SARTORIUS STEDIM BIOTECH A société anonyme with capital of Euros 15,367,238 Registered office: Zone Industrielle Les Paluds Avenue de Jouques 13400 AUBAGNE 314 093 352 R.C.S. MARSEILLE ARTICLES OF ASSOCIATION UPDATED AS OF 18 FEBRUARY 2016 Title I - Article 5 modified
TITLE 1 SPECIFIC FEATURES OF THIS SOCIETE ANONYME Article 1: Name The name of the company is: Sartorius Stedim Biotech. Any and all deeds and documents issued by the company shall systematically include the name of the company, immediately preceded or followed by the words "société anonyme or the initials "S.A.", and a statement of the amount of the share capital. Article 2: Registered Office The registered office shall be located at Aubagne (13400) Zone Industrielle des Paluds, avenue de Jouques. It may be transferred to any other location in the same district (département) or in a neighbouring département by simple decision of the Board of Directors, subject to ratification by the next Annual Ordinary General Meeting and anywhere else in France pursuant to a decision by the Extraordinary General Meeting of Shareholders. When the Board of Directors decides on a transfer, the latter is authorised to modify the articles of association accordingly. Article 3: Duration The Company s duration shall expire 99 years as of the date of its registration at the Commercial Register (Registre du Commerce et des Sociétés), except in case of dissolution or extension pursuant to these articles of association. Article 4: Purpose The Company s purpose both in France and abroad is; - to purchase, develop, administrate and manage a portfolio of equity security, securities, voting rights and other social rights in all companies regardless of their activity and this, by all means including by way of setting up of new companies, contribution in kind of any types of social rights, subscription rights, mergers, purchases of other social rights or incorporation of companies; - to manage, conduct and coordinate the activities of its subsidiaries and affiliates; when applicable, to provide to said companies all services of an administrative, financial, accounting and legal nature and any opinion and advise or to order any studies or researches that are necessary for their development or growth; - and more generally, all financial, commercial, industrial, personal and real property operations linked, directly or indirectly, to the above-mentioned corporate purpose or to all other complementary, related or similar purposes, which may promote the development or accomplishment thereof. 2
Article 5: Share Capital The share capital is set at the sum of fifteen million three hundred and sixty-seven thousand two hundred thirty-eight euros ( 15,367,238). It is divided into fifteen million three hundred and sixty-seven thousand two hundred thirty-eight (15,367,238) shares of the nominal unit value of one euro (1 ), which have been fully subscribed and paid. Article 6: Financial Year The financial year is of 12 months beginning on the 1 st of January and ending on the 31 st of December of every year. TITLE 2 FORM AND METHODS OF CONVEYANCE OF SECURITIES REPRESENTING SHAREHOLDERS RIGHTS Article 1: Form of shares Shares shall be in registered or bearer form at the choice of the shareholder. They shall be registered in accounts under the conditions set forth by law. Pursuant to the applicable legal and regulatory provisions, the company is authorised to search for the identity of bearer shareholders. Article 2: Transfer and conveyance of shares The shares are freely negotiable. The transfer and conveyance of shares shall take place in accordance with the existing provisions of applicable law and in particular those concerning the dematerialisation of securities. Article 3: Double voting right A double voting right is conferred to the holders of registered shares that are fully paid up and that have been registered in the name of the same holder for at least four years. In case of a capital increase through the incorporation of reserves, profits or issuance premiums, this double voting right shall accrue to the benefit of the new shares allotted free of charge to shareholders, upon their issuance, on the basis of former shares for which they already benefit from that right. 3
TITLE 3 GENERAL PROVISIONS APPLICABLE TO THE COMPANY Article 1: Form The owners of the shares created hereunder or in the future hereby form a société anonyme governed by the applicable laws and by these articles of association. Article 2: Modification of share capital A. Increase in share capital Share capital may be increased in any way and manner authorised by law. Only the Extraordinary General Meeting may decide on a capital increase, upon the report of the Board of Directors containing the indications required by law. In accordance with the law, the Shareholders have, proportionally to the amount of their shares, a preferential right to subscribe to shares issued for cash so as to carry out a capital increase, which right they may individually waive. They also benefit from a right to subscribe for excess shares if expressly decided by the General Meeting. The right to the allotment of new shares, following the incorporation into capital of reserves, profits or issuance premiums belongs to the bare owner, subject to the rights of the beneficial owner. B. Decrease in share capital The Extraordinary General Meeting of Shareholders may also, subject to the rights of creditors, as applicable, authorise or decide on a decrease in share capital for any reason and in any way, but in no event may the decrease in share capital infringe the principle of the equality of Shareholders. A decrease in share capital, regardless of the cause, to an amount below the legal minimum can only be decided under