قرار رقم (219) لسنة 1988 بشأن إصدار النظام الأساسي لشركة الاستثمارات النفطية

The General People’s Committee for Treasury

Decree No. (219) of 97 FDP/1988 AD on Issuing the Articles of Association of Oil Investments Company

Upon review of:

● The General People’s Committee Decree No. (101) of 1988 AD issued on 8 Rajab 97 FDP, corresponding to 20/2/1988 AD on incorporating a company outside the Jamahiriya called “Oil Investments Company” with the objective of acquiring and managing all the Jamahiriya’s oil-related overseas investments; and

● The General People's Committee for Treasury minutes of the second meeting in 1988 AD held in the City of Zawiya on 8 Shawwal 1397 FDP, corresponding to 23/5/1988 AD, and

● Based on the submission of the founders and shareholders of the aforementioned Company,

The General People’s Committee for Treasury has decreed the following:

Article (1)

The enclosed Articles of Association of the Oil Investments Company shall be approved.

Article (2)

This Decree shall enter into force as of the date of its issuance and shall be published in the official gazette.

The General People's Committee for Treasury

Date: 6 Dhul Qa’dah 1397 FDP

Corresponding to: 21 June 1988 AD

Articles of Association

On 7 Dhul Qa’dah 1397 FDP, corresponding to 21 June 1988 AD, these Articles of Association (the “Articles”) were concluded by and between: the Libyan Arab Foreign Bank (the “Bank”), the National Oil Corporation (the “Corporation”) and the Libyan Arab Foreign Investments Company (the “LAFICO”) (hereinafter referred to collectively as the “Shareholders”)

Whereas the General People’s Committee has issued Decree No. (101) of 1988 on 3 Rajab 1397 FDP, corresponding to 20/2/1988 AD, a copy thereof is enclosed herewith, wherein the Shareholders are permitted to incorporate a company outside the Jamahiriya with the objective of acquiring and managing all the Jamahiriya’s oil-related overseas investments;

Whereas the studies required for selecting that company's site and organizational structure have been conducted; and

Whereas the Shareholders, taking into account their joint obligations, are willing to put into force their agreement on incorporating, organizing and managing the business of the Company,

Therefore, the Shareholders agreed as follows:

Article (1)

Organization of the Company

1.1. Name:

The Company shall be called the “Oil Investments Company Limited”. Upon registration, if it is found that this name cannot be used due to similarity with another company, another similar name shall be selected.

1.2. Place of Incorporation:

The Company shall be incorporated as a closed joint stock company (Vennootschap) (NV) in the Netherlands Antilles.

1.3. Memorandum of Association:

The Memorandum of Association of the Company (the “Memorandum”) shall be made as outlined in Annex No. (2), and shall form an integral part of this Memorandum. The appointed chairman of the Company may amend or change the articles thereof, if the same is necessary or required upon incorporation.

If there is a conflict, contradiction or ambiguity between the terms of these Articles and the articles of the Memorandum, the provisions of these Articles shall prevail, to the extent permitted by the applicable laws.

1.4. Purposes of the Company:

The purposes of the Company shall be to own, coordinate, supervise, manage and finance the Company’s interests and shareholdings outside the Jamahiriya as a holding company, in the field of oil and petrochemical investments as detailed in the Memorandum. The Company may own such interests and shareholdings through a subsidiary, if required, holding or intermediary company incorporated in the Netherlands Antilles or any other place as decided by the board of directors.

1.5. Capital:

The capital of the Company shall be USD four hundred and fifty million (USD 450,000,000).

1.6. Management:

The Company shall be managed by a board of directors consisting of a number of members not less than five (5) and not more than seven (7) members, to be appointed as set forth in Paragraph (2.4) of these Articles, for five financial years.

The chairman of the board of directors shall be the chief executive officer of the Company. The board of directors may, if required, elect one or more vice chairman.

