Document:

Exhibit
10.5

 

I.B.C. No. 685134

 

TERRITORY OF THE BRITISH VIRGIN
ISLANDS

 

THE INTERNATIONAL BUSINESS
COMPANIES ACT

(CAP 291)

 

ARTICLES OF ASSOCIATION

 

OF

 

YUCHENG TECHNOLOGIES LIMITED

 

PRELIMINARY

 

1.                                       In these
Articles, if not inconsistent with the subject or context, the words and
expressions standing in the first column of the following table shall bear the
meanings set opposite them respectively in the second column thereof.

 

	
  Words

  	
   

  	
  Meaning

  
	
   

  	
   

  	
   

  
	
  capital

  	
   

  	
  The sum of the aggregate par value of all
  outstanding shares with par value of the Company and shares with par value
  held by the Company as treasury shares plus

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)

  	
  the aggregate of the amounts designated as
  capital of all outstanding shares without par value of the Company and shares
  without par value held by the Company as treasury shares, and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
  the amounts as are from time to time
  transferred from surplus to capital by a resolution of directors.

  
	
   

  	
   

  	
   

  
	
  member

  	
   

  	
  A person who holds shares in the Company.

  
	
   

  	
   

  	
   

  
	
  Person

  	
   

  	
  An individual, a corporation, a trust, the
  estate of a deceased individual, a partnership or an unincorporated
  association of persons.

  

 

 

	
  Words

  	
   

  	
  Meaning

  
	
   

  	
   

  	
   

  
	
  resolution of directors

  	
   

  	
  (a)

  	
  a resolution
  approved at a duly convened directors and constituted meeting of directors of
  the Company or of a committee of directors of the Company by the affirmative
  vote of a simple majority of the directors present at the meeting who voted
  and did not abstain; or

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
  a resolution
  consented to in writing by a simple majority of the directors or of a simple
  majority of the members of the committee of directors, as the case may be.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)

  	
  The
  foregoing resolutions or consents may include the actions of director
  alternates.

  
	
   

  	
   

  	
   

  
	
  meeting of directors

  	
   

  	
  With respect to calling a meeting of directors, a resolution
  consented to in writing by any one director and notified to all other
  directors.

  
	
   

  	
   

  	
   

  
	
  resolution of members

  	
   

  	
  A resolution
  approved at a duly convened and constituted meeting of the members of the
  Company by the affirmative vote of

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)

  	
  a simple majority of the votes of the shares entitled to vote thereon
  which were present at the meeting and were voted and not abstained, or

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
  a simple majority of the votes of each class or series of shares
  which were present at the meeting and entitled to vote thereon as a class or
  series and were voted and not abstained and of a simple majority of the votes
  of the remaining shares entitled to vote thereon which were present at the
  meeting and were voted and not abstain.

  
	
   

  	
   

  	
   

  
	
  securities

  	
   

  	
  Shares and debt obligations of every kind,
  and options, warrants and rights to acquire shares, or debt obligations.

  
	
   

  	
   

  	
   

  
	
  surplus

  	
   

  	
  The excess, if any, at the time of the
  determination of the total assets of the Company over the aggregate of its
  total liabilities, as shown in its books of account, plus the Company’s
  capital.

  

 

2

 

	
  Words

  	
   

  	
  Meaning

  
	
   

  	
   

  	
   

  
	
  the Act

  	
   

  	
  The International Business Companies Act
  (Cap 291) including any modification, extension, re-enactment or renewal
  thereof and any regulations made thereunder.

  
	
   

  	
   

  	
   

  
	
  the Memorandum

  	
   

  	
  The Memorandum of Association of the
  Company as originally framed or as from time to time amended.

  
	
   

  	
   

  	
   

  
	
  the Seal

  	
   

  	
  Any Seal which has been duly adopted as the
  Seal of the Company.

  
	
   

  	
   

  	
   

  
	
  these Articles

  	
   

  	
  These Articles of Association as originally
  framed or as from time to time amended.

  
	
   

  	
   

  	
   

  
	
  treasury shares

  	
   

  	
  Shares in the Company that were previously
  issued but were repurchased, redeemed or otherwise acquired by the Company
  and not cancelled.

  

 

2.                                       “Written”
or any term of like import includes words typewritten, printed, painted,
engraved, lithographed, photographed or represented or reproduced by any mode
of reproducing words in a visible form, including telex, facsimile, telegram,
cable or other form of writing produced by electronic communication.

 

3.                                       Save as
aforesaid any words or expressions defined in the Act shall bear the same
meaning in these Articles.

 

4.                                       Whenever
the singular or plural number, or the masculine, feminine or neuter gender is
used in these Articles, it shall equally, where the context admits, include the
others.

 

5.                                       A reference
in these Articles to voting in relation to shares shall be construed as a
reference to voting by members holding the shares except that it is the votes
allocated to the shares that shall be counted and not the number of members who
actually voted and a reference to shares being present at a meeting shall be
given a corresponding construction.

 

6.                                       A reference
to money in these Articles is, unless otherwise stated, a reference to the
currency in which shares in the Company shall be issued according to the
provisions of the Memorandum, currently United States dollars.

 

REGISTERED SHARES

 

7.                                       Every
member holding registered shares in the Company shall be entitled to a
certificate signed by a director or officer of the Company or under the Seal of
the Company. The certificate shall specify the share or shares held by the
member and shall

 

(a)                                  be signed by two directors or
two officers of the Company, or by one director and one officer; or

 

3

 

(b)                                 be under the Seal of the
company, with or without the signature of any director or officer of the
company and the signature of the director(s) or officer(s) and/or the Seal may
be facsimiles.

 

8.                                       If several
persons are registered as joint holders of any shares, any one of such persons
may give an effectual receipt for any dividend payable in respect of such
shares.

 

SHARES, AUTHORIZED CAPITAL,
CAPITAL AND SURPLUS

 

9.                                       Subject to
the provisions of these Articles and any resolution of members, the unissued
shares of the Company shall be at the disposal of the directors who may,
without limiting or affecting any rights previously conferred on the holders of
any existing shares or class or series of shares, offer, allot, grant options
over or otherwise dispose of shares to such persons, at such times and upon
such terms and conditions as the Company may by resolution of directors
determine.

 

10.                                 No share in
the Company may be issued until the consideration in respect thereof is fully
paid as provided in the Act, and when issued the share is for all purposes
fully paid and non-assessable save that a share issued for a promissory note or
other written obligation for payment of a debt may be issued subject to
forfeiture in the manner prescribed in these Articles.

 

11.                                 Shares in
the Company may be issued for money, services rendered, personal property, an
estate in real property, a promissory note or other binding obligation to
contribute money or property or any combination of the foregoing as shall be
determined by a resolution of directors.

 

12.                                 Shares in
the Company may be issued for such amount of consideration as the directors may
from time to time by resolution of directors determine, except that in the case
of shares with par value, the amount shall not be less than the par value, and
in the absence of fraud the decision of the directors as to the value of the
consideration received by the Company in respect of the issue is conclusive
unless a question of law is involved. The consideration in respect of the
shares constitutes capital to the extent of the par value and the excess
constitutes surplus.

 

13.                                 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 money equal to the consideration received or
deemed to have been received by the Company in respect of the other share, debt
obligation or security.

 

14.                                 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.

 

15.                                 The Company
may issue fractions of a share and a fractional share shall have the same
corresponding fractional liabilities, limitations, preferences, privileges,
qualifications, restrictions, rights and other attributes of a whole share of
the same class or series of shares.

 

16.                                 Upon the
issue by the Company of a share without par value, if an amount is stated in
the Memorandum to be authorized capital represented by such shares then each
share shall be issued for no less than the appropriate proportion of such
amount which shall constitute 

 

4

 

capital,
otherwise the consideration in respect of the share constitutes capital to the
extent designated by the directors and the excess constitutes surplus, except
that the directors must designate as capital an amount of the consideration
that is at least equal to the amount that the share is entitled to as a
preference, if any, in the assets of the Company upon liquidation of the
Company.

 

17.                                 The Company
may purchase, redeem or otherwise acquire and hold its own shares but only out
of surplus or in exchange for newly issued shares of equal value.

 

18.                                 Subject to
provisions to the contrary in

 

(a)                                  the Memorandum or these
Articles;

 

(b)                                 the designations, powers,
preferences, rights, qualifications, limitations and restrictions with which
the shares were issued; or

 

(c)                                  the subscription agreement for
the issue of the shares, the Company may not purchase, redeem or otherwise
acquire its own shares without the consent of members whose shares are to be
purchased, redeemed or otherwise acquired.

