Articles of Association

The interest association of legal entities named Emergency Oil Stock Agency (hereinafter referred to as “Agency”) is incorporated pursuant to Act No. 218/2013 Coll. on emergency stocks of oil and petroleum products and on dealing with state of oil emergency, and on amendment and supplement of some acts (hereinafter referred to as “Act”); and pursuant to the Foundation agreement dated 12 September 2013.

1 Basic Provisions

1.1 Name of the interest association of legal entities is: Agentúra pre núdzové zásoby ropy a ropných výrobkov.

1.2 The translation of the interest association of legal entities into English is: Emergency Oil Stocks Agency.

1.3 Abbreviated form of the name of the interest association of legal entities is: EOSA.

1.4 The Agency is the interest association of legal entities incorporated pursuant to Articles 20f to 20j of Civil Code. The Agency is a legal entity.

1.5 The registered office of the Agency is Trnavská cesta 100, 821 01 Bratislava, Slovak Republic.

1.6 The Agency is incorporated on the basis of the Act in order to procure and maintain emergency stocks to be used in state of oil emergency and to meet international obligations binding for the Slovak Republic.

1.7 The Agency is incorporated for indefinite period of time.

2 Scope of Activity

2.1 The scope of activity of the Agency is:

(i) to ensure procurement and maintenance of emergency stocks;

(ii) emergency stocks storage;

(iii) emergency stock handling; and

(iv) emergency stock release.

2.2 The Agency performs activities specified in clause 2.1 pursuant to the Act. For purposes of these Articles of Association, the term of emergency stocks and other terms defined in the Act shall have the same meaning as stipulated by the Act.

2.3 The Agency shall procure emergency stocks for selected entrepreneurs pursuant to the Act and within the extent corresponding to the minimum emergency stock limit in total as specified by the Administration of State Material Reserves of the Slovak Republic (hereinafter referred to as “Reserve Administration”) pursuant to the Act. The costs necessary to procure and maintain emergency stocks are funded by the Agency from the price paid by selected entrepreneurs on the basis of the Contract on procuring the Maintenance of Emergency Stocks and from external funding. The price for procuring the maintenance of emergency stocks shall cover the costs of procurement, insurance, storage, protection or other ensuring of emergency stock quality parameters, costs of Agency funding, costs of Agency incorporation and establishment and administrative costs of the Agency.

3 Membership in the Agency

3.1 Founder members of the Agency are Spoločnosť pre skladovanie, a.s., a company incorporated under the laws of the Slovak Republic, having its registered office at 461, 919 33 Trakovice, Slovak Republic, Company Ident. No. (IČO): 47 400 781, registered at the Companies Register of the District Court Trnava, Section: Sa, File No.: 10607/T (hereinafter referred to as “Founder 1”), Bennet Oil s.r.o., a company incorporated and existing under the laws of the Slovak Republic, having its registered office at Dvořákovo nábrežie 8, 811 02 Bratislava, Slovak Republic, Company Ident. No. (IČO): 36 707 279, registered at the Companies Register of the District Court Bratislava I, Section: Sro, File No.: 43431/B (hereinafter referred to as “Founder 2”), OMV Slovensko, s.r.o., a company incorporated and existing under the laws of the Slovak Republic, having its registered office at Einsteinova 25, 851 01 Bratislava, Slovak Republic, Company Ident. No. (IČO): 00 604 381, registered at the Companies Register of the District Court Bratislava I, Section: Sro, File No.: 777/B (hereinafter referred to as “Founder 3”), PROGRESS TRADING, a.s., a company incorporated and existing under the laws of the Slovak Republic, having its registered office at Cukrovarská 22, 075 01 Trebišov, Slovak Republic, Company Ident. No. (IČO): 31 679 765, registered at the Companies Register of the District Court Košice I, Section: Sa, File No.: 1333/V (hereinafter referred to as “Founder 4”) and SLOVNAFT, a.s. a company incorporated and existing under the laws of the Slovak Republic, having its registered office at Vlčie hrdlo 1, 824 12 Bratislava, Slovak Republic, Company Ident. No. (IČO): 31 322 832, registered at the Companies Register of the District Court Bratislava I, Section: Sa, File No.: 426/B (hereinafter referred to as “Founder 5”). Founder members of the Agency agree with the subject-matter of the activity of the Agency.

3.2 Any selected entrepreneur who obliged to procure the maintenance of the emergency stocks pursuant to the Art. 3 of Act may become a member of the Agency.

3.3 The decision on the acceptance of a member shall be made by the members’ meeting of the Agency on the basis of the application form of the selected entrepreneur addressed to the board of directors of the Agency. The application form shall contain a written consent of the applicant for membership with the Articles of Association of the Agency. An applicant for membership must not have any tax arrears or health and social insurance arrears or superannuation arrears or other arrears, including arrears towards the Agency, which it demonstrates by attachment of relevant confirmations and an affidavit to the application form for membership.

3.4 The membership in the Agency shall commence as on the day of entry in the list of Agency’s members kept by the board of directors of the Agency.

3.5 Membership in the Agency shall cease to exist:

3.5.1 on the day when the board of directors approves the application of the Agency member for withdrawal from the Agency and the application of the Agency member for withdrawal may not be unreasonably refused by the board of directors;

3.5.2 on the day when members’ meeting makes a decision on the exclusion of the member from the Agency based on the proposal of the board of directors due to (i) breaching the Articles of Association or (ii) acting against the interests of the Agency, or (iii) if the member that was a selected entrepreneur by law ceases to qualify for a selected entrepreneur pursuant to the Act and the conditions for qualification fail to be met not less than twelve consecutive calendar months;

3.5.3 due to a dissolution of the Agency member under 6.4(ii) as a legal entity without any legal successor that would be or become a selected entrepreneur pursuant to the Act;

3.5.4 dissolution of the Agency.

