UNITED STATES
	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549
	SCHEDULE 13D

 

Under the Securities Exchange Act of 1934
(Amendment No. 2)*

 

(Name of Issuer)

 

(Title of Class of Securities)

 

(CUSIP Number)

 

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

 

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

*The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

** The CUSIP number is for the American Depositary Shares relating to the Common Shares. No CUSIP number exists for the underlying Common Shares, since such shares are not traded in the United States.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

Schedule 13D

 

 

(1)           Represents the aggregate number of Common Shares of Oi S.A. with respect to which the Reporting Person may be deemed to share voting and dispositive power pursuant to the shareholders’ agreements described in Item 6 of this Statement on Schedule 13D.

 

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Schedule 13D

 

 

(1) Represents the aggregate number of Common Shares of Oi S.A. with respect to which the Reporting Person may be deemed to share voting and dispositive power pursuant to the shareholders’ agreements described in Item 6 of this Statement on Schedule 13D.

 

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Schedule 13D

 

 

(1) Represents the aggregate number of Common Shares of Oi S.A. with respect to which the Reporting Person may be deemed to share voting and dispositive power pursuant to the shareholders’ agreements described in Item 6 of this Statement on Schedule 13D.

 

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Schedule 13D

 

 

(1) Represents the aggregate number of Common Shares of Oi S.A. with respect to which the Reporting Person may be deemed to share voting and dispositive power pursuant to the shareholders’ agreements described in Item 6 of this Statement on Schedule 13D.

 

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Schedule 13D

 

 

(1) Represents the aggregate number of Common Shares of Oi S.A. with respect to which the Reporting Person may be deemed to share voting and dispositive power pursuant to the shareholders’ agreements described in Item 6 of this Statement on Schedule 13D.

 

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Schedule 13D

 

 

(1) Represents the aggregate number of Common Shares of Oi S.A. with respect to which the Reporting Person may be deemed to share voting and dispositive power pursuant to the shareholders’ agreements described in Item 6 of this Statement on Schedule 13D.

 

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Schedule 13D

 

 

(1) Represents the aggregate number of Common Shares of Oi S.A. with respect to which the Reporting Person may be deemed to share voting and dispositive power pursuant to the shareholders’ agreements described in Item 6 of this Statement on Schedule 13D.

 

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Schedule 13D

 

Preliminary Statement

 

This Amendment No. 2 (this “Amendment”) amends the Statement on Schedule 13D, filed on June 13, 2012 (the “Original Schedule 13D”), by the entities identified on the cover pages of this Schedule 13D (collectively, the “Reporting Persons”), as amended by Amendment No. 1 to the Original Schedule 13D (“Amendment No. 1”, the Original Schedule 13D as amended by Amendment No. 1 and as further amended by this Amendment, this “Statement”), filed on October 8, 2013, by the Reporting Persons.  Except as otherwise specified in this Amendment, all previous Items are unchanged.  Capitalized terms used herein which are not defined herein have the meanings given to them in the Original Schedule 13D and Amendment No. 1.

 

On October 1, 2013, Portugal Telecom, SGPS, S.A. (“Portugal Telecom”) entered into a Memorandum of Understanding (“MOU”) with Oi S.A. (“Oi” or the “Issuer”), AG Telecom Participações S.A. (“AG Telecom”), LF Tel. S.A. (“LF Tel”), Pasa Participações S.A. (“Pasa”), EDSP75 Participações S.A. (“EDSP75”), Bratel Brasil S.A. (“Bratel” and, together with AG Telecom, LF Tel, Pasa, EDSP75 and Telemar Participações S.A. (“TmarPart”), the “Oi Holding Companies”), Avistar, SGPS, S.A., a shareholder of Portugal Telecom and an affiliate of Banco Espírito Santo, S.A. (“BES”), and Nivalis Holding B.V., a shareholder of Portugal Telecom and an affiliate of RS Holding, SGPS, S.A. (“Nivalis”), with respect to a proposed combination (the “Business Combination”) of the businesses of Portugal Telecom, Oi and the Oi Holding Companies into TmarPart.  Portugal Telecom and Oi announced the Business Combination on October 2, 2013.  Pursuant to the Business Combination, among other things, Oi is expected to become the owner of the PT Assets and a wholly owned subsidiary of TmarPart, and Portugal Telecom is expected to merge with and into TmarPart with TmarPart as the surviving company.  See Items 4, 6 and 7 of the Statement.

 

On January 27, 2014, Portugal Telecom announced that all services rendered by TMN — Telecomunicações Móveis Nacionais, S.A. (“TMN”) would be provided under the MEO brand and that TMN had changed its designation to MEO — Serviços de Comunicações e Multimédia, S.A. (“MEO”).  All references to “TMN — Telecomunicações Móveis Nacionais, S.A.” and “TMN” in the Statement are hereby replaced, respectively, with “MEO — Serviços de Comunicações e Multimédia, S.A.” and “MEO.”

 

In addition, all references to “CorpCo” and “TelPart”  in the Statement are hereby replaced with “TmarPart,” as it has now been determined that TmarPart will be the surviving entity in the Business Combination.

 

The Reporting Persons are filing this Amendment No. 2 to update the information previously reported in connection with the proposed Business Combination.

 

Item 3.                     Source of Funds

 

The information set forth in Item 3 of the Statement is hereby amended by adding the following paragraphs at the end thereof:

 

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Schedule 13D

 

Prior to the consummation of the Capital Increase, Portugal Telecom is expected to undertake a series of transactions with the purpose of transferring to PT Portugal, SGPS, S.A. (“PT Portugal”) all or substantially all of its assets, other than the interests it holds directly or indirectly in Oi and Contax, and all or substantially all of its liabilities on the date of contribution.

 

In connection with the Capital Increase, Banco Santander (Brasil), S.A. was engaged to prepare a valuation report (“PT Assets Valuation Report”), to determine the value of the shares of PT Portugal (and consequently of the assets and liabilities to be transferred to PT Portugal) (the “PT Assets”). According to the PT Assets Valuation Report, the PT Assets were valued at an amount between €1,623.3 million and €1,794.1 million. For purposes of the subscription in the Capital Increase, the Board of Directors of Oi has determined a value for the PT Assets of €1,750 million, or R$5,709.9 million, based on the Euro-Real exchange rate on February 20, 2014, the day before the first publication of the notice for the extraordinary general meeting of the shareholders of Oi to approve the PT Assets Valuation Report, in accordance with the subscription agreement signed by Portugal Telecom and Oi that is described in Item 6 below.

 

Item 4.                     Purpose of Transaction

 

The reference to “TmarPart or another company constituted for that purpose (in either case, “CorpCo”)” under the subsection of Item 4 of the Statement entitled “Proposed Business Combination with Oi” is hereby replaced with “TmarPart,” as it has now been determined that TmarPart will be the surviving entity in the Business Combination.

 

Item 5.       Interest in Securities of the Issuer

 

The information set forth in Items 5(a) and (b) of the Statement is hereby amended by adding the following paragraphs at the end of the subsection of the Statement entitled “Information as to Common Shares of the Issuer that May Be Deemed to Be Beneficially Owned by the Reporting Persons”:

 

On February 19, 2014, Portugal Telecom entered into a subscription agreement with Oi in connection with Oi’s Capital Increase, pursuant to which Portugal Telecom has a right to acquire shares of Oi, to be paid for by contributing the shares of PT Portugal (and consequently the PT Assets) to Oi.  Pursuant to the subscription agreement, the price per share will be equivalent to the price per share in the cash portion of the Oi Capital Increase, which will be determined through a bookbuilding process in connection with a global offering.  Although the economic value of the PT Assets to be contributed by PT to Oi in the Oi Capital Increase has been determined, as described in Item 3 above, the number of shares cannot be determined until the pricing of the global offering component of the Oi Capital Increase. For the description of the subscription agreement, see “Agreement by Portugal Telecom to Subscribe for Shares of Oi” set forth under Item 6 below.

 

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Schedule 13D

 

In addition, the subscription by Bratel of the debentures described in “Debenture Subscription Agreements and Private Deeds” under Item 6 below, and the conversion of such debentures into common and preferred shares of the issuers thereof in accordance with their terms in connection with the Business Combination, will have the effect of increasing the Reporting Persons’ beneficial ownership of the capital stock of Oi.  The Reporting Persons’ existing beneficial ownership interests in the capital stock of TmarPart and Oi will be added to the shares to be acquired in the Oi Capital Increase, the share exchanges described in Item 6, the subscription and conversion of the debentures by the parties thereto, and the other steps of the Business Combination will cause Portugal Telecom to beneficially own interests in TmarPart and Oi such that Portugal Telecom is expected to hold between 36.6% and 39.6% of TmarPart after giving effect to the Merger of Shares of Oi into TmarPart.  See Item 6 below, which is hereby incorporated by reference into this Item 5(a) and (b).

 

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

 

Item 6 of the Statement is hereby amended by adding the following subsections at the end thereof:

 

Share Exchange Agreements

 

On February 19, 2014, Bratel executed separate share exchange agreements with Andrade Gutierrez S.A. (“AG”) and Jereissati Telecom S.A. (“Jereissati”) with respect to Pasa and EDSP75, respectively, and, as intervening parties, Jereissati and AG, respectively, and Pasa, AG Telecom, EDSP75, LF Tel and Fundação Atlântico de Seguridade Social (“FASS”), in order to undertake partial spin-offs of the shares of CTX (and, indirectly, Contax) held by them, to be held by the CTX Holdcos (as described in Item 6 of the Statement under “Memorandum of Understanding Relating to CTX and Contax”).

 

Subject to the satisfaction of certain conditions precedent, including the completion of the spin-offs of the shares of CTX to be held by the CTX Holdcos and the completion of the Oi Capital Increase (including the contribution of the PT Assets), Bratel, and AG and Jereissati, agreed to exchange all shares of the CTX Holdcos’ stock capital held by Bratel, as well as 50% (fifty percent) of the shares of CTX and Contax stock capital held by Bratel, for common shares of Pasa and EDSP75 held by AG and Jereissati respectively.

 

If all conditions precedent are not satisfied by October 1, 2014, the parties are not obligated to proceed with the exchange of shares described above and will have the right to rescind the share exchange agreements.

 

Reorganization of TmarPart

 

In connection with, and following, the spin-off of the shares of CTX (and, indirectly, Contax) and the completion of the share exchanges, the parties to the Business Combination will undertake a number of steps to implement a reorganization of TmarPart (the “TmarPart Reorganization”), including (1) the incorporation of AG Telecom by Pasa, (2) the incorporation of LF Tel by EDSP75, (3) the incorporation of Pasa and EDSP75 by Bratel, (4) the partial spin-off of TmarPart, comprising of an investment in Oi proportional to the capital interest of

 

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Schedule 13D

 

TmarPart in Bratel, with the incorporation of the such spin-off assets from Bratel, (5) the spin-off of Bratel with the transfer of its remaining capital interest in TmarPart to Marnaz Holdings S.A. (“Marnaz”), (6) the incorporation of Bratel by Oi.

 

The reorganization of TmarPart is conditioned upon (1) the effective completion of the Oi Capital Increase, (2) the settlement of the AG Telecom, LF Tel and TmarPart indebtedness, (3) the Merger of Shares and (4) the Portugal Telecom Merger.

 

Amendments to Shareholders’ Agreements

 

As part of the reorganization of TmarPart described above, the Global Shareholders’ Agreement, the Control Group Shareholders’ Agreement, the Pasa Shareholders’ Agreement and the EDSP75 Shareholders’ Agreement were amended on February 19, 2014 by the shareholders parties thereto to provide that the parties agree to exercise their voting rights to approve each step of the Business Combination, including the steps described under “Reorganization of TmarPart” above.

 

The amendments to the shareholders’ agreements provide that, if the Oi Capital Increase occurs and any of the subsequent steps of the Business Combination, including the Merger of Shares and the TmarPart Reorganization, does not occur by December 31, 2014, the shareholders will use their best efforts to implement the TmarPart Reorganization and Oi to achieve the same goals intended with the Business Combination, although without the obligation to implement the TmarPart Reorganization, the Merger of Shares and the Portugal Telecom Merger (as described in Item 4).

 

In case the Business Combination is not completed by December 31, 2014, (1) any of the shareholders parties to the Pasa Shareholders’ Agreement and the EDSP75 Shareholders’ Agreement may send a notification of non-occurrence of the reorganization and require the adoption of the necessary measures in order for Bratel, PTB2 S.A. (“PTB2”), AG and Jereissati to receive shares of capital stock of Oi held by AG Telecom and LF Tel, in proportion to their respective direct and indirect capital interest in those entities, and (2) the qualified quorums provided in the Global Shareholders’ Agreement will be adjusted considering the percentage interests held by BNDESPAR, PREVI, PETROS and FUNCEF on December 31, 2014, in order to ensure that the voting rights of such shareholders are equal to those on February 19, 2014, and provided they have not reduced their respective capital interests before December 31, 2014 through the sale of shares to third parties that are not original signatories of the Global Shareholders’ Agreement or their related parties.  An amendment to the Global Shareholders’ Agreement would be executed on December 31, 2014 in order to reflect such adjustments.

 

Agreements to Terminate the Shareholders’ Agreements

 

On February 19, 2014, together with the amendments described above, the parties to each of the shareholders’ agreements described above entered into agreements to terminate each such shareholders’ agreement, subject to the satisfaction of the following conditions precedent in connection with the several steps of the Business Combination: (1) the incorporation of Pasa into

 

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Schedule 13D

 

Bratel, for the Pasa Shareholders’ Agreement, (2) the incorporation of EDSP75 into Bratel, for the EDSP75 Shareholders’ Agreement, and (3) the effective completion of the Merger of Shares (as described in Item 4) and the Portugal Telecom Merger (as described in Item 4), for the Global Shareholders’ Agreement and the Control Group Shareholders’ Agreement.

 

Temporary Voting Agreement of the Shareholders of Oi and TmarPart

 

On February 19, 2014, Portugal Telecom executed a temporary voting agreement with Caravelas Fundo de Investimento em Ações (“Caravelas”) (an investment vehicle managed by an affiliate of Banco BTG Pactual S.A.), Bratel, TmarPart, AG, Jereissati and, as intervening party, Oi, for the purpose of approving, among other things, the Merger of Shares and the Portugal Telecom Merger (as described in Item 4).

 

The parties thereto agreed to (1) call a meeting of Oi shareholders to engage the valuation bank and to approve the corresponding valuation reports as part of the steps of the TmarPart Reorganization, (2) vote in favor of the Merger of Shares and (3) vote in favor of the Portugal Telecom Merger.

 

The temporary voting agreement will remain in effect until the earlier of the Portugal Telecom Merger and December 31, 2014.

 

Attached to the Temporary Voting Agreement of the Shareholders of Oi and TmarPart described above are the forms of the related (i) Protocol and Justification for the Merger of Bratel into Oi, which sets forth the terms of the merger of Bratel with and into Oi (including that the shareholders of Bratel, which at that time will include Portugal Telecom, Venus RJ Participações S.A. (“Venus”) (a company to be controlled by AG) and Sayed RJ Participações S.A. (“Sayed”) (a company to be controlled by Jereissati), will receive the Common Shares and preferred shares of Oi held by Bratel), as a step in the Reorganization of TmarPart, and (ii) Protocol and Justification for the Merger of Shares of Oi into TmarPart, which sets forth the terms of the Merger of Shares of Oi with TmarPart (including that each Common Share of Oi will be exchanged for a common share of TmarPart and each 1.0857 preferred shares of Oi will be exchanged for a common share of TmarPart).

 

Agreement by Portugal Telecom to Subscribe for Shares of Oi

 

On February 19, 2014, Portugal Telecom executed an agreement to subscribe for shares of capital stock of Oi, in connection with the Oi Capital Increase, by contributing assets of Portugal Telecom (the “Portugal Telecom Assets”).  The Oi Capital Increase is expected to have a total value of R$14.1 billion, with a minimum of R$7.0 billion to be subscribed in cash (and with a target of R$8.0 billion), and the remainder in Portugal Telecom Assets.

