SHAREHOLDERS` AGREEMENT Between

Transcription

EXECUTION VERSION
SHAREHOLDERS’ AGREEMENT
Between
MERCANTIL COLPATRIA S.A.
CONSTRUCTORA COLPATRIA S.A.
SALUD COLPATRIA S.A.
MULTIACCIONES S.A.
INTERNATIONAL YORKSHIRE LIMITED
MAYARO LTD.
GE EMERALD INC.
EMERALD FINANCIAL INVESTMENTS INC.
AND
BANCO COLPATRIA – RED – MULTIBANCA COLPATRIA S.A.
dated as of June 15, 2007
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS ............................................................................................................2
1.1.
1.2.
1.3.
Definitions................................................................................................................2
References to U.S. Dollar Amounts.......................................................................20
Interpretation..........................................................................................................20
ARTICLE II GENERAL UNDERTAKINGS ...............................................................................20
2.1.
2.2.
2.3.
2.4.
General...................................................................................................................20
Shareholder Actions; Meetings; Notices ...............................................................21
Irrevocable Appointment of Agent ........................................................................22
Shareholder Representatives..................................................................................23
ARTICLE III GOVERNANCE .....................................................................................................23
3.1.
3.2.
3.3.
3.4.
3.5.
3.6.
3.7.
3.8.
3.9.
3.10.
3.11.
3.12.
3.13.
3.14.
3.15.
3.16.
3.17.
Board of Directors..................................................................................................23
Board Committees .................................................................................................25
Meetings; Notice....................................................................................................25
Board Quorum .......................................................................................................26
Participation in Meetings .......................................................................................26
Determination of Share Ownership .......................................................................26
President and Other Officers..................................................................................27
Special Voting Provisions for JVCo, the Bank or the Subsidiaries of the
Bank .......................................................................................................................27
Shareholder and Director Voting Provisions for any Subsidiary
Company(ies).........................................................................................................32
Compliance Committee .........................................................................................32
Conduct of Business ..............................................................................................34
Cooperation with Regulators .................................................................................35
Books and Records ................................................................................................35
Tax Matters ............................................................................................................35
Report to Shareholders...........................................................................................36
Annual Business Plan ............................................................................................36
Equity Issuances.....................................................................................................36
ARTICLE IV RESOLUTION OF DISPUTES..............................................................................37
4.1.
4.2.
4.3.
4.4.
Submission of Disputed Matters............................................................................37
Dispute Committee ................................................................................................37
CEO Resolution .....................................................................................................37
Temporary Operations ...........................................................................................38
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TABLE OF CONTENTS
(Continued)
Page
ARTICLE V RESTRICTIONS ON ISSUANCE AND TRANSFER OF SECURITIES .............38
5.1.
5.2.
5.3.
5.4.
Preemptive Rights..................................................................................................38
Right of First Offer ................................................................................................39
Limitations on Transfers of Shares ........................................................................40
Transfers in Violation of this Agreement ..............................................................41
ARTICLE VI CALL AND PUT OPTIONS..................................................................................41
6.1.
6.2.
6.3.
6.4.
Call Options ...........................................................................................................41
Put Options.............................................................................................................42
Exercise Price.........................................................................................................42
Closing Procedures; Deliveries..............................................................................43
ARTICLE VII ADDITIONAL AGREEMENTS AND COVENANTS .......................................45
7.1.
Dividend Policy .....................................................................................................45
and Other Payments .......................................................................................................................45
7.2.
Provisions and Reserves ........................................................................................48
7.3.
Shareholders’ Covenant Not to Compete ..............................................................48
7.4.
Shared Services......................................................................................................50
7.5.
Insurance Services .................................................................................................52
7.6.
Special Projects......................................................................................................53
7.7.
Delisting of Bank’s Shares.....................................................................................53
7.8.
Affiliate Transactions.............................................................................................53
7.9.
Insurance for and Indemnification of Directors.....................................................53
7.10.
Environmental Policy.............................................................................................54
7.11.
Prohibited Persons .................................................................................................54
ARTICLE VIII VALUATION PROCEDURES ...........................................................................54
8.1.
8.2.
8.3.
8.4.
Valuation Price.......................................................................................................54
Valuation Notice; Valuation ..................................................................................54
Cooperation............................................................................................................55
Costs and Expenses................................................................................................55
ARTICLE IX PARENT COVENANTS........................................................................................55
9.1.
9.2.
9.3.
Pledge of Bank Shares ...........................................................................................55
Additional Covenants.............................................................................................55
Directors of Parent .................................................................................................57
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TABLE OF CONTENTS
(Continued)
Page
ARTICLE X KEY-MAN...............................................................................................................57
10.1.
Chairman................................................................................................................57
ARTICLE XI REPRESENTATIONS AND WARRANTIES ......................................................58
11.1.
Representations and Warranties.............................................................................58
ARTICLE XII EVENTS OF DEFAULT ......................................................................................58
12.1.
12.2.
12.3.
12.4.
12.5.
12.6.
12.7.
12.8.
Material Colpatria Defaults....................................................................................58
Other Colpatria Defaults ........................................................................................61
Material Investor Defaults .....................................................................................61
Other Investor Defaults..........................................................................................62
Investor Group Material Default Remedies...........................................................62
Colpatria Group Material Default Remedies .........................................................63
Investor Group Other Default Remedies ...............................................................64
Colpatria Group Other Default Remedies..............................................................65
ARTICLE XIII ARBITRATION...................................................................................................65
13.1.
13.2.
13.3.
13.4.
13.5.
13.6.
Submission of Disputes to Dispute Resolution Procedures...................................65
Arbitration..............................................................................................................66
Choice of Law........................................................................................................66
Arbitration Procedures ...........................................................................................66
Confidentiality .......................................................................................................67
Judicial Procedure..................................................................................................67
ARTICLE XIV MISCELLANEOUS ............................................................................................68
14.1.
14.2.
14.3.
14.4.
14.5.
14.6.
14.7.
14.8.
14.9.
14.10.
14.11.
14.12.
14.13.
Termination............................................................................................................68
Expenses ................................................................................................................68
Notices ...................................................................................................................68
Confidentiality .......................................................................................................69
Injunctive Relief.....................................................................................................69
Partial Invalidity.....................................................................................................70
Successors and Assigns..........................................................................................70
Amendment............................................................................................................70
No Third Party Beneficiaries .................................................................................70
Governing Law ......................................................................................................70
Waiver of Jury Trial...............................................................................................71
Entire Agreement ...................................................................................................71
Obligations Several................................................................................................71
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TABLE OF CONTENTS
(Continued)
Page
14.14.
14.15.
Execution in Counterparts......................................................................................71
Currency Matters ...................................................................................................71
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TABLE OF CONTENTS
(Continued)
Page
Schedules.
Schedule 1.1(a).
Schedule 1.1(b).
Schedule 1.1(c).
Schedule 2.4(b).
Schedule 7.1(e).
Schedule 7.2.
Schedule 7.3.
Schedule 7.4.
Schedule 7.6.
Schedule 11.1(e).
[RESERVED].
Major Competitors.
GE Money’s Capital Adequacy Policy.
Shareholder Representative representatives.
Clawback Claims.
GE Money’s Reserve Policy.
Colpatria Group Businesses.
Shared Services.
Special Projects.
Share Ownership.
Exhibits.
Exhibit A.
Exhibit B.
Exhibit C.
Exhibit D.
Exhibit E.
Exhibit F.
Charter Documents for JVCo.
Charter Documents for the Bank.
Form of Pledge Agreement.
Insurance Program Agreement.
Usufruct Agreement.
Environmental Policy.
Annexes.
Annex 1(a).
Annex 1(b).
Annex 2.
Annex 3.
Annex 4.
US GAAP Methodology.
Initial Business Plan – Colombian GAAP.
Procedures and deliveries in respect of an Option Closing
and determination of Exercise Price.
Compliance Policies.
Terms of Other Shareholders’ Agreements.
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THIS SHAREHOLDERS’ AGREEMENT (this “Agreement”), dated as of June
15, 2007, is entered into by and among Mercantil Colpatria S.A., a Colombian capital stock
corporation (sociedad anónima) (“Parent”), Constructora Colpatria S.A., a Colombian capital
stock corporation (sociedad anónima) (“Constructora”), Salud Colpatria S.A., a Colombian
capital stock corporation (sociedad anónima) (“Salud”), Multiacciones S.A., a Colombian capital
stock corporation (sociedad anónima) (“Multiacciones”), International Yorkshire Limited, a
British Virgin Islands company limited by shares (“Yorkshire”), Mayaro Ltd, a British Virgin
Islands company limited by shares (“Mayaro”), GE Emerald Inc., a British Virgin Islands
business company (“Investor”), Emerald Financial Investments Inc., a British Virgin Islands
business company (“JVCo”) and Banco Colpatria – Red – Multibanca Colpatria S.A., a
Colombian establecimiento bancario incorporated as a capital stock corporation (the “Bank”).
RECITALS
WHEREAS, Investor, Parent, Vince Business Corp., a Panamanian capital stock
corporation (sociedad anónima)(“Vince”), Capitalizadora (defined below), Seguros (defined
below), Constructora, Salud and Cromer Management Ltd., a British Virgin Islands company
limited by shares, (“Cromer”) are parties to that Stock Purchase and Merger Agreement dated
February 28, 2007 (the “Stock Purchase Agreement”) pursuant to which Investor has agreed to
acquire and Parent and Vince have agreed to transfer shares of capital stock of the Bank (shares
of capital stock of the Bank being referred to as “Bank Shares”) and shares of capital stock of
each of Yorkshire and Mayaro, each of which Owns Bank Shares, and pursuant to which
Investor and Cromer have agreed to merge Cromer into Acquirer Mergersub (as such term is
defined in the Stock Purchase Agreement), a wholly-owned Subsidiary of Investor.
WHEREAS, the Investor Group (defined below) Owns 5,977,671,541 shares of
capital stock of JVCo, representing 18.4597% of the total issued and outstanding capital stock of
JVCo on the date hereof (shares of capital stock of JVCo being referred to as “JVCo Shares”)
and the Colpatria Group (defined below) Owns 26,404,608,046 JVCo Shares, representing
81.5403% of the total issued and outstanding JVCo Shares on the date hereof.
WHEREAS, the Colpatria Group Members (other than Capitalizadora and
Seguros) and the Investor Group desire to appoint JVCo as their common agent to exercise any
and all voting rights with respect to Bank Shares owned by them.
WHEREAS, the Colpatria Group and the Investor Group desire to set forth
certain agreements and understandings with respect to the governance of JVCo and the Bank,
their options to purchase and sell JVCo Shares and Bank Shares, non-competition and certain
other matters.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto have agreed as follows:
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ARTICLE I
DEFINITIONS
1.1.
Definitions. Capitalized terms used herein are used as defined in this Article I or
as defined elsewhere in this Agreement.
“AAA” has the meaning set forth in Section 13.2.
“Affiliate” means, with respect to any Person, a Person which, directly or
indirectly, through one or more intermediaries Controls, or is Controlled by, or is under common
Control with, such Person.
“Agreement” has the meaning set forth in the Recitals.
“AML Laws” means the Laws of Colombia, the United States and any other
applicable Governmental Authorities with respect to anti-money laundering and
know-your-customer requirements.
“Approved Business Plan” means the initial annual business plan attached as (i)
Annex 1(b) (prepared in accordance with Colombian GAAP) and (ii) the US GAAP plan to be
prepared after the date hereof by applying the conversion methodologies from Colombian GAAP
to US GAAP contained in Annex 1(a) and any subsequent annual operating or capital budget,
capital investment and/or business plan approved by the Shareholders with respect to any
calendar year or other 12 month period in accordance with the terms of this Agreement, prepared
consistent with the financial statements.
“Bank” has the meaning set forth in the preamble to this Agreement.
“Banking Business” means providing (i) consumer financial products and/or
services, including secured and/or unsecured consumer lending, consumer mortgage products,
consumer card products, retail banking products and/or services, and consumer leasing, in each
case, primarily for personal, family and/or household purposes; and/or (ii) deposit-taking
services including both consumer and commercial deposits, and payroll services; and/or (iii)
credit and/or debit card transaction processing services (which transaction processing services,
for the avoidance of doubt, include merchant acquiring); and/or (iv) commercial financial
products and/or services, in each case, in Colombia.
“Bankruptcy Event” means with respect to any Person (i) the commencement by
such Person of a voluntary case or proceeding under or the consent by such Person to the entry of
a decree or order for relief in an involuntary case or proceeding under, any federal, national,
state, domestic or foreign bankruptcy, insolvency, reorganization, moratorium, or other similar
Law now or hereafter in effect or (ii) the consent by such Person to the appointment of, or taking
possession by, a receiver, custodian, liquidator, assignee, trustee or sequestrator (or other similar
official) of such Person or of any substantial party of its property or (iii) the designation of such
Person as an ailing financial institution or (iv) the making of a general assignment by such
Person generally to pay the entirety or a substantial part of its debts for the benefit of creditors or
(v) the admission in writing of such Person of its inability to pay the entirety or a substantial part
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of its debts as they become due in the ordinary course of business or (vi) the adoption of a
resolution by its directors or shareholders in furtherance of any of the foregoing or (vii) a case or
proceeding shall have been commenced against such Person in a court of competent jurisdiction
or before a Governmental Authority seeking (A) a decree or an order for relief in respect of such
Person under any bankruptcy, insolvency, reorganization, moratorium, restructuring (including,
without limitation, restructuring under Law 550 of 1999 and Law 1116 of 2006 of Colombia) or
other similar Law now or hereafter in effect or (B) the appointment of a receiver, custodian,
liquidator, assignee, promoter, trustee or sequestrator (or other similar official) of such Person or
of any substantial part of its property or (C) the ordering of the winding up or liquidation of its
affairs, and, in the case of clauses (iii) and (vii)(A), (B) and (C) above, such case or proceeding is
not stayed or dismissed within ninety (90) days after commencement thereof or after such court
shall enter an order granting the relief sought in such case or proceeding.
“Bank Shares” has the meaning set forth in the Recitals.
“Board of JVCo” means the Board of Directors of JVCo. With respect to
Persons other than JVCo, the term “Board” means the board of Directors or other managing
body or committee with similar managerial powers of such Person.
“Business Day” means any day other than a Saturday, Sunday or a day on which
banking institutions in New York, New York or Bogotá, D.C., Colombia are authorized or
obligated by Law to close.
“Call Notice” has the meaning set forth in Section 6.1(a).
“Call Option A” has the meaning set forth in Section 6.1(a).
“Call Option B” has the meaning set forth in Section 6.1(b).
“Call Options” means, collectively, the Call Option A and the Call Option B.
“Call/Put Option A Period” has the meaning set forth in Section 6.1(a).
“Call/Put Option B Period” has the meaning set forth in Section 6.1(b).
“Capital Adequacy Ratio” means the capital adequacy ratio (relación de
solvencia) of the Bank, as determined in accordance with applicable Colombian Law.
“Capitalizadora” means Capitalizadora Colpatria S.A., a Colombian capital
stock corporation (sociedad anónima).
“Change of Control of Colpatria” means (i) the Relevant Shareholders ceasing
to be the “beneficial owner” (as determined for purposes of Regulation 13D-G under the
Exchange Act as currently in effect as of the date hereof), directly or indirectly, of securities of
Parent representing at least the Minimum Percentage; (ii) the consummation of any transaction
or series of related transactions (including, without limitation, any merger or consolidation) the
result of which is that any “person” or “group” (as such terms are used in Section 13(d)(3) of the
Exchange Act) (other than the Relevant Shareholders) becomes the “beneficial owner” (as
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determined for purposes of Regulation 13D-G under the Exchange Act as currently in effect as
of the date hereof), directly or indirectly, of securities of Parent representing at least the
Minimum Percentage; (iii) Shareholder A ceasing to be the “beneficial owner” (as determined
for purposes of Regulation 13D-G under the Exchange Act as currently in effect as of the date
hereof), directly or indirectly, of securities of Parent representing at least the Shareholder A
Percentage; (iv) any Person other than the Relevant Shareholders exercising veto rights other
than rights arising under applicable Colombian Law at a shareholders’ meeting of Parent; (v) the
Relevant Shareholders ceasing to Control a majority of the Board of Parent, including the right to
appoint not less than a majority of the Directors and their substitutes of Parent; (vi) the Relevant
Shareholders ceasing to have the ability to appoint the president and a majority of the other key
officers of Parent; (vii) any Person competing with GE Money Americas owning directly or
indirectly, securities representing at least 19.99% of the voting shares of Parent; or (viii) the
stockholders of Parent approving a plan of complete liquidation of Parent. For the purposes of
this definition, a reference to a Relevant Shareholder or to Shareholder A shall be construed to
include (A) any spouse or lineal descendant (including adopted children) of such Person, (B) any
trust solely for the benefit of such Person or the spouse or lineal descendant (including adopted
children) of such Person, (C) any family trust, partnership, limited liability company established
solely for the benefit of such Person or such Person’s spouse or lineal descendant (including
adopted children) or for estate planning purposes or (D) the heirs, executors, administrators,
guardian or conservator of such Person or to a trust under such Person’s will and following such
Person’s death or disability; provided that, in the case of clauses (A), (B) and (C), the equity
securities transferred or such trust, family trust, partnership or limited liability company remains
under the Control of such Person.
“Change of Control of Investor” means, if at any time prior to Period 3, (a) none
of (i) GE Money Americas, (ii) any Person of which GE Money Americas is an operating unit
(whether or not part of GE Capital or GE Money), and (iii) direct or indirect Subsidiaries of GE
Capital Services is the “beneficial owner” (as determined for purposes of Regulation 13D-G
under the Exchange Act as currently in effect as of the date hereof), directly or indirectly, of
securities of any Investor Group Member (including any successor by merger of such Investor
Group Member) representing more than 50% of the combined voting power of such Investor
Group Member’s then outstanding capital stock having ordinary voting power in the election of
Directors or otherwise Controls such Investor Group Member, or (b) the stockholders of any
Investor Group Member approve a plan of complete liquidation of such Investor Group Member.
For the avoidance of doubt, any sale by GE Capital of GE Money or GE Money Americas will
not be considered a Change of Control of Investor for purposes of this Agreement.
“Charter Documents” of a Person means the estatutos, by-laws, charter,
memorandum, certificate of incorporation, articles of association or other similar document of
such Person.
“Chief Compliance Officer” means the Bank’s Oficial de Cumplimiento or any
other person occupying a position with similar duties and powers.
“Chief Financial Officer” means the Bank’s Vicepresidente Financiero or any
other person occupying a position with similar duties and powers.
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“Chief Marketing Officer” means the Bank’s Vicepresidente de Mercadeo or
any other person occupying a position with similar duties and powers.
“Chief Risk Officer” means the Bank’s Vicepresidente de Riesgo or any other
person occupying a position with similar duties and powers.
“Clawback Claims” has the meaning set forth in Section 7.1(e).
“Colombia” means the Republic of Colombia.
“Colombian GAAP” means generally accepted accounting principles in
Colombia pursuant to the Plan Unico de Cuentas (PUC) financiero and to Decree 2,649 of 1993,
as such accounting principles may be applied by the Superintendencia Financiera de Colombia
to banks licensed in Colombia.
“Colombian GAAP Net Profits” means, for any period, consolidated net profits
of the Bank and its consolidated Subsidiaries (net of eliminations and minority interests) as
determined in accordance with Colombian GAAP.
“Colpatria Group” means Parent and any of its Affiliates (including
Capitalizadora and Seguros) which directly Owns Bank Shares or JVCo Shares including (a)
only prior to the Tranche A Closing Date, Yorkshire and Mayaro and (b) only prior to the
Tranche B Closing Date, Multiacciones; and each such Person, a “Colpatria Group Member”.
“Colpatria Group Representative” means Parent.
“Colpatria Portion” has the meaning set forth in Section 6.4(d).
“Competitor Bid” has the meaning set forth in Sections 7.4(d) or 7.5(b), as the
case may be.
“Compliance Committee” means the Bank’s Comité del Sistema Integral de
Prevención de Lavado de Activos or any committee with similar duties and powers as set forth in
Section 3.10.
“Compliance Policies” has the meaning set forth in Section 3.10(c).
“Compliance Violation” has the meaning set forth in Section 12.1(f).
“Confidential Information” means all information of a confidential nature
relating to JVCo, the Bank and any of its Subsidiaries, the Shareholders, their Affiliates or their
operations, businesses and affairs (including, without limitation, information about processes,
procedures, techniques, marketing, know-how, data, suppliers and source data, customer data,
equipment and other similar proprietary and confidential information), or to this Agreement and
the transactions contemplated herein, furnished, regardless of the manner and regardless of when
furnished, to any of the Shareholders. For purposes hereof, “Confidential Information” shall not
include (a) information in the public domain at the time that it was provided by the party
furnishing the information or which subsequently came into the public domain other than as a
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result of a breach of this Agreement; (b) information obtained from a third party unaffiliated with
the party furnishing the information (provided that such party was not bound by confidentiality
agreements with such furnishing party); (c) information independently developed by the party
receiving the information without reference to the information; or (d) information in the
possession of the party receiving the information prior to its disclosure by the party providing the
information to such receiving party.
“Constructora” has the meaning set forth in the preamble to this Agreement.
“Contractual Obligation/Right” means, with respect to any Person, any oral or
written note, indenture, instrument, agreement, commitment, understanding, contract,
assignment, indemnity, mortgage, lease, sublease, license, sublicense, franchise, permit or other
authorization, right, restriction or obligation of a contractual nature to which such Person is a
party or by which such Person or any of such Person’s assets is bound.
“Control” means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through holding
ownership interests in such Person, by Contractual Obligation/Right or otherwise. The terms
“Controls”, “Controlling”, “Controlled by” shall have correlative meanings.
“Cromer” has the meaning set forth in the preamble to this Agreement.
“Default Call Right” has the meaning set forth in Section 12.5(b) and
Section 12.7(a), as the case may be.
“Default Put Right” has the meaning set forth in Sections 12.6(b) and 12.8(a), as
the case may be.
“Director of JVCo” means a validly appointed or elected member of the Board
of JVCo. With respect to Persons other than JVCo, the term “Director” means a validly
appointed or elected member of such Person’s Board.
“Disputants” has the meaning set forth in Section 13.1.
“Dispute” has the meaning set forth in Section 13.1.
“Dispute Committee” has the meaning set forth in Section 4.2.
“Employee Plan” means any employee welfare benefit plan or employee pension
plan, each employment, severance or similar contract, plan, arrangement or policy and each other
plan or arrangement or practice (written or oral) providing for, without limitation, compensation,
bonuses, profit-sharing, stock option or other stock related rights, or other forms of incentive or
deferred compensation, severance, vacation, workers’ compensation, unemployment benefit,
health, life, disability, sick leave or medical benefits, insurance (including any self-insured
arrangements) or other welfare benefits, or post-employment, retirement or pension benefits, in
each case, which is maintained, administered or contributed to by the Bank or any of the
Subsidiaries and covers any current or former employee, director or consultant of the Bank or
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any of its Subsidiaries or with respect to which the Bank or any of its Subsidiaries has any
current or potential liability.
“Engage” has the meaning set forth in Section 3.8(a)(xxxiv).
“Escrow Agent” means The Bank of New York or any other international
financial institution of recognized standing with experience in escrow services agreed to by the
Shareholders.
“Estimated Net Profits” has the meaning set forth in Section 7.1(b).
“Exchange Act” means the Securities Exchange Act of 1934 of the U.S.
“Exchange Rate” means, as to any date of determination, the Tasa
Representativa del Mercado, certified for such date by the Superintendencia Financiera de
Colombia pursuant to article 80 of Resolution 8 of 2000 issued by the Board of the Banco de la
República de Colombia, as amended from time to time, or by any other Governmental Authority
that in the future may have the faculty to certify the Tasa Representativa del Mercado if such
rate is available on the internet. If the Tasa Representativa del Mercado is no longer published
on the internet, the Exchange Rate shall be the rate set forth on Reuters Page CO/COL 03.
“Exercise Price” means the price to be paid by the Investor Group to the
Colpatria Group on any Option Closing Date (or, in the case of the Option C Shares, on the
Option C Payment Date) upon exercise of any Call Option or Put Option, as determined pursuant
to Section 6.3.
“FCPA” means the Foreign Corrupt Practices Act of 1977 of the United States.
“Final Claim Amount” has the meaning set forth in Section 6.4(d).
“First Audit Period” has the meaning set forth in Section 7.1(a).
“First Relevant Period” has the meaning set forth in Section 7.1(a).
“First Special Dividend” has the meaning set forth in Section 7.1(a).
“First Unaudited Stub Period” has the meaning set forth in Section 7.1(a).
“GAAP” means, with respect to any Person, the generally accepted accounting
principles required to be used in such Person’s jurisdiction of organization or incorporation or, if
such jurisdiction admits the use of more than one body of generally accepted accounting
principles, the body of generally accepted accounting principles under which such Person
maintains its accounts at the time of determination.
“GE Capital” means the General Electric Capital Corporation, a corporation
organized and existing under the laws of Delaware.
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“GE Capital Guarantee” means the Guarantee Agreement among General
Electric Capital Corporation and Parent, substantially in the form of Exhibit B.
“GE Capital Services” means General Electric Capital Services, Inc. a Delaware
corporation.
“GE Money” means the consumer financial services businesses conducted as of
the date hereof as an operating unit of GE Capital, including any business, division or operating
unit or division of, GE Money. For the avoidance of doubt, for purposes of this Agreement, GE
Money does not include other operating units of GE Capital, such as the commercial finance
unit.
“GE Money Americas” means the consumer financial services businesses
conducted as of the date hereof as an operating unit of GE Money covering North America,
Central America and South America.
“General Counsel” means the Bank’s Vicepresidente Jurídico or any other
person occupying a position with similar duties and powers.
“Governmental Authority” means any federal, state, local or other governmental
authority or regulatory body, or political subdivision thereof, within the United States, Colombia,
Panama, the Cayman Islands or any other applicable jurisdiction, or any agency, division,
instrumentality or authority thereof, any multinational, supra-national or quasi-governmental
entity, body or authority, any self-regulatory organization or any court or arbitrator (public or
private).
“Guarantee” means any guarantee, suretyship, indemnity, bonding liability, aval
or fianza or other assurance given or undertaken to support the obligations of any third party.
“Indebtedness” means, with respect to any Person, as at any date of
determination, the sum of the following items of such Person, without duplication: (i)
obligations of such Person created, issued or incurred for borrowed money, including all fees and
obligations thereunder (including, without limitation, any prepayment or termination fees arising
or which will arise out of the prepayment of such Indebtedness prior to its maturity and
termination), (ii) obligations of such Person to pay the deferred purchase price or acquisition
price of property or services, other than trade or accounts payable arising, and accrued expenses
incurred, in the ordinary course of business consistent with past practice, (iii) the face amount of
all letters of credit issued for the account of such Person and all drafts thereunder, (iv) capital
lease obligations of such Person, (v) obligations under interest rate cap, swap, collar or similar
transactions or currency hedging transactions (valued at the termination value thereof) and (vi)
any Guarantee of any Indebtedness of the type listed in numerals (i) through (v) above or other
obligations of any other Person.
“Independent Director” means a Director who qualifies as an independent
Director (miembro independiente) under applicable Colombian Law, including, without
limitation, Article 44 of Law 964 of 2005 and the regulations, requirements, orders, circulares
and policies of the Superintendencia Financiera de Colombia.
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“Independent Valuation” has the meaning set forth in Section 8.2(c).
“Independent Valuator” means an international investment banking firm of
recognized standing with experience in providing investment banking appraisal or valuation
services and independent of the Shareholders and their Affiliates or such other Person to be
agreed by the Shareholders.
“In-House Services” has the meaning set forth in Section 7.4(d).
“Initial Insurance Term” has the meaning set forth in Section 7.5(a).
“Insurance Break-up Fee” has the meaning set forth in Section 7.5(d).
“Insurance Program Agreement” means the agreement to provide insurance
services between Seguros, Seguros Colpatria and the Bank, substantially in the form attached
hereto as Exhibit D.
“Insurance Services” has the meaning set forth in Section 7.5(a).
“Integration Leader” means the individual so designated by Investor in writing
to the Colpatria Group.
“Investing Person” shall have the meaning set forth in Section 7.3(c).
“Investor” has the meaning set forth in the preamble to this Agreement.
“Investor Group” means the Investor and any of its Affiliates which directly
Owns JVCo Shares and Bank Shares including (a) only after (and including) the Tranche A
Closing Date, Yorkshire and Mayaro and (b) only after (and including) the Tranche B Closing
Date, Multiacciones; and each such Person, an “Investor Group Member.”
“Investor Group Representative” means Investor.
“Investor Shares” means the Bank Shares and the JVCo Shares Owned by the
Investor Group.
“JVCo Shares” has the meaning set forth in the Recitals.
“JVCo” has the meaning set forth in the preamble to this Agreement.
“Law” means any law (including common law), treaty, statute, ordinance, code,
rule or regulation of a Governmental Authority, including, without limitation, the regulations,
requirements, orders, circulares and policies of the Superintendencia Financiera de Colombia,
or any judgment, decree, order, writ, award, injunction or determination, whether preliminary or
final, of an arbitrator or court or other Governmental Authority.
“LIBOR Rate” means, for any period of determination, a rate equal to the simple
average of the offered rate for deposits in Dollars for a six-month period which appears on
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Reuters Page LIBOR 01 at or about 11:00 a.m., London time, on each Business Day during such
period.
“Lien” means any lien, charge, security interest, mortgage, deed of trust, pledge,
hypothecation, conditional sale or other title retention agreement, security agreement, easement,
reservation, restriction, right of way, option, right of first refusal or offer, or other similar
encumbrance, in each case whether or not relating to the extension of credit or the incurrence of
Indebtedness.
“Major Competitor” means (a) each of the Persons listed in Schedule 1.1(b)
hereto or (b) (i) any deposit taking institution, (ii) any consumer finance company whose
consolidated consumer loan balance is greater than 10% of the Bank’s consolidated consumer
loan balance, or (iii) any commercial finance company whose consolidated commercial loan
balance is greater than 10% of the Bank’s consolidated commercial loan balance, and for each of
(b)(i),(ii) and (iii) in each case in Colombia.
“Material Colpatria Default Period” has the meaning set forth in Section 12.5.
“Material Colpatria Defaults” has the meaning set forth in Section 12.1.
“Material Investor Default Period” has the meaning set forth in Section 12.6.
“Material Investor Defaults” has the meaning set forth in Section 12.3.
“Material Misconduct” means, with respect to a Person, gross negligence, a
willful and material breach of this Agreement, fraud, material breach of a fiduciary duty arising
under this Agreement or the Charter Documents of JVCo, the Bank or any Subsidiary of the
Bank, any conviction of or plea of nolo contendere to a felony, and any action involving a
consent to an injunction or order by any Governmental Authority prohibiting material securities
Laws violations. For purposes of the preceding sentence: (i) a Person that consults with
reputable legal counsel, an accountant or other expert in respect of the affairs of JVCo, the Bank
or any Subsidiary of the Bank shall be deemed to have acted in good faith and without
negligence with regard to any action or inaction that is taken in accordance with the advice or
opinion of such advisor so long as such advisor was selected with reasonable care; and (ii) a
Person’s reliance upon the truth and accuracy of any written statement, representation or
warranty of a Shareholder shall be deemed to have been reasonable and in good faith absent such
Person’s actual knowledge that such statement, representation or warranty was not, in fact, true
and accurate.
“Mayaro” has the meaning set forth in the preamble to this Agreement.
“Minimum Capital Adequacy Ratio” means the minimum Capital Adequacy
Ratio to be maintained by the Bank at all times. The Minimum Capital Adequacy Ratio shall be
the greater of (a) the capital adequacy ratio (relación de solvencia) required under applicable
Colombian Law, including Article 2 of Decree 1720 of 2001 and the regulations, requirements,
orders, circulares and policies of the Superintendencia Financiera de Colombia and (b) the
capital adequacy ratio determined in accordance with the methodology described in Schedule
1.1(c) hereto. Schedule 1.1(c) shall be deemed amended from time to time to reflect any changes
10
NY\1247980.10
to GE Money’s capital adequacy determination methodology occurring after the date hereof
upon receipt by the Colpatria Group and the Bank of a notice (by electronic mail or as otherwise
permitted under Section 14.3 hereof) from an authorized officer of GE Money setting forth (i)
the revised determination methodology and (ii) showing the Bank’s new Minimum Capital
Adequacy Ratio. The methodology used for determining the Minimum Capital Adequacy Ratio
for the Bank shall be the same methodology used by GE Money in all countries other than
Colombia.
“Minimum Percentage” means the percentage of voting shares of Parent which
are Owned, directly or indirectly, by the Relevant Shareholders as of the date hereof (as such
percentage has been specified in writing by the Colpatria Group to the Investor Group on the
date of the execution of the Stock Purchase Agreement).
“Minor Competitor” means (i) any consumer finance company whose
consolidated consumer loan balance is 10% or less of the Bank’s consolidated consumer loan
balance in Colombia, and/or (ii) any commercial finance company whose consolidated
commercial loan balance is 10% or less of the Bank’s consolidated commercial loan balance in
Colombia.
“Net Profits” means, for any period, consolidated net profits of the Bank and its
consolidated Subsidiaries, net of (i) eliminations, (ii) minority interests and (iii) any funds, Tax
credits, Tax refund certificates, securities and in kind payments referred to in Section 7.1(e) that
are received by the Bank as a result of any Clawback Claims, to the extent such funds, Tax
credits, Tax refund certificates, securities and in kind payments are included in the determination
of consolidated net profits, as determined in accordance with US GAAP. If the Bank pays any
Insurance Break-up Fee in accordance with Section 7.5, such amount shall be added to the Net
Profits for purposes of determining the Exercise Price.
“Non-Compete Period” means the period beginning on the date hereof and
ending (i) with respect to the Investor Group and GE Money, on the earlier of the date the
Colpatria Group’s Ownership Interest in the Bank shall be no greater than 10% or on the third
anniversary of the date on which the Investor Group ceases to Own any Shares and (ii) with
respect to the Colpatria Group, on the third anniversary of the date on which the Colpatria Group
ceases to Own any Shares.
“Notice” has the meaning set forth in Section 5.2(a).
“OFAC Laws” means the Laws administered or enforced by the Office of
Foreign Assets Control of the U.S. Department of the Treasury or the Bureau of Industry and
Security of the U.S. Department of Commerce.
“OFAC List” means the list of Specifically Designated Nationals and Blocked
Persons
included
in
the
OFAC
Laws
and
available
at
http://www.treas.gov/offices/enforcement/ofac/sdn/.
“Offer Expiration Date” has the meaning set forth in Section 5.2(b).
“Offer Notice” has the meaning set forth in Section 5.2(b).
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NY\1247980.10
“Offer Price” has the meaning set forth in Section 5.2(b).
“Offerees” has the meaning set forth in Section 5.2(a).
“Offeror” has the meaning set forth in Section 5.2.
“Option A Bank Shares” means the number of Bank Shares equal to the greater
of (a) 3,629,643,755 Bank Shares plus the number of Bank Shares representing 10.01% of the
total outstanding Bank Shares acquired by the Colpatria Group after the Tranche A Closing Date;
and (b) the sum of the number of Bank Shares necessary for the Investor Group to obtain an
Ownership Interest in the Bank equal to 50.01% on the Option Closing Date after giving effect to
the exercise of Call Option A or Put Option A (as the case may be) plus the number of Bank
Shares equal to one half of the Bank Shares owned by the Pension Funds on such Option Closing
Date. On the date hereof, 50.01% of the total outstanding Bank Shares corresponds to
18,133,714,706 Bank Shares.
“Option A/B Setoff Amount” means with respect to each of the Option Closing
Date for Call Option A/Put Option A and the Option Closing Date for Call Option B/Put Option
B, the amount due by the Colpatria Group to the Investor Group under the Stock Purchase
Agreement or this Agreement on such Option Closing Date, as such amount has been finally
determined by (i) an arbitration award granted in accordance with Section 13.10 of the Stock
Purchase Agreement or Article XIII of this Agreement, or (ii) agreement of the Parties.
“Option A JVCo Shares” means the number of JVCo Shares representing the
same Percentage Interest in JVCo as the Percentage Interest in the Bank represented by the
Option A Bank Shares on the Option Closing Date.
“Option A Shares” means, collectively, the Option A Bank Shares and the
Option A JVCo Shares.
“Option B Bank Shares” means the number of Bank Shares equal to the lesser of
(a) 5,438,973,487 Bank Shares plus the number of Bank Shares representing 15% of the total
outstanding Bank Shares acquired by the Colpatria Group after the Tranche A Closing Date; and
(b) the sum of the maximum number of Bank Shares which the Colpatria Group can Transfer
while still maintaining 9,065,044,344 Bank Shares (representing an Ownership Interest in the
Bank equal to 25% on the Tranche A Closing Date) plus Bank Shares representing 25% of the
total outstanding Bank Shares acquired by the Colpatria Group after the Tranche A Closing Date,
as the case may be.
“Option B JVCo Shares” means the number of JVCo Shares representing the
Option B Bank Shares on the Option Closing Date.
“Option B Shares” means, collectively, the Option B Bank Shares and the
Option B JVCo Shares.
“Option C” means Put Option C or the Default Call Option in respect of the
Option C Shares.
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NY\1247980.10
“Option C Bank Shares” means all Bank Shares owned by the Colpatria Group
at any time after the Call Option B or the Put Option B is exercised and the corresponding
Option Closing has occurred or the Call Option B and the Put Option B have expired.
“Option C Closing” means any Option Closing in respect of the Option C Shares.
“Options C Closing Date” means the Option Closing Date in respect of the
Option C Shares.
“Option C Holdback Amount” has the meaning set forth in Section 6.4(c)
“Option C JVCo Shares” means the number of JVCo Shares representing the
Option C Bank Shares on the Option C Closing Date.
“Option Closing” has the meaning set forth in Section 6.4(a).
“Option Closing Date” has the meaning set forth in Section 6.4(a).
“Option C Notice” means either the Put Notice or Default Call Notice, as the
case may be, in respect of Option C.
“Option C Payment Date” has the meaning set forth in Section 6.4(b)
“Option C Setoff Amount” means any amount due by the Colpatria Group to the
Investor Group under the Stock Purchase Agreement or this Agreement, as such amount has
been finally determined by (i) an arbitration award granted in accordance with Section 13.10 of
the Stock Purchase Agreement or Article XIII of this Agreement or (ii) agreement of the Parties.
“Option C Shares” means, collectively, the Option C Bank Shares and the
Option C JVCo Shares.
“Option C Valuation Date Financial Statements” means the consolidated
financials statements of the Bank and its consolidated Subsidiaries as of the Valuation Date in
respect of Option C prepared in accordance with US GAAP and audited by the Bank’s
independent auditors.
“Option C Valuation Date Pre-Tax Earnings” means one half of the Bank’s
aggregate pre-tax Net Profits over the twenty-four (24) month period ending on the Valuation
Date in respect of Option C as derived from the Option C Valuation Date Financial Statements.
“Option Notice” means any Call Notice or Put Notice delivered hereunder.
“Option Shares” means, collectively, the Option A Shares, the Option B Shares,
and the Option C Shares, as the case may be.
“Other Colpatria Default Period” has the meaning set forth in Section 12.7.
“Other Colpatria Defaults” has the meaning set forth in Section 12.2.
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NY\1247980.10
“Other Investor Default Period” has the meaning set forth in Section 12.8.
“Other Investor Defaults” has the meaning set forth in Section 12.4.
“Other Preemptive Rights Holders” has the meaning set forth in Section 5.1.
“Outsourced Services” has the meaning set forth in Section 7.4(c).
such asset.
meanings.
“Own” means, with respect to any asset, to own or hold, beneficially or of record,
The terms “Owns”, “Owned”, “Owning”, “Ownership” shall have correlative
“Ownership Interest” means (a) with respect to a Person’s interest in JVCo, a
fraction, the numerator of which is equal to the number of JVCo Shares Owned by such Person
and the denominator of which is equal to the number of JVCo Shares outstanding and (b) with
respect to a Person’s interest in the Bank, a fraction, the numerator of which is equal to the
number of Bank Shares Owned by such Person and the denominator of which is equal to the
number of Bank Shares outstanding.
“Parent” has the meaning set forth in the preamble to this Agreement.
“Pending Claims” means (a) any unresolved claims for indemnification pursuant
to the Stock Purchase Agreement or this Agreement (i) listed in a Claim Notice (as such term is
defined in the Stock Purchase Agreement) delivered to the Colpatria Group prior to the Pending
