Common use of Board Voting Clause in Contracts

Board Voting. Resolutions of the board of directors shall be adopted by a majority vote (whether present in person or by proxy) at a duly convened meeting. However the following actions, because of their potentially substantial and material impact on the interests and investments of the stock holders may not be taken without at least one representative from party A and one representative of party B being recorded in the majority vote. (a) Amendment of articles of association (b) Increase, reduction or assignment of registered capital and the adjustment of each party’s share of interest in the registered capital of the company. (c) Merger or consolidation of the company with ant other economic organization or reorganization of the company; and, extension, termination, liquidation, or dissolution of the company. (d) Approval of any change in the scope of the business of the company, outside the normal course of business. (e) Transfer,sale,lease,or other manner of disposition of the business or assets of the company, in whole or in part, the acquisition of businesses or assets of any other company or entity or the making of investments that is not expected to be undertaken in the ordinary course of business. (f) The partners expect that profits will be retained by the JV to grow the business; however after a period of sustained profitability the partners expect a pay out ratio of profits to be in the 50% range. For any declaration of dividends in excess of 70% of prior year’s earnings the majority vote must include one representative from each of party A and party B. (g) Determination of the amounts to be allocated to each of the Three funds (h) Pledge or encumber the assets of the corporation (i.e. the granting of security interest of the company ) (i) Approve or implement capital expenditures which are not provided for in the annual business plan or exceed by 25% the capital expenditure budget of the annual business plan. (j) The partners agree that the board will manage the operating budget of the annual business plan of the company, and implement revisions as they may occur from time to time. However, if any such revision results are outside the ordinary course of business, as defined by in a variation by more than 35% of operating profit or more that $500k of reduced cash flow then the majority shall include one representative from each of party A and B. (k) Change legal counsel representing the company; or, to appoint or change the independent auditor of the company. To adopt or implement a material change in the accounting procedures or principles of the company. (l) Selection of insurers and the determination of insurance coverage and premium amounts for the company