SEC.

33

CONTRACTS BETWEEN TWO OR MORE CORPORATIONS WHICH HAVE INTERLOCKING

DIRECTORS ARE VALID.

Interlocking directorate refers to the practice of members of a corporate board of directors serving on the
boards of multiple corporations. A person that sits on multiple boards is known as a multiple director. Two firms
have a direct interlock if a director or executive of one firm is also a director of the other, and an indirect
interlock if a director of each sits on the board of a third firm.

EXCEPT IN FRAUD AND CONTRACT IS FAIR AND REASONABLE.

IF THE INTEREST OF THE INTERLOCKING DIRECTOR IS SUBSTANTIAL AND HIS INTEREST IN

OTHER IS MERELY NOMINAL, THE RULES OF SECTION 32 SHALL APPLY.

STOCKHOLDING EXCEEDING 20% OF OUTSTANDING CAPITAL STOCK SHALL BE CONSIDER

SUBSTANTIAL.

SEC.32:Dealings of directors, trustees or officers with the corporation. unless all the following conditions are
present:

1. That the presence of such director or trustee in the board meeting in which the contract was approved
was not necessary to constitute a quorum for such meeting;

2. That the vote of such director or trustee was not necessary for the approval of the contract;

3. That the contract is fair and reasonable under the circumstances; and

4. That in case of an officer, the contract has been previously authorized by the board of directors.

IF BOTH SUBSTANTIAL OR NOMINAL IN CORP NO NEED TO APPLY SEC.32 BUT CONTRACT SHOULD
BE VALID AND FAIR & REASONABLE.

SEC 34

A DIRECTOR, BY VIRTUE OF HIS OFFICE, ACQUIRES FOR HIMSELF BUSINESS OPPORTUNITY

WHICH SHOULD BELONG TO THE CORPORATION, THEREBY OBTAINING PROFITS TO THE
PREJUDICE OF CORPORATION IS GUILTY.

GUILTY DIRECTOR WILL BE EXEMPTED FROM LIABILITY TO CORP IF HIS DISLYAL ACT SI
RATIFIED.

HE SHOULD ACCOUNT TO THE LATTER FOR ALL PROFITS BY REFUNDING THE SAME,
UNLESS RATIFIED BY VOTE OF STOCKHOLDERS OWNING AT LEAST 2/3 OF OUTSTANDING
CAPITAL STOCK. NOTWITHSTANDING THE FACT THAT DIRECTOR RISKED HIS OWN FUNDS
IN VENTURE.

SEC.35

BY-LAWS OF A CORPORATION MAY CREATE AN EXECUTIVE COMMITTEE OF NOT LESS THAN

(3) MEMBERS OF BOARD, TO BE APPOINTED BY BOARD.

SAID COMMITTEE MAY ACT, BY MAJORITY VOTE OF ALL ITS MEMBER, ON SUCH SPECIFIC
MATTER WITHIN COMPETENCE OF BOARD, AS MAY DELEGATED BY-LAWS OR ON MAJORITY
VOTE OF THE BOARD.
 EXCEPT WITH RESPECT TO:

1) APPROVAL OF ANY ACTION FOR WHICH SHAREHOLDER APPROVAL IS ALSO REQUIRED;

2) FILLING OF VACANCIES IN THE BOARD;

3) AMENDMENT OR REPEL OF BY-LAWS OR THE ADOPTION OF NEW BY-LAWS

4) AMENDMENT OR REPEAL OF ANY RESOLUTION OF THE BOARD WHICH BY EXPRESS TERMS

IS NOT SO AMENDABLE OR REPEALABLE*

5) DISTRIBUTION OF CASH DIVIDENDS TO SHAREHOLDERS