UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of January 2020

 

Commission File Number: 001-38773

 

CHINA SXT PHARMACEUTICALS, INC.

(Translation of registrant’s name into English)

 

178 Taidong Rd North, Taizhou

Jiangsu, China

(Address of principal executive office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F ☒     Form 40-F ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

 

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

 

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

 

 

 

 

 

 

EXPLANATORY NOTE

 

In connection with the 2020 Annual Meeting of Shareholders of China SXT Pharmaceuticals, Inc., a British Virgin Islands company (the “Company”), the Company hereby furnishes the following documents:

 

Exhibits

 

Exhibit No.   Description
99.1   Notice of 2020 Annual Meeting of Shareholders, dated January 31, 2020, to be mailed to the shareholders of the Company in connection with the 2020 Annual Meeting of Shareholders of the Company.
99.2   Form of Proxy Card to be mailed to shareholders of the Company for use in connection with the 2020 Annual Meeting of Shareholders of the Company.

 

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SIGNATURE

 

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 hereunto duly authorized.

 

  CHINA SXT PHARMACEUTICAL, INC.
     
  By: /s/ Feng Zhou 
    Feng Zhou
    Chief Executive Officer

 

Date: January 31, 2020

 

 

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Exhibit 99.1

 

CHINA SXT PHARMACEUTICALS, INC.
 

178 Taidong Road North

Taizhou, Jiangsu

People’s Republic of China 

NOTICE OF 2020 ANNUAL MEETING OF SHAREHOLDERS

To Be Held at 9:30 a.m. on March 10, 2020 Eastern Standard Time

 

To the Shareholders of China SXT Pharmaceuticals, Inc.:

 

This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors (the “Board” ) of China SXT Pharmaceuticals, Inc. (the “Company” ) for use at the 2020 annual meeting of Shareholders of the Company (the “Meeting” ) and at all adjournments and postponements thereof. The Meeting will be held at 178 Taidong Road North Taizhou, Jiangsu, People’s Republic of China, on March 10, 2020, at 9:30 a.m. EST, to consider and vote upon the following proposals:

 

1. To elect Feng Zhou, Jun Zheng, Junsong Li, Tulin Lu and Wenwei Fan (the “Director Nominees” ) to serve on the Company’s Board of Directors (the “Board”) until the next annual shareholders meeting and until their successors are duly elected and qualified;
   
2. To ratify the selection of ZH CPA, LLC (“ZH CPA”) as our independent auditor to audit the financial statements for the fiscal year ending on March 31, 2020;
   
3. To approve, by a non-binding vote, the Company’s executive compensation;
   
4. To approve, by a non-binding vote, the frequency of future Stockholder advisory votes relating to the Company’s executive compensation;
   
5.

To approve and adopt amendments to the Company’s Memorandum and Articles of Association (the “Charter Amendment”)  to grant the Board the authority to amend the Company’s authorized share capital and to divide or combine shares (the “Board Authority Change”) and to change the quorum for members meeting to one third of the voting rights of the shares of each class (the “Quorum Change”); and

   
6. To transact such other business as may properly come before the Meeting or any adjournment or postponement thereof.

 

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” ALL OF THE NOMINEES LISTED ABOVE AND “FOR” EACH OF THE OTHER PROPOSALS EXCEPT “THREE YEARS” FOR PROPOSAL NO. 5. 

 

Holders of record of the Company’s Ordinary Shares at the close of business on January 15, 2020 (the “Record Date”) will be entitled to notice of, and to vote at, this Meeting and any adjournment or postponement thereof. Each share of Ordinary Shares entitles the holder thereof to one vote.

 

Your vote is important, regardless of the number of shares you own. Even if you plan to attend this Meeting in person, it is strongly recommended that you complete the enclosed proxy card before the meeting date, to ensure that your shares will be represented at this Meeting if you are unable to attend.

 

A complete list of Shareholders of record entitled to vote at this Meeting will be available for ten days before this Meeting at the principal executive office of the Company for inspection by Shareholders during ordinary business hours for any purpose germane to this Meeting. 

 

 

 

 

This notice and the enclosed proxy statement are first being mailed to Shareholders on or about February 7, 2020. 

 

You are urged to review carefully the information contained in the enclosed proxy statement prior to deciding how to vote your shares.

 

By Order of the Board,  
   
/s/ Feng Zhou  
Feng Zhou  
Director and Chief Executive Officer  
January 31, 2020  

 

IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED “FOR” ALL OF THE NOMINEES LISTED ABOVE AND “FOR” EACH OF THE OTHER PROPOSALS.

 

Important Notice Regarding the Availability of Proxy Materials

for the Annual Shareholder Meeting to Be Held at 9:30 a.m. on March 10, 2020 Eastern Standard Time

 

The Notice of Annual Meeting, proxy statement and Annual Report on Form 20-F for year ended March 31, 2019 are available at www.proxyvote.com.

  

 

 

  

TABLE OF CONTENTS

 

  Page
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS 1
THE ANNUAL MEETING 4
General 4
Date, Time and  Place of the Meeting 4
Purpose of the Meeting 4
Record Date and Voting Power 4
Quorum and Required Vote 4
Revocability of Proxies 5
Proxy Solicitation Costs 5
No Right of Appraisal 5
Who Can Answer Your Questions About Voting Your Shares 5
Principal Offices 5
   
PROPOSAL NO. 1 — ELECTION OF DIRECTORS 6
Board Qualifications and Director Nominees 6
Information Regarding the Company’s Directors and Nominees 6
Vote Required 7
Recommendation of the Board 7
Corporate Governance 7
   
Security Ownership of Certain Beneficial Owners and Management 11
Certain Relationships and Related Transactions 12
   
PROPOSAL NO. 2 — RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 14
Principal Accountant Fees and Services 14
Policies and Procedures Relating to Approval of Services by our Independent Registered Public Accountants 14
Vote Required 14
Recommendation of the Board 14
   
PROPOSAL NO. 3 — ADVISORY VOTE ON EXECUTIVE COMPENSATION 15

Purpose

15
Vote Required 15
Recommendation of the Board 15
   

PROPOSAL NO. 4 - ADVISORY VOTE ON FREQUENCY OF ADVISORY VOTES ON EXECUTIVE COMPENSATION

16
Purpose 16
Vote Required 16
Recommendation of the Board 16
   
PROPOSAL NO. 5 – APPROVAL AND ADOPTION OF THE CHARTER AMENDMENT 17
Procedure for Implementing the Charter Amendment 17
Effect of the Charter Amendment on Shareholders of the Company 17
Reason for the Charter Amendment 17

 

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Required Vote 17
Recommendation of the Board 17
   
OTHER INFORMATION 18
Deadline for Submission of Shareholder Proposals for 2021 Annual Meeting of Shareholders 18
Proxy Solicitation 18
Annual Report 18
Delivery of Proxy Materials to Households 19
Where You Can Find Additional Information 19
   
ANNEXES  
   
Annex A Certificate Of Amendment of Memorandum and Articles of Association A-1

 

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China SXT Pharmaceuticals, Inc.

PROXY STATEMENT

 

2020 ANNUAL MEETING OF SHAREHOLDERS

to be held on March 10, 2020, at 9:30 a.m., Eastern Standard Time
178 Taidong Road North,

Taizhou, Jiangsu, People’s Republic of China 

QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS

 

Why am I receiving this proxy statement?

 

This proxy statement describes the proposals on which our Board would like you, as a Shareholder, to vote at the Meeting, which will take place on March 10, 2020, at 9:30 a.m., EST, at 178 Taidong Road North Taizhou, Jiangsu, People’s Republic of China.

 

Shareholders are being asked to consider and vote upon proposals to (i) elect the Director Nominees to the Board to serve one-year terms, (ii) ratify the selection of ZH CPA as our independent registered public accounting firm for 2019, (iii) approve, by a non-binding vote, the Company’s executive compensation; (iv) approve, by a non-binding, vote the frequency of future Stockholder advisory votes relating to the Company’s executive compensation; (v) approve and adopt amendments to the Company’s Memorandum and Articles of Association (the “Charter Amendment”) to grant the Board powers to amend the Company’s authorized share capital, to grant the Board authority to divide or combine shares and to change the quorum for members meeting to one third of the voting rights of the shares of each class (the “Quorum Change”); and (vi) transact such other business as may properly come before the Meeting or any adjournment or postponement thereof.

 

This proxy statement also gives you information on the proposals so that you can make an informed decision. You should read it carefully. Your vote is important. You are encouraged to submit your proxy card as soon as possible after carefully reviewing this proxy statement.

 

In this proxy statement, we refer to China SXT Pharmaceuticals, Inc. as the “Company”, “we”, “us” or “our.”

 

Who can vote at this Meeting?

 

Shareholders who owned shares of our Ordinary Shares on January 15, 2020 (the “Record Date”) may attend and vote at this Meeting. There were 27,728,081 shares of Ordinary Shares outstanding on the Record Date. All shares of Ordinary Shares shall have one vote per share. Information about the stockholdings of our directors, executive officers and significant Shareholders is contained in the section of this proxy statement entitled “Security Ownership of Certain Beneficial Owners and Management” beginning on page 14 of this proxy statement.

 

What is the proxy card?

 

The card enables you to appoint Feng Zhou as your representative at this Meeting. By completing and returning the proxy card, you are authorizing these persons to vote your shares at this Meeting in accordance with your instructions on the proxy card. This way, your shares will be voted whether or not you attend this Meeting. Even if you plan to attend this Meeting, it is strongly recommended to complete and return your proxy card before this Meeting date just in case your plans change. If a proposal comes up for vote at this Meeting that is not on the proxy card, the proxies will vote your shares, under your proxy, according to their best judgment.

 

How does the Board recommend that I vote?

 

Our Board unanimously recommends that stockholders vote “FOR” each of the Director Nominees listed in proposal No. 1 and “FOR” each of proposals No. 2, 3 and 5 and “THREE YEARS” for proposal No. 4

  

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What is the difference between holding shares as a shareholder of record and as a beneficial owner?

 

Certain of our Shareholders hold their shares in an account at a brokerage firm, bank or other nominee holder, rather than holding share certificates in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially.

 

Shareholder of Record/Registered Shareholders

 

If, on the Record Date, your shares were registered directly in your name with our transfer agent, TranShare Securities Transfer and Registrar, you are a “Shareholder of record” who may vote at the Meeting, and we are sending these proxy materials directly to you. As the Shareholder of record, you have the right to direct the voting of your shares by returning the enclosed proxy card to us or to vote in person at the Meeting. Whether or not you plan to attend the Meeting, please complete, date and sign the enclosed proxy card to ensure that your vote is counted. 

 

Beneficial Owner

 

If, on the Record Date, your shares were held in an account at a brokerage firm or at a bank or other nominee holder, you are considered the beneficial owner of shares held “in street name,” and these proxy materials are being forwarded to you by your broker or nominee who is considered the Shareholder of record for purposes of voting at the Meeting. As the beneficial owner, you have the right to direct your broker on how to vote your shares and to attend the Meeting. However, since you are not the Shareholder of record, you may not vote these shares in person at the Meeting unless you receive a valid proxy from your brokerage firm, bank or other nominee holder. To obtain a valid proxy, you must make a special request of your brokerage firm, bank or other nominee holder. If you do not make this request, you can still vote by using the voting instruction card enclosed with this proxy statement; however, you will not be able to vote in person at the Meeting.

 

How do I vote?

 

If you were a Shareholder of record of the Company’s Ordinary Shares on the Record Date, you may vote in person at the Meeting or by submitting a proxy. Each share of Ordinary Shares that you own in your name entitles you to one vote, in each case, on the applicable proposals.

 

(1) You may submit your proxy by mail. You may submit your proxy by mail by completing, signing and dating your proxy card and returning it in the enclosed, postage-paid and addressed envelope. If we receive your proxy card prior to this Meeting and if you mark your voting instructions on the proxy card, your shares will be voted:

 

  as you instruct, and
     
  according to the best judgment of the proxies if a proposal comes up for a vote at this Meeting that is not on the proxy card.

 

We encourage you to examine your proxy card closely to make sure you are voting all of your shares in the Company.

 

If you return a signed card, but do not provide voting instructions, your shares will be voted:

 

  FOR each nominee for director;
     
  FOR the selection of ZH CPA as our independent registered public accounting firm for year ending March 31, 2020;
     
  FOR the approval, by a non-binding vote, the Company’s executive compensation
     
  FOR the recommendation of every THREE (3) years as the desired frequency for the Company to hold a non-binding, advisory vote of the stockholders on executive compensation; a 
     
 

FOR the approval and the adoption of the Charter Amendment to effect the Board Authority Change and the Quorum Change; and

     
  According to the best judgment of Mr. Zhou if a proposal comes up for a vote at the Meeting that is not on the proxy card.

 

(2) You may vote in person at the Meeting.  We will pass out written ballots to any Shareholder of record who wants to vote at the Meeting.

 

If I plan on attending the Meeting, should I return my proxy card?

 

Yes. Whether or not you plan to attend the Meeting, after carefully reading and considering the information contained in this proxy statement, please complete and sign your proxy card. Then return the proxy card in the pre-addressed, postage-paid envelope provided herewith as soon as possible so your shares may be represented at the Meeting.

 

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May I change my mind after I return my proxy?

 

Yes. You may revoke your proxy and change your vote at any time before the polls close at this Meeting. You may do this by:

 

  sending a written notice to the Secretary of the Company at the Company’s executive offices stating that you would like to revoke your proxy of a particular date;
     
  signing another proxy card with a later date and returning it to the Secretary before the polls close at this Meeting; or
     
  attending this Meeting and voting in person.

 

What does it mean if I receive more than one proxy card?

 

You may have multiple accounts at the transfer agent and/or with brokerage firms. Please sign and return all proxy cards to ensure that all of your shares are voted.

 

What happens if I do not indicate how to vote my proxy?

 

Signed and dated proxies received by the Company without an indication of how the Shareholder desires to vote on a proposal will be voted in favor of each director and proposal presented to the Shareholders.

 

Will my shares be voted if I do not sign and return my proxy card?

 

If you do not sign and return your proxy card, your shares will not be voted unless you vote in person at this Meeting. 

 

How many votes are required to elect the Director Nominees as directors of the Company?

 

The election of each nominee for director requires the affirmative vote of a majority of the shares of Ordinary Shares represented in person or by proxy and entitled to vote in the election of directors at the Meeting.

 

How many votes are required to ratify ZH CPA as the Company’s independent registered public accounting firm for year ending March 31, 2020?

 

The proposal to ratify the appointment of ZH CPA to serve as our independent registered public accounting firm for 2019 requires the affirmative vote of a majority of the votes cast at the Meeting by the holders of shares of Ordinary Shares entitled to vote.

 

How may votes are required to approve, by a non-binding vote, the Company’s executive compensation?

 

The proposal to approve, by a non-binding vote, the Company’s executive compensation requires the affirmative vote of a majority of the votes cast at the Meeting by the holders of shares of Ordinary Shares entitled to vote.

 

How many votes are required to approve, by a non-binding vote, the frequency of future Stockholder advisory votes relating to the Company’s executive compensation?

 

The proposal to approve, by a non-binding, vote the frequency of future Stockholder advisory votes relating to the Company’s executive compensation requires the affirmative vote of a majority of the votes cast at the Meeting by the holders of shares of Ordinary Shares entitled to vote.

 

How many votes are required to approve the Charter Amendment?

 

The proposal to effectuate the Charter Amendment requires the affirmative vote of a majority of the votes cast at the Meeting by the holders of shares of Ordinary Shares entitled to vote.

 

Is my vote kept confidential?

 

Proxies, ballots and voting tabulations identifying Shareholders are kept confidential and will not be disclosed, except as may be necessary to meet legal requirements.

 

Where do I find the voting results of this Meeting?

 

We will announce voting results at this Meeting and also file a Current Report on Form 6-K with the Securities and Exchange Commission (the “SEC”) reporting the voting results.

 

Who can help answer my questions?

 

You can contact Feng Zhou at 86-010-5944 1080 or by sending a letter to the offices of the Company at 178 Taidong Road North Taizhou, Jiangsu, People’s Republic of China with any questions about proposals described in this proxy statement or how to execute your vote.

 

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THE ANNUAL MEETING

 

General

 

We are furnishing this proxy statement to you, as a shareholder of China SXT Pharmaceuticals, Inc., as part of the solicitation of proxies by our Board for use at the Meeting to be held on March 10, 2020, and any adjournment or postponement thereof. This proxy statement is first being furnished to Shareholders on or about February 7, 2020. This proxy statement provides you with information you need to know to be able to vote or instruct your proxy how to vote at the Meeting.

 

Date, Time and Place of the Meeting

 

The Meeting will be held on March 10, 2020, at 9:30 a.m., EST, at 178 Taidong Road North Taizhou, Jiangsu, People’s Republic of China, or such other date, time and place to which the Meeting may be adjourned or postponed.