 

Subject to the satisfaction of certain conditions, Portugal Telecom agrees to subscribe for shares of Oi issued in connection with the Oi Capital Increase, pursuant to subscription orders to be submitted by Portugal Telecom, through the contribution to Oi of the shares of PT Portugal, SGPS, S.A. (“PT Portugal”) to Oi.  The price per share will be equivalent to the price per share in the cash portion of the Oi Capital Increase, which will be determined through a bookbuilding process in connection with a global offering. The economic value of PT Portugal, and consequently of the Portugal Telecom Assets, was determined by a valuation report prepared by Banco Santander (Brasil) S.A.  The valuation report has been submitted for the approval of the general shareholders’ meetings of Oi and Portugal Telecom, each scheduled to be held on March 27, 2014.  After the shares of PT Portugal have been transferred by Portugal Telecom to Oi, Oi has agreed to succeed to the rights and obligations of Portugal Telecom under contracts, so long as those contracts have been indicated in the documents for the global offering component of the Oi Capital Increase.

 

Among the conditions precedent for Portugal Telecom to subscribe to the Oi Capital Increase are: (1) the approval of the valuation report of the Portugal Telecom Assets by the shareholders of Oi, (2) the approval by the Brazilian telecommunications regulator, Agência Nacional de Telecomunicações (“ANATEL”) and the Portuguese competition authority, Autoridade de Concorrência, of

 

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Schedule 13D

 

the Business Combination and (3) the approval of creditors of Portugal Telecom, where necessary to complete the Business Combination, including waivers of creditors of Portugal Telecom.

 

Among the conditions for Portugal Telecom to close are: (1) a successful global offering in Brazil and in the international markets of at least R$7.0 billion by Oi, (2) the submission of a subscription order in the global offering by Caravelas and by shareholders of TmarPart of at least R$2.0 billion and (3) the settlement of the Oi Capital Increase within a maximum of 70 (seventy) days from the date of the first call of the meeting of the shareholders of Oi.

 

If the conditions are not met or waived by October 1, 2014, Portugal Telecom may, in its sole discretion, rescind the contract.  The contract can be terminated (1) by either party, if the closing of the proposed transaction does not occur by October 1, 2014, (2) by Portugal Telecom, if, after the bookbuilding process, Portugal Telecom is expected to hold an interest of less than 36.6% of the total voting capital of CorpCo, assuming the consummation of the Merger of Shares, or (3) by Oi if, after the bookbuilding process, Portugal Telecom is expected to hold an interest of more than 39.6% of the total voting capital of CorpCo, assuming the consummation of the Merger of Shares.  Furthermore, if the agreement is terminated for any reason other than due to a breach of contract by Portugal Telecom, Oi agrees to reimburse Portugal Telecom in an amount up to US$10.0 million for documented costs of Portugal Telecom’s obtaining third-party approvals in its liability management process.

 

Agreement to Assign Priority Subscription Rights

 

On February 19, 2014, Portugal Telecom executed a private undertaking with respect to the assignment of priority subscription rights for the capital stock of Oi, among TmarPart, Valverde, AG Telecom and LF Tel. Under the agreement, TmarPart, Valverde, AG Telecom and LF Tel agree to assign and transfer to Portugal Telecom their priority subscription rights corresponding to 448,243,246 shares of capital stock issued by Oi, representing 290,549,788 commons shares of capital stock and 157,693,458 preferred shares of capital stock.

 

The agreement is intended to provide the priority subscription rights to Portugal Telecom necessary for Portugal Telecom to subscribe for shares of Oi in the Oi Capital Increase pursuant to the agreement described above.  The agreement to assign priority subscription rights will remain in effect until the agreement by Portugal Telecom to subscribe for shares of Oi is in effect or until definitive agreements are executed in order transfer the priority rights.

 

Debenture Subscription Agreements and Private Deeds

 

On February 19, 2014, Bratel executed separate debenture subscription agreements of Pasa and EDSP75, with the issuer companies and Venus and Sayed, respectively (collectively, the “Bratel Debentures Subscription Agreements”).  On the same date, PTB2 S.A. (“PTB2”), a subsidiary of Bratel, also executed separate debenture subscription agreements of Venus and Sayed respectively (collectively, the “PTB2 Debentures Subscription Agreements”).  On the same date, AG Telecom and LF Tel executed separate debenture subscription agreements with Pasa and

 

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Schedule 13D

 

EDSP75, respectively (collectively, the “Pasa/EDSP75 Debentures Subscription Agreements”), and signed a debenture subscription agreement with TmarPart (the “TmarPart Debentures Subscription Agreement”).

 

The Bratel Debentures Subscription Agreements

 

On February 19, 2014, Bratel agreed, subject to conditions, (1) together with Venus, to subscribe for one Series A debenture in an aggregate principal amount equal to R$938.5 million, convertible into 388,081,549 common shares, and one Serie B debenture in an aggregate principal amount equal to R$1,455.5 million, convertible into 388,081,549 common shares and 213,739,263 preferred shares issued by Pasa, and (2) together with Sayed, to subscribe for one Serie A debenture in an aggregate principal amount equal to R$938.5 million, convertible into 762,969,285 common shares, and one Serie B debenture in an aggregate principal amount equal to R$1,455.5 million, convertible into 762,969,285 common shares and 420,211,919 preferred shares issued by EDSP75.  The debentures will be issued on the date of the General Shareholders’ Meeting of Pasa and EDSP75, respectively, that approves the issuance of the debentures and are expected to be paid for on the date of the settlement of the Oi Capital Increase. The debentures will be mandatorily converted into common shares of TmarPart on the date of the Merger of Shares of Oi by TmarPart. The proceeds will be used solely for the payment of all of the indebtedness of Pasa and EDSP75, respectively, or their controlled subsidiaries.

 

The primary condition precedent to the settlement of the debentures is the settlement of the Oi Capital Increase, under the terms of the agreement by Portugal Telecom to subscribe for shares of Oi described above.  If the conditions precedent are not satisfied by October 1, 2014, Pasa and EDSP75 will, respectively, redeem and cancel their debentures, and Bratel, together with Venus and Sayed, will be, respectively, released from their obligations under the Bratel Debentures Subscription Agreements.

 

The PTB2 Debentures Subscription Agreements

 

On the same date of the Bratel Debentures Subscription Agreements, PTB2 agreed, subject to conditions, to subscribe for (1) one debenture in an aggregate principal amount equal to R$938.5 million, convertible into 208,599,126 common shares and 179,482,423 preferred shares issued by Venus, and (2) one debenture in an aggregate principal amount equal to R$938.5 million, convertible into 410,106,399 common shares and 352,862,887 preferred shares issued by Sayed.  The debentures will be issued on the date of the General Shareholders’ Meeting of Venus and Sayed, respectively, that approves the issuance of the debentures and are expected to be paid for on the date of the settlement of the Oi Capital Increase. The proceeds will be used solely for the payment of all of the indebtedness of Venus and Sayed, respectively, or their controlled subsidiaries.

 

The PTB2 Debentures Subscription Agreements have similar conditions precedent to the settlement of the debentures, most importantly the settlement of the Oi Capital Increase, under the terms of the agreement by Portugal Telecom to subscribe for shares of Oi described above.  If the conditions precedent are not satisfied by October 1, 2014, Venus and Sayed will,

 

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Schedule 13D

 

respectively, redeem and cancel their debentures, and PTB2 will be released from its obligations under the PTB2 Debentures Subscription Agreements.

 

The Pasa/EDSP75 Debentures Subscription Agreements

 

On February 19, 2014, Pasa and EDSP75 agreed, subject to conditions, to subscribe for (1) one debenture in an aggregate principal amount equal to R$2,394.0 million, convertible into 691,446,091 common shares issued by AG Telecom, and (2) one debenture in an aggregate principal amount equal to R$2,394.0 million, convertible into 1,359,384,726 common shares issued by LF Tel.  The debentures will be issued on the date of the General Shareholders’ Meeting of AG Telecom and LF Tel, respectively, that approves the issuance of the debentures and are expected to be paid for on the date of the settlement of the Oi Capital Increase. The proceeds will be used solely for the payment of all of the indebtedness of AG Telecom and LF Tel, respectively, or their controlled subsidiaries.

 

The Pasa/EDSP75 Debentures Subscription Agreements are also conditioned upon the settlement of the Oi Capital Increase, under the terms of the agreement by Portugal Telecom to subscribe for shares of Oi described above.  If the conditions precedent are not satisfied by October 1, 2014, AG Telecom and LF Tel will, respectively, redeem and cancel their debentures, and Pasa and EDSP75 will be, respectively, released from their obligations under the PTB2 Debentures Subscription Agreements.

 

The TmarPart Debenture Subscription Agreement

 

Also on February 19, 2014, AG Telecom and LF Tel agreed, subject to conditions, to subscribe for debentures in an aggregate principal amount equal to R$3,428.0 million, convertible into 2,212,047,712 common shares issued by TmarPart. The debentures will be issued on the date of the General Shareholders’ Meeting of TmarPart that approves the issuance of the debentures and are expected to be paid for on the date of the settlement of the Oi Capital Increase. The debentures will be mandatorily converted into common shares of TmarPart on the date of the Merger of Shares of Oi by TmarPart.  The proceeds will be used solely for the payment of all of the indebtedness of TmarPart, and the early redemption, in local currency, of all preferred shares issued by TmarPart.

 

The primary condition precedent to the settlement of the debentures is the settlement of the Oi Capital Increase, under the terms of the agreement by Portugal Telecom to subscribe for shares of Oi described above. If the conditions precedent are not satisfied by October 1, 2014, TmarPart will redeem and cancel its debentures, and AG Telecom and LF Tel will be released from their obligations under the TmarPart Debentures Subscription Agreements.

 

The Private Deeds

 

Attached to each of the Debenture Subscription Agreements described above is the form of a related Private Deed that sets forth the necessary corporate authorizations, the legal requirements for the issuance of the debentures, the specific characteristics of the issuance (including number of the series, aggregate amount, unit principal amount, payment and use of proceeds) and the terms of the debentures (including issuance date, quantity to be issued,

 

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Schedule 13D

 

mandatory conversion into common shares, subscription and settlement processes, and settlement date). The Private Deed for each series of debentures is expected to be executed on the date of issuance of those debentures.

 

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Schedule 13D

 

Item 7.           Material to be Filed as Exhibits

 

Exhibit		Description
1.		Joint Filing Agreement, dated as of October 7, 2013 by and between the Reporting Persons (incorporated by reference to Exhibit 1 of Amendment No. 1 to the Schedule 13D of Oi S.A., filed on October 8, 2013 (SEC File No. 005-83981)).
2.		Directors and Executive Officers of the Reporting Persons (incorporated by reference to Exhibit 2 of Amendment No. 1 to the Schedule 13D of Oi S.A., filed on October 8, 2013 (SEC File No. 005-83981)).
3.		Shareholders’ Agreement of Telemar Participações S.A., dated as of April 25, 2008, among AG Telecom Participações S.A., LF Tel S.A., Fundação Atlântico de Seguridade Social, Asseca Participações S.A. and, as intervening parties, Telemar Participações S.A. and Andrade Gutierrez Investimentos em Telecomunicações S.A. (English translation) (incorporated by reference to the Form 6-K of Tele Norte Leste Participações S.A. filed on February 19, 2009 (SEC File No. 001-14487)).
4.		Amendment to the Shareholders Agreement of Telemar Participações S.A., dated as of January 25, 2011, among AG Telecom Participações S.A., Luxemburgo Participações S.A., LF Tel S.A., Fundação Atlântico de Seguridade Social, and, as intervening party, Telemar Participações S.A. (English translation) (incorporated by reference to Exhibit 3.02 of the Form 20-F of Tele Norte Leste Participações S.A. filed on May 4, 2011 (SEC File No. 001-14487)).
5.		Private Shareholders Agreement of Telemar Participações S.A., dated as of April 25, 2008, among AG Telecom Participações S.A., LF Tel S.A., Asseca Participações S.A., BNDES Participações S.A.—BNDESPAR, Fiago Participações S.A., Fundação Atlântico de Seguridade Social and, as intervening parties, Telemar Participações S.A., Caixa de Previdência dos Funcionários do Banco do Brasil—PREVI, Fundação Petrobras de Seguridade Social—PETROS, Fundação dos Economiários Federais—FUNCEF and Andrade Gutierrez Investimentos em Telecomunicações S.A. (English translation) (incorporated by reference to the Form 6-K/A of Tele Norte Leste Participações S.A. filed on November 27, 2009 (SEC File No. 001-14487)).
6.		Amendment to the Shareholders Agreement of Telemar Participações S.A., dated as of January 25, 2011, among AG Telecom Participações S.A., Luxemburgo Participações S.A., BNDES Participações S.A.—BNDESPar, Caixa de Previdência dos Funcionários do Banco do Brasil—PREVI, Fundação Atlântico de Seguridade Social, Fundação dos Economiários Federais—FUNCEF, Fundação Petrobras de Seguridade Social—PETROS, LF Tel S.A., Bratel Brasil S.A. and, as intervening parties, Telemar Participações S.A. and Portugal Telecom, SGPS S.A. (English translation) (incorporated by reference to Exhibit 3.04 of the Form 20-F of Tele Norte Leste Participações S.A. filed on May 4, 2011 (SEC File No. 001-14487)).

 

18

 

Schedule 13D

 

7.		Shareholders Agreement of Pasa Participações S.A., dated as of January 25, 2011, among Andrade Gutierrez Telecomunicações Ltda., Bratel Brasil S.A. and, as intervening parties, Pasa Participações S.A., AG Telecom Participações S.A., Luxemburgo Participações S.A., La Fonte Telecom S.A., EDSP75 Participações S.A., LF Tel S.A. and Portugal Telecom, SGPS, S.A. (English translation). (incorporated by reference to Exhibit 4.10 of the Form 20-F of Portugal Telecom, SGPS, S.A. filed on May 6, 2011 (SEC File No. 001-13758)).
8.		Shareholders Agreement of EDSP75 Participações S.A., dated as of January 25, 2011, among La Fonte Telecom S.A., Bratel Brasil S.A. and, as intervening parties, EDSP75 Participações S.A., LF Tel S.A., Pasa Participações S.A., Andrade Gutierrez Telecomunicações Ltda., AG Telecom Participações S.A., Luxemburgo Participações S.A., and Portugal Telecom, SGPS, S.A. (English translation). (incorporated by reference to Exhibit 4.11 of the Form 20-F of Portugal Telecom, SGPS, S.A. filed on May 6, 2011 (SEC File No. 001-13758)).
9.		Memorandum of Understanding, dated as of October 1, 2013, among Oi S.A., AG Telecom Participações S.A., LF Tel. S.A., Pasa Participações S.A., EDSP75 Participações S.A., Bratel Brasil S.A., Portugal Telecom SGPS, S.A., Avistar, SGPS, S.A. and Nivalis Holding B.V. (incorporated by reference to Exhibit 9 of Amendment No. 1 to the Schedule 13D of Oi S.A., filed on October 8, 2013 (SEC File No. 005-83981)).
10.		Memorandum of Understanding relating to CTX Participações S.A. and Contax Participações S.A., dated as of October 1, 2013, among AG Telecom Participações S.A., Andrade Gutierrez Telecomunicações Ltda., LF Tel. S.A., La Fonte Telecom S.A., Pasa Participações S.A., EDSP75 Participações S.A., Bratel Brasil S.A. and Portugal Telecom SGPS, S.A. (incorporated by reference to Exhibit 10 of Amendment No. 1 to the Schedule 13D of Oi S.A., filed on October 8, 2013 (SEC File No. 005-83981)).
11.		Share Exchange Agreement (Contrato de Permuta de Participações Societárias), dated as of February 19, 2014, among Andrade Gutierrez S.A., Bratel Brasil S.A. and, as intervening parties, Pasa Participações S.A., AG Telecom Participações S.A., Jereissati Telecom S.A., EDSP75 Participações S.A., L.F. Tel S.A. and Fundação Atlântico de Seguridade Social (English Translation).
12.		Share Exchange Agreement (Contrato de Permuta de Participações Societárias), dated as of February 19, 2014, among Jereissati Telecom S.A., Bratel Brasil S.A. and, as intervening parties, Pasa Participações S.A., AG Telecom Participações S.A., Andrade Gutierrez S.A., EDSP75 Participações S.A., L.F. Tel S.A. and Fundação Atlântico de Seguridade Social (English Translation).

