The National Assembly of Panama
HEREBY DECREES:

CHAPTER I: Incorporation

ARTICLE 1. Two or more persons of lawful age, of any nationality even though not domiciled in the Republic of Panama may, in accordance with the formalities hereinafter provided, form a corporation for any lawful purpose or purposes.

ARTICLE 2. Such persons desiring to form such a corporation shall sign articles of incorporation which shall set forth:

1. The names and domiciles of each of the subscribers of the articles;

2. The name of the corporation which will not be the same as or similar to that of another, already existing corporation so as to cause confusion.
The name shall include a word, phrase or abbreviation, indicating that it is a corporation, as distinguished from a person or an association of another type.
The name of the corporation may be expressed in any language.

3. The general purpose or purposes of the corporation;

4. The amount of the capital stock and the number and par value of the shares of which it is to be divided; and, if the corporation is to issue shares without par value, the statements required by Article 22 of this law;
The capital stock and par value of shares of any corporation may be expressed in terms of the legal currency of the Republic or of gold units of the legal currency of any other country, or in both;

5. If there are to be shares of different classes, the number of shares to be included in each class and the designations, preferences, privileges and voting rights or restrictions or other qualifications of the shares of each class; or a statement that such designations, preferences, privileges and voting powers or restrictions or other qualifications can be determined by resolution of the majority in interest of the Stockholders or of the majority of the Directors;

6. The number of shares of stock which each subscriber of the articles of incorporation agrees to take;

7. The domicile of the corporation and the name and domicile of its resident agent in the Republic, who may be a person or corporation;

8. Its duration;

9. The number, names and addresses of its Directors, of which shall not be less than three;

10. Any other lawful provisions which the subscribers of the articles of incorporation may desire to include.

ARTICLE 3. The articles of incorporation may be executed in any place, within or outside this Republic, and in any language.

ARTICLE 4. The articles of incorporation may be in the form of a public deed, or in any other form, provided that said articles be acknowledged by a Notary Public or by any other official authorized to make acknowledgements at the place of execution.

ARTICLE 5. If the articles of incorporation are not in the form of a public deed, they must be protocolized in the office of a Notary of the Republic.

If said document should be executed outside of the Republic of Panama, it must be authenticated by a Panamanian Consul before it is protocolized, or if there should be no Panamanian Consul, by the Consul of a country friendly to Panama. If the Articles of Incorporation are drafted in a language other than Spanish they must be protocolized with an authorized translation executed by an official or public interpreter of the Republic of Panama.

ARTICLE 6. The public deed or the protocolized document containing the articles of incorporation must be presented for registration in the Mercantile Registry.
The incorporation of the corporation shall not have effect as to third parties until articles of incorporation have been registered.

ARTICLE 7. Any corporation formed under this law may amend its articles of incorporation in any respect provided such amendments conform to the provisions of this law.

Therefore, the corporation may, by such amendment: change the number of its shares of stock or of any class of its stock outstanding at the time of such amendment; change the par value of the outstanding shares of any class having such a value; change the outstanding shares of any class having par value into the same or different number of shares of the same or a different class without par value; change the outstanding shares of a class without par value into the same or different number of shares of the same or different class having par value; increase the amount of the number of shares of its authorized stock; divide its authorized capital into classes; increase the number of classes of its authorized capital; or change the designations, rights, privileges, preferences, voting powers, restrictions or qualifications of stock. But the capital stock of a corporation shall not be reduced except in accordance with the provisions of articles 14 et seq. of this law.

ARTICLE 8. The amendments shall be made by the persons designated hereinafter and in the manner provided in this law with respect to the execution of the articles of incorporation.

ARTICLE 9. Amendments to the Articles of Incorporation which are made before stock has been issued, shall be signed by every subscriber of the articles of incorporation and by every subscriber to the stock of the corporation.

ARTICLE 10. In case stock has been issued, such amendments to the articles of incorporation shall be signed:

(a) By the holders of all the outstanding shares of the corporation entitled to vote thereon, in person or by proxy, and shall be accompanied by a certificate of the Secretary or an Assistant Secretary of the corporation stating that the persons who have executed said amendments, in person or by proxy, constitute the holders of all the outstanding shares of the corporation entitled to vote thereon;

or

(b) By the President or a Vice-President and the Secretary or an Assistant Secretary of the corporation, who shall sign and annex thereto a certificate stating that they have been authorized to execute said amendments by resolution adopted by the owners or their proxy of a majority of such shares and that such resolution was adopted at a stockholders meeting held on the date specified in the notice or waiver of notice.