 

Purpose of the Meeting

 

At the Meeting, the Company will ask Shareholders to consider and vote upon the following proposals:

 

1. To elect the Director Nominees to serve on the Company’s Board of Directors until the next annual shareholders meeting and until their successors are duly elected and qualified;
   
2. To ratify the selection of ZH CPA as our independent registered public accounting firm for year ending March 31, 2020;
   
3. To conduct a non-binding vote on the Company’s executive compensation;
   
4. To conduct a non-binding vote on the frequency of future Stockholder advisory votes relating to the Company’s executive compensation
   
5.

To approve the Charter Amendment to reflect the Board Authority Change and the Quorum Change; and

 

6. To transact such other business as may properly come before the Meeting or any adjournment or postponement thereof.

 

Record Date and Voting Power

 

Our Board fixed the close of business on January 15, 2020, as the record date for the determination of the outstanding shares of Ordinary Shares entitled to notice of, and to vote on, the matters presented at this Meeting. As of the Record Date, there were 27,728,081 shares of Ordinary Shares outstanding. Each share of Ordinary Shares entitles the holder thereof to one vote. Accordingly, a total of 27,728,081 votes may be cast at this Meeting.

 

Quorum and Required Vote

 

A quorum of Shareholders is necessary to hold a valid meeting. A quorum will be present at the meeting if at least fifty percent of the Ordinary Shares outstanding and entitled to vote at the Meeting is represented in person or by proxy. Abstentions and broker non-votes (i.e. shares held by brokers on behalf of their customers, which may not be voted on certain matters because the brokers have not received specific voting instructions from their customers with respect to such matters) will be counted solely for the purpose of determining whether a quorum is present at the Meeting.

 

Proposal No. 1 requires the affirmative vote of a majority of the shares of Ordinary Shares represented in person or by proxy and entitled to vote in the election of directors at the Meeting. Abstentions and broker non-votes will have no effect on the election of directors;

 

Proposal No. 2 requires the affirmative vote of the majority of the shares present in person or represented by proxy at the Meeting and entitled to vote thereon. Abstentions and broker non-votes will have no direct effect on the outcome of this proposal;

 

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Proposal No. 3 requires the affirmative vote of the majority of the shares present in person or represented by proxy at the Meeting and entitled to vote thereon. Abstentions and broker non-votes will have no direct effect on the outcome of this proposal;

 

Proposal No. 4 requires the affirmative vote of the majority of the shares present in person or represented by proxy at the Meeting and entitled to vote thereon. Abstentions and broker non-votes will have no direct effect on the outcome of this proposal; and

 

Proposal No.5 requires the affirmative vote of the majority of the shares present in person or represented by proxy at the Meeting and entitled to vote thereon. Abstentions and broker non-votes will have no direct effect on the outcome of this proposal.

 

Revocability of Proxies

 

Any proxy may be revoked by the shareholder of record giving it at any time before it is voted. A proxy may be revoked by (A) sending to our Secretary, at China SXT Pharmaceuticals, Inc., 178 Taidong Road North Taizhou, Jiangsu, People’s Republic of China, either (i) a written notice of revocation bearing a date later than the date of such proxy or (ii) a subsequent proxy relating to the same shares, or (B) by attending this Meeting and voting in person.

 

If the shares are held by the broker or bank as a nominee or agent, the beneficial owners should follow the instructions provided by their broker or bank.

 

Proxy Solicitation Costs

 

The cost of preparing, assembling, printing and mailing this proxy statement and the accompanying form of proxy, and the cost of soliciting proxies relating to this Meeting, will be borne by the Company. If any additional solicitation of the holders of our outstanding shares of Ordinary Shares is deemed necessary, we (through our directors and officers) anticipate making such solicitation directly. The solicitation of proxies by mail may be supplemented by telephone, telegram and personal solicitation by officers, directors and other employees of the Company, but no additional compensation will be paid to such individuals.

 

No Right of Appraisal

 

None of British Virgin Islands law, our Memorandum and Articles of Association or our Bylaws provides for appraisal or other similar rights for dissenting Shareholders in connection with any of the proposals to be voted upon at this Meeting. Accordingly, our Shareholders will have no right to dissent and obtain payment for their shares.

 

Who Can Answer Your Questions about Voting Your Shares

 

You can contact Feng Zhou at 86-52386298290 or by sending a letter to the offices of the Company at 178 Taidong Road North Taizhou, Jiangsu, People’s Republic of China, with any questions about proposals described in this proxy statement or how to execute your vote.

 

Principal Offices

 

The principal executive offices of our Company are located at 178 Taidong Road North Taizhou, Jiangsu, People’s Republic of China. The Company’s telephone number at such address is 86-52386298290 .

 

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PROPOSAL NO. 1 — ELECTION OF DIRECTORS

 

The nominees listed below have been nominated by the Nominating and Corporate Governance Committee and approved by our Board to stand for election as directors of the Company. Unless such authority is withheld, proxies will be voted for the election of the persons named below, each of whom has been designated as a nominee. If, for any reason, any nominee/director becomes unavailable for election, the proxies will be voted for such substitute nominee(s) as the Board may propose.

 

Board Qualifications and Director Nominees

 

We believe that the collective skills, experiences and qualifications of our directors provide our Board with the expertise and experience necessary to advance the interests of our Shareholders. While the Nominating and Corporate Governance Committee of our Board does not have any specific, minimum qualifications that must be met by each of our directors, the Nominating and Corporate Governance Committee uses a variety of criteria to evaluate the qualifications and skills necessary for each member of the Board. In addition to the individual attributes of each of our current directors described below, we believe that our directors should have the highest professional and personal ethics and values, consistent with our longstanding values and standards. They should have broad experience at the policy-making level in business, exhibit commitment to enhancing Shareholder value and have sufficient time to carry out their duties and to provide insight and practical wisdom based on their past experience. 

 

The Director Nominees recommended by the Board are as follows:

 

Name   Age   Current Position
Feng Zhou   28   Director and Chief Executive Officer
Jun Zheng   43   Director
Junsong Li   56   Independent Director (1)(2)(3)
Tulin Lu   57   Independent Director (1)(2)(3)
Wenwei Fan   50   Independent Director (1)(2)(3)

 

(1) Member of Audit Committee

(2) Member of Compensation Committee

(3) Member of Nominating and Corporate Governance Committee

 

Information Regarding the Company’s Directors and the Nominees

 

Mr. Feng Zhou has been our CEO and director since July 4, 2017. He was the CEO of Taizhou Suxuantang, our VIE Entity from May 2017 to February 2018. From January 2015 to May 2017, he was the vice manager of Taizhou Suxuantang. As vice manager of Taizhou Suxuantang, he was responsible for procurement and formulating a cost effective strategy for purchasing goods and services. Mr. Zhou graduated from Logistical Engineering University of PLA and majored in Business Administration. We believe that Mr. Zhou should serve as a member of our board of directors due to the perspective and experience he brings as our founder, Chairman, and CEO, and as our largest and controlling stockholder.

 

Mr. Jun Zheng has been appointed as our director upon closing of our IPO on December 31, 2018. Mr. Zheng was a sales area manager at Jiangxi Bo Shi Da Pharmaceutical Co., Ltd. from 1999 to 2004, and a department manager and deputy general manager at Taizhou Jiutian Pharmaceutical Co., Ltd. from the 2005 to 2012. Mr. Zheng served as a general manager at Taizhou Renji Chinese Traditional Medicine Pieces Co., Ltd. from 2013 to 2015 and a general manager at Jiangsu Health Pharmaceutical Investment Management Co., Ltd. from 2016 to 2017. Currently, Mr. Zheng is a vice president at Taizhou Suxuantang. Mr. Zheng received his bachelor’s degree from Jiangnan University (Wuxi Light Industry University) in 1999.

 

Mr. Junsong Li has been appointed as our independent director upon closing of our IPO on December 31, 2018. Mr. Li has over 20 year-experience in the TCM industry. Mr. Li has served as the researcher of Nanjing TCM University since 2009. From 1986 to 2003, Mr. Li worked as an associate professor of Nanjing TCM Hospital. Mr. Li graduated from Nanjing TCM University with a Bachelor of Arts in TCM in 1986 and a Master’s Degree in TCM in 2002. Mr. Li obtained his PhD from Shanghai TCM University in 2006. We believe Mr. Li is well-qualified to serve as a member of the board because of her extensive prior work experience and educational background in the TCM field.

 

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Dr. Tulin Lu has been appointed as our independent director upon closing of our IPO on December 31, 2018. Currently, Dr. Lu is a Professor at Nanjing University of TCM. As a veteran in the TCM academia, Dr. Lu has also served as the Chief Director at the co-laboratory of TCM Processing of Ministry of Education of the P. R. China since 2012, the Deputy Director of the standard laboratory of TCM pieces at the State Administration of TCM of the P. R. China since 2008, the Deputy Director at Jiangsu Provincial Key Laboratory of the Processing of TCM since 2007, the Deputy Director of the department of Processing preparation of TCM at Nanjing University of TCM since 2016, and the Executive Deputy Director of TCM Pieces Quality Assurance Specialized Committee of China since 2014. Dr. Lu received his Ph. D, Master of Science, and Bachelor of Science degrees from Nanjing University of TCM in 1989, 1999, and 2003, respectively.

 

Mr. Wenwei Fan has been appointed as our independent director upon closing of our IPO on December 31, 2018. Mr. Fan currently is a Partner of a Chinese Certified Public Accountant firm, Beijing Huashen Accounting Firm, where he is in charge of supervising international auditing, including auditing financial statements for Chinese subsidiaries of several multinational companies. He started his career with Shiyong Zhonghe Accounting firm, which was acquired by Pricewaterhouse Coopers in 2000. Mr. Fan is a Certified Public Accountant and Certified Tax Agent in China. He graduated from Jiangsu University of Finance and Economics in 1992 with a bachelor’s degree.

 

Vote Required

 

Proposal No. 1 will be approved if a majority of the total votes properly cast in person or by proxy at the Meeting by the holders of Ordinary Shares vote “FOR” the proposal. Abstentions and broker non-votes will have no effect on the result of the vote.

 

Recommendation of the Board

 

The Board unanimously recommends that you vote all of your shares “FOR” the election to the Board of all of the nominees described in this Proposal No. 1. 

 

Corporate Governance

 

Director Independence

 

Our Board reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based on this review, it is determined that Junsong Li, Tulin Liu, and Wenwei Fan are “independent directors” as defined by NASDAQ.

  

Committees of the Board of Directors

 

We established an audit committee, a compensation committee and a nominating and governance committee. Each of the committees of the Board have the composition and responsibilities described below.

 

Audit Committee 

 

Mr. Wenwei Fan, Mr. Junsong Li and Mr. Tulin Lu are members of our Audit Committee, where Mr. Wenwei Fan, serves as the chairman. All members of our Audit Committee satisfy the independence standards promulgated by the SEC and by NASDAQ as such standards apply specifically to members of audit committees.

 

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We adopted and approved a charter for the Audit Committee prior to consummation of our initial public offering. In accordance with our Audit Committee Charter, our Audit Committee shall perform several functions, including:

 

evaluates the independence and performance of, and assesses the qualifications of, our independent auditor, and engages such independent auditor;

 

approves the plan and fees for the annual audit, quarterly reviews, tax and other audit-related services, and approves in advance any non-audit service to be provided by the independent auditor;

 

monitors the independence of the independent auditor and the rotation of partners of the independent auditor on our engagement team as required by law;

 

reviews the financial statements to be included in our Annual Report on Form 20-F and Quarterly Reports on Form 6-K and reviews with management and the independent auditors the results of the annual audit and reviews of our quarterly financial statements;

 

oversees all aspects our systems of internal accounting control and corporate governance functions on behalf of the board;

 

reviews and approves in advance any proposed related-party transactions and report to the full Board on any approved transactions; and

 

provides oversight assistance in connection with legal, ethical and risk management compliance programs established by management and the Board, including Sarbanes-Oxley Act implementation, and makes recommendations to the Board regarding corporate governance issues and policy decisions.

  

It is determined that Mr. Wenwei Fan, possesses accounting or related financial management experience that qualifies him as an “audit committee financial expert” as defined by the rules and regulations of the SEC.

 

Compensation Committee

 

Mr. Junsong Li, Mr. Wenwei Fan, and Mr. Tulin Lu are members of our Compensation Committee and Junsong Li is the chairman. All members of our Compensation Committee are qualified as independent under the current definition promulgated by NASDAQ. We adopted a charter for the Compensation. In accordance with the Compensation Committee’s Charter, the Compensation Committee shall be responsible for overseeing and making recommendations to the Board regarding the salaries and other compensation of our executive officers and general employees and providing assistance and recommendations with respect to our compensation policies and practices.

 

Nominating and Governance Committee

 

Mr. Tulin Lu, Mr. Junsong Li, and Mr. Wenwei Fan are the members of our Nominating and Governance Committee where Mr. Tulin Lu serves as the chairman. All members of our Nominating and Governance Committee are qualified as independent under the current definition promulgated by NASDAQ. The Board of Directors adopted and approved a charter for the Nominating and Governance Committee prior to consummation of our initial public offering. In accordance with the Nominating and Governance Committee’s Charter, the Nominating and Corporate Governance Committee shall be responsible to identity and propose new potential director nominees to the Board of Directors for consideration and review our corporate governance policies.

 

Family Relationships

 

None of the directors or executive officers has a family relationship as defined in Item 401 of Regulation S-K.

 

Involvement in Certain Legal Proceedings

 

To the best of our knowledge, none of our directors or executive officers has, during the past ten years, been involved in any legal proceedings described in subparagraph (f) of Item 401 of Regulation S-K.

 

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Board of Directors

 

Our board of directors consists of 5 directors as of the date of this annual report.

 

Duties of Directors

 

Under British Virgin Islands law, our directors have a duty to act honestly and in good faith and in what the director believes to be in our best interests. Our directors also have a duty to exercise the care, diligence and skill that a reasonable director would exercise in the same circumstances. See “Description of Ordinary Shares — Differences in Corporate Law” for additional information on our directors’ fiduciary duties under British Virgin Islands law. In fulfilling their duty of care to us, our directors must ensure compliance with our M&A. We have the right to seek damages if a duty owed by our directors is breached.

 

A director must exercise his powers as a director for a proper purpose and must not act, or agree to us acting, in a manner that contravenes the BC Act or the M&A. When exercising his powers or performing his duties as a director, a director is entitled to rely upon the register of members and upon books, records, financial statements and other information prepared or supplied, and on professional or expert advice given to him. However, such reliance is subject to the director acting in good faith, making proper enquiry where indicated by the circumstances and having no knowledge that reliance on the matter is not warranted. Under the BC Act, our directors have all the powers necessary for managing, and for directing and supervising, our business and affairs, including but not limited to exercising the borrowing powers of the company and mortgaging the property of the company, as well as executing checks, promissory notes and other negotiable instruments on behalf of the company.

 

Interested Transactions

 

A director may vote, attend a board meeting or sign a document on our behalf with respect to any contract or transaction in which he or she is interested. A director must promptly disclose the interest to all other directors after becoming aware of the fact that he or she is interested in a transaction we have entered into or are to enter into. A general notice or disclosure to the board or otherwise contained in the minutes of a meeting or a written resolution of the board or any committee of the board that a director is a shareholder, director, officer or trustee of any specified firm or company and is to be regarded as interested in any transaction with such firm or company will be sufficient disclosure, and, after such general notice, it will not be necessary to give special notice relating to any particular transaction.

 

Remuneration and Borrowing

 

The directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid all traveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board of directors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist the directors in reviewing and approving the compensation structure for the directors. Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company or of any third party.

 

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Executive Compensation

 

The following table sets forth certain information with respect to compensation for the years ended March 31, 2019 and 2018 earned by or paid to our chief executive officer and principal executive officer, our principal financial officer, and our other most highly compensated executive officers in 2017 whose total compensation exceeded $100,000 (the “named executive officers”).