 

19

 

Schedule 13D

 

13.		Second Amendment to the Shareholders’ Agreement of Telemar Participações S.A. (2º Aditivo ao Acordo de Acionistas da Telemar Participações S.A.), dated as of February 19. 2014, among AG Telecom Participações S.A., LF Tel S.A., Fundação Atlântico de Seguridade Social and, as intervening party, Telemar Participações S.A. (English Translation).
14.		Terms of Termination of the Shareholders’ Agreement of Telemar Participações S.A. (Termo de Resilição do Acordo de Acionistas da Telemar Participações S.A.), dated as of February 19. 2014, among AG Telecom Participações S.A., LF Tel S.A., Fundação Atlântico de Seguridade Social and, as intervening party, Telemar Participações S.A. (English Translation).
15.		Second Amendment to the Shareholders’ Agreement of Telemar Participações S.A. (2º Aditivo ao Acordo de Acionistas da Telemar Participações S.A.), dated as of February 19, 2014, among AG Telecom Participações S.A., BNDES Participações S.A.—BNDESPAR, Caixa de Previdência dos Funcionários do Banco do Brasil—PREVI, Fundação Atlântico de Seguridade Social, Fundação dos Economiários Federais—FUNCEF, Fundação Petrobras de Seguridade Social—PETROS, LF Tel S.A., Bratel Brasil S.A. and, as intervening parties, Telemar Participações S.A. and Portugal Telecom, SGPS, S.A. (English Translation).
16.		Terms of Termination of the Shareholders’ Agreement of Telemar Participações S.A. (Termo de Resilição do Acordo de Acionistas da Telemar Participações S.A.), dated as of February 19, 2014, among AG Telecom Participações S.A., BNDES Participações S.A.—BNDESPAR, Caixa de Previdência dos Funcionários do Banco do Brasil—PREVI, Fundação Atlântico de Seguridade Social, Fundação dos Economiários Federais—FUNCEF, Fundação Petrobras de Seguridade Social—PETROS, LF Tel S.A., Bratel Brasil S.A. and, as intervening parties, Telemar Participações S.A. and Portugal Telecom, SGPS, S.A. (English Translation).
17.		First Amendment to the Shareholders’ Agreement of Pasa Participações S.A. (1º Aditivo ao Acordo de Acionistas da Pasa Participações S.A.), dated as of February 19, 2014, among Andrade Gutierrez S.A., Bratel Brasil S.A. and, as intervening parties, Pasa Participações S.A., AG Telecom Participações S.A., Jereissati Telecom S.A., EDSP75 Participações S.A., LF Tel S.A., Portugal Telecom, SGPS, S.A., Sayed RJ Participações S.A., Venus RJ Participações S.A. and PTB2 S.A. (English Translation).
18.		Terms of Termination of the Shareholders’ Agreement of Pasa Participações S.A. (Termo de Resilição do Acordo de Acionistas da Pasa Participações S.A.), dated as of February 19, 2014, among Andrade Gutierrez S.A., Bratel Brasil S.A. and, as intervening parties, Pasa Participações S.A., AG Telecom Participações S.A., Jereissati Telecom S.A., EDSP75 Participações S.A., LF Tel S.A. and Portugal Telecom, SGPS, S.A. (English Translation).

 

20

 

Schedule 13D

 

19.		First Amendment to the Shareholders’ Agreement of EDSP75 Participações S.A. (1º Aditivo ao Acordo de Acionistas da EDSP75 Participações S.A.), dated as of February 19, 2014, among Jereissati Telecom S.A., Bratel Brasil S.A. and, as intervening parties, EDSP75 Participações S.A., LF Tel S.A., Andrade Gutierrez S.A., Pasa Participações S.A., AG Telecom Participações S.A., Portugal Telecom, SGPS, S.A., Sayed RJ Participações S.A., Venus RJ Participações S.A. and PTB2 S.A. (English Translation).
20.		Terms of Termination of the Shareholders’ Agreement of EDSP75 Participações S.A. (Termo de Resilição do Acordo de Acionistas da EDSP75 Participações S.A.), dated as of February 19, 2014, among Jereissati Telecom S.A., Bratel Brasil S.A. and, as intervening parties, EDSP75 Participações S.A., LF Tel S.A., Andrade Gutierrez S.A., Pasa Participações S.A., AG Telecom Participações S.A. and Portugal Telecom, SGPS, S.A. (English Translation).
21.		Temporary Voting Agreement of the Shareholders of Oi S.A. and Telemar Participações S.A. (referred to as “CorpCo”) (Compromisso Provisório de Voto dos Acionistas da Oi S.A. e da Telemar Participações S.A. (a ser denominada “CorpCo”)), dated February 19, 2014, among Portugal Telecom, SGPS, S.A., Caravelas Fundo de Investimento em Ações, Bratel Brasil S.A., Telemar Participações S.A., Andrade Gutierrez S.A., Jereissati Telecom S.A. and, as intervening party, Oi S.A. (English Translation).
22.		Subscription Agreement for Shares of Capital Stock Issued by Oi S.A. (Contrato de Subscrição de Ações de Emissão da Oi S.A.), dated February 19, 2014, between Oi S.A. and Portugal Telecom, SGPS, S.A. (English Translation).
23.		Private Instrument of Commitment to Assign Priority Rights (Instrumento Particular de Compromisso de Cessão de Direito de Prioridade), dated February 19, 2014, among Telemar Participações S.A., Valverde Participações S.A., AG Telecom Participações S.A., LF Tel S.A. and Portugal Telecom, SGPS, S.A. (English Translation).
24.		Debenture Subscription Agreement for the First Private Issuance of Unsecured Debentures Convertible into Common and Preferred Shares, in a Single Series, of Venus RJ Participações S.A. (Contrato de Subscrição de Debêntures da Primeira Emissão Privada de Debêntures Conversíveis em Ações Ordinárias e Preferenciais, da Espécie Quirografária em Série Única, da Venus RJ Participações S.A.), dated as of February 19, 2014, between PTB2 S.A. and Venus RJ Participações S.A. (English Translation).
25.		Debenture Subscription Agreement for the First Private Issuance of Unsecured Debentures Convertible into Common and Preferred Shares, in a Single Series, of Sayed RJ Participações S.A. (Contrato de Subscrição de Debêntures da Primeira Emissão Privada de Debêntures Conversíveis em Ações Ordinárias e Preferenciais, da Espécie Quirografária em Série Única, da Sayed RJ participações S.A.), dated as of February 19, 2014, between Sayed RJ Participações S.A. and PTB2 S.A. (English Translation).

 

21

 

Schedule 13D

 

26.		Debenture Subscription Agreement for the First Private Issuance of Unsecured Debentures Convertible into Common and Preferred Shares, in Series, of Pasa Participações S.A. (Contrato de Subscrição de Debêntures da Primeira Emissão Privada de Debêntures Conversíveis em Ações Ordinárias e Preferenciais, da Espécie Quirografária em Séries, da Pasa Participações S.A.), dated as of February 19, 2014, among Pasa Participações S.A., Bratel Brasil S.A. and Venus RJ Participações S.A. (English Translation).
27.		Debenture Subscription Agreement for the First Private Issuance of Unsecured Debentures Convertible into Common and Preferred Shares, in Series, of EDSP75 Participações S.A. (Contrato de Subscrição de Debêntures da Primeira Emissão Privada de Debêntures Conversíveis em Ações Ordinárias e Preferenciais, da Espécie Quirografária em Séries, da EDSP75 Participações S.A.), dated as of February 19, 2014, among EDSP75 Participações S.A., Bratel Brasil S.A. and Sayed RJ Participações S.A. (English Translation).
28.		Debenture Subscription Agreement for the Third Private Issuance of Subordinated Debentures Convertible into Common Shares, in a Single Series, of AG Telecom Participações S.A. (Contrato de Subscrição de Debêntuntes da Terceira Emissão Privada de Debêntures Conversíveis em Ações Ordinárias, da Espécie Subordinada em Série Única, da AG Telecom Participações S.A.), dated as of February 19, 2014, among Pasa Participações S.A. and AG Telecom S.A. (English Translation).
29.		Debenture Subscription Agreement for the Fifth Private Issuance of Subordinated Debentures Convertible into Common Shares, in a Single Series, of LF Tel S.A. (Contrato de Subscrição de Debêntuntes da Quinta Emissão Privada de Debêntures Conversíveis em Ações Ordinárias, da Espécie Subordinada em Série Única, da LF Tel Participações S.A.), dated as of February 19, 2014, among LF Tel S.A. and EDSP75 Participações S.A. (English Translation).
30.		Debenture Subscription Agreement for the Twelfth Private Issuance of Subordinated Debentures Convertible into Common Shares, in a Single Series, of Telemar Participações S.A. (Contrato de Subscrição de Debêntures da Décima Segunda Emissão Provada de Debêntures Conversíveis em Ações Ordinárias, da Espécie Subordinada em Série Única, da Telemar Participações S.A.), dated as of February 19, 2014, among Telemar Participações S.A., AG Telecom Participações S.A. and LF Tel S.A. (English Translation).

 

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SIGNATURES

 

After reasonable inquiry and to the best of the knowledge and belief of the undersigned, the undersigned certify that the information set forth in this statement is true, complete and correct.

 

Dated:  February 26, 2014

 

	PORTUGAL TELECOM, SGPS, S.A.
	By:	/s/ Henrique Granadeiro
		Name:	Henrique Granadeiro
		Title:	Chief Executive Officer
	By:	/s/ Luis Pacheco de Melo
		Name:	Luis Pacheco de Melo
		Title:	Chief Financial Officer
	PT PORTUGAL, SGPS, S.A.
	By:	/s/ Luis Pacheco de Melo
		Name:	Luis Pacheco de Melo
		Title:	Vice President
	By:	/s/ Manuel Francisco Rosa da Silva
		Name:	Manuel Francisco Rosa da Silva
		Title:	Executive Member of the Board of Directors
	PT COMUNICAÇÕES, S.A.
	By:	/s/ Manuel Francisco Rosa da Silva
		Name:	Manuel Francisco Rosa da Silva
		Title:	Executive Member of the Board of Directors
	By:	/s/ Carlos Duarte
		Name:	Carlos Duarte
		Title:	Executive Member of the Board of Directors

 

[Signature Page to Amendment No. 2 to Portugal Telecom Schedule 13D]

 

 

	MEO – SERVIÇOS DE COMUNICAÇÕES E MULTIMEDIA, S.A.
	By:	/s/ Manuel Francisco Rosa da Silva
		Name:	Manuel Francisco Rosa da Silva
		Title:	Executive Member of the Board of Directors
	By:	/s/ Carlos Duarte
		Name:	Carlos Duarte
		Title:	Executive Member of the Board of Directors
	PT MÓVEIS, SGPS, S.A.
	By:	/s/ Henrique Granadeiro
		Name:	Henrique Granadeiro
		Title:	Chairman of the Board of Directors
	By:	/s/ Luis Pacheco de Melo
		Name:	Luis Pacheco de Melo
		Title:	Executive Member of the Board of Directors
	BRATEL B.V.
	By:	/s/ C.C. van den Broek
		Name:	C.C. van den Broek
		Title:	Director B
	By:	/s/ Carlos Cruz
		Name:	Carlos Cruz
		Title:	Director A

 

[Signature Page to Amendment No. 2 to Portugal Telecom Schedule 13D]

 

 

	BRATEL BRASIL S.A.
	By:	/s/ Shakhaf Wine
		Name:	Shakhaf Wine
		Title:	President
	By:	/s/ Pedro Guterres
		Name:	Pedro Guterres
		Title:	Director

 

[Signature Page to Amendment No. 2 to Portugal Telecom Schedule 13D]

 

 

This document is a free translation only. Due to the complexities of language translation, translations are not always precise. The original document was prepared in Portuguese and in case of any divergence, discrepancy or difference between this version and the Portuguese version, the Portuguese version shall prevail. The Portuguese version is the only valid and complete version and shall prevail for any and all purposes. There is no assurance as to the accuracy, reliability or completeness of the translation. Any person reading this translation and relying on it should do so at his or her own risk.

 

SHARE EXCHANGE AGREEMENT

 

BETWEEN

 

ANDRADE GUTIERREZ S.A.

 

AND

 

BRATEL BRASIL S.A.

 

AND AS INTERVENING PARTIES

 

PASA PARTICIPAÇÕES S.A.

AG TELECOM PARTICIPAÇÕES S.A.

JEREISSATI TELECOM S.A.

EDSP75 PARTICIPAÇÕES S.A.

L.F. TEL S. A.

FUNDAÇÃO ATLÂNTICO DE SEGURIDADE SOCIAL

 

 

DATED FEBRUARY 19, 2014

 

 

1

 

SHARE EXCHANGE AGREEMENT

 

By this instrument, the parties:

 

on the one hand,

 

1.                                      ANDRADE GUTIERREZ S.A. (successor of Andrade Gutierrez Telecomunicações Ltda.), a corporation with its principal place of business in the City of Belo Horizonte, State of Minas Gerais, at Av. do Contorno No. 8.123, Cidade Jardim, enrolled with the National Corporate Taxpayers’ Register of the Ministry of Finance (CNPJ/MF) under No. 17.262.197/0001-30, herein represented pursuant to its By-Laws, hereinafter referred to as “AG S.A.”.

 

and, on the other hand,

 

2.                                      BRATEL BRASIL S.A., a corporation with its principal place of business in the City of São Paulo, State of São Paulo, at Avenida Brigadeiro Faria Lima, 2277, 15th Floor, 1503, suite 02, Postal Code 01452-000, enrolled with the CNPJ/MF under No. 12.956.126/0001-13, with its articles of incorporation duly registered with the Commercial Registry of the State of São Paulo under State Registration Number (NIRE) 35.300.386.973, herein represented pursuant to its By-Laws, hereinafter referred to as “BRATEL BRASIL”;

 

BRATEL BRASIL and AG S.A. shall be hereinafter jointly referred to as “Parties”, and individually as “Party”.