ARTICLE 11. In case that the amendments to the Articles of Incorporation alter the preferences of outstanding shares of any class or authorized shares having preferences which are in any respect superior to those of outstanding shares of any class, such certificate mentioned in Article 10 (b) shall state that the officers signing the same have also been authorized to execute such amendments to the Articles of Incorporation by resolution, adopted in person or by proxy of the holders of a majority of the outstanding shares of each class entitled to vote thereon, adopted at a stockholders' meeting held on a date specified upon notice or waiver of notice.

ARTICLE 12. If the articles of incorporation require more than a majority of the outstanding shares of any class or classes in order to effect any amendment of any provision of the articles of incorporation, the certificate referred to in paragraph (b) of article 10 shall state that such amendment has been authorized in that manner.

ARTICLE 13. Unless the articles of incorporation or any amendment thereof otherwise provide, in the event of an increase of stock, each stockholder shall have a pre-emptive right to subscribe, in proportion to the number of shares then held by him, the shares of stock issued pursuant to such increase.

ARTICLE 14. Any corporation may reduce its authorized capital stock by an amendment of its articles of incorporation; but no distribution of assets may be made pursuant to any such reduction, which will reduce the actual value of its remaining assets to an amount less than the total amount of its debts and liabilities plus the amount, as reduced, of its issued capital stock.
There shall be annexed to the amendment to the articles of incorporation a certificate, issued under oath by the President or a Vice-President and of the Treasurer or an Assistant Treasurer, stating that no distribution of assets made or to be made pursuant thereto will violate the provisions contained in this article.

In the absence of fraud, the judgment of the Directors as to the value of the assets, and their determination of debts and liabilities, shall be conclusive.

ARTICLE 15. Any corporation, unless its articles of incorporation otherwise provide, may acquire shares of its own stock by purchase or otherwise. If such acquisition or purchase is made out of funds or properties other than the surplus or the net profits of the corporation, the shares of stock so purchased or acquired shall be canceled and the amount of issued stock of the corporation shall be reduced accordingly; but such shares may be reissued if the authorized capital stock shall not have been reduced by such retirement.

ARTICLE 16. Shares of its own stock acquired by any corporation out of its surplus or net profits may be held by such corporation, or sold or otherwise disposed of from time to time for its corporate purposes and may be retired or reissued by the Board of Directors.

ARTICLE 17. No corporation shall directly or indirectly vote any shares of its own stock.

ARTICLE 18. No corporation shall purchase or otherwise acquire its own stock out of fund or property other than its surplus or net profits, if such purchase or acquisition will reduce the actual value of its assets to an amount less than the total amount of its debts and liabilities plus the amount of its issued capital stock so purchased or acquired. In the absence of fraud, the judgment of the Directors as to the value of the assets, and their determination of the debts and liabilities, shall be conclusive.

CHAPTER II: Corporate Powers

ARTICLE 19. Every corporation organized in accordance with this law shall have in addition to other powers specified in this law the following powers:

1. To sue and be sued in any court;

2. To adopt and use a corporate seal and alter the same at its convenience;

3. To acquire, purchase, hold, use and convey real and personal property of all kinds and make and accept pledges, leases, mortgages, liens and encumbrances of all kinds;

4. To appoint officers and agents;

5. To make contracts of all kinds;

6. To make by-laws not inconsistent with any existing laws of the Republic or its articles of incorporation, for the management, regulation and government of its affairs and property, the transfer of its stock and the calling and holding of meetings of its stockholders and directors, and for all other lawful matters;

7. To carry on business and to exercise its powers in the Republic and foreign countries;

8. To dissolve itself or to be dissolved in accordance with the law;

9. To borrow money and contract debts in connection with its business or for any lawful purpose; to issue bonds, notes, bills of exchange, debentures and other obligations and evidences of indebtedness (which may or may not be convertible into stock of the corporation) payable at a specified time or times or payable upon the happening of a specified event or events whether secured by mortgage, pledge or otherwise or unsecured for money borrowed or in payment for property purchased or acquired or for any other lawful objects;

10. To guarantee, acquire, purchase, hold, sell, assign, transfer, mortgage, pledge or otherwise dispose of or deal in shares of the capital stock of, or bonds, securities or other evidences of indebtedness created by other corporations, or of any municipality, province, state or government.

11. To do all things necessary for the accomplishment of the objects enumerated in its articles of incorporation or any amendment thereof or necessary or incidental to the protection and benefit of the corporation, and in general to carry on any lawful business whether or not such business is similar in nature to the objects set forth in its articles of incorporation or any amendment thereof.

CHAPTER III: Stock

ARTICLE 20. Every corporation shall have power to create and issue one or more classes of shares of stock with such designations, preferences, privileges, voting powers or restrictions or qualifications thereof and other rights as its articles of incorporation provide and subject to such rights of redemption as shall have been reserved to the corporation in such articles of incorporation.