the condition precedent of a capital increase intended to restore it to at least the legal minimum unless the company converts its corporate form into another form not requiring capital higher than the share capital following its reduction. Otherwise, any interested party may request the judicial dissolution of the company but such dissolution may not be ordered if, on the date the court rules on the merits, the situation has been brought into compliance. Article 3: Payment of the shares Shares subscribed for cash upon an increase of share capital must be paid up as per the conditions set by the Extraordinary General Meeting, with at least one fourth of their par value being paid up upon subscription and, as the case may be, the full amount of the issuance premium. The balance is required to be paid in one or several times upon the call of the Board of Directors, within a period of five years as of the date of completion of the capital increase. Cash Calls shall be notified to subscribers at least fifteen days before each scheduled payment date, by registered letter with return notice, sent to every holder of shares. 4
Any delay in payment of the sums owed with respect to the outstanding amount of the shares shall carry, automatically and without any formality whatsoever being required, interest at the legal interest rate, as of the due payment date, without prejudice to any action in personam that the company may bring against the defaulting shareholder and any injunctive relief measures provided by law. Article 4: Rights and obligations attached to the shares I. Each share provides entitlement to a pro rata of earnings and assets of the share capital it represents. In addition, it provides entitlement to vote and to be represented at General Meetings under the legal and statutory conditions. II. Shareholders are liable up to the amount of the par value of the shares held by them. Beyond that, any calls are prohibited. The rights and obligations attached to a share follow the share into whoever s hands it may pass. Ownership of a share automatically entails adherence to the articles of association of the company and to the decisions of the General Meetings. III. The heirs, creditors, beneficiaries or other representatives of a Shareholder may not require the affixing of seals on the property or assets of the company, seek the division of assets or sale by licitation, or in any way interfere with the company s management. For the exercise of their rights, they shall refer to the corporate inventory records and decisions of the General Meeting. IV. Whenever it is necessary to own more than one share to exercise a particular right, in case of an exchange, combination or allotment of shares, or as a result of a capital increase or decrease, merger or other corporate transaction, the owners of isolated shares or of a number below that required may only exercise that right provided they arrange personally for the pooling or, as the case may be, the purchase or sale of the necessary shares. V. Unless prohibited by law, all of the shares and any tax exemptions or charges, or any taxes for which the company may be liable, shall be pooled before any allocation or refund, during the course of the company s existence or of its liquidation, such that, in view of their respective par value and of their respective rights, all shares of the same category then in existence receive the same net amount. Article 5: Indivisibility of shares Bare ownership Beneficial ownership I. The shares shall be indivisible with respect to the company. In their relations with the company, undivided joint owners (propriétaires indivis) of shares are required to be represented by a single person among them, who shall be deemed the sole owner, or by a sole representative. In case of dissent, the sole representative may be appointed by the courts upon the request of the more diligent of the joint owners. II. Except in case of agreement to the contrary that has been notified to the company, beneficial owners of shares validly represent the bare owners with respect to the company. However, the voting right belongs to the bare owner at extraordinary general meetings. Article 6: Board of Directors 1 Subject to legal exemptions, the Company is directed by a Board of Directors composed of a minimum of three members and a maximum of eighteen. 5
The Board of Directors is composed of a balance number of men and women. 2 During the duration of the company s existence, directors shall be appointed or renewed in office by the ordinary general meeting. However, in case of merger, directors may be appointed by the extraordinary general meeting deciding on the transaction. 3 Each director must, during his entire term of office, own at least one share. 4 Directors have a term of office of three years. Directors duties shall cease at the end of the ordinary general meeting deciding on the accounts of the financial year elapsed, held in the year when the term of office of the director concerned expires. Directors may be renewed in office. They may be removed from office at any time by the ordinary general meeting. 5 No person may be appointed director if, having reached the age of 75, his appointment would result in more than one third of the members of the board of directors exceeding that age. If that proportion is exceeded, the oldest director shall automatically be deemed to have resigned at the end of the ordinary general meeting approving the accounts of the financial year when exceeded. 