ZAKON ACT ON THE TAKEOVER OF JOINT STOCK COMPANIES

EU-projekt: Podrška Pravosudnoj akademiji: Razvoj sustava obuke za buduće suce i državne odvjetnike EU-project: Support to the Judicial Academy: Developing a training system for future judges and prosecutors Please note that the translation provided below is only provisional translation and therefore does NOT represent an official document of the Republic of Croatia. It confers no rights and imposes no obligations separate from those conferred or imposed by the legislation formally adopted and published in Croatian language. NN 109/07 Last check: 11.03.2009. ZAKON O PREUZIMANJU DIONIČKIH DRUŠTAVA ACT ON THE TAKEOVER OF JOINT STOCK COMPANIES GENERAL PROVISIONS Article 1 This Act shall regulate the conditions for submission of the bids for takeover of target companies, takeover procedure, rights and obligations of participants in the takeover procedure and the supervision of the target companies' takeover procedure. DEFINITION OF TERMS Article 2 For the purpose of this Act, the terms hereunder shall have the following meaning: 1. target company shall mean: a) a public joint stock company within the meaning of the Securities Market Act, b) a joint stock company with the registered office in some other country of the European Economic Area whose shares carrying the voting rights have been listed on the regulated market in the country of the European Economic Area within the meaning of Article 4, paragraph 1, item 14 of the Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets of financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and the Council and repealing Council Directive 93/22/EEC (OJ of the EU L 145, p. 1), 2. bid for the takeover shall mean a publicly announced bid, mandatory or voluntary, addressed to all shareholders of the target company for the acquisition of all shares carrying voting rights, under the terms

and conditions and in the manner prescribed by this Act. The takeover bid may be simultaneously published also for the acquisition of shares that do not carry voting rights, 3. acquirer shall mean a natural or a legal person that acquires or has acquired target company's voting shares, 4. offeror shall mean a natural person or a legal person that, pursuant to the provisions of this Act, is obliged to publish a takeover bid or has announced its intention to publish a takeover bid, 5. voting shares shall mean all issued shares of the target company that carry voting rights, 6. depository shall mean a central depository agency or a bank with the registered office in the Republic of Croatia, 7. the Agency shall mean the Croatian Financial Services Supervisory Agency, 8. Member States shall mean the states of the European Economic Area. GENERAL PROVISIONS Article 3 Participants in the takeover procedure shall adhere, in the takeover procedure and in exercising of their rights and obligations, to the following principles: 1. shareholders of the target company that hold the same class of the target company's shares to which the takeover bid refers shall have the same position in the takeover procedure, 2. shareholders of the target company to whom the takeover bid refers shall have sufficient time and information providing them with the full insight into the state of affairs in order to make a decision on a takeover bid, 3. in the course of the takeover procedure, the management and supervisory board of the target company shall act in the best interest of the target company, 4. the offeror and the target company shall carry out the takeover procedure as quickly as possible, and the target company shall not be prevented from performing its business activities longer than envisaged, 5. trading in the shares of the offeror, target company and other companies participating in the takeover procedure shall not cause any market distortions, 6. the offeror may announce the takeover bid only upon the full provision of the cash compensation and other types of compensations provided for by provisions of this Act. PUBLICATION Article 4 (1) Where the Act prescribes the obligation of publication, it shall be made in the Croatian language in the Official Gazette and in one daily newspaper which is regularly marketed in the entire territory of the Republic of Croatia. (2) The obligation of publication shall be deemed fulfilled if, before the expiry of the deadline, the advertisers accepted the orders for publication in the first following issue.

(3) By way of derogation from paragraph 2 of this Article, in case of the amended takeover bid, competitor's bid and withdrawal of the takeover bid, the obligation of publication shall be deemed fulfilled upon publication in one newspaper, with the acceptance of the order for publication in the first following issue of some other newspaper. (4) The evidence of the acceptance of the publication order and the evidence of the publication shall be delivered without delay to the Agency whenever there is the obligation of publication pursuant to the provisions of this Act. (5) The offeror and persons acting in concert with the offeror and members of the management and supervisory board of the target company shall not communicate with the public except in cases of the compulsory publication pursuant to the provisions of this Act. ACTING IN CONCERT Article 5 (1) Persons acting in concert shall be natural and/or legal persons cooperating mutually or with the target company on the basis of the agreement, express or tacit, oral or written, whose goal is the acquisition of voting shares, harmonised exercising of voting rights or preventing some other person to carry out the takeover procedure. (2) The following persons shall be deemed to act in concert: 1. persons related only through circumstances concerning the acquisition of shares, such as: time or period in which the shares were acquired, place of acquisition, manner of acquisition, provisions of the acquisition agreement, value of acquired shares, other circumstances that led to the acquisition of shares that indicate harmonised acquisition or joint intention of persons, 2. members of the management or supervisory board of companies that act in concert, 3. members of the management or supervisory board with companies in which they are members of the said bodies, 4. persons which in the general assembly of the target company proposed the appointment or removal of the members of the management or supervisory board, or other decisions, the adoption of which requires a three-quarter majority of votes present at the general assembly, and who voted in favour of the adoption of such decisions. (3) Legal persons, and natural and/or legal persons shall act in concert when one of them directly or indirectly controls another or other legal persons. (4) A natural and/or a legal person shall be deemed to control a legal person if: 1. it holds, directly or indirectly, more than 25% of the share capital of the legal person, 2. it has, directly or indirectly, more than 25% of the voting rights in the general assembly of the legal person, 3. it has the right to manage business and financial policies of the legal person on the basis of statutory authorisations or the authorisations arising from agreements, 4. it exerts, directly or indirectly, the prevailing influence on the management of business operations and the decision-making process. (5) Companies shall act in concert if they are interrelated pursuant to the provisions of the Companies Act. (6) Natural persons shall act in concert if they are consanguineously related by lineal kin, and in lateral kin up to the first descendant, or if they are in marital or non-marital cohabitation.

