EXECUTION COPY
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MASTER STOCK PURCHASE AGREEMENT
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AMONG
BANCOLOMBIA (PANAMA) S.A.,
AS PURCHASER,
AND
THE PERSONS IDENTIFIED HEREIN AS MAJORITY SHAREHOLDERS,
IN RESPECT OF THE SHARES OF CAPITAL STOCK OF
BANAGRICOLA, S.A.
DECEMBER 22, 2006
TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS........................................................... 1
1.1 Defined Terms..................................................... 1
1.2 Other Definitional and Interpretive Provisions.................... 9
ARTICLE 2 PURCHASE PRICE; ESCROW AGREEMENT...................................... 10
2.1 Sale and Purchase of the Offered Shares........................... 10
2.2 Escrow Agreement.................................................. 10
2.3 Adjustment of Time Periods........................................ 10
2.4 BYSSA Participation; Determination of Minimum Percentage.......... 10
ARTICLE 3 PURCHASE AND SALE PROCEDURES.......................................... 11
3.1 OPA Procedures.................................................... 11
3.2 Restriction on Future Tender Offers............................... 11
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER....................... 12
4.1 Organization and Standing......................................... 12
4.2 Authority; Enforceability......................................... 12
4.3 Non-Contravention................................................. 12
4.4 Consents and Approvals............................................ 12
4.5 Brokers........................................................... 13
4.6 Financial Capacity; Solvency...................................... 13
4.7 Litigation........................................................ 13
4.8 Information....................................................... 13
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE MAJORITY SHAREHOLDERS........... 14
5.1 Existence......................................................... 14
5.2 Ownership of Shares............................................... 14
5.3 Authority; Enforceability......................................... 14
5.4 Non-Contravention................................................. 14
5.5 Consents and Approvals............................................ 15
5.6 Brokers........................................................... 15
5.7 Litigation........................................................ 15
ARTICLE 6 REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COMPANY............ 15
6.1 Organization and Standing......................................... 15
6.2 Authority to do Business.......................................... 15
6.3 Authority; Enforceability......................................... 16
6.4 Charter Documents................................................. 16
6.5 Investments in Other Persons...................................... 16
6.6 Capitalization of the Company..................................... 16
6.7 Rights; Warrants or Options; Dividends............................ 17
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6.8 Non-Contravention................................................. 17
6.9 Consents and Approvals............................................ 18
6.10 Financial Statements.............................................. 18
6.11 No Material Adverse Change; Conduct of Business................... 18
6.12 Undisclosed Liabilities........................................... 18
6.13 Disclosed Data.................................................... 19
6.14 Tangible Personal Property........................................ 19
6.15 Real Property..................................................... 19
6.16 Condition of Assets............................................... 20
6.17 Insurance......................................................... 20
6.18 Labor Relations................................................... 20
6.19 Permits........................................................... 20
6.20 Compliance With Laws.............................................. 20
6.21 Litigation........................................................ 21
6.22 List of Accounts.................................................. 21
6.23 List of Personnel................................................. 21
6.24 Employee Benefit Plans............................................ 21
6.25 Tax Matters....................................................... 23
6.26 Environmental Matters............................................. 23
6.27 Intellectual Property............................................. 24
6.28 Transactions With Affiliates...................................... 25
6.29 Powers of Attorney................................................ 25
6.30 Material Contracts................................................ 25
6.31 No Immunity....................................................... 26
6.32 Improper Payments; etc............................................ 27
6.33 Accounting Controls............................................... 27
6.34 Risk Management; Allowance for Loan Losses........................ 27
6.35 Sufficiency of Assets............................................. 27
6.36 Brokers........................................................... 27
6.37 Books and Records................................................. 27
ARTICLE 7 PRE-CLOSING COVENANTS................................................. 28
7.1 Conduct of Business............................................... 28
7.2 Pre-Closing Activities............................................ 28
7.3 Efforts to Consummate............................................. 29
7.4 Confidentiality; Access........................................... 30
7.5 No Proxies for or Encumbrances on Shares; Voting.................. 30
ARTICLE 8 CONDITIONS TO THE OPA................................................. 31
8.1 Conditions to the Purchaser's Obligations......................... 31
8.2 Conditions to Obligations of the Majority Shareholders............ 32
ARTICLE 9 CONDITIONS TO CLOSING................................................. 33
9.1 Conditions to the Purchaser's Obligations......................... 33
ARTICLE 10 OTHER AGREEMENTS..................................................... 33
10.1 Further Assurances................................................ 33
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10.2 Transitional Activities........................................... 33
10.3 Publicity......................................................... 34
10.4 Litigation Support................................................ 34
10.5 No Additional Representations..................................... 34
10.6 Disclaimer Regarding Estimates and Projections.................... 34
10.7 Director and Officer Liability and Indemnification................ 34
10.8 No Solicitation................................................... 35
10.9 Third Party Consents.............................................. 35
10.10 Dealing with Certain Authorities.................................. 35
10.11 Non-Competition and Non-Solicitation.............................. 36
ARTICLE 11 SURVIVAL OF REPRESENTATIONS AND WARRANTIES........................... 38
11.1 Survival of Representations and Warranties........................ 38
ARTICLE 12 TERMINATION.......................................................... 38
12.1 Termination....................................................... 38
12.2 Effect of Termination............................................. 39
ARTICLE 13 MAJORITY SHAREHOLDER REPRESENTATIVES................................. 39
13.1 Appointment....................................................... 39
13.2 Reliance by Majority Shareholders' Representative................. 39
13.3 Expenses of Majority Shareholders' Representative................. 40
13.4 Indemnification................................................... 40
ARTICLE 14 MISCELLANEOUS........................................................ 40
14.1 Notices........................................................... 40
14.2 Entire Agreement.................................................. 41
14.3 Benefits; Binding Effect; Assignment.............................. 41
14.4 Waiver............................................................ 42
14.5 No Third Party Beneficiaries...................................... 42
14.6 Severability...................................................... 42
14.7 Expenses.......................................................... 42
14.8 Section Headings.................................................. 42
14.9 Counterparts; Facsimile Signature................................. 42
14.10 Litigation; Prevailing Party...................................... 42
14.11 Specific Performance.............................................. 43
14.12 Governing Law; Jurisdiction; Waiver of Jury Trial................. 43
14.13 Jurisdiction, Etc................................................. 43
14.14 Construction...................................................... 44
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EXHIBITS
EXHIBIT A Ownership/Percentage Ownership of Majority Shareholders
EXHIBIT B Escrow Agreement Terms
SCHEDULES
Schedule 4.4 Purchaser Consents
Schedule 5.5 Majority Shareholders' Consents
Schedule 6.2 Foreign Qualifications
Schedule 6.5 Investments in Other Persons
Schedule 6.6 Capitalization of the Company
Schedule 6.7 Rights; Warrants or Options; Dividends
Schedule 6.9 Company Consents
Schedule 6.10 Financial Statements
Schedule 6.12 Undisclosed Liabilities
Schedule 6.15 Real Property
Schedule 6.17 Insurance
Schedule 6.18 Labor Relations
Schedule 6.19 Permits
Schedule 6.21 Litigation
Schedule 6.22 List of Accounts
Schedule 6.23 List of Personnel
Schedule 6.24 Employee Benefit Plans
Schedule 6.25 Tax Matters
Schedule 6.27 Intellectual Property
Schedule 6.28 Transactions With Affiliates
Schedule 6.29 Powers of Attorney
Schedule 6.30 Material Contracts
Schedule 10.11.1 Designated Shareholders
Schedule 10.11.2 Restricted Business Exceptions
Schedule 13.1 Majority Shareholders' Representatives
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MASTER STOCK PURCHASE AGREEMENT
This Master Stock Purchase Agreement is made and entered into as of
December 22, 2006, by and among Bancolombia (Panama) S.A., a sociedad anonima
organized and existing under the laws of Panama (the "Purchaser"), each of the
shareholders of Banagricola, S.A., a sociedad anonima organized and existing
under the laws of Panama (the "Company") listed on Exhibit A hereto (the
"Majority Shareholders"), and any shareholders of the Company who execute and
deliver to the Purchaser a Joinder Agreement following the date hereof.
PRELIMINARY STATEMENTS:
A. The Majority Shareholders own 9,979,215 shares of capital stock of the
Company, which shares represent 52.90%, on a fully-diluted basis, of the issued
and outstanding capital stock of the Company.
B. The Majority Shareholders propose to sell to the Purchaser, and the
Purchaser proposes to purchase from the Majority Shareholders, fully paid-in
Shares of the Company that will represent at least 52.90%, on a fully-diluted
basis, of the Shares (as defined below) on a fully-diluted basis (the "Minimum
Percentage").
C. The Purchaser will effectuate public tender offers in El Salvador and in
Panama (collectively, the "OPA") in accordance with Article 3 herein, whereby
the Purchaser will offer to purchase the Shares (as defined below) from the
Majority Shareholders and the Minority Shareholders (as defined below) desiring
to sell their Shares subject to the terms and conditions of this Agreement. The
Purchaser shall have no obligation to purchase any shares of the Subsidiaries
not held by the Company.
AGREEMENT:
In consideration of the premises and the respective mutual agreements,
covenants, representations and warranties contained herein, the parties hereto
agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Defined Terms. In addition to terms defined elsewhere in this
Agreement, the following terms when utilized in this Agreement, unless the
context otherwise requires, shall have the meanings indicated below, which
meanings shall be equally applicable to both the singular and plural forms of
such terms:
"Accounting Standards" means the accounting standards as determined from
time to time by the Salvadoran Superintendence, and, to the extent a matter is
not covered by such principles, in accordance with GAAP.
"Acquisition Proposal" means any proposal or offer (whether or not in
writing and whether or not legally binding) for a merger, consolidation,
purchase of assets, tender offer or other business combination involving the
Company or any Subsidiary or any proposal or offer to acquire in any manner,
directly or indirectly, an equity interest in, any voting securities of, or a
substantial portion of the assets of the Company or any Subsidiary, other than
in furtherance of the transactions contemplated by this Agreement and the other
Transaction Documents.
"Affiliate" means, with respect to any person, any other person that,
directly or indirectly, through one or more intermediaries, controls the subject
person or any person that is controlled by or is under common control with such
person. For purposes of this definition, "control" (including the correlative
terms "controlling," "controlled by" and "under common control with"), with
respect to any person, means possession, directly or indirectly, of the power to
vote more than fifty percent (50%) of the Voting Stock of such person or cause
the direction of the management and policies of such person, whether through the
ownership of Voting Stock or by contract or otherwise.
"Agreement" means this Master Stock Purchase Agreement.
"Authority" means, with respect to any person, any governmental, regulatory
or administrative body, agency, commission, bureau, authority, court or
arbitration tribunal, or any foreign governmental regulatory agency, commission,
bureau, authority, court or arbitration tribunal having jurisdiction over the
property or business of Company or any of the Subsidiaries, including, the U.S.
Regulators, the Salvadoran Authorities, the Panamanian Superintendence, the
Panamanian Securities Regulator and the Salvadoran Securities Regulator.
"Bank" means Banco Agricola, S.A., a financial institution organized and
existing under the laws of El Salvador, a Subsidiary of the Company.
"Bankruptcy and Equity Exceptions" is defined in Section 4.2.
"Brokerage House" means, collectively, one or more brokerage houses
contracted by the Purchaser (and reasonably acceptable to the Majority
Shareholders) to effectuate the OPA, as contemplated by Article 3 hereof.
"Business Day" means any day other than Saturday, Sunday or a day on which
banks in San Salvador, El Salvador, Panama City, Panama or New York, New York,
U.S.A. are authorized or required by Law to close in any such city.
"BYSSA" means Bienes y Servicios, S.A., a sociedad anonima organized and
existing under the laws of El Salvador, which is also a Majority Shareholder.
"BYSSA Letter of Intent" means that certain letter of intent dated as of
the date hereof regarding the purchase of the issued and outstanding capital
stock of BYSSA.
"Caoba" is defined in Section 5.6.
"Charter Documents" means with respect to any juridical person, such
person's articles or certificate of incorporation, formation or association,
by-laws, limited liability company agreement, partnership agreement or other
constitutive documents.
"Closing" means the completion of the purchase and sale of the Offered
Shares.
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"Closing Date" means the date on which the Closing occurs.
"Code" means the United States Internal Revenue Code of 1986.
"Company" is defined in the Preamble.
"Company Consents" is defined in Section 6.9.
"Confidentiality Agreement" means the Confidentiality Agreement, by and
between the Company and the Purchaser, dated as of October 11, 2006.
"Contract" means, with respect to any person, any agreement, indenture,
undertaking, debt instrument, contract, lease, understanding, arrangement, or
commitment to which such person or any of its subsidiaries is a party or by
which any of them may be bound or to which any of their assets or properties may
be subject, whether or not in writing, and whether express or implied.
"Customer" means, as of any time, any customer or client of the Company or
any Subsidiary.
"Designated Shareholder" is defined in Section 10.11.1.
"Disclosed Data" means (i) the electronic data room containing documents
and materials concerning the businesses and operations of the Company and the
Subsidiaries, (including the written responses to written questions of the
Purchaser), made available to the Purchaser prior to the date hereof, (ii) the
Public Filings of the Company or any Subsidiary, and (iii) the Confidential
Information Package dated October 2006.
"El Salvador" means the Republic of El Salvador.
"Employee Benefit Plans" means all benefit and compensation plans,
contracts, policies or arrangements covering current or former employees of the
Company and its Subsidiaries and current or former directors of the Company,
including pension, retirement, welfare, medical, deferred compensation,
severance, stock option, stock purchase, stock appreciation rights, stock based,
incentive and bonus plans and employment and change in control plans and
agreements.
"Escrow Notice" is defined in Section 2.2.
"Environmental Costs" means any and all costs and expenditures, in
connection with investigating, defending, remediating or otherwise responding to
any Release of Hazardous Materials, any violation or alleged violation of
Environmental Laws, any fees, fines, penalties or charges associated with any
authorizations from any Authority, or any actions necessary to comply with any
Environmental Laws.
"Environmental Law" means any and all Laws and authorizations applicable to
the Company or any Subsidiary relating to the regulation of pollution or
protection of human health, safety or the environment.
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"Equity Compensation Awards" is defined in Section 6.7.1.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"Financial Statement Date" means December 31, 2005.
"Financial Statements" is defined in Section 6.10.
"GAAP" means generally accepted accounting principles as in effect in El
Salvador.
"GS" is defined in Section 5.6.
"Hazardous Materials" means any dangerous, toxic or hazardous pollutant,
contaminant, chemical, waste, material or substance as defined in or governed by
any Law relating to such substance or otherwise relating to the environment or
human health or safety, including without limitation any waste, material,
substance, pollutant or contaminant that might cause any Liability under any
Environmental Law.
"Immediate Family Member" means, with respect to any Designated
Shareholder, each parent, spouse or child (including those adopted) of such
Designated Shareholder but excluding any parent, spouse or child that is not
under the control of such Designated Shareholder, with whom such Designated
Shareholder is not acting in concert to acquire or own any equity or voting
securities in a Restricted Business, or with respect to whom such Designated
Shareholder does not have actual knowledge of such ownership interest in a
Restricted Business.
"Intellectual Property" is defined in Section 6.27.1.
"Intellectual Property Rights" means (i) rights in trademarks, service
marks, and trade names, registered or unregistered, (ii) rights in copyrightable
subject matter or protectable designs, registered or unregistered, (iii) trade
secrets, (iv) rights in Internet domain names, uniform resource locators and
e-mail addresses, (v) know-how and (vi) all other intellectual and industrial
property rights of every kind and nature and however designated, whether arising
by operation of Law, contract, license or otherwise.
"Initial Shares" means the total number of Shares equal to the Minimum
Percentage.
"Joinder Agreement" means documentation in such form as is mutually
agreeable to the parties hereto for the joinder of persons as parties to this
Agreement.
"Knowledge of the Purchaser" means (i) the actual personal knowledge of
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and (ii) the knowledge that
any such person referenced in (i), as a prudent business person holding such
position or having such responsibilities, would have obtained in the conduct of
his or her duties.
"Knowledge of the Shareholders" means (i) the actual personal knowledge of
(A) each member of the board of directors of the Company and (B) the executive
officers of the Company, department heads and other principal persons, and (ii)
the knowledge that any such person
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referenced in (i), as a prudent business person holding such position or having
such responsibilities, would have obtained in the conduct of his or her duties.
"Law" means any law, statute, rule or regulation, and any judgment, order
or decree of any Authority.
"Liability" means any direct or indirect indebtedness, liability, claim,
loss, damage, deficiency, obligation or responsibility fixed or unfixed, ▇▇▇▇▇▇
or inchoate, liquidated or unliquidated, secured or unsecured, accrued,
absolute, contingent or otherwise, whether or not of a nature required to be
reflected or reserved against in the Financial Statements of such entities or
the notes thereto in accordance with the Accounting Standards.
"Lien" means any lien, charge, claim, community property interest,
equitable interest, lien, option, pledge, security interest, right of first
refusal, restriction, encumbrance or pledge of any kind whatsoever, including
any restriction on use, voting, transfer, receipt of income, or exercise of any
other attribute of ownership. "Listed Intellectual Property" is defined in
Section 6.27.1.
"Litigation" means any civil, criminal, regulatory, administrative,
investigative or informal actions, audits, demands, suits, claims, arbitrations,
hearings, litigations, disputes, investigations or other similar proceedings.
"Loans" shall mean all loans, notes, extensions of credit, leases,
guaranties, loan commitments, credit enhancements and similar borrowing
arrangements issued on behalf of any person by the Company or any Subsidiary or
pursuant to any such entity's other credit-related operations (operaciones
activas y neutras).