6 Directors may be individuals or legal entities. Directors who are legal entities are required, upon their appointment, to appoint a permanent representative who is subject to the same conditions and obligations and who incurs the same liability as though personally a director, without prejudice to the several liability of the legal entity represented. When the legal entity who is a director terminates the mandate given to its permanent representative, it shall promptly notify the Company, by registered letter, of its decision as well as the identity of its new permanent representative. The same applies in the event of death or resignation of the permanent representative. 7 If one or more directors seats become vacant between two general meetings due to death or resignation, the board of directors may proceed to make appointments on an interim basis so as to fill the seats on the Board. These appointments must be made within three months of the vacancy, when the number of directors has fallen below the minimum under the articles of association but without falling below the statutory minimum. Interim appointments made in this manner by the Board are subject to ratification by the next ordinary general meeting. Failing ratification, the decisions taken or the acts accomplished shall nonetheless remain valid. When the number of directors falls below the statutory minimum, the directors remaining in office are required to immediately call an ordinary meeting so as to fill the vacant seats on the Board. A director appointed in replacement of another shall only remain in office for the remaining term of office of his predecessor. 8 Directors who are individuals cannot concomitantly hold more than five seats on the board of directors or supervisory boards of sociétés anonymes having their registered office in metropolitan France, subject to the exceptions provided by law. 9 A Company employee may not be appointed a director unless his employment agreement corresponds to effective employment. He shall not lose the benefit of his employment agreement. The number of directors bound to the Company by an employment agreement may not exceed one third of the directors in office. 6
Article 7: Organisation and management of the Board of Directors 1 - The Board of Directors elects a Chairman from among its members who are individuals and determines his remuneration. It sets the duration of the Chairman s term of office, which may not exceed his office as director. 2 No person may be appointed Chairman of the Board of Directors if over the age of 75. If the Chairman in office exceeds that age, he shall be deemed to have automatically resigned. 3 The Chairman represents the Board of Directors. He organises and directs its work, and reports on it to the general meeting. He ensures the proper operation of the Company s decision-making bodies and ensures, in particular, that the directors are themselves in a position to fulfil their duties. 4 In case of absence or impediment affecting the Chairman, the Board of Directors appoints an acting Chairman of the meeting. 5 - The Board of Directors appoints a secretary who may be chosen, either from among the directors or outside them. The secretary shall be replaced by simple decision of the Board. Article 8: Meetings and decisions of the Board 1 - The Board of Directors meets, upon the call of its Chairman, as often as required by the interest of the Company. However, directors representing at least one third of the members of the Board of Directors may, by precisely indicating the meeting s agenda, call a Board if it has not met within the last two months. The CEO, if not chairing the Board of Directors, may request the Chairman to call a Board meeting with a specified agenda. 2 The meeting shall take place at the registered office or in any other location indicated in the notice of call. The call to meeting, indicating the agenda, should be sent at least 7 days beforehand by letter, telegram, telex or fax. The call may be verbal and the meeting may be held immediately if all of the directors are in agreement. 3 For the Board of Directors to validly deliberate, at least one half of the directors are required to be present or represented. The Board s decisions are taken at a majority of the members present or represented. The acting Chairman has a casting vote. 4 An attendance sheet shall be held and signed by directors participating in the Board meeting. 5 The internal regulations established by the Board of Directors may provide that directors participating in a Board meeting by videoconference, teleconference or others means of telecommunication allowing the identification of participants and ensuring their effective participation in accordance with the applicable regulations, are deemed present for the purposes of calculating quorum and majority. This provision shall not apply for the adoption of the following decisions: - appointments, remuneration, removal of the Chairman, CEO and Executive Vice Presidents, - closing of annual accounts, consolidated accounts and preparation of management report and report on the management of the group. 7
6 The Board of Directors deliberations are recorded in minutes held in accordance with the applicable laws. The minutes are signed by the acting Chairman and by one or two directors. Copies or excerpts of the minutes of the Board of Directors deliberations shall be validly certified by the Chairman or by the CEO. Article 9: Powers of the Board of Directors 1 - The Board of Directors determines the Company s business guidelines and ensures that they are implemented. Subject to the powers expressly granted by law to shareholders meetings and within the limit of its corporate objects, it deals with any matter relating to the proper running of the Company and by its deliberations governs the affairs of the company. In its dealings with third parties, the Company is bound even by acts of the Board of Directors that are outside its corporate purpose, unless it can prove that the third party knew that that act was ultra vires or could not reasonably have been unaware thereof in view of the circumstances, it being specified that mere publication of the articles of association does not suffice to establish proof thereof. 