SECTION 639

Subscription or purchase by the company of its own shares, either directly, or by a person acting in his own name but on behalf of the company, is prohibited. Likewise, the company cannot grant advances, loans or grant security interest for the subscription or purchase of its own shares by a third party. However, the extraordinary general meeting that decided on a capital reduction not motivated by losses may authorize the board of directors or the general director, as the case may be, to acquire a specific number of shares in order to cancel them. Founders or, in case of a capital increase, members of the board of directors or the general director are required, under the conditions set forth in articles 738 and 740 hereinafter, to pay up for shares subscribed for or acquired by the company in violation of the provisions of the first paragraph of this article. Likewise, where shares are subscribed for or acquired by a person acting in his own name but on behalf of the company, this person is bound to pay up for shares jointly with the founders or, as the case may be, the members of the board of directors or the general director. The subscriber is also deemed to have subscribed for shares on his own account.