  

Name and Principal Position   Year   Salary
($)
    Bonus
($)
    Stock 
Awards
($)
    Option
Awards
($)
    Non-Equity 
Incentive Plan
Compensation
    Deferred 
Compensation 
Earnings
    Other     Total
($)
 
Feng Zhou   2019     17,859       0       0       0              0            0       0       17,859  
CEO of SXT   2018     6,987       0       0       0       0       0       0       6,987  
                                                                     
Yao Shi   2019     26,796       0       0       0       0       0       0       26,796  
CFO of SXT and CFO of Taizhou Suxuantang   2018     5,280       0       0       0       0       0       0       5,280  
                                                                     
Jingzhen Deng   2019     26,796       0       0       0       0       0       0       26,796  
COO and CSO of SXT and CEO and CSO of Taizhou Suxuantang   2018     14,559       0       0       0       0       0       0       14,559  

  

Agreements with Named Executive Officers

 

As of December 4, 2017, we entered into an employment agreement with our CEO, Mr. Feng Zhou, pursuant to which he receive an annual base salary of $50,000 Under this employment agreement, Mr. Zhou is employed as our CEO for a term of five years, which automatically renews for additional one year terms unless previously terminated on three months written notice by either party. We may terminate the employment for cause, at any time, without notice or remuneration, for certain acts of the executive officer, such as conviction or plea of guilty to a felony or grossly negligent or dishonest acts to our detriment, or misconduct or a failure to perform agreed duties. In such case, the executive officer will not be entitled to receive payment of any severance benefits or other amounts by reason of the termination, and the executive officer’s right to all other benefits will terminate, except as required by any applicable law. We may also terminate an executive officer’s employment without cause upon one-month advance written notice. In such case of termination by us, we are required to provide compensation to the executive officer, including severance pay equal to 12 months of base salary. The executive officer may terminate the employment at any time with a one-month advance written notice if there is any significant change in the executive officer’s duties and responsibilities or a material reduction in the executive officer’s annual salary. In such case, the executive officer will be entitled to receive compensation equivalent to 12 months of the executive officer’s base salary.

 

As of December 4, 2017, we entered into an employment agreement with our CFO, Mr. Yao Shi, pursuant to which he shall receive an annual base salary of $50,000. Under his employment agreement, Mr. Shi is employed as our CFO for a term of five years, which automatically renews for additional one year terms unless previously terminated on three months written notice by either party. We may terminate the employment for cause, at any time, without notice or remuneration, for certain acts of the executive officer, such as conviction or plea of guilty to a felony or grossly negligent or dishonest acts to our detriment, or misconduct or a failure to perform agreed duties. In such case, the executive officer will not be entitled to receive payment of any severance benefits or other amounts by reason of the termination, and the executive officer’s right to all other benefits will terminate, except as required by any applicable law. We may also terminate an executive officer’s employment without cause upon one-month advance written notice. In such case of termination by us, we are required to provide compensation to the executive officer, including severance pay equal to 3 months of base salary. The executive officer may terminate the employment at any time with a one-month advance written notice if there is any significant change in the executive officer’s duties and responsibilities or a material reduction in the executive officer’s annual salary. In such case, the executive officer will be entitled to receive compensation equivalent to 12 months of the executive officer’s base salary.

 

As of December 4, 2017, we entered into an employment agreement with our COO and CSO, Mr. Jingzhen Deng, pursuant to which he shall receive an annual base salary of $50,000 Under his employment agreement, Mr. Deng is employed as our COO and CSO for a term of five years, which automatically renews for additional one year terms unless previously terminated on three months written notice by either party. We may terminate the employment for cause, at any time, without notice or remuneration, for certain acts of the executive officer, such as conviction or plea of guilty to a felony or grossly negligent or dishonest acts to our detriment, or misconduct or a failure to perform agreed duties. In such case, the executive officer will not be entitled to receive payment of any severance benefits or other amounts by reason of the termination, and the executive officer’s right to all other benefits will terminate, except as required by any applicable law. We may also terminate an executive officer’s employment without cause upon one-month advance written notice. In such case of termination by us, we are required to provide compensation to the executive officer, including severance pay equal to 3 months of base salary. The executive officer may terminate the employment at any time with a one-month advance written notice if there is any significant change in the executive officer’s duties and responsibilities or a material reduction in the executive officer’s annual salary. In such case, the executive officer will be entitled to receive compensation equivalent to 12 months of the executive officer’s base salary.

  

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Each executive officer has agreed to hold, both during and after the termination of his employment agreement, in strict confidence and not to use, except as required in the performance of his or her duties in connection with the employment, any of our confidential information or proprietary information of any third party received by us and for which we have confidential obligations.

 

In addition, each executive officer has agreed to be bound by non-competition and non-solicitation restrictions during the term of his employment and for one year following termination of the employment.

 

Compensation of Directors

 

For the fiscal years ended March 31, 2019 and 2018, we did not compensate our directors for their services other than to reimburse them for out-of-pocket expenses incurred in connection with their attendance at meetings of the Board of Directors. 

  

Terms of Directors and Executive Officers

 

Each of our directors holds office until a successor has been duly elected and qualified unless the director was appointed by the board of directors, in which case such director holds office until the next following annual meeting of shareholders at which time such director is eligible for reelection. All of our executive officers are appointed by and serve at the discretion of our board of directors.

 

Qualification

 

There are no membership qualifications for directors. Further, there are no share ownership qualifications for directors unless so fixed by us in a general meeting. There are no other arrangements or understandings pursuant to which our directors are selected or nominated.

 

Security Ownership of Certain Beneficial Owners and Management

 

The following table sets forth certain information with respect to compensation for the year ended March 31, 2019 and 2018 earned by or paid to our chief executive officer and principal executive officer, our principal financial officer, and our other most highly compensated executive officers whose total compensation exceeded $100,000 (the “named executive officers”).

 

The following table sets forth information with respect to beneficial ownership of our Ordinary Shares as of the date of January 15, 2020 by:

 

Each person who is known by us to beneficially own more than 5% of our outstanding Ordinary Shares;

 

Each of our director, director nominees and named executive officers; and

 

All directors and named executive officers as a group.

 

In addition, the following table assumes that the over-subscription option has not been exercised.

 

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Our Company is authorized to issue unlimited Ordinary Shares of $0.001 par value per share. The number and percentage of Ordinary Shares beneficially owned before the offering are based on 27,728,081 Ordinary Shares issued and outstanding as of January 15, 2020. Information with respect to beneficial ownership has been furnished by each director, officer or beneficial owner of more than 5% of our Ordinary Shares. Beneficial ownership is determined in accordance with the rules of the SEC and generally requires that such person have voting or investment power with respect to securities. In computing the number of Ordinary Shares beneficially owned by a person listed below and the percentage ownership of such person, Ordinary Shares underlying options, warrants or convertible securities held by each such person that are exercisable or convertible within 60 days of January 15, 2020 are deemed outstanding, but are not deemed outstanding for computing the percentage ownership of any other person. Except as otherwise indicated in the footnotes to this table, or as required by applicable community property laws, all persons listed have sole voting and investment power for all Ordinary Shares shown as beneficially owned by them. Unless otherwise indicated in the footnotes, the address for each principal shareholder is in the care of our Company at 178 Taidong Rd North, Taizhou, Jiangsu, China. As of January 15, 2020, we have 41 shareholders of record.

 

   Ordinary Shares
Beneficially Owned
As of January 15, 2020
 
   Number   Percent 
Directors and Executive Officers:        
Feng Zhou (1)   8,500,000    30.39%
Yao Shi   0      
Jingzhen Deng   0      
Jun Zheng   0      
Junsong Li   0      
Tulin Lu   0      
Wenwei Fan   0      
All directors and executive officers as a group (7 persons)   8,500,000    30.39%
5% Shareholders:          
Xuetong Sun (2)   1,900,000    6.79%
Hao Xia (3)   1,900,000    6.79%
Yin Shuai (4)   1,900,000    6.79%

 

(1)Feng Zhou is the 100% owner of Feng Zhou Management Limited and therefore shall be deemed as the beneficial owner of shares held by such entity.

 

(2)Xuetong Sun is the 100% owner of Suxuantang Medicine Healthcare Limited and therefore shall be deemed as the beneficial owner of shares held by such entity.

 

(3)Hao Xia is the 100% owner of Suxuantang Pharmaceutical Trading Limited and therefore shall be deemed as the beneficial owner of shares held by such entity.

 

(4)Yin Shuai is the 100% owner of SXT Investment Management Ltd and therefore shall be deemed as the beneficial owner of shares held by such entity.

 

We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our Company. 

 

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Related Party Transactions

 

Contractual Arrangements

 

For a description of the contractual arrangements among WFOE, Taizhou Suxantang and the shareholders of Taizhou Suxuantang, see “Our Corporate History and Structure.” See also “Risk Factors—Risks Related to Our Corporate Structure.”

 

Material Transactions with Related Parties

 

During the year ended March 31, 2019 and 2018 the Company generated revenue of $8,942 and $681,280, respectively, from sales transactions with Taizhou Jiutian Pharmaceutical Co. Ltd.

 

During the year ended March 31, 2019 and 2018, the Company generated revenue of zero and $635,756 respectively, from sales transactions with Taizhou Su Xuan Tang Chinese Medicine Clinic.

 

During the year ended March 31, 2019 and 2018, the Company generated revenue of 203,213 and zero respectively, from sales transactions with Taizhou Su Xuan Tang Chinese hospital Co.Ltd.

 

During the year ended March 31, 2019 and 2018 the Company borrowed from Feng Zhou and Jiangsu Health Pharmaceutical Investment Co., Ltd in the amount of $2,482,349 and zero, respectively, which are non-interest bearing and repaid on demand.

 

During year ended March 31, 2019, the Company provided financial guarantee services for Taizhou Jiutian Pharmaceutical Co. Ltd. in one bank borrowing of $454,471 (equivalent of RMB 3,050,000) for one-year period starting from April 23, 2018, and the other of $548,345 (equivalent of RMB 3,680,000) for a one-year period starting from May 3, 2018. The Company was obliged to pay on behalf the related party the principal, interest, penalty and other expenses if the related party defaults in payment. The Company did not charge financial guarantee fees over Taizhou Jiutian Pharmaceutical Co. Ltd.

 

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PROPOSAL NO. 2 — RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

The Audit Committee has selected ZH CPA, LLC to serve as the independent registered public accounting firm of the Company for the fiscal year ending March 31, 2020.

 

We are asking our Shareholders to ratify the selection of ZH CPA as our independent registered public accounting firm. In the event our Shareholders fail to ratify the appointment, the Audit Committee may reconsider this appointment.

 

We have been advised by ZH CPA that neither the firm nor any of its associates had any relationship during the last fiscal year with our company other than the usual relationship that exists between independent registered public accountant firms and their clients.  Representatives of ZH CPA are not expected to attend the Meeting in person and therefore are not expected to be available to respond to any questions.  As a result, representatives of ZH CPA will not make a statement at the Meeting.

 

Principal Accountant Fees and Services

 

The following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered by our principal external auditors, for the periods indicated.

 

  

Year Ended

March 31, 
2019

  

Year Ended

March 31, 
2018
 

 
         
Audit fees(1)  $206,000   $155,000 
Audit related fees(2)   -      
Tax fees(3)   -    - 
All other fees(4)   -    - 
TOTAL  $206,000   $155,000 

  

(1) “Audit fees” means the aggregate fees billed for each of the fiscal years for professional services rendered by our principal accountant for the audit of our annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years.
   
(2) “Audit related fees” means the aggregate fees billed for each of the fiscal years for assurance and related services by our principal accountant that are reasonably related to the performance of the audit or review of our financial statements and are not reported under paragraph (1).

 

(3) “Tax Fees” represents the aggregate fees billed in each of the fiscal years listed for the professional tax services rendered by our principal auditors.

 

(4) “All Other Fees” represents the aggregate fees billed in each of the fiscal years listed for services rendered by our principal auditors other than services reported under “Audit fees,” “Audit-related fees” and “Tax fees.”

 

The policy of our audit committee and our board of directors is to pre-approve all audit and non-audit services provided by our principal auditors, including audit services, audit-related services, and other services as described above, other than those for de minimis services which are approved by the audit committee or our board of directors prior to the completion of the services.

 

Policies and Procedures Relating to Approval of Services by Our Independent Registered Public Accountants

 

The Audit Committee is solely responsible for the approval in advance of all audit and permitted non-audit services to be provided by our independent registered public accounting firms (including the fees and other terms thereof), subject to the de minimus exceptions for non-audit services provided by Section 10A(i)(1)(B) of the Exchange Act, which services are subsequently approved by the Audit Committee prior to the completion of the audit. None of the fees listed above are for services rendered pursuant to such de minimus exceptions.

 

The Audit Committee of our Board of Directors has established its pre-approval policies and procedures, pursuant to which the Audit Committee approved the foregoing audit, tax and non-audit services provided by ZH CPA in 2020. Consistent with the Audit Committee’s responsibility for engaging our independent auditors, all audit and permitted non-audit services require pre-approval by the Audit Committee. The full Audit Committee approves proposed services and fee estimates for these services. One or more independent directors serving on the Audit Committee may be delegated by the full Audit Committee to pre-approve any audit and non-audit services. Any such delegation shall be presented to the full Audit Committee at its next scheduled meeting. Pursuant to these procedures, the Audit Committee approved the foregoing audit services provided by ZH CPA.

 

Vote Required

 

Proposal No. 2 will be approved if a majority of the total votes properly cast in person or by proxy at the Meeting by the holders of Ordinary Shares vote “FOR” the proposal. Abstentions and broker non-votes will have no effect on the result of the vote.

 

Recommendation of the Board

 

The Board unanimously recommends that you vote all of your shares “FOR” the ratification of ZH CPA as independent registered public accountants as described in this Proposal No. 2. 

 

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PROPOSAL NO. 3 — ADVISORY VOTE ON EXECUTIVE COMPENSATION

 

Purpose

 

The SEC has adopted final rules requiring public companies to provide stockholders with periodic advisory (non-binding) votes on executive compensation, also referred to as “say-on-pay” proposals. We are presenting the following proposal, which gives you as a stockholder the opportunity to endorse or not endorse the compensation paid to our Principal Executive Officer and Principal Financial Officer (collectively, the “Named Executive Officers”), as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K (including the compensation tables and accompanying narrative discussion).

 

“RESOLVED, that the compensation paid to the Company’s Named Executive Officers for the year ended March 31, 2019, as disclosed pursuant to Item 402 of Regulation S-K, compensation tables and narrative discussion is hereby APPROVED.”

 

Pursuant to the Exchange Act and the rules promulgated thereunder, this vote will not be binding on the Board or the Compensation Committee and may not be construed as overruling a decision by the Board or the Compensation Committee, creating or implying any change to the fiduciary duties of the Board or the Compensation Committee or any additional fiduciary duty by the Board or the Compensation Committee or restricting or limiting the ability of stockholders to make proposals for inclusion in proxy materials related to executive compensation.  The Board and the Compensation Committee, however, may in their discretion take into account the outcome of the vote when considering future executive compensation arrangements.

 

Vote Required

 

Proposal No. 3 will be approved if a majority of the total votes properly cast in person or by proxy at the Meeting by the holders of Ordinary Shares vote “FOR” the proposal.

 

Recommendation of the Board

 

The Board unanimously recommends that you vote all of your shares “FOR” the compensation of the Company’s named executive officer as described in this Proposal No. 3. 

   

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PROPOSAL NO. 4 - ADVISORY VOTE ON FREQUENCY OF ADVISORY VOTES

ON EXECUTIVE COMPENSATION

 

Purpose

 

The SEC has also adopted final rules requiring public companies to hold an advisory (non-binding) vote on the frequency of holding say-on-pay votes. Accordingly, as required by the SEC’s rules, we are including this proposal to give our shareholders the opportunity to inform us as to how often they wish the Company to include a say-on-pay proposal, similar to Proposal No. 4, in our future proxy statements.

 

We are presenting the following proposal, which gives you, as a shareholder, the opportunity to inform us as to whether you wish us to hold an advisory (non-binding) vote on executive compensation once every (1) one year, (2) two years, or (3) three years, or you may abstain from voting on the proposal set forth in the following resolution.

 

“RESOLVED, that the shareholders determine, on an advisory basis, whether the preferred frequency of an advisory vote on the executive compensation of the Company’s Named Executive Officers as set forth in the Company’s Proxy Statement for the 2020 Annual Meeting of Shareholders should be every year, every two years, or every three years.”

 

The Board recommends that you vote for every three (3) years as the desired frequency for the Company to hold a non-binding, advisory vote of the shareholders on executive compensation. We believe this frequency is appropriate for the reasons set forth below:

 

1. Our equity compensation program is designed to support long-term value creation, and a vote every three years will allow the shareholders to better judge the equity compensation program in relation to our long-term performance. We strive to ensure management’s interests are aligned with shareholders’ interests to support long-term value creation through our equity compensation program. To that end, we may grant equity awards to vest over multi-year periods of service to encourage our Named Executive Officers to focus on long-term performance, and recommend a vote every three years, which would allow the equity compensation to be evaluated over a similar time-frame and in relation to long-term performance.

 

2. A vote every three (3) years will provide the Board and the Compensation Committee with the time to thoughtfully consider and thoroughly respond to shareholders’ sentiments and to implement any necessary changes in light of the timing required therefor. The Board and the Compensation Committee will carefully review changes to the executive compensation to maintain the effectiveness and credibility of the program, which is important for aligning interests and for motivating and retaining our Named Executive Officers.

