Agreement No. 7-2022 of October 5, 2022 Modifying Agreement No. 4-2003

REPUBLIC OF PANAMA
BOARD OF DIRECTORS
SUPERINTENDENCE OF THE SECURITIES MARKET
Agreement No. 7-2022
(October 5, 2022)
"By which Agreement No. 4-2003 of April 11, 2003 is modified"

THE BOARD OF DIRECTORS

In exercise of its legal powers and

CONSIDERING

That Law 67 of September 1, 2011 reformed Decree-Law 1 of July 8, 1999 and created the Superintendence of the Securities Market as an autonomous state entity, with legal personality, own assets, and administrative, budgetary, and financial independence.

That the Board of Directors, in accordance with Articles 5, 6, 10 (numeral 1), 19, and 20 of the Unified Text of the Securities Market Law (hereinafter: Unified Text), acts as the Highest Body of consultation, regulation, and establishment of the general policies of the Superintendence and has among its attributes the power to adopt, reform, and revoke Agreements that develop the provisions of the Securities Market Law.

That the Superintendence, by virtue of Article 3 of the Unified Text, has the general objective of regulating, supervising, and auditing the activities of the securities market developed in the Republic of Panama or from it, promoting legal security for all market participants and guaranteeing transparency, with special protection of investors' rights.

That by means of Agreement No. 4-2003 of April 11, 2003, the procedure for the registration of requests for modifications to the terms and conditions of public offerings of securities registered with the Superintendence was adopted.

That the Unified Text, in its Article 65 on "information reservation," determines that securities houses and securities brokers shall not disclose information about their clients nor about the investment accounts or securities transactions they carry out, unless done with the client's consent or if the information must be disclosed to the Superintendence by virtue of this Decree-Law or its regulations or if there is an order from a competent authority issued in accordance with the law.

That the Unified Text, in Article 239, determines that every intermediary shall have the obligation to exercise the rights arising from a financial asset, including, among others, the right to vote, according to instructions received from the indirect holder.

That in working sessions it has been considered necessary to modify certain regulatory provisions contained in Agreement No. 4-2003 of April 11, 2003 adopted by the Superintendence, specifically regarding certain information and documentation that the issuer must present as part of its request for registration of modifications to the terms and conditions of the public offering of registered securities, with the objective that these modifications strengthen the confidentiality of the information of the holders of the securities whose modification is intended, as well as clarify and simplify some requirements for compliance by the issuer and expedite the attention and response on the part of the Superintendence to the presented procedure, ensuring at all times the protection of the holders' rights.

That, in this sense, it should be noted that Article 323 of the Unified Text establishes that when the Superintendence contemplates reforming an Agreement, it must consider to determine if the action is necessary and appropriate: (a) the public interest, (b) the protection of investors, and (c) whether the action promotes efficiency, market competition, and capital formation.

That this agreement has been submitted to the Public Consultation Procedure established in Title XV of the Unified Text of the Securities Market Law, specifically in Articles 323 et seq., whose term was in a first Public Consultation from July 12 to July 30, 2021, and in a second Public Consultation from August 24 to September 15, 2022, as evidenced in the public access file held by the Superintendence.

Therefore, the Board of Directors of the Superintendence of the Securities Market, in exercise of its legal powers,

AGREES:

ARTICLE ONE: ADD a Preliminary Article to Article One of Agreement No. 4-2003 of April 11, 2003, as follows:
Preliminary Article (Definitions):

1. The term local securities central, when used in this Agreement, shall be understood as: an entity that holds a license to conduct the business of a securities central, issued by the Superintendence of the Securities Market.
2. The term foreign securities central or depository and custodian or global providers of financial market infrastructure, when used in this Agreement, shall be understood as: entities that perform the custody of financial assets in jurisdictions other than the Republic of Panama. Depending on the jurisdiction or the scope of their operations, these entities may have various names or designations, such as: securities central, securities depository, global custodian, among others.
3. The term participant, when used in this Agreement, shall be understood as: members of a local securities central, a foreign securities central or depository, or a global custodian.
4. The term indirect holder, when used in this Agreement, shall be understood as: a person to whom an intermediary has recognized stock exchange rights over financial assets in a custody account through an entry in said account.