3.6 Membership in the Agency shall be automatically transferred to a legal successor of the Agency member, if the legal successor becomes a selected entrepreneur pursuant to the Act. Number of votes of the legal successor of the Agency member shall be determined in accordance with 6.5 hereof.

3.7 The board of directors may decide to temporarily suspend the membership in the Agency due to reasons under 3.5.2. In that case, the board of directors may convene the members’ meeting and propose the exclusion of the member from the Agency due to a reason under 3.5.2. The suspension of the membership in the Agency shall result in the member of the Agency forfeiting their entitlement to exercise their rights hereunder for the period specified in the decision on the suspension of the Agency membership. The board of directors shall decide on the renewal of the suspended membership in the Agency if the concerned member proves that reasons for the suspension of the membership cease to exist.

3.8 The breach of the member’s duty to ensure the maintenance of emergency stocks pursuant to the Act on the basis of the Contract on procuring the maintenance of emergency stocks concluded with the Agency (hereinafter referred to as “Agreement on ES”), breach of the duty to pay the price in accordance with the Agreement on ES, or the breach of information duties of the member towards the Agency pursuant to the Act shall be deemed acting against the interests of the Agency.

4 Rights and Duties of Agency Members

4.1 Rights and duties of the Agency member shall be performed by the Agency member in person or on behalf of the Agency member on the basis of the written authorization.

4.2 The Agency member shall be entitled to:

(i) participate in the members’ meeting;

(ii) submit proposals and vote at members’ meeting;

(iii) propose candidates to bodies and positions voted at members’ meeting;

(iv) notify the board of directors of the Agency of drawbacks in Agency activity and suggest ideas for drawback correction;

(v) request the explanation from the board of directors of the Agency on matters related to the subject-matter of the members’ meeting discussion. The board of directors shall be obliged to provide explanations related to the subject-matter of the members’ meeting discussion to every member. If the board of directors is unable to provide the explanation to the member at the members’ meeting, the board of directors shall be obliged to provide the explanation to the member in writing not later than 30 days following the date of the members’ meeting. The written information shall be sent by the board of directors to the member’s address specified by the member; otherwise it will be provided at the place of registered office of the Agency. In their written explanation or in the response directly at the members’ meeting, the board of directors may refer the member to the Agency web site on condition that the response to the member’s request is contained therein. The explanation may be refused to be provided if the same breached the Act or if the careful consideration of the content of the explanation results in the finding that provision of the explanation could harm the Agency or its member; or if the explanation may not be provided without disclosing the information specified under 4.3(v).

4.3 The Agency member shall not be entitled to:

(i) the share in Agency’s profit;

(ii) compensatory share in case of Agency membership cessation or any other performance due to Agency membership cessation under 3.5.1 to 3.5.4;

(iii) share in liquidation balance in case of Agency dissolution with liquidation;

(iv) the information which is subject to classified information pursuant to Act No. 215/2004 Coll. on Classified Information Protection and on amendment and supplement of certain acts; or the information which is the subject-matter of the bank or tax secret;

(v) information related to other Agency member or other selected entrepreneur to the extent this information is not publicly accessible. The Agency member shall not be provided any information

(a) obtained by the Agency from the financial directorate,

(b) which could be used to derive volume of selected petroleum products for respective categories of selected petroleum products or in whole (except for information on the number of votes of the member); which other Agency member or other selected entrepreneur (i) released for consumption within the territory of the Slovak Republic pursuant to a special legal act; (ii) transported to the territory of the Slovak Republic beyond suspension of excise tax for business purposes; (iii) imported to the territory of the Slovak Republic from third-countries, (iv) released for consumption, transport or import of the same to the territory of the Slovak Republic for business purposes using other methods than those specified under (i) to (iii) (paragraphs (i) to (iv) (hereinafter referred to as “Imported”),

(c) which could be used to derive volume of selected petroleum products for respective categories of selected petroleum products or in whole (except for information on the number of votes of the member) for which the tax was returned in accordance with the special regulation

(hereinafter referred to as “sensitive information”).

4.4 The Agency member shall be obliged especially to:

(i) observe the Articles of Association of the Agency, its internal regulations, actively participate and facilitate the fulfilment of tasks and objectives of the Agency;

(ii) fulfil resolutions of the Agency bodies;

(iii) observe general principles of the entrepreneurial and professional ethics;

(iv) inform the general director of the Agency on the change of the business name or registered office.

5 Bodies of the Agency

5.1 Bodies of the Agency are:

(i) members’ meeting;

(ii) board of directors;

(iii) supervisory board, and

(iv) general director.

5.2 If necessary, the agency may establish its working committee and working groups. The decision on establishment of working committees and working groups, their members, objectives and tasks shall be made by the board of directors of the Agency.

6 Members’ Meeting

6.1 Members’ meeting is the highest body of the Agency and it consists of all members of the Agency.

6.2 Members’ meeting shall be convened by the board of directors of the Agency as needed and not less than once a year. Members’ meeting shall be convened by means of a written invitation sent to every member to the address of their registered offices. The invitation to the members’ meeting shall contain the following information as minimum:

6.2.1 place, date and exact time of the members’ meeting; and

6.2.2 members’ meeting agenda.

6.3 The members shall participate in the members’ meeting in person or represented on the basis of the written authorization.

6.4 The number of votes of the Agency members shall always be determined for purposes of the particular members’ meeting and it is counted differently

(i) for the Founder 1 or other entity in which the Founder 1 has ownership interest, and

(ii) for members that are selected entrepreneurs pursuant to the Act at the same time.

6.5 Every member under 6.4(ii) shall have one vote with one vote added for every full ton (or for each one thousand litres, if applicable) of selected petroleum products which the member imported to the territory of the Slovak Republic for the last completed calendar year.

6.6 The total number of votes allocated to all members under 6.4(ii) represents 30% of all votes of all Agency members in total and on the basis of these votes 100% of votes of all Agency members shall be calculated.

