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EXHIBIT 1.2
ARTICLES
OF
INN-HOUSE VIDEO LTD.
TABLE OF CONTENTS
PART ARTICLE SUBJECT
1 INTERPRETATION
1.1. Definition
Construction of Words
1.2. Definitions same as Company Act
1.3. Interpretation Act Rules of Construction apply
2 SHARES
2.1 Member entitled to Certificate
2.2 Replacement of Lost or Defaced Certificate
2.3 Execution of Certificates
2.4 Recognition of Trusts
3 ISSUE OF SHARES
3.1. Directors Authorized
3.2. Conditions of Allotment
3.3. Commissions and Brokerage
3.4. Conditions of Issue
4 SHARE REGISTERS
4.1. Registers of Members, Transfers and Allotments
4.2. Branch Registers of Members
5 TRANSFER AND TRANSMISSION OF SHARES
5.1. Transfer of Shares
5.2. Execution of Instrument of Transfer
5.3. Enquiry as to Title not Required
5.4. Submission of Instruments of Transfer
5.5. Transfer Fee
5.6. Personal Representative Recognized on Death
5.7. Death or Bankruptcy
5.8. Persons in Representative Capacity
6 ALTERATION OF CAPITAL
6.1. Increase of Authorized Capital
6.2. Other Capital Alterations
6.3. Creation. Variation and Abrogation of Special Rights and
Restrictions
6.4. Consent of Class Required
6.5. Special Rights of Conversion
6.6. Class Meetings of Members
7 PURCHASE AND REDEMPTION OF SHARES
7.1 Company Authorized to Purchase or Redeem its Shares
7.2 Selection of Shares to be Redeemed
7.3 Purchased or Redeemed Shares Not Voted
8 BORROWING POWERS
8.1 Powers of Directors
8.2 Special Rights Attached to and Negotiability of Debt
Obligations
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8.3 Register of Debentureholders
8.4 Execution of Debt Obligations
8.5 Register of Indebtedness
9 GENERAL MEETINGS
9.1 Annual General Meetings
9.2 Waiver of Annual General Meetings
9.3 Classification of General Meetings
9.4 Calling of Meetings
9.5 Advance Notice for Election of Directors
9.6 Notice of General Meeting
9.7 Waiver of Reduction of Notice
9.8 Notice of Special Business at General Meeting
10 PROCEEDINGS AT GENERAL MEETINGS
10.1 Special Business
10.2 Requirements of Quorum
10.3 Quorum
10.4 Lack of Quorum
10.5 Chairman
10.6 Alternate Chairman
10.7 Adjournments
10.8 Resolutions Need Not Be Seconded
10.9 Decisions by Show of Hands or Poll
10.10 Casting Vote
10.11 Manner of Taking Poll
10.12 Retention of Ballots Cast on a Poll
10.13 Casting of Votes
10.14 Ordinary Resolution Sufficient
11 VOTES OF MEMBERS
11.1 Number of Votes Per Share or Member
11.2 Votes of Persons in Representative Capacity
11.3 Representative of a Corporate Member
11.4 Votes by Joint Holders
11.5 Votes by Committee for a Member
11.6 Appointment of Proxyholders
11.7 Execution of Form of Proxy
11.8 Deposit of Proxy
11.9 Validity of Proxy Note
11.10 Revocation of Proxy
12 DIRECTORS
12.1 Number of Directors
12.2 Remuneration and Expenses of Directors
12.3 Qualification of Directors
13 ELECTION OF DIRECTORS
13.1 Election at Annual General Meetings
13.2 Eligibility of Retiring Director
13.3 Continuance of Directors
13.4 Election of Less than Required Number of Directors
13.5 Filling a Casual Vacancy
13.6 Additional Directors
13.7 Alternate Directors
13.8 Termination of Directorship
13.9 Removal of Directors
14 POWERS OF DUTIES OF DIRECTORS
14.1 Management of Affairs and Business
14.2 Appointment of Attorney
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15 DISCLOSURE OF INTEREST OF DIRECTORS
15.1 Disclosure of Conflicting Interest
15.2 Voting and Quorum re Proposed
15.3 Director May Hold Office or Place of Profit with Company
15.4 Director Acting in Professional Capacity
15.5 Director Receiving Remuneration from Other Interests
16 PROCEEDINGS OF DIRECTORS
16.1 Chairman and Alternate
16.2 Meetings - Procedure
16.3 Meetings by Conference Telephone
16.4 Notice of Meeting
16.5 Waiver of Notice of Meetings
16.6 Quorum
16.7 Continuing Directors may Act During Vacancy
16.8 Validity of Acts of Directors
16.9 Resolution in Writing Effective
17 EXECUTIVE AND OTHER COMMITTEES
17.1 Appointment of Executive Committee
17.2 Appointment of Committee
17.3 Procedure at Meetings
18 OFFICERS
18.1 President and Secretary Required
18.2 Persons Holding More Than One Office and Remuneration
18.3 Disclosure of Conflicting Interest
19 INDEMNITY AND PROTECTION OF DIRECTORS, OFFICERS AND EMPLOYEES
19.1 Indemnification of Directors
19.2 Indemnification of Officers, Employees, Agents
19.3 Indemnification not invalidated by non-compliance
19.4 Company may Purchase Insurance
20 DIVIDENDS AND RESERVES
20.1 Declaration of Dividends
20.2 Declared Dividend Date
20.3 Proportionate to Number of Shares Held
20.4 Reserves
20.5 Receipts from Joint Holders
20.6 No Interest on Dividends
20.7 Payment of Dividends
20.8 Capitalization of Undistributed Surplus
21 DOCUMENTS, RECORDS AND REPORTS
21.1 Documents to be Kept
21.2 Accounts to be Kept
21.3 Inspection of Accounts
21.4 Financial Statements and Reports for General Meeting
21.5 Financial Statements and Reports for Members
22 NOTICES
22.1 Method of Giving Notice
22.2 Notice to Joint Holder
22.3 Notice to Personal Representative
22.4 Persons to Receive Notice
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23 RECORD DATES
23.1 Record Date
23.2 No Closure of Register of Members
24 SEAL
24.1 Affixation of Seal to Documents
24.2 Reproduction of Seal
24.3 Official Seal for Other Jurisdictions
25 MECHANICAL REPRODUCTION OF SIGNATURES
25.1 Instruments may be Mechanically Signed
25.2 Definition of Instruments
26 PROHIBITIONS
26.1 Number of Members and No Securities to be Offered to the
Public
26.2 Restriction on Transfer of Shares
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PROVINCE OF BRITISH COLUMBIA
COMPANY ACT
ARTICLES
OF
INN-HOUSE VIDEO LTD.
PART I
INTERPRETATION
1.1. In these Articles, unless there is something in the subject
or context inconsistent therewith:
"Board" and "the Directors" or "the directors" mean the Directors, sole
Director or alternate Director of the Company for the time being.
"Company Act" means the Company Act of the Province of British Columbia
as from time to time enacted and all amendments thereto and statutory
modifications thereof and includes the regulations made pursuant
thereto.
"seal" means the common seal of the Company.
"month" means calendar month.
"registered owner" or "registered holder" when used with respect to a
share in the authorized capital of the Company means the person
registered in the register of members in respect of such share.
"personal representative" shall include executors, administrators,
trustees in bankruptcy and duly constituted representatives in lunacy.
Expressions referring to writing shall be construed as
including references to printing, lithography, typewriting, photography
and other modes of representing or reproducing words in a visible form.
Words importing the singular include the plural and vice
versa; and words importing male persons include female persons and
words importing persons shall include corporations.
1.2. The meaning of any words or phrases defined in the Company Act shall,
if not inconsistent with the subject or context, bear the same meaning
in these Articles.
1.3. The Rules of Construction contained in the Interpretation Act shall
apply, mutatis mutandis, to the interpretation of these Articles.
PART 2
SHARES AND SHARE CERTIFICATES
2.1. Every member is entitled, without charge, to one certificate
representing the share or shares of each class held by him; 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 the first named of several
joint registered holders or to his duly authorized agent shall be
sufficient delivery to all; and provided further that the Company shall
not be bound to issue certificates representing redeemable shares, if
such shares are to be redeemed within one month of the date on which
they were allotted. Any share certificate may be sent through the mail
by registered prepaid mail to the member entitled thereto, and neither
the Company nor any transfer agent shall be liable for any loss
occasioned to the member owing to any such share certificate so sent
being lost in the mail or stolen.
