Guidelines on Exempt Transactions

March 30, 2001 SEC-CFD MEMORANDUM CIRCULAR NO. 02-01 TO : All Corporations SUBJECT : Guidelines on Exempt Transactions For compliance by all corporations are the following guidelines on the sale or issuance of securities or resale of the same, pursuant to Section 10.1 of the Securities Regulation Code: I. General Rule No notice of exemption and filing fee are required for transactions covered by SRC 10.1. II. Exceptions: 1. Section 10.1 (k) a. If confirmation is requested, a duly accomplished Form 10.1 and a filing fee are required; b. In creeping transactions where the number of investors exceeds nineteen (19) within one (1) year, the shares are subject to the lock-up period of one (1) year, reckoned from the last acquisition. 2. Section 10.1 (l) a. if confirmation is requested, a duly accomplished Form 10-1 and filing fee are required; b. If the buyer/s resell said securities to more than nineteen (19) investors, Sections 8 and 12 of the SRC apply, notwithstanding the exemption of their issuances; c. If investors agree to a lock-up of one year, registration of the shares is not required. After said period, the investors can freely dispose of said shares. II. Applicability of the Implementing Rules and Regulations of SRC All other pertinent provisions of the Implementing Rules and Regulations of the Securities Regulation Code shall remain in force and effect. TaEIAS This Circular shall take effect immediately. EDSA, Mandaluyong City, Metro Manila March 30, 2001 (SGD.) LILIA R. BAUTISTA Chairman