 

3. We are open to input from shareholders regarding board and governance matters, as well as the equity compensation program. We believe that the shareholders’ ability to contact us and the Board at any time to express specific views on executive compensation holds us accountable to shareholders and reduces the need for and value of more frequent advisory votes on executive compensation.

 

Pursuant to the Exchange Act and the rules promulgated thereunder, this vote on the frequency of future advisory votes on named executive officer compensation is non-binding on the Board and its committees. This vote may not be construed as overruling a decision by the Board or its committees, creating or implying any change to the fiduciary duties of the Board or its committees or any additional fiduciary duty by the Board or its committees or restricting or limiting the ability of shareholders to make proposals for inclusion in proxy materials related to executive compensation. Notwithstanding the Board’s recommendation and the outcome of the vote on this matter, the Board may, in the future, decide to conduct advisory votes on a more or less frequent basis and may vary its practice based on factors such as discussions with shareholders and the adoption of material changes to compensation programs.

 

Vote Required

 

Approval of this proposal will require the affirmative vote of the holders of a majority of the shares of the Company’s Ordinary Shares represented in person or by proxy and entitled to vote at the Meeting.

 

Recommendation of the Board

 

The Board recommends that shareholders vote to have the non-binding vote on executive compensation occur every three years.

  

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PROPOSAL NO. 5 – APPROVAL AND ADOPTION OF THE CHARTER AMENDMENT

 

Our Board has adopted and deemed advisable and is recommending that our Shareholders approve and adopt proposed Charter Amendment to (i) declaring that filing an amendment to the Company’s Memorandum and Articles of Association to effectuate the Board Authority Change and the Quorum Change, and (ii) directing that a proposal to approve the Charter Amendment be submitted to the holders of our Ordinary Shares for their approval.

 

Procedure for Implementing the Charter Amendment

 

The Charter Amendment, if approved by our Shareholders, would become effective upon the filing (the “Effective Time”) of a certificate of amendment to our Memorandum and Articles of Association. The exact timing of the filing of the certificate of amendment that will effectuate the Board Authority Change and the Quorum Change.

 

Effect of the Charter Amendment on Shareholders of the Company

 

The Memorandum and Articles of Association of the Company currently provides that a majority of the shareholders can amend the Company’s authorized share capital and divide or combine Ordinary Shares. If the Board Authority Change is approved, the Board will be able to amend the share capital and conduct share division or combination when the Board deems necessary, for instance, as in case of in compliance with Nasdaq listing rules, in a timely manner and at a lower cost.

 

The Memorandum and Articles of Association of the Company currently provides that a majority of the shares entitled to vote shall be a quorum for the transaction of business at a shareholders’ meeting. The Charter Amendment, if approved by our Shareholders, would reduce the quorum required to one-third of the shares entitled to vote.

 

Lowering the quorum requirement will facilitate holding shareholder meetings to approve important matters necessary for the conduct of our business. When not enough shareholders vote, we may be forced to adjourn meetings multiple times and incur the expense of additional shareholder solicitations and proxy solicitors in order to obtain the shareholder vote necessary to hold a meeting.

    

Reason for the Charter Amendment

 

The Board deems that it is for the best interest of the Company and the Shareholders to approve the Board Authority Change because it will give the Company more flexibility and reduce the expenses for conducting share division and combination when the Board deems necessary.

  

We believe that our present quorum requirements do not provide us with the necessary flexibility to hold shareholder meetings. By reducing the Company’s quorum requirement to one-third of the shares entitled to vote, we will be able to more efficiently carry on the business of the Company by being able to hold a meeting of its shareholders more easily.

 

Vote Required

 

Proposal No. 5 will be approved if a majority of the total votes properly cast in person or by proxy at the Meeting by the holders of Ordinary Shares vote “FOR” the proposal. Abstentions and broker non-votes will have no effect on the result of the vote.

 

Unless marked to the contrary, the shares represented by the enclosed proxy card will be voted “FOR” the proposal.

 

Recommendation of the Board

 

The Board unanimously recommends that you vote all of your shares “FOR” the ratification of the Charter Amendment as described in this Proposal No. 5. 

 

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OTHER MATTERS

 

Our Board knows of no other matter to be presented at the Meeting. If any additional matter should properly come before the Meeting, it is the intention of the persons named in the enclosed proxy to vote such proxy in accordance with their judgment on any such matters.

 

OTHER INFORMATION

 

Deadline for Submission of Shareholder Proposals for 2021 Annual Meeting of Shareholders

 

For any proposal to be considered for inclusion in our proxy statement and form of proxy for submission to the Shareholders at our 2021 Annual Meeting of Shareholders, it must be submitted in writing and comply with the requirements of Rule 14a-8 of the Exchange Act. Such proposals must be received by the Company at its offices 178 Taidong Road North Taizhou, Jiangsu, People’s Republic of China, Attention: Chief Executive Officer, no later than June 12, 2020.

 

If we are not notified of a Shareholder proposal a reasonable time prior to the time we send our proxy statement for our 2020 annual meeting, then our Board will have discretionary authority to vote on the Shareholder proposal, even though the Shareholder proposal is not discussed in the proxy statement. In order to curtail any controversy as to the date on which a Shareholder proposal was received by us, it is suggested that Shareholder proposals be submitted by certified mail, return receipt requested, and be addressed to China SXT Pharmaceuticals, Inc., 178 Taidong Road North Taizhou, Jiangsu, People’s Republic of China, Attention: Chief Executive Officer. Notwithstanding, the foregoing shall not effectuate any rights of Shareholders to request inclusion of proposals in our proxy statement pursuant to Rule 14a-8 under the Exchange Act nor grant any Shareholder a right to have any nominee included in our proxy statement.

 

Proxy Solicitation

 

The solicitation of proxies is made on behalf of the Board and we will bear the cost of soliciting proxies.  The transfer agent and registrar for our Ordinary Shares, TranShare Securities Transfer and Registrar, as a part of its regular services and for no additional compensation other than reimbursement for out-of-pocket expenses, has been engaged to assist in the proxy solicitation.  Proxies may be solicited through the mail and through telephonic or telegraphic communications to, or by meetings with, Shareholders or their representatives by our directors, officers and other employees who will receive no additional compensation therefor. We may also retain a proxy solicitation firm to assist us in obtaining proxies by mail, facsimile or email from record and beneficial holders of shares for the Meeting. If we retain a proxy solicitation firm, we expect to pay such firm reasonable and customary compensation for its services, including out-of-pocket expenses.

 

We request persons such as brokers, nominees and fiduciaries holding stock in their names for others, or holding stock for others who have the right to give voting instructions, to forward proxy material to their principals and to request authority for the execution of the proxy.  We will reimburse such persons for their reasonable expenses.

 

Annual Report

 

The Annual Report is being sent with this Proxy Statement to each Shareholder and is available at www.proxyvote.com as well as on the SEC’s website at www.sec.gov.  The Annual Report contains our audited financial statements for the fiscal year ended March 31, 2019.  The Annual Report, however, is not to be regarded as part of the proxy soliciting material.

 

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Delivery of Proxy Materials to Households

 

Only one copy of this proxy statement and one copy of our Annual Report are being delivered to multiple registered Shareholders who share an address unless we have received contrary instructions from one or more of the Shareholders. A separate form of proxy and a separate notice of the Meeting are being included for each account at the shared address. Registered Shareholders who share an address and would like to receive a separate copy of our Annual Report and/or a separate copy of this proxy statement, or have questions regarding the householding process, may contact the Company’s transfer agent: TranShare Securities Transfer and Registrar, by calling (303) 662-1112, or by forwarding a written request addressed to TranShare Securities Transfer and Registrar, 2849 Executive Drive, Suite 200, Clearwater, Fl 33762. Promptly upon request, a separate copy of our Annual Report on Form 20-F and/or a separate copy of this proxy Statement will be sent. By contacting TranShare Securities Transfer and Registrar, registered Shareholders sharing an address can also (i) notify the Company that the registered Shareholders wish to receive separate annual reports to Shareholders, proxy statements and/or Notices of Internet Availability of Proxy Materials, as applicable, in the future or (ii) request delivery of a single copy of annual reports to Shareholders and proxy statements in the future if registered Shareholders at the shared address are receiving multiple copies.

 

Many brokers, brokerage firms, broker/dealers, banks and other holders of record have also instituted “householding” (delivery of one copy of materials to multiple Shareholders who share an address). If your family has one or more “street name” accounts under which you beneficially own shares of our Ordinary Shares, you may have received householding information from your broker, brokerage firm, broker/dealer, bank or other nominee in the past. Please contact the holder of record directly if you have questions, require additional copies of this proxy statement or our Annual Report or wish to revoke your decision to household and thereby receive multiple copies. You should also contact the holder of record if you wish to institute householding. 

 

Where You Can Find Additional Information

 

Accompanying this proxy statement is a copy of the Company’s Annual Report on Form 20-F for the year ended March 31, 2019. Such Report constitutes the Company’s Annual Report to its Shareholders for purposes of Rule 14a-3 under the Exchange Act. Such Report includes the Company’s audited financial statements for the 2019 fiscal year and certain other financial information, which is incorporated by reference herein. The Company is subject to the informational requirements of the Exchange Act and in accordance therewith files reports, proxy statements and other information with the SEC. Such reports, proxy statements and other information are available on the SEC’s website at www.sec.gov. Shareholders who have questions in regard to any aspect of the matters discussed in this proxy statement should contact Feng Zhou, our Chief Financial Officer, at 178 Taidong Road North Taizhou, Jiangsu, People’s Republic of China, or by telephone on 86-52386298290. 

 

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Annex A

 

Certificate Of Amendment of Memorandum and Articles of Association

 

BVI COMPANY NUMBER: 1949664

 

 

 

 

TERRITORY OF THE BRITISH VIRGIN ISLANDS

 

THE BVI BUSINESS COMPANIES ACT, 2004

 

 

 

 

 

 

 

 

Memorandum and Articles of Association of

 

China SXT Pharmaceuticals, Inc.

 

 

 

 

 

 

 

 

Incorporated on the 4th day of July, 2017

 

Amended and restated on the _____ day of __________ 2020

 

INCORPORATED IN THE BRITISH VIRGIN ISLANDS

 

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China SXT Pharmaceuticals, Inc.

 

 

 

TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE BVI BUSINESS COMPANIES ACT, 2004

 

Amended and Restated
Memorandum of Association

 

Amended and restated on the _____ day of __________ 2020

 

1.Company Name

 

The name of the Company is China SXT Pharmaceuticals, Inc. (the “Company”).

 

2.Change of Name

 

2.1.The Company may by Resolution of Shareholders or Resolution of Directors resolve to change its name and make application to the Registrar of Corporate Affairs in the approved form to give effect to such change of name in accordance with section 21 of the Act.

 

3.Type of Company

 

3.1.The Company is a company limited by Shares.

 

4.Registered Office and Registered Agent

 

4.1.The first registered office of the Company will be situated at the offices of Sertus Incorporations (B VI) Limited, Sertus Chambers, P.O. Box 905, Quastisky Building, Road Town, Tortola, British Virgin Islands.

 

4.2.The first registered agent of the Company will be Sertus Incorporations (BVI) Limited of Sertus Chambers, P.O. Box 905, Quastisky Building, Road Town, Tortola, British Virgin Islands.

 

4.3.The Company may by Resolution of Shareholders or by Resolution of Directors, change the location of its registered office or change its registered agent.

 

4.4.Any change of registered office or registered agent will take effect on the registration by the Registrar of a notice of the change filed by the existing registered agent or a legal practitioner in the British Virgin Islands acting on behalf of the Company.

 

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4.5.The registered agent shall:

 

(a)act on the instructions of the Directors if those instructions are contained in a Resolution of Directors and a copy of the Resolution of Directors is made available to the registered agent; and

 

(b)recognise and accept the appointment or removal of a Director or Directors by Shareholders.

 

5.Objects

 

For the purposes of section 9(4) of the Act, there are no limitations on the business that the Company may carry on.

 

6.Capacity and Powers of Company

 

6.1.In accordance with section 27 of the Act, the Company is a legal entity in its own right separate from its Shareholders and continues in existence until it is dissolved.

 

6.2.Subject to the Act and any other British Virgin Islands legislation, the Company has, irrespective of corporate benefit:

 

(a)full capacity to carry on or undertake any business or activity, do any act or enter into any transaction; and

 

(b)for the purposes of paragraph (a), full rights, powers and privileges.

 

7.Limited Liability

 

7.1.The liability of a Shareholder to the Company, as Shareholder, is limited to:

 

(a)any amount unpaid on a Share held by the Shareholder;

 

(b)(where applicable) any liability expressly provided for in this Memorandum or the Articles; and

 

(c)any liability to repay a distribution under section 58(1) of the Act.

 

7.2.A Shareholder has no liability, as a Shareholder, for the liabilities of the Company.

 

8.Number and Classes of Shares

 

8.1.The Company is authorised to issue an unlimited number of Shares, consisting of a single Class of ordinary Shares with a par value of US$0.001 each, consisting of such numbers and such Series, as the Directors may determine.

 

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8.2.The Company may issue Fractional Shares. A Fractional Share shall have the corresponding fractional rights, obligations and liabilities of a whole Share of the same Class. If more than one fraction of a Share of the same Class is issued to or acquired by the same Shareholder such fractions shall be accumulated.

 

9.Rights, Privileges, Restrictions and Conditions of Shares

 

9.1.All ordinary Shares shall (in addition and subject to any rights, privileges, restrictions and conditions attaching to any of the Shares as provided for elsewhere in this Memorandum or in the Articles):

 

(a)have the right to one vote on any Resolution of Shareholders;

 

(b)have equal rights with regard to dividends; and

 

(c)have equal rights with regard to distributions of the surplus assets of the Company.

 

9.2.For the purposes of section 9 of the Act, any rights, privileges, restrictions and conditions attaching to any of the Shares as provided for in the Articles are deemed to be set out and stated in full in this Memorandum.

 

10.Variation of Class Rights and Privileges

 

10.1.

If at any time the Company is authorised to issue Shares of 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 at least one third of the issued Shares of that Class or with the sanction of a resolution passed at a meeting of the holders of such Class of Shares by the holder or holders of at least one third of such Shares present in person or by proxy at such meeting. To the extent not inconsistent with this paragraph, the provisions of the Articles relating to meetings of Shareholders shall apply to every such meeting of the holders of one Class of Shares except that the necessary quorum shall be one 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.

 

10.2.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 the issue of the Shares of that Class, be deemed to be varied by the creation or issue of further Shares, whether ordinary or preferred ranking pari passu therewith.

 

10.3.For the purposes of a separate Class meeting, the Directors may treat two or more or all the Classes of Shares as forming one Class of Shares if the Directors consider that such Class of Shares would be affected in the same way by the proposals under consideration, but in any other case shall treat them as separate Classes of Shares.

 

11.Changes to Authorised Shares

 

11.1.The Company may by a Resolution of Shareholders or by a Resolution of Directors amend the Memorandum to increase or reduce the number of Shares the Company is authorised to issue.

 

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11.2.The Company may by a Resolution of Directors or of the Shareholders:

 

(a)divide the Shares, including issued Shares, of a Class or Series into a larger number of Shares of the same Class or Series; or

 

(b)combine the Shares, including issued Shares, of a Class or Series into a smaller number of Shares of the same Class or Series,

 

provided, however, that where Shares with a par value are divided or combined under (a) or (b) of this Article, the aggregate par value of the new Shares must be equal to the aggregate par value of the original Shares.

 

12.Registered Shares

 

12.1.The Company shall issue registered Shares only.

 

12.2.The Company is not authorised to issue bearer Shares, convert registered Shares to bearer Shares or exchange registered Shares for bearer Shares.

 

13.Transfer of Shares

 

Subject to the provisions of this Memorandum and the Articles, Shares in the Company may be transferred.

 

14.Amendment of Memorandum and Articles of Association

 

14.1.The Company may amend its Memorandum or Articles by a Resolution of Shareholders or by a Resolution of Directors except that the Directors have no power to amend the Memorandum or the Articles:

 

(a)to restrict the rights or powers of the Shareholders to amend the Memorandum or the Articles;

 

(b)to change the percentage of Shareholders required to pass a Resolution of Shareholders to amend the Memorandum or the Articles;

 

(c)in circumstances where the Memorandum or the Articles cannot be amended by the Shareholders; or

 

(d)to change the provisions of paragraphs 9.1 and/or 10.1 of the Memorandum.

 

15.Effect of Memorandum and Articles of Association

 

15.1.In accordance with section 11(1) of the Act, this Memorandum and the Articles are binding as between:

 

(a)the Company and each Shareholder of the Company; and

 

(b)each Shareholder of the Company.