MANNER OF ACTING IN CONCERT Article 6 (1) Establishment of the acting in concert relationship on the basis of the agreement referred to in Article 5, paragraph 1 of this Act shall be considered equal to the acquisition of the voting shares. (2) Voting shares of persons acting in concert with the acquirer shall be added to the voting shares of the acquirer. (3) Where the obligation to publish a takeover bid results from the establishment of acting in concert based on the agreement referred to in Article 5, paragraph 1 of this Act or where one of persons acting in concert acquires shares so that such acquisition results in the obligation to publish a takeover bid, every such person shall be obliged to publish a takeover bid in accordance with the terms and conditions and in the manner established by this Act. The obligation to publish a takeover bid shall be deemed fulfilled if the bid has been published by any of the persons who act in concert. (4) In the case referred to in paragraph 3 of this Article, the target company may not be the offeror. Article 7 Persons who act in concert shall have a joint and several liability to fulfil all the obligations prescribed by this Act. ESTABLISHMENT OF THE NUMBER AND PERCENTAGE OF VOTING RIGHTS Article 8 (1) For the purpose of this Act, when establishing the number of the target company's voting shares held by the offeror and by persons who act in concert with the offeror, the account shall be taken of the target company's voting shares: 1. which have been acquired by those persons, 2. which such persons transferred to a third person as security, except where such person is authorised to exercise independently the voting rights arising from those shares notwithstanding the instructions of those persons, 3. for which the right of usufruct has been established in favour of those persons, 4. which the offeror may acquire through the declaration of will, as for instance the option for the purchase of shares, 5. which have been entrusted to those persons, if they can exercise independently the rights arising from those shares, at their own discretion, without specific instructions of shareholders. (2) For the purpose of this Act, the percentage of the target company's voting shares shall be calculated with respect to all voting shares of the target company, including also treasury shares of the target company and the shares that do not carry voting rights or the voting rights have been limited by law or some legal transaction. (3) Within the meaning of paragraph 1, item 1, of this Article, the offeror and persons acting in concert with the offeror shall be deemed to have acquired voting shares upon conclusion of the legal transaction or occurrence of some other legal ground for the transfer of shares, regardless of the transfer of shares and registration in the depository or target company's share

register and notwithstanding the fact that the legal transaction has been concluded under a suspensive condition. Under the same conditions, it shall be deemed that the offeror and persons acting in concert with the offeror jointly acquired voting shares also where instead of the shares they obtain certificates representing the ownership of a certain number of the target company's shares, provided that such certificates are traded on the stock exchange, as for instance global depository receipts (GDRs). The provision of paragraph 1, item 4, of this Article shall appropriately apply to the acquisition of such certificates. MANDATORY TAKEOVER BID Article 9 (1) A natural or a legal person shall publish a takeover bid where they directly or indirectly, independently or acting in concert, have acquired the target company's voting shares, so that with the previously acquired shares they exceed the threshold of the 25% of the target company's voting shares (control threshold). (2) Upon exceeding of the control threshold and publication of the takeover bid, a natural or a legal person shall publish a takeover bid where they, independently or acting in concert, through a direct or indirect acquisition of the target company's voting shares, increase the percentage of voting rights by more than 10% (additional threshold). (3) By way of derogation from the provision of paragraph 2 of this Article, a takeover bid shall be published by a natural or a legal person that upon a takeover bid, independently or acting in concert, through a direct or indirect acquisition of the target company's voting shares, increases the percentage of voting rights by less than 10%, if such acquisition leads to the exceeding of the threshold of 75% of the voting rights (final threshold). (4) Mandatory publication of a takeover bid, where further acquisition of the target company's voting shares takes place, shall not be imposed upon a natural or a legal person that: 1. published a takeover bid in accordance with the provision of paragraph 2 of this Article, 2. upon the takeover bid, published in accordance with the provisions of paragraphs 1 and/or 2 of this Article, holds at least 75% of the voting rights, 3. published a takeover bid in accordance with the provision of Article 14, paragraph 3 of this Act. (5) A natural or a legal person that pursuant to the provisions of this Article is obliged to publish a takeover bid shall, without delay, deliver a notification of such obligation to the Agency, target company, stock exchange and the regulated public market on which the trade in the target company's shares has been approved, and shall publish such notification without delay. (6) Within the meaning of this Article an indirect acquisition of shares shall be deemed the acquisition of control within the meaning of Article 5, paragraph 4 of this Act. VOLUNTARY TAKEOVER BID Article 10 (1) A person that is not obliged to publish a takeover bid in accordance with the provisions of this Act and that intends to carry out the takeover may publish a takeover bid only under the conditions and in the manner prescribed by this Act. (2) In case of paragraph 1 of this Article, a person intending to carry out the takeover shall, without delay, deliver a notice on the intention to publish a takeover bid to the Agency, target