The articles of incorporation may provide that shares of stock shall be convertible into the shares of other classes.

ARTICLE 21. Shares of stock may have a nominal or par value. Such shares may be issued as fully paid and non-assessable, as partly paid or without any payment having been made thereon. Unless the articles of incorporation otherwise provide, fully paid and non-assessable shares having a par value, or securities or shares convertible into such shares, shall not be issued for a consideration which, in the judgment of the Board of Directors, is less in value than the par value of such shares or of the shares into which such securities or shares are convertible. Nor shall certificates for partly paid shares state that there has been paid thereon an amount greater than the value, in the judgment of the Board of Directors, of the consideration actually paid thereon. Such consideration may be money, labor, services or property of any kind.

In the absence of fraud, the judgment of the Board of Directors as to the value of any such consideration shall be conclusive.

ARTICLE 22. Shares of stock may be created and issued without par value provided the articles of incorporation include the following statements:

1. The total number of shares that may be issued by the corporation;

2. The number of shares, if any, with par value and the par value of each;

3. The number of shares without par value;

4. Either one of the following statements:

(a) The stated capital of the corporation shall be at least equal to the sum of the aggregate par value of all issued shares having par value plus a certain determined amount in respect to every issued share without par value plus such amounts as from time to time by resolution of the Board of Directors may be transferred thereto;

or

(b) The stated capital of the corporation shall be at least equal to the sum of the aggregate par value of all issued shares having par value plus the aggregate amount of consideration received by the corporation for the issuance of shares without par value, plus such amounts as from time to time by resolution of the Board of Directors may be transferred thereto.

There may also be included in such articles of incorporation an additional statement that the stated capital shall not be less than the amount therein specified.

ARTICLE 23. Subject to the designations, preferences, privileges and voting powers or restrictions or qualifications granted or imposed in respect to any class of shares, each share with or without par value shall be equal to every other share of the same class.

ARTICLE 24. A corporation may issue and may sell its authorized shares without par value for such consideration as may be prescribed in its articles of incorporation; or for such consideration which, in the judgment of the Board of Directors, shall be the fair value of such shares; or for such consideration as from time to time may be fixed by the Board of Directors, pursuant to authority conferred in such articles of incorporation; as shall be consented to or approved by the holders of at least a majority of the shares entitled to vote.

ARTICLE 25. Any and all shares referred to in Articles 22, 23 and 24 of this law shall be deemed fully paid and non-assessable. The holders of such shares shall not be liable to the corporation or its creditors in respect thereto.

ARTICLE 26. The shares of a corporation shall be paid at such time and in such a manner as the Board of Directors may determine. In case of default in the payment, the Board of Directors may either proceed against the defaulting stockholder to enforce payment of the amounts due and unpaid and to collect such damages as the corporation may have suffered, or rescind the subscription contract in respect to the stockholder in default, having the right in this last alternative to retain for the corporation such amounts as the defaulting stockholder may be entitled to receive from the funds of the corporation.

In the event that the corporation should proceed to rescind the subscription contract in respect to the stockholder in default and to retain for the corporation the amounts to which the stockholder may be entitled, the Board of Directors shall give at least sixty days advance notice to such stockholder.

Shares acquired by the corporation by virtue of the provisions of this article may be reissued or re-offered for subscription.

ARTICLE 27. Every certificate of stock shall contain the following statements:

1. The reference to the registration of the corporation in the Mercantile Registry;

2. The amount of its capital stock;

3. The number of shares owned by the stockholder or bearer;

4. The class of share, if there is more than one class, and if the stock is classified, a summary statement of the special conditions, designations, preferences, privileges, voting powers, restrictions or qualifications that one of the classes of the shares has over the others.

5. If the shares which it represents are fully paid and non-assessable, the certificate of stock shall so state; and if such shares are not fully paid and non-assessable, the certificate shall state the amount or amounts which have been paid thereon;

6. If the shares are represented by certificate issued in the name of the owner, it should contain the name of said owner.

ARTICLE 28. Shares may be issued to bearer only if fully paid and non-assessable.

ARTICLE 29. Shares represented by certificates issued in the name of the owner shall be transferable on the books of the corporation in such manner and under such regulations as may be provided in the articles of incorporation or in the by-laws. But in no case shall the transfer of stock be binding on the corporation unless it shall have been registered in the corporation books.

If the stockholder shall be indebted to the corporation, the corporation may refuse to permit the transfer of his stock until such indebtedness is paid. But in all cases the transferor and the transferee shall be jointly liable for the payment of the amounts owed to the corporation by virtue of the shares so transferred.