 

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15.2.In accordance with section 11(2) of the Act, the Company, the board of Directors, each Director and each Shareholder of the Company has the rights, powers, duties and obligations set out in the Act except to the extent that they are negated or modified, as permitted by the Act, by this Memorandum or the Articles.

 

15.3.In accordance with section 11(3) of the Act, this Memorandum and the Articles have no effect to the extent that they contravene or are inconsistent with the Act.

 

16.Definitions

 

Words used in this Memorandum and not defined herein shall have the meanings set out in the Articles.

 

We, Sertus Incorporations (BVI) Limited of Sertus Chambers, P.O. Box 905, Quastisky Building, Road Town, Tortola, British Virgin Islands in our capacity as registered agent for the Company hereby apply to the Registrar of Corporate Affairs for the incorporation of the Company this 4th day of July, 2017.

 

 

 

 

Incorporator

 

(Sd.) Alyson Parker I Ann Penn

 

Authorised Signatories

 

Sertus Incorporations (BVI) Limited

 

 

 

 

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China SXT Pharmaceuticals, Inc.

 

 

 

TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE BVI BUSINESS COMPANIES ACT, 2004

 

Amended and Restated
Articles of Association

 

Amended and restated on the _____ day of __________ 2020

 

1.Preliminary

 

1.1.The following shall comprise the Articles of Association of China SXT Pharmaceuticals, Inc. (the “Company”).

 

1.2.In these Articles:

 

(a)the following terms shall have the meanings set opposite if not inconsistent with the subject context:

 

Act means the BVI Business Companies Act, 2004, including any modification, amendment, extension, re-enactment or renewal thereof and any regulations made thereunder;
   
Articles means these articles of association of the Company, as amended and/or restated from time to time;
   
Auditors means the persons for the time being performing the duties of auditors of the Company;
   
Chairman means the Chairman of the board of Directors from time to time;
   
Class” or “Classes means any class or classes of Shares as may from time to time be issued by the Company;
   
Clearing House means a clearing house recognised by the laws of a jurisdiction in which the Shares of the Company (or depository receipts therefor) are listed or quoted on a stock exchange or interdealer quotation system in such jurisdiction.
   
Company means the above-named Company;
   
debenture includes debenture stock, mortgages, bonds and any other securities of the Company whether constituting a charge on the assets of the Company or not;”

 

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Designated Stock means the Nasdaq Global Market or such other exchange or
   
Exchange interdealer system upon which the Company’s securities are listed or quoted;
   
Directors means the persons for the time being occupying the position of directors of the Company, or as the case may be, the directors assembled as a board or as a committee thereof, and the term a “Director” shall be construed accordingly and shall, where the context admits, include an alternate Director;
   
Distribution means, in relation to a distribution by the Company to a Shareholder: the direct or indirect transfer of an asset, other than Shares, to or for the benefit of the Shareholder; or the incurring of a debt to or for the benefit of the Shareholder, in relation to the Shares held by the Shareholder, and whether by means of the purchase of an asset, the purchase, redemption or other acquisition of Shares, a transfer of indebtedness or otherwise, and includes a dividend;
   
Fractional Share means a fraction of a Share;
   
Issue Price means the total consideration payable for the issue of Shares including for the avoidance of doubt both the par value and any premium payable;
   
Memorandum means the memorandum of association of the Company, as amended and/or restated from time to time;
   
Month means calendar month;
   
“NASDAQ” means the National Association of Securities Dealers Automated Quotations;
   
Officer means any natural person or corporation appointed by the Directors as an officer of the Company and may include a Chairman of the board of Directors, a vice Chairman of the board of Directors, a president, one or more vice presidents, secretaries and treasurers and such other officers as may from time to time be deemed desirable but shall exclude any auditor appointed by the Company;
   
person means any natural person, firm, company, joint venture, partnership, corporation, association or other entity (whether or not having a separate legal personality) or any of them as the context so requires;

 

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Register of Directors means the register of the Directors of the Company required to be kept pursuant to the Act;
   
Register of Members means the register of the Shareholders of the Company required to be kept pursuant to the Act;
   
Registered Agent means the registered agent of the Company from time to time, as required by the Act;
   
Registered Office means the registered office of the Company from time to time, as required by the Act;
   
Resolution of Directors”  means, subject to the provisions of this Memorandum and the Articles, a resolution:

 

(i) approved at a duly convened and constituted meeting of Directors or of a committee of Directors, by the affirmative vote of a simple majority of the Directors present at such meeting who voted and did not abstain; or
   
(ii) consented to in writing or by telex, telegram, cable, facsimile or other written electronic communications by a simple majority of the Directors (or a sole Director) or a simple majority of the members of a committee of Directors (or a sole member), as the case may be, in one or more instruments each signed by one or more of the Directors and the effective date of the resolution so adopted shall be the date on which the instrument, or the last of such instruments, if more than one, is executed,

 

and where a Director is given more than one vote in any circumstances, he shall in the circumstances be counted for the purposes of establishing a majority, by the number of votes he casts;

 

Resolution of Shareholders”  subject to the provisions of this Memorandum and the Articles, a resolution:

 

(i) passed by a simple majority, or such larger majority as may be specified in the Memorandum or these Articles or is required by law, of the votes attaching to the Shares of such Shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a meeting of Shareholders of the Company and where a poll is taken regard shall be had in computing a majority to the number of votes to which each Shareholder is entitled; or

 

A-9

 

(ii) approved in writing by more than 50 percent, or such larger majority as may be specified in the Memorandum or these Articles, of such Shareholders entitled to vote at a meeting of Shareholders of the Company (or a sole Shareholder) in one or more instruments each signed by one or more of the Shareholders and the effective date of the resolution so adopted shall be the date on which the instrument, or the last of such instruments, if more than one, is executed;

 

Seal means the common seal of the Company and includes every duplicate seal;
   
Secretary includes an assistant secretary and any persons appointed to perform the duties of the secretary of the Company;
   
“Series means a division of a Class as may from time to time be issued by the Company
   
“Share means a Share in the Company of any or all Classes or Series as the context may require, and shall, where the context so permits, includes fractions of a Share in the Company.  For the avoidance of doubt in these Articles the expression “Share” shall include any Fractional Share;
   
Shareholder means a person whose name is entered as a holder of one or more Shares in the Register of Members;
   
signed means bearing a signature or representation of a signature affixed by mechanical means;
   
Solvency Test means the solvency test prescribed by section 56 of the Act and set out in Articles;
   
Treasury Share means Shares that were previously issued but were purchased, redeemed or otherwise acquired by the Company and not cancelled.

 

(b)words importing the singular include the plural and vice versa;

 

(c)words importing any gender include all genders;

 

(d)words importing persons include corporations as well as any other legal or natural person;

 

(e)reference to a statutory enactment shall include reference to any amendment or re-enactment thereof for the time being in force;

 

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(f)expressions referring to writing shall, unless the contrary intention appears, be construed as including references to printing, lithography, photography and other modes of representing or reproducing words in a visible form and” include all modes of representing or reproducing words in visible form, including in the form of an electronic communication or record;

 

(g)references to provisions of any law or regulation shall be construed as references to those provisions as amended, modified, re-enacted or replaced;

 

(h)reference to any determination by the Directors shall be construed as a determination by the Directors in their sole and absolute discretion and shall be applicable either generally or in any particular case;

 

(i)any phrase commencing with the words “including”, “include”, “in particular” or any similar expression shall be deemed to be followed by the words “without limitation;

 

(j)reference to “in writing” shall be construed as written or represented by any means reproducible in writing, including any form of print, lithograph, email, facsimile, photograph or telex or represented by any other substitute or format for storage or transmission for writing or partly one and partly another;

 

(k)headings are inserted for reference only and shall be ignored in construing the Articles;

 

(l)subject as aforesaid, any words or expressions defined in the Act shall, if not inconsistent with the subject or context hereof, bear the same meanings as in the Articles;

 

(m)the word “may” shall be construed as permissive and the word “shall” shall be construed as imperative; and

 

(n)where any period to lapse under the provisions of these Articles is counted by a number of days, the first day of such period counted shall be the day immediately after the notice is given or deemed to be given and the period of such notice shall be deemed to be complete and final at the end of the last day of such period. The relevant then permitted actions shall be effected the day immediately following such last day.

 

2.Commencement of Business

 

2.1.The business of the Company may be commenced at any time after incorporation as the Directors shall see fit, notwithstanding that part only of its Shares may have been allotted.

 

2.2.The expenses incurred in the formation of the Company and in connection with the offer for subscription and issue of Shares shall be paid by the Company.

 

2.3.The Company, in addition to its Registered Office, may establish and maintain such other offices, places of business and agencies in the British Virgin Islands and elsewhere as the Directors may from time to time determine.

 

3.Amendment of Articles of Association

 

Subject to any other provision of these Articles, these Articles may be amended in the manner prescribed in the Memorandum, so long as such alteration does not disparately impact the members’ voting rights.

 

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4.Issue of Shares

 

4.1.Subject to the Act, the Memorandum and these Articles, all Shares for the time being unissued shall be under the control of the Directors who may:

 

(a)issue, allot and dispose of the same to such persons, in such manner, on such terms as they may from time to time determine; and

 

(b)grant options with respect to such Shares and issue warrants or similar instruments with respect thereto; and,

 

for such purposes, the Directors may reserve an appropriate number of Shares for the time being unissued.

 

4.2.Subject to the Memorandum and these Articles and provided that a corresponding amendment is made to paragraph 9 of the Memorandum to reflect the resulting Classes of Shares, the Directors may authorise the division of Shares into any number of Classes and Series and the different Classes and Series shall be authorised, established and designated (or re-designated as the case may be) as determined by a Resolution of Directors or by a Resolution of Shareholders.

 

4.3.The pre-emption rights set out in section 46 of the Act shall not apply to the Company.

 

4.4.The Company may insofar as may be permitted by law, pay a commission in any form to any person in consideration of his subscribing or agreeing to subscribe whether absolutely or conditionally for any Shares. The Company may also pay such brokerage as may be lawful on any issue of Shares.

 

4.5.The Directors may refuse to accept any application for Shares, and may accept any application in whole or in part, for any reason or for no reason.

 

4.6.The Company may treat the holder of a Share as named in the Register of Members as the only person entitled to:

 

(a)exercise any voting rights attaching to the Share;

 

(b)receive notices;

 

(c)receive a Distribution; and

 

(d)exercise other rights and powers attaching to the Share.

 

4.7.The Company may, subject to the terms of the Act, the rules of the applicable Designated Stock Exchange on which the Shares are then traded, and these Articles, issue bonus Shares, partly paid Shares and nil paid Shares.

 

4.8.Shares may, subject to the terms of the Act and these Articles, be issued for consideration in any form or a combination of forms, including money, a promissory note or other written obligation to contribute money or property, real property, personal property (including goodwill and know how), services rendered or a contract for future services. Shares may be issued for such amount of consideration paid in such manner as the Directors may from time to time by Resolution of Directors determine, except that in the case of Shares issued with a par value, the consideration paid or payable shall not be less than the par value.

 

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4.9.When the Issue Price in respect of the Share has been paid or the Share has been issued as a bonus Share, that Share is for all purposes fully paid, but where the Share is not fully paid on issue or is a bonus Shares, the Share is subject to forfeiture in the manner prescribed in these Articles.

 

4.10.Before issuing Shares for a consideration which is in whole or in part other than money, the Directors shall by a Resolution of Directors state:

 

(a)the amount to be credited for the issue of the Shares; and

 

(b)their determination of the reasonable present cash value of any non-money consideration for the issue; and

 

(a)that, in their opinion, the present cash value of the non-cash consideration (and cash consideration, if any) is not less than the amount to be credited for the issue of the Shares.

 

1.2.A Share issued by the Company upon conversion of, or in exchange for, another Share or a debt obligation or other security in the Company, shall be treated for all purposes as having been issued for cash equal to the value of the consideration received or deemed to have been received by the Company in respect of the other Share, debt obligation or security.

 

2.Treasury Shares

 

2.1.Shares that the Company purchases, redeems or otherwise acquires pursuant to these Articles shall be cancelled immediately or held as Treasury Shares in accordance with the Act and Article 2.2 below.

 

2.2.Shares may only be purchased, redeemed or otherwise acquired and held as Treasury Shares where, when aggregated with the number of Shares of the same Class already held by the Company as Treasury Shares, the total number of Treasury Shares does not exceed 50 percent of the Shares of that Class previously issued by the Company, excluding those Shares that have been cancelled.

 

2.3.Where and for so long as Shares are held by the Company as Treasury Shares, all rights and obligations attaching to such Shares are suspended and shall not be exercised by or against the Company.

 

2.4.Treasury Shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company may by Resolution of Directors determine.

 

3.Redemption, Purchase and Surrender of Shares

 

3.1.Subject to any limitations or procedures imposed by the Act, the Memorandum and these Articles, including the Solvency Test where applicable, the Company may purchase, redeem or otherwise acquire and hold its own Shares in such manner and upon such other terms as the Directors may agree with the relevant Shareholder(s) save that the Company may not purchase, redeem or otherwise acquire its own Shares without the consent of Shareholders whose Shares are to be purchased, redeemed or otherwise acquired unless the Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the Shares without their consent.

 

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3.2.The Company may acquire its own fully paid Share or Shares for no consideration by way of surrender of the Share or Shares to the Company by the Shareholder holding the Share or Shares. Any surrender of a Share or Shares under this Article 3.2 shall be in writing and signed by the Shareholder holding the Share or Shares.

 

3.3.Sections 60 (Process for acquisition of own Shares), 61 (Offer to one or more Shareholders) and 62 (Shares redeemed otherwise than at the option of company) of the Act shall not apply to the Company.

 

3.4.The purchase, redemption or other acquisition by the Company of one or more of its own Shares is deemed not to be a distribution where:

 

(a)the Company redeems the Share or Shares pursuant to a right of a Shareholder to have his Shares redeemed or to have his Shares exchanged for money or other property of the Company;

 

(b)the Company purchases, redeems or otherwise acquires the Share or Shares by virtue of the provisions of section 176 or 179 of the Act ; or

 

(c)the company acquires its own fully paid Share or Shares pursuant to section 59(1A) of the Act.

 

3.5.The Directors may, when making a payment in respect of the redemption or purchase of Shares, make such payment in cash or in specie (or partly in one and partly in the other).

 

3.6.Upon the date of redemption or purchase of a Share, the holder shall cease to be entitled to any rights in respect thereof (excepting always the right to receive (i) the price therefor and (ii) any dividend which had been declared in respect thereof prior to such redemption or purchase being effected) and accordingly his name shall be removed from the Register of Members with respect thereto and the Share shall be cancelled.

 

4.Non-Recognition of Trusts

 

Except as required by law or otherwise provided by these Articles, no person shall be recognised by the Company as holding any Shares upon any trust, and the Company shall not be bound by or be compelled in any way to recognise (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 any other rights in respect of any Share except an absolute right to the entirety thereof in the registered holder or in the case of a Share warrant or bearer Share in the bearer of the warrant or Share certificate for the time being.

 

5.Certificates for Shares

 

5.1.Share certificates shall generally not be issued, unless the Directors determine to so issue either generally or in a specific circumstance. A certificate may be issued under Seal or executed in such other manner as the Directors may prescribe. 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 several joint holders shall be sufficient delivery to all such holders.

 

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5.2.Certificates representing Shares shall be in such form as shall be determined by the Directors. Such certificates shall be signed by such person or persons as are authorised from time to time by the Directors or by the Articles. All certificates for Shares shall be consecutively numbered or otherwise identified. 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. All certificates surrendered to the Company for transfer shall be cancelled and no new certificate shall be issued until the former certificate for a like number of Shares shall have been surrendered and cancelled. Notwithstanding the foregoing, if a Share certificate is defaced, lost or destroyed, it may be renewed on such terms (if any) as to evidence and indemnity and the payment of out of pocket expenses of the Company incurred in investigating evidence as the Directors think fit.

 

6.Joint Ownership of Shares

 

If several persons are registered as joint holders of any Shares they shall be severally as well as jointly liable for any liability in respect of such Shares, but the first named upon the Register of Members shall, as regards service or notices, be deemed the sole owner thereof. Any of such persons may give effectual receipt for any dividend or other distribution.

 

7.Lien

 

7.1.The Company shall have a first and paramount lien and charge on every Share for all monies, whether presently payable or not, called or payable at a fixed time in respect of that Share, and the Company shall also have a first and paramount lien and charge on all Shares standing registered in the name of a Shareholder (whether solely or jointly with others) for all monies, liabilities or engagements presently owing by him or his estate to the Company either alone or jointly with any other person, whether a Shareholder 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 Company’s lien and charge, if any, on a Share shall extend to all dividends or other monies payable in respect thereof. The registration of a transfer of any such Share shall operate as a waiver of the Company’s lien and charge (if any) thereon.