1.7. The legal term of the Company shall be twenty-five (25) Gregorian years.

Article (2)

Capital Contributions

2.1. Subscription in Stocks:

Upon the incorporation of the Company, each Shareholder shall agree to subscribe in one third of the Company's authorized capital. Each Shareholder shall pay an amount of one hundred fifty million (150,000,000) United States dollars in consideration for the stocks thereof, either in cash or in kind.

2.2. Payment in kind:

The Shareholders’ shares held in oil companies outside the Jamahiriya shall be transferred to the Company at their nominal value. The value of such contributions shall be deemed in-kind payments from the principal amount of each Shareholder’s contribution, as follows:

a. The Bank:

The Libyan Arab Foreign Bank shall, as soon as possible after the date of the Company's incorporation, transfer all its rights in and the title deed, free of any encumbrance, of Tamoil Italia (an Italian joint stock company) to the Company. Such share shall consist of 9,335,000 ordinary shares at a nominal value of 12,000 Italian Liras per share. For the purpose of paying the value of its stocks in the Company, the value of the Bank’s said share shall be, based on its nominal value, USD 85,971,000.

b. The Corporation

The National Oil Corporation shall, as soon as possible after the date of the Company's incorporation, transfer all its rights in and the title deed, free of any encumbrance, of Holborn Investments Limited Company, a Cyprus company (Holborn). This share shall consist of a transferrable bond at a principal value of USD 10 million, equivalent to two thirds of the authorized stocks in Holborn, and a promissory note at a principal value of USD 12.6 million.

For the purpose of paying the value of its stocks in the Company, the Corporation considered the value of the said stock equivalent to an amount of USD 12.6 million plus USD 4,500 per each stock in Holborn, which has been previously issued to the Corporation or its representative on the date of conversion.

However, an amount of USD 4,500 shall be payable to the Corporation by the Company against each stock issued by Holborn afterwards to the Company in accordance with the conditions of transferring transferrable bonds.

c. LAFICO:

The Libyan Arab Foreign Investments Company shall, as soon as possible after the date of the Company's incorporation, transfer all its rights in and the title deed, free of any encumbrance, of Kim Petrol, a British free company. Such share shall consist of ordinary shares at a nominal value of USD 500,000.

For the purpose of paying the value of its stocks in the Company, LAFICO’s said share has been valuated, based on the abovementioned nominal value thereof, i.e. USD 500,000.

2.3. Subscriptions Payment Schedule:

Each shareholder shall pay the entire purchase price of USD 150,000,000 for the stocks subscribed in the Company in four equal installments, according to the following Schedule:

First Installment: The first installment shall become due and payable as soon as possible after signing the Memorandum.

Second Installment: The second installment shall become due and payable on 31 August 1988 AD or earlier.

Third Installment: The third installment shall become due and payable on 30 November 1988 AD or earlier.

Fourth and Last Installment: This Fourth installment shall become due and payable on 28 February 1989 AD or earlier.

If the amount paid in kind by a shareholder exceeds the amount payable by the same, as per the above Schedule, the excess amount shall be deemed an advance payment of upcoming installments.

2.4. Capital Reserve

The Company may build up any type of reserves, as determined by the Board of Directors from time to time.

The Shareholders shall agree to set aside 30% of the Company’s net profits every year and deposit the same in a capital reserve account until the balance thereof becomes equivalent to the capital.

Article (3)

Relationship between Shareholders and the Company

3.1. Support and Facilities:

Each Shareholder shall provide the Company with all the support or facilities, as required, for the Company's business administration.

When dealing with the Company, each Shareholder shall procure that it deals with the same under conditions not less favorable than the conditions of collaborating with the customers thereof.

3.2. Non-Competition:

Each Shareholder shall not carry out any business related to oil outside the Jamahiriya or participate in any activity that falls within the Company's specialization or leads to competing therewith.

