<PAGE>
FOR INFORMATION ONLY
THIS REGISTRATION STATEMENT HAS BEEN FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION BUT HAS NOT YET BECOME EFFECTIVE. INFORMATION CONTAINED
HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT.
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 22, 1999.
- --------------------------------------------------------------------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM 10
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF
THE SECURITIES EXCHANGE ACT OF 1934
-------------------------
China Ventures Limited
(Name of Small Business Issuer in its Charter)
CAYMAN ISLANDS N/A
- -------------------------------- ------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
COURVOISIER CENTRE II, SUITE 705
601 BRICKELL KEY DRIVE, MIAMI, FLORIDA 33131
- --------------------------------------- ---------
(Address of Principal Executive Offices) (Zip Code)
(305) 535-9700
-------------------------
Issuer's Telephone Number
Securities to be registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Title of Each Class Name of Each Exchange on
to be so registered which each class is to be registered
- ---------------------- ------------------------------------
<S> <C>
Common Stock ________
</TABLE>
Securities to be registered pursuant to Section 12(g) of the Act:
NONE
----------------
(Title of Class)
<PAGE>
INFORMATION REQUIRED IN
REGISTRATION STATEMENT
ITEM 1. BUSINESS.
GENERAL
China Ventures Limited was incorporated in the Cayman Islands in
Delaware 1999. China Ventures is not an operating company and does not have
significant assets or conduct significant business. The principal executive
offices of China Ventures are located at One Capital Place, Fourth Floor, P.O.
Box 847, Grand Cayman, Cayman Islands, British West Indies. The telephone number
is (305) 535-9700.
China Ventures currently has no employees.
China Ventures was formed to provide a method for an as-yet
unidentified private company in China to become a reporting "public" company
whose securities are qualified for trading in the United States secondary
market. There are certain perceived benefits to being a reporting company
with a class of publicly-traded securities qualified for trading in the
United States secondary market. These are commonly thought to include the
following:
* the ability to register securities and use registered
securities to acquire assets or businesses;
* increased visibility;
* the facilitation of borrowing from financial institutions;
* improved trading efficiency;
* shareholder liquidity;
* greater ease in subsequently raising capital;
* compensation of key employees through stock options;
* enhanced corporate image; or
* a presence in the United States capital markets.
A business entity, if any, which may be interested in a business
combination with China Ventures may include the following:
* a company for whom a primary purpose of becoming public is
the use of its securities for the acquisition of assets or
businesses;
* a company which is unable to find an underwriter of its
securities or is unable to find an underwriter of securities
on terms acceptable to it;
* a company which wishes to become public with less dilution of
its common stock than would occur upon an underwriting;
* a company which believes that it will be able obtain
investment capital on more favorable terms after it has
become public;
* a foreign company which may wish an initial entry into the
United States securities market;
* a company seeking one or more of the other perceived benefits
of becoming a public company.
2
<PAGE>
China Ventures will attempt to locate and negotiate with a business
entity for the merger, or some other business combination, of that entity into
China Ventures. In certain instances, a target entity may wish to become a
subsidiary of China Ventures or may wish to contribute assets to China Ventures
rather than merge. A business combination with a target entity may involve the
transfer to the target entity or its owners of the majority of the issued and
outstanding common stock of China Ventures, and the substitution by the target
business of its own management and board of directors.
China Ventures will initially attempt to locate and negotiate with a
target business entity from the Republic of China. No assurances can be given
that China Ventures will be successful in locating an appropriate Chinese entity
or successfully negotiating a transaction with such entity. No assurances can be
given as to the nature of the target entity, as to whether China Ventures will
be able to enter into a business combination or as to the terms of the business
combination.
China Ventures is voluntarily filing this Registration Statement with
the Securities and Exchange Commission and is under no obligation to do so under
the Securities Exchange Act of 1934, as amended.
China Ventures's business is subject to numerous risk factors,
including the following:
WE HAVE NO OPERATING HISTORY AND MINIMAL ASSETS AND, AS A RESULT, OUR
PROSPECTS ARE DIFFICULT TO EVALUATE.
We have had no operating history nor any revenues or earnings from
operations. China Ventures has no significant assets or financial resources. We
will sustain operating expenses without corresponding revenues, at least until
the consummation of a business combination. As a result we may incur a net
operating loss which will increase continuously until we can consummate a
business combination with a target entity.
OUR PROPOSED OPERATIONS ARE SPECULATIVE AND OUR BUSINESS MAY FAIL.
The success of our proposed plan of operation will depend to a great
extent on the operations, financial condition and management of the target
entity. While management intends to seek business combinations with entities
having established operating histories, there can be no assurance that we will
be successful in locating candidates meeting such criteria. In the event we
complete a business combination the success of our operations, most likely, will
be dependent upon management of the target entity and numerous other factors
beyond our control.
3
<PAGE>
WE INTEND TO ENTER INTO A BUSINESS COMBINATION WITH A CHINESE ENTITY,
WHICH WILL EXPOSE US TO RISKS NOT ASSOCIATED WITH DOMESTIC ENTITIES.
This may expose us to many risks, including:
- economic downturns,
- currency exchange rate fluctuations,
- changes in governmental policy,
- international incidents,
- military outbreaks,
- government instability,
- nationalization of foreign assets, and
- government protectionism.
WE ARE NOT CURRENTLY A PARTY TO AND CANNOT GUARANTEE THAT WE WILL
BECOME A PARTY TO ANY ARRANGEMENT WHICH WOULD RESULT IN A BUSINESS
COMBINATION.
Although we have commenced preliminary discussions with a business
entity from the Republic of China, we currently have no arrangement or agreement
with respect to engaging in a merger with or acquisition of any business entity.
We have not established a specific length of operating history or a specified
level of earnings, assets, net worth or other criteria which we will require a
target business opportunity to have achieved, or without which we would not
consider a business combination with such business entity.
WE MAY BE ABLE TO PURSUE ONLY ONE BUSINESS OPPORTUNITY WHICH WOULD
RESTRICT OUR ABILITY TO DIVERSIFY INTO OTHER AREAS.
Our proposed operations, even if successful, will in all likelihood
result in us engaging in a business combination with only one business
opportunity. Consequently, our activities will be limited to those engaged in by
the business with which we merge or acquire. Our inability to diversify our
activities into a number of areas may subject us to economic fluctuations within
a particular business or industry and therefore increase the risks associated
with our operations.
CHINA VENTURES HAS, AND WILL CONTINUE TO HAVE, NO CAPITAL WITH WHICH TO
PROVIDE THE OWNERS OF TARGET ENTITIES.
Although China Ventures has no capital to provide to target entities,
management believes that China Ventures will be able to offer owners of target
entities the opportunity to acquire ownership interest in a publicly registered
company without incurring the cost and time required to conduct an initial
public offering. This, however, is no guarantee that the owners of a target
entity will enter into a business combination with China Ventures.
4
<PAGE>
WE DEPEND ON KEY INDIVIDUALS AND THEY WOULD BE DIFFICULT TO REPLACE.
While seeking a business combination, management anticipates devoting
minimal hours to our business. Our officers and directors have not entered into
written employment agreements with us and are not expected to do so in the
foreseeable future. We have not obtained key man life insurance on our officers
and directors. Notwithstanding the combined limited experience and limited time
commitment of management, loss of the services of these individuals would
adversely affect development of our business and our likelihood of continuing
operations.
OUR MANAGEMENT MAY PARTICIPATE IN OTHER ACTIVITIES WHICH MAY DIRECTLY
OR INDIRECTLY CONFLICT WITH THE ACTIVITIES IN WHICH WE ARE
PARTICIPATING.
Our officers and directors participate in other ventures which may
compete directly or indirectly with us. Additional conflicts of interest and
non-arms length transactions may also arise in the future. Management has
adopted a policy that requires full disclosure of any potentially conflicting
relationships.
THE REPORTING REQUIREMENTS OF THE EXCHANGE ACT MAY DELAY OR PRECLUDE
THE ACQUISITION OF SOME TARGET ENTITIES.
The Exchange Act requires companies whose securities are registered
under the Exchange Act to provide information about significant acquisitions
including audited financial statements for the acquired entity covering one or
two fiscal years, depending on the relative size of the acquisition.
The time and additional costs that may be incurred by some target
entities to prepare such audited financial statements may significantly delay or
essentially preclude our consummation of an otherwise desirable acquisition.
Acquisition prospects that do not have and are unable to obtain the required
audited financial statements will not be appropriate for acquisition.
A BUSINESS COMBINATION MAY RESULT IN A CHANGE IN CONTROL AND A CHANGE
IN OUR MANAGEMENT.
A business combination involving the issuance of our common stock will,
in all likelihood, result in shareholders of a target entity obtaining a
controlling interest in us. Any such business combination may require our
officers and directors to sell or transfer all or a portion of our common stock
held by them, and to resign as members of the Board of Directors and as
officers. The resulting change in control could result in removal of our present
officers and directors and a corresponding reduction in or elimination of their
participation in our future affairs.
THERE IS NO ASSURANCE THAT A TRADING MARKET WILL EVER DEVELOP IN OUR
SECURITIES.
We currently have no shares which have been registered for public sale
or are eligible to be sold in any public market. We may enter into a business
combination with a business entity that desires to establish a public trading
market for its shares if we have shares that are trading publicly. A target
entity may attempt to avoid what it deems to be adverse consequences of
undertaking its own public offering by seeking a business combination with China
Ventures. Such consequences may include, but are not limited to, time delays of
the registration process, significant expenses to be incurred in such an
offering, loss of voting control to public shareholders or the inability to
obtain an underwriter or to obtain an underwriter on terms satisfactory to the
target entity.
5
<PAGE>
THERE IS NO GUARANTEE THAT A BUSINESS COMBINATION WOULD RESULT IN
TAX-FREE TREATMENT.
Federal and state tax consequences will, in all likelihood, be major
considerations in any business combination we may undertake. Currently, such
transactions may be structured so as to result in tax-free treatment to both
companies, pursuant to various federal and state tax provisions. We intend to
structure any business combination so as to minimize the federal and state tax
consequences to us and the target entity; however, there can be no assurance
that such business combination will meet the statutory requirements of a
tax-free reorganization or that the parties will obtain the intended tax-free
treatment upon a transfer of stock or assets. A non-qualifying reorganization
could result in the imposition of both federal and state taxes which may have an
adverse effect on both parties to the transaction.
YEAR 2000 PROBLEMS MAY PRECLUDE OUR ABILITY TO ACQUIRE CERTAIN
COMPANIES.
The Year 2000 problem is the result of computer programs being written
using two digits (rather than four) to define the applicable year. Any programs
that have date-sensitive software or equipment that has time-sensitive embedded
components may recognize a date using "00" as the year 1900 rather than the Year
2000. This could result in a major system failure or miscalculations. We will
not enter into an acquisition transaction with any business that has an
unresolved Year 2000 problem.
ITEM 2. FINANCIAL INFORMATION.
OVERVIEW.
China Ventures is a recently formed company. As such it has no prior
operating history. China Ventures has no revenue history and therefore has not
achieved profitability.
PLAN OF OPERATION.
China Ventures intends to merge with or acquire a business entity in
exchange for China Ventures' securities. Initially China Ventures will attempt
to merge with or acquire a business entity from the People's Republic of China.
If this attempt is not successful, China Ventures anticipates seeking out a
target business through solicitation. This solicitation may include newspaper or
magazine advertisements, mailings and other distributions to law firms,
accounting firms, investment bankers, financial advisors and similar persons,
the use of one or more World Wide Web sites and similar methods. No estimate can
be made as to the number of persons who will be contacted or solicited.
China Ventures has no full time employees. China Ventures' officers and
directors have agreed to allocate a portion of their time to the activities of
China Ventures, without compensation. They anticipate that the business plan of
China Ventures can be implemented by each of them devoting a modest number of
hours to the business affairs of China Ventures. Consequently, conflicts of
interest may arise with respect to the limited time commitment by them. China
Ventures' officers and directors expect in the future to become involved with
other companies which have a business purpose similar to that of China Ventures.
A conflict may arise in the event that another company, or a company to be
formed, with which management is affiliated seeks a target business. The
Memorandum and Articles of Association of China Ventures provides that China
Ventures may indemnify officers and/or directors of China Ventures for
liabilities, which can include liabilities arising under the securities laws.
Therefore, assets of China Ventures could be used or attached to satisfy any
liabilities subject to such indemnification.
6
<PAGE>
GENERAL BUSINESS PLAN.
