Fourth Draft bill dated 11/10/2011

Federal Law No. { } of { }

On Financial Restructuring & Bankruptcy

Financial Restructuring & Bankruptcy Law Section 1 Draft Section Chapter 1 Definitions Article (1) In implementing the terms of this law, the following terms and expressions shall have the meanings given against each: 1-1 "Bankruptcy Debts" are the debts or liabilities owed by debtor and payable when the judgment of bankruptcy declaration is issued, or those incurred by debtor before the judgment of bankruptcy declaration is issued and become payable thereafter. 1-2 "Undertaking/Commencement Order" means: (a) Regarding the procedures of preventive composition, judgment for undertaking/commencing the procedures of preventive composition issued by court pursuant to the terms of Section 3; (b) Regarding the procedures of Bankruptcy declaration, judgment for undertaking/commencing the procedures of bankruptcy issued by court pursuant to the terms of Section 4; (c) Regarding the procedures of Insolvency, preliminary judgment for undertaking/commencing the procedures of insolvency issued by court pursuant to the terms of Section 4;

1-3 "Commercial Transaction Law" means the federal law No (18) for year 1993 on Commercial Transaction Law as amended from time to time including any subsequent legislation; 1-4 "Committee" means the financial restructuring and bankruptcy committee formed as per the terms of this law; 1-5 "Commercial Companies Law" means the federal law No (8) for year 1984 on Commercial Companies Law as amended from time to time including any subsequent legislation; 1-6 "Court" means the competent civil court chosen according to the following conditions: (a) For any person mentioned in article (2), the competent court is the one whose area of jurisdiction includes the debtor's workplace; (b) For any foreign company licensed to work in the state, the competent court is the court of first instance whose area of jurisdiction includes the branch headquarter; (c) For any person who has more than one workplace, the competent court is the one where the main headquarter of that person falls within its area of jurisdiction; (d) For any natural person who stopped working at his workplace, the competent court is the one where the homeland of that person falls within its area of jurisdiction; (e) If no jurisdiction was determined based on the aforementioned terms, the competent court is the one where debtor payment failure happened within its area of jurisdiction; 1-7 "Debtor's Assets" mean all funds and assets owned by debtor at the date of the relevant commencement order pursuant to the terms of third, fourth and ninth sections and any funds or assets to be owned during the relevant procedures or legal procedures as per the terms of the foregoing sections;

1-8 "Financial Free Zone" means any area established in the United Arab Emirates in the form of a free zone as per a federal decree where the established entities are authorized and licensed by the free zone to practice financial activities; 1-9 "Governmental Authority" means: (a) Any federal or local governmental authority in the state (including public institutions, bodies and entities established for public interest); and (b) Any establishment or body incorporated, or whose capital is shared by any federal or local governmental authority and is not subject to the terms of Commercial Companies Law; 1-10 "National Currency/AED" means the dirham of United Arab Emirates; 1-11 "Party of Interest" means any party or entity which has right or interest in any procedure; 1-12 "Law" means the Law of Financial Restructuring and Bankruptcy; 1-13 "Liquidation Order" means the judgment issued by court on liquidating the estates of debtor pursuant to the terms of fourth or ninth section; 1-14 "Marital Assets" mean any assets or estates owned by either or both mates during their marriage, except for: (a) Assets from inheritance; (b) Commercial Assets; (c) Financial funds of insurance policies for both mates; (d) Estates possessed before marriage; and (e) Other exceptions provided by the terms of law governing the marriage; 1-15 "Marital Debts" mean and debts incurred by debtor for either mate whether as per the terms and conditions of an agreement or by law;

1-16 "Excessive Indebtedness Procedures" mean the excessive indebtedness procedures on which the commencement order was issued as per the terms of the ninth section; 1-17 "Experts Roll" mean the list including the secretaries, or composition, bankruptcy or restructuring experts nominated and assigned by the committee to work as secretaries, or composition or bankruptcy experts, or composition, bankruptcy or restructuring experts as per the terms of the second, third and ninth sections of this law as well as provisions of chapter 3 of the first section; 1-18 "Preventive Composition Procedures" mean all procedures related to the judgment issued by the court on undertaking/commencing the procedures of preventive composition as per the terms of the third section; 1-19 "Organized Entity" means any entity subject to the

implementation of the terms of this law and whose whole or any part of its commercial or professional activities is under the control of a competent regulatory authority; 1-20 "Current Rate of Exchange" means the current rate of exchange at the commercial banks operating in the state for immediate settlement for exchanging the relevant currency to the national currency upon the closing of business on the date of the concerned day; when the U.S. dollar is transferred to dirham; it means the average rate of exchange issued by the Central Bank of United Arab Emirates upon closing business on the concerned day. In case no rate was issued, the exchange rate will be determined by the court; 1-21 "Precautionary Measures" mean any necessary measures to ensure the secure maintenance and administration of the debtor's estates issued by court as per the terms of third, fourth or ninth section; and

1-22 "Simple Liquidation Order" means the judgment issued by court on undertaking the simple liquidation procedures as per the fourth section terms.

Chapter 2 Persons Governed by This Law Article (2) 2-1 All terms of this law shall govern, except the ninth section (Excessive Indebtedness Procedures of unnatural persons other than traders), the following: (a) Any company incorporated pursuant to the terms of Commercial Companies Law, including any company owned by any governmental authority wholly or partially; and (b) Any natural or artificial personality practicing any activity for profit purposes, including any natural or artificial personality practicing its profession to gain profits (such as doctors, engineers and lawyers); This includes, in all cases, any trader as per definition provided in article (11) of Commercial Transactions Law. 2-2 The terms of section nine shall govern natural persons of non traders, as well as the terms of this section, the fifth, sixth, seventh, eighth and eleventh section of this law. 2-3 The terms of this law shall not govern the following: (a) Governmental authorities; or (b) Any entity established, licensed and authorized to practice its activity within a financial free zone and the competent department issued a special regulation on its bankruptcy.

Chapter 3 Committee of Financial Restructuring & Bankruptcy Article (3) 3-1 A committee is formed called ("Committee of Financial Restructuring & Bankruptcy") pursuant to the terms of a decision issued by Council of Ministers based on the suggestion of the Minister of Finance. 3-2 The committee shall perform the task of financial restructuring and bankruptcy, administering the procedures of financial reregulating provided in the second section and exercising other functions stipulated by this law. 3-3 The Council of Ministers issues a decision authorizing the Minister of Finance to issue executive and procedural decisions for regulating the work of the committee as well as enabling it to exercise its activities and achieving its purposes. 3-4 The committee shall, in coordination with the competent department at the Ministry of Justice, prepare an approved list including bankruptcy experts and other specialists specialized to work as representatives, experts or secretaries to perform any of the tasks delegated to them pursuant to the terms of this law. Such experts are registered in a special roll named ("Bankruptcy Experts Roll") and the committee shall define the registration conditions and procedures in this roll. 3-5 These experts are governed by the terms on discharge and discipline of experts provided in the Federal Law No (8) of 1974 on regulating expertise before courts or any other law amending or replacing thereof. 3-6 The committee shall control and arrange the following: (a) A record of the persons formerly judged as incompetent as per the twelfth section; and

(b) A record of the decisions and judgments of the court for imposing any limits on bankrupts whether permanent or temporal, and which might be ordered by court as per the terms of the fourth section. Records shall be updated and any party who has interest may review them as per a request submitted to the committee). 3-7 The committee shall submit to the Minister of Finance any recommendations regarding the amendment, modification, or deletion of any term of this law or the enforcing decisions thereof. 3-8 The committee shall organize or sponsor the initiatives intended for raising public awareness about this law and the understanding of its goals.

Article (4) 4-1 The committee shall fall under the control of the Minister of Finance. 4-2 The decision issued by the Council of Ministers on forming the committee, the number of its members and the manner to perform their work provided that they must include one member from each of, the Central Bank of United Arab Emirates, Securities and Goods Commission, Ministry of Economy, Ministry of Finance, and one from Ministry of Justice. The same decision shall determine the remunerations for the committee members. The committee will submit the annual expenses table to the Minister of Finance and such expenses are included in the expenses of the Ministry of Finance. 4-3 The committee may request any person who has any expertise related to the specializations or responsibilities of the committee to attend the committee meetings as a consultant and the committee will specify the tasks and fees of the delegated expert. Article (5) 5-1 The committee shall undertake the following:

(a) Providing the Minister of Finance from time to time with a report on the works it did and its suggestions for the decisions to be issued for enabling it to perform its delegated tasks; and (b) Assuring that its activities are performed pursuant to the terms of this law, the ministerial decisions as well as the decisions of the Council of Ministers issued in regard with regulating its works and activating its tasks and responsibilities.

Section 2 Financial Reregulation Chapter 1 Goals & Conditions of Financial Reregulation Procedures Article (6) The procedures of financial reregulation provided in this section aim for facilitating a consent agreement signed outside the court between the debtor and his creditors with the help of an assistant assigned by the committee for this purpose. Article (7) 7-1 Each of the persons stated in clause (2-1) of this law may submit a request for the committee to commence the procedures of financial reregulation if such person is facing current or future economic or financial difficulties, but he shall not be deemed as suspending the payment of his debts or in case of excessive indebtedness for more than forty five subsequent days. 7-2 For purposes of clause (7-1), the expression "Payment Suspension" shall have the meaning defined in article (129) and the expression "in case of excessive indebtedness" the meaning specified in article (130). Article (8) 8-1 The request must include the following:

(a) A memo containing a brief description of his economic and financial status as well as detailed information about his employees and the reasons behind submitting such request; (b) Any documents supporting the request submission; A verified copy of his trade or professional license and his commercial register issued by the competent department in the Emirate; (d) A copy of the commercial books or financial data related to his business during the financial year prior to the request submission; An estimation of his financing needs to settle his commercial liabilities during the next twelve months period; and (f) If applicable, the details explaining the method of settling the finance he needs, if finance was requested. 8-2 The committee may request applicant to provide any documents or other proof necessary for stating his financial and economic status. Article (9) The debtor, who falls under preventive composition procedures of bankruptcy or bankruptcy declaration, may not submit a request for commencing the financial reregulation procedures. Article (10) The committee reviews the request and information provided as per the terms of article (7) and issues its decision whether to accept or refuse the debtor's request for commencing the financial reregulation procedures; this decision shall be subject to the committee estimation. No litigation against or appeal of the decision issued by the committee may be filed before any department. Article (11) The committee shall notify the applicant within a period of no more than (five) 5 days from the application receiving date on its acceptance or refusal of that application. The acceptance of the committee may be

conditioned by obligating applicant within a specific period of time to provide additional information about his economic and financial status. Article (12) 12-1 Notice of accepting the financial reregulation issued by the committee will cause the suspension of the debtor's commitment of his bankruptcy declaration as per the terms of the fourth section during the period of financial reregulation procedures. 12-2 Despite the terms provided in clause (12-1), the committee acceptance of the debtor's request for financial reregulation shall not prevent him from submitting to the court the preventive composition or bankruptcy declaration request, in this case the procedures of financial reregulation will automatically terminate. Chapter 2 Assistant Assignment Article (13) The committee shall, within no more than {five (5)} days from the date of request acceptance, assign an independent assistant from the experts roll to assist the debtor reach an agreement with his creditors to facilitate the progress of debtor's works. The assistant may not be indebted to the debtor or any other person under the debtor's control, or his boss, or any other person who has received from him within the period of {twenty four} months prior to submitting the application any salary or remuneration related to his profession or expertise. Article (14) The committee may assign from the expertise roll an independent expert who has necessary expertise and qualification in the field of financial restructuring and bankruptcy to help the assistant performing his tasks. Article (15)

The financial reregulation procedures start from the date of assigning the assistant by the committee. The assistant is assigned for four months. The committee may extend the assistant assignment period once or more provided that it does not exceed six months as a whole. The debtor may further request changing the assistant if he proved to the committee that assigning the suggested assistant will cause damages to his interest. Article (16) The assistant shall help the debtor in evaluating his economic and financial status. He will also help to reach an amicable agreement between the debtor and his basic creditors and any of his contracting parties to assist the debtor solve his economic or financial difficulties. The assistant may offer suggestions to the debtor to maintain his works, including keeping his employees. Assistant shall regularly inform the committee about the progress of financial reregulation procedures at least once per month. Article (17) The assignment of assistant shall neither affect the debtor's ability to manage his works nor release the debtor from any legal or contractual obligations as a result of his activities. Besides, the assistant may not interfere in the management of debtor's works unless he obtained his prior approval on that. Chapter 3 Confidentiality Article (18) The details of financial reregulation procedures shall only be disclosed to the parties related to the said procedure, and no person participates in or knows about the financial reregulation procedures as per his profession or job about these procedures may not disclose them to other parties. Article (19)

The assistant shall submit to the committee a copy of any agreement signed between the debtor and his creditors, or any of his contracting parties. Article (20) If the debtor is subject to preventive composition procedures or bankruptcy declaration procedures, the committee shall submit a copy of any agreement related to financial reregulation procedures or any other documents related to the debtor to the court which will review the procedures of preventive composition or bankruptcy declaration based on the request of such court. Chapter 4 Financial reregulation procedures Termination Article (21) 21-1 The committee, when requesting additional information as per the terms of article (11), may order the termination of financial reregulation procedures if applicant fails to provide such additional information within the period set by the committee. The committee may terminate the procedures of financial reregulation if the debtor failed to pay any due costs or expenses as per terms of Article (23) and based on the committee's decision. 21-2 If assistant concluded that no agreement could be reached between the debtor and his creditors, he shall submit a report to the committee recommending the issue of a decision to terminate the procedures of financial reregulation. The committee shall order the termination of financial reregulation in case it agreed on the recommendation of the assistant.

21-3 The debtor may request the termination of financial restructuring procedures as per an application he submits to the assistant and

committee. The committee may order the termination of these procedures after it makes sure the reasons that made the debtor requests the financial restructuring procedures were over. 21-4 The financial restructuring procedures shall automatically stop when the assistant assignment period terminates or before that if an agreement was made between the debtor and his creditors on financial restructuring. 21-5 The submission of an application for preventive composition procedures or bankruptcy declaration procedures in relation to the debtor will automatically cause the termination of financial restructuring procedures. 21-6 The committee shall refuse the debtor's application to start the financial restructuring procedures in case the debtor was subject to the financial restructuring procedures during the (year) prior to the application submission. 21-7 The committee may request the debtor or any of his creditors to attend before it when it decides the possibility of financial restructuring procedures termination; besides, it notifies the debtor in writing regarding any decision related to the financial restructuring procedures. Article (22) 22-1 Despite the termination of financial restructuring procedures, either party of financial restructuring agreement may refer any breach incurred by any of the agreement parties to the committee and the committee may request the breaching party to appear before it to seek the solution for any matters related to his incompliance with the provisions of this agreement. 22-2 The decisions of the committee are final and may not be appealed before any department whatsoever unless issued in contradiction with the provisions of this section, in this case, they may be appealed before the competent Court of First Instance pursuant to the appeal procedures set for administerial decisions.

Chapter 5 Fees & Expenses Article (23) The committee determines the fees of the assistant as well as any expert it assigns to help the assistant based on its estimation of the required work; the committee shall also determine other fees and charges incurred on the debtor from the financial restructuring procedures. Article (24) The committee should study the economic and financial status of the debtor when making its decision mentioned in Article (23) and no fees will be paid to the assistant and any expert when either finishes his task or his assignment period expires. Section 3 Preventive Composition of Bankruptcy Chapter 1 Goals & Conditions of Bankruptcy Declaration Procedures Article (25) The preventive composition procedures provided in this section aim at helping the debtor to restructure his works as per a plan for preventive composition of bankruptcy with his creditors under the supervision of court and the assistance of a Supervisor of Composition assigned by the court. Article (26) Each of the parties defined in clause (2-1) of this law may request preventive composition of bankruptcy if: 26-1 He was not in state of payment suspension or excessive indebtedness but facing unsolved financial difficulties; or

26-2 He was in state of payment suspension or excessive indebtedness provided that such state will not last for more than forty five subsequent days. Article (27) The court shall reject the request of bankruptcy preventive composition procedures if: 27-1 The debtor was subject to the procedures of a current preventive composition as per the provisions of this section or was subject to the procedures of preventive composition during the previous (year); or 27-2 The court ordered the commencement of bankruptcy procedures in relation to the debtor as per the provisions of section four. Article (28) If the debtor is an organized entity, the bankruptcy preventive composition may be requested from the competent executive authority provided that the latter is able to convince the court that the provisions of commencement of preventive composition bankruptcy procedures provided in the first chapter of this section are done or that the request of bankruptcy preventive composition serves the public interest. The debtor who is an organized entity may also request preventive composition of bankruptcy provided that he shall notify the competent executive authority in writing about that. The competent executive authority may provide any documents or pleadings deemed necessary to the court reviewing such application. Article (29) The application of preventive composition procedures of bankruptcy shall be submitted to the court stating the reasons of such request and the following documents to be attached thereto: 29-1 A memo containing a brief description of his economic and financial status as well as detailed information about his employees;

29-2 Any documents supporting the request submission; 29-3 A verified copy of his trade or professional license and his commercial register issued by the competent department in the Emirate; 29-4 A copy of the commercial books or financial data related to the debtor's business during the financial year prior to the request submission; 29-5 A report clarifying the expectations of debtor's money as well as the expectations of profit and losses for the next (twelve) months after submitting the application; 29-6 A list of the debtor's creditors including their addresses, their expected due sums and the expected debt warranties signed on the debtor's assets, if any; and 29-7 A detailed statement of the debtor's moveable and immoveable assets and the approximate value of such assets at the date of submitting the application. Article (30) In regard with a company incorporated as per the provisions of Commercial Companies Law, in addition to the aforementioned, the following must be attached to the application: 30-1 A copy of the competent body decision at the company on authorizing applicant to submit an application for undertaking the procedures of preventive composition of bankruptcy; and 30-2 A copy of the company's incorporation documents and any amendments thereof duly deposited at the competent department in the emirate where the said company was incorporated. Article (31) 31-1 The application of preventive composition shall be submitted to the court, and the court bureau writes a minute stating the receipt of documents presented by applicant; yet if the latter failed to provide some

information or required documents as per the provisions of Article (29) and Article (30), he should mention the reasons in his request. 31-2 The court notifies the debtor regarding any application it receives from the creditor, the executive authority or any other department related to the composition application submitted to court. The court shall further order the debtor to provide any documents or information required as per the provisions of Article (29) and Article (30).

Chapter 2 Precautionary Measures & Complementary Procedures Article (32) 32-1 The court reviewing the composition application may order, based on the request of any stakeholder or its own free discretion, the undertaking of the measures required for preserving or managing the debtor's money, including the stamp of debtor's workplace until the application is settled. 32-2 The court may order such procedures to remain valid or order any additional precautionary measures to be made after the preventive composition application is accepted. Article (33) The court shall review the application and its supporting documents, it may also order the assignment of any of the experts registered in the expertise roll; besides, the court states in the same decision the tasks and fees of such expert as well as the period in which the expert must present the report. The assigned expert shall prepare a report on the debtor's economic and financial status as well as his opinion on the availability of the necessary conditions to commence the procedures of bankruptcy preventive

composition; he should also state whether the debtor's assets are sufficient or not to cover the costs of preventive composition procedures. Article (34) The court may request the committee to provide all the documents and date related to the procedures of financial restructuring of the debtor. The court shall further keep the confidentiality of any of these documents or data provided by any of the creditors and shall not disclose them without the debtor's approval. Chapter 3 Application Settlement Article (35) The court settles the composition application in summary and without litigation during the session set for that. If the court decided to accept the composition request, it must order the commencement of procedures and to state in its decision the assignment of one Supervisor of Composition or more to commence the composition procedures as well as one of its judgments to control the composition if required as provided in Article (42). The court may grant the composition requester a short term of no more than (14) days to enable him providing the court with additional date or documents supporting his application. Article (36) No appeals may be filed against the judgments issued by court during the procedures of preventive composition unless permitted by law or if the court which issued that judgment was incompetent to issue it. The appeal is subject to the provisions provided in section eleven. Article (37) The court should reject the composition application in the following cases:

37-1 If the composition requester failed to provide the documents and data provided in Article (29) or Article (30) or they were provided incomplete without any justification, 37-2 If it was proved that appellant acts in bad intention or that the application prejudices the litigation procedures; or 37-3 If it was proved that the preventive composition procedures are inappropriate for the debtor as per the data and documents submitted with the application or based on the report prepared by the expert pursuant to the provisions of article (33). 37-4 If the debtor failed to deposit the sum required to be deposited or does not provide the required guarantee as per the provisions of Article (40). Article (38) The court may request any party who has information related to the commencement of preventive composition procedures to attend the session; such party should provide the court with any reasonable information that might be requested by the court. Article (39) The court may order the joinder of one natural or artificial party or more in the composition procedures according to the conditions that provide proper and efficient protection of creditors if the court deemed that the commencement of separate procedures regarding such parties will not be practical or useful in regard to cost. Article (40) The debtor deposits at the court's treasury a sum of money, security or guarantee in return for the sum as deemed proper by the court according to a form approved by court in order to cover the expenses and costs of preventive composition procedures, including the fees of the Supervisor

of Composition and any expert as per the manner and date decided by the court. The Public Treasury may (based on the application of the composition requester) provide the deposit, security or guarantee on behalf of the debtor if that serves the public interest. Yet, if the financial sum, security or guarantee was not deposited in the same manner and date decided by the court, the latter may order the cancellation or suspension of the preventive composition procedures. Chapter 4 Assignment of Supervisor of Composition & Supervisor Judgment Article (41) If the court decided to accept the composition application, it must state in its decision the assignment of one Supervisor of Composition or more from the experts registered in the experts roll. The composition requester may nominate a specific Supervisor of Composition from the experts roll to be assigned. Article (42) The court may order the assignment of one judge or more to supervise the composition procedures, for purposes of administering such procedures or because the complexity of the status demands so. The court defines the conditions of such assignment, including the nature and amount of the responsibilities delegated by court to the supervisor judge. Article (43) The court may assign more than one Supervisor of Composition provided that it will not exceed three secretaries at the same time. The composition secretaries in this case shall work jointly or individually as per the instructions issued by court in this regard. Article (44)

The court may, if required, after consulting the Supervisor of Composition, delegate an expert to help the Supervisor of Composition to perform his tasks provided that such expert must comply with the instructions stated in his assignment decision. Article (45) 45-1 The composition and any expert are delegated from the parties registered in the experts roll. The court may order the assignment of any expert not registered in the experts roll if such roll did not include the expert who has the expertise required to be done. 45-2 The following parties may not be assigned as composition secretaries or experts: (1) the creditor of the debtor, his wife, brother-inlaw or fourth-degree relative, (2) any party formerly convicted of any crime or felony of theft, embezzlement, breach, or any of the bankruptcy crimes provided in this law or perjury, (3) Any party who was, during the two previous years of the commencement of composition procedures, his partner, employee, accountant or representative. Article (46) Each of the Supervisor of Composition and any expert are paid in return for the tasks they provide as well as the reasonable expenses incurred from the sum or financial security deposited at the court's treasury as per the provisions of Article (40); yet, if the deposited sum or security was not sufficient, the Supervisor of Composition or expert may submit an application to the Public Treasury to cover the deficiency. If the Public Treasury rejected such request, the court shall order the suspension of the composition procedures or reject them if the procedure requester failed to deposit at the court's treasury on the set date the sum sufficient to cover all these fees and expense. Article (47)

The court may based on its free will or the debtor's request to replace the Supervisor of Composition and any expert or to assign additional composition secretaries or experts as deemed necessary. The debtor may also request the court to replace the Supervisor of Composition or expert if proved that the continuous assignment of current Supervisor of Composition or expert (as required) might damage the interests of all debtors. Chapter 5 Observers Assignment Article (48) The court may assign no more than five observers from the debtors requesting to be assigned as observers to supervise the procedures of preventive composition. Each observer may be represented by any of his employees or legal representatives in case there are creditors of any debts secured by regular or underlying mortgage, at least one observer shall be assigned from every group. Article (49) The observer provides help for the Supervisor of Composition and the court and works in favor of the public interest of creditors. The Supervisor of Composition should consult the debtor or creditors regarding the plan of preventive composition and he shall also notify the observer about the preventive composition plan and deliver him a copy of this plan. Article (50) The observer shall not receive any fees, or bear any responsibility except for the one incurred by his gross or intentional fault during his tasks performance. The court may, based on the request of the Supervisor of Composition, isolate any observer.

Chapter 6 The management of the debtor's business during Composition procedures Article (51) The Supervisor of Composition shall, under the supervision of the court commence Composition procedures and follow them at the earliest and confirming that he has taken all the procedures and measurements that provide the protection for the interest of the debtor and the creditors fairly.

Article (52) The Supervisor of Composition shall work as the agent of the debtor, and he shall be personally responsible for the management works according to article (63).

Article (53) Any amount received by the Supervisor of Composition must be stated while executing his duties within one day after the receipt thereof in trust account as a deposit at a bank determined by the court, during a maximum period of two working days from the receipt of the same. If the Supervisor of Composition shall delay in depositing any amounts he receives for deposit without any cause acceptable by the court, the court shall order obliging him to pay daily interest determined by the court which shall not exceed 12% annually on all the amounts that remain without depositing.

Article (54) The supervision period shall be effective when facing the debtor of the issuance of the order of the commencement of Composition procedures.

This period shall not exceed 3 months, and the court may upon the request of the debtor or the Supervisor of Composition renew the same for once or many times that the renewal periods shall not exceed 45 days. The debtor shall during the supervision period prepare a plan project of the precautionary Composition assisted by the Supervisor of

Composition. The supervision period shall terminate when the court confirms the plan project of the precautionary Composition according to the provisions of article (102) or at the termination or end of precautionary Composition of bankruptcy procedures in an earliest date.

Article (55) The Supervisor of Composition shall during the supervision period supervise the development and preparation of the project of the precautionary Composition of bankruptcy and must submit to the court (at least every month) a brief report regarding the progress of the plan project.

Article (56) The assets of the debtor shall be inventoried with the knowledge of the Supervisor of Composition or upon his instructions and direct supervision, the inventory must include the details, any guarantee rights and any assets of the debtor which would be the subject of third parties' claims.

Article (57) If the debtor is a natural person, he must assist the Supervisor of Composition properly to determine the monies reserved by the debtor to cover his needs and the dependants to preserve a reasonable living level for them. The Supervisor of Composition shall determine the reasonable

amount to perform the obligations of the debtor and his dependants. The debtor may plaint of this determination before the court which shall in turn issue its decision in the deliberations room at the earliest which decision in this regard shall be final. Such amounts and any rights of pension whether obtained before or after the commencement date out of the precautionary Composition procedures which shall remain the property of the debtor even after the confirmation of the plan project. The Supervisor of Composition shall commit to take into consideration at the time of determination of such assets the statements presented to the court by the debtor according to the provisions of article (29).

Article (58) 58-1 Subject to the precautionary Composition of bankruptcy procedures, the spouse of the debtor shall determine the amount owned by him/her according to any applicable rules stipulated in the Marriage Law, the spouse must submit any claim of retrieval of any amounts whether movable or immovable to the court during 3 months from the date of publishing the order of conciliation commencement according to the provisions of article (84).

58-2 The souse may retrieve what he/ she owns of movable or immovable amounts among the assets of the debtor providing that the court confirms that the non- disputed title of such monies. 58-3 The Supervisor of Composition may submit an application to obtain permission from the court in order that the precautionary procedures include any assets purchased by the spouse of the debtor by the debtors' monies during the 3 years before the issuance of the order of the commencement of precautionary Composition of bankruptcy.