Article (4)

Operations of the Company:

4.1. Shareholders’ Meetings

a. All Shareholders’ meetings shall be held in any place inside or outside the Netherlands Antilles, as decided from time to time by the Board of Directors or as communicated through the meeting notice or the notice of exception therefrom, as required by the applicable laws in the Netherlands Antilles.

b. The Company’s ordinary meeting of the general assembly shall be held nine (9) months prior to the end date of the financial year to discuss the Company's activities. The Shareholders shall be notified of the place and date of the meeting via a written notice sent by mail at least fifteen (15) days prior to the date of the meeting, unless it is agreed that the written notice is not necessary.

The notice must provide for the agenda of the meeting. If the agenda contains a proposal to amend the Articles, the proposed amendment provision shall be included in the notice.

c. The Board of Directors may call for an extraordinary General Assembly meeting. Such meetings may also be held upon a call by the Chief Executive Officer, upon a written request from the majority Shareholders with the purpose of the meeting.

The Shareholders shall be notified by a written notice, with the place, date and purpose of the meeting, to be served via mail at least fifteen (15) days prior to the scheduled date of the meeting, unless the right to receive such notice is assigned in writing.

d. The General Assembly meetings may be held at any time without a notice, if all the Shareholders are present, either personally or by proxy.

e. Each Shareholder shall have one vote in General Assemblies for each stock held by the same.

f. The legal quorum of a General Assembly meeting shall be deemed reached if the meeting is attended by the majority Shareholders, whether personally or by proxy. In such a case, the majority of present shareholders may decide upon any issue referred thereto. However, a meeting with an agenda including the amendment of the Company’s Articles shall be valid only if attended by members representing 75% of the Company's capital.

g. The Secretary of the General People's Committee for Treasury may attend the General Assembly meetings. In such a case, the Secretary shall chair the meetings.

h. A Shareholders’ resolution may be passed without holding a Shareholders’ meeting, if all Shareholders agree on the same in writing.

4.2. The Board of Directors:

a. The Company's business and affairs shall be managed under the supervision of or by the Board of Directors, which has all the powers vested therein by virtue of the Netherlands Antilles laws and as set forth herein.

b. The first board of directors shall consist of the following persons:

- Mohamed Ibrahim Abdul-Gawad (Chairman)

- Abdullah Al-Badri    (Member)

- Mohamed Al-Huwaij (Member)

- Mohamed Hussein Lias (Member)

- Abdullah Ammar Al-Saudi (Member)

- Mohamed Al-Taher Sayyala   (Member)

- Ahmed Al-Fergani    (Member)

c. The Shareholders shall, when selecting the Board members, comply with the decrees of the General People’s Committee. When nominating each new board, the Board shall include one representative of each Shareholder, while other members shall be independently selected.

d. Board meetings may be held inside or outside the Netherlands Antilles and the legal quorum thereof shall be reached by the attendance of majority members. Resolutions shall be passed by the majority vote of members present.

e. No member of the Board may execute a document to bind the Company, represent it or sign on its behalf without an authorization issued by a resolution of the Board of Directors.

f. After its appointment by the annual General Assembly and immediately upon completing the activities of such Assembly, the Board of Directors shall hold a meeting without a prior notice, if the legal quorum is present, to elect the members thereof and discuss any other activities.

In such a meeting, the chairman of the Board shall be elected, one or more vice chairman may also be elected and other officials may be appointed, as appropriate.

g. The Board of Directors shall hold no less than six (6) ordinary meetings per annum. The chairman of the Board may, at his own discretion, call for exceptional meetings, as necessary.

The date and place of ordinary meetings held with or without an official invitation shall be determined.

h. Each member shall be given a notice, to the residence or work address thereof, of any extraordinary meeting of the Board at least 15 days prior to the date thereof. Such notice shall be given by mail, personal delivery or phone. If necessary, the chairman may call for an exceptional meeting via a shorter notice, provided that the call for such a meeting is personally made by him.

The call for a meeting shall determine the date and place of the meeting, without identifying the purpose thereof.

i. The resolutions of the Board may be passed upon approval by all members whether in writing or by a telegram. Such decisions shall be as effective and binding as the decisions made in any Board meeting.