Claims Deadline; (ii) listed in a notice delivered to the Colpatria Group pursuant to Section 14.3
prior to the Pending Claims Deadline describing in reasonable detail the facts giving rise to any
such claim for indemnification hereunder and including (if then known) the amount or the
method of computation of the amount of such claim; or (iii) submitted to arbitration pursuant to
Article XIII hereof or to Section 13.10 of the Stock Purchase Agreement prior to the Pending
Claims Deadline.
“Pending Claims Deadline” means the day that is sixty (60) days following the
delivery by either party of the Option C Notice.
“Pension Funds” means, collectively, Sociedad Administradora de Fondos de
Pensiones y Cesantía Santander S.A. and Sociedad Administradora de Fondos de Pensiones y
Cesantías Porvenir S.A. and their respective successors and assigns.
“Percentage Interest” means (a) with respect to a Shareholder’s interest in JVCo,
a fraction, the numerator of which is equal to the number of JVCo Shares Owned by such
Shareholder and the denominator of which is equal to the number of JVCo Shares Owned by all
Shareholders and (b) with respect to a Shareholder’s interest in the Bank, a fraction, the
numerator of which is equal to the number of Bank Shares Owned by such Shareholder and the
denominator of which is equal to the number of Bank Shares Owned by all Shareholders.
“Period 1” means the period commencing on and including the date of this
Agreement and ending on but excluding the date on which any of the following has occurred:
(i) the Option A Shares have been Transferred to the Investor Group, or (ii) the Investor Group’s
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NY\1247980.10
Ownership Interest in the Bank is greater than the Colpatria Group’s Ownership Interest in the
Bank.
“Period 2” means the period commencing on and including the day immediately
succeeding the end of Period 1 and ending on the date on which any of the following has
occurred: (i) the Option B Shares have been Transferred to the Investor Group or (ii) (x) the
Colpatria Group’s Ownership Interest in the Bank is equal to or less than 25%; and (y) the
Investor Group’s Ownership Interest in the Bank is equal to or greater than 50%.
“Period 3” means the period commencing on and including the day immediately
succeeding the date on which any of the following has occurred: (i) the Option B Shares have
been Transferred to the Investor Group or (ii) (x) the Colpatria Group’s Ownership Interest in the
Bank is equal to or less than 25%; and (y) the Investor Group’s Ownership Interest in the Bank is
equal to or greater than 50% and ending on the date this Agreement is terminated pursuant to
Section 14.1.
“Period” means Period 1, Period 2 and Period 3, as the case may be.
“Permits” means all permits, franchises, certificates, waivers, authorizations,
approvals, registrations or licenses granted by or obtained from any Governmental Authority.
“Person” means an individual, a legal entity (including, without limitation, a
corporation, a partnership, a limited liability company or a legal entity of public law), a trust, an
universalidad, an unincorporated organization or a Governmental Authority.
“Pesos” means the lawful currency of Colombia.
“Pledged Shares” has the meaning set forth in Section 9.1.
“Post Closing Expenses” means all costs and expenses incurred by the Bank and
its Subsidiaries after the Tranche A Closing Date in promoting and pursuing the Clawback
Claims.
“Preemptive Rights” has the meaning set forth in Section 5.1.
“President” has the meaning set forth in Section 3.7(a).
“Prohibited Person” means a Person (i) who appears on (A) the United Nations
List, (B) the OFAC List or (C) any other similar list relating to export control, terrorism or drug
trafficking administered by any Governmental Authority from time to time that the Bank is
required to monitor and (D) any other list administered by any Governmental Authority that the
Compliance Committee recommends that the Bank monitor and that is publicly available or that
the Bank can lawfully provide to Parent, each such list provided for in subsections (i)(A-D)
above as may be amended, adjusted or modified from time to time, and/or (ii) from one of the
countries appearing on the Sanctioned Country List, and/or (iii) who, to the actual knowledge of
the Relevant Shareholders without any inquiry, has been convicted by, or entered a plea of guilty
or nolo contendere in, a court of competent jurisdiction for any crime involving moral turpitude
or punishable by imprisonment in the jurisdiction involved.
15
NY\1247980.10
“Put Notice” has the meaning set forth in Section 6.2(a).
“Put Option A” has the meaning set forth in Section 6.2(a).
“Put Option B” has the meaning set forth in Section 6.2(b).
“Put Option C” has the meaning set forth in Section 6.2(c).
“Put Options” means, collectively, the Put Option A, the Put Option B and the
Put Option C.
“Relevant Period” has the meaning set forth in Section 7.1(a).
“Relevant Shareholders” means the individuals identified as such by Parent in
writing to Investor.
“Replacement Nominee” has the meaning set forth in Section 3.1(h).
“Rules of Arbitration” has the meaning set forth in Section 13.2.
“Sale to Prohibited Persons” means each of the following events:
(a)
If any Relevant Shareholder directly or indirectly Transfers its Shares in
Parent to a Prohibited Person; or
(b)
If any shareholder of Parent that is not a Relevant Shareholder directly or
indirectly Transfers its shares in Parent to a Prohibited Person and the Relevant Shareholders
know of such proposed Transfer and fail to take commercially reasonable efforts to prevent such
Transfer from occurring; provided, however, that the Relevant Shareholders shall not be required
to exercise any right of first offer, right of first refusal or option to purchase the shares of Parent
being Transferred or otherwise make any payment to the transferor or the transferee of such
shares or to any other Person.
“Salud” has the meaning set forth in the preamble to this Agreement.
“Sanctioned Countries List” means the list of countries which the OFAC Laws
prohibit U.S. Persons (and in some cases non-U.S. Persons controlled by U.S. Persons) from
dealing with individuals, entities or organizations from those countries, as updated from time to
time and which can be found at http://www.treas.gov/offices/enforcement/ofac/programs/.
“Second Relevant Period” has the meaning set forth in Section 7.1(b).
“Second Special Dividend” has the meaning set forth in Section 7.1(b).
“Secretary” means the Secretary of JVCo or, if there be no Secretary, such other
officer of JVCo as the Board of JVCo may appoint to fulfill the duties of Secretary. With respect
to Persons other than JVCo, the term “secretary” means the secretary or other person with
similar powers and duties of such Person.
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NY\1247980.10
“Securities” means (i) any equity securities issued by JVCo, the Bank or any
Subsidiary of the Bank (including, without limitation, JVCo Shares and Bank Shares) and (ii)
any securities convertible into or exchangeable for, or carrying rights to purchase or otherwise
acquire, any securities described in clause (i); provided, however, that with respect to the Bank,
the term “Securities” shall not include certificates of deposit (certificados de déposito a término)
issued by the Bank in the ordinary course of business.
“Securitization Documents” means all of the transaction documents in any
Securitization Transaction and all amendments, modifications and waivers related thereto.
“Securitization Transaction” means any transaction or series of transactions that
have been entered or are to be entered into by JVCo, the Bank or any Subsidiary of the Bank in
which any of them have sold, conveyed, or otherwise transferred, or may sell, convey or
otherwise transfer, receivables (whether now existing or arising in the future), mortgage loans,
consumer loans or securities backed by mortgage loans in a securitization, participation or
similar transaction.
“Seguros” means Seguros de Vida Colpatria S.A., a Colombian capital stock
corporation (sociedad anónima).
“Seguros Colpatria” means Seguros Colpatria, S.A., a Colombian capital stock
corporation (sociedad anónima).
“Shared Services” has the meaning set forth in Section 7.4(a).
“Shared Services Agreement” means the Shared Services Agreement dated as of
the date hereof.
“Shared Services Term” has the meaning set forth in Section 7.4(a).
“Shareholder A” means the individual identified as such by Parent in writing to
Investor on the date hereof.
“Shareholder A Percentage” means the percentage of voting shares of Parent
which are Owned by Shareholder A as of the date hereof (as such percentage has been specified
in writing by the Colpatria Group to the Investor Group on the date hereof).
“Shareholder B” means the individual identified as such by Parent in writing to
Investor on the date hereof.
“Shareholder Representatives” means, with respect to the Colpatria Group, the
Colpatria Group Representative and, with respect to the Investor Group, the Investor Group
Representative.
“Shareholders” means the Colpatria Group and the Investor Group in their
respective capacities as shareholders of JVCo and Bank.
“Shareholders Meeting” has the meaning set forth in Section 2.1(a).
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NY\1247980.10
“Shares” means JVCo Shares and Bank Shares.
“Special Projects” has the meaning set forth in Section 7.6.
“Special Put Period” has the meaning set forth in Section 6.4(j).
“Stock Purchase Agreement” has the meaning set forth in the Recitals.
“Sub-Board” has the meaning set forth in Section 3.1(c).
“Subject Shares” has the meaning set forth in Section 5.2(a).
“Subsequent Bid” has the meaning set forth in Section 7.4(d) and 7.5(b).
“Subsidiary” means, with respect to any Person (including, without limitation,
JVCo and the Bank), any corporation, partnership, limited liability company, joint venture or
other entity which such Person Controls or of which such Person Owns more than fifty percent
(50%) of the securities entitled to vote generally for the election of Directors.
“SVR Report” means the significant variance report to be prepared in connection
with the financial statements from time to time and which shows the differences between US
GAAP and Colombian GAAP.
“Tax” (and, with correlative meaning, “Taxes” and “Taxation”) means (A) any
and all taxes, assessments, fees or like charges, including all Colombian, U.S. or other federal,
national, state, municipal or local income, real property, personal property, sales, excise,
franchise, employment, withholding, transfer, stamp, gross receipts, license, payroll, severance,
occupation, premium, windfall profits, environmental, customs, duties, capital stock, profits,
social security (or similar), unemployment, disability, use, registration, value added, alternative
or add on minimum, estimated or any other taxes of any kind whatsoever, together with any
interest, penalty, or addition thereto imposed by any Governmental Authority, whether disputed
or not and including any obligations to indemnify or otherwise assume or succeed to the tax
liability of any other Person and (B) any liability for the payment of any amount of the type
described in the immediately preceding clause (A) as a result of (1) being a “transferee” of
another person, (2) being a member of an affiliated, combined, consolidated or unitary group, or
(3) any Contractual Obligation/Right.
“Tax Leader” has the meaning set forth in Section 3.7(c).
“Tax Returns” means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or attachment thereto,
and including any amendment thereof, filed or required to be filed with any Governmental
Authority.
“Tranche A Closing Date” has the meaning set forth in the Stock Purchase
Agreement.
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NY\1247980.10
“Tranche B Closing Date” has the meaning set forth in the Stock Purchase
Agreement.
“Tranche B Closing” has the meaning set forth in the Stock Purchase
Agreement.
“Transfer” means, whether voluntary or involuntary, any transfer, assignment,
conveyance, disposition, exchange, sale, pledge, encumbrance, usufruct or hypothecation.
“Transition Period” has the meaning set forth in Section 7.4(b).
“Trapped Dividends” has the meaning set forth in Section 7.1(d).
“United Nations List” means the list of individuals and entities belonging or
related to the Taliban, Osama Bin Laden and the Al-Qaida organization established by the
Security Council of the United Nations pursuant to paragraph 6 of Resolution 1267 (1999), as
amended from time to time.
“U.S.” or “United States” means the United States of America.
“US GAAP” means United States generally accepted accounting principles as in
effect from time to time.
“US$” or “U.S. Dollar” means the lawful currency of the United States.
“Usufruct Agreement” means the usufruct agreement to be entered into by the
Shareholders on the date hereof, in the form attached hereto as Exhibit E.
“Valuation” has the meaning set forth in Section 8.2(a).
“Valuation Date” means the close of business on the last day of the most recent
calendar month ending prior to the delivery of the Option Notice.
“Valuation Date Financial Statements” means the consolidated financial
statements of the Bank and its consolidated Subsidiaries as of the Valuation Date prepared in
accordance with US GAAP.
“Valuation Date Pre-Tax Earnings” means one half of the Bank’s aggregate
pre-tax Net Profits over the twenty-four (24) month period ending on the Valuation Date as
derived from the Valuation Date Financial Statements.
“Valuation Opinion” has the meaning set forth in Section 8.2(a).
“Valuation Price” has the meaning set forth in Section 8.1.
“Valuation Request” has the meaning set forth in Section 8.2(a).
“Written Consent” has the meaning set forth in Section 2.1(a).
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NY\1247980.10
“Yorkshire” has the meaning set forth in the preamble to this Agreement.
1.2.
References to U.S. Dollar Amounts. The Parties agree that the Exchange Rate
shall be used to the extent it is necessary to determine the Peso equivalent of any amounts stated
in U.S. Dollars.
1.3.
Interpretation. As used in this Agreement, the word “including” means
“including, without limitation”, the word “or” is not exclusive (unless the context otherwise
requires) and the words “herein”, “hereof”, “hereby”, “hereto” and “hereunder” refer to this
Agreement as a whole. Unless the context otherwise requires, references herein: (i) to Articles,
Sections, Exhibits, Annexes and Schedules mean the Articles and Sections of and the Exhibits
and Schedules attached to this Agreement; (ii) to a Contractual Obligation/Right or other
document means such Contractual Obligation/Right or other document as amended,
supplemented and modified from time to time to the extent permitted by the provisions thereof
and by this Agreement; (iii) to a Law means such Law as amended from time to time and
includes any successor legislation thereto and any rules and regulations promulgated thereunder,
as the same may be amended from time to time; and (iv) to any party includes its successors in
title and permitted assigns. The Schedules and Exhibits referred to herein shall be construed
with and as an integral part of this Agreement to the same extent as if they were set forth
verbatim herein. Titles to Articles and headings of Sections are inserted for convenience of
reference only and shall not be deemed a part of or to affect the meaning or interpretation of this
Agreement.
ARTICLE II
GENERAL UNDERTAKINGS
2.1.
General.
(a)
From and after the date hereof, each Shareholder shall vote or cause to be
voted all JVCo Shares Owned by such Shareholder at any annual or extraordinary meeting of
shareholders of JVCo (a “Shareholders Meeting”) or, if permitted by applicable Law, in any
written consent executed in lieu of such a meeting of shareholders (a “Written Consent”), and,
together with JVCo, shall take all other actions necessary, to give effect to the provisions of this
Agreement and to ensure that the Charter Documents of JVCo, the Bank and any of its
Subsidiaries give effect to the provisions of this Agreement and do not conflict with the
provisions of this Agreement including, without limitation, voting to approve amendments to the
Charter Documents of JVCo, the Bank and any of its Subsidiaries as provided in Section 2.1(b)
and to remove Directors of JVCo or Directors of the Bank or its Subsidiaries or any officer of
JVCo, the Bank or its Subsidiaries that take actions inconsistent with this Agreement or fail to
take actions required to carry out the intent and purposes of this Agreement. In addition, each
Shareholder shall vote or cause to be voted all JVCo Shares beneficially Owned by such
Shareholder at any Shareholders Meeting or act by Written Consent with respect to such JVCo
Shares, upon any matter submitted for action by JVCo’s shareholders or with respect to which
such JVCo Shareholder may vote or act by Written Consent, in conformity with the specific
terms and provisions of this Agreement and the Charter Documents of JVCo, the Bank and any
of its Subsidiaries. To the extent permitted by applicable Law, in the event that there is any
20
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conflict between the Charter Documents of JVCo, the Bank or any of its Subsidiaries and this
Agreement, the latter shall prevail and the Shareholders and JVCo shall to the extent necessary,
cause the change, amendment or modification of the Charter Documents of JVCo, the Bank and
any of its Subsidiaries to eliminate any such inconsistency.
(b)
The Shareholders shall (i) adopt or cause the Board of JVCo to adopt
Charter Documents for JVCo as set forth in Exhibit A hereto; and (ii) cause JVCo to adopt or
cause the Bank to adopt Charter Documents for the Bank as set forth in Exhibit B hereto.
2.2.
Shareholder Actions; Meetings; Notices.
(a)
In order to effectuate the provisions of this Agreement, and without
limiting the generality of Section 2.1, each Shareholder (i) hereby agrees that when any action or
vote is required to be taken by such Shareholder pursuant to this Agreement, such Shareholder
shall call, or cause the appropriate officers and Directors of JVCo to call, one or more
Shareholders Meetings to take such action or vote, to attend such Shareholders Meetings in
person or by proxy for purposes of obtaining a quorum, or to execute or cause to be executed a
Written Consent to effectuate such shareholder action, (ii) shall cause the Directors of JVCo
appointed by such Shareholder pursuant to Section 3.1(b), to cause the Board of JVCo to adopt,
either at a meeting of the Board of JVCo or by unanimous written consent of the Board of JVCo,
all the resolutions necessary to effectuate the provisions of this Agreement, (iii) shall, to the
extent not in violation of applicable Law, cause the Directors of JVCo appointed by such
Shareholder pursuant to Section 3.1(b) , to cause the Board of JVCo to cause the Secretary not to
record any vote or consent contrary to the terms of this Article II, and (iv) shall cause JVCo, in
its capacity as common agent of the Shareholders to exercise the voting rights with respect to the
Bank Shares Owned by the Shareholders pursuant to Section 2.3 or as shareholder of the other
Subsidiaries of the Bank, and any Director appointed to the Bank’s Sub-Board or to the
Sub-Board of the other Subsidiaries of the Bank pursuant to Section 3.1(d), to perform the
actions referred to in subclauses (i) to (iii) above with respect to the Bank and any of its
Subsidiaries.
(b)
The Bank and any of its Subsidiaries and their Directors and officers and
the Directors of JVCo and officers of JVCo, as applicable, shall deliver to the Shareholders
notice and the agenda for each meeting of shareholders of the Bank and any of its Subsidiaries or
JVCo, as applicable, at least ten (10) Business Days prior to such meeting (and no action of
shareholders at a meeting shall be valid unless a timely notice is provided in advance of such
meeting to the Shareholders in accordance with this Section 2.4(b) or if, notwithstanding the
failure to give such notice timely notice and agenda, all the Shareholders are present in person or
by proxy at the applicable meeting).
(c)
Notwithstanding any of the obligations of JVCo or the Bank under this
Agreement, whenever used in this Agreement, phrases like “JVCo, the Bank and any of its
Subsidiaries shall […]”, “JVCo, the Bank and any of its Subsidiaries agree to […]” and other
similar phrases purporting to impose obligations on JVCo, the Bank or any Subsidiary of the
Bank shall also be construed to impose an obligation on the Shareholders to cause JVCo (or to
cause JVCo to cause the Bank and any of its Subsidiaries) and the Directors of JVCo, Directors
21
NY\1247980.10
and officers appointed by the Shareholders pursuant to Sections 3.1(b) and 3.1(d), to comply
with the relevant provisions of this Agreement.
2.3.
Irrevocable Appointment of Agent.
(a)
Each Shareholder hereby irrevocably appoints JVCo, for the benefit of the
other Shareholders, as its agent to exercise any and all voting rights with respect to the Bank
Shares Owned by such Shareholder, and agrees to abstain from exercising any such voting rights
without the other Shareholder’s consent. JVCo hereby accepts such appointment and agrees to
exercise such voting rights in accordance with this Agreement.
(b)
To give full effect to the Shareholders’ intention that the appointment of
JVCo as common agent shall be irrevocable as provided in (a) above, the Shareholders shall
cause, at the Tranche A Closing Date, each Colpatria Group Member (other than Seguros and
Capitalizadora) and each Investor Group Member to sign a Usufruct Agreement in the form
attached hereto as Exhibit E and (i) in the case of Parent, Constructora, Salud, Multiacciones and
any other Colpatria Group Member, to deliver the Usufruct Agreements signed by such parties to
the Investor Representative; and (ii) in the case of Investor, Yorkshire, Mayaro and any other
Investor Group Member, to deliver the Usufruct Agreement signed by such Parties to the
Colpatria Group Representative. On the Tranche B Closing Date, the Investor Representative
shall deliver the Multiacciones Usufruct Agreement to the Colpatria Representative. Each of the
respective Shareholder Representatives will hold the respective Usufruct Agreements in escrow
and, in the event of a unilateral revocation by any of the Shareholders of its designation of JVCo
as the common agent, the Shareholder Representative of the other non-revoking Shareholders
shall have the right to execute, on behalf of JVCo, the Usufruct Agreement it holds in escrow,
signed by the revoking Shareholder, whereupon such Usufruct Agreement shall become
effective. The Shareholder Representative entitled to execute, on behalf of JVCo, the Usufruct
Agreement of the non-revoking Shareholder shall also have the right to register the Usufruct
Agreement with the Bank’s legal representative and record such Usufruct Agreement in the share
ledger of the Bank. On the Tranche A Closing Date, the Shareholders shall cause JVCo to grant
an irrevocable power of attorney to each of the Shareholder Representatives, giving them the
power and authority to sign and date, on behalf of JVCo, the Usufruct Agreements each of them
will hold in escrow in the event that a Shareholder of such other Shareholder group attempts to
revoke its designation of JVCo as common agent as set forth in Section 2.3(a).
(c)
If any Person shall become a Colpatria Group Member (other than
Seguros and Capitalizadora) or an Investor Group Member after the date hereof such Person
shall deliver to the Investor Representative (in the case of a Colpatria Group Member) or the
Colpatria Representative (in the case of an Investor Group Member) an executed Usufruct
Agreement signed by such Person.
(d)
In the event that any Shareholder attempts to revoke the designation of
JVCo as common agent as set forth in Section 2.3(a), the revoking party must notify the other
party, JVCo and the Bank at least twenty (20) Business Days prior to the revocation becoming
effective.
22
NY\1247980.10
The Bank hereby acknowledges and agrees to the appointment of JVCo as
common agent of the Shareholders, the Usufruct Agreements and the revocation procedures as
set forth in this Section 2.3. The Bank further acknowledges that it shall not accept a revocation
of the designation of JVCo as the common agent from any of the Shareholders, unless such
revocation is perfected (i) in the case of a revocation by an Investor Group Member, by having
the Colpatria Group Shareholder Representative deliver a Usufruct Agreement with respect to
such revoking Investor Group Bank Shares; and (ii) in the case of a revocation by a Colpatria
Group Member, by having the Investor Group Shareholder deliver a Usufruct Agreement with
respect to such revoking Colpatria Group Bank Shares.
(e)
2.4.
Shareholder Representatives.
(a)
Each of the Colpatria Group and the Investor Group shall be represented
exclusively by its respective Shareholder Representative, which shall be the sole party entitled to
act on behalf of, and shall have the power to bind, each Colpatria Group Member or each
Investor Group Member, as the case may be, for the purposes of this Agreement. Each
Shareholder shall be entitled in its sole discretion to replace its respective Shareholder
Representative from time to time by giving written notice to the other Shareholder.
(b)
Each Shareholder Representative hereby appoints and empowers the
Persons listed in Schedule 2.4(b) to represent them in all matters relating to the performance of
this Agreement and any other matter relating to the Colpatria Group’s or the Investor Group’s
Ownership of Shares, as the case may be. Schedule 2.4(b) may be updated from time to time by
the applicable Shareholder Representative in its sole discretion giving written notice to the other
Shareholder Representative.
ARTICLE III
GOVERNANCE
3.1.
Board of Directors.
(a)
The authorized number of members of the Board of JVCo shall be
established and remain at seven members.
(b)
Each Shareholder shall be entitled to designate the following number of
Directors of JVCo and their alternates during each Period:
No. of Colpatria Group
Directors
No. of Investor Group Directors
Period 1
4
3
Period 2
3
4
Period 3
2
5
Period 3, if the Colpatria
0
7
Period
Group’s Ownership Interest in
the Bank Less than 10%
23
NY\1247980.10
(c)
The Shareholder owning the most Bank Shares shall be entitled to
designate the chairman of the Board of JVCo and of the Board of the Bank and any of its
Subsidiaries (each, a “Sub-Board”) who, as of the date hereof, shall be Shareholder A on terms
to be mutually agreed by the Shareholders and Shareholder A. In the event that the foregoing
allocation cannot be given effect by the Shareholders for any reason, the Shareholders agree to
allocate the designation of Directors of JVCo between them so as to most closely reflect the
foregoing allocation. In providing its designees for a Director position for JVCo, each
Shareholder shall designate Persons who are well-qualified and have relevant experience for
such position and have not been convicted by, or entered a plea of guilty or nolo contendere in, a
court of competent jurisdiction for any crime involving moral turpitude or punishable by
imprisonment in the jurisdiction involved.
(d)
Each Sub-Board shall be composed of seven (7) members and shall be
designated by the Shareholders in the same manner and in the same proportion (to the extent
legally permitted or practicable) as the members of the Board of JVCo are designated pursuant to
Section 3.1(b) above, provided, however, that, to the extent the Bank or any Subsidiary of the
Bank is required pursuant to applicable Law to have Independent Directors, each Shareholder
shall designate the following number of Independent Directors and their alternates during each
Period:
Period
Total No. of Colpatria Group
Directors/ Independent Directors
Total No. of Investor Group
Directors/ Independent Directors
Period 1
4/0
3/2
Period 2
3/2
4/0
Period 3
2/1
5/1
Period 3, if the Colpatria
0/0
7/2
Group’s Ownership Interest in
the Bank Less than 10%
(e)
The Shareholders agree to cause each individual designated pursuant to
Section 3.1(b) to be nominated to serve as a Director of JVCo, and to cause each of its
Subsidiaries to cause each individual designated pursuant to Section 3.1(d) to be nominated to
serve as a Director on the applicable Sub-Board, and to take all other necessary actions
(including calling a special meeting of the Board of JVCo or any Sub-Board and/or shareholders)
to ensure that the composition of the Board of JVCo and each Sub-Board is as set forth in this
Section 3.1(e). Each Shareholder agrees that, if at any time it is then entitled to vote for the
election of Directors to the Board of JVCo, it shall vote its Shares or execute proxies or written
consents, as the case may be, and take all other necessary action (including causing JVCo to call
a special meeting of shareholders) in order to ensure that the composition of the Board of JVCo
is as set forth in Section 3.1(b) and that the composition of each Sub-Board is as set forth in
Section 3.1(d).
(f)
A Director may be removed and/or replaced from the Board of JVCo or
Sub-Board only pursuant to the instructions of the Shareholder which holds the right to designate
24
NY\1247980.10
such Director; provided, however, that any Director may be removed for Material Misconduct so
long as such Director is replaced by another Person designated by the Shareholder who holds the
right to designate the Director to be replaced.
(g)
If the authorized number of members of the Board of JVCo or any
Sub-Board is changed in accordance with Section 3.8, the number of Directors of JVCo or
Directors and their alternates that each Shareholder shall be entitled to designate shall be
determined based on their respective shareholdings pursuant to the sistema de cuociente
electoral, provided, however, that so long as the Colpatria Group’s Ownership Interest in the
Bank is at least ten percent, the Colpatria Group shall be entitled to designate at least one
Director to the Board of JVCo and one Director to each Sub-Board.
(h)
If, as a result of death, disability, retirement, resignation, removal or
otherwise, there shall exist or occur any vacancy on the Board of JVCo or any Sub-Board:
(i)
the Shareholder entitled under Sections 3.1(b) or 3.1(d)
to designate such Director whose death, disability, retirement, resignation or
removal resulted in such vacancy, subject to the provisions of Sections 3.1(b) or
3.1(d), may designate another individual (the “Replacement Nominee”) to fill
such vacancy and serve as a Director on the Board of JVCo or as Director on the
applicable Sub-Board; and
(ii)
subject to Section 3.1(b) and 3.1(d), each Shareholder
shall vote its JVCo Shares, or execute proxies or written consents, as the case may
be, in order to ensure or cause JVCo to ensure that the Replacement Nominee be
elected to the Board of JVCo or the applicable Sub-Board.
3.2.
Board Committees. The Board of JVCo and the Bank’s Sub-Board shall create
executive, compensation, compliance, audit and asset/liability committees. In addition, the
Board and any Sub-Board shall have the power to establish and designate additional committees
of the Board or Sub-Board, as applicable, in accordance with Section 3.8(a). The composition of
each committee shall be determined by the Board or the applicable Sub-Board; provided,
however, that the members of each such committee shall be designated by the Shareholders or
their respective designated Directors on the Board or Directors on the Sub-Board to reflect as
closely as possible the same proportion of Directors which each Shareholder has the power to
designate to the Board or Sub-Board as set forth in Sections 3.1(b) and 3.1(d) above; and
provided further that no Shareholder shall have the right to designate any member of a special
committee formed in connection with any transaction, or proposed transaction, between JVCo,
the Bank or any of its Subsidiaries, on the one hand, and such Shareholder or an Affiliate of such
Shareholder of JVCo, the Bank or any of its Subsidiaries, on the other hand.
3.3.
Meetings; Notice.
(a)
The Board of JVCo and the Bank’s Sub-Board shall hold a regularly
scheduled meeting at least once every calendar month. JVCo shall pay or cause the Bank or
appropriate Subsidiary to pay all reasonable out-of-pocket expenses incurred by each Director in
25
NY\1247980.10
connection with attending regular and special meetings of the Board and any committee thereof,
and any such meetings of any Sub-Board and any committee thereof.
(b)
The Shareholders shall cause JVCo to give, or cause each of the Bank and
its Subsidiaries to give, each Director notice and the agenda for each meeting of the Board or any
Sub-Board or any committee thereof at least ten (10) Business Days prior to such meeting (no
action of the Board or any Sub-Board at a meeting shall be valid unless a timely notice is
provided in advance of such meeting to each of its members in accordance with this Section 3.3
or if, notwithstanding the failure to give such timely notice and agenda, all the members are
present in person or by proxy at the applicable meeting).
3.4.
Board Quorum. A quorum of any meeting of the Board or any Sub-Board shall
exist only if at least a majority of the Directors (including at least one Director appointed by each
Shareholder) are present; provided, however, that if a quorum fails to exist with respect to a
meeting convened on at least five (5) Business Days’ prior notice to each Director by reason of
the absence of at least one Director appointed by a Shareholder, then (i) the Directors present
may adjourn and reconvene such meeting upon at least five (5) Business Days’ notice to each
Director and (ii) a quorum shall exist if at least a majority of the Directors are present, even if a
Director appointed by such Shareholder shall again fail to be present at such reconvened
meeting. Except as otherwise provided in Section 3.8(a) below, action at any meeting of the
Board or Sub-Board at which a quorum is present shall require the approval of at least a majority
of the Directors present.
3.5.
Participation in Meetings. To the extent permitted by applicable Law, members
of the Board or any Sub-Board or any committee thereof shall be afforded the opportunity to,
and may participate, in a meeting of the Board, the applicable Sub-Board or such committee by
means of conference telephone, videoconference or similar communications equipment by
means of which all persons participating in the meeting can hear each other simultaneously, and
participation in a meeting pursuant to this provision shall constitute presence in person at such
meeting. To the extent permitted by applicable Law, a resolution in writing (in one or more
counterparts), and signed by all the Directors of JVCo, all the members of the applicable
Sub-Board or all the members of a committee of Directors of JVCo or of the Sub-Board (an
alternate Director being entitled to sign such resolution on behalf of his appointor) shall be as
valid and effective as if it had been passed at a meeting of the Directors of JVCo, members of the
applicable Sub-Board or committee, as the case may be, duly convened and held.
3.6.
Determination of Share Ownership. Throughout this Agreement, for purposes
of determining the number or percentage of JVCo Shares or Bank Shares owned (i) with respect
to the Investor Group, such number or percentage shall include all JVCo Shares or Bank Shares
owned by the Investor Group, and (ii) with respect to the Colpatria Group, such number or
percentage shall include all JVCo Shares or Bank Shares owned by the Colpatria Group. All
JVCo Share and Bank Share numbers contained herein shall be adjusted appropriately for share
splits, share dividends, reverse splits, recombinations and the like.
26
NY\1247980.10
3.7.
President and Other Officers.
(a)
The Board of JVCo and the Bank’s Sub-Board shall each appoint a
president for JVCo and the Bank who will be the chief executive officer and will be responsible
for the day to day operations of JVCo and the Bank under the direction of the Board of JVCo and
the Bank’s Sub-Board (the “President”) and shall consult with representatives of the
Shareholders in order to reach a consensus with respect to the selection of such officers. During
Period 1, the Colpatria Group shall have the right to designate the President, subject to the
approval of the Investor Group in accordance with Section 3.8(a) below.
(b)
The Board of JVCo and the Bank’s Sub-Board shall appoint the other
officers of JVCo and the Bank. The Investor Group shall have the right to designate the
individuals who shall fulfill the roles of Chief Financial Officer, Chief Risk Officer, Chief
Marketing Officer, Chief Compliance Officer, Integration Leader and General Counsel and the
right to appoint up to ten (10) additional Persons, in the aggregate, to serve in such capacities
with JVCo and the Bank and any of its Subsidiaries, it being understood that such additional
Persons will either be at the senior management level or will report directly to senior
management of JVCo and the Bank and any of its Subsidiaries and that all such Persons
appointed by the Investor Group pursuant to this clause shall be subject to the approval of the
Colpatria Group during Period 1 (such approval not to be unreasonably withheld or delayed).
(c)
The Investor Group shall appoint a Tax leader (the “Tax Leader”), subject
to the approval of the Colpatria Group during Period 1 (such approval not to be unreasonably
withheld or delayed).
(d)
The Board of JVCo and the Bank’s Sub-Board shall appoint any Persons
designated as officers by the Investor Group pursuant to Sections 3.7(b) or 3.7(c) above. The
officers and employees appointed by each Shareholder pursuant to this Section 3.7 shall not be
removed by JVCo, the Bank or its Subsidiaries without the consent of the Shareholder entitled to
appoint them, except in case of Material Misconduct. All such vacancies in such positions shall
be filled by appointment by the Shareholder originally entitled to fill them, as set forth in this
Section, unless the Shareholder originally entitled to fill them waives in writing the right to make
such an appointment; provided, however, that no such waiver shall be applicable to any
subsequent vacancy in any such position. For the avoidance of doubt, during Period 2 and
Period 3, the Investor Group shall have the right to designate all officers.
3.8.
Special Voting Provisions for JVCo, the Bank or the Subsidiaries of the
Bank.
(a)
Subject to Section 3.8(a)(xlii), no Shareholder shall cause or permit JVCo,
the Bank or the Subsidiaries of the Bank, or any Director or officer thereof appointed by such
Shareholder, to take any of the actions set forth below except as set forth in this Section 3.8(a).
During Period 1 and Period 2, all of the actions set forth below (whether taken at a meeting of
the shareholders of JVCo, the Bank or the Subsidiaries of the Bank, pursuant to a resolution of
the Board, the Bank’s Sub-Board or the Sub-Board of any other Subsidiary of the Bank or a
committee thereof or by action of one or more officers of JVCo, the Bank or the Subsidiaries of
Bank), shall require the affirmative vote or consent of the Investor Group Representative and the
27
NY\1247980.10
Colpatria Group Representative or, in the case of meetings of the shareholders of the Bank,
JVCo, acting pursuant to Section 2.3 in accordance with written instructions received from the
Investor Group Representative and the Colpatria Group Representative, cast or given at the
relevant shareholders’ meeting or in advance, in writing or the affirmative vote or consent of the
Directors of JVCo designated by each of the Investor Group and the Colpatria Group pursuant to
Section 3.7(b) above:
(i)
Any merger or spin-off of JVCo, the Bank or any of its
Subsidiaries;
(ii)
The entry by JVCo, the Bank or any Subsidiary of the
Bank into any partnership, strategic alliance, joint venture or other similar
arrangement or relationship with any other Person, in the case of the Bank and
any of its Subsidiaries (1) involving (in one or more related transactions) an
expenditure or commitment in excess of US$1,000,000 and/or (2) with any major
supplier, strategic partner or credit card company or association;
(iii)
The approval or making of any voluntary bankruptcy or
reorganization (concordato) or similar filing, or the approval of the dissolution,
liquidation or other termination of the business or operations of JVCo, the Bank
or any Subsidiary of the Bank to the extent such Person is eligible for such
proceedings under applicable Law;
(iv)
With respect to the Bank or any Subsidiary of the Bank
subject to the jurisdiction of the Superintendencia Financiera de Colombia, (1)
the approval or making of any plan of reorganization or recapitalization or similar
action in connection with requests or determinations of the Superintendencia
Financiera de Colombia, or (2) the approval of any voluntary liquidation or other
termination of the business or operations;
(v)
Any recapitalization of JVCo, the Bank or any of its
Subsidiaries;
(vi)
Any change in the authorized capital of JVCo, the Bank
or any of its Subsidiaries;
(vii)
The issuance of any Securities, any increase in the
capital, the admission of any additional equity investor or the issuance of any new
Shares in contravention of Section 3.17;
(viii)
The listing or delisting of any Securities;
(ix)
Acquisitions or consolidations of JVCo, the Bank or
any Subsidiary of the Bank (other than through a merger) or any purchase of
assets by JVCo, the Bank or any Subsidiary of the Bank (other than through a
spin-off), in the case of the Bank and any of its Subsidiaries in excess of
US$25,000,000 in purchase price in the aggregate in any given calendar year;
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NY\1247980.10
provided that, the Board of JVCo shall be notified of any acquisition in excess of
US$5,000,000;
(x)
Any sale of assets in the case of the Bank and any of its
Subsidiaries in excess of US$25,000,000 in sale price in the aggregate in any
given calendar year;
(xi)
Any expenditures for any capital project, investment or
a series of related investments by JVCo, the Bank or any Subsidiary of the Bank
in the aggregate in excess of US$1,000,000 per year (other than as expressly
specified in the annual capital budget included in the Approved Business Plan);
provided, however, that capital expenditures required for JVCo, the Bank or any
Subsidiary of the Bank to comply with Tax and banking Laws shall be permitted;
(xii)
The declaration, payment, amount and timing of
dividends or other distributions (whether in cash, Securities or property) to be
paid by JVCo, the Bank or the Subsidiaries of the Bank, in the case of the Bank or
the Subsidiaries of Bank, in contravention of Section 7.1(c);
(xiii)
The appointment or dismissal of the President of JVCo,
the Bank or any of its Subsidiaries, subject to Section 3.7(a);
(xiv)
The approval of (1) the annual operating budget and
annual capital budget of JVCo, the Bank and any of its Subsidiaries, (2) the
financial statements of JVCo, the Bank and any of its Subsidiaries and (3) the
three-year business plan of JVCo, the Bank and any of its Subsidiaries and its
annual revisions;
(xv)
The appointment, removal or replacement of the
independent auditors of JVCo, the Bank or any Subsidiary of the Bank;
(xvi)
Any change to the operations or policies of the
asset/liability committee or in the asset/liability management practices and
treasury operations of the Bank and the other Subsidiaries of the Bank;
(xvii)
Any change of accounting policies or practices
(including write-off and reserve policies) of JVCo, the Bank or any Subsidiary of
the Bank, except where required by US GAAP or applicable Law, other than as
set forth in Section 7.2;
(xviii)
The commencement of any litigation, administrative or
arbitral proceedings, in each case of JVCo, the Bank and any of its Subsidiaries
involving amounts in excess of US$500,000 (other than collections in the
ordinary course of business), the settlement of any litigation, administrative or
arbitral proceedings, in each case of JVCo, the Bank and any of its Subsidiaries
involving amounts in excess of US$100,000 (other than collections in the
ordinary course of business) or the commencement of any other material
litigation, including, without limitation, any litigation, administrative or arbitral
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NY\1247980.10
proceedings against any Governmental Authority and any litigation,
administrative or arbitral proceedings outside the ordinary course of business
against any major supplier, any strategic partner or any credit card company or
association;
(xix)
The creation of any committee of the Board of JVCo or
any Sub-Board, the modification of any powers or authority of (or of the quorum
or approval requirements of) any such committee or the delegation or revocation
of any power of the Board of JVCo or any Sub-Board;
(xx)
Any significant change of business (including opening
a new line of business or product lines or approving any pricing changes other
than in the ordinary course of business or other than as contemplated in the
Approved Business Plan);
(xxi)
The
entering
into
of
any
new
Securitization
Transaction;
(xxii)
The amendment of any Securitization Document or any
similar document or agreement in respect of a Securitization Transaction;
(xxiii)
The convening of a meeting of the shareholders of
JVCo, the Bank or the Subsidiaries of the Bank without complying with the notice
provisions of Section 2.2(b), except where the Directors of JVCo or Directors (or
such other Persons as are empowered by applicable Law to call such a meeting)
(1) have been requested in writing to convene such a meeting by the Shareholders
and are required by Law to do so or (2) are otherwise required by Law to do so;
(xxiv)
The approval of any Contractual Obligation/Right or
other transaction between JVCo, the Bank or any Subsidiary of the Bank and any
Shareholder, any Affiliate of any Shareholder, and any officer, Director or senior
executive of any Shareholder or Affiliate other than transactions that are (1) in the
ordinary course of the business of JVCo, the Bank or the Subsidiaries of Bank, (2)
on the same terms and conditions offered to the public in general and (3) on an
arm’s length basis;
(xxv)
The creation, issuance or offering of privileged or
preferred Shares with preferred dividends;
(xxvi)
Any change in the corporate form of JVCo, the Bank or
any Subsidiary of the Bank;
(xxvii)
Any change in the powers of the shareholders’
meetings, in the quorums required for transaction of business or in the votes
required for the adoption of resolutions;
(xxviii) Any change in the number of Directors in the Board of
JVCo or Directors in the Bank’s Sub-Board or in the Sub-Board of any other
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Subsidiary of the Bank, in the powers of the Directors of JVCo or any of such
other Directors, in the quorums required for transaction of business or in the votes
required for the adoption of resolutions;
(xxix)
Any change in the powers, duties and responsibilities of
the legal representative (representante legal) of the Bank or any Subsidiary of the
Bank;
(xxx)
Any change in the Charter Documents of JVCo, the
Bank or any Subsidiary of the Bank regarding the shareholders’ agreement to
submit corporate disputes to arbitration;
(xxxi)
The approval of any employee profit sharing plans (or
any amendments thereto) with respect to JVCo, the Bank or any Subsidiary of the
Bank including, but not limited to, any stock option plan, or entering into any
collective bargaining agreement, or establishing, adopting, entering into,
amending or terminating any material Employee Plan;
(xxxii)
Any material changes in the compensation of senior
executives of JVCo, the Bank or any Subsidiary of the Bank and any material
change in the salary policy of JVCo, the Bank or any Subsidiary of the Bank;
(xxxiii) The introduction, discontinuance or material
modification of any major product or service line offered by JVCo, the Bank or
any Subsidiary of the Bank;
(xxxiv)
Any agreement that materially limits or restricts the
ability of JVCo, the Bank or any Subsidiary of the Bank to directly or indirectly
(whether as principal, agent, independent contractor, partner or otherwise) Own,
manage, operate, Control, participate in, perform services for, or otherwise carry
on or engage in (collectively, “Engage”) any business or in any geographic area;
(xxxv)
Any decisions relating to actions to be taken in
response to any material compliance or regulatory orders, investigations or
obligations; or the entering into of any agreements between JVCo, the Bank or
any Subsidiary of the Bank and any Governmental Authority not in the ordinary
course of business;
(xxxvi)
The formation of a Subsidiary that is not wholly-owned
by JVCo, the Bank or its Subsidiaries;
(xxxvii) The Transfer of any Securities of any Subsidiary other
than in connection with a transaction that has been approved pursuant to this
Section 3.8(a);
(xxxviii) The opening or closure of operating facilities not
contemplated by the Approved Business Plan (1) involving an increase or
decrease of 5% or more in the number of total branches then owned or operated
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by JVCo, the Bank or the Subsidiaries of Bank; or (2) subject (or to be subject) to
leases involving (in the aggregate) payment in excess of US$500,000 per year;
(xxxix)
Undertaking any action that would reasonably be
expected to lead to a suspension or revocation of any required Permits material to
the conduct of business of JVCo, the Bank or any Subsidiary of the Bank;
(xl)
The approval or modification of any credit or other
underwriting policy of the Bank or any Subsidiary of the Bank;
(xli)
Any change to the current hedging policy; or
(xlii)
Any amendment or modification to the Charter
Documents of JVCo, the Bank or the Subsidiaries of the Bank the effect of which
is to limit, undermine or circumvent the requirement of Shareholder consent for
any of the foregoing actions set forth in this Section 3.8(a).
(b)
During Period 3, and so long as the Colpatria Group’s Ownership Interest
in the Bank is at least 10%, the affirmative vote or consent of the Colpatria Group shall only be
required for the actions set forth in items (iii); (viii); (xii); (xxiii); (xxiv); (xxv); (xxvi); (xxvii);
(xxix); (xxx); (xlii) of Section 3.8(a). No consent of the Colpatria Group shall be required for
the actions set forth in Section 3.8(a) or this Section 3.8(b) if the Colpatria Group’s Ownership
Interest in the Bank falls below 10%.
3.9.
Shareholder and Director Voting Provisions for any Subsidiary
Company(ies). Subject to Section 3.8(a)(xlii) above, no Shareholder shall, or shall permit, any
Director or officer designated by it or member of any Sub-Board designated by it to cause JVCo,
the Bank or any Subsidiary of the Bank, any member of the Board of JVCo, the Bank’s Sub
Board or the Sub-Board of any Subsidiary of the Bank appointed by such Shareholder pursuant
to Sections 3.1(b) or 3.1(d) or any officer JVCo, the Bank or any Subsidiary of the Bank
appointed by such Shareholder pursuant to Sections 3.1(b) or 3.1(d) to take any of the actions
listed in Section 3.8(a) above unless such action has been approved by the affirmative vote or
consent of the Investor Group Representative and the Colpatria Group Representative, cast or
given at the relevant shareholders’ meeting or in advance, in writing or the affirmative vote or
consent of the Directors designated by the Investor Group pursuant to Section 3.7(b).
3.10.
Compliance Committee.
(a)
The Shareholders shall use their commercially reasonable efforts and
actively work to ensure that JVCo, the Bank and any of its Subsidiaries cooperate with, and
