote.
3.10 DISCLOSURE OF INTERESTS IN CONTRACTS - Every director or officer of the
Corporation who is a party to a material contract or transaction or
proposed material contract or transaction with the Corporation, or is a
director or officer of or has a material interest in any person who is
a party to a material contract or transaction or proposed material
contract or transaction with the Corporation shall disclose in writing
to the Corporation or request to have entered in the minutes of a
meeting of directors the nature and extent of his or her interest at
the time and in the manner required by the
5
Act. Any such contract or proposed contract shall be referred to the
board or shareholders for approval even if such contract is one that in
the ordinary course of the Corporation's business would not require
approval by the board or the shareholders, and a director interested in
a contract so referred to the board shall not vote on any resolution to
approve the same except as provided by the Act.
3.11 WAIVER OF NOTICE - A director may in any manner waive a notice of a
meeting of directors; and attendance of a director at a meeting of
directors is a waiver of notice of the meeting, except where a director
attends a meeting for the express purpose of objecting to the
transactions of any business on the grounds that the meeting is not
lawfully called.
3.12 PARTICIPATION BY TELEPHONE - A director may, if all the directors of
the Corporation consent, participate in a meeting of directors or of a
committee of directors by means of such telephonic, electronic or other
communications facilities as permit all persons participating at the
meeting to hear each other, and a director participating in such a
meeting is deemed to be present at the meeting.
3.13 ADJOURNMENT - Notice of an adjourned meeting of directors is not
required to be given if the time and place of the adjourned meeting is
announced at the original meeting.
3.14 DELEGATION - Directors may appoint from their number a managing
director who is a resident Canadian or a committee of directors and
delegate to such managing director or committee any of the powers of
the directors.
3.15 RESOLUTION IN LIEU OF MEETING - A resolution in writing, signed by all
the directors entitled to vote on that resolution at a meeting of
directors or committee of directors, is as valid as if it had been
passed at a meeting of directors or committee of directors. A copy of
every such resolution shall be kept with the minutes of the proceedings
of the directors or committee of directors.
3.16 ONE DIRECTOR MEETING - If the Corporation has only one director, that
director may constitute a meeting.
4. REMUNERATION AND INDEMNIFICATION
--------------------------------
6
4.01 REMUNERATION - Subject to any unanimous shareholder agreement, the
directors shall be paid such remuneration as may from time to time be
determined by the board, nothing herein shall preclude any director
from serving the Corporation in any other capacity and receiving
remuneration therefor. In addition, directors shall be paid such sums
in respect of their out-of-pocket expenses incurred in attending board,
committee or shareholders meetings or otherwise in respect of the
performance by them of their duties as the board may from time to time
determine.
4.02 LIMITATION OF LIABILITY - Every director and officer of the
Corporation, In exercising his or her powers and discharging his or her
duties, shall act honestly and in good faith with a view to the best
interests of the Corporation, and exercise the care, diligence and
skill that a reasonably prudent person would exercise in comparable
circumstances. Subject to the foregoing, no director or officer shall
be liable for the acts, receipts, neglects or defaults of any other
director or officer or employee, or for joining in any receipt or other
act for conformity, or for any loss, damage or expense happening to the
Corporation through the insufficiency or deficiency of title to any
property acquired for or on behalf of the Corporation, or for the
insufficiency or deficiency of any security in or upon which any of the
monies of the Corporation shall be invested, or for any loss or damage
arising from the bankruptcy, insolvency or tortious acts of any person
with whom any of the monies, securities or effects of the Corporation
shall be deposited, or for any loss occasioned by any error of judgment
or oversight on his or her part, or for any other loss, damage or
misfortune whatever, which shall happen in the execution of the duties
of his or her office or in relation thereto, unless the same are
occasioned by his or her own willful neglect or default; provided that
nothing herein shall relieve any director or officer from the duty to
act in accordance with the Act or from liability for any breach
thereof.