2.2. If a share certificate
(i) is worn out or defaced, the Directors shall, upon production to
them of the said certificate and upon such other terms, if any, as they
may think fit, order the said certificate to be cancelled and shall
issue a new certificate in lieu thereof:
(ii) is lost, stolen or destroyed, then, upon proof thereof to the
satisfaction of the Directors and upon such indemnity, if any, as the
Directors deem adequate being given, a new share certificate in lieu
thereof shall be issued to the person entitled to such lost, stolen or
destroyed certificate; or
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(iii) represents more than one share and the registered owner thereof
surrenders it to the Company with a written request that the Company
issue in his name two or more certificates each representing a
specified number of shares and in the aggregate representing the same
number of shares as the certificate so surrendered and, upon payment of
an amount determined from time to time by the Directors, the Company
shall cancel the certificate so surrendered and issue in lieu thereof
certificates in accordance with such request.
2.3. Every share certificate shall be signed manually by at least one
officer or Director of the Company, or by or on behalf of a registrar.
branch registrar, transfer agent or branch transfer agent of the
Company and any additional signatures may be printed lithographed,
engraved or otherwise mechanically reproduced in accordance with these
Articles.
2.4. Except as required by law, statute or these Articles, no person shall
be recognized by the Company as holding any share upon any trust, and
the Company shall not be bound by or compelled in any way to recognize
(even when having notice thereof) any equitable, contingent, future or
partial interest in any share or in any fractional part of a share or
(except only as by law, statute or these Articles provided or as
ordered by a court of competent jurisdiction) any other rights in
respect of any share except an absolute right to the entirety thereof
in its registered holder.
PART 3
ISSUE OF SHARES
3.1. Subject to Article 3.2 and to any direction to the contrary contained
in a resolution passed at a general meeting authorizing any increase or
alteration of capital, the shares shall be under the control of the
Directors who may, subject to the rights of the registered holders of
the shares of the Company for the time being issued, issue, allot, sell
or otherwise dispose of, and/or grant options on or otherwise deal in,
shares authorized but not outstanding at such times, to such persons
(including Directors), in such manner, upon such terms and conditions,
and at such price or for such consideration, as they, in their absolute
discretion, may determine.
3.2. If the Company is, or becomes, a company which is not a reporting
company and the Directors are required by the Company Act before
allotting any shares to offer them pro rata to the members, the
Directors shall, before allotting any shares, comply with the
applicable provisions of the Company Act.
3.3. Subject to the provisions of the Company Act, the Company, or the
Directors on behalf of the Company, may pay a commission or allow a
discount to any person in consideration of his subscribing or agreeing
to subscribe, whether absolutely or conditionally, for any shares,
debentures, share rights, war rants or debenture stock in the Company,
or procuring or agreeing to procure subscriptions, whether absolutely
or conditionally, for any such shares, debentures, share rights,
warrants or debenture stock, provided that, if the Company is not a
specially limited company, the rate of the commission and discount
shall not in the aggregate exceed 25 per centum of the amount of the
subscription price of such shares, and if the Company is a specially
limited company, the rate of the commission and discount shall not in
the aggregate exceed 98 per centum of the amount of the subscription
price of such shares, debentures, share rights, warrants or debenture
stock. The Company may also pay such brokerage as may be lawful.
3.4. No share may be issued until it is fully paid and the Company shall
have received the full consideration therefor in cash, property or past
services actually performed for the Company. The value of the property
or services for the purposes of this Article shall be the value
determined by the Directors by resolution to be, in all circumstances
of the transaction, the fair market value thereof.
PART 4
SHARE REGISTERS
4.1. The Company shall keep or cause to be kept a register of members, a
register of transfers and a register of allotments within British
Columbia, all as required by the Company Act, and may combine one or
more of such registers. If the Company's capital shall consist of more
than one class of shares, a separate register of members, register of
transfers and register of allotments may be kept in respect of each
class of shares. The Directors on behalf of the Company may appoint a
trust company to keep the register of
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members, register of transfers and register of allotments or, if there
is more than one class of shares, the Directors may appoint a trust
company, which need not be the same trust company, to keep the register
of members, the register of transfers and the register of allotments
for each class of shares. The Directors on behalf of the Company may
also appoint one or more trust companies, including the trust company
which keeps the said registers of its shares or of a class thereof, as
transfer agent for its shares or such class thereof, as the case may
be, and the same or another trust company or companies as registrar for
its shares or such class thereof, as the case may be. The Directors may
terminate the appointment of any such trust company at any time and may
appoint another trust company in its place.
4.2. Unless prohibited by the Company Act, the Company may keep or cause to
be kept one or more branch registers of members at such place or places
as the Directors may from time to time determine.
PART 5
TRANSFER AND TRANSMISSION OF SHARES
5.1. Subject to the provisions of the Memorandum and of these Articles that
may be applicable, any member may transfer any of his shares by
instrument in writing executed by or on behalf of such member and
delivered to the Company or its transfer agent. The instrument of
transfer of any share of the Company shall be in the form. if any, on
the back of the Company's share certificates or in such other form as
the Directors may from time to time approve. Except to the extent that
the Company Act may otherwise provide, the transferor shall be deemed
to remain the holder of the shares until the name of the transferee is
entered in the register of members or a branch register of members
thereof.
5.2. The signature of the registered holder of any shares, or of his duly
authorized attorney, upon an authorized instrument of transfer shall
constitute a complete and sufficient authority to the Company, its
directors, officers and agents to register, in the name of the
transferee as named in the instrument of transfer, the number of shares
specified therein or, if no number is specified, all the shares of the
registered holder represented by share certificates deposited with the
instrument of transfer. If no transferee is named in the instrument of
transfer, the instrument of transfer shall constitute a complete and
sufficient authority to the Company, its directors, officers and agents
to register, in the name of the person in whose behalf any certificate
for the shares to be transferred is deposited with the Company for the
purpose of having the transfer registered, the number of shares
specified in the instrument of transfer or, if no number is specified.
all the shares represented by all share certificates deposited with the
instrument of transfer.
5.3. Neither the Company nor any Director, officer or agent thereof shall be
bound to inquire into the title of the person named in the form of
transfer as transferee, or, if no person is named therein as
transferee, of the person on whose behalf the certificate is deposited
with the Company for the purpose of having the transfer registered or
be liable to any claim by such registered holder or by any intermediate
holder of the certificate or of any of the shares represented thereby
or any interest therein for registering the transfer, and the transfer,
when registered. shall confer upon the person in whose name the shares
have been registered a valid title to such shares.
5.4. Every instrument of transfer shall be executed by the transferor and
left at the registered office of the Company or at the office of its
transfer agent or registrar for registration together with the share
certificate for the shares to be transferred and such other evidence,
if any, as the Directors or the transfer agent or registrar may require
to prove the title of the transferor or his right to transfer the
shares and the right of the transferee to have the transfer registered.
All instruments of transfer where the transfer is registered shall be
retained by the Company or its transfer agent or registrar and any
instrument of transfer, where the transfer is not registered, shall be
returned to the person depositing the same together with the share
certificate which accompanied the same when tendered for registration.
5.5. There shall be paid to the Company in respect of the registration of
any transfer such sum, if any, as the Directors may from time to time
determine.
5.6. In the case of the death of a member, the survivor or survivors where
the deceased was a joint registered holder, and the legal personal
representative of the deceased where he was the sole holder, shall be
the only persons recognized by the Company as having any title to his
interest in the shares. Before recognizing any legal personal
representative the Directors may require him to obtain a grant of
probate or letters of administration in British Columbia.
5.7. Upon the death or bankruptcy of a member, his personal representative
or trustee in bankruptcy, although not a member, shall have the same
rights, privileges and obligations that attach to the shares formerly
held by the deceased or bankrupt member if the documents required by
the Company Act shall have been deposited at the Company's registered
office.
5.8. Any person becoming entitled to a share in consequence of the death or
bankruptcy of a member shall, upon such documents and evidence being
produced to the Company as The Company Act requires or who becomes
entitled to a share as a result of
<PAGE> 8
an order of a Court of competent jurisdiction or a statute has the
right either to be registered as a member in his representative
capacity in respect of such share, or, if he is a personal
representative, instead of being registered himself, to make such
transfer of the share as the deceased or bankrupt person could have
made; but the Directors shall, as regards a transfer by a personal
representative or trustee in bankruptcy, have the same right, if any,
to decline or suspend registration of a transferee as they would have
in the case of a transfer of a share by the deceased or bankrupt person
before the death or bankruptcy.
PART 6
ALTERATION OF CAPITAL
6.1. The Company may by ordinary resolution filed with the Registrar amend
its Memorandum to increase the authorized capital of the Company by:
(i) creating shares with par value or shares without par value, or
both;
(ii) increasing the number of shares with par value or shares
without par value, or both; or
(iii) increasing the par value of a class of shares with par value, if
no shares of that class are issued.