6.7 The number of votes of Agency members under 6.4(i) shall be calculated as 70% of all votes of all Agency members and rounded up to a whole number.

6.8 The board of directors of the Agency shall keep the list of Agency members and updates the number of votes of every member on an annual basis (following the receipt of necessary data for the calendar year). Every member may request the board of directors at any time to confirm the current number of member’s votes. The board of directors shall send the information on current number of votes of the concerned member to every member together with the invitation to the members’ meeting.

6.9 The Agency member or members with at least 5% of votes of all members in total may request the board of directors to convene the members’ meeting.

6.10 Members’ meeting shall have a quorum if the following members are present:

(i) members that belong to a group under 6.4(i); and

(ii) members that belong to the group under 6.4(ii) and that hold absolute majority of votes in this group of members at the same time.

6.11 If the members’ meeting fails to have a quorum, the board of directors or the chairman of the board of directors shall convene a replacement members’ meeting to take place not later than 15 days following the day of the replaced members’ meeting. The board of directors or the chairman of the board of directors on his/her own shall send the written invitation to the replacement members’ meeting to the address of the registered office of every member. If the members’ meeting under 6.10 fails to have a quorum due to:

(i) a failure of members of the group under 6.4(ii) to participate, the replacement members’ meeting shall have a quorum if absolute majority of votes of all Agency members is present;

(ii) a failure of members of the group under 6.4(i), to participate, the replacement members’ meeting shall have a quorum if the condition of the quorum under 6.10 is met.

6.12 If the replacement members’ meeting convened under 6.11 fails to have a quorum for any reason, the board of directors or the chairman of the board of directors shall convene another replacement members’ meeting under 6.11 in order they always take place not later than 15 days following the day of the previous members’ meeting which fails to have a quorum. The rules of having quorum in accordance with the sentence 6.11 shall apply for every following replacement members’ meeting convened under this clause 6.12.

6.13 Members’ meeting shall decide on the basis of the absolute majority of votes of participating members, unless stipulated otherwise by this Articles of Association.

7 Members’ Meeting Scope of Powers

7.1 The members’ meeting shall:

(i) elect and dismiss members of the board of directors, members of the supervisory board, and the general director;

(ii) make a decision based on the proposal of the board of directors on exclusion of the member from the Agency under 3.5.2;

(iii) appoint the auditor of the financial statements based on the proposal of the board of directors;

(iv) approve the next year’s budget based on the proposal of the board of directors;

(v) approve the annual report, the financial statements for the year and extraordinary financial statements, and the use of the positive economic result;

(vi) approve the price and any change in the price for procuring the maintenance of emergency stocks in accordance with the management policies described in 14.

(vii) approve criteria for selection of the recognized stock keeper;

(viii) approve any change in the Foundation Agreement of Association and Articles of Association;

(ix) decide on the proposal of the board of directors to wind-up the Agency with or without the liquidation;

(x) approve the next year’s activity plan of the Agency on the basis of the proposal of the board of directors; take account of the report on the activity of the Agency bodies for the previous year and the report on the assets of the Agency;

(xi) on the basis of the proposal of the board of directors decide the matters pursuant to clause 8.7; and

(xii) on the basis of the proposal of the board of directors decides about the acceptance of selected entrepreneur for a member of the Agency pursuant to paragraph 3.3.

7.2 During the decision making of the members’ meeting under 7.1(i), the chairman of the board of directors, one member of the board of directors and two members of the supervisory board shall be elected and dismissed only by members belonging to the group under 6.4(i), and two members of the board of directors and three members of the supervisory board shall be elected and dismissed only by the members in the group under 6.4(ii). A decision to dismiss a particular member of the board of directors or the supervisory board shall be made only by a group of members that decided to appoint the concerned member. It is required that in course of election or dismissal of a member of the board of directors or the supervisory board the members are present with absolute majority of votes of members in the relevant group. A decision within the group shall be accepted if members in the relevant groups voted for this decision with the absolute majority of votes.

7.3 It is not necessary to convene the members’ meeting in course of a decision making under 7.1(i) on electing or dismissal of the members of the board of directors or members of the supervisory board for one group of members. In that case the chairman of the board of directors of the Agency shall convene the meeting of members belonging to a relevant group. The provisions on convening and holding a members’ meeting shall reasonably apply to convening and holding a meeting of the members belonging to the relevant group of members.

7.4 If the decision of the members’ meeting is made under 7.1(ii), 7.1(vi), 7.1(vii), 7.1(viii), 7.1(xii), or 8.7 the decision of the members’ meeting shall be approved by:

(i) all members that belong to a group under 6.4(i), and

(ii) members that belong to the group under 6.4(ii) and that hold absolute majority of votes in this group of members at the same time.

7.5 The change of the Foundation AGreement of Association or the change of the Articles of Association approved at the members’ meeting shall become valid only after it is approved by the government of the Slovak Republic.

8 Board of Directors

8.1 The board of directors is a statutory and executive body of the Agency controlling all activity of the Agency and acting on behalf of the Agency. The board of directors shall decide on all matters of the Agency unless reserved by these Articles of Association or organization order for the scope of powers of the members’ meeting, general director or the supervisory board. The board of directors may stipulate the decision-making on the matters subject to the scope of powers of the general director.

8.2 At least two members of the board of directors with one being a chairman shall always act on behalf of and be entitled to bind the Agency. Signing on behalf of the Agency shall be performed by attaching the signatures of signing persons to the printed or written name of the Agency and names and positions in the board of directors of the Agency.

8.3 The board of directors consists of 4 (four) members and one of them is a chairman. Every member of the board of directors including the chairman shall have one vote. Only the natural person fully capable to enter into legal acts, older than 18 years and without criminal records may be a member of the board of directors. The person lawfully sentenced for an economic crime, crime against property or other wilful crime related to the subject-matter of the activity of the Agency shall not be deemed a person without criminal records unless he/she is considered as if he/she has not been sentenced.

