AGREEMENT FOR PURCHASE OF SHARES



 




EXHIBIT 10.9




STOCK PURCHASE AGREEMENT



This private agreement is entered into by and between the below identified
parties:



(a) BID S.A., a corporation with head-office at Av. Brasil, 331, Sala 03,
Bairro Terra Vermelha, in the City of Sorocaba, State of São Paulo, registered
with the CNPJ under number 02.573.260/0001-81, herein represented by its
Vice-President Director, Marco Antonio Beldi, Brazilian, married, engineer,
holder of Identification Card RG no 4.169.338 – SSP/SP, and registered with the
CPF/MF under number 794.694.698-87, domiciled in the City of Sorocaba, State of
São Paulo, with offices at Av. Juscelino Kubitschek de Oliveira, 154, Bairro
Lageado, in the City of Votorantim, State of São Paulo (hereinafter “BID”); and
SPLICE DO BRASIL TELECOMUNICAÇÕES E ELETRÔNICA S.A., a corporation with
head-office at Av. Juscelino Kubitschek de Oliveira, 154, Bairro Lageado, in
the City of Votorantim, State of São Paulo, registered with the CNPJ under
number 45.397.007/0001-27, herein represented by its Vice-President Director,
Marco Antonio Beldi, as above identified, (hereinafter referred to as “SPLICE”
and, together with BID, the “Sellers”); and



(b) TELESP CELULAR PARTICIPAÇÕES S.A., a corporation with head-office at Rua
Abílio Soares, 409, in the City of São Paulo, State of São Paulo, registered
with the CNPJ under number 02.319.126/0001-59, herein represented by its
Directors Francisco José Azevedo Padinha, Portuguese, married, engineer, holder
of alien’s identification card RNE V-248636-O, registered with the CPF/MF under
number 055.063.577-70, domiciled at Rua Abílio Soares, 409, Paraíso, São Paulo,
Capital, and Gilson Rondinelli Filho, Brazilian, married, engineer, holder of
Identification Card RG no 4.347.710 SSP/SP, registered with the CPF under
number 439.603.328-15, domiciled at Rua Abílio Soares, 409, Paraíso, São
Paulo, Capital (hereinafter the “Purchaser”),



and, further, as Intervening Parties,



(c) BRASILCEL N.V., a company organized and existing under the laws of the
Netherlands, with head-office at Strawinskyiaa 3105, Amsterdam, Netherlands,
herein represented by its attorneys-in-fact Francisco José de Azevedo Padinha,
as above identified, and Fernando Abella Garcia, Spanish, single, economist,
holder of alien’s identification card RNE V275827-Q MJ-DPF/DELEMAF/SR/RJ,
registered with the CPF under number 055.017.227-04, with offices at Praia de
Botafogo, 501, 7o andar, Torre Corcovado — Botafogo, Rio de Janeiro, RJ
(hereinafter “Brasilcel”);



(d) CABO PAULISTA S.A., a corporation with head-office at Rua Santa Clara, 49,
2o andar, Sala 02, Centro, in the City of Sorocaba, State of São Paulo,
registered with the



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CNPJ under number 02.792.099/0001-37, herein represented by its Vice-President
Director, Antonio Roberto Beldi, Brazilian, married, engineer, holder of
identification card no 4.169.337 SSP-SP and registered with the CPF/MF under
number 618.760.038-04, domiciled in the City of Sorocaba, State of São Paulo,
with offices at Av. Juscelino Kubitschek de Oliveira, 154, Bairro Lageado, in
the City of Votorantim, State of São Paulo (hereinafter “CP”); and



(e) FIXCEL S.A., a corporation with head-office at Rua Santa Clara, 49, 2o
andar, Sala 03, Centro, in the City of Sorocaba, State of São Paulo, registered
with the CNPJ under number 02.792.099/0001-37, herein represented by its
Vice-President Director, Antonio Roberto Beldi, as above identified,
(hereinafter referred to as “Fixcel”).



WHEREAS Sellers (i) are the direct controlling shareholders of Tele Centro
Oeste Celular Participações S.A., a corporation with head-office at Setor
Comercial Sul, Quadra 02, Bloco C, no226, Edifício Telebrasília Celular, 7o
andar, CEP 70302-916, in Brasília, Federal District, registered with the CNPJ
under number 02.558.132/0001-69, a cellular mobile service provider, in the
Federal District, in service area 7 of NGT 20/96, within “A” frequency sub-band
(“TCOPar”); (ii) shall be, as of the Closing Date, except as provided for in
Section 2.8 hereof, the lawful owners of seventy-seven billion, two hundred and
fifty-six million, four hundred and ten thousand, three hundred and ninety-six
(77,256,410,396) common shares, representing sixty-one point ten per cent
(61.10%) of the voting capital and twenty point thirty-seven per cent (20.37%)
of the total capital of TCOPar (all the 77,256,410,396 common shares that will
be directly held by Sellers in TCOPar as of the Closing Date, hereinafter
simply referred to as the “Controlling Shares”); and, further (iii) are,
indirectly, the controlling shareholders of the companies controlled by TCOPar
as indicated in Section 1.2 below (“TCO’s Controlled Companies” which, together
with TCOPar, shall be hereinafter simply referred to as “TCO”); and



WHEREAS Fixcel and Brasilcel, the latter to Purchaser’s benefit and best
interest, on January 15, 2003 executed the Preliminary Stock Purchase Agreement
(the “Preliminary Agreement”), whereby said parties agreed to the conditions
for the acquisition, by Purchaser, of the Controlling Shares held by Seller
(the “Purchase”), having agreed, however, to execute a final agreement
providing for supplementary terms and conditions, in order to detail certain
procedures and to add specific terms pertaining to the Purchase.



The parties hereby irrevocably and irreversibly agree to enter into this Stock
Purchase Agreement (the “Final Agreement”), in order to set forth and confirm
the final terms and conditions for the performance of the Purchase, which shall
be contingent upon the verification of the conditions precedent provided for in
Section 6 of this Final Agreement. Upon verification of the compliance with the
conditions precedent referred to herein, the parties shall proceed to the
Closing, as set forth in Sections 2.1(a) and 2.6 below.




I. Purpose.





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1.1. The purpose of this Final Agreement is the purchase and sale, on an
irrevocable and irreversible basis, by Sellers to Purchaser on the Closing
Date, of the Controlling Shares, being seventy-seven billion, two hundred and
fifty-six million, four hundred and ten thousand, three hundred and ninety-six
(77,256,410,396) common shares, representing sixty-one point ten per cent
(61.10%) of the voting capital and twenty point thirty-seven per cent (20.37%)
of the total capital of TCOPar, without computing treasury shares in the amount
of five billion, seven hundred and ninety-one million, three hundred and
ninety-three thousand, eight hundred and eighty-six (5,791,393,886) common
shares, free and clear of any encumbrances, claims, debts or liens, whether
real or personal, legal or conventional, judicial or extrajudicial, except as
provided for in Annex 8.1.2 and with due regard to the provisions of Sections
1.2 and 2.8 below. Accordingly, with due regard to the terms and conditions
provided for in this Final Agreement, upon the Closing (as defined in Section
2.1(a) below), Sellers shall transfer to Purchaser, which is hereby undertaken
to purchase them, the Controlling Shares.



1.2 The Purchase of the Controlling Shares comprises the indirect purchase, by
Purchaser, of the following corporate interests held by TCOPar in TCO’s
Controlled Companies, as of this date, free and clear of any encumbrances,
claims, debts or liens, whether real or personal, legal or conventional,
judicial or extrajudicial:




	 	(a)	 	a total of, at least, six million, four hundred and
twenty-three thousand, one hundred and eight (6,423,108) shares
representing ninety-seven point zero seven per cent (97.07%) of the
total capital of Telegoiás Celular S.A. (“Telegoiás Celular”), of
which two million, two hundred and eighty thousand, nine hundred and
three (2,280,903) are common shares, representing ninety-eight point
fifty-nine per cent (98.59%) of the voting capital, and four
million, one hundred and forty-two thousand, two hundred and five
(4,142,205) preferred shares, representing ninety-six point
twenty-five per cent (96.25%) of the non-voting capital, of the
referred cellular mobile service provider, in “A” frequency
sub-band, in the State of Goiás, within area 7, as defined in NGT
20/96;






	 	(b)	 	a total of, at least, six hundred and seventy-four thousand,
six hundred and fifty-one (674,651) shares representing ninety-seven
point eighty-one per cent (97.81%) of the total capital of Telemat
Celular S.A. (“Telemat Celular”), of which three hundred and
twenty-nine thousand, six hundred and ninety-eight (329,698) are
common shares, representing ninety-nine point fifty-one per cent
(99.51%) of the voting capital, and three hundred and forty-four
thousand, nine hundred and fifty-three (344,953) preferred shares,
representing ninety-six point twenty-five per cent (96.25%) of the
non-voting capital, of the referred cellular mobile service
provider, in “A” frequency sub-band, in the State of Mato Grosso,
within area 7, as defined in NGT 20/96;






	 	(c)	 	a total of, at least, one million, one hundred and ninety-two
thousand, six hundred and fifty-six (1,192,656) shares representing
ninety-eight point







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	 		 	fifty-three per cent (98.53%) of the total capital of Telems
Celular S.A. (“Telems Celular”), of which five hundred and
forty-two thousand, six hundred and thirty-nine (542,639) are
common shares, representing ninety-nine point sixty-three per
cent (99.63%) of the voting capital, and six hundred and fifty
thousand, and seventeen (650,017) preferred shares, representing
ninety-seven point sixty-two per cent (97.62%) of the non-voting
capital, of the referred cellular mobile service provider, in
“A” frequency sub-band, in the State of Mato Grosso do Sul,
within area 7, as defined in NGT 20/96;






	 	(d)	 	a total of, at least, six hundred and eighty-five thousand,
two hundred and twenty-three (685,223) shares representing
ninety-seven point twenty-two per cent (97.22%) of the total capital
of Teleron Celular S.A. (“Teleron Celular”), of which two hundred
and forty-six thousand, six hundred and fifty-two (246,652) are
common shares, representing ninety-eight point twenty-five per cent
(98.29%) of the voting capital, and four hundred and thirty-eight
thousand, five hundred and seventy-one (438,571) preferred shares,
representing ninety-six point sixty-four per cent (96.64%) of the
non-voting capital, of the referred cellular mobile service
provider, in “A” frequency sub-band, in the State of Rondônia,
within area 7, as defined in NGT 20/96;






	 	(e)	 	a total of, at least, one million, eight hundred and ninety
thousand, nine hundred and fifty-six (1,890,956) shares representing
ninety-eight point thirty-five per cent (98.35%) of the total
capital of Teleacre Celular S.A. (“Teleacre Celular”), of which nine
hundred and ninety-nine thousand, three hundred and fifty (999,350)
are common shares, representing ninety-nine point ninety-six per
cent (99.96%) of the voting capital, and eight hundred and
ninety-one thousand, six hundred and six (891,606) preferred shares,
representing ninety-six point sixty-one per cent (96.61%) of the
non-voting capital, of the referred cellular mobile service
provider, in “A” frequency sub-band, in the State of Acre, within
area 7, as defined in NGT 20/96;






	 	(f)	 	a total of, at least, seventy million, eight hundred
thousand, six hundred and thirty-nine (70,800,639) shares
representing ninety-eight point thirty-three per cent (98.33%) of
the total capital of Norte Brasil Telecom S.A. (“NBT”), of which
twenty-two million, eight hundred thousand, nine hundred and
forty-seven (22,800,947) are common shares, representing ninety-four
point ninety-nine per cent (94.99%) of the voting capital, and
forty-seven million, nine hundred and ninety-nine thousand, six
hundred and ninety-two (47,999,692) preferred shares, representing
one hundred per cent (100%) of the non-voting capital, of the
referred company authorized to provide cellular mobile service, in
“B” frequency sub-band, in the States of Amazonas, Roraima, Amapá,
Pará and Maranhão, within area 8, as defined in NGT 20/96; and







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	 	(g)	 	a total of, at least, nine hundred and ninety-nine million,
nine hundred and ninety-six (999,996) shares representing
ninety-nine point ninety-nine per cent (99.99%) of the total capital
of TCO IP S.A. (“TCO IP”), of which four hundred and ninety-nine
thousand, nine hundred and ninety-six (499,996) are common shares,
representing ninety-nine point ninety-nine per cent (99.99%) of the
voting capital, and five hundred thousand (500,000) preferred
shares, representing one hundred per cent (100%) of the non-voting
capital, of the referred company that provides internet mobile
access services.





1.2.1 The corporate interests in TCO’s Controlled Companies may be increased by
reason of purchases to be made by TCO in compliance with the provisions of art.
20 of CVM Instruction no 229/95, and art. 10, §2 of CVM Instruction 36102,
without such increase in the corporate interests held by TCOPar in TCO’s
Controlled Companies giving rise to any change in the purchase Price of the
Controlling Shares.



1.3. Any and all legal obligations pertaining to the ownership of the
Controlling Shares, in connection with acts or facts occurred before the
Closing, including with respect to liabilities before government agencies or
third parties arising out of the title to the Controlling Shares, are Sellers’
and/or their controlling shareholders’ exclusive obligations, which parties
have expressly undertaken them, on an unrestricted, irrevocable and
irreversible manner, at the time of the execution of the Preliminary Agreement,
and which obligations shall so remain even after the Closing.



II. Closing and Price.




2.1 Price:




     (a) The price for the Controlling Shares is one billion, four hundred and
eight million reais (R$ 1,408,000,000.00), as of base date January 15, 2003 and
solely subject to those adjustments and reduction as provided for in Sections
2.2 and 2.8 of this Final Agreement (the “Price”), to be paid, as from the
closing of the Purchase, as set forth below, and against the transfer of the
Controlling Shares to the Purchaser (the “Closing”), which will occur on the
fifth business day after the fulfillment and verification of all the Conditions
Precedent to the Closing, as set forth in Section VI below (“Closing Date”).




