**Exhibit 1.1**

 

 

[UNOFFICIAL ENGLISH LANGUAGE TRANSLATION]

 

 

**RHODIA**

 

A limited liability company (*Société Anonyme*) with registered capitalof €627,582,158Registered office: 26 Quai Alphonse Le Gallo, 92100 BOULOGNE-BILLANCOURT352 170 161 RCS NANTERRE

 

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ARTICLES OF INCORPORATION AND BY-LAWS

(Updated as of May 7, 2004)

 

**Article 1—Form of the Corporation**

 

The Company, with limited liability, is governed by the provisions ofcurrent laws and regulations, in particular, by the provisions of tome II ofthe Commercial Code, by the provisions of future laws and regulations and bythese by-laws.

 

**Article 2—Name of the Corporation**

 

The corporate name is:

 

**RHODIA**

 

**Article 3—Corporate Purpose**

 

The purpose of the Company, in France as well as abroad, is, eitherdirectly or indirectly:

 

•                  toperform transactions in the fields of chemistry, fibers and polymers.

 

•                  toresearch, develop, manufacture, transform, market and supply products andgoods, and to license, acquire, and transfer all industrial and commercialproperty rights;

 

•                  tomake investments in any form whatsoever, in particular through the formation ofnew corporations, contribution, subscription, purchase of stock or interests inany businesses, groups or corporations relating directly or indirectly to thecorporate purpose and, if appropriate, for any other purpose.

 

•                  toissue any guarantees, first demand guarantees, surety bonds and other securityinterests in compliance with the provisions of current laws and regulations, inparticular to any company or entity of the Group, in connection with theiractivities, as well as the financing or re-financing of their activities. Thecontracting of any loan and, in general, the use of any method of financing, inparticular, by the issue or, where applicable, by the subscription of financialinstruments, with a view to facilitating the financing or re-financing of theCompany’s operations.

 

•                  aswell as, in general, all financial, commercial, industrial, civil, realproperty, personal property transactions or services that may be directly orindirectly related to one of the specified purposes or to any similar orrelated purpose or which is liable to further the development of the Company’sassets.

 

**Article 4—Registered office**

 

The registered office of the Company is at: Boulogne-Billancourt(92100)—26 quai Alphonse Le Gallo.

 

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**Article 5—Duration**

 

Except in the event of earlier dissolution or extension decided at anextraordinary general shareholders’ meeting, the duration of the Company isninety nine years from the date of its registration with the Registry ofCommerce and Companies.

 

**Article 6—Registered capital**

 

The registered capital of the Company is 627,582,158 (six hundredtwenty seven million, five hundred eighty two thousand one hundred fifty eight)euros. It is divided into 627,582,158 (six hundred twenty seven million, fivehundred eighty two thousand one hundred fifty eight) fully paid shares with anominal value of €1 each, all of a single class.

 

**Article 7—Share form, obligations todeclare the exceeding of thresholds set in the by-laws, establishment ofthresholds for registered shares, identification of holders of bearer shares**

 

Shares must be registered until fully paid up. Fully paid-up shares maybe held in registered or in bearer form, at the shareholder’s choice.

 

In addition to the legal obligation to declare to the Company theholding of certain fractions of the capital or voting rights and to make alldeclaration of intent as a consequence, in accordance with the law, anyindividual or legal entity that acquires:

 

1.                                       a number ofshares and/or voting rights equal to or greater than 0.5% of the total numberof existing shares and/or voting rights of the company, must within a period offive trading days as of the exceeding of said limit, inform the Company of thetotal number of existing and potential shares and voting rights held by it bycertified letter return receipt requested. This disclosure shall be made in thesame manner each time a new 0.5% limit is exceeded up to 50% included..

 

2.                                       a number ofshares and/or voting rights in excess or equal to 0.5%, after dilution, that isbased on the assumption that all of the securities liable to grant access tothe capital or voting rights newly issued are actually exercised, of the totalnumber of shares and/or voting rights must make the declarations in the sameway and under the same conditions as provided for in 1 above.

 

3.                                       a number ofsecurities granting access immediately or subsequently to the capital or votingrights in excess or equal to 0.5% of the total number of said securitiesexpressed per class of securities, must make the declarations in the same wayand under the same conditions as provided for in 1 above.

