Quds Bank

Limited Public Shareholding Company

A Limited Shares Company

 

ARTICLES OF ASSOCIATION

of

Quds Bank

Limited Public Shareholding Company

A Limited Shares Company

 

Article (1)  : Company Name

QUDS BANK

Limited Public Shareholding Company.

Article (2)  : Company Head Office

The company head office shall be in the city of Jerusalem while its temporary head office shall be in the city of Ramallah and the company has the right to open new branches and agencies in any other country either inside or outside the Palestinian territories, and the company has also the right to transfer any of its branches or agencies to any other place either inside or outside the country.

Article (3)  : Company Purposes

Purposes for which the company has been duly established are as follows:

1) Providing all kinds of banking and investment services, mobilizing of savings for internally and externally investment through accepting short-term and/or long-term deposits in the local and/or foreign currencies.

2) Opening letter of credits for import and export.

3) Working on the development of tourism, agriculture, industrial, commercial and housing projects by providing loans, facilities and consultations to housing, financial and economical projects.

4) Conducting all investment and/or financial and/or commercial businesses to which it entails the nature of the company purposes  in such a way that it deems fit and suitable, including the issuance, sale and buy bonds and/or commercial securities, sharing in existed corporate, establishing new firms, investing the company funds by providing loans to projects, companies and other foundations and performing all types of economical credit businesses within the applicable and in effect laws and regulations.

5) Dealing and trading in stocks, security bonds to the bank’s account or its customers’ account.

6)  Involving in or making and entering into agreements to benefit from profits of any commercial or tour or agriculture or industrial or housing project, making or has the intention to make any action that falls within its purposes or combining or cooperating with that project or possess, sell, dispose and dealing with any share related thereto and providing the project with a financial, investment or cooperative assistance in any way.

7) Mobilizing the savings of the Palestinians whom they work abroad and increasing their activation and integration with the economic events in Palestine.

8) Developing the Security Exchange of Palestine, developing its structure and effectiveness, introducing new financial tools thereto, including establishing and managing the investment co-funds.

9) Furnishing savings through making the Islamic Banks’ services available by accepting investment deposits for operations of speculation, participation and profitability while the company has also the right to open a new competent and specialized branches and agencies in this regard.

10) Preparing studies pertained to projects and promoting its establishment.

11) Covering all processes of new shares floating , attributing loans to finance projects and marketing these loans inside and outside the country.

12) Issuing guarantees on behalf of customers.

13) Dealing with foreign currencies and precious metals.

14) Providing Technical, financial and investment services to its clients in Palestine and abroad.

15) Possessing, leasing and renting of real estates, buildings, machinery, sets and other means of transportation and necessary machines to achieve the company purposes.

16) In addition to the aforementioned, all other matters stated in the second appendix attached with the companies' law of the year 1929 as amended shall be considered an integral part of the contract that comply with purposes of the company.

Article (4)  :  Company Term

The company term is unlimited.

Article (5)  :  Company Capital

The company capital is (US $ 50,000,000.00) Fifty Million US Dollars divided into (50,000,000) Fifty Million Shares with each share value of ($1) One US Dollar.

Article (6)  :  Members' Liability

The members' liability shall be limited in the amount of each one's subscribed shares in the company's shares.

Article (7)  :        We, the under-listed names and addresses, hereby

                           desire to incorporate a public shareholding company
                           with limited shares in accordance with these articles of
                           association, and each one of us hereby undertakes that
                           he shall subscribe number of shares at the
                           company shareholding capital as stated against each
                           name hereunder.

The names signed on such articles of association and the number of shares that each one of the signed has subscribed.

#

Shareholder's Name

No. of

Shares

Value in

US $

1.

NIZAR ABDELRAHIM MONIB JARADNA

1,000,000

1,000,000

2.

HAIDAR ISSA MURAD & SONS CO.

300,000

      300,000

3.

JORDAN INVESTMENT & FINANCE BANK

1,500,000

1,500,000

4.

ADEL ADIB YOUSEF HIJJAWI

1,000,000

1,000,000

5.

MOHAMMAD SAMEH RAFIQ QAMHAWI

1,000,000

1,000,000

6.

NABIL YOUSEF AHMAD BARAKAT

1,000,000

1,000,000

7

MOHAMMAD ISSA MURAD MURAD

150,000

150,000

8.

AMMAN CAIRO BANK

1,000,000

1,000,000

9.

ZAHER MOHAMMAD SULEIMAN JARADNA

100,000

100,000

10.

WALID NAJIB MUSTAFA ALAHMAD

50,000

50,000

11.

AHMAD ISSA MURAD & CO

150,000

150,000

12.

RA'OUF MOHAMMAD SALIM SHADEED

100,000

100,000

13.

FU'AD FARHAN SALIM ABU HAMDAN

100,000

100,000

14.

ANTONE KHALIL MIQBEL DABABNEH

200,000

200,000

15.

SAMI FARAH HANNA HALABI

200,000

200,000

16.

SALIM SABBAGH SONS CO.

200,000

200,000

17.

RIYAD FAHMI ABDALLAH ALSAIFI

70,000

70,000

18.

MOHAMMAD MORTADI SAID YA'EESH

100,000

100,000

19.

MASHHOUR HADITHA MOHAMMAD ALJAZI

50,000

50,000

20.

IBRAHIM ABDELHAMID MOHAMMAD ABU AYYASH

25,000

25,000

 

Total

8,295,000

8,295,000

 

 

BY-LAWS

of

Quds Bank

1. The following expressions mentioned in these by-laws and well-known in the companies' law of the year 1929 or in any other amended law shall have the same specified meaning in that law, unless the text states otherwise.

2. Company Name

QUDS BANK

Limited Public Shareholding Company

3. Company Head Office

The company head office shall be in the city of Jerusalem while its temporary head office shall be in the city of Ramallah and the company has the right to open new branches and agencies in any other country either inside or outside the Palestinian territories, and the company has also the right to transfer any of its branches or agencies to any other place either inside or outside the country.

