PBW&T Draft of 9/15/03
(For Discussion Purposes Only)
SHINHAN FINANCIAL GROUP CO., LTD.
120, 2-Ka. Taepyung-Ro,
ChungKu, Xxxxx 000-000
XXXXX
As of September [__], 2003
Citibank, N.A. - ADR Department
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Exchange of Restricted GDSs for ADSs
Ladies and Gentlemen:
Reference is made to (i) the Deposit Agreement, dated as of
September [__], 2003 (the "Deposit Agreement"), by and among Shinhan Financial
Group Co., Ltd., a company organized under the laws of the Republic of Korea
(the "Company"), Citibank, N.A., a national banking association organized under
the laws of the United States of America ("Citibank"), acting in its capacity as
ADR Depositary (Citibank acting in such capacity, the "Depositary"), and the
Holders and Beneficial Owners of American Depositary Shares ("ADSs") evidenced
by American Depositary Receipts ("ADRs") issued thereunder, and (ii) the Deposit
Agreement, dated as of September 3, 2001 (the "Restricted GDS Deposit
Agreement"), by and between the Company and Citibank, as GDS Depositary
(Citibank acting in such capacity, the "Restricted GDS Depositary") and the
holders and beneficial owners of Global Depositary Receipts (the "Restricted
GDRs"), evidencing Global Depositary Shares (the "Restricted GDSs") issued
thereunder. All capitalized terms used, but not otherwise defined, herein shall
have the meaning given to such terms in the Deposit Agreement or the Restricted
GDS Deposit Agreement, as the context may require.
The Company hereby irrevocably instructs the Restricted GDS
Depositary to terminate the restricted depositary receipts facility (the
"Restricted GDR Facility") established and currently existing pursuant to the
Restricted GDS Deposit Agreement upon the terms set forth in Section 6.02
thereof and to refuse any deposits of Shares or other Deposited Securities
thereunder from and after October [__], 2003. As contemplated in the Deposit
Agreement and notwithstanding the terms of the Restricted GDS Deposit Agreement,
the Company requests that Citibank, in its capacity as Depositary and as
Restricted GDS Depositary, establish procedures upon the terms and conditions
set forth herein to enable (i) holders and beneficial owners of Restricted GDSs
to surrender each such Restricted GDS at any time prior to April [__], 2004 in
exchange for one (1) ADS issued under the terms of the Deposit Agreement. The
purpose and intent of this letter agreement is to supplement the Deposit
Agreement for the sole purpose of accommodating the surrender of the Restricted
GDSs, the issuance of ADSs, and the delivery of ADRs in the context of the
termination (the "Termination") of the Restricted GDR Facility.
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Depositary hereby agree as
follows:
1. Depositary Procedures. Citibank, in its capacity as Depositary
and Restricted GDS Depositary, agrees, upon the instructions of the Company
contained herein, to establish all necessary procedures to enable the surrender
of Restricted GDSs to the Restricted GDS Depositary in connection with the
Termination in order to enable the issuance by the Depositary of ADSs to the
persons surrendering the Restricted GDSs upon the terms described herein.
In order to effectuate the foregoing, the Company hereby instructs
(i) the Restricted GDS Depositary to distribute on or after September [__], 2003
to participants in the Depositary Trust Company ("DTC") who hold Restricted GDSs
in accounts maintained through the book-entry transfer facilities of DTC (the
"DTC Accounts"), a Notice of Termination of Restricted GDR Facility
substantially in the form of the draft thereof attached hereto as Exhibit A,
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(ii) the Restricted GDS Depositary (a) to accept Restricted GDSs validly
surrendered to it for purposes of receiving ADSs and (b) to cancel such
Restricted GDSs and to deliver the Shares and other Deposited Securities
represented by such Restricted GDSs into the custodial account established by
the Depositary to accept Shares and other Deposited Securities under the terms
of the Deposit Agreement, in each case only upon the timely receipt of the
applicable duly completed and signed Exchange Certification substantially in the
form of the draft thereof attached as Exhibit B (the "Exchange Certification"),
and (iii) the Depositary to issue in the name of, and deliver to, the persons
who (a) validly surrendered Restricted GDSs to the Restricted GDS Depositary,
and (b) timely delivered to the Restricted GDS Depositary the applicable duly
completed and signed Exchange Certification, ADSs, that represent the number of
Shares or other Deposited Securities transferred on behalf of such persons from
the custodial account of the Restricted GDR Facility to the custodial account
containing the Shares or other Deposited Securities accepted for deposit under
the terms of the Deposit Agreement.