 

19.                                 No
purchase, redemption or other acquisition of shares shall be made unless the
directors determine that immediately after the purchase, redemption or other
acquisition the Company will be able to satisfy its liabilities as they become
due in the ordinary course of its business and the realizable value of the
assets of the Company will not be less than the sum of its total liabilities,
other than deferred taxes, as shown in the books of account, and its capital
and, in the absence of fraud, the decision of the directors as to the
realizable value of the assets of the Company is conclusive, unless a question
of law is involved.

 

20.                                 A
determination by the directors under the preceding Regulation is not required
where shares are purchased, redeemed or otherwise acquired

 

(a)                                  pursuant to a right of a member
to have his shares redeemed or to have his shares exchanged for money or other
property of the Company;

 

(b)                                 by virtue of a transfer of
capital pursuant to Regulation 47;

 

(c)                                  by virtue of the provisions of Section 83
of the Act; or

 

(d)                                 pursuant to an order of the
Court.

 

21.                                 Shares that
the Company purchases, redeems or otherwise acquires pursuant to the preceding
Regulation may be cancelled or held as treasury shares except to the extent
that such shares are in excess of 80 percent of the issued shares of the
Company in which case they shall be cancelled but they shall be available for
reissue.

 

22.                                 Where
shares in the Company are held by the Company as treasury shares or are held by
another company of which the Company holds, directly or indirectly, shares
having more than 50 percent of the votes in the election of directors of the
other company, such shares of the Company are not entitled to vote or to have
dividends paid thereon and shall not be treated as outstanding for any purpose
except for purposes of determining the capital of the Company.

 

5

 

23.                                 The Company
may by a resolution of directors include in the computation of surplus for any
purpose the unrealised appreciation of the assets of the Company, and, in the
absence of fraud, the decision of the directors as to the value of the assets
is conclusive, unless a question of law is involved.

 

MORTGAGES AND CHARGES OF
REGISTERED SHARES

 

24.                                 Members may
pledge, hypothecate, mortgage or charge their registered shares in the Company
and upon satisfactory evidence thereof the Company shall give effect to the
terms of any valid pledge, hypothecation, mortgage or charge except insofar as
it may conflict with any requirements herein contained for consent to the
transfer of shares.

 

25.                                 In the case
of the pledge, hypothecate, mortgage or charge of registered shares there may
be entered in the share register of the Company at the request of the
registered holder of such shares

 

(a)                                  a statement that the shares are
pledged, hypothecated, mortgaged or charged;

 

(b)                                 the name of the pledge,
mortgagee or chargee; and

 

(c)                                  the date on which the aforesaid
particulars are entered in the share register.

 

26.           Where
particulars of a pledge, hypothecation, mortgage or charge are registered, such
particulars shall be cancelled

 

(a)                                  with the consent of the named
pledgee, mortgagee or chargee or anyone authorized to act on his behalf; or

 

(b)                                 upon evidence satisfactory to
the directors of the discharge of the liability secured by the pledge,
hypothecation, mortgage or charge and the issue of such indemnities as the
directors shall consider necessary or desirable.

 

27.           Whilst
particulars of a pledge, hypothecation, mortgage or charge are registered, no
transfer of any share comprised therein shall be effected without the written
consent of the named mortgagee or chargee or anyone authorized to act on his
behalf.

 

FORFEITURE

 

28.           When shares
issued for a promissory note or other written obligation for payment of a debt
have been issued subject to forfeiture, the following provisions shall apply.

 

29.           Written
notice specifying a date for payment to be made and the shares in respect of
which payment is to be made shall be served on the member who defaults in
making payment pursuant to a promissory note or other written obligations to
pay a debt.

 

30.           The written
notice specifying a date for payment shall

 

(a)                                  name a further date not earlier
than the expiration of 14 days from the date of service of the notice on or
before which payment required by the notice is to be made; and

 

6

 

(b)                                 contain a statement that in the
event of non-payment at or before the time named in the notice the shares, or
any of them, in respect of which payment is not made will be liable to be
forfeited.

 

31.           Where a
written notice has been issued and the requirements have not been complied with
within the prescribed time, the directors may at any time before tender of
payment forfeit and cancel the shares to which the notice relates.

 

32.           The Company
is under no obligation to refund any moneys to the member whose shares have
been forfeited and cancelled pursuant to these provisions. Upon forfeiture and
cancellation of the shares the member is discharged from any further obligation
to the Company with respect to the shares forfeited and cancelled.

 

LIEN

 

33.           The Company
shall have a first and paramount lien on every share issued for a promissory
note or for any other binding obligation to contribute money or property or any
combination thereof to the Company, and the Company shall also have a first and
paramount lien on every share standing registered in the name of a member, whether
singly or jointly with any other person or persons, for all the debts and
liabilities of such member or his estate to the Company, whether the same shall
have been incurred before or after notice to the Company of any interest of any
person other than such member, and whether the time for the payment or
discharge of the same shall have actually arrived or not, and notwithstanding
that the same are joint debts or liabilities of such member or his estate and
any other person, whether a member of the Company or not.  The Company’s lien on a share shall extend to
all dividends payable thereon. The directors may at any time either generally,
or in any particular case, waive any lien that has arisen or declare any share
to be wholly or in part exempt from the provisions of this Regulation.

 

34.           In the
absence of express provisions regarding sale in the promissory note or other
binding obligation to contribute money or property, the Company may sell, in
such manner as the directors may by resolution of directors determine, any
share on which the Company has a lien, but no sale shall be made unless some
sum in respect of which the lien exists is presently payable nor until the
expiration of twenty-one days after a notice in writing, stating and demanding
payment of the sum presently payable and giving notice of the intention to sell
in default of such payment, has been served on the holder for the time being of
the share.

 

35.           The net
proceeds of the sale by the Company of any shares on which it has a lien shall be
applied in or towards payment of discharge of the promissory note or other
binding obligation to contribute money or property or any combination thereof
in respect of which the lien exists so far as the same is presently payable and
any residue shall (subject to a like lien for debts or liabilities not
presently payable as existed upon the share prior to the sale) be paid to the
holder of the share immediately before such sale.  For giving effect to any such sale the
directors may authorize some person to transfer the share sold to the purchaser
thereof. The purchaser shall be registered as the holder of the share and he
shall not be bound to see to the application of the purchase money, nor shall
his title to the share be affected by any irregularity or invalidity in the
proceedings in reference to t he sale.

 

7

 

TRANSFER OF SHARES

 

36.           Subject to
any limitations in the Memorandum, registered shares in the Company may be
transferred by a written instrument of transfer signed by the transferor and
containing the name and address of the transferee, but in the absence of such
written instrument of transfer the directors may accept such evidence of a
transfer of shares as they consider appropriate.

 

37.           The Company
shall not be required to treat a transferee of a registered share in the
Company as a member until the transferee’s name has been entered in the share
register.

 

TRANSMISSION OF SHARES

 

38.           The
executor or administrator of a deceased member, the guardian of an incompetent
member or the trustee of a bankrupt member shall be the only person recognized
by the Company as having any title to his share but they shall not be entitled
to exercise any rights as a member of the Company until they have proceeded as
set forth in the next following three Regulations.

 

39.           The
production to the Company of any document which is evidence of probate of the
will, or letters of administration of the estate, or confirmation as executor,
of a deceased member or of the appointment of a guardian of an incompetent
member or the trustee of a bankrupt member shall be accepted by the Company
even if the deceased, incompetent or bankrupt member is domiciled outside the
British Virgin Islands if the document evidencing the grant of probate or
letters of administration, confirmation as executor, appointment as guardian or
trustee in bankruptcy is issued by a foreign court which had competent
jurisdiction in the matter. For the purpose of establishing whether or not a
foreign court had competent jurisdiction in such a matter the directors may
obtain appropriate legal advice.  The
directors may also require an indemnity to be given by the executor,
administrator, guardian or trustee in bankruptcy.

 

40.           Any person
becoming entitled by operation of law or otherwise to a share or shares in
consequence of the death, incompetence or bankruptcy of any member may be
registered as a member upon such evidence being produced as may reasonably be
required by the directors. An application by any such person to be registered
as a member shall for all purposes be deemed to be a transfer of shares of the
deceased, incompetent or bankrupt member and the directors shall treat it as
such.

 

41.           Any person
who has become entitled to a share or shares in consequence of the death,
incompetence or bankruptcy of any member may, instead of being registered
himself, request in writing that some person to be named by him be registered
as the transferee of such share or shares and such request shall likewise be
treated as if it were a transfer.