4. Company Purposes

Purposes for which the company has been duly established and incorporated are as follows:

1) Providing all kinds of banking and investment services, mobilizing of savings for internally and externally investment through accepting short-term and/or long-term deposits in the local and/or foreign currencies.

2) Opening letter of credits for import and export.

3) Working on the development of tourism, agriculture, industrial, commercial and housing projects by providing loans, facilities and consultations to housing, financial and economical projects.

4) Conducting all investment and/or financial and/or commercial businesses to which it entails the nature of the company purposes in such a way that it deems fit and suitable, including the issuance, sale and buy bonds and/or commercial securities, sharing in existed corporate, establishing new firms, investing the company funds by providing loans to projects, companies and other foundations and performing all types of economical credit businesses within the applicable and in effect laws and regulations.

5) Dealing and trading in stocks, security bonds to the bank’s account or its customers’ account.

6)  Involving in or making and entering into agreements to benefit from profits of any commercial or tour or agriculture or industrial or housing project, making or has the intention to make any action that falls within its purposes or combining or cooperating with that project or possess, sell, dispose and dealing with any share related thereto and providing the project with a financial, investment or cooperative assistance in any way.

7) Mobilizing the savings of the Palestinians whom they work abroad and increasing their activation and integration with the economic events in Palestine.

8) Developing the Security Exchange of Palestine, developing its structure and effectiveness, introducing new financial tools thereto, including establishing and managing the investment co-funds.

9) Furnishing savings through making the Islamic Banks’ services available by accepting investment deposits for operations of speculation, participation and profitability while the company has also the right to open a new competent and specialized branches and agencies in this regard.

10) Preparing studies pertained to projects and promoting its establishment.

11) Covering all processes of new shares floating , attributing loans to finance projects and marketing these loans inside and outside the country.

12) Issuing guarantees on behalf of customers.

13) Dealing with foreign currencies and precious metals.

14) Providing Technical, financial and investment services to its clients in Palestine and abroad.

15) Possessing, leasing and renting of real estates, buildings, machinery, sets and other means of transportation and necessary machines to achieve the company purposes.

16) In addition to the aforementioned, all other matters stated in the second appendix attached with the companies' law of the year 1929 as amended shall be considered an integral part of the contract that comply with purposes of the company.

5.  Company Term

The company term is unlimited.

6. Members' Liability

The members' liability shall be limited in the amount of each one's subscribed shares in the company's shares.

7. Company Capital

The company shareholding capital consists of US ($ 50,000,000.00) Fifty Million US Dollars divided into (50,000,000) Fifty Million Shares with each share value of ($1) One US Dollar.

8.              

A)  The company shareholding capital is divided into an equal shares value whereas the shares shall be issued in its par value and shall not be issued in an amount less than this value.

B)  The shares shall be registered in the names of its owners, except those of incorporation shares that shall be covered against the corporeal shares whereas the subscribed shares by the company's founders shall remain as of its par value along with the precedent term of dissemination of the balance sheet and profit and loss statements and other related attached documents of two full fiscal years whereby each year shall not be less than Twelve Moths from the date of issuing the license for establishing the company or its registration date with the companies' registrar (Approval Order).

9. The company funds or any part of it shall not be used in buying its shares.

10.          

A)         The value of the shares to be paid as per the following:

1-   At Least 25% of the subscribed shares value and shall be paid on subscription.

2-   The remaining amount shall be paid as decided by the board of directors during three years from the date of establishing the company.

B)  If the company shares haven't been covered in full at the date of public subscription, then the board of directors has the right to dispose in the remaining shares in such form that comply with the company interest taking into consideration the applicable provisions of the companies' law.

11. The shareholders shall be abided by the amount of what they hold of shares only and shall not be requested for more than that.

12. The person whose share is registered in his name shall be considered as the owner of that share and consequently the company will not recognize any shares or claims or any other relation to whosoever in that share unless otherwise stated obviously and expressly in this by-laws.

13. A share shall be indivisible, but more than one person may be represented in it, provided that all shareholders shall be represented by one person and the same if they shared in several shares.

14. The joint-shareholders shall be jointly and severally considered liable for paying all due settlements for such shares.

15. The shareholder has to accept the company by-laws as well as its general assembly decisions and board of directors' resolutions and shall be abided by.

16. The company shall give certificates of shares to its holders during two months of settling all due installments on the subscribed shares in accordance with the format as decided by the board of directors. However, such certificates shall be sealed by the company official seal and signed by the authorized signatories on behalf of the company.

17. Each shareholder has the right to obtain a certificate of shares registered in his name according to what have been mentioned in the previous article and shall include the number of shares possessed.

18. The shares registered in joint shareholding persons shall be delivered to the firs name listed in the company register, and hence the company shall not be committed to issue more than one certificate for the same shares.

19. If the shares certificate is being deteriorated or damaged, then its holder has the right to refer to the board of directors concerning its impairment and issuance of new certificate instead of it and if it is lost or damaged and the board of directors convinced by the submitted information to prove the same, then the board of directors has the right to approve the issuance of new certificate (alternative of lost certificate) after paying fees prescribed by the board of directors as well as submitting a proper acknowledgment for each deterioration and damage that may be incurred by the company as a result of that.

Claiming for shares Installments and its Obligations

 

20.          

A) The subscriber or the shareholder is indebted to the company with the full unpaid amount due onto his shares.

B)  If he did not pay the due installment on the share before the date specified for the same, then the board of directors has the right to add to such installment the prescribed interest by the law as from the date specified for payment upto the date of settlement or otherwise the board of directors may assign the interest payment or decreasing to the ratio that the board deems that the company is not exposing to any loss. 

21.  An extra period of time of no less than fourteen days shall be given to each claim regarding installments or a notification shall be issued concerning the same whereas the claim notification shall include place and time of paying.

Attachment, Confiscation and Sale of Shares

22.          