4.03 INDEMNITY OF DIRECTORS AND OFFICERS, - Subject to the provisions of the
Act, the Corporation shall indemnify a director or officer of the
Corporation, a former director or officer of the Corporation, or a
person who acts or acted at the Corporation's request as a director or
officer, or an individual acting in a similar capacity, of another
entity, and his or her heirs and legal representatives, against all
costs, charges and expenses, including an amount paid to settle an
action or satisfy a judgment, reasonably incurred by him in respect of
any civil, criminal, administrative action, investigative or other
proceeding to which he or she is involved because of that association
with the Corporation or other entity, if,
a. the individual acted honestly and in good faith with a view to
the best interests of the Corporation or as the case may be,
to the best interests of
7
the other entity for which the individual acted as director or
officer or in a similar capacity at the Corporation's request;
and
b. in the case of a criminal or administrative action or
proceeding that is enforced by a monetary penalty, he had
reasonable grounds for believing that his or her conduct was
lawful.
The Corporation shall also indemnify such person in such other
circumstances as the Act permits or requires. Nothing in this by-law
shall limit the right of any person entitled to indemnity to claim
indemnity apart from the provisions of this by-law.
4.04 Insurance - Subject to the Act, the Corporation may purchase and
maintain such insurance for the benefit of the directors, officers and
persons referred to in section 4.03, as the board may from time to time
determine.
5. OFFICERS
--------
5.01 APPOINTMENT - Subject to the provisions of the Act, the articles or any
unanimous shareholder agreement, the board may from time to time
appoint a president, one or more vice-presidents (to which title may be
added words indicating seniority or function), a secretary, a treasurer
and such other officers as the board may determine, including one or
more assistants to any of the officers so appointed. The board may
specify the duties of and, in accordance with this by-law and subject
to the provisions of the Act, delegate to such officers powers to
manage the business and affairs of the Corporation. Save for the
chairman of the board and the managing director, an officer may but
need not be a director and one person may hold more than one office.
5.02 TERM, REMUNERATION AND REMOVAL - The terms of employment and
remuneration of all officers elected or appointed by the board
(including the president) shall be determined from time to time by
resolution of the board. The fact that any officer or employee is a
director or shareholder of the Corporation shall not disqualify him or
her from receiving such remuneration as may be determined. All
officers, in the absence of agreement to the contrary, shall be subject
to removal by resolution of the board at any time with or without
cause.
5.03 CHAIRMAN OF THE BOARD - The board may from time to time also appoint a
chairman of the board who shall be a director. If appointed, the board
may assign to him any of
8
the powers and duties that are by any provisions of this by-law capable
of being assigned to the president; and he shall, subject to the
provisions of the Act, have such other powers and duties as the board
may specify, During the absence or disability of the chairman of the
board, his or her duties shall be performed and his or her powers
exercised by the president.
5.04 MANAGING DIRECTOR - The board may from time to time appoint a managing
director who shall be a resident Canadian and a director. If appointed,
he or she shall be the chief executive officer and, subject to the
authority of the board, shall have general supervision of the business
and affairs of the Corporation; and he or she shall, subject to the
provisions of the Act, have such other powers and duties as the board
may specify. During the absence or disability of the president, or if
no president has been appointed, the managing director shall also have
the powers and duties of that office.
5.05 PRESIDENT - The president shall be the chief operating officer of the
Corporation and if no managing director has been appointed and, subject
to the authority of the board, shall have the general supervision of
the business and affairs of the Corporation and shall have such other
powers and duties as the board may specify. During the absence or
disability of the managing director, or if no managing director has
been appointed, the president shall also have the powers and the duties
of that office.
5.06 VICE-PRESIDENT - The board may from time to time appoint one or more
vice-presidents. A vice-president so appointed shall have such powers
and such duties as the board or the chief executive officer may
prescribe.
5.07 SECRETARY - The board may from time to time appoint a secretary. The
secretary shall attend all meetings of the directors, shareholders and
committees of the board and shall enter or cause to be entered in books
kept for that purpose minutes of all proceedings at such meetings; he
or she shall give, or cause to be given, when instructed, notices
required to be given to shareholders, directors, auditors and members
of committees; he or she shall be the custodian of the stamp or
mechanical device generally used for affixing the corporate seal of the
Corporation and of all books, papers, records, documents and other
instruments belonging to the Corporation; and he or she shall perform
such other duties as may from time to time be prescribed by the board.
