BAOBAB RESOURCES PLC Company number: 5590467
THE COMPANIES ACTS 1985 TO 2006 A PRIVATE COMPANY LIMITED BY SHARES ARTICLES OF ASSOCIATIONof
BAOBAB RESOURCES LIMITED (Adopted by special resolution passed on [] 2015) Index Clause Page
1 Interpretation and Limitation of Liability...................................................................................1
2 Directors' Powers and Responsibilities ......................................................................................4
3 Decision-Making by Directors ....................................................................................................5
4 Appointment of Directors and Secretary.................................................................................11
5 Alternate Directors ..................................................................................................................13
6 Shares.......................................................................................................................................15
7 Interests in Shares....................................................................................................................16
8 Transfer of Shares ....................................................................................................................18
9 Transmission of Shares ............................................................................................................20
10 Compulsory Transfers - Drag Along .........................................................................................21
11 Mandatory Offer on a Change of Control - Tag Along ............................................................23
12 Partly Paid Shares ....................................................................................................................25
13 Consolidation of Shares ...........................................................................................................30
14 Dividends and Other Distributions...........................................................................................30
15 Capitalisation of Profits............................................................................................................33
16 Decision-Making by Shareholders / Organisation of General Meetings .................................34
17 Voting at General Meetings .....................................................................................................36
18 Administrative Arrangements..................................................................................................39
19 Directors' Indemnity and Insurance.........................................................................................42
20 Miscellaneous ..........................................................................................................................44
In these articles, unless the context requires otherwise:
'Acquiring Holders' means, collectively, any transferee or transferees and Associates of any transferee or transferees or persons Acting in Concert with the transferee or transferees who will, following a Proposed Transfer, hold or increase a Controlling Interest (and, for the avoidance of doubt, where there is more than one transferee, including transferees who are not Associates of, or Acting in Concert with, each other).
'Acting in Concert' has the meaning given to it in the City Code.
'alternate' or 'alternate director' has the meaning given in article 5.1 (Appointment and removal of alternates).
'appointor' has the meaning given in article 5.1 (Appointment and removal of alternates). 'articles' means the articles of association of the Company set out in this document or as
amended from time to time.
'Associate' in relation to any person means:
(a) any person who is an associate of that person and the question of whether a person is an associate of another is to be determined in accordance with section 435 of the Insolvency Act 1986; and (whether or not an associate as so determined)
(b) any Associated Company.
'Associated Company' means a company which is for the time being a holding Company of another company or a subsidiary of that company or of any such holding company.
'bankruptcy' includes individual insolvency proceedings in a jurisdiction other than England and Wales and Northern Ireland which have an effect similar to that of bankruptcy.
'call' has the meaning given in article 12.3 (Call notices).
'call notice' has the meaning given in article 12.3 (Call notices).
'chairman' has the meaning given in article 3.6 (Chairing of directors' meetings).
'chairman of the meeting' has the meaning given in article 16.3 (Chairing general meetings).
'Called Shares' has the meaning given in article 10.2 (Exercise of Drag Along right). 'Called Shareholders' has the meaning given in article 10.1 (Drag Along right).
'certificated share' means a share which is not an uncertificated share and references to a share held in certificated form shall be construed accordingly.
'City Code' means the City Code on Takeovers and Mergers published by the Panel on
Takeovers and Mergers (as amended from time to time).
'Company' means Baobab Resources Limited.
'Companies Acts' means the Companies Acts (as defined in section 2 of the Companies Act
2006), in so far as they apply to the Company.
'Company's lien' has the meaning given in article 12.1 (Company's lien over partly paid shares).
'Controlling Interest' means shares conferring the right to exercise 30% or more of the total voting rights exercisable in general meetings of the Company.
'director' means a director of the Company, and includes any person occupying the position of director, by whatever name called.
'distribution recipient' has the meaning given in article 14.2(b).
'document' includes, unless otherwise specified, any document sent or supplied in electronic form.
'Drag Along Completion Date' has the meaning given in article 10.2 (Exercise of Drag Along right).