A) If the shareholder did not pay the due payable installments after the end of the extra period given above, the company, then, has the right to offer such shares for sale in a public auction for the account of the shareholder who delayed to pay and under his responsibility without giving any official warning or taking any legal procedures. The company has to announce the same in two daily newspapers before twenty days of the sale date.  

B) The date and place of sale and the number of offered shares for sale by auction shall be determined in the advertisement.

C) After the expiration of the previous period, the sale transaction through auction shall be conducted in the place and date announced. The shares will be sold to the highest price offered and each bidder shall pay an advance payment of at least 10% of the shares par value of the offered shares whereas the bidder who refrains or disdain accepting the sale shall loose it.

D) It is prevented to accept settling the due installment in the same day determined for conducting the auction.

E) All required amounts of the sale price shall be fulfilled to the company such as due installments, interests and expenses, then the remaining will be returned to the shareholder. The sold shares will be recorded and registered in the name of buyer who will become the legal owner of such shares without any need to verify of true sale procedures or the way of disposing the sale price.

 F) If the sale price was not enough to settle the requested amounts to the company, then the company has the right and by the amount remaining to go back on delinquent. The company restrictions with respect to the public sale auction shall be true unless otherwise controversially stated. Such way of execution shall not prevent the company to use, and before the delayed shareholder at the same time or in any other time, all rights entitled to the company by virtue of the general provision of the  law.

23.                 

A) The company has the right to attach on the shares registered in the name of any shareholder as well as its dividends in order to ensure settling the due debts concerning the required obligations and commitments to the company from such one or from his company or who corresponded to his bankruptcy including the value of shares and any installment of due installments. The board of directors may announce in any time to exempt any share from the text of this article entirely or partially.

B) It is allowed to attach on the debtor shares and dividends as an insurance to fulfill the debts committed by one of the shareholders and also to sell these shares in accordance with the rules with respect to attaching and selling shares.

24. The board of directors may bind each shareholder whose shares have been confiscated that he has to pay the interest determined by law to the company in addition to all required installments, interests and expenses pertaining therein until the date of confiscation. The board of directors has the right to assign the fulfillment of such interests or decreasing the same.

25.                 

A)  It is allowed to mortgage the share provided that such mortgage has to be mentioned in the company register and further such mortgage has to be also mentioned in the shareholding document or shares certificate.

B) The mortgage contract shall state the determination of due dividends, term of mortgage and other conditions therein.

C) It is not allowed to remove such mortgage unless having the pledgee confirmation that his right has been fulfilled in the company register or pursuant to obtained judgment of final degree.

Shares Transfer

26.                 

A) Shares are transferred by inheritance and duly registered according to inheritance rules of transfer based upon a request submitted to the boards of directors by the heirs or any one of them or their attorneys, legal guardians, or their custodians. Then the deceased shares will be transferred to the due names as per the applicable rules.

B) The title of shares are transferred either by sale or gift or mortgage and recorded in the company member's register after submitting an instrument signed by referral and referee taking into consideration the legal provisions of shares trading. In spite of the occurrence of waive or transfer and file it in the members' register, the original owners and the respective waivers shall stay liable jointly and severally with the assignee for the remaining amounts of the assigned shares' value until settling the value of the shares.

27. Shares may trade and sell after settling at least the amount equal to 50%.

28.  Shares transfer can be made upon an agreement between the referral and the referee in writing whereas the referrer shall stay the owner of the shares till having been registered in the name of the referee in the company register and/or the records of Palestine Exchange.

29. Shares may be sold or transferred as for the company through Palestine Exchange and in accordance with the law. 

30. It is not allowed for the board of directors to approve shares transfer or sale in the following events:

A) If the share was mortgaged, attached or withheld.

B) If share was lost and new certificate was not given yet.

C) If transfer or sale was violating the companies' law, by-laws or the interest of the company.

31. It is not allowed for any shareholder to possess more than ten percent of the company's shares unless having been attributed and nominated by the board of directors as well as having the approval of the competent monitoring authorities.

32. The transferred deed shall be regulated in the following formula or in any other formula that to be approved by the board of directors.

{{Shares Transfer Deed}}

 

I, _____________________, from ____________ and inconsideration of  amount ____________ paid to Mr. ________________(hereinafter called the “referee”), do hereby transfer, pursuant to this deed, to the said referee the number of ________shares of Quds Bank Company – Limited Public Shareholding, from number ________ to number __________, and the said referee(s) or his/their heir(s) after him/them or his/their estate executers or the custodians or those the referee will transfer the right to own this share or shares as per all the terms and conditions were applied at the time of titling such share or shares when such deed has been regulated.

I, the said referee agree by virtue of this deed to take the said share or shares as per the above said conditions, and therefore we have signed this deed on this day ________, corresponding to: ____/___/19__ .

Referrer                                                   Referee

Signature:                                                 Signature:

Address :                                                  Address :

Witness :                                                  Witness :

33. Certificate of shares and any other document that may be required by the company, to prove the title of the referrer of such shares or to prove his right in transferring such shares, shall be attached with the Transfer Deed

34. The deceased estate executor or the estate custodian or the sole heirs that the company recognizes their right in shares shall be considered as a shareholder.

35. As a result of shareholder death, each one where the title of share has been transferred, has the right - after presenting the requested evidence to the board of directors - to register his name as a member in the company for that share and can transfer such share to other or others.

36.  A fee determined by the board of directors shall be fulfilled for each transfer transaction.

37. As a result of shareholder death, the transferee has the right to gain his portion of profits in that share, however, this will not authorize him to exercise the company members' rights in its meeting before registering such share in his name.

38. The due profits of share shall be paid to the last owner whose name had been recorded in the company register. In addition to that, he has only and sole right to receive the amounts due on share either portion of profits or share of the company assets.

 

Changing the Company Capital

 

39. It is allowed to increase the company capital by issuing new shares based on the general assembly decisions and based on a proposal by the board of directors if the original company capital has been fully covered or all of the shares' installments have been paid after following the applicable provisions in the companies' law.