5.08 TREASURER - The board may from time to time appoint a treasurer. The
treasurer shall keep, or cause to be kept proper accounting records as
required by the Act; he or she shall deposit or cause to be deposited
all monies received by the Corporation in
9
the Corporation's bank account; he or she shall, under the direction of
the board, supervise the safekeeping of securities and the disbursement
of the funds of the Corporation; he or she shall render to the board,
whenever required, an account of all his or her transactions as
treasurer and of the financial position of the Corporation; and he or
she shall perform such other duties as may from time to time be
prescribed by the board.
5.09 OTHER OFFICERS - The duties of all other officers of the Corporation
shall be such as the terms of their engagement call for or the board
requires of them. Any of the powers and duties of an officer to whom an
assistant has been appointed may be exercised and performed by such
assistant, unless the board otherwise directs.
5.10 VARIATION OF DUTIES - From time to time and subject to the provisions
of the Act, the board may vary, add to or limit the powers and duties
of any officer.
5.11 AGENTS AND ATTORNEYS - The board shall have power from time to time to
appoint agents or attorneys for the Corporation in or outside of Canada
with such powers of management or otherwise (including the power to
sub-delegate) as may be thought fit.
5.12 FIDELITY BONDS - The board may require such officers, employees and
agents of the Corporation as it deems advisable to furnish bonds for
the faithful performance of their duties, in such form and with such
surety as the board may from time to time prescribe.
5.13 CONFLICT OF INTEREST - An officer shall disclose his or her interest in
any material contract or transaction or proposed material contract or
transaction with the Corporation at the time and in the manner provided
by the Act.
6. MEETINGS OF SHAREHOLDERS
------------------------
6.01 ANNUAL MEETINGS - The annual meeting of shareholders of the Corporation
shall be held at such time and on such day in each year as the board
may from time to time determine, for the purpose of receiving the
reports and statements required by the Act to be laid before the annual
meeting, electing directors, appointing auditors and for the
transaction of such other business as may properly be brought before
the meeting.
10
6.02 SPECIAL MEETINGS - The directors may at any time call a special meeting
of shareholders, for the transaction of any business, which may
properly be brought before such a meeting of shareholders. All business
transacted at an annual meeting of shareholders, except consideration
of the financial statements, auditor's report, election of directors
and re-appointment of the incumbent auditor, is deemed to be special
business.
6.03 PLACE OF MEETINGS - Meetings of shareholders shall be held at the
registered office of the Corporation, or at such other place within
Canada as the directors from time to time determine, or if all the
shareholders entitled to vote at the meeting so agree, at some place
outside Canada.
6.04 PARTICIPATION BY ELECTRONIC MEANS - If permitted by the Act, any person
entitled to attend a meeting of shareholders may participate in the
meeting, in accordance with the regulations under the Act, if any, by
means of telephonic, electronic or other communication facility that
permits all participants to communicate adequately with each other
during the meeting, if the Corporation makes available such a
communication facility. A person participating in a meeting by such
means is deemed for the purposes of the Act to be present at the
meeting.
6.05 MEETING HELD BY ELECTRONIC MEANS - If the directors or the shareholders
of the Corporation call a meeting of shareholders pursuant to the Act,
those directors or shareholders, as the case may be, may determine that
the meeting shall be held, in accordance with the regulations under the
Act, if any, entirely by means of a telephonic, electronic or other
communication facility that permits all participants to communicate
adequately with each other during the meeting.
6.06 NOTICE OF MEETINGS - Notice of the time and place of each meeting of
shareholders shall be sent not less than 21 days and not more than 60
days before the date of the meeting to the auditor of the Corporation,
to each director, and to each person whose name appears on the records
of the Corporation at the close of business on the day next preceding
the giving of the notice as a shareholder entitled to vote at the
meeting. Notice of a meeting of shareholders shall state:
(a) the nature of the business to be transacted at the meeting in
sufficient detail to permit the shareholders to form a
reasoned judgment thereon; and
(b) the text of any special resolution or by-law to be submitted
to the meeting.
11
A shareholder and any other person entitled to attend a meeting of
shareholders may in any manner and at any time waive notice of or
otherwise consent to a meeting of shareholders.
6.07 PERSONS ENTITLED TO BE PRESENT - The only persons entitled to attend a
meeting of shareholders shall be those entitled to vote thereat, the
directors and the auditor of the Corporation and others who although
not entitled to vote are entitled or required under any provision of
the Act or by-laws of the Corporation to be present at the meeting. Any
other persons may be admitted only on the invitation of the chairman of
the meeting or with the consent of the meeting.
