Subsection I General Meeting of Shareholders

(1)

The general meeting comprises the voting shareholders. A voting shareholder may participate in a general meeting either in person or by proxy.

(2)

The members of the board of directors, or of the supervisory board and managing board as the case may be, shall participate in general meeting proceedings without the right to vote, unless such members are shareholders.

The general meeting shall:

1.

amend the by-laws;

2.

resolve on increase or reduction of the capital stock;

3.

resolve on transformation and dissolution of the company;

4.

elect and recall the members of the board of directors, or of the supervisory board as the case may be, and determine their remuneration;

5.

appoint and dismiss CPA auditors;

6.

approve the annual financial statement as certified by the appointed auditor;

7.

resolve on issuing of debentures;

8.

appoint liquidators upon dissolution of the company, except in the event of bankruptcy;

9.

relieve of responsibility the members of the supervisory board and managing board, or of the board of directors as the case may be;

10.

resolve on other matters which by virtue of the law or the by-laws are in its competence.

(1)

A general meeting of shareholders shall be held at least once a year. The first general meeting may be held at any time within 18 months of incorporation.

(2)

(New - SG 84 - 2000) In case the losses exceed the half of the size of the capital, the general meeting shall be convened not later than 3 months of the losses establishment.

(3)

(Previous Par. 2 - SG 84 2000) The general meeting shall elect a chairman and a secretary of the meeting, unless the by-laws provide otherwise.

(1)

The general meeting shall be convened by the board of directors, or by the managing board as the case may be. A general meeting may also be convened by the supervisory board, as well as on the request of the owners of not less than one tenth of the stock.

(2)

(Amended, SG No 33/1999) Should the request of the owners of not less than one tenth of the capital not be granted within one month after the date of the request or the General Meeting is not called within three months after the date of request, the district court may convene the General Meeting or empower the shareholders which have so requested it, or a representative thereof, to convene the Meeting.

(3)

(Amended, SG No. 100/1997, 84/2000) The general meeting shall be convened by notice in the State Gazette. If the company has not issued bearer stocks, the by-laws may provide for convening the meeting only with written notice.

(4)

As a minimum the notice shall state:

1.

the trade name and seat of the company;

2.

the place, date and hour of the meeting;

3.

the type of general meeting;

4.

the formalities, if provided for in the by-laws, to be satisfied for attendance and exercise of the right to vote;

5.

the agenda and business to be transacted, and the draft resolutions.

(5)

(Amended, SG No. 100/1997) The time period from the publication to the opening of the meeting shall not be less than 30 days.

All papers relative to the agenda of a general meeting must be placed at the disposal of the shareholders not later than the date of publication or mailing of the notice thereof. Such papers shall be available free of charge to any shareholder on demand.

A list shall be drawn up of the shareholders or proxies present at the meeting, and the respective number of shares owned or represented. The shareholders or proxies shall certify their presence at the meeting by signature. The list shall be authenticated by the chairman and the secretary of the meeting.

A shareholder shall have the right to attend a general meeting by proxy executed in writing.

The by-laws may provide for a quorum of the shareholders. In the absence of such quorum a new meeting date shall be set which shall not be later than one month, and the general meeting at such latter date shall be valid regardless of the shares represented. The date of such second meeting may be stated in the original notice.

(1)

Voting rights shall originate upon payment of the contribution, unless otherwise provided in the by-laws.

(2)

Where a proposed resolution affects the rights of a class of shareholders, each class shall vote separately.

A shareholder may not, either in person or by proxy, vote on:

1.

actions brought by the company against it;

2.

proceedings to realise the liability of such shareholder to the company.

(1)

General meeting resolutions shall be passed by majority vote of the shares represented, unless the law or the by-laws provide otherwise.

(2)

Resolutions under 221, items 1-3, shall require a majority of at least two thirds of the shares represented. The by-laws may provide for another majority for these cases.

The shareholders representing 5% of the capital shall be entitled to:

1.

to claim against the members of the supervisory and the managing board for the cause of damages to the company before the district court.

2.

To require from the general meeting or district court  the appointment of a controller who shall be authorized to inspect the annual audit report and to work out a report on his findings.

(1)

The general meeting may not pass resolutions on matters of which there has been no notification or advertisement pursuant to Article 223, unless all shareholders are present or are represented at the meeting and no one objects to the submission of such matters to debate.

(2)

General meeting resolutions shall take effect immediately, unless such effect is deferred.

(3)

(Amended, SG No. 100/1997, 84/2000) Resolutions to amend the by-laws, increase or reduce the capital stock, transform or dissolve the company, appoint or recall members of the boards, as well as to appoint liquidators, shall be registered in the commercial register and shall take effect after registration in the commercial register.

(1)

The minutes of a general meeting shall be kept in a special book and shall comprise:

1.

the place, date and hour of the meeting;

2.

the names of the chairman and the secretary, and of the vote tellers;

3.

the attendance of the managing and the supervisory board, and of other persons which are not shareholders;

4.

the motions made on the substance of the debate;

5.

the votes taken and the results thereof;

6.

the objections made.

(2)

The minutes of the meeting shall be signed by the chairman and the secretary, and by the vote tellers.

(3)

Attached to the minutes shall be:

1.

the list of participants;

2.

the documents relative to the convening of the meeting.

(4)

The minutes and the documents attached thereto shall be kept on file for not less than five years. Any shareholder shall have the right to inspect the file on demand.

A written protocol for the resolutions of the sole owner of the company shall be required.

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