8.4 The meetings of the board of directors shall usually be held once a month. The meetings of the board of directors shall be convened and managed by the chairman. The invitation to the meeting of the board of directors shall be sent to all members of the board of directors not less than three (3) working days prior to the date the meeting will be held by registered mail or courier to the post addresses of all members or to their e-mail addresses; or by fax to the fax numbers provided to the chairman of the board of director for this purpose in writing. The agenda of the meeting and documents necessary for the meeting with reasonable description of respective agenda issues shall be attached to the invitation. The invitation shall contain the date, time, place and agenda of the meeting.

8.5 The minutes shall be taken from every meeting of the board of directors with all crucial facts of the meeting including results of the voting and exact wording of all decisions. The minutes shall be signed by the chairman of the board of directors and if he/she is absent, by all present members of the board of directors. These minutes shall be sent to all members of the board of directors within ten (10) working days following the date of the meeting of the board of directors either by registered mail or courier to the mail addresses of the members or by e-mail to their e-mail addresses, or by fax to the fax numbers provided by the member of the board of directors for these purposes to the chairman of the board of directors.

8.6 The term of office of members of the board of directors shall be 5 (five) years. The member of the board of directors may be re-elected. Should a new member of the board of directors not be elected before the end of the term of the current member of the board of directors, the current member of the board of directors is considered to be elected for the next term.

8.7 The board of directors shall have a quorum if at least two members are present at the meeting unless the higher number of members is required under 9.2. The board of directors shall make decisions based on the absolute majority of votes of present members unless higher number of votes is required under clause 9.2. In case of equality of votes during voting of the board of directors the members’ meeting shall decide the respective matter in accordance with clause 7.4. The provision of the previous sentence does not apply in such case, that the equality of votes occurred during voting of the board of directors about the paragraph 9.1(v), during voting about matters concerning the use of the emergency stocks in the state of oil emergency or concerning the release of the emergency stocks if such release is expected by paragraph 10 of the Act according to the paragraph 9.1(xxii); the board of directors shall is in such case without undue delay be obliged to request the government of the Slovak republic to issue an memorandum to these issues. If the board of directors did not request the government of the Slovak republic to take a memorandum according to the previous sentence within 15 days from the day when the equality of voting occurred according to the previous sentence, any member of the board of directors is entitled to request the government of the Slovak republic to issue such memorandum. The board of directors is bound by memorandum of the government of the Slovak republic according to the fourth and fifth sentence.

8.8 In case of equality of votes during voting of the board of directors on the convening of the members’ meeting or submitting proposal to the members’ meeting, each member of the board of directors shall have the right to convene the members’ meeting or submit proposal to the members’ meeting individually.

9 Scope of Powers of the Board of Directors

9.1 The board of directors shall particularly:

(i) approve the policies for the creation and use of, and keeping of records on the purpose-bound funds in the Agency’s equity ensuring that the use of any positive economic result is limited and the records kept on the usage of the funds are transparent;

(ii) approve the proposal for the funding of primary purchase of emergency stocks and debt service repayment;

(iii) approve, in case the minimum limit of emergency stocks is increased in comparison with the previous calendar year, the proposal for funding the purchase of emergency stocks necessary to comply with the new minimum limit of emergency stocks;

(iv) approve the sale of emergency stocks exceeding 105% of the minimum limit of emergency stocks;

(v) approve the storage of emergency stocks away from the territory of the Slovak Republic if there are no sufficient storage capacities in the territory of the Slovak Republic;

(vi) approve the proposal for exclusion of the member from the Agency submitted to the members’ meeting in accordance with 7.1(ii) as well as the proposal for suspension of rights of the Agency member in accordance with 3.7;

(vii) approve the termination of the Contract on Procuring the Maintenance of Emergency Stocks concluded with the selected entrepreneur as well as approves withdrawal from the Contract on Procuring the Maintenance of Emergency Stocks with selected entrepreneur;

(viii) present for the approval by the member’s meeting the budget for the next year, the annual report, the financial statements for the year, the extraordinary financial statements, and information on the use of the positive economic result;

(ix) present for approval by the member’s meeting the proposal for election or dismissal of the general director of the Agency;

(x) supervise the performance of the scope of powers of the general director;

(xi) present for the approval by the member’s meeting the criteria for selection of the recognized stock keeper;

(xii) present the proposal to the member’s meeting for the appointment of the auditor of financial statements for the year and extraordinary financial statements of the Agency being the renowned international audit company with the office in the Slovak Republic;

(xiii) compile and discuss an interim financial statement and updated estimate of the year’s result within 45 days following the end of every calendar quarter. The interim financial statement shall be compiled in an appropriate format and reasonably detailed and it shall contain a balance sheet, profit and loss statement, overview of equity transactions and Agency cash flow as minimum with the information on the volume, significant changes in the structure and volume of emergency stocks, and information on amounts, conditions and changes related to the Agency debt. As on the date of compilation of the interim financial statement, an updated assumption shall be prepared for the period until the end of the relevant year in an appropriate format and reasonably detailed which shall contain a balance sheet, profit and loss statement, overview of equity transactions and Agency cash flow as minimum with the information on the volume, significant changes in the structure and volume of emergency stocks, and information on amounts, conditions and changes related to the Agency debt.

(xiv) update the assumed result for the year if emergency stocks are released (Art. 10 of the Act) or emergency stocks exceeding 105% of the minimum limit are sold (Art. 11 of the Act) by the Agency;

(xv) present for the approval by the members’ meeting the amount of the price for procuring the maintenance of the emergency stocks in accordance with the price specified under 14;

(xvi) approve the time schedule for restocking the emergency stocks after the release of the same (for the purpose of submitting the time schedule to the Reserves Administration);

(xvii) ensure adequate insurance coverage of emergency stocks; the board of directors can decide that a recognized stock keeper can be asked to ensure an adequate insurance coverage of the emergency stocks pursuant to the Act;

(xviii) approve organization order of the Agency;

(xix) present for the discussion by the members’ meeting and for approval by the government the proposal for winding-up the Agency without liquidation or winding-up the Agency with liquidation;

(xx) inform the supervisory board on the economic result of the Agency for the calendar quarter and on assumed economic result for the calendar year;

(xxi) inform the supervisory board on the economic result of the Agency for the calendar year;

(xxii) decide on issues concerning use of the Emergency stocks in in the state of oil emergency or concerning the release of the oil stocks if such release is expected by paragraph 10 of the Act.