6.08 QUORUM - subject to the provisions of the Act, two shareholders,
present in person or by proxy, constitute a quorum for the transaction
of business at any meeting of shareholders.
6.09 ONE SHAREHOLDER MEETING - If the Corporation has only one shareholder,
or only one holder of any class or series of shares, the shareholder
present in person or by proxy constitutes a meeting.
6.10 RIGHT TO VOTE - At any meeting of shareholders, unless the articles
otherwise provide, each share of the Corporation entitles the holder
thereof to one vote at a meeting of shareholders, subject to the
provisions of the Act.
6.11 JOINT SHAREHOLDERS - Where two or more persons hold the same share or
shares jointly, any one of such persons present at a meeting of
shareholders may in the absence of the others vote the shares but, if
two or more of such persons who are present in person or by proxy,
vote, they shall vote as one on the shares jointly held by them.
6.12 PROXIES - Every shareholder entitled to vote at a meeting of
shareholders may, by means of a proxy, appoint a proxyholder or one or
more alternate proxyholders who are not required to be shareholders to
attend and act at the meeting in the manner and to the extent
authorized by the proxy and with the authority conferred by the proxy.
A proxy shall be in writing and executed by the shareholder or by his
or her attorney authorized in writing and shall conform with the
requirements of the Act. The board may specify in a notice calling a
meeting of shareholders a time, preceding the time of such meeting by
not more than 48 hours exclusive of non-business days, before which
time the proxies to be used at such meeting must be deposited. A proxy
shall be acted upon only if, prior to the time so specified, it shall
have been deposited with the Corporation or an agent thereof specified
in such notice or, where no time is specified in such notice, the proxy
has been received by the secretary of the Corporation or by the
chairman of the meeting or any adjournment thereof prior to the time of
voting.
12
6.13 SCRUTINEERS - At each meeting of shareholders one or more scrutineers
may be appointed by a resolution of the meeting or by the chairman with
the consent of the meeting to serve at the meeting. Such scrutineers
need not be shareholders of the Corporation.
6.14 VOTES TO GOVERN - Unless otherwise required by the Act, or the articles
or by-laws of the Corporation or a unanimous shareholder agreement, all
questions proposed for the consideration of the shareholders at a
meeting shall be decided by a majority of the votes cast thereon. In
case of an equality of votes either upon a show of hands or upon a
poll, the chairman of the meeting shall not be entitled to a second or
casting vote.
6.15 SHOW OF HANDS - Subject to the provisions of the Act, at all meetings
of shareholders every question shall be decided by a show of hands
unless a ballot thereon be required by the chairman or be demanded by a
shareholder or proxyholder present and entitled to vote. Upon a show of
hands every person present and entitled to vote, has one vote
regardless of the number of shares he represents. After a show of hands
has been taken upon any question, the chairman may require or any
shareholder or proxyholder present and entitled to vote may demand a
ballot thereon. Whenever a vote by show of hands shall have been taken
upon a question, unless a ballot thereon be so required or demanded, a
declaration by the chairman that the vote upon the question has been
carried or carried by a particular majority or not carried and an entry
to that effect in the minutes of the meeting shall be prima facie
evidence of the fact without proof of the number or proportion of the
votes recorded in favour of or against the question. The result of the
vote so taken and declared shall be the decision of the Corporation on
the question. A demand for a ballot may be withdrawn at any time prior
to the taking of the ballot.
6.16 ELECTRONIC VOTING - Despite section 6.15, any vote referred to in
section 8.18 may be held in accordance with the regulations, if any,
entirely by means of telephonic, electronic or other communication
facility, if the Corporation makes available such communication
facility.
6.17 VOTING WHILE PARTICIPATING ELECTRONICALLY - Any person participating in
a meeting under section 6.04 and 6.05 and entitled to vote at that
meeting, may vote, in
13
accordance with the regulations, if any, by means of the telephonic,
electronic or other communication facility that the Corporation has
made available for that purpose.
6.18 BALLOTS - If a ballot is required by the chairman of the meeting or is
demanded and the demand is not withdrawn, a ballot upon the question
shall be taken in such manner as the chairman of the meeting directs.
6.19 ADJOURNMENT - The chairman of a meeting of shareholders may, with the
consent of the meeting and subject to such conditions as the meeting
may decide, adjourn the meeting from time to time and from place to
place.