 

42.           What
amounts to incompetence on the part of a person is a matter to be determined by
the court having regard to all the relevant evidence and the circumstances of
the case.

 

REDUCTION OR INCREASE IN
AUTHORIZED CAPITAL OR CAPITAL

 

43.           The Company may by a resolution of directors or a
resolution of members amend the Memorandum to increase or reduce its authorized
capital and in connection therewith the Company may in respect of any unissued
shares increase or reduce the number of such 

8

 

shares, increase
or reduce the par value of any such shares or effect any combination of the
foregoing.

 

44.           Subject to
the requirements of the Memorandum, the Company may by either a resolution of
members or a resolution of directors amend the Memorandum to

 

(a)                                  increase or reduce its
authorized capital and in connection therewith the Company may in respect of
any unissued shares increase or reduce the number of such shares, increase or
reduce the par value of any such shares or effect any combination of the
foregoing;

 

(b)                                 increase the number of its
shares having no par value;

 

(c)                                  increase its capital constituted
by shares of no par value by transferring reserves or profits to the capital,
with or without a distribution of shares;

 

(d)                                 combine and divide all or any
part of its share capital into shares of larger amount than its existing shares
or combine and reduce the number of the issued no par value shares;

 

(e)                                  increase the number of its
issued no par value shares without an increase of its capital;

 

(f)                                    subdivide its shares, or any of
them, into shares of smaller amount than is fixed by the Memorandum;

 

(g)                                 convert any shares having a par
value into shares of no par value;

 

(h)                                 convert any shares of no par
value into shares having a par value; or

 

(i)                                     convert any of its shares,
whether issued or not, into shares of another class.

 

45.                                 The Company
may by a resolution of directors or a resolution of members amend the
Memorandum to

 

(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 are
divided or combined under (a) or (b) of this Regulation, the
aggregate par value of the new shares must be equal to the aggregate par value
of the original shares.

 

46.                                 The capital
of the Company may by a resolution of directors be increased by transferring an
amount of the surplus of the Company to capital.

 

47.                                 Subject to
the provisions of the two next succeeding Regulations, the capital of the
Company may by resolution of directors be reduced by transferring an amount of
the capital of the Company to surplus.

 

9

 

48.                                 No
reduction of capital shall be effected that reduces the capital of the Company
to an amount that immediately after the reduction is less than the aggregate par
value of all outstanding shares with par value and all shares with par value
held by the Company as treasury shares and the aggregate of the amounts
designated as capital of all outstanding shares without par value and all
shares without par value held by the Company as treasury shares that are
entitled to a preference, if any, in the assets of the Company upon liquidation
of the Company.

 

49.                                 No
reduction of capital shall be effected unless the directors determine that
immediately after the reduction the Company will be able to satisfy its
liabilities as they become due in the ordinary course of its business and that
the realizable assets of the Company will not be less than its total
liabilities, other than deferred taxes, as shown in the books of the Company
and its remaining capital, and, in the absence of fraud, the decision of the
directors as to the realizable value of the assets of the Company is
conclusive, unless a question of law is involved.

 

MEETINGS AND CONSENTS OF MEMBERS

 

50.                                 Any action
required or permitted to be taken by the members must be effected at a duly
called meeting (as described in Regulations 52 and 53) of the members entitled
to vote on such action and may not be effected by written resolution.

 

51.                                 Meetings of
members shall be held at such places as may be fixed from time to time by the
directors.

 

52.                                 An annual
meeting of members for election of directors and for such other business as may
come before the meeting shall be held each year at such date and time as may be
determined by the directors.

 

53.                                 Special
meetings of members (being all meetings of members which are not annual
meetings) may be called only by the directors pursuant to a resolution of
directors to that effect or upon the written request of members holding more
than 50 percent of the votes of the outstanding voting shares in the Company.

 

54.                                 Written
notice of all meetings of members, stating the time, place and purposes
thereof, shall be given not fewer than seven days before the date of the
proposed meeting to those persons whose names appear as members in the share
register of the Company on the date of the notice and are entitled to vote at
the meeting.

 

55.                                 The
directors may fix the date notice is given of a meeting of members as the
record date for determining those shares that are entitled to vote at the
meeting.

 

56.                                 A meeting
of members may be called on short notice:

 

(a)                                  if members holding not less than
90 percent of the total number of shares entitled to vote on all matters to be
considered at the meeting, or 90 percent of the votes of each class or series
of shares where members are entitled to vote thereon as a class or series
together with not less than a 90 percent majority of the remaining votes, have
agreed to short notice of the meeting, or

 

10

 

(b)                                 if all members holding shares
entitled to vote on all or any matters to be considered at the meeting have
waived notice of the meeting and for this purpose presence at the meeting shall
be deemed to constitute waiver.

 

57.           The
inadvertent failure of the directors to give notice of a meeting to a member,
or the fact that a member has not received notice, does not invalidate the
meeting.

 

58.           A member
may be represented at a meeting of members by a proxy who may speak and vote on
behalf of the member.

 

59.           The
instrument appointing a proxy shall be produced at the place appointed for the
meeting before the time for holding the meeting at which the person named in
such instrument proposes to vote.

 

60.           An instrument
appointing a proxy shall be in substantially the following form or such other
form as the Chairman of the meeting shall accept as properly evidencing the
wishes of the member appointing the proxy:

 

(Name of Company)

 

I/We                                                                                                                                                       
being a member of the above Company with.                                                                       
shares HEREBY APPOINT
                                                              
                                                                                     
of
                                                                                                                           
or failing him.                                                                                                                                                                                              
of                                                                                                                                                         
to be my/our proxy to vote for me/us at the meeting of members to be  held on the                       
day of.                                                                                                
and at any adjournment thereof.

 

[Any restrictions on voting to be inserted here]

 

 

Signed this                               
day of.                                                                        

 

	
   

  	
   

  
	
  Member

  	
   

  

 

61.                                 The
following shall apply in respect of joint ownership of shares:

 

(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 the joint owners
is present in person or by proxy he may vote on behalf of all joint owners, and

 

(c)                                  if two or more of the joint
owners are present in person or by proxy they must vote as one.

 

11

 

62.                                 A member
shall be deemed to be present at a meeting of members if he participates by
telephone or other electronic means and all members participating in the
meeting are able to hear each other.

 

63.                                 A meeting
of members is duly constituted if, at the commencement of the meeting, there
are present in person or by proxy not less than 50 percent of the votes of the
shares or class or series of shares entitled to vote on resolutions of members
to be considered at the meeting.  If a
quorum be present, notwithstanding the fact that such quorum may be represented
by only one person then such person may resolve any matter and a certificate
signed by such person accompanied where such person be a proxy by a copy of the
proxy form shall constitute a valid resolution of members.

 

64.                                 If within
two hours from the time appointed for the meeting a quorum is not present, the
meeting, if convened upon the requisition of members, shall be dissolved; in
any other case it shall stand adjourned to the next business day at the same
time and place or to such other time and place as the directors may determine,
and if at the adjourned meeting there are present within one hour from the time
appointed for the meeting in person or by proxy not less than one third of the
votes of the shares or each class or series of shares entitled to vote on the
resolutions to be considered by the meeting, those present shall constitute a
quorum but otherwise the meeting shall be dissolved.

 

65.                                 At any
meeting of members, only such business shall be conducted as shall have been
brought before such meeting:

 

(a)                                  by or at the direction of the
Chairman of the Board of Directors; or

 

(b)                                 by any member who is a holder of
record at the time of the giving of the notice provided for in Regulation 54
who is entitled to vote at the meeting and who complies with the procedures set
out in Regulation 66.