     (b) The Price was agreed to with basis, among other parameters and
criteria, on the unaudited consolidated financial statements of TCOPar as of
September 30, 2002 (attached hereto as Annex 2.1.(b) of this Final Agreement),
being subject to adjustments arising out of Actual Obligations (as defined in
Section 2.2) as may be identified in the Audit of the audited financial
statements of TCOPar as of December 31, 2002, pursuant to the terms and
procedures provided for in same Section 2.2., which Audit shall be carried out
pursuant to Section III below.





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2.2 Price Adjustment: The Price may be adjusted as a result of actual, liquid
and certain (“liquida e certa”) obligations and assets shortfall, of TCO, not
duly reflected in the TCOPar’s audited financial statements as of December 31,
2002 (attached hereto as Annex 2.2 of this Final Agreement) and those which,
although reflected in such financial statements, were not reflected in the
financial statements as of September 30, 2002, except for obligations having
been incurred in the regular course of business since September 30, 2002 until
December 31, 2002, assets shortfall meaning the existence of assets reflected
in the referred financial statements that did not exist on the referred dates
(together, the “Actual Obligations”), which Actual Obligations shall be
computed, for the purposes of the adjustment herein provided for, at twenty
point thirty-seven per cent (20.37%) of their full value. The Actual
Obligations which will be taken into consideration for the Price adjustment
shall be those which may be identified by Purchaser’s legal, financial and
accounting consultants (“Auditors”) in the course of the Audit provided for in
Section III. For the sake of clarity, it has been agreed that divergences as
for the adoption of accounting criteria, including, however being not limited
to, those applicable to recording of permanent assets and values thereof for
accounting purposes, booking of assets and liabilities provisions, amortization
and depreciation parameters, inventory valuation and other similar issues shall
not be taken into consideration for purposes of identifying Actual Obligations.
After the completion of the procedures described in Section 3.2.2 below and in
any case not later than April 15, 2003, the Company’s Auditors shall present
their conclusions and recommendations of adjustments by reason of having
identified Actual Obligations, and Sellers shall be requested by Purchaser to
voice its agreement or dissent in relation to the recommended adjustment(s).
Should the Company’s Auditors’ conclusions and recommendations not be received
by Sellers until April 15, 2003, the Price shall no longer be subject to any
adjustments whatsoever as a result of the Actual Obligations, as provided for
in Section 2.2, and the condition precedent set forth in letter (f) of Section
6.1 of this Final Agreement will be deemed as verified, for all purposes and
effects. The Company’s Auditors and the Sellers’ Auditors shall reach an
agreement within not more than ten (10) days counted as from the receipt by
Sellers of the referred conclusions and recommendations, as for the proposed
Price adjustment(s) and, should any divergence remain in an amount exceeding
five million reais (R$ 5,000,000.00), for the aggregate amount of divergences
in relation to all the identified Actual Obligations, either party may, within
the following five (5) days, on its own name and on the other party’s behalf,
for which it will be since now expressly authorized and vested in the necessary
powers for such purpose, retain the Third Auditor (as below defined), who, if
deemed necessary, shall sub-contract consultants, lawyers or other independent
specialists in order to provide support to his works and conclusions, in order
to finally settle the dispute, within not more than fifteen (15) days from his
appointment, and his decision shall be binding upon the parties, which shall
forthwith adjust the Price. In case the divergences between the Company’s
Auditors and the Sellers’ Auditors as for the amount of the Actual Obligations,
which in the aggregate represent an amount equal to or less than five million
reais (R$ 5,000,000.00), the adjustment to the Price shall be made an amount
equal to the adjustment amount proposed by the Purchaser’s Auditors, after
deduction of an amount equal to 50% of the difference between the adjustm
ents
proposed by the Auditors of both parties. Should the Price be adjusted as a
result of the provisions of this Section 2.2, the reduction shall be applied to
the Price installments referred to in Sections 2.3(a) and 2.3(c) below, at the
rate



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of sixty-eight per cent (68%) and thirty-two per cent (32%), respectively. The
Auditors’ fees for each party shall be borne by the party having retained them.
The Third Auditor shall appoint in his written opinion which party shall be
liable for the payment of his professional fees, taking for basis that such
fees shall be borne by the party whose Auditors requested a Price adjustment
more distant from the adjustment actually decided by the Third Auditor. For the
purposes hereof, the divergences between the Auditors of each party shall be
settled by the independent audit firm selected in common agreement by Sellers
and by Purchaser, provided that, in the absence of such an agreement, the
referred audit firm shall be selected by agreement between the Purchaser’s
Auditors and the Sellers’ Auditors and, in case the latter shall equally not
reach an agreement, the audit firm shall be Trevisan – Auditores Independentes
(the “Third Auditor”). The parties shall cooperate with the Third Auditor,
providing it with all documents, information and explanations as may be
necessary or convenient, in such a manner as to allow the completion of the
works within the period set forth herein, which period may not be extended in
any circumstance whatsoever.




2.3 Price Payment:




     Once the above mentioned adjustment has been made, the Price shall be paid
as follows:




     (a) the amount of two hundred and thirty-eight million reais
(R$238,000,000.00), added by the respective income corresponding to the daily
average variation of the certificates of interfinancial deposits – CDI,
obtained on a basis of 252 business days (“CDI”) plus two per cent (2%) per
year calculated since January 15, 2003 until its actual payment, shall be paid
to Sellers in immediately available funds as of the Closing Date;




     (b) the amount of fifty million reais (R$50,000,000.00), added by the
respective income corresponding to the variation of the CDI plus two per cent
(2%) per year since January 15, 2003 until and including the Closing Date, and
as from the Closing Date until the date of its actual payment, of the income
corresponding to the average daily variation of the CDI plus one per cent (1%)
per year, shall be mandatorily withheld and kept as Guaranty, as provided for
in Section 4.4 below, and shall be paid within twenty-four (24) months counted
from the Closing Date, with due regard to the Guaranty release rules also
provided for in the referred Section 4.4;




     (c) the amount of seventy-five million reais (R$75,000,000.00), added by
the respective income corresponding to the variation of the CDI plus two per
cent (2%) per year since January 15, 2003 until its actual payment, shall be
paid to Sellers within twelve (12) months counted from the Closing Date;




     (d) the amount of one billion, forty-five million reais
(R$1,045,000,000.00), as of base date January 15, 2003, shall be paid in
domestic currency, in installments, in those amounts, conditions and payment
terms as provided for in Annex 2.3(d) of this Final Agreement, as amended,
added by interests, monetary correction, exchange variation and other
applicable charges until the date of each payment scheduled in the same Annex





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2.3(d), provided that time and income of such Price installments may be
changed by an amendment to Annex 2.3(d), in accordance with the provisions of
Section 5.6 and 5.8 of this Final Agreement. Purchaser and Brasilcel shall be
jointly and severally liable before Sellers, each of them in the capacity of
main obligor, for the Price installments provided for in Annex 2.3(d) the
charges in connection therewith are or may be bound to exchange variation.



2.3.1 The principal amount of the Price installments provided for in letters
(b) and (c) of Section 2.3, added by the respective income owed until the
issuance date of each promissory note herein set forth, shall be represented by
promissory notes issued by Purchaser, in the form of Annex 2.3.1 of this Final
Agreement, one promissory note representing the Price installment provided for
in the referred letter (c) being delivered to Sellers upon Closing, and one or
more promissory notes representing the Price installment provided for in letter
(b) being delivered to Sellers as long as the respective release of the
Guaranty shall occur before the respective maturity date, under the terms and
conditions set forth in Section 4.4 below.



2.4 Default. Should Purchaser fail to pay any of the Price installments
provided for in Sections 2.3(a), 2.3(b) and 2.3(c) on their respective maturity
dates, the amount due and unpaid shall be added by a default fine corresponding
to (i) two per cent (2%) if the delay shall last for more than five (5) and
less than thirty (30) days, or (ii) twenty per cent (20%) if the delay shall be
of thirty (30) days or more, without prejudice to Sellers’ right to immediately
demand the performance of the obligation and, also, by interests assessed under
the terms of the same above mentioned Sections, which shall accrue until the
date such payment is fully effected. Should the payments of the Price
installments provided for in Section 2.3(d) not be timely performed and the
delay be directly ascribable to Seller, Seller shall bear all the burden,
charges, penalties and costs arising out of the default, by Sellers and/or
their controlled companies, in the corresponding Sellers’ Financial Obligation
(as defined in Sections 5.6 and 5.8).



2.5 Repayment of Actual Obligations. The parties agree that Sellers shall be
repaid, in proportion to the Controlling Shares disposed of by them, for
amounts corresponding to Actual Obligations having been computed for purposes
of Price adjustment as set forth in Section 2.2 above and which, within
twenty-four (24) months after the Closing, shall prove to have been undue. The
amounts referred to herein shall be repayable by Purchaser after a maximum
period of five (5) days counted from the date on which TCO shall be finally
released from the obligation or shall receive the asset which is the subject
matter of the Actual Obligation unduly computed in the Price adjustment.
Purchaser’s failure to pay the amounts owed to Sellers hereunder shall subject
it to the same penalties arising out of default in the payment of the purchase
Price, as set forth in Section 2.4 above. The progress in connection with
realization of credits or termination of obligations generating to the Sellers
the right to repayment as provided for herein shall be informed to Sellers
together with the information required under the terms of Section 4.6 below.





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2.6 Closing. The Closing shall take place at the offices of Goldman, Sachs &
Co., in São Paulo, SP, at 10:00 a.m. on the fifth business day counted from the
date all the conditions precedent to the Closing, as provided for in Section VI
of this Final Agreement, shall have been complied with (or their compliance
shall have been waived). Upon the Closing:




	 	(a)	 	Sellers shall, or shall cause TCO to:






	 	(i)	 	execute the instruments of transfer and other
documents necessary for the registering, with the trustee in
charge for the accounting of TCOPar’s shares, in its books
and records, of the transfer of the Controlling Shares to
Purchaser’s name on the Closing Date, including instructions
for cancellation of the blockade of the Controlling Shares
being disposed of, as provided for in Section 6.5 below;






	 	(ii)	 	deliver the following documents to Purchaser:






- letters of resignation of the members of the TCOPar’s Board
of Directors, pursuant to form attached to this Final Agreement
as Annex 2.6(a)(I) or Annex 2.6(a)(II), a the case may be;




- a certificate in which it shall declare that all the
precedent conditions – provided for in Section 6.2 – to the
Closing have been complied with or waived;




- a certificate confirming that the conducts referred to in
section 5.3 have been fulfilled and complied with by Sellers
and by TCO;




- a release receipt for the payment, by Purchaser, on the
Closing Date, of the amounts specified in Section (b) below;




- Annexes 2.3(d) and 5.6, adjusted in accordance with the
provisions of Sections 5.6 and 5.8 of this Final Agreement;




- a statement issued by the financial institution in charge for
bookkeeping TCO’s shares, based on the shareholding position as
at not more than five (5) business days before the Closing
Date, evidencing the amount of Controlling Shares actually held
by Sellers on the Closing Date, as well as a declaration
executed by Sellers that they are the title holders of such
Controlling Shares on the Closing Date; and




- a copy of the instruments of termination and release of the
agreements mentioned in item (v) below.





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(iii) make available all TCO’s corporate, tax and accounting
books, and the delivery of such books shall be made, as the case
may be, at the head-office of TCOPar and of each of the respective
TCO’s Controlled Companies;




(iv) cause the General Shareholders Meetings and Board of
Directors Meetings provided for in Section 5.10 below to be held,
on the Closing Date, provided that should there be no time
available for the holding of the referred General Shareholders
Meetings and Board of Directors Meetings provided for in Section
5.10 below, Sellers shall deliver duly signed and attested minutes
of the TCOPar’s and TCO’s Controlled Companies’ Board of Directors
and/or Board of Executive Officers, which minutes shall expressly
declare the revocation of the existing powers of attorney and the
granting of new powers of attorney under terms previously
specified by Purchaser.




(v) cause the Management Agreements and/or the technical and/or
administrative support agreements executed between TCO and its
direct or indirect controlling shareholders to be terminated, with
due regard to the provisions of Section 5.11 of this Final
Agreement.




(vi) enter with Purchaser into the agreement for assignment of
rights and obligations provided for in Section 5.1 of this Final
Agreement;




	 	(b)	 	Purchaser shall:






(i) deposit in the current account(s) previously communicated to
it by Sellers the amount of two hundred and thirty-eight million
reais (R$238,000,000.00), added by the respective income referred
to in Section 2.3(a), after deduction, if the case may be, of the
amount of the adjustments to which such Price installment may be
subject under the terms of Section 2.2 above and/or after the
reduction provided for in Section 2.8 below;




(ii) execute the instruments of transfer and other documents
necessary for the registering, with the trustee in charge for the
accounting of TCOPar’s shares, in its books and records, of the
transfer of the Controlling Shares to Purchaser’s name on the
Closing Date, including instructions for the cancellation of the
restriction on trading of the Controlling Shares being disposed
of, as provided for in Section 6.5 below;




(iii) enter with Seller Bid (or its successor) into the agreement
for assignment of rights and obligations provided for in Section
5.1 of this Final Agreement and shall comply with all the
obligations therein undertaken;




(iv) deliver to Sellers the following documents:





10








 



- a certificate in which it declares that all the precedent
conditions, as provided for in Section 6.1, to the Closing have
been complied with or waived;




- the promissory note representing the Price installment
provided for in Section 2.3(c) of this Agreement;




- the Personal Guaranties referred to in Section 5.8, issued as
provided for in Annex 5.6 (amended pursuant to Section 5.6), in
effect as of the Closing Date.