 

For the purposes of the declarations referred to in 1, 2 and 3 above,the Company publishes in the BALO(1) and forwards to Euronext (i) thetotal number of current and potential shares (ii) the total number ofcurrent and potential voting rights (iii) the number of securities, perclass, granting access immediately or subsequently to capital or voting rights.

 

For the purposes of determining each of the limits provided for in 2.1,2.2 and 2.3 above, the shares and/or voting rights and/or securities grantingaccess immediately or subsequently to capital or those classed as such withinthe meaning of article L 233-9 of the Commercial Code are grouped togetherfor each shareholder.

 

In each notification referred to above, the declaring shareholder mustcertify that the notification includes all shares held or owned as defined inthe preceding paragraph and must also indicate the acquisition date(s).

 

Investment fund management companies are required to provide suchnotification for the voting rights attached to all the Company shares held bythe funds that they manage.

 

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1                                          Bulletin des Annonces Lgales Obligatoires(Official Journal of Mandatory Legal Announcements).

 

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In the event of a breach of the provisions of 1, 2 and 3 above, theconcerned party, under the conditions and within the limits defined by the law,shall be deprived of the voting right attached to those securities that exceedthe limits requiring declaration, at the request of one or more shareholdersholding 0.5% of the Company’s capital, such request being recorded in theminutes of the General Meeting of Shareholders. This loss of voting right withrespect to the shares granting access immediately or subsequently to capitalshall only be effective as from ownership of said capital.

 

Any shareholder and/or holder of securities giving their holders accessnow or in the future to the share capital whose stake falls below the limitsset out in (1), (2) and (3) above shall also be obligated to informthe Company within the same period of five trading days in the same manner.

 

Shares are represented by book entries in the holder’s name in thebooks of the issuing Company or of an accredited financial intermediary.

 

The Company is entitled, at any time and at its own expense, inaccordance with current law and regulations, to ask the securities clearinghouse to supply the name and year of birth or, if the holder is a legal entity,the corporate name and year of incorporation, the nationality and address ofholders of securities that immediately or subsequently grant the right to voteat its meetings, and possibly for holders of other financial instruments thatit issues as well as to supply the quantity of securities held by each of themand, where applicable, the restrictions affecting such securities.

 

Failure by the holders of securities or the intermediaries to fulfilltheir obligation to disclose the information referred to above may, inaccordance with the terms provided for by law, result in the suspension or eventhe loss of the rights to vote and to receive payment of the dividend attachedto the shares.

 

**Article 8—Transfer of shares**

 

Shares may be freely transferred pursuant to the legal provisions andregulations in force.

 

**Article 9—Rights and obligationsattached to each share**

 

Each share entitles the holder thereof to a proportionate ownershipright in the assets of the Company and in the proceeds after liquidation equalto the pro rata portion of the registered capital represented by such share.All securities which represent or will represent part of the registered capitalwill be included as registered capital for tax purposes. Thus, all duties andtaxes which, for whatever reason, may become payable by certain holders upondistribution of capital, either during the existence of the Company or atliquidation, will be allocated among all securities representing capital at thetime of such distribution or distributions, with the result that, after takinginto account the unredeemed nominal value of the securities to the extent oftheir respective rights, all present or future securities will confer upon theholders thereof the same effective benefits and the right to receive the samenet amounts.

 

Whenever it is necessary to possess a certain number of shares in orderto exercise a right, it shall be up to holders that do not possess such numberto group together and, if necessary, to purchase or sell the requisite numberof shares or rights.

 

**Article 10—Shares issued for cash**

 

The amounts to be paid for shares issued in the context of a capitalincrease for cash must be paid in accordance with the terms and conditionsdeclared by the Board of Directors.

 

Notice of calls for payment shall be given to shareholders byregistered mail at least 15 days before the date fixed for each payment.

 

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Any delay in the payment of amounts due on the unpaid amount of shareswill automatically, and without further formalities whatsoever, result inpayment of interest at the rate of 6% per annum, compounded daily, accruingfrom the date such payment was due, without prejudice to actions that theCompany may bring against the defaulting holder, or any sanctions or specificperformance remedies available by law.

 

**Article 11—Board of Directors**

 

1)                                      Generalinformation

 

The company shall be run by a Board of Directors consisting of at leastthree directors and no more than eighteen directors subject to the exceptionsset forth in the law.