"Losses" means all damages, costs, obligations, liabilities, losses,
expenses, and fees (including court costs and reasonable attorneys' fees and
expenses) that the subject person may sustain.
"Majority Shareholders" is defined in the Preamble and shall include any
Shareholder who executes and delivers a Joinder Agreement to the Purchaser.
"Majority Shareholders' Consents" is defined in Section 5.5.
"Material Adverse Change" means any change or effect that is or would
reasonably be expected to have a Material Adverse Effect.
"Material Adverse Effect" means any change or effect that is materially
adverse to the business, results of operations or financial condition of the
Company and the Subsidiaries, taken as a whole.
"Material Contract" is defined in Section 6.30.
"Minimum Percentage" is defined in the Recitals.
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"Minority Shareholders" means, as of any date, the shareholders of the
Company other than the Majority Shareholders.
"Offered Shares" is defined in Section 2.1.
"OPA" is defined in the Recitals.
"OPA Commencement Date" is defined in Section 3.1.2.
"OPA Consideration" means any credit support (whether cash, stand-by letter
of credit or otherwise) or other form of credit support as is customarily
required by a Brokerage House or under applicable Law in connection with a
tender offer in Panama or El Salvador.
"OPA Documents" shall mean the informational documents related to the OPA.
"OPA Escrow Agent" means the financial institution acting as escrow agent
under the OPA Escrow Agreement.
"OPA Escrow Agreement" means the escrow agreement by and among the
Purchaser, the OPA Escrow Agent and the Majority Shareholders substantially in
the form attached hereto as Exhibit B.
"OPA Termination Date" means the date on which the OPA terminates.
"Ordinary Course of Business" means the ordinary course of business
consistent with the past custom and practice of the Company and/or the
Subsidiaries in the operation of their respective businesses.
"Owned Intellectual Property Rights" means Intellectual Property Rights
owned by the Company or any Subsidiary.
"Panama" means the Republic of Panama.
"Panamanian Securities Regulator" means the Comision Nacional de Valores de
la Republia de Panama.
"Panamanian Stock Exchange" means Bolsa de Valores de Panama.
"Panamanian Superintendence" means the Superintendencia de Bancos de
Panama.
"Percentage Ownership" means the percentage ownership in the Company of
each Majority Shareholder as set forth on Exhibit A.
"Permits" means all licenses, permits, orders, approvals, registrations,
authorizations, and qualification filings with all Authorities required under
applicable Law in connection with the operation of the business of the Company
or any Subsidiary, as applicable.
"Permitted Expenses" is defined in Section 14.7.
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"Permitted Liens" means (i) Liens for taxes not yet due and payable or
being contested in good faith by appropriate proceedings, (ii) easements,
covenants, conditions and restrictions of record, (iii) easements, covenants,
conditions and restrictions not of record as to which no material violation or
encroachment exists or, if such violation or encroachment exists, as to which
the cure of such violation or encroachment would not materially interfere with
the conduct of the business of the Company or any Subsidiary, (iv) any zoning or
other governmentally established restrictions or encumbrances, (v) workers' or
unemployment compensation Liens arising in the Ordinary Course of Business, (vi)
mechanic's, materialman's, supplier's, vendor's or similar Liens arising in the
Ordinary Course of Business securing amounts that are not delinquent, (vii)
utility, slope and drainage easements, right-of-way easements and leases
regarding signs, and (viii) other immaterial imperfections of title, easements,
covenants, conditions, restrictions or Liens.
"person" means any natural person, corporation, limited liability company,
unincorporated organization, partnership, association, joint-stock company,
joint venture, trust or government, or any agency or political subdivision of
any government.
"Process Agent" is defined in Section 13.13.1.
"Property" means real property now or previously owned, leased, controlled
or occupied by the Company or any Subsidiary.
"Public Filings" means the reports, notifications, disclosures, and other
filings required to be made by a reporting company under Salvadoran or
Panamanian securities Laws or by the Panamanian Superintendence or the
Salvadoran Superintendence.
"Purchase Price Per Share" means $47.04 per Share.
"Purchase Price" means the Purchase Price Per Share multiplied by the
number of Offered Shares.
"Purchaser" is defined in the Preamble.
"Purchaser Consents" is defined in Section 4.4.
"Real Property" is defined in Section 6.15.1.
"Regulatory Actions" means any Litigation with respect to the Company or
any Subsidiary brought, instigated or threatened by any Authority in connection
with any Environmental Costs, Release of Hazardous Materials or any
Environmental Law.
"Regulatory Reports" is defined in Section 6.20.2.
"Related Person" has the meaning assigned to such term in Article 204 of
the Banking Law of El Salvador as in effect on the date hereof.
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"Release" means the spilling, leaking, disposing, discharging, emitting,
depositing, ejecting, leaching, escaping or any other release or threatened
release, however defined, whether intentional or unintentional, of any Hazardous
Material.
"Restricted Business" is defined in Section 10.11.1.
"Restricted Period" is defined in Section 10.11.1.
"Return" means any return, declaration (including any declaration of
estimated Taxes), report claim for refund or information return or statement
relating to Taxes with respect to any income, assets or properties of the
Company or any Subsidiary, including any schedule or attachment thereto.
"Risk Management Contract" is defined in Section 6.34.1.
"Salvadoran Authorities" means the consent of the Salvadoran
Superintendence and the Superintendencia de Competencia de El Salvador.
"Salvadoran Securities Regulator" means the Superintedencia de Valores de
El Salvador.
"Salvadoran Stock Exchange" means Bolsa de Valores de El Salvador.
"Salvadoran Superintendence" means Superintendencia del Sistema Financiero
de El Salvador.
"Selling Shareholder" means each Shareholder who tenders and does not
withdraw its Offered Shares in the OPA.
"Shareholders" means the holders of the Shares.
"Shares" means the shares of capital stock of the Company and any and all
securities, rights, warrants or options exchangeable for or convertible into any
such Shares, excluding treasury Shares.
"Sellers Representatives" is defined in Section 10.8.
"Stock Exchanges" means the Salvadoran Stock Exchange and the Panamanian
Stock Exchange.
"Subsidiary" means each of the Bank, Banco Agricola Panama, S.A.,
Inversiones Financieras Banco Agricola, S.A. Aseguradora Suiza Salvadorena,
S.A., Asesuisa Vida, S.A., AFP Crecer, S.A., Bursabac, S.A., Credibac, S.A. de
C.V. and Arrendadora Financiera Capital, S.A., and any other person owned
directly or indirectly by any of such persons.
"Tax" means all local and foreign taxes of any kind, including interest,
additions to tax and penalties with respect thereto.
"Taxing Authorities" is defined in Section 6.25.1.
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"Transaction Documents" means any agreements, instruments, certificates and
documents contemplated hereby, including this Agreement, the OPA Escrow
Agreement, the BYSSA Letter of Intent, and the letter agreement between the
Company and the Purchaser, dated as of the date hereof.
"U.S. Regulators" means the California Department of Financial
Institutions, the Board of Governors of the Federal Reserve System, the District
of Columbia Office of Banking and Financial Institutions, the Maryland Division
of Financial Regulation, the Nevada Division of Financial Institutions, the New
Jersey Commissioner of Banking and Insurance, the Banking Commissioner of Texas,
the Virginia Bureau of Financial Institutions and the U.S. Department of the
Treasury.
"Voting Stock" means capital stock issued by a corporation or equivalent
interests in any other person, the holders of which are entitled to vote for the
election of directors (or persons performing similar functions) of such person
(other than stock having such power only upon the happening of a contingency
that has not occurred).
1.2 Other Definitional and Interpretive Provisions.
1.2.1 Unless otherwise defined herein, all terms defined in this
Agreement shall have the same defined meanings when used in any certificate,
report or other document made or delivered pursuant hereto.
1.2.2 As used in this Agreement unless the context otherwise
requires, (i) words in the masculine or neuter gender include the masculine,
feminine and neuter genders, (ii) the words "include", "includes" and
"including" shall be deemed to be followed with the phrase "without limitation",
(iii) the word "will" shall be construed to have the same meaning and effect as
the word "shall", (iv) all references to Exhibits or Schedules refer to exhibits
or schedules delivered herewith or attached hereto (each of which is deemed to
be a part of this Agreement), (v) all references to Sections or Articles refer
to Sections or Articles of this Agreement, (vi) all references to "$" or
"dollars" refer to U.S. dollars, (vii) any amount to be paid in "$" or "dollars"
shall be paid in U.S. dollars, (viii) any definition of or reference to any
agreement, instrument or other document shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (ix) any reference
herein to any person shall be construed to include such person's successors and
assigns, (x) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, and (xi) any report, document, officer's
certificate or any other instrument required to be delivered hereunder which
does not conform to the requirements hereof at the time of delivery shall be
deemed non-conforming and shall not relieve the person delivering such
non-conforming report, document, officer's certificate or instrument from its
obligations to deliver a conforming report, document, officer's certificate or
instrument. Except as expressly stated in this Agreement, all references to any
statute, rule or regulation are to the statute, rule or regulation as amended,
modified, supplemented or replaced from time to time (and, in the case of
statutes, include any rules and regulations promulgated under the statute) and
to any section of any statute, rule or regulation include any successor to the
section.
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1.2.3 The inclusion of any information on any schedule to this
Agreement shall not be deemed to be an admission or acknowledgment by the
Majority Shareholders, in and of themselves, that such information is required
to be listed on such schedule or is material to or outside the Ordinary Course
of Business. Any disclosure made in any schedule to this Agreement shall be
deemed to be disclosed and incorporated by reference in any other schedule to
this Agreement as though fully set forth in such other schedule for which the
applicability of such disclosure is reasonably apparent on the face of such
disclosure that is applicable to such other schedule.
1.2.4 The specification of any U.S. Dollar amount in the
representations and warranties or otherwise in this Agreement or in the
schedules hereto is not intended and shall not be deemed to be an admission or
acknowledgment of the materiality of such amounts or items, nor shall the same
be used in any dispute or controversy between the parties to determine whether
any obligation, item or matter (whether or not described herein or included in
any schedule) is or is not material for purposes of this Agreement.
ARTICLE 2
PURCHASE PRICE; ESCROW AGREEMENT
2.1 Sale and Purchase of the Offered Shares Upon and subject to the terms
and conditions of this Agreement, the Purchaser agrees to purchase, and the
Selling Shareholders agree to sell, in the manner specified in this Agreement,
Shares of the Selling Shareholders tendered in the OPA and not withdrawn (the
"Offered Shares"), free and clear of any Liens, for a price per Share equal to
the Purchase Price Per Share.
2.2 Escrow Agreement. Upon the delivery by the Purchaser of a written
notice to the Majority Shareholders (an "Escrow Notice") regarding the execution
and delivery of the OPA Escrow Agreement, then, not later than fifteen Business
Days prior to the OPA Commencement Date (or at such other date as the Purchaser
and the Majority Shareholders shall determine), the parties hereto shall enter
into the OPA Escrow Agreement and, concurrently with the execution and delivery
thereof, (i) the Majority Shareholders will deposit with the OPA Escrow Agent
the Initial Shares, duly endorsed under applicable Law and free and clear of any
Liens, and (ii) the Purchaser will deliver the OPA Consideration to the OPA
Escrow Agent.
2.3 Adjustment of Time Periods. Notwithstanding anything herein to the
contrary, in the event that (i) the Escrow Agent is required, pursuant to the
terms of the Escrow Agreement, to tender any Offered Shares in the El Salvador
OPA that were initially deposited for tender in the Panamanian OPA and (ii) the
withdrawal of the Shares from the Panamanian OPA would cause the number of
Shares tendered in the OPA to be less than the Minimum Percentage, any time
periods provided in this Agreement (including the length of time to tender
Shares or the time periods contemplated by Sections 3.1 and 12.1.6) shall be
extended by the period of time required for the Escrow Agent to make such
alternative tender, if any.
2.4 BYSSA Participation; Determination of Minimum Percentage. If the
Purchaser (or any of its Affiliates) agrees to acquire the capital stock of
BYSSA in a tender offer process as contemplated by the BYSSA Letter of Intent,
BYSSA shall have no obligation hereunder to, and shall not, tender its Shares in
the OPA. If at that time BYSSA has already deposited its Shares
10
with the Escrow Agent pursuant to an Escrow Notice, such deposit shall be
revocable and such Shares shall be returned by the Escrow Agent. If at that time
BYSSA has not yet deposited its Shares with the Escrow Agent pursuant to an
Escrow Notice, it shall have no obligation to, and shall not, do so. The number
of Shares held by BYSSA shall be included in the Minimum Percentage for purposes
of this Agreement.
ARTICLE 3
PURCHASE AND SALE PROCEDURES
The purchase by the Purchaser of the Offered Shares will be undertaken in
the manner described in this Article 3 in compliance in all material respects
with all applicable Laws:
3.1 OPA Procedures.
3.1.1 The Purchaser shall prepare and compile all documents required
to effectuate the OPA as promptly as practicable and shall present such
documents to the Majority Shareholders for their approval (not to be
unreasonably withheld or delayed).
3.1.2 The Purchaser will effectuate the OPA through the Stock
Exchanges to acquire the Shares at the Purchase Price Per Share. The OPA will be
made to all of the Shareholders of the Company. No later than five (5) Business
Days following the date on which (i) all of the conditions precedent set forth
in Section 8.1 have been satisfied or waived and (ii) the Majority Shareholders
give their written consent, subject to the proviso contained in Section 8.2 (the
"OPA Commencement Date"), the Purchaser shall commence the OPA by presenting to,
and filing with, the Panamanian Securities Regulator and the Salvadoran
Securities Regulator any applications required under applicable Laws to
effectuate the OPA. Terms of the OPA will include, among other things, (i) an
offer by the Purchaser to acquire, in accordance with applicable Law, up to 100%
of the issued and outstanding Shares, and (ii) that the OPA will remain open for
30 days (or such other period as may be agreed upon by the Majority Shareholders
and the Purchaser). The OPA will be made to all Shareholders on equal terms, and
will be subject to the condition that the aggregate number of Offered Shares in
El Salvador and Panama constitute at least the Minimum Percentage. The Purchaser
shall proceed with the OPA in accordance with applicable Law and the OPA
Documents (which shall require the tendering by the Majority Shareholders of the
Minimum Percentage, except as provided in Section 2.3). The Purchaser expressly
reserves the right to waive any of the conditions to the OPA and to make any
change in the terms of, or conditions to, the OPA; provided that, except with
the prior written consent of the Majority Shareholders, the Purchaser will not
decrease the Purchase Price Per Share, change the form of consideration to be
paid, decrease the number of Shares sought in the OPA, or impose conditions to
the OPA in addition to those set forth herein. To the fullest extent permitted
under applicable Law, except as provided in Section 2.3, the OPA Documents shall
provide that Offered Shares tendered in the OPA to be settled on the Stock
Exchanges may not be withdrawn, and notwithstanding provisions of applicable Law
to the contrary, each Majority Shareholder hereby agrees not to withdraw any
such Offered Shares.
3.2 Restriction on Future Tender Offers. The Purchaser and its Affiliates
shall not, prior to the second anniversary of the Closing Date, effectuate any
public tender offer to acquire
11
Shares for a purchase price that is greater than the Purchase Price Per Share
without the prior written consent of the Majority Shareholders.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
In order to induce the Majority Shareholders to enter into this Agreement
and to consummate the transactions contemplated hereby, the Purchaser hereby
represents and warrants to the Majority Shareholders as of the date hereof as
follows:
4.1 Organization and Standing. The Purchaser is a sociedad anonima duly
organized, validly existing and in good standing under the laws of Panama.
4.2 Authority; Enforceability. The Purchaser has all requisite power and
authority to execute and deliver this Agreement and the other Transaction
Documents to which it is a party, to perform its obligations under this
Agreement and each such Transaction Document, and to consummate the transactions
contemplated by this Agreement and each such Transaction Document. The
execution, delivery and performance by the Purchaser of this Agreement and each
Transaction Document to which it is a party and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary action on the part of the Purchaser. This Agreement
and each Transaction Document to which the Purchaser is a party is, or upon its
execution and delivery will be, a valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, except to the
extent enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of creditors'
rights generally and by general equitable principles (the "Bankruptcy and Equity
Exceptions").
4.3 Non-Contravention. Neither the execution, delivery or performance by
the Purchaser of this Agreement or any Transaction Document to which it is a
party, nor the consummation by the Purchaser of the transactions contemplated
hereby or thereby, nor compliance by the Purchaser with any of the provisions
hereof or thereof will (i) contravene, conflict with or violate any provision of
the Charter Documents of the Purchaser, (ii) contravene, conflict with or
violate any Law, judgment, order, writ, injunction or decree of any Authority,
in each case applicable to the Purchaser or its assets or properties, or (iii)
with or without the passage of time or the giving of notice or both, result in
the breach of, or constitute a default or require any consent under, result in a
change in the rights or obligations of any party under, result in a right of
termination or acceleration, or result in the creation of any Lien upon any
property or assets of the Purchaser pursuant to, any Contract to which the
Purchaser is a party or by which the Purchaser or its properties may be bound or
affected, except in each case where the contravention, violation, conflict,
breach, default, termination or acceleration would not have a material adverse
effect on the ability of the Purchaser to consummate the transactions
contemplated by this Agreement and the other Transaction Documents.
4.4 Consents and Approvals. Except as set forth on Schedule 4.4, which
includes all Permits, approvals and consents necessary to effectuate the
transactions contemplated hereby from the Panamanian Superintendence, the
Salvadoran Authorities and the U.S. Regulators (the "Purchaser Consents"), no
filing with, and no permit, authorization, consent or approval of any
12
Authority or any other person is necessary for the execution of this Agreement
or the consummation by the Purchaser of the transactions contemplated hereby.
The Purchaser is aware of all requirements necessary to obtain the Purchaser
Consents and, to the Knowledge of the Purchaser, there is no fact, circumstance
or condition that could prevent or materially delay the receipt of any Purchaser
Consent.