40. The general assembly may issue its decision to increase the company’s capital by the majority of at least 75% of its members who have the right to vote at the general meeting.

41. The new shares’ par value shall be equal to the old shares’ par value and in the event of issuing new shares in a price exceeding its par value then the difference between the par value and the issuance price should be recorded to the reserve account.

42.The provisions of original subscription shall be applied on the new shares.

43.  It is allowed to reduce the company’s capital by a decision of the general assembly and based on a proposal by the board of directors if the company capital increased over its necessity or if loss incurred and the company decided to reduce its capital to the value of its assets.

44. The reduction of capital shall not be approved unless for a reason of maintaining others' rights as per the provisions of law.

45. Such reduction shall be based on a decision that to be issued by the general assembly in a majority of 75% at least of members who have the right to vote at the meeting whereby it shall be associated with the competent court consent.

46. The reduction may be made by one of the two following ways:

A)  Reducing the shares’ par value by deleting the commitment to pay the undue installments if it is considered as an access over the company’s need.

B) Reducing the shares’ par value by deleting the part of its paid price equal to the amount of loss in the event of having a loss or by return part of it if the company deems that its capital is in excess of its need.

Issuing Bonds

 

47. The company has the right, after having the approval of the general assembly based on the proposal made by the board of directors, to issue loan bonds with a one par value for trading and indivisible in terms of conditions and way that the board of directors deems fit and suitable; provided that its total value shall not exceed the company’ capital. Therefore, the procedures of issuance, subscription and registration shall be made in accordance with the provisions of companies' law, banks’ law and the Palestinian Monetary Authority’s law.

Managing the Company by its Board of Directors

 

48.          

A) The company management shall be assumed by a board of directors consisting of seven members and not exceeding fifteen members whom shall be elected through the general assemble by secret voting.

B) The term of the board of directors shall be four years and expired when electing new one.

C) The existing board of directors shall continue handling the company management till electing the new one whereby such process shall be conducted during a period not exceeding of four months from the expiration date of the course of old board.

49.          

A) It is stated for the board of directors’ membership that the nominee shall own at least (30,000) Thirty Thousand Shares of the company shares along his term of membership.

B)  The membership of any member shall be automatically lost if his shares reduced under the specified number of share during his membership.

50.          

             A) The quorum of the board of directors' shares that are qualifying to the membership shall remain attached as long as they are members until six months after their membership date of expiry and they do not have the right to trade-in during such period.

             B) The attachment sign shall be put on such shares whereby this attachment shall be considered as a lien in favor of the company or to ensure the responsibilities of the board of directors and shall also be indicated at the share register.

51. It is not allowed to elect any person under Twenty Five years old to be a board member.

52.          

             A) If a position of an elected member became vacant due to any reason whatsoever, then such shall be replaced by successor who shall be elected from shareholders hold the membership qualifications and that shall be made by the board of directors.

             B) This action shall be followed each time of vacant position at the board of directors, and such appointment shall remain temporarily till being presented to the general assembly at its first meeting in order to approve it or to elect a person who will fill the vacant position according to the companies’ law. Moreover, in such case the new member shall complete the term of his ancestor's membership at the board of directors. 

53. The position of a board member shall be considered vacant in one of the following cases:

1- If he/she resigns from his/her position upon a written notice to be addressed to the board of directors. Hence, such resignation shall be valid and in effect as from the date of notifying the board and shall not be subject to acceptance by any one and shall be irrevocable.

2-  If the number of possessed shares decreased from the quorum that is qualifying to the membership.

3-  If he/she shall become incapacity.

4-  If he/she shall be absent from attending four consecutive meetings, or if he/she shall be absent from attending the board meetings for six consecutive months.

5-  If he/she shall be detained by the board of directors with respect to maintaining the company secrets.

6- If he/she judged for:

1-   Any crime.

2-   Immoral, theft, fraud, mistrust, forgery, neglecting bankruptcy, perjury or false testimony crime.

54. The board of directors shall meet after one week of being elected and shall elect, from its members, by the secret voting or in any other way deems fit and suitable, the chairman and a vice-chairman who will replace the chairman during his/her absence. In case of chairman and vice-chairman absence then the board shall appoint a member who will act temporarily as a board chairman.

55. The board of directors may, by secret voting and when find suitable, elect one or more authorized member who will has the right to sign on behalf of the company singly or jointly as they have been authorized therein.

56.          

A) The board of directors shall appoint a company qualified and efficient general manager and shall determine his/her powers and responsibilities according to instructions issued by the board for such purpose, and also shall authorize him/her with the company general administration under the supervision of the board. Further, the board shall determine the general manager’s salary; provided that he/she shall not be a general manager for more than one company.

B) The company board of directors has the right to end the general manager services; provided that the board shall notify the official competent party with any decision made concerning the appointment of the company general manager or end his/her services during ten days from the date of making the decision.

C) It is allowed to appoint any board member as assistant to the company general manager or deputy thereto.

57.          

A) The board of directors is the primary planning authority at the company and it is the entitled to setup the company polices and plans, and approving the regulations which shall be followed in its internal and external relations and shall supervise the sound implementation therein.

B) The board of directors supervises the works of the company general manager, and the board has the right to authorize him/her to exercise some of its powers when interest so required.

C)  The chairman or whom may authorize from the board members shall have the absolute right to prescribe on any papers, documents, correspondences, accounts or information that deem fit to look over in any time they deem fit and suitable and no one has the right to object therein.

58. The company shall provide the companies' registrar with a copy of electing decisions of chairman, vice-chairman, and the authorized members during 14 days from the date of each decision.

59.  The chairman or who may authorize shall be the company president and shall represent the company with others and before all authorities as well as his/her signatory shall be considered as entirely board of directors’ signatory in the company relations with others unless the board may decide otherwise.

60. The chairman shall, in cooperation with the management, execute the resolutions made by the board and shall be bound via its directions.

61. The vice-chairman shall deputize the chairman in case of his/her absence and shall handle all of his/her powers in such case.