 

A legal entity may be appointed Director. Upon appointment or cooption,the legal entity must name a permanent representative who will be subject tothe same conditions, obligations and civil and criminal liabilities as if hewere Director in his own name, without prejudice to the joint and severalliability of the legal entity he represents. If as a result of death orresignation, one or more seats for Directors should be vacant, the Board ofDirectors may make provisional appointments which are subject to ratificationat the next ordinary general shareholders’ meeting. Directors are appointed fora term of six years. Directors may be re-appointed.

 

Each Director must hold at least one hundred shares during his term ofoffice.

 

If, on appointment, a Director does not hold one hundred shares, or ifhe ceases to hold at least one hundred shares during his term of office, heshall automatically be deemed to have resigned if he does not remedy thesituation within three months.

 

2)                                      Directorrepresenting the shareholding employees

 

2.1                                 When the legalconditions are met, the ordinary shareholders’ meeting appoints a directorrepresenting the shareholding employees, in accordance with the terms andconditions defined by the current regulations as well as by these by-laws.

 

2.2                                 The term of his officeis 6 years. In the event he is no longer an employee of Rhodia or of acompany or economic interest group affiliated with it within the meaning ofSection L 225-180 of the French Commercial Code or member of a mutualinvestment fund, his term of office shall automatically expire and he shall bedeemed to have resigned from his position as director representing theshareholding employees.

 

2.3                                 Applicants forappointment are appointed in accordance with the following conditions:a) When the voting right attached to the employees’ shares is exercised bythe members of the supervisory board of a mutual investment fund, theapplicants are appointed by said board. b) When the employees directlyexercise the voting right attached to their shares, the applicants areappointed by vote, as provided for in Section L 225-106 of the FrenchCommercial Code either by the shareholding employees especially gatheredtogether for said purpose or as part of a written vote.

 

Only the applicants presented by a group of shareholders representingat least 5% of the shares held directly by employees are admissible.

 

2.4                                 For the application ofparagraph 2-3 a) and prior to the meeting of the Annual GeneralMeeting, the Chairman of the Board of Directors shall consult the supervisoryboards of mutual investment funds in view of the appointment of one or moreapplicants.

 

For the application of paragraph 2-3 b), and prior to the meetingof the Annual General Meeting, the Chairman shall consult the supervisoryboards of mutual investment funds who hold meetings or organize the writtenvote of shareholding employees who directly exercise their voting rights inview of the appointment of their applicant(s).

 

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2.5                                 The terms andconditions applicable to the appointment of applicants which are not defined bycurrent laws and regulations or by these by-laws, particularly concerning thetimetable for the appointment of applicants are drawn up by the Chairman of theBoard of Directors.

 

The same shall apply for the terms and conditions applicable to theappointment of proxies representing the shareholding employees at the AnnualGeneral Meeting.

 

2.6                                 Reports shall be drawnup on the procedures referred to in paragraph (2-3 a) and b) whichshall specify the number of votes obtained by each of the applicants. A list ofall validly appointed applicants shall be drawn up.

 

Said list must include at least two applicants.

 

The reports and the list of applicants will be attached to the noticeto attend the Annual General Meeting called to appoint the directorrepresenting the shareholding employees.

 

2.7                                 The ordinaryshareholders’ meeting appoints the director representing the shareholdingemployees in accordance with the conditions applicable to any appointment of adirector. In the event of a tie in voting, the oldest applicant shall be deemedto have been appointed.

 

Said director is not be taken into account to determine the minimum andmaximum number of directors provided for pursuant to Section L 225-17 ofthe French Commercial Code.

 

2.8                                 In the event ofvacancy of the post of director representing the shareholding employees for anyreason whatsoever, his substitute shall be appointed in accordance with theconditions provided for above. The ordinary shareholders’ meeting shall appointsaid director for a further 6-year period.

 

The Board of Directors may meet and validly deliberate until the dateof his appointment.

 

2.9                                 In the event thatduring the term of office, the report that the Board of Directors submits eachyear to the Annual General Meeting pursuant to article L 225-102 of theCommercial Code establishes that the shares held in the scope of saidarticle represents a percentage less than 3% of the Company’s capital, theterm of office of the director representing the shareholding employees expiresat the close of the ordinary shareholders’ meeting at which the report by theBoard of Directors recording this situation is submitted and this point2) shall then automatically lapse. In this same event, in the event ofvacancy of said post of director, whatever the reason may be, between the yearend and the date of said Meeting, the Board may meet and validly deliberate.