ARTICLE TWO: MODIFY Article 2 of Agreement No. 4-2003 of April 11, 2003, as follows:
Article 2 (Of the request): Every registered issuer with issued and circulating securities that intends to modify the original terms and conditions of a public offering registered with the Superintendence of the Securities Market must previously present to this body the formal request for registration of modification, through a duly constituted legal representative for this procedure, accompanied by the documents indicated in Article 4 of this Agreement, as well as the Public Offering Modification Registration Form (R-MOP), annexed to this Agreement and forming an integral part of it.

The request must contain, at minimum, the following information:

1. Full name of the petitioning company.
2. Identification of the issuance to be modified (e.g.: issuance authorized by Resolution SMV XXX-XX, type of security, original terms and conditions).
3. Comparative table of the issuance lines whose modification is proposed.
4. Indication of the meeting or assembly of the competent body of the company in which the modification whose registration is sought was authorized.

In the Power of Attorney accompanying the request or in the request itself, the email address where the applicant will receive notifications of administrative acts issued by the Superintendence of the Securities Market may also be indicated.

PARAGRAPH: Every registered issuer that intends to modify the original terms and conditions of a public offering registered with the Superintendence of the Securities Market, which does not maintain said issued and circulating securities, must comply with the requirements established in this Agreement, being exempt from presenting the following requirements that are not applicable to them: Article 3, numeral 3; Article 4, numeral 5; Article 4-A; Article 5, numeral 1 and numeral 2, letter a.

For the purposes of this paragraph, a certificate issued by the payment, registration, and transfer agent of the issuance or by the person authorized to keep control of the ownership of the securities of the issuance must be presented, together with the request addressed in this article, stating that the issuer does not maintain said issued and circulating securities.

ARTICLE THREE: MODIFY Article 3 of Agreement No. 4-2003 of April 11, 2003, as follows:
Article 3 (Public announcement of material fact and suspension of trading): Once the request and the documents indicated in Articles 2 and 4 of this Agreement are duly provided by the applicant, they must wait for the review and approval of the Superintendence of the Securities Market to disseminate a public announcement of a material fact through one of the following means: (a) in a newspaper of national circulation, for two (2) consecutive days, or (b) at the Superintendence of the Securities Market, through the Electronic Information Submission System (SERI) and, if listed on the stock exchange, must also disseminate it on the same date to the stock exchange and to the securities central, through the means determined by them. In this public announcement, the following must be indicated, at minimum:

1. Indication of the public offering whose modification is sought.
2. Comparative table of the terms to be modified.
3. Mechanism by which holders will obtain information about the modification proposal.

Attached to the public announcement of a material fact, which must have the approval of the Superintendence of the Securities Market, the issuer must disseminate through SERI the acceptance format proposed to the holders of the securities whose terms and conditions are subject to modification.

The Superintendence of the Securities Market will proceed to suspend the trading of the duly issued and circulating securities whose modification to the registered terms and conditions is sought, once the applicant presents the registration request for modification to this Authority.

The suspension of the public trading of the issuer's securities affected by the modification will be in effect for a period of three (3) business days, being automatically lifted, without the need for a pronouncement by the Superintendence of the Securities Market, after said period has elapsed. This period may be extended, by motivated resolution, if in the judgment of the Superintendence of the Securities Market this measure is necessary to safeguard the interests of the holders of the securities.

In the event that the issuer applicant for the registration of modification to the terms and conditions of the registered securities simultaneously maintains other duly issued and circulating securities, as a result of a registered public offering, the Superintendence of the Securities Market will suspend the trading of these, estimating that the intended modifications are a direct consequence of the development of the issuer's business, and therefore it is necessary for all holders of securities issued by said issuer to have knowledge of them.

ARTICLE FOUR: MODIFY Article 4 of Agreement No. 4-2003 of April 11, 2003, as follows:
Article 4 (Attached documentation): The request for registration of modification to a public offering of securities registered with the Superintendence of the Securities Market must be accompanied by the documentation referred to below. In the event that the information or document detailed in this procedure does not apply to the specific case, it must be indicated in the Public Offering Modification Registration Form (R-MOP).

