REGIONAL DEVELOPMENT AND EMPLEMENTATION Decree 1394/98 Provide the basic terms and conditions applicable to the initial public supply of shares of the Banco Hipotecario Sociedad Anónima in national and international public supply. Amendment of Decree No. 924/97. Bs. As., 27/11/98 B.O.: 4/12/98

VISTO file No. 080-007361/98 of the Register of MINISTERY OF ECONOMY AND ARTWS AND PUBLIC SERVICES, Law No. 17.811, Law No. 19.550 and its amendments, Law No. 23.697, Law No. 24.143, Law No. 24.441, Law No. 24.855 and Decree No. 924 of 11 September 1997, Communication No.

CONSIDERING:

That Act No. 24.855 provided for the privatization of the former NATIONAL HIPOTECARY BANCO, its transformation into an anonymous society and the sale of the representative shares of its social capital in bags and markets of the country and abroad.

That Decree No. 924 of 11 September 1997, for its part, regulated the provisions of the aforementioned law, approved the Social Statute of the BANCO HIPOTECARIO SOCIEDAD ANONIMA.

It is the intention of the NATIONAL STATE to carry out the privatization of the ANONIMA HIPOTECARY BANCO as part of the structural reforms carried out in the financial sector of the ARGENTINA REPUBLIC.

Taking into account the progress of the efforts to sell the actions of BANCO HIPOTECARIO SOCIEDAD ANONIMA to the private capital in the manner provided for in Law No. 24.855 and in accordance with article 25, subparagraph (a), it is necessary to define the basic terms and conditions for the initial public offer of such actions.

It is common practice to contemplate different types of incentives to ensure the sale of shares in initial public supply processes.

That according to the current situation of national and international capital markets, it is necessary to determine certain special conditions and incentives for the initial public supply of the actions of BANCO HIPOTECARIO SOCIEDAD ANONIMA, in order to enable the fulfilment of the objectives proposed by Law No. 24.855.

That, according to the above, it is appropriate to establish as a specific incentive for the acquisition of shares of BANCO HIPOTECARIO SOCIEDAD ANONIMA, on the part of the retail demand composed of natural persons domiciled in the country, a discount on the court price to be determined.

That, also, and for equal reasons, it is necessary to include as an incentive for those who acquire actions of the ANONIMA HIPOTECARY BANCO in the initial public offer the possibility of acquiring, simultaneously, options for the additional purchase of actions of the ANONIMA SOCIEDAD BANCO.

That, in order to ensure coverage of such purchase options, it is necessary to authorize the adoption of corporate acts so that the BANCO HIPOTECARIO SOCIEDAD ANONIMA constitutes a trust in the terms of Act No. 24.441 for that purpose.

That the establishment of the trust by BANCO HIPOTECARIO SOCIEDAD ANONIMA, for the purposes of granting the aforementioned incentive, is compatible with the legislation applicable to commercial companies.

That, for reasons of speed, it is appropriate to authorize the public offer of the options to be issued with the support of the trust to be established for those purposes.

That, attentive to the fact that the trustee contributes to the full implementation of the objectives proposed by Act No. 24,855, all activities carried out within that framework are met by the exception set out in article 12 of the said Act.

That, for the purposes provided for in article 19 of Law No. 24,855, the international offer of shares may be directed to institutional investors, in accordance with the provisions of the rules applicable in the markets in which the offer is made.

Article 25, paragraph (a), of Act No. 24,855 provides that the NATIONAL EXECUTIVE POWER may set the maximum percentages to be acquired by investors in the initial public supply, since the above-mentioned Act does not set the maximum limit to be acquired by an individual investor or by the entire membership of an economic group.

On the other hand, article 25, subparagraph (a), of Act No. 24,855 stipulates that it is appropriate to reserve a percentage of capital to be acquired by natural persons with domicile in the country.

That, as a result of the above, it is appropriate to establish that in the initial public offer of actions of BANCO HIPOTECARIO SOCIEDAD ANONIMA, it may be awarded up to CINCO BY CIENTO (5%) of the social capital of the BANCO HIPOTECARIO SOCIEDAD ANONIMA to a natural or legal person and, also, a cap of up to the QUINCE BY CIENTO (15%) of the economic capital of the

It is necessary to determine the extents and requirements to be met by legal persons who may acquire shares Class C of BANCO HIPOTECARIO SOCIEDAD ANONIMA in accordance with the programme set out in article 18 (c) of Law No. 24.855.

That, complementing the provisions of article 49 of Decree No. 924 of 11 September 1997, it is appropriate to delegate the authority to establish the terms and conditions of sale of the actions of the ANONIMA SYPOTECARY BANCO in the MINISTERY OF ECONOMY AND PUBLIC SERVICES.

It is appropriate to specify the scope of certain issues related to the activities of the ANONIM BANCO HIPOTECARIO and its relationship with the NATIONAL STATE, in accordance with articles 17 and 25 (b) of Law No. 24.855, in order to modify articles 33 and 42 of Decree No. 924 of 11 September 1997.