China Ventures' purpose is to seek, investigate and, if the
investigation warrants, merge with or otherwise acquire a business entity from
the People's Republic of China. If this attempt fails, China Ventures will not
restrict its search to any specific business, industry, or geographical location
and China Ventures may participate in a business venture of virtually any kind
or nature.
China Ventures may seek a business opportunity with an entity which has
recently commenced operations, or which wishes to utilize the public marketplace
in order to raise additional capital in order to expand into new products or
markets, to develop a new product or service, or for other corporate purposes.
China Ventures may acquire assets and establish wholly-owned subsidiaries in
various businesses or acquire existing businesses as subsidiaries.
China Ventures anticipates that the selection of a business opportunity
in which to participate will be complex and extremely risky. Due to general
economic conditions, rapid technological advances being made in some industries
and shortages of available capital, management believes that there are numerous
firms seeking the perceived benefits of a publicly registered corporation. Such
perceived benefits may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, and providing liquidity for
shareholders and other factors. The officers and directors of China Ventures,
however, have not conducted market research and are not aware of statistical
data to support the perceived benefits of a merger or acquisition transaction
for the owners of a business opportunity.
The analysis of new business opportunities will be undertaken by, or
under the supervision of the officers and directors of China Ventures, who are
not professional business analysts. In analyzing prospective business
opportunities, management will consider such matters as the
- available technical, financial and managerial resources;
- working capital and other financial requirements;
- history of operations, if any;
- prospects for the future;
- nature of present and expected competition;
- the quality and experience of management services which may
be available;
- the potential for further research, development, or
exploration;
- specific risk factors not now foreseeable but which then may
be anticipated to impact the proposed activities of China
Ventures; the potential for growth or expansion;
- the potential for profit; the perceived public recognition or
acceptance of products, services, or trades;
- name identification; and
- other relevant factors.
To the extent possible, China Ventures intends to utilize written
reports and personal investigation to evaluate factors. The Exchange Act
requires that any merger or acquisition candidate comply with certain reporting
requirements, which include providing audited financial statements to be
included in the reports to be filed under the Exchange Act. China Ventures will
not acquire or merge with any company for which audited financial statements
cannot be obtained at or within a reasonable period of time after closing of the
proposed transaction.
The officers and directors of China Ventures may not be experienced in
matters relating to the business
7
<PAGE>
of a target entity, but will primarily rely upon their own efforts in
accomplishing the business purposes of China Ventures. It is anticipated that
outside consultants or advisors may be used by China Ventures to assist in the
search for qualified target entities. If China Ventures does retain an outside
consultant or advisor, any cash fee earned by the consultant will need to be
paid by the prospective merger/acquisition candidate, as China Ventures has
limited cash assets with which to pay such obligation. China Ventures may pay
all or some of the consultant's or advisor's fee with previously authorized but
unissued shares.
ACQUISITION OPPORTUNITIES.
We anticipate that any securities issued in a reorganization would be
issued in reliance upon an exemption from registration under applicable federal
and state securities laws. In some circumstances, however, as a negotiated
element of its transaction, China Ventures may agree to register all or a part
of such securities immediately after the transaction is consummated or at
specified times thereafter. If this registration occurs, of which there can be
no assurance, it may be undertaken by the surviving entity after China Ventures
has entered into an agreement for a business combination or has consummated a
business combination and China Ventures is no longer considered a blank check
company. The issuance of substantial additional securities and their potential
sale into any trading market which may develop in China Ventures' securities may
have a depressive effect on the market value of China Ventures' securities if a
market develops.
While the actual terms of a transaction to which China Ventures may be
a party cannot be predicted, we will attempt to avoid the creation of a taxable
event and structure the acquisition in a "tax-free" reorganization under
Sections 351 or 368 of the Internal Revenue Code of 1986, as amended (the
"Code").
With respect to any merger or acquisition, negotiations with target
entity management is expected to focus on the percentage of China Ventures which
target entity shareholders would acquire in exchange for all of their
shareholdings in the target entity. Depending upon, among other things, the
target entity's assets and liabilities, China Ventures' shareholders prior to
the transaction will in all likelihood hold a minority percentage ownership
interest in China Ventures following any merger or acquisition. The percentage
ownership will be subject to significant reduction in the event China Ventures
acquires a target entity with substantial assets. Therefore, any merger or
acquisition effected by China Ventures can be expected to have a significant
dilutive effect on the percentage of shares held by China Ventures' shareholders
at such time.
China Ventures will participate in a business opportunity only after
the negotiation and execution of appropriate agreements. Although the terms of
such agreements cannot be predicted, generally these agreements will require
certain representations and warranties of the parties, will specify certain
events of default, will detail the terms of closing and the conditions which
must be satisfied by the parties prior to and after such closing, will outline
the manner of bearing costs, including costs associated with China Ventures'
attorneys and accountants, and will include other important terms.
China Ventures will not acquire or merge with any entity which cannot
provide audited financial statements at a closing of the proposed transaction or
represent that it will provide audited financial statements within a reasonable
period of time after closing of the proposed transaction. China Ventures will be
subject to all of the reporting requirements included in the Exchange Act.
Included in these requirements is the duty of China Ventures to file audited
financial statements as part of its Current Report on Form 8-K to be filed with
the Securities and Exchange Commission upon consummation of a merger or
acquisition, as well as a requirement to file audited financial statements in
its annual report on Form10-K. If these audited financial statements are not
available at closing, or within time parameters necessary to insure China
Ventures' compliance with the requirements of the Exchange Act, or if the
audited financial statements
8
<PAGE>
provided do not conform to the representations made by the target entity, the
closing documents may provide that the proposed transaction can voided at the
discretion of the present management of China Ventures.
China Ventures' officers and directors have agreed that they may
advance to China Ventures additional funds which China Ventures may need for
operating capital and for costs in connection with searching for or completing
an acquisition or merger. There is no minimum or maximum amount an officer or
director may advance to China Ventures.
China Ventures does not intend to borrow funds for the purpose of
repaying advances made by officers or directors or to make any payments to China
Ventures' promoters, management or their affiliates.
COMPETITION.
China Ventures will remain an insignificant participant among the firms
which engage in the acquisition of business opportunities. There are many
established venture capital and financial concerns which have significantly
greater financial and personnel resources and technical expertise than China
Ventures. In view of China Ventures's extremely limited financial resources and
limited management availability, China Ventures will continue to be at a
significant competitive disadvantage compared to China Ventures' competitors.
CONFLICTS OF INTEREST.
Management may agree to pay finder's fees, as appropriate and allowed,
to unaffiliated persons who may bring a target business to China Ventures where
that referral results in a business combination. The amount of any finder's fee
will be subject to negotiation, and cannot be estimated at this time.
Management has adopted certain policies involving possible conflicts of
interest, including prohibiting any of the following transactions involving
management or promoters or their affiliates or associates:
(i) Any lending by China Ventures to such persons; or
(ii) The issuance of any additional securities to such persons
prior to a business combination.
These policies have been adopted by the Board of Directors of China
Ventures, and any changes in these provisions would require the approval of the
Board of Directors. Management does not intend to propose any such action and
does not anticipate that any such action will occur.
There are no binding guidelines or procedures for resolving potential
conflicts of interest. Failure by management to resolve conflicts of interest in
favor of China Ventures could result in liability of management to China
Ventures. However, any attempt by shareholders to enforce a liability of
management to China Ventures would most likely be prohibitively expensive and
time consuming.
ITEM 3. DESCRIPTION OF PROPERTY.
China Ventures owns no real property and at this time has no agreements
to acquire any property. China Ventures currently uses office space located at
Courvoisier Centre II, Suite 705, 601 Brickell Key Drive, Miami, FL 33131 to
conduct its operations. It is not charged for the use of this office space.
9
<PAGE>
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT:
The number of shares of China Ventures' common stock owned by China
Ventures' directors and officers and by each person who owns legally and
beneficially more than five percent of China Ventures= issued and outstanding
common stock on December 20, 1999, the address of each such person and the
percentage of the common stock represented by such shares is set forth in the
following table. Unless otherwise indicated all ownership is both legal and
beneficial.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Name and Address Amount and Nature Percent of Class
of Beneficial of Beneficial
Owner Owner
- -------------------------------------------------------------------------------
<S> <C> <C>
Hong Yang 123,750 49.00%
11\F Huitong Building Finance
and Trade District
Haikou City
Hainan Province
Peoples Republic
of China P.C. 570125
James N. L. Chow 121,250 48.01%
52 Hoi Pong Road, Central
Lei Yue Mun, Kowloon, HK
All Executive Officers and
Directors as a Group 245,000 97.01%
</TABLE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The names, ages and terms of office of directors and executive officers
of China Ventures are set forth in the following table:
<TABLE>
<CAPTION>
NAME AGE POSITIONS DIRECTOR SINCE
---------------- ------ ------------------- ---------------
<S> <C> <C> <C>
Hong Yang 41 Director; President December 1999
James N. L. Chow 42 Director; Secretary December 1999
</TABLE>
James N.L. Chow Mr. Chow, a citizen of Hong Kong, has been President of
Inter-Global Investments, Inc. since March 1997. During that
time, he has provided investment banking consulting services
for various companies in the United States. Prior thereto,
from August 1996 to March 1997, he was Regional Financial
Controller for Miramar Hotel & Investment Co., Ltd. in Hong
Kong. From September 1993 to August 1996, Mr. Chow was
Financial Controller for Miramar Hotel Management Group in
The People's Republic of China.
10
<PAGE>
Hong Yang Mr. Yang, a citizen of the Peoples Republic of China,
has served as President of Hainan Zhiye General Company since
1992, a conglomerate based in China and focused on real
estate, hotels, restaurants, tourism, trading and ocean
transportation.
Each director is elected by holders of a majority of the common stock
to serve for a term of one year and until his successor is elected and
qualified, which is generally at the annual meeting of stockholders. Officers
serve at the will of the board, subject to possible future employment agreements
which would establish term, salary, benefits and other conditions of employment.
ITEM 6. EXECUTIVE COMPENSATION.
None of the officers receives any compensation for the services
rendered to China Ventures.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
A stockholder of China Ventures is acting as legal counsel in
connection with the formation of China Ventures and related matters. Through
December 1999, China Ventures had incurred $5,200 in legal fees and expenses to
the law firm in which this stockholder is a partner.
ITEM 8. LEGAL PROCEEDINGS.
There is no litigation pending or threatened by or against China
Ventures.
ITEM 9. MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
There is currently no market for China Ventures' common stock.
NUMBER OF STOCKHOLDERS. As of December 20, 1999, China Ventures had 28
stockholders of record.
(a) The Securities and Exchange Commission has adopted Rule 15g-9 which
established the definition of a "penny stock." For purposes relevant to China
Ventures, a penny stock is any equity security that has a market price of less
than $5.00 per share or with an exercise price of less than $5.00 per share,
subject to certain exceptions. For any transaction involving a penny stock,
unless exempt, the rules require: (i) that a broker or dealer approve a person's
account for transactions in penny stocks and (ii) the broker or dealer receive
from the investor a written agreement to the transaction, setting forth the
identity and quantity of the penny stock to be purchased. In order to approve a
person's account for transactions in penny stocks, the broker or dealer must (i)
obtain financial information and investment experience and objectives of the
person; and (ii) make a reasonable determination that the transactions in penny
stocks are suitable for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight form, (i)
sets forth the basis on which the broker or dealer made the suitability
determination and (ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction. Disclosure also has to be
made about the risks of investing in penny stocks in both public offerings and
in secondary trading, and about commissions payable to both the broker-dealer
and the registered representative, current quotations for the securities and the
rights and remedies available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks.
11
<PAGE>
The National Association of Securities Dealers, Inc. (the "NASD"),
which administers the NASDAQ Stock Market, has established certain criteria for
initial and continued eligibility for listing on the NASDAQ Stock Market. In
order to qualify for listing on the NASDAQ SmallCap Market, a company must have
at least (i) net tangible assets of $4,000,000 or market capitalization of
$50,000,000 or net income for two of the last three years of $750,000; (ii)
public float of 1,000,000 shares with a market value of $5,000,000; (iii) a bid
price of $4.00; (iv) three market makers; (v) 300 shareholders and (vi) an
operating history of one year or, if less than one year, $50,000,000 in market
capitalization. For continued listing on the NASDAQ SmallCap Market, a company
must have at least (i) net tangible assets of $2,000,000 or market
capitalization of $35,000,000 or net income for two of the last three years of
$500,000; (ii) a public float of 500,000 shares with a market value of
$1,000,000; (iii) a bid price of $1.00; (iv) two market makers; and (v) 300
shareholders.