All new shares shall be subject to the same provisions with reference
to transfers, transmissions and otherwise as the existing shares of the
Company.
6.2. The Company may by special resolution alter its Memorandum to
subdivide, consolidate, change from shares with par value to shares
without par value, or from shares without par value to shares with par
value, or change the designation of, all or any of its shares but only
to such extent, in such manner and with such consents of members
holding a class of shares which is the subject of or affected by such
alteration, as the Company Act provides.
6.3. The Company may alter its Memorandum or these Articles
(i) by special resolution, to create, define and attach special rights
or restrictions to any shares, and
(ii) special resolution and by otherwise complying with any applicable
provision of its Memorandum or these Articles, to vary or abrogate any
special rights and restrictions attached to any shares
and in each case by filing a certified copy of such resolution with the
Registrar but no right or special right attached to any issued shares
shall be prejudiced or interfered with unless all members holding
shares of each class whose right or special right is so prejudiced or
interfered with consent thereto in writing, or unless a resolution
consenting thereto is passed at a separate class meeting of the holders
of the shares of each such class by a majority of three-fourths, or
such greater majority as may be specified by the special rights
attached to the class of shares, of the issued shares of such class.
6.4. Notwithstanding such consent in writing or such resolution, no such
alteration shall be valid as to any part of the issued shares of any
class unless the holders of the rest of the issued shares of such class
either all consent thereto in writing or consent thereto by a
resolution passed by the votes of members holding three-fourths of the
rest of such shares.
6.5. If the Company is or becomes a reporting company, no resolution to
create, vary or abrogate any special right of conversion attaching to
any class of shares shall be submitted to any meeting of members
unless, if so required by the Company Act, the Superintendent of
Brokers shall have consented to the resolution.
6.6. Unless these Articles otherwise provide, the provisions of these
Articles relating to general meetings shall apply, with the necessary
changes and so far as they are applicable, to a class meeting of
members holding a particular class of shares but the quorum at a class
meeting shall be one person holding or representing by proxy one-third
of the shares affected.
PART 7
PURCHASE AND REDEMPTION OF SHARES
7.1. Subject to the special rights and restrictions attached to any class of
shares, the Company may, by a resolution of the Directors and in
compliance with the Company Act, purchase any of its shares at the
price and upon the terms specified in such resolution or redeem any
class of its shares in accordance with the special rights and
restrictions attaching thereto. No such purchase or redemption shall be
made if the Company is insolvent at the time of the proposed purchase
or redemption or if the proposed purchase or redemption would render
the Company insolvent. Unless the shares are to be purchased through a
stock exchange or the Company is purchasing the shares from dissenting
members pursuant to the requirements of the
<PAGE> 9
Company Act, the Company shall make its offer to purchase pro rata to
every member who holds shares of the class or kind as the case may be,
to be purchased.
7.2. If the Company proposes at its option to redeem some but not all of the
shares of any class, the Directors may, subject to the special rights
and restrictions attached to such class of shares, decide the manner in
which the shares to be redeemed shall be selected.
7.3. Subject to the provisions of the Company Act, any shares purchased or
redeemed by the Company may be sold or issued by it, but, while such
shares are held by the Company, it shall not exercise any vote in
respect of these shares.
PART 8
BORROWING POWERS
8.1. The Directors may from time to time on behalf of the Company
(i) borrow money in such manner and amount, on such security, from such
sources and upon such terms and conditions as they think fit,
(ii) issue bonds, debentures, and other debt obligations either
outright or as security for any liability or obligation of the Company
or any other person, and
(iii) mortgage, charge, whether by way of specific or floating charge,
or give other security on the undertaking, or on the whole or any part
of the property and assets, of the Company (both present and future).
8.2. Any bonds, debentures or other debt obligations of the Company may be
issued at a discount, premium or otherwise, and with any special
privileges as to redemption, surrender, drawing, allotment of or
conversion into or exchange for shares or other securities, attending
and voting at general meetings of the Company, appointment of Directors
or otherwise and may by their terms be assignable free from any
equities between the Company and the person to whom they were issued or
any subsequent holder thereof, all as the Directors may determine.
8.3. The Company shall keep or cause to be kept within the Province of
British Columbia in accordance with the Company Act a register of its
debentures and a register of debentureholders, which registers may be
combined, and, subject to the provisions of the Company Act, may keep
or cause to be kept one or more branch registers of its
debentureholders at such place or places as the Directors may from time
to time determine and the Directors tray by resolution, regulation or
otherwise make such provisions as they think fit respecting the keeping
of such branch registers.
8.4. Every bond, debenture or other debt obligation of the Company shall be
signed manually by at least one Director or officer of the Company or
by or on behalf of a trustee, registrar, branch registrar, transfer
agent or branch transfer agent for the bond, debenture or other debt
obligation appointed by the Company or under any instrument under which
the bond, debenture or other debt obligation is issued and any
additional signatures may be printed or otherwise mechanically
reproduced thereon and, in such event, a bond, debenture or other debt
obligation so signed is as valid as if signed manually notwithstanding
that any person whose signature is so printed or mechanically
reproduced shall have ceased to hold the office that he is stated on
such bond, debenture or other debt obligation to hold at the date of
the issue thereof.
8.5. The Company shall keep or cause to be kept a register of its
indebtedness to every Director or officer of the Company or an
associate of any of them in accordance with the provisions of the
Company Act.
PART 9
GENERAL MEETINGS
9.1. Subject to any extensions of time permitted pursuant to the Company
Act, the first annual general meeting of the Company shall be held
within fifteen months from the date of incorporation and thereafter an
annual general meeting shall be held once in every calendar year at
such time (not being more than thirteen months after the holding of the
last preceding annual general meeting) and place as may be determined
by the Directors.
9.2. If the Company is, or becomes, a company which is not a reporting
company and all the members entitled to attend and vote at an annual
general meeting consent in writing to all the business which is
required or desired to be transacted at the meeting, the meeting need
not be held.
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9.3. All general meetings other than annual general meetings are herein
referred to as and may be called extraordinary general meetings.
9.4. The Directors may, whenever they think fit, convene an extraordinary
general meeting. An extraordinary general meeting, if requisitioned in
accordance with the Company Act, shall be convened by the Directors or,
if not convened by the Directors, may be convened by the
requisitionists as provided in the Company Act.
9.5. If the Company is or becomes a reporting company, advance notice of any
general meeting at which Directors are to be elected shall be published
in the manner required by the Company Act.
9.6. A notice convening a general meeting specifying the place, the day, and
the hour of the meeting, and, in case of special business, the general
nature of that business, shall be given as provided in the Company Act
and in the manner hereinafter in these Articles mentioned, or in such
other manner (if any) as may be prescribed by ordinary resolution,
whether previous notice thereof has been given or not, to such persons
as are entitled by law or under these Articles to receive such notice
from the Company. Accidental omission to give notice of a meeting to,
or the non-receipt of notice of a meeting, by any member shall not
invalidate the proceedings at that meeting.
9.7. All the members of the Company entitled to attend and vote at a general
meeting may, by unanimous consent in writing given before, during or
after the meeting, or if they are present at the meeting by a unanimous
vote, waive or reduce the period of notice of such meeting and an entry
in the minute book of such waiver or reduction shall be sufficient
evidence of the due convening of the meeting.
9.8. Except as otherwise provided by the Company Act, where any special
business at a general meeting includes considering, approving,
ratifying, adopting or authorizing any document or the execution
thereof or the giving of effect thereto, the notice convening the
meeting shall, with respect to such document, be sufficient if it
states that a copy of the document or proposed document is or will be
available for inspection by members at the registered office or records
office of the Company or at some other place in British Columbia
designated in the notice during usual business hours up to the date of
such general meeting.
PART 10
PROCEEDINGS AT GENERAL MEETINGS
10.1. All business shall be deemed special business which is transacted at
(i) an extraordinary general meeting other than the conduct of and
voting at, such meeting; and
(ii) an annual general meeting, with the exception of the conduct of,
and voting at, such meeting, the consideration of the financial
statement and of the respective reports of the Directors and Auditor,
fixing or changing the number of directors, approval of a motion to
elect two or more directors by a single resolution, the election of
Directors, the appointment of the Auditor, the fixing of the
remuneration of the Auditor and such other business as by these
Articles of the Company Act may be transacted at a general meeting
without prior notice thereof being given to the members or any business
which is brought under consideration by the report of the Directors.