 

7.2.The Company may sell, in such manner as the Directors think fit, any Shares on which the Company has a lien and charge, but no sale shall be made unless a sum in respect of which the lien and charge 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 and charge 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.

 

7.3.To give effect to any such sale the Directors may authorise 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.

 

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7.4.The proceeds of the sale shall be received by the Company and applied in payment of such part of the amount in respect of which the lien and charge exists as is presently payable, and the residue, if any, shall (subject to a like lien and charge for sums not presently payable as existed upon the Shares before the sale) be paid to the person entitled to the Shares prior to the sale.

 

8.Transfer of Shares

 

8.1.Subject to these Articles, Shares are transferred by a written instrument of transfer, PROVIDED HOWEVER, where Shares are listed on a Designated Stock Exchange, the shares may be transferred without the need for a written instrument of transfer if the transfer is carried out in accordance with the laws, rules, procedures and other requirements applicable to shares registered on the Designated Stock Exchange and subject to the Company’s Memorandum and the Articles and the Act and any regulations thereunder.

 

8.2.Every instrument of transfer shall be provided to the Company by sending it to its Registered Office for registration, accompanied by the certificate (if any) covering the Shares to be transferred and such other evidence as the Directors may require to prove the title of the transferor to, or his right to transfer, the Shares.

 

8.3.The instrument of transfer of any Share (which need not be under Seal) shall be signed by or on behalf of the transferor and, unless the Share is fully paid up or the transferee otherwise consents or agrees thereto, by or on behalf of the transferee. The transferor shall be deemed to remain the holder of the Share until the name of the transferee is entered in the Register of Members in respect thereof.

 

8.4.Subject to such of the restrictions of the Articles as may be applicable, any Shareholder may transfer all or any of his Shares by instrument in writing in any usual or common form or any other form which the Directors may approve. Upon every transfer of Shares the certificate held by the transferor shall be given up to be cancelled and shall forthwith be cancelled accordingly and a new certificate shall be issued without charge to the transferee in respect of the Shares transferred to him, and if any of the Shares included in the certificate so given up shall be retained by the transferor a new certificate in respect thereof shall be issued to him without charge. The Company shall also retain the transfer.

 

8.5.The Directors may, in their absolute discretion and without assigning any reason therefor, refuse to register any transfer of any Share, whether or not it is a fully paid up Share as to Issue Price.

 

8.6.Without limitation, the Directors may decline to recognise any instrument of transfer if:

 

(a)the instrument of transfer is not accompanied by the certificate covering Shares to which it relates, and/or such other evidence as the Directors may require to prove the title of the transferor to, or his right to transfer, the Shares; or

 

(b)the instrument of transfer is in respect of more than one class of Share.

 

8.7.If the Directors refuse to register a transfer they shall within two Months after the date on which the transfer was lodged with the Company send to the transferee notice of the refusal.

 

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8.8.The registration of transfers may be suspended at such times 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 thirty days in any year.

 

9.Transmission of Shares

 

9.1.In case of the death of a Shareholder, 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 recognised by the Company as having any title to his interest in the Shares but nothing herein contained shall release the estate of a deceased holder from any liability in respect of any Share which had been held by him solely or jointly with other persons.

 

9.2.Any person becoming entitled to a Share in consequence of the death or bankruptcy of a Shareholder may, upon such evidence being produced as may from time to time be properly required by the Directors to show his title to the Share, 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 aforesaid Shareholder 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 Shareholder before his death or bankruptcy, as the case may be.

 

9.3.A person becoming entitled to a Share by reason of the death or bankruptcy of a Shareholder 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 Shareholder in respect of the Share, be entitled in respect of it to exercise any right conferred by Shareholding in relation to meetings of the Company; provided always 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 fourteen 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.

 

10.Forfeiture of Shares

 

10.1.Where Shares are not fully paid or deemed fully paid on issue or have been issued subject to forfeiture, the following provisions shall apply.

 

10.2.Written notice of a call specifying a date for payment to be made in respect of a Share shall be served on a Shareholder who defaults in making payment in respect of that Share.

 

10.3.The aforesaid notice shall name a further day (not earlier than the expiration of fourteen days from the date of service 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 the payment is was made will be liable to be forfeited.

 

10.4.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 and cancelled, by a resolution of the Directors to that effect. Such forfeiture shall include all dividends declared or other monies due in respect of the forfeited Shares and not actually paid before forfeiture.

 

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10.5.The Company is under no obligation to refund any moneys to the member whose Shares have been forfeited and cancelled pursuant to Article 10.4 immediately above.

 

10.6.A person whose Shares have been forfeited and cancelled shall cease to be a Shareholder in respect of the Shares forfeited and cancelled and is discharged from any further obligation to the Company with respect to those Shares. The details of the forfeiture, with the date thereof, shall forthwith be made in the Register of Members.

 

11.Untraceable Members

 

11.1.Without prejudice to the rights of the Company in this Article Error! Reference source not found., the Company may cease sending cheques for dividend entitlements or dividend warrants by post if such cheques or warrants have been left uncashed on two (2) consecutive occasions. However, the Company may exercise the power to cease sending cheques for dividend entitlements or dividend warrants after the first occasion on which such a cheque or warrant is returned undelivered.

 

11.2.The Company shall have the power to sell, in such manner as the Board thinks fit, any shares of a member who is untraceable, but no such sale shall be made unless:

 

(a)all cheques or warrants in respect of dividends of the shares in question, being not less than three (3) in total number, for any sum payable in cash to the holder of such shares sent during the relevant period in the manner authorized by these Articles have remained uncashed;

 

(b)so far as it is aware at the end of the relevant period, the Company has not at any time during the relevant period received any indication of the existence of the member who is the holder of such shares or of a person entitled to such shares by death, bankruptcy or operation of law; and

 

(c)the Company, if so required by the rules governing the listing of the shares on the Designated Stock Exchange, has given notice to, and caused advertisement in newspapers to be made in accordance with the requirements of the Designated Stock Exchange of its intention to sell such shares in the manner required by the Designated Stock Exchange, and a period of three (3) months or such shorter period as may be allowed by the Designated Stock Exchange has elapsed since the date of such advertisement.

 

For the purpose of the foregoing, the “relevant period” means the period commencing twelve (12) years before the date of publication of the advertisement referred to in paragraph (c) of this Article and ending at the expiry of the period referred to in that paragraph.

 

11.3.To give effect to any such sale the Board may authorize some person to transfer the said shares and an instrument of transfer signed or otherwise executed by or on behalf of such person shall be as effective as if it had been executed by the registered holder or the person entitled by transmission to such shares, and the purchaser shall not be bound to see to the application of the purchase money nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings relating to the sale. The net proceeds of the sale will belong to the Company and upon receipt by the Company of such net proceeds. No trust shall be created in respect of such debt and no interest shall be payable in respect of it and the Company shall not be required to account for any money earned from the net proceeds which may be employed in the business of the Company or as it thinks fit. Any sale under this Article 54 shall be valid and effective notwithstanding that the Member holding the Shares sold is dead, bankrupt or otherwise under any legal disability or incapacity.

 

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12.Meetings of Shareholders

 

12.1.

The Directors may, whenever they think fit, convene a meeting of Shareholders. An AGM shall be held at such date and time as may be determined by the directors.

 

12.2.Shareholders’ meetings shall also be convened on the requisition in writing of any Shareholder or Shareholders entitled to attend and vote at a meeting of the Shareholders of the Company on the matter for which the meeting is being requested holding at least thirty percent (or such lesser percentage that may be accepted by the directors in their absolute discretion) of outstanding Shares entitled to vote in the Company deposited at the Registered Office specifying the objects of the meeting for a date no later than twenty one days from the date of deposit of the requisition signed by the requisitionists, and if the Directors do not convene such meeting for a date not later than forty five days after the date of such deposit, the requisitionists themselves may convene the Shareholders’ meeting in the same manner, as nearly as possible, as that in which Shareholders’ meetings may be convened by the Directors, and all reasonable expenses. For the avoidance of doubt, in accordance with the Act the directors are not able to affix a greater percentage requirement for the purposes of a requisition of a Shareholder meeting.

 

12.3.If at any time there are no Directors, any two Shareholders (or if there is only one Shareholder then that Shareholder) entitled to vote at meetings of the Shareholders of the Company may convene a Shareholders’ meeting in the same manner as nearly as possible as that in which Shareholders’ meetings may be convened by the Directors.

 

12.4.At least seven days’ notice in writing counting from the date service is deemed to take place as provided in these Articles specifying the place, the day and the hour of the meeting and the general nature of the business to be considered at the meeting, shall be given in the manner hereinafter provided to such persons as are, under these Articles, entitled to receive such notices from the Company.

 

12.5.A meeting of Shareholders held in contravention of the notice requirements set out above is valid if Shareholders holding not less than a ninety percent majority of the:

 

(a)total number of Shares entitled to vote on all matters to be considered at the meeting; or

 

(b)votes of each Class of Shares where Shareholders are entitled to vote thereon as a Class together with not less than an absolute majority of the remaining votes,

 

have waived notice of the meeting and for this purpose presence at the meeting shall be deemed to constitute a waiver.

 

12.6.The accidental omission to give notice of a meeting to or the non-receipt of a notice of a meeting by any Shareholder shall not invalidate the proceedings at any meeting.

 

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13.Proceedings at Meetings of Shareholders

 

13.1.

No business shall be transacted at any Shareholders’ meeting unless a quorum of Shareholders is present at the time when the meeting proceeds to business. Save as otherwise provided by these Articles, a quorum shall consist of the holder or holders present in person or by proxy entitled to exercise at least one third of the voting rights of the shares of each class or series of shares entitled to vote as a class or series thereon and the same proportion of the votes of the remaining shares entitled to vote thereon. If the Company has only one Shareholder, that only Shareholder shall have full power to represent and act for the Company in all matters and in lieu of minutes of a meeting shall record in writing and sign a note of memorandum of all matters requiring a resolution of members.

 

13.2.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 Shareholder(s), shall be dissolved.

 

13.3.If the Directors decide to make such facility available for a specific Shareholders’ meeting or all Shareholders’ meetings of the Company, participation in any Shareholders’ meeting may be by means of a telephone or by other electronic means provided that all Persons participating in such meeting are able to hear each other and such participation shall be deemed to constitute presence in person at the meeting.

 

13.4.The Chairman, if any, of the board of Directors shall preside as Chairman at every Shareholders’ 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.

 

13.5.If at any 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 Shareholders present shall choose one of their number to be Chairman of the meeting.

 

13.6.The Chairman may, with the consent of any meeting at which a quorum is present (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 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 meeting.

 

14.Votes of Shareholders

 

14.1.At any meeting of members a resolution put to the vote of the meeting shall be decided on a show of hands by a simple majority, unless a poll is (before or on the declaration of the result of the show of hands) demanded by the Chairman; or one or more Shareholders present in person or by proxy entitled to vote and who together hold not less than ten (10) percent of the total voting share issued and having the right to vote on such resolution. Unless a poll is 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 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 such resolution.

 

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14.2.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 meeting at which the poll was demanded. The demand for a poll may be withdrawn, at the discretion of the Chairman.

 

14.3.On a poll, every holder of a voting share present in person or by proxy shall have one vote for every voting share of which he is the holder which confers the right to a vote on the resolution.

 

14.4.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 not be entitled to a second or casting vote.

 

14.5.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.

 

14.6.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 and in such manner as the Chairman of the meeting directs and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. Any business other than that upon which a poll has been demanded may be proceeded with pending the taking of the poll.

 

14.7.In the case of joint holders:

 

(a)if two or more persons hold Shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;

 

(b)if only one of them is present in person or by proxy, he may vote on behalf of all of them; and

 

(c)if two or more are present in person or by proxy, they must vote as one.

 

14.8.A Shareholder of unsound mind, or in respect of whom an order has been made by any court having jurisdiction in lunacy, may vote in respect of Shares carrying the right to vote held by him, whether on a show of hands or on a poll, by the person or persons appointed by that court, and any such person or persons may vote by proxy.

 

14.9.No person shall be entitled to vote at any Shareholders’ meeting unless he is registered as a Shareholder in the Register of Members on the date of such meeting and unless all calls or other sums presently payable by him in respect of Shares of the Company have been paid.

 

14.10.No objection shall be raised to the qualifications of any voter except at the meeting or adjourned meeting at which the vote objected to is given or tendered and every vote not disallowed at such meeting shall be valid for all purposes. Any such objection made in due time shall be referred to the Chairman of the meeting, whose decision shall be final and conclusive.

 

14.11.On a poll or on a show of hands votes may be given either personally or by proxy. On a poll, a Shareholder entitled to more than one vote need not, if he votes, use all his votes or cast all votes he uses the same way.

 

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14.12.An action that may be taken by the Shareholders at a meeting may also be taken by a Resolution of Shareholders consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication, without the need for any notice, but if any such resolution is adopted otherwise than by the unanimous written consent of all Shareholders, a copy of such resolution shall forthwith be sent to all Shareholders not consenting to such resolution. The consent may be in the form of counterparts in like form each counterpart being signed by one or more Shareholders.

 

14.13.The provisions of the Memorandum and the Articles as regards Shareholders’ meetings and Resolutions of Shareholders shall apply mutatis mutandis to any meeting or resolution of the holders of a Class or Series of Shares.

 

15.Proxies

 

15.1.The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under seal or under the hand of an officer or attorney duly authorised. A proxy need not be a Shareholder of the Company. Deposit or delivery of a form of appointment of a proxy does not preclude a Shareholder from attending and voting at the meeting or at any adjournment of it.

 

15.2.The instrument appointing a proxy shall be deposited at the Registered Office 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 confirmation from the appointor that the instrument of proxy duly signed is in the course of transmission to the Company. The Directors may require the production of any evidence which they consider necessary to determine the validity of any appointment pursuant to this Article.

 

15.3.The instrument appointing a proxy may be in any form acceptable to the Directors and may be expressed to be for a particular meeting and/or any adjournment thereof or generally until revoked.

 

15.4.The instrument appointing a proxy shall be deemed to confer authority to demand and to join in demanding a poll.

 

15.5.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 meeting or adjourned meeting at which the proxy is used.

 

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16.Corporations Acting by Representatives at Meetings

 

Any Shareholder or Director that is a corporation or other entity may by resolution of its directors or other governing body authorise such natural person as it thinks fit to act as its representative at any meeting of the Company or of any meeting of holders of a Class or Series or of the Directors or of a committee of Directors, and the person so authorised shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual Shareholder or Director.

 

17.Directors

 

17.1.Except during the period from the date of incorporation until the date on which the first Directors are appointed by the first Registered Agent of the Company pursuant to Article Error! Reference source not found., the minimum number of Directors shall be one.

 

17.2.Subject to Article 17.1 above, the Company may by a Resolution of Shareholders or a Resolution of Directors from time to time fix the maximum and minimum number of Directors to be appointed but unless such numbers are fixed as aforesaid the minimum number of Directors shall be one and the maximum number of Directors shall be unlimited.

 

17.3.Subject to these Articles, the Company may appoint any natural person or corporation to be a Director. The following are disqualified from appointment as a Director:

 

(a)an individual who is under eighteen years of age;

 

(b)a person who is a disqualified person within the meaning of section 260(4) of the Insolvency Act (or any successor provision);

 

(c)a person who is a restricted person within the meaning of section 409 of the Insolvency Act (or any successor provision);

 

(d)an undischarged bankrupt; and

 

(e)any other person disqualified by the Memorandum and these Articles.

 

17.4.The Directors, or if the Shares (or depository receipts therefore) are listed or quoted on a Designated Stock Exchange, and if required by the Designated Stock Exchange, any committee thereof, may, by a Resolution of Directors, fix the emoluments of Directors with respect to services to be rendered in any capacity to the Company.

 

17.5.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 may also be paid travelling, hotel and other expenses properly incurred by them in attending and returning from meetings of the Directors or any committee of the Directors or Shareholders’ meetings of the Company or in connection with the business of the Company or the discharge of their duties as a Director, or receive a fixed allowance in respect thereof as may be determined by the Directors from time to time or a combination of partly of one such method and partly the other. The Directors may provide benefits, whether by the payment of gratuities or pensions or by insurance or otherwise, for any existing Director or any Director who has held but no longer holds any executive office or employment with the Company or with any body corporate which is or has been a subsidiary of the Company or a predecessor in business of the Company or of any such subsidiary, and for any member of his family (including a spouse and a former spouse) or any person who is or was dependent on him, and may (as well before as after he ceases to hold such office or employment) contribute to any fund and pay premiums for the purchase or provision of any such benefit.

 

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17.6.A Director or alternate Director 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 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 unless the Company otherwise directs in Shareholders’ meeting.

