Article 306 — Dealings between a Company and Persons

1/ Subject to the provisions of Article 394 Sub-Article (4) and 395 requiring prior approval by shareholders of transactions involving 10% (ten per cent) or more of the assets of the company, dealings made between a company and persons or organizations affiliated with the company shall be approved in advance by the board of directors; Directors having conflict of interest shall not vote regarding the approval of the transaction; Dealings made without an advance approval of the board of directors shall be void; Notice of dealings made with a prior approval of the board of directors shall be given immediately to the Auditors. 2/ The Auditors shall submit a special report to the general meeting as regards dealings approved by the board of directors in accordance with Sub-Article (1) of this Article The Auditors` report shall show: the nature of the dealings, the type and extent of payment effected and adequate information about the circumstance surrounding the affiliation that is the cause of conflict of interest; The general meeting may render a decision that it deems appropriate on the basis of the report. 3/ Dealings approved by the general meeting may be opposed by shareholders only on the ground of serious damage to the company or fraud. 4/ Dealings shall remain in force unless the general meeting has rejected the same on account of serious damage to the company or fraud; The party who has committed the fraud and members of the board of directors who knew or should have known the commission of the fraud or the fact that the dealings would cause serious damage to the company shall be jointly and severally liable for damages incurred by the company as a result of the dealings. 5/ The provisions under Sub-Articles (1) to (4) of this Article shall not apply to routine dealings between a company and persons affiliated with such company, conducted in the same manner as normal dealings between the company and its clients. 6/ Persons affiliated with the company shall, for the purpose of this Article, include the following: a) members of the board of directors, manager, Auditor, members of the supervisory board and secretaries of the company; b) persons related by affinity or by consanguinity with those persons listed under Sub-Article (6) (a) of this Article pursuant to the Revised Federal Family Code; c) a business organization or concern in which persons listed under (a) and (b) of Sub Article (6) of this Article are shareholders or beneficiaries or play managerial role; d) a company that is holding or subsidiary to the company; e) unless a lesser amount of shareholding is provided by the memorandum of association or law, persons who have purchased at least ten percent of the shares of the company or companies in which the company is a shareholder or companies which have reciprocally purchased each other`s shares; f) other persons indicated in the memorandum of association or by another law as having affiliation with the company.