'Drag Along Notice' has the meaning given in article 10.2 (Exercise of Drag Along right). 'Drag Along Option' has the meaning given in article 10.1 (Drag Along right).
'electronic communication' means any document or information sent or supplied in electronic form within the meaning of section 1168 of the Companies Act 2006.
'electronic form' has the meaning given to it in section 1168 of the Companies Act 2006. 'employee' means an individual who is employed by or who provides consultancy services
to, the Company or any member of the Group.
'fully paid' in relation to a share, means that the nominal value and any premium to be paid to the Company in respect of that share have been paid to the Company.
'Group' means the Company and its subsidiary undertaking(s) (if any) (as defined in the Companies Act 2006) from time to time and 'Group Company' shall be construed accordingly.
'hard copy form' has the meaning given in section 1168 of the Companies Act 2006.
'holder' or 'shareholder' or 'member' in relation to shares means the person whose name is entered in the register of members as the holder of the shares.
'instrument' means a document in hard copy form.
'lien enforcement notice' has the meaning given in article 12.2 (Enforcement of the
Company's lien).
'Minority Shareholders' means those shareholders who for the time being hold shares in the Company that together confer less than 50% of the total voting rights exercisable in general meetings of the Company.
'New Shareholder' has the meaning given in article 10.9 (Subsequent Subscribers) 'Offer Period' has the meaning given in article 11.3(c).
'ordinary resolution' has the meaning given in section 282 of the Companies Act 2006.
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'paid' means paid or credited as paid.
'participate' in relation to a directors' meeting, has the meaning given in article 3.4 (Participation in directors' meetings).
'partly paid' in relation to a share means that part of that share's nominal value or any premium at which it was issued has not been paid to the Company.
'Proposed Buyer' has the meaning given in article 10.1 (Drag Along right). 'Proposed Sellers' has the meaning given in article 11.1 (Controlling Interest).
'Proposed Transfer' means the sale, transfer or other disposition in one or a series of related transactions of any shares carrying a right to vote at general meetings of the Company or any interest therein, or any agreement to effect the same.
'proxy notice' has the meaning given in article 17.7 (Content of proxy notices). 'qualifying person' has the meaning given in section 318 of the Companies Act 2006. 'Relevant Majority' means, in relation to the Minority Shareholders, Minority Shareholders
between them holding a majority of the shares held by all Minority Shareholders.
'Relevant Percentage' = A/B x 100
where: A = number of voting shares being sold by the Proposed Sellers pursuant to the Proposed Transfer;
B = number of voting shares held by the Proposed Sellers immediately before the Proposed Transfer.
'secretary' means the secretary of the Company and includes any joint, assistant or deputy secretary and any person appointed by the directors to perform any of the duties of the secretary.
'Selling Shareholders' has the meaning given in article 10.1 (Drag Along right). 'Sellers' Shares' has the meaning given in article 10.1 (Drag Along right). 'shareholder' means a person who is the holder of a share.
'shares' means shares in the Company.
'special resolution' has the meaning given in section 283 of the Companies Act 2006. 'Specified Price' means in respect of each share a sum in cash equal to the highest price per
share offered or paid by any of the Acquiring Holders:
(a) in the Proposed Transfer; or
(b) in any related or previous transaction by any of the Acquiring Holders in the 12 months preceding the date of the Offer,
plus an amount equal to the Relevant Percentage of any other consideration (in cash or otherwise) paid or payable by any of the Acquiring Holders which, having regard to the substance of the transaction as a whole, can reasonably be regarded as an addition to the price paid or payable for the shares.
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'subsidiary' has the meaning given in section 1159 of the Companies Act 2006. 'the Register' means the register of members of the Company.
'the Regulations' means the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755) (as amended or modified from time to time).
'the relevant system' means the computer-based system, and procedures, which enable title to units of a security to be evidenced and transferred without a written instrument, and which facilitate supplementary and incidental matters in accordance with the Regulations.
'transmittee' means a person entitled to a share by reason of the death or bankruptcy of a shareholder or otherwise by operation of law.