 

17.7.The Directors may by a Resolution of Directors award special remuneration to any Director undertaking any special work or services which in the opinion of the Directors are beyond his ordinary routine work as a Director. Any fees paid to a Director who is also counsel or attorney-at-law to the Company, or otherwise serves it in a professional capacity, shall be in addition to his remuneration as a Director.

 

17.8.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; provided that nothing herein obtained shall authorise a Director or alternate Director or his firm to act as Auditor of the Company.

 

17.9.An action that may be taken by the Directors or a committee of Directors at a meeting may also be taken by a resolution of Directors or a committee of Directors consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication by a simple majority of the Directors or a simple majority of the members of the committee, as the case may be, without the need for any notice. The consent may be in the form of counterparts, each counterpart being signed by one or more Directors.

 

18.Alternate Directors

 

18.1.Any Director may appoint as an alternate any other director or any other person who is not disqualified for appointment as a director to exercise the appointing director’s powers, and carry out the Director’s responsibilities, in relation to the taking of decisions by the directors in the absence of the Director. An alternate director has the same rights as the Director appointing him in relation to any Directors’ meeting and any written resolution circulated for written consent. Any exercise by the alternate director of the Director’s powers in relation to the taking of decisions by the Directors, is as effective as if the powers were exercised by the Director appointing him. The remuneration of such alternate shall be payable out of the remuneration of the Director appointing him and the proportion thereof shall be agreed between them. Where the alternate is a Director he shall be entitled to have a separate vote on behalf of the Director he is representing in addition to his own vote.

 

18.2.An alternate director is liable for his own acts and omissions as an alternate director. An alternate director has no power to appoint an alternate, whether of the Director appointing him or of the alternate director; and does not act as an agent of or for the Director.

 

18.3.The appointment of an alternate director must be in writing and written notice of the appointment must be given by the Director appointing him to the Company as soon as reasonably practicable.

 

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18.4.The Director may, at any time, terminate the alternate’s appointment. The termination of the appointment of an alternate director does not take effect until written notice of the termination has been given to the Company. Once termination of appointment takes effect, the former alternate directors shall not be an Officer.

 

19.Powers and Duties of Directors

 

19.1.The business of the Company shall be managed by the Directors (or a sole Director if only one is appointed) who may exercise all the powers of the Company save where inconsistent with the Act or these Articles PROVIDED HOWEVER that no regulations made by the Company in Shareholders’ meeting shall invalidate any prior act of the Directors which would have been valid if that regulation had not been made. The powers given by this Article shall not be limited by any special power given to the Directors by the Articles and a meeting of Directors at which a quorum is present may exercise all powers exercisable by the Directors.

 

19.2.Without limitation, the Directors may exercise all the powers of the Company to borrow or raise monies, 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.

 

19.3.Section 175 of the Act shall not apply to the Company. The Directors have the power to sell, transfer, lease, exchange or otherwise dispose of the assets of the Company, without restriction.

 

19.4.All cheques, promissory notes, drafts, bills of exchange or other negotiable instruments, and all receipts for monies paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as the Directors shall from time to time determine by resolution.

 

19.5.The Directors may, by a Resolution of Directors, designate one or more committees of Directors, each consisting of one or more Directors, in accordance with section 110 of the Act.

 

19.6.Each committee of Directors has such powers of the Directors, including the power to affix the Seal and to appoint a sub-committee and delegate its powers to that sub-committee, as are set forth in the Resolution of Directors establishing the committee of Directors, except that no committee of Directors may be delegated any power:

 

(a)to amend the Memorandum or these Articles;

 

(b)to designate committees of Directors;

 

(c)to delegate powers to a committee of Directors;

 

(d)to appoint or remove Directors;

 

(e)to appoint or remove agents;

 

(f)to approve a plan of merger, consolidation or arrangement;

 

(g)to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or approve a liquidation plan; or

 

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(h)to make a determination under section 57(1) of the Act that the company will, immediately after a proposed distribution, satisfy the Solvency Test.

 

19.7.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 or their alternates 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.

 

19.8.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 make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.

 

20.Conflict of Interest

 

20.1.No Director or Officer shall be disqualified by his office from contracting and/or dealing with the Company as vendor, purchaser or otherwise; nor shall any such contract or any contract or arrangement entered into by or on behalf of the Company in which any Director or officer shall be in any way interested be or be liable to be avoided; nor shall any Director or officer so contracting or being so interested be liable to account to the Company for any profit realised by any such contract or arrangement by reason of such Director or officer holding that office or the fiduciary relationship thereby established; provided that disclosure of interest by the Director is made in accordance with Article 20.2.

 

20.2.A Director shall forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by the Company, disclose the interest to the board of Directors. Where a Director’s interest in a transaction is not disclosed in accordance with this Article prior to the transaction being entered into, unless it is not required to be disclosed in accordance with Article 20.4 below, the transaction is voidable by the Company.

 

20.3.Notwithstanding the previous Article, a transaction entered into by the Company is not voidable by the Company if:

 

(a)the material facts of the interest of the Director in the transaction are known by the Shareholders entitled to vote at a meeting of Shareholders and the transaction is approved or ratified by a Resolution of Shareholders; or

 

(b)the Company received fair value for the transaction, and such determination of fair value is made on the basis of the information known to the Company and the interested Director at the time that the transaction was entered into.

 

20.4.A Director is not required to disclose and interest pursuant to Article 20.2 above, if the transaction is between the Company and the Director and the transaction or proposed transaction is or is to be entered into in the ordinary course of the Company’s business and on usual terms and conditions.

 

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20.5.A Director who is interested in a transaction entered into or to be entered into by the Company may:

 

(a)vote on or consent to a Resolution of Directors regarding the transaction or a matter relating to the transaction;

 

(b)attend a meeting of Directors at which the transaction or a matter relating to the transaction arises and be included among the Directors present at the meeting for the purpose of a quorum; and

 

(c)sign a document on behalf of the company, or do any other thing in his capacity as a Director, that relates to the transaction or a matter relating to the transaction.

 

21.Appointment and Removal of Directors

 

21.1.The first Director(s) shall be appointed by the first Registered Agent of the Company within six Months of the date of its incorporation, and thereafter, a Director may be appointed by Resolution of Shareholders or by a Resolution of Directors. Any appointment may be either to fill a casual vacancy or as an addition to the existing Directors but so that the total number of Directors (exclusive of alternate Directors) shall not at any time exceed the number fixed in accordance with these Articles.

 

21.2.Any Director so appointed shall, if still a Director, retire at the next annual general meeting after his appointment and be eligible to stand for election as a Director at such meeting.

 

21.3.For so long as shares are listed on a Designated Stock Exchange, the Directors shall include at least such number of independent directors as applicable law, rules or regulations or the Designated Stock Exchange rules require as determined by the Board.

 

21.4.No person shall be appointed as a director or alternate director of the Company unless he has consented in writing to be a director or alternate director.

 

21.5.Each Director shall hold office for the term, if any, fixed by the Resolution of Shareholders or the Resolution of Directors, as the case may be, appointing him. In the case of a Director who is an individual the term of office of a Director shall terminate on the Director’s death, resignation or removal. In the case of a Director who is not an individual, the bankruptcy of a Director or the appointment of a liquidator, administrator or receiver of a corporate Director shall terminate the term of office of such Director.

 

21.6.A Director may be removed by a Resolution of Directors or by a Resolution of Shareholders. Sections 114(2) and 114(3) of the Act shall not apply to the Company.

 

22.Appointment at Annual General Meeting

 

22.1.Unless re-appointed pursuant to the provisions of Article 21 or removed from office pursuant to the provisions of Article 21.6, each Director shall be appointed for a term expiring at the next- following annual general meeting of the Company. At any such annual general meeting, Directors will be elected by Ordinary Resolution. At each annual general meeting of the Company, each Director elected at such meeting shall be elected to hold office for one-year.

 

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23.Resignation of Directors

 

23.1.A Director may at any time resign office by giving to the Company notice in writing or, if permitted pursuant to the notice provisions, in an Electronic Record delivered in either case in accordance with those provisions.

 

23.2.Unless the notice specifies a different date, the Director shall be deemed to have resigned on the date that the notice is delivered to the Company.

 

24.Termination of Directors

 

24.1.A Director may retire from office as a Director by giving notice in writing to that effect to the Company at the registered office, which notice shall be effective upon such date as may be specified in the notice, failing which upon delivery to the registered office.

 

24.2.Without prejudice to the provisions in these Articles for retirement, a Director’s office shall be terminated forthwith if the Director:

 

(a)is prohibited by law from serving as Director;

 

(b)becomes bankrupt or makes any arrangement or composition with his creditors;

 

(c)dies or is found to be or becomes of unsound mind;

 

(d)resigns his office by notice in writing to the Company or otherwise pursuant to any agreement between the Company and such Director;

 

(e)is removed from office in accordance with Article 21.6 above;

 

(f)is requested by all the other Directors (numbering at least two) to resign; or

 

(g)if he absents himself (without being represented by proxy or an alternate Director appointed by him) from three consecutive meetings of the Board without special leave of absence from the Directors, and they pass a resolution that he has by reason of such absence vacated office.

 

25.Proceedings of Directors

 

25.1.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 have a second or casting vote. A Director may, and the Secretary on the requisition of a Director shall, at any time summon a meeting of the Directors. Every Director shall receive notice of a board meeting.  Notice of a board meeting is deemed to be duly given to a Director if it is given to him personally or by word of mouth or by electronic communication to an address given by him to the Company for that purpose or sent in writing to him at his last known address or other address given by him to the Company for that purpose.  A Director or his alternate may waive the requirement that notice be given to the Director of a meeting of the board of Directors or committee of the Directors, either prospectively or retrospectively.

 

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25.2.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 (2), 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. One person may represent more than one Director by alternate and for the purposes of determining whether or not a quorum is present and voting each appointment of an alternate shall be counted.

 

25.3.If the Company shall have only one Director the provisions herein contained for meetings of the Directors shall not apply but such sole Director shall have full power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by the Shareholders and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a Resolution of Directors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes

 

25.4.The continuing Directors or sole continuing Director 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 the 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 Shareholders’ meeting of the Company, but for no other purpose.

 

25.5.The Directors may elect a Chairman of their meetings 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 may choose one of their number to be Chairman of the meeting.

 

25.6.A committee may elect a Chairman of its meetings; if no such Chairman is elected, or if at any meeting the Chairman is not present the members present may choose one of their number to be Chairman of the Meeting.

 

25.7.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.

 

25.8.All acts done by any meeting of the Directors or of a committee of the Directors (including any person acting as an alternate Director) shall, notwithstanding that it is afterwards discovered that there was some defect in the appointment of any Director or alternate Director, and/or that they or any of them were disqualified, and/or had vacated their office and/or were not entitled to vote, be as valid as if every such person had been duly appointed and/or not disqualified to be a Director or alternate Director and/or had not vacated their office and/or had been entitled to vote, as the case may be.

 

25.9.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 (a person being an alternate Director for one or more Directors being entitled to sign such resolution on behalf of each 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.

 

25.10.Any Director or Directors or any committee thereof may participate in any meeting of the board of Directors 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. All business transacted in this way by the Directors or a committee of Directors is for the purpose of the Articles deemed to be validly and effectively transacted at a meeting of the Directors or of a committee of Directors although fewer than two Directors or alternate Directors are physically present at the same place.

 

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25.11.A Director who is present at a meeting of the 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 the Company immediately after the conclusion of the meeting. Such right to dissent shall not apply to a Director who voted in favour of such action.

 

25.12.If and for so long as there is a sole Director of the Company:

 

(a)he may exercise all powers conferred on the Directors by the Articles by any means permitted by the Articles or the Act;

 

(b)the quorum for the transaction of business is one; and

 

(c)all other provisions of the Articles apply with any necessary modification (unless the provision expressly provides otherwise).

 

26.Managing Director

 

26.1.The Directors may from time to time appoint one or more of their body to the office of managing director for such period and on such terms as they think fit and, subject to the terms of any agreement entered into in any particular case, may revoke such appointment. A Director so appointed shall be subject to the same provisions as regards removal and disqualification as the other Directors and his appointment shall be automatically determined if he ceases for any cause to be a Director.

 

26.2.A managing director shall receive such remuneration (whether by way of salary, commission or participation in profits, or partly in one way and partly in another) as the Directors may determine.

 

26.3.The Directors may entrust to and confer upon a managing director any powers, authorities and discretions 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, alter, withdraw or vary all or any of such powers.

 

27.Presumption of Assent

 

A Director 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 to such action with the person acting as secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the Secretary immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favour of such action.

 

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28. Management

 

28.1. The Directors may from time to time provide for the management of the affairs of the Company in such manner as they think fit and the provisions contained in the three next following Articles shall be without prejudice to the general powers conferred by this Article.

 

28.2. The Directors from time to time and at any time may establish any committees, boards or agencies, may appoint any persons to be members of such committees or boards, may appoint any managers or agents, and may fix their remuneration. Any committee so formed shall in the exercise of powers so delegated conform to any regulations that may be imposed on it by the Directors.

 

28.3. The Directors from time to time and at any time may delegate to any such committee, board, manager or agent any of the powers, authorities and discretions for the time being vested in the Directors and may authorise the members for the time being of any such board, or any of them, to fill up any vacancy 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, and 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. Where a provision of the Articles refers to the exercise of a power, authority or discretion by the Directors and that power, authority or discretion has been delegated by the Directors to a committee, the provision shall be construed as permitting the exercise of the power, authority or discretion by the committee.

 

28.4. The Directors may from time to time and at any time by power of attorney appoint any company, firm or person or body of persons, whether nominated directly or indirectly by the Directors, to be the attorney or attorneys of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under the 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 attorney as the Directors may think fit and may also authorise any such attorney to delegate all or any of the powers, authorities and discretions vested in him.

 

28.5. Any such delegates as aforesaid may be authorised by the Directors to sub-delegate all or any of the powers, authorities and discretions for the time being vested in them.

 

29. Officers

 

29.1. The Directors may, by a Resolution of Directors, appoint any person, including a person who is a Director, to be an Officer or agent of the Company. Officers of the Company may consist of a president, one or more vice presidents, a Secretary, one or more assistant secretaries, a treasurer, one or more assistant treasurers and such other officers as the Directors may from time to time think necessary and all such officers shall perform such duties as may be prescribed by the Resolution of Directors.

 

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29.2. Officers shall hold office until their successors are elected or appointed but any officer may be removed at any time by a Resolution Directors. If any office becomes vacant the Directors may fill the same. Any person may hold more than one of these offices and no officer need be a Shareholder or Director.

 

29.3. The Resolution of Directors appointing an agent pursuant to Article 29.1 above may authorise the agent to appoint one or more substitutes or delegates to exercise some or all of the powers conferred on the agent by the Company.

 

29.4. Every Officer or agent of the Company has such powers and authority of the Directors, including the power and authority to affix the Seal, as are set forth in these Articles or in the Resolution of Directors appointing the Officer or agent, except that no Officer or agent has any power or authority with respect to the matters requiring a Resolution of Directors under the Act or these Articles or are otherwise not permitted to be delegated under the Act.

 

30. The Seal

 

30.1. The Company shall have a Seal. The Directors shall provide for the safe custody of the Seal. An imprint of the Seal shall be kept at the office of the Registered Agent.

 

30.2. The Seal shall only be used with the authority of the Directors or a committee of the Directors authorised by a Resolution of Directors in that regard. Every instrument to which the Seal shall be affixed shall be signed by a Director or other person authorised by the Directors for that purpose. Notwithstanding the provisions hereof, a Director, Secretary or other officer may affix the Seal to returns, lists, notices, certificates or any other documents required to be authenticated by him under Seal or to be filed with the Registrar of Companies in the British Virgin Islands or elsewhere under his signature alone.

 

30.3. The Company may maintain a facsimile of the Seal in such countries or places as the Directors may appoint and such facsimile Seal shall only be used with the authority of the Directors or a committee of the Directors authorised by a Resolution of Directors in that regard.

 

30.4. An instrument under seal or deed may be executed by the Company in any manner permitted by the Act.

 

31. Distributions

 

31.1. The Company may, from time to time, by a Resolution of Directors authorise a Distribution by the Company at such time, and of such amount, to any Shareholders, as it thinks fit if they are satisfied, on reasonable grounds, that immediately after the Distribution, the Company satisfies the following solvency test:

 

  (a) the value of the Company’s assets will exceed its liabilities; and

 

  (b) the Company will be able to pay its debts as they fall due.

 

31.2. The Directors may, before making any Distribution, set aside out of the profits of the Company such sum as they think proper as a reserve fund, and may invest the sum so set apart as a reserve fund upon such securities as they may select.

 

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31.3. Notice of any Distribution that may have been authorised shall be given to each Shareholder in the manner hereinafter mentioned and all Distributions unclaimed for three years after having been declared may be forfeited by Resolution of Directors for the benefit of the Company.

