Supervisory Board And Members Of The Company example essay topic

Draft 12 March, 2003 "INTEROIL" LIMITED LIABILITY COMPANY SREBRENIK ARTICLES OF ASSOCIATION March 2003 On the basis of Article 317 of the Law on Commercial Companies (Official Gazette of the Federation of Bosnia and Herzegovina 23/99) (hereinafter: the Law) and in accordance with the Share Sale and Purchase Agreement concluded between Hasan Sarajliae and OMV Istrabenz Holding on 20th December, 2002 and the Contract About Transfer of Shares concluded between the same contract parties on 20th December, 2002, the Assembly of Interoil drustvo sa og rani " e enom odgovornosti za proizvodnju, promet i usluge, Srebrenik (hereinafter: the Company), consisting of Founders / Members of the Company, namely: (i) HASAN SARAJLIAE, Bajazita Kesetoviaea bb, Srebrenik, PIN: 2707944183306 (hereinafter: the Founder) and (ii) OMV ISTRABENZ Holdin ska dru zba, d. d. with the seat in Koper, Ferrarska brow 7, Slovenia, registered with the Koper County Court under the number 066/10487100 (hereinafter: the New Founder), at the session held on March, 2003, passed the ARTICLES OF ASSOCIATION INTEROIL d. o. o. Srebrenik 1. GENERAL PROVISIONS 1.1. Registration of Company and Bases for Passing of Articles of Association 1.1.

1. The Company is registered with the Cantonal Court in Tula by the resolution number U / I- U / I - 554/02 of 04/29/2002.1. 1.2. Changes in the structure of the founders of the Company, founders' investments and shares in the Company were registered with the same Court by the resolution number U / I - 1713/02 of 01/06/2003, on the basis of: (i) The Share Sale and Purchase Agreement concluded on 20th December, 2002 between the Founder and the New Founder (hereinafter: the Share Sale and Purchase Agreement) and (ii) the Contract about the change in the structure of founders of the Company, transfer of shares and stipulating of mutual relationships of contract parties, concluded on 20th December, 2002 between the Founder and the New Founder (hereinafter: the Contract About Transfer of Shares). 1.1. 3. These Articles of Association harmonize the legal status and the organization of the Company, and stipulate mutual relationships between Founders-Members of the Company with the Law, the Share Sale and Purchase Agreement and the Contract About Transfer of Shares. 1.2 Contents of Articles of Association These Articles of Association stipulate: (i) status designations (the company name and the seat); (ii) the activity; ( ) the capital stock of the Company, shares and founders' investments of Members; (iv) the increase and the reduction of the capital stock, the way of ascertaining and distribution of the profit and covering of losses; (v) legal capability of the Company and the responsibility for obligations; (vi) the rights and obligations of Company Members; (vii) the organization of the Company; (v.) managing and the way of decision-making, the composition, the way of appointing and relieving of duty, authorizations and the responsibility of Company bodies; (ix) the way of informing of Members about the operation of the Company and keeping of the Book of Shares; (x) the way of joining the Company and the termination of the membership in the Company; (xi) the change of the form, merging, joining and termination of the Company; (xii) the procedure of modifications and supplements of the Articles of Association; and (x ) other issues of significance for the operation of the Company.

1.3 Validity of Articles of Association The Articles of Association are valid until 30th September, 2005, at 12: 00 (noon), in accordance with the provisions from the Share Sale and Purchase Agreement and the Contract About Transfer of Shares. Upon the expiry of that period, the New Founder will pass new Articles of Association in accordance with the modifications which will ensue according to the Share Sale and Purchase Agreement and the Contract About Transfer of Shares. 2. STATUS DESIGNATIONS 2.1 Company Name The Company name reads: "INTEROIL" d. o. o. za proizvodnju, promet i usluge The shortened Company name reads: "INTEROIL" d. o. o. 2.2 Company Seat The seat of the Company is in Srebrenik, Tuzlanski put bb.