There can be no assurances that, upon a successful merger or
acquisition, China Ventures will qualify its securities for listing on the
NASDAQ SmallCap Market or a national or regional exchange, or be able to
maintain the maintenance criteria necessary to insure continued listing. The
failure of China Ventures to qualify its securities or to meet the relevant
maintenance criteria after such qualification may result in the discontinuance
of the inclusion of China Ventures's securities.
In such events, trading, if any, in China Ventures's securities may
then continue in the over-the-counter market. In such case, a shareholder may
find it more difficult to dispose of, or to obtain accurate quotations as to the
market value of, China Ventures's securities.
(b) Holders. There were 28 holders of shares of China Ventures' common
stock as of December 20, 1999 with a total of 252,550 shares of common stock
issued and outstanding.
(c) Dividends. Dividends on the common stock can be paid lawfully only
out of current and retained earnings and surplus of China Ventures, when, as and
if declared by the board of directors. China Ventures has not declared or paid
any dividends on the common stock since inception and there is no assurance
dividends will be paid in the foreseeable future. The payment of dividends in
the future rests within the discretion of its board of directors and will
depend, among other things, upon China Ventures's earnings, its capital
requirements and its financial condition, as well as other factors which the
board of directors deems relevant.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
In December 1999, China Ventures issued and sold 2,500 shares of common
stock to 25 individuals for aggregate consideration of $15,000. China Ventures
did not sell these shares of common stock in reliance on any exemption from the
United States federal securities laws as all purchasers were residents of China.
ITEM 11. DESCRIPTION OF SECURITIES.
The authorized capital stock of China Ventures consists of
50,000,000 ordinary shares, par value $.001 per share. The following
statements relating to the capital stock are summaries and do not purport to
be complete. Reference is made to the more detailed provisions of, and such
statements are qualified in their entirety by reference to, the Memorandum
and Articles of Association, a copy of which are filed as an exhibit to this
registration statement.
12
<PAGE>
COMMON STOCK
Holders of shares are entitled to one vote for each share on all
matters to be voted on by the stockholders. Holders of common stock do not
have cumulative voting rights. Holders of shares are entitled to share
ratably in dividends, if any, as may be declared from time to time by the
Board of Directors in its discretion from funds legally available therefor.
In the event of a liquidation, dissolution or winding up of China Ventures,
the holders of shares are entitled to share pro rata all assets remaining
after payment in full of all liabilities. All of the outstanding shares of
common stock are fully paid and non-assessable.
Holders of shares have no preemptive rights to purchase China
Ventures's shares. There are no conversion or redemption rights or sinking
fund provisions with respect to the shares.
DIVIDENDS
China Ventures does not expect to pay dividends. Dividends, if any,
will be contingent upon China Ventures' revenues and earnings, if any, capital
requirements and financial conditions. The payment of dividends, if any, will be
within the discretion of China Ventures' Board of Directors. China Ventures
presently intends to retain all earnings, if any, for use in its business
operations and accordingly, the Board of Directors does not anticipate declaring
any dividends in the foreseeable future.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Directors and Officers for the time being of the Company and any
trustee for the time being acting in relation to any of the affairs of the
Company and their heirs, executors, administrators and personal representatives
respectively shall be indemnified out of the assets of the Company from and
against all actions, proceedings, costs, charges, losses, damages and expenses
which they or any of them shall or may incur or sustain by reason of any act
done or omitted in or about the execution of their duty in their respective
offices or trusts, except such (if any) as they shall incur or sustain by or
through their own wilful neglect or default respectively and no such Director,
Officer or trustee shall be answerable for the acts, receipts, neglects or
defaults of any other Director, Officer or trustee or for joining in any receipt
for the sake of conformity or for the solvency or honesty of any banker or other
persons with whom any monies or effects belonging to the Company may be lodged
or deposited for safe custody or for any insufficiency of any security upon
which any monies of the Company may be invested or for any other loss or damage
due to any such cause as aforesaid or which may happen in or about the execution
of his office or trust unless the same shall happen through the wilful neglect
or default of such Director, Officer or trustee.
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
See Item 15.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
China Ventures has not changed accountants since its formation and
there are no disagreements with the findings of its accountants.
13
<PAGE>
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS
Financial Statements
China Ventures Limited Financial Statement and Independent
Auditors Report dated December 20, 1999
Independent Auditors Report
Balance Sheet dated December 20, 1999 Statement of Operations
dated December 20, 1999
Statement of Changes in Shareholders' Equity dated
December 20, 1999
Statement of Cash Flows dated December 20, 1999
Notes to Financial Statements
EXHIBITS
3.1 Memorandum and Articles of Association of China Ventures
Limited
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CHINA VENTURES LIMITED
Date: December 21, 1999 BY: /s/ James N. L. Chow
--------------------------
James N.L. Chow, Secretary
15
<PAGE>
CHINA VENTURES LIMITED
(A Development Stage Company)
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITOR'S REPORT
DECEMBER 20, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditor's Report -1-
Financial Statements:
Balance Sheet -2-
Statement of Operations -3-
Statement of Changes in Stockholders= Equity -4-
Statement of Cash Flows -5-
Notes to Financial Statements -6, 7-
</TABLE>
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
China Ventures Limited
George Town
Grand Cayman Island, BWI
I have audited the accompanying balance sheet of China Ventures Limited (A
Development Stage Company) as of December 20, 1999 and the related statements of
operations and of cash flows for the period December 10 (date of inception) to
December 20, 1999. These financial statements are the responsibility of the
Company=s management. My responsibility is to express an opinion on these
financial statements, based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statements presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position, results of operations and cash flows
of China Ventures Limited ( A Development Stage Company) as of December 20, 1999
and for the period December 10 (date of inception) to December 20, 1999 in
conformity with generally accepted accounting principles.
ANGEL A. SUAREZ, C.P.A.
December 21, 1999
Member: American Institute of Certified Public Accountants. Florida
Institute of Certified Public Accountants.
<PAGE>
CHINA VENTURES LIMITED
(A Development Stage Company)
BALANCE SHEET
December 20, 1999
See Independent Auditor's Report
ASSETS
<TABLE>
<S> <C>
CURRENT ASSETS
Cash $ 15,000
Subscription receivable 250
--------
TOTAL CURRENT ASSETS $ 15,250
--------
--------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued expenses $ 5,200
--------
TOTAL CURRENT LIABILITIES 5,200
STOCKHOLDERS' EQUITY
Common stock, $.001 par value, 50,000,000 shares
authorized and 252,550 shares issued 252
Additional Paid-in Capital 14,998
Deficit accumulated during the development stage (5,200)
--------
10,050
--------
$ 15,250
--------
--------
</TABLE>
The accompanying notes are part of these financial statements.
2
<PAGE>
CHINA VENTURES LIMITED
(A Development Stage Company)
STATEMENT OF OPERATIONS
From December 10 (date of inception) to December 20, 1999
See Independent Auditor's Report
<TABLE>
<CAPTION>
<S> <C>
GENERAL AND ADMINISTRATIVE EXPENSES
Legal and incorporation fees $5,200
------
NET LOSS FOR THE PERIOD - Development stage $5,200
------
------
</TABLE>
The accompanying notes are part of these financial statements.
3
<PAGE>
CHINA VENTURES LIMITED
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
From December 10 (date of inception) to December 20, 1999
See Independent Auditor's Report
<TABLE>
<CAPTION>
<S> <C>
COMMON STOCK
Par value of 252,550 shares issued $ 252
--------
Balance at December 20, 1999 $ 252
--------
--------
ADDITIONAL PAID-IN CAPITAL
Proceeds in excess of par value of shares of
common stock issued $ 14,998
--------
Balance at December 20, 1999 $ 14,998
--------
--------
RETAINED EARNINGS
Deficit accumulated during the development stage $ (5,200)
--------
Balance at December 20, 1999 $ (5,200)
--------
--------
TOTAL STOCKHOLDERS' EQUITY $ 10,050
--------
--------
</TABLE>
The accompanying notes are part of these financial statements.
4
<PAGE>
CHINA VENTURES LIMITED
(A Development Stage Company)
STATEMENT OF CASH FLOWS
From December 10 (date of inception) to December 20, 1999
See Independent Auditor's Report
<TABLE>
<CAPTION>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (5,200)
Increase in accrued expenses 5,200
--------
NET CASH PROVIDED BY OPERATING ACTIVITIES --
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuing common stock 15,000
--------
--------
NET CASH PROVIDED BY FINANCING ACTIVITIES 15,000
--------
CASH AT END OF YEAR $ 15,000
--------
--------
</TABLE>
5
<PAGE>
CHINA VENTURES LIMITED
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 GENERAL INFORMATION
China Ventures Limited (the Company) was incorporated in the Cayman Islands on
December 10, 1999 for the principal purpose of facilitating a Chinese private
company to become a reporting public company whose securities are qualified for
trading in the United States secondary market. The Company will attempt to
locate and negotiate with a target business entity, initially from the People's
Republic of China, to effect a merger or some other business combination, in
exchange for the opportunity to acquire ownership interest in a publicly
registered company without incurring the cost and time required to conduct an
initial public offering. If this initial attempt fails, the Company will not
restrict its search to any specific business, industry or geographical location.
As of December 20, 1999 the Company is in the development stage and has not
started operations; accordingly these financial statements are presented under
the A Development Stage Enterprises@ pronouncements issued by the American
Institute of Certified Public Accountants.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTING METHOD
The Company presents its financial statements under the accrual basis of
accounting, under which method revenues are recognized when earned rather than
when received, and expenses are recognized when incurred rather than when paid.
NOTE 3 SUBSEQUENT EVENTS
The Company is in the process of voluntarily filing AForm 10, General Form for
Registration of Securities Pursuant to Section 12(b) or 12(g) of the Securities
Exchange Act of 1934@ to register its Common Stock (under Section 12(b) of the
Act). Under the Securities Exchange Act of 1934 as amended, the Company is under
no obligation to file this form.
NOTE 4 RELATED PARTY TRANSACTIONS
A stockholder of the Company is acting as legal counsel. Legal fees and
incorporation costs in the amount of $5,200 are payable to a law firm in which
this stockholder is a partner.
6
<PAGE>
CHINA VENTURES LIMITED
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 5 CONTINGENCIES
The Company may not be successful in locating a target business with which to
merge or effect some other business combination. If the Company is successful in
its attempt's, it may be exposed to many risks including economic downturns,
currency exchange rate fluctuations, changes in governmental policies,
international incidents, nationalization of foreign assets and government
protectionism, among others.
A business combination involving the issuance of common stock of the Company may
result in shareholders of the target entity obtaining a controlling interest and
in changes in the present officers and directors.
The Memorandum and Articles of Association provide that the Company may
indemnify its officers and/or directors for liabilities; therefore, assets of
the Company could be used or attached to satisfy any liabilities subject to such
indemnification.
7
<PAGE>
EXHIBIT 3.1
THE COMPANIES LAW
COMPANY LIMITED BY SHARES
MEMORANDUM & ARTICLES OF ASSOCIATION
OF
CHINA VENTURES LIMITED
<PAGE>
MEMORANDUM & ARTICLES OF ASSOCIATION
OF
CHINA VENTURES LIMITED
INDEX
MEMORANDUM OF ASSOCIATION
<TABLE>
<CAPTION>
CLAUSE
- ------
<S> <C>
1 Name
2 Registered Office
3 Objects
4 Authority
5 Shareholders' Liability
6 Authorized Share Capital
7 Registration as Exempted Company
</TABLE>
ARTICLES OF ASSOCIATION
<TABLE>
<CAPTION>
CLAUSE
- ------
<S> <C>
1-3 Definitions and Formation
4-5 Certificates for Shares
6-7 Issue of Shares
8-10 Transfer of Shares
11 Redeemable Shares
12-13 Variation of Rights of Shares
14 Commission on Sale of Shares
15 Non-Recognition of Trusts
16-19 Lien on Shares
20-24 Call on Shares
</TABLE>
<PAGE>
<TABLE>
<S> <C>
25-28 Forfeiture of Shares
29 Registration of Empowering Instruments
30-32 Transmission of Shares
33 Amendment of Memorandum of Association, Change of Location of
Registered Office and Alteration of Capital
34-36 Closing Register of Members or Fixing Record Date
37-38 General Meeting
39-40 Notice of General Meetings
41-52 Proceedings at General Meetings
53-58 Votes of Members
59-64 Proxies
65-73 Directors
74 Alternate Directors
75-80 Powers and Duties of Directors
81 Management
82-83 Managing Directors
84-93 Proceedings of Directors
94 Vacation of Office of Director
95-96 Appointment and Removal of Directors
97 Presumption of Assent
98 Seal
99 Officers
100-107 Dividends, Distributions and Reserve
108 Capitalization
109-111 Books of Account
112-115 Audit
116-120 Notices
</TABLE>
<PAGE>
<TABLE>
<S> <C>
121-122 Winding Up
123 Indemnity
124 Financial Year
125 Amendments of Articles
126 Transfer by way of Continuation
127-135 Bearer Shares
</TABLE>
<PAGE>
THE COMPANIES LAW
COMPANY LIMITED BY SHARES
MEMORANDUM OF ASSOCIATION
OF
CHINA VENTURES LIMITED
1. The name of the Company is CHINA VENTURES LIMITED.
2. The Registered Office of the Company shall be at the offices of
Trident Trust Company (Cayman) Limited, Fourth Floor, One Capital Place, P.O.