2.7 Payments. With due regard to the provisions of Section 5.8, all the
payments owed to Sellers shall be effected through deposit to the current
account(s) indicated pursuant to Section 2.6(b)(i) above, except if Sellers, at
least five (5) business days before the maturity date of any Price installment,
shall indicate other account(s) for deposit or, at their discretion, shall
request the payment to be made by one or more cashier checks.



2.8 Price Reduction. If, upon Closing, Sellers do not hold all the Controlling
Shares and, therefore, shall fail to deliver any part thereof to Purchaser, the
Price shall be reduced by the amount corresponding to the Price per Controlling
Share not delivered, which reduction shall be applied to the Price
installments, as follows: (i) in case the Controlling Shares not being disposed
of are bound to a Sellers’ Financial Obligation described in Annex 5.6, the
Price reduction herein set forth shall be firstly allocated to the installment
provided for in Section 2.3(d) above, with the exclusion of such Seller’s
Financial Obligation from Annex 2.3(d) and, consequently, from Annex 5.6; and
(ii) should there be any balance after the reduction, the same shall be applied
to the Price installments referred to in Sections 2.3(a) and 2.3(c) above, at
the rate of sixty-eight per cent (68%) and thirty-two per cent (32%),
respectively, without any additional indemnity being due, provided that, in any
event, the Controlling Shares delivered upon the Closing shall represent at
least fifty-one per cent (51%) of TCOPar’s voting capital. In the event
provided for herein, the twenty point thirty-seven per cent (20.37%) referred
to in Section 2.2 shall be adjusted to reflect the percentile represented by
the Controlling Shares having been actually disposed of.



III. Audit and Contingencies.



3.1 As provided for in the Preliminary Agreement, on January 27, 2003 Purchaser
started an accounting, financial, legal, tax and operating audit in TCO and its
controlled companies, as well as in all the documents and other elements
related to Sellers’ Financial Obligations (the “Audit”). Said Audit shall be
carried out in accordance with the usual market practices, Seller being
required to make available to Purchaser, within a reasonable time, any and all
documents reasonably requested by Purchaser for such purpose.





11








 



     With due regard to the procedures provided for in Section 3.2.2 below,
by the end of the Audit,




     (a) the Actual Obligations (as defined in Section 2.2 above) shall cause
adjustments to be made to the Price in accordance with the provisions of the
referred Section 2.2, and




     (b) the contingent obligations, the undisclosed liabilities and the assets
shortfall or differences ascertained in the Audit which have not given rise to
the Price adjustment under the terms of Section 2.2 and which are defined as
Contingencies in Section 4.2 below, shall be the subject matter of the
Guaranty, as defined in Section 4.4 below and within the limits provided for
therein.



3.2 For the purposes of this Section 3.2 and of Section IV below, the
Contingencies shall be ranked as “probable”, “possible” and “remote”, in
accordance with their probability of occurrence, and shall be valued at the
rate of (i) one hundred per cent (100%) of their estimated loss value for those
considered to be probable; (ii) fifty per cent (50%) of their estimated loss
value for those considered as possible; and (iii) zero per cent (0%) for those
considered as remote. In case, during the course of the Audit, Contingencies
may be detected, in an amount ascertained in accordance with the referred
ranking parameters, exceeding, either individually or in their aggregate
amount, forty per cent (40%) of TCOPar’s total net worth as of December 31,
2002, based on the audited financial statements as of that date (copies of
which are included in Annex 2.2 of this Final Agreement), Purchaser shall be
entitled either to choose to go ahead with the Purchase, being guaranteed under
the terms and with due regard to the limits of this Section III and of Section
IV, or to terminate the Purchase, with consequent termination of this Final
Agreement and not having, in this case, any obligation whatsoever in connection
with the Purchase, including as far as it concerns the purchase of the
Controlling Shares or any eventual indemnity by one party to the other. For the
purposes of this Section 3.2, if Purchaser shall find out Contingencies the
value of which shall exceed the referred percentile of TCOPar’s consolidated
net worth and shall wish to exercise its option to terminate the Purchaser, it
shall notify Sellers of this fact within the time provided for in Section 3.2.2
and pursuant to Section 13.1 below, indicating the estimated amount and the
ranking of each Contingency thus found out, with the respective reasons
therefor (the “Notice of Termination”). Upon receipt of a Notice of Termination
from Purchaser, Sellers, within the following ten (10) days, shall be also
entitled, by notice to Purchaser (i) to abide by the Notice of Termination, in
which event this Final Agreement and all other agreements related hereto shall
be terminated by operation of law, without this implying Sellers’ agreement to
the Contingencies informed by Purchaser in its notice; or (ii) to disagree as
to the amount and/or ranking of the Contingency (ies) found out by Purchaser,
in which event the parties and their respective Auditors, within ten (10) days
counted from the receipt by Sellers of the Notice of Termination, shall make
their best efforts to reach an agreement as to the amount in question and the
ranking of each Contingency. Sellers’ failure to answer to the mentioned notice
within the time provided for above shall mean its agreement with the
termination under this Final Agreement. Should Sellers declare their
non-agreement and the parties shall be unable to reach an agreement within the
mentioned term of ten (10) days,



12








 




they shall retain the Third Auditor (as defined in Section 2.2), who shall be
entitled to sub-contract consultants, lawyers or other independent specialists
to provide support to his works and conclusions, in order to finally settle the
dispute, within not more than fifteen (15) days after his appointment, and his
decision shall be binding upon the parties, and shall be adopted for the
purposes of this Section. The parties shall cooperate with the Third Auditor by
providing him with all the documents, information and explanations as may be
necessary or convenient, in such a manner as to allow the completion of the
works within the time provided for herein. Neither party shall be undertaken to
indemnify the other party in case this Final Agreement shall be terminated as
provided for herein.



3.2.1 Each party shall be responsible for the cost incurred with its Auditors
in the review and discussion of the Contingencies for the purposes of this
Section. If, based on the Third Auditor’s decision, Contingencies are found out
in amounts exceeding, either individually or in their aggregate amount, forty
per cent (40%) of TCOPar’s total net worth as of December 31, 2002, based on
the duly audited financial statements as of such date, the Third Auditor’s
costs shall be fully borne by Sellers; on the contrary, such costs will be
borne by Purchaser.



3.2.2 Annex 3.2.2 contains a list of documents and information (“Documents
and/or Information”) necessary for ascertaining Contingencies and Actual
Obligations for the purposes of this Section 3.2 and of Section 2.2 above,
respectively, which shall be complied with within the shortest possible time by
Sellers, however, not later than ten (10) days counted as from this date.
Purchaser, if wishing to exercise its right to terminate this Agreement under
the terms of this Section 3.2, shall send the Notice of Termination to Sellers
no later than five (5) business days after the expiration of five (5) business
days counted from the delivery by Sellers of the last Document and/or
Information requested by Purchaser. Purchaser shall forfeit the referred right
if it shall fail to exercise the same within the time set forth herein or if
its Audit report is not delivered to Sellers by April 15, 2003, whichever
occurs firstly.



3.3 The schedule provided for in Section 3.2 above for request and delivery of
Documents and/or Information shall not impair Purchaser’s right to continue
with its Audit until the Closing Date, in relation to all other aspects it may
deem to be convenient or necessary. However, as from such date, when and if the
case may be, requests of information for the purposes of Section 3.2 (and of
additional or related explanations) shall expressly contain a statement that
the request refers to Documents and/or Information for the purposes of Section
3.2.




IV. Contingencies; Sellers’ and Purchaser’s Responsibilities.



4.1 Sellers, Fixcel and CP are fully, unlimitedly, jointly and severally
responsible: (i) for the valid disposal of the Controlling Shares, (ii) for the
absence of liens or encumbrances over them, except for the guaranties described
in Annex 8.1.2 of this Final Agreement in connection with Sellers’ Financial
Obligations (provided that the guaranteed amounts may exceed the amounts of
Sellers’ Financial Obligations as indicated in the



13








 




referred Annex 8.1.2), and (iii) for representations and Guaranties
intentionally made in an incorrect manner or purposefully omitted, in Section
IX of the Preliminary Agreement (with due regard to the amendments to Annex
6.1(i) of this Final Agreement), in this Final Agreement and/or in any of the
Annexes hereto.



4.2 Except for the provisions of Section 4.1 above, Sellers shall indemnify
Purchaser and/or TCO for losses effectively incurred by reason of: (i)
contingencies and undisclosed liabilities, assets shortfall or differences not
duly shown in TCO’s consolidated financial statements as of December 31, 2003;
and (ii) undisclosed contingencies and assets shortfalls or differences in
relation to the financial statements as of December 31, 2002, save the
differences arising out of the regular course of business, the originating
event thereof having occurred as from January 01, 2003 until the Closing Date,
whether they are known or not by Purchaser or have been disclosed or not to
Purchaser at any time, however, in any case, with due regard to the limits and
other conditions provided for in Sections 4.3 and 4.4 (“Contingencies”). Should
the Contingency be shown in the referred financial statements by means of a
provision, the Contingency to be indemnified for to Purchaser shall correspond
to the amount of the actual loss that exceeds the provision thus booked.
Further, Contingencies to be indemnified for by Sellers under the terms of this
Final Agreement shall include all duly evidenced expenses and costs incurred by
Purchaser and/or TCO in relation to the Contingencies, including attorneys’
fees and legal costs, with due regard to the proportions set forth in Section
4.3(a), as the case may be.



4.3 Except for losses arising out of the Contingencies provided for in Section
4.1 above, Sellers’ and/or intervening parties’ responsibility for effectively
incurred losses arising out of materialization of Contingencies shall be
subject to each and all of the following limitations:




     (a) (i) to the amount corresponding to the aggregate loss, where it is
directly incurred by Purchaser; and (ii) to the amount corresponding to
twenty-eight per cent (28%) of the loss, where it is effectively incurred by
TCO;




     (b) to the full amount of the Guaranty balance (as defined in Section 4.4
below), existing on the date the loss is incurred;




     (c) (i) to Contingencies of a tax, social security and labor nature which
have already been claimed until the Closing or may be claimed within a term of
five (5) years counted from the Closing; and (ii) to Contingencies of other
than tax, social security and labor nature, which have already been claimed
until the Closing or which may be claimed within one (1) year counted from the
Closing; and




     (d) to losses arising out of facts or events occurred after the date of
TCO privatization and until the Closing Date, whatever the Contingency nature
may be; notwithstanding the foregoing, Sellers declare that, to the best of
their Knowledge, all contingencies, undisclosed liabilities, assets shortfall
or differences of any nature whatsoever, the originating events thereof having
occurred on the date of TCO privatization, are duly shown in the financial
statements as of September 30, 2002 and




14








 





 December 31, 2003, Sellers not being liable, however, for the accuracy and
sufficiency of the provisions booked in connection with them.




     4.3.1 For the purposes of this Section 4, claimed Contingencies mean those
in relation to which lawsuits or administrative proceedings which may result in
an obligation under Sellers’ total or partial responsibility under the terms of
this Section 4 were or are filed within the terms provided for in letter (c) of
Section 4.3, by whom in law admitted, that is, by the respective creditor, tax
or regulatory authority, or another third party having the title to the
property or right being claimed. In case the Contingency referred to assets
shortfall verified independently from a lawsuit or administrative proceeding
filed by a third party holding the right therefor, the claim shall be deemed to
be valid if claimed to Sellers by Purchaser itself. Further, valid claims for
the purposes of this Section 4 shall be those based on counterclaims filed by
or against Purchaser or TCO.



4.4 As guaranty for Sellers’ obligation to indemnify Purchaser and/or TCO for
Contingencies which may be incurred under the terms and within the limits of
Sections 4.2 and 4.3, Purchaser shall withhold the amount of fifty million
reais (R$50,000,000.00), arising out of the Price installment provided for in
Section 2.3(b), which shall be used for paying the referred obligations under
Sellers’ responsibility and shall constitute the maximum limit of such
obligation, the balance to be released as follows (the “Guaranty”):




     (a) by the end of the first year counted from the Closing, the Guaranty
balance, including income accrued on such balance corresponding to the average
variation of the CDI added by interests of one per cent (1%) per year, which
income shall accrue throughout the period in which the Guaranty shall be in
force, less: (i) the amount of ten million reais (R$10,000,000.00) (including
the income related to such amount) which shall be withheld by way of Guaranty,
and which shall continue bearing income as above indicated until the end of the
fifth year counted from the Closing; and less (ii) the amounts of Contingencies
already claimed by whom in law admitted which are under Sellers’
responsibility, which shall remain withheld as Guaranty without limit as to
time and shall be released upon being settled in accordance with letter (c),
below;




     (b) by the end of the fifth year counted from the Closing, all the balance
of funds withheld as Guaranty shall be released, except for those funds
required for the settlement of Contingencies already claimed and still
outstanding, as referred to in Section 4.4(a)(ii) above;




     (c) For purposes of release of funds withheld as Guaranty, a Contingency
will be deemed to have been settled at the time of its payment, or if the
Contingency may not be any longer demanded on a legal basis, whether by reason
for a final, non-appeallable judgment rendered favorably, as the case may be,
to Sellers or to TCO, or by reason of the statute of limitations or lapse, or
of any other legal provision finally dismissing the Contingency.



4.4.1 Until the maturity date of the Price installment provided for in Section
2.3(b), the Price installments and their respective income up to then
outstanding and released from the



15








 




Guaranty shall be represented by a promissory note(s) issued by Purchaser in
the form of Annex 2.3.1, whereby it shall acknowledge its unconditional
obligation to pay the amount of the released Price installment, added by the
respective income, on its maturity date. As from such maturity date, the
released amounts of the Guaranty and respective income shall be paid to Sellers
on the release date in accordance with the provisions of Section 2.7 above. The
default in the payment of the amounts owed to Sellers hereunder shall subject
Purchaser to the penalties resulting from the default in the payment of the
Purchase Price, as set forth in Section 2.4 above.