 

and, furthermore, as Intervening and Consenting Parties:

 

3.                                      PASA PARTICIPAÇÕES S.A., a corporation with its principal place of business in the City of Belo Horizonte, State of Minas Gerais, at Av. do Contorno No. 8123, Cidade Jardim District, Postal Code 30110-056, enrolled with the CNPJ/MF under No. 11.221.565/0001-15, herein represented pursuant to its By-Laws, hereinafter simply referred to as “PASA”;

 

4.                                      AG TELECOM PARTICIPAÇÕES S.A., a corporation with its principal place of business in the City of Belo Horizonte, State of Minas Gerais, at Avenida do Contorno No. 8.123, Cidade Jardim District, Postal Code 30110-056, enrolled with the CNPJ/MF under No. 03.260.334/0001-92, herein represented pursuant to its By-Laws, hereinafter referred to as “AG”;

 

5.                                      JEREISSATI TELECOM S.A., a corporation with its principal place of business in the City of São Paulo, State of São Paulo, at Rua Angelina Maffei Vita, 200 — 9th Floor,

 

2

 

enrolled with the CNPJ/MF under No. 53.790.218/0001-53, herein represented pursuant to its By-Laws, hereinafter referred to as “Jereissati Telecom”;

 

6.                                      EDSP75 PARTICIPAÇÕES S. A., a corporation with its principal place of business in the City of São Paulo, State of São Paulo, at Rua Angelina Maffei Vita, 200 — 9th Floor, São Paulo (State of São Paulo), enrolled with the CNPJ/MF under No. 09. 626. 007/0001-98, herein represented pursuant to its By-Laws, hereinafter simply referred to as “EDSP75”;

 

7.                                      L.F. TEL S. A., a corporation with its principal place of business in the City of São Paulo, State of São Paulo, at Avenida Dr. Chucri Zaidan, No. 920, 16th Floor, Postal Code 04583-110, enrolled with the CNPJ/MF under No. 02.390.206/0001-09, herein represented pursuant to its By-Laws, hereinafter referred to as “LF TEL”;

 

8.                                      FUNDAÇÃO ATLÂNTICO DE SEGURIDADE SOCIAL, a foundation with its principal place of business in the City of Rio de Janeiro, State of Rio de Janeiro, at Rua Lauro Muller No. 116, suite 2901, Botafogo, enrolled with the CNPJ/MF under No. 07. 110. 214/0001-60, herein represented pursuant to its By-Laws, hereinafter referred to as “FATL”;

 

WHEREAS:

 

(i)                           AG, AG S.A., LF TEL, Jereissati Telecom, PASA, EDSP75, BRATEL BRASIL and Portugal Telecom SGPS S.A. (“PT SGPS”) executed, on October 1st, 2013, a Memorandum of Understandings (“MOU”) establishing the principles, terms and conditions negotiated among these companies, for the purpose of carrying out disproportional partial spin-offs of PASA and of EDSP 75, and partial spin-offs of AG and of LF TEL, aiming at segregating the equity interests held by these companies in CTX Participações S.A. (“CTX”) and in Contax Participações S.A. (“CONTAX”) (“CTX Spin-Offs”), in order to allow exchanges of shares between PT SGPS or its subsidiaries (“Portugal Telecom”) and the other shareholders of PASA, and between Portugal Telecom and the other shareholders of EDSP 75 (“Exchanges”), within the scope of the intended execution of a transaction that will involve a combination of the activities and business of Portugal Telecom and of Oi S.A. (“Oi”), and which shall result in, among other things, PT SGPS’s ceasing to exist and in the merger of the shares held by the shareholders of PT SGPS into the shares held by the shareholders of Oi and of the holding company Telemar Participações S.A. (“Oi Transaction”);

 

(ii)                        The CTX Spin-Offs, as better detailed in Exhibit I hereto, will be carried out so that at the end of such transactions, (a) the equity interests directly or indirectly held by PASA and AG in CTX and in CONTAX will be segregated into two new holding

 

3

 

companies, PASA Contact Center Participações S.A. (“New PASA”) and AG Contact Center Participações S.A. (“New AG”), it being understood that the capital stock of New PASA will be fully held by AG S.A. and by BRATEL BRASIL, in the same proportion currently held by them in the capital stock of PASA, and the capital stock of New AG will be fully held by New PASA; and (b) the equity interests directly or indirectly held by EDSP75 and LF TEL in CTX and in CONTAX will be segregated in two new holding companies, Detmold RJ Participações S.A. (“New EDSP75”) and Dronten RJ Participações S.A. (“New LF”), it being understood that the capital stock of New EDSP75 will be fully held by Jereissati Telecom and by BRATEL BRASIL, in the same proportion currently held by them in the capital stock of EDSP75, and the capital stock of New LF will be fully held by New EDSP75.

 

(iii)                     After implementation of the CTX Spin-Offs, the capital stock of the companies PASA, AG, New PASA, New AG, EDSP75, LF TEL, New EDSP75, New LF will be distributed among their shareholders as provided in Exhibit II to this Agreement, it being understood that:

 

(a)         New PASA will hold shares representing all of the capital stock of New AG, and New EDSP75 will be the holder of shares representing all of the capital stock of New LF;

 

(b)         New AG and New LF will be the holders of (a) 2,274,921,628 common shares issued by CTX, representing 69.92% of the total and voting capital stock of CTX; and (b) 5,305,288 common shares and 21,221,152 preferred shares issued by CONTAX, representing 7.71% of the total capital stock and 4.44% of the voting capital stock of CONTAX, distributed between them as follows:

 

Company		CTX Common Shares		CONTAX Common Shares		CONTAX Preferred Shares
New AG		1,137,460,814		2,652,644		10,610,576
New LF		1,137,460,814		2,652,644		10,610,576

 

(c)          BRATEL BRASIL, AG S.A. and Venus RJ Participações S.A. (“VENUS”) will directly or indirectly hold common shares representing 100% of the total capital stock of PASA (“PASA Shares”);

 

(d)         BRATEL BRASIL, AG S.A. and VENUS will directly or indirectly hold shares representing 100% of the total capital stock of New PASA (“New PASA Shares”);

 

4

 

(iv)                    In addition to the indirect equity interest held by BRATEL BRASIL in CTX and in CONTAX by means of its equity interest in PASA and in EDSP75, BRATEL BRASIL will directly own on the Closing Date, as defined below, (a) 647,451,385 common shares issued by CTX, representing 19.90% of its total and voting capital stock (“CTX-Bratel Shares”) and (b) 4,292,096 common shares and 17,168,384 preferred shares issued by CONTAX, representing 6.24% of the total capital stock and 3.59% of the voting capital stock of CONTAX (“Contax-Bratel Shares”);

 

(v)                       After implementation of the CTX Spin-Offs and satisfaction of the Conditions Precedent, as defined below, BRATEL BRASIL, on the one hand, and AG S.A., on the other hand, wish to exchange (a) all New PASA Shares held by BRATEL BRASIL (“New Pasa-Bratel Shares”), as well as fifty percent (50%) of all CTX-Bratel Shares and of the Contax-Bratel Shares (jointly, these equity interests shall be hereinafter referred to as “Bratel Equity Interests”) for (b) 59,679,028 common shares issued by PASA held by AG S.A., representing 14.46% of the total and voting capital stock of PASA (“PASA-AG S.A. Shares”).

 

(vi)                    The shareholders of CTX, as applicable, have expressly waived, on the date hereof, their respective rights of first refusal with respect to the transfer of equity interests that is the subject matter of this Agreement.

 

(vii)                 Pursuant to applicable law, the prior authorization for implementation of the Oi Transaction was granted by the Brazilian Antitrust Authorities (“CADE”) by means of the order of the CADE General Superintendent No. 39, of January 13, 2014, published in the Federal Official Gazette on January 14, 2014, and the prior authorization for implementation of the transactions contemplated in this Agreement was granted by CADE by means of the order of the CADE General Superintendent No. 21, of January 7, 2014, published in the Federal Official Gazette on January 8, 2014;

 

(viii)              Oi, Portugal Telecom SGPS, the other parties to the MOU, Telemar Participações S.A. and/or the direct and indirect shareholders thereof, as the case may be, executed or approved the execution, until the Closing (as defined below), of several agreements, as well as the consummation of several corporate acts, aimed at the consummation of the CTX Spin-Offs and of the Oi Transaction (the “Transaction Agreements”), including the Share Exchange Agreement among Jereissati Telecom, BRATEL BRASIL, PASA, AG, AG S.A., EDSP75, LF TEL and FATL, by means of which BRATEL BRASIL and Jereissati Telecom agree to irrevocably and irreversibly carry out the exchange of the shares issued by New EDSP75, CTX and CONTAX held by BRATEL BRASIL for shares issued by EDSP75 (“LF Exchange Agreement”).

 

5

 

NOW, THEREFORE, the Parties resolve to execute this Share Exchange Agreement (the “Agreement”), which shall be governed by the provisions described below:

 

SECTION 1

EXCHANGE OF SHARES

 

1.1                               Share Exchange. Subject to the satisfaction of the Conditions Precedent and of the other terms and conditions set forth in this Agreement, BRATEL BRASIL and AG S.A. agree to irrevocably and irreversibly exchange, on the Closing Date, the Bratel Equity Interests for the PASA-AG S.A. Shares, with all resulting rights, including, without limitation, the right to dividends still not declared, bonuses, rights of first refusal and priorities to which these equity interests become entitled as from the Closing Date, all free and clear of any and all liens, claims, options, rights of first refusal, charges and encumbrances of any kind (“Lien”), except as otherwise provided in the CTX/CONTAX Shareholders Agreement (as defined below) (the “Share Exchange”).

 

1.2                               Transfer of Equity Interests. Subject to the satisfaction of the Conditions Precedent and of the other terms and conditions set forth in this Agreement, BRATEL BRASIL and AG S.A. agree to perform, on the Closing Date, all actions required for registration of the transfer (i) of the Bratel Equity Interests to AG S.A. by means of the execution of the corresponding instruments of transfer in the applicable corporate books of New PASA and of CTX and of the transfer order relating to the transfer of 50% of the Contax-Bratel Shares and (ii) of the PASA-AG S.A. Shares to BRATEL BRASIL, by means of the signature of the corresponding instrument of transfer in the applicable corporate books of PASA.

 

1.3                               After implementation of the Share Exchange pursuant to the provisions of Section 1.1 above, BRATEL BRASIL and AG S.A. shall grant each other a general, full, complete, irrevocable and irreversible release with respect to the Share Exchange, expressly declaring that they have nothing else to receive or to claim from one another in this respect on any account and at any time.

 

1.4                               The Parties estimate that the equity interests to be exchanged pursuant to the provisions of Section 1.1 above have equal value.

 

1.4.1                      For all fiscal and tax purposes and effects, each of the Parties maintains the corresponding original costs of acquisition of the exchanged equity interests, so that the shares received in exchange for the previous ones will become part of their respective assets exactly for the amount of the investments written down in their records.

 

1.5                               LF TEL and FATL hereby expressly represent that they agree with the Share Exchange and that they waive any right with respect to such transfer, including, without

 

6

 

limitation, the right of first refusal for acquisition of the equity interests hereby exchanged pursuant to the provisions of the CTX/CONTAX Shareholders’ Agreement (as defined below) and of the Shareholders’ Agreements of PASA and EDSP 75, as applicable.

 

1.6                               In view of the Share Exchange contemplated in this Agreement and the exchange contemplated in the LF Exchange Agreement, on the Closing Date, BRATEL BRASIL will cease from being a direct or indirect shareholder of CONTAX and of CTX, as a result of which it will no longer be subject to the Second Amended and Restated Private Instrument of Shareholders Agreement of CTX Participações S.A. and of Contax Participações S.A., executed on May 11, 2011 (“CTX/CONTAX Shareholders’ Agreement”). Therefore, upon the satisfaction of all Conditions Precedent, BRATEL BRASIL, on the one hand, and AG, LF TEL and FATL, on the other hand, will automatically grant one another a general, full, complete, irrevocable and irreversible release with respect to the CTX/CONTAX Shareholders’ Agreement, expressly declaring that they have nothing else to receive or to claim from one another in this respect on any account and at any time.

 

SECTION 2

CONDITIONS PRECEDENT AND CLOSING

 

2.1                               Conditions Precedent of BRATEL BRASIL. The Parties acknowledge that BRATEL BRASIL shall only be required to consummate the Closing (as defined in Section 2.4 below) if it receives from AG S.A. a notice confirming the satisfaction of the following Conditions Precedent (“Notice of Closing”), pursuant to the form included in Exhibit 2.1 (“Bratel Conditions Precedent”):

 

(i)                                      the representations and warranties provided by AG S.A. in Section 3.2 below are true, correct and complete on the Closing Date;

 

(ii)                                   Implementation of the CTX Spin-Offs pursuant to the provision of Exhibit I to this Agreement; and

 

(iii)                                the settlement of the capital increase of Oi upon implementation of the transactions set forth in the Subscription Agreement of Shares Issued by Oi S.A. executed on the date hereof between PT SGPS and Oi (“PT SGPS Subscription Agreement”), which corresponds to one of the steps of the Oi Transaction.

 

2.1.1                      In the event of nonoccurrence of any of the Bratel Conditions Precedent set forth above by October 1st, 2014, BRATEL BRASIL shall have no obligation to carry out the Share Exchange as provided herein, and it shall have the right to, at its sole discretion, unilaterally terminate this Agreement, by means of a written notice sent to the other Parties in this respect, subject to the provisions of Section 7 below.

 

7

 

2.2                               AG S.A. Conditions Precedent. The Parties acknowledge that AG S.A. shall only be required to consummate the Closing (as defined in Section 2.4 below) if it receives from BRATEL BRASIL a notice confirming the satisfaction of the following conditions precedent (“Notice of Closing”), pursuant to the form included in Exhibit 2.2 (“AG S.A. Conditions Precedent” and, jointly, with the Bratel Conditions Precedent, “Conditions Precedent”):

 

(i)                                      the representations and warranties provided by BRATEL BRASIL in Section 3.1 below are true, correct and complete on the Closing Date;

 

(ii)                                   implementation of the CTX Spin-Offs pursuant to the provision of Exhibit I to this Agreement; and

 

(iii)                                the settlement of the capital increase of Oi upon implementation of the transactions set forth in the PT SGPS Subscription Agreement, which corresponds to one of the steps of the Oi Transaction.

 

2.2.1                      In the event of nonoccurrence of any of the AG S.A. Conditions Precedent set forth above by October 1st, 2014, AG S.A. shall have no obligation to carry out the Share Exchange as provided herein, and it may, at its sole discretion, unilaterally terminate this Agreement, by means of a written notice sent to the other Parties in this respect, subject to the provisions of Section 7 below.

 

2.3                               Waiver of the Conditions Precedent. Each of BRATEL BRASIL and AG S.A. may, in their sole discretion, waive satisfaction of any of their respective Conditions Precedent.

 

2.4                               Closing. Subject to the satisfaction or waiver of all Conditions Precedent, the Parties agree to carry out the Share Exchange contemplated herein on the same date of the settlement of the capital increase of Oi with the closing of the transactions contemplated in the PT SGPS Subscription Agreement (“Closing” and “Closing Date”).

 

SECTION 3

REPRESENTATIONS AND WARRANTIES

 

3.1                               Representations and Warranties of BRATEL BRASIL. BRATEL BRASIL hereby represents and warrants to AG S.A. that the representations and warranties provided below are true, accurate and complete:

 

3.1.1                      Organization and Existence. BRATEL BRASIL is a corporation duly organized and validly existing under the laws of Brazil.

 

3.1.2                      Authority. BRATEL BRASIL holds all powers and authority required to

 

8

 

execute this Agreement, comply with the obligations set forth herein and consummate the transactions contemplated herein. BRATEL BRASIL is not required to perform any other action in order to authorize the execution and performance of this Agreement.

 

3.1.3                      Binding Effect. This Agreement constitutes a legal, valid and binding obligation of BRATEL BRASIL, enforceable according to its terms and conditions.

 

3.1.4                      No Breach, Consents. Neither the execution of this Agreement by BRATEL BRASIL, nor the compliance by BRATEL BRASIL with any and all its obligations hereunder, or implementation of the transactions set forth herein:

 

(a)                                  breach or conflict with any provision of the corporate documents of BRATEL BRASIL;

 

(b)                                  breach, conflict or result in a violation or termination of, nor grant any other contracting party any right or additional compensation by virtue of, or any right to terminate, nor constitute a default under any agreement to which BRATEL BRASIL is a party, or to which BRATEL BRASIL or any of its property or assets are subject or bound; or

 

(c)                                   result in the creation of any Lien on any property of BRATEL BRASIL, except as provided herein.

 

3.1.5                      Ownership of Bratel Equity Interests. BRATEL BRASIL shall be, on the Closing Date, the sole and lawful owner and holder of all Bratel Equity Interests, with all they represent, free and clear of any and all Liens.