4.3. The Chief Executive Officer:

a. The Chairman of the Board of Directors shall be the chief executive officer.

b. Subject to the provisions of Paragraph 1(G) of Article (4) hereof, the Chairman shall chair the General Assemblies.

c. The Chairman shall chair the Board meetings and shall assume the overall supervision of the Company’s management and policy, the normal duties and responsibilities of such position, as well as the powers required to carry out the duties determined from time to time by the Board of Directors.

d. The Board of Directors may authorize one of the members thereof or any other person to undertake some powers or duties, as deemed necessary by the same.

4.4. Financial Year:

The Gregorian Year shall be deemed the Company's financial year, and the first financial year shall commence as of the date on which the Company begins to conduct its business and until the end of 31/12/1989 AD.

4.5. Auditing the Company’s Accounts

The Company's accounts shall be audited as required by the applicable laws of the country of incorporation and subject to international standards. The Company’s audit shall be performed by an international audit firm to be identified and selected by an ordinary General Assembly.

4.6. Financial Reports and Business Activity

In order for Shareholders to be fully aware of the Company’s operations, the Board of Directors shall provide such Shareholders with the following financial information and reports:

a. An estimated budget, before the beginning of every year;

b. Quarterly reports on business activity, after the end of every quarter; and

c. Financial reports and financial position report, twice a year.

In witness whereof, the Parties hereto affixed their signatures hereunto through their duly authorized signatories on the date set out hereinabove:

The Libyan Arab Foreign Bank:

Signature:

Name:

Title:

The National Oil Corporation

Signature:

Name:

Title:

The Libyan Arab Foreign Investments Company

Signature:

Name:

Title:

Memorandum of Association

Name and Headquarters

Article (1)

1. The Company shall be called the “Oil Investments Company NV.”

Article (2)

Purposes

Purposes of the Company:

a. To purchase, own, manage, sell, barter, trade and transfer stocks, bonds, debentures and other securities; and to borrow funds and give guarantees in any form whatsoever for the interest of a third party.

b. To incorporate companies and corporations and contribute thereto; and

c. In general, to carry out all the business activities related to the foregoing purposes.

Article (3)

Term of the Company

The Company has been incorporated for an indefinite term.

Article (4)

Capital and Stocks

1. The authorized capital of the Company shall be USD (      ) divided into (  ) stocks at a nominal value of USD (        ) per stock.

Under a resolution of the Board of Directors, (   ) stocks have been issued on the incorporation of the Company, and the value thereof was fully paid.

2. The Board of Directors shall issue the remaining stocks of the Company. No stocks shall be issued at a value lower than the nominal value.

The Board of Directors shall determine the dates of paying up the issued shares.

3. The conclusion of agreements, stipulated in Article (60) of the Commercial Law of the Netherlands Antilles, shall be deemed one of the powers vested in the Company's management, with no need for an authorization from the Shareholders.

Article (5)

1. The Company’s stocks shall be deemed nominal stocks.

2. Upon the Shareholders’ request, certificates of the Company’s stocks may be issued to the Shareholders. The Company shall bear the expenses of issuing such certificates.

Article (6)

1. The Board of Directors shall keep a register of the Company's shares. Such a register shall contain the Shareholder's name, residence address, chosen domicile, and numbers and figures of stocks held by the same.

2. Any transaction related to the transfer of the stocks shall be recorded in the respective register. Such a process shall be carried out by a Board member, based on a Board resolution to that effect.

3. The process of transferring stocks shall be by a notice to that effect to be sent to the Company or upon the Company's approval of such transfer.

4. Recording the process in the aforementioned register shall be deemed an approval by the Company of such transfer, if no stock certificates are issued for such stocks. Otherwise, the approval of such transfer shall be by an entry to be made in writing on the issued certificates and signed by a Board member, pursuant to a resolution passed by the Board to that effect.

Article (7)

The Board of Directors

1. The Company shall be managed by a board of directors consisting of two or more managing directors. For the purposes of this Memorandum, the Board of Directors shall mean the Board’s managing directors appointed in the Company to perform their functions through Board meetings or any of them representing the Company under a special and specific authorization issued by one of the Board’s managing directors at one of the meetings thereof.

