General Resolution Nº 330

GENERAL RESOLUTION No. 330. WITHDRAWAL FROM THE PUBLIC OFFERING SYSTEM. TAKE-OVER BIDS.

BUENOS AIRES, March 18, 1999

IN VIEW OF these records entitled "DRAFT RESOLUTION ON WITHDRAWAL AND TAKE-OVER BIDS pending on file No. 272/99, and

WHEREAS:

The withdrawal from the public offering and quotation system of stock from companies that used to be listed in the stock exchange is a far reaching decision for the corporate interest and, therefore, for the shareholders thereof.

On the other hand, these are extraordinary decisions that not only affect the present but also the future of the company.

The managing body of the corporation has the duty of dealing with and rendering an opinion on any and all circumstance that may affect the corporate interest under its responsibility.

This becomes particularly important since these decisions are especially important.

A board of directors that does not render an opinion on events that will seriously and definitely affect the interest it manages would not be meeting its duties as good manager.

The activities managed by the board of directors are in the interest of all shareholders, regardless of their shareholding.

This turns out to be of special relevance since, in order to comply with specific provisions, investors are not allowed to keep securities not authorized for public offering within their capital or in the equity capitals they manage.

The duty of the Commission is to protect the interest of investors.

In order to be properly protected, investors’ assets need to be administered by those managing said assets.

For the sake of transparency and to reach a better understanding, investors shall be aware of the type of relationship existing between those who propose the withdrawal and the managers who render their opinion.

The distinction between independent and non-independent directors of the controlling shareholder or the managing group is currently considered worldwide as an essential element for the transparency and safety of markets.

In circumstances where withdrawal from the public offering system is proposed, the opinion of the board and the degree of independence thereof are essential elements for the adoption of thoughtful decisions within a framework of transparency for the investor.

Without such transparency, it is impossible to conceive a serious capital market serving as a less expensive financing tool for companies, as well as a valid and attractive investment alternative for the general public and for local and foreign investors.

Similar concerns create the need of having the same information available to all shareholders in order to guarantee the maximum possible transparency in the markets.

The boards of directors of issuing corporations are the best vehicles to provide equal information to all shareholders.

The attainment of such goals may also be deemed included within the duties and due diligence of a good businessman.

In the event of take-over bids, similar considerations regarding the duty of rendering an opinion on the share value are also applicable to the board of directors of the issuing corporation.

Experience proves that the book value or the net worth value is no longer a decisive parameter in the valuation of a company.

From time to time, the market value is exposed to and affected by external factors, which may reduce its importance as a guideline to appraise the company’s value.

In the event of a take-over bid, the opinion of the board of directors on the fair market value of their corporate shares becomes a fundamental guideline for their stockholders.

Likewise, in the event of take-over bids, the equal availability of information for all shareholders is essential for the sake of transparency.

Recent public events demand the urgent regulation of these issues, since there has not been a spontaneous adjustment to procedures whose enactment would have otherwise been superfluous, considering the existing rules concerning corporate directors duties, relevant information and market transparency.

The information to be provided by those acquiring significant share packages shall include the price of the operation, since this information is important and affects the quotation of securities.

This resolution is adopted by virtue of the powers granted by sections 6 and 7 of Law 17 811.

NOW THEREFORE,

THE NATIONAL SECURITIES COMMISSION

RESOLVES:

SECTION 1 – Sections 2 and 3, Part 2.9.1, Chapter IX, Book 1 of the Rules and Procedures (N.T. - 1997) are hereby superseded as follows:

"2.9.1 Voluntary withdrawal from the public offering system. Shares. Bonds."

SECTION 2 – The companies deciding to withdraw from the public offering system shall address the matter as a specific item in the agenda at a special meeting of shareholders, in compliance with the quorum and majorities requirements of the relevant stock exchange regulations, as applicable.

SECTION 3 – In the event the voluntary withdrawal affected the shares of the issuing company:

1. the board of directors of the company shall, no less than FIFTEEN (15) working days prior to the meeting considering the above-mentioned item:

a.1 give an extensive and grounded opinion on the benefits the proposed withdrawal may cause to the company and,

a.2 to the best of the board’s knowledge and belief, report on the value of the corporation as an operating company, expressing the unit price per share and comparing it to the share’s market price, in the event such values were different,

a.3 The independent or non-independent condition of the directors; to that purpose, a director shall not be independent upon the occurrence of one or more of the following:

a.3.1 the director is also a director of, or depends on, the controlling shareholder or of any company controlled by or related to the controlling shareholder,

a.3.2 when the circumstances mentioned in a.3.1 exist with relation to a corporation with which the issuer, or its holding corporation, or companies controlled by, or related to, the issuer have shareholders in common,

a.3.3 when the director has professional relations with, or is a member of, a company or professional association having professional relations with, or receiving remunerations or fees from, the issuer or its holding corporation or companies controlled by or related to the latter,

a.3.4 when some of the circumstances mentioned in a.3.3 exist with respect to a corporation with which the issuer, or its holding company, or companies controlled by, or related to, the issuer have shareholders in common.