2. Company Assistance. The Company agrees to (i) assist Citibank, in
its capacity as Restricted GDS Depositary and Depositary in the establishment of
the procedures described above and the issuance of such ADSs, and (ii) take all
steps necessary and reasonably satisfactory to the Depositary to ensure that
such procedures and the issuance of such ADSs do not violate the provisions of
the Securities Act, the Exchange Act or any other applicable U.S. laws. In
furtherance of the foregoing, the Company shall cause its U.S. counsel to
deliver an opinion to the Depositary, dated September [__], 2003, stating, inter
alia, that (i) all Shares and other Deposited Securities currently held in the
Restricted GDR Facility and all Restricted GDSs currently outstanding maybe
transferred in reliance upon Rule 144(k) under the Securities Act (the
"Securities Act") without registration under the Securities Act; (ii) Restricted
GDSs delivered to the Depositary under the terms hereof may be transferred to
the Depositary pursuant to Rule 144(k) of the Securities Act; (iii) the ADSs
received in exchange for Restricted GDSs
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surrendered in accordance with the terms hereof and the Shares and other
Deposited Securities held in respect of such ADSs are freely transferable by the
Depositary in accordance with the terms of the Deposit Agreement; and (iv) the
Shares and other Deposited Securities received for deposit under the terms of
the Deposit Agreement and the ADSs issued in respect of the Shares and other
Deposited Securities so deposited will not be deemed "restricted securities" as
defined in Rule 144 under the Securities Act.
3. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Depositary that (a) neither it nor any of its
Affiliates (as defined in the Restricted GDS Deposit Agreement and hereinafter
used as so defined) nor any other person has at any time in the two-year period
preceding the date hereof deposited, or will at any time hereafter, deposit any
Shares or Deposited Securities into the Restricted GDS Facility, except for any
deposits by the Company of Shares in connection with the distribution of Share
dividends; (b) neither it nor any of its Affiliates currently owns or has, at
any time in the two-year period preceding the date hereof, owned any Restricted
GDSs; (c) neither it nor any of its Affiliates will at any time after the date
hereof purchase or otherwise acquire any Restricted GDSs; and (d) upon
reasonable inquiry (with the assistance of its U.S. counsel) into the facts and
circumstances surrounding the Restricted GDR Facility, it believes that the
resale and transfer restrictions applicable to the Restricted GDSs will not be
required after September [__], 2003.
4. Indemnity. The Company agrees to indemnify and hold harmless (i)
the Depositary, the Custodian and their respective officers, directors and
employees and (ii) the Restricted GDS Depositary, the custodian appointed under
the Restricted GDS Deposit Agreement and their respective officers, directors
and employees for any liability, loss, expense (including without limitation,
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the fees and expenses of counsel) incurred as a result of, or in connection
with, (x) the acceptance and cancellation of Restricted GDSs, the acceptance of
Shares and other Deposited Securities for deposit, the issuance of ADSs and the
delivery of ADRs under the Deposit Agreement, in each case upon the terms set
forth herein, except to the extent of their own gross negligence, bad faith or
willful misconduct in performing such acts or omitting to perform such acts, (y)
any other acts performed or omitted by the Restricted GDS Depositary or the
Depositary as contemplated by this letter agreement, except to the extent to
their own negligence, bad faith or willful misconduct in performing such acts or
omitting to perform such acts, or (z) its reliance on any information contained
herein or acting upon any instructions set forth in or contemplated in this
letter agreement.