provide financial and other adequate support (including access to reasonably necessary
infrastructure, personnel and external resources) and respond to, the Compliance Committee in
the exercise of its powers and the implementation of compliance programs as provided herein,
including by causing the Directors of JVCo, Directors and officers appointed by each
Shareholder pursuant to Sections 3.1(b), 3.1(d) and 3.7 or to take all reasonably necessary
actions to effectuate the foregoing.
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(b)
The Compliance Committee shall be composed of five members (who for
the avoidance of doubt need not be members of the Bank’s Sub-Board), three of whom shall be
designated by the Investor Group and two of whom shall be designated by the Colpatria Group.
One of the members selected by the Investor Group shall be the chair of the Compliance
Committee. Regular or special meetings of the Compliance Committee shall be held at any place
designated thereby. The Compliance Committee shall meet not less than monthly. Special
meetings of the Compliance Committee for any purpose or purposes may be called at any time
by the chair of the Compliance Committee or any two members of the Compliance Committee.
A majority of the members of the Compliance Committee (including at least one designee of the
Colpatria Group) shall constitute a quorum for the transaction of business; provided, however,
that if a quorum fails to exist with respect to a meeting convened on at least five (5) Business
Days’ prior notice to each committee member by reason of the absence of at least one Colpatria
Group designee, then (i) the committee members present may adjourn and reconvene such
meeting upon at least five (5) Business Days’ notice to each committee member and (ii) if at
least one Colpatria Group designee shall again fail to be present at such reconvened meeting, a
quorum shall nonetheless be deemed to exist. Every act or decision done or made by a majority
of the members present at a meeting duly held at which a quorum is present shall be regarded as
the act of the Compliance Committee. Members of the Compliance Committee may participate
in a meeting through use of conference telephone or similar communications equipment, so long
as all members participating in such meeting can hear one another.
(c)
The Compliance Committee shall from time to time recommend to the
Bank’s Sub-Board new compliance policies and procedures and modifications thereto applicable
to the business and operations of the Bank and any of its Subsidiaries (as such policies may be
amended from time to time, the “Compliance Policies”), included among such Compliance
Policies shall be those compliance policies and the program known as “Integrity: The Spirit and
Letter of Our Commitment” (as modified to reflect the local circumstances) as set forth in Annex
3 hereto, and the Shareholders shall cause JVCo, the Bank and its Subsidiaries to adopt the
Compliance Policies set forth in Annex 3. The Shareholders shall cause JVCo, the Bank and any
of its Subsidiaries (i) to give due consideration to recommendations of the Compliance
Committee, including with respect to the adoption of the compliance policies of the Investor
Group and their Affiliates, and (ii) not to amend or modify the Compliance Policies or adopt new
compliance policies unless recommended by the Compliance Committee and approved by the
Bank’s Sub-Board.
(d)
The Shareholders shall cause JVCo, the Bank and its Subsidiaries to
implement and enforce recommendations of the Compliance Committee to the extent the
Compliance Committee reasonably believes such recommendations should be implemented and
enforced in order to avoid, mitigate the risk of, or cure, a violation of the Laws of the United
States applicable to any Shareholder, JVCo, the Bank or its Subsidiaries (including the FCPA,
OFAC Regulations and all AML Laws).
(e)
The Compliance Committee shall have the power to:
(i)
recommend the adoption of Compliance Policies, as
provided in Section 3.10(c), and require the adoption of those Compliance
Policies contemplated by Section 3.10(c)
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(ii)
determine policies for JVCo, the Bank and any of its
Subsidiaries with respect to the procedures for the review and prior approval of
agreements between JVCo, the Bank or any Subsidiary of the Bank and any
Governmental Authority in connection with any regulatory matter (including any
regulatory inquiry or investigation), including a policy as to when such
agreements must be reviewed by the Bank’s Sub-Board or the Compliance
Committee;
(iii)
supervise the implementation and maintenance of the
Compliance Policies adopted by JVCo, the Bank or any of its Subsidiaries,
including (A) by supervising the training of employees regarding the key
operations, policy and procedures, specifically in the areas of lending, selling and
collections and the requirements of applicable Compliance Policies and (B) by
requiring that employees provide an annual acknowledgment of commitment to
the Compliance Policies;
(iv)
audit, monitor and test compliance with and the
effectiveness of the Compliance Policies and review the operations of JVCo, the
Bank and any of its Subsidiaries in order to assess compliance with applicable
Laws and the maintenance of adequate internal controls; and
(v)
investigate any potential violations of the Compliance
Policies or applicable Laws (including Laws applicable to any Shareholder) by
JVCo, the Bank and any of its Subsidiaries, and any officer, Director, employee
or similar Person thereof, and make recommendations to the President and Board
of JVCo and Sub-Boards regarding an appropriate resolution of any such matter.
(f)
The Compliance Committee shall be provided (with or without advance
notice) with reasonable access to all of the records, premises, officers, Directors, employees,
accountants, auditors, attorneys, contractors, businesses, or other interests of JVCo, the Bank and
any of its Subsidiaries for the purposes of carrying out the responsibilities set forth in
Section 3.10(e).
(g)
The Shareholders shall cause JVCo, the Bank and any of its Subsidiaries
to actively work to promote a culture of compliance in JVCo, the Bank and any of its
Subsidiaries by way of regular communications. It is the intent of the parties that
communications will be sent by key influencers within JVCo, the Bank and any of its
Subsidiaries (e.g., the President) at a minimum of quarterly intervals. In addition, posters, emails
and newsletters will be distributed by JVCo, the Bank and any of its Subsidiaries in order to
disseminate and encourage compliance with the Compliance Policies. The success of such
communications program will be measured by way of an annual compliance awareness survey
completed by all employees of JVCo, the Bank and any of its Subsidiaries.
3.11. Conduct of Business. The Shareholders shall cause JVCo, the Bank and any of
its Subsidiaries, and JVCo shall and shall cause the Bank and any of its Subsidiaries, to comply
with all applicable Laws in the conduct of their business.
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3.12.
Cooperation with Regulators.
(a)
Each Shareholder agrees to cause JVCo, the Bank and any of its
Subsidiaries to provide full access to their respective records, books, premises, officers,
Directors, employees, accountants, attorneys, contractors, businesses, or other interests to, and to
cooperate fully with, any Governmental Authority (including any state or other political
subdivision thereof and including any self regulatory organization) exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining to government and
having regulatory, supervisory, investigative or examination authority over Investor or any
Affiliate of Investor (collectively, “Regulators”) in connection with any examination, audit,
investigation or inquiry by such Regulator.
(b)
The Shareholders shall cause JVCo, the Bank and any of its Subsidiaries
to implement, establish, modify or terminate any program, practice, policy, action or omission
that is necessary or appropriate, as the case may be, if it is required by any Government
Authority in connection with any examination, audit, investigation, inquiry, or it is a regulatory
requirement by such Regulator.
3.13. Books and Records. The books and records of JVCo shall be maintained in
accordance with US GAAP and the books and records of the Bank and any of its Subsidiaries
shall be maintained in accordance with Colombian GAAP and US GAAP and shall accurately
reflect JVCo’s, the Bank’s and any of its Subsidiaries’ financial position. The Shareholders shall
cause JVCo, the Bank and any of its Subsidiaries to give or cause to be given to each
Shareholder, its representatives and agents full and complete access to the premises, properties,
personnel, information, systems, books and records (wherever located) and Contractual
Obligation/Rights of JVCo, the Bank and any of its Subsidiaries and shall furnish copies of all
such books, records and Contractual Obligation/Rights and all other financial, operating and
other data, and other information as such Shareholder may reasonably request, including all
accounting books and records, all financial books and records and statements and all Tax Return
and Tax records, in each case without unreasonably disrupting the operations of JVCo, the Bank
or the Subsidiaries of the Bank. Such access shall be provided and caused to be provided, inter
alia, for purposes of conducting an audit of JVCo, the Bank and any of its Subsidiaries by
individuals selected by the requesting Shareholder, to be conducted at such Shareholder’s
expense, or for the purpose of reviewing and assessing accounting and financial reporting
processes of JVCo, the Bank and any of its Subsidiaries.
3.14.
Tax Matters.
(a)
The Tax Leader shall be responsible for all matters relating to Taxes of or
with respect to JVCo, the Bank and any of its Subsidiaries. The Tax Leader shall not without the
prior written consent of the Investor Group Representative and the Colpatria Group
Representative, not to be unreasonably withheld or delayed, make or change any material Tax
election, file any material Tax Return, enter into any material closing agreement, settle any
material Tax claim or assessment, surrender any right to claim a material Tax refund, offset or
other reduction in a material Tax liability, consent to any extension or waiver of the limitations
period applicable to any material Tax claim or assessment or take or omit to take any other
material action related to Taxes, or fail to pay any material Tax or any other material liability or
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charge of JVCo, the Bank or the other Subsidiaries of JVCo when due (other than Taxes or
charges contested in good faith by appropriate proceedings and for which JVCo, the Bank and
the other Subsidiaries of JVCo have made adequate reserves in accordance with GAAP).
(b)
The Shareholders shall have the right to meet on a monthly basis with the
Tax Leader and the employees of JVCo, the Bank and any of its Subsidiaries responsible for
Taxes and to participate in the audit, and the disposition of any audit, of any Tax Return of JVCo
and each of its Subsidiaries. The Shareholders shall have the right to review in advance and
comment upon all submissions made in the course of audits or appeals thereof.
3.15.
Report to Shareholders.
(a)
The Shareholder shall cause JVCo to prepare and provide to the
Shareholders (i) the annual financial statements (including an SVR Report) audited by JVCo’s
independent auditors and (ii) the unaudited monthly financial statements (including an SVR
Report), which shall be delivered no later than ten (10) Business Days after the end of each
calendar month, each prepared in accordance with US GAAP.
(b)
The Shareholder shall cause JVCo to cause the Bank and any of its
Subsidiaries to prepare and provide to the Shareholders (i) the annual financial statements
(including an SVR Report) audited by their independent auditors and (ii) the unaudited monthly
financial statements (including an SVR Report), which shall be delivered no later than ten (10)
Business Days after the end of each calendar month, each prepared in accordance with US
GAAP and Colombian GAAP.
3.16. Annual Business Plan. The Shareholders shall cause JVCo, the Bank and its
Subsidiaries to abide by the terms of the Approved Business Plan then in effect. The
Shareholders shall cause management to prepare an annual business plan (for the following three
(3) years) to be presented to the JVCo Board for approval prior to November 30th of each
calendar year.
3.17.
Equity Issuances.
(a)
The issuance of new Bank Shares in connection with acquisition
transactions (whether such shares are being issued for cash to be used in such acquisition or in
exchange of securities of the Person being acquired) shall be at a price per Bank Share that is the
lesser of (i) a price representing a multiple of book value equal to the multiple obtained by
dividing the acquisition price of the target by the target’s net book value; and (ii)(x) if the
acquisition occurs after the Tranche B Closing Date and prior to the end of Period 1, a price per
Bank Share equal to the price per Bank Share corresponding to the Exercise Price set forth in
Section 6.3(a), (y) if the acquisition occurs after commencement of Period 2 and prior to
commencement of Period 3, a price per Bank Share equal to the price per Bank Share
corresponding to the Exercise Price set forth in Section 6.3(b), and (z) if the acquisition occurs
after the commencement of Period 3, a price per Bank Share equal to the price per Bank Share
corresponding to the Exercise Price set forth in Section 6.3(c).
(b)
The issuance of new Bank Shares other than in connection with
acquisition transactions shall be at a price that is the lesser of (i) the Valuation Price, as set forth
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and in accordance with Section 8.2, and (ii)(x) if the issuance occurs after the Tranche B Closing
Date and prior to the end of Period 1, a price per Bank Share equal to the price per Bank Share
corresponding to the Exercise Price set forth in Section 6.3(a), (y) if the issuance occurs after
commencement of Period 2 and prior to commencement of Period 3, a price per Bank Share
equal to the price per Bank Share corresponding to the Exercise Price set forth in Section 6.3(b),
and (z) if the issuance occurs after the commencement of Period 3, a price per Bank Share equal
to the price per Bank Share corresponding to the Exercise Price set forth in Section 6.3(c).
(c)
Any issuance of new Bank Shares to the Shareholders or any of their
Affiliates shall be accompanied by an issuance of JVCo Shares representing the same Percentage
Interest in JVCo as the Percentage Interest in the Bank represented by the Bank Shares being
issued.
ARTICLE IV
RESOLUTION OF DISPUTES
4.1.
Submission of Disputed Matters. In the event that a Shareholder (or a Director
or officer of JVCo, the Bank or any Subsidiary of the Bank appointed by such Shareholder
pursuant to Sections 3.1(b) or 3.1(d) acting on behalf of such Shareholder) proposes that an
action specified in Section 3.8 be taken by JVCo, the Bank or any Subsidiary of the Bank
(whether such proposed action could be taken at a meeting of the shareholders of JVCo, the
Bank or any of its Subsidiaries, pursuant to a resolution of the Board of JVCo, the Bank’s
Sub-Board or the Sub-Board of any other Subsidiary of the Bank or a committee thereof or by
action of one or more officers of JVCo, the Bank or any of its Subsidiaries) and such action has
not received the affirmative vote or consent of the Investor Group Representative and the
Colpatria Group Representative as required pursuant to Section 3.8(a), cast or given at the
relevant shareholders’ meeting or meeting of the Board of JVCo, the Bank’s Sub-Board or the
Sub-Board of any Subsidiary of the Bank, or within sixty (60) days from being submitted to the
Shareholders in case of actions that could be taken by action of one or more officers of JVCo, the
Bank or any of its Subsidiaries, and such proposed action has not been withdrawn by the
Shareholder which proposed it, then such proposed action may be submitted to the Dispute
Committee (as defined below) by any Shareholder within thirty (30) days of the relevant
shareholders’ meeting or meeting of the Board of JVCo, the Bank’s Sub-Board or the Sub-Board
of any Subsidiary of the Bank, or from the expiration of such sixty (60) day period.
4.2.
Dispute Committee. The “Dispute Committee” shall consist of the chief
financial officer of Parent and the chief financial officer of GE Money Americas. The Dispute
Committee shall attempt to resolve the disputed issue within thirty (30) days of the referral of
such matter. If the Dispute Committee agrees upon a recommended resolution of such
disagreement within such period, the Dispute Committees shall submit such recommendation for
consideration by the Shareholders.
4.3.
CEO Resolution. If the Dispute Committee fails to agree upon a recommended
solution of such disagreement within thirty (30) days of the referral of such matter to the Dispute
Committee as set forth in Section 4.2 or the Shareholders fails to adopt the solution
recommended by the Dispute Committee within thirty (30) days of the date on which such
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recommendation was made to the Shareholders, any Shareholder may request in a written notice
to the other Shareholders that the disagreement be resolved by the chief executive officer of GE
Money Americas and the chief executive officer of Parent. The respective chief executive
officers shall attempt to resolve the disputed issue within twenty (20) days of the receipt by the
Shareholders of the above mentioned written notice. If the respective chief executive officers
agree in writing upon a recommended resolution of such disagreement within such period, such
resolution shall be binding on the Shareholders and the Shareholders shall take all necessary
action to implement such resolution. If, on the other hand, the respective chief executive officers
shall fail to agree in writing upon a recommended resolution of such disagreement within such
period, and the Shareholders have not otherwise agreed on a resolution of such disagreement,
then the proposed action shall not be taken.
4.4.
Temporary Operations. During the procedures outlined in Sections 4.1, 4.2 and
4.3 and for so long as the Shareholders shall fail to reach an agreement with respect to any action
specified in Section 3.8(a), the Shareholders shall cause JVCo, the Bank and any of its
Subsidiaries to carry on their operations to the greatest extent possible in a manner consistent
with past operations without giving effect to the proposed action.
(a)
During Periods 1 and 2, in case of disagreement with respect to the actions
specified in subclauses (xi) and (xiv) of Section 3.8(a), the Board of JVCo may authorize (and
such authorization shall be binding on the Shareholders) JVCo, the Bank and any of its
Subsidiaries to continue to conduct their operations in accordance with the most recently
Approved Business Plan.
(b)
During Periods 1 and 2 , in the case of disagreement with respect to the
actions specified in subclauses (vi) and (vii), and during Periods 1, 2 and 3 (subject to Section
3.8(b)), in the case of disagreement with respect to the actions specified in subclause (xxv) of
Section 3.8(a), the Board of JVCo may authorize (and such authorization shall be binding on the
Shareholders) JVCo, the Bank and any of its Subsidiaries to take such actions to the extent (and
only to such extent as) they are necessary to prevent a violation of applicable Law, including the
regulations, requirements, orders, circulares and policies of the Superintendencia Financiera de
Colombia, which is reasonably likely to result in material adverse consequences to the
Shareholders or JVCo, the Bank and any of its Subsidiaries; provided, however, that the Board of
JVCo shall attempt to limit any actions authorized pursuant to this Section 4.4(b) to (i) the
minimum actions necessary to prevent such violation of applicable Law and (ii) actions which
can be reversed or undone without unreasonable burden for JVCo, the Bank and any of its
Subsidiaries.
ARTICLE V
RESTRICTIONS ON ISSUANCE AND TRANSFER OF SECURITIES
The following rights, obligations and restrictions shall apply to the issuance and Transfer
of Securities of JVCo, the Bank and any of its Subsidiaries:
5.1.
Preemptive Rights. Shareholders shall have the right (the “Preemptive Rights”)
to subscribe for any new Securities issued by JVCo, the Bank and any of its Subsidiaries pro rata
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in accordance with their equity ownership of JVCo, the Bank and the applicable Subsidiary of
the Bank, as the case may be, which subscription right may be assigned in whole or in part by the
Investor only to an Affiliate of such Investor who is or agrees to become a party to this
Agreement. Each Shareholder’s pro rata share, for such purposes, will be equal to a fraction
whose numerator is the number of Shares owned by such Shareholder and whose denominator is
the sum of (i) the aggregate number of Shares then owned by the Shareholders, (ii) the aggregate
number of additional Shares then outstanding to the extent that the holders of such Shares are
entitled to preemptive rights with respect to the issuance of the new Securities and (iii) the
number of Shares issuable upon exercise of any convertible or exchangeable Securities, warrants,
options or similar rights then outstanding to the extent that the holders thereof are entitled to
preemptive rights with respect to such issuance of the new Securities (any such holders that are
entitled to such preemptive rights, together with any holders of Shares referred to in clause (ii)
who are entitled to preemptive rights, being sometimes referred to herein as the “Other
Preemptive Rights Holders”). Each Shareholder shall be given a minimum of twenty (20) days
following receipt of written notice from JVCo, the Bank or the applicable Subsidiary, as the case
may be, of the proposed issuance (which notice shall specify the purchase price and other terms
and conditions relating to the sale of the Securities) to decide whether or not to exercise its
Preemptive Rights. The Preemptive Rights may be exercised in whole or in part. In the event
that a Shareholder or Other Preemptive Rights Holder does not exercise its Preemptive Rights or
elects not to subscribe for its full pro rata share: (a) JVCo, the Bank or the applicable Subsidiary,
as the case may be, shall give notice of such Shareholder’s or Other Preemptive Rights Holder’s
decision, or failure to decide, to the other Shareholders and (b) the Shareholders who do exercise
their Preemptive Rights shall have an additional ten (10) days as of receipt of said notice from
JVCo, the Bank or the applicable Subsidiary, as the case may be, to decide whether to subscribe
for such declining Shareholder’s or Other Preemptive Rights Holder’s share of such new
Securities pro rata in accordance with the number of new Securities with respect to which such
accepting Shareholders exercise their Preemptive Rights. Any Shareholder that is a Colpatria
Group Member, other than Parent, may assign its Preemptive Rights pursuant to the terms of this
Section 5.1 to Parent.
5.2.
Right of First Offer. To the extent such Transfer is permitted under Section 5.3
the Investor Group (the “Offeror”) may Transfer all (but not less than all) Investor Shares, in a
single transaction or in a series of related transactions, pursuant to the following provisions:
(a)
Prior to consummating any such Transfer of Investor Shares, the Offeror
shall deliver a written notice (the “Notice”) to the Colpatria Group Representative on behalf of
the Colpatria Group Members (the “Offerees”) setting forth its intention to Transfer Investor
Shares to a third party and the number of Investor Shares to be Transferred (the “Subject
Shares”).
(b)
Within ninety (90) days of having received such Notice (the “Offer
Expiration Date”), the Colpatria Group Representative on behalf of the Offerees shall deliver to
the Offeror a written notice (the “Offer Notice”) containing the price at which such Offerees
wish to buy the Subject Shares (the “Offer Price”) and any other terms of the offer.
(c)
The Offer Notice shall constitute, for a period of one hundred and eighty
days (180) days from the date on which it shall have been deemed given, an irrevocable offer by
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the Offerees to buy from the Offeror, at the Offer Price, all (but not less than all) of the Subject
Shares; provided, however that such Offer Notice shall not in any way limit the Offeror from
receiving, considering and consummating other offers so long as such sale is made at a price
equal to or higher than that offered by the Offerees and such sale complies with all the other
provisions of the Agreement.
(d)
The Offeror may accept the offer set forth in the Offer Notice by giving
written notice to the Colpatria Group Representative on behalf of the Offerees prior to the
expiration of such Offer Notice. If the Offeror accepts the offer set forth in the Offer Notice, the
Offerees shall purchase and pay, by wire transfer of immediately available funds to an account
designated by the Offeror, for the Subject Shares within three hundred and sixty (360) days after
the delivery of the Notice.
(e)
The Transfer shall occur if (i) no provision of any applicable Law and no
judgment, injunction, order or decree shall prohibit the consummation of the Transfer, and
counsel to the Shareholders shall have delivered an opinion to the Shareholders to such effect,
(ii) all actions by or in respect of any Governmental Authority necessary to permit the
consummation of the Transfer shall have been taken, made or obtained and all filings with any
Governmental Authority necessary to permit the consummation of the Transfer shall have been
made, and counsel to the Colpatria Group shall have delivered an opinion to the Shareholders to
such effect, and (iii) (subject to the waiver by the Shareholders) all material consents required
from third-parties pursuant to Contractual Obligation/Rights shall have been obtained. From and
after the date of acceptance of the Offer Notice, each Shareholder shall use its commercially
reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary or desirable under applicable Laws to consummate the Transfer including the
satisfaction of the conditions set forth above; provided that if any of the conditions set forth in
clauses (i), (ii) and (iii) have not been satisfied or waived within three hundred and sixty (360)
days following delivery of the Notice, then the Investor Group shall be permitted to sell the
Subject Shares as provided in Section 5.2(f).
(f)
If (i) the Offeror does not accept the offer set forth in the Offer Notice or
(ii) the Transfer of the Subject Shares shall not occur within the time period specified in
Section 5.2(d) the Offeror may sell the Subject Shares to a third person within the 270 day period
following the receipt of the Offer Notice by the Investor provided that such sale is made at a
price equal to or higher than that offered by the Offerees and such sale complies with all the
other provisions of the Agreement.
(g)
If such sale is not completed within two hundred and seventy (270) days
following the Offer Expiration Date or the 360 day period referred to in Section 5.2(d), the
Offeror may not complete such Transfer unless it first gives the Colpatria Group Representative
on behalf of the Offerees a new Notice with respect to the proposed Transfer and otherwise
complies with the provisions of this Section 5.2.
5.3.
Limitations on Transfers of Shares.
(a)
Prior to the end of the thirty (30) day period commencing on the fifth
anniversary of this Agreement, neither Shareholder shall Transfer its Shares to any Person,
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provided, however that (i) the Investor Group shall be entitled to Transfer its Shares to a direct or
indirect Subsidiary of GE Capital Services, (ii) Parent shall be entitled to Transfer its Shares to a
direct or indirect Subsidiary of Parent , and (iii) Seguros and Capitalizadora shall be entitled to
Transfer their Shares to an Affiliate of the Colpatria Group, provided, further, that the transferee
of any Shareholder specifically assumes and agrees to be bound by the provisions of this
Agreement by executing an assumption agreement reasonably acceptable to the other
Shareholder. In the case of a Transfer by the Investor Group, the Colpatria Group shall have
received written confirmation in form and substance reasonably satisfactory to the Colpatria
Group from GE Capital that the GE Capital Guarantee shall remain in full force and effect after
such Transfer. In the case of a Transfer by Parent, Seguros or Capitalizadora, the Investor Group
shall have received written confirmation in form and substance reasonably satisfactory to the
Investor Group that Parent is jointly and severally responsible for the obligations of the
transferee and that Parent shall continue to comply with the covenants in Article IX.
(b)
After the end of the thirty (30) day period commencing on the fifth
anniversary of this Agreement, the Investor Group shall be permitted to Transfer its Shares to
any Person, provided that the Investor Group complies with Section 5.2 and provided further,
that such transferee specifically assumes and agrees to be bound by the provisions of this
Agreement by executing an assumption agreement reasonably acceptable to the Colpatria Group.
(c)
After the end of the thirty (30) day period commencing on the fifth
anniversary of this Agreement, the Colpatria Group shall not Transfer its Shares to any Person,
except to the Investor Group pursuant to Put Option C in accordance with Section 6.2(c) hereof
or to a direct or indirect subsidiary of Parent pursuant to Section 5.3(a) above.
5.4.
Transfers in Violation of this Agreement. Any Transfer or attempted Transfer
of any Shares in violation of this Agreement shall be void and the purported transferee in any
such Transfer shall not be treated (and the purported transferor shall be treated) as the owner of
such Shares for all purposes. Any Transfer not made in compliance with the requirements of this
Agreement shall be null and void ab initio (to the extent such effects are not prohibited by
applicable Law) and the Secretary of JVCo or the secretary of the Bank shall not record such
Transfer in the share registry book of JVCo or the Bank.
ARTICLE VI
CALL AND PUT OPTIONS
6.1.
Call Options.
(a)
At any time during the period commencing on the fourth anniversary of
this Agreement and ending thirty (30) days thereafter (the “Call/Put Option A Period”), the
Investor Group shall have the option to purchase all (but not less than all) the Option A Shares
from the Colpatria Group (the “Call Option A”) at the Exercise Price by delivering a notice to
the Colpatria Group Representative to this effect (a “Call Notice”).
(b)
At any time during the period commencing on the fifth anniversary of this
Agreement and ending thirty (30) days thereafter (the “Call/Put Option B Period”), the Investor
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Group shall have the option to purchase all (but not less than all) the Option B Shares from the
Colpatria Group (the “Call Option B”) at the Exercise Price by delivering a Call Notice to the
Colpatria Group Representative.
6.2.
Put Options.
(a)
At any time during the Call/Put Option A Period, the Colpatria Group
shall have the option to sell all (but not less than all) the Option A Shares to the Investor Group
(the “Put Option A”) at the Exercise Price by delivering a notice to the Investor Group
Representative to this effect (a “Put Notice”).
(b)
At any time during the Call/Put Option B Period, the Colpatria Group
shall have the option to sell all (but not less than all) the Option B Shares to the Investor Group
(the “Put Option B”) at the Exercise Price by delivering a Put Notice to the Investor Group
Representative.
(c)
At any time during the period commencing on the fifth anniversary of this
Agreement and ending thirty (30) days thereafter, or at any time during the periods commencing
on the subsequent odd-year (seventh, ninth, etc.) anniversaries of this Agreement and ending
thirty (30) days thereafter, the Colpatria Group shall have the option to sell all (but not less than
all) the Option C Shares to Investor (the “Put Option C”) at the Exercise Price by delivering a
Put Notice to the Investor Group Representative.
6.3.
Exercise Price. The price to be paid by the Investor to the Colpatria Group (the
“Exercise Price”) shall be determined as follows:
(a)
In the case of the Option A Shares, the Exercise Price shall be equal to the
product of (i) 9.15 times (ii) the Valuation Date Pre-Tax Earnings times (iii) the Ownership
Interest in the Bank represented by the Option A Bank Shares on the Option Closing Date. The
Exercise Price for the Option A Shares shall be reduced by the Option A/B Setoff Amount.
(b)
In the case of the Option B Shares, the Exercise Price shall be equal to the
product of (i) 9.15 times (ii) the Valuation Date Pre-Tax Earnings times (iii) the Ownership
Interest in the Bank represented by the Option B Bank Shares on the Option Closing Date. The
Exercise Price for the Option B Shares shall be reduced by the Option A/B Setoff Amount.
(c)
In the case of the Option C Shares, if Option C is exercised on or before
the 15th anniversary of this Agreement, the Exercise Price shall be (i) the average of (A) the
product of (I) 9.15 times (II) the Option C Valuation Date Pre-Tax Earnings times (III) the
Ownership Interest in the Bank represented by the Option C Bank Shares on the Option Closing
Date and (B) the product of the (I) Option C Valuation Price times (II) the number of Option C
Bank Shares; or (ii) if Option C is exercised after the 15th anniversary of this Agreement, the
lesser of (A) the product of (I) 9.15 times (II) the Option C Valuation Date Pre-Tax Earnings
times (III) the Ownership Interest in the Bank represented by the Option C Bank Shares on the
Option Closing Date and (B) the product of the (I) Option C Valuation Price times (II) the
number of Option C Bank Shares. The Exercise Price for the Option C Shares shall be reduced
by the Option C Setoff Amount and the Final Claim Amount, if any.
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(d)
Subject to any limitations under applicable Law, the Shareholders agree to
allocate the Exercise Price among JVCo Shares and the Bank Shares so as to minimize the
adverse tax consequences of any Transfer of Shares pursuant to this Article VI.
6.4.
Closing Procedures; Deliveries.
(a)
Following the exercise of a Call Option or Put Option, the Shareholders
shall promptly take all steps necessary to consummate the purchase and sale of Option Shares
(the “Option Closing”). In any event, subject to receipt of any necessary approvals from any
applicable Governmental Authority or Permits, the Option Closing shall occur within ninety (90)
days of the receipt of a Call Notice or Put Notice, as the case may be, or within fifteen (15) days
from receipt of such approvals or Permits, whichever is later (such date on which the Option
Closing is actually held or the Option C Shares are deposited into escrow with the Escrow Agent
pursuant to Section 6.4(b), the “Option Closing Date”).
(b)
With respect to the Option C Closing only, subject to Section 6.4(d) and
after the conditions for Option C Closing set forth in Section 6.4, other than payment of the
Exercise Price and the delivery of the Option C Shares, have been satisfied or waived, the
Investor Group may request the Colpatria Group to deposit the Option C Shares in escrow with
the Escrow Agent, such Option C Shares to be released to the Investor Group upon payment of
the Exercise Price by the Investor Group; provided, however, that (i) the Investor Group shall
pay the Exercise Price no later than one year following the receipt by the Investor of the Put
Notice with respect to Option C (the date of such payment the “Option C Payment Date”); and
(ii) the Exercise Price shall accrue interest at the LIBOR Rate from the date when the Option C
Shares are deposited in escrow through the Option C Payment Date. Upon deposit of the Option
C Shares with the Escrow Agent, the Investor Group shall be entitled to vote the Option C Shares
and shall receive any dividends or other economic benefits derived from the ownership of the
Option C Shares. The obligation of the Investor Group to pay the Exercise Price (together with
any interest accrued thereon) to the Colpatria Group shall solely be subject to the expiration of
the one-year period referred to in item (i) of this Section 6.4(b).
(c)
Within ten (10) days from the date the Investor Group receives or delivers
an Option C Notice, as the case may be the Investor Group shall provide a notice to the Colpatria
Group of any Pending Claims with the Investor Group’s good faith estimation of the amount of
any Pending Claims (the “Option C Holdback Amount”), which notice may be amended from
time to time by the Investor Group up to the Pending Claims Deadline to reflect any additional
Pending Claims. If there are any Pending Claims at the Pending Claims Deadline, the Investor
shall have the right to withhold from the Exercise Price, or at the request of the Colpatria Group,
to deposit in escrow with the Escrow Agent, an amount equal to the Option C Holdback Amount
until such Pending Claims are resolved.
(d)
If it is subsequently agreed by the Investor Group and by the Colpatria
Group or determined by a final arbitration award in respect of the Pending Claims that the
Option C Holdback is greater than the final amount due to the Investor Group in connection with
the Pending Claims (the amount of such final award, the “Final Claim Amount”), the Colpatria
Group shall be entitled to receive the difference between the Option C Holdback and the Final
Claim Amount plus any interest or profits earned in the escrow account (if applicable) (the
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“Colpatria Portion”), and the Exercise Price shall be reduced by the amount equal to the Option
C Holdback Amount less the Colpatria Portion. If the Final Claim Amount is greater than the
Option C Holdback Amount, the Exercise Price shall be reduced by the Final Claim Amount.
Any funds deposited in escrow shall be released to the party entitled to receive such funds in
accordance with this Section 6.4(d). To the extent the amounts owed to the Investor Group
exceed the Option C Holdback Amount held in escrow, Parent shall remain liable for such
amounts.
(e)
Annex 2 hereto sets forth the procedures and deliveries required to be
followed by the Shareholders in respect of an Option Closing.
(f)
The obligation of the Investor Group to pay the Exercise Price (together
with any interest accrued thereon) to the Colpatria Group shall solely be subject to the conditions
set forth in Section 6.4(g) and to the delivery of the applicable Option Shares to the Investor
Group or, in the case of the Option C Shares, if requested by the Investor Group in accordance
with this Agreement, in escrow. The Investor Group shall pay the Exercise Price in full, free and
clear of, and subject to no, claims, deductions, reductions or right of set off except as specifically
set forth in Article VI.
(g)
The Option Closing shall only be held if (i) the Exercise Price has been
finally determined in accordance with the procedures set forth on Annex 2, (ii) no provision of
any applicable Law and no judgment, injunction, order or decree shall prohibit the
consummation of the Option Closing and counsel to the Colpatria Group shall have delivered an
opinion to the Investor Group to such effect (such obligation to deliver the opinion may be
waived by the Investor), (iii) all actions by or in respect of any Governmental Authority
necessary to permit the consummation of the Option Closing shall have been taken, made or
obtained and all filings with any Governmental Authority necessary to permit the consummation
of the Option Closing shall have been made and counsel to the Colpatria Group shall have
delivered an opinion to the Investor Group to such effect (such obligation to deliver the opinion
may be waived by the Investor), (iv) (subject to waiver by the Investor Group) all material
consents required from third-parties pursuant to Contractual Obligation/Rights shall have been
obtained, (v) with respect to Put Option B, no Material Colpatria Default shall have occurred and
be continuing and the Investor Group shall have received a certificate of a responsible officer of
Parent to that effect (subject to waiver by the Investor Group) and (vi) with respect to Call
Option B, no Material Investor Default shall have occurred and be continuing and the Colpatria
Group shall have received a certificate of a responsible officer of the Investor Group to that
effect (subject to waiver by the Colpatria Group). From and after the date of the Call Notice or
Put Notice, as applicable, each Shareholder shall use its commercially reasonable efforts to take,
or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable
under applicable Laws to consummate the Option Closing including the satisfaction of the
conditions set forth above and any filings for approval of any Governmental Authority required
for the consummation of the Option Closing shall be filed within fifteen (15) days after the date
of the Call Notice or Put Notice, as applicable.
(h)
Notwithstanding anything in this Agreement to the contrary, in connection
with any exercise of a Call Option or Put Option, the Investor Group shall have the right to name
any one or more of the Investor Group Members or designees thereof (who shall be an Affiliate
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of the Investor Group) to purchase the Option Shares subject thereto, provided that the transferee
specifically assumes and agrees to be bound by the provisions of this Agreement by executing an
assumption agreement reasonably acceptable to the Colpatria Group.
(i)
The Colpatria Group shall not pay any portion of the proceeds received
from the transactions contemplated by this Agreement to any Person if, to the knowledge of the
Colpatria Group, the making of such payment would constitute a violation of applicable Law or
such payment otherwise represents consideration for the receipt of any official benefit.
Additionally, and without limiting the foregoing, no portion of the proceeds received from the
transactions contemplated by this Agreement will be paid, directly or indirectly, to any Person
holding a direct or indirect equity interest in the Colpatria Group if, to the knowledge of the
Colpatria Group, (i) such Person was, or was the agent or designee of, a Public Official at the
time such equity interests were acquired by such Person and (ii) such equity interests were issued
in exchange for any official benefit. As used herein, the term “Public Official” means (i) any
official, member or employee of a Governmental Authority, (ii) any political party or official
thereof or (iii) any candidate for political office.
(j)
If the Colpatria Group requests an extension of the GE Capital Guarantee
within the one year period prior to the expiration of the GE Capital Guarantee and the Investor
does not deliver to the Colpatria Group an extension of the GE Capital Guarantee in substantially
the same form and substance as the GE Capital Guarantee, within sixty (60) days from the date
of receiving the request to extend the GE Capital Guarantee, (the period from the end of such
sixty (60) day period until the termination of the GE Capital Guarantee, the “Special Put
Period”), the Colpatria Group shall have the right, but not the obligation, to sell to the Investor
Group, at any single time during the Special Put Period, the Option Shares, on the terms and in
accordance with the procedures set forth in this Article VI with respect to the Put Options. If the
GE Capital Guarantee is not extended, after the expiration of the term of the GE Capital
Guarantee, the Investor shall not incur or permit to exist any Lien on the Bank Shares owned by
the Investor, provided, however, that nothing in this Section 6.4(j) shall limit or restrict in any
way Investor’s right to Transfer its Shares pursuant to Article V.
ARTICLE VII
ADDITIONAL AGREEMENTS AND COVENANTS
7.1.
Dividend Policy and Other Payments.
(a)
First Special Dividend for 2007. The Shareholders shall cause JVCo to
cause the Bank to declare and pay to its shareholders on the date of declaration (or on such other
date required pursuant to Colombian Law), prior to the Tranche A Closing Date, a one-time
dividend (the “First Special Dividend”) equal to 30% of the Bank’s Colombian GAAP Net
Profits for the period commencing on January 1, 2007 and ending thirty (30) days after the First
Audit Period (such period, the “First Relevant Period”), as determined in accordance with this
Section 7.1(a). For purposes of determining the amount of the First Special Dividend, the
Colpatria Group shall cause the Bank to have its independent auditors perform an audit of the
Bank’s consolidated financial statements for the period commencing on January 1, 2007 and
ending no less than sixty (60) days prior to the declaration of the First Special Dividend (such
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period, the “First Audit Period”). The Investor Group shall audit the Bank’s estimated
Colombian GAAP Net Profits for the period commencing on the first day after the First Audit
Period until the last day of the First Relevant Period (such period, the “First Unaudited Stub
Period”). The First Special Dividend shall be the sum of (A) 30% of the Bank’s Colombian
GAAP Net Profits for the First Audit Period as derived from the audited financial statements
plus (B) 30% of the Bank’s Colombian GAAP Net Profits for the First Unaudited Stub Period as
derived from the Investor Group’s audit.
(b)
Second Special Dividend for 2007.
Subject to the proviso in
Section 7.1(c), the Shareholders shall cause JVCo to cause the Bank to declare and pay to its
shareholders on the date of declaration (or on such other date required pursuant to Colombian
Law), prior to January 10, 2008, a one-time dividend (the “Second Special Dividend”) equal to
30% of the Bank’s estimated Colombian GAAP Net Profits (the “Estimated Net Profits”) for the
period commencing on January 1, 2007 and ending December 31, 2007 (such period, the
“Second Relevant Period”), less the First Special Dividend, as determined in accordance with
this Section 7.1(b). For purposes of determining the amount of the Second Special Dividend, the
Shareholders shall attempt to agree upon the Estimated Net Profits for the Second Relevant
Period. If the Shareholders cannot agree on the Estimated Net Profits, the Second Special
Dividend shall be based on the average of the Investor Group's Estimated Net Profits and the
Colpatria Group's Estimated Net Profits.
(c)
Dividend Policy for Years Subsequent to 2007. The Shareholders shall
cause JVCo to cause the Bank to declare and pay a dividend in respect of the Bank’s 2008 results
and of its results for each fiscal year thereafter which shall be no less than 30% of the Bank’s Net
Profits for such fiscal year, such dividend to be payable in cash to each Shareholder pro rata to
its Ownership Interest in the Bank; provided, however, that to the extent that, (i) following the
payment of any such dividend, the Capital Adequacy Ratio of the Bank would be lower than the
Minimum Capital Adequacy Ratio, such payment shall be reduced by the amount necessary to
allow the Bank to maintain the Minimum Capital Adequacy Ratio or (ii) such dividend otherwise
exceeds the amount permitted to be paid under applicable Colombian Law, such payment shall
be reduced to the amount permitted to be paid under applicable Colombian Law.
(d)
Trapped Dividends. In the event that dividends equal to at least 30% of
Bank’s Net Profits are not paid in respect of a particular fiscal year because the Minimum
Capital Adequacy Ratio was not satisfied or the payment of such amount was not permitted
under applicable Colombian Law, then to the maximum extent permitted under applicable
Colombian Law (and subject to compliance with this Section 7.1(d)), the amount of any such
shortfall in dividend payments (“Trapped Dividends”) shall be added to the dividend payments
to be made in subsequent years. In the event Trapped Dividends are paid to the Investor Group
in respect of Bank Shares which were Transferred to the Investor Group by the Colpatria Group
following the exercise of a Call Option or Put Option or otherwise, but which Bank Shares were
Owned by the Colpatria Group during the period to which the Trapped Dividends relate, the
Investor Group shall transfer to the Colpatria Group all or the appropriate proportionate share of
such Trapped Dividends received by the Investor attributable to the time period during which the
Colpatria Group Owned such Bank Shares, less any Taxes payable by the Investor Group in
respect of such Trapped Dividends.
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(e)
Clawback of Certain Litigation. (i) The Shareholders shall cause JVCo to
cause the Bank to diligently promote and pursue the judicial claims set forth in Schedule 7.1(e)
hereof (the “Clawback Claims”).
(i)
Upon final determination of each Clawback Claim, (A)
in the event that the Bank shall receive any funds, the Shareholders shall cause
JVCo to cause the Bank to distribute such funds as dividends as soon as possible
(but in any event no later than the next annual dividend distribution); (B) in the
event that the Bank shall receive Tax credits in respect of any Tax period (or
portion thereof) ending on or before the Tranche A Closing Date as a result of
such Clawback Claim, the Shareholders shall cause JVCo to cause the Bank to
distribute as dividends, as soon as possible after the Bank has filed its Colombian
federal income Tax returns for any taxable year in which the Bank’s Tax liability
is reduced by such Tax credits, an amount equal to the excess (if any) of (x) the
actual cash Taxes that would have been incurred by the Bank for such taxable
year if no such Tax credits had been obtained over (y) the actual cash Taxes
incurred by the Bank for such taxable year; and (C) in the event that the Bank
shall receive Tax refund certificates, securities or in kind payments in respect of
any Tax period (or portion thereof) ending on or before the Tranche A Closing
Date as a result of such Clawback Claim, the Shareholders shall cause JVCo to
cause the Bank to distribute as dividends, as soon as possible (but in any event no
later than the next annual dividend distribution following the disposition,
redemption or payment of such Tax refund certificates, securities or in kind
payments), an amount equal to the funds actually received by the Bank upon
disposition, redemption or payment of such Tax refund certificates, securities or
in kind payments, in each case, less any Post Closing Expenses; provided, that,
for the avoidance of doubt, no amounts shall be distributed as dividends except to
the extent they arise from any Tax period (or portion thereof) ending on or before
the Tranche A Closing Date.
(ii)
The Investor Group shall transfer to the Colpatria
Group immediately upon receipt thereof any dividends received with respect to
the Clawback Claims, less any Taxes payable by the Investor Group in respect of
such dividends, provided that the Colpatria Group shall indemnify the Investor
Group, promptly upon demand therefor, from and against any and all Taxes
incurred by any Investor Group Member (including any withholding Taxes on any
future dividend payments received by any Investor Group Member) that would
not have been incurred but for the final determination of any Clawback Claims in