62.          

A) The chairman and the board members shall be liable for any breach that may be committed singly or jointly against the laws,
regulations, and general instructions or against the company by-laws.

B)  The claim that the harmed may file is a personal claim and concerning the shareholders a proposal made by the general assembly to acquit the board of directors can't prevent from doing so.

63.          

A)The chairman and the board members are liable towards shareholders for their intended omission and serious delinquency, but with respect to others they are not initially liable for that default.

B) In case of company liquidation and having a deficit at its assets as a result of intent omission or serious delinquency, then the court has the right to decide charging the chairman and the board members or the company managers or its auditors the company debts in part or in whole and within the limit of their shareholding at the company.

C) The company may specify the amount that they are liable for whether they were jointly responsible or not.

D) In order to remove such liability, they should present the evidence that they have managed the company business carefully as a paid agent to do so.

64. The Company shall be entitled to the right of filing claims by virtue of the above two articles, and if the Company didn’t exercise this right, then each shareholder shall have the right to file claim on its behalf in proportion to its interest in the Company.

65.          

A) Clearance issued by the General Assembly shall not be considered unless preceded by the annual financial statements of the Company and the announcement of the Auditor's report.

B) This clearance shall comprise only the administrative issues brought to the Company's knowledge.

66.          

A) The liability shall be either personal; entrusted in one member of the Board or joint; entrusted in two or more or all of them.

B)  Allocation of the final liability to the officials shall be in proportion to the share of each of them in the mistake made.

67.  The claim for liability shall fade with the five-year passing of time (i.e. by passing of five years as from the date of the General Assembly meeting in which the Board has presented a statement of its works).

68. The Chairman and members of Board shall receive their annual remunerations through a decision to be made by the board of directors whereas the total amount of remunerations shall not exceed 10% of profits ready to be distributed among the shareholders.

69.          

A) The Board shall be convened via a written invitation from the Chairman of the Board or his/her deputy or upon request of at least quarter of its members.

B) More than half of the Board members must attend to render its decisions legal.

C) The Board shall hold its meetings once every two months at least or whenever the interest of the Company requires the same and it shall be held in the headquarter of the Company, and such meeting may be held in a place otherwise the headquarter of the Company outside the Country; provided that the number of meetings shall not be less than six meetings per fiscal year.

70. Chairman of the Board shall chair all the meetings of the Board, and in the event of his/her absence, the Vice-Chairman shall
represent him/her. In the event of both absence, the attendees shall select a chairman from them to preside that meeting.

71. The Board may form a committee or more of its members and grant it some of its powers or assign it to control the progress of work in the Company and to implement the decisions of the Board; provided that it shall comprise some Board members or Company's employees besides the General Manger. These committees shall be abided by the powers conferred thereon, as well as to the regulations, restrictions and instructions imposed thereon by the Board.

72. Board decisions shall be made by the majority of members attending in the meeting, and in the event of equal votes, the vote of the Chairman or his/her representative shall be casting.

73. No voting shall be made by proxy or correspondence in the Board meetings.

74.          

A) The deliberations, decisions and meetings of the Board shall be recorded in minutes of sessions, and shall be enrolled in the Special Register of the Company. The names of the attending members, names of the Committees’ members and all the decisions made by the Board and its committees shall be recorded in such minutes.

B) All the minutes of meetings shall be signed by the Chairman and Board members whom they attended such meetings.

C) Every copy of a minute of a meeting of the Board and its committees that bears the signature of the Chairman shall be deemed a proof and evidence of what have been recorded therein.

D) The Chairman shall maintain the seal of the Company in a safe place, and the share certificates of the Company and any other documents shall be sealed thereby pursuant to a Board decision; provided that the Chairman and any Board member shall sign these certificates or documents.  

75. The Board of the Company shall specify the rights of signing on the Company's behalf in various financial matters, and shall issue its decisions in this regard and notify the related parties in a timely manner while the administrative matters shall be of the General Manager.

76.          

A) The General Assembly shall dismiss the Chairman or one of its members by an extraordinary decision based at the proposal of the Board under a decision to be made by the two-thirds majority of its members or based on a request signed by shareholders who possess at least 51% of the Company's shares, and after hearing the sayings of the member whose dismissal is requested. A copy of the dismissal decision shall be sent to the Registrar of Companies.

B) If the request for dismissal was submitted to the Board two months or more prior to the date of the ordinary General Assembly meeting, the Board must send an invitation to hold the General Assembly within ten days as of the date of receiving the request, and should the Board failed to do the same, the invitation shall be made according or the Companies’ Law.

C)  A poll on the dismissal shall be made by secret voting before voting to approve the Annual Report of the Board and the Auditors' report.

General Assemblies

 

77. Taking into account the provisions of the Companies’ Law, the Company shall hold a general meeting of the Company's members, called the Statutory Meeting, within a period no later than three months from the date of settling the full amount of the Company's capital.

78. The Statutory Meeting shall be presided by the founding Chairman of the Board or one of the founders to be elected in that meeting.

79. The legal quorum of the mentioned Statutory Meeting shall be formed by the presence of subscribers who possess at least half of the number of the subscribed shares, and its decisions shall be taken with the consent of two-thirds of the shares represented in the meeting.

80.          

A)  Founders shall prepare the agenda for the General Assembly of the Statutory Meeting, and in such meeting, they shall submit a report which includes the sufficient and adequate information on all the incorporation processes, besides the supporting documents, and then, the following issues shall be perused:

1-   Approving the declaration of the Company’s incorporation.

2-   Approving the appointment of the board of directors.

3-   Appointment of the Company's auditors.

B)The following founding members shall be deemed the Foundation board members:

1)

NIZAR ABDELRAHIM MONIB JARADNA

Chairman

2)

HAIDAR ISSA MURAD & SONS CO.

