Common use of Constitutions of JV Entities Clause in Contracts

Constitutions of JV Entities. At or before Completion, each of Rio Tinto and BHP Billiton must procure that each JV Entity which is its wholly owned Subsidiary has the following provisions in its constitution: (a) a provision which permits the directors to act in the best interests of the holding company of the JV Entity if: (i) the director acts in good faith in the best interests of the holding company; and (ii) the JV Entity is not insolvent at the time the director acts and does not become insolvent because of the director’s act; and (b) a provision that provides that if a director, or a person who appointed the director, has an interest or a duty to an Owner and its Related Corporations in relation to a matter that relates to the affairs of the JV Entity, and the director complies with section 191 of the Corporations Act, then (subject to the Corporations Act): (i) the director may be counted in a quorum at a board meeting that considers, and is entitled to vote on, any matter that relates to the interest or duty; (ii) the JV Entity may proceed with any transaction that relates to the interest or duty and the director may participate in the execution of any relevant document by or on behalf of the JV Entity; and (iii) the JV Entity cannot avoid the transaction merely because of the existence of the interest or duty.