9.2 In case of decision-making under 9.1(vi), the board of directors shall have a quorum if at least three members are present and the board of directors shall make a decision on the given item with the necessary approval of all members present.

9.3 The board of directors shall be responsible for due keeping of the Agency’s books of accounts and meeting the obligations pursuant to Act No. 431/2002 Coll. on Accounting.

9.4 The board of directors shall be obliged to present to the supervisory board at least once a year information on the fundamental plans concerning the management of the Agency in the next period and the expected development of the emergency stocks and funding and, on demand and within the period set by the supervisory board, a written report comparing the state of the emergency stocks and funding with the expected development. The board of director shall also be obliged to inform the supervisory board forthwith on all facts which may change the activity or funding of the Agency in a fundamental manner. If requested by the supervisory board or members of the supervisory board, the members of the board of directors shall be obliged to participate in the supervisory board meeting and provide additional information to the members of the supervisory board meeting with the requested extent.

10 Supervisory Board

10.1 The supervisory board shall be an auditing body of the Agency reporting their activity to the members’ meeting.

10.2 The supervisory board consists of 5 (five) members and one of them is a chairman. The chairman of the supervisory board is elected by the members of the supervisory board. Only the natural person fully capable to enter into legal acts, older than 18 and without criminal records may be a member of the supervisory board. The person lawfully sentenced for an economic crime, crime against property or other wilful crime related to the subject-matter of the activity of the Agency shall not be deemed a person without criminal records unless he/she is considered as if he/she has not been sentenced.

10.3 The supervisory board shall meet not less than once a year. The meeting of the supervisory board shall be convened and managed by the chairman. The membership in the supervisory board shall be incompatible with the membership in the board of directors of the Agency. The invitation to the meeting of the supervisory board shall be sent to all members of the supervisory board not less than three (3) working days prior to the date the meeting will be held, by registered mail or courier to the post addresses of all members or to their e-mail addresses; or by fax to the fax numbers provided to the chairman of the supervisory board for this purpose in writing by the member of the supervisory board. The agenda of the meeting of the supervisory board and documents necessary for the meeting with reasonable description of respective agenda issues shall be attached to the invitation. The invitation shall contain the date, time, place and agenda of the meeting.

10.4 The minutes shall be taken from every meeting of the supervisory board with all crucial facts of the meeting including results of the voting and exact wording of all decisions. The minutes shall be signed by the chairman of the supervisory board and if he/she is absent, by all present members of the supervisory board. These minutes shall be sent to all members of the supervisory board within ten (10) working days following the date of the meeting of the supervisory board either by registered mail or courier to the mail addresses of the members or by e-mail to their e-mail addresses, or by fax to the fax numbers provided by the member of the supervisory board to the chairman of the supervisory board for these purposes.

10.5 The term of office of members of the supervisory board shall be 5 (five) years. The member of the supervisory board may be re-elected. Should a new member of the supervisory board not be elected before the end of the term of the current member of the supervisory board, the current member of the supervisory board is considered to be elected for the next term.

10.6 The supervisory board shall have a quorum if at least four members are present at the meeting. The supervisory board shall decide on the basis of the absolute majority of all votes.

11 Scope of Powers of the Supervisory Board

11.1 Supervisory Board shall particularly:

(i) supervise the performance of the scope of powers of the board of directors;

(ii) review financial statements and information on the Agency economic result and present their opinion to the board of directors and member’s meeting;

(iii) review and provide an opinion on the annual report compiled by the board of directors, and present their opinion to the board of directors and the member’s meeting;

(iv) inform the board of directors and general director of the Agency on their findings resulting from control activity;

(v) request the board of directors to convene the member’s meeting if a breach of law or Articles of Association of the Agency are found in course of control activity;

(vi) discuss and approve the proposal of the board of directors for the selection of the financial statement auditor;

(vii) discuss and approve the proposal of the change in the Articles of Association, and present its opinion to the board of directors.

11.2 The members of the supervisory board shall be entitled to inspect the records and documents related to the activity of the Agency under conditions specified in Article 13 hereof.

11.3 The chairman of the supervisory board may participate in the meeting of the board of directors.

12 General director

12.1 The general director shall manage the operation of the Agency in accordance with the decisions of other Agency bodies.

12.2 The general director shall be elected by the member’s meeting for the period of five (5) years. Should a new general director not be elected before the end of the term of the current general director, the current general director is considered to be elected for the next term. Only the natural person fully capable to enter into legal acts, older than 18 years and without criminal records may be a general director. The person lawfully sentenced for an economic crime, crime against property or other wilful crime related to the subject-matter of the activity of the Agency shall not be deemed a person without criminal records unless he/she is considered as if he/she has not been sentenced.