That the General Directorate of Humanitarian Affairs of the MINISTERY OF ECONOMY AND ARTWS AND SERVICES PUBLICOS has taken the intervention that belongs to him.

That this Decree is issued in the use of the powers conferred by article 99 (2) of the NATIONAL CONSTITUTION.

Therefore,

THE PRESIDENT OF THE ARGENTINA NATION

RIGHT:

ARTICLE 1 In the exercise of the powers delegated by articles 20 and 25 of Act No. 24,855, please provide that the basic terms and conditions applicable to the initial public offer of actions of BANCO HIPOTECARIO SOCIEDAD ANONIMA in national and international public offer are as follows:

1. The minimum shares of the ANONIM SOCIEDAD HIPOTECARIO BANCO subject to sale offer shall represent, at least, the VEINTICINCO FOR SCIENT (25%) of the social capital of that entity and the maximum percentage will be determined in due course by the MINISTERY OF ECONOMY AND ARTWORKS AND PUBLIC SERVICES. The above-mentioned margins in this subparagraph (a) shall include actions that are sold for the purposes of the following subparagraphs (c) and (d).
2. A discount of up to CINCO per SCIENTO (5%), calculated on the cutting price to be determined for the sale of the actions of BANCO HIPOTECARIO SOCIEDAD ANONIMA, to those physical persons domiciled in the country that acquire up to a maximum of OCHOCIENTAS (800) of those actions, or the greater number to be determined by the MINISTERIO DE ECONOMIA.
3. Authorize to structure and offer, simultaneously, options for the purchase of BANCO HIPOTECARIO SOCIEDAD ANONIMA shares. Such purchase options can only be acquired by the acquisitions of shares of the ANONIMA HIPOTECARY BANCO in the initial public offer of such actions, in the proportions that the MINISTERY of ECONOMY and ARTWS and PUBLIC SERVICES determine in a timely manner. The above-mentioned purchase options may be exercised at any time, once the period of one year has elapsed from the date of its acquisition and until the fifth subsequent year, including, at the date of its acquisition, at a rate of exercise per action equal to the price of cut of each action of the BANCO HIPOTECARIO SOCIEDAD ANONIMA in the initial public offer of such actions. The purchase options may be represented by negotiable securities in stock exchanges and markets, as authorized by article 40 of Law No. 23.697 and concordant provisions, which may be freely transferable.
4. MINISTERY OF ECONOMY AND ARTWORKS AND SERVICES PUBLICOS is empowered to provide the necessary instructions so that the ANONIMA HIPOTECARY BANCO constitutes a trust that will have the exclusive purpose to acquire in the initial public offer shares of the ANONIMA HIPOTECARIO HIPOTECARIO SOCIEDAD, representative of up to a maximum of the QUINCE BY CIENTO (15%) of its social capital, for the purpose of ensuring the coverage of the above option To this end, the trustee of the trustee may, in such a capacity, enter into borrowings in the country and/or abroad, subscribe all the necessary instruments and contracts, and the ANONIMA SOCIEDAD HIPOTECARIO BANCO may assume the financing and/or be a guarantor of such obligations.
5. The options described in subparagraph (c) of this article are authorized for public tender under Act No. 17.811.
6. The trust described in subparagraph (d) above, and the trustee of the trustee, is covered by the exemption provided for in article 12 of Act No. 24.855.
7. The actions acquired by the trustee of the trust provided for in the preceding subparagraph (d) shall be deemed to be transferred in the perfect domain to the private capital through public tender for the purposes of article 18, subparagraph (d), and article 19 of Act No. 24,855 and concordant provisions of the Social Statute of BANCO HIPOTECARIO SOCIEDAD ANONIMA.

ARTICLE 2. For the purposes of article 25, subparagraph (a), of Act No. 24,855, it is stated that the maximum percentage of shares representing the social capital of BANCO HIPOTECARIO SOCIEDAD ANONIMA which may be awarded in the initial public offer of such actions shall be as follows:

The expression economic group contained in this article 2 means that it has the scope contemplated in Communication A 2140 of the BANCO CENTRAL DE LA REPUBLIC ARGENTINA and/or its modifications.