3. COMPANY ACTIVITY 3.1 The company activity is as follows: 50.101 Wholesale of motor vehicles 50.102 Retail sale of motor vehicles 50.103 Mediation in sale of motor vehicles 50.200 Maintenance and repair of motor vehicles 50.301 Wholesale of parts and accessories for motor vehicles 50.302 Retail sale of parts and accessories for motor vehicles 50.303 Mediation in sale of parts and accessories for motor vehicles 50.401 Wholesale of motorcycles and parts and accessories for motorcycles 50.402 Retail sale of motorcycles and parts and accessories for motorcycles 50.403 Mediation in sale of motorcycles and parts and accessories for motorcycles 50.404 Maintenance and repair of motorcycles 50.500 Retail sale of motor fuels and lubricants 51.110 Mediation in sale of agricultural raw materials, livestock, textile raw materials and semi-finished products 51.120 Mediation in sale of fuels, ores, metals and industrial chemical products 51.130 Mediation in sale of lumber and construction materials 51.140 Mediation in sale of machines, industrial equipment, ships and airplanes 51.150 Mediation in sale of furniture, objects and devices for household and other metal products 51.160 Mediation in sale of textiles, clothes, footwear and leather products 51.170 Mediation in sale of food, drinks and tobacco 51.180 Mediation specialized in sale of certain products or groups of products, not mentioned in other places 51.190 Mediation in sale of diverse products 51.210 Wholesale of cereals, seeds and fodder 51.220 Wholesale of flowers and seedlings 51.230 Wholesale of livestock 51.240 Wholesale of raw and tanned skins 51.250 Wholesale of raw tobacco 51.310 Wholesale of fruit and vegetables 51.320 Wholesale of meat and meat products 51.330 Wholesale of milk, dairy products, eggs, edible oils and fats 51.340 Wholesale of alcohol and other drinks 51.350 Wholesale of tobacco products 51.360 Wholesale of sugar, chocolate and candies 51.370 Wholesale of coffee, tea, cocoa and spice 51.380 Wholesale of other food, including fish, clams and crabs 51.390 Non-specialized wholesale of food, drinks and tobacco products 51.410 Wholesale of textile 51.421 Wholesale of clothes 51.422 Wholesale of footwear 51.430 Wholesale of electrical household devices, radio and television devices 51.440 Wholesale of porcelain, glass, wallpapers, soaps, detergents and other cleaning products 51.450 Wholesale of perfumes and cosmetics 51.470 Wholesale of other consumer products 51.510 Wholesale of solid, liquid and gaseous fuels and similar products 51.520 Wholesale of metals and metal ores 51.531 Wholesale of wood 51.532 Wholesale of construction material and sanitary equipment 51.540 Wholesale of iron goods, installation material and equipment for plumbing and heating 51.550 Wholesale of chemical products 51.560 Wholesale of other semi-products 51.570 Wholesale of remains and waste 51.610 Wholesale of machine tools 51.620 Wholesale of construction machines 51.630 Wholesale of machines for textile industry, sewing and knitting machines 51.640 Wholesale of office machines and equipment 51.650 Wholesale of other machines for industry, trade, craftsmanship and navigation 51.660 Wholesale of agricultural machines, connections and tools, including tractors 51.700 Other wholesale 52.110 Retail sale in non-specialized shops, primarily of food, drinks and tobacco products 52.120 Other retail sale of goods in non-specialized shops 52.210 Retail sale of fruit and vegetables 52.220 Retail sale of meat and meat products 52.230 Retail sale of fish, clams and crabs 52.240 Retail sale of bread, rolls, cookies, pastas, candies and sweets 52.250 Retail sale of alcohol and other drinks 52.260 Retail sale of tobacco products 52.270 Other retail sale of food, drinks and tobacco products in specialized shops 52.320 Retail sale of medical preparations and orthopedic aids 52.330 Retail sale of cosmetic and toilette products 52.410 Retail sale of textile 52.420 Retail sale of clothes 52.430 Retail sale of footwear and leather products 52.441 Retail sale of furniture 52.442 Retail sale of equipment for lighting and household objects 52.450 Retail sale of electrical devices for household, radio and television devices 52.460 Retail sale of iron goods, paints, glass and other construction material 52.470 Retail sale of books, newspapers, magazines, paper goods and stationery 52.481 Retail sale of office equipment and computers 52.482 Retail sale of watches 52.483 Retail sale of sports equipment 52.484 Retail sale of games and toys 52.485 Retail sale of flowers 52.486 Retail sale of fuels 52.487 Other retail sale in specialized shops 52.500 Retail sale of second-hand goods, in shops 52.610 Retail sale through mail 52.620 Retail sale at stands and markets 52.630 Other retail sale outside of shops 52.710 Repair of footwear and other leather items 52.720 Repair of electrical devices for household, including radio-equipment, television equipment and other audio-equipment and video-equipment 52.730 Repair of watches and jewelry 52.740 Repairs, not mentioned in other places 55.110 Hotels and motels, with a restaurant 55.120 Hotels and motels, without a restaurant 55.210 Youth hostels and climbers' lodgings 55.220 Camps and camping-sites 55.230 Other accommodation for a shorter stay 55.300 Restaurants 55.400 Bars 55.510 Canteens (mess halls) 55.520 Supplying of prepared food (catering) 3.2 Foreign trade activity of the Company is: - Transport of goods in international transport, - Import-export of raw materials and finished products. 3.3 The Company can also perform other operations which are usually performed along with activities entered in the court registry, in the extent and in the way necessary for operation, and which do not represent performing of those operations as a regular activity. 4. CAPITAL STOCK, FOUNDERS' INVESTMENTS AND SHARES OF MEMBERS 4.1 Company Capital Stock The Company capital stock amounts to KM 33,397,832.00, from which: o KM 33,387,832.00 in goods and o KM 10,000.00 in cash. 4.2 Founders' Investments 4.2.