Box 847, Grand Cayman, Cayman Islands, British West Indies or at such other
place as the Directors may from time to time decide.
3. The objects for which the Company is established are unrestricted
and shall include, but without limitation, the following:
(i) (a) To carry on the business of an investment company and
to act as promoters and entrepreneurs and to carry on business as financiers,
capitalists, concessionaires, merchants, brokers, traders, dealers, agents,
importers and exporters and to undertake and carry on and execute all kinds of
investment, financial, commercial, mercantile, trading and other operations.
(b) To carry on whether as principals, agents or
otherwise howsoever the business of realtors, developers, consultants, estate
agents or managers, builders, contractors, engineers, manufacturers, dealers in
or vendors of all types of property including services.
(ii) To exercise and enforce all rights and powers conferred
by or incidental to the ownership of any shares, stock, obligations or other
securities including without prejudice to the generality of the foregoing all
such powers of veto or control as may be conferred by virtue of the holding by
the Company of some special proportion of the issued or nominal amount thereof,
to provide managerial and other executive, supervisory and consultant services
for or in relation to any company in which the Company is interested upon such
terms as may be thought fit.
(iii) To purchase or otherwise acquire, to sell, exchange,
surrender, lease, mortgage, charge, convert, turn to account, dispose of and
deal with real and personal property and rights of all kinds and, in particular,
mortgages, debentures, produce, concessions, options, contracts, patents,
annuities, licenses, stocks, shares, bonds, policies, book debts, business
concerns, undertakings, claims, privileges and choses in action of all kinds.
(iv) To subscribe for, conditionally or unconditionally, to
underwrite, issue on commission or otherwise, take, hold, deal in and convert
stocks, shares and securities of all kinds and to enter into partnership or into
any arrangement for sharing profits, reciprocal concessions or cooperation with
any person or company and to promote and aid in promoting, to constitute, form
or organize any company, syndicate or partnership of any kind, for the purpose
of acquiring and undertaking any property and liabilities of the Company or of
advancing, directly or indirectly, the objects of the Company or for any other
purpose which the Company may think expedient.
<PAGE>
(v) To stand surety for or to guarantee, support or secure the
performance of all or any of the obligations of any person, firm or company
whether or not related or affiliated to the Company in any manner and whether by
personal covenant or mortgage, charge or lien upon the whole or any part of the
undertaking, property and assets of the Company, both present and future,
including its uncalled capital or by any such method and whether or not the
Company shall receive valuable consideration therefor.
(vi) To engage in or carry on any other lawful trade, business
or enterprise which may at any time appear to the Directors of the Company
capable of being conveniently carried on in conjunction with any of the
aforementioned businesses or activities or which may appear to the Directors or
the Company likely to be profitable to the Company.
In the interpretation of this Memorandum of Association in general and of this
Clause 3 in particular no object, business or power specified or mentioned shall
be limited or restricted by reference to or inference from any other object,
business or power, or the name of the Company, or by the juxtaposition of two or
more objects, businesses or powers and that, in the event of any ambiguity in
this clause or elsewhere in this Memorandum of Association, the same shall be
resolved by such interpretation and construction as will widen and enlarge and
not restrict the objects, businesses and powers of and exercisable by the
Company.
4. Except as prohibited or limited by the Companies Law (Cap. 22), the
Company shall have full power and authority to carry out any object and shall
have and be capable of from time to time and at all times exercising any and all
of the powers at any time or from time to time exercisable by a natural person
or body corporate in doing in any part of the world whether as principal, agent,
contractor or otherwise whatever may be considered by it necessary for the
attainment of its objects and whatever else may be considered by it as
incidental or conducive thereto or consequential thereon, including, but without
in any way restricting the generality of the foregoing, the power to make any
alterations or amendments to this Memorandum of Association and the Articles of
Association of the Company considered necessary or convenient in the manner set
out in the Articles of Association of the Company, and the power to do any of
the following acts or things, viz:
to pay all expenses of and incidental to the promotion, formation and
incorporation of the Company; to register the Company to do business in
any other jurisdiction; to sell, lease or dispose of any property of
the Company; to draw, make, accept, endorse, discount, execute and
issue promissory notes, debentures, bills of exchange, bills of lading,
warrants and other negotiable or transferable instruments; to lend
money or other assets and to act as guarantors; to borrow or raise
money on the security of the undertaking or on all or any of the assets
of the Company including uncalled capital or without security; to
invest monies of the Company in such manner as the Directors determine;
to promote other companies; to sell the undertaking of the Company for
cash or any other consideration; to distribute assets in specie to
Members of the Company; to make charitable or benevolent donations; to
pay pensions or gratuities or provide other benefits in cash or kind to
Directors, officers, employees, past or present and their families; to
carry on any trade or business and generally to do all acts and things
which, in the opinion of the Company or the Directors, may be
conveniently or profitably or usefully acquired and dealt with, carried
on, executed or done by the Company in connection with the business
aforesaid PROVIDED THAT the Company shall only carry on the businesses
for which a licence is required under the laws of the Cayman Islands
when so licensed under the terms of such laws.
2
<PAGE>
5. The liability of each member is limited to the amount from time to
time unpaid on such member's shares.
6. The share capital of the Company is US$50,000.00 divided into
50,000,000 ordinary shares of a nominal or par value of US$0.001 each with the
power for the Company, insofar as is permitted by law, to redeem or purchase any
of its shares and to increase or reduce the said capital subject to the
provisions of the Companies Law (Revised) (Cap.22) and the Articles of
Association and to issue any part of its capital, whether original, redeemed or
increased with or without any preference, priority or special privilege or
subject to any postponement of rights or to any conditions or restrictions and
so that, unless the conditions of issue shall otherwise expressly declare, every
issue of shares whether declared to be preference or otherwise shall be subject
to the powers hereinbefore contained.
7. If the Company is registered as exempted, its operations will be
carried on subject to the provisions of Section 192 of the Companies Law
(Revised) (Cap. 22) and, subject to the provisions of the Companies Law
(Revised) (Cap.22) and the Articles of Association, it shall have the power to
register by way of continuation as a body corporate limited by shares under the
laws of any jurisdiction outside the Cayman Islands and to be deregistered in
the Cayman Islands.
WE, the undersigned, are desirous of being formed into a company in pursuance of
this Memorandum of Association and we agree to take the number of shares in the
capital of the Company set opposite our name.
DATED the 9th day of December, 1999.
SIGNATURE, ADDRESSES and NUMBER OF SHARES
DESCRIPTION OF SUBSCRIBERS TAKEN BY EACH
/s/ 1 ordinary share
- ------------------------------
Trident Nominees (Cayman) Ltd
(Corporation)
P.O. Box 847, Grand Cayman
/s/
- ------------------------------
Witness to the above signature
I, Ronnie William Anglin, Assistant Registrar of Companies in and for the Cayman
Islands DO HEREBY CERTIFY that this is a true and correct copy of the Memorandum
of Association of this Company duly incorporated on the 10th day of December,
1999.
/s/ Ronnie William Anglin
--------------------------------
ASSISTANT REGISTRAR OF COMPANIES
3
<PAGE>
Registered and Filed
As No.: 94901 this 10th
day of December, 1999.
/s/
----------------------------
Asst. Registrar of Companies
Cayman Islands
THE COMPANIES LAW
COMPANY LIMITED BY SHARES
ARTICLES OF ASSOCIATION
OF
CHINA VENTURES LIMITED
1. In these Articles Table A in the Schedule to the Statute does not
apply and, unless there be something in the subject or context inconsistent
therewith,
"Articles" means these Articles as originally framed or as from time
to time altered by Special Resolution.
"The Auditors" means the persons for the time being performing the
duties of auditors of the Company.
"The Company" means the above named Company.
"Debenture" means debenture stock, mortgages, bonds and any other
such securities of the Company whether constituting a charge on the assets of
the Company or not.
"The Directors" means the directors for the time being of the
Company.
"Dividend" includes bonus.
"Member" shall bear the meaning ascribed to it in Section 37 of the
Statute.
"Month" means calendar month.
"Paid-up" means paid-up and/or credited as paid-up.
"The Registered Office" means the registered office for the time
being of the Company.
"Seal" means the common seal of the Company and includes every
duplicate seal.
"Secretary" includes an Assistant Secretary and any person appointed
to perform the duties of Secretary of the Company.
<PAGE>
"Share" includes a fraction of a share.
"Special Resolution" has the same meaning as in the Statute and
includes a resolution as described in Section 60(1)(b) of the Statute.
"Statute" means the Companies Law of the Cayman Islands as amended
and every statutory modification or re-enactment thereof for the time being in
force.
"Written" and "In Writing" include all modes of representing or
reproducing words in visible form.
Words importing the singular number only include the plural number
and vice-versa.
Words importing the masculine gender only include the feminine
gender.
Words importing persons only include corporations.
2. The business of the Company may be commenced as soon after
incorporation as the Directors shall see fit, notwithstanding that part only of
the shares may have been allotted.
3. The Directors may pay, out of the capital or any other monies of the
Company, all expenses incurred in or about the formation and establishment of
the Company including the expenses of registration.
CERTIFICATES FOR SHARES
4. Certificates representing shares of the Company shall be in such
form as shall be determined by the Directors. Such certificates shall be under
seal. All certificates for shares shall be consecutively numbered or otherwise
identified and shall specify the shares to which they relate. The name and
address of the person to whom the shares represented thereby are issued, with
the number of shares and date of issue, shall be entered in the register of
members of the Company. All certificates surrendered to the Company for transfer
shall be canceled and no new certificate shall be issued until the former
certificate for a like number of shares shall have been surrendered and
canceled. The Directors may authorize certificates to be issued with the seal
and authorized signature(s) affixed by some method or system of mechanical
process.
5. Notwithstanding Article 4 of these Articles, if a share certificate
be defaced, lost or destroyed, it may be renewed on payment of a fee of one
dollar (US$1.00) or such less sum and on such terms (if any) as to evidence and
indemnity and the payment of the expenses incurred by the Company in
investigating evidence, as the Directors may prescribe.
ISSUE OF SHARES
6. Subject to the provisions, if any, in that behalf in the Memorandum
of Association and to any direction that may be given by the Company in general
meeting and without prejudice to any special rights previously conferred on the
holders of existing shares, the Directors may allot, issue, grant options over
or otherwise dispose of shares of the Company (including fractions of a share)
with or without preferred, deferred or other special rights or restrictions,
whether in regard to dividend, voting, return of capital or otherwise and to
such persons, at such times and on such other terms as they think proper.
2
<PAGE>
7. The Company shall maintain a register of its members and every
person whose name is entered as a member in the register of members shall be
entitled without payment to receive within two months after allotment or
lodgement of transfer (or within such other period as the conditions of issue
shall provide) one certificate for all his shares or several certificates each
for one or more of his shares upon payment of fifty cents (US$0.50) for every
certificate after the first or such less sum as the Directors shall from time to
time determine provided that in respect of a share or shares held jointly by
several persons the Company shall not be bound to issue more than one
certificate and delivery of a certificate for a share to one of the several
joint holders shall be sufficient delivery to all such holders.
TRANSFER OF SHARES
8. The instrument of transfer of any share shall be in writing and
shall be executed by or on behalf of the Transferor and the Transferor shall be
deemed to remain the holder of a share until the name of the Transferee is
entered in the register in respect thereof.