4.5 Brokers. Except for the Purchaser's engagement of UBS AG, the Purchaser
has not employed any broker or finder and has not incurred and will not incur
any broker's, finder's or similar fees, commissions or expenses payable by the
Selling Shareholders, the Company or the Subsidiaries in connection with the
transactions contemplated by this Agreement (other than those paid or payable
solely by the Purchaser).
4.6 Financial Capacity; Solvency.
The Purchaser and its Affiliates, taken together, have sufficient liquid
assets available in an aggregate amount sufficient to pay all of the
consideration payable to the Selling Shareholders as required by this Agreement,
and to make all other necessary payments in connection with the purchase of the
Offered Shares including the payment of all of its related fees and expenses.
Immediately after giving effect to the transactions contemplated hereby, the
Purchaser will not (i) be insolvent (either because its financial condition is
such that the sum of its debts is greater than the fair value of its assets or
because the fair salable value of its assets is less than the amount required to
pay its probable liability on its existing debts as they mature), (ii) have
unreasonably small capital with which to engage in its business, or (iii) have
incurred debts beyond its ability to pay as they become due.
4.7 Litigation. There is no Litigation pending or, to the Knowledge of the
Purchaser, threatened against or involving the Purchaser or any of its assets or
properties by or before any Authority that questions the validity of this
Agreement or seeks to prohibit, enjoin or otherwise challenge the consummation
of the transactions contemplated hereby. There are no outstanding orders,
judgments, injunctions, stipulations, awards or decrees of any Authority against
the Purchaser or any of its assets or properties which prohibit or enjoin the
consummation of the transactions contemplated hereby.
4.8 Information. The Purchaser has conducted its own independent
investigation, review and analysis of the business, operations, assets,
liabilities, results of operations, financial condition, and prospects of the
Company and the Subsidiaries based exclusively on a review of the Disclosed Data
and interviews and discussions with management concerning the business and
operations of the Company and the Subsidiaries, which investigation, review and
analysis was done by the Purchaser and its Affiliates and, to the extent the
Purchaser deemed appropriate, by the Purchaser's financial, legal and other
advisors. The Purchaser acknowledges that it has been (i) provided with adequate
access to the key personnel, properties, premises and records of the Company and
its Subsidiaries, (ii) afforded the opportunity to ask questions and receive
answers concerning the Company and the Subsidiaries and (iii) able to obtain
additional information that it has requested to verify the accuracy of the
information contained herein.
13
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
OF THE MAJORITY SHAREHOLDERS
In order to induce the Purchaser to enter into this Agreement, and to
consummate the transactions contemplated hereby, each Majority Shareholder,
severally and not jointly, represents and warrants to the Purchaser as follows:
5.1 Existence. If such Majority Shareholder is a corporation, partnership,
trust or other entity, such Majority Shareholder is duly organized, validly
existing and, where relevant, in good standing under the laws of its
jurisdiction of organization.
5.2 Ownership of Shares. Such Majority Shareholder is the lawful owner of
the Shares set forth opposite such Majority Shareholder's name in Exhibit A,
free and clear of any Lien (including any restriction on the right to vote, sell
or otherwise dispose of such Shares). Such Majority Shareholder will be the
lawful owner of all such Shares at all times up to and including the Closing
Date and, by tendering such Shares pursuant to the OPA, shall transfer and
deliver to the Purchaser valid title to such Shares free and clear of any Lien
and any such limitation or restriction (other than any Lien created under this
Agreement or the other Transaction Documents). Such Majority Shareholder has not
granted to any person any option or other right to acquire any of its Shares.
The Shares, in the aggregate, owned by the Majority Shareholders constitute as
of the date hereof, and will constitute at all times from the date hereof up to
and including the Closing Date, at least the Minimum Percentage.
5.3 Authority; Enforceability. Such Majority Shareholder has all requisite
power and authority, and all requisite legal capacity, to execute and deliver
this Agreement and the other Transaction Documents to which it is a party, to
perform its obligations under this Agreement and each such Transaction Document,
and to consummate the transactions contemplated by this Agreement and each such
Transaction Document. The execution, delivery and performance by such Majority
Shareholder of this Agreement and each Transaction Document to which it is a
party and the consummation of the transactions contemplated hereby and thereby
has been duly and validly authorized by all necessary action on the part of such
Majority Shareholder. This Agreement and each Transaction Document to which such
Majority Shareholder is a party is, or upon its execution and delivery will be,
a valid and binding obligation of such Majority Shareholder, enforceable against
it in accordance with its terms, except to the extent enforceability may be
limited by the Bankruptcy and Equity Exceptions.
5.4 Non-Contravention. Neither the execution, delivery or performance by
such Majority Shareholder of this Agreement or any Transaction Document to which
it is a party, nor the consummation by such Majority Shareholder of the
transactions contemplated hereby or thereby, nor compliance by such Majority
Shareholder with any of the provisions hereof or thereof will (i) contravene,
conflict with or violate any provision of the Charter Documents of such Majority
Shareholder, if applicable, (ii) contravene, conflict with or violate any Law,
judgment, order, writ, injunction or decree of any Authority, in each case
applicable to such Majority Shareholder or such Majority Shareholder's assets or
properties, or (iii) with or without the passage of time or the giving of notice
or both, result in the breach of, or constitute a default or require any consent
under, result in a change in the rights or obligations of any party under,
14
result in a right of termination or acceleration, or result in the creation of
any Lien upon any property or assets of such Majority Shareholder pursuant to,
any Contract to which such Majority Shareholder is a party or by which such
Majority Shareholder or such Majority Shareholder's properties may be bound or
affected, except in each case where the contravention, violation, conflict,
breach, default, termination or acceleration would not have a material adverse
effect on the ability of such Majority Shareholder to consummate the
transactions contemplated by this Agreement and the other Transaction Documents.
5.5 Consents and Approvals. Except as set forth on Schedule 5.5, which
contains all Permits, approvals and consents necessary for the Majority
Shareholders to effectuate the transactions contemplated hereby from the
Panamanian Superintendence, the Salvadoran Authorities and the U.S. Regulators
(the "Majority Shareholders' Consents"), no filing with, and no permit,
authorization, consent or approval of any Authority or any other person is
necessary for the execution of this Agreement or the consummation by such
Majority Shareholder of the transactions contemplated hereby. Such Majority
Shareholder is aware of all requirements necessary to obtain the Majority
Shareholders' Consents applicable to such Majority Shareholder and, to the
Knowledge of the Shareholders, there is no fact, circumstance or condition that
could prevent or materially delay the receipt of any Majority Shareholders'
Consent.
5.6 Brokers. Except for the Company's engagement of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
("GS") and Caoba Capital ("Caoba") and for any transaction fee payable to GS or
Caoba by the Company in connection therewith, such Majority Shareholder has not
employed any broker or finder and has not incurred and will not incur any
broker's, finder's or similar fees, commissions or expenses payable by the
Purchaser, the Company or any of the Subsidiaries in connection with the
transactions contemplated by this Agreement.
5.7 Litigation. There is no Litigation pending or, to the Knowledge of the
Shareholders, threatened against or involving the Majority Shareholders or any
of their assets or properties by or before any Authority that questions the
validity of this Agreement or seeks to prohibit, enjoin or otherwise challenge
the consummation of the transactions contemplated hereby. There are no
outstanding orders, judgments, injunctions, stipulations, awards or decrees of
any Authority against any of the Majority Shareholders or any of their assets or
properties which prohibit or enjoin the consummation of the transactions
contemplated hereby.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
WITH RESPECT TO THE COMPANY
In order to induce the Purchaser to enter into this Agreement, and to
consummate the transactions contemplated hereby, each Majority Shareholder,
severally and not jointly, represents and warrants to the Purchaser as follows:
6.1 Organization and Standing. The Company and each Subsidiary is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization.
6.2 Authority to do Business. The Company and each of the Subsidiaries have
all requisite power and authority to own, lease and operate their respective
properties and to conduct
15
their respective businesses in the manner now conducted. The Company and each of
the Subsidiaries are duly licensed or qualified to do business as a foreign
entity and are in good standing in each jurisdiction in which the nature of
their property and assets or the conduct of their respective businesses requires
them to be so licensed or qualified, except where the failure to be in good
standing or to be duly licensed or qualified to do business would not,
individually or in the aggregate, have a Material Adverse Effect. Schedule 6.2
sets forth a list of each jurisdiction in which the Company and each of the
Subsidiaries are licensed or qualified to do business as a foreign entity.
6.3 Authority; Enforceability. The Company has all requisite power and
authority to execute and deliver this Agreement and the other Transaction
Documents to which it is a party, to perform its obligations under this
Agreement and each such Transaction Document, and to consummate the transactions
contemplated by this Agreement and each such Transaction Document. The
execution, delivery and performance by the Company of this Agreement and each
Transaction Document to which it is a party and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary action on the part of the Company. This Agreement
and each Transaction Document to which the Company is a party is, or upon its
execution and delivery will be, a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except to the
extent enforceability may be limited by the Bankruptcy and Equity Exceptions.
6.4 Charter Documents. Copies of the Charter Documents of the Company and
each Subsidiary as in effect on the date hereof have been delivered to the
Purchaser and are complete and correct as of the date hereof.
6.5 Investments in Other Persons. Except as set forth on Schedule 6.5,
neither the Company nor any of the Subsidiaries has any direct or indirect
equity, profit or voting interest in any other person.
6.6 Capitalization of the Company.
6.6.1 The Company's authorized, issued and outstanding capital stock
is set forth on Schedule 6.6 hereof. All of the issued and outstanding Shares
(i) are duly authorized, validly issued, fully paid and non-assessable, and (ii)
were not issued in violation of the preemptive rights of any person or any
Contract or Law by which the Company at the time of issuance was bound.
6.6.2 All of the issued and outstanding shares of capital stock of
each of the Subsidiaries (i) are duly authorized, validly issued, fully paid and
non-assessable, and the Company directly or through a Subsidiary owns, free and
clear of any Lien, the equity interests of such Subsidiaries (and the percentage
ownership thereof) as set forth on Schedule 6.6 and (ii) were not issued in
violation of the preemptive rights of any person or any Contract or Law by which
such Subsidiary at the time of issuance was bound.
6.6.3 None of the issued and outstanding Shares are owned by the
Company or any Subsidiary, except for Shares held by restricted option plans and
pension plans controlled or managed by the Company or any of its Subsidiaries
and Shares held of record by Bursabac,
16
S.A. To the knowledge of the Shareholders based upon a review of the addresses
of Shareholders on the stock registry of the Company, U.S. persons do not hold
more than 5.0% of the Shares.
6.7 Rights; Warrants or Options; Dividends.
6.7.1 Except as set forth on Schedule 6.7, (i) there are no
outstanding subscriptions, warrants, options or, except for this Agreement,
other agreements or rights of any kind to purchase or otherwise receive or be
issued, or securities or obligations of any kind convertible into, any shares of
capital stock or any other security of any Subsidiary or the Company, (ii) there
is no Contract of the Company or any Subsidiary or, to the Knowledge of the
Shareholders, any other person to purchase, redeem or otherwise acquire any
outstanding shares of the capital stock of the Company or any Subsidiary, or
securities or obligations of any kind convertible into any shares of the capital
stock of the Company or any Subsidiary (other than this Agreement), (iii) there
are no dividends which have accrued or have been declared but are unpaid on the
capital stock of the Company or any Subsidiary, and (iv) there are no
outstanding or authorized stock appreciation, phantom stock, stock plans, stock
option, or similar rights with respect to the Company or any Subsidiary (the
"Equity Compensation Awards"). The Company and the Subsidiaries do not have
outstanding any bonds, debentures, notes or other obligations, the holders of
which have the right to vote (or which are convertible into or exercisable for
securities having the right to vote) with the shareholders of the Company or any
Subsidiary on any matter. There are no voting trusts, proxies, or other
agreements or understandings with respect to the voting of the Shares or any
capital stock of any Subsidiary. There are no outstanding obligations of the
Company or any Subsidiary to repurchase, redeem or otherwise acquire any
securities of the Company or any Subsidiary.
6.7.2 With respect to each Equity Compensation Award, Schedule 6.7
contains a correct and complete list of the holder, date of grant, number of
Shares, vesting schedule and, where applicable, exercise price. Each Equity
Compensation Award (i) was granted in compliance with all applicable Laws and
all of the terms and conditions of the stock plans pursuant to which it was
issued, (ii) with respect to options, has an exercise price per Share equal to
or greater than the fair market value of a Share at the close of business on the
date of such grant, (iii) has a grant date identical to the date on which the
Company's board of directors or compensation committee actually awarded such
Company option, and (iv) qualifies for the tax and accounting treatment afforded
to such Company option in the Company's tax returns and the Financial
Statements, respectively.
6.8 Non-Contravention. Neither the execution, delivery or performance
by the Company of this Agreement or any other Transaction Document to which it
is a party, nor the consummation by the Company of the transactions contemplated
hereby or thereby, nor compliance by the Company with any of the provisions
hereof or thereof will (i) contravene, conflict with or violate any provision of
the Charter Documents of the Company, (ii) contravene, conflict with or violate
any Law, judgment, order, writ, injunction or decree of any Authority applicable
to the Company or its assets or properties, or (iii) with or without the passage
of time or the giving of notice or both, result in the breach of, or constitute
a default or require any consent under, result in a change in the rights or
obligations of any party under, result in a right of termination or
acceleration, or result in the creation of any Lien upon any property or assets
of
17
the Company pursuant to, any Contract to which the Company is a party or by
which such the Company or its properties may be bound or affected, except in
each case where the contravention, violation, conflict, breach, default,
termination or acceleration would not have a material adverse effect on the
ability of the Company to consummate the transactions contemplated by this
Agreement and the other Transaction Documents.
6.9 Consents and Approvals. Except as set forth on Schedule 6.9,
which contains all Permits, approvals and consents necessary to effectuate the
transactions contemplated hereby from the Panamanian Superintendence, the
Salvadoran Authorities and the U.S. Regulators (the "Company Consents"), no
filing with, and no permit, authorization, consent or approval of any Authority
or any other person is necessary for the execution of this Agreement or the
consummation by the Company of the transactions contemplated hereby. The Company
is aware of all requirements necessary to obtain the Company Consents and, to
the Knowledge of the Shareholders, there is no fact, circumstance or condition
that could prevent or materially delay the receipt of any Company Consent.
6.10 Financial Statements. Schedule 6.10 sets forth (i) the audited
consolidated balance sheets of the Company and the Subsidiaries for the years
ended December 31, 2003, December 31, 2004 and December 31, 2005, and the
related statements of income, stockholders' equity and cash flow for the twelve
months then ended together with the notes and schedules related thereto and (ii)
the unaudited consolidated balance sheets of the Company and the Subsidiaries at
October 31, 2006 and the related statements of income, stockholders' equity and
cash flows for the ten months then ended together with all related notes and
schedules thereto (collectively, the "Financial Statements") (x) present fairly
the consolidated financial condition and results of operations, changes in
shareholders' equity and cash flows of the Company and the Subsidiaries as of
their respective dates of, and for, the periods referred to in , such Financial
Statements, (y) have been prepared in compliance in all material respects with
the disclosure requirements under Salvadoran securities Laws and in accordance
with the Accounting Standards consistently applied during the periods presented,
and (z) are derived from the Company's and the Subsidiaries' books and records.
6.11 No Material Adverse Change; Conduct of Business. Since the Financial
Statement Date, (i) the Company and the Subsidiaries have conducted their
respective businesses in the Ordinary Course of Business and consistent with
Section 7.2 (as if that Section were applied since the Financial Statement
Date), and (ii) there has not been any change or event that, individually or in
the aggregate, has or would be reasonably expected to have a Material Adverse
Change.
6.12 Undisclosed Liabilities. Except as set forth on Schedule 6.12, neither
the Company nor any Subsidiary has any Liability, nor to the Knowledge of the
Shareholders, are there any facts that could give rise to any Liability, except
for (i) Liabilities reflected or reserved against in the Company's balance sheet
at December 31, 2005, and (ii) current Liabilities incurred in the Ordinary
Course of Business since the Financial Statement Date, and which in the case of
this clause (ii) only, individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect.
18
6.13 Disclosed Data. No information contained in the Disclosed Data
contains any untrue statement of material fact or omits to state a material fact
necessary to make each statement contained therein, in light of the
circumstances in which it was made, not misleading.
6.14 Tangible Personal Property.
6.14.1 Except for tangible personal property disposed of in the
Ordinary Course of Business since the Financial Statement Date, the Company and
the Subsidiaries have (i) good and marketable title to all of the material
tangible personal property and assets used in the operation of their respective
businesses and which they own or purport to own as reflected in the Financial
Statements as of the Financial Statement Date, and (ii) valid leasehold
interests in all leases of material tangible personal property which they lease
or purport to lease, in each case free and clear of any Liens other than
Permitted Liens, as reflected in the Financial Statements as of the Financial
Statement Date.
6.14.2 Each lease for material tangible personal property is in full
force and effect, enforceable in accordance with its terms. To the Knowledge of
the Shareholders, there are no existing defaults, or events which with the
passage of time or the giving of notice, or both, would constitutes a default by
the Company and the Subsidiaries thereunder, or by any other party to any such
lease, except for (i) such defaults and events as to which requisite waivers or
consents have been obtained, or (ii) defaults which, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
6.15 Real Property.
6.15.1 All real property which is purported to be owned,
beneficially or of record, or operated or reflected as owned in the books and
records of the Company and the Subsidiaries, or leased, subleased or otherwise
occupied by the Company or the Subsidiaries, indicating the nature of its
interests therein, except for any real property which is owned beneficially or
of record by the Bank due to foreclosures against any Bank client in the
Ordinary Course of Business (collectively, the "Real Property") is as set forth
on Schedule 6.15. The Company and the Subsidiaries have (i) good and marketable
title to all of the Real Property which they own or purport to own, and (ii)
valid leasehold interests in all leases of Real Property which they lease or
purport to lease, free and clear of any Liens other than Permitted Liens.