 

2.10                           The provisions of the lastparagraph of 1) above do not apply to said director.

 

Nevertheless, he must own one share via a mutual investment fund or anequivalent number of shares of said fund. If, on the date of his appointment,he does not own or if, during his term of office, he ceases to own a share oran equivalent number of shares of a mutual investment fund, he shall be deemedto have automatically resigned, notwithstanding the fact that he continues tobe an employee.

 

**Article 12—Organization and operation ofthe Board of Directors**

 

The Chairman of the Board of Directors is appointed in accordance withthe terms and conditions set forth in the statutory and regulatory provisionsin effect.

 

The Board of Directors meets at the registered office of the Company orat any other location as often as corporate matters require.

 

Meetings of the Board of Directors are presided over by the Chairman,or in his absence, by a Director specially appointed by him, or failing that,by a Director nominated by the other members present at the Board meeting. TheChairman of the meeting is assisted by a secretary who may be chosen by theBoard of Directors from among persons other than Directors and shareholders.

 

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**Article 13—Resolutions of the Board ofDirectors**

 

Meetings of the Board of Directors are convened by the Chairman, andshall address all matters set forth in the agenda of the meeting by theChairman or by a simple majority of the Board of Directors.

 

However, at least one third of the Board members may request theChairman to call the Board meeting for a specific agenda if the Board has notmet for more than two months.

 

Where applicable, the Chief Executive Officer may also request theChairman to call the Board meeting for a specific agenda.

 

The Chairman must comply with the requests referred to in paragraphs 2and 3 of this article and call the Board meeting. Meetings may be convenedin any manner, including orally.

 

The Board of Directors may not validly deliberate unless at least halfof its members are present. Decisions are taken upon a majority vote of the memberspresent or represented.

 

In case of deadlock, the Chairman’s vote will be decisive.

 

A director may grant another director a power of attorney in writing torepresent him at a Board meeting. Each Director receives only one proxy cardper meeting and consequently is only entitled to one vote for himself and onefor the Director being represented.

 

Directors attending the Board meeting by means of videoconferencing aredeemed present for calculation of the quorum and majority. The nature and termsof application of videoconferencing are defined by the current regulations andsubject to the provisions of said regulations.

 

The Directors, and any person called to attend meetings of the Board ofDirectors, are obliged to maintain confidentiality with respect to privilegedinformation indicated as such by the chairman.

 

Minutes of meetings will be prepared and copies or excerpts of theproceedings will be certified in accordance with law.

 

**Article 14—Powers of the Board ofDirectors**

 

1)                                      The Board ofDirectors is vested with all the powers conferred upon it pursuant to currentlaw, in particular:

 

•                  itdetermines the direction of the Company’s operations and sees to theimplementation thereof.

 

•                  itdeals with all issues concerning the smooth running of the Company and takedecisions on business concerning the Company provided it does not overstep thepowers expressly granted to the shareholders’ meetings and the limit of thecorporate purpose.

 

•                  itshall perform the checks and verifications it deems appropriate. The Chairmanor the Chief Executive Officer shall provide each director with all thedocuments and information necessary to carry out their assignments. Inaddition, each director is entitled to request the documents that he deemsnecessary.

 

•                  itmay decide to set up committees to review matters that it or its Chairmansubmits to them for their opinion. It defines the composition and the powers ofthe committees, which carry on their activity under its supervision.

 

•                  itmay grant one of its members or third parties all special powers of attorneysfor one or more specific purposes, with or without the right, for therepresentatives, to grant all delegations in part or in whole themselves.

 

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2)                                      The Board ofDirectors decides that either the Chairman of the Board of Directors or anothernatural person appointed by the Board of Directors and bearing the title ofChief Executive Officer shall assume the General Management of the Company.

 

3)                                      One or other ofthe methods of exercising the General Management of the Company shall be chosenby a majority of 2/3rds of the votes of directors present or represented.

 

The choice made shall be applicable until the Board of Directorsdecides otherwise.

 

Shareholders and third parties shall be informed of said choice inaccordance with current regulations.