2 - The Board of Directors shall carry out any controls and verifications it deems appropriate. Each director shall receive the information necessary to the performance of his duties and may obtain all documents he considers useful from the General Management. 3 - The Board of Directors may give all delegations of authority to the representatives of its choice within the limit of its authority under the law and under these articles of association. The Board may decide on the creation of review committees in charge of studying the issues that the Board or its Chairman submits to it. Article 10: General Management Mode of operation In accordance with Article L. 225-51-1 of the Commercial Code, the Company s General Management is ensured, under his responsibility, either by the Chairman of the Board of Directors or by any other individual appointed by the Board of Directors with the title of CEO. The choice between these two modes of operation of General Management is made by the Board of Directors. The Board s decision concerning the choice of mode of operation of General Management is taken by majority vote of the directors present or represented. Shareholders and third parties are informed of the choice made by the Board of Directors under the conditions set forth by the applicable regulations. The Board of Directors may modify the option chosen at any time. A change in the mode of operation of General Management shall not entail any modification of the articles of association. General Management Depending on the mode of exercise chosen by the Board of Directors, the Chairman or a CEO shall ensure, under his responsibility, the General Management of the Company. 8
The CEO is appointed by the Board of Directors, which sets the duration of his term of office, determines his remuneration and, as applicable, the restrictions on his powers. For the performance of his duties, the CEO must be under the age of 75. When this age limit is exceeded during the course of his term of office, the CEO shall be deemed to have automatically resigned and a new CEO shall be appointed. The CEO may be removed from office at any time by the Board of Directors. Removal of a CEO who is not also the chairman may give rise to damages if decided without valid cause. Powers of the CEO The CEO is vested with the broadest powers to act in all circumstances in the name of the Company. The CEO shall exercise these powers within the limit of the corporate objects, and subject to the powers expressly granted by law to shareholders meetings and to the Board of Directors. The CEO represents the Company in its dealings with third parties. The Company is bound even by those acts of the CEO that are outside its corporate objects, unless it can prove that the third party knew that that act was ultra vires or could not reasonably have been unaware thereof in view of the circumstances, it being specified that mere publication of the articles of association does not suffice to establish proof thereof. Executive Vice Presidents Upon the motion of the CEO, whether this position is filled by the Chairman of the Board of Directors or by another person, the Board of Directors may name one or more individuals with responsibility for assisting the CEO with the title of Executive Vice Presidents. The maximum number of Executive Vice Presidents may not exceed five. In agreement with the CEO, the Board of Directors shall determine the scope and the extent of the powers granted to Executive Vice Presidents and set their remuneration. As regards third parties, the Executive Vice President or the Vice Executive Presidents have the same powers as the CEO. Upon the cessation of his duties or in case of impediment affecting the CEO, the Executive Vice Presidents shall retain, unless otherwise decided by the Board of Directors, their office and authority until the appointment of a new CEO. Upon the motion of the CEO, Executive Vice Presidents may be removed from office at any time. The removal of the Executive Vice Presidents may give rise to damages if decided without valid cause. Article 11: Related party agreements 1 Directors other than legal entities, the CEO and the Executive Vice Presidents prohibited from contracting any form of borrowing from the Company, obtaining any current account or other overdraft facility from it, or endorsement or guarantee by it of their commitments with third parties. This prohibition also applies to the permanent representatives of directors who are legal entities, to the spouse, ascendants and descendants of the persons listed above as well as to any intermediary. 2 Any agreement concluded directly or indirectly or via any intermediary between the Company and its CEO, one of its Executive Vice Presidents one of its directors, or one of its Shareholders holding more than 10% of the voting rights or, if the Shareholder is a legal entity, the company controlling it 9