 

66.                                 For
business to be properly brought to the annual meeting of members by a member,
the member must have given timely written notice thereof, either by personal
delivery or by prepaid registered post to the Secretary of the Company (the “Secretary”)
at the principal executive offices of the Company. To be timely, a member’s
notice must be delivered not less than 60 days nor more than 90 days prior to
the anniversary date of the prior year’s annual meeting; provided, however,
that in the event that the date of the annual meeting changed by more than 30
days from such anniversary date, in order to be timely, notice by the member
must be so received not later than the close of business on the tenth day
following the day on which public disclosure is first made of the date of the
annual meeting. For the purposes of this Regulation 66, any adjournment(s) or
postponement(s) of the original meeting whereby the meeting will reconvene
within 30 days from original date shall be deemed, for purposes of notice, to
be a continuation of the original meeting and no business may be brought before
any reconvened meeting unless such timely notice of such business was given to
the Secretary for the meeting as originally scheduled. A member’s notice to the
Secretary shall set out as to each matter that the member wishes to be brought
before the meeting of members:

 

(i)                                     a brief description of the
business desired to be brought before the meeting;

 

12

 

(ii)                                  the name and address of record
of the member proposing such business;

 

(iii)                               the class and number of shares
of the Company which are beneficially owned by such member;

 

(iv)                              any material interest of such
member in such business; and

 

(v)                                 if the member intends to solicit
proxies in support of such member’s proposal, a representation to that effect

 

(b)                                 Notwithstanding the aforegoing,
nothing in this Regulation 66 shall be interpreted or construed to require the
inclusion of information about any such proposal in any proxy statement
distributed by, at the direction of, or on behalf of, the directors.  The chairman of a meeting of members shall,
if the facts so warrant, determine and declare to the meeting that business was
not properly brought before the meeting in accordance with the provisions of
this Regulation 66 and, if he should so determine, he shall so declare to the
meeting and any such business not properly brought before the meeting shall not
be transacted.  However, the notice
requirements set out in this Regulation 66 shall be deemed satisfied by a
member if the member has notified the Company of his intention to present a
proposal at a meeting of members and such member’s proposal has been included
in a proxy statement that has been distributed by, at the direction of, or on
behalf of, the directors to solicit proxies for such meeting; provided that, if
such member does not appear or send a qualified representative, as determined
by the chairman of the meeting, to present such proposal at such meeting, the
Company need not present such proposal for a vote at such meeting
notwithstanding that proxies in respect of such vote may have been received by
the Company.

 

67.           At every
meeting of members, the Chairman of the Board of Directors shall preside as
chairman of the meeting. If there is no Chairman of the Board of Directors or
if the Chairman of the Board of Directors is not present at the meeting, the
chief executive officer shall be the chairman. In the absence of the chief
executive officer, such person as shall be selected by the Board of Directors
shall act as chairman of the meeting.

 

68.           The
chairman may, with the consent of the meeting, adjourn any 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.

 

69.           At any
meeting of the members the chairman shall be responsible for deciding in such
manner as he shall consider appropriate whether any resolution has been carried
or not and the result of his decision shall be announced to the meeting and
recorded in the minutes thereof.  If the
chairman shall have any doubt as to the outcome of any resolution put to the
vote, he shall cause a poll to be taken of all votes cast upon such resolution,
but if the chairman shall fail to take a poll then any member present in person
or by proxy who disputes the announcement by the chairman of the result of any
vote may immediately following such announcement demand that a poll be taken
and the chairman shall thereupon cause a poll to be taken. If a poll is taken
at any meeting, the result thereof shall be duly recorded in the minutes of
that meeting by the chairman.

 

13

 

70.           Any person
other than an individual shall be regarded as one member and subject to the
specific provisions hereinafter contained for the appointment of representatives
of such persons the right of any individual to speak for or represent such
member shall be determined by the law of the jurisdiction where, and by the
documents by which, the person is constituted or derives its existence. In case
of doubt, the directors may in good faith seek legal advice from any qualified
person and unless and until a court of competent jurisdiction shall otherwise
rule, the directors may rely and act upon such advice without incurring any
liability to any member.

 

71.           Any person
other than an individual which is a member of the Company may by resolution of
its directors or other governing body authorize such person as it thinks fit to
act as its representative at any meeting of the Company or of any class of
members of the Company, and the person so authorized shall be entitled to
exercise the same powers on behalf of the person which he represents as that
person could exercise if it were an individual member of the Company.

 

72.           The
chairman of any meeting at which a vote is cast by proxy or on behalf of any
person other than an individual may call for a notarially certified copy of
such proxy or authority which shall be produced within 7 days of being so
requested or the votes cast by such proxy or on behalf of such person shall be
disregarded.

 

73.           Directors
of the Company may attend and speak with members of the Company and at any
separate meeting of the holders of any class or series of shares in the
Company.

 

74.           No business
of the Company shall be conducted at a meeting of members except in accordance
with the provisions of these Regulations 50 to 73.

 

DIRECTORS

 

75.           The initial
number of directors shall be one until such time as the Company merger with its
parent corporation when the number of directors shall be increased to
nine.  Subject to the requirements of the
Memorandum, the directors may by a resolution of directors, amend this
Regulation 75 to change the number of directors.

 

76.           Subject to
Regulation 75 to change the number of directors, the continuing directors may
act, notwithstanding any casual vacancy in their body, so long as there remain
in office not less than the prescribed minimum number of directors duly
qualified to act, but if the number falls below the prescribed minimum, the
remaining directors shall not act except for the purpose of filling such
vacancy.

 

77.           The
shareholding qualification for directors may be fixed, and from time to time
varied, by a resolution of members and unless and until so fixed no
qualification shall be required. A director must be an individual.

 

78.           The
directors may, by a resolution of directors, fix the emoluments of directors
with respect to services to be rendered in any capacity to the Company.

 

APPOINTMENT AND RETIREMENT OF
DIRECTORS

 

79.           The first
directors of the Company shall be appointed by the subscribers to the
Memorandum, and thereafter, directors shall hold office until the next annual
meeting of 

 

14

 

shareholders or
until such director’s earlier resignation, removal from office, death or
incapacity.

 

80.           Any vacancy
on the Board of Directors resulting from death, resignation, removal or other
cause and any newly created directorship resulting from any increase in the
authorized number of directors between meetings of members shall be filled only
by the affirmative vote of a majority of all the directors then in office (even
if less than a quorum).

 

81.           (a)           Nominations
of persons for election to the Board of Directors shall be made only at a
meeting of members and only

 

(i)                                     by or at the direction of the
directors; or

 

(ii)                                  by a member entitled to vote for
the election of directors who complies with the notice procedures set out
below.

 

(b)                                 Such nominations, other than
those made by or at the direction of the directors, shall be made pursuant to
timely notice in writing to the Secretary. To be timely, a members’ notice
shall be delivered to or mailed and received at the principal executive offices
of the Company not less than 60 days nor more than 90 days prior to the anniversary
date of the prior year’s annual meeting; provided, however, that in the event
that the date of the annual meeting changed by more than 30 days from such
anniversary date, notice by the member to be timely must be so received not
later than the close of business on the tenth day following the day on which
public disclosure is first made of the date of the annual meeting. For the
purposes of this Regulation, any adjournment or postponement of the original
meeting whereby the meeting will reconvene within 30 days from the original
date shall be deemed for the purposes of this notice to be a continuation of
the original meeting and no nominations by a member of persons to be elected
directors of the Company may be made at any such reconvened meeting unless
pursuant to a notice which was timely for the meeting on the date originally
scheduled. Each such notice shall set out

 

(i)            the name and address of the
member who intends to make the nomination and of the persons to be nominated;

 

(ii)           a representation that the member
is a holder of record of shares in the Company entitled to vote at such meeting
and that he intends to appear in person or by a proxy at the meeting to
nominate the persons specified in the notice;

 

(iii)          a description of all
arrangements or understandings between the member and each nominee and any
other person (naming such person) pursuant to which the nominations are to be
made by the member;

 

(iv)          such other information regarding
each nominee proposed by such member as would have been required to be included
in a proxy statement filed pursuant to the proxy rules of the United
States Securities and Exchange 

 

15

 

Commission, had each nominee been nominated,
or intended to be nominated, by the directors;

 

(v)                                 the consent of each nominee to
serve as a director of the Company if so elected; and

 

(vi)                              if the member intends to solicit
proxies in support of such member’s nominees, a representation to that effect.

 

82.                                 The
chairman of the meeting may refuse to acknowledge the nomination of any person
not made in compliance with the aforegoing procedure detailed in Regulation 81.
Only such persons as are nominated in accordance with the procedures set out in
Regulation 81 shall be eligible to serve as directors of the Company. If at any
meeting of members at which an election of directors ought to take place, the
place of any retiring director is not filled, he shall, if willing, continue in
office until the dissolution of the annual meeting of members in the next year,
and so on from year to year until his place is filled, unless it shall be
determined at such meeting not to fill such vacancy.

 

83.                                 The
appointment of a director shall take effect upon compliance with the
requirements of the Act.