10.2. No business, other than election of the chairman or the adjournment of
the meeting, shall be transacted at any general meeting unless a quorum
of members, entitled to attend and vote, is present at the commencement
of the meeting, but the quorum need not be present throughout the
meeting.
10.3. Save as herein otherwise provided, a quorum shall be two members or
proxyholders representing two members, or one member and a proxyholder
representing another member. The Directors, the Secretary or, in his
absence, an Assistant Secretary, and the solicitor of the Company shall
be entitled to attend at any general meeting but no such person shall
be counted in the quorum or be entitled to vote at any general meeting
unless he shall be a member or proxyholder entitled to vote thereat.
10.4. If within half an hour from the time appointed for a general meeting a
quorum is not present, the meeting, if convened upon the requisition of
members, shall be dissolved. In any other case it shall stand adjourned
to the same day in the next week, at the same time and place, and, if
at the adjourned meeting a quorum is not present within half an hour
from the time appointed for the meeting, the person or persons present
and being, or representing by proxy, a member or members entitled to
attend and vote at the meeting shall be a quorum.
<PAGE> 11
10.5. The Chairman of the Board, if any, or in his absence the President of
the Company or in his absence a Vice-President of the Company, if any,
shall be entitled to preside as chairman at every general meeting of
the Company.
10.6. If at any general meeting neither the Chairman of the Board nor
President nor a Vice President is present within fifteen minutes after
the time appointed for holding the meeting or is willing to act as
chairman, the Directors present shall choose some one of their number
to be chairman or if all the Directors present decline to take the
chair or shall fail to so choose or if no Director be present, the
members present shall choose some other person in attendance, who need
not be a member, to be chairman.
10.7. The chairman may 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 meeting is adjourned for thirty days or more, notice, but not
advance 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 adjourned meeting or of the business to be
transacted at an adjourned meeting.
10.8. No motion proposed at a general meeting need be seconded and the
chairman may propose or second a motion.
10.9. Subject to the provisions of the Company Act, at any general meeting a
resolution put to the vote of the meeting shall be decided on a show of
hands, unless (before or on the declaration of the result of the show
of hands) a poll is directed by the chairman or demanded by at least
one member entitled to vote who is present in person or by proxy. The
chairman shall declare to the meeting the decision on every question in
accordance with the result of the show of hands or the poll, and such
decision shall be entered in the book of proceedings of the Company. A
declaration by the chairman that a resolution has been carried, or
carried unanimously, or by a particular majority, or lost or not
carried by a particular majority and an entry to that effect in the
book of the proceedings of the Company shall be conclusive evidence of
the fact, without proof of the number or proportion of the votes
recorded in favour of, or against, that resolution.
10.10. In the case of an equality of votes, whether on a show of hands or on a
poll, the chairman of the meeting at which the show of hands takes
place or at which the poll is demanded shall be entitled to a casting
vote in addition to the vote or votes to which he may be entitled as a
member or proxyholder and this provision shall apply notwithstanding
the Chairman is interested in the subject matter of the resolution.
10.11. No poll may be demanded on the election of a chairman. A poll demanded
on a question of adjournment shall be taken forthwith. A poll demanded
on any other question shall be taken as soon as, in the opinion of the
chairman, is reasonably convenient, but in no event later than seven
days after the meeting and at such time and place and in such manner as
the chairman of the meeting directs. The result of the poll shall be
deemed to be the resolution of and passed at the meeting upon which the
poll was demanded. Any business other than that upon which the poll has
been demanded may be proceeded with pending the taking of the poll. A
demand for a poll may be withdrawn. In any dispute as to the admission
or rejection of a vote the decision of the chairman made in good faith
shall be final and conclusive.
10.12. Every ballot cast upon a poll and every proxy appointing a proxyholder
who casts a ballot upon a poll shall be retained by the Secretary for
such period and be subject to such inspection as the Company Act may
provide.
10.13. On a poll a person entitled to cast more than one vote need not, if he
votes, use all his votes or cast all the votes he uses in the same way.
10.14.1. Unless the Company Act, the Memorandum or these Articles otherwise
provide, any action to be taken by a resolution of the members may be
taken by an ordinary resolution.
PART 11
VOTES OF MEMBERS
11.1. Subject to any special voting rights or restrictions attached to any
class of shares and the restrictions on joint registered holders of
shares, on a show of hands every member who is present in person and
entitled to vote thereat shall have one vote and on a poll every member
shall have one vote for each share of which he is the registered holder
and may exercise such vote either in person or by proxyholder.
<PAGE> 12
11.2. Any person who is not registered as a member but is entitled to vote at
any general meeting in respect of a share, may vote the share in the
same manner as if he were a member; but, unless the Directors have
previously admitted his right to vote at that meeting in respect of the
share, he shall satisfy the Directors of his right to vote the share
before the time for holding the meeting, or adjourned meeting, as the
case may be, at which he proposes to vote.
11.3. Any corporation not being a subsidiary which is a member of the Company
may by resolution of its directors or other governing body authorize
such person as it thinks fit to act as its representative at any
general meeting or class meeting. The person so authorized shall be
entitled to exercise in respect of and at such meeting the same powers
on behalf of the corporation which he represents as that corporation
could exercise if it were an individual member of the Company
personally present, including, without limitation, the right, unless
restricted by such resolution, to appoint a proxyholder to represent
such corporation, and shall be counted for the purpose of forming a
quorum if present at the meeting. Evidence of the appointment of any
such representative may be sent to the Company by written instrument,
telegram, telex or any method of transmitting legibly recorded
messages. Notwithstanding the foregoing, a corporation being a member
may appoint a proxyholder.
11.4. In the case of joint registered holders of a share the vote of the
senior who exercises a vote, whether in person or by proxyholder, shall
be accepted to the exclusion of the votes of the other joint registered
holders; and for this purpose seniority shall be determined by the
order in which the names stand in the register of members. Several
legal personal representatives of a deceased member whose shares are
registered in his sole name shall for the purpose of this Article be
deemed joint registered holders.
11.5. A member of unsound mind entitled to attend and vote, in respect of
whom an order has been made by any court having jurisdiction, may vote,
whether on a show of hands or on a poll, by his committee, curator
bonis, or other person in the nature of a committee or curator bonis
appointed by that court, and any such committee, curator bonis, or
other person may appoint a proxyholder.
11.6. A member holding more than one share in respect of which he is entitled
to vote shall be entitled to appoint one or more (but not more than
five) proxyholders to attend, act and vote for him on the same
occasion. If such member should appoint more than one proxyholder for
the same occasion he shall specify the number of shares each
proxyholder shall be entitled to vote. A member may also appoint one or
more alternate proxyholders to act in the place and stead of an absent
proxyholder.
11.7. A form of proxy shall be in writing under the hand of the appointor or
of his attorney duly authorized in writing, or, if the appointor is a
corporation, either under the seal of the corporation or under the hand
of a duly authorized officer or attorney. A proxyholder need not be a
member of the Company.
11.8. A form of proxy and the power of attorney or other authority, if any,
under which it is signed or a notarially certified copy thereof 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, not less than 48 hours (excluding Saturdays, Sundays and
holidays) before the time for holding the meeting or such other time
and place as is specified in the notice calling the meeting. In
addition to any other method of depositing proxies provided for in
these Articles, the Directors may from time to time by resolution make
regulations relating to the depositing of proxies at any place or
places and fixing the time or times for depositing the proxies not
exceeding 48 hours (excluding Saturdays, Sundays and holidays)
preceding the meeting or adjourned meeting specified in the notice
calling a meeting of members and providing for particulars of such
proxies to be sent to the Company or any agent of the Company in
writing or by letter, telegram, telex or any method of transmitting
legibly recorded messages so as to arrive before the commencement of
the meeting or adjourned meeting at the office of the Company or of any
agent of the Company appointed for the purpose of receiving such
particulars and providing that proxies so deposited as required by this
Part and votes given in accordance with such regulations shall be valid
and shall be counted.
11.9. A vote given in accordance with the terms of a proxy is valid
notwithstanding the previous death or incapacity of the member giving
the proxy or the revocation of the proxy or of the authority under
which the form of proxy was executed or the transfer of the share in
respect of which the proxy is given, provided that no notification in
writing of such death, incapacity, revocation or transfer shall have
been received at the registered office of the Company or by the
chairman of the meeting or adjourned meeting for which the proxy was
given before the vote is taken.
11.10. Every proxy may be revoked by an instrument in writing
(i) executed by the member giving the same or by his attorney
authorized in writing or, where the member is a corporation, by a duly
authorized officer or attorney of the corporation; and
<PAGE> 13
(ii) delivered either at the registered office of the Company at any
time up to and including the last business day preceding the day of the
meeting, or any adjournment thereof at which the proxy is to be used,
or to the chairman of the meeting on the day of the meeting or any
adjournment thereof before any vote in respect of which the proxy is to
be used shall have been taken.
or in any other manner provided by law.