6.15.2 All leases of Real Property are valid, subsisting and in full
force and effect enforceable in accordance with their terms, no notice of
termination has been received by the Company or any Subsidiary with respect
thereto and, to the Knowledge of the Shareholders, there are no existing
defaults, or events which with the passage of time or the giving of notice, or
both, would constitute defaults by the Company and the Subsidiaries thereunder,
except for (i) such defaults and events as to which requisite waivers or
consents have been obtained, and (ii) defaults which, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
6.15.3 The buildings, plants, structures and equipment of the
Company and the Subsidiaries are sufficient for the continued conduct of the
business of the Company and the Subsidiaries after the Closing in substantially
the same manner conducted prior to the Closing.
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6.16 Condition of Assets. The buildings, plants, structures and equipment
of the Company and the Subsidiaries are structurally sound, are in good
operating condition and repair, and are adequate for the uses to which they are
being put, and none of such buildings, plants, structures or equipment is in
need of maintenance or repairs except for ordinary, routine maintenance and
repairs that are not material in nature or cost.
6.17 Insurance. The Company and the Subsidiaries have currently in effect
insurance policies insuring the products, properties, assets, business and
operations of the Company and the Subsidiaries and their potential Liabilities
to third parties, and general liability policies customary for persons operating
in the businesses and in the jurisdictions in which the Company and its
Subsidiaries operate. Such policies are identified on Schedule 6.17 hereto, and
all such policies (i) are in full force and effect, (ii) are sufficient for
compliance with all requirements of applicable Law to which the Company or any
Subsidiary is subject, (iii) are valid and enforceable, and (iv) insure against
risks of the kind customarily insured against and in amounts customarily carried
by similarly situated businesses. All such policies are, and on the Closing Date
will be, in full force and effect and all premiums due and payable in respect
thereof have been paid. Since the respective dates of such policies, no notice
of cancellation or non-renewal with respect to any such policy has been received
by the Company or any Subsidiary.
6.18 Labor Relations. Except as set forth on Schedule 6.18, the Company and
the Subsidiaries have not, nor have they ever been, a party to or otherwise
bound by any labor or collective bargaining agreement. Except as set forth on
Schedule 6.18, as of the date hereof (i) to the Knowledge of the Shareholders,
neither the Company nor any Subsidiary is, or has within the past two years
been, involved in or threatened with any labor dispute, strike, slowdown, work
stoppage, grievance, unfair labor practice charge, arbitration, suit or
administrative proceeding relating to labor matters involving its employees,
officers and directors, (ii) there is no Litigation pending or, to the Knowledge
of the Shareholders, threatened against the Company or any of the Subsidiaries
under any Law relating to employment, including any provisions thereof relating
to wages, hours, collective bargaining, withholding or the payment of social
security or Taxes, and (iii) none of the Company of any of the Subsidiaries has
conducted negotiations with respect to any future contract with or commitment to
any labor union or association and, to the Knowledge of the Shareholders, there
are no current or threatened attempts to organize or establish any labor union
or employee association with respect to the Company or any Subsidiary. Except as
set forth on Schedule 6.18, all of the employees of Banco Agricola S.A. were
terminated during 2005, and each such employee executed a release in accordance
with requirements of Law.
6.19 Permits. To the Knowledge of the Shareholders, the Company and the
Subsidiaries hold and are in compliance with all Permits, except where the
failure to hold any such Permit or to comply with any such Permit could not
reasonably be expected to have a Material Adverse Change. A list of all material
Permits is set forth on Schedule 6.19.
6.20 Compliance With Laws.
6.20.1 The Company and the Subsidiaries are, and have been since
January 1, 2003, in compliance in all material respects with all requirements of
applicable Laws (including all applicable rules and regulations of the
Salvadoran Superintendence and the Panamanian Superintendence.
20
6.20.2 The Company and the Subsidiaries have timely filed all
material reports, registrations, applications and statements that are required
to be filed by them with any Authority (the "Regulatory Reports"). As of its
filing date, each Regulatory Report complied or, if filed subsequent to the date
hereof, at the time of filing will comply, in all material respects with the
requirements of applicable Law.
6.20.3 There are no pending, or to the Knowledge of the
Shareholders, threatened investigations or proceedings of any Authority against
the Company or any Subsidiary, which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
6.21 Litigation. Schedule 6.21 sets forth a list of all Litigation pending
or, to the Knowledge of the Shareholders, threatened against the Company or any
Subsidiary, or any of their assets or properties, or any of the officers or
directors of the Company or any Subsidiary in such capacities by or before any
Authority which, if adversely determined, would have or be reasonably expected
to have, individually or in the aggregate, a Material Adverse Effect. There are
no outstanding orders, judgments, injunctions, stipulations, awards or decrees
of any Authority against the Company or any Subsidiary, or any of their assets
or properties, which prohibit or enjoin the consummation of the transactions
contemplated hereby.
6.22 List of Accounts. Schedule 6.22 contains a list of (i) the name of
each bank, trust corporation or other financial institution and stock or other
broker with which the Company or any Subsidiary has an account, safe deposit box
or vault; (ii) the names of all persons authorized to draw thereon or to have
access to any safe deposit box or vault; and (iii) the purpose of each such
account, safe deposit box or vault.
6.23 List of Personnel. Schedule 6.23 sets forth (i) the name and total
compensation of each officer and each director of the Company and the
Subsidiaries subject to a written employment or other compensation agreement and
each other employee of the Company and the Subsidiaries whose total compensation
for the twelve months ended December 31, 2005, exceeded $100,000, and (ii) all
wage or salary increases or bonuses received by such persons since December 31,
2005, and any accrual for such increases or bonuses.
6.24 Employee Benefit Plans. Except as set forth in Schedule 6.24, the
Company does not have any Employee Benefit Plans in effect, except as required
by Law. Schedule 6.24 lists all Employee Benefit Plans in effect as of the date
hereof that the Company or any Subsidiary maintains, to which it contributes or
for which it could have any Liability.
6.24.1 Each Employee Benefit Plan (and each related trust, insurance
contract or fund) is in substantial compliance in form and, to the Knowledge of
the Shareholders, is in conformity in all material respects with the
requirements of applicable Law (including ERISA and the Code). Each Employee
Benefit Plan intended to be qualified under Section 401(a) of the Code has
received a favorable determination letter from the IRS covering all tax law
changes prior to the Economic Growth and Tax Relief Reconciliation Act of 2001
or has applied to the IRS for such favorable determination letter within the
applicable remedial amendment period under Section 401(b) of the Code, and the
Majority Shareholders are not aware of any circumstances likely to result in the
loss of the qualification of such plan under Section 401(a) of
21
the Code. The Company and each of the Subsidiaries is in substantial compliance
in all material respects with all Laws applicable to its employment practices,
and each Employee Benefit Plan has been maintained in substantial compliance
with its terms.
6.24.2 (i) All contributions, premium payments and other payments
required to be made in connection with the Employee Benefit Plans have been
made, (ii) a proper accrual has been made on the books of the Company or the
Subsidiaries, as the case may be, for all contributions, premium payments and
other payments due under any Employee Benefit Plan in the current fiscal year
but not made as of the date of this Agreement, (iii) no contribution, premium
payment or other payment has been made in support of any Employee Benefit Plan
that is in excess of the allowable deduction for the applicable federal income
Tax purposes for the year with respect to which the contribution was made, (iv)
with respect to each Employee Benefit Plan that is subject to Section 301 et
seq. of ERISA or Section 412 of the Code, the Company is not liable for any
"accumulated funding deficiency" as that term is defined in Section 412 of the
Code, (v) the projected benefit obligations determined under the Accounting
Standards as of the date of this Agreement do not exceed the fair market value
of the assets of any Employee Benefit Plan which is funded in whole or in part,
(vi) to the Knowledge of the Shareholders, neither the Company nor any of the
Subsidiaries has engaged in a transaction with respect to any Employee Benefit
Plan that, assuming the taxable period of such transaction expired as of the
date hereof, could subject the Company or any Subsidiary to a Tax or penalty
imposed by either Section 4975 of the Code or Section 502(i) of ERISA in an
amount which would be material, and (vii) neither the Company, any of the
Subsidiaries nor any entity which is considered one employer with the Company
under Section 4001 of ERISA or Section 414 of the Code (x) maintains or
contributes to, is or could be obligated to maintain or maintain or contribute
to, or has within the past six years maintained or contributed to a defined
benefit pension plan maintained by any of them that is subject to Subtitles C or
D of Title IV of ERISA or any other applicable Law or (y) maintains or has an
obligation to contribute to or has within the past six years maintained or had
an obligation to contribute to a multiemployer plan.
6.24.3 No Litigation is pending or, to the Knowledge of the
Shareholders, threatened with regard to any Employee Benefit Plan other than
routine claims for benefits. No Employee Benefit Plan is currently under
examination or audit by any Authority. Neither the Company nor any of the
Subsidiaries has any obligations for retiree health and life benefits under any
Employee Benefit Plan or collective bargaining agreement.
6.24.4 There has been no amendment to, announcement by the Company
or any of the Subsidiaries relating to, or change in employee participation or
coverage under, any Employee Benefit Plan which would increase materially the
expense of maintaining such plan above the level of the expense incurred
therefor for the most recent fiscal year. Except as set forth on Schedule 6.24,
neither the execution of this Agreement nor the consummation of the transactions
contemplated by this Agreement will (i) cause any Employee Benefit Plan to
increase benefits payable to any participant or beneficiary, (ii) entitle any
current or former employee of the Company or any Subsidiary to severance pay,
unemployment compensation or any other payment, benefit or award, (iii)
accelerate or modify the time of payment, funding or vesting, or increase the
amount of any benefit, award or compensation due any such employee, or (iv)
limit or restrict the right of the Company or any Subsidiary to merge, amend or
terminate any of the Employee Benefit Plans.
22
6.25 Tax Matters.
6.25.1 The Company and the Subsidiaries have filed all Returns
required to be filed and, when due, have duly paid all relevant Taxes due to all
applicable Authorities (collectively, "Taxing Authorities"). All Taxes
applicable to all periods prior to the Closing Date shall have been paid or
fully reserved against in the Financial Statements of the Company and the
Subsidiaries in accordance with Accounting Standards (taking into account any
extensions granted prior to the date hereof). All Taxes that are required to be
withheld or collected by the Company and the Subsidiaries have been duly
withheld or collected and, to the extent required, have been paid to the proper
Taxing Authorities or properly segregated or deposited as required by applicable
Laws. The basis of any depreciable assets and the methods used in determining
allowable depreciation (including cost recovery) of the Company and the
Subsidiaries are correct and in compliance with all applicable Laws and any
regulations promulgated thereunder.
6.25.2 Except as set forth in Schedule 6.21, no Litigation is
pending or, to the Knowledge of the Shareholders, threatened in respect of any
Taxes for which the Company and the Subsidiaries are or may become liable, nor
has any deficiency or claim for any such Taxes been proposed, asserted or, to
the Knowledge of the Shareholders, threatened.
6.25.3 All Taxes of the Company and the Subsidiaries that will be
due and payable for any period ending on or ending prior to the Closing Date,
will have been paid by or on behalf of the Company or will be reflected, in a
manner consistent with past practice, on the Company's books as an accrued Tax
liability, either current or deferred.
6.25.4 There are no Liens for Taxes upon any assets of the Company
or the Subsidiaries, except Liens for Taxes not yet due.
6.25.5 Except as set forth on Schedule 6.25, no deficiency for any
Taxes has been asserted or assessed against the Company or any Subsidiary that
has not been resolved and paid in full. No waiver, extension or comparable
consent given by the Company or any Subsidiary regarding the application of the
statute of limitations with respect to any Taxes or Returns is outstanding, nor
is any request for any such waiver or consent pending.
6.25.6 Neither the Company nor any Subsidiary has requested any
extension of time within which to file any Return, which Return has not since
been filed, or which additional extensions have been granted.
6.25.7 Neither the Company nor any Subsidiary is a party to a Tax
sharing agreement. Neither the Company nor any Subsidiary has any liability (by
law or contract) for Taxes imposed on any other person.
6.26 Environmental Matters.
6.26.1 The Property is used and operated presently, and at all times
has been used and operated, in compliance with all applicable Environmental
Laws.
6.26.2 Each of the Company and the Subsidiaries has obtained all
applicable authorizations from all Authorities relating to the Environmental
Laws necessary for operation of
23
the Company's and the Subsidiaries' respective businesses. The Company and each
of the Subsidiaries have filed all reports and notifications required to be
filed under and pursuant to all applicable Environmental Laws.
6.26.3 No notice from any Authority has been received by the Company
or any Subsidiary claiming that any aspect of the business, operations or
facilities of the Company or any Subsidiary is in violation of any Environmental
Law, or that the Company or any Subsidiary is responsible for the clean up or
remediation of any Hazardous Materials at any location.
6.26.4 The Company and each Subsidiary have timely filed all reports
and notifications required to be filed by it with respect to its properties and
facilities and has generated and maintained all required records and data under
all applicable Environmental Laws.
6.26.5 No Lien has been attached or filed against the Company or any
Subsidiary in favor of any person for (i) any liability under or violation of
any applicable Environmental Law, (ii) any Release of Hazardous Materials or
(iii) any imposition of Environmental Costs.
6.27 Intellectual Property.
6.27.1 Schedule 6.27 sets forth a list of all trademarks, service
marks, pending trademark or service ▇▇▇▇ applications and trade names licensed
to, applied for or registered in the name of the Company or any Subsidiary, or
in which the Company or any Subsidiary has, or purports to have, any rights
(excluding off-the-shelf software license agreements), and all material
copyright registrations or pending applications for registrations of the Company
or any Subsidiary, or in which the Company or any Subsidiary has, or purports to
have, any rights, including the nature (e.g., patent, trademark, etc.) of the
intellectual property, the application or registration number, the jurisdiction
and the record owner (the "Listed Intellectual Property"). Except as set forth
on Schedule 6.27, with respect to the Listed Intellectual Property, no
registration relating thereto (if any) has lapsed, expired or been abandoned or
canceled or, to the Knowledge of the Shareholders, is the subject of
cancellation proceedings. The Company and the Subsidiaries own or possess
adequate and enforceable licenses to use all Listed Intellectual Property and
any other material intellectual property rights (including drawings, trade
secrets, know-how and confidential information) currently used by the Company or
any Subsidiary, or necessary to permit the Company or any Subsidiary to conduct
their respective businesses as now conducted (the Listed Intellectual Property
and the other intellectual property rights are collectively called the
"Intellectual Property").
6.27.2 The Company owns all right, title and interest in the Owned
Intellectual Property Rights free and clear of all Liens (including royalty or
other payments). All Owned Intellectual Property Rights are valid and
enforceable, and, the Company has not received any notice from any person
asserting, that any Owned Intellectual Property Right is invalid or not
enforceable. To the Knowledge of the Company, no Owned Intellectual Property
Right is infringed by any person. The Company or a Subsidiary owns all
Intellectual Property Rights developed by its current and former employees and
independent contractors during the period of their employment or within the
scope of their contracting or consulting relationship, as
24
the case may be, with the Company or any Subsidiary. No employee or former
employee or independent contractor of the Company or any Subsidiary has any
claim with respect to any Intellectual Property Right of the Company.
6.27.3 There is no breach, anticipated breach or default by any
other party to any Intellectual Property license. All rights under each
Intellectual Property license will be fully available to the Company or a
Subsidiary after the Closing.
6.27.4 Each of the Company and the Subsidiaries has the right to use
the software currently used in its business as it is presently being used,
without any conflict with the rights of others. None of the Company or any
Subsidiary is in breach of any license to, or license of, any software. The
Company and its Subsidiaries do not use, rely on or contract with any person to
provide services bureau, outsourcing or other computer processing services to
the Company or any Subsidiary, in lieu of or in addition to their respective use
of the software. Following the Closing, the Company and each of the Subsidiaries
will have sufficient rights to all necessary software to operate its business as
it is currently being conducted.
6.28 Transactions With Affiliates. Except as set forth on Schedule 6.28 and
except for normal advances to employees consistent with past practices, payment
of compensation for employment to employees consistent with past practices, and
participation in Employee Benefit Plans by employees, neither the Company nor
any Subsidiary, on the one hand, has (i) purchased, acquired or leased any
property or services from, (ii) sold, transferred or leased any property or
services to, (iii) loaned or advanced any money to (other than in the Ordinary
Course of Business and on an arm's length basis in compliance with Applicable
Law), (iv) borrowed any money from (except in connection with deposit or
investment accounts in the Ordinary Course of Business on an arm's length basis
in compliance with Applicable Law, and only in amounts on a per person basis of
less than $1,000,000) or (v) entered into, or been subject to, any management,
consulting or similar agreement with, any officer or director of the Company or
any Subsidiary, the Majority Shareholders or any of their respective Affiliates,
on the other hand. Except as set forth on Schedule 6.28, no Affiliate of the
Company or any Subsidiary is indebted to the Company or any Subsidiary for money
borrowed or other loans or advances, nor is the Company or any Subsidiary
indebted to any such Affiliate.
6.29 Powers of Attorney. Except as set forth on Schedule 6.29, to the
Knowledge of the Shareholders, neither the Company nor any Subsidiary has
granted any power of attorney to any person for any purpose whatsoever, which
power of attorney is currently in force.