ARTICLE 30. Shares issued to bearer shall be transferable by delivery of the certificate or certificates representing title.

ARTICLE 31. If so provided in the articles of incorporation, any holder of a certificate for shares issued to bearer may exchange such certificate for a certificate or certificates for a like number of shares of the same class issued in his name; and the holder of a certificate for shares issued in the name of the owner may exchange it for a certificate for a like number of shares issued to bearer.

ARTICLE 32. The articles of incorporation may provide that in case a stockholder desires to sell, transfer or otherwise dispose of his shares of stock, the corporation or some stockholder or stockholders thereof shall have a preferential right to purchase such shares.
Any other restrictions upon the transfer or transferability of the shares may also be imposed; but any restriction absolutely preventing a stockholder from selling, transferring or disposing of his shares of stock shall be invalid.

ARTICLE 33. A corporation may issue a new stock certificate in place of any certificate previously issued by it alleged to have been destroyed, lost or stolen. The Board of Directors may, in such cases, require the owner of the destroyed, lost or stolen certificate to post security against any claim that may be made against the corporation or damage suffered by it.

ARTICLE 34. The articles of incorporation may provide that the holders of any designated class or classes of stock shall not be given voting rights; or they may otherwise limit or define the respective voting powers of the several classes of stock.

Such provisions of the articles of incorporation shall be controlling in all elections and in all proceedings in which the law requires the vote or the written consent of the holders of all of the shares or of a specified proportion of the shares of the corporation.

The articles of incorporation may also provide that for specified purposes the vote of more than a majority of the holders of any class of stock shall be required.

ARTICLE 35. One or more stockholders by agreement in writing may transfer stock to a voting trustee or trustees for the purpose of conferring upon it or them the right to vote thereon in the name and in place of the owner for the period and upon the terms and conditions therein stated. Other stockholders may transfer their stock to the same trustee or trustees and thereupon shall be a party to such agreement. The certificates of stock so transferred shall be surrendered and canceled and new certificates therefor issued to such trustee or trustees, in which it shall appear that they are issued pursuant to such agreement, and in the entry of such ownership in the proper books of the corporation that fact shall also be noted. In order for the provisions contained in this article be carried into effect, it will be necessary that a certified copy of such agreement be filed with the corporation.

ARTICLE 36. Every corporation organized under this law shall keep at its office in the Republic, or at such other place or places as the articles of incorporation or the by-laws may provide, a book to be known as the Stock Register, containing (except in the case of shares issued to bearer) the names alphabetically arranged of all persons who are stockholders of the corporation, showing their places of domicile, the number of shares held by each one respectively, the date of acquisition thereof and the amount paid thereon or that they are fully paid and non-assessable.

In the case of shares issued to bearer such Stock Register shall state the number of shares so issued, and the date of issue and that such shares are fully paid and non-assessable.

ARTICLE 37. Dividends may be paid to the stockholders from the net earnings of the corporation or from the surplus of its assets over its liabilities and capital stock, but not otherwise. The corporation may declare and may pay dividends upon the basis of the amount actually paid upon partly paid shares of stock.

ARTICLE 38. When the directors shall so determine, dividends may be paid in stock of the corporation; provided the stock issued for such purpose shall be duly authorized and provided, if such stock has not heretofore been issued, there shall be transferred from surplus to the capital of the corporation an amount at least equal to that for which such stock could be lawfully issued.

ARTICLE 39. Every stockholder shall be personally liable to the creditors of the corporation only to an amount equal to the amount not paid on his stock; but no action shall be brought against a stockholder for any debt of the corporation until judgment therefor has been rendered against the corporation and execution thereon has been returned unsatisfied in whole or in part.

CHAPTER IV: Stockholders' Meetings

ARTICLE 40. Whenever under the provisions of this law the approval or authorization of the stockholders is required, the notice of such stockholders' meeting shall be in writing and in the name of the President, Vice-President, Secretary or an Assistant Secretary or of such other person or persons so authorized by the articles of incorporation or the by-laws.
Such notice shall state the purpose or purposes for which the meeting is called and the time and place at which it is to be held.

ARTICLE 41. All meetings of stockholders shall be held within the Republic, unless otherwise provided in the articles of incorporation or by-laws.

ARTICLE 42. Such notice shall be given at such time prior to any such meeting and in such manner as the articles of incorporation or by-laws of the corporation provide; but unless they otherwise provide, such notice shall be given personally or by mail upon each stockholder of record entitled to vote at such meeting not less than ten no more than sixty days before such meeting.

If the corporation has issued shares to the bearer, notice of stockholders' meetings shall be published in such manner, as the articles of incorporation or by-laws provide.

ARTICLE 43. Any stockholder may