PART 12
DIRECTORS
12.1. The subscribers to the Memorandum of the Company are the first
Directors. The Directors to succeed the first Directors may be
appointed in writing by a majority of the subscribers to the Memorandum
or at a meeting of the subscribers, or if not so appointed, they shall
be elected by the members entitled to vote on the election of Directors
and the number of Directors shall be the same as the number of
Directors so appointed or elected. The number of directors, excluding
additional Directors, may be fixed or changed from time to time by
ordinary resolution, whether previous notice thereof has been given or
not, but notwithstanding anything contained in these Articles the
number of Directors shall never be less than one or, if the Company is
or becomes a reporting company, less than three.
12.2. The remuneration of the Directors as such may from time to time be
determined by the Directors or, if the Directors shall so decide, by
the members. Such remuneration may be in addition to any salary or
other remuneration paid to any officer or employee of the Company as
such who is also a Director. The Directors shall be repaid such
reasonable travelling, hotel and other expenses as they incur in and
about the business of the Company and if any Director shall perform any
professional or other services for the Company that in the opinion of
the Directors are outside the ordinary duties of a Director or shall
otherwise be specially occupied in or about the Company's business, he
may be paid a remuneration to be fixed by the Board, or, at the option
of such Director, by the Company in general meeting, and such
remuneration may be either in addition to, or in substitution for any
other remuneration that he may be entitled to receive. The Directors on
behalf of the Company, unless otherwise determined by ordinary
resolution, may pay a gratuity or pension or allowance on retirement to
any Director who has held any salaried office or place of profit with
the Company or to his spouse or dependants and may make contributions
to any fund and pay premiums for the purchase or provision of any such
gratuity, pension or allowance.
12.3.1. A Director shall not be required to hold a share in the capital of the
Company as qualification for his office but shall be qualified as
required by the Company Act, to become or act as a Director.
PART 13
ELECTION AND REMOVAL OF DIRECTORS
13.1. At each annual general meeting of the Company all the Directors shall
retire and the members shall elect a Board of Directors consisting of
the number of Directors for the time being fixed pursuant to these
Articles. If the Company is, or becomes, a company that is not a
reporting company and the business to be transacted at any annual
general meeting is consented to in writing by all the members who are
entitled to attend and vote thereat such annual general meeting shall
be deemed for the purpose of this Part to have been held on such
written consent becoming effective.
13.2. A retiring Director shall be eligible for re-election.
13.3. Where the Company fails to hold an annual general meeting in accordance
with the Company Act, the Directors then in office shall be deemed to
have been elected or appointed as Directors on the last day on which
the annual general meeting could have been held pursuant to these
Articles and they may hold office until other Directors are appointed
or elected or until the day on which the next annual general meeting is
held.
13.4. If at any general meeting at which there should be an election of
Directors, the places of any of the retiring Directors are not filled
by such election, such of the retiring Directors who are not re-elected
as may be requested by the newly-elected Directors shall, if willing to
do so, continue in office to complete the number of Directors for the
time being fixed pursuant to these Articles until further new Directors
are elected at a general meeting convened for the purpose. If any such
election or continuance of Directors does not result in the election or
continuance of the number of Directors for the time being fixed
pursuant to these Articles such number shall be fixed at the number of
Directors actually elected or continued in office.
13.5. Any casual vacancy occurring in the Board of Directors may be filled by
the remaining Directors or Director.
<PAGE> 14
13.6. Between successive annual general meetings the Directors shall have
power to appoint one or more additional Directors but not more than
one-third of the number of Directors fixed pursuant to these Articles
and in effect at the last general meeting at which Directors were
elected. Any Director so appointed shall hold office only until the
next following annual general meeting of the Company, but shall be
eligible for election at such meeting and so long as he is an
additional Director the number of Directors shall be increased
accordingly.
13.7. Any Director may by instrument in writing delivered to the Company
appoint any person to be his alternate to act in his place at meetings
of the Directors at which he is not present unless the Directors shall
have reasonably disapproved the appointment of such person as an
alternate Director and shall have given notice to that effect to the
Director appointing the alternate Director within a reasonable time
after delivery of such instrument to the Company. Every such alternate
shall be entitled to notice of meetings of the Directors and to attend
and vote as a Director at a meeting at which the person appointing him
is not personally present, and, if he is a Director, to have a separate
vote on behalf of the Director he is representing in addition to his
own vote. A Director may at any time by instrument, telegram, telex or
any method of transmitting legibly recorded messages delivered to the
Company revoke the appointment of an alternate appointed by him. The
remuneration payable to such an alternate shall be payable out of the
remuneration of the Director appointing him.
13.8. The office of Director shall be vacated if the Director:
(i) resigns his office by notice in writing delivered to the registered
office of the Company; or
(ii) is convicted of an indictable offence and the other Directors
shall have resolved to remove him; or
(iii) ceases to be qualified to act as a Director pursuant to the
Company Act.
13.9. The Company may by special resolution remove any Director before the
expiration of his period of office, and may by an ordinary resolution
appoint another person in his stead.
PART 14
POWERS AND DUTIES OF DIRECTORS
14.1. The Directors shall manage, or supervise the management of, the affairs
and business of the Company and shall have the authority to exercise
all such powers of the Company as are not, by the Company Act or by the
Memorandum or these Articles, required to be exercised by the Company
in general meeting.
14.2. The Directors may from time to time by power of attorney or other
instrument under the seal. appoint any person to be the attorney of the
Company for such purposes, and with such powers, authorities and
discretions (not exceeding those vested in or exercisable by the
Directors under these Articles and excepting the powers of the
Directors relating to the constitution of the Board and of any of its
committees and the appointment or removal of officers and the power to
declare dividends) and for such period, with such remuneration and
subject to such conditions as the Directors may think fit, and any such
appointment may be made in favour of any of the Directors or any of the
members of the Company or in favour of any corporation, or of any of
the members, directors, nominees or managers of any corporation, firm
or joint venture and any such power of attorney may contain such
provisions for the protection or convenience of persons dealing with
such attorney as the Directors think fit. Any such attorney may be
authorized by the Directors to sub-delegate all or any of the powers,
authorities and discretions for the time being vested in him.
PART 15
DISCLOSURE OF INTEREST OF DIRECTORS
15.1. A Director who is, in any way, directly or indirectly interested in an
existing or proposed contract or transaction with the Company or who
holds any office or possesses any property whereby, directly or
indirectly, a duty or interest might be created to conflict with his
duty or interest as a Director shall declare the nature and extent of
his interest in such contract or transaction or of the conflict or
potential conflict with his duty and interest as a Director, as the
case may be, in accordance with the provisions of the Company Act.
<PAGE> 15
15.2. A Director shall not vote in respect of any such contract or
transaction with the Company in which he is interested and if he shall
do so his vote shall not be counted, but he shall be counted in the
quorum present at the meeting at which such vote is taken. Subject to
the provisions of the Company Act, the foregoing prohibitions shall not
apply to
(i) any such contract or transaction relating to a loan to the Company,
which a Director or a specified corporation or a specified firm in
which he has an interest has guaranteed or joined in guaranteeing the
repayment of the loan or any part of the loan;
(ii) any contract or transaction made or to be made with, or for the
benefit of a holding corporation or a subsidiary corporation of which a
Director is a director;
(iii) any contract by a Director to subscribe for or underwrite shares
or debentures to be issued by the Company or a subsidiary of the
Company, or any contract, arrangement or transaction in which a
Director is, directly or indirectly, interested if all the other
Directors are also, directly or indirectly interested in the contract,
arrangement or transaction;
(iv) determining the remuneration of the Directors;
(v) purchasing and maintaining insurance to cover Directors against
liability incurred by them as Directors; or
(vi) the indemnification of any Director by the Company.
These exceptions may from time to time be suspended or amended to any
extent approved by the Company in general meeting and permitted by the
Company Act, either generally or in respect of any particular contract
or transaction or for any particular period.
15.3. A Director may hold any office or place of profit with the Company
(other than the office of auditor of the Company) in conjunction with
his office of Director for such period and on such terms (as to
remuneration or otherwise) as the Directors may determine and no
Director or intended Director shall be disqualified by his office from
contracting with the Company either with regard to this tenure of any
such other office or place of profit or as vendor, purchaser or
otherwise, and, subject to compliance with the provisions of the
Company Act, no contract or transaction entered into by or on behalf of
the Company in which a Director is in any way interested shall be
liable to be voided by reason thereof.