company, stock exchange and the regulated public market on which the trade in shares of the target company has been approved, and shall publish the takeover bid without delay. (3) Upon issuance of the notification referred to in paragraph 2 of this Article, the person intending to carry out the takeover shall become obliged to publish a takeover bid under the conditions and in the manner established by this Act. (4) The obligation to publish a takeover bid shall also arise where the offeror published the notification that does not contain the data referred to in Article 22, paragraph 1, items 1, 2, 3 and 4, of this Act and/or the offeror published the notification in some other manner from which it is visible that the offeror, independently or acting in concert, intends to carry out the takeover of the target company. (5) In case of the competitors' bids, any acquisition of the target company's voting shares by the future competitive offeror shall be null and void from the moment of the announcement of the intention of the takeover by the first offeror. NOTIFICATION OF THE PUBLICATION OF THE TAKEOVER BID Article 11 (1) Notifications referred to in Article 9, paragraph 5 and Article 10, paragraph 2 of this Act shall contain the data referred to in Article 22, paragraph 1, items 1, 2, 3 and 4, of this Act and the offeror's statement that he/she will publish a takeover bid within a deadline prescribed by this Act. (2) The management of the stock exchange and of the regulated public market on which the trade in the target company's shares has been approved may use, before publication, the received notifications referred to in paragraph 1 of this Article only for the purpose of making a decision whether the trade in the target company's shares should be suspended or not. (3) The target company shall inform the Agency, without delay, about the receipt and the content of the received notification referred to in paragraph 1 of this Article and about all actions or negotiations with the offeror or the persons acting in concert with the offeror, or that such actions or negotiations are not taking place. (4) The target company shall inform the representatives of employees, or where they are absent the employees, about the content of the received notification referred to in paragraph 1 of this Article. STATEMENT ON THE INTENTION TO PUBLISH A TAKEOVER BID Article 12 (1) The Agency may request from a natural and/or legal person an explicit statement on the intention of takeover, if the situation on the capital market indicates a potential takeover, and particularly where: 1. circumstances indicate that a takeover agreement exists, or 2. the trade volume and the price of the target company's shares on the stock exchange or the regulated public market significantly changed, or 3. natural and/or legal person express their wish to carry out a takeover in some other way, for instance they communicate with the public. (2) The statement referred to in paragraph 1 of this Article shall be delivered to the Agency by a natural and/or legal person without delay.

(3) In case of paragraph 1 of this Article, the Agency may require from the target company an explicit statement confirming whether it is acquainted with the intention of the takeover, which that company shall deliver to the Agency without delay. (4) At the request of the Agency, a natural and/or a legal person shall without delay publish and deliver to the stock exchange and the regulated public market on which the trade in the shares of the target company has been approved the statement which they deliver to the Agency. PROHIBITION OF THE CIRCUMVENTION OF THE TAKEOVER PROCEDURE AND EXCLUSION OF THE VOTING RIGHTS Article 13 (1) A bid or a general bid directed to the shareholders of the target company with the aim to acquire the voting shares shall not be allowed if such acquisition shall lead to the obligation to publish a takeover bid. (2) A public call or any other call directed to the shareholders of the target company to present a bid with the aim to acquire voting shares shall not be allowed if such acquisition shall lead to the obligation to publish a takeover bid. (3) The offeror and the persons acting in concert with the offeror may not exert the voting rights arising from all acquired shares of the target company in the following cases: 1. from the first day of the delay until the day of fulfilment of this obligation where, after the obligation to publish a takeover bid arises, they fail to submit the request for approval of the publication of the takeover bid within the legal deadline, 2. where the Agency denies or rejects the request for approval of the publication of the takeover bid, from the day on which the decision denying or rejecting such request becomes final until the day on which the Agency's decision approving the publication of the takeover bid becomes final, 3. where, after the Agency approves the publication of the takeover bid, they fail to publish it within the legal deadline, from the first day of the delay until the day of the fulfilment of this obligation. EXCEPTIONS TO THE OBLIGATION TO PUBLISH A TAKEOVER BID Article 14 (1) The acquirer shall not be obliged to publish a takeover bid if: 1. shares of the target company are acquired through inheritance, 2. shares of the target company are acquired through the division of matrimonial assets, 3. shares of the target company are acquired through the increase of the share capital, through the issuance of shares, and the target company's general assembly that adopts the decision on the increase of the share capital approves to the acquirer the acquisition of the target company's voting shares without the obligation to publish a takeover bid, if such acquisition of the voting shares would lead to the obligation of the acquirer to publish a takeover bid, 4. the acquirer acquires the shares of the target company which is a bankruptcy debtor in the bankruptcy proceedings, 5. shares of the target company are acquired in the process of the merger of companies, but exclusively where only one of the companies participating in the merger procedure holds the shares of the target company,

