Section II Partners' Rights and Obligations

(1)

Each partner shall pay up or contribute its interest as provided in the articles of incorporation.

(2)

(Repealed - SG 84/2000) .

(1)

The failure to pay up or contribute an interest shall constitute grounds for the expulsion of a partner from the company. A partner which has failed to pay up or contribute its interest within a specified period shall owe interest at a rate determined by operation of law, and compensation for damages in excess of such interest.

(2)

Where the interest cannot be paid up or contributed by the partner owing such payment or contribution, and cannot be sold to a third party, the remaining partners must pay up the balance in proportion to their interests or reduce the company's registered capital in accordance with established procedures.

A new partner shall be admitted by the general meeting upon an application in writing, in which it shall state that it accepts the terms of the articles of incorporation. The resolution to admit the partner shall be registered in the commercial register.

Each partner shall be entitled to take part in the management of the company, in the distribution of profits, to be informed of the company's affairs, to review the company's books and to liquidation proceeds.

The partners must pay up or contribute their interests, take part in the management of the company, provide assistance for the carrying out of its activities, as well as carry out the resolutions of the general meeting.

(1)

The participation of a partner shall be terminated upon:

1.

death or disability;

2.

expulsion;

3.

dissolution and liquidation, in the case of a legal person;

4.

bankruptcy.

(2)

A partner may terminate its participation in a company with a notice in writing made at least 3 months prior to the termination.

(3)

Accounts shall be settled on the basis of the balance sheet for the last day of the month of termination of the participation.

(1)

The general meeting may expel a partner which has not paid up or contributed its interest. It may provide an additional period for meeting the obligation upon the expiration of which the partner shall be deemed expelled. The manager shall inform the partner in writing of the general meeting resolution.

(2)

In the case of paragraph 1 the partner shall lose its title to any contributions made.

(3)

A partner may be expelled by the general meeting following a notice in writing where it:

1.

fails to perform its obligations for providing assistance for the carrying out of the activities of the company;

2.

fails to abide by resolutions of the general meeting;

3.

acts against the interests of the company.

4.

(New, SG 84/2000) in the cases under Art 121.

Each partner shall have a company interest in the company's assets the amount of which shall be determined in proportion to its interest in the registered capital, unless otherwise agreed.

The certificates issued to the partners for evidencing their participation in the company shall not be negotiable securities.

(1)

An interest in a limited liability company may be transferred and inherited. The transfer of an interest from one partner to another shall be unrestricted, and the transfer to third parties shall be subject to the provisions for admitting new partners.

(2)

An interest in a limited liability company shall be transferred with notarized signatures and shall be registered in the commercial register.

The transferee shall be liable jointly and severally with the transferor for any payments to the registered capital due at the date of transfer.

The partition of an interest shall be admissible only with the consent of the partners, unless otherwise agreed.

Where one interest belongs to several persons they may exercise their rights over it only jointly. They shall be liable jointly and severally for any obligations arising from such interest. The joint owners of the interest shall designate a person to represent them before the company.

(1)

The partners cannot claim their interests as long as the company exists. They are only entitled to part of the profits in proportion to their interests, unless otherwise agreed.

(2)

No interest on the partner's profits may be agreed upon.

(1)

For covering losses and in case of temporary shortage of cash the partners may be required, by a general meeting resolution, to make additional monetary contributions within a fixed period. The additional contributions shall be in proportion to the respective interests in the capital, unless otherwise determined.

(2)

The partners shall bear the same liability for failure to pay up the additional contributions as for failure to pay up their interests.

(3)

The additional contributions shall not affect the company's registered capital. It may be agreed that the company shall pay interest on them.

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