Please see my homework within the images below. Written assignment is based on the below.

CHAPTER FOUR Duty of Care and Obligations of Good Faith ONE DAY WHILE YOU ARE hard at work, a senior partner in the firm's corporate department calls you into her office and tells you about a client, a public company called Heavenly Chocolates, Inc. ("HCI"). Experiencing Assignment 6: Heavenly Chocolates, Inc. FACTS: The partner explains that HCI has been a client of the firm for quite some time and asks you to "sit in" on a conference call with the President of HCI, Olive Sweetz. The call is going to start in an hour, but you have some time before the call to do some quick research on HCI. You learn the following information: HCI is a Delaware corporation that manufactures and distributes high-quality chocolates. HCI has been very successful for many years. The company operates based upon a core philosophy that HCI customers have purpose refined tastes and appreciate the care and quality that goes into HCI's chocolate products. You also learn that chocolate is grown on a small tropical tree known as the Theobroma cacao, usually called simply "cacao." (Pronounced: ka-KOW. Theobroma is Greek for "food of the gods.") Cacao is native to Central and South America, but it is grown commercially throughout the tropics. About 70% of the world's cacao is grown in Africa. There are three main kinds of cacao trees grown throughout the world, Forastero, Criollo and Trinitario, each with their own flavor profiles and growth characteristics. As a general rule, Forastero beans are used as bulk beans and Trinitario and Criollo are used as "flavor beans." Many chocolate bars combine both kinds of beans, bulk beans for consistent chocolate flavor and flavor beans for unique tasting notes. Although the overwhelming majority of cacao beans produced today are of the bulk variety, 12951EXPERIENCING BUSINES | 296 HCI uses almost exclusively "flavor beans" in its chocolate, which account for its superior taste and quality. During the conference call, you learn that Ms. Sweetz, and HCI's senior management has decided that HCI should purchase a chocolate plantation, located on a small island in the Caribbean. The plantation produces only flavor beans. The purchase represents a substantial expenditure for HCI and could create financial problems down the road. However, if the risk pays off, it will assure a good supply source for HCI, especially in the event of price fluctuations in the market for flavor beans. Ms. Sweetz also explains that, even if the move does not produce any business advantages, it will ensure that HCI is producing a higher quality chocolate product of which all of HCI can be proud. Ms. Sweetz feels that this, in and of itself, makes the transaction "worthwhile." However, Ms. Sweetz is concerned that this transaction (because of its size and the risk involved) might result in a suit from some disgruntled HCI shareholders. HCI has a total of seven directors on its board of directors. Ms. Sweetz and two other senior managers hold three of the board seats. The other four directors are not employed by HCI in any other capacity. HCI would like your firm to guide the HCI board of directors through the approval of the purchase to strengthen its position in the event of any such lawsuit. As the discussion continues, you also learn that HCI has recently discovered that the purchase of the plantation might require payments to local officials in order to "process" and approve the sale. It is possible that such payments could be construed as bribes, which would violate U.S. Federal law. The HCI board is confident that even if the company were found to have violated a law by making these payments, the penalty for any such payments would be a fine, and there would be no further consequences. HCI is willing to pay the fine, but HCI wants you to have this information just in case it would alter your analysis about the plantation purchase. (The board does not want you to investigate or evaluate the illegality of any such payments or to make any independent evaluation of any potential criminal penalty.) ASSIGNMENT: The partner from your firm asks you to prepare guidelines for the HCI directors to follow in evaluating (and approving) the purchase of the Caribbean plantation. In addition please include an explanation of the standard by which any shareholder's claim against HCI arising out of the plantation purchase would be evaluated. The HCI directors do not want case citations. They want toCHAPTER FOUR: DUTY OF CARE AND OBLIGATIONS OF GOOD FAITH 297 | understand the proper procedures, the risks involved and the legal standards by which their actions might be judged. This Assignment does not need to be completed, and should not be completed, until the end of the section. However, as you study the cases and other materials that follow, it might be helpful to do so with a view toward providing assistance to the HCI directors. Some of the materials in the chapter will relate more than others to the issues facing HCI. However, the materials are designed to build your understanding of the fiduciary duty issues that arise in evaluating actions taken by a corporation's board of directors and assist you in addressing HCI's concerns and putting them in context. Please keep HCI's issues and the questions presented by the assignment in mind while reading the materials that follow. SECTION I: The Power and Scope of Corporate Authority The directors who serve on a corporation's board of directors are not the owners of the corporation. They are stewards or trustees who are charged with guiding the corporation for the benefit of its shareholders. Because of that role, there are guidelines about the actions that may be taken on behalf of the corporation and guidelines about how the directors perform their roles and the duties associated with those roles. Typically, a board of directors is charged with the responsibility of maximizing the value of the corporation for its shareholders. Actions that are not consistent with this objective may not be deemed to be within the "scope" of the corporation's authority. In addition, there may be limits that are set in the corporation's Articles of Incorporation or bylaws, which might further limit the scope of corporate actions. In evaluating a decision of a corporation's board of directors, there is often significant latitude granted with respect to the question of how the board might maximize the corporation's value. However, because of the board's obligations to the corporation's shareholders, it is not permitted to ask whether to maximize the corporation's value, only how to maximize the corporation's value. A. Purpose of the Corporation The significant actions taken by a corporation must be authorized or sanctioned by its board of directors. Corporations formed in the current business environment are typically authorized to act for any lawful purpose. This broad statement of purpose often raises questions about what limitations (beyond the limits imposed by law) are placed on a corporation or its board that is already authorized to act for any lawful purpose. Historically, when| 298 EXPERIENCING BUSINESS ORGANIZATIONS corporations had more limited purposes, actions taken "outside of the corporate purpose" were considered to be void or voidable as ultra vires. Currently, this doctrine is seldom used, and issues that arise with respect to the actions of a corporation that historically might have been challenged as "ultra vires" would now typically be challenged under the category of "waste." However, it remains important to understand the concept that certain actions are beyond the corporate purpose. Wiswall v. The Greenville and Raleigh Plank Road Company 56 N.C. 183, 3 Jones Eq. 183 (N.C. 1857) PEARSON, J.: It was conceded in the argument that a corporation has a right to restrain by injunction the corporators from doing any act which is not embraced within the scope and purpose for which the corporate body was created, and which would be a violation of the charter; not only on the ground that such act would operate injuriously upon the rights and interests of the corporators, but on the further ground that a forfeiture of the charter would be thereby incurred. So, the only question made by the demurrer is this: Has the company power to purchase stages and horses to be run upon the said road?-and has it likewise power to enter into a contract to carry the United States mail on the road by means of such stages? This question must be decided by a construction of the charter. We have examined it, and declare our opinion to be, that no such power is given to the company. The first section sets out the object of the incorporation, to wit, "for the purpose of effecting a communication by means of a plank road from Greenville to Raleigh." The third section grants the franchise of incorporation, and gives all the powers, rights and privileges necessary "for the purposes mentioned in this act." The ninth section invests the president and directors of the company "with all