1. Founders' investments by Members of the Company at the time of passing of these Articles of Association are: 1.2. 4.2. 2. On the date of 30th September, 2005, at 12: 00 (noon), the Founder will, in accordance with the Share Sale and Purchase Agreement, carry out the transfer of his share in the amount of 20% of the capital stock to the New Founder, whereby the New Founder will become the 100% owner of the Company capital.

4.3 Shares 4.3. 1 Shares of Members of the Company are proportional to the participation of their founder's investment in the capital stock of the Company. 4.3. 2 With respect to the relationship of the founders' investment in the capital stock of the Company, shares of Members of the Company are ascertained in proportions: 80% for the new Founder and 20% for the Founder. 4.4 Transfer of Shares 4.4.

1. The transfer of shares of Founders can be performed exclusively from the Founder to the New Founder in accordance with the provisions of the Share Sale and Purchase Agreement and the Contract About Transfer of Shares. 4.4. 2. The New Founder is free to transfer his share to third persons without a limitation. 4.4. 3.

The transfer of shares is carried out by a written contract. 4.4. 4. By the transfer of shares, the legal successor enters into all the rights and obligations which its predecessor had. 5. INCREASING AND REDUCING OF CAPITAL STOCK, DISTRIBUTION OF PROFIT AND COVERING OF LOSSES 5.1 Increasing of Capital Stock 5.1. 1.

The capital stock of the Company is increased on the basis of the decision by the Company Assembly, by paying of New Founders' investments. 5.1. 2. The capital stock can be increased in the following way: (i) Increasing of the capital stock from the Company profit. ( ) Increasing of the capital stock by paying in of additional cash assets or by increasing of objects and rights by investments by a Member of the Company. (iv) Increasing of the capital stock by investments by members joining the Company. 5.1. 3. Changes of the capital stock with corresponding evidence and decisions by the Assembly are the basis for entering of the change in the court registry. 5.1.