1. Guarantee contracts to be used in the proposed modification. Trust agreements, pledges, mortgages, among others, provided that the proposed modification has caused the celebration of these, or the modification of existing guarantee contracts.
2. Contracts to be used in the operation of the modified issuance. Financial advisory contract, custody contract, among others.
3. Copy of the minutes of the meeting of the competent body for making such a decision by the issuer, in which the modification whose registration is sought was approved. The certification issued by the secretary of the competent body on the matter will also be considered valid.
4. Certificate of the legal entity (issuer), issued by the Public Registry of Panama. This certificate, at the time it is provided to the Superintendence of the Securities Market, must not exceed sixty (60) calendar days from when it was issued by the Public Registry of Panama. The certificate must state, at least, the following: registration data, directors, dignitaries, authorized social capital, legal representative, registered powers, and duration of the company.
5. Acceptance format proposed by the issuer to the holders of the securities whose terms and conditions are subject to modification. The acceptance document must contain, at minimum, the comparative table of the terms and conditions of the issuance whose modification is proposed.
6. Proof of payment of the registration fee for the modification of the terms and conditions of the issuance, issued by the Superintendence of the Securities Market.

ARTICLE FIVE: ADD Article 4-A to Agreement No. 4-2003 of April 11, 2003, as follows:
Article 4-A (Provisions applicable to the issuer, the participant, and the local securities central within the procedure, when dealing with immobilized or dematerialized securities in custody accounts): The issuer or the participant or the local securities central, as applicable, must comply with the following provisions within the procedure for the registration of modifications to the terms and conditions of registered securities:

1. Determination of holders. The issuer will request the local securities central to initiate the process for the determination of indirect holders of the securities.
   The participants of the local securities central, who maintain the indirect ownership of the registered securities that will be subject to modification, must supply directly to the issuer the information about the natural and legal persons holding said securities, in accordance with the forms and procedures contemplated by the local securities central.
   The information described in the preceding paragraph is strictly confidential and for the purposes stated above, so the issuer must keep it under reserve.

2. Sending of the acceptance format proposed by the issuer. The issuer or the payment, registration, and transfer agent of the issuance or the person authorized by the issuer, must send to the local securities central the public announcement of a material fact together with the acceptance format proposed by the issuer, as established in Articles 3 and 4 of this Agreement, which have obtained the approval of the Superintendence of the Securities Market.
   The local securities central will remit the information, as well as the acceptance format proposed by the issuer, to its participants, who in turn must send it to the indirect holders in order to obtain their responses. The participants must remit the information described in this numeral to all indirect holders within a term not exceeding three (3) business days, counted from the receipt of the documentation from the local securities central.

In the case of local issuances that are custodied in foreign securities centers or depositories, custodians, or global providers of financial market infrastructure, the local securities central will proceed to remit the information to said entities, who in turn will remit it to their participants and these latter to their clients or indirect holders, in order to obtain their responses.

3. The indirect holder or the person authorized to grant the acceptances, will have the option to send their response to the participant. If affirmative, they must indicate to the participant whether they consent or not to the proposed modifications.

4. Persons authorized to grant acceptances. The consent of the holders of the securities subject to modification must be granted by them or by the person they authorize or empower (e.g.: attorney-in-fact, agent, or representative) or by the person authorized to sign or give instructions in the holder's investment account.

In the event that the consent is granted by the attorney-in-fact, agent, representative, or person authorized by the holder, the original or certified copy of the power of attorney, minutes, or legal instrument that empowers them to such management must be obtained, together with the simple copy of the ID card or passport of the person authorized by the holder, unless this document is registered in the Public Registry of Panama and can be verified on its website.

5. Means to grant acceptances. The consent of the holders of the securities may be granted in writing or through electronic communication means (e.g.: email) or by videoconference.

In the event that consents are received in writing, the documents supporting them must be kept (e.g.: acceptance format proposed by the issuer, signed by the holder or by the person they authorize or empower).

In the event that consents are received through electronic communication means or by videoconference, the files supporting them must be kept (e.g.: email, electronic document, or recording of the videoconference).