'uncertificated share' means a share to which article 7.5 applies and references to a share held in uncertificated form shall be construed accordingly.
'writing' means the representation or reproduction of words, symbols or other information in a visible form by any method or combination of methods, whether sent or supplied in electronic form or otherwise.
Unless the context otherwise requires, other words or expressions contained in these articles bear the same meaning as in the Companies Acts as in force on the date when these articles become binding on the Company.
These articles shall be the articles of association of the Company. Neither the Regulations contained in Table A of the Companies Act 1985, nor any other regulation or article prescribed by or pursuant to any statute concerning companies, shall apply to the Company.
1.3 Liability of shareholdersThe Company is a private company limited by shares, as defined in the Companies Acts and, accordingly, subject to the provisions of the Companies Acts, an offer to the public of any shares in or debentures of the Company or any allotment of or agreement to allot any shares or debentures of the Company with a view to those shares or debentures being offered to the public is not permitted. The liability of the shareholders is limited to the amount, if any, unpaid on the shares held by them.
2 DIRECTORS' POWERS AND RESPONSIBILITIES 2.1 Unrestricted objectsThe objects of the Company are unrestricted and there are no limitations on the ability of the Company to borrow monies.
2.2 Directors' general authority
Subject to these articles, the directors are responsible for the management of the
Company's business, for which purpose they may exercise all the powers of the Company.
(a) Subject to these articles, the directors may delegate (in accordance with article 3.1(a)) any of the powers which are conferred on them under these articles:
(i) to such person or committee;
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(ii) by such means (including by power of attorney); (iii) to such an extent;
(iv) in relation to such matters or territories; and
(v) on such terms and conditions;
as they think fit.
(b) If the directors so specify, any such delegation may authorise further delegation of the directors' powers by any person to whom they are delegated.
(c) The directors may revoke any delegation in whole or part, or alter its terms and conditions at any time.
(a) Committees to which the directors delegate any of their powers must follow procedures which are based as far as they are applicable on those provisions of these articles which govern the taking of decisions by directors.
(b) The directors may make rules of procedure for all or any committees, which prevail over rules derived from these articles if they are not consistent with them.
(a) As a general rule, any decision of the directors must be either a unanimous decision under article 3.2 (Unanimous decisions) or a majority decision at a directors' meeting.
(b) If:
(i) the Company only has one director; and
(ii) no provision of these articles requires it to have more than one director (either generally or for the purposes of taking decisions other than majority decisions);
the general rule does not apply, and the director may take decisions without regard to any of the provisions of these articles relating to directors' decision-making.
(a) The directors take a decision in accordance with this article when all eligible directors indicate to each other by any means that they share a common view on a matter.
(b) A unanimous decision may take the form of a resolution in writing, copies of which have been signed by each eligible director or to which each eligible director has otherwise indicated agreement in writing. A proposed resolution in writing must be sent to all directors entitled to receive notice of a meeting.
(c) References in this article to eligible directors are to directors who would have been entitled to vote on the matter had it been proposed as a resolution at a directors' meeting.
(d) For the avoidance of doubt, a unanimous decision taken by all eligible directors (whatever their number and whether or not they would have formed a quorum at a directors' meeting) shall be sufficient for the purposes of this article.
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3.3 Calling a directors' meeting
(a) Any director may call a directors' meeting by giving notice of the meeting to the directors or by authorising the Company secretary (if any) to give such notice.
(b) Notice of any directors' meeting must be given to each director and must indicate: (i) its proposed date and time;
(ii) where it is to take place; and
(iii) if it is anticipated that directors participating in the meeting will not be in the same place, how it is proposed that they should communicate with each other during the meeting.
(c) Notices of directors' meetings or of meetings of committees of the directors which are conveyed in writing shall be sent to each director at the address (including an address for the purposes of electronic communications) given by them to the Company for this purpose.
(d) Notice of a directors' meeting need not be given to directors who waive their entitlement to notice of that meeting in writing. Where such notice is given after the meeting has been held, that does not affect the validity of the meeting, or of any business conducted at it.