 

The methods of exercising the General Management will be defined forthe first time at the first meeting of the Board of Directors that follows theadoption of the by-laws thus amended.

 

4)                                      In the event theBoard decides that the Chairman of the Board of Directors shall assume theGeneral Management, the provisions of the law and of these by-laws relating tothe Chief Executive Officer shall apply to the Chairman of the Board ofDirectors who, in this case, shall bear the title of Chairman and ChiefExecutive Officer.

 

**Article 15—Remuneration of Board members**

 

The general shareholders’ meetings may allot an annual fixed sum in theform of attendance fees that the Board of Directors will allocate among itsmembers as it deems appropriate.

 

**Article 16—Chairman of the Board ofDirectors, Chief Executive Officer and Acting Chief Executive Officer**

 

1)                                      The Chairman ofthe Board of Directors shall organize and conduct its proceedings. He shallensure the proper operation of the Company’s bodies and in particular that thedirectors are able to carry out their duties.

 

He/she shall report to the General Shareholders’ Meeting on the mannerin which the work of the Board and the internal control procedures implementedby the Company are prepared and organized. At the same time, he/she shallreport on any limitations by the Board to the powers of the Chief ExecutiveOfficer. Said information shall be published in the manner set out in theGeneral Regulations of the *Autorité desMarchés Financiers*.

 

In the event that the Chairman is temporarily unable to carry out hisduties or in the event of his death, the Board of Directors may delegate adirector to act as Chairman.

 

In the event of a temporarily inability to carry out duties, saiddelegation is granted for a limited term, but such term may be renewed. In theevent of death, said delegation is valid until the new Chairman has beenappointed.

 

Members of the Company’s management as well as any third party may, atthe Chairman’s request, attend the proceedings of the Board of Directors. Theyare bound by the same duty to maintain confidentiality as the directors. TheBoard of Directors sets the Chairman’s compensation.

 

2)                                      The Chief ExecutiveOfficer is vested with the broadest powers to act in all circumstances in theCompany’s name. He shall exercise his powers within the limit of the corporatepurpose, provided he does not overstep the powers that the law expresslyconfers upon shareholders’ meetings and on the Board of Directors.

 

The Chief Executive Officer represents the Company in its relationswith third parties. It represents the Company in legal actions. The Company isbound even by the acts of the Chief Executive Officer that fall outside thescope of the corporate purpose, unless it proves that the third

 

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party knew that the act was ultra vires or that it could not have beenunaware thereof given the circumstances. The sole publication of the by-lawsdoes not establish such evidence. The Board of Directors may limit the powersof the Chief Executive Officer but said limitation is non-binding on thirdparties.

 

The Board of Directors sets the term of office of the Chief Executive Officer.The Board of Directors sets the Chief Executive Officer’s compensation.

 

The Board of Directors may remove the Chief Executive Officer fromoffice at any time. If the removal from office is decided without a validreason, it may give rise to damages, except when the Chief Executive Officer isalso the Chairman of the Board of Directors.

 

3)                                      The Board ofDirectors may also, on a motion by the Chief Executive Officer, appoint one ormore natural persons to assist him; said natural person(s) shall bear the titleof Acting Chief Executive Officer.

 

A maximum number of five Acting Chief Executive Officers may beappointed.

 

The Board of Directors, in agreement with the Chief Executive Officer,defines the scope and term of the powers granted to the Acting Chief ExecutiveOfficers. With regard to third parties, Acting Chief Executive Officers shallhave the same powers as the Chief Executive Officer or the same powers as theChairman of the Board of Directors if the latter is also the Chief ExecutiveOfficer.

 

The Board of Directors sets the compensation of the Acting ChiefExecutive Officers.

 

The Board of Directors, on a motion by the Chief Executive Officer, mayremove the Acting Chief Executive Officers from office at any time. If theremoval from office is decided without a valid reason, it may give rise todamages.

 

In the event the office of Chief Executive Officer falls vacant, theduties and powers of the Acting Chief Executive Officer shall continue until anew Chief Executive Officer has been appointed unless the Board of Directorsdecides otherwise.

 

4)                                      The age limit forthe position of Chairman of the Board of Directors shall be seventy years(70) regardless of whether the later also holds the position of ChiefExecutive Officer. As a result, the age limit for the position of ChiefExecutive Officer shall also be seventy years (70) when such position isalso held by the Chairman of the Board of Directors.