respect of which the Investor Group has transferred payment to the Colpatria
Group pursuant to this Section 7.1(e)(ii).
(iii)
Any dividends paid pursuant to this Section 7.1(e) shall
be in addition to the dividends set forth in Section 7.1(b); provided, however, that
such dividends shall be reduced to the extent required to comply with the proviso
in Section 7.1(b) and provided, further, that any such reduction shall be treated as
a Trapped Dividend for the purposes of Section 7.1(d).
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7.2.
Provisions and Reserves. The provisions and reserves established by JVCo, the
Bank and any of its Subsidiaries in their financial statements that are prepared in accordance
with US GAAP, including the provision for loan losses, shall be determined in accordance with
GE Money’s reserve policy as set forth in Schedule 7.2 hereto. Schedule 7.2 shall be deemed
amended from time to time to reflect any changes to GE Money’s reserve policies occurring after
the date hereof upon receipt by the Colpatria Group and the Bank of a notice (by electronic mail
or as otherwise permitted under Section 14.3 hereof) from an authorized officer of GE Money
setting forth (i) the revised determination methodology and (ii) showing the Bank’s new reserve
requirement. The methodology used for determining the reserves for JVCo, the Bank and its
Subsidiaries shall be the same methodology used by GE Money in all countries other than
Colombia.
7.3.
Shareholders’ Covenant Not to Compete.
(a)
Except as otherwise permitted in this Section 7.3, each Colpatria Group
Member, on behalf of itself and its Affiliates, and each Investor Group Member, on behalf of
itself and GE Money, mutually and severally covenants and agrees not to Engage within
Colombia in any Banking Business during the Non-Compete Period other than through JVCo,
the Bank and any of its Subsidiaries; provided that the Colpatria Group may engage in all
businesses listed in Schedule 7.3 hereof.
(b)
During the Non-Compete Period, the Colpatria Group and the Investor
Group shall not and shall not permit GE Money to, directly or indirectly, without the approval of
the other party (which approval shall not be unreasonably withheld): (i) induce or attempt to
induce any employee, salesperson or representative of JVCo, the Bank or any Subsidiary of the
Bank to leave the employment of JVCo, the Bank or such Subsidiary of the Bank, or in any way
interfere with the relationship between JVCo, the Bank or any Subsidiary of the Bank, on the one
hand, and any employee, salesperson or representative thereof, on the other hand; (ii) hire any
Person who was an employee, salesperson or representative of JVCo, the Bank or any of their
respective Subsidiaries for (x) a one-year period in the case of executive employees and (y) a six
month period in the case of non-executive employees, after such Person’s employment or
contractual relationship with JVCo, the Bank or of their respective Subsidiaries has been
terminated; unless such employment or relationship was terminated by JVCo, the Bank or any of
their respective Subsidiaries in which case no restriction shall apply; or (iii) induce or attempt to
induce any customer, supplier, licensee or other business relation of JVCo, the Bank or any
Subsidiary of the Bank to do Banking Business with them (other than for the sole benefit of
JVCo, the Bank or such Subsidiary of the Bank) or to reduce or cease doing business with JVCo,
the Bank or any Subsidiary of the Bank, or in any way interfere with the relationship between
any such customer, supplier, licensee or business relation, on the one hand, and JVCo, the Bank
or any Subsidiary of the Bank, on the other hand.
(c)
Nothing herein shall prohibit any Person (an “Investing Person”) from:
(i) selling its goods and/or services, including construction and sale of real properties, travel
agencies and dental services, on credit through an installment or revolving plan offered directly
by such Person (and not by an affiliated or unaffiliated third party); (ii) financing any insurance
product or service (including credit insurance) or any asset management product or service, any
“plan de capitalización”; or (iii) receiving from or providing to any Person a personal guaranty
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or a loan or engaging in other financial arrangements in connection with a transaction or
transactions that does not otherwise constitute a Banking Business; (iv) participation in asset
management and “planes de capitalización”, including, without limitation, in the case of the
Colpatria Group or any of its Affiliates through its Ownership of Capitalizadora, or insurance
businesses (including credit insurance) that might otherwise constitute a Banking Business
hereunder; (v) Owning not more than 20% of the outstanding equity securities of any Person, so
long as such Investing Person has no active participation in the business or management of the
Banking Business conducted by such Person; (vi) ordinary course investments by or in employee
retirement, pension or similar plans; (vii) the Ownership, management or Control of any Banking
Business resulting from the exercise of any rights or remedies in connection with a lending
business not constituting a Banking Business (including foreclosure, realization or repossession
of any collateral or other security for financing, and including Ownership of related equity); or
(viii) having any Ownership of a Banking Business acquired, pursuant to purchase, merger,
consolidation or otherwise, as part of an acquisition where (A) the Banking Business conducted
by such Person or business in Colombia constitutes not more than 10% of the revenues of such
acquired Person or business for its most recently completed fiscal year, and (B) after
consummation of such acquisition, the Investing Person offers the Bank the right to acquire from
the Investing Person the Banking Business (to the extent located inside Colombia) for cash at the
fair market value thereof (but not in excess of the price paid therefor by the Investing Person)
and the Bank declines or fails to accept such offer within ninety (90) days following receipt of
such offer and fails to consummate such acquisition within one hundred and eighty (180) days
from the acceptance of such offer. The members of the Board of JVCo appointed pursuant to
Section 3.1(b) or 3.1(d) by the Shareholder who is not the Investing Person shall have the sole
authority to determine if the Bank will accept the Investing Person’s offer and the Investing
Person’s consent shall not be required with respect to such action pursuant to Section 3.8. The
Investing Person shall make available such information as such Directors may reasonably request
in order to evaluate the acquisition of the Banking Business. If it is determined that Bank is
potentially interested in acquiring the Banking Business, the Shareholders shall undertake to
mutually determine the fair market value of the Banking Business within thirty (30) days
following notice being given by Bank of such potential interest to the Investing Person. If the
Shareholders do not agree on the fair market value within such 30-day period, the Board of JVCo
shall select an Independent Valuator to determine the fair market value of the Banking Business
within forty-five (45) days following the end of such 30-day period. For avoidance of doubt, an
Affiliate of a Shareholder that is bound by this Section 7.3 shall remain bound by the terms of
this Section 7.3 from and after such time as such Person ceases to be an Affiliate of a
Shareholder.
(d)
The Shareholders recognize that the covenants in this Section 7.3, and the
territorial, time and other limitations with respect thereto, are reasonable and properly required
for the adequate protection of the Shareholders, JVCo, the Bank and its Subsidiaries. Each
Shareholder agrees that such limitations are reasonable with respect to its activities, business and
public purpose. The Shareholders agree and acknowledge that the violation of this Section 7.3
would cause irreparable injury to the Shareholders, as the owner of the Shares, and that the
remedy at Law for any violation or threatened violation thereof would be inadequate and that, in
addition to whatever other remedies may be available at Law or in equity, Shareholders shall be
entitled to seek temporary and permanent injunctive or other equitable relief without the
necessity of proving actual damages or posting bond. The Shareholders also waive any
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requirement of proving actual damages in connection with obtaining any such injunctive or other
equitable relief. Further, it is the intention of the Shareholders that the provisions of this
Section 7.3 shall be enforced to the fullest extent permissible under the Laws and the public
policies of the State of New York or any other applicable jurisdiction. If, at the time of
enforcement of this Section 7.3, a court holds that the restrictions stated herein are unreasonable
under the circumstances then existing, the Shareholders agree that the maximum period, scope or
geographical area reasonable under such circumstances shall be substituted for the stated period,
scope or area set forth in this Section 7.3.
(e)
Notwithstanding the foregoing provisions of this Section 7.3, if a
Shareholder desires to acquire a Banking Business in Colombia that the Bank cannot acquire
under Law, the Shareholders hereby agree that each Shareholder shall have the opportunity to
participate on the same terms and conditions offered to the other Shareholder in any acquisition,
combination, merger or other similar arrangement involving any person Engaged within
Colombia in the Banking Business, and such opportunity to participate shall be pro rata to each
Shareholder’s Percentage Interest, irrespective of whether such opportunity to participate in such
Banking Business shall be through JVCo or through another vehicle or arrangement. (a) In the
event a Shareholder does not wish to participate with the other Shareholder in such opportunity
in the Banking Business, the participating Shareholder shall be permitted to participate in such
opportunity outside the JVCo, the Bank and its Subsidiaries. In the event each Shareholder
decides to participate in such opportunity, the Shareholders shall negotiate a shareholders
agreement in good faith based on the terms set forth in Annex 4; provided, however, that if the
Shareholders cannot agree to the terms of the shareholders’ agreement, each Shareholder shall be
permitted to participate in such opportunity outside the JVCo, the Bank and its Subsidiaries.
7.4.
Shared Services.
(a)
The Shareholders understand that the Colpatria Group and certain of its
Affiliates and the Bank and its Subsidiaries have entered into the Shared Services Agreement
pursuant to which the Colpatria Group and its Affiliates share certain business functions (the
“Shared Services”), which are listed on Schedule 7.4. The Shared Services shall continue to be
rendered pursuant to the terms of the Shared Services Agreement until the Colpatria Group Owns
less than 20% of the Bank Shares (the “Shared Services Term”), unless terminated prior to such
time in accordance with the terms of the Shared Services Agreement or this Section 7.4.
(b)
On or after the eighteen month anniversary of the Tranche A Closing Date
(such eighteen month period, the “Transition Period”), the Investor Group shall have the right,
but not the obligation, to cause the Bank to conduct a Competitive Bidding Process (as such term
is defined in the Shared Services Agreement) for any or all of the Shared Services.
(c)
With respect to the Shared Services that are provided by third parties that
are not Affiliates of the Colpatria Group (the “Outsourced Services”), after the Transition Period,
the Shareholders shall cause the Bank to choose the best provider available based on product
specifications, service levels and financial terms. If the Bank decides to change service providers
with respect to any Outsourced Service, the Bank shall use its commercially reasonable efforts to
provide the Colpatria Group and their Affiliates that currently share such Outsourced Service the
opportunity to participate in the arrangements with such third party provider to receive
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Outsourced Services from the new provider on the same terms and conditions as the Bank,
provided, however, that the Bank may change service providers for any such Outsourced Service
regardless of whether the Colpatria Group or any of its Affiliates decides to participate in any
such arrangements. The members of the Board of JVCo appointed pursuant to Section 3.1(b) by
the Investor Group shall have the sole authority to determine the best provider available.
(d)
With respect to the Shared Services that are provided by the Bank, the
Colpatria Group or their Affiliates (the “In-House Services”), after the Transition Period the
Shareholders shall cause the Bank to choose the best means of conducting such In-House
Services and shall use third party providers for such In-House Services to the extent that a third
party could provide product specifications, service levels and financial terms would be better for
the Bank. The Colpatria Group shall have the right to participate in any Competitive Bidding
Process for the provision of any Shared Service currently provided by the Colpatria Group or its
Affiliates and to submit a bid to continue to provide such Shared Services to the Bank. Upon the
completion of any Competitive Bidding Process, the Colpatria Group and its Affiliates shall have
the right to match (“Subsequent Bid”) any other bid (“Competitor Bid”) received by the Board of
the Bank, provided that the product specifications, service levels and financial terms of such
Subsequent Bid be on terms at least as or more favorable than the terms of the Competitor Bid.
If the Bank decides to outsource any In-House Services, such services shall be deemed
Outsourced Services and the Bank shall use its commercially reasonable efforts to provide the
Colpatria Group Members and their Affiliates that currently share such Shared Services the
opportunity to participate in the arrangements with such third party provider to receive Shared
Services from the new provider on the same terms and conditions as the Bank. The members of
the Board of JVCo appointed pursuant to Section 3.1(b) by the Investor Group shall have the
sole authority to determine the best provider available.
(e)
Notwithstanding the terms set forth in Section 7.4(d) above, upon the
exercise by the Colpatria Group of Put Option C, the right of the Colpatria Group to submit a
Subsequent Bid pursuant to a Competitive Bidding Process shall terminate.
(f)
The Shareholders agree that, except as set forth in Section 7.5 below, any
Contractual Obligation/Right relating to the rendering of services by Shareholders or their
Affiliates to JVCo, the Bank or any Subsidiary of the Bank or by JVCo, the Bank or any
Subsidiaries of the Bank to the Shareholders or their Affiliates (including the Shared Services)
shall be rendered on an “at cost” basis, consistent with past practice and at comparable services
levels in accordance with the terms of the Shared Services Agreement.
(g)
The Colpatria Group shall afford to the officers, employees and authorized
representatives of the Bank and JVCo (including their independent public accountants and
attorneys) full and complete access during normal business hours to the offices, properties,
employees and business and financial books and records relating to the Shared Services to the
extent reasonably requested by the Bank or JVCo and shall furnish to the Bank or JVCo or their
officers, employees and authorized representatives such additional information concerning the
Shared Services (including financial and operating data) as shall be reasonably requested,
including all such information as shall be reasonably necessary to enable the Bank or JVCo or
their officers, employees and authorized representatives to verify the proper allocation of cost
regarding the Shared Services, and to verify that the terms and conditions set forth herein in
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respect of the Shared Services and the Shared Services Agreement have been satisfied. Such
investigation shall be conducted in such a manner as not to unreasonably interfere with the
operations of the Colpatria Group.
(h)
The Shareholders shall cause the Bank and its Subsidiaries to afford to the
officers, employees and authorized representatives of the Colpatria Group (including their
independent public accountants and attorneys) full and complete access during normal business
hours to the offices, properties, employees and business and financial books and records relating
to the Shared Services to the extent reasonably requested by the Colpatria Group and shall cause
the Bank and its Subsidiaries to furnish to the Colpatria Group or their officers, employees and
authorized representatives such additional information concerning the Shared Services (including
financial and operating data) as shall be reasonably requested, including all such information as
shall be reasonably necessary to enable the Colpatria Group or their officers, employees and
authorized representatives to verify the proper allocation of cost regarding the Shared Services,
and to verify that the terms and conditions set forth herein in respect of the Shared Services and
the Shared Services Agreement have been satisfied. Such investigation shall be conducted in
such a manner as not to unreasonably interfere with the operations of the Bank and its
Subsidiaries.
7.5.
Insurance Services.
(a)
The Investor Group understands that Seguros and Seguros Colpatria
provide, on an exclusive basis, certain insurance services to the Bank and its Subsidiaries (the
“Insurance Services”). The Bank, Seguros and Seguros Colpatria shall enter into the Insurance
Program Agreement, attached hereto as Exhibit D pursuant to which the Bank and its
Subsidiaries shall continue to obtain such Insurance Services from Seguros and Seguros
Colpatria on an exclusive basis until the twenty-four month anniversary of the Tranche A
Closing Date (as such term is defined in the Stock Purchase Agreement) (the “Initial Insurance
Term”).
(b)
On or prior to the eighteen month anniversary of the Tranche A Closing
Date, the Investor Group shall have the right, but not the obligation, to cause the Bank to conduct
a competitive bidding process for each of the Insurance Services provided during the Initial
Insurance Term. Seguros and Seguros Colpatria shall have the opportunity as part of the
competitive process to submit a bid to continue to provide such Insurance Services to the Bank.
Upon the completion of the competitive bidding process, the Colpatria Group and its Affiliates
shall have the right to match (“Subsequent Bid”) any other bid (“Competitor Bid”) received by
the Board of JVCo for all or a portion of the Insurance Services received by the Bank (unless
prohibited by Applicable Law), provided that the product specifications, service levels and
financial terms of such Subsequent Bid be on terms, individually or in the aggregate, at least as
or more favorable than the terms of the Competitor Bid. The members of the Board of the JVCo
appointed pursuant to Section 3.1(b) by the Investor Group shall have the sole authority to
determine the best provider available, provided that the Investor Group shall not accept any
Competitor Bid where the Bank obtains more than 70% of the net profits generated from the
Insurance Services.
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(c)
In the event that the Investor Group chooses not to conduct a competitive
bidding process, the Insurance Program Agreement will be automatically renewed for five years
with such amendments and modifications as shall be agreed upon by the Bank, Seguros and
Seguros Colpatria.
(d)
The Shareholders agree that if the Bank decides not to renew the Insurance
Program Agreement after the Initial Insurance Term, the Bank shall pay Seguros and Seguros
Colpatria a termination fee equal to one million Dollars (US$1,000,000) in the aggregate (the
“Insurance Break-up Fee”).
(e)
Notwithstanding the terms set forth in (b) above, upon the exercise by the
Colpatria Group of Put Option C, the right of the Colpatria Group to submit a Subsequent Bid
pursuant to a Competitive Bidding Process shall terminate.
(f)
The Shareholders agree that any Insurance Services shall be rendered in
accordance with the Insurance Services Agreement.
7.6.
Special Projects. The Investor Group understands that the Colpatria Group,
certain of its Affiliates and the Bank have initiated certain projects (the “Special Projects”) in
which the Bank is involved and which are listed on Schedule 7.6. The Investor Group agrees
that the Bank may continue to implement the Special Projects in accordance with the Approved
Business Plan.
7.7.
Delisting of Bank’s Shares. Subject to Section 8.4 of the Stock Purchase
Agreement, the Shareholders agree to take all reasonable necessary steps, which steps may
include an oferta pública de adquisición by the Shareholders, to delist or cause the Bank to delist
the Bank Shares from the Bolsa de Valores de Colombia in accordance with the terms of the
Stock Purchase Agreement.
7.8.
Affiliate Transactions. Except as approved pursuant to Section 3.8, the
Shareholders shall not permit JVCo, the Bank or any Subsidiary of the Bank to make any
payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or
purchase, lease or otherwise acquire any property or assets from, or enter into or make or amend
any transaction, Contractual Obligation/Right, loan, advance or Guarantee with or for the benefit
of, any Affiliate of JVCo, the Bank or any Subsidiary of the Bank, any Shareholder or any
“Associate” of any Shareholder (within the meaning of Rule 12b-2 under the Exchange Act),
unless such transaction is on terms that are no less favorable to JVCo, the Bank or such other
Subsidiary of the Bank than those that would have been obtained in a comparable transaction by
JVCo, the Bank or such other Subsidiary of the Bank with an unrelated Person. JVCo, the Bank
and its Subsidiaries will not enter into any arrangement for the payment of management,
advisory or similar fees in connection with the management of JVCo, the Bank and any of its
Subsidiaries, or pay any such fees, to any Shareholder or any Affiliate of the Shareholders.
7.9.
Insurance for and Indemnification of Directors. The Shareholders shall cause
JVCo, the Bank and any of its Subsidiaries to indemnify each Director of JVCo and each
Director of a Sub-Board to the fullest extent permitted by applicable Law. JVCo and each of its
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Subsidiaries shall carry Directors and officers insurance covering such Directors in accordance
with standard industry practice in Colombia.
7.10. Environmental Policy. The Shareholders shall cause JVCo, the Bank and any of
its Subsidiaries to adopt and comply with the environmental compliance policies described in
Exhibit F.
7.11. Prohibited Persons. If any Shareholder determines that a Prohibited Person has
become a “beneficial owner” (as determined for purposes of Regulation 13D-G under the
Exchange Act as currently in effect) of any equity interest in Parent, or any Security in JVCo, the
Bank or its Subsidiaries, the Shareholders shall cooperate with respect to the reporting of such
matter to appropriate Governmental Authorities and use their commercially reasonable efforts to
minimize the involvement of such Prohibited Person in the operation of Parent, JVCo, the Bank
and the Subsidiaries of the Bank, to minimize any adverse legal consequences to the
Shareholders, JVCo, the Bank and its Subsidiaries and to seek to purchase the equity interests of
such Prohibited Person.
ARTICLE VIII
VALUATION PROCEDURES
8.1.
Valuation Price. Whenever required to be determined pursuant to this
Agreement, the Valuation Price (the “Valuation Price”), as of any date of determination, shall be
a price per Bank Share determined in accordance with this Article VIII.
8.2.
Valuation Notice; Valuation.
(a)
Any Shareholder desiring to obtain a determination of the Valuation Price
may give notice to this effect to the other Shareholder (a “Valuation Request”). Within thirty
(30) days from receipt of a Valuation Request, each Shareholder shall engage an Independent
Valuator who shall, within ninety (90) days from receipt of the Valuation Request, prepare and
deliver to the Shareholders a valuation opinion (a “Valuation Opinion”) stating (i) the fair market
value of the Bank as a going concern (each a “Valuation”), and (ii) the assumptions, premises
and other relevant information used in the preparation of such Valuation Opinion.
(b)
If the Valuations differ by less than 10%, then the Valuation Price shall be
equal to (i) the average of the two Valuations divided by (ii) the number of Bank Shares
outstanding, which Valuation Price shall be final and binding on the Shareholders.
(c)
If the Valuations differ by more than 10%, then the two Independent
Valuators shall, within fifteen (15) days from the date the two Valuations were delivered to the
Shareholders, choose a third Independent Valuator who shall, within sixty (60) days from being
engaged, prepare a Valuation Opinion stating the Valuation of the Bank (the “Independent
Valuation”). The Valuation Price shall be equal to (i) the average of (A) the Independent
Valuation plus (B) the Valuation closest to the Independent Valuation divided by (ii) the number
of Bank Shares outstanding, which Valuation Price shall be final and binding on the
Shareholders. If it cannot be determined which Valuation Price is closest to the Independent
Valuation, the Valuation Price shall be (i) the average of each of the two Valuations and the
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Independent Valuation divided by the number of Bank Shares outstanding, which Valuation
Price shall be final and binding on the Shareholders.
8.3.
Cooperation. The Shareholders shall cause JVCo, the Bank and any of their
respective Subsidiaries and their Directors of JVCo, Directors and officers appointed pursuant to
Sections 3.1(b) and 3.1(d) to cooperate, and cause the employees, agents, consultants and
accountants of JVCo, the Bank and any of their respective Subsidiaries to cooperate with the
Independent Valuators and to provide any such information, including confidential information,
as may be reasonably requested by such Independent Valuators in connection with the
preparation of their Valuation Opinions.
8.4.
Costs and Expenses. Each Shareholder shall bear all fees and expenses incurred
by the Independent Valuator engaged by such Shareholder and, in the event a third Independent
Valuator is required, the Investor Group and the Colpatria Group shall share equally the fees and
expenses of such third Independent Valuator.
ARTICLE IX
PARENT COVENANTS
9.1.
Pledge of Bank Shares. Concomitantly with the execution and delivery of this
Agreement, Parent and certain of its Affiliates and Investor are entering into a pledge agreement
in the form of Exhibit C pursuant to which Parent and certain of its Affiliates shall pledge to the
Investor (i) at the Tranche A Closing, all of the Bank Shares Owned by the Colpatria Group
(except for those Bank Shares owned by Seguros and Capitalizadora) that are not subject to
Liens under the loans referred to in Section 7.12 of the Stock Purchase Agreement and (ii) after
the Tranche B Closing, all Bank Shares Owned by the Colpatria Group, other than 25% of the
outstanding Bank Shares, to guarantee the Parent’s and Transferors’ (as defined in the Stock
Purchase Agreement) obligations in connection with the delivery of the Multiacciones Minority
Shares (as defined in the Stock Purchase Agreement) and consummation of the Merger (as such
term in defined in the Stock Purchase Agreement) in respect of the Tranche B Closing and
Parent’s and the Colpatria Group’s obligation to deliver the Option A Shares and the Option B
Shares to Investor in accordance and subject to the conditions set forth in this Agreement,
including the payment of the Exercise Price (the Shares pledged pursuant to subsection (i) and
(ii) above, the “Pledged Shares”). Upon Delisting of the Bank, the Shareholders shall cause the
Bank to deliver certificates evidencing the Shares to all Shareholders and the Colpatria Group
shall cause the Bank to deliver the certificates evidencing the Pledged Shares to the Investor.
The Pledge Agreement shall automatically terminate and all Liens created on the Bank Shares
owned by Parent and its Affiliates thereunder shall be released upon commencement of Period 3.
9.2.
Additional Covenants. Parent hereby covenants and agrees with the Investor
Group that, during the term of this Agreement:
(a)
Indebtedness. Parent shall not permit any of its material Indebtedness to
qualify as risk category “C” or lower under the regulations, requirements, orders, circulares and
policies of the Superintendencia Financiera de Colombia.
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(b)
Credit Standing. The Investor Group shall have the right to, and Parent
hereby expressly authorizes the Investor Group to, review the credit status of Parent before any
and all credit bureaus existing in Colombia;
(c)
Affirmative Covenants. Parent shall:
(i)
deliver to the Investor Group, (A) within sixty (60) days
from the end of the six-month period ending on June 30 of each year, its
unaudited financial statements for such six-month period; and (B) within ninety
(90) days from the end of each fiscal year, its audited financial statements for
such fiscal year;
(ii)
comply with all applicable Laws, in all material
respects;
(iii)
retain an international auditing firm of recognized
standing to review its financial statements;
(iv)
maintain insurance coverage of the type and minimum
limits as is customary in line with Parent’s past practice;
(v)
deliver to Investor, in addition to the financial
information referred in subclause (i) above, any other financial statements or other
financial information regarding its financial condition, operations or business that
the Investor Group may reasonably request;
(vi)
if any material defaults, disputes and litigation and any
adverse changes in any of the foregoing, as well as any material Tax claims
received from Tax authorities have occurred or are continuing, promptly furnish
to the Investor a certificate from an authorized officer of Parent setting forth the
actions Parent has taken or proposes to be taken to remedy such claims, and if no
such events have occurred, furnish a certificate stating the absence of such events
on a bimonthly basis for the first three years following the date hereof and on a
quarterly basis thereafter;
(vii)
promptly, but in no event later than ten (10) Business
Days, notify the Investor Group in writing if it changes its domicile or principal
place of business;
(viii)
deliver to Investor Group any information in possession
or reasonably available to Parent regarding any Board members of Parent
appointed after the date hereof that the Investor Group may reasonably request;
and
(ix)
provide the Investor Group (and its representatives)
reasonable access to the shareholder registry of Parent.
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9.3.
Directors of Parent.
(a)
On or prior to the date of this Agreement, Parent has delivered to Investor
copies of confidentiality agreements executed and delivered by the members of its Board
appointed by the Relevant Shareholders. Parent shall employ commercially reasonable efforts to
cause the members of its Board on the date hereof other than those appointed by the Relevant
Shareholders to execute confidentiality agreements reasonably acceptable to the Investor Group
to protect any Confidential Information received by such Persons pursuant to this Agreement,
which confidentiality agreements will provide that JVCo and the Bank are third-party
beneficiaries thereof.
(b)
Prior to any new Person joining the Board of Parent, Parent shall obtain an
executed confidentiality agreement in the form that has been agreed to by the Shareholders to
protect any Confidential Information received by such Person pursuant to this Agreement, which
confidentiality agreement will provide that JVCo and the Bank are third-party beneficiaries
thereof.
(c)
The Investor Group shall be entitled to cause the Bank and the JVCo to
enforce their rights as third party beneficiaries of the confidentiality agreements signed in
accordance with (b) and (c) above. The Colpatria Group agrees to vote its Shares and take such
actions as are necessary to cause the Bank and JVCo to enforce such third party beneficiary
rights.
ARTICLE X
KEY-MAN
10.1. Chairman. If, prior to the fifth (5th) anniversary of this Agreement, Shareholder
A shall cease to be the chairman of the Bank as a result of (i) death or (ii) any applicable Law
preventing Shareholder A from acting as chairman of the Bank, then:
(a)
the Investor Group shall immediately be entitled to exercise voting rights
with respect to a majority of JVCo Shares by means of (i) an irrevocable transfer by the
Colpatria Group of their voting rights on a sufficient number of JVCo Shares or (ii) by another
arrangement mutually acceptable to the Shareholders; and
(b)
the Investor Group shall have the right to appoint the officers and
Directors of JVCo and the Directors and officers of the Bank and any of its Subsidiaries pursuant
to Sections 3.1(b) or 3.1(d) as if in Period 2.
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ARTICLE XI
REPRESENTATIONS AND WARRANTIES
11.1. Representations and Warranties. Each Shareholder represents and warrants to
the other Shareholder on the date hereof that:
(a)
Power and Authority. Such Shareholder has the power and authority to
execute, deliver and perform this Agreement.
(b)
Due Authorization. The execution, delivery and performance of this
Agreement by such Shareholder have been duly and validly authorized and approved by all
necessary corporate action.
(c)
Execution and Delivery. This Agreement has been duly and validly
executed and delivered by such Shareholder and constitutes a valid and legally binding
obligation of such Shareholder enforceable against such Shareholder in accordance with its
terms.
(d)
No Conflict. The execution, delivery and performance of this Agreement
by such Shareholder does not and will not conflict with, violate the terms of or result in the
acceleration of any obligation under (i) the Charter Documents of such Shareholder; (ii) any
material Contractual Obligation/Right applicable to such Shareholder; (iii) any court order
applicable to such Shareholder or (iv) any Law applicable to such Shareholder.
(e)
Share Ownership. With respect to each Shareholder, Schedule 11.1(e)
hereto sets forth (i) the number and type of Shares Owned by such Shareholder, and (ii) the name
of each Person holding Shares that are deemed to be Owned by such Shareholder pursuant to
Section 3.6 and the number and type of Shares held by each such Person. From and after the
date hereof, each Shareholder shall promptly notify each other Shareholder of any changes to the
information contained in Schedule 11.1(e) with respect to such Shareholder.
(f)
Corporate Structure. Investor represents and warrants that (i) Investor is a
Subsidiary of GE Capital; (ii) GE Money is an operating unit of GE Capital and (iii) GE Money
Americas is an operating unit of GE Money.
ARTICLE XII
EVENTS OF DEFAULT
12.1. Material Colpatria Defaults. Upon the occurrence and continuation of any of
the following events (“Material Colpatria Defaults”), the Investor Group may exercise the
remedies set forth in Section 12.5:
(a)
a material breach of Article III (other than Section 3.10 thereof),
Article V, Article VI or Article IX (except Section 9.3 hereof) by the Colpatria Group, which
breach has not been cured within thirty (30) days after receipt of notification by the Colpatria
Group thereof; provided, however, that if such breach is not capable of cure within such thirty
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(30) day period, but is capable of cure within a ninety (90) day period, if the Colpatria Group
shall have commenced commercially reasonable efforts to cure such breach prior to the
expiration of the original thirty (30) day period it shall thereafter have until the end of such
ninety (90) day period to cure such breach;
(b)
any failure to comply with Sections 7.3 or 9.3 of this Agreement by the
Colpatria Group, which failure has not been cured within ten (10) Business Days after receipt of
notification by the Colpatria Group thereof;
(c)
a Bankruptcy Event with respect to Parent;
(d)
a Change of Control of Colpatria that has not been unwound, undone or
otherwise reversed within thirty (30) days from the Colpatria Group’s receipt of notice from the
Investor Group so that the effect of such remedial action is that such Change of Control no
longer exists;
(e)
a Sale to Prohibited Person has occurred, provided, however, that if such
Transfer involves less than 20% of the total outstanding shares of Parent, no Sale to Prohibited
Person shall be deemed to have occurred if such Transfer is unwound, undone or otherwise
reversed within fifteen (15) days from the date the Investor Representative gives notice thereof to
the Colpatria Group so that the effect of such remedial action is that such Prohibited Person no
longer Owns such shares of Parent and provided further that during such fifteen (15) day period
the Colpatria Group shall not permit the payment of dividends by Parent to such Prohibited
Person;
(f)
any of the following occurring during Period 1: (i) any material failure by
the Colpatria Group to adopt or implement, or cause JVCo, the Bank or its Subsidiaries to adopt
or implement, the Compliance Policies; or (ii) any material failure by the Colpatria Group to
take, or to cause JVCo, the Bank or its Subsidiaries to take, the measures recommended by the
Compliance Committee designed to remedy, cure or prevent, as applicable, any material
violation of Law or Compliance Policy within the timeframe the Compliance Committee deems
reasonably necessary in light of the nature and extent of the violation or potential violation of
Law or Compliance Policy (each a “Compliance Violation”); provided, however, any such
Compliance Policy or measure recommended by the Compliance Committee which is submitted
for the approval of the JVCo Board or the Board of the Bank or its Subsidiaries, as the case may
be, shall have been approved by the Investor Group or its designated Directors on the Board of
JVCo, the Bank or its Subsidiaries, as the case may be; provided, further that (x) no Material
Colpatria Default shall be deemed to have occurred until the Colpatria Group has received notice
from the Investor Group of any failure under (i) or (ii) above, and (y) the Colpatria Group shall
have had a reasonable period of time from receipt of such notice from the Investor Group to cure
any such failure, to the extent such failure is capable of being cured, which in no event shall be
greater than the cure periods provided in Section 12.1(a) above. For avoidance of doubt, a
violation that subjects the Investor Group, JVCo, the Bank or any Subsidiary of the Bank to
liability or enforcement action under the FCPA, AML Laws or OFAC Laws shall be considered
a material violation hereunder;
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(g)
any attempt by the Colpatria Group to exercise the voting rights with
respect to the Bank Shares Owned by the Colpatria Group in violation of Section 2.3 or any act
or omission of the Colpatria Group the effect or intent of which is to revoke, undermine, undo or
otherwise reverse the irrevocable appointment of JVCo as agent of the Colpatria Group to
exercise the voting rights with respect to the Bank Shares Owned by the Colpatria Group
pursuant to Section 2.3;
(h)
Shareholder A ceases to be the Chairman of the Bank for any reason other
than as a result of (i) death, (ii) any applicable Law preventing Shareholder A from acting as
Chairman of the Bank, provided, however, that if applicable Law prevents Shareholder A from
acting as Chairman of the Bank as a result of a Compliance Violation, then Section 12.1(f) shall
apply, or (iii) removal by the Investor Group;
(i)
if Shareholder A Engages within Colombia in any Banking Business other
than through JVCo, the Bank or any of its Subsidiaries (except as expressly permitted under
Section 7.3(c)) prior to the third anniversary of the earlier of (x) the termination of this
Agreement or (y) the date on which Shareholder A ceases to be (i) the beneficial owner of shares
of the Bank, (ii) a Director of the Bank or (iii) an officer of the Bank;
(j)
if Shareholder B becomes a member of the Board of Parent, and
Shareholder B Engages within Colombia in any Banking Business other than through JVCo, the
Bank or any of its Subsidiaries (except as expressly permitted under Section 7.3(c) and the
proviso in Section 7.3(a)) prior to the third anniversary of the earlier of (x) the termination of this
Agreement or (y) the date on which Shareholder B ceases to be (i) the beneficial owner of shares
of the Bank, (ii) a Director of the Bank or (iii) an officer of the Bank;
(k)
if any member of Parent’s Board (other than Shareholder A) Engages
within Colombia in any Banking Business other than through JVCo, the Bank or any of its
Subsidiaries (except as expressly permitted under Section 7.3(c) and the proviso in Section
7.3(a)), and such Director is not removed from Parent’s Board promptly, but in no event more
than thirty (30) days from the date Parent receives notice from the Investor of such breach, or if
Parent fails to take the actions permitted under applicable Law to prevent any additional
Confidential Information about JVCo, the Bank and its Subsidiaries from being delivered to such
Director;
(l)
if any Major Competitor appoints a Person to become a member of
Parent’s Board (or appoints someone for Parent’s Board), and such Director is not removed from
Parent’s Board promptly, but in any event no more than thirty (30) days from the date Parent
receives notice from the Investor that a Major Competitor is a member of its Board (or has
appointed such Person to the Parent Board), or if Parent shall fail to take the actions permitted
under applicable Law to prevent any additional Confidential Information about JVCo, the Bank
and its Subsidiaries from being delivered to such Major Competitor; or
(m)
a material breach by Parent of its obligations set forth in Section 7.12 of
the Stock Purchase Agreement within the periods specified therein.
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12.2. Other Colpatria Defaults. Upon the occurrence and continuation of any of the
following events (“Other Colpatria Defaults”), the Investor Group may exercise the remedies set
forth in Section 12.7:
(a)
a material breach of this Agreement (except Article III, V, VI, or IX or
Section 7.3) by the Colpatria Group, which breach has not been cured within thirty (30) days
after receipt of notification by the Colpatria Group thereof; provided, however, that if such
breach is not capable of cure within such thirty (30) day period, but is capable of cure within a
ninety (90) day period, if the Colpatria Group shall have commenced commercially reasonable
efforts to cure such breach prior to the expiration of the original thirty (30) day period it shall
thereafter have until the end of such ninety (90) day period to cure such breach;
(b)
if any Relevant Shareholder (other than Shareholder A and Shareholder B)
Engages within Colombia in any Banking Business other than through JVCo, the Bank or any of
its Subsidiaries (except as expressly permitted under Section 7.3(c)) prior to the third anniversary
of the earlier of (x) the termination of this Agreement or (y) the date on which such Relevant
Shareholder ceases to be a beneficial owner of shares in the Bank or Parent, or a Director or
officer of the Bank or Parent;
(c)
if Shareholder B has received any Confidential Information and has used
such Confidential Information to Engage within Colombia in any Banking Business other than
through JVCo, the Bank or any of its Subsidiaries (except as expressly permitted under
Section 7.3(c)) prior to the third anniversary of the later of the date on which Shareholder B
ceases to be a beneficial owner of shares of the Bank or Parent; or
(d)
If any Minor Competitor appoints a Person to become a member of
Parent’s Board (or appoints someone for Parent’s Board), and such Director is not removed from
Parent’s Board promptly, but in any event no more than thirty (30) days from the date Parent
receives notice from the Investor that a Minor Competitor is a member of its Board (or has
appointed such Person to the Parent Board), or if Parent shall fail to take the actions permitted
under applicable Law to prevent any additional Confidential Information about JVCo, the Bank
and its Subsidiaries from being delivered to such Minor Competitor.
12.3. Material Investor Defaults. Upon the occurrence and continuation of any of the
following events (“Material Investor Defaults”), the Colpatria Group may exercise the remedies
set forth in Section 12.6:
(a)
a material breach of Articles III (except Section 3.10), V or VI by the
Investor Group, which breach has not been cured within thirty (30) days after receipt of
notification by the Investor Group thereof; provided, however, that if such breach is not capable
of cure within such thirty (30) day period, but is capable of cure within a ninety (90) day period,
if the Investor Group shall have commenced commercially reasonable efforts to cure such breach
prior to the expiration of the original thirty (30) day period it shall thereafter have until the end of
such ninety (90) day period to cure such breach;
(b)
a failure to comply with Section 7.3 hereof by an Investor Group Member;
(c)
a Bankruptcy Event with respect to the Investor;
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(d)
a Change of Control of Investor; or
(e)
any attempt by the Investor Group to exercise the voting rights with
respect to the Bank Shares Owned by the Investor Group in violation of Section 2.3 or any act or
omission of the Investor Group the effect or intent of which is to revoke, undermine, undo or
otherwise revert the irrevocable appointment of JVCo as agent of the Investor Group to exercise
the voting rights with respect to the Bank Shares owned by the Investor Group pursuant to
Section 2.3.
12.4. Other Investor Defaults. Upon the occurrence and continuation of a material
breach of this Agreement (other than Section 7.3 or Article III, V or VI) by the Investor Group
(“Other Investor Defaults”), and which breach has not been cured within thirty (30) days after
receipt of notification by the Colpatria Group thereof; provided, however, that if such breach is
not capable of cure within such thirty (30) day period, but is capable of cure within a ninety (90)
day period, if the Investor Group shall have commenced commercially reasonable efforts to cure
such breach prior to the expiration of the original thirty (30) day period it shall thereafter have
until the end of such ninety (90) day period to cure such breach, the Colpatria Group may
exercise the remedies set forth in Section 12.8.
12.5. Investor Group Material Default Remedies. Notwithstanding the exercise of
any Call Option or Put Option, upon the occurrence and during the continuance of a Material
Colpatria Default, the Investor Group may exercise the following remedies (in addition to any
other remedy available under this Agreement or by Law) by delivery of a written notice to the
Colpatria Representative of its election to exercise such remedy with respect to such particular
Material Colpatria Default within sixty (60) days from the later of (i) the date the Investor Group
delivers to, or receives from, the Colpatria Group notice of the occurrence of such Material
Colpatria Default and (ii) the expiration of any applicable cure period for any such Material
Colpatria Default (the “Material Colpatria Default Period”):
(a)
the Put Option B shall be terminated and shall no longer be available to
the Colpatria Group; provided, however, that in the event, and during the course, of a
Bankruptcy Event with respect to a Colpatria Group Member, each of the Put Options shall be
exercisable during the relevant Call/Put Option Period if the Colpatria Group provides the
Investor Group with (i) a final, nonappealable order of a court of competent jurisdiction, issued
after compliance with all notice obligations and time periods, permitting the Transfer of the
Shares on the terms set forth in this Agreement and specifying that in no event shall such a
Transfer be voidable as a fraudulent conveyance or for any other similar reason, (ii) a legal
opinion, in form and substance acceptable to the Investor Group and issued by a reputable law
firm practicing in the applicable jurisdiction and acceptable to the Investor Group, providing
that, as a result of the order of such court of competent jurisdiction that in no event shall such a
transfer be voidable as a fraudulent conveyance or for any other similar reason and (iii) such
other assurances as the Investor Group may reasonably request;
(b)
the Investor Group shall have the right (for the purposes of this
Section 12.5, the “Default Call Right”), but not the obligation, at any single time during the
related Material Colpatria Default Period (it being understood that the exercise by the Investor of
the Default Call Right shall not limit the Investor’s right to exercise any Call Option available
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pursuant to Article VI), to (i) accelerate the purchase of the Option A and/or Option B Shares
then Owned by the Colpatria Group and/or (ii) purchase the Option C Shares on the terms and in
accordance with the procedures applicable to Option C as set forth in Sections 6.4(b) – (i). It is
understood that exercise of the Default Call Right is not limited to the option periods set forth in
Section 6.1 and that the purchase the Option C Shares from the Colpatria Group shall be at the
applicable Exercise Price set forth in Section 6.3(c);
(c)
(i) the Colpatria Group shall not have the right to appoint any officer or
employee of JVCo, the Bank or any Subsidiary of the Bank and the Investor Group shall have
the right to appoint such officers and employees instead and (ii) the number of Directors of JVCo
and Directors to be designated by the Colpatria Group at JVCo, the Bank and its Subsidiaries
shall be reduced (or, if necessary, the number of Directors and Directors designated by the
Investor Group increased) so that a majority of the Board of JVCo, of the Bank’s Sub-Board and
of the Sub-Board of the Subsidiaries of the Bank is comprised of designees of the Investor Group
rather than comprised of designees of the Colpatria Group; provided, however, that the remedy
in this subsection (c) is only available to the Investor Group if the Investor Group either (x)
Owns more than fifty percent of the Bank Shares or (y) delivers a Default Call Notice in
accordance with Section 12.5(b) or (z) offers to buy from the Colpatria Group the amount of
Bank Shares necessary for the Investor Group to Own more than fifty percent (50%) of the Bank
Shares at a price per share equal to the Exercise Price for the Option A Shares; or
(d)
so long as the Investor Group Owns more than 50% of the Shares, the
actions set forth in Section 3.8(a) (other than those listed in Section 3.8(a)(xii)) may be taken by
JVCo, the Bank and any of its Subsidiaries without the consent of the Colpatria Group.
12.6. Colpatria Group Material Default Remedies. Notwithstanding the exercise of
any Call Option or Put Option, upon the occurrence and during the continuance of a Material
Investor Default, the Colpatria Group may exercise the following remedies (in addition to any