4. During the validity of these Articles of Association, the increase of the capital stock of the Company can be performed exclusively by the New Founder, while the Founder is not entitled to that right. 5.2 Reduction of Capital Stock 5.2. 1. The capital stock of the Company can be reduced by the decision of the Company Assembly by the two-third majority of votes. 5.2.

2. The Company is obliged to submit the decision about the reduction of the capital stock to the court registry and to publish it in the Official Gazette of the Federation of Bosnia and Herzegovina. 5.3 Distribution of Profit 5.3. 1. The distribution of the Company profit will be carried out exclusively in accordance with the Share Sale and Purchase Agreement and the Contract About Transfer of Shares. 5.4 Covering of Losses 5.4.

1. Members of the Company are not obliged to cover its losses. 5.4. 2. The consequences of the risk which arise in the operation of the Company and losses in operation are covered by Company Members until the amount of the invested assets. 5.4.

3. In case of a realized loss in the operation of the Company, the same is covered from reserves of the Company, and if it cannot be covered from that part, it is covered at the expense of the capital stock. 5.4. 4. If the realized loss cannot be covered from the reserve of the Company and the capital stock, Members / Founders can decide to cover the loss from their own assets. 5.5.

Legal Capability of Company and Responsibility for Obligations 5.5. 1. In legal transactions, the Company has all the authorities within the registered activity. The Company is responsible for its obligations in legal transactions by its whole property. A Company Member is responsible for the obligations of the Company by its share. The Company is also responsible for obligations of other companies taken over by a contract. 5.5.

2. A Member of the Company is not responsible for the obligations of the Company except when: - he uses the Company for achieving of a personal goal which is not in accordance with the goals of other Members and the Company as a whole, - he manages the property of the Company as his own property, - he uses the Company for deceiving and damaging his creditors, - he influences the reduction of the Company property in his favour or in favour of third persons, or when he influences the Company to take over the obligations, although he knew or had to know that the Company is not or will not be ably to carry out its obligations. 6. RIGHTS AND OBLIGATIONS OF COMPANY MEMBERS 6.1. Company Members are entitled to manage the Company through the Company Assembly proportionally to their share in the capital stock of the Company, the right to the realized profit, as well as other rights established by the Law, the Share Sale and Purchase Agreement and the Contract About Transfer of Shares. 7.

ORGANIZATION OF COMPANY 7.1. The Company is organized as a unified whole, and it performs its activity at the seat of the Company and outside of it. The Company can, by the decision of the Supervisory Board, found branch offices and business units outside of its seat. Branch offices and business units will be entered in the court registry. Parts of the Company organized in branch offices / business units do not have the function of a legal person, but can perform all the operations within the registered activity of the Company and, in doing that, acquire the rights and take over the obligations in the name and on behalf of the Company. 7.2.

The Company is responsible for the obligations created by a business unit in transactions with third persons by its whole property. Business units, branch offices and other parts of the Company and forms of the organization are an integral part of the Company and they perform work according to the order by the Managing Board and the guidelines by the Supervisory Board, and they submit reports about their work to them. 7.3. The decision about appointment of managers of business units contains also the extent of the authorization of managers of business units. A manager of a business unit in the country and abroad is responsible for the legality of the work and operation of that business unit. 7.4.

All the issues of the internal organization of the Company are stipulated in greater detail by company legislation on the internal organization and systematization of work. 8. MANAGING OF COMPANY 8.1 Company Bodies 8.1. 1.