6.30 Material Contracts. Schedule 6.30 sets forth a complete and accurate
list of the following Contracts to which the Company or any of the Subsidiaries
is a party or to which the Company or any of the Subsidiaries or any of their
respective properties is subject or by which any of the foregoing are bound
(each such Contract, a "Material Contract"):
(i) any Contract not constituting a Loan that provides for fees or
other payments in excess of $100,000 per annum;
(ii) any Contract that contains an "exclusivity" clause (that is,
obligates the Company or any of the Subsidiaries to conduct business with
another party
25
on an exclusive basis or restricts the ability of the Company or any of the
Subsidiaries to conduct business with any person) or that contains a
non-competition or non-solicitation provision or otherwise limits or
purports to limit the manner in which, the duration for which or the
localities in which its business is or could be conducted or the types of
business that it conducts or may conduct;
(iii) the 50 largest Loans (by outstanding principal) made by the
Company or any of the Subsidiaries;
(iv) any Contract relating to the provision of data processing network
communication or other technical services to or by the Company or any of
the Subsidiaries that provides for fees or other payments in excess of
$100,000 per annum;
(v) any Contract with a term beyond the Closing Date under which the
Company or any of the Subsidiaries created, incurred, assumed, or
guaranteed (or may create, incur, assume, or guarantee) indebtedness for
borrowed money (including capitalized lease obligations), other than
Contracts pertaining to fully-secured repurchase agreements, trade
payables, deposit liabilities and borrowings or guarantees made in the
Ordinary Course of Business;
(vi) any Contract with respect to the employment of, or payment to,
any present or former directors, officers, employees or consultants;
(vii) any Contract involving the purchase or sale of a material amount
of assets outside the Ordinary Course Of Business (including by way of
merger, consolidation, purchase of assets or otherwise with a book value
greater than $500,000; and
(viii) any Contract involving a capital expenditure in excess of
$8,000,000 in the aggregate.
Except as set forth on Schedule 6.30, all of the Material Contracts are
valid and binding and in full force and effect with respect to the Company or
the Subsidiaries, as the case may be and to the Knowledge of the Shareholders
with respect to all other parties thereto, and there are no defaults thereunder
or events which with notice or the passage of time would constitute a default by
the Company or any Subsidiary that is a party thereto, or to the Knowledge of
the Shareholders any other party thereto, except for (i) such defaults as to
which requisite waivers or consents have been obtained, and (ii) defaults which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
6.31 No Immunity. Neither the Company nor any of its properties has any
immunity on the ground of sovereignty or otherwise from the jurisdiction of any
Authority or from any legal process (whether through service or notice,
attachment prior to judgment, attachment in aid of execution, execution or
otherwise) under any applicable Laws in respect of the obligations of the
Company under this Agreement or from the execution or enforcement of any
judgment resulting therefrom.
26
6.32 Improper Payments; etc. To the Knowledge of the Shareholders, neither
the Company nor any of the Subsidiaries, nor any other person acting on behalf
of the Company or any of the Subsidiaries has used any corporate or other funds
for unlawful contributions, gifts or entertainment, or has made any unlawful
expenditures relating to political activity of any governmental officials, or
established or maintained any unlawful funds.
6.33 Accounting Controls. The Company and each of the Subsidiaries have
devised and maintained systems of internal accounting controls sufficient to
provide reasonable assurances that (i) all material transactions are executed in
accordance with management's general or specific authorization, (ii) all
material transactions are recorded as necessary to permit the preparation of
financial statements in conformity with generally accepted accounting principles
consistently applied with respect to any criteria applicable to such statements,
(iii) access to the material property and assets of the Company and the
Subsidiaries is permitted only in accordance with management's general or
specific authorization, and (iv) the recorded accountability for items is
compared with the actual levels at reasonable intervals and appropriate action
is taken with respect to any differences.
6.34 Risk Management; Allowance for Loan Losses.
6.34.1 All swaps, caps, floors, option agreements, futures, forward
contracts and other similar risk management arrangements, whether entered into
for the Company's own account, or for the account of one or more of the
Subsidiaries or their customers (each a "Risk Management Contract"), were
entered into (i) in accordance with prudent business practices and all
applicable Laws and (ii) with counterparties believed to be financially
responsible at the time; and each of them constitutes the valid and legally
binding obligation of the Company or one of the Subsidiaries, enforceable in
accordance with its terms, and is in full force and effect, except to the extent
enforceability may be limited by the Bankruptcy and Equity Exceptions. Neither
the Company nor any of the Subsidiaries, nor to the Knowledge of the
Shareholders, any other party thereto, is in breach of any of its obligations
under any Risk Management Contract.
6.34.2 The allowances for Loan losses reflected on the Financial
Statements are, in the reasonable judgment of the Company's management, adequate
as of their respective dates under the requirements of the Accounting Standards
and applicable Law.
6.35 Sufficiency of Assets. Immediately following the Closing, the Company
and its Subsidiaries will own, lease or otherwise have rights to assets,
tangible and intangible rights and services, sufficient to operate the Company's
and each Subsidiary's business in the manner presently operated by each such
entity.
6.36 Brokers. Except for the Company's engagement of GS and Caoba and for
any transaction fee payable to GS or Caoba in connection therewith, the Company
and the Subsidiaries have not employed any broker or finder and have not
incurred and will not incur any broker's, finder's or similar fees, commissions
or expenses payable by the Company or the Purchaser in connection with the
transactions contemplated by this Agreement.
6.37 Books and Records. The books and records of the Company and the
Subsidiaries have been, and are being, maintained in all material respects in
the Ordinary Course of Business
27
and in accordance with the Accounting Standards and any other applicable legal
and accounting requirements.
ARTICLE 7
PRE-CLOSING COVENANTS
7.1 Conduct of Business. During the period from the date hereof to the
Closing Date, the Majority Shareholders will cause the Company and the
Subsidiaries to, and the Company and each Subsidiary will, continue to conduct
their respective business affairs in the Ordinary Course of Business, in
compliance with applicable Law and consistent with Section 7.2.
7.2 Pre-Closing Activities. Except in the Ordinary Course of Business or as
otherwise permitted, contemplated or required by this Agreement, prior to the
Closing Date, the Majority Shareholders shall not, and shall cause the Company
and the Subsidiaries to not, and the Company and each Subsidiary will not, take
any of the following actions, without the written consent of the Purchaser which
shall not be unreasonably withheld:
7.2.1 sell, lease, assign, transfer or otherwise dispose of any
property or asset (i) having a book value in excess of $100,000 individually or
$1,000,000 in the aggregate, or (ii) outside the Ordinary Course of Business;
7.2.2 enter into any Contract with any Related Person that is
outside of the Ordinary Course of Business and on less than arms' length terms
without providing notice thereof to the Purchaser;
7.2.3 (i) create, incur, assume, guarantee or otherwise become
liable or obligated with respect to any indebtedness, or make any loan or
advance to, or any investment in, any person, or (ii) forgive or cancel any
material indebtedness or contractual obligation other than in the Ordinary
Course of Business;
7.2.4 change in any material respect the accounting methods or
practices followed by the Company and the Subsidiaries;
7.2.5 amend or modify in any way the Charter Documents of the
Company and the Subsidiaries;
7.2.6 (i) alter its outstanding capital stock, or declare, set
aside, make or pay any dividend or other distribution in respect of its capital
stock (in cash or otherwise), or purchase or redeem any shares of its capital
stock or the capital stock of the Subsidiaries, or (ii) split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
capital stock or other securities in respect of, in lieu of, or in substitution
for, shares of its capital stock;
7.2.7 enter into any new line of business or terminate any of the
existing lines of business;
7.2.8 materially change the credit, risk management, actuarial,
reserve or claims administration policies or procedures or underwriting
standards of the Company or any of
28
the Subsidiaries, except as required by any Authority or under applicable Law;
provided, that the Company shall promptly provide written notice of any such
material change to the Purchaser;
7.2.9 create or otherwise incur any Lien on any material asset other
than in the Ordinary Course of Business;
7.2.10 (i) grant or provide any severance or termination payments or
benefits to any director, officer or employee of the Company or any of the
Subsidiaries, except, in the case of employees who are not officers, in the
Ordinary Course of Business as disclosed by the Company prior to the date
hereof, (ii) increase the compensation, bonus or pension, welfare, severance or
other benefits of, pay any bonus to, or make any new equity awards to any
director, officer or employee of the Company or any of the Subsidiaries, except
for increases in base salary in the Ordinary Course of Business for employees
who are not officers, (iii) establish, adopt, amend or terminate any Employee
Benefit Plan or amend the terms of any outstanding equity-based awards, (iv)
take any action to accelerate the vesting or payment, or fund or in any other
way secure the payment, of compensation or benefits under any Employee Benefit
Plan, (v) change any actuarial or other assumptions used to calculate funding
obligations with respect to any Employee Benefit Plan or to change the manner in
which contributions to such plans are made or the basis on which such
contributions are determined, except as may be required by the Accounting
Standards, or (vi) forgive any loans to directors, officers or employees of the
Company or any of the Subsidiaries;
7.2.11 acquire or agree to acquire by merging or consolidating with,
or by purchasing any portion of the capital stock, partnership interests or
assets of, or by any other manner, any business or any person (other than the
Company or any Subsidiary);
7.2.12 settle any claim, action or proceeding, except for any claim,
action or proceeding involving solely money damages in an amount, individually
and in the aggregate for all such settlements, not more than $250,000 and that
would not reasonably be expected to establish an adverse precedent or basis for
subsequent settlements or require material changes in business practices;
7.2.13 enter into any agreement with any labor union or association
representing any employee; or
7.2.14 enter into any agreement or commitment to do any of the
foregoing.
7.3 Efforts to Consummate. Subject to the terms and conditions of this
Agreement, each party hereto shall use commercially reasonable efforts to take
or cause to be taken all actions, and do or cause to be done all things required
under applicable Law, in order to consummate the transactions contemplated
hereby, including, (i) obtaining all permits, authorizations, consents and
approvals of any Authority or other person which are required for or in
connection with the consummation of the transactions contemplated hereby and by
the other Transaction Documents, (ii) taking any and all reasonable actions
necessary to satisfy all of the conditions to such party's obligations hereunder
as set forth in Article 8, and (iii) executing and delivering all agreements and
documents required by the terms hereof to be executed and
29
delivered by such party on or prior to the OPA Commencement Date or the Closing,
as the case may be.
7.4 Confidentiality; Access.
7.4.1 Unless and until the transactions contemplated hereby have
been consummated, the Purchaser will, and will ensure that its representatives
will, hold in strict confidence and not use in any way except in connection with
the consummation of the transactions contemplated hereby, all confidential
information obtained in connection, with the transactions contemplated hereby
from the Majority Shareholders or from any of their representatives, in
accordance with and subject to the terms of the Confidentiality Agreement.
7.4.2 Upon reasonable notice and subject to applicable Laws relating
to the exchange of information, the Majority Shareholders shall afford the
Purchaser and its officers, employees, counsel, accountants and other authorized
representatives, such access during normal business hours throughout the period
prior to the Closing Date to the books, records (including credit files, Tax
returns and work papers of independent auditors), properties, personnel of the
Company and the Subsidiaries and to such other information as it may reasonably
request and, during such period, the Majority Shareholders shall furnish
promptly a copy of each material monthly, quarterly or annual report, schedule
and other document filed by it pursuant to the requirements of federal or state
securities or banking laws.
7.4.3 Subject to requirements of applicable Law, the Company shall
permit a representative or representatives of the Purchaser to observe any
meetings of the board of directors of the Company or any Subsidiary, any
committees thereof, any internal meetings of any credit, risk, treasury and
other similar management committees of the Company or any of the Subsidiaries,
and any meetings of management personnel with respect to material strategic
issues or topics. To the extent practicable, the Company and the Subsidiaries
shall give reasonable notice of any such meetings to the Purchaser.
7.4.4 No investigation by either party of the business and affairs
of the other shall affect or be deemed to modify or waive any representation,
warranty, covenant or agreement in this Agreement, or the conditions to either
party's obligation to consummate the transactions contemplated by this
Agreement.
7.4.5 Promptly following the date hereof, the Majority Shareholders
shall use their reasonable best efforts to cause any person to whom they or the
Company have provided documents, data or other materials relating to the Company
or the Subsidiaries in connection with the consideration of any business
combination involving the Company or the Subsidiaries to return or destroy any
such documents, files, data or other materials in accordance with the
confidentiality agreement between the Majority Shareholders and/or the Company
and such person.
7.5 No Proxies for or Encumbrances on Shares; Voting. Except as set
forth in this Agreement and the other Transaction Documents and except with the
prior written consent of the Purchaser, no Majority Shareholder shall, directly
or indirectly, from the date hereof until the Closing Date (i) grant any proxies
or enter into any voting trust or other agreement or
30
arrangement with respect to the voting of any of the Shares held by such
Majority Shareholder or (ii) acquire, sell, assign, transfer, encumber or
otherwise dispose of, or enter into any Contract, option or other arrangement or
understanding with respect to the direct or indirect acquisition or sale,
assignment, transfer, encumbrance or other disposition of, any of such Shares or
any interest therein. No Majority Shareholder shall seek or solicit any such
acquisition or sale, assignment, transfer, encumbrance or other disposition or
any such Contract, option or other arrangement or understanding. Each Majority
Shareholder agrees to notify the Purchaser promptly and to provide all details
requested by the Purchaser if such Majority Shareholder is approached or
solicited, directly or indirectly, by any person with respect to any of the
foregoing. Until the Closing Date, each Majority Shareholder shall exercise his,
her or its voting authority with respect to its Shares in a manner consistent
with the terms of this Agreement.
ARTICLE 8
CONDITIONS TO THE OPA
8.1 Conditions to the Purchaser's Obligations. The obligations of the
Purchaser to commence the OPA are subject to the satisfaction on or prior to the
OPA Commencement Date of each and every one of the following conditions
precedent, any one or more of which may be waived by the Purchaser:
8.1.1 There shall not be in force any injunction, judgment, order,
decree or ruling by or before any Authority of competent jurisdiction
restraining, enjoining, prohibiting, invalidating or otherwise preventing the
consummation of the transactions contemplated hereby. No action, suit, claim or
proceeding shall be pending before any Authority which seeks to prohibit or
enjoin the consummation of the transactions contemplated hereby. No Law shall
have been enacted, promulgated or enforced by any Authority which prohibits or
makes illegal the consummation of the transactions contemplated hereby.
8.1.2 The Purchaser shall have received a certificate of the
secretary or a duly authorized officer of any Majority Shareholder which is not
a natural person as to the incumbency and signatures of the officers of any such
Majority Shareholder executing this Agreement or, in the alternative, copy of
the powers of attorney for the officers of any such Majority Shareholder
executing this Agreement.
8.1.3 All Purchaser Consents and Company Consents (i) shall have
been duly obtained, made or given, (ii) shall be in form and substance
reasonably satisfactory to the Purchaser, (iii) shall not be subject to the
satisfaction of any condition that has not been satisfied or waived, and (iv)
shall be in full force and effect and not revoked.
8.1.4 (i) Each of the representations and warranties made by the
Majority Shareholders in this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of the OPA
Commencement Date, (ii) the Majority Shareholders and the Company shall have
complied in all material respects with all of the covenants set forth herein
from the date of this Agreement until the OPA Commencement Date, and (iii) the
Purchaser shall have received a certificate from the Majority Shareholders to
such effect.
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8.1.5 In the event that an Escrow Notice has been issued (and the
Purchaser has complied with its obligations under the Escrow Agreement), Shares
deposited with the Escrow Agent by the Majority Shareholders shall meet or
exceed the Minimum Percentage.
8.2 Conditions to Obligations of the Majority Shareholders. The obligations
of the Majority Shareholders to consent to the Purchaser's commencement of the
OPA are subject to the satisfaction on or prior to the OPA Commencement Date of
each and every one of the following conditions precedent, any one or more of
which may be waived by the Majority Shareholders; provided that if all such
conditions have been satisfied or waived by the Majority Shareholders on or
prior to the OPA Commencement Date, the Majority Shareholders shall be deemed to
have consented to such commencement:
8.2.1 There shall not be in force any injunction, judgment, order,
decree or ruling by or before any Authority of competent jurisdiction
restraining, enjoining, prohibiting, invalidating or otherwise preventing the
consummation of the transactions contemplated hereby. No action, suit, claim or
proceeding shall be pending before any Authority which seeks to prohibit or
enjoin the consummation of the transactions contemplated hereby. No Law shall
have been enacted, promulgated or enforced by any Authority which prohibits or
makes illegal the consummation of the transactions contemplated hereby.
8.2.2 All Company Consents (i) shall have been duly obtained, made
or given, (ii) shall be in form and substance reasonably satisfactory to the
Majority Shareholders, (iii) shall not be subject to the satisfaction of any
condition that has not been satisfied or waived, and (iv) shall be in full force
and effect and not revoked.
8.2.3 The Majority Shareholders shall have received a certificate of
the secretary or a duly authorized officer of the Purchaser as to the incumbency
and signatures of the officers of the Purchaser executing this Agreement or, in
the alternative, copy of the powers of attorney for the officers of the
Purchaser executing this Agreement.
8.2.4 Prior to the OPA Commencement Date, the Majority Shareholders
shall have received copies of a certificate of an authorized officer of the
Purchaser with copies of the resolutions of the Board of Directors or other
applicable executive committee of the Purchaser and, to the extent required
under applicable Law, the shareholders of the Purchaser approving (a) the
execution and delivery of this Agreement and each other Transaction Document to
which the Purchaser is a party, and (b) the consummation of the transactions
contemplated hereby and thereby.
8.2.5 (i) Each of the representations and warranties made by the
Purchaser in this Agreement shall be true and correct in all material respects
as of the date of this Agreement and as of the OPA Commencement Date, (ii) the
Purchaser shall have complied with all of the covenants set forth herein from
the date of this Agreement until the OPA Commencement Date and (iii) the
Majority Shareholders shall have received a certificate from a duly authorized
officer of the Purchaser to such effect.