Investor Representative of its election to exercise such remedy with respect to such particular
Material Investor Default within sixty (60) days from the later of (i) the date the Colpatria Group
delivers to, or receives from, the Investor Group notice of the occurrence of such Material
Investor Default and (ii) the expiration of any applicable cure period for any such Material
Investor Default (the “Material Investor Default Period”):
(a)
the Call Option B shall be terminated and shall no longer be available to
the Investor Group; provided that in the event, and during the course, of a Bankruptcy Event with
respect to an Investor Group Member, the Call Option B shall be exercisable during the Call/Put
Option B Exercise Period if the Investor Group provides the Colpatria Group with (i) a final,
nonappealable order of a court of competent jurisdiction, issued after compliance with all notice
obligations and time periods, permitting the Transfer of the Shares on the terms set forth in this
Agreement and specifying that in no event shall such a Transfer be voidable as a fraudulent
conveyance or for any other similar reason, (ii) a legal opinion, in form and substance acceptable
to the Colpatria Group and issued by a reputable law firm practicing in the applicable jurisdiction
and acceptable to the Colpatria Group, providing that, as a result of the order of such court of
competent jurisdiction that in no event shall such a transfer be voidable as a fraudulent
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conveyance or for any other similar reason and (iii) such other assurances as the Colpatria Group
may reasonably request;
(b)
the Colpatria Group shall have the right (for the purposes of this
Section 12.6, the “Default Put Right”), but not the obligation, to sell to the Investor Group, at any
single time during the related Material Investor Default Period (it being understood that the
exercise by the Colpatria Group of the Default Put Right shall not limit the Colpatria Group’s
right to exercise any Put Option available pursuant to Article VI), the Option Shares, on the
terms and in accordance with the procedures set forth in Article VI with respect to the Put
Options (it being understood that exercise of the Default Put Right is not limited to the option
periods set forth in Section 6.2); or
(c)
During Period 3, so long as the Colpatria Group has issued a Put Notice
for all of its remaining Shares (with respect to the Default Put Right) and prior to the Option
Closing for such exercise of the Default Put Option, the actions set forth in Section 3.8(a) may
not be taken by JVCo, the Bank and any of its Subsidiaries without the consent of the Colpatria
Group.
12.7. Investor Group Other Default Remedies. Notwithstanding the exercise of any
Call Option or Put Option, upon the occurrence and during the continuance of any Other
Colpatria Default, the Investor Group may exercise the following remedies (in addition to any
Colpatria Representative of its election to exercise such remedy with respect to such particular
Other Colpatria Default within sixty (60) days from the later of (i) the date the Investor Group
delivers to, or receives from, the Colpatria Group notice of the occurrence of such Other
Colpatria Default and (ii) the expiration of any applicable cure period for any such Other
Colpatria Default (the “Other Colpatria Default Period”):
(a)
the Investor Group shall have the right (for the purposes of this
Section 12.7, the “Default Call Right”), but not the obligation, to purchase, at any single time
during the related Other Colpatria Default Period (it being understood that the exercise by the
Investor of the Default Call Right shall not limit the Investor’s right to exercise any Call Option
available pursuant to Article VI), from the Colpatria Group the Option A Shares, on the terms
and in accordance with the procedures set forth in Article VI with respect to the Call Options (it
being understood that exercise of the Default Call Right is not limited to the option periods set
forth in Section 6.1);
(b)
(i) the Colpatria Group shall not have the right to appoint any officer or
employee of JVCo, the Bank or any Subsidiary of the Bank and the Investor Group shall have
the right to appoint such officers and employees instead and (ii) the number of Directors of JVCo
and Directors to be designated by the Colpatria Group at JVCo, the Bank and its Subsidiaries
shall be reduced (or, if necessary, the number of Directors and Directors designated by the
Investor Group increased) so that a majority of the Board of JVCo, of the Bank’s Sub-Board and
of the Sub-Board of the other Subsidiaries of the Bank is comprised of designees of the Investor
Group rather than comprised of designees of the Colpatria Group; provided, that the remedy in
this subsection (b) is only available to the Investor Group if the Investor Group either (x) Owns
more than fifty percent of the Bank Shares, (y) delivers a Default Call Notice in accordance with
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(a), or (z) offers to buy from the Colpatria Group the amount of Bank Shares necessary for the
Investor Group to Own more than fifty percent (50%) of the Shares at a price per share equal to
the Exercise Price for the Option A Shares; or
(c)
so long as the Investor Group Owns more than 50% of the Shares, the
actions set forth in Section 3.8(a) (other than those listed in Section 3.8(a)(xii)) may be taken by
JVCo, the Bank and any of its Subsidiaries without the consent of the Colpatria Group.
12.8. Colpatria Group Other Default Remedies. Notwithstanding the exercise of any
Call Option or Put Option, upon the occurrence and during the continuance of any Other Investor
Default, the Colpatria Group may exercise the following remedies (in addition to any other
remedy available under this Agreement or by Law) by delivery of a written notice to the Investor
Representative of its election to exercise such remedy with respect to such particular Other
Investor Default within sixty (60) days from the later of (i) the date the Colpatria Group delivers
to, or receives from, the Investor Group notice of the occurrence of such Other Investor Default
and (ii) the expiration of any applicable cure period for any such Other Investor Default (the
“Other Investor Default Period”):
(a)
The Colpatria Group shall have the right (for the purposes of this
Section 12.8, the “Default Put Right”), but not the obligation, to sell, at any single time during
the related Other Investor Default Period (it being understood that the exercise by the Colpatria
Group of the Default Put Right shall not limit the Colpatria Group’s right to exercise any Put
Option available pursuant to Article VI), to the Investor Group the Option A Shares, on the terms
and in accordance with the procedures set forth in Article VI with respect to the Put Options (it
being understood that exercise of the Default Put Right is not limited to the option periods set
forth in Section 6.2); or
(b)
During Period 3, so long as the Colpatria Group has issued a Put Notice
for all of its remaining Shares (during the periods set forth in Section 6.2 and prior to the Option
Closing for such exercise of the Put Option), the actions set forth in Section 3.8(a) may not be
taken by JVCo, the Bank and any of its Subsidiaries without the consent of the Colpatria Group.
ARTICLE XIII
ARBITRATION
13.1. Submission of Disputes to Dispute Resolution Procedures. Subject to
Article IV , if applicable, and Section 13.6 hereof, any dispute, controversy or claim (a
“Dispute”) whether based on contract, tort, statute, fraud, misrepresentation or any other legal
theory between the Investor Group, on the one hand, and the Colpatria Group, on the other hand,
(each, a “Disputant” and collectively, the “Disputants”) arising from, relating to, or in connection
with this Agreement, (including without limitation any question regarding its formation,
existence, validity, termination, or the performance or breach thereof), any obligations hereunder
or the relationship of the Disputants hereunder, shall be resolved in accordance with the
procedures described in this Article XIII.
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13.2. Arbitration. Any Dispute shall be referred to and finally resolved and settled by
mandatory, international and binding arbitration administered by the American Arbitration
Association (the “AAA”), in accordance with this Article and the AAA’s International
Arbitration Rules of the International Centre for Dispute Resolution (the “Rules of Arbitration”)
in effect on the date of this Agreement, which rules are deemed to be incorporated by reference
into this Article and except as they may conflict with this Section, in which case the terms of this
Article will control. The Disputants may, by written agreement, modify the rules governing the
arbitration of any Dispute. Each Disputant is voluntarily agreeing to submit to arbitration. Each
Disputant hereby irrevocably waives its right to commence any proceedings in any court with
respect to any matter subject to arbitration under this Agreement. The arbitral tribunal shall
consist of three arbitrators, all three of whom shall be lawyers (a) admitted to practice law in the
state of New York at least five years prior to the commencement of arbitration proceedings and
(b) members in good standing of the bar of the state of New York at the time of the
commencement of arbitration proceedings. Each Disputant shall nominate one arbitrator and
deliver written notification of such nomination to the other Disputant and to the AAA within
thirty (30) days after delivery of a request for arbitration.
In the event a Disputant fails to
nominate an arbitrator or deliver notification of such nomination to the other Disputant and to the
AAA within this time period, upon request of either Disputant, such arbitrator shall instead be
appointed by the AAA within thirty (30) days of receiving such request in accordance with the
Rules of Arbitration. The two arbitrators appointed in accordance with the above provisions
shall nominate the third arbitrator and notify the Disputants and the AAA in writing of such
nomination within fifteen (15) days of their appointment. If the first two appointed arbitrators
fail to nominate a third arbitrator or notify the Disputants and the AAA of that nomination within
this time period, then, upon request of either Disputant, the third arbitrator shall be appointed by
the AAA within fifteen (15) days of receiving such request in accordance with the Rules of
Arbitration. The third arbitrator shall serve as Chairman of the arbitral tribunal. The place of
arbitration shall be New York, NY. The language of the arbitration shall be English. Any issues
concerning the location of the arbitration, the extent to which any dispute is subject to
arbitration, the applicability, interpretation, or enforceability of these procedures, including any
contention that all or part of these procedures are invalid or unenforceable, and any discovery
disputes, shall be resolved by the arbitral tribunal. No potential arbitrator may serve on the
tribunal unless he or she has agreed in writing to be bound by these procedures. The decision of
a majority of the arbitrators shall be final and binding on the Disputants and their respective
successors and assigns. The decision shall not be subject to appeal or judicial review. The
arbitral tribunal shall determine the proportions in which the Disputants shall pay the fees and
expenses of the arbitral tribunal. The Disputants hereby agree that, in addition to remedies
provided by law, the arbitral tribunal shall have the power to award equitable remedies
(including, but not limited to, specific performance), but shall not have the power to award
punitive or other exemplary damages. The prevailing Disputant in any arbitration shall be
awarded its reasonable attorneys’ fees and costs.
13.3. Choice of Law. The arbitrators shall apply the substantive law of New York
without giving effect to any choice or conflict of law provision or rule that would cause the
application of the laws of any jurisdiction other than New York.
13.4. Arbitration Procedures. In connection with the arbitration, the Disputants agree
that there shall be discovery in accordance with the Federal Rules of Civil Procedure, except as
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modified in this paragraph. Each Disputant will, upon the written request of the other Disputant,
promptly provide the other with copies of all documents on which the producing Disputant may
rely in support of or in opposition to any claim or defense and a report of any expert whom the
producing party may call as a witness in the arbitration hearing. At the request of a Disputant ,
and upon the showing of good cause, the arbitrators shall have the discretion to order production
by the other Disputant or by a third party of other documents relevant to any claim or defense.
Each Disputant will be entitled to depose a maximum of ten witnesses, plus all experts
designated to be witnesses at the arbitration. The depositions shall be held within thirty (30)
days of the making of a request and shall be limited to a maximum of six hours per deposition.
All objections are reserved for the arbitration hearing, except for objections based on privilege
and proprietary or confidential information. Additional depositions or deposition hours may be
ordered by the arbitral tribunal upon a showing of good cause. At the arbitration hearing, the
Disputants shall be permitted to present live testimony and to call any witnesses regardless of
such witnesses’ Disputant affiliation.
13.5. Confidentiality. All aspects of an arbitration shall be treated as confidential and
neither the Disputants nor the arbitrators may disclose the existence, content or results of the
arbitration, except as necessary to comply with legal or regulatory requirements. Before making
any such disclosure, the disclosing party shall give written notice to all other parties and shall
afford such parties a reasonable opportunity to protect their interests. Nothing herein restricts the
ability of a Disputant to disclose confidential information related to an arbitration to an expert
retained for purposes of that arbitration, provided such expert is informed about the restrictions
contained herein and agrees to abide by them.
13.6. Judicial Procedure. A Disputant may seek conservatory or similar interim relief
in aid of arbitration, including but not limited to a preliminary injunction or attachment in aid of
the arbitration. A request for such interim or conservatory relief by a Disputant to a court shall
not be deemed a waiver of this agreement to arbitrate. A Disputant also may seek a judgment
upon or an order for enforcement of an arbitration award. Any judicial proceedings commenced
in accordance with this paragraph shall be brought in the federal or state courts located in county
of New York in the state of New York, except for an action to collect on or enforce a judgment
issued by such court, which action may be commenced in any applicable jurisdiction. Each party
to this Agreement hereby accepts and consents to the jurisdiction of any federal or state court in
the county of New York in the state of New York for itself and in respect of its property, and
waives in respect of both itself and its property any and all defenses it may have as to such
jurisdiction including, without limitation, defenses based upon sovereign immunity, jurisdiction,
improper venue and inconvenient forum. The Disputants hereto further agree that the sending by
internationally recognized courier service with receipt acknowledged, of any process required
with respect to any judicial proceeding commenced pursuant to this paragraph shall constitute
valid and lawful service of process against them, without the necessity for service by any other
means provided by Law.
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ARTICLE XIV
MISCELLANEOUS
14.1. Termination. This Agreement shall terminate with respect to each Shareholder,
in its capacity as a Shareholder, at the time at which such Shareholder ceases to Own,
beneficially or directly, any Shares, except that such termination shall not affect (a) the rights
arising or the obligations incurred by such Shareholder under this Agreement prior to such
termination (including any liability for breach of this Agreement) and (b) the obligations arising
under Section 7.3, which shall remain in force pursuant to their terms, and Articles I, XI, XIII
and XIV, which shall survive such cessation of ownership of Shares.
14.2. Expenses. Each party shall bear all legal, accounting and other expenses incurred
by them in connection with this Agreement, any related document or any of the transactions
contemplated herein or therein.
14.3.
Notices.
(a)
All notices or other communications required or permitted hereunder shall
be in writing and shall be either (i) personally delivered, (ii) sent by Federal Express, DHL or
other similar reputable private courier, (iii) sent by telecopier (with a copy also sent by first class
mail, postage prepaid) to the party for which it is intended at the following address or telecopier
number:
If to the Colpatria Group or to the Colpatria Group Shareholder Representative, to:
Mercantil Colpatria S.A.
Carrera 7 Nro. 24-89 Piso 43
Bogotá, Colombia
Attention:
Antonio Dueñas Díaz (General Counsel)
Telecopier No.: (571) 338 63 00 – 283 71 77
If to the Investor Group or to the Investor Group Representative, to:
GE Emerald Inc.
C/o GE Money - Latin America
Sante Fe, 495 Piso 20
Col. Cruz Manca
Mexico, DF 05349 Mexico
Attention:
Edmundo Vallejo (President and Chief Executive Officer)
Telecopier No.: 52-55-3067-3459
with a copy to:
GE Money Americas
777 Long Ridge Road
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Building B
Stamford, CT 06902-1250
Attention:
Mark W. Begor (Chief Executive Officer)
Telecopier No.: (203) 585-6103
and a copy to:
GE Money Americas
777 Long Ridge Road
Building B
Stamford, CT 06902-1250
Attention:
Stephen F. Ambrose Jr. (General Counsel)
Telecopier No.: (866) 650-2224
or to such other address as such party may indicate by a notice delivered to the other parties
hereto.
(b)
Any notice or other communication sent as provided in subsection (a)
above shall be deemed to have been duly given or served (i) on the date on which personally
delivered, with receipt acknowledged, if personally delivered, (ii) two (2) Business Days after
timely delivery to Federal Express, DHL or other similar reputable private courier, if sent by
courier or (iii) upon transmission thereof by the sender and issuance by the transmitting machine
of a confirmation slip confirming that the number of pages constituting the communication have
been transmitted without error, if telecopied (subject to a copy of such communication also being
sent as provided in clause (iii) of subsection (a) (above)).
14.4. Confidentiality. Each Shareholder shall use, and shall cause its Affiliates,
employees and agents to use, its or their best efforts to maintain the confidentiality of any
Confidential Information; provided that such Shareholder may deliver or disclose Confidential
Information to (i) such Shareholder’s Affiliates, representatives, employees, advisors and
consultants who are informed of the confidentiality obligations of this Section 14.4 and such
Shareholder shall be responsible for any violation of this Section 14.4 made by any such Person,
(ii) any Governmental Authority having jurisdiction over such party to the extent required by
applicable Law or (iii) any other Person to which such delivery or disclosure may be necessary
or appropriate (A) to effect compliance with any Law applicable to such Shareholder, or (B) in
response to any subpoena or other legal process, provided that, in the cases of clauses (ii) and
(iii), the disclosing Shareholder shall provide each other Shareholder with prompt written notice
thereof so that the appropriate Shareholder(s) may seek (with the cooperation and reasonable
efforts of the disclosing Shareholder) a protective order, confidential treatment or other
appropriate remedy, and in any event shall furnish only that portion of the Confidential
Information which is reasonably necessary for the purpose at hand and shall exercise reasonable
efforts to obtain reliable assurance that confidential treatment will be accorded such Confidential
Information to the extent reasonably requested by any other Shareholder.
14.5. Injunctive Relief. Each Shareholder acknowledges that a violation of this
Agreement or a failure to perform any of the provisions of this Agreement in accordance with
69
NY\1247980.10
their specific terms may cause JVCo, the Bank and its Subsidiaries and the other Shareholders
irreparable harm which may not be adequately compensated for by money damages. Each
Shareholder therefore agrees that in the event of any actual or threatened violation of this
Agreement, JVCo, the Bank and its Subsidiaries or any nonbreaching Shareholder shall be
entitled, in addition to other remedies that it may have, to a temporary restraining order and to
preliminary and final injunctive relief or to specific performance against such Shareholder to
prevent any violations of this Agreement or failures to perform any of the provisions of this
Agreement in accordance with their specific terms, without the necessity of posting a bond. The
prevailing party in any action commenced under this Section shall also be entitled to receive
reasonable attorneys’ fees and court costs.
14.6. Partial Invalidity. Wherever possible, each provision hereof shall be interpreted
in such manner as to be effective and valid under applicable Law, but in case any one or more of
the provisions contained herein shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such provision shall be ineffective to the extent, but only to the
extent, of such invalidity, illegality or unenforceability without invalidating the remainder of
such provision or provisions or any other provisions hereof, unless such a construction would be
unreasonable. Upon such a holding, the parties shall negotiate in good faith to modify this
Agreement as to effect the original intent of the parties as closely as possible in an acceptable
manner in order that the transactions contemplated hereby by consummated as originally
contemplated to the fullest extent possible.
14.7. Successors and Assigns. The rights and obligations of the parties hereto shall
inure to the benefit of and shall be binding upon the authorized successors and permitted assigns
of each party. Neither party may assign its rights or obligations under this Agreement or
designate another Person (i) to perform all or part of its obligations under this Agreement or (ii)
to have all or part of its rights and benefits under this Agreement, in each case without the prior
written consent of the other parties hereto, except that the Investor may assign its rights or
obligations to an Affiliate in connection with a Transfer of Shares permitted pursuant to
Section 5.3(a). In the event of any assignment in accordance with the terms of this Agreement,
the assignee shall specifically assume and be bound by the provisions of this Agreement by
executing and agreeing to an assumption agreement reasonably acceptable to the other parties
hereto.
14.8. Amendment. This Agreement may be amended only by a written instrument
signed by each party to this Agreement against whom the existence of such amendment is being
asserted.
14.9. No Third Party Beneficiaries. Nothing in this Agreement shall confer any rights
upon any Person other than the parties hereto and their respective heirs, successors and permitted
assigns.
14.10. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW
YORK WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW
PROVISION OR RULE THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF
ANY JURISDICTION OTHER THAN NEW YORK.
70
NY\1247980.10
14.11. Waiver of Jury Trial. EACH SHAREHOLDER HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT. INSTEAD,
SUBJECT TO ARTICLE XIII, ANY DISPUTE RESOLVED IN COURT WILL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
14.12. Entire Agreement. This Agreement, together with the Stock Purchase
Agreement, the Acquirer Ancillary Documents (as defined in the Stock Purchase Agreement),
the Transferor Ancillary Documents (as defined in the Stock Purchase Agreement), and any
related documents referred to herein, and any other certificates, letters or documents delivered in
connection with this Agreement and which expressly state that they are an integral part hereof, is
intended by the parties hereto as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and therein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and therein. This
Agreement, together with the Stock Purchase Agreement, the Acquirer Ancillary Documents, the
Transferor Ancillary Documents and such related documents, supersedes all prior agreements
and understandings between the parties with respect to such subject matter.
14.13. Obligations Several. The obligations of the parties under this Agreement are
several and not joint, provided, however, that Parent will be jointly and severally responsible for
the obligations of the other Colpatria Group Members arising under this Agreement and each
Investor Group Member will be jointly and severally responsible for the obligations of the other
Investor Group Members from and after the date such Person becomes an Investor Group
Member.
14.14. Execution in Counterparts. This Agreement may be executed in five or more
counterparts, each of which shall be considered an original instrument, but all of which shall be
considered one and the same agreement, and shall become binding when one or more
counterparts have been signed by each of the parties hereto and delivered to each of the Colpatria
Group Representative and the Investor Group Representative.
14.15. Currency Matters.
(a)
All payments hereunder shall be made in U.S. Dollars. Each party’s
obligations hereunder to make payments in U.S. Dollars shall not be discharged or satisfied by
any tender or recovery pursuant to any judgment expressed in or converted into any currency
other than U.S. Dollars, except to the extent that such tender or recovery results in the effective
receipt by the respective party of the full amount of U.S. Dollars expressed to be payable to such
party under this Agreement.
(b)
The obligation of any party to pay in U.S. Dollars those amounts of the
sums specified to be due in U.S. Dollars under this Agreement shall not be deemed to have been
novated, discharged or satisfied by any tender of (or recovery under judgment expressed in) any
currency other than U.S. Dollars, except to the extent to which such tender (or recovery) shall
result in the effective payment of such aggregate amount in U.S. Dollars at the place where such
71
NY\1247980.10
payment is to be made and, accordingly, the amount (if any) by which any such tender (or
recovery) shall fall short of such amount shall be and remain due to such party as a separate
obligation, unaffected by judgment having been obtained (if such is the case) for any other
amounts due or in respect of this Agreement. Additionally, except to the extent otherwise
specifically provided in this Agreement, all amounts due under this Agreement shall be payable
and paid in the United States of America.
Remainder of the page intentionally left blank
72
NY\1247980.10
SCHEDULE 1.1(B)
SHAREHOLDERS’AGREEMENT
ABN AMRO BANK COLOMBIA S.A.
AMERICAN EXPRESS COMPANY
AMERICAN INTERNATIONAL GROUP
BANCO AGRARIO DE COLOMBIA S.A.
BANCO AV VILLAS
BANCO BILBAO VIZCAYA ARGENTARIA COLOMBIA S.A
BANCO BRADESCO
BANCO DAVIVIENDA S.A.
BANCO DE BOGOTA
BANCO DE COMERCIO EXTERIOR DE COLOMBIA S.A.
BANCO DE CREDITO DE COLOMBIA S.A.
BANCO DE CREDITO DEL PERU
BANCO DE OCCIDENTE S.A.
BANCO DE SABADELL S.A.
BANCO GNB SUDAMERIS S.A.
BANCO ITAU HOLDING FINANCEIRA
BANCO MERCANTIL DO BRASIL
BANCO POPULAR S.A.
BANCO SANTANDER CENTRAL HISPANO S.A.
BANCOLOMBIA S.A.
BANISTMO COLOMBIA S.A.
BANK OF AMERICA CORPORATION
BARCLAYS BANK PLC
BCSC S.A.
BNP PARIBAS GROUP
CAPITAL ONE FINANCIAL CORP.
CITIGROUP INC
COMMERZBANK
COMPAÑIA DE FINANCIAMIENTO COMERCIAL SUFINANCIAMIENTO S.A.
GMAC FINANCIERA DE COLOMBIA S.A.
GRANBANCO S.A.
HSBC HOLDINGS PLC
ING GROEP NV
INTERNACIONAL S.A.
INVERSORA PICHINCHA S.A.
JP MORGAN CHASE
LEASING BOLIVAR S.A.
LEASING COLOMBIA S.A.
LEASING DE CREDITO S.A. HELM FINANCIAL SERVICES
LEASING DEL VALLE S.A.
MITSUBISHI UFJ FINANCIAL GROUP
MIZUHO FINANCIAL GROUP
POPULAR INC
ROYAL BANK OF CANADA
ROYAL BANK OF SCOTLAND GROUP
SCOTIABANK GROUP
SERFINANSA S.A.
NY\1249078.1
02-28-2007NY1 6053857v.1
UNIBANCO HOLDINGS
NY\1249078.1
02-28-2007NY1 6053857v.1
SCHEDULE 1.1(C)
GE Economic Capital Allocation
Economic Capital is defined as the Amount of Capital that a Business Unit requires to support
the Economic Risks it faces, in particular Credit, Market and Operational Risks. The level of
capital necessary to guard against those risks is determined by the company’s desired level of
comfort (target credit rating). GE Capital target credit rating is AAA.
Economic Capital Methodology
NY\1246300.1
02-28-2007
SCHEDULE 2.4
Shareholders’ Agreement
Shareholder Representatives Representatives
[TO COME]
SCHEDULE 7.1(e)
Clawback Claims
1) Direct Action for Indemnification of Losses (Acción de Reparación Directa (Indemnización
de Perjuicios)) by the Bank, Banco AV Villas, Colmena Establecimiento Bancario y Conavi
Banco Comercial (now Bancolombia) against vs. Colombia/ Ministry of Finance and Public
Credit, Congress of the Republic of Colombia and the Colombian Central Bank, for economic
losses suffered by the plaintiffs as a result of the inconstitutionality of several provisions of the
UFAC System, currently pending before the Tribunal Administrativo de Cundinamarca, Third
Section, Subsection B
2) Direct Action for Indemnification of Losses (Acción de Reparación Directa (Indemnización
de Perjuicios)) by the Bank against Colombia/ the Ministry of Finance and Public Credit, for
losses (deterioro patrimonial) resulting from the application of provisions of Law 546 of 1.999,
currently pending before the Tribunal Administrativo de Cundinamarca, Third Section,
Subsection A.
3) Action for Annulment and Reinstatement of Rights (Acción de Nulidad y Restablecimiento del
Derecho) by the Bank against the National Tax and Customs Administration, against the
Administrative Action which revoked the "affirmative administrative silence" ("silencio
administrativo positivo") in favor of the Bank, with respect to the execution of the Tax Stability
Agreement, currently pending before the Council of State, Sala de lo Contencioso
Administrativo, Fourth Section.
SCHEDULE 7.2
I. Losses on financing receivables
Our allowance for losses on financing receivables represents our best estimate of probable losses inherent
in the portfolio. Our method of calculating estimated losses depends on the size, type and risk
characteristics of the related receivables. The underlying assumptions, estimates and assessments we use
to provide for losses are continually updated to reflect our view of current conditions.
Consumer Loan Portfolio
Our consumer loan portfolio consists of smaller balance, homogenous loans including card receivables,
installment loans, auto loans and leases and residential mortgages. We collectively evaluate each portfolio
for impairment. The allowance for losses on these receivables is established through a process that
estimates the probable losses inherent in the portfolio based upon statistical analyses of portfolio data.
These analyses include migration analysis, in which historical delinquency and credit loss experience is
applied to the current aging of the portfolio, together with other analyses that reflect current trends and
conditions. We also consider overall portfolio indicators including non-earning loans, trends in loan
volume and lending terms, credit policies and other observable environmental factors.
We write off unsecured closed-end installment loans at 120 days contractually past due and unsecured
open-ended revolving loans at 180 days contractually past due. We write down loans secured by collateral
other than real estate to the fair value of the collateral, less costs to sell, when such loans are 120 days
past due. Consumer loans secured by residential real estate (both revolving and closed-end loans) are
written down to the fair value of collateral, less costs to sell, no later than when they become 360 days
past due. Unsecured loans in bankruptcy are written off within 60 days of notification of filing by the
bankruptcy court or within contractual write-off periods, whichever occurs earlier.
Commercial Loan & Lease Portfolio
Our commercial loan and lease portfolio consists of a variety of loans and leases, including both larger
balance, non-homogenous loans and leases and smaller balance homogenous commercial and equipment
loans and leases. Losses on such loans and leases are recorded when probable and estimable. We
routinely survey our entire portfolio for potential specific credit or collection issues that might indicate an
impairment. For larger balance, non-homogenous loans and leases, this survey first considers the financial
status, payment history, collateral value, industry conditions and guarantor support related to specific
customers. Any delinquencies or bankruptcies are indications of potential impairment requiring further
assessment of collectibility. We routinely receive financial, as well as rating agency reports, on our
customers, and we elevate for further attention those customers whose operations we judge to be marginal
or deteriorating. We also elevate customers for further attention when we observe a decline in collateral
values for asset-based loans. While collateral values are not always available, when we observe such a
decline, we evaluate relevant markets to assess recovery alternatives – for example, for real estate loans,
relevant markets are local; for aircraft loans, relevant markets are global. We provide allowances based on
our evaluation of all available information, including expected future cash flows, fair value of collateral,
net of disposal costs, and the secondary market value of the financing receivables. After providing for
specific incurred losses, we then determine an allowance for losses that have been incurred in the balance
of the portfolio but cannot yet be identified to a specific loan or lease. This estimate is based on historical
and projected default rates and loss severity, and it is prepared by each respective line of business.
New Products Introduction
Experience is not available with new products; therefore, while we are developing that experience, we set
loss allowances based on our experience with the most closely analogous products in our portfolio.
NY\1246299.1
02-28-2007
II. Specific Methodologies for determining Reserves on Consumer Lending products
1. Revolving Consumer Products – methodology used is a “ Gross Roll Rate Model”. This model
uses past performance to predict the probability of debt being charged off. The model analyzes
debt rolling through each bucket each month for the past 12 months and the output of the model is
the probability of the balance in each delinquency bucket rolling to charge-off, expressed as a
percentage. The percentages are multiplied by the receivables in each bucket & totaled to
calculate the gross reserve required.
2. Closed End Consumer Products – methodology used is a “Transition Matrix”. This model
analyzes how accounts move over a given period of time for a Closed End Portfolio. The model
uses account level data to analyze the movements between the delinquency buckets and
determine the percentage that will be written off by delinquency bucket. The percentages are
multiplied by the receivables in each bucket & totaled to calculate the gross reserve required.
4. Mortgage Loans – methodology used is a “Markov Transition Matrix”. This model analyzes
how accounts move over a given period of time for a Mortgage Portfolio. The model uses account
level data to analyze the movements between the delinquency buckets and determine the
percentage that will be written off or the default probability by bucket. The percentages are
multiplied by the receivables in each bucket & totaled to calculate the gross reserve required.
5. Adjustment for Recoveries – For all our consumer products the gross reserve requirement
should be adjusted for expected recoveries on written off accounts based on historical data of
the business. Recoveries are cash which has been collected after an account has been writtenoff. In essence the gross losses are being reduced by the realizable estimate of recoveries
relating to these specific losses thereby reflecting a reserve for the anticipated net losses.
III. Specific Methodology for determining Reserves for Commercial Lending
All commercial credits are assigned a credit risk grade at the time a credit is made, and must be
updated throughout the term of the credit. The credit grading system has been established to
provide management with a tool to determine the quality of specific credits in the total credit
portfolio.
The following should be considered at the time of determining credit grade:
- Repayment Sources
Repayment sources can include cash flow, assets intended to be liquidated, collection of
receivables, seasonal reductions of working capital, equity infusion, cash held by the
borrower or guarantor, or the refinancing of the credit with another lender.
- Cash Flow Adequacy
Cash flow adequacy indicates the ability of the historic, or expected operational cash flow
(after tax profits plus non-cash charges such as depreciation) to cover all required
principal payments on term debt plus provide any funds required for working capital
growth or fixed asset acquisition.
- Financial Leverage
Financial leverage indicates the relative amount of borrowed funds (including
subordinated debt) to owners’ equity or net worth. Where subordinated debt exists, and
subordination provisions are adequate, higher leverage may be acceptable.
Commercial Credit Grading Methodology:
NY\1246299.1
02-28-2007
Satisfactory Credits (A to E rating) - Satisfactory Risk includes loans ranging from an excellent
risk to average or slightly below average in quality. The majority of a subsidiary bank’s loans,
including all new relationships, should fall within this broad category. The purpose of the credit
must be discussed thoroughly by a credit officer and the primary source of repayment should be
adequate and well defined. Although adverse conditions may develop in the future, the bank
would normally be able to collect the loan even if conditions worsen
1. A rating - Essentially risk free credit. Secured by readily marketable liquid collateral
with comfortable margins. Unsecured credit is to be of unquestionable strength.
2. B rating - Multiple “strong” sources of repayment. Debt of borrower is modest relative
to the borrower’s financial strength and ability to pay. Very strong cash flow and
relatively low leverage.
3. C rating- “Good” primary and secondary sources of repayment. Debt of the borrower is
reasonable relative to borrower’s financial strength and ability to pay. The borrower
exhibits sufficient cash flow and reasonable leverage.
4. D rating - Sufficient primary source of repayment and acceptable secondary source of
repayment. Has either:
i.
Adequate cash flow with higher than desired leverage; or
ii.
Marginal cash flow with strong capitalization and liquidity.
5. E rating - Acceptable primary source of repayment, but less than preferable secondary
source of repayment. Cash flow adequate to service debt, but minimal excess cash flow,
moderately or highly leveraged. A “satisfactory” credit exhibits manageable credit risk
with measurable sources of repayment.
Credits with Potential Problems
6. Watch List - Account where we see the possibility of future concern arising should a
certain event (or events) materialize or should a certain trend not be reversed.
7. Special Mention - A Special Mention account has potential documentation or credit
administration weaknesses that deserve management's close attention. If left uncorrected,
these potential weaknesses may result in deterioration of the repayment prospects for the
asset or in the institution's credit position at some future date.
Adversely Classified Credits
8. Substandard rating - there is well-defined weakness that could jeopardize orderly
repayment, distinct possibility that bank will incur loss if deficiencies left uncorrected
9. Doubtful - severity of problems make full collection highly unlikely, possibility of some
loss is extremely high
10. Loss - credit considered uncollectible and of such little value that maintaining the assets
on the bank’s books not warranted
Reserve Rate Methodology
The percentages to be reserved for each credit grade should be based on the historical & projected
loss experience of the portfolio and also consider historical & projected loss experience by
collateral type for Asset backed Loans.
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02-28-2007
SCHEDULE 7.3
Activities of the Colpatria Group
Capitalización
Stimulating savings, gathering capital from the general public, managing funds and investments
and managing payments on investments and savings plans through Capitalizadora Colpatria S.A.
Insurance
Providing insurance and reinsurance and acting as a professional risk manager for insurance
products and services through Seguros Colpatria S.A. and Seguros de Vida Colpatria S.A..
Brokerage
Claudia Pacheco and her husband own and participate in the management of Correval S.A.,
which performs all services related to the brokerage and dealing of securities, rendering
investment advice, purchasing and selling securities and rendering related financial services.
Construction
Constructing, selling and servicing of the commercial and residential real properties and
rendering engineering services, and promoting investment in real property, personal property and
other assets. Financing (directly, and not by an affiliated or unaffiliated third party), by the
construction company, of new or remodelled commercial and residential real properties.
Health
Rendering health services through affiliated professionals and health institutions, or otherwise at
the free election of the health services users, including prepaid services. Providing health
insurance.
Information Technology
Participating in software development activities and rendering professional advice in connection
with information services through Olimpia.
Mining
Participating in gold mining activities and gold extraction, through Mineros S.A.
Financing
Selling the foregoing goods and/or services on credit through an installment or revolving plan
offered directly by such Person (and not by an affiliated or unaffiliated third party)
2
SCHEDULE 7.4
Shared Services
Seguros Colpatria S.A., Seguros de Vida Colpatria S.A., Capitalizadora Colpatria S.A. and Salud
Colpatria S.A. (jointly, the “Investment Unit”), on the one hand, and the Bank, on the other,
share a number of services (for e.g., some vice-presidents of the Bank render services to the
Investment Unit) (the “Shared Services”). The parties keep a record of the costs accrued in the
performance of their part of the Shared Services. At the end of each year the parties determine
and allocate (i) the COP$ amount of the Shared Services rendered to each other during the
previous year and (ii) the amount in which one parties expenses exceeds the other’s. The parties
then plan the Shared Services for the following year in such a way so as to offset the differences
in the expenses paid during the prior year.
The list below shows the costs and expenses incurred in Shared Services by the Bank, the
Investment Unit and Constructora in 2006 (amounts therein are expressed in thousands of
COP$):
EXPENSES
INCURRED BY
INVESTMENT
UNIT
EXPENSES
INCURRED BY
CONSTRUCTORA
1,384,854
251,271
-
Planning
707,776
175,637
-
Market Risk
149,277
75,634
-
Integral Risk
2. Vice-presidency of
planning and control
- Contraloria
3. Financial Vicepresidency and
Treasury
Financial Vicepresidency
Treasury Vicepresidency
4. Client Defense Group
527,801
-
-
Personnel, administration and
883,413 public utilities.
542,834
247,768
-
707,161
-
-
707,161
442,320
-
264,842
-
164,787
65,879
42,162
-
EXPENSES
SHARED SERVICE
1. Vice-presidency of
Planning and
Control
5. Company
Security
INCURRED
BY BANK
TOTAL
NATURE OF SHARED SERVICES
1,636,125
Vice-president of the Colpatria
442,320 Group, secretary and managers
Vice-president of the Group and
264,842 secretary
-
230,666 Personnel and administration
Person in charge of security
rendered by Honor & Laurel to
the group and to monitor Honor
& Laurel’s invoicing to the
42,162 different business units.
EXPENSES
INCURRED BY
INVESTMENT
UNIT
EXPENSES
SHARED SERVICE
6. Security Colpatria
Building
7. Shareholders’
Security
8. Security (Honor
& Laurel)
9. IT Center
10. External
Advisory
Oscar
Marulanda
Andres
Villaquiran
11. Group's
Presidency
12. Board of
Directors
13. Illumination
Colpatria Building
14. Shareholders'
Transportation
15. Legal Services'
Office – Group
16. Financial and
Treasury Vicepresidency
Operations Backoffice
17. Olimpia
TOTAL
INCURRED
BY BANK
EXPENSES
INCURRED BY
CONSTRUCTORA
101,652
51,446
-
-
401,567
-
2,681,001
252,769
-
TOTAL
Excess in administration fee of
the Torre Colpatria Building for
(i) Emergency Operation
Committee (Comité Operativo
de Emergencia) and (ii)
additional security in the Torre
153,098 Colpatria Building.
Amount paid for familia
Pacheco’s (Shareholders’)
401,567 personal security.
2,933,770 Corporate security and offices
Depreciation by the Bank of
expenses for air conditioner and
plant and lease payments for the
73,086 IT center.
19,903
53,183
-
141,272
93,208
167,875
402,355
48,736
-
167,875
216,611 Group advisory
92,536
93,208
941,537
123,038
-
117,555
892,773
-
-
-
119,796
-
213,121
-
1,089,513
196,729
-
1,286,242
1,089,513
196,729
-
826,960
-
-
1,286,242 Treasury operations
public utilities. Olimpia’s
employee was operating from
826,960 the Bank.
9,536,410
2,067,534
398,767
185,744 Treasury advisory
111,096
1,175,671 Personnel and administration
Expenses for illumination of the
892,773 Colpatria Building
119,796 Vehicles and maintenance
12,002,711
- Current Projects
EXPENSES
INCURRED BY
INVESTMENT
UNIT
EXPENSES
INCURRED BY
CONSTRUCTORA
1,089,562
694,200
-
EXPENSES
SHARED SERVICE
INCURRED
BY BANK
1. Corporate
Human
Development
Management
2. Nuevo Milenio
Project
McKinsey &
Company Colombia
Inc.
4,442,539
1,578,928
392,783
2,962,816
-
-
Management
Information System
(SIG)
12,485
1,567,742
-
991,142
-
-
Treasury Unification
-
-
-
Human Development
25,174
-
-
322,870
-
-
128,053
5,532,101
11,186
2,273,128
392,783
Data Warehouse
(Base Única de
Clientes)
Banca Seguros
Operating Model
Project (PMO)
TOTAL
TOTAL
NATURE OF SHARED
SERVICES
Personnel and related
1,783,762 personnel
Relating to costs of the
6,414,250 projects (includes VAT)
Consultancy team of
2,962,816 McKinsey
Amount of indicators built for
each business unit, number of
registries, investment on
technology derived of the
project, participation in
1,580,227 transactions
Number of registries,
investment on technology
derived of the project,
991,142 participation in transactions
Number of workplaces, use
- of model software
Number of employees of each
Business Unit and cost of
selection for number of
employees plus remaining
25,174 costs of Human Development
Sale of insurance products
through the Bank’s branch
322,870 network.
Final proportion of the
expenses and budgeted in the
139,239 business units
8,198,012
- Others
Expenses
incurred by
Bank
Fiduciaria
Donations
229,200
Expenses
incurred by
Unidad de
Inversion
Expenses
incurred by
Constructora
-
-
TOTAL
229,200
Further details and
distribution drivers
SCHEDULE 7.6
Special Projects
- Direct Expenses and/or Current Projects
EXPENSES
INCURRED BY
INVESTMENT
UNIT
EXPENSES
SHARED SERVICE
1. Corporate Human
Development
Management
INCURRED BY
BANK
EXPENSES
INCURRED BY
CONSTRUCTORA
1,089,562
694,200
-
4,442,539
1,578,928
392,783
2,962,816
-
-
12,485
1,567,742
-
991,142
-
-
Treasury Unification
-
-
-
Human Development
25,174
-
-
Banca Seguros
322,870
-
-
Operating Model Project
(PMO)
128,053
11,186
-
2. Nuevo Milenio
Project
McKinsey & Company
Colombia Inc.
Management
Information System
(SIG)
Data Warehouse (Base
Única de Clientes)
3. Olimpia
TOTAL
826,960
-
-
6,359,081
2,273,128
392,783
TOTAL
1,783,762
Personnel and related personnel
Relating to costs of the projects
6,414,250 (includes VAT)
2,962,816 Consultancy team of Mckinsey
Amount of indicators built for
each business unit, number of
registries, investment on
technology derived of the project,
1,580,227 participation in transactions
Number of registries, investment
on technology derived of the
project, participation in
991,142 transactions
Number of workplaces,
- utilization of model software
Number of employees of each
Business Unit and cost of
selection for number of
25,174 employees
Sale of insurance products
through the Bank’s branch
322,870 network.
Final proportion of the expenses
139,239 and budged in the business units
public utilities. Olimpia’s
employee was operating from the
826,960 Bank.
9,024,972
- Others
Expenses
incurred by
Bank
Fiduciaria Donations
229,200
Expenses
incurred by
Unidad de
Inversion
Expenses
incurred by
Constructora
-
TOTAL
-
3
229,200
Further details and
distribution drivers
SCHEDULE 11.1(e)
11.1(e)(i)
- Owned Bank Shares
OWNER
Investor Group
Colpatria Group
NUMBER OF BANK SHARES
5,977,671,541
26,404,608,046
PERCENTAGE OF TOTAL
BANK SHARES
16.4855%
72.8195%
- Owned JVCo Shares
OWNER
Investor Group
Colpatria Group
NUMBER OF JVCo SHARES
5,977,671,541
26,404,608,046
PERCENTAGE OF TOTAL
JVCo SHARES
18.4597%
81.5403%
11.1(e)(ii)
- Owned Bank Shares
OWNER
International Yorkshire Limited
Mayaro Limited
Multiacciones S.A.
Seguros de Vida Colpatria S.A.
Constructora Colpatria S.A.
Salud Colpatria S.A.
Capitalizadora Colpatria S.A.
NUMBER OF BANK SHARES
3,034,976,846
2,942,694,695
15, 643,845,638
8,270,946,460
1,737,361,011
422,863,928
222,238,448
107,352,561
PERCENTAGE OF TOTAL
BANK SHARES
8.3700%
8.1155%
43.1433%
22.8100%
4.7914%
1.1662%
0.6129%
0.2961%
- Owned JVCo Shares
OWNER
GE Emerald Inc.
Multiacciones S.A.
NUMBER OF JVCo SHARES
5,977,671,541
15,643,845,638
8,270,946,460
PERCENTAGE OF TOTAL
JVCo SHARES
18.4597%
48.3099%
25.5416%
Seguros de Vida Colpatria S.A.
Constructora Colpatria S.A.
Salud Colpatria S.A.
Capitalizadora Colpatria S.A.
1,737,361,011
422,863,928
222,238,448
107,352,561
5.3652%
1.3058%
0.6863%
0.3315%
SCOPE AND BASIS OF THE 2-28-07
US GAAP PROFIT AND LOSS CONVERSION
Scope and basis of the 2-28-07 US GAAP Profit and loss Conversion
Scope Determination: 18 topics, consisting of 10 financial statement accounts have been selected
as significant different topics. The Bank compared the differences in Colombian and us GAAP and
determined that these could have significant differences.
The scope is as follows:
Investment
1.1.1 Investments classification and valuation
1.12 Transfers between categories
1.1.3 Other than temporary impairments
2.1.1 Accounting for Equity Securities
2.1.2 Deferred discounts on sale of investments
Derivatives
2.2.1 Mark to market Adjustments
1.2.1 Embedded derivatives
Loans
2.3.1 - Loan Loss provision
2.3.2 - Non-accrual of interest – Adjustment on his work plan Jose Cruzado 2.3.3 Oreos
2.3.4 - Origination Fees
2.3.5 - Restructured Loans
2.3.6 Securitization
2.4.1 Deferred Tax and current tax provision
2.4.2 Fee Income
2.4.3 Deferred Charges on Software
2.4.4 Guarantees
2.4.5 Accruals
1
ACCOUNTS THAT WERE NOT SUBJECT TO CONVERSION
An Individual evaluation was performed on whether the selected accounts required USGAAP
conversion. The following accounts did not require conversion either because they presented no
movement during the period, or no differences between the Colombian GAAP and USGAAP rose.
1.1
INVESTMENT
1.1.1 CLASSIFICATION
a. Key differences and
background:
June 4th 2007