This letter agreement shall be interpreted under, and all rights
hereunder shall be governed by, the laws of the State of New York without regard
to the principles of conflicts of law thereof.
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The Company and the Citibank have caused this letter agreement to be
executed and delivered on their behalf by their respective officers thereunto
duly authorized as of the date set forth above.
SHINHAN FINANCIAL GROUP CO., LTD.
By: _____________________________
Name:
Title:
Date:
CITIBANK, N.A.
as Depositary and as Restricted GDS Depositary
By: ____________________________________________
Name:
Title:
Date:
EXHIBITS
--------
A Notice of Termination
B Exchange Certification
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EXHIBIT A
to
Letter Agreement, dated as of September [__], 2003,
by and between Shinhan Financial Group Co., Ltd. and
Citibank, N.A., as Depositary and as Restricted GDS Depositary
____________________________________________
NOTICE OF TERMINATION
____________________________________________
Please refer to the form of Notice of Termination attached hereto.
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NOTICE OF TERMINATION OF RESTRICTED GDR FACILITY
AND INFORMATION RELATING TO THE EXCHANGE OF RESTRICTED GDSs
TO THE HOLDERS AND BENEFICIAL OWNERS OF
RESTRICTED GLOBAL DEPOSITARY RECEIPTS ("GDRs")
EVIDENCING RESTRICTED GLOBAL DEPOSITARY
SHARES ("GDSs") REPRESENTING THE DEPOSITED SECURITIES.
--------------------------------------------------------------------------------------------------------------------
COMPANY: Shinhan Financial Group Co., Ltd.
--------------------------------------------------------------------------------------------------------------------
RESTRICTED GDS DEPOSITARY: CITIBANK, N.A.
--------------------------------------------------------------------------------------------------------------------
RESTRICTED GDS DEPOSIT AGREEMENT: Deposit Agreement, dated as of September 3, 2001, by
and among Shinhan Financial Group Co., Ltd. (the
"Company"), the Restricted GDS Depositary and the
holders and beneficial owners of GDSs evidenced by
GDRs issued thereunder. Capitalized terms used but
not otherwise defined herein shall have the meaning
given to such terms in the Restricted GDS Deposit
Agreement.
--------------------------------------------------------------------------------------------------------------------
DEPOSITED SECURITIES: Shares of common stock, par value W5,000 per share
("Shares"), of the Company.
--------------------------------------------------------------------------------------------------------------------
GDS CUSIP NO.: 824596 20 9.
--------------------------------------------------------------------------------------------------------------------
GDS RATIO: Two (2) Shares per GDS.
--------------------------------------------------------------------------------------------------------------------
TERMINATION DATE: October [__], 2003.
--------------------------------------------------------------------------------------------------------------------
The Company has directed the Restricted GDS Depositary to terminate
the Restricted GDS Deposit Agreement for the Restricted GDR Facility. In
accordance with the terms of Section 6.02 of the Restricted GDS Deposit
Agreement, the Restricted GDS Deposit Agreement will terminate as of the
Termination Date. Holders and Beneficial Owners of Restricted GDSs are requested
to arrange for the surrender of their Restricted GDSs and the withdrawal of
Deposited Securities. Please note that, as contemplated in the Restricted GDS
Deposit Agreement, Holders and Beneficial Owners presenting Restricted GDSs for
cancellation and withdrawal of Deposited Securities will be required by the
Restricted GDS Depositary to complete and sign a certificate and agreement upon
the terms set forth in the Restricted GDS Deposit Agreement.