15.4. Subject to compliance with the provisions of the Company Act, a
Director or his firm may act in a professional capacity for the Company
(except as auditor of the Company) and he or his firm shall be entitled
to remuneration for professional services as if he were not a Director.
15.5. A Director may be or become a director or other officer or employee of,
or otherwise interested in, any corporation or firm in which the
Company may be interested as a shareholder or otherwise, and, subject
to compliance with the provisions of the Company Act, such Director
shall not be accountable to the Company for any remuneration or other
benefits received by him as director, officer or employee of, or from
his interest in, such other corporation or firm, unless the Company in
general meeting otherwise directs.
PART 16
PROCEEDINGS OF DIRECTORS
16.1. The Chairman of the Board, if any, or in his absence, the President
shall preside as chairman at every meeting of the Directors, or if
there is no Chairman of the Board or neither the Chairman of the Board
nor the President is present within fifteen minutes of the time
appointed for holding the meeting or is willing to act as chairman, or,
if the Chairman of the Board, if any, and the President have advised
the Secretary that they will not be present at the meeting, the
Directors present shall choose one of their number to be chairman of
the meeting.
16.2. The Directors may meet together for the dispatch of business, adjourn
and otherwise regulate their meetings, as they think fit. Questions
arising at any meeting shall be decided by a majority of votes. In case
of an equality of votes the chairman shall not have a second or casting
vote. Meetings of the Board held at regular intervals may be held at
such place, at such time and upon such notice (if any) as the Board may
by resolution from time to time determine.
16.3. A Director may participate in a meeting of the Board or of any
committee of the Directors by means of conference telephones or other
communications facilities by means of which all Directors participating
in the meeting can hear each other and
<PAGE> 16
provided that all such Directors agree to such participation. A
Director participating in a meeting in accordance with this Article
shall be deemed to be present at the meeting and to have so agreed and
shall be counted in the quorum therefor and be entitled to speak and
vote thereat.
16.4. A Director may, and the Secretary or an Assistant Secretary upon
request of a Director shall call a meeting of the Board at any time.
Reasonable notice of such meeting specifying the place, day and hour of
such meeting shall be given by mail, postage prepaid, addressed to each
of the Directors and alternate Directors at his address as it appears
on the books of the Company or by leaving it at his usual business or
residential address or by telephone, telegram, telex, or any method of
transmitting legibly recorded messages. It shall not be necessary to
give notice of a meeting of Directors to any Director or alternate
Director (i) who is at the time not in the Province of British Columbia
or (ii) if such meeting is to be held immediately following a general
meeting at which such Director shall have been elected or is the
meeting of Directors at which such Director is appointed.
16.5. Any Director of the Company may file with the Secretary a document
executed by him waiving notice of any past, present or future meeting
or meetings of the Directors being, or required to have been, sent to
him and may at any time withdraw such waiver with respect to meetings
held thereafter. After filing such waiver with respect to future
meetings and until such waiver is withdrawn no notice need be given to
such Director and, unless the Director otherwise requires in writing to
the Secretary, to his alternate Director of any meeting of Directors
and all meetings of the Directors so held shall be deemed not to be
improperly called or constituted by reason of notice not having been
given to such Director or alternate Director.
16.6. The quorum necessary for the transaction of the business of the
Directors may be fixed by the Directors and if not so fixed shall be a
majority of the Directors or, if the number of Directors is fixed at
one, shall be one Director.
16.7. 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 pursuant to these Articles as the necessary quorum of Directors,
the continuing Directors 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.
16.8. Subject to the provisions of the Company Act, all acts done by any
meeting of the Directors or of a committee of Directors, or by any
person acting as a Director, shall, notwithstanding that it be
afterwards discovered that there was some defect in the qualification,
election or appointment of any such Directors or of the members of such
committee or person acting as aforesaid, or that they or any of them
were disqualified, be as valid as if every such person had been duly
elected or appointed and was qualified to be a Director.
16.9. A resolution consented to in writing, whether by document, telegram,
telex or any method of transmitting legibly recorded messages or other
means, by all of the Directors or their alternates shall be as valid
and effectual as if it had been passed at a meeting of the Directors
duly called and held. Such resolution may be in two or more
counterparts which together shall be deemed to constitute one
resolution in writing. Such resolution shall be filed with the minutes
of the proceedings of the Directors and shall be effective on the date
stated thereon or on the latest date stated on any counterpart.
PART 17
EXECUTIVE AND OTHER COMMITTEES
17.1. The Directors may by resolution appoint an Executive Committee to
consist of such member or members of their body as they think fit,
which Committee shall have, and may exercise during the intervals
between the meetings of the Board, all the powers vested in the Board
except the power to fill vacancies in the Board, the power to change
the membership of, or fill vacancies in, said Committee or any other
committee of the Board and such other powers, if any, as may be
specified in the resolution. The said Committee shall keep regular
minutes of its transactions and shall cause them to be recorded in
books kept for that purpose, and shall report the same to the Board of
Directors at such times as the Board of Directors may from time to time
require. The Board shall have the power at any time to revoke or
override the authority given to or acts done by the Executive Committee
except as to acts done before such revocation or overriding and to
terminate the appointment or change the membership of such Committee
and to fill vacancies in it. The Executive Committee may make rules for
the conduct of its business and may appoint such assistants as it may
deem necessary. A majority of the members of said Committee shall
constitute a quorum thereof.
17.2. The Directors may by resolution appoint one or more committees
consisting of such member or members of their body as they think fit
and may delegate to any such committee between meetings of the Board
such powers of the Board (except the power to fill vacancies in the
Board and the power to change the membership of or fill vacancies in
any committee of the
<PAGE> 17
Board and the power to appoint or remove officers appointed by the
Board) subject to such conditions as may be prescribed in such
resolution. and all committees so appointed shall keep regular minutes
of their transactions and shall cause them to be recorded in books kept
for that purpose, and shall report the same to the Board of Directors
at such times as the Board of Directors may from time to time require.
The Directors shall also have power at any time to revoke or override
any authority given to or acts to be done by any such committees except
as to acts done before such revocation or overriding and to terminate
the appointment or change the membership of a committee and to fill
vacancies in it. Committees may make rules for the conduct of their
business and may appoint such assistants as they may deem necessary. A
majority of the members of a committee shall constitute a quorum
thereof.
17.3. The Executive Committee and any other 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 of the committee present. and in
case of an equality of votes the chairman shall not have a second or
casting vote. A resolution approved in writing by all the members of
the Executive Committee or any other committee shall be as valid and
effective as if it had been passed at a meeting of such Committee duly
called and constituted. Such resolution may be in two or more
counterparts which together shall be deemed to constitute one
resolution in writing. Such resolution shall be filed with the minutes
of the proceedings of the committee and shall be effective on the date
stated thereon or on the latest date stated in any counterpart.
PART 18
OFFICERS
18.1. The Directors shall, from time to time, appoint a President and a
Secretary and such other officers, if any, as the Directors shall
determine and the Directors may, at any time, terminate any such
appointment. No officer shall be appointed unless he is qualified in
accordance with the provisions of the Company Act.
18.2. One person may hold more than one of such offices except that the
offices of President and Secretary must be held by different persons
unless the Company has only one member. Any person appointed as the
Chairman of the Board, the President or the Managing Director shall be
a Director. The other officers need not be Directors. The remuneration
of the officers of the Company as such and their terms and conditions
of their tenure of office or employment shall from time to time be
determined by the Directors: such remuneration may be by way of salary,
fees, wages, commission or participation in profits or any other means
or all of these modes and an officer may in addition to such
remuneration be entitled to receive after he ceases to hold such office
or leaves the employment of the Company a pension or gratuity. The
Directors may decide what functions and duties each officer shall
perform and may entrust to and confer upon him any of the powers
exercisable by them upon such terms and conditions and with such
restrictions as they think fit and may from time to time revoke,
withdraw, alter or vary all or any of such functions, duties and
powers. The Secretary shall, inter alia, perform the functions of the
Secretary specified in the Company Act.
18.3. Every officer of the Company who holds any office or possesses any
property whereby, whether directly or indirectly, duties or interests
might be created in conflict with his duties or interests as an officer
of the Company shall, in writing, disclose to the President the fact
and the nature, character and extent of the conflict.
