Agreement 3-2017 of April 5, 2017 Modifying Agreement 2-2010 on Securities Registration Procedures

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REPUBLIC OF PANAMA
SUPERINTENDENCY OF THE SECURITIES MARKET

Agreement 3-2017
(From April 5, 2017)

"Modifying Agreement 2-2010 of April 16, 2010 on the Procedure for the Submission of Applications for Securities Registration and Deregistration before the Superintendency of the Securities Market and Issuing Other Provisions"

THE BOARD OF DIRECTORS
In exercise of its legal powers, and

CONSIDERING:

That through Law 67 of September 1, 2011, the Superintendency of the Securities Market (hereinafter the "Superintendency") is created as an autonomous entity of the State, with legal personality, its own assets, and administrative, budgetary, and financial independence, with exclusive competence to regulate and supervise issuers, investment companies, intermediaries, and other participants in the securities market in the Republic of Panama.

That pursuant to Article 121 of Law 67 of 2011, the National Assembly issued the Single Text comprising Decree-Law 1 of 1999 and its reforming laws, and Title II of Law 67 of 2011, reformed by Law 12 of April 3, 2012, and Law 56 of October 2, 2012 (hereinafter the "Securities Market Law").

That through Agreement 2-2010 of April 16, 2010, the National Securities Commission, now the Superintendency of the Securities Market, repealed Agreement 6-2000 of May 19, 2000, and adopted the procedure for the submission of applications for securities registration and deregistration before this regulatory authority.

That Article 10 of the Securities Market Law empowers the Board of Directors of the Superintendency of the Securities Market to adopt, reform, and revoke agreements that develop the provisions of the Securities Market Law.

That within the Superintendency of the Securities Market, and in working sessions, the need has been manifested to modify Agreement 2-2010 of April 16, 2010, with the objective of reviewing and strengthening the procedure for the submission of applications for securities registration and the deregistration of said securities before the Superintendency of the Securities Market.

That in virtue of the foregoing, the Board of Directors of the Superintendency of the Securities Market, in exercise of its legal powers:

AGREES:

ARTICLE ONE: MODIFY Article 2 "Documentation" of Chapter I of Agreement 2-2010 of April 16, 2010, which shall read as follows:

Article 2: Documentation. Securities registration applications that are the subject of a public offering requiring authorization from the Superintendency of the Securities Market must be accompanied by the following documentation:

1. Request memorial, accompanied by a power of attorney granted to a lawyer before a Public Notary, signed by the legal representative of the applicant, or by a person duly authorized for that purpose.

2. Simple copy of the personal identity card for nationals, or authenticated copy through a consul or under the apostille system of the passport of the legal representative, directors, and officers of the applicant, in case they are foreigners. Issuers with securities registered with the Superintendency of the Securities Market shall only be required to present authenticated copies of these documents in case changes have occurred in the natural persons indicated after the registration of the securities:

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3. Certificate of existence of the company, stating the name, date and data of constitution and registration, duration, subscribers, directors, officers, legal representative, share capital and its composition, registered powers of attorney, and resident agent of the applicant, issued by the Public Registry of Panama within thirty (30) calendar days prior to the date of submission of the application. In the case of foreign companies, a certificate from the Public Registry of the country or the entity that performs similar functions must be provided, issued within sixty (60) calendar days prior to the submission of the application, stating the same information required for applicants incorporated under Panamanian laws. The presentation of additional documents stating the requested information, according to the jurisdiction of origin of the applicant, will be acceptable;

4. Name of all beneficial owners and ultimate beneficiaries of the applicant (issuer), information related to partners, and presentation of the share composition or participation level of the applicant. Such information provided shall be confidential, and must be presented and updated in case of changes in share composition, through the "Share Participation Form" (FPA-1), which forms an integral part of this agreement.

In the case of investment companies, only the information of the beneficial owners and ultimate beneficiaries of the participation quotas with political or control rights will be necessary.

For the purposes of what is established in this article, in case the applicant entity maintains as owners of ten percent (10%) or more of its issued and outstanding shares or quotas legal persons, information of said legal person must be supplied until reaching the detail of identifying who their beneficial owners or ultimate beneficiaries are, and so on successively until the point of identifying all and each of the natural persons, regardless of whether the shares are held through agents, custodians, or other legally accepted vehicles.

Groups that trade publicly, or when the applicant trades or is part of an economic group that trades publicly, whether at the local level or in a recognized jurisdiction; no less than sixty percent (60%) of their paid common shares in liquid and developed capital markets that hinder the identification of beneficial owners as natural persons; or those whose beneficial owner is a Sovereign State, are not obligated to provide the information or documentation requested in this numeral. For these purposes, the applicant must provide a certification from the entity in which it trades on an organized market.