12.3 General director shall be responsible for:

(i) the management of the Agency web page;

(ii) publishing the information about the established Agency, the business terms and conditions, and the fees for the services provided on the Agency web page;

(iii) entering into agreements with selected entrepreneurs under Art. 3 of the Act;

(iv) controlling and enforcing obligations to be met by selected entrepreneurs derived from agreements under Art. 3 of the Act;

(v) controlling quality parameters of emergency stocks in accordance with technical standards;

(vi) controlling the quantity of emergency stocks at the recognized stock keeper;

(vii) controlling the availability of emergency stocks;

(viii) fulfilment of statutory information duties of the Agency;

(ix) the maintenance of emergency stocks of the Agency in the stipulated structure;

(x) presenting the proposal for the termination of the Contract on Procuring the Maintenance of Emergency Stocks concluded with the selected entrepreneur (if reasons for termination exists) to the board of directors;

(xi) instructing the release of emergency stocks in accordance with the decision of the government of the Slovak Republic;

(xii) compilation of the annual report containing the analysis of the measures to ensure and verify the availability of emergency stocks pursuant to Art. 11, par. 5 of the Act;

(xiii) fulfilment of other tasks resulting from the decision of the board of directors of the Agency or organization order; and

(xiv) performing rights and duties of the employer pursuant to the relevant labour and other legal regulations.

12.4 The general director shall act on behalf of the Agency and be entitled to bind the Agency within the scope of his/her powers in accordance with the Articles of Association.

13 Joint provisions applicable to the members of the board of directors, members of the supervisory board, and the general director

13.1 The member of the board of directors, member of the supervisory board, general director or employee may not:

(i) conclude agreements related to the activity of the Agency on their own behalf or account;

(ii) mediate conclusion of the agreement with the Agency for other entities;

(iii) participate in the business activity of the commercial company as a partner with liability unlimited.

13.2 Person that performs the function of a member of the board of directors or a member of the supervisory board and that is supposed to have an access to sensitive information, or an employee, that is supposed to have an access to sensitive information, neither the general director cannot:

(i) perform activity as a statutory body or a member of the statutory or other body of any other (a) entity that is a selected entrepreneur, or (b) a controlling entity of the entity under letter (a), or (c) an controlled entity of the entity under (a).

(ii) have a direct or indirect ownership interest in the business or be a member of managing, supervisory or controlling bodies of (a) an entity that is a selected entrepreneur, or (b) a controlling entity of the entity under letter (a), or (c) a controlled entity of the entity under (a); and

(iii) have a direct or indirect ownership interest in the business or be a member of managing, supervisory or controlling bodies of an entity that is or has been in a direct or indirect contractual relationship during their business activity with the entity under (ii); the same shall not apply to the contractual relationship concluded within normal business connections to the extent of the line of business or activity entered in the Commercial Register.

13.3 Person that is supposed to perform the function of a member of the board of directors, of a member of the supervisory board or of the general director, and that is supposed to have an access to sensitive information, or an employee, that is supposed to have an access to sensitive information, cannot be a person that in the three years’ time before its appointment or election or conclusion of the employment contract according to which it is supposed to have access to sensitive information:

(i) had a direct or indirect ownership interest in the business or was a member of managing, supervisory or controlling bodies of (a) an entity that is a selected entrepreneur, or (b) a controlling entity of the entity under letter (a), or (c) a controlled entity of the entity under (a); or

(ii) had a direct or indirect ownership interest in the business or was a member of managing, supervisory or controlling bodies of an entity that is or has been in a direct or indirect contractual relationship during their business activity with the entity under (i); the same shall not apply to the contractual relationship concluded within normal business connections to the extent of the line of business or activity entered in the Commercial Register.

13.4 Person that performed function of a member of the board of directors, of the general director or of a member of the supervisory board and that had an access to sensitive information, or an employee that had an access to sensitive information, may not during the time of three years after its dismissal or other termination of performing of its function or employment termination according to which it had an access to sensitive information:

(i) have a direct or indirect ownership interest in the business or be a member of managing, supervisory or controlling bodies of (a) an entity that is a selected entrepreneur, or (b) a controlling entity of the entity under letter (a), or (c) a controlled entity of the entity under (a); and

(ii) have a direct or indirect ownership interest in the business or be a member of managing, supervisory or controlling bodies of an entity that is or has been in a direct or indirect contractual relationship during their business activity with the entity under (i); the same shall not apply to the contractual relationship concluded within normal business connections to the extent of the line of business or activity entered in the Commercial Register.

13.5 The provisions of Art. 194 par. 5, first sentence, par. 6, first sentence, par. 7 and 8 of Commercial Code shall apply accordingly to the members of the Agency’s bodies and the general director, if appointed. Art. 194 par. 5, second sentence of Commercial Code shall also apply to the general director.

13.6 Members of the Agency’s bodies shall be obliged to keep confidential sensitive information, confidential information and facts the disclosure of which to third persons could harm the Agency or its interests or the interests of Agency members and when exercising the scope of their powers, they shall not prefer their interests, the interests of only some Agency members or the interests of third parties to the interests of the Agency.

13.7 A member of the board of directors, a member of the supervisory board, general director or an employee with the access to the sensitive information for purposes of performing their activities shall ensure the sensitive information is not provided to or disclosed to the Agency members or selected entrepreneurs or members of the Agency bodies that fail to meet conditions under 13.2 and 13.3 or any other person unless stipulated by law.

14 Financial Management

14.1 For the purpose of determining the price, the Agency shall consider the period from the purchase date of the emergency stocks by the Agency until 31 December 2014 as the First Period. From 1 January 2015, the next periods relevant for determining the price shall be identical with the calendar years. For the purpose of determining the price, the Agency shall close the books of accounts and prepare preliminary financial statements as at 30 September of each calendar year.

14.2 The board of directors of the Agency shall prepare a costing plan of the Agency for the First Period and a prediction of the volume of selected petroleum products imported (released for consumption in the Slovak Republic under special regulation, transported into the territory of the Slovak Republic beyond suspension of the excise duty for business purposes, imported into the territory of the Slovak Republic from third-countries, and released for consumption, transported or imported into the territory of the Slovak Republic) in the First Period until 31 October 2013. In the subsequent periods, the board of directors of the Agency shall always prepare a costing plan, plan of expenses and plan of creation and use of reserves for the next calendar year (year t) and a prediction of the volumes of selected petroleum products imported in year t until 31 October of the current year (i.e. year t-1). The board of directors may decide on the need to establish financial reserves for additional purchases of emergency stocks for the next period or the use of such established reserve. For the avoidance of any doubt, it is not a book reserves in accordance with the Act on Accounting No. 431 / 2002 Coll. but the amount entering the formula for calculating total costs, expenses and reserves as provided in this Article 14 below.

