Callie and Marie Seymour are musically talented sisters who, after years of touring, decide to open up a music store in Melbourne. The store is incorporated as a company called Calamari Music Pty Ltd. Both Callie and Marie are listed as directors and each hold 30% of the companys shares. The remaining 40% of shares are held by three fans of Callie and Maries music (Pearl 10%, Marina 10%, and Octavio 20%). Due to Callie and Maries moderate fame as musicians, their presence and occasional impromptu performances entice customers to come into the store. The stores opening year is very profitable but Callie and Marie want more capital to grow their business and open a second store however are reluctant to input this capital themselves. Calamari Music calls a Special General Meeting to alter the constitution. The alteration would require all shareholders that hold less than 15% of the companys shares to repay the initial purchase price of their shares as additional capital once each year. Proper notice is given and all 5 shareholders attend the Special General Meeting. Callie, Marie and Octavio vote for the alteration, Pearl and Marina vote against. Despite the shock of the constitutional alteration, Pearl and Marina remain shareholders within the company as they continue to be faithful fans of Callie and Marie. Following the Special General Meeting, Ink Records Ltd gets in contact with Calamari Music Pty Ltd. Ink Records is the record label that owns the copyright to all of Callie and Maries songs, imagery and branding that Callie and Marie have been using to promote Calamari Music. Ink Records demand that Calamari Music contract for a license to use this material in the promotion of their store. Ink Records and Calamari Music agree to the following terms: Ink Records Ltd agrees to license the use of Callie and Marie Seymours music, branding, imagery, and any other affiliated materials to Calamari Music Pty Ltd on the condition that Callie Seymour or Marie Seymour collectively or individually maintain at least 80% of the shareholding in Calamari Music Pty Ltd. This term comes into effect 10 days from the signing of the contract. Due to the short time limit in the contract, Callie and Marie call Octavio to come to the store for a quick Special General Meeting. At this meeting, Callie and Marie resolve to alter the constitution to expropriate the shares of shareholders who own less than 15% of shares. Callie, Marie and Octavio once again vote for the alteration. The next day, Pearl and Marina are notified of the new change to the constitution and are told to transfer their shares to Callie and Marie. Distraught and confused, Pearl and Marina come to you for advice.

1. Explain how constitutional alteration takes place. Advise Pearl and Marina whether the first constitutional alteration (that requires them to repay their initial share price) can be enforced against them?

2. Advise Pearl and Marina whether the second alteration to the constitution for the expropriation of their shares is valid. Required to answer. Multi Line Text.