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ARTICLE 9
CONDITIONS TO CLOSING
9.1 Conditions to the Purchaser's Obligations. The obligations of the
Purchaser to purchase any Offered Shares contemplated by this Agreement are
subject to the satisfaction on or prior to the OPA Termination Date of each and
every one of the following conditions precedent, any one or more of which may be
waived by the Purchaser:
9.1.1 There shall not be in force any injunction, judgment, order,
decree or ruling by or before any Authority of competent jurisdiction
restraining, enjoining, prohibiting, invalidating or otherwise preventing the
consummation of the transactions contemplated hereby. No action, suit, claim or
proceeding shall be pending before any Authority which seeks to prohibit or
enjoin the consummation of the transactions contemplated hereby. No Law shall
have been enacted, promulgated or enforced by any Authority which prohibits or
makes illegal the consummation of the transactions contemplated hereby this
Agreement.
9.1.2 All Purchaser Consents shall be in full force and effect and
not revoked.
9.1.3 The Minimum Percentage shall have been tendered in the OPA and
not withdrawn.
9.1.4 (i) Each of the representations and warranties made by the
Majority Shareholders or the Company in this Agreement shall have been true and
correct (without giving effect to any materiality or Material Adverse Effect
qualifier contained therein) in all respects as of the date of this Agreement
and on the OPA Termination Date, except where any failure of such
representations or warranties to be so true and correct, individually or in the
aggregate, would not have, or be reasonable likely to have, a Material Adverse
Effect, (ii) the Majority Shareholders and the Company shall have complied in
all material respects with all of the covenants set forth herein from the date
of this Agreement until the OPA Termination Date and (iii) the Purchaser shall
have received a certificate from the Majority Shareholders to such effect.
ARTICLE 10
OTHER AGREEMENTS
10.1 Further Assurances. Each of the Majority Shareholders and the
Purchaser shall, and shall each cause the Company and the Subsidiaries to, take
all commercially reasonable actions necessary to comply promptly with all legal
requirements which may be imposed on itself (including furnishing all
information required in connection with approvals of or filings with any other
Authority) and will promptly cooperate with and furnish information to each
other in connection with any such requirements imposed upon any of them.
10.2 Transitional Activities. Subject to applicable Law, the parties agree
that upon signing of this Agreement, they will commence discussions and planning
on integration and transitional activities in order to ensure that post Closing
operational merger activities may commence as quickly as possible. Both parties
further agree to provide the appropriate and necessary resources for the
aforementioned discussions and planning.
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10.3 Publicity. Unless as mutually agreed by the parties or as required by
applicable Law, there shall be no press release or other announcement concerning
this Agreement or the transactions contemplated hereby.
10.4 Litigation Support. In the event and for so long as any party actively
is contesting or defending against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand (other than among the parties
hereto) in connection with (i) any transaction contemplated under this
Agreement, or (ii) any fact, situation, circumstance, status, condition,
activity, practice, occurrence, event, incident, action, failure to act, or
transaction on or prior to the Closing Date involving the Company or any
Subsidiary, each of the parties will cooperate with the contesting or defending
party and its, his or her counsel in the contest or defense, all at the sole
cost and expense of the contesting or defending party (except to the extent the
contesting or defending party is entitled to indemnification therefor under this
Agreement).
10.5 No Additional Representations. EXCEPT FOR THE REPRESENTATIONS AND
WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT, THE SELLING SHAREHOLDERS DO
NOT MAKE ANY REPRESENTATION OR WARRANTY EXPRESS OR IMPLIED, AT LAW OR IN EQUITY,
IN RESPECT OF THE SELLING SHAREHOLDERS, THE COMPANY, THE SUBSIDIARIES OR ANY OF
THE ASSETS, LIABILITIES OR OPERATIONS OF THE SELLING SHAREHOLDERS, THE COMPANY
OR THE SUBSIDIARIES, AND THE PURCHASER EXPRESSLY DISCLAIMS ANY SUCH
REPRESENTATION OR WARRANTY. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES
EXPRESSLY SET FORTH IN THIS AGREEMENT, THE PURCHASER AGREES THAT IT IS ACQUIRING
CONTROL OF THE COMPANY AND THE SUBSIDIARIES ON "AS IS" AND "WHERE IS" BASIS.
10.6 Disclaimer Regarding Estimates and Projections. In connection with the
Purchaser's investigation of the Company and the Subsidiaries, the Purchaser has
received from or on behalf of the Selling Shareholders certain estimates,
forecasts, plans and financial projections with respect to the Company and the
Subsidiaries. The Purchaser acknowledges that there are uncertainties inherent
in attempting to make such estimates, forecasts, plans and financial
projections, that the Purchaser is familiar with such uncertainties, that the
Purchaser is taking full responsibility for making its own evaluation of the
adequacy and accuracy of all estimates, forecasts, plans and financial
projections so furnished to it (including the reasonableness of the assumptions
underlying such estimates, forecasts, plans and financial projections), and that
the Purchaser shall have no claim against the Selling Shareholders with respect
thereto. Accordingly, the Selling Shareholders make no representation or
warranty with respect to such estimates, forecasts, plans and financial
projections (including any such underlying assumptions), except that such
estimates, forecasts, plans and projections were not prepared in bad faith and,
to the Knowledge of the Shareholders, based on the best information available at
the time of their preparation.
10.7 Director and Officer Liability and Indemnification.
10.7.1 For a period of one year after the Closing, the Purchaser
shall not permit the Company or any Subsidiary to amend, repeal or modify any
provision in its Charter Documents relating to exculpation or indemnification of
former officers and directors (unless
34
required by Law), it being the intent of the parties that the officers and
directors of the Company and each Subsidiary prior to the Closing shall continue
to be entitled to such exculpation and indemnification for the Company or such
Subsidiary to the greatest extent permitted under the Laws of the jurisdiction
of incorporation of the Company or such Subsidiary.
10.7.2 The Purchaser hereby releases each of the officers and
directors of the Selling Shareholders, the Company and the Subsidiaries from any
and all claims by or Liabilities to the Selling Shareholders, the Company and
the Subsidiaries, whether known or unknown, whether now existing or hereinafter
discovered to exist, arising as a result of a breach of their fiduciary duties
to the shareholders of the Company or (other than the Company) of such
Subsidiaries as officers or directors of the Selling Shareholders, the Company
and the Subsidiaries, except to the extent that any such breach involved
fraudulent or criminal activity. After the Closing, the Purchaser shall cause
the Company and each of the Subsidiaries to exculpate (to the greatest extent
permitted by applicable Law) and shall indemnify, defend and hold harmless, each
of the directors and officers of the Company immediately prior to Closing
against all Losses arising out of any violations of such fiduciary duties in
their capacities as officers and directors of the Company and the Subsidiaries,
to the fullest extent permitted under applicable Law or the Charter Documents of
the Company and the Subsidiaries in effect as of the date of this Agreement (to
the extent consistent with applicable Law), except to the extent such breach
involved fraudulent or criminal activity.
10.8 No Solicitation. During the period commencing on the date hereof and
ending at the earlier of (i) the Closing Date and (ii) termination of this
Agreement pursuant to Article XII, the Majority Shareholders and the Company
shall not, and shall use their reasonable best efforts to cause their respective
Affiliates and their and their Affiliates' respective officers, directors,
representatives and agents (collectively, the "Seller Representatives") to not,
directly or indirectly initiate or solicit any inquiries or the making of any
proposal with respect to, or engage in discussions or negotiations concerning,
or provide any confidential information or data to any person with respect to,
or have any discussions with any person relating to, any Acquisition Proposal,
or otherwise facilitate any effort to do any of the foregoing. The Majority
Shareholders and the Company shall as promptly as reasonably practicable (but in
no case later than 48 hours after receipt thereof) advise the Purchaser of the
receipt of any Acquisition Proposal and provide the Purchaser with the identity
of such person and a reasonable description of the terms of such proposed
Acquisition Proposal. The Majority Shareholders and the Company shall, and shall
cause the Seller Representatives to, immediately terminate any discussions or
negotiations with any parties (other than the Purchaser or its Affiliates) with
respect to an Acquisition Proposal existing as of the date hereof.
10.9 Third Party Consents. The Majority Shareholders shall use their
commercially reasonable efforts to obtain all third party consents set forth on
Schedules 5.5 and 6.9.
10.10 Dealing with Certain Authorities. Purchaser shall (i) promptly take
all actions necessary to make the filings required of it or any of its
Affiliates under any applicable Laws in connection with this Agreement and the
transactions contemplated hereby, (ii) use its commercially reasonable efforts
to comply in all material respects at the earliest practicable date with any
formal or informal request for additional information or documentary material
received by it or any of its Affiliates from any Authority pursuant to and in
connection with any
35
applicable Laws, (iii) use its commercially reasonable efforts to resolve at the
earliest practicable date any investigation or other inquiry concerning the
transactions contemplated by this Agreement initiated by any Authority in
connection with any applicable Laws and (iv) use its commercially reasonable
efforts to obtain approval from any Authority required in connection with this
Agreement as promptly as practicable. Without limiting the generality of the
foregoing, Purchaser shall:
10.10.1 as soon as practicable but no later than forty-five (45)
days following the date of this Agreement, make the filings and/or notifications
required of it or any of its Affiliates in connection with the Purchaser
Consents; provided that the Majority Shareholders, the Company and its
Subsidiaries shall have fully cooperated with the Purchaser and its Affiliates
in providing information and other assistance to the extent reasonably necessary
for the Purchaser and its Affiliates to prepare and make such filings and/or
notifications as may be required by the Panamanian Securities Regulator or the
U.S. Regulators (if any); provided, further, that the Purchaser shall not be
required to make any filing or notification required to be made immediately
prior to the commencement of the OPA until such time;
10.10.2 at its sole cost, use its commercially reasonable efforts to
(i) resist or resolve promptly any administrative proceeding or suit, including
appeals, that may be instituted by any Authority or private third party with
respect to any applicable Laws, (ii) have vacated, lifted, reversed or
overturned any decree, judgment, injunction or other order, whether temporary,
preliminary or permanent, that is in effect and that prohibits, prevents or
restricts consummation of the transactions contemplated by this Agreement,
unless same was brought or initiated by the Company or the Majority Shareholders
or their respective Affiliates and (iii) enter into any settlement, undertaking,
consent decree, stipulation or other agreement with any Authority with respect
to any applicable laws and comply with all restrictions and conditions, if any,
imposed by such Authority as a requirement for granting any necessary clearance
or terminating any applicable waiting period, including but not limited to,
agreeing to hold separate, sell, otherwise divest or license assets and/or
businesses of Purchaser and/or its subsidiaries; and
10.10.3 Purchaser shall inform the Company in advance of any
material meeting, call or other communication (written or oral) between
Purchaser and any Authority relating to the transactions contemplated hereby and
shall afford a representative of the Majority Shareholders and their counsel the
opportunity to participate (at their election) in each such meeting, call or
other oral communication and the opportunity to comment on each such written
communication.
10.11 Non-Competition and Non-Solicitation.
10.11.1 Each Majority Shareholder specified on Schedule 10.11.1 (the
"Designated Shareholders") agrees that for a period of four years from the
Closing Date (the "Restricted Period"), such Designated Shareholder shall not,
and such Designated Shareholder's Affiliates shall not, own any interest in,
manage, operate or control, participate in the ownership, management, operation
or control (such as by serving as a director, officer, employee, member,
partner, consultant, agent or advisor), or file any application with any
Authority in preparation for any such ownership, management, participation,
operation or control of any business or enterprise (a "Restricted Business"):
36
(i) in El Salvador that is engaged in any business of the Company
and its Subsidiaries as of the Closing Date; and
(ii) in the United States that is engaged in any business of the
Company and its Subsidiaries conducted in the United States as of the
Closing Date.
10.11.2 Notwithstanding the foregoing, the Designated Shareholders
and their Affiliates may: (i) continue to participate in the ownership,
management, operation or control of any Restricted Business engaged in as of the
date hereof as set forth on Schedule 10.11.2 and (ii) acquiring and maintaining
an ownership interest in a Restricted Business provided that the acquired
ownership interest, when aggregated with any ownership interest of (x) the
Immediate Family Members of the Designated Shareholders and (y) the Designated
Shareholders' Affiliates, represents less than 5% of the equity and voting power
in such Restricted Business.
10.11.3 Each Designated Shareholder agrees that during the
Restricted Period, such Designated Shareholder shall not, and such Designated
Shareholder's Affiliates shall not in any manner, directly or indirectly
(without the prior written consent of the Purchaser): (i) solicit any Customer
to transact business with a Restricted Business or to reduce or refrain from
doing any Restricted Business with the Company or any of the Subsidiaries, (ii)
interfere with or damage any relationship between the Company or any of the
Subsidiaries in connection with the Restricted Business in which it is engaged
and a Customer or (iii) solicit anyone who is then an employee of the Company or
any of the Subsidiaries (or who was an employee of the Company or any of the
Subsidiaries within the prior 12 months) to (x) resign from the Company or any
of the Subsidiaries, (y) apply for or accept employment with any Restricted
Business or (z) in the case of any management employee of the Company or any of
the Subsidiaries, apply for or accept employment with any other business or
enterprise.
10.11.4 Each Designated Shareholder acknowledges that the covenants
in this Section 10.11 are given in order to induce the Purchaser to enter into
and consummate the transactions contemplated by this Agreement, are required by
the Purchaser for the purpose of preserving the business acquired by it in
connection with the transactions contemplated by this Agreement and that the
Purchaser would not enter into and consummate the transactions contemplated by
this Agreement without the agreement of the Designated Shareholders to the
covenants contained in this Section 10.11. Each Designated Shareholder also
acknowledges that the scope, duration and geographic limitations contained in
this Section are reasonable given the nature of the Company's and the
Subsidiaries' businesses and the nature of the Restricted Business. In the event
that any of the provisions of this Section 10.11 should ever be adjudicated to
exceed the time, scope, geographic or other limitations permitted by applicable
Law in any jurisdiction, then such provisions shall be deemed reformed in such
jurisdiction to the maximum time, scope, geographic or other limitations
enforceable under applicable Law. Each Designated Shareholder further
acknowledges that a violation of this Section 10.11 would cause immeasurable
injury to the Purchaser and that, in the event of a breach by one or more of the
Designated Shareholders of this Section 10.11, the Purchaser will not have an
adequate remedy at law. Accordingly, in the event of any such breach, the
Purchaser shall be entitled to such equitable and injunctive relief as may be
available to restrain the Designated Shareholders and any other person
participating in such breach from the violation of the provisions hereof in any
court of competent jurisdiction and injunctive relief without the necessity of
posting a bond or
37
proving special damages. Nothing herein, however, shall be construed as
prohibiting the Purchaser from pursuing any other remedies available at law or
equity for such breach, including the recovery of damages.
ARTICLE 11
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
11.1 Survival of Representations and Warranties. The representations and
warranties of the Purchaser contained in Article 4 of this Agreement and of the
Majority Shareholders and the Company contained in Articles 5 and 6 of this
Agreement shall survive the Closing and continue in full force and effect until
the date which is 18 months after the Closing Date; except for the
representations and warranties contained in Sections 5.2, 5.6, 6.6, 6.7 or 6.36,
which shall survive the Closing indefinitely, and the representations and
warranties in Sections 6.18 and 6.25, which shall survive the Closing for the
statute of limitations applicable thereto. In the event that notice of any
action for breach hereunder shall have been given within the applicable survival
period, the representations and warranties that are the subject of such action
shall survive with respect to such action until the action is finally and fully
resolved.
ARTICLE 12
TERMINATION
12.1 Termination. This Agreement may be terminated at any time prior to the
Closing Date:
12.1.1 by mutual written consent of the Purchaser and the Majority
Shareholders;
12.1.2 by the Purchaser or the Majority Shareholders if there shall
be any applicable Salvadoran or Panamanian Law that makes consummation of the
OPA illegal or otherwise prohibited or any judgment, injunction, order or decree
of any Authority having competent jurisdiction enjoins the consummation of the
OPA, and such judgment, injunction, order or decree shall have become final and
nonappealable;
12.1.3 by the Purchaser by giving written notice to the Majority
Shareholders at any time in the event the Majority Shareholders have breached
any material covenant contained in this Agreement in any material respect, the
Purchaser has notified the Majority Shareholders of such breach and such breach
has continued uncured for a period of 15 Business Days after the notice of
breach;
12.1.4 by the Majority Shareholders by giving written notice to the
Purchaser at any time the Purchaser has breached any material covenant contained
in this Agreement in any material respect (except for its obligations under
Section 10.10.1, which are addressed below), the Majority Shareholders has
notified the Purchaser of such breach and such breach has continued uncured for
a period of 15 Business Days after the notice of breach;
12.1.5 by the Majority Shareholders if the Purchaser shall have
breached its obligations in Section 10.10.1; or
38
12.1.6 by the Purchaser or the Majority Shareholders if the Closing
shall not have occurred on or before the date that is 150 days from the date of
this Agreement (unless the failure results primarily from the terminating party
breaching any representation, warranty or covenant contained in this Agreement).
12.2 Effect of Termination. The termination of this Agreement pursuant to
this Article 12 shall terminate all obligations of the parties hereunder (except
for the liability of any party then in breach), except for the obligations under
the Confidentiality Agreement, this Section 12.2 and Article 14.