7. SHARES
------
7.01 ALLOTMENT - Subject to the provisions of the Act, the articles and any
unanimous shareholder agreement, the board may from time to time allot
or grant options to purchase the whole or any part of the authorized
and unissued shares of the Corporation at such time and to such persons
and for such consideration as the board shall determine, provided that
no share shall be issued until it is fully paid as provided by the Act.
7.02 SHARE CERTIFICATES - Every holder of one or more shares of the
Corporation is entitled, at the shareholder's option, to a share
certificate, or to a non-transferable written acknowledgment of the
shareholder's right to obtain a share certificate, showing the number
and class or series of shares held by the shareholder as shown on the
records of the Corporation. Share certificates and acknowledgments of a
shareholder's right to a share certificate, respectively, shall be in
such form or forms as the board shall from time to time approve. Any
share certificate shall be signed in accordance with Section 11.01 of
this by-law and need not be under the corporate seal; provided that
certificates representing shares in respect of which a transfer agent
or registrar has been appointed shall not be valid unless countersigned
by or on behalf of such transfer agent or registrar. If authorized by
resolution of the directors, the corporate seal of the Corporation and
the signature of one of the signing officers, or in the case of share
certificates representing shares in respect of which a transfer agent
or registrar has been appointed, the signatures of both signing
officers may be printed or otherwise mechanically reproduced upon share
certificates.
7.03 REPLACEMENT OF SHARE CERTIFICATES - The directors may by resolution
prescribe, either generally or in a particular case, the conditions
upon which a new share certificate
14
may be issued to replace a share certificate, which has been defaced,
lost, stolen or destroyed.
7.04 SECURITIES RECORDS - The directors may from time to time appoint an
agent to maintain the central securities register for the shares of the
Corporation and if deemed advisable one or more branch securities
registers.
8. DIVIDENDS
---------
8.01 DECLARATION - Subject to the provisions of the Act, the articles or to
any unanimous shareholder agreement, the directors may from time to
time declare dividends payable to the shareholders according to their
respective rights and interests in the Corporation. Dividends may be
paid in money or property or by issuing fully paid shares of the
Corporation.
8.02 PAYMENT - A dividend payable in cash shall be paid by cheque drawn on
the Corporation's bankers or one of them to the order of each
registered holder of shares of the class in respect of which it has
been declared, and mailed by ordinary mail postage prepaid to such
registered holder at his or her last recorded address, unless such
holder otherwise directs. In the case of joint holders the cheque
shall, unless such joint holders otherwise direct, be made payable to
the order of all of such joint holders and mailed to them at their
recorded address. The mailing of such cheque as aforesaid shall satisfy
and discharge all liability for the dividend to the extent of the sum
represented thereby plus the amount of any tax which the Corporation is
required to and does withhold, unless such cheque be not paid on
presentation.
8.03 NON-RECEIPT OF CHEQUE - In the event of the non-receipt of any cheque
for a dividend by the person to whom it is so sent as aforesaid, the
Corporation shall issue to such person a replacement cheque for a like
amount on such terms as to indemnity, reimbursement of expenses and
evidence of non-receipt and of title as the board may from time to time
prescribe, whether generally or in a particular case.
9. FINANCIAL YEAR
--------------
9.01 FINANCIAL YEAR - The financial year of the Corporation shall end on the
31st day of December in each year, until changed by resolution of the
board.
10. NOTICES
-------
15
10.1 METHOD OF GIVING NOTICE - Any notice, communication or other document
to be given by the Corporation to a shareholder, director, officer, or
auditor or a member of a committee of the board of the Corporation
under any provision of the articles or by-laws or otherwise shall be
sufficiently given if delivered personally or telecopied to the person
to whom it is to be given, or if delivered to his recorded address, or
if mailed by prepaid post in a sealed envelope addressed to him at his
or her recorded address or if sent to him at his or her recorded
address by means of any prepaid transmitted or recorded communication
or if sent to him by any other means permitted under the Act. The
secretary may change the address on the records of the Corporation of
any shareholder in accordance with any information believed by him to
be reliable. A notice, communication or document so delivered shall be
deemed to have been given when it is delivered personally or at the
address aforesaid; a notice, communication or document so telecopied
shall be deemed to have been given immediately after it is telecopied;
a notice, communication or document so mailed shall be deemed to have
been given when it is deposited in a post office or public letter box;
a notice so sent by means of transmitted or recorded communication,
shall be deemed to have been given when it is delivered to the
appropriate communication company or agency or its representative for
dispatch; and a notice sent by any other means permitted under the Act,
shall be deemed to have been given immediately after it is sent.