6. shares of the target company are acquired through the change of the legal form of the company, 7. a legal person acquires the shares of the target company from another legal person whose members or shareholders are directly or indirectly the same persons or when the shares are acquired by transfer due to the restructuring of the concern, 8. the shares of the target company are acquired in exchange for the dividend payment and the general assembly of the target company approves to the acquirer the acquisition of the target company's voting shares without the obligation to publish a takeover bid, if such acquisition of the voting shares would lead to the acquirer's obligation to publish a takeover bid, 9. after completed takeover bid, the shares of the target company are acquired through a transfer among persons that in the takeover bid acted in concert, 10. by acquiring the target company's shares the acquirer holds the percentage of the voting shares that is equal to or less than the percentage of the voting shares held by another target company's shareholder who published a takeover bid, 11. as a credit institution, within 6 months from the day when it became a lawful owner of the shares which it acquired as a fiduciary owner, if the same shares are released, 12. as creditors, if they acquire the shares of the companies in rehabilitation in accordance with the Act on Rehabilitation of Certain Companies, 13. it is prescribed by a special regulation. (2) The approval referred to in paragraph 1, items 3 and 8, of this Article, shall be given by the general assembly of the target company through a three-quarter majority votes present at the general assembly, excluding the votes of the acquirer and persons acting in concert with the acquirer. (3) Persons referred to in paragraph 1 of this Article that are exempt from the obligation to publish a takeover bid shall be obliged in case of further acquisition of the target company's shares to publish a takeover bid in the manner and under the conditions established by this Act. (4) The Republic of Croatia, the Croatian Privatisation Fund and the State Agency for Deposit Insurance and Bank Rehabilitation, as acquirers of the target company's voting shares, shall not be obliged to publish a takeover bid if they within 14 days from occurrence of the obligation to publish a takeover bid inform the Agency and the target company about their intention to release the shares exceeding the 25% threshold, provided that they release the surplus shares within a period of 6 months. (5) The Croatian Privatisation Fund, where it independently or acting in concert acquires the shares of the target company in accordance with the Privatisation Act, shall not be obliged to publish a takeover bid. ACCESS TO THE DEPOSITORY OR SHARE REGISTER Article 15 Where the offeror is obliged to publish a takeover bid, the target company, i.e. the central depository agency shall be obliged to enable the offeror, at the offeror's request, the access to the data from the depository i.e. share register referring to the shareholders and shares of the target company. PRICE IN THE TAKEOVER BID Article 16

(1) The offeror and persons acting in concert with the offeror shall offer the same price for all shares of the same class or an equal number of the replacement shares. (2) The price in the takeover bid may not be lower than the highest price at which the offeror and persons acting in concert with the offeror acquired the voting shares in the period of one year prior to the day of the occurrence of the obligation. (3) Where the average price of shares reached on stock exchanges and regulated public markets is higher than the price referred to in paragraph 2 of this Article, the offeror shall be obliged to offer a higher price, provided that the average price is calculated for each stock exchange or regulated public market as a weighted average of all prices reached at the stock exchange or the regulated public market in the last three months prior to the occurrence of the obligation to publish a takeover bid. (4) Where the offeror and persons acting in concert with the offeror did not acquire the voting shares during the one-year period prior to the date of the occurrence of the obligation, the price in the offer shall not be lower than the average price reached at stock exchanges or regulated public markets. (5) Where the offeror and/or the person acting in concert with the offeror, contrary to the provision of Article 40 of this Act, acquire or release the shares of the target company at the price that is higher than the price referred to in paragraphs 2, 3 and 4 of this Article, they shall be obliged to offer a higher price in the takeover bid. (6) Where the offeror fails to submit the request for approval of the publication of the takeover bid within the deadline referred to in Article 24, paragraph 1 of this Act, the average price referred to in paragraph 3 of this Article shall be calculated as a weighted average of all prices reached on the stock exchange or the regulated public market, separately for each subsequent quarter, starting from the quarter preceding the day of the occurrence of the obligation to publish a takeover bid until the day of the submission of the offer, and the offeror shall offer in the takeover bid at least the highest quarterly price calculated in the mentioned period, if that price is higher than the price referred to in paragraph 2 of this Article. (7) Where the offeror or the person acting in concert with the offeror, within a one-year period from the lapse of the takeover bid period, acquires the shares of the target company which were subject of the bid, at the price which is higher than the bid price, the offeror shall be obliged to pay the difference in price to the shareholders who accepted the takeover bid, within 7 days from the day of acquisition. (8) The obligation referred to in paragraph 7 of this Article shall not refer to the acquisition of shares in cases of status changes or the increase of the target company's share capital or where the target company's shares are acquired instead of the dividend payment. COMPENSATION IN THE TAKEOVER BID Article 17 (1) The offeror may offer in compensation for the takeover of shares which are subject of the takeover bid the following: cash (cash compensation), replacement shares (replacement compensation), combination of cash and replacement shares in which case the offeror may freely determine the ratio of cash to the replacement shares (combined compensation). (2) Where the offeror offers for the takeover of the shares, which are subject of the takeover bid, the replacement or combined compensation, the offeror shall be obliged to offer the cash compensation as an alternative.