within the meaning of Article L. 233-3 of the Commercial Code, requires the prior authorisation of the Board of Directors. The same applies to agreements to which one of the persons listed above has an indirect interest. Agreements concluded between the Company and an undertaking are also subject to the Board of Directors prior authorisation, if the CEO, one of the Executive Vice Presidents or one of the directors of the Company is the owner, unlimited liability partner, manager, director, member of the supervisory board or more generally a corporate officer of that undertaking. These agreements must be authorised and approved under the conditions set forth by Article L. 225-40 of the Commercial Code. 3 Agreements involving day-to-day transactions concluded at arm s length shall not be subject to the authorisation and approval procedure set forth by Articles L. 225-38 et seq. of the Commercial Code. It is the same for agreements occurring between the Company and another Company of which she holds directly or indirectly, all of the capital, if necessary deduction of the minimum number of shares required to satisfy the requirements of Article 1832 of the Civil code or articles L. 225-1 and L. 226-1 of the Commerce Code. Article 12: Statutory Auditor Control is exercised by one or two Statutory Auditors and, as the case may be, by one or two alternate Statutory Auditors who are appointed and carry out their duties in accordance with the law. Article 13: General Meetings Shareholders decisions are taken in General Meeting. Ordinary General Meetings are those called to take any decisions that do not modify the articles of association. Extraordinary General Meetings are those called to decide or authorise direct or indirect modifications to the articles of association. A special meeting of the holders of shares of a specified category is required to decide on any modification to the rights of the shares of that category. The decisions of General Meetings are binding on all Shareholders, even if absent, dissenting or lacking capacity. Article 14: General Meetings: Calls to meetings Meeting Officers - Minutes 1 - General meetings are called by the Board of Directors or, otherwise, by the Statutory Auditor or by any person empowered in that aim. General meetings are held at the registered office or at any other location indicated in the call to meeting. The company is required, prior to the holding of any meeting of Shareholders, to publish the notice required by Article R. 225-73 of the Commercial Code in the Bulletin des Annonces Légales Obligatoires at least thirty-five clear days before the date of the meeting. 10
Calls to general meetings are made by a notice placed in a publication authorised to publish legal notices in the département of the location of the registered office or in the Bulletin des Annonces légales Obligatoires at least fifteen clear days before the date of the meeting. Shareholders that have held registered shares for at least one month before the date of publication of the notice of call to meeting are required, even if they have not so requested, to be called to all meetings by unregistered letter. The call should be sent by registered letter to any shareholders so requesting and having sent the Company the amount covering the registered postage fees. All joint owners shall be called in the same manner. When the rights to the shares are stripped, the holder of the voting right shall be called in the same way and under the same conditions. Moreover, the Company, according to the Article R225-73-1 of the Commercial Code (Code du Commerce) has to publish on its Internet website for an uninterrupted period beginning at the latest on the 21 st day previous to the session of a General Meeting, the information relative to the Shareholders information, in particular the agenda and the text of resolutions. When a meeting is unable to validly deliberate due to lack of the required quorum the second meeting and, as applicable, the second postponed meeting shall be called at least ten days beforehand in the same way as the first meeting. 2 - The notices and letters of call shall indicate the indications required by the law, particularly the agenda, the company electronic address where written questions of Shareholders may be sent and, eventually the mention of the obligation to collect the opinion or the prior approval of the mass of securities Shareholders giving access to the share capital. The meeting may only deliberate on the matters placed on the agenda. It may, however, remove one or more directors at any time. One or more shareholders representing the percentage of share capital required by law may, under the conditions and time limits set forth by law, require the inclusion on the agenda of draft resolutions. In accordance to the Articles R 225-71 to R 225-74 of the Commercial Code, requests made by the Shareholders to register draft resolutions on the agenda and written questions are sent to the Headquarters by registered letter with recorded delivery beginning on the publication of the Meeting announcement and until 25 days before the General Meeting, or in a delay of 20 days beginning on the publication of the Meeting announcement, when this one is published more than 45 days before the General Meeting (date of reception of the request by the company will be taken into account). The request of a new item on the agenda must be motivated. The request to register draft resolutions is provided with the text of draft resolutions, which may have a short explanation of reasons. These requests are subject to justification of possession or representation of required Share capital, in accordance to regulatory rules. Moreover, in accordance to the Articles L. 2323-67 paragraph 2 of the Labor Code, requests of draft resolutions made by the Work Council, to be added on the agenda, are sent in the next 10 days following the publication of the Meeting announcement. 3 - All Shareholders have the right to participate in General Meetings and to vote, in person or through a proxy, regardless of the number of shares held, upon simple production of proof of their identity and ownership of the shares. The right to participate in General Meetings is evidenced by the book registration of the securities in the name of the shareholder or of the intermediary acting on its 11