PART 19
INDEMNITY AND PROTECTION OF DIRECTORS, OFFICERS AND EMPLOYEES
19.1. Subject to the provisions of the Company Act, the Directors shall cause
the Company to indemnify a Director or former Director of the Company
and the Directors may cause the Company to indemnify a director or
former director of a corporation of which the Company is or was a
shareholder and the heirs and personal representatives of any such
person against all costs, charges and expenses, including an amount
paid to settle an action or satisfy a judgment, actually and reasonably
incurred by him or them including an amount paid to settle an action or
satisfy a judgment in a civil, criminal or administrative action or
proceeding to which he is or they are made a party by reason of his
being or having been a Director of the Company or a director of such
corporation, including any action brought by the Company or any such
corporation. Each Director of the Company on being elected or appointed
shall be deemed to have contracted with the Company on the terms of the
foregoing indemnity.
19.2. Subject to the provisions of the Company Act, the Directors may cause
the Company to indemnify any officer, employee or agent of the Company
or of a corporation of which the Company is or was a shareholder
(notwithstanding that he is also a Director) and his heirs and personal
representatives against all costs, charges and expenses whatsoever
incurred by him or them and resulting from his acting as an officer,
employee or agent of the Company or such corporation. In addition, the
Company shall indemnify the Secretary or an Assistant Secretary of the
Company (if he shall not be a full time employee of
<PAGE> 18
the Company and notwithstanding that he is also a Director) and his
respective heirs and legal representatives against all costs, charges
and expenses whatsoever incurred by him or them and arising out of the
functions assigned to the Secretary by the Company Act or these
Articles and each such Secretary and Assistant Secretary shall on being
appointed be deemed to have contracted with the Company on the terms of
the foregoing indemnity.
19.3. The failure of a Director or officer of the Company to comply with the
provisions of the Company Act or of the Memorandum or these Articles
shall not invalidate any indemnity to which he is entitled under this
Part.
19.4. The Directors may cause the Company to purchase and maintain insurance
for the benefit of any person who is or was serving as a Director,
officer, employee or agent of the Company or as a director, officer,
employee or agent or any corporation of which the Company is or was a
shareholder and his heirs or personal representatives against any
liability incurred by him as such Director, director, officer, employee
or agent.
PART 20
DIVIDENDS AND RESERVE
20.1. The Directors may from time to time declare and authorize payment of
such dividends. if any, as they may deem advisable and need not give
notice of such declaration to any member. No dividend shall be paid
otherwise than out of funds and/or assets properly available for the
payment of dividends and a declaration by the Directors as to the
amount of such funds or assets available for dividends shall be
conclusive. The Company may pay any such dividend wholly or in part by
the distribution of specific assets and in particular by paid up
shares, bonds, debentures or other securities of the Company or any
other corporation or in any one or more such ways as may be authorized
by the Company or the Directors and where any difficulty arises with
regard to such a distribution the Directors may settle the same as they
think expedient, and in particular may fix the value for distribution
of such specific assets or any part thereof, and may determine that
cash payments in substitution for all or any part of the specific
assets to which any members are entitled shall be made to any members
on the basis of the value so fixed in order to adjust the rights of all
parties and may vest any such specific assets in trustees for the
persons entitled to the dividend as may seem expedient to the
Directors.
20.2. Any dividend declared on shares of any class by the Directors may be
made payable on such date as is fixed by the Directors.
20.3. Subject to the rights of members (if any) holding shares with special
rights as to dividends, all dividends on shares of any class shall be
declared and paid according to the number of such shares held.
20.4. The Directors may, before declaring any, dividend, set aside out of the
funds properly available for the payment of dividends such sums as they
think proper as a reserve or reserves, which shall, at the discretion
of the Directors, be applicable for meeting contingencies, or for
equalizing dividends, or for any other purpose to which such funds of
the Company may be properly applied, and pending such application may,
at the like discretion, either be employed in the business of the
Company or be invested in such investments as the Directors may from
time to time think fit. The Directors may also, without placing the
same in reserve, carry forward such funds, which they think prudent not
to divide.
20.5. If several persons are registered as joint holders of any share, any
one of them may give an effective receipt for any dividend, bonuses or
other moneys payable in respect of the share.
20.6. No dividend shall bear interest against the Company. Where the dividend
to which a member is entitled includes a fraction of a cent, such
fraction wall be disregarded in making payment thereof and such payment
shall be deemed to be payment in full.
20.7. Any dividend, bonuses or other moneys 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 registered address of that one of the joint holders who
is first named on the register, or to such person and to such address
as the holder or joint holders may direct in writing. Every such cheque
or warrant shall be made payable to the order of the person to whom it
is sent. The mailing of such cheque or warrant shall, to the extent of
the sum represented thereby (plus the amount of any tax required by law
to be deducted) discharge all liability for the dividend, unless such
cheque or warrant shall not be paid on presentation or the amount of
tax so deducted shall not be paid to the appropriate taxing authority.
20.8. Notwithstanding anything contained in these Articles the Directors may
from time to time capitalize any undistributed surplus on hand of the
Company and may from time to time issue as fully paid and
non-assessable any unissued shares, or any bonds, debentures or debt
obligations of the Company as a dividend representing such
undistributed surplus on hand or any part thereof.
<PAGE> 19
PART 21
DOCUMENTS, RECORDS AND REPORTS
21.1. The Company shall keep at its records office or at such other place as
the Company Act may permit, the documents, copies, registers, minutes,
and records which the Company is required by the Company Act to keep at
its records office or such other place, as the case may be.
21.2. The Company shall cause to be kept proper books of account and
accounting records in respect of all financial and other transactions
of the Company in order properly to record the financial affairs and
condition of the Company and to comply with the Company Act.
21.3. Unless the Directors determine otherwise, or unless otherwise
determined by an ordinary resolution, no member of the Company shall be
entitled to inspect the accounting records of the Company.
21.4. The Directors shall from time to time at the expense of the Company
cause to be prepared and laid before the Company in general meeting
such financial statements and reports as are required by the Company
Act.
21.5. Every member shall be entitled to be furnished once gratis on demand
with a copy of the latest annual financial statement of the Company
and, if so required by the Company Act, a copy of each such annual
financial statement and interim financial statement shall be mailed to
each member.
PART 22
NOTICES
22.1. A notice, statement or report may be given or delivered by the Company
to any member either by delivery to him personally or by sending it by
mail to him to his address as recorded in the register of members.
Where a notice, statement or report is sent by mail, service or
delivery of the notice, statement or report shall be deemed to be
effected by properly addressing, prepaying and mailing the notice,
statement or report and to have been given on the day, Saturdays,
Sundays and holidays excepted, following the date of mailing. A
certificate signed by the Secretary or other officer of the Company or
of any other corporation acting in that behalf for the Company that the
letter, envelope or wrapper containing the notice, statement or report
was so addressed, prepaid and mailed shall be conclusive evidence
thereof.
22.2. A notice, statement or report may be given or delivered by the Company
to the joint holders of a share by giving the notice to the joint
holder first named in the register of members in respect of the share.
22.3. A notice, statement or report may be given or delivered by the Company
to the persons entitled to a share in consequence of the death,
bankruptcy or incapacity of a member by sending it through the mail
prepaid addressed to them by name or by the title of representatives of
the deceased or incapacitated person or trustee of the bankrupt, or by
any like description, at the address (if any) supplied to the Company
for the purpose by the persons claiming to be so entitled, or (until
such address has been so supplied) by giving the notice in manner in
which the same might have been given if the death, bankruptcy or
incapacity had not occurred.
22.4. Notice of every general meeting or meeting of members holding a class
of shares shall be given in a manner hereinbefore authorized to every
member holding at the time of the issue of the notice or the date fixed
for determining the members entitled to such notice, whichever is the
earlier, shares which confer the right to notice of and to attend and
vote at any such meeting. No other person except the auditor of the
Company and the Directors of the Company shall be entitled to receive
notices of any such meeting.
PART 23
RECORD DATES
23.1. The Directors may fix in advance a date, which shall not be more than
the maximum number of days permitted by the Company Act preceding the
date of any meeting of members or any class thereof or of the payment
of any dividend or of the proposed taking of any other proper action
requiring the determination of members as the record date for the
determination of the members entitled to notice of, or to attend and
vote at, any such meeting and any adjournment thereof, or entitled to
<PAGE> 20
receive payment of any such dividend or for any other proper purpose
and, in such case, notwithstanding anything elsewhere contained in
these Articles, only members of record on the date so fixed shall be
deemed to be members for the purposes aforesaid.
23.2. Where no record date is so fixed for the determination of members as
provided in the preceding Article the date on which the notice is
mailed or on which the resolution declaring the dividend is adopted, as
the case may be, shall be the record date for such determination.