(3) Replacement shares shall be listed at least in the same quotation or quotation of the same grade of transparency as the shares which are the subject of the takeover bid, of the same type and class as the shares that are the subject of the takeover bid and shall not be encumbered. (4) The Agency shall prescribe in an ordinance the terms and conditions under which the offeror may offer in the takeover bid the replacement or combined compensation. ASSURANCE OF COMPENSATION Article 18 (1) Prior to the submission of the request for approval of the publication of the takeover bid, the offeror shall assure the compensation for takeover of all shares that are the subject of the takeover bid. (2) The provision of paragraph 1 of this Article shall appropriately apply also where the offer will be changed at the higher price. Article 19 (1) For the purpose of assuring the cash compensation, the offeror shall be obliged to deposit to a special account with the depository the cash assets needed for payment of all shares that are the subject of the takeover bid and/or deliver to the depository an irrevocable first call bank guarantee issued in favour of persons that will give in custody their shares in the takeover bid. (2) The validity period of a bank guarantee may not be shorter than 15 days from the last day of the deadline for payment for the shares referred to in Article 37, paragraph 2 of this Act. (3) The offeror, the person acting in concert with the offeror and the target company may not issue a bank guarantee referred to in paragraph 1 of this Article. (4) The offeror may not dispose of the cash assets which are, due to the assurance for the payment of custody shares, allocated to a special account with the depository, except for the payment of the custody shares. (5) The Agency may prescribe additional conditions to be fulfilled by the bank issuing a guarantee referred to in paragraph 1 of this Article as well as the content of the agreement on the issuance of a bank guarantee. Article 20 For the purpose of assuring a replacement or combined compensation, the offeror shall deposit in custody the replacement shares on a special account with the depository. AGREEMENT ON SHARE CUSTODY SERVICES Article 21 (1) Prior to the submission of the request for approval of the publication of the takeover bid, the offeror shall conclude with the depository an agreement on custody of shares that are the subject of the takeover bid. (2) If the shares that are the subject of the takeover bid appear in legal transactions in the form of electronic records of the central depository agency, the depository shall be the central depository agency.

(3) If the shares that are the subject of the takeover bid do not exist in the form of the electronic records with the central depository agency, the offeror shall conclude an agreement on share custody services with the bank registered in the Republic of Croatia and the bank shall accept in the agreement all prescribed obligations and responsibilities of the depository towards the offeror and every shareholder that gives the shares in custody, so that the shareholder may request indemnification from the bank on the basis of the said agreement. (4) The offeror and the depository shall have a joint and several liability for any damages suffered by a shareholder in relation to the share custody services. (5) When concluding the agreement referred to in paragraph 1 of this Article, the offeror shall provide to the depository all data necessary for the preparation and carrying out share custody services. MANDATORY CONTENT OF THE TAKEOVER BID Article 22 (1) A takeover bid shall contain all necessary data to enable the shareholders to decide upon the acceptance of the offer and particularly: 1. the name, registered office and business address of the target company, the amount of the share capital and the data on the type, class and number of shares (in the absolute and relative amounts) which constitute the share capital of the target company, 2. the name, legal form, registered office and business address, i.e. the name, family name and the address of the offeror, 3. the name, legal form, registered office and business address i.e. the name, family name and the address of persons acting in concert with the offeror and the description of the manner of acting in concert, 4. data on the type, class and number (in the absolute and relative amounts) of shares and votes of the target company held by the offeror and persons acting in concert with the offeror, 5. data on the type and class of shares that are subject of the takeover bid, 6. the percentage of shares constituting the condition referred to in Article 23, paragraph 2, item 2, of this Act, if the takeover bid is conditional, 7. a clear statement that the takeover bid is directed towards all shareholders of the target company, for acquisition of all shares that are the subject of the bid, under the prescribed and published terms and conditions, 8. the price which the offeror is obliged to pay per share and the manner of establishing the price, 9. where the offer includes the replacement or combined compensation, data on replacement shares and rights arising therefrom, the price of replacement shares, terms and conditions of the replacement and the issuer of the replacement shares, 10. source and manner of assuring the compensation for payment of the shares that are the subject of the takeover bid, 11. payment period, 12. validity period of the takeover bid, 13. the name, registered office and business address of the depository, 14. instructions on the manner and effect of the custody of shares and other rights and obligations of shareholders that give the shares in custody, and particularly on the right of shareholders to withdraw the shares from the custody and to withdraw from the acceptance of the takeover bid, 15. intention of the offeror concerning the future operations of the target company and, to the extent to which it is influenced by the takeover bid, the future operations of the offeror's

