Exhibit 10.3

 

TRADUCCIÓN PÚBLICA

SWORN TRANSLATION

 

SECOND AGREEMENT FOR THE IMPLEMENTATION OF AMENDMENTS TO THE

CORPORATE SERVICES MASTER AGREEMENT

 

Agreement made in the City of Buenos Aires on the 14th day of August of 2008 by and between:

 

(i) CRESUD S.A.C.I.F. y A., domiciled at Moreno 877, Piso 23 in the Autonomous City of Buenos Aires, represented hereat by Messrs Eduardo Sergio ELSZTAIN and Saúl ZANG in their capacities as Attorneys-in-fact (hereinafter “CRESUD”) as party of the one part;

 

(ii) Alto Palermo S.A. (APSA), domiciled at Moreno 877, Piso 21 in the Autonomous City of Buenos Aires, represented hereat by Messrs Alejandro Gustavo ELSZTAIN and David Alberto PEREDNIK in their capacities as Attorneys-in-fact (hereinafter “APSA”), as party of the second part, and

 

(iii) IRSA Inversiones y Representaciones Sociedad Anónima, domiciled at Bolívar 108, Piso 1o in the Autonomous City of Buenos Aires and having established domicile for purposes hereof at Moreno 877, Piso 22 in the Autonomous City of Buenos Aires, represented hereat by Messrs Oscar Pedro BERGOTTO and Gastón Armando LERNOUD in their capacities as Attorneys-in-fact, as party of the third part (hereinafter “IRSA” and collectively with CRESUD and APSA designated as “THE PARTIES”);

 

WHEREAS:

 

(i) On June 30, 2004 THE PARTIES executed a Master Agreement for the Exchange of Corporate Services (hereinafter “the Master Agreement”);

 

(ii) On August 23, 2007 THE PARTIES executed the first Agreement for the Implementation of Amendments to the Corporate Services Master Agreement (hereinafter the “First Agreement”), whereby certain amendments were introduced to the Areas of Exchange of Corporate Services and the Cost Distribution Bases, and new Individual In-charges were appointed;

 

(iii) THE PARTIES have implemented the Master Agreement based on an Implementation Manual updated by Deloitte & Co. S.R.L., (hereinafter “Deloitte”) on February 11, 2008;

 

(iv) In accordance with the recommendations made by Deloitte on its semi-annual reports, new operational changes have been implemented in the Areas of Exchange of Corporate Services and the Cost Distribution Bases starting in July 2007, which THE PARTIES wish to acknowledge in writing;

 

(vii) The Board of Directors of THE PARTIES have approved the SECOND AGREEMENT FOR THE IMPLEMENTATION OF AMENDMENTS TO THE CORPORATE SERVICES MASTER AGREEMENT (hereinafter the “Second Agreement”) on August 14, 2008;

 

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(viii) Additionally, THE PARTIES consider that the Second Agreement does not match the provisions under Section 73 of Decree 677/01 and they represent that they have notified the Audit Committee of the execution of the Agreement.

 

NOW IN CONSIDERATION OF THE FOREGOING, THE PARTIES hereby agree to execute this Second Agreement subject to the following terms and conditions:

 

ONE: THE PARTIES agree to change the names of the following Areas, introducing such changes to Exhibits I and II of the Master Agreement, as amended by the First Agreement:

 

	
 
    	
(i)
    	
the “Administration” Area shall be called   “Administration and Control”;
    
	
 
    	
 
    	
 
    
	
 
    	
(ii)
    	
the “Systems” Area shall be called “Systems and   Technology”;
    
	
 
    	
 
    	
 
    
	
 
    	
(iii)
    	
the “Purchases” Area shall be called “Purchases and   Hirings”;
    
	
 
    	
 
    	
 
    
	
 
    	
(iv)
    	
the “Operations” Area shall be called   “Technical, Infrastructure and Services”; and
    
	
 
    	
 
    	
 
    
	
 
    	
(v)
    	
the “Shared Services” Area shall be called “Planning   and Development”.
    


 

TWO: THE PARTIES ratify that the Areas (as defined in the Master Agreement) and the calculation method applicable to the Exchange of Operational Services (also as defined in the Master Agreement) have been changed as from the dates listed below, amending therefore Exhibits I and II, as amended by the First Agreement, to the Master Agreement as per the following detail:

 

	
 
    	
(i)
    	
Starting in   July 2007 and January 2008, a decision was made to modify the   distribution method applicable to the Administration and Control Area of   Exhibit II such that as from that date it should be made up as detailed   in the new Exhibit II.
    
	
 
    	
 
    	
 
    
	
 
    	
(ii)
    	
Starting in   July 2007, a decision was made to modify the distribution method   applicable to the Technical, Infrastructure and Services Areas of   Exhibit II such that as from that date it should be made up as detailed   in the new Exhibit II.
    
	
 
    	
 
    	
 
    
	
 
    	
(iii)
    	
Starting in   July 2007, a decision was made to modify the distribution method   applicable to the Planning and Development Area of Exhibit II in a manner   such that as from that date it should be made up as detailed in the new   Exhibit II.
    