5. In the case of anonymous companies, presentation of Certification of the entirety of the common shares issued and outstanding, by the Secretary of the Board of Directors or competent body of the company.

6. Copy of the Public Deed containing the Social Pact of the applicant, its amendments, and record of the registration of said documents. Issuers with securities registered with the Superintendency of the Securities Market shall only be required to present copies of the amendments, if any, dated after the registration of the securities;

7. Copy of the Information Prospectus;

8. Simple copy of the Minutes of the Board of Directors or the competent governing body of the company (issuer) or certification of the Board Secretary, where

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the authorization for the registration of the securities for public offering is stated, the number of them, their price, including any possible deduction, and the details of the offering;

9. Model of the securities proposed to be sold, stating the terms and conditions of the security, where applicable;

10. Audited Financial Statements corresponding to the last fiscal year, issued by an independent Authorized Public Accountant, as provided in the Agreement regarding the Form and Content of Financial Statements. Issuers that have securities registered with the Superintendency of the Securities Market and have fulfilled the delivery of the Annual Update Report (IN-A) of the last fiscal year are exempt from presenting this requirement. In those cases where financial statements are presented with a qualified opinion, abstention of opinion, or adverse opinion, the Superintendency of the Securities Market may deny the registration application, in accordance with what is established in Article 131 of the Securities Market Law;

11. Interim Financial Statements corresponding to the quarter immediately preceding the date of submission of the application, where applicable. Issuers that have securities registered with the Superintendency of the Securities Market and have fulfilled the delivery of the Quarterly Update Report (IN-T) of the immediately preceding quarter are exempt from presenting this requirement;

12. Draft contracts or addenda, or supplements that are an integral part of the registration application, whose final versions must be presented in authenticated copy by a notary in the Republic of Panama, before the notification of the respective resolution.

In case informational supplements apply to the Prospectus after registration, it will not be understood as a modification to the terms and conditions of the issuance. The Superintendency of the Securities Market is empowered to make observations to any supplement presented to offer a specific series, as well as to demand the inclusion of any other information it considers necessary for the protection of the rights of the investing public.

13. Sworn Declaration, duly signed by the Legal Representative or General Attorney of the issuer, which develops the questionnaire contained in Part IV of Form IN-A s. on Corporate Governance, adopted through Agreement No. 12-2003 of November 11, 2003, and its modification in Agreement No. 18-2000 of October 11, 2000, including its present and future reforms. Issuers with securities registered with the Superintendency of the Securities Market that have fulfilled the delivery of the Annual Update Report (IN-A) of the last fiscal year are exempt from presenting this form;

14. Sworn declaration, granted before a Public Notary, rendered and signed jointly by the President, Treasurer, General Manager, and the Financial Director or Comptroller of the applicant, regarding their responsibility for the Financial Statements (art. 3, Agreement No. 8-2000 of May 22, 2000). Issuers that have securities registered with the Superintendency of the Securities Market and have fulfilled the delivery of the Annual Update Report (IN-A) of the last fiscal year, will be exempt from presenting this requirement;

15. Updated Report on the issuance, not older than 90 calendar days, issued by the risk rating entity registered or recognized by the Superintendency of the Securities Market. Said Risk Rating Report must be presented when the Superintendency has approved the Information Prospectus, and must be accompanied by a note sent signed by the legal representative or person duly authorized by the risk rating entity. Said report must contain as a minimum: description of the characteristics of the

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rated issuance, rating granted to the issuance and its meaning, grounds that motivated said rating, exact date (cut-off date) of the financial information used, and date of the Rating or Evaluation Committee agreement.

The mandatory Risk Rating must state that it is a rating on the issuance and must form part of the annexes of the Information Prospectus, and must be updated annually during the validity of the issuance registration. In the case where a registered issuance has its Risk Rating suspended, the Superintendency may proceed with the suspension of the registration for public offering of said securities, and will also suspend those Revolving Securities Programs and their series, whose Risk Rating is suspended.

The suspension of the registration will become void with the presentation of the Risk Rating by the issuer. Any report on the risk rating of the issuance must be published as a material event by the issuer, and a simple copy must be sent to the Superintendency of the Securities Market and the self-regulatory organizations. The provisions of this numeral are excepted for registration applications whose purpose is the registration of common shares before the Superintendency.