ARTICLE 13
MAJORITY SHAREHOLDER REPRESENTATIVES
13.1 Appointment. Each Majority Shareholder does hereby irrevocably appoint
the individual set forth opposite its name on Schedule 13.1 hereof, as its true
and lawful attorney-in-fact and agent, with full power of substitution or
re-substitution, to act solely and exclusively on behalf of such Majority
Shareholder with respect to any matters relating to this Agreement and the
Transaction Documents (each such person, a "Majority Shareholders'
Representative"). All action required to be taken by a Majority Shareholder
under this Agreement and the Transaction Documents (including the giving and
receiving of all notices, consents and waivers and the execution and delivery of
any documents, and the execution and delivery of any agreements and releases in
connection with the settlement of any dispute or claim under this Agreement)
shall be taken by such Majority Shareholder's Majority Shareholders'
Representative. The Purchaser shall be entitled to rely on all actions taken or
authorized by the Majority Shareholders' Representatives as being the binding
acts or authorizations of the Majority Shareholder that designated such Majority
Shareholders' Representative. The Majority Shareholders' Representatives shall
not have any duties or responsibilities except those expressly set forth in this
Agreement and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or the Transaction
Documents or shall otherwise exist against the Majority Shareholders'
Representatives.
13.2 Reliance by Majority Shareholders' Representative. A Majority
Shareholders' Representative shall be entitled to rely, and shall be fully
protected in relying, upon any statements furnished to it by any Majority
Shareholder or the Purchaser, or any other evidence deemed by such Majority
Shareholders' Representative to be reliable, and such Majority Shareholders'
Representative shall be entitled to act on the advice of counsel selected by it.
A Majority Shareholders' Representative shall be fully justified in failing or
refusing to take any action under this Agreement, the other Transaction
Documents and the Confidentiality Agreement unless it shall have received such
advice or concurrence of the Majority Shareholder(s) that designated such
Majority Shareholders' Representative as it deems appropriate or it shall have
been expressly indemnified to its satisfaction by such Majority Shareholder(s)
severally according to their respective Percentage Ownership against any and all
liability and expense that such Majority Shareholders' Representative may incur
by reason of taking or continuing to take any such action. A Majority
Shareholders' Representative shall in all cases be fully protected in acting, or
refraining from acting, under this Agreement, the other Transaction Documents
and the Confidentiality Agreement in accordance with a request of the Majority
Shareholders that designated such Majority Shareholders' Representative, and
such
39
request, and any action taken or failure to act pursuant thereto, shall be
binding upon such Majority Shareholder.
13.3 Expenses of Majority Shareholders' Representative. A Majority
Shareholders' Representative shall be entitled to retain counsel and to incur
such expenses (including court costs and reasonable attorneys' fees and
expenses) as such Majority Shareholders' Representative deems to be necessary or
appropriate in connection with its performance of its obligations under this
Agreement, the other Transaction Documents and the Confidentiality Agreement,
and except as otherwise provided in this Agreement, all such fees and expenses
incurred by the Majority Shareholders' Representative shall be borne by the
Majority Shareholder(s) that appointed such Majority Shareholders'
Representative severally according to their respective Percentage Ownership.
13.4 Indemnification. The Majority Shareholders hereby agree severally to
indemnify the Majority Shareholders' Representative appointed by them (in its
capacity as such) ratably according to their respective Percentage Ownership
against, and to hold such Majority Shareholders' Representative (in its capacity
as such) harmless from, any and all liabilities, obligations, Losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of
whatever kind which may at any time be imposed upon, incurred by or asserted
against such Majority Shareholders' Representative in such capacity in any way
relating to or arising out of its action or failures to take action pursuant to
this Agreement, the other Transaction Documents or the Confidentiality Agreement
or in connection herewith or therewith in such capacity; provided, that no
Majority Shareholder shall be liable for the payment of any portion of such
liabilities, obligations, Losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the gross negligence or
willful misconduct of the Majority Shareholders' Representative designated by
such Majority Shareholder. The agreements in this Section 13.4 shall survive
termination of this Agreement, the other Transaction Documents or the
Confidentiality Agreement.
ARTICLE 14
MISCELLANEOUS
14.1 Notices. Any notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and, except as
otherwise specified in writing, shall be given by personal delivery, facsimile
transmission, Federal Express or UPS (or other similar
internationally-recognized overnight courier service) or by registered or
certified mail, postage prepaid, return receipt requested if to the Purchaser or
the Majority Shareholders, to the addresses for notices set forth below, or to
such other addresses as any party hereto may from time to time give notice of
(complying as to delivery with the terms of this Section 14.1) to the other.
Notice internationally-recognized overnight courier shall be effective two days
after deposit with such courier. Notice by any other permitted means will be
effective upon receipt.
40
If to the Purchaser: Bancolombia (Panama), S.A.
Plaza Marbella, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ de la
Guardia y Calle 47
Panama
Attn: ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇▇ ▇▇▇-▇▇▇▇
With copies to: ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax: ▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
If to the Majority Shareholders: c/o Banagricola, S.A.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇, El Salvador
Attn: Majority Shareholders'
Representatives
Fax: + ▇▇▇ ▇▇▇▇-▇▇▇▇
With copies to: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, P.A.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Fax: ▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
14.2 Entire Agreement. This Agreement, the other Transaction Documents and
the Confidentiality Agreement constitute the entire agreement among the parties
hereto with respect to the transactions contemplated hereby and supersede all
prior agreements, understandings, negotiations and discussions, both written and
oral, among the parties hereto with respect thereto. This Agreement may not be
altered or otherwise amended except pursuant to an instrument in writing signed
by the parties hereto.
14.3 Benefits; Binding Effect; Assignment. This Agreement shall be for the
benefit of and binding upon the parties hereto, their respective successors and,
where applicable, assigns. No party may assign this Agreement or any of its
rights, interests or obligations hereunder without the prior approval of the
other party; provided, however, that (i) before the Closing is effected, the
Purchaser may (A) assign any or all of its rights and interests hereunder to one
or more of its Affiliates, and (B) designate one or more of its Affiliates to
perform its obligations hereunder (but in any or all of such cases the Purchaser
shall nonetheless remain responsible for the performance of all of the
obligations of such assignee hereunder), and (ii) the Majority Shareholders may
assign any on all of their rights and interests hereunder to one or more of
their Affiliates, provided, however, that any assignor shall remain responsible
for the performance of all of the obligations of such assignor hereunder.
41
14.4 Waiver. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall any such waiver constitute a continuing waiver unless
otherwise expressly so provided.
14.5 No Third Party Beneficiaries. This Agreement shall be binding upon and
inure solely to the benefit of the parties hereto and their permitted assigns,
and nothing herein, express or implied, is intended to or shall confer upon any
other person any legal or equitable right, benefit or remedy of any nature
whatsoever under this Agreement.
14.6 Severability. It is the desire and intent of the parties hereto that
the provisions of this Agreement be enforced to the fullest extent permissible
under the Laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular provision of this
Agreement shall be adjudicated by a court of competent jurisdiction to be
invalid, prohibited or unenforceable for any reason, such provision, as to such
jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of this
Agreement or affecting the validity or enforceability of such provision in any
other jurisdiction. Notwithstanding the foregoing, if such provision could be
more narrowly drawn so as not to be invalid, prohibited or unenforceable in such
jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
14.7 Expenses. Except as otherwise provided in this Agreement, all fees and
expenses (including the fees and expenses of legal counsel and other advisors)
incurred by the Majority Shareholders, the Company and/or any Subsidiary in
connection with the sales process conducted by the Majority Shareholders and/or
the Company, the preparation and/or negotiation of this Agreement and the other
Transaction Documents shall be borne by the Company up to an amount not to
exceed $10,000,000 (the "Permitted Expenses"); provided that, for the avoidance
of doubt, any such fees and expenses in excess of $10,000,000 shall be borne by
the Majority Shareholders; provided, further that, at the Purchaser's election,
the Purchaser or any Affiliate of the Purchaser may directly pay any Permitted
Expenses on behalf of the Company. Any and all fees and expenses of the
Purchaser in connection with the preparation and/or negotiation of this
Agreement and the other Transaction Documents shall be borne by the Purchaser.
14.8 Section Headings. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of any provisions of this Agreement.
14.9 Counterparts; Facsimile Signature. This Agreement may be executed in
any number of counterparts and by the several parties hereto in separate
counterparts, each of which shall be deemed to be one and the same instrument.
This Agreement may be executed by facsimile signature and a facsimile signature
shall constitute an original for all purposes.
14.10 Litigation; Prevailing Party. In the event of any Litigation with
regard to this Agreement, the prevailing party shall be entitled to receive from
the non-prevailing party and the non-prevailing party shall pay all reasonable
fees and expenses of counsel for the prevailing party.
42
14.11 Specific Performance. The parties hereto agree that irreparable
damage would occur if any provision of Sections 7.2, 7.4, 7.5, 10.2, 10.3, 10.8
or 10.11 was not performed in accordance with the terms hereof and that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
the foregoing covenants or to enforce specifically the performance of such
covenants in addition to any other remedy to which they are entitled at law or
in equity in accordance with the terms set forth in this Agreement. The parties
hereto further agree that no party shall be required to post any bond, guaranty
or other surety in order to obtain any such injunction or specific performance.
14.12 Governing Law; Jurisdiction; Waiver of Jury Trial.
14.12.1 THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY
CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK
OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER
THAN THE STATE OF NEW YORK TO BE APPLIED.
14.12.2 EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, TRIAL BY
JURY IN ANY SUIT, ACTION OR PROCEEDING ARISING HEREUNDER.
14.13 Jurisdiction, Etc.
14.13.1 Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the non-exclusive
jurisdiction of any New York State court or federal court of the United States
of America sitting in the Borough of Manhattan, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement or the other Transaction Documents or for recognition or enforcement
of any judgment, and such parties hereby irrevocably and unconditionally agree
that all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted by Law,
in such federal court. Each of the parties hereto agrees that a final,
non-appealable judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. The Majority Shareholders and the Company hereby
irrevocably appoint CT Corporation System (the "Process Agent") with an office
on the date hereof at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇, as its agent to receive on behalf of the Majority Shareholders and the
Company service of copies of the summons and complaint and any other process
which may be served in any such action or proceeding. Such service may be made
by mailing or delivering a copy of such process to the Majority Shareholders
and/or the Company in care of the Process Agent at the Process Agent's office,
and the Majority Shareholders and the Company hereby irrevocably authorize and
direct the Process Agent to accept such service on their behalf. As an
alternative method of service, the Majority Shareholders and the Company also
irrevocably consent to the service of any and all process in any such action or
proceeding by sending copies of such process by mail (by method requiring
43
evidence of receipt) with a second copy to be sent to the Majority Shareholders
and the Company by courier at their respective address specified in Section
13.1.
14.13.2 Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the other
Transaction Documents in any New York State court or federal court of the United
States of America sitting in the Borough of Manhattan in New York City. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
Law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
14.13.3 To the extent that any Majority Shareholder or the Company
has or hereafter may acquire any immunity from jurisdiction of any Authority or
from any legal process (whether through service of notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise) with respect
to itself or its property, such Majority Shareholder and the Company hereby
irrevocably waives such immunity in respect of its obligations under this
Agreement and the other Transaction Documents and, without limiting the
generality of the foregoing, agrees that the waivers set forth in this Section
13.12.3 shall have the fullest scope permitted under the Foreign Sovereign
Immunities Act of 1976 of the United States and are intended to be irrevocable
for purposes of such Act.
14.14 Construction. The provisions of this Agreement shall be construed
according to their fair meaning and neither for nor against any party hereto
irrespective of which party caused such provisions to be drafted. Each of the
parties acknowledge that it, he or she has been represented by legal counsel in
connection with the preparation and execution of this Agreement.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
44
EXECUTION COPY
IN WITNESS WHEREOF, the parties hereto have each executed and delivered
this Master Stock Purchase Agreement as of the day and year first above written.
PURCHASER:
BANCOLOMBIA (PANAMA) S.A.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ S.
-------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇ S.
Title: President
(SIGNATURE PAGE TO MASTER STOCK PURCHASE AGREEMENT)
MAJORITY SHAREHOLDERS:
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Title: In his/her capacity as
attorney-in-fact on behalf of
each of the persons set forth
opposite his/her name on
Schedule 13.1 hereto.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: In his/her capacity as
attorney-in-fact on behalf of
each of the persons set forth
opposite his/her name on
Schedule 13.1 hereto.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: In his/her capacity as
attorney-in-fact on behalf of
each of the persons set forth
opposite his/her name on
Schedule 13.1 hereto.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: In his/her capacity as
attorney-in-fact on behalf of
each of the persons set forth
opposite his/her name on
Schedule 13.1 hereto.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: In his/her capacity as
attorney-in-fact on behalf of
each of the persons set forth
opposite his/her name on
Schedule 13.1 hereto.
46
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: In his/her capacity as
attorney-in-fact on behalf of
each of the persons set forth
opposite his/her name on
Schedule 13.1 hereto.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: In his/her capacity as
attorney-in-fact on behalf of
each of the persons set forth
opposite his/her name on
Schedule 13.1 hereto.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ MILLA
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Milla
Title: In his/her capacity as
attorney-in-fact on behalf of
each of the persons set forth
opposite his/her name on
Schedule 13.1 hereto.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: In his/her capacity as
attorney-in-fact on behalf of
each of the persons set forth
opposite his/her name on
Schedule 13.1 hereto.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ESERSKI
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Eserski
Title: In his/her capacity as
attorney-in-fact on behalf of
each of the persons set forth
opposite his/her name on
Schedule 13.1 hereto.
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
Title: In his/her capacity as
attorney-in-fact on behalf of
each of the persons set forth
opposite his/her name on
Schedule 13.1 hereto.
47
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Title: In his/her capacity as
attorney-in-fact on behalf of
each of the persons set forth
opposite his/her name on
Schedule 13.1 hereto.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ S.
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
Title: In his/her capacity as
attorney-in-fact on behalf of
each of the persons set forth
opposite his/her name on
Schedule 13.1 hereto.
By /s/ MARCO ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
-------------------------------------
Name: Marco ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: In his/her capacity as
attorney-in-fact on behalf of
each of the persons set forth
opposite his/her name on
Schedule 13.1 hereto.
48
FIRST AMENDMENT TO MASTER STOCK PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO MASTER STOCK PURCHASE AGREEMENT is made and entered
into as of this 2nd day of April, 2007 (this "Amendment"), and entered into by
and among Bancolombia (Panama) S.A., a sociedad anonima organized and existing
under the laws of Panama (the "Purchaser"), each of the shareholders of
Banagricola, S.A., a sociedad anonima organized and existing under the laws of
Panama (the "Company") listed on Exhibit A hereto (the "Majority Shareholders"),
and any shareholders of the Company who execute and deliver to the Purchaser a
Joinder Agreement. Each of the Purchaser and the Majority Shareholders are
sometimes herein referred to as a "Party" and collectively, as the "Parties".
W I T N E S S E T H
WHEREAS, the Purchaser and the Majority Shareholders are parties to that
certain Master Stock Purchase Agreement, dated as of December 22, 2006 (as
amended, modified, supplemented or restated from time to time, being hereinafter
referred to as the "Stock Purchase Agreement"); and
WHEREAS, subject to the terms and conditions of this Amendment, the Parties
hereto wish to amend the Stock Purchase Agreement as herein provided;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1
RECITATIONS; DEFINITIONS
Section 1.1 Recitations. Each of the Parties hereby jointly and severally
confirms the truth and accuracy of each of the preambles and recitals set forth
in the introduction to this Amendment and agrees that each of the preambles and
recitals set forth in the introduction to this Amendment are incorporated herein
by reference and are and shall be deemed to be a part of this Amendment as if
fully set forth herein.
Section 1.2 Definitions. Capitalized terms not otherwise defined in this
Amendment shall have the meanings ascribed thereto in the Stock Purchase
Agreement.
ARTICLE 2
AMENDMENTS
49
Section 2.1 Recitals A, B and C to the Stock Purchase Agreement is amended
by the deletion of such Recitals in their entirety and insertion in lieu thereof
of the following:
A. The Majority Shareholders own 10,015,267 shares of capital stock of the
Company, which shares represent 53.089144%, on a fully-diluted basis, of the
issued and outstanding capital stock of the Company.
B. The Majority Shareholders propose to sell to the Purchaser, and the
Purchaser proposes to purchase from the Majority Shareholders, fully paid-in
Shares of the Company that will represent at least 53.089144% of the Shares (as
defined below) on a fully-diluted basis (the "Minimum Percentage").
C. The Purchaser will effectuate a public tender offer simultaneously in El
Salvador and in Panama (the "OPA") in accordance with Article 3 herein, whereby
the Purchaser will offer to purchase the Shares (as defined below) from the
Majority Shareholders and the Minority Shareholders (as defined below) will sell
their Shares subject to the terms and conditions of this Agreement. The
Purchaser shall have no obligation to purchase any shares of the Subsidiaries
not held by the Company."
Section 2.2 Section 1.1 of the Stock Purchase Agreement is amended by
inserting the following definitions in Section 1.1:
"Escrow Shares" is defined in the OPA Escrow Agreement.
"Panamanian Settlement Agent" means Central Latinoamericana de Valores,
S.A. a sociedad anonima organized and existing under the laws of the Republic of
Panama.
"OPA Notification Date" is defined in Section 3.1.2. Section 2.3 The
following definitions of Section 1.1 of the Stock Purchase Agreement are amended
as follow:
"BYSSA" means Bienes y Servicios, S.A., a sociedad anonima organized and
existing under the laws of the Republic of Panama, which is also, directly
and/or through any of its Subsidiaries, a Majority Shareholder.
"Brokerage House" means, collectively, one or more brokerage houses and the
Panamanian Settlement Agent, contracted by the Purchaser (and reasonably
acceptable to the Majority Shareholders) to effectuate the OPA, as contemplated
by Article 3 hereof.
"Purchase Price Per Share" means $47.044792 per Share.