Both USGAAP and Colombian GAAP classify investments into:
Trading, Available for Sale (AFS) and Held to Maturity (HTM).

There would be no impact, as classification and valuation rules
are similar under U.S. GAAP. Unrealized gain or losses are
recorded as follows: Trading – in earning, AFS – in OCI, HTM
1
– no unrealized gain or loss.
b. Result of conversion:
For the month of February 2007, there were no HTM securities
subject to mark to market and therefore there is no resulting
conversion entries
c. Adjustments:
Since No differences in Classification were found, no adjustments
were made.
1.1.2 TRANSFERS BETWEEN CATEGORIES
background:

Colombian GAAP rules allow transfers between categories and
do not specify treatment for unrealized gain and losses on
transfers
FAS 115 establish rules for unrealized gain and loss
recognition in case of transfers between categories.
For the month of February 2007, there were no HTM securities
subject to mark to market and there fore there is no resulting
conversion entries
c. Adjustments:
Since No transfers between categories were performed on the
month of February, no adjustments were made.
1.1.3 OTHER THAN TEMPORARY IMPAIRMENTS
background:

Under Colombian GAAP, other than temporary impairment on
investments are recorded based on the qualification under five
categories, with specific percentages applied. Criteria relate
more to credit risk impairment.
According to FAS 115, other than temporary decline in FV is
recognized in earnings. Subsequent increases or decreases of
AFS securities affect OCI. EITF 03-1 specifies the “Meaning of
Other-Than-Temporary Impairment and Its Application to
Certain Investments”
For the month of February 2007, No other-than-temporary was
impairment identified.
c. Adjustments:
Since Other than temporary impairments were found on the month
of February, no adjustments were made.
.
June 4th 2007
2
1.2
DERIVATIVES
1.2.1 EMBEDDED DERIVATIVES
background:

d. Adjustments:
2
Under Colombian GAAP and local approach, embedded
derivatives are not identified and recorded.
Under USGAAP FAS 133 applies for embedded derivatives.
Embedded derivatives are separated from the host contract
and accounted for separately as a derivative instrument.
Based on the review of contracts by:
o Review of the Banks contracts – Legal –
o Review of contracts with Clients – Commercial For the month of February 2007, No embedded derivative
have been identified.
Dado que no se encontraron derivados implícitos, no se realizó
ningún ajuste.
ACCOUNTS THAT WERE SUBJECT TO CONVERSION
According to the Individual evaluation was performed on whether the selected accounts required
USGAAP conversion. The following accounts require conversion. Basis of conversion and
methodology used are as follow:
2.1
INVESTMENT
2.1.1 ACCOUNTING FOR EQUITY SECURITIES
background:

Partial Mark to Market under Colombian GAAP
APB 18 applies for Equity method of accounting for common
stocks. Per ABP 18, an investor recognizes its share of the
earnings or losses of an investee in its financial statements.
•
For the month of February 2007, AFS investments are
recorded to cost basis by reversing all revaluation adjustments.
2.1.2 DEFERRED DISCOUNT ON SALE OF INVESTMENT
background:
June 4th 2007

Under Colombian GAAP, in 2002, the superintendent allowed
the banks to defer certain discounts to be deferred for the
3

2.2

outstanding term of the investment.
Under US GAAP, such discount is not recognized and not to
be deferred and amortized.
As of 2-28-07, there was $12.128 million pesos in such
account. Rather than reversing the monthly amortization for
the month of February in the amount of $774 million pesos,
since it is not allowed under us GAAP, the bank is reversing
the entire remaining balance of $$12.128 million pesos.
DERIVATIVES
2.2.1 MARK TO MARKET ADJUSTMENTS
background:

2.3
Under Colombian GAAP, derivatives are marked to market
depending on the type of instruments. Financial institutions
need to develop valuation models and obtain approval from
Superintendency.
FAS 133, 138 and 149 application. Derivatives are mark-tomarket in general.
The difference on FX forward valuation as of February 28, 2007 is
recorded.
Methodology – Annex 1
LOAN
2.3.1 LOAN LOSS PROVISION
background:

GE loan loss provision methodology will be used.