	
 
    	
 
    	
 
    
	
 
    	
(iv)
    	
Starting in   July 2007, a decision was made to include the Works Development   Department within the Areas mentioned in Exhibit I of the Master   Agreement and therefore, also in Exhibit II.
    
	
 
    	
 
    	
 
    
	
 
    	
(v)
    	
Starting   July 2007, a decision was made to include the Real Estate Department   within the Areas mentioned in Exhibit I of the Master Agreement and   therefore, also in Exhibit II.
    


 

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(vi)
    	
Starting   July 2007, a decision was made to include the Hotels and Tourism   Department within the Areas mentioned in Exhibit I of the Master   Agreement and therefore, also in Exhibit II.
    
	
 
    	
(vii)
    	
Starting   July 2007, a decision was made to include the Risks and Processes Area   within the Areas mentioned in Exhibit I of the Master Agreement and   therefore, also in Exhibit II.
    


 

In consideration of the foregoing, the PARTIES hereby put on record that, subject to the clarifications detailed in the preceding sub-sections and for purposes of updating Exhibits I and II, they shall read as hereto attached.

 

THREE: THE PARTIES represent that all the sections of the Master Agreement and the First Agreement that have not been amended pursuant to this Agreement continue to be fully in force.

 

In witness whereof, this Agreement is executed in three (3) copies of the same tenor and to a single effect in the place and on the date first written.

 

CRESUD S.A.C.I.F.y A.

 

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Attorneys-in-fact

 

IRSA Inversiones y Representaciones Sociedad Anónima

 

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Attorneys-in-fact

 

Alto Palermo S.A. (APSA)

 

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Attorneys-in-fact

 

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Exhibit I

 

Description of Corporate Services Exchange Areas

 

Human Resources

 

The Human Resources sector renders to THE PARTIES the service consisting in Human Resources Administration and Management. Human Resources Administration spans payroll calculation activities, personnel administration, solidarity issues, benefits and labor relationships.

 

Human Resources Management includes personnel recruitment, selection, training, job rotation and related activities.

 

Finance

 

The Finance sector renders to THE PARTIES the service consisting in Investor Relations, Capital Markets and general finance in relation to financial transactions.

 

Institutional Relations

 

The Institutional Relations sector renders to THE PARTIES the service consisting in the development and control of advertising, broadcasting and marketing actions, relations with the media, preparation of articles, brochures and related activities.

 

Administration and Control

 

The Administration and Control sector controls all the accounting transactions of THE PARTIES. It is responsible for the companies’ management control and budget, and its main activities consist in the preparation of the financial statements, tax management, supervision of accounts payable and collections.

 

Systems and Technology

 

The Systems and Technology sector renders to THE PARTIES the service consisting in maintaining, supporting and updating the IT structure.

 

Support and maintenance at the user level, help desk, back-up and security issues as well as all related activities.

 

Updates, control and follow-up of software licenses.

 

Maintenance, updates and support for infrastructure and communications aspects.

 

Insurance

 

The Insurance sector is in charge of managing THE PARTIES’ assets’ coverage by negotiating, acquiring and monitoring insurance policies, dealing with claims in terms of coverage, collection, etc.

 

Purchases and Hirings

 

The Purchases and Hirings sector is in charge of acquiring the goods and/or services that are most adequate to the intended use, at the lowest cost and in compliance with the deadline set by users.

 

Furthermore, it takes all necessary measures to obtain the adequate supplier financing for any such purchases.

 

Errand Running Service

 

The Errand Running Service renders to THE PARTIES the service consisting in sending and distributing internal and external documentation, menial procurements, going on errands, etc.

 

Contracts

 

The Contracts sector renders to THE PARTIES the service consisting in aid to the preparation, analysis and response to legal briefs, agreements, official letters, etc.

 

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Technical, Infrastructure and Services

 

The Technical, Infrastructure and Services sector renders to THE PARTIES the services consisting in surveillance and maintenance.

 

Internal Audit

 

The Internal Audit sector renders to THE PARTIES the services consisting in operational review and control.

 

Planning and Development

 

The Planning and Development Department renders to THE PARTIES the service consisting in the operational coordination of the Human Resources, Institutional Relations, Systems and Technology, Purchases and Hirings, Technical, Infrastructure and Services, and Risks and Processes departments.

 

Works Development

 

The Works Development sector renders to THE PARTIES the services consisting in control/supervision over works.

 

Real Estate

 

The Real Estate sector renders to THE PARTIES the services consisting in sales and acquisitions of real estate, except for real estate assigned to the agricultural business.

 

It monitors the properties considered to be “land reserves” and takes part in the businesses arising from governmental grants (exploitation concessions and private initiatives).

 

Hotels and Tourism

 

The Hotels and Tourism sector renders to THE PARTIES the services consisting in the integration of the different areas of hotels along with their business relations.

 

It carries out activities to optimize and control hotels’ management and organization.

 

It carries out activities aimed at leading tourists to visit and consume in shopping centers.

 

Risks and Processes

 

The Risks and Processes sector renders to THE PARTIES the services consisting in the administration and management of standards and processes, including the determination, development and publication of internal regulations.