As provided in the Restricted GDS Deposit Agreement, if any
Restricted GDSs remain outstanding after the Termination Date, the Restricted
GDS Depositary shall discontinue the registration of transfer of the Restricted
GDRs, shall suspend the distribution of dividends to the Holders of the
Restricted GDSs, and shall not give any further notices or perform any further
acts under the Restricted GDS Deposit Agreement, except that the Restricted GDS
Depositary shall continue to collect dividends and other distributions
pertaining to the Deposited Securities, shall sell property and rights as
provided in the Restricted GDS Deposit Agreement and shall continue to deliver
Deposited Securities (upon the terms set forth in the Restricted GDS Deposit
Agreement), together with any dividends or other distributions received with
respect thereto and the net proceeds of the sale of any rights or other property
in exchange for Restricted GDSs surrendered to the Restricted GDS Depositary (in
all cases, without liability for interest and after deducting or charging the
fees and charges of the Restricted GDS Depositary for the surrender of
Restricted GDSs, any other expenses for the account of a Holder in accordance
with the terms of the Restricted GDS Deposit Agreement and any applicable taxes
or governmental charges or assessments).
The Company and Citibank, N.A., as depositary (the "Depositary")
have, pursuant to a Deposit Agreement, dated as of September [__], 2003 (the
"New Deposit Agreement"), established a new Depositary Receipts facility for
American Depositary Shares ("ADSs") (CUSIP 824596 10 0) listed on the New York
Stock Exchange (the "NYSE"). At the Company's request and direction, the
Depositary has agreed to make available a means for holders of Restricted GDSs
(CUSIP 824596 20 9) to surrender such Restricted GDSs to the Restricted GDS
Depositary prior to April [__], 2004 and to receive in return ADSs issued under
the terms of the New Deposit Agreement. Surrendering holders of Restricted GDSs
are entitled to receive one (1) ADS for each Restricted GDS properly
surrendered. A draft of the New Deposit Agreement has been filed with the
Securities and Exchange Commission under cover of a Registration Statement on
Form F-6 (Reg. No. 333-[_______]).
If you wish to receive ADSs upon the terms described above, you will
need to deliver (i) your Restricted GDSs and (ii) a completed and signed
Exchange Certification to the Restricted GDS Depositary in each case prior to
April [__], 2004. A copy of the Exchange Certification is enclosed.
Please note that pursuant to the terms of the Restricted GDS Deposit
Agreement, Holders of Restricted GDSs may present their Restricted GDSs to the
Restricted GDS Depositary for cancellation and, upon (i) payment to the
Restricted GDS Depositary of all applicable fees and charges of and expenses
incurred by, the Restricted GDS Depositary and all applicable taxes and
governmental charges and (ii) delivery of a properly completed and signed
withdrawal certification substantially in the form provided in Exhibit D-2 of
the Restricted GDS Deposit Agreement, withdrawal of the Shares or other
Deposited Securities represented by such Restricted GDS at any time prior to
April [__], 2004.
Please further note that, as provided in Section 6.02 of the
Restricted GDS Deposit Agreement, after April [__], 2004, the Restricted GDS
Depositary may, and intends to, sell the Deposited Securities held by or for the
Depositary and may thereafter hold the net proceeds of any such sale, together
with any other cash then held by it under the Restricted GDS Deposit Agreement,
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unsegregated and without liability for interest, for the pro rata benefit of the
Holders of the Restricted GDSs not theretofore surrendered. After such sale, the
Restricted GDS Depositary shall be discharged from all obligations to Holders
and Beneficial Owners of Restricted GDSs under the Restricted GDS Deposit
Agreement, except to account for such net proceeds and other cash (after
deducting, or charging, as the case may be, in each case the fees of the
Restricted GDS Depositary for the surrender of Restricted GDSs, any expenses for
the account of the Holder in accordance with the terms and conditions of the
Restricted GDS Deposit Agreement and any applicable taxes or governmental
charges or assessments).
If you have any questions about the above termination, please call
Citibank, N.A. at 1-877-CITI-ADR (0-000-000-0000).
CITIBANK, N.A.,
as Restricted GDR Depositary
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EXHIBIT B
to
Letter Agreement, dated as of September [__], 2003,
by and between Shinhan Financial Group Co., Ltd. and
Citibank, N.A., as Depositary and as Restricted GDS Depositary
____________________________________________
EXCHANGE CERTIFICATION
____________________________________________
Please refer to the form of Exchange Certification attached hereto.