14.3 In the First Period, the amount of the price payable to the Agency shall directly depend on the total estimated costs of procuring of maintenance of the emergency stocks in the First Period. The total estimated costs of procuring of maintenance of the emergency stocks in the First Period shall be determined as follows:

CNu₁ = Nn₁ + NA₁ + Np₁ + Nf₁ + Nvz
whereas:
CNu₁	-	Total maintenance costs in the First Period.
Nn₁	-	Costs related to the emergency stocks handling (e.g. storage, safeguarding) in the First Period.
NA₁	-	Administration costs ensuring the functioning of the Agency in the First Period.
Np₁	-	Insurance costs covering the stored stocks against the risks in the First Period, unless included in Nn₁.
Nf₁	-	Costs of debt servicing in the First Period.
Nvz	-	Costs associated with the foundation and incorporation of the Agency.

14.4 In the periods following the First Period, the amount of the price payable to the Agency shall directly depend on the total estimated costs, expenses and reserves for procuring of the maintenance of the emergency stocks in the relevant period (year t). The total estimated costs, expenses and reserves for procuring the maintenance of the emergency stocks in the relevant period (year t) shall be determined as follows:

CNu_t = Nn_t ± Ndzt + NA_t + Np_t + Nf_t + Kfmr
whereas:
CNu_t	-	Total maintenance costs in year t.
Nn_t	-	Costs and expenses related to the emergency stocks handling (e.g. storage, safeguarding, purchases) in year t.
Ndz_t	-	Creation of (+) financial reserve for additional purchases of emergency stocks, or the use of such (-)
NA_t	-	Administration costs ensuring the functioning of the Agency in year t.
Np_t	-	Insurance costs covering the stored stocks against the risks in year t, unless included in Nn_t.
Nf_t	-	Expenses related to financing of debt servicing in year t.
Kfmr	-	Interannual correction factor.

14.5 The total costs of procuring the maintenance of the emergency stocks determined in accordance with clause 14.3 or annual costs, expenses and creation / use of reserves pursuant to clause 14.4 shall be allocated to the planned import volume of the selected petroleum products determined in accordance with clause 14.2 (i.e. the import volume of the selected petroleum products for the First Period or year t). Such established amount of the costs, expenses and creation / use of reserves shall form the base for calculation of the amount of the price for procuring the maintenance of the emergency stocks payable by the selected entrepreneurs based on the contracts on procuring the maintenance of the emergency stocks. A selected entrepreneur shall be contractually obliged to pay such calculated price when importing the selected petroleum products.

14.6 The price for the import of one unit of the selected petroleum products in the relevant year shall be calculated in accordance with the following formula:

In the First Period:
O₁ = CNu₁ / M₁
whereas:
O₁	-	Price in the First Period for one unit (m³ or a metric ton whilst ensuring same proportional weight of these units).
CNu₁	-	Total costs of procuring the maintenance in the First Period calculated in accordance with clause 14.3.
M₁	-	Predicted volume of the imported selected petroleum products in the First Period.

In the subsequent periods:
O_t = CNu_t / M_t
whereas:
O_t	-	Price in year t for one unit (m3 or metric ton whilst ensuring the same proportional weight of these units).
CNu_t	-	Total costs, expenses and reserves for procuring the maintenance calculated in accordance with clause 14.4.
M_t	-	Predicted volume of the imported selected petroleum products in year t.

14.7 For the purpose of calculating the total costs, expenses and reserves for procuring the maintenance of the emergency stocks on year 2015 (which is further in this clause 14.7 of Articles of Association identified as year t), the Kfmr shall be determined as follows:

Kfmr = CNu_{t-1 (9M)} – SPP_{t-1 (9M)}
whereas:
Kfmr	-	Interannual correction factor for year t.
CNu_{t-1 (9M)}	-	Total costs, expenses and reserves for procuring the maintenance in the first nine months of the year t-1.
SPP_{t-1 (9M)}	-	Actually received payments for the performance of the Agency in the first nine months of the year t-1. The actually received payments shall consist of all financial payments received by the Agency for the performance during the first nine months of the year t-1 up until 31 October.

14.8 When calculating the amount of the price for year t, the Agency shall use the interannual correction factor (Kfmr) to modify the amount of CNut. Kfmr will be calculated as follows:

Kfmr = (CNu_{t-1 (9M)} – SPP_{t-1 (9M)}) + (CNu_{t-2 (4.KV)} - SPP_{t-2 (4.KV}₎)
whereas:
Kfmr	-	Interannual correction factor for year t.
CNu_t-_{1 (9M)}	-	Total costs, expenses and reserves for procuring the maintenance during the first nine months of the year t-1.
SPP_t-_{1 (9M)}	-	Actually received payments for the performance of the Agency during the first nine months of the year t-1. The actually received payments shall include all financial payments received by the Agency for the performance during the first nine months of the year t-1 up until 31 October.
CNu_t-2_(4.KV)	-	Total costs, expenses and reserves for procuring of the maintenance in last, i.e. fourth, quarter of year t-2.
SPP_t-_{2 (4.KV)}	-	Actually received payments for the performance of the Agency in the last i.e. fourth, quarter of the year t-2. The actually received payments shall consists of all financial payments received by the Agency for the performance during the last, i.e. fourth, quarter of the year t-2 up until 31 October of year t-1.

Provision of clause 14.8 shall be applied for the first time when determining Kfmr for the calculation of the 2016 fee.

14.9 The correction factor (Kfmr) shall not be applied if the income exceeds the costs (i.e. if the calculated Kfmr is negative) up until the year in which the Agency has available cash and cash equivalents in the amount of 10% of the funded emergency stocks (at the historic purchase price).