 

Administration and management of information security, including the protection of THE PARTIES’ data.

 

Administration and management of master data, including loading such data to THE PARTIES’ systems.

 

Administration and management of risks and statutory compliance, including the identification and supervision of the main risks and duties of compliance towards regulatory agencies.

 

Quality management, including the implementation of quality models in the business units.

 

Prevention of corporate fraud.

 

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Exhibit II

 

Cost Distribution Bases

 

	
Department
    	
 
    	
Cost Center
    	
 
    	
Distribution Method
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Human Resources
    	
 
    	
Human Resources
    	
 
    	
Number of employees (headcount) under its   administration and management.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 

 

Finance    

 

Each one of the sectors is weighted at 25%.
    	
 
    	
Capital Markets
    	
 
    	
Financial transactions outstanding as of the closing   date by 40% and the amount of transactions conducted over the last 180/360   days weighted at 60%.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Relations with Investors
    	
 
    	
Number of shareholders as registered with the   Nasdaq, the volume of shares traded in US$as well as market capitalization   (the price of the shares as quoted by the number of outstanding shares) with   the price diluted as of the closing date. The three variables are weighted at   equal parts (33%).
    	
 
    
	
 
    	
 
    	
Financial Risk
    	
 
    	
Number of transactions analyzed, valued and   consummated and their amount in US$. Both variables are weighted at equal   parts (50%).
    	
 
    
	
 
    	
 
    	
Financial Administration
    	
 
    	
Total assets weighted at 40% and total liabilities   weighted at 60%.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Institutional   Relations
    	
 
    	
Institutional Relations
    	
 
    	
Tasks performed and the time spent in each.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Administration   and Control
    	
 
    	
Accounting and Administrative Operations
    	
 
    	
Accounting and Reporting (number of companies per   group and receipts per company) weighted at 45%. Administrative Operations   (income receipts, expenses receipts and number of companies per group)   weighted at 45% and Control Analysis (proportional in the 3 companies)   weighted at 10%.
    	
 
    
	
 
    	
 
    	
Taxes
    	
 
    	
Salaries are weighted according to the position and   tasks performed (per company and in equal shares).
    	
 
    
	
 
    	
 
    	
Budget and Management Control
    	
 
    	
Market capitalization weighted at 35% and actual   income (production, sales, leases) weighted at 65%.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Systems and   Technology
    	
 
    	
Systems and Technology
    	
 
    	
Number of desktops, licenses, volume of PCs and   servers.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Insurance
    	
 
    	
Insurance
    	
 
    	
Insured amounts and volume of losses (in units).   Both variables weighted and in equal shares (50%).
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Purchases and   Hirings
    	
 
    	
Purchases and Hirings
    	
 
    	
Purchase orders by weighing their volumes and   amounts.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Errand Running   Service
    	
 
    	
Errand Running Service
    	
 
    	
Number of errands run.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Contracts
    	
 
    	
Contracts
    	
 
    	
Tasks performed and the time spent in each.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Technical, Infrastructure and Services    

 

The two variables are averaged (mix).
    	
 
    	
Security
    	
 
    	
By the hour.
    	
 
    
	
 
    	
Maintenance
    	
 
    	
By surface area (real properties’ square meters).
    	
 
    


 

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Internal Audit
    	
 
    	
Internal Audit
    	
 
    	
Tasks performed and the time spent in each.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Planning and Development
    	
 
    	
Planning and Development
    	
 
    	
Average based on the use by each company of the   corporate areas. (it is assumed that each company renders services to the   rest of the Areas)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Business Analysis
    	
 
    	
Salaries are weighted according to the position and   tasks performed (per company and in equal shares).
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Works Development
    	
 
    	
Works Development
    	
 
    	
Tasks performed and the time spent in each.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Real Estate
    	
 
    	
Real Estate
    	
 
    	
Salaries are weighted according to the position and   tasks performed (per company and in equal shares).
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Hotels and Tourism
    	
 
    	
Hotels and Tourism
    	
 
    	
Salaries are weighted according to the position and   tasks performed (per company and in equal shares).
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Risks and Processes
    	
 
    	
Master Data
    	
 
    	
Weighing of the time spent in each task and its   respective amount.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
OYM
    	
 
    	
Weighing of the time spent in each task and its   respective amount.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
IT Security
    	
 
    	
Weighing of the time spent in each task and its   respective amount.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Fraud
    	
 
    	
Weighing of the time spent in each task and its   respective amount.
    




 

THIS DOCUMENT, CONSISTING OF 7 (seven) PAGES, IS A TRUE AND ACCURATE TRANSLATION into English of the document in Spanish I have had before me in Buenos Aires, on this 18th day of November, 2008.

 

[For authentication purposes only:]

 

ESTE DOCUMENTO, COMPUESTO DE 7 (siete) PÁGINAS, ES TRADUCCIÓN FIEL al inglés del documento adjunto redactado en idioma castellano que he tenido ante mí y al cual me remito en Buenos Aires, a los 18 días de noviembre de 2008.