 

3.2                               Representations and Warranties of AG S.A. AG S.A. hereby represents and warrants to BRATEL BRASIL that the representations and warranties provided below are true, accurate and complete:

 

3.2.1                      Organization and Existence. AG S.A. is a corporation, duly organized and validly existing under the laws of Brazil.

 

3.2.2                      Authority. AG S.A. has all powers and authority required to execute this Agreement, comply with the obligations set forth herein and consummate the transactions contemplated herein. AG S.A. is not required to perform any other action in order to authorize the execution and performance of this Agreement.

 

3.2.3                      Binding Effect. This Agreement constitutes a legal, valid and binding obligation of AG S.A., enforceable according to its terms and conditions.

 

3.2.4                      No Breach, Consents. Neither the execution of this Agreement by AG S.A.,

 

9

 

nor the compliance by AG S.A. with any and all its obligations hereunder, or implementation of the transactions set forth herein:

 

(a)                                  breach or conflict with any provision of the corporate documents of AG S.A.;

 

(b)                                  breach, conflict or result in a violation or termination of, nor grant any other contracting party any right or additional compensation by virtue of, or any right to terminate, nor constitute a default under any agreement to which AG S.A. is a party, or to which AG S.A. or any of its property or assets are subject or bound; or

 

(c)                                   result in the creation of any Lien on any property of AG S.A., except as provided herein.

 

3.2.5                      Ownership of PASA-AG Shares. AG S.A. shall be, on the Closing Date, the sole and lawful owner and holder of all PASA-AG Shares, with all they represent, free and clear of any and all Liens.

 

SECTION 4

INDEMNIFICATION

 

4.1                               Indemnification by BRATEL BRASIL. In the event BRATEL BRASIL breaches any of its representations, warranties, commitments or obligations hereunder and in the event that AG S.A. files a written claim for damages against BRATEL BRASIL, then BRATEL BRASIL agrees to indemnify, defend and hold AG S.A. harmless from and against any damage suffered by AG S.A., resulting or arising from such breach.

 

4.2                               Indemnification by AG S.A. In the event AG S.A. breaches any of its representations, warranties, commitments or obligations hereunder and in the event that BRATEL BRASIL files a written claim for damages against AG S.A., then AG S.A. agrees to indemnify, defend and hold BRATEL BRASIL harmless from and against any damage suffered by BRATEL BRASIL, resulting or arising from such breach.

 

SECTION 5

RESCISSION

 

5.1                               This Agreement shall be automatically rescinded, irrespective of judicial or extrajudicial notice, exclusively in the following events:

 

(i)                                      claim for voluntary bankruptcy or court-supervised or out-of-court reorganization of BRATEL BRASIL and/or of AG S.A.; or,

 

(ii)                                   in case of a final and non-appealable court order that prevents the Closing;

 

10

 

or

 

(iii)                                in case of termination or default of any obligation, term or condition by any other party, of any of the Transaction Agreements until and including the Closing Date.

 

SECTION 6

TERMINATION

 

6.1                               This Agreement may be unilaterally terminated (i) by BRATEL BRASIL, in case one or more Bratel Conditions Precedent are not satisfied by October 1st, 2014, or (ii) by AG S.A., in case one or more AG S.A. Conditions Precedent are not satisfied by October 1st, 2014, or (iii) either by BRATEL BRASIL or AG S.A. in case the Closing does not occur by October 1st, 2014.

 

6.2                               Without prejudice to the exercise of all legal remedies to which the parties are entitled, in the event the Closing does not occur by an action or failure to act of one of the Parties, the innocent Party may, at its own discretion, require from the other Party compliance with the defaulted obligation and, consequently, consummation of the Closing by means of specific performance.

 

6.3                               In case a court, arbitration or administrative order is rendered preventing performance of this Agreement, the Parties agree, in good faith and at their own expenses, to adopt all measures to protect the Agreement and its form of performance, aiming at alleviating, as soon as possible, all effects of the aforementioned order.

 

6.3.1                      Once the effects of the court, arbitration or administrative order are alleviated, the Parties shall fully comply with their obligations hereunder, without any change and in full compliance with the contractually agreed terms, it being understood that (i) the terms in progress shall be deemed suspended on the date on which the court, arbitration or administrative order was rendered; and (ii) in no event may this Agreement be consummated after October 1st, 2014.

 

6.4                               The provisions regarding conflict resolution set forth in Section 8 shall survive termination of this Agreement.

 

SECTION 7

FINAL PROVISIONS

 

7.1                               Any notice, communication, correspondence, notification, request, claim, action, instruction, arbitration notice, summons or service of process related to this Agreement or to any dispute, action, doubt or controversy resulting from or relating to this Agreement shall be deemed delivered when received by the other Party (i) by certified mail, from a recognized courier company, upon actual receipt thereof, (ii) at the time of delivered, if

 

11

 

delivered personally, or (iii) on the date of confirmation of receipt of the transmission issued by fax, when sent by fax, as the case may be, to the addresses and telephone/fax numbers listed below (or to any other address or telephone/fax number informed by one of the Parties in writing to the other Parties):

 

(i)                                      If to AG S.A.:

Andrade Gutierrez S.A.

Attn.: Mr. Renato Torres Faria

Av. do Contorno No. 8123, Cidade Jardim, Belo Horizonte (MG)

 

(ii)                                   If to BRATEL BRASIL:

Bratel Brasil S.A.

Attn.: Shakhaf Wine

Avenida Brigadeiro Faria Lima, 2277, 15th Floor, 1503, suite 02, São Paulo (State of São Paulo)

 

With copy to:

SOUZA, CESCON, BARRIEU & FLESCH ADVOGADOS

R. Funchal, No. 418, 11th Floor, Vila Olímpia, Postal Code 04551-060, São Paulo, State of São Paulo

Fax: (55 11) 3089-6565

Attn.: Ms. Maria Cristina Cescon

E-mail: cristina.cescon@scbf.com.br

 

(iii)                                If to the Intervening Parties:

 

PASA PARTICIPAÇÕES S.A.:

Attn.: Mr. Renato Torres Faria

Av. do Contorno No. 8123, Cidade Jardim District, Belo Horizonte (State of Minas Gerais)

 

AG TELECOM PARTICIPAÇÕES S.A.:

Attn.: Mr. Renato Torres Faria

Av. do Contorno No. 8123, Cidade Jardim District, Belo Horizonte (State of Minas Gerais)

 

Jereissati Telecom S.A.

Attn.: Mr. Fernando Magalhães Portella

Rua Angelina Maffei Vita, 200 — 9th Floor, São Paulo (State of São Paulo)

 

EDSP75 Participações S.A.

Attn.: Mr. Fernando Magalhães Portella

Rua Angelina Maffei Vita, 200 — 9th Floor, São Paulo (State of São Paulo)

 

12

 

L.F. TEL S.A.

Attn.: Mr. Fernando Magalhães Portella

Avenida Dr. Chucri Zaidan, No. 920, 16th Floor, Postal Code 04583-110, São Paulo (State of São Paulo)

 

Fundação Atlântico De Seguridade Social

Attn.: Márcio de Araújo Faria

Rua Lauro Muller No.116, suite 2901, Botafogo, Rio de Janeiro (State of Rio de Janeiro)

 

7.1.1                      Any of the Parties may change the address to which the notice shall be sent by means of a written notice addressed to the other contracting Parties pursuant to this Section 7.1, provided that with respect to this provision, the notice shall be deemed received only upon acknowledgment of such receipt by each one of the other Parties.

 

7.2                               This Agreement and the exhibits hereto contain the entire agreement and understanding with respect to the subject matter hereof between the contracting Parties and specifically supersede any previous understanding of the Parties on the subject matter hereof.

 

7.3                               The exhibits hereto constitute an integral and inseparable part of this Agreement and the provisions contained therein shall have the same effect as the Sections hereof.

 

7.4                               This Agreement may only be amended, replaced, cancelled, renewed or extended and terms hereof can only be waived by means of a written instrument signed by all Parties or, in the event of waiver, by the Party waiving the corresponding right. No waiver, termination or release of this Agreement, or of any of the terms or provisions hereof, shall be binding upon any of the contracting Parties, unless it is confirmed in writing. No delay in the exercise of any right, power or privilege contemplated herein shall be considered a waiver of such right, power or remedy; and no waiver of any right, power, remedy or privilege, wholly or in part, shall prevent any other future exercise of such right, remedy, power or privilege.

 

7.5                               This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and authorized assignees. Except as otherwise provided herein, this Agreement (and the rights and obligations contemplated herein) may not be assigned by any Party without the prior written consent of all other Parties.

 

7.6                               Any term or provision of this Agreement that is declared null, invalid or unenforceable shall be ineffective only to the extent of such invalidity or unenforceability, without affecting the validity and enforceability of the remaining terms and provisions hereof, which shall remain in full force and effect as if such null, invalid or unenforceable

 

13

 

term or provision were not inserted in this Agreement. The Parties shall negotiate in good faith the replacement of the invalid provisions by others reflecting, as much as possible, the intent thereof.

 

7.7                               The Parties shall bear their respective direct and indirect expenses, incurred in relation to the negotiation and preparation of this Agreement and the consummation of the transactions contemplated herein.

 

7.8                               The Parties hereto understand and agree that all terms and conditions set forth herein shall be subject to specific performance, as provided in the Brazilian Code of Civil Procedure.

 

7.9                               The Parties hereto acknowledge that this Agreement is an instrument enforceable out of court, as set forth in Article 585, II, of the Brazilian Code of Civil Procedure.

 

7.10                        This Agreement is irrevocably and irreversibly executed, constituting legal, valid and biding obligations, and it shall be binding and inure to the benefit of the Parties hereto and their respective successors and permitted assignees.

 

7.11                        The Parties hereby agree to grant confidential treatment to the information provided in this Agreement and in the exhibits hereto and which qualify as confidential information, and they further agree to disclose the terms pertaining the transactions contemplated herein and in the exhibits hereto strictly as required by any law or regulation to which the Parties are subject. The terms of the material fact announcement, notice to the market or press release to be disclosed by the Parties and/or their controlled companies about execution of this Agreement shall be previously submitted by each Party that shall disclose it to the other Parties.

 

7.12                        This Agreement shall be governed by and construed in accordance with the laws of the Federative Republic of Brazil.

 

SECTION 8

CONFLICT RESOLUTION

 

8.1                               The Parties hereto shall use their best efforts to amicably and by consensus resolve any dispute, litigation, matter, doubt or divergence of any nature, directly or indirectly related to this Agreement (“Conflict”), involving any of the Parties.

 

8.2                               If the Parties fail to reach an amicable resolution and mutual agreement with respect to the Conflict, after discussing for a period of ten (10) business days, the Conflict shall be settled by arbitration, to be conducted and managed by the Arbitration Center of the Brazil-Canada Chamber of Commerce (“Chamber”).

 

14

 

8.3                               The arbitration shall be carried out according to the procedural rules of the Chamber in force at the time of arbitration.

 

8.4                               The arbitration shall be conducted by an arbitral tribunal composed of three arbitrators enrolled with the Brazilian Bar Association (“Arbitral Tribunal”).

 

8.4.1                      Each Litigating Party shall appoint an arbitrator. If there is more than one claimant, all of them shall mutually appoint one single arbitrator; if there is more than one respondent, all of them shall mutually appoint one single arbitrator. The third arbitrator, who shall preside over the Arbitration Court, shall be mutually agreed upon by the arbitrators appointed by the Litigating Parties.

 

8.4.2                      Any omission, refusal, litigation, doubt and failure to reach an agreement with respect to the appointment of the arbitrators by the Litigating Parties or to the choice of the third arbitrator shall be settled by the Chamber.

 

8.4.3                      The procedures set forth in this section shall also apply to the events of substitution of arbitrator.

 

8.5                               The arbitration shall be conducted in the City of Rio de Janeiro, State of Rio de Janeiro, and the Arbitral Tribunal may, upon statement of its reasons, designate the performance of specific actions in other places.

 

8.5.1                      The arbitration shall be conducted in Portuguese.

 

8.5.2                      The arbitration shall be conducted under the law, and the rules and principles of the legal system of the Federative Republic of Brazil shall apply.

 

8.5.3                      The arbitration shall be completed within six (6) months, which term may be reasonably extended by the Arbitral Tribunal.

 

8.5.4                      The arbitration shall be confidential.

 

8.6                               The Arbitral Tribunal shall allocate between the Parties, according to the criteria of loss of suit, reasonableness and proportionality, the payment and reimbursement of (i) charges and other amounts due, paid or reimbursed to the Chamber, (ii) fees and other amounts due, paid or reimbursed to the arbitrators, (iii) fees and other amounts due, paid or reimbursed to the experts, translators, interpreters, stenotypists and other assistants that may be designated by the Arbitral Tribunal, (iv) the attorneys’ fees fixed by the Arbitral Tribunal and (v) any damages for malicious prosecution. The Arbitral Tribunal shall not render a judgment against any of the Litigating Parties to pay or reimburse (i) contractual fees or any other amount due, paid or reimbursed by the other party to its counsel, technical assistants, translators, interpreters and other assistants and (ii) any other amount

 

15

 

due, paid or reimbursed by the other party with respect to the arbitration, such as expenses incurred with photocopies, notary public certifications, consular certifications and trips.

 

8.7                               The arbitral awards shall be final and definitive, waiving judicial ratification, and they shall be non-appealable, except for the motion for corrections and clarifications to the Arbitral Tribunal, as set forth in article 30 of Law No. 9,307/96 and any annulment action with grounds on article 32 of Law No. 9,307/96.

 

8.8                               Before installation of the Arbitral Tribunal, any of the Litigating Parties may claim provisional remedies or interlocutory reliefs to the Judicial Branch; however, no petition for a provisional remedy or interlocutory relief to the Judicial Branch shall affect the existence, validity and effectiveness of the arbitration conclusion, nor shall it represent a waiver with respect to the need of submitting the Conflict to arbitration. After installation of the Arbitral Tribunal, the petitions for provisional remedy or interlocutory relief shall be addressed to the Arbitral Tribunal.

 

8.9                               The parties hereby elect the Central Courts of the Judicial District of Rio de Janeiro to decide on (i) provisional remedies and interlocutory reliefs prior to the instatement of the Arbitral Tribunal, (ii) enforcement of the decisions taken by the Arbitral Tribunal, including the final award and any partial award, (iii) any annulment action with grounds on Article 32 of Law No. 9,307/96 and (iv) the Conflicts that may not be submitted to arbitration under the Brazilian law, provided the parties hereby exclude any other, no matter how privileged or special it may be.

 

IN WITNESS WHEREOF the Parties hereto caused this Agreement to be executed in eight (8) counterparts of same contents and form, before two (2) witnesses.

 

Rio de Janeiro, February 19, 2014.

 

ANDRADE GUTIERREZ S.A.
Name:		Name:
Title:		Title:

 

16

 

Signature page of the Equity Interest Exchange Agreement entered into by and between Andrade Gutierrez S.A., Bratel Brasil S.A., Pasa Participações S.A., Ag Telecom Participações S.A., Jereissati Telecom S.A., EDSP75 Participações S.A., L.F. Tel S.A., Fundação Atlântico de Seguridade Social on February 19, 2014.

 

BRATEL BRASIL S.A.
Name:		Name:
Title:		Title:

 

PASA PARTICIPAÇÕES S.A.
Name:		Name:
Title:		Title:

 

AG TELECOM PARTICIPAÇÕES S.A.
Name:		Name:
Title:		Title:

 

JEREISSATI TELECOM S.A.
Name:		Name:
Title:		Title:

 

EDSP75 PARTICIPAÇÕES S.A.
Name:		Name:
Title:		Title:

 

L.F. TEL S.A.
Name:		Name:
Title:		Title:

 

17

 

Signature page of the Equity Interest Exchange Agreement entered into by and between Andrade Gutierrez S.A., Bratel Brasil S.A., Pasa Participações S.A., Ag Telecom Participações S.A., Jereissati Telecom S.A., EDSP75 Participações S.A., L.F. Tel S.A., Fundação Atlântico de Seguridade Social on February 19, 2014.