9. The Directors may in their absolute discretion decline to register
any transfer of shares without assigning any reason therefor. If the Directors
refuse to register a transfer they shall notify the Transferee within two months
of such refusal.
10. The registration of transfers may be suspended at such time and for
such periods as the Directors may from time to time determine, provided always
that such registration shall not be suspended for more than forty-five days in
any year.
REDEEMABLE SHARES
11. (a) Subject to the provisions of the Statute and the Memorandum of
Association, shares may be issued on the terms that they are, or at the option
of the Company or the holder are, to be redeemed on such terms and in such
manner as the Company, before the issue of the shares, may by Special Resolution
determine.
(b) Subject to the provisions of the Statute and the
Memorandum of Association, the Company may purchase its own shares (including
fractions of a share), including any redeemable shares, provided that the manner
of purchase has first been authorized by the Company in general meeting and may
make payment therefor in any manner authorized by the Statute, including out of
capital.
VARIATION OF RIGHTS OF SHARES
12. If at any time the share capital of the Company is divided into
different classes of shares, the rights attached to any class (unless otherwise
provided by the terms of issue of the shares of that class) may, whether or not
the Company is being wound-up, be varied with the consent in writing of the
holders of three-fourths of the issued shares of that class, or with the
sanction of a special resolution passed at a general meeting of the holders of
the shares of that class.
The provisions of these Articles relating to general meetings
shall apply to every such general meeting of the holders of one class of shares
except that the necessary quorum shall be one (1) person holding or representing
by proxy at least one-third of the issued shares of the class and that any
holder of shares of the class present in person or by proxy may demand a poll.
13. The rights conferred upon the holders of the shares of any class
issued with preferred or other rights shall not, unless otherwise expressly
provided by the terms of issue of the shares of
3
<PAGE>
that class, be deemed to be varied by the creation or issue of further shares
ranking pari passu therewith.
COMMISSION ON SALE OF SHARES
14. The Company may in so far as the Statute from time to time permits
pay a commission to any person in consideration of his subscribing or agreeing
to subscribe whether absolutely or conditionally for any shares of the Company.
Such commissions may be satisfied by the payment of cash or the lodgement of
fully or partly paid-up shares or partly in one way and partly in the other. The
Company may also on any issue of shares pay such brokerage as may be lawful.
NON-RECOGNITION OF TRUSTS
15. No person shall be recognized by the Company as holding any share
upon any trust and the Company shall not be bound by or be compelled in any way
to recognize (even when having notice thereof) any equitable, contingent,
future, or partial interest in any share, or any interest in any fractional part
of a share, or (except only as is otherwise provided by these Articles or the
Statute) any other rights in respect of any share except an absolute right to
the entirety thereof in the registered holder.
LIEN ON SHARES
16. The Company shall have a first and paramount lien and charge on all
shares (whether fully paid-up or not) registered in the name of a member
(whether solely or jointly with others) for all debts, liabilities or
engagements to or with the Company (whether presently payable or not) by such
member or his estate, either alone or jointly with any other person, whether a
member or not, but the Directors may at any time declare any share to be wholly
or in part exempt from the provisions of this Article. The registration of a
transfer of any such share shall operate as a waiver of the Company's lien (if
any) thereon. The Company's lien (if any) on a share shall extend to all
dividends or other monies payable in respect thereof.
17. The Company may sell, in such manner as the Directors think fit,
any shares on which the Company has a lien, but no sale shall be made unless a
sum in respect of which the lien exists is presently payable, nor until the
expiration of fourteen days after a notice in writing stating and demanding
payment of such part of the amount in respect of which the lien exists as is
presently payable, has been given to the registered holder or holders for the
time being of the share, or the person, of which the Company has notice,
entitled thereto by reason of his death or bankruptcy.
18. To give effect to any such sale the Directors may authorize some
person to transfer the shares sold to the purchaser thereof. The purchaser shall
be registered as the holder of the shares comprised in any such transfer, 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 in reference to the sale.
19. The proceeds of such sale shall be received by the Company and
applied in payment of such part of the amount in respect of which the lien
exists as is presently payable and the residue, if any, shall (subject to a like
lien for sums not presently payable as existed upon the shares before the sale)
be paid to the person entitled to the shares at the date of the sale.
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CALL ON SHARES
20. (a) The Directors may from time to time make calls upon the members
in respect of any monies unpaid on their shares (whether on account of the
nominal value of the shares or by way of premium or otherwise) and not by the
conditions of allotment thereof made payable at fixed terms, provided that no
call shall exceed one-fourth of the nominal value of the share or be payable at
less than one month from the date fixed for the payment of the last preceding
call, and each member shall (subject to receiving at least fourteen days notice
specifying the time or times of payment) pay to the Company at the time or times
so specified the amount called on the shares. A call may be revoked or postponed
as the Directors may determine. A call may be made payable by instalments.
(b) A call shall be deemed to have been made at the time when the
resolution of the Directors authorizing such call was passed.
(c) The joint holders of a share shall be jointly and severally
liable to pay all calls in respect thereof.
21. If a sum called in respect of a share is not paid before or on a
day appointed for payment thereof, the persons from whom the sum is due shall
pay interest on the sum from the day appointed for payment thereof to the time
of actual payment at such rate not exceeding ten per cent per annum as the
Directors may determine, but the Directors shall be at liberty to waive payment
of such interest either wholly or in part.
22. Any sum which by the terms of issue of a share becomes payable on
allotment or at any fixed date, whether on account of the nominal value of the
share or by way of premium or otherwise, shall for the purposes of these
Articles be deemed to be a call duly made, notified and payable on the date on
which by the terms of issue the same becomes payable, and in the case of
non-payment all the relevant provisions of these Articles as to payment of
interest forfeiture or otherwise shall apply as if such sum had become payable
by virtue of a call duly made and notified.
23. The Directors may on the issue of shares differentiate between the
holders as to the amount of calls or interest to be paid and the times of
payment.
24. (a) The Directors may, if they think fit, receive from any member
willing to advance the same, all or any part of the monies uncalled and unpaid
upon any shares held by him, and upon all or any of the monies so advanced may
(until the same would but for such advances, become payable) pay interest at
such rate not exceeding (unless the Company in general meeting shall otherwise
direct) seven per cent (7%) per annum, as may be agreed upon between the
Directors and the member paying such sum in advance.
(b) No such sum paid in advance of calls shall entitle the member
paying such sum to any portion of a dividend declared in respect of any period
prior to the date upon which such sum would, but for such payment, become
presently payable.
FORFEITURE OF SHARES
25. (a) If a member fails to pay any call or instalment of a call or to
make any payment required by the terms of issue on the day appointed for payment
thereof, the Directors may, at any time thereafter during such time as any part
of the call, instalment or payment remains unpaid, give notice requiring payment
of so much of the call, instalment or payment as is unpaid, together with any
interest which may have accrued and all expenses that have been incurred by the
Company
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by reason of such non-payment. Such notice shall name a day (not earlier than
the expiration of fourteen days from the date of giving of the notice) on or
before which the payment required by the notice is to be made, and shall state
that, in the event of non-payment at or before the time appointed the shares in
respect of which such notice was given will be liable to be forfeited.
(b) If the requirements of any such notice as aforesaid are not
complied with, any share in respect of which the notice has been given may at
any time thereafter, before the payment required by the notice has been made, be
forfeited by a resolution of the Directors to that effect. Such forfeiture shall
include all dividends declared in respect of the forfeited share and not
actually paid before the forfeiture.
(c) A forfeited share may be sold or otherwise disposed of on such
terms and in such manner as the Directors think fit and at any time before a
sale or disposition the forfeiture may be canceled on such terms as the
Directors think fit.
26. A person whose shares have been forfeited shall cease to be a
member in respect of the forfeited shares, but shall, notwithstanding, remain
liable to pay to the Company all monies which at the date of forfeiture were
payable by him to the Company in respect of the shares together with interest
thereon, but his liability shall cease if and when the Company shall have
received payment in full of all monies whenever payable in respect of the
shares.
27. A certificate in writing under the hand of one Director or the
Secretary of the Company that a share in the Company has been duly forfeited on
a date stated in the declaration shall be conclusive evidence of the fact
therein stated as against all persons claiming to be entitled to the share. The
Company may receive the consideration given for the share on any sale or
disposition thereof and may execute a transfer of the share in favor of the
person to whom the share is sold or disposed of and he shall thereupon be
registered as the holder of the share and shall not be bound to see to the
application of the purchase money, if any, nor shall his title to the share be
affected by any irregularity or invalidity in the proceedings in reference to
the forfeiture, sale or disposal of the share.
28. 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.
REGISTRATION OF EMPOWERING INSTRUMENTS
29. The Company shall be entitled to charge a fee not exceeding one
dollar (US$1.00) on the registration of every probate, letters of
administration, certificate of death or marriage, power of attorney, notice in
lieu of distringas, or other instrument.
TRANSMISSION OF SHARES
30. In case of the death of a member, the survivor or survivors where
the deceased was a joint holder, and the legal personal representatives of the
deceased where he was a sole holder, shall be the only persons recognized by the
Company as having any title to his interest in the shares, but nothing herein
contained shall release the estate of any such deceased holder from any
liability in respect of any shares which had been held by him solely or jointly
with other persons.
31. (a) Any person becoming entitled to a share in consequence of the
death or bankruptcy or liquidation or dissolution of a member (or in any other
way than by transfer) may,
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upon such evidence being produced as may from time to time be required by the
Directors and subject as hereinafter provided, elect either to be registered
himself as holder of the share or to make such transfer of the share to such
other person nominated by him as the deceased or bankrupt person could have made
and to have such person registered as the transferee thereof, but the Directors
shall, in either case, have the same right to decline or suspend registration as
they would have had in the case of a transfer of the share by that member before
his death or bankruptcy as the case may be.
(b) If the person so becoming entitled shall elect to be registered
himself as holder he shall deliver or send to the Company a notice in writing
signed by him stating that he so elects.
32. A person becoming entitled to a share by reason of the death or
bankruptcy or liquidation or dissolution of the holder (or in any other case
than by transfer) 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,
except that he shall not, before being registered as a member in respect of the
share, be entitled in respect of it to exercise any right conferred by
membership in relation to meetings of the Company PROVIDED HOWEVER that the
Directors may at any time give notice requiring any such person to elect either
to be registered himself or to transfer the share and if the notice is not
complied with within ninety days the Directors may thereafter withhold payment
of all dividends, bonuses or other monies payable in respect of the share until
the requirements of the notice have been complied with.
AMENDMENT OF MEMORANDUM OF ASSOCIATION, CHANGE OF
LOCATION OF REGISTERED OFFICE & ALTERATION OF CAPITAL
33. (a) Subject to and insofar as permitted by the provisions of the
Statute, the Company may, from time to time by ordinary resolution, alter or
amend its Memorandum or Articles of Association, otherwise than with respect to
the formers' name and objects, and may, without restricting the generality of
the foregoing:
(i) increase the share capital by such sum to be divided into
shares of such amount or without nominal or par value as the resolution shall
prescribe and with such rights, priorities and privileges annexed thereto, as
the Company in general meeting may determine.
(ii) consolidate and divide all or any of its share capital
into shares of larger amount than its existing shares;
(iii) by subdivision of its existing shares or any of them
divide the whole or any part of its share capital into shares of smaller amount
than is fixed by the Memorandum of Association or into shares without nominal or
par value;
(iv) 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.
(b) All new shares created hereunder shall be subject to the same
provisions with reference to the payment of calls, liens, transfer,
transmission, forfeiture and otherwise as the shares in the original share
capital.
(c) Subject to the provisions of the Statute, the Company may by
Special Resolution change its name or alter its objects.
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(d) Without prejudice to Article 11 hereof and subject to the
provisions of the Statute, the Company may by Special Resolution reduce its
share capital and any capital redemption reserve fund.
(e) Subject to the provisions of the Statute, the Company may by
resolution of the Directors change the location of its registered office.
CLOSING REGISTER OF MEMBERS OR FIXING RECORD DATE
34. For the purpose of determining Members entitled to notice of or to
vote at any meeting of Members or any adjournment thereof, or Members entitled
to receive payment of any dividend, or in order to make a determination of
Members for any other proper purpose, the Directors of the Company may provide
that the register of Members shall be closed for transfers for a stated period
but not to exceed in any case forty (40) days. If the register of Members shall
be so closed for the purpose of determining Members entitled to notice of or to
vote at a meeting of Members such register shall be so closed for at least ten
(10) days immediately preceding such meeting and the record date for such
determination shall be the date of the closure of the register of Members.