Article (59) The court shall provide the Supervisor of Composition of any information about the debtor it has received before his appointment. The debtor shall provide the Supervisor of Composition of any additional details he failed to notify the court thereof whether about his creditors or the amounts of debts in addition to the details of any effective contracts the debtors is a party of which. Also, the debtor must also inform the Supervisor of Composition of any pending or current proceedings he is a party of which. Moreover, the debtor should submit information according to this article during the period determined by the Supervisor of Composition.

Article (60) The Supervisor of Composition shall prepare a register listing in which all the known creditors of the debtor according to the information provided to him pursuant to the provisions of article (29) and article (59), Furthermore, the Supervisor of Composition shall provide a copy of the statements of the register to the court, Thereupon, the statements must state the address of every debtor in addition to his claim amount, in addition to all the debtors who own the mortgage or privilege debts with the details of the decided guarantees for each of them and evaluation of the potential value of such guarantees at the time they made. The register must include also any set off claims that may be submitted according to the provisions of the sixth chapter.

Article (61) 61-1 The Supervisor of Composition shall prepare a report about the business of the debtor and shall submit a copy thereof to the court as a part of the periodical reports he is committed to submit to the court according to the provisions of article (55). The Supervisor of

Composition must consult with the debtor during the preparation of his report and he can require any data or information about anybody who has such information about the business of the debtor. Such person must submit such information to the Supervisor of Composition which is not deemed as a breach of any legal or contractual obligation regarding the confidentiality of such information.

2-61 If the court has been persuaded of the Supervisor of Composition's recommendations stated in his report and it has been revealed to it that the report computed all the claims according to the provisions of article (87), the court shall order the Supervisor of Composition to submit a copy of the report to the creditors whose debts has been accepted by the court with granting them period to submit their comments on the report during a period determined by the court. The court may order the effacement or the strike off of any data or information in the report, it may also order the commitment of information confidentiality therein, it was revealed to it that its disclosure does not serve the benefit of the continuation of the debtor's business.

Article (62) Without prejudice to the regards of the general system, the Supervisor of Composition may obtain any information regarding the monies of debt from any authorities, formal bodies or financial institutions. Every body has information regarding the monies or business of the debtor shall commit to provide the Supervisor of Composition of the information he would reasonably require including any documents or books of accounts regarding debt. However, the disclosure of such information according to the provisions of this article shall not be considered as a breach of any legal or contractual obligation regarding the confidentiality of such

information. Furthermore, Supervisor of Composition must confirm the maintenance of the information regarding the debts confidential as possible whenever the disclosure thereof damages the value of the debtors' assets, and he must refrain from the disclosure thereof outside the procedures of the precautionary Composition.

Article (63) Without prejudice to the limits on the actions of the debtor according to the provisions of this chapter, the debtor or any of his employees shall take over the responsibility of managing the works of the debtor during the procedures of the precautionary Composition under the supervision of the Supervisor of Composition. Subject to the provisions of the rights, the authorities and the duties of the Supervisor of Composition stated in this chapter, the Supervisor of Composition shall be subject while performing his duties to the same obligation the hired agent is subject to according to the agency contract stated in the Civil Proceedings Law.

Article (64) The Supervisor of Composition may require the debtor to perform, if necessary he shall perform by himself, all the necessary actions to preserve the interests of the debtor and his creditors during the procedures of the precautionary Composition. The Supervisor of Composition may while performing his duties perform the following acts and actions on behalf of the debtor: 64-1 The legal or financial possession of any of the debtors' monies requesting the verification and confirmation of the possession of any monies, 64-2 Collection of any amounts, monies or rights on behalf of the debtor,

64-3 Execution of maintenance of any insurance policies necessary for the continuation of the debtor's business, 64-4 The payment of any amounts or the performance of any claims must be paid or performed as a part of performing he plan of the precautionary conciliation of bankruptcy, 64-5 Leasing any properties of the debtor or revoking their lease or tenancy contracts if it is deemed necessary or satisfies he benefit of the debtor's business, 64-6 Enter as a party in any arrangement, quittance or settlement with a creditor or more of the debtor on behalf of the debtor, 64-7 obtaining or renewal of any guarantee the debtor failed to obtain or renew.

Article (65) The Supervisor of Composition may apply to the court on behalf of the debtor for permission to obtain a new finance with or without guarantee during the procedures of the precautionary Composition according to the provisions of the fifth chapter, the court shall grant such permission only for the purposes of ensuring the continuation of the debtor's business, the provisions of the fifth chapter shall apply on any finance permitted by the court according to the provisions of this article.

Article (66) The court may order the partial discontinuation of the debtor's business upon a request of the Supervisor of Composition.

Chapter Seven Prohibition of disposing the assets Article (67)

From the date of Commencement order, the debtor shall not be entitled to: 67-1 The payment of any claims arising from the issuance of commencement order except any set off payments according to the provisions of the sixth chapter, or 67-2 The disposal of any of his assets or borrowing any amount except what is stated in the article (65) unless such payment ,disposal or

borrowing is within the usual context of the debtors business after obtaining the prior approval of the Supervisor of Composition of the court. The Supervisor of Composition or court shall approve such payment, disposal or borrowing if necessary for the continuation of the creditor's business. The debtor shall obtain the prior approval of the court regarding any indemnity loan or that has priority of payment unlike the common debts.

Article (68) The court shall adjudicate, the request of any interested party, the revocation of any act of the debtor breaching the provisions of article (67). The court may Order when revocation any third party to retrieve any of the debtor's asses and it may also issue any other order it deems fit. The court should in all cases before the issuance of its judgment hear the statements of both the debtor and the party contracting him before deciding in the request.

Article (69) Except the case of obtaining finance according to the provisions of article (65), the insurances on the monies of the debtor arranged during supervision period shall not be effective without the prior permission of the court.

Chapter Eight The invalidity of interest and proceedings Article (70) Submission or proceeding in any claim or taking the legal or judicial proceedings against the debtor in the other cases that are stated in this law is prohibited during the period of the precautionary Composition, Furthermore, the result of the order of the precautionary Composition procedures commencement shall be the discontinuation of the judicial execution procedures against the debtor's monies. The creditors who own the mortgage or privilege debts are prohibited from the execution of their guarantee against the debtor without the prior approval of the court therefore. Article (71) The result of the issuance of the approval of the precautionary conciliation with commencing its proceedings as follows: 1-71 Maturity of the legal or contractual benefit, including the accrued benefit or indemnity for late payment. 71-2 Any legal action against any person has granted personal guarantee to the debtor, or transferred his assets, as a guarantee of the debtor's obligations, until the approval of the court on the conciliation bankruptcy precautionary

plan or until it issues a commencement order of the proceedings. The court may when approving the

precautionary conciliation plan order of extending this stoppage for maximum period of 2 years.

Chapter 9 Fulfillment of obligations and contracts Article (72)

The result of the commencement order of the precautionary conciliation shall not be annulment of any agreed term for the fulfillment of any debt of the debtor, and any text states otherwise shall be void.

Article (73) Notwithstanding of any legal or contractual text states otherwise, (without prejudice to the provisions of article (68)), the result of commencing the proceedings of the precautionary conciliation the revocation pr termination of any effective contract between the manager and third parties. The contractual party with the debtor shall fulfill its contractual obligations unless it has started before the date of the commencement order a plea of non- execution as a result of the default of the debtor of fulfilling its obligations.

Article (74) 1-74 Supervisor of compositions may during the conciliation require the contracting party with the debtor to enforce any effective contracts against the fulfillment of the debtor's obligations. The default of the supervisor of composition to fulfill the debtor's obligations shall only result in claiming of the indemnity for the damages of non- execution. 74-2 The contract shall be revoked automatically between the debtor and third party if the contracting party with the debtor sends an official notification for that purpose to the supervisor of composition, and that notification remains not replied for 1 month from the date of receiving thereof. The contract shall be revoked automatically if the supervisor of composition sends n official notification for that purpose to the contracting party with the debtor requiring showing the reasons for the continuation of the contract, and that notification remains not replied for 1 month from the date of receiving thereof by that party.

Article (75) 1-75 Upon requiring the enforcement of any contract, the supervisor of composition must ensure that the debtor has the necessary assets to fulfill its obligations stated in that contract. 2-75 The supervisor of composition shall pay any amount the debtor should pay to the contracting party with him via an effective contract unless the contracting party grants the debtor a period for payment.

Article (76) The court may, upon the request of the supervisor of composition, order the revocation of an effective contract the debtor is a party in which if it deeded that necessary to enable the debtor of commencing his business or if the revocation would result in a benefit to all the debtor's creditors without prejudicing the benefits of the contracting party with the debtor.

Article (77) Considering paragraph (78-3), if the debtor commences his business from premises leased or invested by him, then the result of issuing the commencement order of precautionary conciliation shall not be the automatical revocation of the lease or investment contract, and shall not also result in the effectiveness of the date of the payment of the accrued tenancy amount for the remaining period, and any condition states otherwise shall be void as never been existed.

Article (78) Notwithstanding the provisions of article (77): 1-78 The supervisor of composition may terminate the lease or investment contract of te premises used by the creditor to do his business

before the agreed date in the contract.

The period of Termination

notification shall be 3 month unless the contract states a shorter period,

2-78 The owner may claim the termination of lease or investment contract of the premises the debtor use to carry out his business for the non-payment of the debtor of the outstanding lease amount if default remains for at least 3 months from the date of the issuance of the precautionary conciliation commencement order. However, if the debtor initiates the payment of the outstanding lease amount during this period, the lease or investment contract shall remain effective for the agreed period in the contract, 3-78 The court may, upon the request of the owner of lessor, order the revocation of the lease or investment contract of the premises the debtor use to carry out his business if it has been confirmed that the guarantees granted to him for the payment of the outstanding lease amount or which have been granted to him after the date of the issuance of the precautionary conciliation commencement order are insufficient for the payment of lease amount during the 12 months after the issuance of that order.

Article (79) If it has been decided to revoke the lease or investment contract according to the provisions of article 76 or 78, the owner or lessor of such premises shall enjoy a privilege on the total of selling the movable assets of the debtor which are deemed as the furniture of the leased or invested premises. The owner or lessor of the premises may claim from the debtor the appropriate indemnity for the revocation or termination of the contract at an early date. The lawsuit shall be filed to claim that according to the legally determined procedures.

Article (80) The court may permit the debtor or supervisor of composition, as the case may be, to sell the movable assets of the debtor that are deemed the furniture of the leased or invested premises in case: (1) That this assets are damageable ,able to fall in price hastily or that holding them despite requires huge costs, or (2) selling them results in the default of the debtor to carry out his business, or (3) selling this assets shall not prejudice the sufficient decided guarantees in favor of the lessor or the owner.

Article (81) The supervisor of composition may, after receiving the court approval, lease the property used by the debtor to carry on his subcontract works even if the lease contract between the debtor and the owner or lessor states otherwise providing that act satisfies the benefit of of all creditors without prejudice to the owner or lessor of the property.

Article (82) If the debtor sells before the issuance of the commencement order of the composition procedures m1y owned by him and that m1y has been subject to the condition of non transferring of ownership, and that ownership transferred to the purchaser, the latter may require the validity and enforcement of the Sale contract.

Article (83) If the debtor purchased before the issuance of the commencement order of the composition m1y which has been subject to the condition of non transferring of ownership, and he transferred the ownership of such m1y to the debtor, the supervisor of composition may require the validity and

enforcement of the Sale contract. If the supervisor of composition knew that he transferred m1y may be endangered of loosing much of its value, he shall take any reasonable procedures to sell such m1y at the earliest.

Chapter Ten Releasing the composition procedures and requiring filing the claims Article (84) The court shall notify the supervisor of composition of the decision of his appointment at a maximum date of the next day of appointment, the supervisor of composition shall within 5 days from the date of notification register the issued decision of commencing the composition procedures at the commercial registry for the debtor issuing the abstract thereof accompanied by the invitation of the creditors to hold meeting in 1 newspaper or more as decided by the court. Furthermore, the supervisor of composition should send within such period invitations to the creditors known by him to submit their claims and the supporting documents thereof within a maximum period of 2 months from the date of invitation.

Article (85) 85-1 All creditors shall even if their debts do not constitute a case or guaranteed by a special insurance, or confirmed by decisive provisions, deliver to the supervisor of composition within the stipulated term in article (84) the documents of their debts accompanied by the statements of such debts and insurances, if any, with maturity days and their amounts calculated in the national currency based on the applied exchange rate at the date of the issuance of this decision.

85-2 If any of such debts are not finally determined, a creditor shall submit a report of his claims upon the information available to him stating that the submitted debt document is on estimated bases.

Article (86) A any creditor who receives an advance payment on the account of his claim from the debtor guarantors must discount what he receives from the claims he submits to the supervisor of composition, Thereupon, any guarantor may submit his claim to the supervisor of composition within the amount he pays to settle the debtor's debts.

Article (87) 87-1 The supervisor of composition may require the debtor who submitted his claims according to the provisions of the previous article submitting details of the debt or supplementing his documents or amending its amount or description. He may also require the confirmation of any claims by the auditor or accountant of the debtor.

87-2 the supervisor of composition shall set at the end of he period specified in article (84) a list of the creditors who requested to participate in the composition procedures stating the amount of each debt separately with the supporting documents and insurances, if any, and what he deems fit regarding the acceptance, amendment and rejection thereof as well as his suggestions regarding the payment thereof if possible. Furthermore, the supervisor of composition shall lodge such list at the court bureau within 50 days from the date of the issuance of the precautionary conciliation commencement order. When necessary, this period may be increased or decreased upon court order.

Article (88) The creditor who failed to submit the documents of his debts within the time specified in article (84) may not participate in the composition procedures unless the court shall be ascertained in an acceptable way thereby of: (1) That the relevant debtor was not responsible of failing to submit his documents on the specified time, or (2) That the debtor has intentionally omitted to list the claims of such debtor in the list that has been submitted to the court or the supervisor of composition according to the provisions of article (29) and (87).

Article (89) The claims of any creditor that was not submitted to the court according to the provisions of article (85) shall not be accepted and valid against the debtor or any of the guarantors who submitted guarantees as guarantors of the settlement of the plan of the composition.

Chapter Eleven Composition plan Article (90) Debtor shall, assisted by the supervisor of composition, lodge a copy of the composition plan at the bureau of the court during the supervision period. An attached statement with the plan project must be prepared by the supervisor of composition stating if there is possibility that the

creditors of the project accepts the plan project and if there is a benefit of inviting them o hold meeting for thr study of the project plan.

Article (91) 91-1 The plan project of the composition must state: (1) the possibility of retrieving the profits from the business of the debtor, and (2) The

provisions and conditions of settling any obligations, and (3) Any guarantees of good performance required from the debtor, if any, and (4) Any offer from third parties to by the whole or part of the debtor's business, if any, and (5) Statement of the activities of the debtor which must be discontinued or terminated.

91-2 The plan project of the composition must state the grace periods as well as the discounts of payment and transferring the debt to capital shares of any project (if possible), in addition to differential treatment of the creditors if it is justifiable.

91-3 The court may allow that the plan project of the composition states the merger, establishment, release, sale or replacement of any guarantees whenever it deemed that necessary to perform the plan project.

Article (92) The period of the plan project of the composition shall not exceed 5 years.

Article (93) The court shall review the plan project of the composition and satisfy itself that it has been suggested in good will without prejudicing the creditors inequitably.

Article (94) The court may require the debtor to assist the supervisor of composition to insert any necessary amendments on the plan project of the composition to confirm the adherence of the provisions of article (93) during the period determined by the court. If the court has been

convinced of the recommendation of the supervisor of composition issued according to the provisions of article (90) that the plan complied with the provisions of article (93) and that all the claims has been accepted by the court according to the provisions of article 87. The court shall order the supervisor of composition to provide all the creditors who the court approved their claims of a copy of the plan project of the composition. Moreover, the court shall invite all the creditors to meet to vote for the plan project of the composition at the time and place determined by the court by a notification of at least 21 days. The release of the invitation to the meeting shall be released in 1 or more newspaper as determined by the court.

Article (95) 95-1 The court shall issue, after deliberation with the supervisor of composition, a decision of establishing a creditors' committee or more including the owners of preferred mortgaged or privileged debts as well as the owners of the common debts, if any, for the purposes of voting in the meetings which are held according to the article (94). The court may have repartition of any committee of such, if the necessity of differentiating between the rights determined to the creditors by plan project of the composition, became clear to it.

95-2 The holders of any shares, bonds or other securities shall be combined in 1 separate committee or more according to what the court adjudicates upon the recommendation of the supervisor of composition.

Article (96) The right of voting is confined on the creditors who submitted a list of their debts and not rejected by the supervisor of composition. The court

may permit the creditors whose claim is rejected in voting, and it shall determine in its decision the conditions and limits of such permission.

Article (97 Notwithstanding the provisions of article (95), the creditors of the debtor shall be arranged in 1 committee if the total annual income is less than AED five millions during the financial year preceding the

commencement of the composition procedures. The Minister of Finance may issue a decision to decrease or increase the amount of the debts stipulated in this paragraph.

Article (98) The plan project of the composition of bankruptcy shall not be confirmed without the approval of the majority of creditors whose debts have been accepted and who hold the value of two Thirds from such debts at least. This majority shall not include the creditors who failed to participate in voting and their debts shall not be accounted as well.

Article (99) The members of the committee may suggest in the meetings held to discuss the plan project of the composition the insertion of any amendments on the plan, the voting of the committee that the amendment suggestion is raised before as well as any other committee affected with he suggested amendment on such amendments The court also may invite the creditors to extra voting meetings on the suggested amendments, In addition, the court shall decide the acceptance or rejection of any suggested amendments as introduction to confirm the plan project of the composition according to the provisions of article (102).

Article (100) The creditor who shall accept the plan project of the composition shall deem all of his claims without change which claims the project states to pay all of them and shall be deemed that he accepts the plan; In this case, he shall not participate in any voting.

Article (101) If the plan project of the composition states the amendment of on the company's capital that the debtor holds part of its interests of shares the court should decide as the case may be the necessity of inviting the remaining inerested owners or the other shareholders to vote for the suggested amendment.

Chapter Twelve Confirming the plan of composition Article (102) 102-1 The court shall issue its decision of confirming the plan of composition of bankruptcy if all the conditions stated in the previous articles are available.

102-2 The confirmed plan of composition shall be according to the provisions of paragraph (102-1) complying all creditors including everybody enjoyed the right of voting in the meetings of the creditors' committee or committees.

102-3 The plan of composition shall not affect decided priority right of preferred mortgaged or privileged debts as stated in section seven from this law or any other legislation.

Article (103) The court may order the ineffectiveness of any claim listed in the plan or adjudicate to dismiss or reject.

Article (104) The court may order near dates for the payment of the entitlement of any the creditors if such dates extended after the specified date of the end of executing the plan of the composition. Also, the court may order near dates for the payment of the entitlement of the creditor who accepts the reduction of his debt.

Article (105) If the court rejected the confirmation of the plan of the composition, it may order the commencement of bankruptcy procedures according to the provisions of article 127 paragraph 4 if the debtor still in default of payment or in the case of excessive indebtedness.

Article (106) 106-1 The supervisor of composition must ascertain the sale of any assets encumbered with guarantee it is decided to be sold by the plan of the composition at the best price can be obtained during the circumstances of the market at the time of sale, Furthermore, the supervisor of composition shall deposit in the trust account a part of sales income that represents the value of the claims secured with the assets to be sold.

106-2 When the plan of the composition is just confirmed, the supervisor of composition shall pay to all creditors whose debts are secured by the assets to be sold from the sales income of such assets subject to preference.

106-3 The court may order the payment of interim payments fulfilling all or some creditors' debts secured by the assets of the debtor, provided that the beneficiary submits from such payment a financial guarantee at the value of the amount paid to him issued from a bank licensed to work in the state.

Article (107) The debtor may offer to his creditors an alternative guarantee equal to the current guarantee. In case the creditors accept such offer, then the court may order despite the replacement of guarantee if it became clear to it that the alternative guarantee is equal to the current guarantee.

Article (108) If the court decided that any of the debtor's assets is deemed material for the continuity of his business it may order the prohibition of disposing of such assets without obtaining a prior permission thereof for a maximum period of the composition plan. Every person who has a benefit may submit an application to the court regarding the invalidity of any disposal in breach of the court's decision, Moreover, the court may decide the invalidity of such disposal provided that application to be submitted within 3 years from the date of court's decision of the date of releasing composition plan, whichever is later.

Article (109) The supervisor of composition must perform within 10 days that after the confirmation of Composition plan:

109-1 Release the decision in 1 newspaper or more as decided by the court provided that it shall include a summary of the most important condition of composition, the name of the debtor, address, commercial registry No. and the date of composition confirmation decision, and

109-2 Register the decision in the commercial registry for the debtor.

Article (110) 110-1 The court shall appoint supervisor of composition who works as supervisor on composition plan during the execution period thereof; he shall also comply with supervising the progress of plan and informing the court of any breach to execute thereof. However, the supervisor may obtain any necessary data to perform his tasks. The supervisor of the plan should issue a report at the end of every 6 3 months regarding the progress of plan execution as well apply a copy of the report to the court and debtors.

110-2 If the supervisor deemed it necessary to amend composition plan which amendments would change the rights or duties of any party thereof, he should submit an application in that regard to the court. On the other hand, the court should, before deciding on the application, hear the statements of all the attendees of plan parties by a notification of at least 21 days. The court shall issue its decision of permitting amendment either overally, partially of reject it.

Article (111) 111-1 When all the obligations stated in the composition plan is just performed, the court shall decide upon a request from the supervisor of

the plan or the debtor or any interested part that the plan has been performed.

Chapter Thirteen Invalidity or termination of the composition plan Article (112) The composition shall be invalid if it is issued after its confirmation a judgment convicts the debtor of any offense stated in paragraph (438-1). The invalidity of composition must be required during 6 months from the initiation of investigation in the crime otherwise the request is rejected. In all cases, the request of the invalidity of composition shall not be

accepted if it has been submitted two years after the date of the confirmation decision of composition.

Article (113) The invalidity of composition shall result in the discharge of guarantor who guaranteed the execution of all or some of its conditions.

Article (114) If an investigation with the debtor initiates regarding any offense stated in paragraph (438-1), after the confirmation of composition, or a criminal lawsuit is filed against him regarding such offences, after the confirmation of composition, the court which has adjudicated the

invalidity of composition may order upon the order of any interested party taking all measures it deems fit to reserve the assets of the debtor, such measures shall be canceled by law if it is decided to reserve the investigation of the judgment of the absolution of the debtor.

Article (115)

If the debtor fails to perform the conditions of

composition, every

interested party may require the revocation thereof from the court confirmed it. The result of the revocation of composition shall not be the discharge of guarantor who guaranteed the automatical performance of its conditions, and he shall be authorized to attend the session in which the revocation request is decided on.

Article (116) The court may order, regarding the judgment issued of the invalidity of composition or revocation thereof, of sealing the assets of the debtor authorizing the supervisor of composition during 7 days from the date of the invalidity of composition or revocation thereof to issue a summary of this judgment in 1 newspaper or more as decided by the court. Furthermore, the supervisor of composition shall carry out a supplementary inventory and setting of extra budget. The supervisor of composition shall invite the entire new debtor to submit documents of their debts in order to collect subject to debts collection procedures. Hereby, the debts shall be collected immediately without the collection of the previously accepted debts; nevertheless, the debts overally paid previously must be excluded with the reduction of the debts partially paid.

Article (117) The acts of the debtor, after the issuance of the decision of composition confirmation and before the invalidity or revocation thereof shall be effective against the creditors, and they may not require the invalidity thereof except upon the rules of the Civil Proceedings Law regarding the lawsuit of the invalidity of disposition, this lawsuit shall not be heard two years after the invalidity or revocation of composition. The creditors

shall not be obliged to return any assets they received from the debtor as payments against their debts before the invalidity of revocation of composition unless the court adjudicates otherwise when hearing the lawsuit of the invalidity of disposal which would be filed by any interested party, thus, this lawsuit shall not be heard two years after the invalidity or revocation of composition.

Article (118) The debts of the creditors shall be returned after the invalidity or revocation of composition if they have not received any thing from the amount which has been determined to them in composition, Otherwise, their original debts must be reduced in a rate equals the amounts they have received.

Article (119) The court shall issue an order to commence the bankruptcy procedures according to the provisions of the fourth section at the time of the invalidity or revocation of composition plan according to the provisions of this chapter.

Article (120) The court may terminate the procedures of composition upon a request from the debtor in case of the baseless of the commencement of composition procedures of to transfer the composition procedures into bankruptcy procedures according to the provisions of section four. Except that, the composition procedures shall be terminated when the execution of composition plan ends.

Chapter Fourteen

Pending the obligation of submitting bankruptcy application Article (121) The application of the debtor to enter into the composition procedures shall result in pending the obligation of submitting bankruptcy application by the debtor according to the provisions of section four within the period between submitting the application and the issuance of an order from the court to commence the composition procedures or the dismissal of the application. This obligation shall continue pending within the period of composition procedures.

Article (122) Notwithstanding the abovementi1d, the court may order the transfer of the composition procedures into bankruptcy procedures if it has been confirmed that the debtor was in default of payment or in the case of excessive indebtedness at the date of the commencement of composition procedures.

Chapter Fifteen Bankruptcy procedures Article (123) The court may by itself or upon a request from the supervisor of composition transfer of the composition procedures into bankruptcy procedures or order upon recommendation from the supervisor of composition to liquidate the debtor's assets according to the provisions of section four if it is impossible to apply composition plan even if the

termination of composition would result in the default of payment or in the case of excessive indebtedness.

Article (124)

The issuance of the court decision may result in the transfer of the composition procedures into bankruptcy procedures till the end of supervision period and the termination of supervisor of composition appointment unless the court decides otherwise.

Article (125) If the debtor has been defaulted of payment or in the case of excessive indebtedness during the execution of composition plan the court which approved composition plan shall order the termination of that plan and the commencement of bankruptcy procedures.

Article (126) If the validity or termination of composition plan and the commencement of bankruptcy procedures has been announced the creditors who are subject to the plan shall be discharged of any obligation regarding resubmitting their claims. However, the claims which are submitted in composition plan shall be automatically deemed submitted in bankruptcy procedures. For he purposes of this article, any amounts previously received by the creditors shall be discounted.

Section Four Bankruptcy Chapter 1 Persons authorized to request bankruptcy Part 1 Submitting the application by the debtor and the decision of the court Article (127) The procedures of bankruptcy stated in this section aims to assist the debtor to apply the reconstruction plan of his business where possible or to assist him in the performance of his obligations by the liquidation of his assets. Article (128) Every person referred to in paragraph (1-2) of this law may require the announcement of his bankruptcy if he defaults in the payment at maturity days thereof because of the confusion in his financial position and instability of his credit or if he is in case of excessive indebtedness.

128-2 Every person referred to in paragraph (1-2) of this law may require the announcement of his bankruptcy if he continues to default in the payment of his debts at maturity days or his excessive indebtedness continues 45 days.

128-3 The court may by itself transfer the composition procedures into bankruptcy procedures according to the provisions of section 3 if he is in default of the payment of his debts at maturity days thereof because of the confusion in his financial position and instability of his credit or if he is in case of excessive indebtedness.