14.10 Any positive economics result of the Agency shall only be used to cover the loss brought forward, purchase of the emergency stocks, creation of financial reserve pursuant to clause 14.2, finance the development of storage facilities or to meet the Agency’s obligations resulting from bank loans, issued bonds or from other financial instruments. Agency may create, within its equity, a special fund designated for such purposes.

14.11 The emergency stocks and the storage facilities purchased from the Agency’s capital can be refinanced by bank loans, bonds or other financial instruments.

14.12 The Agency shall not be entitled to have costs or expenses which are not related to the Agency’s business or to the procurement of the activities and obligations in accordance with the legal regulations.

14.13 The Agency shall not be entitled to transfer the emergency stocks or make the emergency stocks available for use free of charge.

14.14 The Agency shall have the right to purchase the emergency stocks above the minimum limit of emergency stocks; purchases of the emergency stocks above the level exceeding 105% of minimum limit of emergency stocks require the recommendation of the State Material Reserves of the Slovak Republic.

14.15 The Agency shall have the right to sell the emergency stocks only in accordance with Section 10 of the Act (Release of Emergency Stocks) or Section 11 of the Act (Free Handling of Emergency Stocks). In such case, the Agency shall sell the emergency stocks at prices higher than the emergency stocks purchase price and not below the price determined for the given product for the respective day as follows:

(a) When selling petroleum products from the emergency stocks the basis shall be the average market value of the specific product at Northwest Europe barges FOB Rotterdam parity for the previous calendar month based on the quotations published for these products by PLATTS, McGRAW HILL FINANCIAL in European Market Scan. Values corresponding with the product title Diesel 10ppm, Premium Gasoline 10 ppm, and Jet shall be used for diesel oil, petrol, and for aviation fuel respectively. If other types of products or semi-finished products are released, values for petroleum products which are the closest in terms of quality shall be used as the basis.

(b) When releasing oil from the emergency stocks, the basis shall be the average crude oil market value titled Russian URALs (spot assessment) for the previous calendar month published by PLATTS, McGRAW HILL FINANCIAL in CRUDE OIL MARKET WIRE and calculated as the average market value of URALs (Ex Novorosijsk) and URALs (Ex Primorsk) crude oil types.

If data under paragraph (a) and (b) above are not available for any reason whatsoever, the closest standard data at the given time shall be used if so decided by the Agency’s board of directors. The weighted arithmetic mean shall be used to determine the purchase price of the emergency stocks in accordance with Section 25 paragraph (5) of Act no. 431/2002 Coll. on Accounting, as amended. If the emergency stocks are released by the Agency in accordance with the legal regulations or if the emergency stocks exceeding 105% of the minimum level are sold by the Agency in accordance with the legal regulations, the funds from such sale of the emergency stocks can, to the extent of the purchase price of the emergency stocks, only be used by the Agency to purchase the emergency stocks to replenish the emergency stocks to the minimum level of the emergency stocks or to meet the obligations stemming from bank loans, issued bonds or from other obligations resulting from or related to the funding of the emergency stocks or the storage facilities owned by the Agency.

15 Transfer of Share in Voting Rights in the Agency

15.1 The share in voting rights of the Founder 1 or an entity that a certain share in voting rights of the Founder 1 has been transferred to (directly or through one or more entities) shall be transferred only with the consent of the government of the Slovak Republic.

15.2 The share in voting rights under 15.1 shall be transferred only when the written agreement is concluded with the declaration of the transferee on the agreement with the Articles of Association and specification of the share in voting rights subject to the transfer. The transfer of the share in voting rights shall become effective as on the day of delivery of the Agreement on the Transfer of Voting Rights to the Agency by the transferee, or on the day the transfer of the share in voting rights is announced in the Agency by the transferor, not earlier, however, than the government of the Slovak Republic grants consent with the transfer of share in voting rights.

15.3 The share in voting rights may be transferred only to the entity with the ownership interest of the Founder 1 in accordance with paragraphs 15.1 and 15.2.

15.4 The voting rights of the member belonging to the group under 6.4(ii) shall be non-transferable.

16 Winding-Up of the Agency

16.1 Winding-up of the Agency shall be subject to the prior consent of the government of the Slovak Republic.

16.2 The Agency shall cease to exist upon the deletion from the registry of the interest associations of legal entities.

16.3 The cessation of the Agency shall be preceded by the winding-up with or without liquidation if the property of the Agency is transferred to a legal successor.

16.4 The liquidation is not required if the Agency has no property or if reasons under Art. 68 par. 2 of Commercial Code exist. The liquidation shall be performed by a liquidator appointed by the board of directors.

16.5 The liquidation of the Agency shall be reasonably governed by Art. 70 to 75 of Commercial Code.

16.6 The Agency members shall not be entitled to the share in the liquidation balance. The liquidation balance shall be transferred to the Reserve Administration.

17 Interpretation Rules

Unless the context of these Articles of Association provides otherwise, the following interpretation rules shall apply:

17.1 Division of these Articles of Association into articles and paragraphs and insertion of headings shall facilitate the orientation and definition of references in the text and it shall have no impact to the explanation or interpretation of these Articles of Association. The expressions “these Articles of Association”, “in these Articles of Association”, “below” and similar expressions shall apply to these Articles of Associations not to any particular article or paragraph, or any other part hereof and they shall refer to any amendment hereto as well. References to articles and paragraphs specified herein shall be references to the articles and paragraphs of these Articles of Association.

17.2 The words used in these Articles of Association in singular shall refer to plural and vice versa as well. The words used in masculine gender shall include feminine and neuter gender as well and vice versa.

18 Final Provisions

18.1 These Articles of Association shall become effective after the approval of founders in the foundation agreement of association of the Agency and following the approval of the government of the Slovak Republic.

18.2 Any change in the Articles of Association shall become effective only with the prior consent of the government of the Slovak Republic.

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