Colombian Commercial Code - Decree 410 of 1971 - Book II - Of Corporations - Title VI - Company - Chapter II - Shares in the Company - Section V - Trading of Shares - From: Section 403 to : Art 418

COLOMBIAN COMMERCIAL CODE

Section V

Trading of the shares

Article 403 .- The shares will be freely tradable, with the following exceptions:

1. The privileged, on which is subject to the provisions on the subject;

2. Common stock for which has been expressly agreed the right choice;

3. Shares of industry is not released, will not be traded without the authorization of the board or general assembly, and

4. The shares subject to a pledge in respect of which shall require the authorization of the creditor.

Section 404 .- The directors of the company may not either by itself or through third parties, dispose of or acquire shares in the company while in performance of their duties, but when it comes to operations other than speculative purposes and authorized by the board, granted by the affirmative vote of two thirds of its members, excluding the applicant or the general assembly, with the vote of a majority under ordinary statutes, excluding the applicant.

Managers who violate this prohibition will be fined up (fifty thousand pesos) * be imposed by the Superintendency of Companies, ex officio or upon request of any person and also with the loss of office.

* Modified. Act 222 of 1995.

Article 86 .- Other functions. In addition, the Superintendency of Corporations shall have the following functions:

...

3. Sanctions or fines, successive or not, up to two hundred minimum monthly wages, whatever the case, those who breach their orders, law or statute.

Article 405 .- Registered shares not paid in full are negotiable, but the subsequent purchasers Subscriber and will be jointly responsible for the unpaid amount thereof.

Article 406 .- The transfer of registered shares may be made by mere agreement of the parties, but to produce effects on society and others will require registration in the share register book, written order of the seller. This order may take the form of endorsement made on the respective title.

To re-registration and issue the title to the buyer, will require the prior cancellation of certificates to transferrer.

Paragraph .- In forced sales and judicial adjudications of registered shares, the registration is done by showing the original or certified copy of relevant documents.

Article 407 .- If the shares are registered and statutes estipularen preferential right in the negotiation, shall contain the terms and conditions within which the company or the shareholders may exercise, but the price and form of payment for shares shall be determined in each case concerned and, if they fail to agree, by experts appointed by the parties or, failing that, by the appropriate superintendent. No effect the provision that contravenes this standard.

While the company has registered its shares on stock exchanges, shall be deemed unwritten clause that establishes any restriction on the free negotiability of the shares.

Article 408 .- To dispose of shares whose ownership is in dispute, you will need permission from the respective judge; for actions foreclosed will require further authorization from the plaintiff.

Article 409 .- They may not be sold the shares whose registration was canceled or prevented any order of the competent authority.

In forced sales and the court awards of shares, the registration will be based on the order or communication from a person legally required to do so.

Article 410 .- The pledge and usufruct shares shall be perfected by registration in the book of shares, the bearer shares by surrendering the certificate or certificates to the creditor or the beneficial owner.

Article 411 .- The garment will not give the creditor the rights inherent to the stockholders except by stipulation or express agreement. The writing or document containing the corresponding agreement will be enough to practice before the company the rights to be conferred to the creditor, and when it comes to bearer shares, the document will be sufficient for the debtor to exercise the rights conferred on the shareholder creditor.

Article 412 .- Unless expressly stated otherwise, the usufruct shall confer all the rights inherent to the shareholder, except to dispose of or encumber and your refund at the time of liquidation.

To exercise the rights owner reserves the knot with just the writing or document to be made such reservations, as provided in the preceding article.

Article 413 .- The shares will be refined antichresis as the pledge and usufruct and only confer on the creditor the right to receive the profits accruing to those shares by way of dividend, unless otherwise specified.

Article 414 .- All actions may be subject to seizure and foreclosure. But when alleged or has been agreed the lien, the corporation or the shareholders may acquire in the manner and terms set forth in this Code.

The seizure of the shares will include the dividend and may be limited to only this one. In the latter case, the embargo will be consumed by court order for society retains and makes available the respective quantities.

Article 415 .- The seizure of the shares will be accomplished by registration in the share register book, written order of the competent official. That of the bearer shares, by abduction of the securities.

Article 416 .- The company may not refuse to make entries in the share register book, which is provided in this section except by order of competent authority, or in the case of actions for which negotiations are certain requirements or formalities required have not been fulfilled .

Article 417 .- With the shares acquired in the manner prescribed in Article 396 of the company may take the following measures:

1. Alienable and distribute its price as a useful, if not stated in the contract or ordered by the Assembly a special reserve for the acquisition of shares, because in this case will be the value to the reservation;

2. Distribute to shareholders as a dividend;

3. Cancel and proportionally increase the value of other actions, through reform of the social contract;

4. Or cancel and reduce the capital to the extent of their face value, and

5. Charitable-purpose, awards or special awards.

Paragraph .- While these actions belong to the company are suspended the rights attached to them.

Article 418 .- Dividends outstanding belong to acquiring the shares from the date of the letter of transfer, unless otherwise agreed by the parties, in which case expressed in the letter.