None of the Board’s managing directors shall have the right to bind, represent or sign on behalf of the Company, unless specifically authorized for such purpose.

2. The Board’s managing directors shall be appointed by the General Assembly, which shall have the right to suspend or replace them.

3. The Board of Directors shall hold its meetings at any date and place, and by any means it deems appropriate. The Board meeting shall not be valid unless attended by the majority of appointed Board members

Resolutions shall be made by the majority vote of members present.

4. The Board of Directors may pass resolutions upon approval by all members, whether by a telegram or in writing.

The resolutions passed this way shall be deemed as effective and binding as those passed in ordinary Board meetings.

5. Board meetings shall be called for by the managing director(s) authorized to do so by the Board.

The notice of a meeting shall be given either personally or in writing at least fifteen (15) days prior to the date of the meeting. The members of the Board may waive the right to receive such notice prior to during or after the date of the meeting.

6. Without limiting the responsibilities of the Board of Directors, the Board shall have the power to appoint authorized representatives for the Company, determine their powers, and the method of representing the Company and signing on its behalf.

Shareholders’ Meetings

Article (8)

1. The Shareholders’ meetings shall be held in Curaçao.

2. The Shareholders’ annual meeting shall be held within nine months as of the end date of the Company's financial year.

The matters to be discussed in such meetings shall include, without limitation, the following:

a. The report of the Board of Directors on the Company’s conditions and activities during the financial year preceding the meeting;

b. The report of auditors on the Company's accounts, as well as their appointment and fees;

c. The Company's balance sheet, account of profits and losses, after producing a copy thereof. In addition, all the statements and data identifying the approach adopted for estimating the Company's assets and liabilities shall be submitted.

Article (9)

1. A Shareholders’ meeting may be called for either by the Board of Directors or a group of Shareholders holding at least two thirds of the issued capital.

2. The Shareholders shall be notified to attend their meetings by a written notice to be given thereto at least fifteen (15) days prior to the scheduled date of the meeting. A meeting notice shall include the agenda thereof and, if the agenda includes an item related to amending the Company's Articles of Association, the draft amendment.

Nevertheless, the Shareholders’ resolutions may be made without complying with the foregoing provisions, if approved at a meeting attended by representatives of all Shareholders.

3. The Shareholders may attend their meetings by proxies duly authorized in writing to do so.

4. Save the provisions of Article (13), the majority of Shareholders shall attend any Shareholders’ meeting in order to be valid. Resolutions shall be adopted by the majority vote of the Shareholders present.

5. Shareholders’ resolutions may be passed upon their unanimous approval, whether in writing or by a telegram.

The resolutions passed this way shall be deemed as effective and binding as those passed in ordinary Shareholders’ meetings.

Article (10)

Each Shareholder shall have one vote for each stock held by the same.

Article (11)

The Financial Year

The Gregorian year shall be the Company's financial year.

The Company's first financial year shall continue as of the date its business commencement until 31/12/1989 AD.

Article (12)

1. The Board of Directors shall submit to the General Assembly, within nine (9) months as of the end date of the financial year, a report on the Company's business activities during the preceding financial year, the balance sheet, the account of profits and losses, and all the statements and data stipulated in Article (8) hereof.

2. The Board of Directors shall make available, in the Company's premises and at the disposal of the Shareholders or their representatives, the Company's balance sheet, account of profits and losses and clarification statements as of the date of declaring the date of the General Assembly meeting until the end of the meeting.

3. The balance sheet and the account of profits and losses shall be approved by the General Assembly.

4. The Board of Directors shall determine the amounts to be transferred to reserve accounts.

Article (13)

Amendment of the Memorandum of Association and Company Liquidation

1. The resolutions related to amending the Memorandum of Association or the Company's liquidation shall not be valid unless passed in a general assembly meeting upon approval by Shareholders holding 75 % from the issued capital.

2. In case of Company liquidation, the General Assembly shall determine the requirements to be met.