 

DISQUALIFICATION AND REMOVAL OF
DIRECTORS

 

84.                                 Subject to
the provisions of the Act, a director shall cease to hold office as such only:

 

(a)                                  if he becomes of unsound mind;
or

 

(b)                                 if (unless he is not required to
hold a share qualification) he has not duly qualified himself within two months
of his appointment or if he ceases to hold the required number of shares to
qualify him for office; or

 

(c)                                  if he is absent from meetings of
the directors for six consecutive months without leave of the board of
directors, provided that the directors shall have power to grant any director
leave of absence for any or an indefinite period; or

 

(d)                                 if he dies; or

 

(e)                                  one month or, with the
permission of the directors earlier, after he has given notice in writing of
his intention to resign; or

 

(f)                                    if he shall, pursuant to the
provisions of the Act, be disqualified or cease to hold office or be prohibited
from acting as director; or

 

(g)                                 if he is removed from office by
a resolution signed by all the other directors; or

 

(h)                                 if he is removed from office for
cause by a resolution of members.  For
the purposes hereof, cause means the willful and continuous failure by a
director to substantially perform his duties to the Company (other than any
such failure resulting from incapacity due to physical or mental illness) or
the willful engaging 

 

16

 

by the director in gross misconduct
materially and demonstrably injurious to the Company; or

 

(i)                                     if he is removed from office
without cause by a resolution of the majority of the members of the Company,
being for the purposes of this Regulation 84(i) only, an affirmative vote
of the holders of 662/3 percent or more of the outstanding votes of the shares
entitled to vote thereon.

 

REGISTER OF DIRECTORS

 

85.                                 The Company
may determine by resolution of directors to keep a register of directors
containing:

 

(a)                                  the names and addresses of the
persons who are directors of the Company;

 

(b)                                 the date on which each person
whose name is entered in the register was appointed as director of the Company;
and

 

(c)                                  the date on which each person
named as a director ceased to be a director of the Company.

 

86.                                 If the
directors determine to maintain a register of directors, a copy thereof shall
be kept at the registered office of the Company and the Company may determine
by resolution of directors to register a copy of the register with the
Registrar of Companies.

 

MANAGING DIRECTORS

 

87.                                 The
directors may from time to time and by resolution of directors appoint one or
more of their number to be a managing director or joint managing director and
may, subject to any contract between him or them and the Company, from time to
time terminate his or their appointment and appoint another or others in his or
their place or places.

 

88.                                 A director
appointed in terms of the provisions of Regulation 87 to the office of managing
director of the Company may be paid, in addition to the remuneration payable in
terms of Regulation 78, such remuneration not exceeding a reasonable maximum in
each year in respect of such office as may be determined by a disinterested
quorum of the directors.

 

89.                                 The
directors may from time to time, by resolution of directors, entrust and confer
upon a managing director for the time being such of the powers and authorities
vested in them as they think fit, save that no managing director shall have any
power or authority with respect to the matters requiring a resolution of
directors under the Act.

 

POWERS OF DIRECTORS

 

90.                                 The
business and affairs of the Company shall be managed by the directors who may
exercise all such powers of the Company as are not by the Act or by the
Memorandum or these Articles required to be exercised by the members of the
Company, subject to any delegation of such powers as may be authorized by these
Articles and to such requirements as may be prescribed by a resolution of
members; but no requirement made by a resolution of members shall prevail if it
be inconsistent with these Articles nor shall 

 

17

 

such requirement invalidate any
prior act of the directors which would have been valid if such requirement had
not been made.

 

91.                                 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.  The resolution of directors appointing an
agent may authorize 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.

 

92.                                 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.

 

93.                                 The
directors may authorize the payment of such donations by the Company to such
religious, charitable, public or other bodies, clubs, funds or associations or
persons as may seem to them advisable in the interests of the Company.

 

94.                                 The
directors may by resolution of directors exercise all the powers of the Company
to borrow money and to mortgage or charge its 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.

 

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

 

96.                                 The Company
may determine by resolution of directors to maintain at its registered office a
register of mortgages, charges and other encumbrances in which there shall be
entered the following particulars regarding each mortgage, charge and other
encumbrance:

 

(a)                                  the sum secured;

 

(b)                                 the assets secured;

 

(c)                                  the name and address of the
mortgagee, chargee or other encumbrancer;

 

(d)                                 the date of creation of the
mortgage, charge or other encumbrance; and

 

(e)                                  the date on which the
particulars specified above in respect of the mortgage, charge or other
encumbrance are entered in the register.

 

97.                                 The Company
may further determine by a resolution of directors to register a copy of the
register of mortgages, charges or other encumbrances with the Registrar of
Companies.

 

PROCEEDINGS OF DIRECTORS

 

98.                                 The
directors of the Company or any committee thereof may meet at such times and in
such manner and places within or outside the British Virgin Islands as the
directors may determine to be necessary or desirable.

 

18

 

99.                                 A director
shall be deemed to be present at a meeting of directors if he participates by
telephone or other electronic means and all directors participating in the
meeting are able to hear each other.

 

100.                           A director
shall be given not less than 3 days notice of meetings of directors, but a
meeting of directors held without 3 days notice having been given to all
directors shall be valid if all the directors entitled to vote at the meeting
who do not attend, waive notice of the meeting and for this purpose, the
presence of a director at a meeting shall constitute waiver on his part.  The inadvertent failure to give notice of a
meeting to a director, or the fact that a director has not received the notice,
does not invalidate the meeting.

 

101.                           A meeting
of directors is duly constituted for all purposes if at the commencement of the
meeting there are present in person not less than one-half of the total number
of directors, unless there are only 2 directors in which case the quorum shall
be 2.

 

102.                           At every
meeting of the directors the Chairman of the Board of Directors shall preside
as chairman of the meeting. If there is no Chairman of the Board of Directors
or if the Chairman of the Board of Directors is not present at the meeting the
Vice-Chairman of the Board of Directors shall preside.  If there is no Vice-Chairman of the Board of
Directors or if the Vice-Chairman of the Board of Directors is not present at
the meeting the directors present shall choose some one of their number to be
chairman of the meeting.

 

103.                           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 three quarters of the directors or three
quarters of the members of the committee as the case may be, provided that a
copy of the proposed resolution will have been sent to all of the directors or
the members of the committee, for their consent.  The consent may be in the form of
counterparts, each counterpart being signed by one or more directors.

 

104.                           The
directors shall cause the following corporate records to be kept:

 

(a)                                  minutes of all meetings of
directors, members, committees of directors, committees of officers and
committees of members;

 

(b)                                 copies of all resolutions
consented to by directors, members, committees of directors, committees of
officers and committees of members; and

 

(c)                                  such other accounts and records
as the directors by resolution of directors consider necessary or desirable in
order to reflect the financial position of the Company.

 

105.                           The books,
records and minutes shall be kept at the registered office of the Company, its
principal place of business or at such other place as the directors determine.

 

COMMITTEES

 

106.                           The
directors may, by resolution of directors, designate one or more committees,
each consisting of one or more directors.

 

19

 

107.         Each
committee of directors has such powers and authorities of the directors,
including the power and authority to affix the Seal, as are set forth in the
resolution of directors establishing the committee, except that no committee
has any power or authority to amend the Memorandum or these Articles, to
appoint directors or fix their emoluments, or to appoint officers or agents of
the Company.

 

108.         The
meetings and proceedings of each committee of directors consisting of 2 or more
directors shall be governed mutatis mutandis by the provisions of these
Articles regulating the proceedings of directors so far as the same are not
superseded by any provisions in the resolution establishing the committee.

 

OFFICERS

 

109.         The Company
may by resolution of directors appoint officers of the Company at such times as
shall be considered necessary or expedient. 
Such officers may consist of a Chief Executive Officer or one or more
Joint Chief Executive Officers, a Chairman of the Board of Directors, a
Vice-Chairman of the Board of Directors, a President or one or more Joint
Presidents, a Chief Operating Officer and one or more Vice-Presidents,
Secretaries and Treasurers and such other holders of any other executive office
in the Company or officers as may from time to time be deemed desirable. Any
number of offices may be held by the same person.

 

110.         The
officers shall perform such duties as shall be prescribed at the time of their
appointment subject to any modification in such duties as may be prescribed
thereafter by resolution of directors or resolution of members, but in the
absence of any specific allocation of duties it shall be the responsibility of
the Chairman of the Board of Directors to preside at meetings of directors and
members, the Vice-Chairman to act in the absence of the Chairman, the President
to manage the day to day affairs of the Company, the Vice-Presidents to act in
order of seniority in the absence of the President but otherwise to perform
such duties as may be delegated to them by the President, the Secretaries to
maintain the share register, minute books and records (other than financial
records) of the Company and to ensure compliance with all procedural
requirements imposed on the Company by applicable law, and the Treasurer to be
responsible for the financial affairs of the Company.