behalf, on the second business day preceding the meeting, at midnight Paris time, either in registered securities accounts held by the company, or in bearer securities accounts held by the authorised intermediary. For bearer securities, the authorised intermediary must deliver a certificate of attendance, which records the registration of the securities in a bearer securities account held by that intermediary, which must be attached to the postal voting ballot, proxy or admission card request prepared in the shareholder s name or on behalf of the shareholder represented by the registered intermediary. A certificate of attendance shall also be issued to any shareholder who would like to physically attend the meeting who has not received his admission card by midnight Paris time of the second business day preceding the meeting. A Shareholder may be represented by another Shareholder, his or her spouse or by the partner with who he or she signed a Civil Partnership. Furthermore, he or she may be represented by any other moral or physical person of his choice in accordance to the Articles L. 225-106 to -106-3 of the Commercial Code,; in that aim, the representative must present valid proof of proxy. Legal representatives of Shareholders lacking legal capacity and individuals representing Shareholders who are legal entities participate in meetings, whether or not they are personally Shareholders. 4 - All Shareholders may also have a postal voting, using a registration form and sent to the company according to the law and regulations; to be acceptable this registration must be received by the company 3 days before the date of the Meeting. In case of remote voting using an electronic vote, or a proxy vote given by electronic signature, this vote is made according to the conditions of the current regulations. 5 All shareholders may also participate in general meetings by videoconference or by any other means of telecommunication under the conditions set forth by the laws and regulations and those indicated in the notice of call to the meeting. 6 Two members of the Work Council, nominated by the Work Council in accordance to the law, may attend the General Meetings. They must, upon their request, participate to all deliberations requiring total agreement of Shareholders. 7 An attendance sheet containing the indications required by law shall be held at each meeting. 8 Meetings are chaired by the Chairman of the Board of Directors or by the oldest director present. Otherwise, the meeting shall elect its own acting Chairman. Two of the shareholders present and accepting, holding themselves or as proxies the greatest number of votes, shall act as the scrutineers. The meeting officers shall appoint the secretary, who may be chosen from outside the shareholders. Minutes of the meeting shall be held and copies or excerpts thereof shall be delivered or certified in accordance with the law. Article 15: Quorum - Vote Number of votes I. In Ordinary and Extraordinary General Meetings, quorum is calculated on all shares comprising the share capital and, in Special Meetings, on all shares of the category concerned, after deduction of any shares deprived of voting rights by law. In case of postal voting, for the purposes of calculating quorum, only bulletins received by the company before the holding of the Meeting, under the conditions and within the time limits set by decree, shall be taken into consideration. 12
II. The voting right attached to shares is proportional to the share capital they represent. At equal par value, each equity share or beneficial share provides entitlement to one vote. III. If shares are pledged, the voting right is exercised by the owner of the securities. The issuer company may not validly vote with shares it has subscribed, acquired or received in pledge; these shares are not taken into consideration for the purposes of calculating quorum. IV. Voting takes place by a show of hands, by standing vote, or by calling of names, as decided by the meeting officers. Article 16: Ordinary General Meeting An Ordinary General Meeting is held at least once a year, within six months of the closing of the financial year, to approve the accounts of that year, subject to any extension of that time limit by decision of the courts. An Ordinary General Meeting only validly deliberates, on first call, if all of the Shareholders present, represented or having voted by post, own at least one fifth of the shares with voting rights. On second call, no quorum is required. Resolutions are passed at a majority of the votes held by the Shareholders present or represented, including Shareholders having voted by post. Article 17: Extraordinary General Meeting Extraordinary General Meetings may amend any of the provisions of the articles of association and, for example, decide on the adoption of a new civil or commercial form for the company. They may not, however, increase the liabilities of the shareholders, subject to transactions resulting from a legally valid combination of shares. Extraordinary General Meetings only validly deliberate on first call, if all of the Shareholders present, represented or having voted by post, hold at least, one fourth and, on second call, one fifth of shares with voting rights. If this last quorum is not met, the second meeting may be postponed to a future date not later than two months after the date for which it was called. Resolutions are passed at a majority of two thirds of the votes held by the Shareholders present, represented, or having voted by post. By legal exemption to the foregoing provisions, a General Meeting deciding on a capital increase through the incorporation of reserves, profits or issuance premiums, may pass resolutions at the quorum and majority conditions for an Ordinary General Meeting. In addition, in constituent Extraordinary General Meetings, i.e. called to deliberate on the approval of a contribution in kind or the grant of any special benefit, the contributor or the beneficiary may not vote, either for themselves or as a proxy and each of the other Shareholders shall have the same number of votes as shares held but without this number exceeding ten, a Shareholder s proxy disposing of his principal s votes under the same conditions and subject to the same limit. Article 18: Special Meetings When several categories of shares exist, no modification may be made to the rights of the shares of one of those categories unless validly voted by a Special Meeting open solely to the owners of the shares of the category concerned. 13