Represented by Mr. Haidar Issa Murad

Member

3)

ADEL ADIB YOUSEF HIJJAWI

Member

4)

MOHAMMAD SAMEH RAFIQ QAMHAWI

Member

5)

NABIL YOUSEF AHMAD BARAKAT

Member

6)

RIYAD FAHMI ABDALLAH ALSAIFI

Member

7)

WALID NAJIB MUSTAFA ALAHMAD

Member

 

81. The General Assembly shall hold its meeting once every year at least by virtue of a written invitation from the Board in the place and time specified by the Board, and within a period no later that fifteen months as of the date of holding the previous meeting or within the four months following the end of the fiscal year of the Company, it also may be convened in the conditions stipulated in the Companies’ Law.

82. The General Assembly shall hold an extraordinary meeting at direct invitation from the Board of directors or upon a written request to the Board submitted by shareholders who possess quarter of the Company's shares at minimum, or by a written request submitted by the Auditor at the request of shareholders who possess at least 15% of the Company's shares who shall convince the auditors with such reasons. In the latter two cases, the Board shall convene the General Assembly for meeting within a period no later than fifteen days as of the date of receiving the request.

83.  Any shareholder who has paid all his/her installments or interests to the Company prior to the date of the General Assembly meeting by at least three days shall have the right to participate in the discussions of the General Assembly.

84. Any shareholder or related person may peruse the Shareholders’ Register, and if the official of the Company has rejected such request, the Registrar of Companies may ask the Company to immediately allow him/her to peruse it, and if the Company has persisted on its rejection, the competent court shall judge thereto.  

85. Each shareholder shall be entitled to a number of votes that is equal to the number of his/her shares.

86. Either shareholder may be assigned to attend the General Assembly meetings, knowingly that the right to attend the General Assembly meetings shall be entitled to shareholders who hold at least one hundred shares in personal or by proxy.

87. Each shareholder may participate in the General Assembly meeting either in person or by proxy according to these shares, and if more than one person attend the meeting in person or by proxy, the person whose name is mentioned in the shareholders’ register before the names of his/her partners shall have the right to vote solely accordingly. In the event of multiple guardians or trustees on the estate of a deceased shareholder, they shall be deemed jointly shareholders.

88. The proxy shall be written or according to the following format or in any other form to be determined by the Board with the consent of the Registrar of Companies.

I_______________ from____________ in my capacity as a shareholder in Quds Bank, Public Limited Shareholding Company, has appointed Mr.________________________ from the city of _____________ to be as my proxy in attending and voting in my name at the Annual Meeting or the meeting which had been deferred from this meeting.

Executed and signed in the presence of the below signed witnesses on this day _______ corresponding to __/__/____.

 

Witness                                  Witness                                  Principal

89. The General Assembly shall be invited to any General Meeting prior to its date with a period not less than fifteen days as of the date of receiving the invitation. In the Invitation Announcement, the place, date and time of the meeting and issues that to be discussed shall be stated, and it shall be sent via a special letter by mail to address of the shareholder registered at the Company. The invitation shall also be announced in two local daily newspapers at least one week prior to the date of the meeting. In the first case, non-receipt of any shareholder to its invitation shall not render null any procedures approved in the General Assembly meeting. In the same manner, the omission of sending the invitation to one of the shareholders for the meeting shall not be deemed a justification for nullifying any decision issued in this meeting. The announcement of the General Assembly meeting in two local daily newspapers shall be deemed adequate for rendering the invitation legal.

90. The first ordinary and extraordinary General Assembly meeting shall not be deemed legal unless having the legal quorum of shareholders representing at least 50% of the Company's shares. In the event of holding a meeting for winding-up or liquidating the Company, the representation may not be less than three-quarters of the Company's shares while it is allowed to hold the meeting of the Company’s general assembly via video conference.

91. If the legal quorum is not realized within one hour in the time specified for holding the ordinary general assembly meeting, it shall be postponed by a second invitation to such day and time of the next week. In this case, the legal quorum shall be deemed
completed whatever is the number of shareholders who attended the meeting. If the legal quorum wasn’t realized in the first extraordinary General Assembly meeting, at least 40% of the Company's shareholders must be represented in the second meeting to render the quorum legal, and if the legal quorum for this session wasn’t realized, the meeting shall be cancelled whatever its reasons are.

92.  Powers of the ordinary General Assembly in its meeting include approving all what is in the interest of the Company. The following matters shall be entered into the agenda of its annual meeting:

- Hearing the board of directors’ report;

- Hearing and perusing the report of Company's auditor about its position, accounts and financial statements.

- Discussing and approving the accounts and financial statements of the Company.

- Electing Board members.

- Electing auditors for the Company fiscal year.

-Identifying profits that shall be distributed at the proposal of the Board.

- Perusing and discussing the proposals of borrowing, pledging and giving guarantees as required by its regulation, and to take decisions thereto.

93.  The ordinary and extraordinary General Assembly meeting shall be presided by the Chairman of the Board, his/her deputy or whoever is assigned by the Board, and the Chairman shall appoint clerk for the meeting.

94. The discussions within the annual General Assembly meeting or any extraordinary meeting shall be limited to items stated in the agenda.

95. The Chairman of the Board may postpone the legally held General Assembly meeting from one time to another and from place to another, as well as to postpone the meeting at a request from the General Assembly, provided that the General Assembly shall not decide in the postponed meeting otherwise on the announced agenda.

96. Decision shall be taken in the ordinary General Assembly meetings by the majority of represented shares' votes (in the manner specified by the Chairman of the meeting). While in elections or dismissal from Board membership, the poll shall be confidential.

97.          

A) In extraordinary General Assembly meetings, the decisions shall be taken with the presence of the majority of shareholders representing three-quarters of the company's shares at minimum, and each share in both cases shall have one vote. In addition, decisions shall be passed by the majority of 75% of members entitled to the right of voting in the meeting in the following cases:

A)   Amending the articles or memorandum of association of the Company, provided that the amendment of the provisions of the memorandum of association related to the objectives of the Company shall be coupled with approval of the Court.

B) Merger of the Company in another Company or establishment.