For the purposes of what is established in this numeral, the Superintendency of the Securities Market will recognize those Reports issued by internationally recognized risk rating entities that have affiliates holding registration with the Superintendency of the Securities Market.

16. In case there is a risk rating of the issuer and its updates, such information must also be provided at the time of the issuance registration and made available to the investing public. Any report on the issuer's risk rating must be published as a material event by the issuer, and must be sent for the knowledge of the Superintendency of the Securities Market and the self-regulatory organizations.

17. Proof of payment of the corresponding Registration Fee:

The Superintendency of the Securities Market is empowered to additionally request documents and clarifications it deems necessary regarding the information or requirements listed above, as well as information or declarations contained in the Information Prospectus, as well as the documentation supporting said information. When it deems that the explanation proposed by the issuer is not sufficient, not clear, timely clarifications or warnings must be included in a prominent place in the prospectus.

To carry out any procedure before the Superintendency, the applicant must be in good standing regarding the payment of supervision fees, including surcharges for delinquency, as well as fines or sanctions imposed by the Superintendency.

PARAGRAPH: (OF RATING QUALIFICATIONS) The provisions regarding the reports of risk rating entities will be applicable to those registration applications of issuances that are presented starting from January 1, 2018, as well as any series that is issued subsequently to the registration of the issuance and is communicated through a supplement, on the date established above.

It will also apply to securities registrations valid upon the entry into force of this Agreement, with the possibility of issuing subsequent series within a Revolving Securities Program; having to present the "Updated Report" by the Risk Rating Entity registered or recognized by the Superintendency of the Securities Market, for said particular series.

PARAGRAPH (Validity of Revolving Securities Programs): Those issuances with Revolving Securities Programs and their Series must have a defined validity period; which cannot be greater than ten (10) years. Such information must be stated within the Risk Factors Section of the Information Prospectus of the issuance.

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Those Revolving Securities Programs and their series, that maintain a valid registration at the time of promulgation of this agreement, that have a term greater than ten (10) years, will maintain the term established at the time of their registration with the Superintendency.

ARTICLE TWO: MODIFY Sections I and VI of Article 7 "Content of the Information Prospectus" of Chapter I "Registration of Securities Subject to Public Offering" as follows.

Article 7: Content of the Information Prospectus. The Information Prospectus will require the following information of the securities to be registered and of the applicant:

I COVER.
The Prospectus must present the following information on the cover:

1. The following legend in closed uppercase:
   "THE PUBLIC OFFERING OF THESE SECURITIES HAS BEEN AUTHORIZED BY THE SUPERINTENDENCY OF THE SECURITIES MARKET. THIS AUTHORIZATION DOES NOT IMPLY THAT THE SUPERINTENDENCY OF THE SECURITIES MARKET RECOMMENDS INVESTMENT IN SUCH SECURITIES NOR REPRESENTS A FAVORABLE OR UNFAVORABLE OPINION ON THE BUSINESS PERSPECTIVE OF THE ISSUER. THE SUPERINTENDENCY OF THE SECURITIES MARKET WILL NOT BE RESPONSIBLE FOR THE TRUTHFULNESS OF THE INFORMATION PRESENTED IN THIS PROSPECTUS OR OF THE DECLARATIONS CONTAINED IN THE REGISTRATION APPLICATIONS, AS WELL AS THE OTHER DOCUMENTATION AND INFORMATION PRESENTED BY THE ISSUER FOR THE REGISTRATION OF ITS ISSUANCE".

2. Name, address, data, and date of constitution and registration in the
   Public Registry of the applicant.

3. Type or types of securities to be offered, their quantity and nominal value
   in relation to paid capital.

4. The risk rating, and name of the risk rating entity.
   THE PROSPECTUS MUST CONTAIN ON ITS COVER A WARNING IN CLOSED UPPERCASE WITH THE FOLLOWING TEXT: "A RATING DOES NOT GUARANTEE THE REPAYMENT OF THE ISSUANCE"

5. Calculation, payment, and fixing of the yield rate, as well as the basis
   of calculation that will be used for the computation of interest. When determining a rate according to the behavior of the securities market, indicate the day (s) business day(s) on which it will remit, to the Superintendency of the Securities Market through a supplement to the Information Prospectus. It must be indicated the nominal and effective yield rate (deducting taxes) when dealing with securities subject to tax withholding.