Special Meetings are called and deliberate under the same conditions as Extraordinary General Meetings, subject to any special provisions applicable to Meetings of holders of shares with a priority dividend right but no voting right. Article 19: Shareholders right of communication All Shareholders have the right to obtain communication of the documents necessary to allow them to reach an informed decision and form an informed opinion on the management and control of the Company. The nature of such documents and the conditions of their delivery or consultation are set forth by current regulations.. Article 20: Inventory - Accounts Balance sheet Proper records of corporate transactions shall be kept, in accordance with the law. At the end of each financial year, the Board of Directors shall prepare an inventory of the assets and liabilities existing at that date. It shall also prepare a balance sheet describing those assets and liabilities and clearly show shareholders equity as a separate item line, the profit and loss statement summarising income and expenses for the period, as well as the notes completing or commenting the information provided by the balance sheet and profit and loss statement. Even if there are no profits or insufficient profits, the necessary amortisations and provisions shall be made. The amount of any commitments that have been secured, endorsed or guaranteed is indicated after the balance sheet. The Board of Directors shall prepare a management report on the Company s situation during the period elapsed, its foreseeable prospects, significant events having occurred between the financial year-end and the date when it is issued, and its research & development activities. Article 21: Determination Allocation and distribution of profit The profit and loss statement, which summarises the financial year income and expenses, after deduction of depreciation/amortisation and provisions, shows the financial year profit or loss. From the profit of the financial year, less any previous losses, if any, at least 5% is deducted to fund the statutory reserve account. This deduction ceases to be mandatory whenever the statutory reserve account represents at least one tenth of share capital and resumes once again, whenever this reserve falls below this one-tenth threshold for any reason whatsoever. Distributable profit is comprised of the profit of the financial year, less any previous losses and amounts to be posted in reserves in application of the law or of these articles of association, plus any retained earnings. This profit is distributed between all of the Shareholders pro rata to the number of shares held by each of them. The general meeting may decide on the distribution of amounts taken from the reserves available to it, by expressly indicating the reserve item lines from which such deductions are made. However, dividends are drawn in priority from the profit of the financial year. Except in case of a capital decrease, no distribution may be made to Shareholders when equity is or becomes, as a result 14
thereof, lower than the amount of share capital plus reserves that may not be distributed by law or pursuant to these articles of association. Revaluation surpluses are not distributable; they may be incorporated into capital in whole or in part. However, after drawing from the amounts posted to reserves, in application of the law, the General Meeting may draw any amounts it deems appropriate to allocate to any ordinary or extraordinary optional reserve accounts, or to retained earnings. Article 22: Terms of payment of dividends Interim dividends I. General Meetings have the possibility of granting all Shareholders for all or part of the dividend distributed, an option between payment of the dividend in shares under the statutory conditions or in cash. II. The methods of payment of dividends in cash are set by the General Meeting or otherwise by the Board of Directors. The payment of the dividends in cash must take place within a maximum period of nine months after the end of the financial year, unless this time limit is extended by authorisation of the courts. However, when a balance sheet prepared during the course of or at the end of the financial year certified by a Statutory Auditor shows that the Company, since the end of the previous year, after constitution of the necessary amortisation and provisions and after deduction of any previous losses as well as any amounts to be posted to reserves, in application of the law or of the articles of association, has posted profits, interim dividends may be distributed before the approval of the accounts for the financial year. The amount of such interim dividends may not exceed the amount of the profits thereby defined. No dividend can be claimed back from the Shareholders except when the distribution has been carried out in breach of the law and the company establishes that the beneficiaries had knowledge of the irregular nature of such distribution at the time or could not reasonably