 

By contrast, the age limit for holding the position of Chief ExecutiveOfficer shall be the legal limit when such position is held by an individualother than the Chairman of the Board of Directors.

 

The Chairman of the Board of Directors shall be considered to haveresigned at the end of the General Shareholders’ Meeting called to approve thefinancial statements for the year in which he or she reaches the age of seventy(70).

 

**Article 17—Statutory Auditors**

 

Audits of the Company are carried out, in accordance with law, by atleast two Statutory Auditors and two Deputy Auditors.

 

**Article 18—Shareholders’ Meetings**

 

1.                                       Ordinary orExtraordinary shareholders’ meetings are called and deliberate in accordancewith the law.

 

2.                                       Meetings areheld at the registered office or any other place specified in the notice toattend the meeting.

 

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3.                                       To attendmeetings in person or to be represented by a proxy or by mail, holders ofregistered shares must have their shares registered in their account in theCompany’s registers at least two days prior to the date of the Meeting. Toattend meetings in person or to be represented by a proxy or by mail, holdersof bearer shares must file, at the place specified in the notice to attend themeeting at least two days prior to the date of the Meeting, a certificate drawnup by the intermediary holding their account certifying that securities arelocked-up until the date of the meeting. The Board of Directors may decide toshorten said time limits.

 

A shareholder who does not have his domicile in France, within themeaning of Section 102 of the French Civil Code, may be represented atordinary or extraordinary meetings by an intermediary registered in accordancewith the conditions provided for by current law and regulations. Saidshareholder shall then be deemed to be present at said meeting for thecalculation of the quorum and majority.

 

Subject to and in accordance with the conditions defined by the currentregulations and the terms and conditions defined beforehand by the Board ofDirectors, the shareholders may participate and vote at all ordinary orextraordinary meetings by videoconference or by electronic telecommunicationsor remote transmission that allows them to be identified. The shareholdersshall then be deemed to be present at said meetings for the calculation of thequorum and majority.

 

4.                                       Theshareholders, in accordance with the conditions defined by current regulations,may send their proxy vote form or mail vote form for all ordinary orextraordinary meetings, either on paper, or by remote transmission by decisionof the Board of Directors published in the notice of the meeting and the noticeto attend the meeting.

 

To be accepted, all mail vote or proxy vote forms must have actuallybeen received at the Company’s registered office or at the place specified inthe notice to attend the meeting no later than two days prior to the date ofthe Annual General Meeting.

 

Instructions given by electronic means that contain a power of attorneyor a proxy may be received by the Company in accordance with the conditions andwithin the time limits defined by the current regulations.

 

5.                                       The Meeting’sproceedings may be transmitted live by videoconference and/or by remotetransmission. Where applicable, reference shall be made thereto in the noticeof meeting and in the notice to attend the meeting.

 

6.                                       Allshareholders, who have voted by mail or have given a power of attorney, bysubmitting a lock-up certificate issued by the share custodian, maynevertheless sell all or part of the shares in respect of which he sent his voteor proxy, provided that he notifies the issuing company and providesinformation that may be used to cancel his vote or his proxy or to modify thenumber of corresponding shares and votes no later than the day before theMeeting.

 

7.                                       The Chairman ofthe Board of Directors or, in his absence, a director especially delegated forsaid purpose by the Chairman presides over the Meetings. Failing that, theMeeting shall appoint its own Chairman.

 

8.                                       The duties oftellers are fulfilled by the two members of the Meeting with the highest numberof votes and who accept said duties.

 

9.                                       The officers ofthe Meeting appoint the secretary, who may be chosen among non-shareholders.

 

10.                                 An attendance sheet,drawn up in accordance with the law, is kept at each meeting of the AnnualGeneral Meeting. Said attendance sheet, duly signed by the shareholders andproxies, shall be certified true by the officers of the Meeting.

 

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11.                                 Each member of theMeeting has as many votes as he owns or represents shares, save for limitationsimposed by law.

 

12.                                 At the request of oneor several members of the Meeting representing by themselves or as proxies atleast one tenth of the capital present or represented at the Meeting, a secretballot shall be held.

 

13.                                 Minutes of theMeetings are drawn up and copies thereof are certified in accordance with thelaw.