4.5 For ascertaining the amounts of the Contingencies, as provided for in items
“a” and “b” of Section 4.4, both those already claimed and those not yet
claimed on the Maturity Date but which may be subsequently claimed within the
above mentioned time frames, arising out of facts or events occurred after the
TCO privatization date and before (and including) the Closing Date, the same
procedure described in Sections 3.2 and 3.2.1 shall be adopted, with due regard
to the following provisions: (i) Purchaser shall send Sellers its report
containing its Auditors’ opinion as to the amount and ranking of each
Contingency subject to the Guaranty within not more than sixty (60) days
counted from the Closing Date and, also, a review and updating of such opinion
until not later than ninety (90) days before the dates of each Guaranty
release, without prejudice to the possibility of supplementing or amending the
referred report by reason of Contingencies which may be claimed during the
referred period of ninety (90) days and/or change of ranking justified by a
relevant fact occurring after the delivery of the report and before the end of
the period of ninety (90) days in question; (ii) The estimated amounts, as well
as the respective ranking as for the probability of realization, related to the
Contingencies represented by lawsuits and administrative proceedings indicated
in Annex 4.5 of this Final Agreement, shall not be changed, save if, as from
this date, a new event shall occur which, due to its relevant and material
nature, shall justify a review of such amounts and/or ranking, it being certain
that, should there be any divergence between the parties as to the materiality
or relevance of the fact that may justify the referred review, such matter
shall be submitted to evaluation by the Auditors of the respective parties and,
if the case may be, to the decision of the Third Auditor, in accordance with
the procedures provided for in the referred Sections 3.2 and 3.2.1.



4.6 As long as there will be any withheld balance as Guaranty of Contingencies,
Purchaser or TCO shall deliver to Sellers, within not more than 30 days counted
from the base dates of 12/31/03/31/06/30 and 09/30, the first of them to be
delivered being that referring to base date of 06/30/2003 and as from them
successively, a report containing update information about (i) the status of
the Contingencies subject matter of an administrative proceeding or lawsuit,
(ii) new contingencies claimed by whom in law admitted in the period and which
fall within the Contingencies subject matter of the Guaranty; and (iii) the
updated balance of the Guaranty, the Contingencies subject matter of the
Guaranty and the respective amounts in connection with it, subject to review on
each date of release of the Guaranties in accordance with Section 4.5 above.






16









 



4.7 For the purposes hereof, any and all claim filed by a third party within
the time frames set forth in Section 4.3, as applicable, which may constitute a
Contingency, shall hereinafter be called as “Third Party Claim”.




     (a) Should the Third Party Demand relate to a TCO’s Contingency, subject
to the limitations and conditions provided for in Section 4.3, it is hereby
agreed that the conduction of the cases shall be in charge of TCO, which shall
defend them towards obtaining the best results for TCO’s interests. Purchaser
shall notify Sellers, in writing, as provided for in Section 13.1, about any
Third Party Demand filed as from the Closing, providing a copy of the documents
which have been sent to it, not later than five (5) business days before the
expiration of the legal term for filing of the respective defense or legal
remedy, Sellers being undertaken to keep such documents and information
confidential. Sellers shall be entitled to appoint, at their own expense, their
own attorneys for purpose of following-up the work to be conducted by the
attorneys appointed by TCO for the defense of the Third Party Claim, without,
however, taking part in the respective lawsuit / administrative proceeding. TCO
shall provide Sellers’ attorneys with copies of the main case records referring
to the Third Party Claim. The defenses of the Third Party Claim in course on
this date, the subject matter thereof being TCO’s Contingencies, shall continue
being defended by TCO, without prejudice to Sellers’ right to follow-up the
progress of the respective lawsuits or proceedings. TCO and/or Purchaser may
not enter into agreements relating to the Third Party Claim subject matter of
this Section without Sellers’ prior written consent; in case any agreement may
be entered into by TCO and/or Purchaser without Sellers’ prior written consent,
such fact will fully discharge Sellers from any obligation or responsibility
whatsoever in relation to the Contingency subject matter of such Third Party
Claim.




     (b) Should the Third Party Claim relate to an obligation indemnifiable by
Sellers under the terms or by reason of this Agreement, not falling within the
cases provided for in letter (a) above, Purchaser shall notify Sellers about
such Third Party Claim, in writing, as provided for in Section 13.1, providing
a copy of the documents which may have been sent to it, as well as any
information held by it (or by TCO) which may help preparing Sellers’ answer,
before the lapse of (i) one half (1/2) of the legal term for the filing of the
respective defense or applicable remedy, or (ii) five business days, whichever
occurs firstly. The failure to comply with the obligation to notify as provided
for herein by reason of an act or failure to ct ascribable to Purchaser or to
the respondent shall imply full discharge of Sellers in relation to the
referred Third Party Claim, except if Sellers shall, by summons or service of
process made by whom in law admitted, become aware of the Third Party Claim on
an independent basis. Once the notice provided for herein is received, Sellers
shall be entitled to decide as for the step to be taken in relation to the
respective Third Party Claim, and shall notify Purchaser, at least one third
(1/3) before the expiration of the term for filing of the respective defense,
informing whether the Third Party Demand shall be discussed within an
administrative or judicial scope by Sellers, on behalf of the respondent. In
the event of absence of a timely answer from Sellers as for the assumption of
the Third Party Claim, the respondent may undertake the defense of the Third
Party Claim, without prejudice to Sellers’ right to follow-up the progress of
the respective lawsuit or proceeding. In case they shall choose to discuss the
Third Party Claim on a judicial or administrative



17








 




basis, Sellers shall appoint, in their notice to Purchaser, the counsel in
charge for representing the respondent in the Third Party Claim (who may be
refused by the respondent, with the due reasons therefor), the respondent being
required to provide such counsel with the power of attorney and/or other
documents necessary for the due judicial or administrative representation.



4.8 Purchaser is irrevocably and irreversibly required to defend, indemnify and
hold Sellers harmless in relation to any and all losses, claims and demands
(including attorneys’ fees and legal costs) incurred by Sellers as a result of:
(i) any inaccuracy in Purchaser’s representations and Guaranties made
hereunder, or any breach of such representations and Guaranties; and/or (ii)
the default, either partial or total, in any Purchaser’s obligations or
agreements hereunder, or in any document or instrument relating to this
Agreement.



4.9 Reimbursement of Contingent Assets. The parties agree that Sellers shall
be reimbursed, within the terms provided for below, in the proportion of
twenty-eight per cent (28%) of the respective amount, for Contingent Assets
(below defined), which may materialize after December 31, 2002. Sellers’ right
in relation to Contingent Assets shall be limited to the total amount of fifty
million reais (R$50,000,000.00), which shall represent Purchaser’s maximum
obligation to reimburse the amounts provided for herein to Sellers. For the
purposes hereof, “Contingent Assets” are (i) rights, including credits,
provided for in Annex 4.9 of this Agreement; and (ii) the amounts provisioned
on account of Contingencies in TCOPar’s financial statements as of December 31,
2002 which, by reason of a final, non-appeallable court decision, are not
materialized. Credits arising out of Contingent Assets materialized through
their effective receipt of use by TCO, including, if the case may be, through
(i) the rendering of a final, non-appeallable court decision or final
settlement discharging Purchaser and/or TCO from liability, and/or (ii) the
funds in question being made available through their receipt by Purchaser
and/or TCO or by means of the right to use the amounts corresponding to the
income arising from other debts, shall be paid to Sellers, as provided for in
Section 2.7 above, in up to twelve (12) months as from their materialization,
in available funds, added by the income corresponding to the variation of the
CDI plus interests of one per cent (1%) per year, calculated since the
respective materialization date until the date of their effective payment. The
default in the payment of the amounts owed to Sellers on the maturity dates
provided for herein shall subject Purchaser to the same penalties arising out
of default in the payment of the purchase Price, as set forth in Section 2.4
above. The status of actions and lawsuits referring to Contingent Assets, if
any, as well as the receipt of other credits generating Sellers’ right to
reimbursement as provided for herein, shall be informed to Sellers together
with the information required under the terms of Section 4.6 above.



V. Additional Rights and Obligations of the Parties and Controlled Parties.



5.1 Upon Closing, Seller Bid (or its successor) and Purchaser shall separately
enter into an agreement for assignment of rights and obligations, whereby
Seller Bid shall assign to Purchaser, as of the Closing Date, its rights to
subscribe shares by virtue of the capitalization of the special premium reserve
recorded in TCO as per Instruction CVM



18








 



319/99, relating to the tax benefit not yet earned and, in consideration for
such assignment, Purchaser shall pay Seller Bid, as of the Closing Date, the
amount of twenty-two million reais (R$22,000,000.00), added by the income
corresponding to CDI plus interests of two per cent (2%) per year, calculated
as from January 15, 2003 until the date of its payment, in immediately
available funds. The default in the payment of the amount owed to Seller BDI
under the terms hereof shall subject Purchaser to the same penalties arising
out of default in the purchase Price, as provided for in Section 2.4 above.



5.2 Purchaser is hereby committed, either directly or through TCO, to continue
with the social nature projects listed in Annex 5.2, including those
administered by the Ayrton Senna Institute, for a minimum period of three (3)
years counted from the Closing Date, in accordance with the investment terms
described in the same Annex 5.2, the obligation herein undertaken by Purchaser,
in relation to such projects, being in the amount equivalent to three million
and five hundred thousand reais (R$3,500,000.00) per year, which amount shall
be added, as from January 15, 2003, by an amount corresponding to the variation
in the General Prices Index – IGPM of the Getúlio Vargas Foundation until the
dates of the respective payments.



5.3 TCO shall continue being managed by its controlling shareholders, and its
business regularly conducted until the Closing Date, and no transactions
strange to the regular course of business of TCO shall be conducted, Sellers
and their controlling shareholders being committed to cause TCO to comply with
such commitment. As long as the Closing shall not have occurred, Sellers shall
also cause TCO, its officers and controlling shareholders to meet the basic
managing guidelines provided for in common agreement by the parties in the
Action Plan subject matter of Annex 5.3 of this Final Agreement. Without
prejudice to the foregoing, Sellers are committed to cause TCO to comply with
the provisions of the Action Plan, and not to perform the below listed acts,
without first obtaining Purchaser’s prior and express consent, in writing,
which consent shall not be unreasonably denied or refused.




	 	(i)	 	to introduce any change to its articles of incorporation;






	 	(ii)	 	to grant or revoke powers of attorney, excepted those granted
or revoked in the regular course of TCO’s business;






	 	(iii)	 	to transfer, dispose of, pledge, mortgage, encumber or
otherwise assign or dispose of any TCO’s assets in an amount
exceeding, in one sole transaction or series of transactions of the
same nature, ten million reais (R$10,000,000.00);






	 	(iv)	 	to grant loans, credits or otherwise grant finance,
(including granting of guaranties) to any third party other than
between TCOPar and/or TCO’s Controlled Companies, except in the
regular course of their respective businesses;






	 	(v)	 	to involve TCO in corporate reorganizations (such as
merger, spin-off or amalgamation);







19








 



	 	(vi)	 	to change TCO’s corporate object or main activity;






	 	(vii)	 	to start any procedure aiming at filing a petition in
receivership (“concordata”) or bankruptcy of TCO;






	 	(viii)	 	to increase or reduce TCO’s capital, as well as to issue any kind
of securities granting rights to subscription of shares or which may
be convertible into shares, except by virtue of a legal requirement;






	 	(ix)	 	TCOPar shall purchase or sell, either directly or indirectly,
its own shares, or sell, either directly or indirectly, shares in
the capital stock of TCO’s Controlled Companies; and






	 	(x)	 	to declare or effect, or agree to be declared or effected,
any payment of dividends (except as provided for in Section 5.9 or
by legal or statutory requirement) or distributions of any
properties of any nature to its shareholders, nor purchase or
redeem, or agreed to the purchase or redemption, of any part of the
shares in its capital stock.





5.3.1 As from this date, Sellers shall inform and obtain Purchaser’s prior
written consent for the performance, by TCO, of any of the following acts,
which consent shall be unreasonably denied or refused (the performance of any
such act being deemed as authorized in the event of Purchaser’s failure to
voice its answer within three (3) business days counted from the receipt of the
respective authorization request):




	 	(i)	 	execution of any agreement with third parties (considering
each transaction individually or a series of related transactions):
(a) which is beyond the regular course of TCO’s business
(rescheduling and rollover of debts already existing on 12/31/2002
being expressly deemed as regular course of business); or (b) the
total amount of the obligations undertaken and/or payments due
during the effective term of the referred agreement is equal to or
higher than ten million reais (R$10,000,000.00) (except for the
provisions in the Capex contained in the Action Plan attached hereto
as Annex 5.3 and the debt rescheduling and rollover already existing
on 12/31/2002); or (c) which is not contemplated in the Capex
provided for in the Action Plan attached hereto as Annex 5.3 (except
for debt rescheduling and rollover already existing on 12/31/2002);
or (d) the conditions of which are not compatible, in each case,
with at least the ones currently performed by TCO in similar
transactions or with applicable market conditions;






	 	(ii)	 	purchase of third parties’ assets in an amount exceeding ten
million reais (R$ 10,000,000.00), except if the purchase is agreed
to in the regular course of TCO’s business (which includes purchase
of cellular telephones) or which is contemplated in the Capex
provided for in the Action Plan attached hereto as Annex 5.3 and, in
each case, if its conditions are compatible with at least







20








 



	 	      	 	those currently performed by TCO in similar transactions or with
the applicable market conditions;





	 	(iii)	 	execution of new agreements and/or renewal, amendment or
extension of the effective term of any agreement with related
parties, under more disadvantageous conditions for TCO than those
until then in effect in agreement of the same nature or in relation
to the agreement to be renewed, amended or extended (except if the
changes are compatible with the then current market conditions), or
for a term of more than twelve (12) months, provided that agreements
with related parties shall mean any agreement entered into between
TCO, on the one side, and its shareholders (direct or indirect)
and/or its officers, or any individual or legal entity related
thereto, on the other side; and






	 	(iv)	 	granting of benefits or improvements in the working
conditions of any officer or employee holding a relevant position in
TCO, including possible severance pays, as well as granting of loans
to employees, save those already granted pursuant to Annex 8.1.13
and those which may be granted in the regular course of TCO’s
activities and which, either individually or in the aggregate
amount, shall involve a value of ten million reais (R$10,000,000.00)
or more.