6. Date of the Offering.

7. Number of Resolution and date of authorization by the
   Superintendency of the Securities Market.

8. Date of printing of the prospectus.

II. DIRECTORY.
...

III. INDEX.
...

IV. SUMMARY OF THE TERMS, CONDITIONS AND RISK FACTORS
OF THE OFFERING.

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In this section, the issuer will present a summary of the main terms and conditions of the offering and its risk factors. As a first paragraph, in a highlighted manner, it must present the following paragraph:

"The information presented below is a summary of the main terms and conditions of the offering, and the detail of the risk factors thereof. The potential interested investor must read this section together with all the information contained in this information prospectus and request clarification in case of not understanding any of the terms and conditions, including the risk factors of the issuance".

V. RISK FACTORS.
Describe in clear terms those situations, circumstances, or events that can reasonably arise and that can affect, reduce, or limit the return, yield, or liquidity of the securities subject to public offering. The following notes will serve as a basis to evaluate the effect that these could have on the investment.

Such factors will be, without limitation to:

A. The Offering:

1. Existence of claims that have preference or priority in collection over the
   issuance.
2. Liquidity risk.
3. Absence of amortization fund.
4. Absence of guarantee.
5. The non-establishment of guarantees within the indicated period,
6. Absence of appraisal of the assets,
7. Absence of clauses for early maturity of the entire issuance (cross default)
   against events of default.
8. Early redemption.
9. Risk of Modification of the terms and conditions of the securities.
10. Absence of insurance policy on the guaranteed assets.
11. Causes for early maturity of the securities,
12. Obligations to do and not to do, financial conditions (in case of
    default).
13. Related party risk.
14. In case the validity period of the Revolving Securities Programs is not mentioned,
    it will be understood that they have a validity not greater than ten (10) years.
15. Risk of use of funds.
16. Secondary Market Risk. Absence of a liquid market to trade its
    securities,
17. Possible events or factors of default by the issuer,
18. When the issuance uses as guarantee a trust administered and regulated by
    a fiduciary entity domiciled abroad.
19. Existence of omnibus guarantee trusts, that is, those cases where a
    same trust serves as guarantee for several obligations of the issuer, distinct from the original issuance.
20. Disclosure of the existence of credit concentration risk.
21. When the entity designated as trustee is a direct or indirect
    related party of the issuer, in accordance with the provisions of this agreement.
22. Powers of the trustee to invest the assets of the trust in its own
    shares, give loans to its directors, and acquire for itself assets given in trusts.

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B. The Issuer:

1. Financial Relations: Leverage, debt, ROA, and ROE.
2. Interest rate risk.
3. Absence of operational history of the applicant
4. Absence of profitable operations in recent periods
5. Volatility of raw material prices or fluctuation of raw material cost for production
6. Total or partial absence of Implementation of Corporate Governance Policies
   (Agreement No. 12-2003 of November 11, 2003, or other unrecognized)
7. Potential dilution or increase in the placement of shares, in case it is
   share registration.
8. Pending expiration of patents, trademarks, or concession contracts
9. Dependence on a limited number of clients or suppliers
10. Market risk.
11. Risk of external source of income.
12. Concentration of the loan portfolio (when dealing with financial
    institutions)
13. Operational credit risk.
14. Fund liquidity risk
15. Operational risk.
16. Risks due to effects caused by nature.
17. Risk of securities available for sale. Detail of registered and outstanding securities.
18. Fiscal risk.
19. Risk of Equity Reduction.
20. Risk due to absence of lender of last resort.

C. The Environment:

1. Factors related to the country in which the applicant operates.
2. Macroeconomic policies,
3. Political factors.
4. Regulation,
5. Fiscal Policy or regime risk,
6. Exchange rate risk,
7. Inflation risk,
8. Jurisdictional risk.

D. The Industry:

1. Nature and competition of the business.
2. Competition conditions.
3. Bank runs.
4. Regulation or Legislation risk,
5. Volatility risk.

The Superintendency of the Securities Market is empowered to demand the disclosure of any other unrevealed, described, or informed risk during the issuance registration procedure.

VI. DESCRIPTION OF THE OFFERING.
A. Details of the Offering.
Must mention:

1. Type or types of securities to be offered, their quantity and nominal
   value in relation to paid capital and the ratio of total liability to paid capital, and the ratio of the nominal value of the issuance to the issuer's equity.
2. Interest payment date, interest payment period, calculation and
   fixing of the yield rate, as well as the basis of calculation that will be

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used for its computation. If it is an issuance of preferred shares, the nominal yield rate and the effective rate (deducting taxes) must be indicated. When determining a suitable rate according to the behavior of the securities market, the issuer must indicate both on the cover and in the Description of the Offering - Details of ---