(a) Subject to these articles, directors participate in a directors' meeting, or part of a directors' meeting, when:
(i) the meeting has been called and takes place in accordance with these articles; and
(ii) they can each communicate to the others any information or opinions they have on any particular item of the business of the meeting.
(b) In determining whether directors are participating in a directors' meeting, it is irrelevant where any director is.
(c) A person may participate in a meeting of the directors or of a committee of directors by means of:
(i) conference telephone; or
(ii) video conference; or
(iii) by any other form of communications equipment (whether in use at the date of the adoption of these articles or developed subsequently); or
(iv) by a combination of these methods,
provided that persons participating in the meeting are able to communicate interactively and simultaneously with other parties participating in the meeting. A person participating in a meeting in this manner shall be deemed present in person at the meeting.
(d) When a director is acting as an alternate director or when a person is acting as an alternate director for two or more of the directors, such alternate director shall, for the purposes of the quorum, be counted as one for each such person for whom he is acting as an alternate director and, if applicable, as one as a director himself.
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(e) A directors' meeting is to be treated as taking place at any place specified in the notice of meeting as the location of the meeting (provided that one or more directors is physically present at such location) or at such other place where at least one director is physically present as the directors may resolve, failing which at such place as the chairman or other director chairing the meeting is physically present.
3.5 Quorum for directors' meetings
(a) At a directors' meeting, unless a quorum is participating, no proposal is to be voted on, except a proposal to adjourn the meeting to a later time or to call another meeting. This does not apply if, in accordance with these articles, the lack of quorum is due to one or more directors not being entitled to vote on a matter; in such a case, the directors entitled to vote at the meeting may vote whether or not the quorum requirement is satisfied, provided always that this relaxation shall not apply in relation to any proposal to be voted on for the purposes of s175(6) of the Companies Act 2006.
(b) The quorum for directors' meetings may be fixed from time to time by a decision of the directors, but it must never be less than two, provided that if there shall be only one director in office at any particular time there shall be no quorum requirement.
(c) A sole director shall have authority to exercise all the powers and discretions by these articles expressed to be vested in the directors generally.
(d) If the total number of directors appointed for the time being is less than the quorum required, the directors must not take any decision whether at a meeting of the directors or by unanimous decision in accordance with article 3.2 (Unanimous decisions) other than a decision:
(i) to appoint further directors; or
(ii) to call a general meeting so as to enable the shareholders to appoint further directors.
(a) The directors may appoint a director to chair their meetings.
(b) The person so appointed for the time being is known as the chairman. (c) The directors may terminate the chairman's appointment at any time.
(d) If the chairman is not participating in a directors' meeting within ten minutes of the time at which it was to start, the participating directors must appoint one of themselves to chair it.
(a) Subject to these articles, each director participating in a directors' meeting has one vote.
(b) If the numbers of votes for and against a proposal at a directors' meeting are equal, the chairman or other director chairing the meeting shall subject to article 3.7(c) have a casting vote.
(c) The casting vote under article 3.7 (Directors' votes and casting vote) shall not apply if, in accordance with the articles, the chairman or other director is not to be counted as participating in the decision making process for quorum or voting purposes.
(d) A director who is also an alternate director has an additional vote on behalf of each appointor who is:
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(i) not participating in a directors' meeting; and
(ii) would have been entitled to vote if they were participating in it.
(a) Provided he has declared his interest in accordance with article 3.8(b), a director may hold any other office under the Company (except that of auditor) in conjunction with his office of director and subject to section 188 of the Companies Act 2006 (Directors' long term service contacts: requirement of shareholders' approval) on such terms as to remuneration and otherwise as the directors shall arrange.
(b) Without prejudice to the requirements of the Companies Act 2006:
(i) A director who is in any way, whether directly or indirectly, interested in a proposed transaction or arrangement with the Company shall declare the nature and extent of his interest to the other directors before the Company enters into the transaction or arrangement.
(ii) A director who is in any way, whether directly or indirectly, interested in a transaction or arrangement that has been entered into by the Company shall declare the nature and extent of his interest to the other directors as soon as is reasonably practicable, unless the interest has already been declared under article 3.8(b)(i) above.