company; strategic plans of the offeror with respect to the target company and possible consequences of the implementation of those plans to the employment policy and working and legal status of the employees of the target company and the offeror's company, as well as to the possible changes related to the places in which the target company and the offering company perform their operations; intention of the offeror in relation to the management of the target company and the data on cash and non-cash disbursements as well as other benefits that are given or are likely to be given to the members of the management and supervisory board of the target company, 16. the amount of the indemnification for limitations and/or elimination of rights of shareholders as a consequence of the rules on limitations referred to in Article 44 of this Act, if it is applied, and details on the manner of payment and the method used for establishment of indemnification, 17. indication of the state whose law shall apply to contractual relationships among the offeror and persons that accepted the takeover bid and the indication of the competent court, 18. other conditions of the takeover bid established by regulations adopted on the basis of this Act. (2) The Agency may require from the offeror to provide additional data relating the content of the takeover bid. (3) In addition to the takeover bid which is delivered to the Agency, the offeror shall enclose the following documents in their original form or a copy thereof verified by a notary public: 1. documents of legal transactions whereby the offeror and persons acting in concert with the offeror acquired the shares of the target company in the period of 1 year prior to the occurrence of the obligation to publish a takeover bid, and in the case of the acquisition and release of shares contrary to the provision of Article 40 of this Act also the documents regarding such legal transactions, 2. statement of the offeror and persons acting in concert with the offeror expressing that, except legal transactions referred to in item 1 of this paragraph, they did not conclude other legal transactions for the purpose of acquiring shares of the target company, 3. certificate of the depository regarding the assurance of the compensation for the takeover of all shares that are the subject of the takeover bid, 4. certificate of the stock exchange or a regulated public market, issued at the request of the offeror, regarding the average price referred to in Article 16, paragraphs 3 and 6 of this Act, 5. agreement with the depository regarding the share custody services, 6. previous consent of the Croatian National Bank, where the subject of the takeover are bank shares, i.e. the previous consent of some other competent institution, in other cases where this is prescribed by law, 7. excerpts from the court register or some other appropriate register evidencing a legal form, registered office, business address, authorised representatives, not older than 30 days counting from the day of the submission of the offer, translated into the Croatian language by a certified court interpreter, where the offeror and the person acting in concert with the offeror are legal persons with the registered office abroad, 8. statement whereby a proxy is appointed (name of the company, registered office, business address i.e. the name, family name and address) for the delivery of documents in the Republic of Croatia, if a legal or natural person has a registered office i.e. temporary or permanent residence abroad, 9. other documentation at the request of the Agency, 10. proof on the payment of the administrative tax and fee. (4) Where the documents, which are enclosed to the takeover bid, are written in a foreign language, their translation by a certified court interpreter shall also be submitted.

CONDITIONAL TAKEOVER BID Article 23 (1) The obligation to purchase shares which are the subject of the takeover bit may not be made conditional by the offeror. (2) By way of derogation from the provision of paragraph 1 of this Article: 1. the offeror may in the takeover bid state that the subject of the takeover shall not be the shares which are encumbered, 2. a voluntary takeover bid may be made conditional by the offeror upon reaching of a certain level of success which may not be lower than the control threshold. If in the takeover bid, a total percentage of the custody voting shares together with a total percentage of voting shares already held by the offeror within the meaning of Article 8 of this Act does not exceed the success threshold, the offeror may not take over the custody shares, and where with the custody shares the success threshold is exceeded, the offeror shall be obliged to take over all custody shares, under published and prescribed conditions. DECIDING UPON THE REQUEST FOR APPROVAL OF PUBLICATION OF THE TAKEOVER BID Article 24 (1) The offeror shall within 30 days from the occurrence of the obligation to publish a takeover bit submit to the Agency the request for approval of the publication of the takeover bid, takeover bid and the documents referred to in Article 22, paragraph 3 of this Act. (2) For the purpose of establishing all facts and circumstances important for decision-making, the Agency may require from the offeror to submit the additional documentation. (3) The Agency shall deliver a decision on the request of the offeror referred to in paragraph 1 of this Article, within 14 days from the day of receiving the complete request. (4) For the purpose of this Act, the request of the offeror shall be deemed complete where the Agency establishes: 1. that the offeror submitted a takeover bid, all documents referred to in Article 22, paragraph 3 of this Act and the additional documentation at the Agency's request, 2. completeness and accuracy of the data in the takeover bid and the documents enclosed to the request for approval of the publication of the takeover bid, in accordance with Article 22, paragraphs 1 and 3 of this Act, 3. that the price in the takeover bid has been established in accordance with the provisions of this Act. Article 25 (1) Where the request of the offeror is incomplete or unintelligible or where the takeover bid and all documents referred to in Article 22, paragraph 3 of this Act have not been enclosed to the request, the Agency shall require from the offeror to complete the request and to deliver the missing documentation and shall establish the period within which the offeror shall be obliged to meet that requirement. (2) Where the offeror, within the given period, fails to proceed according to the requirement of the Agency referred to in paragraph 1 of this Article, it shall be deemed that the request has not been submitted and the Agency shall adopt a conclusion whereby the request of the offeror shall be rejected.