Managing and control of the operation of the Company is carried out through Company bodies, namely: (i) the Assembly (ii) the Supervisory Board ( ) the Company Managing Board. 8.2 Company Assembly 8.2. 1 The Company Assembly is constituted by all the Members of the Company. 8.2. 2 In the Company Assembly, each Member of the Company has the number of votes proportional to his share in the capital stock of the Company. 8.2. 3 The Assembly is authorized to decide about: (i) the increase and reduction of the capital stock, in accordance with the Articles of Association; (ii) the annual financial report and the report by the Supervisory Board; ( ) the distribution of the profit / dividends in accordance with the Articles of Association; (iv) the way of covering losses; (v) merging with other companies or joining of other companies to the Company or of the Company to another company, except for merger or joining of a subsidiary company; (vi) the change of the form, the division or the termination of the Company; (vii) the sale, purchasing, replacement, leasing and other transactions with property, at the extent larger than a third of the book value of the Company property; (v.) the sale and purchasing of the property the value of which is between 15% and 33% of the book value of the total existing property of the Company, unless such a transaction has been approved by a unanimous decision by the Supervisory Board; (ix) the appointment and relieving of duty of Members of the Supervisory Board; (x) founding, reorganization and liquidation of subsidiary companies and approving of their Articles of Association; (xi) compensations to Members of the Supervisory Board; (xii) adopting, and modifications and supplements of the Articles of Association; (x ) other issues connected with the Company and the operation of the Company as it was anticipated by the law and the Articles of Association of the Company. 8.2. 4 The Assembly of the Company is convened by: (i) the Chairman of the Supervisory Board; (ii) the Managing Board of the Company; ( ) the Member of the Company whose share makes at least a tenth of the capital stock. 8.2.

5 The Company Assembly must be convened at least once a year. 8.2. 6 The invitation to the Assembly is to be given by fax or by e-mail at least 15 days in advance. Along with the agenda, materials with explanations for each item of the agenda must be sent. The member of the Company whose share makes at least a tenth of the capital stock is entitled to propose additional items for the agenda within the term of 8 days from the date of receiving the invitation to the Assembly. 8.2. 7 At the Assembly, decisions are made by Members personally or through proxies authorized in writing. 8.2. 8 The Assembly can make decisions if the shares of the Members represented in the Assembly personally or through proxies make a half of the Company capital stock.

The Assembly will appoint the Chairman to lead the session and the signatory of the minutes for each session. 8.2. 9 The Assembly can establish its own rules for holding of sessions. 8.2. 10 The Assembly decides by the majority of represented votes on all the issues from its competence, except on issues stated in Article 8.2. 11.8.

2.11 The Assembly makes decisions by the two-third majority of votes on the issues of: (i) the increase or reduction of the capital stock; (ii) the division and the termination of the Company; ( ) the change of the form of the Company; (iv) the adoption, and the modifications and supplements of the Articles of Association; 8.2. 12 An extraordinary Assembly can make decisions by voting in writing, without convening the Assembly. 8.2. 13 In a case from the previous Paragraph, proposals with explanations will be submitted to Members of the Company in writing. Members of the Company will have a term of 15 days to submit their opinions. 8.2.

14 For Members which do not give their opinions about the submitted proposal it will be considered that they voted against the proposal. 8.3 Supervisory Board 8.3. 1 In the period of the validity of these Articles of Association, the Supervisory Board of the Company will consist of the Chairman and two Members appointed and relieved of duty by the Company Assembly. 8.3. 2 The Chairman and the Members of the Supervisory Board of the Company are appointed for the period until the expiry of the validity of these Articles of Association. 8.3. 3 The following persons cannot be appointed the Chairman and a Member of the Supervisory Board: (i) a person convicted for a criminal act and for an economic transgression incompatible with the duty in the Supervisory Board; (ii) a person to which it was forbidden to perform duties in the competence of the Supervisory Board by a court ruling; and ( ) a person aged over 70 at the date of appointment. 8.3. 4 The procedures of proposing and selection of the Chairman and Members of the Supervisory Board are completely stipulated by the Contract About Transfer of Shares. 8.3.

5 Sessions of the Supervisory Board are held at least four times a year. A session is convened by the Chairman at his own initiative or at the initiative by Members on the Board which together represent at least 1/3 of the capital in the Company. A proposal of the agenda must be enclosed to the invitation to the session and sent by fax or e-mail to other members at least 14 days before the session of the Supervisory Board. 8.3. 6 For holding of sessions of the Supervisory Board, the quorum of two thirds of the total number of Members of the Supervisory Board is necessary. The Supervisory Board makes decisions by the majority vote of the selected members. 8.3. 7 In case of absence of the Chairman, his function in the Managing Board is taken over by one of the members which represent the same share of capital in the Company. 8.3.