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EXCHANGE CERTIFICATION
Citibank, N.A. - ADR Department
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Shinhan Financial Group Co., Ltd.
Reference is hereby made to the Notice of Termination of Restricted
GDR Facility, dated September [__], 2003 (the "Notice of Termination"), pursuant
to which Citibank, N.A., as Restricted GDR Depositary, informed the Holders and
Beneficial Owners of Restricted GDRs evidencing Restricted GDSs (CUSIP #824596
20 9) that Shinhan Financial Group Co., Ltd. (the "Company") has instructed it
to terminate the Restricted GDR Facility created pursuant to the terms of the
deposit agreement, dated as of September 3, 2001 (the "Restricted GDS Deposit
Agreement"). All capitalized terms used, but not otherwise defined, herein shall
have the meaning given to such terms in the Restricted GDS Deposit Agreement.
As noted in the Notice of Termination, the Company and Citibank,
N.A. have entered into a Deposit Agreement, dated as of September [__], 2003
(the "New Deposit Agreement") pursuant to the terms of which a new Depositary
Receipts facility (the "ADR Facility") has been created, the American Depositary
Shares ("ADSs") issued pursuant to which are listed for trading on the New York
Stock Exchange (the "NYSE"). Holders of Restricted GDSs are entitled to receive
one (1) ADS for each Restricted GDS properly surrendered herein.
1. We are hereby surrendering Restricted GDSs (CUSIP #824596 20 9)
to the Restricted GDR Depositary in order to receive ADS issued under the terms
of the New Deposit Agreement (CUSIP #824596 10 0).
2. We certify for the benefit of the Company and Citibank, N.A., in
its capacity as Restricted GDS Depositary and as Depositary under the New
Deposit Agreement, and their respective legal and financial advisors that:
a. We are the beneficial owners of the Restricted GDSs being
surrendered and will be the beneficial owners of the ADSs that are to be
delivered to us; and
b. The Restricted GDSs are being surrendered to the Restricted
GDS Depositary free and clear of any liens, encumbrances, security interests,
charges, mortgages or adverse claims and such Restricted GDSs have not been
stripped of any rights or entitlements; and
c. We are not, as of the date hereof, an "Affiliate" (as such
term is defined in Regulation C of the Securities Act and hereinafter used as so
defined) of the Company and we have not been an Affiliate of the Company at any
time during the three months preceding the date hereof; and
d. We are either (i) a Qualified Institutional Buyer (as
defined in Rule 144A under the Securities Act), or (ii) a person other than a
"U.S. person" located outside the United States (within the meaning of
Regulation S under the Securities Act); and
e. We have not purchased the Restricted GDSs from the Company
or, to the best of our knowledge, from any Affiliate of the Company in the
two-year period immediately preceding the date hereof except for Restricted GDSs
(i) received as part of a stock dividend, or (ii) received, directly or
indirectly, upon conversion of any bonds of the Company (in which case we
certify we did not purchase such bonds from the Company or, to the best of our
knowledge after reasonable investigation, from any Affiliate of the Company, in
the two-year period immediately preceding the date hereof); and
f. We are not aware of any facts or circumstances that would
prohibit our free transfer of the ADSs to be delivered to us or of the Shares or
other Deposited Securities represented thereby; and
g. We agree to indemnify and hold harmless Citibank, N.A., the
Company and their respective officers, directors, employees and agents for any
liability, loss or expense they may incur (including, without limitation,
reasonable fees and expenses of counsel) as a result of any inaccuracy of any
information or of any certification provided by us herein, or as a result of our
breach of any agreement or undertaking herein or in the Restricted GDS Deposit
Agreement or the New Deposit Agreement.
Number of Restricted GDSs being delivered:_______________________________
(CUSIP #824596 20 9)
DTC Transaction Code:________________________________
Name of Beneficial Owner:____________________________
By:__________________________________________________
Name:________________________________________________
Title:_______________________________________________
Address:_____________________________________________
_____________________________________________
Daytime Telephone Number:____________________________
Taxpayer ID #:_______________________________________
Date:________________________________________________
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