5.4. In relation to the agreements in which the transfer of control of TCOPar
and of each of TCO’s Controlled Companies shall cause the acceleration of the
debt or termination or and adverse effect as far as its terms and conditions
are concerned, Sellers have requested, pursuant to the letters attached hereto
as Annex 5.4, specific permission to effect the transfer of the Controlling
Shares, without the occurrence of early maturity of the debt, contract
termination or adverse change to debtor of its terms and conditions, as the
case may be, as well as to make their best efforts to obtain, before the
Closing, the referred permissions. In order to avoid doubts, the Parties agree
that obtaining such permissions is not a condition precedent for the Closing.



5.5 Each of the Sellers is hereby irrevocably and irreversibly committed, by
itself, directly or indirectly through any other individual or legal entity, to
refrain itself, as well as it is committed to cause its controlled companies,
their respective partners and officers to refrain themselves, for a period of
two (2) years counted from the Closing Date, from (i) requesting, soliciting,
persuading or inducing any officer or employee occupying a relevant position in
TCO on the date of the Preliminary Agreement to establish any employment or
similar relation with any third party holding a concession for providing
telecommunication services of Cellular Mobile Service or Personal Mobile
Services modes, in the same areas in which TCO currently provides
telecommunication services, and (ii) requesting, soliciting, persuading or
inducing any subscriber to terminate, reduce or fail to renew or extend its
agreements or other relations with TCO, in order to become a customer or enter
into any agreement or other relationship of such a nature with a third party
holding a concession for providing telecommunication services of Cellular
Mobile Service or Personal Mobile Service modes, in the same area in which TCO
currently provides



21








 



telecommunication services. Sellers shall be liable for losses and damages
incurred by TCO as a result of any default in the obligations provided for
herein.



5.6 Sellers and Purchaser shall make their best efforts to renegotiate Sellers’
obligations (as well as the obligations of other companies under common control
with Sellers) with third parties, as described in detail in Annex 5.6 of this
Final Agreement, as of base date January 15, 2003, as amended since January 15,
2003 until March 17, 2003, which Annex 5.6 contain, also, copies of the
agreements providing for such obligations (“Sellers’ Financial Obligations”),
in more favorable conditions than those currently in effect and, for such
purpose, the parties shall cooperate between themselves and shall act jointly
as regards the respective creditors. Purchaser and Sellers agree that the Price
installments provided for in Section 2.3(d) are intended for full settlement of
Sellers’ Financial Obligations, in the same amount and added by the respective
charges, as described in Annex 5.6, and in its appendixes and amendments made
until the Closing Date, as well as, if so indicated in the referred Annex 5.6
and in its appendixes and amendments, the amounts advanced by Sellers (and/or
companies under common control with Sellers) to the respective creditors since
January 15, 2003 until the Closing Date. Any and all changes to the payment
terms and conditions of Sellers’ Financial Obligations which may be adjusted
until the Closing Date with the respective creditors or third parties
refinancing the same Sellers’ Financial Obligations, with due regard to the
procedure provided for in Section 5.6.1, shall cause the forthwith and
corresponding change to the terms and conditions provided for in Annex 5.6. It
is certain and agreed that, with due regard to the procedure provided for in
Section 5.6.1 for validation of such amendment, each referred change to Annex
5.6 in relation to the terms and conditions applicable to Sellers’ Financial
Obligations shall cause an equivalent and immediate change to the payment
conditions (including payment term and income) of the corresponding Price
installment set forth in Section 2.3(d), with the consequent amendment to Annex
2.3(d) of this Final Agreement.



5.6.1 Sellers shall inform, by written notice to Purchaser, at least three (3)
business days in advance to the maturity date of Sellers’ Financial Obligations
occurring before the Closing Date, the terms and conditions, including maturity
date and applicable charters, of the proposed renewal or of the contracting of
a new obligation in substitution for the outstanding Sellers’ Financial
Obligation, provided that the proposed charges may be changed, within the
conditions indicated in the same notice, until the business day immediately
preceding the renewal date or the date of the new contract. Within three (3)
business days before the maturity date of Sellers’ Financial Obligation in
question, Purchaser may, at its discretion, upon written notice to Sellers (i)
accept the renewal or new contracting proposed by Sellers, or (ii) propose an
alternative renewal or new contracting, which, if more advantageous to Sellers,
shall be accepted by them, with the consequent automatic change to Annex 5.6
and to Annex 2.3(d) of this Final Agreement, based on the effected renewal or
contracting, as proposed by Sellers or by Purchaser, as the case may be. If
Purchaser shall fail to answer within three (3) business days before the
maturity date of Sellers’ Financial Obligation, it will be understood that
Purchaser has accepted, for all purposes, the proposal made by Sellers in their
notice, pursuant to item (i) hereof. If, notwithstanding Sellers’ and
Purchaser’s efforts, Sellers are unable to obtain a refinancing and/or new
finance in substitution for Sellers’ Financial Obligation due before the
Maturity



22








 



Date, Annex 5.6 and, consequently, Annex 2.3(d), shall be amended in order to
consider, for the purposes of this Final Agreement, such past due Sellers’
Financial Obligation as if the same were due on the Closing Date, added by
interests and applicable charges until the Closing Date, under the terms of the
referred Annex 5.6.



5.7 As from this date, Sellers shall make their best efforts before the
creditors of Sellers’ Financial Obligations guaranteed by the Controlling
Shares, as indicated in Annex 8.1.2, in such a manner as to replace such
guaranty by a personal guaranty to be granted by Purchaser (without, however,
any kind of financial support by Purchaser’s direct or indirect controlling
shareholders) upon the Closing, through release of the encumbered Controlling
Shares. In case such release is not possible, Sellers shall indemnify Purchaser
in case it may be deprived of the possession of the Controlling Shares as a
result of a default by Seller or by the entities listed in Annex 8.1.2, not
attributable to Purchaser.



5.7.1 Upon the occurrence of any Sellers’ Financial Obligation guaranteed by
Controlling Shares, and the Price installment owed by Purchaser in connection
with such same Sellers’ Financial Obligation is not enough to fully settle
Sellers’ obligation, Purchaser shall be entitled, on the maturity date of the
Price installment provided for in Section 2.3(a) above, withhold the amount of
such Price installment falling short for the full settlement of Seller’s
financial obligation in question, which guaranty shall last until its payment
and consequent release of the referred Controlling Shares. In the event of
foreclosure of the guaranty represented by the Controlling Shares, Purchaser
shall be entitled to use the withheld portion of the Price to pay and, thus,
release the Controlling Shares. The amount withheld in guaranty, as herein
provided for, shall continue being added by the variation of the CDI plus two
per cent (2%) per year, until its effective payment to Sellers or use for
release of the Controlling Shares, as the case may be. Upon the cancellation of
the existing liens over the Controlling Shares, Purchaser shall issue a
statement confirming the release of the Price installment provided for in
Section 2.3(a) above in relation to the provisions hereof.



5.8 Upon the Closing of this Final Agreement, Purchaser (without any kind of
financial support by Purchaser’s direct or indirect controlling shareholders)
shall present letters of Personal Guaranties for each of Sellers’ Financial
Obligations described in Annex 5.6 and in its appendixes and amendments, of
this Final Agreement, as in effect on the Closing Date, in the form of Annex
5.8, in order to jointly and severally guarantee, waiving the benefit or order,
the payment of Sellers’ Financial Obligations (the “Personal Guaranties”). The
final form and contents of the Personal Guaranties shall be agreed on a
case-by-case basis, with the respective financial creditors and, if necessary,
rendered adequate to the standards requested by them, provided that such
adequation does not represent any additional burden or charge for Purchaser to
the extent it refers to the guaranteed amount and charges applicable thereto.
It is hereby agreed that the payments of the referred Price installments
provided for in Section 2.3(d) shall, except as otherwise agreed by the
parties, upon written notice delivered to Sellers two (2) business days before
the respective maturity dates, be made directly by Purchaser to the respective
creditors, on the respective maturity dates, on Sellers’ account and order to
the benefit of the respective debtor, in such a manner that, after each of such
payments is effected, nothing else is owed by Seller or its controlled
companies as a result of Sellers’ Financial Obligations thus paid. Should the



23








 



creditor not agree as to the amount due and refuse to receive the payment
provided for herein, the amount of the Price referring to Sellers’ Financial
Obligation in controversy shall be deposited in an account held jointly,
however not severally, by Seller Bid (or its successor) and Purchaser, opened
with a financial institution selected by Purchaser and by Seller Bid and
invested in investments deemed as low risk of loss of principal, as per the
instructions of same Seller Bid (the “Escrow Account”), it being certain that
the funds shall remain in deposit in the Escrow Account until the final
decision of the dispute, at which time they will be either used for the payment
of Sellers’ Financial Obligation in controversy or released to Sellers, in case
Sellers’ Financial Obligation shall be settled by Sellers through other means.
The deposit in the Escrow Account or the adoption of another procedure agreed
to between the parties shall constitute, for the purposes of this Final
Agreement, the full compliance by Purchaser of the obligation to pay the
corresponding installment of the Price. Exclusively in this case of dispute as
to the amount due, in case the Debt creditor shall proceed to the foreclosure
of the personal guaranty granted by Purchaser under the terms of this Section
5.8, Sellers shall take all the required actions for the defense of such
foreclosure, it being certain that Purchaser shall consign in court the amount
of the Price installment in question, being discharged from the obligation to
pay such installment, it being Sellers’ and/or the debtor’s entire
responsibility to conduct the respective proceeding and to bear all the costs
in connection with the same, including attorneys’ fees, as well as eventual
differences as may be awarded against it by court. In the event Purchaser shall
effect payments under the terms of the Personal Guaranties, subrogating itself
of the creditors’ rights to Sellers’ Financial Obligations, Sellers’
obligations to Purchaser arising out of the subrogation shall be immediately
and automatically offset by Purchaser’s payment obligations, as provided for in
Section 2.3(d). For the purposes hereof, Purchaser shall obtain all corporate
authoriz
ations required for granting the Personal Guaranties upon Closing.



5.9 Dividends and interests on the net equity declared or credited by TCOPar
and not yet paid until this date total ninety-three million, four hundred and
ninety-eight thousand, six hundred and forty-three reais and sixty-nine cents
(R$93,498,643.69), as approved in the minutes of TCOPar’s Board of Directors
numbers 162, 179 and 180. The parties agree that the date for the financial
settlement of dividends and interests on TCOPar’s net equity referring to
fiscal year 2002 shall be no later than June 30, 2003. In case on the referred
date the Closing shall have already taken place and effective control of TCOPar
shall have already been transferred to Purchaser, including in relation to its
management, and if Purchaser shall not have caused the referred dividends to be
paid to Sellers on that date, provided that such delay may be ascribable to
Purchaser, Purchaser shall be undertaken to pay to Sellers the due and unpaid
amount, added by default fine corresponding to (i) two per cent (2%), if the
delay shall last more than five (5) days and less than thirty (30) days, or
(ii) twenty per cent (20%), if the delay is of thirty (30) days or more,
without prejudice to the income corresponding to the average daily variation of
the CDI plus two per cent (2%) per year, calculated on the amount of the
dividends payable to Sellers, since June 30, 2003 until the actual payment
thereof.



5.10 Sellers shall deliver to Purchaser, as of the Closing Date, the letters of
resignation of the members of the TCO’s Board of Directors, in the form of
Annex 2.6(a)(ii)I, and shall



24








 



cause TCO to previously call a General Shareholders Meeting (provided that
Purchaser shall request such calling on a timely basis) and a Board of
Directors Meeting, to be held on the Closing Date, for election, by Purchaser
and by the directors elected by it, as the case may be, of the new directors
and officers (members of the Board of Directors and of the Board of Executive
Officers). In the event, for any reason, such General Shareholders Meeting may
not be held on the Closing Date, as provided for above, Sellers shall deliver
to Purchaser, at such time, letters of resignation of the members of TCO’s
Board of Directors appointed by Purchaser, in the form of Annex 2.6(a)(ii)II,
through which the resigning members undertake the commitment, for a period not
to exceed fifteen (15) days counted from the Closing Date (i) to remain in
their offices until the actual holding of the referred General Shareholders
Meeting that will elect the new members in substitution for the resigning
members; (ii) to elect, on the Closing Date, the members of TCO’s Board of
Executive Officers as may be appointed by Purchaser; and (iii) to vote at TCO’s
Board of Directors Meeting attended by them, until being replaced, in the
manner as may be indicated in writing by Purchaser and always to TCO’s best
interest, Purchaser being required to indemnify and hold Sellers and the
referred members of the Board of Directors harmless from any responsibility
arising out of the votes given in accordance with Purchaser’s instructions, and
Sellers shall indemnify and hold Purchaser and its directors and officers
harmless from any responsibility arising out of votes given by the referred
members of the Board of Directors differently from the instructions received
from Purchaser.