35. In lieu of or apart from closing the register of members, the
Directors may fix in advance a date as the record date for any such
determination of members entitled to notice of or to vote at a meeting of the
members and for the purpose of determining the members entitled to receive
payment of any dividend the Directors may, at or within 90 days prior to the
date of declaration of such dividend fix a subsequent date as the record date
for such determination.
36. If the register of members is not so closed and no record date is
fixed for the determination of members entitled to notice of or to vote at a
meeting of members or members entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the Directors declaring such dividend is adopted, as the case may
be, shall be the record date for such determination of members. When a
determination of members entitled to vote at any meeting of members has been
made as provided in this section, such determination shall apply to any
adjournment thereof.
GENERAL MEETING
37. (a) Subject to paragraph (c) hereof, the Company shall within one
year of its incorporation and in each year of its existence thereafter hold a
general meeting as its Annual General Meeting and shall specify the meeting as
such in the notices calling it. The Annual General Meeting shall be held at such
time and place as the Directors shall appoint and if no other time and place is
prescribed by them, it shall be held at the registered office of the Company on
the second Wednesday in December of each year at ten o'clock in the morning.
(b) At these meetings the report of the Directors (if any) shall be
presented.
(c) If the Company is exempted as defined in the Statute it may but
shall not be obliged to hold an Annual General Meeting.
38. (a) The Directors may whenever they think fit, and they shall on
the requisition of members of the Company holding at the date of the deposit of
the requisition not less than one-tenth of such of the paid-up capital of the
Company as at the date of the deposit carries the right of voting at general
meetings of the Company, proceed to convene a general meeting of the Company.
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(b) The requisition must state the objects of the meeting and must
be signed by the requisitionists and deposited at the Registered Office of the
Company and may consist of several documents in like form each signed by one or
more requisitionists.
(c) If the Directors do not within twenty-one days from the date of
the deposit of the requisition duly proceed to convene a general meeting, the
requisitionists, or any of them representing more than one-half of the total
voting rights of all of them, may themselves convene a general meeting, but any
meeting so convened shall not be held after the expiration of three months after
the expiration of the said twenty-one days.
(d) A general meeting convened as aforesaid by requisitionists
shall be convened in the same manner as nearly as possible as that in which
general meetings are to be convened by Directors.
NOTICE OF GENERAL MEETINGS
39. At least five days' notice shall be given of an Annual General
Meeting or any other general meeting. Every notice shall be exclusive of the
date on which it is given or deemed to be given and of the day for which it is
given and shall specify the place, the day and the hour of the meeting and the
general nature of the business and shall be given in manner hereinafter
mentioned or in such other manner if any as may be prescribed by the Company
PROVIDED that a general meeting of the Company shall, whether or not the notice
specified in this regulation has been given and whether or not the provisions of
Article 38 have been complied with, be deemed to have been duly convened if it
is so agreed:
(a) in the case of a general meeting called as an Annual General
Meeting by all the members entitled to attend and vote thereat or their proxies;
and
(b) in the case of any other general meeting by a majority in
number of the members having a right to attend and vote at the meeting, being a
majority together holding not less than seventy-five per cent (75%) in nominal
value or in the case of shares without nominal value or par value seventy-five
per cent (75%) of the shares in issue, or their proxies.
40. The accidental omission to give notice of a general meeting to, or
the non-receipt of notice of a meeting by any person entitled to receive notice
shall not invalidate the proceedings of that meeting.
PROCEEDINGS AT GENERAL MEETINGS
41. No business shall be transacted at any general meeting unless a
quorum of members is present at the time when the meeting proceeds to business;
two (2) members present in person or by proxy shall be a quorum provided always
that if the Company has one shareholder of record the quorum shall be that one
(1) Member present in person or by proxy.
42. A resolution (including a Special Resolution) in writing (in one or
more counterparts) signed by all members for the time being entitled to receive
notice of and to attend and vote at general meetings (or being corporations by
their duly authorized representatives) shall be as valid and effective as if the
same had been passed at a general meeting of the Company duly convened and held.
43. If within half an hour from the time appointed for the meeting a
quorum is not present, the meeting, if convened upon the requisition of members,
shall be dissolved and in any
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other case it shall stand adjourned to the same day in the next week at the same
time and place or to such other time or such other place as the directors may
determine and if at the adjourned meeting a quorum is not present within half an
hour from the time appointed for the meeting the members present shall be a
quorum.
44. The Chairman, if any, of the Board of Directors shall preside as
Chairman at every general meeting of the Company, or if there is no such
Chairman, or if he shall not be present within fifteen minutes after the time
appointed for the holding of the meeting, or is unwilling to act, the Directors
present shall elect one of their number to be Chairman of the meeting.
45. If at any general meeting no Director is willing to act as Chairman
or if no Director is present within fifteen minutes after the time appointed for
holding the meeting, the members present shall choose one of their number to be
Chairman of the meeting.
46. The Chairman may, with the consent of any general meeting duly
constituted hereunder, and shall if so directed by the meeting, 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 left unfinished at
the meeting from which the adjournment took place. When a general meeting is
adjourned for thirty days or more, notice of the adjourned meeting shall be
given as in the case of an original meeting; save as aforesaid it shall not be
necessary to give any notice of an adjournment or of the business to be
transacted at an adjourned general meeting.
47. At any general meeting a resolution put to the vote of the meeting
shall be decided on a show of hands unless a poll is, before or on the
declaration of the result of the show of hands, demanded by the Chairman or any
other member present in person or by proxy.
48. Unless a poll be so demanded a declaration by the Chairman that a
resolution has on a show of hands been carried, or carried unanimously, or by a
particular majority, or lost, and an entry to that effect in the Company's
Minute Book containing the Minutes of the proceedings of the meeting shall be
conclusive evidence of that fact without proof of the number or proportion of
the votes recorded in favor of or against such resolution.
49. The demand for a poll may be withdrawn.
50. Except as provided in Article 52, if a poll is duly demanded it
shall be taken in such manner as the Chairman directs and the result of the poll
shall be deemed to be the resolution of the general meeting at which the poll
was demanded.
51. In the case of an equality of votes, whether on a show of hands or
on a poll, the Chairman of the general meeting at which the show of hands takes
place or at which the poll is demanded, shall be entitled to a second or casting
vote.
52. 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 at such time as the Chairman of the general meeting directs and
any business other than that upon which a poll has been demanded or is
contingent thereon may be proceeded with pending the taking of the poll.
VOTES OF MEMBERS
53. Subject to any rights or restrictions for the time being attached
to any class or classes of shares, on a show of hands every member of record
present in person or by proxy at a general
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meeting shall have one vote and on a poll every member of record present in
person or by proxy shall have one vote for each share registered in his name in
the register.
54. In the case of joint holders of record 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 of members.
55. A member of unsound mind, or in respect of whom an order has been
made by any court, having jurisdiction in lunacy, may vote, whether on a show of
hands or on a poll, by his committee, receiver, curator bonis, or other person
in the nature of a committee, receiver or curator bonis appointed by that court,
and any such committee, receiver, curator bonis or other persons may vote by
proxy.
56. No member shall be entitled to vote at any general meeting unless
he is registered as a shareholder of the Company on the record date for such
meeting nor unless all calls or other sums presently payable by him in respect
of shares in the Company have been paid.
57. No objection shall be raised to the qualification of any voter
except at the general meeting or adjourned general meeting at which the vote
objected to is given or tendered and every vote not disallowed at such general
meeting shall be valid for all purposes. Any such objection made in due time
shall be referred to the Chairman of the general meeting whose decision shall be
final and conclusive.
58. On a poll or on a show of hands votes may be given either
personally or by proxies.
PROXIES
59. The instrument appointing a proxy shall be in writing and shall be
executed under the hand of the appointor or of his attorney duly authorized in
writing, or, if the appointor is a corporation under the hand of an officer or
attorney duly authorized in that behalf. A proxy need not be a member of the
Company.
60. The instrument appointing a proxy shall be deposited at the
Registered Office of the Company or at such other place as is specified for that
purpose in the notice convening the meeting no later than the time for holding
the meeting, or adjourned meeting provided that the Chairman of the Meeting may
at his discretion direct that an instrument of proxy shall be deemed to have
been duly deposited upon receipt of telex, cable or telecopier confirmation from
the appointor that the instrument of proxy duly signed is in the course of
transmission to the Company.
61. The instrument appointing a proxy may be in any usual or common
form and may be expressed to be for a particular meeting or any adjournment
thereof or generally until revoked. An instrument appointing a proxy shall be
deemed to include the power to demand or join or concur in demanding a poll.
62. 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 proxy or of the authority under which the proxy was
executed, or the transfer of the share in respect of which the proxy is given
provided that no intimation in writing of such death, insanity, revocation or
transfer as aforesaid shall have been received by the Company at the registered
office before the commencement of the general meeting, or adjourned meeting at
which it is sought to use the proxy.
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63. Any corporation which is a member of record of the Company may in
accordance with its Articles or in the absence of such provision by resolution
of its Directors or other governing body authorize such person as it thinks fit
to act as its representative at any meeting of the Company or of any class of
members of the Company, and the person so authorized shall be entitled to
exercise the same powers on behalf of the corporation which he represents as the
corporation could exercise if it were an individual member of record of the
Company.
64. Shares of its own stock belonging to the Company or held by it in a
fiduciary capacity shall not be voted, directly or indirectly, at any meeting
and shall not be counted in determining the total number of outstanding shares
at any given time.
DIRECTORS
65. There shall be a Board of Directors consisting of not less than one
or more than ten persons (exclusive of Alternate Directors) PROVIDED HOWEVER
that the Company may from time to time by ordinary resolution increase or reduce
the limits in the numbers of Directors. The first Directors on the Company shall
be determined in writing by, or appointed by a resolution of, the subscribers of
the Memorandum of Association or a majority of them.
66. The remuneration to be paid to the Directors shall be such
remuneration as the Directors shall determine. Such remuneration shall be deemed
to accrue from day to day. The Directors shall also be entitled to be paid their
traveling, hotel and other expenses properly incurred by them in going to,
attending and returning from meetings of the Directors, or any committee of the
Directors, or general meetings of the Company, or otherwise in connection with
the business of the Company, or to receive a fixed allowance in respect thereof
as may be determined by the Directors from time to time, or a combination partly
of one such method and partly the other.
67. The Directors may by resolution award special remuneration to any
Director of the Company undertaking any special work or services for, or
undertaking any special mission on behalf of, the Company other than his
ordinary routine work as a Director. Any fees paid to a Director who is also
counsel or solicitor to the Company, or otherwise serves it in a professional
capacity shall be in addition to his remuneration as a Director.
68. A Director or Alternate Director may hold any other office or place
of profit under the Company (other than the office of Auditor) in conjunction
with his office of Director for such period and on such terms as to remuneration
and otherwise as the Directors may determine.
69. A Director or Alternate Director may act by himself or his firm in
a professional capacity for the Company and he or his firm shall be entitled to
remuneration for professional services as if he were not a Director or Alternate
Director.
70. A shareholding qualification for Directors may be fixed by the
Company in general meeting, but unless and until so fixed no qualification shall
be required.
71. A Director or Alternate Director of the Company may be or become a
Director or other Officer of or otherwise interested in any company promoted by
the Company or in which the Company may be interested as shareholder or
otherwise and no such Director or Alternate Director shall be accountable to the
Company for any remuneration or other benefits received by him as a Director or
Officer of, or from his interest in, such other company.
72. No person shall be disqualified from the office of Director or
Alternate Director or prevented by such office from contracting with the
Company, either as vendor, purchaser or
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otherwise, nor shall any such contract or any contract or transaction entered
into by or on behalf of the Company in which any Director or Alternate Director
shall be in any way interested be or be liable to be avoided, nor shall any
Director or Alternate Director so contracting or being so interested be liable
to account to the Company for any profit realized by any such contract or
transaction by reason of such Director holding office or of the fiduciary
relation thereby established. A Director (or his Alternate Director in his
absence) shall be at liberty to vote in respect of any contract or transaction
in which he is so interested as aforesaid PROVIDED HOWEVER that the nature of
the interest of any Director or Alternate Director in any such contract or
transaction shall be disclosed by him or the Alternate Director appointed by him
at or prior to its consideration and any vote thereon.