 

111.         The
emoluments of all officers shall be fixed by resolution of directors.

 

112.         The
officers of the Company shall hold office until their successors are duly elected
and qualified, but any officer elected or appointed by the directors may be
removed at any time, with or without cause, by resolution of directors. Any
vacancy occurring in any office of the Company may be filled by resolution of
directors.

 

CONFLICT OF INTERESTS

 

113.         No
agreement or transaction between the Company and one or more of its directors
or any person in which any director has a financial interest or to whom any
director is related, including as a director of that other person, is void or
voidable for this reason only or by reason only that the director is present at
the meeting of directors or at the meeting of the committee of directors that
approves the agreement or transaction or that the vote or consent of the
director is counted for that purpose if the material facts of the 

 

20

 

interest of each
director in the agreement or transaction and his interest in or relationship to
any other party to the agreement or transaction are disclosed in good faith or
are known by the other directors.

 

114.         A director
who has an interest in any particular business to be considered at a meeting of
directors or members may be counted for purposes of determining whether the
meeting is duly constituted.

 

INDEMNIFICATION

 

115.         To the full
extent permitted by the Act or any other applicable laws presently or hereafter
in effect, no director of the Company shall be personally liable to the Company
or its members for or with respect to any acts or omissions in the performance
of his or her duties as a director of the Company. Any repeal or modification
of this Regulation 115 by a resolution of members shall not adversely affect
the right or protection of a director of the Company existing at the time of
such repeal or modification with respect to acts or omissions occurring prior
to such repeal or modification.

 

116.         Subject to
the limitations hereinafter provided the Company may indemnify against all
expenses, including legal fees, and against all judgments, fines and amounts
paid in settlement and reasonably incurred in connection with legal,
administrative or investigative proceedings any person who

 

(a)           is or was a party or is
threatened to be made a party to any threatened, pending or completed
proceedings, whether civil, criminal, administrative or investigative, by
reason of the fact that the person is or was a director, an officer or a
liquidator of the Company; or

 

(b)           is or was, at the request of the
Company, serving as a director, officer or liquidator of, or in any other
capacity is or was acting for, another company or a partnership, joint venture,
trust or other enterprise.

 

117.         The Company
may only indemnify a person if the person acted honestly and in good faith with
a view to the best interests of the Company and, in the case of criminal
proceedings, the person had no reasonable cause to believe that his conduct was
unlawful.

 

118.         The
decision of the directors as to whether the person acted honestly and in good
faith and with a view to the best interests of the Company and as to whether
the 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.

 

119.         The
termination of any proceedings by any judgment, order, settlement, conviction
or the entering of a nolle prosequi does not, by itself, create a presumption
that the person did not act honestly and in good faith and with a view to the
best interests of the Company or that the person had reasonable cause to
believe that his conduct was unlawful.

 

120.         If a person
to be indemnified has been successful in defence of any proceedings referred to
above, the person is entitled to be indemnified against all expenses, including
legal fees, and against all judgments, fines and amounts paid in settlement and
reasonably incurred by the person in connection with the proceedings.

 

21

 

121.         The Company
may purchase and maintain insurance in relation to any person who is or was a
director, an officer or a liquidator of the Company, or who at the request of
the Company is or was serving as a director, an officer or a liquidator of, or
in any other capacity is or was acting for, another company or a partnership,
joint venture, trust or other enterprise, against any liability asserted
against the person and incurred by the person in that capacity, whether or not
the Company has or would have had the power to indemnify the person against the
liability as provided in these Articles.

 

SEAL

 

122.         The Company
may have more than one Seal and references herein to the Seal shall be
references to every Seal which shall have been duly adopted by resolution of
directors. The directors shall provide for the safe custody of the Seal and for
an imprint thereof to be kept at the Registered Office. Except as otherwise
expressly provided herein the Seal when affixed to any written instrument shall
be witnessed and attested to by the signature of a director or any other person
so authorized from time to time by resolution of directors. Such authorization
may be before or after the Seal is affixed, may be general or specific and may
refer to any number of sealings. The Directors may provide for a facsimile of
the Seal and of the signature of any director or authorized person which may be
reproduced by printing or other means on any instrument and it shall have the
same force and validity as if the Seal had been affixed to such instrument and
the same had been signed as hereinbefore described.

 

DIVIDENDS

 

123.         The Company
may by a resolution of directors declare and pay dividends in money, shares, or
other property, but dividends shall only be declared and paid out of surplus.
In the event that dividends are paid in specie the directors shall have
responsibility for establishing and recording in the resolution of directors
authorizing the dividends, a fair and proper value for the assets to be so
distributed.

 

124.         The
directors may from time to time pay to the members such interim dividends as
appear to the directors to be justified by the profits of the Company.

 

125.         The
directors may, before declaring any dividend, 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 aside as a reserve fund upon such securities as they may select.

 

126.         No dividend
shall be declared and paid unless the directors determine that immediately
after the payment of the dividend the Company will be able to satisfy its
liabilities as they become due in the ordinary course of its business and the
realizable value of the assets of the Company will not be less than the sum of
its total liabilities, other than deferred taxes, as shown in its books of
account, and its capital.  In the absence
of fraud, the decision of the directors as to the realizable value of the
assets of the Company is conclusive, unless a question of law is involved.

 

127.         Notice of
any dividend that may have been declared shall be given to each member in
manner hereinafter mentioned and all dividends unclaimed for 3 years after
having been declared may be forfeited by resolution of directors for the
benefit of the Company.

 

22

 

128.         No dividend
shall bear interest as against the Company and no dividend shall be paid on
treasury shares or shares held by another company of which the Company holds,
directly or indirectly, shares having more than 50 percent of the vote in
electing directors.

 

129.         A share
issued as a dividend by the Company shall be treated for all purposes as having
been issued for money equal to the surplus that is transferred to capital upon
the issue of the share.

 

130.         In the case
of a dividend of authorized but unissued shares with par value, an amount equal
to the aggregate par value of the shares shall be transferred from surplus to
capital at the time of the distribution.

 

131.         In the case
of a dividend of authorized but unissued shares without par value, the amount
designated by the directors shall be transferred from surplus to capital at the
time of the distribution, except that the directors must designate as capital
an amount that is at least equal to the amount that the shares are entitled to
as a preference, if any, in the assets of the Company upon liquidation of the
Company.

 

132.         A division
of the issued and outstanding shares of a class or series of shares into a
larger number of shares of the same class or series having a proportionately
smaller par value does not constitute a dividend of shares.

 

ACCOUNTS AND AUDIT

 

133.         The Company
may by resolution of members call for the directors to prepare periodically a
profit and loss account and a balance sheet. 
The profit and loss account and balance sheet shall be drawn up so as to
give respectively a true and fair view of the profit and loss of the Company
for the financial period and a true and fair view of the state of affairs of
the Company as at the end of the financial period.

 

134.         The Company
may by resolution of members call for the accounts to be examined by auditors.

 

135.         The first
auditors of the Company and subsequent auditors shall be appointed by
resolution of directors.

 

136.         The
auditors may be members of the Company but no director or other officer shall
be eligible to be an auditor of the Company during his continuance in office.

 

137.         The
remuneration of the auditors of the Company

 

(a)           in the case of auditors
appointed by the directors, may be fixed by resolution of directors; and

 

(b)           subject to the foregoing, shall
be fixed by resolution of members or in such manner as the Company may by
resolution of members determine.

 

138.         The
auditors shall examine each profit and loss account and balance sheet required
to be served on every member of the Company or laid before a meeting of the
members of the Company and shall state in a written report whether or not

 

23

 

(a)                                  in their opinion the profit and
loss account and balance sheet give a true and fair view respectively of the
profit and loss for the period covered by the accounts, and of the state of
affairs of the Company at the end of that period; and

 

(b)                                 all the information and
explanations required by the auditors have been obtained.

 

139.         The report
of the auditors shall be annexed to the accounts and shall be read at the
meeting of members at which the accounts are laid before the Company or shall
be served on the members.

 

140.         Every
auditor of the Company shall have a right of access at all times to the books
of account and vouchers of the Company, and shall be entitled to require from
the directors and officers of the Company such information and explanations as
he thinks necessary for the performance of the duties of the auditors.

 

141.         The
auditors of the Company shall be entitled to receive notice of, and to attend
any meetings of members of the Company at which the Company’s profit and loss
account and balance sheet are to be presented.

 

NOTICES

 

142.         Any notice,
information or written statement to be given by the Company to members may be
served in the case of members holding registered shares in any way by which it
can reasonably be expected to reach each member or by mail addressed to each
member at the address shown in the share register.