5.11 Sellers shall, on the Closing Date, cause the Management Agreements or
technical and/or administrative support agreements entered into between TCO and
its direct or indirect controlling shareholders (the “Management Agreements”)
to be terminated, through execution of instruments of termination or release,
whereby TCOPar and TCO’s Controlled Companies shall give the contractors and
the latter, against payment, exclusively, of the compensation owed to them
under the terms of the Management Agreements, calculated pro rata temporis
until the Closing Date, shall give TCOPar and TCO’s Controlled Companies, full,
general, irrevocable and irreversible release, confirming to have nothing else
to claim ones from the others by reason of the full performance of their
respective obligations provided for in the Management Agreement, as well as
that nothing is due by either party to the other by reason of the earlier
termination herein provided for, to which Purchaser expressly agrees.



5.12 Sellers and Purchaser shall present (and shall cause TCO to present), not
later than five (5) business days counted from the date of this Final
Agreement, the request for ANATEL’s consent to the transfer of the Controlling
Shares representing TCOPar’s capital stock to Purchaser, and shall make their
best efforts to obtain, as soon as practicable, the regulatory authorizations
necessary for the closing of the transactions contemplated under this Final
Agreement. In this same manner, the parties are undertaken to agree previously
to their presentation upon the contents of any notices or petitions sent to the
Brazilian applicable regulatory authorities, namely, CVM, Anatel and CADE.



5.13 As from this date and until the Closing Date, Sellers shall be required
to: (i) carry out the necessary arrangements for Purchaser and its
representatives and consultants to



25








 



have access to TCO’s premises, staff and files (including corporate and
accounting books), within regular business hours of their offices, upon prior
request, in writing (which may be sent by fax or letter against receipt), at
least 48 hours in advance; (ii) cause TCO to provide Purchaser and its
representatives all the information relating to TCO’s business which Purchaser
may reasonably request; and (iii) cooperate and cause TCO to cooperate during
the performance of the Audit mentioned in Section 3.1 above, making available
to Purchaser and its representatives all the information Purchaser may
reasonably request as may be necessary or convenient to the performance of the
mentioned Audit, provided that, in any case, the referred access, supply of
information and cooperation shall not interfere with TCO’s regular operations.



5.14 As from the execution of this Final Agreement and until the Closing Date,
the parties are undertaken to take all actions and to execute all documents
necessary for the implementation of the obligations and commitments undertaken
herein.



VI. Conditions Precedent to the Closing.



6.1 Conditions to Purchaser’s Obligation: Purchaser shall be under no
obligation to perform the transactions contemplated under this Final Agreement
unless the following conditions precedent shall have been fulfilled and
verified, either before or on the Closing Date (without prejudice to
Purchaser’s right to waive any of the referred conditions):




	 	(a)	 	evidence, upon delivery to Purchaser, of a statement issued
by the financial institution acting as trustee for TCOPar’s shares,
that Sellers or Sellers’ successors indicated in Section 17.1 below
are holders of, at least, sixty-four billion, four hundred and
eighty-one million, two thousand, four hundred and thirty-six
(64,481,002,436) common shares in TCOPar, representing fifty-one per
cent (51%) of TCOPar’s voting capital;






	 	(b)	 	effective migration of the Cellular Mobile Service providers
belonging to the TCO Group to the Personal Mobile Service, with
consequent execution and publication of the Instruments of
Authorization for Rendering Personal Mobile Services by the referred
providers;






	 	(c)	 	obtaining prior approval from the necessary applicable
government agencies, namely, ANATEL’s consent for the transfer of
the Controlling Shares representing TCOPar’s capital stock to
Purchaser;






	 	(d)	 	performance, by Sellers, of all their obligations hereunder,
including fulfillment, by TCO and its controlling shareholders, of
the Action Plan for managing TCO, which is the subject matter of
Annex 5.3, between this date and the Closing Date, as well as
fulfillment of the conducts mentioned in Section 5.3 of this Final
Agreement;







26








 



	 	(e)	 	performance and conclusion of the Audit for the purposes of
Section 3.2 of this Final Agreement, with due regard to the
procedures and time frames provided for in Section 3.2.2 above;






	 	(f)	 	effecting, if any, the adjustment to the Price by reason of
the Actual Obligations, in accordance with the terms, deadlines and
conditions set forth in Section 2.2;






	 	(g)	 	the occurrence of the Closing not later than May 15, 2003,
with due regard to the provisions of Section 6.3 below;






	 	(h)	 	the non-occurrence until the Closing Date of any Material
Adverse Change, as defined in Annex 6.1(h) of this Final Agreement,
with due regard to the provisions of Section 6.4 below;






	 	(i)	 	the minimum indicators contained in items “a”, “c”, and “d”
of Annex 6.1(i) of this Final Agreement being confirmed as true on
December 31, 2003, and on the Preliminary Agreement date; and






	 	(j)	 	Sellers’ representations and Guaranties contained in Section
8.1 of this Final Agreement or in its respective Annexes being true,
in their material aspects, on the date of this Final Agreement, and
Sellers’ Representations and Guaranties contained in Sections 8.1.1,
8.1.2, 8.1.3, 8.1.4, 8.1.5, 8.1.6 and 8.1.7 of this Final Agreement
or in its respective Annexes being true, in their material aspects,
on the Closing Date as if they had been made as of the Closing Date,
except for changes arising out of the regular course of TCO’s
business.





6.2 Conditions to Sellers’ Obligations: Sellers shall be under no obligation to
perform the transactions contemplated under this Final Agreement unless the
following conditions precedent shall have been fulfilled and verified, either
before or on the Closing Date (without prejudice to Seller’s right to waive any
of the referred conditions):




	 	(a)	 	delivery, by Purchaser, of the Personal Guaranties provided
for in Section 5.8 above;






	 	(b)	 	obtaining the prior approval from the necessary applicable
government agencies, namely, ANATEL’s consent to the transfer of the
Controlling Shares representing TCOPar’s capital stock to Purchaser;






	 	(c)	 	performance, by Purchaser, of all its obligations hereunder;
and






	 	(d)	 	Purchaser’s Representations and Guaranties contained in this
Final Agreement or in its respective Annexes shall be true, in their
material aspects, on the Closing Date as if they had been made as of
the Closing Date.


27








 







6.3 The parties are undertaken to make their best efforts for the Closing to
occur as soon as possible after the execution of this agreement. The parties
are required to effect the Closing on the fifth (5th) business day counted from
the date on which the occurrence (or waiver by the party entitled to do so) of
all the conditions precedent set forth in Sections 6.1 and 6.2 shall have
occurred. Should the implementation of any of the conditions precedent
mentioned in Section 6.1 above not be complied with (or waived by Purchaser) by
May 15, 2003, Purchaser shall be entitled to terminate this Final Agreement,
upon notice to Sellers within the subsequent twenty (20) days as provided for
in Section 13.1 below, as from which date Sellers shall cease to have any
obligation of selling the mentioned Controlling Shares, whereby this Final
Agreement shall become null and void, provided that Purchaser shall not be
entitled to claim termination of this Final Agreement by reason of
non-compliance with any of the conditions precedent mentioned in Section 6.1
the compliance of which is subject to Purchaser’s discretion or for which
non-compliance Purchaser may have contributed in a relevant manner. Both
Sellers and Purchaser shall be entitled to demand, upon specific performance,
the compliance with the obligation not fulfilled by the other party and,
consequently, the performance of the Closing under the terms of this Agreement,
without prejudice to the indemnity it may be entitled to for losses and damages
suffered by reason of the default. In order to avoid any doubt, Purchaser’s
waiver of its right to terminate this Final Agreement on May 15, 2003 in the
form and for the reasons mentioned above, shall not prejudice its right to
demand from Sellers the fulfillment of their obligations provided for in this
Final Agreement or the compliance with any of the conditions precedent to the
Closing, as set forth in Section 6.1 above.



6.4 Upon the occurrence of any Material Adverse Change as from this date,
Purchaser shall have twenty (20) days counted from such occurrence to notify
Sellers, in writing, of its decision to waive, or not, the condition precedent
in question. In case Purchaser dos not exercise the right herein set forth in
relation to a Material Adverse Change within the referred period, it will not
be allowed to do so afterwards in relation to this same Material Adverse
Change, it being understood, for all purposes and effects, that Purchaser has
waived such condition. The provisions set forth in this Section 6.4 shall not
impair Purchaser’s right to exercise its rights provided for in Section 6.1(h)
above (or waive the same) in relation to (a) any new Material Adverse Change of
another nature which may occur in the future; and (ii) a same Material Adverse
Change of the same nature of the one having been waived under the terms hereof,
in case the same shall occur again in a proportion at least twenty per cent
(20%) higher than the one originally provided for in Annex 6.1(h), which
rights, in any circumstance, may be exercised within twenty (20) days from the
occurrence of the respective event, as initially provided for herein.



6.5 On the first business day following the date of the occurrence (or waiver
by the party having the right to do so) of all the conditions precedent
provided for in Sections 6.1 and 6.2 above, the parties shall execute and send
to the trustee institution in charge for the bookkeeping of TCOPar’s shares an
instruction for blockade of the Controlling Shares to be disposed of to
Purchaser, which shall not be cancelled unless upon the Closing, as provided
for in Section 2.6 hereof.



28








 




VII. OPA.



7.1 Purchaser shall, at its sole expenses and risk, effect the public offer for
purchase of common shares held by TCOPar’s minority shareholders, in compliance
with art. 254-A of the Brazilian Corporations Acts.



VIII. Representations and Guaranties.



8.1 Sellers, Fixcel and Splice (hereinafter jointly referred to as
“Declarants”) hereby represent and warrant to Purchaser, without any
restrictions whatsoever, that the following representations and Guaranties are
true as of this date. Same representations and Guaranties shall be understood
as repeated and ratified on the Closing Date in relation to the referred date,
except for changes arising out of the regular course of TCO’s business:



8.1.1 Capital Stock and Ownership of the Controlling Shares.




     (a) TCOPar’s total capital stock comprises, exclusively, three hundred and
seventy-nine billion, two hundred million, thirty-six thousand, five hundred
and eighty-two (379,200,036,582) shares, represented by one hundred and
twenty-six billion, four hundred and thirty-three million, three hundred and
thirty-eight thousand, one hundred and nine (126,433,338,109) voting common
shares and two hundred and fifty-two billion, seven hundred and sixty-six
million, six hundred and ninety-eight thousand, four hundred and seventy-three
(252,766,698,473) non-voting preferred shares, all of them without face value,
validly issued, fully subscribed and paid-up, which position shall remain valid
and unchanged until the Closing Date. On this date, Sellers are the owners of
seventy-three billion, five hundred and twenty-nine million, six hundred and
ten thousand, three hundred and ninety-six (73,529,610,396) common shares,
representing 58.1568% of TCOPar’s voting capital; on the Closing Date, Sellers
shall, with due regard to the provisions of Section 2.8 above, be the owners of
seventy-seven billion, two hundred and fifty-six million, four hundred and ten
thousand, three hundred and ninety-six (77,256,410,396) common shares,
representing sixty-one point ten per cent (61.10%) of the voting capital and
twenty point thirty-seven per cent (20.37%) of TCOPar’s capital stock, in both
cases without computing treasury shares in the amount of five billion, seven
hundred and ninety-one million, three hundred and ninety-three thousand, eight
hundred and eighty-six (5,791,393,886) common shares.




     (b) The total capital stock of TCO’s Controlled Companies, on base date
December 31, 2002, comprised,




(i) in case of Telegoiás Celular, exclusively six
million, six hundred and sixteen thousand, nine hundred and
twelve (6,616,912) shares, represented by two million, three
hundred and thirteen thousand, five hundred and seventy-four
(2,313,574) common shares and four million, three hundred and
three thousand, three hundred and thirty-eight (4,303,338)
preferred



29








 





shares, all of them without face value, validly issued, fully
subscribed and paid-up, which position shall remain valid and
unchanged until the Closing Date. TCOPar is the owner, in the
aggregate, of at least six million, four hundred and twenty-three
thousand, one hundred and eight (6,423,108) shares representing
ninety-seven point zero seven per cent (97.07%) of the total
capital stock of Telegoiás Celular, of which two million, two
hundred and eighty thousand, nine hundred and three (2,280,903)
are common shares, representing ninety-eight point fifty-nine per
cent (98.59%) of the voting capital, and four million, one hundred
and forty-two thousand, two hundred and five (4,142,205) preferred
shares, representing ninety-six point twenty-five per cent
(96.25%) of the non-voting capital;




(ii) in case of Telemat Celular, exclusively six
hundred and eighty-nine thousand, seven hundred and seventeen
(689,717) shares, represented by three hundred and thirty-one
thousand, three hundred and ten (331,310) voting common shares
and three hundred and fifty-eight thousand, four hundred and
seven (358,407) preferred shares, all of them without face
value, validly issued, fully subscribed and paid-up, which
position shall remain valid and unchanged until the Closing
Date. TCOPar is the owner, in the aggregate, of at least six
hundred and seventy-four thousand, six hundred and fifty-one
(674,651) shares representing ninety-seven point eighty-one
per cent (97.81%) of the total capital stock of Telemat
Celular, of which three hundred and twenty-nine thousand, six
hundred and ninety eight (329,698) are common shares,
representing ninety-nine point fifty-one per cent (99.51%) of
the voting capital, and three hundred and forty-four thousand,
nine hundred fifty-three (344,953) preferred shares,
representing ninety-six point twenty-five per cent (96.25%) of
the non-voting capital;




(iii) in case of Telems Celular, exclusively one
million, two hundred and ten thousand, four hundred and
eighty-three (1,210,483) shares, represented by five hundred
and forty-four thousand, six hundred and thirty-five (544,635)
common shares and six hundred and sixty-five thousand, eight
hundred and forty-eight (665,848) preferred shares, all of
them without face value, validly issued, fully subscribed and
paid-up, which position shall remain valid and unchanged until
the Closing Date. TCOPar is the owner, in the aggregate, of at
least one million, one hundred and ninety-two thousand, six
hundred and fifty-six (1,192,656) shares representing
ninety-eight point fifty-three per cent (98.53%) of the total
capital stock of Telems Celular, of which five hundred and
forty-two thousand, six hundred and thirty-nine (542,639) are
common shares, representing ninety-nine point sixty-three per
cent (99.63%) of the voting capital, and six hundred and fifty
thousand, and seventeen (650,017) preferred shares,
representing ninety-seven point sixty-two per cent (97.62%) of
the non-voting capital of the referred company;