2. the notice for meeting of shareholders shall indicate the shareholders’ appraisal rights, pursuant to section 245 of Law 19,550. Said notice shall also indicate the domiciles at which the information required under paragraph a) herein shall be available no less than FIFTEEN (15) days prior to the meeting. One of these domiciles shall necessarily be that of the stock exchange where the shares are listed.
3. the reimbursement price for each share shall be reported at the meeting in order to exercise the shareholders’ appraisal rights together with, if applicable, the existence of take-over bids as provided by sections 23 and 24, Part 7.1.5, Chapter XVII of these Rules and Procedures.

SECTION 2 – Parts 7.1.1 and 7.1.5, sections 10 and 23, Chapter XVII of the Rules and Procedures (consolidated text – 1997) are hereby superseded as follows:

"SECTION 10 – Any individual or legal person who:

a.1 directly or

a.2 through any other individual or legal person, or

a.3 any group of people acting in concert :

b.1 by any means acquires or disposes of shares, or

b.2 changes the direct or indirect shareholding composition or percentage in a company within the public offering system, where the shares:

c.1 after their acquisition, or

c.2 prior to their disposition, or

c.3 at the time of such change of shareholding composition or percentages entitle the holders thereof to FIVE PER CENT (5%) or more of the voting rights that may be exercised at a shareholders’ meeting, within ONE (1) day as from the:

d.1 acquisition, or

d.2 disposition, or

d.3 change of shareholding composition or percentages,

must report such event to the Commission

The information shall also include:

e.1 the data of the individuals or legal persons that directly or indirectly hold the above-mentioned shareholding;

e.2 percentage of shareholding resulting from the transaction, and the

aggregate voting rights related to such participation;

e.3 price of the operation, expressing the total value and the value per share acquired and any other significant information that may determine the value involved in the transaction.

e.4 date of purchase or disposition and number, class and rights granted by the purchased or disposed shares; or date of change in its direct or indirect shareholding or composition.

e.5 purpose of the acquisition or disposition, if applicable. The information shall specially indicate whether the acquisition or disposition is related or not to the proposals for withdrawal from the public offering system or quotation at the stock exchange or stock exchanges where the corporate securities are listed, mergers, splits, transformations, changes of corporate domicile, or any other deed provided for by clause four, of section 244, or by section 245 of Law 19 550, or the whether the implementation any of these proposals is encompassed within the objectives of the acquiring or disposing party.

7.1.5 Take-over bids and sale of shares.

SECTION 23 – Any individual or legal person who, directly or through other individual or legal person, is willing to obtain a number of shares or share options, which, through a take-over bid:

1. would enable that party to get the company’s control, or
2. would enable that party to acquire capital stock of a company equal to or exceeding TWENTY PER CENT (20%) thereof, even when said capital percentage is not by itself enough to gain control of the company or that control is already in the hands of said individual or legal person,

shall observe the following procedure:

1. file with the Commission

1. a previous and thorough report on the characteristics of the bid, including the term thereof -which shall be of at least TWENTY (20) days and shall not exceed THIRTY (30) business days as from last publication of the bid-, and the minimum and maximum number of shares to be purchased - including the solutions of conflicts in the events of bids below or above the minimum and priorities among the bids received-;
2. any information on the issuing agency not already available to the public, whether provided by the company or by a third party, or drafted by the bidder himself, relevant to determine the acceptance or rejection of the bid;
3. an irrevocable purchase commitment, except with regard to the offered price, which may only be increased by a percentage of no less than five per cent (5%) and these conditions shall also apply to those shareholders that have already accepted the bid.

The Commission shall be authorized to file objections within a term of FIVE (5) business days. After said period of time, the terms shall be considered formally approved and the bidder shall be entitled to continue with the procedure.

2. Along with the submission to the Commission, the bidder shall:

2.1 serve detailed notice to the issuer as to the conditions of its offer;

2.2 At least FIVE (5) stock exchange business days after the above-mentioned notification has been served, the essential conditions of the public take-over bid and the addresses where the information referred to in subparagraph 2, paragraph 1 hereof will be available for reference of the interested parties shall be published for a minimum of ONE (1) day, in the Official Bulletin of the Buenos Aires Stock Exchange or self-regulating institution where the shares are listed, and for a minimum of THREE (3) days, in a major newspaper of the Argentine Republic. One of the above-mentioned domiciles shall necessarily be the one of the Stock Exchange or the self-regulating institution where the shares are listed.

3. The board of the issuing agency shall, from time to time, but never fifteen days after the notification referred to by subparagraph 1 of the above paragraph has been received:

3.1 render an opinion on the fairness of the price offered in the take-over bid and make a technical recommendation on its acceptance or rejection,

3.2 report on any decision taken or to be taken forthwith or which is under consideration and is almost likely to be adopted, which, in the Directors’ opinion is essential for the acceptance or rejection of the bid,

3.3 report on whether the directors and senior managers who are shareholders of the issuing agency have accepted or rejected the bid.

The opinion and information required by this paragraph shall be filed with the Commission and the Stock Exchange, or the self-regulating institution where the shares are listed, immediately after the occurrence thereof, but always within the above-established period of time. This opinion shall be extensively and timely published or disclosed to the interested parties.

Once the take-over bid term has elapsed, the bidder and the agents involved, if applicable, shall report the results to the Commission and to the accepting parties.SECTION 3 – Be noticed, published, referred to the National Board of Official Registration and Filed. GUILLERMO A. FRETES (Deputy Chairman). GUILLERMO HARTENECK (Chairman). JORGE LORES (Director). Lic. MARIA SILVIA MARTELLA. (Director).