 

143.         Any
summons, notice, order, document, process, information or written statement to
be served on the Company may be served by leaving it, or by sending it by
registered mail addressed to the Company, at its registered office, or by
leaving it with, or by sending it by registered mail to, the registered agent
of the Company.

 

144.         Service of
any summons, notice, order, document, process, information or written statement
to be served on the Company may be proved by showing that the summons, notice,
order, document, process, information or written statement was delivered to the
registered office or the registered agent of the Company or that it was mailed
in such time as to admit to its being delivered to the registered office or the
registered agent of the Company in the normal course of delivery within the
period prescribed for service and was correctly addressed and the postage was
prepaid.

 

PENSION AND SUPERANNUATION FUNDS

 

145.         The
directors may establish and maintain or procure the establishment and
maintenance of any non-contributory or contributory pension or superannuation
funds for the benefit of, and give or procure the giving of donations,
gratuities, pensions, allowances or emoluments to, any persons who are or were
at any time in the employment or service of the Company or any company which is
a subsidiary of the Company or is allied to or associated with the Company or
with any such subsidiary, or who are or were at any time directors or officers
of the Company or of any such other company as aforesaid or who hold or held
any salaried employment or office in the Company or such other company, or any
persons in whose welfare the Company or any such other company as aforesaid is
or has been at any time interested, and to the wives, widows, families and
dependents of 

 

24

 

any such person,
and may make payments for or towards the insurance of any such persons as
aforesaid, and may do any of the matters aforesaid either alone or in
conjunction with any such other company as aforesaid. Subject always to the
proposal being approved by resolution of members, a director holding any such
employment or office shall be entitled to participate in and retain for his own
benefit any such donation, gratuity, pension allowance or emolument.

 

VOLUNTARY WINDING UP AND
DISSOLUTION

 

146.         The Company
may voluntarily commence to wind up and dissolve by a resolution of members but
if the Company has never issued shares it may voluntarily commence to wind up
and dissolve by resolution of director.

 

CONTINUATION

 

147.         The Company
may by resolution of members or by a resolution passed unanimously by all
directors of the Company continue as a company incorporated under the laws of a
jurisdiction outside the British Virgin Islands in the manner provided under
those laws.

 

We, Offshore Incorporations Limited of P. O. Box 957, Offshore
Incorporations Centre, Road Town, Tortola, British Virgin Islands for the
purpose of incorporating an International Business Company under the laws of
the British Virgin Islands hereby subscribe our name to these Articles of
Association the 17th day of November, 2005.

 

 

	
    /s/ Fandy Tsoi

  	
   

  	
   

  	
  /s/ Richard Reese Tynes

  	
   

  
	
  Witness: 
  Fandy Tsoi

  	
   

  	
  Subscriber:

  	
  Tynes, Richard Reese

  
	
   

  	
   

  	
   

  	
  Authorized Signatory

  
						

 

25Exhibit 10.1

 

Langer, Inc.

 

Form of Amendment To Stock Option Agreements

 

Amendment To Stock Option Agreements, made as
of this               
day of December, 2005, by and between Langer, Inc., a Delaware corporation,
having its principal office at 450 Commack Road, Deer Park, New York 11729 (the
“Company”), and                                       
(the “Optionee”).

 

Whereas, the Company
has previously granted to the Optionee options to purchase: (i)                 
shares of Common Stock at an exercise price of $              
pursuant to the Stock Option Agreement, dated as of                           ,
and of which                     
options remain unvested; (ii)                       
shares of Common Stock at an exercise price of $          
pursuant to the Stock Option Agreement, dated as of                         ,
and of which                         
options remain unvested; and, entered into between the Company and the Optionee
(collectively, the “Stock Option Agreements”; all such unvested options
referred to herein as the “Unvested Options”).

 

Now, Therefore, the
parties agree as follows:

 

1.             The
vesting date of the Unvested Options is hereby accelerated to December 20,
2005.

 

2.             The
Stock Option Agreements are hereby amended to include the following provisions:

 

2.1.          Confidentiality;
Intellectual Property.  For purposes
of this Section 2.1, all references to the Company shall be deemed to include
all of the Company’s affiliates and subsidiaries.

 

2.1(a)      Confidential
Information.  The Optionee
acknowledges that as a result of his/her employment with the Company and/or
service as a Director of or consultant to the Company, the Optionee has and
will continue to have knowledge of, and access to, proprietary and confidential
information of the Company (in written, graphic, oral and/or other forms, and
in electronic, magnetic, paper and other media), including, without limitation,
information regarding the Company’s assets, properties, business, plans,
strategies, operations, business and product development, including without
limitation, acquisitions and new lines of business, trade secrets, novel ideas,
inventions, know-how, customers, business affiliates, techniques, training
materials, algorithms, computer programs (including source code and object
code), designs, formulas, test plans, data, analyses and results, services,
costs, finances, financial statements and projections, financial and marketing
information, markets, sales, vendors, suppliers, personnel, pricing policies,
plans for future developments, acquisition or disposition strategies,
specifications, technology, research and development, and other similar
information in respect of the Company (collectively, the “Confidential
Information”), and that such information, even though it may be contributed
to, developed or acquired by the Optionee, constitutes valuable, special and
unique assets of the Company developed at great expense, which are the
exclusive property of the Company.

 

1

 

Accordingly, the Optionee shall
not, at any time, either during or subsequent to the term of the Optionee’s employment
with the Company and/or service as a Director of or consultant to the Company,
use (whether for personal gain or otherwise), reveal, report, publish, transfer
or otherwise disclose to any person, corporation or other entity, any of the
Confidential Information without the prior written consent of the Company,
except to responsible officers and employees of the Company and other
responsible persons who are in a contractual or fiduciary relationship with the
Company who have a need for such information for purposes in the best interests
of the Company, and except (i) for such information which is or becomes of
general public knowledge from authorized sources other than the Optionee, or (ii) as
may be required by law, regulation, legal proceeding or court order.  The Optionee acknowledges that the Company
would not enter into this Agreement or continue the Optionee’s employment or
consultancy with the Company without the assurance that all such Confidential
Information will be used for the exclusive benefit of the Company.

 

2.1(b)      Return
of Confidential Information.  Confidential
Information or other information relating to the Company’s business or products
which come into the possession of the Optionee shall remain the sole property
of the Company, and shall not be copied, photocopied, reprinted or otherwise
reproduced or disseminated by the Optionee except in the performance of the
Optionee’s duties as an employee of the Company and/or a Director of or
consultant to the Company and then only at the direction of the Company.  Upon the earlier of the Company’s request
therefor, or the termination of the Optionee’s employment by the Company and/or
service as a Director of or consultant to the Company, the Optionee shall
return to the Company all such information, and all copies, facsimiles,
replicas, photocopies, and reproductions of them.

 

2.1(c)      Intellectual
Property.

 

(i)            Optionee
expressly agrees that any products, works of authorship, deliverables, designs,
processes, drawings or inventions produced by the Optionee at the request or on
behalf of the Company (the “Materials”) shall be the property of the
Company.  The Company shall own all
right, title and interest in and to the Materials, and all additions to,
deletions from, alterations of or revisions to, and each part thereof,
including all tools and work in progress with respect thereto, and all other
materials provided to the Optionee by or at the expense of the Company.  Without limiting the foregoing, the Optionee
hereby acknowledges that the Optionee’s work and services for the Company and
all results thereof are “works made for hire” for the Company as that term is
defined by the Copyright Act of 1976, as amended (the “Copyright Act”),
and the Company shall own all right, title and interest therein.  The Company shall be considered the author of
the Materials for purposes of copyright and shall own all the rights in and to
the copyright to the Materials, and, as between Optionee and the Company, only
the Company shall have the right to obtain copyright registration of the
Materials which the Company may do in its name, its trade name or the name of
its nominee.  The Company shall have the
sole and exclusive rights to do and authorize any and all of the acts set forth
in Section 106 of the Copyright Act with respect to the Materials and any
derivatives thereof, and to secure any extensions or renewals of such
copyrights.  Optionee retains no rights to
the Materials and agrees not to challenge the validity of the Company’s
ownership of the Materials.