(iv) in case of Teleron Celular, exclusively seven
hundred and four thousand, eight hundred and forty-four
(704,844) shares, represented by two



30








 





hundred and fifty-one thousand, and thirty-two (251,032) common
shares and four hundred and fifty-three thousand, eight hundred
and twelve (453,812) preferred shares, all of them without face
value, validly issued, fully subscribed and paid-up, which
position shall remain valid and unchanged until the Closing Date.
TCOPar is the owner, in the aggregate, of at least six hundred and
eighty-five thousand, two hundred and twenty-three (685,223)
shares representing ninety-seven point twenty-two per cent
(97.22%) of the total capital stock of Teleron Celular, of which
two hundred and forty-six thousand, six hundred and fifty-two
(246,652) are common shares, representing ninety-eight point
twenty-five per cent (98.25%) of the voting capital, and four
hundred and thirty-eight thousand, five hundred and seventy-one
(438,571) preferred shares, representing ninety-six point
sixty-four per cent (96.64%) of the non-voting capital of the
referred company;




(v) in case of Teleacre Celular, exclusively one
million, nine hundred and twenty-two thousand, six hundred and
sixty-five (1,922,665) shares, represented by nine hundred and
ninety-nine thousand, seven hundred and sixty-two (999,762)
common shares and nine hundred and twenty-two thousand, nine
hundred and three (922,903) preferred shares, all of them
without face value, validly issued, fully subscribed and
paid-up, which position shall remain valid and unchanged until
the Closing Date. TCOPar is the owner, in the aggregate, of at
least one million, eight hundred and ninety thousand, nine
hundred and fifty-six (1,890,956) shares representing
ninety-eight point thirty-five per cent (98.35%) of the total
capital stock of Teleacre Celular, of which nine hundred and
ninety-nine thousand, three hundred and fifty (999,350) are
common shares, representing ninety-nine point ninety-six per
cent (99.96%) of the voting capital, and eight hundred and
ninety-one thousand, six hundred and six (891,606) preferred
shares, representing ninety-six point sixty-one per cent
(96.61%) of the non-voting capital of the referred company;




(vi) in case of NBT, exclusively seventy-two million,
six hundred and ninety-two (72,000,692) shares, represented by
twenty-four million, one thousand (24,001,000) common shares
and forty-seven million, nine hundred and ninety-nine
thousand, six hundred and ninety-two (47,999,692) preferred
shares, all of them without face value, validly issued, fully
subscribed and paid-up, which position shall remain valid and
unchanged until the Closing Date. TCOPar is the owner, in the
aggregate, of at least seventy million, eight hundred
thousand, six hundred and thirty-nine (70,800,639) shares
representing ninety-eight point thirty-three per cent (98.33%)
of the total capital stock of Norte Brasil Telecom S.A.
(“NBT”), of which twenty-two million, eight hundred thousand,
nine hundred and forty-seven (22,800,947) are common shares,
representing ninety-four point ninety-nine per cent (94.99%)
of the voting capital, and forty-seven million, nine hundred
and ninety-nine thousand, six hundred and ninety-two



31








 





(47,999,692) preferred shares, representing one hundred per cent
(100%) of the non-voting capital of the referred company; and




(vii) in case of TCO IP, exclusively one million
(1,000,000) shares, represented by five hundred thousand
(500,000) voting common shares and five hundred thousand
(500,000) preferred shares, all of them without face value,
validly issued, fully subscribed and paid-up, which position
shall remain valid and unchanged until the Closing Date.
TCOPar is the owner, in the aggregate, of at least nine
hundred and ninety-nine thousand, nine hundred and ninety-six
(999,996) shares representing ninety-nine point ninety-nine
per cent (99.99%) of the total capital stock of TCO IP S.A.
(“TCO IP”), of which four hundred and ninety-nine thousand,
nine hundred and ninety-six (499,996) are common shares,
representing ninety-nine point ninety-nine per cent (99.99%)
of the voting capital, and five hundred thousand (500,000)
preferred shares, representing one hundred per cent (100%) of
the non-voting capital of the referred company.



8.1.2 Unencumbered Shares. On the Closing Date, except as mentioned in Annex
8.1.2, Sellers (and/or CP) shall be the lawful owners of the Controlling Shares
and TCOPar shall be the lawful owner of the TCO’s Controlled Companies’ shares,
entirely free and clear of any liens, pledges, charges, options, priority
rights, usufruct and other claims of any nature whatsoever, and shall have all
the rights and power required by law for the sale, transfer and delivery of the
Controlling Shares to Purchaser under the terms of this Final Agreement. The
sale, transfer and delivery of the Controlling Shares to Purchaser under the
terms of this Final Agreement shall transfer to and vest Purchaser in the
regular and full ownership thereof and, indirectly, of TCOPar’s shares in the
TCO’s Controlled Companies, except for the restrictions mentioned in Annex
8.1.2.



8.1.3 Existence and Regular Standing. Sellers, TCOPar and TCO’s Controlled
Companies:




     (a) are companies duly organized and validly existing in accordance with
the laws of the Federative Republic of Brazil;




     (b) have full power and corporate authority required for owning and
operating their properties, businesses and assets and for conducting their
businesses as they are presently conducted;




     (c) except to the extent the failure to comply with any laws and/or
regulations does not substantially affect or prevent the conduction of such
activities and operations such as they are presently conducted by Sellers, by
TCOPar and by TCO’s Controlled Companies, to Sellers’ Knowledge, Sellers,
TCOPar and TCO’s Controlled Companies have been presently conducting and
operating their businesses in accordance with the laws and regulations
applicable to their respective industries;



32








 





     (d) except for the authorizations and licenses the absence of which may
not entail risk of interruption and/or impairment for Sellers, TCOPar and TCO’s
Controlled Companies to operate their businesses as they have been presently
operated by them, to Sellers’ Knowledge, Sellers, TCOPar and TCO’s Controlled
Companies obtained or are in process of obtaining the authorizations and
licenses required by the federal, state and local authorities as may be
required for the conduction of their activities as they are presently
conducted; and




     (e) to Sellers’ Knowledge, the conduction by Sellers, by TCOPar and by
TCO’s Controlled Companies of their activities does not violate any law or
administrative regulation in such a manner as to substantially impair or
prevent the conduction of such activities as they are presently conducted by
Sellers, by TCOPar and by TCO’s Controlled Companies.



8.1.4 Authority Relating to This Agreement. Sellers have full legal capacity to
enter into this Final Agreement and to perform the transactions contemplated
herein. This Final Agreement has been duly and validly entered into and
constitutes a valid and binding agreement, enforceable in relation to Sellers
in accordance with its terms.



8.1.5 Non-Infringement. The execution of this Final Agreement (i) does not and
will not infringe any provision of the Sellers’ Articles of Incorporation or
any other corporate document, (ii) does not and will not infringe or give cause
to any relevant default in contractual provisions or commitments to which
Sellers are parties, except those eventually provided for in the agreements
representing Sellers’ Actual Obligations, (iii) does not and will not infringe
any provision of law, decree, rule or regulation, administrative or judicial
order to which Sellers are subject, (iv) does not and will not require any
consent, approval or authorization of, notice to, or filing or registration
with any individual or legal entity, or court, in any case in Brazil, save for
those authorizations and other formalities already provided in this Final
Agreement.



8.1.6. Financial Statements. The audited balance sheet and financial
statements of TCOPar as of December 31, 2002, including the management’s and
auditor’s reports, attached hereto as Annex 2.2, fairly present the financial
condition of TCOPar on a consolidated basis, and have been prepared in
conformity with Brazilian generally accepted accounting principles. In
comparison to the financial statements as of September 30, 2002, delivered to
Purchaser on the date of the Preliminary Agreement, equity changes to the
financial statements as of December 31, 2002 arise solely from transactions
carried out in the regular course of TCO’s business. In the same manner, the
balance sheets and financial statements of TCO’s Controlled Companies as of
December 31, 2002, attached hereto as Annex 8.1.6, fairly present the financial
condition of the respective TCO’s Controlled Company and have been prepared in
conformity with Brazilian generally accepted accounting principles. Since the
date of the financial statements as of December 31, 2002 until the Closing Date
(i) provided that under Sellers’ and/or their directors’ and officers’ control,
there shall be no adverse material change to TCOPar’s and TCO’s Controlled
Companies’ equity situation; (ii) the accounting methods and criteria used by
TCO in



33








 



previous fiscal years shall not be changed by an act of the management of
TCOPar and/or TCO’s Controlled Companies.



8.1.7 Closing Feasibility. Sellers, on this date, are not aware of the
existence of any impairment ascribable to Sellers and not disclosed to
Purchaser, which may cause a delay to or render the Closing on the date
provided for herein unfeasible.



8.1.8 Corporate Records and Shareholders’ Agreements. To the extent of the
Declarants’ Knowledge, TCO’s corporate books and records are true, correct and
complete in all material aspects, in compliance with the applicable laws, and,
except for NBT Shareholders’ Agreement, there are not any shareholders’
agreement in effect, registered or not in the referred corporate books and
records, to which Sellers and/or TCOPar are parties.



8.1.9 Assets. To the extent of the Declarants’ Knowledge, TCOPar and TCO’s
Controlled Companies are the lawful owners of or hold the right to use the
assets that are necessary and essential for the conduction of their operating
activities, all of them being free and clear of any liens, save for those liens
described in Annex 8.1.9. Referred assets necessary and essential for the
conduction of its operating activities are duly recorded in TCO’s financial
statements as of December 31, 2002 and are in good operating condition (except
for regular wear and tear) and are adequate for the conduction of TCO’s
businesses and operations, as they are presently conducted, and shall remain as
such until the Closing Date, without having occurred any relevant change in the
amount and quality of the assets in question as herein declared.



8.1.10 Taxes. To the extent of the Declarants’ Knowledge, TCOPar and
TCO’s Controlled Companies comply and will continue complying until the
Closing, in their material aspects, the applicable tax laws and regulations in
connection with their operations. To the extent of the Declarants’ Knowledge,
TCOPar and each of TCO’s Controlled Companies have paid all the Taxes payable
by them until this date, except those (i) recorded in the TCO’s financial
statements as of December 31, 2002; and/or (ii) which are being discussed in
good faith, either in court or in an administrative instance. To the extent of
the Declarants’ Knowledge, Annex 8.1.10 lists the existing administrative
procedures and tax proceedings to which TCO is a party and which involve a
discussion about Taxes in amounts (individually, or in the aggregate, in case
of a series of lawsuits or administrative proceedings related among themselves)
equal to or higher than five million reais (R$5,000,000.00).



8.1.11 Litigations. To the extent of the Declarants’ Knowledge, Annexes 8.1.11
and 4.5 of this Final Agreement list all litigations, administrative
proceedings and arbitrations (except those of a tax and labor nature provided
for in Sections 8.1.10 and 8.1.12) involving, either individually or in the
aggregate, in case of a series of litigations, administrative proceedings or
arbitrations related among themselves, a discussion of an amount equal to or
higher than one million reais (R$1,000,000.00), with respect to which TCO has
been up to this date served summons or process by any court or department or
agency of any federal, state or local government, whether in Brazil or abroad.



34








 




8.1.12 Labor Claims. To the extent of the Declarants’ Knowledge, TCOPar and
TCO’s Controlled Companies comply and will continue complying until the
Closing, in their material aspects, the applicable labor and social security
laws and regulations in relation to their respective employees. To the extent
of the Declarants’ Knowledge, Annex 8.1.12 lists all labor claims to which
TCOPar, or any of TCO’s Controlled Companies is a party, which on this date,
either individually or in the aggregate, in case of a series of claims related
among themselves, may entail a liability of more than five hundred thousand
reais (R$500,000.00) for TCOPar and/or TCO’s Controlled Companies.



8.1.13 Benefits. To the extent of the Declarants’ Knowledge, Annex 8.1.13
lists the special benefits, bonus and profit sharing programs offered by TCO to
any of its employees and officers, including, without limitation, stock
purchase or stock call options.



8.1.14 Related Transactions. Annex 8.1.14 lists, if any, in each case: (i)
the agreements and transactions between, on one side, Sellers, their
affiliates, controlled, controlling or companies under common control, and, on
the other side, TCOPar and TCO’s Controlled Companies; (ii) the credits, rights
and shares of Sellers, their affiliates, controlled, controlling or companies
under common control, against or enforced against TCOPar or TCO’s Controlled
Companies; (iii) TCOPar’s and TCO’s Controlled Companies’ money obligations,
whether contractual or legal, to Sellers or Sellers’ officers, their
controlling shareholders, affiliates or companies under common control, either
direct or indirect (except TCOPar and TCO’s Controlled Companies); and (iv)
Sellers’ debts to TCOPar or any of TCO’s Controlled Companies.



8.1.15 Dividends and Interests on Net Equity. Dividends and interests on net
equity declared or credited by TCOPar referring to fiscal year 2002 and not yet
paid until this date total ninety-three million, four hundred and ninety-eight
thousand, six hundred and forty-three reais and sixty-nine cents
(R$93,498,643.69); no additional dividends or interests on net equity have been
or will be declared until the Closing Date, except by legal requirement.



8.1.16 Action Plan: Until the Closing Date, TCOPar and all TCO’s Controlled
Companies, their officers and controlling shareholders, shall have complied
with the basic management guidelines provided for in common agreement among the
parties and/or in the Action Plan subject matter of Annex 5.3 of this Final
Agreement, as well as the restrictions set forth in Section 5.3 above.