8 Persons which are not members of the Supervisory Board can be present at a session only on the basis of a written invitation by the Chairman. 8.3. 9 The Supervisory Board of the Company is competent: (i) to supervise the operation of the Company; (ii) to supervise the operation of the Managing Board; and ( ) to adopt the report by the Managing Board about operation per the semi-annual and annual account, with the balance of the state and the balance of the success; (iv) to submit to the Assembly an annual report on the operation of the Company which must include a report on the operation of the Supervisory Board and the plan of operation for the next business year; (v) to appoint the Managing Board of the Company; (vi) to propose the distribution and the way of using of the profit and the way of covering of losses; (vii) to approve the purchasing, sale, replacement, leasing and other transactions with property during a business year at the extent of 15-33% of the book value of the total Company property; (v.) to form temporary commissions and determine their composition and tasks; (ix) to convene the Assembly; (x) to carry out modifications of the Articles of Association if only the harmonization of the text is in question, according to the approval by the Assembly; (xi) for other issues which are connected with the Company or its business activity in accordance with the current regulations and the Articles of Association. 8.3. 10 The Supervisory Board is authorized to limit the authorizations of the Managing Board to act in the name and on behalf of the Company by its decision. In such cases of so-called reserved issues, the Managing Board or its member can act only with the previous obtained approval by the Supervisory Board. The Supervisory Board will solve the way of giving approvals in such cases by its decisions. 8.3. 11 The limitations from the previous Article do not have the effect against third persons.

In the circumstances when the Managing Board acts against these limitations, the Supervisory Board is authorized to convene the Assembly and inform it about such action, and request that corresponding measures be undertaken. 8.3. 12 The Chairman and the Members of the Supervisory Board are obliged to carry out their obligations in accordance with interests of the Company and cannot perform an activity competitive to the Company without advising of and the consent by all the other Members of the Supervisory Board. 8.3. 13 The Chairman and the Members of the Supervisory Board have the unlimited joint and several responsibility for damages they cause by non-performing or utterly careless performing of their duties. 8.3. 14 The Chairman and the Members of the Supervisory Board are responsible for damages which were suffered by the Company if, contrary to the provisions of the Law, the Articles of Association or the decisions by the Assembly of the Company, they have: (i) returned investments to Members; (ii) paid the profit; ( ) sold the Company property; (iv) performed payments after they had become aware or should have become aware that the Company had become insolvent. 8.3. 15 The Chairman and the Members of the Supervisory Board are entitled to demand all the data about the operation and the presence of Members of the Managing Board at sessions of the Supervisory Board. 8.3. 16 The Chairman and the Members of the Supervisory Board are entitled to be present at sessions of the Company Managing Board. 8.3.

17 The Supervisory Board of the Company is authorized to interpret the provisions of these Articles of Association. 8.4 Managing Board 8.4. 1 The Company has the Managing Board which consists of the Director and the Executive Director. 8.4. 2 The Managing Board is appointed and relieved of duty by the Supervisory Board.

The term of office for the Director and the Executive Director is 4 years. The position, the term of office, the authorizations, the responsibilities and the rights of the members of the Managing Board are stipulated by the contract between the Supervisory Board and the members of the Managing Board. 8.4. 3. The Director of the Company: (i) presides over the Managing Board; (ii) manages the operation of the Company; ( ) represents the Company without limitations and (iv) is responsible for legality of the operation of the Company. The Executive Director of the Company: (i) represents the Company without limitations and (ii) is responsible for legality of the operation of the Company. (Remark by BTD for the party: according to the carried out registration, both, the Director, and the Executive Director represent the Company without limitation.