128-4 If the debtor is a regulated entity, the competent regulatory authority to which the debtor is subject may require the announcement of bankruptcy provided that the authority is able to provide an accepted evidence to the court that the debtor is defaulted in the payment of his debts at maturity days thereof because of the confusion in his financial position and instability of his credit or if he is in case of excessive indebtedness and that the commencement of bankruptcy serves the public interest. In all cases, the competent executive authority must be notified about the application of debtor's bankruptcy declaration subject to the supervision of such authority. Article (129) Either the debtor is deemed in the state of payment suspension for purposes of Article (128) if he fails to settle any due payment; yet, if he withdraws his application by settling a due payment before the commencement of bankruptcy procedures, in such case he will not be deemed in the state of payment suspension regarding that due payment. Article (130) Either the debtor is deemed in the state of excess excessive indebtedness for purposes of Article (128) if proved that his assets will not cover at any time his payable liabilities. Article (131) 131-1 If the debtor becomes in the state of excessive indebtedness {excess of indebtedness} and the party representing him believed that he will be able to settle his due debts during the current and next financial year, the debtor's application of his bankruptcy declaration will be deferred as per provisions of Article (128), provided that such party will provide the data, information and proofs supporting its opinion which must convince the court.

131-2 The party representing a company incorporated as per the provisions of Commercial Companies Law whose annual income exceeds (five million) dirham and has more than fifty (one hundred) employees shall, immediately after being informed that the concerned company is in a state of excess excessive indebtedness, prepare a work plan as well as a statement of profits and losses to help the company . reach a decision on its ability to settle its payable liabilities during the current and following financial year. Article (132) The application of bankruptcy declaration shall be included in a report submitted by applicant to the court in which he states the reasons of payment suspension and attaches to the report the following documents: 132-1 A memo containing a brief description of his economic and financial status as well as detailed information about his employees; 132-2 Any documents supporting the request submission; 132-3 A verified copy of his trade or professional license and his commercial register issued by the competent department in the Emirate; 132-4 A copy of the commercial books or financial data related to his business during the financial year prior to the request submission; 132-5 A report clarifying the expectations of debtor's money as well as the expectations of profit and losses for the next (twelve) months after submitting the application; 132-6 A list of the debtor's creditors including their addresses, their expected due sums and the expected debt warranties signed on the debtor's assets, if any; and 132-7 A detailed statement of the debtor's moveable and immoveable assets and the approximate value of such assets at the date of submitting the application. Article (133)

In regard with a company incorporated as per the provisions of Commercial Companies Law, in addition to the aforementioned, the following must be attached to the application: 133-1 A copy of the competent body decision at the company on authorizing applicant to submit an application of bankruptcy declaration; and 133-2 A copy of the company's relevant incorporation documents duly presented to the competent department in the emirate where the said company was incorporated. Section 2 Application Submitted by Creditor Article (134) If no current bankruptcy procedures exist, either the creditor indebted with {ten thousand} dirham or more may present the bankruptcy application of his debtor to the court if the creditor has previously notified the debtor in writing to settle the debt; yet, the debtor failed to do so within no less than forty five days after the debtor was notified of the claim, or if the creditor obtained a judgment from a competent court effecting the judgment of the debt court but the debtor did pay it. The Ministry of Finance may issue a decision to reduce or increase the debt sum provided in this clause. Article (135) The court shall not issue an order to commence the bankruptcy procedures based on the creditor's application unless it was convinced that the debt is due and was not paid or settled after the application date or if the debt was of the type which the debtor can pay by its due date. Article (136) As for any joint company incorporated as per the provisions of Companies Law, any creditor may request the commencement of

bankruptcy procedures against one partner or more subject to any restrictions provided by any law. Article (137) Article (136) The application submitted by the creditor to court shall include the following: 137-1 136-1 A copy of (the written notice) obliging him to pay the due debt or a copy of the decision of the competent executive court obliging the debtor to implement the judgment of the competent debt court; and 137-2136-2 Any data related to the debt including the debt value and any available guarantees. Article (138) Article (137) The application of bankruptcy declaration shall be submitted to the court, and the court bureau writes a minute stating the receipt of documents presented by applicant; yet if the latter failed to provide some data or required documents as per the provisions of Article (132), Article (133), or Article (136), he should mention the reasons in his request. Article (139) Article (138) The court notifies the debtor regarding any application it receives from the creditor, the competent executive authority or any other department related to his bankruptcy declaration, the court shall further order the debtor to provide any documents or data required as per the provisions of Article (132) and Article (133). Chapter 2 Precautionary Measures & Complementary Procedures Article (140) Article (139) The court reviewing the bankruptcy application may order undertaking the measures required for preserving or managing the debtor's money, including the stamp of debtor's workplace until the application is settled.

The court may order such procedures to remain valid or order any additional precautionary measures to be made after the commencement of bankruptcy declaration procedures. Article (141) Article (140) Despite any documents submitted by the debtor or any other party as per the provisions of Article (132), Article (133) or Article (136), as required, the court, based on its discern, may order the assignment of any of the experts registered in the experts roll; besides, the court states in the same decision the tasks and fees of such expert. The assigned expert shall prepare a report on the debtor's economic and financial status as well as his opinion on the availability of the necessary conditions to commence the procedures of bankruptcy declaration; he should also state whether the debtor's assets are sufficient or not to cover the costs of bankruptcy declaration procedures. Article (142) Article (141) The court may request the committee to provide all the documents and date related to the procedures of financial restructuring as well as those related to the composition of the debtor, if any. The court shall further keep the confidentiality of any of these documents or data about the debtor provided by any of the creditor to the committee and shall not disclose them without the creditor's approval. Chapter 3 Application Settlement Article (143) Article (142) Subject to the provisions of Article (143), the court settles the application of bankruptcy declaration in summary and orders in the first session defining a date of judgment delivery; it may also order the delay of the judgment delivery to a subsequent date in no more than twenty one days to enable the applicant providing any additional data or documents to

support the declaration application or for any other reasons specified by court. If it was proved to the court the availability of necessary conditions of bankruptcy declaration, it issues a judgment for bankruptcy declaration and the issued judgment will accordingly establish the bankruptcy state and the commencement of its procedures. The court may order all or some of the sessions in the consultancy room. Article (144) Article (143) The court may issue, during the session mentioned in Article (142), a judgment on commencing the procedures of simple liquidation related to the debtor in any of the following cases: (a) If the debtor's assets did not include immoveable estates (which value exceeds one million dirham; dirham); (b) If the debtor did not use more than (five) employees; and (c) If the total annual income gained by the debtor during the financial year prior to the application submission does not exceed (five thousand dirham). 144-2143-2 The court shall not issue an order on commencing the procedures of simple liquidation unless it was convinced, based on the information provided by the applicant as per the provisions of Article (132), Article (133) or Article (136), and according to the recommendation of any assigned expert as per the provisions of Article (140), that the restructuring of the debtor's business are probably not possible. 144- 3143-3 If the court issued an order to commence the procedures of simple liquidation as per the said provisions, the provisions of Chapter nineteen shall be implemented. 144-4 143-4 Despite the provisions of Articles from (143-1) to (1433), if the total annual income gained by the debtor for the financial

year prior to application submission does not exceed (five thousand dirham), and the debtor does not use more than five employees, the court may impose time limits or amend any of the procedures specified in this section to ensure handling the state as soon as possible. Article (145) Article (144) No appeals may be filed against the judgments issued by court during the procedures of bankruptcy declaration unless permitted by law or if the court which issued that judgment was incompetent to issue it. The appeal is subject to the provisions provided in section eleven. Article (146) Article (145) The court should reject the application of bankruptcy declaration in the following cases: 146-1 145-1 If the requester of bankruptcy declaration failed to provide the documents and data provided in Article (132) or Article (133) or they were provided incomplete without any justification, 146-2 145-2 If it was proved that applicant acts in bad intention or that the application misuses the litigation procedures; or 146-3 145-3 If the procedures of bankruptcy declaration are

inappropriate for the debtor as per the data and documents submitted with the application or based on the report prepared by the expert pursuant to the provisions of Article (140). Article (147) Article (146) 147-1 146-1The court may request any party who has information related to the application of bankruptcy declaration to attend the session; such party should provide the court with any reasonable information that might be requested by the court. 147-2 146-2 The court may order the joinder of one natural or artificial party or more in the procedures of bankruptcy declaration according to

the conditions that provide proper and efficient protection of creditors if the court deemed that the commencement of separate bankruptcy procedures regarding such parties or entities will not be practical or useful in regard to cost. 147-3 146-3 The court orders the suspension of bankruptcy declaration procedures or rejects the application of bankruptcy declaration submitted to it (as required) if it found that the debtor's assets are not enough to cover the costs of the procedures of bankruptcy declaration unless the Public Treasury agreed, based on the application of the bankruptcy declaration requester, to cover the deficiency or fund all the costs, as required. 147-4 146-4 Any decision on suspending the procedures of bankruptcy declaration or judging to reject the application as per the provisions of Article (145) must include an order to liquidate the debtor's business. This state is not subject to the provisions provided in Article (180) to Article (220). Chapter 4 Assignment of Bankruptcy Supervisor & Supervisor Judgment Article (148) Article (147) If the court decided to accept the application of bankruptcy declaration, it must state in its decision the assignment of one bankruptcy supervisor or more from the experts registered in the experts roll. The requester of bankruptcy declaration may nominate a specific bankruptcy supervisor from the experts roll to be assigned. When the court deems the necessity of assigning one or more judges to supervise the bankruptcy procedures, for purposes of administering such procedures or because the degree and/or complexity of the state demands so; the court shall, based on its own free discretion, assign one or more judges to supervise the bankruptcy.

The court defines the conditions of such assignment, including the nature and degree of the responsibilities delegated by court to the supervisor judge. Article (149) Article (148) The court may assign more than one bankruptcy supervisor provided that it will not exceed three supervisors at the same time. The bankruptcy supervisors in this case shall work jointly or individually as per the instructions issued by court in this regard. Article (150) Article (149) 150-1 149-1 The court may, if required, after consulting the bankruptcy supervisor, delegate an expert to help the bankruptcy supervisor to perform his tasks provided that such expert must comply with the instructions stated in his assignment decision. 150-2 149-2 The bankruptcy supervisor and any expert are assigned from the parties registered in the experts roll. The court may order the assignment of any expert not registered in the experts roll if such roll did not include the expert who has the expertise required to be done. The following parties may not be assigned as bankruptcy supervisors or experts: (1) the creditor of the debtor, his wife, brother-in-law or fourth-degree relative, (2) any party formerly convicted of any crime or felony of theft, embezzlement, breach, or any of the bankruptcy crimes provided in this law or perjury, (3) Any party who was, during the two previous years of the bankruptcy declaration, his partner, employee, accountant or representative. Article (151) Article (150) Each of the bankruptcy supervisor and any expert are paid in return for the tasks they provide as well as the reasonable expenses incurred from the debtor's assets known by the court. Yet, if the debtor has no known assets or such assets were not sufficient to settle the fees and expenses,

the bankruptcy supervisor or expert may submit an application to the Public Treasury to receive his entitlements. If the Public Treasury rejected such request, the court shall order the suspension of the procedures of bankruptcy declaration or reject them if the procedure requester failed to deposit at the court's treasury on the set date the sum sufficient to cover all these fees and expense. Article (152) Article (151) The court may replace the bankruptcy supervisor and any expert or assign additional bankruptcy supervisors or experts as deemed necessary, either the creditor may also request the court to replace the bankruptcy supervisor or expert if proved that the continuous assignment of current bankruptcy supervisor or expert (as required) might damage the interests of all creditors. Chapter 5 Assignment of Observers Article (153) Article (152) The court may assign no more than five observers from the creditors requesting to be assigned as observers to supervise the procedures of bankruptcy. Article (154) Article (153) The observers are assigned and they undertake their tasks subject to the provisions of Chapter five of Section three in this law. Chapter 6 Management of Debtor's Business during the Procedures of Bankruptcy Declaration Article (155) Article (154) The bankruptcy supervisor should undertake, under the supervision of the court, the commencement of bankruptcy declaration procedures, following them in summary as well as ensuring that he carries out all

procedures and undertakes all measures which secure the interest of debtor and creditors alike. Article (156) Article (155) The bankruptcy supervisor shall manage the debtor's business during the bankruptcy procedures and work as a hired representative in the name and on behalf of the debtor. Taking into consideration the provisions on the rights and duties of the bankruptcy supervisor provided in this section, the bankruptcy supervisor will be subject, during his performance of his duties, to the same obligations of the hired representative as per the terms of Civil Transactions Law. Article (157) Article (156) The court may order the bankruptcy supervisor to receive and keep all the debtor's correspondences and review them during the commencement of bankruptcy declaration procedures; the bankruptcy supervisor should enable the debtor to examine such correspondences. Article (158) Article (157) The bankruptcy supervisor should immediately deliver the debtor any call issued by the court or any notice about its orders or other correspondences of personal nature, and the debtor's correspondences shall not be subject to Article (156) but rather to the rules of professional confidentiality. Article (159) Article (158) Any sum received by the bankruptcy supervisor, during the performance of his duties within the period of one day, must be collected in a deposit account at the bank determined by the court in no more than two working days from the date of receiving such sum. If the bankruptcy supervisor failed to deposit any sums delivered to be deposited without any justification accepted by court, the latter obligates him to pay a daily

interest determined by the court provided that it will not exceed (12%) per annum on all sums which remain not deposited. Article (160) Article (159) 160-1 159-1 The debtor's assets will be inventoried based on the instructions of the bankruptcy supervisor and the inventory must include the details of any guarantee rights and a statement of any assets owned by the debtor that might form a subject of a claim by a third party. 160-2 159-2 If the debtor is a natural party, he must provide the necessary assistance to the bankruptcy supervisor to determine the sums retained by the debtor to cover the debtor's needs and those he supports to maintain a reasonable standard of living for them. The bankruptcy supervisor will define the reasonable sum to cover the debtor's needs and those he supports. The debtor may file a complaint in this regard before the court; the court shall issue its decision in the consultation room in summary and its decision in this regard will be final. Such money and any retirement rights whether obtained before or after the date of the commencement order are considered separate from the bankruptcy procedures and they remain owned by the debtor. The bankruptcy supervisor should consider, when determining such assets, the statements provided by the debtor to the court as per the provisions of Article (132). Article (161) Article (160) 161-1 160-1 Taking into consideration the bankruptcy procedures, the debtor's spouse should determine the funds she owns in the inventory pursuant to any rules provided in the applicable Marriage Law, the wife must also submit any request to recover any moveable or immoveable funds to the court within (three) months from the date of publishing the commencement order of bankruptcy declaration procedures as per the terms of Article (174).

161-2 160-2 The wife may recover her moveable and immoveable funds from the assets of the debtor if she proved to the court her unclaimed title of these funds. 161-3 160-3 The bankruptcy supervisor may submit an application to obtain a permit from the court to include in the bankruptcy declaration procedures any assets purchased by the debtor's wife from the money of the debtor during the three years period prior to the submission of bankruptcy declaration. Article (162) Article (161) The court provides the bankruptcy supervisor with any information it received about the debtor before his assignment. The debtor provides the bankruptcy supervisor with any additional details not notified to the court whether about his creditors or debts as well as the details of any underexecution contracts where he is a party. The debtor should also notify the bankruptcy supervisor of any suspended or ongoing legal procedures where he is a party. The debtor shall further provide the information as per this article within the time limit defined by the bankruptcy supervisor. Article (163) Article (162) Without prejudice to the public order, the bankruptcy supervisor may obtain any information related to the debtor's funds from any authorities, public institutions or financial firms. Each party who has information about the debtor's funds or business shall commit to provide the bankruptcy supervisor the reasonable information he might require including any documents or account books of the debtor. The disclosure of such information is not considered pursuant to the provisions of this article a breach of any legal or consensual commitment to keep this information confidential. The bankruptcy supervisor should keep the confidentiality of any information related to the debtor if its

disclosure will damage the value of the debtor's assets and he should not reveal them outside the frame of bankruptcy declaration procedures. Article (164) Article (163) The bankruptcy supervisor shall prepare a record where he writes the debtor's creditors he knows based on the information given to him as per the provisions of Article (132) and Article (161). The bankruptcy supervisor shall provide the court with a copy of the registers of that record. The registers must state the address of each creditor and his claimed sum, as well as marking the creditors who have secured debts with the details of the securities decided against each and an estimation of the expected value of these securities when applying them. He must further state in the record any setoff application that may be submitted as per the provisions of Section six. Chapter 7 Deprivation of Management & Disposition Right Article (165) Article (164) As the commencement order of bankruptcy declaration is issued, the debtor will be deprived of the power to manage his business and the right to dispose his assets and stocks until the procedures of bankruptcy declaration are over. The court shall judge based on the request of any stakeholder by the invalidity of the debtor's waiver of any of his funds without the approval of the bankruptcy supervisor if such waiver was made after the submission of the bankruptcy declaration application; the court may also order any third party to return any assets owned by the debtor or issue any other order it deems proper. The court at any case should, before issuing its judgment, hear the statements of the parties related to the disposition before deciding the invalidity or validity of such disposition. Article (166) Article (165)

166-1 165-1 No security rights granted by the debtor after the submission of the application of bankruptcy declaration will be deemed valid unless they are for purposes of obtaining a new finance as per the provisions of Article (184), or unless the court formerly permitted the grant such rights. 166-2 165-2 The court may, based on the application of bankruptcy supervisor, order at any time during the bankruptcy procedures, the partial suspension of carrying out the commercial operations related to the debtor. Article (167) Article (166) The bankruptcy supervisor may request during the bankruptcy procedures the debtor to carry out all works necessary for maintaining the business interests of the debtor; he may also ask the debtor to fulfill the valid contracts where the debtor is a party. The bankruptcy supervisor himself may perform such works, including the exercise of all powers granted to the supervisor of composition in the composition procedures as per the provisions of Section three. Chapter 8 Suspension of Interest & Legal Procedures Article (168) Article (167) During the period of the bankruptcy declaration procedures, no lawsuits may be filed or followed or any legal or judicial procedures may be undertaken against the debtor in cases other than those provided in this law, the commencement order of bankruptcy procedures will cause the suspension of procedures of legal execution against the debtor's assets. With consideration to the provisions of Article (231), the creditors who has debts secured by senior or regular mortgage are not allowed to execute their securities against the debtor without the court's prior approval on that. Article (169) Article (168)

The commencement order of bankruptcy declaration shall suspend the execution of the following: 169-1 168-1 The validity of legal and contractual interest including the due interest or compensation payable for payment delay. 169-2 168-2 Any lawsuits or legal or judicial procedures against any party who granted personal security or transferred his assets to secure the debtor's liabilities, until the court approves the plan of restructuring the debtor's business or issue an order to liquidate the assets of the debtor. The court may, when approving the plan of restructuring, order the extension of this suspension for (two years) in maximum. Chapter 9 Fulfillment of Liabilities & Contract Article (170) Article (169) 170-1 169-1 The commencement order of bankruptcy procedures shall not cause the lapse of any time limit agreed upon to fulfill the debt of the debtor, and nullify any contractual text stipulates otherwise. 170-2 169-2 Despite of any contradictory legal or consensual text, (without prejudice to the provisions of Article (164)), the commencement of bankruptcy procedures shall not cause the vacation or termination of any valid contract between the debtor and a third party; besides, the party contracting with the debtor should fulfill all his contractual obligations unless he has decided, before the issue date of commencement order, not to execute the said as a result of the debtor's failure to fulfill his obligations. 170-3 169-3 The bankruptcy supervisor may, during the procedures of bankruptcy declaration, request the party contracted with the debtor to execute any valid contracts in return for the debtor's fulfillment of his obligations. The bankruptcy failure to fulfill the debtor's obligations shall

not cause the indemnity claim for the damages incurred from the nonexecution. 170-4 169-4 The contract automatically terminates between the debtor and the third party, if the party contracted with the debtor sends an (official) notice to the bankruptcy supervisor and such notice remains not replied for (one) month from the date of receiving that notice. The contract automatically terminates if the bankruptcy supervisor sends an (official) notice to the party contracted with the debtor requesting a statement of the reasons for keeping the contract valid, and such notice remains not replied for (one) month from the date of receiving that notice. 170-5 169-5 The bankruptcy supervisor should, when requesting the execution of any contract, ensure that the debtor has the funds required for fulfilling his obligations provided in this contract. The bankruptcy supervisor should also settle any sum payable by the debtor to his contracting party by virtue of a valid contract unless the contracting party gives the debtor a term for settlement. 170-6 169-6 The court may, based on the request of bankruptcy supervisor, terminate any valid contract where the debtor is a party if required to enable the debtor exercises his works or if such termination incurs an interest for all the debtor's creditors and does not grossly prejudice the interest of the party contracting with the debtor. 170-7 169-7 If the debtor was a tenant or investor of the property where he exercises his business, the judgment issued for bankruptcy declaration shall not terminate the lease or investment contract or cancel the rental for the remaining period because it lapsed, each provision stipulating otherwise is deemed invalid. Article (171) Article (170) In addition to the provisions of Clause (169-7):

171-1 170-1 The bankruptcy supervisor may terminate the lease or investment contract of the property used by the debtor to exercise his works before the lapse of the term agreed upon in the contract. The notice period for contract termination is (three) months unless the contract stipulated a shorter period; 171-2 170-2 The owner may request the termination the lease or investment contract of the property used by the debtor to exercise his works if the debtor failed to settle the due rental value and such failure lasted for at least (three) months from the issue date of commencing the bankruptcy declaration procedures. Yet, if the debtor settled such due payments during this period, the lease or investment contract will remain valid for the period agreed upon in the contract; and 171-3 170-3 The court may, based on the request of the owner or lessor, order the termination the lease or investment contract of the property used by the debtor to exercise his works if he proved that the securities granted to him to pay the due rental value or those received after the issue date of commencement order of bankruptcy declaration procedures are not sufficient to fulfill the said during the twelve-month period after the issue of that order. Article (172) Article (171) 172-1 171-1 If it is decided to terminate or vacate the lease or investment contract as per the provisions of Clause (169-6) or Article (170), the owner or lessor of such property shall have the privilege to receive the money of selling the movable assets of the debtor which are deemed as furniture for the leased or invested property. The owner or lessor of such property may request the debtor to pay the proper indemnity for contract termination or vacation before the lapse of its term. The lawsuit of such claim is filed as per the procedures provided by law.

172-2 171-2 The court may permit the debtor or bankruptcy supervisor, as required, to sell the moveable assets of the debtor which are considered as furniture for the leased or invested property if: (1) these assets were subject to wear or decrease of its value and its maintenance requires considerable costs; or (2) its sale will not cause the debtor's failure to exercise his business or (3) The sale of these assets will not prejudice the sufficient securities decided for the lessor or the owner. 172-3 171-3 The bankruptcy supervisor may, after obtaining the court's approval, lease the property occupied by the debtor to practice his subcontract works even if the lease between the debtor and the owner or the lessor stipulated otherwise provided that such act will profit all creditors and will not cause losses for the owner or property lessor. Article (173) Article (172) The court may order the termination of the valid employment contract between the debtor who declared his bankruptcy and his employees regardless of the provisions provided in such contracts. Article (174) Article (173) 174-1 173-1 If the debtor sold whosoever any funds owned by him and such money was subject to the condition of no-transfer of property then the possession of these funds was transferred to the purchaser before ordering the commencement of bankruptcy declaration procedures, the purchaser may request the debtor to fulfill his obligation to transfer the property. 174-2 173-2 If the debtor purchased any funds owned by him and such money was subject to the condition of no-transfer of property then the possession of these funds was transferred to the debtor before ordering the commencement of bankruptcy declaration procedures, the bankruptcy supervisor may request the seller to execute the transfer of property to the debtor. If the bankruptcy supervisor knew that the transferred funds might be subject to a big reduction in their value, he should undertake any reasonable procedures to sell such funds without delay. Chapter 10

Publication of Bankruptcy Procedures & Application for Providing Information Article (175) Article (174) The court notifies the bankruptcy supervisor of the decision issued to assign him in a maximum time of the day following the decision issue; the bankruptcy supervisor shall, within (five) days from the date of his assignment notice, register the decision issued on commencing the procedures of bankruptcy at the Commercial Registry of the debtor then publish it as well as the invitation for the creditors to the meeting in one newspaper or more as decided by court. The supervisor should send within this period an invitation to the creditors known to him to address their claims and documents supporting their debts in no less than two (weeks) and no more than (three) months from the invitation date. Article (176) Article (175) All creditors, even whose debts are not liquidated, secured by special insurances or immoveable as per decisive provisions, should deliver the bankruptcy supervisor within the time limit set in the invitation addressed as per the provisions of Article (174), the documents of their debts as well as the statements of such debts, their insurances if any, due dates, and values estimated in the national currency at the current rate of exchange on the issue date of the bankruptcy declaration judgment. Article (177) Article (176) Either the creditor who receives received an in advance payment on account of his claim from the debtor's guarantors should deduct the amount he received from any claim submitted to the bankruptcy supervisor. Any of these guarantors may submit his claim within the payment paid to settle the debtor's debt. Article (178) Article (177) The bankruptcy supervisor may request either the creditor who submitted his claims as per the previous provisions to provide clarifications on the debt, complete its documents or amend its value or description. He may further request the approval of any claims from the auditor or the

creditor's accountant. The bankruptcy supervisor prepares, after the lapse of the date provided in Article (174), a list of the names of creditors who submitted their claims to the bankruptcy supervisor and states the value of each debt, the supporting documents and insurances included if any in addition to his opinion of its acceptance, modification or rejection as well as his suggestions on the method of payment if possible. The bankruptcy supervisor should deposit this list at the court within (fifty) days from the issue date of commencing the procedures of bankruptcy declaration, and when necessary the period may be extended or shortened as per a decision issued by the court. Article (179) Article (178) The creditor who did not provide on date the documents of his debts provided in Article (174) may not participate in the procedures of bankruptcy declaration unless he proved to the court in a satisfactory manner that: (1) the concerned creditor was not responsible to provide his documents on the set date or (2) the debtor purposely failed to include his claims in the list submitted to the court or the bankruptcy supervisor as per the provisions of Article (132) and Article (177). Article (180) Article (179) The claims of any of the creditors not submitted as per the provisions of Article (178) shall not be accepted or valid against the debtor or any of the guarantors who provided a guarantee as guarantors to fulfill the plan of restructuring the works of the debtor. Chapter 11 Report of Bankruptcy Supervisor Article (181) Article (180) The bankruptcy supervisor should prepare a report on the debtor's works and submit a copy thereof to the court within the time limit set by the court. The bankruptcy supervisor during the preparation of his report should consult the debtor and he mar request any data or information from any party who might have information about the debtor's works. Such party should provide this information to the bankruptcy supervisor and this will not deemed as a breach to any legal or consensual

commitment to keep the confidentiality of such information. The bankruptcy supervisor may obtain any information from the court which might be related to the report. He must also mention in the report if the opinion of the bankruptcy supervisor deems any reasonable possibility to restructure the works of the debtor and whether or not a restructuring plan should be made to the debtor's creditors. Moreover, the report should include an estimation of the possibility of selling the whole or part of the debtor's works based on "an existing and practical activity" in case of liquidating the debtor's assets. If the report stated a reasonable possibility to restructure the works of the debtor, it must be attached to the report a statement proves the debtor's readiness to continue his works. Article (182) Article (181) If the court was convinced by the recommendations of the bankruptcy supervisor provided in his report and it found that the report limited all the claims as per the provisions of Article (177), it orders the bankruptcy supervisor to provide a copy of the report to the creditors whose debts were accepted by the court and it gave them a term to present their comments on the report within a specific period ser by the court. Furthermore, the court may order the blackout of certain data or information from the report as well as the confidentiality of any information whose release or disclose does not serve the continuity of the debtor's works as deemed by the court. Chapter 12 Report Settlement Article (183) Article (182) The court calls the bankruptcy supervisor and any expert assigned by the court as well as the debtor and his creditors whose claims were accepted to attend a session; then, the court orders at the end of the session either to delegate the bankruptcy supervisor to prepare a restructuring plan of the debtor's works or to liquidate the assets of the debtor. The court may not order the preparation of the restructuring plan of the debtor's works unless the debtor expressed during the session his readiness to continue his works and it was proved to the court through the available documents

and data, after hearing the bankruptcy statements, the possibility of the debtor's return to profit within a reasonable period which agrees with the measure and nature of his works as well as the amount of his indebtedness. The bankruptcy supervisor undertakes the publication of the court's decision during the (five-day) period following the issue of that decision in one or more daily newspaper as decided by the court. Article (183) Article (183) If the court issued an order to liquidate the debtor's works, it may decide based on an application from the bankruptcy supervisor to permit authorize him to continue practicing all or some of the debtor's works for achieving a whole or part sale of his works, provided that such permit authorization does not exceed a maximum term of (six months). The court may, based on an application from the bankruptcy supervisor, renew this permit authorization once or more provided that the renewal period should not exceed (two months). The court agrees grants on the renewal of this permit to the debtor to continue the works of the debtor only if such continuity serves the interest of all the creditors or the public interest. The bankruptcy supervisor shall publish any decision of whole or part sale of the debtor's assets at the same time when the order of liquidating his assets is publish. Article (185) Article (184) The bankruptcy supervisor may request the court on behalf of the debtor to permit him to obtain a new finance with or without security during the bankruptcy procedures pursuant to the provisions provided in the Fifth Section. The court grants this permit only for purposes of ensuring the continuity of the debtor's works. Besides, any new finance of this kind will be subject to the provisions of the Fifth Section. Chapter 13 Supervision Period & Restructuring Plan Article (186) Article (185) When the order of preparing the restructuring plan is issued as per the provisions of Article (182), the supervision period becomes valid regarding the debtor. Such period does not exceed (three) months and the

court may, based on the application of the bankruptcy supervisor, renew it once or more provided that it will not exceed (one month) in maximum. The bankruptcy supervisor shall, during the supervision period, prepare the restructuring plan with the assistance of the debtor and the supervision period ends when the court approves the draft of the restructuring plan as per the provisions of Article (199) or when it issues the rejection order pursuant to the provisions of Article (204) based on the closest term. Article (187) Article (186) The bankruptcy supervisor shall, during the supervision period, supervise the development and implementation of the restructuring plan and regularly notifies the court (at least every three months) about the progress of the restructuring plan. Article (188) Article (187) The debtor should deposit, with the assistance of the bankruptcy supervisor, a copy of the restructuring project plan at the bureau of the court during the supervision period. He should attach with the project plan a statement prepared by the bankruptcy supervisor where he exhibits whether the debtor's creditors will accept the project plan and if there is any use from inviting them to a meeting to discuss the project plan. Article (189) Article (188) The draft of restructuring plan must clarify the following: (1) the possibility of the debtor's works return to gain profits, (2) the provisions and conditions of settling any liabilities, (3) any securities of good performance required to be provided by the debtor, if any, (4) any offer presented from a third party for purchase the whole or part of the debtor's works, if any, and (5) a statement of the debtor's activities to be suspended or terminated. The project plan of restructuring may provide time limits of permit, deduction of payment, transfer of debt to shares in the capital of any project (if possible) and a preferential treatment of creditors if justified.