RESPONSIBILITY FOR ACCURACY AND VERACITY OF THE DATA IN THE TAKEOVER BID Article 26 (1) The Agency shall not be responsible for the accuracy and veracity of the data stated in the takeover bid. (2) Where the takeover bid lacks the data which might influence the decision on the acceptance of the takeover bid or the takeover bid states inaccurate or wrong data, all persons that participated in the drafting and preparation of the takeover bid shall have a joint and several liability towards the shareholders for a potential damage that might arise on such grounds. PUBLICATION OF THE TAKEOVER BID Article 27 (1) The offeror shall be obliged to publish a takeover bid within 7 days from the day of receipt of the decision referred to in Article 24, paragraph 3 of this Act. (2) The takeover bid that is published after the expiry of the period referred to in paragraph 1 of this Article shall be valid. (3) Upon the receipt of the decision of the Agency referred to in Article 24, paragraph 3 and Article 29, paragraph 2 of this Act, the offeror shall be obliged to submit without delay the takeover bid and amended takeover bid to the target company, stock exchange and a regulated public market on which the trade in the target company's shares has been approved and to the depository. (4) Immediately upon the publication of the takeover bid, the target company shall inform each shareholder about the content of the takeover bid. At a request of a shareholder the target company shall provide all available information regarding the takeover bid. The same shall be valid also for all amended bids. VALIDITY PERIOD OF THE TAKEOVER BID Article 28 (1) The takeover bid shall be valid 28 days from the day of publication. Validity period of the takeover bid shall begin from the day of the subsequent publication. (2) The period referred to in paragraph 1 of this Article shall be extended in case of publication of the amended takeover bid or the publication of the competitor's bid. (3) Where the emended takeover bid is published, the validity period of the takeover bid shall be extended by 7 days. (4) The final validity period of the takeover bid and the competitor's bid may not be longer than 60 days from the day of the publication of the first takeover bid. AMENDMENTS TO THE TAKEOVER BID Article 29

(1) Amendments to the takeover bid shall be published within maximum 10 days prior to the expiry of the validity period of the takeover bid. (2) The Agency shall adopt a decision on the request of the offeror for approval of the publication of the amendments to the takeover bid, within 3 days from the day of the receipt of the complete request. (3) The takeover bid may be amended by the offeror through the increase in the offered price and/or the offer of a higher number of the replacement shares. Where the price is increased, the offeror shall increase the offered price by at least 2%. (4) Until the expiry of the period referred to in paragraph 1 of this Article the offeror shall fulfil the following conditions: 1. obtain the decision of the Agency on approval of the publication of amendments to the takeover bid, 2. publish amendments to the takeover bid, 3. inform the depository of the amendments to the takeover bid, 4. assure the difference in the compensation for the payment of the shares that are the subject of the takeover bid. (5) If the offeror in accordance with the provisions of this Act amends the takeover bid it shall be deemed that the shareholders that accepted the takeover bid also accepted amendments to the takeover bid. COMPETITOR'S BID Article 30 (1) The competitor's bid is the takeover bid which, in accordance with the provisions of this Act, a third person may publish only during the validity period of the takeover bid and which refers to the same shares of the target company as the takeover bid. (2) The competitor's takeover bid shall be published within maximum 10 days prior to the expiry of the takeover bid and not later than 28 days prior to the expiry of the final validity term of 60 days referred to in Article 28, paragraph 4 of this Act. (3) Where the competitor's bid is published, the validity period of the takeover bid shall be extended until the expiry of the validity period of the competitor's bid. The offeror shall without delay deliver the notification regarding the expiry of the validity period of the takeover bid to the target company, stock exchange and a regulated public market on which the trade in the shares of the target company has been approved and to the depository and shall publish such notification without delay. (4) Provisions of this Act that refer to the takeover bid shall appropriately apply to the competitor's bid. Article 31 (1) The competitor's bid may be published only at the price which is higher than the price in the takeover bid, whereby appropriately applied shall be the provision of Article 29, paragraph 3 of this Act. (2) The competitor's bid may be made conditional upon reaching of a certain success threshold only if such success threshold is also established in the takeover bid and if the same has not been reached until the publication of the competitor's bid. (3) The success threshold in the competitor's bid may not be higher than the success threshold in the takeover bid.