8.2 Sellers’ representations and Guaranties contained in Sections 4.3(d) and,
as so indicated, in Section 8.1 above, are qualified and limited to Sellers’
actual “Knowledge”, on this date, in relation to the declared matter, situation
or fact, in any case in the persons of Sellers’ directors and officers (members
of the board of directors and/or officers), in their capacity as final
controlling shareholders and, if the case may be, members of the board of
directors of TCOPar and/or TCO’s Controlled Companies, it being further
declared, for the due purposes, that Sellers’ directors and officers and their
direct or indirect controlling shareholders have not carried out a specific
audit for the purpose of making the representations and Guaranties included in
this Final Agreement.



35








 




8.3 Purchaser and Brasilcel represent and warrant to Seller, without any
restrictions whatsoever, as follows:



8.3.1 Existence and Regular Standing. Purchaser and Brasilcel (a) are
companies duly organized and validly existing and in regular standing in
accordance with the laws of the Federative Republic of Brazil and of the
Kingdom of the Netherlands, respectively, (b) each of them has full power and
authority as required for owning and operating their properties, businesses and
assets and for conducting their businesses in the manner as they are presently
conducted, and (c) have obtained all the authorizations and licenses required
by federal, state and local authorities for the conduction of their respective
activities and the conduction of such activities do not infringe any
administrative law or regulation.



8.3.2 Authority Relating to This Agreement. Purchasers and Brasilcel have full
legal capacity and each of them has obtained all corporate authorizations to
enter into this Final Agreement and to perform the transactions contemplated
herein. This Final Agreement has been duly and validly entered into and
constitutes a valid and binding agreement, enforceable in relation to Purchaser
in accordance with its terms.



8.3.3 Non-Infringement. The execution of this Final Agreement (i) does not and
will not infringe any provision of Purchaser’s and/or Brasilcel’s Articles of
Incorporation or any other corporate document, (ii) does not and will not
infringe or give cause to any relevant default in contractual provisions or
commitments to which Purchaser and/or Brasilcel are parties, or by which they
are bound, (iii) does not and will not infringe any provision of law, decree,
rule or regulation, administrative or judicial order to which Purchaser and
Brasilcel are subject, (iv) does not and will not require any consent, approval
or authorization of, notice to, or filing or registration with any individual
or legal entity, or court, save for those authorizations and other formalities
already provided in this Final Agreement.



8.3.4 Closing Feasibility. Purchaser is not aware of the existence of any
impairment ascribable to Purchaser and not disclosed to Sellers, which may
cause a delay to or render the Closing on the date provided for herein
unfeasible.



IX. Information to be Supplied by TCO.



9.1 Sellers shall request TCOPar and TCO’s Controlled Companies, not later than
twenty-one (21) days counted as from this date, to deliver to Purchaser, in
writing, in confirmation for the information supplied in the course of
Purchaser’s Audit, the following information which, in the opinion of the
respective managements of TCOPar and TCO’s Controlled Companies, is true and
complete on the date of this Final Agreement.



9.1.1 Real and Personal Properties. List of properties owned by TCOPar and by
the TCO’s Controlled Companies.



36








 




9.1.2 Litigations. List of lawsuits, administrative proceedings, arbitrations
or investigations/inspections in course, limited as follows: (a) lawsuits and
administrative proceedings relating to Taxes resulting, individually, in a
liability in excess of three hundred thousand reais (R$300,000.00) for TCOPar
or TCO’s Controlled Companies; (ii) labor claims resulting, individually, in a
liability in excess of fifty thousand reais (R$50,000.00) for TCOPar or TCO’s
Controlled Companies; (iii) litigations, administrative proceedings,
arbitrations or investigations of any nature whatsoever, including of an
environmental nature, or involving intellectual property, resulting,
individually, in a liability in excess of three hundred thousand reais
(R$300,000.00) for TCOPar or TCO’s Controlled Companies; and (iv)
administrative procedures or claims of a regulatory nature, filed by Anatel,
whatever the amount thereof may be.



9.1.3 Bargaining Agreements. List of collective agreements or other applicable
agreements with any labor union or organization relating to TCOPar’s and TCO’s
Controlled Companies’ employees.



9.1.4 Agreements and Commitments. List of existing agreements to which TCOPar
and/or any of TCO’s Controlled Companies is a party and which involve
liabilities of at least one million reais (R$1,000,000.00) and for a term of 12
months or more, as well as of the agreements, whatever their amount and/or term
may be, containing a provision under which the disposal of the Controlling
Shares shall result in the acceleration of any obligation provided for therein.



9.1.5 Intellectual Property, Software. List of “Intellectual Properties” owned
by TCOPar and TCO’s Controlled Companies, namely: (i) trademarks, trade names,
service marks, logotypes, domain names; (ii) copyrights, either registered or
not; (iii) registration and renewal applications; (iv) software; (v) licensing
agreements and sub-licensing agreements on behalf of third parties and received
from third parties, relating to any of the above mentioned items.



9.1.6 Bank Accounts: List of all bank accounts and account balances existing on
the date of this Final Agreement, showing the names of persons authorized to
operate them in each case.



9.1.7 Insurances: List of insurance policies obtained by TCOPar and TCO’s
Controlled Companies identifying, in each case, the respective insurer, premium
and coverage amounts, type of insurance and outstanding claims over them.



9.1.8 Powers of Attorney: List of all the powers of attorney in effect granted
by TCOPar and each of TCO’s Controlled Companies, whereby general powers are
granted for representation of the respective grantor in the performance of any
administrative or managing acts, including for assumption of obligations and
execution of any documents or representation in face of any third party or
authority.



X. Confidentiality.



37








 




10.1 The parties are committed, without limitation as to time, to disclose the
terms pertaining to the Purchase strictly to the extent necessary due to a
legal or regulatory requirement to which the parties may be subject, it being
their duty to previously agree upon the text and contents of any material
before making it available for public disclosure.



XI. Binding Effect.



11.1 Each of the parties hereto acknowledges that the execution of this Final
Agreement shall be binding upon the parties and their respective successors at
any title whatsoever.



XII. CADE and Registrations in Brazil and Abroad.



12.1 The parties shall fully cooperate towards the preparation and presentation
of a joint concentration act required by the applicable laws, and shall make
their respective best efforts towards obtaining the approval from the
Administrative Council for Economic Defense – CADE as for the transactions
contemplated hereunder, as well as they shall cooperate for the compliance with
any other rules issued by Brazilian or foreign authorities as a result of the
sale of TCO’s stock control which is the subject matter of this Agreement. All
the fees and expenses incurred with respect to obtaining the approval from the
CADE shall be borne by the parties, in equal amounts, and each party shall be
responsible for the payment of its respective consultants’ and attorneys’ fees.



XIII. Notices.



13.1 All notices and communications required in this Agreement or related
hereto shall be made in writing and delivered in hand, sent by registered mail
(with return receipt), or by fax or reputable courier service, to the address
and attention of the persons indicated below:




	 	 	 
	Sellers:	 	
Purchaser:
	Bid S.A. / Splice do Brasil	 	Telesp Celular Participações S.A.
	Telecomunicações e Eletrônica S.A.	 	c/o: Srs. Francisco José Azevedo
	c/o: Srs. Antonio Roberto Beldi	 	Padinha Gilson Rondinelli Filho
	          Marco Antonio Beldi	 	Rua Abílio Soares, 409 – Paraíso
	Av. Juscelino Kubitschek de Oliveira, 154	 	04005-001 — São Paulo, SP
	Bairro Lageado	 	Fax:(21) 2586-5855 / Fax:(11) 3059-7972
	18110-901 — Votorantim — SP	 	and (11) 3059-7962
	Fax:(15) 243-5155/243-5166	 	 
	 	 	Intervening Party:
	cc: Maria Cristina Cescon Avedissian	 	Brasilcel N.V.
	Souza, Cescon Avedissian, Barrieu e Flesch	 	c/o: Fernando Abella Garcia
	Rua Funchal, 263, 11o andar	 	Praia de Botafogo, 501, 7o andar
	04551-060 — São Paulo, SP	 	22250-040 — Rio de Janeiro — RJ
	Fax:(11) 3089-6565	 	Fax: (21) 2586-6916







38








 



	 	 	 
	Intervening Parties:	 	
Cc: Evandro P. Kruel
	Cabo Paulista S.A. / Fixcel S.A.	 	
Praia do Botafogo, 501, 7o andar
	c/o: Srs. Antonio Roberto Beldi e	 	
22250-040 — Rio de Janeiro – RJ
	Marco Antonio Beldi	 	
Fax: (21) 2586-6517
	Rua Santa Clara, 49, 2o andar, S. 02	 	
Moshe B. Sendacz
	18030-420 – Sorocaba — SP	 	
Machado, Meyer, Sendacz e Opice Advs.
	Fax: (15) 232-6872	 	
Rua da Consolação, 247, 4o andar
		 	
01301-903 São Paulo, SP.
		 	
Fax: (11) 3150-7071





Notices will be deemed as made (i) upon remittance, if sent by fax during
business hours of the addressee; (ii) at 09:00 a.m. of the business day
immediately following the day of remittance, if sent by tax after business
hours of the addressee; and (iii) at 09:00 a.m. o the business day following
the day of remittance, if sent by courier. The parties may change their
respective addresses as above indicated, whenever the new address is located
inside the domestic territory, upon notice to all the other parties.



XIV. Amendment; Waiver.



14.1 This Final Agreement may not be changed or amended, except through an
express amendment, in writing, executed by all the parties hereto.



14.2 Any eventual omission, waiver or tolerance by any of the parties in
relation to the terms of this Final Agreement, including, however being not
limited to, the exercise of rights and notices, shall be valid only
individually and shall not be understood as a waiver of the rights arising
herefrom neither shall represent any revocation, amendment or novation of the
obligations undertaken herein, nor shall discharge the other party from the
full performance of its obligations hereunder.



XV. Specific Performance and Losses and Damages.



15.1 In case of violation by either party of any of the obligations undertaken
pursuant to this Final Agreement, the other party (non-defaulting party) shall
be entitled to demand the specific performance of the obligations under the
terms of the provisions in Article 461 of the Code of Civil Procedure, the
defaulting party being, further, liable to losses and damages to which it may
have given cause.



XVI. Expenses.



16.1 Each of the parties shall be responsible for the costs and expenses
incurred by it during the course of negotiations, preparation and execution of
this Final Agreement.



XVII. Assignment and Joint and Several Liabilities.





39








 




17.1 Sellers may not assign to third parties the rights and obligations arising
out of this Final Agreement, except for the assignment and transfer of such
rights and obligations, either in whole or in part, to CP and/or to Fixcel,
which assignment and transfer shall be expressly authorized by this Agreement,
it being certain, however, that Bid, Fixcel and Splice shall be jointly and
severally liable to Purchaser for all the obligations provided for in this
Final Agreement. The provisions hereof do not prevent Sellers from assigning
their credit rights under the terms of Art. 286 of the Brazilian Civil Code.



17.2 Purchaser may assign its rights and obligations hereunder, by previously
notifying Seller of such assignment, provided that Purchaser shall remain
severally liable for all its obligations hereunder.



XVIII. Entire Agreement. Severability.



18.1 The parties since now agree that the terms and conditions of this Final
Agreement and its Annexes, which are an integrant part hereof, represent the
final terms and conditions between the parties regarding the Purchase.



18.2 By reason of the entering into this Final Agreement, the parties
acknowledge the compliance with their respective obligations provided for in
Section 5.2 of the Preliminary Agreement, there being nothing due by either of
them to the other party by virtue of the provisions contained in referred
Section 5.2 of the Preliminary Agreement.



18.3 If any provision contained in this Final Agreement shall be deemed
unlawful, invalid or non-enforceable in any aspect, the validity, lawfulness
and enforceability of the other provisions contained herein shall not be, in
any circumstance, affected or impaired by such fact. The parties shall agree in
good faith upon the substitution of valid, lawful or enforceable provisions,
the economic effect of which may be equivalent to the economic effect of the
provisions deemed to invalid, unlawful or non-enforceable.



XIX. Governing Law and Jurisdiction.



19.1 This Final Agreement shall be governed and construed in accordance with
the laws of the Federative Republic of Brazil. The parties shall attempt to
settle their differences arising out of this Final Agreement on an amicable
basis, in good faith. Should an amicable settlement of disputes eventually
arising out of the construance or application of this Final Agreement be
impossible, such disputes and doubts shall be submitted to the jurisdiction of
the courts of the Judicial District of the State of São Paulo, at the exclusion
of any other, however privileged it may be.



In witness whereof, the parties execute this Final Agreement in four (4)
counterparts of the same contents and form, in the presence of the two (2)
witnesses below.




São Paulo, March 24, 2003.





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Sellers:










BID S.A.

Marco Antonio Beldi

Vice-President Director










SPLICE DO BRASIL

TELECOMUNICAÇÕES E ELETRÔNICA S.A.

Marco Antonio Beldi

Vice-President Director



(Continued page of signatures of the Stock Purchase Agreement executed on
March 24, 2003 by and between, on the one side, as sellers, Bid S.A. and
Splice do Brasil Telecomunicações e Eletrônica S.A. and, on the other side, as
purchaser, Telesp Celular Participações S.A. and, further, as intervening
parties, Brasilcel N.V., Cabo Paulista S.A. and Fixcel S.A.)




Purchaser:










TELESP CELULAR PARTICIPAÇÕES S.A.

Francisco José Azevedo Padinha

Gilson Rondinelli Filho

Directors




Intervening Parties










BRASILCEL N.V.

Francisco José Azevedo Padinha

Fernando Abella Garcia

Attorneys-in-fact










CABO PAULISTA S.A.

Antonio Roberto Beldi

Attorney-in-fact










FIXCEL S.A.

Antonio Roberto Beldi

Vice-President Director




Witnesses:




	 	 	 	 	 	 	 
	1.	 	 


	 	2.	 	 










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