73. A general notice that a Director or Alternate Director is a
shareholder of any specified firm or company and is to be regarded as interested
in any transaction with such firm or company shall be sufficient disclosure
under Article 72 and after such general notice it shall not be necessary to give
special notice relating to any particular transaction.
ALTERNATE DIRECTORS
74. Subject to the exception contained in Article 82, a Director who
expects to be unable to attend Directors' Meetings because of absence, illness
or otherwise may appoint any person to be an Alternate Director to act in his
stead and such appointee whilst he holds office as an Alternate Director shall,
in the event of absence therefrom of his appointor, be entitled to attend
meetings of the Directors and to vote thereat and to do, in the place and stead
of his appointor, any other act or thing which his appointor is permitted or
required to do by virtue of his being a Director as if the Alternate Director
were the appointor, other than appointment of an Alternate to himself, and he
shall ipso facto vacate office if and when his appointor ceases to be a Director
or removes the appointee from office. Any appointment or removal under this
Article shall be effected by notice in writing under the hand of the Director
making the same.
POWERS AND DUTIES OF DIRECTORS
75. The business of the Company shall be managed by the Directors (or a
sole Director if only one is appointed) who may pay all expenses incurred in
promoting, registering and setting up the Company, and may exercise all such
powers of the Company as are not prohibited, from time to time by the Statute,
or by these Articles, or such regulations, being not inconsistent with the
aforesaid, as may be prescribed by the Company in general meeting required to be
exercised by the Company in general meeting PROVIDED HOWEVER that no regulations
made by the Company in general meeting shall invalidate any prior act of the
Directors which would have been valid if that regulation had not been made.
76. The Directors may from time to time and at any time by powers of
attorney appoint any company, firm, person or body of persons, whether nominated
directly or indirectly by the Directors, to be the attorney or attorneys of the
Company for such purpose and with such powers, authorities and discretions (not
exceeding those vested in or exercisable by the Directors under these Articles)
and for such period and subject to such conditions as they may think fit, and
any such powers of attorney may contain such provisions for the protection and
convenience of persons dealing with any such attorneys as the Directors may
think fit and may also authorize any such attorney to delegate all or any of the
powers, authorities and discretions vested in him.
77. All cheques, promissory notes, drafts, bills of exchange and other
negotiable instruments and all receipts for monies paid to the Company shall be
signed, drawn, accepted,
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endorsed or otherwise executed as the case may be in such manner as the
Directors shall from time to time by resolution determine.
78. The Directors shall cause Minutes to be made in books provided for
the purpose:
(a) of all appointments of Officers made by the Directors;
(b) of the names of the Directors (including those represented
thereat by an Alternate or by proxy) present at each meeting of the Directors
and of any committee of the Directors;
(c) of all resolutions and proceedings at all meetings of the
Company, and of the Directors and of Committees of Directors.
79. The Directors on behalf of the Company may pay a gratuity or
pension or allowance on retirement to any Director who has held any other
salaried office or place of profit with the Company or to his widow or
dependents and may make contributions to any fund and pay premiums for the
purchase or provision of any such gratuity, pension or allowance.
80. The Directors may exercise all the powers of the Company to borrow
money and to mortgage or charge its undertaking, property and uncalled capital
or any part thereof and to issue debentures, debenture stock and other
securities whether outright or as security for any debt, liability or obligation
of the Company or of any third party.
MANAGEMENT
81. (a) The Directors may from time to time provide for the management
of the affairs of the Company in such manner as they shall think fit and the
provisions contained in the three next following paragraphs shall be without
prejudice to the general powers conferred by this paragraph.
(b) The Directors from time to time and at any time may establish
any committees, local boards or agencies for managing any of the affairs of the
Company and may appoint any persons to be members of such committees or local
boards or any managers or agents and may fix their remuneration.
(c) The Directors from time to time and at any time may delegate to
any such committee, local board, manager or agent any of the powers, authorities
and discretions for the time being vested in the Directors and may authorize the
members for the time being of any such local board, or any of them to fill up
any vacancies therein and to act notwithstanding vacancies and any such
appointment or delegation may be made on such terms and subject to such
conditions as the Directors may think fit. The Directors may at any time remove
any person so appointed and may annul or vary any such delegation, but no person
dealing in good faith and without notice of any such annulment or variation
shall be affected thereby.
(d) Any such delegates as aforesaid may be authorized by the
Directors to subdelegate all or any of the powers, authorities, and discretions
for the time being vested in them.
MANAGING DIRECTORS
82. The Directors may, from time to time, appoint one or more of their
body (but not an Alternate Director) to the office of Managing Director for such
term and at such remuneration
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(whether by way of salary, or commission, or participation in profits, or partly
in one way and partly in another) as they may think fit but his appointment
shall be subject to determination ipso facto if he ceases from any cause to be a
Director and no Alternate Director appointed by him can act in his stead as a
Director or Managing Director.
83. The Directors may entrust to and confer upon a Managing Director
any of the powers exercisable by them upon such terms and conditions and with
such restrictions as they may think fit and either collaterally with or to the
exclusion of their own powers and may from time to time revoke, withdraw, alter
or vary all or any of such powers.
PROCEEDINGS OF DIRECTORS
84. Except as otherwise provided by these Articles, the Directors shall
meet together for the despatch of business, convening, adjourning and otherwise
regulating their meetings as they think fit. Questions arising at any meeting
shall be decided by a majority of votes of the Directors and Alternate Directors
present at a meeting at which there is a quorum, the vote of an Alternate
Director not being counted if his appointor be present at such meeting. In case
of an equality of votes, the Chairman shall have a second or casting vote.
85. A Director or Alternate Director may, and the Secretary on the
requisition of a Director or Alternate Director shall, at any time summon a
meeting of the Directors by at least two days' notice in writing to every
Director and Alternate Director which notice shall set forth the general nature
of the business to be considered unless notice is waived by all the Directors
(or their Alternates) either at, before or after the meeting is held and
PROVIDED FURTHER if notice is given in person, by cable, telex or telecopy the
same shall be deemed to have been given on the day it is delivered to the
Directors or transmitting organization as the case may be. The provisions of
Article 40 shall apply mutatis mutandis with respect to notices of meetings of
Directors.
86. The quorum necessary for the transaction of the business of the
Directors may be fixed by the Directors and unless so fixed shall be two, a
Director and his appointed Alternate Director being considered only one person
for this purpose, provided always that if there shall at any time be only a sole
Director the quorum shall be one. For the purposes of this Article an Alternate
Director or proxy appointed by a Director shall be counted in a quorum at a
meeting at which the Director appointing him is not present.
87. The continuing Directors may act notwithstanding any vacancy in
their body, but if and so long as their number is reduced below the number fixed
by or pursuant to these Articles as the necessary quorum of Directors the
continuing Directors or Director may act for the purpose of increasing the
number of Directors to that number, or of summoning a general meeting of the
Company, but for no other purpose.
88. The Directors may elect a Chairman of their Board and determine the
period for which he is to hold office; but if no such Chairman is elected, or if
at any meeting the Chairman is not present within five minutes after the time
appointed for holding the same, the Directors present, as appointed by the Class
"B" shareholders, may choose one of their number to be Chairman of the meeting.
89. The Directors may delegate any of their powers to committees
consisting of such member or members of the Board of Directors (including
Alternate Directors in the absence of their appointors) as they think fit; any
committee so formed shall in the exercise of the powers so delegated conform to
any regulations that may be imposed on it by the Directors.
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90. A committee may meet and adjourn as it thinks proper. Questions
arising at any meeting shall be determined by a majority of votes of the members
present, and in the case of an equality of votes the Chairman shall have a
second or casting vote.
91. All acts done by any meeting of the Directors or of a committee of
Directors (including any person acting as an Alternate Director) shall,
notwithstanding that it be afterwards discovered that there was some defect in
the appointment of any Director or Alternate Director, or that they or any of
them were disqualified, be as valid as if every such person had been duly
appointed and qualified to be a Director or Alternate Director as the case may
be.
92. Members of the Board of Directors or of any committee thereof may
participate in a meeting of the Board or of such committee by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other and participation in a
meeting pursuant to this provision shall constitute presence in person at such
meeting. A resolution in writing (in one or more counterparts), signed by all
the Directors for the time being or all the members of a committee of Directors
(an Alternate Director being entitled to sign such resolution on behalf of his
appointor) shall be as valid and effectual as if it had been passed at a meeting
of the Directors or committee as the case may be duly convened and held.
93. (a) A Director may be represented at any meeting of the Board of
Directors by a proxy appointed by him in which event the presence or vote of the
proxy shall for all purposes be deemed to be that of the Director.
(b) The provisions of Articles 59-62 shall mutatis mutandis apply
to the appointment of proxies by Directors.
VACATION OF OFFICE OF DIRECTOR
94. The office of a Director shall be vacated:
(a) If he gives notice in writing to the Company that he resigns
the office of Director;
(b) If he absents himself (without being represented by proxy or an
Alternate Director appointed by him) from three consecutive meetings of the
Board of Directors without special leave of absence from the Directors, and they
pass a resolution that he has by reason of such absence vacated office;
(c) If he dies, becomes bankrupt or makes any arrangement or
composition with his creditors generally;
(d) If he is found a lunatic or becomes of unsound mind.
APPOINTMENT AND REMOVAL OF DIRECTORS
95. The Company may by ordinary resolution appoint any person to be a
Director and may in like manner remove any Director and may in like manner
appoint another person in his stead.
96. The Directors shall have power at any time and from time to time to
appoint any person to be a Director, either to fill a casual vacancy or as an
addition to the existing Directors but so that the total amount of Directors
(exclusive of Alternate Directors) shall not at any time exceed the number fixed
in accordance with these Articles.
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PRESUMPTION OF ASSENT
97. A Director of the Company who is present at a meeting of the Board
of Directors at which action on any Company matter is taken shall be presumed to
have assented to the action taken unless his dissent shall be entered in the
Minutes of the meeting or unless he shall file his written dissent from such
action with the person acting as the Secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered mail to such
person immediately after the adjournment of the meeting. Such right to dissent
shall not apply to a Director who voted in favor of such action.
SEAL
98. The Seal shall only be used by the authority of the Directors or of
a committee of the Directors authorized by the Directors in that behalf and
every instrument to which the Seal has been affixed shall be signed by one
person who shall be either a Director or the Secretary or Secretary-Treasurer or
some person appointed by the Directors for the purpose.
PROVIDED THAT the Company may have for use in any place or places outside the
Cayman Islands, a duplicate seal or seals each of which shall be a facsimile of
the Common Seal of the Company and, if the Directors so determine, with the
addition on its face of the name of every place where it is to be used.
PROVIDED FURTHER THAT a Director, Secretary or other officer or representative
or attorney may without further authority of the Directors affix the Seal of the
Company over his signature alone to any document of the Company required to be
authenticated by him under Seal or to be filed with the Registrar of Companies
in the Cayman Islands or elsewhere wheresoever.
OFFICERS
99. The Company may have a President, a Secretary and/or Treasurer
appointed by the Directors who may also from time to time appoint such other
Officers as they consider necessary, all for such terms, at such remuneration
and to perform such duties, and subject to such provisions as to
disqualification and removal as the Directors from time to time prescribe.
DIVIDENDS, DISTRIBUTIONS AND RESERVE
100. Subject to the Statute, the Directors may from time to time
declare dividends (including interim dividends) and distributions on shares of
the Company outstanding and authorize payment of the same out of the funds of
the Company lawfully available therefor.
101. The Directors may, before declaring any dividends, or
distributions, set aside such sums as they think proper as a reserve or reserves
which shall at the discretion of the Directors, be applicable for any purpose of
the Company and pending such application may, at the like discretion, be
employed in the business of the Company.
102. No dividend or distribution shall be payable except out of the
profits of the Company, realized or unrealized, or out of the share premium
account or as otherwise permitted by the Statute.
103. Subject to the rights of persons, if any, entitled to shares with
special rights as to dividends or distributions, if dividends or distributions
are to be declared on a class of shares they shall be declared and paid
according to the amounts paid or credited as paid on the shares of such
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class outstanding on the record date for such dividend or distribution as
determined in accordance with these Articles but no amount paid or credited as
paid on a share in advance of calls shall be treated for the purpose of this
Article as paid on the share.
104. The Directors may deduct from any dividend or distribution payable
to any member all sums of money (if any) presently payable by him to the Company
on account of calls or otherwise.