have been unaware thereof in view of the circumstances. If applicable, the action for condictio indebiti is statute barred three years after the paying out of the dividends. Dividends that are not claimed within five years of the decision pursuant to which they become payable are forfeited. Article 23: Shareholders equity below one half of share capital If, due to losses posted in the accounts, the company s equity falls below one half of its share capital, the board of directors is required, within four months following the approval of the accounts having posted those losses, to call an extraordinary general meeting of shareholders so as to decide on the company s early dissolution or not. If dissolution is not decided, the share capital must be reduced by an amount equal to the losses posted if, within the period set by law and subject to the provisions of Article 2 above, equity has not been restored to at least one half of the share capital. In both cases, the decision of General Meeting shall be published as per the regulatory requirements. In the event of failure to observe the requirements under one or more of the foregoing paragraphs, any interested party may request judicial dissolution. The same shall apply if the Shareholders have been unable to validly deliberate. 15
However, the court may not enter this order if, on the date it adjudicates on the merits, the situation has been regularised. Article 24: Dissolution Liquidation 1 Subject to compliance with the mandatory provisions of law applicable, the voluntary liquidation of the Company shall follow the rules set forth below, it being observed that Articles L. 237-14 to L. 237-20 of the Commercial Code shall not apply. 2 - Shareholders meeting in an extraordinary General Meeting shall appoint, at the quorum and majority conditions applicable for ordinary General Meetings, from among or outside them, one or more Liquidators whose remuneration and duties they shall determine. That appointment shall end the duties of directors and, unless otherwise decided by the meeting, those of the Statutory Auditors. The ordinary general meeting may at all times remove or replace the Liquidators and extend or restrict their powers. The Liquidators are appointed, unless otherwise stipulated, for the entire duration of the liquidation. 3 - The Liquidators have, jointly or separately, the broadest powers in view of realising, at the prices, terms and conditions they shall decide, any of the Company s assets and extinguishing its liabilities. The Liquidator or Liquidators may proceed, during the course of the liquidation, to the distribution of interim dividends and, at the end of the liquidation, to the distribution of the available balance without being under any duty to carry out any public announcement formality or deposit funds. Amounts accruing to the Shareholders or to creditors that have not been claimed by them shall be paid into the Caisse des Dépôts et Consignations within the year following the end of the liquidation. The Liquidator or Liquidators have, including separately, the power to represent the Company with respect to third parties, in particular with public or private administrations, as well as to sue or be sued, as the plaintiff or defendant. 4 During the course of the liquidation, general meetings shall be held as often as required by the interest of the Company, but without it being necessary to comply with the requirements under Articles L. 237-23 et seq. of the Commercial Code. General meetings are validly called by a Liquidator or by shareholders representing at least one fifth of the share capital. Meetings are chaired by one of the Liquidators or, in his absence, by the shareholder holding the greatest number of votes. Resolutions are passed at the same quorum and majority conditions as before the dissolution. 5 Upon completion of the liquidation, the shareholders meeting in an ordinary general meeting shall approve the final liquidation accounts, issue a release to the Liquidator or Liquidators for their management and discharge them from their duties. They shall ascertain, under the same conditions, completion of the liquidation. If the Liquidators fail to call the meeting, the Président of the Commercial Court, ruling in summary proceedings may, at the request of any shareholder, appoint a representative to make this call. 16
If the completion meeting is unable to deliberate, or if it refuses to approve the liquidation accounts, this decision shall be made by the Commercial Court upon the application of the Liquidator or of any interested party. 6 Any equity remaining, after redemption of the par value of the shares, shall be equally distributed between all of the shares. Upon redemption of the share capital, the burden of any taxes for which the Company is required to carry out a withholding shall be spread between all of the shares without distinction in uniform proportion to the share capital redeemed for each of them without the different issuance dates or the origin of the shares being taken into consideration. 7 If all of the shares come to be held by one holder, the dissolution of the Company shall entail, when the sole Shareholder is a legal entity, universal transfer of the assets and liabilities to the sole shareholder, without liquidation being required, in accordance with the provisions of Article 1844-5 of the Civil Code. Article 25: Disputes Any disputes that may arise during the term of the company s existence or in the course of its liquidation, either between the Shareholders, the Directors and the company, or between the Shareholders themselves, with respect to corporate matters, shall be adjudicated in accordance with the law and submitted to the courts of competent jurisdiction. * / * / * 17