 

2

 

(ii)           To
the extent that the Materials are determined by a court of competent
jurisdiction or the Register of Copyrights not to be a work made for hire
and/or for purposes of ownership of any inventions or patent rights in and to
the Materials, the Optionee hereby irrevocably assigns, transfers, releases and
conveys to the Company all right, title and interest (including all patent,
copyright, trade secret and trademark rights) of the Optionee in and to the
Materials.  The rights hereby conveyed to
the Company hereunder include without limitation all rights to any and all
inventions relating to or described in the Materials.  The Optionee further agrees to execute (and
to cause its principals, employees and agents to execute) any and all documents
deemed necessary or appropriate by the Company to effectuate a complete
transfer of ownership of all rights in the Materials to the Company throughout
the world.

 

(iii)          The
Optionee will promptly disclose to the Company all Materials conceived,
developed or acquired by the Optionee alone or with others during the term of
the Optionee’s employment with the Company and/or service as a Director of or
consultant to the Company, whether or not conceived during regular working
hours, through the use of Company time, material or facilities or
otherwise.  Without limiting the scope of
this Section 2.1, all such Materials shall be the sole and exclusive property
of the Company, and upon the Company’s request, the Optionee shall deliver to
the Company all drawings, models and other data and records relating to such
Materials.  In the event any such
Materials shall be deemed by the Company to be patentable or copyrightable, the
Optionee shall, at the expense of the Company, assist the Company in obtaining
any patents or copyrights thereon and execute all documents and do all other
things necessary or proper to obtain letters patent and copyright registrations
and to vest the Company with full title thereto.

 

(iv)          The
Optionee irrevocably designates and appoints the Company and each of its duly
authorized officers or agents, individually, as the Optionee’s agent and
attorney-in-fact, to act for and in the Optionee’s behalf and stead to execute
and file any such document and to do all other lawfully permitted acts to
further the prosecution, issuance, and enforcement of patents, copyrights, or
other rights or protection with the same force and effect as if executed and
delivered by the Optionee.

 

2.2.          Non-competition.  For purposes of this Section 2.2, all
references to the Company shall be deemed to include all of the Company’s
affiliates and subsidiaries.  The Optionee
will not utilize the Optionee’s special knowledge of the business of the
Company and the Optionee’s relationships with customers, suppliers of the
Company and others to compete with the Company. 
During the Optionee’s employment by the Company and/or service as a
Director of or consultant to the Company and for a period of one (1) year after
the date of termination of the Optionee’s employment with the Company and/or service
as a Director of or consultant to the Company (the “Restricted Period”),
the Optionee shall not engage, directly or indirectly, or have an interest,
directly or indirectly, anywhere in the United States of America or any other
geographic area where the Company does business or in which its products or
services are marketed, alone or in association with others, as principal,
officer, agent, employee, director, partner or stockholder (except with respect
to the Optionee’s employment by the Company and/or service as a Director of or
consultant to the Company), or through the investment of capital, lending of
money or property, rendering of services or otherwise, in any business
competitive with or substantially similar to that engaged in by

 

3

 

the Company or any vendor,
supplier or distributor of the Company during the term of Optionee’s employment
by the Company and/or service as a Director of or consultant to the Company, or
any line of business or acquisition that the Company either (i) contemplates
entering into, whether or not actually entered into, or (ii) has obtained
due diligence or other information on during Optionee’s employment with the
Company and/or service as a Director of or consultant to the Company (it being
understood hereby, that the ownership by the Optionee of 5% or less of the
stock of any company listed on a national securities exchange shall not be deemed
a violation of this Section 2.2).  During the Restricted Period, the Optionee
shall not, nor shall he permit any of the Optionee’s employees, agents or
others under the Optionee’s control to, directly or indirectly, on behalf of
himself/herself or any other person, (i) call upon, accept business from,
or solicit the business of any person who is, or who had been at any time
during the preceding two (2) years a customer of the Company or any successor
to the business of the Company, or otherwise divert or attempt to divert any
business from the Company or any such successor, or (ii) directly or
indirectly recruit or otherwise solicit or induce any person who is an employee
of, or otherwise engaged by, the Company or any successor to the business of
the Company to terminate his or her employment or other relationship with the
Company or such successor, or hire any person who has left the employ of the
Company or any such successor during the preceding two (2) years.  Optionee further agrees that if any such
customer contacts the Optionee during the Restricted Period in respect of doing
business with the Optionee, the Optionee will advise such customer of the
restrictions on the Optionee’s ability to do business with such customer
contained herein.  The Optionee shall not
at any time, directly or indirectly, use or purport to authorize any person to
use any name, mark, logo, trade dress or other identifying words or images
which are the same as or similar to those used at any time by the Company in
connection with any product or service, whether or not such use would be in a
business competitive with that of the Company. 
Any breach or violation by the Optionee of the provisions of this Section
2.2 shall toll the running of any time periods set forth in this Section 2.2
for the duration of any such breach or violation.

 

2.3.          Remedies.  The restrictions set forth in Sections 2.1
and 2.2 are considered by the Optionee to be fair and reasonable. The Optionee
acknowledges that the restrictions contained in Sections 2.1 and 2.2 will not
prevent the Optionee from earning a livelihood. 
The Optionee further acknowledges that the Company would be irreparably
harmed and that monetary damages would not provide an adequate remedy in the
event of a breach of the provisions of Sections 2.1 and 2.2.  Accordingly, the Optionee agrees that, in
addition to any other remedies available to the Company, the Company (i) shall
be entitled to specific performance, injunction, and other equitable relief to
secure the enforcement of such provisions, (ii) shall not be required to
post bond in connection with seeking any such equitable remedies, and (iii) shall
be entitled to receive reimbursement from the Optionee for all attorneys’ fees
and expenses incurred by the Company in enforcing such provisions.  If any provisions of Sections 2.1, 2.2 or 2.3
relating to the time period, scope of activities or geographic area of
restrictions is declared by a court of competent jurisdiction to exceed the
maximum permissible time period, scope of activities or geographic area, the
maximum time period, scope of activities or geographic area, as the case may
be, shall be reduced to the maximum which such court deems enforceable.  If any provisions of Sections 2.1, 2.2 or 2.3
other than those described in the preceding sentence are adjudicated to be
invalid or unenforceable, the invalid or unenforceable provisions shall be
deemed amended (with respect only to the jurisdiction in which

 

4

 

adjudication is made) in such
manner as to render them enforceable and to effectuate as nearly as possible
the original intentions and agreement of the parties.

 

2.4           Lock-up
Release Schedule.  Upon the exercise
of any or all of the options covered by the Stock Option Agreements, the Optionee
shall not sell, transfer, exchange, hypothecate, grant a security interest in,
pledge or otherwise dispose of (collectively, “Transfer”), other than by
will or by the laws of descent and distribution, the shares issued upon such
exercise at any time, including subsequent to the termination of the Optionee’s
employment with the Company and/or service as a Director of or consultant to
the Company, except in accordance with the following schedule:

 

	
  Lockup

  Release Date

  	
   

  	
  Number of

  ISOs

  	
   

  	
  Number of

  NQSOs

  	
   

  	
  Total

  Number

  of Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Totals

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Notwithstanding the lock-up
release schedule set forth above, such lock-up release schedule may be
accelerated by the Committee in its sole discretion.

 

2.5           Extension
of Lock-up Upon Termination. 
(a)  Upon the Optionee’s voluntary
termination of employment with the Company and/or service as a Director of or
consultant to the Company, except as a result of Optionee’s death or
disability, or upon the Optionee’s termination by the Company for Cause, any of
the lock-up release periods set forth in Section 2.4 which, as of the Optionee’s
termination of employment with the Company and/or service as a Director of or
consultant to the Company, have not yet expired shall each be automatically
extended an additional five (5) years from the lock-up release date(s) set
forth in Section 2.4.  Notwithstanding
any extension of the lock-up release periods pursuant to this Section 2.5, any
such lock-up release extension may be reduced by the Committee in its sole
discretion.

 

(b)           Notwithstanding
any extension of the lock-up release periods pursuant to this Section 2.5, any
such lock-up release extension may be reduced by the Committee in its sole
discretion.

 

3.             Except
as expressly amended by this Amendment, the Stock Option Agreements shall
remain in full force and effect.

 

4.             This
Amendment shall be governed by and construed in accordance with, and on the
same basis as, the Stock Option Agreements as set forth therein.

 

5.             This
Amendment may be executed in any number of counterparts, but all of which
together will constitute one and the same agreement.

 

5

 

[Signature Page Follows:]

 

6

 

In Witness Whereof, the parties hereto have
each executed and delivered this Amendment to the Stock Option Agreements as of
the day and year first above written.

 

	
   

  	
  Langer, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Joseph P.
  Ciavarella

  
	
   

  	
   

  	
  Vice
  President and CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Optionee:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

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