 

 

FUNDAÇÃO ATLÂNTICO DE SEGURIDADE SOCIAL
Name:		Name:
Title:		Title:

 

 

Witnesses:
1.		2.
Name:		Name:
ID:		ID:

 

18

 

This document is a free translation only. Due to the complexities of language translation, translations are not always precise. The original document was prepared in Portuguese and in case of any divergence, discrepancy or difference between this version and the Portuguese version, the Portuguese version shall prevail. The Portuguese version is the only valid and complete version and shall prevail for any and all purposes. There is no assurance as to the accuracy, reliability or completeness of the translation. Any person reading this translation and relying on it should do so at his or her own risk.

 

SHARE EXCHANGE AGREEMENT

 

BETWEEN

 

JEREISSATI TELECOM S.A.

 

AND

 

BRATEL BRASIL S.A.

 

AND AS INTERVENING PARTIES

 

PASA PARTICIPAÇÕES S.A.

AG TELECOM PARTICIPAÇÕES S.A.

ANDRADE GUTIERREZ S.A.

EDSP75 PARTICIPAÇÕES S.A.

L.F. TEL S. A.

FUNDAÇÃO ATLÂNTICO DE SEGURIDADE SOCIAL

 

 

DATED FEBRUARY 19, 2014

 

1

 

SHARE EXCHANGE AGREEMENT

 

By this instrument, the parties:

 

on the one hand,

 

1.                                      JEREISSATI TELECOM S.A., a corporation with its principal place of business in the City of São Paulo, State of São Paulo, at Rua Angelina Maffei Vita, 200 — 9th Floor, enrolled with the National Corporate Taxpayers’ Register of the Ministry of Finance (CNPJ/MF) under No. 53.790.218/0001-53, herein represented pursuant to its By-Laws, hereinafter referred to as “Jereissati Telecom”.

 

and, on the other hand,

 

2.                                      BRATEL BRASIL S.A., a corporation with its principal place of business in the City of São Paulo, State of São Paulo, at Avenida Brigadeiro Faria Lima, 2277, 15th Floor, 1503, suite 02, Postal Code 01452-000, enrolled with the CNPJ/MF under No. 12.956.126/0001-13, with its articles of incorporation duly registered with the Commercial Registry of the State of São Paulo under State Registration Number (NIRE) 35.300.386.973, herein represented pursuant to its By-Laws, hereinafter referred to as “BRATEL BRASIL”;

 

BRATEL BRASIL and Jereissati Telecom shall be hereinafter jointly referred to as “Parties”, and individually as “Party”.

 

and, furthermore, as Intervening and Consenting Parties:

 

3.                                      PASA PARTICIPAÇÕES S.A., a corporation with its principal place of business in the City of Belo Horizonte, State of Minas Gerais, at Av. do Contorno No. 8123, Cidade Jardim District, Postal Code 30110-056, enrolled with the CNPJ/MF under No. 11.221.565/0001-15, herein represented pursuant to its By-Laws, hereinafter simply referred to as “PASA”;

 

4.                                      AG TELECOM PARTICIPAÇÕES S.A., a corporation with its principal place of business in the City of Belo Horizonte, State of Minas Gerais, at Avenida do Contorno No. 8.123, Cidade Jardim District, Postal Code 30110-056, enrolled with the CNPJ/MF under No. 03.260.334/0001-92, herein represented pursuant to its By-Laws, hereinafter referred to as “AG”;

 

5.                                      ANDRADE GUTIERREZ S.A. (successor of Andrade Gutierrez Telecomunicações Ltda.), a corporation with its principal place of business in the City of Belo Horizonte, State of Minas Gerais, at Av. do Contorno No. 8.123, Cidade Jardim,

 

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enrolled with the CNPJ/MF under No. 17. 262. 197/0001-30, herein represented pursuant to its By-Laws, hereinafter referred to as “AG S. A.”;

 

6.                                      EDSP75 PARTICIPAÇÕES S. A., a corporation with its principal place of business in the City of São Paulo, State of São Paulo, at Rua Angelina Maffei Vita, 200 — 9th Floor, São Paulo (State of São Paulo), enrolled with the CNPJ/MF under No. 09. 626. 007/0001-98, herein represented pursuant to its By-Laws, hereinafter simply referred to as “EDSP75”;

 

7.                                      L. F. TEL S. A., a corporation with its principal place of business in the City of São Paulo, State of São Paulo, at Avenida Dr. Chucri Zaidan, No. 920, 16th Floor, Postal Code 04583-110, enrolled with the CNPJ/MF under No. 02.390.206/0001-09, herein represented pursuant to its By-Laws, hereinafter referred to as “LF TEL”;

 

8.                                      FUNDAÇÃO ATLÂNTICO DE SEGURIDADE SOCIAL, a foundation with its principal place of business in the City of Rio de Janeiro, State of Rio de Janeiro, at Rua Lauro Muller No. 116, suite 2901, Botafogo, enrolled with the CNPJ/MF under No. 07. 110. 214/0001-60, herein represented pursuant to its By-Laws, hereinafter referred to as “FATL”;

 

WHEREAS:

 

(i)                         AG, AG S.A., LF TEL, Jereissati Telecom, PASA, EDSP75, BRATEL BRASIL and Portugal Telecom SGPS S.A. (“PT SGPS”) executed, on October 1st, 2013, a Memorandum of Understandings (“MOU”) establishing the principles, terms and conditions negotiated among these companies, for the purpose of carrying out disproportional partial spin-offs of PASA and of EDSP 75, and partial spin-offs of AG and of LF TEL, aiming at segregating the equity interests held by these companies in CTX Participações S.A. (“CTX”) and in Contax Participações S.A. (“CONTAX”) (“CTX Spin-Offs”), in order to allow exchanges of shares between PT SGPS or its subsidiaries (“Portugal Telecom”) and the other shareholders of PASA, and between Portugal Telecom and the other shareholders of EDSP 75 (“Exchanges”), within the scope of the intended execution of a transaction that will involve a combination of the activities and business of Portugal Telecom and of Oi S.A. (“Oi”), and which shall result in, among other things, PT SGPS’s ceasing to exist and in the merger of the shares held by the shareholders of PT SGPS into the shares held by the shareholders of Oi and of the holding company Telemar Participações S.A. (“Oi Transaction”);

 

(ii)                      The CTX Spin-Offs, as better detailed in Exhibit I hereto, will be carried out so that at the end of such transactions, (a) the equity interests directly or indirectly held by PASA and AG in CTX and in CONTAX will be segregated into two new holding

 

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companies, PASA Contact Center Participações S.A. (“New PASA”) and AG Contact Center Participações S.A. (“New AG”), it being understood that the capital stock of New PASA will be fully held by AG S.A. and by BRATEL BRASIL, in the same proportion currently held by them in the capital stock of PASA, and the capital stock of New AG will be fully held by New PASA; and (b) the equity interests directly or indirectly held by EDSP75 and LF TEL in CTX and in CONTAX will be segregated in two new holding companies, Detmold RJ Participações S.A. (“New EDSP75”) and Dronten RJ Participações S.A. (“New LF”), it being understood that the capital stock of New EDSP75 will be fully held by Jereissati Telecom and by BRATEL BRASIL, in the same proportion currently held by them in the capital stock of EDSP75, and the capital stock of New LF will be fully held by New EDSP75.

 

(iii)                   After implementation of the CTX Spin-Offs, the capital stock of the companies PASA, AG, New PASA, New AG, EDSP75, LF TEL, New EDSP75, New LF will be distributed among their shareholders as provided in Exhibit II to this Agreement, it being understood that:

 

(a)         New EDSP75 will hold shares representing all of the capital stock of New LF, and New PASA will be the holder of shares representing all of the capital stock of New AG;

 

(b)         New AG and New LF will be the holders of (a) 2,274,921,628 common shares issued by CTX, representing 69.92% of the total and voting capital stock of CTX; and (b) 5,305,288 common shares and 21,221,152 preferred shares issued by CONTAX, representing 7.71% of the total capital stock and 4.44% of the voting capital stock of CONTAX, distributed between them as follows:

 

Company		CTX Common Shares		CONTAX Common Shares		CONTAX Preferred Shares
New AG		1,137,460,814		2,652,644		10,610,576
New LF		1,137,460,814		2,652,644		10,610,576

 

(c)          BRATEL BRASIL, Jereissati Telecom and Sayed RJ Participações S.A. (“SAYED”) will directly or indirectly hold common shares representing 100% of the total capital stock of EDSP75 (“EDSP75 Shares”);

 

(d)         BRATEL BRASIL, Jereissati Telecom and SAYED will directly or indirectly hold shares representing 100% of the total capital stock of New EDSP75 (“New EDSP75 Shares”);

 

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(iv)                    In addition to the indirect equity interest held by BRATEL BRASIL in CTX and in CONTAX by means of its equity interest in PASA and in EDSP75, BRATEL BRASIL will directly own on the Closing Date, as defined below, (a) 647,451,385 common shares issued by CTX, representing 19.90% of its total and voting capital stock (“CTX-Bratel Shares”) and (b) 4,292,096 common shares and 17,168,384 preferred shares issued by CONTAX, representing 6.24% of the total capital stock and 3.59% of the voting capital stock of CONTAX (“Contax-Bratel Shares”);

 

(v)                       After implementation of the CTX Spin-Offs and satisfaction of the Conditions Precedent, as defined below, BRATEL BRASIL, on the one hand, and Jereissati Telecom, on the other hand, wish to exchange (a) all New EDSP75 Shares held by BRATEL BRASIL (“New EDSP75-Bratel Shares”), as well as fifty percent (50%) of all CTX-Bratel Shares and of the Contax-Bratel Shares (jointly, these equity interests shall be hereinafter referred to as “Bratel Equity Interests”) for (b) 117,329,117 common shares issued by EDSP75 held by Jereissati Telecom, representing 14.46% of the total and voting capital stock of EDSP75 (“EDSP75-Jereissati Telecom Shares”).

 

(vi)                  The shareholders of CTX, as applicable, have expressly waived, on the date hereof, their respective rights of first refusal with respect to the transfer of equity interests that is the subject matter of this Agreement.

 

(vii)               Pursuant to applicable law, the prior authorization for implementation of the Oi Transaction was granted by the Brazilian Antitrust Authorities (“CADE”) by means of the order of the CADE General Superintendent No. 39, of January 13, 2014, published in the Federal Official Gazette on January 14, 2014, and the prior authorization for implementation of the transactions contemplated in this Agreement was granted by CADE by means of the order of the CADE General Superintendent No. 21, of January 7, 2014, published in the Federal Official Gazette on January 8, 2014;

 

(viii)            Oi, Portugal Telecom SGPS, the other parties to the MOU, Telemar Participações S.A. and/or the direct and indirect shareholders thereof, as the case may be, executed or approved the execution, until the Closing (as defined below), of several agreements, as well as the consummation of several corporate acts, aimed at the consummation of the CTX Spin-Offs and of the Oi Transaction (the “Transaction Agreements”), including the Share Exchange Agreement among AG S.A., BRATEL BRASIL, PASA, AG, Jereissati Telecom, EDSP75, LF TEL and FATL, by means of which BRATEL BRASIL and AG S.A. agree to irrevocably and irreversibly carry out the exchange of the shares issued by New PASA, CTX and CONTAX held by BRATEL BRASIL for shares issued by PASA (“AG Exchange Agreement”).

 

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NOW, THEREFORE, the Parties resolve to execute this Share Exchange Agreement (the “Agreement”), which shall be governed by the provisions described below:

 

SECTION 1

EXCHANGE OF SHARES

 

1.1                               Share Exchange. Subject to the satisfaction of the Conditions Precedent and of the other terms and conditions set forth in this Agreement, BRATEL BRASIL and Jereissati Telecom agree to irrevocably and irreversibly exchange, on the Closing Date, the Bratel Equity Interests for the EDSP75-Jereissati Telecom Shares, with all resulting rights, including, without limitation, the right to dividends still not declared, bonuses, rights of first refusal and priorities to which these equity interests become entitled as from the Closing Date, all free and clear of any and all liens, claims, options, rights of first refusal, charges and encumbrances of any kind (“Lien”), except as otherwise provided in the CTX/CONTAX Shareholders Agreement (as defined below) (the “Share Exchange”).

 

1.2                               Transfer of Equity Interests. Subject to the satisfaction of the Conditions Precedent and of the other terms and conditions set forth in this Agreement, BRATEL BRASIL and Jereissati Telecom agree to perform, on the Closing Date, all actions required for registration of the transfer (i) of the BRATEL BRASIL Equity Interests  to Jereissati Telecom by means of the execution of the corresponding instruments of transfer in the applicable corporate books of New EDSP75 and of CTX and of the transfer order relating to the transfer of 50% of the Contax-Bratel Shares and (ii) of the EDSP75-Jereissati Telecom Shares to BRATEL BRASIL, by means of the signature of the corresponding instrument of transfer in the applicable corporate books of EDSP75.

 

1.3                               After implementation of the Share Exchange pursuant to the provisions of Section 1.1 above, BRATEL BRASIL and Jereissati Telecom shall grant each other a general, full, complete, irrevocable and irreversible release with respect to the Share Exchange, expressly declaring that they have nothing else to receive or to claim from one another in this respect on any account and at any time.

 

1.4                               The Parties estimate that the equity interests to be exchanged pursuant to the provisions of Section 1.1 above have equal value.

 

1.4.1                     For all fiscal and tax purposes and effects, each of the Parties maintains the corresponding original costs of acquisition of the exchanged equity interests, so that the shares received in exchange for the previous ones will become part of their respective assets exactly for the amount of the investments written down in their records.

 

1.5                               AG and FATL hereby expressly represent that they agree with the Share Exchange and that they waive any right with respect to such transfer, including, without limitation,

 

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the right of first refusal for acquisition of the equity interests hereby exchanged pursuant to the provisions of the CTX/CONTAX Shareholders’ Agreement (as defined below) and of the Shareholders’ Agreements of PASA and EDSP 75, as applicable.

 

1.6                               In view of the Share Exchange contemplated in this Agreement and the exchange contemplated in the AG Exchange Agreement, on the Closing Date, BRATEL BRASIL will cease from being a direct or indirect shareholder of CONTAX and of CTX, as a result of which it will no longer be subject to the Second Amended and Restated Private Instrument of Shareholders Agreement of CTX Participações S.A. and of Contax Participações S.A., executed on May 11, 2011 (“CTX/CONTAX Shareholders’ Agreement”). Therefore, upon the satisfaction of all Conditions Precedent, BRATEL BRASIL, on the one hand, and AG, LF TEL and FATL, on the other hand, will automatically grant one another a general, full, complete, irrevocable and irreversible release with respect to the CTX/CONTAX Shareholders’ Agreement, expressly declaring that they have nothing else to receive or to claim from one another in this respect on any account and at any time.

 

SECTION 2

CONDITIONS PRECEDENT AND CLOSING

 

2.1                               Conditions Precedent of BRATEL BRASIL. The Parties acknowledge that BRATEL BRASIL shall only be required to consummate the Closing (as defined in Section 2.4 below) if it receives from Jereissati Telecom a notice confirming the satisfaction of the following Conditions Precedent (“Notice of Closing”), pursuant to the form included in Exhibit 2.1 (“Bratel Conditions Precedent”):

 

(i)                                      the representations and warranties provided by Jereissati Telecom in Section 3.2 below are true, correct and complete on the Closing Date;

 

(ii)                                   Implementation of the CTX Spin-Offs  pursuant to the provision of Exhibit I to this Agreement; and

 

(iii)                                the settlement of the capital increase of Oi upon implementation of the transactions set forth in the Subscription Agreement of Shares Issued by Oi S.A. executed on the date hereof between PT SGPS and Oi (“PT SGPS Subscription Agreement”), which corresponds to one of the steps of the Oi Transaction.