C) Wind-up and liquidate the Company.

D) Dismissal of a member or the Chairman of the Board.

E) Shift the headquarter of the Company.

B) Issues and matters mentioned in clause (A) of this Article shall not be perused unless expressly mentioned in the full text of the invitation addressed to the shareholders.

C) Should the agenda of the extraordinary General Assembly meeting included the issue of amending the memorandum and articles of association of the Company, the proposed amendments
must be attached with the invitation, so that the shareholders may peruse them prior to the meeting.

98.          

A) The extraordinary General Assembly meeting shall have the right to take decisions about the internal matters within its authorities and the internal matters within the authorities of the ordinary General Assembly meetings.

B)  If the extraordinary General Assembly has perused the internal matters within the authorities of the ordinary General Assembly meetings, it shall take its decisions regarding these matters with the absolute majority of shares represented in the meeting like the ordinary General Assembly.

99.          

A) An attendance schedule shall be prepared when the General Assembly is convened, in which the names of the attending General Assembly members and number of votes held by each of them in person and by proxy shall be recorded. This schedule shall be signed by them and shall be kept at the Company.

B) Each shareholders shall be given a card for entering the meeting in which the number of votes he/she holds shall be mentioned.

C) The Company's Board shall form a committee for regulating the process of registering the names of the shareholders who attend the General Assembly meeting and specify the shares represented by them in person or by proxy, and to achieve this purpose, such committee may call any of the Company's relevant staff  to provide the necessary needs. The officials in Company have to provide all the required facilities for them.

D) The committee shall assume the distribution of attendance invitations of the General Assembly meeting. These cards shall be sealed by the Company’s official seal and signed by either the Committee's representative or his/her deputy, knowingly that only card holders shall have the right to attend the meeting,

100.       

A) The Chairman of the General Assembly shall appoint a clerk from the shareholders or others for recording the particulars of the meeting, and he/she shall select controllers for collecting and sorting votes.

B) The Board shall invite the Registrar of Companies or his/her  representative to attend the General Assembly meetings.

C) The concerned committee shall assume the process of collecting and sorting votes, as well as announcing the results of Board election.

D) The Board shall notify the Registrar of Companies with all decisions that have been taken by the General Assembly within fifteen days as of the date of being decided. 

E) A minute of meeting shall be prepared with the particulars, perusals and decisions of the meeting and it shall be signed by the Chairman and the clerk.

101. Copies of the minute signed by the Chairman may be delivered to the shareholders.

102.       

A) Decisions taken by the General Assembly that commenced its meeting under a legal quorum shall be binding by virtue of the provisions of Law to the Board and all shareholders, either they were attending or absent.

B) No objection may be made to the decisions of the General Assembly except in compliance with the Law.

C) The objection shall not suspend the implementation of decisions unless having a judgment to nullify the same. 

D)  In any case, it is prohibited to hear any lawsuit of nullifying any decision that has been taken by the general assembly after one year of being resolved.

103. The General Assembly decisions to change the Memorandum and Articles of Association and the by-laws of the Company shall be subject to approval and registration procedures as per Law.  Decisions of the General Assembly for winding-up or merging the Company with another company shall also be subject to the same procedures, but shall to comply with the liquidation procedures provided in the Companies’ Law. In the event of merger, the two merged companies shall be registered again in one Company with new legal personality.

Fiscal Year and Accounts

104.  The Fiscal Year of the Company shall begin on 1st of January in each year, and shall end by the 31st of December of the same year. The Current Fiscal Year shall begin as of the date of Company's registration and shall end on 31st December of the same year of registration.

105. The Board shall open organized accounts, indicated therein the revenues and expenses of the Company, as well as indicating the sources of these revenues and its aspects of being expensed. These accounts shall comprise the assets, debts and liabilities of the Company.

106.       

A)The Board may peruse the accounts of the Company, and no one else shall have the right to peruse these accounts except under this Regulation and in accordance with the provisions of Companies' Law.

B) Company's records or books shall be deemed as initial evidence on matters authorized by law to be recorded therein.

107. At the end of each Fiscal Year, the Board shall prepare the rights and liabilities of the Company, and setting up the closing accounts  that to be signed by the Board.

108. Copies of the profits and losses accounts statement, balance sheet and the Board's and Auditors' reports shall be delivered to all shareholders of the Company who are entitled to participate in the General Assembly meetings together with the invitation announcement.

Accounts Auditing

Accounts of the Company shall be audited once every year at least to assure its balance sheet and the profits and losses statement. The General Assembly shall elect Auditors and determine their fees in its Annual General meeting.

In order to achieve the same, those Auditors shall have the right to peruse all records and documents of the Company and to ask the Board and all employees of the Company to provide them with the required information for undertaking auditing tasks.

109.       

A) If the Auditors have found violations to Law or the Company's Regulation, they must notify the Chairman of the Board with the same in writing.

B) In serious cases, they must raise the matter to the General Assembly.

C) If the Auditor's report wasn’t submitted or approved in the General Assembly meeting, then the decision of such General Assembly to approve the accounts and distributing dividends shall be considered null and void.

110.       

A) If the Chairman of the Board has neglected inviting the General Assembly for a meeting in the dates determined in the Company's Regulation or in the Companies’ Law, the Auditors must request from him/her to convene it.

B) They shall solely have the right to request from him/her to convene the General Assembly at any time if they deemed so appropriate.

C) The Auditors shall prepare these reports either unanimously or by majority, and the opponent shall submit his/her disagreement in a separate report.

111.       

A) Auditors shall be responsible for mistakes made in their work.

B) Claim for liability shall fade with the passing of time after five years from the date on which the General Assembly convened and perused their report.

112. Auditors shall not disclose individually or to third parties information they have perused while undertaking their job; if so happens, they shall be subject to dismissal and claim for compensation.

113. The General Assembly may re-elect the Auditors after the end of their term and may also suspend them from work if they violated the provisions of this Regulation or such matter to be referred to the General Assembly.