(iii) Any declaration required by article 3.8(b)(i) may (but need not) be made at a meeting of the directors or by notice in writing in accordance with section 184 of the Companies Act 2006 or by general notice in accordance with section 185 of the Companies Act 2006. Any declaration required by article 3.8(b)(ii) must be made at a meeting of the directors or by notice in writing in accordance with section 184 of the Companies Act 2006 or by general notice in accordance with section 185 of the Companies Act 2006.
(iv) If a declaration made under article 3.8(b)(i) or 3.8(b)(ii) above proves to be, or becomes, inaccurate or incomplete, a further declaration must be made under article 3.8(b)(i) or 3.8(b)(ii) as appropriate.
(v) A director need not declare an interest under this article 3.8(b):
(A) if it cannot reasonably be regarded as likely to give rise to a conflict of interest;
(B) if, or to the extent that, the other directors are already aware of it (and for this purpose the other directors are treated as aware of anything of which they ought reasonably to be aware);
(C) if, or to the extent that, it concerns terms of his service contract that have been or are to be considered by a meeting of the directors or by a committee of the directors appointed for the purpose under these articles; or
(D) if the director is not aware of his interest or is not aware of the transaction or arrangement in question (and for this purpose a director is treated as being aware of matters of which he ought reasonably to be aware).
(vi) Subject to the provisions of the Companies Act 2006 and provided that he has declared to the directors the nature and extent of any direct or indirect interest of his in accordance with article 3.8(b), or where 3.8(b)(v) applies and no declaration of
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interest is required and subject only to any limitation on voting imposed (i) by order of the board or (ii) otherwise by virtue of any authorisation given pursuant to article
3.8(c)(iii), which may be relevant to the circumstances, a director notwithstanding his office:
(A) may be a party to, or otherwise be interested in, any transaction or arrangement with the Company or in which the Company is directly or indirectly interested and he may receive and retain for his own benefit all profits and advantages accruing to him in respect thereof; and
(B) may act by himself or through his firm in a professional capacity for the Company (otherwise than as auditor), and in any such case on such terms as to remuneration and otherwise as the directors may decide; and
(C) may be a director or other officer of, or employed by, or a party to any transaction or arrangement with, or otherwise be interested in, any body corporate in which the Company is directly or indirectly interested; and
(D) notwithstanding his interest, may vote on any contract, arrangement or matter in which he is interested and be taken into account in determining a quorum at any meeting at which the same is considered.
(c) Directors authorisation for the purposes of section 175 of the Companies Act 2006.
(i) For the purposes of section 175 of the Companies Act 2006, the directors may authorise any matter proposed to them in accordance with these articles which would, if not so authorised, involve a breach of duty by a director under that section, including, without limitation, any matter which relates to a situation in which a director has, or can have, an interest which conflicts, or possibly may conflict, with the interests of the Company.
(ii) Any such authorisation will be effective only if:
(A) any requirement as to quorum at the meeting at which the matter is considered is met without counting the director in question or any other interested director; and
(B) the matter was agreed to without their voting or would have been agreed to if their votes had not been counted.
(iii) The directors may (whether at the time of the giving of the authorisation or subsequently) make any such authorisation subject to any express limits or conditions but such authorisation is otherwise given to the fullest extent permitted.
(iv) The directors may vary or terminate any such authorisation at any time.
(v) For the purposes of these articles, a conflict of interest includes a conflict of interest and duty and a conflict of duties, and interest includes both direct and indirect interests.
(d) A director shall be under no duty to the Company with respect to any information which he obtains or has obtained otherwise than as a director of the Company and in respect of which he owes a duty of confidentiality to another person. However, to the extent that his relationship with that other person gives rise to a conflict or possible conflict of interest, this article applies only if the existence of that relationship has been authorised by the directors pursuant to article 3.8(c). In particular, the director shall not be in breach of the general duties he owes to the Company by virtue of sections 171 to 177 of the Companies Act 2006 because he fails:
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