 

2.1.1                      In the event of nonoccurrence of any of the Bratel Conditions Precedent set forth above by October 1st, 2014, BRATEL BRASIL shall have no obligation to carry out the Share Exchange as provided herein, and it shall have the right to, at its sole discretion, unilaterally terminate this Agreement, by means of a written notice sent to the other Parties in this respect, subject to the provisions of Section 7 below.

 

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2.2          Jereissati Telecom Conditions Precedent. The Parties acknowledge that Jereissati Telecom shall only be required to consummate the Closing (as defined in Section 2.4 below) if it receives from BRATEL BRASIL a notice confirming the satisfaction of the following conditions precedent (“Notice of Closing”), pursuant to the form included in Exhibit 2.2 (“Jereissati Telecom Conditions Precedent” and, jointly, with the Bratel Conditions Precedent, “Conditions Precedent”):

 

(i)             the representations and warranties provided by BRATEL BRASIL in Section 3.1 below are true, correct and complete on the Closing Date;

 

(ii)            implementation of the CTX Spin-Offs  pursuant to the provision of Exhibit I to this Agreement; and

 

(iii)           the settlement of the capital increase of Oi upon implementation of the transactions set forth in the PT SGPS Subscription Agreement, which corresponds to one of the steps of the Oi Transaction.

 

2.2.1           In the event of nonoccurrence of any of the Jereissati Telecom Conditions Precedent set forth above by October 1st, 2014, Jereissati Telecom shall have no obligation to carry out the Share Exchange as provided herein, and it may, at its sole discretion, unilaterally terminate this Agreement, by means of a written notice sent to the other Parties in this respect, subject to the provisions of Section 7 below.

 

2.3          Waiver of the Conditions Precedent. Each of BRATEL BRASIL and Jereissati Telecom may, in their sole discretion, waive satisfaction of any of their respective Conditions Precedent.

 

2.4          Closing. Subject to the satisfaction or waiver of all Conditions Precedent, the Parties agree to carry out the Share Exchange contemplated herein on the same date of the settlement of the capital increase of Oi with the closing of the transactions contemplated in the PT SGPS Subscription Agreement (“Closing” and “Closing Date”).

 

SECTION 3

REPRESENTATIONS AND WARRANTIES

 

3.1          Representations and Warranties of BRATEL BRASIL. BRATEL BRASIL hereby represents and warrants to Jereissati Telecom that the representations and warranties provided below are true, accurate and complete:

 

3.1.1       Organization and Existence. BRATEL BRASIL is a corporation duly organized and validly existing under the laws of Brazil.

 

3.1.2       Authority. BRATEL BRASIL holds all powers and authority required to

 

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execute this Agreement, comply with the obligations set forth herein and consummate the transactions contemplated herein. BRATEL BRASIL is not required to perform any other action in order to authorize the execution and performance of this Agreement.

 

3.1.3       Binding Effect. This Agreement constitutes a legal, valid and binding obligation of BRATEL BRASIL, enforceable according to its terms and conditions.

 

3.1.4       No Breach, Consents. Neither the execution of this Agreement by BRATEL BRASIL, nor the compliance by BRATEL BRASIL with any and all its obligations hereunder, or implementation of the transactions set forth herein:

 

(a)           breach or conflict with any provision of the corporate documents of BRATEL BRASIL;

 

(b)           breach, conflict or result in a violation or termination of, nor grant any other contracting party any right or additional compensation by virtue of, or any right to terminate, nor constitute a default under any agreement to which BRATEL BRASIL is a party, or to which BRATEL BRASIL or any of its property or assets are subject or bound; or

 

(c)            result in the creation of any Lien on any property of BRATEL BRASIL, except as provided herein.

 

3.1.5       Ownership of Bratel Equity Interests. BRATEL BRASIL shall be, on the Closing Date, the sole and lawful owner and holder of all Bratel Equity Interests, with all they represent, free and clear of any and all Liens.

 

3.2          Representations and Warranties of Jereissati Telecom. Jereissati Telecom hereby represents and warrants to BRATEL BRASIL that the representations and warranties provided below are true, accurate and complete:

 

3.2.1       Organization and Existence. Jereissati Telecom is a corporation, duly organized and validly existing under the laws of Brazil.

 

3.2.2       Authority. Jereissati Telecom has all powers and authority required to execute this Agreement, comply with the obligations set forth herein and consummate the transactions contemplated herein. Jereissati Telecom is not required to perform any other action in order to authorize the execution and performance of this Agreement.

 

3.2.3       Binding Effect. This Agreement constitutes a legal, valid and binding obligation of Jereissati Telecom, enforceable according to its terms and conditions.

 

3.2.4       No Breach, Consents. Neither the execution of this Agreement by Jereissati

 

9

 

Telecom, nor the compliance by Jereissati Telecom with any and all its obligations hereunder, or implementation of the transactions set forth herein:

 

(a)           breach or conflict with any provision of the corporate documents of Jereissati Telecom;

 

(b)           breach, conflict or result in a violation or termination of, nor grant any other contracting party any right or additional compensation by virtue of, or any right to terminate, nor constitute a default under any agreement to which Jereissati Telecom is a party, or to which Jereissati Telecom or any of its property or assets are subject or bound; or

 

(c)            result in the creation of any Lien on any property of Jereissati Telecom, except as provided herein.

 

3.2.5       Ownership of EDSP75- Jereissati Telecom Shares. Jereissati Telecom shall be, on the Closing Date, the sole and lawful owner and holder of all EDSP75-Jereissati Telecom Shares, with all they represent, free and clear of any and all Liens.

 

SECTION 4

INDEMNIFICATION

 

4.1          Indemnification by BRATEL BRASIL. In the event BRATEL BRASIL breaches any of its representations, warranties, commitments or obligations hereunder and in the event that Jereissati Telecom files a written claim for damages against BRATEL BRASIL, then BRATEL BRASIL agrees to indemnify, defend and hold Jereissati Telecom harmless from and against any damage suffered by Jereissati Telecom, resulting or arising from such breach.

 

4.2          Indemnification by Jereissati Telecom. In the event Jereissati Telecom breaches any of its representations, warranties, commitments or obligations hereunder and in the event that BRATEL BRASIL files a written claim for damages against Jereissati Telecom, then Jereissati Telecom agrees to indemnify, defend and hold BRATEL BRASIL harmless from and against any damage suffered by BRATEL BRASIL, resulting or arising from such breach.

 

SECTION 5

RESCISSION

 

5.1          This Agreement shall be automatically rescinded, irrespective of judicial or extrajudicial notice, exclusively in the following events:

 

(i)             claim for voluntary bankruptcy or court-supervised or out-of-court

 

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reorganization of BRATEL BRASIL and/or of Jereissati Telecom; or,

 

(ii)            in case of a final and non-appealable court order that prevents the Closing; or

 

(iii)           in case of termination or default of any obligation, term or condition by any other party, of any of the Transaction Agreements until and including the Closing Date.

 

SECTION 6

TERMINATION

 

6.1          This Agreement may be unilaterally terminated (i) by BRATEL BRASIL, in case one or more Bratel Conditions Precedent are not satisfied by October 1st, 2014, or (ii) by Jereissati Telecom, in case one or more Jereissati Telecom Conditions Precedent are not satisfied by October 1st, 2014, or (iii) either by BRATEL BRASIL or Jereissati Telecom in case the Closing does not occur by October 1st, 2014.

 

6.2          Without prejudice to the exercise of all legal remedies to which the parties are entitled, in the event the Closing does not occur by an action or failure to act of one of the Parties, the innocent Party may, at its own discretion, require from the other Party compliance with the defaulted obligation and, consequently, consummation of the Closing by means of specific performance.

 

6.3          In case a court, arbitration or administrative order is rendered preventing performance of this Agreement, the Parties agree, in good faith and at their own expenses, to adopt all measures to protect the Agreement and its form of performance, aiming at alleviating, as soon as possible, all effects of the aforementioned order.

 

6.3.1       Once the effects of the court, arbitration or administrative order are alleviated, the Parties shall fully comply with their obligations hereunder, without any change and in full compliance with the contractually agreed terms, it being understood that (i) the terms in progress shall be deemed suspended on the date on which the court, arbitration or administrative order was rendered; and (ii) in no event may this Agreement be consummated after October 1st, 2014.

 

6.4          The provisions regarding conflict resolution set forth in Section 8 shall survive termination of this Agreement.

 

SECTION 7

FINAL PROVISIONS

 

7.1          Any notice, communication, correspondence, notification, request, claim, action, instruction, arbitration notice, summons or service of process related to this Agreement or

 

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to any dispute, action, doubt or controversy resulting from or relating to this Agreement shall be deemed delivered when received by the other Party (i) by certified mail, from a recognized courier company, upon actual receipt thereof, (ii) at the time of delivered, if delivered personally, or (iii) on the date of confirmation of receipt of the transmission issued by fax, when sent by fax, as the case may be, to the addresses and telephone/fax numbers listed below (or to any other address or telephone/fax number informed by one of the Parties in writing to the other Parties):

 

(i)             If to Jereissati Telecom:

 

Jereissati Telecom S.A.

Attn.: Mr. Fernando Magalhães Portella

Rua Angelina Maffei Vita, 200 — 9th Floor, São Paulo (State of São Paulo)

 

(ii)            If to BRATEL BRASIL:

 

Bratel Brasil S.A.

Attn.: Shakhaf Wine

Avenida Brigadeiro Faria Lima, 2277, 15th Floor, 1503, suite 02, São Paulo (State of São Paulo)

 

With copy to:

SOUZA, CESCON, BARRIEU & FLESCH ADVOGADOS

R. Funchal, No. 418, 11th Floor, Vila Olímpia, Postal Code 04551-060, São Paulo, State of São Paulo

Fax: (55 11) 3089-6565

Attn.: Ms. Maria Cristina Cescon

E-mail: cristina.cescon@scbf.com.br

 

(iii)           If to the Intervening Parties:

 

Andrade Gutierrez S.A.:

Attn.: Mr. Renato Torres Faria

Av. do Contorno No. 8123, Cidade Jardim District, Belo Horizonte (State of Minas Gerais)

 

Pasa Participações S.A.:

Attn.: Mr. Renato Torres Faria

Av. do Contorno No. 8123, Cidade Jardim District, Belo Horizonte (State of Minas Gerais)

 

AG Telecom Participações S.A.

 

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Attn.: Mr. Renato Torres Faria

Av. do Contorno No. 8123, Cidade Jardim District, Belo Horizonte (State of Minas Gerais)

 

Jereissati Telecom S.A.

Attn.: Mr. Fernando Magalhães Portella

Rua Angelina Maffei Vita, 200 — 9th Floor, São Paulo (State of São Paulo)

 

EDSP75 Participações S.A.

Attn.: Mr. Fernando Magalhães Portella

Rua Angelina Maffei Vita, 200 — 9th Floor, São Paulo (State of São Paulo)

 

L.F. TEL S.A.

Attn.: Fernando Magalhães Portella

Avenida Dr. Chucri Zaidan, No. 920, 16th Floor, Postal Code 04583-110, São Paulo (State of São Paulo)

 

Fundação Atlântico De Seguridade Social

Attn.: Márcio de Araújo Faria

Rua Lauro Muller No. 116, suite 2901, Botafogo, Rio de Janeiro (State of Rio de Janeiro)

 

7.1.1       Any of the Parties may change the address to which the notice shall be sent by means of a written notice addressed to the other contracting Parties pursuant to this Section 7.1, provided that with respect to this provision, the notice shall be deemed received only upon acknowledgment of such receipt by each one of the other Parties.

 

7.2          This Agreement and the exhibits hereto contain the entire agreement and understanding with respect to the subject matter hereof between the contracting Parties and specifically supersede any previous understanding of the Parties on the subject matter hereof.

 

7.3          The exhibits hereto constitute an integral and inseparable part of this Agreement and the provisions contained therein shall have the same effect as the Sections hereof.

 

7.4          This Agreement may only be amended, replaced, cancelled, renewed or extended and terms hereof can only be waived by means of a written instrument signed by all Parties or, in the event of waiver, by the Party waiving the corresponding right. No waiver, termination or release of this Agreement, or of any of the terms or provisions hereof, shall be binding upon any of the contracting Parties, unless it is confirmed in writing. No delay in the exercise of any right, power or privilege contemplated herein shall be considered a waiver of such right, power or remedy; and no waiver of any right, power, remedy or privilege, wholly or in part, shall prevent any other future exercise of such right, remedy,

 

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power or privilege.

 

7.5          This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and authorized assignees. Except as otherwise provided herein, this Agreement (and the rights and obligations contemplated herein) may not be assigned by any Party without the prior written consent of all other Parties.

 

7.6          Any term or provision of this Agreement that is declared null, invalid or unenforceable shall be ineffective only to the extent of such invalidity or unenforceability, without affecting the validity and enforceability of the remaining terms and provisions hereof, which shall remain in full force and effect as if such null, invalid or unenforceable term or provision were not inserted in this Agreement. The Parties shall negotiate in good faith the replacement of the invalid provisions by others reflecting, as much as possible, the intent thereof.

 

7.7          The Parties shall bear their respective direct and indirect expenses, incurred in relation to the negotiation and preparation of this Agreement and the consummation of the transactions contemplated herein.

 

7.8          The Parties hereto understand and agree that all terms and conditions set forth herein shall be subject to specific performance, as provided in the Brazilian Code of Civil Procedure.

 

7.9          The Parties hereto acknowledge that this Agreement is an instrument enforceable out of court, as set forth in Article 585, II, of the Brazilian Code of Civil Procedure.

 

7.10        This Agreement is irrevocably and irreversibly executed, constituting legal, valid and biding obligations, and it shall be binding and inure to the benefit of the Parties hereto and their respective successors and permitted assignees.

 

7.11        The Parties hereby agree to grant confidential treatment to the information provided in this Agreement and in the exhibits hereto and which qualify as confidential information, and they further agree to disclose the terms pertaining the transactions contemplated herein and in the exhibits hereto strictly as required by any law or regulation to which the Parties are subject. The terms of the material fact announcement, notice to the market or press release to be disclosed by the Parties and/or their controlled companies about execution of this Agreement shall be previously submitted by each Party that shall disclose it to the other Parties.

 

7.12        This Agreement shall be governed by and construed in accordance with the laws of the Federative Republic of Brazil.

 

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SECTION 8

CONFLICT RESOLUTION

 

8.1          The Parties hereto shall use their best efforts to amicably and by consensus resolve any dispute, litigation, matter, doubt or divergence of any nature, directly or indirectly related to this Agreement (“Conflict”), involving any of the Parties.

 

8.2          If the Parties fail to reach an amicable resolution and mutual agreement with respect to the Conflict, after discussing for a period of ten (10) business days, the Conflict shall be settled by arbitration, to be conducted and managed by the Arbitration Center of the Brazil-Canada Chamber of Commerce (“Chamber”).

 

8.3          The arbitration shall be carried out according to the procedural rules of the Chamber in force at the time of arbitration.

 

8.4          The arbitration shall be conducted by an arbitral tribunal composed of three arbitrators enrolled with the Brazilian Bar Association (“Arbitral Tribunal”).

 

8.4.1       Each Litigating Party shall appoint an arbitrator. If there is more than one claimant, all of them shall mutually appoint one single arbitrator; if there is more than one respondent, all of them shall mutually appoint one single arbitrator. The third arbitrator, who shall preside over the Arbitration Court, shall be mutually agreed upon by the arbitrators appointed by the Litigating Parties.

 

8.4.2       Any omission, refusal, litigation, doubt and failure to reach an agreement with respect to the appointment of the arbitrators by the Litigating Parties or to the choice of the third arbitrator shall be settled by the Chamber.