105. The Directors may declare that any dividend or distribution be
paid wholly or partly by the distribution of specific assets and in particular
of paid up shares, debentures, or debenture stock of any other company or in any
one or more of such ways and where any difficulty arises in regard to such
distribution, the Directors may settle the same as they think expedient and in
particular may issue fractional certificates and 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 members and may vest any such specific assets in
trustees as may seem expedient to the Directors.
106. Any dividend, distribution, interest or other monies payable in
cash in respect of shares may be paid by cheque or warrant sent through the post
directed to the registered address of the holder or, in the case of joint
holders, to the holder who is first named on the register of members or to such
person and to such address as such holder or joint holders may in writing
direct. Every such cheque or warrant shall be made payable to the order of the
person to whom it is sent. Any one or two or more joint holders may give
effectual receipts for any dividends, bonuses, or other monies payable in
respect of the share held by them as joint holders.
107. No dividend or distribution shall bear interest against the
Company.
CAPITALIZATION
108. The Company may upon the recommendation of the Directors by
ordinary resolution authorize the Directors to capitalise any sum standing to
the credit of any of the Company's reserve accounts (including share premium
account and capital redemption reserve fund) or any sum standing to the credit
of profit and loss account or otherwise available for distribution and to
appropriate such sum to members in the proportions in which such sum would have
been divisible amongst them had the same been a distribution of profits by way
of dividend and to apply such sum on their behalf in paying up in full unissued
shares for allotment and distribution credited as fully paid up to and amongst
them in the proportion aforesaid. In such event the Directors shall do all acts
and things required to give effect to such capitalization, with full power to
the Directors to make such provisions as they think fit for the case of shares
becoming distributable in fractions (including provisions whereby the benefit of
fractional entitlements accrue to the Company rather than to the members
concerned). The Directors may authorize any person to enter on behalf of all the
members interested into an agreement with the Company providing for such
capitalization and matters incidental thereto and any agreement made under such
authority shall be effective and binding on all concerned.
BOOKS OF ACCOUNT
109. The Directors shall cause proper books of account to be kept with
respect to:
(a) all sums of money received and expended by the Company and the
matters in respect of which the receipt or expenditure takes place;
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(b) all sales and purchases of goods by the Company;
(c) the assets and liabilities of the Company.
Proper books shall not be deemed to be kept if there are not kept such books of
account as are necessary to give a true and fair view of the state of the
Company's affairs and to explain its transactions.
110. The Directors shall from time to time determine whether and to
what extent and at what times and places and under what conditions or
regulations the accounts and books of the Company or any of them shall be open
to the inspection of members not being Directors and no member (not being a
Director) shall have any right of inspecting any account or book or document of
the Company except as conferred by Statute or authorized by the Directors or by
the Company in general meeting.
111. The Directors may from time to time cause to be prepared and to be
laid before the Company in general meeting profit and loss accounts, balance
sheets, group accounts (if any) and such other reports and accounts as may be
required by law.
AUDIT
112. The Company may at any Annual General Meeting appoint an Auditor
or Auditors of the Company who shall hold office until the next Annual General
Meeting and may fix his or their remuneration.
113. The Directors may before the first Annual General Meeting appoint
an Auditor or Auditors of the Company who shall hold office until the first
Annual General Meeting unless previously removed by an ordinary resolution of
the members in general meeting in which case the members at that meeting may
appoint Auditors. The Directors may fill any casual vacancy in the office of
Auditor but while any such vacancy continues the surviving or continuing Auditor
or Auditors, if any, may act. The remuneration of any Auditor appointed by the
Directors under this Article may be fixed by the Directors.
114. Every Auditor of the Company shall have a right of access at all
times to the books and accounts and vouchers of the Company and shall be
entitled to require from the Directors and Officers of the Company such
information and explanation as may be necessary for the performance of the
duties of the auditors.
115. Auditors shall at the next Annual General Meeting following their
appointment and at any other time during their term of office, upon request of
the Directors or any general meeting of the members, make a report on the
accounts of the Company in general meeting during their tenure of office.
NOTICES
116. Notices shall be in writing and may be given by the Company to any
member either personally or by sending it by post, cable, telex or telecopy to
him or to his address as shown in the register of members, such notice, if
mailed, to be forwarded airmail if the address be outside the Cayman Islands.
117. (a) Where a notice is sent by post, service of the notice shall be
deemed to be effected by properly addressing, pre-paying and posting a letter
containing the notice, and to have
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been effected at the expiration of sixty hours after the letter containing the
same is posted as aforesaid.
(b) Where a notice is sent by cable, telex or telecopy service of
the notice shall be deemed to be effected by properly addressing and sending
such notice through a transmitting organization, and to have been effected on
the day the same is sent as aforesaid.
118. A notice may be given by the Company to the joint holders of
record of a share by giving the notice to the joint holder first named on the
register of members in respect of the share.
119. A notice may be given by the Company to the person or persons
which the Company has been advised are entitled to a share or shares in
consequence of the death or bankruptcy of a member by sending it through the
post as aforesaid in a pre-paid letter addressed to them by name, or by the
title of representatives of the deceased, or trustee of the bankrupt, or by any
like description at the address supplied for that purpose by the persons
claiming to be so entitled, or at the option of the Company by giving the notice
in any manner in which the same might have been given if the death or bankruptcy
had not occurred.
120. Notice of every general meeting shall be given in any manner
hereinbefore authorized to:
(a) every person shown as a member in the register of members as of
the record date for such meeting except that in the case of joint holders the
notice shall be sufficient if given to the joint holder first named in the
register of members.
(b) every person upon whom the ownership of a share devolves by
reason of his being a legal personal representative or a trustee in bankruptcy
of a member of record where the member of record but for his death or bankruptcy
would be entitled to receive notice of the meeting; and
No other person shall be entitled to receive notices of general meetings.
WINDING UP
121. If the Company shall be wound up the Liquidator may, with the
sanction of a special resolution of the Company and any other sanction required
by the Statute, divide amongst the members in specie or kind the whole or any
part of the assets of the Company (whether they shall consist of property of the
same kind or not) and may for such purpose set such value as he deems fair upon
any property to be divided as aforesaid and may determine how such division
shall be carried out as between the members or different classes of members. The
Liquidator may with the like sanction, vest the whole or any part of such assets
in trustees upon such trusts for the benefit of the contributories as the
Liquidator, with the like sanction, shall think fit, but so that no member shall
be compelled to accept any shares or other securities whereon there is any
liability.
122. 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, as
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. And if in a winding up the
assets available for distribution amongst the members 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 amongst the members in proportion to
the capital paid up at the commencement of the winding up, on the shares held by
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them respectively. This Article is to be without prejudice to the rights of the
holders of shares issued upon special terms and conditions.
INDEMNITY
123. The Directors and Officers for the time being of the Company and
any trustee for the time being acting in relation to any of the affairs of the
Company and their heirs, executors, administrators and personal representatives
respectively shall be indemnified out of the assets of the Company from and
against all actions, proceedings, costs, charges, losses, damages and expenses
which they or any of them shall or may incur or sustain by reason of any act
done or omitted in or about the execution of their duty in their respective
offices or trusts, except such (if any) as they shall incur or sustain by or
through their own wilful neglect or default respectively and no such Director,
Officer or trustee shall be answerable for the acts, receipts, neglects or
defaults of any other Director, Officer or trustee or for joining in any receipt
for the sake of conformity or for the solvency or honesty of any banker or other
persons with whom any monies or effects belonging to the Company may be lodged
or deposited for safe custody or for any insufficiency of any security upon
which any monies of the Company may be invested or for any other loss or damage
due to any such cause as aforesaid or which may happen in or about the execution
of his office or trust unless the same shall happen through the wilful neglect
or default of such Director, Officer or trustee.
FINANCIAL YEAR
124. Unless the Directors otherwise prescribe, the financial year of
the Company shall end on 30th September each year and, following the year of
incorporation, shall begin on 1st October in each year.
AMENDMENTS OF ARTICLES
125. Subject to the Statute, the Company may at any time and from time
to time by special resolution alter or amend these Articles in whole or in part.
TRANSFER BY WAY OF CONTINUATION
126. If the Company is exempted as defined in the Statute, it shall,
subject to the provisions of the Statute and with the approval of a Special
Resolution, have the power to register by way of continuation as a body
corporate under the laws of any jurisdiction outside the Cayman Islands and to
be deregistered in the Cayman Islands.
BEARER SHARES
127. Articles 128 to 135 shall apply only if the Company is exempted as
defined in the Statute and shall with respect to bearer shares apply
notwithstanding any other provision contained in these Articles.
128. The Company may at the request of any applicant for shares issue
such shares to bearer provided always that no share shall be issued to bearer
unless it is fully paid up and non-assessable.
129. Where shares are issued to bearer they shall be represented by a
certificate or certificates in bearer form (hereinafter referred to as a "bearer
certificate" or "bearer certificates") and the fact that they are so issued and
the date upon which they are so issued shall be entered in the
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register of members; and except as aforesaid, the provisions of Article 4 hereof
shall apply to such bearer certificates.
130. Shares issued to bearer shall be transferred by delivery of the
bearer certificate or certificates representing the same.
131. Except as otherwise provided in these Articles the only person
capable of being recognized as entitled to exercise any of the rights or to
receive any of the benefits (subject to Article 134 hereof) in respect of a
share issued to bearer shall be the holder of the bearer certificate
representing the same and for such purposes the Directors shall be entitled to
require presentation of the certificate in question or evidence satisfactory to
them that the person is the holder thereof.
132. There may, if the Directors so resolve, be attached to or issued
with each bearer certificate a coupon or series of coupons in such form as the
Directors may determine, each such coupon to specify the number of shares to
which it relates and to bear a distinguishing number to the intent that to each
dividend declared by the Directors there shall correspond one and only one
distinguishing number.
133. Where the Company has issued shares to bearer, notices to any
holder thereof shall (unless waived in manner set forth in Article 39 hereof or
unless some other form of giving notice shall have been endorsed on the bearer
certificate or certificates in question in which case such form shall be used)
be deemed to have been given by publication of the notice in question in two
editions of such international publication as the Directors shall resolve.
134. (a) Any dividend or distribution whether in cash or in specie, or
payment of interest or other monies in respect of shares issued to bearer shall
be made only on delivery of the relevant coupon (where coupons have been issued)
or otherwise upon production of the relevant bearer certificate on the terms and
in the manner specified in the advertisement thereof pursuant to paragraph (b)
of this Article and may be paid or made by cheque, warrant or other document of
title delivered to or sent through the post directed to such address as may be
specified in writing by the holder of the bearer certificate in question or the
relevant coupon as the case may be. Where appropriate there shall be delivered
or sent in like manner with such payment a coupon or series of coupons as
referred to in Article 132 bearing the next consecutive distinguishing number or
numbers as the case may be.
(b) Upon any dividend, distribution, payment of interest or other
monies being declared to be payable or made upon shares issued to bearer, the
Directors shall give notice thereof in the manner set forth in Article 133
stating:
(i) the date of declaration of the dividend:
(ii) the place or places to which the coupon or certificate
shall be delivered or produced as the case may be;
(iii) the time within which the coupon or certificate shall be
delivered or produced as the case may be; and
(iv) where appropriate, the distinguishing number of the
relevant coupon.
135. (a) The holder of shares registered in his name may upon delivery
to the Directors of a request in writing and the share certificate or
certificates registered in his name in respect of such shares surrender such
share certificate or certificates and receive in its or their stead as the case
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may be a bearer certificate or certificates in respect of some or all of such
shares as he shall specify in the request and share certificate or certificates
in registered form in respect of the remainder (if any); and the register of
members shall be amended accordingly.
(b) The holder of shares issued to bearer may upon delivery to the
Directors of a request in writing and the bearer certificate or certificates
representing such shares surrender such share certificate or certificates and be
registered as the holder in respect of some or all of such shares as he shall
specify in the request and receive share certificate or certificates in
registered form in respect thereof and bearer certificate or certificates for
the remainder (if any); and the register of members shall be amended
accordingly.
DATED the 9th day of December, 1999.
/s/
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Trident Nominees (Cayman) Ltd
(Corporation)
P.O. Box 847, Grand Cayman
/s/
- -----------------------------------
Witness to the above Signature
I, Ronnie Williams Anglin, Assistant Registrar of Companies in and for the
Cayman Islands DO HEREBY CERTIFY that this is a true and correct copy of the
Articles of Association of this Company duly incorporated on the 10th day of
December, 1999.
/s/
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ASSISTANT REGISTRAR OF COMPANIES
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