We can now either leave such formulations in the Articles of Association too (and stipulate by internal decisions of the Supervisory Board the details of authorizations of each particular Member of the Managing Board, their obligations of joint or several acting and signing in the name of the Company) or we shall stipulate that already by the Articles of Association, in the way as it is done in case of the Mostar company, but that would have the need for changing of the registration as a consequence. I kindly ask that this be considered. By this draft, I decided for the first solution because it seems more practical to me at the moment.) 8.4. 4 The Supervisory Board will, in accordance with its authorizations from Articles 8.3. 10 and 8.3. 11 of the Articles of Association, ascertain by a special decision whether there are certain internal limitations in authorizations of the Director and the Executive Director, which are those limitations and in which way they will act in representing of the Company. 8.4.

5 The provisions of these Articles of Association, which ascertain the persons which cannot be appointed as members of the Supervisory Board, apply to the Managing Board as well. Special limitations regarding the selection of the Managing Board are also stipulated by the Contract About Transfer of Shares. 8.4. 6 The Director and the Executive Director are obliged to report to the Supervisory Board every direct or indirect interest in a legal person with which the Company has or intends to enter into a business relationship. They can participate in that business relationship only on the basis of a written consent by the Chairman of the Supervisory Board. 8.4.

7 The Company Director and / or the Executive Director can be relieved of duty by the Supervisory Board if there are important reasons for that, such as: (i) gross infringement of duties (obligations); (ii) inability to perform functions; ( ) (iv) (Remark by BTD for the party: The Articles of Association can anticipate other cases too) 8.4. 8 In case the Director and / or the Executive Director submits a resignation, he is obliged to continue performing tasks during the period of notice which is determined by the Supervisory Board and which cannot be shorter than 30 days. 8.4. 9 The Managing Board is authorized: (i) to manage the operation of the Company in accordance with the decisions made by the Supervisory Board; (ii) to prepare the decisions and company legislation which are made by the Assembly; ( ) to prepare contracts which can be concluded exclusively with the consent by the Assembly; (iv) to execute the decisions made by the Assembly; (v) to report to the Supervisory Board about its work; (vi) to be responsible for the legality of its work; (vii) to keep the Book of Shares; (v.) to conclude employment with employees, decide about their rights and also make particular decisions regarding that; (ix) for other tasks determined by the Law, the Articles of Association and the decisions by the Supervisory Board. 8.5 Procurator 8.5. 1 The Company can have a procurator which is authorized to undertake all the legal actions and affairs in the name and on behalf of the Company, except for transfer and burdening of the real estate. 8.5.

2 The Procurator cannot act as the other contract party without a special authorization by the Company and conclude contracts with the Company in his own name and on his own behalf, in his own name, but on behalf of other persons or in the name and on behalf of other persons. 8.5. 3 The Procurator cannot transfer his authorizations to another person. 8.5. 4 During representing of the Company, the Procurator is obliged to put the designation that he acts as the Procurator next to his signature. 9.

INFORMING OF COMPANY MEMBERS AND BOOK OF SHARES 9.1. Informing of Company Members 9.1. 1. Members are informed about the operation of the Company by the Assembly and the Supervisory Board of the Company. 9.2. Book of Shares 9.2. 1.

The Company is obliged to keep the Book of Shares in the way which ensures accurate and complete records about members of the Company and their shares. 9.2. 2. The Company Managing Board is obliged to immediately enter every change of data which are entered in the Book of Shares and register them with the court registry. 9.2. 3.

The following must be entered into the Book of Shares by all means: (i) the company name or the name and surname and the address of the residence or seat of Members of the Company; (ii) the type and the amount of the stipulated investment and the paid amount; ( ) special rights and obligations connected with the share. 10. JOINING OF COMPANY AND TERMINATION OF MEMBERSHIP IN COMPANY 10.1. Joining of new members to the Company is possible with the consent by Members of the Company which have over 50% of votes in the Company Assembly. 10.2. A Member of the Company which joins the Company in accordance with the previous article is entitled to leave it and to corresponding compensations in accordance with the Law.