 

8.4.3       The procedures set forth in this section shall also apply to the events of substitution of arbitrator.

 

8.5          The arbitration shall be conducted in the City of Rio de Janeiro, State of Rio de Janeiro, and the Arbitral Tribunal may, upon statement of its reasons, designate the performance of specific actions in other places.

 

8.5.1       The arbitration shall be conducted in Portuguese.

 

8.5.2       The arbitration shall be conducted under the law, and the rules and principles of the legal system of the Federative Republic of Brazil shall apply.

 

8.5.3       The arbitration shall be completed within six (6) months, which term may be reasonably extended by the Arbitral Tribunal.

 

15

 

8.5.4       The arbitration shall be confidential.

 

8.6          The Arbitral Tribunal shall allocate between the Parties, according to the criteria of loss of suit, reasonableness and proportionality, the payment and reimbursement of (i) charges and other amounts due, paid or reimbursed to the Chamber, (ii) fees and other amounts due, paid or reimbursed to the arbitrators, (iii) fees and other amounts due, paid or reimbursed to the experts, translators, interpreters, stenotypists and other assistants that may be designated by the Arbitral Tribunal, (iv) the attorneys’ fees fixed by the Arbitral Tribunal and (v) any damages for malicious prosecution. The Arbitral Tribunal shall not render a judgment against any of the Litigating Parties to pay or reimburse (i) contractual fees or any other amount due, paid or reimbursed by the other party to its counsel, technical assistants, translators, interpreters and other assistants and (ii) any other amount due, paid or reimbursed by the other party with respect to the arbitration, such as expenses incurred with photocopies, notary public certifications, consular certifications and trips.

 

8.7          The arbitral awards shall be final and definitive, waiving judicial ratification, and they shall be non-appealable, except for the motion for corrections and clarifications to the Arbitral Tribunal, as set forth in article 30 of Law No. 9,307/96 and any annulment action with grounds on article 32 of Law No. 9,307/96.

 

8.8          Before installation of the Arbitral Tribunal, any of the Litigating Parties may claim provisional remedies or interlocutory reliefs to the Judicial Branch; however, no petition for a provisional remedy or interlocutory relief to the Judicial Branch shall affect the existence, validity and effectiveness of the arbitration conclusion, nor shall it represent a waiver with respect to the need of submitting the Conflict to arbitration. After installation of the Arbitral Tribunal, the petitions for provisional remedy or interlocutory relief shall be addressed to the Arbitral Tribunal.

 

8.9          The parties hereby elect the Central Courts of the Judicial District of Rio de Janeiro to decide on (i) provisional remedies and interlocutory reliefs prior to the instatement of the Arbitral Tribunal, (ii) enforcement of the decisions taken by the Arbitral Tribunal, including the final award and any partial award, (iii) any annulment action with grounds on Article 32 of Law No. 9,307/96 and (iv) the Conflicts that may not be submitted to arbitration under the Brazilian law, provided the parties hereby exclude any other, no matter how privileged or special it may be.

 

16

 

IN WITNESS WHEREOF the Parties hereto caused this Agreement to be executed in eight (8) counterparts of same contents and form, before two (2) witnesses.

 

Rio de Janeiro, February 19, 2014.

 

JEREISSATI TELECOM S.A.

 

Name:		Name:
Title:		Title:

 

BRATEL BRASIL S.A.

 

Name:		Name:
Title:		Title:

 

PASA PARTICIPAÇÕES S.A.

 

Name:		Name:
Title:		Title:

 

AG TELECOM PARTICIPAÇÕES S.A.

 

Name:		Name:
Title:		Title:

 

ANDRADE GUTIERREZ S.A.

 

Name:		Name:
Title:		Title:

 

17

 

Signature page of the Share Exchange Agreement entered into by and between Jereissati Telecom S.A., Bratel Brasil S.A., Pasa Participações S.A., Ag Telecom Participações S.A., Andrade Gutierrez S.A., EDSP75 Participações S.A., L.F. Tel S.A., Fundação Atlântico de Seguridade Social on February 19, 2014.

 

EDSP75 PARTICIPAÇÕES S.A.

 

Name:		Name:
Title:		Title:

 

L.F. TEL S.A.

 

Name:		Name:
Title:		Title:

 

FUNDAÇÃO ATLÂNTICO DE SEGURIDADE SOCIAL

 

Name:		Name:
Title:		Title:

 

Witnesses:

 

1.			2.
	Name:			Name:
	ID:			ID:

 

18

 

This document is a free translation only. Due to the complexities of language translation, translations are not always precise. The original document was prepared in Portuguese and in case of any divergence, discrepancy or difference between this version and the Portuguese version, the Portuguese version shall prevail. The Portuguese version is the only valid and complete version and shall prevail for any and all purposes. There is no assurance as to the accuracy, reliability or completeness of the translation. Any person reading this translation and relying on it should do so at his or her own risk.

 

2ND AMENDMENT TO THE SHAREHOLDERS AGREEMENT

OF TELEMAR PARTICIPAÇÕES S.A.

 

BETWEEN

 

AG TELECOM PARTICIPAÇÕES S.A.

 

LF TEL S.A.

 

FUNDAÇÃO ATLÂNTICO DE SEGURIDADE SOCIAL

 

AND, AS INTERVENING PARTY,

 

TELEMAR PARTICIPAÇÕES S.A.

 

EXECUTED ON FEBRUARY 19, 2014.

 

 

2ND AMENDMENT TO THE SHAREHOLDERS AGREEMENT

OF TELEMAR PARTICIPAÇÕES S.A.

 

By this instrument:

 

1.              AG TELECOM PARTICIPAÇÕES S.A., a share corporation with head offices in the city of Rio de Janeiro, State of Rio de Janeiro, at Praia de Botafogo no. 300, suite 401-part, enrolled as taxpayer at CNPJ/MF under no. 03.260.334/0001-92, herein represented in accordance with its By-Laws, hereinafter referred to as “AG TELECOM” ;

 

2.              LF TEL S.A., a share corporation with head offices in the city of Sao Paulo, State of Sao Paulo, at Rua Angelina Maffei Vita no. 200, 9th floor, enrolled as taxpayer at CNPJ/MF under no. 02.390.206/0001-09, herein represented in accordance with its By-Laws, hereinafter referred to as “LF TEL”; and

 

3.              FUNDAÇÃO ATLÂNTICO DE SEGURIDADE SOCIAL, a legal entity of private law, with head offices at Rua Lauro Muller 116, 29th floor, suite 2901, City and State of Rio de Janeiro, enrolled as taxpayer at CNPJ/MF under No. 07.110.214/0001-60, herein represented in accordance with its By-Laws, hereinafter referred to “FATL”, with AG TELECOM, LF TEL and FATL hereinafter referred to jointly and indistinguishably as the “Shareholders”;

 

And, as “First Intervening Party”,

 

4.              TELEMAR PARTICIPAÇÕES S.A., a share corporation with head offices at Praia de Botafogo No. 300, 11th floor, suite 1101 (part), City and State of Rio de Janeiro, enrolled as taxpayer at CNPJ/MF under No. 02.107.946/0001-87, herein represented in accordance with its By-Laws, hereinafter referred to as “Telemar Participações” or the “Company”;

 

WHEREAS:

 

I.                                        AG TELECOM, LF TEL and FATL are shareholders of the Company;

 

II.                                   The Company is the controlling shareholder of Oi S.A., a share corporation, with head offices in the City and State of Rio de Janeiro, at Rua do Lavradio No. 71, 2nd floor, Centro, enrolled as taxpayer under CNPJ/MF No. 76.535.64/0001-43 (“Oi”);

 

III.                              On April 25, 2008, the Shareholders executed a shareholders agreement regulating certain aspects of their relationship as shareholders of the Company, which was subsequently amended on January 25, 2011 (the “ AG/LF/FATL Shareholders Agreement”);

 

 

IV.                               AG TELECOM, LF TEL and FATL are also parties to a shareholders agreement with BRATEL BRASIL S.A. (“BRATEL BRASIL”), BNDES PARTICIPAÇÕES S.A. — BNDESPAR (“BNDESPAR”), CAIXA DE PREVIDENCIA DOS FUNCIONARIOS DO BANCO DO BRASIL — PREVI (“PREVI”), FUNDACAO DOS ECONOMIARIOS FEDERAIS — FUNCEF (“FUNCEF”) and FUNDACAO PETROBRAS DE SEGURIDADE SOCIAL — PETROS (“PETROS”), executed on April 25, 2008 and amended on January 25, 2011, also regulating rights and obligations as shareholders of the Company (the “General Shareholders Agreement”);

 

V.                                    On this date, prior meetings were held of the shareholders parties to the AG/LF/FATL Shareholders Agreement and of the General Shareholders Agreement, approving, by unanimous vote, the consummation of a transaction that will result in the merging of the activities and businesses of PORTUGAL TELECOM, SGPS S.A., a publicly held corporation, with head offices at Av. Fontes Pereira de Melo no. 40, in the city of Lisbon, Portugal, Legal Entity Registration No. 503 215 058 (“Portugal Telecom SGPS”) and Oi, into a single company, Telemar Participações (which shall be referred to as “CorpCo”), the shareholding base of which shall be held by the shareholders of Portugal Telecom SGPS, Telemar Participações and Oi, whose capital shall be divided into one class of common shares, which shall be traded on the BM&FBOVESPA SA — Stock, Commodities and Futures Exchange (“BM&FBovespa”), NYSE Euronext Lisbon and the NYSE, and, which, shall adhere to the rules of corporate governance of the Novo Mercado section of the BM&FBOVESPA (the “Transaction”);

 

VI.                               The consummation of the Transaction is conditioned upon certain steps contemplated in the prior meetings being implemented after the necessary authorizations are obtained, including corporate and regulatory approvals;

 

VII.                          The Shareholders mutually agree to make each one of the steps of the Transaction applicable to each other considering that each one of these steps plays a fundamental role and together are important in order for Telemar Participações to achieve the main objectives of the Transaction. The Transaction was structured in this manner since it is the only way to ensure (i) the merger of the activities of Oi with those of Portugal Telecom SGPS; (ii) the strengthening of the capital structure of the surviving company, with the increase of the capital in cash; (iii) the simplifying of Oi’s corporate chain and of its shareholding structure, with the extinction of the holdings that participate in the control; (iv) the transfer of all the tax benefits held by the holdings that participate, directly or indirectly, in the control of Oi, without any cost to the minority shareholders; (v) the diffusion of the shareholder base, with tremendous increase in share liquidity; (vi) the migration to the Novo Mercado segment of BM&FBovespa. All these acts will allow Oi and CorpCo to be in condition to fully attain their potential and ready to deal with

 

 

the enormous challenges faced in their industry, from technological, competition and investment standpoints;

 

VIII.                     The Transaction includes the following events: (i) a capital increase in Oi, by public subscription, with an offering of common and preferred shares, which shall be paid partly in cash and partly in assets represented by the contribution of equity interests owned by Portugal Telecom SGPS in companies that hold all of its operating assets, except for the ownership interest held directly or indirectly in Oi and Contax Participações S.A., and the liabilities of Portugal Telecom SGPS at the date of contribution (the “Capital Increase of Oi”), (ii) the merger of shares of Oi and the Company, which shall be referred to as “Corpco” with the conversion of Oi into a wholly owned subsidiary of Corpco (the “Merger of Oi Shares by Corpco”); and (iii) the merger of Portugal Telecom SGPS into Corpco, as a result of which Portugal Telecom SGPS will cease to exist (the “Merger of Portugal Telecom into Corpco”);

 

IX.                               The Transaction also includes a corporate restructuring in the chain of control of Oi (the “Restructuring of Telemar Participações”), encompassing different corporate steps as follows: (i) the merger of AG TELECOM into its controlling shareholder Pasa Participações S.A. (the “Merger of AG TELECOM into PASA”), as a result of which AG TELECOM will cease to exist; (ii) the merger of LF TEL into its controlling shareholder EDSP 75 Participações S.A. (“EDSP 75”) (the “Merger of LF TEL into EDSP 75”), as a result of which LF TEL will cease to exist; (iii) the merger of PASA into BRATEL BRASIL (the “Merger of PASA into BRATEL BRASIL”), as a result of which PASA will cease to exist; (iv) the merger of EDSP 75 into BRATEL BRASIL (the “Merger of EDSP 75 into BRATEL BRASIL”), as a result of which EDSP 75 will cease to exist; (v) the partial split-up of the Company, covering the investment in Oi proportional to the equity holdings of BRATEL BRASIL in the Company, with the spun off assets being absorbed by BRATEL BRASIL (the “Partial Split-Up of TELEMAR PARTICIPAÇÕES”); (vi) the partial split- up of BRATEL BRASIL with the transfer of its remaining ownership interest in the Company to Marnaz Holdings S.A. (the “Partial Split-Up of BRATEL BRASIL”); (vii) the merger of BRATEL BRASIL into Oi (the “Merger of BRATEL BRASIL into Oi”), as a result of which BRATEL BRASIL will cease to exist; (viii) the merger of Venus RJ Participações S.A. into Telemar Participações (the “Merger of VENUS into Telemar Participações”), as a result of which Venus RJ Participações S.A. will cease to exist; (ix) the merger of Sayed RJ Participações S.A. into Telemar Participações (the “Merger of SAYED into Telemar Participações”), as a result of which Sayed will cease to exist(x) the merger of PTB2 S.A. into Telemar Participações (the “Merger of PTB2”), as a result of which PTB2 S.A. will cease to exist; and (xi) merger of Marnaz Holdings S.A. into the Telemar Participações (the “Merger of Marnaz”), as a result of which Marnaz Holdings S.A. will cease to exist;

 

 

X.                                    The implementation of the Restructuring of Telemar Participações is conditioned upon the Capital Increase of Oi being effected, observing the conditions approved in the prior meetings, the settlement of the entire indebtedness of AG TELECOM, LF TEL and the Company, the Merger of Oi Shares by CorpCo and other conditions precedent that shall be established in the respective agreements to be executed for each one of said transactions;

 

XI.                               The Shareholders wish to amend the AG/LF/FATL Shareholders Agreement so as to include special provisions related to the Transaction;

 

XII.                          Further, on the date hereof, parties will execute amendments to the General Shareholders Agreement, executed on April 25, 2008 and subsequently amended on January 25, 2011, the PASA Shareholders Agreement, dated January 25, 2011, and the EDSP75 Shareholders Agreement executed on January 25, 2011 (hereinafter referred to as the “Amendments to the Shareholders Agreements”), containing provisions similar to those herein established.

 

THE PARTIES have agreed to enter into this 2nd Amendment to the Shareholders Agreement of Telemar Participações S.A. dated April 25, 2008 and amended on January 25, 2011 (“the 2nd Amendment”), which shall be governed by the following terms and conditions:

 

CLAUSE ONE — INCLUSION OF CLAUSE XVII

 

1.1.                            The Parties resolve to include Clause XVII in the AG/LF/FATL Shareholders Agreement, establishing special provisions related to the Transaction, worded as follows:

 

“CLAUSE XVII

 

SPECIAL PROVISIONS RELATED TO THE TRANSACTION OF MERGING THE ACTIVITES OF OI AND OF PORTUGAL TELECOM SGPS

 

17.1 The Shareholders undertake the firm, irrevocable and irreversible commitment of exercising their respective voting rights in the Company, as well as having their representatives in the Board of Directors of the Company and of the Relevant Subsidiaries, that will be considered a Relevant Controlled Company for all purposes of this General Shareholders Agreement, irrespective of the ownership percentage that the Company has in the capital stock of Oi, exercise their respective voting rights, so as to approve the Transaction that will unify the activities and businesses carried out by Oi and by Portugal Telecom SGPS, particularly in Brazil, Portugal and Africa, in the exact terms set for the Previous Meeting and the Preliminary General Meeting held on this date February 19, 2014.