The court may permit the text of the restructuring project plan to consolidate, establish, release, sell or replace any securities whenever deemed necessary for implementing the project plan. Article (190) Article (189) The period suggested for the restructuring plan may not exceed (five) years. Article (191) Article (190) The court shall review the restructuring project plan and ensure that it was suggested in good faith and it does not unfairly damage all creditors. Article (192) Article (191) The court may ask the debtor to, with the assistance of the bankruptcy supervisor, make any necessary amendments to the restructuring project plan to ensure its compliance with the provisions of Article (190). If the court was convinced by the recommendation of the bankruptcy supervisor issued as per the provisions of Article (187) that the plan complies with the provisions of Article (190) and all claims were finally specified by the court pursuant to the provisions of Article (177), the court orders the bankruptcy supervisor to provide all the creditors, whose claims were accepted by the court, with a copy of the restructuring project plan. The court calls the creditors to vote on the restructuring project plan at the time and place it sets and as per a notice of no less than (twenty one) days. The invitation for the foregoing meeting shall be published in one or more daily newspapers as decided by the court. Chapter 14 Committees of Creditors Article (193) Article (192) The court issues, after consulting with the bankruptcy supervisor, a decision on forming one or more committee for the creditors, including the committee of owners of debts secured by a senior or underlying mortgage and the committee of owners of normal debts, if any, for voting during the meetings arranged as per Article (191). The court may redivide any of these committees if found the necessity for differentiating between the rights decided for these creditors as per the restructuring project plan.

Any shareholders, bonds or other debentures are joined in one separate committee or more as judged by the court based on the recommendation of the bankruptcy supervisor. Article (194) Article (193) The right of voting is limited to the creditors who submitted their statement of debts and was not rejected by the bankruptcy supervisor. The court may permit the creditors whose claims for voting were not accepted and defines in its decision the terms and limits of this permit. Article (195) Article (194) Despite of the provisions of Article (192), the creditors of the debtor will be regulated in one committee whenever the total annual income except taxes does not exceed (five million) dirham during the financial year previous to the commencement of bankruptcy declaration procedures. The Minister of Finance may issue a decision on decrease or increase the debt amount provided in this item. Article (196) Article (195) The restructuring project plan shall not be certified unless by the approval of most creditors whose debts were permanently or provisionally accepted provided that they have obtained two thirds of such debts. Neither the creditors who did not vote nor their debts are calculated in these two majorities. Article (197) Article (196) The members of the committees may suggest during the meetings held for discussing the restructuring project plan any amendments to the plan, and the committee, to which the suggestion was presented as well as any other committee which will be affected by the suggested amendment shall both vote on these amendments. The court may call the creditors to attend additional meetings to vote on the suggested amendments, and it decides to approve or reject any of the suggested amendments in preparation for certifying the restructuring project plan as per the provisions of Article (199). Article (198) Article (197)

The creditor, who accepts the restructuring project plan that all his claims without any modification for which the project decides the full payment of such claims, is deemed an approver of the plan and in such case he will not vote. Article (199) Article (198) When the restructuring project plan stipulates the amendment of the capital of the company which the debtor holds part of its shares or stocks, the court should decide as deemed necessary the invitation of the remaining stockholders or shareholders to the meeting for voting on the suggested amendment. Chapter 15 Approval of Restructuring Plan Article (200) Article (199) The company issues its decision on approving the restructuring plan if all the conditions provided in the previous articles were available. Article (201) Article (200) The restructuring plan certified as per the provisions of Article (199) will be binding for all creditors including any party who had the right to vote in the meetings of the committee(s) of the creditors. Article (202) Article (201) The restructuring plan shall not affect the priority right established for the debts secured by a senior or underlying mortgage as provided in the Seventh Section or any other legislation. Article (203) Article (202) The court may order the suspension or termination of the validity of any creditor's claim. Article (204) Article (203) The court may order to bring near the payment terms of the creditor's entitlements if these terms extended after the date set for finishing the execution of the restructuring plan. The court may also order to bring near the payment terms of either the creditor's entitlements who accepts to reduce his debt. Article (205) Article (204)

If the court refused to approve the restructuring plan, it may order the liquidation of the debtor's assts. Article (206) Article (205) The bankruptcy supervisor must make sure of selling any assets restricted by a security which must be sold as per the restructuring plan against the best price that can be obtained under the current circumstances of the market on the sale date. The bankruptcy supervisor deposits in a deposit account part of the sale revenues in the value of the claims secured by the sold assets. As soon as the restructuring plan is approved, the bankruptcy supervisor pays the creditors whose debts are secured by the sold assets from the revenues of selling these assets according to their priority. The court may order the order the settlement of provisional payments for the creditors whose debts are secured by the debtor's assets in part or all their claims provided that the beneficiary of such payment shall present a financial security equals the value of the paid sum and issued from an accredited bank to operate in the state. Article (207) Article (206) The debtor may suggest to his creditors an alternative security which equals the current one. In case the creditors do not agree on a security for this offer, the court may order though the replacement of the security if it found that the alternative security equals the existing one. Article (208) Article (207) When the court decides that any assets are deemed fundamental for the continuity of the debtor's works, it may order that such assets shall not be disposed without obtaining its permit for a specific period that does not exceed the period of the restructuring plan. Any stakeholder may submit an application to the court on the invalidity of any act made in contradiction with the court's decision, and the court shall decide the invalidity of this act provided that such application was submitted within (three) years from the issue date of the court decision or the publication date of the restructuring plan, based on the latest to happen. Chapter 16 Publication of Approved Restructuring Plan

Article (209) Article (208) The bankruptcy supervisor must during the ten-day period following the court's approval on the restructuring plan do the following: 209-1 208-1 Publishes the decision in one or more daily newspaper as decided by the court provided that it includes a summary of the key terms of the restructuring plan, the name of the debtor, his domicile, his register number at the Commercial Registry and the decision date of plan approval; and 209-2 208-2 Records the decision at the Commercial Registry of the debtor. Article (210) Article (209) The court shall assign a bankruptcy supervisor to work as a supervisor for the restructuring plan throughout its execution period, he commits to control the plan progress and he must notify the court of any execution failure. The supervisor may obtain any date required for fulfilling his tasks. The plan supervisor should also issue a report at the end of every (six) months on the progress of plan execution and provide a copy of the report to the court as well as the creditors. Article (211) Article (210) If the plan supervisor deems the necessity of any amendments on the restructuring plan and if such amendments shall modify any legal or contractual right of any party, he should obtain the approval of the court in a session to which all the creditors and other stakeholders affected by these amendments will be invited as per a notice of a period no less than (twenty one) days. Then, the court issues a decision on approving the whole or part of the amendment or rejecting it. Article (212) Article (211) As soon as all the pledges included in the restructuring plan are fulfilled or executed, the court shall, based on the application of the plan supervisor, the debtor or any stakeholder, record that the plan was carried out. Chapter 17 Termination & Vacation of Restructuring Plan

Article (213) Article (212) The restructuring plan terminates if, after its approval, a judgment was issued on convicting the debtor of one of the crimes provided in Article (393). The restructuring plan termination must be requested within six months from the start of crime investigation; other the application is unaccepted. In all cases, the application of terminating the restructuring plan shall not be accepted if submitted after two years from the issue date of the decision approving it. The application of terminating the restructuring plan releases the sponsor who secured all or part of its conditions. Article (214) Article (213) If the investigation starts with the debtor in one of the crimes provided in Article (393), after approving the restructuring plan, or a penal lawsuit was filed against him in any of these crimes after approving the plan, the court, who declared bankruptcy based on the application of every stakeholder, may order any precautions deemed necessary to reserve the debtor's funds, and such precautions will be repealed by virtue of law if it was decided to keep the investigation or the debtor was pleaded not guilty. Article (215) Article (214) If the debtor did not execute the terms of the restructuring plan, every stakeholder may request its termination from the court which approved it. The termination of the restructuring plan shall not acquit the sponsor who secured the execution of its terms automatically, and he must be called to attend the session where the termination application will be reviewed. Article (216) Article (215) The court may order, in the judgment issued to terminate or vacate the restructuring plan, stamping the debts of the debtor and the assignment of the bankruptcy supervisor, within seven days from the issue date of the judgment on termination or vacation, to publish the summary of this judgment in one or more daily newspapers as decided by the court. The bankruptcy supervisor will make a complementary inventory of the debtor's debts, and prepare an additional budget. The bankruptcy

supervisor requests the new creditors to provide the documents of their debts to fulfill them as per the procedures of debts fulfillment. Article (217) Article (216) The new debts are fulfilled immediately, without re-fulfilling the debts formerly accepted; nevertheless, the debts fully paid must be discharged and reduce the debts which part of them is paid. Article (218) Article (217) The acts done by the debtor, after the issue of the approval decision on restructuring plan and before terminating or vacating it, shall be valid to the creditors, and they may not request their invalidity unless pursuant to rules established in the Civil Transactions Law on the lawsuit of act invalidity. This lawsuit shall not be reviewed after the lapse of two years from vacating or terminating the restructuring plan. Article (219) Article (218) The creditors are not obliged to return any funds received from the debtor to settle their debts before judging to vacate or terminate the restructuring plan unless the court judged otherwise after hearing the lawsuit of act invalidity that might be filed by any stakeholder. This lawsuit shall not be heard after the lapse of two years from vacating or terminating the restructuring plan. Article (220) Article (219) After vacating or terminating the restructuring plan, the creditors will receive their full debts if they were not paid any of the sums decided for them in the plan, otherwise, their original debts must be reduced in the same percent they received from the said sum. Article (221) Article (220) The court issues a judgment on liquidating the debtor's assets when the restructuring plan is vacated or terminated as per the provisions of Article (212). Chapter 18 Liquidation Article (222) Article (221)

The liquidation judgment issued by the court will result in the commencement of liquidating the debtor's assets, in such case the court may permit the debtor to continue practicing all or part of his works for achieving full or part sale of his works pursuant to the provisions of Article (183). The revenues from liquidating the debtor's assets shall be used to fulfill his liabilities provided that any excess is delivered to the debtor. Article (223) Article (222) The bankruptcy supervisor shall liquidate all the debtor's assets except for the assets he may preserve as per the provisions of this law. Article (224) Article (223) If the debtor inherited any assets during the bankruptcy procedures, the bankruptcy supervisor must liquidate such assets. The bankruptcy supervisor shall use the revenues from liquidating these assets to fulfill any claims of the debtor under the supervision of the court. Article (225) Article (224) The bankruptcy supervisor must, within (five) days from the issue date of liquidation judgment, delegate creditors to provide any final claims that were not previously submitted or accepted by the court as per the provisions of Article (177). The final audit procedures of any claims are subject to the provisions provided in the Tenth Chapter. Besides, no claims previously rejected by the court as per the provisions of Article (177), shall not be considered. Article (226) Article (225) The bankruptcy supervisor undertakes the bankruptcy procedures, and at the same time makes a final audit of the creditors claims. The bankruptcy supervisor shall not commit to make or complete this audit if he found that the revenues of selling the debtor's assets will be all disposed to pay any legal fees or settle the secured debts. Article (227) Article (226) The court orders the bankruptcy supervisor to commence the sale of the debtor's assets in a public auction under its control and supervision; it

may authorize the debtor to sell his assets by a public auction in return for the price and pursuant to the provisions set by the court. Article (228) Article (227) In all cases, it must be announced about any sale for the debtor's assets which is "an existing and operating activity" whose value exceeds at the time of announcing its sale fifty thousand () dirham by the public auction. The publication is made in one or more daily newspapers as decided by the court. Article (229) Article (228) The bankruptcy supervisor commits to notify the court and the debtor regularly or at least every (three) months about the liquidation progress. In case of suggesting a full or part sale of the debtor's works, the bankruptcy supervisor notifies the court, the debtor and supervisors about the content of any offers he receives, the he provides copies of any orders to the Court Bureau so that any stakeholder can review them. The bankruptcy supervisor further provides the court with any information related to the offer to enable the court estimates the feasibility of such offer. Article (230) Article (229) Upon the issue of the liquidation judgment, all pending claims become payable, but in case the court permits the continuity of the commercial operations because they are related to a full or part sale of the debtor's works according to a "an existing and practiced activity", then the claims whose due dates did not come yet become payable on the issue date of the sale order and in case such order was not issued, they become payable on the expiry date of the activity continuity. Article (231) Article (230) If the value of the claims were determined in a foreign currency, the value of the claims is exchanged to the national currency against the current rate of exchange at the date of liquidation commencement. Article (232) Article (231) If the bankruptcy supervisor did not start the sale of the assets restricted by the security within six months from the issue date of liquidation

judgment, the creditors whose debts are secured by senior or underlying mortgage preferred, as soon as their claims are submitted till they are accepted, shall exercise their right in filing a separate lawsuit to execute their securities. Article (233) Article (232) Despite of the provisions of Article (231), if the bankruptcy supervisor decides that the revenues gained from selling any assets restricted by the security are not sufficient to cover the fees of the bankruptcy supervisor any charges related to the foregoing sale, he may choose not to proceed such sale and permits the creditor, the owner of the security, to keep his security. Article (234) Article (233) The bankruptcy supervisor should promptly notify the creditor, the security owner, in writing about any decision he makes regarding the discontinuity of selling the assets restricted by the security as per the provisions of Article (232). Article (235) Article (234) The following parties may not, directly or by an agent, purchase or present a purchase offer for whole or part of the works funds of the debtor offered for sale pursuant to the provisions of Article (226), they may not also, directly or indirectly within the period of (five) years following the sale, purchase whole or part of the sold assets: (1) the debtor, (2) the debtor's spouse, or any of the debtor's relatives by marriage or blood relatives of fourth degree, or (3) any party who was, during the two years prior to the commencement of bankruptcy procedures, a partner, employee, accountant, or agent of the debtor or any party who undertakes or undertook the tasks of supervision during the bankruptcy procedures. Article (236) Article (235) The court decides the vacation of any act that contradicts any of the provisions of Article (234) based on any application of any stakeholder or the request of Public Prosecution provided that the public prosecutor should provide the said application within the period of (three) years

following from the date of (signing the contract or the concerned agreement) (the happening of the act). Article (237) Article (236) 237-1 236-1 The bankruptcy supervisor shall distribute the revenues of liquidation and settle the priority between creditors in compliance with any disputes filed before the court. The bankruptcy supervisor should obtain the prior approval of the court on such distribution. 237-2 236-2 The creditors must deposit at the Court's Bureau for examination a list of the claims required to be distributed. Besides, the distribution may be done whenever a sufficient amount of cash funds incurred from the liquidation of the debtor's assets is available and when the approval of the court on such distribution is obtained. The cash funds related to the claims not yet approved by the court are maintained at the court's treasury until a decision on their final settlement is issued by the court. 237-3 236-3 Any amount payment for the creditors is subject to the provisions of settlement priority of debts secured by a senior or underlying mortgage preferred provided in the Seventh Section. The bankruptcy supervisor shall settle whole or part of the claims of debts secured by a senior or underlying mortgage preferred provided that such debt was finally accepted and that the beneficiary creditor from the settlement shall provide a financial security issued by one of the banks operating in the state in the value of the sum settled to him. The creditor whose debt is secured by a senior or underlying mortgage preferred must further receive the revenues incurred from selling the assets securing his debt even if they exceeded the value of the in advance payment. If the revenues of the assets restricted by the security were not sufficient to fulfill the whole debt secured by a senior or underlying mortgage preferred then the remaining unsettled debt shall take the rate of normal debt. The bankruptcy supervisor must deliver the debtor any excess revenues upon liquidation after fulfilling all his liabilities. Article (238) Article (237)

The bankruptcy supervisor may, after obtaining the court's permit and hearing the debtor's statements or after being duly notified to hear his statements but failed to attend on the set date, make an arrangement or settle any dispute that affects the creditors, including the disputes related to the fixed funds. If the fund value, subject to the settlement or solution, was not determined or it exceeded the amount of (ten thousand) dirham, the court's prior approval on the arrangement or the dispute settlement must be obtained. Article (239) Article (238) When approving the restructuring plan or in case of making the final distribution for creditors after liquidating the debtor's assets, the court orders the closure of bankruptcy procedures after hearing the statements of the debtor or notifying him for same and such decision shall be published in one newspaper or more as decided by the court. The bankruptcy procedures may be terminated based on the debtor's request if the reasons for commencing the bankruptcy procedures ended. Chapter 19 Simple Liquidation Procedures Article (240) Article (239) Any procedures of simple liquidation ordered by the court are carried out pursuant to the provisions of Article (143) and the provisions of this Chapter, and Article (222), Article (223), Article (230), Article (234), and Article (235) are applicable to the procedures of simple liquidation. Article (241) Article (240) The bankruptcy supervisor shall manage the debtor's assets starting from the issue date of the simple liquidation judgment, and the debtor may not dispose any part of his works and any act in this regard by the debtor should be considered. Article (242) Article (241)

The judgment of simple liquidation shall make mature all the terms of the claims not yet due upon issuing the judgment of simple liquidation. Article (243) Article (242) The bankruptcy supervisor starts selling the debtor's assets within thirty days from the issue date of the simple liquidation judgment, and the court may permit him to extend such term. Article (244) Article (243) The bankruptcy supervisor declares within (five) days from the date of his assignment the commencement of simple bankruptcy procedures in one or more daily newspapers as he decides, and he notifies in that regard all the creditors of the debtor known to him requesting them to submit their claims. Then, the bankruptcy supervisor shall record the foregoing commencement order in the commercial registry of the debtor. Article (245) Article (244) From the date of publishing the simple liquidation judgment, all the creditors of the debtor, whose claims were present before the simple liquidation judgment, must deliver the bankruptcy supervisor within the period of (one) week their duly certified claims, including the claims which did not mature yet, mention their value on the issue date of simple liquidation judgment as well as define the type and nature of their securing assets, if any. If the claims were not finally specified, the creditor should provide an estimation of his claims according to his best knowledge and opinion and mention that explicitly in the submitted documents. Such estimation is subject to the examination of the bankruptcy supervisor, and if any of the debts were determined in a foreign currency, their sums shall be exchanged to the national currency against the current rate of exchange on the issue date of simple liquidation judgment. Article (246) Article (245)

If the creditor did not submit his claims within the period set in Article (244), he can not participate in the procedures of simple liquidation on such claims unless he was able to prove to the court that (1) he was not responsible for his failure to submit his claims or (2) the debtor intended to conceal his claims from the list provided to the court or the bankruptcy supervisor pursuant to the provisions of Article (132) and Article (243). Article (247) Article (246) The bankruptcy supervisor examines the claims and limits the examination process to the claims that might be fully or partly fulfilled. Article (248) Article (247) After conducting the claims examination as per the provisions of Article (246) and selling the assets pursuant to the provisions of Article (242), the bankruptcy supervisor shall promptly distribute the liquidation assets among the creditors whose debts are matured, with consideration to the preference right of creditors. Article (249) Article (248) The bankruptcy supervisor shall prepare a distribution draft plan and obtain the court's approval on it before starting the revenues distribution between the creditors. Article (250) Article (249) When conducting before conducting any distribution among the creditors, the provisions related to the ordering of debts settlement each distribution must consider the rights of preferred creditors as per the order provided in the Seventh Section. The creditor whose debt secured by a senior or underlying mortgage preferred and which was not fully settled shall have the order of normal debtor for the remaining sums of his debt. The bankruptcy supervisor must deliver the debtor any excess revenues from the simple liquidation after fulfilling all the debtor's liabilities. Article (251) Article (250)

As soon as the estates that represent the debtor's assets are sold within no more than one year in maximum from the issue date of simple liquidation judgment, the court orders the closure of the simple liquidation procedures after hearing the statements of the debtor or notifies him to hear the same. The court may further decide in exceptional circumstances the extension of the simple liquidation procedures for an additional period in no more than three months. Chapter 20 Provisions on Companies Bankruptcy Article (251) The bankruptcy of commercial companies is subject to, in addition to the provisions provided in this section, the provisions provided in the following articles. Article (252) In regard to the joint stock companies and the limited liability companies, the following shall be considered: 252-1 If the company bankruptcy declaration was requested, each application on the company liquidation or placing it under receivership must be settled. 252-2 If the company bankruptcy declaration was judged, it may not be liquidated or placed under receivership before the termination of bankruptcy procedures. Article (253) The company creditor may request its bankruptcy declaration even if he was a partner therein, whereas non-creditor partners may not, in their individual capacity, request the bankruptcy declaration of the company. Article (254) The court may, automatically or based on the company's request, delay the latter's bankruptcy declaration for no more than one year if possible to

support its financial stand or if the interest of national economy requires so. In such case, the court orders the necessary measures to maintain the company's assets. Article (255) 255-1 If the company's bankruptcy was declared, the bankruptcy of all its acting partners must be declared; and such bankruptcy declaration includes the acting partner who left the company after it ceased payment provided that no more than one year has lapsed from the date of his leave declaration from the company in the commercial registry. 255-2 The court decides in one judgment, the bankruptcy declaration of acting partners, even if it is not competent to declare the bankruptcy of such partners. 255-3 The court assigns for the company's bankruptcy and the bankruptcy of its acting partners one bankruptcy supervisor unless the court orders the assignment of more than one bankruptcy supervisor as per the provisions of Article (147) and Article (148); Nevertheless, each bankruptcy shall be separate from other bankruptcies in terms of its administration, debts settlement and termination manner. Article (256) If the court judged the declaration of the company's bankruptcy, it may automatically or based on the application of any stakeholder order the bankruptcy declaration of each party who carried out in its name any commercial business for his own account or disposed its funds as if they were his own. Article (257) If proved that the company's assets are not sufficient to settle at least twenty percent of its debts, the court, which declared the bankruptcy, may obligate the members of board of managers or board of directors, all or some of them jointly or severally, to settle the whole or part of the

company's debts in the cases where they are proved to be responsible for the company's losses pursuant to the provisions of Commercial Companies Law. Article (258) The representative of the company declared bankrupt shall act on its behalf in every legal matter; taking the opinion or the presence of the bankrupt party, and the company's representative should attend before the bankruptcy judge or supervisor whenever asked to and give any required information or clarifications. Article (259) The bankruptcy supervisor may, after taking the permission of its judge, claim partners to pay the remaining value of their shares in the company's capital even if it does not mature yet. The court may order the restriction of this claim in the amount necessary to fulfill the company's debts. Article (260) The loan bonds issued by the company according to the rules of Commercial Companies Law are not subject to the procedures of debts fulfillment, such bonds shall be accepted against their par value in the bankruptcy debts after deducting the sums paid by the company. Article (261) 261-1 If the composition was related to a company that issued loan bonds, equal to twenty percent of all its debts, its composition may not be accepted, unless it approved the general collective terms of the owners of these bonds. This approval is required in all cases if the composition included terms contradicting the terms under which the bonds were issued. 261-2 The decision of the General Meeting of the bonds owners is issued pursuant to the provisions provided in the Commercial Companies Law.

261-3 In the cases where the General Meeting approval for the bonds owners is required, the creditors' invitation to the meeting on deliberating the composition is delayed until the General Meeting decision is issued. Chapter 21 The Deceased Debtor Bankruptcy Article (252) Article (262) 252-1 262-1 The creditor may file a lawsuit to declare the bankruptcy of the deceased debtor if he died while in the state of debts suspension or excessive indebtedness when the debt value exceeded (ten thousand) dirham; and the lawsuit of bankruptcy declaration must be filed within (six) months from the death date. The court judges the deceased bankruptcy if the debtor's successors did not, within the period set by the court, provide any tangible or bank insurance issued by one of the banks operating in the state or any other value accepted by the court and sufficient to fulfill the creditor's debt. 252-2 262-2 The debtor's successors may request, after he dies, his bankruptcy declaration if the death happened while in the state of debts suspension or excessive indebtedness, and the lawsuit of bankruptcy declaration must be filed within (three) months from the death date. If some successors objected the bankruptcy declaration, the court must hear their statements then judge the lawsuit based on the interest of the deceased debtor's creditors and his successors. 252-3 262-3 The court may automatically or based on the application of any stakeholder judge the termination of the procedures of restructuring or bankruptcy composition if the debtor died during the review of these procedures. The court further decides in the same judgment the commencement of bankruptcy declaration procedures of the deceased debtor.

252-4 262-4 The commencement of the bankruptcy procedures and the judgment issued therein pursuant to Article (262) are subject to the provisions provided in Article (135), Article (136), Article (137) and Article (138) as well as Articles from (139) to (250) with consideration to the following: (a) The bankrupt debtor's successors shall act on his behalf in the bankruptcy procedures; they have the same rights and commit to the same obligations specified in these articles. (b) The provisions of these articles are only applicable to the deceased debtor's assets; such assets are legally transferred to his successors as per the law applicable to the testator when he dies. Article (253) Article (263) The successors of the deceased should delegate those to represent them in the procedures of bankruptcy, if they did not agree on delegating any within ten days from being notified by the bankruptcy supervisor, the court, based on the request of the bankruptcy supervisor, assigns a party for that purpose. The court may also at any time isolate the party delegated by the successors and assign another. Section 5 The New Finance Chapter 1 Applying For a New Finance Article (254) Article (264) The composition supervisor or the bankruptcy supervisor may on behalf of the debtor apply for the court to approve a new finance pursuant to the provisions provided in the Third and Fourth Section in order to secure the continuity of the debtor's works. Article (255) Article (265)

The court's approval is not necessary when providing any non-insured new finance for any of the debtor's funds or assets and without giving the guarantor any preference to fulfill his rights regarding any other debts payable by the debtor. Chapter 2 Terms of New Finance Article (256) Article (266) The court may, in response to the application provided in Article (264), permit the debtor to obtain a secured or non-secured loan that:

256-1 266-1 Has the preference over any non-secured debt existing on the date of the procedures of composition commencement or bankruptcy declaration; or 265-2 266-2 Secured by a mortgage on any of the debtor's funds which are not subject to any present insurance; or 265-3 266-3 Secured by an insurance of less degree than the one available on the same funds. Article (257) Article (267) If the debtor failed, after submitting an application to the court pursuant to the provisions of Article (264), to obtain the loan as per the provisions of Article (266), the court may permit the debtor to obtain a loan secured by an insurance of a degree more than or equals any current insurance on the debtor's funds, if the court was convinced that: (a) the interest of the owner of the current insurance is sufficiently protected; or (b) the owner of the current insurance agrees to arrange an insurance of a degree more than or equals the insurance decided for him. Moreover, any application submitted to the court as per the provisions of Clause (a), the debtor should prove the availability of sufficient protection for the interest of the current insurance owner.

Article (258) Article (268) For purpose of applying (267), the term "Sufficient Protection" means any reasonable protection sufficient to protect the owner of the current insurance against any decrease in his security value to the limit where such decrease was caused by: (a) the restriction imposed as per the provisions of Article (70) or Article (167); or (b) granting any insurance pursuant to the provisions of Article (267); or (c) the debtor's dispose, sell or lease of the fund subject to that insurance after issuing the order of the procedures of composition commencement or bankruptcy. Article (259) Article (269) The new finance permitted as per the provisions of Article (264) or Article (265) is deemed as a debt secured by a senior or underlying mortgage preferred for applying the provisions of Seventh Section according to the terms included in Item (282-1) of the Seventh Section. Section 6 Credits, Exchanged Debts & Setoff Chapter 1 Terms of Effecting the Setoff Right Article (260) Article (270) In this section, the term "Liability" means any liability caused as per the law, agreement or for any other reason. Article (261) Article (271) Subject to the provisions of the Tenth Section, the debtor or any party contracted with the debtor may not exercise the setoff rights after the issue of the order of composition commencement procedures or bankruptcy procedures unless made as per the provisions of this section. Article (262) Article (272) As of the issue date of liquidation judgment pursuant to the provisions of the Fourth Section, the setoff of any sum payable by the debtor for either

the creditor is directly made from the sum payable by the creditor for the same debtor. The provisions of this article are only applicable to the credits or debts exchanged between the debtor and the creditor whose claims were finally accepted by the court. Article (263) Article (273) Any sum whatsoever is deemed payable by the debtor or his creditor for purposes of Article (272) whether such sum was matured or due at any time in the future pursuant to the agreement terms between the creditor and the debtor, and whether its value was specified or determined or can be specified or determined pursuant to the provisions of law or the agreement. Article (264) Article (274) The reference in Article (272) to the exchanged credits and debts does not include any debt incurred by a liability caused or acquired, either by a waiver or other, after the issue of liquidation judgment pursuant to the provisions of the Fourth Section. To avoid doubt, this debt may be correct and valid for any other purposes except for the setoff provisions provided in this section. Article (265) Article (275) The balance (if any) payable for the creditor after making the setoff pursuant to the provisions of Article (272) is included in the bankruptcy debts, and the balance (if any) due for the debtor is settled to the bankruptcy supervisor and included in the bankruptcy funds. Article (266) Article (276) For purposes of proving any debt payable in a foreign currency, the debt sum is exchanged to the national currency against the current rate of exchange on the date of liquidation judgment. Section 7 Arrangement Settlement of Preferred Debts

Chapter 1 General Terms of Application Article (277) The provisions of this section regulate the arrangement settlement of the debtor's debts pursuant to the settlement preference provided in these provisions. Article (267) Article (278) The provisions of Article (280) and Article (282) of this section are applicable upon issuing the liquidation judgment as per the provisions of the Fourth or Ninth Section. Article (268) Article (279) The provisions of Article (283) are applicable when issuing the order of procedures commencement pursuant to the provisions of the Third, Fourth or Ninth Section in the case where a judgment was not yet issued on the debtor's right of liquidation. Article (269) The provisions of this section are applicable to the preferred debts related to the debtor's funds. Chapter 2 Preferences Ordering upon Liquidation Article (270) Article (280) 270-1 280-1 When liquidating the debtor's assets pursuant to the provisions of the Fourth or Ninth Section, the ordering of the owners of debts secured by a senior or underlying mortgage preferred comes before other creditors, based on the amount of their securities. 270-2 280-2 Any charges, costs and expenses incurred by the bankruptcy supervisor or the liquidation supervisor of composition are deducted upon selling any the estates insuring the debts secured from the sale income

before distributing them between the creditors by the owners of secured debts. Preferred. 270-3 280-3 If the sale income of the insuring estates restricted by an insurance exceeded the value of the secured debt after any settlement pursuant to the provisions of Item (280-2), the excess shall be paid to the bankruptcy supervisor or the liquidation supervisor of composition in favor of the debtor. 270-4 280-4 If the sale income of insuring estates restricted by an insurance is less than the value of the secured debt after the settlement of charges, costs and expenses provided in any settlement pursuant to the provisions of Item (280-2), the deficiency is deemed as a normal debt on the debtor. Article (271) Article (281) The preferred debts of the debtor referred to in Item (282-1) shall have the rate of preferred debt and the payment priority when liquidating the debtor's assets over other debts of the debtor not secured by a senior or underlying mortgage. When liquidating the debtor's assets. Chapter 3 Settlement Ordering of Preferred Debts Article (272) Article (282) 272-1 282-1 The following debts are considered as preferred debts, and their settlement is ordered as follows: (a) Regarding the debtor who is a natural party: the debts of the alimony payable by the debtor pursuant to the provisions of the applicable Marriage Law, as well as the debts of the expenditures payable for those whom the debtor must provide as per a judgment issued therein by a competent court; (b) Any basic wages or salaries paid periodically (except for any kind of allowance, increases, and other incidental payments and other benefits,

whether material or tangible) unsettled for the debtor's employees, laborers and workers which must be settled pursuant to the provisions of Article (4) of the Federal Law No. (8) of 1980 on regulating the labor relations and were payable before the date of liquidation judgment for no more than 3 months, in addition to any contractual contributions payable pursuant to the provisions of Article (75) of the Federal Law No. (7) of the year1999 on issuing the Law for Social Insurance & Pensions in a maximum amount of (.) dirham for each employee, laborer or worker; (c) Regarding to liquidation only pursuant to the provisions of the Fourth Section: (1) Any charges, costs or expenses incurred after the date of commencement order but before any liquidation order to provide goods and services for the debtor or to continue the fulfillment of any other contract to the limit where such charges, costs or expenses gain a benefit for the debtor's works or funds; or (b) When a judgment issued to continue the progress of all or part of the debtor's works pursuant to the provisions of the Fourth Section, any charges, costs or expenses incurred after the date of liquidation judgment and as per the approval of the bankruptcy supervisor on them for continuing the progress of the debtor's works; (d) Any legal fees or expenses, including the fees of bankruptcy or composition supervisor, as well as any expenses paid for the service of the mutual interest of the creditors to maintain and liquidate the debtor's assets; and (e) Any new finance incurred by the debtor pursuant to the provisions of the Fifth Section including the original debt amount, and relevant unpaid interests and expenses as long as such new finance was not secured, or if the income of any security granted for the new finance was not sufficient for the full settlement of the due sums by virtue of such finance.

282-2 With consideration to the preferences order pursuant to the provisions of Item (282-1), the order of each of the debts classes referred to in Item (282-1) shall be equal, unless the debtor's assets were not sufficient to cover them, in such case, they shall be equally reduced. Chapter 3 Ordering of Debts Settlement before Liquidation Stage Article (273) Article (283) 273-1 283-1 The following sums shall be settled on their due dates in the preference order set below: (a) Any fees and costs for the bankruptcy supervisor or the composition supervisor and any sum disposed during the relative procedures or transactions pursuant to the provisions of the Third, Fourth and Ninth Sections; (b) Regarding the Third and Fourth Section only: any charges, costs or expenses payable after issuing the commencement order to provide the debtor with goods and services or to continue the execution of any other contract pursuant to the provisions of Article (75) or Item (169-5) to the limit where such charges, costs or expenses profit for the debtor's works or funds; (c) Any new finance incurred by the debtor pursuant to the provisions of the Fifth Section including the original debt amount, and relevant unpaid interests and expenses as long as such new finance was not secured, or if the income of any security granted for the new finance was not sufficient for the full settlement of the due sums by virtue of such finance. 273-2 283-2 With consideration to the preferences order as per the provisions of Item (283-1), the order of each of the debts classes referred to in Item (283-1) shall be equal, unless the debtor's assets were not sufficient to cover them, in such case, they shall be equally reduced. Section 8

Terminated & Terminable Transactions Chapter 1 Scope of Application Article (274) Article (284) 274-1 284-1 This section is applicable in the cases where the court issues a liquidation judgment pursuant to the provisions of the Fourth Section. 274-2 284-2 Article (285) and Article (286) are only applicable in the following cases: (a) If the debtor was at the time of action in the state of payment suspension or excessive indebtedness; and (b) If the act happened within the period of (two years) before the date of liquidation judgment.

Chapter 2 Terminated Acts of Debtor Article (275) Article (285) 275-1 285-1 The following acts of the debtor shall be invalid: (a) Any gifts or transactions he makes with no return; (b) Any transactions where the debtor's liabilities noticeably exceed the other party's liabilities, whether such liabilities were material or tangible; (c) Settling and debts before their due date regardless of the method of payment; (d) Settling payable debts in a method different from the one agreed upon between the debtor and his creditor or those usually followed to settle that kind of debts; (e) Arranging any kind of the new security to secure the settlement of an old debt; and (f) Arranging a mortgage or other material or tangible insurances on any of the debtor's funds.

Chapter 3 Terminable Acts of Debtor Article (276) Article (286) 276-1 286-1 The court may judge the termination of any act of the debtor regarding his disclaim of any of his assets or rights or his settlement of any payable debt or doing of any other acts in return (even if they were not subject to the provisions of Article (285)) in case any of these acts prejudiced the rights of the creditors, and the party contracting with him knew or was supposed to know when acting that the debtor was in the state of payment suspension or excessive indebtedness, or he is probably in these two cases as a result of such act. 276-2 286-2 If the contracting party referred to in Item (286-1) was a party related to the debtor, there will be a decisive presumption that he knew about the debtor's payment suspension or excessive indebtedness or the possibility of having either case. 276-3 286-3 For purposes of Item (286-2), the party shall be related to the debtor if: (a) He was a member of a board of directors, a general director, an active manager of the company or controls it, or (b) He was a partner or a shareholder in the debtor's company or a partner to the debtor in person. 276-4 286-4 For purposes of this article, the manager shall be an "active manager" if he plays an active role in the process of decisions making in the debtor's company, or his instructions and directions form a rule which the general directors or managers in the debtor's company use to make their decisions on the company's management. 276-5 286-5 For purposes of this article, the expression "a company manager" includes any party who undertakes the management of a

company legally and permanently existing or permanently undertakes the management of the debtor's works. 276-6 286-6 For purposes of this article, any party whosoever shall be a partner of the debtor in person if such party was: (a) The debtor's spouse; (b) The Debtor's relative; (c) The relative of the debtor's spouse; (d) The spouse of the debtor's relative; (e) The spouse of the relative of the debtor's spouse. 276-7 286-7 For purposes of this article, the party will be a partner to any party with whom he is a partner, spouse, or a relative to any party related by partnership. 276-8 286-8 For purposes of this article, the party will be a partner to any party he employs or be employed by him. 276-9 286-9 For purposes of this article, the company is a partner of another company: (a) If both companies were managed by one party, or if any party manages one of the companies whereas one or more of his partners, individually or with him, manage the second company; or (b) If a group of one or more parties managed both companies, and the group managing any of the companies was formed by the same parties managing the other company, or considered to be legally formed by the same parties as each member in every group can be represented by another member from the other group (in one or many cases). 276-10 286-10 For purposes of this article, a company is a partner of another party if such party, alone or with his partners, manage that company. 276-11 286-11 For purposes of this article, a party is a relative of another if such party was a brother, sister, uncle (father-side), uncle (mother-

side), cousin, predecessor or direct successor, since any relation between relatives from one side is considered as a blood one, and the son of a spouse is its son. 276-12 286-12 For purposes of this article, any member of the board of directors, a general manager or an official in the company is treated as an employee in the said company. 276-13 286-13 For purposes of this article, the party shall be considered in control of the company if: (a) His instructions or directions form a rule on which the members of the board of directors or the general managers working in the company or any other company it manages (or any of the foregoing companies); or (b) He has the right to vote in a percentage no less than third of quotas or shares represented in a meeting of any General Meeting of the debtor's company or the other company it manages. Chapter 4 Judging or Rejecting Termination or Terminating Article (277) Article (287) 277-1 287-1 The bankruptcy supervisor or the damaged creditor shall file the termination lawsuit pursuant to the provisions of Article (285) or Article (286). 277-2 287-2 The bankruptcy supervisor may file a lawsuit to prevent the execution of any act, payment of any sum or entering any terminated transaction pursuant to the provisions of Article (285) or terminable as per the provisions of Article (286). 277-3 287-3 The bankruptcy supervisor may replace the creditor in any legal procedures the latter has started pursuant to the provisions of Item (290-1) if the debtor was subject to the bankruptcy procedures. Article (278) Article (288)

The court may automatically invalidate or terminate an act pursuant to Article (285) or Article (286) if the bankruptcy supervisor or the damaged creditor did not file the termination lawsuit. Article (279) Article (289) 279-1 289-1 The court issues a judgment on terminating the act pursuant to the provisions of Article (285) or Article (286), and decides in the same judgment the delegation of the contracting party to return the assets, funds, securities or the value he received, as well as the incurred revenues from the date of gaining them, to the debtor. 279-2 289-2 The court may judge the rejection of the termination lawsuit filed pursuant to the provisions of Article (285) or Article (286) if proved that the debtor acted in good faith and for purposes of exercising his works, besides, when he acted as such there was a possibility that this act would profit his works.

Chapter 5 Consequences of Termination Judgment Article (280) Article (290) 280-1 290-1 The court, in addition to the decision on returning the matter as if the said transaction was not entered pursuant to Article (289), may issue any other order to protect the interests of either the creditor who was damaged because of the abovementioned transaction. 280-2 290-2 The returned funds as well as the revenues incurred from them form part of the debtor's assets. Chapter 6 Prescription Periods Article (281) Article (291)

Any lawsuit must be filed pursuant to the provisions of Article (285) or Article (286) before the end of bankruptcy procedures, and in all cases within (two years) from the commencement of bankruptcy procedures. Section 9 Insolvency of Non-Traders Natural Parties, Their Liabilities Restructuring & Assets Liquidation Chapter 1 Parties Subject to Insolvency Provisions & Insolvency Application Conditions Article (282) Article (292) The provisions provided in this section are applicable to the debtors, who are non-traders natural parties; they aim to give the debtor a chance to reconciliate with his creditors through reaching a plan for restructuring his liabilities or liquidating his assets in case the reconciliation with his creditors was difficult because his assets were not sufficient to settle all his current and future debts.

Article (283) Article (293) The commencement of insolvency procedures may be requested based on the debtor's application pursuant to the provisions of Item (294-1) or the application of one of the debtor's creditors pursuant to the provisions of Article (296). Article (284) Article (294) 284-1 294-1 Either the debtor may submit to the court an application for commencing the insolvency procedures if such party proved that he is not capable or not expected to be capable to settle all his debts whether the due ones or those to be payable in the future. 284-2 294-2 The debts referred to in Item (294-1) include all the debtor's debts, whether payable or to be payable, settled or not yet, possible or

expected, as well as any personal liabilities given by the debtor to secure the fulfillment of the liabilities of another party or more. Article (285) Article (295) The debtor may request the commencement of insolvency procedures as per a report submitted to the court in which he states the reasons of such request and attaches thereto the following documents: 285-1 295-1 A memo containing a brief description of the debtor's economic and financial status; 285-2 295-2 Any documents supporting the request submission; 285-3 295-3 The details of any executive or other legal procedures taken against the debtor, to his knowledge; 285-4 295-4 A statement that the debtor, despite his good faith, is neither capable nor expected to be to settle all his debts whether the due ones at the time of submitting the application or those payable in the future; 285-5 295-5 A list of the debtor's creditors including their addresses, approximate sums payable to them as well as the debt securities of the debtor's assets, if any, and 285-6 295-6 A detailed statement of the debtor's moveable and immoveable assets as well as the revenue required to support the debtor, his family and any other party he provides. Article (286) Article (296) 286-1 296-1 The debtor's creditor for a non-secured sum equals or exceeds (10.000) ten thousand dirham may submit to the court an application for commencing the insolvency procedures against the debtor if the creditor has previously notified the debtor in writing to settle the debt but the debtor did not do so within no less than (three weeks) from the notice date, or if the creditor obtained the decision of a competent court to execute a judgment issued for his favor obligating the debtor to

settle the debt but the latter did not. The Minister of Finance may issue a decision on decreasing or increasing the debt limit provided in this item. 286-2 296-2 The court shall not issue its preliminary judgment to commence the insolvency procedures pursuant to the provisions of Article (294) and based on an application by the creditor unless proved that the claimed debt was due but not paid or settled after the application date, or that the debt value is not expected to be settled by the debtor within a reasonable time on the due date. 286-3 296-3 If either the creditor submits an application to the court pursuant to the provisions of Item (296-1); he may not withdraw such application without the prior consent of the court. 286-4 296-4 Any application submitted by the creditor to the court must be signed and dated by the creditor, and the following shall be attached thereto: (a) A copy of the official claim for due payment settlement or a copy of the court's decision by which it orders the execution of the judgment related to the debt; and (b) Any data about the debtor, including the debt sum and any securities provided, if any. Article (287) Article (297) The insolvency application is submitted to the court; then, the court bureau writes a minute on receiving the documents provided by the applicant. If the applicant could not provide the data or documents decided pursuant to the provisions of Article (295) or Item (296-4), he must mention the reasons behind that in his application. Article (288) Article (298) The court notifies the debtor regarding any application it receives from any of the debtor's creditors. The court also orders the debtor to present any required documents or data as per the provisions of Article (295).

Article (289) Article (299) The court reviewing the insolvency application, automatically or based on the request of any stakeholder, may order the necessary measures to maintain or manage the debtor's funds until the application is settled. The court may also order, in its preliminary judgment for commencing the insolvency procedures, such measures to remain valid as well as to undertake any further precautionary measures after the issue of such judgment. Article (290) Article (300) The court shall promptly settle the application for commencing the insolvency procedures and order on the first session the set of a date for judgment delivery. It may also delay the date of judgment delivery to one or more sessions that do not exceed as a whole (21) {twenty one} days from the date of the first session to enable the applicant provide any additional data or documents supporting his application or for any other reasons specified by the court. If the company found that the required conditions for accepting the application are available, it issues a preliminary judgment on commencing the insolvency procedures. The court may order all or some of the sessions to be held in the consultation room. Article (291) Article (301) 291-1 301-1 The court orders the suspension of insolvency procedures or rejects the application submitted to it (as required) if found that the debtor's assets are not sufficient to cover the costs of the procedures of insolvency application unless the Public Treasury agreed, based on the application of the insolvency requester, to cover the deficiency or fund all the costs, as necessary.

291-2 301-2 Any decision on suspending the insolvency procedures or rejecting the application as per the provisions of Item (301-1) must include a liquidation judgment. Article (292) Article (302) The court shall review the application of insolvency procedures commencement. Despite any documents submitted by the debtor or any other party as per the provisions of Article (295) or item (296-4), the court may order the assignment of any of the experts registered in the experts roll and state in the same decision the tasks and fees of such expert. The assigned expert shall prepare a report on the debtor's economic and financial status including his opinion on the availability of the necessary conditions to commence the procedures of restructuring the debtor's liabilities; he should also state whether or not the debtor's assets are sufficient to cover the costs of the insolvency, restructuring or liquidation procedures, as applied. Article (293) Article (303) The court sets a session within (three months) from the issue date of its preliminary judgment on commencing the insolvency procedures, and on the set session the court issues its judgment on: either (a) restructuring the debtor's liabilities and commencing the related procedures; or (b) declaring the debtor's insolvency, liquidating his assets and commencing the liquidation procedures if proved to the court the impossibility of restructuring his liabilities for many reasons including the insufficiency of his assets; (c) rejecting the application if the court concluded that the insolvency procedures do not fit the debtor's situation. The court may extend the judgment term for one or more sessions that do not exceed as a whole (21) twenty one days to enable the applicant provide the court with any additional data or documents supporting such application, or for any other reasons decided by the court. For such purpose, the court may call

any party who has any data or documents related to the commencement application of insolvency procedures to attend the session, including the debtor's spouse or ex-spouse. The foregoing party shall give the court any information that might be requested by the latter based on reasonable basis. Article (294) Article (304) The judgment issued by the court pursuant to the provisions of Article (303) shall be effective from its issue date unless the court judged otherwise. Article (295) Article (305) No appeals may be filed against the court's preliminary judgment of insolvency or the decisions it issues during the insolvency procedures unless the law permitted that or if the court which issued the preliminary judgment or the decision was incompetent to issue it. The appeals are subject to the provisions provided in the Eleventh Section. Chapter 2 Restructuring Procedures Article (296) Article (306) 296-1 306-1 If the court issued a restructuring judgment, it must publish the judgment summary in one or more newspaper as decided by the court, it also assigns as per its judgment a restructuring supervisor or more from the experts registered in the experts roll to assist the debtor prepare the restructuring plan and solve the financial difficulties he faces. The plaintiff may request the nomination of a specific restructuring supervisor from the experts roll to be assigned. When the court deems the necessity of assigning one or more judges to supervise the restructuring procedures, for purposes of administering such procedures or because the degree and/or complexity of the state demands so; the court shall, based on its

own free discretion, assign one or more judges to supervise the restructuring procedures. The court defines the conditions of such assignment, including the nature and degree of the responsibilities delegated by court to the supervisor judge. 296-2 306-2 The court may assign more than one restructuring supervisor provided that it will not exceed two supervisors at the same time. Both restructuring supervisors in this case shall work jointly or individually as per the instructions issued by court in this regard. 296-3 306-3 The court may, if required, after consulting with the restructuring supervisor, delegate an expert to assist the latter perform his tasks provided that such expert must comply with the instructions stated in his assignment decision. 296-4 306-4 The restructuring supervisor and any expert are assigned from the parties registered in the experts roll. The court may order the assignment of any expert not registered in the experts roll if such roll did not include the expert who has the expertise required to be done. The following parties may not be assigned as restructuring supervisors or experts: (1) the creditor of the debtor, its spouse, brother-in-law or fourthdegree relative, (2) any party formerly convicted of any crime or felony of theft, embezzlement, breach, or any of the bankruptcy crimes provided in this law or perjury, (3) Any party who was, during the two previous years of the insolvency application, his partner, employee, accountant or representative. 296-5 306-5 Each of the restructuring supervisor and any expert are paid their fees in return for the tasks they provide as well as the reasonable expenses incurred from the debtor's assets known by the court. Yet, if the debtor has no known assets or such assets were not sufficient to settle the fees and expenses, the restructuring supervisor or expert may submit an

application to the Public Treasury to receive his entitlements. If the Public Treasury rejected such application, the court shall order the suspension of the procedures of restructuring or reject them if the procedure requester failed to deposit at the court's treasury on the set date the sum sufficient to cover all these fees and expenses. 296-6 306-6 The court may replace the restructuring supervisor and any expert or assign additional restructuring supervisors or experts as deemed necessary, either the creditor may also request the court to replace the restructuring supervisor or expert if he could prove that the continuous assignment of current restructuring supervisor or expert (as required) might damage the interests of all creditors. Chapter 3 Administering Assets of Debtor Article (297) Article (307) The restructuring supervisor undertakes, under the court's supervision, the commencement and following of restructuring procedures in summary, as well as making sure that he makes all the procedures and precautions providing the protection for the interests of the debtor and creditors equally. Article (298) Article (308) The restructuring supervisor shall administer the debtor's works during the restructuring procedures and work in his capacity as a hired representative in the name and on behalf of the debtor. In compliance with the provisions related to the rights, powers and duties of the restructuring supervisor provided in this section, the restructuring supervisor during his performance of such duties is subject to the same obligations under which the hired representative falls pursuant to the provisions stipulated in the Civil Transactions Law. Article (299) Article (309)

Any sum received by the restructuring supervisor, during the fulfillment of his duties within one day after collecting it, must be deposited in a deposit account at the bank defined by the court during no more than two working days from receiving such sum. If the restructuring supervisor delayed the deposit of any sums received to be deposited with no justification accepted by the court, the court obligates him to pay a daily interest defined by the court provided that it shall not exceed (12%) per annum on all the not deposited sums. Article (300) Article (310) 300-1 310-1 The inventory of the debtor's assets is made based on the restructuring supervisor and it must include the details of any security rights as well as a statement of any assets owned by the debtor which might be claimed by a third party. 300-2 310-2 The debtor helps the restructuring supervisor to estimate any of the debtor's assets required for providing the debtor and those he supports to sustain a reasonable standard of living, including: (a) The tools, books, equipments, devices, mechanisms and other necessary for the debtor which he personally uses in his job, works or profession; (b) The clothes, family needs, furniture, home sets, medications and provisions in the amount necessary for fulfilling the basic house needs of the debtor and those he provides. The restructuring supervisor has the authority to make the final decision in this matter. He shall further define any assets owned by a third party which the debtor might have as a way of trust. 300-3 310-3 The debtor's assets referred to in Item (310-2) and any retirement rights, whether obtained before or after the issue date of the preliminary judgment of insolvency, shall be separate from the restructuring procedures and remain possessed by the debtor. The

restructuring supervisor commits to consider, when determining such assets, the data provided by the debtor to the court pursuant to the provisions of Article (295). 300-4 310-4 Neither the debtor nor those he provides may be evacuated or expelled from the debtor's domicile unless the court permits so. Article (301) Article (311) 301-1 311-1 The debtor's spouse shall determine the contents of the funds he/she owns in the inventory pursuant to any rules provided in the applicable marriage law, the spouse must also submit any application for returning any moveable or immoveable funds to the court within (three) months from the date of publishing the judgment issued on restructuring the debtor's liabilities. 301-2 311-2 The spouse referred to in Item (311-1) may return his/her fixed and moveable assets from those of the debtor provided that he/she must prove to the court his/her unclaimed title of such funds. 301-3 311-3 The restructuring supervisor may submit an application to obtain the court's permission so that the restructuring procedures include any assets purchased by the debtor's spouse from the funds of the debtor within the (five-year) period prior to the issue of the preliminary judgment of insolvency. Article (302) Article (312) The court provides the restructuring supervisor with any information about the debtor it received before he was assigned. The debtor provides the restructuring supervisor with any additional details he did not notify the court about whether regarding his creditors or the debts sums as well as the details of any contracts under-execution where the debtor is a party thereof. The debtor should also notify the restructuring supervisor about any suspending or current legal procedures in which he is a part. The

debtor shall provide the information pursuant to this article within any the time limit set by the court. Article (303) Article (313) The restructuring supervisor prepares a record where he writes all the debtor's creditors known to him based on the information given to him pursuant to the provisions of Article (295) and Article (312). The restructuring supervisor provides a copy of the registers of such record to the court. The registers must state the address and claim sum of each creditor, in addition to defining all the creditors whose debts are secured by a senior or underlying mortgage preferred with the details of the securities decided for each of them alongside estimating the possible value for these securities when effected. It must be recorded in the register any setoff application which may be submitted as per the provisions of Article (315). Article (304) Article (314) Without prejudice to the rules of Public Order, the restructuring supervisor may obtain any information related to the debtor from any authorities, public institutions or financial firms. Each party who has information about the funds and works of the debtor commits to give the restructuring supervisor the reasonable information he might request including any documents and account books related to the debtor. The disclosure of this information pursuant to the provisions of this article is not deemed as a breach of any legal or consensual obligation to keep such information confidential. The restructuring supervisor should maintain the confidentiality of any information related to the debtor whenever its disclosure damaged the value of the debtor's assets and he should refrain from revealing them outside the restructuring procedures. Chapter 4 Deprivation of Administration & Disposition Right

Article (305) Article (315) 305-1 315-1 After issuing the judgment of restructuring the debtor's liabilities, the debtor is deprived from the authority to administer his works and the right to dispose his assets until the restructuring procedures terminate. The debtor may not during such period settle any payments equal or exceed five thousand dirham AED (5.000) or more without the court approval. The court may order the restructuring supervisor to publish such prevention in one or more daily newspaper when this publication is deemed necessary. This prevention is not applicable to any payments related to the costs of the debtor's living or those he provides, as well as to the settlement by setoff incurred by the fulfillment of mutual liabilities made before the judgment issued on restructuring the debtor's liabilities. 305-2 315-2 The court judges based on the application of any stakeholder the termination of any waiver by the debtor made in contradiction with the provisions of this article. The court may order any third party to return any assets to the debtor or issue any other order deemed necessary. The court should in all cases before issuing its judgment hear the statements of the parties related to the disposition before deciding the invalidity or authenticity of such disposition. Article (306) Article (316) No security rights granted by the debtor after issuing the restructuring judgment are valid unless the court previously permits the grant of these rights. Chapter 5 Termination of Interest & Legal Procedures Article (307) Article (317) 307-1 317-1 During the restructuring procedures, no lawsuits may be filed or followed or any legal or judicial procedures may be made against

the debtor in the cases not authorized by the law; besides, the judgment on restructuring the debtor's liabilities results in suspending all the judicial procedures against the debtor's assets. In compliance with Article (367), the creditors whose debts are secured by a senior or underlying mortgage preferred shall not be permitted to execute their securities against the debtor without the court's prior approval. 307-2 317-2 The judgment issued on restructuring the debtor's liabilities will suspend the following: (a) The payment of any legal or contractual interest, including the interest or indemnity due for settlement delay. (b) Any legal procedure against any party who granted a personal security to the debtor, or transferred his assets, for securing the debtor's liabilities until the court approves the restructuring plan or a judgment is issued on liquidating the debtor's assets. The court when approving the restructuring plan may order the extension of such suspension for a maximum period of (two years). Chapter 6 Fulfillment of Liabilities & Contracts Article (308) Article (318) 308-1 318-1 The judgment on restructuring the debtor's liabilities shall not cause the lapse of any term agreed upon to settle a debt due on the debtor, and it terminates any contractual provisions provides otherwise. 308-2 318-2 Regardless of any contradicting legal or contractual provision, the judgment on restructuring the debtor's liabilities shall not vacate or terminate any valid contract between the debtor and a third party; besides, the party contracting with the debtor should fulfill his contractual obligations unless he has, before the issue date of the judgment on restructuring the debtor's liabilities, pleaded not to execute since the debtor failed to fulfill his liabilities.

308-3 318-3 The restructuring supervisor during the restructuring procedures may request the contracting party to execute any valid contracts with the debtor in return for the fulfillment of the debtor's liabilities, any failure by the restructuring supervisor to execute such contracts will only incur the claim to indemnify the damages caused by the non-execution. The valid contract is automatically terminated in case the contracting party sent an (official) notice in that regard to the restructuring supervisor and such notice remained without a reply for (one) month at least. The valid contract is also automatically terminated if the bankruptcy restructuring supervisor addressed an official notice to the contracting party requesting him to state the reasons for keeping the contract valid, and such notice remained without a reply for (one) month at least. 308-4 318-4 The restructuring supervisor should when requesting the execution of any contract, verify that the debtor has the required funds to fulfill his liabilities provided in such contract. The restructuring supervisor should settle any sum payable by the debtor to the contracting party by virtue of the valid contract unless such party gave the debtor a settlement term. Article (309) Article (319) The court may, based on the application of the restructuring supervisor, terminate a valid contract where the debtor is a party thereof if that was necessary for protecting the debtor's assets or if such termination achieves an interest to all the debtor's creditors and does not unjustly damage the interests of the party contracting with the debtor. Article (310) Article (320) The debtor deposits at the court treasury a sum of money or, if the court deemed that appropriate, a security or guarantee in a form accepted by the court in order to cover the expenses and costs of the restructuring

procedures, including the fees of the restructuring supervisor and any expert according to the manner and date decided by the court. The Public Treasury may (based on the application of the procedure requester) provide the deposit, security or guarantee on behalf of the debtor if that serves the public interest. In case the financial sum, security or guarantee was not deposited as per the manner and date decided by the court, the court orders the cancellation or suspension of the restructuring procedures. Chapter 7 Publication of Restructuring Procedures Article (311) Article (321) The court notifies the restructuring supervisor about the decision issued on his assignment on a maximum date of the next day from the issued decision and the restructuring supervisor shall within (five) days from being notified about the assignment publish the decision issued on restructuring the debtor's liabilities in one or more daily newspaper as decided by the court. Besides, the restructuring supervisor should send during this period an invitation to all the creditors known to him so they send their claims as well as the documents supporting their debts within a period no less than (two weeks) and no more than (three) months from the invitation date. Article (312) Article (322) All the creditors even if their debts are not matured, secured by special insurances or fixed by decisive judgments, should deliver the restructuring supervisor within the period provided in Article (321) the documents of their debts attached with the statements of such debts and their insurances, if any, as well as their due dates and amounts in the national currency based on the current rate of exchange on the day of the issued judgment. If any of these debts was not finally set, the creditor

should provide a report about his claims to his best knowledge and discretion and mention that the submitted debt bond is a mere estimation. The restructuring supervisor reviews the estimated debt and he may request the concerned creditor to provide any other information or data. Article (313) Article (323) Either the creditor who received an in advance payment for his claim from any of the debtor's guarantors should deduct the received sum from any claim provided to the restructuring supervisor, and any of these guarantors may submit his claim in the limit of the sum he settles as a fulfillment of the debtor's debt. Article (314) Article (324) The restructuring supervisor may request either the debtor who submitted his claims pursuant to the previous provisions to provide clarifications regarding the debt, complete its documents, or modify its amount or description. He may further request the approval of any claims by an auditor or the creditor's accountant. The restructuring supervisor puts after the lapse of the date provided in Article (321) a list of the creditors who requested the participation in the restructuring procedures and states the amount of each debt as well as the documents supporting it, the included insurances, if any, and what he deems in relation to its acceptance, modification or rejection in addition to his suggestions regarding the method of payment if possible. The restructuring supervisor should submit this list to the court within (thirty) days from the issue date of the judgment on restructuring the debtor's liabilities, and on litigation such period may be extended or shortened as per the court's decision. A copy of such list is deposited at the court bureau. Article (315) Article (325) The creditor who did not provide the documents of his debt on the date provided in Article (321) may not participate in the restructuring

procedures unless he proves to the court in a satisfactory manner that: (1) the concerned creditor was not responsible for not providing his documents on the set date or (2) the creditor intentionally neglected to mention his claims in the list submitted to the court or the restructuring supervisor pursuant to the provisions of Article (295) or Item (296-4). Article (316) Article (326) The claims of any creditors not submitted pursuant to the provisions of Article (325) shall not be accepted or valid against the debtor or any of the guarantors who provided a guarantee as guarantors for fulfilling the restructuring plan. Chapter 8 Restructuring Plan Article (317) Article (327) 317-1 327-1 The debtor should, with the assistance of the restructuring supervisor, deposit a copy of the project plan of restructuring at the court bureau within (three) months from the issue date of restructuring order. A statement is attached to the project plan prepared by the restructuring supervisor where he clarifies if possible that the debtor's creditors will approve the project plan and if there is a feasibility to invite them to a meeting to study the project plan. The court may permit the time limit of depositing the project plan to be extended if required. 317-2 327-2 The project plan of restructuring may provide time limits for settling, deferring or rearranging the debt payment, or repealing any debts, reducing or cancelling interests or any other similar procedures except for those related to marriage debts. The court may permit the project plan of restructuring to state the join, establishing, release, selling or replacing any securities whenever deemed necessary to execute the project plan.

317-3 327-3 The period suggested for the restructuring plan may not exceed (three) years. Article (318) Article (328) 318-1 328-1 The court shall review the project plan of restructuring to ensure that it was suggested in good faith and did not unfairly damage all the creditors. 318-2 328-2 The court may request the debtor, with the assistance of the restructuring supervisor, to make any necessary amendments on the project plan of restructuring to comply with the provisions of Item (3281). If the court was convinced with the recommendation of the restructuring supervisor issued pursuant to the provisions of Item (327-2), that the plan complies with Item (328-1) and all the claims were finally determined by the court as per the provisions of Article (324), the court orders the restructuring supervisor to provide all the creditors, whose claims were accepted by the court, with a copy of the restructuring project plan. The court shall also invite the creditors to meet and vote on the project plan of restructuring at the time and place it sets and by virtue of a notice of a period no less than (twenty one) days. The invitation of this meeting will be published in one or more daily newspaper as decided by the court. Article (319) Article (329) If the court was convinced of the possible acceptance of the debtor's creditors of the restructuring project plan and executing it, as well as the said project complies with the provisions of Item (328-1), the court orders the restructuring supervisor to request the creditors submit their claims as preparation for the creditors meeting. Article (320) Article (330) If the court was convinced that it finally determined all the claims pursuant to the provisions of Article (324), the court orders the

restructuring supervisor to provide the creditors, whose claims were accepted by the court and who have known addresses, with a copy of the project plan of restructuring. The court further orders the restructuring supervisor to held a meeting and invite the foregoing creditors to vote on the project plan of restructuring at the time and place set by the court after notifying and giving them a time limit of (twenty one) days in minimum. The invitation for the said meeting is published in one or more daily newspaper, as decided by the court. The debtor should attend the meeting in person unless the court accepts the excuse/s he provides which justifies his non-attendance, in this case, the debtor can assign a representative to attend on his behalf. The debtor may suggest modifications on the suggestions during the meeting. Article (321) Article (331) The voting rights are limited to the owners of the debts whose claims were accepted. As for the creditors whose claims were not accepted, they shall have no right to vote unless the court permits so. Article (322) Article (332) None of the following parties shall be allowed to participate or vote in the creditors meeting, regardless of any debts payable by the debtor: (1) the debtor's spouse, (2) any party financially supported by the debtor, (3) any of the debtor's relatives by marriage or blood to fourth degree. Article (323) Article (333) The restructuring supervisor shall head the creditors meeting. During the creditors meeting, the head verifies the competence of the parties desire to vote and their claims shall be accepted or rejected accordingly. Article (324) Article (334) Any creditor may suggest any amendments on the project plan of restructuring during the creditors meeting. The creditors vote in the meeting where the suggestion of the amendment on the project plan of

restructuring is presented. The court may order to hold of any additional meeting for the creditors to vote on the suggested amendments. The court either permits or rejects any of the suggested amendments in preparation for approving the restructuring project plan. Article (325) Article (335) The project plan of restructuring shall not be approved except by the acceptance of the majority of creditors who possess at least two thirds of the debts value. Neither the creditors who did not participate in the voting nor their debts will be taken into consideration. Article (326) Article (336) The creditor, whose claims are accepted by the project plan of restructuring with no modification and which the project decides the full payment of these claims, is considered accepting the plan and shall not participate in any vote. Article (327) Article (337) In case the required majority was not obtained; yet, the court deemed after consulting with the restructuring supervisor to give the debtor a chance for amending the plan or suggesting a new restructuring plan, the court may or order the payment suspension of any the debts which the debtor shall settle within no more than two years, except for the marriage debts which the court accepted their due payment. The court within this period and based on good reasons may decide the termination of the restructuring supervisor assignment as well as the restructuring procedures and judge in such case the liquidation of the debtor's assets pursuant to the provisions of Item (351-1). Chapter 9 Approving & Executing Restructuring Plan Article (328) Article (338)

328-1 338-1 The court issues its decision on approving the restructuring plan if all the terms provided in the previous articles were available. 328-2 338-2 The composition plan approved as per the provisions of Item (338-1) shall be binding to all the creditors including each party who has the right to vote in the meetings of the creditors committee/s. Article (329) Article (339) 329-1 339-1 The court may order the termination or vacation of the claim of any creditor. 329-2 339-2 The court may near the payment terms of the creditors entitlements if such terms extended after the date set for finishing the restructuring plan. The court may further approach the payment terms of either the creditor entitlements who accepts to reduce his debt. 329-3 339-3 If the court refused to approve the restructuring plan, it decides in the same judgment the commencement of the procedures on liquidating the debtor's assets pursuant to the provisions of the Eleventh Chapter of this section. Article (330) Article (340) The restructuring supervisor must ensure the sale of any debts restricted by a security and decided to be sold as per the restructuring plan against the best price which can be obtained under the current circumstances in the market on the sale date; then, the restructuring supervisor deposits in a deposit account part of the sale revenues that represent the value of the claims secured by the sold assets. As soon as the restructuring plan is approved, the restructuring supervisor pays the creditors whose debts are secured by the sold assets from the revenues of selling such assets based on their preference. The court may order the settlement of interim payments for the creditors whose debts are secured by the debtor's assets in whole or part of their claims provided that the payment beneficiary

should provide a financial guarantee in the value of the settled sum issued by a licensed bank in the state. Article (331) Article (341) The debtor may offer his creditors an alternative security equal to the current one. In case the creditors did not accept such offer, the court though may order the replacement of this security if proved to it that the alternative security equals the current one. Article (332) Article (342) The restructuring supervisor must, within the period of ten days following the court approval on the restructuring plan, publish the decision in one or more daily newspaper as decided by the court provided that it includes a summary of the key terms of restructuring, the debtor's name, his domicile and the decision date of the restructuring approval. Article (333) Article (343) The debtor, with the assistance of the restructuring supervisor, shall deposit a copy of the restructuring plan at the court clerk. Article (334) Article (344) The restructuring plan includes the costs of living of the debtor, his family and those he financially supports during the period of restructuring plan. Article (335) Article (345) The court determines the fees of the restructuring supervisor and any expert assigned by the court, after consulting with the committee based on the nature of the work required by the restructuring supervisor and any expert. The court also defines the charges and costs payable by the debtor. The fees payment of the restructuring supervisor and any expert is suspended when each completes the tasks delegated to them. Article (336) Article (346)

The court shall assign a restructuring supervisor to work as an observer of the restructuring plan during its execution period. The plan observer shall supervise the progress of the restructuring plan and he should inform the court of any execution failure. The observer can obtain any data required to carry out his tasks. The plan observer provides a report by the end of every (six) months about the plan execution progress as well as a copy of the report to the court and creditors. Article (337) Article (347) If the plan observer deemed the necessity of making any amendments thereof and such amendments will modify any legal or contractual right for any party, he should obtain the court's approval in a session to which all the creditors affected by these amendments shall be invited as per a notice of no less than (twenty one) days. The court issues a decision on accepting or rejecting the amendment wholly or partly. Article (338) Article (348) As soon as all the pledges included in the restructuring plan are fulfilled or executed, the court writes, based on the request of the plan observer or any stakeholder, that the restructuring plan was executed. Chapter 10 Vacating or Terminating Restructuring Plan Article (339) Article (349) 339-1 349-1 The court issues a judgment on terminating the restructuring plan if found after approving it that the debtor acted in bad faith including concealing or wasting any part of his funds or providing false data about his debts, properties or assets. The court may issue any orders accordingly as deemed proper. The termination lawsuit is filed pursuant to the provisions of this Item by any stakeholder within the period of (six) months from the day of discovering such act. In all cases, the application for terminating the plan shall not be accepted if submitted after the lapse

of two years from the date of issuing the decision on approving the restructuring plan. 339-2 349-2 If the termination of the restructuring plan was declared, any guarantor who sponsored the plan execution will be acquitted; besides, the creditors shall not be obligated to return any sums they received from the debtor as settlement of their due debts if such sums were received before deciding the termination of the restructuring plan. 339-3 349-3 If the debtor failed to carry out the restructuring plan, any stakeholder may submit an application to the court for terminating it. Yet, the termination of the restructuring plan as such shall not result in the automatic acquittance of the guarantor who sponsored the execution of restructuring plan. 339-4 349-4 The court judges the liquidation of the debtor's assets when vacating or terminating the restructuring plan pursuant to the provisions of this article. Article (340) Article (350) 340-1 350-1 The court may terminate the restructuring procedures based on the debtor's request in case of the absence of any base to commence and complete the restructuring procedures. 340-2 350-2 Otherwise, the restructuring procedures are terminated when the restructuring supervisor fulfills his obligations and completes the restructuring plan. Chapter 11 Judgment of Liquidating the Assets of Debtor Article (341) Article (351) 341-1 351-1 If the restructuring of the debtor's liabilities was clearly not possible, including the insufficiency of the debtor's assets, the court issues a judgment on liquidating the debtor's assets pursuant to the provisions of Article (303).

341-2 351-2 The court liquidates the debtor's assets according to the provisions of the following articles. 341-3 351-3 The liquidation of the debtor's assets starts from the issue date of liquidation judgment, and continues until the debtor is acquitted pursuant to the provisions of Article (401). Article (342) Article (352) The liquidation of the debtor's assets starts pursuant to the provisions of Article (372) to Article (374) when the court issues a judgment in that regard as per the provisions of Article (303) or Item (339-3) or Item (3494). The income of liquidating the debtor's assets is used to settle his liabilities then he shall receive any excess sums. Article (343) Article (353) The court orders the publication of the judgment summary of liquidating the debtor's assets in one or more daily newspaper as decided by the court and assigns in its judgment a liquidation supervisor from the experts registered in the experts roll. The applicant may nominate a specific liquidation supervisor to be assigned from the experts roll. If the court deems the necessity of assigning a judge to supervise the liquidation procedures, with a view to administer such procedures or because the degree and/or complexity of the situation demands so, the court based on its full discretion assigns a judge to supervise the liquidation. The court provides the terms of such assignment, including the nature and degree of the responsibilities set by the court to the supervising judge. Article (344) Article (354) 344-1 354-1 After issuing the judgment of the debtor's insolvency and liquidating his assets, the debtor is deprived from the power to manage his works and the right to dispose his assets until the liquidation procedures are complete. The liquidation supervisor shall, when assigned, manage the debtor's works. The judgment on the debtor's insolvency and

liquidation (ought to) prevent the debtor from managing or disposing his assets with no need for any other procedure and The liquidation supervisor shall manage the debtor's assets during the liquidation period. The court judges based on the application of any stakeholder the vacation of any waiver made by the debtor on his assets without the approval of the liquidation supervisor if such waiver occurred after issuing the judgment of the debtor's insolvency bankruptcy and liquidation of his assets; the court may further order a third party to return any assets possessed by the debtor or issue any other order as deemed necessary. In case of signing any of the transactions provided in this article, the court should take into consideration any information available by the third party regarding the financial status of the debtor. 344-2 354-2 After issuing the judgment of the debtor's insolvency and liquidation, the debtor shall not be allowed to settle any payments, grant any securities or dispose his assets without obtaining the prior approval of the court or liquidation supervisor. The liquidation supervisor publishes the prevention in one or more daily newspaper within (three) days from the date of issuing the judgment on the debtor's insolvency and liquidation, as decided by the court. Article (345) Article (355) Based on the application of any stakeholder, the court deems any act done in contradiction to the provisions of Article (353) vacated and invalid. Article (346) Article (356) 346-1 356-1 Regardless of Article (353), and if the debtor resisted or tried to prevent the liquidation supervisor from managing his assets, the court may order the following: (a) Attaching any assets belong to the debtor;

(b) Attaching any books, papers, records or other relevant information in connection to the debtor's assets or works and which is owned by or under the control of the debtor or any other party; and (c) Freezing any bank accounts in the name of the debtor or any other accounts deemed to have funds owned by the debtor. 346-2 356-2 Any party, who executes an order issued by the court pursuant to the provisions of Item (356-1) and for purposes of the same, may enter any site that has or expected to have any assets or funds attached by virtue thereof, or any other personal estates of the debtor that has or expected to have anything which should be attached as per the foregoing order. 346-3 356-3 After issuing the judgment of the debtor's insolvency and liquidation, and if the court was convinced that any properties or estates included in the financial debts of the debtor, or any books, papers, records or other information related to the funds or works of the debtor, are concealed in a site not owned by the debtor, the court may issue an order to inspect these sites to obtain the estates, books, papers, records or other relevant information. 346-4 356-4 The order issued pursuant to the provisions of Item (356-3) is executed in the manner and terms provided in that order.

Chapter 12 Termination of Interest & Legal Procedures Article (347) Article (357) 347-1 357-1 It may not, during the insolvency and liquidation procedures, file or follow any lawsuits or undertake any legal or judicial procedures against the debtor in the cases other than those permitted by law. The judgment on liquidating the debtor's assets shall suspend the execution of all judicial procedures against such assets. In compliance with the

provisions of Article (372), the creditors whose debts are secured by a senior or underlying mortgage preferred shall not be allowed to apply their securities on the debtor's assets without obtaining the court's prior approval. 347-2 357-2 The judgment issued on the debtor's insolvency and liquidating his assets shall suspend the following: (a) The validity of the legal and contractual interest including the due interest or due indemnity for payment delay; and (b) Any lawsuit filed against any party who gave personal guarantee, or transferred his assets as a guarantee for the debtor's liability, until the court issues a judgment on liquidating the debtor's assets. If the court issued an order to liquidate the debtor's assets, the legal procedures filed against these parties shall be suspended in addition to the interest for a period of no more than (two years). 347-3 357-3 The suspension of legal procedures and interest provided in Items (357-1) and (357-2) shall not be applicable to any lawsuits or legal transactions related to matrimonial debts or assets.

Chapter 13 Fulfillment of Liabilities & Contracts Article (348) Article (358) 348-1 358-1 The judgment issued on the debtor's insolvency and liquidation shall causes the mature of the debts terms even if they were not due at the time of judgment issue. Every agreement stating otherwise will not be taken into consideration and such agreement is deemed as if not made. 348-2 358-2 The court may, based on the application of the liquidation supervisor, order the termination of a valid contract between the debtor and the contracting party if that was necessary to protect the debtor's

assets or if such termination benefits all the creditors of debtor and does not grossly damage the interests of the party contracting with the debtor. 348-3 358-3 If the debtor sold, before issuing the judgment of commencing the insolvency procedures and liquidation, any fund he owns and such fund was subject to the no-transfer of property term, then transferred the possession of that fund to the purchaser, the latter may request the authenticity and effect of the sale contract. 348-4 358-4 If the debtor purchased, before issuing the judgment of commencing the insolvency procedures and liquidation, and such fund was subject to the no-transfer of property term, then the seller transferred the possession of that fund to the debtor, the liquidation supervisor may request the authenticity and effect of the sale contract. If the liquidation supervisor knew that the transferred fund could be subject to a huge decrease in its value, he should take any reasonable procedures to sell that fund without delay. Article (349) Article (359) The court may call any party who has information related to the insolvency and liquidation procedures to appear before it that includes the current or previous spouse of the debtor, any party who possesses or believed to possess any properties or funds that entered the financial obligation of the debtor or any party who is a creditor of the debtor. Theses parties shall provide the court with any information they possess and the court requests. Article (350) Article (360) Any liquidation pursuant to the provisions of Item (351-3) is subject to the provisions of Items (310-2) and (310-4). Article (351) Article (361) The liquidation supervisor may undertake any legal or judicial procedures to claim any properties contained in the debtor's financial obligation

including any properties possessed by or transferred to the debtor since the judgment issued on his insolvency and liquidating his assets. Article (352) Article (362) Regardless of Article (360), the liquidation supervisor may request any tools, books, vehicles and equipments necessary for the debtor's profession by virtue of a written notice. The liquidation supervisor is entitled to sell these properties to gain any additional value and obtain a replacement for them in return for an accepted price. Article (353) Article (363) The court, when deems necessary, may order entering any part of the debtor's funds (including any source of his income) to his financial obligation for the period set in the order. The judgment of the debtor's insolvency and his assets liquidation shall not include his contractual rights and they remain owned by him. The judgment issued by the court or any decision made for executing such judgment shall not cause the reduction of the debtor's income to less than the minimum limit deemed necessary by the court for fulfilling the living needs of the debtor and those he provides. Article (354) Article (364) 354-4 364-1 The liquidation supervisor may submit an application to the court during the insolvency and liquidation procedures to obtain a judgment an order to sell the debtor's house. The court should, during the reviewal of this application, take into consideration the provisions of Item (364-2). The court may order the sale delay of the debtor's house for a period no more than six (6) months to allow the debtor provide an alternative house for him, his family and those he supports and live with him.

354-2 364-2 If the liquidation supervisor submitted an application to the court pursuant to the provisions of Article (364), the court shall, when reviewing this application, consider the following: (a) Interests of the debtor; (b) Any act done by any of the debtor's current or previous spouses that caused his insolvency or assets liquidation; (c) Expenses payable for the debtor's current or previous spouses; (d) Expenses payable for the debtor's children or those he supports; or (e) Other human and social aspects related to the debtor. Article (355) Article (365) If an order a judgment was issued pursuant to the provisions of Article (364) and the liquidation supervisor could not sell the debtor's house, the said house shall be considered part of the debtor's assets subject to any rights for the debtor's spouse in the sale outcome of the debtor's house in the future. Article (356) Article (366) If an order a judgment was issued pursuant to the provisions of Article (364), the liquidation supervisor shall take the procedures for the debtor's interest to maintain his house, which on the judgment date of the insolvency (bankruptcy/insolvency) of the debtor was the sole or main domicile for him, those he supplies or his spouse, within (three) years from the issue date of that judgment. If the liquidation supervisor did not take such procedures during the set period, it may not in this case take any investigation procedure and the debtor's domicile will automatically be his right. Chapter 14 Publishing (Bankruptcy/Insolvency) Procedures, Liquidating Debtor's Assets & Requesting Information Article (357) Article (367)

The liquidation supervisor shall, within (five) days from being assigned, publish the procedures of (bankruptcy/insolvency) and liquidating the debtor's assets in one or more daily newspaper as decided by the court. The supervisor shall invite the creditors known to him to send their claims and the documents supporting their debts within a period no less than (two weeks) and no more than (three) months. Article (358) Article (368) All the creditors who submitted their claims before issuing the judgment on the debtor's insolvency and liquidating his assets

(bankruptcy/insolvency) should deliver the liquidation supervisor, within the time limit set in the invitation addressed to them pursuant to the provisions of Article (367), their debts' documents attached to a statement of these debts, their insurances, if any, as well as their due dates in the national currency as per the current price of exchange on the issue date of the judgment on the debtor's insolvency and his assets liquidation. (bankruptcy/insolvency). The documents of their debts should include a statement of the payable sums and those not yet payable, their due dates as well as any other documents supporting the creditors' claims. If such claims were not finally determined, the creditor provides an estimation of his claims to his best knowledge and discern, and mentions that what he presented is a mere estimation. The foregoing estimation shall be subject to the audit of the liquidation supervisor he chooses. Article (359) Article (369) Either the creditor who received receives an in advance payment for his claim from the debtor's guarantors should deduct the sum received from any claim submitted to the liquidation supervisor and any of these guarantors can present his claims in the limits of the sum settled for fulfilling the debtor's debt. Article (360) Article (370)

The liquidation supervisor may request either the creditor who submitted his claims pursuant to the former provisions to provide clarifications about the debt, complete its documents, or modify its value or descriptions. He may further request the approval of any claims by the auditor or accountant of the debtor. The liquidation supervisor, after the lapse of the date set in Article (367), prepares a list of the creditors' names that presented their claims to the liquidation supervisor and states the amount of each debt, its supporting documents and the insurances securing it if any, as well his opinion in accepting, modifying or rejecting it in addition to his suggestions regarding its payment method if possible. The liquidation supervisor should present this list to the court within the period specified by the court. Article (361) Article (371) 361-1 371-1 The creditor, who did not present the documents of his debts on the date provided in Article (367), may not participate in the procedures of declaring the debtor's insolvency and his assets liquidation bankruptcy unless he proves in a satisfactory manner to the court the following: (1) the concerned creditor was not responsible for not presenting the documents on the set date or (2) the debtor omitted on purpose to mention his claims in the list provided to the court or the liquidation supervisor as per the provisions of Article (295) or Item (2964). 361-2 371-2 The claims of any of the creditors not submitted pursuant to the provisions of Item (371-1) shall not be accepted nor valid against the debtor or any of the guarantors who provided a guarantee to secure the fulfillment of the restructuring plan of the debtor's liabilities. Chapter 15 Liquidation Article (362) Article (372)

362-1 372-1 The liquidation supervisor shall liquidate all assets owned by the debtor except for those the debtor maintains pursuant to the provisions of Article (363) and Article (364). 362-2 372-2 If the debtor inherited assets after issuing the judgment on liquidating his assets, the bankruptcy supervisor liquidates such assets. The liquidation supervisor should use the revenues from liquidating such assets to fulfill any claims on the debtor under the supervision of the court. 362-3 372-3 The liquidation supervisor shall liquidate the debtor's assets, including the audit of the creditors' claims and determine them in a final manner pursuant to the provisions of Article (370). The liquidation supervisor shall not make such audit if he found that the revenues from selling the debtor's assets will be used to settle any legal fees or secured debts. 362-4 372-4 The liquidation supervisor shall sell the debtor's assets in a public auction under the court's supervision within (twelve months) from the date of determining the creditors' claims pursuant to the provisions of Item (372-1), without prejudice to any decision made by the court pursuant to the provisions of Article (364) to Article (366). 362-5 372-5 If the liquidation supervisor did not start selling the debtor's assets restricted by the guarantee within six months from the issue date of the judgment on liquidating the debtor's assets, the creditors, owners of the security, shall, upon presenting their claims and even if not accepted yet, exercise their right to file a separate lawsuit for executing their securities. 362-6 372-6 Despite what is provided in the provisions of Item (372-5), and if the liquidation supervisor found that the outcome of selling any assets restricted by security shall not be sufficient to cover the expenses of the liquidation supervisor and any other relevant expenses regarding

the said sale, he may choose not to start such sale and inform the creditor owner of the security that his security is still on. 362-7 372-7 The liquidation supervisor should notify the creditor, owner of security, in writing and promptly about any decision he makes for not proceeding in selling the secured assets pursuant to the provisions of Item (372-5). 362-8 372-8 The following parties may not directly or through an agent purchase or offer to purchase whole or part of the debtor's assets offered for sale pursuant to the provisions of Item (372-4), they may not directly or indirectly within the period of five years following the sale, purchase whole or part of these sold assets: (a) the debtor, (b) the debtor's spouse, or any of the debtor's relatives by marriage or blood to the fourth-degree, or (c) any party who was during the two years prior to issuing the preliminary judgment of debtor's insolvency to commence the personal insolvency procedures, an employee, accountant or agent of the debtor. Article (363) Article (373) The liquidation supervisor should notify the court and debtor regularly or at least every (three) months about the progress of liquidation procedures.

Article (364) Article (374) 364-1 374-1 The liquidation supervisor shall distribute the liquidation revenues and settle preference between the creditors with consideration to any disputes filed before the court. The liquidation supervisor should obtain the court's prior approval on such distribution. 364-2 374-2 A statement of the claims, that must be considered when distributing the liquidation outcome, is presented to be reviewed by the creditors. The distribution is made upon the availability of sufficient funds from liquidating the debtor's assets and after obtaining the court's prior approval. The cash funds related to the claims awaiting the court's

approval shall be saved in the court treasury until the court issues a decisive judgment in this regard. 364-3 374-3 Any sum settled for the creditors is subject to the provisions of preferred Debt Settlement Preference provided in the Seventh Section. The liquidation supervisor may settle whole or part of the claims of the debt secured by a senior or underlying mortgage preferred provided that such debt was finally accepted; besides, the creditor beneficiary from settlement should provide a financial security issued by one of the banks operating in the state in the same value of the sum paid for him. The creditor whose debt is secured by a senior or underlying mortgage preferred must further receive the revenues gained from selling the assets securing his debt even if they exceed the in advance payment he received. If the revenues of the secured debts were not sufficient to fulfill the whole debt secured by a senior or underlying mortgage preferred; then, the remaining unsettled debt takes the class of normal debt. The liquidation supervisor must deliver the debtor any excess revenues from the liquidation after fulfilling all his liabilities. 364-4 374-4 The liquidation supervisor may, after obtaining the court's permission and hearing the debtor's statements or being duly notified to hear same but did not attend on the set date, make an arrangement or settle any dispute affecting the creditors, including the disputes related to fixed assets. If the value of the fund subject to arrangement or solution was not determined or exceeded (five thousand) dirham, the court's prior approval on the arrangement or dispute settlement must be obtained. Chapter 16 Termination of Procedures Article (365) Article (375) If the outcome of the debtor's funds was sufficient to fulfill the rights of creditors, the court issues an order a judgment on terminating the

procedures of insolvency and liquidation; besides, all effects of insolvency provided in this section will end. (bankruptcy/insolvency). Article (366) Article (376) If the outcome of the debtor's funds was not sufficient to fulfill the rights of creditors, or if the debtor has no funds except those defined in Article (363) and Article (364), and the debtor was acquitted pursuant to the provisions of Article (401) or Article (402), the court issues a judgment an order to terminate the procedures of insolvency and liquidation (bankruptcy/insolvency) because of insufficiency of funds. Article (367) Article (377) 367-1 377-1 After terminating the insolvency and liquidation as per the provisions of Article (376), (bankruptcy/insolvency) procedures, the debtor remains under any restrictions that might be taken pursuant to the provisions from Article (387) to Article (391) for the period of three years from the issue date of judgment on insolvency and liquidation, (bankruptcy/insolvency), or for a shorter period as according to what is decided by court in its judgment, based on the debtor's request. 367-2 377-2 After terminating the procedures of insolvency and liquidation, (bankruptcy/insolvency) procedures, Articles (405) to Article (408) shall remain applicable. Chapter 17 Terminated & Terminable Transactions Article (368) Article (378) 368-1 378-1 The provisions of this section are applicable in the following cases: (a) Issuing an order on restructuring the debtor's assets or a judgment on his insolvency and liquidating his assets at the time of the act or if the order or judgment was issued as a result of this act; and

(b) The act happened during the period of (two years) prior to issue date of the order or judgment. Article (369) Article (379) 369-1 379-1 The following acts done by the debtor shall be deemed invalid: (a) Any gifts or transactions he makes with no return; (b) Any acts he does in return for his marriage; (c) Any transactions where the debtor's liabilities noticeably exceed the other party's liabilities, whether such liabilities were material or tangible; (d) Settling any debts before their due date regardless of the method of payment; (e) Settling payable debts in a method different from the one agreed upon between the debtor and his creditor or the one usually followed to settle that kind of debts; (f) Arranging any kind of the new security to secure the settlement of an old debt; and (g) Arranging a mortgage or other personal or material insurances on any of the debtor's funds.

Article (370) Article (380) The court may judge the termination of any act of the debtor regarding his disclaim of any of his assets or rights, his settlement of any payable debt or doing any other act in return (even if not subject to the provisions of Article (379)) in case any of these acts prejudiced the rights of the creditors, and the party contracting with him knew or was supposed to know upon acting that the debtor was in the state of payment suspension or insolvency, or will probably be in such two states as a result of this act. Article (371) Article (381)

371-1 381-1 If the party contracting with the debtor referred to in Article (380) was a party related to the debtor, there will be a decisive presumption that he knew about the debtor's payment suspension or being in the state of insolvency or the possibility of having either case. 371-2 381-2 For purposes of Article (380) and what follows, the party shall be related to the debtor if: (a) It was the debtor's spouse, even if the marriage happened after the act or was terminated during the late year before such act; (b) Any relatives of the debtor or of his spouse; (c) The spouse of any relative of the debtor or of his spouse; (d) Ancestries or descendants of the debtor or any of the ancestries or descendants of any of his spouses referred to in Item (a); brothers or halfbrothers of the debtor from either parent or the brothers or half-brothers from either parent for any of his spouses referred to in Item (a); as well as the spouses of the foregoing parties; (e) Any party financially provided by the debtor; (f) Any party who lives in the debtor's house or was living in same during the year prior to the act. 371-3 381-3 For purposes of Item (381-2), a party is a relative of another if such party was a brother, sister, uncle (father-side), uncle (motherside), cousin, predecessor or direct successor, since any relation between relatives from one side is considered as a blood one, and the son of a spouse as is its son. The reference in Item (381-2) to the spouse includes the ex-spouse. Article (372) Article (382) The court issues a judgment on terminating the act pursuant to the provisions of Article (379) or Article (380), and delegates in the same judgment the contracting party to return the assets, funds, securities, the value he received or the revenues incurred by them, to the debtor's assets.

Article (373) Article (383) 373-1 383-1 The liquidation supervisor or the concerned damaged creditor shall file the termination lawsuit as per the provisions of Article (379) or Article (380). 373-2 383-2 The liquidation supervisor can file a lawsuit or submit an order on a pleading to prevent the executing any act, settling any sum, or entering any terminated transaction pursuant to the provisions of Article (379) or terminable as per the provisions of Article (380). Article (374) Article (384) 374-1 384-1 The court may automatically judge the vacation or termination of the act according to Article (379) or Article (380) or issue an order pursuant to the provisions of Article (382), whether or not the liquidation supervisor or the damaged creditor filed a lawsuit pursuant to the provisions of Article (383). Article (375) Article (385) 375-1 385-1 The creditor who desires to file a lawsuit pursuant to Item (383-1) must prove that he owns sufficient funds to settle the legal fees.

Article (376) Article (386) 376-1 386-1 The liquidation supervisor may replace the creditor in any legal procedures started by the latter as per the provisions of Item (3831), if the debtor became under the insolvency procedures after the creditor submits to obtain an order pursuant to the provisions of Item (373-2). 376-2 386-2 The court decides, when judging the vacation or termination of the act pursuant to the above-mentioned provisions, the return of the funds waived by the debtor as per this act. The returned funds and revenues incurred therefrom shall form part of the debtor's financial obligation and are included in the liquidation.

376-3 386-3 Any lawsuit must be filed pursuant to the provisions of Article (379) or Article (380) before terminating the liquidation procedures, and in all cases during (two years) from the issue date of liquidating the debtor's assets. Chapter 18 Precautions Following Judgment of Liquidating Assets of Debtor Article (377) Article (387) 377-1 387-1 Without prejudice to the provisions of Article (388), the court may issue a judgment to execute the following: (a) Stopping or preventing from travelling the debtor who has a judgment issued against him on liquidating his assets, and that includes the debtor who was acquitted but his assets are still under the liquidation supervisor control; and/or (b) Seizing any books, papers, registers, or other information, funds or relative goods possessed by the arrested party by virtue of the order provided in this article, 377-2 387-2 The court permits the detention of the party arrested as per the said order, and keeping the seized items in the manner and for the period ordered by the court. Article (378) Article (388) The court orders to undertake any of the precautions set in Article (387) against the debtor if the court was convinced that he committed any of the following actions or acts: 378-1 388-1 If there are reasonable reasons to believe that the debtor escaped or intends to escape in order to avoid or delay the settlement of any of his debts or appearing before the court, or with a view of evading, deferring or suspending any procedures of insolvency, liquidating his assets or auditing his works;

378-2 388-2 There are reasonable reasons to believe that the debtor intended to dispose any of his assets in order to prevent the liquidation supervisor from possessing them or delaying his possession of the same; 378-3 388-3 There are reasonable reasons to believe that the debtor concealed or intended to conceal or waste any of his assets or any books, papers, or registers or other relative information which might be useful to the creditors during the liquidation procedures or regarding managing the debtor's assets; 378-4 388-4 If the debtor, without obtaining the approval of the liquidation supervisor, transferred any assets he possessed and their value exceed five thousand dirham; AED (5.000); 378-5 388-5 If the debtor failed to appear before the court, after being duly notified to attend or did not execute any of the decisions issued by court without any acceptable excuse. Article (379) Article (389) If the court found, while reviewing any evidence obtained as per the provisions of Article (388) or this article: 379-1 389-1 That a party possessed any stocks or estates included in the debtor's assets, it may then, based on the application of the liquidation supervisor, order that party to deliver whole or part of the stocks or estates in his possession to the liquidation supervisor, on the time, manner and conditions ordered by the court; or 379-2 389-2 If the party was indebted to the debtor, it may then based on the request of the liquidation supervisor order such party to settle the full or part of due sum to the liquidation supervisor, as fulfillment to the whole debt or other, on the time, manner and conditions ordered by the court. Article (380) Article (390)

380-1 390-1 The debtor who has a judgment for liquidating his assets issued against him or such assets were controlled by the liquidation supervisor, may not be a manager of a company, participates directly or indirectly in its management, promotes it or be related to its corporation, unless he obtained the court's permit in that regard. 380-2 390-2 Neither the party who has against it a judgment on liquidating its assets and it is not acquitted nor the one who has an order against it to impose any precautions related to liquidating its assets, may be a manager of a company, or participates directly or indirectly in its management, promotes it or be related to its corporation in any aspects whatsoever. Article (381) Article (391) 381-1 391-1 The court, facing a lawsuit filed on liquidating the debtor's assets, may deprive the following parties exercising any of the rights set in Item (391-2): (a) The debtor who committed any of the crimes provided in this section; (b) Any party who helped the debtor committing any of the crimes provided in this section; (c) The parties mentioned in Article (389) and Article (390). 381-2 391-2 The deprivation order provided in Item (391-1) prevents the party which the order was issued against it from directly or indirectly operates, administers, controls or takes any role in managing any company incorporated as per the provisions of Companies Commercial Law, it further prevents it from exercising any other business for a period no more than (five) years. The name of the party subject to the deprivation order is added to the list of the parties recorded in the register provided in Item (3-6(a)) from the First Section.

381-3 391-3 The court may also order any party under the deprivation order to sell his shares or dispose any other interests he has in any form or other interests related to other commercial business. 381-4 391-4 The court may prevent any party under the prevention order to occupy a public job. Such prevention shall remain effective during the term of the prevention order. Article (382) Article (392) If the debtor's assets, who has a judgment on liquidating his assets, were not sufficient to cover his liabilities, the court may order that any of the parties who intentionally helped the debtor committing any of the crimes defined in this section are individually or collectively responsible for the debtor's bankruptcy; the court may also obligate these parties to pay a financial sum determined by the court. The judged sum shall be part of the debtor's assets when the insufficiency of these assets to cover his liabilities is partly or fully caused by the assistance given by them. Chapter 19 Crimes & Penalties Article (383) Article (393) 383-1 393-1 The debtor is guilty of a crime when proved to commit any of the following acts after submitting the application for commencing the insolvency procedures or when preparing to submit it: (a) Concealed from the liquidation supervisor or the court whole or part of his assets or any debt payable by or for him; (b) Disclaimed any of his assets whose value equals (five thousand) dirham or more, and which he should have delivered to the liquidation supervisor; (c) Disposed the books, documents or records related to his assets, modified them or did not present them to the liquidation supervisor or the court;

(d) Provided any false data or did not present any substantial data for the liquidation supervisor or the court regarding his financial debts; (e) Left or prepared to leave the territories of the state with a view to evade his financial liabilities or obligations pursuant to the insolvency procedures; (f) Obtained a mortgage in a value exceeds (five thousand) dirham without expressing his financial status to the party from whom he obtained the mortgage; or (g) Acted in a way other than the one mentioned in Items (a) to (f) in this article for cheating or deceiving any of the creditors. 383-2 393-2 He is punished for any of the crimes specified in this article by detention for a period no more than (three years) and a penalty that does not exceed (two thousand) dirham or by either punishments. Moreover, the court may judge accordingly against the convicted by depriving him from exercising any of the rights provided in Item (391-2).

Article (384) Article (394) 384-1 394-1 The liquidation supervisor is guilty of any of the following crimes when proved: (a) Appropriating by fraud any assets or funds owned by the debtor; (b) Stating intentionally false information related to the debtor; (c) Harming intentionally the interests of the creditors or the debtor by using the sums he received as part of the debtor's financial debt or for any other reason; or (d) Using his powers for purpose contradicts the interests of creditors or the debtor intentionally. 384-2 394-2 He is punished for any of the crimes stated in this article by detention for no less than (one year) and no more than (three years) as well as a penalty does not exceed (five thousand) dirham.

384-3 394-3 The acts of the liquidation supervisor that made him commit any of the crimes provided in this article are deemed null; and the court shall decide the nullification of such based on the application of any stakeholder. Article (385) Article (395) 385-1 395-1 Any stakeholder may submit an application to the court if the liquidation supervisor commits one of the following acts: (a) Acted or still acts in an unjust manner, or suggested to act in an unjust manner, to damage the interest of such party. (b) Does not perform his tasks in the qualification usually required from him; or (c) Misused any funds or estates belong to the debtor; retained them or breached any liability due for the debtor. 385-2 395-2 When submitting an application as per the provisions of Clause (395-1), the court should either reject the application, or issue any proper order, including the order on terminating the assignment of the liquidation supervisor and obligating him to pay a specific payment as way of a compensation, such sum is added to the debtor's assets. Article (386) Article (396) 386-1 396-1 Any creditor of the debtor or any party who claims he is a creditor to the debtor, is guilty of one of the following crimes when proved against him: (a) If he filed a false or formal claim against the debtor; (b) If he intended to exaggerate his debts; (c) If he signed with the debtor an agreement that gives him special privileges but damages the other creditors with his knowledge of that; (d) If he participated in any meetings or voted for any decisions related to the debtor and knew that he is legally prohibited to do so.

386-2 396-2 He is punished for any of the crimes stated in this article by detention for no less than (six) months and no more than (two years) as well as a penalty does not exceed (three hundred thousand) dirham. Article (387) Article (397) 387-1 397-1 Any lawsuit must be filed pursuant to the provisions of Article (387) to Article (396) within (three) years from the preliminary judgment date issued on the debtor's insolvency. Article (388) Article (398) 388-1 398-1 Any civil or commercial transactions related to the insolvency procedures of the debtor remain separate from any penal lawsuit filed as per the provisions of Article (393) to Article (396), and shall not be referred to the Penal Court unless the law provided otherwise. 388-2 398-2 No amendment on the law of insolvency procedures shall affect any penal lawsuit filed as per the provisions of Article (393) to Article (396), unless the law provided otherwise. Article (388) Article (398) The court may issue an order order as per the provisions of Article (393) to Article (396) to return any assets of the debtor, including any right or claims related to these assets, which were transferred, embezzled, or appropriated by fraud. Article (390) Article (400) The court deducts the charges and expenses of any application submitted by the liquidation supervisor as per the provisions of this section from the debtor's funds. In case such funds are not sufficient to cover those charges, they shall be bore by the Public Treasury. Chapter 20 Quittance of Debtor Limits & Effects Article (391) Article (401)

391-1 401-1 The debtor is acquitted from insolvency after the lapse of (one year) from the date of publishing the preliminary judgment on his insolvency. 391-2 401-2 If the liquidation supervisor submitted to the court before the lapse of the period mentioned in clause (401-1) a report indicating that the investigation of the debtor's behavior and works as per the provisions of Article (409) is unnecessary or that the investigation is over, the debtor is acquitted starting from the date of submitting such report. 391-3 401-3 The court may order issue based on the request of the liquidation supervisor an order to suspend the period provided in Clause (401-1) for a specific term or until a procedure is done or a particular situation is established. 391-4 401-4 The court issues its order an order as per the provisions of Clause (401-3) only when it is convinced that the debtor failed or fails to fulfill any obligations set pursuant to the procedures of restructuring or liquidation provided in this section. 391-5 401-5 The provisions of Clause (401-1) to Clause (401-4) are not applicable to the debtor whose assets are subject to a liquidation judgment and who is convicted of any of the crimes provided in the previous chapter. Besides, the debtor is not acquitted from the debts in this case unless as per an order issued by the court pursuant to the provisions of Article (402). Article (392) Article (402) 392-1 402-1 The debtor may submit an application to obtain a judgment from the court to be acquitted in the case included as per Clause (401) at any time after the lapse of (five years) from the date of publishing the preliminary judgment on his insolvency. 392-2 402-2 The court may, based on the application submitted as per the provisions of Clause (402-1), do the following:

(a) Reject to acquit the debtor from insolvency; (b) Issue a judgment to acquit him completely; or (c) Issue a judgment on his quittance; yet, keep him subject to any conditions related to any income which might be payable for him or to any assets he might receive afterward, or those he might obtain after his quittance, as specified in the said judgment. 392-3 402-3 The court may issue its judgment as per Clause (402-4(b)) or Clause (402-4(c)) with summary action or order the suspension of its execution for a period specified by the court in its judgment or until the achievement of particular condition(s) specified by the court in its judgment. Article (393) Article (403) 393-1 403-1 The quittance judgment acquits the debtor from all the liquidation debts incurred on him. 393-2 403-2 The quittance of the debtor shall not affect the following: (a) The tasks of the liquidation supervisor, as long as they are not performed yet; or (b) The execution of the provisions in this section for purposes of performing the tasks of liquidation supervisor. 393-3 403-3 The quittance order of the debtor shall not affect any right of either the creditor to prove his debt in the liquidation as per the provisions of Article (368) from which the debtor was acquitted. 393-4 403-4 The quittance order of the debtor shall not affect any right of either the creditor who has a debt secured by the execution of its security to settle a debt from which the debtor was acquitted. 393-5 403-5 The quittance will not release the debtor from any debt incurred on him in the liquidation, or from any waiver of the debt, if either was achieved by fraud.

393-6 403-6 The quittance judgment shall not release the debtor from the sums payable as a penalty unless the issued judgment decides to acquit him from settling all of the judged sum or part of it. 393-7 403-7 The quittance judgment shall not release the debtor from any liquidation debt except for the extent and conditions specified by the court in that judgment, if the debt: (a) Forms an obligation of indemnity for negligence or any legal or contractual breach, related to personal damages caused to any party; or (b) Incurred on the debtor as per the provisions of the valid laws in the state related to Personal Status. 393-8 403-8 The quittance issued after the liquidation of the debtor's assets shall not affect any other debt which was not proved in the assets' liquidation. 393-9 403-9 The quittance judgment of the debtor shall not release any third party other than the debtor who is involved in any obligation with the debtor, from any liability from which the debtor was released as per that judgment, or from the liability of such party in his capacity as the debtor's sponsor. Article (394) Article (404) 394-1 404-1 For purposes of Article (401) and what follows: (a) "Penalty" means any financial punishment, financial confiscation or financial compensation decided as a penalty for a crime proved against the concerned party; and (b) "Personal Damages" mean any mental or physical injuries, including death or any other malady or disability caused to the body or mind of that party. Chapter 21 Imposition of Restrictions on Debtor Article (395) Article (405)

395-1 405-1 The court may judge whether in the provisions provided in this section or in as per a separate judgment order impose restrictions on the debtor's activities in the manner and period specified by the court in its judgment. 395-2 405-2 The judgment to impose the restriction is issued based on the application of one of the creditors of debtor or the liquidation supervisor. Article (396) Article (406) 396-1 406-1 The court responds to the application of issuing the judgment provided in Article (405) when it deems that proper, taking into consideration the debtor's behavior before or after submitting the application of that order. 396-2 406-2 When reviewing the application, the court takes into consideration any of the following acts done by the debtor, in particular: (a) Failure to provide any registers or records based on the application of the liquidation supervisor; (b) Making deals in less than the actual price; (c) Grant any privileges; (d) Paying exaggerated contributions to the retirement fund; (e) Committing before submitting the application of insolvency commencement procedures to a debt which the debtor does not expect to settle reasonably; (f) Failing to prove to the court or the liquidation supervisor in a satisfactory manner his loss of assets or their insufficiency to pay the liquidation debts; (g) Risky speculation or wasting his money for no good reason to the extent that might greatly caused his insolvency or augmented such insolvency, or the speculation or waste done between submitting the application of insolvency procedures and the issue of preliminary judgment on its commencement;;

(h) Committing fraud; and (i) Failing to cooperate with the liquidation supervisor in any other manner. 396-3 406-3 For purposes of Clause (406-2): (a) "Exaggerated Contributions in the Retirement Fund" mean contractual contributions in any contract agreement originally entered by the debtor at any time, or entered on behalf of the debtor at any time, where such contributions caused gross damage to the creditors of the debtor; (b) "Privilege" means the debtor's doing of any act or accepting to hold the responsibility of any act which, in both cases, shall put one of the debtor's creditors as a guarantor or sponsor for any of his debts or other liabilities in a situation which, in case of debtor's bankruptcy, is better than the one he was in if the debtor failed to do the said act and bear its consequences; and (c) "Deals in less than the Actual Price" mean the debtor's presenting of gifts for a party or entering a deal with the said party provided that no return would be received, or entering a deal with the said party in return for marriage or for an allowance whose value, whether cash or material, is much less than the cash allowance or the material presentations, usually presented by the contractual party. Article (397) Article (407) 397-1 407-1 The application for issuing the judgment provided in Article (405) must be submitted as per the provisions of this chapter within (one year) from the date of publishing the preliminary judgment of the insolvency of the debtor. 397-2 407-2 The period specified in Clause (407-1) becomes invalid at any time when the term set for the debtor's quittance is suspended as per the provisions of Clause (401-3).

Article (398) Article (408) 398-1 408-1 The judgment issued to impose restrictions on the debtor is executed in summary action unless the court judged otherwise. 398-2 408-2 The term set for the restriction validity must not be less than (two years) and no more than (fifteen) years from the judgment issue date. Chapter 22 Imposition of Provisional Order on Debtor during the Insolvency Procedures Article (399) Article (409) The court may, before delivering the judgment issued as per the provisions of Article (405), issue based on the application of the lawsuit plaintiff a provisional order to impose any precautionary measure or restriction on the debtor; the court further states in its judgment the termination, retention or amendment of the precautionary measure or restriction as deemed proper by the court. Article (400) Article (410) 400-1 410-1 The court may, based on the debtor's application, rescind the judgment issued on restriction imposition as per the provisions of Article (405) if proved that: (a) According to the basis given at the issue date of judgment, there is no justification for issuing such judgment; or (b) The lapse of the reasons or justifications which made the court issue its judgment of restriction imposition; or (c) The debts and expenses of liquidation were completely paid or secured to be paid in a satisfactory manner to the court. 400-2 410-2 If the court rescinded its judgment of restriction imposition, any sale, disposition of estates, payment or any other act done by the liquidation supervisor, was done under his supervision, or was issued by

the court and done pursuant to law and the provisions of Article (351) and what follows in this section, shall be valid, and the court may include in its judgment the vacation of any additional decisions as it deems proper. Article (401) Article (411) 401-1 411-1 The liquidation supervisor investigates the behavior and works of any the debtor, including if possible his behavior and works before issuing the judgment of restriction imposition. The liquidation supervisor shall, if required, prepare a report on the results of his investigation and presents it to the court. 401-2 411-2 The Clause (411-1) is not applicable in the case where the liquidation supervisor deems that the investigation provided in clause (411-1) is unnecessary. 401-3 411-3 If the debtor submits an application of quittance pursuant to the provisions of Clause (402-1): (a) The liquidation supervisor submits a report to the court on the matters requested by the court; and (b) The court studies the report before making a decision on the application. 401-4 411-4 The report provided by the liquidation supervisor as per the provisions of Article (411) forms in any procedures, a primary evidence on the authenticity of the facts stated in it. Article (402) Article (412) 402-1 412-1 If a judgment was issued to impose a restriction on the debtor, the liquidation supervisor may, at any time before the issue of quittance judgment of the debtor, submit to the court an application to investigate with the debtor. 402-2 412-2 If the liquidation supervisor received an application from one of the debtor's creditors to apply the provisions of Clause (412-1), with the approval of at least (50)% of the debtor's creditors including the

creditor who sent the notice, the liquidation supervisor submits an application to investigate the debtor unless the court orders otherwise. 402-3 412-3 If the court decided to accept the application submitted by the liquidation supervisor, it orders a public session to be held to investigate the debtor on the date set by the court. The debtor will attend the session on the set date and he will be publically investigated about his works, deals and estates. 402-4 412-4 The following parties may participate in the public investigation of the debtor, they can interrogate him in regard with his works, deals, estates reasons of his insolvency: (a) The liquidation supervisor; (b) The Public Prosecution if the debtor was accused of any of the crimes provided in this Section; (c) Either the creditor the debtor who has submitted a claim against the debtor and the court approved his claim. 402-5 412-5 If the debtor failed at any time to attend the session of public investigation as per the provisions of Article (412) without good reason, the court orders his arrest and obligates him to attend the investigation session specified by the court. Chapter 23 Insolvency of Deceased Debtor Article (403) Article (413) 403-1 413-1 Any creditor may file against the estates of the deceased debtor a lawsuit to prove the insolvency and liquidation of assets if he was credited to the deceased debtor in a sum equals or exceeds (ten thousand) dirham and neither the debtor during his lifetime nor his successors after his death paid the claim within the period set as per Article (296). The lawsuit of insolvency must be filed within (six) months from the death date. The court judges the insolvency of the deceased

debtor and liquidation of his assets if the debtor's successors did not provide, within the period set by the court, a material or bank insurance issued by one of the banks operating in the state or any other insurance accepted by court and sufficient to fulfill the debt of the creditor. 403-2 413-2 The successors of the deceased debtor may request, after his death, the insolvency and liquidation of his assets it the court realized that the left estates are not sufficient to settle his current and future debts. Such lawsuit is filed within (three) months from the death date; yet, if some successors objected the insolvency proof, the court must hear their statements then judge the lawsuit according to the interest of the creditors of the deceased debtor and his successors. 403-3 413-3 The court may by itself or based on the application of any stakeholder order the termination of the restructuring procedures if the debtor died during the review of such procedures and the court orders in the same judgment the commencement of the liquidation procedures for the deceased debtor. 403-4 413-4 The commencement of procedures of insolvency and liquidation of assets of the deceased debtor and the judgment issued therein as per Article (413) are subject to the provisions of Article (351), Article (353), and Articles from (354) to (412) with consideration the following: (a) The successors of the bankrupt deceased debtor substitute him in the procedures of insolvency and liquidation of his assets, have the same rights and comply with the obligations provided in these articles. (b) The provisions of these articles are only applicable to the assets of the deceased debtor, the assets which are legally transferred to his successors as per the law applicable to the testator before he dies. Article (403) Article (413)

The successors of the deceased should delegate those to act on their behalf and represent them in the procedures of insolvency and liquidation of assets, if they did not agree on delegating any after ten days from being notified by the liquidation supervisor, the court based on the request of the liquidation supervisor assigns a party in this regard. The court may also at any time isolate the party delegated by the successors and assign another. Section 10 Agreements on Financial Securities Article (405) Article (415) This section aims to exclude the debtor's funds restricted by a security resulting from an agreement on the financial securities (as defined below) from the implementation of some of the provisions provided in this law. Article (406) Article (416) In this section: 406-1 416-1 "Cash Money" means any current currency, registered for an account, or any claim similar to repayment of any currency, including the deposits of monetary market as well as the sums due for the parties or payable by them or received from them in relation to the implementation of an agreement on the financial securities or settlement condition for closure; 406-2 416-2 "Settlement Condition for Closure" means the term provided in the agreement of financial securities, or mentioned in the agreement which the financial security agreement is part thereof, or any legal judgment under which, when the execution of an accident is obligatory, whether a settlement, setoff or other: (a) Accelerating the liabilities of the parties so they become immediately payable, considering them a liability to pay the sum equals the current value estimated of the basic liability or the cost of its replacement, or

terminating such liabilities and replacing them with a liability to pay the said sum; or (b) Calculating the sums payable between both parties in effect of these liabilities, and settling a sum equals the difference payable by either party to the other; 406-3 416-3 "An incident for execution" means the failure or any similar incident as agreed upon between the parties which, when happens, whether according to the conditions provided in the agreement of financial security or as per the law, entitles the security owner to receive or confiscate the financial securities or the settlement condition for closure becomes valid; 406-4 416-4 "The Equal Financial Security" means: (a) Regarding cash, a payment from the same sum in the same currency, including the basic financial security provided in the agreement; and (b) Regarding financial instruments, the financial instruments issued by the same party or the debtor, which are part of the same issue or category and in the same par value, currency, and description or; if the financial security agreement provided that different money will be transferred after any incident relates or affects the financial instruments presented as a financial security, the other money including the basic financial security stated in this agreement; 406-5 416-5 "Financial Securities Agreement" means any agreement that includes a transfer or secure of property whether such transfer or security are the effecting of the provisions of a frame agreement (where many financial actions are made pursuant to its provisions) or as per general conditions executed by the debtor before entering any composition procedure of bankruptcy or the procedures of bankruptcy declaration;

406-6 416-6 "Financial Security" means either cash money or financial instruments; 406-7 416-7 "Financial Instruments" mean: (a) Shares of companies and other debentures equal to the company shares; (b) Bonds and other instruments arranging or proving a debt if can be circulated in the financial markets; and (c) Any other debentures that (1) give the right of possessing any shares, bonds, instruments or any of the said debentures as per underwriting, purchase, or exchange, or (2) which proves the right in any monetary settlement, Including the debentures and claims related to any financial instruments provided in this definition or any rights in or related to them, as well as any rights, privileges, or interests related to the foregoing financial instruments or resulting from them; 406-8 416-8 "Unnatural Party" means any artificial party, a real company or any other party who has the legal capacity (except for individuals), including any department founded as per the provisions of the law valid in a foreign country, or any other establishment incorporated as per the provisions of International Law; 406-9 416-9 "Relevant Financial Liabilities" mean the secured liabilities or those covered as per the financial securities agreement, which might consist of or include the following: (a) Current Liabilities or which will be liable in the future such as the suspended contracts, non-binding contracts and other contracts of financial compensations that may be terminated or permits either parties to release from any liability mentioned therein, future, actual, urgent or expected (including the liabilities incurred from a frame agreement

(where many financial actions are made pursuant to its provisions) or any similar arrangement); (b) Liabilities payable to the security owner from any party other than the security granter, and (c) Liabilities related to a specific category or type that might originate from time to time; 406-10 416-10 "Debentures Agreement" means any written agreement or arrangement which provides the following conditions: (a) The objective of the agreement or arrangement is to execute the relevant liabilities payable for the security owner; (b) The security owner shall arrange a financial security, or such securities create an insurance to execute the financial liabilities due for the security owner; (c) The financial security is delivered, transferred, maintained, registered or subject to any other procedure in any other manner where it remains in the possession of the security owner or any other party on his behalf or under his disposition; (d) No right of the security grantor to replace the financial security by its equal or withdraw the excess financial security prevents the financial security to be in the possession of the security owner or under his disposition; (e) Each of the security owner and security grantor is an unnatural party; 406-11 416-11 "Security Right" means any legal interest or right of security, other than the agreement on financial securities which includes the transfer of any estate, that results from or established by the arrangement of a security; and 406-12 416-12 "Arrangement of Financial Security Transfer" means any agreement or arrangement, including the repurchase agreement, which is put in writing where:

(a) It aims to arrange a security or cover the relevant financial liabilities payable to the security owner; (b) The security grantor transfers the whole legal estate of the financial security to the security owner provided that the security owner commits when acquitting the security grantor from the relevant financial liabilities, to transfer the whole legal estates of the financial security which equals the security presented by the security grantor; and (c) Each of the security owner and security grantor is an artificial party; Article (407) Article (417) None of the restriction imposed on the security execution or repossession of the goods related to the debtor pursuant to the provisions of Article (70), Article (71), Article (82) of the third Section or Article (167), Article (168) and Article (173) of the Fourth Section are applicable to any security right established or arranged as per an agreement on financial securities, including any provisional judgment related to the

precautionary measures pursuant to the provisions of Clause (32-1) or Article (139). Article (408) Article (418) Any power granted to the supervisor of composition pursuant to the provisions of Article (106) of the third Section or to the bankruptcy supervisor pursuant to the provisions of Article (205) and Article (221) of the fourth Section on the debtor's funds securing his debts are not applicable to any security right established or arranged as per an agreement on financial securities. Article (409) Article (419) The provisions of the Eighth Section are not applicable regarding any security right established or arranged as per an agreement on financial securities, except for the provisions related to fraud or deception. Article (410) Article (420)

In regard to the procedures of composition or the procedures of bankruptcy valid on the owner or grantor of the financial security, the restrictions imposed on the disposition of the debtor's estates or funds provided in Article (67) of the Third Section or Article (164) of the fourth Section are not applicable to: 410-1 420-1 Any estate or security right subject to disposition or established or arranged as per an agreement on financial securities; or 410-2 420-2 To avoid (the application) of any of the terms of the agreement on the financial securities or one of the terms of any agreement that forms part of the agreement on the financial securities, regarding the valid setoff as per the terms of the said agreement. Article (411) Article (421) Any (avoidance) of the provisions related to the transfer of shares after the commencement order is issued pursuant to the provisions of Article (68) of the Third Section or Article (164) of the Fourth Section are not applicable to any transfer of shares made by virtue of the agreement on financial securities. Article (412) Article (422) Any power granted to the bankruptcy supervisor or the court responsible for the (cancellation) of some transactions pursuant to the provisions of the Eighth Section is not applicable to any agreement on the financial securities when the debtor, is subject to the bankruptcy procedures, is the owner or grantor of the security as per this agreement. Article (413) Article (423) 413-1 423-1 The provisions of the Sixth Section are not applicable to the settlement condition for closure, and the provisions of this condition are applied whether or not the owner or grantor of the security, both parties of the condition, is subject to the procedures of bankruptcy composition or the bankruptcy procedures.

413-2 423-2 The Clause (423-1) is not applied if either of the condition parties knew, or was supposed to know about the procedures of bankruptcy composition or the bankruptcy procedures related to the owner or grantor of the security. Article (414) Article (424) 414-1 424-1 Any cases, liabilities or agreements provided in Clause (4242) made on or after the date of the commencement order related to the composition procedures of bankruptcy or the bankruptcy procedures, shall be legally valid and binding for the other parties if the security owner proved that he did not know about the said issued order of the commencement. 414-2 424-2 The cases, liabilities or agreements provided in Clause (4241) are limited to the following: (a) Making an agreement on the financial securities; (b) Making a financial liability secured as per the agreement on the financial securities; or (c) When the financial security which is delivered, transferred, maintained, registered or subject to any other procedure in any other manner keeps it in the possession of the security owner or any other party on his behalf or under his disposition. Section 11 Special Provisions on Claims & Appeal Chapter 1 Appeal Article (415) Article (425) The debtor or creditor may appeal the judgments issued by the Court of First Instance in the following cases:

415-1 425-1 The judgments issued on commencing or rejecting or accepting the commencement of procedures pursuant to the provisions of the third, fourth and ninth Sections; 415-2 425-2 The judgment issued on restructuring the debtor's liabilities or liquidating his assets, or the judgment which rejected or accepted the restructuring or liquidating the assets pursuant to the provisions of the Ninth Section; 415-3 425-3 The judgment issued on assigning or replacing a composition supervisor, bankruptcy supervisor, liquidation supervisor, restructuring supervisor, an expert or supervisor of the plan; 415-4 425-4 The judgments issued on commencing or rejecting or accepting the commencement of simple liquidation procedures pursuant to the provisions of the Fourth Section. Article (416) Article (426) Any stakeholder may appeal the judgments issued by the Court in the following cases: 416-1 426-1 The judgments issued on terminating any of the procedures or legal lawsuits pursuant to the provisions of the third, fourth and ninth Sections; 416-2 426-2 The judgments issued on precautionary measures pursuant to the provisions of the third, fourth and ninth Sections; 416-3 426-3 The judgments issued on approving any plan pursuant to the provisions of the third, fourth and ninth Sections; and 416-4 426-4 The judgment of liquidation of the debtor's assets pursuant to the third and the fourth and the ninth sections. Article (417) Article (427) The debtor and creditor may appeal the judgment of the court of the first instance, in the following cases:

417-1 427-1 The creditor may appeal the judgments of acceptance or refusal of his requirements which are defined in article (89) of third section, article (177) of the fourth section, articles (324), (370) of the ninth sections, 417-2 427-2 The creditor may appeal the judgment of refuse his requests defined in article (89) of third section, article (179) of fourth section, and article (326) of the ninth section. 417-3 427-3 The debtor may appeal the judgment of adding part of debtor's revenue to his assets pursuant to the terms of the ninth section, 417-4 427-4 The creditor or any of his financially dependents may appeal the judgment of selling, mortgage or otherwise deposal of debtor's house or any other assets which is part of his business property pursuant to the terms of the third and the fourth and the nine sections, if the debtor was normal person. Chapter Two Grievance Article (418) Article (428) If the supervisor of composition, liquidator or supervisor of

reconstructing (as the case may be) did not notify the creditor to attend any of creditors meetings, or has not been announced pursuant to terms of the law, then the affected creditor may raise grievance before the court pursuant to the specific provisions in the following clauses: 418-1 428-1 The grievant shall raise his grievance within twenty eighty days [28day] from the second day of his knowing of the meeting. 418-2 428-2 The court shall review the grievance immediately upon requesting by the concerned supervisor, and shall issue its judgment by acceptance or deny the grievance, If a judgment of acceptance was issued, the court shall request the concerned supervisor to notify the creditor, including the grievant creditor to attend the meeting to hear the

creditor point of view and his aspects of defenses and consider the extent of the effect on the draft plan. If a judgment of acceptant the grievance was issued, the court may order to suspend or cancel any judgment has already issued about ratification of the plan. Article (419) Article (429) The judgment of court of the first instance shall not be appealed in the cases referred to in clause (2-428)

Chapter Three General provisions Article (430) Article (420) The court of appealing shall at the request of appealing, decide to stay of execution the challenged judgment pending the determination of the appeal. Article (431) Article (421) Any judgment of the court of first instance provided to in this law, or grievance its decisions or grievance any of decisions of supervisor of composition, trustee, liquidator or supervisor of reconstruction, shall not at any way be appealed in way other than provided in this section, or unless any other term provided otherwise. Article (432) Article (422) If the court which the grievance or appeal is raised before it find that, the money of the debtor was not enough to pay the fees of grievance or appeal and other associated legal costs. The public treasury upon decision of the court, shall provide the necessary funds to cover the fees and costs. Section 12 Bankruptcy & Composition Crimes Chapter 1 Scope Of Application

Article (423) Article (433) 423-1 433-1 Unless the text provides otherwise, the provisions of this section are applicable to: (a) Any party from the parties specified in Item (2-1) of the First Section in this law who has an initiation order issued against him pursuant to the provisions of the Fourth Section; (b) The managers, including the actual directors, for any party referred to in Item (a) above; (c) Any of the parties who formerly held the position of a member of the board of directors or the director of any entity referred to in Item (a) above during the two years prior to the issue date of the commencement order; and (d) Any of the parties who participated or contributed with any party subject to Item (a) to Item (c) above in committing any of the crimes provided in this section. 423-2 433-2 The actual manager is the party who plays an active role in the process of decision making at any entity, or the party whose directions and instructions are the base for managers to work. 423-3 433-3 The phrase "entity manager" includes any party who undertakes the management of an entity legally and constantly existing. Chapter 2 Consequential Penalties Article (424) Article (434) The court may judge any party, who does not submit the application of bankruptcy declaration within (45) days from the date of payment suspension or the (excessive indebtedness) pursuant to the provisions of Article (128) of the Fourth Section, to be incompetent as specified in Article (436) of this section and/or settle a penalty that does not exceed AED (.).

Article (425) Article (435) 425-1 435-1 If the debtor's assets are subject to a liquidation order pursuant to the provisions of the Fourth Section and were not sufficient to cover the debtor's liabilities, the court may judge that any of the parties referred to in Item (433-1(b)) or Item (334-1(c)) responsible for the debtor's bankruptcy and then determine in its judgment the sum payable by that party to cover all or part of the debtor's liabilities. If the judgment included more than one party responsible, they shall be all responsible (collectively and individually) for settling the cover sum provided in the judgment. 425-2 435-2 Without prejudice to its powers provided in Item (435-1) above, the court may issue a judgment obligating any of the parties referred to in Item (433-1(b)) or Item (334-1(c)) to settle a sum covering the debtor's liabilities in case either of them did any of the following acts: (a) Using risky commercial methods, such as disposing goods in lesser prices than the market value for obtaining the funds to avoid the bankruptcy procedures or delay their commencement; (b) Entering any transactions with a third party to dispose the assets for free or in return for insufficient payment and with no certain benefit or proper to the debtor's assets; or (c) Fulfilling the debts of any of the creditors for purpose of damaging other creditors, within the period of payment suspension or the excessive of indebtedness. 425-3 435-3 The court may issue a judgment on obligating any entity which acted as a member of the board of directors or actual manager in the meaning specified in Item (433-2) to settle the sum covering the debtor's liabilities. 425-4 435-4 The court shall not issue the judgment provided in this article if it was convinced that the natural or artificial party undertook all

required actions to decrease the possible damages on the debtor's assets and creditors. Article (426) Article (436) 426-1 436-1 When commencing the bankruptcy procedures, the court may issue a judgment that any party referred to in Item (433-1) is incompetent if found that the act of such party when issuing the commencement order pursuant to the provisions of the Fourth Section has no capacity to participate in managing any entity legally formed or exercising any commercial activity. 426-2 436-2 Without prejudice to its powers decided in Item (436-1), the court shall further issue a judgment of incompetence in case it issued a judgment on settling the sum to cover the debtor's liabilities pursuant to the provisions of Article (435), or if it was proved to the court that the concerned party committed one of the crimes provided in Article (438). 426-3 436-3 The incompetence judgment pursuant to the provisions of this section prevents directly or indirectly such party against which such judgment was issued from operating, managing, observing or playing any role in administering any company incorporated pursuant to the provisions of the Companies Commercial Law or practicing any other commercial activity, for the period of (five) years. The name of the convicted party will be added to the record of incompetent parties maintained by the committee pursuant to the provisions of Item (6-3) of the First Section, or in case the record was not held, the party's name will be written in the Commercial Registry. 426-4 436-4 The court may order in the incompetence judgment issued the prevention of the convicted party from selling his shares, quotas and any other bonds he owns in any company or other commercial business. 426-5 436-5 The court may order in the judgment issued on incompetence the prevention of the convicted party from occupying a

public position. This prevention shall remain valid throughout the incompetence. Article (427) Article (437) The court may issue its judgment pursuant to the provisions of Article (435), Article (436) or Article (436) whether automatically (without any need to submit a complaint or application) or based on the request of the bankruptcy supervisor. Chapter 3 Crimes & Punishments Article (428) Article (438) 428-1 438-1 Any of the parties mentioned in Item (433-1) is guilty of a crime if proved that he committed one of the following acts: (a) Embezzled whole or part of the debtor's assets, unjustly appropriated them or hide them to damage the debtor's creditors; (b) Purchased goods to resell them in a price lesser than its market value, or used indirect methods to obtain the funds to avoid or delay the debtor's suspension of payment, bankruptcy declaration or termination of the bankruptcy composition; (c) Concealed all or part of the debtor's books, damaged, modified or manipulated their registers, or kept false accounts, failed to record accounts, abstained to record them or did so in an incorrect or disordered manner in contradiction to the provisions of the regulating law for recording or maintaining them; (d) Declared the debts payable by the debtor known to him, whether he signed such declaration in writing or verbally or in the budget of the debtor; (e) Obtained the bankruptcy composition in favor of the debtor by fraud; (f) The debtor who by fraud increased his liabilities or reduced the value of his funds or assets or obtained any other special settlement by fraud;

(g) The debtor who deceitfully announced his works, assets or rights to the composition supervisor, bankruptcy supervisor or the court, or refrained to give any information requested by the composition supervisor, bankruptcy supervisor or the court; (h) The debtor who mortgaged or registered some of his assets or disposed them without obtaining the permit required by law; (i) The debtor who settled any debt in contradiction to the terms of the composition plan or the restructuring plan approved by the court, or any disposition of any assets in contrast to what is provided in the plan; or (j) The debtor who did not submit his bankruptcy declaration as specified in Item (128-2). 428-2 438-2 Each party proved to commit any of the crimes described in Item (438-1) shall be punished by detention for a period no less than (one year) and no more than (three) years as well as a penalty that does not exceed ( ) dirham or by either punishments. In addition to that, the

court may judge such party as incompetent pursuant to the provisions of Item (436-2). Article (429) Article (439) 429-1 439-1 The assistant assigned by the committee pursuant to the provisions of the Second Section, or the bankruptcy supervisor, composition supervisor or the expert assigned by the court as per the provisions of the Third or Fourth Section is guilty of a crime if proved to commit one of the following acts: (a) Appropriated by fraud and illegally any of the assets or funds possessed by the debtor; (b) Provided purposely incorrect information about the debtor's state; (c) Intentionally damaged the interests of the creditors or the debtor by using the received payments when carrying out his tasks for his own

interests or forced others to give him benefits which he knew they are not due yet; or (d) Used his powers for a purpose purposely contradicting the interests of the creditors or the debtor. 429-2 439-2 Each party proved to commit any of the crimes described in Item (439-1) shall be punished by detention for a period no less than (six) months and no more than (two) years as well as a penalty that does not exceed ( ) dirham or by either punishments. The court decides in the

same judgment the termination of the acts done by the convicted party which made him commit the crime he was charged of based on the application of any stakeholder. Article (430) Article (440) 430-1 440-1 Any stakeholder may submit an application to the court when the assistant, bankruptcy supervisor, composition supervisor or the expert does any of the following acts: (a) Acted or still acts in an unjust manner to damage his interests, or suggested to act in an unjust manner that damages his interests. (b) Did not perform his tasks effectively as required; or (c) Misused or withheld any funds or estates possessed by the debtor, or breached any due liability in favor of the debtor. 430-2 440-2 When submitting an application pursuant to the provisions of Item (440-1), the court should either reply to the application, or issue any order deemed proper, including any order on terminating the assignment of the bankruptcy supervisor or the composition supervisor, or any order requesting the bankruptcy supervisor or the composition supervisor to participate in a sum of money as a compensation for the debtor's assets. Article (431) Article (441)

431-1 441-1 Either the creditor of the debtor or any other party claiming to be the same is guilty of one of the following crimes when proved against him: (a) If submitted a false or formal claim against the debtor; (b) If intended to exaggerate his debts submission; (c) If he entered an agreement with the debtor that gives him special privileges and damages the interests of the remaining creditors with his knowledge in that regard; (d) If he participated in any meetings or voted for any decisions related to the debtor and he knew that he is legally prohibited to do so. 431-2 441-2 Each party proved to commit any of the crimes described in Item (441-1) shall be punished by detention for a period no less than (three) months and no more than (six) months as well as a penalty that does not exceed ( ) dirham. Article (432) Article (442) Any lawsuit must be filed pursuant to the provisions of this section within (three) years from the issue date of the order on commencing the bankruptcy procedures. Article (433) Article (443) Unless the law provided otherwise, any civil or commercial transactions related to the bankruptcy procedures shall remain separate from any penal lawsuit filed as per the provisions of this sections, and shall not be referred to the Penal Court. Article (434) Article (444) Any amendment on the rules to which the bankruptcy procedures are subject shall not affect any penal lawsuit filed as per the provisions of this section, unless the law provides otherwise. Article (435) Article (445)

The court may issue an order pursuant to the provisions of Article (438), Article (439) or Article (440) on returning any of the debtor's assets, including any rights or claims related to such assets which were transferred, embezzled by fraud or illegally appropriated. Article (436) Article (446) The Public Treasury shall bear the charges, expenses and fees of filing the penal lawsuit pursuant to the provisions of this section. This provision shall not prejudice the court's authority to delegate the accused party against whom a conviction judgment was issued to settle all or part of these charges and expenses.