PART 24
SEAL
24.1. The Directors may provide a seal for the Company and, if they do so,
shall provide for the safe custody of the seal which shall not be
affixed to any instrument except in the presence of the following
persons, namely,
(i) any two Directors, or
(ii ) one of the Chairman of the Board, the President, the Managing
Director, a Director and a Vice President together with one of the
Secretary, the Treasurer, the Secretary-Treasurer, an Assistant
Secretary, an Assistant Treasurer and an Assistant Secretary-
Treasurer, or
(iii) if the Company shall have only one member, the President or the
Secretary, or
(iv) such person or persons as the Directors may from time to time by
resolution appoint
and the said Directors, officers, person or persons in whose presence
the seal is so affixed to an instrument shall sign such instrument. For
the purpose of certifying under seal true copies of any document or
resolution the seal may be affixed in the presence of any one of the
foregoing persons.
24.2. To enable the seal of the Company to be affixed to any bonds,
debentures, share certificates, or other securities of the Company.
whether in definitive or interim form, on which facsimiles of any of
the signatures of the Directors or officers of the Company are, in
accordance with the Company Act and/or these Articles. printed or
otherwise mechanically reproduced there may be delivered to the firm or
company employed to engrave, lithograph or print such definitive or
interim bonds, debentures, share certificates or other securities one
or more unmounted dies reproducing the Company's seal and the Chairman
of the Board, the President, the Managing Director or a Vice-President
and the Secretary, Treasurer, Secretary-Treasurer, an Assistant
Secretary, an Assistant Treasurer or an Assistant Secretary-Treasurer
may by a document authorize such firm or company to cause the Company's
seal to be affixed to such definitive or interim bonds, debentures,
share certificates or other securities by the use of such dies. Bonds,
debentures, share certificates or other securities to which the
Company's seal has been so affixed shall for all purposes be deemed to
be under and to bear the Company's seal lawfully affixed thereto.
24.3. The Company may have for use in any other province, state, territory or
country an official seal which shall have on its face the name of the
province, state, territory or country where it is to be used and all of
the powers conferred by the Company Act with respect thereto may be
exercised by the Directors or by a duly authorized agent of the
Company.
PART 25
MECHANICAL REPRODUCTIONS OF SIGNATURES
25.1. The signature of any officer, Director, registrar, branch registrar,
transfer agent or branch transfer agent of the Company, unless
otherwise required by the Company Act or by these Articles, may, if
authorized by the Directors, be printed, lithographed, engraved or
otherwise mechanically reproduced upon all instruments executed or
issued by the Company or any officer thereof; and any instrument on
which the signature of any such person is so reproduced shall be deemed
to have been manually signed by such person whose signature is so
reproduced and shall be as valid to all intents and purposes as if such
instrument had been signed manually, and notwithstanding that the
person whose signature is so reproduced may have ceased to hold the
office that he is stated on such instrument to hold at the date of the
delivery or issue of such instrument.
25.2. The term "instrument" as used in Article 25.1, shall include deeds,
mortgages, hypothecs, charges, conveyances, transfers and assignments
of property, real or personal, agreements, releases, receipts and
discharges for the payment of money or other
<PAGE> 21
obligations, shares and share warrants of the Company, bonds,
debentures and other debt obligations of the Company, and all paper
writings.
PART 26
PROHIBITIONS
26.1 If the Company is, or becomes, a company which is not a reporting
company, (i) the number of members for the time being of the Company,
exclusive of persons who are for the title being in the employment of
the Company and continue to be members after the termination of such
employment, shall not exceed 50, and (ii) no securities issued by the
Company shall be offered for sale to the public nor shall the public be
invited to subscribe therefor.
26.2 If the Company is, or becomes, a company which is riot a reporting
company, or a reporting company but does not have any of its securities
listed for trading on any stock exchange wheresoever situate, or a
reporting company and has not with respect to any of its securities
filed a prospectus with the Superintendent Brokers or any similar
securities regulatory body and obtained a receipt therefor, then no
shares shall be transferred without the previous consent of the
Directors expressed by a resolution of the Board and the Directors
shall not be required to give any reason for refusing to any such
proposed transfer.
<PAGE> 22
SCHEDULE "B"
PART 27
SPECIAL RIGHTS AND RESTRICTIONS ATTACHED TO SHARES
27.1 The holders of the Common voting shares (the "common shares") shall be
entitled to notice of and to attend each meeting of members of the
Company and to one vote at each such meeting for each such share of
which he is the registered holder.
27.2 The holders of the Class A Preference Non-voting shares (the "Class A
shares") and the Class B Preference Non-voting shares (the "Class B
shares") shall be entitled to receive notice to attend any meeting of
members of the Company but shall not be entitled to vote either in
person or by proxy at any such meeting except as and to the extent
required by law or order of a court of competent jurisdiction.
27.3 The holders of the Class A shares and the Class B shares shall be
entitled to receive on a date fixed for payment thereof, and the
Company shall pay thereon, at the discretion of the Directors, in
priority to dividends declared on the Common shares, such dividends as
the directors may in their sole discretion declare from time to time,
out of the money of the Company properly applicable to the payment of
dividends. The holders of the Class A shares and the Class B shares
shall not be entitled to any dividends other than or in excess of the
dividends so declared dividends so declared.
27.4 If in any fiscal year the board of directors in its discretion shall
not declare the preferential dividends or any part thereof on the Class
A shares or the Class B shares then the right of the holders of the
Cannon shares to such dividend or to any undeclared part thereof shall
be forever extinguished.
27.5 The Class A shares or any part thereof shall be redeemable at their par
value of $10.00 each at any time at the option of the directors of the
Company without the consent of the holders thereof and if less than the
whole amount of the issued and outstanding Class A shares shall be so
redeemed, the shares to be redeemed shall be selected in such manner as
the directors may determine.
27.6 The Class B shares or any part thereof shall be redeemable at their par
value of $50.00 each at any time at the option of the directors of the
Company without the consent of the holders thereof and if less than the
mole amount of the issued and outstanding Class 8 shares shall be so
redeemed, the shares to be redeemed shall be selected in such manner as
the directors may determine.
27.7 Before redeeming any of the Class A shares or the Class B shares, the
Company shall mail to each person who, at the date of such mailing is a
registered hold of shares to be redeemed, notice of the intention of
the Company to redeem such shares held by such registered holder. Such
notice shall be mailed by ordinary prepaid post addressed to the last
address of such holder as appears on the books of the Company, or, in
the event that the address of any such holder does not appear on the
books of the Company, then to the last known address of such holder, at
least fifteen (15) days before the date specified for redemption. Such
notice shall set out the redemption price, the date on which such
redemption is to take place and, if part only of the shares held by the
person to whom it is addressed is to be redeemed, the number thereof so
to be redeemed on or after the date so specified for redemption the
Company shall pay or cause to be paid the redemption price to the
registered holders of the shares to be redeemed. On presentation and
surrender of the certificates for the shares so called for redemption
at the registered office of the Company in British Columbia, or at such
other place in Canada as may be specified in such notice, and the
certificates for such shares shall thereupon be cancelled, and the
shares represented thereby shall thereupon be redeemed from and after
the date specified for redemption in such notice, the holders of such
shares called for redemption shall cease to be entitled to any rights
in respect thereof, except to receive the redemption price, unless
payment of the redemption price shall not be made by the Company in
accordance with the foregoing provisions, in which case the rights of
the holders of such shares shall remain unimpaired. On or before or
after the date specified for redemption the Company shall have the
right to deposit the redemption price of the shares called for
redemption in a special account with any chartered bank or trust
company in Canada of which holders of such shares to be redeemed are
notified in writing, to be paid as to interest thereon, to the Company
and as to such redemption price without interest, to or to the order of
the respective holders of such shares called for redemption upon
presentation and surrender of the certificates representing the same.
Upon such deposit being made, the shares in respect of which such
deposit shall have been made, shall be deemed to have been redeemed,
whether or not the share certificates therefor are then or thereafter
presented and surrendered, and the rights of the several holders
thereof, after such deposit, shall be limited to receiving, out of the
money so deposited, with interest, the redemption price applicable to
their respective shares against presentation and surrender of the
certificates representing such shares. The
<PAGE> 23
notice required by this paragraph may be waived by any or all of the
members by an instrument in writing directed to the directors of the
Company.
27.8 In the event of liquidation, dissolution or winding up of the Company
whether voluntary or involuntary, the holders of the Class A shares and
the Class B shares shall be entitled to receive, before any
distribution of any part of the assets of the Company among the holders
of any other shares, an amount equal to $100 of the amount paid up
thereon and any dividends declared thereon and unpaid and no more.
27.9 The said Class A shares and the Class B shares shall rank, both as
regards to dividends and return of capital, in priority to all other
shares of the Company but shall not confer any further right to
participate in profits or assets.