This includes “loans” brought on the balance sheet from
securitization and also restructured loans.
Jose Cruzado and Rick Buckley from GE approved the
numbers. Revised by William Cardona for Auto Reserves
GE Methodology (%) was applied to Colpatria balances.
Annex 2
Annex 2A Reserve & Write – off Methodology

2.3.2 NON-ACCRUAL OF INTEREST
June 4th 2007

Under Colombian Law Non accruing interest works at different
4
background:

periods depending on the type of loan (30, 60, 90 days).
Under US GAAP, generally interest stops accruing after 90
days.
Under Local Law, mortgage loans stop interest accrual at 30
and 60 days.
For the month of February 2007, accrue for interest on loans
with stop accrual before 90 days.
Add reserve for accrued interest consistent with section 2.3.1
2.3.3 OREO
background:

Under us GAAP, Oreos are recorded at lower of cost or fair
value minus the cost of selling.
Under Colombian GAAP, Oreos are reserved based on yrs
they have been in OREO status. Under Colombian practice,
Oreos are appraised every 3 year and therefore, latest
appraisal was not available to perform such exercise.
Since under Colombian practice does not require an updated
appraisal for Oreos, every year (They are done every three
years instead). Bank has estimated a fair value - Expected
loss calculation is performed taking into account of aging and
sale history of such OREO properties.
Bank grouped all Oreos from the bank, subsidiaries and TECH
Securitization.
Bank stratified the Oreos in the following manner:
o Only More than 4 years – Full Provision (Expected
Loss) - Legal Problems
o Less Than 4 years but with legal problems
o Commercial value lower than the appraised value.
o Remaining Oreos provisions were reversed.
Obtain desk-top appraisals for missing years and calculated
the amount of write-down needed. Also took the cost of selling
into consideration.
The amount determined this way is considered a fair value of
the OREO according to historic trends.
2.3.4 ORIGINATION FEES
background:

June 4th 2007
Colombian Financial Entities GAAP does not require the
deferral of loan origination fees and costs.
Application of FAS 91. FAS 91 requires that loan origination
fees, costs and premium/discount associated with purchases
of loan should be deferred and amortized. Also, this policy
needs to adhere to GE’s policy
5

c. Methodology for conversion
used.

Applicable originations costs per product were identified. Some
drivers had to be used in order to allocate correctly.
Product life was calculated, but specifically for:
Origination cost of the month of February is deferred on the
term of each product type.
o Straight line:
Credit Card 12 months.
Mortgages 10 years.
Further analysis is needed.
Credit Cards/Revolving loans were amortized on straight line
basis.
Closed-end loans & Mortgages: require a model to be
developed to determine curve to apply the interest method
Annex 3
2.3.5 RESTRUCTURED LOANS
background:

Colombian Financial Entities have a Specific rule for credit risk
evaluation and provisioning.
FAS 114
FAS 114 requires that DCF of future P&L to be discounted by the
original loan rate – the result should be compared to the reserve
obtained in 2.3.1 and the difference should be booked
2.3.6 SECURITIZATION
background:

June 4th 2007
Colombian Financial Entities have Specific rules governed the
accounting treatment of securitization. (CE 096 of 1996).
FAS 140 and FIN 46R applicable.
The whole TECH securitization was consolidated as of feb-07,
as it was determined to be FIN 46 primary beneficiary
The Loans sold by the bank to Titularizadora Colombiana in
the E-1, E-5, E-6, E-7 and E-8, securitizations, were brought
back to balance sheet as they do not meet the definitions of
FAS 140 sale. Loans were recorded and related borrowings
were recorded.
The amounts registered as HTM and subordinated bonds were
eliminated against the bonds issued which were considered as
their natural counterpart.
The retained interest and related provisions on securitization
were eliminated.
The loan and bonds issued interest accrued during the month
of February were calculated.
6
2.4
OTHER
2.4.1 DEFERRED TAX AND CURRENT TAX PROVISION
background:

In accordance with the instructions of the Colombia
Superintendence of Financial Entities, deferred tax is not
recorded.
FAS 109 requires that a Company recognize a) the amount of
taxes payable or refundable for the current year as current tax
asset or liability and (b) deferred tax liabilities and assets for
the future tax consequences of events that have been
recognized in an enterprise's financial statements or tax
returns. FIN 48 prescribes a recognition threshold and
measurement attribute for the financial statement recognition
and measurement of a tax position taken or expected to be
taken in a tax return.

Since USGAPP balance Sheet was not
hypothetical deferred adjustment was made.

In accordance with the instructions of the Colombia
Superintendence of Financial Entities, Fee income is
recognized on Cash basis.
Accrual basis. Income is recognized when realized and
earned.
available,
a
2.4.2 FEE INCOME
background:

For the month of February 2007 and on, Monthly income of Credit
Card Usage Fee is deferred on three months and Debit Card
Monthly Usage Fee is deferred 50% current Month and 50%
following month.
2.4.3 DEFERRED CHARGES ON SOFTWARE
background:

For the month of February 2007, Only software deferred charges
continue to be deferred.
Minimum threshold $400,000
Annex 4 GE Policy
June 4th 2007
Under Colombian law other items are allowed to be deferred.
GE deferral policy.
7
2.4.4 GUARANTEES
background:

Guarantees under Colombian Financial Entities GAAP are
accounted for on off-balance sheet accounts...
FIN 45 applicable
For the month of February 2007, Initial recognition of guarantees
issued in this month will be recorded assuming all are standby
letters of credit
2.4.5 ACCRUALS
background:

Under Colombian Financial Entities GAAP there are accruals.
FAS 5 – Contingencies

Amounts accounted on PUC 2895 expense provisions made
over which the bank had already received the service and had
not been provisioned by the service provider. These expenses
were conciliated with the respective payments on the following
month, since they were adequately adjusted to the policy of
expense accrual and to the contracts and work orders.
The amounts that were over accrued were reversed.
A $12.200 million pesos provision made for contingency was
reversed. This provision was intended to cover operational risk
contingencies o catastrophic events; however, as there is no
basis on calculation of such amounts and therefore,
unjustifiable, the remaining balance was reversed, it does not
adjust to USGAAP policies.