114. If the General Assembly neglected the appointment of the Auditor or if the Auditor apologized for or refrain to work, the Board shall nominate three names to pick one of them for the vacancy.

Distribution of Profits

115. The dividends may be distributed over the shareholders in the time and place specified by the Board

116. The net profits of the Company shall be distributed after deducting all general expenses and other costs as per the following:- 

· Every year, 10% of net profits shall be deducted to the Statutory Reserve Account, and such deductions shall not be suspended prior to have the total of accumulated amounts to this account quarter of the capital of the Company, and this rate may be increased by a decision of the Board till deductions reach an amount that is equal to the capital of the Company and then it shall be suspended.

· No more than 10% of profits prepared to be distributed over the shareholders shall be allocated as remunerations for chairman and Board members by a decision of the bank board of directors. 

1- The General Assembly may, at the proposal of the Board, deduct a part of the net profits under the name of Voluntary Reserve, provided that the annual amount shall not exceed 20% of the net profit of that year and the total deducted amounts under the name of Voluntary Reserve shall not exceed half of the Company's capital.

2- The remaining profits shall be distributed to the shareholders in proportion to their shares and in the form determined by the General Assembly based on the recommendation of the Board.

3-  No dividends shall be distributed except after deducting the Statutory Reserve

117. The Voluntary Reserve shall be used in purposes determined by the Board, and if not used, the Board may return them to the shareholders in the form of dividends.

118. Board Directors and auditors shall be responsible for deducting the amounts allocated for the Voluntary Reserve, other reserves and depreciation according to the rates provided in the Company's Regulation or technically accepted and well-known.

Announcements & Notices

119. The Company shall send announcements, notices and notifications to each member either by delivering the same in person or sending them by registered mail to his/her registered address or the address given thereto if he/she has no registered address for sending its notices and announcement. Once the notice, announcement or notification is being sent by mail, it shall be deemed to be delivered, if the letter that includes the announcement or notice is addressed and stamped with the required stamps and put in the post, and shall be deemed to be delivered on the date it can be duly delivered on according to the process of regular mail unless stated otherwise.

120. If a member of the Company has no registered address for notices, announcements and notifications, then sending the announcement and notice to his/her address and publishing the same in an newspaper that is issued near the Company registered headquarter shall be considered sufficient notification for him/her on the day in which the announcement or notice being published.

121. The Company may notify its announcements and notices to whom they hold share of its shares by sending the announcement or notice to the person whose name is provided in its register for such share.  

122. The Company may notify its announcements, notices and notifications to those who became entitled to any rights in its shares as a result of the death or bankruptcy of a member by sending them through registered mail under a letter that bears all the required mail stamps and entitled with their name or capacity as representatives of the deceased, attorneys of the bankrupt or in any other capacity to the local address given by those persons claiming rights in shares, if such address exist, or notifying the announcements or notices in any manner that the member may be notified with if the shareholder wasn’t deceased or announced its bankruptcy, till he/she gives a local address to be notified thereupon. 

123. Invitations for attending meetings via the above method shall be sent to:

1- Every member in the Company, including holders of shares certificates.

2- Whoever is entitled to any right in the shares of the Company as a result of the death of a member of its members or his bankruptcy, who is except for his/her death would have received the meeting invitation.

3- No one else shall have the right to receive the invitation for attending the General Assembly meeting.

Maintaining Secrets and Confidentiality

124.  Board members, directors, auditors, committees’ members, staff and employees at the Company shall maintain the secrets and information of the company and the transactions of the Company with its clients, and shall be restricted to not disclosing anything that comes to their knowledge while exercising their duties, except in the cases specified by the Board in any meeting of the Company or at any request from any court, provided that the same shall be as so far as to the provisions of these regulations.

General Terms

125. The provisions of this Regulation shall be considered to the extent not contradicting with the provisions of the Companies’ Law, and in the cases in which no provision was provided in this Regulation, then the provisions and regulations of the Companies’ Law of year 1929 as amended shall be applied.

We, the undersigned, as the founders of Quds Bank, limited shareholding company, do hereby certify, by affixing our signatures, these Internal Regulation and By-laws of the Company.

Founding Members

 

#

Shareholder's Name

No. of

Shares

Value in

US $

1.

NIZAR ABDELRAHIM MONIB JARADNA

1,000,000

1,000,000

2.

HAIDAR ISSA MURAD & SONS CO.

300,000

      300,000

3.

JORDAN INVESTMENT & FINANCE BANK

1,500,000

1,500,000

4.

ADEL ADIB YOUSEF HIJJAWI

1,000,000

1,000,000

5.

MOHAMMAD SAMEH RAFIQ QAMHAWI

1,000,000

1,000,000

6.

NABIL YOUSEF AHMAD BARAKAT

1,000,000

1,000,000

7

MOHAMMAD ISSA MURAD MURAD

150,000

150,000

8.

AMMAN CAIRO BANK

1,000,000

1,000,000

9.

ZAHER MOHAMMAD SULEIMAN JARADNA

100,000

100,000

10.

WALID NAJIB MUSTAFA ALAHMAD

50,000

50,000

11.

AHMAD ISSA MURAD & CO

150,000

150,000

12.

RA'OUF MOHAMMAD SALIM SHADEED

100,000

100,000

13.

FU'AD FARHAN SALIM ABU HAMDAN

100,000

100,000

14.

ANTONE KHALIL MIQBEL DABABNEH

200,000

200,000

15.

SAMI FARAH HANNA HALABI

200,000

200,000

16.

SALIM SABBAGH SONS CO.

200,000

200,000

17.

RIYAD FAHMI ABDALLAH ALSAIFI

70,000

70,000

18.

MOHAMMAD MORTADI SAID YA'EESH

100,000

100,000

19.

MASHHOUR HADITHA MOHAMMAD ALJAZI

50,000

50,000

20.

IBRAHIM ABDELHAMID MOHAMMAD ABU AYYASH

25,000

25,000

 

Total

8,295,000

8,295,000