ARTICLE 3. The maximum percentage of BANCO HIPOTECARIO SOCIEDAD ANONIMA actions that may be awarded in the initial public tender, pursuant to Article 2 of this Decree, shall not be applicable to the subsequent acquisitions of shares, which shall be subject to the applicable provisions of Law No. 19.550, and its modifications, and of the Social Statute of the BANCO HIPOTECARIO SOCIED ANONIMA, The acquisition of options for the purchase of shares of BANCO HIPOTECARIO SOCIEDAD ANONIMA will not be computed for the purpose of calculating the maximum shares of the social capital of the BANCO HIPOTECARIO SOCIEDAD ANONIMA established in article 2 of this Decree and article 18 (d) of Law No. 24.855. ARTICLE 4o.- For the purposes of article 25, subparagraph (a), in fine, of Law No. 24,855, it is stated that the TEN BY SCIENTO (10%) of the actions of the BANCO HIPOTECARIO SOCIEDAD ANONIMA that are offered in the initial public offer is reserved to be awarded preferentially to individuals with domicile in the country, at the court price determined. The remainder not acquired by natural persons with domicile in the country may be awarded to other offenders. ARTICLE 5°. - It shall be understood that those legal persons whose social object is the development of activities related to the construction of housing or to the real estate activity are covered by article 18 (c) of Act No. 24.855. In each of the stages of sale of the shares Class C of BANCO HIPOTECARIO SOCIEDAD ANONIMA, the acquirers must establish an antiquity in the realization of any of the activities mentioned above in this article 5o mayor a UN (1) year at the date of acquisition of these actions. Deletion in the MINISTERY OF ECONOMY AND ARTWORKS AND SERVICES PUBLICS have the authority to determine the requirements to be credited in order to comply with the above provisions. ARTICLE 6o.- Deletion in the MINISTERY OF ECONOMY AND ARTWORKS AND SERVICES PUBLICS the power to determine the other terms, quantities, opportunities and conditions necessary for the sale of all the actions of the ANONIMA HIPOTECARY BANCO, including the approval of the awards of the actions to the offerers in each of the places that are made, with the scope of Article 25 (a) of the Law N°URA 24,855, and of the options contemplated for the public offer ARTICLE 7o.- Replace article 33 of Decree No. 924 of 11 September 1997 with the following:

"ARTICLE 33. ANONIMA SOCIEDAD BANCO shall adopt the rules for the constitution of forecasts and reserves issued by the SUPERINTENDANCE OF NATION SEGUROS in the area of the SUBSECRETARIA DE BANCOS AND SEGUROS dependent on the SECRETARIAN COORDINATION OF THE MINISTERY OF ECONOMIC AND SERVICES PUBLICS for the realization of insurance activities related to the real estate market and mortgages, as authorized by article 17 of Law No. 24,855. In the event that, as provided for in the above article, after the period of TEN (10) years established or prior to the said article, the BANCO HIPOTECARIO SOCIEDAD ANONIMA constitutes or participates, directly and/or indirectly, in one or more companies that have the purpose of granting insurance, subject to the legislation provided for in the insurance matter, its participation may reach the totality of the social capital, without prejudice to the provisions of article 19.5.

"For the purposes of the obligation imposed on BANCO HIPOTECARIO SOCIEDAD ANONIMA by article 17 (c) of Law No. 24.855, the special fund provided for in article 13 of Law No. 24.143 shall be considered as a reserve for ongoing risks and shall be treated in each case accordingly."

ARTICLE 8o. Replace article 42 of Decree No. 924 of 11 September 1997 with the following:

"ARTICLE 42. The NATIONAL STATE, through the MINISTERY OF ECONOMY AND ARTWS AND PUBLIC SERVICES, will take action in all actions and judicial or administrative procedures mentioned in articles 40 and 41 of this Decree, supplementing all the rights and obligations of the BANCO HIPOTECARIO SOCIEDAD ANONIMA, as a continuation of the rights and obligations of the former BANCO HIPOTECARIO".

"To this end, the BANCO HIPOTECARIO SOCIEDAD ANONIMA must make available to the Ministry all the necessary backgrounds and are at their disposal for the processing of them".

"If the Ministry does not take the procedural intervention to which it is obliged in such judicial or administrative proceedings and actions, the ANONIMA SOCIEDAD HIPOTECARIO BANCO shall continue to defend the rights of its predecessor and shall require to the competent court the summoning of the MINISTERY OF ECONOMY AND ARTWS AND PUBLICAL SERVICES to appear to be in law."

"BANCO HIPOTECARIO SOCIEDAD ANONIMA may act as procedurally appropriate in all judicial proceedings in order to defend in them the rights and immunities accorded to it in Law No. 24.855 and in this Decree."

"BANCO HIPOTECARIO SOCIEDAD ANONIMA shall not lodge or transfer any claim or claim that the NATIONAL STATE should indemnify in accordance with article 40 of this Decree, without the prior and written consent of the NATIONAL STATE. The NATIONAL STATE shall not lodge or transfer any claim or claim that includes periods or causes for which the NATIONAL STATE and SOCIEDAL HIPOTECARY BANCO are responsible in a successive manner. ANONIMA without the prior and written consent of BANCO HIPOTECARIO SOCIEDAD ANONIMA. The MINISTERY OF ECONOMY AND ARTWS AND PUBLIC SERVICES is empowered to dictate the additional regulation that is necessary for these purposes."

9th Article. - Please inform the BICAMERAL COMMISSION ON STATE REFORM AND FOLLOW-UP TO THE PRIVATIZATIONS OF THE HONORABLE NATIONAL CONGRESS. ARTICLE 10. Contact, post, give to the National Directorate of the Official Register and archvese.- MENEM.- Jorge A. Rodríguez.- Roque B. Fernández.