June 4th 2007
8
ANNEX 1
DERIVATE VALUATION – FX FORWARD
The variance in the financial statements is the difference between the valuation done with the
Market Risk Area’s internal model and the accounting valuation performed with Financial
Superintendence Methodology.
Internal Model uses the “Implicit Forward Curve ” methodology, and the Superintendence
methodology only demands the use of valuation rates applicable to low risk investment (Bank
Deposit Rate for a specific term) which does not acknowledge the forward operation rate in the
market which derive from the implicit yield curve.
Valuation of FX (COP-USD) forwards is performed as follows:
1.1
Mark to market MTM
Mark-to-Market MTM: Consists of calculating the present value of the cash flows of the financial
instrument at the current market rates.
For FX (COP-USD) operations, the last hour of negotiation Bid / Offer values appearing in SET FX
of the Colombia Stock Exchange is taken.
1.2
Implicit Forward Curve Construction
Forward risk is one in which affects the “forward portfolio” not only for variances in the value of the
underlying asset but also the domestic and foreign rates associated to this asset. This is why an
implicit forward curve is built (COP denominated), tanking into account forward points published in
Reuters.
Variable
Procedure
COP Curve (Implicit)
COP curve is calculated according to the terms in the (USD Yield Curve)
plus the average between Bid / Ask forward points for each of the terms
predetermined.
X days calculation
(Interpolation)
June 4th 2007
Interpolation is performed by the Lagrange Method. Points for each term
(days) are calculated upon 4 Other Points, either from the USD curve o
the COP curve (Implicit). For terms lower than seven days, the seven day
rate is used. For terms from 8 to 14 days, the 7, 14, 30 and 60 day rates
are used. For terms greater than 15 days the closest earlier available 2
9
rates and the next available 2 rates. Theory for the interpolation method
can be found in:
http://mathworld.wolfram.com/LagrangeInterpolatingPolynomial.html
1.3
Foreign Exchange Rates
The rates used are Libor for operations up to one year and Libor Swap Rate for operation greater
than one year, source Bloomberg.
Variable
Procedure
USD RATE
Libor for operations up to one year and Libor Swap Rate for operation
greater than one year, for each of the terms predetermined.
X days calculation
(Interpolation)
1.4
Interpolation is performed by the Lagrange Method. Points for each term
(days) are calculated upon 4 Other Points, either from the USD curve o
the COP curve (Implicit). For terms lower than seven days, the seven day
rate is used. For terms from 8 to 14 days, the 7, 14, 30 and 60 day rates
are used. For terms greater than 15 days the closest earlier available 2
rates and the next available 2 rates. Theory for the interpolation method
can be found in:
http://mathworld.wolfram.com/LagrangeInterpolatingPolynomial.html
Valuation
The Valuation consists of building cero coupon curves in order to calculate the present value of all
the cash flows.
Variable
Procedure
MTM Rate
MTM rate corresponding to COP-USD
COP Rate
COP rates are obtained according to (1.2) and interpolated to the term of
the operation.
USD Rate
USD rates are obtained according to (1.3) and interpolated to the term of
the operation.
June 4th 2007
10
Principal
Nominal Value of the forward operation in its currency.
Principal COP
Principal COP = Principal * Exchange rate negotiated
FW Rate
Calculated taking into account the foreign and domestic rates for the term
of each operation.
PV
= MTM Rate *((1+COP Rate)^(Days /365))/(1+USD Rate*Days/360)
Present value of each operation is calculated taking into account the
following:
= +( Principal * FW Rate+ Principal COP)/((1+COP Rate)^(Days/365))
Valuation
June 4th 2007
Is the sum of all the Present Values (PV) of the forwards outstanding in
the day, including next day and 48 hour operations.
11
ANNEX 2
June 4th 2007
12
ANNEX 2 A
Reserve & Write Off Adjustment Appendix:
Colpatria follows Colombia Central Bank reserving requirements on their statutory
books, as part of the conversion to US GAAP an adjustment to their reserves and write
off has to be done to be inline with GE reserving methodologies.
GE’s allowance for losses on financing receivables represents our best estimate of
probable losses inherent in the portfolio. Our method of calculating estimated losses
depends on the size, type and risk characteristics of the related receivables. The
underlying assumptions, estimates and assessments we use to provide for losses are
continually updated to reflect our view of current conditions
Description of GE Reserving Models by Financial Product:
1. Revolving Consumer Products – methodology used is a “Gross Roll Rate Model
adjusted for Turnover”. This model uses past performance to predict the probability
of debt being charged off. The model analyzes debt rolling through each bucket
each month for the past 12 months and the output of the model is the probability of
the balance in each delinquency bucket rolling to charge-off, expressed as a
percentage. The percentages are multiplied by the receivables in each bucket &
totaled to calculate the gross reserve required.
2. Closed End Consumer Products – methodology used is a “Transition Matrix”.
This model analyzes how accounts move over a given period of time for a Closed
End Portfolio. The model uses account level data to analyze the movements
between the delinquency buckets and determine the percentage that will be written
off by delinquency bucket. The percentages are multiplied by the receivables in each
bucket & totaled to calculate the gross reserve required.
4. Mortgage Loans – methodology used is a “Markov Transition Matrix”. This model
analyzes how accounts move over a given period of time for a Mortgage Portfolio.
The model uses account level data to analyze the movements between the
delinquency buckets and determine the percentage that will be written off or the
default probability by bucket. The percentages are multiplied by the receivables in
each bucket & totaled to calculate the gross reserve required.
**Adjustment for Recoveries – For all our consumer products the gross reserve
requirement should be adjusted for expected recoveries on written off accounts
based on historical data of the business. Recoveries are cash, which has been
collected after an account has been written-off. In essence the gross losses are
being reduced by the realizable estimate of recoveries relating to these specific
losses thereby reflecting a reserve for the anticipated net losses.
June 4th 2007
13
2.5
GE Write Off Policy
1. Closed-end loans - Charged-off at 120 days delinquent or within the fiscal month of
becoming 120 days delinquent.
2. Open-end or Revolving loans - Charged-off at 180 days delinquent or within the
fiscal month of becoming 180 days delinquent.
3. Loans with non-real estate collateral – typically Auto - Where auto has not been
repossessed, auto receivables should be charged-off 100% when delinquency reaches
120 days.
4. Consumer loans secured by residential real estate (both revolving and closedend loans) are written down to the fair value of collateral, less costs to sell, no later
than when they become 360 days past due.
June 4th 2007
14
ANNEX 3
GASTOS DE ORIGINACION
BANCO COLPATRIA
FEBRERO 2007
Los gastos de originación o colocación hacen referencia a aquellos costos que se requieren para
desembolsar un crédito, la metodología a utilizar se rige bajo los parámetros de FAS 911. Esta
norma establece que criterios deben seguirse para la identificación de los gastos de colocación y
que son susceptibles de ser diferidos en el tiempo.
Política (Tomado de FAS 91)
Direct loan origination costs of a completed loan shall include only:
(a) incremental direct costs of loan origination incurred in transactions with independent
third parties for that loan(*) and
(b) certain costs directly related to specified activities performed by the lender for that loan.
(*) In order for direct loan origination costs incurred by lender’s employees (vs independent
third parties) to be deferrable, costs incurred by lender’s employees should be allocated
between origination activities and other activities (including solicitation). Only the portion of
total compensation that relates to activities described below should be deferred for that
completed loan
¾
Judgments to be based on measures of activities performed by employees
Those activities are:
• evaluating the prospective borrower's financial condition;
• evaluating and recording guarantees, collateral, and other security arrangements;
negotiating loan terms;
• preparing and processing loan documents;
• closing the transaction
• Reimbursement of costs for air travel, hotel accommodations, automobile mileage,
and similar costs incurred by personnel relating to the specified activities
• Costs of itemized long-distance telephone calls related to loan underwriting
• Reimbursement for mileage and tolls to personnel involved in on-site reviews of
collateral before the loan is granted.
• Loan counseling, such as discussing alternative borrowing arrangements with
borrowers, and negotiating terms
• Application processing
• Appraisal
• Initial credit analysis
1
Financial Accounting Standard: FAS91. Se revisó puntualmente la lista chequeo entregada por los asesores de Ernst &
Young que se adjunta como anexo
June 4th 2007
15
•
•
•
•
•
2.6
Initial credit investigation
Quality control review performed during the underwriting period
Direct approval processing
Loan evaluation and approval committees (all activities involved in origination
decisions)
Loan closing
Procedimiento:
Para la identificación de los gastos se realizó una primera revisión entre el área de planeación que
calcula los modelos rentabilidad por producto del activo, y los asesores de la firma Ernst & Young
para validar bajo la norma FAS 91 los gastos que efectivamente se deberían diferir, adicionalmente
evaluar que porcentaje de estos se debe diferir y cuanto tiempo.
Consideraciones
•
•
•
Gastos: para los gastos se deben revisar las cuentas y la naturaleza de cada gasto para
verificar si corresponde a la colocación.
% Aplicación: corresponde al porcentaje de efectividad de la colocación, se mide como el
numero de desembolsos del mes / numero de radicaciones del mes. 2
Duración: corresponde a la duración de la cartera y esta separada por producto
(Comercial, Hipotecario y Consumo)3
Posterior a la primera validación se realizo una reunión con los gerentes de producto para validar
que se estuviera involucrando las cuentas correctas dado que ellos son los que afectan el gasto
mensualmente y conocen cada producto,
Tarjetas de Crédito:
Diana Neira
Fuerza de Venta – Tarjetas de Crédito: Patricia Duque
Consumo y Fuerza Vta Consumo
Ana Nelcy Abello
Hipotecario:
Andrés Largacha
Vehículo:
Orieta Guerrero
Grupo de Revisión:
2
La fuente del % de éxito es: Análisis de Portafolio. (Carolina Cárdenas), esta información se actualiza mensualmente, y
para este tema dicha información fue avalada por la Gerente de la Fabrica de Crédito (Yolanda Reyes)
La fuente de la Duración es la Gerencia de Mercado (Alexandra Castillo), esta información se actualiza trimestralmente.
3
June 4th 2007
16
Adriana Campos
Johanna Ruiz
William Cardona
Como resultado se tiene la siguiente conclusión:
2.7
Forma de calcular el porcentaje de éxito:
Con la estadística suministrada por Análisis de Portafolio se toma: él número total de radicaciones
y numero de aprobaciones por producto (Consumo, Hipotecario y Tarjetas), para el mes febrero se
tiene:
Ene-07
Feb-07
% DESEMBOLSOS (% ACTIVAR)
Total
Hipotecario
T.C.
consumo
61.84%
100.00%
83.77%
51.34%
88.84%
84.97%
Total
82.16%
81.79%
Fuente: Análisis de Portafolio
El % de aplicación para los gastos correspondientes al producto de consumo es de 51.34%,
Hipotecario 88.84% y Tarjetas de Crédito 84.97%; ésta información se actualizara mensualmente.
Para el producto de pyme la estadística que se tiene es el porcentaje de aprobación, se tomara
este porcentaje para los gastos de originación correspondientes a la cartera pyme.4 Se toma el
número de radicaciones sobre el número de aprobaciones para el % de éxito debido a que no se
tiene la estadística de los desembolsos5.
% DESEMBOLSOS (% ACTIVAR)
Total
Ene-07
54.79%
Feb-07
44.61%
Para el producto de cartera comercial esta estadística la proporciona el área de Crédito de
Empresas6, la estadística que se tiene es el porcentaje de aprobación, se tomara este porcentaje
para los gastos de originación correspondientes a la cartera comercial. Se toma el numero de
radicaciones sobre el numero de aprobaciones para el % de éxito debido a que no se tiene la
estadística de los desembolsos7
4
5
6
La fuente de información es Análisis de Portafolio (Norma Linero)
Como recomendación se sugiere comenzar a calcular y llevar esta estadística de desembolsos
La fuente de información es Crédito de Empresas (Carolina Guzmán)
7 Como recomendación se sugiere comenzar a calcular y llevar esta estadística de desembolsos
June 4th 2007
17
MES
Enero
Febrero
TOTAL
TOTAL
TOTAL
OPERACIONES APROBADAS
%
193
182
94.3%
185
170
91.9%
378
352
93.1%
Fuente: Crédito de Empresas
2.8
2.9
Duración de la cartera:
La duración de la cartera es suministrada trimestralmente por la gerencia de riesgo de mercado
para los productos de consumo, hipotecario y comercial. La duración utilizada para el primer
ejercicio esta calculada a cierre de Diciembre de 2006, y se ira actualizando en forma trimestral de
acuerdo a la disponibilidad del informe
ACTIVOS
Comercial Total
Hipotecario Total
Cartera Consumo
Duracion
9
50
15
Fuente: Gcia Riesgo de Mercado
Con relación a la duración de tarjetas de crédito la duración es de 4.6 para Diciembre de 2006 y es
suministrada por la Gerencia de Planeación Banco, cifra que fue validada por Raúl González
Vicepresidente de Riesgo y William Cardona Gerente Integral de Riesgo. Esta información se
actualizará trimestralmente.
2.10 Gastos de Originación
Se detalla a continuación las cuentas de gasto a diferir por centro de costo, se adjunta el % de
éxito (% Des) y la duración (Plazo a diferir) (Dur)
June 4th 2007
18
Cuenta
c.costo
Descripcion
% Des Dur
761
GERENCIA DE CREDITO Y RIESGO
CONSULTAS A CIFIN
92%
9
512003010
761
SALARIO INTEGRAL
92%
9
512005010
761
SUELDOS
92%
9
512015010
761
AUXILIO DE TRANSPORTE
92%
9
512025010
761
CESANTIAS
92%
9
512030010
761
INTERESES SOBRE CESANTIAS
92%
9
512035010
761
PRIMA LEGAL
92%
9
512040010
761
PRIMA EXTRALEGAL
92%
9
512045010
761
VACACIONES ACUMULADAS
92%
9
512045030
761
VACACIONES ACUM. SALARIO INTEG
92%
9
512050010
761
PRIMA DE VACACIONES
92%
9
512065030
761
PENSION VOLUNTARIA COMPENSAC.
92%
9
512085010
761
APORTES SALUD
92%
9
512085040
761
APORTES PENSIONES
92%
9
512085060
761
APORTES ARP
92%
9
512090010
761
APORTES CAJA - NOMINALES
92%
9
512090020
761
APORTES ICBF- NOMINALES
92%
9
512090030
761
APORTES SENA - NOMINALES
92%
9
512092010
761
APORTES CAJA-SALARIO INTEGRAL
92%
9
512092020
761
APORTES I.C.B.F.-SALARIO INTEG
92%
9
512092030
761
APORTES SENA-SALARIO INTEGRAL
92%
9
512095010
761
SENA - LEY 789 DE 2003
92%
9
512096060
761
AUXILIO EDUCATIVO-BENEFICIO
92%
9
513015010
761
HONORARIOS-AVALUOS
92%
9
513095060
761
ASESORIA EN CREDITO
92%
9
513095140
761
SERVICIOS PROFESIONALES
92%
9
514005060
761
REGISTRO Y ANOTACION
92%
9
515010010
761
ASOCIACION BANCARIA
92%
9
515520060
761
PLAN SALUD COMPENSACION
92%
9
Cuenta
June 4th 2007
C.C
511595100
C.C
c.costo
Descripcion
% Des Dur
516015010
761
MANT Y REPAR-MUEBLES Y ENSERES
92%
9
519005010
761
ASEO
92%
9
519005020
761
RESTAURANTE, CAFET. Y REFRIGER
92%
9
519005060
761
RESTAURANTE-CANASTA BENEFICIO
92%
9
519010010
761
SERVICIOS TEMPORALES
92%
9
519025030
761
TELEFONO
92%
9
519025031
761
LARGA DISTANCIA
92%
9
519025032
761
LLAMADAS A CELULARES
92%
9
519035010
761
GASTOS DE VIAJE-ALOJAMIENTO
92%
9
519035020
761
GASTOS DE VIAJE
92%
9
519040050
761
TRANSPORTE URBANO
92%
9
519040090
761
TICKETS GASOLINA
92%
9
519045020
761
SERV. ENCUADERNACION Y FOTOCOP
92%
9
519045060
761
SUSCRIPCIONES
92%
9
519045090
761
UTILES Y PAPELERIA-COMPRAS
92%
9
519045091
761
OUTSOURCING DE IMPRESION
92%
9
521735010
761
PERD X SINIEST-EFECTIVO Y CANJ
92%
9
512005010 50763
CREDITO DE EMPRESAS MEDELLIN
SUELDOS
92%
9
512025010 50763
CESANTIAS
92%
9
512030010 50763
92%
9
512035010 50763
PRIMA LEGAL
92%
9
512040010 50763
PRIMA EXTRALEGAL
92%
9
512045010 50763
92%
9
512050010 50763
PRIMA DE VACACIONES
92%
9
512085010 50763
APORTES SALUD
92%
9
512085040 50763
APORTES PENSIONES
92%
9
512085060 50763
APORTES ARP
92%
9
512090010 50763
92%
9
512090020 50763
92%
9
512090030 50763
92%
9
519025030 50763
TELEFONO
92%
9
519025031 50763
LARGA DISTANCIA
92%
9
519025032 50763
92%
9
519045020 50763
92%
9
19
Gastos correspondientes a la colocación de consumo:
Cuenta
C.C
511595080 20316
c.costo
Descripcion
% Des Dur
GERENCIA NACIONAL DE VEHICULOS
POR COLOCACION DE PRODUCTOS
100%
15
GERENCIA NACIONAL DE VEHICULOS
COMISIONES VEHICULO PROD 743
100%
15
511595080 20777
FUERZA DE VENTAS EXTERNAS CONSUMO BOGOTÁ
100%
15
511595080 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CALI
100%
15
511595080 50778
FUERZA DE VENTAS EXTERNAS CONSUMO MEDELLIN
100%
15
511595100
736
PRESTAMO VEHÍCULO
CONSULTA CENTRALES INFORMACION
51%
15
512005010
736
PRESTAMO VEHÍCULO
SUELDOS
51%
15
512015010
736
PRESTAMO VEHÍCULO
51%
15
512025010
736
PRESTAMO VEHÍCULO
CESANTIAS
51%
15
512030010
736
PRESTAMO VEHÍCULO
51%
15
512035010
736
PRESTAMO VEHÍCULO
PRIMA LEGAL
51%
15
512040010
736
PRESTAMO VEHÍCULO
PRIMA EXTRALEGAL
51%
15
512045010
736
PRESTAMO VEHÍCULO
51%
15
512050010
736
PRESTAMO VEHÍCULO
PRIMA DE VACACIONES
51%
15
512085010
736
PRESTAMO VEHÍCULO
APORTES SALUD
51%
15
512085040
736
PRESTAMO VEHÍCULO
APORTES PENSIONES
51%
15
512085060
736
PRESTAMO VEHÍCULO
APORTES ARP
51%
15
512090010
736
PRESTAMO VEHÍCULO
51%
15
512090020
736
PRESTAMO VEHÍCULO
51%
15
512090030
736
PRESTAMO VEHÍCULO
51%
15
513095060
736
PRESTAMO VEHÍCULO
ASESORIA EN CREDITO
51%
15
519045020
736
PRESTAMO VEHÍCULO
51%
15
519045090
736
PRESTAMO VEHÍCULO
51%
15
519045091
736
PRESTAMO VEHÍCULO
51%
15
512010010
736
PRESTAMO VEHÍCULO
HORAS EXTRAS
51%
15
519045092
736
PRESTAMO VEHÍCULO
OUTSOURCING SERVICIO DE FAX
51%
15
519035020
736
PRESTAMO VEHÍCULO
GASTOS DE VIAJE
51%
15
519040020
771
MERCADEO
TRANSPORTE MENSAJERIA
51%
15
511595090
771
MERCADEO
SERV.DE INFORMAC.CIAL - ATENTO
51%
15
511595090
775
VENTAS EXTERNAS
SERV.DE INFORMAC.CIAL - ATENTO
51%
15
511595100
775
VENTAS EXTERNAS
51%
15
512005010
775
VENTAS EXTERNAS
SUELDOS
51%
15
512005030
775
VENTAS EXTERNAS
REMUNER.VARIABLE SUELDOS
51%
15
512010010
775
VENTAS EXTERNAS
HORAS EXTRAS
51%
15
512015010
775
VENTAS EXTERNAS
51%
15
512025010
775
VENTAS EXTERNAS
CESANTIAS
51%
15
512030010
775
VENTAS EXTERNAS
51%
15
512035010
775
VENTAS EXTERNAS
PRIMA LEGAL
51%
15
512040010
775
VENTAS EXTERNAS
PRIMA EXTRALEGAL
51%
15
512045010
775
VENTAS EXTERNAS
51%
15
512045030
775
VENTAS EXTERNAS
51%
15
512050010
775
VENTAS EXTERNAS
PRIMA DE VACACIONES
51%
15
512065030
775
VENTAS EXTERNAS
51%
15
512070020
775
VENTAS EXTERNAS
CUMPLIMIENTO METAS
51%
15
512085010
775
VENTAS EXTERNAS
APORTES SALUD
51%
15
512085040
775
VENTAS EXTERNAS
APORTES PENSIONES
51%
15
512085060
775
VENTAS EXTERNAS
APORTES ARP
51%
15
512090010
775
VENTAS EXTERNAS
51%
15
512090020
775
VENTAS EXTERNAS
51%
15
511595270
June 4th 2007
20316
20
Cuenta
June 4th 2007
C.C
c.costo
Descripcion
% Des Dur
512090030
775
VENTAS EXTERNAS
51%
15
512092010
775
VENTAS EXTERNAS
51%
15
512092020
775
VENTAS EXTERNAS
51%
15
512092030
775
VENTAS EXTERNAS
51%
15
512095010
775
VENTAS EXTERNAS
51%
15
512096060
775
VENTAS EXTERNAS
AUXILIO EDUCATIVO-BENEFICIO
51%
15
512096070
775
VENTAS EXTERNAS
CAPACITACIONES
51%
15
513095040
775
VENTAS EXTERNAS
SELECCION PERSONAL
51%
15
513095140
775
VENTAS EXTERNAS
51%
15
514015050
775
VENTAS EXTERNAS
PREDIAL
51%
15
514510010
775
VENTAS EXTERNAS
ARRENDAM. LOCALES Y OFICINAS
51%
15
515095140
775
VENTAS EXTERNAS
BOMBEROS
51%
15
516010010
775
VENTAS EXTERNAS
MANT Y REPAR-EQUIPO DE OFIC.
51%
15
516015010
775
VENTAS EXTERNAS
51%
15
516505010
775
VENTAS EXTERNAS
INSTALACIONES ELECTRICAS
51%
15
516515010
775
VENTAS EXTERNAS
REPARACIONES LOCATIVAS
51%
15
519005010
775
VENTAS EXTERNAS
ASEO
51%
15
519005020
775
VENTAS EXTERNAS
51%
15
519005040
775
VENTAS EXTERNAS
ADMINISTRACION
51%
15
519005050
775
VENTAS EXTERNAS
SEGURIDAD Y VIGILANCIA
51%
15
519010010
775
VENTAS EXTERNAS
51%
15
519020010
775
VENTAS EXTERNAS
RELACIONES PUBLICAS
51%
15
519025030
775
VENTAS EXTERNAS
TELEFONO
51%
15
519025031
775
VENTAS EXTERNAS
LARGA DISTANCIA
51%
15
519025032
775
VENTAS EXTERNAS
51%
15
519025040
775
VENTAS EXTERNAS
TELEX, MARCONIG.,PORTES CORREO
51%
15
519025050
775
VENTAS EXTERNAS
TELEFONIA CELULAR
51%
15
519030010
775
VENTAS EXTERNAS
PROCESAMIENTO ELECTR. DE DATOS
51%
15
519035020
775
VENTAS EXTERNAS
GASTOS DE VIAJE
51%
15
519040020
775
VENTAS EXTERNAS
51%
15
519040050
775
VENTAS EXTERNAS
TRANSPORTE URBANO
51%
15
519040055
775
VENTAS EXTERNAS
AUXILIO DE MOVILIZACION
51%
15
519040060
775
VENTAS EXTERNAS
TRANSP. DE EQ,MUEBLES Y PAPEL.
51%
15
519040090
775
VENTAS EXTERNAS
TICKETS GASOLINA
51%
15
519045020
775
VENTAS EXTERNAS
51%
15
519045090
775
VENTAS EXTERNAS
51%
15
519045091
775
VENTAS EXTERNAS
51%
15
529595020
775
VENTAS EXTERNAS
GASTOS NO DEDUCIBLES
51%
15
512096100
775
VENTAS EXTERNAS
RECREACION Y DEPORTES
51%
15
519035010
775
VENTAS EXTERNAS
GASTOS DE VIAJE-ALOJAMIENTO
51%
15
519040045
775
VENTAS EXTERNAS
TRANSPORTADORA DE VALORES
51%
15
519045060
775
VENTAS EXTERNAS
SUSCRIPCIONES Y PUBLICACIONES
51%
15
521795010
775
VENTAS EXTERNAS
PERD X SINIESTR-OT.ACT-TC VISA
51%
15
514095100
775
VENTAS EXTERNAS
IVA NO DESCONTABLE
51%
15
514595040
775
VENTAS EXTERNAS
ARRENDAMIENTO MUEBLES Y ENSER.
51%
15
519015010
775
VENTAS EXTERNAS
PUBLICIDAD Y PROPAGANDA
51%
15
519045092
775
VENTAS EXTERNAS
51%
15
512003010
776
GCIA.CRED.DE CONSUMO-RED INTERNA
SALARIO INTEGRAL
51%
15
512003030
776
REMUNER. VARIABLE SALARIO INT
51%
15
512005010
776
SUELDOS
51%
15
512005030
776
51%
15
512010010
776
HORAS EXTRAS
51%
15
512015010
776
51%
15
21
Cuenta
June 4th 2007
C.C
c.costo
Descripcion
% Des Dur
512025010
776
CESANTIAS
51%
15
512030010
776
51%
15
512035010
776
PRIMA LEGAL
51%
15
512040010
776
PRIMA EXTRALEGAL
51%
15
512045010
776
51%
15
512045030
776
51%
15
512050010
776
PRIMA DE VACACIONES
51%
15
512065030
776
51%
15
512070020
776
CUMPLIMIENTO METAS
51%
15
512085010
776
APORTES SALUD
51%
15
512085040
776
APORTES PENSIONES
51%
15
512085060
776
APORTES ARP
51%
15
512090010
776
51%
15
512090020
776
51%
15
512090030
776
51%
15
512092010
776
51%
15
512092020
776
51%
15
512092030
776
51%
15
513095140
776
51%
15
516015010
776
51%
15
519005010
776
ASEO
51%
15
519005020
776
51%
15
519010010
776
51%
15
519020010
776
RELACIONES PUBLICAS
51%
15
519035020
776
GASTOS DE VIAJE
51%
15
519040050
776
TRANSPORTE URBANO
51%
15
519040055
776
AUXILIO DE MOVILIZACION
51%
15
519040070
776
TRANSPORTE NOCTURNO
51%
15
519040090
776
TICKETS GASOLINA
51%
15
519045020
776
51%
15
519045070
776
SERVICIO MICROFILM Y ARCHIVO
51%
15
519045090
776
51%
15
519045091
776
51%
15
519005010 10648
FZA DE VTAS EXT. CONSUMO B/QUILLA
ASEO
51%
15
519005020 10648
51%
15
519005040 10648
ADMINISTRACION
51%
15
519025020 10648
ENERGIA ELECTRICA
51%
15
519025031 10648
LARGA DISTANCIA
51%
15
519045090 10648
51%
15
514510010 10648
ARRENDAM. LOCALES Y OFICINAS
51%
15
519025030 10648
TELEFONO
51%
15
512005010 20777
FUERZA DE VENTAS EXTERNAS CONSUMO BO SUELDOS
51%
15
512005030 20777
FUERZA DE VENTAS EXTERNAS CONSUMO BO REMUNER.VARIABLE SUELDOS
51%
15
512025010 20777
FUERZA DE VENTAS EXTERNAS CONSUMO BO CESANTIAS
51%
15
512030010 20777
FUERZA DE VENTAS EXTERNAS CONSUMO BO INTERESES SOBRE CESANTIAS
51%
15
512035010 20777
FUERZA DE VENTAS EXTERNAS CONSUMO BO PRIMA LEGAL
51%
15
512040010 20777
FUERZA DE VENTAS EXTERNAS CONSUMO BO PRIMA EXTRALEGAL
51%
15
512045010 20777
FUERZA DE VENTAS EXTERNAS CONSUMO BO VACACIONES ACUMULADAS
51%
15
512050010 20777
FUERZA DE VENTAS EXTERNAS CONSUMO BO PRIMA DE VACACIONES
51%
15
512070020 20777
FUERZA DE VENTAS EXTERNAS CONSUMO BO CUMPLIMIENTO METAS
51%
15
512085010 20777
FUERZA DE VENTAS EXTERNAS CONSUMO BO APORTES SALUD
51%
15
512085040 20777
FUERZA DE VENTAS EXTERNAS CONSUMO BO APORTES PENSIONES
51%
15
512085060 20777
FUERZA DE VENTAS EXTERNAS CONSUMO BO APORTES ARP
51%
15
22
Cuenta
June 4th 2007
C.C
c.costo
Descripcion
% Des Dur
512090010 20777
FUERZA DE VENTAS EXTERNAS CONSUMO BO APORTES CAJA - NOMINALES
51%
15
512090020 20777
FUERZA DE VENTAS EXTERNAS CONSUMO BO APORTES ICBF- NOMINALES
51%
15
512090030 20777
FUERZA DE VENTAS EXTERNAS CONSUMO BO APORTES SENA - NOMINALES
51%
15
512095010 20777
FUERZA DE VENTAS EXTERNAS CONSUMO BO SENA - LEY 789 DE 2003
51%
15
519005020 20777
FUERZA DE VENTAS EXTERNAS CONSUMO BO RESTAURANTE, CAFET. Y REFRIGER
51%
15
519025030 20777
FUERZA DE VENTAS EXTERNAS CONSUMO BO TELEFONO
51%
15
519040050 20777
FUERZA DE VENTAS EXTERNAS CONSUMO BO TRANSPORTE URBANO
51%
15
519045020 20777
FUERZA DE VENTAS EXTERNAS CONSUMO BO SERV. ENCUADERNACION Y FOTOCOP
51%
15
529595040 20777
FUERZA DE VENTAS EXTERNAS CONSUMO BO IMPUESTOS ASUMIDOS X EL BANCO
51%
15
519010010 20777
FUERZA DE VENTAS EXTERNAS CONSUMO BO SERVICIOS TEMPORALES
51%
15
519005010 30649
FZA DE VENTAS EXT. CONSUMO B/MANGA
ASEO
51%
15
519025030 30649
TELEFONO
51%
15
519045020 30649
51%
15
519045090 30649
51%
15
519045091 30649
51%
15
512005010 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA SUELDOS
51%
15
512005030 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA REMUNER.VARIABLE SUELDOS
51%
15
512015010 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA AUXILIO DE TRANSPORTE
51%
15
512025010 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA CESANTIAS
51%
15
512030010 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA INTERESES SOBRE CESANTIAS
51%
15
512035010 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA PRIMA LEGAL
51%
15
512040010 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA PRIMA EXTRALEGAL
51%
15
512045010 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA VACACIONES ACUMULADAS
51%
15
512050010 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA PRIMA DE VACACIONES
51%
15
512070020 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA CUMPLIMIENTO METAS
51%
15
512085010 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA APORTES SALUD
51%
15
512085040 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA APORTES PENSIONES
51%
15
512085060 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA APORTES ARP
51%
15
512090010 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA APORTES CAJA - NOMINALES
51%
15
512090020 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA APORTES ICBF- NOMINALES
51%
15
512090030 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA APORTES SENA - NOMINALES
51%
15
514015050 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA PREDIAL
51%
15
514510010 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA ARRENDAM. LOCALES Y OFICINAS
51%
15
514515010 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA ARRENDAMIENTOS-PARQUEADEROS
51%
15
516010010 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA MANT Y REPAR-EQUIPO DE OFIC.
51%
15
519005010 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA ASEO
51%
15
519005020 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA RESTAURANTE, CAFET. Y REFRIGER
51%
15
519005040 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA ADMINISTRACION
51%
15
519025020 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA ENERGIA ELECTRICA
51%
15
519025030 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA TELEFONO
51%
15
519025031 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA LARGA DISTANCIA
51%
15
519025032 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA LLAMADAS A CELULARES
51%
15
519035020 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA GASTOS DE VIAJE
51%
15
519040050 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA TRANSPORTE URBANO
51%
15
519045020 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA SERV. ENCUADERNACION Y FOTOCOP
51%
15
519045090 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA UTILES Y PAPELERIA-COMPRAS
51%
15
519045091 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA OUTSOURCING DE IMPRESION
51%
15
529595040 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA IMPUESTOS ASUMIDOS X EL BANCO
51%
15
519045092 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA OUTSOURCING SERVICIO DE FAX
51%
15
516015010 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA MANT Y REPAR-MUEBLES Y ENSERES
51%
15
519040060 40779
FUERZA DE VENTAS EXTERNAS CONSUMO CA TRANSP. DE EQ,MUEBLES Y PAPEL.
51%
15
511595100 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME CONSULTA CENTRALES INFORMACION
51%
15
512005010 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME SUELDOS
51%
15
23
Cuenta
C.C
c.costo
Descripcion
% Des Dur
512005030 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME REMUNER.VARIABLE SUELDOS
51%
15
512015010 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME AUXILIO DE TRANSPORTE
51%
15
512025010 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME CESANTIAS
51%
15
512030010 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME INTERESES SOBRE CESANTIAS
51%
15
512035010 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME PRIMA LEGAL
51%
15
512040010 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME PRIMA EXTRALEGAL
51%
15
512045010 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME VACACIONES ACUMULADAS
51%
15
512050010 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME PRIMA DE VACACIONES
51%
15
512070020 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME CUMPLIMIENTO METAS
51%
15
512085010 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME APORTES SALUD
51%
15
512085040 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME APORTES PENSIONES
51%
15
512085060 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME APORTES ARP
51%
15
512090010 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME APORTES CAJA - NOMINALES
51%
15
512090020 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME APORTES ICBF- NOMINALES
51%
15
512090030 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME APORTES SENA - NOMINALES
51%
15
512096070 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME CAPACITACIONES
51%
15
513095040 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME SELECCION PERSONAL
51%
15
514015050 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME PREDIAL
51%
15
514515010 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME ARRENDAMIENTOS-PARQUEADEROS
51%
15
516015010 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME MANT Y REPAR-MUEBLES Y ENSERES
51%
15
519005010 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME ASEO
51%
15
519005020 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME RESTAURANTE, CAFET. Y REFRIGER
51%
15
519005040 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME ADMINISTRACION
51%
15
519025020 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME ENERGIA ELECTRICA
51%
15
519025030 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME TELEFONO
51%
15
519025031 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME LARGA DISTANCIA
51%
15
519025032 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME LLAMADAS A CELULARES
51%
15
519035020 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME GASTOS DE VIAJE
51%
15
519040050 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME TRANSPORTE URBANO
51%
15
519045020 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME SERV. ENCUADERNACION Y FOTOCOP
51%
15
519045090 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME UTILES Y PAPELERIA-COMPRAS
51%
15
519045091 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME OUTSOURCING DE IMPRESION
51%
15
529595040 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME IMPUESTOS ASUMIDOS X EL BANCO
51%
15
519045092 50778
FUERZA DE VENTAS EXTERNAS CONSUMO ME OUTSOURCING SERVICIO DE FAX
51%
15
519005010 60655
FZA DE VENTAS EXT. CONSUMO PEREIRA
ASEO
51%
15
519025030 60655
TELEFONO
51%
15
519025031 60655
LARGA DISTANCIA
51%
15
519045090 60655
51%
15
Gastos de originación correspondientes a colocación de créditos Hipotecarios
Cuenta
C.C
c.costo
Descripcion
511595080 20533
GCIA.COMERCIAL DE CREDITOS HIPOTECARIOPOR COLOCACION DE PRODUCTOS
511595100 20533
GCIA.COMERCIAL DE CREDITOS HIPOTECARIOCONSULTA CENTRALES INFORMACION
% Des Dur
100%
50
89%
50
Gastos de originación correspondientes a colocación de créditos cartera pyme:
June 4th 2007
24
Cuenta
C.C
c.costo
Descripcion
% Des Dur
512005010
686
GCIA CREDITO PYME
SUELDOS
45%
9
512025010
686
GCIA CREDITO PYME
CESANTIAS
45%
9
512030010
686
GCIA CREDITO PYME
45%
9
512035010
686
GCIA CREDITO PYME
PRIMA LEGAL
45%
9
512040010
686
GCIA CREDITO PYME
PRIMA EXTRALEGAL
45%
9
512045010
686
GCIA CREDITO PYME
45%
9
512050010
686
GCIA CREDITO PYME
PRIMA DE VACACIONES
45%
9
512085010
686
GCIA CREDITO PYME
APORTES SALUD
45%
9
512085040
686
GCIA CREDITO PYME
APORTES PENSIONES
45%
9
512085060
686
GCIA CREDITO PYME
APORTES ARP
45%
9
512090010
686
GCIA CREDITO PYME
45%
9
512090020
686
GCIA CREDITO PYME
45%
9
512090030
686
GCIA CREDITO PYME
45%
9
519040050
686
GCIA CREDITO PYME
TRANSPORTE URBANO
45%
9
519045091
686
GCIA CREDITO PYME
45%
9
519045092
686
GCIA CREDITO PYME
45%
9
511595100
686
GCIA CREDITO PYME
45%
9
512015010
686
GCIA CREDITO PYME
45%
9
519005020
686
GCIA CREDITO PYME
45%
9
519045090
686
GCIA CREDITO PYME
45%
9
519040060
686
GCIA CREDITO PYME
45%
9
519010010
686
GCIA CREDITO PYME
45%
9
519045060
686
GCIA CREDITO PYME
SUSCRIPCIONES Y PUBLICACIONES
45%
9
Gastos de originación correspondientes a colocación de tarjetas de crédito:
Cuenta
C.C
c.costo
Descripcion
% Des Dur
511595040 20302
GERENCIA TARJETAS DE CPROMOCION TARJETAS DE CREDITO
100%
5
511595080 20302
GERENCIA TARJETAS DE CPOR COLOCACION DE PRODUCTOS
100%
5
511595080 20325
LA RIVIERA
100%
5
511595040 20338
GCIA. FZA VTAS TARJETASPROMOCION TARJETAS DE CREDITO
100%
5
511595080 20338
GCIA. FZA VTAS TARJETASPOR COLOCACION DE PRODUCTOS
100%
5
511595080 20645
CARREFOUR FVE (MARCA POR COLOCACION DE PRODUCTOS
511595100
MARCAS COMPARTIDAS
100%
5
85%
5
511595100 10312
FUERZA DE VENTAS BARR CONSULTA CENTRALES INFORMACION
85%
5
511595100 20302
GERENCIA TARJETAS DE CCONSULTA CENTRALES INFORMACION
85%
5
519045095 20302
GERENCIA TARJETAS DE CPLASTICOS Y SOBREFLEX TARJ.CR.
85%
5
519030010 20302
GERENCIA TARJETAS DE CPROCESAMIENTO ELECTR. DE DATOS
85%
5
511595100 20307
HOMECENTER
85%
5
511595100 20325
LA RIVIERA
85%
5
519045095 20326
COMCEL
PLASTICOS Y SOBREFLEX TARJ.CR.
85%
5
511595100 20329
CARREFOUR MARCA COM CONSULTA CENTRALES INFORMACION
85%
5
519030010 20329
CARREFOUR MARCA COM PROCESAMIENTO ELECTR. DE DATOS
85%
5
511595100 20338
GCIA. FZA VTAS TARJETASCONSULTA CENTRALES INFORMACION
85%
5
519030010 20338
GCIA. FZA VTAS TARJETASPROCESAMIENTO ELECTR. DE DATOS
85%
5
519045095 20346
CAJASAN
85%
5
519045095 20347
CABLEPACIFICO
85%
5
519045095 20647
EL TIEMPO
85%
5
511595100 30330
FUERZA DE VENTAS - BUC CONSULTA CENTRALES INFORMACION
85%
5
511595100 50304
HOMECENTER MEDELLIN CONSULTA CENTRALES INFORMACION
85%
5
511595100 50330
FUERZA DE VENTAS MEDECONSULTA CENTRALES INFORMACION
85%
5
511595100 60330
FUERZA DE VENTAS PERE CONSULTA CENTRALES INFORMACION
85%
5
625
2.11 Fábrica de Crédito
Los gastos correspondientes al área de la Fábrica de crédito c.c 744 (se toman todas las cuentas
del centro de costo) se deben distribuir por los tres productos a los cuales realiza el estudio y
aprobación de los créditos (Consumo, Tarjetas e Hipotecario); para distribuir este gasto se toma del
total de los gastos de la fábrica y se aplica el porcentaje de radicaciones por producto8, luego de
tener el gasto por producto, a este valor se aplica el % de éxito de cada producto mencionado
anteriormente.
8
Las radicaciones son suministradas por el área de Análisis de Portafolio.
June 4th 2007
25
Cuentas fabrica de crédito
Cuenta
511595100
512003010
512005010
512005030
512010010
512015010
512025010
512030010
512035010
512040010
512045010
512045030
512050010
512065020
512065030
512070020
512085010
512085040
512085060
512090010
512090020
512090030
512092010
512092020
512092030
512095010
513015010
513095060
514005060
516015010
519005010
519005020
519005060
519010010
519025030
519025031
519025032
519025040
519040050
519040060
519040070
519045020
519045090
519045091
516515010
519045092
519035020
519040020
C.C
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
744
Descripcion
SALARIO INTEGRAL
SUELDOS
HORAS EXTRAS
CESANTIAS
PRIMA LEGAL
PRIMA EXTRALEGAL
PRIMA DE VACACIONES
RECARGOS POR TRABAJO NOCTURNO
CUMPLIMIENTO METAS
APORTES SALUD
APORTES PENSIONES
APORTES ARP
HONORARIOS-AVALUOS
ASESORIA EN CREDITO
REGISTRO Y ANOTACION
ASEO
RESTAURANTE-CANASTA BENEFICIO
TELEFONO
LARGA DISTANCIA
TELEX, MARCONIG.,PORTES CORREO
TRANSPORTE URBANO
TRANSPORTE NOCTURNO
REPARACIONES LOCATIVAS
GASTOS DE VIAJE
Estadística del número de radicaciones por producto:
Ene-07
Feb-07
NUMERO RADICACIONES
Total
Hipotecario
T.C.
consumo
8.43%
1.05%
90.51%
9.62%
1.53%
88.85%
Total
100%
100%
June 4th 2007
26
2.12 Papelería:
Los gastos de Útiles y papelería cuenta contable 519045090 se tomara únicamente los gastos
correspondientes a los siguientes códigos de producto dentro del pedido de papelería los cuales
corresponden a la originación del crédito.9
codigo
6014889
6022212
6024795
6020846
6023535
6014887
6014888
6001353
6001354
6014808
6018468
6021944
6023681
6000159
6000334
6014783
6019888
6021938
6022038
6024014
6024608
6024852
6024869
6026128
NOMBRE_PRODUCTO_FESA
PAGARE CARTERA ORDINARIA BA
PREVINCULACION CREDITO BANC
SOLICITUD DE CREDITO CARREFOUR
SOLICITUD CREDITO MULTIPRESTAM
SOLICITUD CREDITO DE VEHICULO
CARTA INSTRUC.PARA LLENAR PAGA
PAGARE UNICO CONTRA GARANTIA
PAGARÉ CRÉDITO HIPOTECARIO PES
PAGARÉ CRÉDITO HIPOTECARIO UVR
SOLICITUD EVAL CREDITO CLI. AH
CARTA INSTR.CREDITO HIPOTECARI
12-177 Solicitud Crèdito Hipot
PAGARE CRED.VIVIENDA EN PESOS
SOLICITUD DE CREDITO COMPRE FA
SOLICITUD TARJETA CREDITO DIRE
SOBREFLEX CREDIBANCO-50 BAN
SOLICITUD TC PEPE GANGA - BANC
SOLICITUD TC CAFAM - BANCO COL
SOLICITUD CREDITO LA RIVIERA B
Solicitud Crèdito Cajasan -Ban
SOLICITUD TARJ. CREDITO CABLE
SOLICITUD CREDITO CAFAM NUEVA
SOLICITUD TARJETAS COMCEL - BA
SOLICITUD TJ CREDITO EL TIEMPO
PRODUCTO
Comercial
Consumo
Consumo
Consumo
Consumo
Consumo
Consumo
Hipotecario
Hipotecario
Hipotecario
Hipotecario
Hipotecario
Hipotecario
Tarjetas
Tarjetas
Tarjetas
Tarjetas
Tarjetas
Tarjetas
Tarjetas
Tarjetas
Tarjetas
Tarjetas
Tarjetas
Este gasto corresponde principalmente a las solicitudes de crédito, pagares e instructivos para
llenar los pagares. Luego de agrupar el gasto por cada producto se aplica el porcentaje de éxito de
cada producto mencionado anteriormente (% de Aplicación) y la duración correspondiente a cada
uno.
2.13 Transporte
De la cuenta de transporte y mensajeria solo se tomará para los centros de costo de tarjeta de
crédito
Cuenta
C.C
519040020 20302
519040020 20338
c.costo
GERENCIA TARJETAS DE CREDITO
GCIA. FZA VTAS TARJETAS DE CREDITO
Descripcion
% Aplicación Dur (meses)
85%
5
85%
5
9
La fuente de información es el área de Servicios Administrativos (Mónica Chaves), envió la factura de Fesa (proveedor de
útiles y papelería) del mes de febrero de todos los centros de costo del banco.
June 4th 2007
27
2.14 Nómina
De las siguientes áreas se debe imputar el personal que se dedica exclusivamente a la originación
de los créditos.
Producto % Aplicación Duracion
Medios de Pago
Tarjetas
85%
5
Vehiculos
Consumo
51%
15
Hipotecario
Hipotecario
89%
50
Medios de Pago, centro de costo 20825, hay 2 personas que se dedican a Generación de
plásticos, distribución, claves, etc hasta la entrega a los asesores del producto Tarjetas de
crédito.10. Para calcular el valor de nomina se toma el sueldo de cada funcionario y se aplica el
factor prestacional11
La planta de este centro de costo es enviada por Desarrollo Humano12 mensualmente, se toma el
salario de cada uno y se calcula el total del mes con el factor prestacional señalado. A este gasto
resultante se aplica el % de éxito de tarjetas de crédito.
Vehículos: centro de costo 20316, hay 10 personas que se dedican exclusivamente a la
originación de créditos hipotecarios (Ejecutivos comerciales y Director Comercial)13 Para calcular el
valor de nomina se toma el sueldo de cada funcionario y se aplica el factor prestacional. A este
gasto resultante se aplica el % de éxito de consumo
Hipotecario: centro de costo 20533, hay 20 personas que se dedican a la legalización de créditos
hipotecarios.14 Para calcular el valor de nomina se toma el sueldo de cada funcionario y se aplica el
factor prestacional. A este gasto resultante se aplica el % de éxito de hipotecario
10
El numero de personas correspondiente a Medios de Pago fue certificado por Maria Constanza Gelvez, directora de
plásticos operaciones consumo.
11
El factor prestacional fue reportado por Desarrollo Humano (Eliana Delgado) Salario Normal: 65.92%, Integral 26.86%
12
La fuente de información es Eliana Delgado
13
El numero de personas correspondiente a Vehículos fue certificado por Orieta Guerrero, Gerente de Crédito de Vehículos
14
El numero de personas correspondiente a Hipotecario fue certificado por Lucia Fonseca, Jefe de legalización de
Hipotecario y certificado por Andrés Largacha, Gerente de Crédito Hipotecario
June 4th 2007
28
2.15 Forma de Amortización
La amortización se realizará por el método de línea recta para los productos de consumo,
comercial, tarjetas e hipotecario15
15
Hipotecario se amortizará por línea recta también debido a que no se cuenta con la información para calcular la tasa
efectiva
June 4th 2007
29
Deleted: ¶
ANNEX 4 – Scope and Basis for USGAAP
Statements
June 4th 2007
30
GE Software Capitalization
Policy Handbook
June 4th 2007
31
GE Software Capitalization Policy Handbook
Index
•
•
•
•
•
•
June 4th 2007
Background
Purchased Software
Purchased Software Requiring Vendor Modification
Internal Use Software
Accounting for Software Licenses
Other Miscellaneous Issues
32
GE Software Capitalization Policy Handbook
Background
As a result of GE's decision to early adopt AICPA
Statement of Position (SOP) "Accounting for the Costs
of Computer Software Developed or Obtained for
Internal Use" as of January 1, 1998, the following new
accounting guidelines are required to be followed and
implemented immediately.
June 4th 2007
33
Purchased Software
Chapter 1. Purchased Software
•
•
•
•
June 4th 2007
Definition
Accounting and Amortization Policies
Exceptions
Impairment Tests
34
Purchased Software
Definition, Accounting, and
Amortization Policy
Definition: "Shrink wrapped" or off the shelf software directly purchased from an outside
vendor that is capable of being sold to more than one customer and is mass
produced, as opposed to software that is contractually developed under
customer specifications. Vendor modification of such software is expected to
be minimal.
Accounting Policy:
1.) If individual seat or license is less than $2,500, immediately expense
2.) If individual seat or license is greater than $2,500, capitalize
Amortization Policy:
Book: Amortize over its useful life, not to exceed 5 years
Tax:
Amortize over 3 years
Commencement Period:
New Software:
When software is available for its intended use
Replacement Software: When old software is removed and new software is installed
Note: Amortization is not required when software is being parallel tested.
June 4th 2007
35
Purchased Software
Exceptions to
Accounting Rules
Individual seat or licenses under $2,500 can be aggregated and capitalized
if the following criteria is met:
1. Obtain A/R (Appropriation Request) approval
2. Mandated one-time purchase requirement to get organizations on
consistent software standards (i.e., Micro Soft Windows 95)
3. Software vendor has granted organization on unlimited site license
resulting in an aggregate cost that exceeds the $2,500 threshold
Note: Additive purchases, as well as unit replacements which occur subsequent to the
one-time purchase must be expensed if the unit cost is less than $2,500. However,
if the entire suite is upgraded by means of a mandated one-time purchase, which is
required for an organization to be on a consistent software standard, than the
individual licenses under $2,500 can be aggregated and capitalized (i.e., Windows
99 for all of GE)
June 4th 2007
36
Purchased Software
Impairment Testing
An Ongoing Impairment Review is Required:
Ongoing:
Reassess useful life assigned at date asset was placed
in service.
Write-off:
If remaining useful life is less than the current book
amortization period, an asset write-off may be required,
or an adjustment to the remaining useful life, depending
upon the amount of impairment.
June 4th 2007
37
Chapter 2.
• Definition
• Old Accounting Policy
• New Accounting Policy
June 4th 2007
38
Definition:
"Externally purchased software that is modified to meet the entity's
internal need.
Old Accounting Policy:
The costs of modifying externally purchased software can be capitalized when a fixed
cost contract exceeding $100,000 exists. Costs being defined as software package,
design, consulting, programming, and travel and living expense incurred by the
vendor.
THIS POLICY HAS BEEN RESCINDED
New Accounting Policy:
The costs of modifying externally purchased software can only be capitalized if the
application development portion of the expense is greater than $400M. See section
on Internal Use Software for additional discussion on the type of costs as well as the
accounting treatment.
June 4th 2007
39
Chapter 3. Internal Use Software
• Definition
• Accounting and Amortization Policies
• Additional Requirements to be Granted
Capitalization Treatment
• Projects Which Span A Fiscal Year-End
• Grandfathering/Implementation Rules
• Impairment Testing
June 4th 2007
40
Definition and
Accounting Policy
Definition:
Internal use software is software that is either acquired ,internally developed or modified to meet
our internal needs, and during the development phase there are no plans to market the software
externally.
Accounting Policy:
If the application development portion of the expenses that are potentially capitalizable is greater
than $400M, than the following costs may be capitalized: design, coding, testing, and installation.
In calculating these costs you may include comp and benefits, travel and living expenses,
capitalized interest incurred during the development of internal use software in accordance with
GAP 18.5, consulting costs and costs to develop or obtain software that allows for transfer or
access of old data by the new system. Certain costs are specifically excluded from capitalization;
overhead allocations, training, reengineering, data conversions, (i.e., enhancements, purging,
balancing and transfer costs) not executed through software programs, i.e., costs of manual data
transfer.
Only costs with AR amounts that exceed $400M are eligible for capitalization. Two cases arise
that require special consideration:
For projects or processes in which actual expenditures are below the original AR total of $400M,
costs should still be capitalized.
For projects or processes in which the original appropriation request amount was less than
$400M but subsequent management-approved additions (revised AR) increase the total over
$400M, eligible costs incurred after the date of the revised AR are capitalizable.
June 4th 2007
41
Accounting, and
Amortization Policy
Accounting Policy (Continued):
It should be noted that information technology employees comp and benefits expense can
only be capitalized based upon direct time applied to the project during the application
development phase. Functional resource employee's comp and benefit expense can be
capitalized only if they are fully dedicated (100% applied) to the project. However, the
portion of their expense that is capitalizable only relates to the time that is devoted to the
application development phase.
Amortization Policy:
Book: Amortize over its useful life, not to exceed 5 years
Tax:
Amortize over 3 years
Commencement Period:
When software is available for its intended use
New Software:
Replacement Software: When old software is removed and new software is installed
Note: Amortization is not required when software is being parallel tested.
June 4th 2007
42
Additional
Documentation Requirements
To Be Granted Capitalization
Treatment
1. All costs must be approved by management and such
approval documented in an Appropriation Request
2. A rigorous and auditable cost tracking mechanism
must be in place
3. All tracking for government contract purposes must
be consistent with these requirements.
June 4th 2007
43
Projects Which Span
A Fiscal Year-End
Costs must be accumulated in an unfinished software
account at year-end and retained until the project has been
completed and the asset is ready for its intended use.
June 4th 2007
44
Granderfathering
Issues
Current Projects:
Definition:
These are projects which have been approved and started prior to 3/1/98.
Implementation Requirement:
1. Adopt new rules retroactive to 1/1/98; or
2. Follow old rules
New Projects:
Definition:
Projects started and/or approved post 3/1/98.
Implementation Requirement:
Adopt new rules as set forth herein.
June 4th 2007
45
Impairment Testing
An Ongoing Impairment Review is Required:
Ongoing:
Reassess useful life assigned at date asset was placed
in service.
Write-off:
If remaining useful life is less than the current book
amortization period, an asset write-off may be required
or an adjustment to the remaining useful life, depending
upon the amount of impairment.
June 4th 2007
46
Accounting for Software Licenses
Software licenses should be capitalized and
amortized over the life of the license, not to
exceed the useful life of the software.
June 4th 2007
47
Other Miscellaneous Issues
• What costs qualify to get to the $400M threshold?
Only those costs that qualify as capitalizable are eligible; expense items such as training,
reengineering and manual data conversion/transfer are excluded.
• When should amortization begin on a multi-phased project or process?
As was stated earlier, amortization should begin when an individual module is substantially
complete and "ready for its intended use."
• Does a project that is shared among multiple businesses or poles qualify for the $1MM
threshold??
Yes, if the expenditures qualify as capitalizable and exceed $400M.
• Any change for Year 2000 costs (EITF Issue 96-14)?
No, costs incurred to modify existing computer software to correct Y2K problems should be
expensed as incurred. This excludes purchases of hardware and purchased (shrink wrapped)
software which replace existing systems that are not Y2K compliant.
• What about EURO conversion cost — are these capitalizable?
Unlike Year 2000 costs, we believe that there is a basis for capitalizing these conversion costs
during the EURO transition period (beginning 1/1/99 and ending 12/31/2001) on the basis that
compliance during this period is voluntary and provides a competitive advantage. All costs so
capitalized must be fully amortized by 12/31/2001. (This is under EITF study and is subject to
changes.)
June 4th 2007
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June 4th 2007
49
Annex 2 – Procedures and Deliveries in Respect of Option Closings
SECTION 1. Defined terms used in this Annex 2 and not defined otherwise herein shall have
the respective meanings assigned thereto in the Shareholders’ Agreement (the “Agreement”).
SECTION 2. All Option Closings shall take place at the offices of Latham & Watkins LLP
located at 885 Third Avenue, New York, New York or at such other place as the Investor Group
and the Colpatria Group may mutually agree upon.
SECTION 3. Any party delivering an Option Notice (the “Exercising Party”) shall attach to
such Option Notice the following items used by the Exercising Party to determine the Exercise
Price: (i) the financial statements of the Bank used by the Exercising Party in the determination
of Net Profits for the purposes of determining Valuation Date Pre Tax Earnings or the Option C
Valuation Date Pre Tax Earnings, as the case may be (the “Financial Statements”); and (ii) any
arbitration award or agreement of the Parties used by the Exercising Party to determine the
Option A/B Setoff Amount or the Option C Setoff Amount, as the case may be.
SECTION 4. If the party receiving the Option Notice (the “Receiving Party”) agrees with the
calculation of the Exercise Price set forth in the Option Notice delivered by the other party (the
“Notifying Party”), then the Option Closing Date shall take as provided in Section 6.4 of the
Agreement.
SECTION 5. If the Receiving Party disagrees with any information contained in the Financial
Statements relevant for the determination of the Exercise Price or with the calculation of the
Exercise Price set forth in the Option Notice delivered by the Notifying Party, the Receiving
Party may, within sixty (60) days after delivery of the Option Notice, deliver a notice (a “Notice
of Disagreement”) to the Notifying Party that (i) specifies those items or amounts as to which the
Receiving Party disagrees (each, a “Disputed Item”), (ii) sets forth the Receiving Party’s
calculation of each Disputed Item together with an explanation, in reasonable detail, of the
reasons for disputing each Disputed Item and (iii) sets forth any adjustments that the Receiving
Party believes should be made to the Option Notice in respect of each Disputed Item (the
“Dispute Amount Estimate”).
SECTION 6. If a Notice of Disagreement is duly delivered, the Investor Group and the
Colpatria Group shall, during the fifteen (15) days following such delivery, use their reasonable
commercial efforts to reach agreement on the proper amount of each Disputed Item. If, during
such period, the Investor Group and the Colpatria Group are unable to reach such agreement,
they shall promptly thereafter cause independent accountants of nationally recognized standing
in the United States of America reasonably satisfactory to the Investor Group and the Colpatria
Group (who shall not have any material relationship with the Investor Group and the Colpatria
Group), promptly to review the Agreement and the Disputed Items for the purpose of calculating
the Exercise Price. In making such calculation, such independent accountants shall consider only
the Disputed Items as to which the Receiving Party has disagreed. Such independent accountants
shall act as experts, and not as arbitrators, and shall deliver to the Investor Group and the
Colpatria Group, as promptly as practicable, a report setting forth such calculation. Such report
shall be final and binding upon the Investor Group and the Colpatria Group. The cost of such
review and report shall be borne by the Investor Group, if such independent accountants decide
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in favor of the Colpatria Group on more than one-half of the dollar amount of Disputed Items, or
by the Colpatria Group, if such independent accountants decide in favor of the Investor Group on
more than one-half of the U.S. Dollar amount of Disputed Items. Notwithstanding anything in
the foregoing to the contrary, in no event shall the independent accountant’s calculation of the
Exercise Price be more than the calculation of the Exercise Price delivered by the Colpatria
Group, or less than the calculation of the Exercise Price delivered by Investor Group, and the
Parties shall give a joint instruction to the independent accountants to that effect.
SECTION 7. The Investor Group and the Colpatria Group agree that they will, and agree to
cause their respective independent accountants and the Bank and each of the Subsidiaries of the
Bank to, cooperate and assist in the preparation of the calculation of the Exercise Price and in the
conduct of the audits and reviews referred to herein, including the making available to the extent
necessary of books, records, work papers and personnel.
SECTION 8. If a Notice of Disagreement is duly delivered, then, subject to Section 6.4 of the
Agreement, the Option Closing Date shall take place no later than the fifteenth (15th) Business
Day after the date that the report of the independent accountants is delivered to the Investor
Group and the Colpatria Group pursuant to Section 6 above, or at such other time or place as the
Investor Group and the Colpatria Group may agree, subject to Section 9 below.
SECTION 9. At each Option Closing:
9.1
the Investor Group shall deliver to the Colpatria Group by wire transfer to one or
more accounts designated by the Colpatria Group through prior written notice to the Investor
Group, immediately available funds in an amount equal to the Exercise Price, as agreed by the
parties pursuant to Section 4 or as determined by the independent accountants pursuant to
Section 6, net, in the case of Option C, of the Option C Holdback Amount, which shall be
deposited into escrow as in accordance with Section 6.4(d) of the Agreement;
9.2
the Colpatria Group shall deliver to Investor Group, its agent or designee, or the
JVCo or the Bank certificates for the Shares subject to the exercise of such Call Option or Put
Option, as applicable, accompanied with executed instruments of transfer;
9.3
the Colpatria Group shall deliver to the Investor Group, and the Investor Group
shall deliver to the Colpatria Group, true and correct certificates executed by an officer of each
Colpatria Group Member selling shares (which may be waived by the Investor Group) or each
Investor Group Member purchasing shares (which may be waived by the Colpatria Group), as
the case may be (the “Officers’ Certificates”) to the effect that the following representations and
warranties are true and correct in all material respects as of the date of the applicable Option
Closing (except for such representations and warranties which are qualified by their terms by a
reference to materiality or material adverse effect, which representations and warranties as so
qualified shall be true and correct in all respects):
(a)
Corporate Existence and Power. Each Shareholder is duly organized and
validly existing under the Laws of its jurisdiction of organization and has all
organizational powers and all Permits required to carry on its business as now conducted;
except for those Permits the absence of which could not reasonably be expected to have a
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material adverse effect. True and complete copies of the certificate of incorporation,
articles of incorporation, bylaws and other similar organizational documents of such
Shareholder, including any amendments thereto, have been delivered to, or otherwise
made available to, the other Shareholders;
(b)
Corporate Authorization. The delivery of the Officers’ Certificates and
the other certificates, documents and agreements being delivered by such Shareholder in
connection with the Option Closing and the consummation of the Option Closing are
within such Shareholder’s organizational powers and have been duly authorized by all
necessary corporate action on the part of such Shareholder. The Officers’ Certificates
have been duly and validly executed and delivered by such Shareholder and they (and the
representations and warranties of such Shareholder made herein) constitute the valid and
binding obligations of such Shareholder with respect to the subject matter thereof,
enforceable against such Shareholder in accordance with their terms;
(c)
Governmental Authorization. The consummation of the Option Closing
requires no material action by or in respect of, or material filing with, any Governmental
Authority other than compliance with the requirements of applicable Law and
Governmental Authorities, in each case, relating to the regulation of banks and financial
institutions;
(d)
No Conflict.
The execution, delivery and performance by such
Shareholder of the Officers’ Certificates and the consummation of the Option Closing do
not and will not (i) violate the memorandum of association, articles of association or
other organizational documents of Parent, each Seller, the Bank, or the Bank’s
Subsidiaries, (ii) assuming compliance with the matters referred to in the foregoing
paragraph (c), violate in any material respect any applicable Law, (iii) except as set forth
in the Disclosure Schedule delivered herewith (the “Disclosure Schedule”), require any
material consent or other material action by any Person under, constitute a default under,
or give rise to any right of termination, cancellation or acceleration of any material right
or obligation of such Shareholder or to a loss of any material benefit to which the such
Shareholder is entitled under any provision of any material agreement or other instrument
binding upon such Shareholder or (iv), in the case of the Colpatria Group Members
only, result in the creation or imposition of any Lien on such Colpatria Group Member’s
Shares, except, in the cases of (ii), (iii) and (iv) above where such violation, failure to
obtain a consent, action constituting a default under, or giving rise to any right of
termination, cancellation or acceleration or creation or imposition of Lien could not
reasonably be expected to have a material adverse effect;
(e)
Ownership of Shares. The Colpatria Group Members each hold the
number and percentage of total Bank Shares set forth in the Disclosure Schedule. Except
as set forth in the Disclosure Schedule, each Colpatria Group Member holds all Bank
Shares free and clear of any Lien;
9.4
the Colpatria Group shall deliver to Investor Group a receipt reflecting receipt of
the purchase price for the Shares subject to such exercise;
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9.5
the Investor Group, its designee, and, if applicable, JVCo or the Bank, shall
deliver to the Investor Group a receipt reflecting receipt of the certificates representing the
Shares subject to such exercise and the other documentation required to be delivered pursuant to
this Section 9; and
9.6
the Option Closing shall only be held if the conditions set forth in Section 6.4(g)
of the Agreement shall have been satisfied.
SECTION 10. At any Option Closing and thereafter, the Shareholders agree to, and, agree to
cause the Bank and each Subsidiary to do or cause to be done, execute, acknowledge and deliver
all such other acts, deeds, assignments, transfers, documents, certificates, agreements, powers of
attorney, assurances and other writings, in each case, necessary or desirable to consummate or
implement expeditiously the transactions contemplated in connection with such Option Closing,
including as may be necessary to sell, assign, convey and transfer to and vest in the Investor all
of the rights of the Colpatria Group to the Shares subject to such Option Closing.
SECTION 11. Notwithstanding anything in this Agreement to the contrary, in connection with
any exercise of any Call Option, the Investor shall have the right to name a designee to purchase
the Shares subject thereto (it being understood that no such designation shall in any way limit the
obligations of the Investor under this Agreement).
SECTION 12. Immediately following the Option Closing, the JVCo and the Bank shall
execute and issue to the Investor or its designee new share certificates representing the number
of Shares purchased at such Option Closing.
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Annex 4
The following Sections of the Agreement and other terms shall be the basis for the negotiation of
any new shareholders agreement pursuant to the terms of Section 7.3(e):
1. Article I
2. Article II
3. Section 3.1(a)
4. Section 3.1(b)
5. Sections 3.1 (c) through (and including) 3.1(h)
6. Sections 3.2 through (and including) 3.17
7. Article IV
8. Article V
9. Article VI, except that the Call/Put Option A Period shall be four (4) years from the date
of acquisition of the target. If possible, Option C shall be exercised simultaneously. The
Exercise Price (as calculated pursuant to the Agreement) shall not apply and shall be
subject to negotiation by the parties.
10. Section 7.1 (c), provided that the percentage of Estimated Net Profits shall not apply and
shall be subject to negotiation by the parties.
11. Section 7.1(d)
12. Section 7.2
13. Section 7.3
15. Article VIII
16. Section 12.1(a), provided that the reference to Article IX contained therein shall not
apply
17. Section 12.1(b), provided that the reference to Section 9.3 contained therein shall not
apply
18. Sections 12.1(c) through (and including) 12.1(e)
19. Section 12.1(g)
20. Section 12.1(m)
21. Section 12.2 (a), provided that the reference to Article IX contained therein shall not
apply.
23. Article XIII
24. Article XIV
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25. The rights and obligations of the parties shall correspond to the applicable Period at the
time of the acquisition. As a manner of example, during Period 1 hereunder, the rights
and obligations of the parties in the new opportunity shall correspond to Period 1.
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