Companies Law

1. A joint-stock company may not grant any type of loan to its board members nor may it act as a guarantor or provide guarantees for any loans they conclude with a third party. This shall apply to any loan or guarantee provided to any of their relatives. Any contract concluded in violation of this provision shall be deemed null and void. The company may petition the competent judicial authority for compensation from the violator for any damage sustained thereby. 2. Paragraph (1) of this Article shall not apply to the following: a) Banks and other financing companies, which may, within their purposes and subject to the terms and conditions applicable to their transactions with clients, grant loans or extend credit to their board members, or provide guarantees for loans they conclude with third parties. b) Loans and guarantees granted by the company in accordance with its employee incentive programs which are approved in accordance with the company’s articles of association or pursuant to a decision by the general assembly. 3. The Competent Authority may determine the rules and cases in which the company is prohibited from granting a loan or guarantee to its shareholders.