The participant of the local securities central that obtains the aforementioned consents (in writing or through electronic communication means or by videoconference), must keep the documents or files supporting them for a period of five (5) years, counted from the date on which the Superintendence of the Securities Market issues the resolution registering the modification of the proposed terms and conditions.

6. Mechanisms to receive acceptances. The issuer or the payment, registration, and transfer agent of the issuance or the person authorized by the issuer, will receive the consent of the holders of the securities, through the following mechanisms:

6.1. Participants of the local securities central. The participant of the local securities central must certify to the issuer or the payment, registration, and transfer agent of the issuance or the person authorized by the issuer, the following:
a. Total quantity of holders and the amount in holdings of securities that they represent; b. Quantity of holders who accepted the modification and the amount in holdings of securities that they represent;
c. Quantity of holders who did not accept the modification and the amount in holdings of securities that they represent;
d. Quantity of holders who did not respond and the amount in holdings of securities that they represent.

This certification will have the character of a sworn declaration, signed by the legal representative or by the person authorized by the participant of the local securities central, where they declare to the Superintendence of the Securities Market that they have the documents or files supporting that the holders of the securities have given their approval or rejection for the proposed modification and must be provided by the issuer according to what is established in numeral 1 of Article 5 of this Agreement. Consequently, the participant of the local securities central, who certifies the consent of its clients, is responsible for having effectively received said consents with the formality and means established in this article.

For the case of issuances that have several series, the certification must individualize and detail the information for each of the series subject to modification, taking into account the type of consent established by each information prospectus or the information supplement of each series, as applicable.

The participant of the local securities central must keep the documents or files that support the decision of the holders, as established in numeral 5 of this article, which must be available to the Superintendence of the Securities Market and delivered when it so requires.

PARAGRAPH: Likewise, the local securities central may collect the responses from its participants and proceed to certify to the issuer, the payment, registration, and transfer agent of the issuance, or the person authorized by the issuer, the indicated information, with the formality established in this numeral. The local securities central must communicate to the Superintendence of the Securities Market the effective date on which it will begin to carry out this activity.

6.2. Foreign securities centers or depositories, custodians, or global providers of financial market infrastructure. According to the regulatory provisions of the jurisdiction of each foreign securities center or depository or custodians or global providers of financial market infrastructure, they may opt to adhere to any of the following mechanisms to remit the responses from their participants, as applicable:

a. Transmit to the issuer or the payment, registration, and transfer agent of the issuance or the person authorized by the issuer or the local securities central the responses received, indicating the amount of acceptances. In the case of the local securities central, it will proceed to retransmit the information to the issuer or the payment, registration, and transfer agent of the issuance or the person authorized by the issuer, possibly performing one or several retransmissions.

b. Collect the responses from its participants and issue a certification, which it may send directly to the issuer or the payment, registration, and transfer agent of the issuance or the person authorized by the issuer or the local securities central, who will retransmit it to the persons indicated above, containing the following:
i. Total quantity of participants and the amount in holdings of securities that they represent;
ii. Quantity of participants who accepted the modification and the amount in holdings of securities that they represent.

c. That the participant certifies directly to the issuer or the payment, registration, and transfer agent of the issuance or the person authorized by the issuer, the following:
i. Total quantity of holders and the amount in holdings of securities that they represent;
ii. Quantity of holders who accepted the modification and the amount in holdings of securities that they represent.

d. Collect the certifications issued by its participants and transmit them to the issuer or the payment, registration, and transfer agent of the issuance or the person authorized by the issuer or the local securities central, who in turn will retransmit it to the persons indicated above.

Such certification will contain the following:
i. Total quantity of holders and the amount in holdings of securities that they represent;
ii. Quantity of holders who accepted the modification and the amount in holdings of securities that they represent.

For the case of issuances that have several series, the different mechanisms to remit the responses must individualize and detail the information for each of the series subject to modification, taking into account the type of consent established by each information prospectus or the information supplement of each series, as applicable.

6.3. Third party designated by the issuer as tabulation agent of the responses (in the case of issuances registered with the Superintendence of the Securities Market and settled abroad). In the case of issuances that are registered with the Superintendence of the Securities Market, whose settlement is international, the issuer may...