 

14.                                 The right to voteattached to the share belongs to the beneficial owner at ordinary shareholders’meetings, at extraordinary shareholders’ meetings and at extraordinarymeetings”.

 

**Article 19—Corporate accounts**

 

1)                                      Corporatefinancial statements

 

Each corporate fiscal year lasts twelve months and commences onJanuary 1 and closes on December 31. The net earnings during thefiscal year minus general costs and other expenses of the Corporation,including all depreciation and provisions, shall constitute net profits.

 

Net profits, minus losses from previous years (if any), are subject toa charge of at least one-twentieth of such net amount, which shall be used tocreate a reserve called the “legal reserve”. This charge shall cease to beobligatory when the amount of the reserve becomes equal to one-tenth of theregistered capital.

 

Distributable income equals the net profits of the fiscal year, minuslosses from previous years and the charge from the legal reserve, plus profitscarried forward from previous years.

 

In addition, the shareholders may, upon recommendation of the Board ofDirectors, decide at a general shareholders’ meeting to distribute amounts heldin the reserve funds that are available for their use, in such case, thedecision of the shareholders must specifically indicate the reserves from whichthe funds are to be taken. After approval of the accounts and verification ofthe existence of distributable amounts, the ordinary general shareholders’meeting shall decide upon the distribution of such amounts and, uponrecommendation of the Board of Directors, shall distribute out of this amountto all holders of shares pro rata to their percentage interest in theregistered capital.

 

If a balance remains, the shareholders shall decide at an ordinarygeneral shareholder’s meeting which amounts will be carried forward to the nextfiscal year or placed in one or more reserve funds that it administers.

 

The ordinary general shareholders’ meeting called to approve theaccounts for the fiscal year may grant each shareholder the right to elect toreceive all or part of the final or interim dividends in cash or in shares. Inthe event that financial statements established at the end of a fiscal year orat any date during the fiscal year, certified by the Statutory Auditors, setforth that the Company, since the close of the preceding fiscal year, afterprovision for depreciation and necessary reserves, deductions for prior losses,if necessary, and sums carried forward as reserves in application of the law orthe by-laws and taking into account carried forward profits, has made a profit,it may distribute interim dividends before the approval of the year-endaccounts.

 

The amount of these interim dividends shall not exceed the amount ofthe profit thus defined.

 

“The extraordinary shareholders’ meeting may decide to reduce the sharecapital for reasons other than for losses, by reducing the par value of theshare. The amount of the reduction of the share capital, i.e. the differencebetween the former and new par value multiplied by the number of outstandingshares, shall be recorded in an issue premium account, the amount of whichshall not be distributable. Nevertheless, it may be subsequently capitalized orused to write off corporate losses”.

 

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**Article 20—Dissolution and liquidation**

 

Upon the dissolution of the Company, one or more liquidators shall beappointed at a general shareholders’ meeting, in accordance with the quorum andmajority requirements provided by law for ordinary general shareholders’meetings. This appointment shall terminate the functions of the Directors andthe Statutory Auditors.

 

The liquidator shall represent the Company. He shall be vested with thebroadest powers to liquidate the Company’s assets, including outside thecontext of judicial proceedings by amicable arrangement. The liquidator shallbe empowered to pay creditors and to distribute the remaining balance.

 

The shareholders may authorize the liquidator at a generalshareholders’ meeting to continue the pending business of the Company or toengage in new business for purposes of the liquidation.

 

Net assets remaining after reimbursement of shares at their nominalvalue shall be distributed among shareholders pro rata in relation to theirinterest in the registered capital.

 

**Article 21—Disputes**

 

All disputes which may arise during the existence of the Company or itsliquidation, whether between the shareholders and the Company or betweenshareholders themselves, in connection with or by reason of corporate acts,shall be submitted to the jurisdiction of the courts having jurisdiction overthe location of the principal office.

 

To this end, in the event of disputes, all shareholders shall electdomicile within the jurisdiction of the above mentioned court, and allsummonses and notices will be sent to such domicile. Failing such election ofdomicile, summonses and notices shall be validly delivered if delivered to theOffice of the Public Prosecutor of the Republic connected with the trial courtwith jurisdiction over the registered office.

 

Certified to conform to the Articles of Incorporation and By-laws

 
| Date:                               |
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|                                |
|                                |   |
| Yves BRISSY                         |
| Secretary to the Board of Directors |

 

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