Article 32 The Agency shall reject the request for approval of the publication of the competitor's bid if it established that such bid is of a speculative nature or that it aims to change the price of shares which are the subject of the takeover bid. WITHDRAWAL OF THE TAKEOVER BID Article 33 (1) The offeror may withdraw the takeover bid where: 1. the competitor's bid is published at a higher price, 2. bankruptcy of the target company. (2) Provisions of paragraph 1 of this Act shall appropriately apply to the withdrawal of the competitor's bid. (3) The offeror shall without delay inform of the withdrawal of the takeover bid the Agency, the stock exchange and a regulated public market on which the trade in the shares of the target company has been approved, target company and the depository. (4) Withdrawal of the takeover bid shall be published by the offeror within maximum 7 days prior to the expiry of the validity period of the takeover bid. (5) Withdrawal of the takeover bid shall produce legal effects on the day of publication. CUSTODY OF SHARES Article 34 (1) Shares which in legal transactions appear in the form of electronic records of the central depository agency shall be given in custody through a transfer from the accounts of shareholders to special accounts opened for the custody of shares for the purpose of accepting the takeover offer, from which they are returned to the shareholders' accounts in case the shares are released from custody. (2) The shares referred to in paragraph 1 of this Article shall be given in custody by submitting or delivering to the central depository agency a written order for acceptance/withdrawal from the takeover bid which in addition to the data on the takeover bid, shareholder and custody shares, also contains the authorisation given to the depository to send to a guarantor, in the name and for the account of the shareholder, a written call for payment on the basis of the issued bank guarantee, and the signature of the shareholder. (3) A shareholder may withdraw the shares from the custody until the expiry of the validity period of the takeover bid. The withdrawal of the shares from custody shall have the effect of the withdrawal from the acceptance of the takeover bid, i.e. the effect of the termination of the agreement. (4) A shareholder may not waive the right to a withdrawal of shares from custody. The offeror may not make reference to the statement of a shareholder on the waiver of rights to withdraw shares from custody. Article 35 (1) A shareholder shall give in custody to a bank the shares which do not exist in the form of electronic records with the central depository agency, by way of submitting or delivering the

statement on the custody of shares and documents of shares or other documents from which it is evident that he/she is the shareholder. (2) The statement on the custody of shares shall contain personal data on the shareholder, data on the takeover bid to which the custody refers, data on custody shares, shareholder's statement on acceptance of the takeover bid and that the shares are given in custody due to their transfer to the offeror and the authorisation to the bank to send to a guarantor, in the name and for the account of the shareholder, a written call for payment on the basis of the issued bank guarantee and the signature of the shareholder. (3) The bank shall accept the shares in custody and issue a certificate thereof to the shareholder containing the data on the custody shares, the offeror and the takeover bid to which the custody refers. (4) The shareholder may withdraw the shares from custody by returning to the bank a custody certificate on which it writes and signs the statement that the shares are withdrawn from the custody. (5) The Bank shall return to the shareholder the documents given in custody, and issue at the shareholder's request a certificate of withdrawal of the shares from custody. (6) The effect of the withdrawal from the custody shall also have the delivery to the bank of a shareholder's written request for withdrawal of the shares from custody, if the bank still has not sent to the shareholder a certificate of custody. (7) The bank shall without delay inform the target company of any custody and of withdrawal of the shares from custody. The target company shall immediately register in the share register the custody of shares or release of the shares from the custody. Article 36 (1) Shareholders that give in custody shares which have not been paid to the Croatian Privatisation Fund shall, when giving the shares in custody, enclose the certificate of the Croatian Privatisation Fund regarding the number of paid and unpaid shares and the calculation for the bullet repayment of the remaining instalments before maturity. (2) Subject of the custody may not be the unpaid shares referred to in paragraph 1 of this Article for which the amount of the payment of the remaining instalments, according to the calculation of the Croatian Privatisation Fund, is higher than the price which the offeror established in the takeover bid. PAYMENT AND TRANSFER OF THE SHARES BASED ON THE TAKEOVER BID Article 37 (1) If the shareholder gave the shares in custody according to the conditions of the takeover bid, the effect of the acceptance of the takeover bid and the obligation for payment shall arise for the offeror upon expiry of the validity period of the takeover bid, except in cases referred to in Article 23, paragraph 2, item 2, and Article 33 of this Act. (2) The payment period for custody shares shall be 14 days from the day of the expiry of the validity period of the takeover bid. (3) After payment of the custody shares, the depository shall return to the offeror the surplus of the cash assets, bank guarantee or replacement shares. COSTS Article 38