Section 2.4 Section 2.2 of the Stock Purchase Agreement is amended by the
deletion of such section in its entirety and insertion in lieu thereof of the
following:
"2.2 Escrow Agreement. The parties hereto shall enter into the OPA Escrow
Agreement which shall provide that: (i) the Majority Shareholders will
irrevocably deposit the Escrow Shares with the Escrow Agent free and clear of
any Liens and (ii) the Purchaser will deliver the
50
Escrow Agent evidence of delivery of the OPA Consideration to the Panamanian
Settlement Agent in the manner and in the time set forth in the OPA Escrow
Agreement."
Section 2.5 Section 2.4 of the Stock Purchase Agreement is amended by
deletion of such section in its entirety and including in lieu thereof the
following:
"Section 2.4 BYSSA Participation; Determination of Minimum Percentage. The
number of Shares held by BYSSA, directly or through its Subsidiaries, shall be
included in the Minimum Percentage for purposes of this Agreement. Without
prejudice to the foregoing, if the Purchaser (or any of its Affiliates) agrees
to acquire the capital stock of BYSSA in a tender offer process as contemplated
by the BYSSA Letter of Intent, BYSSA shall irrevocably deposit all its Shares
with the Escrow Agent as provided in Section 2.2 hereto, but the Escrow Agent
shall not tender such Shares in the OPA unless the Escrow Agent receives a
written notice from the Panamanian Settlement Agent (with a copy to BYSSA) no
earlier than five (5) days before the OPA Termination Date indicating that, as
of the date of such notice, the aggregate amount of Offered Shares did not reach
the Minimum Percentage. In such case BYSSA shall cause the Escrow Agent to
tender all (and not less than all) its Shares."
Section 2.6 Section 3.1.2 of the Stock Purchase Agreement is further
amended by the deletion of such section in its entirety and insertion in lieu
thereof of the following:
"Section 3.1.2 The Purchaser will effectuate the OPA through the Salvadoran
Stock Exchange and through the Panamanian Settlement Agent to acquire the Shares
at the Purchase Price Per Share. The OPA will be made to all of the Shareholders
of the Company. No later than five (5) Business Days following the date on which
(i) all of the conditions precedent set forth in Section 8.1 have been satisfied
or waived and (ii) the Majority Shareholders give their written consent, subject
to the proviso contained in Section 8.2, the Purchaser shall present and file
with the Panamanian Securities Regulator and the Salvadoran Securities Regulator
any applications, filings or notifications required under applicable Laws to
effectuate the OPA (the "OPA Notification Date"). The OPA will start on the day
following the second publication of the tombstone of the OPA in the Panamanian
newspapers as required by applicable Law (the "OPA Commencement Date"). Terms of
the OPA will include, among other things, (i) an offer by the Purchaser to
acquire, in accordance with applicable Law, up to 100% of the issued and
outstanding Shares, and (ii) that the OPA will remain open for 30 days (or such
other period as may be agreed upon by the Majority Shareholders and the
Purchaser). The OPA will be made to all Shareholders on equal terms, and will be
subject to the condition, among others, that the aggregate number of Offered
Shares in El Salvador and Panama constitute at least the Minimum Percentage. The
Purchaser shall proceed with the OPA in accordance with applicable Law and the
OPA Documents (which shall require the tendering by the Majority Shareholders of
the Minimum Percentage, except as provided in Section 2.4). The Purchaser
expressly reserves the right to waive any of the conditions to the OPA and to
make any change in the terms of, or conditions to, the OPA; provided that,
except with the prior written consent of the Majority Shareholders, the
Purchaser will not decrease the Purchase Price Per Share, change the form of
consideration to be paid, decrease the number of Shares sought in the OPA, or
impose conditions to the OPA in addition to those set forth herein. To the
fullest extent permitted under applicable Law, the OPA Documents shall provide
that Offered Shares tendered in the OPA to be settled on the Salvadoran Stock
Exchange and through the Panamanian Settlement Agent may not be
51
withdrawn, and notwithstanding provisions of applicable Law to the contrary,
each Majority Shareholder hereby agrees not to withdraw any such Offered
Shares."
Section 2.7 Section 5.2 of the Stock Purchase Agreement is further amended
by the deletion of such section in its entirety and insertion in lieu thereof of
the following:
"5.2 Ownership of Shares. Such Majority Shareholder is the lawful owner of
the Shares set forth opposite such Majority Shareholder's name in Exhibit A,
free and clear of any Lien (including any restriction on the right to vote,
sell, or otherwise dispose of such Shares), except as otherwise set forth on
Schedule 5.2. Such Majority Shareholder will be the lawful owner of all such
Shares at all times up to and including the Closing Date and, by tendering such
Shares pursuant to the OPA, shall transfer and deliver to the Purchaser valid
title to such Shares free and clear of any Lien and any such limitation or
restriction (other than any Lien created under this Agreement or the other
Transaction Documents). Such Majority Shareholder has not granted to any person
any option or other right to acquire any of its Shares. The Shares, in the
aggregate, owned by the Majority Shareholders constitute as of the date hereof,
and will constitute at all times from the date hereof up to and including the
Closing Date, at least the Minimum Percentage."
Section 2.8 The Stock Purchase Agreement is further amended by insertion of
Schedule 5.2 in the form attached hereto.
Section 2.9 The Stock Purchase Agreement is further amended by insertion of
the following paragraph in Section 6.25.
"6.25.8 Neither the Company nor any of its Subsidiaries has derived or
otherwise obtained any Panama source income, as defined under applicable Law, in
Panama as result of business, commercial, financial or any other kind of
activities performed by any of them in, from or relating to Panama, or owns any
real estate property in Panama. Accordingly, the Majority Shareholders
acknowledge and agree that the Purchaser is acting in reliance on this
representation and warranty and that neither the Purchaser nor any of its
Affiliates shall: (i) have liability of any kind in Panama under applicable Law
for Taxes derived or resulting from the payment of the Purchase Price by the
Purchaser to the Majority Shareholders; or (ii) have any obligation under
applicable Law in Panama to make any withholding in connection with Taxes with
respect to all or any portion of the Purchase Price payable to the Majority
Shareholders."
Section 2.10 Section 7.2.6 of the Stock Purchase Agreement is amended by
deletion of such section in its entirety and including in lieu thereof the
following:
52
"7.2.6 (i) alter its outstanding capital stock, or declare, set aside, make
or pay any dividend or other distribution in respect of its capital stock (in
cash or otherwise), except with respect to the dividends declared at the
shareholders' meetings of the Subsidiaries on February 21, 2007 as detailed in
the notice letters attached hereto as Schedule 7.2.6, (ii) purchase or redeem
any shares of its capital stock or the capital stock of the Subsidiaries, except
with respect to those shares to be purchased by the Company from the minority
shareholders of the Bank, Inversiones Financieras Banco Agricola, S.A. and
Asesuisa Vida, S.A. as detailed in the notice letter attached hereto as Schedule
7.2.6, or (ii) split, combine or reclassify any of its capital stock or issue or
authorize the issuance of any capital stock or other securities in respect of,
in lieu of, or in substitution for, shares of its capital stock;"
Section 2.11 The Stock Purchase Agreement is further amended by the
insertion of Schedule 7.2.6 in the form attached hereto.
Section 2.12 Section 8.1.4 of the Stock Purchase Agreement is amended by
the deletion of such section in its entirety and insertion in lieu thereof of
the following:
"8.1.4 (i) Each of the representations and warranties made by the Majority
Shareholders in this Agreement shall be true and correct in all material
respects as of the date of this Agreement and as of the OPA Commencement Date,
(ii) the Majority Shareholders and the Company shall have complied in all
material respects with all the covenants set forth herein from the date of this
Agreement until the OPA Commencement Date, (iii) the Board of Directors of the
Company shall have passed a resolution approving the transfer of the Shares and
the consummation of the transactions contemplated hereby in terms reasonably
acceptable to the Purchaser, and (iv) the Purchaser shall have received a
certificate from the Majority Shareholders to the effect of items (ii) and (iii)
hereto and a copy of the resolution mentioned in item (iii) hereto".
Section 2.13 Section 8.1.5 of the Stock Purchase Agreement is amended by
the deletion of such section in its entirety and insertion in lieu thereof of
the following:
"8.1.5 The Escrow Shares shall have been deposited with the Escrow Agent
and such Shares shall meet or exceed the Minimum Percentage."
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Section 2.14 Section 8.2.4 of the Stock Purchase Agreement is amended by
the deletion of such section in its entirety and insertion in lieu thereof of
the following:
"8.2.4 Prior to the OPA Notification Date, the Majority Shareholders shall
have received copies of a certificate of an authorized officer of the Purchaser
with copies of the resolutions of the Board of Directors or other applicable
executive committee of the Purchaser approving (A) the execution and delivery of
this Agreement and each other Transaction Document to which the Purchaser is a
party and (B) the consummation of the transactions contemplated hereby and
thereby."
Section 2.15 The Stock Purchase Agreement is further amended by the
insertion of Section 9.1.5 which shall read as follows:
"9.1.5 The Purchaser shall have received a certificate of the secretary or
a duly authorized officer of the Company certifying that the Company have
delivered a notice to each Shareholder, as required by the Company's Charter
Documents and any applicable Law, convening to a Meeting of Shareholders to be
held no later than three (3) Business Days following the OPA Termination Date,
for the purpose of electing a new Board of Directors of the Company, effective
on the Closing Date, with such persons as shall have been designated by the
Purchaser."
Section 2.16 The Stock Purchase Agreement is further amended by the
insertion of Section 10.12 which shall read as follows:
"10.12 Purchase of Certain Subsidiary Shares. Within thirty (30) days from
the Closing Date, the Purchaser shall cause the Company to make an offer to
purchase any shares of the Bank, Inversiones Financieras Banco Agricola, S.A.
and Asesuisa Vida, S.A. not held by the Company or its Subsidiaries, at a price
per share equal to $38.09, $37.27 and $60.97, respectively."
Section 2.17 Exhibit A to the Stock Purchase Agreement is hereby amended by
deleting it in its entirety and replacing it with the Exhibit A attached hereto.
Section 2.18 Exhibit B to the Stock Purchase Agreement is amended by
deleting it in its entirety and replacing it with the Exhibit B attached hereto.
Section 2.19 Schedule 13.1 to the Stock Purchase Agreement is hereby
amended by deleting it in its entirety and replacing it with the form of
Schedule 13.1 attached hereto.
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Section 2.20 Section 14.13.1 of the Stock Purchase Agreement is hereby
amended by deletion of such section in its entirety and including in lieu
thereof the following:
14.14.1 "14.13.1. Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the non-exclusive
jurisdiction of any New York State court or federal court of the United States
of America sitting in the Borough of Manhattan, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement or the other Transaction Documents or for recognition or enforcement
of any judgment, and such parties hereby irrevocably and unconditionally agree
that all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted by Law,
in such federal court. Each of the parties hereto agrees that a final,
non-appealable judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. The Majority Shareholders' Representatives hereby
irrevocably appoint CT Corporation System (the "Process Agent") with an office
on the date hereof at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇, as its agent to receive on behalf of the Majority Shareholders'
Representatives service of copies of the summons and complaint and any other
process which may be served in any such action or proceeding. Such service may
be made by mailing or delivering a copy of such process to the Majority
Shareholders' Representatives in care of the Process Agent at the Process
Agent's office, and the Majority Shareholders' Representatives hereby
irrevocably authorize and direct the Process Agent to accept such service on
their behalf. As an alternative method of service, the Majority Shareholders
also irrevocably consent to the service of any and all process in any such
action or proceeding by sending copies of such process by mail (by method
requiring evidence of receipt) with a second copy to be sent to the Majority
Shareholders by courier at their respective address specified in Section 13.1."
ARTICLE 3
MISCELLANEOUS
Section 3.1 Further Assurances. Subject to the terms and conditions of this
Amendment and to the extent permitted by law, each of the Parties hereto shall
execute and deliver such other documents and instruments, provide such materials
and information and take such other actions as may reasonably be necessary under
this Amendment.
Section 3.2 Entire Agreement. The Stock Purchase Agreement, as amended by
this Amendment, shall continue in full force and effect, and, as amended hereby,
is hereby ratified and confirmed in all respects. This Amendment shall not
constitute an amendment or waiver of any provision of the Stock Purchase
Agreement except as expressly set forth herein. Any reference to the "Agreement"
in the Stock Purchase Agreement or any related document shall be deemed to be a
reference to the "Agreement" as amended by this Amendment. The execution,
delivery and performance of this Amendment shall not operate as a waiver of any
condition, power, remedy or right exercisable in
55
accordance with the Agreement, except as expressly provided herein.
Section 3.3 Benefits; Binding Effect; Assignment. This Amendment shall be
for the benefit of and binding upon the parties hereto, their respective
successors and, where applicable, assigns.
Section 3.4 Waiver. No waiver of any of the provisions of this Amendment
shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar), nor shall any such waiver constitute a continuing
waiver unless otherwise expressly so provided.
Section 3.5 No Third Party Beneficiaries. This Amendment shall be binding
upon and inure solely to the benefit of the parties hereto and their permitted
assigns, and nothing herein, express or implied, is intended to or shall confer
upon any other person any legal or equitable right, benefit or remedy of any
nature whatsoever under this Amendment.
Section 3.6 Severability. It is the desire and intent of the parties hereto
that the provisions of this Amendment be enforced to the fullest extent
permissible under the Laws and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, if any particular provision of this
Amendment shall be adjudicated by a court of competent jurisdiction to be
invalid, prohibited or unenforceable for any reason, such provision, as to such
jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Amendment or affecting the validity or enforceability of this
Amendment or affecting the validity or enforceability of such provision in any
other jurisdiction. Notwithstanding the foregoing, if such provision could be
more narrowly drawn so as not to be invalid, prohibited or unenforceable in such
jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without
invalidating the remaining provisions of this Amendment or affecting the
validity or enforceability of such provision in any other jurisdiction.
Section 3.7 Section Headings. The section and other headings contained in
this Amendment are for reference purposes only and shall not affect the meaning
or interpretation of the provisions of this Amendment.
Section 3.8 Counterparts; Facsimile Signature. This Amendment may be
executed in any number of counterparts and by the several parties hereto in
separate counterparts, each of which shall be deemed to be one and the same
instrument. This Amendment may be executed by facsimile signature and a
facsimile signature shall constitute an original for all purposes.
Section 3.9 Litigation; Prevailing Party. In the event of any Litigation
with regard to this Amendment, the prevailing party shall be entitled to receive
from the non-prevailing party and the non-prevailing party shall pay all
reasonable fees and expenses of counsel for the prevailing party.
56
Section 3.10 Governing Law; Jurisdiction; Waiver of Jury Trial.
(a) THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF
LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY
OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE
STATE OF NEW YORK TO BE APPLIED.
(b) EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, TRIAL BY JURY IN ANY
SUIT, ACTION OR PROCEEDING ARISING HEREUNDER.
Section 3.11 Construction. The provisions of this Amendment shall be
construed according to their fair meaning and neither for nor against any party
hereto irrespective of which party caused such provisions to be drafted. Each of
the parties acknowledges that it, he or she has been represented by legal
counsel in connection with the preparation and execution of this Amendment.
Section 3.12 Acknowledgements. The Parties acknowledge and agree that the
limited waivers contained in the letter agreement of the Parties dated February
2, 2007 are valid and effective, and that the Purchaser Consent required by the
Superintendence of Competition of El Salvador shall not be deemed to be required
to have been filed within the forty-five day period required under Section
10.10.1 of the Stock Purchase Agreement, and no violation of Section 10.10.1 of
the Stock Purchase Agreement shall have occurred as a result of the filing of
such Purchaser Consent required by the Superintendence of Competition of El
Salvador after such forty-five day period.
Section 3.13 Effective Date. This Amendment shall be effective as of the
date first written above.
[The remainder of this page has been intentionally left blank.]
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IN WITNESS WHEREOF, the parties have executed this First Amendment to
Master Stock Purchase Agreement as of the date first written above.
PURCHASER:
BANCOLOMBIA (PANAMA) S.A.
By: /s/ PABLO ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
-------------------------------------------------
Name: Pablo ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Title: Legal Representative
MAJORITY SHAREHOLDERS:
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------------
Name: Oscar ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: In his/her capacity as attorney-in-fact
on behalf of each of the persons set forth
opposite his/her name on Schedule 13.1
hereto.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: In his/her capacity as attorney-in-fact
on behalf of each of the persons set forth
opposite his/her name on Schedule 13.1
hereto.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: In his/her capacity as attorney-in-fact
on behalf of each of the persons set forth
opposite his/her name on Schedule 13.1
hereto.
58
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ PRUNERA
-------------------------------------------------
Name: Francisco ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Prunera
Title: In his/her capacity as attorney-in-fact
on behalf of each of the persons set forth
opposite his/her name on Schedule 13.1
hereto.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: In his/her capacity as attorney-in-fact
on behalf of each of the persons set forth
opposite his/her name on Schedule 13.1
hereto.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------------------
Name: Oscar ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: In his/her capacity as attorney-in-fact
on behalf of each of the persons set forth
opposite his/her name on Schedule 13.1
hereto.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ MILLA
-------------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Milla
Title: In his/her capacity as attorney-in-fact
on behalf of each of the persons set forth
opposite his/her name on Schedule 13.1
hereto.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ESERSKI
-------------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Eserski
Title: In his/her capacity as attorney-in-fact
on behalf of each of the persons set forth
opposite his/her name on Schedule 13.1
hereto.
59
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
Title: In his/her capacity as attorney-in-fact
on behalf of each of the persons set forth
opposite his/her name on Schedule 13.1
hereto.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: In his/her capacity as attorney-in-fact
on behalf of each of the persons set forth
opposite his/her name on Schedule 13.1 hereto.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Title: In his/her capacity as attorney-in-fact on
behalf of each of the persons set forth
opposite his/her name on Schedule 13.1
hereto.
60