10.3. The Founder's and the New Founder's rights to leave must be in accordance with the Share Sale and Purchase Agreement and the Contract About Transfer of Shares. 11. CHANGE OF FORM, MERGING, JOINING AND TERMINATION OF COMPANY 11.1 Change of Form 11.1.

1. The Company can change the form into the joint-stock company by the decision of the Assembly made by the two-third majority of votes of all Members. 11.1. 2.

In case the Company is organized in a joint-stock company, the Members acquire stocks in accordance with their participation in the capital of the former limited liability company. 11.2 Merging and Joining 11.2. 1 The Company can merge with another limited liability company or joint-stock company under the conditions prescribed by the Law. 11.3.

Termination of Company 11.3. 1. The Company can be terminated: (i) by merging, joining and division; (ii) by the decision by the Assembly; ( ) by the decision of the court; and (iv) by bankruptcy. 11.3. 2. In case the Company is terminated on the basis of the decision by the Assembly or the court decision, the procedure of liquidation is started.

In case of the termination of the Company on the basis of the decision by the Assembly, the liquidation is to be carried out by the Managing Board of the Company, and in case of the termination on the basis of the decision by the court, the liquidator is to be appointed by the court. 11.3. 3. After the final account is made, the liquidator is obliged to submit the application for entering the termination of the Company into the court registry. 11.3.

4. The Company loses the characteristic of a legal person by entering of the cancellation into the registry of the competent court. 12. PROCEDURE OF MODIFICATIONS AND SUPPLEMENTS OF ARTICLES OF ASSOCIATION 12.1. The Assembly, the Supervisory Board and Members of the Company have the right of proposing the modifications and supplements of the Articles of Association. 12.2.

The proposal of modifications and supplements of the Articles of Association is established by the Supervisory Board and sent to the Assembly for adoption by the two-third majority. 13. OTHER ISSUES OF IMPORTANCE FOR OPERATION OF COMPANY 13.1. Organization and Employees in Company 13.1.

1. The By-Law on Labour establishes the organization of work, salaries and other issues of importance for employees in the Company in accordance with the Laws and the collective agreement. 13.1. 2. The employees in the Company can organize a Union in accordance with the laws, the collective agreement and the rules of the Union. 13.2.

Business Secret 13.2. 1. As a business secret are considered the documents and information about the operation of the company which can cause damage if they come into the possession of a third person, without the consent by the Company bodies. 13.2. 2. Business secrets must not be revealed under any circumstances without a previous written consent by the Supervisory Board, even after the termination of the status of a Member of the Company or an employee in the Company.

13.2. 3. The infringement of the duty of keeping a business secret as confidential entails the breaking of the work contract for the employee and the responsibility for the caused damage. 13.2.

4. Special provisions about the secrecy of particular information connected with the Company are stipulated by the Share Sale and Purchase Agreement and the Contract About Transfer of Shares. 13.3. Stamp and Seal of Company 13.3.

1. The Company has the official stamp with the company name and the seat. The form, size, use and keeping of the stamp will be stipulated by the Managing Board. 13.3. 2.

The Company can have its sign, and the company name can contain graphic or stylized designations, which will be stipulated by a special decision of the founder. 14. TRANSITIONAL AND FINAL STIPULATIONS 14.1. With the date of entering of these Articles of Association into force, the former Articles of Association from October 2002 cease to be valid. 14.2. Company by-laws passed before entering of these Articles of Association into force will be applied to the extent in which they are not contrary to provisions of these Articles of Association until new by-laws are passed.

14.3. Authorized Company bodies will harmonize the existing by-laws with the provisions of these Articles of Association within the term of six months from the date of entering of these Articles of Association into force. 14.4. The Managing Board of the Company is responsible to preserve the Articles of Association, and it is obliged, at the request by any Member of the Company, to enable him to have an insight into the Articles of Association or to provide him with the transcript, i.e. the copy of the Articles of Association. 14.5. These Articles of Association enter into force with the date of their passing.

In Srebrenik, on the day of March, 2003 Chairman of the Company Assembly:.