10.2 COMPUTATION OF TIME - In computing the date when notice must be given
under any provision of the articles or by-laws requiring a specified
number of days' notice of any meeting or other event, the date of
giving the notice shall be excluded and the date of the meeting or
other event shall be included.
10.3 OMISSIONS AND ERRORS - The accidental omission to give any notice to
any shareholder, director, officer or auditor or the non-receipt of any
notice by any shareholder, director, officer or auditor or any error in
any notice not affecting the substance thereof shall not invalidate any
action taken at any meeting held pursuant to such notice or otherwise
founded thereon.
10.4 NOTICE TO JOINT SHAREHOLDERS - All notices with respect to any shares
registered in more than one name may, if more than one address appears
on the records of the Corporation in respect of such joint holding, be
given to such joint shareholders at the first address so appearing, and
notice so given shall be sufficient notice to all the holders of such
shares.
10.5 PERSONS ENTITLED BY DEATH OR OPERATION OF LAW - Every person who by
operation of law, by transfer or the death of a shareholder or
otherwise becomes entitled to shares, is bound by every notice in
respect of such shares which has been duly given to the registered
holder from whom he or she derives title prior to his or her name and
address being entered on the
16
records of the Corporation (whether such notice was given before or
after the happening of the event upon which he or she became so
entitled) and prior to him or her furnishing to the Corporation the
proof of authority or evidence of his or her entitlement prescribed by
the Act.
10.6 WAIVER OF NOTICE - Any shareholder (or his or her duly appointed
proxy), director, officer or auditor or member of a committee of the
board may at any time waive the sending of any notice, or waive or
abridge the time for any notice, required to be given under the Act,
the articles or by-laws of the Corporation or otherwise and such waiver
or abridgement, whether given before or after the meeting or other
event of which notice is required to be given, shall cure any default
in the giving or In the time of such notice, as the case may be. Any
such waiver or abridgement shall be in writing except a waiver of
notice of a meeting of shareholders or of the board or a committee of
the board, which may be given in any manner.
10.7 SIGNATURES TO NOTICES - The signatures to any notice to be given by the
Corporation may be written, stamped, typewritten or printed or partly
written, stamped, typewritten or printed.
11. EXECUTION OF DOCUMENTS
----------------------
11.01 SIGNING OFFICERS - Deeds, transfers, assignments, contracts and
obligations of the Corporation may be signed by two persons, one of
whom holds the office of chairman of the board, managing director,
president, vice-president or director and the other of whom holds one
of the said offices or the office of secretary or treasurer, assistant
secretary or assistant treasurer, director or any other office created
by by-law or by the board. Notwithstanding this, the board may at any
time and from time to time direct the manner in which and the person or
persons by whom any particular deed, transfer, contract or obligation
or any class of deeds, transfers, contracts or obligations may be
signed.
11.02 SEAL - Any person authorized to sign any document may affix the
corporate seal thereto.
12. EFFECTIVE DATE
--------------
12.01 EFFECTIVE DATE - This by-law shall come into force when enacted by the
directors, subject to the provisions of the Act.
17
13. REPEAL
------
13.01 REPEAL - Upon this by-law coming into force, the by-law of the
Corporation enacted April 10, 1992 is repealed provided that such
repeal shall not affect the previous operation of such by-law so
repealed or affect the validity of any act done or right, privilege,
obligation or liability acquired or incurred under the validity of any
contract or agreement made pursuant to any such by-law prior to its
repeal.
THE FOREGOING AMENDED AND RESTATED BY-LAW WAS ADOPTED BY THE BOARD OF DIRECTORS
OF BREAKWATER RESOURCES LTD. ON MAY 7, 2003 AND WILL BE SUBMITTED TO
SHAREHOLDERS FOR RATIFICATION AT THE ANNUAL AND SPECIAL MEETING OF SHAREHOLDER
TO BE HELD ON JUNE 16, 2003.
18