 

31.4. No Distribution shall bear interest as against the Company and no Distribution shall be authorised or made on Treasury Shares.

 

31.5. If several persons are registered as joint holders of any Shares, any one of such persons may give receipt for any Distribution made in respect of such Shares.

 

31.6. The Directors may deduct from any distribution payable to any Shareholder all sums of money (if any) presently payable by him to the Company on account of calls or otherwise.

 

31.7. The Directors may declare that any 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 Shareholders upon the footing of the value so fixed in order to adjust the rights of all Shareholders and may vest any such specific assets in trustees as may seem expedient to the Directors.

 

31.8. Any distribution payable in cash 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 of two or more joint holders may give effectual receipts for any dividends, distributions, bonuses or other monies payable in respect of the Shares held by them as joint holders.

 

31.9. Distributions may be paid in any currency. The Directors may determine the basis of conversion.

 

31.10. Any distribution which cannot be paid to a Shareholder and/or which remains unclaimed after six Months from the date on which such distribution becomes payable may, in the discretion of the Directors, be paid into a separate account in the Company’s name, provided that the Company shall not be constituted as a trustee in respect of that account and the distribution shall remain as a debt due to the Shareholder. Any distribution which remains unclaimed after a period of six years from the date on which such distribution becomes payable shall be forfeited and shall revert to the Company.

 

32. Corporate Records and Registers

 

32.1. The Company shall keep such records and underlying documentation that:

 

  (a) are sufficient to show and explain the Company’s transactions; and

 

(b) will at any time, enable the financial position of the Company to be determined with reasonable accuracy.

 

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32.2. The Directors shall also cause the following corporate records to be kept:

 

  (a) minutes of all meetings of Directors, Shareholders, committees of Directors, committees of Officers and committees of Shareholders; and

 

  (b) copies of all resolutions consented to by Directors, Shareholders, Classes of Shareholders, committees of Directors, committees of Officers and committees of Shareholders.

 

32.3. The Company shall maintain at the Registered Office or at the office of the Registered Agent a register of all charges created by the Company showing:

 

  (a) if the charge is a charge created by the Company, the date of its creation or, if the charge is an existing charge on property acquired by the Company, the date on which the property was acquired;

 

  (b) a short description of the liability secured by the charge;

 

  (c) a short description of the property charged;

 

  (d) the name and address of the trustee for the security, or if there is no such trustee, the name and address of the chargee;

 

  (e) unless the charge is a security to bearer, the name and address of the holder of the charge; and

 

  (f) details of any prohibition or restriction, if any, contained in the instrument creating the charge on the power of the Company to create any future charge ranking in priority to or equally with the charge.

 

32.4. The Company shall keep a Register of Directors containing:

 

  (a) the names and addresses of the persons who are Directors or who have been nominated as reserve directors of the Company;

 

  (b) the date on which each person whose name is entered in the Register of Directors was appointed as a Director, or nominated as a reserve director, of the Company;

 

  (c) the date on which each person named as a Director ceased to be a Director; and

 

  (d) the date on which the nomination of any person nominated as a reserve director ceased to have effect.

 

32.5. The Register of Directors or a copy of it shall be kept at the office of the Registered Agent and the Company shall file a copy of such Register of Directors with the Registrar of Corporate Affairs for registration, where required by the Act.

 

32.6. The Directors shall keep, or cause to be kept, the original Register of Members in accordance with the Act, at such place as the Directors may from time to time determine and, in the absence of any such determination, the original Register of Members shall be kept either at the office of the Registered Agent or the office of the Company’s transfer agent.

 

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32.7.The books, corporate records and underlying documentation shall be kept at the office of the Registered Agent or at such other place or places, within or outside the British Virgin Islands as the Directors think fit, and shall always be open to the inspection of the Directors.

 

32.8. Subject to the Act, he Directors may from time to time determine whether and to what extent and at what times and places and under what conditions or regulations the books, corporate records and underlying documentation of the Company or any of them shall be open to the inspection of Shareholders not being Directors, and no Shareholder (not being a Director) shall have any right of inspecting any records or underlying documentation of the Company except as conferred by the Act or other applicable law or authorised by a Resolution of Directors or by a Resolution of Shareholders.

 

32.9. Audited accounts relating to the Company’s affairs shall only be prepared if the Directors so determine, in which case the financial year end and the accounting principles will be determined by the Directors.

 

33. Audit

 

33.1. The Directors may appoint an Auditor or Auditors on such terms as the Directors determine who shall hold office until otherwise resolved.

 

33.2. Every Auditor shall have the 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.

 

33.3. Auditors shall at any time during their term of office, upon request of the Directors, make a report on the accounts of the Company in Shareholders’ meeting during their tenure of office.

 

33.4. Any Auditors of the Company appointed shall not be deemed to be Officers.

 

34. Fiscal Year

 

The fiscal year of the Company shall end on the 31st day of December in each year unless the Directors prescribe some other period therefor.

 

35. Notices

 

35.1. A notice may be given by the Company to any Shareholder either personally or by sending it by courier, post, cable, telex, telefax or e-mail to him or to his registered address, or (if he has no registered address) to the address, if any, within or without the British Virgin Islands supplied by him to the Company for the giving of notice to him.

 

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35.2. Where a notice is sent by courier, service of the notice shall be deemed to be effected by delivery of the notice to a courier company, and shall be deemed to have been received on the third day (not including Saturdays or Sundays or public holidays) following the day on which the notice was delivered to the courier. 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 been effected in the case of a notice of a meeting at the expiration of fourteen days after the letter containing the same is posted, and in any other case at the time at which the letter would be delivered in the ordinary course of post. Any letter sent to an address outside the British Virgin Islands shall be sent by courier or airmail.

 

35.3. Where a notice is sent by cable, telex, telefax or e-mail, service of the notice shall be deemed to be effected by properly addressing and sending such notice and to have been effected on the day received or, if such day is not a working day, on the next working day.

 

35.4. A notice may be given by the Company to the person or persons where the Company has been advised are entitled to a Share in consequence of the death or bankruptcy of a Shareholder by sending it through the post in prepaid 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, if any, within or without the British Virgin Islands supplied for that purpose by the persons claiming to be so entitled, or (until such an address has been supplied) by giving the notice in any manner in which the same might have been given if the death or bankruptcy had not occurred.

 

35.5. A notice shall be sufficiently 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.

 

35.6. Notice of every Shareholders’ meeting shall be given in any manner hereinbefore authorised to:

 

  (a) every person shown as a Shareholder in the Register of Members subject, in each case, to the immediately preceding Article; and

 

  (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 Shareholder where the Shareholder but for his death or bankruptcy would be entitled to receive notice of the meeting.

 

35.7. No other person shall be entitled to receive notices of Shareholders’ meetings.

 

35.8. A Shareholder who is present, either in person or by proxy, at any meeting of the Company or of the holders of any class of Shares in the Company shall be deemed to have received notice of the meeting, and, where requisite, of the purpose for which it was called.

 

35.9. Every person who becomes entitled to any Share shall be bound by any notice in respect of that Share which, before his name is entered in the Register of Members, has been given to the person from whom he derives his title.

 

35.10. Subject to the rights attached to Shares, the Directors may fix any date as the record date for a dividend, allotment or issue. The record date may be on or at any time before or after a date on which the dividend, allotment or issue is declared, made or paid.

 

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36. Voluntary Liquidation and Winding Up

 

36.1.The Company may voluntarily commence its liquidation and dissolution by appointing a voluntary liquidator in accordance with section 199 of the Act if:

 

(a)it has no liabilities; or

 

(b)it is able to pay its debts as they fall due and the value of its assets equals or exceeds its liabilities.

 

36.2.A voluntary liquidator may be appointed by a Resolution of Shareholders or, if the Company has never issued Shares, by a Resolution of Directors.

 

36.3. If the Company is to be liquidated, the liquidator shall apply the assets of the Company in such manner and order as he thinks fit in satisfaction of creditors’ claims.

 

36.4. Subject to any rights and restrictions for the time being attributed to any Class or Series, the assets available for distribution among the Shareholders shall then be applied in the following priority:

 

  (a) first, in the payment to the Shareholders a sum equal to the par value of the Shares held by them; and

 

  (b) second, subject to the rights attaching to Shares set out in the Memorandum, in the payment of any balance to the Shareholders of whole of the paid-up capital in respect of the Shares held by them.

 

36.5. If the Company shall be wound up and the assets available for distribution amongst the Shareholder as such shall be insufficient to repay the whole of the paid-up capital, such assets shall be, subject to the rights attaching to Shares set out in the Memorandum, distributed so that, as nearly as may be, the losses shall be borne by the Shareholder 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 Shareholders shall be more than sufficient to repay the whole of the capital at the commencement of the winding up, the excess shall be distributed amongst the Shareholders in proportion to the capital at the commencement of the winding up paid up on the Shares held by them respectively. But this Article is to be without prejudice to the rights of the holders of Shares issued upon special terms and conditions.

 

36.6. If the Company shall be wound up, the liquidator may divide amongst the Shareholder 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 Shareholder or different classes of Shareholder. 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 Shareholder as the liquidator, with the like sanction, shall think fit, but so that no Shareholder shall be compelled to accept any Shares or other securities whereon there is any liability.

 

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37. Indemnity

 

37.1. Every Director, Secretary, or other officer of the Company (including alternate directors and former directors and officers), any trustee for the time being acting in relation to the Company (including any nominee Shareholder holding Shares in the Company) and their heirs and personal representatives (each an “Indemnified person”) shall be entitled to be indemnified out of the assets of the Company against all actions, proceedings, costs, damages, expenses, claims, losses or liabilities which they or any of them may sustain or incur by reason of any act done or omitted in or about the execution of the duties of their respective offices or trusts or otherwise in relation thereto, including any liability incurred by him in defending any proceedings, whether civil or criminal, in which judgement is given in his favour or in which he is acquitted except to the extent that any of the foregoing arise through his dishonesty.

 

37.2. The Company may only indemnify an Indemnified person if such person acted honestly and in good faith and in what the indemnifiable person believed to be in the best interests of the Company and, in the case of criminal proceedings, the indemnifiable person had no reasonable cause to believe that his conduct was unlawful.

 

37.3. The decision of the Directors as to whether the Indemnified person acted honestly and in good faith and in what the indemnifiable person believed to be in the best interests of the Company and, in the case of criminal proceedings, as to whether such person had no reasonable cause to believe that his conduct was unlawful, is in the absence of fraud, sufficient for the purposes of these Articles, unless a question of law is involved.

 

37.4. No Indemnified person shall be liable (a) for any loss, damage or misfortune whatsoever which may happen to or be incurred by the Company in the execution of the duties, powers, authorities or discretions of his office or in relation thereto, (b) for the acts, receipts, neglects, defaults or omissions of any other such Director or person or (c) by reason of his having joined in any receipt for money not received by him personally or (d) for any loss on account of defect of title to any property of the Company or (e) on account of the insufficiency of any security in or upon which any money of the Company shall be invested or (f) for any loss incurred through any bank, broker or other agent or (g) for any loss occasioned by any negligence, default, breach of duty, breach of trust, error of judgement or oversight on his part or (h) for any other loss or damage due to any such cause as aforesaid except to the extent that any of the foregoing arise through his dishonesty.

 

37.5. The Company shall advance to each Indemnified person reasonable attorneys’ fees and other costs and expenses incurred in connection with the defence of any action, suit, proceeding or investigation involving such Indemnified person for which indemnity will or could be sought. In connection with any advance of any expenses hereunder, the Indemnified person shall execute an undertaking to repay the advanced amount to the Company if it shall be determined by final judgment or other final adjudication that such Indemnified person was not entitled to indemnification pursuant to this Article. If it shall be determined by a final judgment or other final adjudication that such Indemnified person was not entitled to indemnification with respect to such judgment, costs or expenses, then such party shall not be indemnified with respect to such judgment, costs or expenses and any advancement shall be returned to the Company (without interest) by the Indemnified person.

 

A-38

 

37.6. The Directors, on behalf of the Company, may purchase and maintain insurance for the benefit of any Director or other officer of the Company against any liability which, by virtue of any rule of law, would otherwise attach to such person in respect of any negligence, default, breach of duty or breach of trust of which such person may be guilty in relation to the Company.

 

38. Registration by Way of Continuation

 

38.1. The Company may by Resolution of Directors or by Resolution of Shareholders resolve to be registered by way of continuation in a jurisdiction outside the British Virgin Islands in the manner provided under those laws.

 

38.2. In furtherance of a resolution adopted pursuant to this Article, the Directors may cause an application to be made to the Registrar of Corporate Affairs to de-register the Company in the British Virgin Islands and may cause all such further steps as they consider appropriate to be taken to effect the transfer by way of continuation of the Company.

 

39. Merger and Consolidation

 

The Company shall, in accordance with the Act, have the power to merge or consolidate with one or more companies, upon such terms as the Directors may determine.

 

40. Disclosure

 

The Directors and the officers including any secretary or assistant secretary and/or any its service providers (including the registered office provider for the Company), shall be entitled to disclose to any regulatory or judicial authority, or to any stock exchange on which the Shares may from time to time be listed, any information regarding the affairs of the Company including, without limitation, any information contained in the Register of Members and books of the Company.

 

A-39

 

We, Sertus Incorporations (BVI) Limited of Sertus Chambers, P.O. Box 905, Quastisky Building, Road Town, Tortola, British Virgin Islands in our capacity as registered agent for the Company hereby apply to the Registrar of Corporate Affairs for the incorporation of the Company this 4th day of July, 2017

 

 

 

 

Incorporator

 

(Sd.) Alyson Parker I Ann Penn

 

Authorised Signatories

 

Sertus Incorporations (BVI) Limited

 

 

 

 

A-40

 

 

 

 

 

 

 

Form of Proxy Card

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 99.2

 

CHINA SXT PHARMACEUTICALS, INC.

 

178 Taidong Road North, Taizhou, Jiangsu, People’s Republic of China

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held at 9:30 a.m. on March 10, 2020 Eastern Standard Time

(Record Date January 15, 2020)

 

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

 

The undersigned hereby appoints Feng Zhou, as proxy of the undersigned, with full power to appoint his substitute, and hereby authorizes him to represent and to vote all the shares of stock of China SXT Pharmaceuticals, Inc. which the undersigned is entitled to vote, as specified below on this card, at the Annual Meeting of Shareholders of China SXT Pharmaceuticals, Inc. on March 10, 2020, at 9:30 a.m., EST, at 178 Taidong Road North Taizhou, Jiangsu, People’s Republic of China and at any adjournment or postponement thereof.

 

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATION OF THE BOARD OF DIRECTORS FOR EACH OF THE PROPOSALS. This proxy authorizes the above designated proxy to vote in his discretion on such other business as may properly come before the meeting or any adjournments or postponements thereof to the extent authorized by Rule 14a-4(c) promulgated under the Securities Exchange Act of 1934, as amended.

 

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR ALL

OF PROPOSAL 1 AND “FOR” OF PROPOSALS 2, 3 AND 5 AND “THREE YEARS” FOR PROPOSAL 4 SET FORTH BELOW.

PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.

PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK

 

PROPOSAL 1: To elect the nominees listed in the Proxy Statement to the Company’s Board of Directors.

 

 NOMINEES:

01 Feng Zhou   02 Jun Zheng   03  Junsong Li   04  Tulin Lu   05  Weiwei Fan

 

For All   Withhold All   For All Except
O   O   O

 

INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the box next to each nominee you wish to withhold, as shown here:
     

 

PROPOSAL 2: To ratify the selection of ZH CPA, LLC as the Company’s independent registered public accounting firm for year ending March 31, 2020.

 

For   Against   Abstain
O   O   O

 

PROPOSAL 3: To approve, by a non-binding vote, the Company’s executive compensation.

 

For   Against   Abstain
O   O   O

 

PROPOSAL 4: To approve, by a non-binding vote, the frequency of future Stockholder advisory votes relating to the Company’s executive compensation;

 

1 Year   2 Years   3 Years   Abstain
           

 

 

 

 

PROPOSAL 5: To approve and adopt amendment to the Company’s Memorandum and Articles of Association to grant the Board the authority to amend the Company’s authorized share capital, to divide or to combine shares, and to change the quorum for members meeting to one third of the voting rights of the shares of each class.

 

For   Against   Abstain
O   O   O

 

Please indicate if you intend to attend this meeting       ☐ YES                   ☐ NO

 

Signature of Shareholder:        
Date:        
Name shares held in (Please print):     Account Number (if any):  
No. of Shares Entitled to Vote:     Stock Certificate Number(s):    

 

Note:Please sign exactly as your name or names appear in the Company’s stock transfer books. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such.

If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such.

If the signer is a partnership, please sign in partnership name by authorized person.

 

Please provide any change of address information in the spaces below in order that we may update our records:

 

  Address: