Articles of Association

Articles of Association Adopted at and annex to the minutes of the General Meeting of 16 May 2017

§ 1 Name, registered office, financial year

(1) The Association shall bear the name ‘Bundesvereinigung Kreditankauf und Servicing’ (hereinafter referred to as the ‘Association’). It shall be entered in the register of associations. It shall then bear the suffix ‘e.V.’.

(2) The Association shall have its registered office in Berlin.

(3) The financial year is the calendar year.

§ 2 Purpose of the Association

(1) The activities of the Association are not directed towards commercial business operations. The purpose of the Association is:

a) the definition and protection of the professional interests of entrepreneurs and companies that deal with non-performing loans on the creditor side in Germany, regardless of whether they purchase them as ‘investors’ or manage or realise them as ‘servicers’.

b) the development, refinement and establishment of uniform rules and standards for the assumption, trading and management of non-performing loans.

c) participation in legislative projects that affect or influence the area of activity of investors or servicers.

d) promoting the exchange of opinions and experience between investors and service providers across specialist and industry boundaries.

e) the preservation and maintenance of the reputation of the profession, in particular through the development, maintenance and further development of professional and so-called ‘corporate governance’ rules.

f) the promotion of education and training in the professional field of investors and servicers, including the promotion of young talent and scientific research and teaching in this field.

g) maintaining international contacts in the professional field.

(2) The purpose is realized in particular by:

a) Conferences, discussion, education and training events and measures (including state and unification policy events) as well as internal working groups.

b) Intensive dialog with decision-makers in companies and politics and the representation of professional interests in public.

c) Publications, releases and communications for members and the public on all relevant legal and professional issues using print and online media.

d) the development of uniform guidelines for legally compliant capital market-oriented trading and the management of non-performing loans in the German legal area.

e) the initiation of regular meetings and events that serve to maintain professional and personal contacts between members – regionally and nationwide.

f) cooperation with other organizations, in particular professional associations at national, European and international level as well as standardization organizations that set rules for cross-border or national trade in non-performing credit claims.

g) the publication of press releases and press information.

h) further service, advisory and support offers that are realized by the association alone or with third parties.

(3) The association is selfless and non-partisan; it does not primarily pursue its own economic purposes. Membership fees of the Association may only be used for the purposes set out in the Articles of Association. Members shall not receive any profit shares or any other benefits from the Association’s funds in their capacity as members. No person may benefit from expenses that are incompatible with the purpose of the association or from disproportionately high remuneration.

§ 3 Membership

(1) Any natural or legal person who is predominantly professionally involved in the acquisition, trading, management or utilization of non-performing loans and who does not only predominantly hold these as an original loan originator may become a member of the Association.

(2) Any natural or legal person who is committed to the objectives of the Association and wishes to support them through their membership fees may become a supporting member.

(3) Membership is not transferable. The exercise of membership rights cannot be transferred to another person. Legal entities must name a natural person and their deputy in the application for membership who are to exercise the rights arising from membership on their behalf.

(4) The application for membership must be submitted in writing. The Executive Committee shall decide on the admission of new members. In the event of rejection, the applicant shall be informed in writing. An appeal against a negative decision may be lodged in writing within one month of receipt, which will be decided on at the next ordinary general meeting. The appeal decision will be sent in writing. There is no entitlement to membership.

(5) Membership shall end upon resignation, exclusion, death of the member (in the case of natural persons) or, in the case of legal entities, upon dissolution or termination of liquidation and subsequent deletion from the commercial register.

(6) Resignation from the Association must be declared in writing to the President or the Managing Director and is possible at the end of the calendar year subject to six months’ notice.

(7) A member can only be excluded for good cause. Important reasons are, in particular, the violation of statutory obligations, arrears in contributions of at least one year, conduct detrimental to the objectives of the association or a criminal conviction against a member or their legal representative that makes the continuation of the membership relationship unreasonable; a penalty order is equivalent to a criminal conviction. Behavior detrimental to the objectives of the association is any behavior that:

a) is directly or indirectly attributable to a member of the association,

b) was capable of jeopardizing or damaging the purpose of the association and/or damaging the reputation of the profession or the association, and

c) makes it unreasonable for the association to continue the membership relationship.

The Executive Committee decides on the exclusion; the member concerned is excluded from the vote. In addition to the President, the Managing Director is also entitled to make a proposal. Except in cases of membership fee arrears, the President must send the member concerned a copy of the expulsion proposal with reasons at least two weeks before the meeting of the Executive Committee at which the expulsion is to be decided. A written statement from the member concerned must be submitted to the Executive Committee. The exclusion decision shall be communicated to the member in writing by the President and shall take effect upon receipt. The member has the right to appeal against the expulsion to the General Meeting, which must be submitted in writing to the President within one month. The General Meeting makes the final decision; the member concerned is excluded from the vote. Ordinary legal action may be taken against the decision.

The decision can only be contested within a period of one month of the resolution being passed by bringing an action before the ordinary court. If the member was not present when the resolution was passed, the time limit shall not begin to run until he/she has received written notification of his/her exclusion. Irrespective of any legal action, the membership rights and association offices of the excluded member shall end or be suspended with immediate effect in the event of an exclusion resolution.

(8) As association penalties for conduct detrimental to the objectives of the association, the violation of statutory obligations or contribution arrears of at least one year can be imposed as milder sanctions instead of the expulsion of a member:

a) the admonition in the general meeting;

b) the withdrawal of voting rights at the General Meeting for a maximum of two years;

c) the withdrawal of active and passive voting rights for club offices for a maximum of two years;

d) the removal from office,

e) the suspension of membership.

The club penalties may be imposed individually or concurrently. Paragraph 7 shall apply accordingly.

(9) If preliminary proceedings have been initiated against a member of the Executive Committee or their legal representative on suspicion of a criminal offense, the member or their legal representative may be provisionally removed from office until the preliminary proceedings are closed (suspension); in this respect, paragraph 7 sentences 4 to 12 shall apply accordingly.

(10) Upon termination of membership, there is no entitlement to a share of the Association’s assets.

§ 4 Bodies of the Association

(1) Bodies of the

Association are:

a) the general meeting

b) the Executive Committee

c) the Managing Director

d) the Advisory Board

(2) The General Meeting may decide to form further bodies or committees of the Association.

§ Section 5 Rights and obligations of members

(1) All members shall pay membership fees, the amount and due date of which shall be determined by a membership fee schedule adopted by the General Assembly for the following financial year on the proposal of the Executive Committee.

(2) Unless they are only supporting members, all members are entitled to participate in the Association’s events, elections and votes, as well as to make use of all other services in accordance with the provisions of the Articles of Association. This right is linked to the fulfillment of membership fee obligations.

(3) Supporting members should be involved in the activities of the Association in an appropriate manner. In particular, they should be given access to the Association’s publications, offers for further education and professional development as well as other suitable events organized by the Association. The Executive Committee shall decide on this.

(4) Natural persons as members who are not or no longer active as investors or servicers shall be listed as supporting members of the Association from this point in time. However, if they are members of the Management Board or the Executive Committee, they shall continue to exercise the rights of membership and their office until the end of their term of office. A member must inform the Managing Director immediately of the fact that they have taken up, interrupted or terminated a full-time position as or for a servicer. Members who do not comply with this rule may be excluded for good cause.

(5) Every member is obliged to inform the Association in writing immediately and without being asked of any changes to their business, residential and registration address as well as their name. The member shall reimburse the Association for any costs incurred in this regard. Any legal costs incurred by the Association for the (legal) assertion of claims against a member shall also be reimbursed to the Association by the member.

§ Section 6 Executive Committee, Advisory Board, Managing Director

(1) The Executive Committee consists of the President, two Vice Presidents, the Treasurer and seven Associate Committee Members. Only representatives of members who are not supporting members may be elected to the office of President, Vice-President and Treasurer. Representatives of supporting members may also be eligible for the office of Associate Committee Member. The number of representatives of supporting members among the Associate Committee Members shall be limited to a maximum of three.

(2) The Association shall be represented in and out of court by two members of the Management Board acting jointly. If a Managing Director has been appointed, representation may be carried out by the Managing Director together with a member of the Management Board, or by the Managing Director alone in the event of urgency or incapacity.

(3) The President, the Vice-Presidents and the Treasurer are elected by the General Meeting for a term of two years, and Associate Committee Members for a term of one year. Separate ballots are held for all offices, with the exception of Associate Committee Members. Re-election is permitted. The Management Board remains in office until a new election is held. If a member resigns during the term of office, the Management Board may elect a replacement member for the remaining term of office of the resigning member.

(4) The Executive Committee manages the business of the Association and performs all tasks unless they are assigned to another body of the Association by the Articles of Association or by law.

The Executive Committee has the following tasks in particular:

a) preparing and organizing the Association’s meetings and other events, issuing its publications and communications, representing the profession vis-à-vis parliaments and governments.

b) implementing the resolutions of the General Meeting.

c) convening, preparing and conducting the meetings of the General Assembly. The President or one of the Vice Presidents shall chair the meetings of the Executive Committee and the General Assembly of Members.

d) drawing up a project and business plan for each financial year, bookkeeping, preparing the annual report and fulfilling the associated legal and official obligations.

e) the awarding of contracts and the conclusion and termination of employment contracts, contracts for work and services and other contracts concluded with third parties to support the fulfillment of the Association’s statutory tasks.

f) Admission and participation in the expulsion of members.

g) the appointment and dismissal of members of the Advisory Board.

(5) In order to fulfill its tasks and duties, the Executive Committee may make use of the services of a Managing Director. On the proposal of the President, the Managing Director shall be elected by the members of the Executive Committee for the duration of the President’s term of office.

(6) If a managing director has been appointed, he shall manage the Association’s business independently in accordance with the instructions of the Executive Committee. In particular, he is responsible for the proper management of budget funds, the issuing of orders and the conclusion and termination of employment contracts, contracts for work and services and other contracts concluded with third parties to support the fulfillment of the Association’s statutory tasks, as well as internal and external communication. He is exempt from the management restrictions of Section 181 of the German Civil Code (BGB). In accordance with a separate agreement, which also regulates further rights and obligations, he is granted appropriate remuneration for his activities.

7) The Managing Director is responsible to the Executive Committee. The President is authorized to issue instructions to him. The Managing Director is entitled to participate in the General Meetings and the meetings of all bodies of the Association in an advisory capacity, unless a resolution is to be passed on a matter concerning him/her.

(8) The President, Vice-Presidents and Treasurer together form the Management Board within the meaning of § 26 BGB (Representative Board).

(9) The Executive Committee appoints the Chairman of the Advisory Board and the other members for a period of two years. Reappointment is permissible. The Advisory Board advises the Executive Committee in the performance of its duties. The Chairman of the Advisory Board is entitled to participate in the General Meetings and the meetings of all bodies of the Association in an advisory capacity, unless it concerns the passing of a resolution on a matter relating to himself.

(10) The Advisory Board is responsible in particular for the development and maintenance of uniform guidelines for legally compliant capital market-oriented trading and the management of non-performing loans for the German legal area as well as professional standards for the management of loan portfolios. At the request of the Executive Committee, these shall be adopted by the General Meeting.

(11) The Advisory Board shall meet at least once per calendar year, the Executive Committee at least twice. Minutes shall be kept of the meetings. Meetings of the Executive Committee and the Advisory Board are not public. However, the minutes of the meetings may be inspected by the members. The Executive Committee and Advisory Board shall adopt rules of procedure.

(12) The members of the Executive Committee and the Advisory Board perform their duties on an honorary basis. The Executive Committee shall decide on the reimbursement of expenses and expenditure.

§ 7 General Meeting

(1) The General Assembly of Members shall meet at least once a year at the invitation of the Executive Committee. An Extraordinary General Meeting shall be convened if the Executive Committee decides to convene it for urgent and important reasons or if one tenth of the members request the President to convene it in writing, stating the reasons. All members of the Association are entitled to participate in the General Meeting. Supporting members are not entitled to vote in elections and ballots. Every other member has one vote. If legal entities have acquired membership as affiliated companies of another member (group membership) and claim a discount in accordance with the membership fee regulations, this member also exercises the voting right for the affiliated company. However, group membership does not entitle the member to more than a maximum of 2 votes.

(2) The General Meeting shall be convened by the President or the Managing Director in writing, giving at least two weeks’ notice and stating the agenda. The notice period begins on the day following the dispatch of the invitation letter. The letter of invitation shall be deemed to have been received by the member if it was sent to the address last notified to the Executive Committee. Sending an email to the member’s last known email address shall also suffice as an invitation.

(3) The General Meeting shall decide on the guidelines for the Association’s activities and deal with all associated fundamental questions and matters, in particular

a) Election and discharge of the Executive Committee.

b) Election of two auditors.

c) Determination of membership fees and resolution of the membership fee regulations.

d) Acceptance of the reports of the Executive Committee.

e) Appointment of honorary members proposed by the Executive Committee.

f) Passing resolutions on motions to the General Meeting.

g) Passing resolutions on amendments to the Articles of Association.

h) Dissolution of the Association.

(4) The meetings of the General Assembly of Members shall be chaired by the Executive Committee or, in his absence, by one of the Vice Presidents. Every properly convened General Meeting shall constitute a quorum. All decisions are taken by a simple majority of the members present and entitled to vote. Amendments to the Articles of Association require a majority of two-thirds of those present; resolutions to change the purpose of the Association or to dissolve the Association require three-quarters of those present. They can only be passed if the wording has been announced in advance in the written invitation. Minutes must be kept of the Association’s General Meeting. The chairperson of the meeting and the managing director shall be responsible for the accuracy of the minutes.

(5) In principle, all elections and votes shall take place by a show of hands. If at least one tenth of the members present object to this in individual cases, voting shall be by secret ballot. In the event of a tie, the President shall have the casting vote.

(6) The General Meeting elects the President, the Vice President and the Treasurer individually and by a simple majority of the members present. In the event of a tie, a further ballot shall be held. In the event of another tie, the election shall be decided by lot.

(7) The General Meeting elects the Associate Committee Members by block vote. The number of votes is determined by the number of offices to be filled. If more candidates stand for election than there are offices to be filled, the members must cast all votes, but may only cast one vote for each candidate; otherwise the vote is invalid. The candidates who receive the most votes are elected. In the event of a tie, a run-off vote shall be held in accordance with sentences 2 and 3.

§ 8 General Provisions, Entry into Force of the Articles of Association

(1) The General Assembly delegates to the Executive Board the right to adopt amendments to the Articles of the Association that are required by official authorities (such as the District Court, Tax Office, or others) within the scope of their responsibilities. These amendments must not significantly alter the purpose of the association or restrict the rights of its bodies and members.

(2) The revised version of the Articles of the Association shall enter into force upon its registration in the Register of Associations in Berlin-Charlottenburg.